NEW YORK, April 13, 2011 /PRNewswire/ -- Commodity markets continued to gain in March despite mixed global macroeconomic conditions. Prices were supported by increasing inflationary concerns, geo-political uncertainty and continued growth in export demand.
Nelson Louie, Global Head of Commodities at Credit Suisse Asset Management, said, "Economic concerns remained high due to uncertainty in the Middle East and the tragic events in Japan. Additionally, the US dollar continued to weaken over the course of the month, possibly due to concerns over the impacts of extraordinary loose monetary and fiscal policies, even amidst increasing signs that the US economy is on the road to recovery. The Federal Reserve continues to express only limited concern over rising commodity costs and headline inflation, with the view that commodity price increases are transitory. Other central banks have already begun a tightening policy, including speculation that the European Central Bank will raise rates soon."
Christopher Burton, Senior Portfolio Manager for the Credit Suisse Total Commodity Return Strategy, added, "Amidst this backdrop, we believe commodities are poised to serve investor portfolios well. We also believe investors will continue to benefit from the diversification benefits that commodities provide."
The Dow Jones-UBS Commodity Index Total Return was up by 2.06% in March. Overall, 12 of the 19 index constituents increased in value, with Energy serving as the strongest sector with all components increasing. Crude Oil led the way with an 8.20% gain due to continued Middle East concerns and strong demand, gaining 7.98% for the year. Precious metals continued its strength on the back of Silver's momentum with the metal up 12.04% and sector up by 4.65%. Precious metals increased as a result of renewed inflationary concerns. Agriculture lost 1.90% in March, with mixed performance amongst individual constituents. Sugar and Wheat were the biggest detractors, while Cotton and the Soybean complex posted gains. Down by 3.80%, Industrial Metals performed the worst due to lower trading prices for Nickel, Copper and Zinc.
The Credit Suisse Total Commodity Return Strategy group periodically produces updates on relevant industry topics. For a copy of their white paper, "How Commodities Can Help Investors Face the Uncertainty of the Inflation/Deflation Debate", 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.
As of March 31, 2011 the team managed approximately USD 9.9 billion in assets globally.
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