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 September 30, 2000
Commission File Number 333-33937
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
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Following are Financial Statements for the fiscal quarter ended September 30,
2000 and the additional time frames as noted:
<TABLE>
<CAPTION>
Fiscal Year to Date Fiscal Year Fiscal Year to Date
Quarter Quarter
ENDED 9/30/00 ENDED 9/30/00 ENDED 12/31/99 ENDED 9/30/99 ENDED 9/30/99
------------- ------------- -------------- ------------- -------------
<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
</TABLE>
<PAGE>
JWH GLOBAL TRUST
STATEMENTS OF FINANCIAL CONDITION
UNAUDITED
<TABLE>
<CAPTION>
SEP 30, 2000 DEC 31, 1999
------------ ------------
<S> <C> <C>
ASSETS
Receivable for units sold $80,587 $522,643
Equity in commodity futures
trading accounts:
Account balance 46,126,827 85,053,945
Unrealized gain (loss) on open futures
and forwards contracts (2,684,930) 3,339,311
----------- ----------
43,522,484 88,915,899
Interest receivable 233,241 377,036
Prepaid Initial O&O 220,287 319,417
----------- ----------
TOTAL ASSETS $43,976,012 $89,612,352
============== ==============
<CAPTION>
LIABILITIES AND UNITHOLDERS' CAPITAL
Liabilities:
<S> <C> <C>
Accrued commissions due to CIS 234,942 474,960
Accrued management fee 146,210 296,715
Accrued operating expenses 74,707 60,000
Redemptions payable 1,510,891 3,574,032
Selling and Offering Expenses Payable 18,104 36,779
----------- ----------
Total liabilities 1,984,854 4,442,486
Unitholders' Capital:
Beneficial owners (481,522.12 units outstanding 41,254,124 84,270,892
at 9/30/00, 806,374.79 units outstanding at
12/31/99) (see Note 1)
Managing owner (8,602.73 units outstanding at 737,034 898,974
9/30/00, 8,602.14 units outstanding at 12/31/99) ------- -------
Total unitholders' capital 41,991,158 85,169,866
----------- -----------
TOTAL LIABILITIES AND
UNITHOLDERS' CAPITAL $43,976,012 $89,612,352
============== ==============
Net Asset Value per Unit $85.67 $104.51
</TABLE>
See accompanying notes to financial statements.
<PAGE>
JWH GLOBAL TRUST
STATEMENTS OF OPERATIONS
UNAUDITED
<TABLE>
<CAPTION>
Jul 1, 2000 Jan 1, 2000 Jul 1, 1999 Jan 1, 1999
through through through through
SEP 30, 2000 SEP 30, 2000 SEP 30, 1999 SEP 30, 1999
------------ ------------ ------------ ------------
<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 $373,982 ($3,278,563) ($55,897) $9,910,068
Change in unrealized gain (loss)
on open positions (2,514,168) (6,024,241) (5,812,473) (7,131,800)
Interest income 740,608 2,589,295 1,152,297 3,192,209
Foreign currency transaction gain (loss) (67,195) (456,256) 128,860 (260,400)
-------- --------- -------- ---------
Total revenues (1,466,773) (7,169,765) (4,587,213) 5,710,077
EXPENSES
Commissions paid to CIS 764,454 2,968,776 1,564,456 4,700,178
Exchange fees 7,337 25,171 24,933 63,378
Management fees 475,747 1,847,912 979,731 2,935,732
Incentive fees 0 0 0 853,599
Organization & Offering Expenses 91,965 328,094 154,401 462,133
Operating expenses 15,100 45,200 15,000 45,639
------- ------- ------- -------
Total expenses 1,354,603 5,215,153 2,738,521 9,060,659
---------- ---------- ---------- ---------
NET PROFIT (LOSS) ($2,821,376) ($12,384,918) ($7,325,734) ($3,350,583)
============== ============== ============== ==============
PROFIT (LOSS) PER UNIT OF
OWNERSHIP INTEREST ($5.38) ($18.84) ($8.64) ($3.98)
============== ============== ============== ==============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
JWH GLOBAL TRUST
STATEMENT OF CHANGES IN UNITHOLDERS' CAPITAL
FROM JANUARY 1, 2000 THROUGH SEPTEMBER 30, 2000
UNAUDITED
<TABLE>
<CAPTION>
BENEFICIAL MANAGING
UNITS* OWNERS OWNER TOTAL
------ ------ ----- -----
<S> <C> <C> <C> <C>
Unitholders' capital at January 1, 2000 806,374.79 $84,270,892 $898,974 $85,169,866
Additional Units Sold 15,256.26 1,441,129 57 1,441,187
(see Note 1)
Net profit (loss) (12,222,921) (161,997) (12,384,918)
Redemptions (see Note 1) (340,108.92) (32,234,977) 0 (32,234,977)
------------ ------------ - ------------
Unitholders' capital at September 30, 2000 481,522.12 $41,254,124 $737,034 $41,991,158
============== ============== ============== ==============
Net asset value per unit
January 1, 2000 (see Note 1) 104.51 104.51
Net profit (loss) per unit (see Note 1) (18.84) (18.84)
------- -------
Net asset value per unit
September 30, 2000 $85.67 $85.67
============== ==============
</TABLE>
* Units of Beneficial Ownership.
See accompanying notes to financial statements.
<PAGE>
JWH GLOBAL TRUST
STATEMENTS OF CASH FLOWS
UNAUDITED
<TABLE>
<CAPTION>
Jan 1, 2000 Jan 1, 1999
through through
SEP 30, 2000 SEP 30, 1999
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net profit (loss) ($12,384,918) ($3,350,583)
Adjustments to reconcile net profit
(loss) to net cash provided by
(used in) operating activities:
Change in assets and liabilities:
(Increase) Decrease in unrealized gain on open
futures and forward contracts 6,024,241 7,584,662
(Increase) Decrease in interest receivable 143,795 (40,528)
Decrease in Prepaid Organization and Offering 99,130 99,129
Expenses
Increase (Decrease) in accrued liabilities (394,491) (153,084)
Net cash provided by (used in)
operating activities (6,512,242) 4,139,596
----------- ---------
Cash flows from financing activities:
Additional Units Sold 1,883,242 15,992,629
Unitholder redemptions (34,298,118) (15,062,680)
------------ ------------
Net cash provided by (used in)
financing activities (32,414,876) 929,949
------------ -------
Net increase (decrease) in cash (38,927,118) 5,069,545
Cash at beginning of period $85,053,945 90,182,744
------------ ----------
Cash at end of period $46,126,827 $95,252,289
============== ==============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
JWH GLOBAL TRUST
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(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 Securities and Exchange Commission ("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 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 were offered pursuant to a
prospectus dated March 31, 1999 until January 2, 2000. On January 3, 2000 an
amendment to the registration statement was declared effective with the SEC and
the Units are currently offered pursuant to a prospectus dated January 3, 2000.
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.
<PAGE>
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 September
30, 2000, a total of 1,128,533.60 Units were sold to Beneficial Owners of the
Trust for an investment of $118,738,761 and 8,602.73 Units were sold to the
Managing Owner of the Trust for an investment of $885,057, resulting in a total
of 1,137,136.33 Units representing a total investment of $119,623,818 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 that
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 and marked to market daily. 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 U.S. Treasury bill rate for deposits denominated in U.S. dollars, and
at the rates agreed between the Trust and CIS and CISFS for deposits denominated
in other currencies.
<PAGE>
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.
<PAGE>
(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 three of
its trading programs. From January 1, 1999 until January 3, 2000, the Trust used
the Original Investment Program, the Financial and Metals Portfolio and the G-7
Currency Portfolio.
Effective January 3, 2000, the Managing Owner replaced the Original Investment
Program with the JWH GlobalAnalytics Family of Programs.
Under a 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.
The management fee will be reduced to 1/12 of 2% of the Trust's month-end
adjusted net assets effective October 1, 2000.
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 a portion of the Brokerage Fee at a rate of 1.25% (rather than the
6.5% rate).
The incentive fee will be changed to 20% of the new trading profits of the Trust
effective October 1, 2000.
(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 for both periods ended September 30, 2000
and September 30, 1999 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 Forward 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-
<PAGE>
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 Forward 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 Forward 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 Forward Currency Broker is
the counterparty for the Trust's forward transactions. CISFS policies require
that it executes 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 forward 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 forward positions of the Trust at the
same time (both long positions and short positions), and if the markets moved
such that the JWH was unable to offset the futures and forward 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
three of the trading programs. One trading program is diversified among all
commodity groups, while the other is diversified among the various futures
contracts and forward contracts in the financials and metals group and the
third, is diversified among a number of world currencies against each other,
unlike the other programs which trade versus the U.S. dollar only. On January 3,
2000, the Original Investment Program was replaced by the JWH GlobalAnalytics
Family of Programs. Such diversification should greatly reduce this market risk.
The margin requirement at September 30, 2000 was $5,000,902. To meet this
requirement, the Trust had on deposit with the Clearing Broker
<PAGE>
$35,746,765 in segregated funds, $6,020,241 in secured funds and $1,674,891 in
non-regulated funds. At September 30, 2000, cash was on deposit with the
Clearing Broker and the Forward Currency Broker that 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 September
30, 2000:
COMMODITY GROUP UNREALIZED GAIN/(LOSS)
AGRICULTURAL COMMODITIES 16,824
FOREIGN CURRENCIES (2,721,132)
STOCK INDICES 32,032
ENERGIES (121,917)
METALS 29,727
INTEREST RATE INSTRUMENTS 79,536
---------------
TOTAL (2,684,930)
The range of maturity dates of these exchange traded open contracts is October
2000 to September 2001. The average open trade equity for the period of January
1, 2000 to September 30, 2000 is $2,405,763.
(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, 1999, as filed with the Securities and Exchange Commission on
March 28, 2000, 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 SEPTEMBER 30, 2000
The Trust recorded a loss of $2,821,376 or $5.38 per Unit for the third quarter
of 2000. This compares to a loss of $7,325,734 or $8.64 per Unit for the third
quarter of 1999.
<PAGE>
In the first month of the quarter the Trust posted a loss resulting from
volatility in the interest rate and currency sectors. The Trust posted a small
gain in the second month of the quarter largely due to surging petroleum prices.
During the last month of the quarter, massive government intervention created
losses in the currency markets and the Trust as well. At September 30, 2000,
JWH(R) was managing 100% of the Trust's assets in three trading programs: the
Financial and Metals Portfolio, the G-7 Currency Portfolio and the JWH
GlobalAnalytics(R) Family of Programs.
An apparent economic slowdown in the U.S., uncertainty over the ending of zero
interest rates in Japan and a one-half of one percent rise in European interest
rates served to provide a conflicting economic backdrop for the Trust in July.
Currency trading provided the lion's share of the losses in the portfolio.
Profits in long U.S. dollar positions waned as signs of a slowdown in the U.S.
economy weakened the dollar versus major currencies. Most damaging was the
aforementioned rise in the European interest rate, which served to bolster an
increasingly positive Euro sentiment. The rally in the Euro resulted in the
majority of the Trust's currency losses in June. Many global interest rate
positions proved to be unprofitable as short-term volatility over the likely
direction of interest rates denied the Trust profitable trends. The index sector
was down in sympathy with interest rates. On the positive side, surging
petroleum prices allowed long positions in the energy sector to continue to
accrue profits. Profitable positions in sugar, soybeans and coffee supported
performance in the non-financial markets. Metals' trading was slightly negative.
In summation, the Trust recorded a loss of $1,170,400 or $2.08 per Unit in July.
The Trust benefited from a strong U.S. dollar and a resurgence in energy prices
to record a gain in August. Energies contributed the majority of the profits
with Brent crude oil prices hitting 10-year highs and U.S. crude coming within
$1 of a new post Gulf War record. Long U.S. dollar positions posted gains for
the portfolio when the beleaguered Euro sank to a three-month low against the
U.S. dollar and dragged the Swiss franc along with it. The British pound also
set six-year lows against the U.S. dollar amid the perception that interest
rates will hold for some time in Britain. These gains were somewhat offset by
losses which occurred when the Japanese economy strengthened, causing a rally
against our short Yen position. Short Nikkei positions proved unprofitable when
the Index rose for the month in response to the Bank of Japan's decision to hike
interest rates thus ending their 18-month zero interest rate policy. Interest
rates, metals and agricultural commodities were unchanged for the month. In
summation, the Trust recorded a gain of $415,177 or $0.78 per Unit in August.
Currency markets were caught off guard September 22 when massive central bank
intervention supported the Euro and temporarily halted its decline. After having
been up almost 6% earlier in the month, the Trust was rocked when the central
banks from Canada, Japan, the United Kingdom and the U.S. agreed to purchase
over 6 billion Euros. The Central Banks intervened because the Euro had declined
to a level that could create inflation in its member countries. Their action led
to reverberations throughout the currency and interest rate markets. Despite the
gains seen early in the month, this intervention caused positions in European
and Asian currencies and foreign and U.S. debt markets to be mostly
<PAGE>
unprofitable. In the energy sector, crude oil prices, after rising to over $39 a
barrel, fell sharply on news that OPEC increased production and the Clinton
administration released 30 million barrels from the U.S. strategic supply.
Metals were profitable across the board in September with short gold positions
tracking the Euro to end the month lower. In addition, long copper positions
supported by falling inventories and robust demand were profitable. Agricultural
commodities were off slightly due to losses in sugar. In summation, the Trust
recorded a loss of $2,066,153 or $4.08 per Unit in September.
Effective October 1, Management Fees paid by the Trust to the John W. Henry
Company were reduced from 4% to 2% annually (paid monthly). Incentive fees were
increased from 15% to 20% of quarter end new high profits. This change in fees
reduces the "breakeven" on the Trust from 7.3% to 4.8% on an annual basis.
During the quarter there were 5,130.80 additional Units sold to the Beneficial
Owners for an investment of $455,230; there were no Units sold to the Managing
Owner. Investors redeemed a total of 77,651.11 Units during the quarter. At the
end of the quarter there were 481,522.12 Units outstanding owned by the
Beneficial Owners and 8,602.73 Units outstanding owned by the Managing Owner.
During the fiscal quarter ended September 30, 2000, 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>
FISCAL QUARTER ENDED SEPTEMBER 30, 1999
The Trust recorded a loss of $7,325,734 or $8.64 per Unit for the third quarter
of 1999. This compares to a gain of $12,961,310 or $15.94 per Unit for the third
quarter of 1998.
In the first month of the quarter the Trust posted a loss resulting primarily
from excessive volatility in the currency markets. The Trust posted a small loss
during the second month of the quarter due in part to long positions held in
global interest rates and the Japanese Nikkei stock index. During the third
month of the quarter, the Trust surrendered profits due to rapidly escalating
gold prices and the trust's short gold positions. Overall, the third quarter of
fiscal 1999 ended negatively for the Trust accounts managed by JWH. At September
30, 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.
The Trust posted a loss for July, largely due to excessive volatility in the
currency markets. After gaining value versus the world's currencies for several
weeks, the U.S. dollar ran out of steam by the mid-month. As a result, the Trust
posted losses from long Dollar positions against the Euro, Swiss franc and
Japanese yen. The decline of the Dollar continued through month end, which
prompted short Dollar positions to be established.
Losses in the currency markets wiped out smaller gains that came from global
interest rates, metals, energy and the agricultural sectors. Short positions in
the 10-year and 30-year U.S. bonds provided profits as the long bond yield rose
above 6.1%. The Trust's strongest gains in this sector came from Europe where
interest rates continued to rise. Profits were earned from short positions in
the Euro Bund, Euro Bobl and U.K. Gilt. Likewise, the Trust continued to profit
from its short positions in the gold market as the price of gold fell to its
lowest level in 20 years; $253.70 per troy ounce. All in all, the Trust posted a
loss of $3,458,054 or $4.11 per Unit in July.
In August, the Trust posted another small loss. Gains for the Trust were the
result of a weaker U.S. dollar, versus the Yen and Euro specifically. Stronger
crude oil prices and lower gold prices also provided gains. Unfortunately, these
gains were offset by losses in global interest rates and the Japanese Nikkei
stock index. Long positions in the Japanese stock index (the Nikkei) that were
profitable for the entire year were closed out and small losses were recorded
during August.
Currencies provided some resurrection in the form of a stronger Yen and Euro
versus the U.S. dollar. Since mid-July, the Trust held profitable long positions
in the Yen and Euro looking for these currencies to strengthen against the
Dollar. Long positions in crude oil performed well as prices rose $2 per barrel
during August exceeding $22 per barrel. Gold prices again plummeted through a
20-year low to $253.00 per troy ounce. Notwithstanding these gains, the Trust
posted a loss of $249,569 or $.29 per Unit in August.
The Trust had a difficult time in the markets during September. Losses were
primarily attributable to its short gold position, as the price rose over $50
per ounce. The price of gold escalated rapidly after 15 European central banks
announced that they wouldn't sell or lease additional gold for the next five
years.
Unfortunately, gains in Crude oil and the Japanese Yen were offset by losses in
gold, as well as short positions in the U.S. and Japanese bond markets. The
Trust's long positions in Crude oil performed well as prices rose nearly another
$2 per barrel. Currencies provided small gains as the Japanese yen strengthened
against the U.S. dollar for the second consecutive month. In
<PAGE>
addition, long yen positions proved profitable relative to the European
currencies. Overall, the Trust posted a loss of $3,618,111 or $4.24 per Unit in
September.
During the quarter there were 39,114.85 additional Units sold to the Beneficial
Owners for an investment of $4,485,084.95; there were no Units sold to the
Managing Owner. Investors redeemed a total of 30,705.28 Units during the
quarter. At the end of the quarter there were 842,520.14 Units outstanding owned
by the Beneficial Owners and 8,598.45 Units outstanding owned by the Managing
Owner.
During the fiscal quarter ended September 30, 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.
FISCAL QUARTER ENDED JUNE 30, 2000
The Trust recorded a loss of $2,119,843 or $3.82 per Unit in the second quarter
of 2000. This compares to a gain of $6,060,792 or $7.17 per Unit for the second
quarter of 1999. As of June 30, the Trust has lost 8.95% since inception.
In April, volatility in stocks led to a stronger U.S. dollar versus Euro and
profits for the Trust. Despite an interest rate increase by European central
banks, the dollar reached an all time high versus the Euro. Additional profits
were accrued in long dollar positions against the British, Swiss, and Australian
currencies. Stock index trading suffered, especially in Japan. Although the
Trust's metals positions were up slightly, overall trading in non-financial
markets was down slightly with the energy and food markets showing losses. The
Trust recorded a gain of $1,553,258 or $2.30 per Unit in April.
In May, mixed inflationary signals set the scene for two major trend reversals.
The U.S. interest rate market had a volatile change of direction as rates headed
lower and the Euro abruptly reversed its long term down trend versus the U.S.
dollar. After having been profitable for the majority of May, the Trust closed
lower when both trends reversed. Trading in U.S. bonds was down sharply, as was
Euro denominated interest rate trading. After hitting all-time lows against the
dollar in April, the Euro appreciated and profits accumulated in April by the
Trust were given back. Short positions in the Nikkei made the stock index sector
the only positive performing financial area. Long positions in the energy sector
produced positive results as petroleum prices continued to surge. Trading in
metals, foods and fibers was flat. The Trust recorded a loss of $735,209 or
$1.18 per Unit in May.
In June, uncertainty regarding an economic slowdown in the U.S. and an interest
rate rise in Europe provided a conflicting climate for trading. These events
created problems in the currency sector, which was the worst performing area in
June. The Trust's positions in interest rates, metals and stock indices were
unprofitable as well. On the positive side surging petroleum prices allowed long
positions in the energy sector to continue to accrue profits. Profitable
positions in sugar and soybean oil allowed the agricultural sector to show a
small positive return for the month. However, the Trust recorded a loss of
$2,937,892 or $4.94 per Unit in June.
During the quarter there were 3,347.25 Units sold to the Beneficial Owners for
an investment of $324,406. Investors redeemed a total of 114,089.72 Units during
the quarter. At the end of the quarter there were 554,042.43 Units outstanding
owned by the Beneficial Owners and 8,602.73 Units outstanding owned by the
Managing Owner.
<PAGE>
During the fiscal quarter ending June 30, 2000, the Trust had no material credit
exposure to a counter-party which is a foreign commodity exchange or to any
counter parties dealing in over the counter contracts which was material.
FISCAL QUARTER ENDED JUNE 30, 1999
The Trust recorded a gain of $6,060,792 or $7.17 per Unit for the second quarter
of 1999. This compares to a loss of $2,077,043 or $2.98 per Unit for the second
quarter of 1998.
In the first month of the quarter the Trust posted a gain resulting primarily
from an appreciating Japanese stock market, rising crude oil prices, falling
commodity prices and continued appreciation of the U.S. dollar versus the Euro
and Swiss franc. The Trust posted a loss during the second month of the quarter
resulting primarily from the currencies and indices and despite the declining
price of gold and the continued decline of the Euro currency. During the third
month of the quarter, the Trust posted a gain as it continued to benefit from
the freefall in gold prices and the declining Euro currency. Overall, the second
quarter of fiscal 1999 ended positively for the Trust accounts managed by JWH.
At June 30, 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.
In April, currencies were the most favorable sector for the Trust. The
continued flight to quality to the U.S. dollar provided opportunities for
the Trust to profit from long U.S. dollar positions versus the Euro and Swiss
franc. As the conflict in Kosovo persisted, the flow of money into the U.S.
dollar continued. Trading in the Japanese yen and Australian dollar was also
profitable. Confidence in the Japanese stock market restored performance in the
Nikkei 225 as the index was up approximately 20% year to date. A long position
in the Nikkei helped the Trust generate profits as did long positions in the S&P
500 Index and Hang Seng Index.
During April, the unprofitable trading sectors were mainly interest rates and
precious metals. As Europe cut interest rates mid-month, the Trust's position
went from short to long. Short U.S. bond positions generated a small profit by
month end. Short gold positions were also unprofitable. In the interim, this
position turned profitable as the United Kingdom decided to sell off over 50% of
its gold reserves putting severe pressure on the price of gold. All in all, the
Trust posted a gain of $3,721,267 or $4.39 per Unit in April.
In May, gold fell below $270 per ounce, a 20-year low. The Trust benefited from
this price decline since it held short gold positions during the month. The
interest rate rumors in the U.S., coupled with the inflation fears caused the
continuation of the decline in the U.S. 10-year and 30-year bonds. The Trust
held short positions in this sector during May, resulting in profits for the
period. In addition, the Trust held long positions in the Japanese government
bond that were profitable.
Notwithstanding these gains, the Trust posted a loss for May primarily due to
the markets moving against the Trust's long positions in energies and indices,
as well as from long positions in British pounds and short coffee positions.
During May, the Euro fell to its lowest level versus the U.S. dollar since its
inception at the beginning of the year. Pressure on the Euro surrounded the
conflict in Kosovo, as investors saw the dollar as a safe haven. Overall, the
Trust posted a loss of $201,809 or $.24 per Unit in May.
In June, the rumor of the Fed raising interest rates in the U.S. became a
reality. The Trust's short positions in the 10-year and 30-year bonds provided
profits and strong gains were posted as European bond prices
<PAGE>
continued to erode. A big reason was the weakening Euro, which declined 13%,
depreciating in a straight line against the U.S. dollar since its inception
January 1, 1999. Short positions in the German Bund, the German Bobl and U.K.
Gilt provided the lion's share of performance. Currencies also provided gains
for the Trust for the fourth consecutive month. Once again, the profit
opportunities came from long U.S. dollar positions versus the Euro and Swiss
franc. Pressure on the Euro which initially resulted from the conflict in
Kosovo, also seemed attributable to investors losing confidence in the Euro.
During June, the Trust continued to profit from its short positions in the
gold market. Long positions in the Nikkei stock index had been profitable for
the Trust for the entire year, as the percentage gain in this index for 1999 was
26.64%. Short positions in the agricultural complex, especially in coffee,
caused losses as the prices of these commodities rebounded. Additionally,
continued long positions in crude oil were favorable as oil prices gained nearly
80% in 1999. Overall, the Trust posted a gain of $2,541,334 or $3.02 per Unit in
June.
During the quarter there were 34,289.32 additional Units sold to the Beneficial
Owners for an investment of $4,048,034; there were no Units sold to the Managing
Owner. Investors redeemed a total of 38,895.88 Units during the quarter. At the
end of the quarter there were 834,110.57 Units outstanding owned by the
Beneficial Owners and 8,598.45 Units outstanding owned by the Managing Owner.
During the quarter, the Managing Owner, CIS Investments, Inc. experienced the
following officer changes: Shaun D. O'Brien replaced former Vice President &
Treasurer Richard A. Driver; James Clemens replaced Henry W. Gjersdal as
Assistant Secretary; Lillian Lundeen replaced Bruce H. Barnett as Assistant
Secretary.
During the fiscal quarter ended June 30, 1999, the Trust had no material 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, 2000
The Trust recorded a loss of $7,443,701 or $9.64 per Unit for the first quarter
of 2000. This compares to a loss of $2,085,640 or $2.51 per Unit for the first
quarter of 1999.
In the first month of the quarter the Trust posted a loss resulting primarily
from volatility in the currency sector. The Trust posted a loss for the second
month of the quarter resulting primarily from trading in global interest rates.
During the third month of the quarter currency destabilization and massive
capital shifts out of the U.S. dollar resulted in a loss for the Trust. Overall,
the first quarter of fiscal 2000 ended negatively for the Trust accounts managed
by JWH(R). At March 31, 2000, JWH was managing 100% of the Trust's assets in
three trading programs, the Financial and Metals Portfolio, the G-7 Currency
Portfolio and the JWH GlobalAnalytics(R) Family of Programs.
January 2000 marked the turning of the millennium. This coupled with the
build-up to Y2K came and went without a hitch. However, the currency sector was
all but quiet as extreme volatility prompted large swings in the price of the
U.S. dollar relative to the Japanese yen. Within the first couple of days of the
New Year, the Japanese banks intervened and started pouring money into the
dollar. This abrupt reversal in the dollar/yen relationship resulted in a
reversal of the Trust positions from long yen to short yen within a matter of
days. Similarly, yen trading relative to the euro and Swiss franc contributed to
Trust losses. Short Australian dollar positions proved difficult and also
resulted in losses. Stock indices, namely the
<PAGE>
Nikkei fell in response to volatility in the tech sector, which is factored into
that index. Long positions hurt the Trust performance. Despite realizing profits
from short U.S. bond and long Japanese Government Bond positions as well as
maintaining long profitable crude oil positions, the Trust posted overall
losses. The Trust posted a loss of $2,389,126 or $2.94 per Unit in January.
Changing expectations regarding economic growth and inflation created a
difficult trading environment in February. The strategic news item was the U.S.
Federal Reserve's decision to buy back part of the debt, which led to a powerful
rally in the U.S. 30-year bond. The decision by the Fed created havoc in the
Trust interest rate portfolio, which was dominated by short positions. Losses
were taken in North American, Asian and European interest rates. The yield on
the 10-year U.S. government bond currently exceeds that of the 30-year, creating
an inverted yield curve, which is a very unusual occurrence. Currency trading
was mixed. Profitable long U.S. dollar positions were bolstered by the revised
4th quarter GNP number, which reflected a robust economy. However, gains in the
dollar were offset by losses incurred by long Europe/short Japan positions.
Surging energy prices supported performance in the non-financial markets. Food
and grain markets were once again featureless. Precious metals trading suffered
as
<PAGE>
gold prices rallied and then fell sharply. On March 2, Cargill Investor Services
received a letter from Verne Sedlacek, President of John W. Henry & Company,
Inc. detailing modifications to the Financial and Metals trading program, which
represents 40% of the Trust. All changes are designed to add balance to the
program without giving up any upside potential. Most noteworthy are the dramatic
reductions in precious metals and Far Eastern interest rate trading, as well as
the addition of offshore stock indices, base metals, and the expansion of
non-dollar currency trading. JWH remains steadfast in their commitment to
research. The Trust posted a loss of $2,542,850 or $3.29 per Unit in February.
In March, profit taking in U.S. tech stocks led to massive capital shifts out of
the dollar and into yen. These events destabilized currency and stock markets
worldwide. The appreciation of the yen contributed the majority of the losses to
the Trust in that long positions in dollar and euro versus the yen both
suffered. Marginal gains in dollar positions against Europe and Australia's
currencies proved inadequate in offsetting these losses. Non-financial markets
were, for the most part, quiet in March. Profits in long crude oil, heating oil
and gasoline positions were reduced when OPEC agreed to expand oil production.
Performance in precious, as well as industrial metals was down slightly. The
food and grain markets were featureless. Positive performance in March came from
the interest rate sector. The 7% correction in tech stocks coupled with the U.S.
Treasury's continued buying of longer dated bonds led to positive performance in
the Trust's bond position. The European Central Bank's decision to raise short
term interest rates led to purchasing European bonds, which assisted the Trust's
position as well. The Trust posted a loss of $2,511,726 or $3.41 per Unit in
March.
During the quarter there were 6,778.21 additional Units sold to the Beneficial
Owners for an investment of $661,494; there were no Units sold to the Managing
Owner. Investors redeemed a total of 148,368.09 Units during the quarter. At the
end of the quarter there were 664,784.91 Units outstanding owned by the
Beneficial Owners and 8,602.14 Units outstanding owned by the Managing Owner.
During the fiscal quarter ended March 31, 2000, the Trust had no material 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, 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
<PAGE>
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 material 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>
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, 1999.
<PAGE>
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
Exhibit-27
b) Reports on Form 8-K
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned and thereunto duly authorized.
JWH GLOBAL TRUST
Date: November 9, 2000 By: CIS Investments, Inc.,
its Managing Owner
By:/s/ REBECCA STEINDEL
--------------------
Rebecca Steindel
Treasurer & Secretary
Duly authorized officer of the
Managing Owner and the Principal
Financial Officer of the Managing
Owner)
