Managed Fund Fee Drag Calculator NZ 2026/27
A fund fee is disclosed as a percentage and experienced as a subtraction, which makes it feel like a small annual toll. It is not. Every dollar taken in fees is a dollar that stops compounding, so the cost of a fee is the fee itself plus every year of growth that money would have earned for the rest of your investing life. On realistic numbers that second component is the larger of the two, and it appears on no statement, in no fund update and in no disclosure document anywhere. This page separates them. It projects your balance three ways: on the fee you are actually paying, on a cheaper fee you could realistically switch to, and on no fee at all, then reports the fees charged and the growth forgone as distinct figures rather than one blended total. The comparison against zero is there to show the true scale of the drag; the comparison against a real alternative is the one you can act on, because no fund is free and the only decision available to you is which fee to pay rather than whether to pay one. It also runs the horizon out to forty years, because the cost grows faster than the time does and the figure that looks tolerable at ten years rarely does at thirty. Enter a gross return, meaning the return before fees, since published fund returns are usually shown after fees and using one of those would deduct the charge twice.
Fees charged accumulates every monthly deduction, so it is the actual sum taken from you across the period.
Growth forgone = total cost − fees charged. It is the compound return the deducted money would have earned had it stayed invested, and it is the figure no disclosure shows.
Total cost = the fee-free balance − your balance. This captures both components without double counting either.
Cost as a share = total cost / the fee-free balance, which is the proportion of your potential final balance the fee consumed.
The alternative fund is compared on the same gross return and the same contributions, so the only variable is the fee. Two funds holding different assets would not be comparable this way.
Gross return required. A return that already has fees removed will be charged the fee a second time here.
Excluded: tax, which for a PIE is charged at your prescribed investor rate and for foreign shares under the fair dividend rate; any transaction or switching cost; and inflation, so all figures are in future dollars rather than today's.
Returns are not guaranteed and a steady annual return is an assumption no fund delivers. The purpose is to size the fee effect, not to project a balance.
Not financial advice. Last verified: .
The same investment on three different fees
| Fee | Final balance | Fees charged | Growth forgone | Total cost | Of your potential |
|---|---|---|---|---|---|
| Your fund, 1.20% | $450,431.90 | $73,565.47 | $78,485.90 | $152,051.38 | 25.24% |
| The alternative, 0.35% | $552,964.56 | $24,596.78 | $24,921.93 | $49,518.72 | 8.22% |
| No fee at all | $602,483.27 | $0.00 | $0.00 | $0.00 | 0.00% |
| What switching would gain you | $102,532.66 | 18.54% |
The no-fee row is not an option you can buy. It is there to show the scale of the drag; the row above it is the decision you can actually make.
How the cost grows with the horizon
| After | Your fund | The alternative | Switching gains | Your total cost | Of your potential |
|---|---|---|---|---|---|
| 10 years | $126,753.00 | $136,077.00 | $9,324.00 | $13,380.64 | 9.55% |
| 20 years | $250,598.83 | $287,297.98 | $36,699.15 | $53,523.67 | 17.60% |
| 30 years | $450,431.90 | $552,964.56 | $102,532.66 | $152,051.38 | 25.24% |
| 40 years | $772,875.20 | $1,019,690.36 | $246,815.15 | $372,444.70 | 32.52% |
From ten years to forty, the time multiplies by four and the cost of switching multiplies by more than twenty-six. That asymmetry is the whole argument for acting early.
What each fee level would cost you
| Annual fee | Final balance | Fees charged | Total cost | Of your potential | vs your fee |
|---|---|---|---|---|---|
| 0.25% | $566,639.22 | $17,859.64 | $35,844.05 | 5.95% | $116,207.32 |
| 0.35% | $552,964.56 | $24,596.78 | $49,518.72 | 8.22% | $102,532.66 |
| 0.50% | $533,130.52 | $34,288.87 | $69,352.75 | 11.51% | $82,698.62 |
| 0.75% | $501,799.85 | $49,395.12 | $100,683.42 | 16.71% | $51,367.95 |
| 1.00% | $472,500.65 | $63,277.91 | $129,982.62 | 21.57% | $22,068.76 |
| 1.20% | $450,431.90 | $73,565.47 | $152,051.38 | 25.24% | $0.00 |
| 1.50% | $419,459.93 | $87,735.30 | $183,023.35 | 30.38% | -$30,971.97 |
A quarter of one percent, between 0.25% and 0.50%, is worth $33,508.70 across thirty years on this investment.
The Fee Is Less Than Half The Cost
This is the figure worth taking away. On the worked example the fund charges $73,565.47 over thirty years, and the fee costs you $152,051.38.
The difference, $78,485.90, was never charged to you. It is the return the deducted money would have earned had it stayed in the account, and it is slightly larger than the fees themselves.
No statement shows it. No fund update shows it. A fee disclosure is honest about the first number and silent about the second, which is why fees feel smaller than they are.
Worked Example: $50,000 Plus $300 A Month For 30 Years
At a 6.00% gross return, contributing $158,000.00 in total over the period.
On a 1.20% fee: ends at $450,431.90.
On a 0.35% fee: ends at $552,964.56.
On no fee at all: ends at $602,483.27.
The 1.20% fee consumed 25.24% of what the investment could have produced. Switching to the cheaper fund would recover $102,532.66 of that, which is 18.54% more money for the same contributions and the same return.
Compare Against A Real Fund, Not Against Zero
The no-fee column is instructive and it is not a choice. No fund is free, and the only decision in front of you is which fee to pay.
That is why the alternative fee is a separate input. The gap between two funds you could genuinely switch between is the actionable number, and on the worked example it is $102,532.66.
Two funds are only comparable if they hold similar things, though. A cheap fund holding the wrong assets for your horizon is a worse outcome than an expensive one holding the right assets, so settle what the fund should hold first and compare fees within that category. Our fund overlap calculator checks whether two funds actually do the same job.
Time Does The Damage
The cost does not scale with the horizon, it accelerates.
At ten years, switching is worth $9,324.00. At twenty, $36,699.15. At thirty, $102,532.66. At forty, $246,815.15.
Four times the horizon, more than twenty-six times the cost. The share of your potential balance consumed rises from 9.55% to 32.52% across the same span.
Which means this matters most to the people with the longest to go, and they are usually the ones with the smallest balances and the least reason to think fees are worth their attention.
A Quarter Of A Percent Is Not Nothing
The sensitivity table makes the point at the scale most real decisions happen. The difference between a 0.25% fund and a 0.50% one is $33,508.70 over thirty years on this investment.
Nobody experiences a quarter of a percent as a meaningful number, which is exactly why fee differences that size persist across the market.
The mechanism is that the fee applies to the whole balance every year while the balance is compounding, so a constant percentage takes a rising dollar amount. Our fixed fee vs percentage fee calculator works through what happens when a provider caps that.
The Stated Fee Understates It
Everything above uses the fee a fund discloses. The real gap between a fund and its index is usually wider.
Trading costs when the index changes, cash held back for redemptions, sampling, and foreign withholding tax that cannot be recovered all reduce the return without appearing in any fee. A fund charging 0.30% frequently lands 0.45% behind its benchmark.
Our tracking difference calculator measures that properly, and the figure it produces is the more honest one to bring back to this page.
What Is Not In These Numbers
Tax. A PIE is taxed at your prescribed investor rate and foreign shares under the fair dividend rate, both of which are usually a larger annual cost than the fee. Our total cost of owning a US ETF calculator brings fees and tax together.
Switching costs. Moving between funds can involve transaction costs and time out of the market, which is a real hurdle against the gains shown here.
Inflation. Every figure is in future dollars. The proportions are unaffected, which is why the percentage-of-potential column is the more durable way to read this.
Related NZ Fee and Investment Calculators
- KiwiSaver Fee Calculator: the same question for your KiwiSaver.
- Tracking Difference Calculator: what a fund really costs against its index.
- Fixed Fee vs Percentage Fee Calculator: when a flat charge beats a percentage.
- Compound Interest Calculator: the compounding that fees interrupt.
- Investment Calculator: project an investment without the fee comparison.
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- Fund Overlap Calculator NZ 2026/27: Duplicated Market Exposure.
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- Home Bias Calculator NZ 2026/27: your NZ Share vs the World.
- Imputation Credit Gross-Up Calculator: NZ Dividends.