A tranche is a term used in finance to describe a security that is divided into smaller pieces and sold to investors. Tranches are commonly found in mortgage-backed securities (MBS) or asset-backed securities (ABS) . Each portion or tranche of a securitized or structured product is one of several related securities offered at the same time, but with varying risks, rewards, and maturities to appeal to a diverse range of investors. The word tranche means "slice" or "portion" in French. Tranches can be split up by risk, time to maturity, or other characteristics in order to be marketable to different investors. They can carry different maturities, yields, and degrees of risk, and privileges in repayment in case of default. Tranching can be very helpful in many different circumstances, allowing investors to gain exposure to asset classes whose performance across the business cycle may differ from that of other eligible assets. Tranches are typically used in the credit and debt markets in a process called securitization, which divides up various types of debt instruments and packaged into funds to be sold to investors who want to earn the interest rate on the debt.