Trend following is an investment strategy based on the technical analysis of changing market prices, rather than on the fundamental strengths of the investments. This strategy believes that prices tend to move upwards or downwards over time. Therefore, trend followers try to take advantage of these “market trends” by observing current trends and deciding whether to buy or sell based on these factors.
Owning trend-following strategies within your overall portfolio may bring many benefits, such as the potential to provide:
Adding a trend-following strategy to a portfolio has the potential to provide a better risk-adjusted return. Allocating 20% of a portfolio to a trend-following strategy helps provide lower volatility, lower market risk, and significantly lower maximum drawdown, all while producing similar returns to that of a traditional stock/bond portfolio.
Past Performance is not a guarantee of future results. Index performance is not illustrative of fund performance. Bonds are represented by Bloomberg U.S. Aggregate Index, Stocks are represented by S&P 500 Index, and Trend Following is represented by SG Trend Index. The referenced indices are shown for general market comparisons and are not meant to represent a specific Fund. One cannot invest directly in an index. Source: Morningstar and LoCorr Fund Management.
Trend-following strategies have historically shown low or virtually zero correlation to a variety of traditional and alternative investments, providing the ability to further diversify an investment portfolio.
Trend-following strategies can potentially enhance a portfolio’s overall performance by producing positive returns in bull and bear markets. As the chart illustrates, these strategies have yielded positive long-term performance, even during market downturns.
Growth of a Hypothetical $1,000 investment – September 1, 2000, through December 31, 2022
Past Performance is not a guarantee of future results. U.S. Stocks represented by S&P 500 Index. Trend-Following Strategies represented by SG Trend Index. The referenced indices are shown for general market comparisons and are not meant to represent a specific fund. 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 invest directly in an index. Fund performance may be obtained by calling 1.855.LCFUNDS (1.855.523.8637). Source: LoCorr Fund Management.
Trend-following strategies have the ability to provide exposure to a broad range of global markets. This may include, but is not necessarily limited to, sectors such as currencies, stock indices, commodities and fixed income. As you can see below, there are multiple markets within each sector, providing the ability for more diversification as compared to traditional stock and bond portfolios.
The above list is a partial representation of possible market exposure.
For those seeking diversification, we believe correlation should be central to the decision process. ...
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Diversification does not assure a profit nor protect against loss in a declining market.
Mutual fund investing involves risk. Principal loss is possible. The Fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. The prospectus contains this and other important information about the investment company, and it may be obtained by clicking here or a free-hard copy is available by calling 1.855.LCFUNDS. Read it carefully before investing. The Funds are offered only to United States residents, and information on this site is intended only for such persons. Nothing on this website should be considered a solicitation to buy or an offer to sell shares of the Funds in any jurisdiction where the offer or solicitation would be unlawful under the securities laws of such jurisdiction. The LoCorr Funds are distributed by Quasar Distributors, LLC.
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