Buy and Hold Strategy for IWM (iShares Russell 2000 ETF)

The strategy spanned a total of 9121 days, covering the full period from 2000-05-26 to 2025-05-16. This range represents all available trading data we could find — likely from the stock's initial listing date up to the most recent trading day.

Performance Overview

Starting with an initial capital of $10000, we purchased shares of IWM on 2000-05-26, at a price of $33.02 per share (adjusted for splits and dividends). No trading, no tinkering — just a simple buy-and-hold approach.

We held the position continuously through every market twist and turn, never selling. As of 2025-05-16, the price of IWM had risen to $209.85. While we didn't sell, we can still assess the performance by calculating the current value of the investment: $63552.05.

This translates into an annualized return of 7.69% over the entire period. This return is modest — positive, but below the historical average for major equity indices. It may reflect a conservative strategy or a challenging market period.

Drawdown and Risk

The maximum drawdown recorded during this period was 58.64%. This drawdown began after a peak price of $66.59 on 2007-07-13, and reached its lowest point on 2009-03-09 when the price fell to $27.54. The drawdown lasted for 605 days.

The drawdown was substantial, though not uncommon for long-term equity strategies that span full market cycles. This level suggests exposure to significant corrections or crashes. The maximum drawdown lasted over a year, indicating an extended period of underperformance. This duration is typical of major corrections or bear markets.

The return-to-risk ratio, known as the Calmar Ratio, is 0.13. This metric is calculated by dividing the annualized return by the maximum drawdown, both expressed as percentages. It helps assess how efficiently the strategy converted risk into reward.

The return-to-risk efficiency is weak — drawdowns were relatively large compared to the returns achieved.