The Beta Continuum

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Abstract
In the terminology of portfolio management, alpha versus beta has become a common expression even though many investors view alpha and beta as two disparate points on an economic compass. The reality is that there are a continuum of returns from pure beta on the one hand to pure alpha at the other end of the scale. Along the way there are multiple investment products in stages on the beta versus alpha scale. The beta continuum can represent the many ways that systematic risk premiums are packaged and delivered to investors. Examples demonstrate that beta is not a single data point but an ever-increasing effort to capture systematic risk premiums in new and innovative ways that, at the end of the continuum, begin to resemble active management.

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