What changed in this filing

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Item 1. Business

2021-02-26 compared with 2020-03-13 · 338 added, 196 removed, 950 unchanged (36% of the section changed)

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The United States Commodity Index Funds Trust (the “Trust”) is a Delaware statutory trust formed on December 21, 2009.

The Trust is a series trust formed pursuant to the Delaware Statutory Trust Act and is organized into four separate series (each of USCI and CPER is referred to as a “Trust Series” and collectively, the “Trust Series”).

The Trust is a series trust formed pursuant to the Delaware Statutory Trust Act and is organized into three separate series (each series, a “Trust Series” and collectively, the “Trust Series”).

As of December 31, 2020, the Trust includes the United States Commodity Index Fund (“USCI”), a commodity pool formed on April 1, 2010 and first made available to the public on August 10, 2010 and the United States Copper Index Fund (“CPER”), a commodity pool formed on November 26, 2010 and first made available to the public on November 15, 2011.

A new series of the Trust, the USCF Crescent Crypto Index Fund (“XBET”) was formed on May 7, 2019.

XBET is currently in registration and has not commenced operations.

USCI and CPER each issues shares (“shares”) that may be purchased and sold on the NYSE Arca, Inc.

(“NYSE Arca”).

Additional series of the Trust included:

the United States Agriculture Index Fund (“USAG”), which liquidated all of its assets on September 12, 2018 and distributed cash pro rata to all remaining shareholders on September 13, 2018, and the USCF Canadian Crude Oil Index Fund (“UCCO”), which never commenced operations and was terminated as a series on May 8, 2019.

the United States Agriculture Index Fund (“USAG”), which liquidated all of its assets on September 12, 2018 and distributed cash pro rata to all remaining shareholders on September 13, 2018.

The Trust, USCI, and CPER operate pursuant to the Trust’s Fourth Amended and Restated Declaration of Trust and Trust Agreement (the “Trust Agreement”), dated as of December 15, 2017.

Wilmington Trust Company, a Delaware trust company, is the Delaware trustee of the Trust.

The Trust and CPER are managed and controlled by United States Commodity Funds LLC (“USCF”).

USCF is a limited liability company formed in Delaware on May 10, 2005, that is registered as a commodity pool operator (“CPO”) with the Commodity Futures Trading Commission and is a member of the National Futures Association (“NFA”).

The Trust and Trust Series maintain their main business offices at 1850 Mt.

Diablo Boulevard, Suite 640, Walnut Creek, California 94596.

USCI and CPER each issues shares (“shares”) that may be purchased and sold on the NYSE Arca, Inc.

(“NYSE Arca”).

The Trust and each Trust Series operate pursuant to the terms of the Trust’s Fourth Amended and Restated Declaration of Trust and Trust Agreement dated as of December 15, 2017 as amended from time to time, (the “Trust Agreement”), which grants full management control to their sponsor, United States Commodity Funds LLC (“USCF”).

USCI’s Investment Objective

USCI invests in futures contracts for commodities that are currently traded on the New York Mercantile Exchange (the “NYMEX”), ICE Futures (“ICE Futures”), Chicago Board of Trade (“CBOT”), Chicago Mercantile Exchange (“CME”), London Metal Exchange (“LME”), Commodity Exchange, Inc.

(“COMEX”) or on other foreign exchanges (the NYMEX, ICE Futures, CBOT, CME, LME, COMEX and other foreign exchanges, collectively, the “Futures Exchanges”) (such futures contracts, collectively, “Futures Contracts”) and, to a lesser extent, in order to comply with regulatory requirements or in view of market conditions, other commodity-based contracts and instruments such as cash-settled options on Futures Contracts, forward contracts relating to commodities, cleared swap contracts and other non-exchange traded over-the-counter (“OTC”) transactions that are based on the price of commodities and Futures Contracts (collectively, “Other Commodity-Related Investments”).

Futures Contracts and Other Commodity-Related Investments collectively are referred to as “Commodity Interests.”

The investment objective of USCI is for the daily changes in percentage terms of its shares’ per share net asset value (“NAV”) to reflect the daily changes in percentage terms of the SummerHaven Dynamic Commodity Index Total Return SM (the “SDCI”), less USCI’s expenses.

USCF does not intend to operate USCI in a fashion such that its per share NAV will equal, in dollar terms, the spot prices of the commodities underlying the Benchmark Component Futures Contracts (as defined below) that comprise the SDCI or the prices of any particular group of Futures Contracts.

USCI will not seek to achieve its stated investment objective over a period of time greater than one day.

USCI believes that it is not practical to manage the portfolio to achieve such an investment goal when investing in Futures Contracts and Other Commodity-Related Investments.

USCI seeks to achieve its investment objective by investing so that the average daily percentage change in USCI’s NAV for any period of 30 successive valuation days will be within plus/minus 10 percent (10%) of the average daily percentage change in the price of the SDCI over the same period.

The SDCI is designed to reflect the performance of a diversified group of commodities.

The SDCI is comprised of 14 Futures Contracts that are selected on a monthly basis from a list of 27 possible Futures Contracts.

The Futures Contracts that at any given time make up the SDCI are referred to herein as “Benchmark Component Futures Contracts.” The SDCI is owned and maintained by SummerHaven Index Management, LLC (“SHIM”) and calculated and published by Bloomberg, L.P.

(“Bloomberg”).

USCI invests first in the current Benchmark Component Futures Contracts and other Futures Contracts intended to replicate the return on the current Benchmark Component Futures Contracts and, thereafter may hold Futures Contracts in a particular commodity other than one specified as the Benchmark Component Futures Contract, or may hold Other Commodity-Related Investments that are intended to replicate the return on the Benchmark Component Futures Contracts, but may fail to closely track the SDCI’s total return movements.

USCI seeks to achieve its investment objective by investing in Futures Contracts and Other Commodity-Related Investments such that daily changes in its’ per share NAV closely track the daily changes in the price of the SDCI.

USCI’s positions in Commodity Interests are rebalanced on a monthly basis in order to track the changing nature of the SDCI.

If Futures Contracts relating to a particular commodity remain in the SDCI from one month to the next, such Futures Contracts are rebalanced to the 7.14% target weight.

Specifically, on the Selection Date, which is the fifth business day before the end of the month (the “Selection Date”), it will be determined if a current Benchmark Component Futures Contract will be replaced by a new Futures Contract in either the same or different underlying commodity as a Benchmark Component Futures Contract for the following month, in which case USCI’s investments would have to be changed accordingly.

In order that USCI’s trading does not unduly cause extraordinary market movements, and to make it more difficult for third parties to profit by trading based on market movements that could be expected from changes in the Benchmark Component Futures Contracts, USCI’s investments typically are not rebalanced entirely on a single day, but rather typically rebalanced over a period of four days.

After fulfilling the margin and collateral requirements with respect to its Commodity Interests, USCF invests the remainder of USCI’s proceeds from the sale of shares in Treasuries or cash equivalents, and/or merely hold such assets in cash (generally in interest-bearing accounts).

USCI’s shares began trading on August 10, 2010.

As of December 31, 2019, USCI held 880 Futures Contracts on the NYMEX, 716 Futures Contracts on the ICE Futures, 644 Futures Contracts on the CBOT, 480 Futures Contracts on the CME, 1,903 Futures Contracts on the LME and 342 Futures Contracts on the COMEX.

The SDCI is owned and maintained by SummerHaven Index Management, LLC (“SHIM”) and is calculated and published by Bloomberg L.P.

Futures contracts for the commodities comprising the SDCI are traded on the New York Mercantile Exchange (“NYMEX”), ICE Futures (“ICE Futures”), Chicago Board of Trade (“CBOT”), Chicago Mercantile Exchange (“CME”), London Metal Exchange (“LME”), and Commodity Exchange, Inc.

(“COMEX” together with the NYMEX, ICE Futures, CBOT, CME, LME and COMEX, the “Futures Exchanges”) and are collectively referred to herein as “Futures Contracts.” The Futures Contracts that at any given time make up the SDCI are referred to herein as “Benchmark Component Futures Contracts.” The relative weighting of the Benchmark Component Futures Contracts will change on a monthly basis, based on quantitative formulas relating to the prices of the Benchmark Component Futures Contracts developed by SHIM.

USCI seeks to achieve its investment objective by investing to the fullest extent possible in the Benchmark Component Futures Contracts.

Then, if constrained by regulatory requirements or in view of market conditions, USCI will invest next in other Futures Contracts based on the same commodity as the futures contracts subject to such regulatory constraints or market conditions, and finally, to a lesser extent, in other exchange-traded futures contracts that are economically identical or substantially similar to the Benchmark Component Futures Contracts if one or more other Futures Contracts is not available.

When USCI has invested to the fullest extent possible in exchange-traded futures contracts, USCI may then invest in other contracts and instruments based on the Benchmark Component Futures Contracts, other Futures Contracts or the commodities included in the SDCI, such as cash-settled options, forward contracts, cleared swap contracts and swap contracts other than cleared swap contracts.

Other exchange-traded futures contracts that are economically identical or substantially similar to the Benchmark Component Futures Contracts and other contracts and instruments based on the Benchmark Component Futures Contracts are collectively referred to as “Other Commodity-Related Investments,” and together with Benchmark Component Futures Contracts and other Futures Contracts, “Commodity Interests.”

USCF believes that the market arbitrage opportunities will cause the daily changes in USCI’s share price on the NYSE Arca on a percentage basis to closely track the daily changes in USCI’s per share NAV on a percentage basis.

USCF believes that the net effect of this expected relationship and the expected relationship described above between USCI’s per share NAV and the SDCI will be that the daily changes in the price of USCI’s shares on the NYSE Arca on a percentage basis will closely track the daily changes in the SDCI on a percentage basis, less USCI’s expenses.

While USCI is composed of Benchmark Component Futures Contracts and is therefore a measure of the prices of the corresponding commodities comprising the SDCI for future delivery, there is nonetheless expected to be a reasonable degree of correlation between the SDCI and the cash or spot prices of the commodities underlying the Benchmark Component Futures Contracts.

Investors should be aware that USCI’s investment objective is not for its NAV or market price of shares to equal, in dollar terms, the spot prices of the commodities underlying the Benchmark Component Futures Contracts or the prices of any particular group of futures contracts.

USCI will not seek to achieve its stated investment objective over a period of time greater than one day.

This is because natural market forces called contango and backwardation have impacted the total return on an investment in USCI’s shares during the past year relative to a hypothetical direct investment in the various commodities and, in the future, it is likely that the relationship between the market price of USCI’s shares and changes in the spot prices of the underlying commodities will continue to be so impacted by contango and backwardation.

(It is important to note that the disclosure above ignores the potential costs associated with physically owning and storing the commodities, which could be substantial).

As of December 31, 2020, USCI held 599 Futures Contracts on the NYMEX, held 792 Futures Contracts on the ICE Futures, held 915 Futures Contracts on the CBOT, did not hold any Futures Contracts on the CME, held 621 Futures Contracts on the LME and held 187 Futures Contracts on the COMEX.

CPER’s Investment Objective

The investment objective of CPER is for the daily changes in percentage terms of its shares’ per share NAV to reflect the daily changes in percentage terms of the SummerHaven Copper Index Total Return SM (the “SCI”), less CPER’s expenses.

USCF does not intend to operate CPER in a fashion such that its per share NAV will equal, in dollar terms, the spot prices of the commodities underlying the Benchmark Component Copper Futures Contracts (as defined below) that comprise the SCI or the prices of any particular group of Futures Contracts.

CPER will not seek to achieve a stated investment objective over a period of time greater than one day.

USCF believes that it is not practical to manage the portfolio to achieve such an investment goal when investing in Futures Contracts and Other Copper-Related Investments (as defined below).

The SCI is designed to reflect the performance of the investment returns from a portfolio of copper futures contracts.

The SCI is owned and maintained by SHIM and calculated and published by the NYSE Arca.

The SCI is comprised of either two or three Eligible Copper Futures Contracts that are selected on a monthly basis based on quantitative formulas relating to the prices of the Eligible Copper Futures Contracts developed by SHIM.

CPER seeks to achieve its investment objective by investing so that the average daily percentage change in CPER’s NAV for any period of 30 successive valuation days will be within plus/minus 10 percent (10%) of the average daily percentage change in the price of the Benchmark Component Copper Futures Contracts over the same period.

The SCI is designed to reflect the performance of the investment returns from a portfolio of copper futures contracts on the Commodity Exchange, Inc.

exchange (“COMEX”).

The SCI is owned and maintained by SummerHaven Index Management, LLC (“SHIM”) and calculated and published by the NYSE Arca.

The SCI is comprised of either one or three Eligible Copper Futures Contracts that are selected on a monthly basis based on quantitative formulas relating to the prices of the Eligible Copper Futures Contracts developed by SHIM.

The Eligible Copper Futures Contracts that at any given time make up the SCI are referred to herein as “Benchmark Component Copper Futures Contracts.”

CPER seeks to achieve its investment objective by investing to the fullest extent possible in the Benchmark Component Copper Futures Contracts.

Then, if constrained by regulatory requirements or in view of market conditions, CPER will invest next in other Eligible Copper Futures Contracts, and finally to a lesser extent, in other exchange traded futures contracts that are economically identical or substantially similar to the Benchmark Component Copper Futures Contracts if one or more other Eligible Copper Futures Contracts is not available.

When CPER has invested to the fullest extent possible in exchange-traded futures contracts, CPER may then invest in other contracts and instruments based on the Benchmark Component Copper Futures Contracts, other Eligible Copper Futures Contracts or copper, such as cash-settled options, forward contracts, cleared swap contracts and swap contracts other than cleared swap contracts.

Other exchange-traded futures contracts that are economically identical or substantially similar to the Benchmark Component Copper Futures Contracts and other contracts and instruments based on the Benchmark Component Copper Futures Contracts, are collectively referred to as “Other Copper-Related Investments,” and together with Benchmark Component Copper Futures Contracts and other Eligible Copper Futures Contracts, “Copper Interests.”

CPER’s shares began trading on November 15, 2011.

Then, if constrained by regulatory requirements or in view of market conditions, CPER will invest next in other Eligible Copper Futures Contracts based on the same copper as the futures contracts subject to such regulatory constraints or market conditions, and finally to a lesser extent, in other exchange traded futures contracts that are economically identical or substantially similar to the Benchmark Component Copper Futures Contracts if one or more other Eligible Copper Futures Contracts is not available.

When CPER has invested to the fullest extent possible in exchange-traded futures contracts, CPER may then invest in other contracts and instruments based on the Benchmark Component Copper Futures Contracts, other Eligible Copper Futures Contracts or other items based on copper, such as cash-settled options, forward contracts, cleared swap contracts and swap contracts other than cleared swap contracts.

Other exchange-traded futures contracts that are economically identical or substantially similar to the Benchmark Component Copper Futures Contracts and other contracts and instruments based on the Benchmark Component Copper Futures Contracts, are collectively referred to collectively as “Other Copper-Related Investments,” and together with Benchmark Component Copper Futures Contracts and other Eligible Copper Futures Contracts, “Copper Interests.”

USCF believes that market arbitrage opportunities will cause daily changes in CPER’s share price on the NYSE Arca on a percentage basis, to closely track the daily changes in CPER’s per share NAV on a percentage basis.

USCF believes that the net effect of this expected relationship and the expected relationship described above between CPER’s per share NAV and the SCI will be that the daily changes in the price of CPER’s shares on the NYSE Arca on a percentage basis will closely track the daily changes in the SCI on a percentage basis, less CPER’s expenses.

While CPER is composed of Benchmark Component Copper Futures Contracts and is therefore a measure of the prices of the corresponding commodities comprising the SCI for future delivery, there is nonetheless expected to be a reasonable degree of correlation between the SCI and the cash or spot prices of the commodities underlying the Benchmark Component Copper Futures Contracts.

Investors should be aware that CPER’s investment objective is not for its NAV or market price of shares to equal, in dollar terms, the spot prices of the commodities underlying the Benchmark Component Copper Futures Contracts or the prices of any particular group of futures contracts.

CPER will not seek to achieve its stated investment objective over a period of time greater than one day.

This is because natural market forces called contango and backwardation have impacted the total return on an investment in CPER’s shares during the past year relative to a hypothetical direct investment in various commodities and, in the future, it is likely that the relationship between the market price of CPER’s shares and changes in the spot prices of the underlying commodities will continue to be so impacted by contango and backwardation.

(It is important to note that the disclosure above ignores the potential costs associated with physically owning and storing the commodities, which could be substantial.).

As of December 31, 2020, CPER held 741 Futures Contracts on the COMEX.

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The SDCI and the SCI are referred to throughout this annual report on Form 10-K collectively as the “Applicable Index” or “Indices.”

Benchmark Component Futures Contracts, Benchmark Component Copper Futures Contracts and Benchmark Component Agriculture Futures Contracts are referred to throughout this annual report on Form 10-K collectively as “Applicable Benchmark Component Futures Contracts.”

Other Commodity-Related Investments, Other Copper-Related Investments and Other Agriculture-Related Interests are referred to throughout this annual report on Form 10-K collectively as “Other Related Investments.” Commodity Interests, Copper Interests and Agriculture Interests are collectively referred to herein as “Applicable Interests” throughout this annual report on Form 10-K.

Benchmark Component Futures Contracts and Benchmark Component Copper Futures Contracts are referred to throughout this annual report on Form 10-K collectively as “Applicable Benchmark Component Futures Contracts.”

Other Commodity-Related Investments and Other Copper-Related Investments are referred to throughout this annual report on Form 10-K collectively as “Other Related Investments.” Commodity Interests and Copper Interests are collectively referred to herein as “Applicable Interests” throughout this annual report on Form 10-K.

USCF is a single member limited liability company that was formed in the state of Delaware on May 10, 2005.

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Diablo Boulevard, Suite 640, Walnut Creek, California 94596.

USCF is a wholly-owned subsidiary of Wainwright Holdings, Inc., a Delaware corporation (“Wainwright”) which is a wholly owned subsidiary of Concierge Technologies, Inc.

(publicly traded under the ticker CNCG) (“Concierge”).

Gerber (discussed below), along with certain other family members and certain other shareholders, owns the majority of the shares of Concierge.

Wainwright is a holding company that currently holds both USCF, as well as USCF Advisers LLC, an investment adviser registered under the Investment Advisers Act of 1940, as amended.

USCF Advisers LLC serves as the investment adviser for the USCF SummerHaven SHPEN Index Fund (“BUYN”), the USCF SummerHaven SHPEI Index Fund (“BUY”) and USCF SummerHaven Dynamic Commodity Index Total Return SM (“SDCI”), each a series of the USCF ETF Trust.

USCF Advisers LLC also served as the investment adviser to the USCF Commodity Strategy Fund, a series of the USCF Mutual Funds Trust, which liquidated all of its assets and distributed cash pro rata to all remaining shareholders in March 2019.

USCF is a wholly-owned subsidiary of Wainwright Holdings, Inc., a Delaware corporation (“Wainwright”), which is an intermediate holding company that owns USCF and another advisor of exchange traded funds.

Wainwright is a wholly owned subsidiary of Concierge Technologies, Inc.

(publicly traded under the ticker CNCG) (“Concierge”), a publicly traded holding company that owns various financial and non-financial businesses.

Nicholas Gerber (discussed below), along with certain family members and certain other shareholders, owns the majority of the shares in Concierge.

Wainwright is a holding company that currently holds both USCF, as well as USCF Advisers LLC, an investment adviser registered under the Investment Advisers Act of 1940, as amended, (“USCF Advisers”).

USCF Advisers serves as the investment adviser for the USCF SummerHaven Dynamic Commodity Strategy No K-1 Fund (“SDCI”), a series of the USCF ETF Trust.

USCF Advisers was also the investment adviser for each of the following funds prior to such fund’s liquidation:

(1) the USCF Commodity Strategy Fund (the “Mutual Fund”), a series of the USCF Mutual Funds Trust, until March 2019, and (2) for the USCF SummerHaven SHPEN Index Fund (“BUYN”) and the USCF SummerHaven SPEI Index Fund (“BUY”), each a series of the USCF ETF Trust, until May 2020 and October 2020, respectively.

USCF ETF Trust and USCF Mutual Funds Trust are registered under the Investment Company Act of 1940, as amended (the “1940 Act”).

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USCF is a member of the National Futures Association (the “NFA”) and registered as a commodity pool operator (“CPO”) with the Commodity Futures Trading Commission (the “CFTC”) on December 1, 2005 and as a swaps firm on August 8, 2013.

USCF serves as general partner of the United States Oil Fund, LP (“USO”), the United States Natural Gas Fund, LP (“UNG”), the United States 12 Month Oil Fund, LP (“USL”), the United States Gasoline Fund, LP (“UGA”), the United States 12 Month Natural Gas Fund, LP (“UNL”) and the United States Brent Oil Fund, LP (“BNO”).

USCF is the sponsor of the Trust and each of its series:

USCI, CPER and the USCF Crescent Crypto Index Fund (“XBET”).

USCF previously served as the sponsor for the United States Agriculture Index Fund (“USAG”), which was liquidated in 2018.

A registration statement that had been previously filed for XBET was withdrawn on June 25, 2020.

USCF also serves as the general partner of the United States Natural Gas Fund, LP (“UNG”), the United States 12 Month Oil Fund, LP (“USL”), the United States Brent Oil Fund, LP (“BNO”), the United States Gasoline Fund, LP (“UGA”), the United States 12 Month Natural Gas Fund, LP (“UNL”) and the United States Oil Fund, LP (“USO”).

USCF previously served as the general partner for the United States Short Oil Fund, LP (“DNO”) and the United States Diesel-Heating Oil Fund, LP (“UHN”), both of which were liquidated in 2018.

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For more information about each of the Related Public Funds, investors in the Trust Series may call 1.800.920.0259 or visit www.uscfinvestments.com or the website of the Securities and Exchange Commission’s (the “SEC”) at www.sec.gov.

USCF is required to evaluate the credit risk of each Trust Series to the futures commission merchant (“FCM”), oversee the purchase and sale of each Trust Series’ shares by certain authorized purchasers (“Authorized Participants”), review daily positions and margin requirements of each Trust Series and manage each Trust Series’ investments.

USCF also pays the fees of ALPS Distributors, Inc., which serves as the marketing agent for each Trust Series (the “Marketing Agent” or “ALPS Distributors”), Brown Brothers Harriman & Co.

(“BBH&Co.”), which serves as the administrator (the “Administrator”) and the custodian (the “Custodian”) for each Trust Series, and SummerHaven Investment Management, LLC (“SummerHaven”), which serves as the commodity trading advisor for USCI and CPER.

There are no executive officers or employees of the Trust or any series thereof.

Pursuant to the Trust Agreement, the affairs of the Trust and each series thereof are managed by USCF.

USCF is required to evaluate the credit risk of each Trust Series to the futures commission merchant (“FCM”), oversee the purchase and sale of the Trust Series’ shares by certain authorized purchasers (“Authorized Participants”), review daily positions and margin requirements of the Trust Series and manage the Trust Series’ investments.

USCF also pays the fees of ALPS Distributors, Inc., which serves as the marketing agent for the Trust Series (the “Marketing Agent”), and The Bank of New York Mellon (“BNY Mellon”), which serves as the administrator (the “Administrator”) and the custodian (the “Custodian”) for the Trust Series and provides accounting and transfer agent services for, the Trust Series since April 1, 2020.

Brown Brothers Harriman & Co.

("BBH&Co.") served as the administrator and custodian for each Trust Series prior to BNY Mellon.

Certain fund accounting and fund administration services rendered by BBH&Co.

to USCIFT and the Related Public Funds terminated on May 31, 2020 to allow for the transition to BNY Mellon.

The business and affairs of USCF are managed by a board of directors (the “Board”), which is comprised of four management directors (the “Management Directors”), each of whom are also executive officers or employees of USCF, and three independent directors who meet the independent director requirements established by the NYSE Arca Equities Rules and the Sarbanes-Oxley Act of 2002.

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Directors, Executive Officers and Corporate Governance – Audit Committee” in this annual report on Form 10-K.

There are no executive officers or employees of the Trust or any series thereof.

Pursuant to the Trust Agreement, the affairs of the Trust and each series thereof are managed by USCF.

How Does Each Trust Series Operate?

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An investment in the shares allows both retail and institutional investors to easily gain this exposure to the commodities market in a transparent, cost-effective manner.

The investment objective of each Trust Series is for the daily changes in percentage terms of its per share NAV to reflect the daily changes in percentage terms of the Applicable Index, less each Trust Series expenses.

USCF does not intend to operate any Trust Series in a fashion such that its per share NAV will equal, in dollar terms, the price of the Applicable Index or the price of any particular Applicable Benchmark Component Futures Contract.

USCF believes that it is not practical to manage each Trust Series’ portfolio to achieve such an investment goal when investing in the Applicable Benchmark Component Futures Contracts and Other Related Investments.

How USCI Seeks to Achieve Its Investment Objective.

USCI’s positions in Commodity Interests are rebalanced on a monthly basis in order to track the changing nature of the SDCI.

The portfolio rebalancing takes place during the last four business days of the month (“Rebalancing Period”).

At the end of each of the days in the Rebalancing Period, one fourth of the prior month portfolio positions are replaced by equally-weighted positions reflecting the particular Benchmark Component Futures Contracts determined on the Selection Date, which is the fifth business day before the end of the month (“USCI’s Selection Date”).

At the end of the Rebalancing Period, the SDCI will have an equal-weight position of approximately 7.14% in each of the selected Benchmark Component Futures Contracts which will be reflected in the rebalanced portfolio.

After fulfilling the margin and collateral requirements with respect to its Commodity Interests, USCF invests the remainder of USCI’s proceeds from the sale of shares in short-term obligations of the United States government (“Treasuries”) or cash equivalents, and/or merely hold such assets in cash (generally in interest-bearing accounts).

USCI seeks to achieve its investment objective by investing to the fullest extent possible in the Benchmark Component Futures Contracts.

Market conditions that USCF currently anticipates could cause USCI to invest in Other Commodity-Related Investments include those allowing USCI to obtain greater liquidity or to execute transactions with more favorable pricing.

USCI invests substantially the entire amount of its assets in Futures Contracts while supporting such investments by holding the amounts of its margin, collateral and other requirements relating to these obligations in short-term obligations of the United States of two years or less (“Treasuries”), cash and cash equivalents.

The daily holdings of USCI are available on USCI’s website at www.uscfinvestments.com.

How CPER Seeks to Achieve Its Investment Objective.

CPER seeks to achieve its investment objective by investing to the fullest extent possible in the Benchmark Component Copper Futures Contracts.

When CPER has invested to the fullest extent possible in exchange-traded futures contracts, it may then invest in Other Copper-Related Investments.

After fulfilling the collateral requirements with respect to its Copper Interests, CPER invests the remainder of its proceeds from the sale of creation baskets in Treasuries or cash equivalents, and/or merely holds such assets in cash (generally in interest-bearing accounts).

The anticipated dates on which USCI and CPER’s positions in Applicable Interests will be rebalanced on a monthly basis are posted on such Trust Series’ website www.uscfinvestments.com, and are subject to change without notice.

When CPER has invested to the fullest extent possible in exchange-traded futures contracts, CPER may then invest in other contracts and instruments based on the Benchmark Component Copper Futures Contracts, other Eligible Copper Futures Contracts or other items based on copper, such as cash-settled options, forward contracts, cleared swap contracts and swap contracts other than cleared swap contracts.

Other exchange-traded futures contracts that are economically identical or substantially similar to the Benchmark Component Copper Futures Contracts and other contracts and instruments based on the Benchmark Component Copper Futures Contracts, are collectively referred to collectively as “Other Copper-Related Investments,” and together with Benchmark Component Copper Futures Contracts and other Eligible Copper Futures Contracts, “Copper Interests.”

Market conditions that USCF currently anticipates could cause CPER to invest in Other Copper-Related Investments include those allowing CPER to obtain greater liquidity or to execute transactions with more favorable pricing.

CPER invests substantially the entire amount of its assets in Eligible Copper Futures Contracts while supporting such investments by holding the amounts of its margin, collateral and other requirements relating to these obligations in Treasuries, cash and cash equivalents.

The daily holdings of CPER are available on CPER’s website at www.uscfinvestments.com.

USCF employs a “neutral” investment strategy in order to track changes in the Applicable Index regardless of whether the Applicable Index goes up or goes down.

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Accordingly, depending on the investment objective of an individual investor, the risks generally associated with investing in the commodities market and/or the risks involved in hedging may exist.

In addition, an investment in a Trust Series involves the risks that the daily changes in the price of the Trust Series’ shares, in percentage terms, will not accurately track the daily changes in the Applicable Index, in percentage terms, and that daily changes in the Applicable Index, in percentage terms, will not closely correlate with daily changes in the spot prices of the applicable commodities underlying the Applicable Benchmark Component Futures Contracts, in percentage terms.

Each Trust Series’ investment objective is for the daily changes in percentage terms of its per share NAV to reflect the daily changes in percentage terms of the Applicable Index, not to have the market price of its shares match, in dollar terms, changes in the price of the Applicable Index or the applicable commodities underlying the Applicable Benchmark Component Futures Contracts that make up the Applicable Index.

Contango and backwardation may impact the total return on investment in shares of a Trust Series relative to a hypothetical direct investment in the commodities underlying the Applicable Benchmark Component Futures Contracts that make up the Applicable Index and, in the future, it is likely that the relationship between the market prices of a Trust Series’ shares and changes in the spot prices of the commodities underlying the Applicable Benchmark Component Futures Contracts that make up the Applicable Index could be impacted by contango and backwardation.

It is important to note that this comparison ignores the potential costs associated with physically owning and storing commodities, which could be substantial.

For a more in-depth discussion of the impact of contango and backwardation, see “Item 1A.

Risk Factors” in this annual report on Form 10-K.

Furthermore, each Trust Series also purchases Treasuries and holds cash and/or cash equivalents to meet its current or potential margin or collateral requirements with respect to its investments in Applicable Interests and to hold cash not required to be used as margin or collateral.

There is not expected to be any meaningful correlation between the performance of a Trust Series’ investments in Treasuries, cash or cash equivalents and the changes in the prices of commodities or Applicable Interests.

While the level of interest earned on or the market price of these investments may in some respect correlate to changes in the prices of commodities, this correlation is not anticipated as part of the Trust Series’ efforts to meet its objective.

A Trust Series’ total portfolio composition is disclosed on the applicable Trust Series’ website on each business day that the NYSE Arca is open for trading.

For a list of each of USCI’s and CPER’s current holdings, please see www.uscfinvestments.com.

The website disclosure of portfolio holdings for each Trust Series is made daily and includes, as applicable, the name and value of each Applicable Benchmark Component Futures Contract, the specific types and values of Other Related Investments and characteristics of such Other Related Investments, the name and value of each Treasury and cash equivalent, and the amount of cash held in each Trust Series, as applicable.

Each Trust Series’ website is publicly accessible at no charge.

Each Trust Series’ assets used for margin and collateral are held in segregated accounts pursuant to the Commodity Exchange Act (the “CEA”) and CFTC regulations.

The shares issued by a Trust Series may only be purchased by Authorized Participants and only in blocks of 50,000 shares called “Creation Baskets” through the Marketing Agent.

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While USCF has made significant investments in Benchmark Component Futures Contracts on the Futures Exchanges, for various reasons, including the ability to enter into the precise amount of exposure to the commodities market and position limits on Futures Contracts, it may also invest in economically equivalent Futures Contracts other than those that compose the Benchmark Component Futures Contracts and Other Commodity-Related Investments.

To the extent that USCI invests in Other Related Investments, it would prioritize investments in contracts and instruments that are economically equivalent to the Benchmark Component Futures Contracts, including cleared swaps that satisfy such criteria, and then to a lesser extent, it would invest in other types of cleared swaps and other contracts, instruments and non-cleared swaps, such as swaps in the OTC market.

If USCI is required by law or regulation, or by one of its regulators, including a Futures Exchange, to reduce its position in one or more Benchmark Component Futures Contracts to the applicable position limit or to a specified accountability level, a substantial portion of USCI’s assets could be invested in Other Commodity-Related Investments that are intended to replicate the return on the SDCI or particular Benchmark Component Futures Contracts.

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Then, and to a lesser extent, it would invest in other types of contracts, instruments and swaps, including uncleared swaps in the OTC market.

If CPER is required by law or regulation, or by one of its regulators, including the COMEX, to reduce its position in one or more Benchmark Component Copper Futures Contracts to the applicable position limit or to a specified accountability level or if market conditions dictate it would be more appropriate to invest in Other Copper-Related Investments, a substantial portion of CPER’s assets could be invested in accordance with such priority in Other Copper-Related Investments that are intended to replicate the return on the SCI or particular Benchmark Component Copper Futures Contracts.

If CPER is required by law or regulation, or by one of its regulators, including the COMEX, to reduce its position in one or more Benchmark Component Copper Futures Contracts to applicable position limit or to a specified accountability level or if market conditions dictate it would be more appropriate to invest in Other Copper-Related Investments, a substantial portion of CPER’s assets could be invested in accordance with such priority in Other Copper-Related Investments that are intended to replicate the return on the SCI or particular Benchmark Component Copper Futures Contracts.

As CPER’s assets reach higher levels, CPER is more likely to exceed position limits, accountability levels or other regulatory limits and, as a result, it is more likely that it will invest in accordance with such priority in Other Copper-Related Investments at such higher levels.

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Positions may also be closed out to meet orders for Redemption Baskets, in which case the proceeds from closing the positions will not be reinvested.

The Trust Agreement contains no restrictions on the ability of USCF to change the investment objective of any Trust Series.

Notwithstanding this, USCF has no intention of changing the investment objective of any Trust Series or the manner in which it intends to achieve its investment objective.

Should USCF seek to change the investment objective of a Trust Series, such change would be reflected in an amended prospectus and would provide advance notice to investors.

What are Futures Contracts?

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The accountability levels for the commodities comprising an Applicable Index and other futures contracts traded on U.S.-based futures exchanges are not a fixed ceiling, but rather a threshold above which such exchanges may exercise greater scrutiny and control over an investor’s positions.

CPER held 100 Futures Contracts on the COMEX.

As of December 31, 2020, CPER held 741 Futures Contracts on the COMEX.

No Trust Series exceeded accountability levels imposed by the NYMEX, COMEX, CME, CBOT, KCBT or ICE Futures.

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For the year ended December 31, 2020, no Trust Series exceeded position limits imposed by the NYMEX, COMEX, CME, CBOT, KCBT or ICE Futures.

The CFTC has proposed to adopt limits on speculative positions in 25 physical commodity futures and option contracts as well as swaps that are economically equivalent to such contracts in the agriculture, energy and metals markets (the “Position Limit Rules”).

The Position Limit Rules would, among other things:

identify which contracts are subject to speculative position limits;

set thresholds that restrict the size of speculative positions that a person may hold in the spot month, other individual months, and all months combined;

create an exemption for positions that constitute bona fide hedging transactions;

impose responsibilities on DCMs and swap execution facilities (“SEFs”) to establish position limits or, in some cases, position accountability rules;

and apply to both futures and swaps across four relevant venues:

OTC, DCMs, SEFs as well as certain non-U.S.

located platforms.

The CFTC’s first attempt at finalizing the Position Limit Rules, in 2011, was successfully challenged by market participants in 2012 and, since then, the CFTC has re-proposed them and solicited comments from market participants multiple times.

At this time, it is unclear how the Position Limit Rules may affect the Trust Series, but the effect may be substantial and adverse.

By way of example, the Position Limit Rules may negatively impact the ability of a Trust Series to meet its investment objectives through limits that may inhibit USCF’s ability to sell additional Creation Baskets of a Trust Series.

See "The Commodity Interest Markets-Commodities Regulation"

in this annual report on Form 10-K for additional information.

Until such time as the Position Limit Rules are adopted, the regulatory architecture in effect prior to the adoption of the Position Limit Rules will govern transactions in commodities and related derivatives.

Under that system, the CFTC enforces federal limits on speculation in nine agricultural products (e.g., corn, wheat and soy), while futures exchanges establish and enforce position limits and accountability levels for other agricultural products and certain energy products (e.g., oil and natural gas).

As a result, a Trust Series may be limited with respect to the size of its investments in any commodities subject to these limits.

Under existing and recently adopted CFTC regulations, for the purpose of position limits, a market participant is generally required, subject to certain narrow exceptions, to aggregate all positions for which that participant controls the trading decisions with all positions for which that participant has a 10 percent or greater ownership interest in an account or position, as well as the positions of two or more persons acting pursuant to an express or implied agreement or understanding with that participant (the “Aggregation Rules”).

The Aggregation Rules will also apply with respect to the Position Limit Rules if and when such Position Limit Rules are adopted.

On October 15, 2020, the CFTC approved a final rule that amends the existing federal position limits regime set forth in Part 150 of the CFTC’s regulations as well as the framework for exchange-set position limits and exemptions (such final rule, the “Position Limits Rule”).

The Position Limits Rule establishes federal position limits for 25 core referenced futures contracts (comprised of agricultural, energy and metals futures contracts), futures and options linked to the core referenced futures contracts, and swaps that are economically equivalent to the core referenced futures contracts.

The Position Limits Rule sets position limits for the spot month and non-spot month;

however, the non-spot month limits only apply in respect of the agricultural futures contracts that are currently subject to position limits under Part 150 of the CFTC regulations (the “legacy agricultural contracts”).

With respect to regulatory oversight, the Position Limits Rule delegates authority to designated contract markets and swap execution facilities to oversee certain aspects of the position limits framework.

In addition to setting the federal position limits, the Position Limits Rule also provides several exemptions from such position limits, including an expanded list of enumerated bona fide hedge exemptions and certain spread exemptions.

Further, the Position Limits Rule sets forth two alternative processes for pursuing an exemption for non-enumerated hedge positions.

Other than for the legacy agricultural contracts, compliance with the limits imposed by the Position Limits Rule will not be required until 2022, except that economically equivalent swaps need not comply with the Position Limits Rule until 2023.

Certain Applicable Benchmark Component Futures Contracts will be subject to position limits under the Position Limits Rule, and the Trust Series’ trading does not qualify as an enumerated bona fide hedge.

Accordingly, the Position Limits Rule could negatively impact the ability of the Trust Series to meet their investment objectives by inhibiting USCF’s ability to effectively invest the proceeds from sales of Creation Baskets of the Trust Series in particular amounts and types of its permitted investments.

Until such time as compliance with the Position Limits Rule is required, the regulatory architecture in effect prior to the adoption of the Position Limit Rules will govern transactions in commodities and related derivatives.

Under that system, the CFTC enforces federal limits on speculation in the nine legacy agricultural contracts, while futures exchanges establish and enforce position limits and accountability levels for other agricultural products and certain energy products (e.g., oil and natural gas).

Under existing CFTC regulations and the Position Limits Rule, for the purpose of position limits, a market participant is generally required, subject to certain narrow exceptions, to aggregate all positions for which that participant controls the trading decisions with all positions for which that participant has a 10 percent or greater ownership interest in an account or position, as well as the positions of two or more persons acting pursuant to an express or implied agreement or understanding with that market participant (the “Aggregation Rules”).

Price Volatility.

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What is the SDCI?

The SDCI was developed based upon academic research by Yale University professors Gary B.

Gorton and K.

Geert Rouwenhorst, and Hitotsubashi University professor Fumio Hayashi.

The SDCI is a commodity sector index designed to broadly represent major commodities while overweighting the components that are assessed to be in a low inventory state and underweighting the components assessed to be in a high inventory state.

The SDCI is designed to reflect the performance of a fully margined or collateralized portfolio of 14 eligible commodity futures contracts with equal weights, selected each month from a universe of 27 eligible commodity futures contracts.

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The overall return on the SDCI is generated by two components:

(i) uncollateralized returns from the Applicable Benchmark Component Futures Contracts comprising the SDCI and (ii) a daily fixed income return reflecting the interest earned on a hypothetical 3-month U.S.

(i) uncollateralized returns from the Benchmark Component Futures Contracts comprising the SDCI and (ii) a daily fixed income return reflecting the interest earned on a hypothetical 3-month U.S.

Treasury Bill collateral portfolio, calculated using the weekly auction rate for the 3-Month U.S.

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SHIM is the owner of the SDCI.

The SDCI is composed of physical non-financial commodity futures contracts with active and liquid markets traded upon futures exchanges in major industrialized countries.

Currently, the SDCI is composed of physical non-financial commodity futures contracts with active and liquid markets traded upon futures exchanges in major industrialized countries.

The futures contracts are denominated in U.S.

dollars and weighted equally by notional amount.

The SDCI currently reflects commodities in six commodity sectors:

energy ( e.g ., crude oil, natural gas, heating oil, etc.), precious metals ( e.g ., gold, silver platinum), industrial metals ( e.g ., zinc, nickel, aluminum, copper, etc.), grains ( e.g., wheat, corn, soybeans, etc.), softs ( e.g ., sugar, cotton, coffee, cocoa), and livestock ( e.g ., live cattle, lean hogs, feeder cattle).

The SDCI currently reflects commodities in five commodity sectors:

petroleum (e.g., crude oil, heating oil, etc.), precious metals (e.g., gold, silver platinum), industrial metals (e.g., zinc, nickel, aluminum, copper, etc.), grains (e.g., wheat, corn, soybeans, etc.), and non-primary sector (e.g., sugar, cotton, coffee, cocoa, natural gas, live cattle, lean hogs, feeder cattle).

Table 1 below lists the eligible commodities, the relevant futures exchange on which the futures contract is listed and quotation details.

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USD/metric ton

Commodity Symbol

Allowed Contracts

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All 12 Calendar Months

Feeder Cattle

Jan, Mar, Apr, May, Aug, Sep, Oct, Nov

Feb, Apr, Jun, Jul, Aug, Oct, Dec

Feb, Apr, Jun, Aug, Oct, Dec

Jan, Mar, May, Jul, Aug, Sep, Oct, Dec

Mar, May, Jul, Sep, Dec

Jan, Mar, May, Jul, Aug, Sep, Nov

Jan, Mar, May, Jul, Aug, Nov

Jan, Mar, May, Jul, Aug, Sep, Oct, Dec

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Industrial Metals

All 12 Calendar Months

Mar, May, Jul, Sep, Dec

Industrial Metals

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Mar, May, Jul, Sep, Dec

Non-Primary Sector

All 12 Calendar Months

Feeder Cattle

Non-Primary Sector

Jan, Mar, Apr, May, Aug, Sep, Oct, Nov

Non-Primary Sector

Feb, Apr, Jun, Jul, Aug, Oct, Dec

Non-Primary Sector

Feb, Apr, Jun, Aug, Oct, Dec

Non-Primary Sector

Mar, May, Jul, Sep, Dec

Non-Primary Sector

Mar, May, Jul, Sep, Dec

Non-Primary Sector

Mar, May, Jul, Dec

Non-Primary Sector

Mar, May, Jul, Oct

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Commodity Selection

Fourteen of the 27 eligible Futures Contracts are selected for inclusion in the SDCI for the next month, subject to the constraint that each of the six commodity sectors is represented by at least one commodity.

Fourteen of the 27 eligible Futures Contracts are selected for inclusion in the SDCI for the next month, subject to the constraint that each of the four commodity sectors (excluding non-primary sector) is represented by at least one commodity.

The methodology used to select the 14 Futures Contracts is based solely on quantitative data using observable futures prices and is not subject to human bias.

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1) The annualized percentage price difference between the closest-to-expiration Futures Contract and the next closest-to-expiration Futures Contract is calculated for each of the 27 eligible Futures Contracts on USCI’s Selection Date.

The seven commodities with the highest percentage price difference are selected.

2) For the remaining 20 eligible commodities, the percentage price change of each commodity over the previous year is calculated, as measured by the change in the price of the closest-to-expiration Futures Contract on the Selection Date from the price of the closest-to-expiration Futures Contract a year prior to USCI’s Selection Date.

The seven commodities with the highest percentage price change are selected.

When evaluating the data from the second step, all six commodity sectors must be represented.

If the selection of the seven additional commodities with the highest price change fails to meet the overall diversification requirement that all six commodity sectors are represented in the SDCI, the commodity with the highest price change among the commodities of the omitted sector(s) would be substituted for the commodity with the lowest price change among the seven additional commodities.

The 14 commodities with the highest percentage price difference are selected.

When evaluating the data from the first step, all four primary commodity sectors must be represented (Petroleum, Grains, Industrial Metals and Precious Metals).

If the selection of the 14 commodities with the highest percentage price difference fails to meet the overall diversification requirement that all four primary commodity sectors are represented in the SDCI, the commodity with the highest percentage price difference among the commodities of the omitted primary sector(s) would be substituted for the commodity with the lowest percentage price difference among the fourteen commodities.

The 14 commodities selected are included in the SDCI for the next month on an equally-weighted basis.

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At the end of Selection Date, the signals are observed and on the first day following Selection Date a new portfolio is constructed that is equally weighted in terms of notional positions in the newly selected contracts.

Changes to the SDCI

The above discussion about the SDCI is based on the current composition of the SDCI, which was revised effective December 24, 2020.

Beginning with the commodity selection process that commenced on December 24, 2020, SHIM revised the composition of the SDCI to consolidate the six commodity sectors that comprised the index into five sectors.

Specifically, prior to December 24, 2020, the SDCI reflected commodities in six commodity sectors:

energy (e.g., crude oil, natural gas, heating oil, etc.), precious metals (e.g., gold, silver platinum), industrial metals (e.g., zinc, nickel, aluminum, copper, etc.), grains (e.g., wheat, corn, soybeans, etc.), softs (e.g., sugar, cotton, coffee, cocoa), and livestock (e.g., live cattle, lean hogs, feeder cattle).

Table 3 below lists the previously-existing commodity sectors.

This Table 3 was replaced by Table 2 above effective December 24, 2020.

Allowed Contracts

All 12 Calendar Months

Feeder Cattle

Jan, Mar, Apr, May, Aug, Sep, Oct, Nov

Feb, Apr, Jun, Jul, Aug, Oct, Dec

Feb, Apr, Jun, Aug, Oct, Dec

Jan, Mar, May, Jul, Aug, Sep, Oct, Dec

Mar, May, Jul, Sep, Dec

Jan, Mar, May, Jul, Aug, Sep, Nov

Jan, Mar, May, Jul, Aug, Sep, Oct, Dec

Wheat (Soft Red Winter)

Mar, May, Jul, Sep, Dec

Industrial Metals

All 12 Calendar months

Industrial Metals

All 12 Calendar Months

Industrial Metals

All 12 Calendar Months

Industrial Metals

All 12 Calendar Months

Industrial Metals

All 12 Calendar Months

Industrial Metals

All 12 Calendar Months

Precious Metals

Feb, Apr, Jun, Aug, Oct, Dec

Precious Metals

Jan, Apr, Jul, Oct

Precious Metals

Mar, May, Jul, Sep, Dec

Mar, May, Jul, Dec

Mar, May, Jul, Oct

In addition, beginning on December 24, 2020, SHIM revised the commodity selection process for the SDCI.

Prior to this date, the commodity selection for the SDCI operated as follows:

Monthly commodity selection was a two-step process based upon examination of the relevant futures prices for each commodity:

1) The annualized percentage price difference between the closest-to-expiration Futures Contract and the next closest-to-expiration Futures Contract was calculated for each of the 27 eligible Futures Contracts on USCI’s Selection Date.

The seven commodities with the highest percentage price difference were selected.

2) For the remaining 20 eligible commodities, the percentage price change of each commodity over the previous year was calculated, as measured by the change in the price of the closest-to-expiration Futures Contract on the Selection Date from the price of the closest-to-expiration Futures Contract a year prior to USCI’s Selection Date.

The seven commodities with the highest percentage price change were selected.

When evaluating the data from the second step, all six commodity sectors must have been represented.

If the selection of the seven additional commodities with the highest price change failed to meet the overall diversification requirement that all six commodity sectors were represented in the SDCI, the commodity with the highest price change among the commodities of the omitted sector(s) would be substituted for the commodity with the lowest price change among the seven additional commodities.

The 14 commodities selected were included in the SDCI for the next month on an equally-weighted basis.

Due to the dynamic monthly commodity selection, the sector weights would vary from approximately 7% to 43% over time, depending on the price observations each month.

The Selection Date for the SDCI was the fifth business day prior to the end of that calendar month.

What is the SCI?

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a) the copper futures curve is assessed to be in either backwardation or contango (as discussed below);

b) the annualized percentage price difference between the Closest-to-Expiration Eligible Copper Futures Contract and each of the Next Four Eligible Copper Futures Contracts is calculated.

b) the annualized percentage price difference between the Closest-to-Expiration Eligible Copper Futures Contract and each of the Next Four Eligible Copper Futures Contracts are identified.

For each month, the Closest-to-Expiration Eligible Copper Futures Contract and the Next Four Eligible Copper Futures Contracts are as follows:

Closest-to-Expiration

Eligible Futures Contract

Closest to Expiration Futures Contract

Eligible Futures Contracts

A futures curve in backwardation occurs when the price of the closest-to-expiration contract is greater than or equal to the price of the third closest-to-expiration contract.

These contracts will have expirations that are approximately two months apart.

These contracts will have expirations that are approximately two or three months apart.

A curve not in backwardation is defined as being in contango, which occurs when the price of the closest-to-expiration contract is less than the price of the third closest-to-expiration contract.

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If the copper futures curve is in backwardation on the Selection Date, the SCI takes positions in the two Eligible Copper Futures Contracts with the highest annualized percentage price difference, each, weighted at 50%.

A hypothetical example is included below, with the two selected Eligible Copper Futures Contracts shaded below (the selected commodities are ranked 1 and 2):

A hypothetical example is included below, with the selected Eligible Copper Futures Contract shaded below:

Copper Futures Contract

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Nearest-to-maturity

Third nearest-to-maturity

Next nearest-to-maturity

Eligible Copper Futures Contracts

2b) Contango:

If the copper futures curve is in contango, then the SCI takes positions in three Eligible Copper Futures Contracts, as follows:

If the copper futures curve is in contango, then the SCI takes positions in first three Eligible Copper Futures Contracts, as follows:

first, the SCI takes positions in the two Eligible Copper Futures Contracts with the highest annualized percentage price difference, each weighted at 25%;

then, the SCI also takes a position in the closest-to-expiration December Eligible Future Contract that has expiration more distant than the fourth of the Next Four Eligible Copper Futures Contracts for the applicable month, which position is weighted at 50%.

then, the SCI also takes a position in the closest-to-expiration December Eligible Futures Contract that has expiration more distant than the fourth of the Next Four Eligible Copper Futures Contracts for the applicable month, which position is weighted at 50%.

A hypothetical example is included below, with the next two selected Eligible Copper Futures Contracts shaded below (the selected commodities are ranked 1-2):

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Nearest-to-maturity

Third nearest-to-maturity

Next nearest-to-maturity

Eligible Copper Futures Contracts

Due to the dynamic monthly weighting calculation, the individual weights will vary-over time, depending on the price observations each month.

CPER’s Selection Date for the SCI is the last business day of the calendar month.

CPER’s Selection Date for the SCI is the 10th business day of the calendar month.

The following graph shows the weights of the Benchmark Component Copper Futures Contracts selected for inclusion in the SCI as of December 31, 2020.

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Rebalancing Period

The SCI is rebalanced during the first 4 business days of each calendar month, when existing positions are placed by new positions and weightings based on the signals used for contract selection on the last business day of the prior calendar month as outlined above.

The SCI is rebalanced during the first four business days of each calendar month, when existing positions are placed by new positions and weightings based on the signals used for contract selection on last business day of the prior calendar month as outlined above.

Changes to the SCI effective on December 31, 2021

Currently, the SCI can be comprised of two or three Eligible Copper Futures Contracts.

Beginning with the commodity selection process scheduled to occur on December 31, 2020, the rebalancing period for the SCI will change from the first four business days of each month to the 11th-14th business days of each month, based on signals used for contract selection on the 10th business day of each month, rather than the last business day of each month.

As a result, when commodity selection occurs for the SCI on January 15, 2021 and going forward, the SCI will be revised as follows:

the number of Eligible Copper Futures Contracts will be reduced and the SCI itself will be comprised of one or three Eligible Copper Futures Contracts.

In addition, the existing contract selection and weighting process will be updated to reflect the following:

New Contract Selection and Weighting

Weights for each of the Benchmark Component Copper Futures Contracts are determined for the next month.

The methodology used to calculate the SCI weighting is based solely on quantitative data using observable futures prices and is not subject to human bias.

The monthly weighting selection is a process based upon examination of the relevant futures prices for copper:

1) On CPER’s Selection Date (“CPER’s Selection Date”):

a) the copper futures curve is assessed to be in either backwardation or contango (as discussed below);

b) the Three Eligible Copper Futures Contracts are identified.

For each month, the Three Eligible Copper Futures Contracts are as follows

Closest to Expiration Futures Contract

Eligible Futures Contracts

A futures curve in backwardation occurs when the price of the closest-to-expiration Allowed Contract is greater than or equal to the price of the next closest-to-expiration Allocated Contract.

These contracts will have expirations that are approximately two or three months apart.

A curve not in backwardation is defined as being in contango, which occurs when the price of the closest-to-expiration contract is less than the price of the next closest-to-expiration contract.

2a) Backwardation:

If the copper futures curve is in backwardation on the Selection Date, the SCI takes positions in the first Eligible Copper Futures Contract, weighted at 100%.

A hypothetical example is included below, with the selected Eligible Copper Futures Contract shaded below:

Copper Futures Contract

Expiration Date

Nearest-to-maturity

Next nearest-to-maturity

Eligible Copper Futures Contracts

2b) Contango:

If the copper futures curve is in contango, then the SCI takes positions in first three Eligible Copper Futures Contracts, each position is weighted at 33.33%.

A hypothetical example is included below, with the three selected Eligible Copper Futures Contracts indicated below:

Copper Futures Contract – Expiration Date – Contract Price

Nearest-to-maturity

Next nearest-to-maturity

Eligible Copper Futures Contracts

Due to the dynamic monthly weighting calculation, the individual weights will vary-over time, depending on the price observations each month.

CPER’s Selection Date for the SCI is the 10th business day of the calendar month.

Treasuries, Cash and Cash Equivalents

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While USCF does not intend to leverage the assets of any Trust Series, it is not prohibited from doing so under the Trust Agreement.

Although permitted to do so under the Trust Agreement, the Trust Series do not intend to leverage their assets by making investments beyond their potential ability to meet the potential margin and collateral obligations relating to such investments.

Consistent with this, each Trust Series’ investment decisions will take into account the need for the relevant Trust Series to make permitted investments that also allow it to maintain adequate liquidity to meet its margin and collateral requirements and to avoid, to the extent reasonably possible, the Trust Series becoming leveraged, including by its holding of assets that have a high probability of having a value of less than zero.

Borrowings are not used by any Trust Series unless it is required to borrow money in the event of physical delivery, if it trades in cash commodities, or for short-term needs created by unexpected redemptions.

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Who are the Service Providers?

In its capacity as the Custodian for each Trust Series, BBH&Co.

may hold each Trust Series’ Treasuries, cash and/or cash equivalents pursuant to a custodial agreement.

is also the registrar and transfer agent for the shares.

In addition, in its capacity as Administrator for each Trust Series, BBH&Co.

performs certain administrative and accounting services for each Trust Series and prepares certain SEC, NFA and CFTC reports on behalf of each Trust Series.

USCF pays BBH&Co.’s fees for these services.

BBH&Co.’s principal business address is 50 Post Office Square, Boston, MA 02110-1548.

BBH&Co., a private bank founded in 1818, is neither a publicly held company nor insured by the Federal Deposit Insurance Corporation.

is authorized to conduct a commercial banking business in accordance with the provisions of Article IV of the New York State Banking Law, New York Banking Law §§160–181, and is subject to regulation, supervision, and examination by the New York State Department of Financial Services.

is also licensed to conduct a commercial banking business by the Commonwealths of Massachusetts and Pennsylvania and is subject to supervision and examination by the banking supervisors of those states.

Custodian, Registrar, Transfer Agent, and Administrator

USCF engaged The Bank of New York Mellon ("BNY Mellon"), a New York corporation authorized to do a banking business ("BNY Mellon"), to provide each Trust Series and each of the Related Public Funds with certain custodial, administrative and accounting, and transfer agency services, pursuant to the following agreements with BNY Mellon dated as of March 20, 2020 (together, the "BNY Mellon Agreements"), which were effective as of April 1, 2020:

(i) a Custody Agreement;

(ii) a Fund Administration and Accounting Agreement;

and (iii) a Transfer Agency and Service Agreement.

USCF pays the fees of BNY Mellon for its services under the BNY Mellon Agreements and such fees are determined by the parties from time to time.

Brown Brothers Harriman and Co.

("BBH&Co.") previously served as the Administrator, Custodian, Transfer Agent and Fund Accounting Agent for each Trust Series and the Related Public Funds prior to BNY Mellon commencing such services on April 1, 2020.

Certain fund accounting and fund administration services rendered by BBH&Co.

to each Trust Series and the Related Public Funds terminated on May 31, 2020 to allow for the transition to BNY Mellon.

Each Trust Series also employs ALPS Distributors as its marketing agent USCF pays the Marketing Agent an annual fee.

In no event may the aggregate compensation paid to the Marketing Agent and any affiliate of USCF for distribution-related services in connection with the offering of shares exceed ten percent (10%) of the gross proceeds of the offering.

Marketing Agent

ALPS Distributors’ principal business address is 1290 Broadway, Suite 1100, Denver, CO 80203.

ALPS Distributors is a broker-dealer registered with the SEC and is a member of the Financial Industry Regulatory Authority (“FINRA”) and Securities Investor Protection Corporation.

Futures Commission Merchants

RBC Capital Markets, LLC

On June 25, 2018, the Trust on behalf of USCI and CPER entered into a Futures and Cleared Derivatives Transactions Customer Account Agreement with RBC Capital Markets, LLC (“RBC Capital” or “RBC”) to serve as the futures commission merchant (“FCM”) for USCI and CPER.

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For the period June 25, 2018 and after, USCI and CPER pay RBC Capital commissions for executing and clearing trades on their behalf.

RBC Capital’s primary address is 500 West Madison Street, Suite 2500, Chicago, Illinois 60661.

RBC Capital’s primary address is 3 World Financial Center, 200 Vesey St., New York, NY 10281.

As of June 25, 2019, RBC Capital became the primary futures clearing broker for USCI and CPER.

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The Canadian class actions, and one other U.S.

action that is purportedly brought on behalf of different classes of plaintiffs also remain pending.

action that is purportedly brought on behalf of different classes of plaintiffs, and an action filed in Israel, remain pending.

Based on the facts currently known, it is not possible at this time for us to predict the ultimate outcome of these investigations or proceedings or the timing of their resolution.

On July 31, 2015, RBC Capital was added as a new defendant in a pending putative class action initially filed in November 2013 in the United States District Court for the Southern District of New York.

The action is brought against multiple foreign exchange dealers and alleges collusive behavior, among other allegations, in foreign exchange trading.

Based on the facts currently known, the ultimate resolution of these collective matters is not expected to have a material adverse effect on RBC.

On April 13, 2015, RBC Capital’s affiliate, Royal Bank of Canada Trust Company (Bahamas) Limited (“RBC Bahamas”), was charged in France with complicity in tax fraud.

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Please see RBC Capital’s Form BD, which is available on the FINRA BrokerCheck program, for more details.

The FCM will act only as clearing broker for a Trust Series and as such will be paid commissions for executing and clearing trades on behalf of a Trust Series.

Each FCM will act only as clearing broker for a Trust Series and as such will be paid commissions for executing and clearing trades on behalf of a Trust Series.

No FCM has passed upon the adequacy or accuracy of this annual report on Form 10-K.

No FCM will act in any supervisory capacity with respect to USCF or participate in the management of USCF or a Trust Series.

RBC is not affiliated with any Trust Series or USCF.

Therefore, neither USCF nor any Trust Series believes that there are any conflicts of interest with RBC or its trading principals arising from its acting as the FCM for the Trust Series.

RBC Capital is not affiliated with any Trust Series or USCF.

Therefore, neither USCF nor any Trust Series believes that there are any conflicts of interest with RBC Capital or its trading principals arising from its acting as the FCM for the Trust Series.

Commodity Trading Advisor

Currently, USCF employs SummerHaven as a commodity trading advisor.

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SHIM’s principal business address is 1266 East Main Street, Soundview Plaza, Fourth Floor, Stamford, CT 06902.

Summary of Risk Factors

Investing in our securities involves a high degree of risk.

You should carefully consider the information in “Item 1A.

Factors”, including, but not limited to, the following risks:

• COVID-19 and other infectious disease outbreaks could negatively affect the valuation and performance of a Trust Series' investments.

• The 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.

• An 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.

• Historical performance of a Trust Series and its Applicable Benchmark Component Futures Contracts is not indicative of future performance.

• The market price at which investors buy or sell shares may be significantly more or less than NAV.

• Daily percentage changes in a Trust Series’ NAV may not correlate with daily percentage changes in the price of the Applicable Index.

• An investment in a Trust Series is not a proxy for investing in the commodities markets, and the daily percentage changes in the price of the Applicable Benchmark Component Futures Contracts, or the NAV of the Trust Series, may not correlate with daily percentage changes in the spot price of the physical commodities that underlie the Applicable Index.

• Daily 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.

• The price relationship between each Applicable Index at any point in time and the Futures Contracts that will become the Applicable Benchmark Component Futures Contracts on the next rebalancing date will vary and may impact both a Trust Series’ total return and the degree to which its total return tracks that of commodity price indices.

• Accountability 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 Applicable Index.

• Risk mitigation measures imposed by the Trust Series’ FCMs have the potential to cause tracking error by limiting a Trust Series’ investments, including its ability to fully invest in the Applicable Benchmark Component Futures Contract and other Futures Contracts, which could cause the price of the Trust Series’ shares to substantially vary from the price of the Applicable Benchmark Component Futures Contracts.

• An investor’s tax liability may exceed the amount of distributions, if any, on its shares.

• An investor’s allocable share of taxable income or loss may differ from its economic income or loss on its shares.

• Items of income, gain, deduction, loss and credit with respect to shares could be reallocated, and for taxable periods beginning after December 31, 2017, the Trust Series could be liable for U.S.

Federal income tax, if the U.S.

Internal Revenue Service (“IRS”) does not accept the assumptions and conventions applied by the Trust Series in allocating those items, with potential adverse consequences for an investor.

• Each Trust Series could be treated as a corporation for federal income tax purposes, which may substantially reduce the value of the shares.

• The Trust is organized as a Delaware statutory trust, but each Trust Series is taxed as a limited partnership in accordance with the provisions of the Trust Agreement and applicable state law, and therefore, each Trust Series has a more complex tax treatment than traditional mutual funds.

• If a Trust Series is required to withhold tax with respect to any Non-U.S.

shareholders, the cost of such withholding may be borne by all shareholders.

• The impact of U.S.

tax reform on the Trust Series is uncertain.

• Each 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 or held by special purpose or structured vehicles.

• Valuing OTC derivatives may be less certain that actively traded financial instruments.

Fees of USCI and CPER

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Service Provider

Compensation Paid by Each Trust Series and USCF

Compensation Paid by USCF

United States Commodity Funds LLC, Sponsor

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In addition, an asset-based charge of (a) 0.06% for the first $500 million of the Trust Series’ and the Related Public Funds’ combined net assets, (b) 0.0465% for the Trust Series’ and the Related Public Funds’ combined net assets greater than $500 million but less than $1 billion, and (c) 0.035% once the Trust Series’ and the Related Public Funds’ combined net assets exceed $1 billion.

BNY Mellon – Custodian and Administrator (4)

Provides custody, fund accounting fund administration and transfer agency services to the Trust Series and the Related Public Funds' based on average AUM.

The annual fees for the Trust Series and the combined Related Public Funds' may range from $0.4 million to $2.4 million depending on average AUM for any given year.

ALPS Distributors - Marketing Agent

Each Trust Series pays 0.06% on assets up to $3 billion and 0.04% on assets in excess of

Each Trust Series pays 0.06% on assets up to $3 billion and 0.04% on assets in excess of $3 billion.

WFS/RBC, FCM and Clearing Broker

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(2) USCF pays this compensation.

provided certain fund accounting and fund administration services to USO through May 31, 2020.

(4) BNY Mellon has served as the Custodian and Administrator of USCI and CPER since April 1, 2020.

Asset-based fees are calculated on a daily basis (accrued at 1/366 of the applicable percentage of total net assets on that day) and paid on a monthly basis.

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(13) Effective January 1, 2016, USCF permanently lowered the management fee to 0.65% (65 basis points) per annum of average daily total net assets for CPER.

From May 1, 2014 and through December 31, 2015, USCF contractually lowered the management fee to 0.65% (65 basis points) per annum of average daily total net assets for CPER.

From May 1, 2014 through December 31, 2015, USCF contractually lowered the management fee to 0.65% (65 basis points) per annum of average daily total net assets for CPER.

From May 29, 2012 through April 30, 2014, USCF waived the management fee paid by CPER on a discretionary basis from 0.95% (95 basis points) per annum of average daily total net assets to 0.65% per annum of average daily total net assets.

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In addition, as of July 8, 2011, CPER became responsible for paying the fees and expenses of the independent directors who also serve as audit committee members of CPER, the other Trust Series and the Related Public Funds.

CPER shares the fees and expenses on a pro rata basis with the other Trust Series and with each Related Public Fund, as described above, based on the relative assets of each fund computed on a daily basis.

CPER shares the fees and expenses on a pro rata basis with the other Trust Series and with each Related Public Fund, as described above, based on the relative assets of each fund on a daily basis.

These fees and expenses for the year ended December 31, 2020 were $585,896 for the Trust Series and the Related Public Funds.

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The Administrator has been appointed registrar and transfer agent for the purpose of transferring shares in certificated form.

The Administrator keeps a record of all shareholders and holders of the shares in certificated form in the registry.

The Administrator keeps a record of all

shareholders and holders of the shares in certificated form in the registry.

The beneficial interests in such shares are held in book-entry form through participants and/or accountholders in the Depository Trust Company (“DTC”).

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New York time) for the Futures Contracts traded on the Futures Exchanges, but calculates or determines the value of all other investments of a Trust Series (including Other Related Investments) using market quotations, if available, or other information customarily used to determine the fair value of such investments as of the earlier of the close of the NYSE Arca or 4:00 p.m.

New York time, in accordance with the Administrative Agency Agreement among BBH&Co., the Trust Series and USCF.

New York time, in accordance with the Administrative Agency Agreement among the Administrator, the Trust Series and USCF.

“Other information” customarily used in determining fair value includes information consisting of market data in the relevant market supplied by one or more third parties including, without limitation, relevant rates, prices, yields, yield curves, volatilities, spreads, correlations or other market data in the relevant market;

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The indicative fund value is based on the prior day’s per share NAV and moves up and down solely according to changes in the price of the Applicable Index as reported on Bloomberg or another reporting service.

The Trust reserves the right to adjust the share price of USCI or CPER in the future to maintain convenient trading ranges for investors.

Any adjustments would be accomplished through stock splits or reverse stock splits.

Such splits would decrease (in the case of a split) or increase (in the case of a reverse split) the proportionate NAV per share, but would have no effect on the net assets of the relevant Trust Series or the proportionate voting rights of shareholders.

Creation and Redemption of Shares

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Authorized Participants pay each Trust Series a $350 transaction fee for each order placed to create one or more Creation Baskets or to redeem one or more Redemption Baskets.

The transaction fee may be reduced, increased or otherwise changed by USCF.

Authorized Participants who make deposits with a Trust Series in exchange for baskets receive no fees, commissions or other form of compensation or inducement of any kind from either the Trust or USCF, and no such person will have any obligation or responsibility to the Trust or USCF to effect any sale or resale of shares.

As of December 31, 2020, 10 Authorized Participants had entered into agreements with USCF on behalf of USCI.

During the year ended December 31, 2019, USCI did not issue any Creation Baskets and redeemed 144 Redemption Baskets.

During the year ended December 31, 2020, USCI issued 13 Creation Baskets and redeemed 48 Redemption Baskets.

As of December 31, 2020, 10 Authorized Participants had entered into agreements with USCF on behalf of CPER.

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Prior to the delivery of baskets for a purchase order, the Authorized Participant must also have wired to the Custodian the non-refundable transaction fee due for the purchase order.

Authorized Participants may not withdraw a creation request, except as otherwise set forth in the procedures in the Authorized Participant Agreement.

Authorized Participants may not withdraw a Creation Basket request, except as otherwise set forth in the procedures in the Authorized Participant Agreement.

The manner by which creations are made is dictated by the terms of the Authorized Participant Agreement.

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If an Authorized Participant fails to consummate (1) and (2), the order shall be cancelled.

The number and type of contracts specified shall be determined by USCF, in its sole discretion, to meet a Trust Series’ investment objective and shall be purchased as a result of the Authorized Participant’s purchase of shares.

The number and types of contracts specified shall be determined by USCF, in its sole discretion, to meet a Trust Series’ investment objective and shall be purchased as a result of the Authorized Participant’s purchase of shares.

Determination of Required Deposits

The total deposit required to create each basket (“Creation Basket Deposit”) is the amount of Treasuries and/or cash that is in the same proportion to the total assets of a Trust Series (net of estimated accrued but unpaid fees, expenses and other liabilities) on the purchase order date as the number of shares to be created under the purchase order is in proportion to the total number of shares outstanding on the purchase order dates.

The total deposit required to create each Creation Basket (“Creation Basket Deposit”) is the amount of Treasuries and/or cash that is in the same proportion to the total assets of a Trust Series (net of estimated accrued but unpaid fees, expenses and other liabilities) on the purchase order date as the number of shares to be created under the purchase order is in proportion to the total number of shares outstanding on the purchase order date.

USCF determines, directly in its sole discretion or in consultation with the Administrator, the requirements for Treasuries and cash, including the remaining maturities of the Treasuries and proportions of Treasuries and cash that may be included in deposits to create baskets.

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An Authorized Participant who places a purchase order is responsible for transferring to a Trust Series’ account with the Custodian the required amount of Treasuries and/or cash by noon New York time on the second business day following the purchase order date.

Upon receipt of the deposit amount, the Administrator directs DTC to credit the number of baskets ordered to the Authorized Participant’s DTC account on the second business day following the purchase order date.

The expense and risk of delivery and ownership of Treasuries until such Treasuries have been received by the Custodian on behalf of each Trust Series shall be borne solely by the Authorized Participant.

Because orders to purchase baskets must be placed by 10:30 a.m., New York time, but the total payment required to create a basket during the continuous offering period will not be determined until 4:00 p.m., New York time, on the date the purchase order is received, Authorized Participants will not know the total amount of the payment required to create a basket at the time they submit an irrevocable purchase order for the basket.

A Trust Series’ per share NAV and the total amount of the payment required to create a basket could rise or fall substantially between the time an irrevocable purchase order is submitted and the time the amount of the purchase price in respect thereof is determined.

A Trust Series’ NAV and the total amount of the payment required to create a basket could rise or fall substantially between the time an irrevocable purchase order is submitted and the time the amount of the purchase price in respect thereof is determined.

Rejection of Purchase Orders

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USCF will reject a redemption order if the order is not in proper form, as described in the Authorized Participant Agreement, or the fulfillment of the order in the opinion of its counsel may be illegal under applicable laws and regulations, or if circumstances outside the control of USCF, the Marketing Agent or the Custodian make it for all practical purposes not feasible for the shares to be delivered under the Redemption Order.

USCF may also reject a redemption order if the number of shares being redeemed would reduce the remaining outstanding shares to 100,000 shares (i.e., two baskets) or less.

USCF may also reject a redemption order if the number of shares being redeemed would reduce the remaining outstanding shares to 100,000 shares (i.e., two baskets) or less, unless USCF has reason to believe that the placer of the redemption order does in fact possess all the outstanding shares and can deliver them.

Creation and Redemption Transaction Fee

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The transaction fee may be reduced, increased or otherwise changed by USCF.

USCF shall notify DTC of any change in the transaction fee and will not implement any increase in the fee for the redemption of baskets until 30 days after the date of the notice.

USCF shall notify DTC of any change in the transaction fee and will not implement any increase in the fee for the redemption of baskets until thirty (30) days after the date of the notice.

Tax Responsibility

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Who is the Trustee?

The sole Trustee of the Trust is Wilmington Trust Company, a Delaware trust company (the “Trustee”).

Wilmington Trust, N.A.

(the “Trustee”) serves as the Trust’s corporate trustee as required under the Delaware Statutory Trust Act (“DSTA”).

USCF pays the Trustee $3,000 annually for its services to the Trust.

The Trustee is the sole trustee of the Trust.

The rights and duties of the Trustee and USCF with respect to the offering of the shares and management of the Trust Series and the shareholders are governed by the provisions of the DSTA and by the Trust Agreement.

The Trustee will accept service of legal process on the Trust in the State of Delaware and will make certain filings under the DSTA.

The Trustee does not owe any other duties to the Trust, USCF or the shareholders of the Trust Series.

The Trustee’s principal offices are located at 1100 North Market Street, Wilmington, Delaware 19890.

The Trustee is unaffiliated with USCF.

The Trustee’s duties and liabilities with respect to the offering of shares and the management of the Trust and each Trust Series are limited to its express obligations under the Trust Agreement.

The Trustee will accept service of legal process on the Trust in the State of Delaware and will make certain filings under the Delaware Statutory Trust Act.

The Trustee does not owe any other duties to the Trust, USCF or the shareholders.

The Trustee is permitted to resign upon at least sixty (60) days’ notice to USCF.

If no successor trustee has been appointed by USCF within such sixty-day period, the Trustee may, at the expense of the Trust, petition a court to appoint a successor.

The Trustee is entitled to reasonable compensation for its services from USCF or an affiliate of USCF (including the Trust), and is indemnified by USCF against any expenses it incurs relating to or arising out of the formation, operation or termination of the Trust, or any action or inaction of the Trustee under the Trust Agreement, except to the extent that such expenses result from the gross negligence or willful misconduct of the Trustee.

The Trustee is permitted to resign upon at least sixty (60) days’ notice to the Trust, provided, that any such resignation will not be effective until a successor Trustee is appointed by USCF.

USCF has the discretion to replace the Trustee.

Under the Trust Agreement, the Trustee has delegated to USCF the exclusive management and control of all aspects of the business of the Trust and the Trust Series.

The Trustee has no duty or liability to supervise or monitor the performance of USCF, nor does the Trustee have any liability for the acts or omissions of USCF.

Because the Trustee has no authority over the operation of the Trust, the Trustee itself is not registered in any capacity with the CFTC.

USCF applies substantially all of a Trust Series’ assets in Applicable Benchmark Component Futures Contracts and Other Related Investments, short-term Treasuries, cash and cash equivalents.

When a Trust Series purchases Applicable Benchmark Component Futures Contracts and certain Other Related Investments that are exchange-traded, a Trust Series is required to deposit with the FCM on behalf of the exchange a portion of the value of the contract or other interest as security to ensure payment for the obligation under the Applicable Interests at maturity.

Only the assets of the Trust and USCF are subject to issuer liability under the federal securities laws for the information contained in this prospectus and under federal securities laws with respect to the issuance and sale of the shares.

Under such laws, neither the Trustee, either in its capacity as Trustee or in its individual capacity, nor any director, officer or controlling person of the Trustee is, or has any liability as, the issuer or a director, officer or controlling person of the issuer of the shares.

The Trustee’s liability in connection with the issuance and sale of the shares is limited solely to the express obligations of the Trustee set forth in the Trust Agreement.

Under the Trust Agreement, USCF has exclusive management and control of all aspects of the Trust’s business.

The Trustee has no duty or liability to supervise the performance of USCF, nor will the Trustee have any liability for the acts or omissions of USCF.

The shareholders have no voice in the day to day management of the business and operations of the Trust Series and the Trust, other than certain limited voting rights as set forth in the Trust Agreement.

In the course of its management of the business and affairs of the Trust Series and the Trust, USCF may, in its sole and absolute discretion, appoint an affiliate or affiliates of USCF as additional sponsors and retain such persons, including affiliates of USCF, as it deems necessary to effectuate and carry out the purposes, business and objectives of the Trust.

Because the Trustee has no authority over the Trust’s operations, the Trustee itself is not registered in any capacity with the CFTC.

Use of Proceeds

USCF will cause the Trust Series to transfer the proceeds of the sale of Creation Baskets to the Custodian or another custodian for use in trading activities.

USCF will invest each Trust Series’ assets in Applicable Benchmark Component Futures Contracts and Other Related Investments, short-term Treasuries, cash and cash equivalents.

When a Trust Series purchases Applicable Benchmark Component Futures Contracts and certain Other Related Investments that are exchange-traded, the Trust Series is required to deposit with the FCM on behalf of the exchange a portion of the value of the contract or other interest as security to ensure payment for the obligation under the Applicable Interests at maturity.

This deposit is known as initial margin.

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● held in bank accounts to pay current obligations and as reserves.

In general, a Trust Series posts between 5% to 30% of the notional amount of an Applicable Interest as initial margin when entering into such Applicable Interest.

Approximately 5% to 30% of a Trust Series’ assets have normally been committed as margin for commodity futures contracts.

However, from time to time, the percentage of assets committed as margin may be substantially more, or less, than such range.

An FCM, counterparty, government agency or commodity exchange could increase margin or collateral requirements applicable to each Trust Series to hold trading positions at any time.

Ongoing margin and collateral payments will generally be required for both exchange-traded and OTC Applicable Interests based on changes in the value of the Applicable Interests.

Furthermore, ongoing collateral requirements with respect to OTC Applicable Interests are negotiated by the parties, and may be affected by overall market volatility, volatility of the underlying commodity or index, the ability of the counterparty to hedge its exposure under the Applicable Interest, and each party’s creditworthiness.

Margin is merely a security deposit and has no bearing on the profit or loss potential for any positions held.

In light of the differing requirements for initial payments under exchange-traded and OTC Applicable Interests and the fluctuating nature of ongoing margin and collateral payments, it is not possible to estimate what portion of a Trust Series’ assets will be posted as margin or collateral at any given time.

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All interest income is used for a Trust Series’ benefit.

An FCM, counterparty, government agency or commodity exchange could increase margin or collateral requirements applicable to a Trust Series to hold trading positions at any time.

Moreover, margin is merely a security deposit and has no bearing on the profit or loss potential for any positions held.

Each Trust Series’ assets posted as margin for Futures Contracts will be held in segregated accounts pursuant to CEA and CFTC regulations.

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exchanges to be offered and sold in the United States.

As discussed above, the CFTC has proposed to adopt limits on speculative positions in 25 physical commodity futures and option contracts as well as swaps that are economically equivalent to such contracts in the agriculture, energy and metals markets.

The Position Limit Rules would, among other things:

identify which contracts are subject to speculative position limits;

set thresholds that restrict the size of speculative positions that a person may hold in the spot month, other individual months, and all months combined;

create an exemption for positions that constitute bona fide hedging transactions;

impose responsibilities on DCMs and SEFs to establish position limits or, in some cases, position accountability rules;

and apply to both futures and swaps across four relevant venues:

OTC, DCMs, SEFs as well as certain non-U.S.

located platforms.

At this time, it is unclear how the Position Limit Rules may affect the Trust Series, but the effect may be substantial and adverse.

See "The Commodity Interest Markets-Commodities Regulation"

in this annual report on Form 10-K for additional information.

As a result, a Trust Series may be limited with respect to the size of its investments in any commodities subject to these limits.

The Aggregation Rules will also apply with respect to the Position Limit Rules if and when such Position Limit Rules are adopted.

As discussed above, on October 15, 2020, the CFTC approved the Position Limits Rule.

The Position Limits Rule sets position limits for the spot month and non-spot month;

Further, the Position Limits Rule sets forth two alternative processes for pursuing an exemption for non-enumerated hedge positions.

Margin Requirements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business