Portfolio Runoff
A decrease in the value and size of portfolios investing in mortgages and mortgage-backed securities.
Investopedia Commentary
This decrease occurs because of homeowners capitalizing on lowering interest rates through refinancing. The resulting effects usually mean lower revenues for the portfolio holders as the cash flow from mortgage interest decreases.
Related Links
Asset Allocation within Fixed Income
Trying To Predict Interest Rates
Forces Behind Interest Rates
See also: Fannie Mae, Ginnie Mae, Mortgage, Mortgage Backed Security, Prepayment Risk