<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 September 30, 1997
--------------------
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.
Merrill Lynch World Headquarters - South Tower, 6th Fl.
World Financial Center New York, New York 10080-6106
-----------------------------------------------------
(Address of principal executive offices)
(Zip Code)
212-236-5662
------------------------------
(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 13 pages.
<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>
September 30, December 31,
1997 1996
----------------- -----------------
ASSETS
- ------
<S> <C> <C>
Accrued interest $ 15,907 $ 42,724
Equity in commodity futures trading accounts:
Cash and option premiums 3,709,924 10,635,825
Net unrealized profit on open contracts 9,474 56,151
Investments 8,963,842 3,405,293
Receivable from outside investments 214,201 327,498
----------------- -----------------
TOTAL $12,913,348 $14,467,491
================= =================
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
LIABILITIES:
Redemptions payable $ 299,884 $ 327,498
Profit shares payable 34,447 58,450
Brokerage commissions payable 27,087 45,748
Administrative fees payable 774 1,499
----------------- -----------------
Total liabilities 362,192 433,195
----------------- -----------------
PARTNERS' CAPITAL:
General Partners (2990 and 2990 Units) 388,158 356,079
Limited Partners (93692 and 114856 Units) 12,162,998 13,678,217
----------------- -----------------
Total partners' capital 12,551,156 14,034,296
----------------- -----------------
TOTAL $12,913,348 $14,467,491
================= =================
NET ASSET VALUE PER UNIT
(Based on 96682 and 117846 Units
outstanding) $129.82 $119.09
================= =================
</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 nine For the nine
months ended months ended months ended months ended
September 30, September 30, September 30, September 30,
1997 1996 1997 1996
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
REVENUES:
Trading profits (loss):
Realized $ 142,426 $406,266 $ 460,003 $ 35,592
Change in unrealized (9,115) 424,442 (46,677) (1,288,442)
----------------- ----------------- ----------------- -----------------
Total trading results 133,310 830,708 413,325 (1,252,850)
----------------- ----------------- ----------------- -----------------
Interest income 56,204 163,571 246,706 658,585
Income from investments 820,444 - 801,927 -
----------------- ----------------- ----------------- -----------------
Total revenues 1,009,959 994,279 1,461,959 (594,265)
----------------- ----------------- ----------------- -----------------
EXPENSES:
Profit shares 17,184 - 34,447 4,590
Brokerage commissions 85,085 218,218 272,411 1,040,546
Administrative fees 2,431 5,596 7,678 26,681
----------------- ----------------- ----------------- -----------------
Total expenses 104,700 223,814 314,536 1,071,817
----------------- ----------------- ----------------- -----------------
NET INCOME (LOSS) $ 905,259 $770,465 $1,147,423 $(1,666,082)
================= ================= ================= =================
NET INCOME (LOSS) PER UNIT:
Weighted average number of units
outstanding 101,595 135,836 107,314 180,351
================= ================= ================= =================
Weighted average net income (loss)
per Limited Partner
and General Partner Unit $8.91 $5.67 $10.69 $(9.24)
================= ================= ================= =================
</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 nine months ended September 30, 1997 and 1996
-----------------------------------------------------
<TABLE>
<CAPTION>
Units Limited Partners General Partner Total
----------------- ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
PARTNERS' CAPITAL,
December 31, 1995 225,594 $ 25,710,675 $345,379 $ 26,056,054
Redemptions (99,011) (10,509,921) - (10,509,921)
Net loss - (1,648,593) (17,489) (1,666,082)
----------------- ------------------ ------------------ ------------------
PARTNERS' CAPITAL,
September 30, 1996 126,583 $ 13,552,161 $327,890 $ 13,880,051
================= ================== ================== ==================
PARTNERS' CAPITAL,
December 31, 1996 117,846 $ 13,678,217 $356,079 $ 14,034,296
Redemptions (21,164) (2,630,563) - (2,630,563)
Net income - 1,115,344 32,079 1,147,423
----------------- ------------------ ------------------ ------------------
PARTNERS' CAPITAL,
September 30, 1997 96,682 $ 12,162,998 $388,158 $ 12,551,156
================= ================== ================== ==================
See notes to financial statements.
</TABLE>
4
<PAGE>
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"
or the "Fund") as of September 30, 1997 and the results of its operations for
the nine months ended September 30, 1997 and 1996. 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, 1996
(the "Annual Report").
2. INVESTMENT
At September 30, 1997, the Partnership had an investment in the ML JWH
Financial and Metals Portfolio L.L.C. ("JWH LLC") and the ML Sjo Prospect
L.L.C. ("SJO LLC").
Total revenues and fees with respect to such investments is set forth as
follows:
<TABLE>
<CAPTION>
For the three months Total Brokerage Administrative Profit Income from
ended September 30, Revenue Commissions Fees Shares Investments
1997
------------------- ---------------- ----------------- ----------- -------------------
<S> <C> <C> <C> <C> <C>
JWH LLC $ 826,433 $123,557 $ 3,530 $ 57,399 $641,947
SJO LLC 292,168 84,267 2,407 26,997 178,497
------------------- ---------------- ----------------- ----------- -------------------
Total $1,118,601 $207,824 $ 5,937 $ 84,396 $820,444
=================== ================ ================= =========== ===================
For the nine months Total Brokerage Administrative Profit Income from
ended September 30, Revenue Commissions Fees Shares Investments
1997
------------------- ---------------- ----------------- ----------- -------------------
JWH LLC $ 807,241 $263,309 $ 7,443 $ 58,420 $478,069
SJO LLC 588,203 211,654 5,976 46,715 323,858
------------------- ---------------- ----------------- ----------- -------------------
Total $1,395,444 $474,963 $13,419 $105,135 $801,927
=================== ================ ================= =========== ===================
</TABLE>
5
<PAGE>
As significant investees, income statement information for JWH LLC and SJO LLC
is set forth as follows:
ML JWH FINANCIAL AND METALS PORTFOLIO LLC
-----------------------------------------
(a Delaware limited partnership)
--------------------------------
STATEMENTS OF INCOME
--------------------
For the three For the nine
months ended months ended
September 30, September 30,
1997 1997
--------------------- -----------------
REVENUES:
Trading profits (loss):
Realized $6,666,871 $3,199,095
Change in unrealized 1,824,620 3,394,200
--------------------- -----------------
Total trading results 8,491,491 6,593,295
--------------------- -----------------
Interest income 788,805 2,312,273
--------------------- -----------------
Total revenues 9,280,296 8,905,568
--------------------- -----------------
EXPENSES:
Profit shares 389,699 406,321
Brokerage commissions 1,446,028 4,088,876
Administrative fees 39,632 110,113
--------------------- -----------------
Total expenses 1,875,359 4,605,310
--------------------- -----------------
NET INCOME $7,404,937 $4,300,258
===================== =================
6
<PAGE>
<TABLE>
<CAPTION>
ML SJO PROSPECT L.L.C
---------------------
(a Delaware limited partnership)
--------------------------------
STATEMENTS OF INCOME
--------------------
For the three For the nine
months ended months ended
September 30, September 30,
1997 1997
----------------- -----------------
<S> <C> <C>
REVENUES:
Trading profits (loss):
Realized $ 908,298 $1,597,045
Change in unrealized 510,217 1,466,171
----------------- -----------------
Total trading results 1,418,515 3,063,216
----------------- -----------------
Interest income 286,126 816,260
----------------- -----------------
Total revenues 1,704,641 3,879,476
----------------- -----------------
EXPENSES:
Profit shares 158,538 303,774
Brokerage commissions 486,759 1,416,616
Administrative fees 13,908 40,011
----------------- -----------------
Total expenses 659,205 1,760,401
----------------- -----------------
NET INCOME $1,045,436 $2,119,075
================= =================
</TABLE>
7
<PAGE>
3. FAIR VALUE AND OFF-BALANCE SHEET RISK
The Partnership's revenues by category for the respective periods were as
follows:
<TABLE>
<CAPTION>
For the three For the three For the nine For the nine
months ended months ended months ended months ended
September 30, September 30, September 30, September 30,
1997 1996 1997 1996
------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Interest rate & Stock indices $ 53,987 $ 739,854 $(31,606) $ (512,967)
Commodities (47,899) (181,877) 168,564 (143,679)
Currencies 149,453 (163,049) 378,374 169,792
Energy (15,046) 461,199 (56,427) (603,339)
Metals (7,185) (25,419) (45,580) (162,657)
------------------- ------------------- ------------------- -------------------
$133,310 $ 830,708 $413,325 $(1,252,850)
=================== =================== =================== ===================
</TABLE>
The contract/notional values of the Partnership's open derivative instrument
positions as of September 30, 1997 and December 31, 1996 were as follows:
<TABLE>
<CAPTION>
1997 1996
------------------------------------------ ---------------------------------------------
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 &
Stock Indices $19,168,961 $ - $14,701,885 $ 883,752
Commodities - 446,630 238,375 174,760
Currencies 4,900,673 2,762,021 2,315,661 5,025,340
Energy 127,080 - 129,600 -
Metals 1,097,155 962,650 205,624 652,082
------------------ ------------------ ------------------ ------------------
$25,293,869 $4,171,301 $17,591,145 $6,735,934
================== ================== ================== ==================
</TABLE>
The contract/notional value of the Partnership's exchange-traded and non-
exchange-traded open derivative instrument positions as of September 30, 1997
and December 31, 1996 were as follows:
<TABLE>
<CAPTION>
1997 1996
------------------------------------------- ---------------------------------------------
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>
Exchange
traded $19,531,871 $ 446,630 $15,736,015 $2,928,090
Non-Exchange
traded 5,761,998 3,724,671 1,855,130 3,807,844
------------------ ------------------ ------------------ ------------------
$25,293,869 $4,171,301 $17,591,145 $6,735,934
================== ================== ================== ==================
</TABLE>
8
<PAGE>
The average fair value of the Partnership's derivative instrument positions
which were open as of the end of each calendar month during the nine months
ended September 30, 1997 and the year ended December 31, 1996 were as follows:
<TABLE>
<CAPTION>
1997 1996
------------------------------------------- ---------------------------------------------
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 &
Stock Indices $12,321,782 $12,044,991 $66,308,080 $40,648,741
Commodities 646,831 241,622 4,379,786 1,232,126
Currencies 4,058,074 5,598,848 11,852,984 14,288,621
Energy 105,153 306,846 1,947,329 1,377,394
Metals 1,258,519 1,073,983 2,474,297 2,816,658
------------------ ------------------ ------------------ ------------------
$18,390,359 $19,266,290 $86,962,476 $60,363,540
================== ================== ================== ==================
</TABLE>
As of September 30, 1997 and December 31, 1996, $2,411,075 and $9,513,010 of the
Partnership's assets, respectively, were held in segregated accounts at MLF in
accordance with Commodity Futures Trading Commission regulations.
The gross unrealized profit and the net unrealized profit (loss) on the
Partnership's open derivative instrument positions as of September 30, 1997 and
December 31, 1996 were as follows:
<TABLE>
<CAPTION>
1997 1996
----------------------------------------- -----------------------------------------
Gross Net Gross Net
Unrealized Unrealized Unrealized Unrealized
Profit Profit (Loss) Profit Profit (Loss)
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Exchange
traded $ 39,593 $ 26,904 $57,600 $48,583
Non-Exchange
traded 79,238 (17,430) 26,193 7,568
------------------- -------------------- ------------------- -------------------
$118,831 $ 9,474 $83,793 $56,151
=================== ==================== =================== ===================
</TABLE>
4. RELATED PARTY TRANSACTIONS
MLIP is currently reviewing certain aspects of the interest arrangements
between the Partnership and certain affiliates of MLIP. The purpose of the
review is to confirm that the Partnership received interest credits as described
in its Prospectus. The results of this review have not been determined.
Item 2: Management's Discussion and Analysis of Financial Condition and Results
-----------------------------------------------------------------------
of Operations
------------
Operational Overview; Advisor Selections
- ----------------------------------------
Due to the nature of the Fund's business, its results of operations depend on
Merrill Lynch Investment Partners Inc.'s ("MLIP") ability to select Advisors and
determine the appropriate percentage of 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 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.
9
<PAGE>
As of October 1, 1997, the Partnership's assets were allocated as follows:
Trading Advisor Sector Allocation
--------------- ------ ----------
John W. Henry & Company, Inc. Financials/Metals 42.12
Sjo, Inc. Financials 29.38
Telesis Management Inc. Diversified 28.50
------
100.00%
MLIP expects to continue to change both allocations and Advisor
selections from time to time without advance notice to existing investors.
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.
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 nine months of 1996, the Fund's average month-end Net
Assets equaled $18,831,565, and the Fund recognized gross trading losses of
$1,252,850 or 6.65% of such average month-end Net Assets. Brokerage
commissions of $1,040,546 or 5.53%, Administrative fees of $26,681 or .14%
and Profit Shares of $4,590 or .02% of average month-end Net Assets were
paid. Interest income of $658,585 or 3.5% of average month-end Net Assets
resulted in a net loss of $1,666,082 or 8.85% of average month-end Net
Assets, which resulted in a 5.06% decrease in the Net Asset Value per Unit
since December 31, 1995.
During the first nine months of 1997, the Fund's average month-end Net
Assets equaled $13,147,124, and the Fund recognized gross trading gains of
$413,325 or 3.14% of such average month-end Net Assets. Income from
investments of $801,927 or 6.1%, Brokerage commissions of $272,411 or 2.07%,
Administrative fees of $7,678 or .06% and Profit Shares of $34,447 or .26% of
average month-end Net Assets were paid. Interest income of $246,706 or 1.88%
of average month-end Net Assets resulted in net gain of $1,147,423 or 8.73%
of average month-end Net Assets which resulted in a 9.01% increase in the Net
Asset Value per Unit since December 31, 1996.
During the first nine months of 1997 and 1996, the Fund experienced 10
profitable months and 8 unprofitable months.
<TABLE>
<CAPTION>
MONTH-END NET ASSET VALUE PER UNIT
Jan. Feb. Mar. Apr May Jun Jul Aug Sep
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1996 $115.53 $106.85 $105.04 $107.19 $104.38 $103.82 $104.12 $105.68 $109.65
- ----------------------------------------------------------------------------------------------------------
1997 $122.53 $124.41 $124.03 $120.91 $119.51 $120.99 $132.18 $126.72 $129.82
- ----------------------------------------------------------------------------------------------------------
</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
10
<PAGE>
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.
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 which is committed to trading, as interest rates affect the
calculation of the discounted minimum Net Asset Value per Unit which Merrill
Lynch & Co., Inc. has guaranteed to investors.
11
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are no pending legal proceedings to which the Partnership or the
General Partner is a party.
John W. Henry & Company, Inc. ("JWH") is one of the Advisors retained by
the Fund, managing approximately 42.12% of the fund's assets committed to
trading as of October 1, 1997. In September 1996, JWH was named as a co-
defendant in a class action lawsuit brought in the California Superior Court,
Los Angeles County and in the New York Supreme Court, New York County. In
November 1996, JWH was named as a co-defendant in a class action complaint filed
in Superior Court of the State of Delaware for Newcastle County that contained
the same allegations as the New York and California complaints. The actions,
which seek unspecified damages, purport to be brought on behalf of investors in
certain Dean Witter, Discover & Co. ("Dean Witter") commodity pools, some of
which are advised by JWH, and are primarily directed at Dean Witter's alleged
fraudulent selling practices in connection with the marketing of those pools.
JWH is essentially alleged to have aided and abetted or directly participated
with Dean Witter in those practices. JWH believes the allegations against it are
without merit; it intends to contest these allegations vigorously, and is
convinced that it will be shown to have acted properly and in the best interest
of the investors.
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
Ms. Eilene Nicoll is the vice president of trading administration and a member
of the Investment Policy Committee of John W. Henry & Company, Inc. ("JWH").
Prior to joining JWH in July 1997, Ms. Nicoll was a vice president beginning in
January 1997 at Commercial Materials, L.L.C., a newly organized corporation
which has not yet begun operations. She was a vice president and director at
West Course Capital, Inc., a CTA, from January 1994 until it dissolved in
December 1996. At West Course Capital, Inc., Ms. Nicoll was responsible for
operations and administration. Prior to joining West Course Capital, Inc., she
was a vice president at REFCO, Inc. from May 1991 to December 1993. While at
REFCO, Inc., she was also a principal of Nikkhah & Nicoll Asset Management,
Inc., a CPO. Ms. Nicoll was at Shearson Lehman Brothers from January 1987 to
December 1990 as vice president-futures, and subsequently, from January 1991 to
May 1991, at Moore Capital Management, Inc. where she was involved in all
aspects of the commodity trading advisor business, including administration,
marketing, and allocation of proprietary capital. From 1984 through 1986, she
was an independent discretionary trader. Ms. Nicoll was employed at
Commodities Corporation (USA) N.V. from 1978 to 1984 where she was an assistant
vice president. Ms. Nicoll received her B.A. in psychology from Brooklyn
College.
Ms. Glenda G. Twist and Mr. John A. Ford are no longer principals of JWH
effective August 1, 1997 and August 31, 1997, respectively.
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 nine months of
fiscal 1997.
12
<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: November 14, 1997 By /s/JOHN R. FRAWLEY, JR.
-----------------------
John R. Frawley, Jr.
President, Chief Executive Officer
and Director
Date: November 14, 1997 By /s/MICHAEL A. KARMELIN
----------------------
Michael A. Karmelin
Chief Financial Officer, Vice President
and Treasurer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> BD
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1995
<PERIOD-START> JAN-01-1997 JAN-01-1996
<PERIOD-END> SEP-30-1997 SEP-30-1996
<CASH> 0 0
<RECEIVABLES> 12913348 14360728
<SECURITIES-RESALE> 0 0
<SECURITIES-BORROWED> 0 0
<INSTRUMENTS-OWNED> 0 0
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