Leverage decay calculator
A daily-reset fund's long-run growth depends on volatility as much as on the index's return. Move the sliders to see how much.
Expected growth
| Fund | Expected growth a year | $10,000 after 10 years |
|---|---|---|
| 1x | 12.0% | $33,201 |
| 2x | 13.8% | $39,590 |
| 3x | 11.6% | $31,995 |
3x growth as volatility rises, at a 12.0% index return. Above about 30.0% volatility the 3x fund is expected to shrink.
A standard approximation for funds that reset leverage daily: growth falls with the square of leverage times variance. It assumes steady volatility; real paths vary around it. Financing uses the short rate plus 0.45%, and a 0.95% fee for the leveraged funds. General arithmetic, not this site's signal. Why 3x funds decay