Expense Ratio Calculator
See how a fund’s annual expense ratio erodes your returns over time — ending value with fees vs without, and the growth lost.
How it works
Each year: balance grows by the gross return, then the expense ratio is charged on the balance · Growth lost = no-fee value − after-fee value
An expense ratio is the annual percentage a fund charges on your balance, deducted whether the fund gains or loses. Because the fee is taken every year, it compounds against you: the dollars skimmed off can no longer grow, so the true cost over decades is far larger than the fees themselves. That is why a fraction of a percent — the gap between a 0.05% index fund and a 1% active fund — can cost six figures on a large, long-held balance.
Worked example
$100,000 growing at 7% for 30 years reaches $761,226 with no fees. A 0.5% expense ratio drops the ending balance to about $654,946 — you pay roughly $45,924 in fees and lose $106,279 of growth once the drag on those fees is counted.
Frequently asked questions
Why is the growth lost bigger than the fees paid?
Every dollar taken in fees is a dollar that can no longer compound. Over decades those forgone gains add up to far more than the raw fees, which is the hidden cost of a high expense ratio.
What is a reasonable expense ratio?
Broad index funds often charge 0.03%–0.20%, while actively managed funds can run 0.5%–1%+. On a long-term core holding, lower is almost always better since few funds beat their benchmark after fees.
Does this include trading costs or loads?
No — only the annual expense ratio. Sales loads, transaction fees and taxes are separate drags that can raise the true cost further.
Related calculators
Educational estimate, not investment or tax advice. Returns are never guaranteed and past performance does not predict the future. Confirm with a licensed advisor.