Investor Demand for Real Returns and Inflation Protection Expected to Bolster Commodity Prices Further in 2010

Jan 13, 2010, 11:13 ET from Credit Suisse AG

NEW YORK, Jan. 13 /PRNewswire-FirstCall/ -- Following a market sell-off in the second half of 2008, commodities recovered to deliver positive performance in 2009.  We believe signs of economic stabilization and indications of growth in emerging markets may continue to drive demand and increased commodity prices through 2010.  


Andrew Karsh, Co-Lead Portfolio Manager for the Credit Suisse Total Commodity Return Strategy said, "One of the most frequently discussed themes in the commodities space in 2009 was the relationship between commodities and inflation. While official inflation expectations continue to be low, unprecedented government stimulus and swelling government debt loads in the United States and elsewhere may eventually lead to inflation, and it is difficult to predict when inflation will pick up. History suggests inflation may rise much more rapidly than is expected and commodities are one of the few asset classes which can potentially provide a hedge against inflationary pressures in this type of environment."  

Co-Lead Portfolio Manager, Christopher Burton, added, "We continue to believe now is an excellent time to hold or increase allocations to commodities as many commodity prices are still below previous cycle highs and well below inflation-adjusted highs.  Amidst the prolonged uncertainty, we expect investors to maintain a focus on their exposure to hard assets, especially as growth projections in emerging markets remain positive.  Additionally, we continue to believe in the role of commodities as a strategic component of investors' portfolios, potentially reducing risk and enhancing returns."

The Dow Jones-UBS Commodity Index Total Return gained 1.98% in December with the strongest returns coming from the Industrial Metals sector, bringing 2009 annual performance of the Index to 18.91%.  Sugar was the top performer in December, up 19.04%, due to lower than expected supplies.  The worst performer in November was one of the strongest performers in December; Nickel gained 12.79% as popularity for Industrial Metals continued through the year end.  Natural Gas reversed its downward trend and gained 11.85% in December due to the increasingly cold weather, but ended the year as the worst performer, down 51.56%.  Silver and Gold were amongst the worst performers in the month, giving back most of their returns from November, down 9.06% and 7.28%, respectively.  Despite this decline, both precious metals finished 2009 with positive results.  

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 click here ( or email

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 December 31, 2009 the team managed approximately USD 4.5 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 47,400 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

Asset Management

In its Asset Management business, Credit Suisse offers products across a broad spectrum of investment classes, including alternative investments such as private equity, hedge funds, real estate and credit, 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.


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. 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 necessarily a guide to the future. 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.

SOURCE Credit Suisse AG