ETF cost calculator
A charge of 0.2 percent a year reads like nothing. Over 25 years on a real portfolio it is a number with four digits, because every euro taken out also stops compounding.
ETF cost
- Charges over the whole run
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- Final value after charges
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- Final value without charges
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How to use it
Enter your capital, your monthly rate, the horizon, the return you expect and the fund’s ongoing charge. The charge is taken daily from fund assets, so the honest way to model it is a return reduced by that much, not a yearly fee subtracted at the end.
An example
Jonas holds 10,000 euro, adds 250 a month for 25 years and expects 6 percent. At 0.20 percent the charge costs him about 7,400 euro. At 0.50 percent it is roughly 18,000. The two funds track the same index, and the difference is a small car.
What the result leaves out
The ongoing charge is not the whole bill. Tracking difference, spreads when you buy and your broker’s own fees sit on top, and for small monthly rates the broker often costs more than the fund.
Questions people ask
Broad index ETFs sit between 0.05 and 0.25 percent. Anything above 0.5 percent needs a reason, and actively managed funds at 1.5 percent need a very good one.
Not quite. Tracking difference tells you what the fund actually returned against its index, and a slightly dearer fund that tracks well can beat a cheap one that does not.
No, and that is why it goes unnoticed. It never appears on a statement because it is taken from the fund price before you ever see it.