Index Fund Calculator
Project index fund growth with low expense ratio vs managed fund comparison.
By Konstantin Iakovlev · Updated April 2026 · Source: SEC
Index Fund Value
$1.1M
Managed Fund Value
$915.4K
Fee Savings
$207.7K
Comparison
| Total Contributed | $180,000.00 |
| Index Fund (0.03% ER) | $1.1M |
| Managed Fund (1.00% ER) | $915.4K |
| Extra from Low Fees | $207.7K |
Use the Index Fund Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.
Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.
How It Works
Fees are quiet, but over decades they are anything but small. Comparing a low-cost index fund against a traditional actively managed fund here makes that gap visible, showing how a fraction of a percent in expense ratio can split into a wide gulf in ending wealth by 2026 and the years that follow.
The projection runs on a compound interest formula that takes in your initial investment, annual contributions, expected annual return, and the expense ratio of each fund. The future value is computed as FV = P(1+r/n)^(nt) + PMT * [((1+r/n)^(nt) - 1) / (r/n)], where 'r' is the net annual return, that is the gross return minus the expense ratio. Running both funds through it produces a clean comparison of growth after fees are taken out.
The numbers are projections, not promises, since past performance never guarantees what comes next. Many investors fixate on headline gross returns and miss how steadily high fees erode a balance over the long haul. Taxes also matter to your real outcome, though this particular calculation leaves them out.
Example: Investing $10,000 with $500 monthly contributions
- 1 Let's say you invest an initial $10,000 today and contribute an additional $500 per month. We'll assume a gross annual return of 8% for both fund types, a 0.05% expense ratio for the index fund, and a 1.2% expense ratio for the actively managed fund.
- 2 By the end of 2026, with an index fund (0.05% ER), your investment would grow significantly. The actively managed fund (1.2% ER), despite the same gross return, will have a noticeably lower net return due to its higher fees.
- 3 By December 31, 2026, the index fund balance could be approximately $46,500, while the actively managed fund balance might be closer to $45,200. This $1,300 difference, accumulated in just a few years, demonstrates the power of low fees.
- 4 This example clearly illustrates how even a seemingly small difference in expense ratios compounds over time. Over longer periods, this gap widens dramatically, highlighting why prioritizing low-cost index funds is a cornerstone of effective long-term investing.
Source: SEC · Last updated: April 2026
Frequently Asked Questions
How much should I invest in index funds?
What is a good expense ratio for an index fund?
Do index funds outperform managed funds?
You might also need
Compound Interest Calculator — See Your Money Grow Over Time
Calculate compound interest with regular contributions and see how your money grows with daily, monthly, or annual compounding. Free, instant results and charts.
Inflation Calculator
Calculate the impact of inflation on purchasing power over time. See how much past dollars are worth today.
Net Worth Calculator
Calculate your net worth by adding up assets (savings, investments, property) and subtracting liabilities (loans, credit cards).