Forum Hard Assets Fund, Ltd. Monthly Letter Oct 2009

Forum Hard Assets Fund, Ltd. www.forumhedge.com

OCTOBER 2009 RETURN: +4.24% (e) / YTD: -2.58% (net of all fees) PERFORMANCE RESULTS

Jan -0.04% 1.64%

2009 2008 2007

Feb Mar Apr 0.27% -10.29% 1.28% 1.27% 1.77% 1.03%

May 0.98% 0.54% 2.25%

Jun 0.46% 0.30% 1.48%

Jul 0.76% 1.47% 4.95%

Aug 0.24% 1.37% 4.70%

Sep 0.16% 0.98% 1.79%

Oct Nov 4.24% (e) 0.19% 0.35% 1.56% 0.74%

Dec -1.98% 1.61%

YTD -2.58% 9.24% 20.65%

PERFORMANCE STATISTICS

Return 2009 YTD Annualized Return: Average Monthly Performance: Monthly Standard Deviation: Annualized Standard Deviation:

-2.58% 10.52% 0.95% 2.485% 8.61%

Sharpe Ratio: Largest Drawdown: 2nd Largest Drawdown: Max Loss Months: Percentage Profitable Months:

1.320 -10.29% -2.02% 2 90.00%

MARKET COMMENTARY

Despite a recent downward correction, world grain prices mostly registered sizeable net gains in October. US market fundamentals had some impact, especially earlier in the month when there was still nervousness about the unusually late maize and soyabean harvests, but external factors also played a major part. These included a marked dip in the value of the US dollar and a renewed spate of heavy speculative activity in commodity markets. Recent fund selling coincided with reduced crop concerns as harvesting gathered pace. Wheat export prices rose by between $10 and $25 over the month, with US Soft Red Winter wheat values in particular registering big gains due to planting hold-ups caused by the late soyabean harvest. Adverse Midwest weather triggered a surge in US maize futures, with a falling US dollar and higher crude oil prices adding to the upward momentum and attracting more fund buying. A subsequent heavy liquidation of positions by speculative funds was triggered by an improved harvest outlook and a slowing of export sales in favor of South American suppliers, with Argentina's exporters registering nearly 1.4m. tons of newly allocated licenses. Russian wheat (being the cheapest among the competitors) had the potential to gain in price but a lack of buyers at the price level created by external factors did not allow for an increased pace of business. In these circumstances the Forum Russia team was concentrating on execution of its existing contracts. High volatility of the prices gave us a chance to make greater profit during the course of the season.

PERFORMANCE SUMMARY

PORTFOLIO COMPOSITION

Performance of FHAF vs. Benchmarks 1700 1500

October 2009

FHAF Dow Jones AIG Commodity Index S&P 500

Wheat class 4 12%

1300 1100 900 700

Sunflower oil 88%

Ja n06 Ap r-0 6 Ju l-0 6 Oc t- 0 6 Ja n07 Ap r-0 7 Ju l-0 7 Oc t- 0 7 Ja n-0 8 Ap r-0 8 Ju l-0 8 Oc t- 0 8 Ja n-0 9 Ap r-0 9 Ju l-0 9 Oc t- 0 9

500

FUND INVESTMENT OBJECTIVE Implement a logistical arbitrage strategy focused on the physical agricultural commodities markets of Eastern Europe and the Commonwealth of Independent States (CIS). Take advantage of structural inefficiencies and undercapitalization of the local markets. Extract value from all phases of the delivery process from purchase to sale, transportation and delivery.

FUND STRUCTURE AND TERMS Fund Domicile: Investment Manager: Management Fee: Performance: Subscriptions: Redemptions:

British Virgin Islands Forum Asset Management, LLC 2% p.a. payable monthly 25%, High Water Mark Monthly on the first day of each month

0 0 0 0 0

Minimum Investment: Administrator: Custodian: Auditor: ISIN Number:

Quarterly with 90 days notice

0

Bloomberg ID:

US$ 1,000,000 Dundee Leeds JP Morgan Chase HLB Prime VGG364861010 FORHARD VI

VISIT OUR WEB SITE AT WWW.FORUMHEDGE.COM FOR MORE INFORMATION CONTACT: [email protected] Forum Asset Management, LLC. 140 East 45th St. Suite 14 A New York, N.Y. 10017 Tel. (212) 599-2781 Fax (212) 599-2730

Ray Bakhramov and Evgeny Chernyshev, Co-Portfolio Managers Emmy Tracy, Director Investor Relations

Disclaimers The returns on the performance summary chart for the Forum Hard Assets Fund, Ltd. (the “Fund”) are provided from January 2006. However, the Fund did not begin offering shares to unaffiliated investors until May 2007. For the period from January 2006 through April 2007, returns for the Fund are calculated based on the investment returns from a proprietary account managed by Ray Bakhramov. Although Forum Asset Management, LLC (“FAM”) currently implements a substantially similar investment strategy methodology as the investment strategy and methodology implemented for such account during such period, there can be no guarantee that future returns will be similar to the results achieved by such account during such period. The assets in such account during such period were less than the assets currently under management in the Fund, and this fact may have an unpredictable effect on investment returns. Future returns may be impacted by expenses that were not present during for such account such period. Performance results are presented net of advisory fees (i.e. management fee and performance fee), brokerage costs and all other Fund expenses. The results also include reinvestment of all capital gains, dividends and other earnings. As discussed above, for the period from January 2006 through April 2007, an account with a substantially similar investment methodology and strategy as the Fund was managed Ray Bakhramov and no fees were charged to that account. For purposes of this presentation, however, a 2% management fee and a 20% performance fee have been applied to the returns from such account. Index returns are provided for purposes of comparison only. Such index returns, unlike the Fund’s returns, do not reflect fees or expenses. Unlike the Fund, which is actively managed and periodically may maintain cash positions, an index is unmanaged and fully invested. The comparison of the performance of the Fund to these indices may be inappropriate because the portfolio for the Fund is not as diversified as the indices, may be more or less volatile than the indices, and may include securities which are substantially different than the securities in the indices. Comparisons to such index returns should not be viewed as a representation that the Fund's portfolio is comparable to the securities that comprise any such index.

Confidential

This document does not constitute an offer to buy or sell any securities or financial products

11/12/09