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Mutual Funds

Turnover

To understand the concept of turnover, imagine a fund that holds a diverse portfolio of assets. The turnover ratio is calculated by dividing the total value of transactions, both buying and selling, by two. This number is further divided by the fund's total holdings. Essentially, the turnover ratio measures the frequency at which a fund is buying and selling its assets. This can give us insight into the fund's trading activity and potential costs incurred.

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