United States Gasoline Fund (UGA) 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 UGA’s financial statements and the related notes
2. 02Other factors impacting the gasoline market. The supply of and demand for unleaded gasoline may also be impacted by changes in interest rates, inflation, and other local or regional market conditions, as well as by the development of alternative energy sources
3. 03On February 24, 2022, Russia launched a large-scale invasion of Ukraine. The extent and duration of the military action, and resulting sanctions, and future market or supply disruptions in the region, are impossible to predict, but could be significant and may have a severe adverse effect on the region
4. 04Infectious disease outbreaks like COVID-19 could negatively affect the valuation and performance of UGA’s investments
5. 05Historical performance of UGA and the Benchmark Futures Contract is not indicative of future performance
6. 06An investment in UGA may provide little or no diversification benefits. Thus, in a declining market, UGA may have no gains to offset losses from other investments, and an investor may suffer losses on an investment in UGA 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 UGA’s NAV may not correlate with daily percentage changes in the price of the Benchmark Futures Contract
9. 09An investment in UGA is not a proxy for investing in the gasoline markets, and the daily percentage changes in the price of the Benchmark Futures Contract, or the NAV of UGA, may not correlate with daily percentage changes in the spot price of unleaded gasoline
10. 10Natural forces in the gasoline futures market known as “backwardation” and “contango” may increase UGA’s tracking error and/or negatively impact total return
11. 11Accountability 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 Benchmark Futures Contract

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 economic income or loss on the shares
3. 14UGA could be treated as a corporation for U.S. federal income tax purposes, which may substantially reduce the value of the shares
4. 15UGA is organized and operated as a limited partnership in accordance with the provisions of the LP Agreement and applicable state law, and therefore, UGA has a more complex tax treatment than traditional mutual funds
5. 16If UGA is 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 UGA is uncertain
7. 18UGA will be subject to credit risk with respect to counterparties to OTC contracts entered into by UGA
8. 19Valuing OTC derivatives may be less certain than valuing exchange-traded and/or cleared financial instruments
9. 20UGA’s rights under an OTC contract may be restricted by regulations
10. 21The use of swap agreements may expose UGA to early termination risk, which could result in significant losses to UGA

Other Risks

1. 22UGA is not leveraged, but it could become leveraged if it had insufficient assets to completely meet its margin or collateral requirements relating to its investments
2. 23UGA may temporarily limit the offering of Creation Baskets
3. 24Certain of UGA’s investments could be illiquid, which could cause large losses to investors at any time or from time to time
4. 25UGA may not meet the listing standards of NYSE Arca, which could adversely impact an investor’s ability to sell shares
5. 26The NYSE Arca may halt trading in UGA’s shares, which would adversely impact an investor’s ability to sell shares
6. 27Shareholders 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
7. 28The lack of an active trading market for UGA’s shares may result in losses on an investor’s investment in UGA at the time the investor sells the shares
8. 29Limited partners and shareholders do not participate in the management of UGA and do not control USCF, so they do not have any influence over basic matters that affect UGA
9. 30Under Delaware law, a limited partner might be held liable for UGA’s obligations as if it were a general partner if the limited partner participates in the control of the partnership’s business and the persons who transact business with the partnership think the limited partner is the general partner
10. 31There is a risk that UGA will not earn trading gains sufficient to compensate for the fees and expenses that it must pay and as such UGA may not earn any profit
11. 32UGA is subject to extensive regulatory reporting and compliance
12. 33Regulatory changes or actions, including the implementation of new legislation is impossible to predict but may significantly and adversely affect UGA
13. 34UGA is not a registered investment company so shareholders do not have the protections of the 1940 Act
14. 35Trading in international markets could expose UGA to credit and regulatory risk
15. 36UGA and USCF may have conflicts of interest, which may permit them to favor their own interests to the detriment of shareholders
16. 37UGA 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
17. 38UGA does not expect to make cash distributions
18. 39An unanticipated number of Redemption Basket requests during a short period of time could have an adverse effect on UGA’s NAV
19. 40The suspension in the ability of Authorized Participants to purchase Creation Baskets could cause UGA’s NAV to differ materially from its trading price
20. 41UGA 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
21. 42UGA may be subject to interest rate risk, which may prevent UGA from investing fully at prevailing rates until any current investments in Treasury Bills mature in order to avoid selling those investments at a loss
22. 43UGA may potentially lose money by investing in government money market funds
23. 44The failure or bankruptcy of a clearing broker could result in a substantial loss of UGA’s assets and could impair UGA in its ability to execute trades
24. 45The failure or bankruptcy of the Custodian could result in a substantial loss of UGA’s assets
25. 46Due to the increased use of technologies, intentional and unintentional cyber-attacks pose operational and information security risks
26. 47UGA’s investment returns could be negatively affected by climate change and greenhouse gas restrictions
27. 48USCF 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