How this monthly fee model works
For a gross effective annual return g and annual fee f expressed as decimals, the monthly return is i = (1 + g)^(1/12) − 1 and the fee retention factor is q = (1 − f)^(1/12). Each month: grow the starting balance B to B(1 + i), deduct B(1 + i)(1 − q), then add the month-end contribution C. The ending balance is B(1 + i)q + C.
Both fee scenarios and the zero-fee baseline use the same inputs and order of operations. Direct fees are the deductions in that monthly model. The after-fee gain is ending balance minus starting principal and all contributions, so it can be negative. This is a defined equivalent annual percentage fee model, not actual daily fund charging and not gross return minus fee.
Illustrative example: starting investment 1,200, no contributions, one year, 0% gross return, scenario A fee 0% and B fee 20%. The zero-fee and A balances are 1,200, while B ends at 960 with 240 in direct deductions, a 240 balance difference and an after-fee gain of −240. These fee assumptions are editable illustrations, not recommendations.
Hypothetical educational results, not financial advice or predictions. Fees and returns are fixed user assumptions. No actual ETF or fund expense ratios are retrieved; trading fees, tiered platform charges, taxes and exchange-rate conversion are excluded. A return already net of the same fee would double count that cost here. The linked fees article retains its older annual gross-return-minus-fee approximation; its fixed examples use a different model and need not match this tool.