Disclosures

An investment in USO can be adversely impacted by various factors as disclosed in USO’s current prospectus, including disruptions in the markets for crude oil and regulatory and other limitations imposed on USO’s positions in the oil markets and other oil-related investments, such as the events that occurred during Spring of 2020. THE USO PROSPECTUS DESCRIBES THESE RISKS AND OTHER MATERIAL RISKS. INVESTORS SHOULD CAREFULLY READ THE USO PROSPECTUS AND CONSIDER ALL OF THE RISK FACTORS DESCRIBED THEREIN BEFORE MAKING AN INVESTMENT DECISION WITH RESPECT TO USO SHARES. USO’S CURRENT PROSPECTUS CAN BE FOUND HERE, AND USO’S CURRENT AND PERIODIC REPORTS FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION INCORPORATED THEREIN CAN BE FOUND HERE.

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USCI - United States Commodity Index Fund

An investment in USO can be adversely impacted by various factors as disclosed in USO’s current prospectus, including disruptions in the markets for crude oil and regulatory and other limitations imposed on USO’s positions in the oil markets and other oil-related investments, such as the events that occurred during Spring of 2020. THE USO PROSPECTUS DESCRIBES THESE RISKS AND OTHER MATERIAL RISKS. INVESTORS SHOULD CAREFULLY READ THE USO PROSPECTUS AND CONSIDER ALL OF THE RISK FACTORS DESCRIBED THEREIN BEFORE MAKING AN INVESTMENT DECISION WITH RESPECT TO USO SHARES. USO’S CURRENT PROSPECTUS CAN BE FOUND HERE, AND USO’S CURRENT AND PERIODIC REPORTS FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION INCORPORATED THEREIN CAN BE FOUND HERE.

Description of United States Commodity Index Fund, and the General Risks of the Offering (terms not otherwise defined below have the meaning given to them in the prospectus).

The United States Commodity Index Fund (“USCI”) is an exchange-traded security whose shares may be purchased and sold on the NYSE Arca. 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.

The investment objective of USCI is for the daily changes in percentage terms of its shares’ per share net asset value (“NAV”) to reflect the daily changes in percentage terms of the SummerHaven Dynamic Commodity Index Total ReturnSM (the “SDCI”), less USCI’s expenses. The SDCI is designed to reflect the performance of a diversified group of commodities. The SDCI is owned and maintained by SummerHaven Index Management, LLC (“SHIM”) and is calculated and published by Bloomberg L.P. Futures contracts for the commodities comprising the SDCI are traded on the New York Mercantile Exchange (“NYMEX”), ICE Futures (“ICE Futures”), Chicago Board of Trade (“CBOT”), Chicago Mercantile Exchange (“CME”), London Metal Exchange (“LME”), and Commodity Exchange, Inc. (“COMEX”) together with the NYMEX, ICE Futures, CBOT, CME, LME and COMEX, the “Futures Exchanges”) and are collectively referred to herein as “Futures Contracts.” The Futures Contracts that at any given time make up the SDCI are referred to herein as “Benchmark Component Futures Contracts.” The relative weighting of the Benchmark Component Futures Contracts will change on a monthly basis, based on quantitative formulas relating to the prices of the Benchmark Component Futures Contracts developed by SHIM.

USCI seeks to achieve its investment objective by investing so that the average daily percentage change in USCI’s NAV for any period of 30 successive valuation days will be within plus/minus 10 percent (10%) of the average daily percentage change in the price of the SDCI over the same period.

Past performance of USCI or the Benchmark Component Futures Contract is not necessarily indicative of future results. Therefore, past performance of USCI or the Benchmark Futures Contract should not be relied upon in deciding whether to buy shares of USCI.

USCI is not actively managed by conventional methods. Accordingly, if USCI’s investments in Commodity Interests are declining in value, USCI will not close out such positions except in connection with paying the proceeds to an Authorized Participant upon the redemption of basket or closing out futures positions in connection with the monthly change in the Benchmark Component Futures Contracts. USCF will seek to cause the NAV of USCI’s shares to track the SDCI during periods in which the price is flat or declining as well as when the price is rising. USCI’s ability to invest in one or more of the Benchmark Futures Contracts could be limited as a result of any or all of the following: evolving market conditions, a change in regulatory accountability levels and position limits imposed on USCI with respect to its investment in Futures Contracts, risk mitigation measures taken by market participants with respect to USCI acquiring additional Futures Contracts, or USCI selling additional shares.

An investment in USCI involves investment risk similar to a direct investment in Commodity Interests. An investment in USCI also involves correlation risk, which is the risk that investors purchasing shares to hedge against movements in the price of commodities will have an efficient hedge only if the price they pay for their shares closely correlates with the price of the commodities. In addition to investment risk and correlation risk, an investment in USCI involves tax risks, OTC risks, and other risks. A more extensive discussion of the risks associated with investing directly or indirectly in USCI appears in the prospectus.

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, USCI generally does not distribute cash 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.

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

  • The daily changes in the price of USCI’s shares on the NYSE Arca on a percentage basis, do not closely track the daily changes in the spot prices of the commodities comprising the SDCI on a percentage basis.
  • The price of USCI’s shares traded on the NYSE Arca does not correlate closely with the value of USCI’s NAV.
  • Changes in USCI’s NAV do not correlate closely with the changes in the price of the Benchmark Component Futures Contracts.
  • Changes in the price of the Benchmark Component Futures Contracts do not closely correlate with the changes in the cash or spot price of the underlying commodities.
  • 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 USCI’s shares to substantially vary from the price of the SDCI.

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 SDCI 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 SDCI.

The design of the SDCI is such that every month it is made up of different Benchmark Component Futures Contracts and USCI’s investment must be rebalanced on an ongoing basis to reflect the changing composition of the SDCI. 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 SDCI 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 SDCI 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 SDCI. 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.

Investors cannot be assured that the licensing agreement between SHIM and USCF for use of the SDCI will continue for any length of time. Should the licensing agreement between SHIM and USCF for use of the SDCI be terminated, USCF will be required to find a replacement index, which may have an adverse effect on USCI.

SummerHaven Investment Management, LLC is the commodity trading advisor for USCI. Investors cannot be assured that SummerHaven will be willing or able to continue to service USCI for any length of time. SummerHaven was formed for the purpose of providing investment advisory services, and provides these services to USCI on a contractual basis pursuant to an advisory agreement. If SummerHaven discontinues its activities on behalf of USCI, USCI may be adversely affected.

There are present and potential future conflicts of interest in USCI’s structure and operation you should consider before you purchase shares. If the Sponsor is not able to resolve these conflicts of interest adequately, it may impact the ability of USCI and the other funds managed by the Sponsor to meet their investment objectives. The Sponsor’s officers, directors and employees, do not devote their time exclusively to USCI. These persons are directors, officers or employees of other entities which may compete with USCI for their services. They could have a conflict between their responsibilities to USCI and to those other entities. The Sponsor has sole current authority to manage the investments and operations of USCI, and this may allow it to act in a way that furthers its own interests which may create a conflict with your best interests. The Sponsor may have a conflict of interest to the extent that its trading decisions for USCI may be influenced by the effect they would have on the other funds it manages. In addition, the Sponsor is required to indemnify its officers and directors, if the need arises, which will cause the Sponsor’s assets to decrease.

  • You have no rights to participate in the management of USCI and 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 has not leveraged, and does not intend to leverage, its assets through borrowings or otherwise, and makes its investments accordingly. Consistent with the foregoing, USCI’s announced investment intentions, and any changes thereto, will take into account the need for USCI to make permitted investments that also allow it to maintain adequate liquidity to meet its margin and collateral requirements and to avoid, to the extent reasonably possible, USCI becoming leveraged. If market conditions require it, these risk reduction procedures, including changes to USCI’s investments, may occur on short notice if they occur other than during a roll or rebalance period.
  • 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.

USO - United States Oil Fund

An investment in USO can be adversely impacted by various factors as disclosed in USO’s current prospectus, including disruptions in the markets for crude oil and regulatory and other limitations imposed on USO’s positions in the oil markets and other oil-related investments, such as the events that occurred during Spring of 2020. THE USO PROSPECTUS DESCRIBES THESE RISKS AND OTHER MATERIAL RISKS. INVESTORS SHOULD CAREFULLY READ THE USO PROSPECTUS AND CONSIDER ALL OF THE RISK FACTORS DESCRIBED THEREIN BEFORE MAKING AN INVESTMENT DECISION WITH RESPECT TO USO SHARES. USO’S CURRENT PROSPECTUS CAN BE FOUND HERE, AND USO’S CURRENT AND PERIODIC REPORTS FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION INCORPORATED THEREIN CAN BE FOUND HERE.

Description of United States Oil Fund, LP and the General Risks of the Offering (terms not otherwise defined below have the meaning given to them in the prospectus).

The United States Oil Fund, LP (“USO”) is an exchange-traded security whose shares may be purchased and sold on the NYSE Arca. 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.

USO’s investment objective is for the daily changes, in percentage terms, of its shares’ net asset value (“NAV”) to reflect the daily changes, in percentage terms, of the spot price of light sweet crude oil delivered to Cushing, Oklahoma, as measured by the daily changes in the Benchmark Futures Contract. Specifically, USO seeks for the average daily percentage change in USO’s net asset value, for any period of 30 successive valuation days, to be within plus/minus 10% of the average daily percentage change in the price of the Benchmark Oil Futures Contract over the same period.

Past performance of USO or the Benchmark Futures Contract is not indicative of future results. Therefore, past performance of USO or the Benchmark Futures Contract should not be relied upon in deciding whether to buy shares of USO.

USO is not actively managed by conventional methods. Accordingly, if USO’s investments in Oil Interests are declining in value, in the ordinary course, USO will not close out such positions (i) except in connection with paying the proceeds to an Authorized Participant upon the redemption of a basket or closing out its positions in Oil Futures Contracts and other permitted investments, (ii) in connection with the monthly change in the Benchmark Oil Futures Contract, or (iii) when USO otherwise determines it would be appropriate to do so, e.g., due to regulatory requirements or risk mitigation measures, or to avoid USO becoming leveraged, and it reinvests the proceeds in new Oil Futures Contracts or Other Oil-Related Investments to the extent possible. USCF will seek to cause the NAV of USO’s shares to track the Benchmark Oil Futures Contract during periods in which its price is flat or declining as well as when the price is rising.

USO has always had the ability to invest in Oil Futures Contracts beyond the Benchmark Oil Futures Contract and in Other Oil-Related Investments, including to invest in Oil Futures Contracts other than the Benchmark Oil Future Contract and that it could, if it determined it appropriate in light of market conditions and regulatory requirements, invest in Other Oil-Related Interests. As disclosed in the prospectus, it is likely that the factors limiting USO’s investments in the Benchmark Oil Futures Contract will continue and that USO’s need to invest in other Oil Futures Contracts and, potentially other permitted investments, will continue.

As a result of market and regulatory conditions, including significant market volatility, large numbers of USO shares purchased during a short period of time, applicable regulatory accountability levels and position limits on oil futures contracts and FCM risk mitigation measures that were imposed on USO in 2020, USO invested in Oil Futures Contracts in months other than the Benchmark Oil Futures Contracts and was limited in its investments in the Benchmark Oil Futures Contract. In order to continue to meet its investment objective, USO has chosen from its permitted investments types and amounts of Oil Futures Contracts allowed by its current regulatory requirements and under the risk mitigation efforts of its FCMs and other market participants, including those Oil Futures Contracts with expiration dates for months later than that of the Benchmark Oil Futures Contract. Continued holdings in these later month contracts may allow USO to experience lesser effects from contango than would be the case if USO’s holdings were primarily in Oil Futures Contracts in the first month or second month. Likewise, continued holdings in these later month contracts also could cause USO to experience lesser effects from backwardation than would be the case if USO’s holdings were primarily in Oil Futures Contracts in the first month or second month. While USO continues to invest in later month contracts, there is no assurance that this will continue and if USO returns to primarily investing in the Benchmark Oil Futures Contract it will be subject to greater effects of contango and backwardation.

While it is USO’s expectation that at some point in the future it will be able to return to primarily investing in the Benchmark Oil Futures Contract or other similar futures contracts of the same tenor based on light, sweet crude oil, there can be no guarantee of when, if ever, that will occur. As a result, investors in USO should expect USO will continue to invest in other permitted investments and that there will be continued deviations between the performance of USO’s investments and the Benchmark Oil Futures Contract, and that USO may not be able to meet its investment objective within as narrow a percentage change difference in USO’s NAV for any period of 30 successive valuation days and the average daily percentage change in the price of the Benchmark Oil Futures Contract as it typically had prior to the Spring of 2020 due to the factors described here and in the prospectus. Limitations on USO’s ability to invest in the Benchmark Oil Futures Contract, together with the changes to its portfolio of investments, have impacted and may continue to impact the performance of USO and the value of its shares.

An investment in USO involves investment risk similar to a direct investment in Oil Futures Contracts and Other Oil-Related Investments, and but it is not a proxy for investing in the oil markets. Investing in USO also involves correlation risk, or the risk that investors purchasing shares to hedge against movements in the price of crude oil will have an efficient hedge only if the price they pay for their shares closely correlates with the price of crude oil. In addition to investment risk and correlation risk, an investment in USO involves tax risks, OTC risks, and other risks. A more extensive discussion of the risks associated with investing directly or indirectly in USO appears in the prospectus.

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 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:

  • The daily changes in the price of USO’s shares on the NYSE Arca on a percentage basis, do not closely track the daily changes in the spot price of light, sweet crude oil on a percentage basis.
  • The price of shares traded on the NYSE Arca does not correlate closely with the value of USO’s NAV.
  • Changes in USO's NAV do not correlate with changes in the price of the Benchmark Oil Futures Contracts.
  • 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.
  • 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. Contango and backwardation can exist and be amplified to the extent the subsequent month is one or more months beyond the next month and under certain market conditions.

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 ten 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 light, sweet crude oil prices the value of the benchmark contract would tend to rise as it approaches expiration. 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.

While contango and backwardation are consistently present in trading in the futures markets, such conditions can be exacerbated by market forces. For example, extraordinary market conditions in the crude oil markets, including “super contango” (a higher level of contango arising from the overabundance of oil being produced and the limited availability of storage for such excess supply), occurred in the crude oil futures markets in Spring of 2020 due to over-supply of crude oil in the face of weak demand related to shutdowns in connection with the COVID-19 pandemic and disputes among oil-producing countries regarding limitations on the production of oil.

While USO continues to invest in later month contracts, there is no assurance that this will continue and if USO returns to primarily investing in the Benchmark Oil Futures Contract, it will be subject to greater effects of contango and backwardation. When compared to total return of other price indices, such as the spot price of crude oil, the impact of backwardation and contango may cause the total return of USO’s per share NAV to vary significantly. Moreover, absent the impact of rising or falling oil prices, a prolonged period of contango could have a significant negative impact on USO’s per share NAV and total return and investors could lose part or all of their investment.

There are present and potential future conflicts of interest in USO’s structure and operation you should consider before you purchase shares. If the General Partner is not able to resolve these conflicts of interest adequately, it may impact the ability of USO and the other funds managed by the General Partner to meet their investment objectives. The General Partner’s officers, directors and employees, do not devote their time exclusively to USO. These persons are directors, officers or employees of other entities which may compete with USO for their services. They could have a conflict between their responsibilities to USO and to those other entities. The General Partner has sole current authority to manage the investments and operations of USO, and this may allow it to act in a way that furthers its own interests which may create a conflict with your best interests. The General Partner may have a conflict of interest to the extent that its trading decisions for USO may be influenced by the effect they would have on the other funds it manages. In addition, the General Partner is required to indemnify its officers and directors, if the need arises, which will cause the General Partner’s assets to decrease.

  • You have no rights to participate in the management of USO and 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 USL to become leveraged, you could lose all or substantially all of your investment if USL's trading positions suddenly turn unprofitable. USO has not leveraged, and does not intend to leverage, its assets through borrowings or otherwise, and makes its investments accordingly. Consistent with the foregoing, USO’s announced investment intentions, and any changes thereto, will take into account the need for USO to make permitted investments that also allow it to maintain adequate liquidity to meet its margin and collateral requirements and to avoid, to the extent reasonably possible, USO becoming leveraged. If market conditions require it, these risk reduction procedures, including changes to USO’s investments, may occur on short notice if they occur other than during a roll or rebalance period.
  • USO may also invest in Other Crude Oil-Related Investments, many of which are negotiated over-the-counter 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.

USL - United States 12 Month Oil Fund

An investment in USO can be adversely impacted by various factors as disclosed in USO’s current prospectus, including disruptions in the markets for crude oil and regulatory and other limitations imposed on USO’s positions in the oil markets and other oil-related investments, such as the events that occurred during Spring of 2020. THE USO PROSPECTUS DESCRIBES THESE RISKS AND OTHER MATERIAL RISKS. INVESTORS SHOULD CAREFULLY READ THE USO PROSPECTUS AND CONSIDER ALL OF THE RISK FACTORS DESCRIBED THEREIN BEFORE MAKING AN INVESTMENT DECISION WITH RESPECT TO USO SHARES. USO’S CURRENT PROSPECTUS CAN BE FOUND HERE, AND USO’S CURRENT AND PERIODIC REPORTS FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION INCORPORATED THEREIN CAN BE FOUND HERE.

Description of United States 12 Month Oil Fund, LP and the General Risks of the Offering (terms not otherwise defined below have the meaning given to them in the prospectus).

The United States 12 Month Oil Fund, LP (“USL”) is an exchange-traded security whose shares may be purchased and sold on the NYSE Arca. 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.

The investment objective of USL is for the daily changes in percentage terms of its per share net asset value (“NAV”) to reflect the daily changes in percentage terms of the spot price of light, sweet crude oil delivered to Cushing, Oklahoma, as measured by the daily changes in the average of the prices of specified short-term futures contracts on light, sweet crude oil called the “Benchmark Oil Futures Contracts,” plus interest earned on USL’s collateral holdings, less USL’s expenses. USL seeks to achieve its investment objective by investing so that the average daily percentage change in USL’s NAV for any period of 30 successive valuation days will be within plus/minus ten percent (10%) of the average daily percentage changes in the price of the Benchmark Oil Futures Contracts over the same period.

Past performance of USL or the Benchmark Futures Contracts is not necessarily indicative of future results. Therefore, past performance of USL or the Benchmark Futures Contracts should not be relied upon in deciding whether to buy shares of USL.

USL is not actively managed by conventional methods. Accordingly, if USL’s investments in Oil Interests are declining in value, in the ordinary course, USL will not close out such positions except in connection with paying the proceeds to an Authorized Participant upon the redemption of a basket or closing out its positions in Oil Futures Contracts and other permitted investments in connection with the monthly change in the Benchmark Oil Futures Contracts or when USL otherwise determines it would be appropriate to do so, e.g., due to regulatory requirements or risk mitigation measures, or to avoid USL becoming leveraged, and it reinvests the proceeds in new Oil Futures Contracts or Other Oil-Related Investments to the extent possible. USCF will seek to cause the NAV of USL’s shares to track the Benchmark Oil Futures Contracts during periods in which its price is flat or declining as well as when the price is rising.

An investment in USL involves investment risk similar to a direct investment in Oil Futures Contracts and Other Oil-Related Investments, but it is not a proxy for investing in the oil markets. Investing in USL also involves correlation risk, or the risk that investors purchasing shares to hedge against movements in the price of crude oil will have an efficient hedge only if the price they pay for their shares closely correlated with the price of crude oil. In addition to investment risk and correlation risk, an investment in USL involves tax risks, OTC risks, and other risks. A more extensive discussion of the risks associated with investing directly or indirectly in USL appears in the prospectus.

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 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:

  • The daily changes in the price of USL’s shares on the NYSE Arca on a percentage basis do not closely track the daily changes in the spot price of light, sweet crude oil on a percentage basis.
  • The price of shares traded on the NYSE Arca does not correlate closely with the value of USL’s NAV.
  • 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 average prices of the Benchmark Oil Futures Contracts do not closely correlate with the changes in the cash or 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 average of the prices of the Benchmark Oil Futures Contracts.

USL’s Benchmark Oil Futures Contracts consists of the near month contract to expire and the 11 following months, which are changed to the next month contract to expire and the 11 following months during one day each month. 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 light, sweet crude oil prices the value of the benchmark contract would tend to rise as it approaches expiration. 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.

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

USCF believes that holding futures contracts whose expiration dates are spread out over a 12-month period of time will cause the total return of such a portfolio to vary compared to a portfolio that holds only a single month’s contract (such as the near month contract). In particular, USCF believes that the total return of a portfolio holding contracts with a range of expiration months will be impacted differently by the price relationship between different contract months of the same commodity future compared to the total return of a portfolio consisting of the near month contract. For example, in cases in which the near month contract’s price is higher than the price of contracts that expire later in time (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 near month contract would tend to rise as it approaches expiration. Conversely, in cases in which the near month contract’s price is lower than the price of contracts that expire later in time (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 near month contract would tend to decline as it approaches expiration. The total return of a portfolio that owned the near month contract and “rolled” forward each month by selling the near month contract as it approached expiration and purchasing the next month contract to expire would be positively impacted by a backwardation market, and negatively impacted by a contango market. Depending on the exact price relationship of the different month’s prices, portfolio expenses, and the overall movement of crude oil prices, the impact of backwardation and contango could have a major impact on the total return of such a portfolio over time. USCF believes that based on historical evidence a portfolio that held futures contracts with a range of expiration dates spread out over a 12 month period of time would typically be impacted less by the positive effect of backwardation and the negative effect of contango compared to a portfolio that held contracts of a single near month. As a result, absent the impact of any other factors, a portfolio of 12 different monthly contracts would tend to have a lower total return than a near month only portfolio in a backwardation market and a higher total return in a contango market. However, there can be no assurance that such historical relationships would provide the same or similar results in the future.

There are present and potential future conflicts of interest in USL’s structure and operation you should consider before you purchase shares. If the General Partner is not able to resolve these conflicts of interest adequately, it may impact the ability of USL and the other funds managed by the General Partner to meet their investment objectives. The General Partner’s officers, directors and employees, do not devote their time exclusively to USL. These persons are directors, officers or employees of other entities which may compete with USL for their services. They could have a conflict between their responsibilities to USL and to those other entities. The General Partner has sole current authority to manage the investments and operations of USL, and this may allow it to act in a way that furthers its own interests which may create a conflict with your best interests. The General Partner may have a conflict of interest to the extent that its trading decisions for USL may be influenced by the effect they would have on the other funds it manages. In addition, the General Partner is required to indemnify its officers and directors, if the need arises, which will cause the General Partner’s assets to decrease.

  • You have no rights to participate in the management of USL and 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 has not leveraged, and does not intend to leverage its assets through borrowings or otherwise, and makes its investments accordingly. Consistent with the foregoing, USL’s announced investment intentions, and any changes thereto, will take into account the need for USL to make permitted investments that also allow it to maintain adequate liquidity to meet its margin and collateral requirements and to avoid, to the extent reasonably possible, USL becoming leveraged. If market conditions require it, these risk reduction procedures may occur on short notice if they occur other than during a roll or rebalance period.
  • USL may also invest in Other Crude Oil-Related Investments, many of which are negotiated over-the-counter 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.

BNO - United States Brent Oil Fund

An investment in USO can be adversely impacted by various factors as disclosed in USO’s current prospectus, including disruptions in the markets for crude oil and regulatory and other limitations imposed on USO’s positions in the oil markets and other oil-related investments, such as the events that occurred during Spring of 2020. THE USO PROSPECTUS DESCRIBES THESE RISKS AND OTHER MATERIAL RISKS. INVESTORS SHOULD CAREFULLY READ THE USO PROSPECTUS AND CONSIDER ALL OF THE RISK FACTORS DESCRIBED THEREIN BEFORE MAKING AN INVESTMENT DECISION WITH RESPECT TO USO SHARES. USO’S CURRENT PROSPECTUS CAN BE FOUND HERE, AND USO’S CURRENT AND PERIODIC REPORTS FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION INCORPORATED THEREIN CAN BE FOUND HERE.

Description of the United States Brent Oil Fund, LP (“BNO”) and the General Risks of the Offering (terms not otherwise defined below have the meaning given to them in the prospectus).

BNO is an exchange-traded security whose shares may be purchased and sold on the NYSE Arca. 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.

The investment objective of BNO is for the daily changes in percentage terms of its shares’ per share net asset value (“NAV”) to reflect the daily changes in percentage terms of the spot price of Brent crude oil, as measured by the daily changes in the price of a specified short-term futures contract on Brent crude oil called the “Benchmark Futures Contract”, plus interest earned on BNO’s collateral holdings, less BNO’s expenses.

BNO seeks to achieve its investment objective by investing so that the average daily percentage change in BNO’s NAV for any period of 30 successive valuation days will be within plus/minus 10 percent (10%) of the average daily percentage changes in the price of the Benchmark Futures Contract over the same period.

Past performance of BNO or the Benchmark Futures Contract is not necessarily indicative of future results. Therefore, past performance of BNO or the Benchmark Futures Contract should not be relied upon in deciding whether to buy shares of BNO.

BNO is not actively managed by conventional methods. Accordingly, if BNO’s investments in Crude Oil Interests are declining in value, BNO will not close out such positions except in connection with paying the proceeds to an Authorized Participant upon the redemption of a basket or closing out its positions in connection with the monthly change in the Benchmark Futures Contract or when BNO otherwise determines it would be appropriate to do so, e.g., due to regulatory requirements or risk mitigation measures, or to avoid BNO becoming leveraged, and it reinvests the proceeds in new Futures Contracts and Other Crude Oil-Related Investments to the extent possible. USCF will seek to cause the NAV of BNO’s shares to track the Benchmark Futures Contract during periods in which its price is flat or declining as well as when the price is rising.

BNO’s ability to invest in the Benchmark Futures Contract could be limited as a result of any or all of the following: evolving market conditions, a change in regulatory accountability levels and position limits imposed on BNO with respect to its investment in Futures Contracts, risk mitigation measures taken by market participants with respect to BNO acquiring additional Futures Contracts, or BNO selling additional shares.

An investment in BNO involves investment risk similar to a direct investment in Futures Contracts and Other Crude Oil-Related Investments, but it is not a proxy for investing in the oil markets. Investing in BNO also involves correlation risk, or the risk that investors purchasing shares to hedge against movements in the price of crude oil will have an efficient hedge only if the price they pay for their shares closely correlates with the price of Brent crude oil. In addition to investment risk and correlation risk, an investment in BNO involves tax risks, OTC risks, and other risks. A more extensive discussion of the risks associated with investing directly or indirectly in BNO, appears in the prospectus.

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 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:

  • The daily changes in the price of BNO’s shares on the NYSE Arca on a percentage basis do not closely track the daily changes in the spot price of Brent crude oil on a percentage basis.
  • The price of BNO shares traded on the NYSE Arca does not correlate closely with the value of BNO’s NAV.
  • Changes in BNO's NAV do not correlate with changes in the price of the Benchmark Future Contract.
  • Changes in the price of the Benchmark Futures Contract do not closely correlate with the changes in the cash or spot price of Brent 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 BNO’s 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 Brent crude oil price indices’ total returns.

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, 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 Brent 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 Brent crude oil prices the value of the benchmark contract would tend to rise as it approaches expiration. Conversely, in the event of a Brent 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. When compared to total return of other price indices, such as the spot price of Brent crude oil, the impact of backwardation and contango may cause the total return of BNO’s per share NAV to vary significantly. Moreover, absent the impact of rising or falling oil prices, a prolonged period of contango could have a significant negative impact on BNO’s per share NAV and total return and investors could lose part or all of their investment.

There are present and potential future conflicts of interest in BNO’s structure and operation you should consider before you purchase shares. If the General Partner is not able to resolve these conflicts of interest adequately, it may impact the ability of BNO and the other funds managed by the General Partner to meet their investment objectives. The General Partner’s officers, directors and employees, do not devote their time exclusively to BNO. These persons are directors, officers or employees of other entities which may compete with BNO for their services. They could have a conflict between their responsibilities to BNO and to those other entities. The General Partner has sole current authority to manage the investments and operations of BNO, and this may allow it to act in a way that furthers its own interests which may create a conflict with your best interests. The General Partner may have a conflict of interest to the extent that its trading decisions for BNO may be influenced by the effect they would have on the other funds it manages. In addition, the General Partner is required to indemnify its officers and directors, if the need arises, which will cause the General Partner’s assets to decrease.

  • You have no rights to participate in the management of BNO and 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 has not leveraged, and does not intend to leverage, its assets through borrowings or otherwise, and makes its investments accordingly. Consistent with the foregoing, BNO’s announced investment intentions, and any changes thereto, will take into account the need for BNO to make permitted investments that also allow it to maintain adequate liquidity to meet its margin and collateral requirements and to avoid, to the extent reasonably possible, BNO becoming leveraged. If market conditions require it, these risk reduction procedures may occur on short notice if they occur other than during a roll or rebalance period.
  • BNO may also invest in Other Crude Oil-Related Investments, many of which are negotiated over-the-counter 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.

UNG - United States Natural Gas Fund

An investment in USO can be adversely impacted by various factors as disclosed in USO’s current prospectus, including disruptions in the markets for crude oil and regulatory and other limitations imposed on USO’s positions in the oil markets and other oil-related investments, such as the events that occurred during Spring of 2020. THE USO PROSPECTUS DESCRIBES THESE RISKS AND OTHER MATERIAL RISKS. INVESTORS SHOULD CAREFULLY READ THE USO PROSPECTUS AND CONSIDER ALL OF THE RISK FACTORS DESCRIBED THEREIN BEFORE MAKING AN INVESTMENT DECISION WITH RESPECT TO USO SHARES. USO’S CURRENT PROSPECTUS CAN BE FOUND HERE, AND USO’S CURRENT AND PERIODIC REPORTS FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION INCORPORATED THEREIN CAN BE FOUND HERE.

Description of the United States Natural Gas Fund, LP and the General Risks of the Offering (terms not otherwise defined below have the meaning given to them in the prospectus).

The United States Natural Gas Fund, LP (“UNG”) is an exchange-traded security whose shares may be purchased and sold on the NYSE Arca. 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.

The investment objective of UNG is for the daily changes in percentage terms of its shares’ per share net asset value (“NAV”) to reflect the daily changes in percentage terms of the price of natural gas delivered at the Henry Hub, Louisiana, as measured by the daily changes in the price of a specified short-term futures contract called the “Benchmark Futures Contract”, plus interest earned on UNG’s collateral holdings, less UNG’s expenses.

UNG seeks to achieve its investment objective by investing so that the average daily percentage change in UNG’s NAV for any period of 30 successive valuation days will be within plus/minus ten percent (10%) of the average daily percentage change in the price of the Benchmark Futures Contract over the same period.

Past performance of UNG or the Benchmark Futures Contract is not necessarily indicative of future results. Therefore, past performance of UNG or the Benchmark Futures Contract should not be relied upon in deciding whether to buy shares of UNG.

UNG is not actively managed by conventional methods. Accordingly, if UNG’s investments in Natural Gas Interests are declining in value, in the ordinary course, UNG will not close out such positions except in connection with paying the proceeds to an Authorized Participant upon the redemption of a basket or closing out its positions in Futures Contracts and other permitted investments in connection with the monthly change in the Benchmark Futures Contract or when UNG otherwise determines it would be appropriate to do so, e.g., due to regulatory requirements or risk mitigation measures, or to avoid UNG becoming leveraged, and it reinvests the proceeds in new Futures Contracts or Other Natural Gas-Related Investments to the extent possible. USCF will seek to cause the NAV of UNG’s shares to track the Benchmark Futures Contract during periods in which its price is flat or declining as well as when the price is rising.

UNG’s ability to invest in the Benchmark Futures Contract could be limited as a result of any or all of the following: evolving market conditions, a change in regulatory accountability levels and position limits imposed on UNG with respect to its investment in Futures Contracts, risk mitigation measures taken by market participants, generally, including UNG, with respect to UNG acquiring additional Futures Contracts, or UNG selling additional shares.

An investment in UNG involves investment risk similar to a direct investment in Futures Contracts and Other Natural Gas-Related Investments, but it is not a proxy for trading directly in the natural gas markets. Investing in UNG also involves correlation risk, or the risk that investors purchasing shares to hedge against movements in the price of natural gas will have an efficient hedge only if the price they pay for their shares closely correlates with the price of natural gas. In addition to investment risk and correlation risk, an investment in UNG involves tax risks, OTC risks and other risks. A more extensive discussion of the risks associated with investing directly or indirectly in UNG, appears in the prospectus.

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 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 the risk of loss in natural gas-related transactions or as a way to indirectly invest in natural gas if the following were to occur:

  • The daily changes in the price of UNG’s shares on the NYSE Arca on a percentage basis will not closely track the daily changes in the spot price of natural gas on a percentage basis.
  • The price of shares traded on the NYSE Arca does not correlate closely with the value of UNG’s NAV.
  • The changes in UNG’s NAV do not correlate closely with the changes in the price of the Benchmark Futures Contract; or the changes in the price of the Benchmark Futures Contract do not closely correlate with the changes in the cash or spot price of natural gas.
  • Accountability levels, position limits, and daily price fluctuation limits set by the exchanges have the potential to cause tracking error, by limiting UNG’s investments, including the ability to fully invest in the Benchmark Futures Contract, 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 UNG’s NAV, as well as the degree to which its total return tracks other natural gas price indices’ total returns.

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

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. 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 contract would tend to decline as it approaches expiration. When compared to total return of other price indices, such as the spot price of natural gas, the impact of backwardation and contango may cause the total return of UNG’s per share NAV to vary significantly. Moreover, absent the impact of rising or falling natural gas prices, a prolonged period of contango could have a significant negative impact on UNG’s per share NAV and total return and investors could lose part or all of their investment.

There are present and potential future conflicts of interest in UNG’s structure and operation you should consider before you purchase shares. If the General Partner is not able to resolve these conflicts of interest adequately, it may impact the ability of UNG and the other funds managed by the General Partner to meet their investment objectives. The General Partner’s officers, directors and employees, do not devote their time exclusively to UNG. These persons are directors, officers or employees of other entities which may compete with UNG for their services. They could have a conflict between their responsibilities to UNG and to those other entities. The General Partner has sole current authority to manage the investments and operations of UNG, and this may allow it to act in a way that furthers its own interests which may create a conflict with your best interests. The General Partner may have a conflict of interest to the extent that its trading decisions for UNG may be influenced by the effect they would have on the other funds it manages. In addition, the General Partner is required to indemnify its officers and directors, if the need arises, which will cause the General Partner’s assets to decrease.

  • 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 has not leveraged, and does not intend to leverage, its assets through borrowings or otherwise, and makes its investments accordingly. Consistent with the foregoing, UNG’s announced investment intentions, and any changes thereto, will take into account the need for UNG to make permitted investments that also allow it to maintain adequate liquidity to meet its margin and collateral requirements and to avoid, to the extent reasonably possible, UNG becoming leveraged. If market conditions require it, these risk reduction procedures, including changes to UNG’s investments, may occur on short notice if they occur other than during a roll or rebalance period.
  • UNG may also invest in Other Natural Gas-Related Investments, many of which are negotiated over-the-counter 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.

UNL - United States 12 Month Natural Gas Fund

An investment in USO can be adversely impacted by various factors as disclosed in USO’s current prospectus, including disruptions in the markets for crude oil and regulatory and other limitations imposed on USO’s positions in the oil markets and other oil-related investments, such as the events that occurred during Spring of 2020. THE USO PROSPECTUS DESCRIBES THESE RISKS AND OTHER MATERIAL RISKS. INVESTORS SHOULD CAREFULLY READ THE USO PROSPECTUS AND CONSIDER ALL OF THE RISK FACTORS DESCRIBED THEREIN BEFORE MAKING AN INVESTMENT DECISION WITH RESPECT TO USO SHARES. USO’S CURRENT PROSPECTUS CAN BE FOUND HERE, AND USO’S CURRENT AND PERIODIC REPORTS FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION INCORPORATED THEREIN CAN BE FOUND HERE.

Description of the United States 12 Month Natural Gas Fund, LP and the General Risks of the Offering (terms not otherwise defined below have the meaning given to them in the prospectus).

The United States 12 Month Natural Gas Fund, LP (“UNL”) is an exchange-traded security whose shares may be purchased and sold on the NYSE Arca. 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.

The investment objective of UNL is for the daily changes in percentage terms of its shares’ per share net asset value (“NAV”) to reflect the daily changes in percentage terms of the price of natural gas delivered at the Henry Hub, Louisiana, as measured by the daily changes in the average of the prices of specified short-term futures contracts on natural gas called the “Benchmark Futures Contracts”, plus interest earned on UNL’s collateral holdings, less UNL’s expenses.

UNL seeks to achieve its investment objective by investing so that the average daily percentage change in UNL’s NAV for any period of 30 successive valuation days will be within plus/minus ten percent (10%) of the average daily percentage change in the price of the Benchmark Futures Contracts over the same period.

Past performance of UNL or the Benchmark Futures Contracts is not necessarily indicative of future results. Therefore, past performance of UNL or the Benchmark Futures Contracts should not be relied upon in deciding whether to buy shares of UNL.

UNL is not actively managed by conventional methods. Accordingly, if UNL’s investments in Natural Gas Interests are declining in value, in the ordinary course, UNL will not close out such positions except in connection with paying the proceeds to an Authorized Participant upon the redemption of a basket or closing out its positions in Futures Contracts and other permitted investments in connection with the monthly change in the Benchmark Futures Contracts or when UNL otherwise determines it would be appropriate to do so, e.g., due to regulatory requirements or risk mitigation measures, or to avoid UNL becoming leveraged, and it reinvests the proceeds in new Futures Contracts or Other Natural Gas-Related Investments to the extent possible. USCF will seek to cause the NAV of UNL’s shares to track the Benchmark Futures Contracts during periods in which its price is flat or declining as well as when the price is rising.

UNL’s ability to invest in the Benchmark Futures Contracts could be limited as a result of any or all of the following: evolving market conditions, a change in regulatory accountability levels and position limits imposed on UNL with respect to its investment in Futures Contracts, mitigation measures taken by market participants, generally, including UNL, with respect to UNL acquiring additional Futures Contracts, or UNL selling additional shares.

An investment in UNL involves investment risk similar to a direct investment in Natural Gas Interests. An investment in UNL also involves investment risk similar to a direct investment in Futures Contracts and Other Natural Gas-Related Investments, and correlation risk, or the risk that investors purchasing shares to hedge against movements in the price of natural gas will have an efficient hedge only if the price they pay for their shares closely correlates with the price of natural gas. In addition to investment risk and correlation risk, an investment UNL involves tax risks, OTC and other risks. A more extensive discussion of the risks associated with investing directly or indirectly in UNL, appears in the prospectus.

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 shareholders. You should not invest in UNL if you will need cash distributions from UNL to pay taxes on your share of income and gains of UNL, if any, or for any other reason.

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

  • The daily changes in the price of UNL’s shares on the NYSE Arca on a percentage basis will not closely track the daily changes in the spot price of natural gas on a percentage basis.
  • The price of shares traded on the NYSE Arca does not correlate closely with the value of UNL’s NAV.
  • The changes in UNL's NAV do not correlate closely with the changes in the average price of the Benchmark Futures Contracts.
  • The changes in the average price of the Benchmark Futures Contracts do not closely correlate with the changes in the cash or spot price of natural gas.
  • Accountability levels, position limits, and daily price fluctuation limits set by the exchanges have the potential to cause tracking error, by limiting UNL’s investments, including its ability to fully invest in the Benchmark Futures Contracts, which could cause the price of shares to substantially vary from the price of the Benchmark Futures Contracts.

UNL’s Benchmark Futures Contracts consist of the near month contract to expire and the futures contracts for the 11 following months, until the near month contract is within two weeks of expiration, at which time the Benchmark Futures Contracts are changed over a one day period to consist of the next month contract to expire and the 11 following months of futures contracts. 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 Futures Contracts would tend to rise as it approaches expiration. 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 contracts would tend to decline as it approaches expiration. When compared to total return of other price indices, such as the spot price of natural gas, the impact of backwardation and contango may cause the total return of UNL’s per share NAV to vary significantly. Moreover, absent the impact of rising or falling natural gas prices, a prolonged period of contango could have a significant negative impact on UNL’s per share NAV and total return and investors could lose part or all of their investment.

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

USCF believes that holding futures contracts whose expiration dates are spread out over a 12-month period of time will cause the total return of such a portfolio to vary compared to a portfolio that holds only a single month’s contract (such as the near month contract). In particular, USCF believes that the total return of a portfolio holding contracts with a range of expiration months will be impacted differently by the price relationship between different contract months of the same commodity future compared to the total return of a portfolio consisting of the near month contract. For example, in cases in which the near month contract’s price is higher than the price of contracts that expire later in time (a situation known as “backwardation” in the futures markets), then absent the impact of the overall movement in natural gas prices, the value of the near month contract would tend to rise as it approaches expiration. Conversely, in cases in which the near month contract’s price is lower than the price of contracts that expire later in time (a situation known as “contango” in the futures markets), then absent the impact of the overall movement in natural gas prices, the value of the near month contract would tend to decline as it approaches expiration. The total return of a portfolio that owned the near month contract and “rolled” forward each month by selling the near month contract as it approached expiration and purchasing the next month contract to expire would be positively impacted by a backwardation market, and negatively impacted by a contango market. Depending on the exact price relationship of the different month’s prices, portfolio expenses, and the overall movement of natural gas prices, the impact of backwardation and contango could have a major impact on the total return of such a portfolio over time. USCF believes that based on historical evidence, a portfolio that held futures contracts with a range of expiration dates spread out over a 12 month period of time would typically be impacted less by the positive effect of backwardation and the negative effect of contango compared to a portfolio that held contracts of a single near month. As a result, absent the impact of any other factors, a portfolio of 12 different monthly contracts would tend to have a lower return than a near month only portfolio in a backwardation market and a higher total return in a contango market. However, there can be no assurance that such historical relationships would provide the same or similar results in the future.

There are present and potential future conflicts of interest in UNL’s structure and operation you should consider before you purchase shares. If the General Partner is not able to resolve these conflicts of interest adequately, it may impact the ability of UNL and the other funds managed by the General Partner to meet their investment objectives. The General Partner’s officers, directors and employees, do not devote their time exclusively to UNL. These persons are directors, officers or employees of other entities which may compete with UNL for their services. They could have a conflict between their responsibilities to UNL and to those other entities. The General Partner has sole current authority to manage the investments and operations of UNL, and this may allow it to act in a way that furthers its own interests which may create a conflict with your best interests. The General Partner may have a conflict of interest to the extent that its trading decisions for UNL may be influenced by the effect they would have on the other funds it manages. In addition, the General Partner is required to indemnify its officers and directors, if the need arises, which will cause the General Partner’s assets to decrease.

  • You have no rights to participate in the management of UNL and 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 has not leveraged, and does not intend to leverage, its assets through borrowings or otherwise, and makes its investments accordingly. Consistent with the foregoing, UNL’s announced investment intentions, and any changes thereto, will take into account the need for UNL to make permitted investments that also allow it to maintain adequate liquidity to meet its margin and collateral requirements and to avoid, to the extent reasonably possible, UNL becoming leveraged. If market conditions require it, these risk reduction procedures, including changes to UNL’s investments, may occur on short notice if they occur other than during a roll or rebalance period.
  • UNL may also invest in Other Natural Gas-Related Investments, many of which are negotiated over-the-counter 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.

UGA - United States Gasoline Fund

An investment in USO can be adversely impacted by various factors as disclosed in USO’s current prospectus, including disruptions in the markets for crude oil and regulatory and other limitations imposed on USO’s positions in the oil markets and other oil-related investments, such as the events that occurred during Spring of 2020. THE USO PROSPECTUS DESCRIBES THESE RISKS AND OTHER MATERIAL RISKS. INVESTORS SHOULD CAREFULLY READ THE USO PROSPECTUS AND CONSIDER ALL OF THE RISK FACTORS DESCRIBED THEREIN BEFORE MAKING AN INVESTMENT DECISION WITH RESPECT TO USO SHARES. USO’S CURRENT PROSPECTUS CAN BE FOUND HERE, AND USO’S CURRENT AND PERIODIC REPORTS FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION INCORPORATED THEREIN CAN BE FOUND HERE.

Description of the United States Gasoline Fund, LP and the General Risks of the Offering (terms not otherwise defined below have the meaning given to them in the prospectus).

The United States Gasoline Fund, LP (“UGA") is an exchange-traded security whose shares may be purchased and sold on the NYSE Arca. 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.

The investment objective of UGA is for the daily changes in percentage terms of its shares’ per share net asset value (“NAV”) to reflect the daily changes in percentage terms of the spot price of gasoline (also known as reformulated gasoline blendstock for oxygen blending, or “RBOB”), for delivery to the New York harbor, as measured by the daily changes in the price of a specified short-term futures contract on gasoline called the “Benchmark Futures Contract,” plus interest earned on UGA’s collateral holdings, less UGA’s expenses.

UGA seeks to achieve its investment objective by investing so that the average daily percentage change in UGA’s NAV for any period of 30 successive valuation days will be within plus/minus ten percent (10%) of the average daily percentage change in the price of the Benchmark Futures Contract over the same period.

Past performance of UGA or the Benchmark Futures Contract is not necessarily indicative of future results. Therefore, past performance of UGA or the Benchmark Futures Contract should not be relied upon in deciding whether to buy shares of UGA.

UGA is not actively managed by conventional methods. Accordingly, if UGA’s investments in Gasoline Interests are declining in value, in the ordinary course, UGA will not close out such positions except in connection with paying the proceeds to an Authorized Participant upon the redemption of a basket or closing out its positions in Futures Contracts and other permitted investments (i) in connection with the monthly change in the Benchmark Futures Contract or when UGA otherwise determines it would be appropriate to do so, e.g., due to regulatory requirements or risk mitigation measures, or to avoid UGA becoming leveraged, and it reinvests the proceeds in new Futures Contracts or Other Gasoline-Related Investments to the extent possible. USCF will seek to cause the NAV of UGA’s shares to track the Benchmark Futures Contract during periods in which its price is flat or declining as well as when the price is rising.

UGA’s ability to invest in the Benchmark Futures Contract could be limited as a result of any or all of the following: evolving market conditions, a change in regulatory accountability levels and position limits imposed on UGA with respect to its investment in Futures Contracts, risk mitigation measures taken by market participants, generally, including UGA, with respect to UGA acquiring additional Futures Contracts, or UGA selling additional shares.

An investment in UGA involves investment risk similar to a direct investment in Futures Contracts and Other Gasoline-Related Investments, but it is not a proxy for trading directly in gasoline markets. Investing in UGA also involves correlation risk, or the risk that investors purchasing shares to hedge against movements in the price of unleaded gasoline will have an efficient hedge only if the price they pay for their shares closely correlates with the price of unleaded gasoline. In addition to investment risk and correlation risk, an investment in UGA involves tax risks, OTC risks, and other risks. A more extensive discussion of the risks associated with investing directly or indirectly in UGA, appears in the prospectus.

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 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:

  • The daily changes in the price of UGA’s shares on the NYSE Arca, on a percentage basis, will not closely track the daily changes in the spot price of gasoline on a percentage basis.
  • The price of shares traded on the NYSE Arca does not correlate closely with the value of UGA’s NAV.
  • The changes in UGA’s NAV do not correlate closely with the changes in the price of the Benchmark Futures Contract.
  • The changes in the price of the Benchmark Futures Contract do not closely correlate with the changes in the cash or spot price of gasoline.
  • Accountability levels, position limits, and daily price fluctuation limits set by the exchanges have the potential to cause tracking error, by limiting UGA’s investments, including its ability to fully invest in the Benchmark Futures Contract, 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 UGA’s NAV, as well as the degree to which its total return tracks other gasoline price indices’ total returns.

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

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, over a one 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 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. 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. When compared to total return of other price indices, such as the spot price of gasoline, the impact of backwardation and contango may cause the total return of UGA’s per share NAV to vary significantly. Moreover, absent the impact of rising or falling gasoline prices, a prolonged period of contango could have a significant negative impact on UGA’s per share NAV and total return and investors could lose part or all of their investment.

There are present and potential future conflicts of interest in UGA’s structure and operation you should consider before you purchase shares. If the General Partner is not able to resolve these conflicts of interest adequately, it may impact the ability of UGA and the other funds managed by the General Partner to meet their investment objectives. The General Partner’s officers, directors and employees, do not devote their time exclusively to UGA. These persons are directors, officers or employees of other entities which may compete with UGA for their services. They could have a conflict between their responsibilities to UGA and to those other entities. The General Partner has sole current authority to manage the investments and operations of UGA, and this may allow it to act in a way that furthers its own interests which may create a conflict with your best interests. The General Partner may have a conflict of interest to the extent that its trading decisions for UGA may be influenced by the effect they would have on the other funds it manages. In addition, the General Partner is required to indemnify its officers and directors, if the need arises, which will cause the General Partner’s assets to decrease.

  • You have no rights to participate in the management of UGA and 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 has not leveraged, and does not intend to leverage, its assets through borrowings or otherwise, and makes its investments accordingly. Consistent with the foregoing, UGA’s announced investment intentions, and any changes thereto, will take into account the need for UGA to make permitted investments that also allow it to maintain adequate liquidity to meet its margin and collateral requirements and to avoid, to the extent reasonably possible, UGA becoming leveraged. If market conditions require it, these risk reduction procedures may occur on short notice if they occur other than during a roll or rebalance period.
  • UGA may also invest in Other Gasoline-Related Investments, many of which are over-the-counter 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.

CPER - United States Copper Index Fund

An investment in USO can be adversely impacted by various factors as disclosed in USO’s current prospectus, including disruptions in the markets for crude oil and regulatory and other limitations imposed on USO’s positions in the oil markets and other oil-related investments, such as the events that occurred during Spring of 2020. THE USO PROSPECTUS DESCRIBES THESE RISKS AND OTHER MATERIAL RISKS. INVESTORS SHOULD CAREFULLY READ THE USO PROSPECTUS AND CONSIDER ALL OF THE RISK FACTORS DESCRIBED THEREIN BEFORE MAKING AN INVESTMENT DECISION WITH RESPECT TO USO SHARES. USO’S CURRENT PROSPECTUS CAN BE FOUND HERE, AND USO’S CURRENT AND PERIODIC REPORTS FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION INCORPORATED THEREIN CAN BE FOUND HERE.

Description of United States Copper Index Fund (“CPER”), and the General Risks of the Offering (terms not otherwise defined below have the meaning given to them in the prospectus).

CPER is an exchange-traded security whose shares may be purchased and sold on the NYSE Arca. 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.

The investment objective of CPER is for the daily changes in percentage terms of its shares’ per share net asset value (“NAV”) to reflect the daily changes in percentage terms of the SummerHaven Copper Index Total ReturnSM (the “SCI”), less CPER’s expenses. The SCI is designed to reflect the performance of the investment returns from a portfolio of copper futures contracts on the Commodity Exchange, Inc. exchange (“COMEX”). The SCI is owned and maintained by SummerHaven Index Management, LLC (“SHIM”) and calculated and published by the NYSE Arca. The SCI is comprised of either one or three Eligible Copper Futures Contracts that are selected on a monthly basis based on quantitative formulas relating to the prices of the Eligible Copper Futures Contracts developed by SHIM. The Eligible Copper Futures Contracts that at any given time make up the SCI are referred to herein as “Benchmark Component Copper Futures Contracts.

CPER seeks to achieve its investment objective by investing so that the average daily percentage change in CPER’s NAV for any period of 30 successive valuation days will be within plus/minus 10 percent (10%) of the average daily percentage change in the price of the Benchmark Component Copper Futures Contracts over the same period.

Past performance of CPER or the Benchmark Component Copper Futures Contract is not necessarily indicative of future results. Therefore, past performance of CPER or the Benchmark Futures Contract should not be relied upon in deciding whether to buy shares of CPER.

CPER is not actively managed by conventional methods. Accordingly, if CPER’s investments in Copper Interests are declining in value, CPER will not close out such positions except in connection with paying the proceeds to an Authorized Participant upon the redemption of a basket or closing out futures positions in connection with the monthly change in the Benchmark Component Copper Futures Contracts. USCF will seek to cause the NAV of CPER’s shares to track the SCI during periods in which the price is flat or declining as well as when the price is rising. CPER’s ability to invest in the Benchmark Component Futures Contract could be limited as a result of any or all of the following: evolving market conditions, a change in regulatory accountability levels and position limits imposed on CPER with respect to its investment in Futures Contracts, risk mitigation measures taken by market participants with respect to CPER acquiring additional Futures Contracts, or CPER selling additional shares.

An investment in CPER involves investment risk similar to a direct investment in Eligible Copper Futures Contracts and Other Copper-Related Investments. An investment in CPER also involves correlation risk, which is the risk that investors purchasing shares to hedge against movements in the price of copper will have an efficient hedge only if the price they pay for their shares closely correlates with the price of the copper. In addition to investment risk and correlation risk, an investment in CPER involves tax risks, OTC risks and other risks. A more extensive discussion of the risks associated with investing directly or indirectly in CPER appears in the prospectus.

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, CPER generally does not 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.

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 daily changes in the price of CPER’s shares on the NYSE Arca on a percentage basis, do not closely track the daily changes in the spot prices of the commodities comprising the SCI on a percentage basis.
  • The price of CPER’s shares traded on the NYSE Arca does not correlate closely with the value of CPER’s NAV.
  • Changes in CPER’s NAV do not correlate closely with the changes in the price of the Benchmark Component Copper Futures Contracts.
  • Changes in the price of the Benchmark Component Copper Futures Contracts do not closely correlate with the changes in the cash or spot price of copper.
  • 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 CPER’s shares to substantially vary from the price of the SCI.

The price relationship between the SCI 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 SCI.

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

The design of SCI is such that every month it is made up of different Benchmark Component Copper Futures Contracts, and CPER’s investment must be rebalanced on an ongoing basis to reflect the changing composition of the SCI. In the event of a copper 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 copper prices, the value of the SCI 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 copper 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 copper prices, the value of the SCI 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 copper comprising the SCI. In the event of a prolonged period of contango, and absent the impact of rising or falling copper prices, this could have a significant negative impact on CPER’s NAV and total return and investors could lose part or all of their investment.

Investors cannot be assured that the licensing agreement between SHIM and USCF for use of the SCI will continue for any length of time. Should the licensing agreement between SHIM and USCF for use of the SCI be terminated, USCF will be required to find a replacement index, which may have an adverse effect on CPER.

SummerHaven Investment Management, LLC is the commodity trading advisor for CPER. Investors cannot be assured that SummerHaven will be willing or able to continue to service CPER for any length of time. SummerHaven was formed for the purpose of providing investment advisory services, and provides these services to CPER on a contractual basis pursuant to an advisory agreement. If SummerHaven discontinues its activities on behalf of CPER, CPER may be adversely affected.

There are present and potential future conflicts of interest in CPER’s structure and operation you should consider before you purchase shares. If the Sponsor is not able to resolve these conflicts of interest adequately, it may impact the ability of CPER and the other funds managed by the Sponsor to meet their investment objectives. The Sponsor’s officers, directors and employees, do not devote their time exclusively to CPER. These persons are directors, officers or employees of other entities which may compete with CPER for their services. They could have a conflict between their responsibilities to CPER and to those other entities. The Sponsor has sole current authority to manage the investments and operations of CPER, and this may allow it to act in a way that furthers its own interests which may create a conflict with your best interests. The Sponsor may have a conflict of interest to the extent that its trading decisions for CPER may be influenced by the effect they would have on the other funds it manages. In addition, the Sponsor is required to indemnify its officers and directors, if the need arises, which will cause the Sponsor’s assets to decrease.

  • You have no rights to participate in the management of CPER and 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 has not leveraged, and does not intend to leverage, its assets through borrowings or otherwise, and makes its investments accordingly. Consistent with the foregoing, CPER’s announced investment intentions, and any changes thereto, will take into account the need for CPER to make permitted investments that also allow it to maintain adequate liquidity to meet its margin and collateral requirements and to avoid, to the extent reasonably possible, CPER becoming leveraged. If market conditions require it, these risk reduction procedures, including changes to CPER’s investments, may occur on short notice if they occur other than during a roll or rebalance period.
  • CPER may also invest in Other Copper-Related Investments, many of which are negotiated over-the-counter contracts that are not as liquid as Eligible Copper Futures Contracts and expose CPER to credit risk that its counterparty may not be able to satisfy its obligations to CPER.

SDCI - USCF SummerHaven Dynamic Commodity Strategy No K-1 Fund

An investment in USO can be adversely impacted by various factors as disclosed in USO’s current prospectus, including disruptions in the markets for crude oil and regulatory and other limitations imposed on USO’s positions in the oil markets and other oil-related investments, such as the events that occurred during Spring of 2020. THE USO PROSPECTUS DESCRIBES THESE RISKS AND OTHER MATERIAL RISKS. INVESTORS SHOULD CAREFULLY READ THE USO PROSPECTUS AND CONSIDER ALL OF THE RISK FACTORS DESCRIBED THEREIN BEFORE MAKING AN INVESTMENT DECISION WITH RESPECT TO USO SHARES. USO’S CURRENT PROSPECTUS CAN BE FOUND HERE, AND USO’S CURRENT AND PERIODIC REPORTS FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION INCORPORATED THEREIN CAN BE FOUND HERE.

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 commodities and other financial instruments 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 may fluctuate significantly due to market risk. 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.

Non-Diversification Risk. The Fund will pursue its investment strategy without regard to whether its investment strategy presents adequate diversification among individual holdings. If there are adverse changes in the financial condition of a particular investment, the resulting adverse impact on the performance of the Fund may be more pronounced than if the Fund were more diversified.

Correlation Risk. The impact of backwardation and contango may cause the total return of the Fund to vary significantly from the total return of price references such as the spot prices of the commodities comprising the SDCITR. It is impossible to predict with any degree of certainty whether backwardation or contango will occur in the future.

Derivatives Risk. The value of a derivative instrument, such as the Fund’s investments in Commodity Interests, depends largely on (and is derived from) an underlying asset (or a reference rate or index). Derivatives create leverage risk because they do not require payment up front equal to the economic exposure created by owning the derivative. As a result, an adverse change in the value of the underlying asset of a derivative could result in the Fund sustaining a loss that is substantially greater than the amount invested in the derivative, which may make the Fund’s returns more volatile and increase the risk of loss. The Fund may not be able to close out a derivative transaction at a favorable time or price. Derivatives may also be harder to value, less tax efficient, and subject to changing government regulation that could impact the Fund’s ability to use certain derivatives or their cost. Also, derivatives used to gain or limit exposure to a particular market segment may not provide the expected benefits, particularly during adverse market conditions. These risks are greater for the Fund than most other exchange traded funds (“ETFs”) because the Fund will implement its investment strategy primarily through investments in Commodity Interests, which are derivative instruments.

Futures Risk. Futures are standardized, exchange-traded contracts that obligate a purchaser to take delivery, and a seller to make delivery, of a specific amount of an asset at a specified future ate at a specified price. An option to a futures contract gives the purchaser the right, in exchange for a premium, to assume a position in a futures contract at a specified exercise price during the term of the option. The primary risks associated with the use of futures contracts and options are: (a) the imperfect correlation between the change in market value of the instruments held by the Fund and the price of the futures contract or option; (b) the possible lack of a liquid secondary market for a futures contract and the resulting inability to close a futures contract when desired; (c) losses caused by unanticipated market movements, which can, in certain instances, be unlimited; and (d) the possibility that the counterparty will default in the performance of its obligations.

Swaps Risk. Swap agreements are two-party contracts entered into for ranging periods of time. In a standard “swap” transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments, which can be adjusted for an interest factor. Swap agreements involve the risk that the party with whom the Fund has entered into the swap will default on its obligation to pay the Fund and the risk that the Fund will not be able to meet its obligations to pay the other party to the agreement. Swap agreements may also be illiquid, and in such cases, the Fund may have difficulty closing out its position.

Commodities Risk. Exposure to the commodities markets through investments in Commodity Interests may subject the Fund to greater volatility than investments in traditional securities. The risks and hazards that are inherent in commodity production may cause the price of commodities to fluctuate widely. Significant changes in the value of commodities may lead to volatility in the Fund’s NAV and market price.

Energy Commodities Risk. The prices of energy commodities are subject to national and global political events such as governmental regulation and intervention, price controls, and restrictions on production levels. Energy commodities have had significant price swings in recent years. Markets for various energy-related commodities can have significant volatility, and are subject to control or manipulation by large producers or purchasers.

Precious Metal Commodities Risk. The prices of precious metals may be influenced by macroeconomic conditions, including confidence in the global monetary system and the relative strength of various currencies, as well as demand in the industrial and jewelry sectors. Political events also influence the prices of precious metals. Prices are influenced by supplies of precious metals, which may be affected by sales by central banks and governmental agencies that hold large amounts of these metals, particularly gold.

Industrial Metal Commodities Risk. The prices of commodities comprising the industrial metals portion of the SDCITR are subject to a number of factors that can cause price fluctuations, including changes in the level of industrial activity; disruptions in mining, storing, and refining the metals; adjustments to inventory; variations in production costs; and regulatory compliance costs.

Grains and Soft Product Commodities Risk. The prices of commodities comprising the grains and softs sectors of the SDCITR are subject to a number of factors that can cause price fluctuations, including weather conditions, changes in government policies and trade agreements, planting decisions, and changes in demand.

Livestock Commodities Risk. The prices of commodities comprising the livestock sector of the SDCITR are subject to a number of factors that can cause price fluctuations, including weather conditions, disease and famine, changes in government policies, and changes in demand.

Commodities Tax Risk. The Fund intends to qualify as a regulated investment company (“RIC”) under subchapter M of the Internal Revenue Code (the “Code”). If it qualifies as a RIC and satisfies certain minimum distribution requirements, the Fund will not be subject to fund-level U.S. federal income tax on income and gains that it timely distributes to shareholders. To qualify as a RIC, the Fund must satisfy certain source-of-income requirements. As discussed above, the Fund intends to gain exposure to the commodities market primarily through its investment in the Subsidiary. The Fund believes based on current law that its taxable income from the Subsidiary will be qualifying income for purposes of the RIC source-of-income requirements. If the income of the Fund from the Subsidiary is treated as non-qualifying income, the Fund might fail to qualify as a RIC and be subject to federal income tax at the fund level. Such adverse effects could also, among other consequences, limit the Fund’s ability to pursue its investment strategy. The Fund seeks to manage its investments in the Subsidiary and in Commodity Interests as necessary to maintain its qualifications as a RIC.

Commodity Market Regulatory Risk. The commodities markets are subject to comprehensive statutes, regulations, and margin requirements. In addition, the CFTC and the Futures Exchanges are authorized to take extraordinary actions in the event of a market emergency, including, for example, the retroactive implementation of speculative position limits or higher margin requirements, the establishment of daily price limits, and the suspension of trading. The regulation of commodities transactions in the United States is a rapidly changing area of law and is subject to ongoing modification by governmental and judicial action. The effect of any future regulatory change on the Fund is impossible to predict, but it could be substantial and adverse.

Position Limits Risk. Accountability levels, position limits, and daily price fluctuation limits set by the Futures Exchanges and regulations imposed by the CFTC may prevent the Fund from trading certain futures contracts or employing its investment strategies, which could harm the performance of the Fund.

Treasuries Risk. The value of Treasuries generally moves inversely with movements in interest rates. The prices of longer maturity securities are generally subject to greater market fluctuations as a result of changes in interest rates. If the Fund is required to sell Treasuries or other U.S. government obligations at a price lower than the price at which they were acquired, the Fund will experience a loss.

Fixed Income Investment Risk. When the Fund invests in fixed income instruments, the value of the Fund’s investment will fluctuate with changes in interest rates. Typically, a rise in interest rates causes a decline in the value. Other risk factors associated with fixed income investments include credit risk (the debtor may default) and prepayment risk (the debtor may pay its obligation early, reducing the amount of interest payments).

Intermediary and Counterparty Risk. Futures and options contracts, swap agreements, and other forms of derivatives, as well as fixed income instruments, involve intermediaries or counterparties and therefore subject the Fund to the risk that an intermediary or counterparty could default on its obligations under an agreement, either through the intermediary’s or counterparty’s bankruptcy or general failure to perform its obligations. In the event of default, the Fund may not be able to recover its assets. Moreover, even if the Fund is able to recover some or all of its assets, such recovery could involve lengthy delays. During any such period, the Fund may have difficulty determining the value of its investments associated with the intermediary or counterparty, which in turn could result in the overstatement or understatement of the Fund’s NAV. This may negatively affect the Fund’s share price and may cause the Fund’s shares to trade at a premium or discount to NAV.

Non-U.S. Investment Risk. The Fund may invest in Commodity Interests traded on non-U.S. exchanges or enter into over-the-counter Commodity Interests with non-U.S. counterparties. Transactions on non-U.S. exchanges or with non-U.S. counterparties present greater risk to the extent that they are not subject to the same degree of regulation as their U.S. counterparts. Because certain of the Fund’s underlying investments trade in markets that are closed when the market in which the Fund’s shares are listed for trading is open, there may be changes between the investment’s last quote from the closed foreign market and the value of the investment during the Fund’s domestic trading day. This may result in differences between the market price of the Fund’s shares and the underlying value of the Fund’s shares.

Global Currency Exchange Rate Risk. The price of any non-U.S. Commodity Interest and, therefore, the potential profit and loss on such investment, may be affected by any variance in the foreign exchange rate between the time the order is placed and the time it is liquidated, offset, or exercised. As a result, changes in the value of the local currency relative to the U.S. dollar may cause losses to the Fund even if the Commodity Interest is profitable.

Liquidity Risk. The Fund may not always be able to liquidate its positions 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.

Subsidiary Investment Risk. By investing in the Subsidiary, the Fund will be indirectly exposed to the risks associated with the Subsidiary’s investments. There can be no assurance that the investment objective of the Subsidiary will be achieved. The Subsidiary is not registered under the 1940 Act and is not subject to all the investor protections of the 1940 Act. Thus, the Fund, as an investor in the Subsidiary, will not have all the protections afforded to investors in registered investment companies. Nonetheless, the Fund whollyowns and controls the Subsidiary, and the Fund and the Subsidiary are both managed by the Adviser, making it unlikely that the Subsidiary would take action contrary to the interests of the Fund and its shareholders. A shareholder’s cost of investing in the Fund may be higher because shareholders bear the expenses of the Subsidiary. In addition, changes in the laws of the United States and/or the Cayman Islands, under which the Fund and the Subsidiary are organized or incorporated, respectively, could result in the inability of the Fund or the Subsidiary to operate as described in this Prospectus and the Statement of Additional Information (“SAI”) and could negatively affect the Fund.

Cash Transaction Risk. Creation and redemption transactions are expected to generally settle through payments of cash and/or fixed income securities, which will cause the Fund to incur certain costs, such as brokerage costs, that it would not incur if it made in-kind redemptions.

Premium or Discount to NAV Risk. As with all 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 Fund’s shares 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 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.

The Fund currently intends to effect creations and redemptions principally for cash, rather than principally in-kind because of the nature of the Fund's investments. As such, investments in the Fund may be less tax efficient than investments in ETFs that create and redeem in-kind.

UMI - USCF Midstream Energy Income Fund

An investment in USO can be adversely impacted by various factors as disclosed in USO’s current prospectus, including disruptions in the markets for crude oil and regulatory and other limitations imposed on USO’s positions in the oil markets and other oil-related investments, such as the events that occurred during Spring of 2020. THE USO PROSPECTUS DESCRIBES THESE RISKS AND OTHER MATERIAL RISKS. INVESTORS SHOULD CAREFULLY READ THE USO PROSPECTUS AND CONSIDER ALL OF THE RISK FACTORS DESCRIBED THEREIN BEFORE MAKING AN INVESTMENT DECISION WITH RESPECT TO USO SHARES. USO’S CURRENT PROSPECTUS CAN BE FOUND HERE, AND USO’S CURRENT AND PERIODIC REPORTS FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION INCORPORATED THEREIN CAN BE FOUND HERE.

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

Energy Sector Risk. Energy markets can be significantly affected by fluctuations in energy prices and supply and demand of energy fuels. Because of its focus in this sector, the performance of the Fund is tied closely to and affected by developments in the energy sector. Because the Fund may invest up to 25% of its total assets in MLPs, generally in the energy sector, and may otherwise invest in the energy sector, the Fund is subject to energy sector risks. At times, the performance of securities of companies in the energy sector may lag the performance of other sectors or the broader market as a whole, and a downturn in the energy sector could have an adverse effect on the Fund’s performance. To the extent a significant portion of the Fund is invested in the energy sector, the Fund may present more risks than if it were more broadly diversified over numerous industries and sectors of the economy. At times, the performance of securities of companies in the energy sector may lag the performance of other sectors or the broader market as a whole.

Energy Infrastructure Companies Risk. Energy infrastructure companies, including MLPs, midstream energy C-corporations, and utility companies, are subject to risks specific to the energy and energy-related industries. This includes but is not limited to: fluctuations in commodity prices impacting the volume of energy commodities transported, processed, stored or distributed; reductions in volumes of crude oil, natural gas or other energy commodities being available for transporting, processing, storing or distributing; slowdowns in new construction and acquisitions limiting growth potential; reduced demand for oil, natural gas and petroleum products, particularly for a sustained period of time; increased supply of oil, natural gas and petroleum products; geopolitical risks and other shocks to supply and/or demand that could impact the prices of crude oil, natural gas or other energy commodities; depletion of crude oil, natural gas reserves or other commodities; rising interest rates resulting in higher costs of capital, increased operating costs; counterparties to contracts defaulting or going bankrupt; and an inability to execute acquisitions or expansion projects in a cost-effect manner; extreme weather events and environmental hazards; and threats of attack by terrorists on energy assets. Energy infrastructure companies may also face counterparty risk, such that long-term contracts may be declared void if the counterparty to those contracts enters bankruptcy proceedings. In addition, energy infrastructure companies are subject to significant federal, state and local government regulation in virtually every aspect of their operations, including how facilities are constructed, maintained and operated, environmental and safety controls, and the prices they may charge for products and services. Various governmental authorities have the power to enforce compliance with these regulations and the permits issued under them and violators are subject to administrative, civil and criminal penalties, including civil fines, injunctions or both. Stricter laws, regulations or enforcement policies could be enacted in the future which would likely increase compliance costs and may adversely affect the financial performance of energy infrastructure companies. Natural disasters, such as hurricanes in the Gulf of Mexico, also may impact the energy infrastructure companies. Certain energy infrastructure companies in the utilities industry are subject to the imposition of rate caps, increased competition due to deregulation, the difficulty in obtaining an adequate return on invested capital or in financing large construction projects, the limitations on operations and increased costs and delays attributable to environmental considerations, and the capital market’s ability to absorb utility debt. In addition, taxes, government regulation, international politics, price and supply fluctuations, volatile interest rates and energy conservation may cause difficulties for these companies. Such issuers have been experiencing certain of these problems in varying degrees.

Risks of Master Limited Partnerships. An investment in MLP units involves risks that differ from a similar investment in equity securities, such as common stock, of a corporation. As compared to common shareholders of a corporation, holders of MLP units have more limited control and limited rights to vote on matters affecting the partnership. Additionally, conflicts of interest may exist among common unit holders, subordinated unit holders and the general partner or managing member of an MLP; for example a conflict may arise as a result of incentive distribution payments. MLP common units can be affected by macro-economic factors and other factors unique to the partnership or company and the industry or industries in which the MLP operates. Certain MLP securities may trade in relatively low volumes due to their smaller capitalizations or other factors, which may cause them to have a high degree of price volatility and illiquidity. The structures of MLPs create certain other risks, including, for example, the risk that an MLP will generate insufficient cash flow to meet its current operating requirements, the risk that an MLP will issue additional securities or engage in other transactions that will have the effect of diluting the interests of existing investors, and risks related to the general partner’s right to require unit-holders to sell their common units at an undesirable time or price. On March 15, 2018, the Federal Energy Regulatory Commission (“FERC”) changed its long-standing tax allowance policy which no longer permits MLPs to include in their cost of service an income tax allowance. This has had a negative impact on the performance of some MLPs affected by this decision. This policy change and any similar policy changes in the future could adversely impact an MLP’s business, financial condition, results of operations and cash flows and ability to pay cash distributions or dividends.

Non-Diversification Risk. The Fund will pursue its investment strategy without regard to whether its investment strategy presents adequate diversification among individual holdings. If there are adverse changes in the financial condition of a particular investment or company, the resulting adverse impact on the performance of the Fund may be more pronounced than if the Fund were more diversified. Long-Term Objective; Not a Complete Investment Program. The Fund is intended for investors seeking a high level of income over the long term. The Fund is not meant to provide a vehicle for those who wish to exploit short-term swings in the stock market. An investment in shares of the Fund should not be considered a complete investment program. Each shareholder should take into account the Fund’s investment objectives as well as the shareholder’s other investments when considering an investment in the Fund.

Small Capitalization Risk. The Fund may invest in securities of MLPs and other issuers that have comparatively smaller capitalizations relative to issuers whose securities are included in major equity benchmark indices, which presents unique investment risks. These companies often have limited product lines, markets, distribution channels or financial resources, and the management of such companies may be dependent upon one or a few key people. The market movements of equity securities issued by MLPs and other issuers with smaller capitalizations may be more abrupt or erratic than the market movements of equity securities of larger, more established companies or the stock market in general.

Commodity Price Risk. Many of the issuers of securities in which the Fund invests, such as MLPs and other issuers, may be in industry sectors that may be affected by fluctuations in the prices of energy commodities, including, for example, natural gas, natural gas liquids, crude oil and coal. Fluctuations in energy commodity prices would impact directly companies that own such energy commodities and could impact indirectly companies that engage in transportation, storage, processing, distribution or marketing of such energy commodities. Fluctuations in energy commodity prices can result from changes in general economic conditions or political circumstances (especially of key energy producing and consuming countries); market conditions; weather patterns; domestic production levels; volume of imports; energy conservation; domestic and foreign governmental regulation; international politics; policies of the Organization of Petroleum Exporting Countries (OPEC); taxation; tariffs; and the availability and costs of local, intrastate and interstate transportation methods.

Management Risk. The Fund is subject to management risk because its portfolio will be actively managed. The Adviser and the Sub-Adviser will apply investment techniques and risk analyses in making investment decisions for the Fund, but there can be no guarantee that these will produce the desired results. The Fund, as a registered closed-end investment company, is subject to regulations under the Investment Company Act of 1940, as amended (the “1940 Act”). These regulations are complex and often subject to varying degrees of formal and information interpretation by courts, the SEC and the SEC staff, and at times these interpretations may be at odds with each other.

Market Risk. Investing in the Fund involves market risk, which is the risk that the securities held by the Fund will fall in market value due to adverse market and economic conditions, perceptions regarding the industries in which the issuers of securities held by the Fund participate and the particular circumstances and performance of particular companies whose securities the Fund holds. An investment in the Fund represents an indirect economic stake in the securities owned by the Fund, which are for the most part traded on securities exchanges or in the over-the-counter markets. The market value of these securities, like other market investments, may move up or down, sometimes rapidly and unpredictably. The net asset value of the Fund may at any point in time be worth less than the amount at the time the shareholder invested in the Fund, even after taking into account any reinvestment of distributions. The trading prices of financial instruments fluctuate, sometimes rapidly and unpredictably, in response to a variety of factors. These factors include events impacting a specific market segment or the entire market, including global pandemics, such as the recent outbreak of COVID-19. Aggressive measures have been taken worldwide in response to the COVID-19 pandemic by (1) governments, including closing of borders, restricting international and domestic travel, and the imposition of prolonged quarantines of large populations, and (2) businesses, including changes to operations and reducing staff. COVID-19, together with the aggressive measures taken in response, have contributed to increased volatility in global markets and will likely affect certain countries, companies, industries and market sectors more dramatically than others. The COVID-19 pandemic has had, and any other outbreak of an infectious disease, pandemic, or other serious public health concern could have, a significant negative impact on economic and market conditions and could trigger a prolonged period of global economic slowdown. The market value of the Fund’s portfolio holdings can be volatile and may change quickly as a result of COVID-19. The Fund’s 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.

Liquidity Risk. The Fund may not always be able to liquidate its positions 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.

New/Small Fund Risk. Since the Fund is new, there can be no assurance that the Fund will grow to or maintain an economically viable size. A new or smaller fund’s performance may not represent how the fund is expected to or may perform in the long term if and when it becomes larger. Investment positions may have a disproportionate impact (negative or positive) on performance in a new and smaller fund, such as the Fund. If a new or smaller fund were to fail to successfully implement its investment strategies or achieve its investment objectives, performance may be negatively impacted, and any resulting liquidation could create negative transaction costs for the fund and tax consequences for investors.

Large Shareholder Risk. Certain shareholders may from time to time own a substantial amount of the Fund’s shares. In addition, a third party investor, the Adviser or an affiliate of the Adviser, an authorized participant, a lead market maker, or another entity (i.e., a seed investor) may invest in the Fund and hold its investment solely to facilitate commencement of the Fund or to facilitate the Fund’s achieving a specified size or scale. Any such investment may be held for a limited period of time. There can be no assurance that any large shareholder would not redeem its investment, that the size of the Fund would be maintained at such levels or that the Fund would continue to meet applicable listing requirements. Redemptions by large shareholders could have a significant negative impact on the Fund, including on the Fund’s liquidity. In addition, transactions by large shareholders may account for a large percentage of the trading volume on [NYSE Arca] and may, therefore, have a material upward or downward effect on the market price of the shares.

Premium or Discount to NAV Risk. As with all 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. Market makers are under no obligation to make a market in the Fund’s shares, and authorized participants are not obligated to submit purchase or redemption orders for Creation Units. In times of market stress, market makers or other authorized participants may step away from their respective roles in making a market in shares of the ETF and in executing purchase or redemption orders, and this could, in turn, lead to variances between the market price of the Fund’s shares and the underlying value of those shares. Trading in shares may be halted due to market conditions or for reasons that, in the view of [NYSE Arca], make trading in shares inadvisable. In addition, trading in shares on [NYSE Arca] is subject to trading halts caused by extraordinary market volatility pursuant to [NYSE Arca] “circuit breaker” rules. There can be no assurance that the requirements of [NYSE Arca] necessary to maintain the listing of the Fund will continue to be met or will remain unchanged or that Fund shares will trade with any volume, or at all, on any stock exchange. 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.

Valuation Risk. The sale price the Fund could receive for a security or other asset may differ from the Fund’s valuation of the security or asset, particularly for securities or assets that trade in low volume or volatile markets or that are valued using a fair value methodology. In addition, the value of the securities or assets in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s shares.

Canada Risk. The Fund is subject to certain risks specifically associated with investments in the securities of Canadian issuers. The Canadian economy is heavily dependent on the demand for natural resources and agricultural products. Canada is a major producer of commodities such as forest products, metals, agricultural products, and energy related products like oil, gas, and hydroelectricity. Accordingly, a change in the supply and demand of these resources, both domestically and internationally, can have a significant effect on Canadian market performance. Canada is a top producer of zinc and uranium and a global source of many other natural resources, such as gold, nickel, aluminum, and lead. Conditions that weaken demand for such products worldwide could have a negative impact on the Canadian economy as a whole. Changes to the U.S. economy may significantly affect the Canadian economy because the United States is Canada’s largest trading partner and foreign investor. These and other factors could have a negative impact on the Fund and its investments in Canada.

Foreign Securities Risk. The Fund may invest in securities that are traded in foreign markets and that are not subject to the requirements of the U.S. securities laws, markets and accounting requirements (“Foreign Securities”). Investments in Foreign Securities involve certain considerations and risks not ordinarily associated with investments in securities of U.S. issuers. Foreign companies are not generally subject to the same accounting, auditing and financial standards and requirements as those applicable to U.S. companies. Foreign securities exchanges, brokers and listed companies may be subject to less government supervision and regulation than is applicable to U.S. exchanges, brokers and listed companies. In addition, dividend and interest income from Foreign Securities may be subject to withholding and other foreign taxes, which may adversely affect the net return on such investments. There may be difficulty in obtaining or enforcing a court judgment abroad, and it may be difficult to effect repatriation of capital invested in certain countries. In addition, with respect to certain countries, there are risks of expropriation, confiscatory taxation, political or social instability or diplomatic developments that could affect assets of the Fund held in foreign countries.

Utility Companies Risk. Utility companies include companies producing or providing gas, electricity or water. These companies are subject to the risk of the imposition of rate caps, increased competition due to deregulation, the difficulty in obtaining an adequate return on invested capital or in financing large construction projects counterparty risk, the limitations on operations and increased costs and delays attributable to environmental considerations and the capital market’s ability to absorb utility debt. In addition, taxes, government regulation, domestic and international politics, price and supply fluctuations, volatile interest rates and energy conservation may negatively affect utility companies.

Master Limited Partnership Tax Risk. The Fund’s ability to meet its investment objective relies in part upon the level of taxable income it receives from the MLPs in which it invests, a factor over which the Fund has no control. The benefit the Fund derives from its investment in MLPs is largely dependent on their being treated as partnerships for U.S. federal income tax purposes. Partnerships do not pay U.S. federal income tax at the partnership level. Rather, each partner is allocated a share of the partnership’s income, gains, losses, deductions and expenses. A change in current tax law or a change in the underlying business mix of a given MLP could result in an MLP being treated as a corporation for U.S. federal income tax purposes, which would result in the MLP being required to pay U.S. federal income tax (as well as state and local income taxes) on its taxable income at the applicable corporate tax rate. This would have the effect of reducing the amount of cash available for distribution by an MLP and could result in a significant reduction in the value of the Fund’s investment. The classification of an MLP as a corporation for U.S. federal income tax purposes would have the effect of reducing the amount of cash available for distribution by the MLP and causing any such distributions received by the Fund to be taxed as dividend income to the extent of the MLP’s current or accumulated earnings and profits. To the extent a distribution received by the Fund from an MLP is treated as a return of capital, the Fund’s adjusted tax basis in the interests of the MLP may be reduced, which will result in an increase in the amount of income or gain (or decrease in the amount of loss) that will be recognized by the Fund for tax purposes upon the sale of any such interests or upon subsequent distributions in respect of such interests. Furthermore, any return of capital distribution received from an MLP may require the Fund to restate the character of its distributions and amend any shareholder tax reporting previously issued.

Equity Securities Risk. An adverse event, such as an unfavorable earnings report, may depress the value of a particular equity security held by the Fund. Also, prices of equity securities are sensitive to general movements in the stock market and a drop in the stock market may depress the prices of equity securities to which the Fund has exposure. Equity security prices fluctuate for several reasons, including changes in investors’ perceptions of the financial condition of an issuer or the general condition of the relevant stock market, or when political or economic events affecting the issuers occur. In addition, equity security prices may be particularly sensitive to rising interest rates, as the cost of capital rises and borrowing costs increase.

Equity Income Securities. The Fund may invest in equity securities that are expected to periodically accrue or generate income for their holders such as common and preferred stocks of issuers that have historically paid periodic dividends or otherwise made distributions to shareholders. Unlike fixed income securities, dividend payments generally are not guaranteed and so may be discontinued by the issuer at its discretion or because of the issuer’s inability to satisfy its liabilities. Further, an issuer’s history of paying dividends does not guarantee that it will continue to pay dividends in the future. In addition to dividends, under certain circumstances the holders of common stock may benefit from the capital appreciation of the issuer. Although the Fund may seek capital appreciation with respect to particular investments, its overall focus on generating income from dividends and distributions from equity securities may mean that it does not always seek, or obtain, capital appreciation from equity investments.

Common Stock Risk. Common stock of an issuer in the Fund’s portfolio may decline in price for a variety of reasons including if the issuer fails to make anticipated dividend payments. Common stock in which the Fund will invest is structurally subordinated as to income and residual value to preferred stock, bonds and other debt instruments in a company’s capital structure, in terms of priority to corporate income, and therefore will be subject to greater dividend risk than preferred stock or debt instruments of such issuers.

Dividend-Paying Stock Risk. The Fund’s strategy of investing in dividend-paying stocks involves the risk that such stocks may fall out of favor with investors and underperform the market. Companies that issue dividend-paying stocks are not required to continue to pay dividends on such stocks. Therefore, there is the possibility that such companies could reduce or eliminate the payment of dividends in the future or the anticipated acceleration of dividends could not occur. Depending upon market conditions, dividend-paying stocks that meet the Fund’s investment criteria may not be widely available and/or may be highly concentrated in only a few market sectors.

Market Maker Risk. The Fund faces numerous market trading risks, including the potential lack of an active market for Fund shares due to a limited number of market markers. Decisions by market makers or authorized participants to reduce their role or step away from these activities in times of market stress could inhibit the effectiveness of the arbitrage process in maintaining the relationship between the underlying values of the Fund’s portfolio securities and the Fund’s market price. This reduced effectiveness could result in Shares trading at a discount to NAV and also in greater than normal intra-day bid-ask spreads for Shares. If the Fund has lower average daily trading volumes, it may rely on a small number of third-party market makers to provide a market for the purchase and sale of shares. Any trading halt or other problem relating to the trading activity of these market makers could result in a dramatic change in the spread between the Fund’s net asset value and the price at which the Fund’s shares are trading on the Exchange, which could result in a decrease in value of the Fund’s shares. This reduced effectiveness could result in Fund shares trading at a discount to net asset value and also in greater than normal intraday bid-ask spreads for Fund shares. Authorized Participants Risk. The Fund has entered into Authorized Participant Agreements with only a limited number of institutions. Should these Authorized Participants cease to act as such or, for any reason, be unable to create or redeem Shares of the Fund and new Authorized Participants are not appointed in their place, shares of the Fund may trade at a discount to the Fund’s net asset value and possibly face delisting.

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