Own a piece of many companies. For a small $ amount you gain a great ... Rate of return can be higher but it is uncommon for it to be higher than an index for ...
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Financial Planning for Women
Jean Lown, FCHD Dept., USU
PowerPoint by Tiffany Smith
Students from the Advanced Family Finance Class
Management Fees are lower.
Low turnover rate
10%-12% or slightly lower return on investments depending on which index
Higher management fees.
Higher turnover rate
Rate of return can be higher but it is uncommon for it to be higher than an index for long periods of timeIndex vs. Actively Managed Funds
Turnover ratio: measures how long a fund holds on to the stocks it buys. If a mutual fund trades often, it will have a high turnover ratio. It is better to have a lower turnover rate since every time it buys and sells, the stock incurs cost and the more cost, the higher the capital gains will be taxed.
Bottom line: the lower the turnover rate the better.