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Collateralized Mortgage Obligation - CMO
What does it mean?
A type of mortgage backed security that creates separate pools of pass-through rates for different classes of bondholders with varying maturities, called tranches. The repayments from the pool of pass-through securities are used to retire the bonds in the order specified by the bonds prospectus.
In Other Words...
CMOs usually offer low returns because they are very low risk and sometimes backed by government securities.
Related Links
Fannie Mae: MBS - Detailed information and articles on mortgage backed securities.
Asset Allocation within Fixed Income - An investor's fixed-income portfolio can easily beat the average bond fund. Learn how and why!
Related Terms
Collateralized Debt Obligation (CDO) | Commercial Mortgage Backed Securities (CMBS) | Mortgage Backed Security (MBS) | Pass-Through Security | Structured Finance | Tranches
1 |
A | B |
C | D |
E | F |
G | H |
I | J |
K | L |
M | N |
O | P |
Q | R |
S | T |
U | V |
W | X |
Y | Z
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