Nelson Louie, Global Head of Commodities in Credit Suisse’s Asset Management division, said, “After a tough second half for 2011, many commodities have reversed part of the slump over the past month. It is starting to look more likely that the global economy has been more resilient than many had expected and that some of the downside risks have decreased, which could be supportive for global commodity consumption in 2012. Fundamentals for key commodities remain positive and the commodity markets continue to be susceptible to global supply shocks. For example, ongoing tensions with Iran have led to US and EU sanctions. While the evolution of this process is unpredictable, the potential for a reduction in supply of Crude Oil is elevated.”

Christopher Burton, Senior Portfolio Manager for the Credit Suisse Total Commodity Return Strategy, added, “The Federal Reserve has confirmed once again it will maintain its extraordinarily loose monetary policy. Signs of an economic recovery in the US and abroad are starting to materialize. However, the US Central Bank will be in no hurry to raise rates and possibly choke the budding recovery. The odds of inflation overshooting expectations remain elevated, and commodities have historically tended to outperform during periods of higher than expected inflation. We believe investors will continue to benefit from the inflation protection and diversification potential of holding diversified commodities exposure within a portfolio of traditional assets.”

The Dow Jones-UBS Commodity Index Total Return was up by 2.47% in January. Overall, 14 out of 20 index constituents increased in value. Precious Metals was the best performing sector, up 12.69%, with both Gold and Silver delivering double-digit returns after the Federal Reserve announcement. Industrial Metals increased, up 10.92% for the month, supported by an improved macro-economic backdrop and continued draws in London Metals Exchange warehouse inventories. Livestock also increased, up 2.30%, as Live Cattle benefited from tighter than expected inventory levels, and both Lean Hogs and Live Cattle continued to be supported by strong export demand. Agriculture was relatively unchanged, down 0.67%. The USDA's January Corn inventory estimates were much higher than the market anticipated. However, strong export sales helped lead to a recovery. The estimate for winter wheat seedings was higher than last year and also much higher than expected. A blast of cold weather in Europe caused concerns over crop damage, which also supported the complex late in the month, especially for Wheat. Energy ended the month down 3.47%, led by Natural Gas. However, petroleum products and Brent Oil posted positive returns following the announcement of the proposed EU embargo on oil imports from Iran. Petroleum demand continued to soften compared to last year, as unprecedented warm weather in the US and Europe weighed on heating related demand.

The Credit Suisse Total Commodity Return Strategy group periodically produces updates on relevant industry topics. For a copy of the team’s white paper, “Commodities Outlook: Increased Volatility, Increase Opportunity?” , please contact your Credit Suisse Relationship Manager.

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 January 31, 2012 the team managed approximately USD 10.6 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.