What You Should Know:
- USCI has an expense ratio of 0.95%.
- Eligible commodities the underlying index may hold on a monthly basis include: Crude Oil (Brent), Crude Oil (WTI), Gas Oil, Heating Oil, Natural Gas, Unleaded Gasoline, Feeder Cattle, Lean Hogs, Live Cattle, Bean Oil, Corn, Soybeans, Soybean Meal, Wheat, Aluminum, Copper, Lead, Nickel, Tin, Zinc, Gold, Platinum, Silver, Cocoa, Coffee, Cotton and Sugar.
- Commodities can be very volatile.
- USCI tries to mitigate the effects of contango in the futures market, which may eat away at returns. [Investing with Commodities ETFs]
The Latest News:
- A second Greek bailout helped bring investor confidence back into the markets, writes Gareth Soloway for The Wall Street Journal.
- The depreciating dollar has helped drive commodity prices higher.
- The ETF “attempts to exploit momentum and backwardation as signals of inventory tightness, which, according to the theory of storage, predicts excess returns,” Morningstar writes in a profile of some innovative ETFs. “While academics have created their fair share of products that don’t work, the industry’s record as a whole is a lot worse. We think the fund’s rigorous theoretical basis helps its chances of outperforming over products of more dubious provenance, but it’s no guarantee.”
For past stories in this series, visit our ETF Spotlight category.
United States Commodity Index Fund
Max Chen contributed to this article.