Four Different Costs
A fixed fee per trade, a percentage commission, bid-ask spread and annual product expense operate differently. Tax and custody cost can add further drag depending on the investor and product.
Fixed Fees on Small Purchases
A 5-unit fee on a 100-unit monthly purchase removes 5% before the money enters the market. The same fee on 1,000 units is 0.5%. More frequent trading is therefore not automatically better.
The Compounding Effect of Annual Expenses
A 1% annual expense is not deducted only once. It repeats each year and leaves a smaller base to compound. The gap between gross and net results expands over long horizons.
How to Model It
- Deduct fixed and percentage commissions from every contribution
- Add spread to purchase price and subtract it at sale
- Apply annual expenses periodically to portfolio value
- Report after-tax net value rather than only gross return
How Should You Use the Result?
This analysis is designed to make assumptions visible and reproducible, not to declare one universal winner. Change the amount, start date, currency and contribution frequency in the calculator to see how sensitive the outcome is. Review the worst window as carefully as the best one before making a decision.
A real investment can differ because of execution price, bid-ask spread, commission, tax, product expenses and the data provider's closing-time convention. The figures are therefore a gross historical comparison, not a personal return or a forecast.
