Commodities Gain in April as Investors Seek the Safety of Precious Metals Amid Fluctuating Currency Markets

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May 10, 2010, 11:35 ET

NEW YORK, May 10 /PRNewswire-FirstCall/ -- Often considered safe bets for retaining value, investors fled to Silver and Gold in April, making Precious Metals the strongest performing commodities sector for the month.

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Andrew Karsh, Co-Lead Portfolio Manager for the Credit Suisse Total Commodity Return Strategy, said, "As Greece's debt-funding needs continue to cast a cloud over the long-term viability of the Euro, the US Dollar and traditional commodity assets such as gold have benefited-gold outperformed the dollar last month, though both posted solid gains. Because of the unique behavioral patterns of commodities compared to traditional fixed income and equities holdings, they have the potential to help hedge exposures to volatile markets, rising inflation, geopolitical risk and even currency movements. As a result, we are seeing the asset class continue to gain favor among investors in the current environment."

Christopher Burton, Co-Lead Portfolio Manager, added, "In addition to the current focus on Greece, it is notable that debt burdens and deficits have generally grown sharply around the world. Combined with large fiscal deficits, it is possible that inflation may begin to rise. Because commodities are inherently a driver of inflation, and are therefore positively correlated to unexpected changes in inflation, we've seen a growing number of investors increasing their exposure to the asset class over the past few months."

Reversing the downward trend in March, commodities gained in April, with the Dow Jones-UBS Commodity Index Total Return up 1.94%. Index performance was mixed, with 13-of-19 commodities within the Index posting gains. Precious Metals was the strongest sector in April, up 6.02%, as investors focused on increasing sovereign risk in Europe. On an individual commodity basis, Wheat was the strongest performer during the month, returning 8.68% as a result of increased demand. Agriculture gained 3.36% due to Wheat's strong performance and continued demand from China for Corn and Soybean. Industrial Metals was the only sector with negative returns, down 3.22%, as Copper, Zinc, and Aluminum all declined on worries about weaker demand resulting from the crisis occurring in Greece.

The Credit Suisse Total Commodity Return Strategy group periodically produces updates on relevant industry topics. For a copy of their latest whitepaper, "Capitalizing on Any Curve: Clarifying Misconceptions About Commodity Indexing", please email [email protected].

About the Credit Suisse Total Commodity Return Strategy

Credit Suisse's Total Commodity Return Strategy has been managed for fourteen years and seeks to outperform the return of a commodities index, such as the Dow Jones–UBS Commodity Index Total Return or the S&P GSCI Total Return Index, using a quantitative commodity research process. Commodity index total returns are achieved through:

Spot Return: price return on specified commodity futures contracts;
Roll Yield: impact due to migration of futures positions from near to far contracts; and
Collateral Yield: return earned on collateral for the futures.

About the Portfolio Managers

Christopher Burton, CFA, and Andrew Karsh are Co-Lead Portfolio Managers of the Credit Suisse Total Commodity Return Strategy. As of April 30, 2010 the team managed approximately USD 5.2 billion in assets globally.

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