Mutual Fund Calculator
- Updated
- Formula shown
- Free, no sign-up
Results
After 20 years the fund could be worth $154,465 after costs, against $165,581 with none: costs take $11,116 (6.7%)
- With no costs
- $165,581
- After costs
- $154,465
- Lost to costs
- $11,116
| Year | Paid in | Fees and loads | Value after costs | Value with no costs |
|---|---|---|---|---|
| 1 | $13,000 | $58.79 | $13,735 | $13,795 |
| 2 | $3,000 | $78.12 | $17,711 | $17,856 |
| 3 | $3,000 | $98.70 | $21,944 | $22,201 |
| 4 | $3,000 | $121 | $26,450 | $26,850 |
| 5 | $3,000 | $144 | $31,249 | $31,824 |
| 6 | $3,000 | $169 | $36,357 | $37,147 |
| 7 | $3,000 | $195 | $41,796 | $42,843 |
| 8 | $3,000 | $223 | $47,587 | $48,937 |
| 9 | $3,000 | $253 | $53,752 | $55,457 |
| 10 | $3,000 | $285 | $60,315 | $62,434 |
The return is an assumption, held steady. Not included: back-end or deferred sales charges, account fees, trading costs inside the fund and taxes. 12b-1 fees are already part of the expense ratio.
How to use the mutual fund calculator
- Enter the amount you invest up front and any regular contribution, with how often you add it.
- Enter the number of years and an assumed return before fund costs.
- Enter the fund's expense ratio and any front-end load, both found in the fee table near the start of the prospectus.
- Compare the two ending values; the gap is what costs take, including the growth those costs would have earned.
Mutual fund cost formula
g = (1 + R)1/p − 1
Cost of fees = value with no costs − value after costs
V is the fund value, R the assumed yearly return before costs, p the number of contributions a year, ER the expense ratio, C the contribution and L the front-end load. Funds deduct expenses from their assets a little every day, so the calculator charges ER ÷ p of the balance each period. A front-end load is taken from each purchase before it is invested. The cost of fees counts both the fees themselves and the growth that money would have earned if it had stayed invested.
Worked example
You invest $10,000 and add $250 a month for 20 years, at an assumed 7% a year before costs, in a fund with a 0.5% expense ratio and no load.
- With no costs, the money would grow to $165,581. After the expense ratio it grows to $154,465.
- The fund charges $6,761 in expenses over the 20 years, but the total cost is $11,116 once lost growth is counted. Your net return is 6.47% a year.
- In a fund with a 5.75% front-end load and a 1% expense ratio, the ending value falls to $135,925: $4,025 of loads, $12,172 of expenses and a total cost of $29,656.
Cost of expense ratios on $100,000
A single $100,000 investment at an assumed 7% a year before costs, no contributions. Without costs it would reach $761,226 in 30 years.
| Expense ratio | Cost over 10 years | Cost over 20 years | Cost over 30 years |
|---|---|---|---|
| 0.05% | $981 | $3,850 | $11,333 |
| 0.25% | $4,857 | $18,875 | $55,009 |
| 0.5% | $9,596 | $36,832 | $106,053 |
| 1% | $18,727 | $70,172 | $197,366 |
| 1.5% | $27,417 | $100,349 | $275,983 |
Costs grow faster than linearly with time: the money lost each year would have compounded for every year after.
Reading fund costs
- Share classes differ. The same fund can have class A shares with a front-end load and lower expenses, and class C shares with no front load but higher expenses and a deferred charge. Compare them with your own holding period.
- Breakpoints. Front-end loads usually fall at larger purchase amounts. Ask what breakpoints apply to you.
- Expense ratios are not the only cost. Trading inside the fund, account fees and taxes on distributions also reduce your return.
- Returns are not guaranteed. Costs are certain; returns are not. That is why a lower-cost fund is a reliable way to keep more. See the effect on a long plan in the investment calculator or the retirement calculator, and on a workplace plan in the 401(k) calculator.
Frequently asked questions
How much does a 1% expense ratio cost?
More than it sounds, because the fees compound. On a single $100,000 investment earning an assumed 7% a year before costs, a 1% expense ratio costs about $18,727 over 10 years and $197,366 over 30 years, counting the growth the fees would have earned.
How is the expense ratio charged?
It is not billed to you. The fund deducts it from its assets a little each day, so it shows up as a lower return. A 7% return before costs with a 0.5% expense ratio gives you about 6.47% a year.
What is a front-end load?
A sales charge taken from each purchase before it is invested. With a 5.75% load, a $10,000 purchase buys only $9,425 of fund shares. Loads often fall at larger purchase amounts, called breakpoints.
What do fees cost on a regular investment plan?
With $10,000 to start and $250 a month for 20 years at an assumed 7% before costs, a 0.5% expense ratio leaves about $154,465 instead of $165,581, a cost of about $11,116. The fund charges about $6,761 of that directly; the rest is lost growth.
Does this include taxes and other fees?
No. It covers the expense ratio, which already includes any 12b-1 fees, and a front-end load. Back-end (deferred) sales charges, account fees, trading costs inside the fund and taxes on distributions are not included.