Dean Witter Spectrum Series
Monthly Report
July 1997
Dear Limited Partner:
The Net Asset Value per unit for each of the three Dean Witter Spectrum
Funds as of July 31, 1997 was as follows:
Funds N.A.V. % change for month
Spectrum Balanced $14.02 11.94%
Spectrum Strategic $12.38 7.62%
Spectrum Technical $14.41 9.37%
In Spectrum Balanced, a balanced portfolio of stocks, bonds and managed
futures utilizing the futures, options and forwards markets, gains were
recorded during July in the stock and bond portions of the balanced
portfolio, as U.S. stock and bond prices continue to move higher during
July. Additional gains were recorded in the managed futures portion of the
portfolio from long positions in U.S. and Australian interest rate futures,
as prices in these markets moved higher. Gains were also recorded in the
currency markets from short positions in the New Zealand dollar, French
franc, Italian lira and Spanish peseta as the value of these currencies
moved lower versus the U.S. dollar. Smaller currency gains were recorded
as the value of the U.S. dollar also increased relative to the German mark
and Swiss franc. A portion of the Fund's gains was offset by losses
recorded in soft commodities from trading cotton futures as prices in this
market moved in a choppy pattern.
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, gains were posted for the month from short
German mark positions as its value decreased relative to the U.S. dollar.
Smaller currency gains were recorded from short Japanese yen, French and
Swiss francs as the value of these currencies also moved lower versus the
U.S. dollar. In financial futures trading, an upward price move in global
interest rate and stock index futures resulted in profits for the Fund's
long positions. In the metals markets, gains recorded from trading
aluminum, zinc and gold futures more than offset losses recorded from
trading copper futures during July. A portion of the Fund's gains was
offset by losses recorded from long cocoa futures positions as prices
reversed lower and from short positions in corn and soybean futures as
prices in these markets moved higher after moving lower in recent months.
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 forwards markets, gains were recorded
from long U.S. and Australian interest rate futures as global bond prices
trended higher during the month. Additional gains were recorded from long
positions in Japanese and European interest rate futures. In global stock
index futures, gains were recorded from long positions as global equity
prices continued to trend higher. Additional gains were recorded in
currency markets from short German mark positions as its value decreased
relative to the U.S. dollar. Smaller gains were recorded from short Swiss
franc positions as its value also moved lower versus the U.S. dollar.
These gains were partially offset by losses recorded from long positions in
the Japanese yen and British pound. In metals, a decline in gold prices
early in the month resulted in gains from short gold futures positions. A
portion of the Fund's gains was offset by losses recorded from short corn
and soybean futures positions as prices in these markets reversed higher
after trending lower in recent months. Smaller losses were recorded from
trendless price movement in soft commodities and energy markets.
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
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 Balanced
1994 (2 months) -1.7%
1995 22.8%
1996 -3.7%
1997 (7 months) 20.6%
Inception-to-Date Return: 40.2%
Annualized Return: 13.1%
___________________________________________________________________________
_____________________________
Spectrum Strategic
1994 (2 months) 0.1%
1995 10.5%
1996 -3.5%
1997 (7 months) 16.0%
Inception-to-Date Return: 23.8%
Annualized Return: 8.1%
___________________________________________________________________________
_____________________________
Spectrum Technical
1994 (2 months) -2.2%
1995 17.6%
1996 18.4%
1997 (7 months) 5.9%
Inception-to-Date Return: 44.1%
Annualized Return: 14.2%
</TABLE>
<PAGE>
<TABLE>
Statements of Operations
For the Month Ended July 31, 1997
(Unaudited)
<CAPTION>
Dean Witter Spectrum
Balanced
Percent of
July 1, 1997
Beginning
Amount Net Asset Value
$ %
REVENUES
<S> <C> <C>
Trading Profit (Loss):
Realized 293,446 1.39
Net change in unrealized 2,548,401 12.06
Total Trading Results 2,841,847 13.45
Interest Income (DWR) 100,129 .47
Total Revenues 2,941,976 13.92
EXPENSES
Incentive fees 300,250 1.42
Brokerage commissions (DWR) 96,874 .46
Management fees 22,017 .10
Total Expenses 419,141 1.98
NET INCOME (LOSS) 2,522,835 11.94
Statements of Changes in Net Asset Value
For the Month Ended July 31, 1997
(Unaudited)
Dean Witter Spectrum Balanced
Units Amount Per Unit
$ $
<S> <C> <C> <C>
Net Asset Value,
July 1, 1997 1,687,052.66 21,136,238 12.53
Net Income (Loss) - 2,522,835 1.49
Redemptions (41,696.587) (584,586) 14.02
Subscriptions 44,132.574 618,739 14.02
Net Asset Value,
July 31, 1997 1,689,488.053 23,693,226 14.02
The accompanying notes are an integral part of these
financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dean Witter Spectrum Strategic Dean Witter Spectrum Technical
Percent of
Percent of
July 1, 1997
July 1, 1997
Beginning
Beginning
Amount Net Asset Value Amount Net Asset
Value
$ % $ %
<C> <C> <C> <C>
2,981,586 5.26 (678,182) (.47)
1,835,825 3.24 15,086,325 10.48
4,817,411 8.50 14,408,143 10.01
209,215 .37 538,426 .38
5,026,626 8.87 14,946,569 10.39
127,509 .23 0 .00
389,644 .69 989,333 .69
188,918 .33 479,676 .33
706,071 1.25 1,469,009 1.02
4,320,555 7.62 13,477,560 9.37
Dean Witter Spectrum Strategic Dean Witter Spectrum Technical
Units Amount Per Unit Units Amount Per Unit
$ $ $ $
<C> <C> <C> <C> <C> <C>
4,927,855.455 56,675,463 11.50 10,919,624.399 143,903,051 13.18
- 4,320,555 .88 - 13,477,560 1.23
(40,242.733) (498,205) 12.38 (99,692.873) (1,436,574) 14.41
205,362.561 2,542,389 12.38 430,600.923 6,204,958 14.41
5,092,975.283 63,040,202 12.38 11,250,532.449 162,148,995 14.41
</TABLE>
<PAGE>
Dean Witter Spectrum Series L.P.
Notes to Financial Statements
(Unaudited)
1. Summary of Significant Accounting Policies
Organization , Dean Witter Spectrum Balanced L.P. ("Spectrum
Balanced"), 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 general partner for each Partnership is
Demeter Management Corporation ("Demeter"). The commodity
broker is Dean Witter Reynolds Inc. ("DWR"). Both DWR and
Demeter are wholly-owned subsidiaries of Morgan Stanley,
Dean Witter, Discover & Co. ("MSDWD").
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, DWR pays each Partnership interest income
based upon 80% of its average daily Net Assets for the month
in the case of 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 and Related Transaction Fees and Costs , Brokerage
fees for Spectrum Balanced are accrued at a monthly rate of
11/24 of 1% of the Net Assets as of the first day of each
month. Effective August 1, 1997, the flat-rate brokerage
fee will be reduced from 5.50% per annum to 4.90% per nnum.
Brokerage fees for Spectrum Strategic and Spectrum Technical
are accrued at a monthly rate of 33/48 of 1% of the Net
Assets as of the first day of each month. Effective August
1, 1997, the flat-rate brokerage fee will be reduced from
8.25% per annum to 7.65% per annum.
Such fees will cover all brokerage commissions, transaction
fees and costs and ordinary administrative and continuing
offering expenses.
<PAGE>
Dean Witter Spectrum Series L.P.
Notes to Financial Statements -
(Continued)
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 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 as of the end of any month
upon five business days advance notice by redemption form to
Demeter. However, any Units redeemed at or prior to the end
of the twelfth, eighteenth, or 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. 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 - Each Partnership will
terminate on December 31, 2035 regardless of its 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 in commodity trading accounts to meet margin
requirements as needed. DWR pays interest on these funds as
described in Note 1. 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.
<PAGE>
Dean Witter Spectrum Series L.P.
Notes to Financial Statements
(Continued)
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 Balanced L.P.
RXR, Inc.
Dean Witter Spectrum Strategic L.P.
Blenheim Investments, Inc.
A. Gary Shilling & Co., Inc.
Willowbridge Associates Inc.
Dean Witter Spectrum Technical L.P.
Campbell & Company, Inc.
Chesapeake Capital Corporation
John W. Henry & Co. 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
Strategic and Spectrum Technical.
Incentive Fee , Each Partnership 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. When trading losses
are incurred, no incentive fee will be paid in subsequent
months until all such losses are recovered.
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.,
MSDWD (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. 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. Generally, these complaints
allege, among other things, that the defendants committed
fraud, deceit, misrepresentation, breach of fiduciary duty,
<PAGE>
Dean Witter Spectrum Series L.P.
Notes to Financial Statements
(Concluded)
fraudulent and unfair business practices, unjust enrichment,
and conversion in connection with the sale and operation of
the various limited partnership commodity pools. 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 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.
