<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
---------------
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 0-21112
THE SECTOR STRATEGY FUND/SM/ V L.P.
-------------------------------------
(Exact Name of Registrant as
specified in its charter)
Delaware 13-3674792
- --------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
c/o Merrill Lynch Investment Partners Inc.
(formerly ML Futures Investment Partners Inc.)
Merrill Lynch World Headquarters - South Tower, 6th Fl.
World Financial Center New York, New York 10080-6106
-----------------------------------------------------
(Address of principal executive offices)
(Zip Code)
212-236-4161
------------------------------------------------
(Registrant's telephone number, including area code)
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_____
-----
This document contains 11 pages.
There are no exhibits and no exhibit index filed with this document.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
THE SECTOR STRATEGY FUND/SM/ V L.P.
-----------------------------------
(a Delaware limited partnership)
------------------------------
STATEMENTS OF FINANCIAL CONDITION
---------------------------------
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
---- ----
<S> <C> <C>
ASSETS
- ------
Accrued interest $ 69,685 $ 105,038
Equity in commodity futures trading accounts:
Cash and option premiums 17,716,269 24,941,940
Net unrealized gain on open contracts 288,650 2,001,534
------------- -------------
TOTAL $18,074,604 $27,048,512
============= =============
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
LIABILITIES:
Redemptions payable $ 3,203,055 $ 743,243
Brokerage commissions payable (Note 2) 112,572 174,332
Profit shares payable - 74,883
Administrative expense payable (Note 2) 2,886 -
------------- -------------
Total liabilities $ 3,318,513 992,458
------------- -------------
PARTNERS' CAPITAL:
General Partner (2,990 and 2,990 units) 310,460 345,379
Limited Partners (139,137 and 222,604 units) 14,445,631 25,710,675
------------- -------------
Total partners' capital 14,756,091 26,056,054
------------- -------------
TOTAL $18,074,604 $27,048,512
============= =============
NET ASSET VALUE PER UNIT
(Based on 142,127, and 225,594 Units outstanding) $103.82 $115.50
======= =======
</TABLE>
See notes to financial statements.
2
<PAGE>
THE SECTOR STRATEGY FUND/SM/ V L.P.
-----------------------------------
(a Delaware limited partnership)
------------------------------
STATEMENTS OF OPERATIONS
------------------------
<TABLE>
<CAPTION>
For the three For the three For the six For the six
months ended months ended months ended months ended
June 30, 1996 June 30, 1995 June 30, 1996 June 30, 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
REVENUES:
Trading profits (loss):
Realized $ 325,055 $ 3,134,643 $ ( 370,674) $ 5,646,000
Change in unrealized (377,971) (1,804,067) (1,712,884) (1,683,194)
------------ ------------- ------------- ------------
Total trading results (52,916) 1,330,576 (2,083,558) 3,962,806
------------ ------------- ------------- ------------
Interest income 229,495 441,437 495,014 935,179
------------ ------------- -------------- ------------
Total revenues 176,579 1,772,013 (1,588,544) 4,897,985
------------ ------------- -------------- ------------
EXPENSES:
Profit shares - 244,424 4,590 449,994
Brokerage commissions (Note 2) 365,246 653,268 822,328 1,325,718
Administrative expense (Note 2) 9,365 - 21,085 -
------------ ------------- -------------- ------------
Total expenses 374,611 897,692 848,003 1,775,712
------------ ------------- -------------- ------------
NET (LOSS) INCOME $(198,032) $ 874,321 $(2,436,547) $ 3,122,273
============ ============= ============== ============
NET (LOSS) INCOME PER UNIT:
Weighted average number of units
outstanding 188,447 302,447 202,609 328,975
======== ======== ======== ========
Weighted average net (loss) income
per unit $(1.05) $2.89 $(12.03) $9.49
======= ====== ======== ======
</TABLE>
See notes to financial statements.
3
<PAGE>
THE SECTOR STRATEGY FUND/SM/ V L.P.
-------------------------------------
(a Delaware limited partnership)
------------------------------
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
------------------------------------------
For the six months ended June 30, 1996 and 1995
------------------------------------------------
<TABLE>
<CAPTION>
Limited General
Units Partners Partner Total
----- -------- ------- -----
<S> <C> <C> <C> <C>
PARTNERS' CAPITAL,
DECEMBER 31, 1994 381,064 $38,004,265 $528,877 $38,533,142
Organization and
offering costs - - - -
Net income - 3,072,823 49,450 3,122,273
Redemptions (97,330) (10,281,589) - (10,281,589)
---------- -------------- ---------- --------------
PARTNERS' CAPITAL,
JUNE 30, 1995 283,734 $30,795,499 $578,327 $31,373,826
========== ============== ========== ==============
PARTNERS' CAPITAL,
DECEMBER 31, 1995 225,594 $25,710,675 $345,379 $26,056,054
Net loss - (2,401,628) (34,919) (2,436,547)
Redemptions (83,467) (8,863,416) - (8,863,416)
---------- -------------- ---------- --------------
PARTNERS' CAPITAL,
JUNE 30, 1996 142,127 $14,445,631 $310,460 $14,756,091
========== ============== ========== ==============
</TABLE>
See notes to financial statements.
4
<PAGE>
THE SECTOR STRATEGY FUND/SM/ V L.P.
-------------------------------------
(a Delaware limited partnership)
------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These financial statements have been prepared without audit. In the opinion
of management, the financial statements contain all adjustments (consisting
of only normal recurring adjustments) necessary to present fairly the
financial position of The SECTOR Strategy Fund/SM/ V L.P. (the
"Partnership") as of June 30, 1996 and the results of its operations for the
six months ended June 30, 1996 and 1995. However, the operating results for
the interim periods may not be indicative of the results expected for the
full year.
Certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with general accepted accounting
principles have been omitted. It is suggested that these financial
statements be read in conjunction with the financial statements and notes
thereto included in the Partnership's Annual Report on Form 10-K filed with
the Securities and Exchange Commission for the year ended December 31, 1995
(the "Annual Report").
2. RELATED PARTY TRANSACTIONS
The Partnership pays brokerage commissions to MLF, at a flat monthly rate of
0.833 of 1% (a 10% annual rate) of the Partnership's month-end Net Assets
allocated to trading. Assets allocated to trading are not reduced, for
purposes of calculating brokerage commissions, by any accrued but unpaid
brokerage commissions, Profit shares or other fees or charges. Effective
January 1, 1996, the brokerage commission the Partnership pays to the
Commodity Broker was reduced to .8125% (a 9.75% annual rate), and the
Partnership began to pay an administrative fee to the General Partner of
.020833% (a .25% annual rate). The General Partner estimates that the round-
turn equivalent commission rate charged to the Partnership during the six
months ended June 30, 1996 and 1995 was approximately $53 and $21
respectively (not including, in calculating round-turn equivalents, forward
contracts on a futures-equivalent basis).
MLF pays the Advisors annual Consulting Fees ranging from 2% to 4% of the
Partnership's average month-end assets allocated to them for management,
after reduction for a portion of the brokerage commissions.
3. FAIR VALUE AND OFF-BALANCE SHEET RISK
The Partnership trades futures, options and forward contracts in interest
rates, stock indices, commodities, currencies, energy and metals. The
Partnership's revenues by reporting category for the six months ended June
30, 1996 were as follows:
<TABLE>
<CAPTION>
1996
----
<S> <C>
Interest rate and Stock Indices $(1,252,821)
Commodities 38,198
Currencies 332,841
Energy (1,064,538)
Metals (137,238)
-------------
$(2,083,558)
=============
</TABLE>
Market Risk
-----------
Derivative instruments involve varying degrees of off-balance sheet market
risk, and changes in the level or volatility of interest rates, foreign
currency exchange rates or the market values of the financial instruments or
commodities underlying such derivative instruments frequently result in
changes in the Partnership's unrealized gain or loss on such derivative
instruments as reflected in the Statements of Financial Condition. The
Partnership's exposure to market risk is influenced by a number of factors,
including the relationships among the derivative instruments held by the
5
<PAGE>
Partnership as well as the volatility and liquidity of the markets in which
the derivative instruments are traded.
The General Partner has procedures in place intended to control market risk,
although there can be no assurance that they will, in fact, succeed in doing
so. These procedures focus primarily on monitoring the trading of the
Advisors selected from time to time for the Partnership, adjusting the
percentage of the Partnership's total assets allocated to trading,
calculating the Net Asset Value of the Advisors' respective Partnership
accounts as of the close of business on each day and reviewing outstanding
positions for over-concentration both on an Advisor-by-Advisor and on an
overall Partnership basis. While the General Partner does not itself
intervene in the markets to hedge or diversify the Partnership's market
exposure (although the General Partner does adjust the percentage of the
Partnership's total assets allocated to trading), the General Partner may
urge Advisors to reallocate positions, or itself reallocate Partnership
assets among Advisors (although typically only as of the end of a month) in
an attempt to avoid over-concentrations. However, such interventions are
unusual. Except in cases in which it appears that an Advisor has begun to
deviate from past practice or trading policies or to be trading erratically,
the General Partner's basic risk control procedures consist simply of the
ongoing process of Advisor monitoring and selection, with the market risk
controls being applied by the Advisors themselves.
Fair Value
----------
The derivative instruments used in the Partnership's trading activities are
marked to market daily with the resulting unrealized gains or losses recorded
in the Statements of Financial Condition and the related profit or loss
reflected in trading revenues in the Statements of Operations. The
contract/notional values of open contracts as of June 30, 1996 and December
31, 1995 were as follows:
<TABLE>
<CAPTION>
1996 1995
-------------------------------------------- ------------------------------------------
Commitment to Commitment to Commitment to Commitment to
Purchase (Futures, Sell (Futures, Purchase (Futures, Sell (Futures,
Options & Forwards) Options & Forwards) Options & Forwards) Options & Forwards)
------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Interest rate
and Stock
indices $45,122,083 $22,427,171 $179,096,703 $56,850,064
Commodities 4,073,361 1,366,636 14,318,195 4,314,805
Currencies 10,165,254 12,669,718 6,547,272 20,755,132
Energy 3,384,639 817,173 10,409,141 1,849,351
Metals 2,260,961 5,181,555 3,153,302 4,949,099
-------------- ---------------- -------------- ----------------
$65,006,298 $42,462,253 $213,524,613 $88,718,451
============== ================ ============== ================
</TABLE>
Substantially all of the Partnership's derivative instruments outstanding as
of June 30, 1996 expire within one year.
The contract/notional value of exchange-traded and non-exchange-traded open
derivative instrument positions as of June 30, 1996 and December 31, 1995
were as follows:
<TABLE>
<CAPTION>
1996 1995
------------------------------------- -------------------------------------------
Commitment to Commitment to Commitment to Commitment to
Purchase (Futures, Sell (Futures, Purchase (Futures, Sell (Futures,
Options & Forwards) Options & Forwards Options & Forwards) Options and Forwards)
-------------------- ------------------ ------------------- ---------------------
<S> <C> <C> <C> <C>
Exchange
traded $55,697,036 $30,897,094 $205,483,343 $75,005,128
Non-Exchange
traded 9,309,262 11,565,159 8,041,270 13,713,323
----------------- -------------- ------------------ -------------------
$65,006,298 $42,462,253 $213,524,613 $88,718,451
================ =============== ================= ===================
</TABLE>
The average fair value of the Partnership's derivative instrument positions
which were open as of the end of each calendar month during the six months
ended June 30, 1996 and the year ended December 31, 1995 were as follows:
6
<PAGE>
<TABLE>
<CAPTION>
1996 1995
-------------------------------------------- --------------------------------------------------
Commitment to Commitment to Commitment to Commitment to
Purchase (Futures, Sell (Futures, Purchase (Futures, Sell (Futures,
Options & Forwards) Options & Forwards) Options & Forwards) Options & Forwards)
------------------- ------------------ ------------------- ---------------------
<S> <C> <C> <C> <C>
Interest rate
and Stock
indices $54,738,855 $ 76,758,618 $137,303,534 $18,139,506
Commodities 7,659,523 1,847,529 8,709,133 3,311,991
Currencies 13,722,185 20,716,507 29,404,375 28,992,505
Energy 2,854,968 1,745,165 3,972,514 2,644,938
Metals 3,804,104 3,489,899 3,487,022 6,130,981
--------------- ----------------- ------------------- -------------------
$82,779,635 $104,557,718 $182,876,578 $59,219,921
=============== ================= =================== ==================
</TABLE>
A portion of the amounts indicated as off-balance sheet risk reflects
offsetting commitments to purchase and sell the same derivative instrument on
the same date in the future. These commitments are economically offsetting
but are not, as a technical matter, offset in the forward market until the
settlement date.
Credit Risk
-----------
The risks associated with exchange-traded contracts are typically perceived
to be less than those associated with over-the-counter (non-exchange-traded)
transactions, because exchanges typically (but not universally) provide
clearinghouse arrangements in which the collective credit (in some cases
limited in amount, in some cases not) of the members of the exchange is
pledged to support the financial integrity of the exchange. In over-the-
counter transactions, on the other hand, traders must rely solely on the
credit of their respective individual counterparties. Margins, which may be
subject to loss in the event of a default, are generally required in exchange
trading, and counterparties may also require margin in the over-the-counter
markets.
The fair value amounts in the above tables represent the extent of the
Partnership's market exposure in the particular class of derivative
instrument listed, but not the credit risk associated with counterparty
nonperformance. The credit risk associated with these instruments from
counterparty nonperformance is the net unrealized gain, if any, included in
the Statements of Financial Condition. The Partnership also has credit risk
because the sole counterparty or broker with respect to most of the
Partnership's assets is MLF.
As of June 30, 1996 and December 31, 1995, $15,500,622 and $20,795,559 of the
Partnership's assets, respectively, were held in segregated accounts at MLF
in accordance with Commodity Futures Trading Commission regulations.
The gross unrealized gain and the net unrealized gain (loss) on the
Partnership's open derivative instrument positions as of June 30, 1996 and
December 31, 1995 were as follows:
<TABLE>
<CAPTION>
1996 1995
---- ----
Gross Net Gross Net
Unrealized Unrealized Unrealized Unrealized
Gain Gain (Loss) Gain Gain (Loss)
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Exchange
traded $375,515 $240,491 $2,644,507 $2,009,512
Non-Exchange
traded 231,949 48,159 10,261 (7,978)
--------------- --------------- ------------------ ------------------
$607,464 $288,650 $2,654,768 $2,001,534
=============== =============== ================== ==================
</TABLE>
The Partnership controls credit risk by dealing almost exclusively with
Merrill Lynch entities as brokers and counterparties.
Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operation
Operational Overview; Advisor Selections
----------------------------------------
Due to the nature of the Fund's business, its results of operations
depend on MLIP's ability to select Advisors and determine the appropriate
percentage of each series' assets to allocate to them for trading, as well as
the Advisors' ability to recognize and capitalize on trends and other profit
opportunities in different sectors of the world commodity markets. MLIP's
7
<PAGE>
Advisor selection procedure and leveraging analysis, as well as the Advisors'
trading methods, are confidential, so that substantially the only information
that can be furnished regarding the Fund's results of operations is contained
in the performance record of its trading. Unlike operating businesses,
general economic or seasonal conditions do not directly affect the profit
potential of the Fund, and its past performance is not necessarily indicative
of future results. Because of the speculative nature of its trading,
operational or economic trends have little relevance to the Fund's results.
MLIP believes, however, that there are certain market conditions, for
example, markets with strong price trends, in which the Fund has a better
likelihood of being profitable than in others.
As of July 1, 1996, the Partnership's assets were allocated as follows:
<TABLE>
<CAPTION>
Trading Advisor Sector Allocation
--------------- ------ -----------
<S> <C> <C>
John W. Henry & Co., Inc. Diversified 23.18%
Sjo, Inc. Financials 19.17
Blenheim Investments, Inc. Diversified 11.31
Rabar Market Research, Inc. Diversified 14.03
Cash 32.31
-------
100.00%
</TABLE>
MLIP expects to continue to change both allocations and Advisor
selections from time to time without advance notice to existing investors.
Results of Operations - General
-------------------------------
MLIP believes that multi-Advisor futures funds should be regarded as
medium- to long-term investments but, unlike an operating business, it is
difficult to identify "trends" in the Fund's operations and virtually
impossible to make any predictions regarding future results based on results
to date.
Markets in which sustained price trends occur with some frequency tend
to be more favorable to managed futures investments than "whipsaw," "choppy"
markets, but (i) this is not always the case, (ii) it is impossible to
predict when trending markets will occur and (iii) different Advisors are
affected differently by trends in general as well as by particular types of
trends.
The Fund controls credit risk in its trading in the derivatives markets
by trading only through Merrill Lynch entities which MLIP believes to be
creditworthy. The Fund attempts to control the market risk inherent in its
derivatives trading by utilizing a multi-advisor, multi-strategy structure.
This structure purposefully attempts to diversify the Fund's Advisor group
among different strategy types and market sectors in an effort to reduce risk
(although the Fund's portfolio currently emphasizes technical and trend-
following approaches).
Performance Summary
-------------------
During the first six months of 1995, the Fund's average month-end Net
Assets equalled $34,088,378, and the Fund recognized gross trading gains of
$3,962,806 or 11.63% of such average month-end Net Assets. Brokerage
commissions of $1,325,718 or 3.89%, Profit Shares of $449,994 or 1.32% of
average month-end Net Assets were paid. Interest income of $935,179 or 2.74%
of average month-end Net Assets resulted in a net gain of $3,122,273 or 9.16%
of average month-end Net Assets, which resulted in a 9.35% increase in the
Net Asset Value per Unit since December 31, 1994.
During the first six months of 1996, the Fund's average month-end Net
Assets equalled $21,222,032, and the Fund recognized gross trading losses of
$2,083,558 or 9.82% of such average month-end Net Assets. Brokerage
commissions of $822,328 or 3.87%, Administrative expense of $21,085 or .10%
and Profit Shares of $4,590 or .02% of average month-end Net Assets were
paid. Interest income of $495,014 or 2.33% of average month-end Net Assets
resulted in net loss of $2,436,547 or 11.48% of average month-end Net Assets
which resulted in a 10.11% decrease in the Net Asset Value per Unit since
December 31, 1995.
During the first six months of 1996 and 1995, the Fund experienced 6
profitable months and 6 unprofitable months.
8
<PAGE>
<TABLE>
<CAPTION>
MONTH-END NET ASSET VALUE PER UNIT
------------------------------------------------------------
Jan. Feb. Mar. April May June
------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1995 $99.58 $103.91 $107.84 $109.57 $113.00 $110.57
------------------------------------------------------------
1996 $115.53 $106.85 $105.04 $107.19 $104.38 $103.82
------------------------------------------------------------
</TABLE>
Importance of Market Factors
----------------------------
Comparisons between the Fund's performance in a given period in one
fiscal year to the same period in a prior year are unlikely to be meaningful,
given the uncertainty of price movements in the markets traded by the Fund.
In general, MLIP expects that the Fund is most likely to trade successfully
in markets which exhibit strong and sustained price trends. The current
Advisor group emphasizes technical and trend-following methods.
Consequently, one would expect that in trendless, "choppy" markets the Fund
would likely be unprofitable, while in markets in which major price movements
occur, the Fund would have its best profit potential (although there could be
no assurance that the Fund would, in fact, trade profitably). However,
trend-followers not infrequently will miss major price movements, and market
corrections can result in rapid and material losses (sometimes as much as 5%
in a single day). Although MLIP monitors market conditions and Advisor
performance on an ongoing basis in overseeing the Fund's trading, MLIP does
not attempt to "market forecast" or to "match" trading styles with predicted
market conditions. Rather, MLIP concentrates on quantitative and qualitative
analysis of prospective Advisors, as well as on statistical studies of the
historical performance parameters of different Advisor combinations in
selecting Advisors and allocating and reallocating Fund assets among them.
Because managed futures advisors' strategies are proprietary and
confidential and market movements unpredictable, selecting advisors to
implement speculative trading strategies involves considerable uncertainty.
Furthermore, the concentration of the Fund's current Advisor portfolio, both
in terms of the number of managers retained and the common emphasis of their
strategies on technical and trend-following methods, increases the risk that
unexpectedly bad performance, turbulent market conditions or a combination of
the two will result in significant losses.
MLIP's Advisor Selections
-------------------------
MLIP has no timetable or schedule for making Advisor changes or
reallocations, and generally intends to make a medium- to long-term
commitment to all Advisors selected. However, there can be no assurance as
to the frequency or number of the Advisor changes which may take place in the
future, or as to how long any of the current Advisors will continue to manage
assets for the Fund.
Liquidity
---------
Most of the Partnership's assets are held as cash which, in turn, is
used to margin its futures positions and earns interest income and is
withdrawn, as necessary, to pay redemptions and fees.
The futures contracts in which the Partnership trades may become illiquid
under certain market conditions. Commodity exchanges limit fluctuations in
futures prices during a single day by regulations referred to as "daily
limits." During a single day no trades may be executed at prices beyond the
daily limit. Once the price of a futures contract for a particular commodity
has increased or decreased by an amount equal to the daily limit, positions
in the commodity can generally neither be taken nor liquidated unless traders
are willing to effect trades at or within the limit. Futures contracts have
occasionally moved to the daily limit for several consecutive days with
little or no trading. Such market conditions could prevent the Partnership
from promptly liquidating its futures (including its options) positions.
There are no limitations on the daily price moves in trading foreign currency
forward contracts through banks, although illiquidity may develop in the
forward markets due to large spreads between "bid" and "ask" prices quoted.
(Forward contracts are the bank version of currency futures contracts and are
not traded on exchanges.)
Capital Resources
-----------------
The Partnership does not have, nor does it expect to have, any capital
assets and has no material commitments for capital expenditures. The
Partnership uses its assets to supply the necessary margin or premiums for,
and to pay any losses incurred in connection with, its trading activity and
to pay redemptions and fees.
Inflation is not a significant factor in the Fund's profitability,
although inflationary cycles can give rise to the type of major price
movements which can have a materially favorable or adverse impact on the
Fund's performance.
Changes in the level of prevailing interest rates (a factor generally
associated with inflation) could have a material effect on the percentage of
the total capital attributable to various series of Units which is committed
to trading, as interest rates affect the calculation of the
9
<PAGE>
discounted minimum Net Asset Value per Unit which Merrill Lynch & Co., Inc.
has guaranteed to investors.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
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
There are no exhibits required to be filed as part of this document.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the first six months of
fiscal 1996.
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE SECTOR STRATEGY FUND/SM/ V L.P.
By: MERRILL LYNCH INVESTMENT PARTNERS INC.
(General Partner)
Date: August 9, 1996 By /s/JOHN R. FRAWLEY, JR.
------------------------
John R. Frawley, Jr.
President, Chief Executive Officer
and Director
Date: August 9, 1996 By /s/JAMES M. BERNARD
--------------------
James M. Bernard
Chief Financial Officer,
Treasurer and Senior Vice President
<TABLE> <S> <C>
<PAGE>
<ARTICLE> BD
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION, CONSOLIDATED STATEMENTS OF OPERATIONS,
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1994
<PERIOD-START> JAN-01-1996 JAN-01-1995
<PERIOD-END> JUN-30-1996 JUN-30-1995
<CASH> 0 0
<RECEIVABLES> 18,074,604 32,671,814
<SECURITIES-RESALE> 0 0
<SECURITIES-BORROWED> 0 0
<INSTRUMENTS-OWNED> 0 0
<PP&E> 0 0
<TOTAL-ASSETS> 18,074,604 32,671,814
<SHORT-TERM> 0 0
<PAYABLES> 3,318,513 1,297,988
<REPOS-SOLD> 0 0
<SECURITIES-LOANED> 0 0
<INSTRUMENTS-SOLD> 0 0
<LONG-TERM> 0 0
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 14,756,091 31,373,826
<TOTAL-LIABILITY-AND-EQUITY> 18,074,604 32,671,814
<TRADING-REVENUE> (2,083,558) 3,962,806
<INTEREST-DIVIDENDS> 495,014 935,179
<COMMISSIONS> 848,003 1,775,712
<INVESTMENT-BANKING-REVENUES> 0 0
<FEE-REVENUE> 0 0
<INTEREST-EXPENSE> 0 0
<COMPENSATION> 0 0
<INCOME-PRETAX> (2,436,547) 3,122,273
<INCOME-PRE-EXTRAORDINARY> (2,436,547) 3,122,273
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (2,436,547) 3,122,273
<EPS-PRIMARY> (12.03) 9.49
<EPS-DILUTED> (12.03) 9.49
</TABLE>
