What is 'Weighted Average Maturity  WAM'
Weighted average maturity (WAM) is the weighted average of the time until all maturities on mortgages in a mortgagebacked security (MBS). The higher the weighted average to maturity, the longer the mortgages in the security have until maturity. Also known as "average effective maturity".
BREAKING DOWN 'Weighted Average Maturity  WAM'
The measure is calculated by totaling each mortgage value represented by the MBS. The weights of each mortgage is found by dividing the value of each into the total of all. To arrive at the WAM number the weight of each security is multiplied by the time until maturity of each mortgage, and then all the values are added together. For example say an MBS has three mortgages valued at $1,000, $2,000 and $3,000 (a total of $6,000) and mature in one, two and three years respectively. The weights of these are 1/6 (1,000/6,000), 1/3 (2,000/6,000) and 1/2 (3,000/6,000). The WAM is 2 1/3 years (1/6 x 1 year + 1/3 x 2 years + 1/2 x 3 years).

Weighted Average
An average in which each quantity to be averaged is assigned ... 
Held To Maturity Security
Accounting standards necessitate that companies classify any ... 
Aggregator
A party involved within the secondary mortgage market that purchases ... 
Term To Maturity
The remaining life of a financial instrument. In bonds, it is ... 
MortgageBacked Security (MBS)
A type of assetbacked security that is secured by a mortgage ... 
Accretion of Discount
The increase in the value of a discounted instrument as time ...

Bonds & Fixed Income
How Do I Calculate Yield To Maturity Of A Zero Coupon Bond?
Yield to maturity is a basic investing concept used by investors to compare bonds of different coupons and times until maturity. 
Home & Auto
What Happened To The MBS Market?
Find out how the fall of mortgagebacked securities has changed the financial landscape. 
Insurance
Behind the Scenes of Your Mortgage
Four major players slice and dice your mortgage in the secondary market. 
Options & Futures
20 Investments: MortgageBacked Securities
What Is it? A mortgagebacked security (MBS), also known as a "mortgage passthrough" or a "passthrough certificate", is an investment instrument that represents ownership of an undivided interest ... 
Economics
How Interest Rates Affect The Housing Market
Understand how rate changes can affect home prices, and learn how you can keep up. 
Mutual Funds & ETFs
The ABCs of MortgageBacked Securities ETFs
ETFs focused on mortgagebacked securities, or MBS, offer an opportunity to further diversify the fixedincome portion of your portfolio. 
Investing
Whatâ€™s the Difference Between Duration & Maturity?
We look at the meaning of two terms that often get confused, duration and maturity, to set the record straight. 
Bonds & Fixed Income
How To Evaluate Bond Performance
Learn about how investors should evaluate bond performance. See how the maturity of a bond can impact its exposure to interest rate risk. 
Mutual Funds & ETFs
Top 3 American Century Investments Money Market Mutual Funds (CPFXX, TCRXX)
Learn about the profiles of three money market funds in the American Century Investments family of funds and why these funds are solid investment ideas. 
Mutual Funds & ETFs
3 ETFs to Take Advantage of Increased Mortgage Rates (REM, VMBS)
Obtain a comparative review and analysis of three of the topperforming ETFs that are poised to generate profits from increased mortgage interest rates.

What's the difference between a collateralized mortgage obligation (CMO) and a mortgagebacked ...
Find out more about collateralized mortgage obligations and mortgagebacked securities and the difference between the two ... Read Answer >> 
What is the difference between yield to maturity and the yield to call?
Determining various the various yields that callable bonds can provide investors is an important factor in the bond purchasing ... Read Answer >> 
What's the difference between moving average and weighted moving average?
Moving averages are one of the most popular tools used by active traders to measure momentum. In this FAQ, we'll take a look ... Read Answer >> 
What are the maturity terms for Treasury bonds?
Learn how treasury bonds pay interest, when they reach maturity and the differences between terms for treasury bonds and ... Read Answer >> 
How can I calculate the expected return of my portfolio?
Understand the components of the equation used to calculate the expected return of an investor's portfolio. Learn why the ... Read Answer >> 
How do I calculate yield to maturity of a zero coupon bond?
Find out how to calculate the yield to maturity for a zero coupon bond, and see why this calculation is more simple than ... Read Answer >>