1. Commentary

Zone Capital accounts consolidated this month with the Zone Capital track record account posting a modest gain of 0.5% after fees. The month was characterised by quite different market conditions to normal and saw our end of day rotational systems outperform our high frequency mean reversion systems. While we did not keep our run of strong months going, we are pleased that all our clients are on high water marks, or extremely close to them.

Given this is the final month of quite a remarkable year, we thought it worthwhile to look at some annual comparisons. Zone Capital's track record account posted a gain of 16.9% for the calendar year. Meanwhile the S&P 500 declined by 37%, most hedge fund indices declined by at least 20% and Barclays Currency Traders Index posted a 3.49% return. While we are not entirely satisfied with our absolute performance, it must be recognised that this has been an extraordinary year in the financial markets, and anyone who has preserved capital, let alone produced double-digit profits, has done remarkably well.

We thank all our clients for their support over the last twelve months, and wish you all a very happy, successful and prosperous New Year.

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

2. Fund Performance

	Dec 08	Nov 08
% Return	0.5%	4.2%

3. Track Record* Update

Cumulative Performance

Summary Performance Statistics

	Since Jan 04
Cumulative % return	845%
Annualised % return	57%
Maximum Drawdown	18.7%
Sharpe Ratio	1.6
Sortino Ratio	5.8

*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