Alpha Resurgence Revives Active Equity Management

Recent analysis from Goldman Sachs and Barclays finds the proportion of equity returns attributable to alpha has reached its highest level in over 30 years, signaling a shift away from beta-driven markets. Rising stock dispersion, falling correlations, tighter monetary policy, fragmented growth, and AI-driven winners and losers are cited as drivers; institutions and hedge funds are reconsidering allocations while risks include reversion and overcrowding.