How this calculation works
Run identical contributions and gross returns with each annual fee deducted proportionally from the post-growth balance every month. Compare ending pots. Fee drag includes both direct fees and the growth no longer earned on those fees.
A worked example
With a R100 000 lump sum, no contributions or growth, a 0% fee retains R100 000; a positive recurring fee reduces that ending balance.
Assumptions & limitations
- Returns and fees stay constant. Fee drag is not the same as the sum of cash fees. Product fee timing, tax, trading fees and performance fees may differ; use comparable all-in fee assumptions.
