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Definition: In mutual funds, it's the percentage of total shares in the portfolio that are traded in a given period (usually a year).
TeenAnalyst Advice: Investors prefer mutual funds with lower turnover rates because they have lower fees than those with higher turnover rates. Also, if a mutual fund is constantly buying and selling shares, the investor will face a lot of short-term capital gains, which will hurt them on their taxes.
As investors, we want to stick to buy and hold strategies...so we would hope our mutual funds do the same.
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