Dean Witter Spectrum Series
Monthly Report
February 1997
Dear Limited Partner:
The Net Asset Value per unit for the Dean Witter Spectrum Funds as of February
28, 1997 was as follows:
Funds N.A.V. % change for month
Spectrum Balanced $12.40 3.22%
Spectrum Strategic $11.67 10.10%
Spectrum Technical $14.27 1.14%
In Spectrum Balanced, a balanced portfolio of stocks, bonds and managed futures
utilizing the futures, options and forwardsmarkets, profits were recorded
during February in the currency markets due primarily to a continued
strengthening in the value of the U.S. dollar. As a result of this
strengthening, gains were recorded in the managed futures portion of the
portfolio from short positions in most European currencies, as well as the
Singapore dollar. Additional gains in the managed futures portfolio
were recorded from short positions in crude oil and natural gas futures, as
prices in these markets moved lower, and from long positions in corn futures,
as prices moved higher during the month. In the stock portion of the
portfolio, gains were recorded from long S&P 500 Index futures positions as
domestic stock prices moved higher during the month. A portion of the overall
Fund gains was offset by losses in the bond portion of the portfolio.
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, the Fund posted significant gains for the month due
primarily from short crude, heating and gas oil futures positions as oil
prices moved lower during the month. Additional gains were recorded from
long positions in silver and base metals futures, particularly in copper, as
prices increased. Gains were also recorded from long positions in soybean
products and corn futures as prices moved higher during the month. In
currency trading, gains were recorded from short Swiss franc and Japanese
yen positions as the value of the U.S. dollar continued to strengthen relative
to most world currencies. Losses recorded from transactions involving the
Canadian dollar offset a portion of these currency gains.
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 during February
were due primarily to profits recorded in currency and soft commodities
markets. In the currency markets, gains were recorded from short German
mark and Swiss franc positions as the value of the U.S. dollar continued
to strengthen relative to most world currencies.
Losses recorded from transactions involving the Australian dollar and British
pound offset a portion of these gains. In soft commodities, gains were
recorded from long coffee futures positions as prices continued to trend higher
during February.
Trading gains were also recorded in the energy markets from short positions in
gas and oil futures, as prices trended lower.
Smaller gains were recorded in the agricultural markets from long positions in
soybean products as prices moved higher. A portion of the Fund's overall
gains was offset by losses recorded in global interest rate futures, as prices
moved in a choppy pattern and from short gold futures positions, as gold
prices reversed higher after trending lower over the past several months.
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 6.6%
Inception-to-Date Return: 24.0%
Annualized Return: 10.0%
________________________________________________________________________________________________________
Spectrum Strategic
1994(2 months) 0.1%
1995 10.5%
1996 -3.5%
1997 9.4%
Inception-to-Date Return: 16.7%
Annualized Return: 7.1%
________________________________________________________________________________________________________
Spectrum Technical
1994(2 months) -2.2%
1995 17.6%
1996 18.4%
1997 4.9%
Inception-to-Date Return: 42.7%
Annualized Return: 17.1%
</TABLE>
<PAGE>
<TABLE>
Statements of Operations
For the Month Ended February 28, 1997
(Unaudited)
<CAPTION>
Dean Witter Spectrum Balanced
Percent of
February 1, 1997
Beginning
Amount Net Asset Value
$ %
REVENUES
<S> <C> <C>
Trading Profit (Loss):
Realized 511,561 2.63
Net change in unrealized 144,938 .75
Total Trading Results 656,499 3.38
Interest Income (DWR) 77,013 .40
Total Revenues 733,512 3.78
EXPENSES
Brokerage commissions (DWR) 88,925 .46
Management fees 20,210 .10
Incentive fees - -
Total Expenses 109,135 .56
NET INCOME 624,377 3.22
Statements of Changes in Net Asset Value
For the Month Ended February 28, 1997
(Unaudited)
Dean Witter Spectrum Balanced
Units Amount Per Unit
$ $ $
<S> <C> <C>
<C>
Net Asset Value,
February 1, 1997 1,614,568.156 19,401,820 12.02
Net Income - 624,377 .38
Redemptions (45,673.545) (566,352) 12.40
Subscriptions 34,849.144 432,129 12.40
Net Asset Value,
February 28, 1997 1,603,743.755 19,891,974 12.40
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
February 1, 1997 February 1, 1997
Beginning Beginning
Amount Net Asset Value Amount Net Asset Value
$ % $ %
<C> <C> <C> <C>
3,191,060 7.05 1,065,922 .88
1,751,065 3.87 1,219,232 1.00
4,942,125 10.92 2,285,154 1.88
145,127 .32 371,031 .31
5,087,252 11.24 2,656,185 2.19
311,015 .69 835,558 .70
150,795 .33 405,119 .33
55,960 .12 26,236 .02
512,770 1.14 1,266,913 1.05
4,569,482 10.10 1,389,272 1.14
Dean Witter Spectrum Strategic Dean Witter Spectrum Technical
Units Amount Per Unit Units Amount Per Unit
$ $ $ $
<C> <C> <C> <C> <C> <C>
4,267,864.535 45,238,582 10.60 8,615,922.871 121,535,734 14.11
- 4,569,482 1.07 - 1,389,272 .16
(107,769.756) (1,222,663) 11.67 (52,960.561) (755,747) 14.27
139,484.329 1,627,782 11.67 537,754.264 7,673,754 14.27
4,302,579.108 50,213,183 11.67 9,100,716.574 129,843,013 14.27
</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 Dean Witter,
Discover & Co. ("DWD").
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 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 its average daily Net Assets 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 flat rate
monthly fee of 11/24 of 1% of the Net Assets as of the first
day of each month.
Brokerage fees for Spectrum Technical are accrued at a flat
rate monthly fee of 33/48 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)
Such fee 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.
<PAGE>
Dean Witter Spectrum Series L.P.
Notes to Financial Statements -
(Continued)
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's 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.
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 managers 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.
<PAGE>
Dean Witter Spectrum Series L.P.
Notes to Financial Statements
(Concluded)
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.
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., DWD (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. Also, on September
18 and 20, 1996 similar purported class actions were filed
in the Supreme Court of the State of New York, New York
County, against the Dean Witter Parties and certain trading
advisors (including JWH) on behalf of all purchasers of
interest 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.
