How do investment fees affect your portfolio?
With so many investment considerations, it can be easy to forget about fees – here’s why you shouldn’t.
Updated 
2 min. read
Managing your own investments means you have a lot to consider. But amongst asset allocation, your appetite for risk and portfolio balance, it’s important to keep fees in mind. As Eric Kirzner explains, they can have a huge impact on your investments over time.
How can investment fees add up?
Let's say there are two investment opportunities – option A offers a saving of 1% a year for 30 years over option B. With an initial investment of $10,000, at the end of 30 years, you'd have an extra $3,600 to work with, with option A versus option B. Now if that saving was 2%, you’re looking at roughly $8,000 more dollars saved on your initial investment with after 30 years. Now factor in your ongoing contributions, and the margins become wider and wider.
How important are fees?
Investment fees are far from the only thing you want to consider. Any DIY investor should have a broad range of considerations when evaluating a particular investment product, but if two investments are relatively on par, a product carrying a lower fee is always worth looking in to. While you’re considering portfolio balance, performance, asset allocation and a whole range of other factors, fees certainly shouldn’t be overlooked.
What kind of fees can I incur?
The fees you incur will depend on the investment product you choose. For example, mutual funds come with what’s called an expense ratio. This is a percentage fee taken for the cost of managing the fund. Other products will come with management fees, front- or back-end loads which charge you when you buy or sell respectively.
Invest responsibly by researching the fees associated with each investment product, and factor it into your decision-making process – it could end up saving you a lot of money.
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