<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, 1998
-------------
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 0-22448
THE SECTOR STRATEGY FUND/SM/ VI L.P.
---------------------------------------------
(Exact Name of Registrant as
specified in its charter)
Delaware 13-3714541
- --------------------------------- ---------------------------------
(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
----- -----
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
THE SECTOR STRATEGY FUND/SM/ VI L.P.
---------------------------------------------
(a Delaware limited partnership)
------------------------------
STATEMENTS OF FINANCIAL CONDITION
---------------------------------
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
------------------- -------------------
<S> <C> <C>
ASSETS
- ------
Accrued interest $ 19,701 $ 46,180
Equity in commodity futures trading accounts:
Cash and options premiums 4,431,290 10,274,262
Net unrealized profit on open contracts - 112,024
Investments 16,731,928 16,692,504
Receivable from investments 730,726 273,940
------------------- -------------------
TOTAL $21,913,645 $27,398,910
=================== ===================
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
LIABILITIES:
Redemptions payable $ 866,030 $ 441,150
Brokerage commissions payable - 38,199
Administrative fees payable 391 1,080
------------------- -------------------
Total liabilities 866,421 480,429
------------------- -------------------
PARTNERS' CAPITAL:
General Partner (1993 and 6971 Units) 229,158 820,070
Limited Partners (181066 and 221850 Units) 20,818,066 26,098,411
------------------- -------------------
Total partners' capital 21,047,224 26,918,481
------------------- -------------------
TOTAL $21,913,645 $27,398,910
=================== ===================
NET ASSET VALUE PER UNIT
(Based on 183059 and 228821 Units outstanding) $114.98 $117.64
=================== ===================
</TABLE>
See notes to financial statements.
2
<PAGE>
THE SECTOR STRATEGY FUND/SM/ VI 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,
1998 1997 1998 1997
------------------- ---------------- ---------------- --------------
<S> <C> <C> <C> <C>
REVENUES:
Trading (loss) profits:
Realized $(135,584) $ (75,615) $(267,771) $171,731
Change in unrealized (74,938) (184,348) (112,024) (3,655)
------------------- ---------------- ---------------- --------------
Total trading results (210,522) (259,963) (379,795) 168,076
------------------- ---------------- ---------------- --------------
Interest income 96,288 243,546 223,649 492,839
(Loss) income from investments (259,949) (360,227) (267,621) 58,949
------------------- ---------------- ---------------- --------------
Total revenues (374,183) (376,644) (423,767) 719,864
------------------- ---------------- ---------------- --------------
EXPENSES:
Profit shares 0 (45,619) 0 2,404
Brokerage commissions 60,366 132,536 166,504 284,093
Administrative fees 1,723 3,787 4,756 7,958
------------------- ---------------- ---------------- --------------
Total expenses 62,089 90,704 171,260 294,455
------------------- ---------------- ---------------- --------------
NET (LOSS) INCOME $(436,272) $(467,348) $(595,027) $425,409
=================== ================ ================ ==============
NET (LOSS) INCOME PER UNIT:
Weighted average number of units
outstanding 199,984 263,680 211,749 271,238
=================== ================ ================ ==============
Weighted average net (loss) income
per Limited Partner
and General Partner Unit $ (2.18) $ (1.77) $ (2.81) $ 1.57
=================== ================ ================ ==============
</TABLE>
See notes to financial statements.
3
<PAGE>
THE SECTOR STRATEGY FUND/SM/ VI L.P.
(a Delaware limited partnership)
------------------------------
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
------------------------------------------
For the six months ended June 30, 1998 and 1997
-----------------------------------------------
<TABLE>
<CAPTION>
Limited General
Units Partners Partner Total
---------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
PARTNERS' CAPITAL,
December 31, 1996 284,313 $30,188,127 $ 758,780 $30,946,907
Net income - 415,288 10,121 $ 425,409
Redemptions (33,020) (3,654,750) - (3,654,750)
---------------- ---------------- --------------- ----------------
PARTNERS' CAPITAL,
June 30, 1997 251,293 $26,948,665 $ 768,901 $27,717,566
================ ================ =============== ================
PARTNERS' CAPITAL,
December 31, 1997 228,821 $26,098,411 $ 820,070 $26,918,481
Net loss - (575,589) (19,438) (595,027)
Redemptions (45,762) (4,704,756) (571,474) (5,276,230)
---------------- ---------------- --------------- ----------------
PARTNERS' CAPITAL,
June 30, 1998 183,059 $20,818,066 $ 229,158 $21,047,224
================ ================ =============== ================
</TABLE>
See notes to financial statements.
4
<PAGE>
THE SECTOR STRATEGY FUND/SM/ VI 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/ VI L.P. (the
"Partnership" or the "Fund") as of June 30, 1998 and the results of its
operations for the six months ended June 30, 1998 and 1997. 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 generally 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, 1997 (the "Annual Report").
2. INVESTMENT
Many of the multi-advisor funds (the "Multi-Advisor Funds") sponsored by
Merrill Lynch Investment Partners Inc. ("MLIP") allocate their assets to a
number of the same Trading Advisors. However, because different Multi-
Advisor Funds have historically allocated assets to slightly different
Advisor groups, the Multi-Advisor Funds have often been required to open and
maintain individual trading accounts with each Advisor. MLIP has decided to
consolidate the trading accounts of nine of its Multi-Advisor Funds
(including the Partnership) as of June 1, 1998. The consolidation is
achieved by having these Multi-Advisor Funds close their existing trading
accounts and invest in a limited liability company, ML Multi-Manager
Portfolio L.L.C. ("MM LLC") which will open a single account with each
Advisor selected. MM LLC is managed by MLIP, initially has no investors
other than the Multi-Advisor Funds and serves solely as the vehicle through
which the assets of such Multi-Advisor Funds are combined in order to be
managed through single rather than multiple accounts.
As of June 30, 1998 the Partnership had an investment in MM LLC and as of
December 31, 1997 the Partnership had investments in the ML JWH Financial
and Metals Portfolio L.L.C. ("JWH LLC"), ML Chesapeake Diversified L.L.C.
("Chesapeake LLC"), and ML Sj" Prospect L.L.C. ("SJO LLC") as follows:
<TABLE>
<CAPTION>
1998 1997
--------------- ---------------
<S> <C> <C>
JWH LLC $ - $ 6,115,739
Chesapeake LLC - 5,354,159
SJO LLC - 5,222,606
MM LLC 16,731,928 -
--------------- ---------------
Total $16,731,928 $16,692,504
=============== ===============
</TABLE>
During the second quarter of 1998, the Partnership withdrew its investments
in JWH LLC, Chesapeake LLC and SJO LLC.
5
<PAGE>
Total revenues and fees with respect to such investments are set forth as
follows:
<TABLE>
<CAPTION>
For the six months Total Brokerage Administrative Profit Income (Loss) from
ended June 30, 1998 Revenue Commissions Fees Shares Investments
------------------- ----------------- --------------------- ----------------- -----------------------
<S> <C> <C> <C> <C> <C>
JWH LLC $(613,096) $191,892 $ 5,485 $ - $(810,473)
Chesapeake LLC 636,956 195,824 5,594 87,023 348,515
MM LLC 185,231 127,584 3,645 37,943 16,059
SJO LLC 392,638 186,551 5,330 22,479 178,278
------------------- ----------------- --------------------- ----------------- ---------------------
Total $ 601,729 $701,851 $20,054 $147,445 $(267,621)
=================== ================= ===================== ================= =====================
<CAPTION>
For the six months Total Brokerage Administrative Profit Income (Loss) from
ended June 30, 1997 Revenue Commissions Fees Shares Investments
------------------- ----------------- --------------------- ----------------- ---------------------
<S> <C> <C> <C> <C> <C>
JWH LLC $(26,936) $149,335 $ 4,182 $ 639 $(181,092)
Chesapeake LLC 341,432 211,231 5,873 25,853 98,475
SJO LLC 288,219 124,015 3,475 19,163 141,566
------------------- ----------------- --------------------- ----------------- ---------------------
Total $ 602,715 $484,581 $13,530 $ 45,655 $ 58,949
=================== ================= ===================== ================= =====================
<CAPTION>
For the three months Total Brokerage Administrative Profit Income (Loss) from
ended June 30, 1998 Revenue Commissions Fees Shares Investments
------------------- ----------------- --------------------- ----------------- ---------------------
<S> <C> <C> <C> <C> <C>
JWH LLC $(213,471) $ 68,677 $ 1,964 $ - $(284,112)
Chesapeake LLC 27,225 75,575 2,159 (10,292) (40,217)
MM LLC 185,231 127,584 3,645 37,943 16,059
SJO LLC 125,840 69,846 1,995 5,678 48,321
------------------- ----------------- --------------------- ----------------- ---------------------
Total $ 124,825 $341,682 $ 9,763 $ 33,329 $(259,949)
=================== ================= ===================== ================= =====================
<CAPTION>
For the three months Total Brokerage Administrative Profit Income (Loss) from
ended June 30, 1997 Revenue Commissions Fees Shares Investments
------------------- ----------------- --------------------- ----------------- ---------------------
<S> <C> <C> <C> <C> <C>
JWH LLC $(159,834) $ 69,011 $ 1,971 $ - $(230,816)
Chesapeake LLC (106,047) 98,941 2,827 (41,621) (166,194)
SJO LLC 101,000 59,154 1,690 3,373 36,783
------------------- ----------------- --------------------- ----------------- ---------------------
Total $(164,881) $227,106 $ 6,488 $(38,248) $(360,227)
=================== ================= ===================== ================= =====================
</TABLE>
6
<PAGE>
Condensed statements of financial condition and statements of operations for
MM LLC, JWH LLC, Chesapeake LLC and SJO LLC are set forth as follows:
<TABLE>
<CAPTION>
MM LLC JWH LLC Chesapeake LLC SJO LLC
June 30, 1998 December 31, 1997 December 31, 1997 December 31, 1997
------------------------- --------------------- ----------------- -------------------
<S> <C> <C> <C> <C>
Assets $123,484,970 $62,481,438 $17,195,182 $21,240,207
========================= ===================== ================= ===================
Liabilities $ 3,872,011 $ 1,122,533 $ 704,681 $ 2,058,617
Members' Capital 119,612,959 61,358,905 16,490,501 19,181,590
------------------------- --------------------- ----------------- -------------------
Total $123,484,970 $62,481,438 $17,195,182 $21,240,207
========================= ===================== ================= ===================
<CAPTION>
MM LLC
For the three months For the six months
ended June 30, 1998 ended June 30, 1998
------------------------- ---------------------
<S> <C> <C>
Revenues $ 1,307,775 $ 1,307,775
Expenses 1,187,403 1,187,403
------------------------- ---------------------
Net Income $ 120,372 $ 120,372
========================= =====================
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
JWH LLC
For the three months For the three months For the six months For the six months
ended June 30, 1998 ended June 30, 1997 ended June 30, 1998 ended June 30, 1997
------------------------- -------------------- ----------------------- -------------------
<S> <C> <C> <C> <C>
Revenues $(3,235,723) $(2,656,425) $(7,262,323) $ (374,729)
Expenses 991,700 1,242,115 2,333,897 2,729,950
------------------------- -------------------- ----------------------- -------------------
Net Loss $(4,227,423) $(3,898,540) $(9,596,220) $(3,104,679)
========================= ==================== ======================= ===================
<CAPTION>
Chespeake LLC
For the three months For the three months For the six months For the six months
ended June 30, 1998 ended June 30, 1997 ended June 30, 1998 ended June 30, 1997
------------------------- -------------------- ----------------------- -------------------
<S> <C> <C> <C> <C>
Revenues $ 95,555 $ (448,098) $ 1,985,575 $ 1,531,788
Expenses 299,321 250,719 903,412 1,051,638
------------------------- -------------------- ----------------------- -------------------
Net (Loss) Income $ (203,766) $ (698,817) $ 1,082,163 $ 480,150
========================= ==================== ======================= ===================
<CAPTION>
SJO LLC
For the three months For the three months For the six months For the six months
ended June 30, 1998 ended June 30, 1997 ended June 30, 1998 ended June 30, 1997
------------------------- -------------------- ----------------------- -------------------
<S> <C> <C> <C> <C>
Revenues $ 500,566 $ 765,489 $ 1,472,850 $ 2,174,836
Expenses 299,321 481,869 802,878 1,101,197
------------------------- -------------------- ----------------------- -------------------
Net Income $ 201,245 $ 283,620 $ 669,972 $ 1,073,639
========================= ==================== ======================= ===================
</TABLE>
8
<PAGE>
3. FAIR VALUE AND OFF-BALANCE SHEET RISK
As of June 1, 1998, the Partnership invested all of its assets in MM LLC. The
Partnership is thus, invested indirectly in the trading of derivative
instruments.
The Partnership's total trading results by reporting category for the
respective periods are 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,
1998 1997 1998 1997
------------------ ------------------ --------------- ----------------
<S> <C> <C> <C> <C>
Interest rates $(149,276) $ (90,581) $ (39,575) $(88,402)
Stock indices (45,969) 20,479 (208,160) 107,467
Commodities (4,808) (72,009) (38,599) 74,907
Currencies (21,592) (24,430) (103,405) 138,866
Energy 21,138 (90,482) 37,352 (68,382)
Metals (10,015) (2,940) (27,408) 3,620
------------------ ------------------ --------------- ----------------
$(210,522) $(259,963) $(379,795) $168,076
================== ================== =============== ================
</TABLE>
Fair Value
- ----------
The contract/notional values of the Partnership's open derivative instrument
positions as of June 30, 1998 and December 31, 1997 were as follows:
<TABLE>
<CAPTION>
1998 1997
------------------------------------------------ ------------------------------------------------
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 Rates $ - $ - $ 8,526,872 $ 1,289,262
Stock Indices - - 1,833,153 58,102
Commodities - - 53,000 484,698
Currencies - - 723,600 5,212,058
Energy - - - 895,458
Metals - - - 117,150
--------------------- --------------------- --------------------- ---------------------
$ - $ - $ 11,136,625 $ 8,056,728
===================== ===================== ===================== =====================
</TABLE>
The contract/notional values of the Partnership's exchange-traded and non-
exchange-traded open derivative instrument positions as of June 30, 1998 and
December 31, 1997 were as follows:
<TABLE>
<CAPTION>
1998 1997
------------------------------------------------ ------------------------------------------------
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 $ - $ - $ 11,136,625 $ 8,056,728
Non-Exchange
traded - - - -
-------------------- -------------------- -------------------- --------------------
$ - $ - $ 11,136,625 $ 8,056,728
==================== ==================== ==================== ====================
</TABLE>
9
<PAGE>
The average fair values, based on contract/notional values, 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, 1998 and the year ended December 31,
1997 were as follows:
<TABLE>
<CAPTION>
1998 1997
------------------------------------------------ ------------------------------------------------
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 $ 7,410,063 $6,542,413 $16,385,163 $ 9,028,153
Stock Indices 1,387,861 723,028 1,038,952 657,344
Commodities 128,905 166,504 847,261 467,905
Currencies 912,600 2,081,261 1,708,711 3,329,939
Energy 54,743 199,890 485,906 483,373
Metals 186,264 - 817,854 704,123
-------------------- -------------------- -------------------- --------------------
$10,080,437 $9,713,096 $21,283,847 $14,670,837
==================== ==================== ==================== ====================
</TABLE>
The gross unrealized profit and the net unrealized profit (loss) on the
Partnership's open derivative instrument positions as of June 30, 1998 and
December 31, 1997 were as follows:
<TABLE>
<CAPTION>
1998 1997
--------------------------------------------------------- -------------------------------------------------
Gross Net Gross Net
Unrealized Unrealized Unrealized Unrealized
Profit Profit Profit Profit (loss)
------------------------- ------------------------- --------------------- ---------------------
<S> <C> <C> <C> <C>
Exchange
traded $ - $ - $ 135,522 $ 112,280
Non-Exchange
traded - - 87 (256)
------------------------- ------------------------- --------------------- ---------------------
$ - $ - $ 135,609 $ 112,024
========================= ========================= ===================== =====================
</TABLE>
Item 2: Management's Discussion and Analysis of Financial Condition and Results
-----------------------------------------------------------------------
of Operations
-------------
The significant variations in both the statement of financial condition and the
statement of operations line items is primarily due to the Partnership placing
assets under the management of Advisors not through opening managed accounts
with them but rather through investing in MM LLC.
10
<PAGE>
MONTH-END NET ASSET VALUE PER UNIT
<TABLE>
<CAPTION>
Jan. Feb. Mar. Apr May Jun
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1997 $110.66 $112.34 $112.02 $110.16 $109.61 $110.30
- --------------------------------------------------------------------------
1998 $117.10 $117.18 $116.93 $112.78 $114.80 $114.98
- --------------------------------------------------------------------------
</TABLE>
Performance Summary
January 1, 1997 to June 30, 1997
January 1, 1997 to March 31, 1997
In the currency markets, the U.S. dollar rallied and started 1997 on a strong
note, rising to a four-year high versus the Japanese yen and two-and-a-half year
highs versus the Deutsche mark and the Swiss franc. January and February were
profitable trading months for currencies.
Global interest rate markets began the year on a volatile note, as investors
evaluated economic data for signs of inflation. Interest rate trading was
profitable in January; losses, however, were incurred in February and March.
In the energy markets, a slump in crude oil prices was characteristic of its
lackluster performance from the beginning of the year. Early in 1997,
volatility returned in the energy markets, reflecting the impact of a winter
significantly warmer than normal. Energy trading was profitable in February;
January and March were unprofitable.
Agricultural commodity trading proved profitable in February and March. Soybean
prices reached their highest level in over eight years, on continued demand and
fears that inventories could fall to critically low levels before the next
harvest.
April 1, 1997 to June 30, 1997
In the currency markets, the dollar underwent a significant correction in the
Spring against the Japanese yen due to the G7 finance ministers' determination
that a further dollar advance would be counter-productive to their current
goals. Currency trading was unprofitable for the second quarter.
Global interest rate trading provided varied results for the quarter. Losses
were incurred in April.due to U.S. bond prices having moved in a directionless
pattern, as investors remained concerned over inflation and its impact on
further increases in interest rates by the U.S. Federal Reserve.
Energy trading was unprofitable for the quarter. In June crude oil trended
downward during the beginning of the month, before a sudden price reversal
occurred amid speculation that Iraq exports could be delayed until August.
Price movement of heating oil and unleaded gas proved to be trendless.
Agricultural commodity trading was unprofitable for the quarter. May's profits
were due to coffee prices surging beyond three dollars a pound for the first
time in twenty years, on the possibility of frost in Brazil and reports of poor
crops in smaller countries.
January 1, 1998 to June 30, 1998
January 1 to March 31, 1998
The Fund's most profitable positions during the quarter were in the global
interest rate markets. In Europe, an extended bond market rally continued
despite an environment of robust growth in the United States, Canada and the
United Kingdom, as well as a strong pick-up in growth in continental Europe.
Gold prices drifted sideways and lower as Asian demand continued to slow and
demand in the Middle East was affected by low oil prices. Initially buoyed on
concerns about a U.S.-led military strike against Iraq, crude oil fell to a nine
year low, as the globally warm winter, the return of Iraq as a producer and the
Asian economic crisis added to OPEC's supply glut problems.
Trading results in stock index markets were mixed, but marginally unprofitable,
despite a strong first-quarter performance by the U.S. equity market as several
consecutive weekly gains were recorded with most market averages setting new
highs. Results in currency trading were also mixed, but unprofitable. In
particular, the Swiss franc weakened versus the U.S. dollar.
Agricultural commodity markets provided profitable trading results overall.
Live cattle and hog prices trended downward throughout the quarter. Cotton
prices moved mostly upward during the quarter, but prices dropped off sharply at
the end of March.
11
<PAGE>
April 1, 1998 to June 30, 1998
As swings in the U.S. dollar and developments in Japan affected bond markets,
the Fund's interest rate trading during the quarter resulted in losses,
particularly in Eurodollar deposits and U.S. Treasury bonds. Early in the
quarter, Treasury trading was range-bound, as concern that the economy might be
overheating was balanced by the potential impact of the Asian recession.
Additionally, Australian bonds and bills saw a dramatic drop in prices in early
June, as dollar-bloc currencies remained under pressure versus the U.S. dollar
due to the Japanese/Asian crisis.
Metals trading also resulted in losses, while energy trading was profitable.
The depressed gold market weakened further following news of a European Central
Bank consensus that ten to fifteen percent of reserves should be made up of gold
bullion which was at the low end of expectations. Despite production cuts
initiated by OPEC at the end of March, world oil supplies remained excessive and
oil prices stood at relatively low levels throughout the quarter.
Results in currency trading were profitable. Strong gains were realized in
positions on the Japanese yen, which weakened during June to an eight-year low
versus the U.S. dollar. Trading results in stock index markets were
unprofitable, as the Asia-Pacific region's equity markets weakened across the
board. In particular, Hong Kong's Hang Seng index trended downward during most
of the quarter and traded at a three-year low.
Agricultural commodity trading produced profits. The U.S. soybean crop got off
to a good start which contributed to higher yield expectations and a more
burdensome supply outlook and soybean prices traded in a volatile pattern for
the second half of the quarter. Sugar futures maintained mostly a downtrend, as
no major buyers emerged to support the market. Similarly, coffee prices trended
downward, as good weather conditions in Central America and Mexico increased the
prospects of more output from these countries.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not Applicable
12
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are no pending proceedings to which the Partnership or the General
Partner is a party.
Item 2. Changes in Securities and Use of Proceeds
(a) None.
(b) None.
(c) None.
(d) None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
Effective May 11, 1998, Jo Ann Di Dario became a Vice President, Treasurer
and Chief Financial Officer of Merrill Lynch Investment Partners Inc. ("MLIP").
Ms. Di Dario was born in 1946. Before joining MLIP, she was self-employed for
one year. From February 1996 to May 1997, she worked as a consultant for Global
Asset Management, an international mutual fund organizer and operator
headquartered in London, where she offered advice on restructuring the back
office operations. From May 1992 to January 1996, Ms. Di Dario served as Vice
President of Meridian Bank Corporation, a regional bank holding company. She
was responsible for managing the treasury operations of the bank holding company
and its wholly-owned subsidiary, Meridian Investment Company Inc. Ms. Di Dario
managed the domestic treasury operation of First Fidelity Bank, a regional bank,
from September 1991 to May 1992. From 1985 until December 1990, Ms. Di Dario
was Vice President, Secretary and Controller of Caxton Corporation, a commodity
pool operator and commodity trading advisor. Her background includes seven
years of public accounting experience. She graduated with high honors from
Stockton State College with a Bachelor of Science Degree in Accounting.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
--------
There are no exhibits required to be filed as part of this report.
(b) Reports on Form 8-K
-------------------
There were no reports on Form 8-K filed during the first six months of
fiscal 1998.
13
<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/ VI L.P.
By: MERRILL LYNCH INVESTMENT PARTNERS INC.
(General Partner)
Date: August 11, 1998 By /s/ JOHN R. FRAWLEY, JR.
------------------------
John R. Frawley, Jr.
Chairman, Chief Executive Officer,
President and Director
Date: August 11, 1998 By /s/ JO ANN DI DARIO
-------------------
Jo Ann Di Dario
Vice President, Chief Financial Officer
and Treasurer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> BD
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997
<PERIOD-START> JAN-01-1998 JAN-01-1997
<PERIOD-END> JUN-30-1998 JUN-30-1997
<CASH> 0 0
<RECEIVABLES> 21,913,645 27,398,910
<SECURITIES-RESALE> 0 0
<SECURITIES-BORROWED> 0 0
<INSTRUMENTS-OWNED> 0 0
<PP&E> 0 0
<TOTAL-ASSETS> 21,913,645 27,398,910
<SHORT-TERM> 0 0
<PAYABLES> 866,421 480,429
<REPOS-SOLD> 0 0
<SECURITIES-LOANED> 0 0
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<LONG-TERM> 0 0
0 0
0 0
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<OTHER-SE> 21,047,224 26,918,481
<TOTAL-LIABILITY-AND-EQUITY> 21,913,645 27,398,910
<TRADING-REVENUE> (379,795) 168,076
<INTEREST-DIVIDENDS> 223,649 492,839
<COMMISSIONS> 171,260 294,455
<INVESTMENT-BANKING-REVENUES> (267,621) 58,949
<FEE-REVENUE> 0 0
<INTEREST-EXPENSE> 0 0
<COMPENSATION> 0 0
<INCOME-PRETAX> (595,027) 425,409
<INCOME-PRE-EXTRAORDINARY> (595,027) 425,409
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (595,027) 425,409
<EPS-PRIMARY> (2.81) 1.57
<EPS-DILUTED> (2.81) 1.57
</TABLE>
