-----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, HvlObrMCV5t9L07lACjsftoefIORkn4qaAdwC36uBkVfuyjqhh7v1fTzm5z/1Zyp N8XK/YHatLjdOrrnpIpT9Q== 0000873799-99-000016.txt : 19991231 0000873799-99-000016.hdr.sgml : 19991231 ACCESSION NUMBER: 0000873799-99-000016 CONFORMED SUBMISSION TYPE: 424B3 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19991230 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: 99783785 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 November 1999 Dear Limited Partner: The Net Asset Value per Unit for each of the four Morgan Stanley Dean Witter Spectrum Funds as of November 30, 1999 was as follows: Funds N.A.V. % change for month Spectrum Global Balanced $15.81 1.97% Spectrum Select $21.65 3.25% Spectrum Strategic $14.49 4.82% Spectrum Technical $14.36 1.88% During November, several of the markets that had trended during much of the third quarter of 1999 and subsequently experienced reversals and short-term price volatility from mid to late October, re-established their price trends and moved in a consistent manner. Markets such as the U.S. dollar, the Japanese yen and crude oil resumed previous price trends and thus proved profitable for Spectrum Technical and Spectrum Select. Historically, it has been similar price trends and the lack of choppy price movement that has helped the Funds' long-term technical trend-following money managers profit as they did during November. The re-emergence of the upward momentum in the U.S. dollar relative to the euro and Swiss franc, as well as the continued strength of the Japanese yen versus other major currencies, contributed positively to Spectrum Technical and Spectrum Select's performance during the month. Short positions in the euro and the Swiss franc were profitable as the value of these European currencies declined following an interest rate increase by the European Central Bank ("ECB"), the Swiss National Bank's decision not to follow the ECB's rate hike and questions regarding the European economy. Additional currency gains were recorded from long Japanese yen positions as the value of the yen strengthened to a 4-year high versus the U.S. dollar following the release of optimistic Japanese economic data. In the commodities markets, oil prices, prior to October, had climbed from below $12 a barrel in January to nearly $25 a barrel in September. Sudden price reversals and short-term volatility during October were followed by a resumed upward climb reaching a nine-year high above $27 a barrel during November. The increase in oil prices, which in turn was profitable for the Fund's long positions, was primarily attributed to reports of low supplies, increasing demand from Asia and heightening diplomatic tensions between Iraq and the United Nations. Additional gains were recorded in the commodities markets from long coffee futures positions as coffee prices soared higher as dry weather persisted in Brazil. The future direction of U.S. interest rates, and to a lesser extent European interest rates, came into importance during the month as the U.S. Federal Reserve, the European Central Bank and the Bank of England each raised their key interest rates. As a result, bond prices remained in a short-term volatile pattern, thus resulting in losses within the global interest rate futures markets. These losses were mitigated by profits from long positions in global stock index futures as equity prices pushed higher on beliefs that the interest rate increases would be the last for the near- term. In Spectrum Global Balanced, a balanced portfolio of stocks, bonds and managed futures, gains were recorded during November due primarily to gains recorded in the global stock index futures component of the balanced portfolio from long positions in European stock index futures as prices moved higher due to the strength of the U.S. equity market and in relief that the interest rate hikes by the European Central Bank and Bank of England were by the amounts expected. In the currency markets, gains were recorded from short crossrate positions, particularly the euro and Swiss franc versus the Japanese yen. The yen strengthened versus these currencies in anticipation of Japan's economic stimulus package and from increased optimism for Japan's economic recovery. In the energy markets, gains were recorded from short natural gas futures positions as prices declined amid periodic shots of cold air which were likely to cause only brief boosts in demand in the Northeast, coupled with reports that most of the central and western areas of the U.S. would be warmer than usual. In the agricultural markets, smaller gains were recorded from short wheat futures positions as wheat prices declined. A portion of these gains was offset by losses recorded in the fixed income component from long positions in U.S. interest rate futures as domestic bond prices declined as the dollar's deterioration against the Japanese yen triggered a sharp, broad sell-off. In Spectrum Strategic, a Fund managed by multiple trading advisors who employ fundamental trading methodologies, gains were recorded during November due primarily to profits recorded from long positions in crude oil futures as oil prices soared to nine-year highs. Oil prices increased after Iraq withdrew its exports from the international markets and from speculation over whether world producers would extend an output cutback. These gains were partially offset by losses recorded in this market sector from long natural gas futures positions as prices declined amid periodic shots of cold air which were likely to cause only brief boosts in demand in the Northeast, coupled with reports that most of the central and western areas of the U.S. would be warmer than usual. In the global stock index futures market, gains were recorded from long S&P 500 Index futures positions as U.S. equity prices moved higher after the Federal Reserve announced its decision to raise interest rates, leading investors to believe that the increase would be the last for the near-term. In the soft commodities markets, gains were recorded from long coffee futures positions as coffee prices increased as dry weather persisted in Brazil. A portion of the Fund's overall gains for the month was offset by losses incurred later in the month in the global interest rate futures markets from long positions in U.S. interest rate futures as domestic bond prices declined as the U.S. dollar's decline against the Japanese yen triggered a sharp, broad sell-off. In the metals markets, smaller losses were experienced later in the month from long positions in gold futures as gold prices fell on disappointment over a gold auction by the Bank of England. 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 (11 months) -1.2% Inception-to-Date Return: 58.1% Annualized Return: 9.4% ___________________________________________________________________________ __________ 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 (11 months) - 9.0% Inception-to-Date Return: 116.5% Annualized Return 9.7% ___________________________________________________________________________ __________ Spectrum Strategic 1994 (2 months) 0.1% 1995 10.5% 1996 -3.5% 1997 0.4% 1998 7.8% 1999 (11 months) 25.5% Inception-to-Date Return: 44.9% Annualized Return: 7.6% ___________________________________________________________________________ __________ Spectrum Technical 1994 (2 months) -2.2% 1995 17.6% 1996 18.3% 1997 7.5% 1998 10.2% 1999 (11 months) - 10.9% Inception-to-Date Return: 43.6% Annualized Return: 7.4%
Morgan Stanley Dean Witter Spectrum Series Statements of Operations For the Month Ended November 30, 1999 (Unaudited)
Morgan Stanley Dean Witter Morgan Stanley Dean Witter Spectrum Global Balanced Spectrum Select Percent of Percent of November 1, 1999 November 1, 1999 Beginning Beginning Amount Net Asset Value Amount Net Asset Value $ % $ % REVENUES Trading profit (loss): Realized (257,018) (0.47) (3,567,934) (1.75) Net change in unrealized 1,381,289 2.51 11,288,480 5.52 Total Trading Results 1,124,271 2.04 7,720,546 3.77 Interest Income (DWR) 227,300 0.41 666,802 0.33 Total Revenues 1,351,571 2.45 8,387,348 4.10 EXPENSES Brokerage fees (DWR) 211,107 0.38 1,234,448 0.60 Management fees 57,366 0.10 510,805 0.25 Total Expenses 268,473 0.48 1,745,253 0.85 NET INCOME 1,083,098 1.97 6,642,095 3.25 Morgan Stanley Dean Witter Spectrum Series Statements of Changes in Net Asset Value For the Month Ended November 30, 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, November 1, 1999 3,551,650.811 55,071,929 15.51 9,745,981.490 204,322,334 20.96 Net Income - 1,083,098 0.30 - 6,642,095 0.69 Redemptions (53,010.918) (838,103) 15.81 (143,603.829) (3,109,023) 21.65 Subscriptions 80,004.357 1,264,869 15.81 116,063.899 2,512,783 21.65 Net Asset Value, November 30, 1999 3,578,644.250 56,581,793 15.81 9,718,441.560 210,368,189 21.65 The accompanying notes are an integral part of these financial statements.
Morgan Stanley Dean Witter Spectrum Series Statements of Operations For the Month Ended November 30, 1999 (Unaudited)
Morgan Stanley Dean Witter Morgan Stanley Dean Witter Spectrum Strategic Spectrum Technical . Percent of Percent of November 1, 1999 November 1, 1999 Amount Net Asset Value Amount Net Asset Value $ % $ % REVENUES Trading profit (loss): Realized 5,999,915 6.49 (1,598,137) (0.63) Net change in unrealized (1,013,559) (1.10) 7,943,214 3.12 Total Trading Results 4,986,356 5.39 6,345,077 2.49 Interest Income (DWR) 321,239 0.35 829,074 0.33 Total Revenues 5,307,595 5.74 7,174,151 2.82 EXPENSES Brokerage fees (DWR) 558,292 0.60 1,535,915 0.61 Management fees 297,079 0.32 847,401 0.33 Total Expenses 855,371 0.92 2,383,316 0.94 NET INCOME 4,452,224 4.82 4,790,835 1.88 Morgan Stanley Dean Witter Spectrum Series Statements of Changes in Net Asset Value For the Month Ended November 30, 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, November 1, 1999 6,684,495.152 92,406,978 13.82 18,031,584.843 254,220,410 14.10 Net Income - 4,452,224 0.67 - 4,790,835 0.26 Redemptions (47,984.753) (695,299) 14.49 (319,936.470) (4,594,288) 14.36 Subscriptions 102,925.027 1,491,384 14.49 257,943.161 3,704,064 14.36 Net Asset Value, November 30, 1999 6,739,435.426 97,655,287 14.49 17,969,591.534 258,121,021 14.36 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 Limited Partnership interest ("Unit(s)") 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 are 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 are 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 are not subject to a redemption charge. The foregoing redemptions charges are 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 adjusted the allocation of Net Assets among the trading advisors within Spectrum Strategic effective June 30, 1999. Net proceeds received by Spectrum Strategic at each monthly closing are now allocated 75% to AICM, 0% to Blenheim, and 25% to Willowbridge Additionally, 100% of redemptions are allocated to Blenheim. Morgan Stanley Dean Witter Spectrum Series Notes to Financial Statements (Concluded) 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 fees are 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-----