Morgan Stanley Dean Witter Charter Series
Monthly Report
June 1999
Dear Limited Partner:
The Net Asset Value per Unit for each of the three Morgan Stanley Dean
Witter Charter Funds as of June 30, 1999 was as follows:
Funds N.A.V. % change for month
Charter Graham $ 9.62 6.62%
Charter Millburn $10.60 5.20%
Charter Welton $ 9.21 3.03%
In Charter Graham, profits were recorded during June from short positions
in European bond futures, particularly German interest rate futures, as
prices declined due to dampened sentiment regarding the European Monetary
Union and fears of an interest rate hike in the U.S. Gains were also
recorded from short positions in U.S. interest rate futures as domestic
bond prices also moved lower due to fears of a tighter Federal Reserve
monetary policy and an interest rate hike in the U.S. In metals, profits
were recorded from long positions in aluminum and copper futures as prices
of these base metals rose due to a reduction in warehouse stocks and
reports that several major copper producers would be cutting production
significantly. Additional gains were recorded from short positions in gold
futures as gold prices fell to a 20-year low in anticipation of the British
Treasury's auction of its gold reserves on July 6. In the energy markets,
profits were recorded from long positions in crude oil futures as oil
prices increased to a 19-month high amid signs of declining inventories and
growth in global demand. Smaller gains were recorded in the global stock
index futures markets from long positions in Nikkei Index futures as
Japanese equity prices rose due to encouraging economic data out of Japan.
These gains were partially offset by losses incurred in currencies from
short positions in the Japanese yen as the value of the yen temporarily
strengthened versus the U.S. dollar during mid-month on reports of stronger-
than-expected gross domestic product data from Japan and optimism regarding
that country's economy. Smaller currency losses were recorded from short
South African rand positions as the value of the rand increased versus the
U.S. dollar as nervousness about the recent South African election
assuaged.
In Charter Millburn, gains were recorded during June from short positions
in Japanese interest rate futures as Japanese bond prices moved lower due
to rising interest rates spurred by an optimistic outlook for that
country's economy. Additional profits were recorded from short positions
in European interest rate futures as prices in these markets moved lower
amid skepticism regarding the European Monetary Union and fears of an
interest rate hike in the U.S. Smaller gains were recorded in this market
complex from short positions in U.S. interest rate futures as domestic bond
prices fell in anticipation of the interest rate hike by the Federal Open
Market Committee late in the month. In global stock index futures, profits
were recorded from long positions in Nikkei and Hang Seng Index futures as
most Asian equity prices moved higher amid an overall bullish sentiment for
the economies of the Far East. In metals, profits were recorded from long
positions in aluminum futures as prices increased on reports of a reduction
in warehouse stocks. Smaller gains were recorded from long positions in
crude oil and unleaded gas futures as oil prices climbed to a 19-month high
on signs of shrinking inventories and an increase in global demand. These
gains were partially offset by losses incurred from short positions in the
Japanese yen as its value temporarily strengthened versus the U.S. dollar
during mid-month on reports of stronger-than-expected gross domestic
product data from Japan and optimism regarding that country's economy.
Smaller losses were experienced from long positions in coffee futures as
coffee prices declined sharply during the first half of June due to
forecasts for warmer weather in Brazil.
In Charter Welton, gains were recorded during the month primarily from long
positions in U.S. stock index futures as domestic equity prices rose
following the release of U.S. economic data that calmed investor fears of
any extreme action by the Federal Open Market Committee. U.S. stock prices
received an extra boost on the last day of the month after the Fed
announced a quarter percentage point increase in the Federal Funds rate and
that it was shifting its monetary policy from a tightening bias to that of
a neutral one. Additional gains were recorded from short positions in
European interest rate futures, particularly Spanish and German bond
futures, as prices declined amid dampened sentiment regarding economic
unity in that region and fears of an interest rate hike in the U.S.
Smaller gains were recorded in livestock
<PAGE>
trading from short positions in lean hog futures as prices declined sharply
due to reports of an inventory surplus. These gains were partially offset
by losses incurred in the energy markets from long positions in natural gas
futures as prices dropped during mid-month on reports of higher-than-
expected storage levels and a break in a heat wave in key consumption areas
of the United States. Smaller losses were experienced from short positions
in aluminum and copper futures as prices increased on a decline in
warehouse stocks and on announcements by several leading copper producers
that they would cut production significantly.
Should you have any questions concerning this report, please feel free to
contact Demeter Management Corporation at Two World Trade Center, 62nd
Floor New York , NY 10048, or your Morgan Stanley Dean Witter Financial
Advisor.
I hereby affirm, that to the best of my knowledge and belief, the
information contained in this report is accurate and complete. Past
performance is not a guarantee of future results.
Sincerely,
Robert E. Murray
President
Demeter Management Corporation
General Partner
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<TABLE>
MORGAN STANLEY DEAN WITTER CHARTER SERIES
Historical Fund Performance
Presented below is the percentage change in Net Asset Value per
Unit from the start of the calendar year and the inception-to-
date return for each Fund in the Morgan Stanley Dean Witter
Charter Series. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE
OF FUTURE RESULTS.
<CAPTION>
Charter Graham
Year Return
<S> <C>
1999 (4 months) -3.8%
Inception-to-Date Return: -3.8%
_________________________________________________________________
___________________________
Charter Millburn
Year Return
1999 (4 months) 6.0%
Inception-to-Date Return: 6.0%
_________________________________________________________________
___________________________
Charter Welton
Year Return
1999 (4 months) -7.9%
Inception-to-Date Return: -7.9%
_________________________________________________________________
___________________________
</TABLE>
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<TABLE>
Morgan Stanley Dean Witter Charter Series
Statements of Operations
For the Month Ended June 30, 1999
(Unaudited)
<CAPTION>
Morgan Stanley Dean Witter
Charter Graham L.P. Morgan Stanley Dean Witter Charter Millburn L.P.
Percent of
Percent of
June 1, 1999
June 1, 1999
Beginning
Beginning
Amount Net Asset Value Amount
Net Asset Value
$ % $
%
REVENUES
<S> <C> <C>
<C> <C>
Trading Profit (Loss):
Realized 69,479 0.74
171,895 1.36
Net change in unrealized 594,828 6.31
568,178 4.50
Total Trading Results 664,307 7.05
740,073 5.86
Interest Income (DWR) 30,462 0.32
38,478 0.30
Total Revenues 694,769 7.37
778,551 6.16
EXPENSES
Brokerage fees (DWR) 54,972 0.58 73,627
0.58
Management fees 15,706 0.17 21,036
0.17
Incentive fees - - 28,060
0.21
Total Expenses 70,678 0.75
122,723 0.96
NET INCOME 624,091 6.62
655,828 5.20
Morgan Stanley Dean Witter Charter Series
Statements of Changes in Net Asset Value
For the Month Ended June 30, 1999
(Unaudited)
Morgan Stanley Dean Witter Charter Graham L.P. Morgan
Stanley Dean Witter Charter Millburn L.P.
Units Amount Per Unit Units
Amount Per Unit
$ $
$ $
<S> <C> <C> <C> <C>
<C> <C>
Net Asset Value,
June 1, 1999 1,044,678.659 9,423,764 9.02
1,252,465.037 12,621,690 10.08
Net Income - 624,091 0.60
- - 655,828 0.52
Subscriptions 140,769.138 1,354,199 9.62
147,847.501 1,567,184 10.60
Net Asset Value,
June 30, 1999 1,185,447.797 11,402,054 9.62
1,400,312.538 14,844,702 10.60
The accompanying notes are an integral part of these financial statements.
</TABLE>
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<TABLE>
Morgan Stanley Dean Witter Charter Series
Statements of Operations
For the Month Ended June 30, 1999
(Unaudited)
<CAPTION>
Morgan Stanley Dean
Witter Charter Welton L.P.
Percent of
June 1, 1999
Beginning
Amount Net Asset Value
$ %
REVENUES
<S> <C> <C>
Trading Profit (Loss):
Realized (115,828) (0.93)
Net change in unrealized 545,916 4.40
Total Trading Results 430,088 3.47
Interest Income (DWR) 38,707 0.31
Total Revenues 468,795 3.78
EXPENSES
Brokerage fees (DWR) 72,440 0.58
Management fees 20,697 0.17
Incentive fees - -
Total Expenses 93,137 0.75
NET INCOME 375,658 3.03
Morgan Stanley Dean Witter Charter Series
Statements of Changes in Net Asset Value
For the Month Ended June 30, 1999
(Unaudited)
Morgan Stanley Dean Witter Charter Welton L.P.
Units Amount Per Unit
$ $
<S> <C> <C> <C>
Net Asset Value,
June 1, 1999 1,388,549.104 12,418,334 8.94
Net Income - 375,658 0.27
Subscriptions 188,928.895 1,740,035 9.21
Net Asset Value,
June 30, 1999 1,577,477.999 14,534,027 9.21
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
Morgan Stanley Dean Witter Charter Series
Notes to Financial Statements
(Unaudited)
1. Summary of Significant Accounting Policies
Organization - Morgan Stanley Dean Witter Charter Graham L.P. ("Charter
Graham"), Morgan Stanley Dean Witter Charter Millburn L.P. ("Charter
Millburn"), and Morgan Stanley Dean Witter Charter Welton L.P. ("Charter
Welton") (individually, a "Partnership", or collectively, the
"Partnerships") are limited partnerships organized to engage in the
speculative trading of futures and forward contracts, options on futures
contracts and on physical commodities and other commodity interests,
including foreign currencies, financial instruments, metals, energy, and
agricultural products (collectively, "futures interests"). The general
partner for each Partnership is Demeter Management Corporation ("Demeter").
The non-clearing commodity broker is Dean Witter Reynolds, Inc. ("DWR") and
an unaffiliated clearing commodity broker, Carr Futures Inc. ("Carr"),
provides clearing and execution services. Demeter and DWR are wholly-owned
subsidiaries of Morgan Stanley Dean Witter & Co.
Demeter is required to maintain a 1% minimum interest in the equity of each
Partnership and income (losses) are shared by the General and Limited
Partners based upon their proportional ownership interests.
Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
Revenue Recognition - Futures interests are open commitments until
settlement date. They are valued at market and the resulting unrealized
gains and losses are reflected in income. Monthly, DWR credits each
Partnership with interest income on 100% of its average daily funds held in
its individual account at DWR at a rate equal to that earned by DWR on its
U.S. Treasury bill investments during such month. Carr also credits DWR
with the interest income earned with respect to the Partnership's Net
Assets maintained in trading accounts at Carr. DWR in turn credits the
Partnership with 100% of the interest income received from Carr. For
purposes of such interest payments, Net Assets do not include monies due
to the Partnership on forward contracts and other futures interests, but
not actually received.
Net Income (Loss) per Unit - Net income (loss) per Unit is computed using
the weighted average number of units outstanding during the period.
Brokerage and Related Transaction Fees and Costs - Each Partnership pays a
flat-rate monthly brokerage fee of 1/12 of 7% of the Partnership's Net
Assets as of the first day of each month (a 7% annual rate). Such fee
covers all brokerage commissions, transaction fees and costs and ordinary
administrative and offering expenses.
Operating Expenses - The Partnerships incur monthly management fees and may
incur incentive fees. Demeter bears all other operating expenses.
Income Taxes - No provision for income taxes has been made in the
accompanying financial statements, as partners are individually responsible
for reporting income or loss based upon their respective share of each
Partnership's revenues and expenses for income tax purposes.
Distributions - Distributions, other than on redemptions of Units, are made
on a pro-rata basis at the sole discretion of Demeter. No distributions
have been made to date.
Continuing Offering - Units of each Partnership are offered at a price
equal to 100% of the Net Asset Value per Unit at monthly closings held as
of the last day of each month.
<PAGE>
Morgan Stanley Dean Witter Charter Series
Notes to Financial Statements
(Continued)
Redemptions - Limited Partners may redeem some or all of their Units as of
the last day of the six months following the closing at which a person
first becomes a Limited Partner. Redemptions may only be made in whole
Units, with a minimum of 100 Units required for each redemption, unless a
Limited Partner is redeeming his entire interest in the Partnership.
Units redeemed on or prior to the last day of the twelfth month from the
date of purchase will be subject to a redemption charge equal to 2% of the
Net Asset Value of a Unit on the
Redemption Date. Units redeemed after the last day of the twelfth month
and on or prior to the last day of the twenty-fourth month from the date of
purchase will be subject to a redemption charge equal to 1% of the Net
Asset Value of a Unit on the Redemption Date. Units redeemed after the
last day of the twenty-fourth month from the date of purchase will not be
subject to a redemption charge.
Exchanges - On the last day of the first month which occurs more than 180
days after a person first becomes a Limited Partner in any of the
Partnerships, and at the end of each month thereafter, Limited Partners may
transfer their investment among the Partnerships (subject to certain
restrictions outlined in the Limited Partnership Agreement) without paying
additional charges.
Dissolution of the Partnership - Each Partnership will terminate on
December 31, 2035 or at an earlier date if certain conditions occur as
defined in the Partnership's Limited Partnership Agreement.
2. Related Party Transactions
Each Partnership pays brokerage fees to DWR for trades executed on its
behalf as described in Note 1. Each Partnership's cash is on deposit with
DWR and Carr in future interests trading accounts to meet margin
requirements as needed. DWR pays interest on these funds as described in
Note 1.
3. Trading Advisors
Demeter, on behalf of each Partnership, retains certain commodity trading
advisors to make all trading decisions for the Partnerships. The trading
advisors for each Partnership are as follows:
Morgan Stanley Dean Witter Charter Graham L.P.
Graham Capital Management L.P.
Morgan Stanley Dean Witter Charter Millburn L.P.
Millburn Ridgefield Corporation
Morgan Stanley Dean Witter Charter Welton L.P.
Welton Investment Corporation
Compensation to the trading advisors by the Partnerships consists of
management fees and incentive fees as follows:
Management Fee - Each Partnership pays a flat-rate monthly fee of 1/12 of
2% of the Net Assets under management by each trading advisor as of the
first day of each month (a 2% annual rate).
Incentive Fee - Each Partnership pays a monthly incentive fee equal to 20 %
of "Trading Profits", (as defined in the Limited Partnership agreements),
as of the end of each calendar month. When a trading advisor experiences
losses with respect to Net Assets as of the end of a calendar month, the
trading advisor must earn back such losses before that trading advisor is
eligible for an incentive fee in the future.
<PAGE>
4. Legal Matters
The following supplements the Legal Matters note to the financial
statements previously disclosed in the Partnership's Annual Report for the
year ended December 31, 1998:
With respect to the plaintiff's consolidated action in California on July
1, 1999, the Superior Court of the State of California, ruling from the
bench, denied the plaintiffs' motion to have their lawsuit certified as a
class action, stating, among other things, that plaintiffs' lawsuit did not
present common questions of fact.
