Credit Suisse has launched an innovative set of commodity index products which is designed to provide its clients with flexibility, transparency and liquidity. The product set includes a new alternative benchmark, enhanced beta, alpha and absolute return products, hybrid products combining commodity and resource equities, and discretionary, fundamentally-based strategies. The bank has retained the key aspects of the index – including rebalancing, multi-period exposure and weighting methodology – to create a more stable, global index with a strong return profile.
Moreover, the bank intends to offer CSCB on a license basis to other banks so that they may leverage its benefits. The bank has also launched the Credit Suisse Momentum and Volatility Enhanced Return Strategy (MOVERS), an approach to commodities investment and targets absolute return during all market cycles. MOVERS is driven by a quantitative strategy that determines whether it is long or short individual commodities on the basis of market performance and realized volatility.
The bank has reported that it’s Credit Suisse Commodity and Resource Equity Switch (CARES) is the first hybrid commodities and resource equities strategy which switches dynamically between an allocation to commodities or to a related resource equity basket. CARES uses the Bank’s HOLT proprietary metrics to determine whether it is more favourable for clients to invest in commodities or the related resource equities each month.
Additionally, the bank has created the Credit Suisse Glencore Active Index Strategy (GAINS). In this strategy, the underlying weights of individual commodities are changed monthly, based on the views of Credit Suisse’s alliance partner, Glencore. GAINS provides clients with the benefit of Glencore’s expertise in the physical commodity markets.
Jérôme Drouin, Head of Commodity Indices at Credit Suisse, said: “All of these products are supported by a common framework. We regard the framework as a powerful tool which helps us address a wide array of client investment objectives in commodities.”
Christopher Burton, Co-Lead Portfolio Manager of the Credit Suisse Total Commodity Return Strategy, said: “This family of indices complements Credit Suisse’s Total Commodity Return Strategy, developed and managed since 1994 in the Bank’s Asset Management division. It also demonstrates that we are leading the development of investment opportunities in commodities, including but not restricted to passive, long-only strategies.”
