<PAGE>
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
Two World Trade Center
New York, New York 10048
DEAR SHAREHOLDER:
- - --------------------------------------------------------------------------------
On July 31, 1994, Dean Witter U.S. Government Money Market Trust had assets
in excess of $768 million with an average maturity of 49 days. For the six-month
period ended July 31, 1994, the Trust's annualized yield was 2.64 percent.
A TREND TOWARD RISING INTEREST RATES
While the second half of 1993 was best characterized by stability of money
market yields, the first few months of 1994 marked the end of the Federal
Reserve Board's five year accommodative monetary policy. In February, the
central bank began a series of steps to lift the target level for federal funds
trading (overnight loans among commercial banks) from 3.00 percent in early
February to 4.75 percent by mid-August and its discount rate from 3.00 percent
to 4.00 percent. The Federal Reserve Board's current policy is to stay ahead of
possible inflationary pressure as the overall pace of economic activity
continues to improve.
We believe the Trust's portfolio is well positioned to take advantage of
the upward trend in interest rates. On July 31, 1994, the Trust's portfolio was
invested in Federal agency obligations (94 percent), repurchase agreements (3
percent) and U.S. Treasury securities (3 percent), with approximately 90 percent
of the portfolio's assets maturing in less than 3 months. This strategy provides
the Trust with a high degree of liquidity.
LOOKING AHEAD
Most economic and monetary indicators currently reflect a higher than
expected pace of economic activity. For the past five months, the average
increase of 300,000 new jobs per month, coupled with some increases in average
hourly wages, reflects a strengthening economic environment. Therefore, the
Federal Reserve Board's strategy of "leaning against the wind" by raising short-
term interest rates is not finished. While the economy's immediate growth trends
at this stage of the economic cycle may be somewhat insensitive to the level of
short-term interest rates, the cumulative impact of the central bank's actions
will eventually have a slowing influence. As always, the Trust will continue to
emphasize preservation of capital and liquidity in all investment decisions.
We appreciate your ongoing support of Dean Witter U.S. Government Money
Market Trust and look forward to continuing to serve your investment needs and
objectives.
Very truly yours
/S/ C. Fiumefreddo
Charles A. Fiumefreddo
Chairman of the Board
<PAGE>
<TABLE>
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
PORTFOLIO OF INVESTMENTS July 31, 1994 (unaudited)
- - --------------------------------------------------------------------------------
<CAPTION>
Annualized
Principal Yield
Amount (in Description and on Date of
thousands) Maturity Dates Purchase Value
-------- ---------------- ----------- ------
<C> <S> <C> <C>
U.S. GOVERNMENT OBLIGATION (2.6%)
$ 20,000 U.S. Treasury Bills (Amortized Cost
$19,991,125) 8/4/94 3.25% $ 19,991,125
------------
U.S. GOVERNMENT AGENCIES (94.8%)
40,000 Federal Farm Credit Bank
8/8/94 to 10/7/94 .............. 4.28 to 4.57 39,853,797
294,025 Federal Home Loan Banks
8/8/94 to 11/17/94 ............. 3.35 to 4.78 292,155,789
60,500 Federal Home Loan Mortgage Corp.
9/1/94 to 10/25/94 ............. 4.35 to 4.76 59,928,625
208,850 Federal National Mortgage
Association 8/2/94 to 12/16/94.. 3.47 to 4.81 207,314,127
57,510 Student Loan Marketing
Association 9/2/94 to 9/21/94.. 4.38 to 4.52 57,219,820
72,000 Tennessee Valley Authority
8/8/94 to 9/15/94 .............. 4.35 to 4.37 71,796,516
------------
TOTAL U.S. GOVERNMENT AGENCIES
(Amortized Cost $728,268,674).................. 728,268,674
------------
REPURCHASE AGREEMENTS (3.4%)
25,000 First National Bank of Chicago
8/1/94 .......................... 4.20 25,000,000
(dated 7/29/94; proceeds
$25,008,750; collateralized by
$24,570,000 United States Treasury
Notes 7.25% due 11/15/96 valued
at $25,508,574)
1,387 The Bank of New York
8/1/94 .......................... 4.13 1,387,411
(dated 7/29/94; proceeds -----------
$1,387,888; collateralized
by $1,429,278 Federal National
Mortgage Association 5.85%
due 2/2/98 valued
at $1,415,190)
TOTAL REPURCHASE AGREEMENTS
(Amortized Cost $26,387,411) ................... 26,387,411
------------
TOTAL INVESTMENTS (Amortized Cost
$774,647,210) (a) ............................. 100.8% 774,647,210
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS ..... (0.8) (6,054,548)
------- ------------
NET ASSETS ......................................... 100.0% $768,592,662
======= ============
<FN>
- - -----------
(a) Cost is the same for federal income tax purposes.
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
FINANCIAL STATEMENTS
- - --------------------------------------------------------------------------------
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
July 31, 1994 (unaudited)
- - --------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments in securities, at value
(amortized cost $774,647,210)
(Note 1) ............................................... $774,647,210
Cash ...................................................... 90,029
Receivable for:
Interest ............................................... 3,076
Shares of beneficial interest sold ..................... 86,855
Prepaid expenses .......................................... 84,638
------------
Total Assets ...................................... 774,911,808
------------
LIABILITIES:
Payable for:
Shares of beneficial interest repurchased ................ 5,426,172
Investment management fee (Note 2) ....................... 290,813
Plan of distribution fee (Note 3) ........................ 61,661
Accrued expenses (Note 4) ................................... 540,500
------------
Total Liabilities ................................... 6,319,146
------------
NET ASSETS:
Paid-in-capital ............................................. 768,591,194
Accumulated undistributed net investment
income ................................................... 1,468
------------
Net Assets .......................................... $768,592,662
============
Net Asset Value Per Share,
768,591,194 shares outstanding (unlimited
shares authorized of $.01 par value) .................... $1.00
=====
</TABLE>
<TABLE>
- - --------------------------------------------------------------------------------
<CAPTION>
STATEMENT OF OPERATIONS
For the six months ended July 31, 1994 (unaudited)
- - --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Interest Income ........................................... $14,700,365
------------
Expenses
Transfer agent fees and expenses
(Note 4) ............................................ 1,931,361
Investment management fee (Note 2) ...................... 1,844,713
Plan of distribution fee (Note 3) ....................... 352,081
Shareholder reports and notices ......................... 46,804
Registration fees ....................................... 39,416
Custodian fees .......................................... 31,202
Professional fees ....................................... 26,181
Trustees' fees and expenses (Note 4) .................... 15,382
Other ................................................... 8,849
------------
Total Expenses ....................................... 4,295,989
------------
Net Investment Income and
Net Increase in Net Assets
Resulting from Operations ................... $10,404,376
============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
- - ----------------------------------------------------------------------------
For the
six months ended For the
July 31, 1994 year ended
(unaudited) January 31, 1994
--------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income and
net increase in net
assets resulting from
operations ................ $ 10,404,376 $ 20,897,804
Dividends to shareholders
from net investment income .. (10,403,822) (20,898,355)
Net decrease from transactions
in shares of beneficial
interest (Note 5) ............... (49,010,807) (209,282,117)
------------- -------------
Total decrease ................. (49,010,253) (209,282,668)
------------- -------------
NET ASSETS:
Beginning of period ............... 817,602,915 1,026,885,583
------------- -------------
End of period (including
undistributed net investment
income of $1,468 and $914,
respectively) ................ $768,592,662 $817,602,915
============= =============
</TABLE>
See Notes to Financial Statements
<PAGE>
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
NOTES TO FINANCIAL STATEMENTS (unaudited)
- - --------------------------------------------------------------------------------
1. ORGANIZATION AND ACCOUNTING POLICIES--Dean Witter U.S. Government Money
Market Trust (the "Trust") is registered under the Investment Company Act of
1940, as amended (the "Act"), as a diversified, open-end management investment
company. The Trust was organized as a Massachusetts business trust on November
18, 1981 and commenced operations on February 17, 1982.
The following is a summary of significant accounting policies:
A. Valuation of Investments--Portfolio securities are valued at amortized
cost, which approximates market value.
B. Accounting for Investments--Security transactions are accounted for on
the trade date (date the order to buy or sell is executed). Realized gains
and losses on security transactions are determined on the identified cost
method. In determining net investment income, the Trust amortizes premiums
and accrues discounts and interest income daily.
C. Repurchase Agreements--The Trust's custodian takes possession on behalf
of the Trust of the collateral pledged for investments in repurchase
agreements. It is the policy of the Trust to value the underlying
collateral daily on a mark-to-market basis to determine that the value,
including accrued interest, is at least equal to the repurchase price plus
accrued interest. In the event of default of the obligation to repurchase,
the Trust has the right to liquidate the collateral and apply the proceeds
in satisfaction of the obligation.
D. Federal Income Tax Status--It is the Trust's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income to its
shareholders. Accordingly, no federal income tax provision is required.
E. Dividends and Distributions to Shareholders--The Trust records dividends
and distributions as of the close of each business day.
2. INVESTMENT MANAGEMENT AGREEMENT--Pursuant to an Investment Management
Agreement with Dean Witter InterCapital Inc., (the "Investment Manager"), the
Trust pays its Investment Manager a monthly management fee calculated and
accrued daily, by applying the following annual rates to the net assets of the
Trust determined as of the close of each business day: 0.50% of the portion of
the daily net assets not exceeding $500 million; 0.425% of the portion of the
daily net assets exceeding $500 million but not exceeding $750 million; 0.375%
of the portion of the daily net assets exceeding $750 million but not exceeding
$1 billion; 0.35% of the portion of the daily net assets exceeding $1 billion
but not exceeding $1.5 billion; 0.325% of the portion of the daily net assets
exceeding $1.5 billion but not exceeding $2 billion; 0.30% of the portion of the
daily net assets exceeding $2 billion but not exceeding $2.5 billion; 0.275% of
the portion of the daily net assets exceeding $2.5 billion but not exceeding $3
billion; and 0.25% of the portion of the daily net assets exceeding $3 billion.
Under the terms of the Agreement, the Investment Manager maintains certain
of the Trust's books and records and furnishes, at its own expense, office
space, facilities, equipment, clerical, bookkeeping, and certain legal services,
and pays the salaries of all personnel, including officers of the Trust who are
employees of the Investment Manager. The Investment Manager also bears the cost
of telephone services, heat, light, power and other utilities provided to the
Trust.
3. PLAN OF DISTRIBUTION--Dean Witter Distributors Inc. (the "Distributor"), an
affiliate of the Investment Manager, is the distributor of the Trust's shares
and, in accordance with a Plan of Distribution (the "Plan") pursuant to Rule
12b-1 under the Act, finances certain expenses in connection therewith.
Under the Plan, the Distributor bears the expense of all promotional and
distribution related activities on behalf of the Trust, except for expenses that
the Trustees determine to reimburse, as described below. The following
activities and services may be provided by the Distributor, Dean Witter Reynolds
Inc. ("DWR"), an affiliate of the Distributor, its affiliates and other dealers
who have entered into selected dealer agreements with the Distributor and
Investment Manager under the Plan: (1) compensation to and expenses of DWR's and
other selected broker-dealers' account executives and other employees, including
overhead and telephone expenses; (2) sales incentives and bonuses to sales
representatives and to marketing personnel in connection with promoting sales of
the Trust's shares; (3) expenses incurred in connection with promoting sales of
the Trust's shares; (4) preparing and distributing sales literature; and (5)
providing advertising and promotional activities, including direct mail
solicitation and television, radio, newspaper, magazine and other media
advertisements.
The Trust is authorized to reimburse the Distributor for specific expenses
the Distributor incurs or plans to incur in promoting the distribution of the
Trust's shares. The amount of each monthly reimbursement payment may in no event
exceed an amount equal to a payment at the annual rate of 0.15% of the Trust's
average daily net assets. For the six months ended July 31, 1994, the
distribution fee was accrued at the annual rate of 0.09%.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES_The cost of purchases
and proceeds from sales/maturities of portfolio securities for the six months
ended July 31, 1994 aggregated $5,520,783,217 and $5,587,340,619, respectively.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Trust's transfer agent. At July 31, 1994, the Trust had
transfer agent fees and expenses payable of approximately $426,500.
On April 1, 1991, the Trust established an unfunded noncontributory defined
benefit pension plan covering all Trustees of the Trust who will have served as
an independent Trustee for at least five years at the time of retirement.
Benefits under this plan are based on years of service and compensation during
the last five years of service. Aggregate pension costs for the six months ended
July 31, 1994, included in Trustees' fees and expenses in the Statement of
Operations amounted to $4,048. At July 31, 1994, the Trust had an accrued
pension liability of $44,028 which is included in accrued expenses in the
Statement of Assets and Liabilities.
5. SHARES OF BENEFICIAL INTEREST--Transactions in shares of beneficial
interest, at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
For the six For the
months ended year ended
July 31, 1994 January 31, 1994
-------------- -----------------
<S> <C> <C>
Shares sold ........................ 872,992,101 1,929,597,479
Shares issued in reinvestment
of dividends .................... 10,357,874 20,842,399
------------ --------------
883,349,975 1,950,439,878
Shares repurchased ................. (932,360,782) (2,159,721,995)
------------- ---------------
Net decrease in shares
outstanding .................... (49,010,807) (209,282,117)
============ =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
FINANCIAL HIGHLIGHTS
- - --------------------------------------------------------------------------------
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
For the six
months ended For the year ended January 31,
July 31, 1994 ------------------------------
(unaudited) 1994 1993 1992 1991 1990
----------- ----- ----- ----- ----- ----
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net asset value,
beginning of period ... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------ ------ ------ ---- ---- -----
Net investment income .. 0.013 0.023 0.029 0.050 0.070 0.082
Less dividends from
net investment income .. (0.013) (0.023) (0.029) (0.050) (0.070) (0.082)
------ ------ ------ ------ ------ -----
Net asset value,
end of period ....... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== =====
Total Investment
Return ................ 1.51%(1) 2.28% 2.89% 5.14% 7.20% 8.59%
Ratios/Supplemental Data:
Net assets, end of
period (in millions)... $769 $818 $1,027 $1,115 $1,217 $873
Ratio of expenses to
average net assets ... 1.09%(2) 1.00% 0.93% 0.89% 0.99% 0.83%
Ratio of net investment
income to average
net assets ........ 2.64%(2) 2.23% 2.87% 5.02% 6.97% 8.19%
<FN>
- - -----------
(1) Not annualized
(2) Annualized
</TABLE>
See Notes to Financial Statements
<PAGE>
(This page has been left blank intentionally.)
<PAGE>
TRUSTEES
- - -------------------------------------
Jack F. Bennett
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. John E. Jeuck
Dr. Manuel H. Johnson
Paul Kolton
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
Edward R. Telling
OFFICERS
- - -------------------------------------
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Sheldon Curtis
Vice President, Secretary and General Counsel
Jonathan R. Page
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
- - -------------------------------------
Dean Witter Trust Company
Harborside Financial Center--Plaza Two
Jersey City, New Jersey 07311
LEGAL COUNSEL
- - -------------------------------------
Sheldon Curtis
Two World Trade Center
New York, New York 10048
INDEPENDENT ACCOUNTANTS
- - -------------------------------------
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
- - -------------------------------------
Dean Witter InterCapital Inc.
Two World Trade Center
New York, New York 10048
The financial statements included herein have been taken from the
records of the Trust without examination by the independent accountants
and accordingly they do not express an opinion thereon.
This report is submitted for the general information of shareholders of
the Trust. For more detailed informatin about the Trust, its officers and
trustees, fees, expenses and other pertinent information, please see the
prospecuts of the Trust.
This report is not authorized for distribution to prospective investors
in the Trust unless preceded or accompanied by an effective prospectus.
DEAN WITTER
U.S. GOVERNMENT
MONEY MARKET
TRUST
Semiannual Report
July 31, 1994
