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, 1999
Commission File Number 0-17443
IDS MANAGED FUTURES II, L.P.
(Exact name of registrant as specified in its charter)
Delaware 06-1207252
(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
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 __
<TABLE>
Part I. Financial Information
Item 1. Financial Statements
Following are Financial Statements for the fiscal quarter ended March 31, 1999
and the additional time frames as noted:
Fiscal Quarter Year to Date Fiscal Year Fiscal Quarter Year to Date
Ended 3/31/99 To 3/31/99 Ended 12/31/98 Ended 3/31/98 To 3/31/98
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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 II, L.P.
STATEMENTS OF FINANCIAL CONDITION
Mar 31, 1999 Dec 31, 1998
--------------- --------------
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ASSETS
Equity in commodity futures
trading accounts:
Account balance $10,703,896 11,060,948
Unrealized gain on open
futures contracts 194,297 1,255,115
--------------- --------------
10,898,193 12,316,063
Interest receivable 37,511 34,361
--------------- --------------
Total assets $10,935,704 $12,350,424
=============== ==============
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accrued commissions on open
futures contracts due to AXP Advisors and $23,256 $48,329
Accrued management fee 33,192 37,278
Accrued incentive fee 0 0
Accrued operating expenses 48,265 53,140
Redemptions payable 161,438 143,490
--------------- --------------
Total liabilities 266,151 282,237
Partners' Capital:
Limited partners (16,179.26 units 10,260,844 11,617,111
outstanding at 3/31/99, 16,597.42
units outstanding at 12/31/98) (see Note 1)
General partners (644.45 units out- 408,709 451,076
standing at 3/31/99 and 12/31/98) (see Note 1)
--------------- --------------
Total partners' capital 10,669,552 12,068,187
--------------- --------------
Total liabilities and
partners' capital $10,935,704 $12,350,424
=============== ==============
In the opinion of management, these statements reflect all adjustments necessary
to fairly state the financial condition of IDS Managed Futures II, L.P. (See Note 6)
IDS MANAGED FUTURES II, L.P.
STATEMENTS OF OPERATIONS
Jan 1, 1999 Jan 1, 1999 Jan 1, 1998 Jan 1, 1998
through through through through
Mar 31, 1999 Mar 31, 1999 Mar 31, 1998 Mar 31, 1998
--------------- -------------- ------------- -------------
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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 $163,087 $163,087 $204,275 $204,275
Change in unrealized gain (loss)
on open positions (1,128,934) (1,128,934) (318,746) (318,746)
Interest income 100,665 100,665 120,519 120,519
Foreign currency transaction gain (loss) (32,048) (32,048) (28,580) (28,580)
--------------- -------------- ------------- -------------
Total revenues ($897,230) ($897,230) ($22,532) ($22,532)
EXPENSES
Commissions paid to AXP Advisors and CIS 115,179 115,179 126,745 126,745
Exchange fees 2,760 2,760 3,117 3,117
Management fees 103,160 103,160 109,122 109,122
Incentive fees 0 0 0 0
Operating expenses 9,500 9,500 11,377 11,377
--------------- -------------- ------------- -------------
Total expenses 230,599 230,599 250,362 250,362
--------------- -------------- ------------- -------------
Net profit (loss) ($1,127,829) ($1,127,829) ($272,893) ($272,893)
=============== ============== ============= =============
PROFIT (LOSS) PER UNIT OF
PARTNERSHIP INTEREST ($65.73) ($65.73) ($14.17) ($14.17)
=============== ============== ============= =============
This Statement of Operations, in the opinion of management, reflects all adjustments
necessary to fairly state the financial condition of IDS Managed Futures II, L. P. (See Note 6)
IDS MANAGED FUTURES II, L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For the period January 1, 1999 through March 31, 1999
Limited General
Units* Partners Partners Total
--------------- -------------- ------------- -------------
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Partners' capital at January 1, 1999 16,597.42 $11,617,111 $451,076 $12,068,187
Net profit (loss) (1,085,462) (42,367) (1,127,830)
Redemptions (see Note 1) (418.16) (270,805) 0 (270,805)
--------------- -------------- ------------- -------------
Partners' capital at March 31, 1999 16,179.26 $10,260,844 $408,709 $10,669,552
=============== ============== ============= =============
Net asset value per unit
January 1, 1999 $699.93 $699.93
Net profit (loss) per unit (65.73) (65.73)
-------------- -------------
Net asset value per unit
March 31, 1999 $634.20 $634.20
* 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 II, L. P. (See Note 6)
IDS MANAGED FUTURES II, L.P.
STATEMENTS OF CASH FLOWS
Jan 1, 1999 Jan 1, 1998
through through
Mar 31, 1999 Mar 31, 1998
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Cash flows from operating activities:
Net profit/(loss) ($1,127,829) ($272,893)
Adjustments to reconcile net loss
to net cash provided by (used in)
operating activities:
Change in assets and liabilities:
Unrealized gain (loss) on open
futures contracts 1,060,818 318,746
Interest receivable (3,150) 5,626
Accrued liabilities (34,034) (52,490)
Redemptions payable 17,948 59,116
--------------- --------------
Net cash provided by (used in)
operating activities (86,247) 58,105
Cash flows from financing activities:
Partner redemptions (270,805) (197,270)
--------------- --------------
Net cash provided by (used in)
financing activities (270,805) (197,270)
--------------- --------------
Net increase (decrease) in cash (357,051) (139,165)
Cash at beginning of period 11,060,948 11,875,917
--------------- --------------
Cash at end of period $10,703,897 $11,736,752
=============== ==============
This Statement of Cash Flows, in the opinion of management, reflects all adjustments
necessary to fairly state the financial condition of IDS Managed Futures II, L. P. (See Note 6)
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IDS MANAGED FUTURES II, L.P.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
(1) GENERAL INFORMATION AND SUMMARY
IDS Managed Futures II, L.P. (the "Partnership") is a limited
partnership organized on April 21, 1987 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, 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. ("AEFA"),
formerly IDS Financial Services Inc., which acts as the
Partnership's introducing broker and selling agent. Trading
decisions for the Partnership during the period of these
financials were made by two independent commodity trading
advisors, John W. Henry & Company, Inc. ("JWH") and Welton
Investment Corporation ("Welton").
Units of limited partnership interest ("Units") were offered by
AEFA commencing July 14, 1987 through December 31, 1988. The
total amount of the offering was $40,000,000. There is no
definite number of Units authorized for the Partnership because
investors affiliated with the Selling Agent of the Partnership
were not required to pay selling commissions. 60,127.14 Units
representing a total investment of $14,983,249 had been sold and
accepted into the Partnership during the offering period from
July 14, 1987 to December 31, 1988 (excluding 627.95 Units
purchased by the General Partners for $150,110). A final group
of investors purchasing Units worth $423,750 between December
20, 1988 and December 31, 1988 were admitted into the
Partnership on January 31, 1989, at a Net Asset Value of
$255.27. The General Partners also purchased an additional
$3,960 of Units on January 31, 1989.
No redemptions were permitted by a subscriber during the first
six months after he or she was 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 Limited Partnership Agreement
contains a full description of redemption and distribution
procedures.
The Partnership shall be terminated on December 31, 2007 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)
disassociation of the General Partners with the Partnership;
(3) bankruptcy of the Partnership; (4) decrease in the net asset
value to less than $1,500,000; (5) the Partnership is declared
unlawful, or (6) the net asset value per Unit declines to less
than $125 per Unit and the partners elect to terminate 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.
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.
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.
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 80 percent of the average
90-day Treasury bill rate for U.S. Treasury bills issued during
that month.
Redemptions
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. Redemptions are based on the Net Asset Value per
unit as of the last day of the month and require ten days'
written notice to the General Partners. Payment will be made
within ten 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 and National Futures Association clearing
and exchange fees are accrued on a round-turn basis on open
commodity futures contracts. The Partnership pays CIS
commissions on trades executed on its behalf at a rate of $58.75
per round turn contract. For trades executed by Welton
Investment Corporation, the Partnership pays $43.75 per round
turn contract. The Partnership pays these commissions directly
to CIS and CIS then reallocates the appropriate portion to AEFA.
Foreign Currency Transactions
Trading accounts in foreign currency denominations are
susceptible to both movements in underlying contract markets as
well as fluctuations 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 Flow
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 and incentive fees
are accrued monthly and paid quarterly. Trading decisions for
the periods covered in these financial statements were made by
JWH and Welton, the Partnership's Commodity Trading Advisors
("CTAs"). See Note 1 for the specific periods of trading for
each CTA.
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 dated July 8, 1997, 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.
(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, 1999 and March 31, 1998, respectively.
(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 at least equal to 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, 1999 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, 1999:
COMMODITY GROUP UNREALIZED GAIN/(LOSS)
AGRICULTURAL COMMODITIES 10,163
FOREIGN CURRENCIES 86,548
STOCK INDICES 95,557
ENERGIES 2,130
METALS (37,996)
INTEREST RATE INSTRUMENTS 37,893
_________
TOTAL 194,295
The range of maturity dates of these exchange traded open
contracts is April of 1999 to March of 2000. The average open
trade equity for the period of January 1, 1999 to March 31, 1999
was $734,056.
The margin requirement at March 31, 1999 was $1,267,522. To
meet this requirement, the Partnership had on deposit with the
Clearing Broker $10,365,762 in segregated funds and $532,431 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, 1998, as filed
with the Securities and Exchange Commission on March 29, 1999,
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, 1999
The Partnership recorded a loss of $1,127,829 or $65.73 per Unit
for the first quarter of 1999. This compares to a loss of
$272,893 or $14.17 per Unit for the first quarter of 1998.
In the first month of the quarter the Partnership posted a loss
resulting primarily from volatility in the currency sector as
well as Japanese interest rates. The Partnership posted a small
loss for the second month of the quarter resulting primarily
from trading in interest rates. 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
Partnership posted a small loss. Overall, the first quarter of
fiscal 1999 ended negatively for the Partnership accounts
managed by JWH and Welton. At March 31, 1999, JWH was managing
67% of the Partnership's assets and Welton was managing 33% of
the Partnership's assets.
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 Partnership. The only
profitable interest rate market was in Germany where the
Partnership 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 Partnership. Coffee prices vacillated;
rising in December and falling in January. The Partnership
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 Partnership. All in all, the
Partnership posted a loss of $510,801 or $29.62 per Unit in
January.
In February, agricultural prices declined steadily throughout
the month as the Partnership 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 Partnership. On the plus side, the
Partnership 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 Partnership posted a loss of
$103,337 or $6.03 per Unit in February.
In March, silver and gold positions were extremely volatile as
the Partnership 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 Partnership. A flight to quality in the U.S. dollar has
provided opportunities for the Partnership 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
Partnership 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 Partnership posted a
loss of $513,691 or $30.08 per Unit in March.
During the quarter, investors redeemed a total of 418.16 Units.
At the end of the quarter there were 16,823.71 Units outstanding
(including 644.45 Units owned by the General Partners).
During the fiscal quarter ended March 31, 1999, 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.
Year 2000 Issue
CIS surveyed major applications in 1996 to see if they were Year
2000 compliant. Systems identified with Year 2000 issues were
targeted for replacement or modification. Replacement and
modification projects are currently underway. In addition, CIS
has dedicated resources to assess our work processes and verify
that it will be able to handle the changes in the next
millennium. This process addresses software applications as
well as key vendor, bank and customer relationships.
During 1997, CIS participated in developing the industry-wide
test plan with the Futures Industry Association, with whom it
continues to work closely. CIS has participated in BETA
testing, which began in September 1998, and is participating
again with the FIA in "street wide" testing during the second
quarter of 1999.
In addition, CIS has begun developing various "contingency
plans" in the event that mission critical systems should fail.
This development is proceeding on schedule.
CIS is taking this issue seriously and has a goal of maintaining
reasonable procedures in order to eliminate as much risk as
possible to its customers (including the Partnership), its
counterparties and itself. Despite the best efforts of CIS,
CISFS and CISI, there can be no assurance that the above steps
will be sufficient or that all potential problems have been
identified in order to avoid any adverse impact to the
Partnership. CIS and its affiliates make no representations or
warrants related to Year 2000 readiness or compliance, including
but not limited to business interruption, whether from failures
in their own computer systems, those of the Advisors, or any
other third party.
Fiscal Quarter ended March 31, 1998
The Partnership recorded a loss of $272,893 or $14.17 per Unit
for the first quarter of 1998.
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 JWH and positively for the Partnership account managed by
Welton. At March 31, 1998, JWH was managing 62.1% of the
Partnership's assets and Welton was managing 37.9% 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 $353,393 or $18.40 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 $47,483 or $2.49 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 $127,983 or $6.72 per Unit in March.
During the quarter, investors redeemed a total of 315.18 Units.
At the end of the quarter there were 18,885.71 Units outstanding
(including 644.45 Units owned by the General Partners).
During the fiscal quarter ended March 31, 1998, 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
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 Partnership dated December
31, 1998.
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
None
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.
Date: May 13, 1999 IDS MANAGED FUTURES II, L.P.
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 information extracted from IDS Managed
Futures II, L.P. for the first quarter of 1999 and is qualified in its entirety
by reference to such 10-Q.
</LEGEND>
<CIK> 0000813831
<NAME> IDS MANAGED FUTURES II, L.P.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1999
<CASH> 10,898,193
<SECURITIES> 0
<RECEIVABLES> 37,511
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 10,935,704
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 10,935,704
<CURRENT-LIABILITIES> 266,151
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 10,669,552
<TOTAL-LIABILITY-AND-EQUITY> 10,935,704
<SALES> 0
<TOTAL-REVENUES> (897,230)
<CGS> 0
<TOTAL-COSTS> 230,599
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,127,829)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,127,829)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,127,829)
<EPS-PRIMARY> (65.73)
<EPS-DILUTED> (65.73)
</TABLE>
