[simon_]

This is one example of a number of ways the article is weirdly disingenuous. Thea author compares returns to equities but risks to nothing, as you point out. Separately, when he cites an estimate of 3.01% annual return from alpha and 4.62% from beta, all he has to say is that "most" of the returns are from beta and that fees are high, pretending not to understand that returning 3% per year due to alpha after fees would actually be quite impressive and valuable.

[shkkmo]

Except the author also states:

>Gross of fees, the annual return to investors over the period from 1995 to 2009 was 11.42 per cent. Management and performance fees reduced this figure by 3.79 percentage points.

to 7.63 combined from alpha and beta

>Over the same period, the S&P 500 generated an annual return of 8.04 per cent.

The author's point is that saying '%3 per year due to alpha after fees' is disingenuous since the returns aren't actually higher.