Define: Portfolio Turnover

UK Accounting Glossary

Definition: Portfolio Turnover



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Full Definition of Portfolio Turnover


Portfolio turnover refers to the measure of trading activity in a fund’s portfolio. The portfolio turnover rate is a percentage of the portfolio that is bought and sold in exchange for other stocks. The portfolio turnover is calculated by looking at the amount of new securities purchased and the amount of securities sold over a particular period. Whichever amount is less gets divided by the total net asset value of the fund, creating the portfolio turnover rate. A fund with a 50 per cent portfolio turnover, for example, replaces half of its holdings. A growth fund is an example of a fund that tends to have a high portfolio turnover rate since there is an abundance of purchases and sales. A firm with a high portfolio turnover rate will typically incur more transaction costs than one with a low portfolio turnover rate.


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Definition Sources


Definitions for Portfolio Turnover are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 6th February 2020.