Dean Witter Spectrum Series
Monthly Report
March 1997
Dear Limited Partner:
The Net Asset Value per unit for the Dean Witter Spectrum Funds as of March 31,
1997 was as follows:
Funds N.A.V. % change for month
Spectrum Balanced $12.09 -2.49%
Spectrum Strategic $12.46 +6.75%
Spectrum Technical $14.01 -1.79%
In Spectrum Balanced, a balanced portfolio of stocks, bonds and managed futures
utilizing the futures, options and forwards markets, losses were recorded
during March in the stock portion from long S&P 500 Index futures positions
as domestic stock prices moved lower during the month. Additional losses
were recorded in the managed futures portion of the portfolio from short
positions in most European currencies as their values strengthened relative
to the U.S. dollar, after trending lower previously. A portion of these
losses was offset by currency gains from short positions in the Singapore
dollar as its value moved sharply lower versus the U.S. dollar. Additional
losses in the managed futures component were recorded from long
soybean oil futures positions, as prices moved lower, and from short crude
oil futures positions, as prices reversed higher early in the month. Gains
in the managed futures portion of the Fund from short positions in U.S.
interest rate futures, offset losses recorded from long positions in the
bond portion of the Fund, as domestic bond prices moved sharply lower.
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 significant gains for the month due
primarily to short positions in U.S. interest rate futures as prices declines
sharply late in the month. Additional gains were recorded from short
positions in Italian bond futures. In global stock index futures, gains were
recorded from short positions in S&P 500 Index futures as prices moved lower
during the month. Additional gains were recorded from long positions in
soybean futures, as well as in cocoa futures, as prices in these markets moved
higher. Smaller gains were recorded from long positions in energy futures as
positions reversed higher early in the month. A portion of the Fund's gains
for the month was offset by losses recorded in metals from long silver and
aluminum futures positions as prices finished the month lower. In currency
trading, losses were recorded from long Canadian dollar positions as its value
moved lower relative to the U.S. dollar, and from short Swiss franc positions
as its value increased versus the U.S. dollar. A portion of these losses was
offset by currency gains recorded from short Japanese yen positions, as the
value of the yen continued to trend lower versus the U.S. dollar.
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, losses were recorded
during March due primarily to short positions in the Swiss franc and German
mark as the value of these currencies increased versus the U.S. dollar, after
trending lower previously. Additional losses were recorded from transactions
involving the British pound and Australian dollar. A portion of these losses
was offset by gains recorded from short Japanese yen positions as the value of
the yen continued to trend lower versus the U.S. dollar. Losses were also
recorded from short positions in the energy markets as oil and gas prices
reversed higher early in the month, thus giving back a portion of February's
profits. In financial futures, gains recorded from short positions in U.S.
interest rate futures, as prices declined sharply late in the month, were
offset by losses recorded from choppy price movement in most European interest
rate futures. A portion of the Fund's overall losses for the month was offset
by gains recorded from long positions in agricultural futures as prices
continued to trend higher during March.
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
<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 months) 4.0%
Inception-to-Date Return: 20.9%
Annualized Return: 8.2%
________________________________________________________________________________________________________
Spectrum Strategic
1994(2 months) 0.1%
1995 10.5%
1996 -3.5%
1997(3 months) 16.8%
Inception-to-Date Return: 24.6%
Annualized Return: 9.6%
________________________________________________________________________________________________________
Spectrum Technical
1994(2 months) -2.2%
1995 17.6%
1996 18.4%
1997(3 months) 2.9%
Inception-to-Date Return: 40.1%
Annualized Return: 15.0%
</TABLE>
<PAGE>
<TABLE>
Statements of Operations
For the Month Ended March 31, 1997
(Unaudited)
<CAPTION>
Dean Witter Spectrum Balanced
Percent of
March 1, 1997
Beginning
Amount Net Asset Value
$ %
REVENUES
<S> <C> <C>
Trading Profit (Loss):
Realized 911,443 4.58
Net change in unrealized (1,382,094) (6.95)
Total Trading Results (470,651) (2.37)
Interest Income (DWR) 87,194 .44
Total Revenues (383,457) (1.93)
EXPENSES
Brokerage commissions (DWR) 91,172 .46
Management fees 20,721 .10
Incentive fees - -
Total Expenses 111,893 .56
NET INCOME (LOSS) (495,350) (2.49)
Statements of Changes in Net Asset Value
For the Month Ended March 31, 1997
(Unaudited)
Dean Witter Spectrum Balanced
Units Amount Per Unit
$ $ $
<S> <C> <C> <C>
Net Asset Value,
March 1, 1997 1,603,743.755 19,891,974 12.40
Net Income - (495,350) (.31)
Redemptions (14,176.035) (171,388) 12.09
Subscriptions 42,238.409 510,662 12.09
Net Asset Value,
February 28, 1997 1,631,806.129 19,735,898 12.09
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
March 1, 1997 March 1, 1997
Beginning Beginning
Amount Net Asset Value Amount Net Asset Value
$ % $ %
<C> <C> <C> <C>
829,927 1.65 3,125,561 2.41
3,141,831 6.26 (4,557,427) (3.51)
3,971,758 7.91 (1,431,866) (1.10)
177,416 .35 431,837 .33
4,149,174 8.26 (1,000,029) (.77)
345,217 .69 892,671 .69
167,377 .33 432,810 .33
243,625 .49 0 .00
756,219 1.51 1,325,481 1.02
3,392,955 6.75 (2,325,510) (1.79)
Dean Witter Spectrum Strategic Dean Witter Spectrum Technical
Units Amount Per Unit Units Amount Per Unit
$ $ $ $
<C> <C> <C> <C> <C> <C>
4,302,579.108 50,213,183 11.67 9,100,716.574 129,843,013 14.27
- 3,392,955 .79 - (2,325,510) (.26)
(24,103.408) (300,328) 12.46 (33,437.805) (468,464) 14.01
229,072.449 2,854,243 12.46 751,761.938 10,532,184 14.01
4,507,548.149 56,160,053 12.46 9,819,040.707 137,581,223 14.01
</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
Each 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. ("JWH")
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 (including JWH) 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 (including JWH) 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.
