SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
for the quarterly period ended March 31, 1998
Commission File Number 0-16515
IDS MANAGED FUTURES, L.P.
(Exact name of registrant as specified in its charter)
Delaware 06-1189438
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification #)
233 South Wacker Dr., Suite 2300, Chicago, IL 60606
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312)460-4000
Not Applicable
Formername, former address and former fiscal year,
if changed since last report.
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No __
<TABLE>
Part I. Financial Information
Item 1. Financial Statements
Following are Financial Statements for the fiscal quarter ended March 31, 1998,
and the additional time frames as noted:
Fiscal Quarter Year to Date Fiscal Year Fiscal Quarter Year to Date
Ended 3/31/98 To 3/31/98 Ended 12/31/97 Ended 3/31/97 To 3/31/97
-------------- -------------- -------------- --------------------------
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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
IDS MANAGED FUTURES, L.P.
STATEMENTS OF FINANCIAL CONDITION
UNAUDITED
Mar 31, 1998 Dec 31, 1997
--------------- -------------
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ASSETS
Cash at Escrow Agent $0 $0
Equity in commodity futures
trading accounts:
Account balance 48,792,699 47,936,067
Unrealized gain on open
futures contracts 1,385,270 2,454,648
--------------- -------------
50,177,969 50,390,715
Interest receivable 182,609 201,717
Prepaid G.P. fee 510,087 0
--------------- -------------
Total assets $50,870,665 $50,592,432
=============== =============
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accrued commissions on open
futures contracts due to AXP Advisors and $129,012 $103,054
Accrued management fee 149,823 150,667
Accrued incentive fee 235,624 184,102
Accrued operating expenses 111,534 114,033
Redemptions payable 541,822 490,756
Selling and Offering Expenses Payable 0 86,819
--------------- -------------
Total liabilities 1,167,814 1,129,431
Partners' Capital:
Limited partners ( 141,896.63 units 48,754,789 48,541,669
outstanding at 3/31/98, 137,994.05
units outstanding at 12/31/97) (see Note 1)
General partners (2,759.25 units outstanding 948,062 921,332
3/31/98 and 2,619.16 at 12/31/97) (see Note 1)
--------------- -------------
Total partners' capital 49,702,851 49,463,001
--------------- -------------
Total liabilities and
partners' capital $50,870,665 $50,592,432
=============== =============
In the opinion of management, these statements reflect all adjustments necessary
to fairly state the financial condition of IDS Managed Futures, L.P. (See Note 6)
IDS MANAGED FUTURES, L.P.
STATEMENTS OF OPERATIONS
UNAUDITED
Jan 1, 1998 Jan 1, 1998 Jan 1, 1997 Jan 1, 1997
through through through through
Mar 31, 1998 Mar 31, 1998 Mar 31, 1997 Mar 31, 1997
--------------- ------------- -------------- -------------
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REVENUES
Gains on trading of commodity futures
and forwards contracts, physical
commodities and related options:
Realized gain (loss) on closed positions $731,566 $731,566 $2,018,205 $2,018,205
Change in unrealized gain (loss)
on open positions (1,069,378) (1,069,378) 3,661 3,661
Interest income 546,632 546,632 471,237 471,237
Foreign currency transaction gain (loss) (86,032) (86,032) (281,612) (281,612)
--------------- ------------- -------------- -------------
Total revenues 122,789 122,789 2,211,492 2,211,492
EXPENSES
Commissions paid to AXP Advisors and CIS 380,620 380,620 210,790 210,790
Exchange fees 12,542 12,542 8,076 8,076
Management fees 442,346 442,346 371,749 371,749
Incentive fees 235,624 235,624 62,390 62,390
General Partner fee to IDS Futures Corp. and 170,029 170,029 138,502 138,502
Operating expenses 23,020 23,020 (22,124) (22,124)
--------------- ------------- -------------- -------------
Total expenses 1,264,180 1,264,180 769,384 769,384
--------------- ------------- -------------- -------------
Net profit (loss) ($1,141,392) ($1,141,392) $1,442,108 $1,442,108
=============== ============= ============== =============
PROFIT (LOSS) PER UNIT OF
PARTNERSHIP INTEREST ($8.18) ($8.18) $11.59 $11.59
=============== ============= ============== =============
(see Note 1) (see Note 1) (see Note 1) (see Note 1)
This Statement of Operations, in the opinion of management, reflects all adjustments
necessary to fairly state the financial condition of IDS Managed Futures, L. P. (See Note 6)
IDS MANAGED FUTURES, L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For the period January 1, 1998 through March 31, 1998
UNAUDITED
Limited General
Units* Partners Partners Total
--------------- ------------- -------------- -------------
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Partners' capital at January 1, 1998 137,853.96 $48,541,669 $921,332 $49,463,001
Net profit (loss) (1,168,122) (8,270) (1,176,392)
Additional Units Sold 7,337.45 2,749,500 50,000 2,799,500
(see Note 1)
Less Selling and Organizational Costs (240,969) (15,000) (255,969)
Redemptions (see Note 1) (3,294.78) (1,127,289) (1,127,289)
--------------- ------------- -------------- -------------
Partners' capital at March 31, 1998 141,896.63 $48,754,789 $948,062 $49,702,851
=============== ============= ============== =============
Net asset value per unit
January 1, 1998 (see Note 1) 351.77 351.77
Net profit (loss) per unit (see Note 1) (8.18) (8.18)
------------- --------------
Net asset value per unit
March 31, 1998 $343.59 $343.59
* Units of Limited Partnership interest.
This Statement of Changes in Partners' Capital, in the opinion of management, reflects all adjustments
necessary to fairly state the financial condition of IDS Managed Futures, L. P. (See Note 6)
IDS MANAGED FUTURES, L.P.
STATEMENTS OF CASH FLOWS
UNAUDITED
Jan 1, 1998 Jan 1, 1997
through through
Mar 31, 1998 Mar 31, 1997
--------------- -------------
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Cash flows from operating activities:
Net profit (loss) ($1,141,392) $1,442,108
Adjustments to reconcile net profit
(loss) to net cash provided by
(used in) operating activities:
Change in assets and liabilities:
Unrealized gain (loss) on open
futures contracts 1,069,378 (3,661)
Interest receivable 19,108 (5,497)
Prepaid general partner fee (510,087) (415,554)
Accrued liabilities 74,137 (868,676)
Redemptions payable 51,066 68,159
Selling and Offering Expenses Payable (86,819) 62,023
--------------- -------------
Net cash provided by (used in)
operating activities (524,610) 278,901
Cash flows from financing activities:
Additional Units Sold 2,799,500 3,371,200
Selling and Offering Expenses (255,969) (296,158)
Partner redemptions (1,127,289) (974,326)
--------------- -------------
Net cash provided by (used in)
financing activities 1,416,242 2,100,716
--------------- -------------
Net increase (decrease) in cash 891,632 2,379,617
Cash at beginning of period 47,936,067 40,648,882
--------------- -------------
Cash at end of period $48,827,699 $43,028,499
=============== =============
This Statement of Cash Flows, in the opinion of management, reflects all adjustments
necessary to fairly state the financial condition of IDS Managed Futures, L. P. (See Note 6)
</TABLE>
IDS MANAGED FUTURES, L.P.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
(1) GENERAL INFORMATION AND SUMMARY
IDS Managed Futures, L.P. (the "Partnership") is a limited
partnership organized on December 16, 1986 under the Delaware
Revised Uniform Limited Partnership Act. The Partnership was
formed to speculatively trade commodity interests, including
futures contracts, forward contracts, physical commodities, and
related options thereon pursuant to the trading instructions of
independent trading advisors. The General Partners of the
Partnership are CIS Investments, Inc. ("CISI") and IDS Futures
Corporation ("IDS Futures") (collectively, the "General
Partners"). The General Partners are registered commodity pool
operators under the Commodity Exchange Act, as amended (the "CE
Act") and are responsible for administering the business and
affairs of the Partnership exclusive of trading decisions. CISI
is an affiliate of Cargill Investor Services, Inc. ("CIS"), the
clearing broker for the Partnership. IDS Futures is an
affiliate of American Express Financial Advisors Inc. ("AXP
Advisors"), formerly IDS Financial Services Inc., which acts as
the Partnership's introducing broker and selling agent. Trading
decisions for the Partnership were made by two independent
commodity trading advisors, John W. Henry & Company, Inc. and
Sabre Fund Management Limited, until July 7, 1997. Effective
July 8, 1997 the General Partners added Welton Investment
Corporation as an additional independent commodity trading
advisor for the Partnership and the assets of the Partnership
were re-allocated between the three independent commodity
trading advisors. The General Partners elected not to renew the
Advisory Contract of Sabre Fund Management Limited and it
expired on December 31, 1997. Effective January 1,1998, all of
the assets of the Partnership are managed by John W. Henry &
Company, Inc. and Welton Investment Corporation.
Units of limited partnership interest ("Units") were offered
initially by AXP Advisors commencing March 27, 1987 and
concluding June 16, 1987. Subsequent offerings commenced March
29, 1993, January 31, 1994, June 26, 1995 and August 26, 1997.
The total amount of the initial offering was $7,500,000 and the
total amount of the combined reopenings was $80,000,000.
Investors purchase Units at the then current net asset value per
Unit on the last business day of the month; investors affiliated
with the selling agent of the Partnership are not required to
pay selling commissions, and the current offering has varied
selling commission rates depending on the total dollar amount of
the investment. Therefore, the total number of Units authorized
for the Partnership is not determinable and therefore is not
disclosed in the financial statements.
The Units are currently offered pursuant to a Prospectus dated
May 1, 1998. The minimum subscription size for the offering is
$1,000 for investors not affiliated with AXP Advisors. During
the quarter ending March 31, 1998 the Partnership sold 7,337.44
Units for $2,749,500. By March 31, 1998, a total of 69,850.49
Units representing a total investment of $23,203,309 of limited
partnership interest had been sold in the offering period
commencing June 26, 1995. During the quarter ended March 31,
1998, selling commissions of $158,484 were paid to AXP Advisors
by the new limited partners and all new investors paid
organization and offering expenses totaling $82,485.
The Offering Expense charged pursuant to the registration
statement effective June 26, 1995 was reduced to 3% from the 6%
which had been charged in the previous two offerings.
No redemptions are permitted by a subscriber during the first
six months after he or she has been admitted to the Partnership.
Thereafter, a Limited Partner may cause any or all of his or
her Units to be redeemed by the Partnership effective as of the
last trading day of any month of the Partnership based on the
Net Asset Value per Unit on ten days written notice to the
General Partners. There are no additional charges to the
investors at redemption. The General Partners may declare
additional redemption dates upon notice to the Limited Partners.
Payment will be made within ten business days of the effective
date of the redemption. The Partnership's Restated and Amended
Limited Partnership Agreement contains a full description of
redemption and distribution procedures.
The Partnership shall be terminated on Dec. 31, 2006 if none of
the following occur prior to that date: (1) investors holding
more than 50 percent of the outstanding Units notify the General
Partners to dissolve the Partnership as of a specific date; (2)
withdrawal, removal, insolvency, bankruptcy, legal disability or
dissolution of the General Partners of the Partnership; (3)
bankruptcy or insolvency of the Partnership; (4) decrease in the
net asset value to less than $500,000; (5)the Partnership is
declared unlawful; or (6) the net asset value per Unit declines
to less than $125 per Unit and the General Partners elect to
withdraw from the Partnership.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting and reporting policies of the Partnership conform
to generally accepted accounting principles and to general
practices within the commodities industry. The following is a
description of the more significant of those policies which the
Partnership follows in preparing its financial statements.
Financial Accounting Standards Board ("FASB") Interpretation
No. 39 Reporting
Reporting in accordance with FASB Interpretation No. 39 ("FIN
39") is not applicable to the Partnership and the provisions of
FIN 39 do not have any effect on the Partnership's financial
statements.
Revenue Recognition
Commodity futures contracts, forward contracts, physical
commodities and related options are recorded on the trade date.
All such transactions are reported on an identified cost basis.
Realized gains and losses are determined by comparing the
purchase price to the sales price when the trades are offset.
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 related options and
cash dealer prices at a predetermined time for forward
contracts, physical commodities and their related options) as of
the last business day of the quarter-end.
The Partnership earns interest on 100 percent of the
Partnership's average monthly cash balance on deposit with the
Clearing Broker at a rate equal to 90 percent of the average
90-day Treasury bill rate for U.S. Treasury bills issued during
that month.
Redemptions
No redemptions are permitted by a subscriber during the first
six months after he or she has been admitted to the Partnership.
Thereafter, a limited partner may cause any or all of his or
her units to be redeemed by the Partnership effective as of the
last trading day of any month of the Partnership based on the
Net Asset Value per unit on 10 days' written notice to the
General Partners. Payment will be made within 10 business days
of the effective date of the redemption. The Partnership's
Limited Partnership Agreement contains a full description of
redemption and distribution procedures.
Commissions
Brokerage commissions, National Futures Association fees, and
clearing and exchange fees are accrued on a round-turn basis on
open commodity futures contracts. The Partnership pays
commissions on trades executed on its behalf at a rate of $35
per round turn contract to CIS which in turn reallocates $20 per
round turn contract to AXP Advisors, an affiliate of IDS Futures.
Foreign Currency Transactions
Trading accounts on foreign currency denominations are
susceptible to both movements on underlying contract markets as
well as fluctuation in currency rates. Foreign currencies are
translated into U.S. dollars for closed positions 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 represents
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, incentive fees are
accrued monthly and paid quarterly and General Partners'
administrative fees are paid annually and amortized monthly.
Trading decisions for the periods covered in these financial
statements were made by John W. Henry & Company, Inc. ("JWH"),
Sabre Fund Management Limited ("Sabre") and Welton Investment
Corporation ("Welton"), the Partnership's Commodity Trading
Advisors ("CTAs"). See Note 1 for the specific periods of
trading for each CTA.
Under signed agreement for the periods presented prior to
January 1, 1996, Sabre received a monthly management fee of 1/4
of 1% of the month-end net asset value of the Partnership under
their management and 18% of the Partnership's net trading
profits, if any, in each quarter attributable to their trading.
Effective January 1, 1996, the agreement with Sabre was changed
to reduce the management fees paid to them to 1/8 of 1% of the
month-end net assets. Effective February 1, 1997 the agreement
with Sabre was changed to increase the management fees paid to
them to 1/4 of 1% of the month-end net assets. The agreement
with Sabre, which expired on December 31, 1997, was not renewed.
Under signed agreement, JWH will receive a monthly management
fee of 1/3 of 1% of the month-end net asset value of the
Partnership under its management and 15% of the Partnership's
net trading profits, if any, attributable to its management.
Under signed agreement, Welton will receive a monthly management
fee of 1/4 of 1% of the month-end net asset value of the
Partnership under its management and 18% of the Partnership's
net trading profits, if any, attributable to its management.
The Partnership pays an annual administrative fee of 1.125% and
0.25% of the beginning of the year net asset value of the
Partnership to IDS Futures and CISI, respectively.
(4) INCOME TAXES
No provision for Federal Income Taxes has been made in the
accompanying financial statements as each partner is responsible
for reporting income (loss) based on the pro rata share of the
profits or losses of the Partnership. The Partnership is
responsible for the Illinois State Partnership Information and
Replacement Tax based on the operating results of the
Partnership. Such tax amounted to $0 and $0 for the periods
ended March 31, 1998 and March 31, 1997, respectively, and is
included in operating expenses in the Statement of Operations.
(5) FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
The Partnership was formed to speculatively trade Commodity
Interests. It has commodity transactions and all of its cash on
deposit at its Clearing Broker at all times. In the event that
volatility of trading of other customers of the Clearing Broker
impaired the ability of the Clearing Broker to satisfy its
obligations to the Partnership, the Partnership 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 has controls in place to make
certain that all customers maintain adequate margin deposits for
the positions which they maintain at the Clearing Broker. Such
procedures should protect the Partnership from the off-balance
sheet risk as mentioned earlier. The Clearing Broker does not
engage in proprietary trading and thus has no direct market
exposure.
The counterparty of the Partnership for futures contracts traded
in the United States and most non-U.S. exchanges on which the
Partnership trades is the Clearing House associated with the
exchange. In general, Clearing Houses are backed by the
membership and will act in the event of nonperformance by one of
its members or one of the members' customers and as such should
significantly reduce this credit risk. In the cases where the
Partnership trades on exchanges on which the Clearing House is
not backed by the membership, the sole recourse of the
Partnership for nonperformance will be the Clearing House.
The Partnership holds futures and futures options positions on
the various exchanges throughout the world. The Partnership
does not trade over-the-counter contracts. As defined by SFAS
105, futures positions are classified as financial instruments.
SFAS 105 requires that the Partnership disclose the market risk
of loss from all of its financial instruments. Market risk is
defined as the possibility that future changes in market prices
may make a financial instrument less valuable or more onerous.
If the markets should move against all of the futures positions
held by the Partnership at the same time, and if the markets
moved such that the Trading Advisors were unable to offset the
futures positions of the Partnership, the Partnership could lose
all of its assets and the partners would realize a 100% loss.
As of March 31, 1998 the Partnership had contracts with two CTAs
who make the trading decisions. One of the CTAs trades a
program diversified among all commodity groups, while the other
is diversified among the various futures contracts in the
financials and metals group. Both CTAs trade on U.S. and
non-U.S. exchanges. Such diversification should greatly reduce
this market risk. Cash was on deposit with the Clearing Broker
in each time period of the financial statements which exceeded
the cash requirements of the Commodity Interests of the
Partnership.
The following chart discloses the dollar amount of the
unrealized gain or loss on open contracts related to exchange
traded contracts for the Partnership as of March 31, 1998:
COMMODITY GROUP UNREALIZED GAIN/(LOSS)
AGRICULTURAL COMMODITIES (5,027)
FOREIGN CURRENCIES 776,094
STOCK INDICES 735,274
ENERGIES 11,480
METALS 18,863
INTEREST RATE INSTRUMENTS (151,414)
TOTAL 1,385,270
The range of maturity dates of these exchange traded open
contracts is April of 1998 to March of 1999. The average open
trade equity for the period of January 1, 1998 to March 31, 1998
was $2,366,441.
The margin requirement at March 31, 1998 was $5,262,002. To
meet this requirement, the Partnership had on deposit with the
Clearing Broker $46,229,636 in segregated funds and $3,948,333
in secured funds.
(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 Partnership for the year ended December 31, 1997, as filed
with the Securities and Exchange Commission on March 27, 1998,
as part of its Annual Report on Form 10-K.
The results of operations for interim periods are not
necessarily indicative of the operating results to be expected
for the fiscal year.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operation
Fiscal Quarter ended March 31, 1998
The Partnership recorded a loss of $1,141,392 or $8.18 per Unit
for the first quarter of 1998. This compares to gain of
$1,442,108 or $11.59 per Unit for the first quarter of 1997.
During the first two months of the quarter, the Partnership
experienced losses primarily as a result of unprofitable
positions in currencies and interest rates, while during the
third month gains were recorded primarily due to gains in the
currency and energy markets. Overall, the first quarter of
fiscal 1998 ended negatively for the Partnership account managed
by John W. Henry & Company, Inc. and positively for the
Partnership account managed by Welton Investment Corporation.
At March 31, 1998, John W. Henry & Company, Inc. was managing
60.7% of the Partnership's assets and Welton Investment
Corporation was managing 39.3% of the Partnership's assets.
In January, performance was negatively impacted by sharp
reversals in Japanese financial markets and in gold. Investor
optimism over efforts to revive ailing Asian economies boosted
the Japanese yen against the U.S. dollar and gave support to the
Nikkei; positions in both resulted in losses for the
Partnership. Benign inflation news in Europe and the U.S.
boosted bond markets in both regions, resulting in gains for the
Partnership. These gains were offset by losses in stock indices
and in gold prices. Positions in crude oil and coffee produced
small gains for the Partnership. Overall, the Partnership
recorded a loss of $1,426,301 or $10.15 per Unit in January.
In February, losses were incurred in nearly all currencies
traded. Trading was also unprofitable in U.S. Treasury bonds,
interest rates and gold. The purchase of large quantities of
silver by a major investor caused the prices of the precious
metal to soar in world markets, before succumbing to some profit
taking at month end; positions in silver resulted in gains for
the Partnership. Profitable positions in most European bonds
failed to offset losses in other long- and short-term interest
rates. Gains in sugar, corn and cotton offset losses in other
agricultural commodities traded. The Partnership recorded a
loss of $172,379 or $1.21 per Unit in February.
In March, the U.S. dollar rose against most of its major
counterparts, gaining strength from the flight of international
capital from a deteriorating Japanese economy and the purchase
of dollars to buy U.S. Treasury bonds as yields in key European
bond markets hit post-war lows. Positions in the Swiss franc
and the German mark resulted in gains for the Partnership. The
market for crude oil generated a lot of excitement during the
month, following the surprise announcement by OPEC and non-OPEC
oil-producing nations of an agreement to cut production.
Positions in energy markets were profitable overall. Inflation
concerns, fueled by rising oil prices, propelled gold prices
sharply higher. Positions in gold were unprofitable, as were
positions in silver, which became more volatile during the
month. Except for small gains in soybeans and
soybean-derivative markets, positions in agricultural
commodities resulted in losses overall. The Partnership
recorded a gain of $457,288 or $3.18 per Unit in March.
During the quarter, additional units sold consisted of 7,337.44
limited partnership units and 140.09 general partnership units.
Additional units sold during the quarter represented a total of
$2,799,500 before the reduction of selling commissions and
organizational costs of $240,969. Investors redeemed a total of
3,294.77 Units during the quarter. At the end of the quarter
there were 144,655.88 Units outstanding (including 2,759.25
Units owned by the General Partners).
Lori J. Larson resigned as President and Director of IDS Futures
Corporation, one of the General Partners of the Partnership, on
January 20, 1998. Peter L. Slattery, a Director of IDS Futures
Corporation, replaced Ms. Larson as President effective the same
date.
During the fiscal quarter ended March 31, 1998, the Partnership
had no material credit exposure to a counterparty which is a
foreign commodities exchange.
The Partnership currently only trades on recognized global
futures exchanges. In the event the Partnership begins trading
over the counter contracts, any credit exposure to a
counterparty which exceeds 10% of the Partnership's total assets
will be disclosed.
See Footnote 5 of the Financial Statements for procedures
established by the General Partners to monitor and minimize
market and credit risks for the Partnership. In addition to the
procedures set out in Footnote 5, the General Partners review on
a daily basis reports of the Partnership's performance,
including monitoring of the daily net asset value of the
Partnership. The General Partners also review the financial
situation of the Partnership's Clearing Broker on a monthly
basis. The General Partners rely on the policies of the
Clearing Broker to monitor specific credit risks. The Clearing
Broker does not engage in proprietary trading and thus has no
direct market exposure which provides the General Partners
assurance that the Partnership will not suffer trading losses
through the Clearing Broker.
Fiscal Quarter ended March 31, 1997
The Partnership recorded a gain of $1,442,108 or $11.59 per Unit
for the first quarter of 1997.
During the first two months of the quarter, the Partnership
experienced gains primarily as a result of profits in foreign
exchange rates, while during the third month losses were
recorded due in part to the direction of U.S interest rates.
Overall, the first quarter of fiscal 1997 ended positively for
the Partnership's accounts managed by John W. Henry & Company,
Inc. and Sabre Fund Management Limited. At March 31, 1997, John
W. Henry & Company, Inc. was managing 65% of the Partnership's
assets and Sabre Fund Management Limited was managing 35% of the
Partnership's assets.
In January, the U.S. dollar continued to dominate world
currencies, reflecting both sound economic fundamentals and a
policy, shared by both the U.S. central bank and Treasury
administration officials, in support of a strong dollar. The
Japanese yen suffered from problems in the Japanese banking
sector. Rising unemployment and weak economic numbers in
Germany once again drove the German mark down against the U.S.
dollar. Trading in the British pound grew increasingly volatile
as prospects for an interest rate increase in Britain weakened.
Gold prices reached a three year low at mid-month. Therefore,
the Partnership recorded a profit of $1,484,691 or $11.92 per
Unit in January.
In February, the U.S. dollar reached new highs against the
German mark, Japanese yen and Swiss franc. The Federal Reserve
chairman hinted of a possible hike in U.S. interest rates which
sent the dollar soaring. Volatility in global interest rate
markets continued to be fueled by speculation on the direction
of global interest rates. Early in the month, central banks in
Germany, England and the U.S announced their decisions to keep
rates stable. In commodity markets, gold prices rose as demand
was rekindled by the lowest spot prices since 1993. In
agricultural markets, a two-month bull trend in coffee prices
continued as unfavorable weather and labor strife in South
America threatened supply. The Partnership recorded a gain of
$33,813 or $.27 per Unit in February.
In March, speculation over the direction of U.S. interest rates
unsettled financial markets around the world. Rising U.S.
interest rates, unease over first quarter corporate earnings and
lofty stock evaluations resulted in turmoil in U.S equity
markets. In Europe, renewed speculation about a delay in the
European Union's plans for economic and monetary union pushed
the German mark higher against the U.S. dollar. Agricultural
markets recorded profits resulting from persistent supply
concerns. Due to overall market turbulence, the Partnership
recorded a loss of $76,396 or $.60 per Unit in March.
During the quarter, additional units sold consisted of 9,164.28
limited partnership units; no general partner units were sold.
Additional Units sold during the quarter represented a total of
$3,371,200 before the reduction of selling commissions and
organizational costs of $296,158. Investors redeemed a total of
2,902.34 Units during the quarter. At the end of the quarter
there were 130,753.07 Units outstanding (including 2,315.34
Units owned by the General Partners).
During the fiscal quarter ended March 31, 1997, the Partnership
had no material credit exposure to a counterparty which is a
foreign commodities exchange.
Item 3. Quantitative and Qualitative Disclosures
About Market Risk
Not Applicable.
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
The Partnership and its affiliates are from time to time
parties to various legal actions arising in the normal course
of business. The General Partners believe that there is no
proceeding threatened or pending against the Partnership 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 Partnership.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
None
b) Reports on Form 8-K
The following Form 8-K was filed with the Securities
and Exchange Commission on behalf of the Partnership
during the fiscal quarter ended March 31, 1998:
1) Form 8-K dated December 31, 1997, and filed on
January 15, 1998, to report that, in accordance
with the terms of the Advisory Contract
between the Partnership and Sabre Fund
Management Limited, the General Partners
elected not to renew the Advisory Contract and
it expired on December 31, 1997.
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.
IDS MANAGED FUTURES, L.P.
Date: May 13, 1998 By: CIS Investments, Inc.,
One of its General Partners
By: /s/ Richard A Driver
Richard A. Driver
Treasurer
(Duly authorized officer of
the General Partner and the
Principal Financial Officer of
the General Partner)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial informationextracted from IDS Managed
Futures, L.P. for the first quarter of 1998 and is qualified in its entirety by
reference to such 10-Q.
</LEGEND>
<CIK> 0000809061
<NAME> IDS MANAGED FUTURES, L.P.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1998
<CASH> 50,177,969
<SECURITIES> 0
<RECEIVABLES> 692,696
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 50,870,665
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 50,870,665
<CURRENT-LIABILITIES> 1,167,814
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 49,702,851
<TOTAL-LIABILITY-AND-EQUITY> 50,870,665
<SALES> 0
<TOTAL-REVENUES> 122,789
<CGS> 0
<TOTAL-COSTS> 1,264,180
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,141,392)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,141,392)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
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<NET-INCOME> (1,141,392)
<EPS-PRIMARY> (8.18)
<EPS-DILUTED> (8.18)
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