The invention provides a soft magnetic alloy having a composition represented by the general formula: Fe alpha Cu beta B gamma SixMyAlz, wherein M is Mo or Nb, and wherein 0.5</= beta </=1.5; 6</= gamma </=10; 12</=x</=18; 2</=y</=5; 1.5</=z</=9.5; and alpha =100-( beta + gamma +x+y+z), all quantities being expressed in at.%. The addition of at least 1.5 at.% of Al to the known Fe-Cu-B-Si soft magnetic compositions results in lower coercivity and lower magnetostriction. The most preferred composition is Fe65.5Si13.5B9Mo3Cu1Al8.
