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SPXL: Simulating 3× S&P 500 and Its Decay
SPXL cranks the world's most-studied index to 3×. The S&P's low volatility makes it look tamer than TQQQ — but 3× is 3×: in March 2020 it lost about 60% in a month. This page runs the real parameters so you can see what 3× broad market actually looks like.
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
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
3.0×
75/25
2.5×
50/50
2.0×
25/75
1.5×
0/100
1.0×
Median ending value
949K
843K
708K
548K
394K
CAGR
25.2%
23.8%
21.6%
18.5%
14.7%
Volatility
48.1%
40.3%
32.5%
24.4%
16.0%
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.
−67.2%
−58.9%
−49.1%
−38.1%
−25.3%
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.
0.52
0.59
0.67
0.76
0.92
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.
0.38
0.40
0.44
0.49
0.58
Unlucky (P10)
130K
162K
183K
198K
204K
Lucky (P90)
7.3M
4.7M
2.9M
1.6M
777K
Each column is a split between the 3× fund and its plain 1× index (leveraged % / index %), rebalanced yearly. Effective exposure = leveraged share × 3 + 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 3× SPY — S&P 500 fund reaches a median 949K; a 50/50 split with the 1× index reaches 708K, and the plain 1× index 394K — every column rebalanced yearly.
The cost of leverage is drawdown: 100/0 typically falls 67.2% peak-to-trough, versus 49.1% 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% SPXL for 10 years lands at a median value of about 949K (≈25.2% annualised) — with a median max drawdown of −67.2% along the way. A 50/50 blend with the plain 1× index comes to about 708K with the drawdown cut to −49.1%; skipping leverage entirely (pure 1× index) gives about 394K at −25.3%.
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
At the same 3×, SPXL decays less than TQQQ (16% vs 19% underlying volatility — about a 1.4× decay gap), so "3× the market" holds up somewhat better than "3× tech." But remember where the geometric-return curve peaks: at the S&P's historical numbers, 3× sits to the right of the optimum — the extra leverage mostly buys deeper drawdowns, not proportional return. In the five-column comparison, 50/50 and 25/75 are frequently the best risk-adjusted spots: ~1.5–2× effective exposure, right back in optimal-leverage territory. That's also how it gets used in practice — SPXL is an exposure dial, not an all-in holding.
Good fit: raising broad-market exposure with a small capital outlay — e.g. 25% SPXL + 75% cash ≈ 1.5× effective exposure, with dry powder left for rebalancing.
Watch out: SPXL lost ~60% in March 2020 alone, and a 2008-scale bear simulates into −90% territory. US circuit breakers cap a session at −20%, meaning a 3× product can theoretically do −60% in a single day.
Historical replay: backtest with real data
No simulation here — replay real monthly prices over any window you choose: initial lump sum + monthly contributions, five splits side by side.
Rebalancing frequency
Data as of 2026-07-04 (Yahoo Finance monthly, 1996-07 → 2026-06).
Replay result 1996-08 → 2026-06
fund / 1×
100/0
SPXL
75/25
50/50
25/75
0/100
SPY 1×
Final value
7.8M
7.9M
6.8M
5.0M
3.1M
Total invested
279K
279K
279K
279K
279K
Multiple on invested
27.9×
28.3×
24.2×
17.8×
11.2×
Annualised return (IRR)
99999999999900.0%
99999999999900.0%
99999999999900.0%
99999999999900.0%
99999999999900.0%
Max drawdown
−97.3%
−91.3%
−80.8%
−64.9%
−50.8%
⚠ 148 months in this window use pre-listing synthetic backfill (before 2008-12, shaded on the chart) — replayed from the underlying's real daily returns; method and validation are recorded with the data.
Actual portfolio growth per split
100/075/2550/5025/750/100log scale
The replay uses real (partly synthetic-backfilled) monthly adjusted prices — dividends and splits included; trading costs, taxes and spreads are not. Prices come from Yahoo Finance via automated processing and may contain errors or gaps; synthetic-backfill segments are estimates that can deviate from actual performance, so treat the results as indicative only. Past performance does not predict future returns.
Common questions
- SPXL vs UPRO — what's the difference?
- Both are 3× daily S&P 500 (Direxion vs ProShares), with near-identical expense ratios and tracking behaviour; the differences are fund size and bid-ask spreads. For long-term simulation purposes, treat them as the same instrument.
- Does 3× the market beat 1× long term?
- It depends on the return/volatility ratio and your horizon. On the last decade's parameters the simulated median wins; on conservative long-run parameters (8–9% annualised) the edge shrinks hard and the bad scenarios get ugly. Lower the CAGR above and see for yourself — more convincing than anyone's hot take.
- How much can it lose in one day?
- US markets halt for the day at −20% (after 7% and 13% pauses), so a 3× product's theoretical single-day floor is about −60% — it can't go to zero in a session. What actually ends people is weeks of decline with an insufficient bounce; check the 10th-percentile column.
- Is SPXL suitable for dollar-cost averaging?
- DCA into a 3× product is fundamentally a bet that the index trends up over your contribution window. You can do it, but most simulations show the same money DCA'd into SSO or the 1× index doing better risk-adjusted. If you proceed, cap the allocation first — and be ready to sit through −60% without selling.
- Should SPXL be paired with bonds (HFEA-style)?
- The famous HFEA strategy is 3× equity (UPRO) + 3× long bonds (TMF), rebalanced — and it got badly hurt in 2022 when stocks and bonds fell together; negative correlation is not a guarantee. If you try it, use this page's simulation for the equity leg and evaluate the bond leg's rate risk separately.
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Did this tool help you? ☕
This is a free side project I built in my spare time. If it saved you time or helped you think through a decision, buying me a coffee keeps the lights on!
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 ·
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