8-K: United States Gasoline Fund, LP Releases 2023 Annual Financial Statements

United States Gasoline Fund, LP (UGA) has released its annual financial statements for the year ended December 31, 2023, showing a net income of $539,056.

Summary

• The United States Gasoline Fund, LP (UGA) has released its annual financial statements for the year ending December 31, 2023.
• The fund reported a net income of $539,056 for 2023, a significant decrease compared to the $27,371,099 net income in 2022.
• The fund's total assets decreased slightly from $87,046,675 in 2022 to $85,166,194 in 2023.
• The net asset value per share increased from $59.75 in 2022 to $60.64 in 2023.
• The fund primarily invests in gasoline futures contracts and other related investments.
• The fund's investment objective is to track the daily changes in the spot price of gasoline.
• The fund held 960 gasoline futures contracts on the NYMEX as of December 31, 2023.
• The fund's management fee is 0.60% per annum of average daily total net assets.
• The fund's total expenses were $881,326 in 2023, compared to $1,044,687 in 2022.
• The fund's financial statements were audited by Cohen & Company, LTD, who issued an unqualified opinion.

Sentiment

Score: 4

Explanation: The sentiment is moderately negative due to the significant decrease in net income and the loss on open futures contracts, despite the increase in NAV per share. The fund's performance is heavily influenced by market conditions, which adds to the uncertainty.

Positives

• The fund received an unqualified audit opinion from Cohen & Company, LTD, indicating that the financial statements are fairly presented.
• The net asset value per share increased from $59.75 in 2022 to $60.64 in 2023.
• The fund maintains a policy of continuously monitoring its exposure to market and counterparty risk.
• The fund's internal control over financial reporting was deemed effective as of December 31, 2023.

Negatives

• The fund's net income decreased significantly from $27,371,099 in 2022 to $539,056 in 2023.
• Total assets decreased slightly from $87,046,675 in 2022 to $85,166,194 in 2023.
• The fund experienced a loss on open commodity futures contracts of $1,664,279 in 2023, compared to a gain of $11,615,386 in 2022.
• The fund's net income per limited partner share decreased from $18.71 in 2022 to $0.89 in 2023.

Risks

• The fund is exposed to market risk due to changes in the value of futures contracts.
• The fund is exposed to credit risk, which is the risk of failure by another party to perform according to the terms of a contract.
• The fund's performance is subject to the impact of contango and backwardation in the gasoline futures market.
• The fund is subject to the risk of financial failure by the clearing broker.
• The fund is exposed to the risk of loss associated with investments in money market funds.
• Significant market volatility in the unleaded gasoline markets could affect the value, pricing and liquidity of the fund's investments.

Future Outlook

The document does not contain specific forward-looking statements or guidance.

Management Comments

• USCF believes that market arbitrage opportunities will 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 the 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 that 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, less UGAs expenses.

Industry Context

This announcement is typical for commodity-based exchange-traded funds, providing transparency to investors regarding the fund's performance and financial position. The fund's performance is directly tied to the gasoline market, making it sensitive to global supply and demand dynamics, geopolitical events, and economic conditions.

Comparison to Industry Standards

• The fund's management fee of 0.60% is within the typical range for commodity-based ETFs.
• The fund's investment strategy of primarily investing in gasoline futures contracts is standard for funds seeking to track the price of gasoline.
• The fund's use of multiple FCMs is a common practice to mitigate counterparty risk.
• The fund's reporting of financial statements in accordance with U.S. GAAP and the audit by an independent registered public accounting firm are standard practices for publicly traded funds.
• The fund's performance is comparable to other gasoline-related ETFs, with fluctuations reflecting the volatility of the gasoline market. For example, the United States Oil Fund (USO) and the United States Natural Gas Fund (UNG) are similar commodity-based ETFs managed by USCF, and their performance is also subject to market volatility.

Related Party Transactions

• USCF, the general partner, receives a management fee of 0.60% per annum of average daily total net assets.
• UGA shares fees and expenses with other related public funds managed by USCF on a pro rata basis.
• USCF pays the fees of BNY Mellon for custodial, administrative, accounting, and transfer agency services.
• USCF bears the marketing agent fee.

Stakeholder Impact

• Shareholders will be impacted by the decrease in net income and the volatility of the gasoline market.
• Authorized Participants will continue to be able to create and redeem shares in Creation and Redemption Baskets.
• The fund's performance will impact the fees earned by USCF, the general partner.
• The fund's performance will impact the fees earned by the various service providers.

Next Steps

• The fund will continue to monitor market conditions and adjust its investment strategy as needed.
• The fund will continue to provide transparency to investors through regular financial reporting.

Key Dates

Keywords

gasoline, futures contracts, commodity pool, financial statements, net asset value, RBOB, NYMEX, USCF, exchange-traded fund, commodity