The Professor will present the paper:

Rethinking Mutual Fund Performance: From Traditional Alpha to Achievable Alpha
Abstract: Mutual-fund performance is traditionally measured by alpha, reflecting the utility gain of an unconstrained investor who has access to the fund in addition to the benchmark factors. Yet 88% of fund assets are held by retail investors, who are effectively shortsale constrained. We show that their relevant performance measure is achievable alpha, computed using only factors with strictly positive weights in the constrained benchmark portfolio. Empirically, achievable alpha and value-added reveal weaker absolute performance and starkly different rankings. Achievable alphas also predict fund flows - especially during market turmoil - and indicate that funds are far less scalable than implied by traditional alpha.