Dean Witter Spectrum Series
Monthly Report
November 1996
Dear Limited Partner:
The Net Asset Value per unit for the Dean Witter Spectrum Funds as of
November 30, 1996 was as follows:
Funds N.A.V. % change for month
Spectrum Balanced $12.09 4.68%
Spectrum Strategic $10.96 3.49%
Spectrum Technical $14.16 8.34%
In Spectrum Balanced, a balanced portfolio of stocks, bonds and managed
futures utilizing the futures, options and forward markets, the most
significant gains were recorded in the managed futures portion of the
portfolio from long global bond futures positions as prices continued
to move higher during the month. Additional gains were recorded in the
bond portion of the portfolio from long U.S. Treasury note and bond futures
positions and in the stock portion of the portfolio from long S&P 500
Index futures positions as prices in these markets also increased in value
during the month. Smaller gains were recorded in the managed futures portion
of the portfolio from trading natural gas and aluminum futures. A portion of
these gains was offset by smaller losses in the agricultural, currency and
soft commodities markets.
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 net gains for the month primarily as a
result of gains recorded in the financial futures and metals markets. Gains
were recorded from long global stock index futures, as well as from long U.S.
and French bond futures, as prices in these markets moved higher during the
month. Losses from Japanese government bond futures trading offset a portion
of these gains. In metals trading, gains were recorded from long copper
futures, as prices moved higher, and from short gold futures positions, as
precious metals prices moved lower. In the currency markets, gains for the
Fund were recorded from previously established long British pound positions
as its value continued to increase relative to the U.S. dollar and other
world currencies, and from short Swiss franc positions as its value declined
versus the U.S. dollar. Trading gains were also recorded from long soybean
futures as prices moved higher early in the month.
Smaller gains were recorded in the energy markets from trading natural gas,
and in soft commodities from trading cocoa futures.
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, the Fund recorded significant gains
in global interest rate futures and currency markets. Gains were recorded
from previously established long positions in European, U.S., Japanese and
Australian bond futures as global bond prices markets continued to trend
higher. In currencies, profits were recorded from transactions involving the
Japanese yen, German mark and Canadian dollar offset a portion of overall
currency gains for the month. Trading gains were also recorded in the metals
markets from trading long copper futures, as prices trended higher, and from
short gold futures, as precious metals prices trended lower. Additional gains
were experienced from trading natural gas and crude oil futures. A portion
of the Fund's gains was offset by losses experienced in soft commodities
and agricultural markets as prices in these markets moved without consistent
direction during most of November.
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>
Statements of Operations
For the Month Ended November 30, 1996
(Unaudited)
<CAPTION>
Dean Witter Spectrum Balanced
Percent of
November 1, 1996
Beginning
Amount Net Asset Value
$ %
REVENUES
<S> <C> <C>
Trading Profit (Loss):
Realized 580,204 3.01
Net change in unrealized 370,028 1.92
Total Trading Results 950,232 4.93
Interest Income (DWR) 81,510 .43
Total Revenues 1,031,742 5.36
EXPENSES
Brokerage commissions (DWR) 88,263 .46
Management fees 20,060 .10
Incentive fees - -
Total Expenses 108,323 .56
NET INCOME 923,419 4.80
Statements of Changes in Net Asset Value
For the Month Ended November 30, 1996
(Unaudited)
Dean Witter Spectrum Balanced
Units Amount Per Unit
$ $ $
<S> <C> <C> <C>
Net Asset Value,
November 1, 1996 1,667,829.222 19,257,428 11.55
Net Income 0 923,419 .55
Redemptions (20,970.836) (253,747) 12.10
Subscriptions 14,688.761 177,734 12.10
Net Asset Value,
November 30, 1996 1,661,547.147 20,104,834 12.10
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
November 1, 1996 November 1, 1996
Beginning Beginning
Amount Net Asset Value Amount Net Asset Value
$ % $ %
<C> <C> <C>
4,322,687 9.48 6,446,922 6.27
(2,335,636) (5.12) 4,225,320 4.11
1,987,051 4.36 10,672,242 10.38
153,721 .33 324,985 .32
2,140,772 4.69 10,997,227 10.70
313,400 .69 706,381 .69
151,951 .33 342,488 .33
46,885 .10 1,386,359 1.35
512,236 1.12 2,435,228 2.37
1,628,536 3.57 8,561,999 8.33
<CAPTION>
Dean Witter Spectrum Strategic Dean Witter Spectrum Technical
Units Amount Per Unit Units Amount Per Unit
$ $ $ $
<C> <C> <C> <C> <C> <C>
4,306,029.209 45,585,383 10.59 7,861,351.078 102,746,265 13.07
0 1,628,536 .37 0 8,561,999 1.09
(88,112.183) (965,709) 10.96 (68,644.743) (972,010) 14.16
72,801.079 797,900 10.96 181,723.476 2,573,205 14.16
4,290,718.105 47,046,110 10.96 7,974,429.811 112,909,459 14.16
</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
The 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.
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 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 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.
