ETF Fee Impact Calculator

See how small expense ratio differences can compound into large long-term costs. Compare two ETFs side by side, net of fees.

Your plan

Calculations run in your browser. Inputs are not stored.

Initial investment

Monthly contribution

Contribution frequency

Expected annual return (before fees)

Illustrative assumptions only. Adjust the rate for your own model.

Your gross return before any expense ratio is deducted.

ETF A expense ratio

Typical for a low-cost index ETF.

ETF B expense ratio

Illustrative higher-fee example.

Time horizon

30 years

Lower-fee ETF (A) after 30 years

The fee gap costs you $0 over 30 years

ETF A final balance$0

ETF B final balance$0

Difference (fee drag)$0

ETF A (low fee)ETF B (high fee)

Show yearly breakdown

Year	Contributions	ETF A	ETF B

How this calculation works

The formula

Each ETF's expense ratio is subtracted from the expected annual return, then the net return is compounded over your time horizon:

net return = gross return − expense ratio

With contributions added at the end of each period and monthly compounding at the net rate i, the balance after N periods is:

FV = P · (1+i)^N + M · ( ((1+i)^N − 1) / i )

The same formula runs for ETF A and ETF B with their own net rates. The gap between the two final balances is the total cost of the fee difference.

Assumptions

Expense ratios are subtracted from the gross return before compounding — the standard net-of-fee simplification.
Contributions are added at the end of each period; returns compound monthly.
Results are pre-tax and exclude commissions, spreads and other transaction costs.
No market volatility is modeled — the return rate is assumed constant.
Results are hypothetical and for education only — not financial advice.

View the formula →

Educational purposes only. Not financial advice. See the full methodology and disclaimer.

ETF fees, explained

What is an ETF expense ratio?

An expense ratio is the annual fee a fund charges, shown as a percentage of your invested amount. It covers management and operating costs. Low-cost index ETFs typically charge 0.03–0.25% per year, while actively managed funds can charge 0.5–1% or more.

Why do small fee differences matter over time?

Because fees are deducted from your return every year before compounding, they compound against you too. A 0.45% fee gap looks tiny in year one but can be worth tens of thousands of dollars over 20–30 years — often far more than the raw fee amount.

Is the expected return before or after fees?

The expected annual return here is the gross return before any fees. This calculator subtracts each ETF's expense ratio from that return, then compounds the net return over your time horizon. That's the honest way to compare funds.

Does this include taxes?

No. Results are pre-tax and ignore trading commissions, bid-ask spreads and other transaction costs. The calculator isolates the effect of the expense ratio only.

Are ETF fees charged separately?

No — expense ratios are deducted from the fund's returns automatically, so you never see a separate bill. That's exactly why they're easy to overlook and why seeing the compounded impact matters.