UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly report pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the period ended March 31, 1998 or
[ ] Transition report pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the transition period from ________________to_____________.
Commission file number 0-13298
DEAN WITTER CORNERSTONE FUND II
(Exact name of registrant as specified in its charter)
New York 13-3212871
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
No.)
c/o Demeter Management Corporation
Two World Trade Center, 62 Fl. New York, NY 10048
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 392-5454
(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>
<TABLE>
DEAN WITTER CORNERSTONE FUND II
INDEX TO QUARTERLY REPORT ON FORM 10-Q
March 31, 1998
<CAPTION>
PART I. FINANCIAL INFORMATION
<S> <C>
Item 1. Financial Statements
Statements of Financial Condition March 31, 1998
(Unaudited) and December 31, 1997..........................2
Statements of Operations for the Quarters Ended
March 31, 1998 and 1997 (Unaudited)........................3
Statements of Changes in Partners' Capital for the
Quarters Ended March 31, 1998 and 1997
(Unaudited)................................................4
Statements of Cash Flows for the Quarters Ended
March 31, 1998 and 1997 (Unaudited)........................5
Notes to Financial Statements (Unaudited)...............6-11
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.............. 12-15
PART II. OTHER INFORMATION
Item 1. Legal Proceedings................................16-17
Item 2. Changes in Securities and Use of Proceeds........17-19
Item 6. Exhibits and Reports on Form 8-K...................
.20
</TABLE>
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DEAN WITTER CORNERSTONE FUND II
STATEMENTS OF FINANCIAL CONDITION
<CAPTION>
March 31, December 31,
1998 1997
$ $
(Unaudited)
ASSETS
<S> <C> <C>
Equity in Commodity futures trading accounts:
Cash 27,945,885 29,293,294
Net unrealized gain on open contracts 1,047,487 2,003,679
Total Trading Equity 28,993,372 31,296,973
Interest receivable (DWR) 97,726 106,167
Due from DWR 71,406 27,883
Total Assets 29,162,504 31,431,023
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Redemptions payable 216,660 199,022
Accrued management fees 96,787 104,350
Common administrative expenses payable 29,744 21,640
Accrued incentive fees - 618,270
Total Liabilities 343,191 943,282
Partners' Capital
Limited Partners (7,851.739 and
7,967.401 Units, respectively) 28,042,859 29,677,943
General Partner (217.400 Units) 776,454 809,798
Total Partners' Capital 28,819,313 30,487,741
Total Liabilities and Partners' Capital 29,162,50431,431,023
NET ASSET VALUE PER UNIT 3,571.55 3,724.92
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER CORNERSTONE FUND II
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
For the Quarters Ended March 31,
1998 1997
$ $
REVENUES
<S> <C> <C>
Trading profit (loss):
Realized 82,266 2,913,866
Net change in unrealized (956,192) 30,702
Total Trading Results (873,926) 2,944,568
Interest Income (DWR) 307,482 319,898
Total Revenues (566,444) 3,264,466
EXPENSES
Brokerage commissions (DWR) 349,130 288,302
Management fees 295,273 284,584
Transaction fees and costs 32,877 29,161
Administrative expenses 8,104 11,527
Incentive fees - 349,649
Total Expenses 685,384 963,223
NET INCOME (LOSS) (1,251,828) 2,301,243
NET INCOME (LOSS) ALLOCATION
Limited Partners (1,218,484) 2,246,685
General Partner (33,344) 54,558
NET INCOME (LOSS) PER UNIT
Limited Partners (153.37) 250.96
General Partner (153.37) 250.96
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER CORNERSTONE FUND II
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For the Quarters Ended March 31, 1998 and 1997
(Unaudited)
<CAPTION>
Units of
Partnership Limited General
Interest Partners Partner Total
<S> <C> <C> <C>
<C>
Partners' Capital
December 31, 1996 9,205.342 $28,360,195 $685,975
$29,046,170
Offering of Units 91.201 304,200 - 304,200
Net Income - 2,246,685 54,558 2,301,2
43
Redemptions (342.414) (1,151,016) -
(1,151,016)
Partners' Capital
March 31, 1997 8,954.129 $29,760,064 $740,533
$30,500,597
Partners' Capital
December 31, 1997 8,184.801$29,677,943 $809,798 $30,48
7,741
Offering of Units 8.044 29,966 - 29,966
Net Loss - (1,218,484) (33,344) (1,251,82
8)
Redemptions (123.706) (446,566) -
(446,566)
Partners' Capital
March 31, 1998 8,069.139 $28,042,859 $776,454
$28,819,313
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER CORNERSTONE FUND II
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
For the Quarters Ended March 31,
1998 1997
$ $
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income (loss) (1,251,828) 2,301,243
Noncash item included in net income (loss):
Net change in unrealized 956,192 (30,702)
(Increase) decrease in operating assets:
Interest receivable (DWR) 8,441 (15,807)
Due from DWR (43,523) 123,327
Increase (decrease) in operating liabilities:
Accrued management fees (7,563) (18,812)
Common administrative expenses payable8,104 11,527
Accrued incentive fees (618,270) 28,903
Accrued brokerage commissions (DWR)- (48,055)
Accrued transaction fees and costs
- - (2,872)
Net cash provided by (used for) operating activities (948,447)
2,348,752
CASH FLOWS FROM FINANCING ACTIVITIES
Offering of units 29,966 304,200
Increase in redemptions payable 17,638 172,101
Redemptions of units (446,566) (1,151,016)
Net cash used for financing activities (398,962) (674,715)
Net increase (decrease) in cash (1,347,409) 1,674,037
Balance at beginning of period 29,293,294 28,509,266
Balance at end of period 27,945,885 30,183,303
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
DEAN WITTER CORNERSTONE FUND II
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
The financial statements include, in the opinion of management,
all adjustments necessary for a fair presentation of the results
of operations and financial condition of Dean Witter Cornerstone
Fund II (the "Partnership"). The financial statements and
condensed notes herein should be read in conjunction with the
Partnership's December 31, 1997 Annual Report on Form 10-K.
1. Organization
Dean Witter Cornerstone Fund II is a limited partnership
organized to engage in the speculative trading of commodity
futures contracts and forward contracts on foreign currencies.
The Partnership is one of the Dean Witter Cornerstone Funds,
comprised of Dean Witter Cornerstone Fund II, Dean Witter
Cornerstone Fund III, and Dean Witter Cornerstone Fund IV. The
general partner for the Partnership is Demeter Management
Corporation ("Demeter"). The non-clearing commodity broker is
Dean Witter Reynolds Inc. ("DWR"), with an unaffiliated broker,
Carr Futures, Inc. ("Carr"), providing clearing and execution
services. Both Demeter and DWR are wholly-owned subsidiaries of
Morgan Stanley Dean Witter & Co. ("MSDW"). The trading advisors
who make all trading decisions for the Partnership are Northfield
Trading L.P. and John W. Henry & Company, Inc. ("JWH").
<PAGE>
DEAN WITTER CORNERSTONE FUND II
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. Related Party Transactions
The Partnership's cash is on deposit with DWR and Carr in
commodity trading accounts to meet margin requirements as needed.
DWR pays interest on these funds based on current 13-week U.S.
Treasury Bill rates. Brokerage expenses incurred by the
Partnership are paid to DWR.
3. Financial Instruments
The Partnership trades futures and forward contracts in interest
rates, stock indices, commodities and currencies. Futures and
forwards represent contracts for delayed delivery of an
instrument at a specific date and price. Risk arises from
changes in the value of these contracts and the potential
inability of counterparties to perform under the terms of the
contracts. There are numerous factors which may significantly
influence the market value of these contracts, including interest
rate volatility. At March 31, 1998 and December 31, 1997, open
contracts were:
<PAGE>
DEAN WITTER CORNERSTONE FUND II
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Contract or Notional Amount
March 31, 1998 December 31, 1997
$ $
Exchange-Traded Contracts
Financial Futures:
Commitments to Purchase 6,386,000 30,057,000
Commitments to Sell 41,282,000 13,539,000
Commodity Futures:
Commitments to Purchase 3,568,000 6,148,000
Commitments to Sell 11,772,000 15,082,000
Foreign Futures:
Commitments to Purchase 32,258,000 25,543,000
Commitments to Sell 21,388,000 20,799,000
Off-Exchange-Traded
Forward Currency Contracts
Commitments to Purchase 19,404,000 17,705,000
Commitments to Sell 34,216,000 46,518,000
A portion of the amounts indicated as off-balance-sheet risk in
forward currency contracts is due to offsetting forward
commitments to purchase and to sell the same currency on the same
date in the future. These commitments are economically
offsetting, but are not offset in the forward market until the
settlement date.
The net unrealized gain on open contracts is reported as a
component of "Equity in Commodity futures trading accounts" on
the Statements of Financial Condition and totaled $1,047,487 and
$2,003,679 at March 31, 1998 and December 31, 1997, respectively.
Of the $1,047,487 net unrealized gain on open contracts at March
31, 1998, $436,549 related to exchange-traded futures contracts
and $610,938 related to off-exchange-traded forward currency
contracts.
<PAGE>
DEAN WITTER CORNERSTONE FUND II
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Of the $2,003,679 net unrealized gain on open contracts at
December 31, 1997, $1,675,343 related to exchange-traded futures
contracts and $328,336 related to off-exchange-traded forward
currency contracts.
Exchange-traded-futures contracts held by the Partnership at
March 31, 1998 and December 31, 1997 mature through December
1998. Off-exchange-traded forward currency contracts held by the
Partnership at March 31, 1998 and December 31, 1997 mature
through June 1998 and March 1998, respectively.
The contract amounts in the above table represent the
Partnership's extent of involvement in the particular class of
financial instrument, but not the credit risk associated with
counterparty nonperformance. The credit risk associated with
these instruments is limited to the amounts reflected in the
Partnership's Statements of Financial Condition.
The Partnership also has credit risk because either DWR or Carr
acts as the futures commission merchant or the counterparty, with
respect to most of the Partnership's assets. Exchange traded
futures contracts are marked to market on a daily basis, with
variations in value settled on a daily basis. DWR and Carr, as
the futures commission merchants for all of the Partnership's
exchange-traded futures and option contracts, are required
<PAGE>
DEAN WITTER CORNERSTONE FUND II
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
pursuant to regulations of the Commodity Futures Trading
Commission ("CFTC") to segregate from their own assets and for
the sole benefit of their commodity customers, all funds held by
them with respect to exchange-traded futures and option contracts
including an amount equal to the net unrealized gain on all open
futures and option contracts, which funds totaled $28,382,434 and
$30,968,637 at March 31, 1998 and December 31, 1997,
respectively. With respect to the Partnership's off-exchange-
traded forward currency forward contracts, there are no daily
settlements of variations in value nor is there any requirement
that an amount equal to the net unrealized gain on open forward
contracts be segregated. With respect to those off-exchange-
traded forward currency contracts, the Partnership is at risk to
the ability of Carr, the sole counterparty on all of such
contracts, to perform. Carr's parent, Credit Agricole Indosuez,
has guaranteed Carr's obligations to the Partnership.
<PAGE>
DEAN WITTER CORNERSTONE FUND II
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
For the quarter ended March 31, 1998 and the year ended December
31, 1997, the average fair value of financial instruments held
for trading purposes was as follows:
March 31, 1998
Assets Liabilities
$ $
Exchange-Traded Contracts:
Financial Futures 25,096,000 15,217,000
Commodity Futures 5,415,000 12,441,000
Foreign Futures 35,598,000 11,537,000
Off-Exchange-Traded Forward
Currency Contracts 41,481,000 60,550,000
December 31, 1997
Assets Liabilities
$ $
Exchange-Traded Contracts:
Financial Futures 32,004,000 25,556,000
Commodity Futures 14,417,000 12,696,000
Foreign Futures 26,042,000 10,396,000
Off-Exchange-Traded Forward
Currency Contracts 36,907,000 46,749,000
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity. The Partnership's assets are deposited in separate
commodity trading accounts with DWR and Carr, the commodity
brokers, and are used by the Partnership as margin to engage in
trading commodity futures contracts and forward contracts on
foreign currencies. DWR and Carr hold such assets at either
designated depositories or in securities approved by the CFTC for
investment of customer funds. The Partnership's assets held by
DWR and Carr may be used as margin solely for the Partnership's
trading. Since the Partnership's sole purpose is to trade in
commodity futures contracts and other commodity interests, it is
expected that the Partnership will continue to own such liquid
assets for margin purposes.
The Partnership's investment in commodity futures contracts and
other commodity interests may be illiquid. If the price for a
futures contract for a particular commodity has increased or
decreased by an amount equal to the "daily limit", positions in
the commodity can neither be taken nor liquidated unless traders
are willing to effect trades at or within the limit. Commodity
futures prices have occasionally moved the daily limit for
several consecutive days with little or no trading. Such market
conditions could prevent the Partnership from promptly
liquidating its commodity futures positions.
There is no limitation on daily price moves in trading forward
contracts on foreign currencies. The markets for some world
<PAGE>
currencies have low trading volume and are illiquid, which may
prevent the Partnership from trading in potentially profitable
markets or prevent the Partnership from promptly liquidating
unfavorable positions in such markets and subjecting it to
substantial losses. Either of these market conditions could
result in restrictions on redemptions.
Capital Resources. The Partnership does not have, nor does it
expect to have, any capital assets. Redemptions and exchanges of
additional Units of Limited Partnership in the future will affect
the amount of funds available for investments in subsequent
periods. As redemptions are at the discretion of Limited
Partners, it is not possible to estimate the amount and
therefore, the impact of future redemptions.
Results of Operations
For the Quarter Ended March 31, 1998
For the quarter ended March 31, 1998, the Partnership's total
trading losses net of interest income were $566,444. During the
first quarter, the Partnership recorded a loss in Net Asset Value
per Unit. The most significant losses were experienced from
short Japanese yen positions as the value of the yen reversed
higher versus the U.S. dollar during January and early February
after trending lower previously. Smaller currency losses were
recorded from inconsistent movement in the value of the South
African rand during January and March. Currency gains recorded
during March from short Swiss franc and German mark positions, as
the value of these currencies weakened versus the U.S. dollar,
<PAGE>
offset a portion of these losses. In financial futures, losses
were recorded from trading Nikkei Index futures as Japanese
equity prices moved in a short-term volatile pattern throughout
the quarter amid uncertainty regarding an economic stimulus
package. These losses were partially offset by gains from long
European bond futures as prices in these markets trended higher
during a majority of the quarter. Smaller losses were recorded
in metals from short gold futures positions during January as
gold prices reversed higher after trending lower in previous
months. A portion of the Partnership's overall losses for the
quarter were offset by gains from short crude oil futures
positions as oil prices trended lower during January, February
and early March. Total expenses for the quarter were $685,384,
resulting in a net loss of $1,251,828. The value of an
individual Unit in the Partnership decreased from $3,724.92 at
December 1997 to $3,571.55 at March 31, 1998.
For the Quarter Ended March 31, 1997
For the quarter ended March 31, 1997, the Partnership's total
trading revenues including interest income were $3,264,466.
During the first quarter, the Partnership posted an increase in
Net Asset Value per Unit. The most significant gains were
recorded in currency trading as the value of the U.S. dollar
increased relative to most other world currencies during January
and February. This upward move in value resulted in gains from
short positions in the Japanese yen, most major European
currencies, as well as the Singapore dollar. Smaller currency
gains were recorded during March from short positions in the
<PAGE>
Japanese yen and Singapore dollar, as the value of the U.S.
dollar continued to strengthen relative to these currencies.
Gains were also recorded in the soft commodities markets from
long coffee futures positions as prices moved higher during
January and February. In metals, a decline in gold prices to
their lowest levels in over three years, resulted in additional
profits being recorded during January. A portion of the gains in
the first quarter was offset by losses recorded in the energy
markets during January and March as oil and gas prices moved in a
short-term volatile pattern. Losses were recorded in the
financial futures markets during February and March as global
interest rate futures prices moved in a choppy pattern. Smaller
losses were recorded in the agricultural futures markets. Total
expenses for the period were $963,223, generating net income of
$2,301,243. The value of an individual Unit in the Partnership
increased from $3,155.36 at December 31, 1996 to $3,406.32 at
March 31, 1997.
<PAGE>
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
On September 6, 10, and 20, 1996, and on March 13, 1997, similar
purported class actions were filed in the Superior Court of the
State of California, County of Los Angeles, on behalf of all
purchasers of interests in limited partnership commodity pools
sold by DWR. Named defendants include DWR, Demeter, Dean Witter
Futures & Currency Management Inc., MSDW, (all such parties
referred to hereafter as the "Dean Witter Parties"), the
Partnership, certain other limited partnership commodity pools of
which Demeter is the general partner, and certain trading
advisors (including JWH) to those pools. On June 16, 1997, the
plaintiffs in the above actions filed a consolidated amended
complaint, alleging, among other things, that the defendants
committed fraud, deceit, negligent misrepresentation, various
violations of the California Corporations Code, intentional and
negligent breach of fiduciary duty, fraudulent and unfair
business practices, unjust enrichment, and conversion in the sale
and operation of the various limited partnerships commodity
pools. Similar purported class actions were also filed on
September 18 and 20, 1996, in the Supreme Court of the State of
New York, New York County, and on November 14, 1996 in the
Superior Court of the State of Delaware, New Castle County,
against the Dean Witter Parties and certain trading advisors
(including JWH) on behalf of all purchasers of interests in
various limited partnership commodity pools, including the
Partnership, sold by DWR. A consolidated and amended complaint in
the action pending in the
<PAGE>
Supreme Court of the State of New York was filed on August 13,
1997, alleging that the defendants committed fraud, breach of
fiduciary duty, and negligent misrepresentation in the sale and
operation of the various limited partnership commodity pools. On
December 16, 1997, upon motion of the plaintiffs, the action
pending in the Superior Court of the State of Delaware was
voluntarily dismissed without prejudice. The complaints seek
unspecified amounts of compensatory and punitive damages and
other relief. It is possible that additional similar actions may
be filed and that, in the course of these actions, other parties
could be added as defendants. The Dean Witter Parties believe
that they and the Partnership have strong defenses to, and they
will vigorously contest, the actions. Although the ultimate
outcome of legal proceedings cannot be predicted with certainty,
it is the opinion of management of the Dean Witter Parties that
the resolution of the actions will not have a material adverse
effect on the financial condition or the results of operations of
any of the Dean Witter Parties or the Partnership.
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Dean Witter Cornerstone Fund I ("Cornerstone I"); Dean Witter
Cornerstone Fund II ("Cornerstone II"), and Dean Witter Cornerstone
III ("Cornerstone III") collectively registered 250,000 Units of
Limited Partnership Interest ("Units") pursuant to a Registration
Statement on Form S-1, which became effective on May 31, 1984 (the
"Registration Statement") (SEC File Numbers 2-88587; 88587-01;
88587-02). As contemplated in the Registration Statement, an
additional fund, Dean Witter Cornerstone Fund IV ("Cornerstone IV"
<PAGE>
and, collectively with Cornerstone I, Cornerstone II and
Cornerstone III, the "Partnerships") was registered pursuant to
Post-Effective Amendment No. 5 to the Registration Statement, which
became effective on February 6, 1987. The managing underwriter for
the Partnerships is DWR.
The offering for Cornerstone II originally commenced on May 31,
1984 and currently continues, with 41,701.582 Units sold through
March 31, 1998. Through March 31, 1998, an aggregate of
235,388.674 Units of the Partnership have been sold leaving
14,611.326 Units remaining available for sale as of April 1, 1998.
The aggregate offering amount registered was $262,496,000, based
upon the initial offering price of $1,050 per Unit ($1,000 initial
Net Asset Value per Unit, plus a $50 per Unit sales charge on all
but 80 Units sold to the Partnerships' initial trading managers)
during the Initial Offering periods of May 31, 1984 through
November 30, 1984 with respect to Cornerstone I, Cornerstone II and
Cornerstone III, and February 6, 1987 through May 6, 1987 with
respect to Cornerstone IV.
After the respective Initial Offering Periods, Units in the
Partnerships were sold at 107.625% of Net Asset Value per unit,
including a charge for offering expenses of 2.5% of Net Asset Value
per Unit, and a sales charge of 5% of the sum of the Net Asset
Value per Unit and the charge for offering expenses, during the
"Continuing Offering".
<PAGE>
The aggregate price of Units sold through March 31, 1998 with
respect to Cornerstone II is $65,634,485.
Effective September 30, 1984, Cornerstone II, Cornerstone III and
Cornerstone IV were closed to new investors; Units have been sold
since then solely in "Exchanges" with existing investors, at 100%
of Net Asset Value per Unit. DWR has been paying all expenses in
connection with the offering of Units since September 30, 1994,
without reimbursement.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
A) Exhibits. - None.
B) Reports on Form 8-K. - None.
<PAGE>
SIGNATURE
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, thereunto duly authorized.
Dean Witter Cornerstone Fund II
(Registrant)
By: Demeter Management Corporation
(General Partner)
May 11, 1998 By:
Patti L. Behnke
Chief Financial Officer
The General Partner which signed the above is the only party
authorized to act for the Registrant. The Registrant has no
principal executive officer, principal financial officer,
controller, or principal accounting officer and has no Board of
Directors.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from Dean
Witter Cornerstone Fund II and is qualified in its entirety by
reference to such financial instruments.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 27,945,885
<SECURITIES> 0
<RECEIVABLES> 169,132<F1>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 29,162,504<F2>
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 29,162,504<F3>
<SALES> 0
<TOTAL-REVENUES> (566,444)<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 685,384
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,251,828)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,251,828)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,251,828)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Receivables include due from DWR of $71,406 and interest receivable
of $97,726.
<F2>In addition to cash and receivables, total assets include net unrealized
gain on open contracts of $1,047,487.
<F3>Liabilities include redemptions payable of $216,660, accrued management
fees of $96,787 and common administrative expenses payable of $29,744.
<F4>Total revenue includes realized trading revenue of $82,266, net
change in unrealized of $(956,192) and interest income of $307,482.
</FN>
</TABLE>
