Compare ETF costs

What does a difference in ongoing costs (TER) between two ETFs add up to over the years, at the same return before costs? Pick a fund from the list or type a TER yourself.

A worked example

With €5,000 to start, €250 a month, 25 years and 6% a year before costs, a TER of 0.14% ends at €191,124 and 0.20% at €189,254. The difference due to costs is €1,870. Over the full 25 years, the 0.14% fund loses €4,449 to costs and the 0.20% fund €6,319, compared with no costs at all. The 6% is an illustrative assumption, not a forecast.

After	Put in	TER 0.14%	TER 0.20%	Difference
5 years	€20,000	€24,077	€24,031	€47
10 years	€35,000	€49,631	€49,446	€185
15 years	€50,000	€83,860	€83,388	€472
20 years	€65,000	€129,710	€128,717	€993
25 years	€80,000	€191,124	€189,254	€1,870

The tool’s default settings: €5,000 to start, €250 a month, 6% a year before costs.

How it calculates. The tool runs the ETF Calculator twice with the same amounts, the same horizon and the same return before costs; only the TER differs. Each month the balance grows by (return − TER) ÷ 12, so at 6% and 0.14% that is about 0.488% a month instead of 0.5%. The difference in end amount is what the extra costs add up to, including the growth you could have had on that money.

How to read the result. The gap grows faster than the years: in the example it is €47 after 5 years and €1,870 after 25. A TER difference of 0.06 percentage points looks small per year, but it is charged every year on a growing balance. Compare funds that track a similar index; otherwise the difference in return can matter far more than the difference in costs.

What it is not. A comparison of costs only, not a judgement on which fund suits you. Funds also differ in index, countries, diversification, investment policy and risk, and a low TER says nothing about those. Tax, transaction costs, tracking difference and inflation are not included.

Where the figures come from. The TER values come from the issuers’ factsheets and KIDs; the month of the last check is shown under the result. If your fund is not in the list, choose Enter your own costs and type the TER from its factsheet.

How the calculation works

The tool runs one monthly calculation twice, once per TER, with the same amounts and horizon. First it takes the yearly return before costs and subtracts the TER. It divides that by 12 to get the monthly rate. Each month: new balance = old balance × (1 + monthly rate) + monthly amount, rounded to whole cents. The difference between the two funds is the two end balances subtracted; the cost of a fund is its end balance compared with the same calculation at a TER of 0%.

One line of arithmetic with the default settings and a TER of 0.14%: 6% − 0.14% = 5.86% a year, which is 5.86% ÷ 12 = about 0.48833% a month. In month 1, €5,000 × 1.0048833 + €250 = €5,024.42 + €250 = €5,274.42.

Two other situations

Both situations use the tool’s own calculation with the two TER values from the example above. The returns before costs are assumptions chosen to show the mechanics, not forecasts: real returns fluctuate, can be negative, and past performance guarantees nothing.

A single amount, left alone. Someone invests €20,000 once, adds nothing, and leaves it for 15 years at an assumed 5% a year before costs. With no costs the balance would be €42,274. At a TER of 0.14% it is €41,399 (€875 less than with no costs) and at 0.20% it is €41,030 (€1,244 less). The difference between the two funds is €369.

Saving every month. Someone starts with nothing and adds €400 a month for 10 years at an assumed 6% a year before costs; €48,000 is put in. With no costs the balance would be €65,552. At 0.14% it is €65,056 (€496 less) and at 0.20% it is €64,845 (€707 less). The difference between the two funds is €211. It is smaller than in the first situation because the horizon is shorter and each monthly amount is charged for fewer years.

Situation	No costs	TER 0.14%	TER 0.20%	Difference
€20,000 once, 15 years, 5%	€42,274	€41,399	€41,030	€369
€400 a month, 10 years, 6%	€65,552	€65,056	€64,845	€211

Illustrations with assumed returns before costs, not forecasts. Returns can be negative and past performance guarantees nothing.

Common mistakes when reading the result

Treating a lower TER as a better fund. The index, the countries and the risk can differ; the tool only shows what a cost difference adds up to.
Comparing two funds at different returns. The tool uses the same return before costs for both, so the gap you see comes from costs alone.
Forgetting that the TER is only one cost. Transaction costs, tracking difference and tax are not included.

What the calculation leaves out

The tool compares ongoing costs only, and it treats the TER as the same every year. In practice the TER of a fund can change, and a fund’s result also depends on how closely it follows its index (tracking difference). Transaction costs, tax and inflation are not included. Neither are differences in index, countries, diversification or risk between two funds. The return before costs is the same every month in the tool, while real returns fluctuate. The figures show what a cost difference could add up to under these assumptions; they are not a judgement on which fund suits anyone, and not advice.

The TER is not the only cost inside a fund. The fund’s Key Information Document also lists transaction costs: for VWCE 0.02% a year on top of the 0.14%. See what VWCE’s KID says, in plain words.

Questions about fund costs

Does a lower TER mean a better fund?

Not by itself. The TER is only one part of what a fund is. Two funds can follow different indices, hold different countries and carry different risk, and the TER says nothing about that. The tool answers one narrow question: what does a difference in ongoing costs add up to, at the same return before costs?

Why does the gap grow faster than the years?

The TER is charged every year on the whole balance, and the balance keeps growing. In the example at the top of the page the gap is €47 after 5 years and €1,870 after 25: five times the years, about forty times the gap. Money that is not lost to costs would also have earned a return of its own in later years.

What if my fund is not in the list, or its TER changes?

Choose Enter your own costs and type the TER from the fund’s factsheet. The tool uses one TER for the whole horizon, so if the fund changes its TER later, the real result will differ from the illustration. Check the current TER on the factsheet or KID before you rely on any comparison.