Dean Witter Spectrum Series
Monthly Report
January 1997
Dear Limited Partner:
The Net Asset Value per unit for the Dean Witter Spectrum Funds as of
January 31, 1997 was as follows:
Fund N.A.V. % Change for Month
Spectrum Balanced $12.02 3.37%
Spectrum Strategic $10.60 -0.65%
Spectrum Technical $14.11 3.62%
In Spectrum Balanced, a balanced portfolio of stocks, bonds and managed
futures utilizing the futures, options and forward markets, profits were
recorded during January in the currency markets due primarily to a weakening
in the value of most major currencies relative to the U.S. dollar. The
majority of these gains recorded in the managed futures portion of the
portfolio were from short positions in the Swiss franc, Italian lira,
French franc and German mark. Additional gains were recorded in the stock
portion of the portfolio from long S&P 500 Index futures positions as
domestic stock prices moved higher during the month. A portion of these
gains was offset by losses recorded in the managed futures portion of
the portfolio from trendless price movement in the agricultural, soft
commodities and energy markets. In the bond portion of the portfolio,
small losses were recorded as U.S. Treasury note futures prices moved
in a choppy pattern.
In Spectrum Strategic, a Fund managed by three trading advisors who
employ fundamental trading methodologies in a diverse portfolio of
futures, options and forward markets, the Fund posted net losses for
the month due primarily to choppy price movement in global interest
rate futures, particularly in U.S. European and Japanese interest
rate futures. In global stock index futures, losses were recorded
from short S&P 500 Index futures as prices moved higher during the
month. Additional losses were recorded from trading cocoa futures
as prices moved without consistent direction. A portion of the Fund's
overall losses was offset by gains recorded in the currency markets
from short positions in the Swiss franc and Japanese yen as the value
of these currencies declined relative to the U.S. dollar. In metals,
gains were recorded from long nickel, zinc and aluminum futures
positions as prices in these markets moved higher. Gains were also
recorded from long soybean futures positions, as prices moved higher,
and from short gas oil, crude oil and natural gas futures positions,
as energy prices moved lower during the month.
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, gains during
January were recorded in the currency, metals and financial futures
markets. Currency gains were recorded from short positions in the
German mark, Swiss franc and Japanese yen as the value of these
currencies trended lower versus the U.S. dollar. In metals, gains
were recorded from short positions in gold futures as prices declined
to their lowest levels in three year. In stock index futures, short
Nikkei Index futures positions profited as Japanese stock prices moved
lower. Smaller gains were recorded from long U.S. and European stock
index futures positions. Gains recorded from long French and Japanese
<PAGE>
bond futures positions more than off-set losses recorded in most other
global interest rate futures due to choppy price movement. Trading
losses from long crude oil, heating oil and unleaded gas futures
positions, as prices in these markets moved lower, offset a portion
of the overall Fund gains during 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
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 3.4%
Inception-to-Date Return: 20.2%
Annualized Return: 8.5%
________________________________________________________________________________________________________
Spectrum Strategic
1994(2 months) 0.1%
1995 10.5%
1996 -3.5%
1997 0.7%
Inception-to-Date Return: 6.0%
Annualized Return: 2.6%
________________________________________________________________________________________________________
Spectrum Technical
1994(2 months) -2.2%
1995 17.6%
1996 18.4%
1997 3.7%
Inception-to-Date Return: 41.1%
Annualized Return: 16.5%
</TABLE>
<PAGE>
<TABLE>
Statements of Operations
For the Month Ended January 31, 1997
(Unaudited)
<CAPTION>
Dean Witter Spectrum Balanced
Percent of
January 1, 1997
Beginning
Amount Net Asset Value
$ %
REVENUES
<S> <C> <C>
Trading Profit (Loss):
Realized (381,880) (2.04)
Net change in unrealized (1,032,111) 5.52
Total Trading Results 650,231 3.48
Interest Income 84,936 0.45
Total Revenues 735,167 3.93
EXPENSES
Brokerage commissions 85,737 0.46
Management fees 19,485 0.10
Incentive fee - -
Total Expenses 105,222 0.56
NET INCOME (LOSS) 629,945 3.37
Statements of Changes in Net Asset Value
For the Month Ended January 31, 1997
(Unaudited)
Dean Witter Spectrum Balanced
Units Amount Per Unit
$ $ $
<S> <C> <C> <C>
Net Asset Value,
January 1, 1997 1,609,108.931 18,706,255 11.63
Net Income (Loss) - 629,945 0.39
Redemptions (22,752.032) (273,479) 12.02
Subscriptions 28,211.257 339,099 12.02
Net Asset Value,
January 31, 1997 1,614,568.156 19,401,820 12.02
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
January 1, 1997 January 1, 1997
Beginning Beginning
Amount Net Asset Value Amount Net Asset Value
$ % $ %
<C> <C> <C> <C>
(385,538) (0.85) (172,955) (0.15)
393,547 0.87 5,239,156 4.63
8,009 0.02 5,066,201 4.48
161,400 0.36 386,564 0.34
169,409 0.38 5,452,765 4.82
310,192 0.69 776,776 0.69
150,396 0.34 376,619 0.33
- - 204,550 0.18
460,588 1.03 1,357,945 1.20
(291,179) (0.65) 4,094,820 3.62
Dean Witter Spectrum Strategic Dean Witter Spectrum Technical
Units Amount Per Unit Units Amount Per Unit
$ $ $ $
<C> <C> <C> <C> <C> <C>
4,229,101.851 45,118,877 10.67 8,300,169.234 112,985,629 13.61
- (291,179) (0.07) - 4,094,820 0.50
(60,170.750) (637,810) 10.60 (55,614.295) (784,717) 14.11
98,933.434 1,048,694 10.60 371,367.932 5,240,002 14.11
4,267,864.535 45,238,582 10.60 8,615,922.871 121,535,734 14.11
</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 each 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.
<PAGE>
Dean Witter Spectrum Series L.P.
Notes to Financial Statements -
(Continued)
Brokerage fees for Spectrum Strategic and 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.
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
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.
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.
4. 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.
