Fitch expects stability in the fund's market risk sensitivity profile: the investment guidelines of the fund indicate that it will invest in obligations with remaining maturities
of two years or less, while maintaining a WAM of no more than six months and a WAL of no more than 12 months.
Further, under each fund's non-fundamental investment policies, it needs to invest at least 80% of its total assets in municipal bonds with remaining maturities
of less than 15 years, under normal conditions and to maintain a dollar-weighted average duration of the entire portfolio between 3 and 8 years.
This year's remaining maturities
include e1/4309m in government development stock and e1/465m in other loans.
If banks sold LBP denominated T-bills (or T-bonds) with remaining maturities
of eight years and less or CDs, the central bank would buy these papers at no discount (zero percent) but with a reduction in their coupons (haircut) of 50 percent.
Significant noncompliance with any of these criteria during a given period would prevent the use of amortized cost for that period (except for short-term debt investments with remaining maturities
of 90 days or less at year's end, which are always eligible for reporting at amortized cost).
Indicating that BOJ policymakers engaged in active discussions on several specific methods for monetary easing, some members said that purchasing Japanese government bonds with longer remaining maturities
would be an option if additional monetary easing is needed in the future, according to the minutes.
The purpose of the program, which is still ongoing, is to lower longer-term rates relative to shorter-term rates--and for that reason it is referred to as "operation twist." This result is accomplished by selling Treasury securities with remaining maturities
of 3 years or less and purchasing Treasury securities with remaining maturities
of 6 years to 30 years.
Instead, the Fed said it would "purchase Treasury securities with remaining maturities
of 6 years to 30 years and to sell or redeem an equal par value of Treasury securities with remaining maturities
of approximately 3 years or less."
Convergence in remaining maturities
can be seen as contributing to a more symmetric transmission channel of monetary policy in the euro area.
Average remaining maturities
on the stock of new and used automobile loans are estimated with the same procedure as that for the interest rates.
For that purpose, the statement defines a pool's short-term investments as those with remaining maturities
of up to 90 days.