By Kestutis Balciunas — European long-term investor, 11+ years self-directed. Reviewed against my editorial process on 4 June 2026.
Last reviewed: 4 June 2026. Some broker links are affiliate links — see my affiliate disclosure. Not investment advice.
ETF Fee Calculator: What an Expense Ratio Really Costs
“It’s only 0.5%” is the most expensive sentence in investing. An ETF’s expense ratio (TER) is charged every single year on your entire balance, so it compounds against you for as long as you hold — and the gap between a 0.07% index fund and a 0.50% “premium” one quietly becomes tens of thousands of euros over a saving lifetime. This calculator turns any expense ratio into the cash it will actually cost you, side by side, so you can see why fee-hunting is the closest thing to a free lunch a European investor has.
See also: Mortgage overpay vs invest.
Compare what three expense ratios cost you
These numbers make more sense with the guide
The free 12-page Starter Kit turns them into decisions: your first fund, a safe broker, and the tax basics for your country.
Why a 0.1% fee is not small
The mistake is thinking of the TER as a one-off slice. It isn’t. Each year the fund deducts the fee from the whole pot — including all the growth previous years’ fees would have earned. That is compounding working in reverse. On a typical European savings plan — a modest start, a few hundred euros a month, three decades — the difference between 0.07% and 0.20% is roughly €11,000, and the difference between 0.07% and 0.50% is well over €35,000. A 1.5% legacy mutual fund can hand back a quarter of the wealth you would otherwise have had. None of that buys you better performance; index funds tracking the same benchmark deliver almost identical returns before fees, so the cheaper one almost always wins after them.
See also: ETF benchmark comparison.
The one cost you actually control
You cannot control markets, you cannot control your tax rate, and you can only partly control your own behaviour. The expense ratio is the rare input that is fixed, known in advance, and entirely your choice. Picking the cheapest fund that gives you the exposure you want is a guaranteed, risk-free improvement to your long-term return — which is why low fees sit at the centre of every evidence-based investing philosophy. The flip side: paying up for an “active” or themed fund is a bet that its manager will beat the index by more than the extra fee every year, a bet the long-run data says most investors lose.
See also: Amundi vs xtrackers.
How to keep your fees low
Match the index first, then choose the cheapest tracker of it — for a global core that often means a 0.12–0.22% all-world fund; for US large-cap, S&P 500 trackers run as low as 0.03–0.07%. Keep the number of funds small so you are not stacking fees on overlapping exposure (the overlap analyzer shows when you are), and remember the TER is not your only cost — broker commission and FX matter too, which you can size in the EU broker fee comparator. To see the actual TER, domicile and tax of specific funds side by side, use the UCITS ETF comparison tool; to buy the cheap tracker you choose, my top pick for opening an account is Freedom24, with Trade Republic, Interactive Brokers and XTB as alternatives.
See also: PEA vs per UCITS comparison.
Frequently asked questions
How much does a 0.2% expense ratio cost over 30 years?
On a typical plan — say €10,000 to start, €300 a month, 7% gross return — a 0.20% TER costs roughly €17,000 in fees over 30 years, versus about €6,000 for a 0.07% fund. The difference, around €11,000, is money you keep simply by choosing the cheaper tracker of the same index. Run your own numbers in the calculator above.
Is a lower expense ratio always better?
When two funds track the same index, yes — they deliver near-identical gross returns, so the cheaper one wins after fees almost every time. The TER only stops being decisive when funds track different indices or use different strategies; then you are comparing exposures, not just costs. Match the index first, then let the lower fee break the tie.
What is a good ETF expense ratio?
For broad, cap-weighted UCITS index funds, anything at or below ~0.20% is good and ~0.07–0.12% is excellent; S&P 500 trackers go as low as 0.03%. Above ~0.40% you are usually paying for a theme, a strategy or a brand rather than the market — justifiable only if you specifically want that exposure and understand the long-term cost.
Do fees really matter more than picking the right fund?
For index investors, fees are one of the very few reliable predictors of long-term net returns, precisely because they are guaranteed while outperformance is not. You cannot know in advance which active fund will win, but you can know exactly what each fund will charge. Over decades, controlling cost beats chasing performance for most investors.
Is the TER the only cost of owning an ETF?
No. The TER is the ongoing fund charge, but your total cost of ownership also includes the broker’s trading commission, the bid-ask spread, any FX conversion, and — separately — tax. The TER is usually the biggest controllable drag for a long-term holder, but size the trading costs in the broker fee comparator and the tax layers in the withholding-tax and dividend-tax calculators.
Next: see the real TER of specific funds in the UCITS ETF comparison tool, build a low-cost mix in the portfolio builder, and size trading costs in the broker fee comparator.