Dean Witter Spectrum Series
Monthly Report
September 1998
Dear Limited Partner:
The Net Asset Value per Unit for each of the four Dean Witter Spectrum
Funds as of September 30, 1998 was as follows:
Funds N.A.V. % change for month
Spectrum Global Balanced $15.21 5.13%
Spectrum Select $25.87 6.22%
Spectrum Strategic $11.26 18,97%
Spectrum Technical $16.33 4.31%
In Spectrum Global Balanced, a balanced portfolio of stocks, bonds and
managed futures, gains were recorded primarily from long positions in the
global bond futures component, specifically long positions in U.S. Treasury
note and Treasury bond futures, as domestic bond prices soared higher due
to the scandal plaguing the White House, anticipation of the Federal
Reserve's late month interest rate cut and to fallout from the reported
losses by several major hedge funds late in the month. Additional profits
were recorded from long positions in European and Japanese bond futures as
prices in these markets also moved higher as investors continued to find
refuge in these "safe haven" investments. In the global stock index
component of the balanced portfolio, gains were recorded from long S&P 500
Index futures positions as domestic stock prices rebounded higher during
the latter half of the month as investors anticipated an interest rate cut
by the Federal Reserve on September 29. In currencies, gains were recorded
from long positions in the Italian lira and Spanish peseta as the value of
the U.S. dollar weakened versus other currencies in lieu of the scandal in
Washington. A portion of these gains was offset by losses incurred in
agricultural futures trading from short hog futures positions, as prices
reversed higher, as well as from short positions in soybean oil and corn
futures. Smaller losses were recorded from trading in energy and metals
futures.
In Spectrum Select, a Fund managed by three trading advisors who employ
long-term technical trend-following trading systems, gains were recorded
primarily from long global interest rate futures positions. The most
significant gains were recorded from long positions in U.S. bond futures as
domestic bond prices moved sharply higher as investors sought a "safe
haven" due to global economic uncertainty, the release of President
Clinton's grand jury testimony and anticipation of an interest rate cut by
the Federal Reserve late in the month. Additional profits were recorded
from long positions in Japanese and European bond futures as prices in
these markets also moved higher in a flight-to-quality by investors.
Smaller gains were recorded in stock index futures trading as short German
stock index futures positions profited from a decline in prices. A portion
of these gains was offset by losses experienced in metals from short gold
and silver futures positions as precious metals prices jumped higher due to
the U.S. dollar's weakness. Losses were also recorded from short crude oil
futures positions as oil prices moved above $16 a barrel as a result of
shrinking supplies and the threat of several Hurricanes in the Gulf of
Mexico during the month. Smaller losses were recorded in currencies and
agricultural futures.
In Spectrum Strategic, a Fund managed by three trading advisors who employ
fundamental trading methodologies, significant gains were recorded
primarily from long positions in U.S. interest rate futures as domestic
bond prices were pushed sharply higher due to a flight-to-quality by
investors seeking "safety" from the recent global economic uncertainty.
Additional profits were recorded from long German and British bond futures
positions as European bond prices also moved higher due to this economic
uncertainty worldwide. In energy futures trading, gains were recorded from
long crude oil futures positions as oil prices increased due to shrinking
supplies and fear that Hurricane Georges would reduce production in the
Gulf of Mexico. Additional gains were recorded in currencies from long
German mark positions as the U.S. dollar experienced weakness versus other
major currencies due to concerns regarding the White House scandal.
Smaller profits were recorded in metals trading. A small portion of these
gains was offset by losses recorded in soft commodities from long cocoa
futures positions as cocoa prices declined to 18-month lows amid selling
pressure by Ghanaian producers. Smaller losses were recorded in
agricultural futures trading.
In Spectrum Technical, a Fund managed by three trading advisors who employ
long-term technical trend-following trading systems, gains were recorded
primarily from long global interest rate futures positions. The most
significant gains were recorded from long positions in U.S. bond futures as
domestic bond prices moved higher in anticipation of an interest rate cut
by the Federal Reserve, the release of President Clinton's grand jury
testimony and on reports of losses by several major hedge funds.
Additional profits were recorded from long European and Japanese bond
futures as prices in these markets also moved higher in response to global
economic uncertainty. Smaller gains were recorded from short positions in
Japanese and European stock index futures as prices in these markets
finished the month lower. These gains were partially offset by losses
recorded in metals markets from short positions in gold and silver futures
as precious metals prices were pushed higher by the weakness in the U.S.
dollar. Losses were also experienced in the energy markets from short
crude oil futures positions as oil prices moved above $16 a barrel due to
declining supplies and the fear that Hurricane Georges would affect
production in the Gulf of Mexico. Smaller losses were incurred in
agricultural futures and currency trading.
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,
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 Global Balanced
1994 (2 months) -1.7%
1995 22.8%
1996 -3.7%
1997 18.2%
1998 (9 months) 10.6%
Inception-to-Date Return: 52.1%
Annualized Return: 11.3%
___________________________________________________________________________
__________
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 (9 months) 24.1%
Inception-to-Date Return 158.7%
Annualized Return 14.2%
___________________________________________________________________________
__________
Spectrum Strategic
1994 (2 months) 0.1%
1995 10.5%
1996 -3.5%
1997 0.4%
1998 (9 months) 5.1%
Inception-to-Date Return: 12.6%
Annualized Return: 3.1%
___________________________________________________________________________
__________
Spectrum Technical
1994 (2 months) -2.2%
1995 17.6%
1996 18.4%
1997 7.5%
1998 (9 months) 11.6%
Inception-to-Date Return: 63.3%
Annualized Return: 13.4%
</TABLE>___________________________________________________________________
__________________
<PAGE>
<TABLE>
Dean Witter Spectrum Series
Statements of Operations
For the Month Ended September 30, 1998
(Unaudited)
<CAPTION>
Dean Witter Spectrum
Global Balanced Dean Witter Spectrum Select
Percent of
Percent of
September 1, 1998
September 1, 1998
Amount Net Asset Value Amount
Net Asset Value
$ % $ %
REVENUES
<S> <C> <C> <C>
<C>
Trading Profit (Loss):
Realized (1,334,912) (3.55) 12,900,234
6.77
Net change in unrealized 3,420,660 9.09 1,300,406
.68
Total Trading Results 2,085,748 5.54 14,200,640
7.45
Interest Income (DWR) 152,257 .40
598,766 .31
Total Revenues 2,238,005 5.94
14,799,406 7.76
EXPENSES
Brokerage fees (DWR) 144,346 .38 1,151,853
.60
Incentive fees 124,260 .33 1,308,547
.69
Management fees 39,225 .10
476,629 .25
Total Expenses 307,831 .81 2,937,029
1.54
NET INCOME 1,930,174 5.13 11,862,377
6,22
Dean Witter Spectrum Series
Statements of Changes in Net Asset Value
For the Month Ended September 30, 1998
(Unaudited)
Dean Witter Spectrum Global Balanced Dean
Witter Spectrum Select .
Units Amount Per Unit Units
Amount Per Unit
$ $
$ $
<S> <C> <C> <C>
<C> <C> <C>
Net Asset Value,
September 1, 1998 2,601,906.735 37,655,708 14.47 7,829,527.115
190,651,501 24.35
Net Income - 1,930,174 .74 -
11,862,377 1.52
Redemptions (17,913.034) (272,457) 15.21 (63,110.440)
(1,632,666) 25.87
Subscriptions 75,352.576 1,146,113 15.21 135,897.806
3,515,676 25.87
Net Asset Value,
September 30, 1998 2,659,346.277 40,459,538 15.21 7,902,314.521
204,396,888 25.87
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
Dean Witter Spectrum Series
Statements of Operations
For the Month Ended September 30, 1998
(Unaudited)
<CAPTION>
Dean Witter
Spectrum Strategic Dean Witter Spectrum Technical.
Percent of
Percent of
September 1, 1998
September 1, 1998
Amount Net Asset Value Amount
Net Asset Value
$ % $ %
REVENUES
<S> <C> <C> <C>
<C>
Trading Profit (Loss):
Realized 10,548,738 19.05 (1,797,191)
(.77)
Net change in unrealized 458,220 .83 14,036,921
6.03
Total Trading Results 11,006,958 19.88 12,239,730
5.26
Interest Income (DWR) 192,304 .35
731,915 .31
Total Revenues 11,199,262 20.23 12,971,645
5.57
EXPENSES
Brokerage fees (DWR) 334,526 .61 1,406,936
.61
Incentive fees 178,429 .32 746,222
.32
Management fees 180,275 .33 776,241
.33
Total Expenses 693,230 1.26 2,929,399
1.26
NET INCOME 10,506,032 18.97 10,042,246
4.31
Dean Witter Spectrum Series
Statements of Changes in Net Asset Value
For the Month Ended September 30 1998
(Unaudited)
Dean Witter Spectrum Strategic Dean Witter
Spectrum Technical
Units Amount Per Unit Units
Amount Per Unit
$ $
$ $
<S> <C> <C>
<C> <C> <C> <C>
Net Asset Value,
September 1, 1998 5,850,137.787 55,369,693 9.46 14,876,947.013
232,872,259 15.65
Net Income - 10,506,032 1.80 -
10,042,246 .68
Redemptions (95,039.209) (1,070,141) 11.26 (98,928.584)
(1,615,504) 16.33
Subscriptions 59,861.366 674,039 11.26 318,395.003
5,199,390 16.33
Net Asset Value,
September 30, 1998 5,814,959.944 65,479,623 11.26 15,096,413.432
246,498,391 16.33
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
Dean Witter Spectrum Series
Notes to Financial Statements
(Unaudited)
1. Summary of Significant Accounting Policies
Organization , Dean Witter Spectrum Global Balanced L.P.
(formally known as Dean Witter Spectrum Balanced
L.P.)("Spectrum Balanced"), Dean Witter Spectrum Select L.P.
(formally known as Dean Witter Select Futures Fund L.P.)
("Spectrum Select"), 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 non-clearing commodity broker is Dean Witter
Reynolds, Inc. ("DWR"), with an unaffiliated clearing commodity
broker Carr Futures Inc. ("Carr"), providing clearing and
execution services. Both Demeter and DWR are wholly-owned
subsidiaries of Morgan Stanley Dean Witter & Co. ("MSDW").
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" (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 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 to 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 Fees and Related Transaction Fees and Costs ,
Brokerage fees for Spectrum Balanced are accrued at a monthly
rate of 1/12 of 4.60% of the Net Assets as of the first day of
each month.
Brokerage fees for Spectrum Select, Spectrum Strategic and
Spectrum Technical are accrued at a monthly rate of 1/12 of
7.25% of the Net Assets as of the first day of each month.
<PAGE>
Dean Witter Spectrum Series
Notes to Financial Statements -
(Continued)
Such fees will cover all brokerage fees, transaction fees and
costs and ordinary administrative and continuing offering
expenses.
Operating Expenses - Spectrum Balanced, Spectrum Strategic
and Spectrum Technical, 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.
Spectrum Select bears all operating expenses related to its
trading activities, to a maximum of 1/4 of 1% annually of the
Partnership's average month end Net Assets. In addition, the
Partnership incurs a monthly management fee and may incur an
incentive fee. Demeter bears all other operating expenses.
Effective with the June 1, 1998 change to a flat rate brokerage
fee, all common administrative and continuing offering expenses
will be borne by DWR through the brokerage fees.
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 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>
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 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 - Spectrum 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 if certain conditions occur 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 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 Global Balanced L.P.
RXR, Inc.
Dean Witter Spectrum Select L.P.
EMC Capital Management, Inc.
Rabar Market Research, Inc.
Sunrise Capital Management, Inc.
Dean Witter Spectrum Strategic L.P.
Blenheim Investments, Inc.
Stonebrook Capital Management, Inc.
Willowbridge Associates Inc.
Dean Witter Spectrum Technical L.P.
Campbell & Company, Inc.
Chesapeake Capital Corporation
John W. Henry & Company, Inc. ("JWH")
<PAGE>
Dean Witter Spectrum Series
Notes to Financial Statements
(Continued)
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
Technical.
Prior the June 1, 1998, the management fee was accrued at the
rate of one fourth of 1% of the Partnership's adjusted Net Assets,
as defined in the Limited Partnership Agreement, as of the last
day of each month (a 3% annual rate) to Spectrum Select.
Effective June 1, 1998, the management fee is accrued at the
rate of one fourth of 1% per month of the Net Assets allocated to
each trading advisor on the first day of each month (a 3% annual
rate).
Prior to June 1, 1998, the management fee was 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. Effective June 1, 1998,
management fees are accrued at a rate of 1/12 of 4% of the Net
Assets allocated to each of Blenheim and Willowbridge on the
first day of each month, and 1/12 of 3% of the Net Assets
allocated to Stonebrook on the first day of each month.
Incentive Fee , Spectrum Balanced and Spectrum Strategic each
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.
Prior to June 1, 1998, Spectrum Select paid, when applicable, a
quarterly incentive fee to each trading advisor equal to 17.5%
of the trading advisors "Trading Profits" experienced by the
Net Assets allocated to such trading advisor as of the end of
each calendar quarter. Effective June 1, 1998 the incentive
fees will be revised to 15% of "Trading Profits" and will be
paid on a monthly basis.
Prior to June 1, 1998, Spectrum Technical paid a 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. Effective June 1, 1998 incentive fees to Spectrum
Technical were revised to 15% of the "Trading Profits"
experienced with respect to the Net Assets allocated to
Campbell and JWH as of the end of each calendar month, and 19%
of the "Trading Profits" experienced with respect to the Net
Assets allocated to Chesapeake as of the end of each calendar
month.
<PAGE>
Dean Witter Spectrum Series
Notes to Financial Statements
(Concluded)
For all Partnerships, if a trading advisor has experienced
"Trading losses" with respect to its allocated Net Assets at
the time of a supplemental closing the trading advisor must
earn back such losses plus a pro-rata amount related to the
funds allocated to the trading advisor at supplemental closing
before the trading advisor is eligible for an incentive fee.
