Mutual Fund Calculator

Amount invested = initial investment × (1 − front-end load %) then, for each year: balance = (balance − balance × expense ratio %) × (1 + gross return %)

Initial investment

What you hand over — the base the front-end load is charged against, not the amount that ends up in the fund

Front-end load

A one-time sales charge taken at purchase, so a 5 percent load on 10,000 leaves 9,500 of shares — and it happens once, never again

Gross return

What the fund's holdings earn before any fee is taken out — the prospectus usually quotes its total return net of fees, so copying that figure here charges you twice

Expense ratio

The annual charge, taken out of the balance every year and therefore charged on everything the account has accumulated, not just on your contributions

Years

How long you hold, counted in whole years because the fee and the return are both annual

Use it to answer the only question that matters about a fund's costs: not what the fee is, but what it leaves you with. A 0.5 percent expense ratio sounds negligible and costs 1,933.92 over twenty years on a 10,000 investment — and a 1 percent ratio over the same period costs 26,761.31 on 100,000, which is not negligible at all. Compare two funds by running both here rather than by comparing their ratios, because the ratio alone does not tell you the cost in money. Use the front-end load setting deliberately: the default is zero because no-load funds are the mainstream today, but if the fund you are looking at charges one, the effect over a long holding period is much larger than the sales charge itself, and this page shows both. And read the two ending balances together — the one after fees and the one with no fees at all — because their gap is what the fees actually cost you, which is a bigger number than the fees you paid and the one that should inform the decision.

1. 10,000 at 7% gross for 20 years with a 0.5% expense ratio and no load

   1. With no fees at all the account would grow to 10,000 × 1.07²⁰ = 38,696.84
   2. Each year the fund takes 0.5 percent of the opening balance first: 10,000 × 0.5% = 50 in year one
   3. The rest then grows 7 percent, so year one ends at (10,000 − 50) × 1.07 = 10,646.50
   4. Repeating that for twenty years leaves 35,005.57, and the annual fees add up to 1,933.92
   5. The gap between the two ending balances is 38,696.84 − 35,005.57 = 3,691.27 — larger than the 1,933.92 actually paid

   That last line is the part people misread as an error, and it is the most useful number on the page. The 3,691.27 is not what the fund took; it is what you would have had if it had taken nothing. The difference between the two, 1,757.35, is the return that the money paid out in fees would itself have earned over the twenty years — a cost that never appears on a fee table because it is not a fee.

2. The same fund with a 5% front-end load — 33,255.29

   1. The 5 percent load is charged on the amount you hand over: 10,000 × 5% = 500 to the sales charge
   2. That leaves 9,500 buying shares, which is the balance the expense ratio is then charged against
   3. Twenty years of 7 percent gross growth on 9,500 with a 0.5 percent annual fee gives 33,255.29
   4. Total fees: 500 of load + 1,837.22 of annual fees = 2,337.22
   5. Against the no-fee account's 38,696.84, the balance is 5,441.55 lower — 3,104.33 more than the fees actually paid

   The load costs 500 on day one and 1,750.28 by the end of twenty years, because the 500 never had a chance to compound. That ratio — roughly three and a half times the original charge over twenty years — is the reason the load deserves its own input rather than being folded into the return. Note also that the expense ratio is charged on 9,500 rather than 10,000 throughout, so the load quietly reduces the annual fee as well; the two costs are not additive in the simple way they look.

3. A fund that earns nothing: 0% gross return, 0.5% expenses

   1. The holdings return nothing at all, so the only thing moving the balance is the annual fee
   2. Each year takes 0.5 percent of the opening balance and adds no growth: 10,000 × (1 − 0.005)²⁰ = 9,046.10
   3. Fees over the twenty years: 953.90
   4. With no fees the account would still hold exactly 10,000, so the entire 953.90 came out of your principal

   This is the cleanest demonstration that the expense ratio is charged on the balance rather than on the profit. A fund that delivers nothing still charges, and there is no gain for the fee to come out of, so it comes out of what you put in. It also shows why a fee is not symmetrical with a return: a 0.5 percent fee costs more than 0.5 percent, because the fee is taken every year on an amount that is not growing back.

Four things about this model will differ from a real statement, and all four are deliberate rather than oversights. First, the gross return you enter is gross of fees. A fund's published total return is normally already net of the expense ratio, so if you copy that figure into this page you will charge yourself the fee twice and the answer will be too low — subtract the expense ratio from the quoted return, or enter the return the holdings earned before costs. The page's own labels say gross for that reason. Second, the annual fee here is charged on the balance at the start of each year, while the definition most funds disclose against is a percentage of average net assets across the year. In a year when the fund rises, the opening balance is smaller than the average, so this page's fees come out slightly lower than a real statement would show — by roughly half of that year's gain multiplied by the fee rate. The start-of-year base was chosen because it is reproducible from the inputs on the page; average net assets depend on every purchase and redemption the fund saw during the year, which no calculator can ask you for. Third, the no-fee comparison balance assumes no fees at all, including no front-end load, so if you entered a load the comparison account is one you could not actually have bought; setting the baseline to a loaded account would make the load disappear from the comparison, and the load is the cost most people overlook. Fourth, total fees paid is not the gap between the two ending balances, and it is not meant to be: the money taken as fees would have kept growing had it stayed in, so the gap is larger than the fees. Nothing here models taxes on distributions or on a sale, fund-level trading costs, a redemption fee, a 12b-1 fee charged separately, or a performance fee. It assumes the return is the same every year, which no fund delivers — a sequence of good and bad years that averages 7 percent will not produce the same ending balance, and the difference is not small over a long term. It assumes one lump sum at the start and no further contributions, no withdrawals and no rebalancing. Finally, no currency is attached to any figure.

What is an expense ratio?

It is the percentage of a fund's assets charged every year to pay its operating expenses, and it is charged for as long as you hold the fund regardless of whether it makes money. On the default case a 0.5 percent ratio on a 10,000 investment costs 1,933.92 over twenty years, and the same 0.5 percent on 100,000 costs 14,110.82. It is the fee that matters most over a long holding period because it is charged on the whole balance, including everything the account has already earned.

What is a front-end load?

A sales charge taken once, when you buy the fund, assessed on the amount you pay. Put 10,000 into a fund with a 5 percent front-end load and 500 goes to the sales charge while 9,500 buys shares — which is what the net amount invested figure reports. It happens once and never again, but its effect is much larger than the charge itself over a long holding period: that 500 costs 1,750.28 by the end of twenty years, because the money it removed never compounded.

How do I calculate the cost of mutual fund fees?

Apply the two charges in the order they occur, then compare against an account that pays nothing. The load comes off the top: 10,000 less 5 percent is 9,500. Then each year, take the expense ratio out of the opening balance and grow what is left by the gross return: (9,500 × 0.995) × 1.07 in year one. Twenty years of that on the default numbers gives 33,255.29, against 38,696.84 for the account that pays nothing, and 2,337.22 of fees actually paid.

Why is the difference between the two ending balances bigger than the fees I paid?

Because the money taken as fees would have kept growing. When a fund takes 1,933.92 out over twenty years, that is the cash it removed, but the account is worse off by 3,691.27 on the default case, and the 1,757.35 difference is the return those fees would themselves have earned. This is not double counting; it is the reason a fee is more expensive than its own size, and it is why the cost of a fund cannot be read off a fee table. The page reports both numbers so the gap is visible rather than implied.

Should I use the return from the fund's prospectus?

Only if you add the expense ratio back first. A fund's published total return is almost always net of its expense ratio, so entering it as the gross return charges you the fee twice and understates the ending balance. Either enter the return the holdings earned before costs, or take the quoted net return and add the expense ratio to it. The field on this page is labelled gross for exactly this reason, and it is the single most common way to get a wrong answer here.

Why does this calculator charge the fee on the start-of-year balance?

Because that base is reproducible from the inputs, whereas the base funds actually disclose against — average net assets over the year — depends on every purchase and redemption the fund saw, which no calculator can know. In a year when the fund rises, the opening balance is lower than the average, so this page's fees come out slightly lower than a real statement, by roughly half of that year's gain times the fee rate. Treat the fee totals here as a close estimate rather than a copy of your statement.

Does the no-fees ending balance assume I paid the load?

No — it assumes no fees at all, including the front-end load, so it is the account you would have if the fund had charged you nothing from the start. That makes the gap between the two balances a fair measure of what the fees cost you in total. It does mean the comparison figure is slightly flattering when you have entered a load, since it is an account you could not have bought; but setting the baseline to a loaded account would hide the load from the comparison, and the load is the cost most people forget.

• Expense Ratio — Investor.gov glossary: the percentage of a fund's assets used each year to pay operating expenses — U.S. Securities and Exchange Commission, Investor.gov (United States)
• Sales Charge (Load) — Investor.gov glossary: the charge paid to buy shares, which is what the front-end load field here is — U.S. Securities and Exchange Commission, Investor.gov (United States)
• 17 CFR 230.482 — Advertising by an investment company: the rule behind the standardized presentation of fees and expenses in fund advertising — U.S. Securities and Exchange Commission rule, via the Electronic Code of Federal Regulations (United States)