<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST Two World Trade Center, New
LETTER TO THE SHAREHOLDERS March 31, 1998 York, New York 10048
DEAR SHAREHOLDER:
The past six months have been volatile for Dean Witter Developing Growth
Securities and for small-cap stocks in general. At the beginning of this
period the most significant issue was the economic difficulties in Asia.
Uncertainty over the short-term viability of those economies had investors
running to the relative safety of domestic blue-chip stocks. This "flight to
safety" negatively affected technology stocks as well as those of companies
that had business in Asia. While the Fund had already been actively reducing
its exposure to technology, the Asian flu spread swiftly and had an adverse
impact on the Fund.
Fortunately, the economic environment improved as we entered 1998. Small caps
in particular saw improved returns, fueled by the realization in the market
that solid small-cap growth companies could be acquired at attractive
valuations. The lack of liquidity in this sector worked in the Fund's favor
during this time because prices were driven higher by strong demand to own
many of these high-quality small-cap issues. In addition, consumer spending,
especially for home-related products, was strong in the first quarter of
1998, which drove a number of the Fund's holdings higher.
PERFORMANCE
For the six months ended March 31, 1998, the Fund's Class B shares posted a
total return of 4.79 percent versus 17.21 percent, 4.22 percent and 6.37
percent, respectively, for the Standard & Poor's 500 Composite Stock Index
(S&P 500), the Lipper Small Cap Funds Index and the Russell 2000 Index. For
the same period, the Fund's Class A, C and D shares had total returns of 5.16
percent, 4.79 percent and 5.28 percent, respectively. The performance of the
Fund's four share classes varies because of differing charges and expenses.
The Fund trailed the Russell 2000 Index because of that index's heavy
weighting in financial stocks, which performed particularly well during the
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
LETTER TO THE SHAREHOLDERS March 31, 1998, continued
last quarter of 1997. However, the Fund did significantly outperform the
Russell 2000 Growth Index (a sub-index of the Russell 2000 that measures the
performance of the index's growth securities); this index returned 2.71
percent for the six months ended March 31, 1998. Consumer discretionary
stocks, the fourth-strongest-performing sector within the Russell 2000 Growth
Index, was the highest contributing sector on a weighted basis within Dean
Witter Developing Growth Securities. The Fund's weighting in consumer
discretionary issues was 32.5 percent, significantly higher than that for the
Russell 2000 Growth Index.
On March 31, 1998, the Fund had about $882 million in net assets. Ninety
percent of the Fund's holdings had market caps of less than 1.5 billion
dollars, with a weighted market cap of less than $1 billion.
PORTFOLIO STRATEGY
Companies selected for the Fund's portfolio must have a sound business model
and have the potential to grow earnings by at least 20 percent annually. The
Fund will continue to invest heavily in initial public offerings (nearly
two-thirds of the Fund's holdings are companies that have come to the market
within the last five years). The Fund focuses on companies with favorable
risk/reward ratios (which can be in the form of better-than-expected earnings
or currently undervalued growth stocks), strong management teams, unique
products or services, and the existence of insider buying.
LOOKING AHEAD
There are a number of concerns looming on the immediate horizon: the Asian
financial crisis, the Year 2000 computer problem, high investor expectations
and higher-than-average P/E multiples in the market. However, we believe
there is room for opportunity, especially in the small-cap segment of the
market. Many analysts estimate that small-cap earnings will be quite strong
this year, coming in at more than 20 percent versus 8 percent for the S&P
500. Relative multiples on small-cap growth stocks versus the overall market
are back to early 1997 levels and are nearly at 20-year relative lows. Dean
Witter Developing Growth Securities closed this reporting period with P/Es
for 1997 and 1998 of 23 and 17, respectively, some of the Fund's lowest
relative multiples on record.
2
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
LETTER TO THE SHAREHOLDERS March 31, 1998, continued
We appreciate your support of Dean Witter Developing Growth Securities and
look forward to continuing to serve your investment needs and objectives.
Very truly yours,
/s/ Charles A. Fiumefreddo
CHARLES A. FIUMEFREDDO
Chairman of the Board
3
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
PORTFOLIO OF INVESTMENTS March 31, 1998 (unaudited)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (96.3%)
Advertising (2.8%)
90,000 Abacus Direct Corp.* ............................................ $ 4,590,000
146,100 CKS Group, Inc.* ................................................ 2,730,244
128,900 HA-LO Industries, Inc.* ......................................... 4,503,444
250,000 Outdoor Systems, Inc.* .......................................... 8,765,625
100,000 Valassis Communications, Inc.* .................................. 4,100,000
--------------
24,689,313
--------------
Aerospace (1.8%)
100,000 AirNet Systems, Inc.* ........................................... 2,900,000
130,000 Aviation Sales Co.* ............................................. 5,330,000
130,000 Howmet International, Inc.* ..................................... 2,323,750
120,600 Triumph Group, Inc.* ............................................ 5,351,625
--------------
15,905,375
--------------
Airlines (1.4%)
300,000 Linea Aerea Nacional Chile S.A. (ADR)(Chile)* ................... 4,125,000
85,000 Midway Airlines, Corp.* ......................................... 1,593,750
140,000 Midwest Express Holdings, Inc.* ................................. 6,860,000
--------------
12,578,750
--------------
Auto Parts - Equipment (1.0%)
120,000 Citation Corp.* ................................................. 2,670,000
200,000 Delco Remy International, Inc.* ................................. 3,037,500
75,000 Tower Automotive, Inc.* ......................................... 3,375,000
--------------
9,082,500
--------------
Biotechnology (2.9%)
194,000 BioChem Pharma, Inc. (Canada)* .................................. 4,680,250
114,000 Gilead Sciences, Inc.* .......................................... 4,096,875
100,000 IDEC Pharmaceuticals Corp.* ..................................... 4,425,000
250,000 Medco Research, Inc.* ........................................... 4,218,750
55,000 PathoGenesis Corp.* ............................................. 1,835,625
150,000 Pharmacopeia, Inc.* ............................................. 2,793,750
115,000 Vertex Pharmaceuticals, Inc.* ................................... 3,651,250
--------------
25,701,500
--------------
Broadcast Media (0.9%)
135,000 Jacor Communications, Inc.* ..................................... 7,973,437
--------------
Business Services (6.0%)
183,000 Concord EFS, Inc.* .............................................. 6,313,500
93,000 Dendrite International, Inc.* ................................... 2,650,500
122,100 Hagler Bailly, Inc.* ............................................ 3,052,500
254,000 LCC International, Inc. (Class A)* .............................. 5,016,500
397,000 Medaphis Corp.* ................................................. 4,143,687
140,000 Metzler Group, Inc.* ............................................ 6,956,250
100,000 National Data Corp. ............................................ $ 4,156,250
215,000 Pegasus Systems, Inc.* .......................................... 5,522,812
170,000 Saville Systems Ireland PLC (ADR)(Ireland)* ..................... 8,585,000
175,000 The Bisys Group, Inc.* .......................................... 6,135,937
--------------
52,532,936
--------------
Commercial Services (4.3%)
150,000 CCC Information Services Group, Inc.* ........................... 4,068,750
165,000 Checkfree Holdings Corp.* ....................................... 3,630,000
112,000 Coinmach Laundry Corp.* ......................................... 2,380,000
190,000 Iron Mountain, Inc.* ............................................ 7,053,750
196,000 Lason, Inc.* .................................................... 7,252,000
228,600 LECG, Inc.* ..................................................... 2,800,350
65,000 Pittway Corp. (Class A) ......................................... 4,680,000
178,000 Quanta Services, Inc.* .......................................... 2,948,125
300,000 Vestcom International, Inc.* .................................... 3,112,500
--------------
37,925,475
--------------
Computer Services (3.2%)
100,000 DST Systems, Inc.* .............................................. 5,256,250
116,000 Information Management Resources, Inc.* ......................... 6,800,500
86,000 Keane, Inc.* .................................................... 4,859,000
70,500 New Era of Networks, Inc.* ...................................... 1,700,812
165,000 PRT Group Inc.* ................................................. 1,608,750
190,000 Safeguard Scientifics, Inc.* .................................... 7,148,750
38,900 USWeb Corp.* .................................................... 858,231
--------------
28,232,293
--------------
Computer Software (5.5%)
40,000 Arbor Software Corp.* ........................................... 1,835,000
240,000 AXENT Technologies, Inc.* ....................................... 7,290,000
256,000 BEA Systems, Inc.* .............................................. 7,200,000
77,000 Credit Management Solutions, Inc.* .............................. 625,625
100,000 Dr Solomon's Group PLC (ADR)(United Kingdom)* ................... 3,137,500
190,000 Learning Company, Inc.* ......................................... 4,393,750
200,000 Quickturn Design System, Inc.* .................................. 2,037,500
80,900 RealNetworks, Inc.* ............................................. 2,325,875
132,300 Security Dynamics Technologies, Inc.* ........................... 5,424,300
180,000 Symantec Corp.* ................................................. 4,848,750
75,000 Veritas Software Corp.* ......................................... 4,425,000
120,000 Visio Corp* ..................................................... 5,115,000
--------------
48,658,300
--------------
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
PORTFOLIO OF INVESTMENTS March 31, 1998 (unaudited) continued
NUMBER OF
SHARES VALUE
- --------------------------------------------------------------------------------------------
Computer Software & Services (4.4%)
155,000 American Management Systems, Inc.* .............................. $ 4,243,125
200,000 Business Objects S.A. (ADR)(France)* ............................ 3,000,000
189,000 CACI International Inc. (Class A)* .............................. 4,122,562
94,000 Computer Management Sciences, Inc.* ............................. 2,555,625
63,000 Deltek Systems, Inc.* ........................................... 1,118,250
23,000 Digital Lightwave, Inc.* ........................................ 140,156
50,000 Intuit, Inc.* ................................................... 2,418,750
100,000 IONA Technologies PLC (ADR)(Ireland)* ........................... 3,162,500
100,000 J.D. Edwards & Co.* ............................................. 3,262,500
400,000 MAPICS, Inc.* ................................................... 7,050,000
82,000 Simulation Sciences, Inc.* ...................................... 799,500
200,000 Software AG Systems, Inc.* ...................................... 5,300,000
100,000 Summit Design, Inc.* ............................................ 1,475,000
--------------
38,647,968
--------------
Computers (0.5%)
80,000 Extended Systems Inc.* .......................................... 660,000
160,000 National Computer Systems, Inc. ................................. 3,580,000
--------------
4,240,000
--------------
Distributors - Consumer Products (0.4%)
JLK Direct Distribution Inc.
88,100 (Class A)* ...................................................... 3,364,319
--------------
Drugs (1.7%)
133,500 Alpharma Inc. (Class A) ......................................... 2,895,281
111,000 Medicis Pharmaceutical Corp. (Class A)* ......................... 4,842,375
184,000 Twinlab Corp.* .................................................. 7,440,500
--------------
15,178,156
--------------
Education (0.5%)
140,000 Education Management Corp.* ..................................... 4,707,500
--------------
Electrical Equipment (2.3%)
130,000 AFC Cable Systems, Inc.* ........................................ 5,053,750
55,000 Aspen Technology, Inc.* ......................................... 2,248,125
116,000 DII Group, Inc.* ................................................ 2,494,000
288,500 EFTC Corp.* ..................................................... 3,678,375
305,000 Hypercom Corp.* ................................................. 4,060,312
142,100 Identix Inc.* ................................................... 1,207,850
75,000 Telxon Corp. ................................................... 1,978,125
--------------
20,720,537
--------------
Entertainment (1.9%)
60,000 Cinar Films, Inc. (Class B)(Canada)* ............................ $ 2,550,000
100,000 Discreet Logic, Inc. (Canada)* .................................. 1,631,250
138,500 Gemstar International Group Ltd.* ............................... 4,137,687
150,000 Pinnacle Systems, Inc.* ......................................... 5,643,750
125,000 T-HQ, Inc.* ..................................................... 2,914,062
--------------
16,876,749
--------------
Environmental (2.1%)
220,000 Allied Waste Industries, Inc.* .................................. 5,486,250
325,000 ITEQ, Inc.* ..................................................... 4,570,312
185,000 Newpark Resources, Inc.* ........................................ 3,376,250
190,000 TETRA Technologies, Inc.* ....................................... 4,702,500
--------------
18,135,312
--------------
Finance & Brokerage (1.6%)
86,733 Legg Mason, Inc. ............................................... 5,144,351
150,600 McDonald & Co. Investments, Inc ................................. 4,499,175
215,250 Morgan Keegan, Inc. ............................................. 4,695,141
--------------
14,338,667
--------------
Financial (2.3%)
50,000 Alrenco, Inc.* .................................................. 996,875
49,000 Federal Agricultural Mortgage Corp. (Class C)* .................. 2,744,000
100,000 Finova Group Inc. ............................................... 5,887,500
146,200 Headlands Mortgage Co.* ......................................... 2,457,987
105,000 HealthCare Financial Partners, Inc.* ............................ 4,974,375
200,000 Southern Pacific Funding Corp.* ................................. 3,075,000
--------------
20,135,737
--------------
Food Distribution (1.7%)
278,000 Hain Food Group, Inc.* .......................................... 5,125,625
70,000 International Home Foods, Inc.* ................................. 2,327,500
170,000 Ralcorp Holdings, Inc.* ......................................... 3,527,500
243,000 Owens & Minor, Inc. Holding Co. ................................. 4,389,188
--------------
15,369,813
--------------
Food Processing (0.6%)
143,000 Smithfield Foods, Inc.* ......................................... 4,915,625
--------------
Food Wholesalers (0.3%)
69,250 Earthgrains Co. ................................................ 3,059,984
--------------
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
PORTFOLIO OF INVESTMENTS March 31, 1998 (unaudited) continued
NUMBER OF
SHARES VALUE
- --------------------------------------------------------------------------------------------
Health Services (3.6%)
98,000 Advance Paradigm, Inc.* ......................................... $ 3,883,250
117,000 Assisted Living Concepts, Inc.* ................................. 2,530,125
200,000 Atria Communities, Inc.* ........................................ 3,825,000
260,000 HealthPlan Services Corp. ...................................... 6,841,250
267,000 MedPartners, Inc.* .............................................. 2,736,750
300,000 NovaCare, Inc.* ................................................. 4,462,500
126,666 Total Renal Care Holdings, Inc.* ................................ 4,219,561
118,000 Trigon Healthcare, Inc.* ........................................ 3,547,375
--------------
32,045,811
--------------
Home Building (0.4%)
120,000 Crossmann Communities, Inc.* .................................... 3,555,000
--------------
Hotels/Motels (0.0%)
16,000 U.S. Franchise Systems, Inc. (Class A)* ......................... 194,000
--------------
Insurance (2.7%)
103,000 CMAC Investment Corp. ........................................... 6,875,250
100,000 Delphi Financial Group, Inc. (Class A)* ......................... 5,325,000
119,000 ESG Re Ltd. .................................................... 3,064,250
55,000 Executive Risk, Inc. ........................................... 3,918,750
81,000 Fremont General Corp. .......................................... 4,763,812
--------------
23,947,062
--------------
Leisure Time (1.7%)
142,500 Powerhouse Technologies, Inc.* .................................. 2,030,625
210,000 Royal Olympic Cruise Lines, Inc.* ............................... 3,517,500
140,000 Signature Resorts, Inc.* ........................................ 2,765,000
139,000 Steiner Leisure Ltd.* ........................................... 7,054,250
--------------
15,367,375
--------------
Manufacturing - Diversified (0.8%)
120,000 Buckeye Technologies, Inc.* ..................................... 2,550,000
170,000 Triarc Co., Inc.* ............................................... 4,462,500
--------------
7,012,500
--------------
Medical Products & Supplies (4.5%)
100,000 Alkermes, Inc.* ................................................. 2,468,750
130,227 ArQule, Inc.* ................................................... 2,897,551
73,100 Cryolife, Inc.* ................................................. 1,242,700
193,000 Cytyc Corp.* .................................................... 4,728,500
130,000 IDX Systems Corp.* .............................................. 5,590,000
173,000 Millennium Pharmaceuticals, Inc.* ............................... 3,222,125
246,300 Orthofix International N.V.* .................................... 3,201,900
50,000 Safeskin Corp.* ................................................. 3,687,500
80,000 Schick Technologies, Inc.* ...................................... $ 2,005,000
190,000 Steris Corp.* ................................................... 10,212,500
54,700 Young Innovations, Inc.* ........................................ 834,175
--------------
40,090,701
--------------
Medical Services (1.0%)
33,500 Lincare Holdings, Inc.* ......................................... 2,353,375
80,000 Osteotech, Inc.* ................................................ 2,040,000
375,000 Vision Twenty-One, Inc.* ........................................ 4,359,375
--------------
8,752,750
--------------
Medical Supplies (1.2%)
175,250 Cyberonics, Inc.* ............................................... 5,564,188
125,000 Schein (Henry), Inc.* ........................................... 5,179,688
--------------
10,743,876
--------------
Office Equipment & Supplies (2.0%)
100,000 Consolidated Graphics, Inc.* .................................... 5,787,500
235,000 Mail-Well, Inc.* ................................................ 8,900,625
138,000 Viking Office Products, Inc.* ................................... 3,191,250
--------------
17,879,375
--------------
Oil & Gas (0.5%)
63,900 Energen Corp. .................................................. 1,405,800
120,000 Stolt Comex Seaway, S.A. (United Kingdom)* ...................... 3,030,000
--------------
4,435,800
--------------
Oil & Gas Drilling (0.9%)
100,000 Cliffs Drilling Co.* ............................................ 4,131,250
130,000 Rowan Companies, Inc.* .......................................... 3,770,000
--------------
7,901,250
--------------
Oil Equipment & Services (1.4%)
93,400 Dril-Quip, Inc. ................................................ 3,035,500
100,000 Key Energy Group, Inc.* ......................................... 1,631,250
100,000 Tuboscope Inc.* ................................................. 1,900,000
110,000 Veritas DGC Inc.* ............................................... 5,561,875
--------------
12,128,625
--------------
Publishing (1.2%)
150,000 CMP Media Inc. (Class A)* ....................................... 3,768,750
Petersen Companies, Inc.
121,000 (Class A)* ...................................................... 3,025,000
80,000 Primark Corp.* .................................................. 3,420,000
--------------
10,213,750
--------------
Real Estate Investment Trust (1.0%)
158,500 Golf Trust of America, Inc. .................................... 4,972,938
90,000 OMEGA Healthcare Investors, Inc ................................. 3,510,000
--------------
8,482,938
--------------
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
PORTFOLIO OF INVESTMENTS March 31, 1998 (unaudited) continued
NUMBER OF
SHARES VALUE
- --------------------------------------------------------------------------------------------
Recreation (0.4%)
200,000 American Skiing Co.* ............................................ $ 3,350,000
--------------
Restaurants (0.3%)
144,000 Friendly Ice Cream Corp.* ....................................... 2,844,000
--------------
Retail (1.1%)
208,500 Elder-Beerman Stores Corp.* ..................................... 4,613,063
190,000 Fred's, Inc. ................................................... 4,655,000
--------------
9,268,063
--------------
Retail - General Merchandise (0.3%)
90,000 Cost Plus, Inc.* ................................................ 2,857,500
--------------
Retail - Specialty (5.2%)
110,000 1-800 CONTACTS, Inc.* ........................................... 2,200,000
187,000 Barnes & Noble, Inc.* ........................................... 7,293,000
138,000 Fossil, Inc.* ................................................... 4,450,500
225,225 Garden Ridge Corp.* ............................................. 4,842,338
56,100 Goody's Family Clothing, Inc.* .................................. 2,482,425
130,000 Guitar Center, Inc.* ............................................ 3,055,000
70,000 Linens 'N Things, Inc.* ......................................... 3,845,625
300,000 PetSmart, Inc.* ................................................. 3,206,250
129,000 Quiksilver, Inc.* ............................................... 4,611,750
400,000 Sunglass Hut International, Inc.* ............................... 4,175,000
92,600 Wet Seal, Inc. (Class A)* ....................................... 3,507,225
80,000 White Cap Industries, Inc.* ..................................... 1,800,000
--------------
45,469,113
--------------
Semiconductor Capital Equipment (0.6%)
210,000 Brooks Automation, Inc.* ........................................ 3,255,000
100,000 Helix Technology Corp. .......................................... 1,962,500
--------------
5,217,500
--------------
Semiconductor Equipment (0.4%)
118,000 LAM Research Corp.* ............................................. 3,311,375
--------------
Semiconductors (1.9%)
178,500 Aeroflex Inc.* .................................................. 2,365,125
160,000 Galileo Technology Ltd. (Israel)* ............................... 4,400,000
180,000 Level One Communications, Inc.* ................................. 4,207,500
100,000 RF Micro Devices, Inc.* ......................................... 1,450,000
85,000 Vitesse Semiconductor Corp.* .................................... 3,995,000
--------------
16,417,625
--------------
Shoes (0.3%)
100,000 Wolverine World Wide, Inc. ..................................... $ 2,825,000
--------------
Telecommunications (8.4%)
107,000 Aliant Communications, Inc. ..................................... 3,631,313
135,818 CFW Communications Co. ......................................... 3,565,223
120,000 ICG Communications, Inc.* ....................................... 4,447,500
150,000 ITC DeltaCom, Inc.* ............................................. 4,809,375
100,500 IXC Communications, Inc.* ....................................... 5,703,375
100,000 McLeodUSA, Inc. (Class A)* ...................................... 4,200,000
84,000 Metromedia Fiber Network, Inc. (Class A)* ....................... 2,814,000
250,000 Metronet Communications Corp. (Class B)* ........................ 6,187,500
81,000 MindSpring Enterprises, Inc.* ................................... 5,123,250
133,500 NEXTLINK Communications, Inc. (Class A)* ........................ 4,272,000
103,000 NTL Inc.* ....................................................... 4,429,000
89,700 Pacific Gateway Exchange, Inc.* ................................. 5,101,688
110,000 Primus Telecommunications Group, Inc.* .......................... 3,162,500
100,000 SmarTalk Teleservices, Inc.* .................................... 3,187,500
115,000 Star Telecommunications, Inc.* .................................. 6,353,750
100,000 Tel-Save Holdings, Inc.* ........................................ 2,262,500
105,000 Winstar Communications, Inc.* ................................... 4,495,313
--------------
73,745,787
--------------
Telecommunications Equipment (3.5%)
125,500 Anaren Microwave, Inc.* ......................................... 2,761,000
100,000 ANTEC Corp.* .................................................... 1,493,750
195,000 Aspect Telecommunications Corp.* ................................ 5,216,250
281,000 Boston Communications Group, Inc.* .............................. 2,704,625
249,000 FORE Systems, Inc.* ............................................. 3,921,750
167,500 GeoTel Communications Corp.* .................................... 4,627,188
148,000 Premisys Communications, Inc.* .................................. 4,245,750
82,650 REMEC, Inc.* .................................................... 2,365,856
67,750 VideoServer, Inc.* .............................................. 842,641
100,000 Xylan Corp.* .................................................... 2,437,500
--------------
30,616,310
--------------
Truckers (0.3%)
61,000 U S Freightways Corp. .......................................... 2,196,000
--------------
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
PORTFOLIO OF INVESTMENTS March 31, 1998 (unaudited) continued
NUMBER OF
SHARES VALUE
- --------------------------------------------------------------------------------------------
Wireless Communication (0.6%)
159,300 Clearnet Communications Inc. (Class A)(Canada)* ................. $ 2,240,156
177,000 Vanguard Cellular Systems, Inc. (Class A)* ...................... 3,219,326
--------------
5,459,482
--------------
TOTAL COMMON STOCKS
(Identified Cost $642,190,445) .................................. 849,298,814
--------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS
- -----------
<S> <C> <C>
SHORT-TERM INVESTMENTS (3.4%)
U.S. GOVERNMENT AGENCY (a) (3.1%)
Federal Home Loan Mortgage Corp. 5.90% due 04/01/98
$27,000 (Amortized Cost $27,000,000) .................................... 27,000,000
--------------
REPURCHASE AGREEMENT (0.3%)
The Bank of New York 5.375% due 04/01/98 (dated 03/31/98;
proceeds $2,688,256)(b)
2,688 (Identified Cost $2,687,855) .................................... 2,687,855
--------------
TOTAL SHORT-TERM INVESTMENTS
(Identified Cost $29,687,855) ................................... 29,687,855
--------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
- --------------------------------------------------------------------------------------------
<S> <C> <C>
TOTAL INVESTMENTS
(Identified Cost $671,878,300)(c) ................................. 99.7% $878,986,669
OTHER ASSETS IN EXCESS OF
LIABILITIES........................................................ 0.3 2,862,229
-------- --------------
NET ASSETS ........................................................ 100.0% $881,848,898
======== ==============
</TABLE>
- --------------
ADR American Depository Receipt.
* Non-income producing security.
(a) Security was purchased on a discount basis. The interest rate shown
has been adjusted to reflect a money market equivalent yield.
(b) Collateralized by $2,524,543 U.S. Treasury Note 6.625% due 05/15/07
valued at $2,741,612.
(c) The aggregate cost for federal income tax purposes approximates
identified cost. The aggregate gross unrealized appreciation is
$219,239,898 and the aggregate gross unrealized depreciation is
$12,131,529, resulting in net unrealized appreciation of
$207,108,369.
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value (identified cost
$671,878,300).................................................... $878,986,669
Receivable for:
Investments sold................................................ 12,460,274
Shares of beneficial interest sold ............................. 5,867,350
Dividends ...................................................... 89,851
Prepaid expenses and other assets ................................ 202,081
--------------
TOTAL ASSETS ................................................... 897,606,225
--------------
LIABILITIES:
Payable for:
Investments purchased........................................... 13,778,291
Plan of distribution fee........................................ 750,677
Shares of beneficial interest repurchased ...................... 745,845
Investment management fee....................................... 369,890
Accrued expenses and other payables .............................. 112,624
--------------
TOTAL LIABILITIES............................................... 15,757,327
--------------
NET ASSETS...................................................... $881,848,898
==============
COMPOSITION OF NET ASSETS:
Paid-in-capital................................................... $636,544,255
Net unrealized appreciation ...................................... 207,108,369
Accumulated net investment loss .................................. (3,916,649)
Accumulated undistributed net realized gain....................... 42,112,923
--------------
NET ASSETS...................................................... $881,848,898
==============
CLASS A SHARES:
Net Assets........................................................ $4,634,628
Shares Outstanding (unlimited authorized, $.01 par value) ....... 176,752
NET ASSET VALUE PER SHARE ...................................... $26.22
==============
MAXIMUM OFFERING PRICE PER SHARE,
(net asset value plus 5.54% of net asset value)................ $27.67
==============
CLASS B SHARES:
Net Assets........................................................ $871,749,880
Shares Outstanding (unlimited authorized, $.01 par value) ....... 33,427,068
NET ASSET VALUE PER SHARE ...................................... $26.08
==============
CLASS C SHARES:
Net Assets........................................................ $2,732,831
Shares Outstanding (unlimited authorized, $.01 par value) ....... 104,785
NET ASSET VALUE PER SHARE ...................................... $26.08
==============
CLASS D SHARES:
Net Assets........................................................ $2,731,559
Shares Outstanding (unlimited authorized, $.01 par value) ....... 104,012
NET ASSET VALUE PER SHARE ...................................... $26.26
==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
FINANCIAL STATEMENTS, continued
STATEMENT OF OPERATIONS
For the six months ended March 31, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Interest ......................................... $ 2,250,233
Dividends (net of $2,547 foreign withholding
tax)............................................. 820,032
--------------
TOTAL INCOME ................................... 3,070,265
--------------
EXPENSES
Plan of distribution fee (Class A shares) ........ 2,738
Plan of distribution fee (Class B shares) ........ 4,109,236
Plan of distribution fee (Class C shares) ........ 9,439
Investment management fee......................... 2,026,867
Transfer agent fees and expenses.................. 592,026
Registration fees ................................ 75,296
Shareholder reports and notices .................. 48,314
Custodian fees.................................... 40,992
Professional fees ................................ 28,198
Trustees' fees and expenses....................... 9,124
Other............................................. 3,493
--------------
TOTAL EXPENSES.................................. 6,945,723
--------------
NET INVESTMENT LOSS............................. (3,875,458)
--------------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain................................. 74,938,524
Net change in unrealized appreciation ............ (33,182,808)
--------------
NET GAIN........................................ 41,755,716
--------------
NET INCREASE...................................... $ 37,880,258
==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
FINANCIAL STATEMENTS, continued
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
MARCH 31, 1998 SEPTEMBER 30, 1997*
- ------------------------------------------------------------------------------------------
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss.................................... $ (3,875,458) $ (9,175,906)
Net realized gain...................................... 74,938,524 42,865,706
Net change in unrealized appreciation.................. (33,182,808) 84,974,039
------------ -------------
NET INCREASE ........................................ 37,880,258 118,663,839
------------ -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED GAIN:
Class A shares......................................... (101,496) --
Class B shares ........................................ (73,505,455) (113,569,438)
Class C shares ........................................ (175,858) --
Class D shares......................................... (22,340) --
------------ -------------
TOTAL DISTRIBUTIONS.................................. (73,805,149) (113,569,438)
------------ -------------
Net increase from transactions in shares of beneficial
interest ............................................. 38,168,667 75,310,217
------------ -------------
NET INCREASE......................................... 2,243,776 80,404,618
NET ASSETS:
Beginning of period ................................... 879,605,122 799,200,504
------------ -------------
END OF PERIOD
(Including accumulated net investment losses of
$3,916,649 and $41,190, respectively)................ $881,848,898 $ 879,605,122
============ =============
</TABLE>
- --------------
* Class A, Class C and Class D shares were issued July 28, 1997.
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS March 31, 1998 (unaudited)
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter Developing Growth Securities Trust (the "Fund") is registered
under the Investment Company Act of 1940, as amended (the "Act"), as a
diversified, open-end management investment company. The Fund's investment
objective is long-term capital growth. The Fund was organized as a
Massachusetts business trust on December 28, 1982 and commenced operations on
April 29, 1983. On July 28, 1997, the Fund commenced offering three
additional classes of shares, with the then current shares designated as
Class B shares.
The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase, some
Class A shares, and most Class B shares and Class C shares are subject to a
contingent deferred sales charge imposed on shares redeemed within one year,
six years and one year, respectively. Class D shares are not subject to a
sales charge. Additionally, Class A shares, Class B shares and Class C shares
incur distribution expenses.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts and disclosures. Actual results could differ
from those estimates.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) an equity security listed or traded on the
New York, American or other domestic or foreign stock exchange is valued at
its latest sale price on that exchange prior to the time when assets are
valued; if there were no sales that day, the security is valued at the latest
bid price; (2) all other portfolio securities for which over-the-counter
market quotations are readily available are valued at the latest available
bid price prior to the time of valuation; (3) when market quotations are not
readily available, including circumstances under which it is determined by
Dean Witter InterCapital Inc. (the "Investment Manager") that sale or bid
prices are not reflective of a security's market value, portfolio securities
are valued at their fair value as determined in good faith under procedures
established by and under the general supervision of the Trustees (valuation
of debt securities for which market quotations are not readily available may
be based upon current market prices of securities which are comparable in
coupon, rating and maturity or an appropriate matrix utilizing similar
factors); and (4) short-term debt securities having a maturity date of more
than sixty days at time of purchase are valued on a mark-to-market basis
until sixty days prior to maturity and thereafter at amortized cost based on
their value on the 61st day. Short-term debt securities having a maturity
date of sixty days or less at the time of purchase are valued at amortized
cost.
12
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS March 31, 1998 (unaudited) continued
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 by the identified cost
method. Dividend income and other distributions are recorded on the
ex-dividend date. Discounts are accreted over the life of the respective
securities. Interest income is accrued daily.
C. MULTIPLE CLASS ALLOCATIONS -- Investment income, expenses (other than
distribution fees), and realized and unrealized gains and losses are
allocated to each class of shares based upon the relative net asset value on
the date such items are recognized. Distribution fees are charged directly to
the respective class.
D. FEDERAL INCOME TAX STATUS -- It is the Fund'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 Fund records dividends
and distributions to its shareholders on the record date. The amount of
dividends and distributions from net investment income and net realized
capital gains are determined in accordance with federal income tax
regulations which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the capital accounts based on their federal tax-basis
treatment; temporary differences do not require reclassification. Dividends
and distributions which exceed net investment income and net realized capital
gains for financial reporting purposes but not for tax purposes are reported
as dividends in excess of net investment income or distributions in excess of
net realized capital gains. To the extent they exceed net investment income
and net realized capital gains for tax purposes, they are reported as
distributions of paid-in-capital.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement, the Fund pays the Investment
Manager a management fee, accrued daily and payable monthly, by applying the
following annual rates to the net assets of the Fund determined as of the
close of each business day: 0.50% to the portion of the daily net assets not
exceeding $500 million and 0.475% to the portion of the daily net assets
exceeding $500 million.
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund'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
13
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS March 31, 1998 (unaudited) continued
personnel, including officers of the Fund 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 Fund.
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Dean Witter Distributors Inc. (the
"Distributor"), an affiliate of the Investment Manager. The Fund has adopted a
Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act. The
Plan provides that the Fund will pay the Distributor a fee which is accrued
daily and paid monthly at the following annual rates: (i) Class A -up to 0.25%
of the average daily net assets of Class A; (ii) Class B - 1.0% of the lesser
of: (a) the average daily aggregate gross sales of the Class B shares since the
inception of the Fund (not including reinvestment of dividend or capital gain
distributions) less the average daily aggregate net asset value of the Class B
shares redeemed since the Fund's inception upon which a contingent deferred
sales charge has been imposed or waived; or (b) the average daily net assets of
Class B; and (iii) Class C - up to 1.0% of the average daily net assets of Class
C. In the case of Class A shares, amounts paid under the Plan are paid to the
Distributor for services provided. In the case of Class B and Class C shares,
amounts paid under the Plan are paid to the Distributor for services provided
and the expenses borne by it and others in the distribution of the shares of
these Classes, including the payment of commissions for sales of these Classes
and incentive compensation to, and expenses of, the account executives of Dean
Witter Reynolds Inc. ("DWR"), an affiliate of the Investment Manager and
Distributor, and others who engage in or support distribution of the shares or
who service shareholder accounts, including overhead and telephone expenses;
printing and distribution of prospectuses and reports used in connection with
the offering of these shares to other than current shareholders; and
preparation, printing and distribution of sales literature and advertising
materials. In addition, the Distributor may utilize fees paid pursuant to the
Plan, in the case of Class B shares, to compensate DWR and other selected
broker-dealers for their opportunity costs in advancing such amounts, which
compensation would be in the form of a carrying charge on any unreimbursed
expenses.
In the case of Class B shares, provided that the Plan continues in effect,
any cumulative expenses incurred by the Distributor but not yet recovered may
be recovered through the payment of future distribution fees from the Fund
pursuant to the Plan and contingent deferred sales charges paid by investors
upon redemption of Class B shares. Although there is no legal obligation for
the Fund to pay expenses incurred in excess of payments made to the
Distributor under the Plan and the proceeds of contingent deferred sales
charges paid by investors upon redemption of shares, if for any reason the
Plan is terminated, the
14
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS March 31, 1998 (unaudited) continued
Trustees will consider at that time the manner in which to treat such
expenses. The Distributor has advised the Fund that such excess amounts,
including carrying charges, totaled $26,600,271 at March 31, 1998.
In the case of Class A shares and Class C shares, expenses incurred pursuant
to the Plan in any calendar year in excess of 0.25% or 1.0% of the average
daily net assets of Class A or Class C, respectively, will not be reimbursed
by the Fund through payments in any subsequent year, except that expenses
representing a gross sales credit to account executives may be reimbursed in
the subsequent calendar year. For the six months ended March 31, 1998, the
distribution fee was accrued for Class A shares and Class C shares at the
annual rate of 0.24% and 1.0%, respectively.
The Distributor has informed the Fund that for the six months ended March 31,
1998, it received contingent deferred sales charges from certain redemptions
of the Fund's Class A shares, Class B shares and Class C shares of $35,
$582,359, and $1,965, respectively, and received $40,540 in front-end sales
charges from sales of the Fund's Class A shares. The respective shareholders
pay such charges which are not an expense of the Fund.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities,
excluding short-term investments, for the six months ended March 31, 1998
aggregated $749,667,608, and $784,739,072, respectively.
For the six months ended March 31, 1998, the Fund incurred $92,590 in
brokerage commissions with DWR for portfolio transactions executed on behalf
of the Fund. At March 31, 1998, the Fund's payable for investments purchased
included unsettled trades with DWR of $231,750.
For the six months ended March 31, 1998, the Fund incurred brokerage
commissions of $40,740 with Morgan Stanley & Co., Inc., an affiliate of the
Investment Manager, for portfolio transactions executed on behalf of the
Fund.
Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager
and Distributor, is the Fund's transfer agent. At March 31, 1998, the Fund
had transfer agent fees and expenses payable of approximately $3,800.
The Fund has an unfunded noncontributory defined benefit pension plan
covering all independent Trustees of the Fund who will have served as
independent Trustees 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 March 31, 1998 included in Trustees'
15
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS March 31, 1998 (unaudited) continued
fees and expenses in the Statement of Operations amounted to $1,951. At March
31, 1998, the Fund had an accrued pension liability of $41,565 which is
included in accrued expenses in the Statement of Assets and Liabilities.
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
MARCH 31, 1998 SEPTEMBER 30, 1997*
-------------------------- ---------------------------
(UNAUDITED)
SHARES AMOUNT SHARES AMOUNT
--------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Sold .......................... 197,716 $ 4,810,722 35,616 $ 899,495
Reinvestment of distributions 4,011 90,052 -- --
Redeemed ...................... (60,550) (1,542,571) (41) (1,100)
--------- ------------- ---------- -------------
Net increase - Class A ........ 141,177 3,358,203 35,575 898,395
--------- ------------- ---------- -------------
CLASS B SHARES
Sold .......................... 7,419,944 184,692,568 14,447,649 343,330,085
Reinvestment of distributions 3,114,684 69,706,625 4,819,692 107,527,322
Redeemed ...................... (9,061,096) (223,671,787) (16,152,387) (377,477,428)
--------- ------------- ---------- -------------
Net increase - Class B ........ 1,473,532 30,727,406 3,114,954 73,379,979
--------- ------------- ---------- -------------
CLASS C SHARES
Sold .......................... 211,710 5,235,202 38,996 1,016,199
Reinvestment of distributions 7,586 169,775 -- --
Redeemed ...................... (153,327) (3,724,510) (180) (4,719)
--------- ------------- ---------- -------------
Net increase - Class C ........ 65,969 1,680,467 38,816 1,011,480
--------- ------------- ---------- -------------
CLASS D SHARES
Sold .......................... 103,857 2,418,315 786 20,363
Reinvestment of distributions 925 20,790 -- --
Redeemed ...................... (1,556) (36,514) -- --
--------- ------------- ---------- -------------
Net increase - Class D ........ 103,226 2,402,591 786 20,363
--------- ------------- ---------- -------------
Net increase in Fund .......... 1,783,904 $ 38,168,667 3,190,131 $ 75,310,217
========= ============= ========== =============
</TABLE>
- ------------
* For Class A, C and D shares, for the period July 28, 1997 (issue date)
through September 30, 1997.
6. FEDERAL INCOME TAX STATUS
At September 30, 1997, the Fund had temporary book/tax differences primarily
attributable to capital loss deferrals on wash sales.
16
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE YEAR ENDED SEPTEMBER 30,
MARCH 31, -----------------------------------------------------------------
1998++ 1997*++ 1996 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ..... $27.46 $27.71 $25.54 $17.55 $20.50 $12.20
------ ------ ------ ------ ------ ------
Net investment loss ....................... (0.09) (0.28) (0.23) (0.19) -- (0.12)
Net realized and unrealized gain (loss) .. 1.02 3.92 4.32 8.34 (1.82) 8.42
------ ------ ------ ------ ------ ------
Total from investment operations .......... 0.93 3.64 4.09 8.15 (1.82) 8.30
------ ------ ------ ------ ------ ------
Less distributions from net realized gain (2.31) (3.89) (1.92) (0.16) (1.13) --
------ ------ ------ ------ ------ ------
Net asset value, end of period ............ $26.08 $27.46 $27.71 $25.54 $17.55 $20.50
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN+ .................. 4.79%(1) 16.38% 17.53% 46.87% (8.88)% 67.95%
RATIOS TO AVERAGE NET ASSETS:
Expenses .................................. 1.68%(2) 1.68% 1.69% 1.77% 1.78% 1.84%
Net investment loss ....................... (0.94)%(2) (1.21)% (1.03)% (1.04)% (1.32)% (1.52)%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands .. $871,750 $877,539 $799,201 $534,869 $340,169 $240,389
Portfolio turnover rate ................... 96%(1) 154% 149% 114% 160% 203%
Average commission rate paid .............. $0.0568 $0.0572 $0.0571 -- -- --
</TABLE>
- ------------
* Prior to July 28, 1997, the Fund issued one class of shares. All shares
of the Fund held prior to that date have been designated Class B
shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the
net asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX JULY 28, 1997*
MONTHS ENDED THROUGH
MARCH 31, 1998++ SEPTEMBER 30, 1997++
- -------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
CLASS A SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period .......... $27.50 $24.62
------ ------
Net investment loss ........................... (0.02) (0.02)
Net realized and unrealized gain .............. 1.05 2.90
------ ------
Total from investment operations .............. 1.03 2.88
------ ------
Less distributions from net realized gain ..... (2.31) --
------ ------
Net asset value, end of period ................ $26.22 $27.50
====== ======
TOTAL INVESTMENT RETURN+ ...................... 5.16%(1) 11.70%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses ...................................... 0.93%(2) 0.99%(2)
Net investment loss ........................... (0.20)%(2) (0.46)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands ....... $4,635 $978
Portfolio turnover rate ....................... 96%(1) 154%
Average commission rate paid .................. $0.0568 $0.0572
CLASS C SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period .......... $27.46 $24.62
------ ------
Net investment loss ........................... (0.11) (0.05)
Net realized and unrealized gain .............. 1.04 2.89
------ ------
Total from investment operations .............. 0.93 2.84
------ ------
Less distributions from net realized gain ..... (2.31) --
------ ------
Net asset value, end of period ................ $26.08 $27.46
====== ======
TOTAL INVESTMENT RETURN+ ...................... 4.79%(1) 11.54%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses ...................................... 1.69%(2) 1.71%(2)
Net investment loss ........................... (0.93)%(2) (1.19)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands ....... $2,733 $1,066
Portfolio turnover rate ....................... 96%(1) 154%
Average commission rate paid .................. $0.0568 $0.0572
</TABLE>
- ------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the
net asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX JULY 28, 1997*
MONTHS ENDED THROUGH
MARCH 31, 1998++ SEPTEMBER 30, 1997++
- -------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
CLASS D SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ......... $27.51 $24.62
------ ------
Net investment income (loss) .................. 0.01 (0.01)
Net realized and unrealized gain .............. 1.05 2.90
------ ------
Total from investment operations .............. 1.06 2.89
------ ------
Less distributions from net realized gain .... (2.31) --
------ ------
Net asset value, end of period ................ $26.26 $27.51
====== ======
TOTAL INVESTMENT RETURN+ ...................... 5.28%(1) 11.74%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses ...................................... 0.70%(2) 0.70%(2)
Net investment income (loss) .................. 0.05%(2) (0.20)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands ...... $2,732 $22
Portfolio turnover rate ....................... 96%(1) 154%
Average commission rate paid .................. $0.0568 $0.0572
</TABLE>
- ------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Calculated based on the net asset value as of the last business day of
the period.
(1) Not annualized.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE>
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Wayne E. Hedien
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Barry Fink
Vice President, Secretary and General Counsel
Jayne Stevlingson
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Morgan Stanley Dean Witter Trust FSB
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
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 Fund 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
Fund. For more detailed information about the Fund, its officers and trustees,
fees, expenses and other pertinent information, please see the prospectus
of the Fund.
This report is not authorized for distribution to prospective investors in the
Fund unless preceded or accompanied by an effective prospectus.
DEAN WITTER
DEVELOPING
GROWTH SECURITIES
[Graphic]
SEMIANNUAL REPORT
MARCH 31, 1998
