ETF Fee Calculator: Expense Ratio Impact
A small fee, paid every year.
See how an ETF’s expense ratio can affect the value of an investment over time. Compare two funds using the same starting amount, contributions, return assumption and time horizon.
- Free, no sign-up
- Runs in your browser
- Shareable results
- Educational only
Set the investment assumptions.
The amount you invest on day one.
Added at each month-end. Enter 0 for a one-off investment.
A hypothetical yearly return before fund expenses, the same for both funds.
Whole years, from 1 to 60.
Example: enter 0.03 for 0.03%.
Use a second fund’s published expense ratio.
Use comparable funds and the same assumed return to isolate the effect of different expense ratios. These are hypothetical assumptions for learning, not forecasts or expected results for any investment.
Result
How the projected balances diverge.
View the year-by-year table
What the numbers mean.
Fees are recurring.
An expense ratio is an annual fund operating expense expressed as a percentage of fund assets. It is reflected in the fund’s returns rather than usually appearing as a separate bill to the investor.
Time magnifies the gap.
When expenses reduce the amount that remains invested, the investor also loses the potential future growth on the amount spent. The effect can accumulate over a long holding period.
Cost is not the only factor.
A lower expense ratio does not automatically make one ETF the better choice. The index tracked, holdings, liquidity, spreads, tracking difference and tax treatment also matter.
About this etf fee calculator.
This ETF fee calculator shows how the expense ratios of two ETFs could change the value of your investment over time. Enter an initial investment, a monthly contribution, an expected return before fees, the number of years and the expense ratio of each fund. The calculator projects both funds on identical assumptions and reports the difference in ending value, the estimated expenses paid and a year-by-year table.
An expense ratio looks small, but it is charged every year on a balance that grows, and the money it takes can no longer compound. Learn what to check before you buy in how to research an ETF and read the glossary entry on the expense ratio. To compare funds that also have advisory fees or sales loads, use the investment fee comparison calculator, and to see growth without fees, the investment growth calculator.
How the etf fee calculator works in practice.
Fund A charges 0.03% a year and Fund B charges 0.20%. You start with $10,000, add $250 a month for 25 years (total contributions of $85,000) and assume a 7% annual return before fees.
Fund B projected value: $241,306
Difference (A minus B): $7,397, or 3.07% of Fund B’s value
Estimated expenses, Fund A: $731
Estimated expenses, Fund B: $4,775
Value with no fund expenses: $250,035
The funds’ estimated expenses differ by about $4,000, yet their ending values differ by $7,397, because the money paid in fees could not keep growing. Use the “Wider fee gap” preset (0.05% against 0.75%) and the gap grows to $28,756, or 13.13% of Fund B’s value. Over 10 years instead of 25, the original pair differs by only $729, which shows how much time matters.
How to choose your inputs.
Initial investment. The amount you invest on day one.
Monthly contribution. The amount added at each month-end. Enter 0 for a one-off investment.
Expected annual return before fees. A hypothetical yearly return, the same for both funds so the fee is the only difference. Test a lower and a higher figure.
Investment period. Whole years, from 1 to 60. Longer periods magnify the effect of fees.
Fund A and Fund B expense ratios. Use each ETF’s published expense ratio, entered as a percentage: 0.03 means 0.03%. Check the fund’s current fact sheet.
Currency symbol. Changes only the symbol shown. No exchange rate is applied.
How the ETF fee calculator works.
The calculator grows both funds month by month at the same return before fees. Each month it takes one twelfth of the annual expense ratio from the balance, then adds your contribution at the end of the month.
Monthly expense = balance after return × (expense ratio ÷ 12)
New balance = balance after return − monthly expense + contribution
Fee drag = value with no fund expenses − value after expenses
The model assumes a constant return and expense ratio, month-end contributions and no withdrawals. Real fund expenses accrue over time and actual returns vary.
Limits of this etf fee calculator.
The calculator assumes a constant return and expense ratio, month-end contributions and no withdrawals. It applies the expense ratio in equal monthly steps to keep the illustration simple. It excludes taxes, commissions, bid-ask spreads, foreign-exchange costs, tracking difference and any fund costs not included in the stated expense ratio. Real funds differ in what they hold, so a cheaper ETF is not guaranteed to do better, and past costs do not predict future returns.
Common questions about the etf fee calculator.
What is an ETF expense ratio?
An expense ratio is the yearly cost of running an ETF, shown as a percentage of the fund’s assets. It is reflected in the fund’s returns, so you do not usually see it as a separate bill.
Does this calculator include taxes and trading costs?
No. It ignores taxes, commissions, spreads, foreign-exchange costs and tracking difference, so real results will differ.
Are the results a forecast?
No. They are mathematical illustrations based on the assumptions you enter. Real returns and fees change over time.
How do ETF fees affect my returns over time?
Fees reduce the amount that stays invested, and the money taken can no longer grow. Over many years that compounding effect makes the gap in ending value larger than the fees paid.
Is a 0.20% expense ratio high?
It depends on what the fund does. Some broad index ETFs charge less, while specialised or actively managed ETFs often charge more. Compare funds that cover similar markets.
Does a lower expense ratio mean a better ETF?
Not by itself. The index tracked, holdings, liquidity, trading spreads, tracking difference and tax treatment also matter. Cost is one factor you can see in advance.
How do I calculate the effect of an expense ratio?
Grow the investment at the same gross return for both funds, subtract each fund’s expense ratio as it accrues, and compare the ending values. The calculator does this month by month.
How is this different from the investment fee comparison calculator?
This one compares two ETFs by expense ratio only. The investment fee comparison calculator also includes other yearly fees, such as advisory fees, and upfront sales loads.
More calculators.
Educational illustration only, not personalized investment, tax or financial advice. Results depend entirely on the assumptions entered and are not expected or guaranteed returns. Check each fund’s current prospectus and fee disclosures before making an investment decision.
Further learning: How to research an ETF · Glossary: Expense ratio · Investor.gov: Expense ratio · Research methodology · Financial disclaimer