Dean Witter Spectrum Series
Monthly Report
July 1998
Dear Limited Partner:
The Net Asset Value per Unit for each of the four Dean Witter Spectrum
Funds as of July 31, 1998 was as follows:
Funds N.A.V. % Change for Month
Spectrum Global Balanced $14.11 -1.23%
Spectrum Select $20.43 -0.96%
Spectrum Strategic $ 8.46 -5.23%
Spectrum Technical $14.19 -0.98%
In Spectrum Global Balanced, a balanced portfolio of stocks, bonds and
managed futures utilizing the futures, options and forward markets, losses
were experienced primarily from long S&P 500 Index futures positions in the
global stock index component as domestic equity prices finished the month
lower after reaching record highs during mid-month. Losses were also
recorded in the managed futures component of the balanced portfolio from
trading base metals futures as prices moved in a short-term volatile
pattern after trending lower in previous months. In currencies, losses
recorded from transactions involving European currencies more than offset
gains from short Japanese yen positions as the value of the yen declined
relative to other major currencies amid political and economic turmoil in
Japan. Losses were also recorded from long cotton futures positions as
cotton prices reversed lower after trending higher since mid-April. A
portion of these losses was offset by gains recorded from short positions
in livestock and soybean oil futures as agricultural prices moved lower.
In the global bond futures component, profits from long positions in
European bond futures, as the German economy appears to be in an upswing,
offset losses incurred from long positions in U.S. Treasury note and
Treasury bond futures.
In Spectrum Select, 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, losses were recorded
primarily from short positions in base metals futures as prices moved
higher early in the month. As a result of this move higher, new long
positions were established in these markets only to result in additional
losses later in the month as base metals prices regained their downward
momentum. In financial futures, losses were incurred from long positions
in U.S. interest rate and stock index futures as domestic bond and stock
prices finished the month lower. In soft commodities, losses were recorded
from long cotton futures positions as cotton prices reversed lower on news
of improved weather conditions. In currencies, gains recorded from short
Canadian dollar positions were offset by losses recorded from transactions
involving most major European currencies. A portion of the overall Fund
losses for the month was partially offset by gains from short energy
futures positions as oil and gas prices dropped during the month as
inventories continued to increase. Additional profits were recorded from
short positions in lean hog futures, as well as in wheat and corn futures,
as prices in these markets moved lower.
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 a majority of the
traditional commodities markets traded by the Fund. In the agricultural
markets, losses were recorded from long positions in soybean and corn
futures as grain prices moved lower on reports of strong crops and lower
demand from overseas. In the energy markets, long positions in heating
oil, unleaded gas and crude oil futures experienced losses as oil and gas
prices also declined. In metals and soft commodities, smaller losses were
recorded from short positions in copper futures, as copper prices finished
the month higher, and from long positions in cocoa futures, as cocoa prices
moved lower. A portion of these losses was offset by gains recorded from
short Japanese yen positions as the value of the yen fell versus other
major currencies in reaction to the political and economic reforms
occurring in Japan. Additional profits recorded from long positions in
European bond futures also helped to mitigate a portion of the overall Fund
losses for 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, losses were experienced
primarily from short positions in Japanese government bond and stock index
futures as prices in these markets moved higher after
<PAGE>
showing signs of moving lower previously. Additional losses were recorded
from trading U.S. and Australian financial futures as prices in these
markets moved without consistent direction. In soft commodities, losses
were recorded from short coffee futures positions as coffee prices moved
higher late in the month. Trendless price movement in silver futures
resulted in smaller losses being recorded during the month. A portion of
these losses was offset by gains from short grain and livestock futures
positions as agricultural prices moved lower. In currencies, profits from
short Japanese yen positions, as the value of the yen weakened versus other
major currencies, also helped to offset a portion of the losses.
Additional currency gains were recorded from short Canadian dollar
positions. These gains, coupled with smaller profits from short crude oil
futures positions, helped to mitigate overall Fund losses for the month.
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 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 (7 months) 2.6%
Inception-to-Date Return: 41.1%
Annualized Return: 9.6%
___________________________________________________________________________
__________
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 (7 months) -2.0%
Inception-to-Date Return 104.3%
Annualized Return 10.7%
___________________________________________________________________________
__________
Spectrum Strategic
1994 (2 months) 0.1%
1995 10.5%
1996 -3.5%
1997 0.4%
1998 (7 months) -21.0%
Inception-to-Date Return: -15.4%
Annualized Return: -4.4%
___________________________________________________________________________
__________
Spectrum Technical
1994 (2 months) -2.2%
1995 17.6%
1996 18.4%
1997 7.5%
1998 (7 months) -3.0%
Inception-to-Date Return: 41.9%
Annualized Return: 9.8%
___________________________________________________________________________
__________
</TABLE>
<PAGE>
<TABLE>
Statements of Operations
For the Month Ended July 31, 1998
(Unaudited)
<CAPTION>
Dean Witter Spectrum
Global Balanced Dean Witter Spectrum Select L.P.
Percent of
Percent of
July 1, 1998 July
1, 1998
Beginning Beginning
Amount Net Asset Value Amount
Net Asset Value
$ % $ %
REVENUES
<S> <C> <C> <C>
<C>
Trading Profit (Loss):
Realized (335,216) (.98) (2,832,614)
(1.79)
Net change in unrealized (60,111) (.17) 2,122,789
1.34
Total Trading Results (395,327) (1.15)
(709,825) (.45)
Interest Income (DWR) 139,705 .41
543,140 .34
Total Revenues (255,622) (.74)
(166,685) (.11)
EXPENSES
Brokerage fees (DWR) 131,709 .38 954,247
.60
Management fees 35,790 .11 394,861
.25
Total Expenses 167,499 .49 1,349,108
.85
NET LOSS (423,121) (1.23)
(1,515,793) (.96)
Statements of Changes in Net Asset Value
For the Month Ended July 31, 1998
(Unaudited)
Dean Witter Spectrum Global Balanced Dean
Witter Spectrum Select L.P.
Units Amount Per Unit Units
Amount Per Unit
$ $
$ $
<S> <C> <C> <C> <C>
<C> <C>
Net Asset Value,
July 1, 1998 2,405,417.583 34,359,524 14.28 7,655,690.716
157,944,257 20.63
Net Loss - (423,121) (.17) -
(1,515,793) (.20)
Redemptions (11,730.302) (165,515) 14.11 (118,222.800)
(2,415,292) 20.43
Subscriptions 128,748.411 1,816,640 14.11 224,385.878
4,584,204 20.43
Net Asset Value,
July 31, 1998 2,522,435.692 35,587,528 14.11 7,761,853.794
158,597,376 20.43
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
Statements of Operations
For the Month Ended July 31, 1998
(Unaudited)
<CAPTION>
Dean Witter
Spectrum Strategic Dean Witter Spectrum Technical.
Percent of
Percent of
July 1, 1998 July
1, 1998
Beginning Beginning
Amount Net Asset Value Amount
Net Asset Value
$ % $ %
REVENUES
<S> <C> <C> <C>
<C>
Trading Profit (Loss):
Realized (4,258,519) (8.04) (6,467,688)
(3.14)
Net change in unrealized 1,807,067 3.41 5,732,031
2.78
Total Trading Results (2,451,452) (4.63)
(735,657) (.36)
Interest Income (DWR) 174,409 .33
702,128 .34
Total Revenues (2,277,043) (4.30)
(33,529) (.02)
EXPENSES
Brokerage fees (DWR) 320,159 .61 1,243,519
.60
Management fees 171,695 .32 686,080
.33
Incentive fees - . - .
52,742 .03
Total Expenses 491,854 .93 1,982,341
.96
NET LOSS (2,768,897) (5.23)
(2,015,870) (.98)
Statements of Changes in Net Asset Value
For the Month Ended July 31, 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,
July 1, 1998 5,933,080.524 52,991,763 8.93 14,367,015.146
205,823,916 14.33
Net Loss - (2,768,897) (.47) -
(2,015,870) (.14)
Redemptions (98,854.403) (836,308) 8.46 (95,542.247)
(1,355,745) 14.19
Subscriptions 97,996.470 829,050 8.46 434,204.220
6,161,358 14.19
Net Asset Value,
July 31, 1998 5,932,222.591 50,215,608 8.46 14,705,677.119
208,613,659 14.19
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
Dean Witter Spectrum Series L.P.
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 commodity
broker for the Partnership is Carr Futures Inc. ("Carr"). The
general partner for each Partnership is Demeter Management
Corporation ("Demeter"). Demeter is a wholly-owned subsidiary
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,
Dean Witter Reynolds Inc. ("DWR") pays each Partnership
interest income based upon 80% of its average daily Net Assets
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 L.P.
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 Startegic
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 commissions 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
commission, 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 L.P.
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 their 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 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 L.P.
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 L.P.
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.
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., MSDW (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 partnership commodity pools. 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.
