USCF has launched the company's first mutual fund, the USCF Commodity Strategy Fund, with SummerHaven Investment Management, a Stamford, Connecticut based commodity trading adviser.
The mutual fund will initially offer two share classes: A shares and I shares.
The fund seeks long term total return and will use the SummerHaven Dynamic Commodity Index (SDCI), which USCF has licensed from SummerHaven's affiliate, SummerHaven Index Management, as its benchmark index.
"We are thrilled to join the mutual fund community by introducing a new product that employs the same commodity selection methodology as our exchange-traded product, the United States Commodity Index Fund (USCI)," says John Love (pictured), president and CEO of USCF. "The mutual fund structure enables us to offer a version of the strategy employed by USCI without a K-1 tax form."
SummerHaven and USCF have collaborated on three exchange-traded products to date: the United States Copper Index Fund (Ticker: CPER), the United States Agriculture Index Fund (Ticker: USAG) and the United States Commodity Index Fund (USCI), which also uses the SDCI as a benchmark.
The SDCI is a total return commodity sector index designed to broadly represent major commodities. The SDCI reflects the performance of a fully collateralised portfolio of 14 commodity futures, selected each month from a universe of 27 eligible contracts. Unlike many commodity indexes, the index reconstitutes and rebalances to equal weights on a monthly basis and features a diversification rule that allows it to maintain broad exposure to all commodity sectors.
"We are excited to build on our long-term collaboration with USCF and to leverage the success of USCI," says Ashraf Rizvi, partner of SummerHaven. "This new mutual fund utilises the established SDCI as its benchmark. Since its inception in 2009, the SDCI has delivered strong outperformance relative to other commodity indexes with lower volatility and a high correlation to inflation."
"We consider it a privilege to expand our relationship with SummerHaven," says Love. "Their team possesses an incredible depth of market knowledge and, in our opinion, their research is a benefit to everyone interested in learning more about commodities."
