ETF Calculator
Calculate ETF returns and see how the expense ratio impacts your wealth over time.
Total Invested
₹6,00,000
Maturity Value
₹11,27,721
Returns
₹5,27,721
Cost of Expense Ratio
₹33,974
Growth Over Time
₹11,27,721
| Year | Invested | With Expense Ratio | Without Expense Ratio |
|---|---|---|---|
| 1 | ₹60,000 | ₹63,872 | ₹64,047 |
| 2 | ₹1,20,000 | ₹1,35,489 | ₹1,36,216 |
| 3 | ₹1,80,000 | ₹2,15,791 | ₹2,17,538 |
| 4 | ₹2,40,000 | ₹3,05,829 | ₹3,09,174 |
| 5 | ₹3,00,000 | ₹4,06,786 | ₹4,12,432 |
| 6 | ₹3,60,000 | ₹5,19,984 | ₹5,28,785 |
| 7 | ₹4,20,000 | ₹6,46,909 | ₹6,59,895 |
| 8 | ₹4,80,000 | ₹7,89,225 | ₹8,07,633 |
| 9 | ₹5,40,000 | ₹9,48,798 | ₹9,74,108 |
| 10 | ₹6,00,000 | ₹11,27,721 | ₹11,61,695 |
| Year | Invested | With Expense | Without Expense | Cost |
|---|---|---|---|---|
| 1 | ₹60,000 | ₹63,872 | ₹64,047 | ₹175 |
| 2 | ₹1,20,000 | ₹1,35,489 | ₹1,36,216 | ₹727 |
| 3 | ₹1,80,000 | ₹2,15,791 | ₹2,17,538 | ₹1,747 |
| 4 | ₹2,40,000 | ₹3,05,829 | ₹3,09,174 | ₹3,345 |
| 5 | ₹3,00,000 | ₹4,06,786 | ₹4,12,432 | ₹5,646 |
| 6 | ₹3,60,000 | ₹5,19,984 | ₹5,28,785 | ₹8,801 |
| 7 | ₹4,20,000 | ₹6,46,909 | ₹6,59,895 | ₹12,986 |
| 8 | ₹4,80,000 | ₹7,89,225 | ₹8,07,633 | ₹18,408 |
| 9 | ₹5,40,000 | ₹9,48,798 | ₹9,74,108 | ₹25,310 |
| 10 | ₹6,00,000 | ₹11,27,721 | ₹11,61,695 | ₹33,974 |
What is an ETF?
An Exchange Traded Fund (ETF) is a basket of securities that tracks an index, commodity, or sector and trades on stock exchanges like a regular share. Unlike mutual funds, ETFs can be bought and sold throughout the trading day at market price. They typically have lower expense ratios than actively managed mutual funds, making them a cost-effective way to diversify your portfolio.
Understanding Expense Ratio
The expense ratio is the annual fee charged by the fund house for managing your investment, expressed as a percentage of assets under management (AUM). It covers fund management fees, administrative costs, and distribution expenses. Typical expense ratios range from 0.05% for passive index ETFs to 2% or more for actively managed funds. Even a small difference in expense ratio compounds significantly over long periods — a 0.5% higher expense ratio on a ₹10,000/month SIP over 20 years can cost you several lakhs.
ETF vs Mutual Fund
- Trading: ETFs trade on exchanges in real-time; mutual funds are bought/sold at end-of-day NAV
- Expense Ratio: ETFs typically have lower expense ratios (0.05%–0.5%) vs mutual funds (1%–2.5%)
- Minimum Investment: ETFs require buying at least 1 unit at market price; mutual funds allow SIP from ₹500
- Transparency: ETF holdings are disclosed daily; mutual fund holdings are disclosed monthly
- Demat Account: ETFs require a demat account; mutual funds can be bought directly from AMCs
FAQ: What is a good expense ratio?
For passive index ETFs tracking Nifty 50 or Sensex, a good expense ratio is below 0.5% — many are available at 0.05% to 0.2%. For actively managed funds, below 1% is considered reasonable. Always compare expense ratios within the same category before investing.
FAQ: How does expense ratio affect returns?
The expense ratio is deducted from your returns every year. For example, if the market returns 12% and your fund's expense ratio is 1.5%, your effective return is 10.5%. Over 20 years, investing ₹10,000/month, this 1.5% expense ratio costs you over ₹15 lakh in lost returns. This is why low-cost index ETFs have become increasingly popular.