What is Alpha?
A fund can beat its benchmark simply by taking on more market exposure (a beta above 1). Alpha strips that out - it’s the return left over after adjusting for how much market risk the fund actually took, the part that’s down to stock selection rather than just leverage to the market.
α = Rp − [Rf + β(Rm − Rf)]
Positive alpha means the fund beat what its beta alone would predict. Zero or negative alpha means it didn’t - even if the headline return looked fine.
Real comparison across 6 funds
CHART
3Y Alpha - 6 real funds
One fund in this set posted negative alpha - beating its own benchmark on paper isn't the same as generating real manager value-add.
Funds compared: Parag Parikh Flexi Cap · DSP Value · ICICI Prudential Value · SBI Focused · Parag Parikh ELSS Tax Saver · SBI Multicap
WHAT THIS MEANS FOR YOU Check alpha before crediting a manager for a fund’s outperformance - a high beta alone can produce a good-looking return in a rising market with zero actual skill involved.
METHODOLOGY Computed over a trailing 3-year window as of 2026-08-31, using each fund’s own beta and benchmark. Data: Punji risk analytics. Not investment advice.