💸 Investment Fee Calculator

How Much Are Your Fees Costing You?

A 2% MER vs a 0.2% ETF doesn't sound like much. Over 30 years, the difference is often $200,000–$400,000 in lost wealth. See the real numbers.

Your Investment Details

$50,000
$1,000
9%
30 years
Total Fee Drag (Low Fee vs High Fee)
$0
Wealth lost to fees over 30 years
Low-Cost ETF
e.g. XEQT (0.20%), VFV (0.09%), XAW (0.22%)
0.20%
Net return after fees8.8%
Final portfolio value$0
Total fees paid$0
Total contributions$0
High-Fee Mutual Fund
e.g. typical Canadian bank mutual fund (1.5–2.5%)
2.00%
Net return after fees7.0%
Final portfolio value$0
Total fees paid$0
Total contributions$0

Portfolio Growth Comparison

Why Investment Fees Matter So Much

A 1.8% fee difference doesn't sound significant. But fees compound in reverse — they're applied to your growing portfolio every single year. A 2% annual fee on $500,000 is $10,000 taken from your portfolio that year. The following year, that $10,000 would have grown to $10,700 at 7% returns. And the year after, the compounding continues to accelerate.

Over 30 years, fees can consume 30–40% of the wealth you would have built in a low-cost fund. This isn't a theoretical concern — it's documented by regulators in Canada, the US, and internationally. The OSC and IIROC have both published research showing how dramatically MERs affect Canadian retirement outcomes.

Common Canadian MERs

Product TypeTypical MER$100K for 30 yrs at 9% gross
Vanguard VEQT / iShares XEQT0.20–0.24%$1,270,000
Low-cost index ETF (VFV, XAW)0.09–0.22%$1,290,000
Robo-advisor0.4–0.7%$1,110,000
Bank index mutual fund0.6–1.2%$960,000
Typical bank mutual fund1.5–2.5%$700,000
High-fee active fund2.5–3.5%$520,000

The difference between the best and worst options in this table is $770,000 on the same $100,000 starting investment with the same contributions and market returns. The only variable is fees.

Frequently Asked Questions

Do higher-fee funds perform better?
The overwhelming evidence says no. Decades of research — including S&P's SPIVA reports and Morningstar's active/passive barometer — consistently shows that 80–90% of active funds underperform their benchmark index over 15+ years, after fees. Higher fees are a reliable predictor of worse long-term performance, not better.
What is MER?
Management Expense Ratio — the annual percentage of your fund's assets charged by the fund company to cover management and operating costs. It's deducted from the fund's returns before they're reported to you, so you never see it as a direct charge. This is why MER fees feel invisible but compound silently against you over time.
What's the lowest-cost way to invest in Canada?
Self-directed investing through a discount brokerage (Wealthsimple, Questrade) buying a one-fund all-in-one ETF like XEQT (0.20% MER) or VEQT (0.24% MER). These funds provide global diversification across thousands of stocks at a fraction of the cost of any advisor-managed fund.

Play Where Fees Don't Eat Your Returns 🥔

In AlgoPotato, your ETF investments compound without fee drag. Experience what low-cost investing feels like in the FIRE game.

Play Free →

More Calculators

📈

Compound Interest Calculator

See how your money grows — and how fees slow that growth.

🔥

FIRE Calculator

Calculate your FIRE number and how fees affect your timeline.

💵

Retirement Income Calculator

See how much income your portfolio can generate in retirement.

💰

Savings Rate Calculator

Savings rate + low fees = the FIRE formula.