Turnover

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Turnover

As an Investor uses the term. The percentage of shares being sold and being replaced by a fund manager. A lower turnover of shares indicates that the fund manager holds the securities for a longer period. Higher turnover’s result in more transaction costs from commissions and other fees that may eat away at the shareholders returns. Turnover costs are not included in the funds expense ratio and must be considered in addition to these costs. Warning lights are flashing when a fund manager has poor returns and a high turnover rate. ^[1]

Turnover shows how often a fund trades its securities. A rate of less than 30% usually shows the fund has a buy and hold strategy. A high turnover of more than 100% shows the manager trades frequently. ^[2]

13c turn from "action of rotation," "to rotate, revolve, expression to turn (something) into (something else). Meaning "beginning of a period of time" is attested from 1853. Meaning "spell of work" is from late 14c.; that of "an individual's time for action, when these go around in succession" is recorded from late 14c. Phrase done to a turn (1780) suggests meat roasted on a spit. The turn of the screw (1796) is the additional twist to tighten its hold, sometimes with reference to torture by thumbscrews. [1]

14c over from sense of finished. Over-the-counter is attested from 1875, originally of stocks and shares. [2]

References

1. ↑ Mutual Funds: An Introduction to the Core Concepts by Dr. Mark Mobius ISBN-10: 0470821434 pg80
2. ↑ Mutual Funds: An Introduction to the Core Concepts by Dr. Mark Mobius ISBN-10: 0470821434 pg45