NEW YORK, July 14, 2015 /PRNewswire/ -- Commodities
increased in June as fundamentals improved for the Agriculture
Sector, according to Credit Suisse Asset Management.
The Bloomberg Commodity Index Total Return performance was
positive for the month, with 11 out of 22 Index constituents
trading higher.
Credit Suisse Asset Management observed the following:
- Agriculture was the best performing sector, up 12.81%, led by
grains. Excess rainfall in the U.S., and not enough in Europe and Canada, increased concerns of damaged Wheat
crops. In addition, Soybean Meal increased after the U.S.
Department of Agriculture ("USDA") reported lower than expected
stocks of Soybeans.
- Energy declined slightly, down 0.44%. Brent Crude Oil led the
sector lower amid increased production. The International Energy
Agency ("IEA") reported that OPEC production increased in May,
despite continued oversupply. Heightened concerns over the future
of Greece and the Eurozone weighed
on demand expectations.
- Precious Metals ended the month 2.98% lower amid positive U.S.
economic data, reducing demand for safe haven assets.
- Industrial Metals decreased 4.85% as a continued weak economic
growth outlook for China weighed
on base metals demand expectations.
- Livestock declined the most, down 5.41%. Lean Hogs decreased
the most due to an increase in U.S. pork supplies. The USDA
reported that the domestic hog herd was 9.7% larger as of
June 1st compared to
previous years.
Nelson Louie, Global Head of
Commodities for Credit Suisse Asset Management, said: "After a slow
start to the year, global growth showed signs of acceleration. In
the U.S., growth signals indicated steady improvement, including an
increase in consumer sentiment levels and an improved labor market.
While Greece dominated the
headlines, economic data out of Europe remained encouraging as manufacturing
and service sector data improved. Chinese economic data remained
mixed and continued to indicate that the economic health of the
manufacturing sector remains uncertain. However, continued active
monetary policy out of China may
help pull the manufacturing sector along, which may be supportive
of demand expectations of economically sensitive commodities."
Christopher Burton, Senior
Portfolio Manager for the Credit Suisse Total Commodity Return
Strategy, added, "Much of the global focus will remain on the
impacts of a potential Greek exit from the Eurozone and the
negative ramifications it may have on European and global growth.
However, this will also further pressure the European Central Bank
to maintain its accommodative stance. It may also influence other
central banks to maintain easier policy than they otherwise would.
While these macroeconomic factors will likely continue to be
important in the near-term, idiosyncratic fundamental factors of
individual commodities are expected to continue to be the main
driver of commodity returns in the long-term."
About the Credit Suisse Total Commodity Return
Strategy
Credit Suisse's Total Commodity Return Strategy is managed by a
team with over 28 years of experience, 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 June 30, 2015, the Team
managed approximately USD 11.5
billion in assets globally.
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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
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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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