Your inputs

Fund, horizon, and fee

Initial investment

Amount invested today, from $0 through $1 billion.

Annual contribution

Added each year-end; 0 for none.

Years

Whole years you stay invested, from 1 through 100.

Expected annual return

The gross, before-fee return you expect each year.

Expense ratio

The fund’s annual fee — 0.03% for cheap index funds, 0.5–1%+ for active funds.

Your inputs are calculated locally and are not stored.

Total fees over the period$14,481.77

A 0.75% expense ratio quietly skims $14,481.77 over 30 years — 19.0% of what you'd otherwise have. Your $76,122.55 becomes $61,640.79.

Without the fee: $76,122.55
After the fee: $61,640.79
Total fees paid: $14,481.77
Fee drag: 19.02%

Formula & methodology

How the fee drag is calculated

An expense ratio is modeled as a straight reduction to your annual return: your net return is the gross, before-fee return minus the expense ratio. The calculator grows your balance twice — once at the gross return with no fee, and once at the net return — and the total fee is simply the gap between those two ending balances.

The reason a “small” number matters is that the fee is charged on your whole balance every year, not just on your gains. As the balance compounds, so does the fee taken from it. A 0.75% ratio does not cost you 0.75% of your money once — it skims a slice of an ever-larger pot, year after year, so the cumulative total becomes a large share of what you would otherwise have had. Fees compound against you exactly the way returns compound for you.

Net return % = Gross return % − Expense ratio %
Total fees = Zero-fee balance − Net balance

Gross return: Annual return before any fee
Expense ratio: The fund’s annual fee, as a percent
Net return: What you actually earn each year, after the fee
Zero-fee balance: Ending value if the fund charged nothing
Net balance: Ending value after the fee is applied

Worked example

$10,000 for 30 years at 7%, with a 0.75% expense ratio

Suppose you invest $10,000, leave it for 30 years, and expect a 7% gross annual return. With no fee, the balance would grow to $76,122.55. Subtract the 0.75% expense ratio and the money instead compounds at 6.25% net, ending at $61,640.79. The difference — $14,481.77 — is what the fee quietly took. That is a 19.02% fee drag: nearly a fifth of the zero-fee total, lost to a number that looked like a rounding error.

This is an educational calculation based only on the values you provide. It does not look up live fund data, and it is not investment advice.

Assumptions

What this calculator assumes

The expense ratio is modeled as an annual reduction to your return. Real funds deduct their fee daily from net asset value; the difference from an annual model is negligible over long horizons.
No taxes and no trading costs, spreads, or one-time loads are included — only the ongoing expense ratio.
Any annual contribution is added at each year-end, after that year’s growth.
The gross return is treated as constant every year. Real markets vary, but a steady rate isolates the effect of the fee.
Money values are rounded to the nearest cent for display.

Common questions

Expense ratio FAQ

Is 0.75% really that bad?

Over a year or two, barely. Over decades, yes. In the example above a 0.75% ratio consumes $14,481.77 — about 19% of the balance you would otherwise have had, nearly a fifth of your money. The longer your horizon and the larger your balance, the more a fee that reads as trivial turns into a serious number.

What’s the difference between an expense ratio and a load or commission?

An expense ratio is the fund’s ongoing annual fee, charged every year you hold it. A load or commission is a one-time charge when you buy or sell. This calculator models the ongoing part — the expense ratio — because that is the cost that compounds against you year after year.

How low can I go?

Broad-market index ETFs commonly run 0.03% to 0.10%, a fraction of what many active funds charge. To put two specific funds side by side and see the long-run gap, use the ETF Comparison calculator.

Primary sources

Sources and review notes

U.S. Securities and Exchange Commission, Investor.gov — Mutual Funds and ETFs, on fund fees and expenses
John C. Bogle, The Little Book of Common Sense Investing — the tyranny of compounding costs

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