ProShares Ultra S&P500 (SSO) performance simulator

Levered ETFs are sometimes misused

Levered ETFs promise investors a multiple of the DAILY return of some underlying index and are only meant to be held for a day or less. However, there is clear evidence that investors are holding onto some of these ETFs (e.g TBT equity) for far longer than 1 day and thereby making a bet on the path and volatility of the underlying. To understand why this is the case, see our series that explains what drives the returns of an levered ETF if it is held past one day.

What this simulator does

The simulator helps demonstrate the complexity of these products if held past 1 day and how they can sometimes lead to extreme under performance compared to expectations. It allows you to see how the performance of holding onto a levered short ETF past 1 day is different from buying/selling the underlying with leverage for any historical period of your choosing.


The top graph shows the the underlying index of the levered ETF. This is the index for which the levered ETF promises you a multiple of the daily returns. The bottom graph shows the simulated performance of the Levered ETF and the performance of buying/shorting the underlying with leverage yourself. These simulations DO NOT take into account management fees and interest expenses for the ETFs, which can be significant. The simulations also assume that the price of the ETF perfectly tracks its Net Asset Value (NAV). The metrics above the charts show the % return in the underlying, the % return from the Levered ETF, the % return from shorting the underying with leverage, the % under/out performance of the levered ETF, all for the selected time period.


You can change the selected time period by clicking and dragging a region horizontally on the graph for the underlying. When you do this, the chart of the underlying will zoom in to your selection, while the chart below will recalculate the returns from the holding the levered ETF and from shorting the underlying with leverage. You can pan by holding onto the shift key while clicking and dragging. Clicking on the graph on the underlying twice to zoom out to the original level.