Ethical Screening Cost Calculator NZ 2026/27
Whether screened investing costs you money is an argument people conduct with conviction and very little arithmetic. Two things are being conflated, and they behave completely differently. The fee difference is real, predictable and almost always in one direction, because defining exclusion criteria, researching every holding against them and keeping the list current is work that has to be paid for out of the fund's charge. The return difference is genuinely uncertain, has run both ways over different periods, and depends entirely on how the excluded sectors happen to perform. Anyone confident that screening costs return, or that it adds return, is arguing rather than measuring. So this page separates them. The fee difference is a number you can read off two documents. The return difference is an input you choose, and the sensitivity table shows what happens across a range including outcomes where the screened fund wins. It also reports the figure most likely to change someone's mind, which is the break-even: the gross outperformance a screened fund needs simply to cover its higher fee. That hurdle is usually smaller than people expect, which cuts against the assumption that screening must be expensive. What this page will not do is tell you which fund to hold. The purpose is to convert a values decision into a priced one, so it can be made deliberately. Plenty of people will read the number and keep the screened fund, and that is a perfectly coherent answer once the cost is known.
Screened net return = (gross return + return difference) − screened fee. A negative return difference means the screened fund lags before fees.
Annual gap = unscreened net − screened net. Positive means screening costs you; negative means it is paying.
Break-even return difference = screened fee − unscreened fee. This is the gross outperformance the screened fund needs purely to cover the fee gap, and it does not depend on the gross return.
Long-run cost compounds each fund at its own net return and takes the difference. It is also shown as a percentage of the balance the unscreened fund would have reached.
Return difference is a user input. No figure is asserted, and the sensitivity table spans outcomes in both directions.
Screening and broader responsible investing are not the same thing. Screening excludes on stated criteria; other approaches tilt towards better-rated companies or engage rather than exclude. Two similarly described funds can hold very different things.
Excluded: the change in risk and sector mix that screening creates, which is usually more concentrated than the unscreened equivalent; tax differences; and any difference in tracking quality between the two funds.
All figures are user-entered. No fund is named, ranked or recommended, and the defaults are illustrative rather than a real product.
Not financial advice. Last verified: .
Where the gap comes from
| Gross return on the unscreened index | 7.00% |
| Less the unscreened fund fee | -0.25% |
| Unscreened net return | 6.75% |
| Screened fund's return difference | -0.20% |
| Less the screened fund fee | -0.40% |
| Screened net return | 6.40% |
| Annual gap | 0.35% |
| Of which is the fee difference | 0.15% |
| Of which is the return difference | 0.20% |
The fee difference is the reliable part. The return difference is an assumption, and the tables below test it in both directions.
What it costs over time
| After | Unscreened | Screened | Cost of screening | As a share |
|---|---|---|---|---|
| 5 years | $69,312.16 | $68,183.32 | $1,128.84 | 1.63% |
| 10 years | $96,083.51 | $92,979.30 | $3,104.20 | 3.23% |
| 15 years | $133,195.10 | $126,792.75 | $6,402.35 | 4.81% |
| 25 years | $255,957.05 | $235,782.03 | $20,175.02 | 7.88% |
| 30 years | $354,818.71 | $321,528.03 | $33,290.68 | 9.38% |
The cost compounds, so it grows faster than the horizon does. Doubling fifteen years to thirty more than quintuples the figure.
If the return difference were different
| Return difference | Screened net | Annual gap | After 25 years | Cost of screening |
|---|---|---|---|---|
| -0.50% | 6.10% | 0.65% | $219,712.42 | $36,244.63 |
| -0.20% | 6.40% | 0.35% | $235,782.03 | $20,175.02 |
| 0.00% | 6.60% | 0.15% | $247,115.58 | $8,841.47 |
| 0.15% | 6.75% | 0.00% | $255,957.05 | $0.00 |
| 0.50% | 7.10% | -0.35% | $277,783.71 | -$21,826.66 |
The break-even row is the one to note. A screened fund needs only 0.15% of gross outperformance to leave you no worse off, which is a smaller hurdle than the debate usually implies.
Two Different Things Get Argued As One
The fee difference and the return difference are treated as a single question and behave nothing alike.
The fee difference is reliable. Screening costs money to run. Someone defines the criteria, researches every holding against them, applies the exclusions and keeps the list current, and that work comes out of the fee. It is almost always in the same direction and you can read it off two documents.
The return difference is not. Excluding sectors makes a fund different from the market, and different leads in some periods and lags in others. It depends on how the excluded sectors happen to do, which nobody knows in advance.
Worked Example: $50,000 Over Twenty-Five Years
The unscreened fund charges 0.25% and the screened one charges 0.40%, a fee difference of 0.15%.
Testing a 0.20% annual return shortfall on the screened side gives net returns of 6.75% and 6.40%, an annual gap of 0.35%.
That is $175.00 in the first year, or $3.50 for every $1,000 invested. Over twenty-five years it compounds to $20,175.02, which is 7.88% of the balance the unscreened fund would have reached.
The Break-Even Is Lower Than The Argument Suggests
The screened fund does not have to match the index. It only has to beat it by enough to cover the fee gap, which on the worked example is 0.15% a year.
That is a low hurdle. If the excluded sectors have a poor decade, the screened fund clears it comfortably. If they have a strong one, it does not.
Neither outcome is predictable, and the useful conclusion is that the outcome is genuinely uncertain rather than settled in either direction. The fee gap, by contrast, is certain, which is why it deserves more attention than it usually gets in this conversation.
Time Does Most Of The Damage
A 0.35% annual gap is easy to dismiss. Compounded, it is not.
At five years the cost is $1,128.84. At fifteen it is $6,402.35. At thirty it is $33,290.68, which is 9.38% of the balance.
Doubling the horizon from fifteen years to thirty more than quintuples the cost, because the gap applies to a larger balance every year. Our fund fee drag calculator shows the same effect on the fee component alone.
What This Does Not Price
Two things sit outside the calculation and both matter.
Screening changes the risk, not only the cost. Excluding sectors makes the remaining holdings a larger share of the fund, so a screened fund is usually more concentrated than its unscreened equivalent and carries a different sector mix. Our sector exposure calculator and index concentration calculator both apply to a screened fund and are worth running on it.
Screening is not one thing. Excluding tobacco and weapons is a different proposition from excluding fossil fuel extraction, which is different again from tilting towards better-rated companies without excluding anything, or engaging with companies rather than selling them. Two funds described in similar language can hold very different things, so read what each one actually excludes before comparing their costs.
The Point Is To Make It A Decision
This page has no view on whether you should hold a screened fund. It exists because the question is usually argued in the abstract, and a number ends the abstraction.
Some people will read $20,175.02 over twenty-five years and change nothing, having decided the exclusions are worth it. That is a coherent position and a well-informed one.
Others will look at the same figure, check what the fund actually excludes, and conclude the screening is not doing enough to justify the cost. That is also coherent.
The only poor outcome is holding either fund without knowing what the choice involves, and that is the outcome this page is meant to prevent.
Related NZ Fund Cost Calculators
- Fund Fee Drag Calculator: the fee component over a long horizon.
- Tracking Difference Calculator: what each fund really costs against its index.
- Sector Exposure Calculator: how screening changes your sector mix.
- Index Concentration Calculator: whether a screened fund is more concentrated.
- One Fund vs Multi-Fund Calculator: blended cost across several funds.