Following the first monetary tightening by the US Federal Reserve in December, it has become increasingly likely that we will see further increases in borrowing costs and accordingly falling bond prices in 2017. This presents investors with the challenge of achieving sufficient risk diversification for their portfolios, with many key equity benchmarks already at record highs. With the launch of the Credit Suisse (Lux) Multi-Trend Fund, which exploits trends worldwide on a multitude of individual markets in all important investment classes, Credit Suisse wants to provide an alternative for this particular market environment. The UCITS-compliant mutual fund has the ability to generate positive returns in both rising and falling markets. In order to achieve its investment goal, the fund invests exclusively in highly liquid and widely available instruments, such as index or currency futures. It receives its buy or sale signals by observing market trends over short-, medium- and long-term time horizons. This observation process allows the fund to participate in long-term – as well as to react to short-term – market developments.
“Trend-following strategies are an ideal portfolio component in uncertain market phases, since they generate returns regardless of market movements. In this context, the Credit Suisse (Lux) Multi-Trend Fund, as a daily liquid investment product with a low management fee compared to competitors, is suitable for broad investor groups,” says Yung-Shin Kung, Head of Quantitative Investment Strategies at Credit Suisse. Long-term comparisons have shown that including a trend-following strategy in a portfolio can lead to a significantly improved risk-return profile.
The trend-following strategy implemented in the newly created fund has already been used by Credit Suisse for many years. Overall, around USD 400 million are now invested in trend-following strategies. Worldwide, Credit Suisse manages USD 10.5 billion in alternative investment strategies, including USD 2.2 billion in UCITS mutual funds. This makes Credit Suisse one of the biggest providers of liquid funds with alternative investment strategies in Europe.
Facts on Credit Suisse (Lux) Multi-Trend Fund:
USD UB: ISIN LU1517928393
Fund approved for distribution in Switzerland, Germany, Austria, Italy, France, the Netherlands and the United Kingdom
Broadly diversified portfolio strives to generate positive returns for both upward and downward trends on capital markets
Asset development onlyslightly correlates to traditional investment classes – therefore, a preferable option for risk diversification in a portfolio
Investment universe: equity, pension, commodity and currency markets
Fund domicile: Luxembourg
Legal structure: UCITS, SICAV
Fund currency: main currency USD; EUR, CHF and GBP share classes available
Minimum investment: 1 share (private investors); EUR 500,000 (institutional investors)
Management fee: 1.10% (USD UB tranche); 0.90% (USD EB tranche); no performance-based fees
Maximum sales commission: 5.00% (USD UB tranche) or 3.00% (USD EB tranche)
Launch date: 14 December 2016
There is a risk that assets don’t perform as expected, irrespectively of trends in traditional equity and pension markets
The fund offers no capital protection
The fund invests in futures, which leads to transaction costs
The investment strategy can lead to frequent reallocations, which can incur trading costs