Q2 2012 Market Commentary on European ETFs · 2019-06-27 · Q2 2012 were USD 139m –just a fraction of the USD 8.2bn seen in Q2 2011. The ongoing eurozone crisis weighed heavily

$Page 1: Q2 2012 Market Commentary on European ETFs · 2019-06-27 · Q2 2012 were USD 139m –just a fraction of the USD 8.2bn seen in Q2 2011. The ongoing eurozone crisis weighed heavily$
Summary Total inflows into the European ETF market in

Q2 2012 were USD 139m – just a fraction of theUSD 8.2bn seen in Q2 2011. The ongoingeurozone crisis weighed heavily on investorsentiment in the region. Although European ETFsfared relatively better in Q2 than other investmentproducts such as mutual funds and hedge funds,they were outperformed by the market in the US,which appears set for its best year ever as netETP inflows for June alone were just over USD21bn.

At the end of June, the European ETF marketrecorded total assets of USD 277.34bn, up 4.91%from USD 264.36bn at the end of the previousmonth. This compares with a 4.93% rise in theMSCI World index over the same period. ETFinflows for June, however, were USD 1.6bn – anapproximate 50% fall from those seen in May.

For professional and qualified investors only

Q2 2012 Market Commentaryon European ETFs

Eurozone crisis weighsheavily on European ETFinflows as investorsretreat

Q2 2012

Ursula Marchioni Head of Credit Suisse ETF Sales Strategy, LondonPhone: +44 20 7883 8061Email: [email protected]

Nicholas LowCredit Suisse ETFs Sales Strategy, LondonPhone: +44 20 7883 8799Email: [email protected]

2/20 Market Commentary on European ETFs

With company balance sheets loaded with cash and default levels relatively low,investors were clearly opting for the relative security of corporate bond trackers andfunds offering access to emerging market debt instruments, which brought the balanceof Q2 inflows into fixed income ETFs to USD 1.6bn. Money market ETFs also saw areversal of their negative performance in Q1, with inflows rising to USD 360m, betweenApril to June.

In contrast, equity trackers were severely challenged, with outflows of USD 1.9bn inQ2. This was largely concentrated in April and focused on redemptions in emergingmarket trackers, although the effects of client reallocation around the dividends seasonalso played a significant role. Single country trackers such as Russia were net losersover the three months, although not completely offsetting a robust performance in Q1.The pick-up in developed market global exposure to equities in the US and Europetowards the end of the quarter appeared to be linked to one of the periodic upswingsin optimism over a political breakthrough in the Eurozone crisis.

Investments into commodity-based trackers were almost flat over Q2 with outflows ofUSD 13m, compared with net inflows of USD 916m in the previous quarter. Most ofthe outflows were concentrated in May (USD 773m), and were only partially offset byinflows of USD 518m in June, possibly reflecting a partial return in investor appetite forprecious metal trackers.

Over Q2 and year-to-date, the overall picture for European ETF providers remains thesame, with iShares, Source and Amundi recording the highest inflows, while Lyxor, dbx-trackers and Comstage sustained the highest outflows.

Source: CS ETF Sales Strategy, Bloomberg, 30.06.2012

European ETFs:

AUM Overview

3/20Market Commentary on European ETFs

ETF AUM (USD m) ETF NNA (USD m)

Asset class # Funds End Jun 2012 End Jun 2012 Vs previousmonth end (%)

Jun 2012 Previousmonth

YTD 2012

Asset Allocation 37 1,751 2.31% 1 -100 211

Commodity 121 29,726 4.51% 518 -773 903

Debt 263 54,641 1.06% -226 935 3,650

Equity 996 183,801 6.10% 1,005 2,816 2,103

Money Market 15 5,039 8.45% 305 336 -895

Real Estate 14 2,384 6.08% 3 20 196

Total 1,456 277,342 4.91% 1,606 3,234 6,167

AUM evolution of ETFs domiciled and listed in Europe (USD bn)


0

50

100

150

200

250

300

350

Asset Allocation Debt EquityMoney Market Real Estate Commodity

Jun-

12

May

-12

Apr

-12

Mar

-12

Feb-

12

Jan-

12

Dec

-11

Nov

-11

Oct

-11

Sep

-11

Aug

-11

Jul-1

1

Jun-

11

May

-11

Apr

-11

Mar

-11

Feb-

11

Jan-

11

Dec

-10

283 284292 299

320 312 313 316293

262

285272 270

286 300 289300

264277

During June, European ETFs recorded inflows of USD 1,606m, approximately 50%of the inflows recorded the previous month. Some 66% of the total AUM was investedin equity trackers, followed by 20% in debt ETFs and 11% in commodity ETFs. A totalof 1,456 funds domiciled and listed in Europe were reviewed of which 68% wereequity ETFs, 18% debt trackers and 9% commodity ETFs.

The sluggish picture of ETF market growth in Europe is in marked contrast to thesituation in the US, with net ETP inflows of USD 21bn seen in June. While USD 14bnin equity ETP creations suggests a healthy appetite for risk in the US, it’s likely that anumber of index rebalances over the month also influenced market activity. Through thefirst half of 2012, US listed and domiciled ETPs have accumulated USD 82 bn in newassets, setting the stage for this year to potentially challenge the USD 173 bn ofaccumulated inflows achieved in 2008 (historically ETP flows in the latter half of the yeartend to be greater than in the first-half – evidenced over the past six years).



0

2000

4000

6000

8000

10000

Asset Allocation Commodity DebtEquity Money Market Real Estate

-6000

-4000

-2000

Jun-

2012

May

-201

2

Apr

-201

2

Mar

-201

2

Feb-

2012

Jan-

2012

Dec

-201

1

Nov

-201

1

Oct

-201

1

Sep

-201

1

Aug

-201

1

Jul-2

011

Jun-

2011

May

-201

1

Apr

-201

1

Mar

-201

1

Feb-

2011

Jan-

2011

4,480

1,335

3,577 3,157 2,412 2,597

8,332

-1,823-152

-214

-2,183

-3,291

3,074

1,375 1,579

-4,701

3,234

1,606

Net New Assets Overview

Q1 2011 Q2 2011 Q3 2011 Q4 2011 2011 Q1 2012 Q2 2012 YTD 2012

Asset Allocation -22 -136 -260 -36 -454 266 -55 211Commodity 1,568 -192 1,336 332 3,045 916 -13 903Debt -898 1,032 296 -2,528 -2,098 1,984 1,666 3,650Equity 7,856 8,278 4,366 -3,578 16,922 3,993 -1,891 2,103Money Market 849 -910 759 84 783 -1,255 360 -895Real Estate 40 95 -140 38 32 124 72 196Total (USD m) 9,393 8,167 6,357 -5,687 18,230 6,028 139 6,167


NNA in ETFs domiciled and listed in Europe, per quarter and asset class

Monthly Net New Assets (NNA) in ETFs domiciled and listed in Europe, per asset class (USD m)

At the end of Q2, European equity ETFs managed AUM of USD 183,801m, mostlyin single country funds (47%). In terms of net new assets, June saw inflows of USD 1,005m in European equity ETFs – a decrease of 64.3% compared with May.Total outflows for Q2 amounted to USD 1,891m.

This poor performance stemmed largely from a slowdown in investor appetite foremerging market trackers. Sector funds focused on financials, and Asian fundswere also hit by redemptions over the quarter. Although European ETFs recordedsolid inflows in Q2 at the regional and country level (particularly France andGermany) and global and US trackers performed well, this was not enough tosecure a positive overall NNA figure for Q2.

The positive NNA trend in Euro equity trackers in June appeared to coincide withone of the periodic upsurges in optimism over a political breakthrough in theEurozone crisis and a consequent view that securities were undervalued.− Euro region-focused funds recorded aggregate inflows of USD 1,145m in June.− German and French country-focused funds recorded inflows of USD 202m and

USD 116m respectively. Year-to-date, the main NNA consolidated trends were:

− Emerging market trackers remain top of the list in terms of NNA, as stronginvestor appetite in Q1 was not completely offset in Q2. The balance for the yearamounted to inflows of USD 1,179m into global EM exposures, coupled withadditional inflows into single countries – specifically Russian trackers (inflows ofUSD 269m).

− Global developed market equities and the US also appeared to be winners in withUSD 987m and 516m inflows of NNA YTD respectively. Japan and Canada alsosaw positive investor interest over the period.

− The picture for trackers in European equities remains mixed, with an upticktowards the end of the second quarter offset by bearish sentiment in the earliermonths of the year.

− Strategy funds also closed the first-half positively – specifically those focused ongrowth (USD 470m) and growth and income (USD 328m).

− Sector ETFs continued to be out of favour, with total YTD outflows of USD 863m.


European Equity ETFs:

Assets and Flows in Detail


The European ETF provider landscape remained stable and little changed over thefirst-half of 2012 with a general uptick in AUM across all companies. The “top five”providers remain firmly in place with a total 78.60% market share.

AUM of top ten providers of ETFs domiciled and listed in Europe (USD m)


June 2012 market share by AUM of providers of ETFs domiciled and listed in Europe


In terms of both YTD and Q2 2012 NNA performance, the picture remains thesame with iShares, Source and Amundi recording the highest inflows, while Lyxor,db x-trackers and ComStage sustained the highest outflows.− The diversified product offering from iShares contributed to its current standing,

most notably the credit offering (corporate ex financials, USD high yield, USDcorporate and EM bonds) as well as broad equity offerings from the MSCI Worldto MSCI EM indices.

− Source was the provider of choice for alternative strategies – mainly Voltage, avolatility linked strategy, and the HF-related offering.

− Amundi recorded inflows into their European equities range, spanning theEuroStoxx 50, CAC40 and MSCI EMU indices.

The continuing trend of investor preference for physically replicated funds isapparent throughout the last quarter and YTD.

0

20000

40000

60000

80000

100000

120000

End June 2012 End May 2012

Juliu

s B

aer

Com

Sta

ge

Sou

rce

Am

undi

ETF

UB

S A

M

ZKB

CS

ETF

s

Lyxo

r AM

db x

-tra

cker

s

iSha

res

European ETF Providers

iShares41.05%

db x-trackers14.60%

Lyxor 11.93%

CS ETFs5.75%

ZKB5.27%

UBS 3.83%

Amundi ETF3.38%

ComStage2.33%

Julius Baer2.21%

Source2.31%

Others7.34%

AUM of top ten providers of ETFs domiciled and listed in Europe


Monthly NNA of ETFs domiciled and listed in Europe, per replication method (USD m)


0

2000

4000

6000

8000

10000

Physical replication Synthetic replication

-10000

-8000

-6000

-4000

-2000

Jun-

2012

May

-201

2

Apr

-201

2

Mar

-201

2

Feb-

2012

Jan-

2012

Dec

-201

1

Nov

-201

1

Oct

-201

1

Sep

-201

1

Aug

-201

1

Jul-2

011

Jun-

2011

May

-201

1

Apr

-201

1

Mar

-201

1

Feb-

2011

1,452

-116

1,6472,342

2,759787

2,410

1,753 1,910 303 450

1,31181

1,9883,666

1,9901,931815

-347

1,810

5,922

-3,576-2,124

-2,486-3,740

-163

1,7631,294

-409-3,614

-432 -384

-1,057

Providers AUM (USD m) NNA (USD m)End Jun 2012 Market share

(%)Q1

2012Q2

2012YTD

2012

iShares 113,862 41.05% 4,139 1,786 5,925db x-trackers 40,489 14.60% -262 -1,228 -1,490Lyxor 33,090 11.93% 401 -1,432 -1,031CS ETFs 15,938 5.75% -247 181 -66ZKB 14,611 5.27% -147 319 173UBS 10,619 3.83% 869 -238 631Amundi ETF 9,383 3.38% 249 452 701Source 6,453 2.33% 1,051 539 1,590ComStage 6,403 2.31% -677 -220 -898Julius Baer 6,139 2.21% 117 47 164


European Equity ETFs:


Asset Class # Funds ETF AUM (USD m) ETF NNA (USD m)End Jun 2012 % vs previous month end End Jun 2012 YTD

Equity 996 183,801 6.10% 1,005 2,103Country Fund 291 86,782 6% 381 70Australia 5 761 -8% -40 -64Austria 1 47 7% 1 -2Belgium 1 36 9% 0 2Brazil 10 1,592 1% 14 186Canada 9 806 1% -15 297China 18 2,432 -6% -174 -33France 15 4,890 15% 202 -390Germany 15 26,144 5% 116 -573India 11 1,591 4% -42 -24Indonesia 4 152 5% 0 9Italy 11 1,147 15% 15 26Japan 27 5,899 6% 7 386Malaysia 3 90 -6% -6 -19Mexico 4 117 20% 7 21Netherlands 6 502 7% -1 3Philippines 1 35 38% 8 6Russia 9 1,958 7% -25 269South Korea 7 808 0% -18 -137Spain 8 32 20% 0 12Sweden 12 2,028 8% 24 -54Switzerland 11 2,261 2% -64 -341Thailand 3 53 8% 3 29UK 36 10,570 7% 14 -53US 64 23,331 5% 357 516Strategy Fund 163 38,153 4% -167 3,404Contrarian 21 1,857 -5% -37 324Derivative 1 16 2% 0 0Emerging Market Equity 40 16,076 2% -321 1,179Global Equity 40 10,066 10% 311 987Growth 18 689 -21% -104 470Growth and Income 6 1,785 6% 42 328Growth Large Cap 9 3,712 5% -31 -259Growth Mid Cap 4 996 -3% -72 11Growth Small Cap 1 3 7% 0 0Income Equity 5 2,300 8% 20 200International Equity 6 71 -12% -11 38Value 5 154 11% 2 23Other 7 428 12% 33 103Regional Fund 226 43,621 9% 615 -508Africa 3 143 -3% -6 6Asia Pac Ex Japan 27 3,934 0% -139 -251Asia Pacific 9 1,711 -1% -76 -113Eastern Europe 5 742 20% 39 -11Euro Countries 33 17,802 14% 742 -913Europe 82 10,401 10% 273 739Europe Ex UK 3 708 8% -1 53European Union 10 2,421 16% 130 -237Geo Focused Equity 36 1,996 5% -20 56Iberia 1 0 n.a. 0 0Latin America 11 1,025 6% -106 217Middle East 1 5 -2% 0 0Nordic 3 632 1% -37 -8North America 2 2,101 -5% -184 -46




Sector Fund 316 15,246 7% 177 -863Blend 2 38 109% 13 13Commodity 1 63 0% -2 -15Energy 22 992 4% -20 -169Environmentally Friendly 4 140 7% 1 8Islamic Equity 5 133 5% 0 -34Financial Services 29 1,879 19% 95 160Food & Beverage 7 523 6% -2 -126Gaming & Entertainment 1 24 9% 0 0Health & Biotech 15 1,073 20% 115 -170Internet & Telecom 14 548 19% 42 -229Leisure Industry 4 52 -5% -6 -7Precious Metals 4 373 22% 66 -11Real Estate 15 1,990 11% 53 251Religiously Responsible 1 12 7% 0 0Technology 15 381 -3% -22 -44Undefined Equity 161 6,062 -1% -222 -513Utility 16 964 17% 66 22



Debt tracker funds managed USD 54,641m in 263 funds and saw USD 226m ofoutflows in June – bringing the balance of YTD NNA to a record USD 3,650m ofinflows.

The recurrent theme of investor preference for corporate, EM bonds and regionalfocused fixed income trackers (i.e. Germany) at the expense of DM sovereignexposure continues.

European Debt ETFs:



Debt 263 56,641 1% -226 3,650Asset Backed Securities 1 220 -3% -5 40Corporate High Yield 1 104 26% 17 25Corporate 13 2,885 2% 27 -35Corporate/Preferred 14 4,122 5% 196 1,766Corporate/Preferred High Yld 2 23 5% 0 -5Corporate/Preferred Inv Grade 2 909 -3% -45 163Emerging Market Debt 9 3,044 10% 170 1,214Global Debt 8 1,328 3% 10 176Government 12 3,973 2% 64 9Government/Agency 26 2,199 1% -13 138Government/Corporate 4 212 18% 25 3Govt Intermediate Term 6 1,919 -5% -137 -89Govt Long Term 10 1,392 -7% -108 -340Govt Short Term 3 1,555 -2% -71 -727Govt/Agency Intermediate Term 18 1,306 -5% -90 61Govt/Agency Intermediate/Long 2 411 0% 0 28Govt/Agency Long Term 11 294 -15% -47 -140Govt/Agency Short Term 16 2,065 -2% -61 -156Govt/Agency Short/Intermediate 2 738 -1% -16 170Growth 3 78 -15% -13 -16Index Fund-Debt 1 12 -1% 0 0Region Fund Geo Focused Debt 85 24,692 1% -5 1,511Sector Fund Debt 14 1,161 -8% -125 -147



Credit Suisse ETFs:

Assets and Flows

Assets under management in Credit Suisse ETFs at the end of June totalled USD15.94bn, up 4.98% with respect to the end of May.

At the end of June, three CS ETFs exceed USD 1bn in AUM, and six additional fundsheld more than USD 0.5bn, out of a total of 58 funds listed across Europe.

AUM evolution of CS ETFs (USD m)

Source: CS ETFs Sales Strategy, Bloomberg, 30.06.2012

Top 10 CS ETFs in terms of AUM (June vs. May) (USD m)


0

5,000

10,000

15,000

20,000

Commodity DebtEquity Money Market

Jun-

2012

May

-201

2

Apr

-201

2

Mar

-201

2

Feb-

2012

Jan-

2012

Dec

-201

1

Nov

-201

1

Oct

-201

1

Sep

-201

1

Aug

-201

1

Jul-2

011

Jun-

2011

May

-201

1

Apr

-201

1

Mar

-201

1

Feb-

2011

Jan-

2011

0 500 1000 1500 2000 2500 3000 3500

AUM May AUM Jun

CS ETF on SMI

CS ETF on MSCI Japan

CS ETF on SBI Dom Gov 3–7

CS ETF II on Gold-Hdg CHF

CS ETF on S&P 500

CS ETF on MSCI EMU

CS ETF on SMIM

CS ETF on MSCI Emerging Mrkts

CS ETF II on Gold

CS ETF on SLI 464489

533556

624627

615690

662716

785865

962964

1,3261,357

1,5201,559

3,2043,358


NNA of CS ETFs (USD m)

NNA of CS ETFs


In June 2012, Credit Suisse ETFs recorded inflows of USD 32m – bringing theYTD balance to net outflows of USD 66m.− Inflows of USD 181m recorded in Q2 2012 countered the outflows of USD 247m

in Q1 2012.− The reversal of this trend was mainly due to the uptake in gold ETFs most

notably in April totaling USD 350m. − Gold is now the top performing fund on the Credit Suisse platform in terms of

Q2 and YTD NNA.− The Credit Suisse DM equities range also performed well in terms of Q2 NNA –

a reflection of the broader trend observed at the European level. MSCI EMU,FTSE 100 and MSCI World all recorded inflows. On the other hand, Swissequities were out of favour and Q2 ended with outflows of USD 232m from thisequity range.

A partial explanation of the net outflows for Credit Suisse ETFs so far in 2012 isbased on in the reversal of the positive trend in EM equities NNA recorded in Q1 inthe second three months of the year. The Credit Suisse ETF on MSCI EM rankssecond on the platform in terms of YTD NNA – but it was flat in Q2. This againreflects the broader trend in the markets as investors adopted a more cautiousapproach to emerging markets against the background of a global economicslowdown.

The Credit Suisse range of debt ETFs recorded slightly positive flows in Q2 (USD 29m).


0

200

400

600

Commodity DebtEquity Money Market

-600

-400

-200

Jun-12May-12Apr-12Mar-12Feb-12Jan-12Dec-11Nov-11Oct-11Sep-11Aug-11Jul-11Jun-11May-11Apr-11Mar-11Feb-11Jan-11

21

317

114

430

295 303

457

-176

48

5953

-520

152

-177-221

316

-167

32

Jan2011

Feb2011

Mar2011

Apr 2011

May2011

Jun 2011

Jul 2011

Aug2011

Sep2011

Oct2011

Nov2011

Dec2011

Jan2012

Feb2012

Mar2012

Apr2012

May2012

Jun2012

Money Market – 12 11 36 – 18 – – – 75 7 -21 – -34 -38 -12 -9 0 Equity 76 393 54 380 309 241 317 -126 -150 -5 37 -210 215 -175 -234 -36 -181 -15Debt -28 -104 -22 17 12 32 87 -202 19 -34 7 14 -25 -7 31 14 12 3Commodity -27 17 71 -3 -24 12 54 151 179 24 2 -303 -38 39 20 350 10 44Total (USD m) 21 317 114 430 296 303 457 -176 48 59 53 -520 152 -177 -221 316 -167 32



European Launches of the Month

Smart beta strategies were popular among ETF providers in the European marketin June, with six funds launched:− Lyxor created two alternative weighted ETFs based upon variations of

established indices (EuroStoxx 50 and MSCI World), which employ riskweighting methodologies

− Julius Baer launched four active equities based funds – a small revolution in theEuropean ETF space and a nod to experiments in the US ETF market. Accordingto the managers’ own published information, the funds aim to outperform theirbenchmarks by combining two proprietary systematic strategies in one portfolio toexploit price trends and valuation anomalies – systematic trend and systematic valueapproaches.


Ticker Name Benchmark Domicile InceptionDate

Fund Type

ERC FP LYXOR ETF SMARTIX EURO ISTOX EiSTX 50 ER EUR Net Luxembourg 26.06.2012 Exchange Traded FundsWLDRFP LYXOR ETF MSCI WORLD RISK WE MSCI World Risk Wgt Nt $ Luxembourg 26.06.2012 Exchange Traded FundsJB6E GR JB SMARTEQY ETF EUROPE MSCI Daily Net TR Europe Euro Luxembourg 29.06.2012 Exchange Traded FundsJB6M GR JB SMARTEQ ETF EMERGING MRK MSCI Daily TR Net Emerging Mar Luxembourg 29.06.2012 Exchange Traded FundsJB6A GR JB SMARTEQUITY ETF ASIA MSCI Daily TR Net AC Asia Paci Luxembourg 29.06.2012 Exchange Traded FundsJB6W GR JB SMARTEQUITY ETF WORLD MSCI AC World Daily TR Net USD Luxembourg 29.06.2012 Exchange Traded Funds


Credit Suisse Private Banking Global Research

Europe works towards debt crunch resolution but implementation risk remains

The Credit Suisse Private Bank and Asset ManagementInvestment Committee (IC) – chaired by Stefan Keitel, CIOPrivate Banking and Asset Management & Global Co-HeadMACS and Giles Keating, Head of Research for PrivateBanking and Asset Management – met on July 11th to reviewmarket reactions to the latest EU summit, and n-th iteration ofthe discussion.

In the IC‘s view, the initial enthusiasm that followed the summithad already given way to some skepticism by the time of theirmeeting.

Stefan Keitel and Giles Keating believe the key measures, i.e.direct Spanish bank recapitalization in return for a central banksupervisory and resolution mechanism, are likely to eventuallybe passed.

In the short term though, they see markets focusing onimplementation risks (incl. the German Constitutional Court'sEuropean Stability Mechanism [ESM] verdict) and on the weakoutlook for Spain.

Despite these uncertainties, the IC adheres to the corescenario of crisis containment, by means of direct EuropeanCentral Bank (ECB) intervention if necessary.

Despite the global economy still slowing, the IC sees easymonetary conditions and lower oil prices as a suggestion forstabilization. In the IC’s view corporate earnings should alsoachieve their much reduced targets, while valuations areundemanding.

From a tactical perspective (a 1-6 months horizon), the ICcontinues to see an outperformance of equities and real estateand an underperformance on fixed income. In view of the slowgrowth environment, the IC has however downgradedcommodities to neutral.

The strategic view, on a 6-12 months horizon, remains one ofover-performance for all asset classes except fixed income.

Source: Credit Suisse Investment Committee

At macro level, the IC highlights the slow progress on theEurozone banking resolution process, and on the issue thatSpain may yet require a broader bailout.

The team acknowledges that the majority of indicators suggestthat the global economy and trade are still slowing, and thatinflation is declining fast, especially in China. The IC therefore seesmore monetary easing ahead – and, given continued weakness ofthe labour market, QE3 by the Federal Reserve to be more likely.

US nonfarm payrolls

US nonfarm payroll growth continues to disappoint and highlights a key

concern of policy makers. Several Fed speakers have pointed to more

asset purchases recently.

Source: Bloomberg, Credit Suisse

Business surveys: Emerging vs. developed markets

The latest PMI numbers continue to paint a more positive picture in emerging

markets than in advanced economies, but order intake has weakened in both.

Source: PMI Premium Bloomberg, Credit Suisse

Focusing on equities, the IC expects Q2 earnings results to besluggish, with only modest growth thereafter. The weak outlookappears to be largely recognized, based on corporate guidance,analyst earnings revisions and valuation metrics. Sentimentindicators are mixed.

In the IC’s view, worries around US growth have increased;nevertheless it acknowledges that history suggests a sub-50ISM new orders reading is not a reason to get bearish.

Strategic and Tactical CornerTactical view

(1–6 months)Strategic view

(6–12+ months)Fixed Income Equities AI: Commodities AI: Real Estate

400300200100

0-100-200-300-400-500-600-700-800

02 03 04 05 06 07 08 09 10 11 12

US nonfarm payrolls, monthly change (’000)

Average 2002 – 2007

60

50

40

30

2006 07 08 09 10 11 12

Index

EM8 (excl. Indonesia) - PMI new ordersG3 - PMI new orders


History suggests the recent below 50 reading on the ISM new

orders index…

… is not a reason to get bearish

Source: DataStream, Credit Suisse (ISM troughs of Sep 84, Jun 95, Oct 98, Mar 03)

At index level, the IC remains positive overall on the UK – amarket that has enjoyed a decent outperformance run in recentweeks. Very aggressive monetary policy continues to providesupport – while only select pockets of the euro area and EM arecheaper than the UK on 12-month forward P/E ratio.

Equally, emerging markets are ranked positively from afundamental perspective. China's latest rate cut and continueddecline in inflation bode well for our "soft landing" call. EMcontinues to trade very cheaply relative to developed markets,particularly considering outsized growth prospects.

With respect to fixed income, there’s no significant change in theIC’s views.

With yields close to all-time lows in a prevailing flight-to-qualityenvironment, the IC continues to find the 10Y governmentbenchmark bonds unattractive.

The IC expects the ESM capabilities, plus recent central bankactions and initial steps toward a common EMU bankingsupervisor to help limit severe downside risks.

The IC has increased exposure to high yield and emergingmarket credits.

High yield and emerging markets (hard curr.) spread

HY and EM to exhibit superior return characteristics

Source: Bloomberg, Credit Suisse, BoA/Merrill Lynch

Finally, with respect to gold, the expansive monetary policy is apositive, but cautious technical indicators are limiting upsidepotential for now.

140

130

120

110

100

90-12 -8 -4 0 4 8 12

Global equity market performance

point of ISM trough

Average performance during past* mild slowdowns (ISM manufacturing new orders index falls below 50 but not below 40)Current performance

months (zero represents month of ISM new orders trough)

470

420

370

320

270

220Jul 2009 Jul 2010 Jul 2011Jan 2010 Jan 2011 Jan 2012

930

880

830

780

730

680

630

580

530

480

430

ML EM Global Sovrg. Plus (HC) OA SpreadML HY Corp Master II OA Spread (rhs)

Tactical view: Equities (Inputs: Technicals /Fundamentals )

Source: MSCI Barra, Credit Suisse. Indices as of close of 9 July 2012

Equity Indices MSCIOutlook: 1–6M total return rel. to world Inputs

Current Overall Comments 12M Fwd PE Tech. Fund.MSCI USA 1,290 After an impressive outperformance run, the US has traded flat relative

to the MSCI world index in recent months. The decline in economicmomentum has contributed to the recent soggy performance.

11.7

MSCI Europe 1,035 The trend in euro area equity market relative performance remains veryweak. However, the region has tentatively stopped underperforming, inlarge part due to weakness of the euro.

10.0

MSCI UK 1,669 The UK market has enjoyed a decent outperformance run in recentweeks. Very aggressive monetary policy continues to provide support.Only select pockets of the euro area and EM are cheaper than the UKon 12-month forward P/E.

10.1

MSCI Japan 468 Some domestic growth indicators in Japan have hooked up, and Japan is theglobal earnings momentum ‘bright spot’ at present. However, the main driverof outperformance in the past several weeks has been the weaker yen.

11.5

MSCI Australia 837 Relative performance has suffered in recent weeks on renewed AUDstrength. We expect that RBA cuts will lead to upward analyst earningsrevisions in the months ahead.

10.8

MSCI Canada 1,461 The Canadian market continues to trade near its relative performancelows. The strong CAD is a key headwind. Canadian stocks remainrelatively expensive.

11.7

MSCI Switzerland 803 The Swiss market has held up relatively well of late, thanks to both itsdefensive composition and currency weakness.

11.6

MSCI Emerging (LEA) 936 China’s latest rate cut and continued decline in inflation bode well for our‘soft landing’ call. EM continues to trade very cheap relative to developedmarkets, particularly considering outsized growth prospects.

9.3

CS ETFs: Product overview

First Listing Date AUM (USD m,29.06.2012)

TER (in %) Replication

CS ETF (CH) on SMI® 15/03/2001 3,358 0.39% full replicationCS ETF (CH) on SMIM® 09/12/2004 964 0.49% full replicationCS ETF (CH) on SLI® 02/07/2007 489 0.39% full replicationCS ETF (CH) on SBI Domestic Government 1–3 03/07/2009 272 0.21% full replicationCS ETF (CH) on SBI Domestic Government 3–7 19/11/2003 627 0.19% full replicationCS ETF (CH) on SBI Domestic Government 7–15 19/11/2003 83 0.25% full replicationCS ETF II (CH) on Gold 06/10/2009 1,559 0.33% full replicationCS ETF II (CH) on Gold – hedged CHF 06/10/2009 690 0.39% full replicationCS ETF II (CH) on Gold – hedged EUR 06/10/2009 288 0.40% full replicationCS ETF (Lux) on MSCI EMU Large Cap 24/10/2002 323 0.49% full replicationCS ETF (Lux) on MSCI EMU Mid Cap 18/09/2007 138 0.52% full replicationCS ETF (Lux) on MSCI Emerging Markets 30/06/2006 1,357 0.68% optimized samplingCS ETF (IE) on MSCI UK Large Cap 03/07/2009 82 0.48% full replicationCS ETF (IE) on MSCI UK Small Cap 03/07/2009 34 0.58% optimized samplingCS ETF (IE) on MSCI USA Large Cap 03/07/2009 60 0.33% full replicationCS ETF (IE) on MSCI USA Small Cap 03/07/2009 113 0.48% optimized samplingCS ETF (IE) on MSCI Japan Large Cap 03/07/2009 39 0.48% full replicationCS ETF (IE) on MSCI Japan Small Cap 03/07/2009 50 0.58% optimized samplingCS ETF (IE) on MSCI EMU Small Cap 03/07/2009 128 0.58% optimized samplingCS ETF (IE) on iBoxx USD Govt 1–3 03/07/2009 48 0.23% optimized samplingCS ETF (IE) on iBoxx USD Govt 3–7 03/07/2009 138 0.23% optimized samplingCS ETF (IE) on iBoxx USD Govt 7–10 03/07/2009 13 0.23% optimized samplingCS ETF (IE) on iBoxx EUR Govt 1–3 03/07/2009 220 0.23% optimized samplingCS ETF (IE) on iBoxx EUR Govt 3–7 03/07/2009 115 0.23% optimized samplingCS ETF (IE) on iBoxx EUR Govt 7–10 03/07/2009 20 0.23% optimized samplingCS ETF (IE) on iBoxx USD Inflation Linked 03/07/2009 58 0.28% optimized samplingCS ETF (IE) on iBoxx EUR Inflation Linked 03/07/2009 51 0.28% optimized samplingCS ETF (IE) on S&P 500 19/05/2010 716 0.20% full replicationCS ETF (IE) on EURO STOXX 50® 27/01/2010 201 0.20% full replicationCS ETF (IE) on Dow Jones Industrial AverageSM 27/01/2010 97 0.33% full replicationCS ETF (IE) on Nasdaq 100 27/01/2010 195 0.33% full replicationCS ETF (IE) on FTSE 100 27/01/2010 140 0.33% full replicationCS ETF (IE) on FTSE MIB 27/01/2010 17 0.33% full replicationCS ETF (IE) on Nikkei 225 27/01/2010 51 0.48% full replicationCS ETF (IE) on MSCI Pacific ex Japan 13/01/2010 44 0.48% full replicationCS ETF (IE) on MSCI Canada 13/01/2010 159 0.48% full replicationCS ETF (IE) on MSCI UK 13/01/2010 373 0.33% full replicationCS ETF (IE) on MSCI USA 13/01/2010 298 0.33% full replicationCS ETF (IE) on MSCI Japan 13/01/2010 556 0.48% full replicationCS ETF (IE) on MSCI Europe 13/01/2010 56 0.33% full replicationCS ETF (IE) on MSCI EMU 13/01/2010 865 0.33% full replicationCS ETF (IE) on MSCI EM EMEA 26/08/2010 12 0.65% swap-basedCS ETF (IE) on MSCI Russia ADR/GDR 26/08/2010 176 0.65% full replication*CS ETF (IE) on MSCI South Africa 26/08/2010 63 0.65% full replicationCS ETF (IE) on MSCI EM Latin America 26/08/2010 20 0.65% optimized sampling*CS ETF (IE) on MSCI Brazil 26/08/2010 79 0.65% full replicationCS ETF (IE) on MSCI Chile 26/08/2010 42 0.65% full replication*CS ETF (IE) on MSCI Mexico Capped 26/08/2010 70 0.65% full replicationCS ETF (IE) on CSI 300 26/08/2010 89 0.50% swap-basedCS ETF (IE) on MSCI India 26/08/2010 41 0.75% swap-basedCS ETF (IE) on MSCI Korea 26/08/2010 30 0.65% full replication*CS ETF (IE) on MSCI Taiwan 26/08/2010 19 0.65% swap-basedCS ETF (IE) on MSCI EM Asia 26/08/2010 61 0.65% full replication*CS ETF (IE) on MSCI Australia 26/08/2010 46 0.50% full replicationCS ETF (IE) on MSCI World 10/02/2011 44 0.40% optimized sampling*CS ETF (IE) on Credit Suisse Global Alternative Energy 10/02/2011 22 0.65% full replicationCS ETF (IE) on Fed Funds Effective Rate 10/02/2011 4 0.14% swap-basedCS ETF (IE) on EONIA 10/02/2011 34 0.14% swap-based* From 10.05.2012


SIX BBG Ticker Xetra BBG Ticker Borsa BBG Ticker LSE BBG TIcker Euronext Paris BBGTicker

CSSMI SW XMT GYCSSMIM SW

CSSLI SWCSBGC3 SWCSBGC7 SWCSBGC0 SWCSGOLD SWCSGLDC SWCSGLDE SWCSEMUL SW XMHA GY CSEMUL IM CEUL LN CEL1 LN CEUL FPCSEMUM SW XMHC GY CSEMUM IM CEUM LN CEM1 LN CEUM FP

CSEM SW XMHB GY CSEM IM CSEM LN CM1 LN CSEM FPCSUKL SW SXRC GY CSUKL IM CUKL LN CUKL FPCSUKS SW SXRD GY CSUKS IM CUKS LN CUKS FPCSUSL SW SXRF GY CSUSL IM CUSL LN CUL1 LN CUSL FPCSUSS SW SXRG GY CSUSS IM CUSS LN CUS1 LN CUSS FPCSJPL SW SXRH GY CSJPL IM CJPL LN CJPL FPCSJPS SW SXRI GY CSJPS IM CJPS LN CJPS FP

CSEMUS SW SXRJ GY CSEMUS IM CEUS LN CES1 LN CESL FPCSBGU3 SW SXRK GY CSBGU3 IM CBU3 LN CU31 LN CBU3 FPCSBGU7 SW SXRL GY CSBGU7 IM CBU7 LN CU71 LN CBU7 FPCSBGU0 SW SXRM GY CSBGU0 IM CBU0 LN CU01 LN CBU0 FPCSBGE3 SW SXRN GY CSBGE3 IM CBE3 LN CE31 LN CBE3 FPCSBGE7 SW SXRP GY CSBGE7 IM CBE7 LN CE71 LN CBE7 FPCSBGE0 SW SXRQ GY CSBGE0 IM CBE0 LN CE01 LN CBE0 FPCSBILU SW SXRR GY CSBILU IM CBIU LN CIU1 LN CBIU FPCSBILE SW SXRS GY CSBILE IM CBIE LN CIE1 LN CBIE FPCSSPX SW SXR8 GY CSSPX IM CSPX LN CSP1 LN CSPX FP

CSSX5E SW SXRT GY CSSX5E IM CSX5 LN CS51 LN CSX5 FPCSINDU SW SXRU GY CSINDU IM CIND LN CID1 LN CIND FPCSNDX SW SXRV GY CSNDX IM CNDX LN CNX1 LN CNDX FPCSUKX SW SXRW GY CSUKX IM CUKX LN CUKX FPCSMIB SW SXRY GY CSMIB IM CMIB LN CMB1 LN CMIB FP

CSNKY SW SXRZ GY CSNKY IM CNKY LN CNKY FPCSPXJ SW SXR1 GY CSPXJ IM CPXJ LN CPJ1 LN CPXJ FPCSCA SW SXR2 GY CSCA IM CSCA LN CSCA FPCSUK SW SXR3 GY CSUK IM CSUK LN CSUK FPCSUS SW SXR4 GY CSUS IM CSUS LN CU1 LN CSUS FPCSJP SW SXR5 GY CSJP IM CSJP LN CSJP FPCSEU SW SXR6 GY CSEU IM CSEU LN CSE1 LN CSEU FP

CSEMU SW SXR7 GY CSEMU IM CEU LN CEU1 LN CEMU FPCSEMEM SW CEBA GY CSEMEM IM CEME LN CME1 LN CEME FP

CSRU SW CEBB GY CSRU IM CSRU LN CRU1 LN CSRU FPCSZA SW CEBC GY CSZA IM CSZA LN CZA1 LN CSZA FP

CSEMLA SW CEBD GY CSEMLA IM CEML LN CML1 LN CEML FPCSBR SW CEBE GY CSBR IM CSBR LN CBR1 LN CSBR FPCSCL SW CEBF GY CSCL IM CSCL LN CCL1 LN CSCL FP

CSMXCP SW CEBG GY CSMXCP IM CMXC LN CMX1 LN CMEX FPCSCSI3 SW CEBH GY CSCSI3 IM CCSI LN CCS1 LN CCSI FP

CSIN SW CEBI GY CSIN IM CSIN LN CIN1 LN CSIN FPCSKR SW CEBJ GY CSKR IM CSKR LN CKR1 LN CSKR FPCSTW SW CEBK GY CSTW IM CSTW LN CTW1 LN CSTW FP

CSEMAS SW CEBL GY CSEMAS IM CEMA LN CEA1 LN CEMA FPCSAU SW CEBM GY CSAU IM CSAU LN CAU1 LN CSAU FP

CSWD SW CEBN GY CSWD IM CSWD LN CWD1 LN CSWD FPCSAE SW CEBP GY CSAE IM CSAE LN CAE1 LN CSAE FPCSFF SW CEBQ GY CSFF IM CSFF LN CFF1 LN CSFF FPCSEO SW CEBR GY CSEO IM CSEO LN CEO1 LN CSEO FP

Source: CS ETFs Sales Strategy, 30.06.2012



Credit Suisse ETFs’ approach to selecting an ETF

CS ETFs' views on the benefits and risks of different exchange traded instruments: Exchange Traded Funds, Commodities, Notes and Products

* Securities can legally belong to the fund (so called un-funded swap set up) or be posted as collateral to the fund (so called funded swap set up).** Single-entity related risk can potentially exceed this limit, if there is relatedness – i.e. whenever prices of collateral are correlated with the swap counterparty.*** Assuming the issuer is not involved in the securities lending programme.**** Unless the issuer is also the/one of the swap provider(s).

Source: Credit Suisse ETF Sales Strategy 13.10.2011

Exchange Traded Funds (ETFs)

UCITS Non-UCITS ETPs (ETCs and ETNs)

Physically replicated Synthetically replicated Physically replicated Physically backed

Listed on aregulatedexchange

Yes Yes Yes Yes Yes

Investmentobjective

Exposure to thebenchmark index



Exposure to thebenchmark index/singleunderlying

Exposure to thebenchmark index/singleunderlying

Tracking error Low – can arise fromtransaction costs,optimised sampling,additional costs/revenues (e.g. securitieslending)

Low – can arise fromadditional costs/revenuesassociated with the swap

Low – can arise fromtransaction costs,optimised sampling,additional costs/revenues (e.g.securities lending)

Low – can arise fromtransaction costs

Low – can arise fromadditional costs associatedwith the mechanics of theproduct (funding,swap/option pricing)

Legal structure UCITS funds UCITS funds Funds outside UCITSframework (e.g. Switzerland)

Funds outside UCITSframework (e.g. Switzerland)

Debt instrument (i.e. a note)

Underlyingholdings

Securities included inthe index (all, or aselection of)

Index swap and securities*,which are sourced from amuch wider pool than theindex components

Securities included inthe index

Physical underlying (e.g. gold)

N/A

Issuer risk N/A N/A N/A N/A Yes (can be mitigated byposting of collateral)

Counterparty risk If a securities lendingprogramme is in place,yes. Otherwise no

Yes, due to the swap.Capped at 10% of NAV ofthe fund under UCITS**

If a securities lendingprogramme is in place,yes. Otherwise, no

N/A N/A

If issuer defaults No loss for theinvestor***

No loss for the investor**** No loss for theinvestor

No loss for the investor Potential loss up to 100%(can be mitigated byposting of collateral)

If counterpartydefaults

If the securities lendingcounterparty defaults,the investor may losethe difference betweenthe value of liquidatedcollateral and the costof the re-purchasedsecurities, if there is ashortfall

If the swap counterpartydefaults, the investor maylose the differencebetween the value of theswap and the value of theliquidated collateral, wherethere is a shortfall

If the securities lendingcounterparty defaults,the investor may losethe difference betweenthe value of liquidatedcollateral and the costof the re-purchasedsecurities, if there is ashortfall

No loss for the investor See issuer risk

Fund access Via a pool of APs, atthe same level

Via a pool of APs, withone/several of them beingthe preferred AP(s) (theswap counterpart(ies))

Via a pool of APs, allat the same level

Via a pool of APs, all atthe same level

Can vary

Transparencyneeds to beassessed for…

Terms of the securitieslending programme, ifany: (i) % of portfoliobeing lent (ii) type andlevel of collateral (iii) revenue split (iv) whether thesecurities lendingactivity is indemnifiedfrom loss due tocounterparty default

Quality and liquidity ofsecurities held by thefund/posted ascollateral

Identity of swapcounterparties

Swap pricing fairness Policy re counterparty

exposure (periodresets? Thresholds?)

Terms of the securitieslending programme, ifany: (i) % of portfoliobeing lent (ii) type andlevel of collateral (iii) revenue split (iv) whether thesecurities lendingactivity is indemnifiedfrom loss due tocounterparty default

Total vs partial allocationof physical commodity

Issuer credit rating Pricing fairness Liquidity


Database and methodologyOur analysis is based on Bloomberg data. Only ETFs listed and domiciled in Europe were considered. ETFs for which data wasnot regularly published were not included. For AUM figures market prices were taken into account in USD; for NNA figures weworked on the daily change in outstanding shares, at average period NAV, this being equivalent to assuming thecreations/redemption change occurs in the middle of the trading day. The currency was USD for the sake of consistency.

At the end of Q1 2012, the database was reviewed to ensure the accuracy and completeness of our representation of theEuropean Exchange Traded Funds space. Following the review, the size of the database used for this edition of the MarketCommentary on ETFs was increased from that used for previous quarters. To ensure Q1 2012 results were meaningful andconsistent, we have revised all our previously published data for the period 31.12.2011 – 30.03.2012. Data prior to 31.12.2011refers to the database formerly in use.

This document was produced by Credit Suisse AG and/or its affiliates (hereafter “CS") with the greatest of care and to the best of itsknowledge and belief. However, CS provides no guarantee with regard to its content and completeness and does not accept any liability forlosses which might arise from making use of this information. The opinions expressed in this document are those of CS at the time of writingand are subject to change at any time without notice. If nothing is indicated to the contrary, all figures are unaudited. Unless otherwisespecified, data source is Credit Suisse. This document is provided for information purposes only and is for the exclusive use of the recipient.It does not constitute an offer or a recommendation to buy or sell financial instruments or banking services and does not release the recipientfrom exercising his/her own judgment. The recipient is in particular recommended to check that the information provided is in line with his/herown circumstances with regard to any legal, regulatory, tax or other consequences, if necessary with the help of a professional advisor. Thisdocument may not be reproduced either in part or in full without the written permission of CS. It is expressly not intended for persons who,due to their nationality or place of residence, are not permitted access to such information under local law. Neither this document nor anycopy thereof may be sent, taken into or distributed in the United States or to any U. S. person. Every investment involves risk, especially withregard to fluctuations in value and return. Investments in foreign currencies involve the additional risk that the foreign currency might losevalue against the investor's reference currency. Historical performance indications and financial market scenarios are no guarantee for currentor future performance. Performance indications do not consider commissions levied at subscription and/or redemption. Furthermore, noguarantee can be given that the performance of the reference index will be reached or outperformed.Emerging Markets are located in countries that possess one or more of the following characteristics: A certain degree of political instability,relatively unpredictable financial markets and economic growth patterns, a financial market that is still at the development stage or a weakeconomy. Emerging markets investments usually result in higher risks such as political risks, economical risks, credit risks, exchange raterisks, market liquidity risks, legal risks, settlement risks, market risks, shareholder risk and creditor risk.Commodity investments are subject to greater fluctuations in value than normal investments and may lead to additional investment risks.The CS ETFs family includes Exchange Traded Funds (ETF) under Swiss law, Luxembourg law and Irish law. Fund management companyof the Funds under Swiss law as well as representative of the foreign funds registered for public sale in Switzerland is Credit Suisse FundsAG, Zurich. The custodian bank under Swiss law as well as the paying agent of the foreign funds registered for public sale in Switzerland isCredit Suisse AG, Zurich.Subscriptions are only valid on the basis of the current sales prospectus and the most recent annual report (or half-yearly report, if this ismore recent). The prospectus, the simplified prospectus, the management regulations and the annual and half-yearly reports may be obtainedfree of charge from Credit Suisse Funds AG, Zurich and from any bank in the Credit Suisse AG in Switzerland.The products are not sponsored, endorsed, sold or promoted by SIX Swiss Exchange Ltd and SIX Swiss Exchange Ltd makes norepresentation regarding the advisability of investing in the product. SMI®, SMIM®, SLI®, SBI® and the relevant indices are registeredtrademarks of SIX Swiss Exchange Ltd and may be used only under license from the owner.The MSCI indices are exclusively owned by MSCI. MSCI as well as names of MSCI indices are registered traded marks of MSCI and/or itsaffiliates and have been licensed to use in predefined manner by Credit Suisse Fund Management S.A. and Credit Suisse Fund ManagementCompany (Ireland) Limited. All subfunds of CS ETF (LUX) as well as of CS ETF (IE) which are based on MSCI indices are not issued, signed,confirmed, sold or marketed by MSCI. MSCI neither provides any guarantee nor assumes any liability for CS ETF funds. Furthermore, MSCIdoes not take responsibility for selling CS ETF fund shares and is not involved in the management of CS ETF funds.Other indices and the trademarks and servicemarks referenced herein are the intellectual property of the respective index provider and/or itslicensors and are licensed for use by Credit Suisse Fund Management Company (Ireland) Limited. The funds referred to herein are not sponsored,endorsed, or promoted by the respective index provider. THE INDEX PROVIDER MAKES NO WARRANTY AND BEARS NO LIABILITY WITHRESPECT TO THE FUNDS OR ANY INDEX ON WHICH SUCH FUNDS ARE BASED, AND MAKES NO REPRESENTATION REGARDINGTHE ADVISABILITY OF TRADING IN SUCH FUNDS.The Prospectus of the funds contains a more detailed description of the relationship between the index provider and Credit Suisse FundManagement Company (Ireland) Limited and any related funds.

For investors in SwitzerlandEmerging Markets are located in countries that possess one or more of the following characteristics: A certain degree of political instability,relatively unpredictable financial markets and economic growth patterns, a financial market that is still at the development stage or a weakeconomy. Emerging markets investments usually result in higher risks such as political risks, economical risks, credit risks, exchange raterisks, market liquidity risks, legal risks, settlement risks, market risks, shareholder risk and creditor risk. Commodity investments are subject to greater fluctuations in value than normal investments and may lead to additional investment risks.The CS ETFs family includes Exchange Traded Funds (ETF) under Swiss law, Luxembourg law and Irish law. Fund management companyof the Funds under Swiss law as well as representative of the foreign funds registered for public sale in Switzerland is Credit Suisse FundsAG, Zurich. The custodian bank under Swiss law as well as the paying agent of the foreign funds registered for public sale in Switzerland isCredit Suisse AG, Zurich.The underlying indices are registered trademarks and have been licensed for use (SIX Swiss Exchange as licensor for Swiss Market Index(SMI)®; McGraw-Hill Companies Inc. as licensor for S&P 500® Index; STOXX Limited Zurich as licensor for EURO STOXX 50® Index;Nikkei Inc. as licensor for Nikkei 225® Index; Deutsche Börse AG as licensor for DAX® Index and Euronext Paris S.A. as licensor for CAC40® Index). The indices are compiled and calculated solely by licensors and the licensors shall have no liability with respect thereto. Theproducts based on the indices are in no way sponsored, endorsed, sold or promoted by the licensors.The MSCI indices are exclusively owned by MSCI. MSCI as well as names of MSCI indices are registered traded marks of MSCI and/or itsaffiliates and have been licensed to use in predefined manner by Credit Suisse Fund Management S.A. and Credit Suisse Fund ManagementCompany (Ireland) Limited. All subfunds of CS ETF (LUX) as well as of CS ETF (IE) which are based on MSCI indices are not issued, signed,confirmed, sold or marketed by MSCI. MSCI neither provides any guarantee nor assumes any liability for CS ETF funds. Furthermore, MSCIdoes not take responsibility for selling CS ETF fund shares and is not involved in the management of CS ETF funds.Copyright © 2012 Credit Suisse Group AG and/or its affiliates. All rights reserved.

CREDIT SUISSE AGAsset ManagementETF BusinessKalandergasse 1CH-8070 Zurich

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