Nestor Partners 10-Q 2009 Q2 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended:  June 30, 2009
	Or
¨	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 000-50725

NESTOR PARTNERS

(Exact name of registrant as specified in its charter)

NEW JERSEY	22-2149317
State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

c/o MILLBURN RIDGEFIELD CORPORATION

411 West Putnam Avenue

Greenwich, Connecticut  06830

(Address of principal executive offices)

Registrant's telephone number, including area code:  (203) 625-7554

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x          No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ¨          No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

  Yes ¨                            No x

Nestor Partners

Financial statements

For the three and six months ended June 30, 2009 and 2008 (unaudited)

Statements of Financial Condition (a)	1
Condensed Schedules of Investments (a)	2
Statements of Operations (b)	6
Statements of Changes in Partners' Capital (c)	8
Statements of Financial Highlights (b)	9
Notes to the Financial Statements (unaudited)	11

(a) At June 30, 2009 (unaudited) and December 31, 2008

(b) For the three and six months ended June 30, 2009 and 2008 (unaudited)

(c) For the six months ended June 30, 2009 and 2008 (unaudited)

PART 1. FINANANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Nestor Partners

Statements of Financial Condition

	June 30
	2009		December 31
	(UNAUDITED)		2008
ASSETS
Equity in trading accounts:
Investments in U.S. Treasury notes − at market value
(amortized cost $10,573,778 and $10,919,463)	$	10,608,183	$	11,026,888
Net unrealized appreciation on open futures and forward
currency contracts		574,897		1,502,774
Due from brokers		1,197,120		501,514
Restricted cash		2,883,000		-
Cash denominated in foreign currencies (cost $760,330
and $117,799)		799,488		123,751
Total equity in trading accounts		16,062,688		13,154,927
INVESTMENTS IN U.S. TREASURY NOTES − at market value
(amortized cost $125,023,497 and $159,691,001)		125,179,908		160,955,102
CASH AND CASH EQUIVALENTS		6,505,804		14,235,694
ACCRUED INTEREST RECEIVABLE		1,122,110		1,593,509
TOTAL	$	148,870,510	$	189,939,232
LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES:
Capital contributions received in advance	$	-	$	537,222
Unrealized depreciation on open futures contracts		251,823		722,949
Accrued brokerage fees		264,072		340,177
Due to brokers		10,012		782,717
Cash denominated in foreign currencies (cost $-12 and $-437,052)		12		426,586
Accrued expenses		433,894		302,592
Capital withdrawals payable		2,298,986		19,505,497
Due to General Partner		-		2,071
Total liabilities		3,258,799		22,619,811
PARTNERS' CAPITAL		145,611,711		167,319,421
TOTAL	$	148,870,510	$	189,939,232

See notes to financial statements

1

Nestor Partners

Condensed Schedule of Investments

June 30, 2009 (UNAUDITED)

Futures and Forward Currency Contracts	% of Partners' Capital			Net Unrealized Appreciation/ (Depreciation)
FUTURES CONTRACTS:
Long futures contracts:
Energies		(0.17	) %	$	(247,965	)
Grains		(0.15	)		(212,725	)
Interest rates		0.07			96,427
Metals		0.10			151,584
Softs		0.02			31,752
Stock indices		0.04			54,752
Total long futures contracts		(0.09	)		(126,175	)
Short futures contracts:
Energies		0.15			220,449
Grains		0.43			625,412
Interest rates		(0.04	)		(62,328	)
Livestock		(0.04	)		(57,120	)
Metals		(0.68	)		(984,025	)
Softs		0.04			50,902
Stock indices		0.11			162,161
Total short futures contracts		(0.03	)		(44,549	)
TOTAL INVESTMENTS IN FUTURES CONTRACTS-Net		(0.12	)		(170,724	)
FORWARD CURRENCY CONTRACTS:
Total long forward currency contracts		0.42			610,164
Total short forward currency contracts		(0.08	)		(116,366	)
TOTAL INVESTMENTS IN FORWARD CURRENCY
CONTRACTS-Net		0.34			493,798
TOTAL		0.22	%	$	323,074
				(Continued)

2

Nestor Partners

Condensed Schedule of Investments

June 30, 2009 (UNAUDITED)

U.S. Treasury Notes
Face Amount		Description	% of Partners' Capital			Value
$	41,440,000	U.S. Treasury notes, 3.625%, 07/15/2009		28.50	%	$	41,498,275
	37,540,000	U.S. Treasury notes, 3.375%, 10/15/2009		26.01			37,880,206
	18,000,000	U.S. Treasury notes, 1.750%, 03/31/2010		12.48			18,177,188
	37,500,000	U.S. Treasury notes, 2.625%, 05/31/2010		26.26			38,232,422
		Total investments in U.S. Treasury notes
		(amortized cost $135,597,275)		93.25	%	$	135,788,091
						(Concluded)

See notes to financial statements

3

Nestor Partners

Condensed Schedule of Investments

December 31, 2008

Futures and Forward Currency Contracts	% of Partners' Capital			Net Unrealized Appreciation/ (Depreciation)
FUTURES CONTRACTS:
Long futures contracts:
Energies		0.03	%	$	42,915
Grains		0.06			104,350
Interest rates		1.03			1,717,510
Metals		(0.13	)		(218,641	)
Softs		0.00			7,101
Total long futures contracts		0.99			1,653,235
Short futures contracts:
Energies		0.22			360,617
Grains		(0.33	)		(559,689	)
Interest rates		(0.11	)		(177,109	)
Livestock		0.06			97,260
Metals		0.21			351,967
Softs		(0.07	)		(119,636	)
Stock indices		(0.07	)		(112,804	)
Total short futures contracts		(0.09	)		(159,394	)
TOTAL INVESTMENTS IN FUTURES CONTRACTS-Net		0.90			1,493,841
FORWARD CURRENCY CONTRACTS:
Total long forward currency contracts		0.16			271,304
Total short forward currency contracts		(0.59	)		(985,320	)
TOTAL INVESTMENTS IN FORWARD CURRENCY
CONTRACTS-Net		(0.43	)		(714,016	)
TOTAL		0.47	%	$	779,825
				(Continued)

4

Nestor Partners

Condensed Schedule of Investments

December 31, 2008

U.S. Treasury Notes

Face Amount		Description	% of Partners' Capital			Value
$	18,000,000	U.S. Treasury notes, 4.000%, 03/31/2009		10.87	%	$	18,194,063
	44,890,000	U.S. Treasury notes, 3.875%, 05/15/2009		27.19			45,500,224
	41,440,000	U.S. Treasury notes, 3.625%, 07/15/2009		25.21			42,184,625
	64,540,000	U.S. Treasury notes, 3.375%, 10/15/2009		39.52			66,103,078
		Total investments in U.S. Treasury notes
		(amortized cost $170,610,464)		102.79	%	$	171,981,990

(Concluded)

See notes to financial statements

5

Nestor Partners

Statements of Operations (UNAUDITED)

	For the three months ended
	June 30			June 30
	2009			2008
INVESTMENT INCOME:
Interest income	$	632,997		$	1,282,365
EXPENSES:
Brokerage fees		836,662			938,006
Administrative expenses		95,347			104,011
Custody fees		8,382			7,561
Total expenses		940,391			1,049,578
NET INVESTMENT INCOME (LOSS)		(307,394	)		232,787
NET REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gains (losses) on closed positions:
Futures and forward currency contracts		(21,854,744	)		5,953,689
Foreign exchange translation		126,368			(45,330	)
Net change in unrealized:
Futures and forward currency contracts		7,254,194			9,023,291
Foreign exchange translation		1,468			(42,730	)
Net losses from U.S. Treasury notes:
Realized		-			-
Net change in unrealized		(464,494	)		(785,938	)
Total net realized and unrealized gains (losses)		(14,937,208	)		14,102,982
NET INCOME (LOSS)		(15,244,602	)		14,335,769
LESS PROFIT SHARE TO GENERAL PARTNER		-			1,751,971
NET INCOME (LOSS) AFTER PROFIT SHARE TO
GENERAL PARTNER	$	(15,244,602	)	$	12,583,798

(Continued)

6

Nestor Partners

Statements of Operations (UNAUDITED)

	For the six months ended
	June 30			June 30
	2009			2008
INVESTMENT INCOME:
Interest income	$	1,333,130		$	2,870,673
EXPENSES:
Brokerage fees		1,769,345			1,857,224
Administrative expenses		200,177			206,815
Custody fees		18,441			13,505
Total expenses		1,987,963			2,077,544
NET INVESTMENT INCOME (LOSS)		(654,833	)		793,129
NET REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gains (losses) on closed positions:
Futures and forward currency contracts		(16,365,264	)		21,674,171
Foreign exchange translation		14,217			(192,282	)
Net change in unrealized:
Futures and forward currency contracts		(456,751	)		3,827,390
Foreign exchange translation		22,740			992
Net losses from U.S. Treasury notes:
Realized		87,250			-
Net change in unrealized		(1,180,710	)		(334,916	)
Total net realized and unrealized gains (losses)		(17,878,518	)		24,975,355
NET INCOME (LOSS)		(18,533,351	)		25,768,484
LESS PROFIT SHARE TO GENERAL PARTNER		4,906			3,138,100
NET INCOME (LOSS) AFTER PROFIT SHARE TO
GENERAL PARTNER	$	(18,538,257	)	$	22,630,384

See notes to financial statements (Concluded)            

7

Nestor Partners

Statements of Changes in Partners' Capital (UNAUDITED)

For the six months ended June 30, 2009:

	Limited Partners			Special Limited Partners			New Profit Memo Account			General Partner			Total
PARTNERS' CAPITAL-
January 1, 2009	$	97,990,719		$	65,378,126		$	-		$	3,950,576		$	167,319,421
Contributions		3,733,022			748,077			-			-			4,481,099
Withdrawals		(6,986,419	)		(669,039	)		-			-			(7,655,458	)
Net loss		(11,377,574	)		(6,751,942	)		(626	)		(403,209	)		(18,533,351	)
General Partner's allocation:
New Profit-Accrued		(4,906	)		-			4,906			-			-
PARTNERS' CAPITAL-
June 30, 2009	$	83,354,842		$	58,705,222		$	4,280		$	3,547,367		$	145,611,711

For the six  months ended June 30, 2008:

	Limited Partners			Special Limited Partners			New Profit Memo Account		General Partner			Total
PARTNERS' CAPITAL-
January 1, 2008	$	88,400,217		$	59,065,781		$	-	$	4,570,266		$	152,036,264
Contributions		5,985,285			543,859			-		-			6,529,144
Withdrawals		(7,226,300	)		(3,703,093	)		-		(1,000,000	)		(11,929,393	)
Transfers		(378,101	)		378,101								-
Net income		14,305,731			10,632,052			7,835		822,866			25,768,484
General Partner's allocation:
New Profit-Accrued		(2,860,218	)		(277,882	)		3,138,100		-			-
PARTNERS' CAPITAL-
June 30, 2008	$	98,226,614		$	66,638,818		$	3,145,935	$	4,393,132		$	172,404,499

See notes to financial statements

8

Nestor Partners

Statements of Financial Highlights (UNAUDITED)

For the three months ended June 30, 2009	Limited Partners			Special Limited Partners
Ratios to average capital:
Net investment income (loss) (a)		(2.09	) %		0.97	%
Total expenses (a)		3.76	%		0.69	%
Profit share allocation (b)		-	%		-	%
Total expenses and profit share allocation		3.76	%		0.69	%
Total return before profit share allocation (b)		(9.60	) %		(8.91	) %
Profit share allocation (b)		-	%		-	%
Total return after profit share allocation		(9.60	) %		(8.91	) %

For the three months ended June 30, 2008	Limited Partners			Special Limited Partners
Ratios to average capital:
Net investment income (loss) (a)		(0.72	) %		2.24	%
Total expenses (a)		3.84	%		0.83	%
Profit share allocation (b)		1.68	%		0.25	%
Total expenses and profit share allocation		5.52	%		1.08	%
Total return before profit share allocation (b)		8.44	%		9.24	%
Profit share allocation (b)		(1.60	) %		(0.23	) %
Total return after profit share allocation		6.84	%		9.01	%

(a) annualized
(b) not annualized	(Continued)

9

Nestor Partners

Statements of Financial Highlights (UNAUDITED)

For the six months ended June 30, 2009	Limited Partners			Special Limited Partners
Ratios to average capital:
Net investment income (loss) (a)		(2.11	) %		0.96	%
Total expenses (a)		3.78	%		0.70	%
Profit share allocation (b)		-	%		-	%
Total expenses and profit share allocation		3.78	%		0.70	%
Total return before profit share allocation (b)		(11.69	) %		(10.32	) %
Profit share allocation (b)		-	%		-	%
Total return after profit share allocation		(11.69	) %		(10.32	) %

For the six months ended June 30, 2008	Limited Partners			Special Limited Partners
Ratios to average capital:
Net investment income (loss) (a)		(0.29	) %		2.64	%
Total expenses (a)		3.80	%		0.82	%
Profit share allocation (b)		3.02	%		0.43	%
Total expenses and profit share allocation		6.82	%		1.25	%
Total return before profit share allocation (b)		16.03	%		17.86	%
Profit share allocation (b)		(3.20	) %		(0.47	) %
Total return after profit share allocation		12.83	%		17.39	%

(a) annualized

(b) not annualized

See notes to financial statements (Concluded)       

10

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

The accompanying unaudited financial statements, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of Nestor Partners’ (the “Partnership”) financial condition at June 30, 2009 and December 31, 2008 and the results of its operations for the three and six months ended June 30, 2009 and 2008. These financial statements present the results of interim periods and do not include all disclosures normally provided in annual financial statements. It is suggested that these financial statements be read in conjunction with the audited financial statements and notes included in the Partnership's annual report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2008. The December 31, 2008 information has been derived from the audited financial statements as of December 31, 2008.

Restricted cash of $2,883,000 was used as margin collateral related to forward currency contracts held at Morgan Stanley & Co., Inc.

The Partnership pays administrative expenses for legal, audit and accounting services, up to 0.25 of 1% per annum of the Partnership's average month-end net assets. A portion of such expenses are paid to an affiliate of Millburn Ridgefield Corporation (the “General Partner”), The Millburn Corporation (“TMC”), for providing accounting services to the Partnership. The Partnership incurred administrative expenses of $200,177 during the six months ended June 30, 2009, of which $93,418 relates to legal and accounting services provided to the Partnership by TMC.  The General Partner pays all administrative expenses in excess of 0.25 of 1% per annum of the Partnership's average month-end net assets.

Interests sold through Selling Agents engaged by the General Partner are generally subject to a 2.5% redemption charge for redemptions made prior to the end of the twelfth month following their sale. All redemption charges will be paid to the General Partner. There were no charges due to the General Partner at June 30, 2009.

In July 2006, the Financial Accounting Standards Board ("FASB") issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109 ("FIN 48"), which clarifies the accounting for uncertainty in tax positions. FIN 48 requires that the Partnership recognize in its financial statements, the impact of a tax position, and if that position is more likely than not of being sustained on audit, based on the technical merits of the position. The provisions of FIN 48 were effective for fiscal years beginning after December 15, 2006, with the cumulative effect of the change in accounting principle recorded as an adjustment to opening partners’ capital. Millburn Ridgefield Corporation as General Partner of the Partnership has evaluated the impact of adopting FIN 48 on the Partnership’s financial statements. Based on a review of the Partnership’s open tax years, 2007 to 2008, for the U.S. Federal jurisdiction, the New York and New Jersey State jurisdictions, and the New York City jurisdiction, FIN 48 did not have an impact on the Partnership.  The Partnership is treated as a limited partnership for federal and state income tax reporting purposes and therefore the limited partners are responsible for the payment of taxes.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The provisions of SFAS No. 157 were effective for fiscal years beginning after November 15, 2007. The Partnership adopted this pronouncement January 1, 2008. The three levels of the fair value hierarchy under SFAS No. 157 are described below:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly;

Level 3: Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

In determining fair value, the Partnership separates its investments into two categories: cash instruments and derivative contracts.

11

Cash Instruments.  The Partnership’s cash instruments are generally classified within level 1 of the fair value hierarchy because they are typically valued using quoted market prices. The types of instruments valued based on quoted market prices in active markets include U.S. government obligations and a short-term U.S. government money market fund. The General Partner of the Partnership does not adjust the quoted price for such instruments, even in situations where the Partnership holds a large position and a sale could reasonably impact the quoted price.

Derivative Contracts.  Derivative contracts can be exchange-traded or over-the-counter (OTC). Exchange-traded futures contracts are valued based on quoted closing settlement prices and typically fall within level 1 of the fair value hierarchy.

OTC derivatives, or forward currency contracts, are valued based on pricing models that consider the current market prices (“Spot Prices”) plus the time value of money (“Forward Points”) and contractual prices of the underlying financial instruments. The Forward Points from the quotation service providers are generally in periods of one month, two months, three months and six months forward while the contractual forward delivery dates for the foreign forward currency contracts traded by the Partnership may be in between these periods. The General Partner’s policy is to calculate the Forward Points for each contract being valued by determining the number of days from the date the forward currency contract is being valued to its maturity date and then using straight-line interpolation to calculate the valuation of Forward Points for the applicable forward currency contract. Model inputs can generally be verified and model selection does not involve significant management judgment. Such instruments are typically classified within level 2 of the fair value hierarchy.

The following table sets forth by level and major category within the fair value hierarchy:

Financial Assets at Fair Value as of June 30, 2009

	Level 1			Level 2		Total
U.S. Treasury Notes	$	135,788,091		$	0	$	135,788,091
Short-Term Money Market Fund		6,205,804			0		6,205,804
Exchange-Traded
Futures Contracts		(170,724	)		0		(170,724	)
Over-the-Counter
Forward Currency Contracts		0			493,798		493,798
Total assets at fair value	$	141,823,171		$	493,798	$	142,316,969

Financial Assets at Fair Value as of December 31, 2008

	Level 1		Level 2			Total
U.S. Treasury Notes	$	171,981,990	$	0		$	171,981,990
Short-Term Money Market Fund		13,935,694		0			13,935,694
Exchange-Traded
Futures Contracts		1,493,841		0			1,493,841
Over-the-Counter
Forward Currency Contracts	��	0		(714,016	)		(714,016	)
Total financial assets at fair value	$	187,411,525	$	(714,016	)	$	186,697,509

Derivative Instruments

In March 2008, the FASB issued FAS 161, "Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133", which amends and expands the disclosure requirements of FAS 133, “Accounting for Derivative Instruments and Hedging Activities” to require qualitative disclosure about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments and disclosures about credit-risk-related contingent features in derivative agreements. The Partnership adopted the provisions of this statement on January 1, 2009. As a result of the adoption of this statement, the Partnership has expanded its disclosures regarding derivative instruments.

12

The Partnership’s market risk is influenced by a wide variety of factors, including the level and volatility of interest rates, exchange rates, equity price levels, the market value of financial instruments and contracts, the diversification effects among the Partnership’s open positions and the liquidity of the markets in which it trades.

The Partnership engages in the speculative trading of futures and forward contracts on interest rates, commodities, currencies, metals, energies, livestock and stock indices. The following were the primary trading risk exposures of the Partnership at June 30, 2009, by market sector:

Agricultural.  The Partnership’s primary exposure is to agricultural price movements, which are often directly affected by severe or unexpected weather conditions.

Currencies.  Exchange rate risk is a principal market exposure of the Partnership.  The Partnership’s currency exposure is to exchange rate fluctuations, primarily fluctuations which disrupt the historical pricing relationships between different currencies and currency pairs.  The fluctuations are influenced by interest rate changes as well as political and general economic conditions.  The Partnership trades in a large number of currencies, including cross-rates—e.g., positions between two currencies other than the U.S. dollar. At June 30, 2009, the Partnership had currency exposures to the Australian Dollar, Brazilian Real, British Pound, Canadian Dollar, Chilean Peso, Colombian Peso, Czech Koruna, Euro, Hong Kong dollar, Indian Rupee, Israeli Shekel, Japanese Yen, Korean Won, Mexican Peso, New Zealand Dollar, Norwegian Krone, Polish Zloty, Russian Ruble, Singapore Dollar, South African Rand, Swedish Krone, Swiss Franc, Thai baht and the Turkish Lira.

Energies.  The Partnership’s primary energy market exposure is to gas and oil price movements, often resulting from political developments in the Middle East and economic conditions worldwide.  Energy prices are volatile and substantial profits and losses have been and are expected to continue to be experienced in this market.

Interest rates.  Interest rate movements directly affect the price of the sovereign bond futures positions held by the Partnership and indirectly the value of its stock index and currency positions.  Interest rate movements in one country as well as relative interest rate movements between countries may materially impact the Partnership’s profitability.  The Partnership’s primary interest rate exposure is to interest rate fluctuations in the United States and other major industrialized, or Group of Seven (Canada, France, Germany, Italy, Japan, United Kingdom and United States, collectively, “G-7”) countries.  However, the Partnership also may take positions in futures contracts on the government debt of other nations.  The General Partner anticipates that G-7 interest rates, both long-term and short-term, will remain the primary market exposure of the Partnership for the foreseeable future.

Metals. The Partnership’s metals market exposure is to fluctuations in the price of aluminum, copper, gold, lead, nickel, silver, tin and zinc.

Stock Indices.  The Partnership’s equity exposure, through stock index futures, is to equity price risk in the G-7 countries as well as other countries.

FAS 133 requires entities to recognize in the Statements of Financial Condition all derivative contracts as assets or liabilities. Fair value of futures contracts in an asset position are recorded in the Statements of Financial Condition as “Net unrealized appreciation on open futures contracts.” Fair value of futures and forward currency contracts in a liability position are recorded in the Statements of Financial Condition as “Net unrealized depreciation on open futures and forward currency contracts.” The Partnership’s policy regarding fair value measurement is discussed in the FAS 157 note, contained herein.

Since the derivatives held or sold by the Partnership are for speculative trading purposes, the derivative instruments are not designated as hedging instruments under the provisions of FAS 133. Accordingly, all realized gains and losses, as well as any change in net unrealized gains or losses on open positions from the preceding period, are recognized as part of the Partnership’s trading gains and losses in the Statements of Operations.

13

The following table presents the fair value of open futures and forward currency contracts, held long or sold short, at June 30, 2009. Fair value is presented on a gross basis even though the contracts are subject to master netting agreements and qualify for net presentation in the Statements of Financial Condition in accordance with FASB Interpretation No. 39, “Offsetting of Amounts Related to Certain Contracts.”

	Fair Value - Long Positions					Fair Value - Short Positions					Net Unrealized Gain (Loss) on
Sector	Gains		Losses			Gains		Losses			Open Positions
Futures contracts:
Energies	$	2,485	$	(250,450	)	$	226,569	$	(6,120	)	$	(27,516	)
Grains		-		(212,725	)		625,412		-			412,687
Interest rates		247,258		(150,831	)		-		(62,328	)		34,099
Livestock		-		-			71,580		(128,700	)		(57,120	)
Metals		261,207		(109,623	)		19,126		(1,003,151	)		(832,441	)
Softs		31,752		-			55,005		(4,103	)		82,654
Stock indices		64,936		(10,184	)		194,360		(32,199	)		216,913
Total futures contracts:		607,638		(733,813	)		1,192,052		(1,236,601	)		(170,724	)
Forward currency contracts		1,107,954		(497,790	)		112,132		(228,498	)		493,798
Total futures and
forward currency contracts	$	1,715,592	$	(1,231,603	)	$	1,304,184	$	(1,465,099	)	$	323,074

The effect of trading futures and forward currency contracts on the Statements of Operations for the three and six months ended June 30, 2009 is detailed below:

Sector	Three months ended: June 30, 2009			Six months ended: June 30, 2009
Futures contracts:
Currencies	$	1,888		$	2,563
Energies		(1,800,223	)		(1,868,193	)
Grains		(310,482	)		(368,726	)
Interest rates		(4,267,830	)		(3,343,829	)
Livestock		67,970			362,000
Metals		(2,280,646	)		(3,978,051	)
Softs		(474,696	)		(721,304	)
Stock indices		(3,622,524	)		(3,318,875	)
Total futures contracts		(12,686,543	)		(13,234,415	)
Forward currency contracts		(1,914,007	)		(3,587,600	)
Total futures and
forward currency contracts	$	(14,600,550	)	$	(16,822,015	)

Location of Trading Gain (Loss) recognized in the Statements of Operations:

a. Net realized gains (losses) on closed positions: Futures and forward currency contracts, or

b. Net change in unrealized: Futures and forward currency contracts

14

The following table presents notional value by sector of open futures and forward currency contracts at June 30, 2009, in U.S. Dollars:

	Notional Value
Sector	Long Positions		Short Positions
Futures contracts:
Sector
Energies	$	10,147,891	$	11,270,120
Grains		4,104,510		5,220,393
Interest Rates		82,894,886		5,391,535
Livestock		-		4,472,860
Metals		3,440,176		1,811,681
Softs		1,659,336		1,883,505
Stock Indices		5,236,409		9,932,383
Futures - Total		107,483,208		39,982,477
Forward currency contracts		44,422,575		29,032,549
Total Notional	$	151,905,783	$	69,015,026

Notional values in the interest rate sector were calculated by converting the notional value in local currency of all open interest rate futures positions to 10-year equivalent fixed income instruments, translated to U.S. Dollars at June 30, 2009. The 10-year note is often used as a benchmark for many types of fixed-income instruments and the General Partner believes it is a more meaningful representation of notional values of the Partnership’s open interest rate positions.

Concentration of Credit Risk

Credit risk is the possibility that a loss may occur due to the failure of a counterparty to perform according to the terms of a contract. Credit risk is normally reduced to the extent that an exchange or clearing organization acts as a counterparty to futures transactions since typically the collective credit of the members of the exchange is pledged to support the financial integrity of the exchange.

The General Partner seeks to minimize credit risk primarily by depositing and maintaining the Partnership’s assets at financial institutions and trading counterparties which the General Partner believes to be creditworthy. In addition, for over-the-counter forward currency contracts, the Partnership enters into master netting agreements with its counterparties. Collateral posted at the various counterparties for trading of futures and forward currency contracts includes cash and U.S. Treasury notes.

A significant portion of the Partnership’s forward currency trading activities are cleared by Deutsche Bank AG (“DB”). The Partnership’s concentration of credit risk associated with DB nonperformance includes unrealized gains inherent in such contracts, which are recognized in the Statements of Financial Condition, plus the value of margin or collateral held by DB. The amount of such credit risk was $1,486,891 at June 30, 2009.

Recently Issued Accounting Pronouncements

In May 2009, the FASB issued FAS 165, “Subsequent Events” which establishes principles and requirements for disclosure about events that occur after the balance sheet date but before financial statements are issued or available to be issued.  The provisions of FAS 165 are effective for reporting periods ending after June 15, 2009.  The Partnership adopted the provisions of this statement upon its issuance.  Based on a review of any events occurring after the balance sheet date that may effect estimates made in the financial statements especially with regard to litigation or realization of receivables, the General Partner has determined that FAS 165 did not have an impact on the Partnership. The Partnership has updated its subsequent events disclosure through August 14, 2009, the filing date of this Form 10-Q Report.

15

In April 2009, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position (“FSP”) No. 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly (“FSP No. 157-4”). FSP No. 157-4 provides additional guidance for determining fair value and requires new disclosures regarding the categories of fair value instruments, as well as the inputs and valuation techniques utilized to determine fair value and any changes to the inputs and valuation techniques during the period.  The Partnership has elected to adopt FSP 157-4 in the second quarter of 2009. The adoption of FSP 157-4 had no material impact on the Partnership's financial statements.

In April 2009, the FASB issued FSP No. 107-1 and Accounting Principals Board (“APB”) No. 28-1, Interim Disclosures About Fair Value of Financial Instruments (“FSP No. 107-1” and “APB No. 28-1”). The staff position requires fair value disclosures of financial instruments on a quarterly basis, as well as new disclosures regarding the methodology and significant assumptions underlying the fair value measures and any changes to the methodology and assumptions during the reporting period.  The Partnership has elected to adopt FSP 107-1 and APB No 28-1 in the second quarter of 2009. The adoption of FSP 107-1 and APB No 28-1 had no material impact on the Partnership's financial statements.

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Reference is made to Item 1, "Financial Statements". The information contained therein is essential to, and should be read in connection with, the following analysis.

OPERATIONAL OVERVIEW

Due to the nature of the Partnership's business, its results of operations depend on the General Partner's ability to recognize and capitalize on trends and other profit opportunities in different sectors of the global capital and commodity markets. The General Partner's trading methods are confidential, so that substantially the only information that can be furnished regarding the Partnership's results of operations is contained in the performance record of its trading. Unlike operating businesses, general economic or seasonal conditions do not directly affect the profit potential of the Partnership, and its past performance is not necessarily indicative of future results. The General Partner believes, however, that there are certain market conditions, for example, markets with strong price trends, in which the Partnership has a better likelihood of being profitable than in others.

LIQUIDITY AND CAPITAL RESOURCES

The Partnership raises additional capital only through the sale of Interests. Partnership capital may also be increased by trading profits, if any. The Partnership does not engage in borrowing. Interests may be offered for sale as of the beginning of each month.

The Partnership trades futures and forward contracts on interest rates, commodities, currencies, metals, energies, livestock and stock indices. Due to the nature of the Partnership's business, substantially all its assets are represented by cash and United States government obligations, while the Partnership maintains its market exposure through open futures and forward contract positions.

The Partnership's assets are generally held as cash, cash equivalents or U.S. Government obligations which are used to margin or collateralize the Partnership's futures and forward positions and are withdrawn, as necessary, to pay redemptions and expenses. Other than potential market-imposed limitations on liquidity, due, for example, to daily price fluctuation limits, which are inherent in the Partnership's futures and forward trading, the Partnership's assets are highly liquid and are expected to remain so.

16

There have been no material changes with respect to the Partnership's critical accounting policies, off-balance sheet arrangements or disclosure of contractual obligations as reported in the Partnership's Annual Report on Form 10-K for fiscal year 2008.

PROFIT SHARE

The following table indicates the total profit share earned and accrued during the three and six months ended June 30, 2009 and 2008. Profit share earned (from Limited Partners’ redemptions) is credited to the New Profit memo account as defined in the Partnership’s Partnership Agreement.

	Three months ended:
	June 30, 2009		June 30, 2008
Profit share earned	$	0	$	69,174
Reversal of profit share (1)		0		(1,365,865	)
Profit share accrued (2)		0		3,048,662
Total profit share	$	0	$	1,751,671

	Six months ended:
	June 30, 2009		June 30, 2008
Profit share earned	$	4,906	$	89,437
Profit share accrued (2)		0		3,048,663
Total profit share	$	4,906	$	3,138,100

(1) At April 1

(2) At June 30

RESULTS OF OPERATIONS

During its operations for the three months ending June 30, 2009, the Partnership experienced no meaningful periods of illiquidity in any of the numerous markets traded by the General Partner.

Due to the nature of the Partnership’s trading, the results of operations for the interim period presented should not be considered indicative of the results that may be expected for the entire year.

17

                        ———————————

                        Periods ended June 30, 2009

                        ———————————

	Total
	Partners'
Month Ending:	Capital
June 30, 2009	$	145,611,711
March 31, 2009		162,146,499
December 31, 2008		167,319,421

	Three months			Six Months
Change in Partners' Capital	$	(16,534,788	)	$	(21,707,710	)
Percent Change		(10.20	)%		(12.97	)%

THREE MONTHS ENDED JUNE 30, 2009

The decrease in the Partnership’s net assets of $16,534,788 was attributable to a net loss of $15,244,602 and withdrawals of $3,582,499, which was partially offset by contributions of $2,292,313.

Brokerage fees are calculated on the net asset value on the last day of each month and are affected by trading performance, subscriptions and redemptions. Brokerage fees for the three months ended June 30, 2009 decreased $101,344 relative to the corresponding period in 2008. The decrease was due primarily to a decrease in the average net assets of the special limited partners and limited partners during the three months ended June 30, 2009 relative to the corresponding period in 2008.

The Partnership pays administrative expenses for legal, audit and accounting services, up to 0.25 of 1% per annum of the Partnership's average month-end net assets.  Administrative expenses for the three months ended June 30, 2009 decreased $8,664 relative to the corresponding period in 2008. The decrease was due mainly to a decrease in the Partnership's average net assets during the three months ended June 30, 2009, relative to the corresponding period in 2008.

Interest income is derived from cash and U.S. Treasury instruments held at the Partnership's brokers and custodian.  Interest income for the three months ended June 30, 2009 decreased $649,368 relative to the corresponding period in 2008. This decrease was due mainly to a decrease in short-term Treasury yields during the three months ended June 30, 2009, relative to the corresponding period in 2008.

During the three months ended June 30, 2009, the Partnership experienced net realized and unrealized losses of $14,937,208 from its trading operations (including foreign exchange translations and U.S. Treasury notes). Brokerage fees of $836,662, administrative expenses of $95,347 and custody fees of $8,382 were incurred. Interest income of $632,997 offset the Partnership's expenses resulting in a net loss after profit share to General Partner of $15,244,602. An analysis of the trading gain (loss) by sector is as follows:

Sector	% Gain/ (Loss)
Currencies		-1.12	%
Energies		-1.14	%
Grains		-0.18	%
Interest Rates		-2.65	%
Livestock		0.04	%
Metals		-1.40	%
Softs		-0.29	%
Stock Indices		-2.18	%
Trading Gain/(Loss)		-8.92	%

18

SIX MONTHS ENDED JUNE 30, 2009

The decrease in the Partnership’s net assets of $21,707,710 was attributable to a net loss (before profit share) of $18,533,351 and withdrawals of $7,655,458, which was partially offset by contributions of $4,481,099.

Brokerage fees are calculated on the net asset value on the last day of each month and are affected by trading performance, subscriptions and redemptions. Brokerage fees for the six months ended June 30, 2009 decreased $87,879 relative to the corresponding period in 2008. The decrease was due primarily to a decrease in the average net assets of the special limited partners and limited partners during the six months ended June 30, 2009 relative to the corresponding period in 2008.

The Partnership pays administrative expenses for legal, audit and accounting services, up to 0.25 of 1% per annum of the Partnership's average month-end net assets.  Administrative expenses for the six months ended June 30, 2009 decreased $6,638 relative to the corresponding period in 2008. The decrease was due mainly to a decrease in the Partnership's average net assets during the six months ended June 30, 2009, relative to the corresponding period in 2008.

Interest income is derived from cash and U.S. Treasury instruments held at the Partnership's brokers and custodian.  Interest income for the six months ended June 30, 2009 decreased $1,537,543 relative to the corresponding period in 2008. This decrease was due mainly to a decrease in short-term Treasury yields during the six months ended June 30, 2009, relative to the corresponding period in 2008.

During the six months ended June 30, 2009, the Partnership experienced net realized and unrealized losses of $17,878,518 from its trading operations (including foreign exchange translations and U.S. Treasury notes). Brokerage fees of $1,769,345, administrative expenses of $200,177, custody fees of $18,441 and an earned profit share of $4,906. Interest income of $1,333,130 offset the Partnership's expenses resulting in a net loss after profit share to General Partner of $18,538,257. An analysis of the trading gain (loss) by sector is as follows:

Sector	% Gain/ (Loss)
Currencies		-2.07	%
Energies		-1.19	%
Grains		-0.20	%
Interest Rates		-2.16	%
Livestock		0.22	%
Metals		-2.37	%
Softs		-0.43	%
Stock Indices		-2.00	%
Trading Gain/(Loss)		-10.20	%

MANAGEMENT DISCUSSION – 2009

Three months ended June 30, 2009.

For the three months ended June 30, 2009, the Parntership’s Limited Partners and Special Limited Partners had returns, net of all fees, of (9.60)% and (8.91)%, respectively.  The trend reversals which had commenced abruptly in mid-March continued in April and May, and were followed in June by volatile non-directional range trading. Consequently losses were sustained in each of the major sectors of the portfolio; interest rates, stock indices, currencies, energy, metals and agricultural commodities.

During April and May, market participants took heart from evidence that the worldwide recession was easing, banking systems were stabilizing, and credit markets were thawing.  As stock markets rallied, losses were generated on existing short positions which were gradually reduced and reversed to long positions by early June.  This stock market action, improving sentiment about the global economy and a willingness of investors to take on more risk weakened the dollar which had been playing a safe haven role during the financial crisis.  Thus, long dollar positions produced losses and were reversed to short dollar positions by the end of May.  The weaker dollar supported commodity prices, as did fears of inflation, improved capital goods orders and signs of improving Chinese demand.  Consequently, losses were registered as short energy, metals, and agricultural positions were being reduced and, in many cases, reversed. The weaker dollar and higher commodity prices combined with the Treasury’s increased borrowing needs and the Fed’s quantitative easing to send interest rates on intermediate and long term government debt markedly higher, even as short rates remained near zero.  Losses were incurred from long note and bond futures; positions which were reduced significantly.

In June, there were no clear pricing trends exhibited in global markets.  The mid-March through May equity and commodity rallies, and dollar falloff began to lose momentum amidst sentiment that prices had gone too far too fast. Moreover, rumors that the Fed might raise rates before the end of the year—which were later deemed premature—sent short term interest rates sharply higher early in the month, producing losses on long positions.

19

Three months ended March 31, 2009.

For the three months ended March 31, 2009, the Parntership’s Limited Partners and Special Limited Partners had negative returns, net of all fees, of 2.31% and 1.56%, respectively. As the year began, the trends which had been dominant since the middle of 2008—declining equities, declining commodities, declining interest rates, and a rising US dollar—persisted and the Partnership posted a moderate gain.  However, in early March, many of these trends reversed abruptly and the Partnership suffered a loss during the final three weeks of the quarter that more than outweighed the earlier gain.  For the quarter, trading of metals, currencies, energy and soft commodities futures was unprofitable while trading of interest rate futures, and to a lesser extent equity and livestock futures was profitable.

For much of the quarter, a profusion of international government interventions failed to allay concerns about the ongoing financial and economic crisis which continued to roil markets. In this environment, the Partnership continued to hold short positions in equity indices worldwide; short positions in most energy, metals, and agricultural commodity markets; long positions in interest rate futures; and long US dollar positions.  Consequently, into early March, as equity and commodity prices fell, and as the dollar rose, the Partnership registered a gain.

However, with equity markets at multi-year lows following six consecutive quarterly drops, some reports suggesting that the economic decline was slowing and perceptions that the latest government interventions might aid the financial system triggered some short covering and bottom fishing, causing stock markets to stage a substantial rally.  As risk aversion decreased and the Federal Reserve announced plans to buy massive amounts of Treasury securities, the dollar lost some of its safe haven cachet and fell.  This dollar decline, coupled with reduced pessimism about the future, arrested the decline in commodity prices.  Interest rates did not respond to these changes and generally continued to decline. As a result, trading of equities, commodities and currencies was highly unprofitable for the month of March, while trading of interest rates provided only a partial offset.

                        ———————————

                        Periods ended June 30, 2008

                        ———————————

Month Ending:	Total Partners' Capital
June 30, 2008	$	172,404,499
March 31, 2008		161,779,900
December 31, 2007		152,036,264

	Three Months			Six Months
Change in Partners' Capital	$	10,624,599		$	20,368,235
Percent Change		6.57	%		13.40	%

THREE MONTHS ENDED JUNE 30, 2008

The increase in the Partnership’s net assets of $10,624,599 was attributable to net income (before profit share) of $14,335,769 and contributions of $2,717,060, which was partially offset by withdrawals of $6,428,230.

Brokerage fees are calculated on the net asset value on the last day of each month and are affected by trading performance, subscriptions and redemptions. Brokerage fees for the three months ended June 30, 2008 decreased $18,443 relative to the corresponding period in 2007. While the average net assets of the Partnership increased during the three month period, the decrease in brokerage fees was due primarily to a decrease in the average net assets of the limited partners during the three months ended June 30, 2008, relative to the corresponding period in 2007.

The Partnership pays administrative expenses for legal, audit and accounting services, up to 0.25 of 1% per annum of the Partnership's average month-end net assets. Administrative expenses for the three months ended June 30, 2008 increased $1,920 relative to the corresponding period in 2007. The increased was due mainly to an increase in the Partnership's average net assets during the three months ended June 30, 2008, relative to the corresponding period in 2007.

20

Interest income is derived from cash and U.S. Treasury instruments held at the Partnership's brokers and custodian. Interest income for the three months ended June 30, 2008 decreased $554,240 relative to the corresponding period in 2007. This decrease was due mainly to a significant decrease in short-term Treasury yields during the three months ended June 30, 2008, relative to the corresponding period in 2007.

During the three months ended June 30, 2008, the Partnership experienced net realized and unrealized gains of $14,102,982 from its trading operations (including foreign exchange translations and U.S. Treasury notes). Brokerage fees of $938,006, administrative expenses of $104,011, custody fees of $7,561 and an accrued profit share allocation to the General Partner of $1,751,971 were incurred. Interest income of $1,282,365 offset the Partnership's expenses resulting in a net gain after profit share to General Partner of $12,583,798 analysis of the trading gain (loss) by sector is as follows:

Sector	% Gain/ Loss
Currencies		2.69	%
Energies		4.86	%
Grains		1.54	%
Interest Rates		-1.29	%
Livestock		-0.43	%
Metals		1.21	%
Softs		-0.25	%
Stock Indices		0.95	%
Trading Gain/(Loss)		9.28	%

SIX MONTHS ENDED JUNE 30, 2008

The increase in the Partnership’s net assets of $20,368,235 was attributable to net income (before profit share) of $25,768,484 and contributions of $6,529,144, which was partially offset by withdrawals of $11,929,393.

Brokerage fees are calculated on the net asset value on the last day of each month and are affected by trading performance, subscriptions and redemptions. Brokerage fees for the six months ended June 30, 2008 increased $43,736 relative to the corresponding period in 2007. The increase was due primarily to an increase in the average net assets of the special limited partners during the six months ended June 30, 2008, relative to the corresponding period in 2007.

The Partnership pays administrative expenses for legal, audit and accounting services, up to 0.25 of 1% per annum of the Partnership's average month-end net assets. Administrative expenses for the six months ended June 30, 2008 increased $12,539 relative to the corresponding period in 2007. The increased was due mainly to an increase in the Partnership's average net assets during the six months ended June 30, 2008, relative to the corresponding period in 2007.

Interest income is derived from cash and U.S. Treasury instruments held at the Partnership's brokers and custodian. Interest income for the six months ended June 30, 2008 decreased $725,224 relative to the corresponding period in 2007. This decrease was due mainly to a significant decrease in short-term Treasury yields during the six months ended June 30, 2008, relative to the corresponding period in 2007.

21

During the six months ended June 30, 2008, the Partnership experienced net realized and unrealized gains of $24,975,355 from its trading operations (including foreign exchange translations and U.S. Treasury notes). Brokerage fees of $1,857,224, administrative expenses of $206,815, custody fees of $13,505 and an accrued profit share allocation to the General Partner of $3,138,100 were incurred. Interest income of $2,870,673 offset the Partnership's expenses resulting in a net gain after profit share to General Partner of $22,630,384 analysis of the trading gain (loss) by sector is as follows:

Sector	% Gain/ Loss
Currencies		5.07	%
Energies		5.65	%
Grains		3.12	%
Interest Rates		0.27	%
Livestock		0.44	%
Metals		1.55	%
Softs		-0.39	%
Stock Indices		0.93	%
Trading Gain/(Loss)		16.64	%

MANAGEMENT DISCUSSION – 2008

Three months ended June 30, 2008

For the three-month period ended June 30, 2008, the Partnership's Limited Partners and Special Limited Partners had positive returns, net of all fees, of 6.84% and 9.01%, respectively. Energy trading accounted for a large portion of the gain, and significant profits were registered from currency, metals, equity, and grain trading as well. Meanwhile, trading of interest rate futures, and to a lesser extent, livestock and soft commodities futures were unprofitable.

Energy prices continued their upward thrust with crude oil hitting successive new all-time highs throughout the second quarter. Strong demand, including fundamental, investment and speculative components, along with low inventories, periodic supply disruptions, and geopolitical uncertainties underpinned energy price surges. Consequently, long positions in crude oil, gasoline, heating oil, kerosene, London gas oil, and natural gas were profitable. Near quarter-end, the high volatility in the energy markets resulted in further significant reductions in energy positions.

In currency trading, the dollar was under pressure due to the ongoing financial and economic turmoil triggered by the housing and mortgage crises and subsequent credit crunch. The easier Federal Reserve monetary policy that has ensued also weighed on the U.S. currency. Therefore, short dollar positions against a number of higher yield currencies including the Aussie and Singapore dollars, Brazilian real and Mexican peso, and Eastern European currencies were profitable. A long dollar trade versus the Korean won also produced a gain. On the other hand, short dollar positions against the New Zealand dollar and Chilean peso were unprofitable, as was a long dollar position against the South African rand. In non-dollar cross rate trading, short euro positions relative to the Eastern European currencies and a long Aussie dollar/short Canadian dollar trade were profitable.

Equity markets declined rather broadly during the quarter and short positions in European and U.S. equity indices generated profits. Meanwhile, long positions in South African, Hong Kong and Chinese indices resulted in losses.

Industrial metals prices were mixed. Short positions in zinc, nickel and lead, and long positions in tin, copper and aluminum were profitable. Long positions in precious metals had no appreciable effect on performance this quarter.

22

In grains, long positions in the soybean complex and corn were profitable, and more than offset the modest loss from trading wheat.

As the quarter began, the portfolio was positioned for a continuation of the lower interest rate trend. However, as inflation concerns spread even though economic activity remained questionable, market participants came to believe that monetary easing was at an end. Hence during April and May losses were sustained on long positions in U.S., European, and Japanese short, medium, and long term interest rate instruments. In response numerous positions were reduced and/or reversed. In June, interest rate trading was profitable largely due to short futures positions but still ended up with a loss for the quarter.

In soft commodities, the losses from trading sugar and cotton outweighed the gains from long cocoa and coffee trades. Short positions in livestock were unprofitable as the market expected herd liquidation due to high feed prices to abate and on positive export news.

Three months ended March 31, 2008

For the three-month period ended March 31, 2008, the Partnership's Limited Partners and Special Limited Partners had positive returns, net of all fees, of 5.60% and 7.69%, respectively. Trading of dollar currency positions, and interest rate, grain, energy, metal and livestock futures were profitable. On the other hand, fractional losses were sustained from trading of cross currency positions, and stock index and soft commodity futures.

As the credit crisis spread and deepened, imperiling growth and employment prospects worldwide, central banks in the developed countries made more money available against a broader range of collateral for longer periods to a wider group of financial firms than ever before. In the U.S., increasing evidence of stress in the economy prompted the Federal Reserve to announce dramatic cuts in the federal funds and discount rates, providing much-needed liquidity and also facilitating a sale of embattled Bear Stearns to J.P. Morgan Chase.

In this environment, the U.S. dollar was under persistent pressure, falling to an all-time low against the euro and multi-year lows against a number of currencies including the yen, Swiss franc, Brazilian real and Columbian peso. As a result, short dollar positions were broadly profitable. Meanwhile, non-dollar cross rate trading was fractionally unprofitable.

As interest rates eased in a number of countries, long positions in U.S., Canadian and Japanese long-term and short-term interest rate futures were profitable, and outweighed losses on short positions in Australian interest rate futures. A long position in short-term euro rate futures was unprofitable as the ECB continued to resist calls for rate reductions due to inflation worries.

Agricultural markets, which have had a legendary run-up with several markets setting all-time records, were quite profitable, even though there was a significant sell-off in March. Grain prices have been underpinned by strong demand from the developing world that is experiencing an economic boom and by tight supplies. The USDA projects U.S. wheat inventories as the lowest for the end of the marketing year since 1948, and global wheat stockpiles headed for a 30-year low. Also, demand for corn and oilseeds was boosted by increased use of ethanol and diesel from vegetable oils. Indeed, some governments are restricting or taxing exports to retain domestic supplies. Consequently, long positions in wheat, corn, and the soybean complex were profitable. Further, short positions in livestock were profitable as high feed prices motivated producer selling.

Energy prices were firm and crude oil prices reached record levels due to strong global demand and tight supplies. The weakening U.S. dollar also buttressed energy and other commodity prices. Long positions in crude and London gas oil led to energy sector profits.

Precious metals prices advanced as the dollar fell, particularly early in the quarter and profits on long positions in gold, silver and platinum outweighed losses from trading of industrial metals.

23

High volatility and lack of well defined persistent trends kept equity futures positions reduced during the quarter, and gains and losses for individual equity futures netted to a marginal loss for the sector.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4.   CONTROLS AND PROCEDURES

Millburn Ridgefield Corporation, the General Partner of the Partnership, with the participation of the General Partner's Co-Chief Executive Officers and Chief Financial Officer, has evaluated the effectiveness of the design and operation of its disclosure controls and procedures with respect to the Partnership as of the end of the period covered by this quarterly report, and, based on their evaluation, have concluded that these disclosure controls and procedures are effective. There were no significant changes in the General Partner's internal controls with respect to the Partnership or in other factors applicable to the Partnership that could materially affect these controls subsequent to the date of their evaluation.

ITEM 4T. CONTROLS AND PROCEDURES

There were no changes in the General Partner's internal control over financial reporting during the quarter ended June 30, 2009 that have materially affected, or are resonably likely to materially affect, the General Partner's internal control over financial reporting with respect to the Partnership.

PART II.  OTHER INFORMATION

ITEM 1.  Legal Proceedings - None

ITEM 2.  Unregistered Sales of Equity Securities and Use of Proceeds

(a)   Pursuant to the Partnership's Declaration of Partnership and Partnership Agreement, the Partnership may sell Limited Partnership Interests ("Interests") at the beginning of each calendar month. April 1, 2009, the Partnership sold Interests to existing and new limited partners in the amount of $2,275,800. On April 1, 2009, May 1, 2009 and June 1, 2009 the Partnership sold Interests to an existing special limited partner in the amount of $11,086, $3,765 and $1,662, respectively. There were no underwriting discounts or commissions in connection with the sales of the Interests described above.

(c)  Pursuant to the Partnership's Declaration of Partnership and  Partnership Agreement, investors may redeem their Interests at the end of each calendar month at the then current month-end Net Asset Value. The redemption of Interests has no impact on the value of Interests that remain outstanding, and Interests are not reissued once redeemed.

The following table summarizes Interests redeemed during the three months ended June 30, 2009:

Date of Withdrawal	Limited Partners			Special  Limited Partners			Total
April 30, 2009	$	(1,012,523	)	$	(70,000	)	$	(1,082,523	)
May 31, 2009		(200,989	)		-			(200,989	)
June 30, 2009		(2,278,987	)		(20,000	)		(2,298,987	)
Total	$	(3,492,499	)	$	(90,000	)	$	(3,582,499	)

ITEM 3.  Defaults Upon Senior Securities - None

ITEM 4.  Submission of Matters to a Vote of Security Holders - None

ITEM 5.  Other Information - None

ITEM 6.  (a) Exhibits -

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The following exhibits are incorporated by reference from the exhibit of the same number and description filed with the Partnership's Registration Statement (file # 000-50725) filed on April 29, 2005 on Form 10 under the Securities Act of 1934 and declared effective June 28, 2005.

3.01 Amended and Restated Certificate of Limited Partnership of Nestor Partners

3.02 Amended and Restated Agreement of Limited Partnership of Nestor Partners

10.01 Acknowledgement of Separate Risk Disclosure Statements and Customer Agreement between Merrill Lynch Futures Inc. and Nestor Partners

10.02 Customer Agreement between Warburg Dillon Reed LLC and Nestor Partners

10.03 Futures and Options Agreement for Institutional Customers between Deutsche Morgan Grenfell Inc. and Nestor Partners

10.04 Form of Selling Agreement

The following exhibits are included herewith:

31.01 Rule 13(a)-14(a)/15(d)-14(a) Certification of Co-Chief Executive Officer

31.02 Rule 13(a)-14(a)/15(d)-14(a) Certification of Co-Chief Executive Officer

31.03 Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Financial Officer

32.01 Section 1350 Certification of Co-Chief Executive Officer

32.02 Section 1350 Certification of Co-Chief Executive Officer

32.03 Section 1350 Certification of Chief Financial Officer

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

By:  Millburn Ridgefield Corporation,
General Partner
Date: August 14, 2009
	/s/Tod A. Tanis
	Tod A. Tanis
	Vice-President
	(principal accounting officer)

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