Turnover ratio


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Turnover Rate

The ratio at which a fund or 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 in fees. It is calculated as the trading volume of the fund or portfolio as a percentage of the entire portfolio. See also: Prudent person rule.

Turnover ratio.

A mutual fund's turnover ratio measures the percentage of holdings that the fund sells, or turns over, in a year.

For example, if a stock fund manager has a portfolio of 100 stocks at the beginning of the year, sells 75 of them and buys 75 different stocks, the turnover rate of the fund is 75%.

Some investors look for funds with lower turnover ratios, since limited trading may help to minimize capital gains taxes and trading costs. However, a high turnover ratio can also produce strong returns, which can offset the added costs and produce a net gain.

References in periodicals archive ?
Since unit trust investing has become a much more popular choice for investors, it would certainly be of interest for investors to know how fund performance relates to fund's fundamental characteristics such as fund investment objectives, fund size, age, expense ratio, portfolio turnover ratio, initial service charge (load fee), fund riskiness and private/government fund status.
Rate of Return on Equity = Rate of Return on Assets x Financial Leverage = Operating Profit Margin Ratio x Asset Turnover Ratio x Financial Leverage
The paper examines the impact of ownership structure as well as dividend approach on the organizational productivity while using ownership structure variables; director's ownership, institutional shareholder's ownership, and individual shareholder ownership, and to measure the firm performance Return on Assets (ROA) was used as a variable and Dividend payout ratio, sales turnover ratio, growth rate and financial leverage was implemented to examine the study.
The portfolio turnover ratio, as a window into mutual fund time
Before the crisis, average total assets turnover ratio (X11) for industrial companies stood at 1,17, however it fell during 2007-2009.
(2013) considered market capitalization, value of traded stocks and turnover ratio as proxies for stock market development and applied causality test on time series data from 1986 to 2011 for Nigerian economy and concluded that stock market development do not have significant impact on economic growth in Nigeria.
"Spend on the playing squad subsequent to the yearend will see the wage bill, and the wages to turnover ratio, rise in 2015-16 to a level more consistent with the club's business plan."
The most important activity ratios include asset turnover ratio and inventory turnover ratio (Veronica & Anantadjay, 2014).
The tax drag will be greater for those funds that are actively managed and have a high turnover ratio. The turnover ratio of a mutual fund is measured as a percentage of the fund's holdings that have been sold and replaced during the prior year.
Despite their huge wage bill, their salary to turnover ratio - an accurate indicator of a club's health - is 55 per cent.
The turnover ratio is a measure of market liquidity given by the value of total shares traded divided by market capitalization.
Turnover ratio: This shows how fast the fund churns the portfolio.