riskiest of these securities in search of extra yield.

Bond buyers want this debt because the higher yield once provided by asset-backed bonds is disappearing as the market becomes larger and investors grow accustomed to these securities. Asset-backed bonds are debt backed by payments on credit cards, boat loans and other receivables.

The problem is, investors don't have an adequate understanding of the risks of these bonds. That's because borrowers who hold the loans backing the bonds may refinance their loans at lower interest rates, which means investors could get their principal back earlier than they anticipated.

"We now have evolving classes of securities, and we're trying to learn about how sensitive their cash flows are to changes in interest rates,'' said Frank Fabozzi.