There was a time when I sought the Northwest Passage. How to turn lead into gold. Capturing Yeti. Ah, the dreams of youth.
After many years of failures, I conceded. Try as I might, there was no way to calculate a stock fund’s trading costs from its asset size, turnover, and portfolio holdings. The error term dwarfed the estimate. The best that the measurement could do was to suggest that large funds that rapidly traded small companies incurred relatively high trading costs. Well, great. We knew that already.
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John Rekenthaler does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.