United States Commodity Funds filed paperwork with the SEC for a United States Agriculture Index Fund. The prospectus notes (USAI) as its proposed trading symbol. The United States Agriculture Index Fund will track the SummerHaven Dynamic Agriculture Index. The Agriculture Index is an agricultural sector index designed to broadly represent major agricultural commodities while overweighting the components that are assessed to be in a low inventory state and underweighting the components assessed to be in a high inventory state.
The Agriculture Index consists of fourteen agricultural markets: soybeans, corn, soft red winter wheat, hard red winter wheat, soybean oil, soybean meal, canola, sugar, cocoa, coffee, cotton, live cattle, feeder cattle and lean hogs. Each agricultural commodity is assigned a base weight based on an assessment of market liquidity and the commodity’s overall economic importance. Each commodity is US Dollar based, with the exception of canola, which is quoted in Canadian Dollars and converted to US Dollars for the purpose of the Agriculture Index calculation.
USAI seeks to achieve its investment objective by investing in Benchmark Component Agriculture Futures Contracts and Other Agriculture-Related Investments such that daily changes in USAI’s NAV will closely track the daily changes in the Agriculture Index. USAI’s positions in Agriculture Interests will be rebalanced on a monthly basis in order to track the changing nature of the Agriculture Index. In order that USAI’s trading does not unduly cause extraordinary market movements, and to make it more difficult for third parties to profit by trading based on market movements that could be expected from changes in the Benchmark Component Agriculture Futures Contracts, USAI’s investments typically will not be rebalanced entirely on a single day, but rather will typically be rebalanced over a period of four days. After fulfilling the margin and collateral requirements with respect to its Agriculture Interests, the Sponsor will invest the remainder of USAI’s proceeds from the sale of baskets in Treasury Securities or cash equivalents, and/or merely hold such assets in cash (generally in interest-bearing accounts).
USAI anticipates that to meet its investment objective it will invest first, in the current Benchmark Component Agriculture Futures Contracts and, thereafter, to comply with regulatory requirements or in view of market conditions, in Other Agriculture-Related Investments intended to replicate the return on the Benchmark Component Agriculture Futures Contracts, including cleared swap contracts and other over-the-counter transactions. For more information on the composition of the Agriculture Index and selection of the Benchmark Component Agriculture Futures Contracts.
For the full prospectus click: HERE