The one screen here that lost to the index. And it may still be the smart choice.
Every other strategy we have tested tried to beat the market. This one tried to lose less. On a decade of Indian data the calmest stocks trailed a plain index fund, ending with less money. But the number on the chart is not the whole story of what you would have earned, or endured.
Ten lakh rupees put into the market's steadiest stocks grew to about ₹30 lakh. The same money in a plain Nifty 500 fund reached ₹38 lakh. So on the only measure a spreadsheet cares about, this screen lost, earning roughly 11% a year against the market's 13.9%. If beating the index is the entire point, you can stop reading. But almost nobody actually earns the index return, because almost nobody sits still through the falls. That is where the calm might pay you back.
It delivered exactly the calm it promised
Look at the falls, not the finish. Where the market gave up about 34% at its worst, the calmest names fell less and, held in a diversified form, fell far less, closer to 30%. No screen in this series bought a smoother ride. The businesses underneath are the reason: steady, boring, cash generative, the kind that keep selling toothpaste and soap whatever the economy does.
A portfolio you could genuinely forget you owned
The opposite of a momentum basket. Where momentum tears itself up every year, this one barely moved. The same defensive names sat in it almost the entire decade: Procter & Gamble, Colgate, Gillette, Hindustan Unilever, household staples held ninety percent of the time or more. Nothing to trade, nothing to tax, nothing to check. A portfolio you could set down and walk away from, which for most investors is worth more than a percent or two of return.
Losing to the index, and possibly beating your own results
Here is the honest verdict. As a pure return engine, the low volatility screen underperformed, and you should not expect the textbook anomaly to hand you free outperformance in India. But investing is not done on paper. The market's 13.9% belongs only to the investor who held every terrifying dip without flinching, and very few do. A strategy that returns a little less but is genuinely easy to hold can beat, in your actual account, an index you keep abandoning at the bottom. Whether that trade is right for you is not a question the backtest can answer. It is a question about you.
So we took it to Krest, and ran it through the whole test.
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Every figure on this page came from a few clicks on Krest. See this exact analysis live and interactive, or point the same test at any strategy you have ever believed.
For education only. Not investment advice or a recommendation to buy, sell, or hold any security, strategy, or product. Past performance does not guarantee future results, and all investing carries risk, including the possible loss of capital. Make your own decisions, and consider consulting a SEBI registered investment adviser.
Best effort analysis. Prepared on a best effort basis from historical data and may contain errors, omissions, or assumptions. Shared for information and discussion only, and should be independently verified before you rely on it. Krest accepts no liability for any decision made or loss incurred based on it.
Figures reflect a low volatility screen (ranked by one year price volatility and beta, market cap above ₹1,000 cr), reconstructed yearly over the last ten years of Indian data (since June 2016), measured against the Nifty 500 total return index. The low risk anomaly has been documented widely, including by Blitz and van Vliet (2007).
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