Dean Witter Spectrum Series
Monthly Report
February 1998
Dear Limited Partner:
The Net Asset Value per Unit for each of the three Dean
Witter Spectrum Funds as of February 28, 1998 was as
follows:
Funds N.A.V. % change
for month
Spectrum Balanced $14.27
1.44%
Spectrum Strategic $10.90
3.33%
Spectrum Technical $14.52
0.37%
In Spectrum Balanced, a balanced portfolio of stocks, bonds
and managed futures utilizing the futures, options and
forward markets, profits were recorded during February due
primarily to a continued upward move in U.S. equity prices.
As a result of this increase, gains were recorded in the
stock index component from long positions in S&P 500 Index
futures. Gains were also recorded in the managed futures
component of the balanced portfolio from short crude oil
futures positions as oil prices declined during the second
half of the month as a tentative agreement was reached
between the U.N. and Iraq. Additional gains were recorded
in agricultural futures trading. Losses recorded from
shortterm volatility in the currency markets, specifically
transactions involving European and Asian currencies
relative to the U.S. dollar, offset a portion of these
gains. Smaller losses were experienced in the bond portion
of the portfolio as U.S. Treasury securities prices
declined.
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 recorded from transactions involving the German
mark and Japanese yen as the value of these currencies
experienced short-term volatile movement. Losses were also
recorded from long positions in sugar futures as sugar
prices declined on the prospect of an abundant supply.
Smaller losses were recorded from long positions in U.S.
interest rate futures as domestic bond prices declined
during February. These losses were partially offset by
gains recorded in agricultural futures from trading soybean
and soybean product futures, as well as in metals from long
positions in silver 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 forward markets, gains were recorded from short
positions in crude and heating oil futures as oil prices
declined in reaction to easing tensions in the Middle East.
Additional gains were recorded from long silver futures
positions as silver prices finished the month higher.
Smaller gains were recorded from trading agricultural and
soft commodities. These gains were partially offset by
losses experienced in currencies, particularly from
transactions involving the Japanese yen as its value moved
without consistent direction. Smaller losses were recorded
from long U.S. interest rate futures positions.
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.
<PAGE>
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 18.2%
1998 (2 months)
3.8%
Inception-to-Date Return:
42.7% Annualized Return:
11.3%
__________________________________________________________
__ _________________________
Spectrum Strategic
1994 (2 months)
0.1%
1995 10.5%
1996 -3.5%
1997
0.4%
1998 (2 months)
1.8%
Inception-to-Date Return:
9.0%
Annualized Return:
2.6%
__________________________________________________________
__ _________________________
Spectrum Technical
1994 (2 months)
2.2%
1995 17.6%
1996 18.4%
1997
7.5%
1998 (2 months)
- -0.8%
Inception-to-Date Return:
45.2%
Annualized Return:
11.9%
__________________________________________________________
__ _________________________
</TABLE>
<PAGE>
<TABLE>
Statements of Operations
For the Month Ended February 28, 1998
(Unaudited)
<CAPTION>
Dean Witter
Spectrum Balanced
Percent of
February 1, 1998
Beginning
Amount Net Asset Value
$ %
REVENUES
<S> <C> <C>
Trading Profit (Loss):
Realized 340,194
1.26
Net change in unrealized 80,409 .30
Total Trading Results 420,603 1.56
Interest Income (DWR) 105,318 .39
Total Revenues 525,921
1.95
EXPENSES
Brokerage commissions (DWR) 109,980 .41
Management fees 28,056 .10
Total Expenses 138,036
.51
NET INCOME (LOSS) 387,885
1.44
Statements of Changes in Net Asset Value
For the Month Ended February 28, 1998
(Unaudited)
Dean Witter Spectrum Balanced
Units Amount Per
Unit
$ $
<S> <C>
<C> <C>
Net Asset Value,
February 1, 1998 1,915,075.545 26,933,928
14.06
Net Income (Loss) - 387,885
.21
Redemptions (26,016.963) (371,262)
14.27
Subscriptions 56,409.693 804,966
14.27
Net Asset Value,
February 28, 1998 1,945,468.275 27,755,517
14.27
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
February 1, 1998 February 1,
1998
Beginning
Beginning
Amount Net Asset Value Amount Net Asset
Value
$ % $ %
<C> <C> <C> <C>
1,224,354 1.95 7,154,528
3.92
(2,898,005) (4.61) (5,284,846)
(2.90)
(1,673,651) (2.66) 1,869,682
1.02
190,846 .30 572,644
.32
(1,482,805) (2.36) 2,442,326
1.34
401,031 0.64 1,162,771
.64
209,689 0.33 607,985
.33
610,720 0.97 1,770,756
.97
(2,093,525) (3.33) 671,570
.37
Dean Witter Spectrum Strategic Dean Witter Spectrum Technical
Units Amount Per Unit Units Amount Per
Unit
$ $ $ $
<C> <C> <C> <C> <C> <C>
5,577,038.381 62,906,776 11.28 12,611,554.620 182,395,460 14.46
- (2,093,525) (.38) - 671,570 .06
(103,080.346) (1,123,576) 10.90 (148,093.100) (2,150,312) 14.52
127,342.493 1,388,033 10.90 340,308.908 4,941,285 14.52
5,601,300.528 61,077,708 10.90 12,803,770.428 185,858,003 14.52
</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"). Demeter is a wholly-owned
subsidiary of Morgan Stanley, Dean Witter, Discover & Co.
("MSDWD").
On July 31, 1997, Dean Witter Reynolds Inc. ("DWR"), a
wholly-owned subsidiary of MSDWD, 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 commodity broker for most of the
Partnership's transactions and is 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,
alleging, among other things, that the defendants
committed fraud, deceit, negligent misrepresentation,
various violations of the California Corporations Code,
intentional and negligent breach of fiduciary duty,
fraudulent and unfair business practices, unjust
enrichment, and conversion in the sale and operation of
the various limited partnerships commodity pool. 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. A consolidated and amended complaint in the
action pending in the Supreme Court of the State of New
York was filed on August 13, 1997, alleging that the
defendants committed fraud, breach of fiduciary duty, and
negligent misrepresentation in the sale and operation of
the various limited partnership commodity pools. On
December 16, 1997, upon motion of the plaintiffs, the
action pending in the Superior Court of the State of
Delaware was voluntarily dismissed without prejudice. 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.
