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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-K



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(Mark One)

|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------



For the fiscal year ended December 31, 2004



OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------



For the transition period from  to



Commission file number 0-32687



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WORLD MONITOR TRUST II  SERIES E

(Exact name of Registrant as specified in its charter)



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|                                                                     |  |                                     
|-------------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                             |  | 13-4058319                          
|(State or other Jurisdiction of Incorporation or organization)       |  | (I.R.S. Employer Identification No.)
|                                                                     | 
|51 Weaver Street, Building 1 South, 2ndFloor, Greenwich, Connecticut |  | 06831                               
|(Address of principal executive offices)                             |  | (Zip Code)                          



Registrants
telephone number, including area code: (203) 861-1000



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Securities registered pursuant to Section 12(b) of the Act:



None



Securities registered pursuant to Section 12(g) of the Act:



Limited Interests

(Title of class)



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Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.    Yes  x    No ̈



Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K  x



Indicate by
check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).    Yes ̈No  x



DOCUMENTS INCORPORATED BY REFERENCE



Registrants Annual Report to Interest holders for the year ended December 31, 2004 is incorporated by reference into Parts II and IV of this Annual Report on Form 10-K



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WORLD MONITOR TRUST II  SERIES E

(a Delaware Business Trust)



TABLE OF CONTENTS



|           |  |                                                                                                                  |  |     
|---------- |  | ---------------------------------------------------------------------------------------------------------------- |  | ----
|           |  |                                                                                                                  |  | PAGE
|PART I     |  |                                                                                                                  |  |     
|           |  |                                                                                                                 
|Item 1.    |  | Business                                                                                                         |  | 3   
|Item 2.    |  | Properties                                                                                                       |  | 4   
|Item 3.    |  | Legal Proceedings                                                                                                |  | 4   
|Item 4.    |  | Submission of Matters to a Vote of Interest Holders                                                              |  | 4   
|           |  |                                                                                                                 
|PART II    |  |                                                                                                                  |  |     
|           |  |                                                                                                                 
|Item 5.    |  | Market for the Registrants Interests, Related Interest Holder Matters and Issuer Purchases of Equity Securities |  | 4   
|Item 6.    |  | Selected Financial Data                                                                                          |  | 5   
|Item 7.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                            |  | 5   
|Item 7A.   |  | Quantitative and Qualitative Disclosures About Market Risk                                                       |  | 9   
|Item 8.    |  | Financial Statements and Supplementary Data                                                                      |  | 11  
|Item 9.    |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                             |  | 12  
|Item 9A.   |  | Controls and Procedures                                                                                          |  | 12  
|Item 9B.   |  | Other Information                                                                                                |  | 12  
|           |  |                                                                                                                 
|PART III   |  |                                                                                                                  |  |     
|           |  |                                                                                                                 
|Item 10.   |  | Directors and Executive Officers of the Registrant                                                               |  | 12  
|Item 11.   |  | Executive Compensation                                                                                           |  | 14  
|Item 12.   |  | Security Ownership of Certain Beneficial Owners and Management and Related Interest Holder Matters               |  | 15  
|Item 13.   |  | Certain Relationships and Related Transactions                                                                   |  | 15  
|Item 14.   |  | Principal Accounting Fees and Services                                                                           |  | 15  
|           |  |                                                                                                                 
|PART IV    |  |                                                                                                                  |  |     
|           |  |                                                                                                                 
|Item 15.   |  | Exhibits, Financial Statement Schedules, and Reports on Form 8-K                                                 |  | 15  
|           |  | Financial Statements and Financial Statement Schedules                                                           |  | 15  
|           |  | Exhibits                                                                                                         |  | 16  
|           |  | Reports on Form 8-K                                                                                              |  | 16  
|           | 
|SIGNATURES |  | 17                                                                                                              



2



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PART I



Item 1. Business



General



World Monitor Trust II (the Trust) is a business trust organized under the laws
of Delaware on April 22, 1999. The Trust consists of three separate and distinct series (Series): Series D, E and F. Series D, E and F commenced trading operations on March 13, 2000, April 6, 2000 and March 1, 2000, respectively, and
each Series will continue to exist until terminated pursuant to the provisions of Article XIII of the Third Amended and Restated Declaration of Trust and Trust Agreement (the Trust Agreement). The assets of each Series are segregated
from those of the other Series, separately valued and independently managed. Each Series was formed to engage in the speculative trading of a diversified portfolio of futures, forward and options contracts, and may, from time to time, engage in cash
and spot transactions. The trustee of the Trust is Wilmington Trust Company. The Trusts fiscal year for book and tax purposes ends on December 31.



Series E (the Registrant) is engaged solely in the business of commodity futures and forward trading therefore, presentation of industry segment information
is not applicable.



On July 1, 2003, Prudential Financial, Inc.
(Prudential) and Wachovia Corp. (Wachovia) combined their separate retail securities brokerage and clearing businesses under a new holding company named Wachovia/Prudential Financial Advisors, LLC (WPFA); owned
62% by Wachovia and 38% by Prudential. As a result, the retail brokerage operations of Prudential Securities (PSI) were contributed to Wachovia Securities, LLC (Wachovia Securities). Wachovia Securities is wholly-owned by
WPFA and is a registered broker-dealer and a member of the National Association of Securities Dealers, Inc. (NASD) and all major securities exchanges. The Registrant and its Managing Owner, Prudential Securities Futures Management, Inc.,
a wholly-owned subsidiary of PSI, entered into a service agreement with Wachovia Securities, effective July 1, 2003. Pursuant to this agreement, Wachovia Securities agreed to provide certain enumerated services to accounts of the limited interest
owners carried at Wachovia.



Effective July 1, 2003, PSI changed its name to
Prudential Equity Group, Inc. (PEG). PEG remained an indirectly wholly-owned subsidiary of Prudential. PEG was a registered broker-dealer and a member of the NASD and all major securities exchanges and conducted the equity research,
domestic and international equity sales and trading operations, and commodity brokerage and derivative operations it had previously conducted as PSI until December 31, 2003. As part of the process of reorganizing its business structure, Prudential
Securities Group Inc. (PSG), the direct parent of PEG and a wholly-owned subsidiary of Prudential, transferred the commodity brokerage, commodity clearing and derivative operations previously performed by PEG to another PSG indirect
wholly-owned subsidiary, Prudential Financial Derivatives, LLC (PFD) effective January 1, 2004. Like PEG, PFD is registered as a futures commission merchant under the Commodity Exchange Act and is a member of the National Futures
Association. On April 1, 2004, PEG transferred the ownership of the Managing Owner and PFD Holdings, LLC, the direct parent of PFD to PSG.



On June 30, 2004, PSG and Preferred Investment Solutions Corp., formerly Kenmar Advisory Corp. (Preferred), entered into a Stock Purchase Agreement, pursuant
to which PSG would sell, and Preferred will buy, all of the capital stock of Prudential Securities Futures Management Inc. (the then current Managing Owner of the Registrant) and another commodity pool operator owned by PSG. In connection with the
transaction, Prudential Securities Futures Management Inc. solicited proxies seeking approval from the Registrants interest holders for (i) the sale of the stock of Prudential Securities Futures Management Inc. to Preferred; (ii) the
concomitant approval of Preferred as the new Managing Owner of the Registrant; and (iii) the approval of certain amendments to the Declaration of the Trust and Trust Agreement of the Trust. A Report on Form 8-K describing the transaction was filed
with the Securities and Exchange Commission on July 1, 2004 and the definitive proxies were filed with the Securities and Exchange Commission on July 20, 2004.



As of October 1, 2004, Preferred acquired from PSG all of the outstanding stock of Prudential Securities Futures Management Inc. Immediately after such acquisition,
Prudential Securities Futures Management Inc. was merged with and into Preferred. Accordingly, as of October 1, 2004 all of the board of directors and officers of Prudential Securities Futures Management Inc. resigned. Following Preferreds
acquisition of Prudential Securities Futures Management Inc. and its merger with and into Preferred, Preferred became the successor Managing Owner of the Registrant.



Managing owner and its Affiliates



The term Managing Owner, as used herein, refers either to Prudential Securities Futures Management Inc. or Preferred, depending upon the applicable period discussed.



The Managing Owner is required to maintain at least a 1% interest in the
capital, profits and losses of each Series so long as it is acting as the Managing Owner.



3



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The Offering



Up to $50,000,000 of limited interests in each Series (Limited Interests) were being offered once each week (totaling $150,000,000) (Subscription
Maximum), until each Series Subscription Maximum was met either through sale or exchange or until the Managing Owner suspended the offering of Limited Interests. Limited Interests were being offered to investors who met certain
established suitability standards, with a minimum initial subscription of $5,000 ($2,000 for an individual retirement account), although the minimum purchase for any single Series was $1,000. General interests were also being sold exclusively to the
managing owner of the Trust. Limited Interests and general interests are sometimes collectively referred to as Interests.



Initially, the Limited Interests for each Series were offered for a period of up to 180 days after the date of the Prospectus (Initial Offering Period) at
$100 per Interest. The subscription minimum of $5,000,000 for each Series was reached during the Initial Offering Period permitting Series D, E and F to commence trading operations. The Registrant completed its initial offering on April 6, 2000 with
gross proceeds of $5,157,459 which was fully allocated to commodities trading. The Registrant and Series F were offered until they substantially achieved their Subscription Maximum during June 2003 and July 2003, respectively. In addition, since
July 2003, the weekly offering of interests in Series D has been suspended. Accordingly, at this time, Interests in Series D may not be offered or exchanged.



During the Continuous Offering Period through December 31, 2003, Series E raised additional gross proceeds of $45,279,587 from the sales of Interests.



The Trading Advisor



Each series has its own independent commodity trading advisor that makes that Series trading decisions. The Managing Owner, on behalf
of the Registrant, entered into an advisory agreement with Graham Capital Management, L.P. (the Trading Advisor) to make the trading decisions for Series E. The advisory agreement may be terminated for various reasons, including at the
discretion of the Managing Owner. The Managing Owner has allocated 100% of the proceeds from the initial and continuous offering of the Registrant to the Trading Advisor.



Competition



The Managing Owner and its affiliates have formed, and may continue to form, various entities to engage in the speculative trading of futures, forward and options
contracts which have certain of the same investment policies as the Registrant.



The Registrant was an open-end fund which solicited the sale of additional Limited Interests on a weekly basis until the Subscription Maximum was reached. As such, the Registrant no longer competes with other entities to attract new
participants. However, to the extent that the Trading Advisor recommends similar or identical trades to the Registrant and other accounts which it manages, the Registrant may compete with those accounts for the execution of the same or similar
trades, as well as with other market participants.



Employees



The Registrant has no employees, Management and administrative services
for the Registrant are performed by the Managing Owner or third parties pursuant to the Trust Agreement, as further discussed in Notes 3 and 4 to the Registrants financial statements included in its annual report for the year ended December
31, 2004 (Registrants 2004 Annual Report), which is filed as an exhibit hereto.



Item 2. Properties



The Registrant does not own or
lease any property.



Item 3. Legal Proceedings



There are no material
legal proceedings pending by or against the Registrant or the Managing Owner.



Item 4. Submission of Matters to a Vote of Interest Holders



None



PART II



Item 5. Market for the Registrants Interests, Related Interest Holder Matters and Issuer Purchases of Equity Securities



Information with respect to the offering of Limited Interests and the use of proceeds is incorporated by reference to Note 1 to the Registrants 2004 Annual Report,
which is filed as an exhibit hereto.



4



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A significant secondary market for the Limited Interests has not developed, and is not expected to develop in the future.
There are also certain restrictions set forth in the Trust Agreement limiting the ability of an Interest holder to transfer Limited Interests. However, Limited Interests may be redeemed on a weekly basis, but are subject to a redemption fee if
transacted within one year of the effective date of purchase. Additionally, Interests owned in one Series of the Trust (Series D, E, or F) may be exchanged, without any charge, for Interests of one or more other Series on a weekly basis for as long
as Limited Interests in those Series are being offered to the public. Exchanges and Redemptions are calculated based on the applicable Series then current net asset value per Interest as of the close of business on the Friday immediately
preceding the week in which the exchange or redemption request is effected. At this time, Interests may not be exchanged as Limited Interests are not currently being offered. Future redemptions and exchanges will impact the amount of funds available
for investment in commodity contracts in subsequent periods.



There are no
material restrictions upon the Registrants present or future ability to make distributions in accordance with the provisions of the Trust Agreement. No distributions have been made since inception and no distributions are anticipated in the
future.



As of March 18, 2005, there were 1,987 holders of record owning
223,138.722 Interests which include 2,371 general interests.



Item 6. Selected Financial Data



The following
table presents selected financial data of the Registrant. This data should be read in conjunction with the financial statements of the Registrant and the notes thereto on pages 3 through 17 of the Registrants 2004 Annual Report, which is filed
as an exhibit hereto.



|                                         |  |                         |            |      |   |            |  |      |            |  |   |          
|---------------------------------------- |  | ----------------------- | ---------- | ---- | - | ---------- |  | ---- | ---------- |  | - | ---------
|                                         |  | Year Ended December 31,
|                                         |  | 2004                    |            | 2003 |   | 2002       |  | 2001
|Total revenues (including interest)      |  | $                       | 6,740,709  |      | $ | 8,118,684  |  | $    | 6,164,457  |  | $ | 1,536,002
|                                         |  |                         |            |      |   |            |  |      |            |  |   |          
|Net income                               |  | $                       | 1,657,363  |      | $ | 3,491,294  |  | $    | 3,768,209  |  | $ | 540,554  
|                                         |  |                         |            |      |   |            |  |      |            |  |   |          
|Net income per weighted average Interest |  | $                       | 6.64       |      | $ | 13.63      |  | $    | 34.59      |  | $ | 9.39     
|                                         |  |                         |            |      |   |            |  |      |            |  |   |          
|Total assets                             |  | $                       | 43,331,007 |      | $ | 49,181,163 |  | $    | 26,874,553 |  | $ | 9,099,268
|                                         |  |                         |            |      |   |            |  |      |            |  |   |          
|Net asset value per Interest             |  | $                       | 184.94     |      | $ | 176.45     |  | $    | 158.38     |  | $ | 129.29   
|                                         |  |                         |            |      |   |            |  |      |            |  |   |          



Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations



Critical Accounting Policies



Preparation of the financial statements and related disclosures in compliance with accounting principles generally accepted in the United States of America requires the
application of appropriate accounting rules and guidance, as well as the use of estimates. Series Es application of these policies involves judgments and actual results may differ from the estimates used.



The Managing Owner has evaluated the nature and types of estimates that it makes in preparing
Series Es financial statements and related disclosures and has determined that the valuation of its investments which are not traded on a United States or Internationally recognized futures exchange involves a critical accounting policy. The
market values of futures (exchange traded) contracts is verified by the administrator who obtains valuation data from third party data providers such as Bloomberg and Reuters and compares those prices with Series Es broker. The market value of
currency swap and forward (non-exchange traded) contracts is extrapolated on a forward basis from the spot prices quoted as of 3 PM on the last business day of the reporting period. All values assigned by the administrator and confirmed by the
Managing Owner are final and conclusive as to all Interest holders.



As such,
if actual results vary from estimates used, they are anticipated to not have a material impact on the financial statements and related disclosures.



Liquidity and Capital Resources



Series E commenced operations on April 6, 2000 with gross proceeds of $5,157,459 allocated to commodities trading. Additional contributions raised through the continuous
offering from the sales of Interests for the years ended December 31, 2003 and 2002 and for the period from April 6, 2000 (commencement of operations) to December 31, 2003 resulted in additional gross proceeds to Series E of $23,311,693, $16,368,262
and $45,279,587, respectively. Series Es Interests were offered until it substantially achieved its subscription maximum of $50,000,000 on the sale of Limited Interests during June 2003.



Limited Interests in Series E may be redeemed on a weekly basis but are subject to a
redemption fee if transacted within one year of the effective date of purchase. Redemptions of Limited Interests for the years ended December 31, 2004 and 2003 were $7,482,887 and $4,994,539, respectively, and redemptions of general interests were
$60,968 and $151,756 for the years ended December 31, 2004 and 2003, respectively. Redemptions of Limited Interests and general interests for the period from April 6, 2000 (commencement of operations) to December 31, 2004 were $18,388,084 and
$232,300, respectively. Additionally, Interests owned in any series of World Monitor Trust II (Series D, E or F) may be exchanged, without any charge, for Interests of one or more other series of World Monitor Trust II on a weekly basis for as long
as Limited Interests in those series are being offered to the public. Series E and World Monitor Trust IISeries F are no longer offered to the public as those series substantially achieved their subscription maximums during June 2003 and July
2003, respectively. In addition, since July 2003, the offering of interests in World Monitor Trust IISeries D (Series D) has been suspended. Accordingly, at this time, Interests may not be exchanged. Future redemptions and
exchanges will impact the amount of funds available for investment in commodity contracts in subsequent periods.



At December 31, 2004, 100% of Series Es net assets were allocated to commodities trading. A significant portion of the net assets was held in cash which was used as
margin for trading in commodities. Inasmuch as the sole business of Series E is to trade in commodities, Series E continues to own such liquid assets to be used as margin. The broker credits Series E with interest income on 100% of its average daily
equity maintained in its accounts with them during each month at the 13-week Treasury bill discount rate.



The commodities contracts are subject to periods of illiquidity because of market conditions, regulatory considerations and other reasons. For example, commodity exchanges limit fluctuations in certain commodity
futures contract prices during a single day by regulations referred to as daily limits. During a single day, no trades may be executed at prices beyond the daily limit. Once the price of a futures contract for a particular commodity has
increased or decreased by an amount equal to the daily limit, positions in the commodity can neither be taken nor liquidated unless traders are willing to effect trades at or within the limit. Commodity futures prices have occasionally moved the
daily limit for several consecutive days with little or no trading. Such market conditions could prevent Series E from promptly liquidating its commodity futures positions.





5



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Since Series Es business is to trade futures and forward contracts, its capital is at risk due to changes in the
value of these contracts (market risk) or the inability of counterparties to perform under the terms of the contracts (credit risk). Series Es exposure to market risk is influenced by a number of factors including the volatility of interest
rates and foreign currency exchange rates, the liquidity of the markets in which the contracts are traded and the relationships among the contracts held. The inherent uncertainty of Series Es speculative trading as well as the development of
drastic market occurrences could result in monthly losses considerably beyond Series Es experience to date and could ultimately lead to a loss of all or substantially all of investors capital. The Managing Owner attempts to minimize
these risks by requiring Series E and its trading advisor to abide by various trading limitations and policies which include limiting margin amounts, trading only in liquid markets and permitting the use of stop loss provisions. See Note F to the
financial statements for a further discussion on the credit and market risks associated with Series Es futures and forward contracts.



Series E does not have, nor does it expect to have, any capital assets.



Off-Balance Sheet Arrangements and Contractual Obligations



As of December 31, 2004, Series E had not utilized special purpose entities to facilitate off-balance sheet financing arrangements and has no loan guarantee arrangements
or off-balance sheet arrangements of any kind other than agreements entered into in the normal course of business, which may include indemnification provisions related to certain risks service providers, such as our accountants, undertake in
performing services which are in the best interests of Series E. While Series Es exposure under such indemnification provisions can not be estimated, these general business indemnifications are not expected to have material impact on Series
Es financial position.



Series Es contractual obligations are with
the Managing Owner, Trading Advisor and its commodity broker. Payments made under Series Es agreement with the Trading Advisor are at a fixed rate, calculated as a percentage of the Series Es New High Net Trading Profits. In
addition, management fee payments made to the Trading Advisor and fees paid to the Managing Owner are calculated as a fixed percentage of Series Es Net Asset Values. As such, the Managing Owner cannot anticipate the amount of payments that
will be required under these agreements for future periods as Net Asset Values are not known until a future date. Commission payments to the commodity broker are based on a cost per executed trade and, as such, the Managing Owner cannot anticipate
the amount of payments that will be required under the brokerage agreement for future periods as the level of executed trades are not known until a future date. These agreements are effective for one-year terms, renewable automatically for
additional one-year terms unless terminated. Additionally, these agreements may be terminated by either party for various reasons. For a further discussion on these payments, see Notes 1 & 3 of Series Es 2004 Annual Report.



Results of Operations



The net asset value per Interest as of December 31, 2004 was $184.94, an increase of 4.81% from the December 31, 2003 net asset value per
Interest of $176.45 which was an increase of 11.41% from the December 31, 2002 net asset value per Interest of $158.38. The CISDM Fund/Pool Qualified Universe Index (formerly known as the Zurich Fund/Pool Qualified Universe Index) returned 3.22% and
12.17% for the years ended December 31, 2004 and 2003, respectively. The CISDM Fund/Pool Qualified Universe Index is the dollar weighted, total return of all commodity pools tracked by Managed Account Reports, LLC. Past performance is not necessary
indicative of future results.



Series Es trading gains before commissions
and related fees for the years ended December 31, 2004, 2003 and 2002, were $6,188,000, $7,656,000 and $5,920,000, respectively. Due to the nature of Series Es trading activities, a period to period comparison of its trading results is not
meaningful. However, a detailed discussion of the trading results for the year ended December 31, 2004 is presented below.



Profits were the result of gains in the energies, grains, indices, interest rate and metals sectors. Net losses for Series E were experienced in the currencies and softs
sectors.



Currencies: Choppy market conditions were the dominant
attribute in global currencies in 2004. The U.S. dollar appreciated against foreign currencies in the beginning of the year on prospects of a strong and robust economic recovery in the U.S. The U.S. Federal Reserve began its campaign to keep the
U.S. economy from overheating by raising interest rates by 0.25% from its historic lows in June. By the end of the year, the U.S. Federal Reserve had increased the fed fund rates by 1.25%. Trading conditions were choppy and difficult in the middle
of the year as market participants anticipated the U.S. election. However, the re-emergence of trends towards year-end made for a friendlier trading environment and the U.S. dollar ended the fourth quarter on a weak note. The final 2004 tally saw
the U.S. dollar shed 8% of its value on a trade-weighted basis. While the Fund generated respectable profits in the sector in Q4, the Fund produced losses for the year.



6



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Energy: The energy sector finished 2004 on a negative note, as crude oil, heating oil, gasoline and natural gas
all experienced double digit declines late in the fourth quarter. A consistent pattern of above normal temperatures in key consuming areas discouraged demand. There were no significant production disruptions for natural gas. The market traded in its
usual volatile pattern and large traders were seen exiting the market at years end. In the petroleum sector, heating oil was also a victim of the weather as it lost 11% during the final month of the year. Supplies were more than ample with
refiners operating on all cylinders in the face of less than expected demand. Crude oil also fell around 11% late in the quarter, down from its highest levels on the year of over $55/barrel, despite ongoing unrest in Iraq and concerns about
the security of Saudi supplies. Despite above normal demand at year-end, unleaded gasoline futures dropped 12% late in the fourth quarter. The final 2004 tally for NYMEX crude oil within the Dow Jones Index showed a 55.4% gain. Heating oil was up
57.7%, gasoline 46.7% and natural gas rose 15.8%. The energy sector rallied to record levels in 2004 on supply level fears and geopolitical risk, before reversing dramatically in the middle of the fourth quarter. The Fund was able to capture profits
in both market environments.



Grains: The lack of strong demand from
developing countries led to sideways-to-lower pricing in the grain markets during the fourth quarter. The universally anticipated flow of raw commodities into the PRC was sharply curtailed during the fourth quarter of 2004, due in a large part, to a
tightening of Chinese credit. In addition, the December 10thUSDA Supply/Demand report showed that last years
ideal Northern Hemisphere growing conditions, had resulted in predicted increases in the 2004/05 ending stocks of all grains. Subsequently, the global season-ending balance sheet, which previously had been forecast as being somewhat
tight, in actuality, was more than adequate to meet rising consumption levels. The discovery of Asia Soybean Rust (ASR), for the first time ever in America, inferred an anticipatory shift of planted new crop acreage into competing crops
such as corn, wheat and cotton, and away from beans. This expectation of increased U.S. grain production, combined with the knowledge that Brazil, along with other countries of the world, would be increasing soybean acreage in the season ahead,
resulted in a collective malaise settling in over U.S. agricultural markets. Due to the weakness in the American currency, when viewed in non-dollar denominated terms, the grain markets are now at, or close to, historic all time lows. The Fund was
able to generate gains in three out of the four quarters and post a positive return on the year.



Indices: After a choppy first quarter the global equity markets advanced during the second quarter of the year only to see much of these gains vanish by the end of the third quarter. By year-end, however, most
markets had again turned higher. In Asia, the Nikkei suffered on fears of a slowdown in its economic recovery, but then rebounded with a particularly strong December. The Chinese government tightened credit to prevent its expanding economy from
overheating, which initially lead to a decline in the Hang Seng Index. However, with a soft economic landing emerging, the Hang Seng rallied and ended in modestly positive territory for year-end. In Europe, the Euro-Zone indices extended the pattern
of lagging behind Asia and the U.S. throughout the fourth quarter. For the year, the Dow advanced 3.2%, the Nasdaq 9.1%, and the S&P improved 10.9%. The Fund produced net gains in this difficult, choppy environment.



Interest rates: The fixed income market saw sharp reversals in the first quarter and
falling prices and increasing yields on expectations of economic growth and high inflation in the second quarter of the year. However, the third quarter saw a rally on news of inflation rates being within expectations and slowing economic growth.
The fourth quarter featured higher U.S. treasury yields; at year-end rates slipped to 4.23%. In Europe, the economic news from Germany was for the most part negative and the Bund market reflected this in the fourth quarter. The weak dollar tended to
weight on sentiment throughout Europe. Factory orders and retail activity fell in Germany at the end of the year. European economies as a group are displaying a lackluster pattern, which has served to keep yields down. In Japan, government bond
yields remain low with little indication of a change in pattern as 2004 ended. The Bank of Japan (BOJ) steadily pumped money into the economy throughout the fourth quarter in an effort to avoid deflation. In mid-December the BOJ said the economy
grew at a sluggish 0.2% annualized rate and a report on December 28 showed that Japanese industrial production had fallen 5.3% in November. The Fund was able to profitably take advantage of the tremendous activity this year on both the long and
short sides of the market.



Metals: Over the course of 2004 bullish
trends were witnessed throughout the base metals on increasing worldwide demand, especially from China. However, as the Chinese government tightened credit policy to prevent the economy from overheating, the trends stalled and prices moved lower on
the expectation of subdued demand from China. Ultimately, however, prices recovered as the market had overreacted and demand did not change very much overall. At year-end, aluminum rose in December, ending the year with double-digit gains.
Similarly, nickel and zinc also rallied. In the precious metals, gold benefited as the U.S. dollar sank through most of the third and fourth quarters. While metals lost ground in December, the sector nevertheless ended the year with gains.
Notwithstanding a massive springtime trend reversal caused by concerns over a hard landing in China, the metals markets rallied for much of the year, providing considerable profit opportunities for the Fund.



Softs: Cocoa gave back its gains for the year late in the fourth quarter. Lessened
concerns regarding the availability of Ivory Coast shipments helped fuel the decline. The market had rallied over a two-month period due to political and labor unrest in that nation, however, demand remained reasonably strong. Supply concerns lifted
coffee prices by about 6% late in the year with Brazil the main factor. Coffee saw strong demand all year and was a 37% winner over the 12-month period. Sugar, gained 44% on the year in which it benefited from a mediocre crop picture including lower
supplies from Brazil. Orange juice futures rallied due to the impact from the damaging hurricane season. 2004 was a solid year for the tropical commodities. Futures volumes were at record levels at the NYBOT. Despite pockets of opportunity in softs,
the sector proved to be a drag on the portfolio at year-end.



7



---

Interest income is earned on the average daily equity maintained with the broker at the 13-week Treasury bill discount
rate and, therefore, varies weekly according to interest rates, trading performance, contributions and redemptions. Interest income increased by $91,000 during 2004 as compared to 2003 and increased by $218,000 during 2003 as compared to the 2002
period. The increase in 2004 period versus 2003 period was primarily due to increasing interest rates offset by decrease in average asset levels. The increase in 2003 versus 2002 period was primarily due to increases in assets when offset by the
impact of declining interest rates. There were lower overall interest rates during 2003 versus 2002.



Commissions are calculated on Series Es net asset value at the end of each week and, therefore, vary according to weekly trading performance, contributions and redemptions. Other transaction fees consist of
National Futures Association, exchange and clearing fees as well as floor brokerage costs and give-up charges, which are based on the number of trades the trading advisor executes, as well as which exchange, clearing firm or bank on, or through,
which the contract is traded. Commissions and other transaction fees decreased by $87,000 in 2004 as compared in 2003 and increased by $1,839,000 during 2003 as compared to 2002. The increase in commissions for 2004 was due to positive fund
performance. The increase in commissions in 2003 versus 2002 was primarily due to an increase in asset levels from contributions.



All trading decisions for Series E are made by Graham Capital Management, L.P. (the Trading Advisor). Management fees are calculated on Series Es net
asset value at the end of each week and, therefore are affected by weekly trading performance, contributions and redemptions. Management fees decreased by $30,000 during 2004 versus 2003 and increased by $579,000 during 2003 as compared to 2002. The
decrease in management fees for 2004 was due to redemptions which were primarily offset by positive fund performance. The increase in management fees during 2003 versus 2002 was primarily due to an increase in asset levels from contributions.



Incentive fees are based on the New High Net Trading Profits
generated by the Trading Advisor as defined in the Advisory Agreement among Series E, the Managing Owner and the Trading Advisor. Incentive fees incurred during the years ended December 31, 2004, 2003 and 2002 were $1,200,000, $762,000 and $986,000,
respectively.



General and administrative expenses for the years ended December
31, 2004, 2003 and 2002 were $278,000, $153,000 and $152,000, respectively. The increase in general and administrative services for the ended December 31, 2004 was primarily due to increased costs associated with the acquisition of the funds which
are incurred by the funds. These expenses include accounting, audit, tax and legal fees as well as printing and postage costs related to reports sent to limited owners, and are before reimbursement of costs incurred by the Managing Owner on behalf
of Series E. To the extent that general and administrative expenses exceed 1.5% of Series Es net asset value during the year (with a maximum of 0.5% attributable to other charges and audit expenses) such amounts are borne by the Managing Owner
and its affiliates. Because applicable expenses exceeded these limits during 2002, a portion of these expenses were borne by the Managing Owner and its affiliates, resulting in a net cost to Series E of $116,000 for 2002.



Inflation



Inflation has had no material impact on operations or on the financial condition of Series E from inception through December 31, 2004.



8



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Item 7A. Quantitative and Qualitative Disclosures About Market Risk



Introduction



Past Results Not
Necessarily Indicative of Future Performance



The Registrant is a
speculative commodity pool. The market sensitive instruments held by it are acquired for speculative trading purposes, and substantially all of the Registrants assets are subject to the risk of trading loss. Unlike an operating company, the
risk of market sensitive instruments is integral, not incidental, to the Registrants main line of business.



Market movements result in frequent changes in the fair market value of the Registrants open positions and, consequently, in its earnings and cash flow. The
Registrants market risk is influenced by a wide variety of factors, including the level and volatility of interest rates, exchange rates, equity price levels, the market value of financial instruments and contracts, the diversification effects
among the Registrants open positions and the liquidity of the markets in which it trades.



The Registrant rapidly acquires and liquidates both long and short positions in a wide range of different markets. Consequently, it is not possible to predict how a particular futures market scenario will affect
performance, and the Registrants past performance is not necessarily indicative of its future results.



Value at Risk is a measure of the maximum amount which the Registrant could reasonably be expected to lose in a given market sector. However, the inherent uncertainty of the Registrants speculative trading and
the recurrence in the markets traded by the Registrant of market movements far exceeding expectations could result in actual trading or non-trading losses far beyond the indicated Value at Risk or the Registrants experience to date (i.e.,
risk of ruin). In light of the foregoing, as well as the risks and uncertainties intrinsic to all future projections, the quantification included in this section should not be considered to constitute any assurance or representation that
the Registrants losses in any market sector will be limited to Value at Risk or by the Registrants attempts to manage its market risk.



Standard of Materiality



Materiality as used in this section, Quantitative and Qualitative Disclosures About Market Risk, is based on an assessment of reasonably possible market
movements and the potential losses caused by such movements, taking into account the leverage, optionality and multiplier features of the Registrants market sensitive instruments.



Quantifying The Registrants Trading Value at Risk



Quantitative Forward-Looking Statements



The following quantitative disclosures regarding the Registrants market risk exposures contain forward-looking
statements within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934).



The Registrants risk exposure in
the various market sectors traded by the Trading Advisor is quantified below in terms of Value at Risk. Due to the Registrants mark-to-market accounting, any loss in the fair value of the Registrants open positions is directly reflected
in the Registrants earnings (realized or unrealized) and cash flow (at least in the case of exchange-traded contracts in which profits and losses on open positions are settled daily through variation margin).



Exchange maintenance margin requirements have been used by the Registrant as the measure of
its Value at Risk. Maintenance margin requirements are set by exchanges to equal or exceed the maximum losses reasonably expected to be incurred in the fair value of any given contract in 95%-99% of any one-day interval. The maintenance margin
levels are established by dealers and exchanges using historical price studies as well as an assessment of current market volatility (including the implied volatility of the options on a given futures contract) and economic fundamentals to provide a
probabilistic estimate of the maximum expected near-term one-day price fluctuation. Maintenance margin has been used rather than the more generally available initial margin, because initial margin includes a credit risk component which is not
relevant to Value at Risk.



In the case of market sensitive instruments which
are not exchange-traded (almost exclusively currencies in the case of the Registrant), the margin requirements for the equivalent futures positions have been used as Value at Risk. In those rare cases in which a futures-equivalent margin is not
available, dealers margins have been used.



In quantifying the
Registrants Value at Risk, 100% positive correlation in the different positions held in each market risk category has been assumed. Consequently, the margin requirements applicable to the open contracts have simply been aggregated to determine
each trading categorys aggregate Value at Risk. The diversification effects resulting from the fact that the Registrants positions are rarely, if ever, 100% positively correlated have not been reflected.



The Registrants Trading Value at Risk in Different Market Sectors



The following table presents the trading value at risk associated with the Registrants
open positions by market sector at December 31, 2004 and December 31, 2003. All open position trading risk exposures of Series E have been included in calculating the figure set forth below. At December 31, 2004 and December 31, 2003, the Registrant
had total capitalizations of approximately $42.3 million and $48.2 million, respectively.



|               |  |                   |           |                          |                   |   |               |   |                          |  |       |  
|-------------- |  | ----------------- | --------- | ------------------------ | ----------------- | - | ------------- | - | ------------------------ |  | ----- | -
|               |  | December 31, 2004 |           |                          | December 31, 2003 |  
|Market Sector  |  | Value atRisk      |           | % of TotalCapitalization |                   |   | Value at Risk |   | % of TotalCapitalization | 
|Interest rates |  | $                 | 1,473,847 |                          | 3.48              | % |               | $ | 838,271                  |  | 1.74  | %
|Currencies     |  |                   | 1,165,113 |                          | 2.75              | % |               |   | 1,981,229                |  | 4.11  | %
|Commodities    |  |                   | 1,204,975 |                          | 2.85              | % |               |   | 2,083,320                |  | 4.32  | %
|Stock indices  |  |                   | 3,288,678 |                          | 7.77              | % |               |   | 5,620,798                |  | 11.66 | %
|               |  |                   |           |                          |                   |   |               |   |                          |  |       |  
|Total          |  | $                 | 7,132,613 |                          | 16.86             | % |               | $ | 10,523,618               |  | 21.83 | %
|               |  |                   |           |                          |                   |   |               |   |                          |  |       |  



The following table presents the
average trading value at risk of the Registrants open positions by market sector for the year ended December 31, 2004 based on the Registrants total average capitalization of approximately $42.6 million.



|               |  |              |           |                                  |       |  
|-------------- |  | ------------ | --------- | -------------------------------- | ----- | -
|Market Sector  |  | Value atRisk |           | % of Average TotalCapitalization |      
|Interest rates |  | $            | 1,815,151 |                                  | 4.26  | %
|Currencies     |  |              | 1,118,336 |                                  | 2.62  | %
|Commodities    |  |              | 1,093,167 |                                  | 2.56  | %
|Stock indices  |  |              | 1,972,327 |                                  | 4.63  | %
|               |  |              |           |                                  |       |  
|Total          |  | $            | 5,998,982 |                                  | 14.07 | %
|               |  |              |           |                                  |       |  



9



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Material Limitations on Value at Risk as an Assessment of Market Risk



The notional value of the market sector instruments held by the Registrant is typically many
times the applicable maintenance margin requirement (maintenance margin requirements generally range between approximately 1% and 10% of the face value) as well as many times the total capitalization of the Registrant. The magnitude of the
Registrants open positions creates a risk of ruin not typically found in most other investment vehicles. Because of the size of its positions, certain market conditions, although unusual, but historically recurring from time to
time, could cause the Registrant to incur severe losses over a short period of time. The foregoing Value at Risk table, as well as the past performance of the Registrant give no indication of this risk of ruin.



Non-Trading Risk



The Registrant has non-trading market risk on its foreign cash balances not needed for margin. However, these balances (as well as any
market risk they represent) are immaterial.



Qualitative Disclosures
Regarding Primary Trading Risk Exposures



The following qualitative
disclosures regarding the Registrants market risk exposuresexcept for (i) those disclosures that are statements of historical fact and (ii) the descriptions of how the Registrant manages its primary market risk exposuresconstitute
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The Registrants primary market risk exposures as well as the strategies used and to be used by
the Managing Owner and the Trading Advisor for managing such exposures are subject to numerous uncertainties, contingencies and risks are one of which could cause the actual results of the Registrants risk controls to differ materially from
the objectives of such strategies. Government interventions, defaults and expropriations, illiquid markets the emergence of dominant fundamental factors, political upheavals, changes in historical price relationships, an influx of new market
participants, increased regulation and many other factors could result in material losses as well as in material changes to the risk exposures and the risk management strategies of the Registrant. There can be no assurance that the Registrants
current market exposure and/or risk management strategies will not change materially or that any such strategies will be effective in either the short- or long-term. Investors must be prepared to lose all or substantially all of their investment in
the Registrant.



The primary trading risk exposures of the Registrant at
December 31, 2004 and 2003, by market sector were:



Interest Rates:
Interest rate movements directly affect the price of sovereign bond positions held by the Registrant and indirectly affect the value of its stock index and currency positions. Interest rate movements in one country as well as relative interest rate
movements between countries may materially impact the Registrants profitability. The Registrants primary interest rate exposure is to interest rate fluctuations in the U.S. and other G-7 countries (including countries participating in
the Euro). To a lesser extent, the Registrant also takes positions in the government debt of smaller nations  e.g., Australia. The Managing Owner anticipates that G-7 interest rates will remain a primary market exposure of the Registrant in
the foreseeable future. The changes in interest rates which have the most effect on the Registrant are changes in long-term as opposed to short-term rates. Most of the speculative positions held by the Registrant are in medium to long-term
instruments. Consequently, even a material change in short-term rates would have little effect on the Registrant were the medium- to long-term rates to remain steady.



Currencies: The Registrants currency exposure is due to exchange rate fluctuations, primarily fluctuations which disrupt the
historical pricing relationships between different currencies and currency pairs. These fluctuations are influenced by interest rate changes as well as political and general economic conditions. The Registrants major exposure has typically
resulted from positions in the Euro and in local currencies of G-7 countries. These include outright, as well as, cross-rate positions  i.e., positions between two currencies other than the U.S. dollar. At December 31, 2004 and 2003, the
Registrant has significant exposure from positions in several G-7 currencies including the Japanese yen and the Euro. The Registrant also had significant exposure at December 31, 2004 to the Swiss franc, South African rand, New Zealand dollar and
the Mexican peso. The currency trading Value at Risk figure includes foreign margin amounts converted into U.S. dollars with an incremental adjustment to reflect the exchange rate risk inherent to the dollar-based Registrant in expressing value at
Risk in a functional currency other than U.S. dollars.



Commodities: The
Registrants primary commodities exposure, lies in the energy market and results from gas and oil price movements, often from political developments in the Middle East. The Registrants major energy exposure at year-end results from
positions in light crude and natural gas. In the agricultural sector, the Registrants market risk exposure is primarily due to price movements resulting from severe or unexpected weather conditions. The Trading Advisor trades in various
agricultural commodities including coffee, soybean meal, lean hogs and sugar. In the metals sector, the Registrants risk exposure is a result of price movements due to perceptions of global growth and economic strength. The Registrants
major metals exposure at year end results from positions in aluminum, copper, zinc and gold.



Stock Indices: The Registrants primary equity exposure was due to equity price risk in the Nikkei Dow (Japan) Index, NASDAQ 100 Index, S&P 500 and the European DAX Index. The stock index futures
traded by the Registrant are currently limited to futures on broadly based indices.



10



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Qualitative Disclosures Regarding Means of Managing Risk Exposure



The means by which the Managing Owner and the Trading Advisor, severally, attempt to manage
the risk of the Registrants open positions is essentially the same in all market categories traded.



The Trading Advisor attempts to minimize market risk exposure by applying its own risk management trading policies which include the diversification of trading assets into various market sectors. Additionally, the
Trading Advisor has an oversight committee broadly responsible for evaluating and overseeing the Trading Advisors trading policies. The oversight committee meets periodically to discuss and analyze issues such as liquidity, position size,
capacity, performance cycles, and new product and market strategies.



The
Managing Owner attempts to minimize market risk exposure by requiring the Trading Advisor to abide by various trading limitations and policies. The Managing Owner monitors compliance with these trading limitations and policies which include, but are
not limited to, limiting the amount of margin or premium required for any one commodity or all commodities combined and generally limiting transactions to contracts which are traded in sufficient volume to permit the taking and liquidating of
positions. Additionally, the Managing Owner shall automatically terminate the Trading Advisor if the net asset value of the Registrant declines by 40% during any year or since the commencement of trading activities. Furthermore, the Trust Agreement
provides that the Registrant will liquidate its positions, and eventually dissolve, if the Registrant experiences a decline in the net asset value of 50% in any year or since the commencement of trading activities. In each case, the decline in net
asset value is after giving effect for distributions, contributions and redemptions. The Managing Owner may impose additional restrictions (through modifications of such trading limitations and policies) upon the trading activities of the Trading
Advisor as it, in good faith, deems to be in the best interest of the Registrant.



Qualitative Disclosures Regarding Non-Trading Risk Exposure



At December 31, 2004, the Registrants primary exposure to non-trading market risk resulted from foreign currency balances held in the Euro, British pound, Australian dollar, Japanese yen, Swiss franc and Hong Kong dollar. As discussed
above, these balances, as well as any risk they represent, are immaterial.



Item 8. Financial Statements and Supplementary Data



The financial statements are incorporated by reference to pages 3 through 6 of the Registrants 2004 Annual Report which is filed as an exhibit hereto.



Selected unaudited quarterly financial data for the years ended December 31, 2004 and 2003 are summarized below:



|                                                                                |  |                                                     |           |                                                   |   |            |                                                        |  |   |                                                           |   |  |   |          
|------------------------------------------------------------------------------- |  | --------------------------------------------------- | --------- | ------------------------------------------------- | - | ---------- | ------------------------------------------------------ |  | - | --------------------------------------------------------- | - |  | - | ---------
|                                                                                |  | For the periodfrom January 1,2004 to March 26, 2004 |           | For the periodfrom March 27,2004 to June 25, 2004 |   |            | For the periodfrom June 26, 2004 toSeptember 24, 2004  |  |   | For the periodfrom September 25,2004 to December 31, 2004
|Total revenues (including interest)                                             |  | $                                                   | 6,657,498 |                                                   | $ | (8,021,038 | )                                                      |  | $ | 104,753                                                   |   |  | $ | 7,999,496
|                                                                                |  |                                                     |           |                                                   |   |            |                                                        |  |   |                                                           |   |  |   |          
|Total revenues (including interest) less commissions and other transaction fees |  | $                                                   | 5,892,912 |                                                   | $ | (8,706,994 | )                                                      |  | $ | (472,499                                                  | ) |  | $ | 7,292,986
|                                                                                |  |                                                     |           |                                                   |   |            |                                                        |  |   |                                                           |   |  |   |          
|Net income (loss)                                                               |  | $                                                   | 4,400,348 |                                                   | $ | (8,986,963 | )                                                      |  | $ | (696,305                                                  | ) |  | $ | 6,940,283
|                                                                                |  |                                                     |           |                                                   |   |            |                                                        |  |   |                                                           |   |  |   |          
|Net income (loss) per weighted average Interest                                 |  | $                                                   | 16.31     |                                                   | $ | (34.94     | )                                                      |  | $ | (2.87                                                     | ) |  | $ | 29.83    
|                                                                                |  |                                                     |           |                                                   |   |            |                                                        |  |   |                                                           |   |  |   |          
|                                                                                |  |                                                     |           |                                                  
|                                                                                |  | For the periodfrom January 1,2003 to March 28, 2003 |           | For the periodfrom March 29,2003 to June 27, 2003 |   |            | For the periodfrom June 28, 2003 to September 16, 2003 |  |   | For the periodfrom September 27,2003 to December 31, 2003
|Total revenues (including interest)                                             |  | $                                                   | 2,086,184 |                                                   | $ | 1,424,036  |                                                        |  | $ | (3,091,865                                                | ) |  | $ | 7,700,329
|                                                                                |  |                                                     |           |                                                   |   |            |                                                        |  |   |                                                           |   |  |   |          
|Total revenues (including interest) less commissions and other transaction fees |  | $                                                   | 1,572,625 |                                                   | $ | 658,742    |                                                        |  | $ | (3,851,090                                                | ) |  | $ | 6,917,266
|                                                                                |  |                                                     |           |                                                   |   |            |                                                        |  |   |                                                           |   |  |   |          
|Net income (loss)                                                               |  | $                                                   | 1,172,079 |                                                   | $ | 326,448    |                                                        |  | $ | (4,138,348                                                | ) |  | $ | 6,131,115
|                                                                                |  |                                                     |           |                                                   |   |            |                                                        |  |   |                                                           |   |  |   |          
|Net income (loss) per weighted average Interest                                 |  | $                                                   | 6.14      |                                                   | $ | 1.20       |                                                        |  | $ | (14.55                                                    | ) |  | $ | 22.01    
|                                                                                |  |                                                     |           |                                                   |   |            |                                                        |  |   |                                                           |   |  |   |          



11



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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure



On October 1, 2004 and contemporaneously with the change of control of the Registrant, the new Managing Owner of the Registrant, Preferred Investment Solutions Corp., a
Connecticut corporation (the Managing Owner or Preferred Investment), arranged for the Registrant to engage Arthur F. Bell, Jr. & Associates, L.L.C. as the Registrants independent registered public accounting firm,
and dismissed PricewaterhouseCoopers LLP (the Former Accountant). The Former Accountants term as the Registrants independent registered public accounting firm ceased upon completion of procedures regarding the
Registrants unaudited interim financial statements as of September 30, 2004 and for the three- and nine-month periods then ended.



The Former Accountants report on the Registrants financial statements as of and for the two most recent fiscal years ended December 31, 2003 and 2002 did not
contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope, or accounting principle. Furthermore, during the Registrants fiscal years ended December 31, 2003 and 2002 and through
October 1, 2004, the Managing Owner is not aware of any disagreements between the Registrant and the Former Accountant on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which
disagreements(s), if not resolved to the satisfaction of the Former Accountant, would have caused it to make a reference thereto in their reports on the financial statements of the Registrant for such years. During the fiscal years ended December
31, 2003 and 2002 and through October 1, 2004, there were no reportable events (as defined in Regulation S-K Item 304(a)(1)(v)).



Item 9A. Controls and Procedures



As of the end
of the period covered by this report, the Managing Owner carried out an evaluation, under the supervision and with the participation of the officers of the Managing Owner, including the Managing Owners chief executive officer and chief
financial officer, of the effectiveness of the design and operation of the Registrants disclosure controls and procedures. Based upon that evaluation, the Managing Owners chief executive officer and chief financial officer concluded that
the Registrants disclosure controls and procedures are effective.



There
have not been any changes in our internal controls over financial reporting (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) during the fiscal quarter to which this report relates that have
materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.



Item 9B. Other Information



None



Item 10. Directors and Executive Officers of the Registrant



There are no officers of the Registrant. The Registrant is managed by the Managing Owner.



The Managing Owners officers and any persons holding more than 10% of the Registrants Units (Ten Percent Owners) are required to report their
initial ownership of such Interests and any subsequent changes in that ownership to the Securities and Exchange Commission on Forms 3, 4 or 5. Such officers, directors and Ten Percent Owners are required by the Securities and Exchange Commission
regulations to furnish the Registrant with copies of all Forms 3, 4 and 5 they file. All of these filing requirements were satisfied on a timely basis. In making these disclosures, the Registrant has relied solely on written representations of the
Managing Owners officers and Ten Percent Owners or copies of the reports that they have filed with the Securities and Exchange Commission during and with respect to its most recent fiscal year.



The key officers of the Managing Owner and their positions with respect to the Registrant are
as follows:



Mr. Kenneth A. Shewer (born 1953), has been a principal,
associated person and NFA associate member of the Managing Owner since February 8, 1984, May 1, 1985 and August 1, 1985, respectively, He has been Chairman of the Managing Owner since February 1984. Mr. Shewer was employed by Pasternak, Baum &
Co., Inc. (Pasternak, Baum) an international cash commodity firm, from June 1975 until September 1983. Mr. Shewer created and managed Pasternak, Baums Grain Logistics and Administration Department and created its Domestic Corn and
Soybean Trading Department. In 1982, Mr. Shewer became co-manager of Pasternak, Baums F.O.B. Corn Department. In 1983, Mr. Shewer was made Vice President and Director of Pasternak, Baum. Mr. Shewer graduated from Syracuse University with a
B.S. degree in 1975.



Mr. Marc S. Goodman (born 1948), has been a
principal, associated person and NFA associate member of the Managing Owner since February 7, 1984, May 1, 1985 and August 1, 1985, respectively. He has been President of the Managing Owner since February 1984. Mr. Goodman joined Pasternak, Baum in
September 1974 and was Vice President and Director from July 1981 until September 1983. While at Pasternak, Baum, Mr. Goodman was largely responsible for business development outside of the United States, for investment of its corporate retirement
funds, and for selecting trading personnel. Mr. Goodman has conducted extensive business in South America, Europe and the Far East. Mr. Goodman graduated from the Bernard M. Baruch School of Business of the City University of New York with a B.B.A.
in 1969 and an M.B.A. in 1971 in Finance and Investments, where he was awarded an Economics and Finance Department Fellowship from September 1969 through June 1971.



Messrs. Shewer and Goodman left Pasternak, Baum in September 1983 to form Kenmar Advisory Corp. (now known as Preferred Investment Solutions
Corp., the Managing Owner) and they have occupied their present positions with the Managing Owner since that time.



12



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Ms. Esther Eckerling Goodman (born 1952), has been a principal, associated person and NFA associate member of the
Managing Owner since May 12, 1988, July 17, 1986 and July 17, 1986, respectively. She has been Chief Operating Officer and Senior Executive Vice President of the Managing Owner since joining the Managing Owner in July 1986. Ms. Goodman had been
involved in the futures industry since 1974. From 1974 through 1976, she was employed by Conti-Commodity Services, Inc. and ACLI Commodity Services, Inc., in the areas of hedging, speculative trading and tax arbitrage. In 1976, Ms. Goodman joined
Loeb Rhoades & Company, Inc. where she was responsible for developing and managing a managed futures program which, in 1979, became the trading system for Westchester Commodity Management, an independent commodity trading advisor of which Ms.
Goodman was a founder and principal. From 1983 through mid-1986, Ms. Goodman was employed as a marketing executive at Commodities Corp. (USA) of Princeton, New Jersey. Ms. Goodman was a Director of the Managed Futures Trade Association from 1987 to
1991 and a Director of its successor organization, the Managed Futures Association, from 1991 to 1995 (now the Managed Funds Association). Ms. Goodman graduated from Stanford University with a B.A. degree in 1974.



Esther E. Goodman is married to Marc S. Goodman.



Mr. Braxton Glasgow III (born 1953), has been a principal, associated person, branch
manager and NFA associated person of the Managing Owner since June 21, 2001, June 21, 2001, July 13, 2004 and June 8, 2001, respectively. Mr. Glasgow has been an Executive Vice President of the Managing Owner since joining the Managing Owner in May
2001. Mr. Glasgow is responsible for business development. Previously, he served as Executive Vice President, Director of Client Services and a Principal at Chesapeake Capital Corp., a commodity trading firm, and as Senior Managing Director at
Signet Investment Banking Co. Mr. Glasgow began his career at PricewaterhouseCoopers, where he specialized in mergers and acquisitions and private equity, including extensive work in Europe and the Far East. From 1994 to 1995, he was President of
the Jay Group Ltd. Mr. Glasgow received a B.S. degree in accounting from the University of North Carolina in 1975 and is a Certified Public Accountant.



Mr. Mark J. Oppenheimer (born 1957), has been a principal of the Managing Owner since February 16, 2005. He also serves as Executive Vice President of Kenmar
Global Investment Management, Inc. Mr. Oppenheimer served as President and Chief Executive Officer of Crystallex International Corporation (AMEX: KRY) from February 1995 to September 2003 and served as its Vice Chairman from September 2003 to May
2004. He is currently a member of the Crystallex board of directors. From December 2002 to October 2003, Mr. Oppenheimer served as a director of IDT and currently serves as a Director for its telecom/VOIP unit Net2Phone. From 1991 to 1994, he served
as Executive Vice President and Chief Financial Officer of Concord Camera Corp. (NASDAQ: LENS), a multi-national, publicly traded company. From 1990 to 1991 he served as Director for International Trade and Merchant Banking at Midlantic National
Bank and from 1980 to 1985, Mr. Oppenheimer served as a lending officer in the International Commodity Financing Division of Chase Manhattan Bank, in the capacity of Assistant Treasurer and Second Vice President. Mr. Oppenheimer graduated with a BS
with Honors in Management and Industrial Relations from New York University College of Business and Public Administration and an MBA with Honors in Finance from New York Universitys Graduate School of Business Administration.



Ms. Maureen D. Howley (born 1967), has been a principal of the Managing Owner since
August 11, 2003. She has been a Senior Vice President and Chief Financial Officer of the Managing Owner since joining the Managing Owner in July 2003. She is responsible for corporate finance and administration. From July 2001 until July 2003, Ms.
Howley was an Associate at Andor Capital Management, LLC, an equity hedge fund company. At Andor, she was responsible for managing the corporate accounting functions. Previously, she was the Controller at John W. Henry & Company, Inc., a
commodity trading advisor (JWH), where she held positions of increasing responsibility from September 1996 to July 2001. She began her carrer at Deloitte & Touche where she specialized in the financial services industry. She held
many positions of increasing responsibility for seven years, and left as an Audit Senior Manager in September 1996 to join JWH. Ms. Howley received a B.A. in Accounting from Muhlenberg College in 1989 and designation as a Certified Public Accountant
in 1990.



Mr. Lawrence S. Block (born 1967) has been a Senior Vice
President and General Counsel of the Managing Owner since joining the Managing Owner in March 2005. Prior to joining the Managing Owner, Mr. Block was a Managing Director and General Counsel of Lipper & Company, L.P., a New York-based investment
management firm, from January 1998 until March 2005. Prior to joining Lipper & Company, Mr. Block was a senior associate at the law firm Cadwalader, Wickersham & Taft in New York from May 1996 through December 1997. Mr. Block also worked as
an associate at the law firm Proskauer Rose Goetz & Mendelsohn from September 1992 through May 1996. Mr. Block received a B.S. in Business Administration with a concentration in Accounting from the University of North Carolina at Chapel Hill in
1989 and a J.D. from the University of Pennsylvania School of Law in 1992. Mr. Blocks registration as a principal of the Managing Owner has been effective since March 17, 2005. His registration as an Associated Person of the Managing Owner is
pending with the National Futures Association.



Ms. Joanne D. Rosenthal
(born 1965), has been a principal, associated person and NFA associate member of the Managing Owner since February 29, 2000, February 29, 2000 and November 30, 1999, respectively. Ms. Rosenthal has been Senior Vice President and Director of Research
of the Managing Owner since joining the Managing Owner in October 1999. Prior to joining the Managing Owner, Ms. Rosenthal spent nine years at The Chase Manhattan Bank, in various positions of increasing responsibility. From July 1991 through April
1994, she managed the Trade Execution Desk and from May 1994 through September 1999, she was a Vice President and Senior Portfolio Manager of Chase Alternative Asset Management, Inc. Ms. Rosenthal received a Master of Business Administration with a
concentration in Finance from Cornell University and a Bachelor of Arts in Economics from Concordia University in Montreal, Canada.



13



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Mr. Richard Horwitz (born 1953),Senior Vice President and Director of Risk Management and Performance
Analytics, joined the Managing Owner in 2002. In that role, he has been developing proprietary risk transparency/risk management systems and collaborates on manager due diligence and analytics. Previously, Mr. Horwitz was a Principal at Capital
Market Risk Advisors, Inc., a preeminent risk management consulting firm. For the prior eight years, he was a Senior Research Analyst and Principal at Sanford C. Bernstein & Co., Inc. During the previous six years, he was a Senior Associate at
Booz Allen & Hamilton, Inc. where he focused on the financial services industries. Mr. Horwitz received an undergraduate degree in Electrical Engineering from MIT and a M.B.A. from the Sloan School of Management at MIT.



Mr. Peter J. Fell (born 1960), Senior Vice President, Director of Due Diligence
since joining the Managing Owner in September 2004. He is responsible for manager selection and due diligence. Mr. Fell is a member of the Investment Committee. From 2000 through August 2004, Mr. Fell was a founding partner and Investment Director
of Starview Capital Management. Prior to co-founding Starview Capital Management, Mr. Fell was Vice President of Research and Product Development at Merrill Lynch Investment Partners Inc. (MLIP). He was responsible for the investment evaluation and
recommendation process pertaining to MLIP funds and sat on MLIPs Investment Committee. Prior to joining MLIP, Mr. Fell had been with Deutsche Bank Financial Products Corporation for six years starting in 1989, where he was Vice President in
the over-the-counter fixed income derivatives area. From 1985 to 1989, he was employed by Manufacturers Hanover Trust Company, ultimately holding the position of Assistant Vice President in the Swaps and Futures Group. Mr. Fell holds an A.B. cum
laude in Music Theory and History and a M.B.A. in Finance from Columbia University.



Ms. Melissa Cohn (born 1960), Vice President and Senior Research Analyst, joined the Managing Owner in 1988. Her responsibilities include manager due diligence, manager analysis, and portfolio/risk management. Ms. Cohn has been
involved in the futures industry for over 20 years. Prior to joining the Managing Owner, she spent six years in positions of increasing responsibility in the Commodities Division at Shearson Lehman Hutton Inc. Her experience includes that of Sales
Assistant, Assistant Commodity Trader and Trader executing orders from numerous CTAs that traded through Shearson. Ms. Cohn graduated from the University of Wisconsin Madison with a B.S. in Agriculture in 1982.



Mr. James Dodd (born 1951), has been a principal, associated person and NFA associate
member of the Managing Owner since February 26, 2002, February 26, 2002 and January 2002, respectively. He has been a Managing Director of the Managing Owner since joining the Managing Owner in January 2002. He is responsible for structuring and
marketing investment products to financial institutions and to retail investors via the brokerage and financial consultant channels. Earlier in his career, Mr. Dodd was a senior marketing officer of the Capital Markets Group of Continental Bank in
Chicago; President of Signet Investment Banking in Richmond, Virginia; and Managing Director of Financial Institutions Marketing at Chesapeake Capital, a large Richmond-based CTA. Mr. Dodd received an AB degree from Cornell University in 1974 and a
M.B.A. degree from the University of Chicago in 1983.



Ms. Florence Y.
Sofer (born 1966), has been a principal of the Managing Owner since February 28, 2002. She has been Vice President, Investor Relations/Communications of the Managing Owner since joining the Managing Owner in November 2001. Form 1997 to 2001, Ms.
Sofer was the Vice President, Marketing, and a Principal of JWH, where she was responsible for strategic marketing and client communications for the firm and its subsidiaries. From 1994 to 1997, Ms. Sofer was the Marketing Manager at Global Asset
Management (GAM) where she was involved in the successful development and launch of the firms mutual fund product line. Ms. Sofer received a B.A. degree from American University in 1988 and a M.B.A. in Marketing from George
Washington University in 1992.



Audit Committee Financial Expert



The Registrant itself does not have any employees. Preferred
Investment Solutions Corp. acts as Managing Owner of the Registrant. The Board of Directors of Preferred Investment Solutions Corp. has delegated audit committee responsibilities to the Internal Controls and Disclosure Committee. Maureen Howley, as
the Chief Financial Officer of Preferred Investment Solutions Corp. and as a member of the Internal Controls and Disclosure Committee, serves as the audit committee financial expert for Preferred Investment Solutions Corp. Ms. Howley is
not a member of the Board of Directors and she is not independent of management.



Code of Ethics



Preferred Investment Solutions Corp.
has adopted a code of ethics for its chief executive officer, chief financial officer, accounting managers and persons performing similar functions. A copy of the code of ethics may be obtained at no charge by written request to Preferred
Investment, 51 Weaver Street, Building 1 South, 2ndFloor, Greenwich, Connecticut 06831 or by calling (203)
861-1000.



Item 11. Executive Compensation



The Registrant
does not pay or accrue any fees, salaries or any other form of compensation to officers of the Managing Owner for their services. (See also Item 13, Certain Relationships and Related Transactions, for information regarding compensation to the
Managing Owner.)



14



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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Interest Holder Matters



As of March 18, 2005, all of Preferred Investment Solutions Corp. stock is owned indirectly and equally by Messrs. Goodman and Shewer, Preferreds sole directors.



As of March 18, 2005, no officer of the Managing Owner owns directly or
beneficially any of the interests issued by the Registrant.



As of March 18,
2005, no partner beneficially owns more than five percent (5%) of the outstanding limited partnership interests issued by the Registrant.



As of March 18, 2005, Preferred maintains a 1% Managing Owner Interest in the Registrant.



Item 13. Certain Relationships and Related Transactions



The Registrant has and will continue to have certain relationships with the Managing Owner and its affiliates. However, there have been no direct financial transactions between the Registrant and the officers of the Managing Owner.



Reference is made to Notes 1, 3 and 4 to the financial statements in the
Registrants 2004 Annual Report which is filed as an exhibit hereto, which identify the related parties and discuss the services provided by these parties and the amounts paid or payable, if any, for their services.



Item 14. Principal Accounting Fees and Services



Audit Fees and All Other Fees



Audit Fees



Fees for audit services totaled approximately $28,000 in 2004 and approximately $30,000
in 2003, including fees associated with the annual audit and the reviews of the Registrants quarterly reports on Form 10-Q.



Tax



Fees for tax services, including tax compliance and tax advice totaled approximately $6,500 in 2004 and $21,000 in 2003.



We have been advised by Arthur F. Bell, Jr. & Associates, L.L.C. that neither the firm, nor any member of the firm, has any financial interest, direct or indirect, in
any capacity in the Registrant or its affiliates.



PART IV



|            |  |                                                                                                                                                                                         |  |                          
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------
|            |  |                                                                                                                                                                                         |  | Annual Report Page Number
|Item 15.    |  | Exhibits, Financial Statement Schedules, and Reports on Form 8-K                                                                                                                        |  |                          
|            |  |                                                                                                                                                                                        
|(a)      1. |  | Financial Statements and Report of Independent Registered Public Accounting Firm  incorporated by reference to the Registrants
2004 Annual Report which is filed as an exhibit hereto |  |                          
|            |  |                                                                                                                                                                                        
|            |  | Report of Independent Registered Public Accounting Firm  Arthur F. Bell, Jr. & Associates, L.L.C.                                                                                      |  | 1                        
|            |  |                                                                                                                                                                                        
|            |  | Report of Independent Registered Public Accounting Firm  PricewaterhouseCoopers LLP                                                                                                    |  | 2                        
|            |  |                                                                                                                                                                                        
|            |  | Financial Statements:                                                                                                                                                                   |  |                          
|            |  |                                                                                                                                                                                        
|            |  | Statements of Financial Condition  December 31, 2004 and 2003                                                                                                                          |  | 3                        
|            |  |                                                                                                                                                                                        
|            |  | Condensed Schedules of Investments  At December 31, 2004 and 2003                                                                                                                      |  | 4                        
|            |  |                                                                                                                                                                                        
|            |  | Statements of Operations  Years ended December 31, 2004, 2003 and 2002                                                                                                                 |  | 5                        
|            |  |                                                                                                                                                                                        
|            |  | Statements of Changes in Trust Capital  Three years ended December 31, 2004                                                                                                            |  | 6                        
|            |  |                                                                                                                                                                                        
|            |  | Notes to Financial Statements                                                                                                                                                           |  | 7  17                   



15



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| | 2. | Financial Statement Schedules
| | -- | -----------------------------



All schedules have been omitted because they are not applicable or the required information is included in the financial statements or the notes thereto



| | 3. | Exhibits
| | -- | --------



|     |  |                                                                                                                                                                                                                                                                                                                                          
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a)  |  | Description:                                                                                                                                                                                                                                                                                                                             
|4.1  |  | Third Amended and Restated Declaration of Trust Agreement of World Monitor Trust II dated as of October 1, 2004 (filed herewith)                                                                                                                                                                                                         
|     | 
|4.2  |  | Form of Request for Redemption (incorporated by reference to Exhibit 4.2 to Post-Effective Amendment No. 4 to the Registrants Registration Statement on Form S-1, File No. 333-83015,
filed on April 2, 2002)                                                                                                                           
|     | 
|4.3  |  | Form of Exchange Request (incorporated by reference to Exhibit 4.3 to Post-Effective Amendment No. 4 to the Registrants Registration Statement on Form S-1, File No. 333-83015, filed on
April 2, 2002)                                                                                                                                 
|     | 
|4.4  |  | Form of Subscription Agreement (incorporated by reference to Exhibit 4.4 to Post-Effective Amendment No. 4 to the Registrants Registration Statement on Form S-1, File No. 333-83015,
filed on April 2, 2002)                                                                                                                           
|     | 
|10.1 |  | Form of Escrow Agreement among the Trust, Managing Owner, PSI and the Chase Manhattan Bank (incorporated by reference to Exhibit 10.1 to the Registrants Registration Statement on Form
S-1, File No. 333-83015, filed on September 17, 1999)                                                                                           
|     | 
|10.2 |  | Form of Brokerage Agreement among the Trust and PSI (incorporated by reference to Exhibit 10.2 to the Registrants Statement on Form S-1, File No. 333-83015, filed on September 17,
1999)                                                                                                                                               
|     | 
|10.3 |  | Form of Advisory Agreement among the Registrant, Managing Owner, and the Trading Advisor (incorporated by reference to Exhibit 10.3 to the Registrants Registration Statement on Form
S-1, File No. 333-83015, filed on July 16, 1999)                                                                                                  
|     | 
|10.4 |  | Form of Representation Agreement Concerning the Registration Statement and the Prospectus among the Registrant, Managing Owner, PSI, Wilmington Trust Company and the Trading Advisor
(incorporated by reference to Exhibit 10.4 to the Registrants Registration Statement on Form S-1, File No. 333-83015, filed on September 17, 1999)
|     | 
|10.5 |  | Form of Net Worth Agreement between the Managing Owner and Prudential Securities Group, Inc. (incorporated by reference to Exhibit 10.5 to the Registrants Registration Statement on Form
S-1, File No. 333-83015, filed on September 17, 1999)                                                                                         
|     | 
|10.6 |  | Service Agreement among the Registrant, Prudential Securities Futures Management Inc. and Wachovia Securities, LLC dated as of July 1, 2003 (incorporated by reference to Exhibit 10.6 of the
Registrants Annual Report on Form 10-K for the year ended December 31, 2003)                                                              
|     | 
|10.7 |  | Novation letter among the Trust, Trading Advisor and Managing Owner dated September 14, 2004 (filed herewith)                                                                                                                                                                                                                            
|     | 
|10.8 |  | Letter Agreement Amending and Restating Brokerage Agreements between the Managing Owner and Prudential Financial Derivatives, LLC dated October 1, 2004 (filed herewith)                                                                                                                                                                 
|     | 
|13.1 |  | Registrants 2004 Annual Report (with the exception of the information and data incorporated by reference in Items 5, 7 and 8 of this Annual Report on Form 10-K, no other information or
data appearing in the Registrants 2004 Annual Report is to be deemed filed as part of this report) (filed herewith)                           
|     | 
|31.1 |  | Certification pursuant to Exchange Act Rules 13a-14 and 15d-14 (filed herewith)                                                                                                                                                                                                                                                          
|     | 
|31.2 |  | Certification pursuant to Exchange Act Rules 13a-14 and 15d-14 (filed herewith)                                                                                                                                                                                                                                                          
|     | 
|32.1 |  | Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the SARBANES-OXLEY Act of 2002 (furnished herewith)                                                                                                                                                                                               
|     | 
|32.2 |  | Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the SARBANES-OXLEY Act of 2002 (furnished herewith)                                                                                                                                                                                               



|(b) | Reports on Form 8-K  None
|--- | --------------------------



16



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SIGNATURES



Pursuant to the requirements of
Section 13 or 15(d) of the Securities Exchange Act of 1934 the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



|    |  |                                     
|--- |  | ------------------------------------
|    |  | WORLD MONITOR TRUST II  SERIES E   
|    | 
|By: |  | Preferred Investment Solutions Corp.
|    |  | Managing Owner                      



|    |  |                                                 |  |                     
|--- |  | ----------------------------------------------- |  | --------------------
|By: |  | /s/ Maureen D. Howley                           |  | Date: March 30, 2005
|    |  | Maureen D. Howley                               |  |                     
|    |  | Chief Financial Officer & Senior Vice President |  |                     



Pursuant to the requirements of the
Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant in the capacities indicated on March 30, 2005.



|    |  |                                                     
|--- |  | ----------------------------------------------------
|    |  | WORLD MONITOR TRUST II  SERIES E                   
|    | 
|By: |  | Preferred Investment Solutions Corp., Managing Owner
|    |  | Managing Owner                                      



|    |  |                                                            |  |                     
|--- |  | ---------------------------------------------------------- |  | --------------------
|By: |  | /s/ Kenneth A. Shewer                                      |  | Date: March 30, 2005
|    |  | Kenneth A. Shewer                                          |  |                     
|    |  | Chairman and Director                                      |  |                     
|    |  | (Principal Executive Officer)                              |  |                     
|    |  |                                                           
|By: |  | /s/ Maureen D. Howley                                      |  | Date: March 30, 2005
|    |  | Maureen D. Howley                                          |  |                     
|    |  | Senior Vice President and Chief Financial Officer          |  |                     
|    |  | (Principal Financial and Accounting Officer for the Trust) |  |                     



17



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OTHER INFORMATION



The actual round-turn equivalent of brokerage commissions paid per contract for the year ended December 31, 2004 was $87.92.



Series Es Annual Report on Form 10-K as filed with the Securities and Exchange
Commission is available to limited owners without charge upon written request to:



World Monitor Trust II  Series E

c/o Preferred Investment Solutions Corp

51 Weaver Street

Building 1 South,
2ndFloor

Greenwich, CT 06831



18