NEW YORK, Oct. 6 /PRNewswire/ -- Commodity markets rallied in September as investor sentiment turned positive amidst the prospects of further rounds of quantitative easing. A noticeable trend shift is taking place, suggesting fundamental supply and demand dynamics will take priority over macroeconomic indicators in determining prices over the long term.
Nelson Louie, Global Head of Commodities at Credit Suisse Asset Management said, "As reflected in Fed Chairman Ben Bernanke's recent comments, subduing deflation will likely continue to be a top priority of the Federal Reserve over the near term, and as more quantitative easing takes place, we expect commodities prices will continue to rise. While macroeconomic factors have driven returns over recent history, we expect fundamental factors to drive prices moving forward over the longer term."
Christopher Burton, Senior Portfolio Manager for the Credit Suisse Total Commodity Return Strategy added, "Historically, Commodities prices have tended to perform best during periods of higher than expected inflation. Today we're seeing some major developed countries actively discussing or engaging in various fiscal and monetary measures, including devaluing currencies, in order to keep their exports globally competitive, while fiscal policy worldwide remains accommodative. As a result, investors may continue to seek out investments that should retain their value in spite of inflation. This has benefited commodities generally and precious metals in particular."
The Dow Jones-UBS Commodity Index Total Return rose 7.26% in September, bringing the year-to-date performance to 0.90%. Overall, 16 of the 19 index constituents increased in value. Agriculture commodities were pushed higher by severe weather conditions and supply concerns – seen most prevalently in Sugar and Cotton. Economically sensitive commodities, especially those in the industrial metals complex, surged, led higher by Aluminum and Nickel, up 13.83% and 12.97%, respectively. The Precious Metals sector, the best performing group year-to-date, had another positive month. As economic uncertainty prevailed for the majority of September, Gold and Silver rallied. Gold returned 4.76%, lead higher by Central Banks changing course to become net purchasers of the precious metal. Silver rose 12.31% for the month.
The Credit Suisse Total Commodity Return Strategy group periodically produces updates on relevant industry topics. For a copy of their latest white paper, "Capitalizing on Any Curve: Clarifying Misconceptions About Commodity Indexing", please email email@example.com.
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 September 30, 2010 the team managed approximately USD 6.4 billion in assets globally.
Credit Suisse AG
Credit Suisse AG is one of the world's leading financial services providers and is part of the Credit Suisse group of companies (referred to here as 'Credit Suisse'). As an integrated bank, Credit Suisse offers clients its combined expertise in the areas of private banking, investment banking and asset management. Credit Suisse provides advisory services, comprehensive solutions and innovative products to companies, institutional clients and high-net-worth private clients globally, as well as to retail clients in Switzerland. Credit Suisse is headquartered in Zurich and operates in over 50 countries worldwide. The group employs approximately 48,300 people. The registered shares (CSGN) of Credit Suisse's parent company, Credit Suisse Group AG, are listed in Switzerland and, in the form of American Depositary Shares (CS), in New York. Further information about Credit Suisse can be found at www.credit-suisse.com.
In its Asset Management business, Credit Suisse offers products across a broad spectrum of investment classes, including hedge funds, credit, index, real estate, commodities and private equity products, as well as multi-asset class solutions, which include equities and fixed income products. Credit Suisse's Asset Management business manages portfolios, mutual funds and other investment vehicles for a broad spectrum of clients ranging from governments, institutions and corporations to private individuals. With offices focused on asset management in 19 countries, Credit Suisse's Asset Management business is operated as a globally integrated network to deliver the bank's best investment ideas and capabilities to clients around the world.
All businesses of Credit Suisse are subject to distinct regulatory requirements; certain products and services may not be available in all jurisdictions or to all client types.
Important Legal Information
This document was produced by and the opinions expressed are those of Credit Suisse as of the date of writing and are subject to change without obligation to update. It has been prepared solely for information purposes and for the use of the recipient. It does not constitute an offer or an invitation by or on behalf of Credit Suisse to any person to buy or sell any security. Any reference to past performance is not a guide to future performance. The information and analysis contained in this publication have been compiled or arrived at from sources believed to be reliable but Credit Suisse does not make any representation as to their accuracy or completeness and does not accept liability for any loss arising from the use hereof.
Certain information contained in this document constitutes "Forward-Looking Statements" (including observations about markets and industry and regulatory trends as of the original date of this document), which can be identified by the use of forward-looking terminology such as "may", "will", "should", "expect", "anticipate", "target", "project", "estimate", "intend", "continue" or "believe", or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties beyond our control, actual events, results or performance may differ materially from those reflected or contemplated in such forward-looking statements. Readers are cautioned not to place undue reliance on such statements. Credit Suisse has no obligation to update any of the forward-looking statements in this document.
Copyright © 2010, CREDIT SUISSE GROUP AG and/or its affiliates. All rights reserved.
SOURCE Credit Suisse AG