Unlock the Secret to Outperformance: Alpha in Investing Explained
07 May 2025 · Sachin Gadekar
Understand the secret weapon behind market-beating portfolios and how investors can generate alpha with modern tools and
Introduction
When it comes to investing, outperforming the market is the holy grail—and “alpha” is the term used to describe that edge. But what exactly is alpha? How do savvy investors measure and pursue it? And more importantly, how can retail and young investors in India start generating alpha for themselves?
In this blog, brought to you by getultra.club, we’ll unpack the concept of alpha, why it matters in today’s fast-evolving investment landscape, and how new-age asset classes like fractional ownership, invoice discounting, and asset leasing are helping generate it for smart investors.
What Is Alpha in Investing?
Alpha is a measure of an investment's performance relative to a benchmark index. In simpler terms, if your portfolio returns more than the benchmark (say, Nifty 50), the extra return is called alpha.
📈 Example:
If your portfolio delivers a 14% return while the Nifty 50 returns 10%, your alpha is +4%.
Key points:
Positive alpha indicates outperformance.
Negative alpha means underperformance.
Alpha is typically attributed to investor skill, strategic asset allocation, or superior market insights.
Alpha vs. Beta: Know the Difference
| Term | Meaning | What It Measures |
|---|---|---|
| Alpha | Excess return over the benchmark | Manager skill or unique opportunity |
| Beta | Sensitivity to market movements | Volatility relative to the market |
Why Alpha Matters in 2025
The traditional investing landscape—dominated by mutual funds, FDs, and real estate—is no longer sufficient for achieving outperformance. Rising inflation, global market volatility, and access to new-age investment platforms are forcing investors to think differently.
In 2025, Indian investors—especially Gen Z and millennials—are turning to unconventional yet regulated avenues to beat the market. These include:
Fractional ownership in real estate
Asset leasing
Invoice discounting
Private debt
Fixed-income instruments beyond FDs
How Alpha Is Generated Today?
Generating alpha is no longer about just stock picking. It’s about identifying mispriced risk, alternative yield, and inefficiencies in the market. Here's how platforms like GetUltra enable investors to do that:
1. Asset Leasing
Earn returns by investing in income-generating assets leased to corporations or SMEs. These are low-volatility, high-yield instruments—perfect for generating alpha without equity risk.
2. Invoice Discounting
Earn returns by funding short-term business invoices. This strategy offers:
Quick liquidity
Low correlation with traditional markets
Returns of 12–18% annually
3. Fractional Ownership
Real estate remains a time-tested wealth builder, but fractional ownership makes premium properties accessible to retail investors. With rental yield + capital appreciation, this is a smart alpha-generating bet.
Can You Measure Alpha?
Yes, and it's often done through the Capital Asset Pricing Model (CAPM). But for simpler cases:
Alpha = Portfolio Return – Benchmark Return
However, a true alpha strategy will:
Manage risk via diversification
Leverage data and analytics
Use active rebalancing and market-timing to outperform
Fixed Income ≠ Passive
In the past, fixed-income instruments like FDs were seen as safe but low-yield. That’s changing.
At platforms like GetUltra, fixed-income opportunities:
Offer higher yields than FDs (up to 10–12%)
Are curated for risk and compliance
Include tax-efficient structures
With credit-risk underwriting and low default rates, fixed income can now also be a source of alpha.
Risks in Alpha Generation
| Risk Type | Description |
|---|---|
| Concentration Risk | Overweighting a single asset class |
| Liquidity Risk | Difficulty exiting investments like real estate |
| Operational Risk | Platform or management-related issues |
| Market Timing | Poor entry or exit strategy reduces alpha |
How to Start Generating Alpha with GetUltra
Explore Curated Deals across asset leasing, invoice discounting, and bonds.
Set Your Risk Appetite and time horizon.
Invest in Fractions, starting from ₹10,000.
Track Performance with real-time dashboards.
Rebalance Regularly for sustainable alpha.
Whether you're a working professional or a seasoned HNI, building an alpha-generating portfolio is now possible digitally.
Final Thoughts: The Future Is Not Passive
In 2025, alpha is no longer the domain of hedge funds and private equity. With digital platforms like getultra.club, long-term outperformance is being democratized.
The question isn’t whether you can beat the market—it’s whether you’re choosing the right tools to do it.
FAQs: Alpha in Investing
Q1. Is alpha guaranteed in any investment?
No. Alpha is the result of strategy, timing, and sometimes luck. It's not guaranteed and should be pursued with risk management.
Q2. Can fixed income generate alpha?
Yes. With high-yield, low-risk options like invoice discounting and private debt, fixed income can outperform traditional benchmarks.
Q3. How can I start investing in alpha-generating products?
Platforms like getultra.club offer curated, verified opportunities in alternative assets to help you start small and grow strategically.
Q4. Is alpha the same as profit?
Not exactly. Alpha is excess profit beyond a benchmark. Profit can be positive while alpha is negative if you underperform the market.
Q5. Is alpha better than beta?
They serve different purposes. Beta measures risk. Alpha measures skill or opportunity. A good portfolio balances both.