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H.S. junior Avg
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New words:
peak
Removed:
bullish, capacity, continuing, ebb, escalate, export, halted, pressure, production, productive, retaliation, shortage, stabilize, unwilling, volatile
Financial report summary
?Risks
- The NAV of a Trust Series shares relates directly to the value of its assets invested in accordance with the Applicable Index and other assets held by a Trust Series and fluctuations in the prices of these assets could materially adversely affect an investment in a Trust Series’ shares.
- Historical performance of a Trust Series and the Applicable Benchmark Component Futures Contracts is not indicative of future performance.
- The market price at which investors buy or sell shares may be significantly less or more than NAV.
- Daily percentage changes in the price of the Applicable Benchmark Component Futures Contract may not correlate with daily percentage changes in the spot price of the corresponding commodity.
- An investment in a Trust Series is not a proxy for investing in the commodities markets, and the daily percentage changes in the price of the Applicable Benchmark Component Futures Contracts, or the NAV of the Trust Series, may not correlate with daily percentage changes in the spot price of the physical commodities that underlie the Applicable Index.
- The price relationship between each Applicable Index at any point in time and the Futures Contracts that will become the Applicable Benchmark Component Futures Contracts on the next rebalancing date will vary and may impact both a Trust Series’ total return and the degree to which its total return tracks that of commodity price indices.
- Accountability levels, position limits, and daily price fluctuation limits set by the exchanges have the potential to cause tracking error, which could cause the price of shares to substantially vary from the price of the Applicable Index.
- An investor’s tax liability may exceed the amount of distributions, if any, on its shares.
- An investor’s allocable share of taxable income or loss may differ from its economic income or loss on the shares.
- Items of income, gain, deduction, loss and credit with respect to shares could be reallocated, for U.S. federal income tax purposes and the Trust Series could be liable for U.S. federal income tax, if the IRS does not accept the assumptions and conventions applied by the Trust Series in allocating those items, with potential adverse consequences for an investor.
- Each Trust Series could be treated as a corporation for U.S. federal income tax purposes, which may substantially reduce the value of the shares.
- The Trust is organized as a Delaware statutory trust in accordance with the provisions of the Trust Agreement and applicable state law, but each Trust Series is treated as a partnership for U.S. federal income tax purposes, and therefore, each Trust Series has a more complex tax treatment than traditional mutual funds.
- If the Trust Series are required to withhold tax with respect to any non-U.S. shareholders, the cost of such withholding may be borne by all shareholders.
- The impact of changes in U.S. federal income tax laws on each Trust Series is uncertain.
- Valuing OTC derivatives may be less certain than actively traded financial instruments.
- Neither Trust Series is leveraged, but a Trust Series could become leveraged if it had insufficient assets to completely meet its margin or collateral requirements relating to its investments.
- The Trust Series pay fees and expenses that are incurred regardless of whether they are profitable.
- You will have no rights to participate in the management of a Trust Series and will have to rely on the duties and judgment of USCF to manage the Trust Series.
- The Trust Series are not actively managed and their investment objectives are for the daily changes in percentage terms of their shares’ per share NAV for any period of 30 successive valuation days to be within plus/minus ten percent (10%) of the average daily percentage change in the price of the Applicable Benchmark Component Futures Contracts over the same period.
- A Trust Series may not meet the listing standards of NYSE Arca, which would adversely impact an investor’s ability to sell shares.
- The NYSE Arca may halt trading in a Trust Series’ shares, which would adversely impact an investor’s ability to sell shares.
- The liquidity of the shares may also be affected by the withdrawal from participation of Authorized Participants, which could adversely affect the market price of the shares.
- Shareholders that are not Authorized Participants may only purchase or sell their shares in secondary trading markets, and the conditions associated with trading in secondary markets may adversely affect investors’ investment in the shares.
- The lack of an active trading market for a Trust Series’ shares may result in losses on an investor’s investment in a Trust Series at the time the investor sells the shares.
- There is a risk that a Trust Series will not earn trading gains sufficient to compensate for the fees and expenses that it must pay and as such a Trust Series may not earn any profit.
- Each Trust Series is subject to extensive regulatory reporting and compliance.
- Regulatory changes or actions, including the implementation of new legislation is impossible to predict but may significantly and adversely affect a Trust Series.
- The Trust is not a registered investment company, so shareholders do not have the protections of the 1940 Act.
- Trading in international markets could expose a Trust Series to credit and regulatory risk.
- Each Trust Series and USCF may have conflicts of interest, which may permit them to favor their own interests to the detriment of shareholders.
- The Trust Series, USCF and SummerHaven may have conflicts of interest, which may cause them to favor their own interests to the detriment of shareholders.
- Shareholders have only very limited voting rights and have the power to replace USCF only under specific circumstances. Shareholders do not participate in the management of a Trust Series and do not control USCF, so they do not have any influence over basic matters that affect each Trust Series.
- A Trust Series could terminate at any time and cause the liquidation and potential loss of an investor’s investment and could upset the overall maturity and timing of an investor’s investment portfolio.
- The Trust Series do not expect to make cash distributions.
- An unanticipated number of Redemption Basket requests during a short period of time could have an adverse effect on a Trust Series’ NAV.
- In a rising rate environment, the Trust Series may not be able to fully invest at prevailing rates until any current investments in Treasury Bills mature in order to avoid selling those investments at a loss.
- The failure or bankruptcy of the Trust Series’ Custodian could result in a substantial loss of the Trust Series’ assets.
- The liability of SHIM and SummerHaven is limited, and the value of the shares may be adversely affected if USCF and any Trust Series are required to indemnify SHIM and/or SummerHaven.
- The liability of USCF and the Trustee are limited, and the value of the shares will be adversely affected if any Trust Series is required to indemnify the Trustee or USCF.
- Although the shares of each Trust Series are limited liability investments, certain circumstances such as bankruptcy or indemnification of a Trust Series by a shareholder will increase the shareholder’s liability.
- Investors cannot be assured of the continuation of the agreement between SummerHaven and USCF for use of an Applicable Index, and discontinuance of an Applicable Index may be detrimental to a Trust Series.
- Investors cannot be assured of SummerHaven’s continued services, and discontinuance may be detrimental to a Trust Series.
- USCF and the Trustee are not obligated to prosecute any action, suit or other proceeding in respect of any Trust Series property.
- Due to the increased use of technologies, intentional and unintentional cyber-attacks pose operational and information security risks.
- A Trust Series’ investment returns could be negatively affected by climate change and greenhouse gas restrictions.
Management Discussion
- On July 30, 2010, USCI received a notice of effectiveness from the SEC for its registration of 50,000,000 shares on Form S-1 with the SEC. On August 10, 2010, USCI listed its shares on the NYSE Arca under the ticker symbol “USCI.” USCI established its initial offering per share NAV by setting the price at $50 and issued 100,000 shares to the initial Authorized Participant, Merrill Lynch Professional Clearing Corp., in exchange for $5,000,000 in cash on August 10, 2010. USCI commenced investment operations on August 10, 2010 by purchasing Futures Contracts traded on the Futures Exchanges. In order to satisfy NYSE Arca listing standards that at least 100,000 shares be outstanding at the beginning of the trading day on the NYSE Arca, USCF purchased the initial Creation Basket from the initial Authorized Participant at the initial offering price. The $1,000 fee that would otherwise be charged to the Authorized Participant in connection with an order to create or redeem was waived in connection with the initial Creation Basket. USCF agreed not to resell the shares comprising such basket except that it may require the initial Authorized Participant to repurchase all of these shares at a per share price equal to USCI’s per share NAV within five days following written notice from USCF, subject to the conditions that: (i) on the date of repurchase, the initial Authorized Participant must immediately redeem these shares in accordance with the terms of the Authorized Participant Agreement and (ii) immediately following such redemption at least 100,000 shares of USCI remain outstanding. USCF held such initial Creation Basket until September 3, 2010, at which time the initial Authorized Participant repurchased the shares comprising such basket in accordance with the specified conditions noted above. On September 14, 2011, USCF redeemed the 20 Sponsor Shares of USCI, and on September 19, 2011, USCF purchased five shares of USCI in the open market.