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Merrill Lynch Investment Partners Inc.
[ARTWORK APPEARS HERE]
ML Principal
Protection L.P.
Monthly Statement October 1998
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[LOGO] Merrill Lynch
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ML Principal Protection L.P.
The Net Asset Value ("NAV") of ML Principal Protection L.P. (the "Fund")
increased during October. Please see the accompanying summary financial
information for the NAV of your series of Units.
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Special Reminder
As tax season approaches and Merrill Lynch Investment Partners Inc. ("MLIP")
prepares for distribution of the Fund's tax information for 1998 on Schedule
K-1, investors should take steps to confirm that MLIP has their current address.
Please notify MLIP in writing of any recent or impending change of address by
notice mailed to Merrill Lynch Investment Partners Inc., World Financial Center,
South Tower, 6th Floor, New York, NY 10080, Attention: Winston Clinton. Thank
you.
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Effective November 1, 1998, the percentage of the Fund's assets allocated to
Trading Advisors for management was increased from 76.31% to 79.28%. Increasing
the percentage of assets allocated to trading increases risk and expenses as
well as profit potential.
Effective November 1, 1998, Graham Capital Management L.P. will no longer trade
additional committed capital of the Fund, but rather only 100% of the net asset
value of the assets allocated to Graham. This is a reduction in the account's
leverage, because since June 1997, Graham has been managing the Fund's assets
allocated to it as if Graham were managing 50% more equity than the allocation.
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1998 Year-to-Date
Gross Total Trading Results*
Through October 31
<TABLE>
<S> <C>
Agriculture $(469,768)
Currencies 2,941,898
Energy (1,436,029)
Financial Instruments 7,275,292
Metals (1,610,442)
Stock Indices 487,159
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Total $7,188,110
</TABLE>
*Before deduction of any fees and charges.
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FOR THE EXCLUSIVE USE OF INVESTORS IN ML PRINCIPAL PROTECTION L.P. THIS MONTHLY
REPORT IS NOT AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES. AN OFFER CAN ONLY BE MADE BY A CURRENT PROSPECTUS TOGETHER WITH
SUMMARY FINANCIAL INFORMATION FOR THE FUND CURRENT WITHIN 60 DAYS. THESE
MATERIALS CONTAIN IMPORTANT INFORMATION ABOUT RISK FACTORS, PERFORMANCE AND
OTHER ASPECTS OF THE FUND AND MUST BE READ CAREFULLY BEFORE INVESTING. FUTURES
TRADING IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF RISK. PAST PERFORMANCE IS
NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
THIS MONTHLY REPORT MUST NOT BE REPRODUCED OR DISTRIBUTED IN ANY MANNER.
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ML Principal Protection L.P.
October 31, 1998
Statement of Changes
in Net Asset Value
(unaudited)
<TABLE>
<S> <C>
Net Asset Value (844,146.5520 Units) at
September 30, 1998 $ 93,376,679
Additions of 8,198.0008 Units 819,800
Net Income/(Loss) for October 1998 56,844
Redemptions of 102,963.4000 Units (11,116,180)
Distribution - Series A Units (410,907)
Distribution - Series E Units (204,887)
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Net Asset Value (749,381.1528 Units) at
October 31, 1998 $ 82,521,349
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Net Asset Value at October 31, 1998:
Series A Units $ 116.40*
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Series B Units $ 114.62*
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Series C Units $ 109.34*
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Series D Units $ 112.12*
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Series E Units $ 111.70*
============
Series F Units $ 109.46*
============
Series G Units $ 108.19*
============
Series H Units $ 108.41*
============
Series K Units $ 110.79
============
Series L Units $ 107.92
============
Series M Units $ 109.44
============
Series N Units $ 105.49
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Series O Units $ 105.90
============
Series P Units $ 107.98
============
Series Q Units $ 99.93
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</TABLE>
* The Net Asset Value per Unit does not include the annual distributions paid to
Unitholders.
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Statement of Income/(Loss)
(unaudited)
<TABLE>
<CAPTION>
October
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<S> <C>
Revenues:
Realized Profit/(Loss) $ 2,673,466
Change in Unrealized Profit/(Loss) (2,372,433)
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Total Trading Results 301,033
Interest Income 413,008
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Total Revenues 714,041
Expenses:
Brokerage Commissions 456,902
Administrative Fees 19,916
Allocation of New Profit Share 181,175
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Total Expenses 657,993
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Net Income/(Loss) Before Minority Interest 56,048
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Minority Interest 796
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Net Income/(Loss) $ 56,844
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</TABLE>
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To the best of the knowledge and belief of the undersigned the information
contained in this report is accurate and complete.
/s/ Jo Ann Di Dario
Jo Ann Di Dario
Chief Financial Officer
Merrill Lynch Investment Partners Inc.
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Please notify the following of any address changes:
Merrill Lynch Investment Partners Inc.
Merrill Lynch World Headquarters
South Tower
World Financial Center
New York, New York 10080-6106
1-800-765-0995
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