-----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, PX1XwutE8yR7gMdzrHPa2FBJbLvKXin/L4OfhsXl4xzQL79qexIlhz3c/dg0kDOM IGxEmk9uB3n8Tn6d2/p/oA== 0000873799-99-000011.txt : 19990830 0000873799-99-000011.hdr.sgml : 19990830 ACCESSION NUMBER: 0000873799-99-000011 CONFORMED SUBMISSION TYPE: 424B3 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19990827 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORGAN STANLEY DEAN WITTER SPECTRUM SELECT LP CENTRAL INDEX KEY: 0000873799 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [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: 99701092 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 Morgan Stanley Dean Witter Spectrum Series Monthly Report July 1999 Dear Limited Partner: The Net Asset Value per Unit for each of the four Morgan Stanley Dean Witter Spectrum Funds as of July 31, 1999 was as follows: Funds N.A.V. % change for month Spectrum Global Balanced $15.90 -1.71% Spectrum Select $22.60 -4.42% Spectrum Strategic $12.81 -1.06% Spectrum Technical $15.75 -3.88% In Spectrum Global Balanced, a balanced portfolio of stocks, bonds and managed futures, losses were experienced during July primarily in the global stock index component from long German stock index futures positions as German equity prices declined as investors reacted to the strengthening euro by selling stocks. Additional losses were incurred from long S&P 500 Index futures positions as domestic equity prices declined on inflationary concerns in the U.S. after Federal Reserve Chairman Alan Greenspan said that the economy may be growing fast enough to warrant a second interest rate increase later this year. In the global interest rate futures component, losses were experienced from long U.S. interest rate futures positions as domestic bond prices moved lower during the second half of the month as reports on labor costs, home sales, manufacturing and personal income added to concern that the U.S. Federal Reserve will raise interest rates soon. In soft commodities, losses were recorded from long sugar futures positions as prices decreased amid seasonally slow demand, the end of Russia's spring buying spree and ample world supplies. A portion of the Fund's overall losses was offset by gains in the energy markets recorded during the first half of July from long crude oil futures positions as prices moved higher due to decreasing U.S. oil inventories and continuing adherence to output reductions by OPEC countries. In agriculturals, gains were recorded from short soybean oil futures positions as prices fell due to rain in scattered areas of the central Midwest, as well as forecasts for cooler temperatures. In the currency markets, gains were recorded from long Japanese yen positions as the value of the yen reached a 5 1/2 month high versus the U.S. dollar due to inflationary pressures in the United States and optimistic prospects for economic growth in Japan. In Spectrum Select, a Fund managed by multiple trading advisors who employ long-term technical trend-following trading strategies, losses were recorded during July primarily in the currency markets from short euro positions as its value reversed its recent downward trend versus the U.S. dollar due to a better-than-expected German business sentiment survey and a record U.S. trade deficit. Additional losses were recorded in the global stock index futures markets from long S&P 500 Index futures positions as prices fell after Federal Reserve Chairman Alan Greenspan said that the economy may be growing fast enough to warrant a second interest rate increase later this year. Smaller losses were experienced in the global interest rate futures markets from short positions in Japanese interest rate futures as prices moved higher amid investors' fears that a strong Japanese yen might slowdown that nation's budding recovery. A portion of the Fund's overall losses was offset by gains recorded in the energy markets from long unleaded gas futures positions earlier in the month as prices increased due to a fall in U.S. oil inventories, production difficulties in Nigeria and continued adherence to output reductions from OPEC countries. Additional gains were recorded in the soft commodities markets from short coffee futures positions as prices declined as fears of impending frost damage to Brazilian crops evaporated and on predictions that Brazil would reap a record harvest next year. In metals, profits resulted from short gold futures positions as prices reached 20-year lows amid continuing murmurs that central banks were offloading or seeking to offload the precious metal, following the Bank of England's example. Smaller gains were experienced in the agricultural markets from short soybean oil futures positions as prices fell earlier in the month on forecasts for beneficial crop weather. In Spectrum Strategic, a Fund managed by multiple trading advisors who employ fundamental trading methodologies, losses were experienced during July primarily in the currency markets from short Japanese yen positions as its value strengthened relative to the U.S. dollar in the absence of any U.S. dollar-buying intervention by the Bank of Japan and on talks that Japan will end its zero interest rate policy. Later in the month, additional losses were also recorded in this market as the value of the yen reached a 5 1/2 month high versus the U.S. dollar due to inflationary pressures in the United States and optimistic prospects for economic growth in Japan. In the global interest rate futures markets, losses were recorded from short U.S. interest rate futures positions as U.S. Treasury prices temporarily climbed during mid-month as talks of economic problems in Latin America sent Argentine and Brazilian stock prices sharply lower, thus fueling demand for the safety of U.S. government securities. In the agricultural markets, losses were recorded early in the month from long positions in soybeans and corn futures as prices declined on forecasts for favorable crop weather in the U.S. A portion of the Fund's overall losses was offset by gains in the energy markets during the first half of July from long futures positions in crude oil and its refined products, unleaded gas and heating oil, as oil prices moved higher due to decreasing U.S. oil inventories and continuing adherence to output reductions by OPEC countries. In the metals markets, gains were recorded from long zinc futures positions as base metals prices rallied as a result of recent producer output cutbacks and stock drawdowns. In the global stock index futures markets, gains were recorded later in the month from long positions in Nikkei Index futures as Japanese equity prices were boosted higher on views that the Japanese economy is improving, reports of strong industrial production data and gains in the high-tech sector. In Spectrum Technical, a Fund managed by multiple trading advisors who employ long-term technical trend-following trading systems, losses were recorded during July primarily in the currency markets from short British pound positions as its value increased relative to the U.S. dollar in anticipation of British economic data and on the weakness of the U.S. dollar. Short positions in the Swiss franc and the European common currency, the euro, were also unprofitable as the value of these currencies also reversed their recent downward trend versus the U.S. dollar due to a better-than-expected German business sentiment survey and a record U.S. trade deficit. In global stock index futures, losses were experienced from long positions in ASE All Ordinaries Index futures as Australian stock prices moved lower on inflationary concerns in the U.S. Long S&P 500 Index futures positions also resulted in losses as prices declined after Federal Reserve Chairman Alan Greenspan said that the U.S. economy may be growing fast enough to warrant a second interest rate increase this year. In the agricultural markets, smaller losses resulted from long soybean meal futures positions as prices declined amid a drop in soybean prices. A portion of the Fund's overall losses was offset by gains recorded in the energy markets from long crude oil futures positions as oil prices increased due to a fall in U.S. oil inventories, production difficulties in Nigeria and continued adherence to output reductions from OPEC countries. Additional gains were recorded in the global interest rate futures markets from short German bond futures positions as most European bond prices decreased on signs of a resurgence in that region's economy. Smaller gains were experienced in the metals markets from short gold futures positions as prices reached 20-year lows amid continuing murmurs that central banks were offloading or seeking to offload the precious metal, following the Bank of England's example. 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 President 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 Global Balanced 1994 (2 months) -1.7% 1995 22.8% 1996 -3.6% 1997 18.2% 1998 16.4% 1999 (7 months) -0.6% Inception-to-Date Return: 59.0% Annualized Return: 10.3% ___________________________________________________________________________ __________ 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 14.2% 1999 (7 months) - 5.0% Inception-to-Date Return: 126.0% Annualized Return 10.7% ___________________________________________________________________________ __________ Spectrum Strategic 1994 (2 months) 0.1% 1995 10.5% 1996 -3.5% 1997 0.4% 1998 7.8% 1999 (7 months) 10.9% Inception-to-Date Return: 28.1% Annualized Return: 5.4% ___________________________________________________________________________ __________ Spectrum Technical 1994 (2 months) -2.2% 1995 17.6% 1996 18.3% 1997 7.5% 1998 10.2% 1999 (7 months) - 2.3% Inception-to-Date Return: 57.5% Annualized Return: 10.0% Morgan Stanley Dean Witter Spectrum Series Statements of Operations For the Month Ended July 31, 1999 (Unaudited)
Morgan Stanley Dean Witter Morgan Stanley Dean Witter Spectrum Global Balanced Spectrum Select Percent of Percent of July 1, 1999 July 1, 1999 Beginning Beginning Amount Net Asset Value Amount Net Asset Value $ % $ % REVENUES Trading Profit (Loss): Realized (314,264) (0.58) (109,217) (0.05) Net change in unrealized 549,139 (1.02) (8,199,824) (3.82) Total Trading Results (863,403) (1.60) (8,309,041) (3.87) Interest Income (DWR) 205,858 0.38 657,689 0.31 Total Revenues (657,545) (1.22) (7,651,352) (3.56) EXPENSES Brokerage fees (DWR) 206,888 0.38 1,296,873 0.61 Management fees 56,220 0.11 536,636 0.25 Total Expenses 263,108 0.49 1,833,509 0.86 NET LOSS (920,653) (1.71) (9,484,861) (4.42) Morgan Stanley Dean Witter Spectrum Series Statements of Changes in Net Asset Value For the Month Ended July 31, 1999 (Unaudited) Morgan Stanley Dean Witter Morgan Stanley Dean Witter Spectrum Global Balanced Spectrum Select . Units Amount Per Unit Units Amount Per Unit $ $ $ $ Net Asset Value, July 1, 1999 3,337,473.311 53,971,201 16.17 9,080,012.809 214,654,685 23.64 Net Loss - (920,653) (0.27) - (9,484,861) (1.04) Redemptions (23,603.051) (375,289) 15.90 (72,432.360) (1,637,080) 22.60 Subscriptions 101,500.118 1,613,852 15.90 240,366.780 5,432,289 22.60 Net Asset Value, July 31, 1999 3,415,370.378 54,289,111 15.90 9,247,947.229 208,965,033 22.60 The accompanying notes are an integral part of these financial statements.
Morgan Stanley Dean Witter Spectrum Series Statements of Operations For the Month Ended July 31, 1999 (Unaudited) Morgan Stanley Dean Witter Morgan Stanley Dean Witter Spectrum Strategic Spectrum Technical . Percent of Percent of July 1, 1999 July 1, 1999 Amount Net Asset Value Amount Net Asset Value $ % $ % REVENUES Trading Profit (Loss): Realized 2,487,357 3.02 (6,809,921) (2.44) Net change in unrealized (2,832,973) (3.44) (2,235,254) (0.80) Total Trading Results (345,616) (0.42) (9,045,175) (3.24) Interest Income (DWR) 235,073 0.29 836,235 0.30 Total Revenues (110,543) (0.13) (8,208,940) (2.94) EXPENSES Brokerage fees (DWR) 498,101 0.60 1,686,235 0.61 Management fees 267,367 0.33 930,337 0.33 Total Expenses 765,468 0.93 2,616,572 0.94 NET LOSS (876,011) (1.06) (10,825,512) (3.88) Morgan Stanley Dean Witter Spectrum Series Statements of Changes in Net Asset Value For the Month Ended July 31, 1999 (Unaudited) Morgan Stanley Dean Witter Morgan Stanley Dean Witter Spectrum Strategic Spectrum Technical . Units Amount Per Unit Units Amount Per Unit $ $ $ $ Net Asset Value, July 1, 1999 6,370,000.946 82,444,359 12.94 17,032,196.401 279,100,864 16.39 Net Loss - (876,011) (0.13) - (10,825,512) (0.64) Redemptions (38,962.994) (499,116) 12.81 (100,027.820) (1,575,438) 15.75 Subscriptions 170,622.600 2,185,676 12.81 472,261.995 7,438,127 15.75 Net Asset Value, July 31, 1999 6,501,660.552 83,254,908 12.81 17,404,430.576 274,138,041 15.75 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 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 and on physical commodities, and other commodities interests, including, but not limited to, foreign currencies, financial instruments, precious and industrial metals, energy products, and agriculturals (collectively, "futures interests"). The general partner for each Partnership is Demeter Management Corporation ("Demeter"). The non-clearing commodity broker is Dean Witter Reynolds, Inc. ("DWR") and an unaffiliated clearing commodity broker, Carr Futures Inc. ("Carr"), provides clearing and execution services. Both Demeter and DWR 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 the General and Limited Partners based upon their proportional ownership interests. Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue Recognition - Futures interests 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 Global 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 futures 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 and Related Transaction Fees and Costs - Brokerage fees for Spectrum Global Balanced are accrued at a flat monthly rate of 1/12 of 4.60% (a 4.60% annual rate) of the Net Assets as of the first day of each month. Morgan Stanley Dean Witter Spectrum Series Notes to Financial Statements (Continued) 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 the Net Assets as of the first day of each month. Such fee covers all brokerage commissions, 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. 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 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 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. 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 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 Each Partnership pays brokerage fees to DWR as described in Note 1. Each Partnership's cash is on deposit with DWR and Carr in futures interests trading accounts to meet margin requirements as needed. DWR pays 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 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") Willowbridge Associates Inc. ("Willowbridge") Demeter has adjusted the allocation of Net Assets among the trading advisors within Spectrum Strategic. Commencing with the June 30, 1999 monthly closing, net proceeds received by Spectrum Strategic at each monthly closing will be allocated 75% to AICM, 0% to Blenheim, and 25% to Willowbridge Additionally, 100% of redemptions will be allocated to Blenheim. Morgan Stanley Dean Witter Spectrum Series Notes to Financial Statements (Continued) 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 manage-ment fees and incentive fees as follows: Management Fee - The management fee for Spectrum Global Balanced is accrued at a rate of 5/48 of 1% of the 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% per month of the Net Assets allocated to each trading advisor 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 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 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% per month of the Net Assets allocated to each trading advisor on the first day of each month (a 4% annual rate). Incentive Fee - Spectrum Global Balanced, Spectrum Select and Spectrum Strategic pay a monthly incentive fee equal to 15% of the "Trading Profits" as defined in their Limited Partnership Agreements, 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. For all Partnerships when Trading Losses are incurred, no incentive fee will be paid in subsequent months until the individual trading advisor recover their losses. Cumulative trading losses are adjusted on a pro-rata basis for the net amount of each months subscriptions and redemptions. -----END PRIVACY-ENHANCED MESSAGE-----