Fund fee calculator

How much does a fund fee cost over 20 years?

More than the fees themselves. With the default inputs, $10,000 grows at an assumed 6% a year for 20 years. With no fees it would reach $32,071. In a fund charging 0.10% a year it ends at $31,436; in a fund charging 0.75% it ends at $27,588. The gap between the two funds is $3,848, more than a third of the money put in.

The 0.75% fund takes $2,616 in fees over the 20 years. The rest of its $4,483 shortfall against no fees, $1,867, is growth forgone: the return that $2,616 would have earned had it stayed in the account. The 0.10% fund takes $375 and forgoes $260. The calculator always shows the two parts apart, because the second one is never taken as a charge, so no fee figure includes it.

Every figure assumes the same return in every year. Real returns vary and can be negative, so read the result as the cost of the fee under one assumption, not as a forecast of either fund.

How is the cost of a fund fee calculated?

An expense ratio is a yearly percentage taken from the fund's assets, so it comes out of the price rather than as a bill. Over a year, money in a fund earning r and charging f grows by (1 + r) x (1 - f). The calculator applies this monthly: each month the balance grows by the twelfth root of (1 + r), then the fee takes 1 - (1 - f)^(1/12) of it, so twelve months give exactly (1 + r)(1 - f). A platform fee p adds a third factor, (1 - p).

For a single sum the end value is P x ((1 + r)(1 - f))^years. On the default inputs that is 10,000 x (1.06 x 0.9925)^20 = $27,588.47 for Fund B. Monthly amounts are added at the end of each month and grow at the same net monthly rate.

Two definitions follow. Fees paid is every amount actually taken: entry fees plus each month's fund and platform charge. Growth forgone is the value with no fees, minus the value with fees, minus the fees paid. They add up to the total cost of the fee. Open Show the working under the result for both funds with your numbers.

Why does the cost of a fee keep growing?

Because the fee is a share of a balance that keeps growing, and every dollar it takes stops compounding. Here are the default inputs, $10,000 at an assumed 6%, held for longer and longer:

Doubling the time from 20 to 40 years multiplies the gap by almost six. The mix changes too: over 20 years Fund B's fees paid ($2,616) are larger than its growth forgone ($1,867), but by 30 years growth forgone is the bigger part, $6,283 against $5,328, and by 40 years it is $16,912 against $9,833.

For a single sum with no entry fee, the share of the no-fee value lost is 1 - (1 - f)^years, whatever the return. At 0.75% for 20 years that is 13.98%; the calculator states it under the result when it applies.

Checking the calculator against the SEC's fee example

The SEC's Office of Investor Education and Assistance published an investor bulletin, How Fees and Expenses Affect Your Investment Portfolio, dated July 23, 2025. It shows $100,000 growing 4% a year for 20 years under three annual fees: approximately $208,000 at 0.25%, $198,000 at 0.50% and $179,000 at 1.00%.

Enter $100,000, 4% and 20 years here and the calculator gives $208,413 at 0.25%, $198,211 at 0.50% and $179,213 at 1.00%, in line with each rounded figure. With no fees at all the same money would reach $219,112. Set Fund A to 0.25% and Fund B to 1.00% and the gap is $29,200: Fund B's fees paid are $27,337 and its growth forgone $12,562.

The same bulletin notes that a fund's annual operating expenses are deducted from the fund's assets, which lowers your return, and that the prospectus of a mutual fund or exchange-traded fund contains a standardized table of fees and expenses. That table is where the figure for the fee fields here comes from.

Entry fee or yearly fee: when does a one-off charge pay off?

An entry fee, called a front-end sales load in the SEC's bulletin, is paid when you invest. A yearly fee is paid every year. A fund with an entry fee and a lower yearly fee starts behind and can catch up, and the calculator finds the year it does.

Example in UAE dirhams: AED 50,000 at an assumed 6%. Fund A takes a 3% entry fee, AED 1,500, then charges 0.50% a year. Fund B has no entry fee and charges 1.00% a year. After 6 years Fund A is still AED 15.52 behind, at AED 66,760 against AED 66,775. After 7 years it is AED 337.54 ahead, and after 20 years it ends at AED 140,709 against AED 131,157.

The break-even point comes from setting (1 - entry fee) x (1 - fA)^n equal to (1 - fB)^n, which here gives n = 6.05 years whatever the return. Hold for less than that and the entry fee costs more than it saves. The entry fee fields sit under Entry and platform fees, and an entry fee is taken from every monthly amount too, not just the first.

Worked example in pounds with a platform fee

A UK saver starts with £5,000 and adds £250 a month for 25 years at an assumed 5%, paying a 0.25% yearly platform fee on top of the fund's own charge. Fund A charges 0.20% and Fund B 0.90%. In all £80,000 is paid in, and with no fees at all it would reach £163,365.

The gap is £15,770. Notice that Fund A pays more in platform fees than Fund B: the platform charge is a percentage of the account, and Fund A's account is larger. It is still the cheaper fund overall, because the platform fee is the same rate on both.

Expense ratio, ongoing charges and platform fees by region

The arithmetic is the same everywhere; the names change. In the United States a fund's yearly running cost is the expense ratio, shown in the prospectus as annual fund operating expenses, and a charge taken when you buy is a front-end sales load. In the UK and Europe the yearly figure for a fund may be quoted as an ongoing charge, and the platform or account that holds your funds may add its own yearly fee, as a percentage or a flat amount.

This calculator takes the fund's yearly fee and any platform fee as percentages. If your platform charges a flat yearly amount instead, divide it by your account value to get a rough percentage for the platform field, and remember that a flat fee weighs more on a small account. Entry fees, sometimes called initial charges, go in the entry fee fields.

The fee does not change with the currency. Choose GBP, EUR, AED or any of 24 currencies for the amounts; the percentages stay as you type them.

How to calculate fund fees in Excel

Excel's FV function does it in one line once the fee is folded into the rate. Its syntax is FV(rate, nper, pmt, [pv], [type]), with money you pay in entered as a negative number. For a single sum, use the net yearly rate:

• =FV((1+6%)*(1-0.75%)-1, 20, 0, -10000) returns 27,588.47, Fund B on the default inputs.
• =FV((1+6%)*(1-0.1%)-1, 20, 0, -10000) returns 31,435.98, Fund A.

For monthly amounts, convert to a net monthly rate first: =((1+r)*(1-f))^(1/12)-1 in a cell, then FV(that cell, years*12, -monthly, -start). The difference between the two FV results is the gap; the no-fee FV minus each result is that fund's total cost. Splitting the cost into fees paid and growth forgone needs a month-by-month column, which is what the table under the calculator gives you.

Common mistakes and what this calculator leaves out

• Subtracting the fee from the return. 6% minus 0.75% is 5.25%, but the fee is taken from the balance after growth, so the net rate is (1.06 x 0.9925) - 1 = 5.205%.
• Counting only the fees paid. Over long periods the growth forgone can be the larger part of the cost.
• Ignoring the platform fee. It applies to every fund you hold through that account.
• Comparing funds over the wrong horizon. An entry fee can make a fund more expensive over 5 years and cheaper over 10.
• Treating the return as known. The same return is assumed in every year and for both funds.

The calculator leaves out a fund's trading costs inside its portfolio, dealing charges each time you buy or sell, exit fees, performance fees, tax and inflation. It does not hold any fund's fees: type them from the fund's own documents. To compare what different returns, rather than fees, do to the same money, see the compound interest calculator.

Glossary

Expense ratio: a fund's yearly operating costs as a percentage of its assets, taken from the fund. Ongoing charge: another name, used in the UK and Europe, for the same yearly figure. Entry fee or front-end load: a one-off percentage taken when you invest. Platform fee: a yearly charge by the account that holds your funds. Fees paid: money actually taken in charges. Growth forgone: the return those charges would have earned had they stayed invested.

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