Dean Witter Spectrum Series
Monthly Report
December 1998
Dear Limited Partner:
The Net Asset Value per Unit for each of the four Dean Witter Spectrum
Funds as of December 31, 1998 was as follows:
Funds N.A.V. % change for month
Spectrum Global Balanced $16.00 1.27%
Spectrum Select $23.80 1.18%
Spectrum Strategic $11.55 2.81%
Spectrum Technical $16.12 5.98%
In Spectrum Global Balanced, a balanced portfolio of stocks, bonds and
managed futures, gains were recorded primarily in the global stock index
futures component from long positions in S&P 500 Index futures as domestic
stock prices pushed higher during the latter half of the month. The equity
markets were driven higher by positive economic data, the traditional rally
late in the year and temporary relief from gloomy corporate profits news as
investors showed little concern regarding possible presidential
impeachment. In the interest rate futures component, short Japanese
government bond futures positions were profitable as prices dropped and
yields soared on news that the Japanese Ministry of Finance's Trust Bureau
would halt outright government bond purchases. Long European bond futures
positions also contributed profits as bond prices were propelled higher
after the 11 charter members of Europe's single currency caught the market
off guard, slashing interest rates in a move aimed at smoothing the launch
of the euro on January 1. The agricultural markets contributed additional
gains in the managed futures component of the balanced portfolio from short
hog and corn futures positions as both prices declined due to more-than-
adequate supplies. A portion of the Fund's overall gains was offset by
losses in the currency markets from long British pound positions held
during the latter part of the month. The U.S. dollar strengthened against
most European currencies as investors prepared for the January 1 launch of
the euro. Additionally, news that the Bank of England intends to cut
interest rates further also pushed the value of the pound lower versus the
U.S. dollar.
In Spectrum Select, a Fund managed by three trading advisors who employ
long-term technical trend-following trading systems, gains were recorded
primarily in the financial futures markets from short Japanese government
bond futures positions as prices dropped and yields soared. The
speculation that the Japanese Ministry of Finance's Trust Bureau would halt
outright long-term government bond purchases starting in January 1999
attributed to the significant month-end downward move in Japanese
government bond prices and soaring interest rates. Additional gains were
seen in European interest rate futures as prices were propelled higher by
unexpected rate cuts aimed at smoothing the January 1 launch of the euro.
Gains were also recorded in the soft commodities markets from short orange
juice and cocoa futures positions as both prices declined on concerns
regarding increasing supplies. Smaller gains were recorded in the
agricultural markets from short corn futures positions as prices declined
on expectations of comfortable stocks for 1999 amid an expected decline in
hog feed usage. Short aluminum futures positions resulted in smaller gains
as base metals prices continued to be pressured by mounting global supply.
A portion of the Fund's gains was offset by losses in the currency markets
from long British pound positions as the value of the pound declined versus
the U.S. dollar late in December after the Bank of England indicated it
intends to cut interest rates further, thus making pound-denominated
deposits less attractive.
In Spectrum Strategic, a Fund managed by three trading advisors who employ
fundamental trading methodologies, gains were recorded primarily in the
interest rate futures markets from short Japanese government bond futures
positions as prices declined amid a surge in Japanese bond yields. The
Bank of Japan Governor Masaru Hayami ascribed the increase in Japanese
interest rate yields to a "rather oversensitive" reaction to an increase in
bond issuance. News that the Japanese Ministry of Finance's Trust Bureau
would halt outright government bond purchases starting in January 1999 also
sent Japanese government bond prices lower. Additional gains were recorded
in the energy markets from long crude oil futures positions as oil prices
rose during month-end due to continued U.S.-Iraq tensions. Smaller gains
were experienced in the metals markets from short aluminum and copper
futures positions as mounting global supply continued to weigh on base
metals prices. A portion of the Fund's overall gains was offset by losses
in the soft commodities
<PAGE>
markets from long cocoa futures positions as prices slid amid concerns
about supply pressures. Additional losses were experienced in the currency
markets from short British pound positions held early in the month as the
value of the U.S. dollar weakened versus the pound on concerns regarding
the presidential impeachment hearings, emerging markets and the U.S.
economy. Newly established long British pound positions held during month-
end also recorded losses as the U.S. dollar strengthened against the pound
as investors prepared for the January 1 launch of the euro.
In Spectrum Technical, a Fund managed by three trading advisors who employ
long-term technical trend-following trading systems, gains were recorded
primarily in the interest rate futures markets from short Japanese
government bond futures positions as prices dropped and yields soared on
news that the Japanese Ministry of Finance's Trust Bureau would halt
outright government bond purchases starting in January. Additional gains
were recorded in the currency markets from long Japanese yen positions as
financial and political concerns weakened the U.S. dollar amid an increase
in the value of the yen against the U.S. dollar from rising Japanese
interest rates boosting the value of assets priced in yen. Smaller gains
were produced in the metals markets from short copper and aluminum futures
positions as base metals prices declined on mounting global supply.
Similarly, short cotton futures positions contributed smaller gains as
supply pressures caused cotton prices to slide. A portion of the Fund's
overall gains was offset by losses in the energy markets from short crude
oil futures positions as oil prices rose due to continued U.S.-Iraq
tensions.
I would also like to take this opportunity to inform you that we anticipate
Schedule K-1 (Form 1065) tax forms reporting each Limited Partner's share
of the Partnership income, loss and deductions for calendar year 1998 will
be mailed to holders of non-IRA accounts during the last week of February.
Should you have an IRA account and wish to receive a schedule K-1 tax form,
please contact your Morgan Stanley Dean Witter Financial Advisor.
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 Morgan Stanley Dean Witter Financial
Advisor.
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 Global Balanced
1994 (2 months) -1.7%
1995 22.8%
1996 -3.7%
1997 18.2%
1998 (12 months) 16.4%
Inception-to-Date Return: 60.0%
Annualized Return: 12.0%
___________________________________________________________________________
__________
Spectrum Select
1991 (5 months) 31.2%
1992 -14.4%
1993 41.6%
1994 -5.1%
1995 23.6%
1996 5.3%
1997 6.2%
1998 (12 months) 14.2%
Inception-to-Date Return: 138.0%
Annualized Return 12.4%
___________________________________________________________________________
__________
Spectrum Strategic
1994 (2 months) 0.1%
1995 10.5%
1996 -3.5%
1997 0.4%
1998 (12 months) 7.8%
Inception-to-Date Return: 15.5%
Annualized Return: 3.5%
___________________________________________________________________________
__________
Spectrum Technical
1994 (2 months) -2.2%
1995 17.6%
1996 18.4%
1997 7.5%
1998 (12 months) 10.2%
Inception-to-Date Return: 61.2%
Annualized Return: 12.2%
</TABLE>
<PAGE>
<TABLE>
Dean Witter Spectrum Series
Statements of Operations
For the Month Ended December 31, 1998
(Unaudited)
<CAPTION>
Dean Witter Spectrum
Global Balanced Dean Witter Spectrum Select
Percent of
Percent of
December 1, 1998
December 1, 1998
Amount Net Asset Value Amount
Net Asset Value
$ % $ %
REVENUES
<S> <C> <C> <C>
<C>
Trading Profit (Loss):
Realized 2,603,145 5.87 (1,970,020)
(1.02)
Net change in unrealized (1,922,283) (4.34) 5,305,604
2.75
Total Trading Results 680,862 1.53 3,335,584
1.73
Interest Income (DWR) 167,141 0.38
591,858 0.31
Total Revenues 848,003 1.91
3,927,442 2.04
EXPENSES
Brokerage fees (DWR) 169,841 0.38 1,164,344
0.61
Incentive fees 69,730 0.16 -
- -
Management fees 46,153 0.10
481,797 0.25
Total Expenses 285,724 0.64
1,646,141 0.86
NET INCOME 562,279 1.27
2,281,301 1.18
Dean Witter Spectrum Series
Statements of Changes in Net Asset Value
For the Month Ended December 31, 1998
(Unaudited)
Dean Witter Spectrum Global Balanced Dean
Witter Spectrum Select .
Units Amount Per Unit Units
Amount Per Unit
$ $
$ $
<S> <C> <C> <C>
<C> <C> <C>
Net Asset Value,
December 1, 1998 2,803,766.783 44,306,686 15.80 8,194,223.664
192,718,889 23.52
Net Income - 562,279 0.20 -
2,281,301 0.28
Redemptions (7,386.865) (118,190) 16.00 (39,469.807)
(939,381) 23.80
Subscriptions 72,693,587 1,163,097 16.00 253,012.894
6,021,707 23.80
Net Asset Value,
December 31, 1998 2,869,073.505 45,913,872 16.00 8,407,766.751
200,082,516 23.80
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
Dean Witter Spectrum Series
Statements of Operations
For the Month Ended December 31, 1998
(Unaudited)
<CAPTION>
Dean Witter
Spectrum Strategic Dean Witter Spectrum Technical.
Percent of
Percent of
December 1, 1998
December 1, 1998
Amount Net Asset Value Amount
Net Asset Value
$ % $ %
REVENUES
<S> <C> <C> <C>
<C>
Trading Profit (Loss):
Realized (3,427,606) (5.11)
14,395,247 6.04
Net change in unrealized 5,736,775 8.55 1,353,972
0.57
Total Trading Results 2,309,169 3.44 15,749,219
6.61
Interest Income (DWR) 205,247 0.31
717,685 0.30
Total Revenues 2,514,416 3.75 16,466,904
6.91
EXPENSES
Brokerage fees (DWR) 405,606 0.60 1,439,151
0.33
Incentive fees - - -
- -
Management fees 218,976 0.34 794,015
0.60
Total Expenses 624,582 0.94 2,233,166
0.93
NET INCOME 1,889,834 2.81 14,233,738
5.98
Dean Witter Spectrum Series
Statements of Changes in Net Asset Value
For the Month Ended December 31, 1998
(Unaudited)
Dean Witter Spectrum Strategic Dean Witter
Spectrum Technical
Units Amount Per Unit Units
Amount Per Unit
$ $
$ $
<S> <C> <C> <C>
<C> <C> <C>
Net Asset Value,
December 1, 1998 5,975,240.857 67,134,866 11.24 15,658,981.515
238,204,374 15.21
Net Income - 1,889,834 0.31 -
14,233,738 0.91
Redemptions (34,543.376) (398,976) 11.55 (83,083.825)
(1,339,311) 16.12
Subscriptions 155,502.220 1,796,051 11.55 248,302.278
4,002,633 16.12
Net Asset Value,
December 31, 1998 6,096,199.701 70,421,775 11.55 15,824,199.968
255,101,434 16.21
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
Dean Witter Spectrum Series
Notes to Financial Statements
(Unaudited)
1. Summary of Significant Accounting Policies
Organization - Dean Witter Spectrum Global Balanced L.P.
(formally known as Dean Witter Spectrum Balanced
L.P.)("Spectrum Balanced"), Dean Witter Spectrum Select L.P.
(formally known as Dean Witter Select Futures Fund L.P.)
("Spectrum Select"), 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 non-clearing commodity broker is Dean Witter
Reynolds, Inc. ("DWR") an affiliate of Demeter. The clearing
commodity broker is Carr Futures Inc. ("Carr"), providing
clearing and execution services. Both Demeter and DWR are
wholly-owned subsidiaries of Morgan Stanley Dean Witter & Co.
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.
Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could
differ from those estimates.
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" (as defined in the limited
partnership agreements), for the month in the case of Spectrum
Select, 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 to 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 Fees and Related Transaction Fees and Costs -
Brokerage fees for Spectrum Balanced are accrued at a monthly
rate of 1/12 of 4.60% of the Net Assets as of the first day of
each month.
<PAGE>
Dean Witter Spectrum Series
Notes to Financial Statements -
(Continued)
Brokerage fees for Spectrum Select, Spectrum Strategic and
Spectrum Technical are accrued at a monthly rate of 1/12 of
7.25% of the Net Assets as of the first day of each month.
Such fees will cover all brokerage fees, transaction fees and
costs and ordinary administrative and continuing offering
expenses.
Operating Expenses - Spectrum Balanced, Spectrum Strategic and
Spectrum Technical, 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.
Spectrum Select bears all operating expenses related to its
trading activities, to a maximum of 1/4 of 1% annually of the
Partnership's average month end Net Assets. In addition, the
Partnership incurs a monthly management fee and may incur an
incentive fee. Demeter bears all other operating expenses.
Effective with the June 1, 1998 change to a flat rate brokerage
fee, all common administrative and continuing offering expenses
will be borne by DWR through the brokerage fees.
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 redemptions 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 redeemed on or prior to the last day of the twelfth month
after such Units were purchased will be subject to a redemption
charge equal to 2% of the Net Asset Value of a Unit on the date
of such redemption. Units redeemed after the last day of the
twelfth month and on or prior to the last day of the twenty-
fourth month after which such Units were purchased will be
subject to a redemption charge equal to 1% of the Net Asset
Value of a Unit on the date of such redemption. Units redeemed
after the last day of the twenty-fourth month after which such
Units were purchased will not be subject to a redemption
charge. The foregoing redemptions charges will be paid to DWR.
Redemptions
<PAGE>
Dean Witter Spectrum Series
Notes to Financial Statements
(Continued)
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 - Spectrum Balanced, Spectrum
Strategic and Spectrum Technical will terminate on December 31,
2035 and Spectrum Select will terminate on December 31, 2025
regardless of 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 fees 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 Global Balanced L.P.
RXR, Inc.
Dean Witter Spectrum Select L.P.
EMC Capital Management, Inc.
Rabar Market Research, Inc.
Sunrise Capital Management, Inc.
Dean Witter Spectrum Strategic L.P.
Blenheim Investments, Inc.
Stonebrook Capital Management, Inc.
Willowbridge Associates Inc.
Dean Witter Spectrum Technical L.P.
Campbell & Company, Inc.
Chesapeake Capital Corporation
John W. Henry & Company, Inc. ("JWH")
<PAGE>
Dean Witter Spectrum Series
Notes to Financial Statements
(Continued)
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
Technical.
Prior the June 1, 1998, the management fee was accrued at the
rate of one fourth of 1% of the Partnership's adjusted Net Assets,
as defined in the Limited Partnership Agreements, as of the last
day of each month (a 3% annual rate) to Spectrum Select.
Effective June 1, 1998, the management fee is accrued at the
rate of one fourth of 1% per month of the Net Assets allocated to
each trading advisor on the first day of each month (a 3% annual
rate).
Prior to June 1, 1998, the management fee was 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. Effective June 1, 1998,
management fees are accrued at a rate of 1/12 of 4% of the Net
Assets allocated to each of Blenheim and Willowbridge on the
first day of each month, and 1/12 of 3% of the Net Assets
allocated to Stonebrook on the first day of each month.
Incentive Fee - Spectrum Balanced and Spectrum Strategic each
will pay a monthly incentive fee equal to 15% of the "Trading
Profits" as defined in its Limited Partnership Agreement,
experienced with respect to each trading manager's allocated
Net Assets as of the end of each calendar month.
Prior to June 1, 1998, Spectrum Select paid, when applicable, a
quarterly incentive fee to each trading advisor equal to 17.5%
of the trading advisors Trading Profits experienced by the Net
Assets allocated to such trading advisor as of the end of each
calendar quarter. Effective June 1, 1998 the incentive fees
was revised to 15% of Trading Profits and are paid on a monthly
basis.
Prior to June 1, 1998, Spectrum Technical paid a fee equal to
15% of the "Trading Profits" as defined in its Limited
Partnership agreement, experienced with respect to each trading
manager's allocated Net Assets as of the end of each calendar
month. Effective June 1, 1998 incentive fees for Spectrum
Technical were revised to 15% of the Trading Profits
experienced with respect to the Net Assets allocated to
Campbell and JWH as of the end of each calendar month, and 19%
of the Trading Profits experienced with respect to the Net
Assets allocated to Chesapeake as of the end of each calendar
month.
<PAGE>
Dean Witter Spectrum Series
Notes to Financial Statements
(Concluded)
For all Partnerships, if a trading advisor has experienced
"Trading Losses" with respect to its allocated Net Assets at
the time of a supplemental closing, the trading advisor must
earn back such losses plus a pro-rata amount related to the
funds allocated to the trading advisor at supplemental closing
before the trading advisor is eligible for an incentive fee.
