Definition for : Portable alpha

A fund management technique which seeks to Transfer to a portfolio of low Risk Assets the outperformance (Alpha) of another portfolio made up of a high Risk asset and put options on the Market index of this high Risk asset, structured in such a way as to capture only the Alpha achieved through the management of this second portfolio (outperformance)

(See Chapter 19 The required rate of return of the Vernimmen)

To know more about it, look at what we have already written on this subject