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 September 30, 1998 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 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 IV
INDEX TO QUARTERLY REPORT ON FORM 10-Q
September 30, 1998
<CAPTION>
PART I. FINANCIAL INFORMATION
<S>
<C>
Item 1. Financial Statements
Statements of Financial Condition
September 30, 1998 (Unaudited) and December 31, 1997....2
Statements of Operations for the Quarters Ended
September 30, 1998 and 1997 (Unaudited).................3
Statements of Operations for the Nine Months Ended
September 30, 1998 and 1997 (Unaudited).................4
Statements of Changes in Partners' Capital for the
Nine Months Ended September 30, 1998 and 1997
(Unaudited).............................................5
Statements of Cash Flows for the Nine Months Ended
September 30, 1998 and 1997 (Unaudited).................6
Notes to Financial Statements (Unaudited)............7-11
Item 2. Management's Discussion and Analysis of Financial
Condition and
Results of Operations............12-20
PART II. OTHER INFORMATION
Item 1. Legal Proceedings................................21
Item 2. Changes in Securities and Use of Proceeds.....21-22
Item 6. Exhibits and Reports on Form 8-K.................22
</TABLE>
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
DEAN WITTER CORNERSTONE FUND IV
STATEMENTS OF FINANCIAL CONDITION
<CAPTION>
September 30, December 31,
1998 1997
$ $
(Unaudited)
ASSETS
<S> <C> <C>
Equity in Commodity futures trading accounts:
Cash 120,171,089 119,181,131
Net unrealized gain on open contracts 2,341,606 1,815,112
Total Trading Equity 122,512,695 120,996,243
Interest receivable (DWR) 370,577 382,307
Total Assets 122,883,272 121,378,550
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Incentive fees payable 1,563,123 1,594,371
Redemptions payable 780,938 899,127
Accrued management fees 407,708 403,011
Common administrative expenses payable 163,206 72,297
Total Liabilities 2,914,975 2,968,806
Partners' Capital
Limited Partners (24,415.136 and
26,057.228 Units, respectively) 116,909,051 115,575,973
General Partner (638.889 Units) 3,059,246 2,833,771
Total Partners' Capital 119,968,297 118,409,744
Total Liabilities and Partners' Capital 122,883,272 121,378,550
NET ASSET VALUE PER UNIT 4,788.38 4,435.47
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER CORNERSTONE FUND IV
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
For the Quarters Ended September 30,
1998 1997
$ $
REVENUES
<S> <C> <C>
Trading profit (loss):
Realized 7,119,335 8,859,251
Net change in unrealized (9,397,134) 3,583,478
Total Trading Results (2,277,799) 12,442,729
Interest Income (DWR) 1,131,920 1,041,011
Total Revenues (1,145,879) 13,483,740
EXPENSES
Management fees 1,259,836 1,078,113
Brokerage commissions (DWR) 585,467 667,208
Common administrative expenses 39,532 37,749
Transaction fees and costs 33,562 50,595
Incentive fees (629,430) -
Total Expenses 1,288,967 1,833,665
NET INCOME (LOSS) (2,434,846) 11,650,075
NET INCOME (LOSS) ALLOCATION
Limited Partners (2,372,789) 11,381,929
General Partner
(62,057) 268,146
NET INCOME (LOSS) PER UNIT
Limited Partners (97.14)
419.71 General Partner (97.14)
419.71 <FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER CORNERSTONE FUND IV
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
For the Nine Months Ended September 30,
1998 1997
$ $
REVENUES
<S> <C> <C>
Trading profit (loss):
Realized 11,646,648 26,063,854
Net change in unrealized 526,494 (2,018,257)
Total Trading Results 12,173,142 24,045,597
Interest Income (DWR) 3,434,613 3,089,288
Total Revenues 15,607,755 27,134,885
EXPENSES
Management fees 3,593,170 3,130,872
Brokerage commissions (DWR) 1,788,338 2,145,802
Incentive fees 989,299 -
Common administrative expenses 102,097 108,287
Transaction fees and costs 94,209 141,554
Total Expenses 6,567,113 5,526,515
NET INCOME 9,040,642 21,608,370
NET INCOME ALLOCATION
Limited Partners 8,815,167 21,127,907
General Partner 225,475 480,463
NET INCOME PER UNIT
Limited Partners
352.91
752.03
General Partner
352.91 752.03
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER CORNERSTONE FUND IV
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For the Nine Months Ended September 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 29,799.176 $93,448,822 $2,047,422
$95,496,244
Offering of Units 17.979 63,963 - 63,963
Net Income - 21,127,907 480,463
21,608,370
Redemptions (2,703.260) (9,887,331) -
(9,887,331)
Partners' Capital
September 30, 1997 27,113.895 $104,753,361 $2,527,885
$107,281,246
Partners' Capital
December 31, 1997 26,696.117 $115,575,973 $2,833,771
$118,409,744
Offering of Units 55.230 245,529 - 245,529
Net Income - 8,815,167 225,475
9,040,642
Redemptions (1,697.322) (7,727,618) -
(7,727,618)
Partners' Capital
September 30, 1998 25,054.025 $116,909,051 $3,059,246
$119,968,297
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER CORNERSTONE FUND IV
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
For the Nine Months Ended September 30,
1998 1997
$ $
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income 9,040,642 2
1,608,370
Noncash item included in net income:
Net change in unrealized (526,494) 2
,018,257
(Increase) decrease in operating assets:
Interest receivable (DWR) 11,730 (
38,041)
Increase (decrease) in operating liabilities:
Incentive fees payable (31,248) -
Accrued management fees 4,697 3
7,736
Common administrative expenses payable90,909 3
6,876
Accrued brokerage commissions (DWR)- (
74,340)
Accrued transaction fees and costs -
(3,654)
Net cash provided by operating activities 8,590,236 2
3,585,204
CASH FLOWS FROM FINANCING ACTIVITIES
Offering of units 245,529 6
3,963
Decrease in redemptions payable (118,189) (
464,352)
Redemptions of units (7,727,618) (
9,887,331)
Net cash used for financing activities (7,600,278) (
10,287,720)
Net increase in cash 989,958 1
3,297,484
Balance at beginning of period 119,181,131 9
1,656,399
Balance at end of period 120,171,089 1
04,953,883
<FN>
The accompanying notes 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 of Dean Witter Cornerstone Fund IV (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
The Partnership is a limited partnership organized to engage
in the speculative trading of commodity futures contracts
and forward contracts on foreign currencies (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
the Partnership. The general partner is Demeter Management
Corporation ("Demeter"). The non-clearing commodity broker
is Dean Witter Reynolds Inc. ("DWR"), an affiliate of
Demeter. The clearing commodity broker is 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
for the Partnership retained by Demeter are John W. Henry &
<PAGE>
DEAN WITTER CORNERSTONE FUND IV
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Company, Inc. and Sunrise Capital Management, Inc., (the
"Trading Advisors").
2. Related Party Transactions
The Partnership's cash is on deposit with DWR and Carr in
futures interest 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 and forward contracts on
foreign 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 September 30, 1998 and December 31, 1997,
open contracts were:
Contract or Notional Amount
September 30, 1998 December 31, 1997
$ $
Off-Exchange-Traded
Forward Currency Contracts
Commitments to Purchase 416,642,000 218,670,000
Commitments to Sell 223,490,000 427,237,000
<PAGE>
DEAN WITTER CORNERSTONE FUND IV
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
A portion of the amounts indicated as off-balance-sheet risk
in forward currency contracts is due to offsetting forward
commitments to purchase and to 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 gains on open contracts are reported as a
component of "Equity in Commodity futures trading accounts"
on the Statements of Financial Condition and totaled
$2,341,606 and $1,815,112 at September 30, 1998 and December
31, 1997, respectively.
The $2,341,606 and $1,815,112 of net unrealized gains on
open contracts at September 30, 1998 and December 31, 1997,
respectively, related entirely to off-exchange-traded
forward currency contracts.
Off-exchange-traded forward currency contracts held by the
Partnership at September 30, 1998 and December 31, 1997
mature through December 1998 and April 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
<PAGE>
DEAN WITTER CORNERSTONE FUND IV
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 respect to most of the Partnership's
assets. Exchange-traded futures contracts are marked to
market on a daily basis, with variations in value settled or
charged to the Fund's account on a daily basis. Each of DWR
and Carr, as a futures commission merchant for the
Partnership's exchange-traded futures 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 contracts, including an amount equal to the
net unrealized gain on all open futures contracts which
funds, in the aggregate, totaled $120,171,089 and
$119,181,131 at September 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.
<PAGE>
DEAN WITTER CORNERSTONE FUND IV
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
With respect to those off-exchange traded forward currency
contracts, the Partnership is at risk to the ability of
Carr, the sole 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).
For the nine months ended September 30, 1998 and the year
ended December 31, 1997, the average fair value of financial
instruments held for trading purposes was as follows:
September 30, 1998
Assets
Liabilities
$ $
Off-Exchange-Traded Forward
Currency Contracts 412,780,000 507,286,000
December 31, 1997
Assets
Liabilities
$ $
Exchange-Traded Contracts:
Financial Futures 34,008,000 57,577,000
Off-Exchange-Traded Forward
Currency Contracts 299,407,000 414,754,000
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity - Assets of the Partnership are deposited with DWR
as non-clearing broker and Carr as clearing broker in
separate futures interest trading accounts established for
each Trading Advisor 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, from
time to time, be illiquid. Most United States futures
exchanges limit fluctuations in certain futures interest
prices during a single day by regulations referred to as
"daily price fluctuations limits" or "daily limits."
Pursuant to such regulations, during a single trading day no
trades may be executed at prices beyond the daily limit. If
the price for a particular futures interest has increased or
decreased by an amount equal to the daily limit, positions
in such futures interest can neither be taken nor liquidated
unless traders are willing to effect trades at or within the
<PAGE>
limit. Futures interests 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 futures interests
and result in restrictions on redemptions. The Partnership
may be subject to additional liquidity risks because it
trades exclusively in world currencies, the markets for some
of which are or may become illiquid at times.
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
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. Future redemptions
and exchanges of Units of Limited Partnership Interest 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.
<PAGE>
Results of Operations
For the Quarter and Nine Months Ended September 30, 1998
For the quarter ended September 30, 1998, the Partnership
recorded total trading losses net of interest income of
$1,145,879 and posted a decrease in Net Asset Value per
Unit. The most significant losses were recorded during July
from long British pound positions as the value of the pound
moved lower relative to the U.S. dollar after showing signs
of trending higher earlier in the month. Smaller losses
were recorded from transactions involving the British pound
during the remainder of the quarter as its value failed to
move with consistent direction relative to the U.S. dollar.
The value of the Australian dollar also moved in a trendless
pattern versus the U.S. dollar during July and September
resulting in additional losses recorded by the Partnership.
Smaller losses were incurred during September from short
Japanese yen positions as the value of the yen strengthened
versus the U.S. dollar. This increase in the yen was
spurred by several remarks from top finance officials in
Tokyo stating that Japan was close to intervening in order
to support the yen. As a result of this increase in the
yen, new long positions were established during mid-
September, only to result in additional losses as the value
of the yen reversed lower due to the failure of the Japanese
government to present any new initiatives toward economic
reform in that country. These losses were partially offset
by profits recorded during
<PAGE>
September from long German mark positions as the U.S. dollar
weakened relative to most European currencies due to fears
over the White House scandal, continued concerns about
emerging markets and anticipation of an interest rate cut by
the Federal Reserve. Additional currency gains were
recorded from long positions in the French franc as its
value also strengthened versus the U.S. dollar during
September. Total expenses for the three months ended
September 30, 1998 were $1,288,967, resulting in a net loss
of $2,434,846. The value of an individual Unit in the
Partnership decreased from $4,885.52 at June 30, 1998 to
$4,788.38 at September 30, 1998.
For the nine months ended September 30, 1998, the
Partnership recorded total trading revenues including
interest income of $15,607,755 and posted an increase in Net
Asset Value per Unit. The most significant profits were
recorded during May and June from short South African rand
positions as the value of this currency fell significantly
lower relative to the U.S. dollar despite an effort by the
South African government to support its ailing currency.
Additional gains were recorded from short New Zealand dollar
positions as its value also decreased versus the U.S. dollar
during March, May and June. Smaller gains were recorded
from long French franc positions during September as the
value of the U.S. dollar weakened relative to most major
<PAGE>
currencies due to fears over the White House scandal,
continued concerns about emerging markets and anticipation
of an interest rate cut by the Federal Reserve. These gains
were partially offset by losses experienced from
transactions involving the British pound as its value moved
without consistent direction during the first nine months of
the year. Smaller losses were recorded during July and
September from transactions involving the Australian dollar
as its value also moved in a trendless pattern relative to
the U.S. dollar. Total expenses for the nine months ended
September 30, 1998 were $6,567,113, resulting in net income
of $9,040,642. The value of an individual Unit in the
Partnership increased from $4,435.47 at December 31, 1997 to
$4,788.38 at September 30, 1998.
For the Quarter and Nine Months Ended September 30, 1997
For the quarter ended September 30, 1997, the Partnership
recorded total trading revenues including interest income of
$13,483,740 and posted an increase in Net Asset Value per
Unit. The most significant gains were recorded from short
positions in the Malaysian ringgit as its value decreased
relative to the U.S. dollar throughout the quarter.
Additional currency gains were recorded during July as the
value of the U.S. dollar strengthened relative to most major
world currencies. A portion of the Partnership's overall
gains for the quarter was offset by losses recorded from
<PAGE>
transactions involving the Japanese yen and British pound as
the value of these currencies moved without consistent
direction during a majority of the quarter. Total expenses
for the three months ended September 30, 1997 were
$1,833,665, resulting in net income of $11,650,075. The
value of an individual Unit in the Partnership increased
from $3,536.98 at June 30, 1997 to $3,956.69 at September
30, 1997.
For the nine months ended September 30, 1997, the
Partnership recorded total trading revenues including
interest income of $27,134,885 and posted an increase in Net
Asset Value per Unit. The most significant gains were
recorded from a strong upward trend in the value of the U.S.
dollar versus most other major currencies during January and
February. As a result, gains were recorded from short
positions in the Singapore dollar, the German mark, the
French and Swiss francs, and the Japanese yen. The U.S.
dollar also strengthened relative to the German mark,
Malaysian ringgit and Singapore dollar throughout a majority
of the third quarter, thus resulting in additional gains for
the Partnership's short foreign currency positions. A
portion of the Partnership's overall gains was offset by
losses experienced from transactions involving the British
pound as its value moved in a trendless pattern relative to
other world currencies during the first nine months of the
year.
<PAGE>
Total expenses for the nine months ended September 30, 1997
were $5,526,515, resulting in net income of $21,608,370.
The value of an individual Unit in the Partnership increased
from $3,204.66 at December 31, 1996 to $3,956.69 at
September 30, 1997.
Year 2000 Problem - Commodity pools, like financial and
business organizations and individuals around the world,
depend on the smooth functioning of computer systems. Many
computer systems in use today cannot recognize the computer
code for the year 2000, but revert to 1900 or some other
date. This is commonly known as the "Year 2000 Problem".
The Partnership could be adversely affected if computer
systems used by it or any third party with whom it has a
material relationship do not properly process and calculate
date-related information and data concerning dates on or
after January 1, 2000. Such a failure could have a negative
impact on the handling or determination of futures trades
and prices and the services provided to the Partnership.
MSDW began its planning in response to the Year 2000 Problem
in 1995 and currently has several hundred employees working
on such response. It has developed its own Year 2000
compliance plan to deal with the problem and had the plan
approved by the company's executive management, Board of
Directors and Information Technology Department. Demeter is
<PAGE>
coordinating with MSDW in taking steps that both believe are
reasonably designed to address the Year 2000 Problem with
respect to Demeter's computer systems that relate to the
Partnership. This includes hardware and software upgrades,
systems consulting and computer maintenance.
Beyond the challenge facing internal computer systems, the
systems failure of any of the third parties with whom the
Partnership has a material relationship - the futures
exchanges and clearing organizations through which it
trades, Carr, or the Trading Advisors - could result in a
material financial risk to the Partnership. Regarding the
futures exchanges, all U.S. futures exchanges will be
subject to the monitoring of the CFTC for their Year 2000
preparedness and the major foreign futures exchanges are
also expected to be subject to market-wide testing of their
Year 2000 compliance during 1999. With respect to Carr and
the Trading Advisors, Demeter intends to monitor their
progress throughout 1999 in their Year 2000 compliance and,
where applicable, to test its external interface with Carr
and the Trading Advisors.
Finally, MSDW has begun developing various "contingency
plans" in the event that the systems of such third parties
fail, and Demeter intends to consult closely with MSDW in
implementing those plans. MSDW has also recently reported
<PAGE>
that its development of such contingency plans is proceeding
on schedule. Despite the best efforts of both Demeter and
MSDW, however, there can be no assurance that the above
steps will be sufficient to avoid any adverse impact to the
Partnership, whether from failures in their own computer
systems or those of Carr, the Trading Advisors or any other
third party.
Risks Associated with the Euro - On January 1, 1999, eleven
countries in the European Union intend to establish fixed
conversion rates on their existing sovereign currencies and
convert to a common single currency (the "euro"). During a
three-year transition period, the existing sovereign
currencies will continue to exist but only as a fixed
denomination of the euro. Conversion to the euro will
prevent the Trading Advisors from trading in certain
currencies and thereby limit their ability to take advantage
of potential market opportunities that might otherwise have
existed had separate currencies been available to trade, and
could result in losses with respect to those positions.
<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 Dean
Witter Cornerstone III ("Cornerstone III") 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, the Partnership, (collectively with Cornerstone I,
Cornerstone II and Cornerstone III, 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
February 6, 1987 and currently continues, with 100,628.206
Units sold through September 30, 1998. Through September
30, 1998, the Cornerstone Funds have sold an aggregate of
<PAGE>
235,414.617 Units, leaving an aggregate of 14,585.383 Units
in the Cornerstone Funds remaining available for sale as of
October 1, 1998.
The aggregate price of Units sold through September 30, 1998
with respect to the Partnership is $168,034,669.
Item 6. - EXHIBITS AND REPORTS ON FORM 8-K
Reports on Form 8-K - No reports have been filed for the
quarter ended September 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 IV
(Registrant)
By: Demeter Management
Corporation
(General Partner)
November 16, 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 IV and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 120,171,089
<SECURITIES> 0
<RECEIVABLES> 370,577<F1>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 122,883,272<F2>
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 122,883,272<F3>
<SALES> 0
<TOTAL-REVENUES> 15,607,755<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,567,113
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 9,040,642
<INCOME-TAX> 0
<INCOME-CONTINUING> 9,040,642
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,040,642
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Receivables include interest receivable of $370,577.
<F2>In addition to cash and receivables, total assets include net
unrealized gain on open contracts of $2,341,606.
<F3>Liabilities include redemptions payable of $780,938, accrued
management fees of $407,708, common administrative expenses payable
of $163,206 and incentive fees payable of $1,563,123.
<F4>Total revenues include realized trading revenue of $11,646,648, net
change in unrealized of $526,494 and interest income of $3,434,613.
</FN>
</TABLE>
