United States Commodity Funds (USCF) has announced that it is closing and liquidating three subscale ETFs.
The last day of trading in the ETFs is scheduled for 6 September 2018.
The first fund is the United States Agriculture Index Fund (USAG US) which tracks the SummerHaven Dynamic Agriculture Index, reflecting the performance of a diversified group of agricultural commodities.
USAG has an expense ratio of 0.80% and total assets under management of less than $2 million.
Orphaned investors could potential gain similar exposure from the Invesco DB Agriculture Fund (DBA US) which is the largest ETF to target a basket of agricultural commodities with AUM of $600m. DBA is slightly pricier however with an expense ratio of 0.85%.
The second ETF scheduled for closure is the United States Short Oil Fund (DNO US) which tracks the inverse daily performance of West Texas Intermediate (WTI) light, sweet crude oil. The fund comes with an expense ratio of 0.75% and has total AUM of a little less than $10m.
Notably, while DNO has struggled to gain assets from investors, the United States Oil Fund (USO US) – the long counterpart to DNO – is the largest ETF listed in the US to track WTI oil prices. It has AUM of $1.7bn and an expense ratio of 0.77%.
The only ETF with significant assets in the US to provide short exposure to the crude oil market is the ProShares UltraShort Bloomberg Crude Oil (SCO US) which has a leverage factor of 2x. SCO holds over $150m in AUM and costs 0.95%.
The third ETF from USCF to be shuttered will be the United States Diesel-Heating Oil Fund (UHN US). This fund tracks the daily changes in percentage terms of the price of heating oil (also known as No. 2 fuel) for delivery at the New York harbour. The ETF also has an expense ratio of 0.75% and has AUM of $7m. There are no discernible ETFs that may serve as an alternative to UHN.
The ETFs will cease trading on NYSE Arca as of the close of business on 6 September 2018. Following this, the funds will begin the process of liquidating their respective portfolios. As a result, the ETFs’ cash holdings will increase and the funds will no longer be managed in accordance with their investment objectives.
The liquidation date for all three ETFs will be 12 September 2018. The proceeds of the liquidation are scheduled to be distributed to shareholders the following day.