08 Expense Ratio Calculator
A small fee, a widening gap.
A fund's expense ratio looks tiny on paper. Compounded over decades, the gap it opens between gross and net is anything but.
| Horizon | Lost to fees |
|---|---|
| — | |
How to read this tool What each input changes
Every fund charges an expense ratio, skimmed from returns before they ever reach you. This shows the gap that one quiet number opens up over time.
- Investment amount
- The sum you invest. The rupee cost of fees scales directly with it.
- Gross annual return
- The return the fund earns before fees. The expense ratio is netted out of this every year.
- Expense ratio
- The fund's annual fee, as a percentage. It looks tiny, but it compounds against you for every year you hold the fund.
- Holding period
- How long you stay invested. The gap widens the longer you hold, because fees paid early also forfeit all of their future compounding.
We would rather you saw the cost.
The expense ratio is the quietest number in investing. It never lands on a statement, never triggers an alert, and never stops working against your returns. Much of the industry is content to leave it exactly that quiet.
We built this calculator to pull that number into the open. Third Rock Wealth earns a distribution commission, set by SEBI and disclosed in every scheme document, and we would still rather you knew precisely what a fund costs before you commit a single rupee to it.
Nothing about your money should be hidden from you, least of all by the people you trust to look after it.
What's a reasonable expense ratio for an equity fund?
For Regular plans, 1.5–2.0% is typical for active equity funds. Direct plans of the same fund are typically 0.5–1.0% lower because they cut out distributor commissions. Index funds sit at 0.1–0.3% in either flavour.
How does expense ratio affect returns over time?
It compounds against you. A 1% gap between two funds over 25 years can mean roughly 25% less corpus at the end — sometimes more. The longer your horizon, the more expense ratio matters relative to short-term performance differences.
Are Direct plans always better than Regular?
Mathematically yes — they cost less for the same underlying portfolio. Practically, Regular plans pay for advice, monitoring, and goal alignment. Whether that advice is worth the gap is the real question. TRW exists to make that gap worth it; if it isn't, Direct is the honest call.
Do all funds disclose expense ratio?
Yes, by SEBI mandate. Each fund publishes its TER (Total Expense Ratio) monthly. AMFI publishes a consolidated view. If a fund's TER changes materially, the AMC must notify investors.
For illustrative purposes only. Mutual fund investments are subject to market risks. Past returns do not guarantee future performance. This tool does not constitute investment advice.