EFO +2x ProShares Ultra MSCI EAFE
EFO
ETF +2x BULL standardProShares Ultra MSCI EAFE
Realized return vs theoretical +2x MSCI EAFE
Pair counterpart found:
EFU
(-2x bear, ProShares Trust UltraShort MSCI EAFE)
Shorting both legs of a daily-reset bull/bear pair captures combined decay drift over time. Theoretical "free money" — actual edge depends on borrow rates (often punitive on the bear leg) and assignment risk on hard-to-borrow products.
Other leveraged products tracking MSCI EAFE
| Symbol | Factor | Direction | Issuer | Name | Implied AUM | 30d Vol | Options |
|---|---|---|---|---|---|---|---|
| EFU | -2x | BEAR | ProShares | ProShares Trust UltraShort MSCI EAFE | $1.3M | 7,870 |
How EFO works
EFO targets +2x the daily return of MSCI EAFE — not the cumulative return over multi-day windows. The fund rebalances at the close each day using swaps or futures, which is what creates the volatility drag the chart above visualizes.
Mathematical headline: drag ≈ −0.5 × N × (N−1) × σ² per period. For a +2x product on an underlying with 25% annualized vol, expected annual drag is around 6.2%. Add expense ratio and the realized number is typically worse.
- Short-term tactical: daily and intraday holds are where these products were designed to live.
- Premium selling: options on EFO carry very rich IV — see the quote page for IV rank and straddle pricing.
- Multi-day directional: works in strong trends; gets eaten alive in chop. Use the chart above to gauge the realized vs theoretical track record.