An ETF That Targets Scarce Commodities

We're going to talk about the USCF Summer Haven Dynamic Commodity Strategy No K1 Fund, and your ticker there is SDCI. It remains one of the top-ranked commodity ETFs and now carries a five-star Morningstar rating, so congrats on that. For advisors and ETF investors considering commodities, what distinguishes SDCI as a compelling addition to a diversified portfolio?

What SDCI does is we're trying to give you broad commodity exposure, all the benefits of commodities as an asset class, but we don't want to own the entire commodity universe at a time. We want to try to do a more investable approach. So what we've done, we have high correlation or beta to traditional commodity indices, but we really have two goals.

The way we're doing this is we own something in every commodity sector. So we have a metal, we have energy, we have a precious metal, a livestock, and so forth. But what we're trying to do is let's whittle it down and let's look for one particular thing, and that's scarcity. What commodities are likely to be scarce? What is the market telling us, and what's likely to... anything that's likely to be scarce is more likely to rise in the future than fall.

So that's what we're really allocating to. We essentially are holding half the liquid commodity future at a time, or commodity futures market at a time, rebalancing the equal weights once a month so that we're giving you equal exposure to wherever these supply-demand stories may come from. These supply-demand stories, just because oil and gold make the headlines, it can come from silver like it has in the last two months. It can come from cocoa. It can come from cattle, as we've seen. And so we're equal weighting. We're holding half the universe, and we have a systematic rules-based approach that just looks for scarcity.