Many investors and advisors have been of the belief that commodities or natural resources funds help diversify a portfolio. While this is true to some extent, the relationships between commodities and stock indexes have become more correlated in recent years. The diversification effect, which investors had hoped would buoy their portfolios during the extreme market downturn of 2008, did not work as many asset classes became more highly correlated.
While Somers Brothers Diversified Futures Programs generally invest in commodities markets, it is important to make the distinction that they have the ability to trade in the direction of declining markets and thereby profit from falling prices.Somers Brothers Diversified Futures Programs also have the flexibility to enter into non-commodity based markets such as currencies and financial futures markets like interest rates and stock indices. As the chart above shows, the non-correlated returns exhibited by the Somers Brothers Diversified Futures Program #1 during the 2008 market downturn provided a solid alternative investment.
Past performance is not necessarily indicative of future results.
*The CRB Index is a widely recognized measure of the global commodities markets.
** The Barclay CTA index represents the performance of over 533 investment programs run
by Commodity Trading Advisors (the industry term for professional managed futures investors)
For a further definition of the above terms, please see glossary of terms page.