Mutual fund turnover ratio

The mutual fund turnover ratio is a measure of how frequently assets within a mutual fund are bought and sold by the fund managers. Fund turnover affects fund trading costs and can impact the realization of capital gains.

Calculation
The ratio is calculated by taking either the total amount of new securities purchased or the amount of securities sold - whichever is less - over a particular period, divided by the total net asset value (NAV) of the fund.


 * Example: The Vanguard Total International Index fund reports the following purchases and sales of stock during the 2017 fiscal year. Note that in-kind purchases and sales are not included in the turnover calculation. In this calculation, portfolio sales, being the lesser transaction, is used as the numerator.