What does an ETF expense ratio calculator estimate?
This calculator estimates how one user-entered annual expense ratio changes a hypothetical ending balance under a user-entered gross return assumption. It shows a no-fee comparison, a balance after the modeled annual fund expense, the difference between the two ending values, and the sum of the modeled annual dollar charges.
An expense ratio is the percentage of a fund's average net assets used each year to pay operating expenses; Investor.gov says the figure appears in a fund's prospectus fee table. ETF fees and expenses are passed through the fund and deducted from net asset value, so an investor pays them indirectly. The SEC notes that fund fees reduce investment returns. Sources: Investor.gov, Expense Ratio and Investor.gov, Exchange-Traded Funds (ETFs), both accessed 2026-11-03.
The model begins with the same initial amount in both scenarios. Each year it grows the prior balance by the assumed gross return, then subtracts an expense equal to the entered expense ratio multiplied by that year's post-growth balance. In symbols, annual fee-adjusted balance = prior balance × (1 + gross return) × (1 − expense ratio). The no-fee balance compounds the gross return alone. The dollar-fee total is the sum of the modeled annual deductions; it does not include the additional growth those deducted amounts might otherwise have earned.
For a hypothetical illustration, enter 10,000 currency units, a 6% assumed gross annual return, a 0.50% expense ratio, and 20 years. These are example inputs only. The calculator shows how the stated formula changes the result; it does not describe an actual ETF or expected investment result.
Use the expense ratio from the fund's current prospectus and check what it includes. This simplified model omits trading commissions, bid-ask spreads, taxes, cash flows, inflation, tracking difference, changing expenses, and other fund or account costs. It assumes a single initial investment, constant annual rates, and one fee deduction per year after gross growth. Real fund expenses may be accrued differently and actual returns vary. Investor.gov explains that ETF market prices can differ from net asset value and that other trading costs may apply.
Frequently asked questions
Does this predict an ETF's future value?
No. The gross return and expense ratio are entered assumptions, and the calculation holds them constant. Actual returns, fees, and other costs can differ.
Where do I find an ETF expense ratio?
Check the fund's prospectus fee table. Investor.gov describes the expense ratio as the annual percentage of average net assets used for fund operating expenses.
Does the fee total equal the difference in ending balances?
Usually not. The fee total adds the modeled annual deductions. The ending-value gap also reflects growth that the deducted amounts did not earn in later periods.
Does this include commissions or taxes?
No. The model includes only the entered expense ratio. Brokerage costs, bid-ask spreads, taxes, and other charges are excluded.