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SIGNATURE GREGORY S. DUCH
TITLE TREASURER
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1999
<PERIOD-END> OCT-31-1999
<INVESTMENTS-AT-COST> 409104510
<INVESTMENTS-AT-VALUE> 538929757
<RECEIVABLES> 21270303
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 1360306
<TOTAL-ASSETS> 561560366
<PAYABLE-FOR-SECURITIES> 10672949
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2231859
<TOTAL-LIABILITIES> 12904808
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 374489309
<SHARES-COMMON-STOCK> 51009172
<SHARES-COMMON-PRIOR> 42685715
<ACCUMULATED-NII-CURRENT> (8858121)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 53199123
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 129825247
<NET-ASSETS> 548655558
<DIVIDEND-INCOME> 854111
<INTEREST-INCOME> 387362
<OTHER-INCOME> 0
<EXPENSES-NET> 7044214
<NET-INVESTMENT-INCOME> (5802741)
<REALIZED-GAINS-CURRENT> 54227221
<APPREC-INCREASE-CURRENT> 101424060
<NET-CHANGE-FROM-OPS> 149848540
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 1341765
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 67279182
<NUMBER-OF-SHARES-REDEEMED> 45430801
<SHARES-REINVESTED> 146798
<NET-CHANGE-IN-ASSETS> 355617002
<ACCUMULATED-NII-PRIOR> (3055)
<ACCUMULATED-GAINS-PRIOR> 313667
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5716197
<INTEREST-EXPENSE> 55622
<GROSS-EXPENSE> 7044214
<AVERAGE-NET-ASSETS> 381080
<PER-SHARE-NAV-BEGIN> 6.65
<PER-SHARE-NII> (.07)
<PER-SHARE-GAIN-APPREC> 4.22
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .04
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</TABLE>
ARTHUR
ANDERSEN
---------------------------
Arthur Andersen LLP
---------------------------
1345 Avenue of the Americas
New York NY 10105-0032
To the Shareholders and
Board of Trustees of Spectra Fund:
In planning and performing our audit of the financial statements of Spectra Fund
for the year ended October 31, 1999, we considered its internal control,
including control activities for safeguarding securities, in order to determine
our auditing procedures for the purpose of expressing our opinion on the
financial statements and to comply with the requirements of Form N-SAR, not to
provide assurance on internal control.
The management of Spectra Fund is responsible for establishing and maintaining
internal control. In fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and related costs of
controls. Generally, controls that are relevant to an audit pertain to the
entity's objective of preparing financial statements for external purposes that
are fairly presented in conformity with generally accepted accounting
principles. Those controls include the safeguarding of assets against
unauthorized acquisition, use, or disposition.
Because of inherent limitations in internal control, error or fraud may occur
and not be detected. Also, projection of any evaluation of internal control to
future periods is subject to the risk that it may become inadequate because of
changes in conditions or that the effectiveness of the design and operation may
deteriorate.
Our consideration of internal control would not necessarily disclose all matters
in internal control that might be material weaknesses under standards
established by the American Institute of Certified Public Accountants. A
material weakness is a condition in which the design or operation of one or more
of the internal control components does not reduce to relatively low level the
risk that misstatements caused by error or fraud may occur and not be detected
within a timely period by employees in the normal course of performing their
assigned functions. However, we noted no matters involving internal control and
its operation, including controls for safeguarding securities, that we consider
to be material weaknesses as defined above as of October 31, 1999.
This report is intended solely for the information and use of management, the
Board of Trustees of Spectra Fund, and the Securities and Exchange Commission.
/s/Arthur Andersen LLP
New York, New York
December 7, 1999
