Fee drag over time calculator

What 2-and-20 compounds into.

Interactive: fee drag over timeMedium

"2 and 20" sounds like a detail. Compound it for a decade and it's the difference between the investor's yacht and the manager's.

Gross return % p.a. Management fee % Performance fee % Years

Net return p.a.: —
100 grows to (gross): —
100 grows to (net): —
Share of gains paid in fees: —

Performance fee charged on returns above the management fee, no hurdle, no high-water-mark subtleties. Real fund terms vary — the compounding lesson doesn't.

The idea behind it

This calculator belongs to Alternatives & Private Markets, where the mechanism it computes is explained step by step, with the formula, what each input means and where the simple model stops being right. Everything is computed in your browser; nothing you type is sent anywhere.

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Not advice. This explains how something works; it is not a recommendation, and nothing here is tailored to you. You can lose everything you put in — with leveraged instruments, considerably more. StrikeAndYield is not a regulated firm and provides no financial services.

The same in full — six points, and why each one matters

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Nothing here is tailored to you. This is written for a general audience. It does not consider your objectives, financial situation, knowledge, time horizon or tolerance for loss.
The examples are simplified. Worked examples use round numbers and leave out costs, spreads, taxes, collateral, settlement and market conventions that materially change real outcomes.
The models are teaching models. Formulas shown are standard textbook formulations. Institutions add calibration, live market data and credit, funding and capital adjustments — nothing here will reproduce a dealer’s quote or produce a valuation you can rely on.
These instruments carry risk. You can lose your entire investment. Leveraged instruments — futures, options, CFDs, perpetual futures and similar — can cost you considerably more than you originally deposited.
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