noun

drawdown

DRAW-down

Drawdown (noun) means In investing, the fall in value from a peak to the following trough, usually given as a percentage. Maximum drawdown is a standard measure of how much an investor would have lost at the worst point. Example: “The fund suffered a 34% drawdown in 2008.”

noun

In investing, the fall in value from a peak to the following trough, usually given as a percentage. Maximum drawdown is a standard measure of how much an investor would have lost at the worst point.

"The fund suffered a 34% drawdown in 2008."

"He judges strategies by maximum drawdown, not headline return."

The act of taking money out of a fund, facility or reserve that has been made available, and the amount taken.

"The first drawdown on the loan is due next month."

"In the UK, pension drawdown lets you take an income while the rest stays invested."

A planned reduction in the size of something, especially the number of troops deployed or a stock of materiel.

"The drawdown of forces will run over eighteen months."

In hydrology, the drop in the level of water in a well, reservoir or aquifer caused by pumping or release.

"Heavy irrigation caused a drawdown of nearly two metres in the aquifer."

How to use drawdown

Learner’s notes

In plain EnglishHow far something has dropped from its highest point, or money taken out of a pot.

When to use it

One word in finance and defence writing. The verb is two words: to draw down.

Easily confused with

draw down drawback → volatility →

Common pairings

maximum drawdown pension drawdown troop drawdown drawdown period

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The fund suffered a 34% _____ in 2008.

Etymology

From the phrasal verb draw down, in the sense of drawing off or reducing a supply.

Origin: English

Synonyms

View more →

decline peak-to-trough loss withdrawal disbursement reduction wind-down scaling back

Antonyms

build-up surge

Related words

fall increase addition accept reduce wave payment reduction

Frequently asked questions

What is the difference between drawdown and loss?

A loss is realised when you sell for less than you paid. A drawdown measures the decline from a previous high point on paper, whether or not you sell, so a portfolio can be in drawdown while still up on your original investment.

What is maximum drawdown?

It is the largest peak-to-trough fall over the period being measured, expressed as a percentage of the peak. It answers the question of how bad the worst stretch would have felt, which volatility figures on their own do not show.

What is pension drawdown?

It is a UK retirement arrangement in which you leave your pension pot invested and take money out of it as income, rather than buying an annuity. The upside is flexibility and any future growth; the risk is that the pot can run out.

What is the meaning of drawdown?

"drawdown" (noun) means in investing, the fall in value from a peak to the following trough, usually given as a percentage. Maximum drawdown is a standard measure of how much an investor would have lost at the worst point.

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