Fund comparison calculator

Why a fraction of a percent matters

An expense ratio is charged every year, on the whole balance — not just on what you contributed that year. So it compounds against you in exactly the way returns compound for you. Early on the amount looks trivial. By the time the balance is large, the same percentage is taking a much larger sum out of a much larger number, every year.

That is why a difference that reads as a rounding error on a factsheet can decide a five-figure gap over a working lifetime. Move the expense ratio sliders above and watch how little has to change.

Return and cost are not the same kind of number

One of these two inputs is a guess and the other is a fact. Nobody knows what return any fund will deliver over the next thirty years — the number you enter is an assumption. The expense ratio, by contrast, is published, contractual, and known in advance.

This asymmetry is the practical argument for paying attention to costs: it is the part of the outcome you can actually control. Chasing a higher assumed return means betting on something unknowable. Paying less means keeping something certain.

What this leaves out

A steady annual return, which real markets never produce. Taxes, which depend on the account the fund sits in. Inflation, which reduces what any future balance buys. And trading costs or bid-ask spreads, which sit outside the expense ratio.

Treat the output as the shape of a comparison, not a projection of your account. Any real fund’s expense ratio is in its own prospectus, which is the authoritative source — not a figure quoted in an article.