trades cost
If a fund has a portfolio turnover rate of 80%, and for every sell transaction the stock is replaced via a buy transaction, a total of 160% of the portfolio value will be transacted each year. For trading costs of 0.75% per transaction, the annual trading costs amount to (1.6)(0.75%) = 1.20% of the portfolio value. If one adds a 0.3% management fee to this amount, the total becomes 1.50%.