What your funds actually cost you, in dollars per year
Published 2026-10-01
Your brokerage statement shows what you own and what it is worth. It does not show what it cost you to own it. Fund fees are not billed to you. They are taken out of the fund's assets every day, so the fund's price already reflects them and no line item ever appears.
That is why most people with several funds can recite their balance and cannot say what they paid last year. The number exists. It is just not on the page you look at.
This article shows how to calculate it yourself, across every account you hold, in about ten minutes.
The one number to find for each fund: the expense ratio
Every fund publishes an expense ratio: the percentage of the money in the fund that is deducted each year to run it. A 0.50% expense ratio means $5 per year for every $1,000 invested in that fund.
Where to find it:
- Mutual funds and ETFs: the fund's own page at the fund company, and the fee table at the front of its prospectus. The line to look for is "Total annual fund operating expenses".
- Funds inside an employer 401(k): the plan's annual fee disclosure, which plan administrators are required to send participants. It lists each investment option's expense ratio. The rule is 29 CFR 2550.404a-5: the disclosure must include each option's expense ratio and be furnished at least once every 14 months.
Two things the expense ratio is not. It does not include any advisory fee a person or platform charges you on top, and it does not include trading costs inside the fund or any sales charge you paid to buy it. It is the floor of what you pay, not the whole bill.
The calculation
For each fund: dollars held × expense ratio = dollars per year. Add those up. Divide the total by your total balance to get your weighted expense ratio, which is the single percentage that describes what the whole portfolio costs.
You need the weighted figure, not the average of the ratios. A simple average treats a $5,000 fund and a $200,000 fund as equals. They are not.
A worked example
Four accounts, four funds. Every number below is hypothetical. None of these is a real fund.
| Account | Fund (hypothetical) | Balance | Expense ratio | Cost per year |
|---|---|---|---|---|
| Taxable brokerage | Fund A, broad U.S. index | $120,000 | 0.04% | $48.00 |
| Traditional IRA | Fund B, international index | $45,000 | 0.11% | $49.50 |
| Old employer 401(k) | Fund C, target-date | $85,000 | 0.65% | $552.50 |
| Roth IRA | Fund D, actively managed U.S. large-cap | $40,000 | 0.85% | $340.00 |
| Total | $290,000 | 0.34% weighted | $990.00 |
Three things stand out, and none of them is visible from any single account.
- The simple average of the four ratios is 0.41%. The weighted figure is 0.34%. Which one you quote changes the answer, and only the weighted one multiplies out to the real dollars.
- The old 401(k) holds 29% of the money and generates 56% of the cost. $552.50 of the $990. It is also the account this person is least likely to open.
- The headline percentage hides the dollars. "0.34%" sounds like nothing. $990 a year is a number you can compare against other things you spend on.
Why a dollar figure helps
A fraction of a percent is hard to feel. A dollar figure per year is easy to check, easy to compare, and easy to ask questions about.
It is also easy to verify. Every input above is a published number: your balance on your statement, and the expense ratio on the fund's own disclosure. You do not have to trust anyone's estimate, including ours.
If you want to see how a fee compounds over time, the arithmetic is simple, with one caveat. At a constant $290,000 balance, $990 a year is $9,900 over ten years and $29,700 over thirty. That is the fee total only. It deliberately ignores growth, because we do not forecast it and neither should a fee calculation.
How to see where your own figure sits
You can compare your weighted expense ratio against the ratios published for funds with a similar investment focus. Fund companies and fund databases publish category-level fee data, and for context, the Investment Company Institute reported that in 2025 the average expense ratio was 0.40% for equity mutual funds and 0.14% for index equity ETFs (ICI, Trends in the Expenses and Fees of Funds, 2025, March 25, 2026). Those are averages across thousands of funds, not a target. What to do with any gap is your decision; it depends on taxes, plan menus, account types and things we cannot see.
What this does not cover
- Advisory or platform fees charged outside the fund.
- Trading costs and bid/ask spreads.
- Sales loads and commissions.
- Taxes triggered by changing anything. That belongs with a tax professional.
Want a number for your own funds without making an account? The fund overlap calculator takes two to five tickers and a portfolio value, splits that value equally across them, and returns what their expense ratios cost per year in dollars. If your balances are not equal, use the weighted calculation above.
Datum shows you what you own. It does not give investment advice or recommend what to buy or sell.