Let's dive into something crucial today: ETF fees and how they can impact your returns. A small difference in fees can have a BIG impact on your financial future.

The Impact of Fees

When you invest in an ETF, you're often charged a fee known as the Management Expense Ratio (MER) or also called Total Expense Ratio (TER). Even a seemingly small fee can eat into your returns significantly over time. Let's do the math:

Assumptions:

• Monthly investment: $500

• Annual return: 10%

• Investment period: 30 years

No Fee

• Total fees: $0

0.1% Fee

• Total fees over 30 years: $24,401.40

0.5% Fee

• Total fees over 30 years: $94,819.78

1% Fee

• Total fees over 30 years: $182,354.10

2% Fee

• Total fees over 30 years: $337,183.65

Why Low Fees Matter

As you can see, the difference between no fees and a 2% fee is a staggering $337,183.65 over 30 years. This is money that you could be using for your retirement, a dream vacation, or investing further. The lower the fee, the more you keep of your hard-earned money.

My Preferred Low-Fee ETF

To illustrate this, I want to share my preferred S&P 500 ETF: the SPDR S&P 500 UCITS ETF (SPY5). It currently has the lowest fees in the market at just 0.03% per annum. This means more of your money is working for you, not being eaten up by fees.

This isn't a buying recommendation—I'm simply sharing what I am buying myself. Always do your own research or consult with a financial advisor before making any investment decisions.

Key Takeaways

1. Lower Fees = Higher Returns: Small fee differences can lead to large differences in your final returns.

2. Choose Wisely: Opt for ETFs with lower fees to maximize your investments.

3. Stay Informed: Regularly review your investment choices and their associated fees.

Cheers,

Kai

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