Calculating Total Transaction Costs in Rebalancing Portfolio

As a portfolio manager at XYZ Wealth Management, you are tasked with rebalancing multiple client portfolios at the end of the quarter. Among several factors, understanding transaction costs is critical for maintaining overall portfolio performance. Transaction costs comprise direct costs such as brokerage fees and indirect costs such as market impact and opportunity costs. Your client’s portfolio is heavily weighted towards technology stocks, and you are considering a substantial reallocation towards diversified equities.

After analyzing the data, you find that the execution cost for transitioning from technology to diversified equities will include a fixed brokerage fee for each trade, which is quoted to be 1.5% of the trade value. Additionally, the expected market impact for the rebalancing that requires liquidating technology stocks is estimated to be 0.3% of the total trade value. If the total value to be reallocated is $1 million, what total transaction cost would you bear for this reallocation?