How much does a 1% fee cost over 20 years?

On ₹50 lakh at 12% gross CAGR for 20 years, a 1% annual fee can reduce final wealth by roughly ₹50–80 lakh versus no fee — depending on compounding path.

Direct vs regular mutual fund fees in India

Regular plans embed distributor commission via higher expense ratios — often 0.5–1.5% more than direct plans annually. That gap compounds for decades.

Do PMS fees work the same way?

PMS may charge fixed and performance fees. The principle is identical: every recurring drag reduces the base that compounds.

Fee Destroyer — Real Cost of Mutual Fund Expense Ratios

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Starting corpus (₹)

Gross return: 15%

Annual fee: 1%

Horizon: 20 years

Before fees

₹8.18 Cr

15% CAGR · 20y

After 1% fee

₹6.87 Cr

14.00% net · 20y

Stolen by fees

−₹1.31 Cr

16.0% of potential wealth

Gross (15%)Net after 1% fee (14.0%)

Fee comparison - 20y horizon

Fee %	Net CAGR	Final corpus	Lost to fees
0%	15.00%	₹8.18 Cr	-
0.5%	14.50%	₹7.50 Cr	−₹68.29 L
1%	14.00%	₹6.87 Cr	−₹1.31 Cr
1.5%	13.50%	₹6.29 Cr	−₹1.89 Cr
2%	13.00%	₹5.76 Cr	−₹2.42 Cr
2.5%	12.50%	₹5.27 Cr	−₹2.91 Cr
3%	12.00%	₹4.82 Cr	−₹3.36 Cr

Fee drag compounds over decades. Polaris charges a 0.5% fixed management fee plus tiered performance fees after capital-doubling milestones.

Polaris fee structureAudited FY outcomes

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PMS from ₹50L — model portfolios from ₹10L.

Illustrative only. Fee models vary and may be performance-based, tiered, or fixed. This calculator shows a simplified drag effect. Not investment advice.

How fees destroy compounded wealth

Fees are quoted in percent per year but paid in absolute rupees from a shrinking advantage versus a zero-fee benchmark.

Fee drag is non-obvious

Investors anchor on gross CAGR. Net CAGR after fees is what actually lands in your account — model both before comparing products.

Illustrative only — not investment advice. Past scenarios do not guarantee future results. Consult a qualified professional before investing.