Agriculture ETP Cuts Fees
May 31, 2012
Managers of the United States Agriculture Index Fund (NYSEArca: USAG) initiated a voluntary fee cut on the fund. The management fee was reduced to 0.80% from 0.95% on May 29.
"We are aware that investors looking to use USAG as a useful tool for investing in Agricultural futures contracts over the long term will also be sensitive to expenses. We think that offering it with lower expenses will help generate economies of scale for both trading and investing and make the fund even more competitive with other agricultural funds,” stated John Hyland, Chief Investment Officer.
The fee waiver is expected to remain in place through March 31, 2013, but can be modified or terminated before then.
USAG, is an exchange-traded product (ETP) linked to the SummerHaven Dynamic Agriculture Index Total Return.
Over the past month, USAG has slumped 5.16% in value. As a group, commodities have been hammered on concern that a global economic slowdown will hinder future demand.
Oil prices (NYSEArca: USO) have sunk 20% after peaking in late February.
The broader commodities market, as tracked by the iShares S&P GSCI Commodity Index Trust (NYSEArca: GSG) has declined 7.79% year-to-date and 15.43% over the past year.
USAG tracks a portfolio of Agriculture futures contracts traded on the ICE Futures, CBOT, KCBT and ICE Canada exchanges. The Agriculture Index attempts to maximize backwardation and minimize contango while using contracts in the liquid portions of the futures curve.
United States Commodity Funds, LLC manages 11 commodity exchange traded products, and had a total of $3.1 billion in assets under management at the end of March.