Expense Ratio Impact Calculator

See how much of a portfolio a fund expense ratio consumes over decades of compounding.

About Expense Ratio Impact Calculator

An expense ratio is charged on the whole balance every year, so its cost compounds alongside the portfolio. Over thirty years a 0.75% charge typically consumes around a fifth of the final value, not 0.75% of it. Fees are the only variable in investing you control with certainty, and the years-of-growth figure shows what a seemingly small percentage really costs.

Formula

Expense Ratio Impact

Value after fees = principal × (1 + gross return − expense ratio)^years

expense ratio: Annual charge as a share of assets, deducted from return
fee drag: Cumulative cost of the charge as a share of the fee-free outcome

Worked example

With the default values below, Expense Ratio Impact Calculator returns Total Cost of Fees of $189,835.56. Change any input above and every figure here is recalculated in your browser.

Inputs used

Amount investedminimum 0: 100,000
Gross annual returnaccepts -20–50 %: 8 %
Annual expense ratioaccepts 0–5 %: 0.75 %
Years heldaccepts 1–60 years: 30 years

Results

Total Cost of Fees: $189,835.56
Value With No Fees: $1,006,265.69
Value After Fees: $816,430.13
Share of Final Value Lost to Fees: 18.87%
Years of Growth Equivalent Lost: 2.72

Step by step

1Values used
2Expense Ratio Impact
3Total Cost of Fees= 189,835.56
4Value With No Fees= 1,006,265.69
5Value After Fees= 816,430.13
6Share of Final Value Lost to Fees= 18.87
7Years of Growth Equivalent Lost= 2.72

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation or tax into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How is Expense Ratio Impact calculated?

Value after fees = principal × (1 + gross return − expense ratio)^years An expense ratio is charged on the whole balance every year, so its cost compounds alongside the portfolio. Over thirty years a 0.75% charge typically consumes around a fifth of the final value, not 0.75% of it.

Why does Expense Ratio Impact matter?

Fees are the only variable in investing you control with certainty, and the years-of-growth figure shows what a seemingly small percentage really costs.

What values do I need to enter?

This calculator takes 4 inputs: Amount invested, Gross annual return, Annual expense ratio, Years held. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.