Funds & wrappers
Portfolio turnover
How much of a fund’s portfolio is bought and sold in a year.
How it works
100% turnover implies the whole portfolio was replaced during the year. Index funds typically run in the single digits; some active funds exceed 200%.
High turnover means higher transaction costs and, in taxable accounts, more realised gains distributed to holders.
Related terms
- Transaction costsThe trading costs a fund incurs inside the portfolio, on top of its stated expense ratio.
- Expense ratioThe annual percentage of your money a fund takes to cover its running costs.
- Capital gains taxTax on the profit made when you sell an investment for more than you paid.
- Active managementChoosing holdings deliberately in an attempt to beat a benchmark.
More in Funds & wrappers
- Premium and discount
- Performance fee
- Private equity
- Net asset value
- Synthetic ETF
- Mutual fund
- Target-date fund
- Leveraged ETF
All 25 Funds & wrappers terms · The full glossary, 433 terms
Educational reference only. Nothing here is investment advice or a recommendation to buy or sell anything, and tax treatment depends on your own circumstances and the country you are in.