The sectors still delivering sustainable alpha

UK Equities

Jon Ingram and John Baker, managers of the J.P. Morgan UK Dynamic fund, take a closer look at criteria required to generate alpha from the UK equity sector.

UK equity investors may often think of alpha simply as outperformance, but it is actually the ability of the individual manager to add skill to the investment process. It is an important measuring stick for active fund managers because consistently generating alpha means delivering a level of additional risk-adjusted return above and beyond expected beta. Finding alpha requires a combined focus on three key criteria: attractive valuation, quality measures (as demonstrated by strength of balance sheet and cashflow) and momentum. Knowing how and where to find them is fundamental to unlo...