"fama and french pointed to value stocks having significantly outperforming growth stocks over decades despite having similar betas."
Not convinced. O'Shaugnessy wrote a book based on the cross-sectional type analysis of Fama and French. The book became a best seller, but when O'Shaugnessy started a fund to apply those principles, his performance was underwhelming.
Anyway, I said that I am not into the methodology of 'measuring' risk as such. Banks use the VaR method, Credit Ratings and a variety of other methods for measuring and controlling risk. The CAPM uses beta. If the CAPM is flawed (and beta does not explain risk) I am happy to see your alternative model which explains market risk/return better.
I know the theory, but I have no use for it.
For practical purposes all you need to know is that the City Pacific Mortgage Fund must offer higher rates to attarct investors than a CBA term deposit. Why ? Higher risk.
