Portfolio leverage — box vs. unleveraged

Two timelines for the same portfolio: hold unlevered, or borrow today via a box spread, deploy into the same ETF, and repay the box at the horizon.

Portfolio today EUR

€

Box loan EUR

€

Horizon 10y

Monthly contribution EUR / month

€

Tune assumptions

Expected portfolio return 7.0%

Existing unrealized gain 40%

Maintenance margin (broker) 50%

Termingeschäft loss offset · box loss ↔ Kapitalerträge per JStG 2024 (26.375%) Constant LTV (annual top-up) · box grows with the position; otherwise leverage decays

Leverage only pays when portfolio return beats the box rate. With offset on, the bar drops — the box loss reduces the tax on the ETF gain.

Extra wealth from leverage · €75,373

Box rate (12m EUR) · 2.54%

Offset on — Path B saves +€11,262 in tax

A · Unleveraged 4.86% CAGR

€803,283

Portfolio pretax: €983,576
Tax at horizon: −€180,293
Cost basis: €300,000
Unrealized / value: 69.5%

B · Box-leveraged 5.80% CAGR

€878,656

Position pretax: €1,278,648
Tax at horizon: −€218,556
Box debt at payoff: −€192,699
Cost basis: €450,000
Unrealized / value −4.7pp: 64.8%
Box loss (Termingeschäft): €42,699

Loan-to-value today: 30.0% · at horizon 19.6% (leverage decay) — the leveraged position withstands a 53.8% drawdown before the broker triggers a margin call (at 50% maintenance). Box spread has no margin-call risk during the tenor.

Break-even return

At a portfolio return of 2.54% p.a. both paths break even after tax. If your expectation is higher, leverage pays (with offset on — without it the bar is higher).

How the comparison works

A · Unleveraged

Existing portfolio just sits and compounds. At horizon mark-to-market and pay Abgeltungsteuer on the total gain (cost basis derived from the current unrealized-gain ratio).

B · Box-leveraged

Take a box spread today, immediately deploy proceeds into the same ETF. The combined (P + L) position compounds; box debt grows at r_box and is repaid from the portfolio at horizon. The Termingeschäft loss at box maturity fully offsets Kapitalerträge per JStG 2024 — toggle reveals the effect.