ETF Return Calculator

What this calculator does

This ETF return calculator projects the future value of your ETF portfolio with monthly contributions, automatically applying the expense ratio drag and optionally reinvesting dividends (DRIP). It separates total return into price appreciation, dividend income, and the cumulative cost of fees — three factors that determine real-world ETF wealth.

Why ETFs dominate modern portfolios

ETFs combine the diversification of mutual funds with the trading flexibility of stocks and the tax efficiency of in-kind redemptions. The result: a $100k ETF portfolio costs roughly $30/year in fees with VTI versus $750+/year in a typical active mutual fund. Over 30 years, that gap alone can be worth six figures.

The expense ratio formula

Expense ratio is deducted continuously from fund NAV — you don't see a fee invoice. We model it by subtracting the expense ratio from your gross return, then compounding monthly. A 0.05% expense ratio on $100,000 costs about $50 in year one. Sounds tiny. Over 30 years on a growing portfolio it compounds into roughly $25,000-$40,000 of lost wealth — and that's at one of the cheapest ETFs.

DRIP: the silent multiplier

Roughly 35-40% of long-run S&P 500 total return has come from reinvested dividends. A DRIP setup automatically buys more shares with each distribution, accelerating compounding. Most brokers offer free DRIP — turn it on in any tax-advantaged account.

A worked example

Invest $10,000 in VTI plus $500/month for 25 years. Assuming 7.5% price appreciation, 1.8% dividend yield, 0.03% expense ratio, and DRIP enabled, you'd end with roughly $700,000-$800,000 on $160,000 contributed — a 4-5x return on capital, almost entirely from compounding and reinvested dividends.

Common ETF mistakes

1. Buying thematic ETFs at their peak hype (cannabis, EV, AI, crypto)
2. Holding 10+ overlapping ETFs that all own the same large-cap US tech stocks
3. Using leveraged ETFs (TQQQ, SPXL) as long-term holdings — they decay
4. Trading ETFs frequently and racking up taxable events
5. Ignoring international diversification (US is ~60% of global market cap)