Calculate the annual management fee on a portfolio and its cumulative cost over time.
The headline fee is only part of the cost: every unit paid in fees also stops compounding. That is why the total cost over fifteen years is far larger than the simple sum of the annual charges. A 1% fee sounds small against a 7% return, but it takes roughly one seventh of the return every year and compounds against you.
Management Fee
Annual fee = portfolio value × fee rate; the true cost adds the compounding those fees would have earned
Annual fee = portfolio value × fee rate; the true cost adds the compounding those fees would have earned The headline fee is only part of the cost: every unit paid in fees also stops compounding. That is why the total cost over fifteen years is far larger than the simple sum of the annual charges.
A 1% fee sounds small against a 7% return, but it takes roughly one seventh of the return every year and compounds against you.
This calculator takes 4 inputs: Portfolio value, Annual management fee, Years held, Gross annual return. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.