ANALYSIS-Investors eye real estate debt funds despite leverage risk

Portfolio managers forced to rebalance their asset mix because of the global stock market rally are tapping the presumed safety of debt funds tied to real estate, but some money managers say they could be unwittingly increasing their risk profile.

Investors may not realize all the consequences posed by the leverage managers of these funds take on, warns JCR Capital, a middle market real estate investment firm based in Denver. The safest debt holdings are typically made up of government bonds.

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