weighted average maturity - Investment & Finance Definition
The average time it takes for securities in a portfolio to mature, weighted in proportion to the dollar amount that is invested in the portfolio. Weighted average maturity measures the sensitivity of fixed-income portfolios to interest rate changes. Portfolios with longer WAMs are more sensitive to changes in interest rates because the longer a bond is held, the greater the opportunity for interest rates to move up or down and affect the performance of the bonds in the portfolio. If interest rates move up, the value of a bond decreases because there are bonds in the market that now pay more interest and therefore are more attractive.