By tranching your capital into a deal over time, as risk is discharged, you can assess where on the distribution curve a deal is tracking.

FORBES: Gravity, Biotech Returns, and Why The Median Matters

Prepayment risk is an important concept to consider in ABS and MBS. Therefore, to deal with prepayment risk, they have tranching structures, which help by distributing prepayment risk among tranches.

FORBES: Introduction To Asset-Backed And Mortgage-Backed Securities