Posted on 24 September 2011.
United States Commodity Funds is a company that specializes in commodity-based exchange-traded funds. This company is a pioneer in this field and was the first to launch exchange-traded commodities funds that were based in crude oil and in natural gas. In 2010 it had assets that totaled nearly $5 billion.
This company specializes in a form of investment that performs like an index fund but can be traded just like any stock. Investors are particularly attracted to these funds not just because of the convenience of trading a mutual fund like a stock, but also because of their low costs and tax efficiency. In the case of United States Commodity Funds, they manage nine separate commodities-based funds, all of which investors can trade just as if they were traditional stocks.
There are some crucial differences about these exchange-traded funds, whether they are commodity-based or not. Participation in these investments is limited to authorized investors, which are usually large institutions. Also, these authorized participants can only buy and sell shares of these funds in large blocks that may contain tens of thousands of units.
United States Commodity Funds was founded in 2005 but it has already created nine commodities-based exchange-traded funds. Many of these funds are focused on energy and precious metals, which are the hottest commodities. However, it recently set up its first non-energy specific, commodity-based exchange-traded fund, the United States Commodity Index Fund. This fund focuses on a diverse set of commodities that do not belong to the same category as energy or precious metal commodities.
The nine exchange-traded commodity funds can be divided into four categories. They manage four crude oil funds and a heating oil fund. They also manage two natural gas funds. In addition, United States Commodity Funds also manages a gasoline fund and the United States Commodity Index Fund.
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