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Investment Strategy

The fund seeks to provide investment results that match the performance of the Longview Extended Commodity Index (LEX).

 

Portfolio Manager


 Arrow Funds

 

Fund Highlights

  • Provides exposure to liquid global commodity markets
  • Diversified across 6 sectors and 16 components
  • Historically low correlation to traditional assets (i.e., stocks and bonds)
  • Index methodology based on longer-term holdings with lower turnover

 

Fund Overview

Arrow Commodity Strategy Fund is a mutual fund that seeks to provide exposure to the commodity markets by targeting the returns of the Longview Extended Commodity Index (LEX). With lower turnover than many other commodity indexes, the fund's benchmark is designed to better reflect the long-term performance of broad-based commodity markets.

The Case for Commodities has become increasingly well known. Often referred to as an alternative asset class, commodities are now becoming fairly mainstream. With the ability to access exposure to the asset class through mutual funds, commodities have grown in popularity with investors. Some of the key reasons investors are turning to commodities are:

      • Diversification from stocks and bonds
      • Historically low correlation with traditional assets
      • A long-term track record of strong performance
      • A potential hedge against the risk of inflation
      • Participation in global growth and emerging economies

Index-based commodity funds often share many similar traits, but not all commodity indexes are created the same. Differences in portfolio allocation weights and the investment process can play a major role in performance variation. Some indexes seem to rely heavily on concentrated allocations with short-term trading activity. But the Arrow Commodity Strategy Fund's benchmark, the Longview Extended Commodity Index, uses a diversified and long-term approach.


Benchmark Analysis

Index Exposure: The Longview Extended Commodity Index (LEX) provides broad-based commodity exposure across 6 major sectors, represented by 16 components. The components were chosen based on the fundamental characteristics of liquidity, economic relevance and long term viability. The weightings fluctuate based on the market price of the components, and therefore, reflect comparative changes across the commodity markets as a whole.