1. Commentary

June continued our run of flat months with Zone Capital posting a 0.2% return in its track record account. With markets continuing to show erratic volatility our systems performed one week only to underperform the next. It is definitely frustrating to go through a number of months of flat trading regardless of the storm that has been surrounding financial markets.

June marks the end of the financial year in Australia, so we thought it apt to take a look at our returns over the last 12 months versus equities and our peers. Zone Capital has managed a modest 17% return after fees over this period, with a Sharpe ratio of 1.1. Meanwhile the total return indices (including dividends) for the S&P 500 and the S&P/ ASX 200 have both dropped 13% over the same period with Sharpe ratios both negative. The BTOP50 Barclays Currency Traders index lost 4% over the same period with a Sharpe ratio of -1.0.

That said, the Directors of Zone Capital have a saying that "relative performance is delusion" and are not fully satisfied with this return on our own funds so continue to work at ways of increasing the next 12 months' returns while maintaining risk control tight. We look forward to sharing some of our new ideas with clients soon.

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

2. Fund Performance

	June 08	May 08
% Return	0.2%	(1.1%)

3. Track Record* Update

Cumulative Performance

Summary Performance Statistics

	Since Jan 04
Cumulative % return	715%
Annualised % return	59%
Maximum Drawdown	18.7%
Sharpe Ratio	1.5
Sortino Ratio	5.7

*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