Effective Yield After Fees Calculator

A fund quoting a 5% yield with a 0.3% platform fee and a 0.75% OCF pays an effective 3.95% net. On 100,000 that is 1,050 a year, or about 10,500 across a decade before any compounding is counted. Charges are deducted inside the fund and the platform rather than appearing as a line on a statement, and this tool puts the whole drag in one place.

What the result means

The primary figure is the net yield after every fee entered. The secondary rows break out the total drag and each fee separately. The gap between gross and net is the annual cost of holding this investment through this particular structure, and on a long horizon that gap compounds.

Why fees matter more than they look

A 1% fee sounds small. Over 30 years it removes about a quarter of the final value against a fee-free alternative: 25.0% at a 5% gross return, 24.5% at 7%, and 24.0% at 10%. The proportion barely moves with the return assumption, and it edges down as returns rise rather than up. Fees compound in the same manner as returns, which is part of why low-cost index products have taken share from higher-charging ones over the past two decades.

A worked example

With the defaults: gross yield of 5%, platform fee of 0.3%, fund ocf of 0.75%. The tool returns 3.95%.

What moves the number most

Unusually, all three inputs carry the same weight. The result is a subtraction, so a percentage point added to Gross Yield and a percentage point taken off either Platform Fee or Fund OCF each move the net figure by exactly one point. A platform charging 0.20% more costs the same as a fund yielding 0.20% less. What the arithmetic does not capture is that the fees are contractual and the yield is an estimate, so the two sides of the subtraction are not known with equal confidence.

The formula behind this

Subtraction. Platform and fund charges are normally quoted as an annual percentage of assets, and a yield is also expressed as a percentage of assets, so the two sit on the same basis and subtract directly. Charges quoted in cash terms, such as dealing fees or a flat annual account charge, need converting first: divide the expected annual cost by the portfolio value, then add the result to the fee inputs.

Where this fits in planning

This is a "what-if" tool, not a forecast. It helps to test ideas: what happens to the result as the Gross Yield or the Platform Fee changes. Running several sets of figures shows how sensitive the result is to each input; a single set does not.