LOCORR FUTURES PORTFOLIO FUND L.P. Annual Report — How They Did This Year

I’ve reviewed the latest update for the LoCorr Futures Portfolio Fund. If you are considering this investment, remember that this isn't a typical company selling goods. It is a "fund of funds" that bets on global market movements. Here is a breakdown of how they operate.

1. What does this fund do?

Think of LoCorr as a professional betting pool. They don’t make products. Instead, they hire expert "Trading Advisors" to bet on the direction of global markets—like gold, oil, currencies, or stock indexes.

To stay steady, they balance these risky bets with a "safety net" of stable assets, such as U.S. Treasury bonds. They use a "Managed Futures" strategy to track trends in over 100 global markets. Their goal is to provide returns that don't move in lockstep with the S&P 500.

2. How is the money managed?

The fund splits its money among six professional trading firms, including Crabel Capital Management and Millburn Ridgefield Corporation. The General Partner, LoCorr Fund Management, decides how much capital each firm gets based on their own risk models. They can fire or replace these advisors at any time and usually rebalance the portfolio every quarter to keep risk levels in check.

3. The cost of doing business

This is a high-fee investment. Because you are paying for professional advisors, the costs add up:

• Management Fees: The fund charges 1% of your assets annually.
• Performance Fees: Advisors typically take 15% to 30% of new trading profits. They only take this if they beat their previous high-water mark, so you don't pay for the recovery of past losses.
• Operating Costs: Administrative, legal, and audit expenses totaled about $450,000 last year.
• Trading Costs: The fund pays brokerage commissions and transaction fees directly. These change based on how often the advisors trade.

Bottom line: With total annual expenses often hitting 3.5% to 4.5%, the fund must perform very well just for you to break even.

4. Financial Health

As of December 31, 2025, the fund held about $69 million in assets. It is a regulated entity, registered with the CFTC and the National Futures Association. Since the fund doesn't sell products, we measure its health by its "Net Asset Value" (NAV) per share. Last year, the fund gained $4.2 million from investments. After $2.8 million in expenses, the fund grew by $1.4 million.

5. Key Risks

• Betting Risk: The fund uses significant leverage—often 3:1 or higher—to control large positions. A sudden market crash can quickly wipe out capital.
• Fee Drag: High fees create a steep hurdle. If advisors don't beat the market by at least 4% annually, you will likely earn less than a simple, low-cost index fund.
• Manager Discretion: The General Partner has total control over where the money goes. They can change advisors or strategies at any time, meaning past performance may not predict future results.

6. Is it a good investment?

This fund is for investors who want returns that don't move with the stock market. It acts as a hedge against volatility for a traditional portfolio. However, the high fees and complexity make this a sophisticated choice. You are paying a premium for the hope that these experts can profit from global trends that are otherwise hard to access.

Final Thought: Before committing, ask yourself if you are looking for "uncorrelated returns"—gains that happen when the stock market is flat or down. If you are, this fund is designed for that purpose, but you must be comfortable with the high expense ratio and the volatility inherent in leveraged futures trading.