This Expense Ratio Calculator shows how much investment fees really cost you over time. Even a small expense ratio difference can reduce your final portfolio value by tens or hundreds of thousands of dollars.
An expense ratio is the annual fee charged by mutual funds and ETFs to cover operating costs. It is expressed as a percentage of assets under management and deducted automatically from returns.
For example, a 1% expense ratio means you pay $10 per year for every $1,000 invested.
Net Annual Return = Gross Return − Expense Ratio
Future Value = P × (1 + r)n
Where P is your investment, r is net return, and n is years invested.
Two investors each invest $10,000 for 30 years at 7%:
The higher-fee fund can cost over $60,000 in lost growth over time.
Is a higher expense ratio ever worth it?
Rarely. Actively managed funds must consistently outperform to justify higher fees.
Are expense ratios tax deductible?
No, they are deducted internally before returns are reported.
What is a good expense ratio?
ETFs: under 0.20%. Mutual funds: under 0.75% is considered reasonable.