Making Money Minute with Ron Hiebert
Fees and Performance
When researching mutual funds, their turnover rate is one criteria that should be included on the list. This is the amount of buying and selling that takes place in a portfolio annually. Typically the higher the turnover the lower the returns. Over 15 years, almost a 1/3 of funds, that had a low turnover rate of 25% or less, were able to outperform the market. Among funds that turned over their portfolios twice a year, only 10% outperformed the market. The more you trade, the more it costs, and those fees have a dramatic impact on the bottom line.
