Dean Witter Spectrum Series
Monthly Report
January 1998
Dear Limited Partner:
The Net Asset Value per Unit for each of the three Dean
Witter Spectrum Funds as of January 31, 1998 was as follows:
Funds N.A.V. % change
for month
Spectrum Balanced $14.06
2.31%
Spectrum Strategic $11.28
5.32%
Spectrum Technical $14.46 -
1.16%
In Spectrum Balanced, a balanced portfolio of stocks, bonds
and managed futures utilizing the futures, options and
forward markets, gains were recorded during January
primarily from long U.S. Treasury note futures positions in
the bond portion of the portfolio as prices finished the
month higher. Additional profits were recorded in the
managed futures component of the balanced portfolio as long
positions in both U.S. and European interest rate futures
profited as the upward price move experienced during
December continued into January. In currencies, profits
were recorded from short positions in most European
currencies, particularly in the Italian lira, German mark
and Spanish peseta, as the value of these currencies
declined relative to the U.S. dollar late in the month.
Short positions in crude oil futures were also profitable as
oil prices dipped below $16 a barrel amid rising inventories
before heading higher on renewed concerns of U.S. military
action in the Middle East. These gains were partially
offset by losses recorded in agricultural futures from short
corn and soybean oil futures positions as prices moved
higher. In the stock index portion, results were flat as
the S&P 500 Index finished the month only slightly higher.
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 recorded from long U.S. Treasury bond futures
positions late in the month as prices finished the month
strongly in response to Federal Reserve Chairman Greenspan's
suggestion that interest rates will not be raised in the
near future. Additional gains were recorded from long
European interest rate futures positions as prices in these
markets moved higher early in the month. In metals, long
silver futures positions were profitable as prices rebounded
higher late in the month. In currencies, gains recorded
during the second half of the month from short German mark
futures positions more than offset losses from short
Japanese yen positions. Smaller gains were recorded from
short crude oil futures positions as oil prices declined
during the first half of the month. These gains were
partially offset by losses experienced from long sugar
futures positions as sugar prices moved lower during 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 forward markets, losses were recorded primarily
from short positions in the Japanese yen as the value of the
yen reversed higher on news of an economic stimulus package
proposed by the Japanese government. Additional currency
losses were recorded from short positions in the Australian
dollar as its value also reversed higher relative to the
U.S. dollar after trending lower in recent months. A
portion of these losses was offset by gains from short
Canadian dollar positions as its value continued to trend
lower relative to the U.S. dollar. In metals, gold prices
reversed higher, thus giving back a portion of previously
recorded profits from short gold futures positions. Smaller
losses were recorded from short corn and soybean futures
positions as prices moved higher. These losses were
partially offset by gains from long positions in European
and U.S. interest rate futures as prices in these markets
moved higher early in the month. Smaller gains were
recorded from short crude oil futures positions, as oil
prices moved lower during early January, and long coffee
futures positions, as coffee prices finished the month
higher.
<PAGE>
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 (1 month) 2.3%
Inception-to-Date Return: 40.6%
Annualized Return:
11.1%
____________________________________________________________
_________________________
Spectrum Strategic
1994 (2 months)
0.1%
1995 10.5%
1996 -3.5%
1997
0.4%
1998 (1 month)
5.3%
Inception-to-Date Return:
12.8%
Annualized Return:
3.8%
____________________________________________________________
_________________________
Spectrum Technical
1994 (2 months) -
2.2%
1995 17.6%
1996 18.4%
1997
7.5%
1998 (1 month)
- -1.2%
Inception-to-Date Return:
44.6%
Annualized Return: 12.0%
____________________________________________________________
_________________________
</TABLE>
<PAGE>
<TABLE>
Statements of Operations
For the Month Ended January 31, 1998
(Unaudited)
<CAPTION>
Dean Witter Spectrum
Balanced
Percent of
January 1, 1998
Beginning
Amount Net Asset Value
$ %
REVENUES
<S> <C> <C>
Trading Profit (Loss):
Realized 56,021 .22
Net change in unrealized 547,680 2.13
Total Trading Results 603,701 2.35
Interest Income (DWR) 120,740 .47
Total Revenues 724,441 2.82
EXPENSES
Brokerage commissions (DWR) 104,873 .41
Management fees 26,753 .10
Incentive fees - -
Total Expenses 131,626 .51
NET INCOME (LOSS) 592,815 2.31
Statements of Changes in Net Asset Value
For the Month Ended January 31, 1998
(Unaudited)
Dean Witter Spectrum Balanced
Units Amount Per Unit
$ $
Net Asset Value,
January 1, 1998 1,868,284.841 25,683,236 13.75
Net Income - 592,815 .31
Redemptions (21,467.296) (301,830) 14.06
Subscriptions 68,258.000 959,707 14.06
Net Asset Value,
January 31, 1998 1,915,075.545 26,933,928 14.06
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
January 1, 1998 January 1,
1998
Beginning
Beginning
Amount Net Asset Value Amount Net Asset
Value
$ % $ %
<C> <C> <C> <C>
2,283,955 3.87 585,677 .32
1,207,566 2.04 (1,466,406) (.81)
3,491,521 5.91 (880,729) (.49)
226,171 .38 668,906 .37
3,717,692 6.29 (211,823)
(.12)
376,735 0.64 1,159,934 .64
196,985 0.33 606,502 .33
- - 134,095 .07
573,720 0.97 1,900,531 1.04
3,143,972 5.32 (2,112,354) (1.16)
Dean Witter Spectrum Strategic Dean Witter Spectrum Technical
Units Amount Per Unit Units Amount Per Unit
$ $ $ $
<C> <C> <C> <C> <C> <C>
5,517,887.455 59,095,581 10.71 12,434,700.738 181,950,507 14.63
- 3,143,972 .57 - (2,112,354) (.17)
(67,002.146) (755,784) 11.28 (87,704.770) (1,268,211) 14.46
126,153.072 1,423,007 11.28 264,558.652 3,825,518 14.46
5,577,038.381 62,906,776 11.28 12,611,554.620 182,395,460 14.46
</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"). Demeter is a
wholly-owned subsidiary of Morgan Stanley, Dean Witter,
Discover & Co. ("MSDWD").
On July 31, 1997, Dean Witter Reynolds Inc. ("DWR"), a
wholly-owned subsidiary of MSDWD, 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 commodity broker for most of the Partnership's
transactions and is the counterparty on 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 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.
<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. 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.
