Principle Capital Mgmt LLC

(Commodity Futures - Prop)

Fund Investment Objectives

In general, the PRINCIPLE CAPITAL MANAGEMENT process begins with intensive fundamental research, collecting and analyzing historical data of production and consumption of each commodity and factors that affect the supply and demand of each commodity. The Advisor uses statistical programs and other proprietary models to identify investment opportunities that arise from the imbalance between supply and demand. The Advisor makes discretionary investment decisions on the basis of its judgments on the output of its research and proprietary models. The Advisor will employ a combination of top-down and bottom-up fundamental analysis. The top-down approach will use macro data to gauge underlying growth trends and forecast future supply and demand balance due to economic activities. The bottom-up analysis will collect data on individual pipelines, power plants and refineries to assess fundamental conditions in individual locations and aggregate them to generate the overall picture of supply and demand balance. The Advisor trades the following strategies: 1) Spreads - which involve holding simultaneous long and short futures; 2) Opportunistic trading - which generally involves purchasing options to create directional exposure. Returns are based on proforma adjustments to a proprietary account to reflect fees. Client accounts will be traded in like fashion. Returns reflect a fee structure of 2/20.