Mutual Fund Fee Impact Calculator

Expense ratios look trivial on a fund prospectus, but across decades they quietly drain a portfolio. This tool traces that drain year by year, showing how far a high-fee actively managed fund can fall behind a comparable low-cost index fund over the years. Seeing the gap side by side is the point: it turns an abstract percentage into a concrete dollar decision.

Projections rely on a compound interest formula adjusted for the annual expense ratio. The model grows a single lump sum, taking the expense ratio out of each year's return before compounding into the next year: Future Value = P × (1 + r − e)^n, where P is the amount invested, r is the assumed annual return, e is the expense ratio and n is the number of years. It runs the same money with no fee and with a 0.03% index-fund fee, and reports the gap to the no-fee balance as the cost of fees and as a share of the returns you would otherwise have earned. There is no field for ongoing contributions.

Treat the output as a projection, not a promise, since real market returns swing well beyond any single estimate. Fees are only one lens; fund performance, asset allocation, and your broader goals all belong in the decision. The most underrated factor is compounding itself, where a mere 0.5% difference in fees snowballs into a massive gap over 30 or more years.