UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly report pursuant to Section l3 or l5 (d) of the
Securities Exchange Act of l934
For the period ended March 31, 1995 or
[ ] Transition report pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the transition period _________________to______________.
Commission File Number 0-15442
DEAN WITTER CORNERSTONE FUND IV
(Exact name of registrant as specified in its charter)
New York 13-3393597
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
c/o Demeter Management Corp.
Two World Trade Center, New York, NY 62 Fl. 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
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<TABLE>
DEAN WITTER CORNERSTONE FUND IV
INDEX TO QUARTERLY REPORT ON FORM 10-Q
March 31, 1995
<CAPTION>
PART I. FINANCIAL INFORMATION
<S> <C>
Item 1. Financial Statements
Statements of Financial Condition
March 31, 1995 (Unaudited) and December 31, 1994...........2
Statements of Operations for the Quarters Ended
March 31, 1995 and 1994 (Unaudited)........................3
Statements of Cash Flows for the Quarters Ended
March 31, 1995 and 1994 (Unaudited)........................4
Statements of Changes in Partners' Capital for the
Quarters Ended March 31, 1995 and 1994
(Unaudited)................................................5
Notes to Financial Statements (Unaudited)................6-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................9-12
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K....................13
</TABLE>
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<TABLE>
DEAN WITTER CORNERSTONE FUND IV
STATEMENTS OF FINANCIAL CONDITION
<CAPTION>
March 31, December 31,
1995 1994
(Unaudited)
ASSETS
<S> <C> <C>
Equity in commodity futures trading accounts:
Cash $113,710,133 $111,508,180
Net unrealized gain on open contracts 17,459,783 268,291
Total Trading Equity 131,169,916 111,776,471
Interest receivable (DWR) 429,044 434,153
Total Assets $131,598,960 $112,210,624
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Redemptions payable $ 5,114,833 $ 1,589,622
Accrued management fees 435,887 371,606
Common administrative expenses payable 397,020 357,130
Total Liabilities 5,947,740 2,318,358
Partners' Capital
Limited Partners (43,052.775 and
46,994.002 Units, respectively) 123,813,863 108,418,306
General Partner (638.889 Units) 1,837,357 1,473,960
Total Partners' Capital 125,651,220 109,892,266
Total Liabilities and Partners' Capital $131,598,960 $112,210,624
NET ASSET VALUE PER UNIT $ 2,875.86 $ 2,307.07
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
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<TABLE>
DEAN WITTER CORNERSTONE FUND IV
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
For the Quarters Ended March 31,
1995 1994
REVENUES
<S> <C> <C>
Trading profit (loss):
Realized $ 9,761,605 $ (2,832,819)
Net change in unrealized 17,191,492 261,563
Total Trading Results 26,953,097 (2,571,256)
Interest Income (DWR) 1,244,913 817,379
Total Revenues 28,198,010 (1,753,877)
EXPENSES
Brokerage commissions (DWR) 1,294,926 1,511,970
Management fees 1,126,941 1,288,570
Transaction fees and costs 80,724 111,135
Common administrative expenses 39,890 49,128
Total Expenses 2,542,481 2,960,803
NET INCOME (LOSS) $25,655,529 $(4,714,680)
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
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<TABLE>
DEAN WITTER CORNERSTONE FUND IV
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
For the Quarters Ended March 31,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income (loss) $ 25,655,529 $ (4,714,680)
Noncash item included in net income (loss):
Net change in unrealized (17,191,492) (261,563)
(Increase) decrease in operating assets:
Interest receivable (DWR) 5,109 (43,718)
Increase in operating liabilities:
Accrued management fees 64,281 11,607
Common administrative expenses payable 39,890 49,128
Net cash provided by (used for) operating activities 8,573,317 (4,959,226)
CASH FLOWS FROM FINANCING ACTIVITIES
Offering of units 23,746 11,162,102
Increase in redemptions payable 3,525,211 619,254
Redemptions of units (9,920,321) (3,584,527)
Net cash provided by financing activities (6,371,364) 8,197,829
Net increase in cash 2,201,953 3,237,603
Balance at beginning of period 111,508,180 124,788,050
Balance at end of period $113,710,133 $128,025,653
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
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<TABLE>
DEAN WITTER CORNERSTONE FUND IV
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For the Quarters Ended March 31, 1995 and 1994
(Unaudited)
<CAPTION>
Units of
Partnership Limited General
Interest Partners Partner Total
<S> <C> <C> <C> <C>
Partners' Capital
December 31, 1993 45,526.304 $123,481,403 $1,719,227 $125,200,630
Continuous Offering 4,198.897 11,162,102 - 11,162,102
Net Loss - (4,653,414) (61,266) (4,714,680)
Redemptions (1,376.398) (3,584,527) - (3,584,527)
Partners' Capital
March 31, 1994 49,348.803 $126,405,564 $1,657,961 $128,063,525
Partners' Capital
December 31, 1994 47,632.891 $108,418,306 $1,473,960 $109,892,266
Continuous Offering 10.467 23,746 - 23,746
Net Income - 25,292,132 363,397 25,655,529
Redemptions (3,951.694) (9,920,321) - (9,920,321)
Partners' Capital
March 31, 1995 43,691.664 $123,813,863 $1,837,357 $125,651,220
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
DEAN WITTER CORNERSTONE FUND IV
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. The financial statements and
condensed notes herein should be read in conjunction with the
Partnership's December 31, 1994 Annual Report on Form 10-K.
1. Organization
Dean Witter Cornerstone Fund IV (the "Partnership") is a limited
partnership organized to engage in the speculative trading of
commodity futures contracts and forward contracts on foreign
currencies. 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.
2. Trading Managers
The trading managers who make all trading decisions for the
Partnership are as follows:
John W. Henry & Co., Inc.
Sunrise Commodities, Inc.
3. Related Party Transactions
Both Demeter Management Corporation (the "General Partner") and the
commodity broker Dean Witter Reynolds Inc. ("DWR") are wholly owned
subsidiaries of Dean Witter, Discover & Co. The Partnership's cash
<PAGE>
DEAN WITTER CORNERSTONE FUND IV
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
is on deposit with DWR 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. Off-Balance Sheet Risk
The Partnership trades futures and forward contracts in interest
rates, stock indices and currencies. 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
March 31, 1995 open contracts were:
<TABLE>
Contract or
Notional Amount
<S> <C>
Foreign Futures and Forward
Currency Contracts
Commitments to Purchase $468,937,000
Commitments to Sell $537,404,000
</TABLE>
The contract amounts in the above table represent the Partnership's
extent of involvement in the 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 Statement
of Financial Condition.
<PAGE>
DEAN WITTER CORNERSTONE FUND IV
NOTES TO FINANCIAL STATEMENTS - (CONCLUDED)
The Partnership also has credit risk because the sole counterparty
with respect to most of the Partnerships' assets is DWR. Under the
guidelines of various regulatory agencies, DWR is required to
maintain amounts it owes to its customers in segregated accounts.
<PAGE>
Item 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
Liquidity. The Partnership's assets are deposited in separate
commodity trading accounts with DWR, and are used by the
Partnership as margin to engage in trading commodity futures
contracts and forward contracts on foreign currency. DWR holds
such assets in either bank accounts or in securities approved by
the Commodity Futures Trading Commission for investment of customer
funds. The Partnership's assets held by DWR may be used as margin
solely for the Partnership's trading. Since the Partnership's sole
purpose is to trade in commodity futures contracts and forward
contracts on foreign currency, it is expected that the Partnership
will continue to own such liquid assets for margin purposes.
The Partnership's investment in commodity futures contracts and
other commodity interests may be illiquid. If the price for 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.
There is no limitation on daily price moves in trading forward
contracts on foreign currency. The markets for some world
currencies have low trading volume and are illiquid, which may
prevent the Partnership from trading in 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, exchanges and
sales of additional Units in the future will impact the amount of
funds available for investments in commodity futures contracts and
other commodity interests.
Results of Operations
For the Quarter Ended March 31, 1995
For the quarter ended March 31, 1995, the Partnership's total
trading gains including interest income were $28,198,010. During
the first quarter, the Partnership posted a gain in Net Asset Value
per Unit. The most significant trading gains were recorded in this
currency only Fund during the last two months of the quarter.
During February, the majority of these gains recorded by the
Partnership were due primarily to an increase in value of world
currencies such as the German mark, Swiss and French franc and the
Norwegian kroner relative to the U.S. and Canadian dollar. Trading
losses from transactions involving the British pound and New
Zealand dollar offset a portion of overall gains for the month.
Trading gains were also recorded during March as a result of the
continued downward trend in the value of the U.S. dollar versus the
Japanese yen, German mark and Swiss franc. Additionally, smaller
gains were recorded from transactions involving the French franc
and Norwegian kroner. Small losses from transactions involving the
British pound and New Zealand dollar offset a portion of overall
gains for the Partnership during March. During the first month of
the quarter, the Partnership posted net losses. The majority of
the losses were the result of a decline in the value of the U.S.
dollar that began in late December and continued into early
January, resulting in losses from previously established positions.
As the month progressed, the Partnership reversed positions only to
experience additional losses when the U.S. dollar strengthened on
January 31 in reaction to President Clinton's decision to support
the Mexican peso. Total expenses for the period were $2,542,481,
resulting in a net gain of $26,655,529. The value of an individual
Unit in the Partnership increased from $2,307.07 at December 31,
1994 to $2,875.86 at March 31, 1995.
For the Quarter Ended March 31, 1994
For the quarter ended March 31, 1994, the Partnership's total
trading losses and interest income were $1,753,877. During the
first quarter, the Partnership posted a loss in Net Asset Value per
Unit. The most significant trading losses were recorded in this
currency only Fund during January as a result of a reversal in the
downward movement of the Japanese yen experienced during the fourth
quarter of last year and in February as a result of transactions
involving the U.S. dollar versus major European currencies,
specifically the British pound, German mark and Spanish peseta.
Trading gains in the Australian dollar in January and in the
Canadian dollar during February offset a portion of the
Partnership's losses for the quarter. Total expenses for the
period were $2,960,803, resulting in a net loss of $4,714,680. The
value of an individual Unit in the Partnership decreased from
$2,690.96 at December 31, 1993 to $2,595.07 at March 31, 1994.
<PAGE>
PART II. OTHER INFORMATION
Item 6. - EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits - None.
(B) Reports on Form 8-K - None.
<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 IV
(Registrant)
By: Demeter Management Corporation
(General Partner)
May 12, 1995 By: /s/ Patti L. Behnke
Patti L. Behnke
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 IV and is qualified in its entirety
by reference to such financial statements.
<CIK> 0000808373
<NAME> DEAN WITTER CORNERSTONE FUND IV
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 113,710,133
<SECURITIES> 0
<RECEIVABLES> 429,044
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 131,598,960<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 125,651,220<F2>
<SALES> 0
<TOTAL-REVENUES> 28,198,010<F3>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,542,481
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 25,655,529
<INCOME-TAX> 0
<INCOME-CONTINUING> 25,655,529
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 25,655,529
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>In addition to cash and receivables, total assets include net unrealized
gain on open contracts of $17,459.783.
<F2>Liabilities include redemptions payable of $5,114,833, accrued management
fees of $435,887 and common administrative expenses payable of $397,020.
<F3>Total revenue includes realized trading revenue of $9,761,605, net change
in unrealized of $17,191,492 and interest income of $1,244,913.
</FN>
</TABLE>
