Portfolio Turnover and Mutual Fund Strategies

Portfolio turnover refers to the frequency with which changes are made in a fund's portfolio. It is calculated by taking the lower of the total of new stocks purchased or sold over 12 months, divided by the fund's average assets under management (AUM).

A high portfolio turnover indicates that there are frequent changes being made in the fund's portfolio, similar to how Sudha frequently buys and sells stocks.

Sudha is more likely to have a high portfolio turnover as she buys and sells stocks frequently.

<p>If a mutual fund frequently churns its portfolio, it means that there are frequent changes being made in the fund's portfolio, similar to how Sudha frequently buys and sells stocks.</p> Signup and view all the answers

<p>Sudha's investment portfolio will see frequent changes, resulting in a high portfolio turnover. On the other hand, Shikha's portfolio will remain mostly unchanged over time.</p> Signup and view all the answers