NEW YORK (Commodity Online): Commodities markets may continue to fluctuate over the near term, but outlook remains positive on attractive valuations and inflation hedging benefits.

Andrew Karsh, Co-Lead Portfolio Manager for the Credit Suisse Total Commodity Return Strategy, said, “Despite some mild market trepidation in the beginning of last month, commodity markets continued their upward trend, ending July on a positive note. While macro signals remain mixed in terms of a global economic recovery, our outlook for commodity markets continues to be positive as we compare recent prices to historical highs.”

Co-Lead Portfolio Manager, Christopher Burton, added “A weaker dollar, increased global money supply from stimulus packages, and an emphasis on infrastructure spending have boosted commodity returns with specific momentum in the Industrial Metals sector. We believe that the direction of the markets may continue to be uncertain in the near term, but we remain confident in the inflation hedging benefits of commodities, and therefore continue to believe current prices offer a good entry point into the asset class.”
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The Dow Jones-UBS Commodity Index Total Return gained 3.23% in July, backed by momentum in Industrial Metals, bringing the year-to-date performance to 8.00%. Industrial Metals’ winning streak from the previous months continued into July as low interest rates and the weaker US Dollar held and China continued to build industrial metal reserves. The month’s top performers were components of the Industrial Metals sector, with Nickel up 16.69%, Aluminum up 15.83%, and Copper up 15.49%. Natural Gas had the largest loss in July, down 8.25%, and is the worst performer year-to-date, down 47.01%, due to excess supplies and reduced demand. 

Credit Suisse Total Commodity Return Strategy
Credit Suisse’s Total Commodity Return Strategy has been managed for fourteen 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 a quantitative 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. (Courtesy: Businesswire)