Managed Futures

Used by investment professionals for more than 30 years, managed futures are an asset class with over $300 billion in AUM. Managed futures can play an important role by:

1. Providing the potential for enhanced returns in a variety of economic environments

Managed futures have the potential to produce positive returns in bull or bear markets, potentially enhancing a portfolio's overall performance.

Performance of Managed Futures and U.S. Stocks Indices
Hypothetical Growth of a $1,000 investment on August 31, 2000 through June 30, 2016.

 

Past performance is not a guarantee of future results. The referenced indices are shown for general market comparisons and are not meant to represent the Fund. One cannot invest directly in an index. Fund performance may be obtained by calling 1.855.LCFUNDS (1.855.523.8637). U.S. Stocks represented by S&P 500 Index and Managed Futures are represented by Barclays CTA Index. Source: LoCorr Fund Management.

2. Creating clear portfolio diversification by investing in commodities and financial futures

Managed futures consist of a broad variety of global investments in commodities and financial futures. The hypothetical charts illustrate how adding managed futures to a portfolio of stocks and bonds has the potential to enhance returns and reduce volatility.

The referenced indices are shown for general market comparisons and are not meant to represent the Fund. Bonds are represented by Barclays Capital U.S. Aggregate Index, Stocks are represented by S&P 500 Index, and Managed Futures are represented by Barclays CTA Index. Source: LoCorr Fund Management.

3. Helping to potentially reduce risk exposure

Managed futures have shown strong historical performance when traditional portfolios have suffered. The graph below illustrates the performance of managed futures during the 5 worst drawdowns of the S&P 500 Index.

Managed Futures Index refers to the Barclays CTA Index. Fees and transaction costs are reflected. Stocks refers to the S&P 500 Total Return Index. This total return index does not reflect fees or transaction costs, but includes net dividends and is calculated by adding an indexed dividend return to the index price change for a given time period. Source: LoCorr Fund Management

Index Standardized Returns as of June 30, 2016       1 Year      5 Years      10 Years
S&P 500 Total Return Index                                     3.99%     12.10%        7.42%
Barclays CTA Index                                                 0.47%      0.64%         2.97%
Barclays Capital U.S. Aggregate Bond Index               6.00%      3.76%         5.13%

Stocks, bonds, and futures are not guaranteed. Investments in equity securities involves risks such as volatility and the potential for loss of principal. Bonds traditionally experience less volatility than stocks and typically decrease in value when interest rates rise. Futures are derivatives which can be volatile and involve various types and degrees of risk, and depending upon the characteristics of a particular derivative, suddenly become illiquid.
The performance of various indices is shown for comparison purposes only. The performance of those indices was obtained from published sources believed to be reliable but which are not warranted as to accuracy or completeness. Unless noted otherwise, index returns do not reflect fees or transaction costs and reflect reinvestment of net dividends. One cannot invest directly in an index.
S&P 500 Total Return Index is a capitalization weighted unmanaged benchmark index that includes the stocks of 500 large capitalization companies in major industries. This total return index includes net dividends and is calculated by adding an indexed dividend return to the index price change for a given period. Performance as of 12/31/14, 13.69% (1Yr); 15.45% (5Yr); 7.67% (10Yr).
Barclays CTA Index is an unweighted index which attempts to measure the performance of the Commodity Trading Advisor (“CTA”) industry. The Index measures the combined performance of all CTAs reporting to Barclay Trading Group who have more than 4 years past performance. Fees and transaction costs are reflected. Performance as of 12/31/14, -7.71% (1Yr); 1.60% (5Yr); 3.41% (10Yr).
Barclays Capital U.S. Aggregate Bond Index is a broad-based bond index comprised of government, corporate, mortgage and asset-back issues rated investment grade or higher. Performance as of 12/31/14, 5.97% (1Yr); 4.45% (5Yr); 4.71% (10Yr).
Drawdown refers to a peak-to-trough decline for a specific recorded period.
Volatility represents Standard Deviation - the statistical measurement of dispersion about an average, which depicts how widely a portfolio’s returns varied over a certain period of time. When a portfolio has a high standard deviation, the predicted range of performance is wide, implying greater volatility.
Diversification does not assure a profit nor protect against loss in a declining market.
The fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. The statutory prospectus contains this and other important information about the investment company, and it may be obtained by calling 1.855.LCFUNDS, or visiting www.LoCorrFunds.com. Read it carefully before investing.
Mutual fund investing involves risk. Principal loss is possible. The Fund is non-diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified fund. Therefore, the Fund is more exposed to individual stock volatility than a diversified fund. The Fund invests in foreign investments and foreign currencies which involve greater volatility and political, economic and currency risks and differences in accounting methods. The Fund may make short sales of securities, which involves the risk that losses may exceed the original amount invested. Investing in commodities may subject the Fund to greater risks and volatility as commodity prices may be influenced by a variety of factors including unfavorable weather, environmental factors, and changes in government regulations. The Fund may invest in derivative securities, which derive their performance from the performance of an underlying asset, index, interest rate or currency exchange rate. Derivatives can be volatile and involve various types and degrees of risks, and, depending upon the characteristics of a particular derivative, suddenly can become illiquid. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. Investments in Asset Backed, Mortgage Backed, and Collateralized Mortgage Backed Securities include additional risks that investors should be aware of such as credit risk, prepayment risk, possible illiquidity and default, as well as increased susceptibility to adverse economic developments.
LoCorr Distributors, LLC is a broker dealer affiliated with LoCorr Funds. LoCorr Distributors, LLC has no affiliation with Quasar Distributions, LLC. The LoCorr Managed Futures Strategy Fund and the LoCorr Long/Short Commodities Strategy Fund are distributed by Quasar Distributors, LLC.
© 2015 LoCorr Fund. All rights reserved.