How to Use the ETF Expense Ratio Cost Calculator
An ETF or fund's expense ratio (TER, Total Expense Ratio) is deducted from your assets automatically every year. It looks small at first, but compounded over decades it can meaningfully shrink your final balance. This calculator takes your investment amount, TER, holding period, and expected annual return to show the difference between your balance with and without fees.
The math compares an asset growing at the pre-fee return against the same asset growing at the return minus the TER, both compounded annually — capturing not just the direct fee but the compounding growth you lose along the way, which a simple "TER × amount × years" estimate would miss.
Funds tracking the same index can carry expense ratios anywhere from 0.03% to well over 0.5% depending on the provider. The longer your time horizon, the more a small TER difference compounds into a large gap in ending wealth — so among funds with similar expected returns, the lower-cost option is usually the better long-term choice. Just remember that brokerage commissions and bid-ask spreads sit on top of the TER shown here.
Frequently Asked Questions
Yes — over a 20-30 year holding period, compounding turns even a 0.1 percentage point difference in expense ratio into a gap of many thousands of dollars in your final balance.
Yes, brokerage commissions, bid-ask spreads, and (for international funds) currency conversion costs can add up separately. This calculator only reflects the expense ratio (TER), so your real total cost may be higher.