Morgan Stanley Dean Witter Spectrum Series
Monthly Report
May 1999
Dear Limited Partner:
The Net Asset Value per Unit for each of the four Morgan Stanley Dean
Witter Spectrum Funds as of May 31, 1999 was as follows:
Funds N.A.V. % change for month
Spectrum Global Balanced $15.81 -4.98%
Spectrum Select $23.56 -4.35%
Spectrum Strategic $10.62 -13.34%
Spectrum Technical $15.59 -5.02%
In Spectrum Global Balanced, a balanced portfolio of stocks, bonds and
managed futures, losses were recorded during May primarily in the global
stock index futures component of the balanced portfolio from long positions
in DAX, FTSE 100 and S&P 500 Index futures as most global equity prices
moved lower in response to the drop in U.S. bond prices during the month on
fears of higher interest rates in the U.S. In the currency markets, losses
were experienced from short positions in the European common currency, the
euro, and the Swiss franc versus the Japanese yen as the value of the yen
weakened on widening interest rate differentials between Japan and the
United States. Additional losses were recorded in the metals markets from
long positions in nickel and copper futures as base metal prices fell amid
a technical sell-off and as market participants ran out of patience waiting
for widely expected production cuts. In the energy markets, losses were
experienced from long positions in crude and gas oil futures as prices
decreased amid renewed concerns that refinery profit margins were not high
enough to sustain international crude prices. In the soft commodities
markets, losses were recorded from short sugar futures positions as prices
in this market moved higher during the month on technically-driven buying.
In the global interest rate futures component, losses were experienced from
long positions in U.S. interest rate futures as domestic bond prices
dropped sharply in reaction to a higher-than-expected rise in the Consumer
Price Index and comments by Federal Reserve Chairman Alan Greenspan that
continued economic expansion in the U.S. without significant signs of
inflation is unlikely. These losses were mitigated by gains from short
positions in Australian interest rate futures as prices in this market fell
due to the growing inflationary concerns in the U.S.
In Spectrum Select, a Fund managed by multiple trading advisors who employ
long-term technical trend-following trading strategies, losses were
recorded during May primarily in the currency markets from long positions
in the New Zealand dollar as its value moved lower versus the U.S. dollar
amid declining commodity prices and on news of the Federal Open Market
Committee's decision to tighten the Fed's monetary bias. In the metals
markets, losses were experienced from long positions in most base metal
futures as copper, nickel, zinc and aluminum prices moved significantly
lower during the last week of the month. The sharp decline in base metals
prices was largely attributed to a technical sell-off and as market
participants ran out of patience waiting for widely expected production
cuts. In the energy markets, losses were recorded from long futures
positions in crude oil and its refined products, unleaded gasoline and
heating oil, as oil prices decreased amid renewed concerns that refinery
profit margins were not high enough to sustain international crude prices
and on reports of a larger-than-expected rise in stockpiles. A portion of
the Fund's overall losses was offset by gains recorded in the global
interest rate futures markets from short positions in U.S. bond futures.
Domestic interest rate futures prices dropped sharply in reaction to a
higher-than-expected rise in the Consumer Price Index and comments by
Federal Reserve Chairman Alan Greenspan that continued economic expansion
in the U.S. without significant signs of inflation is unlikely. Smaller
gains were recorded in the soft commodities markets from long positions in
coffee futures as prices in this market increased on fears of cold weather
in Brazil, the world's largest coffee grower.
In Spectrum Strategic, a Fund managed by multiple trading advisors who
employ fundamental trading methodologies, losses were recorded during May
due primarily to losses recorded in the energy markets from long positions
in crude oil and unleaded gas futures as oil prices decreased amid renewed
concerns that refinery profit margins were not high enough to sustain
international crude prices. In the metals markets, losses were experienced
from long copper and aluminum futures positions as base metals prices fell
amid a technical sell-off and as market participants ran out of patience
waiting
<PAGE>
for widely expected production cuts. Additional losses were experienced in
the global stock index futures markets from long positions in Nikkei Index
futures as Japanese equity prices declined due to the prospects of an
interest rate hike in the U.S. and the dampening effect it would have on
export dependent Japanese companies. Smaller losses were experienced in
the currency markets from long positions in the euro relative to the U.S.
dollar as the value of the European common currency slid lower due to
concerns regarding European economic growth, on speculation that the
European Central Bank could lower interest rates and on news that the U.S.
Federal Reserve is adopting a tightening bias. A portion of the Fund's
overall losses was offset by gains in the global interest rate futures
markets from short positions in U.S. bond futures. Domestic interest rate
futures prices dropped sharply in reaction to a higher-than-expected rise
in the Consumer Price Index and comments by Federal Reserve Chairman Alan
Greenspan that continued economic expansion in the U.S. without significant
signs of inflation is unlikely. Smaller gains were recorded from long
positions in coffee futures as prices in this market increased on fears of
cold weather in Brazil, the world's largest grower.
In Spectrum Technical, a Fund managed by multiple trading advisors who
employ long-term technical trend-following trading systems, losses were
recorded during May primarily in the global stock index futures markets
from long positions in Nikkei Index futures as Japanese equity prices
declined due to the prospects of an interest rate hike in the U.S. and the
dampening effect it would have on export dependent Japanese companies.
Additional losses were experienced from long positions in Australian,
British and German stock index futures as most global equity prices moved
lower in response to fears of higher interest rates in the U.S. In the
energy markets, losses were recorded from long futures positions in crude
oil and its refined products, unleaded gasoline and heating oil, as oil
prices decreased amid renewed concerns that refinery profit margins were
not high enough to sustain international crude prices. In the metals
markets, losses were experienced from long copper and aluminum futures
positions as base metal prices fell amid a technical sell-off and as market
participants ran out of patience waiting for widely expected production
cuts. Smaller losses were experienced in the currency markets from short
British pound positions as the pound received a boost early in the month
versus the U.S. dollar amid a rise in the April Purchasing Managers' Index
(PMI) supporting recovery hopes in the UK and dampening expectations of an
interest rate cut by the Bank of England. A portion of the Fund's overall
losses was offset by gains recorded in the global interest rate futures
markets from short positions in U.S. bond futures. Domestic interest rate
futures prices dropped sharply in reaction to a higher-than-expected rise
in the Consumer Price Index and comments by Federal Reserve Chairman Alan
Greenspan that continued economic expansion in the U.S. without significant
signs of inflation is unlikely. Gains were also recorded in the
agricultural markets from short positions in soybean futures as prices
declined throughout the month due to favorable planting forecasts and a
bearish USDA supply-demand report.
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 Morgan Stanley Dean Witter Financial
Advisor.
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,
Robert E. Murray
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 -3.6%
1997 18.2%
1998 16.4%
1999 (5 months) -1.2%
Inception-to-Date Return: 58.1%
Annualized Return: 10.5%
___________________________________________________________________________
__________
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 14.2%
1999 (5 months) -
1.0%
Inception-to-Date Return: 135.6%
Annualized Return 11.6%
___________________________________________________________________________
__________
Spectrum Strategic
1994 (2 months) 0.1%
1995 10.5%
1996 -3.5%
1997 0.4%
1998 7.8%
1999 (5 months) -8.1%
Inception-to-Date Return: 6.2%
Annualized Return: 1.3%
___________________________________________________________________________
__________
Spectrum Technical
1994 (2 months) -2.2%
1995 17.6%
1996 18.3%
1997 7.5%
1998 10.2%
1999 (5 months) -
3.3%
Inception-to-Date Return: 55.9%
Annualized Return: 10.2%
</TABLE>
<PAGE>
<TABLE>
Morgan Stanley Dean Witter Spectrum Series
Statements of Operations
For the Month Ended May 31, 1999
(Unaudited)
<CAPTION>
Morgan Stanley Dean Witter
Morgan Stanley Dean Witter
Spectrum Global
Balanced Spectrum Select
Percent of
Percent of
May 1, 1999
May 1, 1999
Beginning Beginning
Amount Net Asset Value Amount
Net Asset Value
$ % $ %
REVENUES
<S> <C> <C> <C>
<C>
Trading Profit (Loss):
Realized 594,458 1.14 1,571,896
0.72
Net change in unrealized (3,120,782) (5.98) (9,788,547)
(4.51)
Total Trading Results (2,526,324) (4.84) (8,216,651)
(3.79)
Interest Income (DWR) 183,665 0.35 629,585
0.29
Total Revenues (2,342,659) (4.49) (7,587,066)
(3.50)
EXPENSES
Brokerage fees (DWR) 200,006 0.39 1,311,273
0.60
Management fees 54,349 0.10 542,595
0.25
Incentive fees - -
- - -
Total Expenses 254,355 0.49 1,853,868
0.85
NET LOSS (2,597,014) (4.98) (9,440,934)
(4.35)
Morgan Stanley Dean Witter Spectrum Series
Statements of Changes in Net Asset Value
For the Month Ended May 31, 1999
(Unaudited)
Morgan Stanley Dean Witter Morgan
Stanley Dean Witter
Spectrum Global Balanced Spectrum
Select .
Units Amount Per Unit Units
Amount Per Unit
$ $ $
$
<S> <C> <C> <C> <C>
<C> <C>
Net Asset Value,
May 1, 1999 3,136,321.243 52,176,061 16.64 8,809,894.846
217,038,130 24.64
Net Loss - (2,597,014) (0.83) -
(9,440,934) (1.08)
Redemptions (16,415.485) (259,529) 15.81 (75,410.398)
(1,776,669) 23.56
Subscriptions 138,527.778 2,190,124 15.81 211,196.533
4,975,791 23.56
Net Asset Value,
May 31, 1999 3,258,433.536 51,509,642 15.81 8,945,680.981
210,796,318 23.56
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
Morgan Stanley Dean Witter Spectrum Series
Statements of Operations
For the Month Ended May 31, 1999
(Unaudited)
<CAPTION>
Morgan Stanley Dean Witter Morgan
Stanley Dean Witter
Spectrum Strategic
Spectrum Technical .
Percent of
Percent of
May 1, 1999
May 1, 1999
Amount Net Asset Value Amount
Net Asset Value
$ % $ %
REVENUES
<S> <C> <C> <C>
<C>
Trading Profit (Loss):
Realized 4,117,158 5.39 3,571,327
1.31
Net change in unrealized (13,801,439) (18.06)
(15,499,467) (5.67)
Total Trading Results (9,684,281) (12.67)
(11,928,140) (4.36)
Interest Income (DWR) 210,859 0.27
770,907 0.28
Total Revenues (9,473,422) (12.40)
(11,157,233) (4.08)
EXPENSES
Brokerage fees (DWR) 461,678 0.60 1,651,212
0.61
Management fees 248,471 0.33 911,014
0.33
Incentive fees 7,591 0.01 -
- -
Total Expenses 717,740 0.94 2,562,226
0.94
NET LOSS (10,191,162) (13.34)
(13,719,459) (5.02)
Morgan Stanley Dean Witter Spectrum Series
Statements of Changes in Net Asset Value
For the Month Ended May 31, 1999
(Unaudited)
Morgan Stanley Dean Witter Morgan
Stanley Dean Witter
Spectrum Strategic Spectrum
Technical .
Units Amount Per Unit Units
Amount Per Unit
$ $ $
$
<S> <C> <C> <C> <C>
<C> <C>
Net Asset Value,
May 1, 1999 6,234,893.546 76,415,634 12.26 16,654,014.671
273,304,061 16.41
Net Loss - (10,191,162) (1.64) -
(13,719,459) (0.82)
Redemptions (54,512.977) (578,928) 10.62 (115,170.375)
(1,795,506) 15.59
Subscriptions 132,618.130 1,408,404 10.62 323,440.584
5,042,439 15.59
Net Asset Value,
May 31, 1999 6,312,998.699 67,053,948 10.62 16,862,284.880
262,831,535 15.59
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
Morgan Stanley Dean Witter Spectrum Series
Notes to Financial Statements
(Unaudited)
1. Summary of Significant Accounting Policies
Organization - Morgan Stanley Dean Witter Spectrum Global
Balanced L.P. (formerly Dean Witter Spectrum Global Balanced
L.P.) ("Spectrum Global Balanced"), Morgan Stanley Dean Witter
Spectrum Select L.P. (formerly Dean Witter Spectrum Select
L.P.) ("Spectrum Select"), Morgan Stanley Dean Witter Spectrum
Strategic L.P. (formerly Dean Witter Spectrum Stratgegic L.P.)
("Spectrum Strategic") and Morgan Stanley Dean Witter Spectrum
Technical L.P. (formerly Dean Witter Spectrum Technical L.P.)
("Spectrum Technical") (individually, a "Partnership", or
collectively, the "Partnerships") are limited partnerships
organized to engage primarily 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
(collectively, "futures interests"). The general partner for
each Partnership is Demeter Management Corporation ("Demeter").
The non-clearing commodity broker is Dean Witter Reynolds, Inc.
("DWR") and an unaffiliated clearing commodity broker, Carr
Futures Inc. ("Carr"), provides clearing and execution
services. Both Demeter and DWR are wholly-owned subsidiaries 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.
Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could
differ from those estimates.
Revenue Recognition - Futures interests 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 each Partnership interest income based upon
80% of its average daily "Net Assets" (as defined in the
limited partnership agreements), for the month in the case of
Spectrum Select, Spectrum Strategic and Spectrum Technical and
100% in the case of Spectrum Global 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 to the Partnership on futures 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 and Related Transaction Fees and Costs - Brokerage
fees for Spectrum Global Balanced are accrued at a flat monthly
rate of 1/12 of 4.60% (a 4.60% annual rate) of the Net Assets
as of the first day of each month.
<PAGE>
Morgan Stanley Dean Witter Spectrum Series
Notes to Financial Statements
(Continued)
Brokerage fees for Spectrum Select, Spectrum Strategic and
Spectrum Technical are accrued at a flat monthly rate of 1/12
of 7.25% (a 7.25% annual rate) of the Net Assets as of the
first day of each month.
Such fee covers all brokerage fees, transaction fees and costs
and ordinary administrative and continuing offering expenses.
Operating Expenses - The Partnerships 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 fees paid by each Partnership.
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 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
close of business on the last day of the month. No selling
commissions or charges related to the continuing offering of
Units are borne by the Limited Partners or the Partnership.
DWR will pays 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 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 redemptions 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.
<PAGE>
Morgan Stanley Dean Witter Spectrum Series
Notes to Financial Statements
(Continued)
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 at the end of each month
thereafter, Limited Partners may exchange their investment
among the Partnerships (subject to certain restrictions
outlined in the Limited Partnership Agreements) without paying
additional charges.
Dissolution of the Partnership - Spectrum Global Balanced,
Spectrum Strategic and Spectrum Technical will terminate on
December 31, 2035 and Spectrum Select will terminate on
December 31, 2025 regardless of 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 fees to DWR as described in
Note 1. Each Partnership's cash is on deposit with DWR and Carr
in futures interests trading accounts to meet margin
requirements as needed. DWR pays interest on these funds as
described in Note 1.
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:
Morgan Stanley Dean Witter Spectrum Global Balanced L.P.
RXR, Inc.
Morgan Stanley Dean Witter Spectrum Select L.P.
EMC Capital Management, Inc.
Rabar Market Research, Inc.
Sunrise Capital Management, Inc.
Morgan Stanley Dean Witter Spectrum Strategic L.P.
Allied Irish Capital Management, Ltd. ("AICM")
Blenheim Investments, Inc. ("Blenheim")
Willowbridge Associates Inc. ("Willowbridge")
Morgan Stanley Dean Witter Spectrum Technical L.P.
Campbell & Company, Inc.) ("Campbell")
Chesapeake Capital Corporation ("Chesapeake")
John W. Henry & Company, Inc. ("JWH")
<PAGE>
Morgan Stanley Dean Witter Spectrum Series
Notes to Financial Statements
(Continued)
Compensation to the trading advisors by the Partnerships
consists of manage-ment fees and incentive fees as follows:
Management Fee - The management fee for Spectrum Global
Balanced is accrued at a rate of 5/48 of 1% of the Net Assets
on the first day of each month (a 1.25% annual rate).
The management fee for Spectrum Select is accrued at a rate of
1/4 of 1% per month of the Net Assets allocated to each trading
advisor on the first day of each month (a 3% annual rate).
The management fee for Spectrum Strategic is 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 AICM on the first day of each
month (annual rates of 4% and 3%, respectively).
The management fee for Spectrum Technical is accrued at a 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).
Incentive Fee - Spectrum Global Balanced, Spectrum Select and
Spectrum Strategic pay a monthly incentive fee equal to 15% of
the "Trading Profits" as defined in their Limited Partnership
Agreements, experienced with respect to each trading advisor's
allocated Net Assets as of the end of each calendar month.
Spectrum Technical pays a monthly incentive fee equal to 15% of
the Trading Profits experienced with respect to the Net Assets
allocated to Campbell and JWH 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 when Trading Losses are incurred, no
incentive fee will be paid in subsequent months until the
individual trading advisor recover their losses. Cumulative
trading losses are adjusted on a pro-rata basis for the net
amount of each months subscriptions and redemptions.
