10-Q

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 quarter ended:     June 30, 2010

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:     0-32687

WORLD MONITOR TRUST II – SERIES E

(Exact name of registrant as specified in its charter)

Delaware	13-4058319
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

900 King Street, Suite 100, Rye Brook, New York	10573
(Address of principal executive offices)	(Zip Code)

(914) 307-7000

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether 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 Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  x    No   ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes  ¨    No   ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “accelerated filer”, “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  ¨	Accelerated filer  ¨
Non-accelerated filer  x	Smaller Reporting Company  ¨

Indicate by check mark whether Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  ¨    No   x

WORLD MONITOR TRUST II – SERIES E

INDEX TO QUARTERLY REPORT ON FORM 10-Q

JUNE 30, 2010

		Page
PART I – FINANCIAL INFORMATION		4
Item 1.	Financial Statements	5
	Condensed Statements of Financial Condition as of June 30, 2010 (Unaudited) and December 31, 2009	6
	Condensed Schedules of Investments as of June 30, 2010 (Unaudited) and December 31, 2009	7
	Condensed Statements of Operations (Unaudited) For the Three Months and Six Months Ended June 30, 2010 and 2009	8
	Condensed Statements of Changes in Trust Capital (Unaudited) For the Six Months Ended June 30, 2010 and 2009	9
	Notes to Condensed Financial Statements (Unaudited)	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	29
PART II – OTHER INFORMATION		30
Item 1.	Legal Proceedings	30
Item 1.A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 5.	Other Information	30
Item 6.	Exhibits:	30

3

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;

FINANCIAL STATEMENTS TO FOLLOW]

4

WORLD MONITOR TRUST II – SERIES E

CONDENSED FINANCIAL STATEMENTS

June 30, 2010

5

WORLD MONITOR TRUST II – SERIES E

CONDENSED STATEMENTS OF FINANCIAL CONDITION

June 30, 2010 (Unaudited) and December 31, 2009

	June 30, 2010		December  31, 2009
ASSETS
Cash and cash equivalents (See Note 2)	$	12,793,253	$	14,633,636
Receivable from Managing Owner		24,319		57,155
Net unrealized gain on open forward contracts		0		6,948
Net unrealized gain on open futures contracts		0		18,196
Total assets	$	12,817,572	$	14,715,935
LIABILITIES
Net unrealized loss on open forward contracts	$	124,944	$	0
Net unrealized loss on open futures contracts		4,814		0
Commissions, administrative services and other transaction fees payable		28,813		37,726
Accrued expenses payable		104,432		81,891
Management fees payable		20,924		24,794
Redemptions payable		362,800		218,530
Total liabilities		646,727		362,941
TRUST CAPITAL (Net Asset Value)
Managing Owner Interests (none and none outstanding) at June 30, 2010 and December 31, 2009, respectively
Limited Interests (65,298.106 and 70,384.249 interests outstanding) at June 30, 2010 and December 31, 2009, respectively		12,170,845		14,352,994
Total trust capital (Net Asset Value)		12,170,845		14,352,994
Total liabilities and trust capital	$	12,817,572	$	14,715,935

Net Asset Value per Limited Interest

June 30, 2010		December 31, 2009
$	186.39	$	203.92

See accompanying notes.

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WORLD MONITOR TRUST II – SERIES E

CONDENSED SCHEDULES OF INVESTMENTS

June 30, 2010 (Unaudited) and December 31, 2009

	June 30, 2010					December 31, 2009
	Net Unrealized Gain (Loss) as a % of Trust Capital		Net Unrealized Gain (Loss)			Net Unrealized Gain (Loss) as a % of Trust Capital		Net Unrealized Gain (Loss)
Futures and Forward Contracts
Futures contracts purchased:
Commodities	(0.01	)%	$	(978	)	1.45	%	$	208,653
Energy	0.00	%		0		0.08	%		12,064
Interest rates	0.00	%		0		(0.99	)%		(142,697	)
Stock indices	0.00	%		0		0.20	%		28,598
Net unrealized gain (loss) on futures contracts purchased	(0.01	)%		(978	)	0.74	%		106,618
Futures contracts sold:
Commodities	(0.03	)%		(3,836	)	(0.60	)%		(86,246	)
Currencies	0.00	%		0		0.00	%		(50	)
Energy	0.00	%		0		0.03	%		3,780
Interest rates	0.00	%		0		(0.03	)%		(4,993	)
Stock indices	0.00	%		0		(0.01	)%		(913	)
Net unrealized loss on futures contracts sold	(0.03	)%		(3,836	)	(0.61	)%		(88,422	)
Net unrealized gain (loss) on futures contracts	(0.04	)%	$	(4,814	)	0.13	%	$	18,196
Forward currency contracts purchased:
Net unrealized gain (loss) on forward contracts purchased	(3.01	)%		(366,350	)	2.92	%	$	419,500
Forward currency contracts sold:
Net unrealized gain (loss) on forward contracts sold	1.98	%		241,406		(2.87	)%		(412,552	)
Net unrealized gain (loss) on forward contracts	(1.03	)%	$	(124,944	)	0.05	%	$	6,948

See accompanying notes.

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WORLD MONITOR TRUST II – SERIES E

CONDENSED STATEMENTS OF OPERATIONS

For the Three Months Ended June 30, 2010 and 2009 and

For the Six Months Ended June 30, 2010 and 2009

(Unaudited)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2010			2009			2010			2009
REVENUES
Realized	$	667,190		$	(927,122	)	$	(302,789	)	$	(1,517,326	)
Change in unrealized		(578,453	)		(77,325	)		(154,902	)		(280,514	)
Interest income		1,950			2,670			3,176			6,611
Total revenues (losses)		90,687			(1,001,777	)		(454,515	)		(1,791,229	)
EXPENSES
Commission, administrative services and other transaction fees		279,944			303,266			563,571			643,831
Management fees		64,283			85,108			129,653			185,034
Incentive fees		0			0			0			31
General and administrative		53,158			67,623			104,206			133,044
Total expenses		397,385			455,997			797,430			961,940
General and administrative expenses borne by the Managing Owner and affiliates		(15,451	)		(27,406	)		(24,319	)		(32,108	)
Net expenses		381,934			428,591			773,111			929,832
NET LOSS	$	(291,247	)	$	(1,430,368	)	$	(1,227,626	)	$	(2,721,061	)
NET LOSS PER WEIGHTED AVERAGE LIMITED INTEREST
Net loss per weighted average Limited Interest	$	(4.34	)	$	(17.43	)	$	(17.98	)	$	(30.57	)
Weighted average number of Limited Interests outstanding		67,115			82,075			68,280			89,022

See accompanying notes.

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WORLD MONITOR TRUST II – SERIES E

CONDENSED STATEMENTS OF CHANGES IN TRUST CAPITAL

For the Six Months Ended June 30, 2010 and 2009

(Unaudited)

	Interests		Limited Interests			Managing Owner Interests			Total
For the Six Months Ended June 30, 2010
Trust capital at December 31, 2009	70,384.249		$	14,352,994		$	0		$	14,352,994
Redemptions	(5,086.143	)		(954,523	)		0			(954,523	)
Net loss for the six months ended June 30, 2010				(1,227,626	)		0			(1,227,626	)
Trust capital at June 30, 2010	65,298.106		$	12,170,845		$	0		$	12,170,845
For the Six Months Ended June 30, 2009
Trust capital at December 31, 2008	92,471.646		$	20,731,073		$	210,613		$	20,941,686
Redemptions	(15,956.452	)		(3,108,694	)		(197,480	)		(3,306,174	)
Net loss for the six months ended June 30, 2009				(2,707,928	)		(13,133	)		(2,721,061	)
Trust capital at June 30, 2009	76,515.194		$	14,914,451		$	0		$	14,914,451

See accompanying notes.

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WORLD MONITOR TRUST II – SERIES E

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

Note 1. ORGANIZATION

A. General Description of the Trust

World Monitor Trust II (the “Trust”) is a business trust organized under the laws of Delaware on April 22, 1999. The Trust consists of three separate and distinct series (“Series”): Series D, E and F. Series D, E and F commenced trading operations on March 13, 2000, April 6, 2000 and March 1, 2000, respectively, and each Series was to continue to exist until terminated pursuant to the provisions of Article XIII of the Sixth Amended and Restated Declaration of Trust and Trust Agreement (the “Trust Agreement”). On December 31, 2009, Series D and Series F terminated under the provisions of the Trust Agreement. The assets of each Series are segregated from those of the other Series, separately valued and independently managed and separate financial statements are prepared for each Series. Each Series was formed to engage in the speculative trading of a diversified portfolio of futures, forward and options contracts, and may, from time to time, engage in cash and spot transactions. The trustee of the Trust is Wilmington Trust Company. The fiscal year end of the Trust and Series E is December 31, 2010.

In 2009, Preferred Investment Solutions Corp., the managing owner of Series D, E and F, determined that effective March 1, 2009, Interests in Series D, E and F can only be redeemed as of the last business day of each month. Through February 27, 2009, redemptions were permitted on a weekly basis. As a result, through 2008, interim period financial statements of Series D, E and F were as of the last valuation day in the last week of the period. Beginning in 2009, interim period financial statements of Series D, E and F are as of the last day of a calendar quarter.

Effective May 5, 2009, Preferred Investment Solutions Corp. changed its name to Kenmar Preferred Investments Corp. (“Kenmar Preferred” or the “Managing Owner”). Kenmar Preferred or Managing Owner refers to either Preferred Investment Solutions Corp. or Kenmar Preferred Investments Corp., depending on the applicable period discussed.

In the event that the estimated Net Asset Value per Interest of Series E at the end of any business day after adjustments for distributions and redemptions declines by 50% or more since the commencement of trading activities or the first day of a fiscal year, Series E will automatically terminate. Should the Managing Owner make a determination that Series E’s aggregate net assets in relation to its operating expenses make it unreasonable or imprudent to continue the business of Series E, or, in the exercise of its reasonable discretion, if the aggregate Net Asset Value of Series E as of the close of business on any business day declines below $10 million, the Managing Owner may dissolve Series E.

B. Regulation

As a registrant with the Securities and Exchange Commission (“SEC”), the Trust is subject to the regulatory requirements under the Securities Act of 1933 and the Securities Exchange Act of 1934. As a commodity pool, the Trust is subject to the regulations of the Commodity Futures Trading Commission (“CFTC”) an agency of the United States (“U.S.”) government which regulates most aspects of the commodity futures industry; rules of the National Futures Association, an industry self-regulatory organization; and the requirements of the various commodity exchanges where the Trust executes transactions. Additionally, the Trust is subject to the requirements of the futures commission merchants (brokers) and interbank market makers through which the Trust trades.

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WORLD MONITOR TRUST II – SERIES E

NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

Note 1. ORGANIZATION (CONTINUED)

C. The Offering

Up to $50,000,000 of limited interests in each Series (“Limited Interests”) were being offered (totaling $150,000,000) (“Subscription Maximum”) until each Series’ Subscription Maximum was met either through sale or exchange or until the Managing Owner suspended the offering of Limited Interests as discussed below. Interests were offered to investors who met certain established suitability standards, with a minimum initial subscription of $5,000 ($2,000 for an individual retirement account), although the minimum purchase for any single Series was $1,000. General Interests were also sold exclusively to the Managing Owner. Limited Interests and Managing Owner or General Interests are sometimes collectively referred to as (“Interests”).

Initially, the Limited Interests for each Series were offered for a period of up to 180 days after the date of the Prospectus (“Initial Offering Period”) at $100 per interest. The subscription minimum of $5,000,000 for each Series was reached during the Initial Offering Period permitting Series D, E and F to commence trading operations. Series E completed its initial offering on April 6, 2000 with gross proceeds of $5,157,459, which was fully allocated to commodities trading. Future redemptions in Series E will impact the amount of funds available for investment in commodity contracts in subsequent periods.

Effective December 1, 2008, in accordance with the Fourth Amended and Restated Declaration of Trust and Trust Agreement, the Managing Owner was no longer required to maintain at least a 1% interest in the capital, profits and losses of each Series. As such, the Managing Owner redeemed its entire interest in each Series in 2009.

D. The Trading Advisor

Each Series has its own independent commodity trading advisor that makes that Series’ trading decisions. The Managing Owner, on behalf of Series E, entered into an advisory agreement with Graham Capital Management, L.P. (the “Trading Advisor”) to make the trading decisions for Series E. The advisory agreement may be terminated for various reasons, including at the discretion of the Managing Owner. The Managing Owner has allocated 100% of the assets of Series E to the Trading Advisor. Series E terminated its Advisory Agreement with the Trading Advisor effective close of business on June 30, 2010 (See Note 9).

Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Basis of Accounting

The condensed statements of financial condition, including the condensed schedules of investments, as of June 30, 2010, the condensed statements of operations for the three months ended June 30, 2010 (“Second Quarter 2010”), and for the six months ended June 30, 2010 (“Year-To-Date 2010”) and for the three months ended June 30, 2009 (“Second Quarter 2009”) and for the six months ended June 30, 2009 (“Year-To-Date 2009”), and the condensed statements of changes in trust capital for the Year-To-Date 2010 and Year-To-Date 2009, are unaudited. In the opinion of the Managing Owner, the condensed financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to state fairly the financial position of Series E as of June 30, 2010 and the results of its operations for the Second

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WORLD MONITOR TRUST II – SERIES E

NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

A. Basis of Accounting (Continued)

Quarter 2010, Second Quarter 2009, Year-To-Date 2010 and Year-To-Date 2009. The operating results for these interim periods may not be indicative of the results expected for a full year.

Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Fund’s annual report on Form 10-K filed with the SEC for the year ended December 31, 2009.

The condensed financial statements of Series E are prepared in accordance with U.S. GAAP, which requires the Managing Owner 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 condensed financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Commodity futures and foreign exchange transactions are reflected in the accompanying condensed statements of financial condition on the trade date. Net unrealized gain or loss on open contracts (the difference between contract trade price and market price) are offset when reflected in the condensed financial statements since the contracts are executed with the same counterparty under a master netting arrangement. The market value of futures (exchange-traded) contracts is based upon the closing quotation on the various futures exchanges on which the contract is traded. The values which will be used by Series E for open forward and option positions will be provided by its administrator, who obtains market quotes from data vendors and third parties. Any change in net unrealized gain or loss during the current period is reported in the condensed statements of operations. Realized gains and losses on transactions are recognized in the period in which the contracts are closed. Brokerage commissions include other trading fees and are charged to expense when incurred.

The weighted average number of Limited Interests outstanding was computed for purposes of disclosing net income (loss) per weighted average Limited Interest. The weighted average number of Limited Interests is equal to the number of Interests outstanding at year end, adjusted proportionately for Interests redeemed based on their respective time outstanding during such year.

Series E has elected not to provide condensed statements of cash flows since substantially all of Series E’s investments are highly liquid and carried at fair value, Series E has little or no debt and a condensed statements of changes in trust capital is provided.

Consistent with standard business practices in the normal course of business, Series E has provided general indemnifications to the Managing Owner, its Trading Advisor and others when they act, in good faith, in the best interests of Series E. Series E is unable to develop an estimate of the maximum potential amount of the future payments that could potentially result from any hypothetical future claim, but expects the risk of having to make any payments under these general business indemnifications to be remote.

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WORLD MONITOR TRUST II – SERIES E

NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

A. Basis of Accounting (Continued)

Series E accounts for financial assets and liabilities using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels: quoted market prices in active markets for identical assets and liabilities (Level 1), inputs other than quoted market prices that are observable for the asset or liability, either directly or indirectly (Level 2), and unobservable inputs for the asset or liability (Level 3).

Series E considers prices for exchange-traded commodity futures and options contracts to be based on quoted prices in active markets for identical assets (Level 1) and reflects the settlement price for each contract as of the close on the last business day of the reporting period. The market values of forward currency (non-exchange traded) contracts was extrapolated on a forward basis from the spot prices quoted as of 4:00 P.M. (EST) on the last business day of the reporting period obtained from it’s third-party data providers i.e. Bloomberg and Interactive Data Corporation (Level 2). There are no Level 3 investments on June 30, 2010 or December 31, 2009.

The following table summarizes the assets and liabilities measured at fair value using the fair value hierarchy:

June 30, 2010	Level 1			Level 2			Level 3		Total
Liabilities:
Net unrealized loss on open futures contracts	$	(4,814	)	$	0		$	0	$	(4,814	)
Net unrealized loss on open forward contracts	$	0		$	(124,944	)	$	0	$	(124,944	)
December 31, 2009	Level 1			Level 2			Level 3		Total
Assets:
Net unrealized gain on open futures contracts	$	18,196		$	0		$	0	$	18,196
Net unrealized gain on open forward contracts	$	0		$	6,948		$	0	$	6,948

B. Recent Accounting Pronouncements

In January 2010, the FASB amended the existing disclosure guidance on fair value measurements, which was effective January 1, 2010, except for disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements, which is effective January 1, 2011. Among other things, the updated guidance requires additional disclosure for the amounts of significant transfers in and out of Level 1 and Level 2 measurements and requires certain Level 3 disclosures on a gross basis. Additionally, the updates amend existing guidance to require a greater level of disaggregated information and more robust disclosures about valuation techniques and inputs to fair value measurements. Since the amended guidance requires only additional disclosures, the adoption of the provisions effective January 1, 2011 will not impact Series E’s financial position or results of operations. The implementation of this guidance, for the provisions effective January 1, 2010, did not have a material impact on Series E’s financial statements.

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WORLD MONITOR TRUST II – SERIES E

NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

C. Cash and Cash Equivalents

Cash represents amounts deposited with a bank and clearing brokers, a portion of which is restricted for purposes of meeting margin requirements, which typically range from 0% to 35% of the notional amounts of the derivatives traded. As of June 30, 2010 and December 31, 2009, restricted cash totaled $68,212 and $6,183,608, respectively. Series E receives interest on all cash balances held by its bank, prime and commodity brokers at prevailing rates.

D. Income Taxes

Series E is treated as a partnership for U.S. federal income tax purposes. As such, Series E is not required to provide for, or pay, any U.S. federal or state income taxes. Income tax attributes that arise from its operations are passed directly to the individual Interest holders including the Managing Owner. Series E may be subject to other state and local taxes in jurisdictions in which it operates.

Series E recognizes tax benefits or expenses of uncertain tax positions in the year such determination is made when the positions are “more likely than not” to be sustained assuming examination by tax authorities. The Managing Owner has reviewed Series E’s tax positions for all open years (after December 31, 2006) and concluded that no provision for unrecognized tax benefits or expense is required in these condensed financial statements. Series E has elected an accounting policy to classify interest and penalties related to unrecognized tax benefits as interest or other expense. The 2006 through 2009 tax years generally remain subject to examination by U.S. federal and most state tax authorities.

E. Profit and Loss Allocations and Distributions

Through February 27, 2009, Series E allocated profits and losses for both financial and tax reporting purposes to its Interest holders weekly on a pro rata basis based on each owner’s Interests outstanding during the week. Subsequent to February 27, 2009, Series E allocated profits and losses for both financial and tax reporting purposes to its Interest holders monthly on a pro rata basis based on each owner’s Interests outstanding during the month. Distributions (other than redemptions of Interests) may be made at the sole discretion of the Managing Owner on a pro rata basis in accordance with the respective capital balances of the Interest holders. The Managing Owner has not and does not presently intend to make any distributions.

F. Interest Income

Interest income is recorded on an accrual basis.

G. Foreign Currency Transactions

Series E’s functional currency is the U.S. dollar; however, it transacts business in currencies other than the U.S. dollar. Assets and liabilities denominated in currencies other then the U.S. dollar are translated into U.S. dollars at the rates in effect at the date of the condensed statements of financial condition. Income and expense items denominated in currencies other than U.S. dollars are translated into U.S. dollars at the rates in effect during the period. Gains and losses resulting from the translation to U.S. dollars are reported in the condensed statements of operations under the caption realized.

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WORLD MONITOR TRUST II – SERIES E

NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

Note 3. FEES

A. Organizational and General and Administrative Costs

Routine legal, audit, postage, and other routine third party administrative costs are paid by Series E. To the extent that general and administrative costs incurred by Series E exceed 1.5% of Series E’s Net Asset Value during the year (with a maximum of 0.5% attributable to other than legal and audit expenses) such amounts will be borne by the Managing Owner and its affiliates.

B. Management and Incentive Fees

Series E paid its Trading Advisor a management fee at an annual rate of 2% of Series E’s Net Asset Value allocated to its management. Through February 27, 2009 the management fee was determined weekly and the sum of such weekly amounts was paid monthly. Subsequent to February 27, 2009, the management fee accrues and is paid monthly. Series E also pays its Trading Advisor a quarterly incentive fee equal to 22% of such Trading Advisor’s “New High Net Trading Profits” (as defined in the advisory agreement). Incentive fees accrued weekly through February 27, 2009 and monthly subsequent to February 27, 2009. No incentive fees were earned during Second Quarter 2010, Second Quarter 2009 and Year-To-Date 2010. Incentive fees of $31 were earned during Year-To-Date 2009.

C. Administrative Services

Series E pays the Managing Owner administrative services fees at an annual rate of 6% of Series E’s Net Asset Value excluding transaction fees which Series E pays to its commodity and prime broker. Through February 27, 2009, the fee was determined weekly and the sum of such weekly amounts was paid monthly. Subsequent to February 27, 2009, the fee is determined and paid monthly. Series E is also obligated to pay all floor brokerage expenses, give-up charges and NFA clearing and exchange fees incurred in connection with Series E’s commodity trading activities.

Note 4. RELATED PARTIES

Series E reimburses the Managing Owner or its affiliates for services they performed for Series E, which include, but are not limited to: brokerage services; accounting and financial management; registrar, transfer and assignment functions; investor communications; printing and other administrative services. However, to the extent that general and administrative expenses exceed 1.5% of Series E’s Net Asset Value during the year (with a maximum of 0.5% attributable to other than legal and audit expenses) such amounts are borne by the Managing Owner and its affiliates. General and administrative expenses of $15,451 during the Second Quarter 2010 and $27,406 during the Second Quarter 2009 exceeded such limitations. Because general and administrative expenses exceeded such limitations for the Second Quarter 2010 and Second Quarter 2009, a portion of the expenses related to services provided by the Managing Owner for the Second Quarter 2010 and 2009 were borne by the Managing Owner and its affiliates.

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WORLD MONITOR TRUST II – SERIES E

NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

Note 4. RELATED PARTIES (CONTINUED)

The expenses incurred by Series E for services performed by the Managing Owner and its affiliates for Series E were:

	Second Quarter						Year-To-Date
	2010			2009			2010			2009
Administrative services	$	194,007		$	256,810		$	391,314		$	557,517
General and administrative		20,817			16,637			36,607			29,973
		214,824			273,447			427,291			587,490
General and administrative expenses borne by the Managing Owner and its affiliates		(15,451	)		(27,406	)		(24,319	)		(32,108	)
TOTAL	$	199,373		$	246,041		$	403,602		$	555,382

Expenses payable to the Managing Owner and its affiliates (which are included in commissions, administrative services and other transaction fees payable and accrued expenses payable on the condensed statements of financial condition) as of June 30, 2010 and December 31, 2009 were $34,645 and $35,174, respectively.

Note 5. DEPOSITS WITH COMMODITY AND PRIME BROKER

Series E deposits funds with a commodity broker subject to CFTC regulations and various exchange and commodity broker requirements. Margin requirements are satisfied by the deposit of cash with such commodity broker.

Series E deposits funds with a prime broker. Margin requirements are satisfied by the deposit of cash with such prime broker.

Note 6. INCOME TAX REPORTING

There have been no differences between the tax basis and book basis of assets, liabilities, and Interest holders’ capital since inception of the Trust.

Note 7. DERIVATIVE INSTRUMENTS AND ASSOCIATED RISKS

The fair value of Series E’s derivatives by instrument type, as well as the location of those instruments on the condensed statements of financial condition as of June 30, 2010 and December 31, 2009 are included in the condensed schedules of investments, all of which are deemed derivatives not designated as hedging instruments.

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16

WORLD MONITOR TRUST II – SERIES E

NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

Note 7. DERIVATIVE INSTRUMENTS AND ASSOCIATED RISKS (CONTINUED)

The trading revenue of Series E’s derivatives by instrument type, as well as the location of those gains and losses on the condensed statements of operations, for the Second Quarter 2010 and 2009 and Year-To-Date 2010 and 2009 is as follows:

	Trading Revenue for the
Type of Instrument	Second Quarter 2010			Second Quarter 2009			Year-To-Date 2010			Year-To-Date 2009
Commodities Contracts	$	(108,641	)	$	(150,703	)	$	(350,906	)	$	(374,439	)
Currencies Contracts		20,118			(29,569	)		19,410			(93,728	)
Energy Contracts		(272,846	)		(55,680	)		(223,207	)		52,340
Interest Rate Contracts		820,035			(448,127	)		939,641			(624,807	)
Stock Indices Contracts		(264,301	)		(315,918	)		(663,032	)		(559,729	)
Forward Currency Contracts		(105,628	)		(4,450	)		(179,597	)		(197,477	)
Total	$	88,737		$	(1,004,447	)	$	(457,691	)	$	(1,797,840	)
Line item in Condensed Statements of Operations
Realized	$	667,190		$	(927,122	)	$	(302,789	)	$	(1,517,326
Change in unrealized		(578,453	)		(77,325	)		(154,902	)		(280,514	)
Total	$	88,737		$	(1,004,447	)	$	(457,691	)	$	(1,797,840	)

As of June 30, 2010 and December 31, 2009, the total number of open futures contracts and forward contracts was approximately 2,037 and 5,779 respectively.

Series E is exposed to various types of risks associated with the derivative instruments and related markets in which it invests. These risks include, but are not limited to, risk of loss from fluctuations in the value of derivative instruments held (market risk) and the inability of counterparties to perform under the terms of Series E’s investment activities (credit risk).

Market Risk

Trading in futures and forward contracts (including foreign exchange) involves entering into contractual commitments to purchase or sell a particular commodity at a specified date and price. The gross or face amount of the contracts, which is typically many times that of Series E’s net assets being traded, significantly exceeds Series E’s future cash requirements since Series E intends to close out its open positions prior to settlement. As a result, Series E is generally subject only to the risk of loss arising from the change in the value of the contracts. As such, Series E considers the “fair value” of its derivative instruments to be the net unrealized gain or loss on the contracts.

The market risk associated with Series E’s commitments to purchase commodities is limited to the gross or face amount of the contracts held. However, when Series E enters into a contractual commitment to sell commodities, it must make delivery of the underlying commodity at the contract price and then repurchase the contract at prevailing market prices or settle in cash. Since the repurchase price to which a commodity can rise is unlimited, entering into commitments to sell commodities exposes Series E to unlimited risk.

Market risk is influenced by a wide variety of factors including government programs and policies, political and economic events, the level and volatility of interest rates, foreign currency exchange rates, the diversification effects among the derivative instruments Series E holds and the liquidity and inherent volatility of the markets in which Series E trades.

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17

WORLD MONITOR TRUST II – SERIES E

NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

Note 7. DERIVATIVE INSTRUMENTS AND ASSOCIATED RISKS (CONTINUED)

Credit Risk

When entering into futures or forward contracts, Series E is exposed to credit risk that the counterparty to the contract will not meet its obligations. The counterparty for futures contracts traded on U.S. and most foreign futures exchanges is the clearinghouse associated with the particular exchange. In general, clearinghouses are backed by their corporate members who are required to share any financial burden resulting from the non-performance by one of their members and, as such, should significantly reduce this credit risk. In cases where the clearinghouse is not backed by the clearing members (i.e. some foreign exchanges), it is normally backed by a consortium of banks or other financial institutions. On the other hand, there is concentration risk on forward transactions entered into by Series E as Series E’s commodity broker is the sole counterparty. Series E has entered into a master netting agreement with its broker and, as a result, when applicable presents unrealized gains and losses on open forward positions as a net amount in the condensed statements of financial condition. The amount at risk associated with counterparty non-performance of all of Series E’s contracts is the net unrealized gain included in the condensed statements of financial condition; however, counterparty non-performance on only certain of Series E’s contracts may result in greater loss than non-performance on all of Series E’s contracts. There can be no assurance that any counterparty, clearing member or clearinghouse will meet its obligations to Series E.

The Managing Owner attempts to minimize both credit and market risks by requiring Series E and its Trading Advisor to abide by various trading limitations and policies. The Managing Owner monitors compliance with these trading limitations and policies which include, but are not limited to, executing and clearing all trades with creditworthy counterparties; limiting the amount of margin or premium required for any one commodity or all commodities combined; and generally limiting transactions to contracts which are traded in sufficient volume to permit the taking and liquidating of positions. Additionally, pursuant to the advisory agreement among Series E, the Managing Owner and the Trading Advisor, Series E shall automatically terminate the Trading Advisor if the Net Asset Value allocated to the Trading Advisor declines by 40% from the value at the beginning of any year or since the commencement of trading activities. Furthermore, the Sixth Amended and Restated Declaration of Trust and Trust Agreement provides that Series E will liquidate its positions, and eventually dissolve, if Series E experiences a decline in the Net Asset Value of 50% from the value at the beginning of any year or since the commencement of trading activities. In each case, the decline in Net Asset Value is after giving effect for distributions, and redemptions. The Managing Owner may impose additional restrictions (through modifications of trading limitations and policies) upon the trading activities of the Trading Advisor as it, in good faith, deems to be in the best interest of Series E.

Series E’s futures commission merchant, in accepting orders for the purchase or sale of domestic futures contracts, is required by CFTC regulations to separately account for and segregate as belonging to Series E all assets of Series E relating to domestic futures trading and is not allowed to commingle such assets with its other assets. At June 30, 2010 and December 31, 2009, such segregated assets totaled $6,960,883 and $6,915,834, respectively. Part 30.7 of the CFTC regulations also requires Series E’s futures commission merchant to secure assets of Series E related to foreign futures trading which totaled $(14,366) and $11,816 at June 30, 2010 and December 31, 2009, respectively. There are no segregation requirements for assets related to forward trading.

As of June 30, 2010, Series E’s open futures and forward contracts mature within two months.

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18

WORLD MONITOR TRUST II – SERIES E

NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

Note 8. FINANCIAL HIGHLIGHTS

The following information presents per Interest operating performance data and other supplemental financial data for the Second Quarter 2010, Second Quarter 2009, Year-To-Date 2010 and Year-To-Date 2009. This information has been derived from information presented in the condensed financial statements.

	Second Quarter						Year-To-Date
	2010 (Unaudited)			2009 (Unaudited)			2010 (Unaudited)			2009 (Unaudited)
Per Interest Performance
(for an Interest outstanding throughout the entire period)
Net asset value per Interest at beginning of period	$	190.72		$	212.34		$	203.92		$	226.47
Net realized gain (loss) and change in net unrealized gain (loss) on commodity transactions(1)		1.33			(12.23	)		(6.26	)		(21.18	)
Interest income(1)		0.03			0.03			0.05			0.07
Expenses(1)		(5.69	)		(5.22	)		(11.32	)		(10.44	)
Net decrease for the period		(4.33	)		(17.42	)		(17.53	)		(31.55	)
Net asset value per Interest at end of period	$	186.39		$	194.92		$	186.39		$	194.92
Total Return(3)
Total return before incentive fees		(2.27	)%		(8.20	)%		(8.60	)%		(13.93	)%
Incentive fees		0.00	%		0.00	%		0.00	%		0.00	%
Total return after incentive fees		(2.27	)%		(8.20	)%		(8.60	)%		(13.93	)%
Supplemental Data
Ratios to average Net Asset Value:
Net investment loss before incentive fees(2), (4)		(11.94	)%		(10.10	)%		(11.84	)%		(9.41	)%
Incentive fees(3)		0.00	%		0.00	%		0.00	%		0.00	%
Net investment loss after incentive fees		(11.94	)%		(10.10	)%		(11.84	)%		(9.41	)%
Interest income(4)		0.06	%		0.06	%		0.05	%		0.07	%
Incentive fees(3)		0.00	%		0.00	%		0.00	%		0.00	%
Other expenses(4)		12.00	%		10.16	%		11.89	%		9.48	%
Total expenses		12.00	%		10.16	%		11.89	%		9.48	%

Total returns are calculated based on the change in value of an Interest during the period. An individual Interest holder’s total returns and ratios may vary from the above total returns and ratios based on the timing of redemptions.

⁽¹⁾ Interest income per Interest and expenses per Interest are calculated by dividing interest income and expenses by the weighted average number of Interests outstanding during the period. Net realized gain (loss) and change in net unrealized gain (loss) on commodity transactions is a balancing amount necessary to reconcile the change in Net Asset Value per Interest with the other per Interest information.

⁽²⁾ Represents interest income less total expenses (exclusive of incentive fees).

⁽³⁾ Not annualized.

⁽⁴⁾ Annualized.

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19

WORLD MONITOR TRUST II – SERIES E

NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

Note 9. SUBSEQUENT EVENTS

Effective July 1, 2010, Series E will contribute all of its assets into KMP Futures Fund I LLC (“KMPFF”), a Delaware limited liability company for which Winton Capital Management Limited (“Winton”), pursuant to its Diversified Program, and the Trading Advisor, pursuant to its K4D-15V Program, which is a systematic, technical broadly diversified program, will serve as the trading advisors.

On July 30, 2010, the Board of Directors of Kenmar Preferred, determined to dissolve Series E effective as of the close of business on September 30, 2010 because Kenmar Preferred has determined that Series E’s aggregate net assets in relation to its operating expenses make it unreasonable to continue the business of Series E.

Investors in the Series E will receive a pro rata distribution of their interest in KMPFF.

Series E intends to file a Form 15 with the SEC de-registering the units of the Series E registered under Section 12(g) of the Securities Exchange Act of 1934.

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20

Item 2. Management’s Discussion and Analysis of

Financial Condition and Results of Operations

This report on Form 10-Q (the “Report”) for the quarter ending June 30, 2010 (“Second Quarter 2010”) includes forward-looking statements that reflect the current expectations of Kenmar Preferred Investments Corp., the managing owner of World Monitor Trust II – Series E (“Registrant”), about the future results, performance, prospects and opportunities of Registrant. The Managing Owner has tried to identify these forward-looking statements by using words such as “may,” “will,” “expect,” “anticipate,” “believe,” “intend,” “should,” “estimate” or the negative of those terms or similar expressions. These forward-looking statements are based on information currently available to the Managing Owner and are subject to a number of risks, uncertainties and other factors, both known, such as those described in this Report, and unknown, that could cause Registrant’s actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements.

You should not place undue reliance on any forward-looking statements. Except as expressly required by the Federal securities laws, the Managing Owner undertakes no obligation to publicly update or revise any forward-looking statements or the risks, uncertainties or other factors described in this Report, as a result of new information, future events or changed circumstances or for any other reason after the date of this Report.

Introduction

General

World Monitor Trust II (the “Trust”) is a business trust organized under the laws of Delaware on April 22, 1999. The Trust consists of three separate and distinct series (“Series”): Series D, Series E and Series F. Series D, E and F commenced trading operations on March 13, 2000, April 6, 2000 and March 1, 2000, respectively, and each Series will continue to exist until terminated pursuant to the provisions of Article XIII of the Sixth Amended and Restated Declaration of Trust and Trust Agreement (the “Trust Agreement”). On December 31, 2009, Series D and F terminated under the provisions of the Trust Agreement. The assets of each Series are segregated from those of the other Series, separately valued and independently managed. Each Series was formed to engage in the speculative trading of a diversified portfolio of futures, forward and options contracts, and may, from time to time, engage in cash and spot transactions. The trustee of the Trust is Wilmington Trust Company. The Managing Owner serves as the managing owner of the Trust and each Series, including Registrant. Registrant’s fiscal year for book and tax purposes ends on December 31.

Registrant is engaged solely in the business of commodity futures, forwards, and option trading; therefore, presentation of industry segment information is not applicable.

Managing Owner and its Affiliates

Effective May 5, 2009, Preferred Investment Solutions Corp. changed its name to Kenmar Preferred Investments Corp. (“Kenmar Preferred” or the “Managing Owner”). Kenmar Preferred or Managing Owner refers to either Preferred Investment Solutions Corp. or Kenmar Preferred Investments Corp., depending on the applicable period discussed.

Kenmar Preferred has been the managing owner of Registrant since October 1, 2004.

Effective December 1, 2008, in accordance with the Fourth Amended and Restated Declaration of Trust and Trust Agreement, the Managing Owner is no longer required to maintain at least a 1% interest in Registrant. As such, the Managing Owner redeemed its entire Interest in each Series in 2009.

The Trading Advisor

Registrant has entered into an advisory agreement (the “Advisory Agreement”) with Graham Capital Management, L.P. (the “Trading Advisor” or “Graham”) to make the trading decisions for Registrant. Graham trades 100% of Registrant’s assets pursuant to Graham’s K4D-15V Program. The Advisory Agreement may be terminated for various reasons, including at the discretion of Registrant. Through February 27, 2009, Registrant, accrued weekly and paid monthly a management fee equal to a weekly rate of approximately 0.038% (2% annually) of the assets allocated to the Trading Advisor. Subsequent to February 27, 2009, Registrant accrues and pays monthly a management fee equal to 1/12^th of 2% (2% annually) of the assets allocated to the Trading Advisor. Registrant also pays the Trading Advisor an incentive fee of 22% of New High Net Trading Profits (as defined in the Advisory Agreement) generated by Registrant. Through February 27, 2009, incentive fees accrued weekly and were paid quarterly in arrears. Subsequent to February 27, 2009, incentive fees are accrued monthly and are ultimately determined as of the last business day of each calendar quarter.

21

Effective July 1, 2010, Registrant will contribute all of its assets into KMP Futures Fund I LLC (“KMPFF”), a Delaware limited liability company that serves as a trading vehicle for which Winton Capital Management Limited (“Winton”), a company registered in England and Wales, and Graham currently serve as the trading advisors. Registrant terminated its Advisory Agreement with Graham effective close of business June 30, 2010.

Competition

The Managing Owner and its affiliates have formed, and may continue to form, various entities to engage in the speculative trading of futures, forwards and option contracts that have certain of the same investment policies as Registrant.

Registrant does not currently, and does not intend in the future to, solicit the sale of additional Interests. As such, Registrant does not compete with other entities to attract new fund participants. However, to the extent that the Trading Advisor recommends similar or identical trades to Registrant and other accounts that it manages, Registrant may compete with those accounts, as well as with other market participants, for the execution of the same or similar trades.

Employees

Registrant has no employees. Management and administrative services for Registrant are performed by the Managing Owner or third parties pursuant to the Trust Agreement, as further discussed in Notes 3 and 4 to Registrant’s financial statements included in its annual report for the year ended December 31, 2009 (“Registrant’s 2009 Annual Report”), which is filed as an exhibit to Registrant’s Form 10-K for the fiscal year ended December 31, 2009.

Critical Accounting Policies

General

Preparation of the financial statements and related disclosures in compliance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires the application of appropriate accounting rules and guidance. Applying these policies requires the Managing Owner to make judgments, estimates and assumptions in connection with the preparation of Registrant’s financial statements. Actual results may differ from the estimates used.

The Managing Owner has evaluated Registrant’s financial statements and related disclosures and has determined that the policies discussed below are critical accounting policies because they involve estimates, judgments and assumptions that are particularly complex, subjective or uncertain. For further discussion of Registrant’s significant accounting policies, see Note 2 to Registrant’s financial statements for the year ended December 31, 2009, which is filed as an exhibit to Registrant’s annual report on Form 10-K for the fiscal year ended December 31, 2009.

The valuation of Registrant’s investments that are not traded on a United States (“U.S.”) or internationally recognized futures exchange is a critical accounting policy. The market values of futures (exchange traded) contracts is verified by Registrant’s administrator, which obtains valuation data from third party data providers such as Bloomberg, Reuters and Super Derivatives and compares those prices with Registrant’s clearing broker. The market value of currency swap and forward (non-exchange traded) contracts is extrapolated on a forward basis from the spot prices quoted as of 4 p.m. on the last business day of the reporting period. All values assigned by the administrator and confirmed by the Managing Owner are final and conclusive as to all of Registrant’s Interestholders.

As such, if actual results vary from estimates used, they are not anticipated to have a material impact on the financial statements and related disclosures.

Registrant records all investments at fair value in its financial statements, with changes in fair value reported as a component of Trading Profits (Losses) in the Statements of Operations. Generally, fair values are based on quoted market prices; however, in certain circumstances, significant judgments and estimates are involved in determining fair value in the absence of an active market closing price. Registrant considers prices for exchange traded commodity futures and options contracts to be based on quoted prices in active markets for identical assets (Level 1). The values of forwards, swaps, and certain option contracts for which market quotations are not readily available are priced by Super Derivatives, Bloomberg, Reuters and or other third party data providers who derive fair values for those assets from observable inputs (Level 2). Level 3 inputs reflect Registrant’s assumptions that it believes market participants would use in pricing the asset or liability. Registrant develops Level 3 inputs based on the best information available in the circumstances, which may include indirect correlation to a market value, combinations of market values or Registrant’s proprietary data. Level 3 inputs generally include information

22

derived through extrapolation or interpolation of observable market data. Registrant does not currently have any investments valued using Level 3 inputs.

Of the Registrant’s unrealized losses at June 30, 2010, $(4,814) or 3.71% of Registrant’s unrealized losses at June 30, 2010 are classified as Level 1 and $(124,944) or 96.29% as Level 2. Of the unrealized gains at December 31, 2009, $18,196 or 72.37% of the Registrant’s unrealized gains at December 31, 2009 are classified as Level 1 and $6,948 or 27.63% as Level 2. There are no Level 3 investments on June 30, 2010 or December 31, 2009.

In January 2010, the FASB amended the existing disclosure guidance on fair value measurements, which was effective January 1, 2010, except for disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements, which is effective January 1, 2011. Among other things, the updated guidance requires additional disclosure for the amounts of significant transfers in and out of Level 1 and Level 2 measurements and requires certain Level 3 disclosures on a gross basis. Additionally, the updates amend existing guidance to require a greater level of disaggregated information and more robust disclosures about valuation techniques and inputs to fair value measurements. Since the amended guidance requires only additional disclosures, the adoption of the provisions effective January 1, 2011 will not impact the Registrants financial position or results of operations. The implementation of this guidance, for the provisions effective January 1, 2010, did not have a material impact on the Registrants financial statements.

Liquidity and Capital Resources

Registrant commenced operations on April 6, 2000. Additional contributions raised through the continuous offering of limited interests (“Limited Interests”) and general interests (“General Interests” and, together with the Limited Interests, “Interests”) of beneficial ownership in Registrant were offered until it substantially achieved its subscription maximum of $50,000,000 Limited Interests in June 2003.

In 2009, the Managing Owner of Registrant determined that, effective March 1, 2009, Interests in Registrant can only be redeemed as of the last business day of each month. Through February 27, 2009, Investors were able to redeem their Interest on a weekly basis on the Friday of each week.

Subscriptions and Redemptions

Second Quarter 2010

Subscriptions of Limited Interests and General Interests for the Second Quarter 2010 were $0 and $0, respectively. Redemptions of Limited Interests and General Interests for the Second Quarter 2010 were $521,487 and $0, respectively.

Second Quarter 2009

Subscriptions of Limited Interests and General Interests for the Second Quarter 2009 were $0 and $0, respectively. Redemptions of Limited Interests and General Interests for the Second Quarter 2009 were $2,670,683 and $0, respectively.

Liquidity

At June 30, 2010, 100% of Registrant’s investable net assets were allocated to commodities trading. A significant portion of Registrant’s net assets are held in cash, which is used as margin for trading in commodities. In as much as the sole business of Registrant is to trade in commodities, Registrant continues to own such liquid assets to be used as margin. The clearing broker and bank credit Registrant with interest income on 100% of its average daily equity maintained in its accounts with the clearing broker and bank during each month at competitive interest rates.

The commodities contracts may be subject to periods of illiquidity because of market conditions, regulatory considerations and other reasons. For example, commodity exchanges limit fluctuations in certain commodity futures contract 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 neither be taken nor liquidated unless traders are willing to effect trades at or within the limit. Commodity futures prices have occasionally moved the daily limit for several consecutive days with little or no trading. Such market conditions could prevent Registrant from promptly liquidating its commodity futures positions.

Since Registrant’s business is to trade futures, forward and option contracts, its capital is at risk due to changes in the value of these contracts (market risk) or the inability of counterparties to perform under the terms of the contracts (credit risk).

23

Registrant’s exposure to market risk is influenced by a number of factors including the volatility of interest rates and foreign currency exchange rates, the liquidity of the markets in which the contracts are traded and the relationships among the contracts held. The inherent uncertainty of Registrant’s speculative trading as well as the development of drastic market occurrences could result in losses considerably beyond Registrant’s experience to date and could ultimately lead to a loss of all or substantially all of investors’ capital. The Managing Owner attempts to minimize these risks by requiring Registrant and the Trading Advisor to abide by various trading limitations and policies, which include limiting margin amounts, trading only in liquid markets and permitting the use of stop loss provisions. For a further discussion of the credit and market risks associated with Registrant’s futures, forward and option contracts, see Note 7 to Registrant’s financial statements for the year ended December 31, 2009, which is filed as an exhibit to Registrant’s annual report on Form 10-K for the fiscal year ended December 31, 2009.

Registrant does not have, nor does it expect to have, any capital assets.

Market Overview

Following is a market overview for Second Quarter 2010 and Second Quarter 2009:

Second Quarter 2010

The Second Quarter of 2010 jolted the global financial markets. The economy took a backseat as the escalating sovereign debt problems in some Eurozone countries, questions about the European banking system and renewed misgivings about the ultimate fate of the euro dominated the financial markets. Economic data was simply not strong enough to overcome the negative influence of European developments. The tone of economic data deteriorated during the quarter. Consumer spending failed to follow up on that of the robust first quarter. After starting the quarter on a bright note, private payroll employment slipped back to a disappointing pace. Other labor market indicators also appeared to be stalling.

Commodities had a mixed quarter, which was surprising given the broad based risk aversion. While industrial commodities were hurt by the fears surrounding global growth prospects, agricultural commodities rallied thanks to strong emerging market demand and the unusually hot, dry weather.

Interest Rates: With all the stars lining up, global financial turmoil, disappointing U.S. growth and the renewed threat of deflation, U.S. Treasury bonds had their best quarter since the fourth quarter of 2008. Yields dropped below the 3% level for the first time since April 2009. The Federal Reserve kept policy unchanged throughout the quarter and there were no indications of imminent change in interest rate policy. The major Federal Reserve actions during the quarter were the reestablishment of the temporary dollar liquidity swaps with various central banks in order to contain the fallout from the Eurozone crisis. The European Central Bank, the Bank of England and the Bank of Japan kept key rates unchanged throughout the quarter as well. The Reserve Bank of Australia continued its rate hike cycle that began late in 2009 as the economy and labor markets strengthened on the back of strong demand for commodities from its Asian trading partners.

Currencies: The U.S. dollar rally that began in December 2009 reached a crescendo in the second quarter. In addition to the euro’s weakness, the dollar was buoyed by global risk aversion and flight to quality in the second quarter. The U.S. Dollar Index gained approximately 6.2%, and climbed above 86 for the first time since April 2009. The dollar appreciated smartly against the euro as the storm clouds quickly spread from Greece to engulf Portugal, Spain and Ireland and threatened the very future of the European Monetary Union. The euro finished the second quarter down approximately 9.1% against the dollar. The British pound fared better, declining 1.6% in the second quarter against the greenback. The Japanese yen not surprisingly rallied with the rising global risk aversion, gaining 5.8% against the dollar. The two currencies heavily influenced by commodities, the Australian and Canadian dollars, fell sharply despite solid economic data. The Australian and Canadian dollars dropped 7.5% and 4.4%, respectively, against the U.S. dollar.

Indices: The strongest equity rally since the 1930s hit a brick wall in the second quarter as stock prices suffered their first quarterly decline since the first quarter of 2009. Unlike in the first quarter, robust earnings were not enough to overcome the Eurozone jitters and growing fears of sovereign debt crisis around the developed world. The losses were broad-based across most sectors. The Dow Jones Industrial Average, S&P 500 and NASDAQ fell approximately 9.9%, 11.9% and 12.0%, respectively, for the quarter. European stocks, weighed down by problems in Greece, lagged U.S. equities, although the German markets were an exception. The STOXX 600, a broad measure of European equities, declined approximately 16.4%, in dollar terms, although in euro terms it showed a smaller loss of 7.7%. The CAC, FTSE 100 and DAX closed the quarter with losses of approximately 13.4%, 13.4% and 3.1%, respectively. Asian markets were more mixed as the Nikkei fell 15.4% and the Hang Seng declined 5.2%, the Korean Kospi edged up 0.3%. The Australian All Ordinaries Index posted an 11.6% decline.

24

Energies: Crude oil fell 10.9% on the back of macro risk aversion and softening freight data. Natural gas soared 13.0%, reflecting the fact that at current prices it is an attractive substitute for other energy products. Heating oil ended the quarter with an approximate 10.6% loss. Reformulated gasoline followed crude and heating oil and declined 11.3% in the quarter.

Metals: Gold registered a solid 10.7% gain during the quarter. Although the dollar remains the preferred safe haven, the euro’s troubles appear to have supported gold. The international community’s desire to diversify their reserves may be helping gold given the euro and the sterling’s weakness. Silver lagged gold, rising 4.4%, but the performance was surprising given that base metals, which often have a strong correlation to silver, fell steeply. Copper, aluminum and nickel ended the quarter with declines of 17.9%, 15.9%, and 21.2%, respectively.

Agriculturals /Softs and Grains: Agricultural commodities generally gained during the quarter. Coffee led the way with a 19.5% surge on the back of weak harvests in Vietnam and Central America. Sugar rebounded back from a steep plunge in the previous quarter, rising 8.0%. Grains managed modest gains as the macro environment weighed against generally supportive fundamentals.

Second Quarter 2009

The Second Quarter of 2009 displayed snippets of evidence that the U.S. economy had bottomed but the problem remained that two key areas, housing and employment, showed only modest indications of a turnaround. U.S. economic metrics were far from optimistic during the quarter as the unemployment rate rose to 9.5%, and many market participants believe it is possible that it will climb above the double-digit mark during the second-half of 2009. Since December 2007, the U.S. lost approximately 6.5 million jobs, of which 1.3 million were lost in the past quarter. As for the stimulus packages, they are making their way into the economy, but at a snail’s pace. The third quarter could see a larger macro impact.

Interest Rates: U.S. Treasury yields steepened through most of the quarter. In May, a downward less-than-expected revision of the first quarter GDP encouraged risk taking and the yield curve hinted the economy was in a recovery cycle. The June Federal Open Market Committee meeting indicated that the Fed would maintain an accommodative policy through year end and they expressed little concern on inflation. While the yield curve still indicates the economy is in recovery mode, it does not foreshadow a quick “V” shaped recovery but rather an extended “U” pattern. The Federal Reserve kept rates at 0 to 25 basis points through the quarter. The Bank of England and the Bank of Japan (“BOJ”) kept key rates unchanged through the quarter as well. Japan continued in a recession during the quarter but, as in the U.S. and Eurozone, the worst appears to be over. After being criticized for lowering rates only 25 basis points in April, the European Central Bank (“ECB”) cut rates by another 25 basis points to 1.00% in May. Jean Claude Trichet, ECB president, made it apparent they were likely finished cutting rates for the near future.

Currencies: The U.S. Dollar Index ended the quarter with a loss of approximately 5%. The U.S. currency survived calls from Russia and the other BRIC nations for a so-called “supranational” currency. An increased appetite for risk weighed on the dollar for much of the quarter, although that appeared to lessen toward the end of June. After being annihilated in the first quarter, the pound managed a solid recovery on indications that UK housing may have bottomed. The euro finished the second quarter up approximately 6% on the dollar. The Japanese yen ended the quarter up overall and the BOJ continued to engage in heavy stimulus activity.

Indices: It was a positive overall quarter for global equities, however, U.S. equities lost some ground in June in what appeared to be a correction due to concerns surrounding consumers, housing and employment. Energy and financial stocks led the U.S. rally as the Dow Jones Industrial Average, S&P 500 and NASDAQ all gained approximately 11%, 15% and 20%, respectively, for the quarter. A similar pattern unfolded in Europe with modest losses in June within solid quarterly performance. The STOXX 600, a broad measure of European equities, rose approximately 16% during the quarter. The CAC and the DAX closed the quarter with gains as well. In Asia, the Nikkei jumped over 22% as concerns surrounding North Korea’s nuclear program served as only brief interruptions. The particularly volatile Hang Seng rose approximately 23%, while the Australian All Ordinaries Index and Korea’s Kospi rallied as well. Russian stocks recovered as the quarter progressed in a rally that began at the end March. Improved oil prices were a primary motivator of the turnaround.

Energies: Crude followed movements of the equity markets, offsetting ongoing demand destruction, which seems to have been discounted by the market. In addition, the weakening U.S. dollar, “economic optimism” based on Asian and U.S. data, continued disruption of output by rebel groups in Nigeria and Chinese stockpiling fueled crude’s rally as it surged approximately 44% within the Dow Jones-UBS Commodity Index (“DJUBS”) during the quarter. For natural gas, temperatures ran cool in key consuming regions, keeping demand in check. Heating oil ended the quarter with an approximate 28% gain within the DJUBS. Reformulated gasoline had a strong quarter as gasoline at the pump continued to rise but demand

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still ran down 2.5% from last year. With supplies more than 22% ahead of last year and storage facilities full, natural gas finished the quarter up only 4% within the DJUBS.

Metals: Reduced global financial market fears diminished flight-to-safety demand for gold during the second quarter as gold finished relatively flat for the quarter. Silver closed out the period with an approximate 5% gain as jewelry demand was quiet, although there was a slight increase in India’s purchases. China was a periodic buyer. Base metals witnessed overall gains across the board in the quarter, mainly attributable to China’s strategic commodity re-stocking, the weaker U.S. dollar, investment demand and economic optimism. Profits of over 52%, 22%, 18% and 17% for nickel, copper, zinc and aluminum, respectively, within the DJUBS, were showcased through the quarter.

Agriculturals /Softs and Grains: Fear that the H1N1 Influenza (Swine Flu) would somehow be spread overseas from pork products originating in the U.S. led to bans on U.S. pork products, resulting in an approximate 2% loss within the DJUBS during the quarter. For the first half of the quarter, cotton prices reacted bullishly to the uncertain weather conditions and the quarter ended up approximately 15% within the DJUBS. Planting time fears saw grain prices rally in April and May, hitting a nine month high due to the overly wet conditions, which kept farmers from getting their steel in the field. However, once conditions dried out and forecasts for more spring-like weather were predicted, all the upside gains were given back during the month of June as the USDA Planting Acreage Report rattled the agricultural markets. The downside effect on soybeans was not quite as pronounced, however, as this crop can be planted later in the season with much less attributable yield loss. Sugar ended the quarter with profits of over 32% within the DJUBS as prices were driven higher by steady demand patterns out of India, the world’s biggest consumer; changing global weather patterns which threatened production in Brazil, the world’s largest producer; investment interest and a weak U.S. dollar. Coffee finished the quarter up approximately 2% within the DJUBS, attributable to a weak dollar, solid technicals and the relief from a treat of adverse weather.

Sector Performance

Due to the nature of Registrant’s trading activities, a period-to-period comparison of its trading results is not meaningful. However, set forth below are the following:

(a) the major sectors to which Registrant’s assets were allocated as of June 30, 2010 and June 30, 2009, measured as a percentage of the “gross speculator margin” (i.e., the minimum amount of cash or marginable securities a speculator must post when buying or selling futures assets); and

(b) a discussion of Registrant’s trading results for the major sectors in which Registrant traded for the quarter ended June 30, 2010 and the quarter ended June 30, 2009.

Second Quarter 2010

As of June 30, 2010, the allocation of Registrant’s assets to major sectors was as follows:

Sector	Allocation
Currencies	100.00	%
TOTAL	100.00	%

Trading results for the major sectors in which Registrant traded for the Second Quarter 2010 were as follows:

Currencies: (-) Registrant experienced the majority of its gains in the Dollar Index, euro and Swiss franc. Losses were experienced in the Australian and Canadian dollars, Japanese yen, Mexican peso and South African rand.

Energies: (-) Registrant experienced losses in natural gas, reformulated gasoline, brent crude, crude oil and heating oil.

Grains: (-) Registrant experienced gains in soybean meal and cotton. Losses were experienced in bean oil, soybeans, corn and wheat

Indices: (-) Registrant experienced the majority of its gains in the S&P 500 and Nasdaq. Losses were experienced in the DAX, CAC, DJ STOXX, FTSE, Nikkei and the IBEX Plus.

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Interest Rates: (+) Registrant experienced the majority of its gains in the Euribor, German Bond and Bobl, US Treasuries, Japanese Government Bonds and Short Sterling. Losses were experienced in Australian and Canadian Bonds.

Meats: (+) Registrant experienced gains in live cattle.

Metals: (-) Registrant experienced gains in gold and silver. Losses were incurred in copper, zinc, lead and aluminum.

Softs: (-) Registrant experienced losses in coffee, cocoa and sugar.

Second Quarter 2009

As of June 30, 2009, the allocation of Registrant’s assets to major sectors was as follows:

Sector	Allocation
Currencies	35.02	%
Energies	10.34	%
Grains	1.09	%
Indices	37.07	%
Interest Rates	12.61	%
Metals	2.84	%
Tropicals	1.03	%
TOTAL	100.00	%

Trading results for the major sectors in which Registrant traded for the Second Quarter 2009 were as follows:

Currencies: (-) Registrant experienced the majority of its gains in the Australian dollar, South African rand and Hungarian forint. The majority of the losses were realized in the Canadian dollar, euro, Japanese yen and Mexican peso.

Energies: (-) Registrant experienced gains in reformulated gasoline, Brent crude and crude. Losses were experienced in gas oil, heating oil and natural gas.

Grains: (+) Registrant experienced gains in soybeans. Losses were experienced in corn, cotton and wheat.

Indices: (-) Registrant experienced a majority of its gains in the Hang Seng, Nasdaq and Nikkei. Losses were experienced in the DJ Stoxx 50, DAX, CAC and S&P 500.

Interest Rates: (-) Registrant experienced a majority of its gains in U.S. Treasury Notes. Losses were made in the Euribor, Eurodollar, 2-year German Bond, Bund, 3-month short sterling and Japanese Government Bonds.

Meats: (-) Registrant experienced losses in live cattle.

Metals: (-) Registrant experienced gains in copper. Losses were made in gold, zinc, aluminum and silver.

Softs: (-) Registrant experienced gains in sugar. Losses were experienced in coffee and cocoa.

Results of Operations

Second Quarter 2010

The Net Asset Value per Interest as of June 30, 2010 was $186.39, a decrease of $4.33 from the March 31, 2010 Net Asset Value per Interest of $190.72. Registrant’s average net asset level during the Second Quarter 2010 was approximately $12,735,000. Registrant’s average net assets decreased during the Second Quarter 2010 in comparison to the Second Quarter 2009 by approximately $4,125,000 primarily due to the effect of redemptions and negative trading performance.

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Registrant’s performance for the Second Quarter 2010 was (2.27)%. Performance includes the percentage change in Registrant’s Net Asset Value excluding the effect of any redemptions and includes the percentage impact of trading gains/(losses) less any commissions and related fees and expenses. Past performance is not necessarily indicative of future results.

Registrant’s trading gains before commissions and related fees for the Second Quarter 2010 were approximately $89,000.

Commissions, administrative services and other transaction fees for the Second Quarter 2010 were approximately $280,000, a decrease of approximately $23,000 as compared to the Second Quarter 2009, primarily due to reduced average net asset levels discussed above.

Management Fees for the Second Quarter 2010 were approximately $64,000, a decrease of approximately $21,000 as compared to the Second Quarter 2009, primarily due to reduced average net asset levels discussed above.

During the Second Quarter 2010 no incentive fees were earned, as the fund’s incentive fee calculation did not exceed the previous high water mark on which the Trading Advisor was paid an incentive fee.

General and administrative expenses for the Second Quarter 2010 were approximately $53,000. To the extent that general and administrative expenses exceed 1.5% of Registrant’s Net Asset Value during the year (with a maximum of 0.5% attributable to other than legal and audit expenses) such amounts are borne by the Managing Owner and its affiliates. General and administrative expenses of approximately $15,000 exceeded such limitations during the Second Quarter 2010. Because general and administrative expenses exceeded such limitations during the Second Quarter 2010, a portion of the expenses related to services provided by the Managing Owner for Registrant during Second Quarter 2010 were borne by the Managing Owner and its affiliates.

Second Quarter 2009

The Net Asset Value per Interest as of June 30, 2009 was $194.92, a decrease of $17.42 from the March 31, 2009 Net Asset Value per Interest of $212.34. Registrant’s average net asset level during the Second Quarter 2009 was approximately $16,860,000. Registrant’s average net assets decreased during the Second Quarter 2009 in comparison to the Second Quarter 2008 by approximately $2,916,000 primarily due to the effect of redemptions and negative trading performance.

Registrant’s performance for the Second Quarter 2009 was (8.20)%. Performance includes the percentage change in Registrant’s Net Asset Value excluding the effect of any redemptions and includes the percentage impact of trading gains/(losses) less any commissions and related fees and expenses. Past performance is not necessarily indicative of future results.

Registrant’s trading losses before commissions and related fees for the Second Quarter 2009 were approximately $(1,004,000).

Commissions, administrative services and other transaction fees for the Second Quarter 2009 were approximately $303,000, a decrease of approximately $30,000 as compared to the Second Quarter 2008, primarily due to reduced average net asset levels discussed above.

Management Fees for the Second Quarter 2009 were approximately $85,000, a decrease of approximately $14,000, as compared to the Second Quarter 2008, primarily due to reduced average net asset levels discussed above.

During the Second Quarter 2009 no incentive fees were earned, as the fund’s incentive fee calculation did not exceed the previous high water mark on which the Trading Advisor was paid an incentive fee.

General and administrative expenses for the Second Quarter 2009 were approximately $68,000. To the extent that general and administrative expenses exceed 1.5% of Registrant’s Net Asset Value during the year (with a maximum of 0.5% attributable to other than legal and audit expenses) such amounts are borne by the Managing Owner and its affiliates. General and administrative expenses of approximately $27,000 exceeded such limitations during the Second Quarter 2009. Because general and administrative expenses exceeded such limitations during the Second Quarter 2009, a portion of the expenses related to services provided by the Managing Owner for Registrant during Second Quarter 2009 were borne by the Managing Owner and its affiliates.

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Inflation

Inflation has had no material impact on the operations or on the financial condition of Registrant from inception through June 30, 2010.

Off-Balance Sheet Arrangements and Contractual Obligations

The Registrant does not have any off-balance-sheet arrangements (as defined in Regulation S-K 303(a)(4)(ii)) that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Registrant’s contractual obligations are with the Managing Owner, the Advisor and its commodity broker. Management fees payable by Registrant to the Trading Advisor and administrative services and other transaction fees payable to the Managing Owner are calculated as a fixed percentage of Registrant’s Net Asset Value. Incentive fees payable by the Registrant to the Trading Advisor are at a fixed rate, calculated as a percentage of Registrant’s “New High Net Trading Profits” (as defined in the Advisory Agreement). As such, the Managing Owner cannot anticipate the amounts to be paid for future periods as Net Asset Values and “New High Net Trading Profits” are not known until a future date. Commissions payable to Registrant’s commodity broker are based on a cost per executed trade and, as such, the Managing Owner cannot anticipate the amount that will be required under the brokerage agreement, as the level of executed trades are not known until a future date. These agreements are effective for one-year terms, renewable automatically for additional one-year terms unless terminated. Additionally, these agreements may be terminated by either party thereto for various reasons. Additionally, since the Registrant does not enter into other long-term debt obligations, capital lease obligations, operating lease obligations or other long-term liabilities that would otherwise be reflected on the Registrant’s Statement of Financial Condition, a table of contractual obligations has not been presented. For a further discussion of Registrant’s contractual obligations, see Notes 1, 3 and 4 to Registrant’s financial statements for the year ended December 31, 2009, which is filed as an exhibit to Registrant’s annual report on Form 10-K for the fiscal year ended December 31, 2009.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Information regarding quantitative and qualitative disclosures about market risk is not required pursuant to Item 305(e) of Regulation S-K.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Registrant’s “disclosure controls and procedures” (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are designed to ensure that information required to be disclosed by Registrant in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”), and that such information is accumulated and communicated to Registrant’s management, including the Managing Owner’s Co-Chief Executive Officers and Director of Fund Administration (who, in these capacities, function as the Principal Executive Officers and Principal Financial Officer, respectively, of Registrant), as appropriate to allow for timely decisions regarding required disclosure.

In designing and evaluating Registrant’s disclosure controls and procedures, the Managing Owner recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Because of the inherent limitations in all control systems, no evaluation of the controls can prove absolute assurance that all control issues and instances of fraud, if any, within Registrant have been detected.

The Managing Owner’s management, under the supervision and with the participation of certain officers of the Managing Owner (including the Managing Owner’s Co-Chief Executive Officers and Director of Fund Administration), has evaluated the effectiveness of Registrant’s disclosure controls and procedures as of June 30, 2010. Based upon such evaluation, the Managing Owner’s Co-Chief Executive Officers and Director of Fund Administration have concluded that, as of June 30, 2010, Registrant’s disclosure controls and procedures were effective.

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Changes in Internal Control Over Financial Reporting

There have been no changes in Registrant’s internal control over financial reporting (as defined in Rules 13a – 15(f) and 15d – 15(f) under the Exchange Act) during the Second Quarter of 2010 that have materially affected, or are reasonably likely to materially affect, Registrant’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

There are no material legal proceedings pending, on appeal, or concluded to which Registrant is a party or to which any of its assets are subject.

Item 1.A. Risk Factors

There have been no changes from risk factors as previously disclosed in Registrant’s Form 10-K for the fiscal year ended December 31, 2009.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults Upon Senior Securities

None

Item 5. Other Information

On July 30, 2010, pursuant to Section 13.1(h) of Registrant’s Trust Agreement, the Board of Directors of Kenmar Preferred, in its capacity as managing owner of Registrant, determined to dissolve Registrant effective as of the close of business on September 30, 2010 because Kenmar Preferred has determined that Registrant’s aggregate net assets in relation to its operating expenses make it unreasonable to continue the business of Registrant.

Investors in the Registrant will receive a pro rata distribution of their interest in KMPFF.

Registrant intends to file a Form 15 with the Securities and Exchange Commission de-registering the units of the Registrant registered under Section 12(g) of the Securities Exchange Act of 1934.

Item 6. Exhibits:

2.1	Plan and Agreement of Merger of Preferred Investment Solutions Corp. (a Connecticut corporation) and Preferred Investment Solutions Corp. (a Delaware corporation) (incorporated by reference to Exhibit 2.1 to Form 8-K, File No. 000-32687, filed on January 3, 2006)
3.1	First Amended and Restated Declaration of Trust and Trust Agreement of World Monitor Trust II dated as of May 15, 1999 (incorporated by reference to Exhibit 3.1 and 4.1 to Registrant’s Registration Statement on Form S-1, File No. 333-83015, filed on September 17, 1999)
3.2	Second Amended and Restated Declaration of Trust and Trust Agreement of World Monitor Trust II dated as of March 28, 2002 (incorporated by reference to Exhibit 3.1 and 4.1 to Post-Effective Amendment No. 4 to Registrant’s Registration Statement on Form S-1, File No. 333-83015, filed on April 2, 2002)
3.3	Third Amended and Restated Declaration of Trust and Trust Agreement of World Monitor Trust II dated as of October 1, 2004 (incorporated by reference to Exhibit 4.1 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2004)
3.4	Certificate of Incorporation of Preferred Investment Solutions Corp. (a Delaware corporation) (incorporated by reference to Exhibit 3.1 to Form 8-K, File No. 000-32687, filed on January 3, 2006)

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3.5	By-Laws of Preferred Investment Solutions Corp. (a Delaware corporation) (incorporated by reference to Exhibit 3.2 to Form 8-K, File No. 000-32687, filed on January 3, 2006)
3.6	Fourth Amended and Restated Declaration of Trust and Trust Agreement of World Monitor Trust II dated as of December 1, 2008 (incorporated by reference to Exhibit 3.1 to Form 8-K, File No. 000-32687, filed on December 3, 2008)
3.7	Fifth Amended and Restated Declaration of Trust and Trust Agreement of World Monitor Trust II dated as of January 21, 2009 (incorporated by reference to Exhibit 3.4 to Form 8-K, File No. 000-32687, filed on January 21, 2009)
3.8	Sixth Amended and Restated Declaration of Trust and Trust Agreement of World Monitor Trust II dated as of March 1, 2009 (incorporated by reference to Exhibit 4.1 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2009)
4.1	Form of Request for Redemption (incorporated by reference to Exhibit 4.2 to Post Effective Amendment No. 4 to Registrant’s Registration Statement on Form S-1, File No. 333-83011, filed on September 17, 1999)
4.2	Form of Exchange Request (incorporated by reference to Exhibit 4.3 to Post Effective Amendment No. 4 to Registrant’s Registration Statement on Form S-1, File No. 333-83011, filed on September 17, 1999)
4.3	Form of Subscription Agreement (incorporated by reference to Exhibit 4.4 to Post-Effective Amendment No. 4 to Registrant’s Registration Statement on Form S-1, File No. 333-83011, filed on September 17, 1999)
4.4	Form of Request for Redemption (incorporated by reference to Exhibit 4.2 to Post-Effective Amendment No. 4 to the Registrant’s Registration Statement on Form S-1, File No. 333-83015, filed on April 2, 2002)
4.5	Form of Exchange Request (incorporated by reference to Exhibit 4.3 to Post-Effective Amendment No. 4 to the Registrant’s Registration Statement on Form S-1, File No. 333-83015, filed on April 2, 2002)
4.6	Form of Subscription Agreement (incorporated by reference to Exhibit 4.4 to Post-Effective Amendment No. 4 to the Registrant’s Registration Statement on Form S-1, File No. 333-83015, filed on April 2, 2002)
4.7	The Privacy Notice of the Managing Owner dated July 2009 (incorporated by reference to Exhibit 4.5 to Registrant’s Form 10-K for the year ended December 31, 2009)
10.1	Form of Escrow Agreement among the Trust, Managing Owner, PSI and the Chase Manhattan Bank (incorporated by reference to Exhibit 10.1 to Registrant’s Registration Statement on Form S-1, File No. 333-83011, filed on September 17, 1999)
10.2	Form of Brokerage Agreement among the Trust and PSI (incorporated by reference to Exhibit 10.2 to Registrant’s Statement on Form S-1, File No. 333-83011, filed on September 17, 1999)
10.3	Form of Advisory Agreement among Registrant, Managing Owner, and the Trading Advisor (incorporated by reference to Exhibit 10.3 to Registrant’s Registration Statement on Form S-1, File No. 333-83011, filed on July 16, 1999)
10.4	Form of Representation Agreement Concerning the Registration Statement and the Prospectus among Registrant, Managing Owner, PSI, Wilmington Trust Company and the Trading Advisor (incorporated by reference to Exhibit 10.4 to Registrant’s Registration Statement on Form S-1, File No. 333-83011, filed on September 17, 1999)
10.5	Form of Net Worth Agreement between the Managing Owner and Prudential Securities Group, Inc. (incorporated by reference to Exhibit 10.5 to Registrant’s Registration Statement on Form S-1, File No. 333-83011, filed on September 17, 1999)
10.6	Service Agreement among Registrant, Prudential Securities Futures Management Inc. and Wachovia Securities, LLC dated as of July 1, 2003 (incorporated by reference to Exhibit 10.6 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2003)

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10.7	Consent to Assignment of Brokerage Agreement dated March 30, 2004 among World Monitor Trust II, Prudential Equity Group, LLC and Prudential Financial Derivatives, LLC (incorporated by reference to Exhibit 10.7 to Form 10-K for the year ended December 31, 2004)
10.8	Novation letter among the Trust, Trading Advisor and Managing Owner dated September 14, 2004 (incorporated by reference to Exhibit 10.7 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2004)
10.9	Letter Agreement Amending and Restating Brokerage Agreements between the Managing Owner and Prudential Financial Derivatives, LLC dated October 1, 2004 (incorporated by reference to Exhibit 10.7 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2004)
10.10	Services Agreement between Spectrum Global Fund Administration, L.L.C. and Registrant dated May 23, 2007 (incorporated by reference to Exhibit 10.9 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2007)
10.11	Amendment No. 2 to the Services Agreement between Spectrum Global Fund Administration, L.L.C. and Registrant dated (incorporated by reference to Exhibit 10.1 to Form 8-K, File No. 000-32687, filed on March 2, 2009)
13.1	Registrant’s 2009 Annual Report (with the exception of the information and data incorporated by reference in Items 5, 7 and 8 of this Annual Report on Form 10-K, no other information or data appearing in Registrant’s 2008 Annual Report is to be deemed filed as part of this report) (incorporated by reference to Exhibit 13.1 to Registrant’s Form 10-K for the year ended December 31, 2009)
14.1	Kenmar Preferred Investments Corp. Code of Ethics (adopted pursuant to Section 406 of Sarbanes Oxley Act of 2002) as of November 9, 2009 (incorporated by reference to Exhibit 14.1 to Registrant’s Form 10-K for the year ended December 31, 2009)
31.1	Certification pursuant to Exchange Act Rules 13a-14 and 15d-14 (filed herewith)
31.2	Certification pursuant to Exchange Act Rules 13a-14 and 15d-14 (filed herewith)
32.1	Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley
32.2	Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)

[Remainder of page intentionally left blank]

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

WORLD MONITOR TRUST II – SERIES E
By:	Kenmar Preferred Investments Corp.,
	its Managing Owner
	By:	/s/ Kenneth A. Shewer		Date: August 10, 2010
		Name:	Kenneth A. Shewer
		Title:	Co-Chief Executive Officer
			(Principal Executive Officer)
	By:	/s/ David K. Spohr		Date: August 10, 2010
		Name:	David K. Spohr
		Title:	Senior Vice President and Director of Fund Administration
			(Principal Financial/Accounting Officer)

33

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Kenneth A. Shewer, certify that:

1. I have reviewed this Report on Form 10-Q of World Monitor Trust II – Series E (“Registrant”);

2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of Registrant as of, and for, the periods presented in this Report;

4. Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as such term is defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting) as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Registrant and we have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of Registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and

d) Disclosed in this Report any change in Registrant’s internal control over financial reporting that occurred during Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, Registrant’s internal control over financial reporting; and

5. Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Registrant’s auditors and the audit committee of Registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in Registrant’s internal control over financial reporting.

Date: August 10, 2010	By:	/s/ Kenneth A. Shewer
		Kenneth A. Shewer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, David K. Spohr, certify that:

1. I have reviewed this Report on Form 10-Q of World Monitor Trust II – Series E (“Registrant”);

2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of Registrant as of, and for, the periods presented in this Report;

4. Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as such term is defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting) as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Registrant and we have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of Registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and

d) Disclosed in this Report any change in Registrant’s internal control over financial reporting that occurred during Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, Registrant’s internal control over financial reporting; and

5. Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Registrant’s auditors and the audit committee of Registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in Registrant’s internal control over financial reporting.

Date: August 10, 2010	By:	/s/ David K. Spohr
		David K. Spohr
		(Principal Financial/Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, Kenneth A. Shewer, hereby certifies pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Quarterly Report on Form 10-Q of World Monitor Trust II – Series E for the period ended June 30, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Quarterly Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of Registrant.

/s/ Kenneth A. Shewer
Name:	Kenneth A. Shewer
Title:	Co-Chief Executive Officer
	(Principal Executive Officer)
	Kenmar Preferred Investments Corp.,
	Managing Owner of
	World Monitor Trust II – Series E
Date:	August 10, 2010

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, David K. Spohr, hereby certifies pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Quarterly Report on Form 10-Q of World Monitor Trust II – Series E for the period ended June 30, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Quarterly Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of Registrant.

/s/ David K. Spohr
Name:	David K. Spohr
Title:	Senior Vice President and Director of Fund Administration
	(Principal Financial/Accounting Officer)
	Kenmar Preferred Investments Corp.,
	Managing Owner of
	World Monitor Trust II – Series E
Date:	August 10, 2010