Did You Know? | How to use Portfolio Turnover

Portfolio Turnover measures the frequency of trading a fund manager undertakes, compared to the NAV. It can be a useful metric for examining whether levels of trading are too high – if excess trading is occurring, and hence incurring high costs without high returns.

APM lets you view Portfolio Turnover on a Monthly basis, a Yearly basis, or over any custom range of time.

Where is it?

Go to Portfolio Summary

  • Examine the values at the top right-hand corner of the page.
  • Two values:
    • Turnover (this is a custom date value – you can select the time period you wish to examine)
    • Yearly Turnover

For an illustration of where to find these values, see the top right-hand corner of a demo Portfolio Summary page below. The Turnover value is 5.01%, and the Yearly Turnover value is 48.86%.

What specifically do these numbers mean?

The Turnover values have different interpretations, depending on the dates you wish to examine.

For the Turnover figure (custom date):

To select your time period:

  • Go to Portfolio Summary
  • Select the relevant Fund
  • Choose a desired Month (e.g. Oct 2017) or Months (e.g. Aug 2017 to Oct 2017)
  • Press the Green button

What these mean

  • If the period you select is the current month (e.g. November 2017), then the value will show Turnover from 1st November to t-1 date.
  • If the selected period is, for example, May to June, this will show Turnover from May 1st to June 30th.

For the Yearly Turnover figure:

Turnover is shown from the past 1 year to t-1 date. For example, if you look at Yearly Turnover on January 20th, it will will show the Turnover from January 21st (previous year) to January 20th (current year).

How are these figures calculated?

A time horizon is selected.

We take either the Buy Side amount of securities purchased or the Sell Side amount of securities sold for each day – whichever is the lower non-zero value. We then add each daily value up over the entire time period.

This figure is then divided by the Average NAV of this period. This is calculated by taking the sum of NAVs and dividing them by the number of days in this period.

So, for example: January 2017

  • Total Sell is lower than Total Buy on days: Jan 2nd-6th, 9th-13th
  • Total Buy is lower than Total Sell on days: Jan 16th-20th, 23rd-27th
  • No Buys or Sells occur on days: Jan 14th, 30th-31st
  • The total NAV (NAV for each day, added together): 1,000,000 USD

Then the calculation is:

= [(Total Sell (Jan 2-6, 9-13) + Total Buy (Jan 16-20, 23-27) + 0) x 100] / [1,000,000 / 20]

= [Total Buy/Sell value x 100] / 50,000

More information

For any further details on our Portfolio Turnover values, check out our online documentation.

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