See the real cost of "small" fees. Visualize how Expense Ratios erode your wealth over 10, 20, or 30 years.
When you invest in a mutual fund or ETF, you pay an annual fee known as the Expense Ratio. It covers the fund's management, marketing, and operational costs. While a fee like 0.50% or 1.00% might sound negligible, the compound effect over decades can be staggering—often costing investors tens of thousands of dollars (or lakhs of rupees) in lost potential growth.
This calculator is designed to reveal the "invisible" cost of investing. By comparing your gross returns against the net returns after fees, you can decide whether that actively managed fund is really worth the premium, or if a low-cost index fund is the smarter path to wealth. If you are deciding between two specific funds, check out our Expense Ratio Comparison Calculator to see them side-by-side.
Example: Index Funds ~0.10%, Active Funds ~1.00% - 2.00%
Your Wealth (Net)
Final value after deducting all fees.
Lost to Fees
Total money paid to the fund manager.
Shows the % of total gross value consumed by fees.
This detailed schedule illustrates the compounding effect of expense ratios on your portfolio over the entire investment horizon. While early years might show negligible fees, notice how the "Fees Paid" column grows significantly in later years as your corpus expands. This creates a "drag" on your net growth. By examining the year-on-year data, you can see exactly when the cost of fees starts to outpace your monthly contributions or significantly eat into your returns. Use this breakdown to understand the long-term opportunity cost of high-fee funds versus low-cost index funds.
| Year | Contributions | Net Growth | Fees Paid | End Balance |
|---|
Understanding these terms is the first step to lowering your investment costs.
An annual fee expressed as a percentage of your investment. If you have $10,000 invested and the ratio is 1%, you pay $100/year regardless of profit or loss.
A mutual fund or ETF that tracks a market index (like S&P 500). They typically have very low expense ratios (0.03% - 0.20%) because they are passively managed.
Funds where a manager picks stocks to try and beat the market. These usually have higher fees (0.75% - 2.00%) which create a higher hurdle for generating net returns.
We ran the numbers on three common investment situations to show exactly how much difference an expense ratio makes over a lifetime.
Sarah chooses a low-cost ETF. Because her fees are negligible, almost all the compound interest works in her favor. Over 30 years, she pays a total of only ~$6,000 in fees on a half-million-dollar portfolio. This is the power of minimizing costs: you keep what you earn.
Mike invests in a standard actively managed fund. While 1% sounds small, it consumes a huge chunk of his compounding growth. Compared to Sarah (Scenario A), Mike ends up with $117,000 less in his retirement account, simply because that money went to the fund manager instead of growing for him.
John is in a high-cost fund, perhaps paying an advisor fee on top of the fund fee. The result is catastrophic for his long-term wealth. He loses nearly half of his potential gains to fees. Even though the market performed well (8%), his net return is drastically reduced to just 6%, costing him over $200,000 compared to the index investor.
Are you overpaying? Compare your fund's fees against these popular low-cost benchmarks in the US and Indian markets.
| Fund Name | Expense Ratio |
|---|---|
| Fidelity ZERO Large Cap (FNILX) | 0.00% |
| Vanguard S&P 500 ETF (VOO) | 0.03% |
| iShares Core S&P 500 (IVV) | 0.03% |
| Invesco QQQ Trust (QQQ) | 0.20% |
| ARK Innovation ETF (ARKK) | 0.75% |
| Fund Name | Expense Ratio |
|---|---|
| Navi Nifty 50 Index Fund | 0.06% |
| UTI Nifty 50 Index Fund | 0.18% |
| HDFC Index Fund (Nifty 50) | 0.20% |
| ICICI Pru Nifty Next 50 | 0.30% |
| Standard Active Equity Fund | ~1.5% - 2.0% |
Note: Ratios are approximate estimates for Direct Plans as of late 2024. Regular plans often charge an additional 0.5% - 1.0% commission.
Generally, yes. Costs are one of the few things you can control. For funds tracking the same index (e.g., S&P 500), the cheaper one is mathematically superior because it leaves more money to compound.
You can find the "Expense Ratio" listed prominently on the fund's summary page on financial sites like Morningstar or Yahoo Finance, or on the fund's official Fact Sheet.
No. This tool isolates the impact of the annual Expense Ratio. Brokerage commissions, load fees, and taxes are separate costs that can further reduce returns.
For passive index funds, look for 0.10% or less. For active funds, anything above 0.75% is considered high in today's market.
Official guide from the U.S. Securities and Exchange Commission on understanding fund costs.
A deep dive into what expense ratios are, how they are calculated, and why they matter.
Community-driven knowledge base on why minimizing costs is crucial for long-term returns.
Search for any mutual fund or ETF to see its current expense ratio and performance rating.
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