Portfolio turnover

Portfolio turnover.

Portfolio turnover is the rate at which a mutual fund manager buys or sells securities in a fund, or an individual investor buys and sells securities in a brokerage account.

A rapid turnover rate, which frequently signals a strategy of capitalizing on opportunities to sell at a profit, has the potential downside of generating short-term capital gains.

That means the gains are usually taxable as ordinary income rather than at the lower long-term capital gains rate. Rapid turnover may also generate higher trading costs, which can reduce the total return on a fund or brokerage account.

As a result, you may want to weigh the potential gains of rapid turnover against the costs, both in your own buy and sell decisions and in your selection of mutual funds.

You can find information on a fund's turnover rate in the fund's prospectus.

References in periodicals archive ?
For example, regarding portfolio turnover and corresponding advisory fees, the SEC's posture is: Prove to us that your services are worth your fees -- you have too low portfolio turnover to merit such a fee
Portfolio turnover -- This is how often the stocks in a portfolio are replaced every year.
While doing this, it will also continue to monitor the effects of the repurchase programme and may consider the potential impact of such other measures on the fund's expense ratio, portfolio turnover and ability to achieve its objectives.
This study investigates the determinants of the portfolio turnover indexes of actively managed stock investment funds in the Brazilian market.
The study examines the effect of mergers and takeovers of 55 acquiring schemes on their performance, asset growth, expense ratio, portfolio turnover and asset size using Paired t-test and Wilcoxon test.
Cash holding and portfolio turnover are two areas where mutual fund firms give norms to fund managers.
Cash holding and portfolio turnover are two areas where mutual fund companies give clear guidelines to fund managers.
Portfolio turnover rate, which is a measure of how frequently assets within a fund are bought and sold by the managers, the range can vary.
The resource rates funds using an A-E financial strength system, beginning with an alphabetical list of exchange-traded and other closed-end growth, sector or international, municipal and corporate bonds, and other funds, analyzing factors such as fund type, expense ratio, overall investment rating, price, 52-week high, three-year total return, dividend yield, cash percentage, and portfolio turnover rate.
This move by MSCI would have resulted in significant portfolio turnover with expensive tax consequences for investors with narrowly defined international allocations.
The manager runs a small, concentrated portfolio of around 50 stocks and he sticks with his picks: Its portfolio turnover is under 10% a year.
The rank is an outcome of an objective and comparative analysis against various parameters, including: risk adjusted return, fund size, company concentration and portfolio turnover.