Can you hold 00631L long term?

There's no universal answer — it depends on the index trending up over your horizon and on you tolerating deep drawdowns. Daily reset works for you in sustained uptrends and against you in long chop. The rational move is usually sizing, not all-or-nothing: use the five-column comparison above to find your spot.

How is 00631L different from 0050, and why isn't it exactly 2× long term?

It holds Taiwan index futures to double each *day's* return, resetting exposure daily. Compounded over time the result is path-dependent: above 2× in strong uptrends, below 2× — sometimes below 1× — in choppy markets. Its fund costs (0.95% management + custody) are also several times the plain ETF's.

Why doesn't 00631L pay dividends?

Its exposure comes mostly from index futures, whose prices already reflect ex-dividend drops. The dividend effect is embedded in the return rather than paid out in cash — if you want income, this product was never for you.

Is 00631L suitable for dollar-cost averaging?

DCA spreads your entry points, which helps with volatile products — but a daily-2× fund is path-dependent, and in a long sideways market you'd be averaging into something that's steadily decaying. People who hold 00631L long term usually focus on position sizing and periodic rebalancing back to a target 2×/cash ratio, not on mechanical contributions.

What's the premium on 00631L and what should I check before buying?

A leveraged ETF's market price can trade above its NAV (a premium) — in hot markets 00631L premiums above 1% are common, and buying at a premium is a hidden upfront cost. Check the issuer's live indicative NAV (iNAV) before ordering, use limit orders, and avoid chasing during premium spikes.

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00631L (Yuanta Taiwan 50 Daily 2x): Long-Term Hold Simulation

00631L is Taiwan's largest leveraged ETF, tracking 2× the *daily* return of the Taiwan 50 index. Whether holding it long term is an accelerator or a volatility grinder has been argued about for a decade — this page loads its actual leverage and fund costs into the simulator and lets the numbers talk.

Leveraged ETF Calculator

Compare how much of a leveraged ETF to hold versus its plain 1× index — five splits from all-leverage to all-index, rebalanced monthly, quarterly or yearly. See CAGR, drawdown and risk-adjusted return, volatility decay included.

Underlying index

Index

Expected return (CAGR)The 1× index's compound annual growth rate. The leveraged fund is built from this — you don't enter it directly.

VolatilityHow wildly the index's returns swing year to year. This is the engine of volatility decay: the higher it is, the more a 2×/3× fund bleeds in choppy markets.

Leverage & rebalancing

Leverage factorThe leverage of the risky fund, used in both the all-in hold and the blend. Real products offer 2× or 3×.

Rebalancing frequencyHow often each split is traded back to its target weights. Higher frequency tracks the target exposure more tightly and “buys low, sells high” more often, but in practice also means more trading costs and taxes (not modelled here).

The tool compares five fixed splits — 100/0, 75/25, 50/50, 25/75, 0/100 — of this leveraged fund and its plain 1× index, all rebalanced yearly.

Capital & horizon

Starting capital

Holding period

yrs

Fund costs

Expense ratioThe fund's annual fee, charged on the whole position. Leveraged ETFs typically run 0.9–1.0%, far above a plain index fund's ~0.05%.

Financing rateThe annual interest a leveraged fund pays to borrow its extra exposure. Charged on the borrowed (L−1)× portion, so it hits 3× harder than 2× and never touches 1×. Tracks short-term rates.

Strategy comparison

fund / 1×

100/0

2.0×

75/25

1.8×

50/50

1.5×

25/75

1.3×

0/100

1.0×

Median ending value

2.4M

1.9M

1.5M

1.1M

831K

CAGR

37.6%

34.6%

31.2%

27.5%

23.6%

Volatility

42.1%

37.0%

31.9%

26.6%

21.0%

Max drawdownMedian worst peak-to-trough fall along the simulated paths, at daily resolution. This is the loss you'd have to sit through — leverage multiplies it, rebalancing into cash trims it.

−55.7%

−50.0%

−43.7%

−37.2%

−30.0%

SharpeReturn per unit of volatility (CAGR ÷ volatility, risk-free rate 0). A rebalanced blend often scores higher than all-in leverage, because it sheds risk faster than return.

0.89

0.93

0.98

1.04

1.12

CalmarReturn per unit of max drawdown (CAGR ÷ max drawdown). A drawdown-based cousin of Sharpe — how much growth you earn for the worst fall you endure.

0.67

0.69

0.71

0.74

0.79

Unlucky (P10)

432K

421K

402K

378K

350K

Lucky (P90)

14.6M

9.5M

6.0M

3.6M

2.0M

Each column is a split between the 2× fund and its plain 1× index (leveraged % / index %), rebalanced yearly. Effective exposure = leveraged share × 2 + index share × 1 (shown under each split); 0/100 is the plain 1× index.

Median growth by strategy

Over 10 years, going 100% into the 2× 0050 — 元大台灣50 fund reaches a median 2.4M; a 50/50 split with the 1× index reaches 1.5M, and the plain 1× index 831K — every column rebalanced yearly.

The cost of leverage is drawdown: 100/0 typically falls 55.7% peak-to-trough, versus 43.7% for the 50/50 split.

Based on 500 simulated paths with daily-reset leverage. A simplified lognormal model, not a forecast: real markets have fatter tails, jumps, and shifting volatility, all of which hit leverage harder. Treat as rough odds, not promises.

What this ticker works out to

Under the prefilled assumptions, going 100% 00631L for 10 years lands at a median value of about 2.4M (≈37.6% annualised) — with a median max drawdown of −55.7% along the way. A 50/50 blend with the plain 1× index comes to about 1.5M with the drawdown cut to −43.7%; skipping leverage entirely (pure 1× index) gives about 831K at −30.0%.

Monte Carlo simulation seeded with the underlying index's 10-year CAGR and estimated volatility. That decade was a strong bull run — shave a few points off the return and look again.

How to read this result

A daily-reset 2× fund's long-run outcome depends on the path: in a steady uptrend, daily compounding pushes it *beyond* 2×; in a sideways chop, the same mechanism eats your money (volatility decay). Taiwan's last decade was the former, which is why 00631L's track record looks spectacular — in hindsight. The five columns answer "how much?": 100/0 is all-in on the 2× fund, 0/100 is the plain 1× index, and the middle columns are the compromises. Watch the max-drawdown row — with a daily 2× product, a deep drawdown isn't an if, it's a whether-you-can-sit-through-it.

Good fit: long horizons, steady cash flow, and the genuine ability to watch the position halve without selling — using "some 2× + some 1×/cash" to run above-1× exposure.

Watch out: 00631L delivers 2× the *daily* index return, not 2× over any longer period; futures roll costs, ~1% annual fund costs and buying at a premium all pull long-run results away from the naive story. The prefilled 23.6% CAGR is the Taiwan 50's hottest decade on record — try lower.

Common questions

Can you hold 00631L long term?: There's no universal answer — it depends on the index trending up over your horizon and on you tolerating deep drawdowns. Daily reset works for you in sustained uptrends and against you in long chop. The rational move is usually sizing, not all-or-nothing: use the five-column comparison above to find your spot.
How is 00631L different from 0050, and why isn't it exactly 2× long term?: It holds Taiwan index futures to double each *day's* return, resetting exposure daily. Compounded over time the result is path-dependent: above 2× in strong uptrends, below 2× — sometimes below 1× — in choppy markets. Its fund costs (0.95% management + custody) are also several times the plain ETF's.
Why doesn't 00631L pay dividends?: Its exposure comes mostly from index futures, whose prices already reflect ex-dividend drops. The dividend effect is embedded in the return rather than paid out in cash — if you want income, this product was never for you.
Is 00631L suitable for dollar-cost averaging?: DCA spreads your entry points, which helps with volatile products — but a daily-2× fund is path-dependent, and in a long sideways market you'd be averaging into something that's steadily decaying. People who hold 00631L long term usually focus on position sizing and periodic rebalancing back to a target 2×/cash ratio, not on mechanical contributions.
What's the premium on 00631L and what should I check before buying?: A leveraged ETF's market price can trade above its NAV (a premium) — in hot markets 00631L premiums above 1% are common, and buying at a premium is a hidden upfront cost. Check the issuer's live indicative NAV (iNAV) before ordering, use limit orders, and avoid chasing during premium spikes.

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How much of a leveraged ETF should you hold versus the plain index? Compare 100/0, 75/25, 50/50, 25/75 and 0/100 splits of a 2×/3× fund and its 1× index — all rebalanced yearly — on CAGR, max drawdown, Sharpe and Calmar.

Built by indigo.la.ringo · AppicLab · Last updated: June 28, 2026