Enter your initial investment, monthly contribution, time horizon, expected return, and expense ratio to see your final balance next to how much of your growth the fund's fees quietly consumed.
The expense ratio is deducted from your return every single year, so it compounds against you the same way your returns compound for you. A seemingly small 0.5% or 1% annual fee can quietly consume tens of thousands of dollars over a multi-decade holding period, because you lose not just the fee itself each year but all the future growth that fee would have earned had it stayed invested instead.
Broad-market index funds commonly charge between 0.03% and 0.20% per year. Actively managed mutual funds typically run between 0.5% and 1.5%, with some specialty or international funds even higher. There's no single universal "right" number, but paying meaningfully more only makes sense if a fund has a strong, consistent track record of outperforming its benchmark after fees — which most actively managed funds fail to do over long periods.
Index funds simply track a market benchmark and need minimal ongoing management, so their expense ratios are typically very low. Actively managed funds employ analysts and portfolio managers trying to beat the market, and that labor cost gets passed on to investors as a higher expense ratio — which you can model directly here by comparing two runs of this calculator with different expense-ratio inputs. For growth without the expense-ratio drag, see the Investment Calculator or Compound Interest Calculator.
No — this projects pre-tax growth only. Mutual funds held outside a tax-advantaged account can generate taxable capital gains distributions even before you sell any shares, and withdrawals are typically taxed as capital gains or ordinary income depending on the account type. Factor your own tax situation in separately.
Worked example: $10,000 initial investment, $200/month contribution, 20 years, an 8% gross expected return, and a 0.5% expense ratio (net return 7.5%). At the net rate, the balance grows to $155,354.32 against $58,000 total contributed — $97,354.32 in growth. Running the same inputs at the full 8% gross rate (no fee) would have produced $167,072.11, meaning the 0.5% expense ratio cost roughly $11,717.80 in lost growth over 20 years — over 23 times the simple "0.5% of the balance" intuition might suggest.