Dean Witter Spectrum Series
Monthly Report
October 1998
Dear Limited Partner:
The Net Asset Value per Unit for each of the four Dean Witter Spectrum
Funds as of October 31, 1998 was as follows:
Funds N.A.V. % change for month
Spectrum Global Balanced $15.39 1.14%
Spectrum Select $24.54 -5.11%
Spectrum Strategic $12.21 8.39%
Spectrum Technical $16.21 -0.71%
In Spectrum Global Balanced, a balanced portfolio of stocks, bonds and
managed futures, gains were recorded primarily in the global stock index
futures component from long positions in U.S., German and British stock
index futures as most global equity markets moved higher. A portion of
these gains was offset by losses experienced in the bond futures component
from long positions in European and U.S. interest rate futures as prices
declined amid a flow of investor capital from the safety of government debt
back into the rising global stock markets. In the managed futures
component, gains were recorded in the currency markets, from long Japanese
yen positions as the value of the yen strengthened dramatically versus the
U.S. dollar during the week of October 5th. Gains were also recorded in
the metals markets from short zinc futures positions as prices declined
during the month. Smaller gains were recorded in soft commodities from
short positions in cotton futures. A portion of the Fund's gains was
offset by losses recorded in the energy markets from long positions in
crude oil futures as oil prices moved lower amid reports of increased
stockpiles. In the agricultural markets, losses were recorded from short
positions in corn and lean hog futures.
In Spectrum Select, a Fund managed by three trading advisors who employ
long-term technical trend-following trading systems, losses were recorded
primarily in the financial futures markets from long global interest rate
futures positions, namely U.S. and European bond futures. Prices in these
markets fell as investors sold bonds due to a decline in the value of the
U.S. dollar amid confidence in Japan's economic repair, thus resulting in a
portion of the profits recorded in August and September being given back.
The selling of U.S. bonds by Japanese and Asian investors, President
Clinton's comments regarding the G7's willingness to help emerging market
countries like Brazil, and reported hedge fund difficulties also
contributed to these price declines. In stock index futures, losses were
incurred from short Nikkei Index futures positions as Japanese equity
prices jumped higher after the Japanese government passed bills that lay
the framework for aiding that country's ailing financial institutions.
Short European stock index futures recorded losses as most equity prices
rallied higher on news of the Federal Reserve's interest rate cut during
mid-month. Additional losses were experienced from long crude oil futures
positions as oil prices declined early in the month due to continued high
inventory levels and as storm fears in the Gulf Region subsided. Newly
established short crude oil positions created additional losses as oil
prices increased later in the month amid concerns regarding Hurricane
Mitch. A portion of the Fund's losses was offset by gains recorded in the
currency markets. Long Swiss franc, South African rand and German mark
positions were profitable as the value of the U.S. dollar weakened versus
most major currencies early in the month following the Federal Reserve's
decision to cut two key interest rates.
In Spectrum Strategic, a Fund managed by three trading advisors who employ
fundamental trading methodologies, gains were recorded primarily in the
financial futures markets from long U.S. bond futures positions during the
first several days of the month as October commenced with investors being
concerned about the world's uncertain financial system. Long British
interest rate futures produced additional gains early in the month as
investors sought "safe haven" investments amid general economic turmoil.
Smaller gains were recorded in this market complex from long S&P 500 Index
futures positions as domestic equity prices moved higher. Additional
profits were recorded in the currency markets from long Japanese yen and
German mark positions. The value of U.S. dollar weakened versus these
currencies due to speculation of another easing of interest rates by the
Federal Reserve, continued worldwide economic turmoil, the possibility of
presidential impeachment and reported hedge fund difficulties. A portion
of these gains was offset by losses in the energy markets from long crude
oil futures positions as oil prices declined early in the month as storm
fears in the Gulf Region subsided. Additional losses were experienced from
long silver futures positions as silver prices decreased on
<PAGE>
technically motivated selling during mid-month. Smaller losses were
recorded in the soft commodities and agricultural markets.
In Spectrum Technical, a Fund managed by three trading advisors who employ
long-term technical trend-following trading systems, small losses were
recorded primarily in the financial futures markets from long German bond
futures positions due to the global investment community's shift out of
bonds and back into global equities. Additional losses were experienced in
this market complex from long positions in U.S., British and Italian bond
futures. In the energy markets, losses resulted from long crude oil
futures positions as oil prices declined early in the month due to
continued excessive inventories and as fears regarding storm damage in the
Gulf Region diminished. Newly established short crude oil positions
created additional losses as oil prices increased later in the month amid
concerns regarding Hurricane Mitch. Smaller losses were recorded in the
agricultural markets from short positions in corn and soybean futures as
their prices climbed after the USDA reported lower-than-expected crop
estimates. A majority of the Fund's overall losses was offset by gains in
the currency markets from long Japanese yen positions as the value of the
yen experienced a dramatic rally relative to the U.S. dollar early in the
month. Prospects of another easing of interest rates by the Federal
Reserve, continued worldwide financial turmoil and reported hedge fund
difficulties contributed to the U.S. dollar's weakness. Long positions in
the Swiss franc and German mark also profited due to this weakness in the
U.S. dollar.
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 (10 months) 11.9%
Inception-to-Date Return: 53.9%
Annualized Return: 11.4%
___________________________________________________________________________
__________
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 (10 months) 17.7%
Inception-to-Date Return 145.4%
Annualized Return 13.2%
___________________________________________________________________________
__________
Spectrum Strategic
1994 (2 months) 0.1%
1995 10.5%
1996 -3.5%
1997 0.4%
1998 (10 months) 14.0%
Inception-to-Date Return: 22.1%
Annualized Return: 5.1%
___________________________________________________________________________
__________
Spectrum Technical
1994 (2 months) -2.2%
1995 17.6%
1996 18.4%
1997 7.5%
1998 (10 months) 10.8%
Inception-to-Date Return: 62.1%
Annualized Return: 12.8%
</TABLE>___________________________________________________________________
__________________
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<TABLE>
Dean Witter Spectrum Series
Statements of Operations
For the Month Ended October 31, 1998
(Unaudited)
<CAPTION>
Dean Witter Spectrum
Global Balanced Dean Witter Spectrum Select
Percent of
Percent of
October 1, 1998
October 1, 1998
Amount Net Asset Value Amount
Net Asset Value
$ % $ %
REVENUES
<S> <C> <C>
Trading Profit (Loss):
Realized 170,725 0.42 8,913,621
4.36
Net change in unrealized 379,687 0.94 (18,256,845)
(8.93)
Total Trading Results 550,412 1.36 (9,343,224)
(4.57)
Interest Income (DWR) 160,039 0.40
640,080 0.31
Total Revenues 710,451 1.76
(8,703,144) (4.26)
EXPENSES
Brokerage fees (DWR) 155,094 0.38 1,234,899
0.60
Incentive fees 52,976 0.13 3,398
- -
Management fees 42,145 0.11
510,992 0.25
Total Expenses 250,215 0.62
1,749,289 0.85
NET INCOME (LOSS) 460,236 1.14
(10,452,433) (5.11)
Dean Witter Spectrum Series
Statements of Changes in Net Asset Value
For the Month Ended October 31, 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,
October 1, 1998 2,659,346.277 40,459,538 15.21 7,902,314.521
204,396,888 25.87
Net Income (Loss) - 460,236 0.18 -
(10,452,433) (1.33)
Redemptions (7,562.789) (116,391) 15.39 (45,002.800)
(1,104,369) 24.54
Subscriptions 82,977.222 1,277,019 15.39 189,449.879
4,649,100 24.54
Net Asset Value,
October 31, 1998 2,734,760.710 42,080,402 15.39 8,046,761.600
197,489,186 24.54
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 October 31, 1998
(Unaudited)
<CAPTION>
Dean Witter
Spectrum Strategic Dean Witter Spectrum Technical.
Percent of
Percent of
October 1, 1998
October 1, 1998
Amount Net Asset Value Amount
Net Asset Value
$ % $ %
REVENUES
<S> <C> <C> <C>
<C>
Trading Profit (Loss):
Realized 14,805,992 22.61 4,434,797
1.80
Net change in unrealized (7,787,252) (11.89)
(4,072,896) (1.65)
Total Trading Results 7,018,740 10.72 361,901
0.15
Interest Income (DWR) 241,420 0.37
747,756 0.30
Total Revenues 7,260,160 11.09 1,109,657
0.45
EXPENSES
Brokerage fees (DWR) 395,606 0.60 1,489,261
0.61
Incentive fees 1,158,265 1.77 537,785
0.22
Management fees 214,172 0.33 821,661
0.33
Total Expenses 1,768,043 2.70 2,848,707
1.16
NET INCOME (LOSS) 5,492,117 8.39 (1,739,050)
(0.71)
Dean Witter Spectrum Series
Statements of Changes in Net Asset Value
For the Month Ended October 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,
October 1, 1998 5,814,959.944 65,479,623 11.26 15,096,413.432
246,498,391 16.33
Net Income (Loss) - 5,492,117 0.95 -
(1,739,050) (0.12)
Redemptions (71,376.663) (871,509) 12.21 (91,313.792)
(1,480,197) 16.21
Subscriptions 111,727.931 1,364,198 12.21 392,998.420
6,370,504 16.21
Net Asset Value,
October 31, 1998 5,855,311.212 71,464,429 12.21 15,398,098.060
249,649,648 16.21
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"), an affiliate of Demeter. The clearing
commodity broker is 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 Agreements, 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 for 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.
