US Commodity Funds’ Changing Face

March 20, 2017

United States Commodity Funds is an ETF issuer known for commodity products such as the $2.9 billion United States Oil Fund LP (USO) and the $435 million United States Natural Gas Fund LP (UNG). Recently, however, the firm expanded its product development focus to include equity funds like the Stock Split Index Fund (TOFR) and the USCF Restaurant Leaders Fund (MENU). In addition, the issuer became part of a public company in December. talked with CEO John Love about some of these changes as well as its bread-and-butter commodity ETFs. Let’s talk a little about United States Commodity Funds under its new structure, Concierge Technologies [ticker: CNCG]. How did that develop? Was United States Commodity Funds actually bought by Concierge Technologies?

John Love: Effectively, yes. We are 100% owned by a company called Wainwright, which is a private company. The majority shareholder was Nick Gerber, who founded the company in 1995. The USCF entity was formed early last decade, and was the entity through which we launched USO and all of our commodity ETFs.

Wainwright owns USCF, and so Nick Gerber also acquired a public company, became majority shareholder and got control of a public company, which is Concierge. And recently Concierge purchased Wainwright, which remains USCF. 

So there's been no change in control, just a change in ownership, really; almost a paperwork thing. But we are now a component of a public company. Concierge is a collection of different companies that include a food company and a security company. Where’s the synergy with you, an ETF issuer?

Love: I'm exclusively focused on the USCF level. Everything Wainwright and above is Nick. But yes, you're correct; it’s a diverse set of companies. But from a USCF level, there's no change in control—still doing what we did before, just different owner of our holding company on paper, but same control. Generally speaking, USCF is a commodity ETF issuer, but your most recent ETFs have been equity ETFs in Stock Split Index Fund (TOFR) and USCF Restaurant Leaders Fund (MENU). Is the goal here to veer away from commodities and broaden the lineup?

Love: That was definitely the thinking behind TOFR and MENU. We’re taking a stab at diversifying a little bit. We've certainly been through the commodity route. USO and United States Natural Gas Fund LP (UNG) are our biggest funds, and at one time peaked at about $7.5 billion in combined assets.

They’ve contracted quite a bit because interest in those products, and in commodities in general, fell out of favor. Our broad commodity basket fund, the United States Commodity Index Fund (USCI), is still doing quite well, but it's not at its all-time high in terms of assets, and we'd like to see that get bigger.

Commodities are where we have expertise. But it might behoove us to explore new avenues, and we have the resources and the partners to do a couple things that are in a new space like TOFR and MENU. But definitely our focus remains commodities.


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