SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly report pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 1998
Commission File Number 333-16825
JWH GLOBAL TRUST
(Exact name of registrant as specified in its charter)
Delaware 36-4113382
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
233 South Wacker Drive, Suite 2300, Chicago, Illinois 60606
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 460-4000
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
<TABLE>
Part I. Financial Information
Item 1. Financial Statements
Following are Financial Statements for the fiscal quarter ended June 30, 1998,
and the additional time frames as noted:
Fiscal Quarter Year to Date Fiscal Year Fiscal Quarter Year to Date
Ended 6/30/98 To 6/30/98 Ended 12/31/97 Ended 6/30/97 To 6/30/97
-------------- -------------- -------------- --------------------------
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Statement of
Financial Condition X X
Statement of
Operations X X x x
Statement of Changes
in Partners' Capital X
Statement of
Cash Flows X x
Notes to Financial
Statements X
JWH GLOBAL TRUST
STATEMENTS OF FINANCIAL CONDITION
UNAUDITED
Jun 30, 1998 Dec 31, 1997
--------------- -------------
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ASSETS
Cash $3,598,743 $4,109,623
Equity in commodity futures
trading accounts:
Account balance 79,700,472 56,278,134
Unrealized gain on open futures
and forwards contracts (2,240,801) 4,481,153
--------------- -------------
81,058,413 64,868,910
Interest receivable 308,479 240,745
Prepaid Initial O&O 517,675 583,762
--------------- -------------
Total assets $81,884,568 $65,693,417
=============== =============
LIABILITIES AND UNITHOLDERS' CAPITAL
Liabilities:
Accrued commissions due to CIS $419,517 $330,854
Accrued management fee 260,730 205,109
Accrued incentive fee 0 656,583
Accrued operating expenses 43,731 93,023
Redemptions payable 706,992 31,195
Selling and Offering Expenses Payable 32,322 25,129
--------------- -------------
Total liabilities 1,463,292 1,341,893
Unitholders' Capital:
Beneficial owners ( 802,157.51 units outstandi 79,586,803 63,702,878
at 6/30/98, 580,678.76 units outstanding at 12/31/97)
(see Note 1)
Managing owner (8,410.68 units outstanding at 834,473 648,646
6/30/98 and 5,912.68 at 12/31/97) (see Note 1)
--------------- -------------
Total unitholders' capital 80,421,276 64,351,524
--------------- -------------
Total liabilities and
unitholders' capital $81,884,568 $65,693,417
=============== =============
This Statement of Financial Condition, in the opinion of management, reflects all adjustments necessary
to fairly state the financial condition of JWH Global Trust. (See Note 6)
JWH GLOBAL TRUST
STATEMENTS OF OPERATIONS
UNAUDITED
Apr 1, 1998 Jan 1, 1998 Jun 2, 1997* Jun 2, 1997*
through through through through
Jun 30, 1998 Jun 30, 1998 Jun 30, 1997 Jun 30, 1997
--------------- ------------- -------------- -------------
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REVENUES
Gains on trading of commodity futures
and forwards contracts, physical
commodities and related options:
Realized gain (loss) on closed positions $3,588,449 $2,473,244 ($458,844) ($458,844)
Change in unrealized gain (loss)
on open positions (4,313,036) (6,721,955) 551,773 551,773
Interest income 883,702 1,687,093 56,200 56,200
Foreign currency transaction gain (loss) (159,517) (299,042) 8,004 8,004
--------------- ------------- -------------- -------------
Total revenues (402) (2,860,660) 157,133 157,133
EXPENSES
Commissions paid to CIS 978,530 1,837,937 70,808 70,808
Exchange fees 11,463 24,400 413 413
Management fees 755,678 1,421,438 43,858 43,858
Incentive fees 0 0 6,507 6,507
Organization & Offering Expenses 126,725 242,233 0 0
Operating expenses 204,246 426,947 15,251 15,251
--------------- ------------- -------------- -------------
Total expenses 2,076,641 3,952,955 136,836 136,836
--------------- ------------- -------------- -------------
Net profit (loss) ($2,077,043) ($6,813,614) $20,296 $20,296
=============== ============= ============== =============
PROFIT (LOSS) PER UNIT OF
OWNERSHIP INTEREST ($2.98) ($10.48) $0.16 $0.16
=============== ============= ============== =============
(see Note 1) (see Note 1) (see Note 1) (see Note 1)
* Commencement of Operations was June 2, 1997
This Statement of Operations, in the opinion of management, reflects all adjustments
necessary to fairly state the financial condition of JWH Global Trust. (See Note 6)
JWH GLOBAL TRUST
STATEMENTS OF CHANGES IN UNITHOLDERS' CAPITAL
From January 1, 1998 through June 30, 1998
UNAUDITED
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Additional Units Sold Beneficial Managing
(see Note 1) Units* Owners Owner Total
--------------- ------------- -------------- -------------
Unitholders' capital at January 1, 1998 580,678.76 $63,702,878 $648,646 $64,351,524
Additional Units Sold 244,093.36 24,923,102 255,000 25,178,102
(see Note 1)
Net profit (loss) (6,744,442) (69,173) (6,813,615)
Redemptions (see Note 1) (22,614.61) (2,294,736) (2,294,736)
--------------- ------------- -------------- -------------
Unitholders' capital at June 30, 1998 802,157.51 $79,586,803 $834,473 $80,421,276
=============== ============= ============== =============
Net asset value per unit
January 1, 1998 (see Note 1) 109.70 109.70
Net profit (loss) per unit (see Note 1) (10.48) (10.48)
------------- --------------
Net asset value per unit
June 30, 1998 $99.22 $99.22
* Units of Beneficial Ownership.
This Statement of Changes in Unitholders' Capital, in the opinion of management, reflects all adjustments
necessary to fairly state the financial condition of JWH Global Trust. (See Note 6)
JWH GLOBAL TRUST
STATEMENTS OF CASH FLOWS
UNAUDITED
Jan 1, 1998 Jan 1, 1997
through through
Jun 30, 1998 Jun 30, 1997
--------------- -------------
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Cash flows from operating activities:
Net profit (loss) ($6,813,614) $20,296
Adjustments to reconcile net profit
(loss) to net cash provided by
(used in) operating activities:
Change in assets and liabilities:
(Increase) decrease in receivable for units 510,880 0
Unrealized gain (loss) on open
futures contracts 6,721,954 (551,773)
Interest receivable (67,734) (52,560)
Prepaid Organization and Offering Expenses 66,087 (645,648)
Accrued liabilities (561,591) 126,632
Redemptions payable 675,797 845,153
Selling and Offering Expenses Payable 7,193 655,441
--------------- -------------
Net cash provided by (used in)
operating activities 538,971 397,540
Cash flows from financing activities:
Additional Units Sold 25,178,102 22,451,280
Unitholder redemptions (2,294,736) (846,153)
--------------- -------------
Net cash provided by (used in)
financing activities 22,883,368 21,605,127
--------------- -------------
Net increase (decrease) in cash 23,422,338 22,002,667
Cash at beginning of period 56,278,134 1,000
--------------- -------------
Cash at end of period $79,700,472 $22,003,667
=============== =============
* Commencement of Operations was June 2, 1997
This Statement of Cash Flows, in the opinion of management, reflects all adjustments
necessary to fairly state the financial condition of JWH Global Trust. (See Note 6)
</TABLE>
JWH GLOBAL TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
(1) GENERAL INFORMATION AND SUMMARY
JWH Global Trust (the "Trust") is a Delaware business trust organized on
November 12, 1996 under the Delaware Business Trust Act. The business of
the Trust is the speculative trading of commodity interests, including
futures contracts on currencies, interest rates, energy and agricultural
products, metals and stock indices, options on such futures contracts, and
spot and forward contracts on currencies and precious metals ("Commodity
Interests") pursuant to the trading instructions of an independent trading
advisor. The managing owner of the Trust is CIS Investments, Inc., a
Delaware corporation organized in June 1983 (the "Managing Owner"). The
Managing Owner is registered as a commodity pool operator under the Commodity
Exchange Act, as amended, and is responsible for administering the business
and affairs of the Trust exclusive of trading decisions. The Managing Owner
is an affiliate of Cargill Investor Services, Inc., the clearing broker for
the Trust (the "Clearing Broker") and CIS Financial Services, Inc., which
acts as the Trust's currency dealer ("CISFS"). Trading decisions for the
Trust were made by an independent commodity trading advisor, John W. Henry
& Company, Inc.
The initial public offering of the Trust's units of beneficial interest
("Units") commenced on April 3, 1997 and concluded on September 23, 1997.
The initial offering price was $100 per Unit until the initial closing of
the Trust, and thereafter at the current Net Asset Value of the Trust on
the last business day of the calendar month. The total amount of the initial
offering was $50,000,000. On September 24, 1997, a registration statement
was declared effective with the SEC to register $155,000,000 of additional
Units. The Units were offered pursuant to a Prospectus dated September 26,
1997 until June 25, 1998. On June 26, 1998, an amendment to the registration
statement was declared effective with the SEC and the Units are currently
offered pursuant to a Prospectus dated June 26, 1998. A Post-Effective
Amendment was declared effective with the SEC on October 20, 1997 to
deregister $3,120,048.99 of Units which remained unsold upon the termination
of the initial offering of the Units. As a result of the Units being offered
at each month-end Net Asset Value, the total number of Units authorized for
the Trust is not determinable and therefore is not disclosed in the financial
statements.
The initial closing of the Trust was on May 30, 1997 and the Trust commenced
trading on June 2, 1997. The initial Beneficial Owners of the Trust,
representing ownership of $1,000, were redeemed on May 30, 1997, prior to
the commencement of trading.
The minimum subscription size for the offering is $5,000 for individuals
and $2,000 for trustees or custodians of eligible employee benefit plans
and individual retirement accounts (subject to higher minimums in certain
States); and $1,000 for existing investors in the Trust (the "Unitholders").
By June 30, 1998, a total of 824,772.12 Units were sold to Beneficial Owners
of the Trust for an investment of $85,013,379 and 8,410.68 Units were sold
to the Managing Owner of the Trust for an investment of $865,000, resulting
in a total of 833,182.77 Units representing a total investment of $85,878,379
being sold in the offering period commencing April 3, 1997.
The Managing Owner of the Trust advanced organization and offering costs of
$650,000. The Trust reimbursed the Managing Owner for these costs. The
Trust is amortizing these costs over 60 months.
The Trust shall terminate on December 31, 2026 if none of the following
occur prior to that date: (1) investors holding more than 50 percent of the
outstanding Units notify the Managing Owner to dissolve the Trust as of a
specific date; (2) withdrawal, insolvency, bankruptcy, retirement,
resignation, expulsion or dissolution of the Managing Owner of the Trust;
(3)bankruptcy or insolvency of the Trust; (4) decline in the aggregate Net
Assets of the Trust to less than $2,500,000; (5) decline in the Net Asset
Value per Unit to $50 or less; (6) dissolution of the Trust pursuant to the
Third Amended and Restated Declaration and Agreement of Trust; or (7) any
other event which shall make it unlawful for the existence of the Trust to
be continued or require dissolution of the Trust. The Trust's Third Amended
and Restated Declaration and Agreement of Trust contains a full description
of the Trust's term and dissolution procedures.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting and reporting policies of the Trust conform to generally
accepted accounting principles and to general practices within the
commodities industry. The following is a description of the more
significant of those policies which the Trust follows in preparing its
financial statements.
Revenue Recognition
Commodity futures contracts, forward contracts, and physical commodities
are recorded on the trade date. All such transactions are reported on an
identified cost basis. Unrealized gains and losses reflected in the
statements of financial condition represent the difference between original
contract amount and market value (as determined by exchange settlement
prices for futures contracts and cash dealer prices at a predetermined time
for forward contracts and physical commodities) as of the last business day
of the quarter-end.
The Trust earns interest on its assets on deposit with CIS and CISFS at 100%
of the 91-day Treasury bill rate for deposits denominated in dollars, and at
the rates agreed between the Trust and CIS and CISFS for deposits denominated
in other currencies.
Redemptions
A beneficial owner may cause any or all of his or her units to be redeemed
by the Trust effective as of the last trading day of any month of the Trust
based on the Net Asset Value per unit on five days' written notice to the
Managing Owner. Payment will be made within 10 business days of the
effective date of the redemption. Any redemption made during the first 11
months of investment is subject to a 3% redemption penalty. Any redemption
made in the 12th month of investment or later will not be subject to any
penalty. The Trust's Amended and Restated Declaration and Agreement of
Trust contains a full description of redemption and distribution policies.
Commissions
Commodity brokerage commissions are typically paid for each trade transacted
and are referred to as "round-turn commissions". These commissions cover
both the initial purchase (or sale) and the subsequent offsetting sale
(or purchase) of a commodity futures contract. The Trust does not pay
commodity brokerage commissions on a per-trade basis, but rather pays monthly
flat-rate Brokerage Fees at the annual rate of 6.5% (or a monthly rate of
approximately 0.542%) of the Trust's month-end assets after reduction of the
Management Fee. CIS receives these Brokerage Fees irrespective of the number
of trades executed on the Trust's behalf.
Certain large investors are eligible for a "Special Brokerage Rate" of 5%
per year.
Foreign Currency Transactions
Trading accounts in foreign currency denominations are susceptible to both
movements on underlying contract markets as well as fluctuation in currency
rates. Translation of foreign currencies into U.S. dollars for closed
positions are translated at an average exchange rate for the quarter, while
quarter-end balances are translated at the quarter-end currency rates. The
impact of the translation is reflected in the statement of operations.
Statements of Cash Flows
For purposes of the statements of cash flows, cash includes cash on deposit
with the Clearing Broker in the equity in commodity futures trading accounts.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increase and decrease in net assets
from operations during the period. Actual results could differ from those
estimates.
(3) FEES
Management fees are accrued and paid monthly and incentive fees are accrued
monthly and paid quarterly. Trading decisions for the period of these
financial statements were made by John W. Henry & Company, Inc. ("JWH")
utilizing two of its trading programs, the Original Investment Program and
the Financial and Metals Portfolio.
Under signed agreement, JWH receives a monthly management fee of 1/12 of 4%
of the Trust's month-end assets after deduction of a portion of the Brokerage
Fee at the annual rate of 1.25% (rather than 6.5%) of month-end Trust assets
but before deduction of any management fees, redemptions, distributions, or
incentive fee accrued or payable as of the relevant month-end.
In addition, the Trust pays to JWH a quarterly incentive fee equal to 15% of
the new trading profits of the Trust. The incentive fee is based on the
overall performance of the Trust, not individually in respect of the
performance of the individual programs utilized by the Trust. This fee is
also calculated by deducting Brokerage Fee at a rate of 1.25% (rather than
the 6.5% rate).
(4) INCOME TAXES
No provision for Federal income taxes has been made in the accompanying
financial statements as each beneficial owner is responsible for reporting
income (loss) based on the pro rata share of the profits or losses of the
Trust. Generally, for both Federal and State tax purposes, trusts such as
JWH Global Trust are treated as partnerships. The Trust is responsible for
the Illinois State Partnership Information and Replacement Tax based on the
operating results of the Trust. Such tax amounted to $0 and $458 for the
periods ended June 30, 1998 and June 30, 1997 and is included in operating
expenses in the Statement of Operations.
(5) FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
The Trust was formed to speculatively trade Commodity Interests. The
Trust's commodity interest transactions and its related cash balance are on
deposit with the Clearing Broker or the Forwards Currency Broker (the
"Brokers") at all times. In the event that volatility of trading of other
customers of the Brokers impaired the ability of the Brokers to satisfy the
obligations to the Trust, the Trust would be exposed to off-balance sheet
risk. Such risk is defined in Statement of Financial Accounting Standards
No. 105 ("SFAS 105") as a credit risk. To mitigate this risk, the Clearing
Broker, pursuant to the mandates of the Commodity Exchange Act, is required
to maintain funds deposited by customers relating to futures contracts in
regulated commodities in separate bank accounts which are designated as
segregated customers' accounts. In addition, the Clearing Broker has set
aside funds deposited by customers relating to foreign futures and options
in separate bank accounts which are designated as customer secured accounts.
Lastly, the Clearing Broker is subject to the Securities and Exchange
Commission's Uniform Net Capital Rule which requires the maintenance of
minimum net capital of at least 4% of the funds required to be segregated
pursuant to the Commodity Exchange Act. The Clearing Broker and Forwards
Currency Broker both have controls in place to make certain that all
customers maintain adequate margin deposits for the positions which they
maintain at each Broker. Such procedures should protect the Trust from the
off-balance sheet risk as mentioned earlier. Neither the Clearing Broker nor
the Forwards Currency Broker engage in proprietary trading and thus has no
direct market exposure.
The counterparty of the Trust for futures contracts traded in the United
States and most non-U.S. exchanges on which the Trust trades is the Clearing
House associated with the exchange. In general, Clearing Houses are backed
by their membership and will act in the event of non-performance by one of
their members or one of the members' customers and as such should
significantly reduce this credit risk. In cases where the Trust trades on
exchanges on which the Clearing House is not backed by the exchange
membership, the sole recourse of the Trust for non-performance will be the
Clearing House. The Forwards Currency Broker is the counterparty for the
Trust's forward transactions. CISFS policies require that they execute
transactions only with top rated financial institutions with assets in excess
of $100,000,000.
The Trust holds futures positions on the various exchanges throughout the
world and forwards positions with CISFS which transacts with various top
rated banks throughout the world. As defined by SFAS 105, futures and
forward currency contracts are classified as financial instruments. SFAS
105 requires that the Trust disclose the market risk of loss from all of its
financial instruments. Market risk is defined as the possibility that
future changes in market prices may make a financial instrument less
valuable or more onerous. If the markets should move against all of the
futures and forwards positions of the Trust at the same time (both long
positions and short positions), and if the markets moved such that the CTA
was unable to offset the futures positions of the Trust, the Trust could
lose all of its assets and the Beneficial Owners would realize a 100% loss.
The Trust utilizes two of the trading programs of the CTA. One trading
program is diversified among all commodity groups, while the other is
diversified among the various futures contracts and forwards contracts in
the financials and metals group. Both programs trade in the U.S. and
outside of the U.S. Such diversification should greatly reduce this market
risk.
The margin requirement at June 30, 1998 was $14,531,595. To meet this
requirement, the Trust had on deposit with the Clearing Broker $65,648,692
in segregated funds, $6,651,994 in secured funds and $5,158,985 in
non-regulated funds. At June 30, 1998, cash was on deposit with the
Clearing Broker and the Forwards Currency Broker which exceeded the cash
requirement amount.
The following chart discloses the dollar amount of the unrealized gain or
loss on open contracts related to Commodity Interests for the Trust as of
June 30, 1998:
COMMODITY GROUP UNREALIZED GAIN/(LOSS)
AGRICULTURAL COMMODITIES 837,129
FOREIGN CURRENCIES (3,705,100)
STOCK INDICES (362,230)
ENERGIES 538,340
METALS (582,288)
INTEREST RATE INSTRUMENTS 1,033,348
_________
TOTAL (2,240,801)
The range of maturity dates of these exchange traded open contracts is July
of 1998 to June of 1999. The average open trade equity for the period of
January 1, 1998 to June 30, 1998 is $2,694,929.
(6) FINANCIAL STATEMENT PREPARATION
The interim financial statements are unaudited but reflect all adjustments
that are, in the opinion of management, necessary for a fair statement of
the results for the interim periods presented. These adjustments consist
primarily of normal recurring accruals. These interim financial statements
should be read in conjunction with the audited financial statements of
the Trust for the year ended December 31, 1997, as filed with the Securities
and Exchange Commission on March 30, 1998, as part of its Annual Report on
Form 10-K.
The results of operations for interim periods are not necessarily indicative
of the operating results to be expected for the fiscal year.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operation
Fiscal Quarter ended June 30, 1998
The Trust recorded a loss of $2,077,043 or $2.98 per Unit for the second
quarter of 1998. This compares to a gain of $20,296.37 or $0.16 per Unit
for the second quarter of 1997.
During the first and third months of the quarter, the Trust experienced
losses primarily as a result of unprofitable positions in currencies,
interest rates and metals, while during the second month gains were recorded
primarily due to gains in the currency, interest rate, metals and energy
markets. At June 30, 1998, John W. Henry & Company, Inc. was managing 100%
of the Trust's assets in two trading programs, the Original Investment
Program and the Financial and Metals Portfolio.
In April, positions in nearly all markets traded were unprofitable.
Positions in the U.S. 30-year bond and Euro dollar markets resulted in
losses for interest rate futures. Unprofitable positions in the German mark
and Swiss franc offset gains in other currencies traded. Silver prices fell
following reports that a major investment company had sold a third of its
holdings. Losses in silver and copper offset profits in gold. Sugar prices
fell to a five-year low on prospects of a large Brazilian crop. Positions
in sugar resulted in profits as did positions in coffee, wheat, corn and
soybean oil. The Trust recorded a loss of $3,358,004 or $4.68 per Unit in
April.
In May gains were recorded reflecting profitable positions in interest rates,
metals, energies and currencies. The strongest gains overall came from
positions in the Japanese yen, Japanese Government bond, silver and crude
oil. Silver prices slumped as investors who bought on hopes of rising value
lost patience and took profits. Crude oil prices were pressured by worries
of oversupply in world markets. Gains were also recorded in positions in the
Australian dollar as a nervous market dealt with rumors of further currency
devaluations in Asia; the Australian currency fell to a 12-year low against
the U.S. dollar. Positions in stock indices and agricultural commodities
resulted in losses overall; but the Trust recorded a gain of $2,563,534 or
$3.34 per Unit in May.
In June losses were recorded due largely to unprofitable positions in global
interest rates and metals. Unprofitable positions in the Japanese Government
bond led losses in global interest rates as the yield rose from record lows
following intervention to support the yen. A marginal gain in the Japanese
yen failed to offset losses in the British pound and Swiss franc. Positions
in gold and silver also resulted in losses as the prices of both metals
remained coupled to movements in the Japanese yen. Gains were recorded in
crude oil positions as inventories worldwide continued to exceed demand and
prices fell. Profitable positions in cotton, sugar, coffee and corn offset
losses in other agricultural markets. The Trust recorded a loss of
$1,282,573 or $1.64 per Unit in June.
On June 1, 1998 the following changes became effective for CIS Investments,
Inc., the Managing Owner of the Trust: Hal T. Hansen resigned as President
and Director due to upcoming retirement; L. Carlton Anderson resigned as
Vice President and Director due to upcoming retirement; Bernard W. Dan was
elected President and Director; Barbara A. Pfendler was elected Director
(she also holds the position of Vice President) and Ronald L.Davis was
elected Vice President.
During the quarter there were 107,284.71 additional Units sold to the
Beneficial Owners for an investment of $10,589,942 and 1,114.19 Units sold
to the Managing Owner for an investment of $110,000, representing a total
of 108,398.90 additional Units sold for a total investment of $10,699,942.
Investors redeemed a total of 14,260.80 Units during the quarter. At the
end of the quarter there were 802,157.51 Units outstanding owned by the
Beneficial Owners and 8,410.68 Units outstanding owned by the Managing Owner.
During the fiscal quarter ended June 30, 1998, the Trust had no credit
exposure to a counterparty which is a foreign commodities exchange or to any
counterparty dealing in over the counter contracts which was material.
See Footnote 5 of the Financial Statements for procedures established by the
Managing Owner to monitor and minimize market and credit risks for the Trust.
In addition to the procedures set out in Footnote 5, the Managing Owner
reviews on a daily basis reports of the Trust's performance, including
monitoring of the daily net asset value of the Trust. The Managing Owner
also reviews the financial situation of the Trust's Clearing Broker on a
monthly basis. The Managing Owner relies on the policies of the Clearing
Broker to monitor specific credit risks. The Clearing Broker does not engage
in proprietary trading and thus has no direct market exposure which provides
the Managing Owner assurance that the Trust will not suffer trading losses
through the Clearing Broker.
Year 2000 Issue
The Trust does not have any anticipated costs, problems or uncertainties
associated with the Year 2000 issue. The Trust relies on the Managing Owner
to provide the Trust with certain calculations and reports, so if the Year
2000 issue is material to the Managing Owner, then it may impact the Trust.
However, the Year 2000 issue is not material for the Managing Owner since
the administration software is currently being replaced and will be in
compliance with Y2000 prior to the end of 1998. In addition, the Clearing
Broker is undergoing an intensive review to determine what areas (if any)
are not in compliance with Y2000, and expects to be in compliance by the end
of 1998. Neither the software replacement nor the compliance review are
expected to be material or to yield noncompliance issues that are material.
Fiscal Quarter ended June 30, 1997
The Trust recorded a gain of $20,296.37 or $0.16 per Unit for the second
quarter of 1997.
Trading for the Trust commenced on June 2, 1997, therefore there was only
one month of trading activity for the Trust during the second quarter and
there is no comparative to prior year activity. The Trust experienced gains
due to profitable positions in metals, interest rates and stock indices.
At June 30, 1997, John W. Henry & Company, Inc. was managing 100% of the
Trust's assets in two trading programs, the Original Investment Program and
the Financial and Metals Portfolio.
In June, gold prices fell to a four-year low as the U.S. dollar strengthened
and inflation indicators remained favorable. Positions in both gold and
silver were profitable. Continued uncertainty surrounding the European
currency union benefited bond markets outside the EMU circle of nations. In
the currency markets, the Swiss monetary authority's determination to keep
the franc from appreciating against major currencies succeeded in pushing
the price of that currency down. After reaching a 20-year high in May,
coffee prices fell steadily in June on news of higher world exports and
concerns about the impact of high prices on demand. The Trust recorded a
gain of $20,296.37 or $.16 per Unit in June.
During the quarter there were 224,362.25 additional Units sold, including
2,498.40 Units sold to the Managing Owner representing a total of
$22,451,280. Investors redeemed a total of 8,438.02 Units during the
quarter (not including the redemption by the initial Beneficial Owners of
the Trust, representing ownership of $1,000). At the end of the quarter
there were 215,924.22 Units outstanding (including 2,498.40 Units owned by
the Managing Owner).
During the fiscal quarter ended June 30, 1997, the Trust had no credit
exposure to a counterparty which is a foreign commodities exchange or to
any counterparty dealing in over the counter contracts which was material.
Fiscal Quarter ended March 31, 1998
The Trust recorded a loss of $4,736,571 or $7.50 per Unit for the first
quarter of 1998. Trading for the Trust commenced on June 2, 1997,
therefore there is no comparative to prior year first quarter activity.
During the first two months of the quarter, the Trust experienced losses
primarily as a result of unprofitable positions in currencies and interest
rates, while during the third month losses were recorded primarily due to
losses in metals positions and in the global interest rate market. At
March 31, 1998, John W. Henry & Company, Inc. was managing 100% of the
Trust's assets in two trading programs, the Original Investment Program and
the Financial and Metals Portfolio.
In January, performance was negatively impacted by sharp reversals in
Japanese financial markets and in gold. Investor optimism over efforts to
revive ailing Asian economies boosted the Japanese yen against the U.S.
dollar and gave support to the Nikkei; positions in both resulted in losses
for the Trust. Benign inflation news in Europe and the U.S. boosted bond
markets in both regions, resulting in gains for the Trust. These gains were
offset by losses in stock indices and in gold prices. Positions in crude
oil and coffee produced some gains for the Trust. Overall, the Trust
recorded a loss of $1,823,674 or $3.11 per Unit in January.
In February, losses were incurred in nearly all currencies traded. Trading
was also unprofitable in U.S. Treasury bonds, interest rates and gold. The
purchase of large quantities of silver by a major investor caused the prices
of the precious metal to soar in world markets, before succumbing to some
profit taking at month end; positions in silver resulted in gains for the
Trust. Profitable positions in most European bonds failed to offset losses
in other long- and short-term interest rates. Gains in sugar, corn and cotton
offset losses in other agricultural commodities traded. The Trust recorded a
loss of $760,060 or $1.21 per Unit in February.
In March, the U.S. dollar rose against most of its major counterparts,
gaining strength from the flight of international capital from a
deteriorating Japanese economy and the purchase of dollars to buy U.S.
Treasury bonds as yields in key European bond markets hit post-war lows.
Positions in the Swiss franc and the German mark resulted in gains for the
Trust. Positions in the U.S. 30-year bond led losses in the global interest
rate market. Inflation concerns, fueled by rising oil prices, propelled
gold prices sharply higher. Positions in gold were unprofitable, as were
positions in silver, which became more volatile during the month. Except
for small gains in soybeans and soybean-derivative markets, positions in
agricultural commodities resulted in losses overall. The Trust recorded a
loss of $2,152,837 or $3.18 per Unit in March.
During the quarter there were 136,808.65 additional Units sold to the
Beneficial Owners for an investment of $14,333,161 and 1,383.81 Units sold
to the Managing Owner for an investment of $145,000, representing a total
of 138,192.46 additional Units sold for a total investment of $14,478,161.
Investors redeemed a total of 8,353.80 Units during the quarter. At the end
of the quarter there were 709,133.61 Units outstanding owned by the
Beneficial Owners and 7,296.47 Units outstanding owned by the Managing Owner.
During the fiscal quarter ended March 31, 1998, the Trust had no credit
exposure to a counterparty which is a foreign commodities exchange or to any
counterparty dealing in over the counter contracts which was material.
Item 3. Quantitative and Qualitative Disclosures
About Market Risk
Not Applicable.
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
The Trust and its affiliates may from time to time be parties to various
legal actions arising in the normal course of business. The Managing
Owner believes that there are noproceedings threatened or pending
against the Trust or any ofits affiliates which, if determined adversely,
would have a material adverse effect on the financial condition or results
of operations of the Trust.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
None
b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned and thereunto duly authorized.
JWH GLOBAL TRUST
Date: August 11, 1998 By: CIS Investments, Inc.,
its Managing Owner
By: /s/ Richard A. Driver
Richard A. Driver
Treasurer
(Duly authorized officer of the
Managing Owner and the Principal
Financial Officer of the Managing
Owner)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from JWH Global
Trust for the second quarter of 1998 and is qualified in its entirety by
reference to such 10-Q.
</LEGEND>
<CIK> 0001027099
<NAME> JWH GLOBAL TRUST
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<PERIOD-END> JUN-30-1998
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