Turnover Rate Definition
Learn the definition of turnover rate and other ETF terminology from the etf.com glossary.
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Learn more about Turnover Rate
Turnover Rate in ETFs is a crucial metric reflecting the frequency of buying and selling assets within the fund's portfolio. A lower turnover rate signifies a buy-and-hold strategy, reducing transaction costs and minimizing capital gains distributions. ETFs with lower turnover rates are often favored by investors with a long-term horizon, as they align with a passive investment approach. This measured approach to portfolio management enhances tax efficiency, offering investors a stable and cost-effective means of participating in the market while adhering to a disciplined and low-impact investment strategy.
