Shad Trading LLC (SHAD 1

(Proprietary))

Fund Investment Objectives

SHAD's trading strategy is strictly technical; no fundamental analysis is employed. SHAD has conducted analysis of price patterns to determine procedures for initiating and liquidating positions in the markets of certain commodity interests. The price movements are valued using technical indicators including, but not limited to, moving averages, trend lines, channels and bands. The underlying premise of SHAD's trading approach is that commodity interests will, from time to time, enter into periods of major price changes to either a higher or lower level. These price changes are known as trends, which have been observed and recorded since the beginning of market history. In the opinion of the principals of SHAD, there is reason to believe that in free markets, prices will continue to trend. The trading approach used by SHAD is designed to exploit these price moves. The general trading strategy is defined as trend following. Most, but not all, trade initiations and liquidations are in the direction of a trend. The SHAD program employs a number of trading models acting independently. Each model generates its own entry and exit signals and trades the long and short side of each market. With minor differences only for long or short positions, a particular model trades each determined market with the same rules and parameters. SHAD reserves the right to make adjustments in the exact entry or exit price generated by a model, or to delay entry or exit on any order, in order to attempt to reduce the impact of slippage from large block orders being executed at the same or at similar prices. The models utilize time frames which vary from short-term to intermediate to long-term that have attractive performance characteristics in various market conditions, and complement other model performance in the program. SHAD-1 currently trades domestic commodity markets including, but not limited to, grains, meats, stock indexes, metals, interest rates, currencies, softs and energies. The Trading Program has the ability to follow nearly all the commodity markets, therefore SHAD reserves the right to trade any and all commodity interests (futures contracts, including spreads and options on same) on domestic exchanges only. SHAD will make decisions such as when to add or delete a commodity interest fromits trading list due to, for example, an increase or decline in volatility, or when to cease trading a particular contract month and commence trading another. Returns are based on proforma adjustments to a proprietary account to reflect fees. Client accounts will be traded in like fashion.