##  [# Turnover Rate Definition](/etf-education-center/etf-glossary/turnover-rate) 

 

# Turnover Rate Definition

 

 

Learn the definition of turnover rate and other ETF terminology from the etf.com glossary.



 

 

 

 

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[By ETF Glossary](/authors/etf-glossary)

 Jan 16, 2024

 Edited by: ETF.com Staff

 

 

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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.

### Related Terms

[Exchange-Traded Fund](/etf-education-center/etf-glossary/exchange-traded-fund-etf)

 
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  ETF Glossary is etf.com’s collection of key terms and definitions related to exchange-traded funds. ETFs are investment funds that are traded on stock…   [View Bio](/authors/etf-glossary)

 



 

 


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