Index Fund vs Active Fund Calculator
Fee gap compounded plus the probability-weighted alpha — what active must deliver just to tie the index.
Formula
The arithmetic of active management: before costs, active is a zero-sum game; after costs, it's negative-sum. Some funds do win — but identifying them in advance, not in hindsight, is the part nobody has solved. Indexing concedes average and wins by costs.
Not financial advice — for informational and analytical use only. Verify all figures with a qualified professional before acting on them.
Need index fund vs active fund calculator results fast? Analysts, founders, traders and finance professionals use the Index Fund vs Active Fund Calculator to skip the spreadsheet and get a defensible answer in one step — free, private and instant.
About Index Fund vs Active Fund Calculator
Fee gap compounded plus the probability-weighted alpha — what active must deliver just to tie the index. The arithmetic of active management: before costs, active is a zero-sum game; after costs, it's negative-sum. Some funds do win — but identifying them in advance, not in hindsight, is the part nobody has solved. Indexing concedes average and wins by costs. The governing relationship is active must generate alpha ≥ fee gap every year, before it adds value. The Index Fund vs Active Fund Calculator computes entirely in your browser — free, private (your figures never leave your device) and instant, recalculating live as you change any input.
How to use Index Fund vs Active Fund Calculator
- 1Enter Investment (currency), Market return (%), Index fund TER (%), Active fund TER (%), Odds active beats index (10y+) (%), Horizon into the Index Fund vs Active Fund Calculator.
- 2The result is computed automatically using active must generate alpha ≥ fee gap every year, before it adds value — there is no button to press.
- 3Change any input to model a different scenario, then copy or share the result.
Why use Index Fund vs Active Fund Calculator?
- ✓Computes index fund vs active fund calculator instantly with the correct formula — no spreadsheet needed
- ✓100% free and unlimited, with no sign-up, login or paywall
- ✓Runs entirely in your browser, so the figures you enter stay private
- ✓Shows the formula, a live worked example and references so you can defend the number
Frequently asked questions
What is the formula behind the Index Fund vs Active Fund Calculator?+
Index Fund vs Active Fund Calculator uses active must generate alpha ≥ fee gap every year, before it adds value. The arithmetic of active management: before costs, active is a zero-sum game; after costs, it's negative-sum. The tool substitutes your actual inputs into this relationship and shows the worked example step by step.
What inputs does the Index Fund vs Active Fund Calculator need?+
Enter Investment (currency), Market return (%), Index fund TER (%), Active fund TER (%), Odds active beats index (10y+) (%), Horizon and the result updates immediately — there is no button to press. Change any value to model a different scenario in real time.
Is the Index Fund vs Active Fund Calculator free, and is my data private?+
Yes — it is completely free with no sign-up or usage limit, and it runs entirely in your browser, so the numbers you enter are never uploaded or stored on any server. It is for informational and analytical use, not financial advice.
What should I watch out for when using the Index Fund vs Active Fund Calculator?+
Some funds do win — but identifying them in advance, not in hindsight, is the part nobody has solved. Indexing concedes average and wins by costs.
What is the Index Fund vs Active Fund Calculator based on?+
The method follows authoritative sources: Sharpe (1991) — The Arithmetic of Active Management; SPIVA. The formula and references are shown on the page so you can verify and cite the result.
Related Finance tools
Human Life Value (HLV) Calculator
The economic value of your future earnings to your family — the income-replacement basis for sizing a life-insurance cover.
● LiveTerm Life Insurance Coverage Calculator
How much term-life cover you actually need — replacing income, clearing debts and funding goals, net of existing assets and cover.
● LiveDIME Method Life Insurance Calculator
The DIME formula — Debt + Income + Mortgage + Education — a fast, complete way to size a life-insurance cover.
● Live