Glossary: Churn

In a financial context, churn refers to the frequency at which a share portfolio or investment fund sells the securities in the portfolio to realise cash in order to buy more securities. It’s also a way unethical brokerage firms “churn” clients’ accounts by trading securities very actively in order to increase brokerage commissions rather than customer profits, as brokers’ income is directly related to the volume of trading they undertake on customers’ behalf.

Relevant to: Stocks & shares

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