Expense Ratio Impact Calculator:
How Fund Fees Drain $220,000 from a $100,000 Investment Over 30 Years
A 1.22 percentage point difference in expense ratio destroys 29.5% of 30-year terminal wealth: $100,000 at 7% gross return grows to $744,000 with a 0.03% ETF (Vanguard VTI) versus $524,000 with a 1.25% active fund — a $220,000 difference from fees alone, with no difference in market exposure. Even the gap between the average active fund (0.66-0.75% ER) and a broad index ETF (0.03%) compounds to $143,000 in lost wealth over 30 years. Expense ratios are the single most controllable determinant of investment outcomes: unlike market returns (uncontrollable) or stock selection (unreliable), reducing expense ratios guarantees an equal reduction in the fee drag on every dollar invested, every year, compounding for the rest of the holding period.
An expense ratio is the annual percentage of fund assets charged by a mutual fund or ETF to cover operating costs — portfolio management, administration, legal, custodial, and distribution expenses. Unlike a brokerage commission (paid once when buying), the expense ratio is deducted daily from the fund’s net asset value and reduces the investor’s effective return by exactly the ratio amount every year. This perpetual compounding toll is the distinguishing feature of expense ratios: unlike a one-time fee, the expense ratio’s cost compounds negatively for the entire holding period, silently reducing both current-year returns and the base on which future returns compound.
The mathematics are stark. A 1.25% annual expense ratio applied to $100,000 does not simply cost $1,250 per year. In year one, yes — $1,250 is approximately the fee drag. But the $1,250 not kept in the account cannot compound in subsequent years. By year 30, the cumulative effect of the expense ratio has consumed not $37,500 (30 years x $1,250 base year cost) but approximately $220,000 — nearly six times the naive calculation, because each year’s fee reduces the compounding base for all subsequent years. This is the mathematical reason why John Bogle, founder of Vanguard and pioneer of index investing, called costs “the tyranny of compounding” — the same force that makes investments grow works in reverse to make fees far more costly than they first appear.
Three Expense Ratio Formulas: Net Return, Fee Drag, and Required Active Alpha
1. NET RETURN AFTER EXPENSE RATIO
2. TOTAL FEE DRAG (DOLLAR COST OVER HOLDING PERIOD)
3. REQUIRED ALPHA (ACTIVE FUND MUST BEAT INDEX BY AT LEAST)
The required alpha calculation frames the active vs index decision in purely rational terms: an investor choosing a 0.75% active fund over a 0.03% index fund is betting that the fund manager will generate 0.72% of excess annual return every year over the entire holding period. This is not a trivial hurdle. S&P Global’s SPIVA report — the most comprehensive study of active fund performance — shows that approximately 86% of US large-cap active managers underperformed the S&P 500 over the 15-year period ending 2023. The expected outcome of choosing an active fund over an index fund is therefore underperformance equal to approximately the expense ratio difference, not outperformance. This statistical reality makes low-cost index investing the mathematically justified default choice, with active fund selection appropriate only for investors who have strong evidence-based reasons to believe a specific manager can consistently generate alpha above the required threshold.
Four Expense Ratio Scenarios: 0.03% Index, 0.75% Active, 1.25% High Cost, and Break-Even
The break-even card’s most striking statistic — only 14% of active large-cap funds outperformed the S&P 500 over 15 years — defines the base rate problem of active fund selection. Even if an investor could perfectly identify the top-performing 14% of active funds in advance (which research does not support), they would still be choosing from a minority of funds at a higher cost than the index. In practice, fund selection based on past performance is largely ineffective: S&P SPIVA studies show that less than 25% of top-quartile active funds maintain top-quartile performance in subsequent periods, approaching random. The compounding conclusion: the expected value of choosing active funds over index funds is negative approximately 86% of the time, and the negative cases involve compounding fee drag that grows larger with every year of holding.
Calculate Your Fund’s Fee Drag: How Much Are Your Expense Ratios Costing You Over 10, 20, and 30 Years?
Enter your current fund’s expense ratio, portfolio value, expected gross return, and holding period to calculate total fee drag in dollars, comparison against a 0.03% index fund alternative, the required annual alpha your active fund must generate to justify the cost difference, and the after-fee terminal wealth at 10, 20, and 30 year milestones.
Open the Expense Ratio CalculatorComplete Fee Drag Analysis: $100,000 at Four ERs Over 30 Years
The data block’s final line — 31.2% of maximum potential terminal wealth destroyed by a 1.25% expense ratio — frames the fee decision in its starkest terms. Choosing a 1.25% ER fund over a 0% fee equivalent does not cost 1.25% of wealth; over 30 years it costs 31.2% of what the investment could have become. Expressed differently: the 1.25% ER fund delivers $524,057 in a world where the same market return in a 0% fee fund would produce $761,226 — the fees consumed more than a third of the potential return. Every year the investor holds the high-cost fund rather than switching to the low-cost alternative, the fee drag compounds further into a larger and larger irreversible cost. This is why behavioral finance research consistently shows that fee reduction is the highest-return action most investors can take — not market timing, not stock picking, not portfolio optimization, but simply choosing cheaper funds.
2025 Low-Cost Fund Reference: Expense Ratios Across Major Fund Categories
| Fund / ETF | Category | Expense Ratio | $100K Fee Drag vs 0% (30yr) | Best For |
|---|---|---|---|---|
| Fidelity ZERO Total Market (FZROX) | US Total Stock Market | 0.00%! | $0 fee drag | Fidelity account holders wanting zero cost; no ETF version, mutual fund only at Fidelity |
| Vanguard Total Stock Market ETF (VTI) | US Total Stock Market | 0.03% | $16,891 | Any brokerage; ETF structure; most popular index fund by assets |
| Vanguard S&P 500 ETF (VOO) | US Large Cap (S&P 500) | 0.03% | $16,891 | S&P 500 exposure; Warren Buffett’s recommended fund for most investors |
| iShares Core S&P 500 ETF (IVV) | US Large Cap (S&P 500) | 0.03% | $16,891 | Alternative to VOO; same index, same cost; BlackRock-managed |
| Vanguard Total Bond Market ETF (BND) | US Total Bond Market | 0.03% | $16,891 | Bond allocation; covers investment-grade US government and corporate bonds |
| Vanguard Total Intl Stock ETF (VXUS) | International (excl. US) | 0.07% | $39,050 | International diversification; covers developed and emerging markets ex-US |
| Vanguard Target Ret. 2045 (VTIVX) | Target Date Fund | 0.08% | $44,575 | All-in-one retirement fund with automatic glide path; very low for TDF |
| Fidelity Freedom Index 2045 (FIOFX) | Target Date Fund | 0.12% | $66,729 | Low-cost target date option for Fidelity 401k plans |
| SPDR S&P 500 ETF (SPY) | US Large Cap (S&P 500) | 0.0945% | $52,614 | Highest liquidity/trading volume of any ETF; retail investors should prefer VOO/IVV at 0.03% |
| Average US Active Equity Mutual Fund | US Active Large Cap | ~0.66-0.75% | $122,000-$143,000 | Must generate 0.63-0.72%/yr alpha over index just to tie; 86% fail |
| Typical High-Cost Active Fund | Various active | 1.00-1.50% | $175,000-$250,000 | Almost never justified unless fund generates extraordinary consistent alpha |
| Fee drag calculated on $100,000 at 7% gross annual return over 30 years, comparing to a 0.00% hypothetical zero-cost fund. Actual expense ratios may change; verify current ER at fund company websites or FINRA fund analyzer. Note: SPY is often cited as the “S&P 500 ETF” but charges 3x the cost of VOO/IVV for identical exposure — retail long-term investors should use VOO (Vanguard) or IVV (iShares) instead. Fidelity ZERO funds (FZROX, FZILX, FZROX) offer 0% ER but are only available for Fidelity accounts (not transferable to other brokerages as ETFs). Total expense ratio includes management fee; some funds also have transaction fees, 12b-1 marketing fees, and other costs that raise the effective total cost beyond the stated ER. The SEC requires funds to disclose the standardized expense ratio in the fund’s prospectus and in the SEC’s EDGAR database. | ||||
The SPY row contains one of the most common and costly fund-selection errors retail investors make: SPY (SPDR S&P 500 ETF) charges 0.0945% while VOO (Vanguard S&P 500 ETF) and IVV (iShares Core S&P 500 ETF) provide identical S&P 500 exposure at 0.03%. On $100,000 over 30 years at 7%, SPY’s 0.0945% ER costs approximately $52,614 more than VOO/IVV’s 0.03%. SPY is the appropriate choice only for institutional traders and sophisticated investors who need extreme intraday liquidity and tight bid-ask spreads for options and short-selling purposes — it is an inferior choice for any buy-and-hold retail investor solely for the reason that it charges 3.15x the price of identical alternatives. The prevalence of SPY in retail portfolios is primarily a legacy of SPY being the first-mover in the ETF market (launched 1993), and investor familiarity rather than rational cost analysis.
Active vs Index Over Time: What the SPIVA Data Shows
| Fund Category | 1-Year Underperformance | 5-Year Underperformance | 10-Year Underperformance | 15-Year Underperformance |
|---|---|---|---|---|
| US Large-Cap Equity | ~60% | ~79% | ~85% | ~86% |
| US Mid-Cap Equity | ~58% | ~80% | ~86% | ~89% |
| US Small-Cap Equity | ~56% | ~76% | ~88% | ~93% |
| International Developed | ~62% | ~83% | ~88% | ~90% |
| Emerging Markets | ~52% | ~71% | ~79% | ~85% |
| US Government Bond | ~61% | ~75% | ~88% | ~92% |
| US High-Yield Bond | ~50% | ~68% | ~72% | ~80% |
| Source: S&P Indices Versus Active (SPIVA) US Scorecard through year-end 2023, published by S&P Dow Jones Indices. Values are approximate percentages of active funds in each category that UNDERPERFORMED their benchmark index over the specified period after fees. Figures may vary by specific report edition and survivorship bias adjustments. Note: survivorship bias correction is applied — funds that closed or merged during the period (often because of poor performance) are included in the analysis, not excluded. Without survivorship bias correction, underperformance rates would be even higher. The high-yield bond category shows the best active manager performance, which is often explained by the difficulty of replicating the benchmark precisely and the value of credit research in identifying individual issuer quality. However, even in high-yield, 80% of active managers underperformed over 15 years. Small-cap active management shows the worst relative performance at 93% underperformance rate over 15 years, despite the common claim that small-cap markets are less efficient and thus more amenable to active management. | ||||
The SPIVA data’s time trend — underperformance rates rising from roughly 55-60% over 1 year to 85-93% over 15 years — is one of the most robust empirical findings in finance. In any given year, some active managers outperform (the 40-44% who beat the index over 1 year), and skill versus luck cannot be disentangled over short periods. Over 15 years, however, the compounding effect of expenses and the reversion to the mean of performance becomes dominant: the managers who appeared skillful over 1-3 years increasingly fail to sustain alpha over 10-15 year periods. The most likely explanation is that most short-term active outperformance reflects luck rather than repeatable skill, while the persistent cost disadvantage of active management (0.66-0.75% annual ER vs 0.03% for index) continuously compounds against the active manager who must overcome it every year.
Fee Drag Comparison: $100,000 at Seven Percent Gross Return, 30 Years, Different ERs
The bars reveal the most important insight about expense ratios: the difference between 0.00% and 0.03% (the VTI/VOO gap from the Fidelity ZERO funds) is barely visible — a $16,891 difference over 30 years. The difference between 0.03% and 0.75% — the average active fund — is massive: $143,218 over 30 years. The lesson is not that fees must be zero, but that they must be near-zero. The broad-market index ETF range of 0.03-0.10% represents a near-zero-cost tier that is dramatically cheaper than the active fund tier of 0.66-1.50%. Investors should focus their energy on moving from high-cost active funds to low-cost index ETFs — this is where the $143,000-$220,000 fee drag reduction occurs — rather than agonizing over the difference between a 0.03% and a 0.07% ETF (a $39,050 vs $16,891 30-year drag difference of only $22,159).
Expense Ratios in 401(k) Plans: The Workplace Fee Trap
401(k) Expense Ratios: Your Plan May Be Charging You 10-50x the Market Rate
Employer-sponsored 401(k) plans are not required to offer the cheapest available funds, and many plans — particularly those offered by smaller employers — include funds with expense ratios far above what’s available in the open market. Plan administrators often select funds based on revenue sharing arrangements (where the fund company pays the plan administrator a portion of the expense ratio), creating a conflict of interest that systematically favors higher-cost funds. Common 401(k) fund cost structures: institutional share classes (typically 0.01-0.30% for plan participants, cheaper than retail): available in large plans with significant negotiating power. Retail share classes (0.5-1.5%): often found in small employer 401(k) plans with limited bargaining power. Actively managed mutual funds (0.5-1.5%): frequently included due to revenue sharing. What you can do: use the plan’s cheapest index fund option (typically labeled “index” or containing “S&P 500,” “Total Market,” or “Index” in the name). At minimum, contribute enough to capture the employer match (free money that overcomes even high expense ratios). If your plan has no options under 0.5%, contact HR or the plan administrator to request lower-cost alternatives — the DOL’s fee disclosure rules (404a-5) require plans to provide expense ratio information and give employees standing to request competitive fund options. Roll over old 401(k)s to an IRA where you have full control over fund selection — most IRA investors can access 0.03% ETFs with no restrictions.
The SEC’s Required Annual Expense Disclosure and How to Use It
The SEC requires all mutual funds and ETFs to publish a standardized expense ratio in the fund’s prospectus and in annual reports. The expense ratio is expressed as a percentage of assets and represents all fees deducted from the fund’s net asset value annually. How to find and interpret: on any fund’s website, the expense ratio appears in the fund overview section and in the SAI (Statement of Additional Information). The SEC’s EDGAR database contains all fund prospectuses. The FINRA Fund Analyzer (finra.org/fundanalyzer) allows direct fee comparison between up to three funds with dollar-cost projections. On 1099-DIV and 1099-B forms: expense ratios are NOT separately disclosed — they are silently deducted from the fund’s NAV before distribution calculations, making them invisible on tax documents. This invisibility is precisely what makes expense ratios so insidious: unlike a brokerage commission (which appears as a line item), the expense ratio is consumed before the investor sees any number, making it the fee that “cannot be seen.” The practical defense: check the expense ratio column on any fund research platform before purchasing, and default to the lowest-cost option that meets the investment objective.
Expense Ratio Action Checklist
Frequently Asked Questions: Expense Ratio Impact Calculator
What is an expense ratio and how does it affect investment returns?+
An expense ratio is the annual fee deducted from a fund’s NAV daily, expressed as a percentage of assets. It reduces net return by exactly the ER amount: at 7% gross, 0.03% ER = 6.97% net; 1.25% ER = 5.75% net. The compounding impact far exceeds the annual percentage: $100,000 at 7% gross for 30 years — 0.03% ER grows to $744,335; 1.25% ER grows to $524,057; fee drag = $220,278. The $220K fee drag represents 31.2% of what $100,000 could have become — all paid silently in compounding fees. Unlike brokerage commissions (visible line items), expense ratios are deducted before the investor sees any NAV or return figure, making them invisible on account statements and tax documents. The expense ratio is the single most controllable factor in investment outcomes: reducing from 1.25% to 0.03% guarantees a 1.22% per year improvement in net return with zero uncertainty.
What expense ratios should I look for in index funds?+
Best-in-class 2025 expense ratios: US total stock: Fidelity ZERO (FZROX) 0.00%, VTI/VOO/IVV 0.03%. US bonds: BND/AGG 0.03%. International: VXUS/IXUS 0.07%. Target date: Vanguard TDFs 0.08-0.15%, Fidelity Freedom Index 0.12%. Avoid: SPY at 0.0945% when VOO at 0.03% provides identical S&P 500 exposure. Benchmark: any broad market index fund above 0.20% is too expensive — better alternatives exist. Average active equity fund: 0.66-0.75%. High-cost active: 1.00-1.50%. The fee tier that matters most: moving from 0.75% (active average) to 0.03% (index) produces $143,000 in savings over 30 years on $100,000. Moving from 0.03% to 0.00% saves only $16,891 — worthwhile, but dramatically smaller than the active-to-index switch. Focus energy on the high-to-low transition, not splitting hairs between 0.03% and 0.07%.
How do I calculate fee drag from expense ratios?+
Fee drag formula: Fee Drag = Initial x [(1 + Gross Rate)^Years – (1 + Gross Rate – ER)^Years]. Or simply: Fee Drag = Terminal Value at 0% ER – Terminal Value at actual ER. Example: $100,000, 7% gross, 30 years, comparing 0.03% vs 1.25% ER. Terminal at 0.03%: $100,000 x (1.0697)^30 = $744,335. Terminal at 1.25%: $100,000 x (1.0575)^30 = $524,057. Fee drag = $220,278. Scale: $250K portfolio = $550,695 fee drag; $500K = $1.1M fee drag; $1M = $2.2M fee drag. The fee drag compounds super-linearly with time: 10-year fee drag (0.03% vs 1.25%): approximately $21,000. 20-year: approximately $78,000. 30-year: $220,000. This acceleration occurs because the missing compounding from year 1 fees compounds further in year 2, year 3, and so on through year 30, creating an ever-widening gap between the index and high-cost alternatives.
What alpha does an active fund need to generate to justify higher expense ratios?+
Required alpha = Active Fund ER – Index Fund ER. At 0.75% active vs 0.03% index: 0.72%/yr alpha required just to tie the index after fees. At 1.25% active: 1.22%/yr required. This alpha must be generated every year, compounding. S&P SPIVA data (year-end 2023): 86% of US large-cap active managers underperformed the S&P 500 over 15 years. Only 14% outperformed. Persistence: less than 25% of top-quartile managers maintain top-quartile performance in subsequent 5-year periods. This means: (1) most active funds fail to generate the required alpha; (2) even funds that have generated alpha cannot be reliably identified in advance based on past performance; (3) the statistically expected outcome of choosing active over index is underperformance equal to approximately the ER difference. Exception cases where alpha may exist: microcap/small-cap (less efficient markets), private credit, specific alternative strategies. In large-cap US equity — the most common fund category — the case for active management over index is statistically very weak.
What are the Fidelity ZERO funds and why are they 0%?+
Fidelity ZERO funds (FZROX — Total Market, FZILX — International, FZIPX — Extended Market, FZROX — Large Cap) charge 0.00% expense ratios — no annual management fee of any kind. How Fidelity can offer them at zero: Fidelity subsidizes these funds as loss-leaders to attract investors to the Fidelity platform, where Fidelity earns revenue from other products (money market funds, brokerage services, financial advice, securities lending within other funds). Trade-off: ZERO funds are proprietary Fidelity products — they are not ETFs, cannot be transferred to other brokerages in kind, and must be sold (potentially triggering capital gains) if you move to a different brokerage. This makes them inappropriate as long-term holdings for investors who might switch brokerages. Who should use them: investors committed to staying at Fidelity long-term, particularly in IRA accounts where no capital gains apply to transfers. Who should prefer VTI/VOO instead: investors who may switch brokerages, investors in taxable accounts who want to avoid potential forced sales, or investors who value the ETF’s intraday trading liquidity. The 0.03% difference between FZROX and VTI produces only $16,891 fee drag over 30 years on $100,000 — a reasonable price for the flexibility of the ETF structure.
How do expense ratios affect my 401(k) differently from a taxable account?+
The expense ratio impact is identical in dollar terms — 1.25% deducted from any account produces the same compounding drag regardless of account type. However, two important differences: (1) Fund availability: in a taxable account, you have unlimited fund choice (any ETF or no-load mutual fund). In a 401(k), you are limited to the employer’s curated fund menu, which may not include low-cost index ETFs. Switching to VTI requires a fund available in the plan; if VTI is not offered, choose the cheapest S&P 500 or total market index option available. (2) Tax consequences of switching: in a taxable account, selling a high-ER fund to buy a low-ER fund triggers capital gains tax if the fund has appreciated. In a 401(k)/IRA, switching between funds has no tax consequence — you can move from a 1.25% active fund to a 0.03% index fund with zero cost beyond the transaction itself. Implication: always switch immediately within 401(k) and IRA accounts. In taxable accounts, weigh the one-time capital gains tax against the permanent annual fee savings (usually worthwhile if the fund will be held 5+ more years). Roll over old 401(k)s to IRAs upon leaving employers to access the full universe of 0.03% ETFs without fund menu restrictions.
Why does SPY charge more than VOO for the same S&P 500 exposure?+
SPY (SPDR S&P 500 ETF, launched 1993) charges 0.0945%; VOO (Vanguard S&P 500 ETF, launched 2010) and IVV (iShares Core S&P 500 ETF, launched 2000) charge 0.03% for identical S&P 500 index tracking. The 3.15x price premium for SPY exists for one primary reason: SPY is structured as a Unit Investment Trust (UIT) rather than a registered investment company (RIC), reflecting its legacy structure from 1993. The UIT structure prevents dividend reinvestment during the quarter and imposes other operational constraints. State Street Global Advisors (SPY’s manager) charges a higher fee for the product’s liquidity and brand recognition. SPY is the most actively traded security in the world by dollar volume, making it essential for institutional traders who need to hedge large positions, execute rapid trades, and use options — these users pay the premium for SPY’s extreme liquidity. Retail long-term investors who hold for years have no need for SPY’s intraday trading characteristics and should use VOO or IVV at 0.03%, saving approximately $52,614 over 30 years on $100,000 vs holding SPY at 0.0945%.
Are there any hidden fees in index ETFs beyond the expense ratio?+
Index ETFs (VTI, VOO, BND, VXUS) have very low total costs beyond the stated ER, but a few factors worth knowing: Bid-ask spread: when buying or selling an ETF, you transact at the bid (if selling) or ask (if buying) price, not the NAV. For highly liquid ETFs like VTI/VOO, the spread is typically 0.01-0.02% — negligible for buy-and-hold investors. For less-liquid ETFs (niche sectors, small-cap international), spreads can be 0.10-0.50%. Tracking error: index ETFs don’t perfectly track their benchmark — they may slightly outperform (via securities lending income) or underperform (from trading costs, dividend reinvestment lags). For Vanguard total market ETFs, tracking difference is typically within 0.01-0.03% of the index. Securities lending income: many ETFs lend securities to short-sellers and earn income, which can partially offset or even exceed the expense ratio (some Vanguard funds have generated net returns slightly above benchmark after this income). Capital gains distributions: index ETFs rarely distribute capital gains (ETF structure uses in-kind redemptions to avoid taxable events); this provides a significant tax advantage over mutual funds in taxable accounts. Bottom line: for VTI, VOO, BND at 0.03% ER in a taxable account, the total annual cost to a long-term holder is effectively 0.03-0.05% — the stated ER plus negligible bid-ask spread and nearly zero capital gains distributions.
Can actively managed funds ever be worth the higher expense ratio?+
Yes — but in a much narrower set of circumstances than commonly marketed. Defensible cases for active funds: (1) Markets where indexing is impractical or less effective: private credit, bank loans, private equity, direct real estate, specific alternative strategies. These have no efficient index equivalents and active management can add genuine value. (2) High-yield bonds: SPIVA shows active high-yield managers have the best relative performance (only 80% underperform over 15 years vs 93% for small-cap). The skill of credit research in avoiding defaults provides more demonstrated value in high-yield. (3) Very specific niche exposures not captured by indices (e.g., activist investing, merger arbitrage). (4) Tax-loss harvesting overlay funds (direct indexing): “active” in structure but index-tracking in exposure, with tax alpha from harvesting. Not defensible cases for active funds (where evidence strongly favors index): US large-cap equity, US small-cap equity, developed international equity, emerging markets equity, US investment-grade bond market — all categories with liquid, efficient index alternatives where SPIVA data shows persistent active fund underperformance.
Key Takeaways
Expense ratios are the most controllable factor in long-term investment outcomes, and the difference between 0.03% (Vanguard VTI/VOO) and 1.25% (high-cost active fund) destroys $220,000 of wealth over 30 years on $100,000 — a 29.5% reduction in terminal wealth from fees alone. At the average active fund expense ratio of 0.66-0.75%, the 30-year fee drag versus a 0.03% index ETF is $143,000 on the same $100,000 investment. The active fund must generate 0.72% of annual alpha above the benchmark every year just to tie the index fund after fees, and S&P SPIVA data shows approximately 86% of active managers fail to achieve this over 15-year periods.
Three immediate expense ratio actions: audit every fund you own and replace any with ER above 0.20% with a 0.03% index ETF equivalent (in IRA/401k, switch immediately with no tax consequence; in taxable accounts, calculate whether long-run fee savings outweigh the one-time capital gains cost), check your 401(k) plan’s fund menu and select the lowest-ER option available (roll over old 401(k)s to IRAs for full access to 0.03% ETFs), and never purchase an active fund without first verifying its 15-year track record of net outperformance versus the benchmark by at least the ER difference above the index alternative — the burden of proof lies with the higher-cost active fund, not the index.
Calculate the Exact Dollar Cost of Your Fund’s Expense Ratio Over Your Investment Horizon
Our Expense Ratio Impact Calculator computes total fee drag in dollars for any expense ratio, portfolio value, gross return, and holding period. It shows the comparison against a 0.03% index ETF, the required annual alpha your current fund must generate to justify its cost, and how fee drag accumulates at 5, 10, 15, 20, and 30-year milestones.
Launch the Expense Ratio Calculator