A 3x ETF looks simple at first glance. If the index goes up over time, shouldn’t the fund just do three times as well? In this episode, Michelle and Vox unpack the quiet trap inside that idea: daily reset, compounding, and why the path of returns matters as much as the direction.

Factual basis used in this episode: leveraged ETFs are designed to target a multiple of daily performance, not long-period performance; daily reset and compounding can make longer-period returns differ significantly from the simple multiple many investors expect; FINRA says these products typically are not appropriate as intermediate- or long-term holdings; and ProShares’ current UPRO prospectus says the fund rebalances daily and that higher volatility and longer holding periods can worsen deviation from the daily target.