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Asset Management

Emerging Market Corporate Bonds An Evolving Asset Class

May 2014

Gonzalo Borja, Head of EM Debt Andreas Fischer, Senior Portfolio Manager

Asset Management – SFI Group

Emerging Market Corporate Bonds

May 2014 The disclaimer at the end is also applicable to this page.

Content

Executive Summary

Emerging Market Corporate Bonds: An Evolving Asset Class

Credit Suisse (Lux) Emerging Market Corporate Bond Fund

Introduction to Asset Management

Biographies

Emerging Markets Investment Process

2




Executive Summary

3

Market Environment Recent market sell-off in Emerging Markets offers attractive yields and spreads Valuations have clearly moved to the positive side and risk-adjusted returns look fair After several weeks of outflows out of the asset class recent figures point to a stabilization in fund flows US economic releases are crucial with respect to market expectations about an upcoming tapering date

Why Credit Suisse

Your Solution

Why to Invest Offers a diversification in the context of a fixed income portfolio Strong growth momentum to continue in EM relative to Developed Markets On average EM offers a higher yield than conventional bonds in DM space Fundamentals remain strong

Exposure to Global Emerging Markets Corporate Fixed Income Universe Yield enhancement above Developed Markets Corporates with moderate risks Active participation in the primary market as well as opportunities in the secondary market Active portfolio management and broad diversification within given parameters

Global fixed income expert with an extensive range of investment capabilities managing more than $50bn USD in Fixed Income investments globally

Rigorous and prudent investment and credit management process Capabilities in managing and analyzing corporate and sovereign debt both in DM and EM




Content

Executive Summary




Biographies


4




Positive Macro Economic Environment Emerging Economies to Grow Faster than Developed Markets

5

Emerging market countries are expected to show a healthy GDP growth in 2014 accelerating from previous year to 4.9% from 4.7% in 2013.

Global growth seems poised to continue at multi-speed, with Europe and Japan as clear laggards. Emerging economies are set to grow at a faster pace than develop economies although growth differentiation should also remain the norm in emerging markets.

Emerging Markets and Developing Economies – Real GDP Growth (%), 2014 Forecasts

-6

-4

-2

0

2

4

6

8

10

1989 1992 1995 1998 2001 2004 2007 2010 2013

GD

P Y

OY

% C

hang

e

DM GDP YoY EM GDP YoY EM ex-China GDP YoY

Emerging Markets and Developing Economies – GDP YoY Growth (%) Change

Sources: IMF, World Economic Outlook, Merrill Lynch, Credit Suisse As of 31.03.2014




Fiscal Prudence Provides A Platform for Further Economic Growth

6

EM have experienced vast change and have become increasingly prudent when managing their domestic economies. Burdensome government debt, unwieldy fiscal deficits, and overexposed current accounts plagued many markets in the past, but

today the developed rather than the emerging world face these issues.

Sources: Credit Suisse PLUS Research & Analytics, Thomson Reuters Datastream Professional, Consensus Economics, European Commission, IMF, national statistical offices

As of 31.03.2014

Fiscal Balance and Gross Government Debt to GDP (%), 2013

US

- Japan

UK

Germany

- France

Italy

Canada

Australia

Brazil

Chile

Peru

Colombia

Poland

Hungary

SA

Turkey Russia

Malaysia

Shina Thailand

Indonesia

India

-12

-10

-8

-6

-4

-2

0

2

4 0 50 100 150 200 250 300

Fisc

al b

alan

ce 2

013

(% G

DP

)

Gross government debt 2013 (% GDP)

Developed economies Emerging economies

Fiscal Balance and Gross Government Debt to GDP (%), 2013




Positive Credit Trend over the Last Decade Evolution of Credit Rating in Developed and Emerging Markets

7

Emerging Markets

2001 2013

China BBB AA-

South Africa A- BBB

India BB BBB-

Brazil BB- BBB-

Korea BBB+ A+

Malaysia BBB A-

Philippines BB+ BBB-

Mexico BB+ BBB+

Russia B BBB

Turkey B- BBB

Argentina SD CCC+

Developed Markets

2001 2013

Canada AA- AAA

France AAA AA

Italy AA BBB

Germany AAA AAA

Japan AA AA-

UK AAA AAA

USA AAA AA+

Portugal AA BB

Ireland AAA BBB+

Greece A B-

Spain AA- BBB-

Sources: Credit Suisse, Bloomberg, S&P As of 31.03.2014




From High Yield to High Grade The EMBIG’s 20-Year Path to Investment Grade

8

0

500

1000

1500

2000 Mexico Crisis (‘94 to ‘95)

Russia default (May ‘99)

Asia crisis (mid-97)

Brazil devaluation (Jan ‘99)

Ecuador default (Oct ‘99)

Argentina default (Dec ‘01)

Argentina Restructuring (Jun ‘05)

Financial crisis (Mid- ‘07 to ‘08)

Brazil to IG (S&P: Apr ‘08)

Eurozone crisis (Nov ‘09 to present)

Sources: Credit Suisse, JP Morgan As of 14.04.2014




Historical Total Returns Historic Performance and Risk Comparison

9

Over the previous 11 years, risky fixed income asset classes have outperformed global equities. However, return per unit of risk is highest with traditional fixed income classes, such as global governments and global securitized. In the fixed income space, emerging market and high yield bonds have shown the highest returns, however, with a considerable

elevated volatility.

Historic total return development Historic risk and return relationship

Future performance indications and financial market scenarios are not reliable indicators of current or future performance.

Sources: JPMorgan, Merrill Lynch, Bloomberg, Credit Suisse and own calculations From 31.12.2002 to 31.12.2013




From Sovereign to Corporates Corporate Debt Represents Now More than 70% of Total EM Debt

10

The emerging market corporate universe has grown at a 26% annual growth rate over the last 12 years and has far outpaced the 10% annual growth rate of the composite bond universe and has nearly quadruple the 7% growth rate of the emerging market sovereign bond universe over the same period.

This growth is also visible and remarkable when we compare it to develop markets. The overall universe within the emerging market corporate hard currency has grown at a significant higher pace than similar peer markets such us U.S. Corporates or US High Yield.

Corporate Emerging Market As % of Sovereign EM Corporate EM Growth vs. DM – Market Growth Multiple

Sources: Credit Suisse, Merrill Lynch As of 31.12.2013

0%

10%

20%

30%

40%

50%

60%

70%

80%

1998 2000 2002 2004 2006 2008 2010 2012

EM Corporate EM Sovereign

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

2005 2007 2009 2011 2013

Mar

ket G

row

th M

ultip

le s

ince

200

5, x

EM IG Corporates EM HY US IG US HY EM Sovereigns




EM Corporates Followed the Sovereign Rating Upgrade Trend Strong Rating Development over the Last Decade

11

The emerging market corporate universe has benefited from positive development trends in their respective countries. Following a trend of positive rating upgrades in emerging economies, corporates from does region followed its sovereign trend.

The rating distribution relative to the overall universe within the emerging market corporate hard currency space has developed significantly. Originally dominated by an 82% allocation to high yield corporates, the universe now more than 70% allocation to the investment grade sector.

Average Rating Evolution of EM Debt vs. US Corporates Market Value in % by Rating Bucket within EM Corporates


1999 2001 2003 2005 2007 2009 2011 2013

A-

BBB+

BBB

BBB-

BB+

BB

BB-

B+

EM Sovereigns EM Corporates US Corporates

AAA-AA

A BBB Investm. Grade

BB B CCC & Lower

High Yield

1998 – 5.81 12.03 17.84 53.33 22.23 6.60 82.16

1999 – 8.75 29.41 338.16 35.92 20.38 5.55 61.85

2000 1.20 11.77 32.96 45.93 27.69 23.46 2.92 54.07

2001 1.03 18.79 44.13 63.95 18.22 11.92 5.92 36.06

2002 0.93 25.78 42.60 69.31 13.35 13.70 3.64 30.69

2003 1.98 29.53 34.69 66.20 18.44 12.95 2.40 33.79

2004 1.28 36.92 28.76 66.96 21.41 10.34 1.29 33.04

2005 3.93 33.35 30.73 68.01 20.68 10.52 0.79 31.99

2006 4.12 32.22 36.46 72.80 14.41 12.27 0.52 27.20

2007 5.78 30.61 31.54 67.93 19.27 12.10 0.70 32.07

2008 7.05 30.66 35.99 73.70 16.49 8.98 0.83 26.30

2009 6.87 28.45 37.88 73.20 13.40 11.52 1.87 26.79

2010 5.47 26.58 39.46 71.51 15.15 12.11 1.23 28.49

2011 5.94 26.17 39.64 71.75 15.53 12.02 0.48 228.03

2012 7.89 22.15 44.39 74.42 13.20 10.93 1.35 25.49

2013 7.50 20.50 44.80 72.80 15.00 9.8 2.4 27.20




The Raise of an Asset Class – Country Diversification From 13 Countries in 2001 to over 42 Year-to-Date

12

Not just countries but well diversified in terms of bond selection. There are roughly over 500 different issuers with over 1,000 different bonds split among 42 countries.

Source: JP Morgan Indices As of 31.12.2013

CEEMEA Weight in %

Inception (Dec. 2001)

Today (Dec. 2013)

Bahrain – 0.53

Croatia – 0.12

Czech Republic – 0.36

Egypt – 0.20

Ghana – 0.24

Hungary – 0.19

Israel 2.44 3.46

Kazakhstan – 1.32

Kuwait – 0.60

Nigeria – 0.92

Oman – 0.29

Poland – 0.59

Qatar – 4.43

Russia – 5.65

Saudi Arabia – 1.36

South Africa – 3.12

Turkey – 4.35

UAE – 4.94

Ukraine – 1.26

ASIA Weight in %


Today (Dec. 2013)

China – 5.40

Hong Kong 20.08 5.63

India – 5.35

Indonesia 0.51 2.42

Korea 2.79 5.58

Macau – 0.92

Malaysia 7.95 2.04

Mongolia – 0.18

Philippines 0.66 2.45

Singapore 20.35 4.40

Taiwan – 0.94

Thailand 1.52 3.63

LATAM Weight in %


Today (Dec. 2013)

Argentina 6.84 0.90

Brazil 9.80 5.31

Chile 7.79 4.19

Colombia – 4.58

Dominican Rep – 0.20

El Salvador – 0.29

Guatemala – 0.41

Jamaica – 1.66

Mexico 17.19 5.60

Paraguay – 0.11

Peru – 3.87

Venezuela 2.07 –




The Raise of and Asset Class – Sector Diversification A Well Diversified Universe with over 12 Different Countries

13

While country, sector and rating concentration was an issue in the first few years, today the emerging market corporate universe has more than 12 sectors and is comparable to a develop market corporate universe.

With a Market Capitalization of USD 728 bn as of end of 1Q 2014, EM Corporates have a similar capitalization than some Fixed Income corporate asset classes in develop economies like the high yield market.

JP Morgan CEMBI Broad Sector Breakdown at Inception Weight %

JP Morgan CEMBI Broad Sector Breakdown TODAY Weight %

Financial 27%

Industrial 23%

Metal and Mining

2%

Oil and Gas 6%

TMT 25%

Utilities 17% Financial

29.16%

Industrial 5%

Infrastructure 1%

Metals and Mining 10%

Oil and Gas 16%

Pulp and Paper 1%

Real Estate 8%

TMT 10%

Transport 1%

Utilities 7%

Consumer 8%





Fundamentals Still Supportive Leverage Similar or Lower Relative to US Corporates

14

When compared to developed market peers such as US corporates, EM corporates have similar and even lower leverage as well as liquidity ratios, on average.

Since the start of the financial crisis EM Corporates have used the debt capital markets to refinance existing debt (mostly bank debt) by issuing corporate debt with longer maturities allowing the company to diversify its maturity and financing profile.

Overall debt has been reduced on a total level although when looking at areas such as EM HY, debt has increased y-o-y but this was primarily driven by first time issuers coming to the market rather than overall re-leveraging of the sector.

EM IG Vs. EM HY Total Debt YoY Change 2Q 2013 EM Corporate 2Q 2013 Leverage by Rating vs. US Corp


0.0 1.0 2.0 3.0 4.0 5.0

A

BBB

BB

B

Leverage, x

US EM

0

5

10

15

20

25

30

35

40

45

50

Mar 07 Dec 07 Sep 08 Jun 09 Mar 10 Dec 10 Sep 11 Jun 12 Mar 13 EM IG Total Debt, YoY Change EM HY Total Debt, YoY Change




Credit Rating Trends Default Rates at 3.1% in 2013 Are Expected to Drop to 2.2% in 2014

15

Default rates picked up to 3.1% from 2.7% last year and were above US HY default rates for the first time since 2004. 14 EM corporate issuers defaulted in 2013 of which 7 came from Latin America, 4 from Asia and 3 from EEMEA. Market expects a decline in default rates in 2014 to 2.2%. Year-to-Date, 2 issuers defaulted so far this year Aralco and Alliance Bank.

Credit rating trends for EM corporates were negative in 2013, specially in the high yield rating segment and to a lesser extend in the investment grade rating universe. For 2014 we expect that credit metrics should stabilize and/or be on a slightly improving trend. The downgrade of Ukraine sovereign rating by S&P in February was the main driver of the recent decline as this was followed by a wave of corporate rating downgrade in the country.

EM Corporate 3 Months Rating Migration Trend BofA-ML High Yield Default Rate by Credit Market

Sources: BofAML, Credit Suisse, Bloomberg As of 30.04.2014

Historical performance indications and financial market scenarios are not reliable indicators of current or future performance.

0

4

8

12

16

20

24

28

1999 2001 2003 2005 2007 2009 2011 2013

LTM

Issu

er D

efau

lt R

ate,

Pct

BofA-ML US HY EU HY EM HY

-16

-12

-8

-4

0

4

8

2002 2004 2006 2008 2010 2012 2014Cre

dit R

tain

g M

igra

tion

Rat

e, P

ct o

f Iss

uers

Trailing 3mo Rating Migration Rate - EM IG EM HY




EM Corporates Spread History Development Where We Are

16

Sources: Credit Suisse, Bloomberg, JP Morgan As of 30.04.2014

0

200

400

600

800

1000

1200

1400

1600

1800

2000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

JPM EMBI Global Div - Spread JPM CEMBI Global Div - SpreadJPM CEMBI High Yield Global Div - Spread JPM EMBI Global Div - Historical Spread AvrgJPM CEMBI Global Div - Historical Spread Avrg JPM CEMBI High Yield Global Div - Historical Spread Avrg




Is High Yield the New Carry Trade? Differences between EM and HY Relative to US Treasury

17

Sources: JP Morgan Indices, Credit Suisse As of 30.04.2014

1.50

1.75

2.00

2.25

2.50

2.75

3.00

4

4.5

5

5.5

6

6.5

Dez 11Mrz 12Jun 12Sep 12Dez 12Mrz 13Jun 13Sep 13Dez 13Mrz 14

JPM EMBI Global Div - Yield JPM CEMBI Global Div - Yield

JP US Trasury yield Index (rhs)

Will EM spreads (Sovereign and Corporates) manage to offset a rise in US Treasury yields?

US High Yield became the new carry trade… Since the announcement of the FED (22.05.2013) US HY spreads have significantly outperformed EM spreads

1.50

1.75

2.00

2.25

4.00

4.50

5.00

5.50

6.00

6.50

7.00

7.50

8.00

8.50

Dez 11 Apr 12 Aug 12 Dez 12 Apr 13 Aug 13 Dez 13 Apr 14

JP Morgan US High Yield Index - YieldJP US Trasury yield Index (rhs)




Sell off in EM Corporates Leads to Attractive Entry Levels EM vs. US Corporate Spread at a 5 Year High

18

Emerging Markets looks very attractive vs. US peers EM IG Corp Cheap vs. US IG Corporate Single-A/BBB spread differential (bps)

Emerging Markets looks attractive versus US peers EM HY Corp Cheap vs. US HY Corporate BB/B spread differential (bps)

Sources: BofAML Indices, Credit Suisse As of 30.04.2014

40

50

60

70

80

90

100

110

120

130

Okt 09 Apr 10 Okt 10 Apr 11 Okt 11 Apr 12 Okt 12 Apr 13 Okt 13 Apr 14

EM vs US IG Spread Differential, bps Average

0

50

100

150

200

250

300

Okt 09 Apr 10 Okt 10 Apr 11 Okt 11 Apr 12 Okt 12 Apr 13 Okt 13 Apr 14

EM vs US HY Spread Differential, bps Average

Emerging market corporates spreads remain near their 5 year wides relative to US credit. EM Investment Grade currently trades 115bps wide to US IG, compared to an average of 80bps since 2009. EM high yield spreads currently trade 275bps wide to US high yield spreads, compared to 160bps on average since 2009.




EM Credits Look Attractive Compared to Developed Markets Offering a Excessive Yield Pick-up on Some Sectors

19

Sources: BofAML Indices, Credit Suisse As of 30.04.2014

Future performance indications and financial market scenarios are not reliable indicators of current or future performance.

Fixed Income Corporate Indices – Main Characteristics

EM Financials vs. DM Financials – Spread bps

EM Energy Sector vs. DM Energy Sector – Spread bps

Where exactly are emerging markets cheap to US? The charts below show two good examples in the Investment Grade universe; Financial and Oil & Gas being among the largest sectors in the EM universe. Generally, EM HY sectors look most attractive relative to US peers.

Name US Corp EUR Corp US HY EUR HY EM EM IG EM HYCurrency USD EUR USD EUR USD USD USDRating A- A- B+ BB- BBB BBB+ BB-Ticker C0A0 ER00 H0A0 HE00 EMCB EMIB EMHBNumber of Issues 6'143 1'850 2'237 538 1'679 1'055 624Face Value, US$mn 4'476'270 2'027'083 1'267'789 366'311 1'149'581 827'494 322'086Market Value, US$mn 4'901'362 2'238'256 1'347'532 400'303 1'185'509 866'571 318'937

Maturity-Final 10.11 5.30 6.63 4.65 7.02 7.52 5.67Yield to Maturity 3.09 1.77 6.03 4.28 4.95 3.82 8.05Yield to Worst 3.06 1.70 5.23 3.62 4.86 3.78 7.79Effective Yield 3.06 1.69 5.53 3.63 4.88 3.78 7.86Option-Adjusted Spread 114 104 375 309 332 216 648

Macaulay Duration 6.88 4.70 5.11 3.95 5.26 5.57 4.43Modified Duration 6.75 4.61 4.96 3.83 5.13 5.44 4.26Duration to Worst 6.70 4.57 3.64 3.08 4.97 5.39 3.83Effective Duration 6.84 4.66 4.19 3.23 5.03 5.43 3.94Effective Convexity 0.91 0.32 -0.07 -0.06 0.42 0.53 0.11

Avg Coupon (Par Weighted) 4.61 3.89 7.23 6.34 5.54 4.75 7.58Avg Price (Par Weighted) 108.41 108.60 104.67 107.10 101.74 103.50 97.22

100

150

200

250

300

350

400

450

Okt 09Apr 10Okt 10Apr 11Okt 11Apr 12Okt 12Apr 13Okt 13Apr 14

Spr

ead,

bps

EM IG Financials US EU

100

125

150

175

200

225

250

275

300

Okt 09Apr 10Okt 10Apr 11Okt 11Apr 12Okt 12Apr 13Okt 13Apr 14

Spr

ead,

bps

EM IG Utilities US EU




Weaker Technicals Supply Demand Balanced

20

Sources: Merrill Lynch, JP Morgan, Bloomberg, Credit Suisse As of 30.04.2014


-40

-20

0

20

40

60

80

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Sovereigns Corporates Mixed

Annual Cumulative EM Bond Flows (USD bn)

EM Corporate Bond Annual Issuance (USD bn) Five consecutive weeks of inflows reducing the YTD dedicated EM outflows to USD -10.6 bn as of April 30, 2014. Whilst the trend of flows into EM FI by institutional accounts has been positive for seven weeks now, retail clients are still flowing out of EM.

We expect this to turn positive as soon as geopolitical tensions will ease, providing a meaningful positive kick for EM assets

EM Corporate external bond supply came in at USD 58.1 bn in April, setting a new monthly record . Majority came from IG issuers (especially out of China), with 81% of the supply

Annual Cumulative EM Bond Flows (USD bn)

80.1

43.2

97.5

6.2

-10.6

-40

-20

0

20

40

60

80

100

120

Jan Feb Mrz Apr Mai Jun Jul Aug Sep Okt Nov Dez

US$ billions

2010 2011 20122013 2014

0

10

20

30

40

50

60

Jan 12 Apr 12 Jul 12 Okt 12Jan 13 Apr 13 Jul 13 Okt 13Jan 14 Apr 14

EM C

orpo

rate

Issu

ance

, US

$bn

EM IG Corporates EM HY Corporates NR




Content

Executive Summary




Biographies


21




Credit Suisse Asset Management Global Presence

22

Credit Suisse’s Emerging Markets Solutions offer...

Competitive and consistent returns over the entire economic cycle. 1

Extensive credit research beyond the rating agencies.

Broad diversification to minimize single country, sector and issuer risk.

Identification of relative value opportunities.

Offer a broad exposure to emerging markets corporate bonds.

Daily liquidity.

Credit Suisse’s Emerging Markets team...

Is fully dedicated to emerging markets fixed income as a main asset class.

Manages over USD 2.7 bn in emerging markets assets.

Has a long and successful track record.

Follows a rigorous and prudent investment and credit management process.

Believes that active management is a unique investment discipline.

Has successfully grown over multiple business and risk cycles.

1 Returns vary by currency class and depend on overall portfolio risk. Source: Credit Suisse

As of 31.03.2014




Emerging Markets Solutions Managed Assets

23

We have a strong track record in managing hard currency emerging market bonds. Corporate bonds represent the largest part of our hard currency assets while we mainly invest in sovereign bonds through local currencies.

We offer emerging market fixed income fund solutions. Additionally, we offer emerging market fixed income mandate solutions for different client segments. The offering ranges from highly standardized solutions to fully customized mandates.

CS Emerging Markets Total Assets under Management USD 2.7 bn

Multiple Solutions

73%

27%

Hard Currency Local Currency

Global Focus

Asia Focus

Global

Hard Currency Corporate Bonds: High Grade & High Yield

Local Currency Sovereign Bonds:

Hard Currency Corporate Bonds: High Grade & High Yield

Local Currency Sovereign Bonds:

Customized Segregated Accounts Global & Regional

USD EUR

CHF

USD EUR

CHF

EUR

CHF

USD

EUR

CHF

USD

SGD

EUR

CHF

USD

SGD

Source: Credit Suisse As of 31.03.2014




Emerging Markets Investment Solutions Overview

24

Hard Currency Local Currency

Credit Suisse (Lux) Emerging Market Corporate Bond

Fund

Credit Suisse (Lux) Emerging Market

Corporate Investment Grade

Bond Fund

Credit Suisse (Lux) Asia Corporate Bond

Fund

Segregated Mandates/

Managed Accounts

Credit Suisse (Lux) Emerging

Market Local Bond Fund

Credit Suisse Institutional Master

Fund Emerging Markets Bonds

Credit Suisse (Lux) Asia Local Currency

Bond Fund

Product Emerging Markets Hard Currency

Emerging Markets Hard Currency



Emerging Markets Local Currency



Benchmark JPM CEMBI Index JPM CEMBI IG JPM JACI (Ex. Sov.)

Different Indices JPM GBI EM JPM GBI EM (unhedged CHF)

JPM GBI APAC Div.

Investment Objective

The fund invests primarily in emerging markets corporate bonds, and to a

limited extent in USD bonds issued by

sovereign borrowers. The fund invest in

high grade and high yield corporate

borrowers.

The fund invests primarily in emerging markets corporate bonds, and to a

limited extent in USD bonds issued by

sovereign borrowers. At a minimum, each

investment must have an investment

grade rating of BBB-/Baa3.

The fund invests primarily in emerging markets corporate bonds issued by

borrowers domicile in Asia or which conduct their main activities in

Asia. The fund invest in high grade and high

yield corporate borrowers.

Segregated mandates invests in different emerging markets corporate strategies. USD Bonds issued by corporate issuers maintaining an

adequate balance among rating,

sectors and country.

The fund invests primarily in

emerging markets local bonds issued

by sovereign, quasi-sovereignand/or corporate entities

borrowers. The fund invest in high grade

and high yield borrowers.

The fund invests primarily in emerging markets local bonds issued by sovereign,

quasi-sovereignand/or corporate entities

borrowers. The fund invest in high grade

and high yield borrowers.

The fund Invests principally in fixed and

floating rate debt securities and debt

obligations of government and

government-related issuers and/or

corporate entities located throughout

Asia in local currencies.

Current AuM

USD 465 mn USD 165 mn USD 124 mn USD 1,233 mn USD 485 mn CHF 108 mn USD 131 mn

Investment Manager

Credit Suisse AG

PM: CS Zurich

Credit Suisse AG

PM: CS Zurich

Credit Suisse AG

PM: CS Singapore

Credit Suisse AG

PM: CS Zurich

Credit Suisse AG

PM: CS Zurich

Credit Suisse AG

PM: CS Zurich

Credit Suisse AG

PM: CS Singapore





CS (Lux) Emerging Market Corporate Bond Fund Investment Objective and Philosophy

25

Investment Objective

The fund invests primarily in corporate bonds, and to a limited extent in USD denominated bonds issued by sovereign borrowers from developing nations. The major categories are investment-grade corporate bonds and high yield or sub-investment-grade corporate bonds.

Actively managed, maintaining an adequate spread of risk through security, rating, sector, and country selection.

Alpha generation from active management of duration and bottom-up issuer selection.

Interest Rates and Credit Quality

Main part invested in corporate bonds with maturities below 10 years.

Interest rate exposure is actively managed which is key in an environment of rising rates.

Average credit rating BBB. Exposure to High Yield Bonds ~40%. Modified duration ~4.5.

Diversification

Managed against the J. P. Morgan CEMBI Composite Index. This index invests in corporate bonds with at least 5 years maturity and a minimum amount outstanding of USD 500 mn. The benchmark consists of government-owned companies as well as corporates.

Broad country and sector allocation in order to increase diversification and reduce cluster risk.

Sovereign bonds could account for up to 30% if needed.


Future performance indications and financial market scenarios are not reliable indicators of current or future performance. Performance indication does not consider commissions levied at subscriptions and/or redemption. This is an indicative asset allocation, which may change over time.




CS (Lux) Emerging Market Corporate Bond Fund Portfolio Look-through Positioning

26



Key Figures Maturity Distribution in years Sector AllocationGross YTM in % 5.7% 00-01 5.6% Financial 23.3%

Modified Duration 4.58 01-03 17.1% Oil & Gas 16.1%

Swap Spread 363 bp 03-05 25.0% Sovereign 11.3%

Number of Positions 212 05-07 25.8% Real Estate 9.9%

Average Rating (exponentially weighted) BB 07-10 21.5% TMT 7.2%

Average Maturity 5.71 10+ 5.1% Consumer 7.1%

Top 10 Holding Cum 15.4% Metals & Mining 6.3%

Largest Position 2.1% Industrial 6.3%

Floaters in % 0.1% Diversified 5.8%

Current AuM in mn USD 557 Others 6.7%

Top Holdings Coupon Maturity Weight Country allocation Rating Allocation in %

PETROTRIN 9.750% 14.08.19 2.1% China 11.83% AAA 0.0%

SINEK CAPITAL 7.700% 03.08.15 2.0% Russia 11.78% AA 4.7%

CAYMAN ISLANDS 5.950% 24.11.19 1.9% Brazil 10.17% A 7.7%

VOTORANTIM OVER 6.625% 25.09.19 1.6% Mexico 9.71% BBB 47.9%

UNITED MEXICAN 6.750% 06.02.24 1.5% Hong Kong 5.92% BB 24.3%

DUBAI GOVT INT'L 7.750% 05.10.20 1.4% United Arab Emirates 5.52% B 10.7%

RUSSIA-EUROBOND 7.500% 31.03.30 1.3% Turkey 3.79% CCC 1.8%

COUNTRY GARDEN 11.125% 23.02.18 1.2% Peru 3.77% NR 2.0%

TELEMAR N L 5.500% 23.10.20 1.2% Chile 3.57%

DAR AL-ARKAN SUK 5.750% 25.11.16 1.1% Other 33.9%

0% 20% 40%




CS (Lux) Emerging Market Corporate Bond Fund Rating and Maturity Overview

27

Rating Summary Maturity Summary


Performance indication does not consider commissions levied at subscriptions and/or redemption. This is an indicative asset allocation, which may change over time.

0%

10%

20%

30%

40%

50%

60%

70%

< 1 year 1-3 years 3-5 years 5-10 years > 10 years

CS (Lux) Emerging Market Corporate Bond FundJPM CEMBI

0%

10%

20%

30%

40%

50%

60%

AAA AA A BBB BB B CCC NR

CS (Lux) Emerging Market Corporate Bond Fund

JPM CEMBI




CS (Lux) Emerging Market Corporate Bond Fund (1/2) Portfolio Look-through Positioning

28

Sector Summary Relative Sector Summary



FinancialOil & GasSovereignReal EstateTMTConsumerMetals & MiningIndustrialDiversifiedUtilitiesTransportInfrastructurePulp & PaperCash

0%

5%

10%

15%

20%

25%

30%

Fina

ncia

l

Oil

& G

as

Sov

erei

gn

Rea

l Est

ate

TMT

Con

sum

er

Met

als

& M

inin

g

Indu

stria

l

Div

ersi

fied

Util

ities

Tran

spor

t

Infr

astru

ctur

e

Pul

p &

Pap

er

Cas

h


JPM CEMBI




CS (Lux) Emerging Market Corporate Bond Fund (2/2) Portfolio Look-through Positioning

29

Region Summary Top 20 Country Summary



0%

5%

10%

15%

20%

25%

30%

35%

40%

Africa Asia Europe Latin America Middle East


JPM CEMBI

0% 5% 10% 15% 20%

ChinaRussiaBrazil

MexicoHong Kong

United Arab EmiratesTurkey

PeruChile

ColombiaSouth Africa

Trinidad and TobagoCayman Islands

IndiaSupranational

KazakhstanQatarIsrael

IndonesiaAzerbaijan

Others


JPM CEMBI




CS (Lux) Emerging Market Corporate Bond Fund Net Performance vs. Benchmark (B-Tranche)

30

CS (Lux) Emerging Market Corporate

(Net after fees) JPM CEMBI

(Benchmark) Δ Fund vs. BM

1 Month 0.42% 0.64% -0.22% 3 Months 2.23% 3.03% -0.80% 6 Months 1.78% 2.60% -0.82% YTD 2.00% 3.36% -1.36% 1 Year -0.65% -0.99% 0.34% 3 Year 19.80% 18.31% 1.50%

Sources: Credit Suisse, Bloomberg As of 30.04.2014

Historical performance indications and financial market scenarios are not reliable indicators of current or future performance. Performance indications do not consider commissions levied at subscription and/or redemption.

90

95

100

105

110

115

120

125

130

10/10 04/11 10/11 04/12 10/12 04/13 10/13 04/14

JPM CEMBI CS (Lux) Emerging Market Corporate




CS (Lux) Emerging Market Corporate Bond Fund Track Record (Gross Figures)

31

Annualized Performance1 Yearly Performance since Inception


1 Actual returns for period less than 1 year. All performance figures are gross figures, inception date 01.07.2005. Historical performance indications and financial market scenarios are not reliable indicators of current or future performance. The performance data does not include fees and costs charged at issuance or redemption. BM 01.02.2010 – Today: JP Morgan CEMBI/BM 01.06.2009–31.01.2010: JP Morgan EMBI+/BM 01.07.2005–31.05.2009: JPM EMBI Global.

Composite: Bond Emerging Markets. BM: JPM CEMBI

-30.0

-20.0

-10.0

0.0

10.0

20.0

30.0

40.0

50.0

Yearto

Date2013 2012 2011 2010 2009 2008 2007 2006

H205

Account 2.38 1.29 19.98 3.06 15.33 40.51 -20.2 6.57 9.42 4.85

BM 3.36 -2.37 16.73 3.49 11.58 27.90 -10.9 6.27 9.87 5.35

Ret

urn

in %

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

3 Months 6 Months 1 Year 3 Years 5 YearsSince

Inception

Account 2.52 2.41 0.68 7.44 13.38 8.32

BM 3.03 2.60 -0.99 5.76 9.81 7.58

Ann

ualiz

ed R

etur

n in

%




CS (Lux) Emerging Market Corporate Bond Fund Peer Comparison

32

Peer Comparison

Sources: Morningstar, Credit Suisse As of 30.04.2014

Historical performance indications and financial market scenarios are not reliable indicators of current or future performance. The performance data does not include fees and costs charged at issuance or redemption.

1 Month 3 Month YTD 1 Year 3 Year (Ann.) 5 Year (Ann.)CS (Lux) EMMA Corporate Bond B USD 0.42 2.23 2.00 (0.65) 6.21 12.07

Aberdeen Global Emerg Mkts Corp Bd A2 0.74 2.98 2.81 (0.11) 4.66 -

BlueBay Emerg Mkt Corp Bd R USD 0.75 3.36 2.97 (3.08) 3.63 11.43

DWS Invest Emerg Mkts Corp A2 0.37 3.11 3.12 (0.86) 6.10 5.48

GS Gr & Em Mkts Corp Bd Base USD Acc 0.63 3.38 2.74 0.39 - -

Investec GSF EM Corp Dbt F Acc 1.14 3.78 3.55 0.09 4.60 -

JPM Emerg Mkts Corp Bd A (acc) - USD 0.57 3.29 3.04 (1.39) 5.97 -

MS INVF Emerging Markets Corp Debt B 0.59 2.85 2.64 (2.96) 4.67 -

UBAM Emerging Mkt Corp Bd A Acc 0.77 3.23 3.47 (0.83) 4.45 -

(4.00)

(2.00)

-

2.00

4.00

6.00

8.00

10.00

12.00

14.00




-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

- 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00

Ret

urn

Std Dev

CS (Lux) EMMA Corporate Bond B USD

Aberdeen Global Emerg Mkts Corp Bd A2

BlueBay Emerg Mkt Corp Bd R USD

DWS Invest Emerg Mkts Corp A2

JPM Emerg Mkts Corp Bd A (acc) - USD

MS INVF Emerging Markets Corp Debt B

UBAM Emerging Mkt Corp Bd A Acc

CS (Lux) Emerging Market Corporate Bond Fund Strong Risk-adjusted Performance

33

Risk/Reward Metrics over 3 Years

Investment Return

(3 Year Ann.) Std Dev (3 Year)

Information Ratio (3 Year)

Sharpe Ratio (3 Year)

TER Morningstar

Rating

CS (Lux) EMMA Corporate Bond B USD 6.21 6.91 0.87 0.90 1.46 **** Aberdeen Global Emerg Mkts Corp Bd A2 4.66 8.16 0.45 0.59 - *** BlueBay Emerg Mkt Corp Bd R USD 3.63 6.88 0.03 0.54 1.70 ** DWS Invest Emerg Mkts Corp A2 6.10 6.93 0.84 0.88 1.31 **** JPM Emerg Mkts Corp Bd A (acc) – USD 5.97 7.74 1.05 0.78 1.51 **** MS INVF Emerging Markets Corp Debt B 4.67 8.61 0.45 0.57 2.79 *** UBAM Emerging Mkt Corp Bd A Acc 4.45 7.14 0.36 0.64 2.09 ***

Sources: Morningstar, Credit Suisse As of 30.04.2014

Historical performance indications and financial market scenarios are not reliable indicators of current or future performance. The performance data does not include fees and costs charged at issuance or redemption.




CS (Lux) Emerging Market Corporate Bond Fund Portfolio Look-through Positioning

34


2 SG = Singapore MAS notified for Accredited Investors only. Target return is no projection, prediction or guarantee for future performance, and there is no certainty that the target return will be reached.

Fund Name Credit Suisse (Lux) Emerging Markets Corporate Bond Fund

Domicile Luxembourg

Legal Structure Undertakings for Collective Investment in Transferable Securities (UCITS) – Fonds Commun. de Placement (FCP)

Investment Manager Credit Suisse Ltd., Zurich

Portfolio Manager Gonzalo Borja, Andreas Fischer

Currency US Dollar (USD)

Currency Share Classes USD, EUR, CHF

Investment Objective The fund invests primarily in corporate bonds, and to a limited extent in U.S. dollar-denominated bonds issued by sovereign borrowers. The fund aims to deliver a higher return than what could be obtained from bonds issued by borrowers in industrialized nations. The fund is actively managed in terms of its investment approach.

Benchmark JP Morgan CEMBI Index

Currency US Dollar (USD)

Share Classes USD, EUR, CHF

Client type HNW and Institutional (QI)

Management Fee p.a. Retail classes (B, R): 1.20%/Institutional Class (I, S, Y): 0.80% (> 500 k)/Institutional Class (on request): 0.30% (>25 mn)

Liquidity Daily, with cut-off 15:00 CET

Registration LU, DE, ES, AT, FR, CH, CL, IT, FI, NO, SE, SG2

ISIN

A (USD): LU0660296467 (Distributing) B (USD): LU0660296541 (Accumulating) IB (USD): LU0660296624 (Accumulating) MB (USD): LU0804456878 (Accumulating)

BH (EUR):LU0660296111 (EUR hedged, Acc.) IBH (EUR):LU0660296384 (EUR hedged, Acc.) MB (EUR):LU1000867603 (EUR hedged, Acc.)

BH (CHF):LU0660295907 (CHF hedged, Acc.) IBH (CHF):LU0660296202 (CHF hedged, Acc.)

Valor no. A (USD): 13506687 MB (USD): 19019025 B (USD): 13506689 IB (USD): 13506700

BH (EUR):13506698 IBH (EUR):13506709 MB (EUR): 23006904

BH (CHF):13506692 IBH (CHF):13506702




Content

Executive Summary




Biographies


35




Asset Management Business of Credit Suisse Broad Range of Expertise

36

CHF 373.5 bn1 assets under management. Extensive expertise in traditional and alternative

investments. Comprehensive range of investment solutions

including segregated mandates, mutual funds and other tailor-made solutions.

Alternative Investments: − Hedge Funds − Credit Group − Commodities − Emerging Markets.

Core Investments: − Fixed Income − Equities − Index Solutions − Real Estate − ICBCCS (joint venture).

Multi Asset Class Solutions: − Discretionary mandates and wealth management

funds.

Traditional Investments (in CHF bn)

0.3 6.9 13.8

40.0

40.8

69.7

104.0

Core Other

ICBCCS JV

Equities

Real Estate

Fixed Income

Index Soluition

Multi Asset Class Solution

Alternative Investments (in CHF bn)

18.0

29.6

9.3

19.3

0.2

Hedge Funds

Credit Group

Commodities

Emerging Markets

Private Equity

1 Including Legacy Asset Management Company. The products mentioned on this page are meant for illustration purposes only and are not intended as a solicitation or an offer to buy or sell these products.





Fixed Income Investment Boutiques within Asset Management Broad Range of Expertise

37

Highly specialized and dedicated investment managers offering full-service and sophisticated credit investment solutions.

Superior expertise and institutional know-how through experienced teams globally.

Substantial scale and extensive network. Broad range of investment solutions within the investment

boutiques. Investment Boutiques are designated center of

competencies within the asset management business of Credit Suisse.

Access to global platform of Credit Suisse AG.

Selected Fixed Income Investment Boutiques

SFI Group Specialized Fixed

Income Group Hedging-Griffo

Credit & Fixed Income Brazil EMCO

EM Credit Opportunities

Credit Investment

Group Senior Loans &

High Yield

York Capital Credit

Opportunities

Core Fixed Income

FI Core Solutions

ILS Insurance Linked

Strategies

Aventicum Dedicated EM

Credit Manager in Qatar

Securitized Products

Structured Credit





Specialized Fixed Income Group Overview

38

USD 10.7 bn assets under management. 24 investment professionals with an average of 13 years

of experience. Global developed and emerging market credit solutions

across sectors and rating categories. Relative and absolute return solutions with customized

benchmarks and investment guidelines. Investment process with a fundamental and relative value

bottom up security selection and top down macro strategy.

Risk management, investment controlling and best execution are an integrated part of the investment process.

Tailor-made investment solutions for UHNW clients, family offices, independent asset managers, pension funds and corporations.

Sophisticated client reporting and risk management framework.

Direct access to dedicated portfolio managers.

Comprehensive Offering

Asia

Global Convertibles

Unconstrained Credit

Emerging Markets

Absolute Return

Special Situations

SFI Group Specialized Fixed

Income Group





Specialized Fixed Income Group Overview

39

Credit & Special Situations Oliver Gasser, CFA

Global Convertible Bonds Peter Schilling

Emerging Markets Gonzalo Borja

Fixed Income Specialist Ralph Geiger

Asia Alexandre Bouchardy, CFA

UHNW & Absolute Return Luc Mathys, CFA, FRM

SFI Group Michel Degen Deputy: Luc Mathys, CFA, FRM

Michel Berger Christian Dimita Dominik Scheck, CFA Christoph Durst, CIIA Marcel Rüede, CFA

Laura Slater, CIIA Robert Wakiyama Dominique Gilgen, CFA

Dr. Daniel Niedermayer Vedran Stankovic, CFA

Andreas Fischer, CFA Andranik Safaryan Jessie Andrianjaka

Adrian Chee Lei Zhu, CFA Pascal Schneider Alexandre Bruhin





Content

Executive Summary





Biographies


40




Emerging Markets/APAC Fixed Income Team

41

Research

Forex

Trading

Product Specialist

Macro Themes

Investment Committee

Global Rates

Committee

Global FX

Committee

Global Credit

Committee

Investment Guidelines Monitoring

Risk Management

Legal & Compliance

Product Management

Location Investment Team Investment Experience

Function

Zurich

Gonzalo Borja Director

14 years Head FI Emerging Markets Senior Portfolio Manager

Andreas Fischer Director

13 years Senior Portfolio Manager

Andranik Safaryan Assistant Vice President

4 years Portfolio Manager Credit Analyst

Jessie Andrianjaka 3 years Junior Portfolio Manager Credit Analyst

Singapore

Alexandre Bouchardy Director

11 years Head Fixed Income Asia Senior Portfolio Manager

Adrian Chee Director


Lei Zhu Vice President


Alex Bruhin Assistant Vice President

6 years Portfolio Manager Credit analyst





Investment Management Team Fixed Income Emerging Markets

42

Gonzalo Borja Head of Fixed Income Emerging Markets

Gonzalo joined Credit Suisse in 2012 and currently manages Emerging Market credit portfolios and funds. Previously, he managed the Clariden Leu Bond Fund EUR, the Clariden Leu Corporate Bond Fund and the Clariden Leu European High Yield Bond Fund at Clariden Leu in Zurich. Furthermore, he was responsible for overseeing the firm’s credit investment process within fixed income asset management. Prior to that, he also held roles at Banco Santander in Equity Capital Markets in Madrid and Baring Private Equity Partners in London. Gonzalo has more than 14 years of fixed income investment experience. He holds a degree in Business Administration from the European Business School, Madrid.

Andreas Fischer Senior Portfolio Manager

Andreas joined Credit Suisse in 2012 and currently manages Emerging Market credit portfolios and funds in hard and local currencies. Previously, Andreas was responsible for Hedging and Overlay Strategies and monitored the asset allocation process at Clariden Leu in Zurich. In addition, he also co-managed the Clariden Leu Core Plus Funds. Prior to that, he managed absolute return fixed income strategies including Emerging Market hard and local currency exposure at London & Capital Asset Management in London. Andreas has more than 11 years of investment experience in fixed income strategies. He holds a MSc in Finance from Birkbeck University, London and is a CFA charterholder.

Andranik Safaryan Credit Analyst and Portfolio Manager

Andranik joined Credit Suisse in 2012 and is currently an Emerging Market credit analyst and portfolio manager. Previously, Andranik worked on the Emerging Market team at Clariden Leu in Zurich, where he covered Russia and CIS as a credit analyst and was deputy Portfolio Manager. Andranik started his career at Swisscanto Asset Management in Zurich in the Fixed Income Sales & Distribution unit. Andranik has more than 4 years of investment experience in Fixed Income. He holds a Master in Economics with a focus on Financial Econometrics and Statistics and a Bachelor’s degree in Law and Economics from the University of St. Gallen, Switzerland.

Jessie Andrianjaka Credit Analyst and Portfolio Manager

Jessie Andrianjaka joined Credit Suisse in 2011 and is currently an Emerging Market credit analyst and portfolio manager. Previously, she worked for a French state owned funds of funds of Private Equity (CDC Entreprises), as investment analyst and she also worked as an analyst in Transaction Advisory and Audit Services for Ernst and Young Financial Services. Jessie holds a Master in Management of ESCP EUROPE, a Master of Science in Economics from the City University of London and the German Diplom-Kauffrau.




Investment Management Team Fixed Income Asia

43

Alexandre Bouchardy

Alexandre Bouchardy, Director, heads the Asian Fixed Income team. He manages Global Fixed Income IG portfolios for European and Swiss pension funds as well as Asian Central Banks for which he is responsible. From 2005 to 2012, he was responsible for Inflation-Linked Solutions and won several Lipper Fund Awards in various European countries. Before joining Credit Suisse in 2002, Alexandre worked for Pictet & Cie. Banquiers and JP Morgan in Geneva, Switzerland, and Paris, France. Alexandre has more than 12 years of investment experience in Fixed Income. He is a CFA charter-holder and holds a Master Degree in Economics from the University of Lausanne (HEC), Switzerland.

Adrian Chee

Adrian Chee, Director, manages Emerging Market and Asian corporate portfolios and funds. Before joining Credit Suisse, Adrian worked for Western Asset Management in Singapore, managing Asian hard and local currency IG and non-IG corporates. Prior he worked for Standard & Poor’s Infrastructure and Financial Services Ratings unit as a credit analyst for corporates and financial institutions in South East Asia and South Asia. Before, Adrian was risk manager at Standard Chartered Bank, Singapore. Adrian has more than 20 years of investment experience in Asian Fixed Income and Credit Markets. He holds a Bachelor of Economics from the La Trobe University, Australia, where he focused on Banking and Finance.

Lei Zhu

Lei Zhu, Vice President, manages Emerging Market and Asian Fixed Income portfolios and funds with a focus on China CNH and CNY. Before joining Credit Suisse, Lei worked for DBS Bank in Singapore, managing fixed income portfolios of Asian sovereigns and corporates, specializing in Asian IG and High Yield issuers. In particular, she used to manage CNH bond investment portfolios and USD Global Credit Funds. Lei has more than 8 years of investment experience in Asian Fixed Income and Credit Markets. She is a CFA charter-holder and holds a Master of Science in Business Administration from the University of British Columbia in Vancouver, Canada.

Alexandre Bruhin

Alexandre Bruhin joined Credit Suisse in 2007 and is currently a Emerging Market and High Yield credit analyst and portfolio manager. Previously he was responsible for USD rates and credits where he managed various USD funds and mandates. Furthermore, he worked as a quantitative fixed income analyst specializing in fixed income performance attribution and risk management tools. He holds a Master in Business Administration from the University of Edinburgh as well as Bachelor’s degree in Investment Management from the University of Johannesburg.




Content

Executive Summary





Biographies


44




Emerging Markets Investment Process Credit Investment Process – Overview

45

Systematic analysis of several drivers forms input for credit investment strategy. Decisions are taken with regards to sector, issuer market weights and credit curve positioning. Underlying portfolio exposure is predominantly invested in cash bonds with use of derivative exposure for efficiency, hedging and

liquidity reasons.

Assessment Strategy

Fundamental Outlook (top down) Leverage versus earnings cycle General rating trends Global growth trends.

Issuer Analysis (bottom up) Financial analysis Market position Management.

Relative Valuations Current versus historical spread levels Emerging Markets premium over US/European credit markets Domestic funding rates.

Technical Indicators Demand/Supply Investment fund flows Market risk appetite.

Implementation and Monitoring

Decision Levels

Level 2 – Sector Allocation Relative sector exposure

absolute and relative to benchmark.

Level 1 – Country Allocation Overall market exposure absolute

and relative to benchmark.

Monitoring Ongoing monitoring of performance and

country/sector/issuer positioning versus benchmark.

Relative value opportunities within each sector/credit curves.

Instruments Core exposure directly through hard

currency cash bonds. In some cases derivatives such as credit

default swaps (CDS) or Interest Rate Swaps/Futures are used as an efficient way for hedging and/or accessing markets.

Level 3 – Issue Selection Diversified issuer exposure absolute

and relative to benchmark.





Emerging Markets Investment Process Credit Investment Process – Issuer Selection

46

Emerging Markets Universe

First Layer Target EM Universe Approved/Critical Portfolio Monitoring

The EM corporate bond universe of approximately 1,200 issues based on a combination of the two largest Index providers: JPM CEMBI Index and ML EMCB Index

A smaller universe, as a result of an analytical process of different layers + A selection of off-benchmark issuers + A selection of smaller issuers with <0.2% in the benchmark

Target EM Universe: Approximately 200 issuers Seven sectors: Banks, Retail, Industrials, Telecom, Metals & Mining, Oil & Gas and Utilities Full coverage of this universe

Approved Universe Critical List

Ongoing Market Assessment.

Monthly Strategy Review.

Performance Contribution.

Compliance with guidelines and regulations.

EM Corporate bond universe of ca. 1,200 issues. Including most issuers in most countries and regions in the Hard currency land.

Company Analysis: Individual company

analysis. Detailed financial profile.

Scorecards. Sector Assessment.

Filter process of different layers: Issuer % cap. Country cap. Rating. Denomination.

Approved List: Issuers to invest.

Critical List: Issuers to avoid based on our analysis.

Portfolio Management.

Compliance and Risk Management.

Performance Measurement and Reporting.





Emerging Markets Investment Process Credit Investment Process – Detailed Issuer Analysis

47


Assessment of business profile of company including SWOT analysis.

Understanding of main performance drivers of company (e.g., commodity prices).

Financial flexibility in terms of maturing debt and credit facilities.

Focus on key financial ratios and their development. Relative value considerations versus its own curve,

competitors, sector and rating. Moody’s and S&P rating and outlook are assessed for

possible catalysts for rating upgrade/downgrade.

Rated Bonds




Disclaimer

48

This document was produced by Credit Suisse AG and/or its affiliates (hereafter “CS”) with the greatest of care and to the best of its knowledge and belief. However, CS provides no guarantee with regard to its content and completeness and does not accept any liability for losses which might arise from making use of this information. The opinions expressed in this document are those of CS at the time of writing and are subject to change at any time without notice. If nothing is indicated to the contrary, all figures are not audited. 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 recipient from exercising his/her own judgment. The recipient is in particular recommended to check that the information provided is in line with his/her own circumstances with regard to any legal, regulatory, tax or other consequences, if necessary with the help of a professional advisor. This document 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 any copy thereof may be sent, taken into or distributed in the United States or to any U. S. person (within the meaning of Regulation S under the US Securities Act of 1933, as amended). Every investment involves risk, especially with regard to fluctuations in value and return. Investments in foreign currencies involve the additional risk that the foreign currency might lose value against the investor’s reference currency. Historical performance indications and financial market scenarios are not reliable indicators of current or future performance. Performance indications do not consider commissions levied at subscription and/or redemption. Furthermore, no guarantee can be given that the performance of the benchmark will be reached or outperformed. Discretionary mandates and/or investment products used within the framework of the mandates (e.g. alternative instruments, structured instruments and derivatives) may involve a high degree of complexity and risk, or may be subject to stock market fluctuations. 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 weak economy.

Emerging markets investments usually result in higher risks such as political risks, economical risks, credit risks, exchange rate risks, market liquidity risks, legal risks, settlement risks, market risks, shareholder risk and creditor risk. Investors should be willing and financially able to accept the risk characteristics of the investments described in this document. Investment principal on bonds can be eroded depending on sale price or market price. In addition, there are bonds on which investment principal can be eroded due to changes in redemption amounts. Care is required when investing in such instruments. The investment funds mentioned in this publication have been established under Luxembourg law as undertakings for collective investment in transferable securities (UCITS) subject to EU Directive 2009/65/EC, as amended. The representative in Switzerland is Credit Suisse Funds AG, Zurich. The paying agent in Switzerland is Credit Suisse AG, Zurich. Subscriptions are only valid on the basis of the current sales prospectus, the simplified prospectus, the bylaws and/or contractual terms and conditions and the most recent annual report (or semi-annual report, if more recent). The prospectus, simplified prospectus and/or the Key Investor Information Document (KIID), bylaws and/or the contractual terms and conditions and the annual and semi-annual reports are available free of charge from Credit Suisse Fund Services (Luxembourg) S.A., Luxembourg, from Credit Suisse Funds AG, Zurich or from any branch of Credit Suisse AG in Switzerland. Copyright © 2014 Credit Suisse Group AG and/or its affiliates. All rights reserved.

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