Investment term of the day: portfolio turnover

Portfolio turnover measures how frequently fund managers buy and sell assets within a portfolio. The measurement is usually reported over a twelve-month period.

A low turnover figure would indicate the fund has a buy-and-hold strategy whereas a figure of more than 100% indicates the fund’s strategy involves buying and selling securities at a faster pace. A turnover ratio of 100% does not necessarily mean that all assets have been traded within the defined period.

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