1. Commentary

Zone Capital posted another month of modest gains this month after a particularly frustrating month of trading. While the high frequency mean reversion systems have "cooled off" somewhat, one of our end of day rotational systems performed particularly well during the month to make trading gains of more than 4% before fees intra month. Unfortunately the mean reversion systems continued to underperform and some of those gains from the end of day system were given back in the last week, leaving our track record account to post a respectable but modest 0.7% after fees.

While giving profits back during the month is frustrating, again we were pleased with the performance of the risk management algorithms. As mentioned a number of times before, Zone Capital scales up leverage and risk when profits have been booked during the month and scales back leverage when losses are incurred. This is implemented on a system by system basis, so in this month where mean reversion underperformed, it effectively scales itself down to a level that minimises subsequent losses. So while it is disappointing our end of day system did not follow through its performance during the month, we were pleased that the underperformance of our high frequency mean reversion systems did not take us into the red overall.

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2. Performance

	Mar 09	Feb 09
% Return	0.7%	(1.6%)

3. Track Record* Update

Cumulative Performance

Summary Performance Statistics

	Since Jan 04
Cumulative % return	875%
Annualised % return	54%
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.

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