United States Natural Gas Fund (UNG) risk factors, FY2025 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 UNG’s financial statements and the related notes63% rewritten
2. 02expenses), which in turn relates to the price of natural gas in the marketplace. Natural gas prices depend on local, regional and global events or conditions that affect supply and demand for natural gasNew
3. 03Other factors impacting the natural gas market. The supply of and demand for natural gas 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 sources34% rewritten
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 UNG’ investments or assets which, in turn, could cause the loss of your investment in UNG24% rewritten
5. 05Historical performance of UNG and the Benchmark Futures Contract is not indicative of future performance
6. 06An investment in UNG may provide little or no diversification benefits. Thus, in a declining market, UNG may have no gains to offset losses from other investments, and an investor may suffer losses on an investment in UNG 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 UNG’s NAV may not correlate with daily percentage changes in the price of the Benchmark Futures Contract20% rewritten
9. 09Daily percentage changes in the price of the Benchmark Futures Contract may not correlate with daily percentage changes in the spot price of natural gas
10. 10An investment in UNG is not a proxy for investing in the natural gas markets, and the daily percentage changes in the price of the Benchmark Future Contract, or the NAV of UNG, may not correlate with daily percentage changes in the spot price of natural gas
11. 11Natural forces in the natural gas futures market known as “backwardation” and “contango” may increase UNG’s tracking error and/or negatively impact total return71% rewritten
12. 12See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this annual report on Form 10-K for a discussion of the potential effects of contango and backwardationNew

Tax Risk

1. 13An investor’s tax liability may exceed the amount of distributions, if any, on its shares
2. 14An investor’s allocable share of taxable income or loss may differ from its economic income or loss on the shares
3. 15UNG could be treated as a corporation for U.S. federal income tax purposes, which may substantially reduce the value of the shares
4. 16UNG is organized and operated as a limited partnership in accordance with the provisions of the LP Agreement and applicable state law, and therefore, UNG has a more complex tax treatment than traditional mutual funds
5. 17If UNG 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. 18The impact of changes in U.S. federal income tax laws on UNG is uncertain70% rewritten
7. 19UNG will be subject to credit risk with respect to counterparties to OTC contracts entered into by UNG
8. 20Valuing OTC derivatives may be less certain than valuing exchange-traded and/or cleared financial instruments
9. 21UNG’s rights under an OTC contract may be restricted by regulations
10. 22The use of swap agreements may expose UNG to early termination risk, which could result in significant losses to UNG

Other Risks

1. 23UNG 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. 24UNG may temporarily limit the offering of Creation Baskets
3. 25Certain of UNG’s investments could be illiquid, which could cause large losses to investors at any time or from time to time
4. 26UNG may not meet the listing standards of NYSE Arca, which would adversely impact an investor’s ability to sell shares
5. 27The NYSE Arca may halt trading in UNG’s shares, which would adversely impact an investor’s ability to sell shares
6. 28Shareholders 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. 29The lack of an active trading market for UNG’s shares may result in losses on an investor’s investment in UNG at the time the investor sells the shares
8. 30Limited partners and shareholders do not participate in the management of UNG and do not control USCF, so they do not have any influence over basic matters that affect UNG
9. 31Under Delaware law, a limited partner might be held liable for UNG’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. 32There is a risk that UNG will not earn trading gains sufficient to compensate for the fees and expenses that it must pay and as such UNG may not earn any profit
11. 33UNG is subject to extensive regulatory reporting and compliance
12. 34Regulatory changes or actions, including the implementation of new legislation, are impossible to predict but may significantly and adversely affect UNG
13. 35UNG is not a registered investment company so shareholders do not have the protections of the 1940 Act
14. 36Trading in international markets could expose UNG to credit and regulatory risk
15. 37UNG and USCF may have conflicts of interest, which may permit them to favor their own interests to the detriment of shareholders
16. 38UNG 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. 39UNG does not expect to make cash distributions
18. 40An unanticipated number of Redemption Basket requests during a short period of time could have an adverse effect on UNG’s NAV
19. 41The suspension in the ability of Authorized Participants to purchase Creation Baskets could cause UNG’s NAV to differ materially from its trading price
20. 42UNG 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 Baskets47% rewritten
21. 43UNG may be subject to interest rate risk, which may prevent UNG from investing fully at prevailing rates until any current investments in Treasuries mature in order to avoid selling those investments at a lossNew
22. 44As inflation increases, the present value of UNG’s assets may decline
23. 45UNG potentially may lose money by investing in government money market funds
24. 46The failure or bankruptcy of a clearing broker could result in a substantial loss of UNG’s assets and could impair UNG in its ability to execute trades
25. 47The failure or bankruptcy of UNG’s Custodian could result in a substantial loss of UNG’s assets
26. 48Competing claims of intellectual property rights may adversely affect UNG and an investment in UNG’s sharesNew
27. 49Due to the increased use of technologies, intentional and unintentional cyber-attacks pose operational and information security risks
28. 50UNG’s investment returns could be negatively affected by climate change and greenhouse gas restrictions
29. 51USCF is the subject of class action, derivate 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