High-Volume Strategies Strike 6.98% CAGR But BTI Trails at 364th with 15.46% Drawdown

On August 25, 2025, British American Tobacco (BTI) closed down 1.21% with a trading volume of $0.25 billion, ranking 364th in market activity for the day. The decline follows a broader sector-wide underperformance amid mixed investor sentiment toward tobacco stocks.

Analysts highlighted a strategic backtest result indicating that high-volume trading strategies, such as buying the top 500 stocks by daily volume and holding for one day, yielded a compound annual growth rate (CAGR) of 6.98% from 2022 to 2025. However, the approach faced a maximum drawdown of 15.46%, underscoring the volatility inherent in such strategies. The data suggests that while high-volume stocks can offer steady returns, risk management remains critical, particularly during periods of market stress like the mid-2023 downturn.

The backtest results demonstrate that the strategy delivered moderate, consistent growth over the period but exposed investors to significant short-term losses. This aligns with BTI’s recent performance, as its volume and price movements reflect the broader challenges of balancing liquidity and stability in a sector prone to regulatory and macroeconomic pressures.