Active return is the positive or negative result of a portfolio return minus its benchmark return over a specified period of time. For example, if a fund's total return was 9% and the benchmark return was 8%, then the active return for that period was +1%. Unlike the term alpha, active return does not take risk into consideration.
Synonym: relative return
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Kay: Shoot me now. Ken says we need training
on the difference between
active return and alpha.
Ann: Gladly. And, what's wrong with that?
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