San Francisco-based Charles Schwab Investment Management, Inc. may have fewer choices when it comes to buying asset-backed bonds for its multi-billion-dollar 2a7 money market funds. The rules of the game - in accordance with the SEC - allow for only short-end, tier-one rated investments. This has kept the investment firm out of the ABS term market. But the company is bullish on asset-backed commercial paper, which makes up between $18 billion and $26 billion - over 40% - of Schwab's total money market investments.
"We have 19 billion right now in asset-backed commercial paper," said Greg Reiter, vice president of taxable research at Schwab.