Count both directions before applying each cost
Enter purchases as positive quote-currency notionals and sales as negative notionals. Let B be total purchases, S the absolute total of sales, and A average NAV over the same period. Two-way activity is (B + S)/A; lesser-side turnover is min(B,S)/A. Modeled cost is Σ(abs(notionalᵢ) × cost_bpsᵢ/10,000), and cost drag is that total divided by A. Multiply ratios by 100 to display percentages. Each trade can have a different assumed cost rate.
A purchase and sale with different fee rates
Suppose average NAV is 100,000. A purchase of 20,000 has an entered cost of 10 basis points, and a sale of 15,000 has a cost of 20 basis points. Their costs are 20 and 30, totaling 50. Two-way activity is 35%, lesser-side turnover is 15%, and modeled cost drag is 0.05% of NAV. The example demonstrates why applying one fee to only the net purchase amount would miss much of the activity.
Keep activity accounting separate from net returns
These explicit conventions are not a claim to reproduce a regulatory fund-turnover filing. Average NAV, trade coverage, and the measurement period must match. The model only includes spread, impact, or other execution components if they are already represented in each entered basis-point assumption; do not deduct the same cost twice from an already net return series. Taxes, financing, and changing capital are separate inputs to a fuller performance analysis. Trading more can increase modeled costs without proving whether the underlying strategy adds value.