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How to see a mutual fund's average holding period?
Additionally, can fund outflows affect a fund's turnover stats?
For example, if the fund usually has 5% turnover, but then gets hit by a 20% outflow, would their turnover (if they had to sell 20% of their positions) then go to 25%?
Additionally, can fund outflows affect a fund's turnover stats?
For example, if the fund usually has 5% turnover, but then gets hit by a 20% outflow, would their turnover (if they had to sell 20% of their positions) then go to 25%?
Thanks!
Fund outflows can impact turnover stats. In your example (5% turnover, 20% outflow), the arithmetic might not be this straightforward. Available cash and inflows also need to be taken into consideration.
Welcome aboard @LogicalInvestor : Average holding , I don't know of anyone tracking this. Turnover , yup On what time table I don't know . Sorry I can't be of more help
M* Fund Reports include a fund's turnover rate for the past 10 calendar years. You may be able to access M* Fund Reports online via your public library system. I'm not aware of any websites which provide annual turnover statistics spanning multiple years.
"The turnover ratio measures fund yearly trading activity. It is calculated by taking the lesser of purchases or sales, dividing that number by average monthly net assets. Securities with a maturity of less than a year are not considered."
Fund reports show the report period turnover plus annual those for several FYs. Anything more may have to be calculated manually.
Suppose one knew all those turnover numbers from last 10 years annually. Assume also no inflows of outflows. What would you then try to divine from those numbers? Is there a different way of getting that place?
@Devo, the OP question was fund's average holding period. Annual turnover (if stable) sort of indicates that.
100% turnover means the entire portfolio is changed in 1 year. 50% turnover means that about half the portfolio is changed in 1 year, or once in 2 years.
Problem may be in averaging widely different turnovers turnovers.
Also, if there is a change in portfolio manager, then the turnover that year is typically high. Most new managers want to start fresh as their clock starts when they takeover until they are promoted or fired.
The way turnover is defined, the effect of inflows or outflows is reduced. So, in an extreme case, say, there are only redemptions in a bad year, but no purchases, then turnover would be 0%. IMO, that is a flaw in the definition.
Thanks @ybb. Great points. To truly open the veil behind any fund is so difficult. I read somewhere that Buffett below the top 10-15 stocks rotates the portfolio at a very high rate. Have not checked tbh. I don’t know yet the healthy benchmark. What you are suggesting goes one step further that the formula itself is deficient. Back to square one on how to dissect portfolios smartly.
M* Fund Reports include a fund's turnover rate for the past 10 calendar years. You may be able to access M* Fund Reports online via your public library system. I'm not aware of any websites which provide annual turnover statistics spanning multiple years.
I'm a "M* Investor" subscriber. They only show the last year's turnover on https://investor.morningstar.com/ and the standard Morningstar site. Am I missing something?
M* Fund Reports include a fund's turnover rate for the past 10 calendar years. You may be able to access M* Fund Reports online via your public library system. I'm not aware of any websites which provide annual turnover statistics spanning multiple years.
I'm a "M* Investor" subscriber. They only show the last year's turnover on https://investor.morningstar.com/ and the standard Morningstar site. Am I missing something?
What is "enhanced" is M*'s revenue stream, as it continues to move features from low/no cost retail investor services to high cost institutional services.
What is "enhanced" is M*'s revenue stream, as it continues to move features from low/no cost retail investor services to high cost institutional services.
And I wonder if the product will get any better IT support at those prices than it did when the plebes had access to it.
If they finally get rid of the portfolio feature, I wonder how many people would actually have a reason to look at their web page ever again. Maybe they don't need the page views to make advertising money now.
Comments
For example, if the fund usually has 5% turnover, but then gets hit by a 20% outflow, would their turnover (if they had to sell 20% of their positions) then go to 25%?
Thanks!
In your example (5% turnover, 20% outflow), the arithmetic might not be this straightforward.
Available cash and inflows also need to be taken into consideration.
You may be able to access M* Fund Reports online via your public library system.
I'm not aware of any websites which provide annual turnover statistics spanning multiple years.
Fund reports show the report period turnover plus annual those for several FYs. Anything more may have to be calculated manually.
https://icfs.com/financial-knowledge-center/turnover-ratios-and-how-compute-them
100% turnover means the entire portfolio is changed in 1 year.
50% turnover means that about half the portfolio is changed in 1 year, or once in 2 years.
Problem may be in averaging widely different turnovers turnovers.
Also, if there is a change in portfolio manager, then the turnover that year is typically high. Most new managers want to start fresh as their clock starts when they takeover until they are promoted or fired.
The way turnover is defined, the effect of inflows or outflows is reduced. So, in an extreme case, say, there are only redemptions in a bad year, but no purchases, then turnover would be 0%. IMO, that is a flaw in the definition.
I was referring to M* Investment Research Center¹ to access fund reports via the public library.
I should have mentioned this in my prior post.
¹ "enhanced" database experience coming in September.
If they finally get rid of the portfolio feature, I wonder how many people would actually have a reason to look at their web page ever again. Maybe they don't need the page views to make advertising money now.