I dont think that is the case and fractional reserve seems to be the name of the game for some of the ETFs. Would love some numbers regarding the long/shorts if you have them.
I dunno how it works on the US, as a don't invest there. But when I buy some commodity, I get a certificate from the holder saying that it is on their physical possession.
That certificate ensures the commodity is mine even if the holder gets bankrupt or some other disaster. Not having it there would be fraud, and my government does go around checking it.
I have a quite strong suspicion that this is universal. But well, I haven't checked this.
Those cancel each other. The important number is how it compares to the net amount. I don't think anybody does fractional reserves of commodities.