1. Commentary

Zone Capital found August to be a particularly frustrating month with all our current systems underperforming. Our track record account posted a loss of 2.0% with leverage reducing significantly during the month to stem any potential further losses. We are frustrated by the current period of underperformance and are working towards introducing further systems to complement the current systems in the portfolio. However we remain unconcerned about the robustness of our systems, recognising that every system will go through periods such as these and both real time and backtesting of our systems demonstrates several examples of similar results.

Given the principals have significant capital invested in Zone Capital, we are equally eager to see a return to profitability. Our current drawdown of around 2.7% remains quite limited, demonstrating that capital preservation during underperforming times has been achieved to date. We remain poised for better market conditions to execute on the second part of our mandate, namely accelerating returns when our systems are performing.

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

2. Performance

	Aug 09	July 09
% Return	(2.0%)	(0.1%)

3. Track Record* Update

Cumulative Performance

Summary Performance Statistics

	Since Jan 04
Cumulative % return	858%
Annualised % return	49%
Maximum Drawdown	18.7%
Sharpe Ratio	1.4
Sortino Ratio	5.4

*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.