Portfolio turnover rate


Portfolio turnover rate

For an investment company, an annualized rate found by dividing the lesser of purchases and sales by the average of portfolio assets.

Portfolio Turnover Rate

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