According to research from European fund manager SMA Gestion, most active managers “turn” their portfolio on average approximately once a year, which means that the holding period of investments does not exceed one year. Multiple studies (from Sharp in 1991 to Elton in 1993 to French in 2008) show that there’s a strong correlation between portfolio turnover and a fund’s net return. The higher the turnover, the worse the performance. Why exactly managers are driven to churn their portfolios in such a way, when it should be their aim to minimise trading and protect investors from sentiment driven swings, is…
Time Is The Investors’ Best Friend
Rupert Hargreaves
Sign up now and get our in-depth FREE e-books on famous investors like Klarman, Dalio, Schloss, Munger Rupert is a committed value investor and regularly writes and invests following the principles set out by Benjamin Graham. He is the editor and co-owner of Hidden Value Stocks, a quarterly investment newsletter aimed at institutional investors. Rupert owns shares in Berkshire Hathaway. Rupert holds qualifications from the Chartered Institute For Securities & Investment and the CFA Society of the UK. Rupert covers everything value investing for ValueWalk
