α=(ri _ RF)βI(RM _ RF)
Among them, α is the independent average rate of return of the I-th fund. If α is significantly positive, it means that the performance of the fund is better than the market; On the contrary, it is not as good as the market. It represents the difference between the return rate of fund portfolio and the return rate of market portfolio under the same level of system crisis.
Zhan Sen index is also based on the capital asset pricing model, and estimates the excess return of the fund according to SML. Its essence is to reflect the difference between the portfolio return rate and the equilibrium return rate calculated according to the portfolio β coefficient. Of course, the greater the difference, that is, the greater the Zhan Sen coefficient, the better the fund operation effect. If it is positive, it shows that the fund manager has extraordinary stock selection ability, and the evaluated fund is higher than the market average and has good investment performance relative to the market; A negative value indicates that the fund manager's stock selection ability is poor, but he can't run the index, so the performance of the evaluated fund is poor relative to the overall market; Zero means that the fund manager's stock selection ability is average and can only be equal to the index.