Over the three months to October 22, 2026, 478 of 654 leveraged and inverse exchange-traded funds finished short of their own stated multiple. The median fund finished 3.8 points short, having travelled a median distance of 5.3% from that target while the underlying it tracks moved with a median volatility of 47%.
This gap is not a flaw in any single fund. These products are built to deliver their stated multiple over one day, then reset and start again. Strung together, daily results compound rather than add, so the return over a run of days is not simply the multiple applied to the period's overall move. The data bears this out across holding periods: the median difference from stated widens from -0.1% at one month to -3.8% at three months, -7.8% at six months, -12.0% at one year, and -24.9% at three years, even as the number of funds with enough history to measure shrinks from 694 to 92. The gap tracks how far the underlying travelled along the way, not just where it ended up.
The volatility breakdown makes the same point from another angle. Funds tracking underlyings with volatility of 0% to 30% showed a median difference of -1.9% from stated, with 123 of 181 funds short. That median difference widens to -5.2% in the 30% to 50% band and to -7.7% in both the 50% to 80% and 80%-and-above bands, where 152 of 194 and 79 of 122 funds respectively finished short. Higher underlying volatility, more daily resets working against the path, more erosion from the stated multiple, regardless of where the underlying ultimately settled.
Where more than one issuer offers the same stated multiple on the same underlying, the outcomes still diverge. Among 129 underlyings with more than one issuer at the same mandate, the spread between the closest and furthest fund can run wide even though every fund is resetting daily against the same name. BABA +2x, tracked by four issuers while the underlying moved -10.7%, showed a spread of 11.4 points between KBAB at +7.3 and BABU at -4.1. CRML +2x, with two issuers and the underlying up 1.3%, showed a 9.7-point spread between CRMU at -23.9 and CRMX at -33.6. Smaller spreads also appear, such as CPER +2x at 3.8 points between CPXR and UCOP. Same stated multiple, same underlying, same days held, but different paths through daily compounding produce different results.
Readers can check the stated multiple, holding period, and distance from that multiple for any individual leveraged or inverse fund, along with its matched underlying, on ETFIQ's fund pages.