ETF DCA Simulator — Dollar-Cost Averaging Calculator | money-calc.com

Free ETF compound growth simulator. Enter initial investment, monthly contribution, return rate and expense ratio to see final balance, yearly breakdown and investment growth chart.

Monthly compounding with cost drag

Dollar-cost averaging is modeled exactly as practiced: a fixed contribution lands at the start of each month and the whole balance then grows by one month's return. Costs are not an afterthought — the expense ratio is taken off the annual return before anything compounds, which is precisely how fee drag quietly compounds against you over decades of contributions.

Worked example with hypothetical returns

Starting with $1,000 and adding $300 every month at a 7% assumed return with a 0.03% expense ratio: after 15 years the balance reaches $98,228.20 on $55,000 contributed — a $43,228.20 gain. Re-running the identical plan with a 1% expense ratio ends near $90,135.94, about $8,100 less, with fees as the only change. Returns are illustrative assumptions, not predictions; informational only.

How to Use

  1. Initial Investment — Enter any lump sum you start with — set it to zero for a pure monthly plan
  2. Monthly Contribution — Enter the fixed amount you will invest at the start of every month
  3. Annual Return Rate — Enter a hypothetical annualized return (%), such as a long-run broad-index assumption
  4. Expense Ratio — Enter the fund's annual expense ratio (%) — it is deducted from the return before compounding
  5. Investment Period — Enter the number of years to keep contributing
  6. Calculate — Click Calculate to see the final balance, total contributions, total gain, and the year-by-year growth table

FAQ

What is dollar-cost averaging (DCA)?

DCA means investing a fixed amount at regular intervals regardless of price. By buying more shares when prices are low and fewer when high, it smooths out market volatility over time.

How does the expense ratio affect returns?

The expense ratio is subtracted from your annual return. A 1% expense ratio on a 7% return gives an effective 6% return. Over 30 years this can reduce your final balance by 25% or more.

Should I invest a lump sum or DCA?

Lump-sum investing outperforms DCA about 2/3 of the time in rising markets. But DCA reduces regret and timing risk. This calculator lets you model both strategies.

When are contributions applied each month?

At the start of the month, before that month's growth — so every contribution earns at least one month of return. The balance then compounds at the monthly rate derived from your net annual return.

How exactly does the expense ratio enter the math?

It is subtracted from the annual return before converting to a monthly rate: (return − expense ratio) ÷ 12 ÷ 100. That is a simplification of real funds' daily fee accrual, but it captures the long-term drag accurately.

What does the yearly breakdown show?

A row for every 12th month with the balance, cumulative contributions, and gain at that point — useful for seeing when compounding overtakes your own deposits as the main driver of growth.