SOXL plunges 63% from June peak, far outpacing SOXX’s 25% drop due to daily leverage reset mechanics.
The iShares Semiconductor ETF (SOXX) has declined 25% since its June 22 high, while the Direxion Daily Semiconductor Bull 3X Shares (SOXL) has fallen nearly 63% over the same period. The discrepancy stems from SOXL’s daily leverage reset, which compounds losses during volatile or downward-trending markets.
SOXL is designed to deliver three times the daily return of the NYSE Semiconductor Index, but its performance over longer periods does not mirror a simple tripled loss. A 25% drop in SOXX requires a 33% rebound to recover, while SOXL’s 63% decline demands a 170% rally to break even.
Leveraged ETFs have proliferated across volatile sectors, including recent launches tied to high-profile IPOs like SpaceX. Despite the risks, investor appetite for these products remains strong.