High turnover

  • The PRATER process requires rebalancing on a weekly basis and has higher turnover than conventional portfolios.
  • A simple two asset model will typically turn over 70% of net assets a year. A model with five asset classes may turn over 300% a year.
  • Increased turnover will clearly lead to increased operational risk.
  • In our opinion the extra returns are worth it, but investors need to be forewarned.