<PAGE>






                           THE SECTOR STRATEGY FUND-SM-VI L.P.
                           (A DELAWARE LIMITED PARTNERSHIP)



                           Financial Statements for the years ended
                           December 31, 2000, 1999 and 1998
                           and Independent Auditors' Report






[MERRILL LYNCH LOGO]






<PAGE>


THE SECTOR STRATEGY FUND-SM-VI L.P.
(A DELAWARE LIMITED PARTNERSHIP)
 ------------------------------


TABLE OF CONTENTS
--------------------------------------------------------------------------------

                                                                           PAGE

INDEPENDENT AUDITORS' REPORT                                                 1

FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 2000, 1999 AND 1998:

  Statements of Financial Condition                                          2

  Statements of Operations                                                   3

  Statements of Changes in Partners' Capital                                 4

  Notes to Financial Statements                                           5-11













<PAGE>


INDEPENDENT AUDITORS' REPORT




To the Partners of
The SECTOR Strategy Fund-SM-VI L.P.:

We have audited the accompanying statements of financial condition of The SECTOR
Strategy Fund-SM-VI L.P. (the "Partnership") as of December 31, 2000 and 1999,
and the related statements of operations and of changes in partners' capital for
each of the three years in the period ended December 31, 2000. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of The SECTOR Strategy Fund-SM-VI L.P. as of
December 31, 2000 and 1999, and the results of its operations and changes in its
partners' capital for each of the three years in the period ended December 31,
2000 in conformity with accounting principles generally accepted in the United
States of America.


DELOITTE & TOUCHE LLP


New York, New York
February 5, 2001

<PAGE>


THE SECTOR STRATEGY FUND-SM-VI L.P.
(A DELAWARE LIMITED PARTNERSHIP)
 ------------------------------

STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31, 2000 AND 1999
--------------------------------------------------------------------------------
 ASSETS                                                 2000             1999
                                                     ------------   ------------
 Investment in MM LLC (Note 6)                       $ 12,483,383   $ 15,298,518
 Receivable from investment in MM LLC (Note 6)            221,692        313,481
                                                     ------------   ------------
         TOTAL                                       $ 12,705,075   $ 15,611,999
                                                     ============   ============
 LIABILITIES AND PARTNERS' CAPITAL
 LIABILITIES:
       Redemptions payable (Note 1)                  $    221,692   $    313,481
                                                     ------------   ------------
 Total liabilities                                        221,692        313,481
                                                     ------------   ------------
PARTNERS' CAPITAL:
    General Partner (1,059 Units and 1,993 Units)         135,803        241,975
    Limited Partners (96,298 Units and 124,018 Units)  12,347,580     15,056,543
                                                     ------------   ------------
  Total partners' capital                              12,483,383     15,298,518
                                                     ------------   ------------
      TOTAL                                          $ 12,705,075   $ 15,611,999
                                                     ============   ============
 NET ASSET VALUE PER UNIT
  (Based on 97,357 and 126,011 Units outstanding)    $     128.22   $     121.41
                                                     ============   ============

See notes to financial statements.


                                     -2-


<PAGE>


THE SECTOR STRATEGY FUND-SM-VI L.P.
(A DELAWARE LIMITED PARTNERSHIP)
 ------------------------------

<TABLE>
<CAPTION>

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
-----------------------------------------------------------------------------------------------



  REVENUES:                                             2000            1999            1998
                                                   ------------    ------------    ------------
<S>                                                <C>             <C>             <C>
    Trading loss:
       Realized (Note 1)                           $     -         $     -         $  (267,771)
       Change in unrealized (Note 1)                     -               -            (112,024)
                                                   ------------    ------------    ------------
          Total trading results                          -               -            (379,795)
       Interest income (Note 2)                          -               -             289,431
                                                   ------------    ------------    ------------
          Total revenues                                 -               -             (90,364)
                                                   ------------    ------------    ------------
   EXPENSES:

      Brokerage commissions (Note 2)                     -               -             166,505
      Profit Shares (Note 3)                             -               -                -
      Administrative fees (Note 2)                       -               -               4,757
                                                   ------------    ------------    ------------
          Total expenses                                 -               -             171,262
                                                   ------------    ------------    ------------
  INCOME (LOSS) FROM INVESTMENTS (Note 6)              603,225        (213,362)      1,036,655
                                                   ------------    ------------    ------------
  NET INCOME (LOSS)                                $   603,225     $  (213,362)    $   775,029
                                                   ============    ============    ============
  NET INCOME (LOSS) PER UNIT:

      Weighted average number of General Partner and
       Limited Partner Units outstanding (Note 4)      111,328         141,425         191,611
                                                   ============    ============    ============
      Net income (loss) per weighted average
         General Partner and Limited
         Partner Unit                              $      5.42     $     (1.51)    $      4.04
                                                   ============    ============    ============
</TABLE>

See notes to financial statements.


                                        -3-

<PAGE>


THE SECTOR STRATEGY FUND-SM-VI L.P.
(A DELAWARE LIMITED PARTNERSHIP)
-------------------------------

<TABLE>
<CAPTION>


STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
---------------------------------------------------------------------------------------------------
                                                General        Limited
                                Units           Partner        Partners         Total
                             ------------    ------------    ------------    ------------
<S>                          <C>             <C>             <C>             <C>
PARTNERS' CAPITAL,
  DECEMBER 31, 1997             228,821      $   820,070     $ 26,098,411    $ 26,918,481

Redemptions                     (69,498)        (571,475)      (7,550,852)     (8,122,327)

Net income (loss)                 -               (3,763)         778,792         775,029
                             ------------    ------------    ------------    ------------
PARTNERS' CAPITAL,
  DECEMBER 31, 1998             159,323          244,832      19,326,351       19,571,183

Redemptions                     (33,312)            -         (4,059,303)      (4,059,303)

Net loss                          -               (2,857)       (210,505)        (213,362)
                             ------------    ------------    ------------    ------------
PARTNERS' CAPITAL,
  DECEMBER 31, 1999             126,011          241,975       15,056,543      15,298,518

Redemptions                     (28,654)        (112,973)      (3,305,387)     (3,418,360)

Net income                        -                6,801          596,424         603,225
                             ------------    ------------    ------------    ------------
PARTNERS' CAPITAL,
  DECEMBER 31, 2000               97,357     $   135,803     $ 12,347,580    $ 12,483,383
                             ============    ============    ============    ============
</TABLE>

See notes to financial statements.


                                     -4-


<PAGE>


THE SECTOR STRATEGY FUND-SM-VI L.P.
(A DELAWARE LIMITED PARTNERSHIP)
 ------------------------------

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     ORGANIZATION

     The SECTOR Strategy Fund-SM-VI L.P. (the "Partnership") was organized under
     the Delaware Revised Uniform Limited Partnership Act on April 23, 1993 and
     commenced trading activities on September 10, 1993. The Partnership engages
     (currently, through an investment in a limited liability company (see
     below)) in the speculative trading of futures, options on futures, forwards
     and options on forward contracts on a wide range of commodities. Merrill
     Lynch Investment Partners Inc. ("MLIP"), a wholly-owned subsidiary of
     Merrill Lynch Group Inc., which, in turn, is a wholly-owned subsidiary of
     Merrill Lynch & Co., Inc. ("Merrill Lynch"), is the general partner of the
     Partnership. MLIP has agreed to maintain a general partnership interest in
     the Partnership of at least 1% of the total capital of the Partnership.
     MLIP and each Limited Partner share in the profits and losses of the
     Partnership in proportion to their respective interests in it.

     MLIP, an indirect subsidiary of Merrill Lynch, became a member of Merrill
     Lynch Investment Managers ("MLIM") - Alternative Investments Group during
     October 2000. MLIM's Alternative Investments Group creates and manages a
     variety of alternative investment products, including managed futures
     funds, hedge funds, funds of funds, exchange funds and private equity
     funds. MLIP, organized in 1986, is the hedge fund, fund of funds and
     managed futures sponsor within MLIM's Alternative Investments Group.

     Many of the multi-advisor funds (the "Multi-Advisor Funds") sponsored by
     MLIP allocate their assets to a number of the same independent advisors
     (the "Advisors"). However, because different Multi-Advisor Funds had
     historically allocated assets to slightly different Advisor groups, the
     Multi-Advisor Funds often were required to open and maintain individual
     trading accounts with each Advisor. MLIP consolidated the trading accounts
     of nine of its Multi-Advisor Funds (including the Partnership) as of June
     1, 1998. The consolidation was achieved by having these Multi-Advisor Funds
     close their existing trading accounts and invest in a limited liability
     company, ML Multi-Manager Portfolio L.L.C. ("MM LLC"), a Delaware limited
     liability company, which opened a single account with each Advisor
     selected. MM LLC is managed by MLIP, has no investors other than the
     Multi-Advisor Funds and serves solely as the vehicle through which the
     assets of such Multi-Advisor Funds are combined in order to be managed
     through single rather than multiple accounts. As of September 2000, two
     additional Multi-Advisor Funds were added to MM LLC. The placement of
     assets into MM LLC did not change the operations or fee structure of the
     Partnership; therefore, the following notes relate to the operation of the
     Partnership through its investment in MM LLC. The administrative authority
     over the Partnership remains with MLIP. MLIP, on an ongoing basis, may
     change the number of Multi-Advisor Funds investing in MM LLC.

     MLIP selects the Advisors to manage MM LLC's assets, and allocates and
     reallocates such trading assets among existing, replacement and additional
     Advisors. Merrill Lynch Futures Inc. ("MLF"), a Merrill Lynch affiliate, is
     MM LLC's commodity broker.

     Prior to January 1, 2001, MLIP determined what percentage of the
     Partnership's total capital would be invested in MM LLC, in an attempt
     to maximize the percentage of the Partnership's assets invested in MM LLC,
     while managing the Partnership's

                                      -5-

<PAGE>

     exposure to prevent Merrill Lynch from having been required to make a
     payment to the Partnership pursuant to its guarantee under the
     Partnership's principal protection structure (See Note 5).

     CASH MANAGEMENT

     As of June 2000, the Partnership, through MM LLC, began an Income
     Enhancement Program, whereas, a portion of its assets is invested in
     Commercial Paper. This was done to improve the yield on the cash assets not
     required for margin for trading purposes at MLF. These holdings generally
     have maturities of 30, 60 or 90 days and are held to maturity.

     ESTIMATES

     The preparation of financial statements in conformity with accounting
     principles generally accepted in the United States of America requires
     management to make estimates and assumptions that affect the reported
     amounts of assets and liabilities and disclosure of contingent assets and
     liabilities at the date of the financial statements and the reported
     amounts of revenues and expenses during the reporting period. Actual
     results could differ from those estimates.

     REVENUE RECOGNITION

     Commodity futures, options on futures, forwards and options on forward
     contracts are recorded on the trade date, and open contracts are reflected
     in net unrealized profit (loss) on open contracts in the Statements of
     Financial Condition of MM LLC at the difference between the original
     contract value and the market value (for those commodity interests for
     which market quotations are readily available) or at fair value. The change
     in unrealized profit (loss) on open contracts from one period to the next
     is reflected in Change in unrealized under Trading (loss) profit in the
     Statements of Operations (of MM LLC subsequent to June 1, 1998). As a
     result of the investment in MM LLC, there were no open contracts as of
     December 31, 2000, 1999 or 1998. See Note 6 for discussion of revenue
     recognition for the Partnership's investment in Trading LLCs and MM LLC.

     FOREIGN CURRENCY TRANSACTIONS

     The Partnership's functional currency is the U.S. dollar; however, it
     transacts business in currencies other than the U.S. dollar through MM LLC.
     Assets and liabilities denominated in currencies other than the U.S. dollar
     are translated into U.S. dollars at the rates in effect at the dates of the
     Statements of Financial Condition. Income and expense items denominated in
     currencies other than the U.S. dollar are translated into U.S. dollars at
     the rates in effect during the period. Gains and losses resulting from the
     translation to U.S. dollars are reported in total trading results.

     OPERATING EXPENSES

     MLIP pays for all routine operating costs (including legal, accounting,
     printing, postage and similar administrative expenses) of the Partnership.
     MLIP receives an administrative fee as well as a portion of the brokerage
     commissions paid to MLF by the Partnership through MM LLC.

     INCOME TAXES

     No provision for income taxes has been made in the accompanying financial
     statements as each Partner is individually responsible for reporting income
     or loss based on such Partner's respective share of the Partnership's
     income and expenses as reported for income tax purposes.

     DISTRIBUTIONS

     The Limited Partners are entitled to receive, equally per Unit, any
     distribution which may be made by the Partnership. No such distributions
     have been declared for the years ended December 31, 2000, 1999 or 1998.


                                    -6-

<PAGE>


     REDEMPTIONS

     A Limited Partner may redeem some or all of such Partner's Units at the Net
     Asset Value as of the close of business on the last business day of any
     month upon ten calendar days' notice.

     DISSOLUTION OF THE PARTNERSHIP

     The Partnership will terminate on December 31, 2023 or at an earlier date
     if certain conditions occur, as well as under certain other circumstances
     as set forth in the Limited Partnership Agreement.

2.   RELATED PARTY TRANSACTIONS

     A portion of the Partnership's U.S. dollar assets invested in MM LLC is
     maintained at MLF. On assets held in U.S. dollars, Merrill Lynch credits MM
     LLC with interest at the prevailing 91-day U.S. Treasury bill rate. MM LLC
     is credited with interest on any of its assets and net gains actually held
     by Merrill Lynch in non-U.S. dollar currencies at a prevailing local rate
     received by Merrill Lynch. Merrill Lynch may derive certain economic
     benefit, in excess of the interest which Merrill Lynch pays to MM LLC, from
     possession of such assets.

     Merrill Lynch charges the Partnership, through MM LLC, Merrill Lynch's cost
     of financing realized and unrealized losses on MM LLC's non-U.S.
     dollar-denominated positions.

     Through its investment in MM LLC, the Partnership pays brokerage
     commissions to MLF, at a flat monthly rate equal to .729 of 1% (an 8.75%
     annual rate) and pays MLIP a monthly administrative fee of .021 of 1% (a
     0.25% annual rate) of the Partnership's month-end assets allocated to
     trading. Month-end assets are not reduced for purposes of calculating
     brokerage commissions and administrative fees by any accrued brokerage
     commissions, administrative fees, Profit Shares or other fees or charges.

     Prior to the investment in MM LLC, MLIP estimates that the round-turn
     equivalent commission rate charged to the Partnership for the year ended
     December 31, 1998 was approximately $54 (not including, in calculating
     round-turn equivalents, forward contracts on a futures-equivalent basis).
     The estimated aggregate round-turn commission rate for MM LLC for the years
     ended December 31, 2000 and 1999 are $82 and $136, respectively.

     MLF currently pays the Advisors, through MM LLC, annual Consulting Fees up
     to 2.00% of the Partnership's average month-end assets allocated to them
     for management, after reduction for a portion of the brokerage commissions.

3.   ADVISORY AGREEMENTS

     Pursuant to the Advisory Agreements among the Advisors, MM LLC and MLIP,
     the Advisors determine the commodity futures, options on futures, forwards
     and options on forward contracts traded on behalf of MM LLC, subject to
     certain rights reserved by MLIP. The Advisory Agreements generally renew
     annually after they are entered into, subject to certain renewal rights.

     Profit Shares, currently ranging from 20% to 23% of any New Trading Profit,
     as defined, recognized by each Advisor considered individually irrespective
     of the overall performance of the Partnership, either as of the end of each
     calendar quarter or year and upon the net reallocation of assets away from
     an Advisor,

                                    -7-

<PAGE>

     are paid by MM LLC (Trading LLCs prior to June 1, 1998) to each
     of the Advisors. Profit Shares are also paid out in respect of Units
     redeemed as of the end of interim months, to the extent of the applicable
     percentage of any such New Trading Profit attributable to such Units.

4.   WEIGHTED AVERAGE UNITS

     The weighted average number of Units outstanding was computed for purposes
     of calculating net income per weighted average Unit. The weighted average
     number of Units outstanding for the years ended December 31, 2000, 1999 and
     1998 equals the Units outstanding as of such date, adjusted proportionately
     for Units redeemed based on the respective length of time each was
     outstanding during the year.

5.   MERRILL LYNCH & CO., INC. GUARANTEE

     Merrill Lynch guaranteed to the Partnership that it would have
     sufficient Net Assets as of the Principal Assurance Date, that the Net
     Asset Value per Unit as of such Principal Assurance Date would equal, after
     adjustment for all liabilities to third parties, not less than the minimum
     assured Net Asset Value per Unit. On January 1, 1999, the Partnership
     restarted its trading program for an additional Time Horizon of two years'
     duration and a new Principal Assurance Date of December 31, 2000, with a
     minimum assured Net Asset Value per Unit of $98.27. On January 1, 2001, the
     Partnership did not renew its guarantee. Therefore, Limited Partners no
     longer have any assurance of a minimum Net Asset Value if they remain in
     the Partnership until a stated date in the future.

6.   INVESTMENTS

     Prior to investing in MM LLC, the Partnership placed assets under the
     management of certain of the Advisors by investing in private limited
     liability companies ("Trading LLCs) formed by MLIP. The only members of the
     Trading LLCs were commodity pools sponsored by MLIP. Each Trading LLC
     traded under the management of a single Advisor pursuant to a single
     strategy at a uniform degree of leverage. Placing assets with an Advisor
     through a Trading LLC rather than a managed account had no economic effect
     on the Partnership, except to the extent that the Partnership benefited
     from the Advisor not having to allocate trades among a number of different
     accounts (rather than acquiring a single position for the Trading LLC as a
     whole).

     The investments in MM LLC, and previously certain Trading LLCs, are
     reflected in the financial statements at fair value based upon the
     Partnership's interest in MM LLC or certain Trading LLCs, respectively.
     Fair value of the investment in MM LLC is equal to the market value of the
     net assets of MM LLC allocable to the Partnership as an investor. The
     resulting difference between cost and fair value is reflected on the
     Statements of Operations as Income (loss) from investments.


                                    -8-

<PAGE>


Total revenues and fees with respect to such investments are set forth as
follows:

<TABLE>
<CAPTION>

 For the year ended          Total           Brokerage           Administrative             Profit          Income from
 December 31, 2000         Revenues         Commissions               Fees                  Shares          Investment
---------------------  ---------------    ----------------    ---------------------   -----------------  ------------------
<S>                    <C>                <C>                 <C>                     <C>                <C>
MM LLC                  $  2,032,021       $   1,124,411         $       32,126           $ 272,259        $    603,225
                       ===============    ================    =====================   =================  ==================

<CAPTION>

 For the year ended          Total           Brokerage           Administrative             Profit           Loss from
 December 31, 1999         Revenues         Commissions               Fees                  Shares          Investment
---------------------  ---------------    ----------------    ---------------------   -----------------  ------------------
<S>                    <C>                <C>                 <C>                     <C>                <C>
MM LLC                  $  1,430,498       $   1,518,739         $       43,393             81,728             (213,362)
                       ===============    ================    =====================   =================  ==================

<CAPTION>
                                                                                                           Income (Loss)
 For the year ended          Total           Brokerage           Administrative             Profit             from
 December 31, 1998         Revenues         Commissions               Fees                  Shares          Investments
---------------------  ---------------    ----------------    ---------------------   -----------------  ------------------
<S>                    <C>                <C>                 <C>                     <C>                <C>
JWH LLC                  $ (613,096)          $  191,892         $        5,483          $      -           $  (810,471)
Chesapeake LLC              636,803              195,824                  5,595            87,023               348,361
SJO LLC                     392,486              186,551                  5,330            22,479               178,126
MM LLC                    2,685,824              929,533                 26,558           409,094             1,320,639
                       ---------------    ----------------    ---------------------   -----------------  ------------------
Total                    $3,102,017           $1,503,800         $       42,966          $518,596            $1,036,655
                       ===============    ================    =====================   =================  ==================
</TABLE>


Condensed statements of financial condition and statements of operations for MM
LLC, JWH LLC, Chesapeake LLC and SJO LLC are set forth as follows:


<TABLE>
<CAPTION>

                                    MM LLC                     MM LLC
                              December 31, 2000           December 31, 1999
                            -----------------------    ------------------------
<S>                         <C>                        <C>
       Assets                     $252,995,756                $100,901,677
                            =======================    ========================

       Liabilities                $  5,383,789                $  2,906,392
       Members' Capital            247,611,967                  97,995,285
                            -----------------------    ------------------------

       Total                      $252,995,756                $100,901,677
                            =======================    ========================

<CAPTION>
                              For the year ended          For the year ended
                              December 31, 2000           December 31, 1999
                            -----------------------    ------------------------
<S>                         <C>                        <C>
       Revenues                   $28,324,323               $ 9,090,190

       Expenses                    13,557,899                10,152,017
                            -----------------------    ------------------------

       Net Income (loss)          $14,766,424               $(1,061,827)
                            =======================    ========================
</TABLE>


                                     -9-



<TABLE>
<CAPTION>

                                MM LLC                    JWH LLC                 Chesapeake LLC                SJO LLC
                          For the period from       For the period from         For the period from        For the period from
                            June 1, 1998 to          January 1, 1998 to         January 1, 1998 to         January 1, 1998 to
                          December 31, 1998            May 31, 1998                May 31, 1998               May 31, 1998
                      ------------------------   -----------------------       --------------------        --------------------
<S>                   <C>                        <C>                           <C>                         <C>
 Revenues                  $   19,255,343           $    1,391,001                $  1,986,835              $   1,472,242

 Expenses                       9,491,842                4,069,362                     903,412                    802,878
                      ------------------------   -----------------------       --------------------        --------------------

 Net Income (loss)          $   9,763,501            $  (2,678,361)                $ 1,083,423              $     669,364
                      ========================   =======================       ====================        ====================
</TABLE>


7.   FAIR VALUE AND OFF-BALANCE SHEET RISK

         As of June 1, 1998, the Partnership invested all of its assets in MM
     LLC. Accordingly, the Partnership is invested indirectly in derivative
     instruments, but does not itself hold any derivative instrument positions.
     The application of the provisions of Statement of Financial Accounting
     Standards No. 133, as amended by SFAS No. 137, and further amended by SFAS
     No. 138, did not have a significant effect on the financial statements of
     the Partnership. Consequently, no such positions subsequent to May 31, 1998
     are reflected in these financial statements.

     MARKET RISK

     Derivative financial instruments involve varying degrees of off-balance
     sheet market risk. Changes in the level or volatility of interest rates,
     foreign currency exchange rates or the market values of the underlying
     financial instruments or commodities underlying such derivative instruments
     frequently resulted in changes in the Partnership's net unrealized profit
     on such derivative instruments as reflected in the Statements of Financial
     Condition or, with respect to Partnership assets invested in Trading LLCs
     and in MM LLC, the net unrealized profit (loss) as reflected in the
     respective Statements of Financial Condition of the Trading LLCs and MM
     LLC. The Partnership's exposure to market risk is influenced by a number of
     factors, including the relationships among the derivative instruments held
     by the Partnership, the Trading LLCs and currently MM LLC, as well as the
     volatility and liquidity of such markets in which such derivative
     instruments are traded.

     MLIP has procedures in place intended to control market risk exposure,
     although there can be no assurance that they will, in fact, succeed in
     doing so. These procedures focus primarily on monitoring the trading of the
     Advisors selected from time to time by the Partnership or MM LLC, and
     include calculating the Net Asset Value of their respective Partnership
     accounts and Trading LLC accounts, or currently MM LLC accounts, as of the
     close of business on each day and reviewing outstanding positions for
     over-concentrations both on an Advisor-by-Advisor and on an overall
     Partnership basis. While MLIP does not itself intervene in the markets to
     hedge or diversify the Partnership's market exposure, MLIP may urge
     Advisors to reallocate positions, or itself reallocate Partnership assets
     among Advisors (although typically only as of the end of a month) in an
     attempt to avoid over-concentrations. However, such interventions are
     unusual. Except in cases in which it appears that an Advisor has begun to
     deviate from past practice or trading policies or to be trading
     erratically, MLIP's basic risk control procedures consist simply of the
     ongoing process of advisor monitoring and selection with the market risk
     controls being applied by the Advisors themselves.

                                     -10-


<PAGE>

     Prior to January 1, 2001 one important aspect of MLIP's risk controls
     was its adjustments to the leverage at which the Partnership traded. By
     controlling the percentage of the Partnership's assets allocated to
     trading, MLIP directly affected the market exposure of the Partnership.
     Leverage control was the principal means by which MLIP was able to ensure
     that Merrill Lynch was never required to make any payments under its
     guarantee that the Net Asset Value per Unit would equal no less than a
     specified minimum as of the Principal Assurance Date (See Note 5).

     CREDIT RISK

     The risks associated with exchange-traded contracts are typically perceived
     to be less than those associated with over-the-counter
     (non-exchange-traded) transactions, because exchanges typically (but not
     universally) provide clearinghouse arrangements in which the collective
     credit (in some cases limited in amount, in some cases not) of the members
     of the exchange is pledged to support the financial integrity of the
     exchange. In over-the-counter transactions, on the other hand, traders must
     rely solely on the credit of their respective individual counterparties.
     Margins, which may be subject to loss in the event of a default, are
     generally required in exchange trading, and counterparties may require
     margin in the over-the-counter markets.

     The Partnership, through MM LLC, has credit risk in respect of its
     counterparties and brokers, but attempts to mitigate this risk by dealing
     almost exclusively with Merrill Lynch entities as clearing brokers.

     The Partnership, through MM LLC, in its normal course of business, enters
     into various contracts, with MLF acting as its commodity broker. Pursuant
     to the brokerage agreement with MLF (which includes a netting arrangement),
     to the extent that such trading results in receivables from and payables to
     MLF, these receivables and payables are offset and reported as a net
     receivable or payable in the financial statements of MM LLC in the Equity
     in commodity future trading accounts in the Statements of Financial
     Condition.




                            * * * * * * * * * * * * *

                To the best of the knowledge and belief of the
                undersigned, the information contained in this
                       report is accurate and complete.



                               Michael L. Pungello
                             Chief Financial Officer
                     Merrill Lynch Investment Partners Inc.
                               General Partner of
                       The SECTOR Strategy Fund-SM-VI L.P.



                                     -11-


<PAGE>




                      ML MULTI-MANAGER PORTFOLIO LLC
                      (A DELAWARE LIMITED LIABILITY COMPANY)

                      Financial Statements for the years ended
                      December 31, 2000 and 1999
                      and Independent Auditors' Report



[MERRILL LYNCH LOGO]
<PAGE>

ML MULTI-MANAGER PORTFOLIO LLC
(A Delaware Limited Liability Company)

TABLE OF CONTENTS
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                        Page
                                                                        ----

<S>                                                                     <C>
INDEPENDENT AUDITORS' REPORT                                             1

FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 2000 AND 1999:

  Statements of Financial Condition                                      2

  Statements of Operations                                               3

  Statements of Changes in Members' Capital                              4

  Notes to Financial Statements                                         5-9
</TABLE>
<PAGE>

INDEPENDENT AUDITORS' REPORT
----------------------------


To the Members of
 ML Multi-Manager Portfolio LLC:

We have audited the accompanying statements of financial condition of ML
Multi-Manager Portfolio LLC (the "Company") as of December 31, 2000 and 1999,
and the related statements of operations and of changes in members' capital for
the years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of ML Multi-Manager Portfolio LLC as of
December 31, 2000 and 1999, and the results of its operations and changes in its
members' capital for the years then ended in conformity with accounting
principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP


New York, New York
February 5, 2001
<PAGE>

ML MULTI-MANAGER PORTFOLIO LLC
(A Delaware Limited Liability Company)

STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31, 2000 AND 1999
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
ASSETS

                                                                            2000                      1999
                                                                   ------------------------  -----------------------

<S>                                                                <C>                       <C>
Equity in commodity futures trading accounts:
    Cash and option premiums                                        $          139,346,615    $          97,949,902
    Net unrealized profit on open contracts                                     13,995,141                2,517,003
Cash                                                                             2,835,198                        -
Commercial Paper (Cost $95,200,766)                                             95,200,766                        -
Accrued interest (Note 2)                                                        1,618,036                  434,772
                                                                   ------------------------  -----------------------
                TOTAL                                               $          252,995,756    $         100,901,677
                                                                   ========================  =======================

LIABILITIES AND MEMBERS' CAPITAL

<CAPTION>
LIABILITIES:

<S>                                                                <C>                       <C>
    Brokerage commissions payable (Note 2)                          $            1,265,023    $             708,081
    Profit Shares payable (Note 3)                                               3,036,430                  420,906
    Administrative fees payable (Note 2)                                            41,341                   24,744
    Due to Invested Funds                                                        1,040,995                1,752,661
                                                                   ------------------------  -----------------------
            Total liabilities                                                    5,383,789                2,906,392
                                                                   ------------------------  -----------------------
MEMBERS' CAPITAL:

    Voting Members                                                             247,611,967               97,995,285
                                                                   ------------------------  -----------------------
            Total Members' capital                                             247,611,967               97,995,285
                                                                   ------------------------  -----------------------
                TOTAL                                               $          252,995,756    $         100,901,677
                                                                   ========================  =======================
</TABLE>


See notes to financial statements.


                                      -2-
<PAGE>

ML MULTI-MANAGER PORTFOLIO LLC
(A Delaware Limited Liability Company)

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
REVENUES:                                                        2000                   1999
                                                           ------------------     ------------------

<S>                                                        <C>                    <C>
Trading profit:
    Realized                                                $      8,646,046       $      3,344,876
    Change in unrealized                                          11,538,356                546,402
                                                           ------------------     ------------------
        Total trading results                                     20,184,402              3,891,278

Interest income (Note 1 & Note 2)                                  8,139,921              5,198,912
                                                           ------------------     ------------------
        Total revenues                                            28,324,323              9,090,190
                                                           ------------------     ------------------

<CAPTION>
EXPENSES:

<S>                                                        <C>                    <C>
    Brokerage commissions (Note 2)                                10,015,693              9,316,187
    Profit Shares (Note 3)                                         3,201,454                515,566
    Administrative fees (Note 2)                                     340,752                320,264
                                                           ------------------     ------------------
        Total expenses                                            13,557,899             10,152,017
                                                           ------------------     ------------------
NET INCOME (LOSS)                                           $     14,766,424       $     (1,061,827)
                                                           ==================     ==================
</TABLE>

See notes to financial statements.


                                      -3-
<PAGE>

ML MULTI-MANAGER PORTFOLIO LLC
(A Delaware Limited Liability Company)

STATEMENTS OF CHANGES IN MEMBERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                           Voting Members
                                        --------------------

<S>                                     <C>
MEMBERS' CAPITAL,
  DECEMBER 31, 1998                             120,383,476

Withdrawals                                     (21,326,364)

Net loss                                         (1,061,827)
                                        --------------------
MEMBERS' CAPITAL,
  DECEMBER 31, 1999                              97,995,285

Additions                                       175,347,578

Withdrawals                                     (40,497,320)

Net income                                       14,766,424
                                        --------------------
MEMBERS' CAPITAL,
  DECEMBER 31, 2000                             247,611,967
                                        ====================
</TABLE>

See notes to financial statements.


                                      -4-
<PAGE>

ML MULTI-MANAGER PORTFOLIO LLC
(A Delaware Limited Liability Company)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     ORGANIZATION

     ML Multi-Manager Portfolio LLC (the "Company") was organized under the
     Delaware Limited Liability Company Act on May 11, 1998 and commenced
     trading activities on June 1, 1998. The Company engages in the speculative
     trading of futures, options on futures, forwards and options on forward
     contracts on a wide range of commodities. Merrill Lynch Investment Partners
     Inc. ("MLIP"), a wholly-owned subsidiary of Merrill Lynch Group, Inc.,
     which, in turn, is a wholly-owned subsidiary of Merrill Lynch & Co., Inc.
     ("Merrill Lynch"), has been delegated administrative authority over the
     Company. Merrill Lynch Futures Inc. ("MLF"), an affiliate of Merrill
     Lynch, is the Company's commodity broker. A portion of the Company's assets
     were held by a commodity broker, other than MLF, to facilitate the trading
     of a certain independent advisor, subject to an arrangement recognized by
     MLIP. This advisor was terminated during 2000. The Company has one class of
     Membership Interests, Voting Interests. Voting Interests are held by United
     States limited partnerships ("Members"). The Members control all business
     activities and affairs of the Company by agreement of the majority interest
     of the Members, subject to the discretionary trading authority vested in
     and delegated to the independent trading advisors (the "Advisors") and the
     administrative authority vested in and delegated to MLIP. Each Member is a
     "commodity pool" sponsored and controlled by MLIP and shares in the Trading
     results and Interest income of the Company in proportion to their
     respective capital accounts.

     MLIP, an indirect subsidiary of Merrill Lynch, became a member of Merrill
     Lynch Investment Managers ("MLIM") - Alternative Investments Group during
     October 2000. MLIM's Alternative Investments Group creates and manages a
     variety of alternative investment products, including managed futures
     funds, hedge funds, funds of funds, exchange funds and private equity
     funds. MLIP, organized in 1986, is the hedge fund, fund of funds and
     managed futures sponsor within MLIM's Alternative Investments Group.

     MLIP selects independent advisors to manage the Company's assets, and
     allocates and reallocates the Company's assets among existing, replacement
     and additional Advisors.

     ESTIMATES

     The preparation of financial statements in conformity with accounting
     principles generally accepted in the United States of America requires
     management to make estimates and assumptions that affect the reported
     amounts of assets and liabilities and disclosure of contingent assets and
     liabilities at the date of the financial statements and the reported
     amounts of revenues and expenses during the reporting period. Actual
     results could differ from those estimates.

     CASH MANAGEMENT

     As of June 2000, the Company began an Income Enhancement Program, whereas,
     a portion of its assets is invested in Commercial Paper. This was
     done to improve the yield on the cash assets not required for margin for
     trading purposes. These holdings generally have maturities of 30, 60 or
     90 days and are held to maturity.

     One Member invests assets that are not allocated to any Advisors directly
     into the Income Enhancement Program. This Member receives a priority
     allocation of interest income earned on these assets before the
     allocation of interest income in proportion to those Members whose assets
     are allocated for trading purposes.

                                      -5-
<PAGE>

     REVENUE RECOGNITION

     Commodity futures, options on futures, forwards and options on forward
     contracts are recorded on the trade date and open contracts are reflected
     in Net unrealized profit on open contracts in the Statements of Financial
     Condition at the difference between the original contract value and the
     market value (for those commodity interests for which market quotations are
     readily available) or at fair value. The change in unrealized profit on
     open contracts from one period to the next is reflected in Change in
     unrealized under Trading profit in the Statements of Operations.

     FOREIGN CURRENCY TRANSACTIONS

     The Company's functional currency is the U.S. dollar; however, it transacts
     business in currencies other than the U.S. dollar. Assets and liabilities
     denominated in currencies other than the U.S. dollar are translated into
     U.S. dollars at the rates in effect at the date of the Statements of
     Financial Condition. Income and expense items denominated in currencies
     other than the U.S. dollar are translated into U.S. dollars at the rates in
     effect during the period. Gains and losses resulting from the translation
     to U.S. dollars are reported in total trading results.

     ORGANIZATIONAL COSTS

     MLIP paid all organizational costs relating to the Company without direct
     reimbursement from the Company or any Member.

     INCOME TAXES

     No provision for income taxes has been made in the accompanying financial
     statements as each Member is individually responsible for reporting income
     or loss based on such Member's respective share of the Company's income and
     expenses as reported for income tax purposes.

     DISTRIBUTIONS

     The Members are entitled to receive any distributions which may be made by
     the Company in proportion to their respective capital accounts. No such
     distributions had been declared for the years ended December 31, 2000 or
     1999.

     WITHDRAWALS

     Each Member may withdraw some or all of such Members' capital at the Net
     Asset Value as of the close of business on any business day. There are no
     withdrawal fees or charges.

     DISSOLUTION OF THE COMPANY

     The Company will terminate on December 31, 2028 or at an earlier date if
     certain conditions occur, as well as under certain other circumstances as
     set forth in the Organization Agreement.

2.   RELATED PARTY TRANSACTIONS

     A portion of the Company's U.S. dollar assets are maintained at MLF. On
     assets held in U.S. dollars, Merrill Lynch credits the Company with
     interest at the prevailing 91-day U.S. Treasury bill rate. The Company is
     credited with interest on any of its assets and net gains actually held by
     Merrill Lynch in non-U.S. dollar currencies at a prevailing local rate
     received by Merrill Lynch. Merrill Lynch may


                                      -6-
<PAGE>

     derive certain economic benefit, in excess of the interest which Merrill
     Lynch pays to the Company from the possession of such assets.

     As of June 2000, the Company began investing in Commercial Paper. Merrill
     Lynch, Pierce Fenner & Smith acts as custodian for these assets.

     Merrill Lynch charges the Company Merrill Lynch's cost of financing
     realized and unrealized losses on the Company's non-U.S. dollar-denominated
     positions.

     Following the allocation of the Company's trading profit and interest
     income among the Members' Capital Accounts, MLIP calculates the brokerage
     commissions, Profit Shares, administrative fees and other expenses due from
     the Company to third parties, relating to the Company's trading on behalf
     of the Members. Such brokerage commissions, fees and expenses are
     specifically allocated as of the end of each accounting period (not pro
     rata based on the Members' respective capital accounts) to, and deducted
     from, the Members' capital accounts and paid out by the Company. The
     Company pays brokerage commissions to MLF, at a flat monthly rate
     reflecting the fee arrangement between each Member and MLF. For the years
     ended December 31, 2000 and 1999, the monthly rates for Members ranged from
     .291 of 1% (a 3.50% annual rate) to .729 of 1% (an 8.75% annual rate) of
     each Member's month-end assets invested in the Company.

     The Company pays MLIP a monthly administrative fee ranging from .021 of 1%
     (a 0.25% annual rate) to .083 of 1% (a 1.00% annual rate) of each Member's
     month-end assets. Month-end assets are not reduced for purposes of
     calculating brokerage commissions and administrative fees by any accrued
     brokerage commissions, administrative fees, Profit Shares or other fees or
     charges.

     MLF pays the Advisors annual Consulting Fees up to 2% of the Company's
     average month-end assets allocated to them for management after reduction
     for a portion of the brokerage commissions.

3.   ADVISORY AGREEMENTS

     Pursuant to the Advisory Agreements among the Advisors, the Company and
     MLIP, the Advisors determine the commodity futures, options on futures,
     forwards and options on forward contracts traded on behalf of the Company,
     subject to certain rights reserved by MLIP. The Advisory Agreements
     generally renew one year after they are entered into, subject to certain
     renewal rights exercisable by the Company.

     The Company pays, from the Capital Account of each Member, to the Advisors
     quarterly or annual Profit Shares generally ranging from 15% to 23% of any
     New Trading Profit, as defined, recognized by each Advisor, attributable to
     each Member's Capital Account, considered individually irrespective of the
     overall performance of the such Member's Capital Account. Profit Shares,
     which are calculated separately in respect of each Member's Capital
     Account, are determined as of the end of each calendar quarter or year and
     are also paid to each Advisor upon the withdrawal of capital from the
     Company by a Member for whatever purpose, other than to pay expenses and
     upon the reallocation of assets away from an Advisor.

4.   FAIR VALUE AND OFF-BALANCE SHEET RISK

     In June 1998, the Financial Accounting Standards Board issued Statement of
     Financial Accounting Standard ("SFAS") No. 133, "Accounting for Derivative
     Instruments and Hedging Activities" (the "Statement"), effective for fiscal
     years beginning after June 15, 2000, as amended by SFAS No. 137. SFAS No.
     133 is further amended by SFAS No. 138, which clarifies issues surrounding
     interest risk, foreign currency denominated items, normal purchases and
     sales and net hedging. This Statement supercedes SFAS No. 119 ("Disclosure
     about Derivative Financial Instruments and Fair Value of Financial
     Instruments") and SFAS No. 105 ("Disclosure of Information about Financial
     Instruments


                                      -7-
<PAGE>

     with Off-Balance Sheet Risk and Financial Instruments with Concentrations
     of Credit Risk") whereby disclosure of average aggregate fair values and
     contract/notional values, respectively, of derivative financial instruments
     is no longer required for an entity such as the Company which carries its
     assets at fair value. Such Statement sets forth a much broader definition
     of a derivative instrument. The application of the provisions of SFAS
     No. 133, as amended by SFAS No. 137 and SFAS No. 138, did not have a
     significant effect on the financial statements.

     SFAS No. 133 defines a derivative as a financial instrument or other
     contract that has all three of the following characteristics: (1) one or
     more underlyings and notional amounts or payment provisions; (2) requires
     no initial net investment or a smaller initial net investment than would be
     required for other types of contracts that would be expected to have a
     similar response to changes in market factors; and, (3) terms that require
     or permit net settlement. Generally, derivatives include futures, forwards,
     swaps, options or other financial instruments with similar characteristics
     such as caps, floors and collars.

     MARKET RISK

     Derivative instruments involve varying degrees of off-balance sheet market
     risk. Changes in the level or volatility of interest rates, foreign
     currency exchange rates or the market values of the financial instruments
     or commodities underlying such derivative instruments frequently result in
     changes in the Company's net unrealized profit on such derivative
     instruments as reflected in the Statements of Financial Condition. The
     Company's exposure to market risk is influenced by a number of factors,
     including the relationships among the derivative instruments held by the
     Company as well as the volatility and liquidity of the markets in which the
     derivative instruments are traded.

     MLIP has procedures in place intended to control market risk exposure,
     although there can be no assurance that they will, in fact, succeed in
     doing so. These procedures focus primarily on monitoring the trading of the
     Advisors, calculating the Net Asset Value of the Company as of the close of
     business on each day and reviewing outstanding positions for
     over-concentrations. While MLIP does not itself intervene in the markets to
     hedge or diversify the Company's market exposure, MLIP may urge the
     Advisors to reallocate positions in an attempt to avoid
     over-concentrations. However, such interventions are unusual. Except in
     cases in which it appears that the Advisors have begun to deviate from past
     practice or trading policies or to be trading erratically, MLIP's basic
     risk control procedures consist simply of the ongoing process of advisor
     monitoring, with the market risk controls being applied by the Advisors
     themselves.

      CREDIT RISK

     The risks associated with exchange-traded contracts are typically perceived
     to be less than those associated with over-the-counter
     (non-exchange-traded) transactions, because exchanges typically (but not
     universally) provide clearinghouse arrangements in which the collective
     credit (in some cases limited in amount, in some cases not) of the members
     of the exchange is pledged to support the financial integrity of the
     exchange. In over-the-counter transactions, on the other hand, traders must
     rely solely on the credit of their respective individual counterparties.
     Margins, which may be subject to loss in the event of a default, are
     generally required in exchange trading, and counterparties may also require
     margin in the over-the-counter markets.

     The credit risk associated with these instruments from counterparty
     nonperformance is the net unrealized profit on open contracts, if any,
     included in the Statements of Financial Condition. The Company attempts to
     mitigate this risk by dealing almost exclusively with Merrill Lynch
     entities as clearing brokers.


                                      -8-
<PAGE>

     The Company, in its normal course of business, enters into various
     contracts, with MLF acting as its commodity broker. Pursuant to the
     brokerage agreement with MLF (which includes a netting arrangement), to the
     extent that such trading results in receivables from and payables to MLF,
     these receivables and payables are offset and reported as a net receivable
     or payable and included in the Equity in commodity futures trading accounts
     in the Statements of Financial Condition.




                                 * * * * * * * *

                 To the best of the knowledge and belief of the
                 undersigned, the information contained in this
                        report is accurate and complete.



                               Michael L. Pungello
                             Chief Financial Officer
                     Merrill Lynch Investment Partners Inc.
                           Commodity Pool Operator of
                         ML Multi-Manager Portfolio LLC


                                      -9-