Many people equate commissions, which are fairly easy to determine, with transactions costs.
Unfortunately, much greater costs are involved in equity block trading. In fact, commissions represent only the tip of the iceberg. Other expenses such as market impact, timing costs, and lost opportunity costs are hidden below the surface and are much harder to quantify. In a comprehensive study of millions of block trades by dozens of institutional money managers, Plexus found that commissions represented the smallest component of transactions costs. No wonder managers have difficulty keeping up with index funds.