Free Calculator
Index Fund Fee Drag Calculator
See how much a difference in expense ratio actually costs in dollar terms over a long time horizon. Small percentage differences compound into large gaps.
What this calculator actually does
It runs the same compound-growth projection twice — once at each fund's net return (gross return minus that fund's expense ratio) — and shows the dollar gap between them. It isolates the cost of the fee difference specifically, holding every other assumption identical between the two funds.
Assumptions built into the result
- Both funds are assumed to have the same gross return before fees — in reality, two funds tracking different indexes won't have identical gross performance, so this isolates fee impact specifically rather than predicting which fund will actually perform better.
- The gross return is assumed constant every year, which real markets don't deliver.
- Contributions are assumed to continue on a fixed schedule for the full time horizon.
A worked example
Using the default values ($5,000 starting, $300/month, 7% gross return, 30 years, comparing a 0.03% fund to a 0.75% fund): Fund A projects to roughly $404,000; Fund B projects to roughly $348,600 — a gap of about $55,400, entirely attributable to the 0.72 percentage point fee difference compounding over three decades on an identical gross return.
How this is calculated
Both funds receive the same gross return; each fund's expense ratio is subtracted from the gross return before compounding monthly. The "cost of the fee difference" is simply Fund A's ending value minus Fund B's — assuming otherwise identical performance, which real funds tracking different indexes won't have. This isolates fee impact only. See our methodology.
Limitations
This tool can't predict which fund will actually outperform — it only isolates the mathematical cost of a fee difference, assuming identical gross returns. Real funds, even ones tracking similar indexes, rarely deliver perfectly identical gross performance.
This calculator is for general education only and doesn't constitute personalized investment advice. See our full disclaimer.