If 25% CAGR is your goal, why not buy this index?

There are not much comments in this thread, after December 2018.

Low Beta Fund which was mentioned in some parts of the thread got my attention, as I am also realizing that, Low Beta or Low Volatile stocks seems to generate higher returns over a decent period of time compared to High Beta or Moderately High Beta stocks.

I am working on this aspect and studying this aspect at the moment.

I have gone through few old research papers which also seem to suggest the same.

I am curious to know, if any one has invested only in Low Beta stocks (Beta < 1.0) for long period and have found that, they are able to beat NIFTY 50 or NIFTY 100 or NIFTY 500 Index then it would be good case study for all of us.

I am aware that, investing only based on Beta is not full proof strategy but keen to know, if one selects Low Beta stock out of 2 stock choices, Is it possible to generate higher returns over decent period of 5 years or not. Also, since Beta is historic data, there is bias in this approach that, the stock which has low beta in the past may continue have so in future, but sometimes this recency bias may work in an investor’s favor.

Some initial observations about the stocks having high Beta (> 1.5) failed to generate returns in the past 5 to 10 Years. This is based on Ticker Tape Beta numbers and I am not sure about their Beta calculation method fully :

1. Yes Bank
2. IDFC First Bank
3. INDUSIND Bank
4. Bandhan Bank
5. Tata Motors till 2020 (After that, it is showing better returns but still with high Beta)
6. IDFC (Before it was merged with the Bank)
7. STFC
8. LIC HOUSING FINANCE
9. There are more such cases mainly from Steel, Finance, and Cyclic industries.

There are also other examples where High Beta stocks have generated very good returns as well, with high volatility like Laurus Labs, Balaji Amines, and many more. But drawdowns in such stocks is obviously high.