Calculator
Managed Fund & ETF Calculator
Managed Fund & ETF Calculator
Fees & Tax
Projected Balance After 20 Years
$254,816.16
Cost Analysis
A 0.80% all-in fee rate is mid-pack for Australian funds — typical of active managed funds and higher-cost super options, though index ETFs charge a fraction of it. The drag compounds to $27,693.68 over 20 years against a final balance of $254,816.16, and distributions taxed at 37% take another $32,295.09 along the way.
*Projection assumes a constant gross return, monthly compounding, fees deducted continuously and distributions taxed at your marginal rate in the year received. AMIT components, CGT on exit, franking credits and fund-specific fee structures are not modelled. Educational only, not financial advice.
Managed Funds and ETFs: Same Exposure, Different Cost Machines
For most Australian investors, pooled funds are how the market actually gets owned — whether through an industry super option, an active managed fund from a household-name manager, or ASX-listed ETFs tracking the S&P/ASX 300 or a global index. The underlying exposure can be identical; the cost machines wrapped around it are not. Active managed funds typically charge management fees of 1-2% a year, disclosed as the Management Expense Ratio (MER), while plain-vanilla index ETFs charge 0.04% to 0.25%. On either, an Indirect Cost Ratio (ICR) layer — transaction costs inside trusts, buy-sell spreads — adds a few hundredths more. Fees are only half the story for Australian taxpayers. Distributions arrive annually with tax attached: fund income is distributed under the Attribution Managed Investment Trust (AMIT) regime, with components taxed as ordinary income, franked dividends, or capital gains. An investor on the 37% rate receiving a 4% distribution yield pays real tax along the way — which is why the same fund held inside super (15% tax) versus outside (marginal rates) compounds so differently. This calculator prices the whole machine: your contributions compound at the gross return less MER and ICR, distributions are taxed annually at your marginal rate, and the counterfactual — what you'd have with zero-fee access to the same return — quantifies exactly what the fee structure costs you in final-balance dollars. That last number is the one that settles the active-versus-index debate faster than any opinion.
Compounding Net of Fees and Distribution Tax
Each month the balance grows at the net rate — the gross expected return minus the combined MER and ICR, divided by twelve — then your contribution is added and the month's distribution slice is taxed. The model treats the distribution yield (say 4%) as paid out of returns each month, with your marginal rate applied immediately: a truer picture than ignoring tax until sale, because Australian trust distributions are taxable in the year they land whether or not you reinvest them. Two figures fall out of the simulation. The fee drag runs a second, identical portfolio with the fee layers switched off and measures the gap in final balances — not the fees paid each year, but everything those fees would have compounded into. Because lost dollars lose all their future growth, this number dwarfs the annual fee bill: 1.5% a year on a 20-year plan commonly removes 15-20% of the terminal wealth. The money multiple — final balance divided by total contributed — rounds out the view of what the machine actually returned per dollar invested. Simplifications worth knowing: returns are modelled as smooth rather than volatile, CGT on eventual sale isn't included, and franking credits aren't credited against distribution tax — all deliberate, so the comparison isolates fee structure. For after-tax precision including exit CGT, pair this tool with the CGT calculator.
Expert Insights
The Fee Gap Compounds Faster Than You Think
A 1.75% fee difference doesn't sound like much, but over 20 years it commonly consumes 20-30% of your potential terminal wealth — the calculator's fee-drag figure shows it in dollars. Australian index ETFs charging 0.04-0.15% make that gap almost pure alpha for the index investor: identical ASX 300 exposure, none of the drag. Before paying active fees, demand the evidence the fee-drag number implies — persistent after-fee outperformance.
Read the MER and the ICR Separately
The MER covers the manager's fee; the ICR captures transaction costs buried inside the trust — and some funds disclose them separately, letting headlines look cheaper than reality. Product disclosure statements list both, and superannuation 'investment fees plus indirect costs' follow the same trick. Always add the two lines before comparing funds: a 0.7% MER with a hidden 0.4% ICR is a 1.1% product competing against a 0.12% ETF.
Distribution Timing Is a Tax Choice You Control
Australian funds distribute in June regardless of whether you wanted income, and the tax lands in your current-year return even if reinvested. Buying a fund in May means paying tax on nearly a full year of someone else's distribution — the classic 'buying the distribution' trap. For non-super investors in high brackets, deferring new purchases until just after distribution season, or favouring low-distribution accumulation-style exposure, keeps more working capital compounding.
Actionable Tips
- 1
Add MER Plus ICR Before Comparing Any Two Funds
Pull both numbers from the PDS or fund page and enter them separately here. Compare the all-in figure against a comparable index ETF — if the gap exceeds about half a percent, the active fund needs genuinely persistent skill to win, and SPIVA-style data shows most don't keep it up over a decade. Run both through this calculator and let the fee-drag line argue for you.
- 2
Set Your Tax Rate Honestly, Including Where the Fund Sits
Outside super use your true marginal rate including Medicare — 32.5% becomes 34.5% for most full-time professionals. Inside super, distributions face the 15% fund rate instead, which is why the same high-distribution fund behaves differently in each wrapper. Model both here before deciding where each holding belongs; asset location often beats asset selection for after-tax returns.
- 3
Check What the Distribution Actually Contains
AMIT statements break distributions into interest, franked dividends, unfranked income and capital gains — each taxed differently. A fund showing a 4% yield might carry substantial franking credits (worth 30 cents per credit dollar to you) or capital gains discounted by the CGT rules. When comparing two similar-yield funds, the franking-heavy one usually nets more after tax; adjust the effective tax input down for franked portions to see it.
Real-World Examples
Aisha Switched Managers and Found $94,000
Aisha had $180,000 in an actively managed Australian equities fund charging 1.92% all-in. The same exposure existed via an ASX 300 index ETF at 0.11%. Running both projections over her remaining 18-year horizon showed a $94,000 gap in expected terminal wealth. She switched, kept her June distribution timing clean the following year, and redirected the fee savings into her mortgage offset.
Ben Learned Where His Fund Belonged
Ben held a high-distribution corporate bond fund in his brokerage account, paying 39% marginal tax on every distribution, while his super sat mostly in cash. The location flip — bond fund into super at 15%, growth shares outside — changed nothing about risk but cut his annual distribution tax by roughly $2,100. The calculator's tax input made the wrapper comparison obvious in one sitting.
The Okafors Chose Cheap Over Clever
Starting their first child's investment plan, the Okafor parents compared a themed managed fund (2.1% all-in) against a diversified index ETF (0.14%). Over the 18 years to age 18, the projection showed the fee difference alone consuming about a quarter of the potential outcome. They went cheap and boring, automated $200 a fortnight, and the first AMIT statement confirmed the tiny distribution tax bill they'd planned for.
Glossary of Terms
- MER (Management Expense Ratio)
- A fund's annual management fee and operating expenses expressed as a percentage of assets — deducted from returns whether the fund performs well or badly.
- ICR (Indirect Cost Ratio)
- Transaction and operational costs incurred inside a fund or super investment option, disclosed separately from the MER; add it to the MER for the true all-in cost.
- AMIT (Attribution Managed Investment Trust)
- The regime under which most Australian managed funds attribute income to investors annually, issuing AMMA statements detailing the taxable components of each distribution.
- Distribution Yield
- The income a fund pays out annually as a percentage of its price — taxable in the year received, whether taken as cash or reinvested.
Frequently Asked Questions
Everything you need to know about this topic.
Ivy Sinclair-Wren
Financial Chaos Analyst
Ivy Sinclair-Wren is a Financial Chaos Analyst covering investing, AI, wealth psychology, and the emotional consequences of opening finance apps during market crashes. Based in Melbourne, she specializes in demystifying the Australian tax code and helping users navigate the intersection of spreadsheet logic and human irrationality.