Collateralized Mortgage Obligation - CMO
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.
Investopedia Commentary
CMOs usually offer low returns because they are very low risk and sometimes backed by government securities.
Related Links
Asset Allocation within Fixed Income
See also: Collateralized Debt Obligation - CDO, Commercial Mortgage Backed Securities - CMBS, Mortgage Backed Security - MBS, Pass-Through Security, Structured Finance, Tranches