In the 1950s average mutual-fund turnover was 15%; by 2011 it was around 100%.
Such economies of scale as may have been reaped have certainly not all been passed on to fund investors.Another favourite fact of Mr Bogle's is that mutual-fund turnover has increased from 16% four decades ago to 110%, meaning that the average fund holds a stock for just 11 months.
Japanese mutual funds' annual turnover rates average more than 80%, against 20% in the U.S. "With wraps, we are teaching them to think long-term," says Imoto, 41.
Along with bonds, there would be individual stocks that you plan to keep, dividend-paying stocks, low-turnover mutual funds and passive investments like index funds or exchange-traded funds.
The quandary was an acutely stressful version of the ancient mutual fund issue of turnover.
But he noted that there might be good reasons for the differences, including "the greater frequency of shareholder redemptions in a mutual fund, the higher turnover of mutual fund assets, the more burdensome regulatory and legal obligations, and higher marketing costs".
It fails to consider two very important factors: portfolio turnover and mutual fund holding periods.
For example, the turnover of mutual fund portfolios in those days was centered around maybe 20% per year.
Turnover For mutual funds, a measure of trading activity during the previous year, expressed as a percentage of the average total assets of the fund.
If there is space left in your sheltered accounts, you would use it for high-turnover stock mutual funds that throw off short-term capital gains, real estate investment trusts whose dividends are also taxed at ordinary rates and individual stocks you plan to trade a lot.
Roy Weitz, who runs Fundalarm.com, a mutual fund watchdog, emphasized management turnover as a possible reason for selling a fund.
