A simpler portfolio-level metric than bond duration — the value-weighted average time until a bond portfolio’s holdings mature.
How it works
Each bond’s value times its years to maturity, summed across all bonds and divided by the total portfolio value, gives the weighted average maturity.
What this does not include
Unlike this site’s bond-duration calculator, WAM doesn’t measure interest-rate price sensitivity directly — it’s a simpler, more commonly disclosed metric for describing a portfolio’s overall maturity profile, especially for money market funds.
How to use this calculator
- Enter the value and years to maturity for each of three bond holdings.
Frequently asked questions
Why is WAM commonly disclosed for money market funds?
Regulators require it as a standard disclosure metric, since it gives investors a quick sense of how sensitive the fund’s holdings are to interest rate changes and liquidity risk.
How is WAM different from duration?
WAM is a simple value-weighted average of time to maturity; duration accounts for the timing of all cash flows (including coupons) discounted at the bond’s yield, making it a more precise price-sensitivity measure.
Does a longer WAM always mean more risk?
Generally more interest-rate sensitivity, yes — but the specific risk depends on the credit quality and structure of the underlying bonds too, not WAM alone.
