-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TIEOsCVkIKDtGe8TnhD8tn4UwdJ+AdStBQHUyLpmDaXkeMyO0hIvlCQ+HaFJFFUY M4sb2jiSc9yVfC3FHvt7/g== 0000950131-96-003176.txt : 19960705 0000950131-96-003176.hdr.sgml : 19960705 ACCESSION NUMBER: 0000950131-96-003176 CONFORMED SUBMISSION TYPE: 424B3 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19960703 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ML PRINCIPAL PROTECTION PLUS LP CENTRAL INDEX KEY: 0000917259 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES [6200] IRS NUMBER: 133750642 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-07593 FILM NUMBER: 96591255 BUSINESS ADDRESS: STREET 1: 6TH FL, SOUTH TOWER, M L WORLD HDQR STREET 2: C/O ML FUTURES INVESTMENT PARTNERS INC CITY: NEW YORK STATE: NY ZIP: 10080-6106 BUSINESS PHONE: 2122364161 MAIL ADDRESS: STREET 1: C/O MERRILL LYNCH INVESTMENT PARTNERS IN STREET 2: WORLD FINANCIAL CENTER S TOWER 6TH FL CITY: NEW YORK STATE: NY ZIP: 10080-6106 FORMER COMPANY: FORMER CONFORMED NAME: SECTOR STRATEGY FUND VII LP DATE OF NAME CHANGE: 19940107 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ML PRINCIPAL PROTECTION PLUS TRADING LP CENTRAL INDEX KEY: 0000925433 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 133775509 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-07593-01 FILM NUMBER: 96591256 BUSINESS ADDRESS: STREET 1: ML INVESTMENT PARTNERS INC STREET 2: WORLD FINANCIAL CENTER S TOWER 6TH FL CITY: NEW YORK STATE: NY ZIP: 10080-6106 BUSINESS PHONE: 2122364167 MAIL ADDRESS: STREET 1: MERRILL LYNCH INVESTMENT PARTNERS STREET 2: WORLD FINANCIAL CENTER S TOWER 6TH FL CITY: NEW YORK STATE: NY ZIP: 10080-6106 424B3 1 SUPPLEMENT ML PRINCIPAL PROTECTION L.P. (formerly, ML PRINCIPAL PROTECTION PLUS L.P.) SERIES I UNITS PROSPECTUS SUPPLEMENT DATED JULY , 1996 TO PROSPECTUS DATED JULY , 1996 The Series I Units will be sold on or about October __, 1996 to the extent that acceptable subscriptions are received on or before September 25, 1996. The "Principal Assurance Date" for the Series I Units will be September 30, 2001. Distributions on the Series I Units, if any, will be in the discretion of MLIP, although none are anticipated. Series I Units are offered at $100 per Share ($97 in the case of Merrill Lynch officers and employees). MLIP will initially commit 75% of the Series I Units' assets to trading. In addition to this Prospectus Supplement, the Prospectus must be accompanied by recent monthly reports relating to ML Principal Protection L.P. The Series I Units will have their own Net Asset Value, independent of that of the other outstanding series of Units. Past performance is not necessarily indicative of future results. Information Regarding Certain of the Fund's Advisors John W. Henry & Company, Inc. ("JWH"), a "core" Advisor, has had the following change in personnel: Peter F. Karpen announced his resignation from JWH on March 18, 1996 but will continue in his present capacity for 6 months from that date. --------------- The other side of this Prospectus Supplement provides certain outline information regarding the Fund's current Advisors. --------------- THE COMMODITY FUTURES TRADING COMMISSION HAS NOT PASSED UPON THE MERITS OF PARTICIPATING IN THIS POOL NOR HAS THE COMMISSION PASSED UPON THE ADEQUACY OR ACCURACY OF THIS DISCLOSURE DOCUMENT AS SUPPLEMENTED. --------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS AS SUPPLEMENTED. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. --------------- Merrill Lynch, Pierce, Fenner & Smith Incorporated Selling Agent Merrill Lynch Investment Partners Inc. General Partner ML PRINCIPAL PROTECTION L.P. The Prospectus sets forth more detailed information concerning the "core" Advisors. The non-"core" Advisors are identified below. As of July 1, 1996, the allocation of the Fund's trading assets among the Advisors is set forth below in the parentheses following the Advisors' names. See "The Advisors" in the Prospectus.
AS OF MAY 31, 1995 ---------------------------------------------------------------------- ANNUALIZED WORST/BEST STANDARD GENERAL MONTHLY DEVIATION ASSETS UNDER TRADING RATE OF RETURN/1/ OF RETURN/2/ MANAGEMENT/3/ STRATEGY ----------------- ------------ -------------- ------------------ "CORE" ADVISORS Chesapeake Capital Corporation (10.98)%/15.99% 17.41% $789 million Technical; Diversified Trading Program (25%) trend-following John W. Henry & Co., Inc. (18.0)%/39.4% 32.7% $893 million Technical; Financial and Metals Portfolio (25%) trend-following NON-"CORE" ADVISORS AIS Futures Management, Inc. (9.62)%/8.38% 15.9% $75.4 million Systematic; MAAP-2x-4x Program (9.5%) trend-following ARA Portfolio Management Company, L.L.C. (8.34)%/14.48% 19.58% $140.6 million Technical; Gamma Program (9.5%) trend-following AIB Investment Managers Limited (1.29)%/2.98% 2.62% $55 million Discretionary; Currency Program (7.5%) fundamental Millburn Ridgefield Corporation (9.04)%/19.38% 17.6% $227 million Technical; Global Portfolio - Normal Leverage (8.5%) trend-following Trendstat Capital Management, Inc. (5.83)%/10.71% 10.63% $110.5 million Technical; World Currency Program (5.5%) trend and counter trend-following West Course Capital Inc. (7.86)%/14.2% 16.4% $128.8 million Discretionary; (9.5%) fundamental
Past performance is not necessarily indicative of future results. Futures trading is highly leveraged, as is each Advisor's trading program. No Advisor has been asked to make any special adjustments to its leveraging policies in the case of the Fund. See "Leverage Considerations" and "Risk Factors" in the Prospectus. MLIP expects that, in general, the non-"core" Advisors trading at "standard" leverage will hold positions in the range of 200% to 400% of the net equity in their accounts and commit as margin 15% to 30% of the Fund's assets allocated to them. Trading at this degree of leverage implies that any non-"core" Advisor whose open positions incur a 10% loss will cause a 20% to 40% loss to its Fund account. In considering the leverage and volatility at which the different non- "core" Advisors trade, prospective investors should recognize that due to the limited percentage of the Fund's assets allocated to each of them, none of these Advisors, individually, is likely to make a material contribution over the short-term to either the return achieved by, or the performance volatility of, the Fund. It would require (i) monthly returns outside of historical highs and lows for the non-"core" Advisors with the largest percentage asset allocation to affect the Fund's overall monthly rate of return by as much as 2% (e.g., from a 10% to an 8% or 12% rate of return), and (ii) historical volatility increased by a factor of approximately 4 for such non-"core" Advisor's performance to increase the range of the Fund's overall standard deviation by as much as 30%. The smaller the allocations to a non-"core" Advisor, the less the contribution of such Advisor's performance and volatility to the overall performance and volatility the Fund. The non-"core" Advisors as a whole can have a significant effect on performance. However, the likely non-correlation among at least certain of these six Advisors reduces the likelihood of any major short-term effect. - ------------------------- /1/ The lowest and the highest monthly rate of return through May 31, 1996 for the program traded for the Fund since January 1, 1991 (or the inception of trading if later). /2/ An annualized standard deviation of 2% and a mean return of 1% would mean that most (approximately two-thirds) of all monthly returns during a year have historically fallen between (1)% and 3%, i.e., within a range (deviation) of 2% above or below the mean. Standard deviation is one widely accepted measure of risk, as standard deviation indicates the variability of the returns. The more variable an Advisor's historical returns, the greater the risk that substantial losses have been included within the historical range of returns. Annualized Standard Deviation of Return is with respect to the program used for the Fund and covers the period beginning with January 1, 1991 (or the inception of trading if later) through May 31, 1996. /3/ Assets under management in the program used for the Fund ("notional" funds excluded). -2- -----END PRIVACY-ENHANCED MESSAGE-----