BlackRock, the world's biggest fund manager with about $US4.6 trillion ($6.1 trillion) under management, said there are signs of "frothy" activity in the Australian market and that Australia is not on the list when it comes to buying global real estate debt. 
Justin Christofel, a US-based BlackRock portfolio manager, said Australian debt was not included in its latest fund.
Mr Christofel, who was speaking at a recent function in Australia, said: "It is possible to access segments of these global markets to provide consistent return streams."
He said there was a "little bit of worry" about Australian banks' high exposure to the local housing market.
Income fund managers are working on new strategies to generate low-risk, above-inflation returns in a global economy where traditional fixed-income yields are, on average, less than half their pre-global financial crisis levels.
The investment strategy includes the use of US non-agency mortgages, which are sponsored by private companies rather than government agencies; collateralised loan obligations; commercial mortgaged backed securities; and preference stocks.
Bond products based on US residential mortgages - which eight years ago were at the centre of the debt crisis that ripped through US investment banks and then global markets - are "looking reasonable" because of tight lending standards and borrower repayments, he added.
Returns range from 4 per cent to 6 per cent.
Returns from traditional fixed-income products have nosedived as interest rates plunged to record lows, in many cases providing negative returns, which means depositing money attracts a charge rather than earning interest.
Most Western governments are attempting to manage spending blow-outs and low, or negative, interest rates, which limits options for dealing with another large-scale financial crisis.
This is important to both financial advisers creating portfolios for their clients, and retirees looking for products that generate income without excessive capital risk.
Investors are taking on between two and four times the risk they did a decade ago to generate the same levels of income, according to analysis by BlackRock.
Mr Christofel said investors surrender some yield compared with a pure high-yield exposure, which is typically a high-paying bond with a lower credit rating than investment-grade corporate bonds.
"But we think this is a good trade-off," he added.