Active vs Passive Investing: Fee Comparison and Break-Even Return

This page does two things: (1) shows the break-even excess return implied by the fee difference (under this model), and (2) shows ending values under your assumed active portfolio return.

Break-even excess return equals (active fee − passive fee) under the net = gross − fee model. The dollar consequences depend on balance, horizon, contributions, and the active portfolio return you assume.

Inputs

Adjust these assumptions — results update as you type.

The total annual return you expect from the active strategy before fees.

Results

Inspect the Arithmetic

Active vs passive (after fees)

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Break-even extra return / yr (fee gap)

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Break-even active return (gross)

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Your assumed active return

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Passive ending balance

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Active ending balance

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Active ending balance (break-even return only)

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Break-even condition: (rpassive − feepassive) = (ractive − feeactive) ⇒ ractive = rpassive + (feeactive − feepassive)
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