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 |
What does this mean for your real wealth?
The calculation above holds for one ETF. Which ongoing ETF costs your whole portfolio carries, Planafolio Pro's ETF fee analysis shows – for the ETFs in your imported portfolio.
Check the costs of the ETFs in my portfolioWhat does the result mean?
The result shows how much final capital the ongoing fund costs take over the period – compared with a cost-free fund and a comparison fund.
Model assumptions
- The total expense ratio (TER) is deducted from the gross return. Order fees and spreads are not included.
- The return stays constant for the whole period. Real markets fluctuate; losing years are not part of the model.
- The model runs month by month: capital grows at the equivalent monthly rate, and the contribution is added at the end of each month.
- Taxes on returns (German flat tax, advance lump sum) are not deducted.
- All amounts are nominal. Purchasing power falls with inflation, which the result does not reflect.
How the calculator works
Three simulations with the same contribution: without costs, with your TER and with the comparison TER. The TER is deducted from the gross return; the difference in final values is the cost.
More on the methodologyWorked example
Example: two ETFs with different TERs
Same savings plan, same gross return; only the ongoing costs of the two funds differ. These are the calculator's default values above.
Inputs
- Starting capital€5,000
- Monthly contribution€300
- Annual gross return before costs (assumption)7%
- Duration30 years
- TER of your fund0.5%
- TER of the comparison fund0.2%
Calculation
| Final balance without fund costs | €388,897 |
|---|---|
| Final balance at a TER of 0.5% | €353,180 |
| Final balance at a TER of 0.2% | €374,151 |
Result
| Cost of your fund's TER over the period | €35,717 |
|---|---|
| Lead of the cheaper fund | €20,971 |
The TER costs 9.18% of the possible final balance. That is more than the small percentage suggests, because every euro paid in costs stops earning returns as well.
The 7% annual gross return is an assumption, the same default as in the calculator above, not a forecast. Order fees, spreads and taxes are not included.
Common mistakes
Deducting the TER again from a net return
The input is the gross return before costs. If you take an ETF's performance from a chart, ongoing costs are already included, and you would deduct the TER twice.
Treating the TER as the whole cost
Order fees and spreads are not included. The actual burden can be higher than the TER alone.
Deciding on TER alone
A cheap fund with poor tracking can end up costing more than a slightly pricier one. Also look at the index, fund size and deviation from the index.
Sources and status
Content reviewed on September 29, 2026. The sources are official German legal texts and data and are therefore in German.
- § 101 KAGB – Gesamtkostenquote im Jahresbericht eines Fonds
- § 20 EStG – Einkünfte aus Kapitalvermögen (im Rechner nicht versteuert)
The calculation is a simplified model under the stated assumptions and is not investment or tax advice.
What can I do?
Your funds' total expense ratio is in the factsheet or annual report. With Planafolio you see which funds make up which share of your portfolio.
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, and it is charged on the grown capital. Example: a 10,000 EUR lump sum, 7% gross return, 30 years — a 0.5% TER costs about 10,000 EUR of final capital (just over 13% of the cost-free final capital), almost seven times the 1,500 EUR that 10,000 EUR × 0.5% × 30 suggests.
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 are very cheap today: S&P 500 ETFs from about 0.03%, MSCI World ETFs from about 0.05%, with many popular funds between 0.10% and 0.20% (source: justETF, September 2026). 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.
It depends on the offsetting maths: selling makes accrued gains taxable immediately, and that tax never compounds again. Switching tends to pay off for small portfolios with a large cost gap, and tends not to for large portfolios with big unrealised gains. An option with no tax effect: direct only new contributions into the cheaper ETF.
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