Not exceeding 1% management fee

In MJ's latest book UNSCRIPTED he talks about not exceeding a 1% management fee excluding interest charges. And to avoid funds where the total management fees including commissions, front loads and or 12b-1 fees exceed 1%. However if there was a fund at 1.2% but half the fee was an interest expense then this fund is still ok.

i found a REIT fund which the management fees are 0.85% and there is a buy/sell spreads of 0.25% which takes it to 1.1% .

My question is that 0.25% counted as a...

Not exceeding 1% management fee

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