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Press release from PR Newswire

Where Does the Real Value Lie for Fixed Income? Credit Suisse's Asset Management Division Releases New White Paper on Preparing Portfolios for a Post-Treasury-Rally World

Tuesday, May 08, 2012

Where Does the Real Value Lie for Fixed Income? Credit Suisse's Asset Management Division Releases New White Paper on Preparing Portfolios for a Post-Treasury-Rally World10:25 EDT Tuesday, May 08, 2012NEW YORK, May 8, 2012 /PRNewswire/ -- In the current low-growth environment, many investors are faced with the following concern: Where does the real value lie for fixed income? In a new white paper and accompanying video from Credit Suisse's Asset Management division entitled, "Beyond the Core: Preparing Portfolios for a Post-Treasury-Rally World," John Popp, Global Head and Chief Investment Officer of the Credit Investments Group, suggests that in this environment, investors can benefit from an allocation beyond core fixed income, especially at the non-investment grade end of the spectrum. (Logo: http://photos.prnewswire.com/prnh/20091204/CSLOGO ) Whether the recent shift in Treasury yields reflects a short-term event or the beginning of a real reversal, Mr. Popp suggests that the time may be right for investors to evaluate how an eventual rise in interest rates may impact their portfolios. In this environment, a careful migration of fixed income portfolios from duration risk to credit risk may be a prudent step for investors looking to capture additional returns, based on the following assumptions:Prospects of rising interest rates increase duration risk, and we think investors need to start thinking about repositioning their portfolios now to avoid future potential pitfalls;   Although still muted, the strengthening economy has re-ignited inflation concerns; and Fundamentals for non-investment grade credit remain positive (e.g., low default rates, wide spreads and defensive value) despite a relatively sluggish US GDP growth rate. Additionally, corporate balance sheets have experienced material improvements since the 2008 credit crisis, contributing to what may be a low default rate in the medium term. Mr. Popp sees that the favorable real yields and defensive characteristics offered by senior loans and high-yield bonds in particular may warrant an investment in the space. The paper also offers a sample case study that gauges the impact of "moving beyond the core" for the risk-adjusted potential returns of fixed income portfolios. For a copy of "Beyond the Core: Preparing Portfolios for a Post-Treasury-Rally World" or to watch the video, please contact Perrin Wheeler at perrin.wheeler@credit-suisse.com or visit the Asset Management site at www.credit-suisse.com. Credit Suisse AGCredit Suisse AG is one of the world's leading financial services providers and is part of the Credit Suisse group of companies (referred to here as 'Credit Suisse'). As an integrated bank, Credit Suisse offers clients its combined expertise in the areas of private banking, investment banking and asset management. Credit Suisse provides advisory services, comprehensive solutions and innovative products to companies, institutional clients and high-net-worth private clients globally, as well as to retail clients in Switzerland. Credit Suisse is headquartered in Zurich and operates in over 50 countries worldwide. The group employs approximately 49,700 people. The registered shares (CSGN) of Credit Suisse's parent company, Credit Suisse Group AG, are listed in Switzerland and, in the form of American Depositary Shares (CS), in New York. Further information about Credit Suisse can be found at www.credit-suisse.com.Asset Management In its Asset Management business, Credit Suisse offers products across a broad spectrum of investment classes, including hedge funds, credit, index, real estate, commodities and private equity products, as well as multi-asset class solutions, which include equities and fixed income products. Credit Suisse's Asset Management business manages portfolios, mutual funds and other investment vehicles for a broad spectrum of clients ranging from governments, institutions and corporations to private individuals. With offices focused on asset management in 19 countries, Credit Suisse's Asset Management business is operated as a globally integrated network to deliver the bank's best investment ideas and capabilities to clients around the world.All businesses of Credit Suisse are subject to distinct regulatory requirements; certain products and services may not be available in all jurisdictions or to all client types.Copyright 2012, CREDIT SUISSE GROUP AG and/or its affiliates.  All rights reserved.Certain information contained in this document constitutes "Forward-Looking Statements" (including observations about markets and industry and regulatory trends as of the original date of this document), which can be identified by the use of forward-looking terminology such as "may", "will", "should", "expect", "anticipate", "target", "project", "estimate", "intend", "continue" or "believe", or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties beyond our control, actual events, results or performance may differ materially from those reflected or contemplated in such forward-looking statements. Readers are cautioned not to place undue reliance on such statements. Credit Suisse has no obligation to update any of the forward-looking statements in this document.This document was produced by and the opinions expressed are those of Credit Suisse as of the date of writing and are subject to change without obligation to update. It has been prepared solely for information purposes and for the use of the recipient. It does not constitute an offer or an invitation by or on behalf of Credit Suisse to any person to buy or sell any security. Any reference to past performance is not a guide or indicator to future performance. The information and analysis contained in this publication have been compiled or arrived at from sources believed to be reliable but Credit Suisse does not make any representation as to their accuracy or completeness and does not accept liability for any loss arising from the use hereof.SOURCE Credit Suisse AGFor further information: Perrin Wheeler, Credit Suisse, +1 212-325-8978, perrin.wheeler@credit-suisse.com