ALFA

ALFA (Alpha) is a measure used in finance to evaluate how well an investment or portfolio performs relative to a benchmark, such as a market index. It indicates the value added (or lost) by a manager's active investment choices. A positive ALFA suggests the investment outperformed the benchmark after adjusting for risk, while a negative ALFA indicates underperformance. Essentially, ALFA helps investors assess whether a fund manager's decisions have generated extra returns beyond general market movements, serving as a key indicator of active management success.