**Exhibit 13.01**

** **

***ML SELECTFUTURES I L.P.***

***(A Delaware Limited Partnership)***

** **

*FinancialStatements for the years ended*December 31, 2008, 2007and 2006and Report of IndependentRegistered PublicAccounting Firm

* *

 

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ML Select FuturesI L.P.

(A DelawareLimited Partnership)

 

TABLE OF CONTENTS

 
| ** **                                                                                                  | **Page** |
|-------------------------------------------------------------------------------------------------------------|----------|
|                                                                                                        |     |
| REPORT OF INDEPENDENT  REGISTERED PUBLIC ACCOUNTING FIRM                                                    | 1        |
|                                                                                                        |     |
| FINANCIAL STATEMENTS:                                                                                       |     |
|                                                                                                        |     |
| Statements of Financial  Condition as of December 31, 2008 and 2007                                    | 2        |
|                                                                                                        |     |
| Statements of  Operations for the years ended December 31, 2008, 2007 and 2006                         | 3        |
|                                                                                                        |     |
| Statements of Changes  in Partners’ Capital for the years ended December 31, 2008, 2007 and  2006 | 4        |
|                                                                                                        |     |
| Financial Data  Highlights for the years ended December 31, 2008, 2007 and 2006                        | 5        |
|                                                                                                        |     |
| Notes to Financial  Statements                                                                              | 6        |

 

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|   | Deloitte & Touche  LLP  |
|--------|-----------------------------|
|   | Two World Financial  Center |
|   | New York, NY 10281-1414     |
|   | USA                         |
|   |                        |
|   | Tel: +1 212 436 2000        |
|   | www.deloitte.com            |

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTINGFIRM

 

To the Partners of

ML Select Futures I L.P.:

 

We have audited the accompanying statements offinancial condition of ML Select Futures I L.P. (the “Fund”), as of December 31,2008 and 2007, and the related statements of operations, changes in partners’capital, and the financial data highlights for each of the three years in theperiod ended December 31, 2008. These financial statements and financialdata highlights are the responsibility of the Fund’s management. Ourresponsibility is to express an opinion on these financial statements andfinancial data highlights based on our audits.

 

We conducted our audits in accordance with thestandards of the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements and financial data highlightsare free of material misstatement. The Fund is not required to have, nor werewe engaged to perform, an audit of its internal control over financialreporting. Our audits included consideration of internal control over financialreporting as a basis for designing audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on theeffectiveness of the Fund’s internal control over financial reporting.Accordingly, we express no such opinion. An audit also includes examining, on atest basis, evidence supporting the amounts and disclosures in the financialstatements, assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financial statementpresentation. We believe that our audits provide a reasonable basis for ouropinion.

 

In our opinion, the financial statements and financialdata highlights referred to above present fairly, in all material respects, thefinancial position of ML Select Futures I L.P. as of December 31, 2008 and2007, the results of its operations, changes in its partners’ capital, and thefinancial data highlights for each of the three years in the period ended December 31,2008, in conformity with accounting principles generally accepted in the UnitedStates of America.

 

 

March 30, 2009

 
|   | A member firm of             |
|--------|------------------------------|
|   | **Deloitte Touche Tohmatsu** |

 

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ML SELECT FUTURESI L.P.

(A DelawareLimited Partnership)

 

STATEMENTS OFFINANCIAL CONDITION

DECEMBER 31, 2008AND 2007

 
| ** **                                                                       | ** ** | **2008**    | ** **  | **2007**    | ** ** |
|----------------------------------------------------------------------------------|------------|-------------|-------------|-------------|------------|
| **ASSETS:**                                                                      |       |        |        |        |       |
|                                                                             |       |        |        |        |       |
| Equity in  commodity futures trading accounts:                                   |       |        |        |        |       |
| Cash (includes  restricted cash of $3,079,224 for 2008 and $26,426,863 for 2007) |       | $           | 230,516,339 |        | $          | 230,559,475 |   |
| Net unrealized  profit on open contracts                                         |       | 4,496,162   |        | 7,570,860   |       |
| Accrued interest                                                                 |       | 9,572       |        | 625,818     |       |
| Due from MLAI                                                                    |       | —      |        | 17,001      |       |
| Filing fees  receivable                                                          |       | 110,738     |        | —      |       |
|                                                                             |       |        |        |        |       |
| **TOTAL  ASSETS**                                                                |       | $           | 235,132,811 |        | $          | 238,773,154 |   |
|                                                                             |       |        |        |        |       |
| **LIABILITIES  AND PARTNERS’ CAPITAL**                                      |       |        |        |        |       |
|                                                                             |       |        |        |        |       |
| LIABILITIES:                                                                     |       |        |        |        |       |
|                                                                             |       |        |        |        |       |
| Brokerage  commissions payable                                                   |       | $           | 1,077,487   |        | $          | 1,093,977 |   |
| Profit Shares  payable                                                           |       | 13,744,964  |        | 538,379     |       |
| Administrative  and filing fees payable                                          |       | 48,977      |        | 70,559      |       |
| Redemptions  payable                                                             |       | 4,704,396   |        | 11,315,876  |       |
| Due to Affiliate                                                                 |       | 2,293       |        | —      |       |
| Total  liabilities                                                               |       | 19,578,117  |        | 13,018,791  |       |
|                                                                             |       |        |        |        |       |
| **PARTNERS’  CAPITAL:**                                                     |       |        |        |        |       |
|                                                                             |       |        |        |        |       |
| General Partner  (13,916 Units and 13,916 Units)                                 |       | 4,367,587   |        | 3,483,352   |       |
| Limited Partners  (672,247 Units and 887,137 Units)                              |       | 211,187,107 |        | 222,271,011 |       |
|                                                                             |       |        |        |        |       |
| Total partners’  capital                                                    |       | 215,554,694 |        | 225,754,363 |       |
|                                                                             |       |        |        |        |       |
| **TOTAL  LIABILITIES AND PARTNERS’ CAPITAL**                                |       | $           | 235,132,811 |        | $          | 238,773,154 |   |
|                                                                             |       |        |        |        |       |
| **NET  ASSET VALUE PER UNIT**                                                    |       |        |        |        |       |
| (Based on  686,163 and 901,053 Units outstanding; unlimited Units authorized)    |       | $           | 314.1450    |        | $          | 250.5500 |   |

 
| See notes to  financial statements. |   |   |   |   |   |
|-------------------------------------|--------|--------|--------|--------|--------|

 

2

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ML SELECT FUTURES I L.P.

(A Delaware Limited Partnership)

 

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2008, 2007 AND 2006

 
| ** **                                                                        | ** ** | **2008**    | ** ** | **2007**   | ** ** | **2006**   | ** ** |
|-----------------------------------------------------------------------------------|------------|-------------|------------|------------|------------|------------|------------|
| **TRADING  PROFIT (LOSS):**                                                       |       |        |       |       |       |       |       |
|                                                                              |       |        |       |       |       |       |       |
| Realized                                                                          |       | $           | 81,364,923 |       | $          | 13,343,726 |       | $ | 37,752,945 |   |
| Change in  unrealized                                                             |       | (3,074,698  | )          | (1,451,441 | )          | (5,477,059 | )          |
|                                                                              |       |        |       |       |       |       |       |
| Total trading  profit (loss)                                                      |       | 78,290,225  |       | 11,892,285 |       | 32,275,886 |       |
|                                                                              |       |        |       |       |       |       |       |
| **INVESTMENT  INCOME:**                                                           |       |        |       |       |       |       |       |
|                                                                              |       |        |       |       |       |       |       |
| Interest                                                                          |       | 3,585,936   |       | 13,248,150 |       | 17,187,972 |       |
|                                                                              |       |        |       |       |       |       |       |
| **EXPENSES:**                                                                     |       |        |       |       |       |       |       |
|                                                                              |       |        |       |       |       |       |       |
| Brokerage  commissions                                                            |       | 13,184,374  |       | 16,351,736 |       | 19,872,678 |       |
| Profit Shares                                                                     |       | 15,939,202  |       | 671,266    |       | 49,055     |       |
| Administrative  and filing fees                                                   |       | 600,956     |       | 993,261    |       | 1,153,304  |       |
|                                                                              |       |        |       |       |       |       |       |
| Total expenses                                                                    |       | 29,724,532  |       | 18,016,263 |       | 21,075,037 |       |
|                                                                              |       |        |       |       |       |       |       |
| **NET  INVESTMENT INCOME (LOSS)**                                                 |       | (26,138,596 | )          | (4,768,113 | )          | (3,887,065 | )          |
|                                                                              |       |        |       |       |       |       |       |
| **NET  INCOME (LOSS)**                                                            |       | $           | 52,151,629 |       | $          | 7,124,172  |       | $ | 28,388,821 |   |
|                                                                              |       |        |       |       |       |       |       |
| **NET  INCOME (LOSS) PER UNIT:**                                                  |       |        |       |       |       |       |       |
|                                                                              |       |        |       |       |       |       |       |
| Weighted average  number of General Partner and Limited Partner Units outstanding |       | 806,441     |       | 1,214,651  |       | 1,537,973  |       |
|                                                                              |       |        |       |       |       |       |       |
| Net income  (loss) per weighted average General Partner and Limited Partner Unit  |       | $           | 64.67      |       | $          | 5.87       |       | $ | 18.46 |   |

 

See notes tofinancial statements.

 

3

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ML SELECT FUTURESI L.P.

(A DelawareLimited Partnership)

 

STATEMENTS OFCHANGES IN PARTNERS’ CAPITAL

FOR THE YEARSENDED DECEMBER 31, 2008, 2007 AND 2006

 
| ** **                                 | ** ** | **Units** | ** ** | **General  Partner** | ** ** | **Limited  Partners** | ** ** | **Total**    | ** ** |
|--------------------------------------------|------------|-----------|------------|----------------------|------------|-----------------------|------------|--------------|------------|
|                                       |       |      |       |                 |       |                  |       |         |       |
| PARTNERS’  CAPITAL, DECEMBER 31, 2005 |       | 1,770,230 |       | $                    | 5,928,997  |                  | $          | 390,900,141  |       | $ | 396,829,138 |   |
|                                       |       |      |       |                 |       |                  |       |         |       |
| Subscriptions                              |       | 21,575    |       | —               |       | 5,048,863             |       | 5,048,863    |       |
|                                       |       |      |       |                 |       |                  |       |         |       |
| Net income                                 |       | —    |       | 302,107              |       | 28,086,714            |       | 28,388,821   |       |
|                                       |       |      |       |                 |       |                  |       |         |       |
| Redemptions                                |       | (446,808  | )          | (2,623,711           | )          | (101,470,541          | )          | (104,094,252 | )          |
|                                       |       |      |       |                 |       |                  |       |         |       |
| PARTNERS’  CAPITAL, DECEMBER 31, 2006 |       | 1,344,997 |       | 3,607,393            |       | 322,565,177           |       | 326,172,570  |       |
|                                       |       |      |       |                 |       |                  |       |         |       |
| Subscriptions                              |       | 9,109     |       | —               |       | 2,223,503             |       | 2,223,503    |       |
|                                       |       |      |       |                 |       |                  |       |         |       |
| Net income                                 |       | —    |       | 109,956              |       | 7,014,216             |       | 7,124,172    |       |
|                                       |       |      |       |                 |       |                  |       |         |       |
| Redemptions                                |       | (453,053  | )          | (233,997             | )          | (109,531,885          | )          | (109,765,882 | )          |
|                                       |       |      |       |                 |       |                  |       |         |       |
| PARTNERS’  CAPITAL, DECEMBER 31, 2007 |       | 901,053   |       | 3,483,352            |       | 222,271,011           |       | 225,754,363  |       |
|                                       |       |      |       |                 |       |                  |       |         |       |
| Subscriptions                              |       | 18,634    |       | —               |       | 5,149,267             |       | 5,149,267    |       |
|                                       |       |      |       |                 |       |                  |       |         |       |
| Net income                                 |       | —    |       | 884,235              |       | 51,267,394            |       | 52,151,629   |       |
|                                       |       |      |       |                 |       |                  |       |         |       |
| Redemptions                                |       | (233,524  | )          | —               |       | (67,500,565           | )          | (67,500,565  | )          |
|                                       |       |      |       |                 |       |                  |       |         |       |
| PARTNERS’  CAPITAL, DECEMBER 31, 2008 |       | 686,163   |       | $                    | 4,367,587  |                  | $          | 211,187,107  |       | $ | 215,554,694 |   |

 

See notes tofinancial statements.

 

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ML SELECT FUTURESI L.P.

(A DelawareLimited Partnership)

 

FINANCIAL DATAHIGHLIGHTS

FOR THE YEARSENDED DECEMBER 31, 2008, 2007 and 2006

 

The following perUnit data and ratios have been derived from information provided in thefinancial statements.

 
| ** **                                        | ** ** | **2008** | ** ** | **2007** | ** ** | **2006** | ** ** |
|---------------------------------------------------|------------|----------|------------|----------|------------|----------|------------|
|                                              |       |     |       |     |       |     |       |
| **Per  Unit Operating Performance:**              |       |     |       |     |       |     |       |
|                                              |       |     |       |     |       |     |       |
| Net asset value,  beginning of year               |       | $        | 250.55     |     | $          | 242.51   |       | $ | 224.17 |   |
|                                              |       |     |       |     |       |     |       |
| Realized trading  profit (loss)                   |       | 101.68   |       | 15.47    |       | 24.28    |       |
| Change in  unrealized                             |       | (5.79    | )          | (3.46    | )          | (3.48    | )          |
| Interest income                                   |       | 4.31     |       | 10.77    |       | 11.23    |       |
| Expenses(1)                                       |       | (36.60   | )          | (14.74   | )          | (13.69   | )          |
|                                              |       |     |       |     |       |     |       |
| Net asset value,  end of year                     |       | $        | 314.15     |     | $          | 250.55   |       | $ | 242.51 |   |
|                                              |       |     |       |     |       |     |       |
| **Total  Return:**                                |       |     |       |     |       |     |       |
|                                              |       |     |       |     |       |     |       |
| Total return (2)                                  |       | 25.38    | %          | 3.31     | %          | 8.18     | %          |
|                                              |       |     |       |     |       |     |       |
| **Ratios  to Average Partners' Capital** (1)**:** |       |     |       |     |       |     |       |
|                                              |       |     |       |     |       |     |       |
| Expenses (2)                                      |       | 13.22    | %          | 6.24     | %          | 5.95     | %          |
| Net investment  loss                              |       | -11.62   | %          | -1.65    | %          | -1.10    | %          |

 

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(1) Includes theimpact of brokerage commission expenses.

(2) Includes theimpact of Performance fees of -7.20%, -0.33% and -0.01%, respectively.

 

See notes tofinancial statements.

 

5

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ML SELECT FUTURESI L.P.

(A DelawareLimited Partnership)

 

NOTES TO FINANCIALSTATEMENTS

 

1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Organization

 

ML Select Futures I L.P.(the “Partnership”) was organized under the Delaware Revised UniformPartnership Act in August 1995 and commenced trading activities on April 16,1996. The Partnership issues new units of limited partner interest (“Units”) atNet Asset Value as of the beginning of each calendar month. The Partnership engagesin the speculative trading of futures, options on futures and forward contractson a wide range of commodities. Sunrise Capital Partners, LLC (“Sunrise”) isthe trading advisor of the Partnership. Merrill Lynch Alternative InvestmentsLLC (“MLAI”), is the general partner of the Partnership. MLAI is an indirectwholly–owned subsidiary of Merrill Lynch & Co., Inc. (“MerrillLynch”). Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”),a wholly–owned subsidiary of Merrill Lynch, is the Partnership’s commoditybroker.  MLAI has agreed to maintain ageneral partner’s interest of at least 1% of the total capital in thePartnership.  MLAI and each LimitedPartner share in the profits and losses of the Partnership in proportion totheir respective interests in it.

 

Effective January 1,2009, Merrill Lynch & Co., Inc. became a wholly–owned subsidiaryof Bank of America Corporation pursuant to a merger agreement.

 

Interestsin the Partnership are not insured or otherwise protected by the Federal DepositInsurance Corporation or any other government authority.  Interests are not deposits or otherobligations of, and are not guaranteed by, Bank of America Corporation or anyof its affiliates or by any bank. Interests are subject to investment risks, including the possible lossof the full amount invested.

 

Estimates

 

The preparation of financial statements in conformitywith accounting principles generally accepted in the United States of America (“U.S.GAAP”) requires management to make estimates and assumptions that affect thereported amounts of assets and liabilities and disclosure of contingent assetsand liabilities at the date of the financial statements and the reportedamounts of revenues and expenses during the reporting period.  Actual results could differ from thoseestimates.

 

RevenueRecognition

 

Commodity futures,options on futures and forward contract transactions are recorded on the tradedate and open contracts are reflected in Net unrealized profit (loss) on opencontracts in the Statements of Financial Condition as the difference betweenthe original contract value and the market value (for those commodity interestsfor which market quotations are readily available) or at fair value.  The change in unrealized profit (loss) onopen contracts from one period to the next is reflected in Change in unrealizedin the Statements of Operations.

 

6

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Foreign CurrencyTransactions

 

The Partnership’s functional currency is the U.S. dollar; however, it transactsbusiness in currencies other than the U.S. dollar.  Assets and liabilities denominated incurrencies other than the U.S. dollar are translated into U.S. dollars at therates in effect at the dates of the Statements of Financial Condition.  Income and expense items denominated incurrencies other than the U.S. dollar are translated into U.S. dollars at therates in effect during the period.  Gainsand losses resulting from the translation to U.S. dollars are reported inRealized in the Statements of Operations.

 

Operating Expensesand Selling Commissions

 

MLAI pays allroutine operating expenses excluding the State of New Jersey and State of NewYork filing fees (which are borne by the Partnership) but including legal,accounting, printing, postage and similar administrative expenses of thePartnership.  MLAI receives anadministrative fee as well as a portion of the brokerage commissions paid toMLPF&S by the Partnership (see Note 4).

 

No sellingcommissions have been or are paid directly by the Limited Partners.  All selling commissions are paid by MLAI.

 

Cash at Broker

 

A portion of theassets maintained at MLPF&S is restricted cash required to meet maintenancemargin requirements. Included in cash deposits with the broker at December 31,2008 and 2007 is restricted cash for margin requirements of $3,079,224 and$26,426,863, respectively.

 

Income Taxes

 

No provision forincome taxes has been made in the accompanying financial statements as eachPartner is individually responsible for reporting income or loss based on suchPartner’s share of the Partnership’s income and expenses as reported for incometax purposes.

 

Distributions

 

The LimitedPartners are entitled to receive, equally per Unit, any distributions which maybe made by the Partnership.  No suchdistributions have been declared for the years ended December 31, 2008,2007 or 2006.

 

Subscriptions

 

Currently, thefund is closed to new investors. Existing investors only are allowed to add to their existingpositions.  Units are offered as of theclose of business at the end of each month. Units are purchased as of the first business day of any month at NetAsset Value, but the subscription request must be submitted at least threecalendar days before the end of the preceding month.  Subscriptions submitted less than three daysbefore the end of a month will be applied to Unit subscriptions as of thebeginning of the second month after receipt, unless revoked by MLAI.

 

7

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Redemptions

 

A Limited Partnermay redeem some or all of such Partner’s Units at Net Asset Value as of theclose of business on the last business day of any calendar month upon ten days’notice (“notice period”). Units redeemed on or before the end of the twelfthfull month after purchase will be assessed an early redemption charge of 4% oftheir Net Asset Value as of the date of redemption.  If an investor makes multiple investments inthe Partnership, investments are treated on a first–in, first–out basis indetermining whether a redemption charge is applicable. Redemption charges aresubtracted from redemption proceeds and paid to MLAI.

 

Redemption requests are accepted within the notice period.  The Partnership does not accept anyredemption requests after the notice period. All redemption requests received after the notice period will beprocessed for the following month.

 

Dissolution of thePartnership

 

The Partnershipwill terminate on December 31, 2020 or at an earlier date if certainconditions occur, as well as under certain other circumstances as set forth inthe Limited Partnership Agreement.

 

Indemnifications

 

In the normalcourse of business, the Partnership enters into contracts and agreements thatcontain a variety of representations and warranties and which provide generalindemnifications.  The Partnership’smaximum exposure under these arrangements is unknown, as this would involvefuture claims that may be made against the Partnership that have not yetoccurred.  The Partnership expects therisk of any future obligation under these indemnifications to be remote.

 

8

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2.                     CONDENSEDSCHEDULE OF INVESTMENTS

 

The Partnership’sinvestments, defined as Net unrealized profit (loss) on open contracts on theStatements of Financial Condition, as of December 31, 2008 and 2007, areas follows:

 
| **2008**                            | ** ** | **Long Positions**       | ** ** | **Short Positions**           | ** ** | **Net Unrealized**                     | ** ** | ** **                    | ** ** | ** **                         | ** ** |
|-------------------------------------|------------|-------------------------------|------------|------------------------------------|------------|---------------------------------------------|------------|-------------------------------|------------|------------------------------------|------------|
| **Commodity Industry  Sector** | ** ** | **Number of  Contracts** | ** ** | **Unrealized  Profit (Loss)** | ** ** | **Percent of  Partners' Capital** | ** ** | **Number of  Contracts** | ** ** | **Unrealized  Profit (Loss)** | ** ** | **Percent of  Partners' Capital** | ** ** | **Profit (Loss)  on Open Positions** | ** ** | **Percent of  Partners' Capital** | ** ** | **Maturity Dates** | ** ** |
|                                |       |                          |       |                               |       |                                        |       |                          |       |                               |       |   |   |   |   |   |   |   |   |
| Agriculture                         |       | —                        |       | $                                  | —     |                                        | 0.00       | %                             | (265       | )                                  | $          | (67,707 | ) | -0.03 | % | $ | (67,707 | ) | -0.03 | % | March 09 |   |
| Currencies                          |       | 1,979,398                     |       | 465,793                            |       | 0.22                                        | %          | (1,126,285                    | )          | (1,811,557                         | )          | -0.84 | % | (1,345,764 | ) | -0.62 | % | March 09 |   |
| Interest rates                      |       | 550                           |       | 2,010,634                          |       | 0.93                                        | %          | —                        |       | —                             |       | 0.00 | % | 2,010,634 |   | 0.93 | % | March 09 - December 09 |   |
| Energy                              |       | —                        |       | —                             |       | 0.00                                        | %          | (59                           | )          | 238,129                            |       | 0.11 | % | 238,129 |   | 0.11 | % | February 09 - June 09 |   |
| Metals                              |       | 131                           |       | (2,830,888                         | )          | -1.31                                       | %          | (182                          | )          | 6,510,691                          |       | 3.02 | % | 3,679,803 |   | 1.71 | % | January 09 - March 09 |   |
| Stock indices                       |       | —                        |       | —                             |       | 0.00                                        | %          | (6                            | )          | (18,933                            | )          | -0.01 | % | (18,933 | ) | -0.01 | % | March 09 |   |
|                                |       |                          |       |                               |       |                                        |       |                          |       |                               |       |   |   |   |   |   |   |   |   |
| Total                               |       |                          |       | $                                  | (354,461   | )                                           | -0.16      | %                             |       |                               | $          | 4,850,623 |   | 2.25 | % | $ | 4,496,162 |   | 2.09 | % |   |   |
| ** **                          | ** ** | ** **                    | ** ** | ** **                         | ** ** | ** **                                  | ** ** | ** **                    | ** ** | ** **                         | ** ** |
| **2007**                            | ** ** | **Long Positions**       | ** ** | **Short Positions**           | ** ** | **Net Unrealized**                     | ** ** | ** **                    | ** ** | ** **                         | ** ** |
| **Commodity Industry  Sector** | ** ** | **Number of  Contracts** | ** ** | **Unrealized  Profit (Loss)** | ** ** | **Percent of  Partners' Capital** | ** ** | **Number of  Contracts** | ** ** | **Unrealized  Profit (Loss)** | ** ** | **Percent of  Partners' Capital** | ** ** | **Profit (Loss)  on Open Positions** | ** ** | **Percent of  Partners' Capital** | ** ** | **Maturity Dates** | ** ** |
|                                |       |                          |       |                               |       |                                        |       |                          |       |                               |       |   |   |   |   |   |   |   |   |
| Agriculture                         |       | 817                           |       | $                                  | 867,040    |                                        | 0.38       | %                             | —     |                               | $          | — |   | 0.00 | % | $ | 867,040 |   | 0.38 | % | March 08 |   |
| Currencies                          |       | 542,830                       |       | (2,307,031                         | )          | -1.02                                       | %          | (6,499,625                    | )          | 1,998,163                          |       | 0.89 | % | (308,868 | ) | -0.14 | % | March 08 |   |
| Interest rates                      |       | 3,427                         |       | 1,560,466                          |       | 0.69                                        | %          | (1,230                        | )          | (270,050                           | )          | -0.12 | % | 1,290,416 |   | 0.57 | % | March 08 - December 08 |   |
| Energy                              |       | 394                           |       | 2,823,271                          |       | 1.25                                        | %          | —                        |       | —                             |       | 0.00 | % | 2,823,271 |   | 1.25 | % | January 08 - March 08 |   |
| Metals                              |       | 142                           |       | 10,748                             |       | 0.00                                        | %          | (484                          | )          | 1,428,066                          |       | 0.63 | % | 1,438,814 |   | 0.64 | % | Febuary 08 - March 08 |   |
| Stock indices                       |       | 117                           |       | 178,051                            |       | 0.08                                        | %          | (291                          | )          | 1,282,136                          |       | 0.57 | % | 1,460,187 |   | 0.65 | % | March 08 |   |
|                                |       |                          |       |                               |       |                                        |       |                          |       |                               |       |   |   |   |   |   |   |   |   |
| Total                               |       |                          |       | $                                  | 3,132,545  |                                        | 1.38       | %                             |       |                               | $          | 4,438,315 |   | 1.97 | % | $ | 7,570,860 |   | 3.35 | % |   |   |
|                                     |            |                               |            |                                    |            |                                             |            |                               |            |                                    |            |  |  |  |  |  |  |  |  |  |  |  |  |

 

No individualcontract’s unrealized profit or loss comprised greater than 5% of the Partners’Capital as of December 31, 2008 and 2007.

 

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3.               FAIR VALUE OF INVESTMENTS

 

In September 2006,the Financial Accounting Standards Board (“FASB”) issued Statement of FinancialAccounting Standards No. 157, Fair Value Measurement (“FAS 157”). FAS 157defines fair value, establishes a framework for measuring fair value andexpands disclosures about fair value measurements. The Partnership adopted FAS157 as of January 1, 2008. The adoption of FAS 157 did not have a materialimpact on the Partnership’s financial statements.

 

Fair value of aninvestment is the amount that would be received to sell the investment in anorderly transaction between market participants at the measurement date (i.e.the exit price).

 

FAS 157 established ahierarchical disclosure framework which prioritizes and ranks the level ofmarket price observability used in measuring investments at fair value. Marketprice observability is impacted by a number of factors, including the type ofinvestment and the characteristics specific to the investment. Investments withreadily available active quoted prices or for which fair value can be measuredfrom actively quoted prices generally will have a higher degree of market priceobservability and a lesser degree of judgment used in measuring fair value.

 

Investments measured andreported at fair value are classified and disclosed in one of the followingcategories:

 

Level I — Quoted pricesare available in active markets for identical investments as of the reportingdate. The type of investments included in Level I are publicly traded investments.As required by FAS 157, the Partnership does not adjust the quoted price forthese investments even in situations where the Partnership holds a largeposition and a sale could reasonably impact the quoted price.

 

Level II — Pricing inputsare other than quoted prices in active markets, which are either directly orindirectly observable as of the reporting date, and fair value is determinedthrough the use of generally accepted and understood models or other valuationmethodologies. Investments which are generally included in this category areinvestments valued using market data.

 

Level III — Pricinginputs are unobservable and include situations where there is little, if any,market activity for the investment. Fair value for these investments are determinedusing valuation methodologies that consider a range of factors, including butnot limited to the nature of the investment, local market conditions, tradingvalues on public exchanges for comparable securities, current and projectedoperating performance and financing transactions subsequent to the acquisitionof the investment. The inputs into the determination of fair value requiresignificant management judgment. Due to the inherent uncertainty of theseestimates, these values may differ materially from the values that would havebeen used had a ready market for these investments existed. Investments thatare included in this category generally are privately held debt and equitysecurities.

 

In certain cases,the inputs used to measure fair value may fall into different levels of thefair value hierarchy. In such cases, an investment’s level within the fairvalue hierarchy is based on the lowest level of input that is significant tothe fair value measurement. MLAI’s assessment of the significance of aparticular input to the fair value measurement in its entirety requiresjudgment, and considers factors specific to the investment.

 

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The followingtable summarizes the valuation of the Partnership’s investment by the above FAS157 fair value hierarchy levels as of December 31, 2008.

 
| ** **                                      | ** ** | **Total** | ** ** | **Level I** | ** ** | **Level II** | ** ** | **Level III** | ** ** |
|-------------------------------------------------|------------|-----------|------------|------------------|------------|-------------------|------------|--------------------|------------|
| Net unrealized  profit (loss) on open contracts |       | $         | 4,496,162  |             | $          | 4,496,162         |       | N/A                |       | N/A |   |
|                                                 |            |           |            |                  |            |                   |            |                    |            |  |  |

 

4.               RELATEDPARTY TRANSACTIONS

 

The Partnership’s U.S.dollar assets are maintained at MLPF&S. On assets held in U.S. dollars,Merrill Lynch credits the Partnership with interest at the prevailing 91-dayU.S. Treasury bill rate.  The Partnershipis credited with interest on any of its assets and net gains actually held byMLPF&S in non-U.S. dollar currencies at a prevailing local rate received byMerrill Lynch.  Merrill Lynch may derivecertain economic benefit, in excess of the interest, which Merrill Lynch paysto the Partnership, from possession of such assets.

 

Merrill Lynch charges thePartnership, at prevailing local interest rates, for financing realized andunrealized losses on the Partnership’s non-U.S. dollar-denominatedpositions.  Such amounts are nettedagainst interest income due to the insignificance of such amounts.

 

The Partnership paysbrokerage commissions to MLPF&S at a flat monthly rate equal to 0.458 of 1%(a 5.50% annual rate) of the Partnership’s month-end trading assets. ThePartnership pays administrative fees to MLAI at a flat monthly rate equal to0.021 of 1% (a 0.25% annual rate) of the Partnership’s month-end tradingassets. Month-end trading assets are not reduced, for purposes of calculatingbrokerage commissions and administrative fees, by any accrued brokerage commissions,administrative fees, Profit Shares or other fees or charges.

 

Until 2007, thePartnership reimbursed MLAI for payment of the actual State of New Jerseyannual filing fee (“NJ filing fees”) assessed on a per partner basis.  Filing fees receivable represents refunds onsuch payments.  MLAI no longer pays theNJ filing fees on behalf of the Partnership. The Partnership will also pay anyState of New York filing fees for calendar year 2008 and beyond.

 

MLPF&S paysSunrise a monthly consulting fee of 0.083 of 1% (a 1% annual rate) of themonth-end trading assets, after reduction for a portion of the brokeragecommissions.

 

5.               ADVISORY AGREEMENT

 

The Partnership entered into an Advisory Agreementwith Sunrise.  The Advisory Agreementbetween the Partnership and Sunrise continues to be in effect, subject tocertain renewal rights exercisable by the Partnership.  Sunrise determines the commodity futures,options on futures and forward contracts traded by the Partnership, subject tocertain trading policies and to certain rights reserved by MLAI.

 

Profit Shares equal to 23% of any New Trading Profit,as defined, as of the end of each calendar year are paid to Sunrise.  Profit Shares are also paid out in respect ofUnits redeemed (to the extent they exceed the number of Units purchased) as ofthe end of interim months during a calendar year, to the extent of theapplicable percentage of any New Trading Profit attributable to such Units.

 

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6.   WEIGHTED AVERAGE UNITS

 

The weighted average number of Units outstanding iscomputed for purposes of calculating net income (loss) per weighted averageUnit.  The weighted average number ofUnits outstanding for the years ended December 31, 2008, 2007 and 2006equaled the Units outstanding as of such date, adjusted proportionately forUnits sold or redeemed based on the respective length of time each wasoutstanding during such year.

 

 7.    RECENTACCOUNTING PRONOUNCEMENTS

 

In March 2008, the FASB released Statement ofFinancial Accounting Standards No. 161, *Disclosuresabout Derivative Instruments and Hedging Activities*— an amendmentto FASB Statement No. 133 (“FAS 161”). FAS 161 requires qualitativedisclosures about objectives and strategies for using derivatives, quantitativedisclosures about fair value amounts of and gains and losses on derivativeinstruments, and disclosures about credit-risk related contingent features inderivative agreements. The application of FAS 161 is required for fiscal yearsbeginning after November 15, 2008 and interim periods within those fiscalyears. Currently, the Partnership is evaluating the implications of FAS 161 onits financial statements.

 

InMay 2008, the FASB issued Statement of Financial Accounting Standards No. 162,“*The Hierarchy of Generally Accepted AccountingPrinciples*” (“FAS 162”). FAS 162 identifies the sources ofaccounting principles and the framework for selecting the accounting principlesused in preparing financial statements of nongovernmental entities that arepresented in conformity with U.S. GAAP. Currently, U.S. GAAP hierarchy isprovided in the American Institute of Certified Public Accountants U.S.Auditing Standards (“AU”) Section 411, “*The Meaningof Present Fairly in Conformity With Generally Accepted Accounting Principles*”.  The Partnership does not expect the adoptionof FAS 162 to have an impact on its financial statements.

 

8.         MARKET ANDCREDIT RISKS

 

The nature of thisPartnership has certain risks, which cannot all be presented on the financialstatements.  The following summarizessome of those risks.

 

Market Risk

 

Derivative instrumentsinvolve varying degrees of market risk. Changes in the level or volatility of interest rates, foreign currencyexchange rates or the market values of the financial instruments or commoditiesunderlying such derivative instruments frequently result in changes in thePartnership’s net unrealized profit (loss) on such derivative instruments asreflected in the Statements of Financial Condition.  The Partnership’s exposure to market risk isinfluenced by a number of factors, including the relationships among thederivative instruments held by the Partnership as well as the volatility andliquidity of the markets in which the derivative instruments are traded.  Investments in foreign markets may alsoentail legal and political risks.

 

MLAI has procedures in place intended to controlmarket risk exposure, although there can be no assurance that they will, infact, succeed in doing so.  Theseprocedures focus primarily on monitoring the trading of Sunrise, calculatingthe Net Asset Value of the Partnership as of the close of business on each dayand reviewing outstanding positions for over-concentrations.  While MLAI does not itself

 

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intervene in the markets to hedge or diversify thePartnership’s market exposure, MLAI may urge Sunrise to reallocate positions inan attempt to avoid over-concentrations. However, such interventions are unusual and unless it appears thatSunrise has begun to deviate from past practice or trading policies or to betrading erratically, MLAI’s basic risk control procedures consist simply of theongoing process of advisor monitoring, with the market risk controls beingapplied by Sunrise.

 

Credit Risk

 

The risks associated withexchange-traded contracts are typically perceived to be less than thoseassociated with over-the-counter (non-exchange-traded) transactions, becauseexchanges typically (but not universally) provide clearinghouse arrangements inwhich the collective credit (in some cases limited in amount, in some casesnot) of the members of the exchange is pledged to support the financialintegrity of the exchange.  Inover-the-counter transactions, on the other hand, traders must rely solely onthe credit of their respective individual counterparties.  Margins, which may be subject to loss in theevent of a default, are generally required in exchange trading, andcounterparties may also require margin in the over-the-counter markets.

 

The credit risk associatedwith these instruments from counterparty nonperformance is the net unrealizedprofit on open contracts, if any, included in the Statements of FinancialCondition.  The Partnership attempts tomitigate this risk by dealing exclusively with Merrill Lynch entities asclearing brokers.

 

The Partnership, in itsnormal course of business, enters into various contracts, with MLPF&Sacting as its commodity broker.  Pursuantto the brokerage agreement with MLPF&S (which includes a netting arrangement),to the extent that such trading results in receivables from and payables toMLPF&S, these receivables and payables are offset and reported as a netreceivable or payable and included in Net unrealized profit (loss) on opencontracts on the Statements of Financial Condition.

 

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|   | *     *      *     *     *      *     *     *      *     *      * |   |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   |                                                                                                                                                                                                                                                                           |   |
|   | To the best of  the knowledge and belief of the                                                                                                                                                                                                                                |   |
|   | undersigned, the  information contained in this                                                                                                                                                                                                                                |   |
|   | report  is accurate and complete.                                                                                                                                                                                                                                              |   |
|   | /s/ Barbra E. Kocsis                                                                                                                                                                                                                                                           |   |
|   | Barbra E. Kocsis                                                                                                                                                                                                                                                               |   |
|   | Chief Financial  Officer                                                                                                                                                                                                                                                       |   |
|   | Merrill Lynch  Alternative Investments LLC                                                                                                                                                                                                                                     |   |
|   | General Partner  of                                                                                                                                                                                                                                                            |   |
|   | ML Select  Futures I L.P.                                                                                                                                                                                                                                                      |   |

 

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