Comprehensive Guide
Learn more in our Investing Guide.
How it works
etf vs mutual fund cost calculator takes your inputs and produces etf: total fees over period, fund: total fees over period, etf: final portfolio value, fund: final portfolio value, cost difference. Compare ETFs and mutual funds — fees, tax efficiency, minimums, and total cost over time. You provide 6 inputs: Investment amount (currency, in dollars) (default: 50000 dollars); ETF expense ratio (%) (percent, in percent) (default: 0.03 percent); Mutual fund expense ratio (%) (percent, in percent) (default: 0.5 percent); ETF trading cost per year ($) (currency, in dollars) (default: 0 dollars); Expected annual return (%) (percent, in percent) (default: 8 percent); Investment horizon (years) (number) (default: 20). The calculator returns 5 outputs: ETF: total fees over period (a secondary output); Fund: total fees over period (a secondary output); ETF: final portfolio value (the primary result); Fund: final portfolio value (a secondary output); Cost difference (a secondary output). Investment calculations rest on a few variables — principal, return rate, time, and compounding — but their interaction is non-linear enough that intuition alone gets the answer wrong more often than not. This tool runs the real formula with your inputs and shows the numbers that matter, not the rounded approximations from a textbook. The underlying formula: Final value = Investment × (1 + return − expense ratio)^years | Fee difference = Fund fees − ETF fees With the default values, etf: final portfolio value is computed from the interaction of every input field — change any one of them and the result updates immediately, so you can stress-test different scenarios without re-entering the whole form. Adjust the inputs to match your real financial situation. The defaults are realistic starting points, but every person's circumstances differ — your actual income, expenses, rates, and timelines will produce a different answer. Use the tool iteratively: start with the defaults, then change one variable at a time to see which factor has the largest impact on your outcome.Formula
Final value = Investment × (1 + return − expense ratio)^years | Fee difference = Fund fees − ETF fees
Tips
- For index investing, ETFs (0.03%) beat mutual funds (0.3–0.5%) on cost.
- ETFs are more tax-efficient — no annual capital gains distributions.
- Mutual funds offer automatic investing and fractional shares.
- Vanguard offers both ETF and Admiral shares at the same low fee (0.04%).
Frequently asked questions
Are ETFs always better than mutual funds?
For index investing, ETFs usually win on cost and tax efficiency. Mutual funds may be better for: automatic recurring investments, minimum investment requirements (some ETFs require full share purchase), and certain actively managed strategies.
What is the fee difference between ETFs and mutual funds?
Average ETF: 0.16%. Average actively managed mutual fund: 0.5–1.5%. The difference compounds significantly over time: 0.5% over 30 years on $100K costs $45,000+ in lost returns.
How accurate are the calculator results?
The math is exact — the same formulas a financial professional would use by hand. The precision of the output depends entirely on how realistic your inputs are. Use your actual numbers rather than estimates when possible. The defaults are reasonable starting points, but your real income, rates, and timeline will produce a different result.