💰 Expense Ratio Calculator

Calculate the long-term cost of mutual fund or ETF expense ratios on your investment balance.

Investment Balance ($)

Fund A Expense Ratio (%) Low-cost index fund (e.g. Vanguard, Fidelity)

Fund B Expense Ratio (%) Actively managed fund

Gross Annual Return (%) before fees

Years to Hold

Why Expense Ratios Matter So Much

A 0.72% annual fee difference seems small, but on $100,000 over 30 years at 10% gross return, the lower-fee fund ($2.7M) leaves $180,000+ more than the higher-fee fund. That's the fee drag effect: every dollar paid in fees stops compounding. Jack Bogle called fees "the tyranny of compounding costs."

People Also Ask

What is a good expense ratio?

Index funds and ETFs: 0.03–0.20% is excellent. Actively managed funds: 0.50–1.50% is typical. Anything above 1% requires exceptional performance to justify the cost, and most actively managed funds don't beat their benchmark over the long term after fees.

Does the expense ratio come out of my account?

The expense ratio is deducted from the fund's assets before returns are calculated — you never see it as an explicit charge. If a fund earns 10% and charges 0.75%, your actual return is 9.25%. This invisibility is what makes fees so dangerous — they silently compound against you.

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