The savvy physician-investor is already aware of upfront fees that come hand-inhand with their mutual funds (eg, management fees, distribution fees, and other expenses), and they know to keep tabs on them. However, what many investors don't realize is that there's a hidden charge, even on the most inexpensive funds, that can add up: transaction costs. According to a recent article in SmartMoney, all funds—even index funds—tack on brokerage costs when managers buy and sell stocks. These costs aren't included in the expense ratio (ie, the fund's total annual operating expenses), but are taken from a fund's assets. The article cites information from fund tracker Lipper, which found that Fidelity Discovery, for example, racked up $65 in brokerage commissions for every $10,000 invested—nearly doubling the fund's published expenses. Lipper also found 51 domestic equity funds with trading costs of more than 1%. There are many reasons why brokerage commissions may run high. Some funds charge more for fast execution or more liquidity, says SmartMoney, while other big funds spread their trades among several firms to remain below the competition's radar. Whatever the reason, the investor needs to keep an eye on portfolio turnover.