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Saving & Investing

Portfolio Turnover

Also called: turnover ratio, fund turnover

Portfolio turnover is the share of a fund's holdings traded in a year — 100% means the equivalent of the whole portfolio changed hands. High turnover generates trading costs the expense ratio doesn't capture and, in a taxable account, distributes realised capital gains you must pay tax on whether or not you sold anything. Index funds typically run under 10%; some active funds exceed 200%.

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