Yung-Shin Kung, Managing Director, is Head and CIO of CSAM QIS and one of the industry pioneers in the development and management of liquid alternative investment strategies. Since 2009, he has held various leadership positions in Credit Suisse’s Asset Management area including Head of Portfolio Management – Americas and Global Head of Hedge Fund Research within the Alternative Funds Solutions group. Mr. Kung was a Director at Merrill Lynch in the Financial Products Group from 2006-2009, where he developed and marketed customized structured products and provided advice and guidance to hedge fund investors. Prior to his time at Merrill Lynch, Mr. Kung spent eight years at Credit Suisse First Boston in several departments including structured debt capital markets, technology investment banking, and alternative investments. Mr. Kung began his career at Credit Suisse First Boston in 1997. He served on the Advisory Board of the Rutgers Big Data in San Francisco Certificate Program and is a member of the University of Chicago’s Leaders in Philanthropy. Mr. Kung holds a B.A. in Economics from the University of Chicago, where he was elected Phi Beta Kappa, and fulfilled the college's requirements for a B.A. in Statistics.
Multialternative Strategy
Diversifying your portfolio
Multialternative is our core multistrategy program which seeks to deliver attractive long-term performance with a long-term volatility target of 6-8%, a target beta to equity markets of less than 0.25, while avoiding structural biases to fixed income and credit. The strategy employs well-defined fundamental and tactical trading strategies common to many hedge fund styles that have historically offered diversification benefits to traditional portfolios.
Credit Suisse Multialternative Mutual Fund
Visit the US Mutual Fund webpage below to access fund information and materials.
Why Invest in Multialternative Strategy?
Diversification
The strategy aims to complement the risk and return characteristics of traditional portfolios as a diversifying alternatives allocation
Ways to access include mutual fund
The program generates performance from well-reserched trading strategies, seeking to offer a return profile largely independent of stock and bond markets
Ways to access include mutual fund
Features the simplicity, liquidity, and governance standards of a regulated investment fund
A Multialternative Strategy Introduction
QIS Global Head and CIO Yung-Shin Kung and Investment Specialist Christian Hoffmann describe the role that the Multialternative Strategy can play in investors’ portfolios.
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The Multialternative Strategy’s Investment Approach
The Multialternative Strategy typically makes long and short investments across all major asset classes, with non-traditional investment risks. These range from trading announced corporate mergers spreads (merger arbitrage) in equities, to strategies that seek to profit from the term structure of commodity futures curves, to exploiting the momentum effect in government bonds. The program’s strategies generally seek to limit directional equity, interest rate, and credit risk and may utilize leverage.
In summary, the QIS investment process consists of:
- Selecting a broad universe well-defined, mutually complementary trading strategies;
- Analyzing the current market and probable market regimes over the near-term;
- Forecasting investment returns for the program’s trading strategies across likely market scenarios;
- Actively managing the risk profile of the program; and
- Regularly rebalancing to maintain an optimal portfolio exposure profile considerate of evolving market conditions.
Multialternative Strategy Differentiators
Our approach leverages two decades of experience analyzing and benchmarking hedge fund performance.
Sensibility:
The program’s trading strategies incorporate statistical and economic research. We prefer common sense to complexity, and we’ve traded many of the program’s strategies for over a decade.
Breadth:
The only free lunch in investing is diversification. We focus on maximizing the complementarity of the program’s trading strategies, applying advanced analytical methods and computational techniques to enhance our understanding of how and, consequently, when these strategies relate to one another.
Macro Awareness:
Our research seeks to understand the opportunities available across the program’s trading strategies through the prism of specific economic and market conditions or regimes, which coincide with variations in their performance profiles. We regularly rebalance Multialternative Strategy, deliberately adapting the program’s exposures to prevailing market conditions.
Portfolio Manager
Yung-Shin Kung
Managing Director, is Head and Chief Investment Officer of CSAM QIS
Contact
Important Information about Past Performance: Past performance is not indicative of future results. These materials do not constitute an offer to sell or a solicitation of an offer to buy securities. The fund’s investment objectives, risks, charges and expenses (which should be considered carefully before investing), and more complete information about the fund, are provided in the Prospectus, which should be read carefully before investing. You may obtain copies by calling 800-577-2321.
Important Information about HFM Awards: The HFM awards are judged by a panel of representatives from HFM, leading institutional and private investors and industry experts. Each member of the judging panel had an equal weight in choosing the winners in each category they were assigned and sought to reach a unanimous decision, although a majority was sufficient. Judges focused on absolute performance as well as standard deviation of returns and outperformance of the relevant HFM benchmark. They also took into consideration the relative nature of the investment strategy, track-records, other supporting materials and professional knowledge they had about shortlisted funds to come to their decisions. This methodology ensured the awards reflected how institutional investors assess hedge fund performance in their allocation decisions in the real world. The judges and HFM staff had discretionary power to move submissions into alternative categories that they thought were more suitable, or to disqualify entries. All judges were required to sign a disclaimer form to keep information about entries and the final winners confidential. Please note that Credit Suisse did not pay a fee to be considered for this award. Among the funds that applied to be considered for this award, 3 were shortlisted for the Multi-alternative Risk Premiacategory and Credit Suisse MultialternativeStrategy Fund won the HFM US Quant Award for the category. Date range for the performance numbers submitted to HFM to be considered for this award: Nov 2014 to Oct 2021. Performance used does not account for the impact of sales charge and other fees.
Credit Suisse Asset Management, LLC serves as advisor for the funds. All investments involve some level of risk. Simply defined,risk is the possibility that you will lose money or not make money. Before you invest, please make sure you understand the risks that apply to the fund. As with any mutual fund, you could lose money over any period of time. Investments in the fund are not bank deposits and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Risk Considerations
All investments involve some level of risk. Simply defined, risk is the possibility that you will lose money or not make money. Before you invest, please make sure you understand the risks that apply to the fund. As with any mutual fund, you could lose money over any period of time. Investments in the fund are not bank deposits and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Principal risk factors for the fund include:
- ARBITRAGE OR FUNDAMENTAL RISK: Employing arbitrage and alternative strategies has the risk that anticipated opportunities do not play out as planned, resulting in potentially reduced returns or losses to the fund as it unwinds failed trades.
- BELOW INVESTMENT GRADE SECURITIES RISK: Below investment grade securities (commonly referred to as “junk bonds”) are regarded as being predominantly speculative as to the issuer’s ability to make payments of principal and interest. Investment in such securities involves substantial risk. Issuers of below investment grade securities may be highly leveraged and may not have available to them more traditional methods of financing. Therefore, the risks associated with acquiring the securities of such issuers generally are greater than is the case with higher-rated securities.
- COMMODITY EXPOSURE RISKS: The fund’s and the Subsidiary’s investments in commodity-linked derivative instruments may subject the fund to greater volatility than investments in traditional securities, particularly if the investments involve leverage. The value of commodity-linked derivative instruments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates, or factors affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and international economic, political and regulatory developments. Use of leveraged commodity-linked derivatives creates an opportunity for increased return but, at the same time, creates the possibility for greater loss (including the likelihood of greater volatility of the fund’s net asset value), and there can be no assurance that the fund’s use of leverage will be successful.
- CONCENTRATION RISK: If the Index is or becomes concentrated in a particular industry or group of industries, the fund may invest 25% or more of the value of its total assets in that industry or group of industries to the extent that it is necessary to gain exposure to that industry or group of industries for purposes of approximating the aggregate return of the universe of hedge funds, as represented by the Index. Concentration of investments in a particular industry or group of industries could subject the fund to greater risk of loss and could be considerably more volatile than a broad-based market index or other mutual funds that are diversified across a greater number of industries.
- CREDIT RISK: The issuer of a security or the counterparty to a contract, including derivatives contracts, may default or otherwise become unable to honor a financial obligation. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness also may affect the value of the fund’s investment in that issuer. Non-investment grade securities carry a higher risk of default and should be considered speculative.
- DERIVATIVES RISK: Derivatives are financial contracts whose value depends on, or is derived from, the value of an underlying asset, reference rate or index. The fund typically uses derivatives as a substitute for taking a position in the underlying asset and/or as part of a strategy designed to reduce exposure to other risks, such as interest rate or currency risk. The fund also may use derivatives for leverage. The fund’s use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Derivatives are subject to a number of risks described elsewhere in this Prospectus, such as commodity exposure risks, interest rate risk, market risk and credit risk. Also, suitable derivative transactions may not be available in all circumstances and there can be no assurance that the fund will engage in these transactions to reduce exposure to other risks when that would be beneficial. In December 2015, the SEC proposed a new rule to regulate the use of derivatives by registered investment companies, such as the fund. If the new rule goes into effect, it could limit the ability of the fund to invest or remain invested in derivatives.
- FUTURES CONTRACTS RISK: The risks associated with the fund’s use of futures contracts include the risk that: (i) changes in the price of a futures contract may not always track the changes in market value of the underlying reference asset; (ii) trading restrictions or limitations may be imposed by an exchange, and government regulations may restrict trading in futures contracts; and (iii) if the fund has insufficient cash to meet margin requirements, the fund may need to sell other investments, including at disadvantageous times.
- INTEREST RATE RISK: Changes in interest rates may cause a decline in the market value of an investment. With bonds and other fixed income securities, a rise in interest rates typically causes a fall in values, while a fall in interest rates typically causes a rise in values. The fund may be subject to a greater risk of rising interest rates due to the current period of historically low rates and the effect of potential government fiscal policy initiatives and resulting market reaction to those initiatives. Generally, the longer the maturity or duration of a debt instrument, the greater the impact of a change in interest rates on the instrument’s value. In periods of market volatility, the market values of fixed income securities may be more sensitive to changes in interest rates.
- LEVERAGING RISK: The fund may invest in certain derivatives that provide leveraged exposure. The fund’s investment in these instruments generally requires a small investment relative to the amount of investment exposure assumed. As a result, such investments may cause the fund to lose more than the amount it invested in those instruments. The net asset value of the fund when employing leverage will be more volatile and sensitive to market movements. Leverage may involve the creation of a liability that requires the portfolio to pay interest.
- MARKET RISK: The market value of an instrument may fluctuate, sometimes rapidly and unpredictably. These fluctuations, which are often referred to as “volatility,” may cause an instrument to be worth less than it was worth at an earlier time. Market risk may affect a single issuer, industry, commodity, sector of the economy, or the market as a whole. Market risk is common to most investments – including stocks, bonds and commodities, and the mutual funds that invest in them. The performance of “value” stocks and “growth” stocks may rise or decline under varying market conditions – for example, value stocks may perform well under circumstances in which growth stocks in general have fallen. Bonds and other fixed income securities generally involve less market risk than stocks and commodities. The risk of bonds can vary significantly depending upon factors such as issuer and maturity. The bonds of some companies may be riskier than the stocks of others.
- NON-DIVERSIFIED STATUS: The fund is considered a non-diversified investment company under the Investment Company Act of 1940, as amended (the “1940 Act”), and is permitted to invest a greater proportion of its assets in the securities of a smaller number of issuers. As a result, the fund may be subject to greater volatility with respect to its portfolio securities than a fund that is diversified. capital gains, which would increase their tax liability. Frequent trading also increases transaction costs, which could detract from the fund’s performance.
- RISKS OF INVESTING IN OTHER FUNDS: Other mutual funds and ETFs are subject to investment advisory and other expenses. If a fund invests in other mutual funds or ETFs, the cost of investing in the fund may be higher than other funds that invest only directly in individual securities. Shareholders will indirectly bear fees and expenses charged by the other mutual funds and ETFs in addition to the fund’s direct fees and expenses. Other mutual funds and ETFs are subject to specific risks, depending on the nature of the mutual fund or ETF. Most ETFs are investment companies whose shares are purchased and sold on a securities exchange. An ETF represents a portfolio of securities designed to track a particular market segment or index. An investment in an ETF generally presents the same primary risks as an investment in a conventional fund (i.e., one that is not exchange traded) that has the same investment objectives, strategies and policies. In addition, an ETF may fail to accurately track the market segment or index that underlies its investment objective. The price of an ETF can fluctuate, and a fund could lose money investing in an ETF. Credit Suisse serves as the adviser to other mutual funds in which the fund may invest. It is possible that a conflict of interest among the fund and the other Credit Suisse Funds could affect how Credit Suisse fulfills its fiduciary duties to the fund and the other Credit Suisse Funds. as qualifying income.
- EXCHANGE-TRADED NOTES RISK: ETNs are a type of unsecured, unsubordinated debt security that combines certain aspects of bonds and ETFs. Similar to ETFs, ETNs are traded on a major exchange (e.g., the New York Stock Exchange) during normal trading hours. However, investors can also hold the ETN until maturity. At maturity, the issuer pays to the investor a cash amount equal to the principal amount, subject to the day’s index factor. ETN returns are based upon the performance of a market index minus applicable fees. ETNs do not make periodic coupon payments and provide no principal protection. The value of an ETN may be influenced by time to maturity, level of supply and demand for the ETN, volatility and lack of liquidity in underlying commodities markets, changes in the applicable interest rates, changes in the issuer’s credit rating and economic, legal, political or geographic events that affect the referenced commodity. The value of the ETN may drop due to a downgrade in the issuer’s credit rating, despite the underlying index remaining unchanged. The timing and character of income and gains derived from ETNs is under consideration by the U.S. Treasury and Internal Revenue Service and also may be affected by future legislation.
- FIXED INCOME RISK: The market value of fixed income investments, and financial instruments related to those fixed income investments, will change in response to interest rate changes and other factors, such as changes in the effective maturities and credit ratings of fixed income investments. During periods of falling interest rates, the values of outstanding fixed income securities and related financial instruments generally rise. Conversely, during periods of rising interest rates, the values of such securities and related financial instruments generally decline. Fixed income investments are also subject to credit risk.
- FOREIGN SECURITIES RISK: Investing outside the U.S. carries additional risks that include:
- Currency Risk Fluctuations in exchange rates between the U.S. dollar and foreign currencies may negatively affect an investment. Adverse changes in exchange rates may erode or reverse any gains produced by foreign-currency denominated investments and may widen any losses. The fund may, but is not required to, seek to reduce currency risk by hedging part or all of its exposure to various foreign currencies.
- Emerging Markets Risk The risks of investing in foreign securities are increased in connection with investments in emerging markets. Emerging markets are countries generally considered to be relatively less developed or industrialized. Emerging markets often face economic problems that could subject the fund to increased volatility or substantial declines in value. Deficiencies in regulatory oversight, market infrastructure, shareholder protections and company laws could expose the fund to risks beyond those generally encountered in developed countries. In addition, profound social changes and business practices that depart from norms in developed countries’ economies have hindered the orderly growth of emerging economies and their markets in the past and have caused instability. High levels of debt tend to make emerging economies heavily reliant on foreign capital and vulnerable to capital flight. Countries in emerging markets are also more likely to experience high levels of inflation, deflation, currency devaluation or unemployment, which could hurt their economies and securities markets. For these and other reasons, investments in emerging markets are often considered speculative.
- Information Risk Key information about an issuer, security or market may be inaccurate or unavailable.
- Political Risk Foreign governments may expropriate assets, impose capital or currency controls, impose punitive taxes, or nationalize a company or industry. Any of these actions could have a severe effect on security prices and impair the fund’s ability to bring its capital or income back to the U.S. Other political risks include economic policy changes, social and political instability, military action and war.
- FORWARDS RISK: Forwards are not exchange-traded and therefore no clearinghouse or exchange stands ready to meet the obligations of the contracts. Thus, the fund faces the risk that its counterparties may not perform their obligations. Forward contracts also are not regulated by the Commodity Futures Trading Commission (the “CFTC”) and therefore the fund will not receive any benefit of CFTC regulation when trading forwards.
- SMALL- AND MID- CAP STOCK RISK: The fund may invest in small- and mid- cap stocks. Stocks of small-cap companies, and to a lesser extent, mid-cap companies, may be more volatile than, and not as readily marketable as, those of larger companies.
- SPECULATIVE EXPOSURE RISK: Gains or losses from speculative positions in a derivative may be much greater than the derivative’s original cost. For example, potential losses from commodity-linked swap agreements and from writing uncovered call options are unlimited.
- SUBSIDIARY RISK: By investing in the Subsidiary, the fund is exposed indirectly to the risks associated with the Subsidiary’s investments. The derivatives and other investments held by the Subsidiary are generally similar to those that are permitted to be held by the fund and are subject to the same risks that apply to similar investments if held directly by the fund. These risks are described elsewhere in this Prospectus. There can be no assurance that the investment objective of the Subsidiary will be achieved. The Subsidiary is not registered under the 1940 Act, and, unless otherwise noted in this Prospectus, is not subject to all the investor protections of the 1940 Act. However, the fund wholly owns and controls the Subsidiary, and the fund and the Subsidiary are both managed by Credit Suisse, making it unlikely that the Subsidiary will take action contrary to the interests of the fund and its shareholders. The fund’s Board of Trustees has oversight responsibility for the investment activities of the fund, including its investment in the Subsidiary, and the fund’s role as sole shareholder of the Subsidiary. The Subsidiary will be subject to the same investment restrictions and limitations, and follow the same compliance policies and procedures, as the fund. Changes in the laws of the United States and/or the Cayman Islands could result in the inability of the fund and/or the Subsidiary to continue to operate as it does currently and could adversely affect the fund.
- SWAP AGREEMENTS RISK: Swap agreements involve the risk that the party with whom the fund has entered into the swap will default on its obligation to pay the fund and the risk that the fund will not be able to meet its obligations to pay the other party to the agreement.
- TAX RISK: In order to qualify as a Regulated Investment Company (a “RIC”) under the Internal Revenue Code of 1986, as amended, the fund must meet certain requirements regarding the source of its income, the diversification of its assets and the distribution of its income. The Internal Revenue Service has issued a ruling that income realized directly from certain types of commodity-linked derivatives would not be qualifying income. As a result, the fund’s ability to realize income from investments in such commodity-linked derivatives as part of its investment strategy would be limited to a maximum of 10% of its gross income. To comply with the ruling, the fund seeks to gain exposure to the commodity markets primarily through investments in the Subsidiary, which invests in commodity-linked swaps, commodity futures and other derivatives, and directly through investments in commodity index-linked notes. If the fund fails to qualify as a RIC, the fund will be subject to federal income tax on its net income at regular corporate rates (without reduction for distributions to shareholders). When distributed, that income also would be taxable to shareholders as an ordinary dividend to the extent attributable to the fund’s earnings and profits. If the fund were to fail to qualify as a RIC and became subject to federal income tax, shareholders of the fund would be subject to diminished returns. The fund anticipates treating income and gain from the Subsidiary and from commodity-linked notes as qualifying income.
- PORTFOLIO TURNOVER RISK: Active and frequent trading may lead to the realization and distribution to shareholders of higher short-term.