UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly period ended December 31, 2001
Commission File Number: 2-73692
The Balanced Opportunity Fund L.P.
(Exact name of registrant as specified in its charter)
Illinois 36-3655854
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification No.)
Registrant's telephone number, including area code: (312) 460-9200
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_____
Page 1 of 9
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The Balanced Opportunity Fund L.P.
Index
Page
Part I - Financial Information
Item 1. Financial Statements
Statements of Financial Condition
as of December 31, 2001 and June 30, 2001 3
Statements of Operations for the three
month and six month periods ended December 31, 2001
and 2000 4
Notes to Financial Statements - December 31, 2001 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
Part II - Other Information 7
Item 3. Exhibits and Reports on Form 8-K 7
Signatures 8
2
Part I. Financial Information
Item 1. Financial Statements
The Balanced Opportunity Fund
Statement of Financial Condition
(Unaudited)
December 31, June 30,
2001
Assets
2001
Equity in futures and forward trading accounts:
Cash $ 57,315 $ 150,979
Net unrealized gain(loss) on open
contracts 17,019 (11,530)
Total equity in futures and
forward trading account 74,334 139,449
Guaranteed yield pool, at market 1,329,328 1,271,109
Other receivable 81 402
Total Assets $1,403,743 $1,410,960
Liabilities and Partners' Capital
Liabilities:
Accrued administrative expenses $ 13,367 $ 17,883
Accrued brokerage commission and fees 6,730 2,892
Accrued management fees 1,159 1,174
Redemption payable - 3,842
21,256 25,791
Partners' Capital
Limited Partners (units outstanding: 589; 610) 1,163,075 1,171,733
General Partner (units outstanding : 111) 219,413 213,436
1,382,488 1,385,169
Total Liabilities and Partners' Capital $1,403,743 $1,410,960
Net Asset Value per Unit, Limited Partners $1,974.66 $1,920.87
Net Asset Value per Unit, General Partners $1,974.66 $1,920.87
See note to the unaudited financial statements
3
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The Balanced Opportunity Fund L.P.
Statement of Operations
(Unaudited)
Three Months Ended Six Months Ended
December 31 December 31
2001 2000 2001 2000
Investment income
Interest $ 21,130 $ 21,970 $ 41,909 $ 47,897
Unrealized market value
gain (loss) (4,566) 19,567 18,289 17,661
Interest Income 372 3,043 1,214 6,282
Total income 16,936 44,580 61,412 71,840
Expenses
Brokerage commissions 14,174 16,235 28,655 34,309
Management fees 3,479 3,930 6,970 8,350
Other administrative expenses 18,000 18,000 36,000 36,000
Total expenses 35,653 38,165 71,625 78,659
Net investment income (loss) (18,717) 6,415 (10,213) (6,819)
Realized and unrealized gain
(loss) from investments
and foreign currency:
Net realized gain (loss) from
futures trading 94,101 (12,685) 21,874 34,958
Net realized gain (loss) from
foreign currency transactions (1,622) (455) (1,902) (1,119)
92,479 (13,140) 19,972 33,839
Net increase (decrease) in
unrealized
appreciation (depreciation)
on open futures positions (57,793) 108,146 28,549 58,046
Net realized and unrealized
gain (loss) from
investments and foreign
currency 34,686 95,006 48,521 91,885
Net increase in net assets
resulting from operations $ 15,969 $ 101,421 $ 38,308 $ 85,066
Net Income Allocated To:
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Limited Partners $ 13,161 $ 87,600 $ 32,331 $ 73,152
General Partners $ 2,535 $ 13,821 $ 5,977 $ 11,914
Net Income per unit
outstanding for entire period
Limited Partners $ 22.81 $ 124.73 $ 53.35 $ 104.21
General Partners $ 22.81 $ 124.74 $ 55.74 $ 107.23
See Note to the unaudited financial statements
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The Balanced Opportunity Fund L.P.
Note to Unaudited Financial Statements
December 31, 2001
Note - Basis of Presentation
The unaudited financial statements of The Balanced Opportunity Fund L.P.
(the Partnership) have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments consisting only of normal reoccurring
adjustments, necessary for a fair presentation of the financial condition and
results of operations of the Partnership for the periods presented have been
included. For further information, refer to the financial statements and
footnotes thereto included in the Partnership's annual report on Form 10-K for
the year ended June 30, 2001. Due to the nature of commodity 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.
The presentation of the statement of operations has been reformatted to comply
with Statement of Position 01-1, Amendment to Scope of Statement of Position
95-2, Financial Reporting by Nonpublic Investment Partnerships, to include
Commodity Pools.
The following financial highlights reflect activity related to the limited
partner class only. Total return is based on the change in value during the
period of a theoretical investment made at the beginning of the calendar
quarter of the six month period ended December 31, 2001. An individuals
limited partners' return may vary from this return based on several factors.
2001
Per unit Operating Performance (For a limited partnership unit
outstanding throughout the period from July 1, 2001 to
December 31, 2001):
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Net asset value, July 1, 2001 1,920.87
Income from investment operations:
Net investment income (14.53)
Net realized and unrealized gain (loss) on investment
and foreign currency transactions 67.87
Total from investment operations 53.35
Net asset value, December 31, 2001 1,974.66
Total Return: 2.74%
Supplemental Data:
Net assets applicable to Limited Partners, December 31, 2001 1,163,075
Ratio to average net assets:
Expenses (1) 5.12%
Net investment income (loss) (1) (0.72%)
(1) Annualized
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Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Capital Resources
The purpose of the Partnership is to trade commodity interests; as such,
the Partnership does not have, nor does it expect to make, any capital
expenditures or have any capital assets that are not operating capital or
assets. The Partnership's use of assets is solely to provide necessary margin
or premiums for, and to pay any losses incurred in connection with, its trading
activity. The Net Asset Values are calculated and equity reports are reviewed
by the General Partner on a daily basis to monitor the trading advisors'
activity to maximize the market and credit risks of the Fund. The General
Partner also monitors the trading advisors' compliance with investment
objectives as set forth in the prospectus. Redemption of additional units in
the future will impact the amount of funds available for trading commodity
interest. The amount of funds available was reduced by $42,905 from
redemptions of units during the quarter ended December 31, 2001.
Liquidity
Most United States commodity exchanges limit fluctuations in commodity
futures contract prices during a single day by regulations referred to as
"daily price fluctuation limits" or "daily limits." During a single trading
day, no trades may be executed at a price beyond the daily limit. Once the
price of a futures contract has reached the daily limit for that day, positions
in that contract can neither be taken nor liquidated. Commodity futures prices
have occasionally reached the daily limit for several consecutive days with
little or no trading. Similar occurrences could prevent the Partnership from
promptly liquidation unfavorable positions and subject the Partnership to
substantial losses which could exceed the margin initially committed to such
trades. In addition, even if commodity futures prices have not reached the
daily limit, the Partnership may not be able to execute futures trades at
favorable prices if little trading in such contracts is taking place. Other
than these limitations on liquidity, which are inherent in the Partnership's
trading of commodity interests, the Partnership's assets are highly liquid and
are expected to remain so. The counterparty for all exchange traded and over-
the counter contracts was Rosenthal Collins Group LP. A portion of the Fund's
assets have been invested in certain United States treasury obligations. This
investment is designed to provide ultimate repayment of the investors' initial
contributions. These securities are not used for trading purposes.
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8
Results of Operations
Given the volatility of the markets in which the Partnership trades, its
quarterly results can fluctuate significantly and are not indicative of the
expected results for the fiscal year.
In the six month period ending December 31, 2001, the Fund experienced net
realized and unrealized gain (loss) from investments and foreign currency of
$48,521 compared to trading gains of $91,885 for the same periods in 2000. In
the six months period ending December 31, 2001, net investment loss was $10,213
compared to a loss of $6,819 for the same periods in 2000.
At December 31, 2001 there was no material credit risk exposure exceeding
10% of total assets for either exchange traded or over-the-counter contracts.
The decline in brokerage commissions is due to less dollar volume in
trading. Management fees, which are based on the net assets of the fund,
declined as a result of redemptions, which lowered net assets of the Fund.
Part II - Other Information
Item 1. Legal Proceedings
None
Item 2. Change in Securities and Use of Proceeds
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters of a Vote of Securities Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
No reports were filed on Form 8-K during the six months ended
December 31, 2001.
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Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934 and to the extent possible due to the acquisition of the
registrant by the undersigned on April 24, 1999; the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly
authorized.
The Balanced Opportunity Fund L.P.
(Registrant)
By: Rosenthal Collins Futures Management, Inc., General Partner
By: ______________________________________
J. Robert Collins, President
Date: January 25, 2002
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