Disclosures

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USCI - United States Commodity Index Fund

An investment in the Shares issued by United States Commodity Index Fund® ("USCI") involves risks. Some of the risks you may face are summarized below. A more extensive discussion of the risks associated with investing directly or indirectly in USCI, appears in the Prospectus preceding or accompanying this Disclosure document.

Unlike mutual funds, commodity pools or other investment pools that generally distribute income and gains to their investors, USCI does not expect to distribute cash to shareholders. You should not invest in USCI if you will need cash distributions from USCI to pay taxes on your share of income and gains of USCI, if any, or for any other reason.

Changes in USCI's net asset value ("NAV") may not correlate with the changes in the value of its corresponding Commodity Index.

You may not be able to effectively use USCI as a way to hedge against commodity-related losses or as a way to indirectly invest in commodities if the following were to occur:

  • The Commodity Index is not designed to correlate exactly with the spot price of any commodity and this could cause the changes in the price of the Shares to substantially vary from the changes in the spot prices of commodities underlying the Benchmark Component Futures Contracts;
  • Changes in USCI's NAV do not correlate well with changes in the price of the Commodity Index;
  • Changes in the price of USCI's Shares on the NYSE Arca do not correlate perfectly with changes in the NAV of USCI's Shares;
  • Accountability levels, position limits, and daily price fluctuation limits set by the exchanges have the potential to cause a tracking error, which could cause the price of Shares to substantially vary from the price of the Commodity Index.

Investing in USCI for purposes of hedging may subject you to risks, including the possibility of losing the benefit of favorable market movements.

The price relationship between the Commodity Index at any point in time and the Futures Contracts that will become the Benchmark Component Futures Contracts on the next rebalancing date will vary and may impact both USCI's total return and the degree to which its total return tracks that of commodity price indices.

The design of the Commodity Index is such that every month it is made up of different Futures Contracts and USCI's investments must be rebalanced on an ongoing basis to reflect the changing composition of the Commodity Index. In the event of a commodity futures market where near month contracts to expire trade at a higher price than next month contracts to expire, a situation referred to as "backwardation," then absent the impact of the overall movement in commodity prices, the value of the Commodity Index would tend to rise as it approaches expiration. As a result USCI may benefit because it would be selling more expensive contracts and buying less expensive ones on an ongoing basis. Conversely, in the event of a commodity futures market where near month contracts trade at a lower price than next month contracts, a situation referred to as "contango," then absent the impact of the overall movement in commodity prices, the value of the Commodity Index would tend to decline as it approaches expiration. As a result USCI's total return may be lower than might otherwise be the case because it would be selling less expensive contracts and buying more expensive ones. The impact of backwardation and contango may cause the total return of USCI to vary significantly from the total return of other price references, such as the spot price of the commodities comprising the Commodity Index. In the event of a prolonged period of contango, and absent the impact of rising or falling commodity prices, this could have a significant negative impact on USCI's NAV and total return.

The structure and operation of USCI may involve conflicts of interest. The Sponsor has sole current authority to manage the investments and operations of USCI, which may create a conflict with the shareholders' best interests. The Sponsor may also have a conflict to the extent that its trading decisions may be influenced by the effect they would have on the United States Oil Fund, the United States 12 Month Oil Fund, the United States Short Oil Fund, the United States Brent Oil Fund, the United States Natural Gas Fund, the United States 12 Month Natural Gas Fund, the United States Gasoline Fund, and the United States Heating Oil Fund, the United States Copper Index Fund and the United States Agriculture Index Fund, the other commodity pools that it manages, or any other commodity pool the Sponsor may form and manage in the future.

  • You will have no rights to participate in the management of USCI and will have to rely on the duties and judgment of the Sponsor to manage USCI.
  • USCI pays fees and expenses that are incurred regardless of whether it is profitable.
  • If the Sponsor causes or permits USCI to become leveraged, you could lose all or substantially all of your investment if USCI's trading positions suddenly turn unprofitable.
  • USCI may invest in commodity-related investments. To the extent that these commodity-related investments are contracts individually negotiated between their parties, they may not be as liquid as Benchmark Component Futures Contracts and will expose USCI to credit risk that its counterparty may not be able to satisfy its obligations to USCI.

*Some risks listed above may be mitigated due to rules proposed by the CFTC and SEC as promulgated under the Dodd-Frank Act. For a discussion of these risks and others, please see the current Prospectus.

USAG - United States Agriculture Index Fund

An investment in the Shares issued by the United States Agriculture Index Fund® ("USAG") involves risks. Some of the risks you may face are summarized below. A more extensive discussion of the risks associated with investing directly or indirectly in USAG, appears in the Prospectus preceding or accompanying this Disclosure document.

Unlike mutual funds, commodity pools or other investment pools that generally distribute income and gains to their investors, USAG does not expect to distribute cash to shareholders. You should not invest in USAG if you will need cash distributions from USAG to pay taxes on your share of income and gains of USAG, if any, or for any other reason.

You may not be able to effectively use USAG as a way to hedge against agricultural commodity-related losses or as a way to indirectly invest in agricultural commodities if the following were to occur:

The Agriculture Index does not correlate exactly with the spot price of agricultural commodities and this could cause the changes in the price of the shares to substantially vary from the changes in the spot price of agricultural commodities underlying the Benchmark Component Agriculture Futures Contracts; Changes in USAG's net asset value ("NAV") may not correlate with the changes in the value of the Agriculture Index; Changes in the price of USAG's shares on the NYSE Arca do not correlate perfectly with changes in the NAV of USAG's shares; Accountability levels, position limits, and daily price fluctuation limits set by the Futures Exchanges have the potential to cause a tracking error, which could cause the price of shares to substantially vary from the price of the Agriculture Index. Investing in USAG for purposes of hedging may subject you to risks, including the possibility of losing the benefit of favorable market movements.

The price relationship between the Agriculture Index at any point in time and the Benchmark Component Agriculture Futures Contracts will vary and may impact both USAG's total return and the degree to which its total return tracks that of commodity price indices.

The design of the Agriculture Index is such that every month it is made up of different Benchmark Component Agriculture Futures Contracts, and USAG's investments must be rebalanced on an ongoing basis to reflect the changing composition of the Agriculture Index. In the event of a commodity futures market where near month contracts to expire trade at a higher price than next month contracts to expire, a situation referred to as "backwardation," then absent the impact of the overall movement in commodity prices, the value of the Agriculture Index would tend to rise as it approaches expiration. As a result USAG may benefit because it would be selling more expensive futures contracts and buying less expensive ones on an ongoing basis. Conversely, in the event of a commodity futures market where near month contracts trade at a lower price than next month contracts, a situation referred to as "contango," then absent the impact of the overall movement in commodity prices, the value of the Agriculture Index would tend to decline as it approaches expiration. As a result USAG's total return may be lower than might otherwise be the case because it would be selling less expensive futures contracts and buying more expensive ones. The impact of backwardation and contango may cause the total return of USAG to vary significantly from the total return of other price references, such as the spot price of the commodities comprising the Agriculture Index. In the event of a prolonged period of contango, and absent the impact of rising or falling commodity prices, this could have a significant negative impact on USAG's NAV and total return.

The breakeven point per share of $0.38 indicates the approximate dollar returns and 1.52%[1]is the percentage required for the redemption value of a hypothetical initial investment in a single share to equal the amount invested twelve months after the investment was made. For purposes of this breakeven amount, we have assumed an initial selling price of $25.00 which equals the NAV per share. This breakeven amount refers to the redemption of baskets by Authorized Purchasers and is not related to any gains an individual investor would have to achieve in order to break even. The breakeven amount is an approximation only.

USAG has no operating history, so there is no performance history to serve as a basis for you to evaluate an investment in USAG.

The structure and operation of USAG may involve conflicts of interest. The Sponsor has sole current authority to manage the investments and operations of USAG, which may create a conflict with the shareholders' best interests. The Sponsor may also have a conflict to the extent that its trading decisions may be influenced by the effect they would have on the United States Oil Fund, The United States Natural Gas Fund, the United States 12 Month Oil Fund, the United States Gasoline Fund, the United States Heating Oil Fund, the United States Short Oil Fund, the United States 12 Month Natural Gas Fund, the United States Brent Oil Fund, and the United States Commodity Index Fund, the United States Copper Index Fund, and the other commodity pools it manages, or any other commodity pool the Sponsor may form and manage in the future.

You will have no rights to participate in the management of USAG and will have to rely on the duties and judgment of the Sponsor to manage USAG. USAG pays fees and expenses that are incurred regardless of whether it is profitable. If the Sponsor causes or permits USAG to become leveraged, you could lose all or substantially all of your investment if USAG's trading positions suddenly turn unprofitable. USAG may invest in Other Agriculture-Related Investments. To the extent that these Other Agricultural Commodity-Related Investments are contracts individually negotiated between their parties, they may not be as liquid as Benchmark Component Agriculture Futures Contracts and will expose USAG to credit risk that its counterparty may not be able to satisfy its obligations to USAG. [1]For purposes of this breakeven analysis, we have assumed that USAG has $30 million in assets. If, however, only the initial Creation Basket of USAG is sold for proceeds of $2.5 million, the amount of trading income required for the redemption value at the end of the year to equal the initial selling price of one share for USAG would be $1.75 or 7.00% of the initial selling price per share.

USO - United States Oil Fund

Description of United States Oil Fund, and the General Risks of the Offering

An investment in the Shares issued by the United States Oil Fund® (USO) involves risks. Some of the risks you may face are summarized below. A more extensive discussion of the risks associated with investing directly or indirectly in USO, appears in the Prospectus preceding or accompanying this Disclosure document.

Unlike mutual funds, commodity pools or other investment pools that manage their investments in an attempt to realize income and gains and distribute such income and gains to their investors, USO generally does not distribute cash to limited partners or other shareholders. You should not invest in USO if you will need cash distributions from USO to pay taxes on your share of income and gains of USO, if any, or for any other reason.

You may not be able to effectively use USO as a way to hedge against crude oil-related losses or as a way to indirectly invest in crude oil if the following were to occur:

  • Changes in USO's NAV may not correlate with changes in the price of the Benchmark Oil Futures Contracts;
  • The Benchmark Oil Futures Contract may not correlate with the spot price of light, sweet crude oil and this could cause changes in the price of the shares to substantially vary from the changes in the spot price of light, sweet crude oil;
  • Accountability levels, position limits, and daily price fluctuation limits set by the exchanges have the potential to cause a tracking error, which could cause the price of shares to substantially vary from the price of the Benchmark Oil Futures Contracts.

The price relationship between the near month contract to expire and the next month contract to expire that compose the Benchmark Oil Futures Contract will vary and may impact both the total return over time of USO's NAV, as well as the degree to which its total return tracks other crude oil price indices' total returns. In cases in which the near month contract's price is lower than the next month contract's price (a situation known as "contango" in the futures markets), then absent the impact of the overall movement in crude oil prices the value of the benchmark contract would tend to decline as it approaches expiration. In cases in which the near month contract's price is higher than the next month contract's price (a situation known as "backwardation" in the futures markets), then absent the impact of the overall movement in crude oil prices the value of the benchmark contract would tend to rise as it approaches expiration.

Investing in USO for purposes of hedging may subject you to risks, including the possibility of losing the benefit of favorable market movements.

The design of USO's Benchmark Oil Futures Contract is such that every month it begins by using the near month contract to expire until the near month contract is within two weeks of expiration, when, over a four day period, it transitions to the next month contract to expire as its benchmark contract and keeps that contract as its benchmark until it becomes the near month contract and close to expiration. In the event of a crude oil futures market where near month contracts trade at a higher price than next month to expire contracts, a situation described as "backwardation" in the futures market, then absent the impact of the overall movement in crude oil prices the value of the benchmark contract would tend to rise as it approaches expiration. As a result, the total return of the Benchmark Oil Futures Contract would tend to track higher. Conversely, in the event of a crude oil futures market where near month contracts trade at a lower price than next month contracts, a situation described as "contango" in the futures market, then absent the impact of the overall movement in crude oil prices the value of the benchmark contract would tend to decline as it approaches expiration. As a result, the total return of the Benchmark Oil Futures Contract would tend to track lower. When compared to total return of other price indices, such as the spot price of crude oil, the impact of backwardation and contango may lead the total return of USO's NAV to vary significantly. In the event of a prolonged period of contango, and absent the impact of rising or falling oil prices, this could have a significant negative impact on USO's NAV and total return.

The structure and operation of USO may involve conflicts of interest. For example, a conflict may arise because the General Partner and its principals and affiliates may trade for themselves. In addition, the General Partner has sole current authority to manage the investments and operations, which may create a conflict with the shareholders' best interests. The General Partner may also have a conflict to the extent that its trading decisions may be influenced by the effect they would have on the United States 12 Month Oil Fund, the United States Short Oil Fund, the United States Brent Oil Fund, the United States Natural Gas Fund, the United States 12 Month Natural Gas Fund, the United States Gasoline Fund, the United States Heating Oil Fund, the United States Commodity Index Fund, the United States Copper Index Fund and the United States Agriculture Index Fund, the other commodity pools that it manages, or any other commodity pool the General Partner may form and manage in the future.

You will have no rights to participate in the management of USO and will have to rely on the duties and judgment of the General Partner to manage USO.

USO pays fees and expenses that are incurred regardless of whether it is profitable.

If the General Partner causes or permits USO to become leveraged, you could lose all or substantially all of your investment if USO's trading positions suddenly turn unprofitable.

USO may also invest in Other Crude Oil-Related Investments, many of which are negotiated contracts that are not as liquid as Oil Futures Contracts and expose USO to credit risk that its counterparty may not be able to satisfy its obligations to USO.

USOU - United States 3x Oil Fund

Description of United States 3x Oil Fund and the General Risks of the Offering

An investment in the United States 3x Oil Fund (USOU or the Fund) involves risks. Some of the risks you may face are summarized below. A more extensive discussion of the risks associated with investing directly or indirectly in USOU appears in the Prospectus.

The Fund is not appropriate for all investors and present different risks than other types of funds, including risks associated with the effects of leveraged investing.

An investor should only consider an investment in the Fund if he or she understands the consequences of seeking daily leveraged investment results. The Fund seeks to return (before fees and expenses) a multiple (3x) of the performance of a specified short-term futures contract on light, sweet crude oil (the “Benchmark Oil Futures Contract”) for a single day, not for any other period. The return of the Fund for a period longer than a single day is the result of its return for each day compounded over the period and usually will differ from the Fund’s multiple times the return of the Benchmark Oil Futures Contract for the same period.

The pursuit of daily leveraged investment goals means that the return of the Fund for a period longer than a full trading day may have no resemblance to 300% of the return of the Benchmark Oil Futures Contract for a period of longer than a full trading day because the aggregate return of the Fund is the product of the series of each trading day’s daily returns.

Daily compounding of the Fund’s investment returns can dramatically and adversely affect its longer-term performance during periods of high volatility. Volatility may be at least as important to the Fund’s return for a period as the return of the Benchmark Oil Futures Contract. The Fund uses leverage and should produce returns for a single day that are more volatile than that of the Benchmark Oil Futures Contract. For example, the return of the Fund for a single day should be approximately three times as volatile as the return of a fund for a single day with an objective of matching the same Benchmark Oil Futures Contract.

Shareholders who invest in the Funds should actively manage and monitor their investments, as frequently as daily.

Unlike mutual funds, commodity pools or other investment pools that manage their investments in an attempt to realize income and gains and distribute such income and gains to their investors, the Fund generally does not distribute cash to limited partners or other shareholders. You should not invest in the Fund if you will need cash distributions from the Fund to pay taxes on your share of income and gains of the Fund, if any, or for any other reason.

The Fund has no operating history, so there is no performance history to serve as a basis for you to evaluate an investment in the Fund.

Investors may choose to use the Fund as a means of investing indirectly in crude oil. There are significant risks and hazards inherent in the crude oil industry that may cause the price of crude oil to widely fluctuate.

To the extent that you use the Fund as a means of indirectly investing in crude oil, there is the risk that the daily changes in the price of the Fund’s shares on the NYSE Arca on a percentage basis, will not closely track the daily changes in the spot price of light, sweet crude oil on a percentage basis.

You may not be able to effectively use the Fund as a way to indirectly invest in crude oil or as a hedge against the risk of loss in crude oil-related transactions if the following correlations do not exist:

  • The price of Fund shares traded on the NYSE Arca does not correlate closely with the value of the Fund’s NAV;
  • The changes in the Fund’s NAV do not correlate closely with the changes in the price of the Benchmark Oil Futures Contract; or
  • The changes in the price of the Benchmark Oil Futures Contract do not closely correlate with the changes in the cash or spot price of crude oil.

The price relationship between the near month contract to expire and the next month contract to expire that compose the Benchmark Oil Futures Contract will vary and may impact both the total return over time of the Fund’s NAV, as well as the degree to which its total return tracks other crude oil price indices’ total returns. In cases in which the near month contract’s price is lower than the next month contract’s price (a situation known as “contango” in the futures markets), then absent the impact of the overall movement in crude oil prices the value of the benchmark contract would tend to decline as it approaches expiration. In cases in which the near month contract’s price is higher than the next month contract’s price (a situation known as “backwardation” in the futures markets), then absent the impact of the overall movement in crude oil prices the value of the benchmark contract would tend to rise as it approaches expiration.

The Fund has a single-day investment objective. Because of daily rebalancing and the compounding of each day’s return over time, the return of the Fund for periods longer than a single day will be the result of each day’s returns compounded over the period, which will very likely differ from 300% of the return of the Benchmark Oil Futures Contract over the same period. The Fund may lose money if the Benchmark Oil Futures Contract performance is flat over time, and as a result of daily rebalancing, the volatility of the Benchmark Oil Futures Contract and the effects of compounding, it is even possible that the Fund will lose money over time while the level of the Benchmark Oil Futures Contract increases.

The Fund is designed to be utilized only by knowledgeable investors who understand the potential consequences of seeking daily leveraged investment results and are willing to monitor their portfolios frequently. The Fund is not intended to be used by, and is not appropriate for, investors who do not intend to actively monitor and manage their portfolios.

The Fund is organized and operated as a Delaware statutory trust, in accordance with the provisions of its Trust Agreement and applicable state law, but is taxed in a manner similar to a limited partnership and therefore, has a more complex tax treatment than conventional mutual funds.

The Fund may also invest in negotiated “OTC” contracts, which are not as liquid as exchange-traded futures contracts. OTC contracts expose the Fund to the risk that the Fund’s counterparty may not be able to satisfy its obligations to the Fund.

The Fund pays fees and expenses that are incurred regardless of whether it is profitable.

You will have no rights to participate in the management of the Fund and will have to rely on the duties and judgment of USCF to manage the Fund.

USCF has sole current authority to manage the investments and operations of the Fund, and this may allow it to act in a way that furthers its own interests which may create a conflict with your best interests. Shareholders have very limited voting rights, which will limit their ability to influence matters such as amendment of the Trust Agreement, change in the Fund’s basic investment policy, dissolution of the Trust, or the sale or distribution of the Fund’s assets.

There are present and potential future conflicts of interest in the Fund’s structure and operation you should consider before you purchase shares. USCF will use this notice of conflicts as a defense against any claim or other proceeding made. If USCF is not able to resolve these conflicts of interest adequately, it may impact the ability of the Fund and the other funds that USCF manages to achieve their investment objectives.

The officers, directors and employees of USCF do not devote their time exclusively to the Fund. These persons are directors, officers or employees of other entities which may compete with the Fund for their services. They could have a conflict between their responsibilities to the Fund and to those other entities.

The Fund will, to a lesser extent and in view of regulatory requirements and/or market conditions, invest in the following which are referred to as “Other Oil-Related Investments”:

  1. next invest in (a) cleared swap transactions based on the Benchmark Oil Futures Contract, (b) non-exchange traded (“over-the-counter” or “OTC”), negotiated swap contracts that are based on the Benchmark Oil Futures Contract, and (c) forward contracts for oil;
  2. followed by investments in futures contracts for other types of crude oil, diesel-heating oil, gasoline, natural gas, and other petroleum-based fuels, each of which are traded on the NYMEX, ICE Futures Europe or other U.S. and foreign exchanges as well as cleared swap transactions and OTC swap contracts valued based on the foregoing; and
  3. finally, invest in exchange-traded cash settled options on Oil Futures Contracts.

USCF currently anticipates that regulatory requirements such as accountability levels set by exchanges or position limits set by exchanges or by other regulators, such as the CFTC, and market conditions including those allowing the Fund to obtain greater liquidity or to execute transactions with more favorable pricing, could cause the Fund to invest in Other Oil-Related Investments.

For the Fund to maintain a consistent 300% return versus the Benchmark Oil Futures Contract, the Fund’s holdings must be rebalanced on a daily basis by buying additional Oil Interests or selling Oil Interests that it holds. Such rebalancing will occur generally before or at the close of trading of the Shares on the Exchange, at or as near as possible to that day’s settlement price, and will be disclosed on the Fund’s website as pending trades before the opening of trading on the Exchange the next business day and will be taken into account in the Fund’s intra-day Indicative Fund Value and reflected in the Fund’s end of day NAV on that business day.

USOD - United States 3x Short Oil Fund

Description of United States 3x Short Oil Fund and the General Risks of the Offering

An investment in the United States 3x Short Oil Fund (USOD or the Fund) involves risks. Some of the risks you may face are summarized below. A more extensive discussion of the risks associated with investing directly or indirectly in USOU appears in the Prospectus.

The Fund is not appropriate for all investors and present different risks than other types of funds, including risks associated with the effects of leveraged investing.

An investor should only consider an investment in the Fund if he or she understands the consequences of seeking daily inverse leveraged investment results.

The Fund seeks to return (before fees and expenses) an inverse multiple (-3x) of the performance of a specified short-term futures contract on light, sweet crude oil (the “Benchmark Oil Futures Contract”) for a single day, not for any other period. The return of the Fund for a period longer than a single day is the result of its return for each day compounded over the period and usually will differ from the Fund’s inverse multiple times the return of the Benchmark Oil Futures Contract for the same period.

Daily compounding of the Fund’s investment returns can dramatically and adversely affect its longer-term performance during periods of high volatility. Volatility may be at least as important to the Fund’s return for a period as the return of the Benchmark Oil Futures Contract. The Fund uses leverage and should produce returns for a single day that are more volatile than that of the Benchmark Oil Futures Contract. For example, the return of the Fund for a single day should be approximately three times as volatile as the return of a fund for a single day with an objective of inversely tracking the same Benchmark Oil Futures Contract.

Shareholders who invest in the Funds should actively manage and monitor their investments, as frequently as daily.

Unlike mutual funds, commodity pools or other investment pools that manage their investments in an attempt to realize income and gains and distribute such income and gains to their investors, the Fund generally does not distribute cash to limited partners or other shareholders. You should not invest in the Fund if you will need cash distributions from the Fund to pay taxes on your share of income and gains of the Fund, if any, or for any other reason.

The Fund has no operating history, so there is no performance history to serve as a basis for you to evaluate an investment in the Fund.

Investors may choose to use the Fund as a means of indirectly taking a short position in crude oil. There are significant risks and hazards inherent in the crude oil industry that may cause the price of crude oil to widely fluctuate.

To the extent that you use the Fund as a means of indirectly taking a short position in crude oil, there is the risk that the daily changes in the price of the Fund’s shares on the NYSE Arca on a percentage basis, will not closely track the inverse of the daily changes in the spot price of light, sweet crude oil on a percentage basis.

You may not be able to effectively use the Fund as a way to indirectly take a short interest in crude oil or as a hedge against the risk of loss in crude oil-related transactions if the following correlations do not exist:

  • The price of Fund shares traded on the NYSE Arca does not correlate closely with the value of the Fund’s NAV;
  • The changes in the Fund’s NAV do not inversely correlate closely with the changes in the price of the Benchmark Oil Futures Contract; or
  • The changes in the price of the Benchmark Oil Futures Contract do not closely correlate with the changes in the cash or spot price of crude oil.

The price relationship between the near month contract to expire and the next month contract to expire that compose the Benchmark Oil Futures Contract will vary and may impact both the total return over time of the Fund’s NAV, as well as the degree to which its total return tracks other crude oil price indices’ total returns. In cases in which the near month contract’s price is lower than the next month contract’s price (a situation known as “contango” in the futures markets), then absent the impact of the overall movement in crude oil prices the value of the benchmark contract would tend to decline as it approaches expiration. In cases in which the near month contract’s price is higher than the next month contract’s price (a situation known as “backwardation” in the futures markets), then absent the impact of the overall movement in crude oil prices the value of the benchmark contract would tend to rise as it approaches expiration.

The Fund has a single-day investment objective. Because of daily rebalancing and the compounding of each day’s return over time, the return of the Fund for periods longer than a single day will be the result of each day’s returns compounded over the period, which will very likely differ from -300% of the return of the Benchmark Oil Futures Contract over the same period. The Fund may lose money if the Benchmark Oil Futures Contract performance is flat over time, and as a result of daily rebalancing, the volatility of the Benchmark Oil Futures Contract and the effects of compounding, it is even possible that the Fund will lose money over time while the level of the Benchmark Oil Futures Contract decreases.

The Fund is designed to be utilized only by knowledgeable investors who understand the potential consequences of seeking daily inverse leveraged investment results and are willing to monitor their portfolios frequently. The Fund is not intended to be used by, and is not appropriate for, investors who do not intend to actively monitor and manage their portfolios.

The Fund is organized and operated as a Delaware statutory trust, in accordance with the provisions of its Trust Agreement and applicable state law, but is taxed in a manner similar to a limited partnership and therefore, has a more complex tax treatment than conventional mutual funds.

The Fund may also invest in negotiated “OTC” contracts, which are not as liquid as exchange-traded futures contracts. OTC contracts expose the Fund to the risk that the Fund’s counterparty may not be able to satisfy its obligations to the Fund.

The Fund pays fees and expenses that are incurred regardless of whether it is profitable.

You will have no rights to participate in the management of the Fund and will have to rely on the duties and judgment of USCF to manage the Fund.

USCF has sole current authority to manage the investments and operations of the Fund, and this may allow it to act in a way that furthers its own interests which may create a conflict with your best interests. Shareholders have very limited voting rights, which will limit their ability to influence matters such as amendment of the Trust Agreement, change in the Fund’s basic investment policy, dissolution of the Trust, or the sale or distribution of the Fund’s assets.

There are present and potential future conflicts of interest in the Fund’s structure and operation you should consider before you purchase shares. USCF will use this notice of conflicts as a defense against any claim or other proceeding made. If USCF is not able to resolve these conflicts of interest adequately, it may impact the ability of the Fund and the other funds that USCF manages to achieve their investment objectives.

The officers, directors and employees of USCF do not devote their time exclusively to the Fund. These persons are directors, officers or employees of other entities which may compete with the Fund for their services. They could have a conflict between their responsibilities to the Fund and to those other entities.

The Fund will, to a lesser extent and in view of regulatory requirements and/or market conditions invest in the following, which are referred to as “Other Oil-Related Investments”:

  1. next invest in (a) cleared swap transactions based on short positions in the Benchmark Oil Futures Contract, (b) non-exchange traded (“over-the-counter” or “OTC”), negotiated swap contracts that are based on short positions in the Benchmark Oil Futures Contract, and (c) forward contracts for oil;
  2. followed by investments in short positions in futures contracts for other types of crude oil, diesel-heating oil, gasoline, natural gas, and other petroleum-based fuels, each of which are traded on the NYMEX, ICE Futures Europe or other U.S. and foreign exchanges as well as cleared swap transactions and OTC swap contracts valued based on the foregoing; and
  3. finally, invest in exchange-traded cash settled options on Oil Futures Contracts.

USCF currently anticipates that regulatory requirements such as accountability levels set by exchanges or position limits set by exchanges or by other regulators, such as the CFTC, and market conditions including those allowing the Fund to obtain greater liquidity or to execute transactions with more favorable pricing, could cause the Fund to invest in Other Oil-Related Investments.

For the Fund to maintain a consistent 300% return versus short positions in the Benchmark Oil Futures Contract, the Fund’s holdings must be rebalanced on a daily basis by selling additional Oil Interests or buying Oil Interests for which it holds short positions. Such rebalancing will occur generally before or at the close of trading of the Shares on the Exchange, at or as near as possible to that day’s settlement price, and will be disclosed on the Fund’s website as pending trades before the opening of trading on the Exchange the next business day and will be taken into account in the Fund’s intra-day Indicative Fund Value and reflected in the Fund’s end of day NAV on that business day.

USL - United States 12 Month Oil Fund

Description of United States 12 Month Oil Fund, and the General Risks of the Offering

An investment in the Shares issued by the United States 12 Month Oil Fund® (USL), involves risks. Some of the risks you may face are summarized below. A more extensive discussion of the risks associated with investing directly or indirectly in USL, appears in the Prospectus preceding or accompanying this Disclosure document.

Unlike mutual funds, commodity pools or other investment pools that manage their investments in an attempt to realize income and gains and distribute such income and gains to their investors, USL generally does not distribute cash to limited partners or other shareholders. You should not invest in USL if you will need cash distributions from USL to pay taxes on your share of income and gains of USL, if any, or for any other reason.

You may not be able to effectively use USL as a way to hedge against crude oil-related losses or as a way to indirectly invest in crude oil if the following were to occur:

  • Changes in USL's NAV do not correlate with changes in the average of the prices of the Benchmark Oil Futures Contracts;
  • Changes in the price of shares may cause the shares to trade at a price that is above or below USL's NAV per share. Accordingly, changes in the price of shares may substantially vary from the changes in the spot price of light, sweet crude oil.
  • The Benchmark Oil Futures Contracts may not correlate with the spot price of light, sweet crude oil and this could cause changes in the price of the shares to substantially vary from the changes in the spot price of light, sweet crude oil.
  • Accountability levels, position limits, and daily price fluctuation limits set by the exchanges have the potential to cause a tracking error, which could cause the price of shares to substantially vary from the average of the prices of the Benchmark Oil Futures Contracts.

The price relationship between the near month contract to expire and the other monthly contracts that compose the Benchmark Oil Futures Contracts will vary and may impact both the total return over time of USL's NAV, as well as the degree to which its total return tracks other crude oil price indices' total returns.

Investing in USL for purposes of hedging may subject you to risks, including the possibility of losing the benefit of favorable market movements.

The design of USL's Benchmark Oil Futures Contracts consist of the near month contract to expire and the contracts for the following 11 months, except during the last two weeks of the current month when the near month contract is sold and replaced by the futures contract for the thirteenth month following the current month. In the event of a crude oil futures market where near month contracts trade at a higher price than the price of contracts that expire later in time, a situation described as "backwardation" in the futures market, then absent the impact of the overall movement in crude oil prices the value of the benchmark contract would tend to rise as it approaches expiration. As a result, the total return of the Benchmark Oil Futures Contracts would tend to track higher. Conversely, in the event of a crude oil futures market where near month contracts trade at a lower price than the price of contracts that expire later in time, a situation described as "contango" in the futures market, then absent the impact of the overall movement in crude oil prices the value of the benchmark contract would tend to decline as it approaches expiration. As a result the total return of the Benchmark Oil Futures Contracts would tend to track lower. When compared to total return of other price indices, such as the spot price of crude oil, the impact of backwardation and contango may lead the total return of USL's NAV to vary significantly. In the event of a prolonged period of contango, and absent the impact of rising or falling oil prices, this could have a significant negative impact on USL's NAV and total return. Furthermore, a portfolio that consists of twelve different monthly contracts, ranging in a "strip" from the first month to the twelfth month, will be impacted differently by contango and backwardation than a portfolio that consists of just the first month contract.

The structure and operation of USL may involve conflicts of interest. For example, a conflict may arise because the General Partner and its principals and affiliates may trade for themselves. In addition, the General Partner has sole current authority to manage the investments and operations, which may create a conflict with the shareholders' best interests. The General Partner/Sponsor may also have a conflict to the extent that its trading decisions may be influenced by the effect they would have on The General Partner may also have a conflict to the extent that its trading decisions may be influenced by the effect they would have on the United States Oil Fund, the United States Short Oil Fund, the United States Brent Oil Fund, the United States Natural Gas Fund, the United States 12 Month Natural Gas Fund, the United States Gasoline Fund, the United States Heating Oil Fund, the United States Commodity Index Fund, the United States Copper Index Fund and the United States Agriculture Index Fund, the other commodity pools that it manages, or any other commodity pool the General Partner may form and manage in the future.

  • You will have no rights to participate in the management of USL and will have to rely on the duties and judgment of the General Partner to manage USL.
  • USL pays fees and expenses that are incurred regardless of whether it is profitable.
  • If the General Partner causes or permits USL to become leveraged, you could lose all or substantially all of your investment if USL's trading positions suddenly turn unprofitable.
  • USL may also invest in Other Crude Oil-Related Investments, many of which are negotiated contracts that are not as liquid as Oil Futures Contracts and expose USL to credit risk that its counterparty may not be able to satisfy its obligations to USL.
*Some risks listed above may be mitigated due to rules proposed by the CFTC and SEC as promulgated under the Dodd-Frank Act. For a discussion of these risks and others, please see the current Prospectus.

BNO - United States Brent Oil Fund

BNO's Investments in Crude Oil Interests

An investment in the Shares issued by the United States Brent Oil Fund® (BNO), involves risks. Some of the risks you may face are summarized below. A more extensive discussion of the risks associated with investing directly or indirectly in BNO, appears in the Prospectus preceding or accompanying this Disclosure document.

Unlike mutual funds, commodity pools or other investment pools that manage their investments in an attempt to realize income and gains and distribute such income and gains to their investors, BNO generally does not distribute cash to limited partners or other shareholders. You should not invest in BNO if you will need cash distributions from BNO to pay taxes on your share of income and gains of BNO, if any, or for any other reason.

You may not be able to effectively use BNO as a way to hedge against crude oil-related losses or as a way to indirectly invest in crude oil if the following were to occur:

  • Changes in BNO's NAV may not correlate with changes in the price of the Benchmark Future Contracts;
  • The Benchmark Futures Contracts may not correlate with the spot price of Brent crude oil and this could cause changes in the price of the shares to substantially vary from the changes in the spot price of crude oil;
  • Changes in the price of shares may cause the shares to trade at a price that is above or below BNO's NAV per share. Accordingly, changes in the price of shares may substantially vary from the changes in the spot price of crude oil.
  • Accountability levels, position limits, and daily price fluctuation limits set by the exchanges have the potential to cause a tracking error, which could cause the price of shares to substantially vary from the price of the Benchmark Futures Contract.

The price relationship between the near month contract to expire and the next month contract to expire that compose the Benchmark Futures Contract will vary and may impact both the total return over time of BNO's NAV, as well as the degree to which its total return tracks other crude oil price indices' total returns. In cases in which the near month contract's price is lower than the next month contract's price (a situation known as "contango" in the futures market), then absent the impact of the overall movement in crude oil prices the value of the Benchmark Futures Contract would tend to decline as it approaches expiration. In cases in which the near month contract's price is higher than the next month contract's price (a situation known as "backwardation" in the futures market), then absent the impact of the overall movement in crude oil prices the value of the Benchmark Futures Contract would tend to rise as it approaches expiration.

Investing in BNO for purposes of hedging may subject you to risks, including the possibility of losing the benefit of favorable market movements.

The design of BNO's Benchmark Futures Contract is such that every month it begins by using the near month contract to expire until the near month contract is within two weeks of expiration, when it will use the next month contract to expire as its benchmark contract and keeps that contract as its benchmark until it becomes the near month contract and close to expiration. In the event of a crude oil futures market where near month contracts trade at a higher price than next to near month to expire contracts, a situation described as "backwardation" in the futures market, then absent the impact of the overall movement in crude oil prices the value of the Benchmark Futures Contract would tend to rise as it approaches expiration. As a result, positions in the Benchmark Futures Contract would tend to track higher. Conversely, in the event of a crude oil futures market where near month contracts trade at a lower price than next to near month contracts, a situation described as "contango" in the futures market, then absent the impact of the overall movement in crude oil prices the value of the Benchmark Futures Contract would tend to decline as it approaches expiration. As a result the total return of the Benchmark Futures Contract would tend to track lower. When compared to total return of other price indices, such as the spot price of crude oil, the impact of backwardation and contango may lead the total return of BNO's NAV to vary significantly. In the event of a prolonged period of contango, and absent the impact of rising or falling crude oil prices, this could have a significant negative impact on BNO's NAV and total return.

The structure and operation of BNO may involve conflicts of interest. For example, a conflict may arise because the General Partner and its principals and affiliates may trade for themselves. In addition, the General Partner has sole current authority to manage the investments and operations, which may create a conflict with the shareholders' best interests. The General Partner may also have a conflict to the extent that its trading decisions may be influenced by the effect they would have on the United States Oil Fund, the United States 12 Month Oil Fund, the United States Short Oil Fund, the United States Natural Gas Fund, the United States 12 Month Natural Gas Fund, the United States Gasoline Fund, the United States Heating Oil Fund, the United States Commodity Index Fund, the United States Copper Index Fund and the United States Agriculture Index Fund, the other commodity pools that it manages, or any other commodity pool the General Partner may form and manage in the future.

  • You will have no rights to participate in the management of BNO and will have to rely on the duties and judgment of the General Partner to manage BNO.
  • BNO pays fees and expenses that are incurred regardless of whether it is profitable.
  • If the General Partner causes or permits BNO to become leveraged, you could lose all or substantially all of your investment if BNO's trading positions suddenly turn unprofitable.
  • BNO may invest in Other Oil-Related Investments, many of which are negotiated contracts that are not as liquid as Futures Contracts and expose BNO to credit risk that its counterparty may not be able to satisfy its obligations to BNO.
*Some risks listed above may be mitigated due to rules proposed by the CFTC and SEC as promulgated under the Dodd-Frank Act. For a discussion of these risks and others, please see the current Prospectus.

DNO - United States Short Oil Fund

An investment in the Shares issued by United States Short Oil Fund® (DNO) involves risks. Some of the risks you may face are summarized below. A more extensive discussion of the risks associated with investing directly or indirectly in DNO, appears in the Prospectus preceding or accompanying this Disclosure document.

Unlike mutual funds, commodity pools or other investment pools that actively manage their investments in an attempt to realize income and gains from their investing activities and distribute such income and gains to their investors, DNO generally does not expect to distribute cash to limited partners or other shareholders. You should not invest in DNO if you will need cash distributions from DNO to pay taxes on your share of income and gains of DNO, if any, or for any other reason.

You may not be able to effectively use USL as a way to hedge against crude oil-related losses or as a way to indirectly invest in crude oil if the following were to occur:

  • Daily changes in DNO's NAV do not inversely correlate with changes in the price of the Benchmark Futures Contract.
  • The Benchmark Futures Contract may not correlate with the spot price of light, sweet crude oil and this could cause changes in the price of the shares to substantially vary from the changes in the spot price of light, sweet crude oil.
  • Accountability levels, position limits, and daily price fluctuation limits set by the exchanges have the potential to cause a tracking error, which could cause the price of shares to substantially vary from the price of the Benchmark Futures Contract and prevent investors from being able to effectively use DNO as a way to hedge against crude oil-related losses or as a way to indirectly invest in crude oil.

Investing in Crude Oil Interests subjects DNO to the risks of the crude oil industry and this could result in large fluctuations in the price of DNO's shares.

The price relationship between the near month contract to expire and the next month contract to expire that compose the Benchmark Futures Contract will vary and may impact both the total return over time of DNO's NAV, as well as the degree to which its total return tracks the inverse of the Benchmark Futures Contract. An unanticipated number of redemption requests during a short period of time could have an adverse effect on the NAV of DNO.

The design of DNO's Benchmark Futures Contract is such that every month it begins by using the near month contract to expire until the near month contract is within two weeks of expiration, when it is sold and the near month contract is replaced with the next month contract to expire as its benchmark contract and keeps that contract as its benchmark until it becomes the near month contract and close to expiration. In the event of a crude oil futures market where near month contracts trade at a higher price than next month contracts to expire, a situation described as "backwardation" in the futures market, then absent the impact of the overall movement in crude oil prices the value of the Benchmark Futures Contract would tend to rise as it approaches expiration. As a result short positions in the Benchmark Futures Contract would tend to track lower. Conversely, in the event of a crude oil futures market where near month contracts trade at a lower price than next month contracts to expire, a situation described as "contango" in the futures market, then absent the impact of the overall movement in crude oil prices the value of the Benchmark Futures Contract would tend to decline as it approaches expiration. As a result short positions in the Benchmark Futures Contract would tend to track higher. When compared to total return of other price indices, such as the spot price of crude oil, the impact of backwardation and contango may lead the total return of DNO'S NAV to vary significantly. In the event of a prolonged period of backwardation, and absent the impact of rising or falling crude oil prices, this could have a significant negative impact on DNO's NAV and total return.

The structure and operation of DNO may involve conflicts of interest. For example, a conflict may arise because the General Partner and its principals and affiliates may trade for themselves. In addition, the General Partner has sole current authority to manage the investments and operations, which may create a conflict with the shareholders' best interests. The General Partner/Sponsor may also have a conflict to the extent that its trading decisions may be influenced by the effect they would have on The General Partner may also have a conflict to the extent that its trading decisions may be influenced by the effect they would have on the United States Oil Fund, the United States 12 Month Oil Fund, the United States Brent Oil Fund, the United States Natural Gas Fund, the United States 12 Month Natural Gas Fund, the United States Gasoline Fund, the United States Heating Oil Fund, the United States Commodity Index Fund, the United States Copper Index Fund and the United States Agriculture Index Fund, the other commodity pools that it manages, or any other commodity pool the General Partner may form and manage in the future.

  • You will have no rights to participate in the management of DNO and will have to rely on the duties and judgment of the General Partner to manage DNO.
  • DNO pays fees and expenses that are incurred regardless of whether it is profitable.
  • If the General Partner causes or permits DNO to become leveraged, you could lose all or substantially all of your investment if DNO's trading positions suddenly turn unprofitable.
  • DNO may also invest in Other Crude Oil-Related Investments, which may be individually negotiated contracts that are not as liquid as oil futures contracts and expose DNO to credit risk that its counterparty may not be able to satisfy its obligations to DNO.

*Some risks listed above may be mitigated due to rules proposed by the CFTC and SEC as promulgated under the Dodd-Frank Act. For a discussion of these risks and others, please see the current Prospectus.

UNG - United States Natural Gas Fund

An investment in the Shares issued by the United States Natural Gas Fund® ("UNG"), involves risks. Some of the risks you may face are summarized below. A more extensive discussion of the risks associated with investing directly or indirectly in UNG, appears in the Prospectus preceding or accompanying this Disclosure document.

Unlike mutual funds, commodity pools or other investment pools that manage their investments in an attempt to realize income and gains and distribute such income and gains to their investors, UNG generally does not distribute cash to limited partners or other shareholders. You should not invest in UNG if you will need cash distributions from UNG to pay taxes on your share of income and gains of UNG, if any, or for any other reason.

You may not be able to effectively use UNG as a way to hedge against natural gas-related losses or as a way to indirectly invest in natural gas if the following were to occur:

  • Daily changes in the price of UNG's shares on the NYSE Arca will not closely track the daily changes in the spot price of natural gas;
  • Changes in UNG's NAV may not correlate with daily changes in the price of the Benchmark Futures Contract;
  • The Benchmark Futures Contract may not correlate with the spot price of natural gas and this could cause changes in the price of the shares to substantially vary from the changes in the spot price of natural gas;
  • Changes in the price of shares may cause the shares to trade at a price that is above or below UNG's NAV per share. Accordingly, changes in the price of shares may substantially vary from the changes in the spot price of natural gas;
  • Accountability levels, position limits, and daily price fluctuation limits set by the exchanges have the potential to cause a tracking error, which could cause the price of shares to substantially vary from the price of the Benchmark Futures Contract.

Investing in UNG for purposes of hedging may subject you to risks, including the possibility of losing the benefit of favorable market movements.

The price relationship between the near month contract and the next month contract that compose the Benchmark Futures Contract will vary and may impact both the total return over time of UNG's NAV, as well as the degree to which its total return tracks other natural gas price indices' total returns.

The design of UNG's Benchmark Futures Contract is such that every month it begins by using the near month contract to expire until the near month contract is within two weeks of expiration, when, over a four-day period, it transitions to the next month contract to expire as its benchmark contract and keeps that contract as its benchmark until it becomes the near month contract and close to expiration. In the event of a natural gas futures market where near month contracts trade at a higher price than next month to expire contracts, a situation described as "backwardation" in the futures market, then absent the impact of the overall movement in natural gas prices the value of the benchmark contract would tend to rise as it approaches expiration. As a result, the total return of the Benchmark Futures Contract would tend to track higher. Conversely, in the event of a natural gas futures market where near month contracts trade at a lower price than next month contracts, a situation described as "contango" in the futures market, then absent the impact of the overall movement in natural gas prices the value of the Benchmark Futures Contract would tend to decline as it approaches expiration. As a result, the total return of the Benchmark Futures Contract would tend to track lower. When compared to total return of other price indices, such as the spot price of natural gas, the impact of backwardation and contango may lead the total return of UNG's NAV to vary significantly. In the event of a prolonged period of contango, and absent the impact of rising or falling natural gas prices, this could have a significant negative impact on UNG's NAV and total return.

The structure and operation of UNG may involve conflicts of interest. For example, a conflict may arise because the General Partner and its principals and affiliates may trade for themselves. In addition, the General Partner has sole current authority to manage the investments and operations, which may create a conflict with the shareholders' best interests. The General Partner may also have a conflict to the extent that its trading decisions may be influenced by the effect they would have on the United States Oil Fund, the United States 12 Month Oil Fund, the United States Short Oil Fund, the United States Brent Oil Fund, the United States 12 Month Natural Gas Fund, the United States Gasoline Fund, the United States Heating Oil Fund, the United States Commodity Index Fund, the United States Copper Index Fund and the United States Agriculture Index Fund, the other commodity pools that it manages, or any other commodity pool the General Partner may form and manage in the future.

  • You will have no rights to participate in the management of UNG and will have to rely on the duties and judgment of the General Partner to manage UNG.
  • UNG pays fees and expenses that are incurred regardless of whether it is profitable.
  • If the General Partner causes or permits UNG to become leveraged, you could lose all or substantially all of your investment if UNG's trading positions suddenly turn unprofitable.
  • UNG may also invest in Other Natural Gas-Related Investments, many of which are negotiated contracts that are not as liquid as Futures Contracts and expose UNG to credit risk that its counterparty may not be able to satisfy its obligations to UNG.
*Some risks listed above may be mitigated due to rules proposed by the CFTC and SEC as promulgated under the Dodd-Frank Act. For a discussion of these risks and others, please see the current Prospectus.

UNL - United States 12 Month Natural Gas Fund

An investment in the Shares issued by the United States 12 Month Natural Gas Fund® ("UNL") involves risks. Some of the risks you may face are summarized below. A more extensive discussion of the risks associated with investing directly or indirectly in UNL, appears in the Prospectus preceding or accompanying this Disclosure document.

Unlike mutual funds, commodity pools or other investment pools that manage their investments in an attempt to realize income and gains and distribute such income and gains to their investors, UNL generally does not distribute cash to limited partners or other shareholders. You should not invest in UNL if you will need cash.

You may not be able to effectively use UNL as a way to hedge against natural gas-related losses or as a way to indirectly invest in natural gas if the following were to occur:

  • Changes in the price of US12NG's shares on the NYSE Arca will not closely track the changes in the spot price of natural gas;
  • Changes in UNL's NAV may not correlate with daily changes in the price of the Benchmark Futures Contract;
  • The Benchmark Futures Contract may not correlate with the spot price of natural gas and this could cause changes in the price of the shares to substantially vary from the changes in the spot price of natural gas;
  • Changes in the price of shares may cause the shares to trade at a price that is above or below UNL's NAV per share. Accordingly, changes in the price of shares may substantially vary from the changes in the spot price of natural gas;
  • Accountability levels, position limits, and daily price fluctuation limits set by the exchanges have the potential to cause a tracking error, which could cause the price of shares to substantially vary from the price of the Benchmark Futures Contract.
  • Investing in UNL for purposes of hedging may subject you to risks, including the possibility of losing the benefit of favorable market movements.

The price relationship between the near month contract and the other monthly contracts that compose the Benchmark Futures Contracts will vary and may impact both the total return over time of UNL's NAV, as well as the degree to which its total return tracks other natural gas price indices' total returns.

The design of UNL's Benchmark Futures Contracts consist of the near month contract to expire and the contracts for the following eleven months, except during the last two weeks of the current month when the near month contract is sold and replaced by the futures contract for the thirteenth month following the current month. In the event of a natural gas futures market where near month contracts trade at a higher price than the price of contracts that expire later in time, a situation described as "backwardation" in the futures market, then absent the impact of the overall movement in natural gas prices the value of the benchmark contract would tend to rise as it approaches expiration. As a result the total return of the Benchmark Futures Contract would tend to track higher. Conversely, in the event of a natural gas futures market where near month contracts trade at a lower price than the price of contracts that expire later in time, a situation described as "contango" in the futures market, then absent the impact of the overall movement in natural gas prices the value of the benchmark contract would tend to decline as it approaches expiration. As a result the total return of the Benchmark Futures Contract would tend to track lower. When compared to total return of other price indices, such as the spot price of natural gas, the impact of backwardation and contango may lead the total return of UNL's NAV to vary significantly. In the event of a prolonged period of contango, and absent the impact of rising or falling natural gas prices, this could have a significant negative impact on UNL's NAV and total return. Furthermore, a portfolio that consists of twelve different monthly contracts, ranging in a "strip" from the first month to the twelfth month, will be impacted differently by contango and backwardation than a portfolio that consists of just the first month contract.

The structure and operation of UNL may involve conflicts of interest. For example, a conflict may arise because the General Partner and its principals and affiliates may trade for themselves. In addition, the General Partner has sole current authority to manage the investments and operations, which may create a conflict with the shareholders' best interests. The General Partner may also have a conflict to the extent that its trading decisions may be influenced by the effect they would have on The General Partner may also have a conflict to the extent that its trading decisions may be influenced by the effect they would have on the United States Oil Fund, the United States 12 Month Oil Fund, the United States Short Oil Fund, the United States Brent Oil Fund, the United States Natural Gas Fund, the United States Gasoline Fund, the United States Heating Oil Fund, the United States Commodity Index Fund, the United States Copper Index Fund and the United States Agriculture Index Fund, the other commodity pools that it manages, or any other commodity pool the General Partner may form and manage in the future.

You will have no rights to participate in the management of UNL and will have to rely on the duties and judgment of the General Partner to manage UNL. UNL pays fees and expenses that are incurred regardless of whether it is profitable. If the General Partner causes or permits UNL to become leveraged, you could lose all or substantially all of your investment if UNL's trading positions suddenly turn unprofitable. UNL may also invest in Other Natural Gas-Related Investments, many of which are negotiated contracts that are not as liquid as Futures Contracts and expose UNL to credit risk that its counterparty may not be able to satisfy its obligations to UNL. *Some risks listed above may be mitigated due to rules proposed by the CFTC and SEC as promulgated under the Dodd-Frank Act. For a discussion of these risks and others, please see the current Prospectus.

UGA - United States Gasoline Fund

An investment in the Shares issued by the United States Gasoline Fund® ("UGA"), involves risks. Some of the risks you may face are summarized below. A more extensive discussion of the risks associated with investing directly or indirectly in UGA, appears in the Prospectus preceding or accompanying this Disclosure document.

Unlike mutual funds, commodity pools or other investment pools that manage their investments in an attempt to realize income and gains and distribute such income and gains to their investors, UGA generally does not distribute cash to limited partners or other shareholders. You should not invest in UGA if you will need cash distributions from UGA to pay taxes on your share of income and gains of UGA, if any, or for any other reason.

You may not be able to effectively use UGA as a way to hedge against gasoline-related losses or as a way to indirectly invest in gasoline if the following were to occur:

  • Changes in UGA's NAV do not correlate with daily changes in the price of the Benchmark Futures Contract;
  • The Benchmark Futures Contract may not correlate with the spot price of gasoline and this could cause changes in the price of the shares to substantially vary from the changes in the spot price of gasoline;
  • Changes in the price of shares may cause the shares to trade at a price that is above or below UNG's NAV per share. Accordingly, changes in the price of shares may substantially vary from the changes in the spot price of natural gas.
  • Accountability levels, position limits, and daily price fluctuation limits set by the exchanges have the potential to cause a tracking error, which could cause the price of shares to substantially vary from the price of the Benchmark Futures Contract.

Investing in UGA for purposes of hedging may subject you to risks, including the possibility of losing the benefit of favorable market movements.

The price relationship between the near month contract to expire and the next month contract to expire that compose the Benchmark Futures Contract will vary and may impact both the total return over time of UGA's NAV, as well as the degree to which its total return tracks other gasoline price indices' total returns. In cases in which the near month contract's price is lower than the next month contract's price (a situation known as "contango" in the futures markets), then absent the impact of the overall movement in gasoline prices the value of the benchmark contract would tend to decline as it approaches expiration. In cases in which the near month contract's price is higher than the next month contract's price (a situation known as "backwardation" in the futures markets), then absent the impact of the overall movement in gasoline prices the value of the benchmark contract would tend to rise as it approaches expiration.

The design of UGA's Benchmark Futures Contract is such that every month it begins by using the near month contract to expire until the near month contract is within two weeks of expiration, when the near month contract is sold and replaced with the next month contract to expire. In the event of a gasoline futures market where near month contracts trade at a higher price than next month to expire contracts, a situation described as "backwardation" in the futures market, then absent the impact of the overall movement in gasoline prices the value of the benchmark contract would tend to rise as it approaches expiration. As a result the total return of the Benchmark Futures Contract would tend to track higher. Conversely, in the event of a gasoline futures market where near month contracts trade at a lower price than next month contracts, a situation described as "contango" in the futures market, then absent the impact of the overall movement in gasoline prices the value of the benchmark contract would tend to decline as it approaches expiration. As a result the total return of the Benchmark Futures Contract would tend to track lower. When compared to total return of other price indices, such as the spot price of gasoline, the impact of backwardation and contango may lead the total return of UGA's NAV to vary significantly. In the event of a prolonged period of contango, and absent the impact of rising or falling gasoline prices, this could have a significant negative impact on UGA's NAV and total return.

The structure and operation of UGA may involve conflicts of interest. For example, a conflict may arise because the General Partner and its principals and affiliates may trade for themselves. In addition, the General Partner has sole current authority to manage the investments and operations, which may create a conflict with the shareholders' best interests. The General Partner may also have a conflict to the extent that its trading decisions may be influenced by the effect they would have on the United States Oil Fund, the United States 12 Month Oil Fund, the United States Short Oil Fund, the United States Brent Oil Fund, the United States Natural Gas Fund, the United States 12 Month Natural Gas Fund, the United States Heating Oil Fund, the United States Commodity Index Fund, the United States Copper Index Fund and the United States Agriculture Index Fund, the other commodity pools that it manages, or any other commodity pool the General Partner may form and manage in the future.

  • You will have no rights to participate in the management of UGA and will have to rely on the duties and judgment of the General Partner to manage UGA.
  • UGA pays fees and expenses that are incurred regardless of whether it is profitable.
  • If the General Partner causes or permits UGA to become leveraged, you could lose all or substantially all of your investment if UGA's trading positions suddenly turn unprofitable.
  • UGA may also invest in Other Gasoline-Related Investments, many of which are negotiated contracts that are not as liquid as Futures Contracts and expose UGA to credit risk that its counterparty may not be able to satisfy its obligations to UGA.

*Some risks listed above may be mitigated due to rules proposed by the CFTC and SEC as promulgated under the Dodd-Frank Act. For a discussion of these risks and others, please see the current Prospectus.

UHN - United States Diesel-Heating Oil Fund

An investment in the Shares issued by the United States Diesel-Heating Oil FundSM ("UHN"), involves risks. Some of the risks you may face are summarized below. A more extensive discussion of the risks associated with investing directly or indirectly in UHN, appears in the Prospectus preceding or accompanying this Disclosure document.

Unlike mutual funds, commodity pools or other investment pools that manage their investments in an attempt to realize income and gains and distribute such income and gains to their investors, UHN generally does not distribute cash to limited partners or other shareholders. You should not invest in UHN if you will need cash distributions from UHN to pay taxes on your share of income and gains of UHN, if any, or for any other reason.

You may not be able to effectively use UHN as a way to hedge against heating oil-related losses or as a way to indirectly invest in heating oil if the following were to occur:

  • The Benchmark Futures Contract may not correlate with the spot price of heating oil and this could cause changes in the price of the shares to substantially vary from the changes in the spot price of heating oil.;
  • Changes in UHN's NAV may not correlate with changes in the price of the Benchmark Futures Contract;
  • Changes in the price of shares may cause the shares to trade at a price that is above or below UHN's NAV per share. Accordingly, changes in the price of shares may substantially vary from the changes in the spot price of heating oil.
  • Accountability levels, position limits, and daily price fluctuation limits set by the exchanges have the potential to cause a tracking error, which could cause the price of shares to substantially vary from the price of the Benchmark Futures Contract.

Investing in UHN for purposes of hedging may subject you to risks, including the possibility of losing the benefit of favorable market movements.

The price relationship between the near month contract to expire and the next month contract to expire that compose the Benchmark Futures Contract will vary and may impact both the total return over time of UHN's NAV, as well as the degree to which its total return tracks other heating oil price indices' total returns. In cases in which the near month contract's price is lower than the next month contract's price (a situation known as "contango" in the futures markets), then absent the impact of the overall movement in heating oil prices the value of the benchmark contract would tend to decline as it approaches expiration. In cases in which the near month contract's price is higher than the next month contract's price (a situation known as "backwardation" in the futures markets), then absent the impact of the overall movement in heating oil prices the value of the benchmark contract would tend to rise as it approaches expiration.

The design of UHN's Benchmark Futures Contract is such that every month it begins by using the near month contract to expire until the near month contract is within two weeks of expiration, when it will use the next month contract to expire as its benchmark contract and keeps that contract as its benchmark until it becomes the near month contract and close to expiration. In the event of a heating oil futures market where near month contracts trade at a higher price than next month to expire contracts, a situation described as "backwardation" in the futures market, then absent the impact of the overall movement in heating oil prices the value of the benchmark contract would tend to rise as it approaches expiration. As a result, the total return of the Benchmark Futures Contract would tend to track higher. Conversely, in the event of a heating oil futures market where near month contracts trade at a lower price than next month contracts, a situation described as "contango" in the futures market, then absent the impact of the overall movement in heating oil prices the value of the benchmark contract would tend to decline as it approaches expiration. As a result the total return of the Benchmark Futures Contract would tend to track lower. When compared to total return of other price indices, such as the spot price of heating oil, the impact of backwardation and contango may lead the total return of UHN's NAV to vary significantly. In the event of a prolonged period of contango, and absent the impact of rising or falling heating oil prices, this could have a significant negative impact on UHN's NAV and total return.

The structure and operation of UHN may involve conflicts of interest. For example, a conflict may arise because the General Partner and its principals and affiliates may trade for themselves. In addition, the General Partner has sole current authority to manage the investments and operations, which may create a conflict with the shareholders' best interests. The General Partner may also have a conflict to the extent that its trading decisions may be influenced by the effect they would have on the United States Oil Fund, the United States 12 Month Oil Fund, the United States Short Oil Fund, the United States Brent Oil Fund, the United States Natural Gas Fund, the United States 12 Month Natural Gas Fund, the United States Gasoline Fund, the United States Commodity Index Fund, the United States Copper Index Fund and the United States Agriculture Index Fund, the other commodity pools that it manages, or any other commodity pool the General Partner may form and manage in the future.

  • You will have no rights to participate in the management of UHN and will have to rely on the duties and judgment of the General Partner to manage UHN.
  • UHN pays fees and expenses that are incurred regardless of whether it is profitable.
  • If the General Partner causes or permits UHN to become leveraged, you could lose all or substantially all of your investment if UHN's trading positions suddenly turn unprofitable.
  • UHN may also invest in Other Heating Oil-Related Investments, many of which are negotiated contracts that are not as liquid as Heating Oil Futures Contracts and expose UHN to credit risk that its counterparty may not be able to satisfy its obligations to UHN.
  • *Some risks listed above may be mitigated due to rules proposed by the CFTC and SEC as promulgated under the Dodd-Frank Act. For a discussion of these risks and others, please see the current Prospectus.

CPER - United States Copper Index Fund

An investment in the Shares issued by the United States Copper Index Fund® ("CPER") involves risks. Some of the risks you may face are summarized below. A more extensive discussion of the risks associated with investing directly or indirectly in CPER, appears in the Prospectus preceding or accompanying this Disclosure document.

Unlike mutual funds, commodity pools or other investment pools that generally distribute income and gains to their investors, CPER does not expect to distribute cash to shareholders. You should not invest in CPER if you will need cash distributions from CPER to pay taxes on your share of income and gains of CPER, if any, or for any other reason.

Changes in CPER's net asset value ("NAV") may not correlate with the changes in the value of the Copper Index.

You may not be able to effectively use CPER as a way to hedge against copper-related losses or as a way to indirectly invest in copper if the following were to occur:

  • The Copper Index does not correlate exactly with the spot price of copper and this could cause the changes in the price of the Shares to substantially vary from the changes in the spot price of copper underlying the Benchmark Component Copper Futures Contract;
  • Changes in CPER's NAV do not correlate with changes in the value of the Copper Index;
  • Changes in the price of CPER's Shares on the NYSE Arca do not correlate perfectly with changes in the NAV of CPER's Shares;
  • Accountability levels, position limits, and daily price fluctuation limits set by the Futures Exchanges have the potential to cause a tracking error, which could cause the price of Shares to substantially vary from the price of the Copper Index.

Investing in CPER for purposes of hedging may subject you to risks, including the possibility of losing the benefit of favorable market movements.

The price relationship between the Copper Index at any point in time and the Eligible Copper Futures Contracts that will become the Benchmark Component Copper Futures Contracts on the next rebalancing date will vary and may impact both CPER's total return and the degree to which its total return tracks that of commodity price indices.

The design of the Copper Index is such that every month it is made up of different Benchmark Component Copper Futures Contracts, and CPER's investments must be rebalanced on an ongoing basis to reflect the changing composition of the Copper Index. In the event of a commodity futures market where near month contracts to expire trade at a higher price than next month contracts to expire, a situation referred to as "backwardation," then absent the impact of the overall movement in commodity prices, the value of the Copper Index would tend to rise as it approaches expiration. As a result CPER may benefit because it would be selling more expensive contracts and buying less expensive ones on an ongoing basis. Conversely, in the event of a commodity futures market where near month contracts trade at a lower price than next month contracts, a situation referred to as "contango," then absent the impact of the overall movement in commodity prices, the value of the Copper Index would tend to decline as it approaches expiration. As a result CPER's total return may be lower than might otherwise be the case because it would be selling less expensive contracts and buying more expensive ones. The impact of backwardation and contango may cause the total return of CPER to vary significantly from the total return of other price references, such as the spot price of the commodities comprising the Copper Index. In the event of a prolonged period of contango, and absent the impact of rising or falling commodity prices, this could have a significant negative impact on CPER's NAV and total return.

The breakeven point per share of $0.37 indicates the approximate dollar returns and 1.48% is the percentage required for the redemption value of a hypothetical initial investment in a single share to equal the amount invested twelve months after the investment was made. For purposes of this breakeven amount, we have assumed an initial selling price of $25.00 which equals the NAV per share. This breakeven amount refers to the redemption of baskets by Authorized Purchasers and is not related to any gains an individual investor would have to achieve in order to break even. The breakeven amount is an approximation only.

CPER has no operating history, so there is no performance history to serve as a basis for you to evaluate an investment in CPER.

The structure and operation of CPER may involve conflicts of interest. The Sponsor has sole current authority to manage the investments and operations of CPER, which may create a conflict with the shareholders' best interests. The Sponsor may also have a conflict to the extent that its trading decisions may be influenced by the effect they would have on the United States Oil Fund, The United States Natural Gas Fund, the United States 12 Month Oil Fund, the United States Gasoline Fund, the United States Heating Oil Fund, the United States Short Oil Fund, the United States 12 Month Natural Gas Fund, the United States Brent Oil Fund, and the United States Commodity Index Fund, the United States Agriculture Index Fund, the other commodity pools it manages, or any other commodity pool the Sponsor may form in the future.

  • You will have no rights to participate in the management of CPER and will have to rely on the duties and judgment of the Sponsor to manage CPER.
  • CPER pays fees and expenses that are incurred regardless of whether it is profitable.
  • If the Sponsor causes or permits CPER to become leveraged, you could lose all or substantially all of your investment if CPER's trading positions suddenly turn unprofitable.
  • CPER may invest in Other Copper-Related Investments. To the extent that these Other Copper-Related Investments are contracts individually negotiated between their parties, they may not be as liquid as Benchmark Component Copper Futures Contracts and will expose CPER to credit risk that its counterparty may not be able to satisfy its obligations to CPER.

BUY – USCF SummerHaven SHPEI Index Fund

Principal Risks of Investing in the Fund

You can lose money on your investment in the Fund. The principal risks of investing in the Fund are summarized below.

Market Risk. The trading prices of equity securities fluctuate, sometimes rapidly and unpredictably, in response to a variety of factors. These factors include events impacting the entire market or a specific market segment. The market value of portfolio holdings can be volatile and change quickly. The Fund’s net asset value (“NAV”) and market price, like market prices generally, may fluctuate significantly. As a result, an investor could lose money over short or long periods of time, including the possible loss of the entire principal amount of an investment.

Passive Investment Risk. The Fund does not attempt to outperform the Index or take defensive positions in declining markets.

Correlation to Index Risk. As with all index funds, the performance of the Fund may not closely track the performance of the Index for a variety of reasons. The Index’s or the Fund’s return may not match or achieve a high degree of correlation with the return of investments in private equity funds or direct investments in private equity.

Correlation to Private Equity Returns Risk. The Index or the Fund’s return may not match or achieve a high degree of correlation with the return of investments in private equity funds or direct investments in private equity due to assumptions in SHIM’s proprietary methodology that prove to be incorrect or asymmetries between investments in public equity versus private equity, such as the limited liquidity (or illiquidity), infrequency of valuations, and estimated valuations associated with private equity investments.

Private Equity Investing Risk. The Fund seeks to generate returns that mimic the returns of U.S. private equity funds, as measured by the Index. Because investing in private equity often carries a high degree of risk, the returns of private equity funds may be subject to greater volatility than the returns of funds that invest in larger, more established public companies. Similarly, the Fund’s returns may experience greater volatility than funds that invest in larger, more established public companies. The Fund does not invest in private equity funds nor does it invest directly in private equity.

Micro-, Small-, and Mid-Capitalization Risk. The securities of micro-, small-, and mid-capitalization companies may be more volatile and may involve more risk than the securities of larger companies because such smaller companies generally have a higher risk of failure. The Fund may experience difficulty in liquidating positions in smaller companies at favorable prices or times. Some securities of smaller companies may be illiquid. These risks are greater when investing in micro- and small-capitalization companies. Returns on investments in securities of smaller companies could be lower than the returns on investments in securities of larger companies.

Licensing Risk. The Fund relies on licenses that permit the Fund to use the Index and associated trade names and marks (the “Intellectual Property”) in connection with the name and investment strategies of the Fund. Such licenses may be terminated by the licensor and, as a result, the Fund may lose its ability to use the Intellectual Property.

Industry Concentration Risk. To the extent that the Fund’s investments are concentrated in or significantly exposed to a particular sector, the Fund will be more susceptible to loss due to adverse occurrences affecting that sector. In such case, the Fund will be subject to the risk that economic, political, or other conditions that have a negative impact on that sector may adversely affect the Fund to a greater extent than if the Fund’s assets were invested in a wider variety of sectors or industries.

Liquidity Risk. The Fund may not always be able to liquidate its investments at the desired price or time (or at all) or at prices approximating those at which the Fund currently values them. It may be difficult for the Fund to value illiquid holdings accurately. Unexpected market illiquidity may cause major losses at any time or from time to time.

Premium or Discount to NAV Risk. As with all exchange-traded funds (“ETFs”), Fund shares may be bought and sold in the secondary market at market prices. Although it is expected that the market price of the shares of the Fund will approximate the Fund’s NAV, there may be times when the market price and the NAV vary significantly, particularly in times of market stress. Thus, an investor may pay significantly more (or less) than NAV when buying shares of the Fund in the secondary market, or receive significantly more (or less) than NAV when selling those shares in the secondary market. A premium or discount to NAV may be reflected in the spread between bid and ask prices that are quoted during the course of a trading day. If an investor purchases Fund shares at a time when the market price is at a premium to the NAV of the Fund’s shares or sells at a time when the market price is at a discount to the NAV of the Fund’s shares, an investor may sustain losses.

Fluctuation of NAV Risk. The market prices of the Fund’s shares will generally fluctuate in accordance with changes in NAV as well as the relative supply of and demand for the Fund’s shares on the NYSE Arca. The Adviser cannot predict whether the Fund’s shares will trade below, at, or above NAV.

Secondary Market Risk. Although the Fund’s shares are listed for trading on NYSE Arca and may be listed or traded on U.S. and non-U.S. stock exchanges other than NYSE Arca, there can be no assurance that an active trading market for such shares will develop or be maintained. Investors buying or selling Fund shares in the secondary market will pay brokerage commissions or other charges imposed by brokers and will incur the cost of the difference between “bid” and “ask” prices of the Fund’s shares.

New Fund Risk. As a new fund, there can be no assurance that the Fund will grow to or maintain an economically viable size.

Newly Created Index Risk. The Index is newly created and has a limited history of performance. As such, it is uncertain how closely the Index may be able to track the performance of an actual portfolio of the constituent securities that comprise the index.

New Sub-Adviser Risk. Although the Sub-Adviser’s principals and the Fund’s portfolio managers have experience managing investments in the past, the Sub-Adviser is a newly-registered investment adviser and has no previous experience managing investments for an ETF or any other investment company, which may limit the Sub-Adviser’s effectiveness.

Securities Lending Risk. The Fund may lend its portfolio securities to brokers, dealers and other financial institutions. In connection with such loans, the Fund will receive collateral from the borrower equal to at least 100% of the value of the loaned securities. If the borrower of the securities fails financially, there could be delays in recovering the loaned securities or exercising rights to the collateral.

BUYN – USCF SummerHaven SHPEN Index Fund

Principal Risks of Investing in the Fund

You can lose money on your investment in the Fund. The principal risks of investing in the Fund are summarized below.

Market Risk. The trading prices of equity securities fluctuate, sometimes rapidly and unpredictably, in response to a variety of factors. These factors include events impacting the entire market or a specific market segment. The market value of portfolio holdings can be volatile and change quickly. The Fund’s net asset value (“NAV”) and market price, like market prices generally, may fluctuate significantly. As a result, an investor could lose money over short or long periods of time, including the possible loss of the entire principal amount of an investment.

Passive Investment Risk. The Fund does not attempt to outperform the Index or take defensive positions in declining markets.

Correlation to Index Risk. As with all index funds, the performance of the Fund may not closely track the performance of the Index for a variety of reasons. The Index’s or the Fund’s return may not match or achieve a high degree of correlation with the return of investments in private equity funds or direct investments in private equity.

Correlation to Private Equity Returns Risk. The Index or the Fund’s return may not match or achieve a high degree of correlation with the return of investments in private equity funds or direct investments in private equity due to assumptions in SHIM’s proprietary methodology that prove to be incorrect or asymmetries between investments in public equity versus private equity, such as the limited liquidity (or illiquidity), infrequency of valuations, and estimated valuations associated with private equity investments.

Private Equity Investing Risk. The Fund seeks to generate returns that mimic the returns of U.S. private equity funds that focus on natural resource investments, as measured by the Index. Because investing in private equity often carries a high degree of risk, the returns of private equity funds may be subject to greater volatility than the returns of funds that invest in larger, more established public companies. Similarly, the Fund’s returns may experience greater volatility than funds that invest in larger, more established public companies. The Fund does not invest in private equity funds nor does it invest directly in private equity.

Micro-, Small-, and Mid-Capitalization Risk. The securities of micro-, small-, and mid-capitalization companies may be more volatile and may involve more risk than the securities of larger companies because such smaller companies generally have a higher risk of failure. The Fund may experience difficulty in liquidating positions in smaller companies at favorable prices or times. Some securities of smaller companies may be illiquid. These risks are greater when investing in micro- and small-capitalization companies. Returns on investments in securities of smaller companies could be lower than the returns on investments in securities of larger companies.

Risks of Investing in Natural Resource Companies. Investments in companies in natural resources industries can be significantly affected by (often rapid) changes in the supply and demand for various natural resources. They may also be affected by changes in energy prices, the participation of speculators, international political and economic developments, environmental incidents, energy conservation, the success of exploration projects, changes in commodity prices, limitations on the liquidity of certain natural resources, and tax and other government regulations. Certain sectors such as consumer staples (e.g., agriculture companies) may be significantly affected by adverse weather, natural disasters, pollution, and disease that could limit or halt production. Industrial materials companies are affected when worldwide production of industrial materials has exceeded demand as a result of over-building or economic downturns, leading to poor investment returns or losses. Companies in the energy sector can be significantly affected by fluctuations in energy prices and supply and demand of energy fuels. Markets for various energy-related commodities are subject to control or manipulation by large producers or purchasers. Metals and mining companies can be significantly affected by events relating to international political and economic developments, energy conservation, the success of exploration projects, commodity prices, and tax and other government regulations. Natural resource companies may also be affected by changes in exchange rates, import controls, worldwide competition, environmental policies, and consumer demand. Thus, the Fund’s investments in these companies may subject the Fund to greater volatility than investments in companies in other industries. The performance of natural resource companies are particularly affected by supply and demand both for their specific products or services and for commodities in general.

Licensing Risk. The Fund relies on licenses that permit the Fund to use the Index and associated trade names and marks (the “Intellectual Property”) in connection with the name and investment strategies of the Fund. Such licenses may be terminated by the licensor and, as a result, the Fund may lose its ability to use the Intellectual Property.

Industry Concentration Risk. To the extent that the Fund’s investments are concentrated in or significantly exposed to a particular sector, the Fund will be more susceptible to loss due to adverse occurrences affecting that sector. In such case, the Fund will be subject to the risk that economic, political, or other conditions that have a negative impact on that sector may adversely affect the Fund to a greater extent than if the Fund’s assets were invested in a wider variety of sectors or industries.

Liquidity Risk. The Fund may not always be able to liquidate its investments at the desired price or time (or at all) or at prices approximating those at which the Fund currently values them. It may be difficult for the Fund to value illiquid holdings accurately. Unexpected market illiquidity may cause major losses at any time or from time to time.

Premium or Discount to NAV Risk. As with all exchange-traded funds (“ETFs”), Fund shares may be bought and sold in the secondary market at market prices. Although it is expected that the market price of the shares of the Fund will approximate the Fund’s NAV, there may be times when the market price and the NAV vary significantly, particularly in times of market stress. Thus, an investor may pay significantly more (or less) than NAV when buying shares of the Fund in the secondary market, or receive significantly more (or less) than NAV when selling those shares in the secondary market. A premium or discount to NAV may be reflected in the spread between bid and ask prices that are quoted during the course of a trading day. If an investor purchases Fund shares at a time when the market price is at a premium to the NAV of the Fund’s shares or sells at a time when the market price is at a discount to the NAV of the Fund’s shares, an investor may sustain losses.

Fluctuation of NAV Risk. The market prices of the Fund’s shares will generally fluctuate in accordance with changes in NAV as well as the relative supply of and demand for the Fund’s shares on the NYSE Arca. The Adviser cannot predict whether the Fund’s shares will trade below, at, or above NAV.

Secondary Market Risk. Although the Fund’s shares are listed for trading on NYSE Arca and may be listed or traded on U.S. and non-U.S. stock exchanges other than NYSE Arca, there can be no assurance that an active trading market for such shares will develop or be maintained. Investors buying or selling Fund shares in the secondary market will pay brokerage commissions or other charges imposed by brokers and will incur the cost of the difference between “bid” and “ask” prices of the Fund’s shares.

New Fund Risk. As a new fund, there can be no assurance that the Fund will grow to or maintain an economically viable size.

Newly Created Index Risk. The Index is newly created and has a limited history of performance. As such, it is uncertain how closely SHPEN may be able to track the performance of an actual portfolio of the constituent securities that comprise the index.

New Sub-Adviser Risk. Although the Sub-Adviser’s principals and the Fund’s portfolio managers have experience managing investments in the past, the Sub-Adviser is a newly-registered investment adviser and has no previous experience managing investments for an ETF or any other investment company, which may limit the Sub-Adviser’s effectiveness.

Securities Lending Risk. The Fund may lend its portfolio securities to brokers, dealers and other financial institutions. In connection with such loans, the Fund will receive collateral from the borrower equal to at least 100% of the value of the loaned securities. If the borrower of the securities fails financially, there could be delays in recovering the loaned securities or exercising rights to the collateral.

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