-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QeXMac3vD+xFEpkucXlM6JZVBp++xjkaslx5BWQopB8ke140UuDb1Kf1kAWGshE6 heninTpmqEw6OQ7wUGjptw== 0000809061-98-000023.txt : 19981116 0000809061-98-000023.hdr.sgml : 19981116 ACCESSION NUMBER: 0000809061-98-000023 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JWH GLOBAL TRUST CENTRAL INDEX KEY: 0001027099 STANDARD INDUSTRIAL CLASSIFICATION: [6221] IRS NUMBER: 364113382 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-22887 FILM NUMBER: 98746781 BUSINESS ADDRESS: STREET 1: C/O CIS INVESTMENTS INC STREET 2: 233 S WACKER DR STE 2300 CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3124604000 MAIL ADDRESS: STREET 1: C/O CIS INVESTMENTS INC STREET 2: 233 S WACKER DR SUITE 2300 CITY: CHICAGO STATE: IL ZIP: 60606 FORMER COMPANY: FORMER CONFORMED NAME: JWH GLOBAL PORTFOLIO TRUST DATE OF NAME CHANGE: 19961114 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 1998 Commission File Number 333-16825 JWH GLOBAL TRUST (Exact name of registrant as specified in its charter) Delaware 36-4113382 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 233 South Wacker Drive, Suite 2300, Chicago, Illinois 60606 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (312) 460-4000 Not Applicable (Former name, former address and former fiscal year, if changed since last report.) 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 Part I. Financial Information Item 1. Financial Statements Following are Financial Statements for the fiscal quarter ended September 30, 1998, and the additional time frames as noted: Fiscal Quarter Year to Date Fiscal Year Fiscal Quarter Year to Date Ended 9/30/98 To 9/30/98 Ended 12/31/97 Ended 9/30/97 To 9/30/97 -------------- -------------- -------------- -------------------------- Statement of Financial Condition X X Statement of Operations X X x x Statement of Changes in Partners' Capital X Statement of Cash Flows X x Notes to Financial Statements X JWH GLOBAL TRUST STATEMENTS OF FINANCIAL CONDITION UNAUDITED Sep 30, 1998 Dec 31, 1997 --------------- ------------- -1569001.29 ASSETS -1453706.45 Cash $841,652 $4,109,623 $847,873 Equity in commodity futures -6221.04 trading accounts: 106.61 Account balance 78,275,749 56,278,134 Unrealized gain on open futures and forwards contracts 16,701,417 4,481,153 --------------- ------------- 95,818,818 64,868,910 Interest receivable 330,553 240,745 Prepaid Initial O&O 484,632 583,762 --------------- ------------- Total assets $96,634,003 $65,693,417 =============== ============= LIABILITIES AND UNITHOLDERS' CAPITAL Liabilities: Accrued commissions due to CIS $419,517 $330,854 Accrued management fee 319,039 205,109 Accrued incentive fee 1,263,310 656,583 Accrued operating expenses 185,849 93,023 Redemptions payable 2,301,580 31,195 Selling and Offering Expenses Payable 39,007 25,129 --------------- ------------- Total liabilities 4,528,301 1,341,893 Unitholders' Capital: Beneficial owners ( 791,423.72 units outstandi 91,137,162 63,702,878 at 9/30/98, 580,678.76 units outstanding at 12/31/97) (see Note 1) Managing owner (8,410.68 units outstanding at 968,540 648,646 9/30/98 and 5,912.68 at 12/31/97) (see Note 1) --------------- ------------- Total unitholders' capital 92,105,702 64,351,524 --------------- ------------- Total liabilities and unitholders' capital $96,634,003 $65,693,417 =============== ============= This Statement of Financial Condition, in the opinion of management, reflects all adjustments necessary to fairly state the financial condition of JWH Global Trust. (See Note 6) JWH GLOBAL TRUST STATEMENTS OF OPERATIONS UNAUDITED Jul 1, 1998 Jan 1, 1998 Jul 1, 1997 Jun 2, 1997* through through through through Sep 30, 1998 Sep 30, 1998 Sep 30, 1997 Sep 30, 1997 --------------- ------------- -------------- ------------- REVENUES Gains on trading of commodity futures and forwards contracts, physical commodities and related options: Realized gain (loss) on closed positions ($3,211,107) ($737,863) ($194,893) ($653,738) Change in unrealized gain (loss) on open positions 18,942,219 12,220,264 994,940 1,546,714 Interest income 1,015,193 2,702,286 373,497 429,697 Foreign currency transaction gain (loss) (35,380) (334,421) (45,933) (37,929) --------------- ------------- -------------- ------------- Total revenues 16,710,924 13,850,265 1,127,611 1,284,744 EXPENSES Commissions paid to CIS 1,125,392 2,963,329 497,286 568,094 Exchange fees 18,063 42,463 4,196 4,609 Management fees 872,670 2,294,108 309,168 353,025 Incentive fees 1,263,310 1,263,310 52,276 58,783 Organization & Offering Expenses 140,682 382,915 0 0 Operating expenses 329,497 756,444 89,706 104,957 --------------- ------------- -------------- ------------- Total expenses 3,749,614 7,702,569 952,632 1,089,468 --------------- ------------- -------------- ------------- Net profit (loss) $12,961,310 $6,147,696 $174,979 $195,276 =============== ============= ============== ============= PROFIT (LOSS) PER UNIT OF OWNERSHIP INTEREST $15.94 $5.46 $2.72 $2.88 =============== ============= ============== ============= (see Note 1) (see Note 1) (see Note 1) (see Note 1) * Commencement of Operations was June 2, 1997 This Statement of Operations, in the opinion of management, reflects all adjustments necessary to fairly state the financial condition of JWH Global Trust. (See Note 6) JWH GLOBAL TRUST STATEMENTS OF CHANGES IN UNITHOLDERS' CAPITAL From January 1, 1998 through September 30, 1998 UNAUDITED Additional Units Sold Beneficial Managing (see Note 1) Units* Owners Owner Total --------------- ------------- -------------- ------------- Unitholders' capital at January 1, 1998 580,678.76 $63,702,878 $648,646 $64,351,524 Additional Units Sold 275,796.67 28,210,038 255,000 28,465,038 (see Note 1) Net profit (loss) 6,082,802 64,894 6,147,695 Redemptions (see Note 1) (65,051.71) (6,858,555) (6,858,555) --------------- ------------- -------------- ------------- Unitholders' capital at September 30, 1998 791,423.72 $91,137,162 $968,540 $92,105,702 =============== ============= ============== ============= Net asset value per unit January 1, 1998 (see Note 1) 109.70 109.70 Net profit (loss) per unit (see Note 1) 5.46 5.46 ------------- -------------- Net asset value per unit September 30, 1998 $115.16 $115.16 * Units of Beneficial Ownership. This Statement of Changes in Unitholders' Capital, in the opinion of management, reflects all adjustments necessary to fairly state the financial condition of JWH Global Trust. (See Note 6) JWH GLOBAL TRUST STATEMENTS OF CASH FLOWS UNAUDITED Jan 1, 1998 Jun 2, 1997* through through Sep 30, 1998 Sep 30, 1997 --------------- ------------- Cash flows from operating activities: Net profit (loss) $6,147,696 $195,276 Adjustments to reconcile net profit (loss) to net cash provided by (used in) operating activities: Change in assets and liabilities: (Increase) decrease in receivable for units 3,267,971 0 Unrealized gain (loss) on open futures contracts (12,220,264) (1,546,714) Interest receivable (89,808) (149,351) Prepaid Organization and Offering Expenses 99,130 (616,805) Accrued liabilities 902,146 781,899 Redemptions payable 2,270,385 0 Selling and Offering Expenses Payable 13,878 43,043 --------------- ------------- Net cash provided by (used in) operating activities 391,133 (1,292,652) Cash flows from financing activities: Additional Units Sold 28,465,038 47,349,951 Unitholder redemptions (6,858,555) (866,838) --------------- ------------- Net cash provided by (used in) financing activities 21,606,483 46,483,114 --------------- ------------- Net increase (decrease) in cash 21,997,615 45,190,462 Cash at beginning of period 56,278,134 1,000 --------------- ------------- Cash at end of period $78,275,749 $45,191,462 =============== ============= * Commencement of Operations was June 2, 1997 This Statement of Cash Flows, in the opinion of management, reflects all adjustments necessary to fairly state the financial condition of JWH Global Trust. (See Note 6)
JWH GLOBAL TRUST NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1998 (1) GENERAL INFORMATION AND SUMMARY JWH Global Trust (the "Trust") is a Delaware business trust organized on November 12, 1996 under the Delaware Business Trust Act. The business of the Trust is the speculative trading of commodity interests, including futures contracts on currencies, interest rates, energy and agricultural products, metals and stock indices, options on such futures contracts, and spot and forward contracts on currencies and precious metals ("Commodity Interests") pursuant to the trading instructions of an independent trading advisor. The managing owner of the Trust is CIS Investments, Inc., a Delaware corporation organized in June 1983 (the "Managing Owner"). The Managing Owner is registered as a commodity pool operator under the Commodity Exchange Act, as amended, and is responsible for administering the business and affairs of the Trust exclusive of trading decisions. The Managing Owner is an affiliate of Cargill Investor Services, Inc., the clearing broker for the Trust (the "Clearing Broker") and CIS Financial Services, Inc., which acts as the Trust's currency dealer ("CISFS"). Trading decisions for the Trust were made by an independent commodity trading advisor, John W. Henry & Company, Inc. The initial public offering of the Trust's units of beneficial interest ("Units") commenced on April 3, 1997 and concluded on September 23, 1997. The initial offering price was $100 per Unit until the initial closing of the Trust, and thereafter at the current Net Asset Value of the Trust on the last business day of the calendar month. The total amount of the initial offering was $50,000,000. On September 24, 1997, a registration statement was declared effective with the SEC to register $155,000,000 of additional Units. The Units were offered pursuant to a Prospectus dated September 26, 1997 until June 25, 1998. On June 26, 1998, an amendment to the registration statement was declared effective with the SEC and the Units are currently offered pursuant to a Prospectus dated June 26, 1998. A Post-Effective Amendment was declared effective with the SEC on October 20, 1997 to deregister $3,120,048.99 of Units which remained unsold upon the termination of the initial offering of the Units. As a result of the Units being offered at each month-end Net Asset Value, the total number of Units authorized for the Trust is not determinable and therefore is not disclosed in the financial statements. The initial closing of the Trust was on May 30, 1997 and the Trust commenced trading on June 2, 1997. The initial Beneficial Owners of the Trust, representing ownership of $1,000, were redeemed on May 30, 1997, prior to the commencement of trading. The minimum subscription size for the offering is $5,000 for individuals and $2,000 for trustees or custodians of eligible employee benefit plans and individual retirement accounts (subject to higher minimums in certain States) ; and $1,000 for existing investors in the Trust (the "Unitholders"). By September 30, 1998, a total of 856,475.43 Units were sold to Beneficial Owners of the Trust for an investment of $88,300,315 and 8,410.68 Units were sold to the Managing Owner of the Trust for an investment of $865,000, resulting in a total of 864,886.11 Units representing a total investment of $89,165,315 being sold in the offering period commencing April 3, 1997. The Managing Owner of the Trust advanced organization and offering costs of $650,000. The Trust reimbursed the Managing Owner for these costs. The Trust is amortizing these costs over 60 months. The Trust shall terminate on December 31, 2026 if none of the following occur prior to that date: (1) investors holding more than 50 percent of the outstanding Units notify the Managing Owner to dissolve the Trust as of a specific date; (2) withdrawal, insolvency, bankruptcy, retirement, resignation, expulsion or dissolution of the Managing Owner of the Trust; (3) bankruptcy or insolvency of the Trust; (4) decline in the aggregate Net Assets of the Trust to less than $2,500,000; (5) decline in the Net Asset Value per Unit to $50 or less; (6) dissolution of the Trust pursuant to the Third Amended and Restated Declaration and Agreement of Trust; or (7) any other event which shall make it unlawful for the existence of the Trust to becontinued or require dissolution of the Trust. The Trust's Third Amended and Restated Declaration and Agreement of Trust contains a full description of the Trust's term and dissolution procedures. (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting and reporting policies of the Trust conform to generally accepted accounting principles and to general practices within the commodities industry. The following is a description of the more significant of those policies which the Trust follows in preparing its financial statements. Revenue Recognition Commodity futures contracts, forward contracts, and physical commodities are recorded on the trade date. All such transactions are reported on an identified cost basis. Unrealized gains and losses reflected in the statements of financial condition represent the difference between original contract amount and market value (as determined by exchange settlement prices for futures contracts and cash dealer prices at a predetermined time for forward contracts and physical commodities) as of the last business day of the quarter-end. The Trust earns interest on its assets on deposit with CIS and CISFS at 100% of the 91-day Treasury bill rate for deposits denominated in dollars, and at the rates agreed between the Trust and CIS and CISFS for deposits denominated in other currencies. Redemptions A beneficial owner may cause any or all of his or her units to be redeemed by the Trust effective as of the last trading day of any month of the Trust based on the Net Asset Value per unit on five days' written notice to the Managing Owner. Payment will be made within 10 business days of the effective date of the redemption. Any redemption made during the first 11 months of investment is subject to a 3% redemption penalty. Any redemption made in the 12th month of investment or later will not be subject to any penalty. The Trust's Amended and Restated Declaration and Agreement of Trust contains a full description of redemption and distribution policies. Commissions Commodity brokerage commissions are typically paid for each trade transacted and are referred to as "round-turn commissions". These commissions cover both the initial purchase (or sale) and the subsequent offsetting sale (or purchase) of a commodity futures contract. The Trust does not pay commodity brokerage commissions on a per-trade basis, but rather pays monthly flat-rate Brokerage Fees at the annual rate of 6.5% (or a monthly rate of approximately 0.542%) of the Trust's month-end assets after reduction of the Management Fee. CIS receives these Brokerage Fees irrespective of the number of trades executed on the Trust's behalf. Certain large investors are eligible for a "Special Brokerage Rate" of 5% per year. Foreign Currency Transactions Trading accounts in foreign currency denominations are susceptible to both movements on underlying contract markets as well as fluctuation in currency rates. Translation of foreign currencies into U.S. dollars for closed positions are translated at an average exchange rate for the quarter, while quarter-end balances are translated at the quarter-end currency rates. The impact of the translation is reflected in the statement of operations. Statements of Cash Flows For purposes of the statements of cash flows, cash includes cash on deposit with the Clearing Broker in the equity in commodity futures trading accounts. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increase and decrease in net assets from operations during the period. Actual results could differ from those estimates. (3) FEES Management fees are accrued and paid monthly and incentive fees are accrued monthly and paid quarterly. Trading decisions for the period of these financial statements were made by John W. Henry & Company, Inc. ("JWH") utilizing two of its trading programs, the Original Investment Program and the Financial and Metals Portfolio. Effective October 5, 1998, the Managing Owner added a third JWH program to the Trust, the G-7 Currency Portfolio. Under signed agreement, JWH receives a monthly management fee of 1/12 of 4% of the Trust's month-end assets after deduction of a portion of the Brokerage Fee at the annual rate of 1.25% (rather than 6.5%) of month-end Trust assets but before deduction of any management fees, redemptions, distributions, or incentive fee accrued or payable as of the relevant month-end In addition, the Trust pays to JWH a quarterly incentive fee equal to 15% of the new trading profits of the Trust. The incentive fee is based on the overall performance of the Trust, not individually in respect of the performance of the individual programs utilized by the Trust. This fee is also calculated by deducting Brokerage Fee at a rate of 1.25% (rather than the 6.5% rate). (4) INCOME TAXES No provision for Federal income taxes has been made in the accompanying financial statements as each beneficial owner is responsible for reporting income (loss) based on the pro rata share of the profits or losses of the Trust. Generally, for both Federal and State tax purposes, trusts such as JWH Global Trust are treated as partnerships. The Trust is responsible for the Illinois State Partnership Information and Replacement Tax based on the operating results of the Trust. Such tax amounted to $42,246 and $4,188 for the periods ended September 30, 1998 and September 30, 1997 and is included in operating expenses in the Statement of Operations. (5) FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK The Trust was formed to speculatively trade Commodity Interests. The Trust's commodity interest transactions and its related cash balance are on deposit with the Clearing Broker or the Forwards Currency Broker (the "Brokers") at all times. In the event that volatility of trading of other customers of the Brokers impaired the ability of the Brokers to satisfy the obligations to the Trust, the Trust would be exposed to off-balance sheet risk. Such risk is defined in Statement of Financial Accounting Standards No. 105 ("SFAS 105") as a credit risk. To mitigate this risk, the Clearing Broker, pursuant to the mandates of the Commodity Exchange Act, is required to maintain funds deposited by customers relating to futures contracts in regulated commodities in separate bank accounts which are designated as segregated customers' accounts. In addition, the Clearing Broker has set aside funds deposited by customers relating to foreign futures and options in separate bank accounts which are designated as customer secured accounts. Lastly, the Clearing Broker is subject to the Securities and Exchange Commission's Uniform Net Capital Rule which requires the maintenance of minimum net capital of at least 4% of the funds required to be segregated pursuant to the Commodity Exchange Act. The Clearing Broker and Forwards Currency Broker both have controls in place to make certain that all customers maintain adequate margin deposits for the positions which they maintain at each Broker. Such procedures should protect the Trust from the off-balance sheet risk as mentioned earlier. Neither the Clearing Broker nor the Forwards Currency Broker engage in proprietary trading and thus has no direct market exposure. The counterparty of the Trust for futures contracts traded in the United States and most non-U.S. exchanges on which the Trust trades is the Clearing House associated with the exchange. In general, Clearing Houses are backed by their membership and will act in the event of non-performance by one of their members or one of the members' customers and as such should significantly reduce this credit risk. In cases where the Trust trades on exchanges on which the Clearing House is not backed by the exchange membership, the sole recourse of the Trust for non-performance will be the Clearing House. The Forwards Currency Broker is the counterparty for the Trust's forward transactions. CISFS policies require that they execute transactions only with top rated financial institutions with assets in excess of $100,000,000. The Trust holds futures positions on the various exchanges throughout the world and forwards positions with CISFS which transacts with various top rated banks throughout the world. As defined by SFAS 105, futures and forward currency contracts are classified as financial instruments. SFAS 105 requires that the Trust disclose the market risk of loss from all of its financial instruments. Market risk is defined as the possibility that future changes in market prices may make a financial instrument less valuable or more onerous. If the markets should move against all of the futures and forwards positions of the Trust at the same time (both long positions and short positions), and if the markets moved such that the CTA was unable to offset the futures positions of the Trust, the Trust could lose all of its assets and the Beneficial Owners would realize a 100% loss. During the period of these financials, the Trust utilized two of the trading programs of the CTA. One trading program is diversified among all commodity groups, while the other is diversified among the various futures contracts and forwards contracts in the financials and metals group. Both programs trade in the U.S. and outside of the U.S. To further increase the diversification of the Trust, on October 5, 1998 the Managing Owner added a third program of the CTA to the two programs already being traded by the Trust. This program, the G-7 Currency Portfolio, is diversified among a number of world currencies against each other, unlike the other programs which trade versus the U.S. dollar only. In addition, the G-7 Currency Portfolio trades currencies not traded in the other two programs. Such diversification should greatly reduce this market risk. The margin requirement at September 30, 1998 was $16,058,707. To meet this requirement, the Trust had on deposit with the Clearing Broker $81,060,598 in segregated funds, $11,071,609 insecured funds and $2,846,779 in non-regulated funds. At September 30, 1998, cash was on deposit with the Clearing Broker and the Forwards Currency Broker which exceeded the cash requirement amount. The following chart discloses the dollar amount of the unrealized gain or loss on open contracts related to Commodity Interests for the Trust as of September 30, 1998: COMMODITY GROUP UNREALIZED GAIN/(LOSS) AGRICULTURAL COMMODITIES 850,371 FOREIGN CURRENCIES 3,303,480 STOCK INDICES 1,054,483 ENERGIES 70,952 METALS (333,030) INTEREST RATE INSTRUMENTS 11,755,161 _________ TOTAL 16,701,417 The range of maturity dates of these exchange traded open contracts is October of 1998 to September of 1999. The average open trade equity for the period of January 1, 1998 to September 30, 1998 is $4,102,972. (6) FINANCIAL STATEMENT PREPARATION The interim financial statements are unaudited but reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. These adjustments consist primarily of normal recurring accruals. These interim financial statements should be read in conjunction with the audited financial statements of the Trust for the year ended December 31, 1997, as filed with the Securities and Exchange Commission on March 30, 1998, as part of its Annual Report on Form 10-K. The results of operations for interim periods are not necessarily indicative of the operating results to be expected for the fiscal year. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation Fiscal Quarter ended September 30, 1998 The Trust recorded a gain of $12,961,310 or $15.94 per Unit for the third quarter of 1998. This compares to a gain of $174,979 or $2.72 per Unit for the third quarter of 1997. The Trust suffered losses during the first month of the quarter largely as a result of losses in interest rates and stock indices. During the second and third months of the quarter, the Trust experienced solid gains in interest rates and smaller gains in currencies and stock indices. At September 30, 1998, John W. Henry & Company, Inc. was managing 100% of the Trust's assets in two trading programs, the Original Investment Program and the Financial and Metals Portfolio. Effective October 5, 1998, the Managing Owner added a third trading program of John W. Henry & Company, Inc. to the Trust, the G-7 Currency Portfolio. In July, the Trust incurred small losses as unprofitable positions in interest rates, stock indices and agricultural commodities offset moderate gains in gold and crude oil. The price of gold declined at month end along with the Japanese yen's fall in world markets; gold and the Japanese yen have moved in lockstep since early June, reflecting the diminishing demand for gold as the region's economies retract. Crude oil prices fell at month end following an earlier rise, as reports indicated a build-up in U.S. inventory. Gains in long-term European bond markets failed to offset losses in other long-term interest rates traded. Corn prices plunged on favorable weather conditions for crops; profitable positions in corn and smaller gains in wheat, soybean oil and live cattle did not offset losses in other markets traded. The Trust recorded a loss of $2,455,012 or $3.03 per Unit in July. In August the Trust posted solid gains, led by profitable positions in global interest rates. Leading gains in the bond market were positions in German and U.S. bonds, which benefited from investors' flight to quality during the month, and the Japanese Government bond, where the yield on the benchmark 10-year bond dropped to 1.105%, a historic low. The U.S. dollar made little progress against the Japanese yen as Japanese officials renewed their threats of intervention in the currency markets. The world's supply of crude oil skyrocketed in August, up 11% from a year earlier, holding prices down. The price of crude oil has been halved from its 1997 high of $26.62 per barrel; positions in this key energy market resulted in gains. The Trust recorded a gain of $8,471,809 or $10.42 per Unit in August. In September, the Trust recorded gains as profitable positions in interest rates and smaller gains in currencies and stock indices offset losses in metals, energy and agricultural commodities. Except for Australian bonds, which reflected the uncertainty of an upcoming election in that country, positions in all interest rates traded were profitable. Gains were strongest in German, U.S. and Japanese government bonds; in all three markets, yields declined to historic levels. Profitable positions in the German mark and Swiss franc and smaller gains in the British pound offset losses in other currencies traded. Positions in gold and silver resulted in losses as prices of both metals rose. Sugar plummeted to an 11-year low during the month on reduced demand and expectations of record crops in Brazil; gains in sugar and cocoa failed to offset losses in other agricultural commodities traded, but the Trust recorded a gain of $6,944,513 or $8.55 per Unit in September. During the quarter there were 31,703.31 additional Units sold to the Beneficial Owners for an investment of $3,286,936; there were no Units sold to the Managing Owner. Investors redeemed a total of 42,437.10 Units during the quarter. At the end of the quarter there were 791,423.72 Units outstanding owned by the Beneficial Owners and 8,410.68 Units outstanding owned by the Managing Owner. See Footnote 5 of the Financial Statements for procedures established by the Managing Owner to monitor and minimize market and credit risks for the Trust. In addition to the procedures set out in Footnote 5, the Managing Owner reviews on a daily basis reports of the Trust's performance, including monitoring of the daily net asset value of the Trust. The Managing Owner also reviews the financial situation of the Trust's Clearing Broker on a monthly basis. The Managing Owner relies on the policies of the Clearing Broker to monitor specific credit risks. The Clearing Broker does not engage in proprietary trading and thus has no direct market exposure which provides the Managing Owner assurance that the Trust will not suffer trading losses through the Clearing Broker. Year 2000 Issue The Trust does not have any anticipated costs, problems or uncertainties associated with the Year 2000 issue. The Trust relies on the Managing Owner to provide the Trust with certain calculations and reports, so if the Year 2000 issue is material to the Managing Owner, then it may impact the Trust. However, the Year 2000 issue is not material for the Managing Owner since the administration software has recently been replaced and will be in compliance with Y2000 prior to the end of 1998. In addition, the Clearing Broker is undergoing an intensive review to determine what areas (if any) are not in compliance with Y2000, and expects to be in compliance by the end of 1998. Neither the software replacement nor the compliance review are expected to be material or to yield noncompliance issues that are material. Fiscal Quarter ended September 30, 1997 The Trust recorded a gain of $174,979 or $2.72 per Unit for the third quarter of 1997. Trading for the Trust commenced on June 2, 1997, therefore there were only four months of trading activity for the Trust during the fiscal year of 1997 and there is no comparative to prior year activity. For the four month period ended September 30, 1997, the Trust posted a gain of $195,276 or $2.88 per Unit. The Trust experienced gains during the first month of the quarter as a result of strong profits in global interest rate positions, metals and some currencies. During the second month of the quarter, the Trust suffered losses in U.S and European interest rates, currencies, crude oil and metals, while the third month of the quarter experienced losses in foreign exchange, agricultural markets, currencies and metals. At September 30, 1997, John W. Henry & Company, Inc. was managing 100% of the Trust's assets in two trading programs, the Original Investment Program and the Financial and Metals Portfolio. In July, positions in U.S. Treasuries resulted in strong gains as did positions in Japanese Government bonds. In the currency markets, investors traded German marks and Swiss francs for U.S. dollars, pushing the dollar to new highs against both currencies. Except for sugar, positions in all other agricultural commodities traded resulted in losses. Silver and gold prices fell reflecting the sale by the Australian central bank of 60% of its gold reserves; the positions held by the Trust in both metals were profitable. The Trust recorded a gain of $1,436,591.42 or $6.65 per Unit in July. In August, crude oil prices were pressured downward and traded erratically in part due to the recent return of Iraqi oil to world markets. Trading volatility also accounted for losses in the global interest rate sector and metals. Price reversals in the U.S. 30-year bond and U.S. and Australian 10-year notes resulted in losses for the Trust. While losses occurred in the Deutsche mark and Swiss franc, gains were made in the Japanese yen and the Nikkei stock index. Positions in coffee, cotton and corn also resulted in gains for the Trust. However, these gains did not offset the losses incurred and the Trust recorded a loss of $702,857.20 or $2.41 per Unit in August. In September, performance was negatively impacted by positions in agricultural markets, currencies, metals and foreign exchange. Positions in global interest rate markets and the Japanese Nikkei were slightly profitable. Except for the Australian dollar, positions in all other currencies traded resulted in losses. Small gains in cotton failed to offset losses in coffee, sugar and other agricultural markets. Positions in silver and copper resulted in gains, offsetting losses in gold. The Trust recorded a loss of $558,754.99 or $1.50 per Unit in September. During the quarter there were 235,891.50 additional Units sold to the Beneficial Owners for an investment of $24,678,671 and 2,105.63 Units sold to the Managing Owner for an investment of $220,000, representing a total of 237,997.13 additional Units sold for a total investment of $24,898,671. Investors redeemed a total of 197.05 Units during the quarter. At the end of the quarter there were 449,120.26 Units outstanding owned by the Beneficial Owners and 4,604.04 Units outstanding owned by the Managing Owner. During the fiscal quarter ended September 30, 1997, the Trust had no credit exposure to a counterparty which is a foreign commodities exchange or to any counterparty dealing in over the counter contracts which was material. Fiscal Quarter ended June 30, 1998 The Trust recorded a loss of $2,077,043 or $2.98 per Unit for the second quarter of 1998. This compares to a gain of $20,296.37 or $0.16 per Unit for the second quarter of 1997. During the first and third months of the quarter, the Trust experienced losses primarily as a result of unprofitable positions in currencies, interest rates and metals, while during the second month gains were recorded primarily due to gains in the currency, interest rate, metals and energy markets. At June 30, 1998, John W. Henry & Company, Inc. was managing 100% of the Trust's assets in two trading programs, the Original Investment Program and the Financial and Metals Portfolio. In April, positions in nearly all markets traded were unprofitable. Positions in the U.S. 30-year bond and Euro dollar markets resulted in losses for interest rate futures. Unprofitable positions in the German mark and Swiss franc offset gains in other currencies traded. Silver prices fell following reports that a major investment company had sold a third of its holdings. Losses in silver and copper offset profits in gold. Sugar prices fell to a five-year low on prospects of a large Brazilian crop. Positions in sugar resulted in profits as did positions in coffee, wheat, corn and soybean oil. The Trust recorded a loss of $3,358,004 or $4.68 per Unit in April. In May gains were recorded reflecting profitable positions in interest rates, metals, energies and currencies. The strongest gains overall came from positions in the Japanese yen, Japanese Government bond, silver and crude oil. Silver prices slumped as investors who bought on hopes of rising value lost patience and took profits. Crude oil prices were pressured by worries of oversupply in world markets. Gains were also recorded in positions in the Australian dollar as a nervous market dealt with rumors of further currency devaluations in Asia; the Australian currency fell to a 12-year low against the U.S. dollar. Positions in stock indices and agricultural commodities resulted in losses overall; but the Trust recorded a gain of $2,563,534 or $3.34 per Unit in May. In June losses were recorded due largely to unprofitable positions in global interest rates and metals. Unprofitable positions in the Japanese Government bond led losses in global interest rates as the yield rose from record lows following intervention to support the yen. A marginal gain in the Japanese yen failed to offset losses in the British pound and Swiss franc. Positions in gold and silver also resulted in losses as the prices of both metals remained coupled to movements in the Japanese yen. Gains were recorded in crude oil positions as inventories worldwide continued to exceed demand and prices fell. Profitable positions in cotton, sugar, coffee and corn offset losses in other agricultural markets. The Trust recorded a loss of $1,282,573 or $1.64 per Unit in June. During the quarter there were 107,284.71 additional Units sold to the Beneficial Owners for an investment of $10,589,942 and 1,114.19 Units sold to the Managing Owner for an investment of $110,000, representing a total of 108,398.90 additional Units sold for a total investment of $10,699,942. Investors redeemed a total of 14,260.80 Units during the quarter. At the end of the quarter there were 802,157.51 Units outstanding owned by the Beneficial Owners and 8,410.68 Units outstanding owned by the Managing Owner. During the fiscal quarter ended June 30, 1998, the Trust had no credit exposure to a counterparty which is a foreign commodities exchange or to any counterparty dealing in over the counter contracts which was material. Fiscal Quarter ended June 30, 1997 The Trust recorded a gain of $20,296.37 or $0.16 per Unit for the second quarter of 1997. Trading for the Trust commenced on June 2, 1997, therefore there was only one month of trading activity for the Trust during the second quarter and there is no comparative to prior year activity. The Trust experienced gains due to profitable positions in metals, interest rates and stock indices. At June 30, 1997, John W. Henry & Company, Inc. was managing 100% of the Trust's assets in two trading programs, the Original Investment Program and the Financial and Metals Portfolio. In June, gold prices fell to a four-year low as the U.S. dollar strengthened and inflation indicators remained favorable. Positions in both gold and silver were profitable. Continued uncertainty surrounding the European currency union benefited bond markets outside the EMU circle of nations. In the currency markets, the Swiss monetary authority's determination to keep the franc from appreciating against major currencies succeeded in pushing the price of that currency down. After reaching a 20-year high in May, coffee prices fell steadily in June on news of higher world exports and concerns about the impact of high prices on demand. The Trust recorded a gain of $20,296.37 or $.16 per Unit in June. During the quarter there were 224,362.25 additional Units sold, including 2,498.40 Units sold to the Managing Owner representing a total of $22,451,280. Investors redeemed a total of 8,438.02 Units during the quarter (not including the redemption by the initial Beneficial Owners of the Trust, representing ownership of $1,000). At the end of the quarter there were 215,924.22 Units outstanding (including 2,498.40 Units owned by the Managing Owner). During the fiscal quarter ended June 30, 1997, the Trust had no credit exposure to a counterparty which is a foreign commodities exchange or to any counterparty dealing in over the counter contracts which was material. Fiscal Quarter ended March 31, 1998 The Trust recorded a loss of $4,736,571 or $7.50 per Unit for the first quarter of 1998. Trading for the Trust commenced on June 2, 1997, therefore there is no comparative to prior year first quarter activity. During the first two months of the quarter, the Trust experienced losses primarily as a result of unprofitable positions in currencies and interest rates, while during the third month losses were recorded primarily due to losses in metals positions and in the global interest rate market. At March 31, 1998, John W. Henry & Company, Inc. was managing 100%of the Trust's assets in two trading programs, the Original Investment Program and the Financial and Metals Portfolio. In January, performance was negatively impacted by sharp reversals in Japanese financial markets and in gold. Investor optimism over efforts to revive ailing Asian economies boosted the Japanese yen against the U.S. dollar and gave support to theNikkei; positions in both resulted in losses for the Trust. Benign inflation news in Europe and the U.S. boosted bond markets in both regions, resulting in gains for the Trust. These gains were offset by losses in stock indices and in gold prices. Positions in crude oil and coffee produced some gains for the Trust. Overall, the Trust recorded a loss of $1,823,674 or $3.11 per Unit in January. In February, losses were incurred in nearly all currencies traded. Trading was also unprofitable in U.S. Treasury bonds, interest rates and gold. The purchase of large quantities of silver by a major investor caused the prices of the precious metal to soar in world markets, before succumbing to some profit taking at month end; positions in silver resulted in gains for the Trust. Profitable positions in most European bonds failed to offset losses in other long- and short-term interest rates. Gains in sugar, corn and cotton offset losses in other agricultural commodities traded. The Trust recorded a loss of $760,060 or $1.21 per Unit in February. In March, the U.S. dollar rose against most of its major counterparts, gaining strength from the flight of international capital from a deteriorating Japanese economy and the purchase of dollars to buy U.S. Treasury bonds as yields in key European bond markets hit post-war lows. Positions in the Swiss franc and the German mark resulted in gains for the Trust. Positions in the U.S. 30-year bond led losses in the global interest rate market. Inflation concerns, fueled by rising oil prices, propelled gold prices sharply higher. Positions in gold were unprofitable, as were positions in silver, which became more volatile during the month. Except for small gains in soybeans and soybean-derivative markets, positions in agricultural commodities resulted in losses overall. The Trust recorded a loss of $2,152,837 or $3.18 per Unit in March. During the quarter there were 136,808.65 additional Units sold to the Beneficial Owners for an investment of $14,333,161 and 1,383.81 Units sold to the Managing Owner for an investment of $145,000, representing a total of 138,192.46 additional Units sold for a total investment of $14,478,161. Investors redeemed a total of 8,353.80 Units during the quarter. At the end of the quarter there were 709,133.61 Units outstanding owned by the Beneficial Owners and 7,296.47 Units outstanding owned by the Managing Owner. During the fiscal quarter ended March 31, 1998, the Trust had no credit exposure to a counterparty which is a foreign commodities exchange or to any counterparty dealing in over the counter contracts which was material. Item 3. Quantitative and Qualitative Disclosures About Market Risk Not Applicable. Part II. OTHER INFORMATION Item 1. Legal Proceedings The Trust and its affiliates may from time to time be parties to various legal actions arising in the normal course of business. The Managing Owner believes that there are no proceedings threatened or pending against the Trust or any of its affiliates which, if determined adversely, would have a material adverse effect on the financial condition or results of operations of the Trust. Item 2. Changes in Securities None Item 3. Defaults Upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K a) Exhibits None b) Reports on Form 8-K None 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 and thereunto duly authorized. JWH GLOBAL TRUST Date: November 12, 1998 By: CIS Investments, Inc., its Managing Owner By: /s/ Richard A. Driver Richard A. Driver Treasurer (Duly authorized officer of the Managing Owner and the Principal Financial Officer of the Managing Owner) EX-27 2
5 This schedule contains summary information extracted from JWH Global Trust for the third quarter of 1998 and is qualified in its entirety by reference to such 10-Q. 0001027099 JWH GLOBAL TRUST 3-MOS DEC-31-1997 SEP-30-1998 95,818,818 0 815,185 0 0 96,634,003 0 0 96,634,003 4,528,301 0 0 0 0 92,105,702 96,634,003 0 16,710,924 0 3,749,614 0 0 0 12,961,310 0 12,961,310 0 0 0 12,961,310 15.94 15.94
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