Thats hard to believe. Their trading costs are not reported as a line item and thus appear costless to the customer. Maybe 50 years ago their commissions were smaller but thats not true today. Their biggest trading disadvantage is their size. They pay up to move big blocks of stock. When I buy and sell $5,000 to $15,000 of shares, its just a flea on an elephant.
I found some academic research that shows an average of 0.8 % of assets per year.
http://finance.wharton.upenn.edu/~rlwctr/papers/9927.pdf
I can't imagine moving the price of a stock by 1 % when I buy it.
That is in addition to line-item costs (the expense ratio) starting with the management fee.