Annual Turnover

Annual Turnover is the percentage of a fund’s annual trading volume compared to its assets. It is adjusted for the inflow and outflow of cash into the fund within the period.

Generally speaking, index funds and ETFs have lower annual turnovers while some mutual funds may have high annual turnovers. It is not clear whether a high annual turnover is good for investors or not, but it is certain that a high annual turnover would mean higher expenses which would cost an investor more.