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.
6 equity mutual funds offer over 25% CAGR in five years
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