Leveraged and inverse ETFs promise a stated multiple of a single day's move, reset each night. Over the three months to Oct 9, 2026, 511 of 636 such funds finished short of that stated multiple, with the median fund landing 5.5 points below it. The median fund's underlying moved 6.3% over the period, and the median underlying volatility was 47%.
The shortfall is not a pricing error. Because the multiple applies daily and then compounds, a string of up-and-down sessions can leave a fund far from what simple arithmetic on the period's net move would suggest, even when the fund does exactly what it says each day. The data across holding periods shows the pattern: at one month, 513 of 694 funds were short, with a median difference of −1.5% against 1.8% median distance travelled and 38% median volatility. At six months, 331 of 433 were short, median difference −10.1%, median distance 13.2%, median volatility 45%. At one year, 215 of 292 were short, median difference −12.0%, distance 14.5%, volatility 33%. At three years, with fewer surviving funds, 67 of 97 were short, median difference −28.0%, against a median distance of 35.4% and median volatility of 20%. The gap tends to widen with how far the underlying travelled during the window, not simply with where it ended up.
Volatility plays a direct role. Grouping the three-month funds by their underlying's volatility shows the shortfall growing step by step: funds on underlyings with 0% to 30% volatility had a median difference of −2.0% from stated, with 126 of 183 short; those on 30% to 50% volatility underlyings showed −5.4%, with 133 of 161 short; 50% to 80% volatility produced −10.4%, with 144 of 173 short; and 80% and above produced −16.8%, with 108 of 119 short. The more the underlying moves around day to day, the larger the typical gap between the stated multiple and what the holder received.
Where more than one issuer runs the same stated multiple on the same underlying, the outcomes differ by issuer even though the mandate and the trading days are identical. Among the 114 underlyings with multiple issuers on the same stated multiple, the widest spreads recorded include GME +2x, where the underlying moved +22.5% and the two funds landed at −6.3 and −12.9, a 6.7 point spread, and MSTR +2x, where four issuers' funds landed between −7.2 and −13.8, a 6.6 point spread. Smaller spreads appear too, such as CPER +2x at 3.5 points and Ether +2x at 3.6 points. Same underlying, same stated multiple, same calendar days, different results.
Readers can look up any individual fund's underlying, stated multiple and the exact difference recorded over the window of their choosing on the live desk.