Offer your thoughts or opinion on the input financial query or topic using your financial background.

How does Portfolio Turnover affect my investment?
As Kurt Vonnegut said, the way to make money is to be there when large amounts of money are changing hands and take a little for yourself; they'll never notice. That's what transaction costs are: when a fund buys or sells stocks a bit of the money goes to the folks who handle the transaction. When you personally buy or sell stocks a bit of the money goes to the broker in the form of a fee. (and, no, no fee brokers don't work for free; they just hide the fee by not getting you the best possible price). So frequent transactions (i.e., higher portfolio turnover) mean that those little bits of money are going to the intermediaries more often. That's what "higher transaction costs" refers to -- the costs are higher than in a fund that buys and sells less often. In short, those higher transaction costs are a consequence of higher turnover; nothing nefarious there.