Expense Ratio Calculator
Calculate the impact of expense ratios on your ETF and mutual fund investments over time
Calculate Expense Ratio Impact
Your first deposit or lump sum investment
Additional amount you invest each year
How long you plan to invest
Historical performance of the fund/ETF
Annual fee charged by the fund (typically 0.03% to 2%)
Investment Analysis Results
Investment Breakdown
Total Contributions: $0.00
Initial Investment Growth: $0.00
Periodic Investment Growth: $0.00
Total Growth with Expense: $0.00
Total Growth without Expense: $0.00
Growth Lost to Fees: $0.00
Cost Impact Analysis
Example: SPY vs ARKK ETF
SPY ETF (Low Cost)
Initial Investment: $10,000
Yearly Investment: $5,000
Duration: 6 years
Expected Return: 13.59%
Expense Ratio: 0.0945%
Total Cost: ~$208
ARKK ETF (Higher Cost)
Initial Investment: $10,000
Yearly Investment: $5,000
Duration: 6 years
Expected Return: 30.97%
Expense Ratio: 0.75%
Total Cost: ~$2,916
Key Insight
Higher expense ratios can be justified by higher returns, but always compare the net effective return after fees.
Expense Ratio Benchmarks
Excellent: ≤0.1%
Ultra-low cost index funds
Good: 0.1-0.25%
Low-cost ETFs and index funds
Average: 0.25-0.45%
Market average expense ratio
High: >0.75%
Actively managed funds
Investment Tips
Compare expense ratios within the same fund category
Consider total return after fees, not just gross return
Small differences compound significantly over time
Index funds typically have lower expense ratios
Higher fees may be justified by superior performance
Understanding Expense Ratios
What is an Expense Ratio?
An expense ratio is the annual fee charged by mutual funds and ETFs, expressed as a percentage of your investment. It covers management fees, administrative costs, and other operating expenses of the fund.
Why Expense Ratios Matter
- •Directly reduces your investment returns
- •Compounds over time, significantly impacting long-term wealth
- •Can vary dramatically between similar funds
- •Charged regardless of fund performance
Calculation Formulas
Future Value of Initial Investment:
FVI = I₀ × (1 + r_effective)ⁿ
Future Value of Periodic Investments:
FVPI = PI × ((1 + r_effective)ⁿ - 1) / r_effective
Effective Return:
r_effective = r_expected - expense_ratio
Where: I₀ = initial investment, PI = periodic investment, n = duration, r = return rate
Types of Investment Funds and Typical Expense Ratios
Index Funds/ETFs
Expense Ratio: 0.03% - 0.20%
Passively managed funds that track market indices. Lower costs due to minimal management.
Actively Managed Funds
Expense Ratio: 0.50% - 2.00%
Professional managers actively select investments. Higher costs for research and management.
Specialty/Alternative Funds
Expense Ratio: 0.75% - 3.00%
Thematic or complex strategy funds. Higher costs due to specialized management and research.