ETF vs mutual fund vs BET replication
How much do fees really cost? Compare the TER of a mutual fund or ETF with the cost of replicating the BET index yourself — dividend tax, CASS and trading fees — and see which option leaves more money in your pocket over the long term.
Updated: June 2026
The real cost of convenience
Many ETFs carry hidden costs in their Total Expense Ratio (TER).
Replicating an index yourself takes more effort, but over time it can make a meaningful difference.
Use the calculator to see how costs add up.
ETF vs DIY: Cost comparison
Dividends are taxed differently:
DIY pays 16% dividend tax and CASS when annual thresholds are reached; ETF costs are applied annually through TER.
chevron_rightDIY cost assumptions
Rent, independent activity or other non-salary income, per year. Taxable amount, not gross.
Average annual costs & taxes
Projected charges over 10 years, divided by 10; CASS is included in years when a threshold is reached.
Break-even TER (10 years)
1.08%
Estimated value after 10 years (including contributions)
DIY wins — you keep €7,231 more after 10 years
Anchorfolio is built exactly for this — manual replication, zero ETF fees.
Note: In dividend-heavy markets, ETF investors pay recurring dividend tax implicitly through the fund. DIY replication pays dividend tax explicitly, but avoids annual TER. Depending on yield levels, one can dominate the other over time.
Fees matter more than you think
When you compare a mutual fund, an ETF and manual index replication, the gross return is often similar — the exposure is nearly the same. What separates them is cost. And unlike market returns, costs are guaranteed.
An active mutual fund in Romania can have a 3–6% TER per year. A BET ETF usually costs between ~0.95% and ~1.5% (Investimental, BT, TradeVille). Manual replication (DIY) removes the TER entirely, but adds the 16% dividend tax, possibly CASS, and trading fees. The real question is not “what is cheaper today?”, but “what is cheaper over 10–20 years?”, because these costs compound.
One important detail: the percentage commission is usually the same for an ETF and for manual replication. The real difference is the fixed component of the commission — one trade for the ETF vs ~10 trades to replicate the top 10 BET companies.
You can calculate dividend tax and CASS precisely using the dividend tax calculator.
When manual replication wins
Manual index replication becomes attractive when the alternative TER is high, such as expensive mutual funds, and when the portfolio is large enough for fixed trading fees to become less relevant. For small portfolios or very cheap ETFs, the simplicity of an ETF can matter more than the cost saving. In some scenarios — especially when the dividend yield is high — the impact of the dividend tax gets surprisingly close to the TER of a BET ETF.
Why top 10 BET and BUY-only rebalancing
The top 10 BET companies cover the bulk of the index weight — around 90% of the exposure. Replicating only the top 10 lets you avoid the small companies that enter and leave the index often, reduces taxable SELL/BUY events, and means ~10 trades instead of ~20, while still keeping over ~90% of BET exposure.
There are two rebalancing approaches: SELL/BUY (sell what is over-weight and buy what is under-weight) or BUY-only (reduce drift purely through new contributions, without selling). BUY-only has a clear tax advantage: it generates no taxable gains from selling. A practical method is to use received dividends as fresh capital for rebalancing instead of automatically reinvesting them into the same company (DRIP).
How they compare over the long term
At its core, the comparison uses the future-value formula with recurring contributions, applied separately to each option:
DIY: FV = P·(1 + r_div)^n + C · ((1 + r_div)^n − 1) / r_div ETF: FV = P·(1 + r_etf)^n + C · ((1 + r_etf)^n − 1) / r_etf
Where r_etf is the return after TER and r_div is the return after dividend taxation and DIY costs.
Use the calculator above to see the exact break-even point for your situation, based on portfolio value, monthly contribution, dividend yield and the TER you currently pay.
Frequently asked questions
What is TER (Total Expense Ratio)?expand_more
TER (Total Expense Ratio) is the total annual cost of a fund or ETF, expressed as a percentage of assets under management. For example, a 1.5% TER means you pay 1.5% per year from the value of your investment, whether the fund goes up or down. Over the long term, TER differences compound and can add up to thousands of euros.
Why are Romanian mutual fund fees high?expand_more
Many active mutual funds in Romania have TERs between 2% and 6% per year, significantly higher than passive ETFs, which are often around 0.1%–1.5%. These higher fees erode long-term returns, especially for patient investors.
ETF vs mutual fund: which is cheaper long term?expand_more
In general, passive ETFs are much cheaper than active mutual funds because of lower TER. Over a 10–20 year horizon, the cost difference compounds and can easily exceed the value of initial contributions.
Is manually replicating the BET index worth it vs an ETF or fund?expand_more
It depends on cost. An active mutual fund can have a 3–6% TER, while a BET ETF is between ~0.95% and ~1.5% per year. Manual replication removes the TER but adds the 16% dividend tax, possibly CASS and trading fees. For larger portfolios and high TER alternatives replication can save meaningful amounts; for small portfolios the simplicity of an ETF matters more. The calculator above shows where your break-even point is.
What is the commission difference between an ETF and manual BET replication?expand_more
The percentage commission is usually the same for an ETF and for manual replication. The real difference is the fixed component of the commission: one trade for the ETF vs ~10 trades to replicate the top 10 BET companies. On large portfolios this difference becomes negligible, but on small portfolios it can tip the balance toward an ETF.
Why replicate only the top 10 BET companies?expand_more
The top 10 BET companies cover the bulk of the index weight — around 90% of the exposure. Replicating only the top 10 avoids the small companies that enter and leave the index often (so fewer taxable SELL/BUY events) and means ~10 trades instead of ~20, while still keeping over ~90% of BET exposure.
What is BUY-only rebalancing and why does it matter for tax?expand_more
BUY-only rebalancing means you reduce drift from your target weights purely through new contributions, without selling existing positions. The advantage: it generates no taxable gains from selling. The SELL/BUY alternative rebalances more precisely but can trigger capital-gains tax.
What about the tax when selling the ETF?expand_more
When you sell an ETF you owe capital-gains tax, depending on the holding period and broker. It doesn't appear in the recurring annual cost, but it matters at liquidation. Manual replication with a BUY-only strategy defers this tax for as long as you don't sell.
How can I track the real cost of my investments?expand_more
With Anchorfolio, you can track your portfolio, fees, dividends and taxes in one place, and compare the cost of a mutual fund or ETF with manually replicating the BET index.
Sources
Tax rates reflect the legislation in force for 2026. BET index weights change periodically — check the official BVB source before investing.