His long-term outlook results in low portfolio turnover - an average of 15 to 20 percent a year.

Picking funds based on low portfolio turnover is "greatly overstressed," he added.

It has had a portfolio turnover of 136 percent since 1990.

Because they have low portfolio turnover, index funds are also more tax-efficient.

They tend to have low portfolio turnover, and to buy stocks that pay small dividends - or none at all.

The annual portfolio turnover of many domestic equity funds is 100 percent or more.

Shareholders in both funds could expect portfolio turnover to exceed 100 percent, their prospectuses state.

The low portfolio turnover that results from indexing should reduce the amount of capital gains paid to shareholders, the company says.

He acknowledges there is a danger that consultants may favor money managers known for high portfolio turnover.

Still, the fund's portfolio turnover is a steep 130 percent, versus 68 percent for the average foreign stock fund.