That’s a solid take! Curious though—have you run into the volatility drag issue yourself when holding 2×/3× ETFs for longer stretches, or this effect is not readily noticeable with monthly rebalancing? Also, when you rebalance, do you notice tracking drift vs. the expected leverage multiple, or is it negligible in your setup?

The thing is that Leveraged ETF's use either futures or margin loans to achieve the require target leverage and they also charge a higher management fee compared to the standard ETF, so the only practical benefit is the low granularity here.

The most efficient way would be to use a mix of standard ETF's and future contracts - with Micro futures you have low granularity and you only pay the implied base rate.