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derswap07

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