Morgan Stanley Dean Witter Spectrum Series
Monthly Report
February 2000
Dear Limited Partner:
The Net Asset Value per Unit for each of the four Morgan
Stanley Dean Witter Spectrum Funds as of February 29, 2000 was
as follows:
Funds N.A.V. % change for
month Spectrum Global Balanced $16.12
0.96% Spectrum Select $22.14
- -2.17% Spectrum Strategic $12.67 -
18.50% Spectrum Technical $14.91
- -1.23%
In general, each of the Spectrum Series funds demonstrated
different performance in February due to the portfolio
structure and trading
approaches unique to each fund. Spectrum Balanced produced
gains primarily from its exposure to global stock index
futures, specifically in Swedish and Nikkei stock indices, and
recorded smaller gains in the energy and metals sectors. Both
Spectrum Select and Spectrum Technical incurred losses from
greater exposure in the difficult global interest rate futures
markets and reversals in the metals markets but were able to
partially offset these losses by recording gains in the global
stock index and energy markets. Spectrum Strategic suffered
significant losses during February primarily from short
positions in global stock index futures markets, specifically
in the NASDAQ 100 Index, which were instituted based on a
forecast of equity weakness in the U.S., reversals in the
metals markets and long positions in the soft commodities
markets that anticipated rising coffee prices.
During February, short-term volatility and uncertainty in the
global interest rate futures markets continued to plague the
technical trendfollowing trading approaches of Spectrum Select
and Spectrum Technical's Advisors. As the future direction of
interest rates and concerns regarding inflation remained in
question, prices in this market complex refused to find a
consistent direction, opting to move in a choppy pattern.
Contrary to the interest rate futures markets, prices in global
stock index futures, specifically in the technology-heavy DAX,
CAC-40 and NASDAQ 100 Indices, resiliently climbed higher,
resuming their upward moves from 1999. In the commodities
markets, oil prices, which also trended higher throughout much
of 1999 and the first month of 2000, continued to rise during
February reaching nine-year highs on concerns regarding future
output levels. Aluminum prices, which had trended higher during
December and January, reversed sharply lower amid technically-
based selling. In the currency markets, an interest rate hike
by the Federal Reserve and bullish U.S. economic data resulted
in the U.S. dollar strengthening versus the Japanese yen and
British pound.
In the global interest rate futures markets, losses were
incurred from long positions in Japanese interest rate futures
as prices slid lower early in the month in reaction to the
yen's weakness and the strength of the Nikkei 225 Index.
Continued short-term price volatility during the remainder of
the month resulted in additional losses being incurred by the
trendfollowing systems of Spectrum Select and Spectrum
Technical's Advisors. In the U.S., losses were experienced
from short positions in U.S. Treasury note futures as the
prices of intermediate term debt instruments rose following a
less-than-expected interest rate hike of 0.25% by the U.S.
Federal Reserve. Prices in this market experienced an
additional boost higher later in the month after moving in a
choppy manner during midFebruary. Trading in European interest
rate futures, particularly short positions in German bond
futures, also resulted in losses as prices increased on the
heels of higher U.S. bond prices.
In the global stock index futures markets, profits were
recorded in Spectrum Select and Spectrum Technical from long
positions in DAX, CAC-40
and NASDAQ 100 Index futures as prices resumed their upward
trend from late 1999 due primarily to strength in the
technology sector. Long positions in Nikkei 225 Index futures
also profited as Japanese equity prices rose as a result of the
yen's weakness versus other major currencies, particularly the
U.S. dollar. In Spectrum Technical, small losses were incurred
from long positions in S&P 500 Index futures as the prices of
most blue-chip issues finished the month lower.
<PAGE>
In the commodities markets, profits were recorded in Spectrum
Select and Spectrum Technical from long futures positions in
crude oil and its refined products as oil prices trended to
nine-year highs on concerns regarding future output levels from
the world's leading producers amid dwindling supplies and
strong demand. These gains were partially offset by losses
incurred in the metals markets due to choppy price movement in
gold futures and a reversal lower in base metals prices,
specifically aluminum and copper futures.
In currencies, profits were recorded from short Japanese yen
positions as the U.S. dollar strengthened to a 5 1/2 month high
versus the Japanese yen following an interest rate increase by
the U.S. Federal Reserve early in the month. The yen
experienced additional weakness versus the dollar later in the
month on skepticism regarding Japan's economic recovery and
betterthan-expected economic data out of the U.S. In Spectrum
Select, offsetting losses were incurred from long British pound
positions as the value of the pound weakened versus both the
U.S. dollar and euro, and in Spectrum Technical losses were
experienced from long British pound positions versus the euro,
following the interest rate hikes by the respective central
banks of the U.S. and the European region.
In Spectrum Global Balanced, a balanced portfolio of stocks,
bonds and managed futures, gains were recorded during February
primarily in the global stock index futures component from long
positions in Swedish stock index futures as Sweden's equity
prices increased amid signs that their economy is booming.
Additional gains were recorded from long positions in Nikkei
Index futures as equity prices in Japan increased due to
weakness in the Japanese yen versus other major currencies,
particularly the U.S. dollar. In the managed futures
component, gains were recorded from long positions in crude oil
futures and its refined products as oil prices powered to nine-
year highs during the month on concerns about future output
levels from the world's leading producer countries amid
dwindling stockpiles and increasing demand. In the metals
markets, gains were recorded early in the month from long
nickel futures positions as nickel prices climbed to their
highest level in five years. A portion of these gains was
offset by losses recorded in the livestock markets from short
lean hog futures positions as prices climbed higher amid
expectations of higher wholesale pork prices due to light
slaughter rates. In the agricultural markets, losses were
experienced early in the month from long positions in soybean
oil as soybean prices moved lower following rains in the
growing region of South America, particularly Brazil. In the
global interest rate futures component, losses were incurred
from short positions in short-term U.S. interest rate futures
as prices moved higher later in the month followed by
volatility in the U.S. stock markets as investors shifted
assets into Treasury notes from stocks. In the currency
markets, smaller losses were recorded from short positions in
the euro relative to the British pound, as the value of the
European common currency strengthened versus the pound after
the European Central Bank raised interest rates.
In Spectrum Strategic, a Fund managed by multiple trading
advisors who employ fundamental trading methodologies, losses
were recorded during February primarily in the global stock
index futures markets from short positions in NASDAQ 100 Index
futures as the NASDAQ Index climbed higher on strength in
computer-chip maker and biotechnology companies. In the metals
markets, losses were experienced from long positions in
aluminum and copper futures as prices reversed lower earlier in
the month due primarily to technically based selling and again
later in the month led downward by falling prices of other base
metals. In the global interest rate futures markets, losses
were incurred early in the month from short positions in German
interest rate futures as prices increased following a surge in
U.S. bond prices. Prices were boosted by less-than-expected
interest rate hikes of 0.25% by the U.S. Federal Reserve and
the European Central Bank and an announcement that the U.S.
Treasury would soon begin buying back longerdated issues and
reducing its auctions across the interest rate curve. In the
soft commodities markets, losses were recorded from long coffee
futures positions as prices fell as the market braced for a
hefty surplus of Robusta coffee beans after a bumper production
from Vietnam. In the currency markets, losses were experienced
from short positions in the euro relative to the U.S. dollar as
its value strengthened early in the month following the
decision of the European Central Bank to raise key interest
rates. A portion of these losses was offset by gains recorded
from short positions in the Japanese yen as the value of the
yen sank to a 5-month low versus the U.S. dollar early in the
month following an interest rate increase by the U.S. Federal
Reserve and a larger-than-expected rise in Australian interest
rates. Additionally, the yen weakened on concerns about
Japan's economy and economic data out of that country.
<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
Morgan Stanley Dean Witter Financial Advisor.
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,
Robert E. Murray
Chairman
Demeter Management Corporation
General Partner
<apge>
<TABLE>
Historical Fund Performance
Presented below is the percentage change in Net Asset Value per
Unit from the start of each calendar each the Fund has traded.
Also provided is the inception-to-date return and the
annualized return since inception for each Fund. PAST
PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
<CAPTION>
Funds Year Return
<S> <C> <C>
Spectrum Global Balanced
1994 (2 months) -
1.7%
1995 22.8%
1996 -3.6%
1997 18.2%
1998 16.4%
1999 0.7%
2000 (2 months)
0.0% Inception-to-Date Return:
61.2% Annualized Return:
9.4%
_______________________________________________________________
____________ __________
Spectrum Select
1991 (5 months) 31.2%
1992 -14.4%
1993 41.6%
1994 -5.1%
1995 23.6%
1996 5.3%
1997 6.2%
1998 14.2%
1999
- -7.6%
2000 (2 months)
0.6%
Inception-to-Date Return:
121.4%
Annualized Return 9.7%
_______________________________________________________________
____________ __________
Spectrum Strategic
1994 (2 months) 0.1%
1995 10.5%
1996 -3.5%
1997 0.4%
1998 7.8%
1999
37.2%
2000 (2 months) -20.1%
Inception-to-Date Return:
26.7%
Annualized Return: 4.5%
_______________________________________________________________
____________ __________
Spectrum Technical
1994 (2 months) -2.2%
1995 17.6%
1996 18.3%
1997 7.5%
1998 10.2%
1999
- -7.5%
2000 (2 months) 0.0%
Inception-to-Date Return:
49.1%
</TABLE> Annualized Return: 7.8%
<PAGE>
<TABLE>
Morgan Stanley Dean Witter Spectrum Series
Statements of Operations
For the Month Ended February 29, 2000
(Unaudited)
<CAPTION>
Morgan Stanley Dean Witter
Morgan Stanley Dean Witter
Spectrum Global Balanced Spectrum Select
Percent of
Percent of
February 1, 2000
February 1, 2000
Beginning
Beginning
Amount Net Asset Value
Amount
Net Asset Value
$ % $
%
<S> <C> <C>
<C>
<C>
REVENUES
Trading profit (loss):
Realized 203,243 0.35
809,265
0.37
Net change in unrealized 385,679 0.67
(4,433,095)
(2.02)
Total Trading Results 588,922 1.02
(3,623,830)
(1.65)
Interest Income (DWR) 246,685 0.43
733,678
0.33
Total Revenues 835,607 1.45
(2,890,152)
(1.32)
EXPENSES
Brokerage fees (DWR) 221,060 0.38
1,328,982
0.60
Management fees 60,071 0.11
549,923 0.25
Total Expenses 281,131 0.49
1,878,905
0.85
NET INCOME (LOSS) 554,476 0.96
(4,769,057)
(2.17)
Morgan Stanley Dean Witter Spectrum Series
Statements of Changes in Net Asset Value For the Month Ended
February 29, 2000 (Unaudited)
Morgan Stanley Dean Witter
Morgan
Stanley Dean Witter
Spectrum Global Balanced
Spectrum
Select .
Units Amount Per Unit
Units
Amount Per Unit
$ $
$
$
<S> <C> <C> <C> <C>
<C> <C>
Net Asset Value,
February 1, 2000 3,611,913.698 57,668,146 15.97
9,718,174.671
219,969,311 22.63
Net Income (Loss) - 554,476 0.15
- -
(4,769,057) (0.49)
Redemptions (81,606.282) (1,315,493) 16.12
(138,854.808)
(3,074,245) 22.14
Subscriptions 66,267.629 1,068,234 16.12
131,943.992
2,921,240 22.14
Net Asset Value,
February 29, 2000 3,596,575.045 57,975,363 16.12
9,711,263.855
215,047,249 22.14
The accompanying notes are an integral part of these financial
statements. </TABLE>
<PAGE>
<TABLE>
Morgan Stanley Dean Witter Spectrum Series
Statements of Operations
For the Month Ended February 29, 2000
(Unaudited)
<CAPTION>
Morgan Stanley Dean Witter
Morgan Stanley Dean Witter
Spectrum Strategic Spectrum Technical .
Percent of
Percent of
February 1, 2000
February 1, 2000
Amount Net Asset Value
Amount
Net Asset Value
$ % $
%
<S> <C> <C>
<C>
<C>
REVENUES
Trading profit (loss):
Realized (9,761,569) (9.05)
3,022,882 1.11
Net change in unrealized (9,533,192) (8.84)
(4,740,105) (1.74)
Total Trading Results (19,294,761) (17.89)
(1,717,223) (0.63)
Interest Income (DWR) 328,848 0.31
918,006 0.34
Total Revenues (18,965,913) (17.58)
(799,217) (0.29)
EXPENSES
Brokerage fees (DWR) 651,885 0.60
1,644,094
0.61
Management fees 344,851 0.32
907,086
0.33
Total Expenses 996,736 0.92
2,551,180
0.94
NET INCOME (LOSS) (19,962,649) (18.50)
(3,350,397) (1.23)
Morgan Stanley Dean Witter Spectrum Series
Statements of Changes in Net Asset Value For the Month Ended
February 29, 2000 (Unaudited)
Morgan Stanley Dean Witter
Morgan
Stanley Dean Witter
Spectrum Strategic
Spectrum
Technical .
Units Amount Per Unit
Units
Amount Per Unit
$ $
$
$
<S> <C> <C> <C>
<C>
<C> <C>
Net Asset Value,
February 1, 2000 6,941,254.812 107,898,346 15.54
18,028,055.078
272,125,896 15.09
Net Income (Loss) - (19,962,649) (2.87)
- -
(3,350,397) (0.18)
Redemptions (100,516.865) (1,273,549) 12.67
(225,201.404) (3,357,753) 14.91
Subscriptions 211,166.005 2,675,473 12.67
227,800.065 3,396,499 14.91
Net Asset Value,
February 29, 2000 7,051,903.952 89,337,621 12.67
18,030,653.739
268,814,245 14.91
The accompanying notes are an integral part of these financial
statements. </TABLE>
<PAGE>
Morgan Stanley Dean Witter Spectrum Series
Notes to Financial Statements
(Unaudited)
1. Summary of Significant Accounting Policies
Organization - Morgan Stanley Dean Witter Spectrum
Global Balanced L.P. ("Spectrum Global Balanced"),
Morgan Stanley Dean Witter Spectrum Select L.P.
("Spectrum Select"), Morgan Stanley Dean Witter
Spectrum Strategic L.P. ("Spectrum Strategic") and
Morgan Stanley 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,
physical commodities and other commodity interests,
including, but not limited to foreign currencies,
financial instruments, metals, energy and
agricultural products (collectively, "futures
interests").
The general partner for each Partnership is Demeter
Management Corporation ("Demeter"). The non-
clearing commodity broker is Dean Witter Reynolds,
Inc. ("DWR") and an unaffiliated clearing commodity
broker, Carr Futures Inc. ("Carr"), provides
clearing and execution services. Both Demeter and
DWR are wholly-owned subsidiaries of Morgan Stanley
Dean Witter & Co.
Demeter is required to maintain a 1% minimum
interest in the equity of each Partnership and
income (losses) are shared by Demeter and the
Limited Partners based upon their proportional
ownership interests.
Use of Estimates - The financial statements are
prepared in accordance with generally accepted
accounting principles, which require management to
make estimates and assumptions that affect the
reported amounts in the financial statements and
related disclosures. Management believes that the
estimates utilized in the preparation of the
financial statements are prudent and reasonable.
Actual results could differ from those estimates.
Revenue Recognition - Futures interests are open
commitments until settlement date. They are valued
at market on a daily basis and the resulting net
change in unrealized gains and losses is reflected
in the changes in unrealized profits (losses) on
open contracts from one period to the next in the
statements of operations. Monthly, DWR pays each
Partnership interest income based upon 80% of its
average daily "Net Assets" (as defined in the
limited partnership agreements) for the month in
the case of Spectrum Select, Spectrum Strategic and
Spectrum Technical, and 100% in the case of
Spectrum Global 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 Partnerships on
futures interests, but not actually received.
Net Income (Loss) per Unit - Net income (loss) per
unit of limited partnership interest ("Unit(s)") is
computed using the weighted average number of Units
outstanding during the period.
Brokerage and Related Transaction Fees and Costs -
Brokerage fees for Spectrum Global Balanced are
accrued at a flat monthly rate of 1/12 of 4.60% (a
4.60% annual rate) of the Net Assets as of the
first day of each month.
<PAGE>
Morgan Stanley Dean Witter Spectrum Series
Notes to Financial Statements
(Continued)
Brokerage fees for Spectrum Select, Spectrum
Strategic and Spectrum Technical are accrued at a
flat monthly rate of 1/12 of 7.25% (a 7.25% annual
rate) of the Net Assets as of the first day of each
month.
Such fees currently cover all brokerage fees,
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
redemptions 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 close of business on the
last day of the month. No selling commissions or
charges related to the continuing offering of Units
are borne by the Limited Partners or the
Partnership.
DWR will pays 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 of any month
that is at least 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 redeemed on or prior to
the last day of the twelfth month after such Units
were purchased will be subject to a redemption
charge equal to 2% of the Net Asset Value of a Unit
on the date of such redemption. Units redeemed
after the last day of the twelfth month and on or
prior to the last day of the twenty-fourth month
after which such Units were purchased will be
subject to a redemption charge equal to 1% of the
Net Asset Value of a Unit on the date of such
redemption. Units redeemed after the last day of
the twenty-fourth month after which such Units were
purchased will not be subject to a redemption
charge. The foregoing redemptions charges will be
paid to DWR. 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.
<PAGE>
Morgan Stanley Dean Witter Spectrum Series
Notes to Financial Statements
(Continued)
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 at
the end of each month thereafter, Limited Partners
may exchange their investment among the
Partnerships (subject to certain restrictions
outlined in the Limited Partnership Agreements)
without paying additional charges.
Dissolution of the Partnership - Spectrum Global
Balanced, Spectrum Strategic and Spectrum Technical
will terminate on December 31, 2035 and Spectrum
Select will terminate on December 31, 2025
regardless of financial condition at such time, or
at an earlier date under certain conditions as
defined in each Partnership's Limited Partnership
Agreement.
2. Related Party Transactions
Each Partnership pays brokerage fees to DWR as
described in Note 1. Each Partnership's cash is on
deposit with DWR and Carr in futures interests
trading accounts to meet margin requirements as
needed. DWR pays interest on these funds as
described in Note 1.
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:
Morgan Stanley Dean Witter Spectrum Global Balanced
L.P.
RXR, Inc.
Morgan Stanley Dean Witter Spectrum Select L.P.
EMC Capital Management, Inc.
Rabar Market Research, Inc.
Sunrise Capital Management, Inc.
Morgan Stanley Dean Witter Spectrum
Strategic L.P. Allied Irish Capital
Management, Ltd. ("AICM") Blenheim
Investments, Inc. ("Blenheim")
Willowbridge Associates Inc.
("Willowbridge")
Morgan Stanley Dean Witter Spectrum
Technical L.P. Campbell & Company,
Inc.) ("Campbell") Chesapeake
Capital Corporation ("Chesapeake")
John W. Henry & Company, Inc.
("JWH")
<PAGE>
Morgan Stanley Dean Witter Spectrum
Series
Notes to Financial Statements
(Concluded)
Compensation to the trading advisors by the
Partnerships consists of manage-ment fee and an
incentive fee as follows:
Management Fee - The management fee for Spectrum
Global Balanced is accrued at a rate of 5/48 of 1%
per month of Net Assets on the first day of each
month (a 1.25% annual rate).
The management fee for Spectrum Select is accrued
at a rate of 1/4 of 1% per month of Net Assets
allocated to each trading advisor on the first day
of each month (a 3% annual rate).
The management fee for Spectrum Strategic is
accrued at a rate of 1/12 of 4% per month of Net
Assets allocated to each of Blenheim and
Willowbridge on the first day of each month, and
1/12 of 3% per month of Net Assets allocated to
AICM on the first day of each month (annual rates
of 4% and 3%, respectively).
The management fee for Spectrum Technical is
accrued at a rate of 1/3 of 1% per month of Net
Assets allocated to each trading advisor on the
first day of each month (a 4% annual rate).
Incentive Fee - Spectrum Global Balanced, Spectrum
Select and Spectrum Strategic each pay a monthly
incentive fee equal to 15% of the trading profits
as experienced with respect to each trading
advisor's allocated Net Assets as of the end of
each calendar month. Trading profits represent the
amount by which profits from futures, forwards and
options trading exceed losses, after brokerage and
management fees are deducted.
Spectrum Technical pays a monthly incentive fee
equal to 15% of the trading profits experienced
with respect to the Net Assets allocated to
Campbell and JWH and 19% of the trading profits
experienced with respect to the Net Assets
allocated to Chesapeake as of the end of each
calendar month. Trading profits represent the
amount by which profits from futures, forwards and
options trading exceed losses, after brokerage and
management fees are deducted.
For all Partnerships when trading losses are
incurred, no incentive fees will be paid in
subsequent months until all such losses are
received. Cumulative trading losses are adjusted
on a pro-rata basis for the net amount of each
months subscriptions and redemptions.
4. Legal Matters
The following supplements the Legal Matters note to
the financial statements previously disclosed in
the Partnership's Annual Report for the year ended
December 31, 1999:
On March 3, 2000, the plaintiffs in the New York
action filed an appeal of the order dismissing the
consolidated complaint.
