Backtest: Buy and Hold ARKK (ARK Innovation ETF)

This analysis evaluates a buy-and-hold strategy over the past 11 years, providing a historical perspective on ARKK's performance from 2014-10-31 to 2025-07-03.

Note: This simulation uses adjusted close prices, meaning all historical prices have been retroactively adjusted for splits and dividends. To achieve similar results in practice, you would need to reinvest all dividends automatically as they are paid.

Performance Overview

Starting with an initial capital of $10,000.00, we purchased shares of ARKK on 2014-10-31, at a price of $18.39 per share (adjusted for splits and dividends). No trading, no adjustments — just a simple buy-and-hold approach.

We held the position continuously through every market twist and turn, never selling. As of 2025-07-03, the price of ARKK had risen to $71.09. While we didn't sell, we can still assess the performance by calculating the current value of the investment: $38,653.71 — a total gain of 286.54%.

This translates into an annualized return of 13.51% over the entire period. This return is moderately above long-term averages. It reflects solid long-term performance and an effective strategy.

Drawdown and Risk

The maximum drawdown recorded during this period was 80.91%. This drawdown began after a peak price of $154.01 on 2021-02-12, and reached its lowest point on 2022-12-28 when the price fell to $29.39. The drawdown lasted for 684 days.

The drawdown was very large, indicating high sensitivity to adverse market conditions. Strategies with this profile may offer strong upside but require enduring deep declines. The maximum drawdown lasted over a year, indicating an extended period of underperformance. This duration is typical of major corrections or bear markets.

The Calmar Ratio — annualized return divided by maximum drawdown — was 0.17, reflecting the tradeoff between return and volatility.

The Calmar Ratio is on the lower side of what's commonly seen in broad-market strategies over extended periods.