With this transaction, the Group is going one step further in its active funding policy to align its balance sheet with its long lifetime industrial assets by lengthening the average maturity
of its debt.
By February it was back up to pre-crisis levels and, currently, the weighted average maturity
of the 100 largest money-market funds is 52 days.
Maximum Weighted Average Maturity
(WAM): Overall days to maturity of the portfolio as a whole.
Some advisers say it's best to spread risk over a series of different maturities while maintaining an average maturity
of the client's liking in the portfolio.
Look for a bond fund with a low average maturity
of three to five years to insulate the portfolio from shifts in interest rates.
- Use the weighted average maturity
figures to gain insight into how portfolio managers are adjusting to current and future interest-rate environments.
By moving this structural cash balance farther out the yield curve, to an average maturity
of two years and a maximum maturity of three years for any single issue, the benefit of an upward-sloping yield curve and wider credit spreads will accrue.
Marin County Investment Pool with 106 days average maturity
, 87% mandatory participants and $290 million in assets.
7 percent with a weighted average maturity
The fund is managed so that the average maturity
of all instruments on a dollar-weighted basis does not exceed 65 days.
For example, some policies contain unnecessarily restrictive average maturity
However on a cautionary note, Lazzara noted that "money market fund investors should be aware of the extension risk posed by ABENs and not place themselves in a situation such that in a market wide extension scenario, the resulting duration extension would cause the weighted average maturity
of their portfolio to breach the 90-day 2a-7 limit.