Even with two of the best performing mutual funds in Morningstar’s managed futures category, LoCorr Funds is back in the market with a new managed futures fund. The new LoCorr Market Trend Fund (LOTAX), which was launched on June 30, is principally sub-advised by the $7 billion macro trading shop, Graham Capital Management, who will use multiple trend following models to manage assets of the fund.
LoCorr’s Top Performing Funds
Morningstar’s recent rankings for funds in the managed futures category put two of LoCorr’s funds among the top three for year-to-date performance through July 15. While the average return for the overall category is -1.11%, several funds stand out. Just behind the top performing fund, the Catalyst Hedge Futures Strategy Fund, is the LoCorr Long/Short Commodities Strategy Fund, followed by the LoCorr Managed Futures Strategy Fund. All three funds are up over 10% for the period.
The new LoCorr Market Trend Fund will be the fifth fund in LoCorr’s lineup; in addition to the two funds mentioned above, the lineup includes the LoCorr Long/Short Equity Fund (LEQAX) and the LoCorr Spectrum Income Fund (LSPAX).
Sub-advisor: Graham Capital Management
Graham Capital Management, one of the fund’s two sub-advisors, has two decades of experience utilizing macro-oriented quantitative investment strategies on behalf of clients. The firm currently manages roughly $7 billion for global institutions and individual investors, with a focus on global fixed income, currency, commodity, and equity markets. “As the use of liquid alternatives has expanded, we are excited to bring our investment strategy to the market in a liquid, mutual fund format,” says Kenneth G. Tropin, Chairman and Founder of Graham Capital.
In managing the fund, Graham Capital will employ quantitative techniques to select long and short positions in global futures and foreign exchange markets. The techniques used are designed to generate absolute returns, regardless of market direction, and to have limited correlation to traditional asset classes. The fund’s quantitative trading system considers an investment’s price, volatility, and length of time a position is held in the fund’s portfolio, and gradually enters or exits positions over the course of a trend, timing the market in an attempt to maximize returns.
“We are very excited to add the Market Trend Fund to our growing lineup of low-correlating strategies available to our partner firms and their clients,” said Kevin Kinzie, CEO of LoCorr Funds.“We enthusiastically embrace the chance to partner with Graham Capital, and the timing could not be better.”
Sub-advisor: Nuveen Investments
LOTAX’s secondary, fixed income strategy is designed to generate income and preserve capital. While up to 25% of the fund’s assets will be allocated to Graham Capital, the remaining assets will be managed by the fund’s second sub-advisor, Nuveen Asset Management, a subsidiary of the privately held Nuveen Investments. Nuveen will invest its portion of the fund’s assets primarily in a wide range of investment grade fixed income securities.
LoCorr Fund Management, the advisor to the fund, allocates between Graham Capital’s market trend strategy, and the fixed income strategy managed by Nuveen. The primary objective of the fund is capital appreciation regardless of market direction, with a secondary objective of low volatility. Investment management fees are 1.50% across Class A, C and I share classes, and the expense ratios are 2.00%, 2.75% and 1.75%, respectively.
For more information, visit the LoCorr Funds website.