Page 1
Page 1
Started By
Message

turnover rate and roth ira

Posted on 7/11/14 at 6:35 pm
Posted by ragacamps
Member since Jan 2011
2997 posts
Posted on 7/11/14 at 6:35 pm
Again im as green as green is. I am interested in a fidelity fund to start my roth. Im assuming that turnover rate doesn't really matter when the fund is in a tax free shelter.

Is this correct??
Posted by PlanoPrivateer
Frisco, TX
Member since Jan 2004
2788 posts
Posted on 7/11/14 at 8:26 pm to
Not an expert but I believe turnover rate is only one consideration that is part of total return. A mutual fund, just like you or me, will encounter higher expenses if we trade a lot. Also, a lower turnover rate may indicate a less active management style. For example, an index fund. If a mutual fund has a high turnover rate and a high expense but beats the crap out of a low turnover, low expense fund in total return then it still wins in the overall return game.
Posted by ragacamps
Member since Jan 2011
2997 posts
Posted on 7/11/14 at 9:00 pm to
I should have asked it like this.

Roth ira

Pros and cons of contributing to a fund with a high turnover rate
Posted by Sigma
Fairhope, AL
Member since Dec 2005
3643 posts
Posted on 7/12/14 at 6:43 am to
Correct. A higher turnover rate leads to higher capital gains taxes. In a Roth, these are irrelevant. Same reasoning applies for a fund that spits out a lot of distributions.

ETA: but this is only part of what contributes to the expense ratio
This post was edited on 7/12/14 at 6:45 am
first pageprev pagePage 1 of 1Next pagelast page
refresh

Back to top
logoFollow TigerDroppings for LSU Football News
Follow us on Twitter, Facebook and Instagram to get the latest updates on LSU Football and Recruiting.

FacebookTwitterInstagram