3-Year Backtest: Buy and Hold ARKK (ARK Innovation ETF)

This analysis evaluates a buy-and-hold strategy over the past 3 years, providing a historical perspective on ARKK's performance from 2022-11-07 to 2025-11-07.

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 2022-11-07, at a price of $34.70 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 2025-11-07, the price of ARKK had risen to $77.84. While we didn't sell, we can still assess the performance by calculating the current value of the investment: $22,431.89 — a total gain of 124.32%.

This translates into an annualized return of 30.90% over the entire period. The return is outstanding and far exceeds typical market returns. Such performance usually reflects an unusually favorable period or a high-risk, high-reward asset.

Drawdown and Risk

The maximum drawdown recorded during this period was 39.56%. This drawdown began after a peak price of $67.02 on 2025-02-14, and reached its lowest point on 2025-04-08 when the price fell to $40.51. The drawdown lasted for 53 days.

The drawdown was moderate and aligns with the type of volatility observed in many broad market assets over extended periods. The maximum drawdown lasted over a month, which is fairly common during pullbacks or short-term volatility spikes.

The Calmar Ratio — annualized return divided by maximum drawdown — was 0.78, reflecting the tradeoff between return and volatility.

The Calmar Ratio is very strong — significantly better than most long-term investment strategies, indicating efficient risk management.