Inside Investment: Alpha hunters vs beta grazers

Is the single-minded pursuit of alpha as smart a strategy as conventional wisdom would suggest?

Andrew Capon, State Street
Say it sotto voce, the dirty secret of hedge funds is that they mix alpha and beta as well. A typical long/short equity strategy will have a lot of beta, a fixed income arbitrage fund rather less

These days everyone loves alpha. The pursuit of alpha, we are told, is the proper preoccupation of the rational investor. Fund managers boast of their alpha credentials and pension fund officers declare that alpha will solve the deficit crisis.

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