What funds typically cost
The EU securities regulator ESMA found that ongoing costs were above 1.5% a year for actively managed equity funds, and around 0.6% on average for passive funds and ETFs, in its study of 2009–2018.[1] In the United States, Morningstar reports that the average fee paid by fund investors fell from 0.80% in 2006 to 0.32% in 2025.[2] Broad index ETFs are often cheaper still, at around 0.1–0.2% a year.
Why a small percentage matters
The fee is charged on your whole balance every year, not only on what you deposit. ESMA calculated that a ten-year investment of 10,000 EUR in 2009–2018 returned about 16,160 EUR after costs, and that the costs came to about 2,800 EUR.[1] Morningstar's research finds that the fee is the most reliable predictor of a fund's future returns.[3]
| Annual fee | 350 EUR a month for 25 years |
|---|---|
| 0.2% | about 359,000 EUR |
| 1.5% | about 295,000 EUR |
The table assumes 9% a year before fees in both cases. The difference is about 64,000 EUR.
Where to find the fee
Look for the ongoing charge or TER in the fund's Key Information Document. It is taken from the fund automatically, so you never see a bill. Check the other costs as well: platform fees, currency exchange fees and, for ETFs, commission and spread.
Common questions
Is the cheapest fund always the best?
No. First check that it tracks a broad index you understand, and how closely it follows that index after costs. Between two funds that track the same index, the cheaper one usually comes out ahead.
Are there costs besides the fund fee?
Yes. Your platform may charge a custody or account fee, a currency exchange fee and, for ETFs, commission. These vary between platforms and can matter more than the fund fee on small amounts.
Sources & further reading
We cite independent authorities so you can verify everything yourself. Last reviewed 15 Sept 2026.