# Leveraged decay in numbers: 3 months of 3x funds

> 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.

Data as of Nov 10, 2026. Rebuilt every trading night.

## Leveraged decay in numbers: 3 months of 3x funds

Data as of Nov 10, 2026. Rebuilt every trading night.

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.

Trading Products and Costs · Lesson 5 of 6 1 2 3 4 5 6

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) −$190, 3 times the move −$571, 3x each day, compounded −$1,383, LABU −$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 × the move): LABU: −13.83 − ( −5.71 ) = −8.11 points SOXL: −55.27 − ( −52.87 ) = −2.40 points TQQQ: −20.38 − ( −17.96 ) = −2.42 points Step 3: the fund's gap (fund minus compounded): LABU: −15.80 − ( −13.83 ) = −1.98 points SOXL: −57.82 − ( −55.27 ) = −2.55 points TQQQ: −22.43 − ( −20.38 ) = −2.05 points Step 4: add it up for LABU. −5.71 + ( −8.11 ) + ( −1.98 ) = −15.80% . 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 −2.05 ) SOXL: 17.7 (gap −2.55 ) LABU: 72.6 (gap −1.98 )

### The question

My 3x fund lost far more than 3 times the index. Was it badly run, or is something else going on?

### The idea

- Lesson 4 showed that a daily fund's result depends on the path. Any period result splits into three parts: - The multiple × the index's move. What the name seems to promise.

- 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.

- 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.

- 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).

### Worked example

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.

Three 3x funds, Aug 11, 2026 to Nov 10, 2026 .

| Fund (index) | Index move | 3 × the move | 3x each day, compounded | Fund |
| --- | --- | --- | --- | --- |
| LABU (XBI, biotech) | −1.90% | −5.71% | −13.83% | −15.80% |
| SOXL (SOXX, chips) | −17.62% | −52.87% | −55.27% | −57.82% |
| TQQQ (QQQ) | −5.99% | −17.96% | −20.38% | −22.43% |

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.

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.

The ranking follows the gap alone. SOXL's −2.40 path effect and LABU's −8.11 don't count, because any 3x fund on the same index would have had them too.

### The common mistake

"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.

### Check your understanding

Pick an answer to see why. Two of three right passes the lesson.

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 × 0% is the naive promise, not the compounded result. 3. An index fell 2%; its 3x fund's daily multiple compounded was −12%; the fund returned −13.5%. What were the path effect and the fund's gap? A −6 points and −1.5 points B −10 points and −1.5 points C −6 points and −7.5 points D −1.5 points and −6 points Answer: A. −6 points and −1.5 points. 3 × the move is 3 × −2% = −6%; path: −12 − (−6) = −6; gap: −13.5 − (−12) = −1.5. Not B: −10 subtracts the index move, not 3 times it.

### Takeaways

- Split any leveraged result into three parts: 3 × the move, the path effect and the fund's gap.

- Choppy markets create decay; a steady trend can offset it.

- Compare leveraged funds on their gap, as the 3-Month Tracking Score does.

### Do it on ETFIQ

Find your leveraged fund's 3-Month Tracking Score Your fund

### Where to next

---

Source: ETFIQ, independent ETF data. Recomputed nightly from public filings and prices.
Cite: 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/
Licence: https://etfiq.com/license/ Data ETFIQ computes is free to use with attribution: ETFIQ (etfiq.com). Issuer data stays under its owner's terms.
HTML: https://etfiq.com/academy/trading-products-and-costs/leveraged-decay-in-numbers/