Alpha is calculated as the difference between the actual returns and the expected returns from the fund. One can calculate the expected returns from the fund by multiplying the returns generated by the benchmark index and the fund beta. 

Alpha considers the correlation of the market movements with the fund performance and measures the outperformance generated due to better investment decisions. A higher alpha is always considered an indication of the better investment strategies adopted by the fund managers. 

When the fund alpha is zero, it means that the fund has generated similar returns as those expected out of the fund. As such, it is not an achievement per se, even while the fund may have generated positive returns. One can only consider the fund to be outperforming if the fund has outperformed the benchmark index by a multiple higher than the fund beta. 

While Alpha measures the fund's outperformance against the market returns, beta measures the correlation between the fund performance and market performance. When the fund has a higher beta, the expected returns also multiply in a similar proportion, making it difficult for the fund to outperform the market expectations. As such, a higher beta may not necessarily reflect a higher alpha as well for the fund. 

While two funds may generate similar returns for the investors with similar benchmark indices, such funds may or may not generate similar Alpha. The difference lies in having acknowledged that the funds may have a different beta. As such, the return expectations may be different from both the funds. Alpha tends to capture the difference between the expectation and actual performance of the funds.

Alpha captures the historical returns of the mutual fund scheme and compares the same with the expected returns from the fund. As such, it is a backwards-looking data point. Just like any other historical data, Alpha does not guarantee future returns for the fund. 

Investors must understand that positive Alpha for a fund reflects the historical outperformance of the fund and carries no assurance for similar performance in the future. 

When one reviews the mutual fund performance through different statistical data points, one must ensure that such data points, including Alpha, and beta are seen over the long term. A fund may have underperformed over the short-term but may still be considered for long-term financial goals basis the long-term performance. 

It is a common perception that negative Alpha means the fund has underperformed the benchmark index and may not be viewed as a good performance by the fund manager. However, such Alpha may also be the result of the fund expenses. 

It may so happen that the fund may have performed in sync with the benchmark index, but the expense ratio may have eaten into the fund returns. Such problem can often arise with passive funds since such funds will tend to mirror portfolio performance as that of the benchmark indices. 

However, the actual returns for the investors will be net of scheme expenses. As such, the effective returns will most likely generate a negative alpha. Investors should be wary of falling prey to the generic perceptions instead of understanding the broader dynamics of such underperformance.