WealthMER Fee Impact Calculator (Canada)
MER Fee Calculator 2026
These fees will cost you
—
over 25 years, versus the low-cost alternative
Editable assumptions above: gross return 6.5%, current MER 2.0%, alternative MER 0.20%. Net return = gross return − MER, compounded monthly. Estimate for illustration only — no named funds, no buy or sell recommendation.
How it works
For each scenario we compute a net return = gross return − MER. With a 6.5% gross return, your current product at a 2.0% MER grows at 4.5% net, while the alternative at 0.20% grows at 6.3% net. We then project two future-value paths with monthly compounding:
FV = P·(1 + r/12)^(12·t) + PMT·[((1 + r/12)^(12·t) − 1) / (r/12)]
where P is the starting capital, PMT the monthly contribution, r the net annual return, and t the horizon in years. The fee cost is not subtracted linearly — it emerges naturally from the difference between the two final values. That is the compound fee drag: every dollar skimmed off is a dollar that never compounds again.
A worked example
Take $25,000 of starting capital, $300 a month for 25 years, and a 6.5% gross return.
| Scenario | MER | Net return | Final value (est.) |
|---|---|---|---|
| Current product | 2.0% | 4.5% | ~$242,700 |
| Low-cost alternative | 0.20% | 6.3% | ~$338,000 |
The roughly $95,000 gap is close to 28% of the alternative's final value — handed over in excess fees for an MER difference that looks tiny on paper. Over 30- or 35-year horizons the gap widens even faster: it's the exponential power of compounding, applied to the fees you never see.
Why the gap widens so dramatically
The two curves on the chart start almost touching, then pull apart more and more. The reason: a higher MER doesn't just cost you this year's fee, but all the compound growth those fees would have produced over decades. The longer the horizon, the more the penalty explodes. A 1.8 percentage-point MER difference (2.0% vs 0.20%) seems harmless, yet compounded over 25 years it erases a huge slice of your wealth.
Frequently Asked Questions
What exactly is an MER?
The MER (management expense ratio) is the annual percentage a fund charges against its assets to cover management, administration and applicable taxes. A 2% MER means 2% of your investment's value is removed every year, whether the fund goes up or down. It's a silent cost: it's deducted directly from the fund's value, so you never get a bill.
Why does 2% a year cost far more than 2% of my balance?
Because the 2% is charged every year, on a growing balance, and above all on the returns that money would have compounded. A dollar paid in fees today is a dollar that never earns a return for the next 25 years. That's why the gap between 2% and 0.20% can equal a quarter or a third of your final balance — far more than simply adding up the annual percentages.
How do I find the MER of my current fund?
The MER is listed in the Fund Facts document and the prospectus, both of which your institution is required to give you. You can also find it on the fund manufacturer's website by searching the fund name or fund code. The MER is always shown as an annual percentage. In Canada, many mutual funds sold in branch carry an MER somewhere between 1.8% and 2.5%.
Is a 0.20% ETF really less risky than a 2% fund?
An investment's risk comes from what it holds — stocks, bonds, geographic mix, sectors — not from its MER. An index ETF at 0.20% and a mutual fund at 2% holding similar assets carry comparable market risk. The difference is that the ETF keeps far more of the return because it charges much less. Lower fees don't mean lower risk, but they don't mean higher risk either.
Track your portfolio with WealthWise
See at a glance the fees you're actually paying across all your Canadian accounts. Free to start, no card required.
Try WealthWise free →