<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30 1998
------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________
Commission File Number 0-28928
ML JWH STRATEGIC ALLOCATION FUND L.P.
-------------------------------------
(Exact Name of Registrant as
specified in its charter)
Delaware 13-3887922
----------------------------- ------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
c/o Merrill Lynch Investment Partners Inc.
Merrill Lynch World Headquarters - South Tower, 6th Fl.
World Financial Center New York, New York 10080-6106
-----------------------------------------------------
(Address of principal executive offices)
(Zip Code)
212-236-5662
--------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No_____
-----
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ML JWH STRATEGIC ALLOCATION FUND L.P.
-------------------------------------
(a Delaware limited partnership)
--------------------------------
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
----------------------------------------------
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
----------------- -----------------
<S> <C> <C>
ASSETS
Accrued interest $ 1,827,110 $ 196,088
U.S. Government obligations 165,950,788 172,586,264
Equity in commodity futures trading accounts:
Cash and options premium 39,587,632 41,484,775
Net unrealized profit on open contracts (4,094,645) 14,898,289
----------------- -----------------
TOTAL $ 203,270,885 $ 229,165,416
================= =================
LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES:
Redemptions payable $ 2,860,710 $ 1,116,238
Profit share payable - 2,640,194
Brokerage commissions payable 1,312,779 1,473,380
Organization and initial offering costs payable 16,422 114,951
Administrative fees payable 42,348 47,527
----------------- -----------------
Total liabilities 4,232,259 5,392,290
----------------- -----------------
MINORITY INTEREST 134,255 135,830
PARTNERS' CAPITAL:
General Partner (15717 and 18177 Units) 2,072,426 2,455,940
Limited Partners (1489842 and 1634252 Units) 196,831,945 221,181,356
----------------- -----------------
Total partners' capital 198,904,371 223,637,296
----------------- -----------------
TOTAL $ 203,270,885 $ 229,165,416
================= =================
NET ASSET VALUE PER UNIT (NOTE 2)
</TABLE>
See notes to consolidated financial statements.
2
<PAGE>
ML JWH STRATEGIC ALLOCATION FUND L.P.
-------------------------------------
(a Delaware limited partnership)
--------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
<TABLE>
<CAPTION>
For the three For the three For the six For the six
months ended months ended months ended months ended
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
----------------- --------------------- ----------------- ----------------
<S> <C> <C> <C> <C>
REVENUES:
Trading profit (loss):
Realized $ 11,312,629 $ (9,513,484) $ 15,823,813 $ (845,167)
Change in unrealized (12,203,959) 3,460,923 (18,581,541) 3,368,640
----------------- --------------------- ----------------- ----------------
Total trading results (891,330) (6,052,561) (2,757,728) 2,523,473
----------------- --------------------- ----------------- ----------------
Interest income 2,818,886 3,131,635 5,954,435 5,905,333
----------------- --------------------- ----------------- ----------------
Total revenues 1,927,556 (2,920,926) 3,196,707 8,428,806
----------------- --------------------- ----------------- ----------------
EXPENSES:
Administrative fees 130,051 139,133 267,629 276,648
Brokerage commissions 4,031,595 4,313,001 8,296,503 8,576,105
----------------- --------------------- ----------------- ----------------
Total expenses 4,161,646 4,452,134 8,564,132 8,852,753
----------------- --------------------- ----------------- ----------------
(LOSS) INCOME BEFORE
MINORITY INTEREST AND
PROFIT SHARE ALLOCATION (2,234,090) (7,373,060) (5,367,425) (423,947)
Profit Share Allocation - (3,746) - (985,346)
Minority Interest 1,319 (3,539) 1,576 (302)
----------------- --------------------- ----------------- ----------------
NET (LOSS) INCOME $ (2,232,771) $ (7,380,345) $ (5,365,849) $ (1,409,595)
================= ===================== ================= ================
NET (LOSS) INCOME PER UNIT:
Weighted average number of units
outstanding 1,568,051 1,784,487 1,604,874 1,749,153
================= ===================== ================= ================
Net (loss) income per weighted average
General Partner and Limited Partner Unit $ (1.42) $ (4.14) $ (3.34) $ (0.81)
================= ===================== ================= ================
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
ML JWH STRATEGIC ALLOCATION FUND L.P.
-------------------------------------
(a Delaware limited partnership)
--------------------------------
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
-------------------------------------------------------
For the six months ended June30, 1998 and 1997
----------------------------------------------
<TABLE>
<CAPTION>
Limited General Subscriptions
Units Partners Partner Receivable Total
--------------- ----------------- ----------------- ------------------ -----------------
<S> <C> <C> <C> <C> <C>
PARTNERS' CAPITAL,
December 31, 1996 1,403,427 $ 188,284,065 $ 2,038,044 $ (18,248,494) $ 172,073,615
Subscriptions 409,237 32,927,078 194,571 18,248,494 51,370,143
Net loss - (1,398,489) (11,106) - (1,409,595)
Organizational and initial
offering costs recover - 366,712 3,765 - 370,477
Redemptions (36,528) (4,592,230) - - (4,592,230)
--------------- ----------------- ----------------- ------------------ -----------------
PARTNERS' CAPITAL,
June 30, 1997 1,776,136 $ 215,587,136 $ 2,225,274 $ - $ 217,812,410
=============== ================= ================= ================== =================
PARTNERS' CAPITAL,
December 31, 1997 1,652,429 $ 221,181,356 $ 2,455,940 $ - $ 223,637,296
Net loss - (5,312,418) (53,431) - (5,365,849)
Redemptions (146,870) (19,036,993) (330,083) - (19,367,076)
--------------- ----------------- ----------------- ------------------ -----------------
PARTNERS' CAPITAL,
June 30, 1998 1,505,559 $ 196,831,945 $ 2,072,426 $ - $ 198,904,371
=============== ================= ================= ================== =================
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
ML JWH STRATEGIC ALLOCATION FUND L.P.
-------------------------------------
(a Delaware limited partnership)
--------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
These consolidated financial statements have been prepared without audit. In
the opinion of management, the consolidated financial statements contain all
adjustments (consisting of only normal recurring adjustments) necessary to
present fairly the financial position of ML JWH Strategic Allocation Fund L.P
(the "Partnership" or the "Fund") as of June 30, 1998 and the results of its
operations for the six months ended June30, 1998. However, the operating
results for the interim periods may not be indicative of the results expected
for the full year.
Certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with generally accepted accounting
principles have been omitted. It is suggested that these financial statements
be read in conjunction with the financial statements and notes thereto included
in the Partnership's Annual Report on form 10-K filed with the Securities and
Exchange Commission for the year ended December 31, 1997 (the "Annual Report").
2. NET ASSET VALUE PER UNIT
For financial reporting purposes with respect to the Units, the Partnership
deducts organizational and offering costs that are payable to the General
Partner in determining the net asset value per unit. For all other purposes
(including computing net asset value for redemptions) the Partnership deducts
only the organizational and offering reimbursement actually paid. The net asset
value per unit was $132.11 and $135.34 for financial reporting purposes and
$132.11 and $135.40 for all other purposes at June 30, 1998 and December 31,
1997, respectively.
3. FAIR VALUE AND OFF-BALANCE SHEET RISK
The Partnership's total trading results by reporting category for the respective
periods were as follows:
<TABLE>
<CAPTION>
For the three For the three For the six For the six
months ended months ended months ended months ended
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
----------------- ----------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Interest rates & Stock indices $ (3,085,156) $ (63,818) $ (3,918,800) $ (923,906)
Commodities 2,725,628 1,744,275 1,863,116 3,823,543
Currencies (1,207,397) (3,859,520) (3,072,229) 5,220,347
Energy 2,655,770 (5,811,455) 7,829,255 (7,835,075)
Metals (1,980,175) 1,937,957 (5,459,070) 2,238,564
----------------- ----------------- ---------------- ----------------
$ (891,330) $ (6,052,561) $ (2,757,728) $ 2,523,473
================= ================= ================ ================
</TABLE>
The contract/notional values of the Partnership's open derivative instrument
positions as of June 30, 1998 and December 31, 1997 were as follows:
<TABLE>
<CAPTION>
1998 1997
-------------------------------------------- -------------------------------------------
Commitment to Commitment to Commitment to Commitment to
Purchase (Futures, Sell (Futures, Purchase (Futures, Sell (Futures,
Options & Forwards) Options & Forwards) Options & Forwards) Options & Forwards)
-------------------- ------------------ ------------------- ------------------
<S> <C> <C> <C> <C>
Interest rate and
Stock Indices $ 1,077,677,282 $ 501,511,102 $ 926,562,961 $ 351,175,040
Commodities 8,539,018 32,888,816 21,239,916 27,160,968
Currencies 166,410,231 362,134,311 199,371,182 390,721,620
Energy 1,277,550 31,818,182 - 39,106,920
Metals 1,779,663 54,965,734 18,503,375 43,958,106
-------------------- ------------------ ------------------- ------------------
$ 1,255,683,744 $ 983,318,145 $ 1,165,677,434 $ 852,122,654
==================== ================== =================== ==================
</TABLE>
5
<PAGE>
The contract/notional values of the Partnership's exchange-traded and non-
exchange-traded open derivative instrument positions as of June 30, 1998 and
December 31, 1997 were as follows:
<TABLE>
<CAPTION>
1998 1997
-------------------------------------------- --------------------------------------------
Commitment to Commitment to Commitment to Commitment to
Purchase (Futures, Sell (Futures, Purchase (Futures, Sell (Futures,
Options & Forwards) Options & Forwards) Options & Forwards) Options & Forwards)
-------------------- ------------------ ------------------- -------------------
<S> <C> <C> <C> <C>
Exchange
traded $ 1,157,455,050 $ 858,595,190 $ 791,818,184 $ 468,259,393
Non-Exchange
traded 98,228,694 124,722,955 373,859,250 383,863,261
-------------------- ------------------ ------------------- -------------------
$ 1,255,683,744 $ 983,318,145 $ 1,165,677,434 $ 852,122,654
==================== ================== =================== ===================
</TABLE>
The average fair values, based on contract/notional values, of the derivative
instruments held or issued as of the end of each calendar month during the six
months ended June 30, 1998 and the year ended December 31, 1997 were as follows:
<TABLE>
<CAPTION>
1998 1997
-------------------------------------------- --------------------------------------------
Commitment to Commitment to Commitment to Commitment to
Purchase (Futures, Sell (Futures, Purchase (Futures, Sell (Futures,
Options & Forwards) Options & Forwards) Options & Forwards) Options & Forwards)
------------------- ------------------- ------------------- ------------------
<S> <C> <C> <C> <C>
Interest rate and
Stock Indices $ 1,061,056,710 $ 336,680,872 $ 1,010,667,321 $ 263,783,626
Commodities 12,677,715 37,360,027 25,901,996 21,055,353
Currencies 351,325,739 485,201,952 395,236,535 484,258,015
Energy 3,241,530 32,924,953 22,168,532 21,307,623
Metals 16,531,716 22,565,065 9,266,297 36,089,734
------------------- ------------------- ------------------- ------------------
$ 1,444,833,410 $ 914,732,869 $ 1,463,240,681 $ 826,494,351
=================== =================== =================== ==================
</TABLE>
The gross unrealized profit and the net unrealized profit on the Partnership's
open derivative instrument positions as of June 30, 1998 and December 31, 1997
were as follows:
<TABLE>
<CAPTION>
1998 1997
----------------------------------- -----------------------------------
Gross Net Gross Net
Unrealized Unrealized Unrealized Unrealized
Profit Profit Profit Profit
---------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Exchange
traded $ 8,907,860 $ (2,139,473) $ 14,037,333 $ 12,316,384
Non-Exchange
traded 934,787 (1,955,172) 8,613,088 2,581,905
---------------- ---------------- ---------------- ---------------
$ 9,842,647 $ (4,094,645) $ 22,650,421 $ 14,898,289
================ ================ ================ ===============
</TABLE>
6
<PAGE>
Item 2: Management's Discussion and Analysis of Financial
-------------------------------------------------
Condition and Results of Operations
-----------------------------------
Performance Summary
January 1, 1997 to June 30, 1997
January 1, 1997 to March 31, 1997
The Fund was profitable in the first quarter, largely reflecting opportunities
in foreign exchange and agricultural commodity markets.
The quarter began with gains recorded in the foreign exchange sector as
movements in key currencies mirrored the trends of 1996. The U.S. dollar
continued to strengthen against the Japanese yen, German mark and Swiss franc.
Gold prices declined to levels not seen since October 1993 as investors shifted
assets into booming equity markets. The U.S. government bond market was
volatile, reflecting revived inflation concerns. Crude oil prices were
buffeted, in part, by the quirky structure of the U.N./Iraq oil agreement which
exaggerated market movements, both up and down.
By February, world financial markets had grown more volatile and long-term
trends in some sectors, notably gold, were reversed, reducing opportunities for
profit. Gains were generated, however, in positions on coffee, as prices were
pushed up by unfavorable weather threatening crop production in Brazil and
Colombia. In the currency markets, the U.S. dollar remained strong against most
major currencies, despite jawboning by finance ministers at the G-7 conference
early in the month. Global interest rate markets were buffeted by continued
speculation on the direction of interest rates in the U.S., United Kingdom, and
Germany.
Positions in agricultural commodities contributed to profits again in March,
particularly in coffee, as coffee roaster drew down on already limited reserves
of coffee beans. A classic "short squeeze"--where not enough immediate supply
was available to meet current demand sent coffee futures prices to their
highest levels since 1994. Crude oil positions were unprofitable as a bigger-
than-anticipated buildup in U.S. stocks pushed prices down. Opportunities for
gain in interest rate markets were limited as continued speculation over the
direction of U.S. interest rates produced volatile and trendless markets.
April 1, 1997 to June 30, 1997
The Fund was unprofitable in the second quarter of 1997, largely reflecting
losses in currency, global interest rate and energy markets. Overall, gains in
international stock indices, metals and agricultural commodities failed to
offset these losses.
The quarter began with investor sentiment decidedly bearish as U.S. economic
reports strengthened the argument for a rate hike by the Federal Reserve and
global equity markets tracked U.S. stock and bond prices downward. But these
markets rebounded in the second week of April as investor confidence was
restored on new data. Positions in most bond markets traded were unprofitable
in this trendless trading environment. Continuing tends in foreign exchange
markets, however, benefited investment programs with substantial currency
components. Gains were realized also as coffee prices surged above $2 a pound
amid declining inventories. Positions in gold were profitable as the price of
the precious metal continued to decline.
Markets in May were roiled by political as well as economic developments,
including upset elections in Europe and jawboning by Japanese officials to
support the yen. The resulting turbulence in financial markets created a
difficult trading environment which resulted in significant losses in some
programs. Overall, programs with substantial currency exposure were
unprofitable. For the most part, trading in stock indices and agricultural
commodities generated gains. Trading in metals was mixed.
Gains were recorded in June as a modicum of clarity and order returned to world
financial markets on an improving outlook for European Monetary Union (EMU).
European bond markets strengthened on positive EMU developments. Trading as
proxy for the union's future currency (the euro), the German mark fell, against
the traditional safe haven currencies--the Swiss Franc, British pound and U.S.
dollar on investor's concerns that proposed fiscal standards might be
compromised by weaker nations in the union. In general, programs with strong
financial components realized gains. Diversified programs suffered losses as
trends in some agricultural commodities were challenged.
January 1, 1998 to June 30, 1998
January 1, 1998 to March 31, 1998
Much of the first quarter of 1998 offered a less-than-ideal trading environment
for the Fund. In January and February, well-established trends in key markets
were interrupted, and many markets traded within a tight range, reducing
opportunities for profit. But the profit picture improved in March, as the U.S.
dollar and other currencies returned to their prior patterns of price movement.
7
<PAGE>
For the period, losses were incurred in positions in most currencies, metals,
stock indices and agricultural commodities. These losses more than offset gains
in energy markets which, despite interim turbulence, ultimately succumbed to the
bearish fundamentals which have pressured prices downward for over six months.
Small gains were also recorded in positions in European interest rates, which
continued to decline as markets of the EMU nations converged.
The quarter began with political and financial scandals in Japan. Even so,
investors were hopeful that the Japanese government would rescue the nation's
economy with a much-anticipated economic stimulus package. Investor optimism
supported the Nikkei and caused the Japanese yen to gain against the U.S.
dollar. Positions in the Nikkei and the yen were unprofitable. January was
also a month of reversals in key metals. The price of gold rose as the dollar
weakened, turning profitable positions in the metal into losses. Gains were
recorded in European and U.S. government bond markets and in crude oil.
Financial markets lacked direction in February. Losses were incurred in nearly
all currencies traded. Trading was also unprofitable in U.S. Treasury bonds,
which traded within a narrow range during the month. Gains continued to be
recorded, however, in European bond markets where yields approached post-war
lows. The silver market hit a 9 1/2 year high on news that a major investor
had purchased 20% of the world's yearly mining output. Strong gains were
realized in silver and in crude oil, which succumbed to weakening fundamentals.
The quarter ended with a sharp revival of the U.S. dollar in world markets,
especially against the yen, and a soaring British pound, which investors viewed
as a safe haven from EMU jitters. Investment programs with large currency
components benefited from decisive moves in these markets as well as in the
Swiss franc and German mark. The price of crude oil rose sharply during the
month, following the surprise decision by OPEC and non-OPEC oil-producing
nations to cut production. By month end, however, investors had judged the
cutbacks insufficient and prices fell back; positions in energy markets were
profitable overall. Positions in metals and agricultural commodities were
unprofitable overall.
April 1, 1998 to June 30, 1998
Investor optimism regarding developments in Japan dissipated rapidly in the
second quarter, as economic reports grew bleak. Performance of the Fund
reflected the erratic behavior of the markets as investors grappled with the
possible impact of a Japanese recession on diverse global markets. Losses were
incurred overall in the three month period ended June 30, 1998, despite strong
gains realized in May.
The quarter began with trendless trading conditions in financial markets as
prospects for interest rate hikes in the U.S. and Germany gave stock and bond
markets on both sides of the Atlantic a good case of the jitters. Interventions
by the Bank of Japan to support the Japanese yen kept the currency markets on
edge for much of the month. Gains in some agricultural commodities traded
failed to offset losses in financial markets. The Fund recorded strong gains in
May, however, as financial market trends showed more definition. Gains were
substantial overall in positions on the yen, which hit a seven year low against
the U.S. dollar.
In a move that surprised the markets, the U.S. and Japan jointly intervened on
June 17 on behalf of the Japanese currency, selling dollars and buying yen in
global foreign exchange markets. The impact on the Fund was sharp, if brief.
Losses were incurred in short positions on the yen, as the Japanese currency
rose against the dollar. But by month's end, the market had returned to
fundamentals, and yen losses were reversed, resulting in small gains in the
currency overall. Nonetheless, the Fund's performance was spotty in June, with
moderate losses recorded overall for the month.
Despite U.S./Japan intervention, the Fund realized sizeable gains in positions
on the yen in the second quarter. Positions in the Japanese Government bond,
where yields declined to historic lows, also resulted in strong gains in the
quarter, as did positions in short sterling; but these gains failed to offset
losses in other interest rate markets traded.
Also in the second quarter, the Fund recorded solid gains in crude oil positions
as prices fell on ample world supply. Profitable positions in coffee, sugar,
corn and wheat offset losses in other agricultural commodities traded in the
period. With the exception of London Metals Exchange aluminum, positions in
other metals traded resulted in losses overall, as did positions in stock
indices.
MONTH-END NET ASSET VALUE PER UNIT
Jan Feb Mar Apr. May Jun.
- ---------------------------------------------------------------------
1997 $126.87 $126.83 $126.92 $126.34 $122.41 $122.74
- ---------------------------------------------------------------------
1998 $133.35 $132.47 $133.48 $133.35 $134.18 $132.11
- ---------------------------------------------------------------------
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not Applicable
8
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are no pending proceedings to which the Partnership or the General
Partner is a party.
Item 2. Changes in Securities and Use of Proceeds
(a) None.
(b) None.
(c) None.
(d) The Fund registered $200,000,000 of limited partnership
interest. The Fund has sold 1,971,418 Units of limited
partnership interest, with an aggregate price of $198,061,545.
During the quarter ended June30, 1998, no units of limited
partnership interest have been sold.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
Effective May 11, 1998, Jo Ann Di Dario became a Vice President, Treasurer
and Chief Financial Officer of Merrill Lynch Investment Partners Inc. ("MLIP").
Ms. Di Dario was born in 1946. Before joining MLIP, she was self-employed for
one year. From February 1996 to May 1997, she worked as a consultant for Global
Asset Management, an international mutual fund organizer and operator
headquartered in London, where she offered advice on restructuring the back
office operations. From May 1992 to January 1996, Ms. Di Dario served as Vice
President of Meridian Bank Corporation, a regional bank holding company. She
was responsible for managing the treasury operations of the bank holding company
and its wholly-owned subsidiary, Meridian Investment Company Inc. Ms. Di Dario
managed the domestic treasury operation of First Fidelity Bank, a regional bank,
from September 1991 to May 1992. From 1985 until December 1990, Ms. Di Dario
was Vice President, Secretary and Controller of Caxton Corporation, a commodity
pool operator and commodity trading advisor. Her background includes seven
years of public accounting experience. She graduated with high honors from
Stockton State College with a Bachelor of Science Degree in Accounting.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
There are no exhibits required to be filed as part of this report.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the first six months of
fiscal 1998.
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ML JWH STRATEGIC ALLOCATION FUND L.P.
By: MERRILL LYNCH INVESTMENT PARTNERS INC.
(General Partner)
Date: August 11, 1998 By:/s/ JOHN R. FRAWLEY, JR.
------------------------
John R. Frawley, Jr.
Chairman, Chief Executive Officer,
President and Director
Date: August 11, 1998 By:/s/ JO ANN DI DARIO
-------------------
Jo Ann Di Dario
Vice President, Chief Financial Officer
and Treasurer
10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> BD
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997
<PERIOD-START> JAN-01-1998 JAN-01-1997
<PERIOD-END> JUN-30-1998 JUN-30-1997
<CASH> 0 0
<RECEIVABLES> 37,320,097 56,579,152
<SECURITIES-RESALE> 0 0
<SECURITIES-BORROWED> 0 0
<INSTRUMENTS-OWNED> 165,950,788 172,586,264
<PP&E> 0 0
<TOTAL-ASSETS> 203,270,885 229,165,416
<SHORT-TERM> 0 0
<PAYABLES> 4,366,514 5,528,120
<REPOS-SOLD> 0 0
<SECURITIES-LOANED> 0 0
<INSTRUMENTS-SOLD> 0 0
<LONG-TERM> 0 0
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 198,904,371 223,637,296
<TOTAL-LIABILITY-AND-EQUITY> 203,270,885 229,165,416
<TRADING-REVENUE> (2,757,728) 2,523,473
<INTEREST-DIVIDENDS> 5,954,435 5,905,333
<COMMISSIONS> 8,562,556 9,838,401
<INVESTMENT-BANKING-REVENUES> 0 0
<FEE-REVENUE> 0 0
<INTEREST-EXPENSE> 0 0
<COMPENSATION> 0 0
<INCOME-PRETAX> (5,365,849) (1,409,595)
<INCOME-PRE-EXTRAORDINARY> (5,365,849) (1,409,595)
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (5,365,849) (1,409,595)
<EPS-PRIMARY> (3.34) (0.81)
<EPS-DILUTED> (3.34) (0.81)
</TABLE>
