PO (Pprincipal-Only) Security  

In the case of a CMO, a PO tranche is created deliberately to pay investors principal only and not interest.PO securities are priced at a deep discount from their face value.

Remarks: Bond funds including mutual funds (open-end and closed-end, actively managed and indexed), exchange-traded funds and unit investment trusts offer a convenient and affordable way to invest in a diversified portfolio of bonds, but a bond fund investment can differ from a bond investment in ways that are important to understand.