United States Gasoline Fund, LP: 2025 Annual Review

Business Overview

For investors seeking a direct way to participate in the gasoline market, the United States Gasoline Fund, LP (UGA) offers a unique solution. Established in April 2007 as a Delaware limited partnership and operating as a commodity pool, UGA's shares have traded on the NYSE Arca under the ticker UGA since February 26, 2008. The fund provides investors with a convenient way to gain exposure to gasoline prices without directly owning the physical commodity.

UGA's main goal is to mirror the daily percentage changes in the spot price of "RBOB" (reformulated gasoline blendstock for oxygen blending) delivered to New York harbor. It measures this using a specific short-term futures contract. This objective also includes any interest earned on its cash holdings, after deducting the fund's operating expenses. Importantly, UGA aims to track daily percentage movements, not the exact dollar price of gasoline.

To achieve this, UGA primarily invests in short-term futures contracts for RBOB gasoline. To manage its portfolio and meet regulatory requirements, the fund may also invest in futures for other petroleum products, such as crude oil, diesel-heating oil, and natural gas. These typically represent a smaller portion of the portfolio (for example, less than 15% in 2025). UGA also uses other gasoline-related investments like options, forward contracts, and swap agreements to manage risk and maintain liquidity. A key part of UGA's strategy involves "rolling" futures contracts: selling an expiring contract and buying a new one for a future month, which ensures continuous exposure to gasoline prices.

United States Commodity Funds LLC (USCF), the general partner, manages UGA. USCF is a subsidiary of USCF Investments, Inc., ultimately owned by The Marygold Companies, Inc. (MGLD). USCF oversees all aspects of the fund, from its investment strategy to compliance.

Financial Performance

The fiscal year ending December 31, 2025, proved to be a dynamic period for the gasoline market, marked by significant volatility. The benchmark short-term RBOB gasoline futures contract surged by 20% over the year. During this time, UGA's Net Asset Value (NAV) returned 18%, while its market price return was approximately 17.5%. This resulted in a 2% tracking difference against its benchmark, which falls within its stated objective of keeping the average daily tracking difference below 10% over 30-day periods.

As of December 31, 2025, UGA managed approximately $80 million in assets, with 1,500,000 shares outstanding. The total market value of shares held by non-affiliates was approximately $78 million at year-end.

In 2025, the fund generated approximately $1.5 million in interest income from its cash holdings. However, after accounting for operating expenses, UGA reported a net loss of approximately $1 million for the year. Key operating expenses included:

• Management Fees: 0.75% of UGA's average daily net assets.
• Administrative and Custodial Fees: Approximately 0.15% of assets.
• Marketing Agent Fees: Approximately 0.10% of assets.
• Trading Costs (variable): Approximately 0.20% of assets.

A significant factor impacting UGA's performance was the gasoline futures market's predominant state of contango throughout 2025. Contango occurs when futures prices for later delivery are higher than current prices, which negatively impacted UGA's returns by an estimated 1.5% for the year due to the cost of rolling futures contracts.

Risk Factors

Before investing, it is crucial to understand the specific risks associated with UGA:

• Tracking Error Risk: While UGA aims to closely track the daily percentage changes of gasoline futures, various factors—such as market liquidity, trading costs, and the rolling of futures contracts—can cause its performance to differ from the benchmark.
• Contango Risk: As observed in 2025, a persistent contango market (where futures prices for later delivery are higher than current prices) can significantly erode returns over time, even if spot gasoline prices are rising. Conversely, backwardation (where futures prices for later delivery are lower than current prices) can positively impact returns.
• Market Volatility: Gasoline prices are highly sensitive to global supply and demand, geopolitical events, and economic conditions, leading to significant and rapid price swings.
• Liquidity Risk: Although UGA shares trade on NYSE Arca, the underlying futures contracts can experience periods of reduced liquidity, which may impact the fund's ability to execute trades efficiently.
• Counterparty Risk: UGA enters into futures and other derivative contracts with various financial institutions. These counterparties may default on their obligations, posing a risk to the fund.
• Regulatory and Tax Risks: As a commodity pool, UGA must comply with specific regulations. Investors receive a Schedule K-1 for tax purposes, which can be more complex than a typical 1099 form. This may also involve "phantom income," meaning taxable income without a corresponding cash distribution.
• Concentration Risk: UGA is a highly concentrated investment in a single commodity sector, making it susceptible to risks specific to the energy market. It is not a diversified investment.

Management Discussion and Analysis (MD&A) Highlights

Results of Operations: UGA's performance in fiscal year 2025 clearly showed the challenging conditions of the gasoline futures market. While the benchmark RBOB futures contract rose by 20%, UGA's NAV returned 18%, and its market price returned 17.5%. This demonstrates that the fund largely tracked its benchmark, maintaining a 2% tracking difference. UGA achieved this performance despite the significant headwind of a predominantly contango market, which management estimates negatively impacted returns by approximately 1.5%.

The fund's operations generated $1.5 million in interest income from its cash balances. However, total operating expenses—including management fees, administrative costs, marketing fees, and trading costs—offset this income, leading to a net loss of approximately $1 million for the year. Management continuously monitors how market structures, such as contango and backwardation, impact the fund's rolling strategy and overall performance.

Financial Condition: As of December 31, 2025, UGA reported total assets under management of approximately $80 million. The fund's assets primarily consist of cash, cash equivalents, and highly liquid RBOB gasoline futures contracts, along with other permitted petroleum-related derivatives. The fund's capital structure consists of shareholder equity, with 1,500,000 shares outstanding and a total market value of shares held by non-affiliates at approximately $78 million.

Liquidity and Capital Resources: UGA maintains significant liquidity through its holdings of cash, U.S. Treasury obligations, and highly liquid futures contracts. These assets are readily convertible to cash and meet daily operational expenses, collateral requirements for futures positions, and potential redemptions. The fund does not incur significant long-term debt or material debt obligations. Shareholder capital and interest income generated from its cash and cash equivalents fund its operations. Management believes that the fund's current asset base and investment strategy provide sufficient liquidity to meet its obligations and continue its operations for the foreseeable future.

Financial Health

UGA's financial health features an asset-backed structure and minimal reliance on debt.

• Debt: As a commodity pool, UGA generally does not incur long-term debt or significant short-term borrowings. Shareholder capital and interest income generated from its cash and cash equivalents primarily fund its operations.
• Cash and Investments: The fund maintains substantial cash and cash equivalents to meet margin requirements for its futures contracts, cover operational expenses, and provide liquidity for shareholder redemptions. These cash holdings also generate interest income, strengthening the fund's overall financial position. The majority of UGA's investments are in highly liquid RBOB gasoline futures contracts and other permitted petroleum-related derivatives, which are readily convertible to cash.
• Liquidity: The combination of significant cash holdings and investments in liquid futures contracts provides UGA with robust liquidity. This enables efficient portfolio management, allows it to meet daily margin calls, cover operating costs, and fulfill shareholder redemption requests without significant disruption.

Future Outlook

Looking ahead, UGA, classified by the SEC as an "Accelerated Filer" and a "Smaller Reporting Company," remains steadfast in its commitment to tracking the daily percentage changes in the spot price of RBOB gasoline futures.

Management anticipates that global supply and demand dynamics, geopolitical developments, and economic conditions will continue to shape the gasoline market, likely leading to ongoing price volatility. The impact of market conditions like contango or backwardation will remain a key factor in the fund's performance. UGA will continue to employ its established rolling strategy for futures contracts and monitor market liquidity to minimize tracking error.

While the inherent unpredictability of commodity markets prevents us from providing specific guidance on future returns, the fund's strategy and operational framework are designed to consistently pursue its objective.

Competitive Position

UGA operates within the competitive landscape of commodity investment vehicles, offering specialized exposure to gasoline prices. Its key competitive advantages include:

• Accessibility: It offers retail and institutional investors an accessible and convenient way to gain exposure to gasoline price movements without the complexities of direct futures trading accounts.
• Transparency: As an exchange-traded product, its holdings and pricing are generally transparent.
• Liquidity: Shares trade on a major exchange (NYSE Arca), providing daily liquidity for investors.

However, UGA also faces competition from:

• Direct Futures Trading: Sophisticated investors may choose to trade gasoline futures directly, potentially incurring lower expense ratios but requiring specialized knowledge and accounts.
• Other Commodity ETFs/ETNs: Other exchange-traded products offer broader energy exposure (e.g., crude oil, natural gas) or different gasoline-specific strategies.
• Managed Futures Funds: Actively managed funds that invest in a variety of futures contracts, including energy.

UGA differentiates itself through its specific focus on RBOB gasoline futures and its passive tracking strategy. Its target audience typically includes investors seeking specific, targeted exposure to gasoline prices as part of a broader portfolio strategy, who prefer not to engage in direct futures market participation. The underlying commodity market primarily drives the fund's performance, alongside its ability to minimize tracking error and the negative impact of contango.