NEW YORK,
March 11, 2015
/PRNewswire/ -- Commodities were higher in February,
largely driven by fundamental supply and demand factors, according
to Credit Suisse Asset Management.
The Bloomberg Commodity Index Total Return performance was
positive for the month, with 12 out of 22 Index constituents
trading higher.
Credit Suisse Asset Management observed the following:
- Energy was the best performing sector, up 8.43%, with all
constituents posting positive returns. Petroleum products and
Brent Crude Oil led the sector higher amid increased expectations
of production cuts going forward. Notably, Brent Oil
outperformed WTI Oil after the US Energy Information Administration
reported an increase in US supplies for the 12th consecutive
week.
- Agriculture increased 2.21%, led by Soybean Oil. Ongoing
strikes in Brazil's largest
soybean producing region reduced export capability, increasing
fears over a potential supply shortage.
- Industrial Metals ended the period 1.13% higher, led by Copper,
as reports of potentially more active fiscal policy out of
China, including further
reductions in banks' required reserve ratios and cutting of
interest rates, coupled with positive preliminary Chinese
manufacturing data increased demand expectations for base
metals.
- Livestock declined 2.66%. Lean Hogs decreased the most due to
increased pork production and reduced export availability amid
labor strikes at US West Coast ports throughout the month, causing
local inventories to build.
- Precious Metals ended the period 4.87% lower as concerns eased
over a potential Greek exit from the Eurozone, reducing safe haven
demand and dampening the appeal of precious metals.
Nelson Louie, Global Head of
Commodities for Credit Suisse Asset Management said: "Supply and
demand factors continued to be drivers of individual commodity
returns, with the main focus on Crude Oil and Petroleum Products.
Cold weather in the US increased demand for Heating Oil, while
Gasoline demand remained high amid decreased refining
capacity. Falling rig counts and announced reductions in
capital expenditures increased expectations that supply may begin
to normalize. Macroeconomic headlines also had an impact on
multiple commodity sectors. In the US, inflation expectations
remain below the US Federal Reserve's target. During the recent
semiannual testimony, Federal Reserve Chair Janet Yellen alluded to the possibility that the
Fed may not increase interest rates in the near-term, and may delay
a rate increase if their inflation and employment targets were not
met."
Christopher Burton, Senior
Portfolio Manager for the Credit Suisse Total Commodity Return
Strategy, added, "Globally, the main focus will be on how Chinese
and European economies react to further accommodative efforts from
their central banks. Global growth signals may improve as more
active fiscal policy out of China
may boost its manufacturing sector. In Europe, further easing measures confirmed the
ECB's commitment to minimizing disinflation fears. In the medium-
to long-term, economic recovery, primarily in Asia and Europe, may be supportive of global commodity
demand growth. However, diverging paths of economic revival may
prolong a broad global recovery. As a result, idiosyncratic
fundamental factors of individual commodities may continue to drive
returns in the near-term."
About the Credit Suisse Total Commodity Return
Strategy
Credit Suisse's Total Commodity Return Strategy
has been managed for over 20 years and seeks to outperform the
return of a commodities index, such as the Bloomberg 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 28, 2015, the Team
managed approximately USD 10.1
billion in assets globally.
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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
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to future performance. The information and analysis contained in
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believed to be reliable but Credit Suisse does not make any
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accept liability for any loss arising from the use hereof.
Certain information contained in this document constitutes
"Forward-Looking Statements" (including observations about markets
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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.
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