United States Commodity Index Funds Trust (CPER) risk factors, FY2024 10-K

Other

1. 01The following risk factors should be read in connection with the other information included in this annual report on Form 10-K, including Management’s Discussion and Analysis of Financial Condition and Results of Operations and financial statements and the related notes
2. 02The NAV of a Trust Series shares relates directly to the value of its assets invested in accordance with the Applicable Index and other assets held by a Trust Series and fluctuations in the prices of these assets could materially adversely affect an investment in a Trust Series’ shares
3. 03Other market factors. The supply of and demand for agricultural and other commodities may also be impacted by changes in interest rates, inflation, and other local or regional market conditions
4. 04Natural disasters, public health disruptions (such as the COVID-19 pandemic), and international armed conflicts could impact the price of commodities and/or the value, pricing and liquidity of a Trust Series’ investments or assets which, in turn, could cause the loss of your investment in the Trust Series
5. 05Historical performance of a Trust Series and the Applicable Benchmark Component Futures Contracts is not indicative of future performance
6. 06An investment in a Trust Series may provide little or no diversification benefits. Thus, in a declining market, a Trust Series may have no gains to offset losses from other investments, and an investor may suffer losses on an investment in a Trust Series while incurring losses with respect to other asset classes
7. 07The market price at which investors buy or sell shares may be significantly less or more than NAV
8. 08Daily percentage changes in a Trust Series’ NAV may not correlate with daily percentage changes in the price of the Applicable Index
9. 09Daily percentage changes in the price of the Applicable Benchmark Component Futures Contract may not correlate with daily percentage changes in the spot price of the corresponding commodity
10. 10Accountability levels, position limits, and daily price fluctuation limits set by the exchanges have the potential to cause tracking error, which could cause the price of shares to substantially vary from the price of the Applicable Index
11. 11These limits may potentially cause a tracking error between the price of a Trust Series’ shares and the Applicable Index. This may in turn prevent investors from being able to effectively use a Trust Series as a way to hedge against commodity-related losses or as a way to indirectly invest in a commodity

Tax Risk

1. 12An investor’s tax liability may exceed the amount of distributions, if any, on its shares
2. 13An investor’s allocable share of taxable income or loss may differ from its economic income or loss on the shares
3. 14Each Trust Series could be treated as a corporation for U.S. federal income tax purposes, which may substantially reduce the value of the shares
4. 15The Trust is organized as a Delaware statutory trust in accordance with the provisions of the Trust Agreement and applicable state law, but each Trust Series is treated as a partnership for U.S. federal income tax purposes, and therefore, each Trust Series has a more complex tax treatment than traditional mutual funds
5. 16If the Trust Series are required to withhold tax with respect to any non-U.S. shareholders, the cost of such withholding may be borne by all shareholders
6. 17The impact of changes in U.S. federal income tax laws on each Trust Series is uncertain
7. 18Each Trust Series will be subject to credit risk with respect to counterparties to OTC contracts entered into by the Trust on behalf of a Trust Series
8. 19Valuing OTC derivatives may be less certain than valuing exchange-traded and/or cleared financial instruments
9. 20Each Trust Series’ rights under an OTC contract may be restricted by regulations
10. 21The use of swap agreements may expose a Trust Series to early termination risk, which could result in significant losses to the Trust Series

Other Risks

1. 22Neither Trust Series is leveraged, but a Trust Series could become leveraged if it had insufficient assets to completely meet its margin or collateral requirements relating to its investments
2. 23A Trust Series may temporarily limit the offering of Creation Baskets
3. 24The Trust Series pay fees and expenses that are incurred regardless of whether they are profitable
4. 25You will have no rights to participate in the management of a Trust Series and will have to rely on the duties and judgment of USCF to manage the Trust Series
5. 26Certain of a Trust Series’ investments could be illiquid, which could cause large losses to investors at any time or from time to time
6. 27A Trust Series may not meet the listing standards of NYSE Arca, which would adversely impact an investor’s ability to sell shares
7. 28The NYSE Arca may halt trading in a Trust Series’ shares, which would adversely impact an investor’s ability to sell shares
8. 29Shareholders that are not Authorized Participants may only purchase or sell their shares in secondary trading markets, and the conditions associated with trading in secondary markets may adversely affect investors’ investment in the shares
9. 30The lack of an active trading market for a Trust Series’ shares may result in losses on an investor’s investment in a Trust Series at the time the investor sells the shares
10. 31SummerHaven is leanly staffed and relies heavily on key personnel to manage advisory activities
11. 32There is a risk that a Trust Series will not earn trading gains sufficient to compensate for the fees and expenses that it must pay and as such a Trust Series may not earn any profit
12. 33Each Trust Series is subject to extensive regulatory reporting and compliance
13. 34Fewer representative commodities may result in greater Applicable Index volatility
14. 35Regulatory changes or actions, including the implementation of new legislation is impossible to predict but may significantly and adversely affect a Trust Series
15. 36The Trust is not a registered investment company, so shareholders do not have the protections of the 1940 Act
16. 37Trading in international markets could expose a Trust Series to credit and regulatory risk
17. 38Each Trust Series and USCF may have conflicts of interest, which may permit them to favor their own interests to the detriment of shareholders
18. 39The Trust Series, USCF and SummerHaven may have conflicts of interest, which may cause them to favor their own interests to the detriment of shareholders
19. 40Shareholders have only very limited voting rights and have the power to replace USCF only under specific circumstances. Shareholders do not participate in the management of a Trust Series and do not control USCF, so they do not have any influence over basic matters that affect each Trust Series
20. 41A Trust Series could terminate at any time and cause the liquidation and potential loss of an investor’s investment and could upset the overall maturity and timing of an investor’s investment portfolio
21. 42The Trust Series do not expect to make cash distributions
22. 43An unanticipated number of Redemption Basket requests during a short period of time could have an adverse effect on a Trust Series’ NAV
23. 44The suspension in the ability of Authorized Participants to purchase Creation Baskets could cause a Trust Series’ NAV to differ materially from its trading price
24. 45A Trust Series may determine that, to allow it to reinvest the proceeds from sales of its Creation Baskets in currently permitted assets in a manner that meets its investment objective, it may limit its offers of Creation Baskets
25. 46The Trust Series may be subject to interest rate risk, which may prevent them from investing fully at prevailing rates until any current investments in Treasury Bills mature in order to avoid selling those investments at a loss
26. 47A Trust Series may potentially lose money by investing in government money market funds
27. 48The failure or bankruptcy of a clearing broker could result in a substantial loss of the Trust Series’ assets and could impair the Trust Series in its ability to execute trades
28. 49The failure or bankruptcy of the Trust Series’ Custodian could result in a substantial loss of the Trust Series’ assets
29. 50The liability of SHIM and SummerHaven is limited, and the value of the shares may be adversely affected if USCF and any Trust Series are required to indemnify SHIM and/or SummerHaven
30. 51The liability of USCF and the Trustee are limited, and the value of the shares will be adversely affected if any Trust Series is required to indemnify the Trustee or USCF
31. 52Although the shares of each Trust Series are limited liability investments, certain circumstances such as bankruptcy or indemnification of a Trust Series by a shareholder will increase the shareholder’s liability
32. 53Investors cannot be assured of the continuation of the agreement between SummerHaven and USCF for use of an Applicable Index, and discontinuance of an Applicable Index may be detrimental to a Trust Series
33. 54Investors cannot be assured of SummerHaven’s continued services, and discontinuance may be detrimental to a Trust Series
34. 55All of the Trust Series are series of the Trust and, as a result, a court could potentially conclude that the assets and liabilities of one Trust Series are not segregated from those of another Trust Series, thereby potentially exposing assets in one Trust Series to the liabilities of another Trust Series
35. 56The Trust Agreement limits the forum in which claims may be brought against USCF, the Trust, the Trustee or their respective directors and officers
36. 57USCF and the Trustee are not obligated to prosecute any action, suit or other proceeding in respect of any Trust Series property
37. 58Due to the increased use of technologies, intentional and unintentional cyber-attacks pose operational and information security risks
38. 59A Trust Series’ investment returns could be negatively affected by climate change and greenhouse gas restrictions
39. 60USCF is the subject of class action, derivative, and other litigation. In light of the inherent uncertainties involved in litigation matters, an adverse outcome in this litigation could materially adversely affect USCF’s financial condition