Morgan Stanley Dean Witter Spectrum Series
Monthly Report
January 2000
Dear Limited Partner:
The Net Asset Value per Unit for each of the four Morgan Stanley Dean
Witter Spectrum Funds as of January 31, 2000 was as follows:
Funds N.A.V. % change for month
Spectrum Global Balanced $15.97 -0.95%
Spectrum Select $22.63 2.87%
Spectrum Strategic $15.54 -1.91%
Spectrum Technical $15.09 1.25%
Upward price moves in several commodities and the subsequent fears of
inflation in the United States played important roles during January. Oil
and aluminum futures prices continued to trend higher, as they did during
December, amid constricting supply levels. These price increases, coupled
with the release of strong U.S. economic data, revived the fears of
inflation that were periodically evident during the second half of 1999.
As a result of the rekindled inflationary worries, most global stock prices
reversed lower, following a strong year-end rally during December.
Additionally, the U.S. dollar strengthened versus most major currencies and
intermediate-term interest rates surpassed those along the longer-end of
the yield curve.
In general, each of the Spectrum Series funds demonstrated different
performance in January due to the portfolio structure and trading
approaches unique to each fund. Spectrum Select's performance was largely
derived from its greater exposure to global interest rate futures and
currencies, which were generally profitable. Spectrum Technical produced
gains in January from its significant participation in energies and global
interest rate futures. Both Spectrum Select and Spectrum Technical had
less exposure to the difficult stock index futures markets. Spectrum
Strategic and Spectrum Balanced each posted overall losses for January
primarily from their exposure to the challenging stock index futures
markets. Additionally, Spectrum Strategic suffered losses from the way it
participated in global interest rate futures and currency markets, while
Spectrum Select and Spectrum Technical realized profits in these sectors
due to their trading approach.
In the commodities markets, profits were recorded in all the Funds from
long positions in crude and heating oil futures as oil prices, which have
been climbing higher since early 1999, continued their upward trend during
January on growing speculation that OPEC may extend production cuts beyond
the current deadline of March 2000. Oil prices received an extra boost on
increased demand due to extremely frigid weather in the U.S. Northeast.
Long positions in aluminum futures were also profitable in these funds as
prices rose to their highest level in nearly 2 1/2 years in response to
reports that global supplies of this base metal could run low. These gains
more than offset losses incurred from short positions in corn and soybean
futures as grain prices also increased due to a cut in 1999-2000 ending
stocks and concerns for dryness in Brazil.
U.S. and European stock prices, after rallying higher during December,
reversed lower during January resulting in losses for long positions in
Spectrum Select and Spectrum Technical. Early in the month, prices moved
lower amid fears of interest rate hikes in the U.S. and Europe. Profit
taking from the previous year also contributed to the reversal lower.
Following a brief move upward in mid-month, prices resumed their decline
later in the month after a new batch of economic data raised fears that the
U.S. Federal Reserve would be forced to take aggressive action to slow the
economy and stave off inflation. This choppiness also contributed to
losses in stock index futures positions.
Fears of inflation and the future direction of interest rates also
continued to be a factor in the global interest rate futures and currency
markets. Continuing a trend in place since early December, rising interest
rates at the shorter-end of the yield curve pushed prices lower, thus
resulting in profits for short positions in short-term and intermediate-
term interest rate futures, specifically eurodollar and U.S. Treasury note
futures. Conversely, the upward trend in interest rates at the longer-end
of the yield curve reversed lower during the second half of January, after
moving higher over the past several
<PAGE>
months. As a result of this decline in rates, U.S. Treasury bond futures
prices moved higher resulting in losses for short positions in Spectrum
Select and Spectrum Technical.
In currencies, profits were recorded in Spectrum Select and Spectrum
Technical from short positions in the euro as the value of the European
common currency weakened to its lowest level versus the U.S. dollar, hurt
by skepticism regarding Europe's economic outlook. Short positions in the
Swiss franc were also profitable as this European currency shared many of
the same woes as the euro. These gains were offset by losses incurred in
these funds from long positions in the British pound and Japanese yen as
the value of the dollar also strengthened versus these currencies amid
improving sentiment in the U.S. Treasury bond market during the latter half
of January.
In Spectrum Global Balanced, a balanced portfolio of stocks, bonds and
managed futures, losses were recorded during January in the global stock
index futures markets from long positions in FT-SE 100 Index futures as
European stocks declined as fears of rising interest rates persisted. In
the global interest rate futures markets, losses were experienced from long
positions in U.S. Treasury note futures as prices declined while
intermediate-term interest rate yields rose. Offsetting gains were
recorded in the managed futures component from short positions in
eurodollar futures as prices decreased as short-term U.S. interest rates
climbed after a government report pointed to rising wage costs. In the
livestock markets, losses were recorded from long positions in live cattle
futures as prices declined after the USDA raised its forecast for U.S. red
meat production in 2000. A portion of these losses was offset by gains
recorded in the soft commodities markets from long cotton futures positions
as cotton prices rose on robust speculative buying. In the currency
markets, gains were recorded from crossrate positions, specifically in the
euro relative to the British pound, as the value of the European common
currency weakened versus the pound hurt by skepticism about Europe's
economic outlook and lack of public support for the economy from European
officials. In the energy markets, gains were recorded from long futures
positions in heating oil as oil prices increased on growing speculation
that Organization of Petroleum Exporting Countries (OPEC) would extend
production cuts beyond the current deadline of March 2000.
In Spectrum Strategic, a Fund managed by multiple trading advisors who
employ fundamental trading methodologies, losses were recorded during
January in the global interest rate futures markets from short positions in
U.S. Treasury bond futures as interest rates at the longer-end of the yield
curve declined during the second half of the month, thus resulting in
domestic bond prices being pushed higher. In the global stock index
futures markets, losses were experienced from short positions in U.S. stock
index futures as domestic equity prices moved higher earlier in the month
on fears of an interest rate hike and reports of a major corporate merger.
In the soft commodities markets, losses were incurred from long coffee
futures positions as coffee prices declined in the wake of forecasts for a
bumper crop in Brazil this year. In the currency markets, losses were
recorded from long positions in the euro as the value of the European
common currency weakened to a lifetime low versus the U.S. dollar. The
euro dropped below parity with the U.S. dollar late in the month, hurt by
skepticism about Europe's economic outlook and lack of public support for
the economy from European officials. A portion of these losses was offset
by gains recorded in the energy markets from long futures positions in
crude oil and its refined products as oil prices increased on growing
speculation that Organization of Petroleum Exporting Countries (OPEC) would
extend production cuts beyond the current deadline of March 2000. In the
metals markets, gains were recorded from long aluminum futures positions as
prices rose to their highest level in nearly 2 1/2 years in response to
reports that global supplies of aluminum could run short.
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,
Robert E. Murray
Chairman
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 each the Fund has traded. Also provided is the
inception-to-date return and the annualized return since inception for each
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 -3.6%
1997 18.2%
1998 16.4%
1999 0.7%
2000 (1 month) -1.0%
Inception-to-Date Return: 59.7%
Annualized Return: 9.3%
___________________________________________________________________________
__________
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 14.2%
1999
- -7.6%
2000 (1 month) 2.9%
Inception-to-Date Return: 126.3%
Annualized Return 10.1%
___________________________________________________________________________
__________
Spectrum Strategic
1994 (2 months) 0.1%
1995 10.5%
1996 -3.5%
1997 0.4%
1998 7.8%
1999
37.2%
2000 (1 month) -1.9%
Inception-to-Date Return: 55.4%
Annualized Return: 8.8%
___________________________________________________________________________
__________
Spectrum Technical
1994 (2 months) -2.2%
1995 17.6%
1996 18.3%
1997 7.5%
1998 10.2%
1999
- -7.5%
2000 (1 month) 1.3%
Inception-to-Date Return: 50.9%
Annualized Return: 8.2%
</TABLE>
<PAGE>
<TABLE>
Morgan Stanley Dean Witter Spectrum Series
Statements of Operations
For the Month Ended January 31, 2000
(Unaudited)
<CAPTION>
Morgan Stanley Dean Witter
Morgan Stanley Dean Witter
Spectrum Global
Balanced Spectrum Select
Percent of
Percent of
January 1, 2000
January 1, 2000
Beginning Beginning
Amount Net Asset Value Amount
Net Asset Value
$ % $ %
REVENUES
<S> <C> <C> <C>
<C>
Trading profit (loss):
Realized (996,991) (1.72) (6,404,029)
(3.00)
Net change in unrealized 475,922 0.82 13,606,659
6.36
Total Trading Results (521,069) (0.90) 7,202,630
3.36
Interest Income (DWR) 254,511 0.44 758,135
0.35
Total Revenues (266,558) (0.46) 7,960,765
3.71
EXPENSES
Brokerage fees (DWR) 221,811 0.38 1,291,744
0.60
Management fees 60,275 0.11 534,514
0.24
Incentive fees - -
- - - .
Total Expenses 282,086 0.49 1,826,258
0.84
NET INCOME (LOSS) (548,644) (0.95) 6,134,507
2.87
Morgan Stanley Dean Witter Spectrum Series
Statements of Changes in Net Asset Value
For the Month Ended January 31, 2000
(Unaudited)
Morgan Stanley Dean Witter Morgan
Stanley Dean Witter
Spectrum Global Balanced Spectrum
Select .
Units Amount Per Unit Units
Amount Per Unit
$ $ $
$
<S> <C> <C> <C> <C>
<C> <C>
Net Asset Value,
January 1, 2000 3,589,823.691 57,864,012 16.12 9,716,887.432
213,805,674 22.00
Net Income (Loss) - (548,644) (0.15) -
6,134,507 0.63
Redemptions (51,090.628) (815,917) 15.97 (147,001.320)
(3,326,640) 22.63
Subscriptions 73,180.635 1,168,695 15.97 148,288.559
3,355,770 22.63
Net Asset Value,
January 31, 2000 3,611,913.698 57,668,146 15.97 9,718,174.671
219,969,311 22.63
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
Morgan Stanley Dean Witter Spectrum Series
Statements of Operations
For the Month Ended January 31, 2000
(Unaudited)
<CAPTION>
Morgan Stanley Dean Witter Morgan
Stanley Dean Witter
Spectrum Strategic
Spectrum Technical .
Percent of
Percent of
January 1, 2000
January 1, 2000
Amount Net Asset Value Amount
Net Asset Value
$ % $ %
REVENUES
<S> <C> <C> <C>
<C>
Trading profit (loss):
Realized (253,926) (0.24)
(8,145,161) (3.03)
Net change in unrealized (498,889) (0.46)
13,144,879 4.89
Total Trading Results (752,815) (0.70)
4,999,718 1.86
Interest Income (DWR) 360,541 0.33
942,131 0.35
Total Revenues (392,274) (0.37)
5,941,849 2.21
EXPENSES
Brokerage fees (DWR) 650,642 0.60 1,623,732
0.61
Management fees 346,140 0.32 895,852
0.33
Incentive fees 662,822 0.62 54,486
0.02
Total Expenses 1,659,604 1.54 2,574,070
0.96
NET INCOME (LOSS) (2,051,878) (1.91)
3,367,779 1.25
Morgan Stanley Dean Witter Spectrum Series
Statements of Changes in Net Asset Value
For the Month Ended January 31, 2000
(Unaudited)
Morgan Stanley Dean Witter Morgan
Stanley Dean Witter
Spectrum Strategic Spectrum
Technical .
Units Amount Per Unit Units
Amount Per Unit
$ $ $
$
<S> <C> <C> <C> <C>
<C> <C>
Net Asset Value,
January 1, 2000 6,795,971.519 107,692,521 15.85 18,027,896.093
268,755,718 14.91
Net Income (Loss) - (2,051,878) (0.31) -
3,367,779 0.18
Redemptions (63,487.897) (986,602) 15.54 (273,918.341)
(4,133,428) 15.09
Subscriptions 208,771.190 3,244,305 15.54 274,077.326
4,135,827 15.09
Net Asset Value,
January 31, 2000 6,941,254.812 107,898,346 15.54 18,028,055.078
272,125,896 15.09
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
Morgan Stanley Dean Witter Spectrum Series
Notes to Financial Statements
(Unaudited)
1. Summary of Significant Accounting Policies
Organization - Morgan Stanley Dean Witter Spectrum Global
Balanced L.P. ("Spectrum Global Balanced"), Morgan Stanley Dean
Witter Spectrum Select L.P. ("Spectrum Select"), Morgan Stanley
Dean Witter Spectrum Strategic L.P. ("Spectrum Strategic") and
Morgan Stanley Dean Witter Spectrum Technical L.P. ("Spectrum
Technical") (individually, a "Partnership", or collectively,
the "Partnerships") are limited partnerships organized to
engage primarily in the speculative trading of futures and
forward contracts, options on futures contracts and on physical
commodities, and other commodities interests, including, but
not limited to, foreign currencies, financial instruments,
precious and industrial metals, energy products, and
agriculturals (collectively, "futures interests"). The general
partner for each Partnership is Demeter Management Corporation
("Demeter"). The non-clearing commodity broker is Dean Witter
Reynolds, Inc. ("DWR") and an unaffiliated clearing commodity
broker, Carr Futures Inc. ("Carr"), provides 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 - Futures interests are open commitments
until settlement date. They are valued at market on a daily
basis and the resulting net change in unrealized gains and
losses is reflected in the changes in unrealized profits (loss)
on open contracts from one period to the next in the statements
of operations. 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 Global 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 Partnerships on
futures interests, but not actually received.
Net Income (Loss) per Unit - Net income (loss) per unit of
limited partnership interest ("Unit(s)") is computed using the
weighted average number of Units outstanding during the period.
Brokerage and Related Transaction Fees and Costs - Brokerage
fees for Spectrum Global Balanced are accrued at a flat monthly
rate of 1/12 of 4.60% (a 4.60% annual rate) of the Net Assets
as of the first day of each month.
<PAGE>
Morgan Stanley Dean Witter Spectrum Series
Notes to Financial Statements
(Continued)
Brokerage fees for Spectrum Select, Spectrum Strategic and
Spectrum Technical are accrued at a flat monthly rate of 1/12
of 7.25% (a 7.25% annual rate) of the Net Assets as of the
first day of each month.
Such fee covers 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 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
close of business on the last day of the month. No selling
commissions or charges related to the continuing offering of
Units are borne by the limited partners or the Partnership.
DWR will pays 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 are 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 are 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 are not subject to a redemption charge. The
foregoing redemptions charges are paid to DWR. 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.
<PAGE>
Morgan Stanley Dean Witter Spectrum Series
Notes to Financial Statements
(Continued)
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 at the end of each month
thereafter, Limited Partners may exchange their investment
among the Partnerships (subject to certain restrictions
outlined in the Limited Partnership Agreements) without paying
additional charges.
Dissolution of the Partnership - Spectrum Global 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 under certain conditions 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 futures interests trading accounts to meet margin
requirements as needed. DWR pays interest on these funds as
described in Note 1.
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:
Morgan Stanley Dean Witter Spectrum Global Balanced L.P.
RXR, Inc.
Morgan Stanley Dean Witter Spectrum Select L.P.
EMC Capital Management, Inc.
Rabar Market Research, Inc.
Sunrise Capital Management, Inc.
Morgan Stanley Dean Witter Spectrum Strategic L.P.
Allied Irish Capital Management, Ltd. ("AICM")
Blenheim Investments, Inc. ("Blenheim")
Willowbridge Associates Inc. ("Willowbridge")
Demeter adjusted the allocation of Net Assets among the trading
advisors within Spectrum Strategic effective June 30, 1999. Net
proceeds received by Spectrum Strategic at each monthly closing
are now allocated 75% to AICM, 0% to Blenheim, and 25% to
Willowbridge Additionally, 100% of redemptions are allocated to
Blenheim.
<PAGE>
Morgan Stanley Dean Witter Spectrum Series
Notes to Financial Statements
(Concluded)
Morgan Stanley Dean Witter Spectrum Technical L.P.
Campbell & Company, Inc.) ("Campbell")
Chesapeake Capital Corporation ("Chesapeake")
John W. Henry & Company, Inc. ("JWH")
Compensation to the trading advisors by the Partnerships
consists of manage-ment fees and incentive fees as follows:
Management Fee - The management fee for Spectrum Global
Balanced is accrued at a rate of 5/48 of 1% of the Net Assets
on the first day of each month (a 1.25% annual rate).
The management fee for Spectrum Select is accrued at a rate of
1/4 of 1% per month of the Net Assets allocated to each trading
advisor on the first day of each month (a 3% annual rate).
The management fee for Spectrum Strategic is 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 AICM on the first day of each
month (annual rates of 4% and 3%, respectively).
The management fee for Spectrum Technical is accrued at a 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).
Incentive Fee - Spectrum Global Balanced, Spectrum Select and
Spectrum Strategic pay a monthly incentive fee equal to 15% of
the "Trading Profits" as defined in their Limited Partnership
Agreements, experienced with respect to each trading advisor's
allocated Net Assets as of the end of each calendar month.
Spectrum Technical pays a monthly incentive fee equal to 15% of
the Trading Profits experienced with respect to the Net Assets
allocated to Campbell and JWH and 19% of the Trading Profits
experienced with respect to the Net Assets allocated to
Chesapeake as of the end of each calendar month.
For all Partnerships when Trading Losses are incurred, no
incentive fees are paid in subsequent months until the
individual trading advisor recover their losses. Cumulative
trading losses are adjusted on a pro-rata basis for the net
amount of each months subscriptions and redemptions.
