This figure is calculated by weighting each bond's coupon by its relative size in the portfolio. This figure indicates whether the portfolio has more high- or low-coupon bonds. There can be advantages to holding higher coupon bonds, but many portfolio managers buy them simply to tempt investors with a high payout. This can be damaging to investors for two reasons. The first is that higher-coupon bonds often carry greater risk than lower-coupon issues. The second is that when these bonds don't carry extra risk, they are old issues that the portfolio manager has paid up for and if the offering doesn't amortize the extra yield, investors are likely to find that their principal erodes over time.