The Swiss banking giant's asset management arm's latest offering seeks to generate positive returns in market environments of both falling and rising equity.

Credit Suisse Asset Management has rolled out its Multi-Trend Fund, offering investors “a cost-efficient way to benefit from rising interest rates and high equity variations,” the Swiss firm said in a statement. 

In light of the first bout of monetary tightening by the US Federal Reserve in December, it has become “increasingly likely” that further increases in borrowing costs and falling bond prices are like to occur this year, Credit Suisse said. This presents investors with the challenge of achieving sufficient risk diversification for their portfolios, the firm added.

The new trend-following fund “strives to generate positive returns in market environments of both falling and rising equity, bond, currency and commodity prices,” Credit Suisse said. The UCITS-compliant fund invests exclusively in highly liquid and widely available instruments, such as index or currency futures, and receives its buy or sell signals by monitoring market trends over short-, medium-and long-term time frames.

Domiciled in Luxembourg, the fund has been approved for distribution in Switzerland, Germany, Austria, Italy, France, the Netherlands and the UK. 

However, there is a risk that assets do not perform as expected, regardless of trends in traditional equity and pension markets, Credit Suisse said, adding that the fund offers no capital protection. As the fund invests in futures, there are transaction costs and, because its investment strategy can lead to frequent reallocations, it can incur trading costs.

“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,” said Yung-Shin Kung, head of quantitative investment strategies at Credit Suisse.