UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 1998 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 0-13299
DEAN WITTER CORNERSTONE FUND III
(Exact name of registrant as specified in its charter)
New York 13-3190919
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
c/o Demeter Management Corporation
Two World Trade Center, 62 Fl., New York, NY 10048
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 392-5454
(Former name, former address, and former fiscal year, if changed
since last report)
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
<PAGE>
<TABLE>
DEAN WITTER CORNERSTONE FUND III
INDEX TO QUARTERLY REPORT ON FORM 10-Q
June 30, 1998
<CAPTION>
PART I. FINANCIAL INFORMATION
<S> <C>
Item 1. Financial Statements
Statements of Financial Condition
June 30, 1998 (Unaudited) and December 31, 1997............2
Statements of Operations for the Quarters Ended
June 30, 1998 and 1997 (Unaudited).........................3
Statements of Operations for the Six Months Ended
June 30, 1998 and 1997 (Unaudited).........................4
Statements of Changes in Partners' Capital for the
Six Months Ended June 30, 1998 and 1997 (Unaudited)........5
Statements of Cash Flows for the Six Months Ended
June 30, 1998 and 1997 (Unaudited).........................6
Notes to Financial Statements (Unaudited)...............7-12
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..............13-18
PART II. OTHER INFORMATION
Item 1. Legal Proceedings...................................19
Item 2. Changes in Securities and Use of Proceeds...........19
Item 6. Exhibits and Reports on Form 8-K................... 20
</TABLE>
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
DEAN WITTER CORNERSTONE FUND III
STATEMENTS OF FINANCIAL CONDITION
<CAPTION>
June 30, December 31,
1998 1997
$ $
(Unaudited)
ASSETS
<S> <C> <C>
Equity in commodity futures trading accounts:
Cash 40,755,926 39,762,715
Net unrealized gain on open contracts1,485,060 1,938,295
Net option premiums (434,870) (158,765)
Total Trading Equity 41,806,116 41,542,245
Due from DWR 166,428 94,981
Interest receivable (DWR) 144,065 145,100
Total Assets 42,116,609 41,782,326
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Redemptions payable 422,473 429,759
Accrued management fees 139,503 138,480
Common administrative expenses payable 126,176 99,713
Total Liabilities 688,152 667,952
Partners' Capital
Limited Partners (12,757.648 and
13,352.334 Units, respectively)40,223,720 39,970,539
General Partner (382.103 Units) 1,204,737 1,143,835
Total Partners' Capital 41,428,457 41,114,374
Total Liabilities and Partners' Capital 42,116,609 41,782,326
NET ASSET VALUE PER UNIT 3,152.91 2,993.52
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER CORNERSTONE FUND III
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
For the Quarters Ended June 30,
1998 1997
$ $
REVENUES
<S> <C> <C>
Trading profit (loss):
Realized 510,583 2,474,925
Net change in unrealized (146,226) (1,265,930)
Total Trading Results 364,357 1,208,995
Interest Income (DWR) 427,720 446,377
Total Revenues 792,077 1,655,372
EXPENSES
Brokerage commissions (DWR) 536,265 559,203
Management fees 417,353 472,014
Transaction fees and costs 54,388 54,481
Common administrative expenses 18,632
17,030
Total Expenses 1,026,638 1,102,728
NET INCOME (LOSS) (234,561) 552,644
NET INCOME (LOSS) ALLOCATION
Limited Partners (228,145) 538,088
General Partner (6,416) 14,556
NET INCOME (LOSS) PER UNIT
Limited Partners (16.79) 38.09
General Partner (16.79) 38.09
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER CORNERSTONE FUND III
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
For the Six Months Ended June 30,
1998 1997
$ $
REVENUES
<S> <C> <C>
Trading profit (loss):
Realized 3,823,062 6,703,472
Net change in unrealized (453,235) (1,271,432)
Total Trading Results 3,369,827 5,432,040
Interest Income (DWR) 857,814 899,908
Total Revenues 4,227,641 6,331,948
EXPENSES
Brokerage commissions (DWR) 1,092,856 1,184,270
Management fees 836,091 877,608
Transaction fees and costs 110,653 114,093
Common administrative expenses 32,174
36,352
Total Expenses 2,071,774 2,212,323
NET INCOME 2,155,867 4,119,625
NET INCOME ALLOCATION
Limited Partners 2,094,965 4,016,671
General Partner 60,902 102,954
NET INCOME PER UNIT
Limited Partners 159.39 269.44
General Partner 159.39 269.44
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER CORNERSTONE FUND III
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For the Six Months Ended June 30, 1998 and 1997
(Unaudited)
<CAPTION>
Units of
Partnership Limited General
Interest Partners Partner Total
<S> <C> <C>
<C> <C>
Partners' Capital,
December 31, 1996 15,479.706 $40,997,752
$1,037,606 $42,035,358
Offering of Units 1.841 5,000
- - 5,000
Net Income - 4,016,671
102,954 4,119,625
Redemptions (993.087) (2,912,582)
- - (2,912,582)
Partners' Capital,
June 30, 1997 14,488.460 $42,106,841
$1,140,560 $43,247,401
Partners' Capital,
December 31, 1997 13,734.437 $39,970,539
$1,143,835 $41,114,374
Offering of Units 5.184 15,998 -
15,998
Net Income - 2,094,965
60,902 2,155,867
Redemptions (599.870) (1,857,782)
- - (1,857,782)
Partners' Capital,
June 30, 1998 13,139.751 $40,223,720
$1,204,737 $41,428,457
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER CORNERSTONE FUND III
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
For the Six Months Ended June 30,
1998 1997
$ $
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income 2,155,867 4
,119,625
Noncash item included in net income:
Net change in unrealized 453,235 1
,271,432
(Increase) decrease in operating assets:
Net option premiums 276,105 (
251,237)
Due from DWR (71,447) (59,977)
Interest receivable (DWR) 1,035 (5,728)
Increase (decrease) in operating liabilities:
Accrued management fees 1,023 2,996
Common administrative expenses payable26,463 (10,677)
Accrued brokerage commissions (DWR)- (2,747)
Accrued transaction fees and costs -
(4,251)
Net cash provided by operating activities 2,842,281 5
,059,436
CASH FLOWS FROM FINANCING ACTIVITIES
Offering of units 15,998 5,000
Decrease in redemptions payable (7,286) (
313,285)
Redemptions of units (1,857,782) (
2,912,582)
Net cash used for financing activities (1,849,070) (
3,220,867)
Net increase in cash 993,211 1
,838,569
Balance at beginning of period 39,762,715 4
0,587,011
Balance at end of period 40,755,926 4
2,425,580
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
DEAN WITTER CORNERSTONE FUND III
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
The financial statements include, in the opinion of management,
all adjustments necessary for a fair presentation of the results
of operations and financial condition of Dean Witter Cornerstone
Fund III (the "Partnership"). The financial statements and
condensed notes herein should be read in conjunction with the
Partnership's December 31, 1997 Annual Report on Form 10-K.
1. Organization
Dean Witter Cornerstone Fund III is a limited partnership
organized to engage in the speculative trading of futures
contracts, options contracts, and forward contracts
(collectively, "futures interests"). The Partnership is one of
the Dean Witter Cornerstone Funds, comprised of Dean Witter
Cornerstone Fund II, Dean Witter Cornerstone Fund III, and Dean
Witter Cornerstone Fund IV. The general partner is Demeter
Management Corporation ("Demeter"). The non-clearing commodity
broker is Dean Witter Reynolds Inc. ("DWR"), with an unaffiliated
broker, Carr Futures Inc. ("Carr"), providing clearing and
execution services. Both Demeter and DWR are wholly-owned
subsidiaries of Morgan Stanley Dean Witter & Co. ("MSDW"). The
trading advisors who make all trading decisions for the
Partnership are Abraham Trading Co., Welton Investment
Corporation (formerly, Welton Investment Systems Corporation,
Inc.) and Sunrise Capital Management, Inc.
<PAGE>
DEAN WITTER CORNERSTONE FUND III
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. Related Party Transactions
The Partnership's cash is on deposit with DWR and Carr in
commodity trading accounts to meet margin requirements as needed.
DWR pays interest on these funds based on current 13-week U.S.
Treasury bill rates. Brokerage expenses incurred by the
Partnership are paid to DWR.
3. Financial Instruments
The Partnership trades futures, options, and forward contracts in
interest rates, stock indices, commodities and currencies.
Futures and forwards represent contracts for delayed delivery of
an instrument at a specified date and price. Risk arises from
changes in the value of these contracts and the potential
inability of counterparties to perform under the terms of the
contracts. There are numerous factors which may significantly
influence the market value of these contracts, including interest
rate volatility. At June 30, 1998 and December 31, 1997, open
contracts were:
<PAGE>
DEAN WITTER CORNERSTONE FUND III
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Contract or Notional Amount
June 30, 1998 December 31, 1997
$ $
Exchange-Traded Contracts
Financial Futures:
Commitments to Purchase 122,408,000 50,242,000
Commitments to Sell 31,187,000 21,172,000
Options Written 52,599,000 -
Commodity Futures:
Commitments to Purchase 7,475,000 8,055,000
Commitments to Sell 26,339,000 31,622,000
Options Written 866,000 -
Foreign Futures:
Commitments to Purchase 98,266,000 50,870,000
Commitments to Sell 46,681,000 42,064,000
Options Written - -
Off-Exchange-Traded
Forward Currency Contracts
Commitments to Purchase 24,223,000 27,863,000
Commitments to Sell 34,530,000 41,794,000
A portion of the amounts indicated as off-balance-sheet risk in
forward currency contracts is due to offsetting forward
commitments to purchase and sell the same currency on the same
date in the future. These commitments are economically
offsetting, but are not offset in the forward market until the
settlement date.
The net unrealized gain on open contracts is reported as a
component of "Equity in Commodity futures trading accounts" on
the Statements of Financial Condition and totaled $1,485,060 and
$1,938,295 at June 30, 1998 and December 31, 1997, respectively.
Of the $1,485,060 net unrealized gain on open contracts at June
30, 1998, $1,264,297 related to exchange-traded futures contracts
<PAGE>
DEAN WITTER CORNERSTONE FUND III
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
and $220,763 related to off-exchange-traded forward currency
contracts.
Of the $1,938,295 net unrealized gain on open contracts at
December 31, 1997, $2,168,497 related to exchange-traded futures
contracts and $(230,202) related to off-exchange-traded forward
currency contracts.
Exchange-traded futures contracts held by the Partnership at June
30, 1998 and December 31, 1997 mature through June 1999 and June
1998, respectively. Off-exchange-traded forward currency
contracts held by the Partnership at June 30, 1998 and December
31, 1997 mature through September 1998 and March 1998,
respectively.
The contract amounts in the above table represent the
Partnership's extent of involvement in a particular class of
financial instrument, but not the credit risk associated with
counterparty non-performance. The credit risk associated with
these instruments is limited to the amounts reflected in the
Partnership's Statements of Financial Condition.
The Partnership also has credit risk because DWR and Carr act as
the futures commission merchants or the counterparties, with
<PAGE>
DEAN WITTER CORNERSTONE FUND III
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
respect to most of the Partnership's assets. Exchange-traded
futures and futures styled options contracts are marked to market
on a daily basis, with variations in value settled on a daily
basis. Each of DWR and Carr, as a futures commission merchant
for the Partnership's exchange-traded-futures and futures styled
options contracts, is required, pursuant to regulations of the
Commodity Futures Trading Commission ("CFTC"), to segregate from
their own assets, and for the sole benefit of their commodity
customers, all funds held by them with respect to exchange-traded
futures and futures styled option contracts, including an amount
equal to the net unrealized gain on all open futures and futures
styled options contracts, which funds, in the aggregate, totaled
$42,020,223 and $41,931,212 at June 30, 1998 and December 31,
1997, respectively. With respect to the Partnership's off-
exchange-traded forward currency contracts, there are no daily
settlements of variations in value nor is there any requirement
that an amount equal to the net unrealized gain on open forward
contracts be segregated. With respect to those off-exchange
traded forward currency contracts, the Partnership is at risk to
the ability of Carr, the counterparty on all such contracts, to
perform. Carr's parent, Credit Agricole Indosuez, has guaranteed
to the Partnership, payment of the net liquidating value of the
transactions in the Partnership's account with Carr (including
foreign currency contracts).
<PAGE>
DEAN WITTER CORNERSTONE FUND III
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
For the six months ended June 30, 1998 and the year ended
December 31, 1997, the average fair value of financial
instruments held for trading purposes was as follows:
June 30, 1998
Assets Liabilities
$ $
Exchange-Traded Contracts:
Financial Futures 69,901,000 18,786,000
Options on Financial Futures - 30,619,000
Commodity Futures 6,533,000 25,401,000
Options on Commodity Futures - 326,000
Foreign Futures 75,410,000 27,048,000
Off-Exchange-Traded Forward
Currency Contracts 38,831,000 47,042,000
December 31, 1997
Assets Liabilities
$ $
Exchange-Traded Contracts:
Financial Futures 82,881,000 46,462,000
Options on Financial Futures 698,000 64,639,000
Commodity Futures 26,095,000 21,377,000
Options on Commodity Futures 1,117,000 4,712,000
Foreign Futures 44,764,000 26,219,000
Options on Foreign Futures 7,229,000 -
Off-Exchange-Traded Forward
Currency Contracts 12,599,000 13,558,000
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity - The Partnership's assets are deposited with DWR, as
non-clearing broker and with Carr, as clearing broker in separate
futures interest trading accounts, and are used by the
Partnership as margin to engage in futures interest trading.
Such assets are held in either non-interest bearing bank accounts
or in securities approved by the CFTC for investment of customer
funds. The Partnership's assets held by DWR and Carr may be used
as margin solely for the Partnership's trading. Since the
Partnership's sole purpose is to trade in futures interests, it
is expected that the Partnership will continue to own such liquid
assets for margin purposes.
The Partnership's investment in futures interests may be
illiquid. If 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 the Partnership
from promptly liquidating its commodity futures positions and
result in restrictions on redemptions.
There is no limitation on daily price moves in trading forward
contracts on foreign currencies. The markets for some world
<PAGE>
currencies have low trading volume and are illiquid, which may
prevent the Partnership from trading in potentially profitable
markets or prevent the Partnership from promptly liquidating
unfavorable positions in such markets and subjecting it to
substantial losses. Either of these market conditions could
result in restrictions on redemptions.
Capital Resources The Partnership does not have, nor does it
expect to have, any capital assets. Redemptions and exchanges of
Units of Limited Partnership Interest in the future will affect
the amount of funds available for investment in futures interests
in subsequent periods. Since they are at the discretion of the
Limited Partners, it is not possible to estimate the amount and
therefore, the impact of future redemptions and exchanges.
Results of Operations
For the Quarter and Six Months Ended June 30, 1998
For the quarter ended June 30, 1998, the Partnership recorded
total trading revenues including interest income of $792,077 and
posted a loss in Net Asset Value per Unit after expenses. The
most significant net trading losses were incurred in the currency
markets from short German mark positions as its value reversed
higher during April after showing signs of trending lower
previously. Additional currency losses were recorded during
April from long British pound positions as its value weakened
relative to other currencies. In other markets, losses were
recorded in financial futures during April and June primarily
<PAGE>
from long Australian bond futures positions as prices reversed
lower after trending higher previously. These losses, coupled
with smaller losses incurred in British interest rate futures
trading, were partially offset by profits from long global stock
index futures positions as prices moved higher throughout a
majority of the quarter. In agricultural futures, losses were
experienced from short corn and soybean futures positions as
prices moved higher during the latter half of June. A portion of
the Partnership's overall losses for the month was offset by
gains in soft commodities from short sugar futures positions as
sugar prices moved lower during April. Additional profits
recorded during June from short positions in coffee futures, as
well as during May and June from short positions in crude oil
futures, helped to offset a portion of the losses for the
quarter. Total expenses for the three months ended June 30, 1998
were $1,026,638, resulting in a net loss of $234,561. The value
of an individual Unit in the Partnership decreased from $3,169.70
at March 31, 1998 to $3,152.91 at June 30, 1998.
For the six months ended June 30, 1998, the Partnership recorded
total trading revenues including interest income of $4,227,641 and
posted a gain in Net Asset Value per Unit. The most significant
profits were recorded from long U.S. and European stock index
futures positions as prices in these markets trended consistently
higher throughout the first six months of the year. Additional
profits were recorded from long European bond futures positions as
prices in these markets trended higher during the first quarter.
In
<PAGE>
energies, gains were recorded from short crude oil futures
positions as oil prices declined during January and February, as
tensions eased in the Middle East, and again during May and June on
reports of increasing supplies. Smaller gains were recorded from
short positions in sugar futures as sugar prices trended lower
between January and April. A portion of these gains was offset by
losses recorded in the metals markets from long silver futures
positions as silver prices reversed lower during March after
trending steadily higher during January and February and from short
gold futures positions as gold prices reversed higher during
January. Smaller losses were recorded in currencies from
transactions involving the British pound, as its value moved in a
trendless pattern throughout a majority of the first half of the
year, and from short German mark positions as its value moved
higher versus the U.S. dollar during April. Total expenses for the
six months ended June 30, 1998 were $2,071,774 resulting in net
income of $2,155,867. The value of an individual Unit in the
Partnership increased from $2,993.52 at December 31, 1997 to
$3,152.91 at June 30, 1998.
For the Quarter and Six Months Ended June 30, 1997
For the quarter ended June 30, 1997, the Partnership recorded
total trading revenues including interest income of $1,655,372
and posted an increase in Net Asset Value per Unit. The most
significant trading gains were recorded in the soft commodities
markets from long coffee futures positions as prices trended
higher during April and May. Additional gains were recorded in
the currency markets from transactions involving the German mark
relative to the Japanese yen during June. A portion of these
<PAGE>
gains was offset by losses recorded from choppy price movement in
the agricultural markets, particularly livestock and corn futures
during the quarter. Losses were also experienced from trading
crude oil futures as oil prices moved in a short-term volatile
pattern. In financial futures trading, losses were experienced
from trendless price movement in global interest rate futures
throughout a majority of the quarter. Smaller losses were
recorded in the metals markets from long positions in most base
metals futures, as prices moved lower during April and June.
Total expenses for the three months ended June 30, 1997 were
$1,102,728 resulting in net income of $552,644. The value of an
individual Unit in the Partnership increased from $2,946.86 at
March 31, 1997 to $2,984.95 at June 30, 1997.
For the six months ended June 30, 1997, the Partnership recorded
total trading revenues including interest income of $6,331,948
and posted an increase in Net Asset Value per Unit. The most
significant trading gains were recorded in the soft commodities
markets from long coffee futures positions as coffee prices
trended higher during January and February and again during April
and May. Gains were also recorded in the currency markets during
January and February as a result of a strong upward trend in the
value of the U.S. dollar versus the Japanese yen and most major
European currencies. In the agricultural markets, profits were
recorded from trading soybean and corn futures during March and
June. Smaller gains were experienced in the metals markets
during January and February from long zinc futures positions as
most base metals prices moved higher. A portion of the
Partnership's
<PAGE>
overall gains was offset by losses recorded from trendless price
movement in Japanese and European interest rate futures during
April and May. Trading gains experienced from long global stock
index futures positions as global equity prices trended higher in
May and June helped to mitigate these losses. Smaller losses
were recorded in energies as gas and oil prices moved in a short-
term volatile pattern for a majority of the first half of the
year. Total expenses for the six months ended June 30, 1997 were
$2,212,323, resulting in net income of $4,119,625. The value of
an individual Unit in the Partnership increased from $2,715.51 at
December 31, 1996 to $2,984.95 at June 30, 1997.
<PAGE>
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Previously reported. See Form 10-Q for the quarter ended March
31, 1998.
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Dean Witter Cornerstone Fund I ("Cornerstone I"), Dean Witter
Cornerstone Fund II ("Cornerstone II"), and the Partnership
collectively registered 250,000 Units of Limited Partnership
Interest ("Units") pursuant to a Registration Statement on Form S-
1, which became effective on May 31, 1984 (the "Registration
Statement") (SEC File Numbers 2-88587; 88587-01; 88587-02). As
contemplated in the Registration Statement, an additional fund,
Dean Witter Cornerstone Fund IV, ("Cornerstone IV" and,
collectively with Cornerstone I, Cornerstone II and the
Partnership, the "Cornerstone Funds") was registered pursuant to
Post-Effective Amendment No. 5 to the Registration Statement, which
became effective on February 6, 1987. The managing underwriter for
the Cornerstone Funds is DWR.
The offering for the Partnership originally commenced on May 31,
1984 and currently continues with 74,405.186 Units sold through
June 30, 1998. Through June 30, 1998, the Cornerstone Funds have
sold an aggregate of 235,407.756 Units leaving 14,592.244 Units
remaining available for sale as of July 1, 1998.
The aggregate price of Units sold through June 30, 1998 with
respect to the Partnership is $137,132,762.
<PAGE>
Item 6. - EXHIBITS AND REPORTS ON FORM 8-K
Reports on Form 8-K - No such reports have
been filed for the quarter ended June 30, 1998.
<PAGE>
SIGNATURE
Pursuant to the requirements 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.
Dean Witter Cornerstone Fund III
(Registrant)
By: Demeter Management Corporation
(General Partner)
August 12, 1998 By: /s/ Lewis A. Raibley, III
Lewis A. Raibley, III
Chief Financial Officer
The General Partner which signed the above is the only party
authorized to act for the Registrant. The Registrant has no
principal executive officer, principal financial officer,
controller, or principal accounting officer and has no Board of
Directors.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from Dean
Witter Cornerstone Fund III and is qualified in its entirety by reference
to such financial instruments.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> JUN-30-1998
<CASH> 40,755,926
<SECURITIES> 0
<RECEIVABLES> 310,493<F1>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 42,116,609<F2>
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 42,116,609<F3>
<SALES> 0
<TOTAL-REVENUES> 4,227,641<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,071,774
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,155,867
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 2,155,867
<CHANGES> 0
<NET-INCOME> 2,155,867
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Receivables include interest receivable of $144,065 and due from
DWR of $166,428.
<F2>In addition to cash and receivables, total assets include net unrealized
gain on open contracts of $1,485,059 and net option premiums of $(434,869).
<F3>Liabilities include redemptions payable of $422,473, accrued management
fees of $139,503, and common administrative expenses payable of $126,176.
<F4>Total revenue includes realized trading revenue of $3,823,062, net
change in unrealized of $(453,235) and interest income of $857,815.
</FN>
</TABLE>
