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United States Commodity Funds Slashes Fees on 4 ETFs


As competition heats up in the exchange traded fund space, United States Commodity Funds is also jumping into the so-called fee war fray, lowering costs on four of its products.

According to a press release, the United States Commodity Index Fund (USCI) will have a 0.80% total expense ratio, lowered from 0.95%. Additionally, the United States Copper Index ETF (CPER) , United States Agriculture Index Fund (USAG) and United States Metals Index Fund (USMI) now have a 0.65% expense ratio, also down from 0.95%. [April’s Best ETFs: Commodities Cruise]

“These funds were designed with the buy-and-hold investor in mind, and we want to demonstrate that we also view these as long-term investments.” John Hyland, USCF’s Chief Investment Officer, said in the press release.  “We believe this will be an effective longer-term strategy to continue to grow our assets.” [Diversify with Commodity ETFs as Correlation to Equities Declines]

The USCommodity Index funds try to reflect the performance of commodity futures contracts.

Specifically, USCI can hold 14 contracts selected from Brent oil, WTI oil, gasoil, heating oil, natural gas, unleaded gasoline, feeder cattle, lean hogs, live cattle, bean oil, corn, soybeans, soybean meal, wheat, aluminum, copper, lead, nickel, tin, zinc, gold, platinu, silver, cocoa, coffee, cotton or sugar.

CPER tracks an index of copper futures. The index is reconstituted each month and selects two or three copper futures contracts. For the month of May, it currently holds Copper Sep14 and Copper Oct14 contracts.

USAG selects 14 futures contracts selected from soybeans, soybean meal, cotton, corn, canola, live cattle, soft red winter wheat, sugar, feeder cattle, hard red winter wheat, cocoa, lean hogs, soybean oil and coffee.

USMI follows a group of precious and industrial metals contracts, including primary aluminum, copper, nickel, zinc, lead, tin, platinum, silver, palladium and gold.

For more information on the ETF industry, visit our current affairs category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.