Your Portfolio Turned Over 140% of Its Value This Year. Here's What That Actually Costs
5 min read
Loading...
5 min read
You check your brokerage app at year end and see one number: total value traded through the year, Rp140,000,000, against a portfolio that averaged Rp100,000,000 over the same period. That works out to a portfolio turnover ratio of 140%. On its own, the number is abstract. Multiply it by what a broker actually charges per trade, and it turns into a real cost in rupiah, one that a buy-and-hold investor holding the same average value almost never pays.
Portfolio turnover ratio is the standard way fund analysts and portfolio managers measure how much trading activity happened in a portfolio over a period, usually a year, relative to the portfolio's own size.
Lesser of (Total purchases, Total sales) ÷ Average portfolio value
The "lesser of" matters. If you sell a stock and buy a different one with the proceeds, that is one round trip, not two separate events to add together. Using the smaller of the two totals avoids double counting a swap as if it were twice as much trading as it actually was. A portfolio that replaces its entire holdings once during the year, sells everything, buys different things, scores a turnover ratio of roughly 100%. Above that, like the 140% example above, means the portfolio effectively got replaced more than once. A ratio of 10% to 20% usually signals a portfolio that mostly sits still, aside from the occasional top-up or rebalance.
This is a different question from how wide the bid-ask spread is on a single trade or how much cash is sitting idle in your RDN. Turnover ratio is about how often you trade over a whole year, not what any one trade costs or what you're not earning on uninvested cash. All three drag on returns in different ways, and this one is the easiest to overlook because it never shows up as a single line item anywhere.
Here is what that percentage costs on an IDX portfolio that averaged Rp100,000,000 in value through the year, using a typical online broker's published 2026 fee schedule: about 0.17% on the buy side, and about 0.27% on the sell side, where the sell-side figure bundles the 0.1% final tax every IDX sale carries, the roughly 0.04% IDX/KPEI/KSEI exchange levy, and the broker's own commission.
| 140% turnover (active trading) | 10% turnover (mostly holding) | |
|---|---|---|
| Value bought in the year | Rp140,000,000 | Rp10,000,000 |
| Value sold in the year | Rp140,000,000 | Rp10,000,000 |
| Buy-side cost (~0.17%) | Rp238,000 | Rp17,000 |
| Sell-side cost (~0.27%, tax + levy + commission) | Rp378,000 | Rp27,000 |
| Total transaction cost | Rp616,000 | Rp44,000 |
| Cost as % of Rp100,000,000 average portfolio | 0.62% | 0.04% |
The gap is about 0.58 percentage points a year, just from how often the two portfolios traded, before either one's actual investment performance is even considered. Held over ten years, a 0.58 percentage point annual drag compounds into a meaningfully smaller ending balance, even if both portfolios picked exactly the same stocks.
The Rp616,000 figure above only covers commission, the exchange levy and the final tax. It does not include the bid-ask spread, the gap between the highest price a buyer will pay and the lowest price a seller will accept, which you pay on every single trade regardless of what your broker charges. On a heavily traded stock like Bank Central Asia (BBCA), that spread was around 0.4% as of mid-August 2026. On a thinly traded lapis dua stock, the same spread can run past 7%.
A 140%-turnover portfolio concentrated in illiquid small caps is not paying the Rp616,000 estimated above. It is paying that plus a spread cost that can dwarf it, on every single one of those trades. Turnover ratio tells you how many times you crossed that gap during the year; the spread post linked above tells you how wide the gap actually was each time.
This isn't just an individual-investor problem. It's a big part of why actively managed funds tend to cost more to hold than index funds, beyond the headline expense ratio. Morningstar's own fund data put the average portfolio turnover ratio for actively managed US equity funds at 63% in 2019. The Vanguard 500 Index Fund, which simply holds the S&P 500's constituents, reported a turnover ratio of just 2% for its most recent fiscal year, per its own April 2026 summary prospectus. An index fund's holdings barely change year to year, since the index itself barely changes; an actively managed fund is, on average, replacing well over half its holdings every single year, and every one of those trades carries a transaction cost that isn't the same thing as the expense ratio printed on the fact sheet.
The same math applies whether the trading is being done by a fund manager on your behalf or by you, directly, in your own brokerage account.
You don't need a fund's annual report to find your own turnover ratio. Open NetWort's Holdings page, pull your total buy and sell value for the year from your transaction history, and divide the smaller of the two by your average portfolio value over the same period. Multiply that percentage by your own broker's actual buy and sell fee schedule, not the 0.17%/0.27% range used above, since real rates vary by broker, to see what your own trading frequency is actually costing you before you place the next trade.