Your inputs

Compare two funds by cost

Initial investment

Starting amount invested in each fund, up to $1,000,000,000.

Annual contribution

Added at each year-end; use 0 for none.

Years invested

Whole number of years to hold, from 1 through 100.

Expected annual return

The shared gross return both funds earn before fees, from −40% through 40%.

Fund A

Fund A name

A name or ticker to label this fund, such as VOO.

Fund A expense ratio

Annual expense ratio, from 0% through 5%. A broad index fund is often near 0.03%.

Fund B

Fund B name

A name or ticker to label the fund you are comparing against.

Fund B expense ratio

Annual expense ratio, from 0% through 5%. An actively managed fund can run 0.5% or more.

Your inputs are calculated locally and are not stored.

The cheaper fund keeps you$13,844.07

Over 30 years, Fund A (0.03%) ends at $75,485 versus $61,641 for Fund B (0.75%) — the 0.72% fee gap costs $13,844, all from the expense ratio.

Fund A final value: $75,484.86
Fund B final value: $61,640.79
Fund A net return: 6.97%
Fund B net return: 6.25%
Fund A total fees: $637.69
Fund B total fees: $14,481.77

Formula & methodology

How the comparison is calculated

Each fund earns the same gross return you enter, then gives back a slice of it every year as its expense ratio. The net return is simply the gross return minus the expense ratio. We grow the initial investment — plus any year-end contributions — at that net return to get each fund’s final value. Total fees are the gap between what the fund would be worth with no expense ratio at all and what it is actually worth after the fee, so you can see the exact dollars the ratio skimmed away.

Net return % = Gross return % − Expense ratio %
Final value = Initial × (1 + Net return)^Years + contributions grown at the net return
Total fees = Zero-fee balance − Net balance

Gross return: The shared return both funds earn before fees
Expense ratio: Each fund’s annual fee, as a percent
Initial: Starting amount invested in each fund
Contributions: Amount added at each year-end, if any
Years: Whole years the money stays invested

The core insight is what makes fees so easy to overlook: for two funds tracking the same index, the underlying return is identical, so the only thing that separates them is the expense ratio. And that ratio is charged on your whole balance every year, so it compounds against you. A gap that looks trivial on paper — a cheap fund at 0.03% versus a pricier one at 0.75%, a 0.72% spread — quietly grows into tens of thousands of dollars over a few decades.

Worked example

$10,000 for 30 years at 7%: 0.03% versus 0.75%

Suppose you invest $10,000, add nothing more, and both funds earn 7% a year for 30 years. Fund A charges a 0.03% expense ratio, so it compounds at a 6.97% net return and ends at about $75,485. Fund B charges 0.75%, compounds at 6.25%, and ends at about $61,641. That is a difference of roughly $13,844 — money lost purely to the higher fee, even though the two funds tracked the exact same index and earned the exact same gross return.

Put another way, Fund B quietly paid about $14,482 in fees over the period while Fund A paid about $638. The calculator above shows the exact figures for any amounts you enter.

Assumptions

What this calculator assumes

Both funds earn the same gross return before fees. This is the fair comparison for two funds tracking the same index, where the expense ratio is the only real difference.
The expense ratio is applied as a reduction to the annual return. Real funds deduct their fee daily from net asset value, but the difference from this once-a-year approximation is negligible.
No taxes, trading commissions, or bid-ask spreads are modeled — only the ongoing expense ratio.
Contributions are added at each year-end, then grow at the net return in the following years.
Money values are rounded to the nearest cent for display.

Common questions

ETF comparison FAQ

Why does a tiny 0.5% fee matter?

Because it is charged every single year, on your whole balance, not just on the profits. As the balance compounds, so does the fee, and the money it skims can never compound for you again. Over a few years the drag is small; over 20 or 30 years it quietly becomes a large share of what you could have kept.

How is an expense ratio different from a commission?

A commission is a one-time cost you pay to buy or sell. An expense ratio is an ongoing annual charge, deducted for as long as you hold the fund. This calculator models that ongoing drag — the cost that keeps compounding against you year after year — not one-time trading costs.

Are cheaper funds always better?

For two funds tracking the same index, essentially yes: the cheaper one wins because the underlying returns are the same and the only difference is the fee. Across different strategies it is not automatic — a pricier fund has to out-earn its fee to come out ahead. To size a single fund’s fee on its own, see the Expense Ratio calculator; our underlying engine also supports a separate return for each fund when you want to weigh a pricier fund that may earn more.

Primary sources

Sources and review notes

U.S. Securities and Exchange Commission, Investor.gov — Mutual Funds and ETFs, on fund fees and expense ratios
Bogle, Common Sense on Mutual Funds — the cost matters hypothesis

Methodology last checked Jul 16, 2026. Formula implementation is covered by deterministic unit tests. No financial professional review is claimed yet.