Spectrum Select L.P.
April 1998
Monthly Report
This Monthly Report supplements
the Spectrum Funds' Prospectus dated
April 25, 1997 and the Prospectus Supplement
Dated May 12, 1998.
Dean Witter Spectrum Select L.P.
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.
Year Return
1991 (5 months) 31.2%
1992 -14.4%
1993 41.6%
1994 -5.1%
1995 23.6%
1996 5.3%
1997 6.2%
1998 (4 months)
- -3.7%
Inception-to-Date Return:100.8%
Annualized Return: 10.9%
<PAGE>Dean Witter Spectrum Select L.P.
Monthly Report
April 1998
Dear Limited Partner:
The Net Asset Value per Unit for the Dean Witter Spectrum
Select L.P. as of April 30, 1998 was $20.08, down 6.72% for
the month.
The Fund recorded losses for the month primarily from long
global bond futures positions as European, Australian and
Japanese interest rate futures prices reversed lower after
trending higher previously. Additional losses were recorded
from trading U.S. interest rate futures as domestic bond
prices moved in a choppy pattern during the month. In the
currency markets, losses were recorded from short positions
in the Swiss franc and German mark as the value of these
currencies increased versus the U.S. dollar. Additional
currency losses were recorded from long British pound
positions as the value of the pound decreased relative to
other major currencies. Losses were also experienced in the
metals markets from short positions in copper and aluminum
futures, as well as from long natural gas futures positions.
A portion of the Fund's losses for the month was offset by
gains from short corn and wheat futures positions as prices
in these markets declined. Additional gains were recorded
in soft commodities from short positions in sugar futures as
the price of sugar declined during the month.
As reported in the March 1998 Monthly Report, beginning May
1998, Select Futures Fund became part of the Dean Witter
Spectrum Series of Funds. As a consequence of becoming part
of the Spectrum Series of Funds, Select Futures Fund has
changed its name to Dean Witter Spectrum Select L.P. In
addition, other beneficial changes will be made to the Fund,
including an anticipated reduction and change in the
structure of the brokerage commissions charged to the Fund,
and a revision in each trading advisor's incentive fee from
a 17.5% quarterly incentive fee to a 15% monthly incentive
fee. Additionally, investors may exchange Units of one
Spectrum Fund for Units of another Spectrum Fund at any
month-end without incurring any redemption or other charges.
The specifics of these and other changes will be set forth
in the Fund's new Prospectus, which will be available soon.
Also, so that the Net Asset Value of the Fund's Units will
be more in line with the values of the Units of the other
Spectrum Series Funds which were initially issued at $10 per
Unit, the Fund's Units were split 100 to 1 as of the close
of business on April 30, 1998. This did not result in any
change in aggregate Net Asset Value of the Units held by a
Limited Partner. For example, if a Limited Partner held
five Units of the Fund at the Net Asset Value Per Unit of
$2,008.20, these five Units were converted to 500 Units with
a Net Asset Value Per Unit of $20.08.
The General Partner believes that all of the foregoing
changes will be beneficial to Limited Partners.
Nonetheless, in view of these changes, Limited Partners are
reminded that, in accordance with the terms of the Fund's
Limited Partnership Agreement, Limited Partners have a right
to redeem their Units, and that Limited Partners owing more
than 50% of the outstanding Units of the Fund may vote to
remove and replace the General Partner and take certain
actions, without the General Partner's consent (see Section
15 (c) of the Fund's Limited Partnership Agreement on page A-
19 of the Fund's October 17 , 1996 Prospectus). With regard
to redemptions, because of the proposed changes, the General
Partner and DWR have determined to waive any applicable
redemption charges, as well as the six month minimum holding
period, for any Units redeemed as of May 31 and June 30,
1998.
Please note, after the close of business on April 30, 1998
the Net Aset Value per Unit of the Fund was re-valued to
$20.08. All investors in the Fund prior to April 30 have
had their units increased in a corresponding amount to
reflect this re-valuation.
<PAGE>
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 Account Executive.
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
<PAGE>
<TABLE>
Dean Witter Spectrum Select .P.
Statement of Operations
For the Month Ended April 30, 1998
(Unaudited)
<CAPTION>
Percent of
March 1, 1998
Amount Net Asset Value
$ %
REVENUES
<S> <C> <C>
Trading Profit (Loss)
Realized (1,281,627) (.76)
Net change in unrealized(9,369,048) (5.58)
Total Trading Results(10,650,675) (6.34)
Interest income (DWR) 558,086 .33
Total Revenues (10,092,589) (6.01)
Expenses
Brokerage commissions (DWR)676,050 .40
Management fees 392,334 .23
Transaction fees and costs109,690 .07
Administrative expenses 13,000 .01
Total Expenses 1,191,074 .71
NET LOSS (11,283,663) (6.72)
Statement of Changes in Net Asset Value
For the Month Ended April 30, 1998
(Unaudited)
Percent of
March 31,
1998
Amount Per Unit
Net Asset Value
$ $
%
<S> <C> <C> <C>
Net Asset Value,
March 31, 1998
(77,951.268 Units) 167,825,118 2,152.95
100.00
Net Loss (11,283,663) (144.75)
(6.72)
Redemptions
(1,273.890 Units) (2,558,223) 2,008.20
(1.53)
Net Asset Value,
April 30, 1998
(76,677.378 Units) 153,983,232 2,008.20
91.75
Units Split and Re-valued
On April 30, 1998
(7,667,737.800 Units) 153,983,232 20.08
91.75
The accompanying notes are an integral part of these
financial statements.
</TABLE>
<PAGE>
Dean Witter Spectrum Select L.P.
Notes to Financial Statements
(Unaudited)
1. Summary of Significant Accounting Policies
Organization - Dean Witter Spectrum Select L.P. (formally
known as Dean Witter Select Futures Fund L.P.) (the
"Partnership") is a limited partnership organized to engage
in the speculative trading of commodity futures contracts,
commodity options contracts and forward contracts on foreign
currencies. The general partner for the Partnership is
Demeter Management Corporation ("Demeter"). Demeter is a
wholly-owned subsidiary of Morgan Stanley Dean Witter & Co.
("MSDW"). Demeter has retained EMC Capital Management, Inc.
("EMC"), Rabar Market Research, Inc. ("Rabar") and Sunrise
Commodities Management, Inc. ("Sunrise") as the trading
advisors of the Partnership.
On July 31, 1997, Dean Witter Reynolds Inc. ("DWR"), a
wholly-owned subsidiary of MSDW, closed the sale of its
institutional futures business and foreign currency trading
operations to Carr Futures Inc. ("Carr"), a subsidiary of
Credit Agricole Indosuez. Following the sale, Carr became
the commodity broker for most of the Partnership's
transactions and is the counterparty on the Partnership's
foreign currency trades. DWR will continue to serve as a
non-clearing commodity broker for the partnership with Carr
providing all clearing services for Partnership
transactions.
Demeter is required to maintain a 1% minimum interest in the
equity of the 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, commodity
options 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, DWR pays the Partnership
interest income based upon 80% of the average daily Net
Assets for the month at a rate equal to the average yield on
13-week U.S. Treasury Bills issued during such month. 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
- - The Partnership accrues brokerage commissions based on a
half-turn basis at 80% of DWR's published non-member rates.
Transaction fees and costs are accrued on a half-turn basis.
Brokerage commissions and transaction fees chargeable to the
Partnership have been capped at .65% per month of the
Partnership's month-end Net Assets as defined in the Limited
Partnership Agreement allocated to each such trading
advisor. Effective June 1, 1998, brokerage fees of the
partnership will be charged at a flat monthly rate of 1/12
of 7.25% of Net Assets as of the first day of each month.
Operating Expenses - The Partnership bears all operating
expenses related to its trading activities, to a maximum of
1/4 of 1% annually of the Partnership's average month end
Net Assets.
<PAGE>
Dean Witter Spectrum Select L.P.
Notes to Financial Statements - (Continued)
These include filing fees, clerical, administrative,
auditing, accounting, mailing, printing, and other
incidental operating expenses as permitted by the Limited
Partnership Agreement. In addition, the Partnership incurs
a monthly management fee and may incur an incentive fee.
Demeter bears all other operating expenses.
Redemptions - Limited Partners may redeem some or all of
their Units at 100% of the Net Asset Value Per Unit as of
the last day of any month that is at least six months after
the closing at which a client first became a limited
partner, upon five business days advance notice by
redemption form to Demeter. However, any Units redeemed at
or prior to the end of the twenty fourth full months
following the closing at which such person first becomes a
limited partner, may be assessed a redemption charge equal
to 3%, 2% or 1%, respectively, of the Net Asset Value per
Unit on the date of such redemption. Limited Partners who
obtained their units via an exchange from another DWR
sponsored commodity pool will not be subject to the six
month holding period of the redemption charges.
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.
Distributions - Distributions, other than on redemptions of
Units, are made on a pro-rata basis at the sole discretion
of Demeter. No distributions have been made to date.
Continuing Offering - Units of each Partnership are offered
at a price equal to 100% of the Net Asset Value per Unit 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.
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 the Partnership's revenues
and expenses for income tax purposes.
Dissolution of the Partnership - The Partnership will
terminate on December 31, 2025 or at the earliest date if
certain conditions set forth in the Limited Partnership
Agreement occur.
2. Related Party Transactions
The Partnership's cash is on deposit with DWR in commodity
trading accounts to meet margin requirements as needed. DWR
pays interest on these funds as described in Note 1. Under
its Customer Agreement with DWR, the Partnership pays DWR
brokerage commissions as described in Note 1.
3. Trading Advisors
Compensation to EMC, Rabar and Sunrise consists of a
management fee and an incentive fee as follows:
Management Fee - The Partnership pays a monthly management
fee equal to 1/4 of 1% per month of the Partnership's
adjusted Net Assets, as defined, as of the last day of each
month.
Incentive Fee - The Partnership will pay a quarterly
incentive fee to each trading advisor equal to 17.5% of the
trading advisor's "Trading Profits," as defined in the
Limited Partnership Agreement, experienced by the Net Assets
allocated to such trading advisor as of the end of each
calendar quarter. Effective June 1, 1998, the incentive fee
will be revised to 15% of "Trading Profits", and will be
payable on a monthly basis.
<PAGE>
Dean Witter Spectrum Select L.P.
Notes to Financial Statements - (Concluded)
If a trading advisor has experienced "Trading Losses" with
respect to its allocated Net Assets at the time of the
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 the supplemental closing
before the trading advisor is eligible for an incentive fee.
Such incentive fee is accrued in each month in which
"Trading Profits" occurs. In those months in which "Trading
Profits" is negative, previous accruals, if any, during the
incentive period will be reduced. In those instances in
which a Limited Partner redeems an investment, the incentive
fee (if earned through a redemption date) is to be paid to
such advisor on those redemptions in the month of such
redemptions.
4. Legal Matters
On September 6, 10, and 20, 1996, 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 and Currency Management Inc., MSDW (all
such parties referred to hereafter as the "Dean Witter
Parties"), the Partnership, certain other limited
partnership commodity pools of which Demeter is the general
partner, and certain trading advisors 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 on behalf of all purchasers of interests in various
limited partnership commodity pools, including the
Partnership, 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 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 and
the Partnership 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
or the Partnership.
