Leveraged and inverse ETFs promise a stated multiple of their underlying's daily move. Over the three months to October 21, 2026, 503 of 655 such funds finished short of that stated multiple. The median fund sat 4.5 percentage points below it, with a median distance from the mark of 5.4% and a median underlying volatility of 48%.
The mechanism is daily reset. Each fund delivers its multiple over a single day, then resets and does it again the next day. String enough days together and the result is not the multiple times the period's overall move, because daily gains and losses compound against each other rather than add up cleanly. This is why the gap tends to widen with how far the underlying travels during the period, not with where the underlying ends up. A stock that swings hard in both directions and finishes close to flat can still leave a wide gap between stated and delivered multiple.
The pattern holds across holding periods. At one month, 383 of 694 funds were short, with a median difference of -0.8% against 1.6% median distance and 40% median underlying volatility. At six months, 319 of 425 funds were short, median difference -7.3%, median distance 9.3%, median volatility 44%. At one year, 208 of 299 were short, median difference -11.2%, distance 14.1%, volatility 34%. At three years, 61 of 91 were short, with a median difference of -25.3% against a median distance of 36.0% and median volatility of 18%. The erosion table sorts funds by the underlying's own volatility over the three-month window: funds tracking underlyings with 0% to 30% volatility showed a median difference of -1.8%, rising to -5.2% for the 30% to 50% band, -9.7% for 50% to 80%, and -11.3% for underlyings at 80% and above. The share of funds short of stated multiple rises alongside it, from 114 of 173 in the calmest band to 95 of 124 in the most volatile.
Where more than one issuer runs the same stated multiple on the same underlying, the outcomes still differ. 128 underlyings carry this setup. On NXPI +2x, two issuers produced a 8.5 percentage point spread between NXPG at -4.1 and NXPX at -12.6, while the underlying itself moved -12.7%. On BABA +2x, four issuers spread 7.4 points, from KBAB at +3.7 to BABU at -3.7, against a -10.4% underlying move. Similar spreads appear across PDD +2x, GME +2x, BMNR +2x, GLXY +2x, PLTR +2x, MSTR +2x, SPCX +2x, BE +2x, IONQ +2x and RGTI +2x, each listed with its own issuer count, underlying move, closest and furthest fund, and resulting spread. Same mandate, same trading days, and still a gap between funds chasing the identical target.
Readers can look up any individual fund's name, stated multiple, and its measured difference and distance from that multiple on ETFIQ's fund pages.