How this calculator works
It grows the same starting amount and monthly contribution twice: once at your gross return minus the low fee, once minus the high fee. The difference between the two end values is the real cost of the pricier fund — the same approach the US SEC uses in its investor bulletin on fees, where a 1% fee versus 0.25% on a modest portfolio costs tens of thousands over twenty years.
Fees hurt twice: the money taken each year, and everything that money would have gone on to earn. That second, invisible loss is why the gap accelerates with time rather than staying proportional.
Common questions
What counts as a high fee?
Broad index funds and ETFs often charge 0.03–0.25% a year. Actively managed funds commonly charge 0.75–2%. Anything near 1% deserves a strong justification, because the long-run drag is severe.
Where do I find my fund's fee?
Look for the expense ratio, OCF (ongoing charges figure), or TER (total expense ratio) in the fund's factsheet or your platform's fund page. Add any platform or adviser fee on top — the calculator's fee field should hold the total you pay.
Is a higher fee ever worth it?
Occasionally — some markets and services are genuinely hard to access cheaply. But for mainstream stock and bond exposure, decades of SPIVA data show most expensive active funds underperform cheap index funds over long horizons, so the burden of proof sits with the higher fee.
Does the maths here match how funds actually charge?
Closely. Funds deduct fees from returns continuously; the calculator approximates that by subtracting the annual fee from the annual return, the same simplification regulators use for illustration. Real-world differences are small next to the effect being shown.
This tool is educational and not financial advice. Fees are certain; returns are not.
- 1.How Fees and Expenses Affect Your Investment Portfolio — US Securities and Exchange Commission
- 2.SPIVA U.S. Scorecard — S&P Dow Jones Indices, 2025