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Portfolio Turnover Rate

   Also found in: Acronyms 0.02 sec.
Portfolio turnover rate
For an investment company, an annualized rate found by dividing the lesser of purchases and sales by the average of portfolio assets.
Portfolio Turnover Rate
The ratio at which a portfolio trades the securities in it. A higher turnover rate indicates active management; if it becomes very high, this may indicate that the broker or manager is trading securities for the sake of collecting more fees. It is calculated as the trading volume of the portfolio as a percentage of the entire portfolio. See also: Prudent person rule.
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For instance, statistics show that mutual fund managers have an average annual portfolio turnover rate of more than 100%.
Fund managers trot out "buy and hold" agenda by Sy Harding / Stockhouse
This higher portfolio turnover rate increases costs such as brokerage commissions and custodian fees on the portfolio transactions, which, again, may lower the NAV.
The mutual fund trading scandals: implications for CPAs and their ... by Carroll, Brian / Journal of Accountancy
Tax-Managed Funds Some equity mutual funds are "tax-managed" funds, which seek to minimize taxes to shareholders by maintaining a low portfolio turnover rate and considering taxes when buying and selling securities.
Investing in tax-efficient funds by Ellentuck, Albert B. / The Tax Adviser
 
 
 
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