1. Commentary

August continued our run of under performing months with our track record account posting a loss of 1.1%.

Our modest exposure to our breakout systems was not enough to stem losses arising from our mean reversion and rotational end of day systems. While we are not pleased with what is, essentially, an 8 month flat spot, it is important to realize that the drawdown incurred since our peak in November 2007 is relatively modest at 3.5%.

We have been steadily working on a number of potential systems that take better advantage of the recent volatility in FX markets and also show a solid track record of performance. Once testing is finalized it may give us a better exposure to the larger swings going on in the broader market.

Until then, we remain cautiously optimistic that the markets will continue to change and once again favor some systems in our existing inventory.

For more information please visit our website: www.zonecapital.com.au

2. Fund Performance

	August 08	July 08
% Return	(1.1%)	(0.8%)

3. Track Record* Update

Cumulative Performance

Summary Performance Statistics

	Since Jan 04
Cumulative % return	700%
Annualised % return	56%
Maximum Drawdown	18.7%
Sharpe Ratio	1.5
Sortino Ratio	5.6

*Track Record, as presented, is based on the trading account of FuturesTech Pty Ltd (an entity wholly owned by Malcolm Morley, a director of Zone Capital) for the period January 2004 – December 2006 and for the Zone Trading Trust 1 thereafter. The returns above are after deducting pro-forma fees, consisting of a 2% pa management fee plus a 25% high water marked performance fee. Zone Capital does not represent in any way that the past performance of the Track Record is any indication of likely future performance.

www.zonecapital.com.au