-----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, IWcTSYOfct63tQAPidmMSB8k9P0h2yY1g3kG44IC0p0/okrfxOcTyDbVja9vZAC+ /Thb1u/2UAvdO8ce3spgfA== 0000950131-97-005462.txt : 19970912 0000950131-97-005462.hdr.sgml : 19970912 ACCESSION NUMBER: 0000950131-97-005462 CONFORMED SUBMISSION TYPE: 424B3 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19970909 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ML PRINCIPAL PROTECTION 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: SEC FILE NUMBER: 333-07593 FILM NUMBER: 97677304 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: ML PRINCIPAL PROTECTION PLUS LP DATE OF NAME CHANGE: 19940616 FORMER COMPANY: FORMER CONFORMED NAME: SECTOR STRATEGY FUND VII LP DATE OF NAME CHANGE: 19940107 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ML PRINCIPAL PROTECTION TRADING LP CENTRAL INDEX KEY: 0000925433 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 133775509 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: SEC FILE NUMBER: 333-07593-01 FILM NUMBER: 97677305 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 FORMER COMPANY: FORMER CONFORMED NAME: ML PRINCIPAL PROTECTION PLUS TRADING LP DATE OF NAME CHANGE: 19940616 424B3 1 MONTHLY REPORT - JULY 1997 Filed pursuant to Rule 424(b)(3) Registration Number 333-7593 ML Principal Protection L.P. Dear Limited Partner, The Net Asset Value ("NAV") of ML Principal Protection L.P. (the "Fund") increased during July. Please see the accompanying summary financial information for the NAV of your series of Units. July witnessed the return of several strong price trends to financial markets, particularly interest rates. Profits resulted from interest rate, currency, stock index and metals trading, while losses were incurred in agricultural commodity and energy markets. In July, the prices of U.S. Treasury securities rose throughout the month for their best month since May 1995, as the U.S. government reported that economic growth slowed in the second quarter while inflation remained subdued. On July 23, the U.S. bond market rallied in response to Federal Reserve Chairman Greenspan's Humphrey-Hawkins testimony. Mr. Greenspan indicated that he saw no need to raise rates in the near term, but that the Fed must continue to watch for signs of emerging inflation. Non-U.S. bond markets, such as the Australian and German, also moved higher in July, as they were helped by the rally in U.S. Treasuries, in addition to positive economic forecasts. Trading in U.S. Treasury bonds, notes and Eurodollars, as well as Australian and German bonds, produced profits. Currency trading recorded overall profits for the month. The U.S. dollar rose dramatically during July, reflecting the dollar's role as a haven for currency traders skeptical over the future of the "Euro", the new single European currency that is supposed to start replacing several European national denominations in 1999. On July 14, the U.S. dollar surged in value against most major European currencies, reaching its highest level in six years against the Deutsche mark. On July 24, the dollar touched a three-and-a-half-year high against the Swiss franc. In contrast, the price movement of the British pound remained range-bound for most of the month, before declining sharply on July 28. Difficult trading conditions in agricultural commodity markets throughout July resulted in unprofitable trading. Soybean and corn prices trended upward at the beginning of the month, as hot, dry weather threatened to damage crops in Illinois. On July 16, prices dropped on forecasts of rain, easing the heat wave. By month-end, soybean and corn prices were once again on the rise as rain missed the driest growing areas and more hot weather was forecast. Cocoa prices also experienced a sudden drop at mid-month due to forces of supply and demand. Effective July 21, 1997, Merrill Lynch Investment Partners, Inc., the general partner of the Fund, has selected Telesis Management, Inc. ("Telesis") and Northfield Trading L.P. ("Northfield") as additional trading advisors for the Fund. As of July 21, 1997, Northfield and Telesis were allocated approximately 2.0% and 2.5%, respectively, of the Fund's trading assets. Northfield will be paid a monthly Consulting Fee at an annual rate of 1% and an annual Profit Share of 20% of New Trading Profits. As of May 31, 1997, Northfield's best monthly rate of return was 11.4%, its worst monthly rate of return was (11.6%), and it was managing approximately $135 million of customer funds ("notional" funds excluded). Telesis will be paid a monthly Consulting Fee at an annual rate of 1.5% and an annual Profit Share of 20% of New Trading Profits. As of May 31, 1997, Telesis' best monthly rate of return was 30.3%, its worst monthly rate of return was (9.6)%, and it was managing approximately $150 million of customer funds ("notional" funds excluded). As of August 1, 1997, the Fund's assets were allocated as follows: Trading Advisor % Allocation - --------------- ------------- Chesapeake Capital Corporation 10.28 John W. Henry & Company, Inc. 9.34 AIS Futures Management, Inc. 5.24 Graham Capital Management, L.P. 5.09* Trendstat Capital Management, Inc. 5.07 ARA Portfolio Management Company, L.L.C. 5.00 Millburn Ridgefield Corporation 4.43 Quantitative Financial Strategies, Inc. 3.32 Hill Financial Group, Ltd. 2.97 Range Wise, Inc. 2.94 Allied Irish Capital Management Ltd. 2.56 Fundamental Futures, Inc. 1.54 Telesis Management, Inc. 1.48 Northfield Trading L.P. 1.20 Cash 39.54** ------------- 100.00% *Graham Capital Management, L.P. is currently managing the Fund's assets allocated to it as if Graham were managing 50% more equity than the capital allocation indicated above. **Reflects blended allocations of the different series. 1997 Year-to-Date Gross Total Trading Results* Thru July 31 Agriculture $ 845,282 Currencies 2,274,657 Energy (1,060,659) Financial Instruments 1,410,543 Metals 745,020 Stock Indices 1,227,909 ----------- Total $ 5,442,752 *Before deduction of any fees and charges After a difficult period of trading in the second quarter of this year, the Fund's performance improved during July, as the Trading Advisors were able to take advantage of a more favorable market environment with clear price trends. We look forward to continued opportunities for profitability as favorable market conditions arise. Sincerely, John R. Frawley, Jr. President & Chief Executive Officer Merrill Lynch Investment Partners Inc. (General Partner) FOR THE EXCLUSIVE USE OF INVESTORS IN ML PRINCIPAL PROTECTION L.P. THIS MONTHLY REPORT IS NOT AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES. AN OFFER CAN ONLY BE MADE BY A CURRENT PROSPECTUS, AS SUPPLEMENTED, TOGETHER WITH SUMMARY FINANCIAL INFORMATION FOR THE FUND CURRENT WITHIN 60 DAYS. THESE MATERIALS CONTAIN IMPORTANT INFORMATION ABOUT RISK FACTORS, PERFORMANCE AND OTHER ASPECTS OF THE FUND AND MUST BE READ CAREFULLY BEFORE INVESTING. FUTURES TRADING IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF RISK. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. THIS MONTHLY REPORT MUST NOT BE REPRODUCED OR DISTRIBUTED IN ANY MANNER. ML Principal Protection L.P. July 31, 1997 Statement of Changes in Net Asset Value Net Asset Value (744,462.58 Units) at June 30, 1997 $ 80,359,706 Additions of 147,480.00 Units 14,748,000 Net Income/(Loss) for July 1997 2,714,763 Less Redemptions of 16,968.00 Units (1,860,405) Distribution - Series D Units (474,251) Distribution - Series H Units (508,522) ------------ Net Asset Value (874,974.58 Units) at July 31, 1997 $ 94,979,291 ============= Net Asset Value at July 31, 1997 Series A Units $ 116.48* ============= Series B Units $ 113.33* ============= Series C Units $ 107.38* ============= Series D Units $ 109.15* ============= Series E Units $ 114.21* ============= Series F Units $ 108.26* ============= Series G Units $ 105.76* ============= Series H Units $ 105.86* ============= Series K Units $ 104.26 ============= Series L Units $ 101.68 ============= * The Net Asset Value per Unit does not include the annual distributions paid to Unitholders. Statement of Income/(Loss) July ---- Revenues: Realized Profit/(Loss) $ (199,633) Change in Unrealized Profit/(Loss) 3,323,605 ------------- Total Trading Results 3,123,972 Interest Income 415,789 ------------- Total Revenues 3,539,761 Expenses: Brokerage Commissions 413,342 Administrative Fees 11,810 Allocation of New Profit Share 357,223 Organizational Expenses 6,642 ------------- Total Expenses 789,017 ------------- Net Income/(Loss) Before Minority Interest 2,750,744 ------------- Minority Interest (35,981) ------------- Net Income/(Loss) $ 2,714,763 ============= To the best of the knowledge and belief of the undersigned the information contained in this report is accurate and complete. /s/ Michael A. Karmelin --------------------------------- Michael A. Karmelin Chief Financial Officer Merrill Lynch Investment Partners Inc. Please notify the following of any address changes: Merrill Lynch Investment Partners Inc. Merrill Lynch World Headquarters South Tower World Financial Center New York, New York 10080-6106 1-800-765-0095 -----END PRIVACY-ENHANCED MESSAGE-----