5-Year Backtest: Buy and Hold PEP (PepsiCo, Inc.)

This analysis evaluates a buy-and-hold strategy over the past 5 years, providing a historical perspective on PEP's performance from 2020-07-06 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 PEP on 2020-07-06, at a price of $114.85 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 PEP had risen to $135.38. While we didn't sell, we can still assess the performance by calculating the current value of the investment: $11,787.89 — a total gain of 17.88%.

This translates into an annualized return of 3.35% over the entire period. The return is positive but relatively low. Depending on the time frame and asset, it may underperform passive investment benchmarks.

Drawdown and Risk

The maximum drawdown recorded during this period was 30.32%. This drawdown began after a peak price of $182.35 on 2023-05-12, and reached its lowest point on 2025-05-14 when the price fell to $127.06. The drawdown lasted for 733 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 two years, reflecting a prolonged period of market weakness or asset-specific decline. Recovery from such drawdowns can be psychologically and financially difficult.

The Calmar Ratio — annualized return divided by maximum drawdown — was 0.11, reflecting the tradeoff between return and volatility.

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