average maturity investment & finance definition
The
average time before bonds or other fixed-income investments mature. Often cited
as a measure in mutual fund portfolios. The longer the average maturity, the
greater the risk of rising interest rates.
See average maturity in Wall Street Words
The average time to maturity of all the debt securities held in a portfolio. A relatively short average maturity results in smaller price fluctuations in response to changes in market rates of interest. A short average maturity subjects the owner of a debt portfolio to the risk that maturing debt will be replaced with debt carrying a lower interest rate. Average maturity is an important consideration for investors who hold bond and money market funds.
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