Warning sounded on credit fund concentration risks
Allocations to funds based on corporate bond indexes raise issues that investors seem unaware of, such as US high yield's correlation to the oil price, according to new research.
The downsides of investing based on traditional market cap-based equity indexes are well documented, but many investors do not realise that credit markets face similar issues, said Raphael Thuin, fixed income portfolio manager at Tobam, a Paris-based smart-beta fund house.
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