FTB-C000156 / Formula component

Index Turnover

Index turnover measures the amount of constituent weight or notional that changes between two portfolio states under a declared convention.

Also known asrebalance turnoverone-way turnover

Intermediate Formula defined 10 linked topicsPublished

Definitions

In plain terms

It helps estimate implementation activity when weights or members change.

Technical

The metric requires pre and post states at comparable prices, one-way or two-way convention, cash treatment, corporate-action normalization, rounding, and rebalance boundary.

Scope

Turnover is not transaction cost and providers can report different conventions.

Formula

Turnover_one_way = 0.5 * sum(abs(w_new - w_old))
LaTeX: T=\frac{1}{2}\sum_i|w_i^{new}-w_i^{old}|
SymbolMeaningUnit
w_newpost-rebalance constituent weightdecimal weight
w_oldpre-rebalance comparable constituent weightdecimal weight

Output unit: decimal portfolio weight

Examples

  • A governed index record identifies index turnover with its applicable methodology version, effective time, source, and units.

Common misconceptions

  • Index Turnover does not have one universal implementation without the named index methodology, data cutoff, and governance context.

Concept relationships

Prerequisites

Related

Required by

Where this concept is used

Evidence and governance

  1. FTSE Russell Index Policy and Methodology Library FTSE Russell, London Stock Exchange Group · first party methodology

    Supports: preferred label, short definition, technical definition, formula

    Limits: The library links multiple documents with separate versions and applicability; the effective document must be identified.

  2. Fintech Builder Glossary Definition Contract The Fintech Builder · internal governed contract

    Supports: variant distinction

    Limits: Defines governed platform behavior rather than claiming these policies are universally prescribed by external McClellan methodology.

Reviewed by
fintech-builder-owner-approved
Last reviewed
2026-07-27
Next review
2027-07-27
Record status
published