Looking for the lost Alpha (3)

Alpha versus Beta

In this case, Alpha is not a planet or a constellation. In the world of investments, Alpha is understood as a fund’s excess profitability according to a reference index. For example an Alpha of 3% means that a fund gets a 3% additional return. Usually, Alpha and Beta are measured at the same time.

Finding Alpha means to find above the market’s extra profitability.

A guide to finding Alfa

In a previous article we explained a simple investment strategy to bet on those companies where the most successful hedge funds and the ETFs that clone them are investing. In that article we described an investment strategy used in order to follow the best of the best.

Where to invest, Inbestme’s Scope:

Once we have described the path towards Alpha we are left with just one task: unveil the positions of these “cloners”.

7 positions where all hedge fund cloning strategies are investing:

AAPL: Apple

AGN: Allergan PLC

BRK B: Berkshire Hattaway

EMC: EMC Corp Mass

EQIX: Equinix Inc.

GM: General Motors

GOOGL: Alphabet

13 positions where ALFA and GURU match:

AAPL: Apple

AGN: Allergan PLC

AIG: American International GR

AMT: American Tower Corp

BIDU: Baidu INC – Spon ADR

BRK B: Berkshire Hathaway Inc Cl

CLNY: Colony Capital

DAR: Darling Ingredients


EQIX: Equinix Inc.

GM: General Motors CO

GOOGL: Alphabet

JPM: JP Morgan Chase & Co

Pursuing Alpha is not necessary in order to make successful investments. In fact, building a diversified portfolio is already a good, simple and cost-efficient strategy. If we continue to use the previous article’s nomenclature it would mean to assure the Beta index we chase.

If you also want a greater customization and adding more investment strategies to your portfolio our customized portfolios have been designed with this purpose in mind.

If you want to know how to invest better, easier and at a low cost, click here.

These positions have been taken by the editors from the positions reported by the mentioned services in March 2016. These positions might have changed at the time of writing this article.

In any case, the content provided in this article should not be considered as an offer or recommendation to buy or sell any asset or as guidance on tax matters. Inbestme uses third party information that we consider reliable. However, Inbestme doesn’t guarantee full accuracy of this information. Investors should know that any investment is subject to a potential loss or gain. Indeed, investors could experience different results compared to the results mentioned here: short-term market situation or the time of entry could give different results although long-term markets have a natural upward trend and they tend to average their returns.

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