: Understanding nX leveraged ETF's My question is really just about the "nX" portion of a leveraged fund. Someone can re-title my question if there is better terminology to communicate what this questions is about. Here is

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Understanding nX leveraged ETF's
My question is really just about the "nX" portion of a leveraged fund. Someone can re-title my question if there is better terminology to communicate what this questions is about. Here is the context:

I have been reading about the ProShares Ultra VIX Short-Term Futures ETF (UVXY). Straight from the ProShares website we have this:

"ProShares Ultra VIX Short-Term Futures ETF seeks daily investment
results, before fees and expenses, that correspond to one and one-half
times (1.5x) the daily performance of the S&P 500 VIX Short-Term
Futures Index.†"

I also did some reading here: sixfigureinvesting.com/2015/03/how-does-uvxy-work/ where I read this:

"The index is maintained by S&P Dow Jones Indices. The theoretical
value of UVXY if it were perfectly tracking 1.5X the daily returns of
the short-term index is published every 15 seconds as the “intraday
indicative” (IV) value. Yahoo Finance publishes this quote using the
^UVXY-IV ticker."

So my understanding is that on a day to day basis, before fee's and expenses, UVXY seeks to return 1.5x whatever S&P 500 VIX Short-Term Futures Index returns, and the index ^UVXY-IV is simply and index that shows what UVXY would be if they achieved this goal perfectly.

I wanted to do an actual calculation to see this, and my numbers aren't coming out right, which leads me to believe I am not understanding something correctly.

According to us.spindices.com/indices/strategy/sp-500-vix-short-term-index-mcap , todays return for S&P 500 VIX Short-Term Futures Index is -5.73%.

According to my iphone, the index ^UVXY-IV opened at 93.46 and closed at 102.96 which is 10.16%, but 10.16 is not 1.5 x -5.73.

Where am I going wrong?

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