Investment Fee Drag Lab

Compare two fee structures against the same no-fee growth path and see how direct fees plus lost compounding affect long-term ending value.

Growth assumptions

Initial investment

Monthly contribution

Added at month end after modeled return and fees.

Years

Gross annual return

Your assumption before the modeled fee structures below.

Fee structures

Structure A management fee

Structure A fund expense

Structure B management fee

Structure B fund expense

Enter annual percentages. The lab models each total annual fee as twelve equal month-end charges after the monthly gross return and before the monthly contribution.

Fee-drag comparison

$2,414,816No-fee ending value

$2,245,418Structure A ending value

$1,687,509Structure B ending value

$557,908Ending-value difference between A and B

$460,000 total contributed0.30% Structure A annual fee load1.50% Structure B annual fee load

Direct fees versus lost compounding

Scenario	Total annual fee	Effective annual net return	Direct fees paid	Lost compounding	Total ending-value fee drag	Share of gross ending value lost
Structure A	0.30%	7.68%	$72,662	$96,737	$169,398	7.01%
Structure B	1.50%	6.39%	$298,351	$428,956	$727,307	30.12%

Direct fees paid are the modeled deductions themselves. Ending-value fee drag is larger when those deducted dollars would otherwise have continued compounding. Lost compounding is the difference between those two amounts.

Year-by-year audit

Year	No-fee ending value	Structure A	Structure B
1	$120,434	$120,093	$118,739
2	$142,502	$141,728	$138,675
3	$166,337	$165,025	$159,885
4	$192,077	$190,109	$182,451
5	$219,877	$217,120	$206,460
6	$249,902	$246,203	$232,002
7	$282,328	$277,519	$259,177
8	$317,348	$311,240	$288,089
9	$355,169	$347,548	$318,849
10	$396,017	$386,644	$351,574
11	$440,132	$428,741	$386,391
12	$487,776	$474,070	$423,433
13	$539,232	$522,878	$462,843
14	$594,805	$575,433	$504,771
15	$654,823	$632,023	$549,379
16	$719,643	$692,956	$596,838
17	$789,648	$758,567	$647,330
18	$865,254	$829,215	$701,049
19	$946,908	$905,285	$758,201
20	$1,035,095	$987,196	$819,006
21	$1,130,336	$1,075,394	$883,697
22	$1,233,197	$1,170,362	$952,523
23	$1,344,287	$1,272,621	$1,025,747
24	$1,464,264	$1,382,730	$1,103,651
25	$1,593,838	$1,501,291	$1,186,534
26	$1,733,779	$1,628,953	$1,274,714
27	$1,884,916	$1,766,415	$1,368,530
28	$2,048,143	$1,914,430	$1,468,341
29	$2,224,428	$2,073,807	$1,574,532
30	$2,414,816	$2,245,418	$1,687,509

What this model does

The same gross-return assumption and contribution schedule are applied to a no-fee baseline and both fee structures. Gross annual return is converted to an equivalent monthly return. Each fee structure combines the management fee and fund expense you enter, accrues that annual percentage evenly across twelve month-end deductions, and then applies the monthly contribution.

This makes fee drag auditable without pretending to know future market returns. Changing the assumed return changes how much compounding is available to lose, but the tool never estimates what return you personally should expect.

Important limits

This is an assumption-driven calculation, not a fee quote, forecast, recommendation, or tax model. Real advisory contracts can use different billing dates, breakpoints, account-level minimums, performance fees, or asset-specific exclusions. Fund expense ratios are commonly reflected inside a fund's reported net asset value and historical return, so do not add an expense ratio again when your return assumption already represents a net-of-expense return.

The lab does not model taxes, trading costs, bid-ask spreads, inflation, withdrawals, or changing fee schedules. It also does not identify which fee structure is appropriate for any investor.