-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Az/h3bwFI+/XO57ZUCin0DKkBG39bTku+ZBqa2D3YJI2b0KbjTRXtLo3BeD6ZBxR on8+wfr2K7pw1vYITYVd5g== /in/edgar/work/20000628/0000873799-00-000008/0000873799-00-000008.txt : 20000920 0000873799-00-000008.hdr.sgml : 20000920 ACCESSION NUMBER: 0000873799-00-000008 CONFORMED SUBMISSION TYPE: 424B3 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20000628 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORGAN STANLEY DEAN WITTER SPECTRUM SELECT LP CENTRAL INDEX KEY: 0000873799 STANDARD INDUSTRIAL CLASSIFICATION: [6798 ] IRS NUMBER: 133619290 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: SEC FILE NUMBER: 333-47829 FILM NUMBER: 663335 BUSINESS ADDRESS: STREET 1: TWO WORLD TRADE CNTR - 62ND FLR STREET 2: C/O DEMETER MANAGEMENT CORP CITY: NEW YORK STATE: NY ZIP: 10048 BUSINESS PHONE: 2123928899 MAIL ADDRESS: STREET 1: C/O DEMETER MANAGEMENT CORP STREET 2: TWO WORLD TRADE CENTER CITY: NEW YORK STATE: NY ZIP: 10048 FORMER COMPANY: FORMER CONFORMED NAME: DEAN WITTER SPECTRUM SELECT LP DATE OF NAME CHANGE: 19980507 FORMER COMPANY: FORMER CONFORMED NAME: WITTER DEAN SELECT FUTURES FUND LP DATE OF NAME CHANGE: 19930328 424B3 1 0001.txt Morgan Stanley Dean Witter Spectrum Series Monthly Report May 2000 Dear Limited Partner: The Net Asset Value per Unit for each of the five Morgan Stanley Dean Witter Spectrum Funds as of May 31, 2000 was as follows: Funds N.A.V. % change for month Spectrum Commodity $ 7.74 4.39% Spectrum Global Balanced $15.65 -1.29% Spectrum Select $21.19 1.56% Spectrum Strategic $12.28 10.17% Spectrum Technical $14.03 -0.42% In general, the performance disparity between the Funds in the Spectrum Series is due to the portfolio structure and trading approaches unique to each fund. Spectrum Strategic, a fund managed by multiple trading advisors who employ fundamental trading methodologies, recorded gains in a wide number of currency, energy and soft commodity markets. Spectrum Commodity, formerly Morgan Stanley Dean Witter Tangible Asset Fund, profited primarily in the energy markets and also in soft commodities. Spectrum Select, a technically-based multi-manager fund, recorded gains primarily in the global interest rate futures markets, particularly European interest rate futures. On the other hand, Spectrum Technical, the other technically- based multi-manager fund, incurred losses due to its way of participating in the global interest rate futures markets, particularly U.S. interest rate futures. Spectrum Global Balanced, a balanced portfolio of stocks, bonds and managed futures, incurred losses primarily in global stock index futures, particularly from long Nikkei Index futures positions. Spectrum Commodity The Fund increased in value during May due primarily to gains recorded in the energy markets from long natural gas futures positions as prices climbed higher amid supply woes heightened by low storage injection data as reported by the American Gas Association and perceptions that dwindling storage levels could mean a very tight market during the peak demand months this winter. Additional gains were recorded from long positions in crude oil and its related products as oil prices increased amid concerns over tight gasoline supplies ahead of the peak driving summer season and after comments from OPEC ministers who see no need to raise supplies further in June. In the soft commodities markets, gains were recorded from long positions in cotton futures as cotton prices increased on news of hot and dry weather forecasted for key producing areas. A portion of these gains was offset by losses recorded in the livestock markets from long live cattle futures positions as prices declined amid technical based selling. In the metals markets, losses were incurred from long positions in nickel futures as most base metals prices moved lower later in the month. Spectrum Global Balanced The Fund decreased in value during May due primarily to losses recorded in the global stock index component of the balanced portfolio from long positions in Nikkei Index futures as the Japanese stock market declined, with former "high-flying" technology stocks pounded by another setback in the U.S. NASDAQ market. In the metals markets, losses were experienced from long positions in nickel and copper futures as most base metals prices moved lower later in the month amid technical based selling. In the currency markets, losses were experienced later in the month from short positions in the euro as the value of Europe's common currency suddenly strengthened relative to the U.S. dollar and the British pound amid renewed expectation of European Central Bank support for the euro and after a decision by the Bank of England to hold interest rates unchanged. Offsetting currency gains were recorded from short positions in the New Zealand dollar as its value weakened to a 15-year low relative to the U.S. dollar due to inflationary pressures in that country. A portion of these losses was offset by gains recorded in the energy markets from long natural gas futures positions as prices climbed higher amid supply woes and perceptions that dwindling storage levels could mean a very tight market during the peak demand months this winter. In the global interest rate component, gains were recorded from short positions in euribor futures as the price of these short-term European interest rate futures moved sharply lower in response to the FOMC's interest rate hike in the U.S. Spectrum Select The Fund increased in value during May due primarily to gains recorded in the energy markets from long natural gas futures positions as prices climbed higher amid supply woes and perceptions that dwindling storage levels could mean a very tight market during the peak demand months this winter. In the global interest rate futures markets, gains were recorded from short positions in euribor futures as the price of these short-term European interest rate futures moved sharply lower in response to the FOMC's interest rate hike in the U.S. In the currency markets, gains were recorded from short positions in the New Zealand dollar as its value weakened to a 15-year low relative to the U.S. dollar due to inflationary pressures in that country. A portion of these gains was offset by losses recorded in the metals markets from long positions in nickel and copper futures as most base metals prices moved lower later in the month amid technical based selling. In the agricultural markets, smaller losses were incurred from long corn and soybean futures positions as prices moved lower due to forecasts for heavy rain in the U.S. corn and soy growing regions. Spectrum Strategic The Fund increased in value during May due primarily to gains recorded in the energy markets from long natural gas futures positions as prices climbed higher amid supply woes and perceptions that dwindling storage levels could mean a very tight market during the peak demand months this winter. Additional gains were recorded early in the month from long futures positions in crude oil and its related products as oil prices increased amid concerns over tight gasoline supplies ahead of the peak driving summer season and after comments from OPEC ministers who see no need to raise supplies further in June. In the currency markets, profits were recorded later in the month from long positions in the euro as the value of Europe's common currency suddenly strengthened relative to the U.S. dollar amid renewed expectation of European Central Bank support for the euro. In the soft commodities markets, gains were recorded from long positions in cotton futures as cotton prices increased on news of hot and dry weather forecasted for key producing areas. In the global stock index futures markets, gains were recorded early in the month from short positions in S&P 500 Index futures as U.S. stock prices declined as interest rate worries sapped sentiment across the board. Newly established long positions in S&P 500 Index futures were also profitable as U.S. equity prices increased during mid-month after the Federal Reserve pushed up key interest rates to slow the booming economy and keep inflationary pressures in check. A portion of these gains was offset by losses recorded in the global interest rate futures markets from short positions in European interest rate futures as prices increased as the euro strengthened. In the metals markets, losses were experienced from long positions in zinc, aluminum and copper futures as most base metals prices moved lower later in the month amid a technical sell-off. Spectrum Technical The Fund recorded small losses during May primarily from trading in the global interest rate futures markets from long positions in long-term U.S. interest rate futures as prices declined early in the month after a report showing the labor market tightened in April all but cemented fears the Federal Reserve will have to raise interest rates more aggressively to snuff out inflationary pressures. Newly established short positions incurred additional losses later in the month as prices moved higher as investors shed stock holdings for the safe haven of bonds. In the currency markets, losses were experienced later in the month from short positions in the euro as the value of Europe's common currency suddenly strengthened relative to the U.S. dollar amid renewed expectation of European Central Bank support for the euro. Offsetting currency gains were recorded early in the month from short positions in the British pound as its value weakened versus the U.S. dollar after a decision by the Bank of England to hold interest rates unchanged. Additionally, gains were recorded in the energy markets from long natural gas futures positions as prices climbed higher amid supply woes and perceptions that dwindling storage levels could mean a very tight market during the peak demand months this winter. In the global stock index futures markets, gains were recorded from short positions in Nikkei Index futures as the Japanese stock market declined, with former "high-flying" technology stocks pounded by another setback in the U.S. NASDAQ Index. In soft commodities, profits were recorded from long sugar futures positions as prices moved higher on reports of lower plantings and speculation that the world's surplus could shrink. Commencing in June 2000, the General Partner began to transfer the clearing commodity broker and the foreign currency forward counterparty for each Spectrum Series partnership to Morgan Stanley & Co. Incorporated and Morgan Stanley & Co. International Limited, both affiliates of the General Partner. This transfer is fully described in the prospectus supplement dated June 22, 2000. 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 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. Funds Year Return Spectrum Commodity 1998 -34.3% 1998 15.8% 2000 (5 months) 1.7% Inception-to-Date Return: -22.6% Annualized Return: -10.1% ___________________________________________________________________________ __________ Spectrum Global Balanced 1994 (2 months) -1.7% 1995 22.8% 1996 -3.6% 1997 18.2% 1999 16.4% 1999 0.8% 2000 (5 months) -2.9% Inception-to-Date Return: 56.5% Annualized Return: 8.4% ___________________________________________________________________________ __________ 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 (5 months) -3.7% Inception-to-Date Return: 111.9% Annualized Return 8.9% ___________________________________________________________________________ __________ Spectrum Strategic 1994 (2 months) 0.1% 1995 10.5% 1996 -3.5% 1997 0.4% 1998 7.8% 1999 37.2% 2000 (5 months) -22.5% Inception-to-Date Return: 22.8% Annualized Return: 3.7% ___________________________________________________________________________ __________
Spectrum Technical 1994 (2 months) -2.2% 1995 17.6% 1996 18.3% 1997 7.5% 1998 10.2% 1999 - -7.5% 2000 (5 months) -5.9% Inception-to-Date Return: 40.3% Annualized Return: 6.3%
Morgan Stanley Dean Witter Spectrum Series Statements of Operations For the Month Ended May 31, 2000 (Unaudited)
Morgan Stanley Dean Witter Morgan Stanley Dean Witter Morgan Stanley Dean Witter Spectrum Commodity Spectrum Global Balanced _ Spectrum Select Percent of Percent of Percent of May 1, 2000 May 1, 2000 May 1, 2000 Beginning Beginning Beginning Amount Net Asset Value Amount Net Asset Value Amount Net Asset Value $ % $ % $ % REVENUES Trading profit (loss): Realized 534,280 2.54 (1,055,141) (1.89) (430,938) (0.21) Net change in unrealized 423,597 2.01 326,878 0.59 4,493,809 2.22 Total Trading Results 957,877 4.55 (728,263) (1.30) (4,062,871) 2.01 Interest Income (DWR) 91,459 0.43 277,288 0.50 831,913 0.41 Total Revenues 1,049,336 4.98 (450,975) (0.80) 4,894,784 2.42 EXPENSES Brokerage fees (DWR) 80,668 0.38 214,132 0.38 1,224,462 0.61 Management fees 43,841 0.21 58,189 0.11 506,674 0.25 Incentive fees - - - - - - - . Total Expenses 124,509 0.59 272,321 0.49 1,731,136 0.86 NET INCOME (LOSS) 924,827 4.39 (723,296) (1.29) 3,163,648 1.56 Morgan Stanley Dean Witter Spectrum Series Statements of Changes in Net Asset Value For the Month Ended May 31, 2000 (Unaudited) Morgan Stanley Dean Witter Morgan Stanley Dean Witter Morgan Stanley Dean Witter Spectrum Commodity Spectrum Global Balanced Spectrum Select . Units Amount Per Unit Units Amount Per Unit Units Amount Per Unit $ $ $ $ $ $ Net Asset Value, May 1, 2000 2,838,025.363 21,043,686 7.42 3,522,187.765 55,860,894 15.86 9,715,583.896 202,669,480 20.86 Net Income (Loss) - 924,827 0.32 - (723,296) (0.21) - 3,163,648 0.33 Redemptions (30,776.908) (238,213) 7.74 (36,789.030) (575,748) 15.65 (214,507.890) (4,545,422) 21.19 Subscriptions 25,991.214 201,172 7.74 57,733.822 903,534 15.65 113,860.043 2,412,695 21.19 Net Asset Value, May 31, 2000 2,833,239.669 21,931,472 7.74 3,543,132.557 55,465,384 15.65 9,614,936.049 203,700,401 21.19 The accompanying notes are an integral part of these financial statements.
Morgan Stanley Dean Witter Spectrum Series Statements of Operations For the Month Ended May 31, 2000 (Unaudited)
Morgan Stanley Dean Witter Morgan Stanley Dean Witter Spectrum Strategic Spectrum Technical . Percent of Percent of May 1, 2000 May 1, 2000 Amount Net Asset Value Amount Net Asset Value $ % $ % REVENUES Trading profit (loss): Realized 1,452,771 1.83 (5,830,694) (2.32) Net change in unrealized 7,102,847 8.97 6,121,998 2.44 Total Trading Results 8,555,618 10.80 291,304 0.12 Interest Income (DWR) 353,995 0.45 997,311 0.40 Total Revenues 8,909,613 11.25 1,288,615 0.52 EXPENSES Brokerage fees (DWR) 361,756 0.46 1,516,710 0.61 Management fees 182,035 0.23 836,806 0.33 Incentive fees 316,728 0.39 - - - Total Expenses 860,519 1.08 2,353,516 0.94 NET INCOME (LOSS) 8,049,094 10.17 (1,064,901) (0.42) Morgan Stanley Dean Witter Spectrum Series Statements of Changes in Net Asset Value For the Month Ended May 31, 2000 (Unaudited) Morgan Stanley Dean Witter Morgan Stanley Dean Witter Spectrum Strategic Spectrum Technical . Units Amount Per Unit Units Amount Per Unit $ $ $ $ Net Asset Value, May 1, 2000 7,103,527.758 79,184,311 11.15 17,818,070.623 251,041,663 14.09 Net Income (Loss) - 8,049,094 1.13 - (1,064,901) (0.06) Redemptions (114,097.425) (1,401,116) 12.28 (307,563.383) (4,315,114) 14.03 Subscriptions 164,929.056 2,025,329 12.28 213,889.962 3,000,876 14.03 Net Asset Value, May 31, 2000 7,154,359.389 87,857,618 12.28 17,724,397.202 248,662,524 14.03 The accompanying notes are an integral part of these financial statements.
Morgan Stanley Dean Witter Spectrum Series Notes to Financial Statements (Unaudited) 1. Summary of Significant Accounting Policies Organization - Morgan Stanley Dean Witter Spectrum Commodity L.P. ("Spectrum Commodity," formerly Morgan Stanley Tangible Asset Fund L.P.), 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 primarily 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 for Spectrum Global Balanced, Spectrum Select, Spectrum Strategic and Spectrum Technical is Dean Witter Reynolds, Inc. ("DWR") and an unaffiliated clearing commodity broker, Carr Futures Inc. ("Carr"), provides clearing and execution services. The commodity brokers for Spectrum Commodity are Morgan Stanley & Co. Incorporated ("MS & Co.") and Morgan Stanley & Co. International Limited ("MSIL"). Morgan Stanley Dean Witter Commodities Management, Inc. ("MSDWC") is the trading advisor to Spectrum Commodity. Demeter, DWR, MS& Co., MSDWC and MSIL 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 interest income on 80% of the month's average daily "Net Assets" (as defined in the limited partnership agreements) of Spectrum Select, Spectrum Strategic and Spectrum Technical, and 100% in the case of Spectrum Global Balanced. MS & Co. credits Spectrum Commodity at each month-end with interest income on 80% of the Partnership's average daily Net Assets for the month. The interest rates used are 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. Morgan Stanley Dean Witter Spectrum Series Notes to Financial Statements (Continued) Brokerage and Related Transaction Fees and Costs - The brokerage fee for Spectrum Commodity is accrued at a flat monthly rate of 1/12 of 3.65% (a 3.65% annual rate) of Net Assets as of the first day of each month. The brokerage fee for Spectrum Global Balanced is accrued at a flat monthly rate of 1/12 of 4.60% (a 4.60% annual rate) of Net Assets as of the first day of each month. 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 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. Service Fee - Spectrum Commodity pays Demeter a monthly service fee equal to 1/12 of 1% (a 1% annual rate) of Net Assets as of the first day of each month. 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. 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 Commodity will terminate on December 31, 2027, 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 Spectrum Commodity pays brokerage fees to the Commodity Brokers and a service fee to Demeter, Spectrum Global Balanced, Spectrum Select, Spectrum Strategic and Spectrum Technical each pay brokerage fees to DWR, as described in Note 1. Spectrum Commodity's cash is on deposit with MS & Co. and MSIL and Spectrum Global Balanced's, Spectrum Select's, Spectrum Strategic's and Spectrum Technical's cash is on deposit with DWR and Carr in futures interests trading accounts to meet margin requirements as needed. DWR and MS & Co. pay 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 Commodity L.P. Morgan Stanley Dean Witter Commodities Management, Inc. 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") Morgan Stanley Dean Witter Spectrum Technical L.P. Campbell & Company, Inc.) ("Campbell") Chesapeake Capital Corporation ("Chesapeake") John W. Henry & Company, Inc. ("JWH") Compensation to the trading advisors by the Partnerships consists of a management fee and an incentive fee as follows: Morgan Stanley Dean Witter Spectrum Series Notes to Financial Statements (Concluded) Management Fee - The management fee for Spectrum Commodity is accrued at a rate of 5/24 of 1% of Net Assets on the first day of each month (a 2.5% annual rate). The management fee for Spectrum Global Balanced is accrued at a rate of 5/48 of 1% 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% of Net Assets 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% of Net Assets allocated to Blenheim on the first day of each month, and 1/12 of 3% 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% of Net Assets on the first day of each month (a 4% annual rate). Incentive Fee - Spectrum Commodity pays an annual incentive fee equal to 20% of the trading profits as of the end of each calendar year. Spectrum Global Balanced, Spectrum Select and Spectrum Strategic each pay a monthly incentive fee equal to 15% of the trading profits experienced with respect to each trading advisor's allocated Net Assets as of the end of each calendar month. 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 for the Partnership's represent the amount by which profits from futures, forward 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. -----END PRIVACY-ENHANCED MESSAGE-----