Maximum Drawdown Definition:
The maximum compounded loss an investment incurred during a period.
How we Calculate Max Drawdown
The formula we use is:
Note: This calculation is done using monthly rolling data you may have difficulty reconciling this with the hypothetical return chart as we use weekly data for periods under 10 Years.
For further reading, Investopedia is a great resource with video explainers. The page on Maximum Drawdown can be found here
For further reading, Investopedia is a great resource with video explainers. The page on Maximum Drawdown can be found here