Dean Witter Spectrum Series
Monthly Report
December 1997
Dear Limited Partner:
The Net Asset Value per Unit for each of the three Dean
Witter Spectrum Funds as of December 31, 1997 was as
follows:
Funds N.A.V. % change
for month
Spectrum Balanced $13.75
3.03%
Spectrum Strategic $10.71
5.58%
Spectrum Technical $14.63
4.58%
In Spectrum Balanced, a balanced portfolio of stocks, bonds
and managed futures utilizing the futures, options and
forward markets, gains were recorded during November
primarily from trading in currencies and energy futures. In
currency trading, short positions in the New Zealand and
Singapore dollars profited as the value of these currencies
declined relative to the U.S. dollar over concerns of
economic instability in the Pacific Rim. Additional
currency gains were recorded from short Japanese yen
positions as the value of the yen also moved lower versus
the U.S. dollar and other major currencies. In energies,
short positions in crude oil and natural gas futures were
profitable as oil and gas prices moved lower due to
unseasonably warm winter weather in the Northeast. Gains
were also recorded in soft commodities from short cotton
futures positions as cotton prices moved downward during the
month. Smaller gains were recorded in the bond and stock
index futures components of the balanced portfolio as long
positions in U.S. Treasury securities and S&P 500 Index
futures profited from a price increase during the second
half of December. These gains were partially offset by
losses experienced in international bond futures from
trading Japanese and Australian government bond futures as
prices in these markets moved in a short-term volatile
pattern as the severity of the Asian economic crisis
remained uncertain.
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,
gains were recorded primarily from short Japanese yen
positions as the value of the yen declined versus the U.S.
dollar on continued economic turmoil in Japan. In metals,
profits were recorded from long silver futures positions as
prices rallied on reports of declining inventories.
Additional gains were recorded in European interest rate
futures as prices in these markets moved higher. These
gains were partially offset by losses from short S&P 500
Index futures positions as domestic equity prices finished
the month slightly higher. In other markets, smaller gains
were recorded from long positions in cocoa futures, as
prices finished the month higher, and from short positions
in soybean and crude oil futures, as prices in these markets
moved lower.
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 long
silver futures positions as silver prices increased on
reports of declining supply. Additional gains in metals
were recorded from short gold futures positions as gold
prices moved below $290 an ounce for the first time in over
12 years. In financial futures, profits were recorded from
long positions in European and U.S. interest rate futures as
prices in these markets increased due to a "flight-to-
quality" by investors in lieu of the Asian economic crisis.
Additional gains were recorded from short Nikkei Index
futures positions as Japanese equity prices moved lower amid
concerns over the instability of the Japanese economy. In
energy futures, a decline in oil prices resulted in profits
for short positions in crude oil futures. Smaller gains
were recorded in currencies as short Japanese yen positions
recorded profits as the value of the yen declined versus
other major currencies. A small portion of the month's
gains was offset by losses experienced in soft commodities
from long coffee futures positions as coffee prices reversed
sharply lower during mid-month. Smaller losses were
recorded from inconsistent price movement in corn and
soybean futures prices.
<PAGE>
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(12 months) 18.2%
Inception-to-Date Return: 37.5%
Annualized Return:
10.6%
____________________________________________________________
_________________________
Spectrum Strategic
1994(2 months) 0.1%
1995 10.5%
1996 -3.4%
1997 (12 months)
.4%
Inception-to-Date Return:
7.1%
Annualized Return:
2.2%
____________________________________________________________
_________________________
Spectrum Technical
1994 (2 months) -
2.2%
1995 17.6%
1996 18.4%
1997 (12 months)
7.5%
Inception-to-Date Return:
46.3%
Annualized Return: 12.8%
____________________________________________________________
_________________________
</TABLE>
<PAGE>
<TABLE>
Statements of Operations
For the Month Ended December 31, 1997
(Unaudited)
<CAPTION>
Dean Witter Spectrum Balanced
Percent of
December 1, 1997
Beginning
Amount Net Asset Value
$ %
REVENUES
<S> <C> <C>
Trading Profit (Loss):
Realized 517,459 2.12
Net change in unrealized 229,368 0.94
Total Trading Results 746,827 3.06
Interest Income (DWR) 118,949 0.48
Total Revenues 865,776 3.54
EXPENSES
Brokerage commissions (DWR) 99,762 0.41
Management fees 25,450 0.10
Incentive fees - -
Total Expenses 125,212 0.51
NET INCOME 740,564 3.03
Statements of Changes in Net Asset Value
For the Month Ended December 31, 1997
(Unaudited)
Dean Witter Spectrum Balanced
Units Amount Per Unit
$ $
<S> <C>
<C> <C>
Net Asset Value,
December 1, 1997 1,831,111.449 24,431,538 13.34
Net Income - 740,564 0.41
Redemptions (8,332.805) (114,576) 13.75
Subscriptions 45,506.197 625,710 13.75
Net Asset Value,
December 31, 1997 1,868,284.841 25,683,236 13.75
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
December 1, 1997 December 1,
1997
Beginning
Beginning
Amount Net Asset Value Amount Net Asset
Value
$ % $ %
<C> <C> <C> <C>
1,350,764 2.40 13,587,739 7.89
2,125,882 3.76 (4,550,024) (2.64)
3,476,646 6.16 9,037,715 5.25
223,046 0.39 657,562 0.38
3,699,692 6.55 9,695,277
5.63
360,041 0.64 1,097,194 0.64
188,257 0.33 573,696 0.33
- - 139,190 0.08
548,298 0.97 1,810,080 1.05
3,151,394 5.58 7,885,197 4.58
Dean Witter Spectrum Strategic Dean Witter Spectrum Technical
Units Amount Per Unit Units Amount Per Unit
$ $ $ $
<C> <C> <C> <C> <C> <C>
5,567,645.195 56,477,092 10.14 12,300,976.140 172,108,919 13.99
- 3,151,394 0.57 - 7,885,197 0.64
(127,559.676) (1,366,164) 10.71 (68,983.592) (1,009,230) 14.63
77,801.936 833,259 10.71 202,708.190 2,965,621 14.63
5,517,887.455 59,095,581 10.71 12,434,700.738 181,950,507 14.63
</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. 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.
<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 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.
<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 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.
