Understanding Gold's Hot Streak and Other Investing Trends in Commodities

we're bullish on copper because there's really a dramatic supply and demand imbalance the world is demanding more and more and more copper uh there's barely been any investment over the last few decades in bringing new Supply to Market hello and welcome to the program I'm Stephanie Stanton it is great to see you again be sure to subscribe to ETF Guide TV and post your thoughts in our YouTube comment section below we are very pleased to have John love the CEO of USCF Investments with us today John it is great to see you welcome back definitely and uh thanks for having me thanks for that uh that nice intro sdci has been getting a lot of deserved attention lately the fund has been a top tier performer in its category and has even garnered a five-star rating from Morning Star tell us the latest with the USCF summer Haven Dynamic commodity strategy no One Fund can you explain sci's factor-based approach so thank you for that intro uh thanks for having me uh sdci has been doing great the return uh the fund returned about 18% last year uh the largest broad commodity ETF only returned 2% and sdci 18% return was almost 3% better than our next closest competitor more than 8% more than the next closest competitor after that so it's been growing going great uh investors have noticed assets have more than tripled since the start of the year as people have connected with our story um I should say here please go to our website USCF investments.com for complete performance info and obviously past performance doesn't guarantee future results um but as I said uh people have been noticing sdci lately they've been seeking out Commodities uh as they've been looking for some diversification as you know Commodities provide diversification from stocks and bonds they also provide an inflation Hedge but it isn't necessary necessary or even optimal to belong the entire commodity Universe all at once traditionally broad commodity strategies hold fairly static weights sdci is dynamic uh with the weights with the Commodities it holds it rebalances monthly and we think we can uh or we can have higher waste of Commodities that people might not think so much about for example last year we had high exposure higher exposure to cocoa and coffee relative to a lot of other Strat IES and both of those were great performers in 2024 as far as the factor strategy goes uh sdci picks Commodities based on a market signal that we consider a proxy for relative inventory if the market thinks that something is going to be scarce if there's going to be a shortage of a commodity that commodity is more likely to go up uh this Dynamic process uh has actually worked on average with sdci holding the best performing Commodities over time much more often than it holds the underperformers and that's enabled sdci to give strong beta to traditional commodity indices while delivering out performance uh really over multiple time frames since the funds Inception it's uh sdci is highly correlated with the Bloomberg commodity index which is very popular but its annualized return is more than 3% higher than Bloomberg at about a 7.5% annualized returns since the funds Inception so we really couldn't be happier with it uh right now and we hope continue to take a look so shifting gears a bit the United States oil fund that tooker Uso Remains the largest oil focused ETF by assets under management Uso has become a popular choice for investors and advisors looking for exposure to crude oil tell us more sure well Uso is simple that's H the great thing about it it provides Traders with exposure to the price of crude oil which is still the most important commodity in the world it does not invest in energy companies uh which are driven by other factors besides the price of crude uh Uso holds Futures contracts so Traders bullish on the price of oil or oil Futures can take a position without opening a Futures account and dealing with margin calls and the other headaches of managing a Future's position so because uh and because it trades on the nysse it's easy to take shortterm positions whether that's intraday several months or whatever time frame matches a Traders out Outlook but it's really pretty straightforward if if you're looking for the Returns on on crude oil Futures uh that's what Uso is exposed to let's look at the energy sector from another angle the USCF Midstream energy income fund that ticker Umi covers many bases how does the fund work and what type of investor might Umi appeal to so Umi is an actively manage fund that invest in MLPs and mid-stream energy companies it looks to deliver income plus growth uh um Umi may be especially appealing to investors seeking income since the type of Investments That it holds tend tend to produce High current income uh and that's supported by long-term contracts that these companies tend to hold uh Additionally the Holdings have experienced strong dividend growth so not only is that great for income investors but uh for other investors uh that might reinvest that income and allow it to compound uh um Umi can provide a strong total growth return as well um and since Inception uh which was March of 21 Umi has returned 152% versus 65% for the S&P 500's Total return as before past results don't guarantee future performance and please go to our website for a few details but a few more things to point out um Umi typically has limited direct commodity price exposure uh for example umi's beta to Uso was only about 36 over the last three years that means it only moves with USO about 36% of the time the same is true for other types of energy Investments so Umi can provide income and growth that is not correlated with other assets even the ones you might expect also Umi uh has had an annualized return that's almost doubled the S&P 500's Total return since Inception and almost three times the Bloomberg energy commodity index's Total return uh finally one other point Umi is actively manage the the portfolio managers aim to own Quality Companies with financial strength they're looking for things like cash flow uh cash flow sorry free cash flow yield credit ratings uh other factors like that they also analyze business factors like the quality of the contracts that I mentioned earlier they also use quantitative analysis and ESG factors look at the bull and bease uh they consider risk and valuation and the active management space like this is something that really can be a strong differentiator hopefully that gives investors peace of mind that they're not just owning everything but they're really getting Quality Companies with the potential to continue and paying growing dividends so you have two ETFs in the copper space the UN United States copper index fund and that ticker is CP and then the recently launched USCF daily Target Two Times copper index ETF and that ticker is cpxr both ETFs targeting copper but each with a unique investment strategy tell us how these funds compare we are the spons or one of the sponsors of the recently launched cpxr uh but that fund was actually issued by tidal we teamed up with tidal uh kind of to expand our bullish view on on copper we are uh the adviser the issuer of CP which was first listed in 2011 so we've had that fund a long time and this new uh this new fund uh with title uh was just to provide 2x exposure to Copper for people seeking a a leverage product while CP remains unleveraged so basically two ways to play it depending on your comfort level with the amount of exposure you uh you feel like taking um we're bullish on copper because there's really a dramatic supply and demand imbalance the world is demanding more and more and more copper uh there's barely been any investment over the last few DEC decades in bringing new Supply to Market and worse it takes a long time uh a decade or more to bring new copper mines online so the story really couldn't be simpler uh now coer does rise and fall with a global economy so things like you know recessions slow slowdowns in a big manufacturing country like China those things can lower prices but if you step back from the business cycle the economic cycle there's less copper available than the world needs and uh that's why professional thieves are stealing it from cities cutting out cutting it out of people's cars uh even if you don't believe the electrification story we have a new Catalyst with these uh with AI and the data center build outs that are needed for that uh and there's so much other technology infrastructure and things that use copper the world just needs a ton of it and we think there's not going to be enough and then let's not forget the USCF gold strategy plus income ETF and that ticker is USG so this particular ETF offers a unique spin on the gold Market what are you looking for in 2025 when it comes to gold first as the name suggests USG it provides exposure to the price of gold but also income in the form of quarterly dividends USG has a a high beta to the price of gold about 08 uh the point the funds trailing 12month yield was 7% as of January 31st so uh us USG should basically move the gold about 80% of the time but unlike gold alone it may be uh appealing because of the income uh as you know gold itself does not produce income or dividends USG generates income by selling covered calls on the gold on the funds gold Futures positions so if gold Rockets up in price over a short period of time uh those options might work against us here in there but over the long term these kind of strategies tend to uh tend to outperform um so especially in a market that's that's gradually up a down Market a sideways Market uh that's where those uh options positions are are likely to be most effective at generating income and uh you know just looking into 2025 we're we're fairly bullish on gold central banks notably China's uh and other countries are continuing to diversify away from us debt and favor in gold as they have been uh in recent times there's as you know a ton of un uncertainty in equity and bond markets a lot of news uh coming out every week that are rattling investors and people are seeking the perceived safety of gold uh which is traditionally uh provided that in in volatile times so you know one thing that uh just the bare case there that one thing that could hold gold back a little bit is that interest rates are still high making gold itself which again doesn't produce income on its own somewhat unfavorable by to bonds by comparison and that's where USG can help out it's it gives you that exposure to Gold Plus provides income and uh we think just based on you know the history of strategies like this it may be something for worth investors uh U attention and we are going to wrap it up there John thank you so much for dropping by we appreciate your very timely insights thank you for having me it was great to be here thanks and be sure to visit USCF investments.com to learn more about their ETF lineup I'm Stephanie Stanton with ETF guide thank you so much for watching we'll see you soon oh