Dean Witter Spectrum Series
Monthly Report
March 1998
Dear Limited Partner:
The Net Asset Value per Unit for each of the three Dean
Witter Spectrum Funds as of March 31, 1998 was as follows:
Funds N.A.V. % change
for month
Spectrum Balanced $14.59
2.24%
Spectrum Strategic $10.94
0.34%
Spectrum Technical $14.71
1.36%
In Spectrum Balanced, a balanced portfolio of stocks, bonds
and managed futures utilizing the futures, options and
forward markets, profits were recorded in the stock index
component from long positions in S&P 500 Index futures as
U.S. equity prices continued to move higher. Gains were
also recorded in the managed futures component of the
balanced portfolio from short Swiss franc, German mark and
Japanese yen positions as the value of the U.S. dollar
strengthened relative to these currencies. Smaller profits
were recorded from short corn futures positions. These
gains were partially offset by losses recorded from short
cotton futures positions as cotton prices finished the month
higher after moving lower previously. The bond futures
component of the balanced portfolio also experienced small
losses from long U.S. Treasury bond and Treasury note
futures positions as domestic bond prices finished the month
lower.
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,
a small gain was recorded due primarily to a strengthening
in the value of the U.S. dollar relative to other
currencies. As a result, gains were recorded from short
positions in the Japanese yen and Swiss franc. Additional
profits were recorded from long crude oil futures positions
as oil prices spiked higher during the second half of the
month on reports of a possible reduction of global output.
A majority of these gains was offset by losses experienced
in the financial futures markets from long U.S. Treasury
bond futures as prices moved lower. Smaller losses were
recorded from long sugar futures positions as sugar prices
declined during the first half of March.
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 forward markets, gains were recorded from short
positions in the Swiss franc, German mark and Japanese yen
as the value of the U.S. dollar strengthened relative to
these currencies. Additional currency gains were recorded
from long British pound positions as the value of the pound
moved higher versus other major currencies. Profits were
also recorded in financial futures from long positions in
U.S. and European stock index futures as prices in these
markets continued to reach new highs. These gains were
partially offset by losses experienced from long positions
in silver and gold futures as precious metals prices moved
lower early in the month. Smaller losses were recorded from
short cotton futures positions.
Within the next few weeks we will be distributing a new
Prospectus for the Spectrum Funds which will reflect a
number of changes for the Funds. These changes will include
anticipated reductions in brokerage fees for all of the
Spectrum Funds, certain enhancements to the Spectrum
Balanced trading program, a Trading Advisor change in
Spectrum Strategic and certain changes in the Trading
Advisor allocations in Spectrum Technical. These allocation
changes in Spectrum Technical will result in Chesapeake
Capital Corporation ("Chesapeake") trading its Diversified
Program at approximately twice the normal leverage for this
program, for which Chesapeake will have its incentive fee
increased from 15% to 19%. In anticipation of the changes
to Spectrum Balanced, the Fund will be changing its name to
Dean Witter Spectrum Global Balanced L.P. In addition to
these changes, we will be adding a new Fund to the
<PAGE>
Spectrum Series family of Funds. The specifics of these and
other changes will be set forth in the new Prospectus which
will be provided to you soon.
The General Partner believes that all of the foregoing
changes will be beneficial to Limited Partners.
Nonetheless, in view of these changes, Limited Partners are
reminded that, in accordance with the terms of each Fund's
Limited Partnership Agreement, Limited Partners have a right
to redeem their Units, and that Limited partners owning more
than 50% of the outstanding Units of the Fund may vote to
remove and replace the General Partner and take certain
other actions, without the General Partner's consent (see
Section 15(C) of each Fund's Limited Partnership Agreement
on page A-17 of the Funds' April 25, 1997 Prospectus). With
regard to redemptions, because of the proposed changes, the
General Partner and Dean Witter Reynolds Inc. have
determined to waive any applicable redemption charges, as
well as the six month minimum holding period, for any Units
redeemed as of May 31 and June 30, 1998.
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 18.2%
1998 (3 months)
6.1%
Inception-to-Date Return: 45.9%
Annualized Return:
11.7%
____________________________________________________________
_________________________
Spectrum Strategic
1994 (2 months)
0.1%
1995 10.5%
1996 -3.5%
1997 0.4%
1998 (3 months)
2.2%
Inception-to-Date Return:
9.4%
Annualized Return: 2.7%
____________________________________________________________
_________________________
Spectrum Technical
1994 (2 months) -
2.2%
1995 17.6%
1996 18.4%
1997 7.5%
1998 (3 months)
0.6%
Inception-to-Date Return:
47.1%
Annualized Return: 12.0%
____________________________________________________________
_________________________
</TABLE>
<PAGE>
<TABLE>
Statements of Operations
For the Month Ended March 31, 1998
(Unaudited)
<CAPTION>
Dean Witter Spectrum
Balanced
Percent of
March 1, 1998
Beginning
Amount Net Asset Value
$ %
REVENUES
<S> <C> <C>
Trading Profit (Loss):
Realized 839,712 3.03
Net change in unrealized (165,453) (.60)
Total Trading Results 674,259 2.43
Interest Income (DWR) 117,825 .42
Total Revenues 792,084 2.85
EXPENSES
Brokerage commissions (DWR) 113,335 .41
Management fees 28,912 .10
Incentive fees 28,182 .10
Total Expenses 170,429 .61
NET INCOME 621,655 2.24
Statements of Changes in Net Asset Value
For the Month Ended March 31, 1998
(Unaudited)
Dean Witter Spectrum Balanced
Units Amount Per Unit
$ $
<S> <C>
<C> <C>
Net Asset Value,
March 1, 1998 1,945,468.275 27,755,517 14.27
Net Income - 621,655 .32
Redemptions (24,291.853) (354,418) 14.59
Subscriptions 77,020.189 1,123,725 14.59
Net Asset Value,
March 31, 1998 1,998,196.611 29,146,479 14.59
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
March 1, 1998
March 1, 1998
Beginning
Beginning
Amount Net Asset Value Amount Net Asset
Value
$ % $ %
<C> <C> <C> <C>
365,110 .60 2,049,721 1.10
234,144 .38 1,744,569 .94
599,254 .98 3,794,290 2.04
203,088 .33 618,978 .33
802,342 1.31 4,413,268 2.37
389,370 .64 1,184,845 .64
203,592 .33 619,527 .33
- - 75,399 .04
592,692 .97 1,879,771 1.01
209,380 .34 2,533,497 1.36
Dean Witter Spectrum Strategic Dean Witter Spectrum Technical
Units Amount Per Unit Units Amount Per Unit
$ $ $ $
<C> <C> <C> <C> <C> <C>
5,601,300.528 61,077,708 10.90 12,803,770.428 185,858,003 14.52
- 209,380 .04 - 2,533,497 .19
(69,231.440) (757,392) 10.94 (122,921.898) (1,808,181) 14.71
186,315.164 2,038,288 10.94 458,205.879 6,740,208 14.71
5,718,384.252 62,567,984 10.94 13,139,054.409 193,323,527 14.71
</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 "Partner-ship", 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"). Demeter is a
wholly-owned subsidiary of Morgan Stanley, Dean Witter,
Discover & Co. ("MSDW").
On July 31, 1997, Dean Witter Reynolds Inc. ("DWR"), a
wholly-owned sub-sidiary of MSDWD, closed the sale of its
institutional futures business and foreign currency trading
operations to Carr Futures Inc. ("Carr"), a sub-sidiary of
Credit Agricole Indosuez. Following the sale, Carr became
the commodity broker for most of the Partnership's
transactions and is the counterparty on the Partnership's
foreign currency trades. 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 con-formity 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.
<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 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.
<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.
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, alleging, among other
things, that the defendants committed fraud, deceit,
negligent misrepresentation, various violations of the
California Corporations Code, intentional and negligent
breach of fiduciary duty, fraudulent and unfair business
practices, unjust enrichment, and conversion in the sale and
operation of the various limited partnerships commodity
pool. 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. A consolidated and amended complaint in the
action pending in the Supreme Court of the State of New York
was filed on August 13, 1997, alleging that the defendants
committed fraud, breach of fiduciary duty, and negligent
misrepresentation in the sale and operation of the various
limited partnership commodity pools. On December 16, 1997,
upon motion of the plaintiffs, the action pending in the
Superior Court of the State of Delaware was voluntarily
dismissed without prejudice. 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.
