Metrics
Alpha
The portion of an investment's return that exceeds the benchmark.
Alpha is the excess return of an investment relative to a risk-adjusted benchmark — typically the S&P 500. An investor who consistently produces positive alpha beats the market after accounting for the risk taken. Active fund managers justify their fees with the promise of delivering alpha.
Academic research shows that only a minority of active managers generate significant alpha over the long run. 13F-based analysis can help identify those whose historical trades led to outperformance — with the usual caveats.