Dean Witter Spectrum Series
Monthly Report
September 1997
Dear Limited Partner:
The Net Asset Value per unit for each of the three Dean
Witter Spectrum Funds as of September 30, 1997 was as
follows:
Funds N.A.V. % change for month
Spectrum Balanced $13.62 3.29% Spectrum
Strategic $11.06 -6.02%
Spectrum Technical $13.80 1.85%
In Spectrum Balanced, a balanced portfolio of stocks, bonds
and managed futures utilizing the futures, options and
forwards markets, profits were recorded during September
primarily from long positions in the stock and bond portions
of the balanced portfolio, as U.S. stock index and bond
futures prices finished the month higher. Additional gains
were recorded in the managed futures portion of the
portfolio from long positions in these same markets, as well
as from long positions in Australian, Japanese and European
interest rate futures, as most international bond prices
also moved higher. Smaller profits were recorded in
currencies as long positions in the German mark, as well as
in the Swiss and French francs, profited from an increase in
value relative to other world currencies. Additional
currency gains were recorded from transactions involving the
British pound and Spanish peseta. In tangible commodities,
gains from long positions in natural gas futures, as prices
increased dramatically during the month, more than offset
losses in soft commodities.
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,
losses were posted for the month primarily from short
positions in S&P 500 Index futures as U.S. equity prices
moved higher. In soft commodities, losses were recorded
from long positions in sugar, cocoa and lumber futures as
prices in these markets declined during September. Smaller
losses were recorded in agricultural futures from long
positions in corn and wheat futures as prices in these
markets also moved lower during the month. A portion of the
Fund's overall losses during the month was offset by gains
recorded in metals from short positions in copper futures,
as copper prices moved lower early in the month, and long
positions in gold and silver futures, as precious metals
prices increased.
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 forwards markets, gains were recorded primarily
from an increase in global bond futures prices during the
month. As a result of this upward price move, profits were
recorded from long positions in Japanese, Australian and
European interest rate futures. Additional gains were
recorded in global stock index futures from long positions
in European and U.S. stock index futures, as prices in these
markets increased, and from short positions in Japanese
stock index futures, as Japanese equity prices continued to
decline. Smaller gains were
recorded in the energy markets as long natural gas futures
positions profited from a
significant price increase. These gains were partially
offset by losses experienced from previously established
short positions in the German mark and Swiss franc as the
value of these currencies moved higher relative to the U.S.
dollar. Smaller losses recorded from trendless price
movement in soft commodities also mitigated overall Fund
profits for the month.
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
<PAGE>
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 (9 months) 17.1%
Inception-to-Date Return: 36.2%
Annualized Return: 11.2%
__________________________________________________________
__ _________________________
Spectrum Strategic
1994 (2 months) 0.1%
1995 10.5%
1996 -3.5%
1997 (9 months) 3.7%
Inception-to-Date Return: 10.6%
Annualized Return: 3.5%
__________________________________________________________
__ _________________________
Spectrum Technical
1994 (2 months) -2.2%
1995 17.6%
1996 18.4%
1997 (9 months) 1.4%
Inception-to-Date Return: 38.0%
Annualized Return: 11.7%
</TABLE>
<PAGE>
<TABLE>
Statements of Operations
For the Month Ended September 30, 1997
(Unaudited)
<CAPTION>
Dean Witter
Spectrum Balanced
Percent of
September 1,
1997 Beginning
Amount Net Asset Value
$ %
REVENUES
<S> <C>
<C>
Trading Profit (Loss):
Realized 1,615,426
7.04
Net change in unrealized (842,660)
(3.67)
Total Trading Results 772,766 3.37
Interest Income (DWR) 99,787 .43
Total Revenues 872,553
3.80
EXPENSES
Brokerage commissions (DWR) 93,741 .41
Management fees 23,913 .10
Total Expenses 117,654
.51
NET INCOME (LOSS) 754,899
3.29
Statements of Changes in Net Asset Value
For the Month Ended September 30, 1997
(Unaudited)
Dean Witter Spectrum
Balanced Units Amount
Per Unit
$ $
<S> <C>
<C> <C>
Net Asset Value,
September 1, 1997 1,740,926.279 22,956,839
13.19
Net Income (Loss) - 754,899
.43
Redemptions (12,719.567) (173,241)
13.62
Subscriptions 41,477.508 564,924
13.62
Net Asset Value,
September 30, 1997 1,769,684.220 24,103,421
13.62 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
September 1, 1997 September 1,
1997
Beginning
Beginning
Amount Net Asset Value Amount Net Asset
Value
$ % $ %
<C> <C> <C>
<C>
(2,717,535) (4.37) 5,142,359 3.27
(621,461) (1.00) (1,244,444)
(.79)
(3,338,996) (5.37)
3,897,915 2.48
201,576 .32
538,153
.34
(3,137,420) (5.05)
4,436,068 2.82
396,037 .64
1,002,196
.64
207,078 .33
524,024
.33
603,115 .97
1,526,220
.97
(3,740,535) (6.02)
2,909,848 1.85
Dean Witter Spectrum Strategic Dean Witter Spectrum Technical
Units Amount Per Unit Units Amount Per
Unit
$ $ $ $
<C> <C> <C> <C> <C> <C>
5,278,692.956 62,123,362 11.77 11,601,728.467 157,207,256
13.55 - (3,740,535) (.71) - 2,909,848
.25
(44,646.209) (493,787) 11.06 (82,366.491) (1,136,658)
13.80
186,822.617 2,066,258 11.06 393,495.503 5,430,237 13.80
5,420,869.364 59,955,298 11.06 11,912,857.479 164,410,683
13.80
</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 Morgan
Stanley, Dean Witter, Discover & Co. ("MSDWD").
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.
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.
<PAGE>
Dean Witter Spectrum Series L.P.
Notes to Financial Statements -
(Continued)
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.
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 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.
<PAGE>
Dean Witter Spectrum Series L.P.
Notes to Financial Statements
(Continued)
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.
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,
<PAGE>
Dean Witter Spectrum Series L.P.
Notes to Financial Statements
(Concluded)
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.
