Fees on the firm's open-end and exchange-traded funds are a weakness, contributing negatively to the rating and creating a larger performance hurdle on funds. On average, LoCorr Funds charges fees on its funds that are in the second most-expensive quintile of similarly distributed funds. With the current market environment of fee compression, this is cause for concern, as investors may flock over time to alternate asset managers to get a better deal. The LoCorr Funds roster of open-end and exchange-traded funds has had below-average risk-adjusted performance, as shown by its average five-year Morningstar Rating of 2.3 stars. Despite other redeeming qualities as a firm, LoCorr Funds has seen some disruption among its portfolio management ranks in the past five years, denoted by elevated turnover compared to peer asset-management firms. Long-term stability tends to support positive results.
When Low Risk Means High Risk
Investment caution can be dangerous, too.