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 0-13299
DEAN WITTER CORNERSTONE FUND III
(Exact name of registrant as specified in its charter)
New York 13-3190919
(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 III
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 III
STATEMENTS OF FINANCIAL CONDITION
<CAPTION>
March 31, December 31,
1998 1997
$ $
(Unaudited)
ASSETS
<S> <C> <C>
Equity in Commodity futures trading accounts:
Cash 41,376,875 39,762,715
Net unrealized gain on open contracts1,631,286 1,938,295
Net option premiums (27,500) (158,765)
Total Trading Equity 42,980,661 41,542,245
Interest receivable (DWR) 143,794 145,100
Due from DWR 49,908 94,981
Total Assets 43,174,363 41,782,326
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Redemptions payable 212,145 429,759
Accrued management fees 143,060 138,480
Common administrative expenses payable 113,255 99,713
Total Liabilities 468,460 667,952
Partners' Capital
Limited Partners (13,091.056 and
13,352.334 Units, respectively) 41,494,750 39,970,539
General Partner (382.103 Units) 1,211,153 1,143,835
Total Partners' Capital 42,705,903 41,114,374
Total Liabilities and Partners' Capital 43,174,363 41,782,326
NET ASSET VALUE PER UNIT 3,169.70 2,993.52
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER CORNERSTONE FUND III
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
For the Quarters Ended March 31,
1998 1997
$ $
REVENUES
<S> <C> <C>
Trading profit (loss):
Realized 3,312,479 4,228,547
Net change in unrealized (307,009) (5,500)
Total Trading Results 3,005,470 4,223,047
Interest Income (DWR) 430,094 453,531
Total Revenues 3,435,564 4,676,578
EXPENSES
Brokerage commissions (DWR) 556,591 586,097
Management fees 418,738 444,564
Transaction fees and costs 56,265 59,614
Common administrative expenses 13,542 19,322
Total Expenses 1,045,136 1,109,597
NET INCOME 2,390,428 3,566,981
NET INCOME ALLOCATION:
Limited Partners 2,323,110 3,478,583
General Partner 67,318 88,398
NET INCOME PER UNIT:
Limited Partners 176.18 231.35
General Partner 176.18 231.35
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER CORNERSTONE FUND III
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 15,479.706 $40,997,752 $1,037,606 $42,035
,358
Offering of Units 1.841 5,000 - 5,000
Net Income - 3,478,583 88,398 3,566,981
Redemptions (689.609) (2,017,565) -
(2,017,565)
Partners' Capital
March 31, 1997 14,791.938 $42,463,770 $1,126,004 $43,589
,774
Partners' Capital
December 31, 1997 13,734.437$39,970,539 $1,143,835$41,114
,374
Net Income - 2,323,110 67,3182,390,428
Redemptions (261.278) (798,899) -
(798,899)
Partners' Capital
March 31, 1998 13,473.159 $41,494,750 $1,211,153 $42
,705,903
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER CORNERSTONE FUND III
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
For the Quarters Ended March 31,
1998 1997
$ $
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income 2,390,428 3,566,981
Noncash item included in net income:
Net change in unrealized 307,009 5,500
(Increase) decrease in operating assets:
Net option premiums (131,265) 27,908
Interest receivable (DWR) 1,306 (17,391)
Due from DWR 45,073 (26,232)
Increase (decrease) in operating liabilities:
Accrued management fees 4,580 5,323
Common administrative expenses payable13,542 19,323
Accrued brokerage commissions (DWR)- 11,049
Accrued transaction fees and costs -
(3,094)
Net cash provided by operating activities 2,630,673 3,589,367
CASH FLOWS FROM FINANCING ACTIVITIES
Offering of units - 5,000
Increase (decrease) in redemptions payable(217,614)42,552
Redemptions of units (798,899) (2,017,565)
Net cash used for financing activities (1,016,513)(1,970,013)
Net increase in cash 1,614,160 1,619,354
Balance at beginning of period 39,762,715 40,587,011
Balance at end of period 41,376,875 42,206,365
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
DEAN WITTER CORNERSTONE FUND III
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 III (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 III is a limited partnership
organized to engage in the speculative trading of futures
contracts, options contracts, and forward contracts. 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 Abraham
Trading Co., Welton Investment Systems Corporation and Sunrise
Capital Management.
<PAGE>
DEAN WITTER CORNERSTONE FUND III
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, options, and forward contracts in
interest rates, stock indices, commodities and currencies.
Futures and forwards represent contracts for delayed delivery of
an instrument at a specified 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 III
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Contract or Notional Amount
March 31, 1998 December 31, 1997
$ $
Exchange-Traded Contracts
Financial Futures:
Commitments to Purchase 30,969,000 50,242,000
Commitments to Sell 14,399,000 21,172,000
Options Written 4,173,000 -
Commodity Futures:
Commitments to Purchase 8,216,000 8,055,000
Commitments to Sell 20,638,000 31,622,000
Options Written 485,000 -
Foreign Futures:
Commitments to Purchase 60,626,000 50,870,000
Commitments to Sell 20,033,000 42,064,000
Off-Exchange-Traded
Forward Currency Contracts
Commitments to Purchase 13,473,000 27,863,000
Commitments to Sell 29,648,000 41,794,000
A portion of the amounts indicated as off-balance-sheet risk in
forward currency contracts is due to offsetting forward
commitments to purchase and 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 $1,631,286 and
$1,938,295 at March 31, 1998 and December 31, 1997, respectively.
Of the $1,631,286 net unrealized gain on open contracts at March
31, 1998, $1,171,945 related to exchange-traded futures contracts
<PAGE>
DEAN WITTER CORNERSTONE FUND III
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
and $459,341 related to off-exchange traded forward currency
contracts.
Of the $1,938,295 net unrealized gain on open contracts at
December 31, 1997, $2,168,497 related to exchange-traded futures
contracts and $(230,202) 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 October 1998
and June 1998, respectively. 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 and option contracts are marked to market on a daily
<PAGE>
DEAN WITTER CORNERSTONE FUND III
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 options contracts, are
required 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 $42,548,820 and
$41,931,212 at March 31, 1998 and December 31, 1997 respectively.
With respect to the Partnership's off-exchange-traded forward
currency 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
counterparty on all of such contracts, to perform. Carr's
parent, Credit Agricole Indosuez, has guaranteed Carr's
obligations to the Partnership.
For the quarter ended March 31, 1998 and for the year ended
December 31, 1997, the average fair value of financial
instruments held for trading purposes was as follows:
<PAGE>
DEAN WITTER CORNERSTONE FUND III
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
March 31, 1998
Assets Liabilities
$ $
Exchange-Traded Contracts:
Financial Futures 57,390,000 14,454,000
Options on Financial Futures - 23,616,000
Commodity Futures 6,208,000 26,352,000
Options on Commodity Futures - 121,000
Foreign Futures 82,733,000 26,404,000
Off-Exchange-Traded Forward
Currency Contracts 35,752,000 45,639,000
December 31, 1997
Assets Liabilities
$ $
Exchange-Traded Contracts:
Financial Futures 82,881,000 46,462,000
Options on Financial Futures 698,000 64,639,000
Commodity Futures 26,095,000 21,377,000
Options on Commodity Futures 1,117,000 4,712,000
Foreign Futures 44,764,000 26,219,000
Options on Foreign Futures 7,229,000 -
Off-Exchange-Traded Forward
Currency Contracts 12,599,000 13,558,000
<PAGE>
Item 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Liquidity. The Partnership's assets on deposit in separate
commodity trading accounts with DWR and Carr, the commodity
brokers, and are used by the Partnership as margin to engage in
commodity futures contract trading. DWR and Carr hold such
assets in 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 currency. The markets for some world
currencies have low trading volume and are illiquid which may
<PAGE>
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
Units of Limited Partnership Interest 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 revenues including interest income were $3,435,564.
During the first quarter, the Partnership recorded a gain in Net
Asset Value per Unit. The most significant gains were recorded
from long U.S. and European stock index futures positions as
prices in these markets trended consistently higher throughout
the quarter. Additional profits were recorded from long European
bond futures positions as prices in these markets also trended
higher during the quarter. In energies, gains were recorded from
short crude oil futures positions as oil prices declined during
January and February as tensions eased in the Middle East.
Smaller gains were recorded from short positions in livestock
futures as prices
<PAGE>
in these markets moved lower during February. These gains were
partially offset by losses experienced in metals from long silver
futures positions as silver prices reversed lower during March
after trending steadily higher during January and February and
from short gold futures positions as gold prices reversed higher
during January. Smaller losses were recorded in currencies as
the value of the Australian dollar and British pound moved
without consistent direction throughout a majority of the
quarter. Total expenses for the period were $1,045,136,
resulting in net income of $2,390,428. The value of an
individual Unit in the Partnership increased from $2,993.52 at
December 31, 1997 to $3,169.70 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 $4,676,578.
During the first quarter, the Partnership posted an increase in
Net Asset Value per Unit. The most significant gains were
recorded due to a strong upward trend in coffee prices during
January and February. In the agricultural markets, gains were
recorded during February and March from long soybean and corn
futures positions, as prices in these markets also trended
higher. Additional gains were recorded during January and
February in the currency markets as the value of the U.S. dollar
strengthened relative to most major European currencies, as well
as the Japanese yen. A portion of these gains was offset by
losses recorded from transactions involving the British pound, as
well as the Canadian and Australian dollars. During January,
gains were
<PAGE>
recorded from long base metals futures positions as zinc and
copper prices moved higher. A portion of the Partnership's gains
during the quarter was offset by losses recorded in the energy
markets during January and March as gas and oil prices moved
without consistent direction. Smaller losses were experienced in
the financial futures markets as gains recorded during January in
global stock index futures were offset by losses recorded from
choppy price movement in global interest rate futures during
February and March. Total expenses for the period were
$1,109,597, generating net income of $3,566,981. The value of an
individual Unit in the Partnership increased from $2,715.51 at
December 31, 1996 to $2,946.86 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 interest in limited partnership commodity pools
sold by DWR. Named defendants include DWR, Demeter, Dean Witter
Futures & Currency Management Inc. ("DWFCM"), 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 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 partnership 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 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
<PAGE>
the action pending in the 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
<PAGE>
additional fund, Dean Witter Cornerstone Fund IV ("Cornerstone IV"
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 III originally commenced on May 31,
1984 and currently continues with 74,400.002 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 $137,116,764.
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 III
(Registrant)
By: Demeter Management Corporation
(General Partner)
May 11, 1998 By: /s/ Patti L. Behnke
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 III 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> 41,376,875
<SECURITIES> 0
<RECEIVABLES> 193,702<F1>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 43,174,363<F2>
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 43,174,363<F3>
<SALES> 0
<TOTAL-REVENUES> 3,435,564<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,045,136
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,390,428
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,390,428
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,390,428
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Receivables include interest receivable of $143,794 and due from
DWR of $49,908.
<F2>In addition to cash and receivables, total assets include net unrealized
gain on open contracts of $1,631,286 and net option premiums of $(27,500).
<F3>Liabilities include redemptions payable of $212,145, accrued management
fees of $143,060 and common administrative expenses payable of $113,255.
<F4>Total revenue includes realized trading revenue of $3,312,479, net
change in unrealized of $(307,009) and interest income of $430,094.
</FN>
</TABLE>
