How much do fund fees cost over time?

A fee that looks tiny each year compounds, because the money taken in fees can no longer grow. Over decades, a difference of even half a percent in fees can cost many thousands of dollars in lost growth.

Why do small fee differences matter?

Fees are charged every year on your whole balance, and the amount lost compounds. So a small percentage on a growing balance over a long period adds up to a large sum, which is why comparing fees on similar funds matters.

Should I just pick the cheapest fund?

Fees matter a lot, but so does choosing the right type of fund for your timeframe and a provider you trust. For similar funds, lower fees usually win over time.

Managed Fund Fee Drag Calculator

This New Zealand calculator reveals how much investment fees quietly cost you over the long term, the so-called fee drag that compounds across decades. You enter your investment amount, expected return, and the fund fee percentage, and the tool projects your balance with and without the fees, showing the cumulative amount lost to fees over time. A difference that looks tiny each year becomes a large sum by the end. The breakdown shows the gross growth, the fees deducted, and the net result year by year, helping investors understand why comparing fees on similar funds matters so much and make informed choices about where their money is invested.

Amount invested

Monthly contribution

Expected return

Annual fund fee

Years

total lost to fees over the period

Balance with fees$0

Balance with no fees$0

The fee is applied to your balance each year, reducing the return that compounds. Returns are not guaranteed and are shown before tax. Use this to compare similar funds, where the lower fee usually wins over time. Estimate only, not financial advice.

How it works

The calculator grows your investment and contributions at your expected return, and separately at your expected return minus the annual fee. The gap between the two balances at the end is the fee drag, the money lost not just to the fees themselves but to all the growth those fees would have earned had they stayed invested. Because it compounds, the effect is far larger than simply adding up the yearly fees.

Worked example

Investing $50,000 plus $300 a month for 30 years at a 6% return, a 1.2% annual fee could cost well over $100,000 in lost growth compared with a fee-free version. Even dropping the fee to 0.5% would keep a large share of that, which is why fees deserve close attention.

Related calculators

KiwiSaver Fee Calculator: KiwiSaver fees.
Compound Interest Calculator: compounding.
Investment Calculator: project investments.
Brokerage Fee Calculator: trading fees.

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