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What that fee is really costing you
A 1.6% annual fee does not cost you 1.6%. Measured against a 0.14% index fund, which is the reference point that matters because it is the alternative you can actually buy, it removes about 28% of your final balance over 30 years. On the figures this calculator opens with, that is more than everything you ever paid in. Not because the number is large, but because you pay it every single year, on the whole balance, including on the growth it already prevented. European funds cost more than American ones, so switch the calculator to the euro area and the same arithmetic bites harder.
This is the one number in investing that is knowable in advance and entirely certain. Everything else is a forecast.
Switches the currency and the typical fee levels — US funds cost markedly less.
The fee costs you
$0
That is 0% of the portfolio you would otherwise have had — removed by a fee difference of 0% a year.
Low-cost ends at
$0
High-cost ends at
$0
Years of growth lost
0
Illustrative arithmetic, not a forecast. Both portfolios earn the identical gross return; the fee is modelled as a reduction to that return, which is how an OCF actually works. Excludes tax, inflation and in-fund transaction costs. Not financial advice.
The small number that isn't
Where does your fee sit?
Fees feel trivial because they are quoted as tiny annual percentages. Here is what those percentages actually are. The distance between the cheapest and the typical is, over a lifetime, an enormous amount of money.
US figures, asset-weighted: what shareholders
actually paid, not the average across every fund on offer (ICI, 2025 data). The 1.6% this
calculator opens with is the ordinary case, not the extreme one: an actively managed equity
fund at 0.64% with a typical 1% advisory fee on top.
European funds cost markedly more: roughly
0.05–0.25% for an index ETF, 1.0–1.5% for an active fund, and 1.8–2.5% all-in with advice.
Switch the calculator to the euro area and it uses those instead. ESMA publishes the annual
comparison.
That gap is not small. One extra percentage point of fee removes roughly a fifth of your final wealth over 30 years on these assumptions. The same compounding that builds your money, running in reverse.
And you pay it whether the fund beats the market or not. Over ten years, the large majority of active funds fail to beat their benchmark (S&P SPIVA), so the higher fee usually buys underperformance. See the evidence →
How to read this
The comparison is deliberately conservative: both portfolios earn the identical gross return. No skill, no outperformance, no bad luck. The only difference is the fee. Everything you see in the gap is arithmetic, not opinion.
Where to find your actual number
- European funds and ETFs: the Ongoing Charges Figure (OCF), in the Key Information Document. A legally required disclosure.
- US funds: the net expense ratio, in the prospectus.
- Add your platform or advisory fee on top. The fee that matters is the one that leaves your account, not the one printed on the fund factsheet.
What this does not model: tax, inflation, transaction costs inside the fund, or the possibility that the expensive fund genuinely earns more. It is a clean arithmetic comparison, not a forecast.
What to do about it
Keep the fee, or keep the money.
Fees are the one cost you control completely. Here is how to find your real number, cut it, and keep what compounding builds.
Questions people actually ask
How much does a 1% fund fee actually cost over 30 years?
Far more than 1%. Because the fee is charged every year against the whole balance, it compounds against you. On a portfolio growing at 7% a year for 30 years, one extra percentage point of fee removes roughly 18% to 26% of the final value — and where you land inside that range depends on how the money got there. A lump sum left alone the whole time loses about 26%, because every euro is exposed for all 30 years. A pure monthly savings plan loses about 18%, because the average euro has been invested for far less than 30 years. On the mix this calculator opens with, it is about 21%. That spread is exactly why it is worth calculating rather than quoting a rule of thumb.
Why is the cost of a fee so much larger than the fee itself?
Because you lose the fee AND every year of growth that the fee would have generated. A euro taken in year one is not a euro of damage — it is a euro that would have compounded for another 29 years. It is the same mechanism that makes compounding powerful in your favour, running in reverse.
Is a cheaper fund always better?
Not automatically — but the burden of proof sits squarely with the expensive one. Fees are the only variable in investing that is known in advance with complete certainty. Returns are not. A more expensive fund must reliably out-earn the cheaper one by more than the fee difference, every single year, just to leave you level. Persistently doing so is rare.
Which fee number should I use?
The total ongoing cost, not the headline management fee. For a European fund this is the Ongoing Charges Figure (OCF) in the Key Information Document; for a US fund, the net expense ratio. Then add any platform or advisory fee on top — a 0.2% ETF held on a 1.0% advisory platform costs you 1.2%. The fee that matters is the one leaving your account, not the one on the factsheet.
Sources — retrieved August 2026
- US fund costs: Trends in the Expenses and Fees of Funds, 2025 — asset-weighted: index equity ETFs 0.14%, index equity mutual funds 0.05%, actively managed equity mutual funds 0.64% — Investment Company Institute (ICI), Research Perspective 32(1), March 2026, 2025 data
- European fund costs: Costs and Performance of EU Retail Investment Products — ESMA — eighth annual market report, published 3 March 2026, 2025 report, 2024 data
- Active funds vs their benchmark: SPIVA Scorecards — S&P Dow Jones Indices, updated semi-annually
- Index fund cost floor: Ongoing charges figures published on provider factsheets and KIDs — iShares, Vanguard, Amundi, Xtrackers and others, 2026
The three cost bands are typical ranges assembled from the sources above, not a single published average — your own figure is in your fund's KID under ongoing charges, plus whatever your platform or adviser adds on top. The 7% gross return is an assumption; the point of this tool is that the fee is certain while the return is not.
What this tool is — and what it is not
- Runs in your browser
- Your numbers are never sent anywhere. There is no account, no sign-up and no server doing the maths. Analytics are cookieless and EU-hosted, and your IP address is not stored. The full privacy detail →
- Nothing to sell
- No course, no recommendation, no affiliate links, no ads. If that ever changes, it will say so here before it says so anywhere else.
- Not financial advice
- This is a model, not a personal recommendation. It does not know your tax position, your job security or how well you sleep. A decision this size belongs in a conversation with someone licensed to advise you.
- Who built it
- Philipp Misura — Nearly two decades in the financial industry — first inside the institutions, then advising them. More about Philipp →