Weighted Average Credit Rating

外汇网2021-06-19 14:10:12 43

The weighted average of all the bond credit ratings in a bond fund. The measure gives investors an idea of how risky a fund's bonds are overall. The lower the weighted average credit, rating the riskier the bond fund. The weighted average credit rating is expssed as a regular letter rating (AAA,BBB, CCC).

|||To arrive at the weighted average credit rating, the calculation starts with piding the value of each bond in the fund by the total value of the fund. This gives the inpidual bond weights. The weight of a bond in the fund determines how much that bond influences the weighted average credit rating. For example if a bond fund has 95% AAA government bonds and 5% junk bonds, the bond fund would still have a weighted average credit rating of AAA.

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