After an outbreak of war the first victim, according to the old saying, is truth. There are strong echoes today of this traditional wisdom in the financial world when it comes to the latest global flare-up of hostilities – the one between rival asset classes.

Last week Barclays Capital reopened an investment industry controversy when it attacked hedge fund indices in the 2006 edition of its Equity Gilt Study. Many indices have been set up by hedge fund promoters and, not surprisingly, are designed to bathe performance in a rosy glow. The annual overstatement can be anywhere between one and six percentage points, according to Barclays Capital.