Why Own Commodities?

Commodities play a crucial role in both the global economy and in constructing a well-diversified portfolio. Commodity markets are generally large and liquid, and have grown substantially in recent decades. Commodities can play an important role in a portfolio by offering diversification and growth potential.
 
Access to Additional Markets
Commodity strategies offer access to very large markets that have grown significantly in recent decades. Historically, commodities have provided a potential hedge against inflation, and have been used as an investment to help participate in the global economy. As these markets fluctuate, a diversified commodities portfolio with the ability to go long or short can provide the potential for profits in both rising and falling commodity markets.  



Diversification
Long/short commodity strategies have historically provided strong returns, and their performance has generally not moved in tandem with stocks or bonds. Adding investments such as long/short commodities, with a low correlation to other asset classes, provides the potential to reduce risk and improve returns in traditional investment portfolios.
 

Source:LoCorr Fund Management.
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. Long/Short Commofities represented by Mornignstar Long/Short Comodity Index. U.S. Stock represented by S&P 500. Bonds is represented by BBgBarc US Agg Bond. 

 


Potential to Enhance Returns
While commodities can be an important asset class in a well-diversified portfolio, historically, the majority of commodity investments have been long-only. Long-only commodity investments can be highly volatile and subject to significant drawdowns when prices decline, as seen in the graph below. Adding long/short commodities to a portfolio provides the potential to generate higher returns, lower risk, and achieve better capital preservation than long-only commodities.

Growth of Investment
Hypothetical Growth of a $1,000 investment on August 1, 2007 through June 30, 2019

 


 
Source:LoCorr Fund Management.
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. Long/Short Commofities represented by Mornignstar Long/Short Comodity Index; Long-Only commodities represented by S&P GSCI Commodity Index. Fund performance may be obtained by calling 1.855.LCFUNDS (1.855.523.8637). The growth of $1,000 chart reflects a hypothetical $1,000 investment in the index noted. Index performance is not illustrative of fund performance. One cannot directly invest in an index. 




Click here for important disclosure and definition information.

Diversification does not assure a profit nor protect against loss in a declining market.