An ETF's advertised return isn't what you actually keep — the fund's expense ratio is deducted automatically, every year, whether the market goes up or down. This calculator shows the real, after-fee growth of your investment.
Why a 'small' fee matters so much
A 0.5% annual fee sounds tiny, but it compounds against you the same way returns compound for you. Over 20-30 years, the difference between a 0.03% fund and a 1% fund can be tens of thousands of dollars on the same investment.
A worked example
Say you invest $10,000 up front, add $300 every month, and earn 8% a year before fees, for 20 years. With a 0.03% expense ratio (typical for a broad-market index fund), you'd end up with about $225,000. With a 1% expense ratio (typical for an actively managed fund), that same investment grows to about $197,000 instead — a difference of roughly $28,000, from a fee that looked like "just 1%" on the fund's fact sheet.
What counts as a 'good' expense ratio
Many broad-market index ETFs charge between 0.03% and 0.20% per year. Actively managed funds often charge 0.5% to 1.5% or more — for that fee to be worthwhile, the fund needs to consistently outperform its benchmark, which most don't over long periods.
How this calculator works
We subtract your expense ratio from your expected annual return to get a net rate, then apply that net rate to your contributions using standard monthly compounding — the same formula this site's Compound Interest Calculator uses. The "lifetime cost of fees" figure is the difference between that result and what you'd have earned at the full, fee-free rate. This is a projection based on the numbers you enter, not a prediction, and doesn't model taxes, trading costs, or a fund's actual historical performance.