Mutual Fund's Net Economic Alpha: Definition and Evidence

Sharon Garyn-Tal, Beni Lauterbach

Research output: Contribution to journalArticlepeer-review


It is sometimes argued that existing methodologies for assessing mutual fund's performance are unfair, as fund's return is taken net of expenses and benchmark return is gross of expenses. Examining over 1000 U.S. non-specialized mutual funds in 2001-2009, we nd that the abovementioned problem is minute - the net economic alpha, an alpha that accounts for the actual costs of investing in benchmarks via ETFs, yields similar fund's ranking and classi cation as the traditional methods. Also interesting, the average net economic alpha is only slightly negative, suggesting that the mutual funds industry is not inferior.
Original languageAmerican English
Pages (from-to). 73–91
JournalJournal of Investment Management (JOIM), Second Quarter
Issue number2
StatePublished - 2013


Dive into the research topics of 'Mutual Fund's Net Economic Alpha: Definition and Evidence'. Together they form a unique fingerprint.

Cite this