Credit Suisse's Asset Management Division Releases New White Paper: "Commodities Outlook: Increased Volatility, Increased Opportunity?"

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Aug 11, 2011, 10:59 ET

NEW YORK, Aug. 11, 2011 /PRNewswire/ -- Credit Suisse's Asset Management division announced the release of a new white paper entitled, "Commodities Outlook: Increased Volatility, Increased Opportunity?". The paper examines the recent rise in the volatility of commodity prices within the context of a longer-term, secular trend of increasing volatility and how investors can best position their portfolios in this environment going forward.

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While increased volatility may traditionally be perceived as negative, Nelson Louie, Global Head of the Commodities Group within Asset Management, and Christopher Burton, Senior Portfolio Manager, believe that a sustained level of volatility may actually benefit long-term commodity investors for the following reasons:

Tightening supply/demand conditions may exacerbate commodity volatility, but may also potentially lead to higher returns over the long term;
Return drivers for commodities are distinct from those of traditional equity and fixed income markets and relate to their idiosyncratic supply/demand functions; and
Investors can potentially capitalize on the shape of the futures curve by taking advantage of short-term supply shocks to potentially generate alpha.

In addition, the white paper focuses on the drivers of commodity volatility and makes the case for what may be a prolonged period of supply/demand imbalance. Mr. Louie and Mr. Burton also address the impact of this imbalance on prices, and how certain events such as extreme weather, economic expansion, labor disputes or geopolitical risk can exacerbate price volatility.

For a copy of the new white paper, please click here.

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 July 31, 2011 the team manages approximately USD 10.9 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.

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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.

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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.

Certain risks relating to investing in Commodities and Commodity-Linked Investments: Exposure to commodity markets should only form a small part of a diversified portfolio. Investment in commodity markets may not be suitable for all investors. Commodity investments will be affected by changes in overall market movements, commodity volatility, exchange-rate movements, changes in interest rates, and factors affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and international economic, political and regulatory developments. Commodity markets are highly volatile. The risk of loss in commodities and commodity-linked investments can be substantial. There is generally a high degree of leverage in commodity investing that can significantly magnify losses. Gains or losses from speculative derivative positions may be much greater than the derivative's original cost. An investment in commodities is not a complete investment program and should represent only a portion of an investor's portfolio management strategy.

SOURCE Credit Suisse AG