Single-Stock Leveraged ETFs Carry High Breakeven Hurdle Rates Due to Financing Costs
Marco Sammon and Chris Murray stated that financing costs and daily volatility drastically raise the hurdle rate for leveraged ETFs. For a 3x single-stock fund with 5% daily volatility, the breakeven return required to beat the underlier is estimated at 170% annually.
personMarco SammonpersonChris Murray
The tape
2 quotes
“So for a 3x fund with 5% daily volatility, the breakeven return is 170%.”
Marco Sammon
“We find that on average, this all in cost for single stocks is about 12%.”
Marco Sammon
Heard on The Rational Reminder Podcast — “How Leveraged ETFs Really Work (Marco Sammon & Chirs Murray) | #432”, published Thursday, October 22, 2026. Heardvine summarizes and quotes with attribution and timestamps, and links to the original everywhere.