** **

**UNITEDSTATES SECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C. 20549**

** **

**FORM 10-Q**

** **

**(MarkOne)**

** **

**x**** QUARTERLY REPORT PURSUANTTO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

** **

**For thequarterly period ended March 31, 2008**

** **

**                                     OR**

** **

**o****TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934**

** **

**For thetransition period from                to**

** **

**CommissionFile Number 0-51085**

** **

**MLASPECT FUTURESACCESS LLC**

(Exact Name of Registrant asspecified in its charter)

 

| **Delaware**                    | ** ** | **20-1227650**                    |
|---------------------------------|------------|-----------------------------------|
| (State or other jurisdiction of |       | (IRS Employer Identification No.) |
| incorporation or organization)  |       |                              |

 

**c/o Merrill Lynch Alternative Investments LLC**

**Hopewell Corporate Campus, Building No. 2**

**1200 Merrill Lynch Drive - First Floor**

**Pennington, New Jersey 08534**

(Address of principalexecutive offices)

(Zip Code)

 

**609-274-5838**

(Registrant’s telephonenumber, including area code)

 

Indicate by check markwhether the registrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements forthe past 90 days.

Yes  x  No  o

 

Indicateby check mark whether the registrant is a large accelerated filer, anaccelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2of the Exchange Act. (Check one):

 

| Large accelerated filer  o                     |   | Accelerated filer o          |
|------------------------------------------------|--------|-----------------------------------|
|                                           |   |                              |
| Non-accelerated filer x                        |   | Smaller reporting  company o |
| (Do not check if a  smaller reporting company) |   |                              |

 

Indicateby check mark whether registrant is a shell company (as defined by Rule 12b-2of the Exchange Act).

Yes  o         No  x

 

Indicateby check mark whether the registrant has filed all documents and reportsrequired to be filed by Sections 12, 13 or 15(d) of the SecuritiesExchange Act of 1934 subsequent to the distribution of securities under a planconfirmed by a court.

Yes  o         No  o

 

Thelimited partnership units of the registrant are not publicly traded.Accordingly, there is no aggregate market value for registrant’s outstandingequity that is readily determinable.

 

----

 

**ML ASPECT FUTURESACCESS LLC**

 

QUARTERLY REPORT FOR MARCH 31,2008 ON FORM 10-Q

 

Table of Contents

 
| ** ** | PART I                                                                                 | **PAGE** |
|------------|---------------------------------------------------------------------------------------------|----------|
|       |                                                                                        |     |
| Item 1.    | Financial Statements                                                                        | 1        |
|       |                                                                                        |     |
| Item 2.    | Management’s  Discussion and Analysis of Financial Condition and Results of Operations | 9        |
|       |                                                                                        |     |
| Item 3.    | Quantitative  and Qualitative Disclosures About Market Risk                                 | 12       |
|       |                                                                                        |     |
| Item 4.    | Controls and  Procedures                                                                    | 15       |
|       |                                                                                        |     |
|       | PART II                                                                                |     |
|       |                                                                                        |     |
| Item 1.    | Legal Proceedings                                                                           | 16       |
|       |                                                                                        |     |
| Item 1A.   | Risk Factors                                                                                | 16       |
|       |                                                                                        |     |
| Item 2.    | Unregistered  Sales of Equity Securities and Use of Proceeds                                | 18       |
|       |                                                                                        |     |
| Item 3.    | Defaults Upon  Senior Securities                                                            | 18       |
|       |                                                                                        |     |
| Item 4.    | Submission of  Matters to a Vote of Security Holders                                        | 19       |
|       |                                                                                        |     |
| Item 5.    | Other Information                                                                           | 19       |
|       |                                                                                        |     |
| Item 6     | Exhibits                                                                                    | 19       |
|       |                                                                                        |     |

 

----

 

PART I - FINANCIALINFORMATION

 

Item 1.    FinancialStatements

 

ML ASPECT FUTURESACCESS LLC

(a Delaware Limited Liability Company)

 

STATEMENTS OF FINANCIAL CONDITION

 
| ** **                                                                            | ** ** | **March 31,** | ** **  | **December 31,** | ** ** |
|---------------------------------------------------------------------------------------|------------|--------------------|-------------|-----------------------|------------|
| ** **                                                                            | ** ** | **2008**           | ** **  | **2007**              | ** ** |
|                                                                                  |       | **(unaudited)**    |        |                  |       |
|                                                                                  |       |               |        |                  |       |
| **ASSETS:**                                                                           |       |               |        |                  |       |
| Equity  in commodity futures trading accounts:                                        |       |               |        |                  |       |
| Cash  (including restricted cash of $22,536,209 for 2008 and $40,922,943 for 2007)    |       | $                  | 304,934,142 |                  | $          | 267,131,712 |   |
| Net  unrealized profit (loss) on open contracts                                       |       | (2,644,361         | )           | 9,368,575             |       |
| Cash                                                                                  |       | 25,592             |        | 40,779                |       |
| Accrued  interest                                                                     |       | 666,089            |        | 966,433               |       |
|                                                                                  |       |               |        |                  |       |
| **TOTAL ASSETS**                                                                      |       | $                  | 302,981,462 |                  | $          | 277,507,499 |   |
|                                                                                  |       |               |        |                  |       |
| **LIABILITIES AND MEMBERS’ CAPITAL:**                                            |       |               |        |                  |       |
| LIABILITIES:                                                                          |       |               |        |                  |       |
| Brokerage  commissions payable                                                        |       | $                  | 43,256      |                  | $          | 126,258 |   |
| Management  fee payable                                                               |       | 463,064            |        | 419,877               |       |
| Sponsor  fee payable                                                                  |       | 269,593            |        | 247,535               |       |
| Performance  fee payable                                                              |       | 6,604,162          |        | 1,956,978             |       |
| Redemptions  payable                                                                  |       | 20,452,333         |        | 8,473,549             |       |
| Initial  offering costs payable                                                       |       | 14,790             |        | 19,200                |       |
| Other                                                                                 |       | 359,150            |        | 249,128               |       |
|                                                                                  |       |               |        |                  |       |
| Total  liabilities                                                                    |       | 28,206,348         |        | 11,492,525            |       |
|                                                                                  |       |               |        |                  |       |
| MEMBERS’  CAPITAL:                                                               |       |               |        |                  |       |
| Sponsor’s  Interest (20,647 Units and 20,647 Units)                              |       | 28,420             |        | 25,576                |       |
| Members’  Interest (192,579,129 Units and 208,133,972 Units)                     |       | 274,746,694        |        | 265,989,398           |       |
|                                                                                  |       |               |        |                  |       |
| Total  members’ capital                                                          |       | 274,775,114        |        | 266,014,974           |       |
|                                                                                  |       |               |        |                  |       |
| **TOTAL LIABILITIES AND MEMBERS’ CAPITAL**                                       |       | $                  | 302,981,462 |                  | $          | 277,507,499 |   |
|                                                                                  |       |               |        |                  |       |
| **NET ASSET VALUE PER UNIT (Note 2)**                                                 |       |               |        |                  |       |
| (Based  on 192,599,776 and 208,154,619 Units outstanding, unlimited Units authorized) |       |               |        |                  |       |

 

See notes tofinancial statements.

 

1

----

 

ML ASPECT FUTURESACCESS LLC

(a Delaware Limited Liability Company)

 

STATEMENTS OF OPERATIONS

(unaudited)

 
| ** **                                    | ** ** | **For the three** | ** ** | **For the three** | ** ** |
|-----------------------------------------------|------------|-----------------------------|------------|-----------------------------|------------|
| ** **                                    | ** ** | **months ended**       | ** ** | **months ended**       | ** ** |
| ** **                                    | ** ** | **March 31,**          | ** ** | **March 31,**          | ** ** |
| ** **                                    | ** ** | **2008**                    | ** ** | **2007**                    | ** ** |
| **TRADING PROFIT (LOSS):**                    |       |                        |       |                        |       |
|                                          |       |                        |       |                        |       |
| Realized                                      |       | $                           | 50,131,890 |                        | $          | (3,125,951 | ) |
| Change  in unrealized                         |       | (12,012,936                 | )          | (3,040,799                  | )          |
| Brokerage  commissions                        |       | (199,538                    | )          | (140,885                    | )          |
|                                          |       |                        |       |                        |       |
| Total  trading profit (loss)                  |       | 37,919,416                  |       | (6,307,635                  | )          |
|                                          |       |                        |       |                        |       |
| **INVESTMENT INCOME:**                        |       |                        |       |                        |       |
| Interest                                      |       | 2,216,771                   |       | 1,613,074                   |       |
|                                          |       |                        |       |                        |       |
| **EXPENSES:**                                 |       |                        |       |                        |       |
| Management  fee                               |       | 1,372,494                   |       | 637,807                     |       |
| Sponsor  fee                                  |       | 805,897                     |       | 589,041                     |       |
| Performance  fee                              |       | 6,645,820                   |       | —                      |       |
| Other                                         |       | 221,150                     |       | 137,429                     |       |
|                                          |       |                        |       |                        |       |
| Total  expenses                               |       | 9,045,361                   |       | 1,364,277                   |       |
|                                          |       |                        |       |                        |       |
| **NET INVESTMENT INCOME (LOSS)**              |       | (6,828,590                  | )          | 248,797                     |       |
|                                          |       |                        |       |                        |       |
| **NET INCOME (LOSS)**                         |       | $                           | 31,090,826 |                        | $          | (6,058,838 | ) |
|                                          |       |                        |       |                        |       |
| **NET INCOME (LOSS) PER UNIT:**               |       |                        |       |                        |       |
|                                          |       |                        |       |                        |       |
| Weighted  average number of Units outstanding |       |                        |       |                        |       |
| Class A                                  |       | 18,211,237                  |       | 16,111,013                  |       |
| Class C                                  |       | 79,587,740                  |       | 67,952,141                  |       |
| Class D                                  |       | 16,176,578                  |       | 14,730,822                  |       |
| Class I                                  |       | 11,330,817                  |       | 12,495,885                  |       |
| Class D-SM                               |       | 16,129,678                  |       | —                      |       |
| Class D-TF                               |       | 66,921,843                  |       | —                      |       |
|                                          |       |                        |       |                        |       |
| Net  income (loss) per weighted average Unit  |       |                        |       |                        |       |
| Class A                                  |       | $                           | 0.1378     |                        | $          | (0.0546 | ) |
| Class C                                  |       | $                           | 0.1358     |                        | $          | (0.0557 | ) |
| Class D                                  |       | $                           | 0.1564     |                        | $          | (0.0504 | ) |
| Class I                                  |       | $                           | 0.1476     |                        | $          | (0.0520 | ) |
| Class D-SM                               |       | $                           | 0.1432     |                        | $          | — |   |
| Class D-TF                               |       | $                           | 0.1682     |                        | $          | — |   |
|                                               |            |                             |            |                             |            |  |  |  |

 

See notes to financialstatements.

 

2

----

 

ML ASPECT FUTURESACCESS LLC

(a Delaware Limited Liability Company)

STATEMENTS OF CHANGES IN MEMBERS’ CAPITAL

For the three months ended March 31, 2008 and2007

(unaudited)

 
| ** **                 | ** ** | **Members’ Capital**  | ** ** | ** **        | ** ** | ** **      | ** ** | **Members’ Capital** | ** ** | **Members’ Capital**  | ** ** | ** **        | ** ** | ** **      | ** ** | **Members’ Capital** | ** ** |
|----------------------------|------------|---------------------------------|------------|-------------------|------------|-----------------|------------|--------------------------------|------------|---------------------------------|------------|-------------------|------------|-----------------|------------|--------------------------------|------------|
| ** **                 | ** ** | **December 31, 2006** | ** ** | **Subscriptions** | ** ** | **Redemptions** | ** ** | **March 31, 2007**   | ** ** | **December 31, 2007** | ** ** | **Subscriptions** | ** ** | **Redemptions** | ** ** | **March 31, 2008**   | ** ** |
| ** **                 | ** ** | ** **                      | ** ** | ** **        | ** ** | ** **      | ** ** | ** **                     | ** ** | ** **                      | ** ** | ** **        | ** ** | ** **      | ** ** | ** **                     |       |
| Class A                    |       | 13,798,588                      |       | 2,941,588         |       | (157,626        | )          | 16,582,550                     |       | 17,887,996                      |       | 1,269,955         |       | (1,635,783      | )          | 17,522,168                     |       |
| Class C                    |       | 63,313,746                      |       | 8,161,048         |       | (1,054,073      | )          | 70,420,721                     |       | 79,170,266                      |       | 2,603,884         |       | (9,208,125      | )          | 72,566,025                     |       |
| Class D                    |       | 13,531,909                      |       | 1,397,960         |       | (1,330,000      | )          | 13,599,869                     |       | 16,300,492                      |       | —            |       | (5,985,184      | )          | 10,315,308                     |       |
| Class I                    |       | 12,118,637                      |       | 939,806           |       | (35,000         | )          | 13,023,443                     |       | 11,363,798                      |       | 424,595           |       | (925,264        | )          | 10,863,129                     |       |
| Class D-SM                 |       | —                          |       | —            |       | —          |       | —                         |       | 13,768,122                      |       | 4,145,549         |       | —          |       | 17,913,671                     |       |
| Class D-TF                 |       | —                          |       | —            |       | —          |       | —                         |       | 69,643,298                      |       | —            |       | (6,244,470      | )          | 63,398,828                     |       |
|                       |       |                            |       |              |       |            |       |                           |       |                            |       |              |       |            |       |                           |       |
| Total Members’ Units  |       | 102,762,880                     |       | 13,440,402        |       | (2,576,699      | )          | 113,626,583                    |       | 208,133,972                     |       | 8,443,983         |       | (23,998,826     | )          | 192,579,129                    |       |
|                       |       |                            |       |              |       |            |       |                           |       |                            |       |              |       |            |       |                           |       |
| Class A                    |       | 10,319                          |       | —            |       | —          |       | 10,319                         |       | 10,319                          |       | —            |       | —          |       | 10,319                         |       |
| Class C                    |       | 10,328                          |       | —            |       | —          |       | 10,328                         |       | 10,328                          |       | —            |       | —          |       | 10,328                         |       |
| Class D                    |       | —                          |       | —            |       | —          |       | —                         |       | —                          |       | —            |       | —          |       | —                         |       |
| Class I                    |       | —                          |       | —            |       | —          |       | —                         |       | —                          |       | —            |       | —          |       | —                         |       |
| Class D-SM                 |       | —                          |       | —            |       | —          |       | —                         |       | —                          |       | —            |       | —          |       | —                         |       |
| Class D-TF                 |       | —                          |       | —            |       | —          |       | —                         |       | —                          |       | —            |       | —          |       | —                         |       |
|                       |       |                            |       |              |       |            |       |                           |       |                            |       |              |       |            |       |                           |       |
| Total Sponsor’s Units |       | 20,647                          |       | —            |       | —          |       | 20,647                         |       | 20,647                          |       | —            |       | —          |       | 20,647                         |       |

 

See notes to financial statements.

 

3

----

 

ML ASPECT FUTURESACCESS LLC

(a Delaware Limited Liability Company)

 

STATEMENTS OF CHANGES IN MEMBERS’ CAPITAL

For the three months ended March 31, 2008 and2007

(unaudited)

 
| ** **                     | ** ** | **Members’ Capital**  | ** **  | ** **        | ** ** | ** **      | ** ** | **Net Income** | ** ** | **Members’ Capital** | ** ** | **Members’ Capital**  | ** ** | ** **        | ** **  | ** **      | ** ** | ** **                      | ** ** | **Members’ Capital** | ** ** |
|--------------------------------|------------|---------------------------------|-------------|-------------------|------------|-----------------|------------|---------------------|------------|--------------------------------|------------|---------------------------------|------------|-------------------|-------------|-----------------|------------|---------------------------------|------------|--------------------------------|------------|
| ** **                     | ** ** | **December 31, 2006** | ** **  | **Subscriptions** | ** ** | **Redemptions** | ** ** | **(Loss)**          | ** ** | **March 31, 2007**   | ** ** | **December 31, 2007** | ** ** | **Subscriptions** | ** **  | **Redemptions** | ** ** | **Net Income (Loss)** | ** ** | **March 31, 2008**   | ** ** |
| Class  A                       |       | $                               | 16,089,634  |              | $          | 3,430,444       |       | $                   | (179,765   | )                              | $          | (879,118                        | )          | $                 | 18,461,195  |            | $          | 22,428,464                      |       | $                              | 1,779,613  |   | $ | (2,272,637 | ) | $ | 2,508,639 |   | $ | 24,444,079 |   |
| Class  C                       |       | 72,750,991                      |        | 9,296,488         |       | (1,189,828      | )          | (3,787,177          | )          | 77,070,474                     |       | 96,858,723                      |       | 3,388,161         |        | (12,528,040     | )          | 10,808,932                      |       | 98,527,776                     |       |
| Class  D                       |       | 16,414,106                      |        | 1,686,999         |       | (1,546,923      | )          | (741,948            | )          | 15,812,234                     |       | 21,583,979                      |       | —            |        | (8,861,492      | )          | 2,530,325                       |       | 15,252,812                     |       |
| Class  I                       |       | 14,198,284                      |        | 1,076,015         |       | (39,221         | )          | (649,488            | )          | 14,585,590                     |       | 14,374,152                      |       | 563,033           |        | (1,306,484      | )          | 1,672,637                       |       | 15,303,338                     |       |
| Class  D-SM                    |       | —                          |        | —            |       | —          |       | —              |       | —                         |       | 18,235,954                      |       | 5,951,868         |        | —          |       | 2,309,827                       |       | 26,497,649                     |       |
| Class  D-TF                    |       | —                          |        | —            |       | —          |       | —              |       | —                         |       | 92,508,126                      |       | —            |        | (9,044,708      | )          | 11,257,622                      |       | 94,721,040                     |       |
|                           |       |                            |        |              |       |            |       |                |       |                           |       |                            |       |              |        |            |       |                            |       |                           |       |
| Total  Members’ Interests |       | $                               | 119,453,015 |              | $          | 15,489,946      |       | $                   | (2,955,737 | )                              | $          | (6,057,731                      | )          | $                 | 125,929,493 |            | $          | 265,989,398                     |       | $                              | 11,682,675 |   | $ | (34,013,361 | ) | $ | 31,087,982 |   | $ | 274,746,694 |   |
|                           |       |                            |        |              |       |            |       |                |       |                           |       |                            |       |              |        |            |       |                            |       |                           |       |
| Class  A                       |       | $                               | 12,035      |              | $          | —          |       | $                   | —     |                           | $          | (542                            | )          | $                 | 11,493      |            | $          | 12,940                          |       | $                              | —     |   | $ | — |   | $ | 1,457 |   | $ | 14,397 |   |
| Class  C                       |       | 11,870                          |        | —            |       | —          |       | (565                | )          | 11,305                         |       | 12,636                          |       | —            |        | —          |       | 1,387                           |       | 14,023                         |       |
| Class  D                       |       | —                          |        | —            |       | —          |       | —              |       | —                         |       | —                          |       | —            |        | —          |       | —                          |       | —                         |       |
| Class  I                       |       | —                          |        | —            |       | —          |       | —              |       | —                         |       | —                          |       | —            |        | —          |       | —                          |       | —                         |       |
| Class  D-SM                    |       |                            |        |              |       |            |       |                |       |                           |       | —                          |       | —            |        | —          |       | —                          |       | —                         |       |
| Class  D-TF                    |       |                            |        |              |       |            |       |                |       |                           |       | —                          |       | —            |        | —          |       | —                          |       | —                         |       |
|                           |       |                            |        |              |       |            |       |                |       |                           |       |                            |       |              |        |            |       |                            |       |                           |       |
| Total  Sponsor’s Interest |       | $                               | 23,905      |              | $          | —          |       | $                   | —     |                           | $          | (1,107                          | )          | $                 | 22,798      |            | $          | 25,576                          |       | $                              | —     |   | $ | — |   | $ | 2,844 |   | $ | 28,420 |   |
| Total  Members’ Capital   |       | $                               | 119,476,920 |              | $          | 15,489,946      |       | $                   | (2,955,737 | )                              | $          | (6,058,838                      | )          | $                 | 125,952,291 |            | $          | 266,014,974                     |       | $                              | 11,682,675 |   | $ | (34,013,361 | ) | $ | 31,090,826 |   | $ | 274,775,114 |   |

 

See notes to financial statements.

 

4

----

 

ML ASPECT FUTURESACCESSLLC

(a Delaware LimitedLiability Company)

 

NOTES TO FINANCIALSTATEMENTS

(unaudited)

 

1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

ML Aspect FuturesAccess LLC(the “Fund”) was organized under the Delaware Limited Liability Company Act on May 17,2004 and commenced trading activities on April 1, 2005. The Fund issuesnew units of limited liability company interest (“Units”) at Net Asset Valueper Unit. The Fund engages in the speculative trading of futures, options onfutures and forward contracts on a wide range of commodities. Aspect CapitalLimited (“Aspect”) is the trading advisor of the Fund.

 

Merrill Lynch AlternativeInvestments LLC (“MLAI”) is the Sponsor (“Sponsor”) and Manager (“Manager”) ofthe Fund. MLAI is an indirect wholly-owned subsidiary of Merrill Lynch &Co., Inc. (“Merrill Lynch”). Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”),a wholly-owned subsidiary of Merrill Lynch, is the Fund’s commodity broker.

 

In the opinion of management, the financial statementscontain all adjustments necessary to present fairly the financial position ofthe Fund as of March 31, 2008, and the results of its operations for thethree months ended March 31, 2008 and 2007.  However, the operating results for theinterim periods may not be indicative of the results for the full year.

 

Certain information andfootnote disclosures normally included in annual financial statements preparedin accordance with accounting principles generally accepted in the UnitedStates of America (“U.S. GAAP”) have been omitted.  It is suggested that these financialstatements be read in conjunction with the financial statements and notesthereto included in the Fund’s Annual Report on Form 10-K filed with theSecurities and Exchange Commission for the year ended December 31, 2007.

 

The preparation offinancial statements in conformity with U.S. GAAP requires management to makeestimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the date ofthe financial statements and the reported amounts of revenues and expensesduring the reporting period.  Actualresults could differ from those estimates.

 

2.               NET ASSET VALUE PERUNIT

 

For financial reporting purposes, in conformity withU.S. GAAP, the Fund deducted the total initial offering costs at inception fromMembers’ Capital for purposes of determining Net Asset Value.  For all other purposes, including computingNet Asset Value for purposes of member subscription and redemption activity,such costs are amortized over 60 months. Consequently, the Net Asset Value andNet Asset Value per Unit of the different Classes for financial reportingpurposes and for all other purposes at March 31, 2008 and December 31,2007 are as follows:

 

5

----

 

March 31, 2008

 
| ** **      | ** ** | **Net Asset Value** | ** **  | ** **               | ** ** | **Net Asset Value per Unit** | ** ** |
|-----------------|------------|-------------------------------|-------------|--------------------------|------------|--------------------------------------------------|------------|
| ** **      | ** ** | **All Other  Purposes**  | ** **  | **Financial  Reporting** | ** ** | **Number of  Units**                        | ** ** | **All Other  Purposes** | ** ** | **Financial  Reporting** | ** ** |
| Class A    |       | $                             | 24,458,476  |                     | $          | 24,458,476                                       |       | 17,532,487 |   | $ | 1.3950 |   | $ | 1.3950 |   |
| Class C    |       | 98,545,255                    |        | 98,541,799               |       | 72,576,353                                       |       | 1.3578 |   | 1.3578 |   |
| Class D    |       | 15,256,840                    |        | 15,252,812               |       | 10,315,308                                       |       | 1.4790 |   | 1.4787 |   |
| Class I    |       | 15,310,644                    |        | 15,303,338               |       | 10,863,129                                       |       | 1.4094 |   | 1.4087 |   |
| Class D-SM |       | 26,497,649                    |        | 26,497,649               |       | 17,913,671                                       |       | 1.4792 |   | 1.4792 |   |
| Class D-TF |       | 94,721,040                    |        | 94,721,040               |       | 63,398,828                                       |       | 1.4941 |   | 1.4941 |   |
|            |       | $                             | 274,789,904 |                     | $          | 274,775,114                                      |       | 192,599,776 |   |   |   |   |   |
|                 |            |                               |             |                          |            |                                                  |            |  |  |  |  |  |  |  |  |

 

At December 31, 2007

 
| ** **      | ** ** | **Net Asset Value** | ** **  | ** **               | ** ** | **Net Asset Value per Unit** | ** ** |
|-----------------|------------|-------------------------------|-------------|--------------------------|------------|--------------------------------------------------|------------|
| ** **      | ** ** | **All Other  Purposes**  | ** **  | **Financial  Reporting** | ** ** | **Number of  Units**                        | ** ** | **All Other  Purposes** | ** ** | **Financial  Reporting** | ** ** |
| Class A    |       | $                             | 22,441,846  |                     | $          | 22,441,404                                       |       | 17,898,315 |   | $ | 1.2539 |   | $ | 1.2538 |   |
| Class C    |       | 96,877,717                    |        | 96,871,359               |       | 79,180,594                                       |       | 1.2235 |   | 1.2234 |   |
| Class D    |       | 21,588,645                    |        | 21,583,979               |       | 16,300,492                                       |       | 1.3244 |   | 1.3241 |   |
| Class I    |       | 14,381,886                    |        | 14,374,152               |       | 11,363,798                                       |       | 1.2656 |   | 1.2649 |   |
| Class D-SM |       | 18,235,954                    |        | 18,235,954               |       | 13,768,122                                       |       | 1.3245 |   | 1.3245 |   |
| Class D-TF |       | 92,508,126                    |        | 92,508,126               |       | 69,643,298                                       |       | 1.3283 |   | 1.3283 |   |
|            |       | $                             | 266,034,174 |                     | $          | 266,014,974                                      |       | 208,154,619 |   |   |   |   |   |
|                 |            |                               |             |                          |            |                                                  |            |  |  |  |  |  |  |  |  |

 

3. MARKET ANDCREDIT RISK

 

The nature of this Fund has certain risks, whichcannot be presented on the financial statements.  The following summarizes some 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 the Fund’sNet unrealized profit (loss) on such derivative instruments as reflected in theStatements of Financial Condition. The Fund’s exposure to market risk isinfluenced by a number of factors, including the relationships among thederivative instruments held by the Fund as well as the volatility and liquidityof the markets in which the derivative instruments are traded. Investment inforeign markets may also entail legal and political risks.

 

MLAI hasprocedures in place intended to control market risk exposure, although therecan be no assurance that they will, in fact, succeed in doing so.  These procedures focus primarily on 

 

6

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monitoring thetrading of Aspect, calculating the Net Asset Value of the Fund as of the closeof business on each day and reviewing outstanding positions forover-concentrations.  While MLAI does notintervene in the markets to hedge or diversify the Fund’s market exposure, MLAImay urge Aspect to reallocate positions in an attempt to avoidover-concentrations.  However, suchinterventions are expected to be unusual. It is expected that MLAI’s basic risk control procedures will consistsimply of the ongoing process of advisor monitoring, with the market riskcontrols being applied by Aspect.

 

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 provide clearinghouse arrangements in which the collectivecredit (in some cases limited in amount, in some cases not) of the members ofthe exchange is pledged to support the financial integrity of theexchange.  In over-the-countertransactions, on the other hand, traders must rely solely on the credit oftheir respective individual counterparties. Margins, which may be subject to loss in the event of a default, aregenerally required in exchange trading, and counterparties may also requiremargin in the over-the-counter markets.

 

The credit riskassociated with these instruments from counterparty nonperformance is the Netunrealized profit, if any, included in the Statements of Financial Condition.The Fund attempts to mitigate this risk by dealing exclusively with MerrillLynch entities as clearing brokers.

 

The Fund, in its normalcourse of business, enters into various contracts, with MLPF&S acting asits commodity broker.  Pursuant to thebrokerage arrangement 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 Equity in commodity futures tradingaccounts in the Statements of Financial Condition.

 

4.               RECENT ACCOUNTING PRONOUNCEMENTS

 

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 Fund adopted FAS 157 asof January 1, 2008. The adoption of FAS 157 did not have a material impacton the Fund’s financial statements.

 

Fairvalue of an investment is the amount that would be received to sell theinvestment in an orderly transaction between market participants at themeasurement date (i.e. the exit price).

 

FAS157 established a hierarchal disclosure framework which prioritizes and ranksthe level of market price observability used in measuring investments at fairvalue. Market price observability is impacted by a number of factors, includingthe type of investment and the characteristics specific to the investment.Investments with readily available active quoted prices or for which fair valuecan be measured from actively quoted prices generally will have a higher degreeof market price observability and a lesser degree of judgment used in measuringfair value.

 

Investmentsmeasured and reported at fair value are classified and disclosed in one of thefollowing categories:

 

LevelI – Quoted prices are available in active markets for identical investments asof the reporting date. The type of investments included in Level I are publiclytraded investments. As required by FAS 157, the Fund does not adjust the quotedprice for these investments even in situations where the Fund holds a largeposition and a sale could reasonably impact the quoted price.

 

7

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LevelII – Pricing inputs are other than quoted prices in active markets, which areeither directly or indirectly observable as of the reporting date, and fairvalue is determined through the use of models or other valuation methodologies.Investments which are generally included in this category are investmentsvalued using market data.

 

LevelIII – Pricing inputs are unobservable and include situations where there islittle, if any, market activity for the investment. Fair value for these investmentsis determined using valuation methodologies that consider a range of factors,including but not limited to the price at which the investment was acquired,the nature of the investment, local market conditions, trading values on publicexchanges for comparable securities, current and projected operatingperformance and financing transactions subsequent to the acquisition of theinvestment. The inputs into the determination of fair value require significantmanagement judgment. Due to the inherent uncertainty of these estimates, thesevalues may differ materially from the values that would have been used had aready market for these investments existed. Investments that are included inthis category generally are privately held debt and equity securities.

 

In certain cases, the inputs used to measure fairvalue may fall into different levels of the fair value hierarchy. In suchcases, an investment’s level within the fair value hierarchy is based on thelowest level of input that is significant to the fair value measurement. TheSponsor’s assessment of the significance of a particular input to the fairvalue measurement in its entirety requires judgment, and considers factorsspecific to the investment.

 

The following table summarizes the valuation of theFund’s investments by the above FAS 157 fair value hierarchy levels as of March 31,2008:

 
| ** **                                      | ** ** | **Total** | ** ** | **Level I** | ** ** | **Level II** | ** ** | **Level III** | ** ** |
|-------------------------------------------------|------------|-----------|------------|------------------|------------|-------------------|------------|--------------------|------------|
| Net unrealized  profit (loss) on open contracts |       | $         | (2,644,361 | )                | $          | (2,595,052        | )          | $                  | (49,309    | ) | N/A |   |
|                                                 |            |           |            |                  |            |                   |            |                    |            |  |  |  |

 

In March 2008, the FASB released Statement ofFinancial Accounting Standards No. 161, Disclosures about DerivativeInstruments and Hedging Activities – an amendment to FASB Statement No. 133(“FAS 161”). FAS 161 requires qualitative disclosures about objectives andstrategies for using derivatives, quantitative disclosures about fair valueamounts of and gains and losses on derivative instruments, and disclosuresabout credit-risk related contingent features in derivative agreements. Theapplication of FAS 161 is required for fiscal years beginning after November 15,2008 and interim periods within those fiscal years. Currently, the Fund isevaluating the implications of FAS 161 on its financial statements.

 

8

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Item 2.            Management’sDiscussion and Analysis of Financial Condition and Results of Operations

 

MONTH-END NET ASSET VALUEPER UNIT

(NON U.S. GAAP)

 

MLAI believes that the Net Asset Value used to calculate subscriptionand redemption value and to report performance to investors throughout the yearis the most valuable to the Members of the Fund.  Therefore, the charts below referencing NetAsset Value and performance measurements are based on the Net Asset Value forall other purposes, as discussed in Note 2 to the financial statements.

 

Class A

 
| ** ** | ** ** | **Jan.** | ** ** | **Feb.** | ** ** | **Mar.** | ** ** |
|------------|------------|----------|------------|----------|------------|----------|------------|
| 2007       |       | $        | 1.1952     |     | $          | 1.1332   |       | $ | 1.1134 |   |
| 2008       |       | $        | 1.3141     |     | $          | 1.4206   |       | $ | 1.3950 |   |

 

Class C

 
| ** ** | ** ** | **Jan.** | ** ** | **Feb.** | ** ** | **Mar.** | ** ** |
|------------|------------|----------|------------|----------|------------|----------|------------|
| 2007       |       | $        | 1.1769     |     | $          | 1.1150   |       | $ | 1.0946 |   |
| 2008       |       | $        | 1.2812     |     | $          | 1.3839   |       | $ | 1.3578 |   |

 

Class D

 
| ** ** | ** ** | **Jan.** | ** ** | **Feb.** | ** ** | **Mar.** | ** ** |
|------------|------------|----------|------------|----------|------------|----------|------------|
| 2007       |       | $        | 1.2452     |     | $          | 1.1823   |       | $ | 1.1631 |   |
| 2008       |       | $        | 1.3898     |     | $          | 1.5043   |       | $ | 1.4790 |   |

 

Class I

 
| ** ** | ** ** | **Jan.** | ** ** | **Feb.** | ** ** | **Mar.** | ** ** |
|------------|------------|----------|------------|----------|------------|----------|------------|
| 2007       |       | $        | 1.2019     |     | $          | 1.1402   |       | $ | 1.1206 |   |
| 2008       |       | $        | 1.3268     |     | $          | 1.4348   |       | $ | 1.4094 |   |

 

Class D-SM

 
| ** ** | ** ** | **Jan.** | ** ** | **Feb.** | ** ** | **Mar.** | ** ** |
|------------|------------|----------|------------|----------|------------|----------|------------|
| 2007       |       | N/A      |       | N/A      |       | N/A      |       |
| 2008       |       | $        | 1.3899     |     | $          | 1.5043   |       | $ | 1.4792 |   |
|            |            |          |            |          |            |          |            |  |  |  |

 

Class D-TF

 
| ** ** | ** ** | **Jan.** | ** ** | **Feb.** | ** ** | **Mar.** | ** ** |
|------------|------------|----------|------------|----------|------------|----------|------------|
| 2007       |       | N/A      |       | N/A      |       | N/A      |       |
| 2008       |       | $        | 1.3982     |     | $          | 1.5206   |       | $ | 1.4941 |   |
|            |            |          |            |          |            |          |            |  |  |  |

 

9

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PerformanceSummary

 

January 1,2008 to March 31, 2008

 

TheFund posted profits for the quarter with the interest rates, agriculture, stockindices, currencies, and the metals sectors posting gains while the energysector posted losses.

 

Theinterest rate sector posted profits for the Fund at the beginning of the year.The weak economic data early in January suggested an increased likelihoodof a recession that was reflected in an increased level of risk aversion on thepart of many investors. This prompted the U.S. Federal Reserve to cut interestrates by a total of 125 basis points. The Fund’s long positions in short terminterest rates were particularly profitable as were the long positions inbonds. The reduction in interest rates created positive market sentiment.Profits continued to be posted to the Fund mid-quarter only to be offset bylosses at the end of the quarter due to short term interest rates finishingdown.

 

Theagriculture sector posted profits for the Fund. Profits were posted to the Fundat the beginning of the year driven by long positions in corn and soybean. Theagriculture sector was the best performing sector mid-quarter due to the robustgains from the Fund’s long positions in soybeans, coffee and wheat. Amid highvolatility, the markets reversed sharply at the end of the quarter, causinglong positions to give back some of their gains made earlier in the year.

 

Thestock indices sector posted profits for the Fund. Short positions in manyequity indices were profitable for the Fund at the beginning of the year whichcontinued through the mid-quarter. Profits were posted for the Fund at the endof the quarter as short positions in stock indices took advantage of furthermarket weakness, especially in Japan.

 

Thecurrency sector posted profits for the Fund. After recent months that havewitnessed higher volatility in foreign exchange, global currency markets wererelatively subdued in January with a small loss in the currency sector.The Euro versus the U.S. dollar and the U.S. dollar versus the Swiss Francpairs were the most profitable positions for the Fund after the U.S. dollarfinished near record lows against several of the major currencies at the end ofthe mid-quarter. The currency sector finished profitably as positions benefitedfrom the continued depreciation of the U.S. dollar against the Euro and SwissFranc.

 

Themetals sector posted profits for the Fund. Profits were posted to the Fund atthe beginning of the year. The Fund’s long positions in precious metalsaccounted for much of the gains posted for the Fund in the middle of thequarter. The Fund struggled in the final weeks of the quarter with lossesposted for the Fund from precious metals amid high market volatility.

 

Theenergy sector posted losses for the Fund. A negative contribution from energiesas the strength in oil prices seen at the end of 2007 reversed posting lossesfor the Fund at the beginning of the quarter. The Fund’s long positions in oilsaccounted for much of the gains posted to the Fund mid-quarter. The energiessector saw more mixed results, but strong performance in gas oil and heatingoil ensured a net profit for the Fund as the quarter ended.

 

10

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January 1,2007 to March 31, 2007

 

TheFund posted an overall loss for the quarter with the agriculture sector postinggains and currencies, metals, stock indices, interest rate and the energysectors posted losses.

 

Theagricultural sector was the only profitable sector for the Fund. Theagricultural market was soft which attributed to the difficult tradingenvironment resulting with gains in the mid-quarter only. Losses were posted atthe beginning of the quarter and at the end as the price reversal in corn was akey element of the losses in the sector.

 

Thecurrency sector was not profitable for the Fund.  At the beginning of the quarter began withgains due to the short positions which captured the sell off in the U.K. giltsand the British pound following the Bank of England’s surprise decision toraise core interest rates. The U.S. dollar/Japanese yen cross-rate drove returnsas the long positions in the U.S. dollar strengthened following the U.S.economic data releases and the lack of rate hikes by the Bank of Japan. In thewake of increased market volatility mid-quarter, the Japanese yen strengthenedagainst the major currencies as investors liquidated their Japanese yen carrytrade positions. This caused losses due to the short positions in the Japaneseyen. However, the quarter is ended with currencies posting gains as the shortpositions in Euribor and the British pound were profitable as prices fell,helped by stronger than expected economic data releases in the United Kingdomand Eurozone.  Also finishing profitablywas the U.S. dollar which depreciated against the other major currenciescoupled with weaker than expected data releases and rising concerns about theU.S. sub-prime mortgage market aided gains being posted.

 

Themetals sector posted losses for the Fund. The beginning of the quarter beganwith losses which carried through mid-quarter due to a sell off of the longpositions in copper and zinc. The quarter ended with gains being posted to theFund.

 

Thestock indices sector posted losses for the Fund. Long Japanese positions postedthe best gains as markets rallied on the exporter friendly depreciation of theJapanese yen and a revival in oil prices. Losses posted mid-quarter were due tothe reduced long positions in stock indices hurt by the continued fallout fromthe equity market sell-off at the end of February which continued throughto the end of the quarter.

 

Theinterest rate sector posted losses for the Fund. The quarter began and endedwith gains being posted to the Fund in a volatile market environment. However,these gains could not offset losses posted mid-quarter.

 

Theenergy sector was the least profitable for the Fund. Short positions inenergies posted gains at the beginning of the quarter for the Fund as oilprices continued to fall, before a mid-month reversal driven by bad weatherconditions pared back some of these gains. However, losses were incurredmid-quarter through to the end of quarter as oil prices rallied against theFund’s short positions driven by mounting geopolitical pressures.

 

11

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Item 3.   Quantitative and QualitativeDisclosures About Market Risk

 

The Fund is a speculativecommodity pool. The market sensitive instruments held by it are acquired forspeculative trading purposes and all or substantially all of the Fund’s assetsare subject to the risk of trading loss. Unlike an operating company, the risk of market sensitive instruments isintegral, not incidental, to the Fund’s main line of business.

 

Market movements resultin frequent changes in the fair market value of the Fund’s open positions and,consequently, in its earnings and cash flow. The Fund’s market risk isinfluenced by a wide variety of factors, including the level and volatility ofinterest rates, exchange rates, equity price levels, the market value offinancial instruments and contracts, the diversification effects among the Fund’sopen positions and the liquidity of the markets in which it trades.

 

The Fund, under thedirection of Aspect, rapidly acquires and liquidates both long and shortpositions in a wide range of different markets. Consequently, it is not possible to predict how a particular futuremarket scenario will affect performance, and the Fund’s past performance is notnecessarily indicative of its future results.

 

Value at Risk is ameasure of the maximum amount which the Fund could reasonably be expected tolose in a given market sector. However, the inherent uncertainty of the Fund’sspeculative trading and the recurrence in the markets traded by the Fund ofmarket movements far exceeding expectations could result in actual trading ornon-trading losses far beyond the indicated Value at Risk or the Fund’sexperience to date (i.e., “risk of ruin”). In light of the foregoing, as wellas the risks and uncertainties intrinsic to all future projections, thequantifications included in this section should not be considered to constituteany assurance or representation that the Fund’s losses in any market sectorwill be limited to Value at Risk or by the Fund’s attempts to manage its marketrisk.

 

Quantifying The Fund’s Trading Value At Risk

 

QuantitativeForward-Looking Statements

 

The followingquantitative disclosures regarding the Fund’s market risk exposures contain “forward-lookingstatement” within the meaning of the safe harbor from civil liability providedfor such statements by the Private Securities Litigation Reform Act of 1995(set forth in Section 27A of the Securities Act of 1933 and Section 21Eof the Securities Exchange Act of 1934). All quantitative disclosures in this section are deemed to beforward-looking statements for purposes of the safe harbor, except forstatements of historical fact.

 

The Fund’s risk exposurein the various market sectors traded by Aspect is quantified below in terms ofValue at Risk.  Due to the Fund’smark-to-market accounting, any loss in the fair value of the Fund’s openpositions is directly reflected in the Fund’s earnings (realized or unrealized)and cash flow (at least in the case of exchange-traded contracts in whichprofits and losses on open positions are settled daily through variationmargin).

 

Maintenance marginrequirements have been used by the Fund as the measure of its Value atRisk.  Maintenance margin requirementsare set by exchanges to equal or exceed the maximum loss in the fair value ofany given contract incurred in 95%-99% of the one-day time periods included inthe historical sample (generally approximately one year) researched forpurposes of establishing margin levels. The maintenance margin levels are established by dealers and exchangesusing historical price studies as well as an assessment of current marketvolatility (including the implied volatility of the options on a given futurescontract) and economic fundamentals to provide a probabilistic estimate of themaximum expected near-term one-day price fluctuation.

 

12

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** **

In the case of marketsensitive instruments which are not exchange-traded (almost exclusivelycurrencies in the case of the Fund), the margin requirements for the equivalentfutures positions have been used as Value at Risk.  In those rare cases in which afutures-equivalent margin is not available, dealers’ margins have been used.

 

100% positive correlation inthe different positions held in each market risk category has beenassumed.  Consequently, the marginrequirements applicable to the open contracts have been aggregated to determineeach trading category’s aggregate Value at Risk.  The diversification effects resulting fromthe fact that the Fund’s positions are rarely, if ever, 100% positivelycorrelated have not been reflected.

 

***TheFund’s Trading Value at Risk in Different Market Sectors***

 

Thefollowing table indicates the average, highest and lowest trading Value at Riskassociated with the Fund’s open positions by market category for the fiscalperiod. For the three months ended March 31, 2008 and 2007, the Fund’saverage Month-end Net Asset Value for all other purposes was $277,770,214 and $124,502,361 respectively.

 

**March 31, 2008**

 
| ** **                | ** ** | **Average**                 | ** ** | **% of Average** | ** ** | **Highest Value** | ** ** | **Lowest Value** | ** ** |
|---------------------------|------------|-----------------------------|------------|----------------------------|------------|------------------------|------------|-----------------------|------------|
| **Market Sector**    | ** ** | **Value at Risk** | ** ** | **Capitalization**         | ** ** | **At Risk**       | ** ** | **At Risk**      | ** ** |
|                      |       |                        |       |                       |       |                   |       |                  |       |
| Agricultural  Commodities |       | $                           | 1,517,033  |                       | 0.55       | %                      | $          | 3,229,047             |       | $ | 426,019 |   |
| Currencies                |       | 5,059,466                   |       | 1.82                       | %          | 9,038,747              |       | 2,613,426             |       |
| Energy                    |       | 2,288,745                   |       | 0.82                       | %          | 4,458,641              |       | 843,891               |       |
| Interest Rates            |       | 12,596,381                  |       | 4.53                       | %          | 18,364,205             |       | 8,163,193             |       |
| Metals                    |       | 958,341                     |       | 0.35                       | %          | 2,047,636              |       | 139,919               |       |
| Stock Indices             |       | 2,160,333                   |       | 0.78                       | %          | 3,820,724              |       | 756,881               |       |
|                      |       |                        |       |                       |       |                   |       |                  |       |
| TOTAL                     |       | $                           | 24,580,299 |                       | 8.85       | %                      | $          | 40,959,000            |       | $ | 12,943,329 |   |

 

**March 31, 2007**

 
| ** **                | ** ** | **Average**       | ** ** | **% of Average**   | ** ** | **Highest Value** | ** ** | **Lowest Value** | ** ** |
|---------------------------|------------|-------------------|------------|--------------------|------------|-------------------|------------|------------------|------------|
| **Market  Sector**        | ** ** | **Value at Risk** | ** ** | **Capitalization** | ** ** | **At Risk**       | ** ** | **At Risk**      | ** ** |
|                      |       |              |       |               |       |              |       |             |       |
| Agricultural  Commodities |       | $                 | 172,583    |               | 0.14       | %                 | $          | 257,333          |       | $ | 120,543 |   |
| Currencies                |       | 217,917           |       | 0.18               | %          | 346,635           |       | 70,458           |       |
| Energy                    |       | 254,191           |       | 0.20               | %          | 322,537           |       | 142,915          |       |
| Interest Rates            |       | 13,507,563        |       | 10.85              | %          | 16,003,049        |       | 11,027,335       |       |
| Metals                    |       | 138,000           |       | 0.11               | %          | 188,690           |       | 54,595           |       |
| Stock Indices             |       | 763,488           |       | 0.61               | %          | 937,952           |       | 434,645          |       |
|                      |       |              |       |               |       |              |       |             |       |
| TOTAL                     |       | $                 | 15,053,742 |               | 12.09      | %                 | $          | 18,056,196       |       | $ | 11,850,491 |   |

 

13

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MaterialLimitations on Value at Risk as an Assessment of Market Risk

 

The facevalue of the market sector instruments held by the Fund is typically many timesthe applicable maintenance margin requirement (maintenance margin requirementsgenerally ranging between approximately 1% and 10% of contract face value) aswell as many times the capitalization of the Fund.  The magnitude of the Fund’s open positionscreates a “risk of ruin” not typically found in most other investmentvehicles.  Because of the size of itspositions, certain market conditions — unusual, but historically recurring fromtime to time — could cause the Fund to incur severe losses over a short periodof time.   The foregoing Value at Risktable — as well as the past performance of the Fund — gives no indication ofthis “risk of ruin.”

 

**Non-TradingRisk**

 

Foreign Currency Balances; Cash on Deposit with MLPF&S

 

The Fund has non-trading market risk on its foreign cash balances notneeded for margin. However, these balances (as well as the market risk theyrepresent) are immaterial.

 

The Fund also has non-trading market risk on the approximately 90%-95%of its assets which are held in cash at MLPF&S. The value of this cash isnot interest rate sensitive, but there is cash flow risk in that if interestrates decline so will the cash flow generated on these monies. This cash flowrisk is immaterial.

 

Qualitative Disclosures Regarding Primary Trading Risk Exposures

 

The following qualitative disclosures regarding the Fund’s market riskexposures — except for (i) those disclosures that are statements ofhistorical fact and (ii) the descriptions of how the Fund manages itsprimary market risk exposures — constitute forward-looking statements withinthe meaning of Section 27A of the Securities Act and Section 21E ofthe Securities Exchange Act. The Fund’s primary market risk exposures as wellas the strategies used and to be used by MLAI and Aspect for managing suchexposures are subject to numerous uncertainties, contingencies and risks, anyone of which could cause the actual results of the Fund’s risk controls todiffer materially from the objectives of such strategies. Government interventions,defaults and expropriations, illiquid markets, the emergence of dominantfundamental factors, political upheavals, changes in historical pricerelationships, an influx of new market participants, increased regulation andmany other factors could result in material losses as well as in materialchanges to the risk exposures and the risk management strategies of the Fund.There can be no assurance that the Fund’s current market exposure and/or riskmanagement strategies will not change materially or that any such strategieswill be effective in either the short- or long-term. Investors must be preparedto lose all or substantially all of the time value of their investment in theFund.

 

14

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Item 4. Controls and Procedures

 

MLAI’sChief Executive Officer and the Chief Financial Officer, on behalf of the Fund,have evaluated the effectiveness of the design and operation of the disclosurecontrols and procedures with respect to the Fund as of and for the quarterwhich ended March 31, 2008, and, based on this evaluation, have concludedthat these disclosure controls and procedures are effective. Additionally,there were no significant changes in the Fund’s internal controls overfinancial reporting which materially affect such internal controls.

 

*Changes in Internal Controls over Financial Reporting*

 

Nochange in internal controls over financial reporting (as defined in Rule 13a-15(f) underthe Exchange Act) occurred during the quarter which ended March 31, 2008that has materially affected, or is reasonable likely to materially affect, theFund’s internal controls, over financial reporting.

 

*Management’s Report on Internal Control over FinancialReporting:*

 

TheFund’s management is responsible for establishing and maintaining adequateinternal controls over financial reporting.  The Fund’s internal controlsover financial reporting is a process designed under the supervision of MLAI’sChief Executive Officer and the Chief Financial Officer, on behalf of the Fundand is effected by management, other personnel and service providers to providereasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance withU.S. GAAP include policies and procedures that:

 

·   Pertainto the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the Fund.

 

·   Providereasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with U.S. GAAP and thatreceipts and expenditures of the Fund are being made only in accordance withauthorizations of management of the Fund’s and Board of Managers of MLAI LLC.

 

·   Providereasonable assurance regarding prevention or timely detection of unauthorizedacquisitions, use or disposition of the Fund’s assets that could have amaterial effect on the financial statements of the Fund.

 

Becauseof its inherent limitations, internal controls over financial reporting canonly provide reasonable assurance with respect to financial statementpreparation and presentation.  Projections of any evaluation ofeffectiveness to future periods are subject to the risks that controls may becomeinadequate because of changes in condition, or that the degree of compliancewith the policies or procedures may deteriorate.

 

TheFund’s management assessed the effectiveness of the Fund’s internal controlsover financial reporting as March 31, 2008.  In making thisassessment, management used the criteria set forth by the Committee ofSponsoring Organizations of the Treadway Commission (COSO) in “InternalControl-Integrated Framework”.

 

Basedon its assessment the Fund’s management concluded that at March 31, 2008the Fund’s internal controls over financial reporting was effective.

 

15

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PART II - OTHER INFORMATION

 
| Item 1. | Legal Proceedings |
|---------|-------------------|
|    |              |
|    | None.             |

 

Item 1A.  Risk Factors

 

## Past Performance NotNecessarily Indicative of Future Results

 

Past performance is notnecessarily indicative of future results. The trading advisor’s past performance may not be representative of howit may trade in the future for the Fund.

 

## Volatile Markets; HighlyLeveraged Trading

 

Futures and forwardtrading is highly leveraged, and market price levels are volatile andmaterially affected by unpredictable factors such as weather and governmentalintervention.  The combination ofleverage and volatility creates a high degree of risk.

 

## Importance of GeneralMarket Conditions

 

Overall market oreconomic conditions — which neither MLAI nor the trading advisor can predict orcontrol — have a material effect on the performance of any managed futuresstrategy.

 

## Forward Trading

 

The Fund will tradecurrencies in the forward markets in addition to in the futures markets.  The forward markets are over-the-counter,non-exchange markets, and in trading in these markets, the Fund will bedependent on the credit standing of the counterparties with which they trade,without the financial support of any clearinghouse system.  In addition, the prices offered for the sameforward contract may vary significantly among different forward marketparticipants.  Forward marketcounterparties are under no obligation to enter into forward transactions witha Fund, including transactions through which the Fund is attempting toliquidate open positions.

 

## Increased Assets UnderManagement

 

There appears to be atendency for the rates of return achieved by managed futures advisors todecline as assets under management increase. The trading advisor has not agreed to limit the amount of additionalequity which it may manage.

 

16

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## Trading Advisor Risk

 

The Fund is subject tothe risk of the bad judgment, negligence or misconduct of its tradingadvisor.  There have been a number ofinstances in recent years in which private investment funds have incurredsubstantial losses due to manager misconduct.

 

## Changes in TradingStrategy

 

The trading advisor may make material changes inits trading strategies without the knowledge of MLAI.

 

## Illiquid Markets

 

Certain positions heldby the Fund may become illiquid, preventing the Fund’s trading advisor fromacquiring positions otherwise indicated by its strategy or making it impossiblefor the trading advisor to close out positions against which the market is moving.

 

Certain futures marketsare subject to “daily price limits,” restricting the maximum amount by whichthe price of a particular contract can change during any given tradingday.  Once a contract’s price has moved “thelimit,” it may be impossible or economically non-viable to execute trades insuch contract.  From time to time, priceshave moved “the limit” for a number of consecutive days, making it impossiblefor traders against whose positions the market was moving to prevent largelosses.

 

## Trading on Non-U.S.Exchanges

 

The trading advisor maytrade extensively on non-U.S. exchanges. These exchanges are not regulated by any United States governmentalagency.  The Fund could incur substantiallosses trading on foreign exchanges to which it would not have been subject hadits trading advisor limited its trading to U.S. markets.

 

The profits and lossesderived from trading foreign futures and options will generally be denominatedin foreign currencies; consequently, the Fund will be subject to a certaindegree of exchange-rate risk in trading such contracts.

 

The Fund Could Lose Assets and Have Its TradingDisrupted Due to the Bankruptcy of One of the Parties

 

The Fund is subject to the risk of insolvencyof a counterparty, an exchange, a clearinghouse or MLPF&S. Fund assetscould be lost or impounded during lengthy bankruptcy proceedings.  Were a substantial portion of the Fund’scapital tied up in a bankruptcy, MLAI might suspend or limit trading, perhapscausing the Fund to miss significant profit opportunities. There are increasedrisks in dealing with unregulated trading counterparties including the riskthat assets may not benefit from the protection afforded to “customer funds”deposited with regulated dealers and brokers.

 

17

----

 

Item 2.            UnregisteredSales of Equity Securities and Use of Proceeds

 

(a)   Issuance to accredited investors pursuant toRegulation D and Section 4(6) under the Securities Act.  The selling agent of the following Class ofUnits was MLPF&S.

 
| CLASS A |       |             |       |       |       |             |       |       |       |       |       |       |       |       |       |
|--------------|------------|------------------|------------|------------|------------|------------------|------------|------------|------------|------------|------------|------------|------------|------------|------------|
| ** **   | ** ** | ** **       | ** ** | ** ** | ** ** | ** **       | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **   | ** ** | **Subscription** | ** ** | ** ** | ** ** | ** **       | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **   | ** ** | **Amount**       | ** ** | **Units**  | ** ** | **NAV (1)** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
|         |       |             |       |       |       |             |       |       |       |       |       |       |       |       |       |
| Jan-08       |       | $                | 59,360     |       | 47,340     |             | $          | 1.2539     |       |       |       |       |       |       |       |   |   |   |   |
| Feb-08       |       | 204,746          |       | 155,807    |       | 1.3141           |       |       |       |       |       |       |       |       |       |
| Mar-08       |       | 1,515,507        |       | 1,066,808  |       | 1.4206           |       |       |       |       |       |       |       |       |       |
| Apr-08       |       | 329,340          |       | 236,086    |       | 1.3950           |       |       |       |       |       |       |       |       |       |
|              |            |                  |            |            |            |                  |            |            |            |            |            |            |            |            |            |  |  |  |  |

 
| CLASS D |       |             |       |       |       |             |       |       |       |       |       |       |       |       |       |
|--------------|------------|------------------|------------|------------|------------|------------------|------------|------------|------------|------------|------------|------------|------------|------------|------------|
| ** **   | ** ** | ** **       | ** ** | ** ** | ** ** | ** **       | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **   | ** ** | **Subscription** | ** ** | ** ** | ** ** | ** **       | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **   | ** ** | **Amount**       | ** ** | **Units**  | ** ** | **NAV (1)** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
|         |       |             |       |       |       |             |       |       |       |       |       |       |       |       |       |
| Jan-08       |       | $                | —     |       | —     |             | $          | 1.3244     |       |       |       |       |       |       |       |   |   |   |   |
| Feb-08       |       | —           |       | —     |       | 1.3898           |       |       |       |       |       |       |       |       |       |
| Mar-08       |       | —           |       | —     |       | 1.5043           |       |       |       |       |       |       |       |       |       |
| Apr-08       |       | 974,999          |       | 659,229    |       | 1.4790           |       |       |       |       |       |       |       |       |       |
|              |            |                  |            |            |            |                  |            |            |            |            |            |            |            |            |            |  |  |  |  |

 
| CLASS D-SM |       |             |       |       |       |             |       |       |       |       |       |       |       |
|-----------------|------------|------------------|------------|------------|------------|------------------|------------|------------|------------|------------|------------|------------|------------|
| ** **      | ** ** | ** **       | ** ** | ** ** | ** ** | ** **       | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **      | ** ** | **Subscription** | ** ** | ** ** | ** ** | ** **       | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **      | ** ** | **Amount**       | ** ** | **Units**  | ** ** | **NAV (1)** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
|            |       |             |       |       |       |             |       |       |       |       |       |       |       |   |   |
| Jan-08          |       | $                | 1,404,330  |       | 1,060,272  |             | $          | 1.3245     |       |       |       |       |       |   |   |   |   |   |   |
| Feb-08          |       | 1,137,736        |       | 818,574    |       | 1.3899           |       |       |       |       |       |       |       |   |   |
| Mar-08          |       | 3,409,802        |       | 2,266,703  |       | 1.5043           |       |       |       |       |       |       |       |   |   |
| Apr-08          |       | 10,243,376       |       | 6,924,943  |       | 1.4792           |       |       |       |       |       |       |       |   |   |
|                 |            |                  |            |            |            |                  |            |            |            |            |            |            |            |  |  |  |  |  |  |

 
| CLASS C |       |             |       |       |       |             |       |       |       |       |       |       |       |       |       |
|--------------|------------|------------------|------------|------------|------------|------------------|------------|------------|------------|------------|------------|------------|------------|------------|------------|
| ** **   | ** ** | ** **       | ** ** | ** ** | ** ** | ** **       | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **   | ** ** | **Subscription** | ** ** | ** ** | ** ** | ** **       | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **   | ** ** | **Amount**       | ** ** | **Units**  | ** ** | **NAV (1)** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
|         |       |             |       |       |       |             |       |       |       |       |       |       |       |       |       |
| Jan-08       |       | $                | 987,828    |       | 807,379    |             | $          | 1.2235     |       |       |       |       |       |       |       |   |   |   |   |
| Feb-08       |       | 1,071,005        |       | 835,939    |       | 1.2812           |       |       |       |       |       |       |       |       |       |
| Mar-08       |       | 1,329,328        |       | 960,566    |       | 1.3839           |       |       |       |       |       |       |       |       |       |
| Apr-08       |       | 4,467,945        |       | 3,290,577  |       | 1.3578           |       |       |       |       |       |       |       |       |       |
|              |            |                  |            |            |            |                  |            |            |            |            |            |            |            |            |            |  |  |  |  |

 
| CLASS I |       |             |       |       |       |             |       |       |       |       |       |       |       |       |       |
|--------------|------------|------------------|------------|------------|------------|------------------|------------|------------|------------|------------|------------|------------|------------|------------|------------|
| ** **   | ** ** | ** **       | ** ** | ** ** | ** ** | ** **       | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **   | ** ** | **Subscription** | ** ** | ** ** | ** ** | ** **       | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **   | ** ** | **Amount**       | ** ** | **Units**  | ** ** | **NAV (1)** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
|         |       |             |       |       |       |             |       |       |       |       |       |       |       |       |       |
| Jan-08       |       | $                | 45,535     |       | 35,979     |             | $          | 1.2656     |       |       |       |       |       |       |       |   |   |   |   |
| Feb-08       |       | 492,498          |       | 371,192    |       | 1.3268           |       |       |       |       |       |       |       |       |       |
| Mar-08       |       | 25,000           |       | 17,424     |       | 1.4348           |       |       |       |       |       |       |       |       |       |
| Apr-08       |       | 807,141          |       | 572,684    |       | 1.4094           |       |       |       |       |       |       |       |       |       |
|              |            |                  |            |            |            |                  |            |            |            |            |            |            |            |            |            |  |  |  |  |

 
| CLASS D-TF |       |             |       |       |       |             |       |       |       |       |       |       |       |
|-----------------|------------|------------------|------------|------------|------------|------------------|------------|------------|------------|------------|------------|------------|------------|
| ** **      | ** ** | ** **       | ** ** | ** ** | ** ** | ** **       | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **      | ** ** | **Subscription** | ** ** | ** ** | ** ** | ** **       | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **      | ** ** | **Amount**       | ** ** | **Units**  | ** ** | **NAV (1)** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
|            |       |             |       |       |       |             |       |       |       |       |       |       |       |   |   |
| Jan-08          |       | $                | —     |       | —     |             | $          | 1.3283     |       |       |       |       |       |   |   |   |   |   |   |
| Feb-08          |       | —           |       | —     |       | 1.3982           |       |       |       |       |       |       |       |   |   |
| Mar-08          |       | —           |       | —     |       | 1.5206           |       |       |       |       |       |       |       |   |   |
| Apr-08          |       | —           |       | —     |       | 1.4941           |       |       |       |       |       |       |       |   |   |
|                 |            |                  |            |            |            |                  |            |            |            |            |            |            |            |  |  |  |  |  |  |

 

----

(1) Net Asset Value for all other purposes.

 

(b) None.

(c) None.

 

Item 3.            DefaultsUpon Senior Securities

 

None.

 

18

----

 

Item 4.            Submissionof Matters to a Vote of Security Holders

 

None.

 

Item 5.            OtherInformation

 

None.

 

Item 6.            Exhibits

 

The following exhibitsare incorporated by reference or are filed herewith to this Quarterly Report onForm 10-Q:

 

31.01 and 31.02             Rule 13a-14(a)/15d-14(a) Certifications

 

Exhibit 31.01 and31.02:               Arefiled herewith.

 

32.01 and 32.02             Section 1350Certifications

 

Exhibit 32.01 and32.02                Arefiled herewith.

 

19

----

 

**SIGNATURES**

 

Pursuant to the requirements of the SecuritiesExchange Act of 1934, the registrant has duly caused this report to be signedon its behalf by the undersigned thereunto duly authorized.

 

 
|                    | ML ASPECT FUTURESACCESS LLC |
|-------------------------|-----------------------------|
|                    |                        |   |
|                    |                        |   |
|                    | By:                         | MERRILL LYNCH ALTERNATIVE |
|                    |                        |            INVESTMENTS  LLC |
|                    |                        |            (Manager) |
|                    |                        |   |
|                    |                        |   |
| Date: May 14, 2008 | By                          | /s/ PAUL MORTON |
|                    |                        | Paul Morton |
|                    |                        | Chief Executive Officer, President and Manager |
|                    |                        | (Principal Executive Officer) |
|                    |                        |   |
|                    |                        |   |
| Date: May 14, 2008 |                        |   |
|                    | By                          | /s/ BARBRA E. KOCSIS |
|                    |                        | Barbra E. Kocsis |
|                    |                        | Chief Financial Officer |
|                    |                        | (Principal Financial and Accounting Officer) |

 

20

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