United States 12 Month Natural Gas Fund (UNL) 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 UNL’s financial statements and the related notes
2. 02Other 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 sources28% rewritten
3. 03Natural 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 UNL’s investments or assets which, in turn, could cause the loss of your investment in UNL24% rewritten
4. 04Historical performance of UNL and the Benchmark Futures Contracts is not indicative of future performance
5. 05An investment in UNL may provide little or no diversification benefits. Thus, in a declining market, UNL may have no gains to offset losses from other investments, and an investor may suffer losses on an investment in UNL while incurring losses with respect to other asset classes
6. 06The market price at which investors buy or sell shares may be significantly less or more than NAV
7. 07Daily percentage changes in UNL’s NAV may not correlate with daily percentage changes in the average of the prices of the Benchmark Futures Contracts21% rewritten
8. 08Daily percentage changes in the average of the prices of the Benchmark Futures Contracts may not correlate with daily percentage changes in the spot price of natural gas
9. 09An investment in UNL is not a proxy for investing in the natural gas markets, and the daily percentage changes in the price of the Benchmark Futures Contracts, or the NAV of UNL, may not correlate with daily percentage changes in the spot price of natural gas
10. 10Natural forces in the natural gas futures market known as “backwardation” and “contango” may increase UNL’s tracking error and/or negatively impact total return
11. 11See “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 backwardation

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. 14UNL could be treated as a corporation for U.S. federal income tax purposes, which may substantially reduce the value of the shares
4. 15UNL is organized and operated as a limited partnership in accordance with the provisions of the LP Agreement and applicable state law, and therefore, UNL has a more complex tax treatment than traditional mutual funds
5. 16If UNL 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 UNL is uncertain70% rewritten
7. 18UNL will be subject to credit risk with respect to counterparties to OTC contracts entered into by UNL
8. 19Valuing OTC derivatives may be less certain than valuing exchange-traded and/or cleared financial instruments

Other Risks

1. 20UNL 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. 21UNL may temporarily limit the offering of Creation Baskets
3. 22Certain of UNL’s investments could be illiquid, which could cause large losses to investors at any time or from time to time
4. 23UNL may not meet the listing standards of NYSE Arca, which would adversely impact an investor’s ability to sell shares
5. 24The NYSE Arca may halt trading in UNL’s shares, which would adversely impact an investor’s ability to sell shares
6. 25Shareholders 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. 26The lack of an active trading market for UNL’s shares may result in losses on an investor’s investment in UNL at the time the investor sells the shares
8. 27Limited partners and shareholders do not participate in the management of UNL and do not control USCF, so they do not have any influence over basic matters that affect UNL
9. 28Under Delaware law, a limited partner might be held liable for UNL’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. 29There is a risk that UNL will not earn trading gains sufficient to compensate for the fees and expenses that it must pay and as such UNL may not earn any profit
11. 30UNL is subject to extensive regulatory reporting and compliance
12. 31Regulatory changes or actions, including the implementation of new legislation is impossible to predict but may significantly and adversely affect UNL62% rewritten
13. 32UNL is not a registered investment company so shareholders do not have the protections of the 1940 Act
14. 33Trading in international markets could expose UNL to credit and regulatory risk
15. 34UNL and USCF may have conflicts of interest, which may permit them to favor their own interests to the detriment of shareholders
16. 35UNL 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. 36UNL does not expect to make cash distributions
18. 37An unanticipated number of Redemption Basket requests during a short period of time could have an adverse effect on UNL’s NAV
19. 38The suspension in the ability of Authorized Participants to purchase Creation Baskets could cause UNL’s NAV to differ materially from its trading price
20. 39UNL 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 or suspend its offers of Creation Baskets
21. 40UNL may be subject to interest rate risk, which may prevent UNL from investing fully at prevailing rates until any current investments in Treasuries mature in order to avoid selling those investments at a loss
22. 41Inflation is a general increase in the overall price level of goods and services in the economy. The United States Federal Reserve has a stated goal of maintaining a two percent increase in inflation over the long run, as measured by the annual change in the price index for personal consumption expenditures
23. 42UNL may potentially lose money by investing in government money market funds
24. 43The failure or bankruptcy of a clearing broker could result in a substantial loss of UNL’s assets and could impair UNL in its ability to execute trades
25. 44The failure or bankruptcy of UNL’s Custodian could result in a substantial loss of UNL’s assets
26. 45Competing claims of intellectual property rights may adversely affect UNL and an investment in UNL’s sharesNew
27. 46Due to the increased use of technologies, intentional and unintentional cyber-attacks pose operational and information security risks
28. 47UNL’s investment returns could be negatively affected by climate change and greenhouse gas restrictions
29. 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