A sound investment process and strong management team underpin USCF SummerHaven Dyn CmdtyStgy NoK-1 ETF's Morningstar Medalist Rating of Gold. The portfolio maintains a cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy's effective investment philosophy earns it a High Process Pillar rating. The management team's considerable industry experience earns it an Above Average People Pillar rating. The strategy's parent firm has some investor-friendly attributes, like a favorable lineup success ratio, but it is held back by high portfolio manager turnover. As a result, the firm gets an Average Parent Pillar rating.

Analyst Rating

Morningstar's evaluation of this fund's process aims to determine how repeatable, consistent, and reliable it is, and whether management maintains a competitive advantage. USCF SummerHaven Dyn Cmdty Stgy NoK-1 Fd earns a High Process Pillar rating. The leading factor in the rating is its parent firm's impressive long-term risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 4.0 stars. The parent firm's five-year risk-adjusted success ratio of 100% also bolsters the process. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median Morningstar Risk-Adjusted Return for the period. Their compelling success ratio suggests that the firm does well for investors and that this fund may benefit from that. Respectable risk-adjusted performance also contributes to the process, as shown by the fund's five-year alpha calculated relative to the category index, which suggests the process was successful over that period.

The investment strategy as stated in the fund's prospectus is as follows: 

 The investment seeks long-term total return.  The fund seeks to maintain substantial economic exposure to the performance of the commodities markets. It primarily gains exposure to the commodities markets through the investments of its wholly-owned subsidiary. The subsidiary, which has the same investment objective as the fund, is advised by the Adviser and sub-adviser. The fund seeks to provide exposure to the commodities markets that corresponds to the SummerHaven Dynamic Commodity Index Total ReturnSM. The index is a total return commodity sector index designed to broadly represent major commodities. The fund is non-diversified.

High

Process

USCF SummerHaven Dyn Cmdty Stgy NoK-1 Fd earns an Above Average People Pillar rating. The main contributor to the rating is its parent firm's impressive long-term risk-adjusted performance, as shown by the firm's average ten-year Morningstar Rating of 4.0 stars. The portfolio managers' outperformance at the funds they run, as measured by their combined three-year manager excess returns, also contributes to the rating. Lastly, the rating is limited by the instability of management across its parent firm. The firm's asset-weighted manager tenure of three years suggests it could do more to retain portfolio managers.


Andrew F. Ngim, the longest-tenured manager on the strategy, provides strong guidance, offering 24 years of listed portfolio management experience. The average Morningstar Rating of the strategies they currently manage is 4.0 stars, indicating that their risk-adjusted returns outperformed the category average. Despite having a small team, the two listed managers boast 13 years of listed portfolio management experience. None of the managers here invest any money in the strategy, which is disappointing, as such investments help align managers' interests with fundholders.

Above Average

People

USCF's track record as a steward is mixed, leading to an Average Parent Pillar rating. The firm's lasting product shelf is its strength. Its five-year risk-adjusted success ratio of 100% means that 100% of its strategies have both survived and beaten their respective category median on a risk-adjusted basis. A high success ratio indicates good performance and provides insight into a firm’s discipline around investment strategy and product development. A negative contributor to USCF's rating is its lower-than-average portfolio management retention over the past five years, as elevated turnover bears watching. USCF's longest-tenured managers do not possess comparable experience as teams at other firms, a cause for concern. Specifically, average tenure within the firm is two years. As such, there is less confidence in the group's ability to manage capital through a full market cycle effectively.

Average

Parent

USCF SummerHaven Dynamic Commodity Strategy No K-1 Fund

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WALNUT CREEK, Calif., Nov. 3, 2021 /PRNewswire/ -- USCF today announced it has launched the USCF Gold Strategy Plus Income Fund (GLDX) with SummerHaven Investment Management, LLC (SummerHaven), a Stamford based investment management firm, as sub-adviser.

News for USCF SummerHaven Dynamic Commodity Strategy No K-1 Fund ETF (SDCI)