Credit Suisse Group AG (ADR)(NYSE:CS)
Nelson Louie, Global Head of Commodities in Credit Suisse Group AG (ADR) (NYSE:CS) Asset Management division, said, Commodities were generally supported by an improved macroeconomic environment in February. The economic data released towards the end of the month highlighted continued gradual improvement in global growth momentum, which is supportive of future commodity demand. Commodity markets remain susceptible to global supply shocks, especially in the case of petroleum. Global oil supply and demand balances are significantly tighter than most had anticipated due to rising Middle East tensions and tighter sanctions, production disappointments, labor strikes and production shutdowns.
Christopher Burton, Senior Portfolio Manager for the Credit Suisse Total Commodity Return Strategy, added, While the economy is improving, we believe the US Central Bank will be in no hurry to raise rates and possibly choke the budding recovery. With inflation expectations remaining well anchored, the odds of inflation overshooting expectations remain elevated. Commodities have historically tended to outperform during periods of higher than expected inflation. We believe investors will continue to benefit from the inflation protection and diversification potential of holding diversified commodities exposure within a portfolio of traditional assets.
The Dow Jones-UBS Commodity Index Total Return was up by 2.70% in February. Overall, 14 out of 20 index constituents increased in value. Energy was the best performing sector, up 4.87% for the month. Petroleum led the sector higher due to improved economic sentiment and increasing political tension in the Middle East, further constricting excess production capacity. Colder weather in Europe helped to counter what had thus far been a warm winter, increasing petroleum demand. Agriculture increased, up 3.53%. While Sugar and Soybeans were the best performers in the sector, Corn was also supported by strong weekly USDA export sales data. Livestock ended the month up a relatively modest 0.81%, led higher by Cattle. Tight inventory levels have constrained supply, despite higher wholesale beef prices. Industrial Metals also increased slightly, up 0.79%, with mixed performance among constituents. Aluminum and Copper posted strong gains, while Nickel was sharply lower. Aluminum delivered the greatest individual return as smelters are dealing with continually increasing energy costs. Precious Metals was relatively unchanged, down 0.35%. Gold had a strong month, supported by continued accommodative monetary policies globally. However, speculation that a stronger-than-expected US economy might alter the Federal Reserve's policies supported a stronger US dollar and had an outsized impact on Gold.
The Credit Suisse Total Commodity Return Strategy group periodically produces updates on relevant industry topics. For a copy of the team's white paper, Commodities Outlook: Increased Volatility, Increase Opportunity?, please contact your Credit Suisse Relationship Manager.
About the Credit Suisse Total Commodity Return Strategy Credit Suisse's Total Commodity Return Strategy has been managed for 17 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 both a quantitative and qualitative 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 February 29, 2012 the team managed approximately USD 11.1 billion in assets globally.
An investment in commodities is not a complete investment program and should represent only a portion of an investor's portfolio management strategy. Investment in commodity markets may not be suitable for all investors. Commodity markets are highly volatile and the risk of loss in commodities and commodity-linked investments can be substantial.
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 50,700 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.
Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.
Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.