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Recession: how to turn the enemy into your best friend

An extreme US yield curve inversion is signaled

The inverted yield curve has been a reliable indicator for an impending economic recession for decades. Many of the world’s major central banks are now expecting to see their respective economies in recession during 2023. Indeed, the World Bank cautions that during 2023 we may see a global recession. The extreme inversion in the US yield curve may point to slightly more than a mild recession in the US. The ECB expects to see a European-wide recession in 2023 that may be mild but lengthy, and the Bank of England has announced that the UK economy is already in recession. The recession bells are ringing and fixed income investors are rebalancing.

Toolkit:
What to invest during a recession

Short Duration Credit

If bonds are used properly, they can support managing portfolio risk with extreme precision in pretty much any investment environment.
This holds true even now, in the current volatile situation.

Commodities

An allocation to commodity markets can provide a differentiated source of return for investors, while also potentially improving their portfolio expectations. Let us explore why.

Convertible Bonds

These are tough times for investment professionals. Right now, every tool and innovative solution is needed. One of those could be convertible bonds. These extraordinary securities are a type of bond like no other. What makes them different is that they can be converted into the shares of the issuing company which gives them unlimited upside potential.

Learn more

Commodities: Cyclical headwinds vs. structural tailwinds

Stefan Graber, Head of Commodities Strategy, Credit Suisse

Investing in Commodities
 

Christopher Burton, Head of Global Commodities, Credit Suisse Asset Management

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Please note the following risks

  • Potential loss: There is no capital protection for investors. They may receive back less than they invested.
  • Market risk: Market conditions can trigger fluctuations in total returns.
  • Exposure to emerging markets: Investments in emerging markets entail greater risks than investments in industrialized countries. These risks include a certain degree of political instability, relatively unpredictable financial markets still in the developmental stage, and dependence on the economic situation.
  • Liquidity risk: Some investments may entail liquidity risk.
  • Foreign currency risk: A given investment’s total value can be adversely affected by exchange rate fluctuations.
  • Company-specific risk: If an investee company becomes insolvent, investors may lose all of their invested capital.

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Please refer to the prospectus/information document of the fund and to the KIID/KID (as applicable) before making any final investment decisions.

The investment promoted in this marketing material concerns the acquisition of units or shares in a fund and not of any underlying assets. The underlying assets are owned by the fund only.

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