Fund and ETF Fees Calculator

Compare two funds or ETFs with different annual fees (TER) and see how much money you lose to fees over the long term.

When should you use this calculator?

This calculator compares two funds, ETFs or pension plans with different annual fees (TER, Total Expense Ratio) to show the compounded long-term cost - something that's barely noticeable in the short term but can add up to tens of thousands over several decades.

How it is calculated

The calculation subtracts each fund's TER from the expected gross return to get a different net monthly return for each, then projects the capital with the same compound interest formula: final value = initial capital — (1 + r)^n + monthly contribution — [(1 + r)^n ∑’ 1] · r, applied separately with each fund's r. The fee cost for each fund is the difference between the final value you'd get with no fees at all (at the gross return) and the actual final value after the TER is deducted.

Practical example

A numeric example: starting with €10,000 and contributing €200/month over 30 years, at an expected 7% annual gross return, an index fund with a 0.2% TER would end up with €311,045.18, having paid €14,114 in accumulated fees. An actively managed fund with a 1.5% TER on the same gross return would end up with only €234,596.26, paying €90,562.92 in fees. That 1.3-percentage-point TER difference amounts to €76,448.92 less final capital, on a total of €82,000 contributed in both cases.

Legal and tax context

The TER (Total Expense Ratio) covers the management fee, custody fee and other ongoing fund expenses, expressed as an annual percentage of assets under management. It's automatically deducted from the fund's net asset value, so the investor doesn't pay it as a separate bill, but notices it as a net return slightly lower than the gross return of the underlying index or assets. It doesn't include subscription or redemption fees, the buy/sell spread in the case of ETFs, or the tax impact, which varies by country of residence.

The result of this calculator is a mathematical estimate based on a constant gross return, which in reality varies year to year, and the results shown are gross, before taxes: taxation on fund and ETF gains varies by the investor's country of residence. This is not investment advice or a recommendation of any specific product.

Common mistakes

A common mistake is subtracting the TER from the expected return and assuming the final difference will be proportional to that annual percentage: as the example above shows, a 1.3-percentage-point TER difference over 30 years doesn't subtract 39% of the final capital (1.3% — 30), but compounds year after year just like compound interest, with a much larger effect the longer the horizon. Another frequent mistake is assuming the TER is the only cost of investing in a fund: there can also be subscription or redemption fees, the buy/sell spread on ETFs, and transaction costs charged by your broker.

Practical tips

As a general rule, index funds have a lower TER than actively managed funds, because they replicate an index without needing an analyst team to select assets, which reduces their operating costs; even so, it's worth comparing the specific TER of each product, since it varies between fund managers. As a reference for the gross return to enter, global stock market indices have historically returned between 6% and 8% a year on average over the long run, although past performance doesn't guarantee future results.

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Frequently asked questions

What is a fund's TER?

The TER (Total Expense Ratio) is the annual percentage a fund or ETF charges on assets under management to cover administration, custody and other ongoing costs. It's automatically deducted from the fund's net asset value, so investors don't pay it separately.

Why does such a small fee difference matter so much?

Because it compounds every year on an ever-larger balance, just like interest does. A 1% annual difference can add up to tens of thousands of euros over 25-30 years.

Do index funds always charge lower fees than actively managed funds?

Generally yes, since they track an index without needing a research team, which lowers operating costs. Still, it's worth comparing each product's actual TER, as it varies between providers.

Is the TER the only cost of investing in a fund?

No. There can also be subscription or redemption fees, the bid-ask spread for ETFs, and your broker's transaction costs. The TER only reflects the fund's annual ongoing expense.

Does this calculator account for taxes?

No. The results are gross, before tax. How fund and ETF gains are taxed depends on the investor's country of residence.

What annual return is reasonable to assume long term?

It depends on the asset class: global stock indices have historically averaged around 6-8% a year over the long run, though past performance doesn't guarantee future results.

Why doesn't a 1.3% TER difference simply subtract 39% over 30 years?

Because the cost of fees compounds every year on an ever-growing capital, just like compound interest: it's not a linear subtraction (1.3% — 30 years), but a cumulative effect that grows more than proportionally the longer the time horizon.

What other costs exist besides the TER?

There can be subscription or redemption fees when entering or leaving the fund, the buy/sell spread in the case of ETFs (the gap between the market buy and sell price), and transaction fees charged by your broker or platform.

How do I choose a realistic gross return for the comparison?

It depends on the type of underlying asset: global stock market indices have historically returned between 6% and 8% a year on average over the long run, while more conservative portfolios (bonds, mixed) usually return less. Past performance doesn't guarantee future results.

Does a lower TER always guarantee a better final result?

For the same underlying gross return, yes: a lower TER leaves more net return for the investor. But two funds with different TERs may invest in different assets with different gross returns too, so it's worth comparing products that follow a similar strategy or index.