LoCorr Futures Portfolio Fund Reports $12.9M Loss

Declining valuations in futures, forward contracts, and private investments weighed heavily on fund performance.

August 14, 2025

Market-Driven Setbacks

LoCorr Futures Portfolio Fund saw its performance fall sharply in the first half of 2025, reporting a net loss of $12.95 million. The drop marks a significant shift from the $15.5 million gain reported over the same period last year. Futures and forward currency contracts were the primary drivers of the loss, but the pressure extended across the portfolio.

The biggest hit came from realized losses in futures, swaps, and forward contracts, which totaled over $10.5 million. Add in nearly $1.2 million in declining unrealized gains, and derivatives exposure proved to be a key source of drawdown. The fund’s investment in a private fund also moved lower, dropping nearly $800,000 in value. Meanwhile, the exchange membership lost $153,000 over the same period.

Interest income of $1.94 million offered some support, but it wasn’t enough to offset the impact of over $2.1 million in total expenses. Those costs included:

Trading advisor management fees

General partner administrative and performance fees

Selling agent compensation

Each of these added to the pressure on net results and contributed to the fund’s negative return over the period.

Capital Outflows and Allocation Shifts

The fund's net assets declined from $109.7 million to $79.2 million during the period. This reflected not only market-driven losses, but also investor redemptions totaling more than $17 million. Every share class saw a decrease in capital, with the largest shift occurring in Class A, which fell from $70.2 million to $47.9 million.

The portfolio also shifted away from securities. Investments in that category dropped from $60.6 million at year-end to $39.7 million by June 30. At the same time, cash holdings increased, giving the fund greater flexibility in managing liquidity through a volatile stretch.

High Volume, Low Return in Derivatives

The fund remained highly active in derivatives. More than 190,000 futures contracts and over 123,000 forward currency contracts were closed in the first six months of the year. Despite this volume, realized losses in these instruments added up to nearly $10.1 million. Unrealized gains on open positions remained modest—under 1% of net asset value at the end of June.

Exposure to metals futures was especially volatile. Long positions in metals showed gains, but those were more than offset by losses on short positions, particularly in the U.S. market. Currency and energy contracts also saw mixed performance, contributing to overall weakness in the fund’s futures book.

Fee Structures and Unit-Level Impact

Each unit class within the fund carries its own fee structure, which shaped results during the period. Class A and B units include ongoing selling agent and servicing fees, while Class I offers reduced management fees but includes a performance-based component. For the first half of the year, no performance fees were triggered.

NAVs fell across the board:

Class A declined from $4,010.26 to $3,491.85

Class B dropped from $6,867.44 to $6,033.31

These changes reflect not just underlying performance, but also the impact of class-specific fee loads on investor returns.

Positioning Going Forward

Given the volatility across asset classes and derivatives markets, LoCorr adjusted by reducing exposure to securities and increasing cash. These shifts point to a more defensive stance, but without a clear directional bet on near-term recovery. Unless performance in futures and private investments stabilizes, the fund may continue to see pressure on returns and redemptions.

LoCorr’s model is built around low-correlation, alternative strategies. But in the current environment, even diversified exposures are not immune from broader market moves. The fund's next steps will likely be shaped by whether derivatives and fixed income markets show signs of steadier ground in the back half of the year.