AIS FUTURES FUND IV L.P.

STATEMENTS OF FINANCIAL CONDITION

September 30, 2009 (Unaudited) and December 31, 2008 (Audited)

_______________

		September 30,				December 31,
		2009				2008
ASSETS
Equity in broker trading account
Cash		$	6,709,575			$	1,564,334
United States government securities, at fair value			63,460,129				41,470,056
Unrealized gain (loss) on open contracts, net			(2,018,033	)			5,316,844
Interest receivable			584				2,293
Due from broker			68,152,255				48,353,527
Cash			773,030				540,030
Total assets		$	68,925,285			$	48,893,557
LIABILITIES
Accounts payable		$	49,703			$	58,861
Commissions and other trading fees
on open contracts payable			18,564				13,434
Management fee payable			103,244				69,791
General Partner Profit Share allocation payable			84,148				0
Selling agent administrative and service fee payable			161,284				132,341
Subscriptions received in advance			773,000				540,000
Redemptions payable			758,866				766,248
Total liabilities			1,948,809				1,580,675
PARTNERS’ CAPITAL (Net Asset Value)
General Partner - Series B			213,043				152,807
Limited Partners - Series A			66,763,433				47,160,075
Total partners’ capital (Net Asset Value)			66,976,476				47,312,882
		$	68,925,285			$	48,893,557

 

The accompanying notes are an integral part of these financial statements.

 

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AIS FUTURES FUND IV L.P.

CONDENSED SCHEDULE OF INVESTMENTS

September 30, 2009 (Unaudited)

_______________

 

UNITED STATES GOVERNMENT SECURITIES*

 

	Face Value			Maturity Date	Description		Fair Value				% of Net Asset Value
	$	4,000,000		10/29/09	U.S. Treasury Bills		$	3,999,115				5.97	%
		2,500,000		11/19/09	U.S. Treasury Bills			2,499,099				3.73	%
		4,000,000		11/27/09	U.S. Treasury Bills			3,998,324				5.97	%
		2,000,000		12/03/09	U.S. Treasury Bills			1,999,200				2.98	%
		16,000,000		12/10/09	U.S. Treasury Bills			15,991,160				23.88	%
		3,000,000		12/24/09	U.S. Treasury Bills			2,998,055				4.48	%
		11,000,000		12/31/09	U.S. Treasury Bills			10,992,056				16.41	%
		4,000,000		01/14/10	U.S. Treasury Bills			3,996,937				5.97	%
		2,000,000		01/21/10	U.S. Treasury Bills			1,998,352				2.98	%
		4,500,000		01/28/10	U.S. Treasury Bills			4,496,432				6.71	%
		4,000,000		03/11/10	U.S. Treasury Bills			3,996,850				5.97	%
		6,500,000		03/18/10	U.S. Treasury Bills			6,494,549				9.70	%
				Total United States government securities (cost - $63,419,124)
							$	63,460,129				94.75	%
LONG FUTURES CONTRACTS**
				Description			Fair Value				% of Net Asset Value
				Agricultural			$	(5,893,535	)			(8.80	)%
				Currencies				688,823				1.03	%
				Energy				(15,072	)			(0.02	)%
				Equities - Stock Index				164,550				0.25	%
				Metals				3,036,045				4.53	%
				Total long futures contracts				(2,019,189	)			(3.01	)%
SHORT FUTURES CONTRACTS
	Number of Contracts			Description
		37		Interest Rates (30 Year U.S. Treasury Bond, expires         12/2009)				1,156				0.00	%
				Total futures contracts			$	(2,018,033	)			(3.01	)%

 

*	Pledged as collateral for the trading of futures and options on futures contracts.

**	No individual futures contract position constituted greater than 5 percent of Net Asset Value.  Accordingly, the number of contracts and expiration dates are not presented.

 

The accompanying notes are an integral part of these financial statements.

 

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AIS FUTURES FUND IV L.P.

CONDENSED SCHEDULE OF INVESTMENTS (CONTINUED)

December 31, 2008 (Audited)

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UNITED STATES GOVERNMENT SECURITIES*

 

	Face Value			Maturity Date	Description		Fair Value				% of Net Asset Value
	$	10,500,000		01/02/09	U.S. Treasury Bills		$	10,498,827				22.19	%
		500,000		01/08/09	U.S. Treasury Bills			499,786				1.06	%
		1,000,000		02/19/09	U.S. Treasury Bills			997,395				2.11	%
		500,000		02/26/09	U.S. Treasury Bills			498,503				1.05	%
		6,500,000		06/04/09	U.S. Treasury Bills			6,491,897				13.72	%
		10,500,000		06/11/09	U.S. Treasury Bills			10,492,440				22.18	%
		12,000,000		06/25/09	U.S. Treasury Bills			11,991,208				25.34	%
				Total United States government securities (cost - $41,347,804)
							$	41,470,056				87.65	%
LONG FUTURES CONTRACTS**
				Description			Fair Value				% of Net Asset Value
				Agricultural			$	2,480,686				5.24	%
				Currencies				1,469,813				3.11	%
				Energy				(33,947	)			(0.07	)%
				Metals				1,400,292				2.96	%
				Total long futures contracts			$	5,316,844				11.24	%

 

*	Pledged as collateral for the trading of futures and options on futures contracts.

**	No individual futures contract position constituted greater than 5 percent of Net Asset Value.  Accordingly, the number of contracts and expiration dates are not presented.

 

The accompanying notes are an integral part of these financial statements.

 

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AIS FUTURES FUND IV L.P.

STATEMENTS OF OPERATIONS

For the Three Months and Nine Months Ended September 30, 2009 and 2008 (Unaudited)

_______________

 

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2009				2008				2009				2008
TRADING GAINS (LOSSES)
Trading gains (losses)
Realized		$	3,013,925			$	(26,992,877	)		$	26,247,619			$	30,273,098
Change in unrealized			2,942,407				(46,514,360	)			(7,334,877	)			(36,610,778	)
Brokerage commissions			(25,945	)			(28,674	)			(87,192	)			(111,885	)
Net total trading gains (losses)			5,930,387				(73,535,911	)			18,825,550				(6,449,565	)
NET INVESTMENT (LOSS)
Income
Interest income			34,133				623,451				88,671				2,215,261
Expenses
Selling agent administrative
and service fee			419,455				767,467				1,093,207				2,293,583
Management fees			296,423				511,094				746,740				1,591,264
Operating expenses			64,040				49,320				163,540				162,270
Total expenses			779,918				1,327,881				2,003,487				4,047,117
Net investment (loss)			(745,785	)			(704,430	)			(1,914,816	)			(1,831,856	)
NET INCOME (LOSS)			5,184,602				(74,240,341	)			16,910,734				(8,281,421	)
Less: General Partner
Profit Share allocation			40,113				(12,179,041	)			108,801				961,853
Net income (loss) for pro rata
allocation to all partners		$	5,144,489			$	(62,061,300	)		$	16,801,933			$	(9,243,274	)

The accompanying notes are an integral part of these financial statements.

 

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AIS FUTURES FUND IV L.P.

STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL (NET ASSET VALUE)

For the Nine Months Ended September 30, 2009 and 2008 (Unaudited)

_______________

 

		Partners’ Capital
		Series B				Series A
		General				Limited
		Partner				Partners				Total
Balances at January 1, 2009		$	152,807			$	47,160,075			$	47,312,882
Net income for the nine months
ended September 30, 2009
General Partner Profit Share allocation			24,653				0				24,653
Pro rata allocation to all partners			60,236				16,741,697				16,801,933
Subscriptions			0				7,568,956				7,568,956
Redemptions			(24,653	)			(4,707,295	)			(4,731,948	)
Balances at September 30, 2009		$	213,043			$	66,763,433			$	66,976,476
Balances at January 1, 2008		$	313,793			$	77,617,731			$	77,931,524
Net income (loss) for the nine months
ended September 30, 2008
General Partner Profit Share allocation			769,697				0				769,697
Pro rata allocation to all partners			7,840				(9,251,114	)			(9,243,274	)
Subscriptions			0				50,284,820				50,284,820
Redemptions			(769,697	)			(16,002,246	)			(16,771,943	)
Balances at September 30, 2008		$	321,633			$	102,649,191			$	102,970,824

 

The accompanying notes are an integral part of these financial statements.

 

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AIS FUTURES FUND IV L.P.

NOTES TO FINANCIAL STATEMENTS 

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Note 1.

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A.

General Description of the Partnership

AIS Futures Fund IV 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.  The Partnership is subject to the regulations of the Commodity Futures Trading Commission, an agency of the United States (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.

The limited partnership agreement provides, among other things, that the Partnership shall dissolve no later than December 31, 2026.

B.

Method of Reporting and Use of Estimates

The Partnership’s financial statements are presented in conformity with U.S. generally accepted accounting principles (GAAP) which 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 revenue and expenses during the reporting period.  Actual results could differ from those estimates.

 

C.

Futures and Options on Futures Contracts

Futures and options on futures are recorded on trade date and reflected at fair value, based on quoted market prices, which is generally the closing settlement price on the primary exchange.  Gains or losses are realized when contracts are liquidated.  Net 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.  Any change in net unrealized gain or loss from the preceding period is reported in the statement of operations.  Brokerage commissions include other trading fees and are charged to expense when contracts are opened.

 

D.

Securities

United States government securities are stated at cost plus accrued interest, which approximates fair value based on the quoted market yield for the applicable U.S. Government security.  Any change in value of these securities is reported in interest income on the statement of operations.

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.  No provision for income taxes has been made in these financial statements as each partner is individually responsible for reporting income or loss based on its respective share of the Partnership’s income and expenses as reporting for income tax purposes.

 

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AIS FUTURES FUND IV L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

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Note 1.

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

E.

Income Taxes (continued)

The Partnership evaluates tax positions taken or expected to be taken while preparing the Partnership’s financial statements to determine whether the tax positions are “more-likely-or-not” of being sustained by the applicable tax authority.  Tax positions with respect to tax at the partnership level not deemed to meet the “more-likely-than-not” threshold would be recorded as a tax benefit or expense in the current year.  The General Partner has concluded there is no tax expense or associated interest and penalties to be recorded by the Partnership for the nine month periods ended September 30, 2009 and 2008.  The Partnership has elected an accounting policy to classify interest and penalties, if any, as interest expense.  The Partnership files U.S. federal and state tax returns.  The 2005 through 2008 tax years generally remain subject to examination by U.S. federal and most state tax authorities.

F.

Capital Accounts

The Partnership offers two Series of Interests.  The Series A Interests are available to all qualified investors, subject to applicable conditions and restrictions.  The Series B Interests are available for sale to the General Partner and its principals.  The Partnership accounts for subscriptions, allocations and redemptions on a per partner capital account basis.  Income or loss, prior to the General Partner Profit Share allocation, is allocated pro rata to the capital accounts of all partners.  The General Partner Profit Share allocation applicable to each Limited Partner is allocated to the General Partner’s capital account from the Limited Partner’s capital account at the end of each calendar year or upon redemption by a Limited Partner.

On March 1, 2008, the Partnership adopted its Fourth Amended and Restated Limited Partnership Agreement.  This agreement changed the defined term used to describe interests in Partnership from “Units of Limited Partnership Interest” to “Limited Partnership Interests” to prevent confusion over the use of the term “units”.  The Partnership accounted for its “Units of Limited Partnership Interest” on a capital account basis prior to March 1, 2008 and will continue to account for its “Limited Partnership Interests” on the same basis going forward.

G.

Redemptions

Limited Partners may require the Partnership to redeem some or all of their capital upon ten days prior written notice.  The ten days prior written notice may be waived at the discretion of the General Partner.  Partner redemptions are recorded on their effective date, which is generally the last day of the month.

H.

Statement of Cash Flows

The Partnership has elected not to provide statements of cash flows as permitted by GAAP accounting standards.

I.

Fair Value

The Partnership accounts for certain assets and liabilities at fair value under various accounting literature and applicable industry guidance, which define fair value, establish a fair value hierarchy based on the quality of inputs used to measure fair value, and enhance disclosure requirements for fair value measurements.  A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market.  The Partnership has categorized its financial instruments, based on the priority of inputs to the valuation technique, into a three-level fair value hierarchy.  The fair value gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the

 

8

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AIS FUTURES FUND IV L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

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Note 1.

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

I.

Fair Value (continued)

lowest priority to unobservable inputs (Level 3).  If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

Financial assets and liabilities recorded on the statement of financial condition at September 30, 2009 and December 31, 2008 are categorized as Level 1 and Level 2 based on the inputs to valuation techniques.  Level 1 denotes fair value is based on unadjusted quoted prices for identical assets or liabilities in an active market that the Partnership has the ability to access.  Level 2 denotes fair value is based on inputs other than quoted market prices that the Partnership has the ability to access.  The Partnership has no level 3 assets or liabilities at September 30, 2009 or December 31, 2008, or for the periods then ended.

 

The fair values of financial instruments at September 30, 2009 and December 31, 2008 consisted of the following:

 

			September 30, 2009				December 31, 2008
Level 1	Futures contracts		$	(2,018,033	)		$	5,316,844
Level 2	U.S. Government Securities		$	63,460,129			$	41,470,056

The fair values of futures contracts are based upon exchange settlement prices.  The fair value of U.S. Government Securities is based on amortized cost plus accrued interest, which approximates fair value based on the quoted market yield for the applicable U.S. Government security.

J.

Financial Derivative Instruments

The Partnership’s business is speculative trading of futures contracts, options on futures contracts and physical commodities and other commodity-related contracts traded primarily on domestic markets pursuant to the trading and investment methodology of the General Partner.  In trading for the Partnership, the General Partner employs Multi Asset Allocation Portfolio (MAAP), which is a trend-following trading process employing a combination of discretionary input from the General Partner’s principals and proprietary applied intelligence software which is based on the quantitative analysis of years of daily historical prices and probability theory.  MAAP maintains long, short or neutral positions in each of the following asset classes, equities, fixed income, currencies, metals, agriculture, interest rate, and energy.

 

9

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AIS FUTURES FUND IV L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

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Note 1.

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

J.

Financial Derivative Instruments (continued)

 

Derivatives not designated as hedging instruments under SFAS 133
		Asset Derivatives September 30, 2009					Liability Derivatives September 30, 2009
Balance Sheet Location - Equity in broker trading account
		Fair Value				Fair Value			Net
Agricultural contracts		$	87,862			$	(5,981,397)		$	(5,893,535)
Currencies contracts			688,823				0			(688,823)
Energy contracts			403,378				(418,450)			(15,072)
Equities contracts			172,150				(7,600)			119,700
Interest Rates contracts			1,156				0			1,156
Metals contracts			3,193,220				(157,175)			3,036,045
		$	4,546,589			$	(6,564,622)		$	(2,018,033)

Trading Revenue For the Three and Nine Months Ended September 30, 2009							Trading Revenue For the Three and Nine Months Ended September 30, 2009
Type of Instrument		Three Months Ended September 30			Nine Months      Ended September 30		Line Item in Income Statement	Three Months    Ended September 30			Nine Months    Ended September 30
Agricultural contracts	$	(2,522,029)		$	(1,019,803)
Currencies contracts		3,192,797			5,225,591		Realized	$      3,013,925		$	26,247,619
Energy contracts		(1,496,716)			2,956,130		Change in unrealized	2,942,407			(7,334,877)
Equities contracts		1,008,691			1,298,372
Interest Rates contracts		1,156			1,156			$      5,956,332		$	18,912,742
Metals contracts		5,772,433			10,451,296
	$	5,956,332		$	18,912,742

 

The monthly average of futures contracts bought and sold was 1,371 and 1,260 for the three months ended and 1,799 and 1,704 for the nine months ended September 30, 2009, respectively.

K.

Interim Financial Statements

The financial statements included herein were prepared by us without audit according to the rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America may be omitted pursuant to such rules and regulations.  The financial statements reflect, in the opinion of management, all adjustments necessary that were of normal and recurring nature and adequate disclosures to present fairly the financial position and results of operations as of and for the periods indicated.  The results of operations for the three and nine months ended September 30, 2009 and 2008 are not necessarily indicative of the results to be expected for the full year or for any other period.

These financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Form 10-K previously filed with the Securities and Exchange Commission.

 

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AIS FUTURES FUND IV L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

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Note 1.

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

L.

Recently Adopted Accounting Pronouncements

The Partnership adopted FASB Accounting Standards Codification (ASC) on July 1, 2009, which is the single source of authoritative nongovernmental U.S. GAAP.   The ASC does not change U.S. GAAP but combines all authoritative standards into a comprehensive, topically organized online database.  Effective with the ASC launch on July 1, 2009 only one level of authoritative GAAP exists, other than guidance issued by the SEC. All other accounting literature excluded from the ASC will be considered non-authoritative. The ASC impacted the Partnership’s financial statement disclosures by eliminating prior FASB references since all references to authoritative accounting literature are now referenced in accordance with the ASC.

The Partnership adopted the provisions of the Subsequent Events Topic of the FASB ASC effective June 30, 2009, which establishes general standards of and accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or available to be issued.

Note 2.

GENERAL PARTNER

The General Partner and commodity trading advisor of the Partnership is AIS Futures Management LLC, which conducts and manages the business and trading activities of the Partnership.

The Fourth Amended and Restated Limited Partnership Agreement (the Limited Partnership Agreement) provides for the General Partner to receive a monthly Management Fee equal to 1/12 of 2% (2% annually) of each Series A Limited Partner’s month-end Net Assets, as defined.  The General Partner also receives a Profit Share allocation equal to 20% of any New Trading Profit, as defined, attributable to each Series A Limited Partner’s Interest achieved as of each calendar year-end or upon redemption.

During the three and nine months ended September 30, 2009 and 2008, certain Series A Limited Partners were charged Management Fees at a rate lower than described above, to offset the effect of the additional 1.5% per annum Selling Agent Service Fee described in Note 3.  Accordingly, for the three and nine months ended September 30, 2009 and 2008, Management Fees were reduced by approximately $28,800, $62,000, $88,400 and $155,800, respectively.

The General Partner has paid all organizational and offering costs and will not be reimbursed therefore.

Note 3.

SELLING AGENT ADMINISTRATIVE AND SERVICE FEES

Certain Series A Limited Partners that were solicited by  Selling Agents are charged an Administrative and Service Fee (the Service Fee equal to 1/12 of 2.5% (2.5% annually)) of each Series A Limited Partner’s month-end Net Assets, as defined, sold by them which remain outstanding as of each month-end.  The Selling Agents may pass on a portion of the Service Fee to its investment executives.  In the event the Service Fee is no longer payable to a Selling Agent, the relevant Limited Partner who was solicited by such Selling Agent will no longer be charged the Service Fee.  For the three and nine months ended September 30, 2009 and 2008, certain Limited Partners were not subject to the Service Fee.  The Service Fee is accrued and expensed as incurred.

For investment executives associated with the sale of Limited Partner Interests in excess of $500,000, the investment executive’s firm will receive an additional 1.5% per annum Service Fee with respect to such Limited Partner Interests in excess of $500,000, for the first twelve months following the sale of such Limited Partner Interests.  The additional Service Fee is paid by the Partnership, however, the General Partner reduces its Management Fee (see Note 2) related to the Limited Partner’s Interest.  Accordingly, this additional Service Fee does not affect the total fees charged to the Limited Partner.

 

11

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AIS FUTURES FUND IV L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

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Note 4.

SUBSCRIPTIONS, DISTRIBUTIONS AND REDEMPTIONS

Investments in the Partnership are made by subscription agreement, subject to acceptance by the General Partner.  A selling commission of up to 2% of the subscription amount may be deducted from the subscription proceeds and paid to the applicable Selling Agent, if any.  For the three and nine months ended September 30, 2009 and 2008, $0, $4,900, $200 and $30,737, respectively, in selling commissions were charged to Limited Partners.  Limited Partner subscriptions, as presented in the statement of changes in partners’ capital (net asset value), are net of such selling commissions, if any.

The Partnership is not required to make distributions, but may do so at the sole discretion of the General Partner.  A Limited Partner may request and receive partial or full redemptions of their capital account as of the close of business on the last business day of any month, subject to restrictions in the Limited Partnership Agreement.

Note 5.

DEPOSITS WITH BROKER

The Partnership deposits funds with Newedge USA, LLC, subject to Commodity Futures Trading Commission regulations and various exchange and broker requirements.  Margin requirements are satisfied by the deposit of U.S. Government Securities and cash with such brokers.  Accordingly, assets used to meet margin and other broker or regulatory requirements are partially restricted.  The Partnership earns interest income on its assets deposited with the broker.

Note 6.

TRADING ACTIVITIES AND RELATED RISKS

The Partnership engages in speculative trading of U.S. futures contracts and options on U.S. futures contracts. The Partnership is exposed to both market risk, the risk arising from changes in the fair 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.

For futures and options on futures contracts, risks arise from changes in the fair 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 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; for purchased options, the risk of loss is limited to the premiums paid.

In addition to market risk, in entering into commodity interest contracts, there is a credit risk that a counterparty will not be able to meet its obligations to the Partnership.  The counterparty for futures and options on futures contracts traded in the United States and on most non-U.S. futures exchanges are brokers, futures commissions merchants and other financial institutions.  In the event these counterparties do not fulfill their obligations, the Partnership may be exposed to risk.  The risk of default depends on the credit worthiness of the counterparty or issuers of the instrument.  In general, clearinghouses are backed by the corporate members of the clearinghouse who are required to share any financial burden resulting from nonperformance by one of their members and, as such, should significantly reduce the credit risk.

 

12

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AIS FUTURES FUND IV L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

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Note 6.

TRADING ACTIVITIES AND RELATED RISKS (CONTINUED)

The Partnership maintains its cash in bank deposit accounts at Wachovia Bank, N.A., Greenwich, Connecticut.  Such accounts may, at times, exceed federally insured limits.  The Partnership has not experienced any losses in such accounts.  The General Partner believes the Partnership is not exposed to any significant credit risk on cash.

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 Limited Partners bear the risk of loss only to the extent of the fair value of their respective investments and, in certain specific circumstances, distributions and redemptions received.

Note 7.

INDEMNIFICATIONS

In the normal course of business, the Partnership enters into contracts and agreements that contain a variety of representations and warranties, both of 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.

Note 8.

SUBSEQUENT EVENTS

Management of the Partnership evaluated subsequent events through November 12, 2009, the date these financial statements were issued.  There are no subsequent events to disclose.

Note 9.

FINANCIAL HIGHLIGHTS

The following information presents the financial highlights of the Partnership for the three and nine months ended September 30, 2009 and 2008.  This information has been derived from information presented in the financial statements.

 

 

		Three months ended September 30,								Nine months ended September 30,
		2009 (Unaudited)				2008 (Unaudited)				2009 (Unaudited)				2008 (Unaudited)
Total return for Series A Limited   Partners taken as a whole (1)
Total return before Profit Share allocation			8.40	%			44.02	%			34.88	%			0.87	%
Profit Share allocation			(0.07	)%			(6.02	)%			(0.23	)%			(0.29	)%
Total return after Profit Share allocation			8.33	%			(38.00	)%			34.65	%			(1.16)	%
Supplemental Data for Series A Limited Partners
Ratio of expenses to average net asset value: (2)
Expenses, excluding Profit Share allocation (3)			4.94	%			3.81	%			4.98	%			4.61	%
Profit Share allocation (1)			0.06	%			(8.73)	%			0.20	%			0.82	%
Total expenses			5.00	%			(4.92)	%			5.18	%			5.43	%
Net investment (loss) (3), (4)			(4.73	)%			(2.03	)%			(4.76	)%			(2.10	)%

 

The total returns and ratios are presented for Series A Limited Partners taken as a whole based on the Partnership’s standard Management Fee, Service Fee and Profit Share allocation arrangements.  An individual partner’s total returns and ratios may vary from the above total returns and ratios based on the timing of their capital additions and redemptions and given potentially different fee arrangements for a Series A Limited Partner.

The total returns and ratios exclude the effects of any 2% upfront selling commissions charged by Selling Agents.

 

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(1)	Not annualized.

(2)	The ratio of expenses to average net asset value does not include brokerage commissions.

(3)	Annualized.

(4)	The net investment (loss) is comprised of interest income less total expenses, excluding brokerage commissions and the General Partner Profit Share allocation.

 

13

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AIS FUTURES FUND IV L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

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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.

Operational Overview

Due to the nature of the Partnership’s business, its results of operations depend on the occurrence of major price moves in at least some of the markets traded and the General Partner’s ability to recognize and capitalize on such trends and other profit opportunities.  The General Partner’s trading methods are confidential, so that the only information that can be furnished regarding the Partnership’s results of operations is its performance record.  The Partnership engages in speculative trading of futures contracts and the Partnership may enter into long, short or neutral positions in the markets in which it trades.  Because the Partnership’s trading strategies depend heavily on global price trends (both positive and negative), and these price trends may be affected by global economic conditions and may at times be seasonal, the Partnership will be affected by such conditions and trends.  The past performance of the Partnership 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 opportunity of being profitable than in others.

Liquidity and Capital Resources

The Partnership raises additional capital only through the sale of limited partnership interests and capital is increased through trading profits (if any) and interest income.  The Partnership does not engage in borrowing.  The Partnership may offer limited partnership interests for sale as of the close of business at the end of each month.

The Partnership trades futures contacts, long and short in each of the following six asset classes: equities, fixed income, currencies, metals, agriculture and energy.  Due to the nature of the Partnership’s business, substantially all its assets are represented by cash and U.S. government obligations, while the Partnership maintains its market exposure through open futures contract positions.

The Partnership’s assets are generally held as cash, cash equivalents or U.S. Government obligations, which are used to margin the Partnership’s futures 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 trading, the Partnership’s assets are highly liquid and are expected to remain so.

There have been no material changes with respect to the Partnership’s critical accounting policies, off-balance sheet arrangements or contractual obligations, as reported in the Partnership’s most recent Annual Report on Form 10-K and any amendments thereto.

During its operations for the three and nine months ended September 30, 2009, the Partnership experienced no significant periods of illiquidity in any of the numerous markets traded by the General Partner.

Results of Operations

Performance Summary

 

Three Months Ended September 30, 2009

During the third quarter of 2009, the Partnership achieved a net realized and unrealized gain of $5,930,387 from its trading operations, which is net of brokerage commissions of $25,945.  The Partnership accrued total expenses of $779,918, including $419,455 in Selling Agent Administrative and Service Fees, $296,423 in Management Fees (paid to the General Partner) and $64,040 in operating expenses.  The Partnership earned $34,133 in interest income and allocated a Profit Share of $40,113 to the General Partner.  An analysis of trading gains and losses (not adjusted for any fees or expenses) by market sector is as follows:

 

14

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PART I – FINANCIAL INFORMATION (continued)

 

Sector	% Gain (Loss)
S&P 500	1.61 %
Bonds	0.00 %
Currency	5.21 %
Energy	(2.31) %
Metals	9.43 %
Grains	(3.88) %
Total Portfolio	9.68 %

The Partnership experienced gains in the third quarter of 2009.  The largest gain came from long positions in metals, followed by gains in long positions in foreign currencies (Australian and Canadian dollars and euro) and to a lesser extent a long position in the S&P 500.  Losses occurred in the long positions in the grains and energy markets.  The Partnership had no position in U.S. Treasury bond futures contracts until the last day of the third quarter at which time it took a small short position.

Three Months Ended September 30, 2008

During the three months ended September 30, 2008, the Partnership earned net income/(loss) for pro rata allocation to all partners of $(62,061,300).  The Partnership experienced trading gains/(losses) of $(73,535,911) and earned interest income of $623,451 during this period.  Interest income is derived from cash and U.S. Treasury instruments held at the Partnership’s commodity broker.  Interest income for this period decreased $106,919 over the same period in 2007.  A breakdown of trading gains and losses for this period appears below.

Sector	% Gain (Loss)
S&P 500	3.13 %
Bonds	(1.40) %
Yen	(0.35) %
Energy	(19.60) %
Metals	(9.77) %
Grains	(21.23) %
Total Portfolio	(43.68) %

The Partnership experienced a decline in value during the third quarter of 2008 primarily due to the Partnership’s long positions in grains, energy and metals.  In addition small losses were incurred in the short position in U.S. Treasury bonds and the Japanese Yen.  Only the Partnership’s short position in the S&P 500 created a small gain.

Nine Months Ended September 30, 2009

During the nine months ended September 30, 2009, the Partnership achieved a net realized and unrealized gain of $18,825,550 from its trading operations, which is net of brokerage commissions of $87,192.  The Partnership accrued total expenses of $2,003,487, including $1,093,207 in Selling Agent Administrative and Service Fees, $746,740 in Management Fees (paid to the General Partner) and $163,540 in operating expenses.  The Partnership earned $88,671 in interest income and allocated a Profit Share of $108,801 to the General Partner.  An analysis of trading gains and losses (not adjusted for any fees or expenses) by market sector is as follows:

 

15

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PART I – FINANCIAL INFORMATION (continued)

Sector	% Gain (Loss)
S&P 500	2.17 %
Bonds	0.00 %
Currency	10.48 %
Energy	5.37 %
Metals	22.08 %
Grains	1.01 %
Total Portfolio	39.70 %

The Partnership was up strongly for the first nine months of 2009 primarily due to gains in the second and third quarters of 2009.  The largest gains came from long positions in the metals and from currencies (Australian and Canadian dollars and the euro). In addition, profits were also generated by the long positions in energy, the S&P 500 and grains.  The Partnership had no position in U.S. Treasury bond futures contracts until the last day of the third quarter, at which time a small short position was established.

Nine Months Ended September 30, 2008

During the nine months ended September 30, 2008, the Partnership earned net income/(loss) for pro rata allocation to all partners of $(9,243,274).  Total partners’ capital (net asset value) for this period increased by $25,039,300 due to the impact of this net income/(loss), as well as subscriptions (net of redemptions) of $33,512,877.  The Partnership experienced trading gains/(losses) of $(6,449,565) and earned interest income of $2,215,261 during this period.  Interest income is derived from cash and U.S. Treasury instruments held at the Partnership's commodity broker.  Interest income for this period increased $65,917 over the same period in 2007.  A breakdown of trading gains and losses for this period appears below.

Sector	% Gain (Loss)
S&P 500	7.14 %
Bonds	(2.18) %
Yen	2.05 %
Energy	7.72 %
Metals	(1.75) %
Grains	(5.70) %
Total Portfolio	0.68 %

For the first nine months of 2008, the Partnership’s returns from trading were essentially flat as a result of the giveback of the first half’s gains during the third quarter.  Gains for the nine months were achieved from the long position in energy markets, the short position in the S&P 500 and from the long position in the Japanese Yen.  Offsetting those gains were losses in the long positions in the grains, the short position in the U.S. Treasury bonds, and long position in the metals.

Not required.

The General Partner, with the participation of the General Partner’s principal executive officer and principal 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 fiscal quarter covered by this Quarterly Report, and, based on their evaluation, has 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 significantly affect these controls subsequent to the date of the evaluation.

 

16

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PART I – FINANCIAL INFORMATION (continued)

 

 

There were no changes in the General Partner’s internal controls over financial reporting with respect to the Partnership that occurred during the fiscal quarter covered by this Quarterly Report that has materially affected, or is reasonably likely to materially affect, the General Partner’s internal controls over financial reporting with respect to the Partnership.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

17

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PART II – OTHER INFORMATION

 

None.

Not required.

(a)           The requested information has been previously reported on Form 8-K.

(b)           Not applicable.

(c)           Pursuant to the Partnership’s Limited Partnership Agreement, Limited Partners may withdraw all or part of their capital contributions and undistributed profits, if any, at the end of each calendar month.  The withdrawal by a Limited Partner has no impact on the value of the capital accounts of the remaining Limited Partners.  The following table summarizes the withdrawals by Limited Partners during the third calendar quarter of 2009:

 

Month	Withdrawal Amounts
July 31, 2009	$ 722,517
August 31, 2009	$ 666,301
September 30, 2009	$ 758,866

(a)           None.

(b)           None.

None.

(a)           None.

(b)           Not applicable.

 

18

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PART II – OTHER INFORMATION (continued)

 

The following exhibits are incorporated herein by reference.

Exhibit Number	Description of Document
3.1*	Certificate of Formation of AIS Futures Fund IV L.P.
4.2**	Fourth Amended and Restated Limited Partnership Agreement of AIS Futures Fund IV L.P., dated as of March 1, 2008.
10.1***	Customer Agreement between Calyon Financial Inc. and AIS Futures Fund IV L.P.

The following exhibits are included herewith.

Exhibit Number	Description of Document
31.01	Rule 13a-14(a)/15d-14(a) Certification
32.01	Section 1350 Certification

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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.

Dated: November 12, 2009

AIS FUTURES FUND IV L.P.

 

 

By:

AIS FUTURES MANAGEMENT LLC

 

 

By: /s/ John Hummel                                                   

Name:  John Hummel

Title:  President (principal executive and principal

               financial officer)

 

 

 

 

 

 

 

 

 

S-1 

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