<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, 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 12 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>
June 30, December 31,
1997 1996
----------- ------------
ASSETS
- ------
<S> <C> <C>
Accrued interest $29,301 $42,724
Equity in commodity futures
trading accounts:
Cash and option premiums 7,056,475 10,635,825
Net unrealized profit on open contracts 10,588 56,151
Investments 8,810,881 3,405,293
Receivable from outside investments - 327,498
----------- -----------
TOTAL $15,907,245 $14,467,491
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
LIABILITIES:
Redemptions payable $ 117,360 $ 327,498
Profit shares payable 17,263 58,450
Brokerage commissions payable 28,237 45,748
Administrative fees payable 807 1,499
Payable to outside investments 3,230,694 -
----------- -----------
Total liabilities 3,394,361 433,195
----------- -----------
PARTNERS' CAPITAL:
General Partners (2990 and 2990 Units) 361,756 356,079
Limited Partners (100432 and 114856 Units) 12,151,128 13,678,217
----------- -----------
Total partners' capital 12,512,884 14,034,296
----------- -----------
TOTAL $15,907,245 $14,467,491
=========== ===========
NET ASSET VALUE PER UNIT
(Based on 103422 and 117846 Units outstanding) $120.99 $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 six For the six
months ended months ended months ended months ended
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
---------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
REVENUES:
Trading profits (loss):
Realized $(139,656) $ 325,055 $317,577 $ (370,674)
Change in unrealized (68,162) (377,971) (37,562) (1,712,884)
------------ ------------ --------- ------------
Total trading results (207,818) (52,916) 280,015 (2,083,558)
------------ ------------ --------- ------------
Interest income 93,633 229,495 190,502 495,014
Income (loss) from
investments (176,490) - (18,517) -
------------ ------------ --------- ------------
Total revenues (290,675) 176,579 452,000 (1,588,544)
------------ ------------ --------- ------------
EXPENSES:
Profit shares (46,218) - 17,263 4,590
Brokerage commissions 86,683 365,246 187,326 822,328
Administrative fees 2,477 9,365 5,247 21,085
------------ ------------ --------- ------------
Total expenses 42,942 374,611 209,836 848,003
------------ ------------ --------- ------------
NET INCOME (LOSS) $(333,617) $(198,032) $242,164 $(2,436,547)
============ ============ ======== ============
NET INCOME (LOSS) PER UNIT:
Weighted average number
of units outstanding 106,411 188,447 110,173 202,609
============ ============ ======== ============
Weighted average net
income (loss) per
Limited Partner and
General Partner Unit $(3.14) $(1.05) $2.20 $(12.03)
============ ============ ======== ============
</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, 1997 and 1996
-----------------------------------------------
<TABLE>
<CAPTION>
Units Limited Partners General Partners Total
--------- ----------------------------------------------------
<S> <C> <C> <C> <C>
PARTNERS' CAPITAL,
December 31, 1995 225,594 $25,710,675 $345,379 $26,056,054
Redemptions (83,467) (8,863,416) - (8,863,416)
Net loss - (2,401,628) (34,919) (2,436,547)
--------- ------------- ------------- ------------
PARTNERS' CAPITAL,
June 30, 1996 142,127 $14,445,631 $310,460 $14,756,091
========= ============= ============= ============
PARTNERS' CAPITAL,
December 31, 1996 117,846 $13,678,217 $356,079 $14,034,296
Redemptions (14,424) (1,763,576) - (1,763,576)
Net income - 236,487 5,677 242,164
--------- ------------- ------------- ------------
PARTNERS' CAPITAL,
June 30, 1997 103,422 $12,151,128 $361,756 $12,512,884
========= ============= ============= ============
</TABLE>
See notes to financial statements.
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 June 30, 1997 and the results of its operations for the
six months ended June 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 June 30, 1997, the Partnership had an investment in the ML JWH Financial
and Metals Portfolio L.L.C. ("JWH LLC") and the Sjo Prospect Global
Diversified Portfolio 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 (loss)
ended June 30, 1997 Revenue Commissions Fees Shares from Investments
------------ ----------- -------------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
JWH LLC $(147,162) $64,138 $1,833 $ - $(213,133)
SJO LLC 102,034 60,349 1,725 3,317 36,643
------------ ----------- -------------- ---------- ----------------
Total $(45,128) $124,487 $3,558 $3,317 $(176,490)
============ =========== ============== ========== ================
<CAPTION>
For the six months Total Brokerage Administrative Profit Income (loss)
ended June 30, 1997 Revenue Commissions Fees Shares from Investments
------------ ----------- -------------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
JWH LLC $(19,192) $139,752 $3,913 $1,021 $(163,878)
SJO LLC 296,035 127,387 3,569 19,718 145,361
------------ ----------- -------------- ---------- ----------------
Total $276,843 $267,139 $7,482 $20,739 $(18,517)
============ =========== ============== ========== ================
</TABLE>
5
<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 six For the six
months ended months ended months ended months ended
June 30, June 30, June 30, June 30,
1997 1996 1997 1997
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Interest rate & Stock $(129,581) $(569,287) $(85,593) $(1,252,821)
indices
Commodities 38,988 506,765 216,463 38,198
Currencies (47,486) 239,810 228,921 332,841
Energy (37,231) (310,597) (41,381) (1,064,538)
Metals (32,508) 80,393 (38,395) (137,238)
------------- ------------- ------------ ------------
$(207,818) $ (52,916) $280,015 $(2,083,558)
============= ============= ============ ============
</TABLE>
The contract/notional values of the Partnership's open derivative instrument
positions as of June 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 $4,311,281 $ - $14,701,885 $ 883,752
Commodities 34,260 175,497 238,375 174,760
Currencies 2,933,036 2,914,950 2,315,661 5,025,340
Energy - - 129,600 -
Metals 997,423 989,948 205,624 652,082
------------------- -------------------- ------------------ ------------------
$8,276,000 $4,080,395 $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 June 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 $4,528,540 $ 343,147 $15,736,015 $2,928,090
Non-Exchange
traded 3,747,460 3,737,248 1,855,130 3,807,844
------------------- ------------------- ------------------- -------------------
$8,276,000 $4,080,395 $17,591,145 $6,735,934
=================== =================== =================== ===================
</TABLE>
6
<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 six months ended
June 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 $10,894,760 $12,016,245 $66,308,080 $40,648,741
Commodities 786,265 207,454 4,379,786 1,232,126
Currencies 3,327,231 5,291,409 11,852,984 14,288,621
Energy 97,844 306,846 1,947,329 1,377,394
Metals 1,316,423 1,091,785 2,474,297 2,816,658
-------------------- --------------- --------------- ---------------
$16,422,523 $18,913,739 $86,962,476 $60,363,540
==================== =============== =============== ===============
</TABLE>
As of June 30, 1997 and December 31, 1996, $5,912,633 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 June 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 $18,843 $18,110 $57,600 $48,583
Non-Exchange
traded 23,552 (7,522) 26,193 7,568
------------ --------------- ---------- --------------
$42,395 $10,588 $83,793 $56,151
============ ============== =========== ==============
</TABLE>
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.
7
<PAGE>
As of July 1, 1997, the Partnership's assets were allocated as follows:
<TABLE>
<CAPTION>
Trading Advisor Sector Allocation
--------------- ------ ----------
<S> <C> <C>
John W. Henry & Company, Inc. Financials/Metals 40.00
Sjo, Inc. Financials 30.00
Telesis Management Inc. Diversified 30.00
-----
100.00%
</TABLE>
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 six months of 1996, the Fund's average month-end Net
Assets equaled $21,222,032, and the Fund recognized gross trading losses of
$2,083,558 or 9.82% of average month-end Net Assets. Brokerage commissions of
$822,328 or 3.87%, Administrative fees of $21,085 or .10%, 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 a 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 1997, the Fund's average month-end Net
Assets equaled $13,285,986, and the Fund recognized gross trading gains of
$280,015 or 2.11% of such average month-end Net Assets. Losses from
investments of $18,517 or .14%, Brokerage commissions of $187,326 or 1.41%,
Administrative fees of $5,247 or .04% and Profit Shares of $17,263 or .13% of
average month-end Net Assets were paid. Interest income of $190,502 or 1.43%
of average month-end Net Assets resulted in net gain of $242,164 or 1.82% of
average month-end Net Assets which resulted in a 1.59% increase in the Net
Asset Value per Unit since December 31, 1996.
During the first six months of 1997 and 1996, the Fund experienced 5
profitable months and 7 unprofitable months.
<TABLE>
<CAPTION>
MONTH-END NET ASSET VALUE PER UNIT
------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Jan. Feb. Mar. Apr May Jun
------------------------------------------------------------
1996 $115.53 $106.85 $105.04 $107.19 $104.38 $103.82
------------------------------------------------------------
1997 $122.53 $124.41 $124.03 $120.91 $115.51 $120.99
------------------------------------------------------------
</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
8
<PAGE>
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.
9
<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 40% of the fund's assets committed to trading
as of July 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, 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.
On June 24, 1997, the Commodity Futures Trading Commission("CFTC")
accepted an Offer of Settlement from Merrill Lynch Futures Inc. ("MLF") and
others, in a matter captioned "In the Matter of Mitsubishi Corporation and
Merrill Lynch Futures Inc., et al.", CFTC Docket No. 97-10, pursuant to which
MLF, without admitting or denying the allegations against it, consented to a
finding by the CFTC that MLF had violated Section 4c(a)(A) of the Commodity
Exchange Act (the "Act"), relating to wash sales, and CFTC Regulation 1.37(a),
relating to recordkeeping requirements . MLF agreed to cease and desist from
violating Section 4c(a)(A) of the Act and Regulation 1.37(a), and to pay a civil
monetary penalty of $175,000.
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
James M. Bernard, formerly a Senior Vice President of MLIP, is no
longer with the firm.
Michael A. Karmelin has been appointed Chief Financial Officer,
Vice President and Treasurer of MLIP. Mr. Karmelin assumed these positions on
April 14, 1997, when he completed his tenure as Chief Financial Officer of
Merrill Lynch, Hubbard Inc. ("ML Hubbard"), a sponsor of real estate limited
partnerships. Mr. Karmelin was born in 1947. Mr. Karmelin joined ML Hubbard in
January 1994 as a Vice President. From May 1994 until he joined MLIP, Mr.
Karmelin was the Chief Financial Officer of ML Hubbard, responsible for its
accounting, treasury and tax functions. Prior to joining ML Hubbard, Mr.
Karmelin held several senior financial positions with Merrill Lynch & Co., Inc.
("ML&Co.") and Merrill Lynch, Pierce, Fenner & Smith Incorporated from December
1985 to December 1993, including Vice President/Senior Financial Officer
Corporate Real Estate and Purchasing, Manager Commitment Control/Capital
Budgeting, and Senior Project Manager/Project Analysis. Prior to joining ML&Co.,
Mr. Karmelin was employed at Avco Corporation for 17 years, where he held a
variety of financial positions. Mr. Karmelin holds a B.B.A. degree in Accounting
from Baruch College, C.U.N.Y. and a Master of Business Administration degree in
Corporate Strategy and Finance from New York University. Mr. Karmelin passed the
Certified Public Accountant examination in 1974 and is a member of the Treasury
Management Association, the Institute of Management Accountants and The
Strategic Leadership Forum.
10
<PAGE>
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 1997.
11
<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 12, 1997 By /s/ JOHN R. FRAWLEY, JR.
-----------------------
John R. Frawley, Jr.
President, Chief Executive Officer
and Director
Date: August 12, 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> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1995
<PERIOD-START> JAN-01-1997 JAN-01-1996
<PERIOD-END> JUN-30-1997 JUN-30-1996
<CASH> 0 0
<RECEIVABLES> 15,907,245 18,074,604
<SECURITIES-RESALE> 0 0
<SECURITIES-BORROWED> 0 0
<INSTRUMENTS-OWNED> 0 0
<PP&E> 0 0
<TOTAL-ASSETS> 15,907,245 18,074,604
<SHORT-TERM> 0 0
<PAYABLES> 3,394,361 3,318,513
<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> 12,512,884 14,756,091
<TOTAL-LIABILITY-AND-EQUITY> 15,907,245 18,074,604
<TRADING-REVENUE> 280,015 (2,083,558)
<INTEREST-DIVIDENDS> 190,502 495,014
<COMMISSIONS> 209,836 848,003
<INVESTMENT-BANKING-REVENUES> (18,517) 0
<FEE-REVENUE> 0 0
<INTEREST-EXPENSE> 0 0
<COMPENSATION> 0 0
<INCOME-PRETAX> 242,164 (2,436,547)
<INCOME-PRE-EXTRAORDINARY> 242,164 (2,436,547)
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 242,164 (2,436,547)
<EPS-PRIMARY> 2.20 (12.03)
<EPS-DILUTED> 2.20 (12.03)
</TABLE>
