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If your fund's turnover ratio is too high, watch out

Go with fund managers who are able to produce good returns with a relatively low turnover

Sanjay Kumar Singh 

The turnover ratio tells you how much a fund manager churns his portfolio. A ratio of 100 per cent means the manager holds stocks within his portfolio for one year on an average. Remember, there is a cost to trading. If the manager’s hectic buying and selling does not work, the fund would have incurred a cost without commensurate gain.  Prefer funds with relatively lower turnover ratio and a sound record. It indicates the manager is convinced about the stocks he has bought and is willing to wait till his investment ideas work out.  A ratio of around 30 per ...

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If your fund's turnover ratio is too high, watch out

Go with fund managers who are able to produce good returns with a relatively low turnover

Go with fund managers who are able to produce good returns with a relatively low turnover The turnover ratio tells you how much a fund manager churns his portfolio. A ratio of 100 per cent means the manager holds stocks within his portfolio for one year on an average. Remember, there is a cost to trading. If the manager’s hectic buying and selling does not work, the fund would have incurred a cost without commensurate gain.  Prefer funds with relatively lower turnover ratio and a sound record. It indicates the manager is convinced about the stocks he has bought and is willing to wait till his investment ideas work out.  A ratio of around 30 per ... image
Business Standard
177 22

If your fund's turnover ratio is too high, watch out

Go with fund managers who are able to produce good returns with a relatively low turnover

The turnover ratio tells you how much a fund manager churns his portfolio. A ratio of 100 per cent means the manager holds stocks within his portfolio for one year on an average. Remember, there is a cost to trading. If the manager’s hectic buying and selling does not work, the fund would have incurred a cost without commensurate gain.  Prefer funds with relatively lower turnover ratio and a sound record. It indicates the manager is convinced about the stocks he has bought and is willing to wait till his investment ideas work out.  A ratio of around 30 per ...

image
Business Standard
177 22