Dean Witter Spectrum Series
Monthly Report
June 1998
Dear Limited Partner:
The Net Asset Value per Unit for each of the four Dean Witter Spectrum
Funds as of June 30, 1998 was as follows:
Funds N.A.V. % change for month
Spectrum Global Balanced $14.28 .03%
Spectrum Select $20.63 .94%
Spectrum Strategic $ 8.93 - .83%
Spectrum Technical $14.33 -1.15%
Spectrum Global Balanced, a balanced portfolio of stocks, bonds and managed
futures utilizing the futures, options and forward markets, recorded flat
performance for the month. In the stock index futures portion of the
portfolio, gains were recorded from long positions in S&P 500 Index futures
as domestic equity prices moved higher during the latter half of June.
Additional gains were recorded in the managed futures component from short
positions in nickel, copper and zinc futures as base metal prices moved
lower. Smaller gains were recorded from short crude oil futures positions.
These gains were offset by losses experienced in the currency markets from
transactions involving the Singapore dollar. Additional currency losses
were recorded from crossrate transactions involving the Japanese yen
relative to the Australian dollar and Swiss franc. In the global bond
futures portion of the portfolio losses from long positions in Australian
and Japanese government bond futures, as prices in these markets moved
lower, offset gains recorded from long positions in U.S. and European bond
futures.
In Spectrum Select, a Fund managed by three trading advisors who employ
long-term technical trend-following trading systems across a diverse
portfolio of futures, options and forward markets, gains were recorded due
primarily to a significant decline in the value of the South African rand
relative to the U.S. dollar. As a result, the Fund profited from short
South African rand positions. Additional currency gains were recorded from
short positions in the Canadian dollar and Swiss franc, as the value of
these currencies moved lower relative to the U.S. dollar, and from long
British pound positions as the value of the pound strengthened during the
month. In the energy markets, short positions in crude oil and unleaded
gas futures profited as energy prices declined due to increased supply
early in the month. Additional gains were recorded in the metals markets
from short positions in nickel, aluminum and zinc futures as base metal
prices also moved lower. Smaller gains were recorded in soft commodities
from short positions in coffee futures and long positions in cotton
futures. These gains were partially offset by losses experienced in
agricultural futures from short positions in soybean, corn and soybean
product futures as prices moved sharply higher late in the month after
showing signs of trending lower previously. Smaller losses were
experienced in financial futures primarily from long Australian interest
rate futures positions as prices in this market moved lower early in the
month.
In Spectrum Strategic, a Fund managed by three trading advisors who employ
fundamental trading methodologies in a diverse portfolio of futures,
options and forwards markets, losses were experienced primarily from long
crude oil futures positions as oil prices moved downward early in the month
on reports of abundant supply. Losses were also recorded from trading
British interest rate and stock index futures as prices in these markets
experienced short-term volatility. Smaller losses experienced in this
market complex from long positions in Japanese and Australian bond futures,
as prices in these markets moved lower during mid-month, offset gains from
long positions in U.S. Treasury bond futures, as domestic bond prices
finished the month higher. A portion of the Fund's overall losses for the
month was offset by gains recorded in currencies from short Japanese yen
positions as the value of the yen fell versus the U.S. dollar early in the
month. Smaller currency gains were recorded from long British pound
positions. Additional gains recorded from long silver and lumber futures
positions also helped to offset the losses for the month.
<PAGE>
In Spectrum Technical, a Fund managed by three trading advisors who employ
long-term technical trend-following trading systems across a diverse
portfolio of futures, options and forward markets, losses were experienced
primarily from long positions in Australian and Japanese government bond
futures as prices in these markets moved lower early in the month. These
losses were partially offset by gains from long positions in European and
U.S. financial futures. In agricultural futures, losses were recorded from
short positions in corn and soybean futures as prices moved higher after
showing signs of trending lower previously. In metals, losses recorded
from short silver and gold futures positions, as precious metals prices
finished the month higher, more than offset gains from short aluminum and
nickel futures positions. A portion of these losses was offset by gains
recorded in the energy markets as short crude oil futures positions
profited from a price decline early in the month. Short coffee futures
positions were also profitable as coffee prices moved lower. In
currencies, gains from short South African rand and Japanese yen positions,
as the value of these currencies weakened relative to the U.S. dollar, more
than offset losses from short positions in the British pound and long
positions in the German mark.
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 Dean Witter Financial Advisors.
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,
Mark J. Hawley
President
Demeter Management Corporation
General Partner
<PAGE>
<TABLE>
Historical Fund Performance
Presented below is the percentage change in Net Asset Value per Unit from
the start of each calendar year the Fund has traded. Also provided is the
inception-to-date return and the annualized return since inception for the
Fund. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
<CAPTION>
Funds Year Return
<S> <C> <C>
Spectrum Global Balanced
1994 (2 months) -1.7%
1995 22.8%
1996 -3.7%
1997 18.2%
1998 (6 months) 3.9%
Inception-to-Date Return: 42.8%
Annualized Return: 10.2%
___________________________________________________________________________
__________
Spectrum Select
1991 (5 months) 31.2%
1992 -14.4%
1993 41.6%
1994 -5.1%
1995 23.6%
1996 5.3%
1997 6.2%
1998 (6 months) -1.1%
Inception-to-Date Return 106.3%
Annualized Return 11.0%
___________________________________________________________________________
__________
Spectrum Strategic
1994 (2 months) 0.1%
1995 10.5%
1996 -3.5%
1997 0.4%
1998 (6 months) -16.6%
Inception-to-Date Return: -10.7%
Annualized Return: -3.0%
___________________________________________________________________________
__________
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Spectrum Technical
1994 (2 months) -2.2%
1995 17.6%
1996 18.4%
1997 7.5%
1998 (6 months) -2.1%
Inception-to-Date Return: 43.3%
Annualized Return: 10.3%
___________________________________________________________________________
__________
</TABLE>
<PAGE>
<TABLE>
Statements of Operations
For the Month Ended June 30, 1998
(Unaudited)
<CAPTION>
Dean Witter Spectrum Global Balanced Dean Witter
Spectrum Select L.P.
Percent of
Percent of
June 1, 1998 June 1,
1998
Beginning Net Beginning
Net
Amount Asset Value Amount
Asset Value
$ % $
REVENUES
<S> <C> <C>
<C> <C>
Trading Profit (Loss):
Realized 1,266,941 4.00 2,882,960
1.86
Net change in unrealized (1,240,207) (3.92) (654,360)
(.42)
Total Trading Results 26,734 .08 2,228,600
1.44
Interest Income (DWR) 135,817 .43 561,726
.36
Total Revenues 162,551 .51 2,790,326
1.80
EXPENSES
Brokerage commissions (DWR) 121,406 .38 938,360
.61
Management fees 32,991 .10 388,287
.25
Total Expenses 154,397 .48 1,326,647
.86
NET INCOME (LOSS) 8,154 .03 1,463,679
.94
Statements of Changes in Net Asset Value
For the Month Ended June 30, 1998
(Unaudited)
Dean Witter Spectrum Global Balanced Dean Witter
Spectrum Select L.P.
Units Amount Per Unit Units
Amount Per Unit
$ $
$ $
<S> <C> <C> <C> <C>
<C> <C>
Net Asset Value,
June 1, 1998 2,217,739.594 31,671,328 14.28 7,599,180.753
155,314,777 20.44
Net Income (Loss) - 8,154 - -
1,463,679 .19
Redemptions (11,284.693) (161,145) 14.28 (112,607.200)
(2,323,087) 20.63
Subscriptions 198,962.682 2,841,187 14.28 169,117.163
3,488,888 20.63
Net Asset Value,
June 30, 1998 2,405,417.583 34,359,524 14.28 7,655,690.716
157,944,257 20.63
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
Statements of Operations
For the Month Ended June 30, 1998
(Unaudited)
<CAPTION>
Dean Witter Spectrum Strategic Dean Witter
Spectrum Technical
Percent of
Percent of
June 1, 1998 June 1,
1998
Beginning Net Beginning
Net
Amount Asset Value Amount
Asset Value
$ % $
REVENUES
<S> <C> <C> <C>
<C>
Trading Profit (Loss):
Realized (770,060) (1.44) 17,908,263
8.80
Net change in unrealized 634,222 1.19 (19,071,119)
(9.37)
Total Trading Results (135,838) (.25) (1,162,856)
(.57)
Interest Income (DWR) 187,769 .35 721,597
.35
Total Revenues 51,931 .10 (441,259)
(.22)
EXPENSES
Brokerage commissions (DWR) 322,563 .61 1,229,914
.60
Management fees 172,856 .32 678,574
.33
Total Expenses 495,419 .93 1,908,488
.93
NET INCOME (LOSS) (443,488) (.83) (2,349,747)
(1.15)
Statements of Changes in Net Asset Value
For the Month Ended June 30, 1998
(Unaudited)
Dean Witter Spectrum Strategic Dean Witter
Spectrum Technical
Units Amount Per Unit Units
Amount Per Unit
$ $
$ $
<S> <C> <C> <C> <C>
<C> <C>
Net Asset Value,
June 1, 1998 5,927,994.703 53,389,834 9.01 14,045,897.239
203,572,043 14.49
Net Income (Loss) - (443,488) (.08) -
(2,349,747) (.16)
Redemptions (141,603.177) (1,264,516) 8.93 (149,653.416)
(2,144,533) 14.33
Subscriptions 146,688.998 1,309,933 8.93 470,771.323
6,746,153 14.33
Net Asset Value,
June 30, 1998 5,933,080.524 52,991,763 8.93 14,367,015.146
205,823,916 14.33
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
Dean Witter Spectrum Series L.P.
Notes to Financial Statements
(Unaudited)
1. Summary of Significant Accounting Policies
Organization , Dean Witter Spectrum Global Balanced L.P. (formally known as
Dean Witter Spectrum Balanced L.P.)("Spectrum Balanced"), Dean Witter
Spectrum Select L.P. (formally known as Dean Witter Select Futures Fund
L.P.) ("Spectrum Select"), Dean Witter Spectrum Strategic L.P. ("Spectrum
Strategic") and Dean Witter Spectrum Technical L.P. ("Spectrum Technical")
(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 commodities interests, including foreign currencies,
financial instruments, precious and industrial metals, energy products, and
agriculturals. The commodity broker for the Partnership is Carr Futures
Inc. ("Carr"). The general partner for each Partnership is Demeter
Management Corporation ("Demeter"). Demeter is a wholly-owned subsidiary
of Morgan Stanley Dean Witter & Co. ("MSDW").
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.
Basis of Accounting , The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts in the financial
statements.
Revenue Recognition - Commodity futures contracts and forward contracts on
foreign currencies are open commitments until settlement date. They are
valued at market and the resulting unrealized gains and losses are
reflected in income. Monthly, Dean Witter Reynolds, Inc. ("DWR") pays each
Partnership interest income based upon 80% of its average daily Net Assets
for the month in the case of Spectrum Select, Spectrum Strategic and
Spectrum Technical and 100% in the case of Spectrum Balanced. The interest
rate is equal to a prevailing rate on U.S. Treasury Bills. For purposes of
such interest payments, Net Assets do not include monies due the
Partnership on forward contracts and other commodity 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 Commissions and Related Transaction Fees and Costs , Brokerage
commissions for Spectrum Balanced are accrued at a monthly rate of 1/12 of
4.60% of the Net Assets as of the first day of each month.
Brokerage commissions for Spectrum Select, Spectrum Strategic and Spectrum
Technical are accrued at a monthly rate of 1/12 of 7.25% of the Net Assets
as of the first day of each month.
Such fees will cover all brokerage commissions, transaction fees and costs
and ordinary administrative and continuing offering expenses.
Operating Expenses - Spectrum Balanced, Spectrum Strategic and Spectrum
Technical, incur monthly management fees and may incur incentive fees. All
common administrative and continuing offering expenses including legal,
auditing, accounting, filing fees and other related expenses are borne by
DWR through the brokerage commissions paid by each Partnership.
<PAGE>
Dean Witter Spectrum Series L.P.
Notes to Financial Statements -
(Continued)
Spectrum Select bears all operating expenses related to its trading
activities, to a maximum of one fourth of 1% annually of the Partnership's
average month end Net Assets. In addition, the Partnership incurs a monthly
management fee and may incur an incentive fee. Demeter bears all other
operating expenses. Effective with the June 1, 1998 change to a flat rate
brokerage commission, all common administrative and continuing offering
expenses will be borne by DWR through the brokerage commissions.
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 redemption 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 as of the opening of business
on the first day of the month. No selling commissions or charges related
to the continuing offering of Units will be paid by the Limited Partners or
the Partnership. DWR will pay all such costs.
Redemptions , Limited Partners may redeem some or all of their Units at
100% of the Net Asset Value Per Unit as of the end of the last day that is
six months after the closing at which a person becomes a Limited Partner,
upon five business days advance notice by redemption form to Demeter.
Thereafter, Units may be redeemed on or prior to the last day of the
twelfth month after such Units were purchased will be subject to a
redemption charge equal to 2% of the Net Asset Value of a Unit on the date
of such redemption. Units redeemed after the last day of the twelfth month
and on or prior to the last day of the twenty-fourth month after which such
units were purchased will be subject to a redemption charge equal to 1% of
the Net Asset Value of a Unit on the date of such redemption. Units
redeemed after the last day of the twenty-fourth month after which such
Units were purchased will not be subject to a redemption charge. The
foregoing redemption charges will be paid to DWR. Redemptions must be made
in whole Units, in a minimum amount of 50 Units, unless a Limited Partner
is redeeming his entire interest in a Partnership.
Exchanges - On the last day of the first month, which occurs more than six
months after a person first becomes a Limited Partner in any of the
Partnerships, and the end of each month thereafter, Limited Partners may
exchange their investment among the Partnerships (subject to certain
restrictions outlined in the Limited Partnership Agreement) without paying
additional charges.
Dissolution of the Partnership - Spectrum Balanced, Spectrum Strategic and
Spectrum Technical, will terminate on December 31, 2035 and Spectrum Select
will terminate on December 31, 2025 regardless of their financial condition
at such time, or at an earlier date if certain conditions occur as defined
in each Partnership's Limited Partnership Agreement.
2. Related Party Transactions
Each Partnership pays brokerage commissions to DWR as described in Note 1.
Each 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 as described in
Note 1.
<PAGE>
Dean Witter Spectrum Series L.P.
Notes to Financial Statements
(Continued)
Each Partnership is authorized to issue and sell Units at Monthly Closings
at a price per Unit equal to 100% of the Net Asset Value of a Unit of such
Partnership as of the close of business on the date of such monthly
closing.
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:
Dean Witter Spectrum Global Balanced L.P.
RXR, Inc.
Dean Witter Spectrum Select L.P.
EMC Capital Management, Inc.
Rabar Market Research, Inc.
Sunrise Capital Management, Inc.
Dean Witter Spectrum Strategic L.P.
Blenheim Investments, Inc.
Stonebrook Capital Management, Inc.
Willowbridge Associates Inc.
Dean Witter Spectrum Technical L.P.
Campbell & Company, Inc.
Chesapeake Capital Corporation
John W. Henry & Company, Inc. ("JWH")
Compensation to the trading advisors by the Partnerships consists of a
management fee and an incentive fee as follows:
Management Fee - The management fee is accrued at the rate of 5/48 of 1% of
the Net Assets on the first day of each month (a 1.25% annual rate) to
Spectrum Balanced.
The management fee is accrued at the rate of 1/3 of 1% per month of the Net
Assets allocated to each trading advisor on the first day of each month (a
4% annual rate) to Spectrum Technical.
Prior to June 1, 1998, the management fee was accrued at the rate of one fourth
of 1% of the Partnership's adjusted net assets, as defined in the Limited
Partnership Agreement, as of the last day of each month (a 3% annual rate)
to Spectrum Select. Effective June 1, 1998, the management fee is accrued
at the rate of one fourth of 1% per month of the net Assets allocated to each
trading advisor on the first day of each month (a 3% annual rate).
Prior to June 1, 1998, the management fee was accrued at the rate of 1/3 of
1% per month of the Net Assets allocated to each trading advisor on the
first day of each month (a 4% annual rate) to Spectrum Strategic.
Effective June 1, 1998, management fees are accrued at a rate of 1/12 of 4%
of the Net Assets allocated to each of Blenheim and Willowbridge on the
first day of each month, and 1/12 of 3% of the Net Assets allocated to
Stonebrook on the first day of each month.
<PAGE>
Dean Witter Spectrum Series L.P.
Notes to Financial Statements -
(Continued)
Incentive Fee , Spectrum Balanced and Spectrum Strategic each will pay a
monthly incentive fee equal to 15% of the "Trading Profits" as defined in
the Limited Partnership Agreement, experienced with respect to each trading
manager's allocated Net Assets as of the end of each calendar month.
Prior to June 1, 1998, Spectrum Select paid, when applicable, a quarterly
incentive fee to each trading advisor equal to 17.5% of the trading
advisors "Trading Profits" experienced by the Net Assets allocated to such
trading advisor as of the end of each calendar quarter. Effective June 1,
1998 the incentive fees will be revised to 15% of "Trading Profits" and
will be paid on a monthly basis.
Prior to June 1, 1998, Spectrum Technical paid a monthly incentive fee
equal to 15% of the "Trading Profits" as defined in the Limited Partnership
Agreement, experienced with respect to each trading manager's allocated Net
Assets as of the end of each calendar month. Effective June 1, 1998,
incentive fees for Spectrum Technical will be revised to 15% of the
"Trading Profits" experienced with respect to the Net Assets allocated to
Campbell and JWH as of the end of each calendar month, and 19% of the
"Trading Profits" experienced with respect to the Net Assets allocated to
Chesapeake as of the end of each calendar month.
For all Partnerships, if a trading advisor has experienced "Trading losses"
with respect to its allocated Net Assets at the time of a supplemental
closing, the trading advisor must earn back such losses plus a pro-rata
amount related to the funds allocated to the trading advisor at
supplemental closing before the trading advisor is eligible for an
incentive fee.
4. Legal Matters
On September 6, 10, and 20, 1996 and on March 13, 1997, similar purported
class actions were filed in the Superior Court of the State of California,
County of Los Angeles, on behalf of all purchasers of interests in limited
partnership commodity pools sold by DWR. Named defendants include DWR,
Demeter, Dean Witter Futures & Currency Management Inc., MSDW (all such
parties referred to hereafter as the "Dean Witter Parties"), certain
limited partnership commodity pools of which Demeter is the general
partner, and certain trading advisors (including JWH) to those pools. On
June 16, 1997, the plaintiffs in the above actions filed a consolidated
amended complaint, alleging, among other things, that the defendants
committed fraud, deceit, negligent misrepresentation, various violations of
the California Corporations Code, intentional and negligent breach of
fiduciary duty, fraudulent and unfair business practices, unjust
enrichment, and conversion in the sale and operation of the various limited
partnership commodity pools. Similar purported class actions were also
filed on September 18 and 20, 1996, in the Supreme Court of the State of
New York, New York County, and on November 14, 1996 in the Superior Court
of the State of Delaware, New Castle County against the Dean Witter Parties
and certain trading advisors (including JWH) on behalf of all purchasers of
interests in various limited partnership commodity pools sold by DWR. A
consolidated and amended complaint in the action pending in the Supreme
Court of the State of New York was filed on August 13, 1997, alleging that
the defendants committed fraud, breach of fiduciary duty, and negligent
misrepresentation in the sale and operation of the various limited
partnership commodity pools. On December 16, 1997, upon motion of the
plaintiffs, the action pending in the Superior Court of the State of
Delaware was voluntarily dismissed without prejudice. The complaints seek
unspecified amounts of compensatory and punitive damages and
<PAGE>
Dean Witter Spectrum Series L.P.
Notes to Financial Statements -
(Concluded)
other relief. It is possible that additional similar actions may be filed
and that, in the course of these actions, other parties could be added as
defendants. The Dean Witter Parties believe that they have strong defenses
to, and they will vigorously contest, the actions. Although the ultimate
outcome of legal proceedings cannot be predicted with certainty, it is the
opinion of management of the Dean Witter Parties that the resolution of the
actions will not have a material adverse effect on the financial condition
or the results of operations of any of the Dean Witter Parties.
