DFEN closed Tuesday near $61, down from roughly $92 on August 6. That is a third of the fund gone in eighteen trading sessions, and a number that size invites the assumption that something broke. Nothing broke. The fund did precisely what its prospectus says it does, and the entire result is available from one line of arithmetic.

DFEN targets three times the daily return of the Dow Jones U.S. Select Aerospace & Defense Index. That index fell somewhere in the region of 11% across the same stretch. Spread evenly over eighteen sessions, an 11% decline works out to about 0.65% a day. Triple it and the fund loses 1.94% a day. Compound 1.94% eighteen times and the result is 29.7%. The realised loss was 33%. So of the thirty-three points, close to thirty are leverage applied to direction, and roughly three are everything else.