Dean Witter Spectrum Series
Monthly Report
June 1997
Dear Limited Partner:
The Net Asset Value per unit for each of the three Dean Witter Spectrum
Funds as of June 30, 1997 was as follows:
Funds N.A.V. % change for month
Spectrum Balanced $12.53 3.65%
Spectrum Strategic $11.50 -1.62%
Spectrum Technical $13.18 .66%
In Spectrum Balanced, a balanced portfolio of stocks, bonds and managed
futures utilizing the futures, options and forwards markets, gains were
recorded during June in the stock and bond portions of the balanced
portfolio, as U.S. stock and bond prices continue to move higher. In the
managed futures portion of the portfolio, gains were recorded from long
Australian bond futures as prices increased during the month. Gains were
also recorded from long Japanese yen positions as the value of the yen
moved higher versus the U.S. dollar and other major currencies during the
month. Smaller gains were recorded from short positions in soybean oil and
corn futures as prices in these markets moved lower during the month. A
portion of the Fund's gains was offset by losses recorded in the energy
markets from trading crude oil and natural gas futures, as oil and gas
prices continued to move in a short-term volatile pattern.
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 from long
positions in soybean products as prices moved lower during the month.
Additional losses were recorded in Japanese bond futures as prices moved in
a choppy pattern. In the metals markets, losses were recorded from long
copper futures positions as copper prices moved lower late in the month
after increased during the past several months. In the currency markets,
losses were recorded from trading the Swiss franc and German mark as the
value of these currencies moved in a choppy pattern. Gains recorded from
long positions in the Japanese yen, as the value of the yen moved higher
relative to the U.S. dollar, offset a portion of these currency losses.
Gains recorded in the soft commodities markets from previously established
long positions in cocoa futures also helped to offset losses elsewhere.
Smaller gains were recorded from trading crude oil and heating oil 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 forwards markets, gains were recorded
during June from long Australian and U.S. interest rate futures as prices
in these markets trended higher. In global stock index futures, gains were
recorded from long positions as global equity prices continued to trend
higher. In currency trading, gains were recorded from long positions in
the Japanese yen as the value of the yen moved higher versus the U.S.
dollar during the month. In metals, gains recorded from short gold futures
positions, as precious metals prices moved lower, offset losses recorded
from long copper futures positions, as prices moved lower late in the
month. Smaller gains were recorded from short corn and soybean oil futures
positions as prices in these markets moved lower during the month. A
portion of the Fund's gains was offset by losses recorded from previously
established long coffee futures positions as coffee prices reversed sharply
lower after trending higher in previous months.
I would also like to take this opportunity to inform Limited Partners that
effective August 1, 1997, the flat-rate brokerage fee for each of the Funds
in the Spectrum Series will be reduced by .60% per annum. For Spectrum
Strategic Fund and Spectrum Technical Fund, the brokerage fee will be
reduced from 8.25% per annum to 7.65% per annum, and for Spectrum Balanced
Fund, the brokerage fee will be reduced from 5.50% per annum to 4.90% per
annum.
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 (6 months) 7.7%
Inception-to-Date Return: 25.3
Annualized Return: 8.8%
___________________________________________________________________________
_____________________________
Spectrum Strategic
1994 (2 months) 0.1%
1995 10.5%
1996 -3.5%
1997 (6 months) 7.8%
Inception-to-Date Return: 15.09%
Annualized Return: 5.4%
___________________________________________________________________________
_____________________________
Spectrum Technical
1994 (2 months) -2.2%
1995 17.6%
1996 18.4%
1997 (6 months) -3.2%
Inception-to-Date Return: 31.8%
Annualized Return: 10.9%
</TABLE>
<PAGE>
<TABLE>
Statements of Operations
For the Month Ended June 30, 1997
(Unaudited)
<CAPTION>
Dean Witter Spectrum
Balanced
Percent of
June 1, 1997
Beginning
Amount Net Asset Value
$ %
REVENUES
<S> <C> <C>
Trading Profit (Loss):
Realized 498,967 2.47
Net change in unrealized 260,655 1.29
Total Trading Results 759,622 3.76
Interest Income (DWR) 91,121 0.45
Total Revenues 850,743 4.21
EXPENSES
Brokerage commissions 92,469 0.46
Management fees 21,016 0.10
Total Expenses 113,485 0.56
NET INCOME (LOSS) 737,258 3.65
Statements of Changes in Net Asset Value
For the Month Ended June 30, 1997
(Unaudited)
Dean Witter Spectrum Balanced
Units Amount Per Unit
$ $
<S> <C>
<C> <C>
Net Asset Value,
June 1, 1997 1,669,173.916 20,174,967 12.09
Net Income (Loss) - 737,258 0.44
Redemptions (31,229.197) (391,302) 12.53
Subscriptions 49,107.347 615,315 12.53
Net Asset Value,
June 30, 1997 1,687,052.066 21,136,238 12.53
The accompanying notes are an integral part of these
financial statements.
</TABLE>
<TABLE>
<CAPTION>
Dean Witter Spectrum Strategic Dean Witter Spectrum Technical
Percent of
Percent of
June 1, 1997
June 1, 1997
Beginning
Beginning
Amount Net Asset Value Amount Net Asset
Value
$ % $ %
<C> <C> <C> <C>
(2,365,954) (4.16) 2,783,600 1.99
1,826,257 3.21 (912,342) (0.65)
(539,697) (0.95) 1,871,258 1.34
197,054 0.35 484,622 0.34
(342,643) (0.60) 2,355,880 1.68
391,144 0.69 961,658 0.69
189,646 0.33 466,258 0.33
580,790 1.02 1,427,916 1.02
(923,433) (1.62) 927,964 0.66
Dean Witter Spectrum Strategic Dean Witter Spectrum Technical
Units Amount Per Unit Units Amount Per Unit
$ $ $ $
<C> <C> <C> <C> <C> <C>
4,866,533.857 56,893,698 11.69 10,684,599.257 139,877,455 13.09
- (923,433) (0.19) - 927,964 0.09
(89,592.702) (1,030,316) 11.50 (157,139.183) (2,071,094) 13.18
150,914.300 1,735,514 11.50 392,164.325 5,168,726 13.18
4,927,855.455 56,675,463 11.50 10,919,624.399 143,903,051 13.18
</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
11/24 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 33/48 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.
<PAGE>
Dean Witter Spectrum Series L.P.
Notes to Financial Statements -
(Continued)
.
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.
