Can anyone explain to me why enhanced indexing has highest alpha? I thought the active stretegy has highest alpha-just by definition?


Before or after management fees?

does it matter?

it does. before fees - alpha is usually greater - but because active management involves the big buck guys who are making recommendations to you - you pay them fees - and after that you are left with almost nothing …

unlike in enhanced indexing where the fees are not as much to take off.

What cpk said.

makes sense. Thanks CPK and magaician.