KENMAR GLOBAL TRUST, 424B3, 1998-04-09

KENMAR GLOBAL TRUST
424B3, 1998-04-09
COMMODITY CONTRACTS BROKERS & DEALERS

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<PAGE>

Filed Pursuant to Rule
424(b)(3)
Registration No. 333-8869

KENMAR GLOBAL TRUST
PROSPECTUS SUPPLEMENT DATED APRIL 9, 1998
TO
PROSPECTUS DATED SEPTEMBER 26, 1997

As of February 28, 1998, the Net Asset Value per Unit of Kenmar Global
Trust (the "Trust") had risen to $103.79 from the initial $100 Net Asset Value
per Unit as of May 22, 1997.

---------------------------

The Trust's current Advisors are set forth in the accompanying
Prospectus. This Supplement relates to the replacement, expected to be as of
June 30, 1998, of two of the current Advisors, Chesapeake Capital Corporation
and Witter & Lester. As of such date, the Trust's assets previously managed by
Chesapeake Capital Corporation and Witter & Lester will be (i) reallocated to
the Trust's other current Advisors and (ii) allocated to Hirst Investment
Management Inc. and Sunrise Capital Partners LLC, two replacement Advisors
retained by Kenmar Advisory Corp. ("Kenmar") on behalf of the Trust.

The current allocation of the Trust's assets among its Advisors is set
forth on the following page. Following the reallocation described above, the
Trust's assets are anticipated to be allocated among its Advisors as of June 30,
1998 as set forth below in the parentheses following each Advisor's name. The
accompanying Prospectus, as supplemented, includes more detailed information
concerning the core Advisors identified below. See "The Trust and Its
Objectives" and "The Advisors" in the Prospectus. Core Advisors are Advisors
allocated 10% or more of the Trust's assets for management. Non-core Advisors
are allocated less than 10% of the Trust's assets for management. Each of the
Trust's current Advisors is a core Advisor. The replacement Advisors, Hirst
Investment Management Inc. and Sunrise Capital Partners LLC, are non-core
Advisors.

Annualized
Worst/Best Standard Assets Under
Monthly Deviation Management In General Strategy
Rate of Return1 of Return2 Fund Program3 Classification4
--------------- ----------- ------------- --------------------
<S> <C> <C> <C> <C>
Core Advisors
Dreiss Research Corporation (19.13)%/18.14% 27.02% $15 million Pattern-Recognition,
(27%) Long-Term Technical,
Trend-Following
Hyman Beck & Company, Inc.
Global Portfolio (27%) (8.71)%/18.71% 18.10% $195 million Long-Term Technical,
Trend-Following
Willowbridge Associates Inc.
XLIM Program (27%) (12.67)%/31.21% 26.47% $368 million Discretionary

Non-Core Advisors
Hirst Investment Management Inc. (7.34)%/16.10% 24.34% $22 million Technical, Non-
(9.5%) Discretionary

Sunrise Capital Partners LLC (11.82)%/19.10% 21.36% $57 million Long-Term Technical,
Expanded Diversified Trend-Following
Program (9.5%)

</TABLE>

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
Performance and assets under management information is current as of February
28, 1998. Performance figures are not audited.
- -------------------------

1 The lowest and the highest monthly rate of return for the program
traded for the Trust. Performance information is presented for the
period from January 1, 1993 (or inception, if later) through February
28, 1998.

2 An annualized standard deviation of 2% and a mean return of 1% would
mean that approximately two-thirds of all monthly returns during a year
have historically fallen between (1)% and 3%, i.e., within a range
(deviation) of 2% above or below the mean. Standard deviation is one
widely-accepted measure of risk, as standard deviation indicates the
variability of returns. In general, the more variable an Advisor's
historical returns, the greater the risk that substantial losses (or
gains) have been included within the historical range of returns.

3 Approximate assets under management in the program traded for the Trust
("notional" funds excluded).

4 See "The Trust and Its Objectives" in the Prospectus for a description
of these strategy classifications.

IN ADDITION TO THIS PROSPECTUS SUPPLEMENT, THE PROSPECTUS MUST BE ACCOMPANIED BY
SUMMARY FINANCIAL INFORMATION FOR THE TRUST CURRENT WITHIN 60 CALENDAR DAYS.

---------------------------

THE COMMODITY FUTURES TRADING COMMISSION HAS NOT PASSED UPON THE MERITS
OF PARTICIPATING IN THIS POOL NOR HAS THE COMMISSION PASSED UPON
THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS SUPPLEMENT.

---------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

---------------------------

Kenmar Advisory Corp.
Managing Owner

<PAGE>

The Trust's Prospectus and 1997 Annual Report accompany this
Supplement and are incorporated herein by this reference. This Supplement, the
Prospectus and the 1997 Annual Report must be considered in determining whether
to invest in the Trust's Units. The headings set forth below correspond to those
in the Prospectus and corresponding sections are supplemented to the extent
described below. Capitalized terms used but not defined in this Supplement have
the meanings set forth in the Prospectus.

THE TRUST AND ITS OBJECTIVES -- The Current Advisors

As of June 30, 1998, Chesapeake Capital Corporation and Witter &
Lester will no longer manage any of the Trust's assets. Each of the Trust's
current Advisors purchased 500 Units as of the inception of the Trust's trading.
Hirst Investment Management Inc. and Sunrise Capital Partners LLC will not be
required to purchase Units.

Dreiss Research Corporation (19.13)%/18.14% 27.02% $13 million Pattern-Recognition,
(24%) Long-Term Technical,
Trend-Following

Hyman Beck & Company, Inc. (8.71)%/18.71% 18.10% $195 million Long-Term Technical,
Global Portfolio (21%) Trend-Following

Willowbridge Associates Inc.
XLIM Program (24%) (12.67)%/31.21% 26.47% $368 million Discretionary

Witter & Lester (6.45)%/ 3.98% 7.60% $11 million Discretionary, Technical,
(7%) S&P Only

</TABLE>

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

Performance and assets under management information is current as of February
28, 1998. Performance figures are not audited.

- -------------------------

3 Approximate assets under management in the program traded for the
Trust ("notional" funds excluded).

4 See "The Trust and Its Objectives" in the Prospectus for a description
of these strategy classifications.

CHARGES

Hirst Investment Management Inc. and Sunrise Capital Partners LLC each
will receive (i) Profit Shares equal to 20% of New Trading Profit generated by
such Advisor, calculated on a high water mark basis. Profit Shares are
calculated as of the end of each calendar quarter and (ii) a Consulting Fee,
monthly in arrears, payable by Kenmar, equal to 0.167% of the beginning of month
Net Assets of the Trust allocated to such Advisor (a 2% annual rate).

CONFLICTS OF INTEREST

Kenmar maintains a business relationship unrelated to the Trust with
Hirst Investment Management Inc. In particular, an affiliate of Kenmar has
entered into a marketing agreement with Hirst Investment Management Inc.
pursuant to which such affiliate is compensated for providing marketing services
and for arranging the placement of assets for management with Hirst Investment
Management Inc. While neither Kenmar nor any of its affiliates will receive any
portion of any fees paid to Hirst Investment Management Inc. in respect of the
advisory services provided to the Trust, Kenmar may have a conflict of interest
between allocating Trust assets to Hirst Investment Management Inc. and other
commodity trading advisors who do not have marketing relationships with Kenmar
or its affiliates.

<PAGE>

KENMAR GLOBAL TRUST
$50,000,000

UNITS OF BENEFICIAL INTEREST

Kenmar Global Trust (the "Trust") is a Delaware business trust that
commenced trading operations on May 22, 1997. The Trust trades in the
domestic and international futures, forward, options and related markets.
Wilmington Trust Company, the Trustee of the Trust, has delegated to Kenmar
Advisory Corp. ("Kenmar"), the managing owner of the Trust, the exclusive
management and control of all aspects of the business of the Trust. Kenmar
manages the Trust's trading by allocating the Trust's assets to multiple
commodity trading advisors ("Advisors"). The Advisors trade independently of
each other in a wide range of global markets applying diverse proprietary
strategies. The Trust's objective is to achieve significant profits while
controlling performance volatility and the risk of loss. If the Trust is
successful, it can both achieve significant profits over time and add a
potentially valuable element of diversification to a traditional portfolio.

Units of beneficial interest ("Units") are offered for sale AS OF
THE LAST DAY OF EACH MONTH at the then-current Net Asset Value per Unit . Net
Asset Value per Unit is determined in accordance with generally accepted
accounting principles and represents the Net Assets of the Trust divided by
the number of Units outstanding. Net Assets and Net Asset Value per Unit are
more fully defined under "Redemptions and Distributions" at page 35.

The minimum investment is 50 Units (or, if less, $5,000), except for
(i) trustees or custodians of eligible employee benefit plans and individual
retirement accounts and (ii) Unitholders subscribing for additional Units,
where the minimum investment is 20 Units (or, if less, $2,000). Investments
in excess of these minimums are permitted in $100 increments. Units are sold
in fractions calculated to three decimal places.

Units may be redeemed, at a Unitholder's option, as of the
close of business on the last day of any month beginning with the
end of the sixth month after their sale. Units are redeemed at
the then-current Net Asset Value per Unit, subject to redemption
charges of 3% and 2%, respectively, for Units redeemed on and
after the end of the sixth month through the end of the twelfth
month after sale and from the end of the twelfth month through the end of the
eighteenth month after sale.

---------------

THE UNITS ARE SPECULATIVE SECURITIES.

---------------

- - PAST PERFORMANCE OF MANAGED FUTURES IN GENERAL AND OF THE TRUST IN
PARTICULAR WILL NOT NECESSARILY BE INDICATIVE OF FUTURE RESULTS. ALL OR
SUBSTANTIALLY ALL OF AN INVESTMENT COULD BE LOST.

- - THE TRUST'S TRADING IS HIGHLY LEVERAGED AND WILL TAKE PLACE IN VOLATILE
MARKETS.

- - THE TRUST IS SUBJECT TO SUBSTANTIAL CHARGES. ASSUMING THE INVESTOR
REDEEMS IN THE FIRST YEAR AND, THUS, IS ASSESSED A 3% REDEMPTION
PENALTY, OVERALL TRADING PROFITS OF APPROXIMATELY 14.4% OF THE
TRUST'S AVERAGE BEGINNING OF MONTH NET ASSETS MUST BE EARNED DURING THE
FIRST YEAR OF TRADING IN ORDER FOR THE NET ASSET VALUE PER UNIT NOT TO
DECLINE SOLELY DUE TO APPLICABLE EXPENSES.

- - CERTAIN GENERAL TYPES OF MARKET CONDITIONS -- IN PARTICULAR, TRENDLESS
PERIODS WITHOUT MAJOR PRICE MOVEMENTS -- SIGNIFICANTLY REDUCE THE POTENTIAL
FOR CERTAIN ADVISORS TO TRADE SUCCESSFULLY.

SEE "RISK FACTORS" AND "CONFLICTS OF INTEREST" BEGINNING AT PAGES 8 AND 32,
RESPECTIVELY.

SUBSCRIBERS WILL BE REQUIRED TO MAKE CERTAIN REPRESENTATIONS AND WARRANTIES
IN THE SUBSCRIPTION AGREEMENT AND POWER OF ATTORNEY. SEE "PLAN OF
DISTRIBUTION - SUBSCRIBERS' REPRESENTATIONS AND WARRANTIES" AT PAGE 47.

THE COMMODITY FUTURES TRADING COMMISSION HAS NOT PASSED UPON THE MERITS OF
PARTICIPATING IN THIS POOL NOR HAS THE COMMISSION PASSED UPON THE ADEQUACY OR
ACCURACY OF THIS PROSPECTUS.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
- --------------------------------------- --------------------- -------------------------------- --------------------------------
UNITS OF LIMITED PARTNERSHIP INTEREST PRICE TO PUBLIC (1) SELLING COMMISSIONS (2)(3)(4) PROCEEDS TO TRUST (1)(2)(3)(4)
- --------------------------------------- --------------------- -------------------------------- --------------------------------
<S> <C> <C> <C>
ONGOING OFFERING PERIOD - PER UNIT NET ASSET VALUE NONE NET ASSET VALUE
- --------------------------------------- --------------------- -------------------------------- --------------------------------
SEE NOTES ON PAGE (I).

</TABLE>

KENMAR ADVISORY CORP.

MANAGING OWNER
THE DATE OF THIS PROSPECTUS IS SEPTEMBER 26, 1997
(Not for use after JUNE 26, 1998)

<PAGE>

NOTES TO COVER PAGE

(1) The Units will be continuously offered on a "best
efforts" basis without any firm underwriting commitment through registered
broker-dealers ("Selling Agents") selected by Kenmar.

Units are offered at the immediately following month-end
Net Asset Value per Unit, which reflects the amount that could be realized
upon redemption (before reduction for the redemption charge, if applicable).

All Units for which subscriptions are accepted during a
month are issued as of a single closing date as of the beginning of the
immediately following month. Units participate in the profits and losses of
the Trust on and after the date of such closing.

Kenmar must accept or reject subscriptions within five
business days of receipt. All investors will have the right to revoke their
subscriptions and receive a refund of their invested funds for a period of
five business days following receipt of this Prospectus. Rejected or revoked
subscriptions will be returned without interest.

Subscription documents must normally be received at least
five calendar days before the end of a month in order to PARTICIPATE as of
the first day of the immediately following month.

Subscribers whose subscriptions are accepted will be
notified of when their customer securities accounts will be debited in the
amount of their subscriptions or their subscription checks cashed.
Subscribers whose subscriptions are rejected will be notified of when their
subscriptions will be (promptly) returned to them.

There is no minimum number of Units which must be sold as
of the beginning of any month for any Units then to be sold.

The purchase of Units may be made only by persons who, at a
minimum, have either (i) a net worth of at least $150,000 (exclusive of home,
furnishings and automobiles) or (ii) an annual gross income of at least
$45,000 and a net worth of at least $45,000 (exclusive of home, furnishings
and automobiles). Residents of the following states must meet the
requirements set forth below ("net worth" for such purposes is in all cases
exclusive of home, furnishings and automobiles). In addition, no one may
invest more than 10% of his or her readily marketable assets in the Trust.

1. Arizona -- Net worth of at least $225,000 or a net worth
of at least $60,000 and an annual income of at least $60,000.

2. California -- Net worth of at least $250,000 and an
annual income of at least $65,000 or, in the alternative, a net worth of at
least $500,000.

3. Iowa -- Net worth of at least $225,000 or a net worth of
at least $60,000 and an annual taxable income of at least $60,000. The
minimum investment for individual retirement accounts is $2,500.

4. Maine -- Minimum subscription per investment, both
initial and subsequent, of $5,000; net worth of at least $200,000 or a net
worth of at least $50,000 and an annual income of at least $50,000. MAINE
RESIDENTS MUST SIGN A SUBSCRIPTION AGREEMENT AND POWER OF ATTORNEY SIGNATURE
PAGE SPECIFICALLY PREPARED FOR MAINE RESIDENTS, A COPY OF WHICH SHALL
ACCOMPANY THIS PROSPECTUS AS DELIVERED TO ALL MAINE RESIDENTS.

5. Massachusetts -- Net worth of at least $225,000 or a net
worth of at least $60,000 and an annual income of at least $60,000.

6. Michigan -- Net worth of at least $225,000 or a net
worth of at least $60,000 and taxable income in 1995 of at least $60,000.

7. MISSISSIPPI -- Net worth of at least $225,000 or a net
worth of at least $60,000 and an annual income of at least $60,000.

8. MISSOURI -- Net worth of at least $225,000 or a net
worth of at least $60,000 and an annual income of at least $60,000.

-i-
<PAGE>

NOTES TO COVER PAGE (cont'd)

9. New Hampshire -- Net worth of at least $250,000 or a net
worth of at least $125,000 and an annual income of at least $50,000.

10. North Carolina -- Net worth of at least $225,000 or a
net worth of at least $60,000 and an annual income of at least $60,000.

11. Oklahoma -- Net worth of at least $225,000 or a net
worth of $60,000 and an annual income of at least $60,000.

12. Oregon -- Net worth of at least $225,000 or a net worth
of at least $60,000 and an annual taxable income of at least $60,000.

13. Pennsylvania -- Net worth of a least $175,000 or a net
worth of at least $100,000 and an annual taxable income of at least $50,000.

14. South Carolina -- Net worth of at least $100,000 or a
net income in 1995 some portion of which was subject to maximum federal and
state income tax.

15. Tennessee -- Net worth of at least $225,000 or a net
worth of at least $60,000 and an annual taxable income of at least $60,000.

16. Texas -- Net worth of at least $225,000 or a net worth
of at least $60,000 and an annual taxable income of at least $60,000.

(2) The costs of organizing the Trust and the initial
offering of the Units, approximately $578,000, has been advanced by Kenmar.
Such costs may be reduced by up to $50,000 if certain benchmarks are not
reached. This prepaid expense is being reimbursed to Kenmar by the Trust in
monthly installments equal to 0.2% of the Trust's beginning of month Net
Assets.

(3) See "Plan of Distribution -- Selling Agents'
Compensation" at page 47 for information relating to indemnification
arrangements with respect to the Selling Agents.

(4) No selling commissions will be paid from the proceeds
of subscriptions. Kenmar, not the Trust, will pay the Selling Agents upfront
selling commissions equal to 5% of the purchase price per Unit at the time of
sale. Notwithstanding the foregoing, Selling Agents will not receive upfront
selling commissions to the extent investors have acquired Units on the same
day as or within seventy-five (75) days after redeeming investments in
Kenmar-sponsored investment vehicles.

The Selling Agents will also receive ongoing "trailing
commissions" or installment selling commissions on Units sold by their
registered representatives. Trailing commissions will be paid to Selling
Agents whose registered representatives agree to perform certain ONGOING
services, are registered with the Commodity Futures Trading Commission (the
"CFTC") and have satisfied all applicable proficiency requirements (I.E.,
have passed either the Series 3 National Commodity Futures Examination or the
Series 31 Futures Managed Fund Examination). Such "trailing commissions" will
equal 3.5% per annum of the average beginning of month Net Asset Value per
Unit, beginning with the thirteenth month after sale (immediately to the
extent investors have acquired Units on the same day as or within
seventy-five (75) days after redeeming investments in Kenmar-sponsored
investment vehicles) and continuing for as long as such Unit remains
outstanding. Installment selling commissions will be paid to Selling Agents
in respect of Units where there is no CFTC-qualified registered
representative to perform ONGOING services. Installment selling commissions
will be calculated in the same manner as above, but will be limited to 4.5%
of the initial subscription price of such Units (9.5% to the extent investors
have acquired Units on the same day as or within seventy-five (75) days after
redeeming investments in Kenmar- sponsored investment vehicles). Selling
Agents will pass on to their registered representatives a portion of the
foregoing selling compensation and "trailing commissions," after deduction of
"due diligence" and administrative expenses incurred in connection with this
offering, in accordance with such Selling Agents' standard compensation
arrangements.

--------------------

-ii-
<PAGE>

REGULATORY NOTICES

THIS PROSPECTUS MUST BE ACCOMPANIED BY: (1) THE PROSPECTUS
SUPPLEMENT, IF ANY, CONTAINING CERTAIN INFORMATION REGARDING THE CURRENT
ADVISORS; AND (2) SUMMARY FINANCIAL INFORMATION FOR THE TRUST CURRENT WITHIN
60 CALENDAR DAYS.

--------------------

NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED
TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUST, KENMAR, THE
SELLING AGENTS, THE ADVISORS OR ANY OTHER PERSON.

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY THE SECURITIES OFFERED HEREBY TO ANY PERSON
OR BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION MAY NOT
LAWFULLY BE MADE.

--------------------

THE BOOKS AND RECORDS OF THE TRUST WILL BE MAINTAINED AT
ITS PRINCIPAL OFFICE, TWO AMERICAN LANE, GREENWICH, CONNECTICUT 06831-8150;
TELEPHONE NUMBER (203) 861-1000. UNITHOLDERS WILL HAVE THE RIGHT, DURING
NORMAL BUSINESS HOURS, TO HAVE ACCESS TO AND COPY (UPON PAYMENT OF REASONABLE
REPRODUCTION COSTS) SUCH BOOKS AND RECORDS IN PERSON OR BY THEIR AUTHORIZED
ATTORNEY OR AGENT. EACH MONTH, KENMAR WILL DISTRIBUTE REPORTS TO ALL
UNITHOLDERS SETTING FORTH SUCH INFORMATION RELATING TO THE TRUST AS THE CFTC
AND THE NATIONAL FUTURES ASSOCIATION (THE "NFA") MAY REQUIRE TO BE GIVEN TO
THE PARTICIPANTS IN COMMODITY POOLS SUCH AS THE TRUST AND ANY SUCH OTHER
INFORMATION AS KENMAR MAY DEEM APPROPRIATE. THERE WILL SIMILARLY BE
DISTRIBUTED TO UNITHOLDERS, NOT MORE THAN 90 DAYS AFTER THE CLOSE OF EACH OF
THE TRUST'S FISCAL YEARS, AUDITED CERTIFIED FINANCIAL STATEMENTS AND (IN NO
EVENT LATER THAN MARCH 15 OF THE IMMEDIATELY FOLLOWING YEAR) THE TAX
INFORMATION RELATING TO THE TRUST NECESSARY FOR THE PREPARATION OF
UNITHOLDERS' ANNUAL FEDERAL INCOME TAX RETURNS.

--------------------

THE DIVISION OF INVESTMENT MANAGEMENT OF THE SECURITIES AND
EXCHANGE COMMISSION REQUIRES THAT THE FOLLOWING STATEMENT BE PROMINENTLY SET
FORTH HEREIN: "KENMAR GLOBAL TRUST IS NOT A MUTUAL FUND OR ANY OTHER TYPE OF
INVESTMENT COMPANY WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT OF 1940,
AS AMENDED, AND IS NOT SUBJECT TO REGULATION THEREUNDER."

--------------------

-iii-
<PAGE>

COMMODITY FUTURES TRADING COMMISSION
RISK DISCLOSURE STATEMENT

YOU SHOULD CAREFULLY CONSIDER WHETHER YOUR FINANCIAL
CONDITION PERMITS YOU TO PARTICIPATE IN A COMMODITY POOL. IN SO DOING, YOU
SHOULD BE AWARE THAT FUTURES AND OPTIONS TRADING CAN QUICKLY LEAD TO LARGE
LOSSES AS WELL AS GAINS. SUCH TRADING LOSSES CAN SHARPLY REDUCE THE NET ASSET
VALUE OF THE POOL AND CONSEQUENTLY THE VALUE OF YOUR INTEREST IN THE POOL. IN
ADDITION, RESTRICTIONS ON REDEMPTIONS MAY AFFECT YOUR ABILITY TO WITHDRAW
YOUR PARTICIPATION IN THE POOL.

FURTHER, COMMODITY POOLS MAY BE SUBJECT TO SUBSTANTIAL
CHARGES FOR MANAGEMENT, AND ADVISORY AND BROKERAGE FEES. IT MAY BE NECESSARY
FOR THOSE POOLS THAT ARE SUBJECT TO THESE CHARGES TO MAKE SUBSTANTIAL TRADING
PROFITS TO AVOID DEPLETION OR EXHAUSTION OF THEIR ASSETS. THIS DISCLOSURE
DOCUMENT CONTAINS A COMPLETE DESCRIPTION OF EACH EXPENSE TO BE CHARGED THIS
POOL AT PAGES 22 THROUGH 23 AND A STATEMENT OF THE PERCENTAGE RETURN
NECESSARY TO BREAK EVEN, THAT IS, TO RECOVER THE AMOUNT OF YOUR INITIAL
INVESTMENT, AT PAGE 6.

THIS BRIEF STATEMENT CANNOT DISCLOSE ALL THE RISKS AND
OTHER FACTORS NECESSARY TO EVALUATE YOUR PARTICIPATION IN THIS COMMODITY
POOL. THEREFORE, BEFORE YOU DECIDE TO PARTICIPATE IN THIS COMMODITY POOL, YOU
SHOULD CAREFULLY STUDY THIS DISCLOSURE DOCUMENT, INCLUDING A DESCRIPTION OF
THE PRINCIPAL RISK FACTORS OF THIS INVESTMENT, AT PAGES 8 THROUGH 12.

YOU SHOULD ALSO BE AWARE THAT THIS COMMODITY POOL MAY TRADE
FOREIGN FUTURES OR OPTIONS CONTRACTS. TRANSACTIONS ON MARKETS LOCATED OUTSIDE
THE UNITED STATES, INCLUDING MARKETS FORMALLY LINKED TO A UNITED STATES
MARKET, MAY BE SUBJECT TO REGULATIONS WHICH OFFER DIFFERENT OR DIMINISHED
PROTECTION TO THE POOL AND ITS PARTICIPANTS. FURTHER, UNITED STATES
REGULATORY AUTHORITIES MAY BE UNABLE TO COMPEL THE ENFORCEMENT OF THE RULES
OF REGULATORY AUTHORITIES OR MARKETS IN NON-UNITED STATES JURISDICTIONS WHERE
TRANSACTIONS FOR THE POOL MAY BE EFFECTED.

1
<PAGE>

KENMAR GLOBAL TRUST

TABLE OF CONTENTS

PROSPECTUS SECTION PAGE PROSPECTUS SECTION PAGE
<S> <C> <C> <C>
SUMMARY.......................................... 4 (24) REGULATORY MATTERS MAY ALTER THE NATURE
OVERVIEW...................................... 4 OF AN INVESTMENT IN THE TRUST............. 12
RISK FACTORS.................................. 4
THE TRUST AND ITS OBJECTIVES.................. 5 THE TRUST AND ITS OBJECTIVES..................... 13
"BREAKEVEN TABLE"............................. 6 OBJECTIVES.................................... 13
SUITABILITY................................... 7 INVESTMENT PHILOSOPHY......................... 13
ACCESS TO GLOBAL MARKETS...................... 14
RISK FACTORS 8 THE ADVISORS.................................. 15

(1) PAST PERFORMANCE NOT NECESSARILY KENMAR ADVISORY CORP............................. 18
INDICATIVE OF FUTURE RESULTS; ALL OR BACKGROUND AND PRINCIPALS..................... 18
SUBSTANTIALLY ALL OF AN INVESTMENT COULD MANAGEMENT OF TRADERS......................... 19
BE LOST ................................... 8 FIDUCIARY OBLIGATIONS OF KENMAR............... 20
(2) SPECULATIVE AND VOLATILE MARKETS; HIGHLY INVESTMENT OF KENMAR IN THE TRUST............. 21
LEVERAGED TRADING.......................... 8
(3) SUBSTANTIAL CHARGES ....................... 8 USE OF PROCEEDS.................................. 21
(4) IMPORTANCE OF MARKET CONDITIONS
TO PROFITABILITY........................... 8 CHARGES.......................................... 22
(5) TECHNICAL, TREND-FOLLOWING TRADING SYSTEMS CHARGES PAID BY THE TRUST..................... 22
REQUIRE SUSTAINED PRICE MOVES IN ORGANIZATIONAL AND INITIAL
ORDER TO TRADE PROFITABLY.................. 8 OFFERING COSTS............................. 23
(6) DISCRETIONARY TRADING STRATEGIES MAY INCUR BROKERAGE COMMISSIONS...................... 23
SUBSTANTIAL LOSSES......................... 9 MISCELLANEOUS EXECUTION COSTS.............. 23
(7) DECISIONS BASED UPON FUNDAMENTAL "BID-ASK" SPREADS.......................... 24
ANALYSIS MAY NOT RESULT IN PROFIT SHARES AND INCENTIVE FEES........... 24
PROFITABLE TRADING......................... 9 ADMINISTRATIVE COSTS....................... 25
(8) INCREASING THE ASSETS MANAGED BY EXTRAORDINARY EXPENSES..................... 26
THE ADVISORS MAY DIMINISH THEIR RETURNS.... 9 CHARGES PAID BY KENMAR........................ 26
(9) NO ASSURANCE OF ADVISORS' CONTINUED SELLING COMMISSIONS; "TRAILING
SERVICES................................... 9 COMMISSIONS"............................... 26
(10) LIMITED ABILITY TO LIQUIDATE AN INVESTMENT CONSULTING FEES............................ 26
IN THE UNITS............................... 9 REDEMPTION CHARGES............................ 26
(11) POSSIBLY ILLIQUID MARKE.................... 10
(12) "ZERO-SUM" TRADING; THE TRUST DOES NOT THE CLEARING BROKERS............................. 26
ACQUIRE ANY ASSET WITH INTRINSIC VALUE.... 10 ING FUTURES AND OPTIONS....................... 27
(13) NON-CORRELATED, NOT NEGATIVELY PAINEWEBBER................................... 27
CORRELATED, PERFORMANCE OBJECTIVE......... 10
(14) BROAD INDICES MAY PERFORM QUITE CONFLICTS OF INTEREST............................ 32
DIFFERENTLY FROM INDIVIDUAL INVESTMENTS... 10 GENERAL....................................... 32
(15) DISTORTION IN PROFIT SHARE AND INCENTIVE KENMAR........................................ 33
FEE CALCULATIONS.......................... 10 THE ADVISORS.................................. 33
(16) ADVISORS TRADING INDEPENDENTLY OF EACH THE CLEARING BROKERS AND
OTHER MAY REDUCE RISK CONTROL POTENTIAL... 11 EXECUTING BROKERS............................. 34
(17) TRADING ON COMMODITY EXCHANGES OUTSIDE THE SELLING AGENTS................................ 34
UNITED STATES MAY PRESENT CERTAIN PROPRIETARY TRADING/OTHER CLIENTS............ 34
ADDITIONAL RISKS.......................... 11
(18) CONFLICTS OF INTEREST..................... 11 REDEMPTIONS AND DISTRIBUTIONS.................... 35
(19) UNITHOLDERS TAXED CURRENTLY............... 11
(20) LIMITATION ON DEDUCTIBILITY OF THE TRUST AND THE TRUSTEE........................ 36
"INVESTMENT ADVISORY FEES"................ 12 PRINCIPAL OFFICE; LOCATION OF RECORDS......... 36
(21) TAXATION OF INTEREST INCOME IRRESPECTIVE CERTAIN ASPECTS OF THE TRUST.................. 36
OF TRADING LOSSES......................... 12 THE TRUSTEE................................... 36
(22) POSSIBILITY OF A TAX AUDIT OF BOTH MANAGEMENT OF TRUST AFFAIRS; VOTING BY
THE TRUST AND UNITHOLDERS................. 12 UNITHOLDERS................................... 37
(23) FAILURE OF BROKERAGE FIRMS; DEFAULT RECOGNITION OF THE TRUST IN CERTAIN STATES.... 37
BY FORWARD MARKET PARTICIPANTS............ 12 POSSIBLE REPAYMENT OF DISTRIBUTIONS RECEIVED
BY UNITHOLDERS; INDEMNIFICATION OF THE
TRUST BY UNITHOLDERS.......................... 38
</TABLE>

2
<PAGE>

TABLE OF CONTENTS (CONT.)

<S> <C> <C> <C>
TRANSFERS OF UNITS RESTRICTED................. 38 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
REPORTS TO UNITHOLDERS........................ 38 CONDITION AND RESULTS OF OPERATIONS ............. 52
GENERAL....................................... 39 OPERATIONAL OVERVIEW; ADVISOR SELECTIONS...... 52
LIQUIDITY..................................... 52
THE FUTURES AND FORWARD MARKETS.................. 39 RESULTS OF OPERATIONS......................... 53
FUTURES AND FORWARD CONTRACTS................. 39 GENERAL....................................... 53
HEDGERS AND SPECULATORS....................... 39 PERFORMANCE SUMMARY........................... 53
COMMODITY EXCHANGES........................... 40 LIQUIDITY AND CAPITAL RESOURCES............... 53
SPECULATIVE POSITION AND DAILY PRICE
FLUCTUATION LIMITS............................ 40 INDEX OF DEFINED TERMS........................... 54
MARGINS....................................... 40
THE ADVISORS..................................... 55
FEDERAL INCOME TAX CONSEQUENCES.................. 40
THE TRUST'S PARTNERSHIP TAX STATUS............ 41 PERFORMANCE OF COMMODITY POOLS
TAXATION OF UNITHOLDERS ON PROFITS AND OPERATED BY KENMAR.......................... 100
LOSSES OF THE TRUST........................... 41
LIMITATIONS ON DEDUCTIBILITY OF TRUST LOSSES INVESTMENT FACTORS............................. 104
BY UNITHOLDERS................................ 41
TREATMENT OF INCOME AND LOSS UNDER THE INDEX TO FINANCIAL STATEMENTS.................. F-1
"PASSIVE ACTIVITY LOSS RULES"................. 42
CASH DISTRBUTION AND REMPTION OF UNITS........ 42 KENMAR GLOBAL TRUST INDEPENDENT
GAIN OR LOSS ON NON-SECTION 1256 CONTRACTS.... 42 AUDITORS' REPORT............................ F-2
TAX ON CAPITAL GAINS AND LOSSES............... 42
LIMITED DEDUCTION FOR CERTAIN EXPENSES........ 43 KENMAR GLOBAL TRUST STATEMENTS
INTEREST INCOME............................... 43 OF FINANCIAL CONDITION...................... F-3
SYNDICATION FEES.............................. 44
LIMITATION ON DEDUCTIBILITY OF INTEREST ON KENMAR GLOBAL TRUST STATEMENT OF
INVESTMENT INDEBTEDNESS....................... 44 OPERATIONS.................................. F-4
"UNRELATED BUSINESS TAXABLE INCOME"........... 44
IRS AUDITS OF THE TRUST AND ITS UNITHOLDERS... 44 KENMAR GLOBAL TRUST STATEMENT
STATE AND OTHER TAXES......................... 44 CASH FLOWS.................................. F-5

PURCHASES BY EMPLOYEE BENEFIT PLANS.............. 45 KENMAR GLOBAL TRUST STATEMENT OF
GENERAL....................................... 45 CHANGES IN UNITHOLDERS' CAPITAL
"PLAN ASSETS"................................. 45 (NET ASSET VALUE)........................... F-6
INELIGIBLE PURCHASERS......................... 46
KENMAR GLOBAL TRUST NOTES TO
PLAN OF DISTRIBUTION............................. 47 FINANCIAL STATEMENTS........................ F-7
SUBSCRIPTION PROCEDURE........................ 47
SUBSCRIBERS' REPRESENTATIONS AND KENMAR ADVISORY CORP. INDEPENDENT
WARRANTIES.................................... 47 AUDITORS' REPORT............................ F-14
SELLING AGENTS' COMPENSATION.................. 48
KENMAR ADVISORY CORP. STATEMENTS
LEGAL MATTERS.................................... 48 OF FINANCIAL CONDITION...................... F-15

EXPERTS.......................................... 48 KENMAR ADVISORY CORP. NOTES TO
STATEMENT OF FINANCIAL CONDITION............ F-16
ADDITIONAL INFORMATION........................... 49
APPENDIX I - GLOSSARY....................... APPI -1
RECENT FINANCIAL INFORMATION AND ANNUAL
REPORTS....................................... 50 EXHIBIT A--AMENDED AND RESTATED
DECLARATION OF TRUST AND
PERFORMANCE OF KENMAR GLOBAL TRUST.............. 50 TRUST AGREEMENT............................ TA-1
ANNEX--REQUEST FOR REDEMPTION
SELECTED FINANCIAL DATA.......................... 51
EXHIBIT B--SUBSCRIPTION REQUIREMENTS.......... SR-1

EXHIBIT C--SUBSCRIPTION INSTRUCTIONS,
SUBSCRIPTION AGREEMENT AND POWER
OF ATTORNEY............................... SA-(i)
</TABLE>

-3-
<PAGE>

SUMMARY

THE NATURE OF AN INVESTMENT IN THE TRUST IS COMPLEX AND MUST BE
CAREFULLY REVIEWED BY ANY PERSON CONSIDERING PURCHASING
UNITS. THE FOLLOWING SUMMARY IS QUALIFIED IN ITS
ENTIRETY BY THE INFORMATION SET FORTH ELSEWHERE
IN THIS PROSPECTUS.

--------------------

OVERVIEW

- - EXPERIENCED MANAGING OWNER AND ADVISORS. SEE "THE TRUST AND ITS
OBJECTIVES -- THE ADVISORS" AT PAGE 15 AND "KENMAR ADVISORY CORP." AT
PAGE 18.

- - ACCESS TO A WIDE RANGE OF DOMESTIC AND INTERNATIONAL MARKETS. SEE "THE
TRUST AND ITS OBJECTIVES -- ACCESS TO GLOBAL MARKETS" AT PAGE 14.

- - DIVERSIFICATION AMONG TRADING STRATEGIES. SEE "THE TRUST AND ITS
OBJECTIVES --INVESTMENT PHILOSOPHY" AT PAGE 13.

- - PERFORMANCE NOT DEPENDENT UPON ANY SINGLE NATION'S ECONOMY OR CURRENCY.
SEE "INVESTMENT FACTORS -- MARKET DIVERSIFICATION" AT PAGE 108.

- - THE POTENTIAL, IF SUCCESSFUL, TO PROVIDE A VALUABLE COMPONENT OF
DIVERSIFICATION TO TRADITIONAL PORTFOLIOS. SEE "INVESTMENT FACTORS
-- DIVERSIFICATION OF TRADITIONAL PORTFOLIOS" AT PAGE 104.

- - OFFERING THE ADVANTAGES OF (I) LIMITED LIABILITY WHILE PARTICIPATING IN
HIGHLY LEVERAGED TRADING, (II) MONTHLY REDEMPTION RIGHTS (BEGINNING AT
THE END OF THE SIXTH MONTH AFTER PURCHASE), AND (III) ADMINISTRATIVE
CONVENIENCE IN A FUND IMPLEMENTING COMPLEX TRADING STRATEGIES IN
DOMESTIC AND INTERNATIONAL MARKETS SEE "INVESTMENT FACTORS -- LIMITED
LIABILITY" AT PAGE 109 AND "REDEMPTIONS AND DISTRIBUTIONS" AT PAGE 35.

RISK FACTORS

AN INVESTMENT IN THE TRUST IS SPECULATIVE
AND INVOLVES A HIGH DEGREE OF RISK.

- - PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS; ALL OR
SUBSTANTIALLY ALL OF AN INVESTMENT COULD BE LOST. SEE "COMMODITY FUTURES
TRADING COMMISSION--RISK DISCLOSURE STATEMENT" AT PAGE 1 AND "RISK
FACTOR (1)--PAST PERFORMANCE NOT NECESSARILY INDICATIVE OF FUTURE
RESULTS; ALL OR SUBSTANTIALLY ALL OF AN INVESTMENT COULD BE LOST" AT
PAGE 8.

- - THE TRUST'S TRADING IS HIGHLY LEVERAGED AND TAKES PLACE IN VERY VOLATILE
MARKETS. SEE "THE TRUST AND ITS OBJECTIVES" AT PAGE 13 AND "RISK FACTOR
(2)--SPECULATIVE AND VOLATILE MARKETS; HIGHLY LEVERAGED TRADING" AT PAGE
8.

- - THE TRUST IS SUBJECT TO SUBSTANTIAL CHARGES AND WILL BE SUCCESSFUL ONLY
IF SIGNIFICANT PROFITS ARE ACHIEVED. ASSUMING THE INVESTOR REDEEMS IN
THE FIRST YEAR AND, THUS, IS ASSESSED A 3% REDEMPTION PENALTY, OVERALL
TRADING PROFITS OF APPROXIMATELY 14.4% OF THE TRUST'S AVERAGE BEGINNING
OF MONTH NET ASSETS MUST BE EARNED DURING THE FIRST YEAR OF TRADING IN
ORDER FOR THE NET ASSET VALUE PER UNIT NOT TO DECLINE SOLELY DUE TO
APPLICABLE EXPENSES. SEE "-- BREAKEVEN TABLE," AT PAGE 6, "CHARGES"
BEGINNING AT PAGE 22 AND "RISK FACTOR (3) -- SUBSTANTIAL CHARGES " at
PAGE 8.

- - CERTAIN GENERAL TYPES OF MARKET CONDITIONS-- IN PARTICULAR, TRENDLESS
PERIODS WITHOUT MAJOR PRICE MOVEMENTS -- SIGNIFICANTLY REDUCE THE
POTENTIAL FOR CERTAIN ADVISORS TO TRADE SUCCESSFULLY. SEE "RISK FACTOR
(4) -- IMPORTANCE OF MARKET CONDITIONS TO PROFITABILITY" AT PAGE 8.

-4-
<PAGE>

SUMMARY (Cont'd)

THE TRUST AND ITS OBJECTIVES

The Trust is a multi-advisor, multi-strategy managed
futures investment. The Trust trades under the management of multiple
Advisors selected from time to time by Kenmar. Kenmar has substantial
experience in managing multi-advisor portfolios, implementing both
quantitative and qualitative methods of individual advisor selection and
asset allocation, as well as overall portfolio design. The Advisors trade
entirely independently of each other, implementing proprietary strategies in
the markets of their choice. The Trust has access to global futures, forward
and options trading with the ability rapidly to deploy and redeploy its
capital across different sectors of the global economy.

In addition to selecting, and allocating and reallocating
Trust assets among, Advisors, Kenmar monitors and adjusts the overall
leverage at which the Trust trades; provided that the Trust's commitment to
the Advisors will not exceed 100% of total Trust equity. There are, and
recur, periods in the markets during which it is unlikely that any Advisor or
group of Advisors will achieve profitability. By having the ability to
deleverage the Trust's market commitment to below its actual equity during
such periods, Kenmar could help preserve capital while awaiting more
favorable market cycles.

Under the Trust's Declaration of Trust, Wilmington Trust
Company, the Trust's Trustee, has delegated to Kenmar the exclusive
management and control of all aspects of the business of the Trust. The
Trustee will have no duty or liability to supervise or monitor the
performance of Kenmar, nor will the Trustee have any liability for the acts
or omissions of Kenmar.

THERE CAN BE NO ASSURANCE THAT THE TRUST WILL ACHIEVE ITS
RATE OF RETURN OR DIVERSIFICATION OBJECTIVE OR AVOID SUBSTANTIAL LOSSES.

KENMAR ADVISORY CORP.

Kenmar, a Connecticut corporation originally formed in 1983
as a New York corporation, and its affiliates have been sponsoring and
managing single- and multi-advisor funds for over a decade. As of July 1,
1997, Kenmar and its affiliates were acting as trading manager for commodity
pools and accounts with total capital (excluding "notional" funds) of
approximately $458 million, of which approximately $94 million was invested
in commodity pools operated by Kenmar.

The principal office of the Trust is c/o Kenmar Advisory
Corp., Two American Lane, Greenwich, Connecticut 06831-8150. The telephone
number of the Trust and Kenmar is (203) 861-1000.

SEE "PERFORMANCE OF COMMODITY POOLS OPERATED BY KENMAR"
FOR THE PERFORMANCE OF OTHER COMMODITY POOLS
MANAGED BY KENMAR.

THE ADVISORS

The Advisors are all well-established in the managed
futures industry and have, in the past, demonstrated the ability to make
substantial profits in a wide range of different market conditions. These
Advisors, collectively, represent a range of technical, systematic,
fundamental and discretionary methodologies, with extensive experience
trading both proprietary and client capital. PAST PERFORMANCE IS NOT
NECESSARILY INDICATIVE OF FUTURE RESULTS. THE FACT THAT AN ADVISOR HAS TRADED
SUCCESSFULLY IN THE PAST DOES NOT MEAN THAT SUCH ADVISOR WILL DO SO IN THE
FUTURE.

As of JULY 1, 1997, the Advisors were collectively
managing approximately $2.0 billion in managed futures accounts in which
their clients (and in certain cases the Advisors themselves) had invested,
and approximately $1.5 billion in the trading programs being used for the
Trust.

SEE "THE ADVISORS" BELOW FOR CERTAIN PERFORMANCE
AND OTHER INFORMATION RELATING TO THE ADVISORS.

-5-
<PAGE>

SUMMARY (Cont'd)

TAX STATUS OF THE TRUST

In the opinion of counsel, the Trust is properly classified
as a partnership for federal income tax purposes. Unitholders will pay tax
each year on their allocable share of the Trust's taxable income, if any,
whether or not they receive any distributions from the Trust or redeem any
Units. Substantially all of the Trust's trading gains and losses will be
treated as capital gains or losses for tax purposes; interest income received
by the Trust will be treated as ordinary income. See "Federal Income Tax
Consequences " at page 40.

"BREAKEVEN TABLE"

The "Breakeven Table" below indicates the approximate
percentage and dollar returns required for the redemption value of an initial
$5,000 investment in the Units to equal the amount originally invested twelve
months after issuance (assuming the Units are redeemed during months 7-12
and, therefore, are subject to a 3% redemption charge).

THE "BREAKEVEN TABLE," AS PRESENTED, IS NOT AFFECTED BY THE
SIZE OF THE TRUST. THE TRUST'S CAPITALIZATION DOES NOT DIRECTLY AFFECT THE
LEVEL OF ITS CHARGES AS A PERCENTAGE OF NET ASSET VALUE, AS THE TRUST HAS NO
FIXED DOLLAR AMOUNT, AS OPPOSED TO (I) PERCENTAGE OF ASSETS, (II) PERCENTAGE
OF PROFITS OR (III) PER-TRADE COSTS (EACH OF WHICH WILL, OR SHOULD, EQUAL
APPROXIMATELY THE SAME PERCENTAGE OF THE TRUST'S EQUITY, WHATEVER ITS SIZE),
OTHER THAN ADMINISTRATIVE EXPENSES (WHICH ARE ASSUMED IN THE "BREAKEVEN
TABLE" TO EQUAL THE MAXIMUM ESTIMATED PERCENTAGE OF THE TRUST'S AVERAGE
BEGINNING OF MONTH NET ASSETS). IN ORDER FOR COLUMN II IN THE "BREAKEVEN
TABLE" TO PRESENT ABSOLUTE DOLLAR AMOUNT "BREAKEVEN" FIGURES, IT HAS BEEN
ASSUMED THAT THE AVERAGE BEGINNING OF MONTH NET ASSETS ATTRIBUTABLE TO AN
INITIAL INVESTMENT DURING THE TWELVE-MONTH "BREAKEVEN" PERIOD EQUALS THE
AMOUNT OF SUCH INITIAL INVESTMENT. THIS IS, IN FACT, UNLIKELY TO BE THE CASE.

"BREAKEVEN TABLE"
- -------------------------------------------------------------------------------
PERCENTAGE DOLLAR RETURN
RETURN REQUIRED
REQUIRED ($5,000 INITIAL
EXPENSES (1) FIRST TWELVE INVESTMENT)
WHICH MUST BE OFFSET MONTHS FIRST TWELVE
TO "BREAK EVEN" OF INVESTMENT MONTHS OF INVESTMENT
- -------------------------------------------------------------------------------
Brokerage Commissions (2) 11.00% $550.00
- -------------------------------------------------------------------------------
Administrative Expenses (3) 0.50% $25.00
- -------------------------------------------------------------------------------
Miscellaneous Execution Costs (4) 0.25% $12.50
- -------------------------------------------------------------------------------
Advisors' Profit Shares (5) 2.00% $100.00
- -------------------------------------------------------------------------------
Kenmar Incentive Fee (6) 0.15% $7.50
- -------------------------------------------------------------------------------
Organizational and
Initial Offering Cost 2.40% $120.00
Reimbursement (7)
- -------------------------------------------------------------------------------
Redemption Charge (8) 3.10% $155.00
- -------------------------------------------------------------------------------
Interest Income (9) (5.00)% $(250.00)
- -------------------------------------------------------------------------------
RETURN ON $5,000
INITIAL INVESTMENT
REQUIRED FOR "BREAK EVEN" 14.40% $720.00
- -------------------------------------------------------------------------------

-6-
<PAGE>

SUMMARY (cont'd)

NOTES TO "BREAKEVEN TABLE"

(1) See "Charges" at page 22 for an explanation of the expenses
included in the "Breakeven Table."

(2) Paid to Kenmar each month. Kenmar pays all floor brokerage, exchange,
clearing and NFA fees, selling compensation, trailing commissions and
Consulting Fees from this amount.

(3) Administrative expenses are paid as incurred, but for this "Breakeven
Table" such expenses are assumed to be the maximum ESTIMATED amount.

(4) Estimated; paid on a per-transaction basis. "Bid-ask" spreads are
not included due to the difficulty of determining such spreads,
which may constitute a significant cost to the Trust.

(5) Profit Shares are calculated quarterly on the basis of each Advisor's
individual performance, not the overall performance of the Trust.
Consequently, it is not possible to determine the amount of Profit
Shares, if any, that would be payable in a "breakeven" year. Kenmar
believes that 2.00% of average beginning of month Net Assets is a
reasonable estimate for such Profit Shares, but the actual Profit
Shares paid in a "breakeven" year could substantially exceed such
estimate.

(6) No Incentive Fee might, in fact, be due despite the approximately 3.1%
Net Asset Value gain necessary to offset the redemption charge of $155
(based on an initial $5,000 investment). See "Charges -- Profit Shares
and Incentive Fees" at page 24. However, for purposes of the
"Breakeven Table," the Incentive Fee has been estimated at 5% of such
3.1% gain.

(7) Reimbursed to Kenmar at the rate of 0.2% of beginning of month Net
Assets each month.

(8) Redemption charges for purposes of this "breakeven" analysis equal
3.1% of the initial $5,000 investment because these charges would
equal 3% of the $5,155 Net Asset Value required so that after
subtraction of the 3% redemption charge, the investor would receive
net redemption proceeds of $5,000.

(9) Interest income is estimated based on current rates.

SUITABILITY

THE TRUST TRADES AT A HIGH DEGREE OF LEVERAGE IN HIGHLY VOLATILE
MARKETS. AN INVESTMENT IN THE UNITS IS SPECULATIVE AND INVOLVES A HIGH
DEGREE OF RISK. THERE CAN BE NO ASSURANCE THAT THE TRUST WILL ACHIEVE ITS
OBJECTIVES.

NO SUBSCRIBER MAY INVEST MORE THAN 10% OF HIS OR HER READILY
MARKETABLE ASSETS IN THE TRUST. SUBSCRIBERS MUST BE PREPARED TO LOSE ALL OR
SUBSTANTIALLY ALL OF THEIR INVESTMENT.

SEE PAGES I AND II OF THIS PROSPECTUS FOR A LISTING OF THE SPECIFIC
SUITABILITY REQUIREMENTS APPLICABLE TO AN INVESTMENT IN THE UNITS.

THE UNITS ARE SPECULATIVE AND INVOLVE
A HIGH DEGREE OF RISK.

THIS POOL HAS ONLY RECENTLY COMMENCED TRADING
AND HAS A PERFORMANCE HISTORY OF LIMITED DURATION.

-7-
<PAGE>

RISK FACTORS

(1) PAST PERFORMANCE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS; ALL OR
SUBSTANTIALLY ALL OF AN INVESTMENT COULD BE LOST

There can be no assurance as to how the Trust will perform.
Investors should not invest in the Trust in reliance on the Advisors'
performance to date, and must carefully consider whether a speculative
investment such as the Trust is consistent with their portfolio objectives
and risk tolerance levels.

All Advisor selections are made with the benefit of
hindsight and, consequently, include only managed futures advisors that have
performed well to date (in hypothetical combination as well as on a
"stand-alone" basis). Prospective investors should not place any substantial
degree of reliance on the Advisors' performance summaries included herein. It
should not be assumed that trading decisions made by the Advisors in the
future will be profitable or will result in performance for the Trust
comparable to such Advisors' past performance to date.

There can be no assurance that the multi-advisor strategy
of the Trust will achieve its risk control objectives.

INVESTORS MUST BE PREPARED TO LOSE ALL OR SUBSTANTIALLY ALL
OF THEIR INVESTMENT IN THE TRUST.

(2) SPECULATIVE AND VOLATILE MARKETS; HIGHLY LEVERAGED TRADING

The markets in which the Trust will trade are speculative,
highly leveraged and involve a high degree of risk. Each Advisor's trading
considered individually involves a significant risk of incurring large
losses, and there can be no assurance that the Trust as a whole will not
incur such losses.

Futures and forward prices are volatile. Volatility
increases risk, particularly when trading with leverage. Trading on a highly
leveraged basis, as DOES the Trust, even in stable markets involves risk;
doing so in volatile markets necessarily involves a substantial risk of
sudden, significant losses. MARKET VOLATILITY AND LEVERAGE MEAN THAT THE
TRUST COULD INCUR SUBSTANTIAL LOSSES, POTENTIALLY IMPAIRING ITS EQUITY BASE
AND ABILITY TO ACHIEVE ITS LONG-TERM PROFIT OBJECTIVES EVEN IF FAVORABLE
MARKET CONDITIONS SUBSEQUENTLY DEVELOP.

(3) SUBSTANTIAL CHARGES

The Trust is subject to substantial charges payable
irrespective of profitability as well as Advisors' Profit Shares, payable
based on each individual Advisor's profitability, not the overall
profitability of the Trust, and KENMAR'S Incentive Fees. Assuming that an
investor redeems within one (1) year after his purchase and thus subjects
himself to a 3% redemption charge, THE TRUST MUST EARN TRADING PROFITS EQUAL
TO APPROXIMATELY 14.4% PER ANNUM OF ITS AVERAGE BEGINNING OF MONTH NET ASSETS
MERELY FOR HIM TO "BREAK EVEN."

(4) IMPORTANCE OF MARKET CONDITIONS TO PROFITABILITY

Although the initial Advisors appear to be as likely to
trade profitably in declining as in rising markets, there also seems to be a
tendency for managed futures advisors, in general, to be profitable or
unprofitable at approximately the same times regardless of the trading
strategies employed. Overall market or economic conditions -- over which
neither Kenmar nor the Advisors can have any control --will have a material
effect on performance. MARKET CONDITIONS MAY BE SUFFICIENTLY ADVERSE AND MAY
MAKE PROFITABILITY HIGHLY UNLIKELY FOR SUSTAINED PERIODS OF TIME.

(5) TECHNICAL, TREND-FOLLOWING TRADING SYSTEMS REQUIRE SUSTAINED PRICE MOVES
IN ORDER TO TRADE PROFITABLY

The profitability of trading systems involving technical
trend analysis depends upon the occurrence of significant sustained price
moves in at least some of the markets traded. See "The Advisors -- Futures
Trading Methods in General" for a description of this trading method. In the
past there have been sustained periods without such price moves occurring in
the markets represented in the programs to be traded by the Advisors for the
Trust, and such periods are

-8-
<PAGE>

expected to recur because it is only when a variety of usually disparate
market forces influence prices in the same direction that significant trends
can occur. Periods without such price moves are likely to produce losses.

(6) DISCRETIONARY TRADING STRATEGIES MAY INCUR SUBSTANTIAL LOSSES

Traders that implement discretionary trading strategies may
be more prone to subjective judgments having potentially adverse effects on
their performance than are systematic traders, which emphasize eliminating
the effects of "emotionalism" on their trading. See "The Advisors -- Futures
Trading Methods in General" for a description of this trading method.
Reliance on trading judgment may, over time, produce less consistent trading
results than implementing a systematic approach. Discretionary traders, like
trend-following traders, are unlikely to be profitable unless major price
movements occur. DISCRETIONARY TRADERS ARE HIGHLY UNPREDICTABLE, AND CAN
INCUR SUBSTANTIAL LOSSES EVEN IN APPARENTLY FAVORABLE MARKETS.

(7) DECISIONS BASED UPON FUNDAMENTAL ANALYSIS MAY NOT RESULT IN PROFITABLE
TRADING

Traders that utilize fundamental trading strategies attempt
to examine factors external to the trading market that affect the supply and
demand for a particular futures contract in order to predict future prices.
See "The Advisors -- Futures Trading Methods in General" for a description of
this trading method. Such analysis may not result in profitable trading
because the analyst may not have knowledge of all factors affecting supply
and demand, prices may often be affected by unrelated factors, and purely
fundamental analysis may not enable the trader to determine quickly that his
previous trading decisions were incorrect. In addition, because of the
breadth of fundamental data that exists, a fundamental trader may not be able
to follow developments in all such data, but instead may specialize in
analyzing a narrow set of data, requiring trading in fewer futures markets.
Consequently, a fundamental trader may have less flexibility in adverse
markets to trade other futures markets than traders that do not limit the
number of markets traded as a result of a specialized focus.

(8) INCREASING THE ASSETS MANAGED BY THE ADVISORS MAY DIMINISH THEIR RETURNS

There appears to be a tendency for the rates of return
achieved by managed futures advisors to diminish as assets under management
increase. Increased equity under management requires advisors to enter larger
orders, which can preclude trading in certain less liquid markets, result in
worse trading "fills" and make it difficult to close out positions without
incurring significant additional losses. IF THE ADVISORS' RETURNS DECLINE ,
THE PROFIT POTENTIAL OF THE TRUST WILL BE CORRESPONDINGLY REDUCED.

(9) NO ASSURANCE OF ADVISORS' CONTINUED SERVICES

There is no assurance that any Advisor will be willing or
able to continue to provide advisory services to the Trust for any length of
time. There is severe competition for the services of qualified Advisors,
and the Trust may not be able to retain satisfactory replacement or
additional Advisors on acceptable terms. Kenmar must allocate Advisor
availability among its different funds, including the Trust, and may,
accordingly, allocate to the Trust less (and perhaps none) of an Advisor's
available capacity than Kenmar might otherwise consider to be in the best
interests of the Trust. The timing of Kenmar's Advisor selections and the
amount of assets allocated to an Advisor may also be affected from time to
time by the procedural requirements of maintaining an ongoing offering of the
Units. See "Conflicts of Interest" at page 32. KENMAR MAY NOT BE ABLE TO
OBTAIN THE SERVICES OF THE ADVISOR GROUP THAT KENMAR WOULD OTHERWISE CONSIDER
TO BE MOST ADVANTAGEOUS FOR THE TRUST.

(10) LIMITED ABILITY TO LIQUIDATE AN INVESTMENT IN THE UNITS

Units may be redeemed only as of the close of business on
the last day of a calendar month and only beginning on or after the end of
the sixth month after sale. Through the end of the twelfth and eighteenth
full months after their sale, Units will be subject to redemption charges,
payable to Kenmar, equal to 3% and 2%, respectively, of the Net Asset Value
per Unit as of the date of redemption. Requests for redemption must be
received at least 10 calendar days before the proposed date of redemption.
THE LIMITED ABILITY TO REDEEM UNITS MEANS THAT INVESTORS CANNOT BE CONFIDENT
OF THE REDEMPTION VALUE OF THEIR UNITS, AND MAY BE UNABLE TO WITHDRAW CAPITAL
COMMITTED TO THE TRUST ON A TIMELY BASIS TO TAKE ADVANTAGE OF OTHER, MORE
FAVORABLE, INVESTMENT OPPORTUNITIES.

-9-
<PAGE>

(11) POSSIBLY ILLIQUID MARKETS

The markets traded by the Advisors on behalf of the Trust
may become Illiquid. Illiquidity could prevent the Advisors from acquiring
positions otherwise indicated by one of the trading systems or make it
impossible for the Trust to liquidate positions against which the market is
moving. The Advisors will, from time to time, trade in illiquid markets.
ILLIQUIDITY COULD CAUSE THE TRUST TO INCUR SIGNIFICANT LOSSES.

(12) "ZERO-SUM" TRADING; THE TRUST DOES NOT ACQUIRE ANY ASSET WITH INTRINSIC
VALUE

Futures trading is a "zero-sum," risk transfer economic
activity. For every gain there is an equal and offsetting loss rather than
an opportunity to participate over time in general economic growth. UNLIKE
MOST "ALTERNATIVE INVESTMENTS," AN INVESTMENT IN THE TRUST DOES NOT INVOLVE
ACQUIRING ANY ASSET WITH INTRINSIC VALUE. OVERALL STOCK AND BOND PRICES
COULD RISE SIGNIFICANTLY AND THE ECONOMY AS A WHOLE PROSPER WHILE THE TRUST
TRADES UNPROFITABLY.

(13) NON-CORRELATED, NOT NEGATIVELY CORRELATED, PERFORMANCE OBJECTIVE

Historically, the performance of managed futures
investments has been generally NON-CORRELATED, I.E., unrelated, not opposite,
to the performance of the traditional financial markets. It is by no means
the case, however, that a managed futures investment such as the Trust can be
expected to be profitable during unfavorable periods for the stock market or
vice versa. Furthermore, the futures markets are fundamentally different from
the securities markets in a number of respects, and any comparison between
them is subject to certain inherent and material limitations. IF THE TRUST
DOES NOT PERFORM IN A MANNER NON-CORRELATED WITH THE GENERAL FINANCIAL
MARKETS OR DOES NOT PERFORM SUCCESSFULLY, INVESTORS WILL OBTAIN NO
DIVERSIFICATION BENEFITS BY INVESTING IN THE UNITS.

(14) BROAD INDICES MAY PERFORM QUITE DIFFERENTLY FROM INDIVIDUAL INVESTMENTS

In the discussion under "Investment Factors," the concepts
of overall portfolio diversification and non-correlation of asset classes are
discussed and illustrated by the use of a generally accepted index that
represents each asset category. Stocks are represented by the S&P 500 Index
AND EAFE INDEX, bonds by the Lehman Long-Term Government Bond Index, and
futures funds by the MAR Fund/Pool Qualified Universe Index. Because each
index is a dollar-weighted average of the returns of multiple underlying
investments, the overall index return may be quite different from the return
of any individual investment. For example, the "MAR Fund/Pool Qualified
Universe" is a dollar-weighted index of 420 managed futures funds.
Accordingly, such index reflects the volatility and risk of loss
characteristics of a very broadly diversified universe of advisors and not of
a single fund or advisor. Therefore, the Trust's performance will be
different than that of the MAR Fund/Pool Qualified Universe.

(15) DISTORTION IN PROFIT SHARE AND INCENTIVE FEE CALCULATIONS

The Advisors' Profit Shares and Kenmar's Incentive Fee are
calculated on the basis of New Trading Profit (as defined) and New Overall
Appreciation (as defined), determined respectively on the basis of the
performance of each Advisor's Trust account and of the Trust as a whole.
Because Units are purchased at different times, but Profit Shares and
Incentive Fees are assessed equally to all Units, disparities between a
particular Unitholder's investment experience in the Trust and the Profit
Shares and Incentive Fees to which such Unitholder's Units will be subject
will develop as a result of the Profit Shares and Incentive Fees being paid
by the Trust account managed by each Advisor and by the Trust, respectively.
See "Charges" at page 22. Certain investors' Units could be subject to Profit
Shares and Incentive Fees despite having declined in Net Asset Value from
their purchase price. THE TRUST'S ALLOCATIONS OF PROFIT SHARES AND INCENTIVE
FEES ARE SUBJECT TO DISTORTIONS AS A RESULT OF THE TIMING OF SUBSCRIPTIONS
AND REDEMPTIONS. SEE "CHARGES - PROFIT SHARES AND INCENTIVE FEES."

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<PAGE>

(16) ADVISORS TRADING INDEPENDENTLY OF EACH OTHER MAY REDUCE RISK CONTROL
POTENTIAL

The Advisors trade entirely independently of each other.
Consequently, the Advisors may implement their strategies for their Trust
accounts in ways that could significantly reduce the risk control potential
that Kenmar had analyzed to be an important feature of a particular Advisor
combination. Two Advisors may, from time to time, take opposite positions for
the Trust, eliminating any possibility of the Trust profiting from these
positions considered as a whole. THERE ARE SUBSTANTIAL OPPORTUNITY COSTS TO
KENMAR'S MULTI-ADVISOR STRATEGY. FURTHERMORE, THE TRUST'S MULTI-ADVISOR
STRUCTURE WILL NOT NECESSARILY CONTROL THE RISK OF SPECULATIVE FUTURES
TRADING. MULTI-ADVISOR FUNDS HAVE IN THE PAST LOST 5% OR MORE OF THEIR EQUITY
IN A SINGLE DAY.

(17) TRADING ON COMMODITY EXCHANGES OUTSIDE THE UNITED STATES MAY PRESENT
CERTAIN ADDITIONAL RISKS

The Advisors may engage in a significant amount of trading
on commodity exchanges outside the United States on behalf of the Trust.
Trading on such exchanges is not regulated by any United States governmental
agency and may involve certain risks not applicable to trading on United
States exchanges. In trading contracts denominated in currencies other than
U.S. dollars, the Trust will be subject to the risk of adverse exchange-rate
movements between the dollar and the functional currencies of such contracts.
See the last paragraph of the "Commodity Futures Trading Commission -- Risk
Disclosure Statement" on page 1 of this Prospectus. INVESTORS COULD INCUR
SUBSTANTIAL LOSSES FROM THE TRUST'S TRADING ON FOREIGN EXCHANGES TO WHICH
THEY WOULD NOT HAVE BEEN SUBJECT HAD THE ADVISORS LIMITED THEIR TRADING TO
U.S. MARKETS.

(18) CONFLICTS OF INTEREST

The Trust is subject to a number of material actual and
potential conflicts of interest. See "Conflicts of Interest" at page 32. No
formal policies or procedures have been adopted to resolve any of such
conflicts. Prospective investors should be aware that Kenmar presently
intends to assert that Unitholders have, by subscribing to the Trust,
consented to the conflicts of interest described commencing at page 32 in the
event of any proceeding alleging that Kenmar violated its duties to
investors. THE CONFLICTS OF INTEREST TO WHICH THE TRUST IS SUBJECT RAISE THE
POSSIBILITY THAT INVESTORS WILL BE FINANCIALLY DISFAVORED TO THE BENEFIT OF
KENMAR, THE ADVISORS OR THEIR RESPECTIVE PRINCIPALS AND AFFILIATES.

The fact that Kenmar will receive an annual Incentive Fee
equal to 5% of any New Overall Appreciation (as defined) may lead Kenmar to
select Advisors that trade in a more "risky" or speculative manner than those
that Kenmar might otherwise choose. Kenmar receives 5%, as an incentive fee,
of any New Overall Appreciation of the Trust, but not 5% of its losses.

(19) UNITHOLDERS TAXED CURRENTLY

Unitholders are subject to tax each year on their allocable
share of the Trust's income or gains (if any), despite the fact that Kenmar
does not intend to make any distributions to Unitholders. Consequently,
Unitholders will be required either to redeem Units or to make use of other
sources of funds to discharge their tax liabilities in respect of any profits
earned by the Trust. See "Federal Income Tax Consequences" at page 40.

In comparing the Trust's profit objectives with the
performance of more familiar securities in which one might invest,
prospective investors must recognize that if they purchased equity or debt,
there probably would be no tax due on the appreciation in the value of such
holdings until disposition. In the case of the Trust, on the other hand, a
significant portion of any appreciation in the Net Asset Value per Unit must
be paid in taxes by the Unitholders every year, resulting in a substantial
cumulative reduction in their net after-tax returns. BECAUSE UNITHOLDERS WILL
BE TAXED CURRENTLY ON THEIR ALLOCABLE SHARE OF THE TRUST'S INCOME OR GAINS,
THE TRUST MAY TRADE SUCCESSFULLY BUT INVESTORS NEVERTHELESS WOULD HAVE
RECOGNIZED SIGNIFICANTLY GREATER GAINS ON AN AFTER-TAX BASIS HAD THEY
INVESTED IN CONVENTIONAL STOCKS WITH COMPARABLE PERFORMANCE.

THE PERFORMANCE INFORMATION INCLUDED IN THIS PROSPECTUS IS
PRESENTED EXCLUSIVELY ON A PRE-TAX BASIS.

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<PAGE>

(20) LIMITATION ON DEDUCTIBILITY OF "INVESTMENT ADVISORY FEES"

Non-corporate Unitholders may be required to treat the
amount of any Profit Shares, Incentive Fees, brokerage commissions and other
expenses of the Trust as "investment advisory fees" which may be subject to
substantial restrictions on deductibility for federal income tax purposes. In
the absence of further regulatory or statutory clarification, Kenmar is not
classifying these expenses as "investment advisory fees," but this is a
position to which the Internal Revenue Service may object. IF A SUBSTANTIAL
PORTION OF THE TRUST'S FEES WERE CHARACTERIZED AS "INVESTMENT ADVISORY FEES,"
AN INVESTMENT IN THE TRUST COULD NO LONGER BE ECONOMICALLY VIABLE.

(21) TAXATION OF INTEREST INCOME IRRESPECTIVE OF TRADING LOSSES

The Net Asset Value per Unit reflects the trading profits
and losses as well as the interest income earned and expenses incurred by the
Trust. However, losses on the Trust's trading will be almost exclusively
capital losses, and capital losses are deductible against ordinary income
only to the extent of $3,000 per year in the case of non-corporate taxpayers.
Consequently, if a non-corporate Unitholder had, for example, an allocable
trading (I.E., capital) loss of $10,000 in a given fiscal year and allocable
interest income (after reduction for expenses) of $5,000, the Unitholder
would have incurred a net loss in the Net Asset Value of his or her Units
equal to $5,000 but would recognize taxable income of $2,000. THE LIMITED
DEDUCTIBILITY OF CAPITAL LOSSES FOR NON- CORPORATE UNITHOLDERS COULD RESULT
IN SUCH UNITHOLDERS HAVING A TAX LIABILITY IN RESPECT OF THEIR INVESTMENT IN
THE TRUST DESPITE INCURRING A FINANCIAL LOSS ON THEIR UNITS.

(22) POSSIBILITY OF A TAX AUDIT OF BOTH THE TRUST AND UNITHOLDERS

There can be no assurance that the Trust's tax returns will
not be audited by the Internal Revenue Service. If such an audit results in
an adjustment, Unitholders could themselves be audited as well as being
required to pay additional taxes, interest and possibly penalties.

PROSPECTIVE INVESTORS ARE STRONGLY URGED TO CONSULT THEIR
OWN TAX ADVISERS AND COUNSEL WITH RESPECT TO THE POSSIBLE TAX CONSEQUENCES TO
THEM OF AN INVESTMENT IN THE TRUST; SUCH TAX CONSEQUENCES MAY DIFFER IN
RESPECT OF DIFFERENT INVESTORS. SEE "FEDERAL INCOME TAX CONSEQUENCES" AT PAGE
40.

(23) FAILURE OF BROKERAGE FIRMS; DEFAULT BY FORWARD MARKET PARTICIPANTS

The Trust could be unable to recover its assets -- even
assets directly traceable to the Trust -- from a Clearing Broker (as defined)
in the event of the bankruptcy of such Clearing Broker. In its forward
trading, the Trust will be dealing with its Clearing Brokers as principals
(the Clearing Brokers, in turn, will trade with other counterparties to
execute the Trust's forward trades) and will be subject to the full risk of
such Clearing Brokers' default or insolvency. INVESTORS COULD INCUR
SUBSTANTIAL LOSSES, DESPITE THE TRUST HAVING BEEN OTHERWISE HIGHLY
PROFITABLE, IN THE EVENT OF THE BANKRUPTCY OR DEFAULT OF A CLEARING BROKER.

(24) REGULATORY MATTERS MAY ALTER THE NATURE OF AN INVESTMENT IN THE TRUST

Due to the publicly-offered character of the Trust, Kenmar
will be more restricted in its ability to allocate assets to certain
prospective Advisors than it would be in the context of a private fund. Other
than the Trust, Kenmar has operated only privately-offered pools and has
generally allocated and reallocated the assets of such pools aggressively. IT
IS NOT ANTICIPATED THAT KENMAR WILL MAKE FREQUENT ADJUSTMENTS TO THE GROUP OF
ADVISORS FOR THE TRUST.

Considerable regulatory attention has been focused on
"non-traditional" investment pools, in particular commodity pools such as the
Trust, publicly distributed in the United States. There has been significant
international governmental concern expressed regarding, for example, (i) the
disruptive effects of speculative trading on the central banks' attempts to
influence exchange rates and (ii) the need to regulate the derivatives
markets in general. THERE IS A POSSIBILITY OF FUTURE REGULATORY CHANGES
ALTERING, PERHAPS TO A MATERIAL EXTENT, THE NATURE OF AN INVESTMENT IN THE
TRUST.

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<PAGE>

THE TRUST AND ITS OBJECTIVES OBJECTIVES

- - SIGNIFICANT PROFITS OVER TIME

- - CONTROLLED PERFORMANCE

- - VOLATILITY

- - CONTROLLED RISK OF LOSS

- - A MEANS OF DIVERSIFYING A TRADITIONAL PORTFOLIO OUT OF ITS TYPICAL
"ALL LONG" EQUITY AND DEBT BIAS AND DEPENDENCE ON A SINGLE NATION'S
ECONOMY

The Trust's potential for aggressive capital growth arises
from the profit possibilities offered by the global futures, forward and
options markets and the skills of the professional trading organizations
selected to manage the assets of the Trust. The fact that the Trust can
profit from both rising and falling markets adds an element of profit
potential that long-only strategies cannot access. In addition to its profit
potential, the Trust, if it trades successfully, could also help reduce the
overall volatility, or risk, of a portfolio. By investing in markets that
operate independently from United States stock and bond markets, the Trust
may provide positive returns even when United States stock and bond markets
are experiencing flat to negative performances.

THE TRUST IS STRUCTURED SO AS SUBSTANTIALLY TO ELIMINATE
THE ADMINISTRATIVE BURDEN THAT WOULD OTHERWISE BE INVOLVED IN UNITHOLDERS
ENGAGING DIRECTLY IN FUTURES TRANSACTIONS. UNITHOLDERS, AMONG OTHER THINGS,
WILL RECEIVE DIRECTLY FROM KENMAR MONTHLY UNAUDITED FINANCIAL REPORTS AND
ANNUAL AUDITED FINANCIAL STATEMENTS (SETTING FORTH, IN ADDITION TO CERTAIN
OTHER INFORMATION, THE NET ASSET VALUE PER UNIT, THE TRUST'S TRADING PROFITS
OR LOSSES AND THE TRUST'S EXPENSES FOR THE PERIOD) AS WELL AS ALL TAX
INFORMATION RELATING TO THE TRUST NECESSARY FOR UNITHOLDERS TO COMPLETE THEIR
FEDERAL INCOME TAX RETURNS. THE APPROXIMATE NET ASSET VALUE PER UNIT WILL BE
AVAILABLE FROM KENMAR UPON REQUEST.

INVESTMENT PHILOSOPHY

The Trust is managed by Kenmar Advisory Corp. Kenmar: (i)
selects the Fund's Clearing Brokers and Selling Agents and selects and
monitors the Advisors; (ii) allocates and/or reallocates Trust assets among
the Advisors; (iii) determines if an Advisor should be removed or replaced;
(iv) negotiates advisory fees; and (v) performs such other services as Kenmar
believes that the Trust may from time to time require.

Kenmar believes that the most effective means of
controlling the risks of the Trust's futures, forward and options trading is
through a diversified portfolio of Advisors. An important part of this
strategy focuses on controlling risk by combining Advisors who employ diverse
trading methodologies -- such as technical, fundamental, systematic,
trend-following, discretionary or mathematical -- and who exhibit diverse
performance characteristics. The objective of this strategy is to construct a
portfolio of Advisors whose combined performance best meets the investment
aim of the Trust to achieve superior returns within appropriately defined
parameters of risk.

The process of selecting Advisors is an ongoing one--Kenmar
continuously analyzes qualitatively and quantitatively the performance and
trading characteristics of the current and prospective Advisors in an effort
to determine which Advisors are best suited to the current market
environment. Based upon such continuing analysis, Kenmar will reallocate
assets among the Advisors or change the portfolio of Advisors when Kenmar's
perception of the trading environment or an Advisor's individual performance
indicates to Kenmar that such change or changes are appropriate.

Kenmar's ability to manage successfully the risks of
futures and related investments is dependent upon a willingness to act
decisively and a management style that identifies shifting market trends.
Therefore, when KENMAR'S perception of market conditions and/or individual
Advisor performance suggests that an alternative trading style or methodology
might be better suited to Kenmar's perception of the current market
environment, Kenmar may alter the portfolio of Advisors or the allocation of
assets among the Advisors without prior notice to, or the approval of, the

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<PAGE>

Unitholders. See "Risk Factor (24) -- Regulatory Matters May Alter the Nature
of an Investment in the Trust" at page 12. IT IS NOT ANTICIPATED THAT KENMAR
WILL MAKE FREQUENT ADJUSTMENTS TO THE GROUP OF ADVISORS FOR THE TRUST.

PROSPECTIVE INVESTORS MUST RECOGNIZE THAT ADVISOR
SELECTIONS AND ALLOCATIONS REQUIRE THE EXERCISE OF JUDGMENT AND DISCRETION
AND ARE NOT DETERMINED IN ANY PRECISE OR SYSTEMATIC MANNER. THERE CAN BE NO
ASSURANCE THAT KENMAR'S SELECTION AND MONITORING OF A LIMITED GROUP OF
ADVISORS FOR THE TRUST WILL, IN THE FUTURE, PRODUCE MORE SUCCESSFUL RESULTS
(IN TERMS OF EITHER RISK CONTROL OR PROFITABILITY) THAN WOULD THE SELECTION
OF A SINGLE ADVISOR, A FIXED COMBINATION OF ADVISORS OR A SMALLER OR LARGER
GROUP OF ADVISORS.

ACCESS TO GLOBAL MARKETS

The range of markets that the Trust will trade will provide
a significant degree of diversification to a traditional stock/bond
portfolio. Through Kenmar's Advisor selections, the Trust will have the
flexibility to access, and allocate and reallocate capital among, world
markets, including but not limited to:

CURRENCIES
- --------------------------------------------------------------------------------

Australian Dollar European Currency Unit Mexican Peso
Belgian Franc Finnish Markka New Zealand Dollar
British Pound French Franc Norwegian Krone
Canadian Dollar Irish Punt Singapore Dollar
Danish Krone Italian Lira Spanish Peseta
Deutsche Mark Japanese Yen Swedish Krona
Dutch Guilder Malaysian Ringgit Swiss Franc

FINANCIAL INSTRUMENTS
- --------------------------------------------------------------------------------

Australian Treasury Bills Major Market Stock Index (U.S.)
Australian Treasury Bonds MEFF&S Stock Index (Spain)
CAC 40 Stock Index (France) MIBOR
Canadian Bonds Nikkei Stock Average (Japan)
DAX Stock Index (Germany) Nikkei Stock Index 300 (Japan)
Eurodollars PIBOR S&P 500 Stock Index (U.S.)
Euromarks Spanish Bonds
Euroswiss Tokyo Stock Price Index (Japan)
Eurotop 100 Index (Europe) U.K. Bonds
Euroyen U.K. Short Sterling
Financial Times 100 Stock Index (U.K.) U.S. Treasury Bills
Financial Times 250 Stock Index (U.K.) U.S. Treasury Bonds
French Bonds U.S. Treasury Notes
German Bonds Value Line Stock Index (U.S.)
Italian Bonds
Japanese Bonds

METALS
- -------------------------------------------------------------------------------

Aluminum Lead Platinum Tin
Copper Nickel Silver Zinc
Gold Palladium

ENERGY PRODUCTS
- --------------------------------------------------------------------------------

Crude Oil Heavy Fuel Oil No. 2 Heating Oil Residual Fuel Oil
Electricity Natural Gas Propane Unleaded Gasoline
Gas Oil

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<PAGE>

AGRICULTURAL PRODUCTS
- --------------------------------------------------------------------------------

Cocoa Feeder Cattle Orange Juice Soy Oil
Coffee Live Cattle Pork Bellies Sugar
Corn Live Hogs Soybeans Wheat
Cotton Oats Soymeal

THE TRUST WILL TRADE IN MANY, BUT NOT ALL, OF THE FOREGOING MARKETS AS WELL AS
ADDITIONAL MARKETS. THERE CAN BE NO ASSURANCE AS TO WHICH MARKETS
THE TRUST WILL, IN FACT, TRADE OVER TIME OR T ANY GIVEN
TIME. THE ADVISORS DO NOT EACH TRADE IN ALL OF THE
FOREGOING MARKETS. THE TRUS'S PORTFOLIO EXPOSURE
MAY, FROM TIME TO TIME, BE CONCENTRATED IN A
LIMITED NUMBER OF MARKETS.

THE ADVISORS

All direct investment decisions for the Trust will be made by
commodity trading advisors selected and monitored by Kenmar. See "Risk Factor
(23) -- Regulatory Matters May Alter the Nature of an Investment in the Trust"
at page 12. Each initial Advisor is, and it is anticipated that any subsequent
Advisor, if any, will be, registered with and regulated by the Commodity Futures
Trading Commission (the "CFTC"). THE REGISTRATION OF THE ADVISORS WITH THE CFTC
AND THEIR MEMBERSHIP IN THE NFA MUST NOT BE TAKEN AS AN INDICATION THAT ANY SUCH
AGENCY OR SELF-REGULATORY BODY HAS RECOMMENDED OR APPROVED THE ADVISORS OR THE
TRUST.

Subject to the restrictions inherent in or imposed on publicly-offered
managed futures funds, Kenmar anticipates varying Advisors from time to time
and, with them, the Trust's market emphasis as Kenmar believes performance and
market conditions indicate that such a change could be advantageous for the
Trust. However, Kenmar also believes that it is necessary to maintain an
account with an Advisor for some length of time (at least unless aberrational
trading patterns or apparent deviations from announced strategy or risk control
policies develop) to give such Advisor a reasonable opportunity to achieve its
objectives. The following are the Advisors and asset allocations for the Trust
(WHICH ARE APPROXIMATE as of the date of this Prospectus).

ADVISOR AND
APPROXIMATE ASSETS
% CURRENT GENERAL UNDER
MANAGEMENT
ALLOCATION* STRATEGY TYPE JULY 1,
1997**
---------- -------------
- ------------------
<S> <C> <C>
Chesapeake Capital Corporation Multi-System, Multi-Timeframe $1,047 million (total)
(22%) Technical, Trend-Following $931 million (Diversified)

Dreiss Research Corporation Pattern-Recognition, Long-Term $9.1 million (total)
(22%) Technical, Trend-Following

Hyman Beck & Company, Inc. Long-Term Technical, $220.3 million (total)
(25%) Trend-Following $179.2 million (Global)

Willowbridge Associates Inc. Discretionary, Fundamental $911.5 million (total)
(22%) and Technical $402.2 million (XLIM)

Witter and Lester, Inc. Discretionary, Technical, $17.9 million (total)
(9%) S&P only $6.3 million (Redstone)

</TABLE>

---------------

* Such allocations represent the allocations to the Advisors ON AUGUST
31, 1997. Such allocations are approximate as of the date of this Prospectus,
and are affected by (i) the profit and loss generated by each Advisor in
relation to the performance of the other Advisors for the Trust AND (II) ANY
REALLOCATION DECISION BY KENMAR. THE INITIAL ALLOCATIONS TO THE ADVISORS AT THE
COMMENCEMENT OF THE TRUST'S TRADING OPERATIONS AND ALLOCATIONS OF SUBSEQUENT
SUBSCRIPTION AMOUNTS ARE DESCRIBED UNDER "MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS."

** Excluding "notional" funds. "Notional" funds represent the difference
between the level at which a trader is instructed to trade an account and the
capital actually committed to the account. "Notional" funds do not represent
assets under management, but they do indicate the level of equity which

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<PAGE>

a trader has been instructed to consider itself to be managing in determining
the magnitude of positions taken.

ADVISOR SUMMARIES

MORE COMPLETE DESCRIPTIONS AND PERFORMANCE SUMMARIES FOR THE ADVISORS
DESCRIBED IN THIS SECTION OF THE PROSPECTUS ARE INCLUDED UNDER "THE ADVISORS" AT
PAGE 55. READ THAT SECTION OF THE PROSPECTUS CAREFULLY BEFORE DECIDING WHETHER
TO INVEST IN THE TRUST. SEE "RISK FACTORS -- (1) PAST PERFORMANCE NOT
NECESSARILY INDICATIVE OF FUTURE RESULTS; ALL OR SUBSTANTIALLY ALL OF AN
INVESTMENT COULD BE LOST" AT PAGE 8.

CHESAPEAKE CAPITAL CORPORATION

Chesapeake Capital Corporation relies primarily on technical analysis,
using multiple systems and timeframes. The trading methodologies employed by
Chesapeake Capital Corporation are based on programs analyzing a large number of
interrelated mathematical and statistical formulas and techniques which are
quantitative and proprietary in nature. In addition to such mathematical
evaluations, Chesapeake Capital Corporation employs a technique of technical
analysis generally known as "charting" in order to attempt to determine optimal
support and resistance levels and entry and exit points in the various markets.
Chesapeake Capital Corporation also makes extensive use of internally-generated
market information, which includes, but is not limited to, price volatility,
open interest, daily price action, volume and market psychology or sentiment.

The profitability of Chesapeake Capital Corporation's trading
programs, traded pursuant to technical analysis emphasizing mathematical and
charting approaches, will depend upon the occurrence in the future, as in the
past, of major trends in some markets. Chesapeake Capital Corporation TRADES
its Diversified Trading Program on behalf of the Trust. The Diversified Trading
Program emphasizes a maximum range of diversification, with a global portfolio
of futures, forward and cash markets which includes, but is not limited to,
agricultural products, metals, currencies, financial instruments, and stock,
financial and economic indices. SEE PAGES 59 THROUGH 65 FOR PERFORMANCE
INFORMATION RELATING TO CHESAPEAKE CAPITAL CORPORATION.

DREISS RESEARCH CORPORATION

Dreiss Research Corporation utilizes a trend-following system, which
is technical in nature and ignores news, weather, politics and other fundamental
factors except as they are reflected in the markets.

The technical basis for the trading method is the fractal
decomposition of weekly price patterns. This analysis identifies turning points
for constructing trend lines and determining support and resistance, which are
then combined in a system which generates specific trading signals. Signals are
then screened by a unique Choppiness Index which may then be used to adjust the
proximity of entry and exit signals. Dreiss Research Corporation trades a
diversified portfolio of futures contracts representing most major commodity
groups (I.E., agriculture, currencies, energy, equity indexes, interest rates,
livestock, metals and softs). SEE PAGES 66 THROUGH 70 FOR PERFORMANCE
INFORMATION RELATING TO DREISS RESEARCH CORPORATION.

HYMAN BECK & COMPANY, INC.

Hyman Beck & Company, Inc. relies primarily on technical analysis.
The trading methodologies employed by Hyman Beck & Company, Inc. are based on
programs analyzing a large number of interrelated mathematical and statistical
formulas and techniques which are quantitative and proprietary in nature. Hyman
Beck & Company, Inc. TRADES its Global Portfolio on behalf of the Trust,
relying on long-term, technical trend-following analysis. The Global Portfolio
trades a portfolio of over 30 futures and forward markets worldwide with a
concentration in world interest rate and other financial markets. SEE PAGES 71
THROUGH 79 FOR PERFORMANCE INFORMATION RELATING TO HYMAN BECK & COMPANY, INC.

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<PAGE>

WILLOWBRIDGE ASSOCIATES INC.

Willowbridge Associates Inc. UTILIZES its XLIM Trading Approach on
behalf of the Trust. The XLIM Trading Approach is traded on a discretionary
basis by Philip L. Yang. Trading decisions are based primarily on Mr. Yang's
analysis of technical factors, fundamentals and market action. The XLIM Trading
Approach trades are selected from a wide variety of futures contracts, forwards,
spot and options contracts on United States and international markets, including
but not limited to, financial instruments, currencies, precious and base metals
and agricultural commodities. Mr. Yang reserves the right to change the
portfolio composition of the XLIM Trading Approach. SEE PAGES 80 THROUGH 92 FOR
PERFORMANCE INFORMATION RELATING TO WILLOWBRIDGE ASSOCIATES INC.

WITTER & LESTER, INC.

Witter & Lester, Inc. TRADES its Redstone Program on behalf of the
Trust, trading only the S&P 500 Stock Index futures contract. The Redstone
Program stems from a research effort begun in 1993 to automate the
interpretation of traditional Witter & Lester, Inc. market analysis. Witter &
Lester, Inc.'s stock market model is based on pattern recognition of the
following nine indicators:

1) Candlestick theory 6) Put/Call ratio
2) Climax Indicator 7) Seasonal variable
3) Volume trends 8) TRIN
4) Momentum 9) Valuation/Sentiment
5) New high/lows

Each day the market timing model produces a rating (bullish or
bearish). This daily analysis drives the degree of long or short exposure taken
in the program each day. Positions are built using a combination of stock index
futures and options. SEE PAGES 93 THROUGH 99 FOR PERFORMANCE INFORMATION
RELATING TO WITTER & LESTER, INC.

THE ADVISORY AGREEMENTS

The Advisory Agreements among the Trust, Kenmar and each Advisor
terminate as of December 31, 1997, subject to renewal on the same terms at
Kenmar's option for up to two additional one-year terms. Kenmar will (when it
considers doing so to be in the best interests of the Trust) generally attempt
to negotiate advisory agreements with comparable terms for all of the Advisors
chosen for the Trust. Kenmar, but generally not the Advisors, retains the right
to terminate any Advisory Agreement at will and upon short notice to the
Advisors. Kenmar also retains the right to withdraw funds from any Advisor's
trading account at any time (including immediately).

Each Advisory Agreement provides that the Trust will indemnify the
Advisor and its affiliates, as well as their respective officers, shareholders,
directors, employees, partners and controlling persons for conduct taken as an
Advisor or in connection with the Advisory Agreement, provided that such conduct
does not constitute negligence, misconduct or breach of the Advisory Agreement
or of any fiduciary obligation to the Trust and was done in good faith and in a
manner reasonably believed to be in, or not opposed to, the best interests of
the Trust. Each Advisory Agreement further provides that this indemnity
provision will not increase the liability of any Unitholder to the Trust beyond
the amount of such Unitholder's capital and profits, if any, in the Trust
(exclusive of previously received distributions or other returns of capital,
including redemptions).

Under the exculpatory provisions of the Advisory Agreements, none of
the Advisors, their affiliates nor their respective officers, directors,
employees, partners, controlling persons or shareholders will be liable to the
Trust or to any of the Unitholders in connection with their management of assets
of the Trust except by reason of acts or omissions in contravention of the
Advisory Agreement, or due to their misconduct or negligence, or by reason of
not having acted in good faith and in the reasonable belief that such actions or
omissions were in, or not opposed to, the best interests of the Trust.

Each initial Advisor (and/or its affiliates and principals) will
purchase a minimum of 500 Units as of the inception of the Trust's trading. No
Advisor, including its affiliates and/or principals, is expected to purchase
more than 500 Units. Each initial Advisor has agreed to maintain this
investment for as long as it continues to act as an Advisor. The Units
purchased by the Advisors, their principals and/or affiliates will be included
in the 50,000 Units required to be sold for the Trust to commence trading.

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<PAGE>

KENMAR ADVISORY CORP.

BACKGROUND AND PRINCIPALS

Kenmar Advisory Corp. is a Connecticut corporation originally
incorporated as a New York corporation in September 1983. Kenneth A. Shewer is
its Chairman and Marc S. Goodman is its President. Messrs. Shewer and Goodman
are Kenmar's sole directors and are the only persons responsible for the
selection and retention of Advisors. All of Kenmar's stock is owned, indirectly
and equally, by Messrs. Shewer and Goodman. Kenmar has been registered with the
CFTC as a commodity pool operator since February 7, 1984 and is a member in good
standing of the NFA in such capacity. Its principal place of business is Two
American Lane, P.O. Box 5150, Greenwich, CT 06831-8150, telephone number: (203)
861-1000. Kenmar and its affiliates focus on the design and management of
leading-edge investment programs in the managed futures sector. THE
REGISTRATION OF KENMAR WITH THE CFTC AND ITS MEMBERSHIP IN THE NFA MUST NOT BE
TAKEN AS AN INDICATION THAT ANY SUCH AGENCY OR SELF-REGULATORY BODY HAS
RECOMMENDED OR APPROVED EITHER KENMAR OR THE TRUST.

No administrative, civil, or criminal action has ever been brought
against Kenmar or any of its principals or against the Trust.

Mr. Kenneth A. Shewer (born 1953), Chairman, was employed by
Pasternak, Baum and Co., Inc. ("Pasternak, Baum"), an international cash
commodity firm, from June 1976 until September 1983. Mr. Shewer created and
managed Pasternak, Baum's Grain Logistics and Administration Department and
created its Domestic Corn and Soybean Trading Department. In 1982, Mr. Shewer
became co-manager of Pasternak, Baum's F.O.B. Corn Department. In 1983, Mr.
Shewer was made Vice President and Director of Pasternak, Baum. Mr. Shewer
graduated from Syracuse University with a B.S. degree in 1975.

Mr. Marc S. Goodman (born 1948), President, joined Pasternak, Baum in
September 1974 and was a Vice President and Director from July 1981 until
September 1983. While at Pasternak, Baum, Mr. Goodman was largely responsible
for business development outside of the United States, for investment of its
corporate retirement funds, and for selecting trading personnel. Mr. Goodman
has conducted extensive business in South America, Europe and the Far East. Mr.
Goodman graduated from the Bernard M. Baruch School of Business of the City
University of New York with a B.B.A. in 1969 and an M.B.A. in 1971 in Finance
and Investments, where he was awarded an Economics and Finance Department
Fellowship from September 1969 through June 1971.

Messrs. Shewer and Goodman left Pasternak, Baum in September 1983 to
form Kenmar and they have occupied their present positions with Kenmar since
that time.

Ms. Esther Eckerling Goodman (born 1952), Chief Operating Officer and
Senior Executive Vice President, joined Kenmar in July 1986 and has been
involved in the futures industry since 1974. From 1974 through 1976, she was
employed by Conti-Commodity Services, Inc. and ACLI Commodity Services, Inc., in
the areas of hedging, speculative trading and tax arbitrage. In 1976, Ms.
Goodman joined Loeb Rhoades and Company, Inc. where she was responsible for
developing and managing a managed futures program which, in 1979, became the
trading system for Westchester Commodity Management, an independent commodity
trading advisor of which Ms. Goodman was a founder and principal. From 1983
through mid-1986, Ms. Goodman was employed as a marketing executive at
Commodities Corp. (USA) of Princeton, New Jersey. Ms. Goodman was a Director of
the Managed Futures Trade Association from 1987 to 1991 and a Director of its
successor organization, the Managed Futures Association, from 1991 to 1995. She
has written several articles and has spoken before various professional groups
and organizations on the subject of managed futures. Ms. Goodman graduated from
Stanford University in 1974 with a B.A. degree.

Mr. Robert L. Cruikshank (born 1936), Executive Vice President, joined
Kenmar in March 1991. Mr. Cruikshank spent 20 years (1958-1978) at Blyth
Eastman Dillon in New York and was its Executive Vice President in charge of the
Securities Division, which included all domestic and international sales and
branch office activities, all trading departments, and the research areas. In
1979, Mr. Cruikshank jointly formed Neild, Cruikshank & Co., an independent
market-maker on the Chicago Board of Options Exchange ("CBOE"), where he
remained until 1984 when he formed his own market-making firm, Nassau
Corporation. From 1982 to 1984, Mr. Cruikshank also served as Director and Vice

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Chairman of the Board of the CBOE, during which time he was instrumental in the
development of the S&P 100 (OEX) option contract. From 1985 until March 1991,
he served as President and CEO of First Capital Financial Corporation, a
national real estate syndication firm owned by Sam Zell. Mr. Cruikshank
graduated cum laude from Princeton University with a B.A. degree in Economics in
1958.

Joshua B. Parker, Esq. (born 1956), Executive Vice President and
General Counsel, has been with Kenmar since October 1988. From January 1986
through October 1988, Mr. Parker was an independent floor trader on the American
Stock Exchange engaged in trading equity options and related instruments, first
in association with Michael Becker & Co. and later in his own firm, Premium
Investments L.P. From May 1985 through January 1986, Mr. Parker was the
associate general counsel of a company in the over-the-counter drug and personal
care industry. From August 1981 through May 1985, Mr. Parker was associated
with the law firm of Baer Marks & Upham. Mr. Parker graduated from New York
University School of Law with a J.D. degree in 1981 and from Yale University
with a B.A. degree in 1977.

Mr. Thomas J. DiVuolo (born 1960), Senior Vice President responsible
for research, risk management and account oversight, joined Kenmar in March
1989. From 1982 through 1984, Mr. DiVuolo was employed by Balfour Maclaine
International Ltd. working in the commodity accounting and compliance areas.
From 1984 through 1986 he was employed at E.F. Hutton and Company, Inc. as a
manager of commodity regulatory reporting. From 1986 until he joined Kenmar in
1989, Mr. DiVuolo worked for Lloyds International Trading, a commodity trading
division of Lloyds Bank. Mr. DiVuolo graduated from Wagner College in 1990 with
an M.B.A. degree in Finance in 1990 and from Pace University with a B.B.A.
degree in Public Accounting in 1982.

Mr. Gary J. Yannazzo (born 1953), Senior Vice President and Chief
Financial Officer, joined Kenmar in August 1997. From March 1992 to July 1995,
he was Senior Vice President and Controller of Metallgesellschaft Corp., a
diversified commodity marketing and trading company, with thirty worldwide
subsidiaries and $5 billion in annual revenues. From January 1990 through
February 1992, Mr. Yannazzo was President, Chief Executive Officer and part
owner of Holland Mortgage Corporation. From December 1982 through November
1989, Mr. Yannazzo was First Vice President of Security Capital Corporation, a
publicly traded financial services company and affiliate of Smith Barney, Inc.
From June 1975 through November 1982, Mr. Yannazzo was with Arthur Andersen &
Co., serving as an Audit Manager from June 1980. From August 1995 until he
joined Kenmar, Mr. Yannazzo was a private consultant, engaged primarily in
projects and ventures in the commodity and derivative areas. Mr. Yannazzo
received his B.S. in Business Administration from Seton Hall University in 1975
and his CPA certification in 1977.

Mr. Jeffrey S. Rothstein (born 1957), Vice President and Chief
Information Officer, joined Kenmar in May 1996. From August 1991 to April 1996,
Mr. Rothstein was Vice President in charge of Commodity Trading Systems
Development and Support at AIG Trading Group, American International Group
Inc.'s commodity trading subsidiary. From January 1986 through July 1991, he
worked for Bankers Trust Company, building equity trading systems, and marketing
and implementing foreign exchange trading systems at international merchant
banks. From September 1981 through June 1985, Mr. Rothstein was employed as a
programmer, project leader and manager by Digital Equipment Corporation. He was
with Hewlett Packard Company from July 1979 through September 1981. Mr.
Rothstein graduated from Columbia University with an M.B.A. degree in December
1985 and from Cornell University with a B.S. in Computer Science in 1979.

MANAGEMENT OF TRADERS

Kenmar's hallmark is its emphasis on vigilant management of its
portfolios of traders. Kenmar analyzes trading performance on a daily basis for
each trader it retains. This detailed analysis identifies sources of profits
and losses for each trader each day, enabling management to make highly informed
decisions regarding the performance of each such trader (including the Trust's
Advisors).

Based on Kenmar's perception of market conditions, Advisor performance
and other factors, Kenmar will reallocate assets among Advisors in an effort to
place such assets optimally. Kenmar also will add Advisors when situations
warrant, and remove or replace Advisors if profitability, risk assumptions or
other significant factors indicate that replacement is advisable. See "Risk
Factor (24) -- Regulatory Matters May Alter the Nature of an Investment in the
Trust" at page 12.

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Naturally, these activities require a strong emphasis on trading and
market research. Kenmar operates and updates continuously a database that
tracks over 600 different trading programs offered by traders around the globe.
Added to these quantitative data are qualitative assessments based on detailed
trader interviews and analysis of trades, trading performance and trading
strategies.

FIDUCIARY OBLIGATIONS OF KENMAR

NATURE OF FIDUCIARY OBLIGATIONS; CONFLICTS OF INTEREST

As managing owner of the Trust, Kenmar is effectively subject to the
same restrictions imposed on "fiduciaries" under both statutory and common law.
Kenmar has a fiduciary responsibility to the Unitholders to exercise good faith,
fairness and loyalty in all dealings affecting the Trust, consistent with the
terms of the Trust's Declaration of Trust and its Amended and Restated
Declaration of Trust and Trust Agreement dated as of December 17, 1996 (the
"Declaration of Trust"). The general fiduciary duties which would otherwise be
imposed on Kenmar (which would make the operation of the Trust as described
herein impracticable due to the strict prohibition imposed by such duties on,
for example, conflicts of interest on behalf of a fiduciary in its dealings with
its beneficiaries), are defined and limited in scope by the disclosure of the
business terms of the Trust, as set forth herein and in the Declaration of Trust
(to which terms all Unitholders, by subscribing to the Units, are deemed to
consent).

The Trust, as a publicly-offered "commodity pool," is subject to the
Statement of Policy of the North American Securities Administrators Association,
Inc. relating to the registration, for public offering, of commodity pool
interests (the "NASAA Guidelines"). The NASAA Guidelines explicitly prohibit a
managing owner of a commodity pool from "contracting away the fiduciary
obligation owed to [investors] under the common law." Consequently, once the
terms of a given commodity pool, such as the Trust, are established, the
managing owner is effectively precluded from changing such terms in a manner
that disproportionately benefits the managing owner, as any such change could
constitute self-dealing under common law fiduciary standards, and it is
virtually impossible to obtain the consent of existing investors to such
self-dealing (whereas, given adequate disclosure, new investors subscribing to a
pool should be deemed to evidence their consent to the business terms thereof by
the act of subscribing).

The Declaration of Trust provides that Kenmar and its affiliates shall
have no liability to the Trust or to any Unitholder for any loss suffered by the
Trust arising out of any action or inaction of Kenmar or its affiliates or their
directors, officers, shareholders, partners, members or employees (the "Kenmar
Related Parties") if the Kenmar Related Parties, in good faith, determined that
such course of conduct was in the best interests of the Trust, and such course
of conduct did not constitute negligence or misconduct by the Kenmar Related
Parties. The Trust has agreed to indemnify the Kenmar Related Parties against
claims, losses or liabilities based on their conduct relating to the Trust,
provided that the conduct resulting in the claims, losses or liabilities for
which indemnity is sought did not constitute negligence or misconduct and was
done in good faith and in a manner reasonably believed to be in the best
interests of the Trust. The NASAA Guidelines prescribe the maximum permissible
extent to which the Trust can indemnify the Kenmar Related Parties and prohibit
the Trust from purchasing insurance to cover indemnification which the Trust
itself could not undertake directly.

FIDUCIARY AND REGULATORY DUTIES

An investor should be aware that Kenmar has a fiduciary responsibility
to the Unitholders to exercise good faith and fairness in all dealings affecting
the Trust.

Under Delaware law, a beneficial owner of a business trust (such as a
Unitholder of the Trust) may, under certain circumstances, institute legal
action on behalf of himself and all other similarly situated beneficial owners
(a "class action") to recover damages from a managing owner of such business
trust for violations of fiduciary duties, or on behalf of a business trust (a
"derivative action") to recover damages from a third party where a managing
owner has failed or refused to institute proceedings to recover such damages.
In addition, beneficial owners may have the right, subject to applicable
procedural and jurisdictional requirements, to bring class actions in federal
court to enforce their rights under the federal securities laws and the rules
and regulations promulgated thereunder by the Securities and Exchange Commission
("SEC"). Beneficial owners who have suffered losses in connection with the
purchase or sale of their beneficial interests may be able to recover such
losses from a managing owner where the losses result from a violation by the
managing owner of the anti-fraud provisions of the federal securities laws.

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<PAGE>

Under certain circumstances, Unitholders also have the right to
institute a reparations proceeding before the CFTC against Kenmar (a registered
commodity pool operator), the Clearing Brokers (registered futures commission
merchants) and the Advisors (registered commodity trading advisors), as well as
those of their respective employees who are required to be registered under the
Commodity Exchange Act, as amended, and the rules and regulations promulgated
thereunder. Private rights of action are conferred by the Commodity Exchange
Act, as amended. Investors in commodities and in commodity pools may,
therefore, invoke the protections provided by such legislation.

There are substantial and inherent conflicts of interest in the
structure of the Trust which are, on their face, inconsistent with Kenmar's
fiduciary duties. One of the purposes underlying the disclosures set forth in
this Prospectus is to disclose to all prospective Unitholders these conflicts of
interest so that Kenmar may have the opportunity to obtain investors' informed
consent to such conflicts. Prospective investors who are not willing to consent
to the various conflicts of interest described under "Conflicts of Interest" and
elsewhere are ineligible to invest in the Trust. Kenmar presently intends to
raise such disclosures and consent as a defense in any proceeding brought
seeking relief based on the existence of such conflicts of interest. See
"Conflicts of Interest" at page 32.

The foregoing summary describing in general terms the remedies
available to Unitholders under federal and state law is based on statutes, rules
and decisions as of the date of this Prospectus. This is a rapidly developing
and changing area of the law. Therefore, Unitholders who believe that they may
have a legal cause of action against any of the foregoing parties should consult
their own counsel as to their evaluation of the status of the applicable law at
such time.

INVESTMENT OF KENMAR IN THE TRUST

Kenmar has purchased and will maintain a 1% interest in the Trust in
its capacity as managing owner. Robert L. Cruikshank, a principal of Kenmar,
has invested $100,000 in the Trust. Marc S. Goodman, the President of Kenmar,
has invested $5,500 through an individual retirement account, in the Trust.

USE OF PROCEEDS

The proceeds of the offering of the Units are used by the Trust to
engage in the speculative trading on futures, forward, options and related
markets through allocating such proceeds to the Advisors.

To the extent the Trust trades in futures contracts on U.S. exchanges,
the assets deposited by the Trust with its Clearing Brokers as margin must be
segregated pursuant to the regulations of the CFTC. Such segregated funds may
be invested only in a limited range of instruments -- principally U.S.
government obligations.

To the extent that the Trust trades in futures, forward, options and
related contracts on markets other than regulated U.S. futures exchanges, funds
deposited to margin positions held on such exchanges are invested in bank
deposits or in instruments of a credit standing generally comparable to those
authorized by the CFTC for investment of "customer segregated funds," although
applicable CFTC rules prohibit funds employed in trading on foreign exchanges
from being deposited in "customer segregated fund accounts."

Although the percentages set forth below may vary substantially over
time, Kenmar estimates that:

(i) up to approximately 83% of the Net Asset Value of the Trust will
be placed with the Clearing Broker in the form of cash or U.S. Treasury
bills to margin positions of all commodities combined. Such funds will be
segregated pursuant to CFTC rules; and

(ii) up to approximately 17% of the Trust's assets will be used to
margin foreign futures contracts.

In addition, assets of the Trust not required to margin positions may
be maintained in United States bank accounts opened in the name of the Trust and
may be held in United States Treasury bills (or other securities approved by the
CFTC for investment of customer funds).

The Trust receives all of the interest income earned on its assets.

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CHARGES

CHARGES PAID BY THE TRUST

RECIPIENT NATURE OF PAYMENT AMOUNT OF PAYMENT
- --------- ----------------- -----------------

Kenmar Reimbursement of Kenmar has advanced total
organizational and costs of approximately $578,000,
initial offering costs which costs may be reduced by up
to $50,000 if certain benchmarks
are not reached. Such advanced
costs are being reimbursed to
Kenmar in monthly installments
of 0.2% of the Trust's beginning
of month Net Assets.

Kenmar Brokerage Flat-rate monthly commissions of
commissions 0.917% of the Trust's beginning
of month Net Assets (an 11%
annual rate). Such commissions
cover all floor brokerage,
exchange, clearing and NFA fees
incurred in the Trust's trading.

Third Miscellaneous Paid as incurred; not
Parties execution costs anticipated to exceed 0.25% of
average beginning of month Net
Assets per year.

Counter- "Bid-ask" spreads Each counterparty with which the
parties Trust trades receives "bid-ask"
spreads on the forward trades
executed on behalf of the Trust.

Advisors Profit Shares Paid by the Trust on a quarterly
basis (although accrued against
Net Asset Value per Unit
monthly). Each initial Advisor's
Profit Share is determined based
on any New Trading Profit (as
defined) generated by such
Advisor. New Trading Profit in
respect of each Advisor's
account is calculated after
reduction for brokerage
commissions at an annual rate of
4.5% -- 7.0%, rather than at an
11% annual rate, and execution
costs actually incurred (other
than floor brokerage, exchange,
clearing and NFA fees). New
Trading Profit is not reduced by
any Incentive Fee,
administrative expenses or
organizational and initial
offering costs (or extraordinary
expenses). THE PROFIT SHARES ARE
PAYABLE SEPARATELY TO EACH
ADVISOR BASED ON ITS INDIVIDUAL
PERFORMANCE, NOT OVERALL PROFITS
OF THE TRUST. UNITS MAY BE
SUBJECT TO REDUCTION FOR PROFIT
SHARES ATTRIBUTABLE TO A
PARTICULAR ADVISOR EVEN THOUGH
THE NET ASSET VALUE PER UNIT HAS
DECLINED FROM THE PURCHASE PRICE
OF SUCH UNITS.

Kenmar Incentive Fee Paid by the Trust as a whole on
an annual basis (although
accrued against Net Asset Value
per Unit monthly). The Incentive
Fee equals 5% of any New Overall
Appreciation (as defined). AN
INCENTIVE FEE MAY BE ALLOCATED
EVEN THOUGH THE NET ASSET VALUE
PER UNIT HAS DECLINED FROM THE
PURCHASE PRICE OF SUCH UNITS.

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RECIPIENT NATURE OF PAYMENT AMOUNT OF PAYMENT
- --------- ----------------- -----------------

Third Administrative Paid as incurred; not
Parties costs anticipated to exceed 0.50% of
the Trust's average beginning of
month Net Assets per year.

Third Reimbursement of Actual payments to third
Parties delivery, insurance, parties; expected to be
storage and negligible.
any other extraordinary
expenses; taxes (if any)

------------------------

ORGANIZATIONAL AND INITIAL OFFERING COSTS

Kenmar has advanced the organizational and initial offering costs of
the Trust in a total amount of approximately $578,000. Such costs may be
reduced by up to $50,000 if certain benchmarks are not reached. The Trust is
reimbursing Kenmar for such costs in monthly installments of 0.2% of the Trust's
beginning of month Net Assets, which reimbursements began with the first month
of trading operations (May 1997).

BROKERAGE COMMISSIONS

Commodity brokerage commissions for futures trades are typically paid
on the completion or liquidation of a trade and are referred to as "round-turn
commissions," which cover both the purchase (or sale) of a commodity futures
contract and the subsequent offsetting sale (or purchase). However, the Trust
does not pay commodity brokerage commissions to Kenmar on a per-trade basis but
rather at the flat monthly rate of 0.917% of the Trust's beginning of month Net
Assets (an 11.0% annual rate). Kenmar receives such brokerage commissions,
irrespective of the number of trades executed on the Trust's behalf, and pays
floor brokerage, exchange, clearing and NFA fees with respect to executing the
Trust's trades. NFA transaction fees are assessed on the Trust's futures
trading on U.S. exchanges. Such NFA fees currently equal $0.14 per round-turn
trade of a futures contract and $0.07 for each trade of a commodity option (a
$0.07 fee is charged upon the purchase and upon the exercise of an option; if an
option is exercised, an additional $0.14 fee is payable upon the liquidation of
the futures position acquired upon such exercise; no fee is assessed upon the
expiration of an option). THE NFA HAS ANNOUNCED THAT AS OF JANUARY 1, 1998 SUCH
FEES WILL BE INCREASED TO $0.20 PER ROUND-TURN TRADE OF A FUTURES CONTRACT AND
$0.10 PER TRADE OF A COMMODITY OPTION.

State securities administrators require Kenmar to represent that the
brokerage commissions paid by the Trust will not be increased during the period
in which early redemption charges are in effect. Due to the ongoing offering of
the Units, this representation entails that Kenmar will likely never be able to
raise brokerage commissions unless Kenmar waives such charges.

Kenmar estimates, based on the historical trading frequency of the
initial Advisor group, that the Trust's 11% per annum flat-rate brokerage
commissions would constitute the approximate equivalent of round-turn
commissions of $45. The round-turn equivalent of the Trust's flat-rate
commissions will vary with the frequency with which the Advisors place orders
for the TRUST'S account managed by each of them. Kenmar will report, in the
annual reports distributed by Kenmar to Unitholders, the approximate round-turn
equivalent rate paid by the Trust on its trading during the previous year.

MISCELLANEOUS EXECUTION COSTS

Kenmar pays all floor brokerage, exchange, NFA and clearing fees
relating to the execution of the Trust's trades (other than "bid-ask" spreads).
However, certain incidental costs may be incurred in the course of such trading
- -- for example, "give-up" charges when a trade is executed and cleared by
brokers other than the Clearing Broker and subsequently transferred to the
Clearing Broker for carrying or the service fees assessed by certain forward
dealing desks -- which the Trust will pay as incurred. There may, in fact, be
virtually no such costs incurred during certain periods and Kenmar does not
anticipate that such costs will, in any event, exceed 0.25% of the Trust's
average beginning of month Net Assets in any fiscal year.

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<PAGE>

"BID-ASK" SPREADS

Many of the Trust's currency trades are executed in the forward
markets, in which participants include a spread between the prices at which they
are prepared to buy and sell a particular currency. The fact that the Trust
pays such "spreads" does not result in a reduction in the flat-rate brokerage
commissions paid by the Trust (however, forward trades were not included in the
number of round-turns executed by the Trust in determining the approximate
round-turn equivalent of the Trust's flat-rate commissions).

PROFIT SHARES AND INCENTIVE FEES

CALCULATION OF NEW TRADING PROFIT AND NEW OVERALL APPRECIATION

The Advisors will receive Profit Shares based on New Trading Profit
generated by each individual Advisor in the following percentages: Chesapeake
Capital Corporation -- 20%; Dreiss Research Corporation -- 20%; Hyman Beck &
Company, Inc. -- 20%; Willowbridge Associates Inc. -- 20%; and Witter & Lester,
Inc. -- 15%.

New Trading Profit is calculated with respect to each Advisor's Trust
account and New Overall Appreciation is calculated with respect to the Trust as
a whole on the basis of the cumulative performance of such account or the Trust,
respectively, and not on a Unit-by-Unit basis. For example, if the Trust loses
$500,000 in its first month of trading and gains $750,000 in the next, accrued
New Overall Appreciation would equal $250,000 as of the end of such second month
- -- irrespective of whether the Net Asset Value per Unit were greater or less
than the initial $100 at such time. (If a substantial number of Units were
either redeemed or issued as of the end of the first month, the cumulative gain
through the end of the second month would not be directly reflected in the Net
Asset Value per Unit.)

Both New Trading Profit and New Overall Appreciation are calculated on
a high water mark basis, as described below. Each Advisor will be allocated
from the Trust its Profit Share equal to the percentage described above of any
cumulative New Trading Profit generated by such Advisor, as of the calendar
quarter-end of determination, in excess of: (i) the highest level of cumulative
Trading Profit as of any previous calendar quarter-end generated by such
Advisor, or (ii) $0, if higher (the "high water mark"). "Trading Profit" (i)
includes gross realized gains and losses on closed positions and the change in
unrealized gains and losses on open positions from the preceding period, (ii)
does not include interest income, (iii) is reduced by annual brokerage
commissions of 4.5% -- 7.0%, not 11%, of average beginning of month Net Assets,
plus execution costs other than floor brokerage, exchange, clearing and NFA
fees, and (iv) is not reduced by Incentive Fees, administrative expenses,
organizational and initial offering cost reimbursements or extraordinary costs
(such as taxes or litigation costs). "Overall Appreciation" is calculated, not
on a per-Unit basis, but on the basis of the overall trading profits and losses
of the Trust, net of all fees and expenses (including Profit Shares) paid or
accrued other than the Incentive Fee itself and after subtraction of all
interest income received by the Trust. "New Trading Profit" is the excess, if
any, as of any quarter-end by which cumulative Trading Profit exceeds the
highest level of cumulative Trading Profit as of any previous quarter-end and
adjusted as provided below. "New Overall Appreciation" is the excess, if any,
as of any December 31 by which cumulative Overall Appreciation exceeds the
highest level of cumulative Overall Appreciation as of any previous December 31
and adjusted as provided below.

In the event that losses have been incurred since the currently
effective "high water mark" was reached and assets are withdrawn from an
Advisor's Trust account or from the Trust as a whole (other than to pay
expenses), the shortfall (the "Loss Carryforward") between such "high water
mark" and the level of cumulative Trading Profits or Overall Appreciation at the
time of such withdrawal shall be proportionately reduced (and the "high water
mark" lowered accordingly) for purposes of calculating subsequent Profit Shares
or Incentive Fees. Loss Carryforward reductions, in respect of a particular
Advisor's Trust account, can result from Kenmar reallocating capital away from
an Advisor, as well as from a redemption of Units. Loss Carryforward reductions
will not be restored as a result of subsequent additions of capital offsetting
the withdrawals which resulted in such reductions.

If Kenmar withdraws assets from an Advisor's Trust account at a time
when there is accrued New Trading Profit in respect of an Advisor's Trust
account, the Profit Share attributable to the amount of capital withdrawn (net
of the proceeds of any additional Units issued as of the date of such
withdrawal) will be paid out to the appropriate Advisor. If there are net
redemptions of Units at a time when there is accrued New Overall Appreciation in
respect of the Trust as a whole, the Incentive Fee attributable to the amount of
capital withdrawn (net of the proceeds of any additional Units issued

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<PAGE>

as of the date of such withdrawal) will be paid out to Kenmar.

For example, assume that the Trust began trading June 1, 1997 and as
of December 31, 1997 had recognized cumulative Overall Appreciation of $200,000.
An Incentive Fee of 5% of $200,000 or $10,000 would be paid to Kenmar. If
through June 30, 1998, the Trust had incurred a loss of $100,000 for 1998, at
which point 25% of the Units were redeemed (and assuming that no additional
Units were issued as of such date of withdrawal), prior to such redemption there
would have existed a Loss Carryforward, for Incentive Fee calculation purposes,
of $100,000 which would be reduced to $75,000 upon redemption of 25% of the
Units. If during the second six months of 1998, Overall Appreciation of
$100,000 were recognized, New Overall Appreciation as of December 31, 1998 would
equal $25,000, and an Incentive Fee of $1,250 would be paid.

Profit Shares do not reduce Trading Profit and Incentive Fees do not
reduce Overall Appreciation. Consequently, the Advisors and Kenmar need not
"earn back" their respective Profit Shares and Incentive Fees before generating
New Trading Profits or New Overall Appreciation, as applicable, potentially
subject to additional Profit Shares and Incentive Fees. (Overall Appreciation
is calculated after reduction for all Profit Shares, but not for Incentive
Fees, paid or accrued.)

Interest income is not included in either Trading Profits or Overall
Appreciation.

ALLOCATIONS OF PROFIT SHARES AND INCENTIVE FEE AMONG UNITHOLDERS

Because Profit Shares and Incentive Fees are calculated on the basis
of the Trading Profit, if any, attributable to an Advisor's Trust account and
the Trust as a whole, respectively, these costs are subject to equal allocation
among investors even though such persons may have purchased their Units at
different times. Such costs, therefore, are not reflective of each INVESTOR'S
individual investment experience, but of the performance of the Trust as a
whole. For example, assume that 100,000 Units were initially sold as of June 1,
1997 and through December 31, 1997 the Trust incurred a $1,000,000 loss. If
100,000 more Units were purchased as of January 1, 1998 (at a Net Asset Value of
$90 per Unit), and the Trust earned $1,000,000 during 1998, as of December 31,
1998 no Incentive Fee would be due, even though the second tranche of Units had
increased in Net Asset Value from $90 to $95. Moreover, were $1,500,000 to have
been earned, the Units initially sold would be subject to paying their allocable
share of the Incentive Fee of $25,000 (5% of $500,000) which would be due as of
December 31, 1998, despite the Net Asset Value of such Units being below their
$100 purchase price.

Profit Shares and Incentive Fee accruals are also subject to
distortions similar to those described above when reversed due to subsequent
losses prior to the date that these costs are finally determined. When Units
are purchased at a Net Asset Value per Unit reduced by accrued Profit Shares
and/or Incentive Fees, such Units effectively receive "full credit" for the
amount of such accruals through the reduction in their purchase price.
Consequently, if the accrual is subsequently reversed, the benefit of the
reversal should be allocated entirely to the Units outstanding when such Profit
Share or Incentive Fees accrued, rather than being evenly divided between such
Units and the newly-purchased Units. However, such reversals are allocated
equally among all outstanding Units in the interests of maintaining a uniform
Net Asset Value per Unit.

THE DISTORTIONS DESCRIBED ABOVE ARE THE PRODUCT OF CALCULATING AND
ALLOCATING INCENTIVE COMPENSATION IN OPEN-END FUNDS AMONG PERSONS INVESTING AT
DIFFERENT TIMES WHILE STILL MAINTAINING A UNIFORM NET ASSET VALUE PER SHARE OR
UNIT. THIS METHOD IS THE MOST COMMON METHOD USED IN RETAIL MANAGED FUTURES
FUNDS IN WHICH THE LARGE NUMBER OF INVESTORS MAKES IT IMPRACTICABLE TO
INDIVIDUALLY TRACK CAPITAL ACCOUNTS FOR EACH INVESTOR, BUT CAN RESULT IN
ALLOCATIONS OF PROFIT SHARES AND INCENTIVE FEES THAT ARE NOT REFLECTIVE OF
PARTICULAR INVESTORS' INDIVIDUAL INVESTMENT EXPERIENCE.

ADMINISTRATIVE COSTS

The Trust is responsible for actual payments to third parties,
estimated at no more than 0.50% of the TRUST'S average beginning of month Net
Assets per year.

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<PAGE>

EXTRAORDINARY EXPENSES

The Trust is responsible for any extraordinary charges (such as taxes)
incidental to its trading. In Kenmar's experience such charges have been
negligible.

-------------------------------

Kenmar sends each Unitholder a monthly statement that includes a
description of performance during the prior month and sets forth, among other
things, the brokerage commissions, Incentive Fee and Profit Share accruals
during such month and on a year-to-date basis.

CHARGES PAID BY KENMAR

THE FOLLOWING COSTS RELATING TO THE SALE OF THE UNITS AND THE
OPERATION OF THE TRUST ARE PAID BY KENMAR.

SELLING COMMISSIONS; "TRAILING COMMISSIONS"

Kenmar pays, from its own funds, the 5% selling commissions due in
respect of the Units. Furthermore, Kenmar pays significant "trailing
commissions" to eligible selling agents who sell Units which remain outstanding
for more than twelve months (immediately to the extent investors have acquired
Units on the same day as or within seventy-five (75) days after redeeming
investments in Kenmar-sponsored investment vehicles). Such "trailing
commissions" will be payable quarterly and will be accrued monthly at 0.2917 of
1% (a 3.5% annual rate) of the beginning of month Net Asset Value of such Units
for as long as they remain outstanding. Selling Agents will pass on to their
registered representatives a portion of the foregoing selling compensation and
"trailing commissions," after deduction of "due diligence" and administrative
expenses incurred in connection with this offering, in accordance with such
Selling Agents' standard compensation arrangements. See "Plan of Distribution
- -- Selling Agents' Compensation" at page 48.

CONSULTING FEES

Each initial Advisor receives a Consulting Fee, monthly in arrears,
payable by Kenmar not the Trust, equal to 0.167% of the beginning of month Net
Assets of the Trust allocated to such Advisor's management (a 2% annual rate).

REDEMPTION CHARGES

Units redeemed on or prior to the end of the eighteenth month after
such Units are issued will be subject to redemption charges of 3% (for Units
redeemed on or after the end of the sixth and on or before the end of the
twelfth month after purchase) and 2% (for Units redeemed from the beginning of
the thirteenth and on or before the end of the eighteenth month after purchase)
of the Net Asset Value per Unit at which they are redeemed. Such charges will
be paid to Kenmar. Investors acquiring Units on the same day as or within
seventy-five (75) days after redeeming investments in Kenmar-sponsored
investment vehicles will be deemed to have held such Units for the duration of
their participation in such Kenmar-sponsored investment vehicles for purposes
of calculating the required six-month holding period following purchases of such
Units. Such investor will not be subject to a Kenmar Global Trust redemption
charge but will remain subject to the redemption charge, if any, of the
Kenmar-sponsored investment vehicle from which he redeemed.

THE CLEARING BROKERS

The Trust's initial clearing brokers are ING (U.S.) Securities Futures
& Options Inc. ("ING Futures & Options") and PaineWebber Incorporated
("PaineWebber")(each, a "Clearing Broker" or together, the "Clearing Brokers").
Neither nor ING Futures & Options nor PaineWebber has been involved in the
organization of the Trust and neither takes any part in the Trust's ongoing
management. Neither ING Futures & Options nor PaineWebber is affiliated with
Kenmar, and neither is responsible for the activities of Kenmar.

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<PAGE>

ING FUTURES & OPTIONS

ING (U.S.) Securities, Futures & Options Inc. (formerly known as
Internationale Nederlanden (U.S.) Derivatives Clearing, Inc. and f/k/a Quantum
Financial Services, Inc.) is registered with the CFTC as a futures commission
merchant and is a member of the NFA in such capacity. As of November 6, 1995,
ING Futures & Options is also registered as a broker-dealer and a member of the
National Association of Securities Dealers, Inc. ING Securities & Options,
which was formed in 1990, operates under the trade names ING Futures & Options
and ING Securities & Options. ING Futures & Options is also a clearing firm of
each of the principal U.S. futures exchanges and the Chicago Board of Options
Exchange. In January of 1994, ING Futures & Options was purchased by
Internationale Nederlanden (U.S.) Capital Holdings Corp. ("ING Capital"), a
wholly-owned subsidiary of Internationale Nederlanden Bank ("ING Bank") in
Amsterdam, one of the largest financial institutions in the world. ING Futures
& Options is an Illinois corporation with a principal place of business at 233
South Wacker Drive, Suite 5200, Chicago, Illinois 60606 and a telephone number
of (312) 496-7000.

At any given time, ING Futures & Options may be involved in legal
actions, some of which may seek significant damages. However, during the five
years preceding the date of this Prospectus, there has been no administrative,
civil or criminal proceeding against ING Futures & Options or any of its
principals -- whether pending, on appeal or concluded -- which is material to a
decision to invest in the Trust in light of all the circumstances.

PAINEWEBBER

PaineWebber's principal office is located at 1200 Harbor Boulevard,
Weehawken, New Jersey 07087; telephone: (201) 902-3000. Paine Webber is a
clearing member of all principal U.S. futures exchanges. It is registered with
the CFTC as a futures commission merchant and is a member of the NFA in such
capacity.

Except as set forth below, neither PaineWebber nor any of its
principals have been involved in any administrative, civil or criminal
proceeding -- whether pending, on appeal or concluded -- within the past five
years that is material to a decision whether to invest in the Trust in light of
all the circumstances.

PaineWebber is involved in a number of proceedings concerning matters
arising in connection with the conduct of its business. Certain actions, in
which compensatory damages of $168 million or more appear to be sought, are
described below. PaineWebber is also involved in numerous proceedings in which
compensatory damages of less than $168 million appear to be sought, or in which
punitive or exemplary damages, together with the apparent compensatory damages
alleged, appear to exceed $168 million. PaineWebber has denied, or believes it
has legitimate defenses and will deny, liability in all significant cases
pending against it, including those described below, and intends to defend
actively each such case.

In March 1992, PaineWebber as well as other individuals and entities
including, INTER ALIA, certain former officers and directors of Northview
Corporation ("Northview"), Calmark Holding Corporation and Calmark Financial
Corporation and their respective officers and directors, were named as
defendants in a purported class action filed by Northview in the Superior Court
of the State of California for the County of Los Angeles.

The complaint sought to set aside as fraudulent and illegal certain
transfers of funds and distributions of cash, and to recover damages allegedly
caused by the defendants for breach of contract, impairment of capital, unjust
enrichment, breach of fiduciary duty, gross negligence and looting of corporate
assets.

As to PaineWebber, plaintiff alleged that in November 1987, Northview
retained PaineWebber to render an opinion respecting the fair market value of
the common stock of Calmark Financial Corporation which Northview was to receive
in exchange for issuing its own stock to Calmark Holding Corporation, the parent
corporation of Calmark Financial Corporation. The complaint asserted that
PaineWebber issued a valuation opinion which allegedly overstated the value of
Calmark Financial Corporation's assets, which enabled the transaction at issue
in the form of a self-tender and merger to go forward. Plaintiff contends that
as a result of PaineWebber's allegedly overstating the value of the assets of
Calmark Financial Corporation, Northview's assets were improperly transferred to
Calmark, whose principals depleted the assets subsequent to the merger. On
March 16, 1990, Northview filed for protection under Chapter XI of the United
States Bankruptcy Code.

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<PAGE>

The complaint sought damages in an amount to be proven at trial, the
imposition of a constructive trust of at least $100 million, punitive damages,
interest, costs and attorneys' fees from all the defendants.

The complaint was amended three times before January 12, 1994. On
February 8, 1994, plaintiff filed a motion for leave to file a Fourth Amended
Complaint, which motion was granted on March 15, 1994. The Fourth Amended
Complaint added a new cause of action for negligent misrepresentation against
PaineWebber and claims for professional negligence and breach of fiduciary duty
against the law firm of Troy & Gould and certain of its principals who acted as
outside counsel to both Northview and Calmark in connection with their merger.

At the time of the filing of the Fourth Amended Complaint, the caption
of said complaint was amended to reflect that Northview Corporation is now known
as Vagabond Inns Inc. and a new party plaintiff, Thomas Sydorick as Trustee for
the Northview/Vagabond Creditor Trust, was added. On July 13, 1994, the trial
court overruled the demurrer filed by PaineWebber to plaintiff's Fourth Amended
Complaint. On August 29, 1994, PaineWebber served its answer to plaintiffs'
latest pleading. The parties are currently engaged in discovery.

On or about June 10, 1991, PaineWebber was served with a "First
Amended Complaint" in an action captioned ROLO V. CITY INVESTING LIQUIDATING
TRUST, ET AL., Civ. Action 90--4420 (D.N.J.), filed on or about May 13, 1991
naming it and other entities and individuals as defendants. The First Amended
Complaint alleges conspiracy and aiding and abetting violations of: (1) one or
more provisions of the Racketeer Influenced and Corrupt Organizations Act
("RICO"); (2) one or more provisions of the Interstate Land Sales Full
Disclosure Act; and (3) the common law, on behalf of all persons (excluding
defendants) who purchased lots and/or houses from General Development
Corporation ("GDC") or one of its affiliates and who are members of an
association known as the North Port Out-of-State Lot Owners Association.

The secondary liability claims in the First Amended Complaint relating
to PaineWebber are premised on allegations that PaineWebber served as (1) the
co-lead underwriter in connection with the April 8, 1988 offering by GDC of
12-7/8% senior subordinated notes pursuant to a Registration Statement and
Prospectus and (2) the underwriter for a 1989 offering of Adjustable Rate
General Development Residential Mortgage Pass-Through Certificates, Series
1989-A, which plaintiffs contend enabled GDC to acquire additional financial
resources for the perpetuation of (and/or aided and abetted) an alleged scheme
to defraud purchasers of GDC lots and/or houses. The First Amended Complaint
requests certain declaratory relief, equitable relief, compensatory damages of
not less than $500 million, punitive damages of not less than three times
compensatory damages, treble damages with respect to the RICO count,
pre-judgment and post-judgment interest on all sums awarded, and attorneys'
fees, costs, disbursement and expert witness fees.

On December 27, 1993, the District Court entered an order dismissing
plaintiffs' First Amended Complaint against PaineWebber and the majority of the
other defendants for failure to state a claim upon which relief can be granted.

On November 8, 1994, the United States Court of Appeals for the Third
Circuit affirmed the District Court's order dismissing this action against
PaineWebber. On November 18, 1994, plaintiffs filed a Petition for Rehearing
and Suggestion for Rehearing EN BANC with the Third Circuit.

On April 4, 1995, the United States Court of Appeals for the Third
Circuit entered an order vacating its order of November 8, 1994, and granted
PLAINTIFFS' application for rehearing and remanded the case to the District
Court for reconsideration. Following the remand by the Third Circuit Court of
Appeals, on August 24, 1995, the District Court entered an order dismissing the
action as to all defendants. On February 20, 1996, plaintiffs filed a notice of
appeal from the District COURT'S order dismissing the action. On September 16,
1996, the Third Circuit Court of Appeals heard arguments on PLAINTIFFS' appeal.
The court has not to yet ruled on the appeal.

In July 1994, Paine Webber , together with numerous unrelated firms,
were named as defendants in a series of purported class action complaints that
have since been consolidated for pre-trial purposes in the United States
District Court for the Southern District of New York under the caption In Re
NASDAQ Market-Maker Antitrust and Securities Litigation. MDL Docket No. 1023.
The refiled consolidated complaint in these actions alleges that the defendant
firms engaged in activities as market makers on the NASDAQ over-the-counter
market that violated the federal antitrust laws. The plaintiffs seek
declaratory and injunctive relief, damages in an amount to be determined and
subject to trebling

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<PAGE>

and additional relief. On December 18, 1995, Paine Webber filed its answer to
PLAINTIFFS' refiled consolidated complaint. The parties are presently engaged
in pre-trial discovery. On November 26, 1996, the Court conditionally certified
a class of retail investors who bought or sold certain NASDAQ securities through
defendants (and in limited cases through non-defendants) during certain periods
of time. The United States District Court for the Southern District of New York
granted PLAINTIFFS' motion for certification of a class that includes
institutional investors, as well as the retail investors previously certified.

PaineWebber and two other broker-dealers were named as defendants in
litigation brought in November 1994 and subsequently styled IN RE MERRILL LYNCH
ET. AL. Securities Litigation Civ. No. 94-5343 (DRD). The amended complaint,
filed in March 1993, alleged that defendants violated federal securities laws in
connection with the execution of orders to buy and sell NASDAQ securities. On
December 13, 1995, the District Court granted DEFENDANTS' motion for summary
judgment. On January 19, 1996, the plaintiffs filed a notice of appeal to the
United States Court of Appeals for the Third Circuit. The appeal was heard on
October 24, 1996, and the Court has not yet ruled on this appeal.

On July 16, 1996, PaineWebber Incorporated entered into a Stipulation
and Order resolving a civil complaint filed by the United States Department of
Justice, alleging that it and other NASDAQ market makers violated Section 1 of
the Sherman Act in connection with certain market making practices. In entering
into the Stipulation and Order, without admitting the allegations, the parties
agreed that the defendants would not engage in certain types of market making
activities and the defendants undertook specified steps to assure compliance
with their agreement. The Stipulation and Order among various firms, including
PaineWebber Incorporated, and the United States Department of Justice resolving
a civil compliant filed by the Department of Justice has been approved by the
United States District Court of the Southern District of New York.

A series of purported class actions concerning PaineWebber
INCORPORATED'S sale and sponsorship of various limited partnership investments
have been filed against PaineWebber and Paine Webber Group Inc. (together
HEREINAFTER, "PAINEWEBBER") among others, by partnership investors since
November 1994. Several such actions (the "FEDERAL Court Limited Partnership
ACTIONS") were filed in the United States District Court for the Southern
District of New York, one was filed in the United States District Court for the
Southern District of Florida and one complaint (the "NEW York Limited
Partnership ACTION") was filed in the Supreme Court of the State of New York.
The time to answer or otherwise move with respect to these complaints has not
yet expired.

The complaints in all of these cases make substantially similar
allegations that, in connection with the sale of interests in approximately 50
limited partnerships between 1980 and 1992, PaineWebber (1) failed to provide
adequate disclosure of the risks involved with each partnership; (2) made false
and misleading representations about the safety of the investments and the
anticipated performance of the partnerships; and (3) marketed the partnerships
to investors for whom such investments were not suitable. The plaintiffs, who
are suing on behalf of all persons who invested in limited partnerships sold by
PaineWebber between 1980 and 1992, also allege that, following the sale of the
partnership units, PaineWebber misrepresented financial information about the
PARTNERSHIPS' value and performance.

The Federal Court Limited Partnership Actions also allege that
PaineWebber violated the Racketeer Influenced and Corrupt Organization Act
("RICO"), and certain of them also claim that PaineWebber violated the federal
securities laws. The plaintiffs seek unspecified damages, including
reimbursement for all sums invested by them in the partnerships, as well as
disgorgement of all fees and other income derived by PaineWebber from the
limited partnerships. In the Federal Court Limited Partnership Actions, the
plaintiffs also seek treble damages under RICO.

In addition, PaineWebber and several of its present or former officers
were sued in two other purported class actions (the "GEODYNE Limited Partnership
ACTIONS") filed in the state court in Harris County, Texas. Those cases, and
WOLFF V. GEODYNE RESOURCES, INC. ET. AL., are similar to the other Limited
Partnership Actions except that the plaintiffs purport to sue only on behalf of
those investors who bought interests in the Geodyne Energy Partnerships, which
were a series of oil and gas partnerships that PaineWebber sold over several
years. The plaintiffs in Geodyne Limited Partnership Actions allege that
PaineWebber committed fraud and misrepresentation, breached its fiduciary
obligations to its investors and brokerage customers, and breached certain
contractual obligations. The complaints seek unspecified damages, including
reimbursement of all sums invested by them in the partnerships, as well as
disgorgement of all fees and

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<PAGE>

other income derived by PaineWebber from the Geodyne partnerships. PaineWebber
has filed an answer denying the allegations in PLAINTIFFS' complaints.

On January 18, 1996, PaineWebber signed and filed with the federal
court a memorandum of understanding with the plaintiffs in both the Federal
Court Limited Partnership Actions and the Geodyne Limited Partnership Actions
outlining the terms under which the parties have agreed to settle these actions.
Pursuant to that memorandum of understanding, PaineWebber irrevocably deposited
$125 million into an escrow fund under the supervision of the United States
District Court for the Southern District of New York to be used to resolve the
Federal Court and Geodyne Limited Partnership Actions in accordance with the
definitive settlement agreement and plan of allocation which the parties
subsequently submitted to the court for its consideration and approval. The
court held hearings on the fairness of the settlement in October and November
1996. On March 20, 1997, the court issued an order approving the settlement. A
notice of appeal to the Federal Court of Appeals has been filed from the
judgment approving the settlement by the same investors who objected in the
District Court.

In addition, three actions were filed against PaineWebber in the
District Court for Brazoria County, Texas, two captioned MALLIA V. PAINEWEBBER,
INC. ("MALLIA I" and "MALLIA II") and one captioned BILLY HAMILTON V.
PAINEWEBBER ("HAMILTON"), relating to PaineWebber's sale and sponsorship of
various limited partnership investments. MALLIA I was originally filed as a
class action, but was later amended to assert claims only on behalf of the named
plaintiffs. The complaints in MALLIA I, MALLIA II, and HAMILTON, collectively,
make allegations on behalf of approximately 65 named plaintiffs that are
substantially similar to those in the Federal Court Limited Partnership Actions
except that the plaintiffs purport to bring only state law claims, principally
for common law fraud, negligent misrepresentation, breach of fiduciary duty,
violations of the Texas Securities Act, and violations of the Texas Deceptive
Trade Practices Act, on behalf of those investors who bought interests in
Pegasus aircraft leasing partnerships and in unspecified other limited
partnerships and investments. The plaintiffs seek unspecified damages. All
three actions have been removed to federal court and the two MALLIA actions have
been transferred to the United States District Court for the Southern District
of New York. The HAMILTON action has been dismissed with the consent of the
parties on the grounds it is duplicative of the two MALLIA actions now before
the federal court in New York.

In April 1995, two investors in the Pegasus limited partnership filed
a purported class action in the Circuit Court of the State of Illinois for Cook
County entitled JACOBSON V. PAINEWEBBER, INC., making allegations substantially
similar to those alleged in the Federal Court Limited Partnership Actions, but
limited in subject matter to the sale of the Pegasus partnerships, and without a
RICO claim. The complaint sought unspecified damages. The plaintiffs in the
JACOBSON case simultaneously remained as participants in the Federal Court
Limited Partnership Actions, and subsequently dismissed the Illinois action but
objected to the proposed settlement of the Federal Court Limited Partnership
Actions. As noted above, on March 20, 1997, the court approved the fairness of
the settlement.

On January 18, 1996, the Securities and Exchange Commission commenced,
and PaineWebber Incorporated simultaneously settled, civil and administrative
proceedings relating to the FIRM'S sale of public proprietary limited
partnerships in the 1980s and early 1990s. Without admitting or denying the
SEC'S allegations or findings, the firm agreed to the entry of an administrative
cease and desist order, created a capped $40 million fund, paid a $5 million
civil penalty, and committed to pay $7.5 million of additional investor claims
relating to the limited partnerships. As part of the settlement, PaineWebber
Incorporated represented that it had previously paid approximately $120 million
to resolve investor claims over a period of several years prior to the SEC
settlement. Additionally, pursuant to the order an independent consultant has
reviewed the FIRM'S policies and procedures concerning retail brokerage
operations and the dissemination of sales and marketing materials, and has made
certain recommendations which the firm is implementing. On the same date,
PaineWebber Incorporated also announced an agreement to settle with the various
state securities regulators pursuant to which PaineWebber Incorporated has made
payments in excess of $4.5 million.

IN ADDITION TO THE FOREGOING PRIVATE LITIGATION, THE FOLLOWING
ADMINISTRATIVE AND EXCHANGE PROCEEDINGS MAY BE CONSIDERED MATERIAL.

In June 1991, the NFA East Regional Business Conduct Committee (the
"Committee") issued a complaint against PaineWebber which alleged that it had
violated NFA By-law 1101 by transacting business with non-members of the NFA who
were required to be registered with the CFTC; further, that it had failed to
observe high standards of commercial

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honor and just and equitable principles of trade, in violation of NFA Compliance
Rule 2-4, in that it allegedly knew or in the exercise of reasonable diligence
should have known that it was transacting customer business with unregistered
persons who were required to be registered but who were not so registered.
Without admitting or denying the allegations contained in the complaint,
PaineWebber submitted an offer of settlement. The settlement was accepted by
the Committee on September 25, 1991, and, in connection therewith, the Committee
imposed a $25,000 fine.

On November 15, 1991, based on a hearing by the New York Stock
Exchange ("NYSE"), Panel Decision 91-92, PaineWebber stipulated that during the
period 1984 to 1987 it violated various NYSE rules and federal regulations
relating to solicitations by its investment executives of inauditable
transactions and margins violations. During the period 1984 to 1988 it violated
NYSE rules relating to annual audits of branch offices written tables of
supervisory responsibility, a system of follow-ups and review respecting sales
practice activities. Finally, during the period from 1987 to 1990, it failed to
report certain reportable events to the NYSE on a timely basis. The NYSE
imposed an $800,000 fine on PaineWebber and required a payment of a contribution
of $100,000 towards fines imposed upon the present and former supervisory
personnel also being fined.

In January 1992, PaineWebber, without admitting any of the allegations
against it and solely for the purpose of settling the proceeding, consented to
the issuance by the SEC of an order finding that in connection with
participation in primary distributions of certain unsecured debt securities
issued by certain government sponsored entities, it violated Securities Exchange
Act of 1934 ("Exchange Act") Rules 17a-3 and 17a-4 by not accurately reflecting
transactions in and customer orders for such securities. The SEC's order and
findings were substantially similar to orders and findings by the SEC and other
federal regulators with respect to 97 other financial intermediaries involving
the same conduct. The SEC ordered PaineWebber to: (1) cease and desist from
further such violations; (2) pay a civil penalty of $100,000; and (3) develop,
implement and maintain policies and procedures reasonably designed to ensure its
future compliance with the recordkeeping rules in connection with such
activities.

In March 1992, in connection with the SEC'S private investigation
into the government securities market, the SEC proposed a settlement of that
part of the inquiry that related to the sale of securities by government
sponsored enterprises ("GSEs"). In an administrative proceeding brought in
January 1992 by the SEC, together with the Comptroller of the Currency and the
Federal Reserve, ninety-eight government securities dealers consented to the
entry of an order relating to the recordkeeping requirements of the federal
securities laws, without admitting or denying any violations but acknowledging
the submission of inaccurate sales information to the GSEs. The dealers paid an
aggregate penalty of $5,165,000 with the approximately forty largest dealers,
including PaineWebber, each paying $100,000. The overall SEC investigation is
still in progress.

In May 1992, the Chicago Mercantile Exchange ("CME") Probable Cause
Committee issued a Notice of Charge against PaineWebber which alleged that it
accepted contemporaneous buy and sell orders for the same customer account in
S&P 500 Index Futures on trade dates October 3, October 30, and December 5,
1990, in violation of CME Rule 433b (Uncommercial Conduct). Without admitting
or denying the allegations, PaineWebber submitted an offer of settlement. The
settlement was accepted by the Floor Practices Committee of the CME on June 28,
1991, and in connection therewith, the Committee imposed a $7,500 fine.

On November 27, 1992, the CFTC filed a five-count administrative
complaint against PaineWebber and a former employee. Simultaneous with the
filing of the complaint, the CFTC accepted an offer of settlement from
PaineWebber. The complaint alleged that PaineWebber violated provisions of the
Commodity Exchange Act and CFTC regulations by failing to immediately take a
written record of orders placed, entering trades without account identification,
failing to properly time-stamp orders, failing to supervise diligently the
handling of CUSTOMERS' commodity futures accounts and failing to maintain and
produce to CFTC staff certain records relating to orders entered. Without
admitting or denying the allegations or the findings contained in the complaint,
PaineWebber consented to the entry of a CFTC order which: (1) found it violated
the provisions of the Commodity Exchange Act and CFTC regulations; (2) directed
it to cease and desist from further violations of those provisions; and (3)
imposed a civil monetary penalty of $150,000.

On December 11, 1992, based on a hearing by the NYSE, Panel Decision
92-187, the NYSE alleged that PaineWebber exercised conversion rights of
customer securities and exercised customers' expiring rights and warrants
without the customers' authorizations, in violation of Exchange Act Rule 17a-3.
Without admitting or denying the allegations, PaineWebber consented to a
censure, $65,000 fine, and undertakings.

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<PAGE>

On February 4, 1994, the Alabama Securities Commission issued
Administrative Order CV-93-0020. PaineWebber consented, without admitting or
denying the allegations to findings of violations of the Alabama Securities Act,
to place on the branch order ticket or other record of transactions before any
order for purchase or sale of securities through a block trading desk is
executed, a name or designation of the accounts for which such orders are to be
executed and the number of shares or contracts ordered for each account for two
years from the date of the Alabama order as to trades placed through its block
trading desk by registered representatives in Birmingham, Alabama. The
registered representatives are required to deliver a copy of the branch order
ticket to the branch office manager or to his or her designee prior to the time
the order is placed with a block desk. The Alabama Securities Commission will
be provided with a copy of a CONSULTANT'S report concerning RESPONDENT'S
policies, practices and procedures prepared pursuant to an SEC order on February
18, 1993 and the affidavit of PaineWebber attesting to the implementation of the
recommendations contained in such CONSULTANT'S report. PaineWebber is required
to certify that all supervisory and managerial personnel in its Birmingham
office have attended the two day seminar required by the SEC order. PaineWebber
was to pay a fine of $87,000 as partial reimbursement for the Alabama Securities
COMMISSION'S cost for examining the matter.

On July 28, 1994, Order File No. AO-94-22, the Missouri Division of
Securities alleged that PaineWebber failed to reasonably supervise a former
investment executive. PaineWebber consented, without admitting or denying the
allegations, to maintain and make available to the Division upon request all
customer or regulatory complaints received by PaineWebber concerning any
employee or agent working in a PaineWebber Missouri branch office or concerning
any security sold by such an employee or agent, to annually provide, for a
period of three years from the date of the order, a notice to all Missouri
residents who open securities accounts with PaineWebber and all Missouri
customers detailing procedures for filing a complaint with PaineWebber or the
Division; and to include, for a period beginning thirty days from the date of
the order and continuing for three years, in all new customer account packages
mailed to Missouri residents from any PaineWebber Missouri branch office,
certain public information pieces prepared by the Division. PaineWebber paid a
$75,000 fine and $25,000 as reimbursement for the costs of the investigation.

On September 27, 1995, in matter number 94-078-S, the State of Vermont
Department of Banking, Insurance and Securities entered an Administrative
Consent Order alleging that between 1984 and 1988 PaineWebber did not reasonably
supervise two former investment executives with respect to certain outside
activities and limited partnership investment recommendations. Without
admitting or denying the allegations, PaineWebber agreed, among other things, to
pay an administrative fine of $100,000.

On or about January 18, 1996, PaineWebber consented, without admitting
or denying the findings therein, to the entry of an Order by the SEC which
imposed a censure, a cease and desist order, a $5 million civil penalty and
various remedial sanctions. The SEC alleged that PaineWebber violated the
antifraud and recordkeeping provisions of the federal securities laws in
connection with the offer and sale of certain limited partnership interests
between 1986 and 1992 and failed reasonably to supervise certain registered
representatives and other employees involved in the sale of those interests.
PaineWebber must comply with its representation that it had paid and will pay a
total of $292.5 million to investors, including a payment of $40 million for a
claims fund.

--------------------------------------

Additional or replacement clearing brokers may be appointed in respect
of the Trust's account in the future.

CONFLICTS OF INTEREST

GENERAL

KENMAR HAS NOT ESTABLISHED ANY FORMAL PROCEDURE TO RESOLVE CONFLICTS
OF INTEREST. CONSEQUENTLY, INVESTORS WILL BE DEPENDENT ON THE GOOD FAITH OF THE
RESPECTIVE PARTIES SUBJECT TO SUCH CONFLICTS TO RESOLVE THEM EQUITABLY.
ALTHOUGH KENMAR ATTEMPTS TO MONITOR THESE CONFLICTS, IT IS EXTREMELY DIFFICULT,
IF NOT IMPOSSIBLE, FOR KENMAR TO ENSURE THAT THESE CONFLICTS DO NOT, IN FACT,
RESULT IN ADVERSE CONSEQUENCES TO THE TRUST.

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PROSPECTIVE INVESTORS SHOULD BE AWARE THAT KENMAR PRESENTLY INTENDS TO
ASSERT THAT UNITHOLDERS HAVE, BY SUBSCRIBING TO THE TRUST, CONSENTED TO THE
FOLLOWING CONFLICTS OF INTEREST IN THE EVENT OF ANY PROCEEDING ALLEGING THAT
SUCH CONFLICTS VIOLATED ANY DUTY OWED BY KENMAR TO INVESTORS.

KENMAR

OTHER MANAGED FUTURES PRODUCTS SPONSORED BY KENMAR AND ITS AFFILIATES

Kenmar sponsors and operates a number of commodity pools, and
affiliates of Kenmar operate, manage and/or sponsor a number of other commodity
pools and managed futures products. Kenmar and its principals and affiliates
have substantial investments in certain of such products. Kenmar may have a
conflict of interest in selecting Advisors for the Trust and for other accounts
sponsored by Kenmar or its affiliates, particularly in cases where an Advisor
is willing to manage only a limited number of additional accounts or where
Kenmar or a principal or an affiliate has financial incentives to favor another
product over the Trust. Kenmar also has a conflict of interest in allocating
its own resources among different clients.

Kenmar has a conflict of interest in allocating assets among the
Advisors in that Kenmar will receive more net benefit from the brokerage
commissions paid by the Trust the less frequently an Advisor trades in the
futures markets (Kenmar being required to pay substantially all of the Trust's
futures trading costs from the flat-rate brokerage commissions received by
Kenmar from the Trust). Kenmar retains any excess fees generated if the actual
brokerage commissions paid by the Trust are less than the flat rate paid to
Kenmar and Kenmar is responsible to the Clearing Brokers for any deficit if the
actual commissions incurred are greater than the flat rate paid to Kenmar.
Kenmar also has a conflict of interest in selecting Advisors due to different
advisory fee structures being more likely than others to result in a greater net
benefit being received by Kenmar from the Trust, and certain Advisors, which it
might otherwise be in the best interests of the Trust to retain, being willing
to accept only certain fee arrangements.

Kenmar has a conflict of interest in "deleveraging" the Trust's market
commitment; I.E. Kenmar has an incentive to "deleverage" the Trust's market
commitment as its brokerage commissions will be calculated on the basis of the
TRUST'S equity and not on the amount of any reduced commitment.

KENMAR'S INCENTIVE TO SELECT MORE SPECULATIVE ADVISORS

Because of Kenmar's potential receipt of the Incentive Fee, Kenmar may
have an incentive to select Advisors that trade in a more "risky" or speculative
manner than Kenmar would otherwise consider to be desirable. Kenmar's Incentive
Fee is based on annual New Overall Appreciation (if any) and could comprise a
significant component of Kenmar's net overall return from the Trust.
Accordingly, Kenmar has a potential incentive to select Advisors that trade in a
more speculative manner because high risk trading strategies have the potential
to lead to high returns. The Incentive Fee permits Kenmar to share in any New
Overall Appreciation but without having to participate in the same manner in any
losses of the Trust.

ONGOING OFFERING OF THE UNITS

Certain material changes in the Advisor group used for the Trust could
result in regulatory delay. Kenmar may have a conflict of interest from time
to time between Kenmar's interest in not delaying the continuous offering of the
Units and in selecting those Advisors that Kenmar believes to be most
advantageous for the Trust.

THE ADVISORS

OTHER CLIENTS AND BUSINESS ACTIVITIES OF THE ADVISORS

The Advisors and their principals each devote their business time to
ventures in addition to managing the Trust's accounts.

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The Advisors may have a conflict of interest in rendering advice to
the Trust because of other accounts managed or traded by them or their
affiliates, including accounts owned by their principals, which may be traded
differently from the Trust's account. The Advisors may have financial
incentives to favor certain accounts over the Trust.

BROKERS AND DEALERS SELECTED BY ADVISORS

Certain of the Advisors have required, as a condition of their
participation in the Trust, that their Trust accounts trade through specific
executing brokers with which such Advisors have ongoing business dealings. Such
Advisors may have a conflict of interest between insisting on the use of such
brokers and using the brokers most advantageous for the Trust.

Certain of the Advisors may execute a number of the trades for their
Trust accounts through affiliated floor brokers or foreign exchange dealers,
which will be compensated for their trading services.

THE CLEARING BROKERS AND EXECUTING BROKERS

Any Clearing Broker, including the initial Clearing Brokers, and any
executing broker selected by an Advisor may act from time to time as a commodity
broker for other accounts with which it is affiliated or in which it or one of
its affiliates has a financial interest. The compensation received by the
Clearing Brokers and executing brokers from such accounts may be more or less
than the compensation received for brokerage and forward trading services
provided to the Trust. In addition, various accounts traded through the
Clearing Brokers and executing brokers (and over which their personnel may have
discretionary trading authority) may take positions in the futures markets
opposite to those of the Trust or may compete with the Trust for the same
positions. The Clearing Brokers and executing brokers may have a conflict of
interest in their execution of trades for the Trust and for other customers.
Kenmar will, however, not retain any clearing broker for the Trust which Kenmar
has reason to believe would knowingly or deliberately favor any other customer
over the Trust with respect to the execution of commodity trades.

THE CLEARING BROKERS AND EXECUTING BROKERS WILL BENEFIT FROM EXECUTING
ORDERS FOR OTHER CLIENTS, WHEREAS THE TRUST MAY BE HARMED TO THE EXTENT THAT THE
CLEARING BROKERS AND EXECUTING BROKERS HAVE FEWER RESOURCES TO ALLOCATE TO THE
TRUST'S ACCOUNT DUE TO THE EXISTENCE OF SUCH OTHER CLIENTS.

Certain officers or employees of the Clearing Brokers and executing
brokers may be members of United States commodities exchanges and/or serve on
the governing bodies and standing committees of such exchanges, their
clearinghouses and/or various other industry organizations. In such
capacities, these officers or employees may have a fiduciary duty to the
exchanges, their clearinghouses and/or such various other industry organizations
which could compel such employees to act in the best interests of these
entities, perhaps to the detriment of the Trust.

SELLING AGENTS

The Selling Agents to be selected for the Trust will receive
substantial initial AND MAY ALSO RECEIVE substantial ongoing "trailing
commissions" in respect of Units sold by them . The individual registered
representatives of the Selling Agents will themselves receive a significant
portion of the compensation paid to the Selling Agents. Consequently, they will
have a conflict of interest both in recommending the purchase of Units by their
clients and in counseling clients as to whether to redeem.

PROPRIETARY TRADING/OTHER CLIENTS

Kenmar, the Advisors, the Clearing Brokers and their respective
principals and affiliates may trade in the commodity markets for their own
accounts and for the accounts of their clients, and in doing so may take
positions opposite to those held by the Trust or may compete with the Trust for
positions in the marketplace. Such trading may create conflicts of interest on
behalf of one or more such persons in respect of their obligations to the Trust.
Records of proprietary trading and trading on behalf of other clients will not
be available for inspection by Unitholders.

Because Kenmar, the Advisors, the Clearing Brokers and their
respective principals and affiliates may

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trade for their own accounts at the same time that they are managing the Trust's
account, prospective investors should be aware that -- as a result of a neutral
allocation system, testing a new trading system, trading their proprietary
accounts more aggressively or other activities not constituting a breach of
fiduciary duty -- such persons may from time to time take positions in their
proprietary accounts which are opposite, or ahead of, the positions taken for
the Trust.

REDEMPTIONS AND DISTRIBUTIONS

THE TRUST IS INTENDED AS A MEDIUM- TO LONG-TERM "BUY AND HOLD"
INVESTMENT. THE TRUST'S OBJECTIVE IS TO ACHIEVE SIGNIFICANT PROFITS OVER TIME
WHILE CONTROLLING THE RISK OF LOSS. HOWEVER, THERE CAN BE NO ASSURANCE THAT THE
TRUST WILL MEET ITS OBJECTIVES, AND UNITHOLDERS MAY EXACERBATE THEIR LOSSES BY
"BUYING AND HOLDING" AN INVESTMENT IN THE UNITS IN THE EVENT THAT THE TRUST
SUSTAINS A PROLONGED PERIOD OF LOSSES.

A Unitholder may cause the Trust to redeem any or all of his Units as
of the close of business on the last business day of any calendar month --
beginning with the end of the sixth month following his purchase of such Units
- -- at Net Asset Value upon ten days' notice to his Selling AGENT'S
representative. Only whole Units may be redeemed except upon redemption of an
investor's entire holding in the Trust. Redemptions may be requested for a
minimum of the lesser of $1,000 or ten (10) Units provided that, for investors
redeeming less than all their Units, such investors' remaining Units must have
an aggregate Net Asset Value of at least $500. Fractional Units may be redeemed
only upon the redemption of an investor's entire interest in the Trust. The Net
Assets of the Trust are its assets less its liabilities determined in accordance
with generally accepted accounting principles. Net Asset Value per Unit is
equal to the Net Assets of the Trust divided by the number of Units outstanding
as of the date of determination.

A Unit that is redeemed on or after the end of the sixth month after
such Unit is sold and on or before the twelfth month after sale will be assessed
a redemption charge of 3% of the Net Asset Value per Unit as of the date of
redemption; a Unit that is redeemed after the beginning of the thirteenth
calendar month and on or before the end of the eighteenth calendar month after
sale will be assessed a redemption charge of 2% of the Net Asset Value per Unit
as of the date of redemption. Such charge is subtracted from the redemption
price of the Unit and paid to Kenmar. For example, Units subscribed for during
OCTOBER 1997 and purchased as of NOVEMBER 1, 1997 will first be redeemable as
of APRIL 30, 1998 and will be subject to a redemption charge through APRIL
30, 1999.

Investors acquiring Units on the same day as or within seventy-five
(75) days after redeeming investments in Kenmar-sponsored investment vehicles
will be deemed to have held such Units for the duration of their participation
in such Kenmar-sponsored investment vehicles for purposes of calculating the
required six-month holding period following purchases of such Units. Such
investor will not be subject to a Kenmar Global Trust redemption charge but will
remain subject to the redemption charge, if any, of the Kenmar-sponsored
investment vehicle from which he redeemed.

In the event that an investor acquires Units at more than one time,
his or her Units are treated on a "first-in, first-out" basis for purposes of
determining whether such Units are redeemable as well as whether redemption
charges apply.

To redeem Units, Unitholders may contact their respective Selling
Agents (in writing if required by such Selling Agent). Selling Agents must
notify the Trust in writing in order to effectuate redemptions of the Units.
However, a Unitholder who no longer has a Selling Agent account must request
redemption in writing (signature guaranteed unless waived by Kenmar) by
corresponding with Kenmar.

Kenmar may declare additional redemption dates, including Special
Redemption Dates which involve a suspension of trading, upon notice to the
Unitholders. See Section 12 of the Declaration of Trust attached hereto as
Exhibit A for a description of Special Redemption Dates.

Redemption proceeds generally will be paid out within fifteen business
days of redemption. However, in special circumstances, including, but not
limited to, default or delay in payments due to the Trust from banks or other
persons, the Trust may in turn delay payment to persons requesting redemption of
Units of the proportionate part of the redemption value of their Units equal to
the proportionate part of the Net Assets of the Trust represented by the sums
that are the subject of such default or delay. No such delays have been imposed
to date by any Kenmar-sponsored fund.

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The Net Asset Value per Unit as of the date of redemption may differ
substantially from the Net Asset Value per Unit as of the date by which
irrevocable notice of redemption must be submitted.

Kenmar has not made, and has no intention of making, any distribution
from the Trust's profits or capital to Unitholders.

UNITHOLDERS NEED NOT REDEEM ALL THEIR UNITS IN ORDER TO REDEEM SOME OF
THEIR UNITS.

THE TRUST AND THE TRUSTEE

THE FOLLOWING SUMMARY DESCRIBES IN BRIEF CERTAIN ASPECTS OF THE
OPERATION OF THE TRUST AND THE TRUSTEE'S AND KENMAR'S RESPECTIVE
RESPONSIBILITIES CONCERNING THE TRUST. PROSPECTIVE INVESTORS SHOULD CAREFULLY
REVIEW THE DECLARATION OF TRUST ATTACHED HERETO AS EXHIBIT A AND CONSULT WITH
THEIR OWN ADVISERS CONCERNING THE IMPLICATIONS TO SUCH
PROSPECTIVE SUBSCRIBERS OF INVESTING IN A DELAWARE BUSINESS TRUST. THE SECTION
REFERENCES BELOW ARE TO SECTIONS IN THE DECLARATION OF TRUST.

PRINCIPAL OFFICE; LOCATION OF RECORDS

The Trust is organized under the Delaware Business Trust Act. The
Trust is administered by Kenmar, whose office is located Two American Lane,
Greenwich, Connecticut 06831-8150 (telephone: (203) 861-1000). The records of
the Trust, including a list of the Unitholders and their addresses, are located
at the foregoing address, and available for inspection and copying (upon payment
of reasonable reproduction costs) by Unitholders or their representatives for
any purposes reasonably related to the Unitholder's interest as a beneficial
owner of the Trust during regular business hours as provided in the Declaration
of Trust. (Section 10). Kenmar will maintain and preserve the books and
records of the Trust for a period of not less than six years.

CERTAIN ASPECTS OF THE TRUST

THE TRUST IS THE FUNCTIONAL EQUIVALENT OF A LIMITED PARTNERSHIP;
PROSPECTIVE INVESTORS SHOULD NOT ANTICIPATE ANY LEGAL OR PRACTICAL PROTECTIONS
UNDER THE DELAWARE BUSINESS TRUST ACT GREATER THAN THOSE AVAILABLE TO LIMITED
PARTNERS OF A LIMITED PARTNERSHIP.

No special custody arrangements are applicable to the Trust that would
not be applicable to a limited partnership, and the existence of a trustee
should not be taken as an indication of any additional level of management or
supervision over the Trust. To the greatest extent permissible under Delaware
law, the Trustee acts in an entirely passive role, delegating all authority over
the operation of the Trust to Kenmar. Kenmar is the functional equivalent of a
sole general partner in a limited partnership. (Sections 5(a), 9 and 18).

Although units of beneficial interest in a trust need not carry any
voting rights, the Declaration of Trust gives Unitholders voting rights
comparable to those typically extended to limited partners in publicly-offered
futures funds. (Section 18).

THE TRUSTEE

Wilmington Trust Company, a Delaware banking corporation, is the sole
Trustee of the Trust. The Trustee's principal offices are located at Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001. The
Trustee is unaffiliated with Kenmar or the Selling Agents. The Trustee's duties
and liabilities with respect to the offering of the Units and the administration
of the Trust are limited to its express obligations under the Declaration of
Trust. See "Exhibit A--Amended and Restated Declaration of Trust."

The rights and duties of the Trustee, Kenmar and the Unitholders are
governed by the provisions of the Delaware Business Trust Act and by the
Declaration of Trust. See "Exhibit A--Amended and Restated Declaration of
Trust".

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The Trustee serves as the Trust's sole trustee in the State of
Delaware. The Trustee will accept service of legal process on the Trust in the
State of Delaware and will make certain filings under the Delaware Business
Trust Act. The Trustee does not owe any other duties to the Trust, Kenmar or
the Unitholders. The Trustee is permitted to resign upon at least 60 days'
notice to the Trust, provided, that any such resignation will not be effective
until a successor Trustee is appointed by Kenmar. The Declaration of Trust
provides that the Trustee is compensated by the Trust, and is indemnified by the
Trust against any expenses it incurs relating to or arising out of the
formation, operation or termination of the Trust or the performance of its
duties pursuant to the Declaration of Trust, except to the extent that such
expenses result from the gross negligence or willful misconduct of the Trustee.
Kenmar has the discretion to replace the Trustee.

Only Kenmar has signed the Registration Statement of which this
Prospectus is a part, and only the assets of the Trust and Kenmar are subject to
issuer liability under the federal securities laws for the information contained
in this Prospectus and under federal and state laws with respect to the issuance
and sale of the Units. Under such laws, neither the Trustee, either in its
capacity as Trustee or in its individual capacity, nor any director, officer or
controlling person of the Trustee is, or has any liability as, the issuer or a
director, officer or controlling person of the issuer of the Units. The
Trustee's liability in connection with the issuance and sale of the Units is
limited solely to the express obligations of the Trustee set forth in the
Declaration of Trust.

Under the Declaration of Trust, the Trustee has delegated to Kenmar
the exclusive management and control of all aspects of the business of the
Trust. The Trustee will have no duty or liability to supervise or monitor the
performance of Kenmar, nor will the Trustee have any liability for the acts or
omissions of Kenmar. In addition, Kenmar has been designated as the "tax
matters partner" of the Trust for purposes of the Internal Revenue Code of 1986,
as amended (the "Code"). The Unitholders have no voice in the operations of the
Trust, other than certain limited voting rights as set forth in the Declaration
of Trust. In the course of its management, Kenmar may, in its sole and absolute
discretion, appoint an affiliate or affiliates of Kenmar as additional managing
owners (except where Kenmar has been notified by the Unitholders that it is to
be replaced as the managing owner) and retain such persons, including affiliates
of Kenmar, as it deems necessary for the efficient operation of the Trust.
(Section 2).

Because the Trustee has delegated substantially all of its authority
over the operation of the Trust to Kenmar, the Trustee itself is not registered
in any capacity with the CFTC.

MANAGEMENT OF TRUST AFFAIRS; VOTING BY UNITHOLDERS

The Unitholders take no part in the management or control, and have no
voice in the operations of the Trust or its business. (Section 9). Unitholders
may, however, remove and replace Kenmar as the managing owner of the Trust, and
may amend the Declaration of Trust, except in certain limited respects, by the
affirmative vote of a majority of the outstanding Units then owned by
Unitholders (as opposed to by Kenmar and its affiliates). The owners of a
majority of the outstanding Units then owned by Unitholders may also compel
dissolution of the Trust. (Section 18(b)). The owners of 10% of the
outstanding Units then owned by Unitholders have the right to bring a matter
before a vote of the Unitholders. (Section 18(c)). Kenmar has no power under
the Declaration of Trust to restrict any of the Unitholders' voting rights.
(Section 18(c)). Any Units purchased by Kenmar or its affiliates, as well as
Kenmar's general liability interest in the Trust, are non-voting. (Section 7).

Kenmar has the right unilaterally to amend the Declaration of Trust
provided that any such amendment is for the benefit of and not adverse to the
Unitholders or the Trustee and also in certain unusual circumstances -- for
example, if doing so is necessary to effect the intent of the Trust's tax
allocations or to comply with certain regulatory requirements. (Section 18(a)).

In the event that Kenmar or the Unitholders vote to amend the
Declaration of Trust in any material respect, the amendment will not become
effective prior to all Unitholders' having an opportunity to redeem their Units.
(Section 18(c)).

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RECOGNITION OF THE TRUST IN CERTAIN STATES

A number of states do not have "business trust" statutes such as that
under which the Trust has been formed in the State of Delaware. It is possible,
although unlikely, that a court in such a state could hold that, due to the
absence of any statutory provision to the contrary in such jurisdiction, the
Unitholders, although entitled under Delaware law to the same limitation on
personal liability as stockholders in a private corporation for profit organized
under the laws of the State of Delaware, are not so entitled in such state. To
protect Unitholders against any loss of limited liability, the Declaration of
Trust provides that no written obligation may be undertaken by the Trust unless
such obligation is explicitly limited so as not to be enforceable against any
Unitholder personally. Furthermore, the Trust itself indemnifies all
Unitholders against any liability that such Unitholders might incur in addition
to that of a beneficial owner. Kenmar is itself generally liable for all
obligations of the Trust and would use its assets to satisfy any such liability
before such liability would be enforced against any Unitholder individually.

POSSIBLE REPAYMENT OF DISTRIBUTIONS RECEIVED BY UNITHOLDERS; INDEMNIFICATION OF
THE TRUST BY UNITHOLDERS

The Units are limited liability investments; investors may not lose
more than the amount that they invest plus any profits recognized on their
investment. (Section 8(e)). However, Unitholders could be required, as a
matter of bankruptcy law, to return to the Trust's estate any distribution they
received at a time when the Trust was in fact insolvent or in violation of the
Declaration of Trust. In addition, although Kenmar is not aware of this
provision ever having been invoked in the case of any public futures fund,
Unitholders agree in the Declaration of Trust that they will indemnify the Trust
for any harm suffered by it as a result of (i) Unitholders' actions unrelated to
the business of the Trust, (ii) transfers of their Units in violation of the
Declaration of Trust, or (iii) taxes imposed on the Trust by the states or
municipalities in which such investors reside (Sections 8(d) and 17(c)).

The foregoing repayment of distributions and indemnity provisions
(other than the provision for Unitholders indemnifying the Trust for taxes
imposed upon it by the state or municipality in which particular Unitholders
reside, which is included only as a formality due to the fact that many states
do not have business trust statutes so that the tax status of the Trust in such
states might, theoretically, be challenged -- although Kenmar is unaware of any
instance in which this has actually occurred) are commonplace in
publicly-offered commodity pools as well as other trusts and limited
partnerships.

TRANSFERS OF UNITS RESTRICTED

A Unitholder may, subject to compliance with applicable federal and
state securities laws, assign his Units upon notice to the Trust and Kenmar. No
assignment will be effective in respect of the Trust or Kenmar until the first
day of the month succeeding the month in which such notice is received. No
assignee may become a substituted Unitholder except with the consent of Kenmar
and upon execution and delivery of an instrument of transfer in form and
substance satisfactory to Kenmar. No Units may be transferred where, after the
transfer, either the transferee or the transferor would hold less than the
minimum number of Units equivalent to an initial minimum purchase, except for
transfers by gift, inheritance, intrafamily transfers, family dissolutions, and
transfers to affiliates (Section 11).

There are, and will be, no certificates for the Units. Any transfers
of Units will be reflected on the books and records of the Trust. Transferors
and transferees of Units will each receive notification from Kenmar to the
effect that such transfers have been duly reflected as notified to Kenmar.
(Section 11).

REPORTS TO UNITHOLDERS

Each month Kenmar reports such information as the CFTC may require to
be given to the participants in "commodity pools" such as the Trust and any such
other information as Kenmar may deem appropriate. There are similarly
distributed to Unitholders, not later than March 30 of each year, certified
financial statements and, not later than March 15 of each year, the tax
information related to the Trust necessary for the preparation of their annual
federal income tax returns. (Section 10).

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Kenmar will notify Unitholders of any change in the fees paid by the
Trust or of any material changes in the basic investment policies or structure
of the Trust. Any such notification shall include a description of Unitholders'
voting rights. (Section 10).

GENERAL

In compliance with the Statement of Policy of the North American
Securities Administrators Association, Inc. relating to the registration of
commodity pool programs under state securities or "Blue Sky" laws, the
Declaration of Trust provides that: (i) the executing and clearing commissions
paid by the Trust shall be reasonable (Section 9), and Kenmar shall include in
the annual reports containing the Trust's certified financial statements
distributed to Unitholders each year the approximate round-turn equivalent rate
paid on the Trust's trades during the preceding year, as well as the actual
amounts paid by Kenmar for the Trust's execution and clearing costs (Section
10); (ii) no rebates or give-ups, among other things, may be received from the
Trust by any of the Selling Agents in respect of sales of the Units, and such
restriction may not be circumvented by any reciprocal business arrangements
among any Selling Agents or any of their respective affiliates and the Trust
(Section 9); (iii) no trading advisor of the Trust (including Kenmar) may
participate directly or indirectly in any per-trade commodity brokerage
commissions generated by the Trust (Section 9); (iv) any agreement between the
Trust and Kenmar or any affiliates of Kenmar must be terminable by the Trust
upon no more than 60 days' written notice (Section 9); (v) the Trust may make no
loans, and the funds of the Trust will not be commingled with the funds of any
other person (deposit of Trust assets with a commodity broker, clearinghouse or
currency dealer does not constitute commingling for these purposes) (Section 9);
and (vi) the Trust will not employ the trading technique commonly known as
"pyramiding."

THE FUTURES AND FORWARD MARKETS

FUTURES AND FORWARD CONTRACTS

Commodity futures contracts in the United States are required to be
made on approved commodity exchanges and call for the future delivery of various
commodities at a specified time and place. These contractual obligations,
depending on whether one is a buyer or a seller, may be satisfied either by
taking or making physical delivery of an approved grade of the particular
commodity (or, in the case of some contracts, by cash settlement) or by making
an offsetting sale or purchase of an equivalent commodity futures contract on
the same exchange prior to the designated date of delivery. Certain futures
contracts call for cash settlement rather than settlement by delivery, and the
Trust will, in any event, offset virtually all of its futures contracts prior to
any actual delivery occurring.

Currencies may be purchased or sold for future delivery through banks
or dealers pursuant to what are commonly referred to as "spot" or "forward"
contracts. Spot contracts settle two days after the trade date; forward
contracts have more delayed settlements. Spot and forward contracts are
commonly referred to collectively as "cash" contracts. In trading cash currency
contracts for the Trust, banks or dealers act as principals and include their
anticipated profit and costs in the prices they quote; such mark-ups are known
as "bid-ask" spreads. Brokerage commissions are typically not charged in cash
trading.

HEDGERS AND SPECULATORS

The two broad classifications of persons who trade in commodity
futures are "hedgers" and "speculators." Commercial interests that market or
process commodities use the futures markets to a significant extent for hedging.
Hedging is a protective procedure designed to minimize losses that may occur
because of price fluctuations, for example, between the time a merchandiser or
processor makes a contract to sell a raw or processed commodity and the time he
must perform the contract. The commodity markets enable the hedger to shift the
risk of price fluctuations to the speculator. The speculator, unlike the
hedger, generally expects neither to deliver nor receive the physical commodity;
rather, the speculator risks his capital with the hope of making profits from
price fluctuations in commodity futures contracts. Speculators, such as the
Trust, rarely take or make delivery of the physical commodity but rather close
out their futures positions by entering into offsetting purchases or sales of
futures contracts. The Trust does not anticipate taking or making delivery of
any physical commodities.

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COMMODITY EXCHANGES

Commodity exchanges provide centralized market facilities for trading
in futures contracts relating to specified commodities. Each of the commodity
exchanges in the United States has an associated "clearinghouse." Once trades
made between members of an exchange have been confirmed, the clearinghouse
becomes substituted for the clearing member acting on behalf of each buyer and
each seller of contracts traded on the exchange and in effect becomes the other
party to the trade. Thereafter, each clearing member firm party to the trade
looks only to the clearinghouse for performance. Clearinghouses do not deal
with customers, but only with member firms, and the "guarantee" of performance
under open positions provided by the clearinghouse does not run to customers.
If a customer's commodity broker becomes bankrupt or insolvent, or otherwise
defaults on such broker's obligations to such customer, the customer in question
may not receive all amounts owing to such customer in respect of his trading,
despite the clearinghouse fully discharging all of its obligations.

The Advisors retained by the Trust trade on a number of foreign
commodity exchanges. Foreign commodity exchanges differ in certain respects
from their United States counterparts and are not subject to regulation by any
United States governmental agency. Accordingly, the protections afforded by
such regulation are not available to the Trust to the extent that it trades on
such exchanges. In contrast to United States exchanges, many foreign exchanges
are "principals' markets," where trades remain the liability of the traders
involved and the exchange or clearinghouse does not become substituted for any
party. Many foreign exchanges also have no position limits, with each dealer
establishing the size of the positions it will permit individual traders to
hold.

To the extent that the Trust engages in transactions on foreign
exchanges, it is subject to the risk of fluctuations in the exchange rate
between the currencies in which the contracts traded on such foreign exchanges
are denominated and United States dollars, as well as the possibility that
exchange controls could be imposed in the future.

SPECULATIVE POSITION AND DAILY PRICE FLUCTUATION LIMITS

The CFTC and the United States exchanges have established limits,
referred to as "speculative position limits," on the maximum net long or net
short position that any person (other than a hedger) may hold or control in
futures contracts or options on futures contracts in particular commodities. A
number of financial markets have replaced "position limits" with "position
accountability," and the cash currency markets are not subject to such limits.
However, speculative position limits continue to be applicable in a number of
important markets. These limits may restrict an Advisor's ability to acquire
positions which such Advisor otherwise would acquire on behalf of the Trust.

Most United States exchanges limit by regulations the maximum
permissible fluctuation in commodity futures contract prices during a single
trading day. These regulations establish what are commonly referred to as
"daily limits." Daily limits restrict the maximum amount by which the price of
a futures contract may vary either up or down from the previous day's settlement
price. Because these limits apply on a day-to-day basis, they do not limit
ultimate losses, but may reduce or eliminate liquidity. Daily limits are
generally not applicable to currency futures or to forward contracts.

MARGINS

Margins represent a security deposit to assure futures traders'
performance under their open positions. When a position is established,
"margin" is deposited and at the close of each trading day "variation margin" is
either credited or debited from a trader's account, representing the unrealized
gain or loss on open positions during the day. If "variation margin" payments
cause a trader's "margin" to fall below "maintenance margin" levels, a "margin
call" will be made requiring the trader to deposit additional margin or have his
position closed out.

FEDERAL INCOME TAX CONSEQUENCES

KENMAR HAS BEEN ADVISED BY ITS COUNSEL, SIDLEY & AUSTIN, THAT, IN ITS
OPINION, THE FOLLOWING SUMMARY CORRECTLY DESCRIBES THE MATERIAL FEDERAL INCOME
TAX CONSEQUENCES, AS OF THE DATE HEREOF, TO THE TRUST AND THE MATERIAL FEDERAL
INCOME TAX CONSEQUENCES, AS OF THE DATE HEREOF, TO A UNITED STATES INDIVIDUAL
TAXPAYER WHO INVESTS IN THE TRUST. THIS SUMMARY IS BASED ON CURRENT STATUTES,
REGULATIONS AND ADMINISTRATIVE RULINGS, ANY OF WHICH COULD BE CHANGED AT ANY

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TIME. THIS SUMMARY DOES NOT ADDRESS THE INCOME TAX CONSEQUENCES TO
NON-INDIVIDUAL TAXPAYERS WHO INVEST IN THE TRUST, WHICH MAY VARY. SUCH
INVESTORS SHOULD CONSULT THEIR OWN TAX ADVISERS.

THE TRUST'S PARTNERSHIP TAX STATUS

Kenmar has been advised by its counsel, Sidley & Austin, that, in its
opinion, the Trust is properly classified as a partnership for federal income
tax purposes; consequently, the Unitholders individually, not the Trust itself,
are subject to tax. Kenmar believes that all of the income expected to be
generated by the Trust will constitute "qualifying income" and has so advised
Sidley & Austin. As a result, Kenmar has been advised by Sidley & Austin that,
in its opinion, the Trust is not subject to tax as a corporation under the
provisions applicable to "publicly traded partnerships."

TAXATION OF UNITHOLDERS ON PROFITS AND LOSSES OF THE TRUST

Each Unitholder is required for federal income tax purposes to take
into account, in his taxable year with which or within which a taxable year of
the Trust ends, his allocable share of all items of Trust income, gain, loss,
deduction and other items for such taxable year of the Trust. A Unitholder must
take such items into account even if the Trust does not make any cash
distributions to such Unitholder.

A Unitholder's share of such items for federal income tax purposes
generally is determined by the allocations made pursuant to the Declaration of
Trust unless such items so allocated do not have "substantial economic effect"
or are not in accordance with the Unitholders' interests in the Trust. Under
the Declaration of Trust, allocations are generally made in proportion to
Unitholders' capital accounts (each Unit sharing equally in the Net Assets of
the Trust), and therefore such allocations should have substantial economic
effect. However, in cases in which a Unitholder redeems part or all of his or
her interest in the Trust, the allocations of capital gain or loss specified in
the Declaration of Trust will not be in proportion to capital accounts. Because
such allocations are consistent with the economic effect of the Declaration of
Trust that bases the amount to be paid to a redeeming Unitholder upon his share
of the realized and unrealized gains and losses at the time his Units are
redeemed, Kenmar intends to file the Trust's tax returns based upon the
allocations specified in the Declaration of Trust. In the opinion of Sidley &
Austin, the foregoing allocations should be upheld if audited by the Internal
Revenue Service (the "IRS"). Nevertheless, a legal opinion is not binding on
the IRS, and it is not certain that such allocation would, in fact, be respected
upon audit. If such allocations were challenged and not sustained, some or all
of a redeeming Unitholder's capital gain or loss that is the subject of such
allocations would be increased (solely for tax purposes).

LIMITATIONS ON DEDUCTIBILITY OF TRUST LOSSES BY UNITHOLDERS

The amount of any Trust loss (including capital loss) that a
Unitholder is entitled to include in his personal income tax return is limited
to his tax basis for his interest in the Trust as of the end of the Trust's
taxable year in which such loss occurred. Generally, a Unitholder's tax basis
for his interest in the Trust is the amount paid for such interest reduced (but
not below zero) by his share of any Trust distributions, realized losses and
expenses and increased by his share of the Trust's realized income, including
gains.

A Unitholder that is subject to the "at risk" limitations (generally,
non-corporate taxpayers and closely-held corporations) may not deduct losses of
the Trust (including capital losses) to the extent that they exceed the amount
he has "at risk" with respect to his interest in the Trust at the end of the
year. The amount that a Unitholder has "at risk" is generally the same as his
adjusted basis as described above, except that it does not include any amount
that he has borrowed on a nonrecourse basis or from a person who has an interest
in the Trust or a person related to such person.

Losses denied under the foregoing basis or "at risk" limitations are
suspended and may be deducted in subsequent years, subject to these and other
applicable limitations.

Because of the limitations imposed upon the deductibility of capital
losses (see "-- Tax on Capital Gains and Losses," below), a Unitholder's
distributive share of any capital losses of the Trust will not materially reduce
the federal income tax payable on his ordinary income (including his allocable
share of the Trust's interest income).

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TREATMENT OF INCOME AND LOSS UNDER THE "PASSIVE ACTIVITY LOSS RULES"

The Code contains rules (the "Passive Activity Loss Rules") designed
to prevent the deduction of losses from "passive activities" against income not
derived from such activities, including income from investment activities not
constituting a trade or business, such as interest and dividends ("Portfolio
Income"), and salary. The trading activities of the Trust do not constitute a
"passive activity," with the result that income derived from the Trust's trading
activities constitutes Portfolio Income or other income not from a passive
activity. Thus, losses resulting from a Unitholder's "passive activities"
cannot be offset against such income, and net losses from Trust operations are
deductible in computing the taxable income of such Unitholder (subject to other
limitations on the deductibility of such losses, in particular the annual
limitation applicable to non-corporate investors that no more than $3,000 of
capital losses can be deducted against ordinary income).

CASH DISTRIBUTIONS AND REDEMPTIONS OF UNITS

Cash received from the Trust by a Unitholder as a distribution with
respect to his Units or in redemption of less than all of his Units generally is
not reportable as taxable income by a Unitholder, except as described below.
Rather, such distribution or withdrawal reduces (but not below zero) the total
tax basis of all of the Units held by the Unitholder after the distribution or
withdrawal. Any cash distribution in excess of a Unitholder's adjusted tax
basis for all of his Units is taxable to him as gain from the sale or exchange
of such Units.

Redemption for cash of the entire interest held by a Unitholder
results in the recognition of gain or loss for federal income tax purposes.
Such gain or loss is equal to the difference, if any, between the amount of the
cash distribution and the Unitholder's adjusted tax basis for his interest.

GAIN OR LOSS ON SECTION 1256 CONTRACTS

Under the "mark-to-market" system of taxing futures and certain option
contracts traded on United States exchanges and certain foreign currency forward
contracts ("Section 1256 Contracts"), any unrealized profit or loss on positions
in such Section 1256 Contracts which are open as of the end of a taxpayer's
fiscal year is treated as if such profit or loss had been realized for tax
purposes as of such time. In general, 60% of the net gain or loss which is
generated as a result of the "mark-to-market" system is treated as long-term
capital gain or loss, and the remaining 40% of such net gain or loss is treated
as short-term capital gain or loss.

GAIN OR LOSS ON NON-SECTION 1256 CONTRACTS

Except as described below with respect to Section 988 transactions
entered into by a qualified fund, gain or loss with respect to contracts that
are non-Section 1256 Contracts is taken into account for tax purposes only when
realized.

Foreign currency transactions ("Section 988 transactions") include
entering into or acquiring any forward contract, futures contract or similar
instrument if the amount paid or received is denominated in terms of a foreign
currency other than the taxpayer's functional currency or if the underlying
property to which the contract or instrument ultimately relates is a foreign
currency other than the taxpayer's functional currency. In general, foreign
currency gain or loss on Section 988 transactions is treated as ordinary income
or loss unless the Trust is qualified to make an election (and so elects) to
treat any such foreign currency gain or loss as capital gain or loss.

TAX ON CAPITAL GAINS AND LOSSES

On August 5, 1997, the Taxpayer Relief Act of 1997 (the "1997 Act")
was enacted which made substantial changes to the taxation of capital gains for
non-corporate taxpayers. For sales of capital assets occurring after May 6,
1997, the maximum tax rate for non-corporate taxpayers on net adjusted capital
gains (as defined below) is 20%. Under the 1997 Act, capital assets held for
more than 18 months are eligible for the 20% tax rate. In addition, 60% of
the gain on Section 1256 Contracts is also eligible for the 20% tax rate,
regardless of the period for which such contract is held. Net gain on capital
assets held more than 12 months and not more than 18 months ("mid-term gain") is
subject to a maximum tax rate of 28%. Net short-term capital gain or loss
(i.e., net gain or loss on assets held for 12 months or less, including 40% of
gain or loss on Section 1256 Contracts) is subject to tax at the same rates as
ordinary income. Net adjusted capital gain

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is the excess of net long-term capital gain over net short-term capital loss
reduced by mid-term gain, if any. In addition, the 1997 Act provides a
temporary reduction in the tax rate from 28% to 20% for net gains on capital
assets held more than one year that were sold after May 6, 1997 and before July
29, 1997. Net capital losses are deductible by non-corporate taxpayers only to
the extent of capital gains for the taxable year plus $3,000.

If a non-corporate taxpayer incurs a net capital loss for a year, the
portion thereof, if any, which consists of a net loss on Section 1256 Contracts
may, at the election of the taxpayer, be carried back three years. Losses so
carried back may be deducted only against net capital gain for such year to the
extent that such gain includes gains on Section 1256 Contracts. Losses so
carried back are deemed to consist of 60% long-term capital loss and 40%
short-term capital loss (see "-- Gain or Loss on Section 1256 Contracts,"
above). To the extent that such losses are not used to offset gains on
Section 1256 Contracts in a carryback year, they carry forward indefinitely as
losses on Section 1256 Contracts in future years.

LIMITED DEDUCTION FOR CERTAIN EXPENSES

The Code provides that, for non-corporate taxpayers who itemize
deductions when computing taxable income, expenses of producing income,
including "investment advisory fees," are aggregated with unreimbursed employee
business expenses, other expenses of producing income and certain other
deductions (collectively, "Aggregate Investment Expenses"), and that the
aggregate amount of such expenses is deductible only to the extent that such
amount exceeds 2% of a non-corporate taxpayer's adjusted gross income (the "2%
floor"). Aggregate Investment Expenses in excess of the 2% floor, when combined
with a taxpayer's deductions for certain items, are subject to a reduction equal
to, generally, 3% of the taxpayer's adjusted gross income in excess of a certain
threshold amount (the "3% phase-out"). Moreover, such Aggregate Investment
Expenses are miscellaneous itemized deductions which are not deductible by a
non-corporate taxpayer in calculating its alternative minimum tax liability.

Kenmar will -- barring administrative, regulatory or statutory
clarification to the contrary -- treat the Profit Shares and Incentive Fee, as
well as other ordinary expenses of the Trust, as ordinary business deductions
not subject to the 2% floor. It is the standard practice in the managed futures
industry to treat such charges as not being subject to the 2% floor, and Kenmar
intends, barring contrary clarification by statute, regulation or administrative
statement, to continue to treat them as not being so. Further, based upon the
trading activities of the Trust described in this Prospectus, in the opinion of
Sidley & Austin, the Trust should be treated as engaged in the conduct of a
trade or business for federal income tax purposes, and, as a result, the
ordinary and necessary business expenses incurred by the Trust in conducting its
commodity futures trading business should not be subject to the foregoing 2%
floor. However, the IRS could contend that some or all of these charges should
be characterized as "investment advisory fees" or brokerage commissions incurred
by the Trust. To the extent the characterization of these payments as brokerage
commissions were to be sustained, the amounts recharacterized would reduce the
amount of capital gain (or increase the amount of capital loss) realized with
respect to the Trust's trading activities, rather than the Unitholders' ordinary
income. To the extent the characterization of these payments as investment
advisory expenses were to be sustained, each non-corporate Unitholder's PRO RATA
share of the amounts so characterized would be deductible only to the extent
that such non-corporate Unitholder's Aggregate Investment Expenses exceeded the
2% floor and, when combined with certain other itemized deductions, exceeded the
3% phase-out. In addition, each non-corporate Unitholder's distributive share
of income from the Trust would be increased (solely for tax purposes) by such
Unitholder's PRO RATA share of the amounts so recharacterized.

INTEREST INCOME

Interest received by the Trust is taxed as ordinary income.

The Trust's trading generates almost exclusively capital gain or loss.
Capital losses can be deducted against ordinary income, in the case of
non-corporate taxpayers, only to the extent of $3,000 per year. Accordingly,
the Trust could incur significant capital losses but an investor, nevertheless,
could be required to pay substantial taxes in respect of such investor's
allocable share of the Trust's interest income and other ordinary income. See
"Risk Factor -- (20) Taxation of Interest Income Irrespective of Trading Losses"
at page 12.

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SYNDICATION FEES

Neither the Trust nor any Unitholder is entitled to any deduction for
syndication expenses, nor can these expenses be amortized by the Trust or any
Unitholder even though the payment of such expenses reduces Net Asset Value.

The IRS could take the position that a portion of the brokerage
commissions paid by the Trust to Kenmar constitutes non-deductible syndication
expenses.

LIMITATION ON DEDUCTIBILITY OF INTEREST ON INVESTMENT INDEBTEDNESS

Interest paid or accrued on indebtedness properly allocable to
property held for investment constitutes "investment interest." Interest
expense incurred by a Unitholder to acquire or carry his Units (as well as other
investments) constitutes "investment interest." Such interest is generally
deductible by non-corporate taxpayers only to the extent that it does not exceed
net investment income (that is, generally, the excess of (i) gross income from
interest, dividends, rents and royalties, which would include a Unitholder's
share of the Trust's interest income, and (ii) certain gains from the
disposition of investment property, over the expenses directly connected with
the production of such investment income). Any investment interest expense
disallowed as a deduction in a taxable year solely by reason of the above
limitation is treated as investment interest paid or accrued in the succeeding
taxable year. A non-corporate taxpayer's net capital gain from the disposition
of investment property is included in clause (ii) of the second preceding
sentence only to the extent such taxpayer elects to make a corresponding
reduction in the amount of net capital gain that is subject to tax at the lower
capital gain rates described above. (See "-- Tax on Capital Gains and Losses,"
above.)

"UNRELATED BUSINESS TAXABLE INCOME"

In the opinion of Sidley Austin, income earned by the Trust will not
constitute "unrelated business taxable income" under Section 511 of the Code to
employee benefit plans and other tax-exempt entities which purchase Units,
provided that the Units held by such plans and entities are not "debt-financed"
within the meaning of Section 514 of the Code. Kenmar intends that the Trust
will continue to trade so as not to generate "unrelated business taxable
income."

IRS AUDITS OF THE TRUST AND ITS UNITHOLDERS

The tax treatment of Trust-related items is determined at the Trust
level rather than at the Unitholder level. Kenmar acts as "tax matters partner"
with the authority to determine the Trust's responses to an audit, except that
Kenmar does not have the authority to settle tax controversies on behalf of any
Unitholder who files a statement with the IRS stating that Kenmar has no
authority to settle Trust tax controversies on such Unitholder's behalf. The
limitations period for assessment of deficiencies and claims for refunds with
respect to items related to the Trust is three years after the Trust's return
for the taxable year in question is filed, but Kenmar has the authority to, and
may, extend such period with respect to all Unitholders.

If an audit results in an adjustment, all Unitholders may be required
to pay additional taxes, plus interest, and, possibly, tax penalties and
additions to tax. There can be no assurance that the Trust's or a Unitholder's
tax return will not be audited by the IRS or that no adjustments to such returns
will be made as a result of such an audit.

STATE AND OTHER TAXES

In addition to the federal income tax consequences described above,
the Trust and the Unitholders may be subject to various state and other taxes.
Certain of such taxes could, if applicable, have a significant effect on the
amount of tax payable in respect of an investment in the Trust.

--------------------------------

THE FOREGOING DISCUSSION IS NOT INTENDED AS A SUBSTITUTE FOR CAREFUL
TAX PLANNING, PARTICULARLY SINCE CERTAIN OF THE INCOME TAX CONSEQUENCES OF AN
INVESTMENT IN THE TRUST MAY NOT BE THE SAME FOR ALL TAXPAYERS. ACCORDINGLY,
PROSPECTIVE INVESTORS IN THE TRUST ARE URGED TO CONSULT THEIR TAX ADVISERS WITH
SPECIFIC REFERENCE TO THEIR

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OWN TAX SITUATION UNDER FEDERAL LAW AND THE PROVISIONS OF APPLICABLE STATE AND
OTHER LAWS BEFORE DETERMINING WHETHER TO SUBSCRIBE FOR UNITS.

PURCHASES BY EMPLOYEE BENEFIT PLANS

ALTHOUGH THERE CAN BE NO ASSURANCE THAT AN INVESTMENT IN THE TRUST, OR
ANY OTHER MANAGED FUTURES PRODUCT, WILL ACHIEVE THE INVESTMENT OBJECTIVES OF AN
EMPLOYEE BENEFIT PLAN IN MAKING SUCH INVESTMENT, FUTURES INVESTMENTS HAVE
CERTAIN FEATURES WHICH MAY BE OF INTEREST TO SUCH A PLAN. FOR EXAMPLE, THE
FUTURES MARKETS ARE ONE OF THE FEW INVESTMENT FIELDS IN WHICH EMPLOYEE BENEFIT
PLANS CAN PARTICIPATE IN LEVERAGED STRATEGIES WITHOUT BEING REQUIRED TO PAY TAX
ON "UNRELATED BUSINESS TAXABLE INCOME." SEE "FEDERAL INCOME TAX CONSEQUENCES --
'UNRELATED BUSINESS TAXABLE INCOME'" AT PAGE 44. IN ADDITION, BECAUSE THEY ARE
NOT TAXPAYING ENTITIES, EMPLOYEE BENEFIT PLANS ARE NOT SUBJECT TO PAYING ANNUAL
TAX ON THEIR PROFITS (IF ANY) FROM THE TRUST.

AS A MATTER OF POLICY, KENMAR WILL ATTEMPT TO LIMIT SUBSCRIPTIONS TO
THE TRUST FROM ANY EMPLOYEE BENEFIT PLAN TO NO MORE THAN 10% OF THE VALUE OF THE
READILY MARKETABLE ASSETS OF SUCH PLAN (IRRESPECTIVE OF THE NET WORTH OF THE
BENEFICIARY OR BENEFICIARIES OF SUCH PLANS).

GENERAL

The following section sets forth certain consequences under the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and the
Code, which a fiduciary of an "employee benefit plan" as defined in and subject
to ERISA or of a "plan" as defined in Section 4975 of the Code who has
investment discretion should consider before deciding to invest the plan's
assets in the Trust (such "employee benefit plans" and "plans" being referred to
herein as "Plans," and such fiduciaries with investment discretion being
referred to herein as "Plan Fiduciaries"). The following summary is not
intended to be complete, but only to address certain questions under ERISA and
the Code which are likely to be raised by the Plan Fiduciary's own counsel.

In general, the terms "employee benefit plan" as defined in ERISA and
"plan" as defined in Section 4975 of the Code together refer to any plan or
account of various types which provide retirement benefits or welfare benefits
to an individual or to an employer's employees and their beneficiaries. Such
plans and accounts include, but are not limited to, corporate pension and profit
sharing plans, "simplified employee pension plans," KEOGH plans for
self-employed individuals (including partners), individual retirement accounts
described in Section 408 of the Code and medical plans.

Each Plan Fiduciary must give appropriate consideration to the facts
and circumstances that are relevant to an investment in the Trust, including the
role that an investment in the Trust would play in the Plan's overall investment
portfolio. Each Plan Fiduciary, before deciding to invest in the Trust, must be
satisfied that such investment is prudent for the Plan, that the investments of
the Plan, including the investment in the Trust, are diversified so as to
minimize the risk of large losses and that an investment in the Trust complies
with the Plan and related trust.

EACH PLAN FIDUCIARY CONSIDERING ACQUIRING UNITS MUST CONSULT
WITH ITS OWN LEGAL AND TAX ADVISERS BEFORE DOING SO. AN
INVESTMENT IN THE TRUST IS SPECULATIVE AND INVOLVES
A HIGH DEGREE OF RISK. THE TRUST IS NOT INTENDED
AS A COMPLETE INVESTMENT PROGRAM.

"PLAN ASSETS"

A regulation issued under ERISA (the "ERISA Regulation") contains
rules for determining when an investment by a Plan in an equity interest of an
entity will result in the underlying assets of such entity being considered to
constitute assets of the Plan for purposes of ERISA and Section 4975 of the Code
(I.E., "plan assets"). Those rules provide that assets of an entity will not be
considered assets of a Plan which purchases an equity interest in the entity if
certain

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exceptions apply, including an exception applicable if the equity interest
purchased is a "publicly-offered security" (the "Publicly-Offered Security
Exception").

The Publicly-Offered Security Exception applies if the equity interest
is a security that is (1) "freely transferable," (2) part of a class of
securities that is "widely held" and (3) either (a) part of a class of
securities registered under Section 12(b) or 12(g) of the Securities Exchange
Act of 1934, or (b) sold to the Plan as part of a public offering pursuant to an
effective registration statement under the Securities Act of 1933 and the class
of which such security is a part is registered under the Securities Exchange Act
of 1934 within 120 days (or such later time as may be allowed by the SEC) after
the end of the fiscal year of the issuer in which the offering of such security
occurred. The ERISA Regulation states that the determination of whether a
security is "freely transferable" is to be made based on all relevant facts and
circumstances. The ERISA Regulation specifies that, in the case of a security
that is part of an offering in which the minimum investment is $10,000 or less,
the following requirements, alone or in combination, ordinarily will not affect
a finding that the security is freely transferable: (i) a requirement that no
transfer or assignment of the security or rights in respect thereof be made that
would violate any federal or state law; (ii) a requirement that no transfer or
assignment be made without advance written notice given to the entity that
issued the security; and (iii) any restriction on substitution of an assignee as
"a limited partner of a partnership, including a general partner consent
requirement, provided that the economic benefits of ownership of the assignor
may be transferred or assigned without regard to such restriction or consent"
(other than compliance with any of the foregoing restrictions). Under the ERISA
Regulation, a class of securities is "widely held" only if it is of a class of
securities owned by 100 or more investors independent of the issuer and of each
other. A class of securities will not fail to be widely held solely because
subsequent to the initial offering the number of independent investors falls
below 100 as a result of events beyond the issuer's control.

Kenmar expects that the Publicly Offered Security Exception will apply
with respect to the Units. First, the Units are being sold only as part of a
public offering pursuant to an effective registration statement under the
Securities Act of 1933, and the Units will be registered under the Securities
Exchange Act of 1934 within 120 days (or such later time as may be allowed by
the SEC after the end of the fiscal year of the Trust in which the offering of
Units occurred.

Second, it appears that the Units are freely transferable because the
minimum investment is not more than $5,000 and Unitholders may assign their
economic interests in the Trust by giving written notice to Kenmar, provided
such assignment would not violate any federal or state securities laws and would
not adversely affect the tax status of the Trust. As described in the second
preceding paragraph, the ERISA Regulation provides that if a security is part of
an offering in which the minimum investment is $10,000 or less, a restriction on
substitution of a limited partner of a partnership, including a general partner
consent requirement, will not prevent a finding that the security is freely
transferable, provided that the economic benefits of ownership can be
transferred without such consent. Although this provision, read literally,
applies only to partnerships, Kenmar believes that because the determination as
to whether a security is freely transferable is based on the facts and
circumstances, the fact that the Units, which are issued by a trust rather than
a partnership, have an identical restriction should not affect a finding that
the Units are freely transferable.

Third, Kenmar expects that immediately after the initial offering, the
Units will be owned by at least 100 investors independent of the Trust and of
each other.

INELIGIBLE PURCHASERS

Units may not be purchased with the assets of a Plan if Kenmar, any of
the Advisors, the Selling Agents, any Clearing Broker, the Escrow Agent, any of
the brokers through which any Advisor requires the Trust to trade, the Trust or
any of their respective affiliates, any of their respective employees or any
employees of their respective affiliates: (a) has investment discretion with
respect to the investment of such Plan assets; (b) has authority or
responsibility to give or regularly gives investment advice with respect to such
Plan assets, for a fee, and pursuant to an agreement or understanding that such
advice will serve as a primary basis for investment decisions with respect to
such Plan assets and that such advice will be based on the particular investment
needs of the Plan; or (c) is an employer maintaining or contributing to such
Plan. A party that is described in clause (a) or (b) of the preceding sentence
is a fiduciary under ERISA and the Code with respect to the Plan, and any such
purchase might result in a "prohibited transaction" under ERISA and the Code.

Except as otherwise set forth, the foregoing statements regarding the
consequences under ERISA and the Code of an investment in the Trust are based on
the provisions of the Code and ERISA as currently in effect, and the existing

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<PAGE>

administrative and judicial interpretations thereunder. No assurance can be
given that administrative, judicial or legislative changes will not occur that
will not make the foregoing statements incorrect or incomplete.

ACCEPTANCE OF SUBSCRIPTIONS ON BEHALF OF PLANS IS IN NO RESPECT A
REPRESENTATION BY THE TRUST, KENMAR, ANY ADVISOR, ANY CLEARING BROKER, THE
SELLING AGENTS OR ANY OTHER PARTY THAT THIS INVESTMENT MEETS SOME OR ALL OF THE
RELEVANT LEGAL REQUIREMENTS WITH RESPECT TO INVESTMENTS BY ANY PARTICULAR PLAN
OR THAT THIS INVESTMENT IS APPROPRIATE FOR ANY PARTICULAR PLAN. THE PERSON WITH
INVESTMENT DISCRETION SHOULD CONSULT WITH HIS OR HER ATTORNEY AND FINANCIAL
ADVISERS AS TO THE PROPRIETY OF AN INVESTMENT IN THE UNITS IN LIGHT OF THE
CIRCUMSTANCES OF THE PARTICULAR PLAN AND CURRENT TAX LAW.

PLAN OF DISTRIBUTION

SUBSCRIPTION PROCEDURE

Units are continuously being offered to the public -- on a
"best-efforts" basis -- at their month-end Net Asset Value per Unit. The
minimum investment is 50 Units, or $5,000 if less, except for (i) trustees or
custodians of eligible employee benefit plans and individual retirement accounts
and (ii) existing Unitholders subscribing for additional Units, where the
minimum investment is 20 Units (or, if less, $2,000). Investments in excess of
such minimums are permitted in $100 increments.

To purchase Units, an investor must complete, execute and deliver a
copy of the Subscription Agreement and Power of Attorney Signature Pages.
EXISTING INVESTORS IN THE TRUST MUST EXECUTE A NEW SUBSCRIPTION AGREEMENT AND
POWER OF ATTORNEY SIGNATURE PAGES AND VERIFY THEIR CONTINUED SUITABILITY TO MAKE
ADDITIONAL INVESTMENTS AND MUST HAVE RECEIVED A CURRENT PROSPECTUS FOR THE
TRUST. Subscription payments may be made either by check or by authorizing a
Selling Agent to debit a subscriber's customer securities account for the amount
of his or her subscription. When a subscriber authorizes such a debit (which
authorization is given in the Subscription Agreement and Power of Attorney), the
subscriber is required to have the amount of his or her subscription payment on
deposit in his or her account as of the settlement date specified by the
relevant Selling Agent -- generally, the fifth business day after the date of
purchase (the first day of the month immediately following the month during
which a subscription is accepted) if the Subscription Agreement and Power of
Attorney is executed and delivered at least five business days prior to the end
of such month.

The Units are sold when, as and if subscriptions therefor are accepted
by Kenmar, subject to the satisfaction of certain conditions set forth in the
Selling Agreement and to the approval by counsel of certain legal matters.

There is no minimum number of Units which must be sold as of the
beginning of a given month for any Units to be sold at such time.

SUBSCRIBERS' REPRESENTATIONS AND WARRANTIES

By executing a Subscription Agreement and Power of Attorney Signature
Page, each subscriber is representing and warranting, among other things, that:
(i) the subscriber is of legal age to execute and deliver such Subscription
Agreement and Power of Attorney and has full power and authority to do so;
(ii) the subscriber has read and understands Exhibit B -- Subscription
Requirements to this Prospectus and meets or exceeds the applicable suitability
criteria of net worth and annual income set forth therein; and (iii) the
subscriber has received a copy of this Prospectus. These representations and
warranties might be used by Kenmar or others against a subscriber in the event
that the subscriber were to take a position inconsistent therewith.

While the foregoing representations and warranties are binding on
subscribers, Kenmar believes that to a large extent such representations and
warranties would be implied from the fact that an investor has subscribed for
Units. NONETHELESS, ANY SUBSCRIBER WHO IS NOT PREPARED TO GIVE SUCH
REPRESENTATIONS AND WARRANTIES, AND TO BE BOUND BY THEM, SHOULD NOT INVEST IN
THE UNITS.

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<PAGE>

SELLING AGENTS' COMPENSATION

PaineWebber has been selected as a Selling Agent for the Trust.
PaineWebber and the TRUST'S other Selling Agents (collectively, the "Selling
Agents") will receive an upfront selling commission equal to 5% of the purchase
price per Unit at the time that such Unit is sold, and their representatives who
sell Units shall receive a portion of such 5% commission. Notwithstanding the
foregoing, no Selling Agent shall receive upfront selling commissions to the
extent investors have acquired Units on the same day as or within seventy-five
(75) days after redeeming investments in Kenmar-sponsored limited partnerships.
Beginning with the thirteenth month (immediately to the extent investors have
acquired Units on the same day as or within seventy-five (75) days after
redeeming investments in Kenmar-sponsored investment vehicles) after the
subscription proceeds of a particular Unit are invested in the Trust (I.E., the
first day of the month immediately following the month during which the
subscription for such Unit is accepted), the Selling Agent who sold such Unit
will begin to receive ongoing "trailing commissions" (payable quarterly) to be
accrued monthly at 0.2917 of 1% (a 3.5% annual rate) of the beginning of month
Net Asset Value of such Unit -- PROVIDED, that CFTC-qualified registered
representatives of the Selling Agent have satisfied applicable proficiency
requirements and agree to perform certain ongoing services with respect to such
Units. Such ongoing "trailing commissions," once begun, will continue for as
long as such Unit remains outstanding. If there is no CFTC-qualified registered
representative to perform ONGOING services, then the Selling Agent will be paid
installment selling commissions that may not exceed a lifetime total of 4.5% of
the initial subscription price of the Units in question (9.5% TO THE EXTENT
INVESTORS HAVE ACQUIRED UNITS ON THE SAME DAY AS OR WITHIN SEVENTY-FIVE (75)
DAYS AFTER REDEEMING INVESTMENTS IN KENMAR-SPONSORED INVESTMENT VEHICLES).
Selling Agents will pay a portion of such commissions to their eligible
representatives. No Selling Agent will receive upfront selling commissions,
trailing commissions or on-going selling commissions which exceed the amounts
set forth above.

Kenmar, not the Trust, pays all upfront selling compensation and
"trailing" commissions. Selling Agents will pass on to their registered
representatives a portion of the foregoing upfront selling compensation and
"trailing commissions," after deduction of "due diligence" and administrative
expenses incurred in connection with this offering, in accordance with such
Selling Agents' standard compensation arrangements.

In the Selling Agreement, each Advisor and Kenmar have agreed to
indemnify the Selling Agents against certain liabilities that the Selling Agents
may incur in connection with the offering and sale of the Units, including
liabilities under the Securities Act of 1933 and the Commodity Exchange Act.

LEGAL MATTERS

Sidley & Austin has passed upon legal matters for Kenmar in connection
with the Units being offered hereby. In doing so, Sidley & Austin has relied as
to matters of Delaware law upon the opinion of Richards, Layton & Finger,
Wilmington, Delaware. Sidley & Austin also advises Kenmar with respect to its
responsibilities as managing owner of, and with respect to matters relating to,
the Trust. Sidley & Austin has reviewed the statements under "Federal Income
Tax Consequences." Sidley & Austin has not represented, nor will it represent,
either the Trust or the Unitholders in matters relating to the Trust.

EXPERTS

Arthur F. Bell, Jr. & Associates, L.L.C., independent auditors, have
audited the statement of financial condition of Kenmar Advisory Corp. as of
September 30, 1996 included in this Prospectus. Such financial statement is
included herein in reliance on the report of Arthur F. Bell, Jr. & Associates,
L.L.C., independent auditors, given upon the authority of that firm as an expert
in accounting and auditing.

Arthur F. Bell, Jr. & Associates, L.L.C. have been selected as the
Trust's independent auditors. The statement of financial condition of the Trust
as of December 31, 1996 included in this Prospectus has been audited by Arthur
F. Bell, Jr. & Associates, L.L.C., independent auditors, as stated in their
report appearing herein, and has been so included in reliance upon such report
given upon the authority of that firm as experts in auditing and accounting.

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<PAGE>

ADDITIONAL INFORMATION

This Prospectus constitutes part of the Registration Statement filed
by the Trust with the SEC in Washington, D.C. This Prospectus does not contain
all of the information set forth in such Registration Statement, certain
portions of which have been omitted pursuant to the rules and regulations of the
SEC, including, without limitation, certain exhibits thereto (for example, the
forms of the Selling Agreement, the Advisory Agreements, and the Customer
Agreement). The descriptions contained herein of agreements included as
exhibits to the Registration Statement are necessarily summaries; the exhibits
themselves may be inspected without charge at the public reference facilities
maintained by the SEC in Washington, D.C., and copies of all or part thereof may
be obtained from the Commission upon payment of the prescribed fees. The SEC
maintains a Web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the SEC.
The address of such site is http://www.sec.gov.

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<PAGE>

RECENT FINANCIAL INFORMATION AND ANNUAL REPORTS

Pursuant to applicable CFTC regulations, prospective subscribers must
receive recent financial information (current within 60 calendar days) relating
to the Trust, as well as its most recent Annual Report (due by March 30 of each
year, in respect of the prior year), together with this Prospectus, unless the
material that would otherwise be included in such Report or information has been
otherwise included herein.

PERFORMANCE OF KENMAR GLOBAL TRUST

The performance of the Trust is dependent upon the performance of its
Advisors. The Advisors' results are affected by general market conditions as
well as numerous other factors. Because the Advisors' strategies are
proprietary and confidential, it is difficult to provide any meaningful
description of the Trust's operations since the inception of trading operations
(May 22, 1997) other than simply by presenting its performance record. PAST
PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. The performance
information set forth below is current as of June 30, 1997.

SUMMARY PERFORMANCE INFORMATION

TYPE OF FUND: MULTI-advisor; publicly-offered
INCEPTION OF TRADING: May 1997
AGGREGATE SUBSCRIPTIONS: $8,472,000
CURRENT CAPITALIZATION: $8,275,357
CURRENT NET ASSET VALUE PER UNIT: $ 97.40
LARGEST MONTHLY DRAWDOWN: (2.30)% (6/97)
LARGEST PEAK-TO-VALLEY DRAWDOWN: (2.60)% (5/97-6/97)

MONTHLY/ANNUAL PERFORMANCE INFORMATION

=====================================
Month 1997(%)
-------------------------------------
January --
-------------------------------------
February --
-------------------------------------
March --
-------------------------------------
April --
-------------------------------------
May (9 DAYS) (0.30)
-------------------------------------
June (2.30)
-------------------------------------
July
-------------------------------------
August
-------------------------------------
September
-------------------------------------
October
-------------------------------------
November
-------------------------------------
December
-------------------------------------
Compound Rate of Return (2.60)
(2 months)
=====================================

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<PAGE>

NOTES TO PERFORMANCE INFORMATION

In reviewing the foregoing description of the Trust's performance,
prospective investors should understand that such performance is "net" of all
fees and charges and includes interest income. The Trust's fees and charges are
more fully described under "Charges."

In addition, the following terms used in describing the Trust's
performance are defined as follows:

"Drawdown" means losses experienced by the Trust over a specified
period.

"Largest peak-to-valley drawdown" means the greatest percentage
decline from any month-end Net Asset Value per Unit, due to overall
loss sustained by the Trust during any period, which occurs without
such month-end Net Asset Value per Unit being equaled or exceeded as
of a subsequent month-end. In dollar terms, for example, if the Net
Asset Value per Unit declined by $1 in each of January and February,
increased by $1 in March and declined again by $2 in April, a
"peak-to-valley drawdown" analysis conducted as of the end of April
would consider that "drawdown" to be still continuing and to be $3 in
amount, whereas if the Net Asset Value of a Unit had increased by $2
in March, the January-February drawdown would have ended as of the end
of February at the $2 level.

"Compound Rate of Return" is calculated by multiplying on a compound
basis each of the monthly rates of return set forth in the chart above
and not by adding or averaging such monthly rates of return. For
periods of less than one year, the results are year-to-date. For
example, the compound rate of return of (2.60)% for the partial year
1997 in the Trust's performance record was calculated by multiplying
100 by the quantity [[(1-.0030)(1-.0230) minus 1].

SELECTED FINANCIAL DATA

The following Selected Financial Data is derived from the statement of
financial condition of the Trust as of December 31, 1996 (audited) and the
financial statements of the Trust for the period from January 1, 1997 to June
30, 1997 (unaudited). The statement of financial condition of the Trust as of
December 31, 1996 (audited) is included herein in reliance upon the authority
of Arthur F. Bell, Jr. & Associates, L.L.C. as experts in auditing and
accounting. The Trust commenced trading operations on May 22, 1997. See
"Index to Financial Statements" at page F-1.

Six Months Ended
June 30, 1997 As of
(unaudited) December 31, 1996
----------- -----------------

Total Assets $8,370,165 $2,000

Total Partner's Capital 8,275,357 2,000
(Loss) from Trading (143,412)

Interest Income 44,960

Total Expenses 96,586

Net (Loss) (195,038)

Net (Loss) Per Unit (Based on
weighted average number of
units outstanding) (2.67)

Decrease in Net Asset Value Per Unit (2.60)

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<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OPERATIONAL OVERVIEW; ADVISOR SELECTIONS

The TRUST'S results of operations depend on KENMAR'S ability to select
Advisors and the ADVISORS' ability to trade profitably. Because of the
speculative nature of its trading, the TRUST'S past performance is not
necessarily indicative of its future results.

Since the commencement of trading operations in May 1997, Kenmar has made
no change in the TRUST'S Advisors , BUT HAS MADE ONE REALLOCATION of the
Trust's assets among them AS OF AUGUST 31, 1997. The allocations below
represent the initial allocations to the Advisors at the commencement of the
Trust's operations on May 22, 1997 AND AS OF AUGUST 31, 1997. THE AUGUST 31,
1997 allocations are approximate as of the date of this Prospectus, and are
affected by the profit and loss generated by each Advisor in relation to the
performance of the other Advisors for the Trust.

ADVISOR MAY 22, 1997 AUGUST 31, 1997
- ------- ------------ ---------------

Chesapeake Capital Corporation 25% 22%

Dreiss Research Corporation 15% 22%

Hyman Beck & Company, Inc. 25% 25%

Willowbridge Associates Inc. 25% 22%

Witter and Lester, Inc. 10% 9%
---- ----
Total 100% 100%
==== ====

Any decision to terminate or reallocate assets among Trading Advisors is
based on a combination of numerous factors, as described under "The Trust and
Its Objectives -- The Advisors" at page 15. Kenmar's Advisor selection
procedures are described under "Kenmar -- Management of Traders" at page 19.
The Advisors' trading methods are described under "The TRUST AND ITS OBJECTIVES
- -- THE Advisors" at page 15.

Kenmar has no timetable or schedule for making Advisor changes or
reallocations, and generally makes a medium- to long-term commitment to all
Advisors selected. KENMAR IS NOT REQUIRED TO ALLOCATE THE PROCEEDS RESULTING
FROM SUBSCRIPTIONS AS A MONTH END DURING THE CONTINUING OFFERING (OVER ANY
AMOUNTS REDEEMED AS OF SUCH DATE) ON A PRO RATA BASIS; RATHER, SUCH ALLOCATIONS
WILL BE BASED ON THE FACTORS DESCRIBED UNDER "THE TRUST AND ITS OBJECTIVES --
THE ADVISORS."

LIQUIDITY

The Trust's investment in futures , forwards, options and related markets
may, from time to time, be illiquid. See "Risk Factors -- Possibly Illiquid
Markets" at page 10. Most United States exchanges limit fluctuations in certain
futures interest prices during a single day by regulations referred to as "daily
price fluctuations limits" or "daily limits." Pursuant to such regulations,
during a single trading day no trades may be executed at prices beyond the daily
limit IN SUCH FUTURES INTERESTS. If the price for a particular contract has
increased or decreased by an amount equal to the "daily limit," positions in
such futures contract can neither be taken nor liquidated unless traders are
willing to effect trades at or within the limit. Futures contract prices have
occasionally moved the daily limit for several consecutive days with little or
no trading. Such market conditions could prevent the Trust from promptly
liquidating its positions and result in restrictions on redemptions. Since
commencement of trading by the Trust, there has never been a time when
illiquidity has affected a material portion of any Trust assets. See
"Redemptions and Distributions" at page 35.

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<PAGE>

RESULTS OF OPERATIONS

GENERAL

Kenmar believes that multi-advisor futures funds should be regarded as
medium- to long-term (I.E., three to five year) investments, but it is difficult
to identify trends in the TRUST'S operations and virtually impossible to make
any predictions regarding future results based on the limited results to date.

Kenmar has not made, and has no intention of making, any distributions of
the Trust's profits or capital to Unitholders.

PERFORMANCE SUMMARY

The most directly relevant information relating to the results of
operations of a managed futures fund, such as the Trust, is the actual
performance record. However, as the Trust has only recently commenced
operations, its performance record is of limited duration. The Trust commenced
TRADING operations on May 22, 1997. During the period May 22, 1997 (inception)
through June 30, 1997, and as of June 30, 1997, the TRUST'S Net Asset Value per
Unit declined from $100.00 to $97.40.

LIQUIDITY AND CAPITAL RESOURCES

The amount of capital raised for the Trust should not, except at extremely
high levels of capitalization, have a significant impact on its operations. The
TRUST'S costs are generally proportional to its asset base and, within broad
ranges of capitalization, the ADVISORS' trading positions (and the resulting
gains and losses) should increase or decrease in approximate proportion to the
size of the Trust account managed by each of them, respectively.

The Trust raises additional capital only through the continuous offering of
its Units. The Trust does not borrow, and sells no securities other than the
Units. KENMAR SECURITIES, INC. ACTS AS A SELLING AGENT IN RESPECT OF THE
TRUST'S UNITS.

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<PAGE>

INDEX OF DEFINED TERMS

A NUMBER OF DEFINED TERMS ARE USED IN THIS PROSPECTUS. THE RESPECTIVE
DEFINITIONS
OR DESCRIPTIONS OF SUCH TERMS MAY BE FOUND ON THE FOLLOWING PAGES OF THIS
PROSPECTUS.

PAGE(S)

Advisors Cover page

Aggregate Investment Expenses 43
CBOE 18
CFTC -ii-
Clearing Brokers 26
CME 31
CODE 37
Declaration of Trust 20
Employee benefit plan 45
EXCHANGE ACT 31
ERISA 45
ING Bank 27
ING Capital 27
ING Futures & Options 26
IRS 41
Kenmar Cover page
Kenmar Related Parties 20
LOSS CARRYFORWARD 24
NASAA Guidelines 20
New Overall Appreciation 24
New Trading Profits 24
NFA - III-
PaineWebber 26
Portfolio Income 41
PUBLICLY OFFERED SECURITY EXCEPTION 45
SEC 20
Selling Agents -i-
Speculative position limits 40
Trust Cover page
Units Cover page

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<PAGE>

THE ADVISORS

GENERAL

THE FOLLOWING DESCRIPTION OF THE INITIAL ADVISORS AND THEIR TRADING
METHODS AND STRATEGIES IS GENERAL AND IS NOT INTENDED TO BE EXHAUSTIVE. TRADING
METHODS ARE PROPRIETARY AND COMPLEX, SO ONLY THE MOST GENERAL DESCRIPTIONS ARE
POSSIBLE. FURTHERMORE, CERTAIN ADVISORS MAY HAVE CHOSEN TO REFER TO SPECIFIC
ASPECTS OF THEIR TRADING SYSTEMS, METHODS AND STRATEGIES, WHICH ASPECTS MAY ALSO
BE APPLICABLE TO OTHER ADVISORS WHICH DID NOT CHOOSE TO MAKE EXPLICIT REFERENCE
TO THESE ASPECTS OF THEIR OWN STRATEGIES. AS A RESULT, CONTRASTS IN THE
DESCRIPTIONS SET FORTH HEREIN MAY NOT, IN FACT, INDICATE A SUBSTANTIVE
DIFFERENCE BETWEEN THE TRADING METHODS AND STRATEGIES INVOLVED. WHILE KENMAR
BELIEVES THAT THE DESCRIPTION OF THE INITIAL ADVISORS' METHODS AND STRATEGIES
INCLUDED HEREIN MAY BE OF INTEREST TO PROSPECTIVE INVESTORS, SUCH PERSONS MUST
BE AWARE OF THE INHERENT LIMITATIONS OF SUCH DESCRIPTION.

This section contains brief biographical outlines and performance
summaries of the Trust's initial Advisors. The success of the Trust is
dependent upon the success of the Advisors retained by or on behalf of the
Trust from time to time to trade for its account. In terms of attempting to
reach an investment decision regarding the Units, however, it is difficult to
know how to assess Advisor descriptions and performance summaries, as trading
methods are proprietary and confidential and past performance is not necessarily
indicative of future results. Furthermore, the performance summaries provide
only a brief overview of the Advisors' performance histories and have not been
audited.

CFTC rules require the disclosure of performance information for the
last five full calendar years and year to date, and consider older performance
information less material to an investment decision. Accordingly, Advisor
performance prior to January 1, 1992 has not been included in the performance
summaries set forth in this Prospectus.

CERTAIN ADVISORS TRADE "NOTIONAL" EQUITY FOR CLIENTS -- I.E., TRADING SUCH
CLIENTS' ACCOUNTS AS IF MORE EQUITY WERE COMMITTED TO SUCH ACCOUNTS THAN IS, IN
FACT, THE CASE. THE TRUST'S

ACCOUNTS WILL NOT INCLUDE ANY NOTIONAL EQUITY.

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
FURTHERMORE, THE RATES OF RETURN EARNED WHEN AN ADVISOR IS MANAGING A LIMITED
AMOUNT OF EQUITY MAY HAVE LITTLE RELATIONSHIP TO THE RATES OF RETURN THAT SUCH
ADVISOR MAY BE ABLE TO ACHIEVE MANAGING LARGER AMOUNTS OF EQUITY.

THE FOLLOWING FIGURES HAVE IN NO RESPECT BEEN ADJUSTED TO REFLECT THE
CHARGES TO THE TRUST. CERTAIN OF THE ACCOUNTS INCLUDED IN THE FOLLOWING
PERFORMANCE SUMMARIES PAID FEES MATERIALLY DIFFERENT FROM, AND IN SOME CASES
MATERIALLY LOWER THAN, THOSE CHARGED TO THE TRUST.

TRADING OF FUTURES AND FORWARD CONTRACTS AND RELATED INSTRUMENTS IS
SPECULATIVE AND INVOLVES A HIGH DEGREE OF RISK. THERE CAN BE NO ASSURANCE THAT
THE ADVISORS WILL TRADE PROFITABLY OR AVOID INCURRING SUBSTANTIAL LOSSES.

FUTURES TRADING METHODS IN GENERAL

SYSTEMATIC AND DISCRETIONARY TRADING APPROACHES

Futures traders may generally be classified as either systematic or
discretionary.

A systematic trader will generally rely to some degree on judgmental
decisions concerning, for example, what markets to follow and commodities to
trade, when to liquidate a position in a contract which is about to expire and
how large a position to take in a particular commodity. However, although these
judgmental decisions may have a substantial effect on a systematic trader's
performance, his primary reliance is on trading programs or models THAT
generate trading signals. The systems utilized to generate trading signals are
changed from time to time (although generally infrequently), but the trading
instructions generated by the systems being used are followed without
significant additional analysis or

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<PAGE>

interpretation. Discretionary traders, on the other hand, while they may
utilize market charts, computer programs and compilations of quantifiable
fundamental information to assist them in making trading decisions, make such
decisions on the basis of their own judgment and "trading instinct," not on the
basis of trading signals generated by any program or model.

Each approach involves certain inherent risks. Systematic traders may
fail to capitalize on market trends THAT their systems would otherwise have
exploited due to judgmental decisions made by them in the context of applying
their generally mechanical trading systems. Discretionary traders, on the other
hand, may decide to make trades which would not have been signaled by a trading
system and which result in substantial losses. Furthermore, any trading system
or trader may suffer substantial losses by misjudging the market. Systematic
traders tend to rely more on computerized programs than do discretionary
traders, and some consider the prospect of disciplined trading, which largely
removes the emotion of the individual trader from the trading process,
advantageous. In addition, due to their use of computers, systematic traders
are generally able to incorporate more data into a particular trading decision
than are discretionary traders. However, when fundamental factors dominate the
market, trading systems may suffer rapid and severe losses due to their
inability to respond to such factors until such factors have had a sufficient
effect on the market to create a trend of enough magnitude to generate a
reversal of trading signals, by which time a precipitous price change may
already be in progress, preventing liquidation at anything but substantial
losses.

TECHNICAL AND FUNDAMENTAL ANALYSIS

In addition to being distinguished from one another by the criterion
of whether they trade systematically or on the basis of their discretionary
evaluations of the markets, commodity trading advisors are also distinguished as
relying on either "technical" or "fundamental" analysis, or on a combination of
the two. Systematic traders tend to rely on technical analysis, because the
data relevant to such analysis is more susceptible to being isolated and
quantified to the extent necessary to be successfully incorporated into a
program or mathematical model than is most "fundamental" information, but there
is no inconsistency in attempting to trade systematically on the basis of
fundamental analysis. The fundamental information which can be evaluated by a
formalized trading system is, however, limited to some extent in that it
generally must be quantifiable in order to be processed by such a system.

Technical analysis is not based on anticipated supply and demand
factors; instead, it is based on the theory that the study of the commodities
markets themselves will provide a means of anticipating future prices.
Technical analysis operates on the theory that market prices at any given point
in time reflect all known factors affecting the supply and demand for a
particular commodity. Consequently, technical analysis focuses not on
evaluating those factors directly but on an analysis of market prices
themselves, theorizing that a detailed analysis of, among other things, actual
daily, weekly and monthly price fluctuations, volume variations and changes in
open interest is the most effective means of attempting to predict the future
course of price movements.

Fundamental analysis, in contrast, is based on the study of factors
external to the trading markets that affect the supply and demand of a
particular commodity in an attempt to predict future price levels. Such factors
might include weather, the economy of a particular country, government policies,
domestic and foreign political and economic events, and changing trade
prospects. Fundamental analysis theorizes that by monitoring relevant supply
and demand factors for a particular commodity, a state of current or potential
disequilibrium of market conditions may be identified that has yet to be
reflected in the price level of that commodity. Fundamental analysis assumes
that markets are imperfect, that information is not instantaneously assimilated
or disseminated and that econometric models can be constructed that generate
equilibrium prices that may indicate that current prices are inconsistent with
underlying economic conditions and will, accordingly, change in the future.

TREND-FOLLOWING

"Trend-following" traders gear their trading approaches towards
positioning themselves to take advantage of major price movements, as opposed to
traders who seek to achieve overall profitability by making numerous small
profits on short-term trades, or through arbitrage techniques.
"Trend-following" traders assume that most of their trades will be unprofitable.
Their objective is to make a few large profits, more than offsetting their more
numerous but smaller losses, from capitalizing on major trends. Consequently,
during periods when no major price trends develop in a market, a
"trend-following" trader is likely to incur substantial losses.

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<PAGE>

RISK CONTROL TECHNIQUES

As will be apparent from the following descriptions of the respective
Advisors' trading approaches, an important aspect of any speculative futures
strategy relates to the control of losses, not only the ability to identify
profitable trades. Unless it is possible to avoid major drawdowns, it is very
difficult to achieve long-term profitability.

Traders often adopt fairly rigid "risk management" or "money
management" principles. Such principles typically restrict the size of
positions which will be taken as well as establishing "stop-loss" points at
which losing positions must be liquidated. It is important for prospective
investors to recognize in reading the descriptions of the Advisors' various risk
control techniques that none is "fail safe," and none can, in fact, assure that
major drawdowns will be avoided. Not only do estimates of market volatility
themselves require judgmental input, but also market illiquidity can make it
impossible for an account to liquidate a position against which the market is
moving strongly, whatever risk management principles are utilized. Similarly,
irrespective of how small the initial "probing" positions taken by an Advisor
are, unless it trades profitably, innumerable small losses incurred in the
course of such "probing" can quickly accumulate into a major drawdown. The
Advisors' risk management principles should, accordingly, be seen more as a
discipline applied to their trading in highly speculative markets than as an
effective protection against loss.

Not only are trading methods typically "'black boxes," but they often
are also continually evolving. Prospective investors and Unitholders will
generally not be informed of a change in an Advisor's trading approach, unless
Kenmar is informed of such change and considers such change to be material.

In addition to the continually changing character of trading methods,
the commodity markets themselves are continually changing. Each Advisor may, in
its sole discretion, elect to trade any available futures or forward contract,
option or related instrument -- both on United States markets and abroad -- even
if such Advisor has never previously traded in that particular contract or
market.

NOTES TO PERFORMANCE INFORMATION

In reviewing the descriptions of the Advisors' performance,
prospective investors should understand that such performance is "net" of all
fees and charges, and includes interest income applicable to the accounts
comprising each composite performance summary. Such composite performance is
not necessarily indicative of any individual account. In addition, particular
conventions adopted by certain Advisors with respect to the calculation of the
performance information set forth herein are described under the "Past
Performance Information" section with respect to each Advisor.

1. NAME OF CTA is the name of the Advisor which directed the accounts included
in the performance summary.

2. NAME OF PROGRAM is the name of the trading program used by the Advisor in
directing the accounts included in the performance summary.

3. INCEPTION OF CLIENT ACCOUNT TRADING BY CTA is the date on which the
relevant Advisor began directing client accounts.

4. INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM is the date on which the
relevant Advisor began directing client accounts pursuant to the program
shown in the performance summary.

5. NUMBER OF OPEN ACCOUNTS is the number of accounts directed by the
relevant Advisor pursuant to the program shown in the
performance summary through JUNE 30, 1997.

6. AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) OVERALL is the aggregate
amount of actual assets under the management of the relevant Advisor in all
programs operated by such Advisor through JUNE 30, 1997.

7. AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) OVERALL is the aggregate
amount of total equity, including "notional" equity, under the management
of the relevant Advisor in all programs operated by such Advisor through
JUNE 30, 1997.

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<PAGE>

8. AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) IN PROGRAM is the aggregate
amount of actual assets under the management of the relevant Advisor in the
program shown in the performance summary through JUNE 30, 1997.
9. AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) IN PROGRAM is the aggregate
amount of total equity, including "notional" equity, under the management
of the relevant Advisor in the program shown in the performance summary
through JUNE 30, 1997.

10. LARGEST MONTHLY DRAWDOWN is the largest monthly PERCENTAGE loss experienced
by any account of the Advisor in the relevant program in any calendar month
covered by the performance summary. "Loss" for these purposes is
calculated on the basis of the loss experienced by each such account,
expressed as a percentage of the total equity (including "notional" equity)
of such account. Largest monthly drawdown information includes the month
and year of such drawdown, and is through JUNE 30, 1997. In the case of
programs traded by Chesapeake and Willowbridge, the largest drawdown is
calculated on the basis of the largest loss experienced by the program as a
whole rather than any individual account.

11. LARGEST PEAK-TO-VALLEY DRAWDOWN is the largest percentage decline (after
eliminating the effect of additions and withdrawals) experienced by any
account of the Advisor in the relevant program during the period covered by
the performance summary from any month-end net asset value, without such
month-end net asset value being equaled or exceeded as of a subsequent
month-end. Largest peak-to-valley drawdown is calculated on the basis of
the loss experienced by each such account in the relevant program,
expressed as a percentage of the total equity (including "notional" equity)
in such account, and is through JUNE 30, 1997. In the case of programs
traded by Chesapeake and Willowbridge, the largest peak-to-valley drawdown
is calculated on the basis of the largest percentage decline experienced by
the program as a whole rather than any individual account.

12. MONTHLY RATE OF RETURN for any month in the Advisors' performance summaries
is, in general, the net performance of the relevant program divided by the
beginning of the month net assets in such program.

Monthly rates of return, in accordance with CFTC rules, are shown only for
the specific programs to be traded by the Advisors for the Trust. In the
accompanying performance descriptions, certain Advisors have adopted a
method of computing rate of return and performance disclosure, referred to
as the "Fully-Funded Subset" method, pursuant to an Advisory (the
"Fully-Funded Subset Advisory") published in February 1993 by the CFTC. To
qualify for the use of the Fully-Funded Subset method, the Fully-Funded
Subset Advisory requires that certain computations be made in order to
arrive at the Fully-Funded Subset and that the accounts for which
performance is so reported meet two tests which are designed to provide
assurance that the Fully-Funded Subset and the resultant rates of return
are representative of the particular trading program.

The monthly rates of return for each Advisor, in certain cases, are
calculated on the basis of assets under management including proprietary
capital. However, the Advisors believe that the inclusion of such capital
has had no material effect on their monthly rates of return.

13. COMPOUND RATE OF RETURN is calculated by multiplying on a compound basis
each of the monthly rates of return and not by adding or averaging such
monthly rates of return. For periods of less than one year, the results
are for the period indicated.

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CHESAPEAKE CAPITAL CORPORATION

BACKGROUND AND MANAGEMENT

Chesapeake Capital Corporation ("Chesapeake") was incorporated under
the laws of the Commonwealth of Virginia in February 1988 for the purpose of
offering investment advisory and portfolio management services to both retail
and institutional investors in trading futures and forward contracts. On August
19, 1991, Chesapeake was merged into Chesapeake Capital Corporation, an Illinois
corporation formed on August 13, 1991. References herein to Chesapeake refer to
the Virginia corporation prior to August 19, 1991 and to the Illinois
corporation on and after August 19, 1991. Chesapeake is registered as a
commodity trading advisor and as a commodity pool operator with the CFTC, and is
also a member in good standing of the NFA. Chesapeake's principal place of
business is located at 500 Forest Avenue, Richmond, Virginia 23229; telephone
(804) 285-5417. THE REGISTRATION OF CHESAPEAKE WITH THE CFTC AND CHESAPEAKE'S
MEMBERSHIP IN NFA MUST NOT BE TAKEN AS AN INDICATION THAT ANY SUCH AGENCY OR
SELF-REGULATORY BODY HAS RECOMMENDED OR APPROVED CHESAPEAKE OR THE TRUST.

Chesapeake's principals are R. Jerry Parker and John M. Hoade.

R. JERRY PARKER, JR. received his B.S. in Commerce, with an emphasis
in Accounting, from the University of Virginia in January 1980. Mr. Parker
worked in the accounting field for four years after graduating from college and
became a licensed Certified Public Accountant ("CPA") in Virginia in 1982. From
November 1983 until January 1987, Mr. Parker was employed as an exempt commodity
trading advisor by Richard J. Dennis, a principal and shareholder of Richard J.
Dennis & Company, a Chicago-based commodity trading advisor and commodity pool
operator registered with the CFTC, in his "Turtle" training program. From
January 1987 until February 1988, Mr. Parker traded for Mr. Thomas Dennis as an
exempt commodity trading advisor. From November 1983 through February 1988,
Mr. Parker had complete discretionary trading authority over a futures portfolio
of $1 million to $1.5 million. In February 1988, Mr. Parker ceased trading for
Mr. Thomas Dennis and formed Chesapeake, where he serves as the Chairman of the
Board of Directors, Chief Executive Officer and a Principal.

JOHN M. HOADE received a B.S. degree in Business Administration from
Lynchburg College in 1978. From 1976 through 1990, Mr. Hoade was employed by
Thurston Metals, Inc., located in Lynchburg, Virginia, in sales, marketing and
general management. Mr. Hoade joined Chesapeake in December 1990 to direct its
operations and marketing efforts. Mr. Hoade is President, Secretary and a
Principal of Chesapeake.

There have been no material administrative, civil or criminal actions
or proceedings -- whether pending, on appeal or concluded -- against Chesapeake
or its principals during the five years preceding the date of this Prospectus.

TRADING STRATEGY

Chesapeake will trade its "Diversified Trading Program" on behalf of
the Trust. The Diversified Trading Program emphasizes a maximum range of
diversification with a global portfolio of futures, forward and cash markets
which includes, but is not limited to, agricultural products, metals,
currencies, financial instruments, and stock, financial and economic indices.
Chesapeake may trade on any U.S. or non-U.S. exchange.

The investment portfolios currently offered by Chesapeake are the
"Diversified Trading Program," the "Diversified 2XL Program," and the
"Financials and Metals Program" (the "Trading Programs"). The Diversified
Program is Chesapeake's longest operating investment portfolio with a
performance record beginning in February 1988. While all of the Trading
Programs employ the same general trading methodology, as described below, they
differ in their emphasis of certain markets or market sectors and exclusion of
others. The following overview is not intended as a detailed and exhaustive
review of the trading methodology or strategies employed by Chesapeake, as the
exact nature of the methods and these systems is proprietary and confidential.

Chesapeake believes that future price movements in all markets may be
more accurately anticipated by historical price movements within a quantitative
or technical analysis than by fundamental economic analysis. The trading

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<PAGE>

methodologies employed by Chesapeake are based on proprietary programs analyzing
a large number of interrelated mathematical and statistical formulas and
techniques which are quantitative in nature.

In addition to such mathematical evaluations, Chesapeake employs a
technique of technical analysis generally known as "charting" to attempt to
determine optimal support and resistance levels and entry and exit points in the
various markets. Chesapeake also makes extensive use of internally-generated
market information, which includes, but is not limited to, price volatility,
open interest, daily price action and volume.

The results of the Trading Programs, traded pursuant to technical
analysis emphasizing mathematical and charting approaches, will depend upon the
occurrence in the future, as in the past, of major trends in some markets. If
there are no trends, the Trading Programs are likely to be unprofitable. There
have been trendless periods in the past which can be expected to recur and any
factor which lessens the prospect of trends in the future, such as increased
governmental control, regulation, or participation as a purchaser or seller in
commodity interest markets (including joint governmental control or regulation
of, or participation in, international currency markets), lessens the prospect
that programs utilizing technical analysis, including the Trading Programs, will
be profitable in the future. In addition, the future profitability of the
Trading Programs would also be adversely affected by factors which increase the
number of signals leading to unprofitable trades. For example, a significant
increase in technically-oriented trading (trend-following or otherwise) in a
particular commodity might cause a change in the pattern of price movements in a
manner which might be unfavorable.

Trend-following trading systems, such as those employed by Chesapeake,
will seldom effect market entry or exit at the most favorable price in the
particular market trend. Rather, a trend-following trading system seeks to
close out losing positions quickly and to hold portions of profitable positions
for as long as the trading system determines that the particular market trend
continues to exist. There can be no assurance, however, that profitable
positions can be liquidated at the most favorable price in a particular trend.
As a result, the number of losing transactions may exceed substantially the
number of profitable transactions.

The Trading Programs are oriented toward the preservation of original
equity. The commencement of trading or a drawdown from starting equity are
considered the situations of highest risk, and risk management techniques at
this point are emphasized over those which invite greater risk in the interest
of enhancing performance. These risk management techniques include
diversification, I.E., commitment of equity to multiple markets and to a number
of trading strategies. Also, the Trading Programs adhere to the requirements of
a money management system which determines and limits the equity committed to
each trade, each market, and each complex (in Trading Programs which trade in
more than one commodity complex) with respect to each account.

Chesapeake believes that a long-term commitment to its Trading
Programs is necessary for profitable trading. Chesapeake attempts to take a
limited number of positions over the long term to capture major price movements
while limiting downside risk on open positions.

Futures contracts which are traded by Chesapeake may include, but are
not limited to, agricultural products, metals, currencies, financial
instruments, and stock, financial and economic indices. Exchanges on which
these transactions take place include, but are not limited to, all exchanges in
the United States, as well as non-U.S. exchanges (E.G., the Belgian Futures and
Options Exchange (BELFOX), the London International Financial Futures and
Options Exchange Ltd. (LIFFE), the International Petroleum Exchange of London
Ltd., the London Metal Exchange, the London Commodity Exchange (LCE), the March
Terme International de France (MATIF), Mercado Espanol de Futuros Financieros
(MEFFSA), the Deutsche Terminberse, the Hong Kong Futures Exchange Ltd., the
Montreal Exchange (ME), the Tokyo Commodity Exchange, the Tokyo International
Financial Futures Exchange (TIFFE), the Tokyo Stock Exchange (TSE), the
Singapore International Monetary Exchange (SIMEX), the Sydney Futures Exchange
Ltd., the Swiss Options and Financial Futures Exchange (SOFFEX), and the
Winnipeg Commodity Exchange). In addition, Chesapeake continually monitors
numerous markets, both U.S. and non-U.S., and will initiate trades at any point
it is determined that a market is sufficiently liquid and tradeable using the
methods employed by Chesapeake.

Chesapeake engages in transactions in physical commodities, including
the exchange of futures for physicals transactions. An exchange of futures for
physicals ("EFP") is a transaction permitted under the rules of many futures
exchanges in which two parties exchange a cash market position for a futures
market position (or vice versa) without

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<PAGE>

making an open, competitive trade on the exchange. The prices at which such
transactions are executed are negotiated between the parties.

Chesapeake generally uses between 10% and 30% of the equity in an
account as original margin for trading in its Diversified Trading Program but at
times the margin-to-equity ratio can be higher.

Decisions concerning the liquidation of positions, the futures
interest contracts to be traded and the size of positions to be taken or
maintained require to some degree the exercise of judgment by Chesapeake. A
decision not to trade futures interest contracts due to lack of liquidity,
excess volatility, or any other reason may result at times in clients (such as
the Trust) missing significant profit opportunities which might otherwise have
been captured by Chesapeake.

The trading strategies and systems utilized by Chesapeake's Trading
Programs, including the Diversified Trading Program, may be revised from time to
time by Chesapeake as a result of ongoing research and development which seeks
to devise new trading strategies and systems, as well as test methods currently
employed. The trading strategies and systems used by Chesapeake in the future
may differ significantly from those presently used, due to the changes which may
result from this research.

Since the Trading Programs utilized by Chesapeake are proprietary and
confidential, the above discussion is general in nature and is not intended to
be exhaustive.

PAST PERFORMANCE INFORMATION

The following information describes the composite actual performance
of all customer accounts managed by Chesapeake. Chesapeake will trade its
Diversified Trading Program on behalf of the Trust. As of JUNE 30, 1997,
Chesapeake was managing approximately $1 billion (excluding "notional" equity)
of customer funds in the futures and forwards markets. The performance
information set forth below is current as of JUNE 30, 1997.

CFTC RULES REQUIRE THE DISCLOSURE OF PERFORMANCE INFORMATION FOR THE
LAST FIVE FULL CALENDAR YEARS AND YEAR-TO-DATE, AND CONSIDER OLDER PERFORMANCE
INFORMATION LESS MATERIAL TO AN INVESTMENT DECISION. CONSEQUENTLY, ONLY THE
PERFORMANCE OF THE TRADING ADVISOR SINCE JANUARY 1, 1992 IS REFLECTED IN THE
PERFORMANCE INFORMATION PRESENTED BELOW. PROSPECTIVE INVESTORS SHOULD NOTE THAT
THE LARGEST MONTHLY DRAWDOWN (-11.75% IN AUGUST 1989) AND LARGEST PEAK-TO-VALLEY
DRAWDOWN (-20.58% FOR THE PERIOD AUGUST 1989 THROUGH OCTOBER 1989) SINCE
INCEPTION OF THE DIVERSIFIED PROGRAM OCCURRED PRIOR TO JANUARY 1, 1992 AND,
ACCORDINGLY, ARE NOT SET FORTH IN THE SUMMARY PERFORMANCE INFORMATION. This
section does not include the composite performance of Parker Commodities
Incorporated, an affiliated commodity trading advisor which has not managed
accounts since August 31, 1990. This section likewise does not include the
performance of proprietary accounts traded pursuant to other programs or client
accounts that utilize only spot and forward currency contracts (and no futures
contracts or options thereon).

IN THE ACCOMPANYING PERFORMANCE DESCRIPTION, CHESAPEAKE HAS ADOPTED A
METHOD OF COMPUTING RATE OF RETURN AND PERFORMANCE DISCLOSURE, REFERRED TO AS
THE "FULLY-FUNDED SUBSET" METHOD, PURSUANT TO AN ADVISORY (THE "FULLY-FUNDED
SUBSET ADVISORY") PUBLISHED IN FEBRUARY 1993 BY THE CFTC. TO QUALIFY FOR THE
USE OF THE FULLY-FUNDED SUBSET METHOD, THE FULLY-FUNDED SUBSET ADVISORY REQUIRES
THAT CERTAIN COMPUTATIONS BE MADE IN ORDER TO ARRIVE AT THE FULLY-FUNDED SUBSET
AND THAT THE ACCOUNTS FOR WHICH PERFORMANCE IS SO REPORTED MEET TWO TESTS WHICH
ARE DESIGNED TO PROVIDE ASSURANCE THAT THE FULLY-FUNDED SUBSET AND THE RESULTANT
RATES OF RETURN ARE REPRESENTATIVE OF THE TRADING PROGRAM. CHESAPEAKE HAS
PERFORMED THESE COMPUTATIONS FOR PERIODS SUBSEQUENT TO JANUARY 1, 1992.
HOWEVER, FOR PERIODS PRIOR TO JANUARY 1, 1992, DUE TO COST CONSIDERATIONS, THE
FULLY-FUNDED SUBSET METHOD HAS NOT BEEN USED. INSTEAD, THE RATES OF RETURN
REPORTED ARE BASED ON A COMPUTATION WHICH USES THE NOMINAL ACCOUNT SIZES OF ALL
OF THE ACCOUNTS INCLUDED IN THE COMPOSITE TABLES CALCULATED IN ACCORDANCE WITH
THE "OAT" METHOD AS DESCRIBED BELOW. CHESAPEAKE BELIEVES THAT THIS METHOD
YIELDS SUBSTANTIALLY THE SAME RATES OF RETURN AS WOULD THE FULLY-FUNDED SUBSET
METHOD AND THAT THE RATES OF RETURN PRESENTED IN THE PERFORMANCE RECORDS ARE
REPRESENTATIVE OF THE TRADING PROGRAMS FOR THE PERIODS PRESENTED. FOR THE
PERIODS FROM JANUARY 1, 1992 THROUGH DECEMBER 31, 1993, CHESAPEAKE COMPARED THE
OAT METHOD AND THE FULLY-FUNDED SUBSET METHOD AND FOUND THAT THE TWO METHODS
YIELDED SUBSTANTIALLY THE SAME RATES OF RETURN. CONSEQUENTLY, CHESAPEAKE
CONTINUED TO USE THE OAT METHOD UNTIL THE END OF 1993. SINCE JANUARY 1, 1994,
CHESAPEAKE HAS USED ONLY THE FULLY-FUNDED SUBSET METHOD.

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Beginning in March 1995 in the Diversified Program, the mean Compound
Rate of Return is materially lower than the composite Compound Rate of Return.
This is due to the monthly compounding effect of a large account with a rate of
return which is, on a monthly basis, immaterially higher than most accounts in
the program. This difference in the monthly rate of return is due to a
different cost and interest income structure in this account. When compared on
a gross basis, most accounts in the Diversified Program, including the largest
account, have rates of return which are materially the same during the period.

In the Financials and Metals Program, certain accounts with client
imposed trading restrictions earned different rates of return than the composite
indicates. In any month, these restrictions did not have a material impact on
the monthly rate of return. However, due to the compounding effect of these
differences, the Compound Rate of Return is materially different from the
composite Compound Rate of Return for the accounts with no client imposed
trading restrictions.

[Remainder of page left blank intentionally.]

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<PAGE>

DIVERSIFIED PROGRAM

Chesapeake will trade this program on behalf of the Trust. The following
summary performance information and chart reflect the composite performance
results for the five-year period from January 1992 through JUNE 1997 of
Chesapeake's Diversified Program.

NAME OF CTA: Chesapeake Capital Corporation
NAME OF PROGRAM: Diversified Program
INCEPTION OF CLIENT ACCOUNT TRADING BY CTA: February 1988
INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM: February 1988
NUMBER OF OPEN ACCOUNTS: 48
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) OVERALL: $1,047,541,373
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) OVERALL: $1,480,147,374
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $931,235,392
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $1,147,162,708
LARGEST MONTHLY DRAWDOWN: (10.98)% (1/92)
LARGEST PEAK-TO-VALLEY DRAWDOWN: (16.62)% (1/92-5/92)
NUMBER OF CLOSED ACCOUNTS WITH PROFIT: 121
NUMBER OF CLOSED ACCOUNTS WITH LOSS: 16

- -----------------------------------------------------------------------------------------
Monthly 1997(%) 1996(%) 1995(%) 1994(%) 1993(%) 1992(%)
Performance
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
January 1.86 1.69 (3.23) (3.33) 0.42 (10.98)
- -----------------------------------------------------------------------------------------
February 5.48 (4.26) (4.39) (4.88) 15.99 (2.86)
- -----------------------------------------------------------------------------------------
March (1.24) 0.28 8.60 0.09 5.86 0.53
- -----------------------------------------------------------------------------------------
April (2.41) 10.16 1.45 (0.60) 7.38 (0.44)
- -----------------------------------------------------------------------------------------
May (2.28) (3.04) 6.84 9.06 0.40 (3.66)
- -----------------------------------------------------------------------------------------
June 1.44 3.27 0.88 7.02 0.98 6.52
- -----------------------------------------------------------------------------------------
July (7.64) (3.09) (1.70) 9.49 12.96
- -----------------------------------------------------------------------------------------
August 0.57 (2.66) (2.98) 5.88 3.16
- -----------------------------------------------------------------------------------------
September 6.47 0.20 3.49 (2.63) (6.78)
- -----------------------------------------------------------------------------------------
October 5.92 (1.11) 1.97 (0.06) 5.21
- -----------------------------------------------------------------------------------------
November 6.57 1.76 4.83 1.03 2.27
- -----------------------------------------------------------------------------------------
December (4.30) 9.18 2.86 5.77 (1.93)
- -----------------------------------------------------------------------------------------
Compound Rate of 2.64 15.05 14.09 15.87 61.82 1.81
Return (6 months)
- -----------------------------------------------------------------------------------------

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

</TABLE>

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<PAGE>

DIVERSIFIED 2XL PROGRAM

The following summary performance information reflects the composite
performance results from April 1994 through JUNE 1997 of Chesapeake's
Diversified 2XL Program.

NAME OF CTA: Chesapeake Capital Corporation
NAME OF PROGRAM: Diversified 2XL Program
INCEPTION OF CLIENT ACCOUNT TRADING BY CTA: February 1988
INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM: April 1994
NUMBER OF OPEN ACCOUNTS: 4
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) OVERALL: $1,047,541,373
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) OVERALL: $1,480,147,374
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $23,831,302
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $23,831,302
LARGEST MONTHLY DRAWDOWN: (16.40)% (7/96)
LARGEST PEAK-TO-VALLEY DRAWDOWN: (17.59)% (5/96-7/96)
NUMBER OF ACCOUNTS CLOSED WITH PROFIT: 0
NUMBER OF ACCOUNTS CLOSED WITH LOSS: 0
1997 COMPOUND RATE OF RETURN: 3.97% (6 months)
1996 COMPOUND RATE OF RETURN: 18.18%
1995 COMPOUND RATE OF RETURN: 18.77%
1994 COMPOUND RATE OF RETURN: 26.88% (9 months)

FINANCIALS & METALS PROGRAM

The following summary performance information reflects the composite
performance results from March 1992 through JUNE 1997 of Chesapeake's
Financials & Metals Program.

NAME OF CTA: Chesapeake Capital Corporation
NAME OF PROGRAM: Financials & Metals Program
INCEPTION OF CLIENT ACCOUNT TRADING BY CTA: February 1988
INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM: March 1992
NUMBER OF OPEN ACCOUNTS IN PROGRAM: 3
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) OVERALL: $1,047,541,373
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) OVERALL: $1,480,147,374
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $92,502,476
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $302,181,161
LARGEST MONTHLY DRAWDOWN: (7.86)% (7/96)
LARGEST PEAK-TO-VALLEY DRAWDOWN: (10.36)% (1/94-2/94)
NUMBER OF ACCOUNTS CLOSED WITH PROFIT: 8
NUMBER OF ACCOUNTS CLOSED WITH LOSS: 8
1997 COMPOUND RATE OF RETURN: (5.22)% (6 months)
1996 COMPOUND RATE OF RETURN: 10.35%
1995 COMPOUND RATE OF RETURN: 12.61%
1994 COMPOUND RATE OF RETURN: 3.22%
1993 COMPOUND RATE OF RETURN: 68.53%
1992 COMPOUND RATE OF RETURN: 24.19% (10 months)

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
THE TRUST'S ACCOUNT WILL NOT BE TRADED PURSUANT TO THE FOREGOING PROGRAMS.

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PACIFIC RIM PROGRAM

The following summary performance information reflects the composite
performance record of Chesapeake's Pacific Rim Program, which began trading in
June 1994 and which ceased trading in August 1995.

NAME OF CTA: Chesapeake Capital Corporation
NAME OF PROGRAM: Pacific Rim Program
INCEPTION OF CLIENT ACCOUNT TRADING BY CTA: February 1988
INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM: June 1994 (CEASED TRADING IN
AUGUST 1995)
NUMBER OF OPEN ACCOUNTS: 0
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) OVERALL: $1,047,541,373
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) OVERALL: $1,480,147,374
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) IN PROGRAM: N/A
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) IN PROGRAM: N/A
LARGEST MONTHLY DRAWDOWN: (3.30)% (7/95)
LARGEST PEAK-TO-VALLEY DRAWDOWN: (3.30)% (7/95)
NUMBER OF ACCOUNTS CLOSED WITH PROFIT: 1
NUMBER OF ACCOUNTS CLOSED WITH LOSS: 0
1997 COMPOUND RATE OF RETURN: N/A
1996 COMPOUND RATE OF RETURN: N/A
1995 COMPOUND RATE OF RETURN: 37.04% (8 months)
1994 COMPOUND RATE OF RETURN: (2.76)% (7 months)

FOREIGN FINANCIALS PROGRAM

The following summary PERFORMANCE information reflects the composite
performance record of Chesapeake's Foreign Financials Program, which began
trading in June 1992 and which ceased trading in June 1994.

NAME OF CTA: Chesapeake Capital Corporation
NAME OF PROGRAM: Foreign Financials Program
INCEPTION OF CLIENT ACCOUNT TRADING BY CTA: February 1988
INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM: June 1992 (ceased trading June
1994)
NUMBER OF OPEN ACCOUNTS: 0
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) OVERALL: $1,047,541,373
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) OVERALL: $1,480,147,374
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) IN PROGRAM: N/A
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) IN PROGRAM: N/A
LARGEST MONTHLY DRAWDOWN: (5.77)% (9/92)
LARGEST PEAK-TO-VALLEY DRAWDOWN: (5.77)% (9/92)
NUMBER OF ACCOUNTS CLOSED WITH PROFIT: 4
NUMBER OF ACCOUNTS CLOSED WITH LOSS: 0
1997 COMPOUND RATE OF RETURN: N/A
1996 COMPOUND RATE OF RETURN: N/A
1995 COMPOUND RATE OF RETURN: N/A
1994 COMPOUND RATE OF RETURN: (1.77)% (6 months)
1993 COMPOUND RATE OF RETURN: 21.90%
1992 COMPOUND RATE OF RETURN: 21.42% (7 months)

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
THE TRUST'S ACCOUNT WILL NOT BE TRADED PURSUANT TO THE FOREGOING PROGRAMS.

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DREISS RESEARCH CORPORATION

BACKGROUND AND MANAGEMENT

Dreiss Research Corporation ("Dreiss Research") is a Delaware
corporation formed in August 1991. Dreiss Research became registered with the
CFTC as a commodity trading advisor in March 1992, and is a member of the NFA.
THE REGISTRATION OF DREISS RESEARCH WITH THE CFTC AND DREISS RESEARCH'S
MEMBERSHIP IN NFA MUST NOT BE TAKEN AS AN INDICATION THAT ANY SUCH AGENCY OR
SELF-REGULATORY BODY HAS RECOMMENDED OR APPROVED DREISS RESEARCH OR THE TRUST.
The addresses of its offices and their telephone numbers are set forth below.
All records are kept and made available for inspection at the administrative
services office, which is also the main business office.

TRADING ADMINISTRATIVE SERVICES
14 Penryn Avenue 1700 Montgomery Street, Suite 250
City Beach 6015, W. Australia San Francisco, California 94111
(61) 93857593 (415) 394-9465

San Miguel Associates is a Nevada corporation and a shareholder of
Dreiss Research. San Miguel Associates was formed in 1976 and became registered
with the CFTC as a commodity trading advisor in 1976. San Miguel Associates is
currently engaged in market research and does not provide investment advice or
management services to the public.

The Echelon Group of Companies, LLC ("Echelon") is a Delaware limited
liability company and a shareholder of Dreiss Research. Echelon was formed in
1995 and provides management and administrative assistance to Dreiss Research
and to several other commodity trading advisors. Echelon has no control over or
involvement with the trading decisions of Dreiss Research or any other commodity
trading advisor.

Clemson Financial Corporation is a California corporation and a
shareholder of Dreiss Research. Clemson Financial Corporation was formed in
1977 and became registered with the CFTC as a commodity trading advisor in 1978.
Clemson Financial Corporation provides consulting and marketing services to
commodity trading advisors, including Dreiss Research. Clemson Financial
Corporation has no control over or involvement with trading decisions of Dreiss
Research or any other commodity trading advisor.

E. WILLIAM DREISS, Director and President. E. William Dreiss
graduated from the Massachusetts Institute of Technology in 1964 with a BS in
electrical engineering. In 1966 he received an MBA from Harvard Business
School, with a concentration in Bayesian decision theory. He worked for several
years after graduation in mathematical and financial modeling, specializing in
game theory. During this time, he became interested in commodity futures, and
began to use pattern recognition and Fourier analysis to explore the markets.
In 1973, after five years of research into technical trading systems for
commodities, he took a position with E.F. Hutton & Co. in San Francisco as a
commodity broker. In 1975, he left to become a principal of and the chief
trader for Commodity Consultants, Inc., one of the first firms to manage large
amounts of risk capital using mechanical trading methods. In 1976, Mr. Dreiss
established San Miguel Associates of which he is President and sole shareholder.
From 1976 to 1984, San Miguel Associates was an active commodity trading advisor
managing commodity accounts marketed through major brokerage firms. In 1984,
Mr. Dreiss turned his attention to computer consulting and commercial software
development, while continuing to trade commodities for his own account.

Mr. Dreiss is one of the pioneers of the commodity managed account
industry and is responsible for a number of technological innovations related to
trading managed commodity accounts. He has continued his research into
innovative approaches to commodity trading, including original research on
artificial intelligence and the development of an expert systems shell which
uses a Holland classifier as the decision engine. He is currently involved in
the refinement of trading methods based on recent breakthroughs in fractal
geometry to market analysis. This work has led to the development of mechanical
systems based on pure pattern recognition and the formation of the Choppiness
Index, a unique indicator which distinguishes orderly (trending) from choppy
(consolidating) markets without regard to market direction.

Mr. Dreiss is the sole trader of Dreiss Research Corporation, and has
sole authority and control over the trading decisions of Dreiss Research.

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JOHN WARD ROTTER, Director and Corporate Secretary. John Ward Rotter
graduated from the United States Military Academy in 1979 with a Bachelor of
Science and Engineering Degree. Mr. Rotter CO-FOUNDED Echelon of which he is a
stockholder and President. Echelon is a diversified holding company which holds
equity stakes in a number of money management concerns. In the capacity of
President of Echelon, Mr. Rotter also serves as a board member and officer of
entities owned by Echelon. Mr. Rotter has no control over or involvement with
trading decisions of Dreiss Research Corporation or any other commodity trading
advisor.

BRADLEY N. ROTTER, Director. Bradley N. Rotter attended the United
States Military Academy where he studied economics and engineering, and
subsequently continued his education at the Graduate School of Business at the
University of Chicago where he received his MBA in 1983. Mr. Rotter formed
Echelon of which he is a principal stockholder and managing member. Mr. Rotter
also serves as a board member of entities owned by Echelon. Mr. Rotter has no
control over or involvement with trading decisions of Dreiss Research
Corporation.

ALLAN LEONARD, Director. Allan Leonard graduated from Claremont Men's
College in 1962 with a BA in Business Economics. He established Clemson
Financial Corporation in 1977 where he is President and sole shareholder. In
1976 Mr. Leonard became registered with the CFTC, and in 1987 became registered
with the SEC as a registered investment adviser. Mr. Leonard and Clemson
Financial Corporation provide consulting and marketing services to commodity
trading advisors, including Dreiss Research. Mr. Leonard has no control over or
involvement with trading decisions of Dreiss Research or any other commodity
trading advisor.

TRADING STRATEGY

OBJECTIVE. Dreiss Research's money management program is designed
primarily for sophisticated investors. The primary objective of Dreiss Research
is the capital appreciation of its clients' assets through speculation in
commodity futures contracts and commodity options. Dreiss Research will attempt
to meet the objective of capital appreciation by making trading decisions based
upon a proprietary trading method.

METHODOLOGY. The Fractal Wave System is a trend-following system
which is applied to a diversified portfolio of commodity futures contracts. It
is technical in nature and ignores news, weather, politics and other fundamental
factors except as they are reflected in the markets.

- The system trades directly off weekly price charts. These are
constructed by back-adjusting futures contracts of different
expirations and linking them into continuous daily data files,
which are then converted to weekly for use in trading.

- Price patterns are identified by the Fractal Wave Algorithm
("FWA"), a unique method of pattern recognition co-developed by
E.W. Dreiss and Arthur von Waldburg. Turning points identified
by the FWA are then used to precisely define mechanically drawn
trend lines and support and resistance levels, which are then
combined to generate trading signals. While the system may often
reverse, it is not a reversal system as the entry and exit
criteria are calculated independently.

- A unique Choppiness Index derived from fractal geometry is used
to distinguish between thrusting and consolidating markets. The
Index may be used to determine when exit stops are to be
tightened in thrusting markets, or when entry is to be more
stringent in consolidating markets.

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- A dollar stop loss may be used to limit losses. Such stop loss
reduces the frequency of abnormally large losses without
materially affecting system performance. Note that such a stop
does not eliminate the risk of gap openings or markets that are
locked at the limit against a position.

- The number of contracts of each commodity traded is determined by
"risk balancing" which involves trading a number of contracts
such that the expected dollar risk for trading any particular
commodity is roughly the same as that of other commodities in the
portfolio. For smaller accounts, it may be difficult to achieve
an optimal risk balancing due to mismatches in the sizes of
single contracts.

- Positions are entered for new accounts as new trading signals
occur or when limited risk opportunities allow alignment of
positions with those existing in the older accounts. Such
limited risk opportunities also allow upgrading or adding to
existing positions for older accounts. Note that the placement
of stops is determined by the trading system and not necessarily
adjusted with respect to positions in new accounts that have been
aligned with positions existing in older accounts.

- The system does not rely on the optimization of numerical
parameters.

The above features combine into a system with a favorable ratio of
gains over losses and an attractive return relative to the expected maximum
drawdown. Trading accounts are structured to provide for a cash reserve by
establishing a level of trading activity which results in margin requirements
which are usually between 20% and 40% of the account size and seldom greater
than 50%.

The foregoing trading principles are factors upon which Dreiss
Research bases its decisions. Given price trends and prices of sufficient
duration and magnitude, the trading methods employed may be profitable though
more than half of all individual trades may be unprofitable; however, a period
without such trends may result in substantial trading losses. The trading
strategies have been and will be enhanced or revised from time to time.

The trading methods of Dreiss Research are proprietary and
confidential. This description is, of necessity, general and is not intended to
be exhaustive.

PORTFOLIO SELECTION. Dreiss Research trades a diversified portfolio
of futures contracts representing most major commodity groups (I.E.,
agriculture, currencies, energy, equity indexes, interest rates, livestock,
metals, and softs). The selection process seeks to avoid undue concentration in
any particular futures group and to achieve a balance across all futures groups,
however, on occasion, there may be a heavier concentration of a given commodity
or a commodity complex, which could result in a greater return or risk to the
account.

The commodities currently traded are Australian dollar, British pound,
Canadian dollar, cattle, cocoa, coffee, copper, cotton, corn, crude oil, DAX
index, eurodollar, euromark, feeder cattle, German bund, gold, Hang Seng index,
heating oil, Italian bond, Japanese yen, live hogs, natural gas, Nikkei index,
orange juice, palladium, S&P 500, silver, soybeans, soybean meal, soybean oil,
sugar, Swiss francs, treasury bonds, unleaded gas and wheat. Dreiss Research
reserves the right to add or delete commodities from its portfolio without prior
notice.

ORDER ENTRY AND ALLOCATIONS. Dreiss Research employs an order entry
system for clients' accounts based upon the size of the account and the
commodities traded. No assurance is given that it will be possible to execute
trades at or near the desired buy or sell point. Further, since both the price
and number of commodities contracts filled or executed by the broker are subject
to prevailing market conditions over which Dreiss Research has no control, an
objective price allocation system is employed by Dreiss Research. In the
opinion of Dreiss Research, this allocation system is fair and equitable, and is
consistently applied among all accounts.

An effort to increase the efficiency and quality of execution of
trades, Dreiss Research directs the orders to specific executing brokers on the
various exchanges. Generally, Dreiss Research does not exceed the use of four
firms for executing trades, however, on occasion due to certain market
conditions, Dreiss Research may exceed the use of four

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firms for executing trades. Dreiss Research reserves the right to establish
relationships and enter into agreements on behalf of the client with one or more
executing brokers and to trade all orders through such executing brokers.
Therefore, Dreiss Research may on behalf of the client place orders for each
account with a bulk order that will include all client accounts in which the
same commodity is being traded. This may result in an account's being charged a
"give-up" fee if the trade is executed through a brokerage firm other than that
at which the account is maintained.

With regard to the timing and manner of execution of trades, Dreiss
Research may rely to some extent on the judgment of others, including floor
brokers. For example, a floor broker may advise that an order to buy or sell
200 contracts of a particular commodity futures be executed 20 or 30 contracts
at a time in an effort to obtain the best price. Dreiss Research may or may not
accept the advice given.

PAST PERFORMANCE INFORMATION

The various managed accounts advised by Dreiss Research may not have
parallel performance due to different times of market entry and varying amounts
of capital. For example, account size may have an effect on particular trading
decisions such as relative size of positions taken, degree of diversification,
and particular commodities traded. These factors could result in superior
performance for either the larger or smaller accounts, depending upon the
circumstances.

The data presented reflect the composite actual performance of
accounts managed by Dreiss Research from January 1992 through JUNE 1997. In
May 1991, Dreiss Research began trading one pension account whose beneficiary is
a principal of Echelon. Such account is fully-funded and historically has been,
and currently is, traded in tandem with, and charged comparable fees and
commissions as, all other accounts managed by Dreiss Research. Subsequent to
October 31, 1995, such account has been treated as a proprietary account and has
been excluded from the composite performance disclosures. As of October 31,
1995 the ending net asset value for such account was $1,176,816.

Dreiss Research has performed the computations for the Fully-Funded
Subset method for periods subsequent to January 1, 1993. However, for periods
prior to January 1, 1993, due to cost considerations, the Fully-Funded Subset
method has not been used. Instead, for such periods, the rates of return
reported are based upon a computation which uses the nominal values of all the
accounts included in the composite table, calculated in accordance with the
time-weighted method as described in a prior Advisory published by the CFTC.

[Remainder of page left blank intentionally.]

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DREISS RESEARCH CORPORATION TRADING PROGRAM

The following summary information (determined pursuant to the
Fully-Funded Subset Method) presents the composite performance record of Dreiss
Research's Trading Program from January 1992 through JUNE 1997.

NAME OF CTA: Dreiss Research Corporation
NAME OF PROGRAM: Dreiss Research Corporation Trading Program
INCEPTION OF CLIENT ACCOUNT TRADING BY CTA: May 1991
INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM: May 1991
NUMBER OF OPEN ACCOUNTS: 60
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) OVERALL: $9,130,932
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) OVERALL: $26,167,738
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $9,130,932
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $26,167,738
LARGEST MONTHLY DRAWDOWN: (21.51)% (7/96)
LARGEST PEAK-TO-VALLEY DRAWDOWN: (27.55)% (12/96 - 7/97)
NUMBER OF PROFITABLE CLOSED ACCOUNTS: 17
NUMBER OF UNPROFITABLE CLOSED ACCOUNTS: 8

- ----------------------------------------------------------------------------------------
Monthly Performance 1997(%) 1996(%) 1995(%) 1994(%) 1993(%) 1992(%)
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
January (1.50) 1.46 (4.97) (2.62)* 3.79* (5.95)*
- ----------------------------------------------------------------------------------------
February 11.39 (11.64) 9.33 1.69* 1.96* (8.36)*
- ----------------------------------------------------------------------------------------
March (2.56) 8.41 13.66 1.80* 0.66* (3.70)*
- ----------------------------------------------------------------------------------------
April (9.59) 13.30 3.61 (7.23)* 18.14* (5.48)*
- ----------------------------------------------------------------------------------------
May (7.40) (8.66) 1.24 13.87* 2.79* 0.55*
- ----------------------------------------------------------------------------------------
June (18.98) 10.60 7.45 10.41* 2.19* 3.65*
- ----------------------------------------------------------------------------------------
July (17.62) (6.00) (2.05)* 1.54* 16.60*
- ----------------------------------------------------------------------------------------
August (2.17) 4.72 0.41* (3.65)* 0.72
- ----------------------------------------------------------------------------------------
September 10.09 (0.30) 9.16* (5.62)* (2.95)*
- ----------------------------------------------------------------------------------------
October 3.79 2.94 (4.89)* 3.67* (5.10)*
- ----------------------------------------------------------------------------------------
November 15.10 9.17 10.10* (2.41)* 2.52*
- ----------------------------------------------------------------------------------------
December 7.58 8.84 4.46* 10.24* 1.45*
- ----------------------------------------------------------------------------------------
Compound Rate of (27.55) 26.86 59.76 38.09 36.12 (8.01)
Return (6 months)
- ----------------------------------------------------------------------------------------

* Represents periods in which the account whose beneficiary is a principal of Echelon
consisted of 50% or more of the total nominal amount of funds under management.

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

</TABLE>

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HYMAN BECK & COMPANY, INC.

BACKGROUND AND MANAGEMENT

Hyman Beck & Company, Inc. ("HB&Co.") was incorporated under the laws
of the State of Delaware in February 1991 to engage in the business of offering
advisory and portfolio management services to both retail and institutional
investors in commodity interest contracts. HB&Co. is registered as a commodity
trading advisor and commodity pool operator with the CFTC and is a member of the
NFA in such capacities. HB&Co.'s principal office is located at 6 Campus Drive,
Parsippany, New Jersey 07054. THE REGISTRATION OF HB&CO. WITH THE CFTC AND
HB&CO.'S MEMBERSHIP IN NFA MUST NOT BE TAKEN AS AN INDICATION THAT ANY SUCH
AGENCY OR SELF-REGULATORY BODY HAS RECOMMENDED OR APPROVED HB&CO. OR THE TRUST.

The principals and key personnel of HB&Co. are listed below. HB&Co.
is wholly-owned by Mr. Hyman and Mr. Beck.

ALEXANDER HYMAN is the President and a principal of HB&Co. Mr. Hyman
is also a fifty percent shareholder of HB&Co. Mr. Hyman, along with Mr. Beck,
is directly responsible for all trading and money management decisions made by
HB&Co. From 1983 through February 1991, Mr. Hyman was employed by Dean Witter
Reynolds Inc. ("Dean Witter"), a registered futures commission merchant, where,
at the time of his departure, he was First Vice President and Associate Director
of the Managed Futures Division and a Director and principal of Dean Witter
Futures & Currency Management Inc. ("DWFCM"), a registered commodity trading
advisor. Mr. Hyman was also a Director of Demeter Management Corporation, the
sponsor of all of Dean Witter's public futures funds. While at Dean Witter, Mr.
Hyman was responsible for the development of managed futures products. Mr.
Hyman graduated from Hofstra University in May 1983 with a B.B.A. degree in
International Business and Economics.

CARL J. BECK is Vice President, Secretary, Treasurer and a principal
of HB&Co. Mr. Beck is also a fifty percent shareholder of HB&Co. Mr. Beck,
along with Mr. Hyman, is directly responsible for all trading and money
management decisions made by HB&Co. From 1985 through February 1991, Mr. Beck
was employed by Dean Witter, a registered futures commission merchant, where, at
the time of his departure, he held the position of Vice President and Senior
Portfolio Manager. Mr. Beck was also a Vice President and principal of DWFCM, a
registered commodity trading advisor, where he was responsible for day-to-day
management and trading activities. Prior to joining Dean Witter, Mr. Beck was
employed by J. Aron & Co., a commodity trading firm. As of April 1994, Mr. Beck
was appointed to and serves on the Board of Managers of the Coffee, Sugar &
Cocoa Exchange, Inc. Mr. Beck graduated magna cum laude from Fordham University
in May 1983 with a B.A. degree in Economics and earned an M.B.A. degree in
Finance from New York University in May 1989.

CHRIS J. GARAVENTE is a principal of HB & Co. Mr. Garavente is
responsible for strategic planning, business management, product development and
new client relationships. Prior to joining HB & Co. in April 1997, Mr.
Garavente was employed by PaineWebber, Inc. from February 1990 through February
1996. He had capital commitment responsibility for U.S. Treasuries, federal
agency securities, futures, options, derivatives, and fixed income derivatives.
His management responsibilities included taxable fixed income trading, strategic
planning, balance sheet allocation, financing, economic and quantitative
research. At the time of his departure he held the title of Managing Director
and Global Risk Manager supervising over 500 professionals globally. He also
served on the Asset/Liability Committee and Firm's Operating Committee. From
1984 to 1990, Mr. Garavente was employed by Merrill Lynch & Co., Inc. where he
held the title of Managing Director. At the time of his departure, he was
responsible for U.S. government bond trading, financing, yield curve arbitrage
and proprietary trading. Mr. Garavente graduated from Cornell University in
1977 with a B.S. degree in business.

JOHN J. MCCORMICK is a principal of HB&Co. Mr. McCormick is directly
responsible for the implementation of trading decisions for HB&Co.'s commodity
interest portfolios. Prior to joining HB&Co., Mr. McCormick was employed by
Dean Witter from 1986 through February 1991 where, at the time of his departure,
he held the position of Assistant Vice President and Internal Accounts Manager.
Mr. McCormick is also responsible for generating most of the research reports
used by Messrs. Hyman and Beck in determining their trading decisions. Mr.
McCormick graduated from Fordham University in 1986 with a B.S. degree in
Accounting and earned an M.B.A. degree in Finance from Fordham University in May
1993.

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TROY W. BUCKNER is a principal of HB&Co. Mr. Buckner is responsible
for research activities at HB&Co. Prior to joining HB&Co. in June 1995, Mr.
Buckner was a principal at Classic Capital, Inc., an international investment
management firm, where he designed systematic trading programs from January 1994
to June 1995. From December 1989 to January 1994, Mr. Buckner was self-employed
as an independent trader while developing an advanced architecture useful in the
modeling of financial and commodity market prices. From March 1989 to December
1989, Mr. Buckner traded energy futures contracts for George E. Warren Corp., an
energy trading firm. From June 1986 to March 1989, Mr. Buckner was employed by
Salomon Brothers Inc, a securities brokerage and investment firm, where he
specialized in the sale of stock market portfolios as well as futures and option
strategies. Mr. Buckner graduated from the University of Delaware with a B.S.
degree in Finance in 1984 and earned an M.B.A. degree from the University of
Chicago in 1986.

DAVID B. FULLER is Chief Financial Officer and a principal of HB&Co.
Mr. Fuller is responsible for accounting and administration. Prior to joining
HB&Co. in March 1994, Mr. Fuller was employed by Link Strategic Investors, Inc.,
an international investment management firm ("Link"), where, at the time of his
departure, he held the position of Senior Financial Officer. Prior to joining
Link in January 1993, Mr. Fuller was the Senior Financial Officer for Bearbull
Investment Products (U.S.A.), an international investment management firm. From
January 1989 to July 1991, Mr. Fuller was Controller of Rayner & Stonington,
L.P., a registered commodity trading advisor, where he was responsible for
accounting and financial reporting. From October 1984 to December 1988 Mr.
Fuller was Controller and Assistant Treasurer of Gill and Duffus Inc., members
of the Coffee, Sugar & Cocoa Exchange, Inc. Mr. Fuller began his career in 1978
as a staff accountant for Krieger & Schissel, a public accounting firm and is a
member of the American Institute of Certified Public Accountants and the New
York State Society of Certified Public Accountants. Mr. Fuller graduated from
Lehigh University in May 1978 with a B.S. degree in Accounting.

RICHARD A. DEFALCO is Vice President, Director of Marketing and a
principal of HB & Co. Mr. DeFalco is responsible for marketing, client services
and support for the firm. Prior to joining HB & Co. in April 1997, Mr. DeFalco
was employed by PaineWebber, Inc. from May 1989 through March 1997, where at the
time of his departure, he held the position of National Marketing Manager. Mr.
DeFalco's responsibilities included the marketing of managed futures and hedge
fund products in addition to being a member of PaineWebber's Managed Futures
Product selection committee. Mr. DeFalco was also an advisory officer to
PaineWebber Futures Management Corporation, a registered commodity pool
operator. Mr. DeFalco began his career at PaineWebber in the futures Credit
Department.

JOHN S. RYAN is responsible for systems management and program design
at HB&Co. Prior to joining HB&Co. in March 1993, Mr. Ryan was employed by
International Business Machines from February 1988 to March 1993, where he held
various positions and, most recently, was responsible for Corporate Networks
Design and Implementation in the New York metropolitan area. Mr. Ryan graduated
from Baruch College in May 1991 with a B.B.A. degree in Computer Information
Systems.

DEIRDRE P. MURRAY is responsible for the implementation of all trading
decisions for HB&Co.'s commodity interest portfolios. Prior to becoming a
trader, Ms. Murray held various positions since joining HB&Co. in August 1991,
where, most recently, she was responsible for performance reporting as well as
preparation of daily trading reports. Ms. Murray graduated from Iona College in
May 1991 with a B.B.A. degree in Accounting.

MARCIA L. GAETA is responsible for the implementation of trading
decisions for HB&Co.'s commodity interest portfolios. Prior to joining HB&Co.
in October 1994, Ms. Gaeta held various positions within the Managed Futures
Division at Dean Witter from May 1983 through September 1994, where most
recently, she held the position of Head Trader. Ms. Gaeta graduated from
Waynesburg College in May 1981 with a B.A. degree in Psychology.

TRADING STRATEGY

TECHNICAL TRADING

HB&Co. relies primarily on technical analysis and believes that future
price movements in all markets may be more accurately anticipated by analyzing
historical price movements within a quantitative framework rather than
attempting to predict or forecast changes in price through fundamental economic
analysis. The trading methodologies employed by HB&Co. are based on programs
analyzing a large number of interrelated mathematical and statistical formulas
and techniques which are quantitative, proprietary in nature and which have been
developed by Mr. Beck and Mr. Hyman.

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TECHNICAL, TREND-FOLLOWING APPROACH

The profitability of HB&Co.'s trading pursuant to technical
trend-following analysis, emphasizing mathematical and charting approaches, will
depend upon the occurrence in the future, as in the past, of major price trends
in some markets. If there are no price trends, HB&Co.'s trend-following trading
methodologies are likely to be unprofitable. There have been trendless periods
in the past which can be expected to recur.

Technical trend-following trading approaches will seldom direct market
entry or exit at the most favorable price in the particular market trend.
Rather, these types of trading styles seek to close out losing positions quickly
and to hold profitable positions, or portions thereof, for as long as the
trading systems determine that the particular market trend continues to exist.
There can be no assurance that profitable positions can be liquidated at the
most favorable price in a particular trend. As a result, the number of losing
transactions can be expected to exceed the number of profitable transactions.
However, if such trend-following approaches are successful, these losses should
be more than offset by a few large gains.

HB&Co. employs risk management techniques which have been developed by
Messrs. Beck and Hyman with the objectives of limiting losses, controlling
market exposure and capturing profits. HB&Co.'s trend-following trading
approach also includes a "neutral mode" which may indicate that no position is
appropriate in a particular contract or contract group in an attempt to preserve
capital in trendless markets.

TECHNICAL, NON-LINEAR APPROACH

HB&Co. has recently developed a technical, systematic program that
combines conservative risk control principles with non-linear modeling
techniques. This technical approach to the markets does not depend on the
occurrence of major price trends in order to be profitable. Rather, trades are
made under various market conditions and are typically of short duration,
averaging six days in length. Unlike HB&Co.'s other strategies, this program
may buy or sell volatility depending on recent market conditions. A key
distinguishing feature of this approach is its ability to trade correlated
markets differently. It is common, for example, for this portfolio to be long
(buy) soybeans and short (sell) soybean meal or to be long heating oil and short
crude oil. HB&Co. believes that the non-linear models utilized in this approach
should excel at pattern recognition and the detection of conditional
relationships between and among different data inputs.

The process of generating trades begins with the selection of a price
target, with respect to given market conditions, reflecting the likelihood that
short-term reward is substantially in excess of risk. An assortment of time
series variables are calculated as input to be used in the modeling process.
With each variable an attempt is made to depict a different facet of a given
market's historical price movement.

HB&Co. believes that since the timing of trades is significantly
random, diversification and expected returns may be enhanced by adding viable
markets to the portfolio's mix. Positions are established when the models
indicate a high probability of substantial reward relative to anticipated risk.
Positions may be initiated in either trending or choppy markets. Although
positions are established at frequent intervals, there is no position
approximately 60% of the time in any given market. The trading philosophy
assumes that there are many significant short-term moves, but that relatively
few of them offer the desired risk/reward ratio.

IMPLEMENTATION OF TRADING APPROACHES

HB&Co., from time to time, may change or refine the trading systems
and methodologies employed to manage its accounts. Additional trading systems
may be developed by the principals of HB&Co. and may be employed in trading
accounts managed by HB&Co., including the Trust's account. The principals of
HB&Co. review and maintain discretion over all computer-generated trading
parameters.

Although technical trading systems normally consist of a series of
fixed rules applied manually or by computer, such systems still require certain
subjective judgments and decisions. For example, with respect to each commodity
interest portfolio, Messrs. Beck and Hyman will select the contracts and markets
which will be followed, the contracts and markets which will be actively traded
and the contract months in which positions will be maintained. Messrs. Beck and
Hyman will also determine when to roll over a position (I.E., when to liquidate
a position which is about to expire

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and initiate a new position in a more distant contract month). These types of
decisions require consideration of, among other things, the volatility of a
particular market, the pattern of price movements (both interday and intraday),
open interest, trading volume, changes in spread relationships between various
contract months and between various contracts and overall portfolio balance and
risk exposure. With respect to the timing and execution of trades, Messrs. Beck
and Hyman may also rely to some extent on the judgment of others, such as floor
brokers. No assurance can be made that consideration will be given to any or
all of the foregoing factors by Messrs. Beck and Hyman with respect to every
trade or that consideration of any of such factors in a particular situation
will lessen the risk of loss. Investors should be aware that such decisions may
involve a substantial element of judgment and that such persons' unavailability
to make such decisions could materially impair the operation of HB&Co.'s trading
approach.

Along with the subjective decision-making authority reserved for
Messrs. Beck and Hyman, HB&Co. also maintains a procedure for determining the
appropriate quantity of contracts to be traded for an account of a given size
and for all accounts. HB&Co. may continually adjust its trading portfolios and
the position size of an order immediately prior to placement, based on such
factors as past market volatility, prices of commodities, amount of risk,
potential return and margin requirements. The decision not to trade a certain
commodity interest at certain times or to reduce the number of contracts traded
in a particular commodity interest may result in missing significant profit
opportunities that otherwise might be captured if HB&Co. depended solely on the
computer-based aspects of its trading strategy or on different trading
strategies altogether.

LEVERAGE

HB&Co. has responsibility for controlling the leverage utilized in its
trading portfolios and may increase or decrease the amount of leverage applied
to assets allocated to one or more of the trading portfolios described herein.
The initial leveraging, and any subsequent "up-" or "de-leveraging," will be
primarily based on subjective evaluations of market conditions, past performance
of particular portfolios, risk exposure and other factors. The use of
additional leverage in commodity interest trading, which is already highly
leveraged, may increase profits (and losses).

OVERVIEW OF COMMODITY INTEREST PORTFOLIOS

HB&Co. currently offers five (5) alternative commodity interest
portfolios in which to participate: a Diversified Portfolio, a foreign currency
FX Portfolio, a Global Portfolio, a Short-Term Portfolio and an Asset Allocation
Portfolio. The following is a list of certain of the different commodity
interests which HB&Co. may trade in its portfolios. Mr. Beck and Mr. Hyman, at
their discretion and according to their research, may add or delete different
types of commodity interests from any of the trading portfolios.

INTEREST RATES (U.S. DOLLAR). Treasury Bonds, Treasury Notes,
Eurodollars, Treasury Bills and Municipal Bonds.

INTEREST RATES (NON-U.S. DOLLAR). British Long Gilts, British Short
Sterling, German Euromarks, German Bonds, Japanese Euroyen, Japanese Government
Bonds, French Notional Bonds, French PIBOR, Italian Government Bonds, Australian
Government Bonds, Australian Bank Bills and Canadian Government Bonds.

STOCK INDICES (U.S. DOLLAR). NYSE Composite and S&P 500.

STOCK INDICES (NON-U.S. DOLLAR). British FTSE, Japanese NIKKEI,
French CAC-40 and Australian All Ordinaries.

METALS. Gold, Silver, Platinum, Copper, Aluminum and Zinc.

CURRENCIES. British Pound, German Mark, Japanese Yen, Swiss Franc,
Canadian Dollar, Australian Dollar, French Franc, Italian Lira, Spanish Peseta,
New Zealand Dollar, Swedish Krona, Dutch Guilder, Belgian Franc and Malaysian
Ringgit.

AGRICULTURAL COMMODITIES. Corn, Wheat, Soybeans, Soymeal and Soyoil.

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ENERGIES. Crude Oil, Heating Oil, Unleaded Gas and Gas Oil.

OTHER COMMODITIES. Coffee, Sugar, Cocoa, Cotton, Cattle, Hogs and
Porkbellies.

THE GLOBAL PORTFOLIO

HB&Co. will trade the Global Portfolio on behalf of the Trust.
HB&Co.'s Global Portfolio participates in many of the internationally-traded
futures and forward markets not necessarily represented in the Diversified
Portfolio or the FX Portfolio. The Global Portfolio trades a portfolio of over
30 futures and forward markets worldwide with a concentration in world interest
rate and other financial markets.

THE DIVERSIFIED PORTFOLIO

HB&Co.'s Diversified Portfolio offers access to international markets
not typically represented in a traditional investment portfolio. The
Diversified Portfolio trades a portfolio of over 40 diverse futures, forward and
cash markets and offers diversification into global financial and tangible
assets including agricultural items, energy products, interest rates and stock
indices, foreign currencies and metals.

THE FX PORTFOLIO

HB&Co.'s FX Portfolio trades in the world currency markets. The FX
Portfolio may trade up to a total of 40 non-U.S. crossrates (trading non-U.S.
currencies vs. other non-U.S. currencies) and outrights (trading non-U.S.
currencies vs. the U.S. dollar).

THE SHORT-TERM PORTFOLIO

HB&Co.'s Short-Term Portfolio is a systematic program combining money
management principles with non-linear modeling techniques. The Short-Term
Portfolio may buy or sell volatility, and currently trades 44 markets with
positions in an average of 20 futures and forward markets at any point in time.

THE ASSET ALLOCATION PORTFOLIO

HB&Co.'s Asset Allocation Portfolio commenced trading in 1992,
allocating and reallocating assets among the Global, FX and Diversified
Portfolios in an effort to minimize risk and maximize profit opportunities. The
Asset Allocation Portfolio currently engages, in varying degrees, the Global,
FX, Diversified and Short-Term Portfolios or some subset thereof. The
Short-Term Portfolio has only recently been included in the Asset Allocation
Portfolio.

PAST PERFORMANCE INFORMATION

The following information describes the composite actual performance
of all customer accounts managed by HB&CO. As of JUNE 30, 1997, HB&Co. was
managing approximately $220 million (excluding "notional" equity) of customer
funds in the futures and forwards markets. The performance information set
forth below is current as of JUNE 30, 1997.

When reviewing the information below, investors should be aware that
composite performance results tend to create an "averaging effect" on the
performance of accounts. Further, investors should note that different accounts
(even though they have generally been traded according to the same trading
approach and in the same commodity interest portfolios) have had varying
investment results as described below.

The reasons for varying investment results among accounts trading the
same commodity interest portfolios include: (1) the period during which accounts
were active; (2) changes in HB&Co.'s trading methodology -- although all
accounts were traded in accordance with the same trading approach, such approach
did change periodically as a result of an ongoing program of research and
development; (3) the size of accounts -- which influenced the number of
different markets in which the account participated and the number of contracts
in each market traded; (4) the brokerage commission

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rates paid by accounts and when such commissions were charged to accounts;
(5) the amount of interest income earned by accounts; (6) the rates of fees and
amount of administrative costs paid by accounts; (7) the timing of orders to
open or close positions; and (8) the market conditions in which accounts were
traded, which in part determine the quality of trade executions. Thus, the
results of individual accounts in the following performance record may be better
or worse than the composite performance results shown, depending upon such
factors.

The Asset Allocation Portfolio represents accounts trading a
combination of each of the Global, FX, Diversified, and/or Short-Term
Portfolios; therefore, the assets and Rates of Return set forth in the summary
performance information and chart are also reflected in the assets and Rates of
Return set forth in the individual Global, FX, Diversified, and Short-Term
Portfolio summaries . The first account traded pursuant to the Asset Allocation
Portfolio was established in April 1992 with all of its assets allocated to
HB&Co.'s Diversified Portfolio; in August 1992 the assets of such account were
reallocated to the Global and Diversified Portfolios; and in January 1993 the
assets of such account were allocated among the Global, FX and Diversified
Portfolios. From January 1993 through November 1996, all asset allocation
portfolio accounts have at all times included allocations among the Global, FX
and Diversified Portfolios. The Short-Term Portfolio was added to the Asset
Allocation Portfolio in November 1996.

[Remainder of page left blank intentionally.]

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<PAGE>

THE GLOBAL PORTFOLIO

HB&Co. will trade this portfolio on behalf of the Trust. The
following summary performance information and chart reflect the composite
performance results of the Global Portfolios directed by HB&Co for the five-year
period from January 1992 through JUNE 1997.

NAME OF CTA: Hyman Beck & Company, Inc.
NAME OF PROGRAM: Global Portfolio
INCEPTION OF CLIENT ACCOUNT TRADING BY CTA: March 1991
INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM: April 1991
NUMBER OF OPEN ACCOUNTS: 21
AGGREGATE ASSETS IN ALL PROGRAMS (EXCLUDING "NOTIONAL" FUNDS): $220,337,570
AGGREGATE ASSETS IN ALL PROGRAMS (INCLUDING "NOTIONAL" FUNDS): $245,388,102
AGGREGATE ASSETS IN GLOBAL PORTFOLIO (EXCLUDING "NOTIONAL" FUNDS):
$179,188,813
AGGREGATE ASSETS IN GLOBAL PORTFOLIO (INCLUDING "NOTIONAL" FUNDS): $187,504,026
LARGEST MONTHLY DRAWDOWN: (12.77%) (12/96)
LARGEST PEAK-TO-VALLEY DRAWDOWN: (13.90%) (7/94 - 2/95)
NUMBER OF PROFITABLE CLOSED ACCOUNTS: 23
NUMBER OF UNPROFITABLE CLOSED ACCOUNTS: 17

- ----------------------------------------------------------------------------------------
Monthly Performance 1997 (%) 1996(%) 1995(%) 1994(%) 1993(%) 1992(%)
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
January 8.76 3.97 (6.35) (0.45) (3.97) (7.45)
- ----------------------------------------------------------------------------------------
February 1.69 (8.23) 9.02 (7.45) 8.65 (3.44)
- ----------------------------------------------------------------------------------------
March (0.23) (1.21) 18.71 12.48 2.10 3.15
- ----------------------------------------------------------------------------------------
April (2.77) 2.39 6.22 (2.17) 5.65 (3.38)
- ----------------------------------------------------------------------------------------
May 0.20 (3.20) 6.34 4.22 4.55 2.51
- ----------------------------------------------------------------------------------------
June 1.79 1.38 (1.12) 5.14 (4.95) 13.10
- ----------------------------------------------------------------------------------------
July 1.80 (1.68) (4.30) 5.00 18.27
- ----------------------------------------------------------------------------------------
August (1.15) (1.80) (4.40) 0.51 6.40
- ----------------------------------------------------------------------------------------
September 4.36 (2.16) (2.85) (0.80) (6.68)
- ----------------------------------------------------------------------------------------
October 11.17 (1.08) 4.72 (0.63) 3.39
- ----------------------------------------------------------------------------------------
November 9.79 1.27 3.43 (2.78) (0.37)
- ----------------------------------------------------------------------------------------
December (8.71) 0.80 (2.95) 1.34 (1.88)
- ----------------------------------------------------------------------------------------
Compound Rate 9.43 10.82 29.12 3.81 14.63 22.56
Of Return (6 months)
- ----------------------------------------------------------------------------------------

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

</TABLE>

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<PAGE>

DIVERSIFIED PORTFOLIO

The following summary performance information reflects the composite
performance results of the Diversified Portfolios directed by HB&Co. for the
five-year period from January 1992 through JUNE 1997.

NAME OF CTA: Hyman Beck & Company, Inc.
NAME OF PROGRAM: Diversified Portfolio
INCEPTION OF CLIENT ACCOUNT TRADING BY CTA: March 1991
INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM: March 1991
NUMBER OF OPEN ACCOUNTS: 6
AGGREGATE ASSETS IN ALL PROGRAMS (EXCLUDING "NOTIONAL" FUNDS): $220,337,570
AGGREGATE ASSETS IN ALL PROGRAMS (INCLUDING "NOTIONAL" FUNDS): $245,388,102
AGGREGATE ASSETS IN DIVERSIFIED PROGRAM (EXCLUDING "NOTIONAL" FUNDS): $1,848,032
AGGREGATE ASSETS IN DIVERSIFIED PROGRAM (INCLUDING "NOTIONAL" FUNDS): $4,965,245
LARGEST MONTHLY DRAWDOWN: (15.90% ) (2/94)
LARGEST PEAK-TO-VALLEY DRAWDOWN: (30.42% ) (8/93 - 12/95)
NUMBER OF PROFITABLE CLOSED ACCOUNTS: 18
NUMBER OF UNPROFITABLE CLOSED ACCOUNTS: 23
1997 COMPOUND RATE OF RETURN: 6.97% (6 months)
1996 COMPOUND RATE OF RETURN: (8.33)%
1995 COMPOUND RATE OF RETURN: (4.14)%
1994 COMPOUND RATE OF RETURN: (7.07)%
1993 COMPOUND RATE OF RETURN: 13.96%
1992 COMPOUND RATE OF RETURN: 20.12%

The FX Portfolio

The following summary performance information reflects the composite
performance results of the FX Portfolios directed by HB&Co. for the five-year
period from January 1992 through JUNE 1997.

NAME OF CTA: Hyman Beck & Company, Inc.
NAME OF PROGRAM: FX Portfolio
INCEPTION OF CLIENT ACCOUNT TRADING BY CTA: March 1991
INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM: March 1991
NUMBER OF OPEN ACCOUNTS: 7
AGGREGATE ASSETS IN ALL PROGRAMS (EXCLUDING "NOTIONAL" FUNDS): $220,337,570
AGGREGATE ASSETS IN ALL PROGRAMS (INCLUDING "NOTIONAL" FUNDS): $245,388,102
AGGREGATE ASSETS IN FX PROGRAM (EXCLUDING "NOTIONAL" FUNDS): $17,433,722
AGGREGATE ASSETS IN FX PROGRAM (INCLUDING "NOTIONAL" FUNDS): $19,052,819
LARGEST MONTHLY DRAWDOWN: (18.72% ) (11/94)
LARGEST PEAK-TO-VALLEY DRAWDOWN: (52.49% ) (8/93 - 1/95)
NUMBER OF PROFITABLE CLOSED ACCOUNTS: 6
NUMBER OF UNPROFITABLE CLOSED ACCOUNTS: 31
1997 COMPOUND RATE OF RETURN: 21.04% (6 months)
1996 COMPOUND RATE OF RETURN: 6.65%
1995 COMPOUND RATE OF RETURN: 40.58%
1994 COMPOUND RATE OF RETURN: (20.63)%
1993 COMPOUND RATE OF RETURN: 0.86%
1992 COMPOUND RATE OF RETURN: 34.69%

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
THE TRUST'S ACCOUNT IS NOT CURRENTLY TRADED
PURSUANT TO THE FOREGOING PROGRAMS.

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<PAGE>

Asset Allocation Portfolio

The following summary performance information and table reflect the
composite performance results of the Asset Allocation Portfolios (which is
included in the preceding PERFORMANCE SUMMARIES) directed by HB&Co. from April
1992 through JUNE 1997.

<TABLE>

<S> <C>
NAME OF CTA: Hyman Beck & Company, Inc.
NAME OF PROGRAM: Asset Allocation Portfolio
INCEPTION OF CLIENT ACCOUNT TRADING BY CTA: March 1991
INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM: April 1992
NUMBER OF OPEN ACCOUNTS: 4
AGGREGATE ASSETS IN ALL PROGRAMS (EXCLUDING "NOTIONAL" FUNDS): $220,337,570
AGGREGATE ASSETS IN ALL PROGRAMS (INCLUDING "NOTIONAL" FUNDS): $245,388,102
AGGREGATE ASSETS IN ASSET ALLOCATION PROGRAM (EXCLUDING "NOTIONAL" FUNDS): $15,314,055
AGGREGATE ASSETS IN ASSET ALLOCATION PROGRAM (INCLUDING "NOTIONAL" FUNDS): $27,753,336
LARGEST MONTHLY DRAWDOWN: (9.38% ) (2/96)
LARGEST PEAK-TO-VALLEY DRAWDOWN: (18.30% ) (8/93 - 1/95)
NUMBER OF PROFITABLE CLOSED ACCOUNTS: 1
NUMBER OF UNPROFITABLE CLOSED ACCOUNTS: 2
1997 COMPOUND RATE OF RETURN: 16.54% (6 months)
1996 COMPOUND RATE OF RETURN: 1.67%
1995 COMPOUND RATE OF RETURN: 33.35%
1994 COMPOUND RATE OF RETURN: (1.29)%
1993 COMPOUND RATE OF RETURN: 18.58%
1992 COMPOUND RATE OF RETURN: 36.07% (9 months)
</TABLE>

THE SHORT-TERM PORTFOLIO

HB&Co.'s Short-Term Portfolio has been utilized only since April 1,
1996 in the trading of customer funds. The following summary performance
information reflects the composite performance results of the Short-Term
Portfolios directed by HB&Co THROUGH JUNE 1997.

NAME OF CTA: Hyman Beck & Company, Inc.
NAME OF PROGRAM: Short-Term Portfolio
INCEPTION OF CLIENT ACCOUNT TRADING BY CTA: March 1991
INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM: April 1996
NUMBER OF OPEN ACCOUNTS: 12
AGGREGATE ASSETS IN ALL PROGRAMS (EXCLUDING "NOTIONAL" FUNDS): $220,337,570
AGGREGATE ASSETS IN ALL PROGRAMS (INCLUDING "NOTIONAL" FUNDS): $245,388,102
AGGREGATE ASSETS IN SHORT-TERM PROGRAM (EXCLUDING "NOTIONAL" FUNDS):$ 21,866,347
AGGREGATE ASSETS IN SHORT-TERM PROGRAM (INCLUDING "NOTIONAL" FUNDS):$ 33,865,365
LARGEST MONTHLY DRAWDOWN: (8.83)% (8/96)
LARGEST PEAK-TO-VALLEY DRAWDOWN: (12.47%) (11/96 - 12/96)
NUMBER OF PROFITABLE CLOSED ACCOUNTS: 1
NUMBER OF UNPROFITABLE CLOSED ACCOUNTS: 1
1997 COMPOUND RATE OF RETURN: 32.43% (6 months)
1996 COMPOUND RATE OF RETURN: 0.58% (9 months)
1995 COMPOUND RATE OF RETURN: N/A
1994 COMPOUND RATE OF RETURN: N/A
1993 COMPOUND RATE OF RETURN: N/A
1992 COMPOUND RATE OF RETURN: N/A

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
THE TRUST'S ACCOUNT IS NOT CURRENTLY TRADED
PURSUANT TO THE FOREGOING PROGRAMS.

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WILLOWBRIDGE ASSOCIATES INC.

BACKGROUND AND MANAGEMENT

Willowbridge Associates Inc. ("Willowbridge") is a Delaware
corporation organized on January 29, 1988. Willowbridge's main business address
is 101 Morgan Lane, Suite 180, Plainsboro, New Jersey 08536 and its telephone
number is (609) 936-1100. Willowbridge has been registered pursuant to the
Commodity Exchange Act as a commodity pool operator and a commodity trading
advisor and has been a commodity pool operator and commodity trading advisor
member of the NFA since May 3, 1988. THE REGISTRATION OF WILLOWBRIDGE WITH THE
CFTC AND WILLOWBRIDGE'S MEMBERSHIP IN NFA MUST NOT BE TAKEN AS AN INDICATION
THAT ANY SUCH AGENCY OR SELF-REGULATORY BODY HAS RECOMMENDED OR APPROVED
WILLOWBRIDGE OR THE TRUST. The primary activity of Willowbridge is to buy, sell
(including short sales), spread or otherwise trade in commodity futures
contracts, options on futures contracts, forward contracts, commodity options,
physical commodities, currencies and other commodity instruments. Willowbridge
may, to a limited extent, also trade in other instruments. In addition,
Doublewood, Inc. ("Doublewood") and Union Spring Asset Management, Inc. ("Union
Spring") are registered commodity pool operators and commodity trading advisors
and NFA members affiliated with Willowbridge.
The trading principals of Willowbridge are Philip L. Yang and Michael Y. Gan.

MANAGEMENT OF THE COMMODITY TRADING ADVISOR

PHILIP L. YANG has been the sole shareholder, Director and President
of Willowbridge since September 1, 1992, and also held those positions from the
time he formed Willowbridge in January 1988 through September 1989. Mr. Yang is
registered as an associated person of Willowbridge. He is individually
registered pursuant to the Commodity Exchange Act as a commodity pool operator
and commodity trading advisor and is a member of the NFA in such capacities. He
is also a principal and an associated person of Doublewood and Union Spring.
From 1983 through August 1988 and from October 1989 through August 1992, Mr.
Yang was a Senior Vice President at Caxton Corporation, a commodity trading
advisory firm, serving initially as Director of Research, where his research
concentration was in the development and application of computerized trading
models for a broad range of financial markets, and later as Director of
Commodity Trading. Mr. Yang obtained a bachelor's degree with honors from the
University of California at Berkeley, where he was inducted into Phi Beta Kappa.
He received his master's degree from the Wharton School of the University of
Pennsylvania. He co-authored with Richard G. Faux, Jr. "Managed Futures: The
Convergence with Hedge Funds " a Chapter in EVALUATING AND IMPLEMENTING HEDGE
FUND STRATEGIES, a book published in 1996 by Euromoney Publications.

MICHAEL Y. GAN has been the Executive Vice President of Willowbridge
since September 1, 1992. Mr. Gan is registered as an associated person of
Willowbridge. He is individually registered pursuant to the Commodity Exchange
Act as a commodity pool operator and commodity trading advisor and is a member
of the NFA in such capacities. He is also a principal and an associated person
of Doublewood and Union Spring. Mr. Gan was the sole shareholder, Director and
President of Willowbridge from October 1989 through August 1992. From 1983 to
1989, he worked in the foreign exchange trading group at Marine Midland Bank in
New York. In this capacity, Mr. Gan was responsible for research into technical
analysis, as well as proprietary trading for the firm in both currency futures
and options. He had been promoted to Assistant Vice President prior to his
resignation. Mr. Gan graduated summa cum laude from the University of the
Philippines with a B.S. in Chemical Engineering and subsequently graduated with
honors from the Wharton School of the University of Pennsylvania with an M.B.A.
in Finance.

THERESA C. MORRIS is the Senior Vice President of Willowbridge. Ms.
Morris has been employed by Willowbridge since its inception in August 1988 and
is registered as an associated person of Willowbridge. Ms. Morris is also a
principal and an associated person of Doublewood and Union Spring. Ms. Morris
oversees administration, operations and compliance at Willowbridge. Prior to
her current duties, Ms. Morris was responsible for analyzing and trading the
technical signals generated by the computerized trading models. Ms. Morris has
twenty years of experience in the futures and financial industry. She attended
Brookdale College, majoring in international business.

RICHARD G. FAUX, JR. has been Executive Director of Willowbridge since
April 1995. He is registered as an associated person and a principal of
Willowbridge. He is also an associated person of Doublewood and President, a
principal and associated person of Union Spring. Mr. Faux co-founded MC Baldwin
Financial Company ("MC Baldwin")

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in 1989 and served as its Co-Chief Executive until April 1995. MC Baldwin is an
international trading manager which develops futures funds for its partner,
Mitsubishi Corporation, and other institutional clients. Prior to forming MC
Baldwin, Mr. Faux was President of Merrill Lynch Options/Futures Management
Inc., a futures fund subsidiary of Merrill Lynch. Before Mr. Faux's joining
Merrill Lynch in 1985, it had raised only $13 million in futures funds. When he
left, the company had raised $930 million, including one of the first
multi-advisor futures funds. Previously, he spent four years at Thomson
McKinnon Securities, Inc. where he helped develop futures funds, including one
of the first financial futures funds. Earlier, Mr. Faux spent ten years at Kuhn
Loeb & Co. (now Lehman Brothers). He is a graduate of Brown University and the
Columbia University Graduate School of Business.

JOHN C. PLIMPTON is Director of Investment Services. He joined
Willowbridge in February 1995 and is responsible for marketing the firm's
various investment strategies as well as maintaining client service. Mr.
Plimpton is registered as an associated person and a principal of Willowbridge.
His prior futures industry experience was with Beacon Management Corporation
(USA), a commodity trading advisor and commodity pool operator, where he held a
marketing position specializing in the Japanese institutional market from
January 1989 to December 1990. From January 1991 to August 1994, as a
representative of Prudential Life Insurance, and from August 1994 to present, as
sole shareholder and President of Plimpton Financial Group, a financial services
company, Mr. Plimpton concentrated on insurance and benefit services for wealthy
families and venture businesses. Since 1985, Mr. Plimpton has been involved in
a number of businesses privately held by his family, as well as serving as
director of Inolex Chemical Company, a specialty chemical company owned by his
family. He earned his B.A. degree in Economics from the University of Chicago
and his M.B.A. in Corporate Finance and Corporate Accounting from the William E.
Simon School of Management at the University of Rochester.

JAMES J. O'DONNELL is Vice President of Willowbridge. He oversees
Willowbridge's computer and information needs, including trading information
systems, accounting information systems and support for ongoing research of new
computerized trading systems and effectiveness testing of existing trading
systems. Mr. O'Donnell has been employed by Willowbridge since September 1,
1992. From June 1987 through August 1992, Mr. O'Donnell was Manager of Computer
Information Systems at Caxton Corporation. From April 1979 through May 1987,
Mr. O'Donnell was manager of Research Information Systems at Commodities
Corporation. Prior to that, he was employed by Penn Mutual from September 1973
through March 1979 as Senior Programmer Analyst. He is a graduate of LaSalle
University with a B.A. in mathematics.

STEVEN R. CRANE is Vice President of Willowbridge. He oversees the
accounting and financial reporting for Willowbridge. Mr. Crane has been
employed by Willowbridge since April 1993. Prior to that, he was employed by
Caxton Corporation from April 1992 to April 1993 as a Senior Accountant. From
September 1989 through April 1992, Mr. Crane worked as a Senior Auditor for
Deloitte & Touche LLP. Mr. Crane is a Certified Public Accountant and a member
of the AICPA. He graduated magna cum laude from North Carolina State University
with a B.A. in accounting.

DESCRIPTION OF WILLOWBRIDGE INVESTMENT PROGRAMS

Willowbridge currently offers clients the opportunity to have their
accounts traded pursuant to one or more of four Willowbridge Investment Programs
("Programs"). Willowbridge, pursuant to its Select Investment Program, will
trade its XLIM Trading Approach on behalf of the Trust.

THE CURRENCY INVESTMENT PROGRAM. Willowbridge has the discretionary
authority initially to allocate and subsequently reallocate the client's funds
among one or more of the seven Willowbridge Strategies to be applied exclusively
to trading futures, forward, spot and option contracts in foreign currencies.
If Willowbridge's Systems are no longer available to it (see discussion of
licensing agreement in "Description of Willowbridge Trading Strategies" section
below), Willowbridge may only use the currency portion of the XLIM and MTech
trading approaches in its trading of the Currency Investment Program. For
accounts with less than $1 million in assets, Willowbridge may not be able to
trade the full Currency portfolio.

THE PRIMARY INVESTMENT PROGRAM. Willowbridge has the discretionary
authority, based upon its periodic evaluation of market conditions, to determine
which Strategy to use for a given market. For example, if Willowbridge believes
that currently the grains are likely to perform well, it may apply the Argo and
Titan Systems to the grain markets since these Systems typically have performed
well in similar environments. Also, if Willowbridge does not believe market
conditions warrant trading a particular market, no positions will be taken.
Typically, changes in Systems used for particular

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markets are made infrequently. From January 1993 through June 1994,
Willowbridge allocated approximately equal portions of the assets traded
pursuant to the Primary Investment Program to the Argo and Vulcan Systems.
Beginning July 1994, approximately one-half of the assets traded pursuant to
Primary were allocated to the Argo System and the remaining portion was
allocated between currencies and financial instruments traded pursuant to the
Vulcan System and precious metals, grains, meats, softs and tropicals traded
pursuant to the Siren System. For accounts with less than $1 million in assets,
Willowbridge may not be able to trade the full Primary portfolio.

THE CURRENCY, FINANCIAL AND METALS ("CFM") INVESTMENT PROGRAM.
Willowbridge will apply the XLIM Trading Approach to the currency, financial and
metals markets. Under the CFM Investment Program, Willowbridge has the
discretionary authority, based primarily on analysis of technical factors,
fundamentals and market action, to trade futures, forward, spot and option
contracts in the currency, financial, and metals markets. The CFM Investment
Program is offered only on a limited basis.

THE SELECT INVESTMENT PROGRAM. Clients are permitted to determine the
initial allocation and subsequent reallocations (if any) of such clients' funds
among one or more of the Willowbridge trading strategies described below.

DESCRIPTION OF WILLOWBRIDGE TRADING STRATEGIES

It is the intention of Willowbridge to utilize one or more of its
seven Trading Strategies ("Strategies") to trade pursuant to each of the Select,
Currency and Primary Investment Programs. The Strategies include the five
Willowbridge Trading Systems ("Systems") and the XLIM and MTech discretionary
trading approaches of Mr. Yang and Mr. Gan, respectively. As the Strategies
used by Willowbridge are proprietary and confidential, the discussion below is
necessarily of a general nature and is not intended to be exhaustive.
Willowbridge reserves the right to alter its Strategies without prior approval
by, or notice to, clients.

For each Strategy, risk is managed on a market-by-market level as well
as on an overall portfolio level. On the market level, risk is managed
primarily by utilizing proprietary volatility filters. When these filters
detect a certain excessive level of volatility in a market, they will signal
that the Systems should no longer be trading in that market. In this way, the
Systems do not participate in markets in which there are extremes in market
action. On the portfolio level, risk is managed by utilizing a proprietary
portfolio cutback rule. When cumulative profits have reached a certain level,
this rule determines that positions should be halved across the entire
portfolio. In this way, risk is reduced while allowing the System to continue
to participate in the markets, albeit a reduced level. After the portfolio has
been traded at half, the rule will then determine when to increase positions to
again trade at the full level.

Pursuant to a licensing agreement between Caxton Corporation
("Caxton") and Willowbridge, Willowbridge has been granted the sole and
exclusive right to use the Systems (which do not include the XLIM and MTech
discretionary trading approaches) described below. The licensing agreement will
continue until December 31, 2001 and be renewed for successive one year terms
unless either Willowbridge or Caxton has given 90 days' notice to the other
prior to such date of its intention not to renew. The licensing agreement may
also be terminated in the case of an uncured material breach or in other
extraordinary situations. Willowbridge pays royalties to Caxton based on fees
generated by Willowbridge's trading.

THE XLIM TRADING APPROACH

Willowbridge will utilize this trading approach on behalf of the
Trust. The XLIM Trading Approach ("XLIM"), which was first applied in February
1988, is traded on a discretionary basis by Mr. Yang. Trading decisions are
based primarily on Mr. Yang's analysis of technical factors, fundamentals and
market action. XLIM trades are selected from a wide variety of futures
contracts, forwards, spot and options on United States and international
markets, including but not limited to, financial instruments, currencies,
precious and base metals and agricultural commodities. Mr. Yang reserves the
right to change the portfolio composition of XLIM. The XLIM Trading Approach is
offered only on a limited basis. While trading decisions are based on
fundamental and technical market analysis, of equal importance is the anecdotal
information Mr. Yang pieces together about specific market opportunities. Mr.
Yang emphasizes only a small number of core positions at any time, selecting
those for which the reward-to-risk is the most favorable and for which he
believes he has an advantage over conventional market expectations. Only a
small amount of capital is initially risked; incremental positions are then
added as open equity profits are built up. Likewise the additional positions
are liquidated positions are liquidated if the market moves against them.

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It is intended that approximately 15-40% of the assets under
management pursuant to the XLIM Trading Approach normally will be committed as
margin for commodity interest trading, but from time to time the percentage of
assets committed may be substantially more or less.

VULCAN TRADING SYSTEM

The Vulcan Trading System ("Vulcan") is a computerized technical
trading system. It is not a trend-following system, but does ride a trend when
the opportunity arises. Vulcan uses the concepts of pattern recognition,
support/resistance levels, and counter-trend liquidations in making trading
decisions. In effect, Vulcan is more akin to a systematic technical charting
system, as opposed to most computer systems which are based on pure
trend-following calculations.

Vulcan is based on general technical trading principles that over time
have repeatedly shown their validity as price movement forecasters. It applies
these principles to a diversified portfolio of commodities and currencies.
Given that the system is based on general principles, the system parameters used
are the same for all items in the portfolio and are not optimized. In this
manner, Vulcan minimizes the problem of data-fitting.

Vulcan determines, on a daily basis, whether to be long, short or flat
the various commodities in its portfolio. The Vulcan portfolio includes:

GRAINS: Corn, Wheat, Soybeans, Soybean Meal, Soybean
Oil, Oats, Rough Rice
PRECIOUS METALS: Gold, Silver
DOMESTIC FINANCIAL INSTRUMENTS: Treasury Bills, Treasury Bonds, Treasury
Notes, Eurodollars
FOREIGN FINANCIAL INSTRUMENTS: Japanese Bonds, Euro-Marks, Euro-Swiss,
Ten-year Notional, Bunds, PIBOR, Gilts,
Short-Sterling, Australian T-Bills,
Australian T-Bonds, Italian Bonds, Euro-Lira,
Euro-Yen
CURRENCIES: Pound Sterling, Deutschemark, Canadian
Dollar, Swiss Franc, Japanese Yen, Australian
Dollar, Mark-Yen
GENERAL: Crude Oil, Heating Oil, Unleaded Gasoline,
Natural Gas, Copper, Sugar, Coffee, Cocoa,
Cotton, Live Cattle, Live Hogs, Pork Bellies

The above list is provided only as an indication of markets traded
since Willowbridge removes or adds contracts to the list from time to time. For
accounts with less than $1 million in assets, Willowbridge may not be able to
trade the full Vulcan portfolio.

It is intended that approximately 15-40% of the assets under
management pursuant to Vulcan normally will be committed as margin for commodity
interest trading, but from time to time the percentage of assets committed may
be substantially more or less. Positions are generally held from 10 to 15
trading days.

TITAN TRADING SYSTEM

The Titan Trading System ("Titan"), which commenced trading in 1986,
is a technical trend-following system coupled with a mechanism for adding to, or
subtracting from, the initial position on a counter-trend or retracement basis
as described below.

Unlike Vulcan, Titan applies various technical factors in an effort to
monitor the overall market environment to attempt to recognize major trends. If
Titan initially perceives a low degree of risk, a relatively greater number of
positions are initiated. Likewise, when Titan initially perceives a high level
of risk, relatively fewer positions will be initiated until a lower degree of
risk is perceived. Thereafter positions may be added or subtracted as a result
of a perceived temporary discontinuance of a trend. This ability to adjust the
number of positions held is Titan's primary risk-control tool. Through this
combination Titan attempts to maximize profits in markets with strong secular
trends running over a six- to twelve-month period of time, while minimizing the
risks which otherwise involve taking a large position at the start of the
perceived move.

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Titan's portfolio composition generally is the same as Vulcan's,
although the number of days Titan will hold a position, based on an average of
the number of days the initial base position would be held combined with the
number of days any additional positions would be held, is generally 15 days. It
is intended that approximately 15-40% of the assets under management pursuant to
Titan normally will be committed as margin for commodity interest trading, but
from time to time the percentage of assets committed may be substantially more
or less. For accounts with less than $1 million in assets, Willowbridge may not
be able to trade the full Titan portfolio.

ARGO TRADING SYSTEM

The Argo Trading System ("Argo") commenced trading in 1987. Argo
essentially incorporates Vulcan's concepts of pattern recognition,
support/resistance levels and counter-trend liquidations to trade a portfolio
similar to Vulcan. However, Argo has a relatively slower time horizon than
Vulcan and attempts to capture longer-term price moves in a manner similar to
Titan. It is intended that Argo's positions will generally be held from 20 to
30 trading days with approximately 15-40% of assets under management normally
committed as margin for commodity interest trading, but from time to time the
percentage of assets committed may be substantially more or less. For accounts
with less than $1 million in assets, Willowbridge may not be able to trade the
full Argo portfolio.

REX TRADING SYSTEM

The Rex Trading System ("Rex"), which commenced trading in 1988, is an
options buying and selling system. Through proprietary statistical analysis of
various technical factors, Rex attempts to determine whether the options for a
particular commodity are intrinsically cheap or expensive. When Rex detects an
underpriced option, either a put or a call option will be purchased, depending
upon the signal generated. Likewise, when Rex detects an over-priced option,
either a put or a call option will be sold.

Rex uses a complex set of money-management rules to control its risk.
After a position is established, the position is monitored and, if called for,
liquidated through the application of a variety of rules that are based on
volatility, trends, time-decay and delta levels. The position generally is
carried until Rex determines that the option has become intrinsically cheap (for
short positions) or expensive (for long positions).

Rex currently is applied to trading options on futures contracts in
the following 15 commodities:

GRAINS: Soybeans, Corn, Oats
PRECIOUS METALS: Gold, Silver
FINANCIAL INSTRUMENTS: Treasury Bonds, Treasury Notes, Standard & Poor's 500
Stock Index
CURRENCIES: Deutschemark, Swiss Franc, Pound Sterling, Japanese Yen
GENERAL: Crude Oil, Copper, Sugar, Live Cattle

It is intended that approximately 15-40% of the assets under
management pursuant to Rex normally will be committed as margin or applied to
premiums on option trades, although from time to time the percentage of assets
so committed may be substantially more or less.

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<PAGE>

SIREN TRADING SYSTEM

The Siren Trading System ("Siren"), which commenced trading January
1991, is a system based on the principles of market profiles and other
techniques that utilize real time price information. Siren can best be
characterized as a top and bottom picking system. Siren tries to determine
acquisition and distribution patterns that often signal the end and reversal of
a major trend bias. When it identifies such a change, it will attempt to
initiate a countervailing position. Similar to Titan, Siren's time frame is
generally 18 to 25 trading days. The Siren portfolio includes:

GRAINS: Corn, Wheat, Soybeans, Soybean Meal, Soybean Oil, Oats,
Rough Rice
PRECIOUS METALS: Gold, Silver
FINANCIAL INSTRUMENTS: Treasury Bills, Treasury Bonds, Treasury Notes,
Eurodollars, Australian Treasury Bills, Australian
Treasury Bonds, Italian Bonds, Euro-Lira
CURRENCIES: Pound Sterling, Deutschemark, Canadian Dollar, Swiss
Franc, Japanese Yen
GENERAL: Crude Oil, Heating Oil, Unleaded Gasoline, Natural Gas,
Copper, Sugar, Coffee, Cocoa, Cotton, Live Cattle, Live
Hogs, Pork Bellies

It is intended that approximately 15-40% of the assets under
management pursuant to Siren normally will be committed as margin for commodity
interest trading, but from time to time the percentage of assets committed may
be substantially more or less.

THE MTECH TRADING APPROACH

The MTech Trading Approach ("MTech"), which commenced trading January
1991, is a highly discretionary and judgmental trading approach relying
primarily on Mr. Gan's subjective analysis of the markets. Trading decisions
are made on technical as well as fundamental analysis. MTech currently trades
the United States and international futures, forward, spot and options markets.
Mr. Gan reserves the right to change the portfolio composition of MTech.

It is intended that approximately 15-40% of the assets under
management pursuant to MTech normally will be committed as margin for commodity
interest trading, but from time to time the percentage of assets committed may
be substantially more or less.

MTech's minimum account size is U.S. $2,000,000 on January 1 of each
calendar year, and accounts may be opened on that date in increments of U.S.
$2,000,000, with each increment of U.S. $2,000,000 considered a unit of
investment. Thereafter, accounts may be opened at the current net asset value
of a unit of investment. Thereafter, accounts may be opened at the current net
asset value of a unit of investment. Thereafter, accounts may be opened at the
current net asset value of a unit, or multiple thereof, as of the close of
business on the preceding business day, and account sizes may be increased or
decreased by the current net asset value of a unit, or multiple thereof.
Subsequent additions and withdrawals must be made at the then current net asset
value of a unit. If, at the beginning of the year, the account size is not
equal to the unit size or multiple thereof, the client will be so advised and
may choose at that time to increase or decrease allocated assets in order to
trade a unit or multiples thereof. MTech will terminate any account which has
experienced a drawdown of greater than 35% at the close of business on the last
business day of any month, measured from the start of the then-current calender
year (or inception of trading in the first year).

PAST PERFORMANCE INFORMATION

The composite rates of return indicated should not be taken as
representative of any rate of return actually achieved by any single account
represented in the records. An investor should note that in a presentation of
past performance data, different accounts, even though traded according to the
same Strategy or Program, can have varying investment results. The reasons for
this include numerous material differences which can occur among accounts such
as: (a) procedures governing timing for the commencement of trading and means of
moving toward full portfolio commitment of new accounts; (b) the period during
which accounts are active; (c) the Strategy or Program used (although all
accounts may be traded in

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<PAGE>

accordance with the same approach, such approach may be modified periodically as
a result of ongoing research and development by Willowbridge); (d) leverage
employed; (e) the size of the account, which can influence the size of positions
taken and restrict the account from participating in all markets available to a
Strategy or Program; (f) the amount of interest income earned by an account,
which will depend on the rates paid by a futures commission merchant on equity
deposits and/or on the portion of an account invested in interest-bearing
obligations such as U.S. Treasury bills; (g) the amount of management and
incentive fees and the amount of brokerage commissions; (h) the timing of orders
to open or close positions; (i) the market conditions, which in part determine
the quality of trade executions; and (j) trading instructions and restrictions
of the client.

Brokerage commissions charged to accounts in the capsules may vary
substantially. Not all accounts in the composite capsules earn interest income.
Monthly or quarterly management fees and quarterly or annual incentive fees are
charged to the accounts in the capsules and may vary. Some of the accounts
included in the capsules are not charged a management fee. Through June 30,
1995, rates of return for Vulcan, Titan, Argo, Siren, XLIM, CFM, Currency and
Primary may be understated to the extent that certain accounts in the capsules
paid specified fees unrelated to Willowbridge's trading (such as selling
commissions, distribution expenses, general partner fees or manager-of-manager
fees) that were treated as expenses rather than as withdrawals of assets under
Willowbridge's management. Beginning July 1, 1995, such expenses are reflected
in the capsules as withdrawals. In reviewing its accounts to determine the
worst drawdown figures for any account included in the composite capsules,
Willowbridge has excluded accounts in any month in which the account has (a)
been opened or closed, (b) experienced material additions or withdrawals, or (c)
been phased in or out of trading a full portfolio, in order to obtain
representative figures. Rate of return is calculated by dividing net
performance by beginning equity adjusted by the value of additions and
withdrawals pursuant to the time-weighted method, except in the case of capsules
utilizing the Fully-Funded Subset method to compute rate of return.

ADDITIONAL NOTES FOR CAPSULES UTILIZING THE FULLY-FUNDED SUBSET METHOD

In the accompanying composite capsules for Vulcan (beginning July
1994), Titan (beginning July 1995), Siren (beginning April 1995), Primary
(beginning August 1995), CFM (beginning January 1993), MTech and Rex (beginning
January 1997), Argo and Currency (beginning January 1992), and XLIM (beginning
February 1995), Willowbridge has adopted the Fully-Funded Subset Method of
computing rate of return and presenting performance disclosure, pursuant to an
Advisory published by the CFTC. (With respect to these capsules, "notional
funds" were not traded prior to the dates noted.) To qualify for use of the
Fully-Funded Subset Method, the Advisory requires that certain computations be
made in order to arrive at the Fully-Funded Subset and that the accounts for
which performance is so reported meet two tests which are designed to provide
assurance that the Fully-Funded Subset and the resultant rates of return are
representative of the trading program. In each capsule using the Fully-Funded
Subset Method, rate of return for the Fully-Funded Subset is computed by
dividing the sum of the net performance, I.E., for each of the accounts, for the
Fully-Funded Subset, by the sum of the actual funds-based beginning net asset
values for the Fully-Funded Subset.

[Remainder of page left blank intentionally.]

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<PAGE>

XLIM TRADING APPROACH

Willowbridge TRADES this approach on behalf of the Trust. The
following summary information (determined pursuant to the Fully-Funded Subset
Method) presents the composite performance record of the XLIM Trading Approach
for the five-year period from January 1992 through JUNE 1997.

NAME OF CTA: Willowbridge Associates Inc.
NAME OF PROGRAM: XLIM
INCEPTION OF CLIENT ACCOUNT TRADING BY CTA: August 1988
INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM: August 1988
NUMBER OF OPEN ACCOUNTS: 43
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) OVERALL: $808,759,680
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) OVERALL: $1,062,649,855
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $402,197,798
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $491,011,897
LARGEST MONTHLY DRAWDOWN: (7.51)% (7/96)
LARGEST PEAK-TO-VALLEY DRAWDOWN: (29.10)% (8/93 - 1/95)
NUMBER OF PROFITABLE CLOSED ACCOUNTS: 6
NUMBER OF UNPROFITABLE CLOSED ACCOUNTS: 2

- ----------------------------------------------------------------------------------------
Monthly Performance 1997(%) 1996(%) 1995(%) 1994(%) 1993(%) 1992(%)
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
January (3.41) 2.74 (4.89) (11.93) 1.04 0.00
- ----------------------------------------------------------------------------------------
February 7.74 (2.67) 0.87 (12.67) 22.24 0.00
- ----------------------------------------------------------------------------------------
March 6.23 4.63 31.21 0.04 (5.40) 0.00
- ----------------------------------------------------------------------------------------
April (6.47) 9.48 4.41 0.00 (2.97) 0.00
- ----------------------------------------------------------------------------------------
May 1.92 (2.70) 0.25 0.00 (1.04) 0.00
- ----------------------------------------------------------------------------------------
June (7.24) (0.22) (7.52) 0.00 4.00 0.00
- ----------------------------------------------------------------------------------------
July (6.76) (3.91) 0.00 12.93 0.00
- ----------------------------------------------------------------------------------------
August 2.07 (1.28) 0.00 (8.79) 0.00
- ----------------------------------------------------------------------------------------
September 14.07 2.55 0.00 (7.02) 0.00
- ----------------------------------------------------------------------------------------
October 6.38 1.93 0.00 5.07 2.65
- ----------------------------------------------------------------------------------------
November 1.91 2.59 3.23 1.55 (2.63)
- ----------------------------------------------------------------------------------------
December 0.13 5.92 1.13 2.56 8.41
- ----------------------------------------------------------------------------------------
Compound Rate (2.25) 31.06 31.28 (19.68) 22.30 8.36
of Return (6 months)
- ----------------------------------------------------------------------------------------

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

</TABLE>

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<PAGE>

VULCAN SYSTEM

The following summary information (determined pursuant to the
Fully-Funded Subset Method) presents the composite performance record of the
Vulcan System for the five-year period from January 1992 through JUNE 1997.

NAME OF CTA: Willowbridge Associates Inc.
NAME OF PROGRAM: Vulcan
Inception of client account trading by CTA: August 1988
INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM: August 1988
NUMBER OF OPEN ACCOUNTS: 26
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) OVERALL: $808,759,680
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) OVERALL: $1,062,649,855
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $55,452,100
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $59,918,683
LARGEST MONTHLY DRAWDOWN: (19.39)% (2/96)
LARGEST PEAK-TO-VALLEY DRAWDOWN: (19.03)% (1/92-6/92)
Number of profitable closed accounts: 10
NUMBER OF UNPROFITABLE CLOSED ACCOUNTS: 0
1997 COMPOUND RATE OF RETURN: 26.81% (6 months)
1996 COMPOUND RATE OF RETURN: 12.96%
1995 COMPOUND RATE OF RETURN: 57.62%
1994 COMPOUND RATE OF RETURN: 14.67%
1993 COMPOUND RATE OF RETURN: 33.97%
1992 COMPOUND RATE OF RETURN: 19.30%

TITAN SYSTEM

The following summary information (determined pursuant to the
Fully-Funded Subset Method) presents the composite performance record of the
Titan System for the five year period from January 1992 through JUNE 1997.

NAME OF CTA: Willowbridge Associates Inc.
NAME OF PROGRAM: Titan
INCEPTION OF CLIENT ACCOUNT TRADING BY CTA: August 1988
INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM: August 1988
NUMBER OF OPEN ACCOUNTS: 11
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) OVERALL: $808,759,680
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) OVERALL: $1,062,649,855
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $16,106,283
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $30,655,070
LARGEST MONTHLY DRAWDOWN: (15.02)% (2/94)
LARGEST PEAK-TO-VALLEY DRAWDOWN: (27.80)% (8/93-5/94)
NUMBER OF PROFITABLE CLOSED ACCOUNTS: 6
NUMBER OF UNPROFITABLE CLOSED ACCOUNTS: 1
1997 COMPOUND RATE OF RETURN: 6.13% (6 months)
1996 COMPOUND RATE OF RETURN: 31.91%
1995 COMPOUND RATE OF RETURN: 68.10%
1994 COMPOUND RATE OF RETURN: 10.06%
1993 COMPOUND RATE OF RETURN: 23.28%
1992 COMPOUND RATE OF RETURN: 32.16%

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
THE TRUST'S ACCOUNT WILL NOT BE TRADED PURSUANT TO THE FOREGOING PROGRAMS.

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<PAGE>

REX SYSTEM

The following summary information (determined pursuant to the
Fully-Funded Subset Method) presents the composite performance record of the Rex
System for the five-year period from January 1992 through JUNE 1997.

NAME OF CTA: Willowbridge Associates Inc.
NAME OF PROGRAM: Rex
INCEPTION OF CLIENT ACCOUNT TRADING BY CTA: August 1988
INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM: August 1988
NUMBER OF OPEN ACCOUNTS: 1
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) OVERALL: $808,759,680
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) OVERALL: $1,062,649,855
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $101,647
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $1,500,829
LARGEST MONTHLY DRAWDOWN: (25.19)% (2/96)
LARGEST PEAK-TO-VALLEY DRAWDOWN: (78.84)% (9/90 - 9/96)
NUMBER OF PROFITABLE CLOSED ACCOUNTS: 0
NUMBER OF UNPROFITABLE CLOSED ACCOUNTS: 2
1997 COMPOUND RATE OF RETURN: (3.71)% (6 months)
1996 COMPOUND RATE OF RETURN: (27.37)%
1995 COMPOUND RATE OF RETURN: (13.07)%
1994 COMPOUND RATE OF RETURN: (12.49)%
1993 COMPOUND RATE OF RETURN: (10.37)%
1992 COMPOUND RATE OF RETURN: (18.54)%

ARGO SYSTEM

The following summary information (determined pursuant to the
Fully-Funded Subset Method) presents the composite performance record of the
Argo System for the five-year period from January 1992 through JUNE 1997.

NAME OF CTA: Willowbridge Associates Inc.
NAME OF PROGRAM: Argo
INCEPTION OF CLIENT ACCOUNT TRADING BY CTA: August 1988
INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM: August 1988
NUMBER OF OPEN ACCOUNTS: 63
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) OVERALL: $808,759,680
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) OVERALL: $1,062,649,855
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $188,418,667
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $224,897,428
LARGEST MONTHLY DRAWDOWN: (20.49)% (2/96)
LARGEST PEAK-TO-VALLEY DRAWDOWN: (31.13)% (5/96 - 7/96)
NUMBER OF PROFITABLE CLOSED ACCOUNTS: 52
NUMBER OF UNPROFITABLE CLOSED ACCOUNTS: 12
1997 COMPOUND RATE OF RETURN: 11.97% (6 months)
1996 COMPOUND RATE OF RETURN: 12.46%
1995 COMPOUND RATE OF RETURN: 59.52%
1994 COMPOUND RATE OF RETURN: 20.28%
1993 COMPOUND RATE OF RETURN: 17.10%
1992 COMPOUND RATE OF RETURN: 22.09%

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
THE TRUST'S ACCOUNT WILL NOT BE TRADED PURSUANT TO THE FOREGOING PROGRAMS.

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<PAGE>

SIREN SYSTEM

The following summary information (determined pursuant to the
Fully-Funded Subset Method) presents the composite performance record of the
Siren System for the five year period from January 1992 through JUNE 1997.

NAME OF CTA: Willowbridge Associates Inc.
NAME OF PROGRAM: Siren
INCEPTION OF CLIENT ACCOUNT TRADING BY CTA: August 1988
INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM: January 1991
NUMBER OF OPEN ACCOUNTS: 13
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) OVERALL: $808,759,680
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) OVERALL: $1,062,649,855
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $25,408,894
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $47,426,879
LARGEST MONTHLY DRAWDOWN: (12.39)% (8/93)
LARGEST PEAK-TO-VALLEY DRAWDOWN: (21.99)% (7/93 - 10/93)
NUMBER OF PROFITABLE CLOSED ACCOUNTS: 4
NUMBER OF UNPROFITABLE CLOSED ACCOUNTS: 1
1997 COMPOUND RATE OF RETURN: 14.68% (6 months)
1996 COMPOUND RATE OF RETURN: 1.41%
1995 COMPOUND RATE OF RETURN: 25.12%
1994 COMPOUND RATE OF RETURN: 37.88%
1993 COMPOUND RATE OF RETURN: 9.45%
1992 COMPOUND RATE OF RETURN: (1.39)%

MTECH APPROACH

The following summary information (determined pursuant to the
Fully-Funded Subset Method) presents the composite performance record of the
MTech Approach for the five year period from January 1992 through JUNE 1997.

NAME OF CTA: Willowbridge Associates Inc.
NAME OF PROGRAM: MTech
INCEPTION OF CLIENT ACCOUNT TRADING BY CTA: August 1988
INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM: January 1991
NUMBER OF OPEN ACCOUNTS: 8
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) OVERALL: $808,759,680
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) OVERALL: $1,062,649,855
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $45,605,865
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $89,245,905
LARGEST MONTHLY DRAWDOWN: (12.44)% (2/96)
LARGEST PEAK-TO-VALLEY DRAWDOWN: (21.37)% (8/93 - 2/94)
NUMBER OF PROFITABLE CLOSED ACCOUNTS: 1
NUMBER OF UNPROFITABLE CLOSED ACCOUNTS: 0
1997 COMPOUND RATE OF RETURN: (0.13)% (6 months)
1996 COMPOUND RATE OF RETURN: 45.73%
1995 COMPOUND RATE OF RETURN: 53.22%
1994 COMPOUND RATE OF RETURN: 21.68%
1993 COMPOUND RATE OF RETURN: 32.48%
1992 COMPOUND RATE OF RETURN: 25.13%

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
THE TRUST'S ACCOUNT WILL NOT BE TRADED PURSUANT TO THE FOREGOING PROGRAMS.

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<PAGE>

CFM PROGRAM

The following summary information (determined pursuant to the
Fully-Funded Subset Method) presents the composite performance record of the CFM
Program for the five year period from January 1992 through JUNE 1997.

NAME OF CTA: Willowbridge Associates Inc.
NAME OF PROGRAM: CFM
INCEPTION OF CLIENT ACCOUNT TRADING BY CTA: August 1988
INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM: January 1993
NUMBER OF OPEN ACCOUNTS: 5
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) OVERALL: $808,759,680
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) OVERALL: $1,062,649,855
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $26,009,521
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $27,917,521
LARGEST MONTHLY DRAWDOWN: (18.08)% (2/94)
LARGEST PEAK-TO-VALLEY DRAWDOWN: (31.83)% (8/93 - 9/94)
NUMBER OF PROFITABLE CLOSED ACCOUNTS: 18
NUMBER OF UNPROFITABLE CLOSED ACCOUNTS: 25
1997 COMPOUND RATE OF RETURN: (3.29)% (6 months)
1996 COMPOUND RATE OF RETURN: 31.66%
1995 COMPOUND RATE OF RETURN: 24.52%
1994 COMPOUND RATE OF RETURN: (10.51)%
1993 COMPOUND RATE OF RETURN: 29.49%
1992 COMPOUND RATE OF RETURN: N/A

CURRENCY PROGRAM

The following summary information (determined pursuant to the
Fully-Funded Subset Method) presents the composite performance record of the
Currency Program for the five year period from January 1992 through JUNE 1997.

NAME OF CTA: Willowbridge Associates Inc.
NAME OF PROGRAM: Currency
INCEPTION OF CLIET ACCOUNT TRADING BY CTA: August 1988
INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM: May 1991
NUMBER OF OPEN ACCOUNTS: 2
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) OVERALL: $808,759,680
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) OVERALL: $1,062,649,855
AGGREGATE ASSETS (EXCLUDING "NOTIONAL"EQUITY) IN PROGRAM: $7,876,529
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $12,876,529
LARGEST MONTHLY DRAWDON: (10.31)% (8/93)
LARGEST PEAK-TO-VALLEY DRAWDOWN: (25.32)% (7/93 - 8/94)
NUMBER OF PROFITABLE CLOSED ACCOUNTS: 6
NUMBER OF UNPROFITABLE CLOSED ACCOUNTS: 25
1997 COMPOUND RATE OF RETURN: 9.93% (6 months)
1996 COMPOUND RATE OF RETURN: (0.37)%
1995 COMPOUND RATE OF RETURN: 28.55%
1994 COMPOUND RATE OF RETURN: (10.26)%
1993 COMPOUND RATE OF RETURN: (8.59)%
1992 COMPOUND RATE OF RETURN: 16.96%

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
THE TRUST'S ACCOUNT WILL NOT BE TRADED PURSUANT TO THE FOREGOING PROGRAMS.

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<PAGE>

PRIMARY PROGRAM

The following summary information (determined pursuant to the
Fully-Funded Subset Method) presents the composite performance record of the
Primary Program for the period from January 1993 through JUNE 1997.

NAME OF CTA: Willowbridge Associates Inc.
NAME OF PROGRAM: Primary
INCEPTION OF CLIENT ACCOUNT TRADING BY CTA: August 1988
INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM: January 1993
NUMBER OF OPEN ACCOUNTS: 21
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) OVERALL: $808,759,680
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) OVERALL: $1,062,649,855
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $41,582,376
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $77,199,114
LARGEST MONTHLY DRAWDOWN: (17.06)% (2/96)
LARGEST PEAK-TO-VALLEY DRAWDOWN: (22.52)% (5/96-7/96)
NUMBER OF PROFITABLE CLOSED ACCOUNTS: 3
NUMBER OF UNPROFITABLE CLOSED ACCOUNTS: 1
1997 COMPOUND RATE OF RETURN: 14.70 % (6 months)
1996 COMPOUND RATE OF RETURN: 14.45%
1995 COMPOUND RATE OF RETURN: 56.76%
1994 COMPOUND RATE OF RETURN: 22.70%
1993 COMPOUND RATE OF RETURN: 16.79%
1992 COMPOUND RATE OF RETURN: N/A

ATLAS SYSTEM

The following summary information presents the composite performance
record of the Atlas System.

NAME OF CTA: Willowbridge Associates Inc.
NAME OF PROGRAM: Atlas
INCEPTION OF CLIENT ACCOUNT TRADING BY CTA: August 1988
INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM: November 1989 (ceased trading
December 1992)
NUMBER OF OPEN ACCOUNTS: 0
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) OVERALL: $808,759,680
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) OVERALL: $1,062,649,855
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $0
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $0
LARGEST MONTHLY DRAWDOWN: (16.57)% (1/92)
LARGEST PEAK-TO-VALLEY DRAWDOWN: (46.67)% (10/90 - 5/92)
NUMBER OF PROFITABLE CLOSED ACCOUNTS: 0
NUMBER OF UNPROFITABLE CLOSED ACCOUNTS: 1
1997 COMPOUND RATE OF RETURN: N/A
1996 COMPOUND RATE OF RETURN: N/A
1995 COMPOUND RATE OF RETURN: N/A
1994 COMPOUND RATE OF RETURN: N/A
1993 COMPOUND RATE OF RETURN: N/A
1992 COMPOUND RATE OF RETURN: 18.29%

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
THE TRUST'S ACCOUNT WILL NOT BE TRADED PURSUANT TO THE FOREGOING PROGRAMS.

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<PAGE>

WITTER & LESTER, INC.

BACKGROUND AND MANAGEMENT

Witter & Lester, Inc. ("Witter & Lester"), a member of the NFA, was
founded by Lon Witter and Richard Lester in March 1988 and is incorporated under
the laws of the State of Alabama. It is registered as a commodity trading
advisor with the CFTC. THE REGISTRATION OF WITTER & LESTER WITH THE CFTC AND
THE SEC AND WITTER & LESTER'S MEMBERSHIP IN NFA MUST NOT BE TAKEN AS AN
INDICATION THAT ANY SUCH AGENCY OR SELF-REGULATORY BODY HAS RECOMMENDED OR
APPROVED WITTER & LESTER OR THE TRUST. Witter & Lester's primary office is
located at 200 Clinton Avenue, Suite 904, Huntsville, Alabama 35801, and the
telephone number is (205) 534-4439. The marketing office is located at 8275
Tournament Drive, Suite 100, Memphis, Tennessee 38125. The telephone number is
(901) 748-3043.

LON L. WITTER, President and co-founder of Witter & Lester, was
employed for ten years (1978-1988) as a Vice-President and Trust Investment
Officer at First Alabama Bank in Huntsville. He holds a B.A. in Education from
Duke University, a M.S. degree in Education from the University of Indiana, and
a J.D. degree from the University of Texas Law School.

RICHARD L. LESTER, Executive Vice-President and co-founder of Witter &
Lester, attended the University of Alabama in Huntsville and holds an Associate
Degree in Business Administration from Calhoun Community College. For ten years
(1978-1988), he was employed by First Alabama Bank as a Vice-President and Trust
Investment Officer.

FRANK B. SMITH, Executive Vice-President and Director of Marketing
since June 1991, has served as Managing Director of Morgan Keegan in Memphis,
Tennessee (1981-1990) and Equitable Securities in Nashville, Tennessee
(1990-1991). His professional duties have included Institutional Sales, Branch
Management, and National Sales Manager. He holds B.S. degrees in Business
Administration and Economics from Vanderbilt University.

G. WAYNE WHALEY, Market Analyst for Witter & Lester since 1993, was
employed for five years (1988-1993) as a Systems Analyst by SPARTA, Inc. in
Huntsville, Alabama where he created computerized probability models of nuclear
arsenal exchanges. He holds a B.S. degree in the Science of Mathematics from
Jacksonville State University and a M.S. degree in Operations Research (Applied
Math) from Georgia Technological Institute.

MR. WITTER, MR. LESTER and MR. WHALEY share the responsibility for
market analysis and trade decisions. Mr. Witter and Mr. Whaley direct market
research and order entry. Mr. Lester is responsible for accounting, compliance
and regulatory issues. Mr. Smith is responsible for business development and
client relationships.

TRADING STRATEGY

The Investment Methodology currently used by Witter & Lester has been
consistently applied since the mid 1970's. As Trust Investment Officers at
First Alabama Bank, Mr. Witter and Mr. Lester recognized that equity investments
over time have provided superior returns. The challenge was to produce
consistent total returns despite the volatility associated with equity
investments. With that in mind, Witter & Lester developed a warning system
designed to identify any potential for a sharp stock market decline. The
following criteria proved to have the highest correlation with changes in market
direction:

- MOMENTUM - Prior to a short term change in the direction of
stock prices, the momentum of the existing trend will slow
perceptibly. In other words, before a market declines, it must
stop going up. Momentum is measured by mathematical
relationships involving the daily number of stocks that advance
and decline, the number of issues making new highs and new lows,
and divergences among the numerous market indices.

- VOLUME - Price movements in a stock are often preceded by a
change in the daily trading volume of its shares. Using the Dow
30 Stocks as a market proxy, Witter & Lester believes that
changes of volume patterns in the Dow stocks indicate a future
change in the direction of stock

-93-

<PAGE>

prices in general.

- INVENTORY ACCUMULATION AND LIQUIDATION - Inventory control is
essential to any business, and the stock market is no different.
Professional traders are keenly aware of trading conditions and
the supply-demand factors affecting the marketplace on any given
day. An analysis of each day's trading volume gives information
as to whether this knowledgeable group of investors is
accumulating or distributing shares.

The first application of Witter & Lester's methodology was a simple
mutual fund timing strategy. Begun in 1979 while Witter & Lester were serving
as Trust Investment Officers at First Alabama Bank, this program was designed
for the conservative investor whose risk tolerance is very small. Unleveraged
"long" positions were taken only in market environments that Witter & Lester
judged to be free of potential weakness. "Cash" positions were held in all
other environments. Since then, Witter & Lester's trading methodology has been
applied to a variety of different strategies.

THE REDSTONE PROGRAM

Witter & Lester TRADES this program on behalf of the Trust. The
Redstone Program stems from a research effort begun in 1993 to automate the
interpretation of traditional Witter & Lester market analysis. This effort was
guided by Lon Witter with the assistance of Wayne Whaley. After the initial
exercise was completed, Mr. Whaley used computer optimization to incorporate
several additional indicators that had been used successfully in his own
personal trading since 1988. The resulting stock market model is based on
pattern recognition of the following nine indicators:

1) Candlestick theory 6) Put/Call ratio
2) Climax Indicator 7) Seasonal variable
3) Volume trends 8) TRIN
4) Momentum 9) Valuation/Sentiment
5) New high / lows

Each day the market timing model produces a rating between 0 and 100
where a rating above 52.5 is bullish and a rating below 47.5 is bearish. This
daily analysis drives the degree of long or short exposure taken in the program
each day. Positions are built using a combination of stock index futures and
options.

STOCK INDEX FUTURES TRADING PROGRAM

In 1982, the Stock Index Futures Trading Program was created by
applying Witter & Lester's traditional market analysis to the newly created
Stock Index Futures market. Utilizing the added liquidity of the futures
contract, the program is designed to more aggressively seek above average total
returns. In addition to "long" and "cash" positions, the Stock Index Futures
Trading Program offers the opportunity to profit from market declines. The
prudent use of leverage may also serve to enhance returns.

The Stock Index Futures Trading Program can be used as a stand-alone
speculative investment. It was designed, however, to be a component of an
existing stock or bond portfolio. When used in this manner (typically 10-20% of
a portfolio), the program has increased annual returns, significantly reduced
volatility, and minimized the extent of losses in adverse market conditions. A
key factor in the success of the program is Witter & Lester's strong negative
correlation with both stock and bond markets as well as most futures managers.

Witter & Lester started trading client funds in September 1983. From
1983 to March 1988 Witter & Lester was exempt from registration under Section 4
(m) of the Commodity Exchange Act. Registration as a commodity trading advisor
was effective in March 1988.

STRATEGIC HEDGE OVERLAY

In early 1990, Witter & Lester began looking for additional
applications of the market timing model. Specific client requests for a
traditional hedge led to the development of the Strategic Hedge Overlay Program.
The program is intended to work in conjunction with an existing equity portfolio
by taking advantage of Witter & Lester's demonstrated ability to identify
potential stock market weakness.

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<PAGE>

The Strategic Hedge Overlay Program dynamically combines the yield
enhancement options writing strategies with outright hedging. In environments
judged by Witter & Lester to be free of risk, the program takes no position and
the client's portfolio remains fully invested. In environments deemed bearish,
Witter & Lester assumes unleveraged "short" positions, effectively neutralizing
the portfolio against the risk of a market decline. In neutral environments,
call options are sold against the underlying portfolio, reducing risk and
generating additional income for the investor through the capture of option
premiums.

As most investors know, it is not always easy or economical to quickly
liquidate large stock portfolios. The Strategic Hedge Overlay Program, through
the use of futures and options, provides the liquidity and cost efficiency
necessary to effectively enter and exit the market. The program is essentially
self-funding since the underlying stock portfolio serves as the collateral
necessary to administer the account. Execution of the program will in no way
restrict the equity manager's stock selection process.

Participants in the Strategic Hedge Overlay Program generally use
their existing equity portfolio for margin calls; therefore, in the usual cases
customers do not need to convert their equities into cash to participate in the
program. The accompanying tables for the program are prepared on this basis.
If a customer were to choose to participate by using cash margin, he would have
to liquidate approximately 4% of his equity portfolio, and rates of return would
be reduced proportionally.

INTERMEDIATE TRADING PROGRAM

With the Stock Index Futures Program approaching capacity and the
Strategic Hedge Overlay Program fully operational, Witter & Lester began to
explore new applications for the market timing model. The Intermediate Trading
Program combines the most successful elements of Witter & Lester's existing
programs into a single, dynamic strategy.

The Intermediate Trading Program takes both "long" and "short"
positions by focusing on a 2-3 week stock market outlook. Daily indicators aid
in order entry and risk control. Options are used to soften volatility while
providing an element of yield enhancement. Leverage has been adjusted to
produce an optimum risk/reward profile.

SPECIAL - 1 PROGRAM

CFTC rules require the disclosure of performance information for the
last five full calendar years and year to date, and consider older performance
information less material to an investment decision. Accordingly, the
performance of Witter & Lester's Special - 1 Program, which terminated in 1991,
is not set forth herein.

PAST PERFORMANCE INFORMATION

With respect to the Strategic Hedge Overlay Program:

1. "Largest monthly drawdown" is the worst Delta loss in failing to
meet objectives of the hedge program by an account over a specified period.

2. "Worst peak-to-valley drawdown" is the greatest cumulative Delta
decline in failing to meet the objectives of the hedge program over a specified
period.

3. "Delta" is the difference between the S&P monthly rate of return
and the combined monthly rate of return. A positive percentage indicates the
degree to which Witter & Lester's program successfully diminished loss or
enhanced gain for that month. Delta is presented in lieu of a rate of return
for the program, which by itself would not be a meaningful figure. S&P monthly
rate of return is the increase or decrease in the S&P 500 Index over the prior
month expressed as a percentage. Combined monthly rate of return is the S&P
Monthly rate of return adjusted for participation in Witter & Lester's program.
It is calculated by adding the net performance of the Hedge Program plus a
hypothetical net performance for the underlying portfolio (I.E., the product of
multiplying the designated size of the portfolio by the S&P Stock Index rate of
return) divided by the sum of the Hedged Portfolio size plus the designated
equity portfolio size. If additions and withdrawals in any month exceed ten
percent (10%) of these figures, such figures are adjusted by the time-weighted
value of these additions and withdrawals.

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<PAGE>

4. "Compound rate of return" is computed using a hypothetical $1,000
Investment Index. The Index illustrates how a theoretical $1,000 investment, if
left untouched, would have appreciated (depreciated) during the entire length of
the performance table. Since the performance table is the combination of many
separate accounts, this is a theoretical figure and should not be taken as
indicative of any results which an account may have in the future. The year to
date rate of return is the ending $1,000 Index minus $1,000 divided by $1,000.

[Remainder of page left blank intentionally.]

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<PAGE>

REDSTONE PROGRAM

Witter & Lester will trade this program on behalf of the Trust. The
following summary information and chart (determined pursuant to the Fully-Funded
Subset Method) presents the composite performance record of the Redstone Program
THROUGH JUNE 1997.

NAME OF CTA: Witter & Lester, Inc.
NAME OF PROGRAM: Redstone Program
INCEPTION OF CLIENT ACCOUNT TRADING BY CTA: January 1988
INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM: September 1994
NUMBER OF OPEN ACCOUNTS: 12
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) OVERALL: $17,910,216
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) OVERALL: $43,670,223
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $6,262,043
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $13,162,045
LARGEST MONTHLY DRAWDOWN: (7.39%) (12/96)
LARGEST PEAK-TO-VALLEY DRAWDOWN: (8.49)% (12/96- 7/97)
NUMBER OF PROFITABLE CLOSED ACCOUNTS: 24
NUMBER OF UNPROFITABLE CLOSED ACCOUNTS: 6

- --------------------------------------------------------------------
Monthly 1997(%) 1996(%) 1995(%) 1994(%)
Performance
- --------------------------------------------------------------------
January (1.12) (0.47) 2.55 --
- --------------------------------------------------------------------
February 1.10 (0.17) 1.29 --
- --------------------------------------------------------------------
March 2.83 1.21 0.00 --
- --------------------------------------------------------------------
April (0.02) 1.17 2.59 --
- --------------------------------------------------------------------
May (2.28) 0.29 1.42 --
- --------------------------------------------------------------------
June (0.62) 4.00 2.05 --
- --------------------------------------------------------------------
July (5.75) (0.15) --
- --------------------------------------------------------------------
August 2.24 2.80 --
- --------------------------------------------------------------------
September 0.92 2.30 2.19
- --------------------------------------------------------------------
October 3.20 0.84 5.29
- --------------------------------------------------------------------
November 3.04 3.32 2.96
- --------------------------------------------------------------------
December (6.39) 1.96 1.97
- --------------------------------------------------------------------
Compound Rate (0.19) 2.72 23.02 12.96
of Return (6 (4 months)
months)
- --------------------------------------------------------------------

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

-97-

<PAGE>

STOCK INDEX TRADING PROGRAM

The following summary information (determined pursuant to the
Fully-Funded Subset Method) presents the composite performance record of the
Stock Index Futures Trading Program for the five year period from January 1992
through JUNE 1997.

NAME OF CTA: Witter & Lester, Inc.
NAME OF PROGRAM: Stock Index Trading Program
INCEPTION OF CLIENT ACCOUNT TRADING BY CTA: January 1988
INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM: January 1988
NUMBER OF OPEN ACCOUNTS: 14
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) OVERALL: $17,910,216
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) OVERALL: $43,670,223
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $11,275,448
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $15,475,450
LARGEST MONTHLY DRAWDOWN (26.62)% (6/97)
LARGEST PEAK-TO-VALLEY DRAWDOWN (27.70)% (4/97-6/97)
NUMBER OF PROFITABLE CLOSED ACCOUNTS: 74
NUMBER OF UNPROFITABLE CLOSED ACCOUNTS: 26
1997 COMPOUND RATE OF RETURN: (8.5)% (6 months)
1996 COMPOUND RATE OF RETURN: 18.2%
1995 COMPOUND RATE OF RETURN: 44.0%
1994 COMPOUND RATE OF RETURN: (0.5)%
1993 COMPOUND RATE OF RETURN: 18.2%
1992 COMPOUND RATE OF RETURN: 8.6%

INTERMEDIATE TRADING PROGRAM

The following summary information presents (determined pursuant to the
Fully-Funded Subset Method) the composite performance record of the Intermediate
Trading Program for the period MARCH 1992 through JUNE 1997.

NAME OF CTA: Witter & Lester, Inc.
NAME OF PROGRAM: Intermediate Trading Program
INCEPTION OF CLIENT ACCOUNT TRADING BY CTA: January 1988
INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM: March 1992
NUMBER OF OPEN ACCOUNTS: 7
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) OVERALL: $17,910,216
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) OVERALL: $43,670,223
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $593,933
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $9,923,937
LARGEST MONTHLY DRAWDOWN: (17.63)% (7/96)
LARGEST PEAK-TO-VALLEY DRAWDOWN: (18.39)% (7/96-8/96)
NUMBER OF PROFITABLE CLOSED ACCOUNTS: 38
NUMBER OF UNPROFITABLE CLOSED ACCOUNTS: 42
1997 COMPOUND RATE OF RETURN: (1.64)% (6 months)
1996 COMPOUND RATE OF RETURN: (10.03%)
1995 COMPOUND RATE OF RETURN: 0.60%
1994 COMPOUND RATE OF RETURN: 18.4%
1993 COMPOUND RATE OF RETURN: 14.8%
1992 COMPOUND RATE OF RETURN: 1.52% (10 months)

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
THE TRUST'S ACCOUNT WILL NOT BE TRADED PURSUANT TO THE FOREGOING PROGRAMS.

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<PAGE>

STRATEGIC HEDGE OVERLAY PROGRAM

The following summary information (determined pursuant to the Delta
Method) presents the composite performance record of the Strategic Hedge Overlay
Program for the five year period from January 1992 through JUNE 1997

NAME OF CTA: Witter & Lester, Inc.
NAME OF PROGRAM: Strategic Hedge Overlay
INCEPTION OF CLIENT ACCOUNT TRADING BY CTA: January 1988
INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM: December 1991
NUMBER OF OPEN ACCOUNTS: 1
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) OVERALL: $17,910,216
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) OVERALL: $43,670,223
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $(221,208)
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $5,108,791
LARGEST MONTHLY DRAWDOWN: (2.11 Delta) (3/95)
LARGEST PEAK-TO-VALLEY DRAWDOWN : (8.30 Delta) (7/94-8/95)
NUMBER OF PROFITABLE CLOSED ACCOUNTS: 5
NUMBER OF UNPROFITABLE CLOSED ACCOUNTS: 8
1997 COMPOUND RATE OF RETURN: (2.29)% (6 MONTHS)
1996 COMPOUND RATE OF RETURN: 18.2%
1995 COMPOUND RATE OF RETURN: (3.78)%
1994 COMPOUND RATE OF RETURN: 0.96%
1993 COMPOUND RATE OF RETURN: (0.57)%
1992 COMPOUND RATE OF RETURN: 0.19%

SPECIAL - 2 PROGRAM

The following summary information presents the composite performance
record of the Special - 2 Program FOR THE PERIOD JANUARY 1992 THROUGH OCTOBER
1994.

NAME OF CTA: Witter & Lester, Inc.
NAME OF PROGRAM: Special - 2
INCEPTION OF CLIENT ACCOUNT TRADING BY CTA: January 1988
INCEPTION OF CLIENT ACCOUNT TRADING IN PROGRAM: November 1991 (ceased trading
October 1994)
NUMBER OF OPEN ACCOUNTS: 0
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) OVERALL: $34,968,621
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) OVERALL: $106,391,958
AGGREGATE ASSETS (EXCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $0
AGGREGATE ASSETS (INCLUDING "NOTIONAL" EQUITY) IN PROGRAM: $0
LARGEST MONTHLY DRAWDOWN: (0.95)% (3/94)
LARGEST PEAK-TO-VALLEY DRAWDOWN: (0.95)% (3/94)
NUMBER OF PROFITABLE CLOSED ACCOUNTS: 1
NUMBER OF UNPROFITABLE CLOSED ACCOUNTS: 0
1997 COMPOUND RATE OF RETURN: N/A
1996 COMPOUND RATE OF RETURN: N/A
1995 COMPOUND RATE OF RETURN: N/A
1994 COMPOUND RATE OF RETURN: 0.15% (10 months)
1993 COMPOUND RATE OF RETURN: 1.20%
1992 COMPOUND RATE OF RETURN: 2.27%

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
THE TRUST'S ACCOUNT WILL NOT BE TRADED PURSUANT TO THE FOREGOING PROGRAMS.

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<PAGE>

PERFORMANCE OF COMMODITY POOLS OPERATED BY KENMAR

GENERAL

THE PERFORMANCE INFORMATION INCLUDED HEREIN IS PRESENTED IN ACCORDANCE
WITH CFTC REGULATIONS. THE TRUST DIFFERS MATERIALLY IN CERTAIN RESPECTS FROM
EACH OF THE POOLS WHOSE PERFORMANCE IS INCLUDED HEREIN. The following sets
forth summary performance information for all pools operated by Kenmar (OTHER
THAN THE TRUST) since January 1, 1992. Kenmar has offered THESE pools
exclusively on a private basis to financially sophisticated investors-- either
on a private placement basis in the United States or offshore exclusively to
non-U.S. persons. Other than the Trust, Kenmar has not, to date, sponsored a
publicly-offered commodity pool.

The pools THE performance OF WHICH IS summarized herein are
materially different in certain respects from the Trust, and the past
performance summaries of such pools are generally not representative of how the
Trust might perform in the future. These pools also have material differences
from one another in terms of number of advisors, leverage, fee structure and
trading programs. The performance records of these pools may give some general
indication of Kenmar's capabilities in advisor selection by indicating the past
performance of the Kenmar-sponsored pools.

All summary performance information is current as of JUNE 30, 1997
(except in the case of pools dissolved prior to such date). Performance
information is set forth, in accordance with CFTC Regulations, since January 1,
1992 or, if later, the inception of the pool in question.

INVESTORS SHOULD NOTE THAT AFFILIATES OF KENMAR PERFORM ASSET
ALLOCATION FUNCTIONS ON BEHALF OF MANAGED ACCOUNTS AND OTHER COMMODITY POOLS
SIMILAR TO THOSE PERFORMED BY KENMAR. PURSUANT TO CFTC REGULATIONS, THE
PERFORMANCE OF ACCOUNTS AND OTHER POOLS OPERATED, MANAGED AND/OR SPONSORED BY
AFFILIATES OF KENMAR HAS NOT BEEN INCLUDED HEREIN.

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS, AND
MATERIAL DIFFERENCES EXIST BETWEEN THE POOLS WHOSE PERFORMANCE IS SUMMARIZED
HEREIN AND THE TRUST.

INVESTORS SHOULD NOTE THAT INTEREST INCOME MAY CONSTITUTE A
SIGNIFICANT PORTION OF A COMMODITY POOL'S INCOME AND, IN CERTAIN INSTANCES, MAY
GENERATE PROFITS WHERE THERE HAVE BEEN REALIZED AND UNREALIZED LOSSES FROM
COMMODITY TRADING.

____________________

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<PAGE>

ASSETS UNDER MANAGEMENT

<S> <C>
Kenmar -- Total assets under management as of July 1, 1997: $110 million
Kenmar -- Total assets under multi-advisor management as of July 1, 1997: $ 94 million
Kenmar and affiliates -- Total assets under management as of July 1, 1997: $458 million
(excluding notional funds)
Kenmar and affiliates -- Total assets under management as of July 1, 1997: $557 million
(including notional funds)

</TABLE>

MULTI-ADVISOR POOLS

These are all of the multi-advisor pools (other than THE TRUST AND
pools for the research and development of traders) operated by Kenmar since
January 1, 1992. Kenmar has actively allocated and reallocated trading assets
among a changing group of advisors selected by it. As will the Trust, these
multi-advisor pools depend on Kenmar for their asset allocations (and, possibly,
leverage adjustments) and strategy selections, and combine unrelated and
independent advisors.

SINGLE-ADVISOR POOLS

These are all of the pools (other than pools for the research and
development of traders) operated by Kenmar since January 1, 1992 THAT WERE, OR
ARE, advised by a single advisor (as opposed to a portfolio of commodity trading
advisors). Investors should note that single-advisor pools do not demonstrate
Kenmar's ability to manage a portfolio of commodity trading advisors.

POOLS FOR THE RESEARCH AND DEVELOPMENT OF ADVISORS

These are all of the pools operated by Kenmar since January 1, 1992
THAT were established as a way of testing, in a limited liability vehicle, one
or more commodity trading advisors relatively untested in the management of
customer assets.

[Remainder of page left blank intentionally.]

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<PAGE>

- -----------------------------------------------------------------------------------------------------------------
AGGRE-
TYPE GATE CURRENT CURRENT
OF START CLOSE SUB- TOTAL NAV PER
POOL DATE DATE SCRIPT. NAV UNIT
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MULTI-ADVISOR POOLS

KENMAR PERFORMANCE PARTNERS L.P. ** 08/85 N/A 260,123,273 84,051,684 12,806.17

KENMAR Capital Partners Ltd. * 07/95 N/A 2,825,775 1,872,492 1,012.00

SINGLE ADVISOR POOLS

The Dennis Fund L.P. "A" SINGLE 09/96 N/A 11,233,600 9,135,873 980.62

THE DENNIS FUND L.P. "B" SINGLE 04/97 N/A 2,556,712 2,429,485 983.45

GK INTERNATIONAL CURRENCY FUND L.P. SINGLE 04/91 12/93 2,312,504 0 903.45

Kenmar Preferred L.P. ** 10/89 01/92 2,148,138 0 1,044.21

DENNIS FRIENDS & FAMILY L.P. SINGLE 05/97 N/A 311,000 301,858 961.10

POOLS FOR RESEARCH AND DEVELOPMENT
OF TRADERS

Kenmar Venture Partners L.P. * 03/87 N/A 2,625,000 4,123,633 4,190.24

GLH Strategic Performance L.P. SINGLE 08/93 10/94 1,143,233 0 717.41

Quaestus Diversified Portfolio L.P. SINGLE 12/90 04/92 122,000 0 92.29

- ----------------------------------------------------------------------------------------------------------------------------
% % PERCENTAGE RATE OF RETURN
WORST WORST (COMPUTED ON A COMPOUNDED
MONTHLY PEAK-TO- MONTHLY BASIS)
DRAW- VALLEY YEAR-
DOWN & DRAWDOWN TO-
MONTH & PERIOD 1992 1993 1994 1995 1996 DATE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MULTI-ADVISOR POOLS

KENMAR PERFORMANCE PARTNERS L.P. (15.87) (33.20) 0.16 48.30 (9.79) 8.12 3.04 (12.67)
1/94 11/90-5/92

KENMAR Capital Partners Ltd. (5.77) (8.26) - - - 2.26 (1.87) 0.85
2/96 2/96-8/96

SINGLE ADVISOR POOLS

The Dennis Fund L.P. "A" (5.16) (15-83) - - - - 8.14 (9.32)
6/97 3/96-6/96

THE DENNIS FUND L.P. "B" (4.80) (6.86) - - - - - (6.86)
6/97 5/97-6/97

GK INTERNATIONAL CURRENCY FUND L.P. (5.75) (18.40) 7.48 (16.37) - - - -
12/93 9/92-12/93

Kenmar Preferred L.P. (16.32) (24.05) (8.68) - - - - -
05/90 11/90-4/91

DENNIS FRIENDS & FAMILY L.P. (3.89) (3.89) - - - - - (3.89)
6/97 6/97

POOLS FOR RESEARCH AND DEVELOPMENT
OF TRADERS

Kenmar Venture Partners L.P. (29.70) (48.75) 7.33 57.92 3.27 5.55 14.72 26.10
10/89 11/90-4/92

GLH Strategic Performance L.P. (9.45) (29.41) - (8.09) (21.95) - - -
1/94 9/93-10/94

Quaestus Portfolio L.P. (59.84) (90.77) (45.95) - - - - -
1/91 12/90-4/92

</TABLE>

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FOOTNOTES TO PERFORMANCE INFORMATION

1. NAME OF POOL.

2. TYPE OF POOL:

"Single" means that the assets are managed by one commodity trading
advisor.

* Although multiple commodity trading advisors were used at certain times
during the history of the pool, the pool may not have been a "multi-advisor
pool" as defined by the CFTC due to the fact that one of those commodity
trading advisors may have been allocated in excess of twenty-five percent
of the pool's funds available for trading.

** Commenced trading as a single-advisor pool and assets were subsequently
allocated to multiple trading advisors. The pool is not a
"multi-advisor-pool" as defined by the CFTC for the reason discussed above.

3. Start Date.

4. "Close Date" is the date the pool liquidated its assets and ceased to do
business.

5. "Aggregate Subscript." is the aggregate of all amounts ever contributed to
the pool, including investors who subsequently redeemed their investments.

6. "Current Total NAV" is the Net Asset Value of the pool as of July 1, 1997.

7. "Current NAV Per Unit" is the Current Net Asset Value of the pool divided
by the total number of units (shares) outstanding as of July 1, 1997.
Current NAV per Unit is based on the value of a hypothetical $1,000 unit
($1,050 for KENMAR Venture Partners L.P.) of investment over time.

IN THE CASE OF LIQUIDATED POOLS (GK INTERNATIONAL CURRENCY FUND L.P.,
KENMAR PREFERRED L.P. GLH Strategic Performance L.P., and Quaestus
Diversified Portfolio L.P.), the NAV per unit on the date of liquidation
of the pool IS SET FORTH.

8. "% Worst Monthly Drawdown" is the largest single month loss sustained since
inception of trading. "Drawdown" as used in this section of the Prospectus
means losses experienced by the relevant fund over the specified period and
is calculated on a rate of return basis, I.E., dividing net performance by
beginning equity. "Drawdown" is measured on the basis of monthly returns
only, and does not reflect intra-month figures.

9. "Month" is the month of the % Worst Monthly Drawdown.

10. "% Worst Peak-to-Valley Drawdown" is the largest percentage decline in the
Net Asset Value per Unit over the history of the pool. This need not be a
continuous decline, but can be a series of positive and negative returns
where the negative returns are larger than the positive returns. "% Worst
Peak-to-Valley Drawdown" represents the greatest percentage decline from
any month-end Net Asset Value per Unit THAT occurs without such month-end
Net Asset Value per Unit being equaled or exceeded as of a subsequent
month-end. For example, if the Net Asset Value per Unit of a particular
pool declined by $1 in each of January and February, increased by $1 in
March and declined again by $2 in April, a "peak-to-valley drawdown"
analysis conducted as of the end of April would consider that "drawdown" to
be still continuing and to be $3 in amount, whereas if the Net Asset Value
per Unit had increased by $2 in March, the January-February drawdown would
have ended as of the end of February at the $2 level.

11. "Period" is the period of the "% Worst Peak-to-Valley Drawdown."

12. "Year-to-Date" is the rate of return of the pool from January 1, 1997
or the date of inception, if later, through JUNE 30, 1997.

-103-

<PAGE>

INVESTMENT FACTORS

THE FOLLOWING SUMMARIZES CERTAIN OF THE PRINCIPAL POTENTIAL ADVANTAGES
- -- DESCRIBED IN GREATER DETAIL ELSEWHERE IN THIS PROSPECTUS -- THAT KENMAR
BELIEVES MAY BE ASSOCIATED WITH AN INVESTMENT IN THE TRUST. THESE POTENTIAL
ADVANTAGES MAY NEVER, IN FACT, RESULT IN PROFITS FOR THE TRUST, AND THERE ARE
SUBSTANTIAL RISKS INVOLVED IN INVESTING IN THE UNITS. SEE "RISK FACTORS"
BEGINNING AT PAGE 8.

____________________

DIVERSIFICATION OF TRADITIONAL PORTFOLIOS

Allocating a portion of the risk segment of a portfolio to a managed
futures investment, such as the Trust, may add a potentially valuable element of
diversification to a traditionally-structured portfolio. Historically over the
long term, the returns recognized on managed futures investments have been
non-correlated with the performance of stocks and bonds, suggesting that a
successful managed futures investment may be a valuable complement to a
portfolio of stocks and bonds. Diversifying assets among different investments
that generate positive but non-correlated returns has the potential to decrease
risk without a corresponding decrease in returns -- enhancing the risk/reward
profile and overall "efficiency" of a portfolio. NON-CORRELATION IS NOT
NEGATIVE CORRELATION. THE PERFORMANCE OF THE TRUST IS ANTICIPATED TO BE
GENERALLY UNRELATED, BUT MAY FREQUENTLY BE SIMILAR, TO THE PERFORMANCE OF THE
GENERAL EQUITY MARKETS.

The Advisors' speculative trading techniques will be the primary
factor in the Trust's success or failure. Investors should note that there are
always two parties to a futures contract; consequently, for any gain achieved by
one party on a contract, a corresponding loss is suffered by the other.
Therefore, due to the nature of futures contracts trading, only 50% of futures
contracts held by all market participants can experience gain at any one time,
without reference to brokerage commissions and other costs of trading, which may
reduce or eliminate any gain that would otherwise be achieved.

The table below is an empirical example of how different assets can
react to business cycles. In each case, the asset class is represented by a
recognized industry index for that asset.

ANNUAL RETURNS OF VARIOUS ASSET CLASSES OVER TIME

Int'l Stocks Managed
Stock Bonds (EAFE Futures
(S&P 500) (LT BOND) INDEX) (MAR F/P)
--------- --------- ------------ ---------

1997 (6 MOS.) 20.7 2.2 11.4 3.9
- ---- ---- ---- ---- ----
- ---- ---- ---- ---- ----

1996 22.7% -0.9% -5.9% 11.9%
- ---- ---- ---- ---- ----
- ---- ---- ---- ---- ----

1995 37.5% 28.7% 11.6% 9.7%
- ---- ---- ---- ---- ----
- ---- ---- ---- ---- ----

1994 1.4% -8.1% 8.0% -2.2%
- ---- ---- ---- ---- ----
- ---- ---- ---- ---- ----

1993 10.0% 18.2% 32.9% 15.2%
- ---- ---- ---- ---- ----
- ---- ---- ---- ---- ----

1992 7.7% 8.1% -11.9% 1.0%
- ---- ---- ---- ---- ----
- ---- ---- ---- ---- ----

1991 30.3% 19.3% 12.5% 10.7%
- ---- ---- ---- ---- ----
- ---- ---- ---- ---- ----

1990 -3.5% 6.2% -23.2% 19.5%
- ---- ---- ---- ---- ----
- ---- ---- ---- ---- ----

1989 31.6% 18.1% 10.8% 10.1%
- ---- ---- ---- ---- ----
- ---- ---- ---- ---- ----

-104-

<PAGE>

Int'l Stocks Managed
Stock Bonds (EAFE Futures
(S&P 500) (LT BOND) INDEX) (MAR F/P)
--------- --------- ------------ ---------

1988 16.5% 9.7% 28.6% 8.4%
- ---- ---- ---- ---- ----
- ---- ---- ---- ---- ----

1987 5.2% - 2.7% 24.9% 46.9%
- ---- ---- ---- ---- ----
- ---- ---- ---- ---- ----

1986 18.6% 24.5% 69.9% -11.5%
- ---- ---- ---- ---- ----
- ---- ---- ---- ---- ----

1985 31.7% 31.0% 56.7% 21.8%
- ---- ---- ---- ---- ----
- ---- ---- ---- ---- ----

1984 6.2% 15.5% 7.9% 4.2%
- ---- ---- ---- ---- ----
- ---- ---- ---- ---- ----

1983 22.5% 0.7% 24.6% -7.6%
- ---- ---- ---- ---- ----
- ---- ---- ---- ---- ----

1982 21.6% 40.4% -0.9% 23.1%
- ---- ---- ---- ---- ----
- ---- ---- ---- ---- ----

1981 -5.0% 1.9% -1.0% 19.6%
- ---- ---- ---- ---- ----
- ---- ---- ---- ---- ----

PAST PERFORMANCE IS NOT NECESSARILY INDICATE OF FUTURE RESULTS. The
chart above depicts the actual performance of the MAR Fund/Pool Qualified
Universe, in contrast to with stocks and bonds. The "Stocks" portion is
represented by (I) the S&P 500 Index and (II) THE EUROPE AND AUSTRALASIA, FAR
EAST EQUITY (EAFE) INDEX, AND the "Bonds" portion by the Lehman Long-Term
Government Bond Index. These are passive indices of equity and debt securities
, RESPECTIVELY, THAT are generally purchased by investors with an investment
objective of capital preservation, growth or income. The MAR Fund/Pool
Qualified Universe Index is a dollar-weighted index of 420 managed futures
funds, including the performance of current as well as retired funds, whose
objective is speculative trading profits. The performance for all indices was
calculated using compounded monthly returns. A prospective investor is advised
that neither the above chart nor the performance tables in this Prospectus
should be interpreted to mean the Trust will obtain similar results or generate
any profits whatsoever in the future. Performance DATA for stocks, bonds and
international stocks is provided by Thomson Investment Software, Rockville, MD.
The Lehman Long-Term Government Bond Index represents all publicly-issued
long-term government debt securities (average maturity is 23.4 years). THE EAFE
INDEX REPRESENTS INTERNATIONAL STOCKS SELECTED BY MORGAN STANLEY CAPITAL
INTERNATIONAL GROUP.

THE PERFORMANCE INFORMATION OF THE ASSET CLASSES ABOVE DOES NOT
REFLECT THE EFFECT OF FEES IDENTICAL TO THOSE TO BE PAID BY THE TRUST, INCLUDING
MANAGEMENT, INCENTIVE AND BROKERAGE FEES. PAST PERFORMANCE IS NO GUARANTEE OF
FUTURE RESULTS. NOTE THAT WHILE THE MAR FUND/POOL QUALIFIED UNIVERSE INDEX
REFLECTS RESULTS NET OF ACTUAL FEES AND EXPENSES, IT INCLUDES ACCOUNTS WITH
TRADING ADVISORS AND FEE STRUCTURES THAT DIFFER FROM PUBLIC MANAGED FUTURES
FUNDS (SUCH AS THE TRUST). ACCORDINGLY, WHILE THE MAR FUND/POOL QUALIFIED
UNIVERSE INDEX IS BELIEVED TO BE REPRESENTATIVE OF MANAGED FUTURES IN GENERAL,
THE PERFORMANCE OF PUBLIC MANAGED FUTURES FUNDS AS A SUBCLASS MAY DIFFER. SEE
"THE ADVISORS" ON PAGES 55-99, FOR PERFORMANCE INFORMATION RELATING TO THE
ADVISORS.

-105-

<PAGE>

CORRELATION ANALYSIS
MAR
F/P EAFE S&P 500 LT Bond
--------- -------- ----------- ------------
MAR F/P 1 0.00 0.07 0.16

EAFE 1 0.45 0.23

S&P 500 1 0.41

LT Bond 1

The above Correlation Analysis reflects the correlation of monthly
returns of the indices set forth in the chart on page 105 over the SIXTEEN AND
ONE-HALF years ending JUNE 30, 1997. However, low OR NON-CORRELATION IS NOT
NEGATIVE CORRELATION. NON-CORRELATION MEANS ONLY THAT THE PERFORMANCE OF AN
ASSET CLASS MAY OR MAY NOT BE SIMILAR TO THAT OF THE GENERAL FINANCIAL MARKETS,
NOT THAT THERE SHOULD BE AN INVERSE RELATIONSHIP BETWEEN THEM. SEE "RISK
FACTORS -- (13) NON-CORRELATED, NOT NEGATIVELY CORRELATED, PERFORMANCE
OBJECTIVE" AND "-- (14) BROAD INDICES MAY PERFORM QUITE DIFFERENTLY FROM
INDIVIDUAL INVESTMENTS" AT PAGE 10.

COMPARISONS AMONG VARIOUS ASSET CLASSES DO NOT REFLECT THE DIFFERENT
TAX TREATMENT OR RISK CHARACTERISTICS OF SUCH ASSET CLASSES, OR OF ANY
PARTICULAR INVESTMENT. SEE "RISK FACTORS -- (19) UNITHOLDERS TAXED CURRENTLY"
AT PAGE 11. FURTHERMORE, MANAGED FUTURES FUNDS, SUCH AS THE TRUST, REPRESENT A
COMMITMENT TO TRADING RATHER THAN INVESTING. MANAGED FUTURES FUNDS UNLIKE MANY
OTHER "ALTERNATIVE" INVESTMENT CLASSES, DO NOT INVOLVE THE ACQUISITION OF ANY
ASSETS WITH AN INTRINSIC VALUE. ALTHOUGH THE COMMODITIES AND INSTRUMENTS WHICH
UNDERLIE THE TRUST'S FUTURES, FORWARD AND RELATED CONTRACTS HAVE INTRINSIC
VALUE, THE SUCCESS OF THE TRUST DEPENDS ENTIRELY ON THE RESULTS OF SPECULATIVE
TRADING. THE TRUST WILL ACQUIRE MARKET EXPOSURES SEEKING TO PROFIT FROM PRICE
MOVEMENTS IN COMMODITIES AND FINANCIAL INSTRUMENTS WHICH THE TRUST, IN FACT,
WILL LIKELY NEVER OWN.

-106-

<PAGE>

[CHART TO BE INSERTED BY KENMAR]

MANAGEMENT FUTURES VS. STOCKS
12-MONTH HOLDING PERIOD PERFORMANCE

/ / S&P 500 / / MAR F/P INDEX

70.00%

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%

- -10.00%

- -20.00%

Dec-81
Jun-82
Dec-82
Jun-83
Dec-83
Jun-84
Dec-84
Jun-85
Dec-85
Jun-86
Dec-86
Jun-87
Dec-87
Jun-88
Dec-88
Jun-89
Dec-89
Jun-90
Dec-90
Jun-91
Dec-91
Jun-92
Dec-92
Jun-93
Dec-93
Jun-94
Dec-94
Jun-95
Dec-95
Jun-96
Dec-96
Jun-97
Dec-97

DATE: DECEMBER 19981 THROUGH JUNE 1997
STOCKS: S&P 500 INDEX (THOMPSON INVESTMENT SOFTWARE, ROCKVILLE, MD)
MANAGED FUTURES: MAR FUND/POOL DOLLAR WEIGHTED INDEX (MAR REPORTS, NEW
YORK, NY)

-107-

<PAGE>

NOTES TO "MANAGED FUTURES VS. STOCKS" TABLE

Managed futures investments can serve to diversify a portfolio and
smooth overall portfolio volatility. Several academic studies, such as that of
the late Prof. John Lintner of Harvard University, indicate that the nature of
the futures markets traded, combined with the ability to profit in rising or
declining markets as well as in bull or bear market cycles, has contributed to
the non-correlated nature of returns experienced by managed futures investments.

The chart above illustrates the performance of managed futures against
that of stocks from JANUARY 1, 1981 through JUNE 30, 1997, using the recognized
market indices of each asset CLASS. Each bar represents the asset class
performance derived from successive 12-month holding periods or windows. (A
12-month holding period is defined as a period of 12 consecutive months, I.E.,
from January 1989 to December 1989; the next would be from February 1989 to
January 1990, etc.)

By overlaying returns, investors can see the potential benefits of a
diversified portfolio that includes both traditional asset classes as well as
assets that are non-traditional and non-correlated. There are many times when
both the managed futures and stock indices showed positive performance.
Obviously, though, there is no investment that only appreciates. There are 31
periods when managed futures showed negative returns, while stocks experienced
26 periods of negative returns during the studied time frame. While not a
guarantee of FUTURE results, this chart provides clear indication of the
non-correlated aspect of managed futures. This non-correlation enables
investors with managed futures to potentially lower the overall volatility of
their portfolios.

THE PERFORMANCE INFORMATION OF THE ASSET CLASSES ABOVE DOES NOT
REFLECT THE EFFECT OF FEES IDENTICAL TO THOSE TO BE PAID BY THE TRUST, INCLUDING
MANAGEMENT, INCENTIVE AND BROKERAGE FEES. PAST PERFORMANCE IS NO GUARANTEE OF
FUTURE RESULTS. NOTE THAT WHILE THE MAR FUND/POOL QUALIFIED FUND UNIVERSE INDEX
REFLECTS RESULTS NET OF ACTUAL FEES AND EXPENSES, IT INCLUDES ACCOUNTS WITH
TRADING ADVISORS AND FEE STRUCTURES THAT DIFFER FROM PUBLIC MANAGED FUTURES
FUNDS (SUCH AS THE TRUST). ACCORDINGLY, WHILE THE MAR FUND/POOL QUALIFIED FUND
UNIVERSE INDEX IS BELIEVED TO BE REPRESENTATIVE OF MANAGED FUTURES IN GENERAL,
THE PERFORMANCE OF PUBLIC MANAGED FUTURES FUNDS AS A SUBCLASS MAY DIFFER. SEE
"THE ADVISORS" ON PAGES 54-98, FOR PERFORMANCE INFORMATION RELATING TO THE
ADVISORS.

The Trust's combined benefits of aggressive growth potential (with
commensurate risk) and diversification can potentially reduce overall portfolio
volatility while maximizing profits. By combining asset classes, investors
strive to create a portfolio mix that provides the potential to offer the
greatest possible return within acceptable levels of volatility. While past
performance is no guarantee of future results, a managed futures investment such
as the Trust may profit (with commensurate risk) in sustained futures and
forward market moves, regardless of their direction, a potential enhancement to
an investor's overall portfolio.

MARKET DIVERSIFICATION

The Trust is designed to add the potential for significant capital
growth to an investment portfolio by investing in a wide array of markets. As
global markets and investing become more complex, professionally managed futures
may increasingly continue to be included in traditional portfolios of stocks and
bonds managed by advisors seeking improved balance and diversification. The
globalization of the world's economy has the potential to offer significant
investment opportunities, as major political and economic events continue to
have an influence, in some cases a dramatic influence, on the world's markets,
creating risk but also providing the potential for profitable trading
opportunities. By allocating a portion of the risk segment of their portfolios
to selected advisors specializing in futures, forward and options trading,
investors have the potential, if their futures investment is successful, to
enhance their prospects for improved performance as well as to reduce the
volatility of their portfolios over time and the dependence of such portfolios
on any single nation's economy.

-108-

<PAGE>

SMALL MINIMUM INVESTMENT; SMALLER MINIMUM ADDITIONAL INVESTMENT

Each of the initial Advisors is only available to manage individual
accounts of substantial size -- ranging from $500,000 to $5,000,000. Investors
in the Trust are able to gain access to each of these Advisors, and to the
diversification benefits of placing assets with all five of them, for a minimum
investment of only 50 Units, or $5,000 if less (20 Units, or $2,000 if less, in
the case of trustees or custodians of eligible employee benefit plans and
individual retirement accounts). Existing Unitholders making additional
investments may do so in minimums of only 20 Units, or $2,000 if less.

LIMITED LIABILITY

Unlike a person who opens an individual futures account, a subscriber
to the Trust cannot lose more than his or her investment.

-109-

<PAGE>

INDEX TO FINANCIAL STATEMENTS

Page
----
KENMAR GLOBAL TRUST

Independent Auditor's Report. . . . . . . . . . . . . . . . . . . . . F-2
Statements of Financial Condition as of June 30, 1997 (unaudited)
and December 31, 1996 (audited). . . . . . . . . . . . . . . . . F-3
Statement of Operations for the Six Months Ended June 30, 1997
(unaudited). . . . . . . . . . . . . . . . . . . . . . . . . . . F-4
Statement of Cash Flows for the Six Months Ended June 30, 1997
(unaudited). . . . . . . . . . . . . . . . . . . . . . . . . . . F-5
Statement of Changes in Unitholders' Capital (Net Asset Value) for
the Six Months Ended June 30, 1997 (unaudited) . . . . . . . . . F-6
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . F-7

KENMAR ADVISORY CORP.

Independent Auditor's Report. . . . . . . . . . . . . . . . . . . . . F-14
Statements of Financial Condition as of June 30, 1997 (unaudited)
and September 30, 1996 (audited) . . . . . . . . . . . . . . . . F-15
Notes to Statements of Financial Condition. . . . . . . . . . . . . . F-16

Schedules are omitted for the reason that they are not
required or are not applicable or that equivalent information
has been included in the financial statements or notes
thereto.

F-1

<PAGE>

INDEPENDENT AUDITOR'S REPORT

To the Unitholders
Kenmar Global Trust

We have audited the accompanying statement of financial condition of Kenmar
Global Trust as of December 31, 1996. This financial statement is the
responsibility of the TRUST'S management. Our responsibility is to express an
opinion on this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statement referred to above presents fairly, in
all material respects, the financial position of Kenmar Global Trust as of
December 31, 1996, in conformity with generally accepted accounting principles.

ARTHUR F. BELL, JR. & ASSOCIATES, L.L.C.

Lutherville, Maryland
August 6, 1997

F-2

<PAGE>

KENMAR GLOBAL TRUST
STATEMENTS OF FINANCIAL CONDITION
June 30, 1997 (Unaudited) and December 31, 1996 (Audited)
___________________

June 30, December 31,
1997 1996
---------- ------------
ASSETS
Equity in broker trading accounts
Cash $5,586,644 $ 0
Net option premiums (received) (32,861) 0
Unrealized gain on open contracts 28,959 0
---------- ------

Deposits with brokers 5,582,742 0

Cash 2,787,423 2,000
---------- ------

Total assets $8,370,165 $2,000
---------- ------
---------- ------

LIABILITIES
Accounts payable $ 4,013 $ 0
Commissions and other trading fees on open
contracts 694 0
Managing Owner brokerage commissions 84,205 0
Advisor profit shares 4,291 0
Reimbursable offering costs 1,605 0
---------- ------

Total liabilities 94,808 0
---------- ------

UNITHOLDERS' CAPITAL (Net Asset Value)
Managing Owner - 872.2321 and 4.0000 units
outstanding at June 30, 1997 and December 31,
1996, respectively 84,958 400
Other Unitholders - 84,088.1842 and 16.0000 units
outstanding at June 30, 1997 and December 31,
1996, respectively 8,190,399 1,600
---------- ------

Total Unitholders' capital
(Net Asset Value) 8,275,357 2,000
---------- ------

$8,370,165 $2,000
---------- ------
---------- ------

See accompanying notes.

F-3

<PAGE>

KENMAR GLOBAL TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1997
(Unaudited)
__________________

INCOME
Trading gains (losses)
Realized $(172,371)
Change in unrealized 28,959
---------

(Loss) from trading (143,412)

Interest income 44,960
---------

Total (loss) (98,452)
---------

EXPENSES
Brokerage commissions 4,077
Managing Owner brokerage commissions 84,205
Advisor profit shares 4,291
Operating expenses 4,013
---------

Total expenses 96,586
---------

NET (LOSS) $(195,038)
---------
---------

NET (LOSS) PER UNIT
(based on weighted average number of
units outstanding during the period) $ (2.67)
---------
---------

(DECREASE) IN NET ASSET
VALUE PER UNIT $ (2.60)
---------
---------

See accompanying notes.

F-4

<PAGE>

KENMAR GLOBAL TRUST
STATEMENT OF CASH FLOWS
For the Six Months Ended June 30, 1997
(Unaudited)
____________________

Cash flows from (for) operating activities
Net (loss) $ (195,038)
Adjustments to reconcile net (loss) to net
cash (for) operating activities:
Net change in unrealized (28,959)
Increase in accounts payable and accrued expenses 93,203

Net option premiums received 32,861
----------

Net cash (for) operating activities (97, 933)
----------

Cash flows from financing activities
Addition of units 8,470,000
----------

Net increase in cash 8,372,067

Cash
Beginning - December 31, 1996 2,000
----------

Ending - June 30, 1997 $8,374,067
----------

See accompanying notes.

F-5

<PAGE>

KENMAR GLOBAL TRUST
STATEMENT OF CHANGES IN UNITHOLDERS' CAPITAL (NET ASSET VALUE)
For the Six Months Ended June 30, 1997
(Unaudited)
___________________

Unitholders' Capital
----------------------------------
Total Number Managing Other
of Units Owner Unitholders Total
------------ --------- ----------- ----------

Balances at
December 31, 1996 20.0000 $ 400 $ 1,600 $ 2,000

Additions 84,940.4163 86,600 8,383,400 8,470,000

Net (loss) for the six months
ended June 30, 1997 0 (2,025) (193,013) (195,038)

Offering costs 0 (17) (1,588) (1,605)
------------ --------- ----------- ----------

Balances at
June 30, 1997 84,960.4163 $ 84,958 $8,190,399 $8,275,357
------------ --------- ----------- ----------
------------ --------- ----------- ----------

Net Asset Value Per Unit

June 30, December 31,
1997 1996
---- ----

$97.40 $100.00
------ -------
------ -------

See accompanying notes.

F-6

<PAGE>

KENMAR GLOBAL TRUST
NOTES TO FINANCIAL STATEMENTS
For the six months ended June 30, 1997 (unaudited)
December 31, 1996 (audited)
_______________________

Note 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. General Description of the Trust

Kenmar Global Trust (the "TRUST") is a Delaware business trust
THAT operates as a commodity investment pool. The Trust was
formed on July 17, 1996 and commenced trading on May 22, 1997.

B. Regulation

As a registrant with the Securities and Exchange Commission, the
Trust is subject to the regulatory requirements under the
Securities Acts of 1933 and 1934. As a commodity investment
pool, the Trust is subject to the regulations of the Commodity
Futures Trading Commission, an agency of the United States (U.S.)
government THAT regulates most aspects of the commodity futures
industry, rules of the National Futures Association, an industry
self-regulatory organization, and the requirements of the various
commodity exchanges ON WHICH the Trust executes transactions.
Additionally, the Trust is subject to the requirements of the
FUTURES COMMISSION MERCHANTS and interbank market makers
(brokers) through which the Trust trades.

C. Method of Reporting

The TRUST'S financial statements are presented in accordance with
generally accepted accounting principles, which require the use
of certain estimates made by the TRUST'S management. Gains or
losses are realized when contracts are liquidated. Net
unrealized gain or loss on open contracts (the difference between
contract purchase prices and market prices) is reported in the
statement of financial condition in accordance with Financial
Accounting Standards Board Interpretation No. 39 - "OFFSETTING of
Amounts Related to Certain Contracts." Any change in net
unrealized gain or loss from the preceding period is reported in
the statement of operations. Brokerage commissions paid directly
to brokers include other trading fees and are charged to expense
when contracts are opened.

D. Income Taxes

The Trust prepares calendar year U.S. and state information tax
returns and reports to the Unitholders their allocable shares of
the TRUST'S income, expenses and trading gains or losses.

F-7

<PAGE>

KENMAR GLOBAL TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
For the six months ended June 30, 1997 (unaudited)
December 31, 1996 (audited)
___________________

Note 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)

E. Organizational and Initial Offering Costs

Organizational and initial offering costs (exclusive of selling
commissions) of approximately $578,000 were advanced by the
Managing Owner. Such costs are charged to the Trust and
reimbursed to the Managing Owner at a monthly rate of 0.2% of the
TRUST'S beginning of month Net Asset Value until such amounts are
fully reimbursed. Any unreimbursed organizational and initial
offering costs as of the date of the TRUST'S dissolution will not
be reimbursed to the Managing Owner.

The Declaration of Trust and Trust Agreement limits
organizational and offering costs, including selling commissions
and redemption fees, to 15% of the capital contributions to the
Trust.

F. Foreign Currency Transactions

The TRUST'S functional currency is the U.S. dollar; however, it
transacts business in currencies other than the U.S. dollar.
Assets and liabilities denominated in currencies other than the
U.S. dollar are translated into U.S. dollars at the rates in
effect at the date of the statement of financial condition.
Income and expense items denominated in currencies other than the
U.S. dollar are translated into U.S. dollars at the rates in
effect during the period. Gains and losses resulting from the
translation to U.S. dollars are reported in income currently.

Note 2. MANAGING OWNER

The MANAGING OWNER of the Trust is Kenmar Advisory Corp. (THE
"MANAGING OWNER"), which conducts and manages the business of the
Trust. The Declaration of Trust and Trust Agreement requires the
Managing Owner to maintain a capital account equal to 1% of the total
capital accounts of the Trust.

F-8

<PAGE>

KENMAR GLOBAL TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
For the six months ended June 30, 1997 (unaudited)
December 31, 1996 (audited)
_________________________

Note 2. MANAGING OWNER (CONTINUED)

The Managing Owner is paid monthly brokerage commissions equal to 1/12
of 11% (11% annually) of the TRUST'S beginning-of- month Net Asset
Value. The Managing Owner, in turn, pays substantially all actual
costs of executing the TRUST'S trades, selling commissions and
trailing commissions to selling agents, and consulting fees to the
Advisors. To the extent that certain costs of executing the TRUST'S
trades are paid directly by the Trust, the amount paid to the Managing
Owner will be reduced.

The Managing Owner is paid an incentive fee equal to 5% of New Overall
Appreciation (as defined in the Declaration of Trust and Trust
Agreement) as of each fiscal year-end and upon redemption of Units.

Note 3. COMMODITY TRADING ADVISORS

The Trust has advisory agreements with various commodity trading
advisors, pursuant to which the Trust pays quarterly profit shares of
15% to 20% of Trading Profits (as defined in each Advisory Agreement).

Note 4. DEPOSITS WITH BROKERS

The Trust deposits funds with brokers subject to Commodity Futures
Trading Commission regulations and various exchange and broker
requirements. Margin requirements are satisfied by the deposit of
cash with such brokers. The Trust earns interest income on its assets
deposited with the brokers.

Note 5. SUBSCRIPTIONS, DISTRIBUTIONS AND REDEMPTIONS

Investments in UNITS OF BENEFICIAL INTEREST are made by subscription
agreement, subject to acceptance by the Managing Owner. The Trust is
not required to make distributions, but may do so at the sole
discretion of the Managing Owner.

F-9

<PAGE>

KENMAR GLOBAL TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
For the six months ended June 30, 1997 (unaudited)
December 31, 1996 (audited)
_________________________

Note 5. SUBSCRIPTIONS, DISTRIBUTIONS AND REDEMPTIONS (CONTINUED)

A Unitholder may request and receive redemption of Units owned,
beginning with the end of the sixth month after such Units are sold,
subject to restrictions in the Declaration of Trust and Trust
Agreement. Units redeemed on or before the end of the twelfth full
calendar month and after the end of the twelfth full month but on or
before the end of the eighteenth full calendar month after the date
such Units begin to participate in the profits and losses of the Trust
are subject to early redemption charges of 3% and 2%, respectively, of
the Net Asset Value redeemed. All redemption charges are paid to the
Managing Owner.

Note 6. TRADING ACTIVITIES AND RELATED RISKS

The Trust engages in the speculative trading of U.S. and foreign
futures contracts, options on U.S. and foreign futures contracts and
forward contracts AND RELATED INSTRUMENTS (collectively,
"DERIVATIVES"). These derivatives include both financial and
non-financial contracts held as part of a diversified trading
strategy. The Trust is exposed to both market risk, the risk arising
from changes in the market value of the contracts, and credit risk,
the risk of failure by another party to perform according to the terms
of a contract.

Purchases and sales of futures and options on futures contracts
require margin deposits with the brokers. Additional deposits may be
necessary for any loss of contract value. The Commodity Exchange Act
requires a commodity broker to segregate all customer transactions and
assets from such BROKER'S proprietary activities. A CUSTOMER'S cash
and other property (for example, U.S. Treasury bills) deposited with a
commodity broker are considered commingled with all other customer
funds subject to the BROKER'S segregation requirements. In the event
of a commodity BROKER'S insolvency, recovery may be limited to a pro
rata share of segregated funds available. It is possible that the
recovered amount could be less than total cash and other property
deposited.

The Trust has a substantial portion of its assets on deposit with
financial institutions in connection with its trading of forward
contracts and its cash management activities. In the event of a
financial INSTITUTION'S insolvency, recovery of Trust assets on
deposit may be limited to account insurance or other protection
afforded such deposits. In the normal course of business, the Trust
does not require collateral from such financial institutions. Since
forward contracts are traded in unregulated markets between
principals, the Trust also assumes the risk of loss from counterparty
nonperformance.

F-10

<PAGE>

KENMAR GLOBAL TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
For the six months ended June 30, 1997 (unaudited)
December 31, 1996 (audited)
________________________

Note 6. TRADING ACTIVITIES AND RELATED RISKS (CONTINUED)

For derivatives, risks arise from changes in the market value of the
contracts. Theoretically, the Trust is exposed to a market risk equal
to the value of futures and forward contracts purchased and unlimited
liability on such contracts sold short. As both a buyer and seller of
options, the Trust pays or receives a premium at the outset and then
bears the risk of unfavorable changes in the price of the contract
underlying the option. Written options expose the Trust to
potentially unlimited liability, and purchased options expose the
Trust to a risk of loss limited to the premiums paid.

The fair value of derivatives represents unrealized gains and losses
on open futures and forward contracts and long and short options at
market value. The average fair value of derivatives for the period
May 22, 1997 (commencement of trading) to June 30, 1997 and the
related fair values as of June 30, 1997 are as follows:

For the Period
May 22, 1997
to As of
June 30, 1997 June 30, 1997
-------------- -------------
Exchange traded futures and options
on futures contracts $(10,000) $(7,000)
Forward Contracts 4,000 3,000

Net trading results from derivatives for the six months ended June 30,
1997 are reflected in the statement of operations and consist of the
(loss) from trading less brokerage commissions and the portion of the
Managing Owner brokerage commissions that is payable to the brokers.
For the six months ended June 30, 1997, the portion of the Managing
Owner brokerage commissions that is payable to the brokers was
approximately $5,000. Such trading results reflect the net (loss)
arising from the TRUST'S speculative trading of futures contracts,
options on futures contracts and forward contracts.

F-11

<PAGE>

KENMAR GLOBAL TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
For the six months ended June 30, 1997 (unaudited)
December 31, 1996 (audited)
_______________________

Note 6. TRADING ACTIVITIES AND RELATED RISKS (CONTINUED)

Open contracts generally mature within one year; the latest maturity
date for open contracts as of June 30, 1997 is June 1998. However,
the Trust intends to close all contracts prior to maturity. At June
30, 1997, the notional amount of open contracts is as follows:

Contracts to Contracts to
SELL Purchase

Exchange traded futures contracts and
written options thereon:
- Financial instruments $35,800,000 $ 9,300,000
- Metals 3,500,000 1,800,000
- Energy 0 200,000
- Agricultural 1,200,000 600,000
- Currencies 8,200,000 7,400,000

Forward Contracts:
- Currencies 1,400,000 2,400,000

$50,100,000 $21,700,000
----------- -----------
----------- -----------

Exchange traded purchased options
on futures contracts:
- Financial instruments $ 500,000 $ 0
- Metals 400,000 400,000
- Currencies 200,000 800,000

$ 1,100,000 $ 1,200,000
----------- -----------
----------- -----------

The above amounts do not represent the TRUST'S risk of loss due to
market and credit risk, but rather represent the TRUST'S extent of
involvement in derivatives at the date of the statement of financial
condition.

The Managing Owner has established procedures to actively monitor and
minimize market and credit risk. The Unitholders bear the risk of
loss only to the extent of the market value of their respective
investments and, in certain specific circumstances, distributions and
redemptions received.

F-12

<PAGE>

KENMAR GLOBAL TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
For the six months ended June 30, 1997 (unaudited)
December 31, 1996 (audited)
____________________

Note 7. INTERIM FINANCIAL STATEMENTS

The statement of financial condition as of June 30, 1997 and the
statements of operations, cash flows and changes in UNITHOLDERS'
capital (net asset value) for the six months ended June 30, 1997 are
unaudited. In the opinion of management, such financial statements
reflect all adjustments, which were of a normal and recurring nature,
necessary for a fair presentation of financial position as of June 30,
1997 and the results of operations and cash flows for the six months
ended June 30, 1997.

F-13

<PAGE>

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Stockholder
Kenmar Advisory Corp.

We have audited the accompanying statement of financial condition of Kenmar
Advisory Corp. as of September 30, 1996. This financial statement is the
responsibility of the COMPANY'S management. Our responsibility is to express an
opinion on this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of financial condition is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the statement of financial condition. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall statement of financial
condition presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the statement of financial condition referred to above presents
fairly, in all material respects, the financial position of Kenmar Advisory
Corp. as of September 30, 1996, in conformity with generally accepted accounting
principles.

As discussed in the notes to the statement of financial condition, Kenmar
Advisory Corp. is a wholly-owned subsidiary and a member of a group of
affiliated companies and, as described in the statement of financial condition
and notes thereto, has extensive transactions and relationships with members of
the group.

ARTHUR F. BELL, JR. & ASSOCIATES, L.L.C.

Lutherville, Maryland
November 15, 1996

F-14

<PAGE>

KENMAR ADVISORY CORP.
STATEMENTS OF FINANCIAL CONDITION
September 30, 1996 and June 30,1997 (unaudited)

September 30, June 30,
1996 1997
------------- ----------
ASSETS (unaudited)
Current assets
Cash and cash equivalents $ 21,310 $1,895,163
Fees receivable 102,056 498,973
---------- ----------

Total current assets 123,366 2,394,136

Investments in affiliated commodity pools 766,250 1,032,482
Due from affiliates, net 2,955,598 4,775,174
Property and equipment, net 837,385 697,881
Other assets 32,969 45,496
---------- ----------

Total assets $4,715,568 $8,945,169
---------- ----------
---------- ----------

LIABILITIES
Cash overdraft $ 450,075 $ 0
Bank loan payable 0 544,916
Accrued expenses and other liabilities 1,137,953 4,423,035
Obligations under capital leases 525,978 453,315
---------- ----------

Total liabilities 2,114,006 5,421,266
---------- ----------

STOCKHOLDER'S EQUITY
Common stock, $1 par value:
Authorized - 1,000 shares; issued
and outstanding - 100 shares 100 100
Additional paid-in capital 632,025 632,025
Retained earnings 1,969,437 2,891,778
---------- ----------

Total stockholder's equity 2,601,562 3,523,903
---------- ----------

Total liabilities and stockholder's
equity $4,715,568 $8,945,169
---------- ----------
---------- ----------

See accompanying notes.

F-15

<PAGE>

PURCHASERS OF UNITS WILL ACQUIRE NO INTEREST IN THIS COMPANY.

F-15

<PAGE>

KENMAR ADVISORY CORP.
NOTES TO STATEMENT OF FINANCIAL CONDITION
September 30, 1996
_______________

Note 1. GENERAL DESCRIPTION AND SIGNIFICANT ACCOUNTING POLICIES

A. General

Kenmar Advisory Corp. (the "Company"), a registered commodity
pool operator, organizes and operates commodity pools that engage
in the speculative trading of commodity futures, forwards and
option contracts.

The Company is a wholly-owned subsidiary of Kenmar Holdings Inc.
(the "Parent") which, in turn, is wholly-owned by Kenmar
Investment Associates. Two of the Company's officers are the
sole shareholders of MSG Commodities, Inc. and KAS Commodities,
Inc. which, in turn, own Kenmar Investment Associates equally.

The Company receives a majority of its revenue from the operation
of related entities.

The accompanying statement of financial condition is presented in
accordance with generally accepted accounting principles, which
require the use of certain estimates made by the Company's
management.

B. Cash and Cash Equivalents

Cash and cash equivalents includes all cash and money market
account balances. The Company places its cash and cash
equivalents with primarily one financial institution. At times,
such balances on deposit may be in excess of available insurance.

C. Investments in Affiliated Commodity Pools

The Company's investments in affiliated commodity pools, of which
the Company is General Partner, are carried at its share of the
underlying equity in the net assets of the commodity pools. As
General Partner, the Company has a fiduciary responsibility to
the pools, and as such, has general partner liability.

D. Revenue Recognition

Commissions are recognized as transactions are placed with
clearing brokers. Management and incentive fees accrue monthly
based on the terms of the respective agreements.

PURCHASERS OF UNITS WILL ACQUIRE NO INTEREST IN THIS COMPANY.

F-16

<PAGE>

KENMAR ADVISORY CORP.
NOTES TO STATEMENT OF FINANCIAL CONDITION (CONTINUED)
September 30, 1996
_______________

Note 1. GENERAL DESCRIPTION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

E. Property and Equipment

Depreciation of furniture, fixtures and office equipment is
computed using the straight-line method over the estimated useful
lives of the assets which range from 5 to 7 years. Amortization
of leasehold improvements is computed using the straight-line
method over the lesser of the term of the related lease or the
estimated useful lives of the assets. Major renewals and
betterments are capitalized and repairs and maintenance are
charged to operations as incurred.

During 1996, the Company changed their method of depreciation
from the double-declining balance method to the straight-line
method. The cumulative effect of this change in accounting
principle decreased the net loss before income tax for the year
ended September 30, 1996 by approximately $74,000. The
cumulative effect of this change was recorded in the current year
statement of operations since the effect is not significant to
the financial statements taken as a whole.

F. Income Taxes

The Company is part of an affiliated group that files
consolidated U.S., state and local income tax returns. The
Company is allocated income tax in an amount equal to its
separate tax liability or benefit computed as if it were filing
individually. State and local taxing jurisdictions also assess
taxes on bases in addition to income, for which amounts are
reported as general and administrative expense.

The Company uses an asset and liability approach to financial
accounting for income taxes. No significant differences exist in
the effective income tax rates compared to applicable statutory
rates. Deferred income taxes (benefits) are provided for all
significant temporary differences in the recognition of assets
and liabilities for tax and financial reporting purposes. These
temporary differences have resulted principally from the tax
benefit of operating losses and from differences in depreciation
methods and the useful lives of property and equipment.

Note 2. INVESTMENTS IN AFFILIATED COMMODITY POOLS

The Company has General Partner interests in various commodity pools
organized as limited partnerships. These investments are reported in
the statement of financial condition at net asset value.

PURCHASERS OF UNITS WILL ACQUIRE NO INTEREST IN THIS COMPANY.

F-17

<PAGE>

KENMAR ADVISORY CORP.
NOTES TO STATEMENT OF FINANCIAL CONDITION (CONTINUED)
September 30, 1996
________________

Note 2. INVESTMENTS IN AFFILIATED COMMODITY POOLS (CONTINUED)

Summarized financial information with respect to these General Partner
interests is as follows:

Kenmar
Performance
Partners
L.P. Other Total
----------- ------- --------
Net asset value as of September 30, 1996 $684,643 $81,607 $766,250
--------- ------- --------
--------- ------- --------

Income allocation for the year
ended September 30, 1996 $ 10,736 $ 9,424 $ 20,160
--------- ------- --------
--------- ------- --------

Summarized financial information of Kenmar Performance Partners L.P. as of
and for the year ended September 30, 1996 is as follows:

Assets $112,999,000
Liabilities 8,039,000
------------

Net asset value $104,960,000
------------
------------

Income $ 23,932,000
Expenses 25,603,000
------------

Net income (loss) $ (1,671,000)
------------
------------

PURCHASERS OF UNITS WILL ACQUIRE NO INTEREST IN THIS COMPANY.

F-18

<PAGE>

KENMAR ADVISORY CORP.
NOTES TO STATEMENT OF FINANCIAL CONDITION (CONTINUED)
September 30, 1996
______________

Note 2. INVESTMENTS IN AFFILIATED COMMODITY POOLS (CONTINUED)

As General Partner of these commodity pools, the Company conducts and
manages the respective businesses of the partnerships. Each limited
partnership agreement requires the Company to maintain a specified
investment in the respective partnership and a net worth as required
for the partnership to be treated as a partnership for U.S. income tax
purposes. The limited partnership agreement of Kenmar Performance
Partners L.P. requires the Company to maintain an investment of the
lesser of $500,000 or 1% of Net Assets. The Company is currently
maintaining a net worth of at least $2,000,000.

For managing the partnerships' businesses, the Company earns fees
based on the terms of the respective limited partnership agreements.
The Company also earns administrative fees from the partnerships as
reimbursement for operating costs incurred by the Company on behalf of
the partnerships. The administrative fees are based on a percentage
of the monthly net asset value of the partnerships.

The Company is the Managing Owner of Kenmar Global Trust (KGT), a fund
in the process of registering to become publicly offered, which has
not yet commenced operations or trading as of September 30, 1996.
Upon commencement of operations, the Company will conduct and manage
the business of KGT. The Company has committed to maintaining an
investment in KGT equal to 1% of the total capital accounts of KGT.
The Company, as Managing Owner, has also agreed to maintain a net
worth of not less than $1,000,000.

As Managing Owner, the Company will pay KGT's organizational and
initial offering costs estimated to total approximately $400,000. KGT
will reimburse the Company for such costs in monthly installments of
.2% of KGT's month-end net asset value, commencing with the first
month of trading operations. As of September 30, 1996, the Company
has paid $55,607 related to KGT's organizational and initial offering
costs. The Company has incurred an additional $190,000 of such costs
subsequent to September 30, 1996. In the event KGT does not commence
operations or terminates prior to the completion of the reimbursement
of such costs, the Company will not be entitled to any additional
reimbursement from KGT.

PURCHASERS OF UNITS WILL ACQUIRE NO INTEREST IN THIS COMPANY.

F-19

<PAGE>

KENMAR ADVISORY CORP.
NOTES TO STATEMENT OF FINANCIAL CONDITION (CONTINUED)
September 30, 1996
_______________

Note 3. PROPERTY AND EQUIPMENT

At September 30, 1996 the Company's property and equipment consists
of:

Furniture and fixtures $ 52,721
Office equipment 193,354
Leasehold improvements 10,541
Leased assets 1,065,967
----------

1,322,583
Less: Accumulated depreciation and
amortization (485,198)
----------

$ 837,385
----------
----------

During 1996, the Company relocated its primary corporate offices from
New York, New York to Greenwich, Connecticut. Leased assets are
comprised primarily of furniture, fixtures and office equipment.
Accumulated amortization related to leased assets aggregated $427,804
at September 30, 1996.

Note 4. OBLIGATIONS UNDER LEASES

The Company leases furniture, fixtures and office equipment under
noncancelable capital leases which expire at various dates through
2001. The future minimum lease payments required by these capital
leases are as follows:

Year Ending September 30
------------------------

1997 $ 154,164
1998 154,164
1999 154,164
2000 150,970
2001
56,502
---------
Total minimum lease payments 669,964
Less: Amount representing interest (143,986)
---------

Present value of obligations under
capital leases $ 525,978
---------
---------

PURCHASERS OF UNITS WILL ACQUIRE NO INTEREST IN THIS COMPANY.

F-20

<PAGE>

KENMAR ADVISORY CORP.
NOTES TO STATEMENT OF FINANCIAL CONDITION (CONTINUED)
September 30, 1996
___________________

Note 4. OBLIGATIONS UNDER LEASES (CONTINUED)

The Company leases office facilities in Greenwich, Connecticut. The
lease commenced in January 1996 for an initial term of nine years with
one five year option to renew. The future minimum lease payments
under this noncancelable operating lease are as follows:

Year Ending September 30
------------------------

1997 $ 212,799
1998 346,040
1999 379,851
2000 403,719
2001 471,334
Thereafter 1,471,675
----------

$3,285,418
----------
----------

Rent expense under noncancelable leasing arrangements was
approximately $552,482 for the year ended September 30, 1996.

Note 5. RELATED PARTY TRANSACTIONS

The Company has extensive transactions and relationships with members
of a group of affiliated companies that result in advances to and from
such affiliates. Common expenses are allocated among affiliates based
on the percentage of commissions, management, incentive and other fees
earned by the respective companies to the total consolidated fees of
the group. For the year ended September 30, 1996, the amount of
common expenses related to the Company totaled $6,807,845. The total
common expenses of the group for the year ended September 30, 1996 was
$10,165,436.

PURCHASERS OF UNITS WILL ACQUIRE NO INTEREST IN THIS COMPANY.

F-21

<PAGE>

KENMAR ADVISORY CORP.
NOTES TO STATEMENT OF FINANCIAL CONDITION (CONTINUED)
September 30, 1996

Note 5. RELATED PARTY TRANSACTIONS (CONTINUED)

The following amounts are due to the Company at September 30, 1996:

Members of the consolidated group, net $1,911,177
Kenmar Management Limited 240,919
Kenmar Institutional Investment
Management L.L.C. 219,721
Receivables from Officers 442,480
Other 141,301
----------
$2,955,598
----------
----------

No specific terms apply to the liquidation of amounts due from
affiliates. The Company exercises its right of offset of intercompany
balances reported in the statement of financial condition.

As compensation for services provided to affiliated commodity pools,
the Company receives from commodity brokers a portion of the brokerage
commissions paid to them by the commodity pools and also receives
commissions, management, incentive, organization and other fees
directly from the commodity pools. For the year ended September 30,
1996, the Company earned management, incentive and other fees of
$1,493,704 from these affiliated commodity pools. At September 30,
1996, the Company is owed fees of $15,567 from these commodity pools.

Note 6. COMMITMENTS AND CONTINGENCIES

The Company and certain of its affiliates have jointly guaranteed a
demand note payable by the Parent. This note had a balance of
$625,000 at September 30, 1996.

PURCHASERS OF UNITS WILL ACQUIRE NO INTEREST IN THIS COMPANY.

F-22

<PAGE>

KENMAR ADVISORY CORP.
NOTES TO STATEMENT OF FINANCIAL CONDITION (CONTINUED)
September 30, 1996
________________

Note 7. TRADING ACTIVITIES AND RELATED RISKS

The limited partnerships for which the Company is the General Partner
engage in the speculative trading of futures contracts, options on
futures contracts and forward contracts (collectively "derivatives")
in U.S. and foreign markets. Theoretically, the limited partnerships,
and therefore, the Company, as General Partner, are exposed to both
market risk, the risk arising from changes in the market value of the
contracts, and credit risk, the risk of failure by another party to
perform according to the terms of a contract. The limited
partnerships are exposed to market risk equal to the value of
contracts purchased and unlimited liability on contracts sold short.
Written options expose the limited partnerships to potentially
unlimited liability and purchased options expose the limited
partnerships to a risk of loss limited to the premiums paid. Since
forward contracts are traded in unregulated markets between
principals, the limited partnerships also assume the risk of loss from
counterparty nonperformance.

The limited partnerships have a substantial portion of their assets on
deposit with futures commission merchants, brokers and dealers in
securities and other financial institutions in connection with trading
and cash management activities. In the event of a financial
institution's insolvency, recovery of partnership assets on deposit
may be limited to account insurance or other protection afforded such
deposits.

The average fair value of derivatives traded by the limited
partnerships during the year ended September 30, 1996 was
approximately $10,002,000 and the related year-end fair value was
approximately $19,403,000. The fair value of derivatives represents
unrealized gains and losses on open forward and futures contracts and
long and short options at market value.

At September 30, 1996, the notional amounts of open contracts to
purchase and sell held by the limited partnerships aggregated
approximately $2,786,000,000 and $778,000,000, respectively. The
notional amounts do not represent the limited partnerships' risk of
loss due to market and credit risk, but rather represent the extent of
involvement in derivatives at September 30, 1996.

The Company, as General Partner, has established procedures to
actively monitor and minimize market and credit risk.

PURCHASERS OF UNITS WILL ACQUIRE NO INTEREST IN THIS COMPANY.

F-23

<PAGE>

KENMAR ADVISORY CORP.
NOTES TO STATEMENT OF FINANCIAL CONDITION
June 30, 1997 (unaudited)
___________________

The interim statement of financial condition as of June 30, 1997 is unaudited
and does not include all disclosures required by generally accepted accounting
principles. Such interim statement of financial condition should be read in
conjunction with the Company's audited statement of financial condition as of
September 30, 1996, included on the preceding pages. In the opinion of
management, such unaudited statement reflects all adjustments of a normal and
recurring nature which are necessary for a fair presentation of financial
position as of June 30,1997.

In April, 1997, the Company entered into a line of credit agreement with a
financial institution that secured financing for certain organizational, initial
offering and selling costs paid by the Company on behalf of KGT. Total credit
available under this facility is $1,000,000, with $544,916 outstanding as of
June 30, 1997. This line of credit is to be repaid principally from the proceeds
of the monthly reimbursement of organizational and initial offering costs, as
well as the monthly brokerage commissions paid to the Company by KGT .

Subsequent to the release of the Company's accompanying audited statement of
financial condition as of September 30, 1996 and the notes thereto, KGT
completed registration with the Securities and Exchange Commission and commenced
operations and trading. KGT's assets as of June 30,1997 were approximately
$8,400,000.

PURCHASERS OF UNITS WILL ACQUIRE NO INTEREST IN THIS COMPANY.

F-24

<PAGE>

APPENDIX I

GLOSSARY

SEE "INDEX OF DEFINED TERMS."

BLUE SKY GLOSSARY

THE FOLLOWING DEFINITIONS ARE INCLUDED IN THIS APPENDIX I IN
COMPLIANCE WITH THE REQUIREMENTS OF VARIOUS STATE SECURITIES ADMINISTRATORS WHO
REVIEW PUBLIC FUTURES FUND OFFERINGS FOR COMPLIANCE WITH THE "GUIDELINES FOR THE
REGISTRATION OF COMMODITY POOL PROGRAMS" STATEMENT OF POLICY PROMULGATED BY THE
NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION, INC. THE FOLLOWING
DEFINITIONS ARE REPRINTED VERBATIM FROM SUCH GUIDELINES AND MAY, ACCORDINGLY,
NOT IN ALL CASES BE RELEVANT TO AN INVESTMENT IN THE TRUST.

Definitions -- As used in the Guidelines, the following terms
have the following meanings:

ADMINISTRATOR -- The official or agency administering the
security laws of a state.

ADVISOR -- Any person who for any consideration engages in the
business of advising others, either directly or indirectly, as to the value,
purchase, or sale of commodity contracts or commodity options.

AFFILIATE -- An Affiliate of a Person means: (a) any Person
directly or indirectly owning, controlling or holding with power to vote 10% or
more of the outstanding voting securities of such Person; (b) any Person 10% or
more of whose outstanding voting securities are directly or indirectly owned,
controlled or held with power to vote, by such Person; (c) any Person, directly
or indirectly, controlling, controlled by, or under common control of such
Person; (d) any officer, director or partner of such Person; or (e) if such
Person is an officer, director or partner, any Person for which such Person acts
in any such capacity.

CAPITAL CONTRIBUTIONS -- The total investment in a Program by a
Participant or by all Participants, as the case may be.

COMMODITY BROKER -- Any Person who engages in the business of
effecting transactions in commodity contracts for the account of others or for
his own account.

COMMODITY CONTRACT -- A contract or option thereon providing for
the delivery or receipt at a future date of a specified amount and grade of a
traded commodity at a specified price and delivery point.

CROSS REFERENCE SHEET -- A compilation of the Guideline sections,
referenced to the page of the prospectus, Program agreement, or other exhibits,
and justification of any deviation from the Guidelines.

NET ASSETS -- The total assets, less total liabilities, of the
Program determined on the basis of generally accepted accounting principles.
Net Assets shall include any unrealized profits or losses on open positions, and
any fee or expense including Net Asset fees accruing to the Program.

NET ASSET VALUE PER PROGRAM INTEREST -- The Net Assets divided by
the number of Program Interests outstanding.

NET WORTH -- The excess of total assets over total liabilities as
determined by generally accepted accounting principles. Net Worth shall be
determined exclusive of home, home furnishings and automobiles.

NEW TRADING PROFITS -- The excess, if any, of Net Assets at the
end of the period over Net Assets at the end of the highest previous period or
Net Assets at the date trading commences, whichever is higher, and as further
adjusted to eliminate the effect on Net Assets resulting from new Capital
Contributions, redemptions, or capital distributions, if any,

APPI-1

<PAGE>

made during the period decreased by interest or other income, not directly
related to trading activity, earned on Program assets during the period, whether
the assets are held separately or in a margin account.

"New Trading Profit," as defined on page 24 of the Prospectus,
differs from the above definition of New Trading Profits as
follows: It is calculated separately for each Advisor's Trust
Account. It is equivalent to the excess, if any, of Net Assets
as of any calendar quarter-end over Net Assets at the end of the
highest previous calendar quarter-end or $0, whichever is higher,
after Net Assets in respect of each Advisor's account are
adjusted by reducing the change in Net Assets by the sum of
interest income, actual brokerage commissions (estimated at an
annual rate of 4.5% - 7.0% of average beginning of month assets),
plus execution costs actually incurred (other than floor
brokerage, exchange, clearing and NFA fees).

"New Overall Appreciation," as defined on page 24 of the
Prospectus, is equivalent to the increase, if any, in Net Assets
as of any December 31 from the highest level of Net Assets as of
any previous December 31, after deducting interest income.

ORGANIZATIONAL AND OFFERING EXPENSES -- All expenses incurred by
the Program in connection with and in preparing a Program for registration and
subsequently offering and distributing it to the public, including, but not
limited to, total underwriting and brokerage discounts and commissions
(including fees of the underwriter's attorneys), expenses for printing,
engraving, mailing, salaries of employees while engaged in sales activity,
charges of transfer agents, registrars, trustees, escrow holders, depositories,
experts, expenses of qualification of the sale of its Program Interest under
federal and state law, including taxes and fees, accountants' and attorneys'
fees.

PARTICIPANT -- The holder of a Program Interest.

PERSON -- Any natural Person, partnership, corporation,
association or other legal entity.

PIT BROKERAGE FEE -- Pit Brokerage Fee shall include floor
brokerage, clearing fees, National Futures Association fees, and exchange fees.

PROGRAM -- A limited partnership, joint venture, corporation,
trust or other entity formed and operated for the purpose of investing in
Commodity Contracts.

PROGRAM BROKER -- A Commodity Broker that effects trades in
Commodity Contracts for the account of a Program.

PROGRAM INTEREST -- A limited partnership interest or other
security representing ownership in a program.

PYRAMIDING -- A method of using all or a part of an unrealized
profit in a Commodity Contract position to provide margin for any additional
Commodity Contracts of the same or related commodities.

SPONSOR -- Any Person directly or indirectly instrumental in
organizing a Program or any Person who will manage or participate in the
management of a Program, including a Commodity Broker who pays any portion of
the Organizational Expenses of the Program, and the general partner(s) and any
other Person who regularly performs or selects the Persons who perform services
for the Program. Sponsor does not include wholly independent third parties such
as attorneys, accountants, and underwriters whose only compensation is for
professional services rendered in connection with the offering of the units.
The term "Sponsor" shall be deemed to include its Affiliates.

VALUATION DATE -- The date as of which the Net Assets of the
Program are determined.

VALUATION PERIOD -- A regular period of time between Valuation
Dates.

APPI-2

<PAGE>

EXHIBIT A

KENMAR GLOBAL TRUST

AMENDED AND RESTATED
DECLARATION OF TRUST AND TRUST AGREEMENT

DATED AS OF
DECEMBER 17, 1996

KENMAR ADVISORY CORP.
MANAGING OWNER

<PAGE>

KENMAR GLOBAL TRUST

AMENDED AND RESTATED
DECLARATION OF TRUST AND TRUST AGREEMENT
TABLE OF CONTENTS
PAGE
1. Declaration of Trust.................................................TA-1
2. The Trustee..........................................................TA-2
(a) Term; Resignation.......................................TA-2
(b) Powers..................................................TA-2
(c) Compensation and Expenses of the Trustee................TA-2
(d) Indemnification.........................................TA-2
(e) Successor Trustee.......................................TA-3
(f) Liability of the Trustee................................TA-3
(g) Reliance by the Trustee and the Managing Owner;
Advice of Counsel......................................TA-4
(h) Not Part of Trust Estate................................TA-4
3. Principal Office.....................................................TA-4
4. Business.............................................................TA-4
5. Term, Dissolution, Fiscal Year and Net Asset Value...................TA-5
(a) Term....................................................TA-5
(b) Dissolution.............................................TA-5
(c) Fiscal Year.............................................TA-5
(d) Net Asset Value; Net Asset Value per Unit...............TA-5
6. Net Worth of Managing Owner..........................................TA-5
7. Capital Contributions; Units.........................................TA-5
8. Allocation of Profits and Losses.....................................TA-6
(a) Capital Accounts and Allocations........................TA-6
(b) Allocation of Profit and Loss for Federal Income
Tax Purposes...........................................TA-6
(c) Incentive Fees; Profit Shares...........................TA-8
(d) Expenses................................................TA-8
(e) Limited Liability of Unitholders........................TA-9
(f) Return of Capital Contributions.........................TA-9
9. Management of the Trust..............................................TA-9
10. Audits and Reports to Unitholders....................................TA-11
11. Assignability of Units...............................................TA-11
12. Redemptions..........................................................TA-12
13. Offering of Units....................................................TA-13
14. Additional Offerings.................................................TA-13
15. Special Power of Attorney............................................TA-14
16. Withdrawal of a Unitholder...........................................TA-14
17. Standard of Liability; Indemnification...............................TA-14
(a) Standard of Liability for the Managing Owner............TA-14
(b) Indemnification of the Managing Owner by the Trust......TA-15
(c) Indemnification of the Trust by the Unitholders.........TA-16
18. Amendments; Meetings.................................................TA-16
(a) Amendments with Consent of the Managing Owner...........TA-16
(b) Amendments and Actions without Consent of the
Managing Owner.........................................TA-16
(c) Meetings; Other Voting Matters..........................TA-16
(d) Consent by Trustee.......................................TA-17
19. Governing Law........................................................TA-17
20. Miscellaneous........................................................TA-17
(a) Notices.................................................TA-17
(b) Binding Effect..........................................TA-17
(c) Captions................................................TA-17
21. Benefit Plan Investors...............................................TA-17
22. Certain Definitions..................................................TA-18
23. No Legal Title to Trust Estate.......................................TA-19
24. Legal Title..........................................................TA-19
25. Creditors............................................................TA-20

TA-i

<PAGE>

KENMAR GLOBAL TRUST

AMENDED AND RESTATED
DECLARATION OF TRUST AND TRUST AGREEMENT

This Amended and Restated Declaration of Trust and Trust Agreement
(the "Declaration of Trust Agreement") is made as of December 17, 1996, by and
among Kenmar Advisory Corp., a Connecticut corporation (the "Managing Owner"),
Wilmington Trust Company, a Delaware banking corporation, as trustee (the
"Trustee") and each other party who becomes a party to this Declaration of Trust
Agreement as an owner of a unit ("Unit") of beneficial interest of the Trust or
who becomes a party to this Declaration of Trust as a Unitholder by execution of
a Subscription Agreement and Power of Attorney Signature Page or otherwise and
who is shown in the books and records of the Trust as a Unitholder
(individually, a "Unitholder" and, collectively, the "Unitholders").

WITNESSETH:

WHEREAS, the Managing Owner, the Trustee and a private partnership of
which the Managing Owner is a general partner, as the initial beneficial owner,
formed a business trust pursuant to and in accordance with the Delaware Business
Trust Act, 12 DEL. C. Section 3801, ET SEQ., as amended from time to time (the
"Act"), by filing a Certificate of Trust with the office of the Secretary of
State of the State of Delaware on July 17, 1996, and entering into the
Declaration and Agreement of Trust, dated as of July 17, 1996 (the "Original
Declaration"); and

WHEREAS, the parties hereto desire to continue the Trust for the
business and purpose of issuing Units, the capital of which shall be used to
engage in trading, buying, selling or otherwise acquiring, holding or disposing
of futures contracts, forward contracts, foreign exchange commitments, swaps,
exchange for physicals, spot (cash) commodities, hybrid instruments and other
items, options on and any rights pertaining to the foregoing throughout the
world with the objective of capital appreciation through speculative trading by
allocating Trust Assets to independent professional trading advisors
("Advisors") selected from time to time by the Managing Owner and to amend and
restate the Original Declaration in its entirety.

NOW THEREFORE, the parties hereto agree as follows:

1. DECLARATION OF TRUST.

The Managing Owner hereby acknowledges that the Trust has received the
sum of $400 in a bank account opened in the name of the Trust from the Managing
Owner as grantor of the Trust and $1,600 from the initial beneficial owner (the
"Initial Unitholder"), and the Trustee hereby declares that it shall hold such
sums in trust upon and subject to the conditions set forth herein for the use
and benefit of the Unitholders. It is the intention of the parties hereto that
the Trust shall be a business trust under the Act, and that this Declaration of
Trust shall constitute the governing instrument of the Trust. The Trustee has
filed the Certificate of Trust required by Section 3810 of the Act.

Nothing in this Declaration of Trust shall be construed to make the
Unitholders partners or members of a joint stock association except to the
extent that such Unitholders, as constituted from time to time, are deemed to be
partners under the Internal Revenue Code of 1986, as amended (the "Code"), and
applicable state and local tax laws. Notwithstanding the foregoing, it is the
intention of the parties hereto that the Trust be treated as a partnership for
purposes of taxation under the Code and applicable state and local tax laws.
Effective as of the date hereof, the Trustee shall have all of the rights,
powers and duties set forth herein and in the Act with respect to accomplishing
the purposes of the Trust.

TA-1

<PAGE>

2. THE TRUSTEE.

(a) TERM; RESIGNATION.

(i) Wilmington Trust Company has been appointed and hereby
agrees to serve as the Trustee of the Trust. The Trust shall have
only one trustee unless otherwise determined by the Managing Owner.
The Trustee shall serve until such time as the Managing Owner removes
the Trustee or the Trustee resigns and a successor Trustee is
appointed by the Managing Owner in accordance with the terms of
Section 2(e) hereof.

(ii) The Trustee may resign at any time upon the giving of at
least sixty (60) days' advance written notice to the Trust; provided,
that such resignation shall not become effective unless and until a
successor Trustee shall have been appointed by the Managing Owner in
accordance with Section 2(e) hereof. If the Managing Owner does not
act within such sixty (60) day period, the Trustee may apply to the
Court of Chancery of the State of Delaware for the appointment of a
successor Trustee.

(b) POWERS. Except to the extent expressly set forth in this
Section 2, Section 3 and Section 24, the duty and authority of the Trustee to
manage the business and affairs of the Trust are hereby delegated to the
Managing Owner. The Trustee shall have only the rights, obligations or
liabilities specifically provided for herein and in the Act and shall have no
implied rights, obligations or liabilities with respect to the business or
affairs of the Trust. The Trustee shall have the power and authority to
execute, deliver, acknowledge and file all necessary documents, including any
amendments to or cancellation of the Certificate of Trust as required by the
Act. The Trustee shall provide prompt notice to the Managing Owner of its
performance of any of the foregoing. The Managing Owner shall keep the Trustee
informed of any actions taken by the Managing Owner with respect to the Trust
that affect the rights, obligations or liabilities of the Trustee hereunder or
under the Act.

(c) COMPENSATION AND EXPENSES OF THE TRUSTEE. The Trustee shall be
entitled to receive from the Trust or, if the assets of the Trust are
insufficient, from the Managing Owner reasonable compensation for its services
hereunder in accordance with the Trustee's standard fee schedule, and shall be
entitled to be reimbursed by the Trust or, if the assets of the Trust are
insufficient, by the Managing Owner for reasonable out-of-pocket expenses
incurred by the Trustee in the performance of its duties hereunder, including
without limitation, the reasonable compensation, out-of-pocket expenses and
disbursements of counsel and such other agents as the Trustee may employ in
connection with the exercise and performance of its rights and duties hereunder,
to the extent attributable to the Trust.

(d) INDEMNIFICATION. The Managing Owner agrees, whether or not any
of the transactions contemplated hereby shall be consummated, to assume
liability for, and does hereby indemnify, protect, save and keep harmless the
Trustee and its successors, assigns, legal representatives, officers, directors,
agents and servants (the "Indemnified Parties") from and against any and all
liabilities, obligations, losses, damages, penalties, taxes (excluding any taxes
payable by the Trustee on or measured by any compensation received by the
Trustee for its services hereunder or as indemnity payments pursuant to this
Section 2(d)), claims, actions, suits, costs, expenses or disbursements
(including legal fees and expenses) of any kind and nature whatsoever
(collectively, "Expenses"), which may be imposed on, incurred by or asserted
against the Indemnified Parties in any way relating to or arising out of the
formation, operation or termination of the Trust, the execution, delivery and
performance of any other agreements to which the Trust is a party or the action
or inaction of the Trustee hereunder or thereunder, except for Expenses
resulting from the gross negligence or willful misconduct of the Indemnified
Parties. The indemnities contained in this Section 2(d) shall survive the
termination of this Declaration of Trust or the removal or resignation of the
Trustee. In addition, the Indemnified Parties shall be entitled to
indemnification from any cash, net equity in any commodity futures, forward and
option contracts, all funds on deposit in the accounts of the Trust, any other
property held by the Trust, and all proceeds therefrom, including any rights of
the Trust pursuant to any agreements to which this Trust is a party (the "Trust
Estate") to the extent such expenses are attributable to the formation,
operation or termination of the Trust as set forth above, and to secure the same
the Trustee shall have a lien against the Trust Estate which shall be prior to
the rights of the Managing Owner and the Unitholders to receive distributions
from the Trust Estate. The Trustee nevertheless agrees that it will, at its own
cost and expense, promptly take all action as may be necessary to discharge any
liens on any part of the Trust Estate which result from claims against the
Trustee personally that are not related to the ownership or the administration
of the Trust Estate or the transactions contemplated by any documents to which
the Trust is a party.

TA-2

<PAGE>

(e) SUCCESSOR TRUSTEE. Upon the resignation or removal of the
Trustee, the Managing Owner shall appoint a successor Trustee by delivering a
written instrument to the outgoing Trustee. Any successor Trustee must satisfy
the requirements of Section 3807 of the Act. Any resignation or removal of the
Trustee and appointment of a successor Trustee shall not become effective until
a written acceptance of appointment is delivered by the successor Trustee to the
outgoing Trustee and the Managing Owner and any fees and expenses due to the
outgoing Trustee are paid. Following compliance with the preceding sentence,
the successor Trustee shall become fully vested with all of the rights, powers,
duties and obligations of the outgoing Trustee under this Declaration of Trust,
with like effect as if originally named as Trustee, and the outgoing Trustee
shall be discharged of its duties and obligations under this Declaration of
Trust.

(f) LIABILITY OF THE TRUSTEE. Except as otherwise provided in this
Section 2, in accepting the trust created hereby, Wilmington Trust Company acts
solely as Trustee hereunder and not in its individual capacity, and all persons
having any claim against the Trustee by reason of the transactions contemplated
by this Declaration of Trust and any other agreement to which the Trust is a
party shall look only to the Trust Estate for payment or satisfaction thereof.
The Trustee shall not be liable or accountable hereunder or under any other
agreement to which the Trust is a party, except for the Trustee's own gross
negligence or willful misconduct. In particular, but not by way of limitation:

(i) the Trustee shall have no liability or responsibility for
the validity or sufficiency of this Declaration of Trust or for the
form, character, genuineness, sufficiency, value or validity of the
Trust Estate;

(ii) the Trustee shall not be liable for any actions taken or
omitted to be taken by it in accordance with the instructions of the
Managing Owner or any Unitholder;

(iii) the Trustee shall not have any liability for the acts or
omissions of the Managing Owner;

(iv) the Trustee shall not be liable for its failure to
supervise the performance of any obligations of the Managing Owner,
any commodity broker, any Selling Agents or any additional Selling
Agents;

(v) no provision of this Declaration of Trust shall require
the Trustee to expend or risk funds or otherwise incur any financial
liability in the performance of any of its rights or powers hereunder
if the Trustee shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured or provided to it;

(vi) under no circumstances shall the Trustee be liable for
indebtedness evidenced by or other obligations of the Trust arising
under this Declaration of Trust or any other agreements to which the
Trust is a party;

(vii) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Declaration of Trust, or
to institute, conduct or defend any litigation under this Declaration
of Trust or any other agreements to which the Trust is a party, at the
request, order or direction of the Managing Owner or any Unitholders
unless the Managing Owner or such Unitholders have offered to the
Trustee security or indemnity satisfactory to it against the costs,
expenses and liabilities that may be incurred by the Trustee
(including, without limitation, the reasonable fees and expenses of
its counsel) therein or thereby; and

(viii) notwithstanding anything contained herein to the contrary,
the Trustee shall not be required to take any action in any
jurisdiction other than in the State of Delaware if the taking of such
action will (a) require the consent or approval or authorization or
order of or the giving of notice to, or the registration with or
taking of any action in respect of, any state or other governmental
authority or agency of any jurisdiction other than the State of
Delaware, (b) result in any fee, tax or other governmental charge
under the laws of any jurisdiction or any political subdivision
thereof in existence as of the date hereof other than the State of
Delaware becoming payable by the Trustee or (c) subject the Trustee to
personal jurisdiction other than in the State of Delaware for causes
of action arising from personal acts unrelated to the consummation by
the Trustee of the transactions contemplated hereby.

TA-3

<PAGE>

(g) RELIANCE BY THE TRUSTEE AND THE MANAGING OWNER; ADVICE OF
COUNSEL.

(i) In the absence of bad faith, the Trustee and the Managing
Owner may conclusively rely upon certificates or opinions furnished to
the Trustee or the Managing Owner and conforming to the requirements
of this Declaration of Trust in determining the truth of the
statements and the correctness of the opinions contained therein, and
shall incur no liability to anyone in acting on any signature,
instrument, notice, resolution, request, consent, order, certificate,
report, opinion, bond or other document or paper which is believed to
be genuine and believed to be signed by the proper party or parties,
and need not investigate any fact or matter pertaining to or in any
such document; provided, however, that the Trustee or the Managing
Owner shall have examined any certificates or opinions so as to
determine compliance of the same with the requirements of this
Declaration of Trust. The Trustee or the Managing Owner may accept a
certified copy of a resolution of the board of directors or other
governing body of any corporate party as conclusive evidence that such
resolution has been duly adopted by such body and that the same is in
full force and effect. As to any fact or matter the method of the
determination of which is not specifically prescribed herein, the
Trustee or the Managing Owner may for all purposes hereof rely on a
certificate, signed by the president or any vice president or by the
treasurer or other authorized officers of the relevant party, as to
such fact or matter, and such certificate shall constitute full
protection to the Trustee or the Managing Owner for any action taken
or omitted to be taken by either of them in good faith in reliance
thereon.

(ii) In the exercise or administration of the trust hereunder
and in the performance of its duties and obligations under this
Declaration of Trust, the Trustee, at the expense of the Trust, (i)
may act directly or through its agents, attorneys, custodians or
nominees pursuant to agreements entered into with any of them, and the
Trustee shall not be liable for the conduct or misconduct of such
agents, attorneys, custodians or nominees if such agents, attorneys,
custodians or nominees shall have been selected by the Trustee with
reasonable care and (ii) may consult with counsel, accountants and
other skilled professionals to be selected with reasonable care by the
Trustee; provided that the Trustee shall not allocate any of its
internal expenses or overhead to the account of the Trust. The
Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the opinion or advice of any such
counsel, accountant or other such persons.

(h) NOT PART OF TRUST ESTATE. Amounts paid to the Trustee from the
Trust Estate, if any, pursuant to this Section 2 shall be deemed not to be part
of the Trust Estate immediately after such payment.

3. PRINCIPAL OFFICE.

The address of the principal office of the Trust shall be c/o the
Managing Owner, Two American Lane, Greenwich, Connecticut 06831-8150; telephone:
(203) 861-1000. The Trustee is located at Rodney Square North, 1100 North
Market Street, Wilmington, Delaware 19890, Attention: Corporate Trust
Administration. The Trustee shall receive service of process on the Trust in
the State of Delaware at the foregoing address. In the event Wilmington Trust
Company resigns or is removed as the Trustee, the Trustee of the Trust in the
State of Delaware shall be the successor Trustee.

4. BUSINESS.

The Trust's business and purpose is to trade, buy sell, swap or
otherwise acquire, hold or dispose of futures and forward contracts for
commodities, financial instruments, stock indices, metals, energy contracts and
currencies, any rights pertaining thereto and any options thereon or on physical
commodities, as well as securities and any rights pertaining thereto and any
options thereon, and to engage in all activities necessary, convenient or
incidental thereto. The Trust may also engage in "hedge," arbitrage and cash
trading of any of the foregoing instruments. The Trust may engage in such
business and purpose either directly or through joint ventures, entities or
partnerships, provided that the Trust's participation in any of the foregoing
has no adverse economic or liability consequences for the Unitholders, which
consequences would not be present had the Trust engaged in that same business or
purpose directly.

TA-4

<PAGE>

5. TERM, DISSOLUTION, FISCAL YEAR

(a) TERM. The term of the Trust commenced on the day on which the
Certificate of Trust was filed with the Secretary of State of the State of
Delaware pursuant to the provisions of the Act and shall end upon the first to
occur of the following: (1) December 31, 2026; (2) receipt by the Managing
Owner of an approval to dissolve the Trust at a specified time by Unitholders
owning Units representing more than fifty percent (50%) of the outstanding Units
then owned by Unitholders, notice of which is sent by certified mail return
receipt requested to the Managing Owner not less than 90 days prior to the
effective date of such dissolution; (3) death, insanity, bankruptcy, retirement,
resignation, expulsion, withdrawal, insolvency or dissolution of the Managing
Owner or any other event that causes the Managing Owner to cease to be a
managing owner unless (i) at the time of such event there is at least one
remaining managing owner of the Trust who carries on the business of the Trust
(and each remaining managing owner of the Trust is hereby authorized to carry on
the business of the Trust in such an event), or (ii) within one hundred twenty
days after such event Unitholders holding a majority of Units agree in writing
to continue the business of the Trust and to the appointment, effective as of
the date of such event, of one or more managing owners of the Trust; (4) a
decline in the aggregate Net Assets of the Trust to less than $250,000;
(5) dissolution of the Trust pursuant hereto; or (6) any other event which shall
make it unlawful for the existence of the Trust to be continued or require
termination of the Trust. In the event that the Managing Owner (or an affiliate
thereof) ceases to be the trust's managing owner, the word "Kenmar" shall be
deleted from the name of the Trust, and any appropriate filings shall be made.

(b) DISSOLUTION. Upon the occurrence of an event causing the
dissolution of the Trust, the Trust shall be dissolved and its affairs wound up.
At any time that the Trust does not have a Managing Owner, the Unitholders by
majority vote may appoint a liquidator.

(c) FISCAL YEAR. The fiscal year of the Trust shall begin on
January 1 of each year and end on the following December 31.

(d) NET ASSET VALUE; NET ASSET VALUE PER UNIT. Net Assets of the
Trust are its assets less its liabilities determined in accordance with
generally accepted accounting principles. If a contract cannot be liquidated on
the day with respect to which Net Assets are being determined, the settlement
price on the first subsequent day on which the contract can be liquidated shall
be the basis for determining the liquidating value of such contract for such
day, or such other value as the Managing Owner may deem fair and reasonable.
The liquidating value of a commodity futures or option contract not traded on a
commodity exchange shall mean its liquidating value as determined by the
Managing Owner on a basis consistently applied for each different variety of
contract. Accrued Profit Shares and Incentive Fees (as described in the
Prospectus, as defined in Section 9 hereof) shall reduce Net Asset Value, even
though such Profit Shares and Incentive Fees may never, in fact, be paid. Net
Asset Value per Unit is the Net Assets of the Trust divided by the number of
Units outstanding as of the date of determination.

6. NET WORTH OF MANAGING OWNER.

The Managing Owner agrees that at all times so long as it remains
managing owner of the Trust, it will maintain its Net Worth at an amount not
less than $1,000,000.

The requirements of the preceding paragraph may be modified if the
Managing Owner obtains an opinion of counsel for the Trust that a proposed
modification will not adversely affect the classification of the Trust as a
partnership for federal income tax purposes and if such modification will
reflect or exceed applicable state securities and Blue Sky laws and qualify
under any guidelines or statements of policy promulgated by any body or agency
constituted by the various state securities administrators having jurisdiction
in the premises.

7. CAPITAL CONTRIBUTIONS; UNITS.

The Unitholders' respective capital contributions to the Trust shall
be as shown on the books and records of the Trust. The Initial Unitholder will
withdraw upon the admission of additional Unitholders.

TA-5

<PAGE>

The Managing Owner, so long as it is generally liable for the
obligations of the Trust, or any substitute managing owner, shall invest in the
Trust, as a general liability interest, sufficient capital so that the Managing
Owner will have at all times a capital account equal to 1% of the total capital
accounts of the Trust (including the Managing Owner's). The Managing Owner may
withdraw any interest it may have in excess of such requirement, and may redeem
as of any month-end any interest which it may acquire on the same terms as any
Unitholder, provided that it must maintain the minimum interest described in the
preceding sentence.

The Managing Owner may, without the consent of any Unitholders of the
Trust, admit to the Trust purchasers of Units as Unitholders of the Trust.

Any Units acquired by the Managing Owner or any of its affiliates will
be non-voting, and will not be considered outstanding for purposes of
determining whether the majority approval of the outstanding Units has been
obtained. Such Unitholder shall be deemed a beneficial owner within the meaning
of the Act.

8. ALLOCATION OF PROFITS AND LOSSES.

(a) CAPITAL ACCOUNTS AND ALLOCATIONS. A capital account shall be
established for each Unit, and for the Managing Owner on a Unit-equivalent
basis. The balance of each Unit's capital account shall be the amount
contributed to the Trust with respect to such Unit, which amount shall be equal
to the Net Asset Value per Unit on the date each Unit is purchased after all
accrued fees and expenses, including Incentive Fee and Profit Share accruals
which may, in fact, never be paid. As of the close of business (as determined
by the Managing Owner) on the last day of each month, any increase or decrease
in the Trust's Net Assets as compared to the last such determination of Net
Assets shall be credited or charged equally to the capital accounts of all Units
then outstanding; provided that for purposes of maintaining such capital
accounts, amounts paid or payable to the Managing Owner for items such as
brokerage commissions and Incentive Fees shall be treated as if paid or payable
to a third party and shall not be credited to the capital account of the
interest held by the Managing Owner.

For purposes of this Section 8, unless specified to the contrary,
Units redeemed as of the end of any month shall be considered outstanding as of
the end of such month.

(b) ALLOCATION OF PROFIT AND LOSS FOR FEDERAL INCOME TAX
PURPOSES. As of the end of each fiscal year, the Trust's income and expense and
capital gain or loss shall be allocated among the Unitholders pursuant to the
following provisions of this Section 8(b) for federal income tax purposes. For
purposes of this Section 8(b), capital gain and capital loss shall be allocated
separately and not netted.

(1) First, items of ordinary income and expense (other than the
Incentive Fee and Profit Shares which shall be allocated as set forth in
Section 8(b)(2)) shall be allocated PRO RATA among the Units outstanding as of
the end of each month in which the items of ordinary income and expense accrue.

(2) Second, any Incentive Fee or Profit Shares paid to the Managing
Owner or the Advisors shall be allocated among the Units outstanding at any time
during the fiscal year based upon the ratio that each such Unit's Net Incentive
Fee or Net Profit Share (the excess, if any, of the aggregate of all Incentive
Fees or Profit Shares, as the case may be, allocated to the capital account
relating to such Unit over the aggregate of all "reversals" of Incentive Fees or
Profit Shares, as the case may be, allocated to such Unit) bears to the Net
Incentive Fee or Net Profit Share, as the case may be, of all Units; provided
that the Managing Owner may allocate Incentive Fees and Profit Shares first to
Units whose Net Asset Value was reduced by accrued Incentive Fees and Profit
Shares upon redemption, in an amount up to the amount of such reduction.

TA-6

<PAGE>

(3) Third, capital gain or loss shall be allocated as follows:

(A) There shall be established a tax account with respect to each
outstanding Unit. The balance of each tax account shall be the amount paid
to the Trust for each Unit. As of the end of each fiscal year:

(i) Each tax account shall be increased by the amount of income
or gain allocated to each Unit pursuant to Sections 8(b)(1) and
8(b)(3)(C).

(ii) Each tax account shall be decreased by the amount of
expense or loss allocated to each Unit pursuant to Sections 8(b)(1),
8(b)(2) and 8(b)(3)(E) and by the amount of any distributions paid out
with respect to the Units other than upon redemption.

(iii) When a Unit is redeemed, the tax account attributable to
such Unit (determined after making all allocations described in this
Section 8(b)) shall be eliminated.

(B) Each Unitholder who redeems a Unit during a fiscal year
(including Units redeemed as of the end of the last day of such fiscal
year) shall be allocated Capital Gain, if any, up to the amount of the
excess, if any, of the amount received in respect of the Units so redeemed
(before taking into account any early redemption charges) over the sum of
the tax accounts (determined after making the allocation described in
Sections 8(b)(1) and 8(b)(2), but prior to making the allocations described
in this Section 8(b)(3)(B) or Section 8(b)(3)(D)) allocable to such Units
(an "Excess"). In the event the aggregate amount of Capital Gain available
to be allocated pursuant to this Section 8(b)(3)(B) is less than the
aggregate amount of Capital Gain required to be so allocated, the aggregate
amount of available Capital Gain shall be allocated among all such
Unitholders in the ratio which each such Unitholder's Excess bears to the
aggregate Excess of all such Unitholders.

(C) Capital Gain remaining after the allocation described in Section
8(b)(3)(B) shall be allocated among all Unitholders who hold Units
outstanding as of the end of the applicable fiscal year (other than Units
redeemed as of the end of the last day of such fiscal year) whose capital
accounts with respect to such Units are in excess of their tax accounts
(determined after making the allocations described in Sections 8(b)(1) and
8(b)(2)) allocable to such Units in the ratio that each such Unitholder's
excess bears to the aggregate excess of all such Unitholders. Capital Gain
remaining after the allocation described in the preceding sentence shall be
allocated among all Unitholders described in said sentence in proportion to
their holdings of such Units.

(D) Each Unitholder who redeems a Unit during a fiscal year
(including Units redeemed as of the end of the last day of such fiscal
year) shall be allocated Capital Loss, if any, up to the amount of the sum
of the excess of the tax accounts (determined after making the allocations
described in Sections 8(b)(1) and 8(b)(2), but prior to making the
allocations described in this Section 8(b)(3)(D) or Section 8(b)(3)(B))
allocable to the Units so redeemed over the amount received in respect of
such Units (before taking into account any early redemption charges) (a
"Negative Excess"). In the event the aggregate amount of available Capital
Loss required to be allocated pursuant to this Section 8(b)(3)(D) is less
than the aggregate amount required to be so allocated, the aggregate amount
of available Capital Loss shall be allocated among all such Unitholders in
the ratio that each such Unitholder's Negative Excess bears to the
aggregate Negative Excess of all such Unitholders.

(E) Capital Loss remaining after the allocation described in Section
8(b)(3)(D) shall be allocated among all Unitholders who hold Units
outstanding as of the end of the applicable fiscal year (other than Units
redeemed as of the end of the last day of such fiscal year) whose tax
accounts with respect to such Units are in excess of their capital accounts
(determined after making the allocations described in Sections 8(b)(1) and
8(b)(2)) with respect to such Units in the ratio that each such
Unitholder's negative excess bears to the aggregate negative excess of all
such Unitholders. Capital Loss remaining after the allocation described in
the preceding sentence shall be allocated among all Unitholders described
in such sentence in proportion to their holdings of such Units.

(F) For purposes of this Section 8(b), "Capital Gain" or "Capital
Loss" shall mean gain or loss characterized as gain or loss from the sale
or exchange of a capital asset, by the Code, including, but not limited to,
gain or loss required to be taken into account pursuant to Section 1256
thereof.

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(4) The allocation of profit and loss for federal income tax purposes
set forth herein is intended to allocate taxable profit and loss among
Unitholders generally in the ratio and to the extent that profit and loss are
allocated to such Unitholders so as to eliminate, to the extent possible, any
disparity between the Unitholder's capital account and his tax account,
consistent with principles set forth in Section 704 of the Code, including
without limitation a "Qualified Income Offset."

(5) The allocations of profit and loss to the Unitholders in respect
of the Units shall not exceed the allocations permitted under Subchapter K of
the Code, as determined by the Managing Owner, whose determination shall be
binding.

(c) INCENTIVE FEES; PROFIT SHARES. Incentive Fees shall be payable
to the Managing Owner as of the end of each calendar year and upon redemption of
Units.

Incentive Fees shall equal 5% of New Overall Appreciation (if any)
calculated as of each fiscal year-end and upon redemption of Units. New Overall
Appreciation shall be calculated, not on a per-Unit basis, but on the basis of
the overall trading profits and losses of the Trust, net of all fees and
expenses (including Profit Shares) paid or accrued other than the Incentive Fee
itself and after subtraction of all interest income received by the Trust.

Incentive Fees shall be paid by the Trust as a whole, irrespective of
whether the Net Asset Value has declined below the purchase price of such Unit.
Accrued Incentive Fees shall reduce the redemption price of Units and shall be
paid to the Managing Owner upon redemption. The amount (if any) of the accrued
Incentive Fee that shall be paid to the Managing Owner upon the redemption of
any Unit shall be determined by dividing the total Incentive Fee as of such
redemption date by the number of Units then outstanding (including Units
redeemed as of such date); the remainder of the accrued Incentive Fee shall be
paid to the Managing Owner on December 31 of each year.

For capital account purposes, accrued Incentive Fees shall, in all
cases, be reflected equally as a reduction in the Net Asset Value per Unit of
all Units outstanding at the time the Incentive Fee accrued, and reversals of
accrued Incentive Fees shall equally increase the Net Asset Value per Unit of
all Units outstanding at the time of the accrual of such reversal, irrespective
of whether a particular Unit was outstanding when a particular Incentive Fee was
accrued.

Early redemption charges shall in no respect reduce New Overall
Appreciation.

The Profit Shares paid to the Advisors pursuant to the Advisory
Agreements among the Managing Owner, the Trust and each such Advisor shall
result in deductions being allocated to the Unitholders. Such allocation shall
apply the same principles as the allocation of Incentive Fee deductions
described above. Profit Shares with respect to any calendar quarter will be
paid to an Advisor as of the last day of such period, except that Profit Shares
with respect to Units redeemed as of the last day of any month that does not end
a calendar quarter shall be paid as of the day such Units are redeemed and
Profit Shares with respect to Units redeemed as of the end of any month that
ends a calendar quarter shall be paid to an Advisor in the same manner and at
the same time as if such Units had not been redeemed.

In the event assets are withdrawn from an Advisor's account or the
Trust as a whole (other than to pay expenses), any loss carryforward shall be
proportionally reduced for purposes of calculating subsequent Profit Shares and
Incentive Fees. Loss carryforward reductions shall not be restored as a result
of subsequent additions of capital.

The Managing Owner may adjust the allocations set forth in this
Section 8(c), in the Managing Owner's discretion, if the Managing Owner believes
that doing so will achieve more equitable allocations or allocations more
consistent with the Code.

(d) EXPENSES. The Managing Owner shall pay, without reimbursement,
the selling and "trailing commissions" relating to the offering of the Units.
The Trust shall pay the Managing Owner brokerage commissions at the rate of 11%
per annum of the average beginning of month Net Assets of the Trust. The Trust
shall bear all administrative costs, ongoing offering costs and any taxes
applicable to it and any charges incidental to trading, including agency
brokerage commissions (E.G., "bid-ask" spreads). In no event shall
organizational and offering expenses, including selling commissions and
redemption fees, exceed 15% of the capital contributions to the Trust. Any
unreimbursed organizational and initial offering expenses as of the date of the
Trust's dissolution shall not be reimbursed to the Managing Owner from the
proceeds

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resulting from such dissolution. However, none of the Managing Owner's
"overhead" expenses incurred in connection with the administration of the Trust
(including, but not limited to, salaries, rent and travel expenses) shall be
charged to the Trust. Any goods and services provided to the Trust by the
Managing Owner shall be provided at rates and terms at least as favorable as
those which may be obtained from third parties in arm's-length negotiations.
All of the expenses which are for the Trust's account shall be billed directly
to the Trust. Appropriate reserves may be created, accrued and charged against
Net Assets for contingent liabilities, if any, as of the date any such
contingent liability becomes known to the Managing Owner. Such reserves shall
reduce Net Asset Value for all purposes.

(e) LIMITED LIABILITY OF UNITHOLDERS. Each Unit, when purchased in
accordance with this Declaration of Trust and Trust Agreement, shall, except as
otherwise provided by law, be fully paid and nonassessable. Any provisions of
this Declaration of Trust and Trust Agreement to the contrary notwithstanding,
except as otherwise provided by law, no Unitholder shall be liable for Trust
obligations in excess of the capital contributed by such Unitholder, plus his
share of undistributed profits and assets.

(f) RETURN OF CAPITAL CONTRIBUTIONS. No Unitholder or subsequent
assignee shall have any right to demand the return of his capital contribution
or any profits added thereto, except through redeeming Units or upon dissolution
of the Trust, in each case as provided herein and in accordance with the Act.
In no event shall a Unitholder or subsequent assignee be entitled to demand or
receive property other than cash.

9. MANAGEMENT OF THE TRUST.

The Managing Owner, to the exclusion of all Unitholders, shall
control, conduct and manage the business of the Trust. The Managing Owner shall
have sole discretion in determining what distributions of profits and income, if
any, shall be made to the Unitholders (subject to the allocation provisions
hereof), shall execute various documents on behalf of the Trust and the
Unitholders pursuant to powers of attorney and supervise the liquidation of the
Trust if an event causing dissolution of the Trust occurs.

The Managing Owner may in furtherance of the business of the Trust
cause the Trust to retain Advisors to buy, sell, hold, or otherwise acquire or
dispose of commodities, futures contracts and options traded on exchanges or
otherwise, arbitrage positions, repurchase agreements, interest-bearing
securities, deposit accounts and similar instruments, provided that the Trust
shall not invest in any debt instruments other than Treasury securities,
short-term sovereign debt instruments and other investments authorized by the
Commodity Futures Trading Commission (the "CFTC") for the investment of
"customer funds," and shall not invest in any equity security without prior
notice to Unitholders, all as described in the prospectus relating to the
offering of the Units in effect as of the time that such Unitholder last
purchased Units while in receipt of a current prospectus (the "Prospectus").
The Managing Owner may engage, and compensate on behalf of the Trust from funds
of the Trust, or agree to share profits and losses with, such persons, firms or
corporations, including (except as described in this Declaration of Trust and
Trust Agreement) the Managing Owner and any affiliated person or entity, as the
Managing Owner in its sole judgment shall deem advisable for the conduct and
operation of the business of the Trust, provided, that no such arrangement shall
allow brokerage commissions paid by the Trust in excess of the amount described
in the Prospectus or as permitted under applicable North American Securities
Administrators Association, Inc. Guidelines for the Registration of Commodity
Pool Programs ("NASAA Guidelines") in effect as of the date of the Prospectus
(I.E., 80% of the published retail rate plus pit brokerage fees, or 14% annually
- -- including pit brokerage and service fees -- of the Trust's average Net
Assets, excluding the assets not directly related to trading activity),
whichever is higher. The Managing Owner shall reimburse the Trust, on an annual
basis, to the extent that the Trust's brokerage commissions paid to the Managing
Owner and the Annual Incentive Fee, as described in the Prospectus, have
exceeded 14% of the Trust's average Net Assets during the preceding year. The
Managing Owner is hereby specifically authorized to enter into, on behalf of the
Trust, the Advisory Agreements and the Selling Agreement as described in the
Prospectus. The Managing Owner shall not enter into an Advisory Agreement with
any trading advisor that does not satisfy the relevant experience (I.E.,
ordinarily a minimum of three years) requirements under the NASAA Guidelines.
The Trust's brokerage commissions may not be increased (i) during any period
when redemption charges are in effect or (ii) without prior written notice to
Unitholders within sufficient time for the exercise of their redemption rights
prior to such increase becoming effective. Such notification shall contain a
description of Unitholder's voting and redemption rights and a description of
any material effect of such increase.

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In addition to any specific contract or agreements described herein,
the Trust may enter into any other contracts or agreements specifically
described in or contemplated by the Prospectus without any further act, approval
or vote of the Unitholders, notwithstanding any other provisions of this
Declaration of Trust and Trust Agreement, the Act or any applicable law, rule or
regulations.

The Managing Owner shall be under a fiduciary duty to conduct the
affairs of the Trust in the best interests of the Trust. The Unitholders will
under no circumstances be deemed to have contracted away the fiduciary
obligations owed them by the Managing Owner under the common law. The Managing
Owner's fiduciary duty includes, among other things, the safekeeping of all
Trust funds and assets and the use thereof for the benefit of the Trust. The
Managing Owner shall at all times act with integrity and good faith and exercise
due diligence in all activities relating to the conduct of the business of the
Trust and in resolving conflicts of interest. The Trust's brokerage
arrangements shall be non-exclusive, and the brokerage commissions paid by the
Trust shall be competitive. The Trust shall seek the best price and services
available for its commodity transactions.

The Managing Owner is hereby authorized to perform all other duties
imposed by Sections 6221 through 6232 of the Code on the Managing Owner as the
"tax matters partner" of the Trust.

The Trust shall make no loans to any party, and the funds of the Trust
will not be commingled with the funds of any other person or entity (deposit of
funds with a commodity broker, clearinghouse or forward dealer or entering into
joint ventures or partnerships shall not be deemed to constitute "commingling"
for these purposes). The Managing Owner shall make no loans to the Trust unless
approved by the Unitholders in accordance with Section 18(a) of this Declaration
of Trust and Trust Agreement. If the Managing Owner makes a loan to the Trust,
the Managing Owner shall not receive interest in excess of its interest costs,
nor may the Managing Owner receive interest in excess of the amounts which would
be charged the Trust (without reference to the Managing Owner's financial
resources or guarantees) by unrelated banks on comparable loans for the same
purpose. The Managing Owner shall not receive "points" or other financing
charges or fees regardless of the amount. Except in respect of the Incentive
Fee, no person or entity may receive, directly or indirectly, any advisory,
management or incentive fees, or any profit-sharing allocation from joint
ventures, partnerships or similar arrangements in which the Trust participates,
for investment advice or management who shares or participates in any commodity
brokerage commissions; no broker may pay, directly or indirectly, rebates or
give-ups to any trading advisor or manager or to the Managing Owner or any of
their respective affiliates in respect of sales of the Units; and such
prohibitions may not be circumvented by any reciprocal business arrangements.
The foregoing prohibition shall not prevent the Trust from executing, at the
direction of any Advisor, transactions with any futures commission merchant or
broker. No trading advisor for the Trust shall be affiliated with the Trust's
commodity broker, the Managing Owner or their affiliates. The maximum period
covered by any contract entered into by the Trust, except for the various
provisions of the Selling Agreement which survive each closing of the sales of
the Units, shall not exceed one year. Any material change in the Trust's basic
investment policies or structure shall require the approval of Unitholders
owning Units representing more than fifty percent (50%) of all Units then owned
by the Unitholders. Any agreements between the Trust and the Managing Owner or
any affiliate of the Managing Owner (as well as any agreements between the
Managing Owner or any affiliate of the Managing Owner and any trading advisor)
shall be terminable without penalty by the Trust upon no more than 60 days'
written notice. All sales of Units in the United States will be conducted by
registered brokers.

The Trust is prohibited from employing the trading technique commonly
known as "pyramiding." A trading manager or advisor of the Trust taking into
account the Trust's open trade equity on existing positions in determining
generally whether to acquire additional commodity positions on behalf of the
Trust will not be considered to be engaging in "pyramiding."

The Managing Owner may take such other actions on behalf of the Trust
as the Managing Owner deems necessary or desirable to manage the business of the
Trust.

The Managing Owner shall reimburse the Trust for any advisory fees
paid by the Trust to any trading advisor over the course of any fiscal year, to
the extent that the fees paid during such year exceed the 6% annual management
fees and the 15% quarterly incentive fees (calculating New Trading Profit, as
defined in the Prospectus, after all expenses and without including interest
income) contemplated by the NASAA Guidelines (as the NASAA Guidelines permit
such limits to be adjusted). Any such reimbursement shall be made on a present
value basis, fully compensating the Trust for

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having made payments at any time during the year which would not otherwise have
been due from it. The Managing Owner shall disclose any such reimbursement in
the Annual Report delivered to Unitholders.

The Managing Owner is engaged, and may in the future engage, in other
business activities and shall not be required to refrain from any other activity
nor forego any profits from any such activity, whether or not in competition
with the Trust. Unitholders may similarly engage in any such other business
activities. The Managing Owner shall devote to the Trust such time as the
Managing Owner may deem advisable to conduct the Trust's business and affairs.

10. AUDITS AND REPORTS TO UNITHOLDERS.

The Trust books shall be audited annually by an independent certified
public accountant. The Trust will use its best efforts to cause each Unitholder
to receive (i) within 90 days after the close of each fiscal year certified
financial statements of the Trust for the fiscal year then ended, (ii) within 90
days of the end of each fiscal year (but in no event later than March 15 of each
year) such tax information as is necessary for a Unitholder to complete his
federal income tax return and (iii) such other annual and monthly information as
the CFTC may by regulation require. The Managing Owner shall include in the
Annual Reports sent to Unitholders an approximate estimate (calculated as
accurately as may be reasonably practicable) of the round-turn equivalent
brokerage commission rate paid by the Trust during the preceding year. The
Trust shall notify Unitholders within seven business days of any material change
(i) in the agreements with the Trust's advisors, including any modification in
the method of calculating the advisory fee and (ii) in the compensation of any
party relating to the Trust. Unitholders or their duly authorized
representatives may inspect the Trust books and records during normal business
hours upon reasonable written notice to the Managing Owner and obtain copies of
such records (including by post upon payment of reasonable mailing costs); upon
payment of reasonable reproduction costs provided, however, upon request by the
Managing Owner, the Unitholder shall represent that the inspection and/or copies
of such records will not be for commercial purposes unrelated to such
Unitholder's interest as a beneficial owner of the Trust. The Managing Owner
shall have the right to keep confidential from the Unitholders, for such period
of time as the Managing Owner deems reasonable, any information that the
Managing Owner reasonably believes that the Trust is required by law or by
agreement with a third party to keep confidential.

The Managing Owner shall calculate the approximate Net Asset Value per
Unit on a daily basis and furnish such information upon request to any
Unitholder.

The Managing Owner shall maintain and preserve all Trust records for a
period of not less than six (6) years.

The Managing Owner will, with the assistance of the Trust's commodity
broker, make an annual review of the commodity brokerage arrangements applicable
to the Trust. In connection with such review, the Managing Owner will
ascertain, to the extent practicable, the commodity brokerage rates charged to
other major commodity pools whose trading and operations are, in the opinion of
the Managing Owner, comparable to those of the Trust in order to assess whether
the rates charged the Trust are competitive in light of the services it
receives. If, as a result of such review, the Managing Owner determines that
such rates are not competitive in light of the services provided to the Trust,
the Managing Owner will notify the Unitholders, setting forth the rates charged
to the Trust and several funds which are, in the Managing Owner's opinion,
comparable to the Trust.

11. ASSIGNABILITY OF UNITS.

Each Unitholder expressly agrees that he will not voluntarily assign,
transfer or dispose of, by gift or otherwise, any of his Units or any part or
all of his right, title and interest in the capital or profits of the Trust in
violation of any applicable federal or state securities laws or without giving
written notice to the Managing Owner. No assignment, transfer or disposition by
an assignee of Units or of any part of his right, title and interest in the
capital or profits of the Trust shall be effective against the Trust or the
Managing Owner until the Managing Owner receives the written notice of the
assignment; the Managing Owner shall not be required to give any assignee any
rights hereunder prior to receipt of such notice. The Managing Owner may, in
its sole discretion, waive any such notice. No such assignee, except with the
consent of the Managing Owner, which consent may be withheld in the absolute
discretion of the Managing Owner, may become a substituted Unitholder, nor will
the estate or any beneficiary of a deceased Unitholder or assignee have any
right to redeem Units from the Trust except by redemption as provided in
Section 12 hereof. Each Unitholder agrees that with the consent

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of the Managing Owner any assignee may become a substituted Unitholder without
need of the further act or approval of any Unitholder. If the Managing Owner
withholds consent, an assignee shall not become a substituted Unitholder, and
shall not have any of the rights of a Unitholder, except that the assignee shall
be entitled to receive that share of capital and profits and shall have that
right of redemption to which his assignor would otherwise have been entitled.
No assignment, transfer or disposition of Units shall be effective against the
Trust or the Managing Owner until the first day of the month succeeding the
month in which the Managing Owner receives notice of such assignment, transfer
or disposition. No Units may be transferred where, after the transfer, either
the transferee or the transferor would hold less than the minimum number of
Units equivalent to an initial minimum purchase, except for transfers by gift,
inheritance, intrafamily transfers, family dissolutions, and transfers to
Affiliates.

12. REDEMPTIONS.

A Unitholder or any assignee of Units of whom the Managing Owner has
received written notice as described above may redeem all or any of his Units
(such redemption being herein referred to as a "redemption") effective as of the
close of business (as determined by the Managing Owner) on the last day of any
month, beginning with the end of the sixth month after such Units are sold;
provided that: (i) all liabilities, contingent or otherwise, of the Trust
(including the Trust's allocable share of the liabilities, contingent or
otherwise, of any entities in which the Trust invests), except any liability to
Unitholders on account of their capital contributions, have been paid or there
remains property of the Trust sufficient to pay them; and (ii) the Managing
Owner shall have timely received a request for redemption, as provided in the
second following paragraph.

Units redeemed on or before the end of the twelfth full calendar month
and after the end of the twelfth full month but on or before the end of the
eighteenth full calendar month after the date as of which such Units begin to
participate in the profits and losses of the Trust are subject to early
redemption charges of 3% and 2%, respectively, of the Net Asset Value at which
they are redeemed. Such charges will be paid to the Managing Owner. In the
event that a Unitholder acquires Units at more than one month-end, such Units
will be treated on a "first-in, first-out" basis for purposes of determining
whether such Units are redeemable and whether early redemption charges apply.

Requests for redemption must be received by the Managing Owner at
least ten calendar days, or such lesser period as shall be acceptable to the
Managing Owner, in advance of the requested effective date of redemption. The
Managing Owner may declare additional redemption dates upon notice to the
Unitholders as well as to those assignees of whom the Managing Owner has
received notice as described above.

If at the close of business (as determined by the Managing Owner) on
any day, the Net Asset Value per Unit has decreased to less than 50% of the Net
Asset Value per Unit as of the most recent Valuation Date, after adding back all
distributions, the Trust shall notify investors within seven business days and
shall liquidate all open positions as expeditiously as possible and suspend
trading. Within ten business days after the date of suspension of trading, the
Managing Owner (and any other managing owners of the Trust) shall declare a
Special Redemption Date. Such Special Redemption Date shall be a business day
within 30 business days from the date of suspension of trading by the Trust, and
the Managing Owner shall mail notice of such date to each Unitholder and
assignee of Units of whom it has received written notice as described above, by
first-class mail, postage prepaid, not later than ten business days prior to
such Special Redemption Date, together with instructions as to the procedure
such Unitholder or assignee must follow to have his interest (only entire, not
partial, interests may be so redeemed unless otherwise determined by the
Managing Owner) in the Trust redeemed on such date. Upon redemption pursuant to
a Special Redemption Date, a Unitholder or any other assignee of whom the
Managing Owner has received written notice as described above, shall receive
from the Trust an amount equal to the Net Asset Value of his interest in the
Trust, determined as of the close of business (as determined by the Managing
Owner) on such Special Redemption Date. No redemption charges shall be assessed
on any such Special Redemption Date. As in the case of a regular redemption, an
assignee shall not be entitled to redemption until the Managing Owner has
received written notice (as described above) of the assignment, transfer or
disposition under which the assignee claims an interest in the Units to be
redeemed. If, after such Special Redemption Date, the Net Assets of the Trust
are at least $250,000 and the Net Asset Value of a Unit is in excess of $25, the
Trust may, in the discretion of the Managing Owner, resume trading. The
Managing Owner may at any time and in its discretion declare a Special
Redemption Date, should the Managing Owner determine that it is in the best
interests of the Trust to do so. The Managing Owner in its notice of a Special
Redemption Date may, in its discretion, establish the conditions, if any, under
which other Special Redemption Dates must be called, which conditions may be
determined in the sole discretion of the Managing Owner, irrespective of the
provisions of this paragraph. The

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Managing Owner may also, in its discretion, declare additional regular
redemption dates for Units and permit certain Unitholders to redeem at other
than month-end.

Redemption payments will be made within fifteen business days after
the month-end of redemption (and notice that the redemption has occurred will be
provided to Unitholders within ten business days after such month-end), except
that under special circumstances, including, but not limited to, inability to
liquidate commodity positions as of a redemption date or default or delay in
payments due the Trust from commodity brokers, banks or other persons or
entities, the Trust may in turn delay payment to Unitholders or assignees
requesting redemption of their Units of the proportionate part of the Net Asset
Value of such Units equal to that proportionate part of the Trust's aggregate
Net Asset Value represented by the sums which are the subject of such default or
delay.

Only whole Units may be redeemed, except upon complete redemption of
an investor's Units, unless the Managing Owner specifically otherwise consents.
Redemptions may be requested for a minimum of the lesser of $1,000 or ten (10)
Units provided that, for investors redeeming less than all their Units, such
investors remaining units equal at least $500.

The Managing Owner may require a Unitholder to redeem all or a portion
of such Unitholder's Units if the Managing Owner considers doing so to be
desirable for the protection of the Trust, and will use best efforts to do so to
the extent necessary to prevent the Trust from being deemed to hold "plan
assets" under the provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or the Code, with respect to any "employee benefit
plan" subject to ERISA or with respect to any plan or account subject to
Section 4975 of the Code.

13. OFFERING OF UNITS.

The Managing Owner on behalf of the Trust shall (i) cause to be filed
a Registration Statement or Registration Statements, and such amendments thereto
as the Managing Owner deems advisable, with the Securities and Exchange
Commission for the registration and ongoing public offering of the Units,
(ii) use its best efforts to qualify and to keep qualified Units for sale under
the securities laws of such States of the United States or other jurisdictions
as the Managing Owner shall deem advisable and (iii) take such action with
respect to the matters described in (i) and (ii) as the Managing Owner shall
deem advisable or necessary.

The Managing Owner shall use its best efforts not to accept any
subscriptions for Units if doing so would cause the Trust to hold "plan assets"
under ERISA or the Code with respect to any "employee benefit plan" subject to
ERISA or with respect to any plan or account subject to Section 4975 of the
Code. If such a subscriber has its subscription reduced for such reason, such
subscriber shall be entitled to rescind its subscription in its entirety even
though subscriptions are otherwise irrevocable.

14. ADDITIONAL OFFERINGS.

The Managing Owner may, in its discretion, make additional public or
private offerings of Units, provided that the net proceeds to the Trust of any
such sales shall in no event be less than the Net Asset Value per Unit (as
defined in Section 5(d) hereof) at the time of sale (unless the new Unit's
participation in the profits and losses of the Trust is appropriately adjusted).
No Unitholder shall have any preemptive, preferential or other rights with
respect to the issuance or sale of any additional Units, other than as set forth
in the preceding sentence.

The Trust may offer different series or classes of Units having
different economic terms than previously offered series or classes of Units;
provided that the issuance of such a new series or class of Units shall in no
respect adversely affect the holders of outstanding Units; and provided further
that the assets attributable to each such series or class shall, to the maximum
extent permitted by law, be treated as legally separate and distinct pools of
assets, and the assets attributable to one such series or class be prevented
from being used in any respect to satisfy or discharge any debt or obligation of
any other such series or class.

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15. SPECIAL POWER OF ATTORNEY.

Each Unitholder by his execution of this Declaration of Trust and
Trust Agreement does hereby irrevocably constitute and appoint the Managing
Owner and each officer of the Managing Owner, with power of substitution, as his
true and lawful attorney-in-fact, in his name, place and stead, to execute,
acknowledge, swear to (and deliver as may be appropriate) on his behalf and file
and record in the appropriate public offices and publish (as may in the
reasonable judgment of the Managing Owner be required by law): (i) this
Declaration of Trust and Trust Agreement, including any amendments and/or
restatements hereto duly adopted as provided herein; (ii) certificates in
various jurisdictions, and amendments and/or restatements thereto, and of
assumed name or of doing business under a fictitious name with respect to the
Trust; (iii) all conveyances and other instruments which the Managing Owner
deems appropriate to qualify or continue the Trust in the State of Delaware and
the jurisdictions in which the Trust may conduct business, or which may be
required to be filed by the Trust or the Unitholders under the laws of any
jurisdiction or under any amendments or successor statutes to the Act, to
reflect the dissolution or termination of the Trust or the Trust being governed
by any amendments or successor statutes to the Act or to reorganize or refile
the Trust in a different jurisdiction; and (iv) to file, prosecute, defend,
settle or compromise litigation, claims or arbitrations on behalf of the Trust.
The Power of Attorney granted herein shall be irrevocable and deemed to be a
power coupled with an interest (including, without limitation, the interest of
the other Unitholders in the Managing Owner being able to rely on the Managing
Owner's authority to act as contemplated by this Section 14) and shall survive
and shall not be affected by the subsequent incapacity, disability or death of a
Unitholder.

16. WITHDRAWAL OF A UNITHOLDER.

The Trust shall be dissolved upon the death, insanity, bankruptcy,
retirement, resignation, expulsion, withdrawal, dissolution, admitted or
court-decreed insolvency or the removal of the Managing Owner, or any other
event that causes the Managing Owner to cease to be a managing owner under the
Act, unless the Trust is continued pursuant to the terms of Section 5(a)(3). In
addition, the Managing Owner may withdraw from the Trust, without any breach of
this Declaration of Trust and Trust Agreement, at any time upon 120 days'
written notice by first class mail, postage prepaid, to each Unitholder and
assignee of whom the Managing Owner has notice. If the Managing Owner withdraws
as managing owner and the Trust's business is continued, the withdrawing
Managing Owner shall pay all expenses incurred as a result of its withdrawal.
In the event of the Managing Owner's removal or withdrawal, the Managing Owner
shall be entitled to a redemption of its interest in the Trust at its Net Asset
Value on the next valuation date following the date of removal or withdrawal.

The Managing Owner may not assign its general liability interest or
its obligation to direct the trading of the Trust assets without the consent of
each Unitholder. The Managing Owner will notify all Unitholders of any change
in the principals of the Managing Owner. No provision of this Declaration of
Trust and Trust Agreement shall be deemed, nor does any such provision purport,
to waive compliance with the Investment Advisers Act of 1940, as amended.

The death, incompetency, withdrawal, insolvency or dissolution of a
Unitholder or any other event that causes a Unitholder to cease to be a
Unitholder (within the meaning of the Act) in the Trust shall not terminate or
dissolve the Trust, and a Unitholder, his estate, custodian or personal
representative shall have no right to redeem or value such Unitholder's interest
in the Trust except as provided in Section 12 hereof. Each Unitholder expressly
agrees that in the event of his death, he waives on behalf of himself and his
estate, and directs the legal representatives of his estate and any person
interested therein to waive, the furnishing of any inventory, accounting or
appraisal of the assets of the Trust and any right to an audit or examination of
the books of the Trust. Nothing in this Section 16 shall, however, waive any
right given elsewhere in this Declaration of Trust and Trust Agreement for a
Unitholder to be informed of the Net Asset Value of his Units, to receive
periodic reports, audited financial statements and other information from the
Managing Owner or the Trust or to redeem or transfer Units.

17. STANDARD OF LIABILITY; INDEMNIFICATION.

(a) STANDARD OF LIABILITY FOR THE MANAGING OWNER. The Managing Owner
and its Affiliates, as defined below, shall have no liability to the Trust or to
any Unitholder for any loss suffered by the Trust which arises out of any action
or inaction of the Managing Owner or its Affiliates if the Managing Owner, in
good faith, determined that such course of conduct was in the best interests of
the Trust and such course of conduct did not constitute negligence or misconduct
of the Managing Owner or its Affiliates.

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<PAGE>

(b) INDEMNIFICATION OF THE MANAGING OWNER BY THE TRUST. To the
fullest extent permitted by law, subject to this Section 17, the Managing Owner
and its Affiliates shall be indemnified by the Trust against any losses,
judgments, liabilities, expenses and amounts paid in settlement of any claims
sustained by them in connection with the Trust; provided that such claims were
not the result of negligence or misconduct on the part of the Managing Owner or
its Affiliates, and the Managing Owner, in good faith, determined that such
conduct was in the best interests of the Trust; and provided further that
Affiliates of the Managing Owner shall be entitled to indemnification only for
losses incurred by such Affiliates in performing the duties of the Managing
Owner and acting wholly within the scope of the authority of the Managing Owner.

Notwithstanding anything to the contrary contained in the preceding
two paragraphs, the Managing Owner and its Affiliates and any persons acting as
Selling Agents for the Units shall not be indemnified for any losses,
liabilities or expenses arising from or out of an alleged violation of federal
or state securities laws unless (1) there has been a successful adjudication on
the merits of each count involving alleged securities law violations as to the
particular indemnitee and the court approves indemnification of the litigation
costs, or (2) such claims have been dismissed with prejudice on the merits by a
court of competent jurisdiction as to the particular indemnitee and the court
approves indemnification of the litigation costs, or (3) a court of competent
jurisdiction approves a settlement of the claims against a particular indemnitee
and finds that indemnification of the settlement and related costs should be
made.

In any claim for indemnification for federal or state securities law
violations, the party seeking indemnification shall place before the court the
position of the Securities and Exchange Commission, the California Department of
Corporations, the Massachusetts Securities Division, the Pennsylvania Securities
Commission, the Tennessee Securities Division, the Texas Securities Board and
any other state or applicable regulatory authority with respect to the issue of
indemnification for securities law violations.

The Trust shall not bear the cost of that portion of any insurance
which insures any party against any liability the indemnification of which is
herein prohibited.

For the purposes of this Section 17, the term "Affiliates" shall mean
any person acting on behalf of or performing services on behalf of the Trust
who: (1) directly or indirectly controls, is controlled by, or is under common
control with the Managing Owner; or (2) owns or controls 10% or more of the
outstanding voting securities of the Managing Owner; or (3) is an officer or
director of the Managing Owner; or (4) if the Managing Owner is an officer,
director, partner or trustee, is any entity for which the Managing Owner acts in
any such capacity.

Advances from Trust funds to the Managing Owner and its Affiliates for
legal expenses and other costs incurred as a result of any legal action
initiated against the Managing Owner by a Unitholder are prohibited.

Advances from Trust funds to the Managing Owner and its Affiliates for
legal expenses and other costs incurred as a result of a legal action will be
made only if the following three conditions are satisfied: (1) the legal action
relates to the performance of duties or services by the Managing Owner or its
Affiliates on behalf of the Trust; (2) the legal action is initiated by a third
party who is not a Unitholder; and (3) the Managing Owner or its Affiliates
undertake to repay the advanced funds, with interest from the date of such
advance, to the Trust in cases in which they would not be entitled to
indemnification under the standard of liability set forth in Section 17(a).

In no event shall any indemnity or exculpation provided for herein be
more favorable to the Managing Owner or any Affiliate than that contemplated by
the NASAA Guidelines as in effect on the date of this Declaration of Trust and
Trust Agreement.

In no event shall any indemnification permitted by this subsection
(b) of Section 17 be made by the Trust unless all provisions of this Section for
the payment of indemnification have been complied with in all respects.
Furthermore, it shall be a precondition of any such indemnification that the
Trust receive a determination of qualified independent legal counsel in a
written opinion that the party which seeks to be indemnified hereunder has met
the applicable standard of conduct set forth herein. Receipt of any such
opinion shall not, however, in itself, entitle any such party to indemnification
unless indemnification is otherwise proper hereunder. Any indemnification
payable by the Trust hereunder shall be made only as provided in the specific
case.

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<PAGE>

In no event shall any indemnification obligations of the Trust under
this subsection (b) of this Section 17 subject a Unitholder to any liability in
excess of that contemplated by subsection (e) of Section 8 hereof.

(c) INDEMNIFICATION OF THE TRUST BY THE UNITHOLDERS. In the event
the Trust is made a party to any claim, dispute or litigation or otherwise
incurs any loss or expense as a result of or in connection with any Unitholder's
activities, obligations or liabilities unrelated to the Trust's business, such
Unitholder shall indemnify and reimburse the Trust for all loss and expense
incurred, including reasonable attorneys' fees.

18. AMENDMENTS; MEETINGS.

(a) AMENDMENTS WITH CONSENT OF THE MANAGING OWNER. If at any time
during the term of the Trust the Managing Owner shall deem it necessary or
desirable to amend this Declaration of Trust and Trust Agreement, the Managing
Owner may proceed to do so, provided that such amendment shall be effective only
if embodied in an instrument approved by the Managing Owner and, subject to the
immediately following sentence, by the holders of Units representing a majority
of the outstanding Units. No meeting procedure or specified notice period is
required in the case of amendments made with the consent of the Managing Owner,
mere receipt of an adequate number of unrevoked written consents being
sufficient. The Managing Owner may amend this Declaration of Trust and Trust
Agreement without the consent of the Unitholders in order (i) to clarify any
clerical inaccuracy or ambiguity or reconcile any inconsistency (including any
inconsistency between this Declaration of Trust and Trust Agreement and the
Prospectus), (ii) to effect the intent of the tax allocations proposed herein to
the maximum extent possible in the event of a change in the Code or the
interpretations thereof affecting such allocations, (iii) to attempt to ensure
that the Trust is not treated as an association taxable as a corporation for
federal income tax purposes, (iv) to qualify or maintain the qualification of
the Trust as a trust in any jurisdiction, (v) to delete or add any provision of
or to this Declaration of Trust and Trust Agreement required to be deleted or
added by the Staff of the Securities and Exchange Commission or any other
federal agency or any state "Blue Sky" official or similar official or in order
to opt to be governed by any amendment or successor statute to the Act, (vi) to
make any amendment to this Declaration of Trust and Trust Agreement which the
Managing Owner deems advisable, including amendments that reflect the offering
and issuance of additional Units, whether or not issued through a series or
class, provided that such amendment is not adverse to the Unitholders, or that
is required by law, and (vii) to make any amendment that is appropriate or
necessary, in the opinion of the Managing Owner, to prevent the Trust or the
Managing Owner or its directors, officers or controlling persons from in any
manner being subjected to the provisions of the Investment Company Act of 1940,
as amended, or to prevent the assets of the Trust from being considered for any
purpose of ERISA or Section 4975 of the Code to constitute assets of any
"employee benefit plan" as defined in and subject to ERISA or of any "plan"
subject to Section 4975 of the Code.

(b) AMENDMENTS AND ACTIONS WITHOUT CONSENT OF THE MANAGING OWNER. In
any vote called by the Managing Owner or pursuant to section (c) of this Section
18, upon the affirmative vote (which may be in person or by proxy) of more than
fifty percent (50%) of the Units then owned by Unitholders, the following
actions may be taken, irrespective of whether the Managing Owner concurs:
(i) this Declaration of Trust and Trust Agreement may be amended, provided,
however, that approval of all Unitholders shall be required in the case of
amendments changing or altering this Section 18, extending the term of the
Trust, or materially changing the Trust's basic investment policies or
structure; in addition, reduction of the capital account of any Unitholder or
assignee or modification of the percentage of profits, losses or distributions
to which a Unitholder or an assignee is entitled hereunder shall not be effected
by any amendment or supplement to this Declaration of Trust and Trust Agreement
without such Unitholder's or assignee's written consent; (ii) the Trust may be
dissolved; (iii) the Managing Owner may be removed and replaced; (iv) a new
managing owner or managing owners may be elected if the Managing Owner withdraws
from the Trust; (v) the sale of all or substantially all of the assets of the
Trust may be approved; and (vi) any contract with the Managing Owner or any
affiliate thereof may be disapproved of and, as a result, terminated upon 60
days' notice.

(c) MEETINGS; OTHER VOTING MATTERS. Any Unitholder upon request
addressed to the Managing Owner shall be entitled to obtain from the Managing
Owner, upon payment in advance of reasonable reproduction and mailing costs, a
list of the names and addresses of record of all Unitholders and the number of
Units held by each (which shall be mailed by the Managing Owner to the
Unitholder within ten days of the receipt of the request); provided, that the
Managing Owner may require any Unitholder requesting such information to submit
written confirmation that such information will not be used for commercial
purposes. Upon receipt of a written proposal, signed by Unitholders owning
Units representing at least 10% of the Units then owned by Unitholders, that a
meeting of the Trust be called to vote upon

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<PAGE>

any matter upon which the Unitholders may vote pursuant to this Declaration of
Trust and Trust Agreement, the Managing Owner shall, by written notice to each
Unitholder of record sent by certified mail within 15 days after such receipt,
call a meeting of the Trust. Such meeting shall be held at least 30 but not
more than 60 days after the mailing of such notice, and such notice shall
specify the date of, a reasonable place and time for, and the purpose of such
meeting.

The Managing Owner may not restrict the voting rights of Unitholders
as set forth herein.

In the event that the Managing Owner or the Unitholders vote to amend
this Declaration of Trust and Trust Agreement in any material respect, the
amendment will not become effective prior to all Unitholders having an
opportunity to redeem their Units.

(d) CONSENT BY TRUSTEE. The Trustee's written consent to any
amendment of this Declaration of Trust and Trust Agreement shall be required,
such consent not to be unreasonably withheld; provided, however, that the
Trustee may, in its sole discretion, withhold its consent to any such amendment
that would adversely affect any right, duty or liability of, or immunity or
indemnity in favor of, the Trustee under this Declaration of Trust and Trust
Agreement or any of the documents contemplated hereby to which the Trustee is a
party, or would cause or result in any conflict with or breach of any terms,
conditions or provisions of, or default under, the charter documents or by-laws
of the Trustee or any document contemplated thereby to which the Trustee is a
party.

19. GOVERNING LAW.

The validity and construction of this Declaration of Trust and Trust
Agreement shall be determined and governed by the laws of the State of Delaware
without regard to principles of conflicts of law; provided, however, that causes
of action for violations of federal or state securities laws shall not be
governed by this Section 19.

20. MISCELLANEOUS.

(a) NOTICES. All notices under this Declaration of Trust and Trust
Agreement shall be in writing and shall be effective upon personal delivery, or
if sent by first class mail, postage prepaid, addressed to the last known
address of the party to whom such notice is to be given, upon the deposit of
such notice in the United States mail.

(b) BINDING EFFECT. This Declaration of Trust and Trust Agreement
shall inure to and be binding upon all of the parties, all parties indemnified
under Sections 2 and 17 hereof, and their respective successors and assigns,
custodians, estates, heirs and personal representatives. For purposes of
determining the rights of any Unitholder or assignee hereunder, the Trust and
the Managing Owner may rely upon the Trust records as to who are Unitholders and
assignees, and all Unitholders and assignees agree that their rights shall be
determined and they shall be bound thereby.

(c) CAPTIONS. Captions in no way define, limit, extend or describe
the scope of this Declaration of Trust and Trust Agreement nor the effect of any
of its provisions. Any reference to "persons" in this Declaration of Trust and
Trust Agreement shall also be deemed to include entities, unless the context
otherwise requires.

21. BENEFIT PLAN INVESTORS.

Each Unitholder that is an "employee benefit plan" as defined in and
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or a "plan" as defined in Section 4975 of the Code (each such
employee benefit plan and plan, a "Plan"), and each fiduciary thereof who has
caused the Plan to become a Unitholder (a "Plan Fiduciary"), represents and
warrants that: (a) the Plan Fiduciary has considered an investment in the Trust
for such Plan in light of the risks relating thereto; (b) the Plan Fiduciary has
determined that, in view of such considerations, the investment in the Trust for
such Plan is consistent with the Plan Fiduciary's responsibilities under ERISA;
(c) the investment in the Trust by the Plan does not violate and is not
otherwise inconsistent with the terms of any legal document constituting the
Plan or any trust agreement thereunder; (d) the Plan's investment in the Trust
has been duly authorized and approved by all necessary parties; (e) none of
Kenmar, any advisor to the Trust, any selling agent, the clearing broker, the
escrow agent, any broker through which any advisor requires the Trust to trade,
the Trustee, any of their respective affiliates or any of their respective
agents or employees: (i) has investment discretion with respect to the
investment of assets of the Plan used to

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<PAGE>

purchase the Units; (ii) has authority or responsibility to or regularly gives
investment advice with respect to the assets of the Plan used to purchase the
Units for a fee and pursuant to an agreement or understanding that such advice
will serve as a primary basis for investment decisions with respect to the Plan
and that such advice will be based on the particular investment needs of the
Plan; or (iii) is an employer maintaining or contributing to the Plan; and (f)
the Plan Fiduciary: (i) is authorized to make, and is responsible for, the
decision for the Plan to invest in the Trust, including the determination that
such investment is consistent with the requirement imposed by Section 404 of
ERISA that Plan investments be diversified so as to the risks of large losses;
(ii) is independent of Kenmar, any advisor to the Trust, any selling agent, the
clearing broker, the escrow agent, any broker through which any Advisor requires
the Trust to trade, the Trustee and any of their respective affiliates; and
(iii) is qualified to make such investment decision.

22. CERTAIN DEFINITIONS.

This Declaration of Trust and Trust Agreement contains certain
provisions required by the NASAA Guidelines. The terms used in such provisions
are defined as follows (the following definitions are included VERBATIM from the
NASAA Guidelines and, accordingly, may not in all cases be relevant to this
Declaration of Trust and Trust Agreement):

ADMINISTRATOR. The official or agency administering the securities
laws of a state.

ADVISOR. Any Person who for any consideration engages in the
business of advising others, either directly or indirectly, as to the
value, purchase, or sale of Commodity Contracts or commodity options.

AFFILIATE. An Affiliate of a Person means: (a) any Person directly
or indirectly owning, controlling or holding with power to vote 10% or
more of the outstanding voting securities of such Person; (b) any
Person 10% or more of whose outstanding voting securities are directly
or indirectly owned, controlled or held with power to vote, by such
Person; (c) any Person, directly or indirectly, controlling,
controlled by, or under common control with such Person; (d) any
officer, director or partner of such Person; or (e) if such Person is
an officer, director or partner, any Person for which such Person acts
in any such capacity.

CAPITAL CONTRIBUTIONS. The total investment in a Program by a
Participant or by all Participants, as the case may be.

COMMODITY BROKER. Any Person who engages in the business of
effecting transactions in Commodity Contracts for the account of
others or for his own account.

COMMODITY CONTRACT. A contract or option thereon providing for the
delivery or receipt at a future date of a specified amount and grade
of a traded commodity at a specified price and delivery point.

CROSS REFERENCE SHEET. A compilation of the Guidelines sections,
referenced to the page of the prospectus, Program agreement, or other
exhibits, and justification of any deviation from the Guidelines.

NET ASSETS. The total assets, less total liabilities, of the Program
determined on the basis of generally accepted accounting principles.
Net Assets shall include any unrealized profits or losses on open
positions, and any fee or expense including Net Asset fees accruing to
the Program.

NET ASSET VALUE PER PROGRAM INTEREST. The Net Assets divided by the
number of Program Interests outstanding.

NET WORTH. The excess of total assets over total liabilities as
determined by generally accepted accounting principles. Net Worth
shall be determined exclusive of home, home furnishings and
automobiles.

NEW TRADING PROFITS. The excess, if any, of Net Assets at the end of
the period over Net Assets at the end of the highest previous period
or Net Assets at the date trading commences, whichever is higher, and
as further adjusted to eliminate the effect on Net Assets resulting
from new Capital Contributions,

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<PAGE>

redemptions, or capital distributions, if any, made during the period
decreased by interest or other income, not directly related to trading
activity, earned on Program assets during the period, whether the
assets are held separately or in the margin account.

ORGANIZATIONAL AND OFFERING EXPENSES. All expenses incurred by the
Program in connection with and in preparing a Program for registration
and subsequently offering and distributing it to the public,
including, but not limited to, total underwriting and brokerage
discounts and commissions (including fees of the underwriters'
attorneys), expenses for printing, engraving, mailing, salaries of
employees while engaged in sales activity, charges of transfer agents,
registrars, trustees, escrow holders, depositories, experts, expenses
of qualification of the sale of its Program Interests under federal
and state law including taxes and fees, accountants' and attorneys'
fees.

PARTICIPANT. The holder of a Program Interest.

PERSON. Any natural Person, partnership, corporation, association or
other legal entity.

PIT BROKERAGE FEE. Pit Brokerage Fee shall include floor brokerage,
clearing fees, National Futures Association fees, and exchange fees.

PROGRAM. A limited partnership, joint venture, corporation, trust or
other entity formed and operated for the purpose of investing in
Commodity Contracts.

PROGRAM BROKER. A Commodity Broker that effects trades in Commodity
Contracts for the account of a Program.

PROGRAM INTEREST. A limited partnership interest or other security
representing ownership in a Program.

PYRAMIDING. A method of using all or a part of an unrealized profit
in a Commodity Contract position to provide margin for any additional
Commodity Contracts of the same or related commodities.

SPONSOR. Any Person directly or indirectly instrumental in
organizing a Program or any Person who will manage or participate in
the management of a Program, including a Commodity Broker who pays any
portion of the Organizational Expenses of the Program, and the general
partner(s) and any other Person who regularly performs or selects the
Persons who perform services for the Program. Sponsor does not
include wholly independent third parties such as attorneys,
accountants, and underwriters whose only compensation is for
professional services rendered in connection with the offering of the
units. The term "Sponsor" shall be deemed to include its Affiliates.

VALUATION DATE. The date as of which the Net Assets of the Program
are determined.

VALUATION PERIOD. A regular period of time between Valuation Dates.

23. NO LEGAL TITLE TO TRUST ESTATE.

The Unitholders shall not have legal title to any part of the Trust
Estate.

24. LEGAL TITLE.

Legal title to all the Trust Estate shall be vested in the Trust as a
separate legal entity; except where applicable law in any jurisdiction requires
any part of the Trust Estate to be vested otherwise, the Managing Owner (or the
Trustee, if required by law) may cause legal title to the Trust Estate of any
portion thereof to be held by or in the name of the Managing Owner or any other
person as nominee.

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<PAGE>

25. CREDITORS.

No creditors of any Unitholders shall have any right to obtain
possession of, or otherwise exercise legal or equitable remedies with respect
to, the Trust Estate.

IN WITNESS WHEREOF, the undersigned have duly executed this
Declaration of Trust and Trust Agreement as of the day and year first above
written.

WILMINGTON TRUST COMPANY
as Trustee

By: /s/ Emmett R. Harmon
-----------------------------------------
Name: Emmett R. Harmon
Title: Vice President

KENMAR ADVISORY CORP.
as Managing Owner

By: /s/ Esther E. Goodman
-----------------------------------------
Name: Esther E. Goodman
Title: Chief Operating Officer and
Senior Executive Vice President

KENMAR VENTURE PARTNERS LIMITED PARTNERSHIP
as Initial Unitholder

By: KENMAR ADVISORY CORP., GENERAL PARTNER
-----------------------------------------

By: /s/ Esther E. Goodman
-----------------------------------------
Name: Esther E. Goodman
Title: Chief Operating Officer and
Senior Executive Vice President

All Unitholders now and hereafter admitted as
Unitholders of the Trust, pursuant to powers
of attorney now and hereafter executed in
favor of, and granted and delivered to, the
Managing Owner.

By: KENMAR ADVISORY CORP.,
ATTORNEY-IN-FACT

By: /s/ Esther E. Goodman
-----------------------------------------
Name: Esther E. Goodman
Title: Chief Operating Officer and
Senior Executive Vice President

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<PAGE>

Schedule A

FORM
OF
CERTIFICATE OF TRUST
OF
KENMAR GLOBAL TRUST

THIS Certificate of Trust of KENMAR GLOBAL TRUST (the "Trust"), dated
July 17, 1996, is being duly executed and filed by Wilmington Trust Company, a
Delaware banking corporation, as trustee, to form a business trust under the
Delaware Business Trust Act (12 DEL.C. 3801 ET SEQ.)

1. NAME. The name of the business trust formed hereby is Kenmar
Global Trust.

2. DELAWARE TRUSTEE. The name and business address of the trustee of
the Trust in the State of Delaware is Wilmington Trust Company, 1100 North
Market Street, Rodney Square North, Wilmington, Delaware 19890, Attention:
Corporate Trust Administration.

3. EFFECTIVE DATE. This Certificate of Trust shall be effective upon
the date and time of filing.

IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust as of the date first above
written.

WILMINGTON TRUST COMPANY
as Trustee

By: /s/ W. Chris Sponenberg
-------------------------------
Name: W. Chris Sponenberg
Title: Financial Services
Officer

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<PAGE>

ANNEX
KENMAR GLOBAL TRUST

REQUEST FOR REDEMPTION

KENMAR GLOBAL TRUST ___________________________
c/o Kenmar Advisory Corp. Date
Managing Owner
Two American Lane
P.O. Box 5150
Greenwich, CT 06831-8150

Dear Sirs:

The undersigned (trust account number ________) hereby requests
redemption subject to all terms and conditions of the Declaration of Trust and
Trust Agreement (the "Declaration of Trust") of KENMAR GLOBAL TRUST (the
"Trust"), of _____ Units of Beneficial Interest ("Units") in the Trust. (INSERT
THE NUMBER OF WHOLE UNITS TO BE REDEEMED; SUBSCRIBERS MAY REDEEM ANY NUMBER OF
WHOLE UNITS, THEY NEED NOT REDEEM ALL OR ANY MINIMUM NUMBER OF THEIR UNITS IN
ORDER TO REDEEM CERTAIN OF THEIR UNITS; HOWEVER, IF NO NUMBER IS INDICATED, ALL
UNITS HELD OF RECORD BY THE UNDERSIGNED WILL BE REDEEMED; FRACTIONAL UNITS MAY
ONLY BE REDEEMED UPON COMPLETE REDEMPTION OF UNDERSIGNED'S INTEREST IN THE
TRUST.) Units are redeemed at the Net Asset Value per Unit, as defined in the
Declaration of Trust, less any applicable redemption charge (see below).
Redemption shall be effective as of the end of the current calendar month;
provided that this Request for Redemption is received at least ten (10) calendar
days prior to the end of such month. Payment of the redemption price of Units
will generally be made within fifteen (15) business days of the date of
redemption.

The undersigned hereby represents and warrants that the undersigned is
the true, lawful and beneficial owner of the Units to which this Request for
Redemption relates with full power and authority to request redemption of such
Units. Such Units are not subject to any pledge or otherwise encumbered in any
fashion.

Redemption charges of 3% and 2% of the Net Asset Value of Units
redeemed on or before the end of the 6th month through the end of the 12th month
after sale and from the end of the 12th month through the end of the 18th month
after sale will be deducted from the redemption price of all such Units paid to
Kenmar.

__________________________

UNITED STATES TAXABLE UNITHOLDERS ONLY

Under penalty of perjury, the undersigned hereby certifies that the
Social Security Number or Taxpayer ID Number indicated on this Request for
Redemption is the undersigned's true, correct and complete Social Security
Number or Taxpayer ID Number and that the undersigned is not subject to backup
withholding under the provisions of Section 3406(a)(1)(C) of the Internal
Revenue Code.

NON-UNITED STATES UNITHOLDERS ONLY

Under penalty of perjury, the undersigned hereby certifies that (a)
the undersigned is not a citizen or resident of the United States or (b) (in the
case of an investor which is not an individual) the investor is not a United
States corporation, partnership, estate or trust.

SIGNATURES MUST BE IDENTICAL TO NAME(S) IN WHICH UNITS ARE REGISTERED

/ / Credit my brokerage account / / Send to the address below

________________________________________________________________________________
Name Street City, State and Zip Code

Entity Unitholder Individual Unitholder(s)
(or assignee) (or assignee(s))

________________________________________ ___________________________________
(Name of Entity)
___________________________________

By: ___________________________________ ___________________________________
(Authorized corporate officer, (Signature(s) of all Unitholder(s)
partner or trustee) or assignee(s))

<PAGE>

EXHIBIT B

KENMAR GLOBAL TRUST
____________________

SUBSCRIPTION REQUIREMENTS

By executing a Subscription Agreement and Power of Attorney Signature
Page for Units of Beneficial Interest ("Units") of KENMAR GLOBAL TRUST (the
"Trust"), each purchaser ("Purchaser") of Units irrevocably subscribes for Units
at Net Asset Value, as described in the Trust's Prospectus dated September 26,
1997 (the "Prospectus").

If Purchaser's Subscription Agreement and Power of Attorney Signature
Page is accepted, Purchaser agrees to contribute Purchaser's subscription to the
Trust and to be bound by the terms of the Trust's Declaration of Trust and Trust
Agreement, which will be in substantially the form of the Declaration of Trust
and Trust Agreement included in the Prospectus as Exhibit A. Purchaser agrees
to reimburse the Trust and Kenmar Advisory Corp. ("Kenmar"), the managing owner
of the Trust, for any expense or loss incurred by either as a result of the
cancellation of Purchaser's Units due to a failure of the Purchaser to deliver
good funds in the full amount of the subscription price of the Units subscribed
for by Purchaser.

REPRESENTATIONS AND WARRANTIES

As an inducement to Kenmar to accept this subscription, Purchaser, by
executing and delivering Purchaser's Subscription Agreement and Power of
Attorney Signature Page, represents and warrants to the Trust, Kenmar, and the
Selling Agent as follows:

(a) Purchaser is of legal age to execute the Subscription Agreement
and Power of Attorney Signature Page and is legally competent to do so.
Purchaser acknowledges that Purchaser has received (prior to any
solicitation of Purchaser's investment) a copy of the Prospectus --
including the Appendices, the Declaration of Trust and Trust Agreement and
summary financial information relating to the Trust current within 60
calendar days -- dated within nine months of the date as of which Purchaser
has subscribed to purchase Units.

(b) All information that Purchaser has heretofore furnished to Kenmar
or that is set forth in the Subscription Agreement and Power of Attorney
submitted by Purchaser is correct and complete as of the date of such
Subscription Agreement and Power of Attorney, and if there should be any
change in such information prior to acceptance of Purchaser's subscription,
Purchaser will immediately furnish such revised or corrected information to
Kenmar.

(c) Unless (d) below is applicable, Purchaser's subscription is made
with Purchaser's funds for Purchaser's own account and not as trustee,
custodian or nominee for another.

(d) The subscription, if made as custodian for a minor, is a gift
Purchaser has made to such minor and is not made with such minor's funds
or, if not a gift, the representations as to net worth and annual income
set forth below apply only to such minor.

(e) If Purchaser is subscribing in a representative capacity,
Purchaser has full power and authority to purchase the Units and enter into
and be bound by the Subscription Agreement and Power of Attorney on behalf
of the entity for which he is purchasing the Units, and such entity has
full right and power to purchase such Units and enter into and be bound by
the Subscription Agreement and Power of Attorney and to become a Unitholder
pursuant to the Declaration of Trust and Trust Agreement.

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<PAGE>

(f) Purchaser either is not required to be registered with the
Commodity Futures Trading Commission ("CFTC") or to be a member of the
National Futures Association ("NFA"), or, if required to be so, is duly
registered with the CFTC and is a member in good standing of the NFA. IT
IS AN NFA REQUIREMENT THAT KENMAR ATTEMPT TO VERIFY THAT ANY ENTITY WHICH
SEEKS TO PURCHASE UNITS BE DULY REGISTERED WITH THE CFTC AND A MEMBER OF
THE NFA, IF REQUIRED. PURCHASER AGREES TO SUPPLY KENMAR WITH SUCH
INFORMATION AS KENMAR MAY REASONABLY REQUEST IN ORDER TO ATTEMPT SUCH
VERIFICATION. MOST ENTITIES WHICH ACQUIRE UNITS WILL, AS A RESULT,
THEMSELVES BECOME "COMMODITY POOLS" WITHIN THE INTENT OF APPLICABLE CFTC
AND NFA RULES, AND THEIR SPONSORS, ACCORDINGLY, WILL BE REQUIRED TO
REGISTER AS "COMMODITY POOL OPERATORS."

The representations and statements set forth herein may be asserted in
the defense of the Trust, Kenmar, the Advisors to the Trust, the Selling Agents
or others in any subsequent litigation or other proceeding.

____________________

INVESTOR SUITABILITY

PURCHASER UNDERSTANDS THAT THE PURCHASE OF UNITS MAY BE MADE ONLY BY
PERSONS WHO, AT A MINIMUM, HAVE (I) A NET WORTH OF AT LEAST $150,000 (EXCLUSIVE
OF HOME, FURNISHINGS AND AUTOMOBILES) OR (II) AN ANNUAL GROSS INCOME OF AT LEAST
$45,000 AND A NET WORTH OF AT LEAST $45,000 (EXCLUSIVE OF HOME, FURNISHINGS AND
AUTOMOBILES). RESIDENTS OF THE FOLLOWING STATES MUST MEET THE REQUIREMENTS SET
FORTH BELOW ("NET WORTH" FOR SUCH PURPOSES IS IN ALL CASES IS EXCLUSIVE OF HOME,
FURNISHINGS AND AUTOMOBILES). IN ADDITION, PURCHASER MAY NOT INVEST MORE THAN
10% OF HIS OR HER READILY MARKETABLE ASSETS IN THE TRUST.

1. Arizona -- Net worth of at least $225,000 or a net worth of at
least $60,000 and an annual income of at least $60,000.

2. California -- Net worth of at least $250,000 and an annual income
of at least $65,000 or, in the alternative, a net worth of at least $500,000.

3. Iowa -- Net worth of at least $225,000 or a net worth of at least
$60,000 and an annual taxable income of at least $60,000. The minimum
investment for IRAs is $2,500.

4. Maine -- Minimum subscription per investment, both initial and
subsequent, of $5,000; net worth of at least $200,000 or a net worth of at least
$50,000 and an annual income of at least $50,000. MAINE RESIDENTS MUST SIGN A
SUBSCRIPTION AGREEMENT AND POWER OF ATTORNEY SIGNATURE PAGE SPECIFICALLY
PREPARED FOR MAINE RESIDENTS, A COPY OF WHICH SHALL ACCOMPANY THIS PROSPECTUS AS
DELIVERED TO ALL MAINE RESIDENTS.

5. Massachusetts -- Net worth of at least $225,000 or a net worth of
at least $60,000 and an annual income of at least $60,000.

6. Michigan -- Net worth of at least $225,000 or a net worth of at
least $60,000 and taxable income in 1995 of at least $60,000.

7. Minnesota -- "ACCREDITED INVESTORS", AS DEFINED IN RULE 501(A)
UNDER THE SECURITIES ACT OF 1933.

8. Mississippi -- Net worth of at least $225,000 or a net worth of
at least $60,000 and an annual income of at least $60,000.

9. Missouri -- Net worth of at least $225,000 or a net worth of at
least $60,000 and an annual income of at least $60,000.

10. New Hampshire -- Net worth of at least $250,000 or a net worth of
at least $125,000 and an annual income of at least $50,000.

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<PAGE>

11. North Carolina -- Net worth of at least $225,000 or a net worth
of at least $60,000 and an annual income of at least $60,000.

12. Oklahoma -- Net worth of at least $225,000 or a net worth of
$60,000 and an annual income of at least $60,000.

13. Oregon -- Net worth of at least $225,000 or a net worth of at
least $60,000 and an annual taxable income of at least $60,000.

14. Pennsylvania -- Net worth of a least $175,000 or a net worth of
at least $100,000 and an annual taxable income of at least $50,000.

15. South Carolina -- Net worth of at least $100,000 or a net income
in 1995 some portion of which was subject to maximum federal and state income
tax.

16. Tennessee -- Net worth of at least $225,000 or a net worth of at
least $60,000 and an annual taxable income of at least $60,000.

17. Texas -- Net worth of at least $225,000 or a net worth of at
least $60,000 and an annual taxable income of at least $60,000.

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<PAGE>

EXHIBIT C
KENMAR GLOBAL TRUST

__________________

SUBSCRIPTION INSTRUCTIONS

ANY PERSON CONSIDERING PURCHASING UNITS SHOULD CAREFULLY READ AND
REVIEW THE PROSPECTUS OF THE TRUST DATED SEPTEMBER 26, 1997, together with the
summary financial information relating to the Trust current within 60 calendar
days which accompanied the Prospectus.

THE UNITS ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK. NO
PERSON MAY INVEST MORE THAN 10% OF HIS OR HER READILY MARKETABLE ASSETS IN THE
TRUST.

EXISTING UNITHOLDERS WHO ARE SUBSCRIBING FOR ADDITIONAL UNITS SHOULD
CHECK ITEM 1(B) AND FOLLOW THE INSTRUCTIONS INDICATED, INCLUDING INITIALING AND
SIGNING WHERE APPROPRIATE, AND MUST RECEIVE A CURRENT PROSPECTUS FOR THE TRUST
AND CAREFULLY REVIEW THE SUBSCRIPTION AGREEMENT AND POWER OF ATTORNEY AS WELL AS
EXHIBIT B -- SUBSCRIPTION REQUIREMENTS. SUCH UNITHOLDERS' SELLING AGENT
REPRESENTATIVES MUST RECONFIRM BY COMPLETING ITEM 6 THAT SUCH UNITHOLDERS
CONTINUE TO MEET THE STANDARDS AND REQUIREMENTS SET FORTH HEREIN AND IN EXHIBIT
B -- SUBSCRIPTION REQUIREMENTS IN ORDER FOR SUCH UNITHOLDERS TO BE ELIGIBLE TO
PURCHASE ADDITIONAL UNITS.

TYPE OR PRINT USING BLACK INK ONLY, AS FOLLOWS (PRESS FIRMLY):

Item 1 -- Enter appropriate subscriber status (new or existing)

Item 2 -- Enter the subscription amount.

Item 3 -- Check the appropriate category identifying type of Purchaser.

Item 4 -- Enter the exact name in which the Units are to be held. Enter
basic Purchaser information, including the Social Security Number
or Taxpayer ID Number.

The Signature Page is self-explanatory for most types of investors;
however, we have provided specific instructions for the following types of
investors:

TRUST -- Enter the Trust name and the trustee's name, followed by
"Trustee." If applicable, enter the custodian's name, followed by "Custodian."
BE SURE TO FURNISH THE TAXPAYER ID NUMBER OF THE TRUST.

CUSTODIAN UNDER UNIFORM GIFTS TO MINORS ACT -- Complete Item 4 with
the name of minor followed by "UGMA." Enter the custodian's name, followed by
"Custodian." BE SURE TO FURNISH THE MINOR'S SOCIAL SECURITY NUMBER.

PARTNERSHIP OR CORPORATION -- The Partnership or Corporation name is
required. Also, enter an officer's or partner's name. BE SURE TO FURNISH THE
TAXPAYER ID NUMBER OF THE PARTNERSHIP OR CORPORATION.

Special Note: Trust agreements, corporate papers and other appropriate
documents may be required for selling agent approval.

Item 5 -- The investor(s) must execute the Subscription Agreement and Power
of Attorney Signature Page (Item 5) and review the representation
relating to backup withholding tax underneath the signature and
telephone number lines. The investor(s) must initial EACH of the
FOUR (4) paragraphs under "ACKNOWLEDGMENTS BY PURCHASER."

Item 6 -- Selling Agent representatives must complete the information
required and sign in two places.

Instructions to Selling Agent representatives:

THE EXECUTED SUBSCRIPTION AGREEMENT AND POWER OF ATTORNEY SIGNATURE PAGE MUST BE
RETAINED IN THE BRANCH OFFICE. REMAINING COPIES SHOULD BE FORWARDED TO A) THE
APPROPRIATE DEPARTMENT OF THE SELLING AGENT IF REQUIRED OR B) DERIVATIVES
PORTFOLIO MANAGEMENT L.L.C., TWO WORLDS FAIR DRIVE, P.O. BOX 6741, SOMERSET, NEW
JERSEY 08875-6741, ATTN: FUND ADMINISTRATOR-KGT. PHONE -- (732) 560-6221.

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<PAGE>

KENMAR GLOBAL TRUST

UNITS OF BENEFICIAL INTEREST

____________________

BY EXECUTING THIS SUBSCRIPTION AGREEMENT AND POWER OF ATTORNEY
SUBSCRIBERS ARE NOT WAIVING ANY RIGHTS UNDER THE SECURITIES ACT
OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934
____________________

SUBSCRIPTION AGREEMENT AND
POWER OF ATTORNEY

KENMAR GLOBAL TRUST
c/o Kenmar Advisory Corp.
Managing Owner
Two American Lane
Greenwich, Connecticut 06831-8150

Dear Sirs:

1. SUBSCRIPTION FOR UNITS. I hereby subscribe for the number of
units of beneficial interest ("Units") in Kenmar Global Trust (the "Trust") set
forth in the Subscription Agreement and Power of Attorney Signature Page
attached hereto; a minimum of 50 Units (or, if less, $5,000) must be
purchased -- 20 Units (or, if less, $2,000) for both: (i) trustees or
custodians of eligible employee benefit plans and individual retirement
accounts; and (ii) existing Unitholders (all existing Unitholders are required
to submit a new Subscription Agreement and Power of Attorney in order to acquire
additional Units). Any greater number of Units may be purchased in $100
increments. The purchase price is 100% of the Net Asset Value per Unit . The
terms of the offering of the Units are described in the Prospectus of the Trust
dated September 26, 1997 (the "Prospectus"), as the same may be from time to
time supplemented and amended. Units are offered as of the beginning of each
calendar month (until such time as the offering is discontinued). The
settlement date for my purchase of Units will be not more than five business
days after the purchase date of my Units, which will occur as of the first day
of the calendar month immediately following the month during which my
subscription is accepted. I understand that all investors will have the right
to revoke their subscriptions, and receive a refund of their invested funds, for
a period of five business days following receipt of the Prospectus. Kenmar
Advisory Corp. ("Kenmar"), the Managing Owner of the Trust, may, in its sole and
absolute discretion, accept or reject this subscription in whole or in part,
except that, if this subscription is to be accepted in part only, it shall not
be reduced to an amount less than 50 Units (or, if less, $5,000); 20 Units (or,
if less, $2,000) in the case of persons permitted to purchase such lesser
minimum, as described above. EXCEPT AS OTHERWISE SET FORTH HEREIN, ALL
SUBSCRIPTIONS ONCE SUBMITTED ARE IRREVOCABLE. ALL UNITS ARE OFFERED SUBJECT TO
PRIOR SALE.

2. REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER. I have received
the Prospectus together with summary financial information relating to the Trust
current within 60 calendar days. I understand that by submitting this
Subscription Agreement and Power of Attorney I am making the representations and
warranties set forth in Exhibit B (Subscription Requirements in the
Prospectus), including, without limitation, those representations and warranties
relating to my net worth (exclusive of home, furnishings and automobiles) and
annual income.

3. POWER OF ATTORNEY. In connection with my subscription for
Units, I do hereby irrevocably constitute and appoint Kenmar, and its successors
and assigns, as my true and lawful Attorney-in-Fact, with full power of
substitution, in my name, place and stead, to (i) file, prosecute, defend,
settle or compromise litigation, claims or arbitrations on behalf of the Trust
and (ii) make, execute, sign, acknowledge, swear to, deliver, record and file
any documents or instruments which may be considered necessary or desirable by
Kenmar to carry out fully the provisions of the Declaration of Trust and Trust
Agreement of the Trust, including, without limitation, by executing said
Declaration of Trust and Trust Agreement itself, and by effecting all amendments
permitted by the terms thereof. I acknowledge that the other investors in the
Trust are relying on Kenmar's authority to act pursuant to the Power of Attorney
granted hereby. The Power of

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<PAGE>

Attorney granted hereby shall be deemed to be coupled with an interest and shall
be irrevocable and shall survive, and shall not be affected by, my subsequent
death, incapacity, disability, insolvency or dissolution or any delivery by me
of an assignment of the whole or any portion of my Units.

4. IRREVOCABILITY; GOVERNING LAW. I hereby acknowledge and agree
that I am not entitled to cancel, terminate or revoke this subscription or any
of my agreements hereunder after the Subscription Agreement and Power of
Attorney Signature Page attached hereto has been submitted (and not rejected),
and that this subscription and such agreements shall survive my death or
disability. This Subscription Agreement and Power of Attorney shall be governed
by and interpreted in accordance with the laws of the State of Delaware without
regard to principles of conflicts of law.

5. ERISA. If the undersigned is acting on behalf of an "employee
benefit plan," as defined in and subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or any "plan," as defined in Section
4975 of the Internal Revenue Code of 1986, as amended (the "Code") (each such
employee benefit plan and plan, a "Plan"), the individual signing this
Subscription Agreement and Power of Attorney on behalf of the undersigned,
understands, as or on behalf of the fiduciary of the Plan responsible for
purchasing the Units (the "Plan Fiduciary") that: (a) the Plan Fiduciary has
considered an investment in the Trust for such Plan in light of the risks
relating thereto; (b) the Plan Fiduciary has determined that, in view of such
considerations, the investment in the Trust for such Plan is consistent with the
Plan Fiduciary's responsibilities under ERISA; (c) the Plan's investment in the
Trust does not violate and is not otherwise inconsistent with the terms of any
legal document constituting the Plan or any trust agreement thereunder; (d) the
Plan's investment in the Trust has been duly authorized and approved by all
necessary parties; (e) none of Kenmar, any Advisor to the Trust, the Selling
Agents, any Clearing Broker, the Escrow Agent, any broker through which any
Advisor requires the Trust to trade, the Trustee, any of their respective
affiliates or any of their respective agents or employees (i) has investment
discretion with respect to the investment of assets of the Plan used to purchase
Units, (ii) has authority or responsibility to or regularly gives investment
advice with respect to the assets of the Plan used to purchase Units for a fee
and pursuant to an agreement or understanding that such advice will serve as a
primary basis for investment decisions with respect to the Plan and that such
advice will be based on the particular investment needs of the Plan, or (iii) is
an employer maintaining or contributing to the Plan; and (f) the Plan Fiduciary
(i) is authorized to make, and is responsible for, the decision to invest in the
Trust, including the determination that such investment is consistent with the
requirement imposed by Section 404 of ERISA that Plan investments be diversified
so as to minimize the risk of large losses, (ii) is independent of Kenmar, any
Advisor to the Trust, any Selling Agent, any Commodity Broker and any of their
respective affiliates, and (iii) is qualified to make such investment decision.
The undersigned understands that Kenmar may request that the undersigned furnish
Kenmar with such information as Kenmar may reasonably require to establish that
the purchase of Units by the Plan does not violate any provision of ERISA or the
Code, including, without limitation, those provisions relating to "prohibited
transactions" by "parties in interest" or "disqualified persons," as defined
therein.

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<PAGE>

SUBSCRIPTION AGREEMENT AND POWER OF ATTORNEY
(SIGNATURE PAGE)

1. SUBSCRIBER STATUS (check)

(a) / / New Subscriber(s) -- complete items 1 through 5 and have
Selling Agent representative or branch
manager complete item 6.

(b) / / Existing Owner(s) -- complete items 1, 2, 3, 4(a) and 5 and
have Selling Agent representative or
branch manager complete item 6.

2. SUBSCRIPTION AMOUNT

Check Enclosed Payable to Kenmar Global Trust $_________, min. $5,000
except $2,000 for IRAs/ERISA or Existing Investors
Wire Transfer to Follow $__________
Selling Agent Account No.: _____________________________________

/ / The Purchaser hereby authorizes the Selling Agent shown above to debit
its customer account in the full amount of its subscription five (5)
business days prior to the Monthly Closing.

3. NATURE OF PURCHASER.

Taxable Investors (check one):

/ / Individual Ownership / / Trust other than a Grantor or
Revocable Trust

/ / Joint Tenants with Right of / / Estate / / UGMA/UTMA (Minor)
Survivorship

/ / Tenants in Common / / Partnership / / Corporation

/ / Grantor or Other Revocable Trust

/ / Community Property

Non-taxable Investors (check one):
NOTE: Please indicate name and address of Custodian or Trustee in 4(c)
below.

/ / IRA / / Profit Sharing

/ / IRA Rollover / / Defined Benefit

/ / Pension / / Other (specify)

/ / SEP

4. BASIC INFORMATION.

(a) Full name of account as it should appear in our records:

______________________________________________________________________

Bus. Tel. No: __________________ Res. Tel. No.: ___________________
Social Security No. or Tax I.D. No.: ________________________________

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<PAGE>

SUBSCRIPTION AGREEMENT AND POWER OF ATTORNEY
(SIGNATURE PAGE--CONTINUED)

Custodian Taxpayer I.D. No. (for IRAs only): _________________________

(b) Primary Residence: __________________________________________________

______________________________________________________________________

Mailing Address if Different: _______________________________________

______________________________________________________________________

5. ACKNOWLEDGMENTS BY PURCHASER [PLEASE INITIAL, AS APPLICABLE.]

_______ I/(We) have received the Prospectus dated September 26, 1997 (the
initial "Prospectus"), including the Declaration and Agreement of Trust,
the Subscription Requirements and the Subscription Agreement and
Power of Attorney set forth therein, the terms of which govern the
investment in the Units being subscribed for hereby, together with,
if applicable, recent Account Statements relating to the Trust
(current within 60 calendar days) and the TRUST'S most recent Annual
Report (unless the information in such Annual Report has been
included in this Prospectus by amendment or supplement).

_______ I(We) meet the minimum income and net worth standards established for
initial the Trust as set forth in Exhibit B to the Prospectus.

_______ I(We) am (are) purchasing Units for my (our) own account.
initial

_______ If this investment is for a qualified employee benefit plan, an
initial individual retirement account or other tax-exempt initialinvestor, in
making this investment on behalf of each entity, I(we) have satisfied
myself (ourselves) as to the potential tax consequences of this
investment.

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<PAGE>

SUBSCRIPTION AGREEMENT AND POWER OF ATTORNEY
(SIGNATURE PAGE--Continued)

KENMAR WILL ATTEMPT TO VERIFY THAT ANY ENTITY WHICH SEEKS TO PURCHASE UNITS
IS DULY REGISTERED WITH THE CFTC AND A MEMBER OF THE NFA, IF REQUIRED.
PURCHASER AGREES TO SUPPLY KENMAR WITH SUCH INFORMATION AS KENMAR MAY
REASONABLY REQUEST IN ORDER TO ATTEMPT SUCH VERIFICATION. MOST ENTITIES
WHICH ACQUIRE UNITS WILL, AS A RESULT, THEMSELVES BECOME "COMMODITY POOLS"
WITHIN THE INTENT OF APPLICABLE CFTC AND NFA RULES, AND THEIR SPONSORS,
ACCORDINGLY, MAY BE REQUIRED TO REGISTER AS "COMMODITY POOL OPERATORS."

SIGNATURE OF PURCHASER
FOR USE BY INVESTOR

X__________________________________ X__________________________________
Signature of Purchaser Date Custodian Authorization Date
and Title, if applicable (if applicable)

X___________________________________
Signature of Joint Purchaser Date

EXECUTING AND DELIVERING THIS SUBSCRIPTION AGREEMENT AND POWER OF ATTORNEY
SIGNATURE PAGE SHALL IN NO RESPECT BE DEEMED TO CONSTITUTE A WAIVER OF ANY
RIGHTS UNDER THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES EXCHANGE
ACT OF 1934. I ACKNOWLEDGE THAT I HAVE RECEIVED, IN ADDITION TO THE
PROSPECTUS DATED SEPTEMBER 26, 1997, SUMMARY FINANCIAL INFORMATION RELATING
TO THE TRUST CURRENT WITHIN 60 CALENDAR DAYS (AFTER THE TRUST BEGINS
OPERATING).

I have checked the following box if I am subject to backup withholding
under the provisions of Section 3406(a)(1)(C) of the Internal Revenue Code:
/ /. Under the penalties of perjury, by signature above I hereby certify
that the Social Security Number or Taxpayer ID Number shown on the front of
this Subscription Agreement and Power of Attorney Signature Page next to my
name is my true, correct and complete Social Security Number or Taxpayer ID
Number and that the information given in the immediately preceding sentence
is true, correct and complete.

6. SELLING AGENT INFORMATION

Name of Registered Representative: _______________________________________

Name of Selling Agent:__________________ PHONE:____________________________

Address:___________________________________________________________________
CITY: STATE: ZIP CODE:

I have reasonable grounds to believe, based on information obtained from
the investor concerning his/her investment objectives, other investments,
financial situation and needs and any other information known by me, that
investment in the Trust is suitable for such investor in light of his/her
financial position, net worth and other suitability characteristics. I
have also informed the investor of the unlikelihood of a public trading
market developing for the Units.

The Selling Agent Representatives MUST sign below in order to substantiate
compliance with NASD's Conduct Rule 2810.

X_______________________________________________________________________________
Selling Agent Representative Signature Date

X_______________________________________________________________________________
Office Manager Signature Date

SA-5