Morgan Stanley Dean Witter Spectrum Series
Monthly Report
November 2000
Dear Limited Partner:
The Net Asset Value per Unit for each of the six Morgan Stanley Dean Witter
Spectrum Funds as of November 30, 2000 was as follows:
Funds N.A.V. % change for month
Spectrum Commodity $ 7.76 3.82%
Spectrum Currency $10.81 -1.63%
Spectrum Global Balanced $15.37 -0.51%
Spectrum Select $21.72 6.48%
Spectrum Strategic $ 9.58 6.47%
Spectrum Technical $14.35 12.34%
In general, the performance disparity between the Funds in the Spectrum
Series is due to the portfolio structure and trading approaches unique to
each Fund. Spectrum Technical, a technically-based multi-manager fund,
recorded profits primarily in the interest rate futures and energy markets.
Spectrum Strategic, a fund managed by multiple trading advisors who employ
fundamental trading methodologies, recorded gains primarily in the interest
rate futures and currency markets. Spectrum Select, the other technically-
based multi-manager fund, produced gains primarily in the interest rate
futures and energy markets. Spectrum Commodity, a fund that participates
in the tangible commodity markets from the long side, recorded gains
primarily in the energy markets. Spectrum Global Balanced, a balanced
portfolio of stocks, bonds and managed futures, incurred losses primarily
in global stock index futures and currency markets. Spectrum Currency, a
fund that participates exclusively in the currency markets, experienced
losses primarily from trading in European currencies.
Spectrum Commodity
The Fund increased in value during November primarily as a result of gains
recorded in the energy markets from long positions in natural gas futures
as prices moved higher amid forecasts for cold weather in the U.S.
Northeast and after an unexpected decrease in U.S. natural gas inventories.
Additional gains were recorded from long futures positions in crude oil and
its related products as prices increased following data showing supplies of
heating oil are extremely tight heading into the winter heating season and
on forecasts for chilly weather in the U.S. Northeast. In the agricultural
markets, gains were recorded from long futures positions in soybeans and
soybean meal as prices increased on assumptions that Germany would ban the
use of bone and meat meal as animal feed. A portion of these gains was
offset by losses recorded in the soft commodities markets from long coffee
futures positions as prices declined pressured by forecasts calling for
periodic rain showers in key coffee growing areas of Brazil. Additional
losses were experienced from long positions in cocoa futures as prices
moved lower as the market was influenced by harvest pressure from the Ivory
Coast.
Spectrum Currency
The Fund decreased in value during November primarily due to losses
recorded from short positions in the euro as the value of the European
common currency strengthened versus the U.S. dollar late in the month on
fresh evidence that the U.S. economy is cooling down. Additional losses
were recorded from long British pound positions as the value of the pound
weakened relative to the U.S. dollar on the release of disappointing
economic data out of the U.K. Smaller losses were experienced from short
Singapore dollar positions as its value was boosted against the U.S. dollar
after the Japanese yen's gains versus the U.S. dollar increased the
strength of Pacific Rim currencies towards month-end. A portion of overall
Fund losses was offset by gains recorded from short South African rand
positions as its value weakened versus the U.S. dollar, while moving in
sympathy with other emerging market currencies. Additional gains were
experienced early in the month from short Japanese yen positions as the
value of the yen weakened versus the U.S. dollar due to concerns over
political and economic woes in Japan.
<PAGE>
Spectrum Global Balanced
The Fund decreased in value during November primarily as a result of losses
recorded in the global stock index futures markets from long positions in
FTSE and DAX Index futures as European stock prices declined later in the
month on nervousness over high-tech earnings growth. In the currency
markets, losses were incurred early in the month from short positions in
the Singapore dollar as its value strengthened relative to the U.S. dollar
after the Japanese yen's gains versus the U.S. dollar increased the
strength of Pacific Rim currencies towards month-end. Newly established
long positions in the Singapore dollar resulted in additional losses as its
value weakened versus the U.S. dollar, mainly from uncertainties in Asian
currencies due to ongoing political issues in the some countries in the
Pacific Rim region. In the energy markets, losses were experienced later
in the month from long futures positions in crude oil and its refined
products as prices dropped following news of a second straight weekly
surprise rise in inventories. Additional downward price pressure came as
news that Iraq has stopped loading crude for export was offset by
assurances that the U.S., the International Energy Agency and Saudi Arabia
are prepared to make up for any lost oil. A portion of these losses was
offset by gains recorded in the global interest rate futures markets from
long positions in U.S. and German interest rate futures as U.S. and
European government bond prices moved higher while the U.S. equity markets
continued their sharp decline amid continuing uncertainty brought about by
the U.S. Presidential Election. Profits were also recorded from long
positions in Japanese bond futures as prices rose sharply on investor
buying as sluggish stocks in both the U.S. and Japan indicated fears for a
possible economic downturn.
Spectrum Select
The Fund increased in value during November due primarily to gains recorded
in the interest rate futures markets from long positions in U.S. and German
interest rate futures as U.S. and European government bond prices moved
higher while the U.S. equity markets continued their sharp decline amid
continuing uncertainty brought about by the U.S. Presidential Election.
Profits were also recorded from long positions in Japanese bond futures as
prices rose sharply on investor buying as sluggish stocks in both the U.S.
and Japan indicated fears for a possible economic downturn. In the energy
markets, gains were recorded from long futures positions in crude oil and
its related products as prices increased following data showing supplies of
heating oil are extremely tight heading into the winter heating season and
on forecasts for chilly weather in the U.S. Northeast. Additional gains
were incurred from long natural gas futures positions as prices moved
higher amid forecasts for cold weather in the U.S. Northeast and after an
unexpected decrease in U.S. natural gas inventories. In the agricultural
markets, gains were recorded from long futures positions in soybean meal as
prices increased on assumptions that Germany would ban the use of bone and
meat meal as animal feed. A portion of these gains was offset by losses
recorded in the currency markets from short positions in the euro and Swiss
franc as the value of these European currencies strengthened relative to
the U.S. dollar later in the month on concerns about slowing U.S. growth
and persistent declines in U.S. stocks.
Spectrum Strategic
The Fund increased in value during November primarily as a result of gains
recorded in the interest rate futures markets from long positions in
Japanese bond futures as prices rose sharply on investor buying as sluggish
stocks in both the U.S. and Japan indicated fears for a possible economic
downturn. Profits were also recorded from long positions in U.S. and
German interest rate futures as U.S. and European government bond prices
moved higher while the U.S. equity markets continued their sharp decline
amid continuing uncertainty brought about by the U.S. Presidential
Election. In the currency markets, gains were recorded from long crossrate
positions in the euro relative to the Japanese yen, short positions in the
Japanese yen versus the U.S. dollar and long positions in the euro and the
Swiss franc relative to the U.S. dollar. The value of the yen weakened
versus the euro and U.S. dollar due to concerns over political and economic
woes in Japan. The euro and Swiss franc strengthened relative to the U.S.
dollar late in the month on concerns about slowing U.S. economic growth and
persistent declines in U.S. stocks prices. In soft commodities, gains were
incurred earlier in the month from long cotton futures positions as prices
climbed higher on an increase in global demand. A portion of these gains
was offset by losses recorded in the global stock index futures markets
from long positions in NASDAQ 100 and S&P 500 Index futures as domestic
stock prices declined, particularly technology-based stocks, due to
earnings warnings from several companies. In the energy markets, losses
were experienced earlier in the month from short futures positions in crude
oil as prices increased following data showing supplies of heating oil are
extremely tight heading into the winter heating season and on forecasts for
chilly weather in the U.S. Northeast. Offsetting gains were incurred from
<PAGE>
long natural gas futures positions as prices moved higher amid forecasts
for cold weather in the U.S. Northeast and after an unexpected decrease in
U.S. natural gas inventories.
Spectrum Technical
The Fund increased in value during November due primarily to gains recorded
in the interest rate futures markets from long positions in Japanese bond
futures as prices rose sharply on investor buying as sluggish stocks in
both the U.S. and Japan indicated fears for a possible economic downturn.
Profits were also recorded from long positions in U.S. and German interest
rate futures as U.S. and European government bond prices moved higher while
the U.S. equity markets continued their sharp decline amid continuing
uncertainty brought about by the U.S. presidential election. In the energy
markets, gains were recorded from long futures positions in crude oil and
its related products as prices increased following data showing supplies of
heating oil are extremely tight heading into the winter heating season and
on forecasts for chilly weather in the U.S. Northeast. Additional gains
were incurred from long natural gas futures positions as prices moved
higher amid forecasts for cold weather in the U.S. Northeast and after an
unexpected decrease in U.S. natural gas inventories. In the global stock
index futures markets, profits were recorded from short positions in DAX
Index futures as German stock prices declined on nervousness over high-tech
earnings growth. Additional gains were recorded from short positions in
NASDAQ 100 Index futures as prices fell on jitters regarding valuation and
profit growth expectations for big-cap technology stocks. In the
agricultural markets, gains were recorded from long futures positions in
soybean meal as prices increased on assumptions that Germany would ban the
use of bone and meat meal as animal feed. In the currency markets, gains
were recorded from short Japanese yen positions as the value of the yen
weakened versus the U.S. dollar due to concerns over political and economic
woes in Japan. Offsetting currency losses were recorded later in the month
from short positions in the euro and Swiss franc as the value of these
European currencies strengthened relative to the U.S. dollar on concerns
about slowing U.S. economic growth and persistent declines in U.S. stock
prices.
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
Chairman
Demeter Management Corporation
General Partner
<PAGE>
<TABLE>
Historical Fund Performance
<CAPTION>
Presented below is the percentage change in Net Asset Value per Unit from
the start of each calendar each the Fund has traded. Also provided is the
inception-to-date return and the annualized return since inception for each
Fund. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
Funds Year Return
<S> <C> <C>
Spectrum Commodity
1998 -34.3%
1998 15.8%
2000 (11 months) 2.0%
Inception-to-Date Return: -22.4%
Annualized Return: -8.3%
___________________________________________________________________________
__________
Spectrum Currency 2000 (5 months) 8.1%
Inception-to-Date Return: 8.1%
___________________________________________________________________________
___________
Spectrum Global Balanced
1994 (2 months) -1.7%
1995 22.8%
1996 -3.6%
1997 18.2%
1999 16.4%
1999 0.8%
2000 (11 months) -4.7%
Inception-to-Date Return: 53.7%
Annualized Return: 7.3%
___________________________________________________________________________
__________
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
-7.6%
2000 (11 months) -1.3%
Inception-to-Date Return: 117.2%
Annualized Return 8.7%
___________________________________________________________________________
__________
Spectrum Strategic
1994 (2 months) 0.1%
1995 10.5%
1996 -3.5%
1997 0.4%
1998 7.8%
1999
37.2%
2000 (11 months) -39.6%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
<C>
Inception-to-Date Return: -4.2%
Annualized Return: -0.7%
Spectrum Technical
1994 (2 months) -2.2%
1995 17.6%
1996 18.3%
1997 7.5%
1998 10.2%
1999
-7.5%
2000 (11 months) -3.8%
Inception-to-Date Return: 43.5%
Annualized Return: 6.1%
</TABLE>
<PAGE>
<TABLE>
Morgan Stanley Dean Witter Spectrum Series
Statements of Operations
For the Month Ended November 30, 2000
(Unaudited)
<CAPTION>
Morgan Stanley Dean Witter Morgan Stanley Dean
Witter Morgan Stanley Dean Witter
Spectrum Commodity Spectrum Currency
_ Spectrum Global Balanced
Percent of Percent of
Percent of
November 1, 2000 November 1, 2000
November 1, 2000
Beginning Beginning
Beginning
Amount Net Asset Value Amount Net Asset
Value Amount Net Asset Value
$ % $ %
$ %
<S> <C> <C> <C> <C>
<C> <C>
REVENUES
Trading profit (loss):
Realized 132,947 0.65 (3,475) (0.03)
(127,031) (0.24)
Net change in unrealized 688,433 3.35 (175,575) (1.29)
(156,990) (0.29)
Total Trading Results 821,380 4.00 (179,050) (1.32)
(284,021) (0.53)
Interest Income (DWR) 87,398 0.42 49,163 0.36
273,109 0.51
Total Revenues 908,778 4.42 (129,887) (0.96)
(10,912) (0.02)
EXPENSES
Brokerage fees (DWR) 78,892 0.38 52,215 0.38
204,920 0.38
Management fees 42,876 0.22 39,817
0.29 55,685 0.11
Total Expenses 121,768 0.60 92,032 0.67
260,605 0.49
NET INCOME (LOSS) 787,010 3.82 (221,919) (1.63)
(271,517) (0.51)
Morgan Stanley Dean Witter Spectrum Series
Statements of Changes in Net Asset Value
For the Month Ended November 30, 2000
(Unaudited)
Morgan Stanley Dean Witter Morgan Stanley Dean
Witter Morgan Stanley Dean Witter
Spectrum Commodity Spectrum Currency
Spectrum Global Balanced .
Units Amount Per Unit Units Amount
Per Unit Units Amount Per Unit
$ $ $ $
$ $
<S> <C> <C> <C> <C> <C>
<C> <C> <C> <C>
Net Asset Value,
November 1, 2000 2,752,586.775 20,580,439 7.48 1,239,647.644
13,621,138 10.99 3,460,388.609 53,457,919 15.45
Net Income (Loss) - 787,010 0.28 -
(221,919) (0.18) - (271,517) (0.08)
Redemptions (161,402.631) (1,252,484) 7.76 (2,158.525)
(23,334) 10.81 (42,005.265) (645,621) 15.37
Subscriptions 17,512.009 135,893 7.76 95,837.734
1,036,006 10.81 23,500.895 361,209 15.37
Net Asset Value,
November 30, 2000 2,608,696.153 20,250,858 7.76 1,333,326.853
14,411,891 10.81 3,441,884.239 52,901,990 15.37
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 November 30, 2000
(Unaudited)
<CAPTION>
Morgan Stanley Dean Witter Morgan Stanley Dean
Witter Morgan Stanley Dean Witter
Spectrum Select Spectrum Strategic
_ Spectrum Technical
Percent of Percent of
Percent of
November 1, 2000 November 1, 2000
November 1, 2000
Beginning Beginning
Beginning
Amount Net Asset Value Amount Net Asset
Value Amount Net Asset Value
$ % $ %
$ %
<S> <C> <C> <C> <C>
<C> <C>
REVENUES
Trading profit (loss):
Realized 3,863,750 2.01 (429,517) (0.67)
2,564,174 1.18
Net change in unrealized 9,405,729 4.90 4,897,589 7.60
25,446,815 11.67
Total Trading Results 13,269,479 6.91 4,468,072 6.93
28,010,989 12.85
Interest Income (DWR) 809,993 0.42 271,750
0.42 950,560 0.44
Total Revenues 14,079,472 7.33 4,739,822 7.35
28,961,549 13.29
EXPENSES
Brokerage fees (DWR) 1,160,329 0.60 389,461 0.60
1,317,597 0.61
Management fees 480,136 0.25 180,138
0.28 726,950 0.34
Total Expenses 1,640,465 0.85 569,599 0.88
2,044,547 0.95
NET INCOME 12,439,007 6.48 4,170,223 6.47
26,917,002 12.34
Morgan Stanley Dean Witter Spectrum Series
Statements of Changes in Net Asset Value
For the Month Ended November 30, 2000
(Unaudited)
Morgan Stanley Dean Witter Morgan Stanley Dean
Witter Morgan Stanley Dean Witter
Spectrum Select Spectrum Strategic
Spectrum Technical .
Units Amount Per Unit Units Amount
Per Unit Units Amount Per Unit
$ $ $ $
$ $
<S> <C> <C> <C> <C> <C>
<C> <C> <C> <C>
Net Asset Value,
November 1, 2000 9,415,931.659 192,054,415 20.40 7,167,291.148
64,462,606 8.99 17,070,881.155 218,085,058 12.78
Net Income - 12,439,007 1.32 -
4,170,223 0.59 - 26,917,002 1.57
Redemptions (107,794.760) (2,341,302) 21.72 (141,086.132)
(1,351,605) 9.58 (385,288.628) (5,528,892) 14.35
Subscriptions 77,291.779 1,678,777 21.72 48,393.403
463,609 9.58 130,446.786 1,871,911 14.35
Net Asset Value,
November 30, 2000 9,385,428.678 203,830,897 21.72 7,074,598.419
67,744,833 9.58 16,816,039.313 241,345,079 14.35
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 Commodity
L.P. ("Spectrum Commodity," formerly Morgan Stanley Tangible
Asset Fund L.P.), Morgan Stanley Dean Witter Spectrum Currency
L.P. ("Spectrum Currency"), Morgan Stanley Dean Witter Spectrum
Global Balanced L.P. ("Spectrum Global Balanced"), Morgan
Stanley Dean Witter Spectrum Select L.P. ("Spectrum Select"),
Morgan Stanley Dean Witter Spectrum Strategic L.P. ("Spectrum
Strategic") and Morgan Stanley 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, forwards, and options contracts on physical
commodities and other commodity interests, including, but not
limited to foreign currencies, financial instruments, metals,
energy and agricultural products (collectively, "futures
interests").
The general partner for each Partnership is Demeter Management
Corporation ("Demeter"). The non-clearing commodity broker for
the Partnerships is Dean Witter Reynolds, Inc. ("DWR"). The
clearing commodity brokers for the Partnerships are Morgan
Stanley & Co. Incorporated ("MS & Co.") and Morgan Stanley &
Co. International ("MSIL") which provide clearing and execution
services. Morgan Stanley Dean Witter Commodities Management,
Inc. ("MSCM") is the trading advisor to Spectrum Commodity.
Demeter, DWR, MS & Co., MSCM and MSIL are wholly-owned
subsidiaries of Morgan Stanley Dean Witter & Co.
Demeter is required to maintain a 1% minimum interest in the
equity of each Partnership and income (losses) are shared by
Demeter and the Limited Partners based upon their proportional
ownership interests.
Use of Estimates - The financial statements are prepared in
accordance with generally accepted accounting principles, which
require management to make estimates and assumptions that
affect the reported amounts in the financial statements and
related disclosures. Management believes that the estimates
utilized in the preparation of the financial statements are
prudent and reasonable. Actual results could differ from those
estimates.
Revenue Recognition - Futures interests are open commitments
until settlement date. They are valued at market on a daily
basis and the resulting net change in unrealized gains and
losses is reflected in the changes in unrealized profits
(losses) on open contracts from one period to the next in the
statements of operations. Monthly, DWR pays interest income on
80% of the month's average daily "Net Assets" (as defined in
the limited partnership agreements) of
Spectrum Commodity, Spectrum Currency, Spectrum Select,
Spectrum Strategic and Spectrum Technical, and 100% in the case
of Spectrum Global Balanced. The interest rates used are equal
to a prevailing rate on U.S. Treasury bills. For purposes of
such interest payments, Net Assets do not include monies due
the Partnerships on futures interests, but not actually
received.
Net Income (Loss) per Unit - Net income (loss) per unit of
limited partnership interest ("Unit(s)") is computed using the
weighted average number of Units outstanding during the period.
Brokerage and Related Transaction Fees and Costs - The
brokerage fees for Spectrum Commodity, Spectrum Currency, and
Spectrum Global Balanced are accrued at a flat monthly rate of
1/12 of 4.6% (a 4.6% annual rate) of 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 Net Assets as of the first
day of each month.
Such fees currently cover all brokerage commissions,
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 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 of any month that is at least 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.
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 Commodity will
terminate on December 31, 2027, Spectrum Currency, 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 under certain
conditions as defined in each Partnership's Limited Partnership
Agreement.
<PAGE>
Morgan Stanley Dean Witter Spectrum Series
Notes to Financial Statements
(Continued)
2. Related Party Transactions
Spectrum Commodity and Spectrum Currency pay brokerage fees to
MS & Co. and MSIL. Spectrum Global Balanced, Spectrum Select,
Spectrum Strategic and Spectrum Technical each pay brokerage
fees to DWR as described in Note 1. The Partnerships' cash is
on deposit with DWR, MS & Co. and MSIL in futures interests
trading accounts to meet margin requirements as needed. DWR
and MS & Co. pay 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 Commodity L.P.
Morgan Stanley Dean Witter Commodities Management Inc.
Morgan Stanley Dean Witter Spectrum Currency L.P.
John W. Henry & Company, Inc. ("JWH")
Sunrise Capital Partners, LLC ("Sunrise")
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")
Eclipse Capital Management, Inc. ("Eclipse")
Morgan Stanley Dean Witter Spectrum Technical L.P.
Campbell & Company, Inc.) ("Campbell")
Chesapeake Capital Corporation ("Chesapeake")
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 for Spectrum Commodity is
accrued at a rate of 5/24 of 1% of Net Assets on the first day
of each month (a 2.5% annual rate).
The management fee for Spectrum Global Balanced is accrued at a
rate of 5/48 of 1% of Net Assets on the first day of each month
(a 1.25% annual rate).
The management fees for Spectrum Currency are accrued at a rate
of 1/12 of 4% of Net Assets allocated to JWH on the first day
of each month, and 1/12 of 3% of Net Assets allocated to
Sunrise on the first day of each month (annual rates of 4% and
3%, respectively).
<PAGE>
Morgan Stanley Dean Witter Spectrum Series
Notes to Financial Statements
(Concluded)
The management fee for Spectrum Select is accrued at a rate of
1/4 of 1% of Net Assets on the first day of each month (a 3%
annual rate).
The management fees for Spectrum Strategic are accrued at a
rate of 1/12 of 4% of Net Assets allocated to Blenheim on the
first day of each month, and 1/12 of 3% of Net Assets allocated
to AICM and Eclipse 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% of Net Assets on the first day of each month (a 4%
annual rate).
Incentive Fee - Spectrum Commodity pays an annual incentive fee
equal to 20% of the trading profits as of the end of each
calendar year.
Spectrum Currency, Spectrum Global Balanced, Spectrum Select
and Spectrum Strategic each pay a monthly incentive fee equal
to 15% of the trading profits 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.
Trading profits for the Partnership's represent the amount by
which profits from futures, forward and options trading exceed
losses after brokerage and management fees are deducted.
For all Partnerships, when trading losses are incurred, no
incentive fees will be paid in subsequent months until all such
losses are received. Cumulative trading losses are adjusted on
a pro-rata basis for the net amount of each months
subscriptions and redemptions.
Commencing December 1, 2000, the following changes will be
made:
The management fee paid by Spectrum Currency will be
reduced from a 4% to a 2% annual rate in the case of JWH and
from a 3% to a 2% annual rate in the case of Sunrise.
Additionally, the monthly incentive fee paid by Spectrum
Currency to each Trading Advisor will be changed from 15% to
20% of Partnership trading profits, as determined from the end
of the last period in which an incentive fee was earned.
The management fee paid by Spectrum Technical will be
reduced from a 4% to a 2% annual rate in the case of JWH and
from a 4% to a 3% annual rate in the case of Campbell.
Additionally, the monthly incentive fee paid by Spectrum
Technical to both JWH and Campbell will be changed from 15% to
20% of Partnership trading profits, as determined from the end
of the last period in which an incentive fee was earned.
The annual incentive fee paid by Spectrum Commodity to
MSCM will be reduced from 20% to 17.5% of Partnership trading
profits, as determined from the end of the last period in which
an incentive fee was earned.
