Dean Witter Spectrum Series
Monthly Report
October 1997
Dear Limited Partner:
The Net Asset Value per unit for each of the three Dean
Witter Spectrum Funds as of September 30, 1997 was as
follows:
Funds N.A.V. % change for month
Spectrum Balanced $13.39 -1.67%
Spectrum Strategic $10.37 -6.26%
Spectrum Technical $13.85 0.32%
In Spectrum Balanced, a balanced portfolio of stocks, bonds
and managed futures utilizing the futures, options and
forwards markets, losses were recorded during October
primarily from long S&P 500 Index futures positions in the
stock portion of the balanced portfolio as U.S. equity
prices experienced a sharp decline on October 27. These
losses were mitigated as domestic stock prices rebounded
higher on October 28. Smaller losses were recorded from
long positions in Australian and European interest rate
futures as prices in these markets reversed lower during
early October after trending higher in late September.
These losses were partially offset by gains from long
Japanese government bond futures positions as prices in this
market moved higher. Additional gains were recorded from
long positions in the bond portion of the balanced portfolio
as U.S. interest rate futures prices finished the month
higher despite experiencing choppy price movement throughout
the month. Smaller gains recorded in currencies from short
Singapore dollar positions, as its value declined sharply
versus the U.S. dollar, and from long British pound
positions, as its value strengthened late in the month, also
helped to offset a portion of the Fund's overall losses.
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 for the month primarily from long
positions in base and precious metals futures as prices in
these markets declined during October. Additional losses
were recorded in currencies from short positions in the
Japanese yen and Swiss franc as the value of these
currencies moved higher versus the U.S. dollar late in the
month. Smaller losses were recorded from long positions in
cocoa and crude oil futures as prices in these markets moved
lower following a previous upward move. A portion of these
losses was offset by gains in agricultural futures from long
positions in corn and soybean meal futures as prices in
these markets increased. In financial futures, losses
recorded in U.S. interest rate futures trading from short-
term price volatility were offset by gains recorded in stock
index futures primarily from short Hang Seng Index futures
positions as equity prices in Hong Kong declined sharply
late in the month.
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, small gains were recorded from
currency trading as long British pound positions profited
from an increase in value relative to the U.S. dollar late
in the month. Additional currency gains were recorded from
short positions in the Australian and Canadian dollars as
the value of these currencies declined relative to the U.S.
dollar. In financial futures trading, profits were recorded
from long positions in Japanese and U.S. government bond
futures as prices in these markets finished the month
higher. A majority of these gains were offset by losses
from long positions in most European interest rate futures
as prices in these markets reversed lower early in the month
after showing signs of trending higher during late
September. In other markets, gains were recorded in soft
commodities and agricultural futures trading as long
positions in corn and sugar futures profited from an upward
price move. A portion of the Fund's overall gains for the
month was offset by losses experienced from significant
short-term price volatility in global stock index futures
and from long positions in silver and crude oil futures as
prices in these markets reversed lower after moving higher
previously.
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.
<PAGE>
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 (10 months) 15.1%
Inception-to-Date Return: 33.9%
Annualized Return: 10.2%
____________________________________________________________
_________________________
Spectrum Strategic
1994 (2 months) 0.1%
1995 10.5%
1996 -3.5%
1997 (10 months) -2.8%
Inception-to-Date Return: 3.7%
Annualized Return: 1.2%
____________________________________________________________
_________________________
Spectrum Technical
1994 (2 months) -2.2%
1995 17.6%
1996 18.4%
1997 (10 months) 1.8%
Inception-to-Date Return: 38.5%
Annualized Return: 11.5%
</TABLE>
<PAGE>
<TABLE>
Statements of Operations
For the Month Ended October 31, 1997
(Unaudited)
<CAPTION>
Dean Witter Spectrum
Balanced
Percent of
October 1, 1997
Beginning
Amount Net Asset Value
$ %
REVENUES
<S> <C> <C>
Trading Profit (Loss):
Realized (417,110) (1.73)
Net change in unrealized 30,319 0.13
Total Trading Results (386,791) (1.60)
Interest Income (DWR) 107,420 0.44
Total Revenues (279,371) (1.16)
EXPENSES
Brokerage commissions (DWR) 98,423 0.41
Management fees 25,108 0.10
Total Expenses 123,531 0.51
NET INCOME (LOSS) (402,902) (1.67)
Statements of Changes in Net Asset Value
For the Month Ended October 31, 1997
(Unaudited)
Dean Witter Spectrum Balanced
Units Amount Per Unit
$ $
<S> <C>
<C> <C>
Net Asset Value,
October 1, 1997 1,769,684.220 24,103,421 13.62
Net Income (Loss) - (402,902) (0.23)
Redemptions (9,010.636) (120,652) 13.39
Subscriptions 59,697.147 799,345 13.39
Net Asset Value,
October 31, 1997 1,820,370.731 24,379,212 13.39
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
October 1, 1997 October 1,
1997
Beginning
Beginning
Amount Net Asset Value Amount Net Asset
Value
$ % $ %
<C> <C> <C> <C>
(2,714,610) (4.53) (6,857,291) (4.17)
(661,566) (1.10) 8,426,347 5.12
(3,376,176) (5.63) 1,569,056 0.95
206,141 0.34 557,783 0.34
(3,170,035) (5.29) 2,126,839 1.29
382,215 0.64 1,048,118 0.64
199,851 0.33 548,036 0.33
582,066 0.97 1,596,154 0.97
(3,752,101) (6.26) 530,685 0.32
Dean Witter Spectrum Strategic Dean Witter Spectrum Technical
Units Amount Per Unit Units Amount Per Unit
$ $ $ $
<C> <C> <C> <C> <C> <C>
5,420,869.364 59,955,298 11.06 11,912,857.479 164,410,683 13.80
- (3,752,101) (0.69) - 530,685 0.05
(44,487.915) (461,340) 10.37 (98,755.425) (1,367,763) 13.85
169,495.152 1,757,665 10.37 371,083.650 5,139,509 13.85
5,545,876.601 57,499,522 10.37 12,185,185.704 168,713,114 13.85
</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 for most of the Partnership's transactions is Dean
Witter Reynolds Inc. ("DWR"). Both DWR and Demeter are
wholly-owned subsidiaries of Morgan Stanley, Dean Witter,
Discover & Co. ("MSDWD").
On July 31, 1997, DWR 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 counterparty
on the Partnership's foreign currency trades. However,
during a transition period of about four months, DWR will
continue to perform certain services relating to the
Partnership's futures trading including clearance. After
such transition period, 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 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
49/120 of 1% of the Net Assets as of the first day of each
month.
<PAGE>
Dean Witter Spectrum Series L.P.
Notes to Financial Statements -
(Continued)
Brokerage fees for Spectrum Strategic and Spectrum Technical
are accrued at a monthly rate of 51/80 of 1% 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 - 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.
<PAGE>
Dean Witter Spectrum Series L.P.
Notes to Financial Statements
(Continued)
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. 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 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.
<PAGE>
Dean Witter Spectrum Series L.P.
Notes to Financial Statements
(Concluded)
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,
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.
