ALPS Asset Allocation Growth & Income - Investor Class · NASDAQ:RLGAX
ALPS Asset Allocation Growth & Income - Investor Class — ALPS CoreCommodity Management CompleteCommodities Strategy Fund — Investor Presentation (June 2018)
28 slides from ALPS Asset Allocation Growth & Income - Investor Class's investor presentation, Jun 30, 2018
Slide 1: CompleteCommodities Fund
COMPLETECOMMODITIES® FUND Por2olio Solu6ons | Advisory Services Class Inv JCRAX | Class C JCRCX | Class I JCRIX
Slide 2: Partnership
PARTNERSHIP CoreCommodity Management, LLC ("CoreCommodity Management”) • CoreCommodity Management is an independent asset management firm whose singular focus is to provide commodity exposure to investors globally via commodity futures and natural resource equity strategies • Co-Founders of CoreCommo
Slide 3: CoreCommodity Management Executive Team
CORECOMMODITY MANAGEMENT EXECUTIVE TEAM Bradford L. Klein Bradford Klein is a Co-Founder of CoreCommodity Management LLC and Chair of the CompleteCommodiJes Fund’s Policy Commi\ee. In 2003, Mr. Klein co-founded the commodity asset management group at Jefferies, which became independent as CoreCommodi
Slide 4: Portfolio Management
PORTFOLIO MANAGEMENT Robert B. Hyman* Mr. Hyman is a Senior Vice President for CoreCommodity Management, LLC and PorNolio Manager to the CompleteCommodiJes Fund. Mr. Hyman re-joined CoreCommodity in June 2010. From January 2004 to April 2006, Mr. Hyman was a porNolio manager for the Jefferies Real As
Slide 5: CompleteCommodities
COMPLETECOMMODITIES™ The CompleteCommodiJes® Strategy seeks to provide diversified and unlevered global commodity exposure through acJvely managed long-only commodity investments Poten6al Benefits of Commodity Investments: Long-term Capital Infla%on Protec%on Apprecia%on Diversifica%on Collateral invest
Slide 6: Broad Commodity Exposure
BROAD COMMODITY EXPOSURE CompleteCommodi6es Exposure Can Include, but is not limited to: Energy Agriculture Industrial Metals Precious Metals Others WTI Crude Oil Corn Aluminum Gold Lumber Brent Crude Oil Wheat Copper Silver Rubber Unleaded Gasoline Soybeans, Oil, & Meal Nickel Diamonds HeaJng Oil L
Slide 7: A Complete Approach to Commodities
A COMPLETE APPROACH TO COMMODITIES Commodity Futures and Commodity EquiJes can be highly complementary in delivering investable exposure to commodiJes Commodity Futures Commodity EquiJes Approximately Two Dozen Universe Broader Commodity Exposure Liquid CommodiJes Tenor Shorter Term as Contracts Exp
Slide 8: Investment Process: Analysis
INVESTMENT PROCESS: ANALYSIS MULTI-FACTOR, BOTTOM UP APPROACH INCLUDING SUCH FACTORS AS: • Forward Term Structure • Supply & Demand Balances • Seasonality • Micro Economic Inputs • VolaJlity • DisJlling and Ranking • Historical Trends Fundamental Data Points • Technical Indicators Quantitative Funda
Slide 9: Investment Process: Active Management
INVESTMENT PROCESS: ACTIVE MANAGEMENT Security Selec%on Curve Management Asset Alloca%on Example: Example: Example: Overweight WTI crude Long Dec. wheat when Macro shiB between oil, underweight Brent benchmark holds Sep. commodity futures and crude wheat commodity equiFes Example: Example: Invest in
Slide 10: Unique Commodity Equity Investment Philosophy
UNIQUE COMMODITY EQUITY INVESTMENT PHILOSOPHY Proprietary construcJon seeks to capture commodity price exposure DIRECT EXPOSURE TO COMMODITY PRODUCTION • Focus on “pure play” upstream commodity producing companies possessing in-ground reserves • Increase inflaJon sensiJvity of porNolio • Seek to limi
Slide 11: Fund Commodity Equities Performance
FUND COMMODITY EQUITIES PERFORMANCE CompleteCommodi6es commodity equi6es por2olio has historically shown a stronger posi6ve rela6onship to commodity prices than to broad equi6es 280% 240% 200% 160% 120% 80% 40% 0% -40% -80% JCRIX EquiJes S&P 500 (TR) BCOM (TR) Commodity Prices (not investable) Date
Slide 12: Portfolio Composition – June 30, 2018
PORTFOLIO COMPOSITION – JUNE 30, 2018 Benchmark Sector and Cons6tuent Weigh6ngs: Fund Level BCOM (TR) Index Por2olio Composi6on Commodity Futures Investments: 72.4% Par%cipa%on as a Percentage of Fund Assets* Energy – 40.4% Energy – 34.0% Agriculture – 34.0% Agriculture – 34.8% Brent Crude Oil 9.6%
Slide 13: Fund Performance
FUND PERFORMANCE Performance as of June 30, 2018 Since QTR YTD 1 Year 5 Year Vola%lity Incep%on Class A (NAV) 3.10% 3.23% 17.25% -3.26% -0.76% 14.0 Class Investor (NAV) 3.10% 3.23% 17.25% -3.26% -0.76% 14.0 Class C (NAV) 2.95% 2.95% 16.38% -3.86% -1.36% 14.0 Class C (LOAD) 1.95% 1.95% 15.38% -3.86%
Slide 14: Fund Performance
FUND PERFORMANCE Historical Fund Performance versus Benchmark 160 Performance of JCRIX (rela%ve to the BCOM (TR) Index) Annualized Outperformance 3.67% 140 IncepJon To Date Outperformance 24.95% 120 Beta to Benchmark .99 100 CorrelaJon to benchmark 93.3% Tracking Error 5.39% 80 InformaJon RaJo 0.68x
Slide 15: Appendix
APPENDIX ANAGEMENT ALPS
Slide 16: Why Active Management – Understanding Roll Yield
WHY ACTIVE MANAGEMENT – UNDERSTANDING ROLL YIELD BACKWARDATION CONTANGO 25 40 38 23 36 21 34 19 32 Feb-00 Apr-00 Jun-00 Aug-00 Oct-00 Dec-00 Feb-01 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 $50 $70 $45 $60 $40 POSITIVE ROLL NEGATIVE YIELD ROLL YIELD $35 $50 $30 $40 $25 $20 $30 Crude Oil Price
Slide 17: Constructing Commodity Equity Investments
CONSTRUCTING COMMODITY EQUITY INVESTMENTS Universe of Global Equi%es Global Commodity Equi%es Commodity Rela%onships Corporate Fundamentals Market Dynamics Porcolio Drivers Proven & Probable Reserves Profitability PosiJoning Commodity ExtracJon Margins Earnings Quality Price Trends BackwardaJon & Con
Slide 18: Correlation to Inflation
CORRELATION TO INFLATION 0.80 CorrelaJon to InflaJon CorrelaJon to Unexpected InflaJon 0.70 0.60 0.50 Correla%on 0.40 0.30 0.20 0.10 0.00 CommodiJes Natural Resource Real Estate Treasury InflaJon- Emerging Markets Infrastructure Master Limited EquiJes Protected SecuriJes Partnerships Infla%on74% 60% 23%
Slide 19: Correlation and Beta to Inflation
CORRELATION AND BETA TO INFLATION 1 12.5 0.95 12 0.9 11.5 0.85 11 0.8 Correla%on 10.5 Beta 0.75 10 0.7 9.5 0.65 0.6 9 0.55 8.5 0.5 8 BCOM JCRIX BCOM JCRIX InflaJon Unexpected InflaJon InflaJon Unexpected InflaJon Source of Data: Bloomberg, CoreCommodity Management, Kenneth R. French. Date Range: 1976 th
Slide 20: Inflation Trends
INFLATION TRENDS Average Return Over the Risk Free Rate 20% 16% 14% 15% 12% 10% 10% 8% 6% 5% 4% 2% 0% 0% (2%) (5%) (4%) Investment Global EquiJes Natural Commodity Grade Bonds Resource Futures EquiJes InflaJon Falling InflaJon Rising Rising InflaJon Period YoY InflaJon 5Yr Avg InflaJon Source of Data: Bl
Slide 21: Interest Rate Trends
INTEREST RATE TRENDS Average Return Over the Risk Free Rate 10% 18% 16% 8% 14% 6% 12% 10% 4% 8% 2% 6% 4% 0% 2% (2%) 0% Investment Global EquiJes Natural Commodity Grade Bonds Resource Futures EquiJes US 10 Yr Yield Trends Lower US 10 Yr Yield Trends Higher Rising Interest Rates Period US 10Yr Yield
Slide 22: Current Prices Relative to Long-Term Range
CURRENT PRICES RELATIVE TO LONG-TERM RANGE 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% BCOM REITs Bonds Stocks Emerging Markets Data Range: June 30, 2008 through June 30, 2018 Data Source: Bloomberg L.P.; CoreCommodity Management LLC Peak Price is the highest closing price over the reported period.
Slide 23: Cost of Production
COST OF PRODUCTION 550 Bloomberg Commodity Spot Price 500 Cost of Production of Bloomberg Commodity Spot Basket 450 400 350 300 250 200 150 BCOM Spot Price CAGR: +7.3% 100 Cost of ProducJon CAGR: +6.5% 50 Dec-01 Dec-03 Dec-05 Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17 PAST PERFORMANCE IS NOT NECESSAR
Slide 24: Interest Rate and Inflation Data Definitions
INTEREST RATE AND INFLATION DATA DEFINITIONS ANALYSIS RANGE (1976 - 4Q 2017) UNLESS OTHERWISE NOTED -This is when the Bloomberg Barclays US Aggregate Bond Index Total Return data begins. “BROAD EQUITIES” AND “GLOBAL EQUITIES” ARE MSCI WORLD INDEX “BONDS” OR “INVESTMENT GRADE BONDS” ARE BLOOMBERG BAR
Slide 25: Disclaimers
DISCLAIMERS Investors should consider the following risk factors and special considera6ons associated with inves6ng in the ALPS CoreCommodity Management CompleteCommodi6es Strategy Fund (the “CompleteCommodi6es Fund”), which may cause you to lose money. The CompleteCommodi6es Fund is considered non-
Slide 26: Disclaimers and Disclosures
DISCLAIMERS AND DISCLOSURES Commodity Risk. The CompleteCommodiJes Fund’s investments in commodity and commodity equiJes may subject the CompleteCommodiJes Fund to significantly greater volaJlity than investments in tradiJonal securiJes and involve substanJal risks, including risk of a significant por
Slide 27: Definitions
DEFINITIONS • Forward Curve Analysis: The Forward Curve for a parJcular commodity shows the relaJon between the price and the Jme to maturity of a futures contract. Our Forward Curve Analysis seeks to idenJfy the futures contract offering the best relaJve value, based on proprietary models, for owner
Slide 28: Index Definitions
INDEX DEFINITIONS • The Bloomberg Commodity Index is a broadly diversified index that allows investors to track commodity futures through a single, simple measure. The BCOM is composed of futures contracts on physical commodiJes. • The Bloomberg Commodity Spot (BCOMSP) index measures the price moveme