Active equity manager portfolio turnover has been declining since the financial crisis. The average turnover ratio fell to about 60% at the end of 2015 before ticking up slightly in 2016, but overall is below long-term historical levels.
Volatile markets are a catalyst for higher portfolio turnover as seen in higher levels following the dot-com bust, the period following 9/11 and the periods leading up to and during the financial crisis. While the markets have been in a long bull run and volatility has been low, the rise of passive investing has been theorized as a driver of low turnover. As passive investments gather more assets, generally at the expense of active funds, more shares are held in low-turnover vehicles taking much of the float (tradable shares) out of the market. With a lower supply of shares, trading becomes more difficult and more expensive impacting costs and ultimately a manager's value proposition on the transaction.