{"url":"https://etfiq.com/academy/trading-products-and-costs/leveraged-decay-in-numbers/","section":"academy","title":"Leveraged decay in numbers: 3 months of 3x funds | ETFIQ","description":"Learn to split a leveraged ETF's result into the index move, the path effect and the fund's own costs, with 3 months of real 3x ETF data.","as_of":"Nov 10, 2026","structured_data":[{"@type":"LearningResource","@id":"https://etfiq.com/academy/trading-products-and-costs/leveraged-decay-in-numbers/#lesson","name":"Leveraged decay in numbers: 3 months of 3x funds","description":"Over the 3 months to Nov 10, 2026, XBI fell 1.9% while 3x LABU fell 15.8%, against 5.7% for 3 times XBI.","url":"https://etfiq.com/academy/trading-products-and-costs/leveraged-decay-in-numbers/","learningResourceType":"Lesson","teaches":"Why a 3x fund can lose far more than 3 times an index over three months: the path effect, the fund's own gap and the score that ranks it","educationalLevel":"Intermediate","timeRequired":"PT7M","inLanguage":"en","isAccessibleForFree":true,"isPartOf":{"@type":"Course","@id":"https://etfiq.com/academy/trading-products-and-costs/#course","name":"Trading Products and Costs","url":"https://etfiq.com/academy/trading-products-and-costs/"},"position":5,"dateModified":"2026-11-10","author":{"@type":"Organization","name":"ETFIQ Research","url":"https://etfiq.com"},"publisher":{"@type":"Organization","name":"ETFIQ Research","url":"https://etfiq.com"}},{"@type":"FAQPage","@id":"https://etfiq.com/academy/trading-products-and-costs/leveraged-decay-in-numbers/#check","mainEntity":[{"@type":"Question","name":"What does the 3-Month Tracking Score rank?","acceptedAnswer":{"@type":"Answer","text":"The fund's return against its daily multiple, compounded. the gap is the only part the fund controls."}},{"@type":"Question","name":"Over 3 months an index swings sharply up and down but ends flat (hypothetical). Before any costs, what does a 3x daily fund likely show?","acceptedAnswer":{"@type":"Answer","text":"A loss. back-and-forth days compound into decay, as XBI's did for LABU."}},{"@type":"Question","name":"An index fell 2%; its 3x fund's daily multiple compounded was \u221212%; the fund returned \u221213.5%. What were the path effect and the fund's gap?","acceptedAnswer":{"@type":"Answer","text":"\u22126 points and \u22121.5 points. 3 \u00d7 the move is 3 \u00d7 \u22122% = \u22126%; path: \u221212 \u2212 (\u22126) = \u22126; gap: \u221213.5 \u2212 (\u221212) = \u22121.5."}}]},{"@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"ETFIQ","item":"https://etfiq.com/"},{"@type":"ListItem","position":2,"name":"Academy","item":"https://etfiq.com/academy/"},{"@type":"ListItem","position":3,"name":"Trading Products and Costs","item":"https://etfiq.com/academy/trading-products-and-costs/"},{"@type":"ListItem","position":4,"name":"Leveraged decay in numbers","item":"https://etfiq.com/academy/trading-products-and-costs/leveraged-decay-in-numbers/"}]},{"@type":"WebPage","name":"Leveraged decay in numbers: 3 months of 3x funds","description":"Learn to split a leveraged ETF's result into the index move, the path effect and the fund's own costs, with 3 months of real 3x ETF data.","url":"https://etfiq.com/academy/trading-products-and-costs/leveraged-decay-in-numbers/","dateModified":"2026-11-10","isPartOf":{"@type":"WebSite","name":"ETFIQ","url":"https://etfiq.com"},"speakable":{"@type":"SpeakableSpecification","cssSelector":[".lede"]},"publisher":{"@id":"https://etfiq.com/#org"}}],"characters":6007,"truncated":false,"content":"ETFIQ / Academy / Trading Products and Costs / Leveraged decay in numbers \n \n Leveraged decay in numbers: 3 months of 3x funds\n Data as of Nov 10, 2026. Rebuilt every trading night.\n Over the 3 months to Nov 10, 2026 , XBI fell 1.9% while 3x LABU fell 15.8% , against 5.7% for 3 times XBI.\n Trading Products and Costs \u00b7 Lesson 5 of 6 1 2 3 4 5 6 \n Slide the amount. LABU against its index, 3 times the move, and 3x each day compounded. Amount (hypothetical) $10,000 On $10,000: XBI (the index) \u2212$190, 3 times the move \u2212$571, 3x each day, compounded \u2212$1,383, LABU \u2212$1,580. Hypothetical amounts. Three months, Aug 11, 2026 to Nov 10, 2026. Step 1: the four numbers. Step 2: the path effect (compounded minus 3 \u00d7 the move): LABU: \u221213.83 \u2212 ( \u22125.71 ) = \u22128.11 points SOXL: \u221255.27 \u2212 ( \u221252.87 ) = \u22122.40 points TQQQ: \u221220.38 \u2212 ( \u221217.96 ) = \u22122.42 points Step 3: the fund's gap (fund minus compounded): LABU: \u221215.80 \u2212 ( \u221213.83 ) = \u22121.98 points SOXL: \u221257.82 \u2212 ( \u221255.27 ) = \u22122.55 points TQQQ: \u221222.43 \u2212 ( \u221220.38 ) = \u22122.05 points Step 4: add it up for LABU. \u22125.71 + ( \u22128.11 ) + ( \u22121.98 ) = \u221215.80% . Most of the extra loss was the path, not the fund. Step 5: the score. It is a rank among the 31 3x leveraged ETFs, so small gaps spread far apart: TQQQ: 59.7 (gap \u22122.05 ) SOXL: 17.7 (gap \u22122.55 ) LABU: 72.6 (gap \u22121.98 ) \n The question\n My 3x fund lost far more than 3 times the index. Was it badly run, or is something else going on?\n The idea\n Lesson 4 showed that a daily fund's result depends on the path. Any period result splits into three parts: The multiple \u00d7 the index's move. What the name seems to promise.\n The path effect. What compounding each day's 3x move adds or takes away. Choppy, back-and-forth days take away; this loss is often called decay . A steady trend can add.\n The fund's gap. The fund's return against a perfect 3x-each-day fund: fees, borrowing costs and trading slippage. Below zero means it fell short.\n \n Only the third part is the fund's doing. ETFIQ's 3-Month Tracking Score ranks it among funds with the same multiple and direction (100 is best).\n Worked example\n The 5 steps beside the drawing at the top work this through on ETFIQ data. Point at a step to light the part of the drawing it describes.\n Three 3x funds, Aug 11, 2026 to Nov 10, 2026 .\n Fund (index) Index move 3 \u00d7 the move 3x each day, compounded Fund \n LABU (XBI, biotech) \u22121.90% \u22125.71% \u221213.83% \u221215.80% \n SOXL (SOXX, chips) \u221217.62% \u221252.87% \u221255.27% \u221257.82% \n TQQQ (QQQ) \u22125.99% \u221217.96% \u221220.38% \u221222.43% \n XBI swung hard (volatility of 34.1% at a yearly rate) but ended near where it started. That back-and-forth is where decay comes from. SOXX swung even more ( 50.3% ) but fell a long way in one direction, which limited the drag. QQQ swung least ( 22.8% ), so TQQQ's path effect was small.\n LABU's fee is 0.96% a year, about 0.24 points over 3 months. The other 1.7 points is the cost of holding 3 times its cash in exposure, plus daily rebalancing.\n The ranking follows the gap alone. SOXL's \u22122.40 path effect and LABU's \u22128.11 don't count, because any 3x fund on the same index would have had them too.\n The common mistake\n \"A 3x fund that lost more than 3 times the index is badly run.\" LABU lost 10.09 points more than 3 times XBI's move, but 8.11 came from the path, which any 3x XBI fund would share. Judge the fund on its gap.\n Check your understanding\n Pick an answer to see why. Two of three right passes the lesson.\n 1. What does the 3-Month Tracking Score rank? A The fund's total return B The path effect C The index's volatility D The fund's return against its daily multiple, compounded Answer: D. The fund's return against its daily multiple, compounded. the gap is the only part the fund controls. Not B: every fund on the same index and multiple gets the same path effect. 2. Over 3 months an index swings sharply up and down but ends flat (hypothetical). Before any costs, what does a 3x daily fund likely show? A About 0% B A gain of about 3 times the swings C A loss D Exactly the index's return Answer: C. A loss. back-and-forth days compound into decay, as XBI's did for LABU. Not A: 3 \u00d7 0% is the naive promise, not the compounded result. 3. An index fell 2%; its 3x fund's daily multiple compounded was \u221212%; the fund returned \u221213.5%. What were the path effect and the fund's gap? A \u22126 points and \u22121.5 points B \u221210 points and \u22121.5 points C \u22126 points and \u22127.5 points D \u22121.5 points and \u22126 points Answer: A. \u22126 points and \u22121.5 points. 3 \u00d7 the move is 3 \u00d7 \u22122% = \u22126%; path: \u221212 \u2212 (\u22126) = \u22126; gap: \u221213.5 \u2212 (\u221212) = \u22121.5. Not B: \u221210 subtracts the index move, not 3 times it. \n Takeaways\n Split any leveraged result into three parts: 3 \u00d7 the move, the path effect and the fund's gap. \n Choppy markets create decay; a steady trend can offset it. \n Compare leveraged funds on their gap, as the 3-Month Tracking Score does. \n Do it on ETFIQ\n Find your leveraged fund's 3-Month Tracking Score Your fund \n Where to next\n Next lesson: Covered call ETFs: income now, a cap on the upside Previous lesson: Leveraged and inverse ETFs: what the daily promise means Trading Products and Costs: all lessons The explainer behind this lesson ETFIQ Academy How ETFIQ computes these numbers \n Cite this page. ETFIQ, Leveraged decay in numbers: 3 months of 3x funds, data as of Nov 10, 2026. https://etfiq.com/academy/trading-products-and-costs/leveraged-decay-in-numbers/ Free to use with attribution for data ETFIQ computes; issuer data stays under its owner's terms. The underlying files are at Open data .\n Other forms Plain ETFIQ, Leveraged decay in numbers: 3 months of 3x funds, data as of Nov 10, 2026. https://etfiq.com/academy/trading-products-and-costs/leveraged-decay-in-numbers/ APA ETFIQ. (Nov 10, 2026). Leveraged decay in numbers: 3 months of 3x funds. Retrieved from https://etfiq.com/academy/trading-products-and-costs/leveraged-decay-in-numbers/ Markdown [Leveraged decay in numbers: 3 months of 3x funds (ETFIQ, Nov 10, 2026)](https://etfiq.com/academy/trading-products-and-costs/leveraged-decay-in-numbers/)","source":"ETFIQ, independent ETF data. Recomputed nightly from public filings and prices.","publisher":{"@id":"https://etfiq.com/#org","name":"ETFIQ","url":"https://etfiq.com"},"license":"https://etfiq.com/license/","license_text":"Data ETFIQ computes is free to use with attribution: ETFIQ (etfiq.com). Issuer data stays under its owner's terms.","citation":"ETFIQ, Leveraged decay in numbers: 3 months of 3x funds, data as of Nov 10, 2026. https://etfiq.com/academy/trading-products-and-costs/leveraged-decay-in-numbers/"}