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 March 31, 1999
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 March 31, 1999
and the additional time frames as noted:
Fiscal Quarter Year to Date Fiscal Year Fiscal Quarter Year to Date
Ended 3/31/99 To 3/31/99 Ended 12/31/98 Ended 3/31/98 To 3/31/98
-------------- -------------- -------------- --------------------------
<S> <C> <C> <C> <C> <C>
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
Mar 31, 1999 Dec 31, 1998
--------------- -------------
<S> <C> <C> -1569001.29
ASSETS -1453706.45
Cash $3,129,582 $1,601,405 $847,873
Equity in commodity futures -6221.04
trading accounts: 106.61
Account balance 92,015,051 90,182,744
Unrealized gain on open futures
and forwards contracts 3,102,446 7,559,155
--------------- -------------
98,247,078 99,343,304
Interest receivable 332,566 338,264
Prepaid Initial O&O 418,546 451,589
--------------- -------------
Total assets $98,998,190 $100,133,157
=============== =============
LIABILITIES AND UNITHOLDERS' CAPITAL
Liabilities:
Accrued commissions due to CIS $509,575 $528,885
Accrued management fee 319,318 328,109
Accrued incentive fee 0 120,253
Accrued operating expenses 110,363 109,738
Redemptions payable 2,369,860 3,533,024
Selling and Offering Expenses Payable 39,558 40,602
--------------- -------------
Total liabilities 3,348,674 4,660,611
Unitholders' Capital:
Beneficial owners ( 838,717.13 units outstandi 94,678,877 94,386,640
at 3/31/99, 817,899.61 units outstanding at 12/31/98)
(see Note 1)
Managing owner (8,598.45 units outstanding at 970,639 1,085,906
3/31/99 and 9,409.49 at 12/31/98) (see Note 1)
--------------- -------------
Total unitholders' capital 95,649,516 95,472,546
--------------- -------------
Total liabilities and
unitholders' capital $98,998,190 $100,133,157
=============== =============
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
Jan 1, 1999 Jan 1, 1999 Jan 1, 1998 Jan 1, 1998
through through through through
Mar 31, 1999 Mar 31, 1999 Mar 31, 1998 Mar 31, 1998
--------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
REVENUES
Gains on trading of commodity futures
and forwards contracts, physical
commodities and related options:
Realized gain (loss) on closed positions $3,636,639 $3,636,639 ($1,115,205) ($1,115,205)
Change in unrealized gain (loss)
on open positions (4,003,628) (4,003,628) (2,408,918) (2,408,918)
Interest income 987,007 987,007 803,390 803,390
Foreign currency transaction gain (loss) (61,053) (61,053) (139,524) (139,524)
--------------- ------------- -------------- -------------
Total revenues 558,966 558,966 (2,860,258) (2,860,258)
EXPENSES
Commissions paid to CIS 1,513,563 1,513,563 859,406 859,406
Exchange fees 20,746 20,746 12,937 12,937
Management fees 945,161 945,161 665,761 665,761
Incentive fees 0 0 0 0
Organization & Offering Expenses 150,137 150,137 115,508 115,508
Operating expenses 15,000 15,000 222,701 222,701
--------------- ------------- -------------- -------------
Total expenses 2,644,606 2,644,606 1,876,313 1,876,313
--------------- ------------- -------------- -------------
Net profit (loss) ($2,085,640) ($2,085,640) ($4,736,571) ($4,736,571)
=============== ============= ============== =============
PROFIT (LOSS) PER UNIT OF
OWNERSHIP INTEREST ($2.51) ($2.51) ($7.50) ($7.50)
=============== ============= ============== =============
(see Note 1) (see Note 1) (see Note 1) (see Note 1)
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, 1999 through March 31, 1999
UNAUDITED
<S> <C> <C> <C> <C>
Additional Units Sold Beneficial Managing
(see Note 1) Units* Owners Owner Total
--------------- ------------- -------------- -------------
Unitholders' capital at January 1, 1999 817,899.61 $94,386,640 $1,085,906 $95,472,546
Additional Units Sold 62,944.80 7,099,752 (93,497) 7,006,255
(see Note 1)
Net profit (loss) (2,063,870) (21,770) (2,085,640)
Redemptions (see Note 1) (42,127.28) (4,743,645) (4,743,645)
--------------- ------------- -------------- -------------
Unitholders' capital at March 31, 1999 838,717.13 $94,678,877 $970,639 $95,649,516
=============== ============= ============== =============
Net asset value per unit
January 1, 1999 (see Note 1) 109.70 109.70
Net profit (loss) per unit (see Note 1) 3.19 3.19
------------- --------------
Net asset value per unit
March 31, 1999 $112.89 $112.89
* 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, 1999 Jan 1, 1998
through through
Mar 31, 1999 Mar 31, 1998
--------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net profit (loss) ($2,085,640) ($4,736,571)
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 (1,528,177) (424,721)
Unrealized gain (loss) on open
futures contracts 4,456,709 2,408,918
Interest receivable 5,698 (46,485)
Prepaid Organization and Offering Expenses 33,043 33,043
Accrued liabilities (147,729) (589,914)
Redemptions payable (1,163,164) 353,696
Selling and Offering Expenses Payable (1,044) 3,667
--------------- -------------
Net cash provided by (used in)
operating activities (430,304) (2,998,367)
Cash flows from financing activities:
Additional Units Sold 7,006,255 14,478,161
Unitholder redemptions (4,743,645) (873,645)
--------------- -------------
Net cash provided by (used in)
financing activities 2,262,611 13,604,516
--------------- -------------
Net increase (decrease) in cash 1,832,306 10,606,148
Cash at beginning of period $90,182,744 56,278,134
--------------- -------------
Cash at end of period $92,015,050 $66,884,282
=============== =============
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
MARCH 31, 1999
(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
were offered pursuant to a Prospectus dated June 26, 1998 until
March 25, 1999. On March 26, 1999, an amendment to the
registration statement was declared effective with the SEC and
the Units are currently offered pursuant to a prospectus dated
March 31, 1999. 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 March
31, 1999, a total of 1,001,400.70 Units were sold to Beneficial
Owners of the Trust for an investment of $104,766,951 and
9,409.49 Units were sold to the Managing Owner of the Trust for
an investment of $971,483, resulting in a total of 1,010,810.10
Units representing a total investment of $105,738,434 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 Fourth 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 Fourth 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 Fourth 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 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, until October 4, 1998. Effective October 5,
1998, the Managing Owner added a third JWH program to the Trust,
the G-7 Currency 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 $0 for the periods ended March 31, 1999 and March 31,
1998 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.
During the period of these financials, the Trust utilized two of
the trading programs of the CTA until October 4, 1998 (a third
program was added on October 5, 1998 as discussed below). 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. To further
increase the diversification of the Trust, on October 5, 1998
the Managing Owner added a third program of the CTA to the two
programs already being traded by the Trust. This program, the
G-7 Currency Portfolio, is diversified among a number of world
currencies against each other, unlike the other programs which
trade versus the U.S. dollar only. In addition, the G-7
Currency Portfolio trades currencies not traded in the other two
programs. Such diversification should greatly reduce this
market risk.
The margin requirement at March 31, 1999 was $15,042,079. To
meet this requirement, the Trust had on deposit with the
Clearing Broker $82,576,173 in segregated funds, $4,621,377 in
secured funds and $7,912,376 in non-regulated funds. At March
31, 1999, 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 March 31, 1999:
COMMODITY GROUP UNREALIZED GAIN/(LOSS)
AGRICULTURAL COMMODITIES 35,610
FOREIGN CURRENCIES 1,442,892
STOCK INDICES 601,336
ENERGIES 780,861
METALS 96,234
INTEREST RATE INSTRUMENTS 145,513
_________
TOTAL 3,102,446
The range of maturity dates of these exchange traded open
contracts is April of 1999 to March of 2000. The average open
trade equity for the period of January 1, 1999 to March 31, 1999
is $6,027,467.
(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, 1998, as filed with
the Securities and Exchange Commission on March 29, 1999, 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 March 31, 1999
The Trust recorded a loss of $2,085,640 or $2.51 per Unit for
the first quarter of 1999. This compares to a loss of
$4,736,571 or $7.50 per Unit for the first quarter of 1998.
In the first month of the quarter the Trust posted a loss
resulting primarily from volatility in the currency sector as
well as Japanese interest rates. The Trust posted a gain for the
second month of the quarter resulting primarily from trading in
precious metals and currencies. During the third month of the
quarter concerns about the military conflict in Kosovo mounted.
As a result the global markets experienced increased volatility,
namely in precious metals and interest rates, and the Trust
posted a small loss. Overall, the first quarter of fiscal 1999
ended negatively for the Trust accounts managed by JWH. At
March 31, 1999, JWH was managing 100% of the Trust's assets in
three trading programs, the Original Investment Program, the
Financial and Metals Portfolio and the G-7 Currency Portfolio.
Currencies were the most volatile sector for the month of
January; namely short positions in the British pound and long
positions in the Japanese yen. The anxiously awaited Euro began
trading and started out the year on a positive note as short
positions rendered small profits for the Trust. The only
profitable interest rate market was in Germany where the Trust
maintained a long German bund position, thereby taking advantage
of falling German rates. Short positions in the Japanese
government bond and Australian bond positions created losses for
the Trust. Coffee prices vacillated; rising in December and
falling in January. The Trust posted losses from long coffee
positions. Long sugar positions were also unprofitable. The
Nikkei stock index provided the majority of the loss in the
stock indices, as short positions were unprofitable. Crude oil
prices showed no direction during the month. Short positions
were retained during January and resulted in a small loss for
the Trust. All in all, the Trust posted a loss of $3,893,098 or
$4.70 per Unit in January.
In February, agricultural prices declined steadily throughout
the month as the Trust was positioned to profit from short
positions in coffee, corn, wheat, and soybeans. Energy prices
eroded allowing short positions in crude and heating oil to
provide profits. Long silver positions in the precious metals
sector were profitable and the Nikkei stock index provided gains
amidst a falling and then rising market. Currency trading
rendered gains from short positions in the Euro, British pound
and Swiss franc as each currency declined against the U.S.
dollar. These gains were able to cover losses in the Australian
dollar and Japanese yen. Interest rates were the only
unprofitable sector for the Trust. The Trust was able to take
advantage of rising interest rates in the U.S. 10-year notes and
30-year bonds. However, long Japanese government bond and
German bund positions recorded more significant losses.
Overall, the Trust posted a gain of $2,554,238 or $3.07 per Unit
in February.
In March, silver and gold positions were extremely volatile as
the Trust recorded losses from long silver positions and short
gold positions. Short bond positions in Australia and in the
United Kingdom were unprofitable as interest rates in both began
to rise. However, long Japanese government bond positions were
the largest loser in this sector as bond prices plummeted. The
price decline in the agricultural complex, which provided profit
opportunities during February from short positions, saw a
reversal in March as sustained short corn and coffee positions
gave back profits. Currencies were the most favorable sector
for the Trust. A flight to quality in the U.S. dollar has
provided opportunities for the Trust to profit from long U.S.
dollar positions versus the Euro and Swiss franc. The conflict
in Kosovo has exacerbated the crisis-related selling of the Euro
and the flow of money into the U.S. dollar. The Nikkei stock
index moved sharply higher during March and the Trust profited
from long positions. Long positions in the Australian
All-Ordinaries index were also profitable. A sharp rise in
energy prices gave way to profits from long positions in crude
oil. Rumors of gasoline shortages as well as the decision of
world oil producers to cut oil production pushed crude prices
higher throughout the month. Overall, the Trust posted a loss
of $746,780 or $.88 per Unit in March.
During the quarter there were 62,944.80 additional Units sold to
the Beneficial Owners for an investment of $7,099,752; there
were no Units sold to the Managing Owner. Investors redeemed a
total of 42,127.28 Units during the quarter. At the end of the
quarter there were 838,717.13 Units outstanding owned by the
Beneficial Owners and 8,598.45 Units outstanding owned by the
Managing Owner.
During the fiscal quarter ended March 31, 1999, 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.
<PAGE>
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
CIS surveyed major applications in 1996 to see if they were Year
2000 compliant. Systems identified with Year 2000 issues were
targeted for replacement or modification. Replacement and
modification projects are currently underway. In addition, CIS
has dedicated resources to assess our work processes and verify
that it will be able to handle the changes in the next
millennium. This process addresses software applications as
well as key vendor, bank and customer relationships.
During 1997, CIS participated in developing the industry-wide
test plan with the Futures Industry Association, with whom it
continues to work closely. CIS has participated in BETA
testing, which began in September 1998, and is participating
again with the FIA in "street wide" testing during the second
quarter of 1999.
In addition, CIS has begun developing various "contingency
plans" in the event that mission critical systems should fail.
This development is proceeding on schedule.
CIS is taking this issue seriously and has a goal of maintaining
reasonable procedures in order to eliminate as much risk as
possible to its customers (including the Trust), its
counterparties and itself. Despite the best efforts of CIS,
CISFS and CISI, there can be no assurance that the above steps
will be sufficient or that all potential problems have been
identified in order to avoid any adverse impact to the Trust.
CIS and its affiliates make no representations or warrants
related to Year 2000 readiness or compliance, including but not
limited to business interruption, whether from failures in their
own computer systems, those of the Advisors, or any other third
party.
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.
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
There has been no material change with respect to market risk
since the "Quantitative and Qualitative Disclosures About Market
Risk" was made in the Form 10K of the Trust dated December 31,
1998.
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 no proceedings
threatened or pending against the Trust or any of its 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: May 13, 1999 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 first quarter of 1999 and is qualified in its entirety by
reference to such 10-Q.
</LEGEND>
<CIK> 0001027099
<NAME> JWH GLOBAL TRUST
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1999
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