How we calculate
Every number in FeeDrag is derived from these formulas. No black boxes.
What is fee drag?
Fee drag is the difference between what your portfolio could grow to (with zero fees) versus what it actually grows to after broker commissions, ETF expense ratios, FX conversion fees, and custody charges compound against you over time.
Because investment returns compound, fees compound too — in the wrong direction. A 0.5% annual drag on a 20-year DCA portfolio isn't 0.5% × 20 = 10%. Due to compounding, it's closer to 8–12% of your final portfolio value.
Step 1 — Effective monthly contribution
effectiveC = monthly × (1 - fxFee) - commission where commission: fixed broker: commission = €X per trade % broker: commission = max(monthly × commissionPct, minimum) zero-commission: commission = 0
FX fee applies when your account base currency differs from the ETF's trading currency. VWCE and CSPX trade in USD on Euronext — if your account is EUR, the broker converts on each purchase.
Step 2 — Annual drag rate
annualDrag = TER + custodyFeePct TER = ETF Total Expense Ratio (deducted from fund NAV daily) custodyFee = broker annual custody charge (if any)
Transaction costs (commission + FX) are already deducted from the effective monthly contribution above, so they are not double-counted here.
Step 3 — Future value (DCA)
netMonthlyRate = (annualReturn - annualDrag) / 12 months = years × 12 FV = effectiveC × [((1 + netMonthlyRate)^months - 1) / netMonthlyRate]
This is the standard DCA future value formula with the drag rate subtracted from the gross return before compounding.
Step 4 — No-fee baseline
FV_baseline = monthly × [((1 + annualReturn/12)^months - 1) / (annualReturn/12)]
This is what your portfolio would be worth if every euro contributed grew at the full assumed return with zero costs. We use it as the reference point for all fee drag calculations.
Step 5 — Fee drag
feeDrag = FV_baseline - FV_scenario
Positive values mean fees reduced your final portfolio. Negative values cannot occur — we clamp to zero.
Three scenarios
1. Current Setup
Your current broker profile + current ETF TER, applied to all future contributions.
2. New Contributions Only (Recommended)
Your existing portfolio stays untouched. Only new monthly contributions are routed through the lower-cost setup. This removes the need to sell and rebuy — and the tax event that comes with it.
3. Full Switch
All future contributions use the lower-cost broker and ETF. We do not model migration of existing holdings — consult a tax advisor before switching.
Assumptions & limitations
- Returns are assumed constant at the user-specified rate (default 7%)
- Monthly DCA (1 trade per month)
- No tax events (accumulating ETFs in a taxable account may differ by country)
- No rebalancing costs
- All broker fees are manually verified — see source links on each result
- Results are educational estimates, not financial advice