A metric relevant for debt mutual funds, Debt mutual funds are a portfolio of several individual bonds/securities with different and unique features like different maturities & different yields.
A fund’s maturity is the weighted average maturity of all its holdings. Average maturity helps to determine the average time to maturity of all the debt securities held in a portfolio and is calculated in days, months or years. For e.g. a debt fund having an average maturity of 5 years constitutes debt securities held by the fund that, on an average, will mature in 5 years, though individual securities may have maturity different than 5 years.
Usually, longer maturity funds have a higher YTM for taking the additional duration risk keeping the other factors like credit quality constant.