10-K: UGA 2025 Annual Report: Gasoline Fund NAV Declines Amid Market Shifts

United States Gasoline Fund, LP reported a 1.86% decrease in its per share Net Asset Value for the year ended December 31, 2025, despite outperforming its benchmark by 2.41%.

Summary

• UGA's investment objective is to track the daily percentage changes of the spot price of gasoline (RBOB) as measured by the Benchmark Futures Contract.
• The fund aims for its average daily NAV change over 30 valuation days to be within +/10% of the Benchmark Futures Contract's average daily change.
• For the year ended December 31, 2025, UGA's per share NAV decreased by 1.86%, from $62.94 to $61.77.
• The Benchmark Futures Contract price for gasoline decreased by approximately 14.64% during 2025, starting at $2.0092/gallon and ending at $1.7150/gallon.
• UGA's actual total return of (1.86)% for 2025 outperformed its benchmark's estimated total return of (4.27)% by 2.41%.
• Average daily total net assets decreased to $76,965,346 in 2025 from $100,507,294 in 2024.
• The fund reported a net income loss of $(3,921,792) in 2025, compared to a net income of $5,636,231 in 2024.
• As of December 31, 2025, UGA held 1,072 NYMEX RBOB Gasoline Futures RB contracts with an unrealized gain of $709,073.
• Cash and cash equivalents, including money market funds, totaled $76,509,481 at year-end 2025.
• The gasoline futures market experienced both contango and backwardation during 2025.
• UGA issued 14 Creation Baskets and redeemed 21 Redemption Baskets during 2025, indicating net outflows.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a mixed but generally stable report for a commodity fund. While the NAV declined due to lower gasoline prices, the fund demonstrated effective tracking and outperformance relative to its benchmark, indicating sound operational management despite challenging market conditions. The significant decrease in average daily total net assets and net income loss are concerns, but the fund's liquidity and internal controls appear robust.

Positives

• UGA's actual total return of (1.86)% for the year ended December 31, 2025, significantly outperformed its benchmark's estimated total return of (4.27)% by 2.41%.
• The average daily change in UGA's per share NAV for the 30-valuation days ended December 31, 2025, was (0.354)%, performing within the stated +/10% tracking goal of the Benchmark Futures Contract's (0.365)% change.
• UGA's expenses did not exceed the income earned and cash generated from Creation and Redemption Baskets during 2025.
• The fund maintained effective internal control over financial reporting as of December 31, 2025, as assessed by management and confirmed by independent auditors.

Negatives

• UGA's per share Net Asset Value decreased by 1.86% for the year ended December 31, 2025, falling from $62.94 to $61.77.
• The Benchmark Futures Contract price for gasoline experienced a substantial decrease of approximately 14.64% during 2025.
• Average daily total net assets declined significantly from $100,507,294 in 2024 to $76,965,346 in 2025.
• Dividend and interest income earned on Treasuries, cash, and cash equivalents decreased to $3,086,107 in 2025 from $4,945,845 in 2024, with the annualized yield falling from 4.92% to 4.01%.
• The fund reported a net income loss of $(3,921,792) in 2025, a significant reversal from the net income of $5,636,231 in 2024.
• Net income (loss) per limited partner share was $(1.17) in 2025, down from $2.30 in 2024.
• UGA redeemed more shares (1,050,000) than it issued (700,000) in 2025, indicating net capital outflows from the fund.

Risks

• The NAV of UGA's shares relates directly to the value of Benchmark Futures Contracts and other assets, and price fluctuations could materially adversely affect an investment.
• Price volatility, driven by factors like natural disasters, public health disruptions (e.g., COVID-19), and international armed conflicts (e.g., Russia-Ukraine war, Middle East conflicts), may cause total loss of investment.
• An investment in UGA may provide little or no diversification benefits, as its performance could move in the same direction as financial markets.
• The market price at which investors buy or sell shares may be significantly less or more than NAV, especially due to non-concurrent trading hours between NYSE Arca and futures exchanges.
• Daily percentage changes in UGA's NAV may not correlate with daily percentage changes in the price of the Benchmark Futures Contract due to market disruptions, position limits, expenses, and transaction costs.
• Daily percentage changes in the price of the Benchmark Futures Contract may not correlate with daily percentage changes in the spot price of gasoline.
• Natural market forces like contango and backwardation may increase tracking error and negatively impact total return, with prolonged contango potentially causing significant negative impact.
• Accountability levels, position limits (including CFTC Position Limits Rule), and daily price fluctuation limits set by exchanges have the potential to cause tracking error by limiting UGA's investments.
• Risk mitigation measures imposed by UGA's Futures Commission Merchants (FCMs) could limit investments and cause tracking error.
• Investors' tax liability may exceed the amount of distributions, as UGA does not intend to make cash distributions.
• UGA is subject to credit risk with respect to counterparties to OTC contracts, including non-performance and potential delays or limited recovery in bankruptcy.
• Valuing OTC derivatives may be less certain than valuing exchange-traded instruments.
• UGA could become leveraged if it holds insufficient assets to meet current or future margin or collateral requirements.
• UGA may temporarily limit the offering of Creation Baskets, which could cause its NAV to differ materially from its trading price and increase trading costs for investors.
• Certain of UGA's investments could be illiquid, leading to large losses, especially for large positions or in disrupted markets.
• UGA is not actively managed by conventional methods, meaning positions are not closed out due to declining value except for redemptions or monthly rolls.
• Failure to meet NYSE Arca listing standards or trading halts could adversely impact an investor's ability to sell shares.
• Withdrawal of Authorized Participants could decrease the liquidity of shares.
• Limited partners and shareholders do not participate in the management of UGA and do not control USCF.
• USCF's LLC Agreement provides limited authority to Non-Management Directors, and USCF's parent company (controlled by Nicholas D. Gerber) can remove any director, potentially impacting governance.
• UGA is subject to extensive regulatory reporting and compliance, which can divert management's time and attention.
• Regulatory changes or actions, including new legislation, may significantly and adversely affect UGA.
• UGA is not a registered investment company, so shareholders do not have the protections of the 1940 Act.
• Trading in international markets could expose UGA to credit and regulatory risk due to less stringent regulations, exchange-rate movements, and political instability.
• Conflicts of interest may exist between UGA and USCF, its other funds, and employees, as USCF has not established formal procedures to resolve them.
• UGA could terminate at any time, causing liquidation and potential loss of an investment.
• An unanticipated number of Redemption Basket requests during a short period could adversely affect UGA's NAV.
• UGA is subject to interest rate risk, which may prevent it from investing fully at prevailing rates or lead to declines in Treasury values.
• Inflation risk could erode the value of UGA's cash and Treasury investments.
• UGA may lose money by investing in government money market funds, which are not guaranteed and can fall below $1.00 per share.
• The failure or bankruptcy of a clearing broker or the Custodian could result in a substantial loss of UGA's assets.
• Competing claims of intellectual property rights may adversely affect UGA.
• Intentional and unintentional cyber-attacks pose operational and information security risks, potentially leading to financial losses, inability to transact, and regulatory fines.
• UGA's investment returns could be negatively affected by climate change and greenhouse gas restrictions.
• USCF is subject to class action, derivative, and other litigation, which could materially adversely affect its financial condition and divert management's attention.

Future Outlook

Management anticipates that interest rates may continue to stagnate over the near future, and expects that fees and expenses paid by UGA may be lower than interest earned, potentially leading to outperformance of its benchmark. However, the overall impact of geopolitical actions could increase the risk of a global economic slowdown or recession, which would reduce demand for crude oil and gasoline. Ongoing global tensions, with existing and potential conflicts in various regions, remain a flash point for risk to crude oil supply, which could raise prices, while any resolution could ease supply disruptions and lower prices.

Management Comments

• "USCF believes that market arbitrage opportunities cause daily changes in UGAs share price on the NYSE Arca on a percentage basis to closely track daily changes in UGAs per share NAV on a percentage basis."
• "USCF further believes that the daily changes in prices of the Benchmark Futures Contract have historically tracked the daily changes in the spot price of gasoline."
• "USCF believes that the net effect of these relationships will be the daily changes in the price of UGAs shares on the NYSE Arca on a percentage basis will closely track the daily changes in the spot price of gasoline on a percentage basis, plus interest earned on UGAs collateral holdings, less UGAs expenses."
• "USCF believes that it is not practical to manage the portfolio to achieve such an investment goal when investing in Futures Contracts and Other Gasoline-Related Investments." (referring to matching nominal price to spot price)
• "USCF anticipates that interest rates may continue to stagnate over the near future. It is anticipated that fees and expenses paid by UGA may be lower than interest earned by UGA. As such, USCF anticipates that UGA could possibly outperform its benchmark so long as interest earned is higher than the fees and expenses paid by UGA."
• "USCF believes that over both the medium-term and the long-term, changes in the price of crude oil will exert the greatest influence on the price of refined petroleum products such as gasoline."

Industry Context

StockSavvy.ai notes that the broader energy market in 2025 was characterized by growing crude oil supplies exceeding demand, leading to a significant widening of the supply-demand gap from 0.6 mbd in 2024 to 2.8 mbd by year-end 2025. U.S. crude oil production averaged 13.5 mbd, while OPEC gradually increased output after previous cuts, signaling a potential shift in their price support strategy. Geopolitical tensions, including conflicts in the Middle East and Ukraine, continued to introduce volatility and uncertainty, acting as a counterbalancing force to the oversupply. The gasoline market, while influenced by crude oil, also saw its own dynamics, with prices decreasing by 14.79% from December 2020 to December 31, 2025, reflecting a complex interplay of global supply, demand, and geopolitical factors.

Comparison to Industry Standards

• UGA's 10-year correlation (December 31, 2015 December 31, 2025) of unleaded gasoline prices with crude oil (0.747) and heating oil (0.619) indicates a strong to moderate positive relationship, which is typical for refined petroleum products.
• The very low 10-year correlation with natural gas (0.006) suggests that gasoline prices largely move independently of natural gas, aligning with distinct supply/demand fundamentals for these different energy commodities.
• UGA's 10-year correlation with large cap US equities (S&P 500) at 0.417 and global equities (FTSE World Index) at 0.446 indicates a weak positive correlation, suggesting some diversification benefits compared to direct equity investments over the long term, though not as strong as a negative correlation.
• The 10-year weak negative correlation with US Government Bonds (-0.173) further supports some diversification potential against traditional fixed-income assets.
• However, the 1-year correlations (ended December 31, 2024) show a weak negative correlation for gasoline with large cap US equities (-0.286), US government bonds (-0.196), and global equities (-0.375), which, if sustained, would imply stronger diversification benefits than the longer-term average.

Management Changes

Corporate Governance

Legal Proceedings

• Optimum Strategies Action: Claims under Securities Exchange Act of 1934 and Connecticut Uniform Securities Act against USO and USCF were dismissed on March 15, 2023.
• SEC and CFTC Investigations: USCF and USO settled with the SEC and CFTC on November 8, 2021, agreeing to cease and desist orders and civil monetary penalties totaling $2,500,000 for violations related to disclosures during the April-June 2020 oil market volatility.
• In re: United States Oil Fund, LP Securities Litigation: A consolidated class action against USCF, USO, and others, alleging federal securities claims. The complaint was dismissed without prejudice on September 29, 2025, with a motion to amend filed on November 26, 2025, currently pending.
• Wang Class Action: A putative class action against USO, USCF, and others, alleging federal securities claims, was voluntarily dismissed on August 4, 2020.
• Mehan Action and In re United States Oil Fund, LP Derivative Litigation: Derivative actions on behalf of USO against USCF and others, alleging breach of fiduciary duties and other claims, are stayed pending the disposition of motions to dismiss in the "In re: United States Oil Fund, LP Securities Litigation."
• RBC Capital Markets LLC: Involved in various legal proceedings including LIBOR litigation (settlements in 2023/2024), a French court conviction against an affiliate (appealed March 5, 2024), an SEC settlement ($45M in August 2024), a FINRA disciplinary action ($375k fine, $393,833.50 restitution in April 2024), and an SEC retirement plan investigation (settlement in April 2020).
• Marex Capital Markets, Inc.: Involved in private litigation (MCM won $1.76M in June 2021), JAMS Arbitration (settled Sept 2021), FINRA Arbitration (claims dismissed June 2023, appeal denied April 2024), Cook County Litigation (settled Sept 2023), and an Illinois private litigation (motion to dismiss granted for 6/8 counts May 2024).
• ADM Investor Services, Inc.: Subject to fines from Commodity Exchange Business Conduct Committee ($650k in Jan 2020), CFTC ($500k in Sept 2022), CBOT, COMEX, and CME Panels ($450k total in Sept 2023) for supervisory failures.

Related Party Transactions

• UGA is contractually obligated to pay USCF a management fee equal to 0.60% per annum of its average daily total net assets.
• USCF pays the fees of ALPS Distributors, Inc. (Marketing Agent) and The Bank of New York Mellon (Administrator, Custodian, Transfer Agent) for their services to UGA.
• UGA pays a licensing fee to the NYMEX equal to 0.015% on all net assets for the use of its settlement prices and service marks.
• UGA pays a portion of the fees and expenses of the independent directors of USCF, who also serve as audit committee members for UGA and the Related Public Funds.
• USCF is a wholly-owned subsidiary of USCF Investments, Inc., which is a wholly-owned subsidiary of The Marygold Companies, Inc. (MGLD), a publicly traded holding company where Nicholas Gerber and certain family members own the majority of shares, providing indirect control over USCF and UGA.

Stakeholder Impact

• Shareholders experienced a decrease in NAV per share and total return in 2025, but the fund outperformed its benchmark. They are exposed to significant market, correlation, and tax risks, and do not receive cash distributions. Their ability to sell shares could be impacted by market liquidity or trading halts.
• Authorized Participants continue to facilitate creation and redemption of shares, earning transaction fees. They are exposed to market arbitrage opportunities and potential risks if UGA limits Creation Basket offerings.
• USCF (General Partner) earns management fees from UGA, which decreased in 2025 due to lower average net assets. It faces ongoing litigation risks that could affect its financial condition and management resources.
• Service Providers (FCMs, Custodian, Administrator, Marketing Agent) continue to receive fees for their services. FCMs are subject to various legal and regulatory proceedings, which could pose indirect risks to UGA.
• Regulatory Bodies (SEC, CFTC, NFA, NYSE Arca) continue to oversee UGA's operations and compliance, as evidenced by past investigations and settlements involving USCF and related funds.

Next Steps

• USCF will continue to manage UGA's portfolio to track the Benchmark Futures Contract within the +/10% average daily change target over 30-valuation days.
• USCF will continue to post anticipated dates for Benchmark Futures Contract changes and Gasoline Interests rolls on UGA's website.
• USCF will continue to monitor and manage risks, including those related to market conditions, regulatory requirements, and risk mitigation measures.
• USCF will continue to vigorously contest claims in ongoing litigation, including "In re: United States Oil Fund, LP Securities Litigation" and "In re United States Oil Fund, LP Derivative Litigation."
• RBC Bahamas will continue its appeal of the French Court of Appeal's conviction to the French Supreme Court.
• RBC has sought longer-term relief from the Department of Labor regarding the QPAM exemption.
• The parties in the Illinois litigation against MCM are currently exchanging in discovery.

Key Dates

Recommendation

While UGA demonstrated effective tracking and even outperformance relative to its benchmark in 2025, the overall decline in NAV, significant net loss, and reduction in average daily total net assets are concerning. The fund operates in a volatile commodity market with inherent risks from contango/backwardation and geopolitical events. The ongoing legal proceedings against the general partner and its affiliates, though not directly against UGA, introduce an element of uncertainty. Given the mixed financial performance and persistent market and operational risks, a 'hold' recommendation is appropriate for investors already in the fund, while new investors should exercise caution and thoroughly assess their risk tolerance.

Keywords

Gasoline Futures, Commodity Pool, SEC Filing, 10-K, UGA, United States Gasoline Fund, RBOB, NYMEX, Futures Contracts, Investment Fund, Financial Performance, Energy Market, Commodity Trading, ETF, USCF, Contango, Backwardation, Risk Factors, Financial Reporting, Regulatory Compliance