Methodology note
Turnover measures: the lesser of purchases and sales
Portfolio turnover measures how much of a portfolio was traded over a period. The two-sided measure divides the lesser of purchases and sales by the portfolio's value, leaving one-way flows out. Purchases of 570 and sales of 380 on a 1,000 book give 38%.
turnover_limitThree measures
- Turnover ratio: the lesser of purchases and sales in the window, over NAV.
- Purchase ratio: purchases alone, over NAV.
- Trade count: the number of executions in the window.
The window is stated in days and governed with the rule.
Why the lesser
Taking the lesser of purchases and sales strips out one-way flows. A fund that invests a large subscription buys a lot but has not turned its portfolio over. A fund paying redemptions sells without replacing.
The lesser figure measures the part of the trading that replaced one holding with another.
Which transactions count
By default only purchases and sales count. Subscriptions, redemptions, internal transfers and corporate actions are categorised and left out unless the rule names them.
The categories come from the organisation's mapping of transaction types. A type string nobody has mapped withholds the compliant reading until it is mapped (TRANSACTION_TYPES_UNMAPPED).
Pitfalls
Turnover is measured from the transaction record, not from positions. Without that record the rule is not evaluated (TRANSACTION_HISTORY_UNAVAILABLE), because position changes mix trades with price moves.
The registry's worked cases divide by current NAV. A policy that defines turnover against average NAV over the period needs that recorded as an author decision.
In the example
Four trades fall inside a 365-day window ending 30 June 2026: purchases of 250, 200 and 120, and one sale of 380. The lesser side is the 380 of sales.
That is 38% of the 1,000 book. A 50% cap leaves 12 points of headroom for the rest of the window.
Worked example
Over a 365-day window, purchases of 570 and sales of 380 on a 1,000 book: the lesser, 380, is 38% turnover, inside a 50% cap.
Rule template:turnover_limit measure: turnover_ratiowindowDays: 365
Bounds: hard max 50%
| Holding | Market value |
|---|---|
| Equity holdings | 600 |
| Bond holdings | 400 |
| Date | Type | Amount |
|---|---|---|
| 20 November 2025 | buy | 250 |
| 10 February 2026 | buy | 200 |
| 5 March 2026 | sell | 380 |
| 18 May 2026 | buy | 120 |
| Group | Status | Value | Bounds | Headroom to the hard bound | Code |
|---|---|---|---|---|---|
| Turnover (365d) | Compliant | 38% | ≤ 50% | 12% | WITHIN_LIMITS |
WITHIN_LIMITS: The measured value sits inside every approved bound.
Computed at build time by the Acclimetry rule engine (backend commit 8197063); the same code runs in the product.
Questions
Is turnover annualised?
Not automatically. The measure covers the stated window, so for an annual cap use a 365-day window.
Do internal transfers count as trading?
Not by default. Internal transfers are categorised and left out unless the rule names them.