Dean Witter Spectrum Series
Monthly Report
November 1997
Dear Limited Partner:
The Net Asset Value per Unit for each of the three Dean Witter Spectrum
Funds as of November 30, 1997 was as follows:
Funds N.A.V. % change for month
Spectrum Balanced $13.34 -0.37%
Spectrum Strategic $10.14 -2.16%
Spectrum Technical $13.99 1.05%
In Spectrum Balanced, a balanced portfolio of stocks, bonds and managed
futures utilizing the futures, options and forward markets, small losses
were recorded during November primarily from long positions in U.S.
Treasury note futures in the bond portion of the balanced portfolio as
prices in this market moved lower early in the month. A majority of these
losses was offset by gains recorded in the stock portion of the portfolio
from long S&P 500 Index futures positions as domestic stock prices rallied
late in the month after declining in late October and early November. In
the managed futures component of the balanced portfolio, losses were
recorded from long positions in energy futures as oil and gas prices
declined on news that tensions were easing in the Middle East. Smaller
losses were recorded in the agricultural markets from long corn futures
positions as corn prices finished the month lower. Gains recorded from
short cotton futures positions also helped to mitigate overall Fund losses
during the month.
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 experienced in global financial
futures from short positions in U.S., Hong Kong and German stock index
futures as most global equity prices rebounded higher after moving sharply
lower in late October and early November. A portion of these losses was
offset by gains from long positions in German and Italian bond futures. In
soft commodities, losses were recorded from long positions in cocoa futures
as cocoa prices moved lower. Smaller losses were recorded from long
positions in energy futures as oil and gas prices declined in reaction to
easing tensions in the Middle East. These losses were partially offset by
gains recorded in currencies from short Japanese yen positions as the value
of the yen weakened versus the U.S. dollar on concerns over the stability
of the Asian economic crisis. Smaller profits recorded from long silver
and soybean meal futures positions, as prices in these markets increased,
also helped to offset a portion of the Fund's overall losses 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 were recorded from
short positions in the Japanese yen as the value of the yen trended lower
relative to the U.S. dollar and other major currencies due to economic
uncertainty in the Asian financial markets. Additional currency gains were
recorded from long British pound positions as the value of the pound moved
higher on news of an interest rate increase by the Bank of England. In
metals, profits were recorded from short positions in gold futures as gold
prices broke below $300 an ounce for the first time in over twelve years,
as well as from short positions in copper futures and long positions in
silver futures. These gains were partially offset by losses experienced in
the energy markets from long positions in natural gas futures as price
moved lower. Smaller losses were recorded in financial futures from long
positions in Japanese and Australian government bond futures as prices in
these market moved lower, thus giving back a portion of previous months'
profits.
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 (11 months) 14.7%
Inception-to-Date Return: 33.4%
Annualized Return: 9.8%
___________________________________________________________________________
__________
Spectrum Strategic
1994 (2 months) 0.1%
1995 10.5%
1996 -3.5%
1997 (11 months) -5.0%
Inception-to-Date Return: 1.4%
Annualized Return: 0.5%
___________________________________________________________________________
__________
Spectrum Technical
1994 (2 months) -2.2%
1995 17.6%
1996 18.4%
1997 (11 months) 2.8%
Inception-to-Date Return: 39.9%
Annualized Return: 11.5%
</TABLE>
<PAGE>
<TABLE>
Statements of Operations
For the Month Ended November 30, 1997
(Unaudited)
<CAPTION>
Dean Witter Spectrum Balanced
Percent of
November 1, 1997
Beginning
Amount Net Asset Value
$ %
REVENUES
<S> <C> <C>
Trading Profit (Loss):
Realized 167,088 .69
Net change in unrealized (236,526) (.97)
Total Trading Results (69,438) (.28)
Interest Income (DWR) 103,426 0.42
Total Revenues 33,988 .14
EXPENSES
Brokerage commissions (DWR) 99,548 0.41
Management fees 25,395 0.10
Total Expenses 124,943 0.51
NET INCOME (LOSS) (90,955) (.37)
Statements of Changes in Net Asset Value
For the Month Ended November 30, 1997
(Unaudited)
Dean Witter Spectrum Balanced
Units Amount Per Unit
$ $
<S> <C> <C>
<C>
Net Asset Value,
November 1, 1997 1,920,370.731 24,379,212 13.39
Net Income (Loss) - (90,955) (.05)
Redemptions (15,288.031) (203,942) 13.34
Subscriptions 26,028.749 347,223 13.34
Net Asset Value,
November 30, 1997 1,831,111.449 24,431,538 13.34
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, 1997 November 1, 1997
Beginning Beginning
Amount Net Asset Value Amount Net Asset Value
$ % $ %
<C> <C> <C> <C>
(1,087,305) (1.89) 1,700,933 1.01
205,737 .36 1,160,612 .69
(881,568) (1.53) 2,861,545 1.70
196,630 0.34 552,274 0.32
(684,938) (1.19) 3,413,819 2.02
366,560 0.64 1,075,546 0.64
191,665 0.33 562,377 0.33
558,225 0.97 1,637,923 0.97
(1,243,163) (2.16) 1,775,896 1.05
Dean Witter Spectrum Strategic Dean Witter Spectrum Technical
Units Amount Per Unit Units Amount Per Unit
$ $ $ $
<C> <C> <C> <C> <C> <C>
5,545,876.601 57,499,522 10.37 12,185,185.704 168,713,115 13.85
- (1,243,163) (0.23) - 1,775,896 0.14
(47,004.096) (476,622) 10.14 (69,670.387) (974,689) 13.99
68,772.690 697,355 10.14 185,460.823 2,594,597 13.99
5,567,645.195 56,477,092 10.14 12,300,976.140 172,108,919 13.99
</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 for most of the
Partnership's transactions is Dean Witter Reynolds Inc. ("DWR"). Both DWR
and Demeter are wholly-owned subsidiaries of Morgan Stanley, Dean Witter,
Discover & Co. ("MSDWD").
On July 31, 1997, DWR closed the sale of its institutional futures business
and foreign currency trading operations to Carr Futures Inc. ("Carr"), a
subsidiary of Credit Agricole Indosuez. Following the sale, Carr became
the counterparty on the Partnership's foreign currency trades. However,
during a transition period of about four months, DWR will continue to
perform certain services relating to the Partnership's futures trading
including clearance. After such transition period, DWR will continue to
serve as a non-clearing commodity broker for the Partnership with Carr
providing all clearing services for Partnership transactions.
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.
<PAGE>
Dean Witter Spectrum Series L.P.
Notes to Financial Statements -
(Continued)
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.
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.
<PAGE>
Dean Witter Spectrum Series L.P.
Notes to Financial Statements
(Continued)
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 and Carr 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 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.
<PAGE>
Dean Witter Spectrum Series L.P.
Notes to Financial Statements
(Concluded)
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,
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.
