0.5% sounds small. Do the maths.
A fund's ongoing charge applies every single year — and every euro of fee never compounds again. See what that adds up to over your horizon.
The TER covers the fund's ongoing charges. Order fees, spreads and trading costs inside the fund are not included.
Ongoing charges cost you €35,717.00 over 30 years.
The cheaper fund would have left you €20,971.00 more.
Final capital
€353,180.00
Total cost
€35,717.00
Difference to comparison
€20,971.00
| Without fund costs | €388,897.00 |
|---|---|
| With your TER (0.5%) | €353,180.00 |
| With comparison TER (0.2%) | €374,151.00 |
| Total cost | €35,717.00 |
| Contributions | €113,000.00 |
Why the effect is so large
Costs work like a return with the sign flipped
Which is why capital times fee is not good enough as a rule of thumb.
Every euro of fee is missing twice
The fee is not just gone — it is then missing from compounding every year after. Over 30 years a 0.5% TER costs noticeably more than 15% of the final capital, even though 30 × 0.5% suggests exactly that.
The TER is not everything
Trading costs inside the fund, spreads when you buy and your broker's order fees are not part of the TER. Tracking difference shows what a fund actually cost.
Cheap is not automatically better
Two ETFs on the same index still differ in size, replication method and securities lending. The TER is the best first filter, but not the only criterion.
Frequently asked
Understanding ETF costs
The total expense ratio: a fund's annual ongoing charges as a percentage of fund assets. It is deducted daily from the fund's assets, so you never see it as a transaction — only as slightly weaker performance.
Broad standard indices such as MSCI World or S&P 500 are available for 0.07% to 0.20%. Thematic or emerging-market ETFs cost more. Actively managed funds often charge 1.5% and up — which is where this calculator gets dramatic.
No, it is taken from fund assets internally. That is exactly why it goes unnoticed — it never appears on your account statement.
Do the maths first: selling makes accrued gains taxable immediately, and that tax never compounds again. Switching often pays off for small portfolios with a large cost gap, and usually not for large portfolios with big unrealised gains. Directing new contributions into the cheaper ETF is almost always the better move.
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