SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarter Ended September 30, 2005
--------------
Commission File Number 0-25585
-------
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
-------------------------------------
(Exact name of registrant)
Delaware 74-2849862
- ----------------------- ------------------------------------
(State of Organization) (I.R.S. Employer Identification No.)
ProFutures, Inc.
11719 Bee Cave Road
Suite 200
Austin, Texas 78738
---------------------------------------
(Address of principal executive office)
Registrant's telephone number
(800) 348-3601
-----------------
Indicate by check mark whether the registrant (1) has 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 is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes
No X
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
STATEMENTS OF FINANCIAL CONDITION
September 30, 2005 (Unaudited) and December 31, 2004 (Audited)
-----------------
September 30, December 31,
2005 2004
---- ----
ASSETS
Equity in broker trading accounts
Cash $ 5,016,235 $ 7,486,415
Option premiums (received) (40,838) (60,712)
Unrealized gain on open contracts 42,299 295,523
--------------------- --------------------
Deposits with broker 5,017,696 7,721,226
Cash 3,289 3,339
Other assets 2,919 0
--------------------- --------------------
Total assets $ 5,023,904 $ 7,724,565
===================== ====================
LIABILITIES
Accounts payable $ 21,429 $ 20,134
Commissions and other trading fees
on open contracts 962 3,762
Incentive fees payable 14,463 71,102
Management fees payable 17,409 25,575
Redemptions payable 181,498 194,405
--------------------- --------------------
Total liabilities 235,761 314,978
--------------------- --------------------
PARTNERS' CAPITAL (Net Asset Value)
General Partner - 61 units outstanding
at September 30, 2005 and December 31, 2004 62,333 71,243
Limited Partners - 4,659 and 6,329 units
outstanding at September 30, 2005 and
December 31, 2004 4,725,810 7,338,344
--------------------- --------------------
Total partners' capital
(Net Asset Value) 4,788,143 7,409,587
--------------------- --------------------
$ 5,023,904 $ 7,724,565
===================== ====================
See accompanying notes.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
CONDENSED SCHEDULES OF INVESTMENTS
September 30, 2005 (Unaudited) and December 31, 2004 (Audited)
-----------------
September 30, 2005 December 31, 2004
------------------ -----------------
% of Net % of Net
LONG FUTURES CONTRACTS Value Asset Value Value Asset Value
- ---------------------- ----- ----------- ----- -----------
Agricultural $ 7,046 0.15% $ 76,976 1.04%
Currency 6,140 0.13% (29,489) (0.40)%
Energy 1,470 0.03% 0 0.00%
Interest rate (23,682) (0.49)% 14,110 0.19%
Metal (12,787) (0.27)% 139,404 1.88%
Stock index 0 0.00% 144,914 1.96%
--------------- --------------- --------------- --------------
Total long futures contracts $ (21,813) (0.45)% $ 345,915 4.67%
=============== =============== =============== ==============
SHORT FUTURES CONTRACTS
- -----------------------
Agricultural $ 2,492 0.05% $ 335 0.00%
Currency 19,063 0.40% 0 0.00%
Energy 0 0.00% 61,300 0.83%
Interest rate 5,766 0.12% 2,430 0.03%
Metal 28,016 0.58% (137,157) (1.85)%
--------------- --------------- --------------- --------------
Total short futures contracts $ 55,337 1.15% $ (73,092) (0.99)%
=============== =============== =============== ==============
Total futures contracts $ 33,524 0.70% $ 272,823 3.68%
=============== =============== =============== ==============
WRITTEN OPTIONS ON FUTURES CONTRACTS
- ------------------------------------
Stock index options $ (32,063) (0.67)% $ (37,700) (0.51)%
Currency options 0 0.00% (312) 0.00%
--------------- --------------- --------------- --------------
Total written options on futures
contracts (premiums received-
$40,838 and $60,712) $ (32,063) (0.67)% $ (38,012) (0.51)%
=============== =============== =============== ==============
See accompanying notes.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
STATEMENTS OF OPERATIONS
For the Three Months and Nine Months Ended September 30, 2005 and 2004
(Unaudited)
-------------------
Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
---- ---- ---- ----
TRADING GAINS (LOSSES)
Gain (loss) from trading
Realized $ (129,611) $ (286,323) $ (309,097) $ (43,062)
Change in unrealized (258,728) 813,164 253,224 485,805
Brokerage commissions (14,844) (50,142) (101,005) (177,307)
-------------- -------------- ------------- ------------
Total trading gains (losses)
(403,183) 476,699 (663,326) 265,436
-------------- -------------- ------------- ------------
NET INVESTMENT (LOSS)
Income 0 0
Interest income 42,465 28,537 124,617 71,336
-------------- -------------- ------------- ------------
Expenses
Incentive fees 14,463 57,218 56,661 196,965
Management fees 35,737 50,581 123,260 160,123
Operating expenses 28,684 26,835 111,485 87,409
-------------- -------------- ------------- ------------
Total expenses 78,884 134,634 291,406 444,497
-------------- -------------- ------------- ------------
Net investment (loss) (36,419) (106,097) (166,789) (373,161)
-------------- -------------- ------------- ------------
NET INCOME (LOSS) $ (439,602) $ 370,602 $ (830,115) $ (107,725)
============== ============== ============= ============
NET INCOME (LOSS) PER GENERAL
AND LIMITED PARTNER UNIT
(based on weighted average number of
units outstanding during the period of
5,083, 7,284, 5,694 and 7,634,
respectively) $ (86.48) $ 50.88 $ (145.79) $ (14.11)
============== ============== ============= ============
INCREASE (DECREASE) IN NET
ASSET VALUE PER GENERAL
AND LIMITED PARTNER UNIT $ (87.14) $ 52.14 $ 145.01 $ (10.57)
============== ============== ============= ============
See accompanying notes.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (NET ASSET VALUE)
For the Six Months Ended September 30, 2005 and 2004
(Unaudited)
-----------------
Total
Number of Partners' Capital
-------------------------------------------------------
Units General Limited Total
------------------ ---------------- -------------- ---------------
Balances at
December 31, 2004 6,390 $ 71,243 $ 7,338,344 $ 7,409,587
Net (loss) for the nine months
ended September 30, 2005 (8,910) (821,205) (830,115)
Redemptions (1,670) 0 (1,791,329) (1,791,329)
------------------ ---------------- -------------- ---------------
Balances at
September 30, 2005 4,720 $ 62,333 $ 4,725,810 $ 4,788,143
================== ================ ============== ===============
Balances at
December 31, 2003 8,210 $ 66,976 $ 8,882,156 $ 8,949,132
Net (loss) for the nine months
ended September 30, 2004 (649) (107,076) (107,725)
Redemptions (1,263) 0 (1,341,860) (1,341,860)
------------------ ---------------- -------------- ---------------
Balances at
September 30, 2004 6,947 $ 66,327 $ 7,433,220 $ 7,499,547
================== ================ ============== ===============
Net Asset Value Per Unit
-----------------------------------------------------------------------------
September 30, December 31, September 30, December 31,
2005 2004 2004 2003
------------------- --------------- --------------- ----------------
$ 1,014.52 $ 1,159.53 $ 1,079.51 $ 1,090.08
=================== =============== =============== ================
See accompanying notes.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
-------------------
Note 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
-----------------------------------------------------------
A. General Description of the Partnership
ProFutures Long/Short Growth Fund, L.P. (the Partnership) is a
Delaware limited partnership which operates as a commodity
investment pool. The Partnership engages in the speculative
trading of futures contracts and options on futures contracts.
B. Regulation
As a registrant with the Securities and Exchange Commission,
the Partnership is subject to the regulatory requirements under
the Securities Act of 1933 and the Securities Exchange Act of
1934. As a commodity investment pool, the Partnership is
subject to the regulations of the Commodity Futures Trading
Commission, an agency of the U.S. government which regulates
most aspects of the commodity futures industry; rules of the
National Futures Association, an industry self-regulatory
organization; and the requirements of commodity exchanges and
Futures Commission Merchants (brokers) through which the
Partnership trades.
C. Method of Reporting
The Partnership's financial statements are presented in
accordance with accounting principles generally accepted in the
United States of America, which require the use of certain
estimates made by the Partnership's management. Transactions
are accounted for on the trade date. Gains or losses are
realized when contracts are liquidated. Unrealized gains or
losses on open contracts (the difference between contract trade
price and quoted market price) are reflected in the statement
of financial condition as a net gain or loss, as there exists a
right of offset of unrealized gains or losses in accordance
with Financial Accounting Standards Board Interpretation No. 39
- "Offsetting of Amounts Related to Certain Contracts." Any
change in net unrealized gain or loss from the preceding period
is reported in the statement of operations.
For purposes of both financial reporting and calculation of
redemption value, Net Asset Value Per Unit is calculated by
dividing Net Asset Value by the total number of units
outstanding.
D. Brokerage Commissions
Brokerage commissions include other trading fees and are
charged to expense when contracts are opened.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
-------------------
E. Income Taxes
The Partnership prepares calendar year U.S. and applicable
state information tax returns and reports to the partners their
allocable shares of the Partnership's income, expenses and
trading gains or losses.
F. Foreign Currency Transactions
The Partnership's functional currency is the U.S. dollar;
however, it transacts business in currencies other than the
U.S. dollar. Assets and liabilities denominated in currencies
other than the U.S. dollar are translated into U.S. dollars at
the rates in effect at the date of the statement of financial
condition. Income and expense items denominated in currencies
other than the U.S. dollar are translated into U.S. dollars at
the rates in effect during the period. Gains and losses
resulting from the translation to U.S. dollars are reported in
income currently.
G. Statements of Cash Flows
The Partnership has elected not to provide statements of cash
flows as permitted by Statement of Financial Accounting
Standards No. 102 - "Statement of Cash Flows - Exemption of
Certain Enterprises and Classification of Cash Flows from
Certain Securities Acquired for Resale."
H. Interim Financial Statements
In the opinion of management, the unaudited interim financial
statements reflect all adjustments, which were of a normal and
recurring nature, necessary for a fair presentation of
financial position as of September 30, 2005, and the results of
operations for the three months and nine months ended September
30, 2005 and 2004.
Note 2. GENERAL PARTNER
---------------
The General Partner of the Partnership is ProFutures, Inc., which
conducts and manages the business of the Partnership. The Limited
Partnership Agreement requires the General Partner and/or its
principals and affiliates to maintain capital accounts equal to at
least 1% of the total capital of the Partnership. At September 30,
2005 and December 31, 2004, the capital accounts of the General
Partner and/or its principals and affiliates totaled $436,362 and
$608,685, respectively.
The Limited Partnership Agreement was amended effective February 16,
1999 and generally requires that the General Partner maintain a net
worth of up to $1,000,000.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
-------------------
Effective October 22, 2004, ProFutures, Inc. has a callable stock
subscription agreement with Man Financial Inc. (MFI), the
Partnership's broker, whereby MFI has subscribed to purchase (up to
$7,000,000, subject to conditions set forth in the stock
subscription agreement dated October 22, 2004) the number of shares
of common stock of ProFutures, Inc. necessary to maintain the
General Partner's net worth requirements. Prior to October 22, 2004,
ProFutures, Inc. had a callable stock subscription agreement with
ABN AMRO Incorporated (ABN), the Partnership's prior broker, whereby
ABN had subscribed to purchase (up to $7,000,000, subject to the
conditions set forth in the stock subscription agreement as amended
effective May 20, 2002) the number of shares of common stock of
ProFutures, Inc. necessary to maintain the General Partner's net
worth requirements.
The Partnership pays the General Partner a monthly management fee
equal to 1/6 of 1% (2% annually) of month-end Net Assets (as defined
in the Limited Partnership Agreement).
Total management fees earned by ProFutures, Inc. for the nine months
ended September 30, 2005 and 2004 were $92,309 and $121,530,
respectively. Such management fees earned for the three months ended
September 30, 2005 and 2004 were $26,624 and $37,888, respectively.
Management fees payable to ProFutures, Inc. as of September 30, 2005
and December 31, 2004 were $8,297 and $12,695, respectively.
Note 3. COMMODITY TRADING ADVISORS
--------------------------
The Partnership has advisory contracts with several commodity
trading advisors to furnish investment management services to the
Partnership. Certain advisors receive management fees equal to 1%
annually of Allocated Net Asset Value (as defined in each respective
trading advisory contract). In addition, the trading advisors
receive quarterly incentive fees ranging from 20% to 25% of Trading
Profits (as defined). Total management fees earned by the trading
advisors for the nine months ended September 30, 2005 and 2004
amounted to $30,951 and $38,593, respectively. Such management fees
earned by the trading advisors for the three months ended September
30, 2005 and 2004 were $9,113 and $12,693, respectively.
Note 4. DEPOSITS WITH BROKER
--------------------
The Partnership deposits funds with MFI (ABN prior to October 2004)
to act as broker, subject to Commodity Futures Trading Commission
regulations and various exchange and broker requirements. The
Partnership earns interest income on its assets deposited with the
broker.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
-------------------
At September 30, 2005 and December 31, 2004, the initial margin
requirement of $867,440 and $2,049,867, respectively, is satisfied
by the deposit of cash with the broker.
Note 5. SUBSCRIPTIONS, DISTRIBUTIONS AND REDEMPTIONS
--------------------------------------------
Investments in the Partnership were made by subscription agreement,
subject to acceptance by the General Partner. Effective November
2000, the Partnership is closed to new investment; however, the
General Partner may reopen the Partnership to new investments in the
future.
The Partnership is not required to make distributions, but may do so
at the sole discretion of the General Partner. A Limited Partner may
require the Partnership to redeem any or all of such Limited
Partner's units at Net Asset Value as of the close of business on
the last day of any month upon advance written notice to the General
Partner. The Limited Partnership Agreement contains a complete
description of the Partnership's redemption policies and procedures.
Note 6. TRADING ACTIVITIES AND RELATED RISKS
------------------------------------
The Partnership engages in the speculative trading of U.S. and
foreign futures contracts and options on U.S. and foreign futures
contracts (collectively, "derivatives"). The Partnership is exposed
to both market risk, the risk arising from changes in the market
value of the contracts, and credit risk, the risk of failure by
another party to perform according to the terms of a contract.
Purchase and sale of futures and options on futures contracts
requires margin deposits with the broker. Additional deposits may be
necessary for any loss on contract value. The Commodity Exchange Act
requires a broker to segregate all customer transactions and assets
from such broker's proprietary activities. A customer's cash and
other property (for example, U.S. Treasury bills) deposited with a
broker are considered commingled with all other customer funds
subject to the broker's segregation requirements. In the event of a
broker's insolvency, recovery may be limited to a pro rata share of
segregated funds available. It is possible that the recovered amount
could be less than total cash and other property deposited.
Open contracts generally mature within three months, however, the
Partnership intends to close all contracts prior to maturity. At
September 30, 2005, the latest maturity date for open contracts is
March 2006.
For derivatives, risks arise from changes in the market value of the
contracts. Theoretically, the Partnership is exposed to a market
risk equal to the notional contract value of futures contracts
purchased and unlimited liability on such contracts sold short. As
both a buyer and seller of options, the Partnership pays or
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
-------------------
receives a premium at the outset and then bears the risk of
unfavorable changes in the price of the contract underlying the
option. Written options expose the Partnership to potentially
unlimited liability, and purchased options expose the Partnership to
a risk of loss limited to the premiums paid.
The Partnership has assets on deposit with a financial institution
in connection with its cash management activities. In the event of a
financial institution's insolvency, recovery of Partnership assets
on deposit may be limited to account insurance or other protection
afforded such deposits.
The General Partner has established procedures to actively monitor
market risk and minimize credit risk, although there can be no
assurance that it will, in fact, succeed in doing so. The General
Partner's basic market risk control procedures consist of
continuously monitoring the trading activity of the various trading
advisors, with the actual market risk controls being applied by the
advisors themselves. The General Partner seeks to minimize credit
risk primarily by depositing and maintaining the Partnership's
assets at financial institutions and brokers which the General
Partner believes to be creditworthy. The Limited Partners bear the
risk of loss only to the extent of the market value of their
respective investments and, in certain specific circumstances,
distributions and redemptions received.
Note 7. GUARANTEES
----------
In the normal course of business, the Partnership enters into
contracts and agreements that contain a variety of representations
and warranties and which provide general indemnifications. The
Partnership's maximum exposure under these arrangements is unknown,
as this would involve future claims that may be made against the
Partnership that have not yet occurred. The Partnership expects the
risk of any future obligation under these indemnifications to be
remote.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
--------------
Note 8. FINANCIAL HIGHLIGHTS
--------------------
The following information presents per unit operating performance
data and other supplemental financial data for the three months and
nine months ended September 30, 2005 and 2004. This information has
been derived from information presented in the financial statements.
Three months ended Nine months ended
September 30, September 30,
2005 2004 2005 2004
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------- ----------- ----------- -----------
Per Unit Performance
(for a unit outstanding throughout the entire period)
-----------------------------------------------------
Net asset value per unit at beginning of period $1,101.66 $1,027.37 $1,159.53 $1,090.08
--------- --------- --------- ---------
Income (loss) from operations:
Total trading gains (losses) (1) (79.97) 66.70 (115.72) 38.31
Net investment (loss) (1) (7.17) (14.56) (29.29) (48.88)
------------- ------------ ------------ ------------
Total income (loss) from operations (87.14) 52.14 (145.01) (10.57)
------------ ------------ ------------ ------------
Net asset value per unit at end of period $1,014.52 $1,079.51 $1,014.52 $1,079.51
========= ========= ========= =========
Total Return (3) (7.91)% 5.08 % (12.51)% (0.97)%
========= ========= ======== =========
Supplemental Data
Ratios to average net asset value:
Expenses prior to incentive fees (4) 5.02 % 4.18 % 5.27 % 4.16 %
Incentive fees (3) 0.28 % 0.77 % 0.95 % 2.48 %
--------- --------- --------- ---------
Total expenses 5.30 % 4.95 % 6.22 % 6.64 %
========= ========= ========= =========
Net investment (loss) (2), (4) (1.71)% (2.64)% (2.47)% (2.96)%
========= ========= ========= =========
Total returns are calculated based on the change in value of a unit during the
period. An individual partner's total returns and ratios may vary from the
above total returns and ratios based on the timing of redemptions.
- --------------------
(1) The net investment (loss) per unit is calculated by dividing the net
investment (loss) by the average number of units outstanding during the
period. Total trading gains (losses) is a balancing amount necessary to
reconcile the change in net asset value per unit with the other per unit
information. Such balancing amount may differ from the calculation of
total trading gains (losses) per unit due to the timing of trading gains
and losses during the period relative to the number of units outstanding.
(2) Excludes incentive fees.
(3) Not annualized.
(4) Annualized.
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 conjunction
with, the following analysis.
Critical Accounting Policies
----------------------------
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expense during the
reporting period. Management believes that the estimates utilized in
preparing the financial statements are reasonable and prudent;
however, actual results could differ from those estimates. The
Partnership's significant accounting policies are described in
detail in Note 1 to the Financial Statements.
The Partnership records all investments at fair value in its
financial statements, with changes in fair value reported as a
component of realized and change in unrealized trading gain (loss)
in the Statements of Operations. Generally, fair values are based on
market prices; however, in certain circumstances, estimates are
involved in determining fair value in the absence of an active
market closing price (e.g., swap and forward contracts which are
traded in the inter-bank market).
A. LIQUIDITY: Substantially all of the Partnership's assets are
highly liquid, such as cash and open futures and option contracts.
It is possible that extreme market conditions or daily price
fluctuation limits at exchanges could adversely affect the liquidity
of open futures contracts. There are no restrictions on the
liquidity of these assets except for amounts on deposit with the
broker needed to meet margin requirements on open futures contracts.
B. CAPITAL RESOURCES: Since the Partnership's business is the
purchase and sale of various commodity interests, it will make few,
if any, capital expenditures.
The Partnership raises additional capital only through the sale of
Units and trading profits (if any) and does not engage in borrowing.
The Partnership sells no securities other than the Units. Effective
November 2000, the Partnership is closed to new investment; however,
the General Partner may reopen the Partnership to new investments in
the future.
C. RESULTS OF OPERATIONS: The Partnership's net income for the nine
months ended September 30, 2005 and 2004 totaled:
2005 2004
---- ----
Three months ended March 31 $(470,368) $154,214
Three months ended June 30 $79,855 $(632,541)
Three months ended September 30 $(439,602) $370,602
---------- --------
Nine months ended September 30 $(830,115) $(107,725)
========== ==========
At September 30, 2005, partners' capital totaled $4,788,143, a net
decrease of $2,621,444 from December 31, 2004, due to redemptions of
Units and a net loss for the nine months ended September 30, 2005.
At September 30, 2004, partners' capital totaled $7,499,547, a net
decrease of $1,449,585 from December 31, 2003, due to redemptions of
Units exceeding net income for the nine months ended September 30,
2004.
Effective September 12, 2005, the General Partner dismissed Meyer
Capital Management, Inc. as a commodity trading advisor for the
Partnership and subsequently engaged Tuscon Management, LLC as a
commodity trading advisor for the Partnership effective October 1,
2005.
Third Quarter 2005
------------------
Some of the previous trends in the commodity markets continued in
the third quarter. Interest rates and energy were especially
volatile. The Partnership had significant losses in interest rates.
Partnership had a loss of 5.46% in July. The Partnership had gains
in base metals, foreign currencies and stock indices. There were
losses in almost all other sectors, including large losses in
interest rates, with smaller losses in precious metals, energy and
certain agricultural commodities.
Partnership had a gain of 3.74% in August. The Partnership had large
gains in energy, with smaller gains in stock indices, metals and
interest rates. There were losses in agriculture and foreign
currencies.
Partnership had a loss of 6.11% in September. The Partnership had
some gains in stock indices and foreign currencies. There were large
losses in energy and interest rates, with smaller losses in metals
and certain agricultural commodities.
Overall, the Partnership ended the quarter with a loss.
Second Quarter 2005
-------------------
The second quarter of 2005 saw some trends emerge in the commodity
markets that the Partnership's traders were able to capitalize on
nicely. Interest rates and the U.S. dollar trades were especially
profitable. Oil prices continued to be volatile.
The Partnership had a loss of 2.85% in April. The Partnership had
losses in energy, stock indices, metals and certain agricultural
commodities. There were large gains in interest rates (especially
bonds), but they were not enough to offset the losses in other
sectors.
The Partnership had a gain of 3.47% in May. The Partnership had
large gains in interest rates, with smaller gains in foreign
currencies, equities and energy. There were some small losses in
agriculture and metals.
The Partnership had a gain of 0.96% in June. The Partnership had
large gains in interest rates and equities, with smaller gains in
currencies and precious metals. There were losses in base metals,
energy and certain agricultural commodities.
The Partnership ended the quarter with a small gain.
First Quarter 2005
------------------
The first quarter of 2005 was an especially volatile one for oil
prices and for interest rates. Oil prices continue to climb, and
then drop. Short-term interest rates climbed as the Fed continued
its policy of raising short-term rates.
The Partnership had a loss of 3.25% in January. For the month, the
Partnership had gains in stock indices, interest rates and certain
agricultural commodities. There were large losses in foreign
currencies and metals, with smaller losses in energy.
The Partnership had a loss of 1.80% in February. For the month, the
Partnership had gains in stock indices, metals and energy. These
gains were offset by large losses in agricultural commodities and
bonds.
The Partnership had a loss of 1.47% in March. For the month, the
Partnership had large gains in energy, with only marginal gains in
interest rates. There were losses in foreign currencies,
agricultural commodities and metals.
The Partnership ended the quarter with a loss.
Third Quarter 2004
------------------
The economy continued to grow in the third quarter of 2004, though
at a slower pace. The economic news was a little more mixed, with
both good news and not-so-good news. Overall though, the growth is
continuing, though rising oil prices, trading above $50 a barrel,
could put a damper on things in the coming months.
The Partnership had a gain of 1.14% in July 2004. It was once again
a very difficult month in the markets, especially for trend
followers, though the Partnership did manage a small gain. The
Partnership had large gains in energy, with smaller gains in
agricultural commodities and metals. There were losses in equities,
foreign currencies and interest rates.
The Partnership had a loss of 3.98% for August 2004. The Partnership
had gains in bonds, interest rates and equities. There were losses
mainly in foreign currencies, energy, metals and agricultural
commodities.
The Partnership had a gain of 8.20% in September 2004. The
Partnership had large gains in energy, capitalizing on surging oil
prices. There were also large gains in base metals, with smaller
gains in equities and foreign currencies. There were some losses in
agricultural commodities, interest rates and precious metals.
The Partnership ended the third quarter of 2004 with a gain of 5.08%
and a loss of (0.97)% for the nine months ended September 30, 2004.
The majority of the Partnership's trading gains were in the energy,
equity and metals market sectors, offset by losses in the
agricultural, interest rates and foreign currencies market sectors.
Second Quarter 2004
-------------------
The economic recovery continued in the second quarter of 2004, and
most economic news was positive, though there was a little slowdown
in June. The futures markets were again volatile, especially in
energy, interest rates and currencies.
The Partnership had a loss of 5.63% in April 2004. There were gains
in interest rates, equities and energy. However, these were offset
by losses in metals, foreign currencies and agriculture.
The Partnership had a gain of 1.80% in May 2004. There were gains in
energy, interest rates and metals. There were losses in agriculture,
equities and foreign
currencies. Clarke Capital had a stellar month, up nearly 9%, which
was partially offset by losses from Meyer Capital.
The Partnership had a loss of 3.67% in June 2004. There were losses
in all sectors except equities. The largest losses were in foreign
currencies and energy.
Overall, the Partnership's total return was (7.46)% for the quarter
and (5.75)% for the six months ended June 30, 2004. The majority of
the Partnership's trading gains were in the energy sector and the
largest loss was in agricultural commodities.
First Quarter 2004
------------------
The economy continued to improve in the first quarter of 2004, and
most economic news was positive. The futures markets continued to be
volatile, especially energy and currencies.
The Partnership had a loss of 1.79% in January 2004. There were
gains in stock indexes, metals and energy. These were offset by
losses in agricultural commodities, foreign currencies and interest
rates.
The Partnership had a gain of 1.92% in February 2004. There were
large gains in stock indexes, with smaller gains in interest rates,
metals, energy and grains. There were some losses in agricultural
commodities and foreign currencies.
The Partnership had a gain of 1.75% in March 2004. There were gains
in metals, interest rates and equities, with smaller gains in
certain agricultural commodities. There were some losses in energy
and foreign currencies.
Overall, the Partnership ended the quarter with a total return of
1.84%. The majority of the trading gains were in equities and metals
and the largest loss was in foreign currencies.
Market and Credit Risk
----------------------
The General Partner has established procedures to actively monitor
market risk and minimize credit risk, although there can be no
assurance that it will, in fact, succeed in doing so. The General
Partner's basic market risk control procedures consist of
continuously monitoring the trading activity of the various advisors
with the actual market risk controls being applied by the advisors
themselves. The General Partner seeks to minimize credit risk
primarily by depositing and maintaining the Partnership's assets at
financial institutions and brokers which the General Partner
believes to be creditworthy. The Limited Partners bear the risk of
loss only to the extent of the market value of their respective
investments and, in certain specific circumstances, distributions
and redemptions received.
Due to the speculative nature of trading derivatives, the
Partnership's income or loss from operations may vary widely from
period to period. Management cannot predict whether the
Partnership's future Net Asset Value per Unit will increase or
experience a decline.
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
D. POSSIBLE CHANGES: The General Partner reserves the right to
terminate certain and/or engage additional trading advisors or
change any of the Partnership's clearing arrangements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not Applicable.
Item 4. Controls and Procedures
ProFutures, Inc., as General Partner of ProFutures Long/Short Growth
Fund, L.P., with the participation of the General Partner's
President and Chief Financial Officer, has evaluated the
effectiveness of the design and operation of its disclosure controls
and procedures (as defined in the Securities Exchange Act of 1934
Rules 13a-15(e) or 15d-15(e)) with respect to the Partnership as of
the end of the period covered by this quarterly report. Based on
their evaluation, the President and Chief Financial Officer have
concluded that these disclosure controls and procedures are
effective. There were no changes in the General Partner's internal
control over financial reporting applicable to the Partnership
identified in connection with the evaluation required by paragraph
(d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the
last fiscal quarter that have materially affected, or are reasonably
likely to materially affect, internal control over financial
reporting applicable to the Partnership.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
(c) Pursuant to the Partnership's Limited Partnership Agreement,
partners may redeem their Limited Partnership Units at the end of
each calendar month at the then current Net Asset Value per Unit.
The redemption of Units has no impact on the value of Units that
remain outstanding, and Units are not reissued once redeemed.
The following table summarizes the redemptions by partners during
the three months ended September 30, 2005:
MONTH UNITS REDEEMED NAV PER UNIT
----- -------------- ------------
July 31, 2005 139.8602 $1,041.50
August 31, 2005 206.3703 $1,080.50
September 30, 2005 178.9005 $1,014.52
--------
TOTAL 525.1310
========
Item 3. Defaults Upon Senior Securities.
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits
Exhibits filed herewith:
31.01 Certification of Gary D. Halbert, President, pursuant to
Rules 13a-14 and 15d-14 of the Securities Exchange Act
of 1934.
31.02 Certification of Debi B. Halbert, Chief Financial Officer,
pursuant to Rules 13a-14 and 15d-14 of the Securities
Exchange Act of 1934.
32.01 Certification of Gary D. Halbert, President, pursuant to 18
U.S.C. Section 1350 as enacted by Section 906 of The
Sarbanes-Oxley Act of 2002.
32.02 Certification of Debi B. Halbert, Chief Financial Officer,
pursuant to 18 U.S.C. Section 1350 as enacted by Section 906
of The Sarbanes-Oxley Act of 2002.
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.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
(Registrant)
November 14, 2005 By /s/ GARY D. HALBERT
- ----------------- --------------------------------------------
Date Gary D. Halbert, President and Director
ProFutures, Inc.
General Partner
November 14, 2005 By /s/ DEBI B. HALBERT
- ----------------- --------------------------------------------
Date Debi B. Halbert, Chief Financial Officer,
Treasurer and Director
ProFutures, Inc.
General Partner