Growth at a Reasonable Price lagged the Indian market on paper. Hold it a few years and it usually beat it.

So here is the honest question, asked the honest way. We did not test GARP once. We built 186 portfolios from it, every month you could have started, held for one, three and five years, and asked how often each beat a plain index fund. The answer depends almost entirely on how long you were willing to wait.

Over a single year GARP barely edged the index, winning about 54% of starts. Stretch the hold to three years and it cleared the market in roughly 74% of them; over five years, 76%, at a median near 22% a year. Nothing about the stocks changed between those numbers. Only the patience did.

The shape of it: modest most years, spectacular in a few

An average hides the character of a strategy, and GARP has a lot of character. Look at the single year outcomes. Half of all starts landed between about −29% and +78%, already a huge span. But the two ends were not even: the best year ran to about +146%, while the worst bottomed near −56%. The upside stretched almost twice as far as the downside. That is the real GARP, not a steady compounder but a stream of modest years lit up by the occasional very big one, with a rare deep loss to match. It is why the average can mislead in both directions, and why the spread, not the midpoint, is the thing to understand before you buy.

Then why does the headline say it lagged?

Because a single ten year line is one start date pretending to be the whole story, and this particular line began just before a deep fall. Run from 2018 straight through, the top thirty compounded at about 5.75% a year against the index's 12.5%, and ₹10 lakh did not even double while the index more than did. One path, caught at the wrong moment, buried an idea that usually worked. The distribution above is the honest picture; the line below is the one unlucky draw everyone quotes.

How deep was the fall you had to sit through?

The distribution rescues the returns, but not your nerves, and here too there is no single number, only a range. Take every start date and its worst drop over the next five years. The typical one lost about half its value; the unluckiest starts fell close to 67%; even the gentlest gave up roughly a quarter. GARP in India is a small and micro cap basket and it falls like one, and the depth of that fall depended heavily on when you walked in. This is the real cost of admission, and even the mild end of the range is more than most investors will hold through.

What you were actually holding

It helps to see the portfolio for what it is. GARP did not buy famous compounders; it bought cheap, growing, mostly small companies, heavy in materials and industrials, the cyclical engine of the economy. Names like JK Paper and Hindalco recurred; more than four fifths of the basket sat in small and micro caps. That is why it needs an expanding economy to shine, and why it swings so hard.

A good idea that asks two things of you

GARP is not broken and it is not magic. It is a sound principle, buy growth without overpaying, wrapped around a volatile, cyclical, small cap portfolio. It asks for two things most investors will not give: a multi year holding period, so the distribution rather than one unlucky start decides your outcome, and the stomach to sit through a fall of most of your money on paper. Give it both and, on this evidence, it usually rewarded you. Give it neither and its single scorecard is exactly the disappointment the headline promised. Which investor you are is the real question, and it is worth answering before the next cycle answers it for you.

So we took it to Krest, and ran it through the whole test.