Expense Ratio Wealth Drag
A 1.3% fee difference sounds tiny. Over 25 years, it silently eats lakhs from your corpus.
Who this is for
Anyone choosing between regular and direct mutual funds, or comparing active funds vs index funds. The fee difference looks small year to year — this tool makes the 20-year cost impossible to ignore.
Expense ratio (ER)
Annual fee charged by a mutual fund as a % of your invested amount. A 1.5% ER on ₹10L means ₹15,000 deducted every year — compounding against you.
Direct vs Regular
Direct plans bypass distributors and have 0.5–1% lower expense ratios than regular plans of the same fund. Over 20 years, this difference can compound to lakhs.
Index fund
A fund that passively tracks an index (e.g. Nifty 50). Typical ER: 0.1–0.2%. Active funds average 1.5–2.5%. The math rarely justifies paying active fees.
Your Portfolio
Use index fund benchmark (e.g. Nifty 50 ≈ 12%)
Compare
Direct index funds: 0.05–0.2%
Regular plans / active funds: 1–2.5%
Wealth lost to fees (1.4% ER gap)
₹75.2L
23.2% of your low-cost corpus vanishes to fees
Low-cost fund (0.1%)
₹3.2Cr
11.90% net return
High-cost fund (1.5%)
₹2.5Cr
10.50% net return
How the gap grows over time
| Year | Low (0.1%) | High (1.5%) | Fee drag |
|---|---|---|---|
| Yr 5 | ₹25.2L | ₹23.9L | ₹1.3L |
| Yr 10 | ₹51.7L | ₹46.7L | ₹5.0L |
| Yr 15 | ₹98.4L | ₹84.4L | ₹14.0L |
| Yr 20 | ₹1.8Cr | ₹1.5Cr | ₹33.8L |
| Yr 25 | ₹3.2Cr | ₹2.5Cr | ₹75.2L |
Same gross return of 12%. Only the expense ratio differs.