How Important Is Turnover?
Helpful at the extremes, less helpful elsewhere.
Last year I examined the predictive power of a number of data points, but I didn't test turnover. Because many investors use it in their selection process, I thought I'd put turnover through the paces to see where it shakes out versus the other data points.
I'll walk you through what turnover means, how I tested it, what the tests show, and finally, what turnover tells you about a fund's strategy.