10-Year Backtest: Buy and Hold XLK (The Technology Select Sector SPDR Fund)

This analysis evaluates a buy-and-hold strategy over the past 10 years, providing a historical perspective on XLK's performance from 2015-07-06 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 XLK on 2015-07-06, at a price of $36.89 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 XLK had risen to $256.96. While we didn't sell, we can still assess the performance by calculating the current value of the investment: $69,648.17 — a total gain of 596.48%.

This translates into an annualized return of 21.44% over the entire period. This is a very strong return — significantly above what is commonly seen in broad-market performance. It often signals a well-timed entry into a high-growth phase.

Drawdown and Risk

The maximum drawdown recorded during this period was 33.56%. This drawdown began after a peak price of $171.66 on 2021-12-27, and reached its lowest point on 2022-10-12 when the price fell to $114.05. The drawdown lasted for 289 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 six months, suggesting a sustained downturn or persistent volatility. These periods can shake investor confidence and demand discipline.

The Calmar Ratio — annualized return divided by maximum drawdown — was 0.64, reflecting the tradeoff between return and volatility.

A strong ratio that reflects a healthy balance between return and drawdown. This level is above average for most equity-based strategies.