Investors in high yield bonds and diversified listed private equity funds should brace for a correction as these assets are the most hyped parts of the market, according to new quarterly research by Fidante Capital.
The firm, which is the international capital markets business of Fidante Partners, used Google searches, ETF fund flow information and closed-ended fund premiums to create a new 'hype index', which formed the basis of its analysis alongside a momentum index (see chart below). Assets were grouped into categories including: 'overhyped', such as high yield bonds and diversified private equity funds; 'boom' such as equities, infrastructure and biotech; 'despondency' such as gold; and 'recovery' featuring European property and hedge funds. Macro optimism surges as fund managers expect 'b...
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