| Weighted Average Credit Rating | |
 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 expressed as a regular letter rating (AAA,BBB, CCC). |
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 To arrive at the weighted average credit rating, the calculation starts with dividing the value of each bond in the fund by the total value of the fund. This gives the individual 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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 Evaluating Bond Funds: Keeping It Simple - We go over some of the key factors for determining a fund's risk-return profile. Bond Basics Tutorial - What are bonds and do they belong in your portfolio? Get all the answers in this comprehensive tutorial. Advanced Bond Concepts - This detailed tutorial explains some of the more complex concepts and calculations you need to know for trading bonds, including bond pricing, yield, term structure of interest rates, duration, and much more. |
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