<PAGE>
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, 2000
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
<PAGE>
JWH GLOBAL TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 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.
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,
2000, a total of 1,123,402.80 Units were sold to Beneficial Owners of the Trust
for an investment of $118,283,531 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
1,132,005.53 Units representing a total investment of $119,168,588 being sold in
the offering period commencing April 3, 1997.
<PAGE>
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.
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
<PAGE>
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 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.
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).
<PAGE>
(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 June 30, 2000 and
June 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-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
<PAGE>
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 June 30, 2000 was $4,721,245. To meet this
requirement, the Trust had on deposit with the Clearing Broker $42,798,223 in
segregated funds, $7,467,924 in secured funds and $3,915,051 in non-regulated
funds. At June 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 June 30,
2000:
<TABLE>
<CAPTION>
COMMODITY GROUP UNREALIZED GAIN/(LOSS)
<S> <C>
AGRICULTURAL COMMODITIES 204,915
FOREIGN CURRENCIES (700,544)
STOCK INDICES 30,983
ENERGIES 313,571
METALS (133,381)
INTEREST RATE INSTRUMENTS 113,694
---------------
TOTAL (170,762)
</TABLE>
The range of maturity dates of these exchange traded open contracts is July 2000
to June 2001. The average open trade equity for the period of January 1, 2000 to
June 30, 2000 is $3,748,746.
(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.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Following are Financial Statements for the fiscal quarter ended June 30, 2000
and the additional time frames as noted:
<TABLE>
<CAPTION>
Fiscal Quarter Year to Date Fiscal Year Fiscal Quarter Year to Date
Ended 6/30/00 Ended 6/30/00 Ended 12/31/99 Ended 6/30/99 Ended 6/30/99
-------------- ------------- -------------- -------------- -------------
<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>
Jun 30, 2000 Dec 31, 1999
------------ ------------
<S> <C> <C>
ASSETS
Receivable for units sold $ 5,605 $ 522,643
Equity in commodity futures
trading accounts:
Account balance 54,351,960 85,053,945
Unrealized gain (loss) on open futures
and forwards contracts (170,762) 3,339,311
----------- -----------
54,186,803 88,915,899
Interest receivable 248,508 377,036
Prepaid Initial O&O 253,331 319,417
----------- -----------
TOTAL ASSETS $54,688,642 $89,612,352
=========== ===========
LIABILITIES AND UNITHOLDERS' CAPITAL
Liabilities:
Accrued commissions due to CIS $ 294,110 $ 474,960
Accrued management fee 182,129 296,715
Accrued incentive fee 0 0
Accrued operating expenses 62,156 60,000
Redemptions payable 2,897,666 3,574,032
Selling and Offering Expenses Payable 22,565 36,779
----------- -----------
Total liabilities 3,458,627 4,442,486
Unitholders' Capital:
Beneficial owners (554,042.43 units outstanding
at 6/30/00, 806,374.79 units outstanding at
12/31/99) (see Note 1) 50,446,719 84,270,892
Managing owner (8,602.73 units outstanding at
6/30/00, 8,602.14 units outstanding at 12/31/99) 783,296 898,974
----------- -----------
Total unitholders' capital 51,230,015 85,169,866
----------- -----------
TOTAL LIABILITIES AND
UNITHOLDERS' CAPITAL $54,688,642 $89,612,352
=========== ===========
</TABLE>
These Statements 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)
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
JWH GLOBAL TRUST
STATEMENTS OF OPERATIONS
UNAUDITED
Apr 1, 2000 Jan 1, 2000 Apr 1, 1999 Jan 1, 1999
through through through through
Jun 30, 2000 Jun 30, 2000 Jun 30, 1999 Jun 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 $ 1,623,495 $(3,652,545) $6,329,326 $ 9,965,965
Change in unrealized gain (loss)
on open positions (2,784,224) (3,510,073) 2,684,301 (1,319,327)
Interest income 821,484 1,848,687 1,052,904 2,039,911
Foreign currency transaction gain (loss) (79,916) (389,061) (328,207) (389,260)
----------- ----------- ---------- -----------
Total revenues (419,161) (5,702,992) 9,738,323 10,297,289
EXPENSES
Commissions paid to CIS 971,914 2,204,324 1,622,160 3,135,722
Exchange fees 2,135 17,834 17,698 38,444
Management fees 603,687 1,372,165 1,010,841 1,956,001
Incentive fees 0 0 853,599 853,599
Organization & Offering Expenses 107,846 236,129 157,595 307,732
Operating expenses 15,100 30,100 15,639 30,639
----------- ----------- ---------- -----------
Total expenses 1,700,682 3,860,552 3,677,532 6,322,138
----------- ----------- ---------- -----------
NET PROFIT (LOSS) $(2,119,843) $(9,563,544) $6,060,792 $ 3,975,151
=========== =========== ========== ===========
PROFIT (LOSS) PER UNIT OF
OWNERSHIP INTEREST $ (3.82) $ (13.46) $ 7.17 $ 4.66
=========== =========== ========== ===========
(see Note 1) (see Note 1) (see Note 1) (see Note 1)
</TABLE>
These Statements of Operations, in the opinion of management, reflect all
adjustments necessary to fairly state the financial condition of JWH Global
Trust. (See Note 6)
See accompanying notes to financial statements.
<PAGE>
JWH GLOBAL TRUST
STATEMENT OF CHANGES IN UNITHOLDERS' CAPITAL
FROM JANUARY 1, 2000 THROUGH JUNE 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 10,125.46 985,900 57 985,957
(see Note 1)
Net profit (loss) (9,447,808) (115,735) (9,563,543)
Redemptions (see Note 1) (262,457.81) (25,362,265) 0 (25,362,265)
----------- ------------ --------- ------------
Unitholders' capital at June 30, 2000 554,042.43 $ 50,446,719 $ 783,296 $ 51,230,015
=========== ============ ========= ============
Net asset value per unit
January 1, 2000 (see Note 1) 104.51 104.51
Net profit (loss) per unit (see Note 1) (13.46) (13.46)
------------ ---------
Net asset value per unit
June 30, 2000 $ 91.05 $ 91.05
============ =========
</TABLE>
* Units of Beneficial Ownership.
This Statement of Changes in Unitholders' Capital, in the opinion of management,
reflect all adjustments necessary to fairly state the financial condition of JWH
Global Trust. (See Note 6)
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
Jun 30, 2000 Jun 30, 1999
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net profit (loss) $ (9,563,544) $ 3,975,151
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 sold 517,038 306,854
(Increase) Decrease in unrealized gain on open
futures and forward contracts 3,510,073 1,772,189
(Increase) Decrease in interest receivable 128,528 (25,293)
Decrease in Prepaid Organization and Offering Expenses 66,086 66,086
Increase (Decrease) in accrued liabilities (293,279) 753,954
Increase (Decrease) in redemptions payable (676,366) (2,471,789)
Increase (Decrease) in selling and offering expenses payable (14,214) 1,479
------------ -----------
Net cash provided by (used in)
operating activities (6,325,677) 4,378,632
------------ -----------
Cash flows from financing activities:
Additional Units Sold 985,957 11,054,289
Unitholder redemptions (25,362,265) (9,326,424)
------------ -----------
Net cash provided by (used in)
financing activities (24,376,308) 1,727,866
------------ -----------
Net increase (decrease) in cash (30,701,985) 6,106,498
Cash at beginning of period 85,053,945 90,182,744
------------ -----------
Cash at end of period $ 54,351,960 $96,289,242
============ ===========
</TABLE>
These Statements of Cash Flows, in the opinion of management, reflect all
adjustments necessary to fairly state the financial condition of JWH Global
Trust. (See Note 6)
See accompanying notes to financial statements.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
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.
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.
<PAGE>
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
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
<PAGE>
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-Registered Trademark-. 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-Registered Trademark-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 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
<PAGE>
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 Financial Data Schedule
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: August 14, 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)
