Index Fund vs Active Fund Calculator
Cost is guaranteed, outperformance isn't
Index Fund vs Active Fund Calculator
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Years
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Index fund corpus
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Active fund corpus
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Outperformance needed just to match the index, after costs
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In today's money (inflation-adjusted)
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real purchasing power after assumed inflation
Most active funds don't beat their benchmark after fees
Long-run studies (SPIVA India and similar) consistently show a majority of actively managed equity funds underperform their benchmark index over 10+ year periods, once fees are netted out — the manager may add gross alpha, but the higher expense ratio often eats most or all of it.
The comparison here assumes a gross-return edge for the active fund
This calculator lets you assume the active fund earns a higher GROSS return than the index (reflecting genuine manager skill) — adjust the "active fund expected gross return" slider down to the index return to see the pure fee-drag effect with no skill assumption at all.
Tracking error and out-of-market cash drag aren't modeled here
Real index funds have small tracking error versus their benchmark, and real active funds may hold cash that isn't fully invested — this is a simplified expense-ratio-driven comparison, not a full attribution model.
The "outperformance needed" figure is the extra annual gross return the active fund would need over its stated assumption just to match the index fund's final corpus, given its higher expense ratio — a way to see how much manager skill is actually required to justify the higher cost. Not a recommendation for or against either style; not investment advice.