Pass Through

This type of security is backed by assets, like property.

Each month, money is gathered from one party and handed to an intermediary. The intermediary collects some of the cash as a fee and passes the money on to investors who own the pass-through.

Example? A mortgage-backed certificate, which is backed by the homes that people have bought with mortgages. Each month, people pay their mortgages; the money is collected by the bank and then goes through government agencies involved in the mortgage industry. Finally, it makes it to the investors who've bought the certificates.