Portfolio Expense Ratio Calculator
The asset-weighted expense ratio of all your funds together, what it costs in a year, and how that compares with holding everything at one other ratio.
Result
Weighted expense ratio: 0.093%
At today’s balances. Expense ratios are charged on the fund’s average assets over the year, so the money figure moves as your balances do.
- Cost this year at today’s balances
- $93.00
- Total invested
- $100,000.00
https://calcgallery.com/investment-returns/portfolio-expense-ratio-calculator/
Results are arithmetic on the returns, rates and horizons you enter, not a forecast and not investment, tax or retirement advice. The site supplies no expected return, inflation rate, contribution limit, tax rate or withdrawal rate. Real returns vary from year to year, and fees, taxes and the order of returns all change the outcome. Check anything that matters with a qualified adviser. Read the full disclaimer
How to use the Portfolio Expense Ratio Calculator
- Add one row for each fund you hold, with its current balance and its expense ratio as a percentage.
- Read the weighted expense ratio and what it comes to in money this year.
- To compare, enter one other expense ratio, such as a single index fund's, for the whole portfolio.
- For a longer view, add a yearly return and a number of years to project both balances.
The formula
yearly cost = Σ (fund balance × fund expense ratio)weighted expense ratio = yearly cost ÷ Σ fund balancesother ratio, yearly cost = Σ fund balances × other ratioEnter each ratio as the percentage printed in the prospectus: 0.03 for an index fund at 0.03%, 0.6 for an active fund at 0.60%.
Small funds, large shares of the cost
The weighted ratio hides which fund is doing the charging. In the worked example the active fund holds a tenth of the money yet produces most of the yearly cost. The drawing splits the cost the same way, so a fund that looks minor by balance but major by cost is easy to spot. A single number for the whole portfolio is still the right one to compare with any alternative, because the alternative applies to all of it.
Comparing with one other ratio
The comparison puts the whole portfolio at one ratio, say a total market fund at 0.04%, and shows the yearly difference in money. With a return and a number of years it also projects both balances, using the same once-a-year fee model as the investment fee calculator, so the two pages agree. The projection holds the return steady and the same before costs for both, which real funds will not do; it isolates the effect of the cost alone.
Moving money in a taxable account can trigger capital gains tax. The fund switch break-even calculator works out how many years a lower ratio takes to recover that tax.
What the diagram shows
One bar split by each fund’s share of the money charged this year, with the percentage of the total cost printed in each slice.
With your numbers
- Yearly cost = $60,000.00 × 0.03% + $30,000.00 × 0.05% + $10,000.00 × 0.6% = $93.00
- Weighted expense ratio = $93.00 ÷ $100,000.00 = 0.093%
Quick reference
At today’s balances. Expense ratios are charged on the fund’s average assets over the year, so the money figure moves as your balances do.
| Example | Weighted expense ratio |
|---|---|
| Three funds against a 0.04% index | 0.093% |
| Same, projected 20 years at 6% | 0.093% |
| Two active funds | 0.9562% |
| Three-fund portfolio | 0.0455% |
| Target-date fund against its parts | 0.08% |
| 401(k) menu, four funds | 0.2771% |
Common questions about the Portfolio Expense Ratio Calculator
- Why weight by balance instead of averaging the ratios?
- Because each fund charges its ratio on the money in that fund. A 0.60% fund holding a tenth of the portfolio costs far less in total than a 0.60% fund holding all of it. The simple average of 0.03%, 0.05% and 0.60% is 0.227%; weighted by 60,000, 30,000 and 10,000 it is 0.093%.
- Where do I find a fund's expense ratio?
- In the fee table near the front of its prospectus, as total annual fund operating expenses, and on the fund's fact sheet. For a 401(k), the plan's annual fee disclosure lists every fund on the menu. Use the net figure if the fund shows a fee waiver.
- Is the money figure exactly what I will pay?
- No. A fund takes its expenses from its assets a little at a time over the year, based on average net assets, so the amount depends on how your balance moves. Nothing is billed to you; the cost shows up as a slightly lower fund return. Today's balance gives a fair estimate for the coming year.
- What does the expense ratio leave out?
- Sales loads, redemption fees, advisory fees charged on the account, and the trading costs a fund pays when it buys and sells, which the US Securities and Exchange Commission notes are not in the expense ratio. A page total that looks low can sit on top of any of these.