Evaluating Mutual Fund Performance Relative to Benchmark

As a financial analyst, you are tasked with evaluating the performance of a mutual fund for your client. The mutual fund achieved a return of 8% over the past year while the benchmark index returned 6%. Discuss the significance of the fund's performance relative to the benchmark.

In your response, address the concepts of alpha and beta, and explain how these measures relate to the fund's investment strategy and risks. Provide a clear articulation of the importance of performance evaluation in portfolio management and how it helps in making informed investment decisions.