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DEAN WITTER VARIABLE INVESTMENT SERIES TWO WORLD TRADE CENTER, NEW YORK, NEW
YORK 10048
LETTER TO THE SHAREHOLDERS JUNE 30, 1997
DEAR SHAREHOLDER:
The six-month period ended June 30, 1997, was a positive one for domestic
financial markets as well as for most foreign markets. Global economic growth
continued to be strong while inflation remained benign in most regions.
GLOBAL ECONOMIC OVERVIEWS
UNITED STATES
The U.S. stock market continued its impressive rise with the Standard & Poor's
Composite Stock Price Index (S&P 500) gaining 20.62 percent for the period.
Although there was a correction of nearly 10 percent following the Federal
Reserve Board's 25-basis-point rate increase in March, this downturn was
short-lived, as inflation data showed little, if any, pressure.
Large-capitalization companies have dominated the U.S. stock market
year-to-date, but at the period's end small- and mid-sized stocks began to show
signs of breaking out of their slump.
Interest rates in the United States rose during the first quarter with the Fed's
modest rate increase in late March. For a time, it appeared as if the Fed was
poised for a series of further increases. However, a slight cooling off of
economic data, an ongoing lack of inflationary pressure and progress toward a
balanced budget agreement combined to create an environment that appeared to
reduce the need for further tightening. Hence, long-term interest rates actually
declined during the second quarter, with the yield on 30-year U.S. Treasury
bonds down 32 basis points, to 6.78 percent.
LATIN AMERICA
The Latin American equity markets had a spectacular first half. During the first
quarter, these markets gained an average of 15 percent as robust corporate
earnings growth and attractive valuations prompted strong capital inflows. The
region performed even better in the second
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LETTER TO THE SHAREHOLDERS JUNE 30, 1997, CONTINUED
quarter, gaining an average of 22 percent as the macroeconomic and political
fundamentals continued to improve and corporate earnings results generally
delivered in line with expectations.
ASIA
The Asian equity markets were mixed, with the flow of capital tapering off from
the high levels seen at the end of 1996. Low earnings-growth momentum and a
continued decline in export growth throughout much of the region depressed
market sentiment. Investors were also concerned about the possibility of further
asset deflation, which had hurt the Thai and Korean stock markets over the past
year.
The Northeast Asian markets generally performed well, buoyed by improved
liquidity generated in China. The economic austerity program there was relaxed
as inflation fell below 5 percent (compared to the high twenties of 1995). The
Hong Kong market, which was volatile as a result of concerns regarding U.S.
interest rates and the death of Deng Xiao Peng on February 19, 1997 stabilized
as the July 1 date for the resumption of sovereignty by China approached with
reasonable equanimity. The Taiwanese market remained strong mainly on local
demand, while Korea recovered well from its weakness in 1996, aided by improved
pricing for its DRAM semiconductor chip exports.
By contrast, the markets of Southeast Asia were generally weak, with the
exception of Indonesia. Thailand continued its sharp decline as concerns
continued to grow over bad debts within the financial system and as the national
deficit failed to show improvement. Elsewhere in Southeast Asia, the
slower-than-expected recovery in export growth and financial difficulties in
Thailand weighed heavily on investor sentiment. In addition, the action taken by
the central banks of Malaysia and the Philippines to reduce the growth of real
estate loans, designed as well to ensure that Thai-style problems would not
occur in their economies, was not well received by investors. The Singapore
markets were also depressed by these difficulties, despite its enormous surplus
and foreign exchange reserves.
JAPAN
The Japanese market was exceptionally volatile during the period, starting the
year on a particularly weak note as a result of renewed concerns about the
economy and the state of the financial system. The second quarter, however, saw
a sharp recovery (a 23.7 percent gain in U.S. dollar terms, aided by a 9 percent
appreciation of the currency) as the likelihood of rising rates diminished, hope
for a self-sustaining economic recovery rebounded and the selling pressure that
crushed bank stocks subsided. Despite the strength of the yen, the market
continued to be led by export companies, which are still seeing good demand for
their product.
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LETTER TO THE SHAREHOLDERS JUNE 30, 1997, CONTINUED
EASTERN EUROPE
With the exception of Russia, the stock markets of eastern Europe were depressed
by poor sentiment following a Czech currency crisis. Russian equities continued
to post the region's strongest gains, as concerns surrounding Russian president
Boris Yeltsin's health faded.
CONTINENTAL EUROPE
European stock markets continued to perform strongly in local currency terms.
However, the rally of the U.S. dollar versus European currencies during 1997
reduced returns for dollar-based investors. These strong markets were
attributable to several factors, most notably continuing improvement in
Continental European economies. The economic recovery is being driven primarily
by exports, because of the more competitive exchange rate between the German
mark and the U.S. dollar and low interest rates across the Continent.
The bond markets, especially those in peripheral Continental countries such as
Sweden, Spain and Italy, rallied throughout 1996 on the expectation of a smooth
transition to the Euro currency and as a result of the tight fiscal,
low-inflationary economic environment. However, some doubts have crept in during
1997, giving rise to bond market volatility and hence affecting certain
interest-rate-sensitive sectors, like Spanish utilities.
The victory of the Socialist party in France on June 1 produced significant
volatility in the French market but by period-end it was retesting all-time
highs, driven by high liquidity and, to an extent, the absence of damaging new
policies from the incoming government. However, their policies will be clarified
over the summer and a possible increase in corporate taxes, or other measures
that may not be universally welcomed, cannot be ruled out.
GREAT BRITAIN
The British economy differed sharply from that of Continental Europe in terms of
interest rates, with two increases already having occurred this year. In
addition, the U.K. corporate outlook is somewhat different from that of
companies on the Continent. The strength of the British pound sterling versus
the German mark is seriously hampering exports and thus will affect earnings
growth in cyclical and economically sensitive sectors.
On the political front, the widely and accurately predicted return of a Labour
administration during the May elections was viewed positively by the market,
because of the "new" Labour Party's centrist policies and the evident competence
of their senior ministerial team.
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DEAN WITTER VARIABLE INVESTMENT SERIES
LETTER TO THE SHAREHOLDERS JUNE 30, 1997, CONTINUED
CAPITAL APPRECIATION PORTFOLIO
Since its inception, on January 21, 1997, the Capital Appreciation Portfolio
posted a total return of 3.20 percent versus 14.15 percent for the Standard &
Poor's 500 Composite Stock Price Index (S&P 500) and 5.81 percent for the Lipper
Capital Appreciation Funds Index. The Portfolio's underperformance relative to
these benchmarks was the result of our focus on small-cap stocks -- which
represent about 85 percent of the Fund's total net assets -- at a time when the
market favored larger companies. While this period was disappointing for the
Portfolio, we believe that the small-cap segment of the market remains
undervalued, with greater growth potential than the broader market over the long
term.
The Portfolio continues to pursue growth stocks characterized by sound
fundamentals, solid earnings momentum, financial stability and management
strength. While the Portfolio is well diversified across a broad range of
industries, it is more heavily weighted in computer software and services,
commercial services, telecommunications equipment and retailing. Among the
Portfolio's holdings that performed particularly well during the period was
Keane Inc. Going forward, we believe that the current benign interest rate
environment and moderate economic climate bode well for small-cap stocks and
that these issues are positioned to outperform the overall market.
CAPITAL GROWTH PORTFOLIO
For the six-month period ended June 30, 1997, the Capital Growth Portfolio
posted a total return of 15.55 percent versus 20.62 percent for the S&P 500 and
14.28 percent for the Lipper Growth Funds Index.
The Portfolio remained generally fully invested during the period: 52 percent in
large-cap stocks and 48 percent in mid- and small-cap equities. The Portfolio
will remain diversified among stocks of all sizes, as well as across a wide
range of industries. During the period under review, positions were established
in Newpark Resources Inc., Tyco International Ltd., and Smith International,
Inc. The Portfolio sold its positions in HFS Inc., Interpublic Group of
Companies, Inc. and Parametric Technology Corp.
DIVIDEND GROWTH PORTFOLIO
For the six-month period ended June 30, 1997, the Dividend Growth Portfolio
posted a total return of 17.68 percent versus 20.62 percent for the S&P 500 and
15.52 percent for the Lipper Growth and Income Funds Index.
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LETTER TO THE SHAREHOLDERS JUNE 30, 1997, CONTINUED
Net assets of the Portfolio totaled more than $1.6 billion on June 30, an
increase of more than $370 million from the end of 1996. One new common stock
position -- Consolidated Natural Gas Co. -- was added to the Portfolio and
another -- PanEnergy Corp. -- was eliminated. As of June 30, the portfolio
consisted of 50 equity issues spread among 31 industry groups and 5 U.S.
Treasury bond and note issues. The Portfolio remained relatively fully invested,
with 98.3 percent of net assets committed to longer-term investments at
period-end.
EQUITY PORTFOLIO
For the six-month period ended June 30, 1997, the Equity Portfolio posted a
total return of 15.39 percent versus 20.62 percent for the S&P 500 and 14.28
percent for the Lipper Growth Funds Index.
The Portfolio was positioned for moderate economic growth through much of the
first half, with a slight overweighting in cyclical stocks. Technology was
overweighted for the majority of the first half, with holdings concentrated in
the semiconductor and telecommunications equipment sectors. In our opinion there
continues to be ample potential for positive earnings surprises in the
semiconductor industry, which is emerging from a slowdown that began in the
fourth quarter of 1995. Telecommunication equipment vendors are benefiting from
strong growth in cellular subscribers and new competitors offering telephone
service worldwide.
In addition, the Portfolio was focused on cyclical industries such as
agriculture (5 percent of net assets), energy service (6 percent) and aerospace
(3 percent). We believe these industries will benefit from expansion in
developing markets that have a growing middle class. The Portfolio's global
consumer staples holdings (4 percent) should also benefit from exposure to these
markets. Financial stocks were overweighted at about 16 percent of net assets,
in expectation that continuing industry consolidation will continue to benefit
the sector. Finally, pharmaceutical companies are overweighted at 6 percent of
the Portfolio's assets. In these industries many companies with strong new
product pipelines continue to enjoy pricing power.
We continue to believe that the Portfolio's focus on industry selection will
serve it well. We remain overweighted in companies that are well diversified
globally, such as those in the technology, consumer goods and energy segments.
We expect world growth to be healthy and world inflation to remain benign,
allowing these industries to continue producing healthy earnings growth.
INCOME BUILDER PORTFOLIO
Since its inception, on January 21, 1997, the Income Builder Portfolio posted a
total return of 8.00 percent versus 14.15 percent for the S&P 500 and 14.75
percent for the Lipper Equity Income Funds Index.
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DEAN WITTER VARIABLE INVESTMENT SERIES
LETTER TO THE SHAREHOLDERS JUNE 30, 1997, CONTINUED
By June 30, Portfolio assets had grown to over $20 million. The Portfolio's
target asset allocation is 40 percent large-capitalization common stocks, 30
percent convertible securities, 10 percent investment-grade fixed-income
securities, 10 percent high-yield bonds and 10 percent real estate investment
trusts (REITs).
On June 30, the large-capitalization segment was 96.6 percent invested, and it
has been relatively fully invested since inception. At period-end, the Portfolio
owned 55 common stocks spread among 29 industry groups.
The convertible portion of the Portfolio performed well during the period ended
June 30, although it lagged the broader market for much of that period. This can
be attributed to the fact that the convertible universe consists of many
small-cap companies, which as a group, underperformed large caps until late in
the period. The Portfolio's emphasis on yield also dampened performance but
provided significant downside support as the overall market retreated, toward
the latter half of the first quarter of 1997. We expect convertibles to perform
well in modestly increasing, stable or declining equity markets but to lag
during very strong markets.
The REIT portion of the Portfolio also performed well during the period. Our
exposure to this sector is in line with the 10 percent target and is split
between REIT stocks and REIT convertible securities.
The fixed-income portion of the Portfolio performed as expected, having fairly
low sensitivity to interest-rate fluctuations. This portion of the Portfolio is
structured to provide maximum current income with low exposure to interest-rate
movements. This strategy helped reduce volatility in the Portfolio during the
period.
EUROPEAN GROWTH PORTFOLIO
For the six-month period ended June 30, 1997, the European Growth Portfolio
posted a total return of 11.39 percent versus 14.55 percent for the Morgan
Stanley Capital International World Index (MSCI World Index) and 11.40 for the
Lipper European Region Funds Index.
The Portfolio is well exposed to cyclical and economically sensitive stocks that
should respond positively to Europe's strengthening economies and is notably
underweighted in financials. Key holdings in the cyclical area, which are
concentrated in Continental Europe, include Volkswagen AG, Scania AB and
Michelin (automotive), Usinor Sacilor (steel), and BASF AG and Hoechst
(chemicals). Pharmaceuticals are particularly well represented (Glaxo Wellcome
PLC, Novartis AG, Roche
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LETTER TO THE SHAREHOLDERS JUNE 30, 1997, CONTINUED
Holdings AG and Astra AB). The Portfolio's limited exposure to financials is
concentrated in the blue-chip areas of Dutch insurers (Aegon NV, ING Groep NV),
Spanish banks (Banco Popular Espanol SA, Banco Bilbao Vizcaya SA) and U.K. banks
(Barclays, Abbey National PLC).
The U.K. remains the Portfolio's largest single country exposure, at
approximately 32 percent, followed by France (14 percent), the Netherlands (12
percent) and Germany (9 percent). The Portfolio is also overweighted in the
smaller markets of Spain and Sweden, with weightings there of 7 percent and 8
percent, respectively. The French and German stocks are hedged partly in the
U.S. dollar, given that we expect the dollar to continue to rally.
GLOBAL DIVIDEND GROWTH PORTFOLIO
For the six-month period ended June 30, 1997, the Global Dividend Growth
Portfolio provided a total return of 13.98 percent compared to 14.55 percent for
the MSCI World Index and 12.89 for the Lipper Global Funds Index.
During the period under review, we decided to gain exposure to both Spain and
Sweden, which were previously not represented in the Portfolio. The Portfolio
remains fully invested and well diversified, with 117 equity issues spread
across the world's largest markets as defined by market capitalization. The
United States, the world's largest market, continues to be the Fund's largest
target weighting, at approximately 30 percent of total net assets spread among
20 stocks. Recent U.S. additions to the Fund include Dow Chemical Co., AT&T
Corp. and GPU, Inc.
The Portfolio remains exposed to Japan, the world's second-largest market, with
a target allocation of 24.5 percent of total net assets. While there is still
plenty of pessimism surrounding Japanese stocks in general, we are finding that
many world-class Japanese companies are selling at very attractive prices, which
we believe may offer significant rewards for patient and disciplined long-term
investors.
The Portfolio's target allocation to Europe is 35.5 percent made up of the
United Kingdom (10 percent), France (6.5 percent), Germany (7 percent), Italy (4
percent), the Netherlands (3 percent), Switzerland (2 percent), Spain (1.5
percent) and Sweden (1.5 percent). We are very optimistic about the long-term
growth potential of high-quality European common stocks, many of which are more
attractively valued than their U.S. counterparts. In addition, because Europe's
business cycle lags that of the United States, those stocks may be poised for a
period of better earnings growth and superior shareholder returns. European
companies are also far behind their U.S. counterparts in both
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LETTER TO THE SHAREHOLDERS JUNE 30, 1997, CONTINUED
the breadth and magnitude of restructuring through downsizing, spin-offs and
strategic mergers, all of which are designed to enhance shareholder returns.
With the bulk of these returns yet to be realized, the Portfolio's strategic
overweighting in European issues seems prudent.
On the Pacific Rim, the Portfolio has exposure to Hong Kong (4 percent) and
Malaysia (1.5 percent). The Portfolio's managers remain optimistic about the
success of the transition of Hong Kong to Chinese rule and are targeting 4
percent of net assets to high-quality companies positioned to benefit from these
changes. The Portfolio's Malaysian holdings are in companies that are
participating in the development of the region's infrastructure and represent
excellent profit growth potential at reasonable valuations. Our exposure to the
resource-oriented markets of Australia (1.5 percent) and Canada (3 percent)
offers risk reduction through diversification, as well as growth potential, in
economically stable countries.
Looking ahead, we will remain sensitive to any factors that would necessitate
changes to the Portfolio's country allocation. We believe that the long-term
outlook for the economies and securities markets of most of the world's major
countries is favorable and that the stocks of well established
large-capitalization international companies should perform well over the long
term.
PACIFIC GROWTH PORTFOLIO
For the six-month period ended June 30, 1997, the Pacific Growth Portfolio
posted a total return of 1.90 percent versus 14.55 percent for the MSCI World
Index and 7.25 percent for the Lipper Pacific Region Funds Index. This
underperformance was entirely attributable to the Portfolio's underweighting in
Taiwan, which performed particularly well during the period under review. With
this exception, our country allocation choices were positive, with
overweightings in Hong Kong, Australia and Japan. While we do not expect Japan
to outperform the rest of the region significantly over the balance of the year,
we are slightly overweighted in Japan relative to our benchmark because of our
expectation that Japan will outperform over the longer term.
Elsewhere, we retain a significant overweighting in Hong Kong. The smooth
transition to China and Hong Kong's new status as a Special Administrative
Region of China should be a significant economic benefit. China has a huge
interest in Hong Kong's success, both as its main conduit for tapping vital
foreign capital and as a potential steppingstone toward a closer relationship
with Taiwan. The emergence of China onto the world stage remains a key positive
factor for the Portfolio going forward. We continue to favor real estate
investment stocks such as Hong Kong Land Holdings Ltd.
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LETTER TO THE SHAREHOLDERS JUNE 30, 1997, CONTINUED
and Amoy Properties Ltd., as well as certain "red chip" stocks (i.e.,
Chinese-controlled companies listed in Hong Kong), such as Cosco Pacific Ltd.,
China Resources Enterprise Ltd. and Shanghai Industrial Holdings Ltd.
We remain underweighted in Southeast Asia but look for opportunities to emerge
there as the present currency instability dies down. We may increase exposure to
these markets later in the year if Hong Kong provides an opportunity for profit
taking. In most of these markets we are defensively positioned in terms of stock
selection, emphasizing utilities and other companies with reliable earnings
growth such as toll-road operators.
We also favor the electronics sector regionally in anticipation of continued
demand recovery. Holdings include Samsung Electronics Co. in South Korea,
Venture Manufacturing Ltd. and Amtek Engineering Ltd. in Singapore, Malaysian
Pacific Industries Berhad and O.Y.L. Industries Berhad in Malaysia and United
Micro Electronics in Taiwan.
UTILITIES PORTFOLIO
For the six-month period ended June 30, 1997, the Utilities Portfolio posted a
total return of 5.65 percent for the first six months of 1997, compared to a
return of 20.62 percent for the broad-based S&P 500 and 7.55 percent for the
Lipper Utilities Funds Index. The Portfolio's relative underperformance during
this period of strong industrial earnings and low inflation is attributable to
the defensive characteristics of utilities in general and the Portfolio
structure in particular.
The Portfolio remained fully invested during the first half of 1997, reflecting
improved investor confidence, particularly within the electrical and
telecommunications sectors. At period-end, 89 percent of the Portfolio's net
assets was allocated to utility and utility-related equities. Within the equity
component, 50 percent was allocated to electric utilities, 38 percent to
telecommunications and 12 percent to natural gas. Enhancing overall Portfolio
diversification are selective foreign securities (10 percent of net assets),
which focus on the growth area of global telecommunications.
The Portfolio's high-quality fixed-income segment accounted for 10 percent of
net assets, with 1 percent in cash and cash equivalents. The fixed-income
portion of the Portfolio remains well diversified, with a weighted average
credit rating of Baa and BBB+, as measured by Moody's Investor Service Inc. and
Standard & Poor's Corporation, respectively.
While the electric utility sector continues to focus on a balanced transition
from a monopolistic to a deregulated environment, the trend of mergers and
acquisitions continued during the first half of 1997. The Portfolio continues to
invest selectively within this sector and remains committed to
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LETTER TO THE SHAREHOLDERS JUNE 30, 1997, CONTINUED
companies characterized by their low costs combined with good earnings growth
prospects. The telecommunications sector performed well as investors continued
to drive up valuations in anticipation of further industry consolidation and
alliances, and the potential for attractive future earnings. Foreign
telecommunications stocks performed well, due to strong worldwide demand, and
remain a key element in the Portfolio's long-term growth prospects.
Natural gas commodity prices and stock performance benefited from favorable
weather and demand patterns. The Portfolio continues to focus on high-quality,
well-diversified pipeline companies.
During the second half of 1997, the Portfolio anticipates maintaining its
current fixed-income allocation at or near current levels. We plan to reduce our
allocation to electric utilities modestly in favor of selective
telecommunications growth companies and natural gas companies with growing
unregulated businesses. We may also increase our foreign exposure, to
participate in worldwide telecommunications infrastructure growth. We believe
that the Portfolio is uniquely positioned to take advantage of the opportunities
across all utility sectors and remains structured to meet its long-term total
return objectives.
STRATEGIST PORTFOLIO
For the six-month period ended June 30, 1997, the Strategist Portfolio posted a
total return of 9.33 percent versus 20.62 percent for the S&P 500, 10.25 percent
for the Lipper Flexible Portfolio Funds Index and 2.74 percent for the Lehman
Brothers Government/Corporate Bond Index.
The Strategist Portfolio combines equities, fixed-income securities and money
market instruments to seek total return with lower volatility than most
single-asset funds. While underperformance may occur during periods of extreme
returns in an individual class, diversification can provide a competitive return
with greater net asset value stability.
The Portfolio was allocated quite cautiously during the period under review. For
the six months ended June 30, 1997, the Portfolio's target allocation was 60
percent of assets in equities, 20 percent in bonds and 20 percent in cash
equivalents. When compared to an average, or neutrally-balanced portfolio
allocation, our weightings represent a small overweight in stocks (60 percent
versus 55 percent), an underweight in bonds (20 percent versus 35 percent) and a
double weight in cash (20 percent versus 10 percent).
With the powerful appreciation of stock and bond prices over the course of the
last few years, valuations have reached levels which have not been seen since
the mid- to late-1980s. A more cautious view toward long-dated financial assets
seems appropriate for several reasons. First, while it
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DEAN WITTER VARIABLE INVESTMENT SERIES
LETTER TO THE SHAREHOLDERS JUNE 30, 1997, CONTINUED
is difficult to sell an investment precisely at its peak in a given cycle,
certain data can be used to determine how much return, relative to risk, may be
left. While the Federal Reserve Board seems content to remain on the sidelines
and corporate earnings are growing at a healthy pace, a great deal of positive
expectation is built into asset prices. A more conservative allocation takes
into account the positive backdrop but also enables us to set aside some profits
in the form of cash to take advantage of opportunities in an inevitable market
pullback.
Within our specific equity and fixed-income holdings, we utilize portfolio
diversification in a number of industries and sectors to build a well-balanced
portfolio. The equity portfolio is comprised of 48 holdings which provide
industry exposure to nearly all of the S&P 500 groups. Particularly large
weightings include technology (25 percent); autos and retail (20 percent); and
food, beverage and health care (19 percent).
The fixed-income portfolio is comprised of 25 corporate bonds (all at or above
investment grade), nine U.S. Treasury bonds and notes and one Canadian
government issued bond. The bond portfolio's average maturity is 16.5 years, and
the average yield is 7.25 percent. We continue to prefer the yield advantage of
the high-quality corporate bond sector, which represents more than 70 percent of
the Portfolio's total bond holdings.
HIGH YIELD PORTFOLIO
For the six-month period ended June 30, 1997, the High Yield Portfolio posted a
total return of 4.48 percent versus 5.82 percent for the Lehman Brothers
Corporate/High Yield Index and 6.67 percent for the Lipper High Currents Yield
Funds Index.
Overall, the high-yield market was one of the better fixed-income performers
during the first half of 1997, benefiting from the strong economy's positive
impact on corporate credit quality. This provided support for high-yield bond
prices, even during times of general weakness in the Treasury market. The
improvement in credit quality, however, resulted in a narrowing of the yield
advantage over Treasuries.
With the outlook for the economy and corporate earnings remaining favorable, we
continue to focus on discounted B-rated issues, which we believe offer
attractive long-term total return potential as well as an appealing current
yield. However, given the market's declining yields over the past year and the
possibility of additional fiscal tightening, we have taken certain defensive
steps over the past six to nine months. Most notable has been the increase in
our allocation to higher-quality issues, from 10 percent to 25 percent of the
portfolio. We believe that these holdings will better protect the
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DEAN WITTER VARIABLE INVESTMENT SERIES
LETTER TO THE SHAREHOLDERS JUNE 30, 1997, CONTINUED
Portfolio in a potentially nervous market as well as provide the liquidity and
flexibility needed to take advantage of future market corrections. In addition,
we continue to favor either recession-resistant or growth-type industries over
less-stable cyclicals.
QUALITY INCOME PLUS PORTFOLIO
For the six month period ended June 30, 1997, the Quality Income Plus Portfolio
posted a total return of 3.01 percent versus 3.09 percent for the Lehman
Brothers Aggregate Bond Index.
During the first six months of 1997, the weighted average maturity of the
Portfolio ranged from 13.0 to 17.8 years. In April, this maturity extension
locked in a high level of current income, as we purchased more 30-year corporate
bonds. The subsequent resurgence of bond prices generated a strong total return.
The Portfolio also benefited from our overweighting of electric utilities (7.5
percent) as well as brokerage and insurance companies, which together
represented 9.5 percent of the portfolio.
We believe that the Portfolio's blend of long-term corporate bonds with AAA
mortgage-backed securities and U.S. government bonds will continue to generate
competitive current income as well as excellent risk-adjusted total return.
MONEY MARKET PORTFOLIO
As of June 30, 1997, the Money Market Portfolio had net assets in excess of $362
million, with an average life of 67 days. The Portfolio's annualized net yield
for the most recent six-month fiscal period was 5.02 percent and its annualized
yield for June was 5.14 percent.
On June 30, 1997, approximately 68 percent of the Portfolio was invested in
high-quality commercial paper, 18 percent in short-term bank notes and
certificates of deposit of major, financially strong commercial banks, 12
percent in bankers' acceptances issued by the same such institutions and the
remaining 2 percent in federal agency obligations.
At the end of this fiscal period, more than 88 percent of the Portfolio's assets
was due to mature in less than four months. The Portfolio is thus well
positioned for stability of value with a high degree of liquidity. We continue
to operate the Portfolio in a straight-forward, conservative style without
"structured notes" or derivatives, which could fluctuate excessively with
changes in interest rates.
LOOKING AHEAD
At this time, we anticipate a moderate pace for economic activity in the United
States during the second half of 1997, with no major adverse surprises in the
rate of inflation. However, it is possible that the Fed may again tighten
monetary policy, seeking to ward off possible inflationary pressure.
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DEAN WITTER VARIABLE INVESTMENT SERIES
LETTER TO THE SHAREHOLDERS JUNE 30, 1997, CONTINUED
We believe that markets throughout the world continue to offer attractive total
return potential in the current environment of fiscally tight governmental
policies, strong global economic growth and low inflation. In Europe, the
principal risk to current recovery and strength would be any threat to the
progress of monetary union and the likely turmoil in the bond and currency
markets that would accompany a delay.
The tiger markets of Asia continue to trade at attractive multiples of around 16
times 12-month-forward earnings. This rate compares favorably to equity market
valuations elsewhere and to the region's history. However, it remains to be seen
when investors will recognize the value in these markets.
We believe that export growth in Japan will improve, aided by enhanced
competitiveness (resulting both from the recent appreciation of the yen and
other recent realignments). In addition, the electronics industry, which is so
important to the region and which had such a difficult 1996, has begun to
recover. Recent data from the United States regarding industry growth bodes well
for exports from the region in the second half.
We appreciate your ongoing support of Dean Witter Variable Investment Series and
look forward to continuing to serve your investment needs and objectives.
Sincerely,
[SIGNATURE]
CHARLES A. FIUMEFREDDO
CHAIRMAN OF THE BOARD
* * *
The net asset values (the "NAVs") presented in the financial statements of Dean
Witter Variable Investment Series (the "Fund") reflect the NAVs of each of the
respective Portfolios. The Fund is the underlying investment for various
variable annuity contracts and as such, the NAVs of each Portfolio are not
indicative of the unit values of the insurance company separate accounts.
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES FUND
RESULTS OF SPECIAL MEETING (UNAUDITED)
On May 20, 1997, a special meeting of the Fund's shareholders was held for the
purpose of voting on five separate matters, the results of which are as follows:
(1) For each Portfolio, approval of a new Investment Management Agreement
between the Fund and Dean Witter InterCapital Inc. in connection with the
merger of Morgan Stanley Group Inc. with Dean Witter, Discover & Co.:
<TABLE>
<CAPTION>
VOTE NO. OF SHARES
- ---------------------------------------------------------- ---------------------
<S> <C>
Capital Appreciation Portfolio
For....................................................... 762,211
Against................................................... 22,978
Abstain................................................... 52,529
Capital Growth Portfolio
For....................................................... 4,965,132
Against................................................... 43,533
Abstain................................................... 382,633
Dividend Growth Portfolio
For....................................................... 67,139,315
Against................................................... 779,843
Abstain................................................... 4,395,032
Equity Portfolio
For....................................................... 19,000,261
Against................................................... 240,673
Abstain................................................... 1,247,384
Income Builder Portfolio
For....................................................... 762,667
Against................................................... 10,571
Abstain................................................... 44,336
European Growth Portfolio
For....................................................... 13,571,452
Against................................................... 219,894
Abstain................................................... 947,482
Global Dividend Growth Portfolio
For....................................................... 25,195,564
Against................................................... 277,070
Abstain................................................... 1,569,449
<CAPTION>
VOTE NO. OF SHARES
- ---------------------------------------------------------- ---------------------
<S> <C>
Pacific Growth Portfolio
For....................................................... 12,749,455
Against................................................... 185,387
Abstain................................................... 943,607
Utilities Portfolio
For....................................................... 25,392,926
Against................................................... 304,525
Abstain................................................... 1,716,330
Strategist Portfolio
For....................................................... 28,898,740
Against................................................... 239,199
Abstain................................................... 1,999,301
High Yield Portfolio
For....................................................... 42,656,204
Against................................................... 423,411
Abstain................................................... 2,303,199
Quality Income Plus Portfolio
For....................................................... 41,373,361
Against................................................... 340,311
Abstain................................................... 2,937,381
Money Market Portfolio
For....................................................... 309,729,670
Against................................................... 4,766,473
Abstain................................................... 25,822,292
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES FUND
RESULTS OF SPECIAL MEETING (UNAUDITED), CONTINUED
(2) Approval of the new Sub-Advisory Agreements between Dean Witter
InterCapital Inc. and Morgan Grenfell Investment Services Limited in
connection with the merger of Morgan Stanley Group Inc.
with Dean Witter, Discover & Co., with respect to the European Growth
Portfolio and the Pacific
Growth Portfolio:
<TABLE>
<CAPTION>
VOTE NO. OF SHARES
- ------------------------------------------------------------ -------------------
<S> <C>
European Growth Portfolio
For......................................................... 13,587,735
Against..................................................... 247,309
Abstain..................................................... 903,784
<CAPTION>
VOTE NO. OF SHARES
- ------------------------------------------------------------ -------------------
<S> <C>
Pacific Growth Portfolio
For......................................................... 12,749,455
Against..................................................... 185,387
Abstain..................................................... 943,607
</TABLE>
(3) Election of Trustees:
<TABLE>
<CAPTION>
FOR WITHHELD
---------- --------
<S> <C> <C>
Michael Bozic....................................................................................... 620,272,417 24,139,364
Charles A. Fiumefreddo.............................................................................. 621,265,032 23,146,749
Edwin J. Garn....................................................................................... 620,112,112 24,299,669
John R. Haire....................................................................................... 619,158,278 25,253,503
Wayne E. Hedien..................................................................................... 621,377,142 23,034,639
Dr. Manuel H. Johnson............................................................................... 621,158,686 23,253,095
Michael E. Nugent................................................................................... 621,239,026 23,172,755
Philip J. Purcell................................................................................... 620,829,413 23,582,368
John L. Schroeder................................................................................... 621,246,722 23,165,059
</TABLE>
(4) Approval of an amendment to the investment policies of the Money
Market Portfolio to authorize
the Board to modify the investment policies of the Money Market
Portfolio:
<TABLE>
<CAPTION>
VOTE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
For..........................................................................................................................
Against......................................................................................................................
Abstain......................................................................................................................
<CAPTION>
NO.
OF
VOTE SHAR
ES
- ----------------------------------------------------------------------------------------------------------------------------- -----
- ----
<S> <C>
For.......................................................................................................................... 307,5
98,789
Against...................................................................................................................... 10,58
3,193
Abstain...................................................................................................................... 22,13
6,453
</TABLE>
(5) Ratification of the selection of Price Waterhouse LLP as the Fund's
Independent Accountants:
<TABLE>
<CAPTION>
VOTE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
For..........................................................................................................................
Against......................................................................................................................
Abstain......................................................................................................................
<CAPTION>
NO.
OF
VOTE SHAR
ES
- ----------------------------------------------------------------------------------------------------------------------------- -----
- ----
<S> <C>
For.......................................................................................................................... 611,0
23,545
Against...................................................................................................................... 6,238
,400
Abstain...................................................................................................................... 27,14
9,836
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - MONEY MARKET
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
PRINCIPAL YIELD
AMOUNT IN ON DATE OF MATURITY
THOUSANDS PURCHASE DATE VALUE
- --------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
COMMERCIAL PAPER (68.5%)
AUTOMOTIVE - FINANCE (10.7%)
$ 13,675 Chrysler Financial Corp........ 5.60-5.69 % 07/30/97-10/28/97 $ 13,479,011
8,000 Ford Motor Credit Co........... 5.69-5.84 09/15/97-11/06/97 7,872,013
17,900 General Motors Acceptance
Corp......................... 5.45-5.99 08/06/97-11/17/97 17,600,845
---------------
38,951,869
---------------
BANK HOLDING COMPANIES (9.8%)
3,350 BankAmerica Corp............... 5.70 09/22/97 3,306,825
16,500 Bankers Trust New York Corp.... 5.69-5.76 07/03/97-11/12/97 16,377,550
9,000 J.P. Morgan & Co............... 5.45-5.48 07/09/97- 07/15/97 8,984,874
4,000 NationsBank Corp............... 5.70 07/10/97 3,994,390
3,000 PNC Funding Corp............... 5.74 07/25/97 2,988,680
---------------
35,652,319
---------------
BANKS - COMMERCIAL (16.9%)
6,000 Abbey National North America
Corp......................... 5.47-5.87 07/11/97-10/10/97 5,947,550
4,500 ANZ Delaware Inc............... 5.40-5.41 07/21/97-08/19/97 4,474,081
2,000 International Nederlanden
(U.S.)....................... 5.51 07/08/97 1,997,915
8,500 National Australia Funding (DE)
Inc.......................... 5.41-5.52 07/28/97-08/08/97 8,458,313
5,500 Rabobank USA Financial Corp.... 5.46-5.51 07/24/97-08/07/97 5,474,883
14,500 Societe General N.A., Inc...... 5.51-5.74 08/26/97-12/10/97 14,305,366
5,000 Toronto-Dominion Holdings USA
Inc.......................... 5.47 07/02/97 4,999,253
800 UBS Finance Del................ 6.20 07/01/97 800,000
14,875 WestPac Capital Corp........... 5.38-5.84 07/15/97-11/14/97 14,705,043
---------------
61,162,404
---------------
BROKERAGE (1.1%)
4,000 Goldman Sachs Group L.P........ 5.63 09/19/97 3,950,578
---------------
FINANCE - COMMERCIAL (4.7%)
17,300 CIT Group Holdings, Inc........ 5.70-5.76 08/21/97-11/24/97 17,050,762
---------------
FINANCE - CONSUMER (7.4%)
9,495 Avco Financial Services Inc.... 5.66-5.68 07/23/97-09/30/97 9,392,593
3,000 Household Finance Corp......... 5.78 08/28/97 2,972,595
14,625 Norwest Financial Inc.......... 5.64-5.74 07/22/97-10/01/97 14,484,978
---------------
26,850,166
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - MONEY MARKET
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
ANNUALIZED
PRINCIPAL YIELD
AMOUNT IN ON DATE OF MATURITY
THOUSANDS PURCHASE DATE VALUE
- --------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
FINANCE - DIVERSIFIED (6.3%)
$ 7,100 Associates Corp. of North
America...................... 5.68-5.69 % 07/01/97- 08/13/97 $ 7,085,954
15,800 General Electric Capital
Corp......................... 5.49-5.86 07/17/97-10/21/97 15,618,931
---------------
22,704,885
---------------
FINANCE - EQUIPMENT (1.3%)
4,775 Deere (John) Capital Corp...... 5.83 10/07/97 4,701,038
---------------
HEALTHCARE - DIVERSIFIED (1.7%)
6,175 Schering Corp.................. 5.69-5.80 09/23/97-10/14/97 6,086,401
---------------
INDUSTRIALS (3.3%)
12,220 Caterpillar Financial Services
Corp......................... 5.44-5.84 08/01/97- 09/17/97 12,105,655
---------------
OFFICE EQUIPMENT (3.6%)
5,050 IBM Credit Corp................ 5.65 10/16/97 4,966,696
8,300 Xerox Credit Corp.............. 5.43-5.72 08/12/97-12/16/97 8,178,574
---------------
13,145,270
---------------
RETAIL (0.9%)
3,250 Sears Roebuck Acceptance
Corp......................... 5.46 07/31/97 3,235,592
---------------
UTILITIES - TELEPHONE (0.8%)
2,800 AT&T Corp...................... 5.51 08/14/97 2,781,588
---------------
TOTAL COMMERCIAL PAPER
(AMORTIZED COST $248,378,527)....................................... 248,378,527
---------------
BANKERS' ACCEPTANCES (12.0%)
7,963 BankBoston, N.A................ 5.40-5.47 07/21/97-08/11/97 7,923,613
15,000 First Union National Bank...... 5.74-5.83 09/03/97-10/06/97 14,810,591
2,500 First Union National Bank of
Florida...................... 5.69 07/24/97 2,491,056
5,000 NationsBank, N.A............... 5.50 07/09/97 4,994,044
1,400 Republic National Bank......... 5.64 07/07/97 1,398,705
7,000 Union Bank of California....... 5.50-5.71 07/29/97-12/09/97 6,908,665
5,000 U.S. National Bank of Oregon... 5.40 07/07/97 4,995,592
---------------
TOTAL BANKERS' ACCEPTANCES
(AMORTIZED COST $43,522,266)........................................ 43,522,266
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - MONEY MARKET
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
ANNUALIZED
PRINCIPAL YIELD
AMOUNT IN ON DATE OF MATURITY
THOUSANDS PURCHASE DATE VALUE
- --------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CERTIFICATES OF DEPOSIT (9.8%)
$ 12,500 Chase Manhattan Bank (USA)..... 5.65-5.81 % 09/18/97-12/01/97 $ 12,500,000
5,000 Mellon Bank, N.A............... 5.88 11/05/97 5,000,000
10,000 Regions Bank of Alabama........ 5.57-5.80 08/22/97- 09/05/97 9,999,966
8,000 Union Bank of California,
N.A.......................... 5.54-5.75 07/08/97- 09/09/97 8,000,000
---------------
TOTAL CERTIFICATES OF DEPOSIT
(AMORTIZED COST $35,499,966)........................................ 35,499,966
---------------
SHORT-TERM BANK NOTES (8.2%)
4,000 BankBoston, N.A................ 5.72 10/09/97 4,000,000
12,500 F.C.C. National Bank........... 5.50-5.82 07/09/97-10/02/97 12,500,000
13,250 La Salle National Bank......... 5.55-5.77 07/14/97-09/04/97 13,250,000
---------------
TOTAL SHORT-TERM BANK NOTES
(AMORTIZED COST $29,750,000)........................................ 29,750,000
---------------
U.S. GOVERNMENT AGENCIES (1.8%)
3,500 Federal Home Loan Banks........ 5.56 11/07/97 3,431,773
3,100 Federal Home Loan Mortgage
Corp......................... 5.59 07/10/97 3,095,726
---------------
TOTAL U.S. GOVERNMENT AGENCIES
(AMORTIZED COST $6,527,499)......................................... 6,527,499
---------------
TOTAL INVESTMENTS
(AMORTIZED COST $363,678,258) (A)......... 100.3% 363,678,258
LIABILITIES IN EXCESS OF CASH AND OTHER
ASSETS.................................... (0.3) (972,807)
----- ------------
NET ASSETS.................................. 100.0% $362,705,451
----- ------------
----- ------------
<FN>
- ---------------------
(a) Cost is the same for federal income tax purposes.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - QUALITY INCOME PLUS
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CORPORATE BONDS (65.0%)
BANK HOLDING COMPANIES (9.6%)
$ 2,000 Bankers Trust New York Corp................... 9.00 % 08/01/01 $ 2,154,600
2,000 Bankers Trust New York Corp................... 7.375 05/01/08 2,011,680
2,000 Citicorp...................................... 7.25 09/01/08 2,011,260
5,000 First Bank N.A................................ 8.35 11/01/04 5,371,100
5,000 First Bank System............................. 7.625 05/01/05 5,167,650
3,500 Malayan Banking Berhad (Malaysia)............. 7.125 09/15/05 3,464,160
3,000 Mellon Bank N.A............................... 7.625 09/15/07 3,098,400
3,000 Old Kent Financial Corp....................... 6.625 11/15/05 2,903,220
3,145 PNC Funding Corp.............................. 9.875 03/01/01 3,457,770
5,000 State Street Boston Corp...................... 5.95 09/15/03 4,763,500
2,000 Swiss Bank Corp............................... 7.375 07/15/15 1,990,020
5,000 Swiss Bank Corp............................... 7.375 06/15/17 4,963,450
2,000 Wachovia Corp................................. 6.375 04/15/03 1,955,160
---------------
43,311,970
---------------
BEVERAGES (0.5%)
2,000 Coca-Cola Enterprises Inc..................... 8.50 02/01/22 2,216,700
---------------
BROKERAGE (3.2%)
2,000 Bear Stearns Companies, Inc................... 8.75 03/15/04 2,171,880
2,000 Donaldson Lufkin & Jenrette, Inc.............. 6.875 11/01/05 1,956,900
3,000 Lehman Brothers Holdings Inc.................. 7.25 10/15/03 3,008,190
2,000 Lehman Brothers Holdings, Inc................. 8.75 03/15/05 2,162,460
5,000 Lehman Brothers Holdings, Inc................. 8.50 08/01/15 5,323,000
---------------
14,622,430
---------------
COMPUTERS (1.0%)
5,000 International Business Machines Corp.......... 7.125 12/01/96 4,733,800
---------------
CONSUMER PRODUCTS (4.0%)
3,000 Anheuser Busch Co............................. 7.10 06/15/07 3,009,510
4,000 Becton Dickinson & Co......................... 8.70 01/15/25 4,306,960
5,000 CPC International, Inc........................ 7.25 12/15/26 4,895,500
1,000 Maytag Corp................................... 9.75 05/15/02 1,118,840
5,000 Philip Morris Companies, Inc.................. 7.125 10/01/04 4,971,950
---------------
18,302,760
---------------
DEFENSE (1.8%)
3,000 Lockheed Martin Corp.......................... 7.70 06/15/08 3,125,040
5,000 Lockheed Martin Corp.......................... 7.20 05/01/36 5,072,800
---------------
8,197,840
---------------
ENERGY (2.7%)
2,000 Anadarko Petroleum Corp....................... 7.73 09/15/96 2,059,840
5,000 Dresser Industries, Inc....................... 7.60 08/15/96 5,096,400
458 Mobil Corp.................................... 9.17 02/29/00 475,933
1,000 Texaco Capital, Inc........................... 9.75 03/15/20 1,253,050
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - QUALITY INCOME PLUS
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
$ 3,000 Transocean Offshore Inc....................... 8.00 % 04/15/27 $ 3,120,150
---------------
12,005,373
---------------
FINANCIAL SERVICES (8.3%)
3,500 Capital Desjardins Inc. (Canada).............. 7.37 08/08/05 3,537,835
5,000 Countrywide Funding Corp...................... 6.875 09/15/05 4,902,750
3,000 Equifax, Inc.................................. 6.50 06/15/03 2,936,940
5,000 Finova Capital Corp........................... 7.125 05/17/04 5,024,900
3,000 Ford Capital BV............................... 9.50 06/01/10 3,555,510
5,000 Ford Motor Credit Corp........................ 7.75 03/15/05 5,193,450
3,000 General Motors Acceptance Corp................ 9.00 10/15/02 3,279,360
5,000 Nationwide Financial Service.................. 8.00 03/01/27 5,053,200
4,000 Norwest Financial Inc......................... 7.875 02/15/02 4,175,200
---------------
37,659,145
---------------
HEALTHCARE - DIVERSIFIED (2.0%)
5,000 Columbia/HCA Healthcare Corp.................. 9.00 12/15/14 5,714,850
2,000 Kaiser Foundation Health Plan, Inc............ 9.00 11/01/01 2,171,780
1,000 Kaiser Foundation Health Plan, Inc............ 9.55 07/15/05 1,161,030
---------------
9,047,660
---------------
INDUSTRIALS (5.6%)
5,000 Barrick Gold Corp............................. 7.50 05/01/07 5,112,650
5,000 Boeing Co..................................... 7.95 08/15/24 5,459,450
4,924 Burlington Northern Santa Fe Corp............. 7.33 06/23/10 5,033,217
4,876 Burlington Northern Santa Fe Corp............. 7.97 01/01/15 5,175,321
1,000 Caterpillar, Inc.............................. 9.375 07/15/01 1,092,300
3,000 Caterpillar, Inc.............................. 9.375 08/15/11 3,585,630
---------------
25,458,568
---------------
INSURANCE (4.5%)
5,000 Cigna Corp.................................... 7.875 05/15/27 5,056,850
3,000 Jackson National Life Insurance Co. - 144A*... 8.15 03/15/27 3,058,740
5,000 Liberty Mutual Insurance Co. - 144A*.......... 7.875 10/15/26 4,981,950
5,000 Lumbermens Mutual Casualty - 144A*............ 9.15 07/01/26 5,484,200
2,000 Prudential Property Investments............... 7.125 07/01/07 1,995,900
---------------
20,577,640
---------------
PHARMACEUTICALS (1.8%)
2,000 Bristol-Myers Squibb.......................... 6.80 11/15/26 1,896,700
5,000 Johnson & Johnson............................. 8.72 11/01/24 5,452,450
733 Marion Merrell Corp........................... 9.11 08/01/05 794,362
---------------
8,143,512
---------------
PUBLISHING (1.1%)
5,000 Times Mirror Co............................... 7.25 11/15/96 4,765,950
---------------
REAL ESTATE INVESTMENT TRUST (1.1%)
5,000 Kimco Realty Corp............................. 6.50 10/01/03 4,862,250
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - QUALITY INCOME PLUS
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
RESTAURANTS (0.3%)
$ 1,000 McDonald's Corp............................... 8.875% 04/01/11 $ 1,161,300
---------------
RETAIL (3.8%)
5,000 May Department Stores Co...................... 6.875 11/01/05 4,957,250
5,000 May Department Stores Co...................... 7.625 08/15/13 5,073,550
1,000 Penney (J.C.) Co., Inc........................ 9.75 06/15/21 1,105,560
3,000 Sears Roebuck Acceptance Corp................. 6.90 08/01/03 3,000,900
3,000 Wal-Mart Stores, Inc.......................... 7.49 06/21/07 3,081,450
---------------
17,218,710
---------------
TELECOMMUNICATIONS (4.2%)
4,000 AT&T Corp..................................... 8.35 01/15/25 4,179,720
4,500 Frontier Corp................................. 7.25 05/15/04 4,552,965
5,000 GTE Corp...................................... 7.90 02/01/27 5,042,350
5,000 Lucent Technologies Inc....................... 7.25 07/15/06 5,096,750
---------------
18,871,785
---------------
TRANSPORTATION (1.1%)
5,000 America West Airlines......................... 6.85 07/02/09 4,873,400
---------------
UTILITIES - ELECTRIC (8.4%)
1,000 Chugach Electric Co........................... 9.14 03/15/22 1,125,570
5,000 Consolidated Edison Co. of New York, Inc...... 8.05 12/15/27 5,002,350
4,000 Duke Power Co................................. 8.625 03/01/22 4,114,960
2,000 Enersis S.A................................... 7.40 12/01/16 1,929,100
5,000 Florida Power & Light Co...................... 7.05 12/01/26 4,691,800
2,500 Pacificorp.................................... 6.71 01/15/26 2,235,325
5,000 Pennsylvania Power & Light Co................. 7.70 10/01/09 5,248,550
4,000 Public Service Electric & Gas................. 7.375 03/01/14 3,939,160
5,000 South Carolina Electric & Gas Co.............. 7.625 06/01/23 4,954,750
5,000 Virginia Electric Power....................... 7.25 02/01/23 4,762,900
---------------
38,004,465
---------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $289,168,002)....................................... 294,035,258
---------------
MUNICIPAL BOND (0.2%)
TAXABLE MUNICIPAL BOND (0.2%)
4,000 New Jersey Development Authority (IDENTIFIED
COST $927,080).............................. 0.00 02/15/17 928,040
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - QUALITY INCOME PLUS
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ----------------------------------------------------------------------------------------------------
<S> <S> <C> <C> <C>
U.S. GOVERNMENT & AGENCY OBLIGATIONS (31.2%)
$ 18 Federal Home Loan Mortgage Corp..... 11.50 % 06/01/11-05/01/19 $ 19,963
3,098 Federal Home Loan Mortgage Corp. PC
Gold.............................. 8.50 01/01/22-12/01/24 3,220,108
13,547 Federal National Mortgage Assoc..... 7.50 04/01/27-06/01/27 13,556,672
1,249 Federal National Mortgage Assoc..... 9.00 06/01/21-02/01/25 1,315,939
30,300 Government National Mortgage
Assoc............................. 7.00 (a) 29,750,812
668 Government National Mortgage
Assoc............................. 7.50 04/15/24-03/15/26 670,005
23,000 Government National Mortgage
Assoc............................. 7.50 (a) 23,064,688
19,377 Government National Mortgage
Assoc............................. 8.00 10/15/24-09/15/26 19,818,977
5,000 Government National Mortgage
Assoc............................. 8.00 (a) 5,114,062
4,924 Government National Mortgage
Assoc............................. 8.50 01/15/17-07/15/26 5,118,451
3,129 Government National Mortgage
Assoc............................. 9.00 07/15/24-12/15/24 3,306,332
201 Government National Mortgage
Assoc............................. 10.00 05/15/16-04/15/19 219,765
5,000 Tennessee Valley Authority.......... 7.85 06/15/44 5,060,950
2,000 U.S. Treasury Bond.................. 6.625 02/15/27 1,956,920
10,000 U.S. Treasury Bond.................. 6.50 11/15/26 9,588,900
10,000 U.S. Treasury Note.................. 6.25 01/31/02 9,945,000
2,000 U.S. Treasury Note.................. 6.25 06/30/02 1,988,100
7,000 U.S. Treasury Note.................. 7.00 07/15/06 7,202,930
---------------
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(IDENTIFIED COST $139,848,138)........................................ 140,918,574
---------------
FOREIGN GOVERNMENT OBLIGATIONS (2.5%)
5,000 Hydro-Quebec (Canada)............... 9.50 11/15/30 6,063,300
5,000 Province of New Brunswick
(Canada).......................... 7.625 06/29/04 5,231,800
---------------
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(IDENTIFIED COST $10,380,050)......................................... 11,295,100
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - QUALITY INCOME PLUS
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------
<S> <S> <C> <C> <C>
SHORT-TERM INVESTMENTS (b) (12.4%)
COMMERICAL PAPER
FINANCE - DIVERSIFIED (4.4%)
$ 20,000 General Electric Capital Corp................. 5.54 % 07/21/97 $ 19,938,444
---------------
U.S. GOVERNMENT AGENCIES (8.0%)
29,840 Federal Home Loan Banks....................... 5.37 07/21/97 29,750,781
6,500 Federal Home Loan Mortgage Corp............... 6.00 07/01/97 6,500,000
---------------
36,250,781
---------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $56,189,225)........................................ 56,189,225
---------------
TOTAL INVESTMENTS
(IDENTIFIED COST $496,512,495) (C)........ 111.3% 503,366,197
LIABILITIES IN EXCESS OF CASH AND OTHER
ASSETS.................................... (11.3) (50,984,360)
----- ------------
NET ASSETS.................................. 100.0% $452,381,837
----- ------------
----- ------------
<FN>
- ---------------------
* Resale is restricted to qualified institutional investors.
(a) Securities purchased on a forward commitment basis with an approximate
principal amount and no definite maturity date; the actual principal
amount and maturity date will be determined upon settlement.
(b) Securities were purchased on a discount basis. The interest rates shown
have been adjusted to reflect a money market equivalent yield.
(c) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $9,017,790 and the
aggregate gross unrealized depreciation is $2,164,088, resulting in net
unrealized appreciation of $6,853,702.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - HIGH YIELD
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CORPORATE BONDS (95.1%)
AEROSPACE (1.3%)
$ 3,800 Sabreliner Corp. (Series B)................. 12.50 % 04/15/03 $ 3,952,000
---------------
AUTOMOTIVE (6.5%)
3,675 APS, Inc.................................... 11.875 01/15/06 3,546,375
4,000 Envirotest Systems, Inc..................... 9.125 03/15/01 3,850,000
6,000 General Motors Acceptance Corp.............. 15.00 03/17/98 6,380,580
6,000 Toyota Motor Credit Corp.................... 15.00 09/26/97 6,129,240
---------------
19,906,195
---------------
BROADCAST MEDIA (6.8%)
2,000 Adams Outdoor Advertising L.P............... 10.75 03/15/06 2,135,000
6,000 Australis Holdings Ltd...................... 15.00++ 11/01/02 4,380,000
3,000 Echostar DBS Corp. - 144A*.................. 12.50 07/01/02 2,970,000
3,500 Echostar Satellite Broadcasting............. 13.125++ 03/15/04 2,485,000
2,000 Paxson Communications Corp.................. 11.625 10/01/02 2,160,000
3,505 Spanish Broadcasting System, Inc............ 12.50 06/15/02 3,881,787
4,500 TCI Satellite Entertainment Corp. - 144A*... 12.25++ 02/15/07 2,655,000
---------------
20,666,787
---------------
BUSINESS SERVICES (3.8%)
6,000 Anacomp, Inc. - 144A*....................... 10.875 04/01/04 6,180,000
5,000 Xerox Credit Corp........................... 15.00 06/26/98 5,443,600
---------------
11,623,600
---------------
CABLE & TELECOMMUNICATIONS (17.0%)
3,033 Adelphia Communications Corp. (Series B).... 9.50+ 02/15/04 2,903,892
3,000 Adelphia Communications, Inc. - 144A*....... 9.875 03/01/07 2,917,500
5,000 American Communications Services, Inc....... 13.00++ 11/01/05 3,000,000
3,100 American Communications Services, Inc....... 12.75++ 04/01/06 1,736,000
2,350 Cablevision Systems Corp.................... 10.50 05/15/16 2,555,625
1,975 Cablevision Systems Corp.................... 9.875 04/01/23 2,054,000
2,000 Charter Communication South East L.P.
(Series B)................................ 11.25 03/15/06 2,140,000
7,259 Falcon Holdings Group L.P. (Series B)....... 11.00+ 09/15/03 7,258,943
3,000 Frontiervision Operating Partners, L.P...... 11.00 10/15/06 3,127,500
3,000 GST Equipment Funding, Inc. - 144A*......... 13.25 05/01/07 3,217,500
8,000 Hyperion Telecommunication, Inc. (Series
B)........................................ 13.00++ 04/15/03 4,099,200
28,500 In-Flight Phone Corp.
(Series B) (a)............................ 14.00++ 05/15/02 2,707,500
2,000 IXC Communications, Inc.
(Series B)................................ 12.50 10/01/05 2,290,000
1,500 Paging Network, Inc......................... 10.125 08/01/07 1,455,000
3,000 Paging Network, Inc......................... 10.00 10/15/08 2,880,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - HIGH YIELD
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
$ 2,000 Peoples Telephone Co., Inc.................. 12.25 % 07/15/02 $ 2,120,000
3,000 Rifkin Acquisition Partners L.P............. 11.125 01/15/06 3,187,500
2,750 Shared Technology/Fairchild, Inc............ 12.25++ 03/01/06 2,468,125
---------------
52,118,285
---------------
COMPUTER EQUIPMENT (5.6%)
2,000 Advanced Micro Devices, Inc................. 11.00 08/01/03 2,225,000
6,000 IBM Credit Corp............................. 15.00 03/04/98 6,361,740
2,000 Unisys Corp................................. 15.00 07/01/97 2,000,000
4,855 Unisys Corp. (Conv.)........................ 8.25 03/15/06 6,432,001
---------------
17,018,741
---------------
CONSUMER PRODUCTS (1.9%)
3,000 J.B. Williams Holdings, Inc................. 12.00 03/01/04 3,090,000
2,500 Renaissance Cosmetics, Inc.................. 11.75 02/15/04 2,587,500
---------------
5,677,500
---------------
CONTAINERS (1.7%)
2,000 Mail-Well Corp.............................. 10.50 02/15/04 2,130,000
3,000 Packaging Resources, Inc.................... 11.625 05/01/03 3,120,000
---------------
5,250,000
---------------
ELECTRICAL & ALARM SYSTEMS (1.8%)
6,500 Mosler, Inc................................. 11.00 04/15/03 5,590,000
---------------
ENTERTAINMENT/GAMING & LODGING (9.9%)
2,000 AMF Group Inc. (Series B)................... 10.875 03/15/06 2,160,000
5,350 Fitzgeralds Gaming Corp. (Units)++.......... 13.00 12/31/02 4,520,750
3,740 Lady Luck Gaming Finance Corp............... 11.875 03/01/01 3,796,100
8,000 Motels of America, Inc. (Series B).......... 12.00 04/15/04 7,440,000
3,000 Players International, Inc.................. 10.875 04/15/05 3,075,000
3,400 Plitt Theaters, Inc. (Canada)............... 10.875 06/15/04 3,595,500
3,000 Station Casinos, Inc. (Series B)............ 9.625 06/01/03 2,970,000
3,000 Stuart Entertainment, Inc.
(Series B)................................ 12.50 11/15/04 2,895,000
---------------
30,452,350
---------------
FINANCIAL (6.5%)
5,000 Commercial Credit Co........................ 15.00 07/10/98 5,445,000
8,000 General Electric Capital Corp............... 13.50 01/20/98 8,339,360
6,000 Household Finance Corp...................... 15.00 09/25/97 6,126,900
---------------
19,911,260
---------------
FOODS & BEVERAGES (7.4%)
4,330 Envirodyne Industries, Inc.................. 10.25 12/01/01 4,351,650
2,500 Fleming Companies, Inc...................... 10.625 12/15/01 2,662,500
6,000 General Millls, Inc......................... 13.50 01/21/98 6,249,960
20,250 Specialty Foods Acquisition Corp. (Series
B)........................................ 13.00++ 08/15/05 9,416,250
---------------
22,680,360
---------------
HEALTHCARE (4.2%)
7,750 Unilab Corp................................. 11.00 04/01/06 7,052,500
7,000 Unison Healthcare Corp. - 144A*............. 12.25 11/01/06 5,845,000
---------------
12,897,500
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - HIGH YIELD
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MANUFACTURING (3.8%)
$ 2,000 Berry Plastics Corp......................... 12.25 % 04/15/04 $ 2,200,000
2,500 Deere John Capital Corp..................... 15.00 02/24/98 2,645,150
2,000 Exide Electronics Group, Inc. (Series B).... 11.50 03/15/06 2,150,000
2,000 International Wire Group, Inc............... 11.75 06/01/05 2,180,000
2,500 Uniroyal Technology Corp.................... 11.75 06/01/03 2,487,500
---------------
11,662,650
---------------
MANUFACTURING - DIVERSIFIED (5.9%)
2,090 Foamex L.P.................................. 11.875 10/01/04 2,246,750
3,000 Interlake Corp.............................. 12.00 11/15/01 3,330,000
3,000 Interlake Corp.............................. 12.125 03/01/02 3,150,000
3,000 J.B. Poindexter & Co., Inc.................. 12.50 05/15/04 3,030,000
2,000 Jordan Industries, Inc...................... 10.375 08/01/03 2,100,000
7,200 Jordan Industries, Inc. - 144A*............. 11.75++ 04/01/09 4,068,000
---------------
17,924,750
---------------
PUBLISHING (1.7%)
2,000 American Media Operations, Inc.............. 11.625 11/15/04 2,190,000
2,975 United States Banknote Corp................. 10.375 06/01/02 3,019,625
---------------
5,209,625
---------------
RESTAURANTS (4.4%)
7,750 American Restaurant Group Holdings, Inc..... 14.00++ 12/15/05 2,964,375
3,500 Boston Chicken, Inc......................... 4.50 02/01/04 2,671,655
3,000 Carrols Corp................................ 11.50 08/15/03 3,202,500
4,500 FRD Acquisition Corp. (Series B)............ 12.50 07/15/04 4,781,250
---------------
13,619,780
---------------
RETAIL (1.7%)
10,450 County Seat Stores, Inc. (b)................ 12.00 10/01/02 5,120,500
---------------
RETAIL - FOOD CHAINS (2.2%)
3,000 Jitney-Jungle Stores of America, Inc........ 12.00 03/01/06 3,345,000
3,500 Pathmark Stores, Inc........................ 9.625 05/01/03 3,368,750
---------------
6,713,750
---------------
TEXTILES - APPAREL MANUFACTURERS (1.0%)
4,000 U.S. Leather, Inc........................... 10.25 07/31/03 3,020,000
---------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $298,262,311)....................................... 291,015,633
---------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES
- -----------
<C> <S> <C>
COMMON STOCKS (c) (0.8%)
AUTOMOTIVE (0.0%)
87 Northern Holdings Industrial Corp. (d).................................. --
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - HIGH YIELD
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------------------------------------------
<C> <S> <C>
ENTERTAINMENT/GAMING & LODGING (0.0%)
2,000 Motels of America, Inc. - 144A*......................................... $ 30,072
71,890 Vagabond Inns, Inc. (Class D) (a)....................................... --
---------------
30,072
---------------
FOODS & BEVERAGES (0.0%)
120,000 Specialty Foods Acquisition Corp. - 144A*............................... 120,000
---------------
MANUFACTURING - DIVERSIFIED (0.8%)
84,072 Thermadyne Holdings Corp. (d)........................................... 2,532,669
---------------
RESTAURANTS (0.0%)
7,750 American Restaurant Group Holdings, Inc. - 144A*........................ 7,750
---------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $8,566,039)............................................ 2,690,491
---------------
PREFERRED STOCKS (0.6%)
ENTERTAINMENT/GAMING & LODGING (0.6%)
80,000 Fitzgeralds Gaming Corp. (Units)++
(Identified Cost $2,000,000).......................................... 1,880,000
---------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF EXPIRATION
WARRANTS DATE
- ----------- -----------
<C> <S> <C> <C>
WARRANTS (c) (0.1%)
AEROSPACE (0.0%)
1,500 Sabreliner Corp. - 144A*................................. 04/15/03 15,000
---------------
BROADCAST MEDIA (0.0%)
6,000 Australis Holdings Ltd. - 144A*.......................... 10/30/01 --
---------------
CABLE & TELECOMMUNICATIONS (0.0%)
2,000 Hyperion Telecommunication, Inc. (Series B) - 144A*...... 04/01/01 60,060
---------------
CONTAINERS (0.0%)
2,000 Crown Packaging Holdings, Ltd. (Canada) - 144A*.......... 11/01/03 --
---------------
ENTERTAINMENT/GAMING & LODGING (0.0%)
1,000 Boomtown, Inc. - 144A*................................... 11/01/98 --
2,000 Fitzgeralds Gaming Corp.................................. 12/19/98 2,045
3,500 Fitzgeralds South Inc. - 144A*........................... 03/15/99 --
---------------
2,045
---------------
MANUFACTURING (0.1%)
2,000 Exide Electronics Group, Inc. - 144A*.................... 03/15/06 50,040
15,000 Uniroyal Technology Corp................................. 06/01/03 26,250
---------------
76,290
---------------
RETAIL (0.0%)
2,000 County Seat Holdings Co.................................. 10/15/98 --
---------------
TOTAL WARRANTS
(IDENTIFIED COST $326,489)............................................ 153,395
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - HIGH YIELD
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
SHORT-TERM INVESTMENTS (3.1%)
U.S. GOVERNMENT AGENCY (e) (3.0%)
$ 9,000 Federal Home Loan Mortgage Corp. (Amortized
Cost $9,000,000).......................... 6.00 % 07/01/97 $ 9,000,000
---------------
REPURCHASE AGREEMENT (0.1%)
408 The Bank of New York (dated 06/30/97;
proceeds $408,141; collateralized by
$222,000 U.S. Treasury Bills 5.11% due
09/11/97 valued at $219,731, $115,520 U.S.
Treasury Note 8.375% due 08/15/08 valued
at $129,940 and $67,240 U.S.Treasury Note
5.875% due 06/30/00 valued at $66,567)
(Identified Cost $408,076)................ 5.75 07/01/97 408,076
---------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $9,408,076)......................................... 9,408,076
---------------
TOTAL INVESTMENTS
(IDENTIFIED COST $318,562,915) (F)......... 99.7 % 305,147,595
OTHER ASSETS IN EXCESS OF LIABILITIES........ 0.3 883,673
----- ------------
NET ASSETS................................... 100.0 % $306,031,268
----- ------------
----- ------------
<FN>
- ---------------------
* Resale is restricted to qualified institutional investors.
++ Consists of one or more class of securities traded together as a unit;
bonds or preferred stock with attached warrants.
+ Payment-in-kind security.
++ Currently a zero coupon bond and will pay interest at the rate shown at a
future specified date.
(a) Non-income producing security; issuer in bankruptcy.
(b) Non-income producing security; bond in default.
(c) Non-income producing securities.
(d) Acquired through exchange offer.
(e) Security was purchased on a discount basis. The interest rate shown has
been adjusted to reflect a money market equivalent yield.
(f) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $13,564,779 and the
aggregate gross unrealized depreciation is $26,980,099, resulting in net
unrealized depreciation of $13,415,320.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - UTILITIES
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (88.7%)
NATURAL GAS (10.5%)
60,000 Apache Corp......................... $ 1,950,000
105,000 Burlington Resources, Inc........... 4,633,125
115,230 El Paso Natural Gas Co.............. 6,337,650
100,000 Enron Corp.......................... 4,081,250
140,000 ENSERCH Corp........................ 3,115,000
70,000 Louisiana Land & Exploration Co..... 3,998,750
125,000 Questar Corp........................ 5,046,875
175,000 Seagull Energy Corp.*............... 3,062,500
85,000 Union Texas Petroleum Holdings,
Inc............................... 1,779,687
200,000 Williams Companies, Inc............. 8,750,000
---------------
42,754,837
---------------
TELECOMMUNICATIONS (33.2%)
76,666 360 DEG. Communications Co.*........ 1,312,905
120,000 Airtouch Communications, Inc.*...... 3,285,000
205,000 Alltel Corp......................... 6,854,687
120,000 AT&T Corp........................... 4,207,500
240,000 BCE, Inc. (Canada).................. 6,720,000
250,000 Cable & Wireless PLC (ADR) (United
Kingdom).......................... 6,984,375
160,000 Century Telephone Enterprises,
Inc............................... 5,390,000
175,000 Ericsson (L.M.) Telephone Co. (Class
B) (ADR) (Sweden)................. 6,890,625
150,000 Frontier Corp....................... 2,990,625
150,000 GTE Corp............................ 6,581,250
31,992 Lucent Technologies, Inc............ 2,305,423
175,000 MCI Communications Corp............. 6,693,750
55,000 Northern Telecom Ltd. (Canada)...... 5,005,000
120,000 NYNEX Corp.......................... 6,915,000
182,173 SBC Communications, Inc............. 11,271,954
145,000 Southern New England
Telecommunications Corp........... 5,636,875
125,000 Sprint Corp......................... 6,578,125
65,000 Tele Danmark AS (ADR) (Denmark)..... 1,698,125
71,875 Tele-Communications Liberty Media
Group (Class A)*.................. 1,707,031
135,000 Telecom Corp.of New Zealand Ltd.
(ADR) (New Zealand)............... 5,501,250
60,000 Telefonica de Argentina S.A. (ADR)
(Class B) (Argentina)............. 2,077,500
90,000 Telefonos de Mexico S.A. de C.V.
(Series L) (ADR) (Mexico)......... 4,297,500
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
130,000 Telephone & Data Systems, Inc....... $ 4,940,000
50,300 Teleport Communications Group Inc.
(Class A)*........................ 1,710,200
110,000 U.S. West Communications Group,
Inc............................... 4,145,625
140,000 U.S. West Media Group*.............. 2,835,000
354,500 WorldCom, Inc.*..................... 11,321,844
---------------
135,857,169
---------------
UTILITIES - ELECTRIC (45.0%)
210,000 Baltimore Gas & Electric Co......... 5,604,375
135,000 Carolina Power & Light Co........... 4,843,125
145,000 Central & South West Corp........... 3,081,250
220,865 CINergy Corp........................ 7,688,863
235,000 CMS Energy Corp..................... 8,283,750
130,000 Consolidated Edison Co. of New York,
Inc............................... 3,826,875
215,000 DPL, Inc............................ 5,294,375
212,500 DQE, Inc............................ 6,003,125
155,000 DTE Energy Co....................... 4,281,875
146,216 Duke Energy Corp.................... 7,009,230
130,000 Edison International................ 3,233,750
140,000 Enova Corp.......................... 3,368,750
215,000 Entergy Corp........................ 5,885,625
140,000 FPL Group, Inc...................... 6,448,750
175,000 General Public Utilities Corp....... 6,278,125
125,000 Hawaiian Electric Industries,
Inc............................... 4,828,125
200,000 Houston Industries, Inc............. 4,287,500
235,000 Illinova Corp....................... 5,170,000
225,000 IPALCO Enterprises, Inc............. 7,031,250
145,000 Kansas City Power &
Light Co.......................... 4,141,563
85,000 Montana Power Co.................... 1,970,938
110,000 New England Electric System......... 4,070,000
110,000 New York State Electric & Gas
Corp.............................. 2,296,250
170,000 NIPSCO Industries, Inc.............. 7,023,125
295,000 PacifiCorp.......................... 6,490,000
230,000 Pinnacle West Capital Corp.......... 6,914,375
100,000 Portland General Corp............... 3,968,750
75,000 Potomac Electric Power Co........... 1,734,375
200,000 Public Service Company of
Colorado.......................... 8,300,000
215,000 Public Service Company of New
Mexico............................ 3,843,125
125,000 Public Service Enterprise Group,
Inc............................... 3,125,000
205,000 SCANA Corp.......................... 5,086,563
275,000 Southern Co......................... 6,015,625
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - UTILITIES
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
130,000 Texas Utilities Co.................. $ 4,476,875
200,000 Western Resources, Inc.............. 6,487,500
215,000 Wisconsin Energy Corp............... 5,348,125
---------------
183,740,907
---------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $277,673,135)...... 362,352,913
---------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS
- -----------
<C> <S> <C>
CORPORATE BONDS (10.0%)
NATURAL GAS (1.9%)
$ 2,750 AGL Capital Trust - 144A** 8.17% due
06/01/37.......................... 2,732,097
3,000 Coastal Corp.
7.75% due 10/15/35................ 3,001,200
2,000 Panhandle Eastern Corp. 8.625% due
04/15/25.......................... 2,109,140
---------------
7,842,437
---------------
TELECOMMUNICATIONS (1.1%)
2,000 Southwestern Bell Telephone Co.
7.20% due 10/15/26................ 1,896,140
2,000 Sprint Corp.
9.25% due 04/15/22................ 2,382,180
---------------
4,278,320
---------------
UTILITIES - ELECTRIC (7.0%)
2,000 Carolina Power & Light Co. 6.875%
due 08/15/23...................... 1,830,880
2,500 Consolidated Edison Co. of New York,
Inc. 8.05% due 12/15/27........... 2,501,175
2,000 Empresa Nacional de Electricidad
Chile 8.125% due 02/01/97......... 2,042,440
2,250 Florida Power & Light Co. 7.05% due
12/01/26.......................... 2,111,310
3,000 Illinois Power Co.
8.75% due 07/01/21................ 3,096,510
3,000 Indianapolis Power Co.
7.05% due 02/01/24................ 2,807,610
1,500 Long Island Lighting Co. 9.625% due
07/01/24.......................... 1,530,000
2,000 Public Service Electric & Gas Co.
7.00% due 09/01/24................ 1,846,520
2,000 South Carolina Electric & Gas Co.
7.625% due 06/01/23............... 1,981,900
1,850 Southern Co Capital Trust Inc. -
144A**
8.19% due 02/01/37................ 1,855,217
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ------------------------------------------------------------------
<C> <S> <C>
$ 2,000 Southwestern Public Service 8.50%
due 02/15/25...................... $ 2,134,860
5,000 Wisconsin Electric Power Co. 7.125%
due 03/15/16...................... 4,829,200
---------------
28,567,622
---------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $40,258,137)....... 40,688,379
---------------
U.S. GOVERNMENT AGENCY (0.3%)
50,000 Tennessee Valley Authority 8.00% due
03/31/45 (Identified Cost
$1,250,000)....................... 1,268,750
---------------
SHORT-TERM INVESTMENT (0.4%)
REPURCHASE AGREEMENT
1,858 The Bank of New York 5.75% due
07/01/97 (dated 06/30/97; proceeds
$1,857,859; collateralized by
$244,909 U.S. Treasury Bill 0.00%
due 02/05/98 valued at $237,148,
$756,731 U.S. Treasury Bill 0.00%
due 12/26/97 valued at $737,760
and $882,000 U.S. Treasury Note
6.875% due 07/31/99 valued at
$919,805) (Identified Cost
$1,857,562)....................... 1,857,562
---------------
TOTAL INVESTMENTS
(IDENTIFIED COST
$321,038,834) (A)......... 99.4% 406,167,604
CASH AND OTHER ASSETS IN
EXCESS OF LIABILITIES..... 0.6 2,530,566
----- ------------
NET ASSETS.................. 100.0% $408,698,170
----- ------------
----- ------------
<FN>
- ---------------------
ADR American Depository Receipt.
* Non-income producing security.
** Resale is restricted to qualified institutional investors.
(a) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $94,671,429 and the
aggregate gross unrealized depreciation is $9,542,659, resulting in net
unrealized appreciation of $85,128,770.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - DIVIDEND GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (96.1%)
AEROSPACE (3.8%)
624,000 Raytheon Co...................... $ 31,824,000
374,000 United Technologies Corp......... 31,042,000
-----------------
62,866,000
-----------------
ALUMINUM (1.9%)
428,000 Aluminum Co. of America.......... 32,260,500
-----------------
AUTO PARTS (2.0%)
579,000 TRW, Inc......................... 32,894,437
-----------------
AUTOMOTIVE (3.8%)
831,000 Ford Motor Co.................... 31,370,250
560,000 General Motors Corp.............. 31,185,000
-----------------
62,555,250
-----------------
BANKS (5.7%)
680,000 Banc One Corp.................... 32,937,500
486,000 BankAmerica Corp................. 31,377,375
554,000 KeyCorp.......................... 30,954,750
-----------------
95,269,625
-----------------
BEVERAGES - SOFT DRINKS (1.9%)
864,000 PepsiCo Inc...................... 32,454,000
-----------------
CHEMICALS (5.8%)
364,000 Dow Chemical Co.................. 31,713,500
519,000 Eastman Chemical Co.............. 32,956,500
558,000 PPG Industries, Inc.............. 32,433,750
-----------------
97,103,750
-----------------
COMPUTERS (2.0%)
366,000 International Business Machines
Corp........................... 33,008,625
-----------------
CONGLOMERATES (3.9%)
330,000 Minnesota Mining & Manufacturing
Co............................. 33,660,000
702,000 Tenneco, Inc..................... 31,721,625
-----------------
65,381,625
-----------------
COSMETICS (1.9%)
333,000 Gillette Co...................... 31,551,750
-----------------
DRUGS (5.8%)
482,000 Abbott Laboratories.............. 32,173,500
410,000 American Home Products Corp...... 31,365,000
406,000 Bristol-Myers Squibb Co.......... 32,886,000
-----------------
96,424,500
-----------------
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
ELECTRIC - MAJOR (3.9%)
492,000 General Electric Co.............. $ 32,164,500
1,413,000 Westinghouse Electric Corp....... 32,675,625
-----------------
64,840,125
-----------------
FINANCIAL - MISCELLANEOUS (2.0%)
289,000 Household International, Inc..... 33,939,437
-----------------
FOODS (3.9%)
736,000 Quaker Oats Company (The)........ 33,028,000
770,000 Sara Lee Corp.................... 32,051,250
-----------------
65,079,250
-----------------
HOUSEHOLD PRODUCTS (2.0%)
230,000 Procter & Gamble Co.............. 32,487,500
-----------------
INSURANCE (2.0%)
318,500 Aetna Inc........................ 32,606,438
-----------------
METALS & MINING (2.0%)
389,000 Phelps Dodge Corp................ 33,137,938
-----------------
NATURAL GAS (3.9%)
713,000 Burlington Resources, Inc........ 31,461,125
592,000 El Paso Natural Gas Co........... 32,560,000
-----------------
64,021,125
-----------------
OFFICE EQUIPMENT (1.9%)
447,000 Pitney Bowes, Inc................ 31,066,500
-----------------
OIL - DOMESTIC (3.9%)
684,000 Ashland, Inc..................... 31,720,500
468,000 Atlantic Richfield Co............ 32,994,000
-----------------
64,714,500
-----------------
OIL INTEGRATED - INTERNATIONAL (6.0%)
538,000 Exxon Corp....................... 33,087,000
468,000 Mobil Corp....................... 32,701,500
616,000 Royal Dutch Petroleum Co. (ADR)
(Netherlands).................. 33,495,000
-----------------
99,283,500
-----------------
PAPER & FOREST PRODUCTS (3.8%)
646,000 International Paper Co........... 31,371,375
604,000 Weyerhaeuser Co.................. 31,408,000
-----------------
62,779,375
-----------------
PHOTOGRAPHY (1.9%)
409,000 Eastman Kodak Co................. 31,390,750
-----------------
RAILROADS (2.0%)
361,000 Burlington Northern Santa Fe
Corp........................... 32,444,875
-----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - DIVIDEND GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
RETAIL - DEPARTMENT STORES (1.9%)
660,000 May Department Stores
Co............................. $ 31,185,000
-----------------
RETAIL - FOOD CHAINS (1.9%)
649,000 American Stores Co............... 32,044,375
-----------------
STEEL (2.0%)
955,000 Timken Co........................ 33,962,188
-----------------
TELECOMMUNICATIONS (5.9%)
424,000 Bell Atlantic Corp............... 32,171,000
623,000 Sprint Corp...................... 32,785,375
900,000 U.S. West Communications Group,
Inc............................ 33,918,750
-----------------
98,875,125
-----------------
TOBACCO (2.0%)
743,000 Philip Morris Companies, Inc..... 32,970,625
-----------------
UTILITIES - ELECTRIC (3.8%)
680,000 FPL Group, Inc................... 31,322,500
1,445,000 Unicom Corp...................... 32,151,250
-----------------
63,473,750
-----------------
UTILITIES - GAS (0.9%)
271,300 Consolidated Natural
Gas Co......................... 14,599,330
-----------------
TOTAL COMMON STOCKS
(IDENTIFIED COST
$1,139,168,916).................. 1,596,671,768
-----------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS
- -----------
<C> <S> <C>
U.S. GOVERNMENT OBLIGATIONS (2.2%)
$ 4,000 U.S. Treasury Bond
8.00% due 11/15/21............. 4,525,600
5,000 U.S. Treasury Bond
7.125% due 02/15/23............ 5,150,300
17,000 U.S. Treasury Bond
6.25% due 08/15/23............. 15,738,600
7,000 U.S. Treasury Bond
6.00% due 02/15/26............. 6,265,700
5,000 U.S. Treasury Note
6.375% due 01/15/99............ 5,029,900
-----------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(IDENTIFIED COST $36,992,101).... 36,710,100
-----------------
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- -----------------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENTS (1.8%)
U.S. GOVERNMENT AGENCY (a) (1.8%)
$ 29,000 Federal Home Loan Mortgage Corp.
6.00% due 07/01/97 (Amortized
Cost $29,000,000).............. $ 29,000,000
-----------------
REPURCHASE AGREEMENT (0.0%)
601 The Bank of New York 5.75% due
07/01/97 (dated 06/30/97;
proceeds $601,430;
collateralized by $137,097 U.S.
Treasury Bond 12.75% due
11/15/10 valued at $192,214 and
$285,000 U.S. Treasury Note
7.875% due 08/15/01 valued at
$308,555 and $108,466 U.S.
Treasury Note 7.125% due
09/30/99 valued at $112,591)
(Identified Cost $601,334)..... 601,334
-----------------
TOTAL SHORT-TERM
INVESTMENTS
(IDENTIFIED COST
$29,601,334)..................... 29,601,334
-----------------
TOTAL INVESTMENTS
(IDENTIFIED COST
$1,205,762,351) (B)...... 100.1% 1,662,983,202
LIABILITIES IN EXCESS OF
OTHER ASSETS............. (0.1) (2,136,861)
----- -------------
NET ASSETS................. 100.0% $1,660,846,341
----- -------------
----- -------------
<FN>
- ---------------------
ADR American Depository Receipt.
(a) Security was purchased on a discount basis. The interest rate shown has
been adjusted to reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $461,733,448 and the
aggregate gross unrealized depreciation is $4,512,597, resulting in net
unrealized appreciation of $457,220,851.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - CAPITAL GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (96.1%)
BANKING (3.8%)
35,200 State Street Corp................... $ 1,628,000
38,000 Washington Mutual, Inc.............. 2,270,500
---------------
3,898,500
---------------
COMMERCIAL SERVICES (1.7%)
50,000 Affiliated Computer Services, Inc.
(Class A)*........................ 1,400,000
8,000 Stewart Enterprises, Inc. (Class
A)................................ 334,000
---------------
1,734,000
---------------
COMMUNICATIONS EQUIPMENT (2.9%)
17,600 3Com Corp.*......................... 790,900
38,600 Tellabs, Inc.*...................... 2,151,950
---------------
2,942,850
---------------
COMPUTER SERVICES (2.1%)
65,000 Sterling Commerce, Inc.*............ 2,136,875
---------------
COMPUTER SOFTWARE (6.0%)
30,000 Computer Associates International,
Inc............................... 1,670,625
26,000 Danka Business Systems PLC (ADR)
(United Kingdom).................. 1,056,250
13,500 Microsoft Corp.*.................... 1,706,906
33,000 Oracle Corp.*....................... 1,660,312
---------------
6,094,093
---------------
COMPUTERS - SYSTEMS (5.6%)
15,000 COMPAQ Computer Corp.*.............. 1,488,750
75,000 EMC Corp.*.......................... 2,925,000
21,000 SCI Systems, Inc.*.................. 1,338,750
---------------
5,752,500
---------------
CONSUMER SERVICES (1.8%)
15,000 AccuStaff, Inc.*.................... 355,312
45,000 Service Corp. International......... 1,479,375
---------------
1,834,687
---------------
DRUGS (2.9%)
30,000 Abbott Laboratories................. 2,002,500
20,000 Elan Corp. PLC (ADR) (Ireland)*..... 905,000
---------------
2,907,500
---------------
ELECTRONICS (4.6%)
22,000 Dionex Corp.*....................... 1,122,000
19,000 Hadco Corp*......................... 1,235,000
28,000 Jabil Circuit, Inc.*................ 2,334,500
---------------
4,691,500
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
ENVIRONMENTAL CONTROL (2.1%)
35,000 Newpark Resources, Inc.*............ $ 1,181,250
24,000 United Waste Systems, Inc.*......... 981,000
---------------
2,162,250
---------------
FINANCIAL - MISCELLANEOUS (11.9%)
40,500 Fannie Mae.......................... 1,766,813
80,000 Green Tree Financial Corp........... 2,850,000
20,000 Household International, Inc........ 2,348,750
70,000 MBNA Corp........................... 2,563,750
54,600 MGIC Investment Corp................ 2,617,388
---------------
12,146,701
---------------
FINANCIAL SERVICES (2.3%)
48,000 SunAmerica, Inc..................... 2,340,000
---------------
HEALTHCARE - DIVERSIFIED (5.8%)
115,000 General Nutrition Companies,
Inc.*............................. 3,205,625
70,000 Universal Health Services, Inc.
(Class B)*........................ 2,695,000
---------------
5,900,625
---------------
HOSPITAL MANAGEMENT (1.0%)
25,000 Express Scripts, Inc. (Class A)*.... 1,034,375
---------------
HOUSEHOLD FURNISHINGS & APPLIANCES (0.7%)
13,000 Ethan Allen Interiors, Inc.......... 741,000
---------------
HOUSEHOLD APPLIANCES (0.9%)
20,000 American Standard Companies,
Inc.*............................. 895,000
---------------
MANUFACTURING - DIVERSIFIED (1.9%)
28,000 Tyco International Ltd.............. 1,947,750
---------------
MEDIA GROUP (3.3%)
54,000 Clear Channel Communications,
Inc.*............................. 3,321,000
---------------
METALS & MINING (0.9%)
60,000 Miller Industries, Inc.*............ 960,000
---------------
OFFICE EQUIPMENT & SUPPLIES (2.6%)
115,000 Staples, Inc.*...................... 2,659,375
---------------
OIL DRILLING & SERVICES (6.8%)
45,000 ENSCO International, Inc.*.......... 2,373,750
105,000 Pride Petroleum Services, Inc.*..... 2,513,438
47,700 Tidewater, Inc...................... 2,098,800
---------------
6,985,988
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - CAPITAL GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
OIL EQUIPMENT & SERVICES (6.0%)
24,000 Falcon Drilling
Company, Inc.*.................... $ 1,383,000
30,000 Lomak Petroleum, Inc................ 534,375
36,000 Smith International, Inc.*.......... 2,187,000
63,000 Varco International, Inc.*.......... 2,031,750
---------------
6,136,125
---------------
PHARMACEUTICALS (2.9%)
60,000 Medicis Pharmaceutical Corp. (Class
A)*............................... 2,985,000
---------------
POLLUTION CONTROL (2.0%)
75,000 US Filter Corp.*.................... 2,043,750
---------------
RETAIL - DEPARTMENT STORES (2.8%)
75,000 Dollar General Corp................. 2,812,500
---------------
RETAIL - DRUG STORES (1.9%)
36,000 Walgreen Co......................... 1,930,500
---------------
RETAIL - FOOD CHAINS (5.2%)
90,000 Kroger Co.*......................... 2,610,000
58,800 Safeway, Inc.*...................... 2,712,150
---------------
5,322,150
---------------
RETAIL - SPECIALTY (1.3%)
37,500 Consolidated Stores Corp.*.......... 1,303,125
---------------
UTILITIES - ELECTRIC (2.4%)
34,000 AES Corp.*.......................... 2,405,500
---------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $78,780,052)....... 98,025,219
---------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS
- -----------
<C> <S> <C>
SHORT-TERM INVESTMENTS (5.2%)
U.S. GOVERNMENT AGENCY (a) (4.4%)
$ 4,500 Federal Home Loan Mortgage Corp.
6.00% due 07/01/97 (Amortized Cost
$4,500,000)....................... 4,500,000
---------------
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ------------------------------------------------------------------
<C> <S> <C>
REPURCHASE AGREEMENT (0.8%)
$ 826 The Bank of New York 5.75% due
07/01/97 (dated 06/30/97; proceeds
$825,716; collateralized by
$377,861 U.S. Treasury Bond 8.25%
due 05/15/05 valued at $398,939;
$383,000 U.S. Treasury Bond 7.25%
due 05/15/16 valued at $402,329;
and $38,158 U.S. Treasury Note
9.25% due 08/15/98 valued at
$40,828) (Identified Cost
$825,584)......................... $ 825,584
---------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $5,325,584)........ 5,325,584
---------------
TOTAL INVESTMENTS
(IDENTIFIED COST
$84,105,636) (B).......... 101.3% 103,350,803
LIABILITIES IN EXCESS OF
OTHER ASSETS.............. (1.3) (1,347,150)
----- ------------
NET ASSETS.................. 100.0% $102,003,653
----- ------------
----- ------------
<FN>
- ---------------------
* Non-income producing security.
ADR American Depository Receipt.
(a) Security was purchased on a discount basis. The interest rate shown has
been adjusted to reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $19,803,994 and the
aggregate gross unrealized depreciation is $558,827, resulting in net
unrealized appreciation of $19,245,167.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - GLOBAL DIVIDEND GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS (96.8%)
AUSTRALIA (1.5%)
BANKING
305,000 Australia & New Zealand Banking
Group Ltd....................... $ 2,275,797
---------------
BUILDING & CONSTRUCTION
602,000 Pioneer International Ltd......... 2,323,085
---------------
PAPER & FOREST PRODUCTS
336,000 Amcor Ltd......................... 2,228,540
---------------
TOTAL AUSTRALIA................... 6,827,422
---------------
CANADA (2.9%)
BANKS - COMMERCIAL
84,800 Toronto Dominion Bank............. 2,512,911
---------------
NATURAL GAS
81,900 IPL Energy, Inc................... 2,738,505
125,000 TransCanada Pipelines Ltd......... 2,513,223
---------------
5,251,728
---------------
OIL RELATED
49,000 Imperial Oil Ltd.................. 2,511,774
---------------
TELECOMMUNICATIONS
93,600 BCE, Inc.......................... 2,604,144
---------------
TOTAL CANADA...................... 12,880,557
---------------
FRANCE (6.8%)
BANKING
23,900 Societe Generale.................. 2,666,893
---------------
BUILDING & CONSTRUCTION
40,000 Lafarge S.A....................... 2,486,860
---------------
FINANCIAL SERVICES
6,200 Societe Eurafrance S.A............ 2,541,632
---------------
FOODS & BEVERAGES
17,200 Eridania Beghin-Say S.A........... 2,574,631
---------------
MISCELLANEOUS MATERIALS & COMMODITIES
18,500 Compagnie de Saint Gobain......... 2,696,848
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
MULTI-INDUSTRY
9,300 Compagnie Generale d'Industrie et
de Participations............... $ 2,641,821
64,961 Worms et Compagnie................ 3,845,350
---------------
6,487,171
---------------
OIL INTEGRATED - INTERNATIONAL
24,400 Elf Aquitaine S.A................. 2,631,377
27,700 Total S.A. (B Shares)............. 2,798,789
---------------
5,430,166
---------------
TELECOMMUNICATIONS
21,300 Alcatel Alsthom................... 2,666,621
---------------
TELEVISION
27,000 Societe Television Francaise 1.... 2,411,165
---------------
TOTAL FRANCE...................... 29,961,987
---------------
GERMANY (6.5%)
BANKING
74,500 Commerzbank AG.................... 2,109,659
---------------
BUILDING & CONSTRUCTION
49,000 Bilfinger & Berger Bau AG......... 1,994,268
---------------
CHEMICALS
57,000 BASF AG........................... 2,105,847
57,000 Bayer AG.......................... 2,189,819
---------------
4,295,666
---------------
ELECTRICAL EQUIPMENT
37,300 Siemens AG........................ 2,214,053
---------------
HEALTH & PERSONAL CARE
51,000 Douglas Holding AG................ 2,031,814
---------------
MACHINERY - DIVERSIFIED
7,200 M.A.N. AG......................... 2,216,337
---------------
MULTI-INDUSTRY
7,000 Preussag AG....................... 2,048,438
49,900 RWE AG............................ 2,145,314
4,500 Viag AG........................... 2,045,572
---------------
6,239,324
---------------
RETAIL - DEPARTMENT STORES
5,800 Karstadt AG....................... 2,064,660
---------------
STEEL & IRON
8,500 Thyssen AG........................ 2,012,324
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - GLOBAL DIVIDEND GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
TEXTILES - APPAREL
1,150 Hugo Boss AG (Pref.).............. $ 1,384,351
---------------
UTILITIES - ELECTRIC
37,800 VEBA AG........................... 2,123,474
---------------
TOTAL GERMANY..................... 28,685,930
---------------
HONG KONG (4.0%)
BANKING
118,500 HSBC Holdings PLC................. 3,564,255
---------------
CONGLOMERATES
396,000 Swire Pacific Ltd. (Class A)...... 3,565,610
---------------
REAL ESTATE
351,000 Cheung Kong (Holdings) Ltd........ 3,466,275
---------------
TELECOMMUNICATIONS
1,558,800 Hong Kong Telecommunications
Ltd............................. 3,722,688
---------------
UTILITIES - ELECTRIC
859,000 Hong Kong Electric Holdings
Ltd............................. 3,459,730
---------------
TOTAL HONG KONG................... 17,778,558
---------------
ITALY (4.0%)
FINANCIAL SERVICES
372,000 Istituto Mobiliare Italiano SpA... 3,354,116
---------------
OIL & GAS PRODUCTS
640,000 Ente Nazionale Idrocarburi SpA.... 3,630,149
---------------
TELECOMMUNICATIONS
600,000 Sirti SpA......................... 3,466,910
1,720,000 Telecom Italia SpA................ 3,410,808
---------------
6,877,718
---------------
TEXTILES - APPAREL
231,920 Benetton Group SpA................ 3,710,666
---------------
TOTAL ITALY....................... 17,572,649
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
JAPAN (24.4%)
AUTOMOTIVE
186,000 Honda Motor Co.................... $ 5,599,476
181,000 Toyota Motor Corp................. 5,338,394
---------------
10,937,870
---------------
BREWERS
526,000 Kirin Brewery Co., Ltd............ 5,461,955
---------------
BUILDING & CONSTRUCTION
540,000 Sekisui House Ltd................. 5,465,969
---------------
COMPUTER SERVICES
583,000 NCR Japan Limited................. 4,527,661
---------------
ELECTRONICS & ELECTRICAL
475,000 Hitachi, Ltd...................... 5,305,410
69,000 Kyocera Corp...................... 5,479,058
271,000 Matsushita Electric Industrial
Co., Ltd........................ 5,462,565
487,000 Matsushita Electric Works......... 5,524,433
941,000 Mitsubishi Electric Corp.......... 5,263,359
367,000 NEC Corp.......................... 5,123,909
400,000 Sharp Corp........................ 5,514,834
62,000 Sony Corp......................... 5,404,712
75,000 TDK Corp.......................... 5,503,927
---------------
48,582,207
---------------
ENTERTAINMENT & LEISURE TIME
64,000 Nintendo Co., Ltd................. 5,350,087
---------------
MACHINERY - DIVERSIFIED
713,000 Mitsubishi Heavy Industries,
Ltd............................. 5,468,822
---------------
PHARMACEUTICALS
207,000 Taisho Pharmaceutical Co., Ltd.... 5,581,414
195,000 Takeda Chemical Industries........ 5,479,058
---------------
11,060,472
---------------
TOBACCO
690 Japan Tobacco, Inc................ 5,448,953
---------------
TRANSPORTATION
442,000 Yamato Transport Co.
Ltd............................. 5,515,358
---------------
TOTAL JAPAN....................... 107,819,354
---------------
MALAYSIA (1.4%)
BANKING
330,000 AMMB Holdings Berhad.............. 2,052,694
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - GLOBAL DIVIDEND GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
BUILDING & CONSTRUCTION
285,000 United Engineers (Malaysia)
Berhad.......................... $ 2,055,072
---------------
CONGLOMERATES
635,000 Sime Darby Berhad................. 2,113,312
---------------
TOTAL MALAYSIA.................... 6,221,078
---------------
NETHERLANDS (3.0%)
APPLIANCES & HOUSEHOLD DURABLES
24,900 Philips Electronics NV............ 1,782,556
---------------
BANKING
80,800 ABN-AMRO Holding NV............... 1,505,743
---------------
CHEMICALS
16,500 DSM NV............................ 1,640,759
---------------
INSURANCE
36,950 Fortis Amev NV.................... 1,644,313
---------------
METALS
31,000 Koninklijke Hoogovens NV.......... 1,726,782
---------------
OIL
30,400 Royal Dutch Petroleum Co.......... 1,580,366
---------------
TELECOMMUNICATIONS
41,700 Koninklijke PTT Nederland NV...... 1,634,878
---------------
TRANSPORTATION
55,500 KLM Royal Dutch Air Lines NV...... 1,709,649
---------------
TOTAL NETHERLANDS................. 13,225,046
---------------
SPAIN (0.7%)
OIL RELATED
26,000 Repsol S.A........................ 1,098,170
---------------
UTILITIES - ELECTRIC
25,000 Empresa Nacional de Electricidad,
S.A............................. 2,096,610
---------------
TOTAL SPAIN....................... 3,194,780
---------------
SWITZERLAND (2.0%)
BANKING
11,400 Swiss Bank Corp................... 3,047,022
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
FOODS & BEVERAGES
2,290 Nestle S.A........................ $ 3,018,850
---------------
PHARMACEUTICALS
1,860 Novartis AG-Bearer................ 2,968,871
---------------
TOTAL SWITZERLAND................. 9,034,743
---------------
UNITED KINGDOM (9.9%)
BANKING
208,000 National Westminster Bank PLC..... 2,794,854
282,000 Royal Bank of Scotland Group
PLC............................. 2,637,174
---------------
5,432,028
---------------
BREWERS
224,000 Bass PLC.......................... 2,732,155
---------------
ENERGY
135,000 Energy Group PLC.................. 1,439,942
---------------
FOODS & BEVERAGES
945,000 Hillsdown Holdings PLC............ 2,665,354
---------------
LEISURE
425,000 Rank Group PLC.................... 2,690,896
---------------
MULTI-INDUSTRY
235,000 Hanson PLC........................ 1,165,299
---------------
NATURAL GAS
740,000 BG PLC............................ 2,708,992
---------------
RETAIL - MERCHANDISING
445,000 Tesco PLC......................... 2,747,181
---------------
STEEL & IRON
1,070,000 British Steel PLC................. 2,661,818
---------------
TELECOMMUNICATIONS
352,000 British Telecommunications PLC.... 2,612,347
---------------
TOBACCO
308,000 B.A.T. Industries PLC............. 2,754,752
---------------
UTILITIES - ELECTRIC
731,000 National Grid Group PLC........... 2,639,553
325,000 National Power PLC................ 2,822,976
407,000 Scottish Hydro-Electric PLC....... 2,810,579
---------------
8,273,108
---------------
UTILITIES - WATER
210,000 Hyder PLC......................... 2,830,464
121,500 Hyder PLC (Pref.)................. 215,317
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - GLOBAL DIVIDEND GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
219,000 Severn Trent PLC.................. $ 2,838,801
---------------
5,884,582
---------------
TOTAL UNITED KINGDOM.............. 43,768,454
---------------
UNITED STATES (29.7%)
AEROSPACE & DEFENSE
75,000 Northrop Grumman Corp............. 6,585,937
---------------
AUTOMOTIVE
167,500 Ford Motor Co..................... 6,323,125
---------------
BANKS
99,000 BankAmerica Corp.................. 6,391,687
118,500 KeyCorp........................... 6,621,187
---------------
13,012,874
---------------
CHEMICALS
74,000 Dow Chemical Co................... 6,447,250
---------------
COMPUTERS - SYSTEMS
72,500 International Business Machines
Corp............................ 6,538,594
---------------
CONGLOMERATES
65,100 Minnesota Mining & Manufacturing
Co.............................. 6,640,200
148,700 Tenneco, Inc...................... 6,719,381
---------------
13,359,581
---------------
MACHINERY - DIVERSIFIED
119,500 Deere & Co........................ 6,557,562
---------------
METALS & MINING
79,100 Phelps Dodge Corp................. 6,738,331
---------------
OIL - DOMESTIC
143,700 Ashland, Inc...................... 6,664,088
---------------
OIL INTEGRATED - INTERNATIONAL
87,900 Chevron Corp...................... 6,499,106
---------------
PAPER & FOREST PRODUCTS
132,000 International Paper Co............ 6,410,250
---------------
PHARMACEUTICALS
81,200 Bristol-Myers Squibb Co........... 6,577,200
---------------
RETAIL
125,000 Dayton-Hudson Corp................ 6,648,438
---------------
TELECOMMUNICATIONS
183,900 AT&T Corp......................... 6,447,994
129,700 Sprint Corp....................... 6,825,463
---------------
13,273,457
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
TIRE & RUBBER GOODS
107,200 Goodyear Tire & Rubber Co......... $ 6,787,100
---------------
TOBACCO
152,300 Philip Morris Companies, Inc...... 6,758,313
---------------
UTILITIES - ELECTRIC
180,000 GPU, Inc.......................... 6,457,500
---------------
TOTAL UNITED STATES............... 131,638,706
---------------
TOTAL COMMON AND PREFERRED STOCKS
(IDENTIFIED COST $353,573,570).... 428,609,264
---------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS
- -------------
<C> <S> <C>
SHORT-TERM INVESTMENT (a) (3.7%)
U.S. GOVERNMENT AGENCY
$ 16,500 Federal Home Loan Mortgage Corp.
6.00% due 07/01/97 (Amortized
Cost $16,500,000)............... 16,500,000
---------------
TOTAL INVESTMENTS
(IDENTIFIED COST
$370,073,570) (B)......... 100.5% 445,109,264
LIABILITIES IN EXCESS OF
CASH
AND OTHER ASSETS.......... (0.5) (2,150,592)
----- ------------
NET ASSETS.................. 100.0% $442,958,672
----- ------------
----- ------------
<FN>
- ---------------------
(a) Security was purchased on a discount basis. The interest rate shown has
been adjusted to reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $78,819,776 and the
aggregate gross unrealized depreciation is $3,784,082, resulting in net
unrealized appreciation of $75,035,694.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - GLOBAL DIVIDEND GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT JUNE 30, 1997:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS IN EXCHANGE DELIVERY APPRECIATION
TO RECEIVE FOR DATE (DEPRECIATION)
- -------------------------------------------------------------------
<S> <C> <C> <C>
$ 117,449 Y 13,469,014 07/01/97 $ (82)
L 227,784 $ 379,454 07/01/97 (421)
$ 232,320 ITL 391,495,935 07/01/97 1,607
ESP 179,264,100 $ 1,223,395 07/01/97 (8,045)
Y 23,366,904 $ 204,453 07/02/97 (553)
$ 96,420 CHF 140,869 07/02/97 --
L 109,058 $ 181,857 07/02/97 (384)
ESP 164,611,824 $ 1,118,591 07/03/97 (2,579)
Y 73,867,962 $ 645,851 07/03/97 (1,279)
L 113,564 $ 188,849 07/03/97 123
DEM 336,500 $ 193,150 07/03/97 (258)
L 33,880 $ 64,758 07/03/97 (61)
$ 72,128 HKD 558,880 07/07/97 (19)
$ 112,676 FRF 656,043 07/31/97 1,083
$ 226,920 FRF 1,328,120 07/31/97 1,007
$ 60,112 FRF 352,626 07/31/97 130
-------
Net unrealized depreciation.................. $ (9,731)
-------
-------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - GLOBAL DIVIDEND GROWTH
SUMMARY OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- ------------------------------------------------------------------
<S> <C> <C>
Aerospace & Defense..................... $ 6,585,937 1.5%
Appliances & Household Durables......... 1,782,556 0.4
Automotive.............................. 17,260,995 3.9
Banking................................. 22,654,091 5.1
Banks................................... 13,012,874 2.9
Banks - Commercial...................... 2,512,911 0.6
Brewers................................. 8,194,110 1.8
Building & Construction................. 14,325,254 3.2
Chemicals............................... 12,383,675 2.8
Computer Services....................... 4,527,661 1.0
Computers - Systems..................... 6,538,594 1.5
Conglomerates........................... 19,038,503 4.3
Electrical Equipment.................... 2,214,053 0.5
Electronics & Electrical................ 48,582,207 11.0
Energy.................................. 1,439,942 0.3
Entertainment & Leisure Time............ 5,350,087 1.2
Financial Services...................... 5,895,748 1.3
Foods & Beverages....................... 8,258,835 1.9
Health & Personal Care.................. 2,031,814 0.5
Insurance............................... 1,644,313 0.4
Leisure................................. 2,690,896 0.6
Machinery - Diversified................. 14,242,721 3.2
Metals.................................. 1,726,782 0.4
Metals & Mining......................... 6,738,331 1.5
Miscellaneous Materials & Commodities... 2,696,848 0.6
Multi-Industry.......................... 13,891,794 3.1
Natural Gas............................. 7,960,720 1.8
Oil..................................... 1,580,366 0.4
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- ------------------------------------------------------------------
<S> <C> <C>
Oil & Gas Products...................... $ 3,630,149 0.8%
Oil - Domestic.......................... 6,664,088 1.5
Oil Integrated - International.......... 11,929,272 2.7
Oil Related............................. 3,609,944 0.8
Paper & Forest Products................. 8,638,790 2.0
Pharmaceuticals......................... 20,606,543 4.7
Real Estate............................. 3,466,275 0.8
Retail.................................. 6,648,438 1.5
Retail - Department Stores.............. 2,064,660 0.5
Retail - Merchandising.................. 2,747,181 0.6
Steel & Iron............................ 4,674,142 1.1
Telecommunications...................... 33,391,853 7.5
Television.............................. 2,411,165 0.5
Textiles - Apparel...................... 5,095,017 1.2
Tire & Rubber Goods..................... 6,787,100 1.5
Tobacco................................. 14,962,018 3.4
Transportation.......................... 7,225,007 1.6
U.S. Government Agency.................. 16,500,000 3.7
Utilities - Electric.................... 22,410,422 5.1
Utilities - Water....................... 5,884,582 1.3
------------ -----
$445,109,264 100.5%
------------ -----
------------ -----
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
- ------------------------------------------------------------------
<S> <C> <C>
Common Stocks........................... $427,009,596 96.4%
Preferred Stocks........................ 1,599,668 0.4
Short-Term Investment................... 16,500,000 3.7
------------ -----
$445,109,264 100.5%
------------ -----
------------ -----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - EUROPEAN GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS (97.4%)
BELGIUM (0.3%)
RETAIL
21,389 G.I.B. Holdings Ltd................ $ 1,021,891
---------------
DENMARK (2.2%)
AIR TRANSPORT
33,093 Kobenhavns Lufthavne AS............ 3,510,332
---------------
PHARMACEUTICALS
44,800 Novo-Nordisk AS (Series B)......... 4,884,378
---------------
TOTAL DENMARK...................... 8,394,710
---------------
FINLAND (1.1%)
MACHINERY
4,791 Rauma Oy........................... 109,697
---------------
PAPER PRODUCTS
182,000 UPM-Kymmene Oy..................... 4,202,182
---------------
TOTAL FINLAND...................... 4,311,879
---------------
FRANCE (14.4%)
BANKING
108,450 Banque Nationale de Paris.......... 4,467,943
---------------
BUILDING MATERIALS
16,630 IMETAL S.A......................... 2,203,604
---------------
ELECTRICAL EQUIPMENT
38,750 Alcatel Alsthom.................... 4,851,248
---------------
ELECTRONICS - SEMICONDUCTORS
62,300 SGS-Thomson Microelectronics NV*... 4,917,110
---------------
FINANCIAL SERVICES
27,250 Cetelem Groupe..................... 3,425,428
---------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
112,000 SEITA.............................. 3,543,520
17,895 Societe BIC S.A.................... 2,925,223
---------------
6,468,743
---------------
INSURANCE
89,100 AXA................................ 5,539,480
18,922 Scor............................... 761,528
---------------
6,301,008
---------------
OIL RELATED
42,700 Elf Aquitaine S.A.................. 4,604,909
42,000 Total S.A. (B Shares).............. 4,243,651
---------------
8,848,560
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
RETAIL
4,646 Carrefour Supermarche.............. $ 3,372,932
---------------
STEEL & IRON
303,790 Usinor Sacilor..................... 5,477,511
---------------
TIRE & RUBBER GOODS
59,700 Michelin (B Shares)................ 3,583,686
---------------
TOTAL FRANCE....................... 53,917,773
---------------
GERMANY (8.9%)
AUTOMOTIVE
6,045 Bayerische Motoren Werke (BMW)
AG............................... 5,000,249
12,770 Volkswagen AG...................... 9,787,039
---------------
14,787,288
---------------
CHEMICALS
89,000 BASF AG............................ 3,288,077
82,800 Hoechst AG......................... 3,511,347
28,490 SGL Carbon AG...................... 3,899,921
---------------
10,699,345
---------------
HEALTH & PERSONAL CARE
81 Rhoen-Klinikum AG.................. 10,679
103 Rhoen-Klinikum AG (Pref.).......... 13,167
---------------
23,846
---------------
PHARMACEUTICALS
30,500 Gehe AG............................ 2,080,539
---------------
RETAIL - SPECIALTY APPAREL
18,475 Adidas AG.......................... 2,043,952
---------------
UTILITIES
68,400 VEBA AG............................ 3,842,476
---------------
TOTAL GERMANY...................... 33,477,446
---------------
ITALY (4.8%)
HOUSEHOLD FURNISHINGS & APPLIANCES
116,400 Industrie Natuzzi SpA (ADR)........ 2,982,750
---------------
OIL & GAS PRODUCTS
614,550 Ente Nazionale Idrocarburi SpA..... 3,485,794
---------------
RETAIL - SPECIALTY APPAREL
15,000 Fila Holding SpA (ADR)............. 501,562
---------------
TELECOMMUNICATIONS
1,070,000 Stet Societa Finanziaria Telefonica
SpA.............................. 6,242,560
1,465,850 Telecom Italia Mobile SpA.......... 4,751,120
---------------
10,993,680
---------------
TOTAL ITALY........................ 17,963,786
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - EUROPEAN GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
NETHERLANDS (12.1%)
CHEMICALS
30,560 Akzo Nobel NV...................... $ 4,185,662
---------------
ELECTRICAL EQUIPMENT
95,000 Philips Electronics NV............. 6,800,917
---------------
ELECTRONICS - SEMICONDUCTORS
50,600 ASM Lithography Holding NV*........ 2,924,185
---------------
INSURANCE
63,639 Aegon NV........................... 4,439,177
125,698 ING Groep NV....................... 5,792,092
---------------
10,231,269
---------------
MERCHANDISING
37,600 Gucci Group NV..................... 2,450,509
---------------
PUBLISHING
121,500 Elsevier NV........................ 2,029,124
241,000 Ver Ned Uitgev Ver
Bezit NV......................... 5,325,560
27,143 Wolters Kluwer NV.................. 3,303,043
---------------
10,657,727
---------------
RECORD & TAPE DISTRIBUTION
40,500 PolyGram NV........................ 2,123,982
---------------
RETAIL
70,895 Koninklijke Ahold NV............... 5,977,705
---------------
TOTAL NETHERLANDS.................. 45,351,956
---------------
SPAIN (6.6%)
BANKS
85,986 Banco Bilbao Vizcaya S.A........... 6,977,983
22,031 Banco Popular Espanol S.A.......... 5,391,994
---------------
12,369,977
---------------
MISCELLANEOUS
28,160 Corporacion Financiera Alba........ 3,568,206
---------------
TELECOMMUNICATIONS
221,855 Telefonica de Espana S.A........... 6,407,473
---------------
UTILITIES - ELECTRIC
27,800 Empresa Nacional de Electricidad
S.A. (Endesa).................... 2,331,430
---------------
TOTAL SPAIN........................ 24,677,086
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
SWEDEN (8.2%)
AUTO TRUCKS & PARTS
57,000 Scania AB (A Shares)............... $ 1,735,441
80,000 Scania AB (B Shares)............... 2,446,071
---------------
4,181,512
---------------
BUSINESS SERVICES
100,000 Assa Abloy AB (Series B)........... 2,047,030
10,000 Assa Abloy AB
Rfd 01/01/97*.................... 200,816
119,000 Securitas AB
(Series "B" Free)................ 3,361,016
---------------
5,608,862
---------------
INSURANCE
129,181 Scandia Forsakrings AB............. 4,769,915
---------------
PAPER PRODUCTS
145,000 Stora Kopparbergs Bergslags
Aktiebolag (A Shares)............ 2,348,254
---------------
PHARMACEUTICALS
105,600 Astra AB (A Shares)................ 1,970,124
202,667 Astra AB (B Shares)................ 3,610,373
---------------
5,580,497
---------------
RETAIL
74,900 Hennes & Mauritz AB (B Shares)..... 2,687,996
---------------
TELECOMMUNICATION EQUIPMENT
138,900 Ericsson (L.M.)
Telephone Co. AB
(Series "B" Free)................ 5,479,698
---------------
TOTAL SWEDEN....................... 30,656,734
---------------
SWITZERLAND (6.8%)
FOODS & BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
3,385 Nestle S.A......................... 4,462,361
---------------
MULTI-INDUSTRY
3,110 ABB AG - Bearer.................... 4,704,381
---------------
PHARMACEUTICALS
4,850 Novartis AG........................ 7,748,049
1,000 Novartis AG - Bearer............... 1,596,167
772 Roche Holdings AG.................. 6,977,591
---------------
16,321,807
---------------
TOTAL SWITZERLAND.................. 25,488,549
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - EUROPEAN GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
UNITED KINGDOM (32.0%)
AEROSPACE & DEFENSE
133,333 British Aerospace PLC.............. $ 2,965,241
104,000 Smiths Industries PLC.............. 1,329,070
---------------
4,294,311
---------------
AIR TRANSPORT
235,500 British Airways PLC................ 2,682,364
---------------
AUTOMOTIVE
483,678 BBA Group PLC...................... 2,849,134
810,000 Rolls-Royce PLC.................... 3,086,554
---------------
5,935,688
---------------
BANKING
225,000 Abbey National PLC................. 3,070,080
106,000 Barclays Bank PLC.................. 2,102,497
290,000 Lloyds TSB Group PLC............... 2,977,395
145,000 National Westminster Bank PLC...... 1,948,336
---------------
10,098,308
---------------
BREWERS
145,000 Scottish & Newcastle Breweries
PLC.............................. 1,558,669
325,000 Vaux Group PLC..................... 1,465,568
---------------
3,024,237
---------------
BROADCAST MEDIA
160,000 Flextech PLC*...................... 1,730,560
---------------
BUILDING & CONSTRUCTION
313,000 Blue Circle Industries PLC......... 2,234,369
207,400 CRH PLC............................ 2,170,765
502,000 Redland PLC........................ 2,840,115
---------------
7,245,249
---------------
BUSINESS SERVICES
196,000 Reuters Holdings PLC............... 2,064,492
---------------
CHEMICALS
306,000 Albright & Wilson PLC.............. 814,694
215,000 Courtaulds PLC..................... 1,212,806
---------------
2,027,500
---------------
COMPUTER SOFTWARE & SERVICES
200,000 Sage Group (The) PLC............... 2,179,840
153,454 SEMA Group PLC..................... 3,166,308
---------------
5,346,148
---------------
COMPUTERS
286,869 Amstrad PLC........................ 1,355,674
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
CONGLOMERATES
435,000 BTR PLC............................ $ 1,487,491
415,000 Tomkins PLC........................ 1,795,456
---------------
3,282,947
---------------
ELECTRICAL EQUIPMENT
210,000 General Electric Co. PLC........... 1,254,490
306,363 The BICC Group PLC................. 902,325
---------------
2,156,815
---------------
FOOD PROCESSING
275,000 Associated British
Foods PLC........................ 2,365,792
---------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
94,261 B.A.T. Industries PLC.............. 843,070
150,000 Grand Metropolitan PLC............. 1,442,688
273,000 Guinness PLC....................... 2,671,119
177,500 Tate & Lyle PLC.................... 1,318,782
---------------
6,275,659
---------------
FOREST PRODUCTS, PAPER & PACKING
206,000 De La Rue PLC...................... 1,278,584
---------------
HEALTH & PERSONAL CARE
700,000 London International Group PLC..... 2,003,456
---------------
INSURANCE
55,000 Britannic Assurance PLC............ 741,312
123,057 Commercial Union PLC............... 1,293,103
242,200 Prudential Corp. PLC............... 2,365,410
327,271 Royal & Sun Alliance Insurance
Group PLC........................ 2,417,930
---------------
6,817,755
---------------
LEISURE
169,000 Granada Group PLC.................. 2,221,606
405,000 Ladbroke Group PLC................. 1,590,451
428,000 Rank Group PLC..................... 2,709,891
---------------
6,521,948
---------------
MISCELLANEOUS
274,000 Vendome Luxury
Group PLC (Units)++.............. 2,038,034
---------------
OIL RELATED
794,000 Lasmo PLC.......................... 3,461,586
939,000 Shell Transport & Trading Co.
PLC.............................. 6,406,234
---------------
9,867,820
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - EUROPEAN GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
PHARMACEUTICALS
191,810 British Biotech PLC*............... $ 718,137
319,100 Glaxo Wellcome PLC................. 6,597,456
554,166 Medeva PLC......................... 2,369,880
---------------
9,685,473
---------------
PUBLISHING - NEWSPAPER
85,490 United News & Media PLC............ 990,809
---------------
REAL ESTATE
203,200 Hammerson PLC...................... 1,576,507
---------------
RETAIL
145,200 Great Universal Stores PLC......... 1,472,630
247,000 Morrison (W.M.) Supermarkets PLC... 645,283
214,000 Next PLC........................... 2,421,453
88,533 W.H. Smith Group PLC (Class A)..... 531,821
---------------
5,071,187
---------------
TELECOMMUNICATIONS
979,700 British Telecommunications PLC..... 7,270,785
474,000 General Cable PLC*................. 1,285,640
550,635 Securicor PLC...................... 2,611,331
180,000 Vodafone Group PLC................. 877,594
---------------
12,045,350
---------------
UTILITIES - ELECTRIC
240,000 National Power PLC................. 2,084,659
---------------
TOTAL UNITED KINGDOM............... 119,867,326
---------------
TOTAL COMMON AND PREFERRED STOCKS
(IDENTIFIED COST
$273,906,874)...................... 365,129,136
---------------
</TABLE>
<TABLE>
<CAPTION>
CURRENCY
AMOUNT IN
THOUSANDS
- -----------
<C> <S> <C>
PURCHASED PUT OPTION ON FOREIGN CURRENCY (0.5%)
DEM 235 July 1, 1997/DEM 1.6026 (Identified
Cost $451,200)................... 1,851,800
---------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- -----------------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENT (a) (2.7%)
U.S. GOVERNMENT AGENCY
$ 10,000 Federal Home Loan Mortgage Corp.
6.00% due 07/01/97 (Amortized
Cost $10,000,000)................ $ 10,000,000
---------------
TOTAL INVESTMENTS
(IDENTIFIED COST
$284,358,074) (B)......... 100.6% 376,980,936
LIABILITIES IN EXCESS OF
CASH
AND OTHER ASSETS.......... (0.6) (2,373,224)
----- ------------
NET ASSETS.................. 100.0% $374,607,712
----- ------------
----- ------------
<FN>
- ---------------------
ADR American Depository Receipt.
* Non-income producing security.
++ Consists of more than one class of securities traded together as a unit;
stock with attached warrants.
(a) Security was purchased on a discount basis. The interest rate shown has
been adjusted to reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $97,893,706 and the
aggregate gross unrealized depreciation is $5,270,844, resulting in net
unrealized appreciation of $92,622,862.
</TABLE>
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT JUNE 30, 1997:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS TO IN EXCHANGE DELIVERY APPRECIATION
RECEIVE FOR DATE (DEPRECIATION)
- -------------------------------------------------------------------
<S> <C> <C> <C>
ESP 199,613,764 $ 1,360,045 07/01/97 $ (6,731)
NLG 1,605,623 $ 821,417 07/01/97 (3,890)
$ 218,856 L 131,248 07/01/97 459
L 274,450 $ 457,151 07/03/97 (467)
$ 274,627 FRF 1,601,596 07/31/97 2,196
-------
Net unrealized depreciation.................. $ (8,433)
-------
-------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - EUROPEAN GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- ------------------------------------------------------------------
<S> <C> <C>
Aerospace & Defense..................... $ 4,294,311 1.1%
Air Transport........................... 6,192,696 1.7
Auto Trucks & Parts..................... 4,181,512 1.1
Automotive.............................. 20,722,976 5.5
Banking................................. 14,566,251 3.9
Banks................................... 12,369,977 3.3
Brewers................................. 3,024,237 0.8
Broadcast Media......................... 1,730,560 0.5
Building & Construction................. 7,245,249 1.9
Building Materials...................... 2,203,604 0.6
Business Services....................... 7,673,354 2.0
Chemicals............................... 16,912,507 4.5
Computer Software
& Services............................. 5,346,148 1.4
Computers............................... 1,355,674 0.4
Conglomerates........................... 3,282,947 0.9
Currency Option......................... 1,851,800 0.5
Electrical Equipment.................... 13,808,980 3.7
Electronics -
Semiconductors......................... 7,841,295 2.1
Financial Services...................... 3,425,428 0.9
Food Processing......................... 2,365,792 0.6
Food, Beverage, Tobacco & Household
Products............................... 17,206,763 4.6
Forest Products, Paper & Packing........ 1,278,584 0.3
Health & Personal Care.................. 2,027,302 0.5
Household Furnishings & Appliances...... 2,982,750 0.8
Insurance............................... 28,119,947 7.5
Leisure................................. 6,521,948 1.7
Machinery............................... 109,697 0.0
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- ------------------------------------------------------------------
<S> <C> <C>
Merchandising........................... $ 2,450,509 0.7%
Miscellaneous........................... 5,606,240 1.5
Multi-Industry.......................... 4,704,381 1.3
Oil & Gas Products...................... 3,485,794 0.9
Oil Related............................. 18,716,380 5.0
Paper Products.......................... 6,550,436 1.7
Pharmaceuticals......................... 38,552,694 10.3
Publishing.............................. 10,657,727 2.8
Publishing - Newspaper.................. 990,809 0.3
Real Estate............................. 1,576,507 0.4
Record & Tape Distribution.............. 2,123,982 0.6
Retail.................................. 18,131,711 4.8
Retail - Specialty Apparel.............. 2,545,514 0.7
Steel & Iron............................ 5,477,511 1.5
Telecommunication
Equipment.............................. 5,479,698 1.5
Telecommunications...................... 29,446,503 7.9
Tire & Rubber Goods..................... 3,583,686 1.0
U.S. Government Agency.................. 10,000,000 2.7
Utilities............................... 3,842,476 1.0
Utilities - Electric.................... 4,416,089 1.2
------------ -----
$376,980,936 100.6%
------------ -----
------------ -----
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
- ------------------------------------------------------------------
<S> <C> <C>
Common Stocks........................... $365,115,969 97.4%
Currency Option......................... 1,851,800 0.5
Preferred Stocks........................ 13,167 0.0
Short-Term Investment................... 10,000,000 2.7
------------ -----
$376,980,936 100.6%
------------ -----
------------ -----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - PACIFIC GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS, WARRANTS, RIGHTS AND
BONDS (99.0%)
AUSTRALIA (4.9%)
BUILDING & CONSTRUCTION
210,000 Boral, Ltd...................... $ 660,015
---------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
204,000 Fosters Brewing Group Ltd.
(New)......................... 378,237
---------------
FOODS & BEVERAGES
440,000 Googman Fielder Wattie Ltd...... 646,675
---------------
MANUFACTURING - DIVERSIFIED
240,000 Pacific Dunlop Ltd.............. 709,081
---------------
METALS & MINING
60,000 Broken Hill Proprietary Co.
Ltd........................... 881,060
43,000 CRA Ltd......................... 731,798
404,000 M.I.M. Holdings, Ltd............ 596,810
195,000 North Ltd....................... 742,206
---------------
2,951,874
---------------
OIL RELATED
112,500 Santos, Ltd..................... 472,287
50,000 Woodside Petroleum Ltd.......... 429,609
---------------
901,896
---------------
RETAIL STORES
100,000 Coles Myer Ltd.................. 519,299
---------------
TOTAL AUSTRALIA................. 6,767,077
---------------
CHINA (0.7%)
AUTOMOTIVE
534,000 Qingling Motors Co.............. 275,737
---------------
MACHINERY
138,000 First Tractor Co. Ltd.*......... 90,854
---------------
STEEL
162,000 Bengang Steel Plates Co., Ltd.
(B Shares)*................... 49,772
---------------
UTILITIES
12,000 Huaneng Power International,
Inc. (Class N) (ADR)*......... 306,000
25,000 Shandong Huaneng Power Co., Ltd.
(ADR)......................... 268,750
---------------
574,750
---------------
TOTAL CHINA..................... 991,113
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------
<C> <S> <C>
HONG KONG (32.1%)
BANKING
178,800 Bank of East Asia, Ltd.......... $ 745,529
145,000 Dao Heng Bank Group Ltd......... 793,649
96,000 Guoco Group Ltd................. 505,622
134,000 Hang Seng Bank Ltd.............. 1,911,444
71,200 HSBC Holdings PLC............... 2,141,561
455,000 International Bank of Asia...... 431,711
---------------
6,529,516
---------------
BANKS
56,000 Dah Sing Financial Group........ 310,127
---------------
BUILDING & CONSTRUCTION
90,000 Cheung Kong Infrastructure
Holdings...................... 260,827
---------------
COMMERCIAL SERVICES
400,000 Cosco Pacific Ltd............... 926,870
---------------
CONGLOMERATES
21,000 Citic Pacific, Ltd.............. 131,208
588,000 Hutchison Whampoa, Ltd.......... 5,085,652
64,000 Jardine Matheson Holdings
Ltd........................... 454,400
110,000 Shanghai Industrial Holdings
Ltd........................... 684,438
218,000 Swire Pacific Ltd. (Class A).... 1,962,886
---------------
8,318,584
---------------
ELECTRONICS
935,000 Elec & Eltek International
Holdings Ltd.................. 274,592
90,000 Johnson Electric Holdings,
Ltd........................... 268,379
---------------
542,971
---------------
ENGINEERING & CONSTRUCTION
455,000 Road King Infrastructure
Ltd.*......................... 384,722
---------------
FINANCIAL SERVICES
730,000 Manhattan Card Co. Ltd.......... 332,182
---------------
INVESTMENT COMPANIES
75,000 Hutchinson Whampoa Ltd.......... 648,680
---------------
LEISURE
1,431,000 CDL Hotels International,
Ltd........................... 581,895
---------------
PUBLISHING
555,000 South China Morning Post
(Holdings) Ltd................ 544,504
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - PACIFIC GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------
<C> <S> <C>
REAL ESTATE
444,000 Amoy Properties, Ltd............ $ 490,054
458,000 Cheung Kong (Holdings) Ltd...... 4,522,946
324,000 China Resources Enterprise
Ltd........................... 1,589,363
150,000 Great Eagle Holdings Ltd........ 494,740
162,676 Henderson China Holding Ltd..... 274,049
86,000 Henderson Land Development Co.
Ltd........................... 763,248
120,000 HKR International Ltd........... 166,527
345,000 Hong Kong Land Holdings Ltd..... 917,700
75,000 Hysan Development Co. Ltd....... 221,229
6,250 Hysan Development Co. Ltd.
(Warrants due 04/30/98)*...... 2,420
431,000 New World Development........... 2,570,477
268,000 Sino Land Co.................... 290,609
324,000 Sun Hung Kai Properties Ltd..... 3,900,213
420,000 Wharf (Holdings) Ltd............ 1,821,726
---------------
18,025,301
---------------
RETAIL
96,399 Dickson Concepts International
Ltd. (New).................... 350,926
---------------
TELECOMMUNICATIONS
1,340,000 Hong Kong Telecommunications
Ltd........................... 3,200,155
---------------
TRANSPORTATION
794,000 The Guangshen Railway Co.,
Ltd........................... 348,493
---------------
UTILITIES
213,500 China Light & Power Co. Ltd..... 1,209,921
119,500 Hong Kong & China Gas Co.
(Warrants due 09/30/97)*...... 128,038
424,400 Hong Kong & China Gas Co.
Ltd........................... 849,183
227,000 Hong Kong Electric Holdings
Ltd........................... 914,271
---------------
3,101,413
---------------
TOTAL HONG KONG................. 44,407,166
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------
<C> <S> <C>
INDIA (1.0%)
BANKING
20,000 State Bank of India (GDR)....... $ 517,000
---------------
TELECOMMUNICATIONS
18,000 Videsh Sanchar Nigam Ltd.
(GDR)......................... 371,700
---------------
TEXTILES
10,000 Reliance Industries (GDR)....... 226,500
10,000 Reliance Industries (GDR) -
144A**........................ 226,500
---------------
453,000
---------------
TOTAL INDIA..................... 1,341,700
---------------
INDONESIA (7.7%)
AUTOMOTIVE
1,150,000 PT Gadjah Tunggal............... 567,668
---------------
BANKING
600,000 Bank Negara Indonesia (Alien
Market)....................... 382,559
100,000 PT Bank Dagang Nasional
(Warrants due 02/14/00) (Alien
Market)*...................... 41,135
1,400,000 PT Bank Dagang Nasional
Indonesia..................... 993,418
998,031 PT Bank International
Indonesia..................... 862,141
113,158 PT Bank International Indonesia
(Warrants due 01/17/00)*...... 44,221
---------------
2,323,474
---------------
BUILDING MATERIALS
1,401,464 PT Mulia Industrindo (Alien
Market)....................... 735,034
---------------
COMMERCIAL SERVICES
600,000 PT Citra Marga Nusaphala Persada
(Alien Market)................ 351,707
600,000 PT Citra Marga Nusaphala Persada
(Rights)*..................... 228,301
340,000 PT Steady Safe.................. 398,601
---------------
978,609
---------------
CONGLOMERATES
300,000 PT Bimantara Citra (Alien
Market)....................... 524,476
---------------
CONSTRUCTION PLANT & EQUIPMENT
240,000 PT United Tractors.............. 888,523
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - PACIFIC GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------
<C> <S> <C>
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
40,000 PT Hanjaya Mandala Sampoerna.... $ 152,612
---------------
FOREST PRODUCTS, PAPER & PACKING
259,380 PT Indah Kiat Pulp Paper
Corp.......................... 152,043
5,187 PT Indah Kiat Pulp Paper Corp.
(Rights)*..................... 40,807
7,433 PT Pabrik Kertas Tjiwi Kimia.... 8,638
---------------
201,488
---------------
INVESTMENT COMPANIES
1 Peregrine Indonesia (Units) ++
** *.......................... 557,400
---------------
METALS
290,000 PT Tambang Timah................ 450,329
---------------
PHARMACEUTICALS
400,000 PT Kalbe Farma (Alien Market)... 534,759
---------------
PLANTATION
120,000 PT London Sumatra............... 380,091
---------------
REAL ESTATE
30,000 Kawasan Jababeka - 144A**
(GDR)......................... 420,000
---------------
RETAIL
250,000 PT Ramayana Lestari Sentosa..... 719,868
---------------
TELECOMMUNICATIONS
766,000 PT Telekomunikasi Indonesia..... 1,252,509
---------------
TOTAL INDONESIA................. 10,686,840
---------------
JAPAN (18.1%)
APPAREL
21,000 Tokyo Style..................... 291,361
6,000 World Co., Ltd.................. 263,351
---------------
554,712
---------------
AUTO TRUCKS & PARTS
6,000 Yasunaga Corp................... 74,346
---------------
AUTOMOTIVE
14,000 Honda Motor Co.................. 421,466
13,000 Toyota Motor Corp............... 383,421
---------------
804,887
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------
<C> <S> <C>
BANKING
25,000 Asahi Bank, Ltd................. $ 212,696
30,000 Bank of Tokyo-Mitsubishi Ltd.... 602,094
24,000 Mitsui Trust & Banking Co.,
Ltd........................... 181,152
16,000 Sanwa Bank, Ltd................. 237,347
16,000 Sumitomo Bank................... 262,478
11,000 Sumitomo Trust & Banking........ 118,063
---------------
1,613,830
---------------
BUILDING & CONSTRUCTION
36,000 Kajima Corp..................... 210,785
7,000 Kaneshita Construction.......... 54,668
---------------
265,453
---------------
BUILDING MATERIALS
36,000 Sanwa Shutter................... 326,702
---------------
BUSINESS SERVICES
4,000 Secom Co........................ 293,543
---------------
CHEMICALS
80,000 Mitsubishi Chemical Corp........ 261,082
61,000 Nippon Zeon Co. Ltd............. 301,274
12,000 Shin-Etsu Chemical Co........... 318,325
30,000 Sumitomo Bakelite Co. Ltd....... 242,147
---------------
1,122,828
---------------
CHEMICALS - SPECIALTY
35,000 Nippon Steel Chemical........... 111,780
---------------
COMMERCIAL SERVICES
9,000 Meitec Corp..................... 267,801
2,000 Nichii Gakkan Co................ 111,693
---------------
379,494
---------------
COMPUTER EQUIPMENT
5,400 I-O Data Device, Inc............ 179,058
---------------
COMPUTER SOFTWARE & SERVICES
8,000 Hitachi Software Engineering
Co............................ 196,161
8,000 Ines Corp....................... 142,408
8 NTT Data Communications Systems
Corp.......................... 309,250
---------------
647,819
---------------
COMPUTERS
29,000 Fujitsu, Ltd.................... 402,356
3,000 Nidec Corp...................... 146,597
---------------
548,953
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - PACIFIC GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------
<C> <S> <C>
DATA PROCESSING
4,000 Ricoh Elemex.................... $ 52,007
---------------
ELECTRICAL EQUIPMENT
19,000 Sumitomo Electric Industries.... 318,325
---------------
ELECTRONIC & ELECTRICAL EQUIPMENT
13,000 Aiwa Co......................... 298,342
3,000 Canon, Inc...................... 81,675
Y 9,000K Canon, Inc. 1.00% due 12/20/02
(Conv.)....................... 166,571
29,000 Hitachi, Ltd.................... 323,909
3,000 Kyocera Corp.................... 238,220
10,000 Mitsui High-Tec................. 240,838
8,000 Murata Manufacturing Co.,
Ltd........................... 315,532
10,000 Nitto Electric Works............ 178,010
17,000 Sharp Corp...................... 234,380
4,700 Sony Corp....................... 409,712
5,000 TDK Corp........................ 366,928
---------------
2,854,117
---------------
ELECTRONICS
Y 5,000K Nippon Densan Corp. 1.00% due
09/30/03 (Conv.).............. 65,358
3,000 Rohm Co., Ltd................... 308,901
---------------
374,259
---------------
ELECTRONICS - SEMICONDUCTORS/COMPONENTS
20,000 Toshiba Ceramics................ 204,188
---------------
ELECTRONICS - SPECIALTY
14,000 Taiyo Yuden Co., Ltd............ 230,890
---------------
ENGINEERING & CONSTRUCTION
24,000 Nippon Comsys Corp.............. 356,021
---------------
ENTERTAINMENT
3,000 H.I.S. Company Ltd.............. 158,377
3,000 Nintendo Corp., Ltd............. 250,785
7,900 Sony Music Entertainment Inc.... 370,183
---------------
779,345
---------------
FINANCIAL SERVICES
16,000 Daiwa Securities Co., Ltd....... 126,213
1,900 Nichiei Co., Ltd. (Kyoto)....... 222,164
13,000 Nomura Securities Co. Ltd....... 179,232
1,100 Sanyo Shinpan Finance Co.,
Ltd........................... 68,054
---------------
595,663
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------
<C> <S> <C>
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
19,000 Nippon Meat Packers, Inc........ $ 245,375
---------------
GLASS
18,000 Nippon Electric Glass Co.,
Ltd........................... 312,565
---------------
HEALTH & PERSONAL CARE
5,000 Kawasumi Laboratories, Inc...... 82,024
---------------
INDUSTRIALS
20,000 Nippon Thompson Co.............. 190,227
13,000 Tokai Carbon Co., Ltd........... 57,173
---------------
247,400
---------------
INSURANCE
30,000 Tokio Marine & Fire Insurance
Co............................ 392,670
---------------
MACHINE TOOLS
7,000 Nitto Kohki Co. Ltd............. 241,885
30,000 OSG Corp........................ 216,230
---------------
458,115
---------------
MACHINERY
33,000 Amada Co., Ltd.................. 290,838
22,000 Daifuku Co. Ltd................. 289,878
6,000 Fuji Machine Manufacturing
Co............................ 217,277
2,000 Keyence Corp.................... 296,684
Y 19,000K Minebea Co. Ltd. 0.80% due
03/31/03 (Conv.).............. 237,086
43,000 Mitsubishi Heavy Industries,
Ltd........................... 329,817
11,000 Tsudakoma....................... 52,024
---------------
1,713,604
---------------
MANUFACTURING
3,000 Arcland Sakamoto................ 36,387
18,000 Dainippon Screen Manufacturing
Co. Ltd....................... 169,634
5,000 Nichiha Corp.................... 78,534
---------------
284,555
---------------
MEDICAL SUPPLIES
11,000 Terumo Corp..................... 210,209
---------------
MERCHANDISING
4,000 Misumi Corp..................... 99,476
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - PACIFIC GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------
<C> <S> <C>
METALS
4,100 Fujimi Inc...................... $ 268,682
5,000 Sumitomo Special Metals......... 81,152
---------------
349,834
---------------
METALS & MINING
75,000 Nippon Steel Co................. 239,529
10,000 Sumitomo Sitix Corp............. 214,660
---------------
454,189
---------------
METALS NON-FERROUS
32,000 Fujikura Ltd.................... 298,778
69,000 Mitsui Mining & Smelting........ 306,466
---------------
605,244
---------------
MISCELLANEOUS MATERIALS & COMMODITIES
9,000 Minebea Co., Ltd................ 95,812
---------------
MULTI-INDUSTRY
37,000 Mitsui & Co..................... 355,148
2,000 Trusco Nakayama Corp............ 40,663
3,000 Yamae Hisano.................... 23,168
---------------
418,979
---------------
NATURAL GAS
82,000 Tokyo Gas Co., Ltd.............. 227,539
---------------
OFFICE EQUIPMENT
15,000 Ricoh Company, Ltd.............. 196,335
2,600 Riso Kagaku..................... 213,264
---------------
409,599
---------------
OIL RELATED
16,000 General Sekiyu.................. 106,108
---------------
PHARMACEUTICALS
18,000 Daiichi Pharmaceutical.......... 317,277
15,000 Eisai Co. Ltd................... 284,031
---------------
601,308
---------------
REAL ESTATE
14,000 Mitsubishi Estate Co. Ltd....... 202,792
23,000 Mitsui Fudosan Co., Ltd......... 317,103
3,000 Sekiwa Real Estate.............. 21,728
---------------
541,623
---------------
RETAIL
4,000 Circle K Japan Co. Ltd.......... 229,668
1,900 Ministop Co., Ltd............... 64,660
2,000 Olympic Corp.................... 39,093
2,500 Otsuka Kagu Ltd................. 197,862
4,000 Seven - Eleven Japan Co.,
Ltd........................... 302,269
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------
<C> <S> <C>
8,500 Shimachu Co., Ltd............... $ 255,148
---------------
1,088,700
---------------
RETAIL - DEPARTMENT STORES
28,000 Hankyu Department Stores........ 295,637
---------------
RETAIL - MERCHANDISING
6,000 Shimamura Co. Ltd............... 213,613
---------------
RETAIL - SPECIALTY
6,000 Aderans Co. Ltd................. 170,681
---------------
STEEL
123,000 Sumitomo Metal Industries....... 349,895
---------------
STEEL & IRON
15,000 Yamato Kogyo Co., Ltd........... 147,906
---------------
TELECOMMUNICATIONS
46 DDI Corp........................ 339,581
8,000 Nippon Denwa Shisetsu........... 68,691
41 Nippon Telegraph & Telephone
Corp.......................... 393,543
---------------
801,815
---------------
TEXTILES
78,000 Mitsubishi Rayon Co., Ltd....... 321,257
45,000 Nitto Boseki Co................. 155,105
---------------
476,362
---------------
TRANSPORTATION
17,000 Fukuyama Transporting Co........ 120,157
2,000 Kanto Seino Transportation...... 46,248
37,000 Tokyu Corp...................... 229,555
---------------
395,960
---------------
UTILITIES
8,900 Hokkaido Electric Power......... 159,206
7,500 Tokyo Electric Power Co......... 157,723
---------------
316,929
---------------
WHOLESALE & INTERNATIONAL TRADE
5,600 Satori Electric Co. Ltd......... 175,916
---------------
TOTAL JAPAN..................... 24,977,862
---------------
MALAYSIA (12.5%)
AUTOMOTIVE
104,000 Diversified Resources Berhad.... 220,444
54,800 Oriental Holdings Berhad........ 412,520
50,000 Perusahaan Otomobil Nasional
Berhad........................ 233,756
109,000 Tan Chong Motor Holdings
Berhad........................ 205,563
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - PACIFIC GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------
<C> <S> <C>
51,000 UMW Holdings Berhad............. $ 240,452
---------------
1,312,735
---------------
BANKING
152,000 Kwong Yik Bank.................. 514,897
127,600 Malayan Banking Berhad.......... 1,339,699
266,666 Public Bank Berhad (Alien
Market)....................... 416,269
---------------
2,270,865
---------------
BUILDING & CONSTRUCTION
8,000 Dialog Group Berhad............. 115,689
124,999 Gamuda Berhad................... 438,289
16,666 Gamuda Berhad (Warrants due
12/29/01)*.................... 18,489
135,000 Lingkaran Trans Kota Holdings
Berhad*....................... 280,804
204,000 Sungei Way Holdings Berhad...... 384,723
120,000 United Engineers Malaysia
Berhad........................ 865,293
---------------
2,103,287
---------------
CONGLOMERATES
250,000 Berjaya Group Berhad............ 307,052
350,000 Renong Berhad................... 457,607
81,000 Sime Darby Berhad............... 269,572
---------------
1,034,231
---------------
CONSTRUCTION PLANT & EQUIPMENT
60,500 YTL Corp. Berhad................ 186,965
---------------
DIVERSIFIED MANUFACTURING
200,000 Antah Holdings Berhad........... 256,735
---------------
ELECTRONIC & ELECTRICAL EQUIPMENT
140,000 Leader Universal Holdings
Berhad........................ 251,823
---------------
FINANCIAL SERVICES
194,000 Affin Holdings Berhad........... 461,173
25,000 AMMB Holdings Berhad............ 155,507
2,400 Hong Leong Credit (Rights)*..... 2,377
4,800 Hong Leong Credit Berhad........ 17,876
200,000 Public Finance Berhad........... 307,449
50,000 Rashid Hussain Berhad........... 316,957
---------------
1,261,339
---------------
INSURANCE
59,400 Malaysian Assurance Alliance
Berhad........................ 345,951
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------
<C> <S> <C>
LEISURE
46,000 Berjaya Sports Toto Berhad...... $ 216,878
290,000 Magnum Corporation Berhad....... 436,609
268,000 Metroplex Berhad................ 278,193
110,000 Resorts World Berhad............ 331,220
---------------
1,262,900
---------------
MANUFACTURING
57,000 Malaysian Pacific Industries
Berhad........................ 248,415
19,375 O.Y.L. Industries Berhad........ 122,821
---------------
371,236
---------------
MULTI-INDUSTRY
110,000 Multi-Purpose Holdings Berhad... 154,279
338,000 Multi-Purpose Holdings Berhad
3.00% due 01/13/02 (Loan
Stock)........................ 113,827
135,000 Nylex Berhad.................... 229,992
50,000 Road Builder (M) Holdings
Berhad........................ 235,737
---------------
733,835
---------------
PLANTATION
170,000 Highlands & Lowlands Berhad..... 259,984
210,000 Industrial Oxygen Incorporated
Berhad........................ 239,620
105,500 Kuala Lumpur Kepong Berhad...... 261,242
---------------
760,846
---------------
PUBLISHING
87,000 Star Publications (Malaysia).... 372,266
---------------
REAL ESTATE
177,000 Hong Leong Properties Berhad.... 201,264
149,000 Pelangi Berhad.................. 152,306
---------------
353,570
---------------
SHIPPING
5 Bumi Armada Berhad*............. 12
---------------
TELECOMMUNICATIONS
255,000 Telekom Malaysia Berhad......... 1,192,155
---------------
TRANSPORTATION
95,000 Konsortium Perkapalan Berhad.... 560,816
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - PACIFIC GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------
<C> <S> <C>
UTILITIES
35,000 Prime Utilities Berhad.......... $ 256,537
12,000 Prime Utilities Berhad (Warrants
due 03/11/01)*................ 20,349
24,000 Prime Utilities Berhad 1.00% due
03/01/01 (Loan Stock)*........ 7,132
130,000 Puncak Niaga Holdings Berhad*... 231,775
442,000 Tenaga Nasional Berhad.......... 2,153,962
---------------
2,669,755
---------------
TOTAL MALAYSIA.................. 17,301,322
---------------
PHILIPPINES (1.8%)
BANKING
30,000 Far East Bank & Trust........... 75,142
40,947 Philippine National Bank*....... 278,160
65,336 Security Bank Corp*............. 78,106
---------------
431,408
---------------
CONGLOMERATES
325,000 First Philippine Holdings Corp.
(B Shares).................... 450,190
---------------
DIVERSIFIED MANUFACTURING
750,000 Solid Group, Inc................ 122,391
---------------
ENGINEERING & CONSTRUCTION
2,100,000 DMCI Holdings, Inc.*............ 693,358
---------------
REAL ESTATE
1,500,000 Belle Corp.*.................... 438,330
---------------
UTILITIES
65,000 Manila Electric Co. (B
Shares)....................... 320,683
---------------
TOTAL PHILIPPINES............... 2,456,360
---------------
SINGAPORE (9.0%)
BANKING
99,000 Development Bank of Singapore,
Ltd........................... 1,246,851
152,520 Overseas Chinese Banking Corp.,
Ltd........................... 1,579,412
128,000 United Overseas Bank, Ltd....... 1,316,541
---------------
4,142,804
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------
<C> <S> <C>
CONGLOMERATES
83,000 Keppel Corp. Ltd.*.............. $ 368,773
110,000 Sembawang Corp. Ltd............. 500,280
---------------
869,053
---------------
ELECTRONIC & ELECTRICAL EQUIPMENT
37,000 Elec & Eltek International Co.
Ltd........................... 207,200
175,000 Venture Manufacturing Ltd....... 570,599
---------------
777,799
---------------
FINANCE
42,000 Hong Leong Finance Ltd.......... 119,312
---------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
42,600 Fraser & Neave Ltd.............. 304,030
---------------
METALS
238,000 Amtek Engineering Ltd........... 417,982
---------------
PUBLISHING
19,200 Singapore Press Holdings........ 386,902
---------------
REAL ESTATE
5,000 Bukit Sembawang Estates Ltd..... 92,359
128,000 City Developments, Ltd.......... 1,253,848
106,000 DBS Land Ltd.................... 335,236
85,000 Parkway Holdings Ltd............ 380,633
32,000 Singapore Land Ltd.............. 145,536
204,000 United Overseas Land, Ltd....... 276,910
132,000 Wing Tai Holdings Ltd........... 380,521
---------------
2,865,043
---------------
SHIPBUILDING
24,500 Keppel Corp. Ltd................ 106,283
---------------
STEEL & IRON
212,000 Natsteel Ltd.................... 539,938
---------------
TELECOMMUNICATIONS
255,000 Singapore Telecommunications,
Ltd........................... 471,033
---------------
TRANSPORTATION
153,000 Singapore Airlines Ltd.......... 1,370,277
---------------
TOTAL SINGAPORE................. 12,370,456
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - PACIFIC GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------
<C> <S> <C>
SOUTH KOREA (5.0%)
AUTOMOTIVE
9,000 Hyundai Motor Co., Ltd. (GDR)... $ 298,128
---------------
BANKING
48,670 Cho Hung Bank................... 324,100
1,310 Kookmin Bank.................... 24,849
132 Kookmin Bank (Rights)*.......... 2,504
40,740 Shinhan Bank.................... 610,318
---------------
961,771
---------------
COMMUNICATIONS - EQUIPMENT/MANUFACTURERS
3,500 LG Information & Communication
Ltd........................... 447,573
---------------
CONGLOMERATES
$ 250K Daewoo Corp. 0.25% due 12/31/08
(Conv.)....................... 275,000
---------------
ELECTRICAL EQUIPMENT
5,500 Samsung Display Devices Co...... 300,482
---------------
ELECTRONICS
7,481 Samsung Electronics Co.......... 831,396
4,388 Samsung Electronics Co.
(GDR)*........................ 120,231
123 Samsung Electronics Co.
(Rights)...................... 13,670
74 Samsung Electronics Co.
(Rights)...................... 4,329
---------------
969,626
---------------
ENGINEERING & CONSTRUCTION
15,300 Hyundai Engineering &
Construction Co............... 393,725
---------------
INSURANCE
10,000 Oriental Fire & Marine
Insurance..................... 252,822
---------------
INVESTMENT COMPANIES
25,000 Atlantis Korean Smaller Co's*... 187,500
---------------
MACHINERY
58,300 Daewoo Heavy Industries......... 480,350
---------------
OIL RELATED
14,358 Yukong, Ltd. (GDS).............. 348,416
---------------
STEEL & IRON
8,380 Pohang Iron & Steel Co.......... 864,218
---------------
TELECOMMUNICATIONS
37 SK Telecom Co. Ltd.............. 27,418
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------
<C> <S> <C>
UTILITIES
23,750 Korea Electric Power Corp....... $ 710,356
1,000 Samchully Co.................... 65,835
7,000 Seoul City Gas Co Ltd........... 319,187
---------------
1,095,378
---------------
TOTAL SOUTH KOREA............... 6,902,407
---------------
TAIWAN (3.5%)
BUILDING MATERIALS
12,523 Asia Cement Corp. (GDR)......... 197,237
---------------
CHEMICALS - SPECIALTY
$ 205K Nan Ya Plastics Corp. 1.75% due
07/09/01 (Conv.).............. 293,663
---------------
ELECTRONICS
$ 185K Compal Electronics 1.00% due
11/21/03 (Conv.).............. 316,350
$ 180K United Microelectronics - 144A**
0.25% due 05/16/04 (Conv.).... 228,600
---------------
544,950
---------------
INVESTMENT COMPANIES
90 Taipei Fund*.................... 1,116,000
37,400 Taiwan American Fund (Pref.)*... 682,550
---------------
1,798,550
---------------
RETAIL
$ 330K Far Eastern Department Stores -
144A** 3.00% due 07/06/01
(Conv.)....................... 355,575
---------------
STEEL & IRON
31,262 China Steel Corp. (GDR)......... 668,069
---------------
TRANSPORTATION
$ 500K U-Ming Marine Transport 1.50%
due 02/07/01 (Conv.).......... 411,250
$ 504K Yang Ming Marine Transportation
- 144A** 2.00% due 10/06/01
(Conv.)....................... 559,440
---------------
970,690
---------------
TOTAL TAIWAN.................... 4,828,734
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - PACIFIC GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------
<C> <S> <C>
THAILAND (2.7%)
BANKING
60,000 Bangkok Bank PCL................ $ 412,674
---------------
ENTERTAINMENT
20,000 Grammy Entertainment PLC........ 222,566
---------------
INVESTMENT COMPANIES
600,000 Ruang Khao 2 Fund (Units) ++.... 146,059
---------------
METALS & MINING
23,100 Ban Pu Coal Co., Ltd............ 337,395
76,300 Lanna Lignite Public Co. (Alien
Market)....................... 539,525
---------------
876,920
---------------
OIL RELATED
65,000 PTT Exploration & Production
PCL........................... 944,359
---------------
TELECOMMUNICATIONS
45,000 United Communication Industry... 186,051
---------------
TRANSPORTATION
550,000 Bangkok Expressway Public Co.
(Alien Market)*............... 584,428
---------------
UTILITIES - ELECTRIC
110,000 Cogeneration Public Co.*........ 295,402
---------------
TOTAL THAILAND.................. 3,668,459
---------------
TOTAL COMMON AND PREFERRED
STOCKS, WARRANTS, RIGHTS AND
BONDS
(IDENTIFIED COST $124,108,197).. 136,699,496
---------------
</TABLE>
<TABLE>
<CAPTION>
DESCRIPTION,
NUMBER OF EXPIRATION DATE
CONTRACTS AND STRIKE PRICE VALUE
- --------------------------------------------------------------------
<C> <S> <C>
PURCHASED PUT OPTION ON FOREIGN CURRENCY (0.0%)
27,000 August 1997/THB 26.97
(Identified Cost $79,920)......... $ 32,400
---------------
TOTAL INVESTMENTS
(IDENTIFIED COST $124,188,117)...... 136,731,896
---------------
---------------
WRITTEN PUT OPTION ON FOREIGN CURRENCY (0.1%)
27,000 August 1997/THB 26.97 (Premium
Received $79,920)................. (153,090)
---------------
---------------
TOTAL INVESTMENTS
(IDENTIFIED COST
$124,188,117) (A)......... 99.0% 136,731,896
TOTAL WRITTEN OPTION
OUTSTANDING............... (0.1%) (153,090)
CASH AND OTHER ASSETS
IN EXCESS OF
LIABILITIES................. 1.1% 1,572,327
----- ------------
NET ASSETS.................. 100.0% $138,151,133
----- ------------
----- ------------
<FN>
- ---------------------
ADR American Depository Receipt.
GDR Global Depository Receipt.
GDS Global Depository Share.
K In thousands.
* Non-income producing security.
** Resale is restricted to qualified institutional investors.
++ Consists of one or more class of securities traded together as a unit;
stocks with attached warrants.
(a) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $21,417,110 and the
aggregate gross unrealized depreciation is $8,873,331, resulting in net
unrealized appreciation of $12,543,779.
</TABLE>
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT JUNE 30, 1997:
<TABLE>
<CAPTION>
CONTRACTS IN EXCHANGE DELIVERY UNREALIZED
TO DELIVER FOR DATE APPRECIATION
- -------------------------------------------------------------------
<S> <C> <C> <C>
SGD 101,800 $ 71,338 07/01/97 $ 110
-----
-----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - PACIFIC GROWTH
SUMMARY OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- ------------------------------------------------------------------
<S> <C> <C>
Apparel................................. $ 554,712 0.4%
Auto Trucks & Parts..................... 74,346 0.1
Automotive.............................. 3,259,153 2.4
Banking................................. 19,203,342 13.9
Banks................................... 310,127 0.2
Building & Construction................. 3,289,583 2.4
Building Materials...................... 1,258,972 0.9
Business Services....................... 293,543 0.2
Chemicals............................... 1,122,827 0.8
Chemicals - Specialty................... 405,443 0.3
Commercial Services..................... 2,284,974 1.7
Communications -
Equipment/Manufacturers............... 447,573 0.3
Computer Equipment...................... 179,058 0.1
Computer Software &
Services.............................. 647,819 0.5
Computers............................... 548,953 0.4
Conglomerates........................... 11,471,533 8.3
Construction Plant &
Equipment............................. 1,075,488 0.8
Currency Options........................ 32,400 0.0
Data Processing......................... 52,007 0.0
Diversified Manufacturing............... 379,126 0.3
Electrical Equipment.................... 618,807 0.4
Electronic & Electrical Equipment....... 3,883,740 2.8
Electronics............................. 2,431,805 1.8
Electronics -
Semiconductors/Components............. 204,189 0.1
Electronics - Specialty................. 230,890 0.2
Engineering & Construction.............. 1,827,826 1.3
Entertainment........................... 1,001,911 0.7
Finance................................. 119,312 0.1
Financial Services...................... 2,189,185 1.6
Food, Beverage, Tobacco & Household
Products.............................. 1,080,254 0.8
Foods & Beverages....................... 646,675 0.5
Forest Products, Paper & Packing........ 201,488 0.1
Glass................................... 312,565 0.2
Health & Personal Care.................. 82,024 0.1
Industrials............................. 247,400 0.2
Insurance............................... 991,443 0.7
Investment Companies.................... 3,338,189 2.4
Leisure................................. 1,844,795 1.3
Machine Tools........................... 458,115 0.3
Machinery............................... 2,284,808 1.7
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- ------------------------------------------------------------------
<S> <C> <C>
Manufacturing........................... $ 655,791 0.5%
Manufacturing - Diversified............. 709,081 0.5
Medical Supplies........................ 210,209 0.2
Merchandising........................... 99,476 0.1
Metals.................................. 1,218,145 0.9
Metals & Mining......................... 4,282,983 3.1
Metals Non-Ferrous...................... 605,244 0.4
Miscellaneous Materials & Commodities... 95,812 0.1
Multi-Industry.......................... 1,152,814 0.8
Natural Gas............................. 227,539 0.2
Office Equipment........................ 409,599 0.3
Oil Related............................. 2,300,779 1.7
Pharmaceuticals......................... 1,136,068 0.8
Plantation.............................. 1,140,936 0.8
Publishing.............................. 1,303,672 0.9
Real Estate............................. 22,643,867 16.4
Retail.................................. 2,515,070 1.8
Retail - Department Stores.............. 295,637 0.2
Retail - Merchandising.................. 213,613 0.2
Retail - Specialty...................... 170,681 0.1
Retail Stores........................... 519,299 0.4
Shipbuilding............................ 106,283 0.1
Shipping................................ 12 0.0
Steel................................... 399,667 0.3
Steel & Iron............................ 2,220,131 1.6
Telecommunications...................... 7,502,837 5.4
Textiles................................ 929,361 0.7
Transportation.......................... 4,230,664 3.1
Utilities............................... 8,078,908 5.8
Utilities - Electric.................... 295,402 0.2
Wholesale & International Trade......... 175,916 0.1
------------ -----
$136,731,896 99.0%
------------ -----
------------ -----
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
- ------------------------------------------------------------------
<S> <C> <C>
Common Stocks........................... $132,602,222 96.0%
Convertible Bonds....................... 2,908,891 2.1
Foreign Currency Put Options............ 32,400 0.0
Preferred Stocks........................ 682,550 0.5
Rights & Warrants....................... 505,833 0.4
------------ -----
$136,731,896 99.0%
------------ -----
------------ -----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - EQUITY
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (97.3%)
AGRICULTURE RELATED (5.2%)
155,000 Archer-Daniels-Midland Co........... $ 3,642,500
70,000 Case Corp........................... 4,821,250
75,000 Dekalb Genetics Corp. (Class B)..... 5,981,250
76,000 Delta & Pine Land Co................ 2,707,500
30,000 IMC Global, Inc..................... 1,050,000
200,000 Monsanto Co......................... 8,612,500
75,000 Pioneer Hi-Bred International,
Inc............................... 6,000,000
---------------
32,815,000
---------------
APPAREL & FOOTWEAR (0.5%)
57,900 Jones Apparel Group, Inc.*.......... 2,764,725
---------------
AUTO RELATED (0.6%)
220,000 Miller Industries, Inc.*............ 3,520,000
---------------
BANKS (6.9%)
110,000 BankAmerica Corp.................... 7,101,875
120,000 First of America Bank Corp.......... 5,490,000
30,000 Firstar Corp........................ 915,000
59,400 HomeSide, Inc.*..................... 1,299,375
155,200 Mellon Bank Corp.................... 7,003,400
100,000 NationsBank Corp.................... 6,450,000
58,000 Norwest Corp........................ 3,262,500
136,000 State Street Corp................... 6,290,000
58,000 U.S. Bancorp........................ 3,719,250
32,800 Washington Mutual, Inc.............. 1,959,800
---------------
43,491,200
---------------
BASIC CYCLICALS (2.3%)
40,000 Aluminum Co. of America............. 3,015,000
125,000 Crompton & Knowles Corp............. 2,781,250
40,000 Du Pont (E.I.) De Nemours & Co.,
Inc............................... 2,515,000
60,000 Fuller (H.B.) Co.................... 3,300,000
40,000 Reynolds Metals Co.................. 2,850,000
---------------
14,461,250
---------------
BIOTECHNOLOGY (1.8%)
97,000 Alkermes, Inc.*..................... 1,406,500
260,000 Biochem Pharma, Inc.*............... 5,752,500
100,000 Centocor, Inc.*..................... 3,100,000
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
19,000 Gilead Sciences, Inc.*.............. $ 524,875
33,000 IDEC Pharmaceuticals Corp.*......... 800,250
---------------
11,584,125
---------------
CAPITAL GOODS (3.2%)
100,000 General Electric Co................. 6,537,500
70,000 Honeywell, Inc...................... 5,311,250
70,000 United Technologies Corp............ 5,810,000
90,000 Wyman-Gordon Co.*................... 2,430,000
---------------
20,088,750
---------------
COMMUNICATIONS EQUIPMENT (5.7%)
6,200 Advanced Fibre Communications,
Inc.*............................. 374,712
255,000 Bay Networks, Inc.*................. 6,773,437
212,000 Brightpoint, Inc.*.................. 6,903,250
165,000 Ericsson (L.M.) Telephone Co. (Class
B) (ADR) (Sweden)................. 6,496,875
20,000 Lucent Technologies, Inc............ 1,441,250
60,000 Newbridge Networks Corp.
(Canada)*......................... 2,610,000
72,000 Northern Telecom Ltd. (Canada)...... 6,552,000
91,000 Tellabs, Inc.*...................... 5,073,250
---------------
36,224,774
---------------
COMPUTER EQUIPMENT (3.7%)
64,000 Dell Computer Corp.*................ 7,512,000
155,000 EMC Corp.*.......................... 6,045,000
150,000 Quantum Corp.*...................... 3,046,875
47,000 SCI Systems, Inc.*.................. 2,996,250
117,000 Seagate Technology, Inc.*........... 4,116,937
---------------
23,717,062
---------------
COMPUTER SERVICES (0.6%)
60,000 Keane, Inc.*........................ 3,120,000
25,000 Transaction Systems Architects, Inc.
(Class A)*........................ 856,250
---------------
3,976,250
---------------
COMPUTER SOFTWARE (2.5%)
30,000 BMC Software, Inc.*................. 1,661,250
5,700 Great Plains Software Inc........... 153,900
50,000 Microsoft Corp.*.................... 6,321,875
160,000 Veritas Software Corp.*............. 8,000,000
---------------
16,137,025
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - EQUITY
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
CONSTRUCTION (0.5%)
29,000 American Standard Companies,
Inc.*............................. $ 1,297,750
60,000 Miller (Herman), Inc................ 2,145,000
---------------
3,442,750
---------------
CONSUMER - NONCYCLICAL (6.4%)
64,600 Avon Products, Inc.................. 4,558,337
43,000 Clorox Co........................... 5,676,000
90,000 Coca-Cola Co........................ 6,075,000
100,000 Colgate-Palmolive Co................ 6,525,000
50,000 Gillette Co......................... 4,737,500
80,000 Kimberly-Clark Corp................. 3,980,000
80,000 PanAmerican Beverages, Inc. (Class
A) (Mexico)....................... 2,630,000
45,000 Procter & Gamble Co................. 6,356,250
---------------
40,538,087
---------------
CONSUMER BUSINESS SERVICES (2.1%)
80,000 Corrections Corp. of
America*.......................... 3,180,000
100,000 Interpublic Group of Companies,
Inc............................... 6,131,250
82,800 Service Corp. International......... 2,722,050
40,000 U.S.A. Waste Services, Inc.*........ 1,545,000
---------------
13,578,300
---------------
CONSUMER PRODUCTS (1.8%)
73,000 Callaway Golf Co.................... 2,591,500
30,000 CVS Corp............................ 1,537,500
132,000 Kroger Co.*......................... 3,828,000
38,000 Sony Corp. (ADR) (Japan)............ 3,344,000
---------------
11,301,000
---------------
DRUGS (5.6%)
115,000 Bristol-Myers Squibb Co............. 9,315,000
59,000 Dura Pharmaceuticals, Inc.*......... 2,345,250
90,000 Lilly (Eli) & Co.................... 9,838,125
15,000 Pfizer, Inc......................... 1,792,500
68,000 Schering-Plough Corp................ 3,255,500
70,000 Warner-Lambert Co................... 8,697,500
---------------
35,243,875
---------------
ENERGY (6.3%)
95,000 Baker Hughes, Inc................... 3,675,312
80,000 Cooper Cameron Corp.*............... 3,740,000
61,000 Diamond Offshore Drilling, Inc...... 4,765,625
26,000 ENSCO International, Inc.*.......... 1,371,500
11,900 Falcon Drilling
Company, Inc.*.................... 685,737
130,300 Global Marine, Inc.*................ 3,029,475
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
100,000 Halter Marine Group, Inc.*.......... $ 2,400,000
98,000 Marine Drilling Company, Inc.*...... 1,911,000
86,000 Mobil Corp.......................... 6,009,250
70,000 Schlumberger, Ltd................... 8,750,000
41,000 Smith International, Inc.*.......... 2,490,750
20,000 Western Atlas, Inc.*................ 1,465,000
---------------
40,293,649
---------------
ENTERTAINMENT (0.5%)
100,000 Electronic Arts, Inc.*.............. 3,362,500
---------------
FINANCIAL - MISCELLANEOUS (5.8%)
30,000 American Express Co................. 2,235,000
110,000 Associates First Capital Corp.
(Class A)......................... 6,105,000
22,600 BA Merchant Services, Inc. (Class
A)*............................... 430,812
88,000 Bear Stearns Companies, Inc......... 3,008,500
120,000 Edwards (A.G.), Inc................. 5,130,000
56,100 Hambrecht & Quist Group*............ 1,837,275
18,300 Infinity Financial Technology,
Inc.*............................. 297,375
179,200 Lehman Brothers Holdings, Inc....... 7,257,600
50,000 Merrill Lynch & Co., Inc............ 2,981,250
76,800 Paine Webber Group, Inc............. 2,688,000
75,000 PMI Group Inc....................... 4,678,125
---------------
36,648,937
---------------
HEALTHCARE PRODUCTS & SERVICES (3.0%)
145,000 Health Management Associates, Inc.
(Class A)*........................ 4,132,500
220,000 Healthsouth Corp.*.................. 5,486,250
130,000 Renal Treatment Centers, Inc.*...... 3,493,750
4,000 Shared Medical
Systems Corp...................... 215,000
200,000 Tenet Healthcare Corp.*............. 5,912,500
---------------
19,240,000
---------------
HOTELS/MOTELS (0.9%)
75,000 MGM Grand, Inc.*.................... 2,775,000
200,000 Sodak Gaming, Inc.*................. 2,925,000
---------------
5,700,000
---------------
INSURANCE (3.7%)
64,000 Allstate Corp.+..................... 4,672,000
130,000 Equitable Companies, Inc............ 4,322,500
50,000 Fremont General Corp................ 2,012,500
25,000 General Re Corp..................... 4,550,000
109,800 Hartford Life, Inc. (Class A)*...... 4,117,500
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - EQUITY
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
42,000 Marsh & McLennan Companies, Inc..... $ 2,997,750
32,500 Nationwide Financial Services, Inc.
(Class A)......................... 863,281
---------------
23,535,531
---------------
INTERNET (1.1%)
120,000 America Online, Inc.*............... 6,675,000
15,000 Security Dynamics Technologies,
Inc.*............................. 551,250
---------------
7,226,250
---------------
MEDIA GROUP (5.9%)
61,600 Clear Channel Communications,
Inc.*............................. 3,788,400
67,500 Evergreen Media Corp. (Class A)*.... 3,003,750
100,000 Heftel Broadcasting Corp. (Class
A)*............................... 5,450,000
61,000 Lin Television Corp.*............... 2,687,812
121,125 Outdoor Systems, Inc.*.............. 4,602,750
120,000 Time Warner, Inc.................... 5,790,000
135,000 Tribune Co.......................... 6,488,438
66,600 Univision Communications, Inc.
(Class A)*........................ 2,605,725
121,410 Westinghouse Electric Corp.......... 2,807,606
---------------
37,224,481
---------------
MEDICAL SUPPLIES (1.0%)
42,000 Guidant Corp........................ 3,570,000
100,000 Mentor Corp......................... 2,962,500
---------------
6,532,500
---------------
RETAIL (5.7%)
26,600 Barnes & Noble, Inc.*............... 1,143,800
130,000 Costco Companies Inc.*.............. 4,273,750
120,000 Dayton-Hudson Corp.................. 6,382,500
215,000 Family Dollar Stores, Inc........... 5,858,750
150,000 General Nutrition Companies,
Inc.*............................. 4,181,250
75,000 Home Depot, Inc..................... 5,170,313
56,000 Tiffany & Co........................ 2,586,500
185,000 Wal-Mart Stores, Inc................ 6,255,313
---------------
35,852,176
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
SEMICONDUCTOR CAPITAL EQUIPMENT (6.0%)
100,000 Applied Materials, Inc.*............ $ 7,075,000
105,000 DuPont Photomasks, Inc.*............ 5,663,438
150,000 Etec Systems, Inc.*................. 6,421,875
250,000 KLA-Tencor Corp.*................... 12,187,500
185,000 PRI Automation, Inc.*............... 7,006,875
---------------
38,354,688
---------------
SEMICONDUCTORS (6.4%)
230,000 Analog Devices, Inc.*............... 6,109,375
37,000 Intel Corp.......................... 5,237,813
50,000 Lattice Semiconductor Corp.*........ 2,818,750
150,000 LSI Logic Corp.*.................... 4,800,000
195,000 MEMC Electronic Materials, Inc.*.... 6,386,250
51,000 Micrel, Inc.*....................... 2,575,500
70,000 Micron Technology, Inc.*............ 2,795,625
3,500 Rambus Inc.*........................ 161,438
80,000 Texas Instruments, Inc.............. 6,725,000
95,000 Vitesse Semiconductor Corp.*........ 3,099,375
---------------
40,709,126
---------------
TRANSPORTATION (1.6%)
45,000 Cummins Engine Co., Inc............. 3,175,313
41,600 OMI Corp.*.......................... 397,800
5,100 Ryanair Holdings PLC (Ireland)
(ADR)*............................ 137,063
15,000 Teekay Shipping Corp................ 518,438
178,750 US Airways Group Inc.*.............. 6,125,037
---------------
10,353,651
---------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $508,820,953)...... 617,917,662
---------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS
- -----------
<C> <S> <C>
SHORT-TERM INVESTMENTS (2.6%)
U.S. GOVERNMENT AGENCY (a) (2.5%)
$ 16,000 Federal Home Loan Mortgage Corp.
6.00% due 07/01/97 (Amortized Cost
$16,000,000)...................... 16,000,000
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - EQUITY
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ------------------------------------------------------------------
<C> <S> <C>
REPURCHASE AGREEMENT (0.1%)
$ 227 The Bank of New York 5.75% due
07/01/97 (dated 06/30/97; proceeds
$227,060; collateralized by
$49,342 U.S.Treasury Bill 0.00%
due 04/30/98 valued at $47,137;
$60,000 U.S. Treasury Bond 11.75%
due 02/15/01 valued at $73,026;
$70,000 U.S. Treasury Note 5.50%
due 07/31/97 valued at $71,606 and
$39,237 U.S. Treasury Note 6.25%
due 02/15/03 valued at $39,796)
(Identified Cost $227,024)........ $ 227,024
---------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $16,227,024)....... 16,227,024
---------------
TOTAL INVESTMENTS
(IDENTIFIED COST
$525,047,977) (B)........... 99.9% 634,144,686
OTHER ASSETS IN EXCESS OF
LIABILITIES................. 0.1 844,002
----- ------------
NET ASSETS.................. 100.0% $634,988,688
----- ------------
----- ------------
<FN>
- ---------------------
ADR American Depository Receipt.
* Non-income producing security.
+ Parent Company of Northbrook Life Insurance Company and Allstate Life
Insurance Company of New York, affiliates of the Fund.
(a) Security was purchased on a discount basis. The interest rate shown has
been adjusted to reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $115,249,503 and the
aggregate gross unrealized depreciation is $6,152,794, resulting in net
unrealized appreciation of $109,096,709.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - STRATEGIST
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS (59.1%)
AEROSPACE & DEFENSE (2.4%)
77,000 Honeywell, Inc...................... $ 5,842,375
183,300 Watkins-Johnson Co.................. 5,636,475
---------------
11,478,850
---------------
ALUMINUM (1.3%)
78,000 Aluminum Co. of America............. 5,879,250
---------------
AUTOMOTIVE (2.5%)
184,000 Chrysler Corp....................... 6,037,500
156,000 Ford Motor Co....................... 5,889,000
---------------
11,926,500
---------------
BANKS - MONEY CENTER (2.4%)
47,000 Citicorp............................ 5,666,437
54,000 Morgan (J.P.) & Co., Inc............ 5,636,250
---------------
11,302,687
---------------
BEVERAGES - SOFT DRINKS (1.2%)
155,000 PepsiCo, Inc........................ 5,822,187
---------------
CHEMICALS (1.4%)
155,000 Monsanto Co......................... 6,674,687
---------------
COMPUTER EQUIPMENT (2.3%)
88,000 Cisco Systems, Inc.*................ 5,907,000
144,000 Seagate Technology, Inc.*........... 5,067,000
---------------
10,974,000
---------------
COMPUTER SOFTWARE (2.4%)
44,000 Microsoft Corp.*.................... 5,563,250
112,000 Oracle Corp.*....................... 5,635,000
---------------
11,198,250
---------------
COMPUTERS (1.2%)
170,000 Gateway 2000, Inc.*................. 5,514,375
---------------
COMPUTERS - SYSTEMS (3.8%)
140,000 Diebold, Inc........................ 5,460,000
110,000 Hewlett-Packard Co. ................ 6,160,000
167,000 Sun Microsystems, Inc.*............. 6,210,312
---------------
17,830,312
---------------
ELECTRIC - MAJOR (1.3%)
90,000 General Electric Co. ............... 5,883,750
---------------
ELECTRONICS - SEMICONDUCTORS/COMPONENTS (1.2%)
40,000 Intel Corp.......................... 5,662,500
---------------
ENTERTAINMENT/GAMING & LODGING (1.2%)
225,000 Circus Circus Enterprises,
Inc.*............................. 5,540,625
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
FINANCIAL SERVICES (1.2%)
128,000 Fannie Mae.......................... $ 5,584,000
---------------
FOODS (2.6%)
121,000 Campbell Soup Co.................... 6,050,000
92,000 General Mills, Inc.................. 5,991,500
---------------
12,041,500
---------------
FOREST PRODUCTS, PAPER & PACKING (1.4%)
147,000 Bowater Inc......................... 6,798,750
---------------
HEALTHCARE - HMOS (1.2%)
250,000 Humana, Inc.*....................... 5,781,250
---------------
HOUSEHOLD PRODUCTS (1.3%)
92,000 Colgate-Palmolive Co................ 6,003,000
---------------
HOUSEWARES (1.2%)
150,000 Tupperware Corp..................... 5,475,000
---------------
MEDICAL PRODUCTS & SUPPLIES (1.2%)
110,000 Baxter International, Inc........... 5,747,500
---------------
OIL - DOMESTIC (1.2%)
80,000 Atlantic Richfield Co............... 5,640,000
---------------
OIL INTEGRATED - INTERNATIONAL (2.4%)
93,000 Exxon Corp.......................... 5,719,500
53,000 Texaco, Inc......................... 5,763,750
---------------
11,483,250
---------------
PHARMACEUTICALS (5.1%)
76,000 American Home Products Corp....... 5,814,000
90,600 Johnson & Johnson................... 5,832,375
55,000 Lilly (Eli) & Co.................... 6,012,188
53,000 Pfizer, Inc......................... 6,333,500
---------------
23,992,063
---------------
PROPERTY - CASUALTY INSURANCE (1.4%)
7,490 Aetna Inc. (Class C) (Conv. Pref.)
$4.75............................... 702,188
89,000 Chubb Corp.......................... 5,951,875
---------------
6,654,063
---------------
RETAIL (1.3%)
113,000 Dayton-Hudson Corp.................. 6,010,188
---------------
RETAIL - SPECIALTY (4.0%)
200,000 Bed Bath & Beyond, Inc.*............ 6,075,000
89,000 Home Depot, Inc..................... 6,135,438
122,000 Payless ShoeSource, Inc.*........... 6,671,875
---------------
18,882,313
---------------
RETAIL - SPECIALTY APPAREL (1.3%)
160,000 Gap, Inc............................ 6,220,000
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - STRATEGIST
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
SAVINGS & LOAN ASSOCIATIONS (1.2%)
83,000 Golden West Financial Corp.......... $ 5,810,000
---------------
SEMICONDUCTOR EQUIPMENT (2.5%)
118,000 Altera Corp.*....................... 5,959,000
120,000 KLA-Tencor Corp.*................... 5,850,000
---------------
11,809,000
---------------
SHOES (1.4%)
113,000 Nike, Inc. (Class B)................ 6,596,375
---------------
STEEL & IRON (1.3%)
104,000 Nucor Corp. ........................ 5,876,000
---------------
TELECOMMUNICATION EQUIPMENT (1.3%)
112,600 Tellabs, Inc.*...................... 6,277,450
---------------
TOTAL COMMON AND PREFERRED STOCKS
(IDENTIFIED COST $212,746,300)...... 278,369,675
---------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS
- -----------
<C> <S> <C>
CORPORATE BONDS (14.3%)
AIRLINES (1.3%)
$ 3,250 AMR Corp.
10.45% due 03/10/11................. 4,012,157
1,612 United Air Lines, Inc.
10.125% due 03/22/15................ 1,925,002
---------------
5,937,159
---------------
BANKS (1.7%)
3,000 Bankers Trust - 144A ** (Series A)
8.09% due 12/01/26.................. 2,938,680
3,000 Capital One Bank
8.125% due 03/01/00................. 3,082,200
2,000 National City Capital Trust -
144A**
6.75% due 06/01/99.................. 2,010,000
---------------
8,030,880
---------------
BROKERAGE (0.5%)
2,500 Salomon Inc.
6.70% due 07/05/00.................. 2,492,250
---------------
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ------------------------------------------------------------------
<C> <S> <C>
CABLE & TELECOMMUNICATIONS (0.9%)
$ 2,000 Comcast Cable Communication -
144A**
8.875% due 05/01/17................. $ 2,173,180
2,000 TCI Communications, Inc.
8.75% due 08/01/15.................. 2,099,580
---------------
4,272,760
---------------
FINANCE (0.5%)
2,000 Terra Nova Holdings
(United Kingdom)
10.75% due 07/01/05................. 2,222,280
---------------
FINANCE - CONSUMER (1.9%)
3,000 Advanta National Bank
5.98% due 02/10/98.................. 2,988,750
3,000 Money Store Inc. (The)
8.375% due 04/15/04................. 3,076,950
3,000 Riggs Capital Trust II - 144A**
(Series C)
8.875% due 03/15/27................. 3,046,440
---------------
9,112,140
---------------
FINANCIAL SERVICES (3.0%)
2,000 Arkwright CSN Trust - 144A**
9.625% due 08/15/26................. 2,235,000
3,000 Central Fidelity Capital I -
144A**
6.832% due 04/15/27................. 3,077,730
3,000 Centura Capital Trust I - 144A**
8.845% due 06/01/27................. 3,097,500
3,000 Provident Capital Trust I
8.60% due 12/01/26.................. 2,988,750
3,000 Sakura Capital Funding - 144A**
(Cayman Islands)
7.32% due 08/29/49.................. 2,958,750
---------------
14,357,730
---------------
FOREIGN GOVERNMENT & AGENCY (0.8%)
1,000 Quebec Province (Canada)
6.89% due 04/15/26.................. 1,010,740
3,000 Republic of South Africa (South
Africa)
8.50% due 06/23/17.................. 2,998,380
---------------
4,009,120
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - STRATEGIST
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ------------------------------------------------------------------
<C> <S> <C>
INSURANCE (1.3%)
$ 2,000 Farmers Insurance Exchange -
144A**
8.50% due 08/01/04.................. $ 2,105,000
4,000 Vesta Capital Trust I - 144A**
8.525% due 01/15/27................. 4,065,000
---------------
6,170,000
---------------
MACHINERY & MACHINE TOOLS (0.5%)
2,000 Reliance Industries Ltd. - 144A**
(India)
10.25% due 01/15/97................. 2,170,520
---------------
METALS & MINING (0.4%)
2,000 Placer Dome, Inc. (Canada)
8.50% due 12/31/45.................. 1,942,500
---------------
OIL INTEGRATED - DOMESTIC (0.4%)
1,950 Mitchell Energy & Development
Corp.
6.75% due 02/15/04.................. 1,887,581
---------------
TELECOMMUNICATIONS (1.1%)
2,000 British Telecom Finance (United
Kingdom)
9.625% due 02/15/19................. 2,170,820
3,000 Total Access Communication -
144A** (Thailand)
8.375% due 11/04/06................. 2,928,750
---------------
5,099,570
---------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $67,289,516)....... 67,704,490
---------------
</TABLE>
<TABLE>
<CAPTION>
<C> <S> <C>
U.S. GOVERNMENT OBLIGATIONS (6.7%)
3,000 U.S. Treasury Bond
6.50% due 11/15/26.................. 2,876,670
3,000 U.S. Treasury Note
5.125% due 02/28/98................. 2,988,690
10,000 U.S. Treasury Note
5.25% due 12/31/97.................. 9,986,700
1,000 U.S. Treasury Note
5.625% due 11/30/00................. 979,610
2,000 U.S. Treasury Note
6.375% due 05/15/99................. 2,010,280
500 U.S. Treasury Note
6.50% due 04/30/99.................. 503,860
3,000 U.S. Treasury Note
6.50% due 05/15/05.................. 2,994,930
4,000 U.S. Treasury Note
6.875% due 08/31/99................. 4,060,160
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ------------------------------------------------------------------
<C> <S> <C>
$ 5,000 U.S. Treasury Note
6.875% due 03/31/00................. $ 5,081,850
---------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(IDENTIFIED COST $31,715,313)....... 31,482,750
---------------
</TABLE>
<TABLE>
<CAPTION>
<C> <S> <C>
SHORT-TERM INVESTMENTS (a) (19.5%)
U.S. GOVERNMENT AGENCIES
23,255 Federal Home Loan Banks
5.40% due 07/14/97.................. 23,209,653
50,000 Federal Home Loan Mortgage Corp.
5.42% due 07/03/97.................. 49,984,944
11,550 Federal Home Loan Mortgage Corp.
6.00% due 07/01/97.................. 11,550,000
7,000 Federal National Mortgage Assoc.
5.40% due 07/03/97.................. 6,997,900
---------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST
$91,742,497)........................ 91,742,497
---------------
TOTAL INVESTMENTS
(IDENTIFIED COST
$403,493,626) (B)......... 99.6% 469,299,412
CASH AND OTHER ASSETS IN
EXCESS OF LIABILITIES..... 0.4 1,669,628
----- ------------
NET ASSETS.................. 100.0% $470,969,040
----- ------------
----- ------------
<FN>
- ---------------------
* Non-income producing security.
** Resale is restricted to qualified institutional investors.
(a) Securities were purchased on a discount basis. The interest rates shown
have been adjusted to reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $68,331,756 and the
aggregate gross unrealized depreciation is $2,525,970, resulting in net
unrealized appreciation of $65,805,786.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - CAPITAL APPRECIATION
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (95.0%)
ADVERTISING (1.2%)
6,100 Snyder Communications, Inc.*.......... $ 164,319
--------------
AEROSPACE & DEFENSE (1.3%)
12,100 Kellstrom Industries, Inc.*........... 189,062
--------------
AUTO PARTS - ORIGINAL EQUIPMENT (1.4%)
4,600 Tower Automotive, Inc.*............... 197,800
--------------
BIOTECHNOLOGY (3.5%)
5,300 Centocor, Inc.*....................... 164,300
5,200 Guilford Pharmaceuticals, Inc.*....... 126,100
7,300 Interneuron Pharmaceuticals, Inc.*.... 146,912
6,500 Liposome Co., Inc.*................... 57,687
--------------
494,999
--------------
BUSINESS SERVICES (1.3%)
5,700 Metzler Group, Inc.*.................. 182,400
--------------
COMMERCIAL SERVICES (4.9%)
6,000 Caribiner International, Inc.*........ 195,750
5,100 Learning Tree International, Inc...... 226,312
9,600 Whittman-Hart, Inc.................... 270,000
--------------
692,062
--------------
COMPUTER EQUIPMENT (1.3%)
4,100 Storage Technology Corp.*............. 182,450
--------------
COMPUTER SOFTWARE (3.2%)
3,000 American Software, Inc. (Class A)..... 22,500
4,400 Compuware Corp.*...................... 210,100
8,600 Systems & Computer Technology
Corp.*.............................. 227,900
--------------
460,500
--------------
COMPUTER SOFTWARE & SERVICES (11.0%)
6,800 Harbinger Corp.*...................... 190,400
9,200 ISG International Software Group Ltd.*
(Israel)............................ 116,150
4,400 Keane, Inc............................ 228,800
7,800 Manugistics Group, Inc.*.............. 347,100
5,400 PRI Automation, Inc.*................. 204,525
7,200 Scopus Technology, Inc.*.............. 160,200
4,500 SMART Modular Technologies, Inc.*..... 151,875
5,200 STB Systems, Inc.*.................... 166,400
--------------
1,565,450
--------------
COMPUTERS (4.9%)
7,800 Data General Corp.*................... 202,800
6,200 Gulfstream Aerospace Corp.*........... 182,900
7,500 Micron Electronics, Inc.*............. 133,594
4,300 MICROS Systems, Inc.*................. 178,987
--------------
698,281
--------------
<CAPTION>
NUMBER OF
SHARES VALUE
- -------------------------------------------------------------------
<C> <S> <C>
CONSUMER SERVICES (1.3%)
9,500 E*TRADE Group, Inc.*.................. $ 185,844
--------------
ELECTRICAL EQUIPMENT (2.0%)
8,200 JPM Co.*.............................. 291,100
--------------
ELECTRONICS (5.3%)
5,400 Sawtek, Inc.*......................... 180,900
5,200 Sipex Corp.*.......................... 182,000
5,600 Teradyne, Inc.*....................... 219,800
5,000 Vitesse Semiconductor Corp.*.......... 163,125
--------------
745,825
--------------
ELECTRONICS - SEMICONDUCTORS/COMPONENTS (4.9%)
4,700 CFM Technologies, Inc.*............... 153,337
4,500 Etec Systems, Inc.*................... 192,656
5,700 Kulicke & Soffa Industries, Inc.*..... 184,181
5,000 TriQuint Semiconductor, Inc.*......... 170,000
--------------
700,174
--------------
ENVIRONMENTAL CONTROL (2.4%)
4,000 Culligan Water Technologies, Inc.*.... 179,000
4,300 U.S.A Waste Services, Inc.*........... 166,088
--------------
345,088
--------------
FOOD PROCESSING (1.1%)
6,300 International Multifoods Corp......... 158,288
--------------
HOSPITAL RELATED (1.2%)
5,200 Genesis Health Ventures, Inc.......... 175,500
--------------
INSURANCE (1.3%)
5,900 Penn Treaty American Corp.*........... 180,688
--------------
LEISURE (1.3%)
10,000 Funco, Inc.*.......................... 185,000
--------------
MACHINERY (1.7%)
4,300 National-Oilwell, Inc.*............... 247,250
--------------
MANUFACTURING (1.4%)
11,200 Ballantyne of Omaha, Inc.*............ 201,600
--------------
MEDICAL PRODUCTS & SUPPLIES (1.6%)
16,600 Graham-Field Health Products, Inc..... 226,175
--------------
MISCELLANEOUS (3.7%)
5,400 Immunex Corp.*........................ 194,400
3,200 Innovex, Inc.......................... 92,400
8,000 ITEQ, Inc.*........................... 75,000
5,400 Scotts Company (The) (Class A)*....... 156,600
--------------
518,400
--------------
OIL & GAS (2.4%)
8,800 Lomak Petroleum, Inc.................. 156,750
8,100 Noble Drilling Corp.*................. 182,756
--------------
339,506
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - CAPITAL APPRECIATION
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -------------------------------------------------------------------
<C> <S> <C>
OIL EQUIPMENT & SERVICES (1.2%)
3,300 ENSCO International, Inc.*............ $ 174,075
--------------
PHARMACEUTICALS (2.7%)
7,600 Alkermes, Inc.*....................... 110,200
7,700 North American Vaccine, Inc........... 148,706
5,800 SangStat Medical Corp.*............... 130,500
--------------
389,406
--------------
PUBLISHING (1.3%)
7,900 Valassis Communications, Inc.*........ 189,600
--------------
RETAIL (5.4%)
8,800 Claire's Stores, Inc.................. 154,000
9,400 Michaels Stores, Inc.*................ 199,163
6,400 Ross Stores, Inc...................... 208,800
6,700 Stein Mart, Inc.*..................... 201,000
--------------
762,963
--------------
RETAIL - SPECIALTY (3.2%)
5,300 Cole National Corp. (Class A)*........ 233,200
6,175 Consolidated Stores Corp.*............ 214,581
--------------
447,781
--------------
SEMICONDUCTORS (1.3%)
3,900 KLA-Tencor Corp.*..................... 190,125
--------------
SPECIALIZED SERVICES (1.2%)
5,300 Service Corp. International........... 174,238
--------------
TELECOMMUNICATION EQUIPMENT (5.6%)
7,400 Davox Corp.*.......................... 264,088
6,400 Digital Microwave Corp.*.............. 187,200
7,800 DSC Communications Corp.*............. 173,550
5,000 P-COM, Inc.*.......................... 163,750
--------------
788,588
--------------
TELECOMMUNICATIONS (4.0%)
2,900 QUALCOMM, Inc.*....................... 147,538
10,500 Tel-Save Holdings, Inc.*.............. 158,813
8,200 Telco Communications Group, Inc.*..... 264,450
--------------
570,801
--------------
TRANSPORTATION (0.9%)
6,100 Trico Marine Service, Inc.*........... 133,056
--------------
TRUCKERS (1.5%)
5,600 Caliber System, Inc................... 208,600
--------------
WHOLESALE DISTRIBUTOR (1.1%)
10,700 ADFlex Solutions, Inc.*............... 160,500
--------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $12,302,618)......... 13,517,494
--------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- -------------------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENTS (7.9%)
U.S. GOVERNMENT AGENCY (a) (7.0%)
$ 1,000 Federal Home Loan Mortgage Corp. 6.00%
due 07/01/97 (Amortized Cost
$1,000,000)......................... $ 1,000,000
--------------
REPURCHASE AGREEMENT (0.9%)
124 The Bank of New York 5.75% due
07/01/97 (dated 06/30/97; proceeds
$124,372; collateralized by $40,000
U.S. Treasury Bond 7.25% due
08/15/22 valued at $42,763; $10,591
U.S. Treasury Note 7.50% due
10/31/99 valued at $11,019; $30,000
U.S. Treasury Note 7.75% due
11/30/99 valued at $31,222; $35,000
U.S. Treasury Note 8.125% due
02/15/98 valued at $36,569 and
$5,221 U.S. Treasury Note 6.265% due
06/30/01 valued at $5,266
(Identified Cost $124,352).......... 124,352
--------------
TOTAL SHORT-TERM
INVESTMENTS
(IDENTIFIED COST $1,124,352).......... 1,124,352
--------------
TOTAL INVESTMENTS
(IDENTIFIED COST
$13,426,970) (B)............. 102.9% 14,641,846
LIABILITIES IN EXCESS OF
OTHER
ASSETS..................... (2.9) (414,457)
----- -----------
NET ASSETS................... 100.0% $14,227,389
----- -----------
----- -----------
<FN>
- ---------------------
* 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) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $1,597,008 and the
aggregate gross unrealized depreciation is $382,132, resulting in net
unrealized appreciation of $1,214,876.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - INCOME BUILDER
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (44.9%)
APPAREL (0.8%)
6,000 Kellwood Co........................... $ 166,500
--------------
AUTO PARTS (0.8%)
4,400 Dana Corp............................. 167,200
--------------
AUTOMOTIVE (2.4%)
5,000 Chrysler Corp......................... 164,062
4,200 Ford Motor Co......................... 158,550
3,000 General Motors Corp................... 167,062
--------------
489,674
--------------
BANKS (4.9%)
3,000 CoreStates Financial Corp............. 161,250
6,050 First Security Corp................... 165,241
3,300 First Tennessee National Corp......... 158,400
2,900 KeyCorp............................... 162,037
6,280 Washington Federal, Inc............... 160,925
3,600 Wilmington Trust Corp................. 164,700
--------------
972,553
--------------
BANKS - THRIFT INSTITUTIONS (0.8%)
2,600 Washington Mutual, Inc................ 155,350
--------------
BUILDING MATERIALS (0.8%)
2,100 Vulcan Materials Co................... 164,850
--------------
CHEMICALS (3.4%)
1,900 Dow Chemical Co....................... 165,537
3,500 Hercules, Inc......................... 167,562
2,900 PPG Industries, Inc................... 168,562
1,900 Rohm & Haas Co........................ 171,119
--------------
672,780
--------------
CONGLOMERATES (0.8%)
3,700 Tenneco, Inc.......................... 167,194
--------------
FINANCIAL (1.2%)
2,400 Providian Financial Corp.*............ 77,100
3,300 TCF Financial Corp.................... 162,937
--------------
240,037
--------------
FINANCIAL - MISCELLANEOUS (1.7%)
3,900 Fannie Mae............................ 170,138
1,300 Student Loan Marketing Assoc.......... 165,100
--------------
335,238
--------------
FOOD PROCESSING (0.8%)
6,000 Hormel Foods Corp..................... 161,250
--------------
HEALTHCARE - DRUGS (0.8%)
3,400 Schering-Plough Corp.................. 162,775
--------------
INSURANCE (2.5%)
2,300 Jefferson-Pilot Corp.................. 160,713
2,600 Lincoln National Corp................. 167,375
2,300 Torchmark Corp........................ 163,875
--------------
491,963
--------------
<CAPTION>
NUMBER OF
SHARES VALUE
- -------------------------------------------------------------------
<C> <S> <C>
LIFE INSURANCE (0.4%)
1,042 Aegon N.V. (Netherlands).............. $ 73,005
--------------
MACHINERY - DIVERSIFIED (0.8%)
4,000 Johnson Controls, Inc................. 164,250
--------------
MANUFACTURING - CONSUMER & INDUSTRIAL PRODUCTS (0.8%)
3,000 Whirlpool Corp........................ 163,688
--------------
MISCELLANEOUS (0.9%)
4,600 American Greetings Corp.
(Class A)............................. 170,200
--------------
MOBIL HOME & RECREATION (0.8%)
5,500 Fleetwood Enterprises, Inc............ 163,969
--------------
OIL & GAS (0.8%)
3,600 Ashland, Inc.......................... 166,950
--------------
REAL ESTATE INVESTMENT TRUST (7.0%)
8,000 American General Hospitality
Corp.................................. 198,000
2,700 Boston Properties, Inc.*.............. 74,250
7,800 Excel Realty Trust, Inc............... 205,725
8,200 Glenborough Realty Trust Inc.......... 207,050
3,750 Healthcare Realty Trust, Inc.......... 104,531
9,200 Liberty Property Trust................ 228,850
9,800 LTC Properties, Inc................... 177,625
9,000 Reckson Associates Realty
Corp.................................. 207,000
--------------
1,403,031
--------------
RESTAURANTS (0.8%)
5,900 Sbarro, Inc........................... 163,725
--------------
RETAIL - SPECIALTY APPAREL (0.8%)
8,300 Limited (The), Inc.................... 168,075
--------------
STEEL (0.9%)
4,900 USX-U.S. Steel Group, Inc............. 171,806
--------------
TELECOMMUNICATIONS (1.7%)
2,200 Bell Atlantic Corp.................... 166,925
4,600 U.S. West Communications
Group, Inc............................ 173,363
--------------
340,288
--------------
TELEPHONES (0.8%)
4,700 AT&T Corp............................. 164,794
--------------
TOBACCO (1.7%)
4,000 Philip Morris Companies, Inc.......... 177,500
6,000 UST, Inc.............................. 166,500
--------------
344,000
--------------
UTILITIES - ELECTRIC (3.4%)
5,700 Consolidated Edison Co. of New
York, Inc............................. 167,794
4,500 New England Electric System........... 166,500
8,200 PECO Energy Co........................ 172,200
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - INCOME BUILDER
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -------------------------------------------------------------------
<C> <S> <C>
6,700 Public Service Enterprise
Group, Inc............................ $ 167,500
--------------
673,994
--------------
UTILITIES - TELEPHONE (0.8%)
3,700 GTE Corp.............................. 162,338
--------------
WHOLESALE DISTRIBUTOR (0.8%)
4,500 Supervalu, Inc........................ 155,250
--------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $8,402,618).......... 8,996,727
--------------
CONVERTIBLE PREFERRED STOCKS (16.3%)
AUTO PARTS (0.5%)
3,700 Walbro Capital Trust $2.00............ 105,912
--------------
BANKS (0.7%)
5,000 National Australia Bank, Ltd.
$1.969 (Australia) (Units)++.......... 139,687
--------------
BROADCAST MEDIA (2.8%)
4,200 Evergreen Media Corp. -
144A** $3.00.......................... 229,162
5,500 SFX Broadcasting, Inc.
(Series D) $3.25...................... 302,500
4,000 Triathlon Broadcasting Co.
$0.945................................ 34,000
--------------
565,662
--------------
CHEMICALS (2.2%)
6,300 Atlantic Richfield Co. $2.228......... 135,450
5,000 Occidental Petroleum Corp.
(Series 1993) $3.875 -
144A**................................ 294,065
--------------
429,515
--------------
FINANCE (2.6%)
6,890 Insignia Financing, Inc. $3.25........ 316,079
2,540 Merrill Lynch & Co., Inc.
(STRYPES) $2.39 (1)................... 95,250
1,500 Merrill Lynch & Co., Inc.
(STRYPES) $4.087 (2).................. 102,750
--------------
514,079
--------------
INSURANCE (1.0%)
3,500 American Heritage Life
Investment Corp. $4.25................ 192,500
--------------
METALS & MINING (0.5%)
1,740 Cyprus Amax Minerals Co.
(Series A) $4.00...................... 95,374
--------------
PUBLISHING (0.8%)
14,590 Hollinger International, Inc.
$0.951................................ 167,785
--------------
REAL ESTATE (0.4%)
1,800 Rouse Co. (Series B) $3.00............ 86,850
--------------
<CAPTION>
NUMBER OF
SHARES VALUE
- -------------------------------------------------------------------
<C> <S> <C>
REAL ESTATE INVESTMENT TRUST (2.4%)
9,000 Equity Residential Properties
Trust (Series E) $1.75................ $ 239,625
7,060 FelCor Suite Hotels, Inc.
(Series A) $1.95...................... 209,153
1,085 Merry Land & Investment Co.,
Inc. (Series C) $2.15................. 29,431
--------------
478,209
--------------
TELECOMMUNICATIONS (2.4%)
9,830 Loral Space & Communications
Ltd. $3.00 - 144A**................... 489,662
--------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(IDENTIFIED COST $3,133,239).......... 3,265,235
--------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS
- -----------
<C> <S> <C>
CORPORATE BONDS (26.7%)
CONVERTIBLE BONDS (14.0%)
AUTO PARTS (1.1%)
$ 250 MascoTech, Inc.
4.50% due 12/15/03.................... 227,812
--------------
CABLE/CELLULAR (0.7%)
400 U.S. Cellular Corp.
0.00% due 06/15/15.................... 139,016
--------------
FINANCE (0.7%)
125 Aames Financial Corp.
5.50% due 03/15/06.................... 135,937
--------------
HEALTHCARE (3.4%)
30 Emeritus Corp. - 144A**
6.25% due 01/01/06.................... 25,802
100 Phymatrix Corp.
6.75% due 06/15/03.................... 90,022
375 Physicians Resource Group,
Inc. - 144A**
6.00% due 12/01/01.................... 307,639
300 Sterling House Corp.
6.75% due 06/30/06.................... 258,000
--------------
681,463
--------------
HEALTHCARE - MISCELLANEOUS (0.9%)
225 Pharmaceutical Marketing
Services, Inc.
6.25% due 02/01/03.................... 186,469
--------------
HOTELS/MOTELS (0.1%)
25 Signature Resorts, Inc.
5.75% due 01/15/07.................... 24,375
--------------
OFFICE EQUIPMENT & SUPPLIES (1.7%)
375 U.S. Office Products Co.
5.50% due 05/15/03.................... 347,812
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES - INCOME BUILDER
PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- -------------------------------------------------------------------
<C> <S> <C>
PUBLISHING (1.5%)
$ 300 Nelson (Thomas), Inc.
5.75% due 11/30/99.................... $ 303,189
--------------
REAL ESTATE INVESTMENT TRUST (0.8%)
175 Capstone Capital Corp.
6.55% due 03/14/02.................... 167,563
--------------
RESTAURANTS (1.2%)
160 Boston Chicken, Inc.
4.50% due 02/01/04.................... 122,133
500 Boston Chicken, Inc.
0.00% due 06/01/15.................... 108,905
--------------
231,038
--------------
SHOES (1.6%)
350 Nine West Group, Inc. - 144A**
5.50% due 07/15/03.................... 320,222
--------------
TELECOMMUNICATIONS (0.3%)
75 Midcom Communications Inc. -
144A**
8.25% due 08/15/03.................... 48,704
--------------
TOTAL CONVERTIBLE BONDS
(IDENTIFIED COST $2,738,091).......... 2,813,600
--------------
</TABLE>
<TABLE>
<CAPTION>
<C> <S> <C>
NONCONVERTIBLE BONDS (12.7%)
AUTO PARTS (1.7%)
350 Lear Seating Corp.
11.25% due 07/15/00................... 351,750
--------------
BROADCAST MEDIA (1.1%)
195 Outlet Broadcasting, Inc.
10.875% due 07/15/03.................. 211,899
--------------
CABLE/CELLULAR (0.3%)
50 Continental Cablevision, Inc.
11.00% due 06/01/07................... 56,078
--------------
HEALTHCARE (3.6%)
650 Magellan Health Services, Inc.
(Series A)
11.25% due 04/15/04................... 721,500
--------------
OIL & GAS (2.1%)
400 Global Marine, Inc.
12.75% due 12/15/99................... 419,000
--------------
RETAIL (1.6%)
300 Barnes & Noble, Inc. (Series B)
11.875% due 01/15/03.................. 324,750
--------------
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- -------------------------------------------------------------------
<C> <S> <C>
TOYS (2.3%)
$ 450 Mattel, Inc.
10.125% due 08/15/02.................. $ 468,374
--------------
TOTAL NONCONVERTIBLE BONDS
(IDENTIFIED COST $2,580,690).......... 2,553,351
--------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $5,318,781).......... 5,366,951
--------------
</TABLE>
<TABLE>
<CAPTION>
<C> <S> <C>
SHORT-TERM INVESTMENTS (a) (12.1%)
U.S. GOVERNMENT AGENCIES
1,400 Federal Home Loan Mortgage
Corp. 5.40% due 07/07/97.............. 1,398,740
1,035 Federal Home Loan Mortgage
Corp. 6.00% due 07/01/97.............. 1,035,000
--------------
TOTAL SHORT-TERM
INVESTMENTS
(AMORTIZED COST $2,433,740)........... 2,433,740
--------------
TOTAL INVESTMENTS
(IDENTIFIED COST
$19,288,378) (B)............. 100.0% 20,062,653
CASH AND OTHER ASSETS IN
EXCESS OF LIABILITIES...... 0.0 925
----- -----------
NET ASSETS................... 100.0% $20,063,578
----- -----------
----- -----------
<FN>
- ---------------------
STRYPES Structured yield product exchangeable for stock.
* Non-income producing security.
** Resale is restricted to qualified institutional investors.
++ Consists of one or more class of securities traded together as a unit;
stocks with attached warrants.
(1) Convertible into IMC Global, Inc. common stock.
(2) Convertible into SunAmerica, Inc. common stock.
(a) Securities were purchased on a discount basis. The interest rates shown
have been adjusted to reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $941,793 and the
aggregate gross unrealized depreciation is $167,518, resulting in net
unrealized appreciation of $774,275.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL STATEMENTS
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY QUALITY HIGH DIVIDEND
MARKET INCOME PLUS YIELD UTILITIES GROWTH
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
ASSETS:
Investments in securities, at value*.... $363,678,258 $503,366,197 $305,147,595 $406,167,604 $1,662,983,202
Cash.................................... 4,746 81,504 -- 25,000 --
Receivable for:
Investments sold.................... -- 25,525,113 -- 1,377,838 3,258,862
Shares of beneficial interest
sold.............................. 65,487 30,350 248,352 706 1,788,883
Dividends........................... -- -- -- 1,129,773 2,557,618
Interest............................ 776,631 6,769,163 6,792,210 890,305 878,814
Foreign withholding taxes
reclaimed......................... -- -- -- 8,995 --
Prepaid expenses and other assets....... 5,866 12,846 8,717 10,637 14,694
Receivable from affiliate............... -- -- -- -- --
------------ ------------ ------------ ------------ --------------
TOTAL ASSETS....................... 364,530,988 535,785,173 312,196,874 409,610,858 1,671,482,073
------------ ------------ ------------ ------------ --------------
LIABILITIES:
Written put options outstanding, at
value................................. -- -- -- -- --
Payable for:
Investments purchased............... -- 82,904,305 6,009,400 266,200 9,832,634
Shares of beneficial interest
repurchased....................... 1,636,806 265,417 -- 379,354 --
Investment management fee........... 153,117 192,602 127,080 225,543 730,160
Accrued expenses and other payables..... 35,614 41,012 29,126 41,591 72,938
------------ ------------ ------------ ------------ --------------
TOTAL LIABILITIES.................. 1,825,537 83,403,336 6,165,606 912,688 10,635,732
------------ ------------ ------------ ------------ --------------
NET ASSETS:
Paid-in-capital......................... 362,705,163 472,826,490 397,903,968 315,540,836 1,140,372,531
Accumulated undistributed (dividends in
excess of) net investment income...... 288 -- 223,148 301 96
Accumulated undistributed net realized
gain (loss)........................... -- (27,298,355) (78,680,528) 8,028,263 63,252,863
Net unrealized appreciation
(depreciation)........................ -- 6,853,702 (13,415,320) 85,128,770 457,220,851
------------ ------------ ------------ ------------ --------------
NET ASSETS......................... $362,705,451 $452,381,837 $306,031,268 $408,698,170 $1,660,846,341
------------ ------------ ------------ ------------ --------------
------------ ------------ ------------ ------------ --------------
*IDENTIFIED COST................... $363,678,258 $496,512,495 $318,562,915 $321,038,834 $1,205,762,351
------------ ------------ ------------ ------------ --------------
------------ ------------ ------------ ------------ --------------
SHARES OF BENEFICIAL INTEREST
OUTSTANDING........................ 362,705,163 43,849,051 50,213,567 26,024,177 81,287,166
------------ ------------ ------------ ------------ --------------
------------ ------------ ------------ ------------ --------------
NET ASSET VALUE PER SHARE
(UNLIMITED AUTHORIZED SHARES OF $.01 PAR
VALUE).................................. $1.00 $10.32 $6.09 $15.70 $20.43
------------ ------------ ------------ ------------ --------------
------------ ------------ ------------ ------------ --------------
<FN>
- ------------------
** Includes foreign cash of $140,278 and $170,219, respectively.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL STATEMENTS
STATEMENTS OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
JUNE 30, 1997 (UNAUDITED)
GLOBAL
CAPITAL DIVIDEND EUROPEAN PACIFIC
GROWTH GROWTH GROWTH GROWTH EQUITY STRATEGIST
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments in securities, at value*... $ 103,350,803 $445,109,264 $376,980,936 $136,731,896 $634,144,686 $469,299,412
Cash................................... -- 859,503 591,544** 1,155,432** -- 49,201
Receivable for:
Investments sold................... 1,072,088 1,027,388 1,942,506 1,373,585 -- --
Shares of beneficial interest
sold............................. 3,828 438,446 151,074 315,883 1,114,015 15,135
Dividends.......................... 24,804 1,504,726 892,663 268,358 223,808 238,510
Interest........................... 132 10,369 14,402 39,439 36 1,641,128
Foreign withholding taxes
reclaimed........................ -- 568,221 828,513 -- -- --
Prepaid expenses and other assets...... 2,451 4,608 696 6,371 12,514 9,914
Receivable from affiliate.............. -- -- -- -- -- --
-------------- ------------ ------------ ------------ ------------ ------------
TOTAL ASSETS...................... 104,454,106 449,522,525 381,402,334 139,890,964 635,495,059 471,253,300
-------------- ------------ ------------ ------------ ------------ ------------
LIABILITIES:
Written put options outstanding, at
value................................ -- -- -- 153,090 -- --
Payable for:
Investments purchased.............. 2,234,076 6,178,434 6,423,646 1,341,740 188,356 --
Shares of beneficial interest
repurchased...................... 141,658 2,457 -- -- 4,737 38,604
Investment management fee.......... 54,994 273,592 310,212 115,421 264,380 199,731
Accrued expenses and other payables.... 19,725 109,370 60,764 129,580 48,898 45,925
-------------- ------------ ------------ ------------ ------------ ------------
TOTAL LIABILITIES................. 2,450,453 6,563,853 6,794,622 1,739,831 506,371 284,260
-------------- ------------ ------------ ------------ ------------ ------------
NET ASSETS:
Paid-in-capital........................ 78,868,579 355,334,122 265,350,852 136,336,312 513,198,130 395,946,499
Accumulated undistributed (dividends in
excess of) net investment income..... 102,442 (3,933) 1,718,705 812,888 48 19,025
Accumulated undistributed net realized
gain (loss).......................... 3,787,465 12,559,224 14,902,022 (11,470,242) 12,693,801 9,197,730
Net unrealized appreciation
(depreciation)....................... 19,245,167 75,069,259 92,636,133 12,472,175 109,096,709 65,805,786
-------------- ------------ ------------ ------------ ------------ ------------
NET ASSETS........................ $ 102,003,653 $442,958,672 $374,607,712 $138,151,133 $634,988,688 $470,969,040
-------------- ------------ ------------ ------------ ------------ ------------
-------------- ------------ ------------ ------------ ------------ ------------
*IDENTIFIED COST.................. $ 84,105,636 $370,073,570 $284,358,074 $124,188,117 $525,047,977 $403,493,626
-------------- ------------ ------------ ------------ ------------ ------------
-------------- ------------ ------------ ------------ ------------ ------------
SHARES OF BENEFICIAL INTEREST
OUTSTANDING....................... 6,011,400 31,178,845 16,583,059 13,794,146 22,471,940 32,650,359
-------------- ------------ ------------ ------------ ------------ ------------
-------------- ------------ ------------ ------------ ------------ ------------
NET ASSET VALUE PER SHARE
(UNLIMITED AUTHORIZED SHARES OF $.01
PAR VALUE)............................. $16.97 $14.21 $22.59 $10.02 $28.26 $14.42
-------------- ------------ ------------ ------------ ------------ ------------
-------------- ------------ ------------ ------------ ------------ ------------
<CAPTION>
CAPITAL INCOME
APPRECIATION BUILDER
<S> <C> <C>
- ---------------------------------------
ASSETS:
Investments in securities, at value*... $ 14,641,846 $20,062,653
Cash................................... -- 8,448
Receivable for:
Investments sold................... -- --
Shares of beneficial interest
sold............................. 135,294 268,051
Dividends.......................... 1,458 30,182
Interest........................... 20 113,478
Foreign withholding taxes
reclaimed........................ -- --
Prepaid expenses and other assets...... -- 1,544
Receivable from affiliate.............. 16,989 8,499
------------ -----------
TOTAL ASSETS...................... 14,795,607 20,492,855
------------ -----------
LIABILITIES:
Written put options outstanding, at
value................................ -- --
Payable for:
Investments purchased.............. 548,147 417,661
Shares of beneficial interest
repurchased...................... 3,088 1,576
Investment management fee.......... -- --
Accrued expenses and other payables.... 16,983 10,040
------------ -----------
TOTAL LIABILITIES................. 568,218 429,277
------------ -----------
NET ASSETS:
Paid-in-capital........................ 13,535,951 19,209,738
Accumulated undistributed (dividends in
excess of) net investment income..... 77,414 2,762
Accumulated undistributed net realized
gain (loss).......................... (600,852) 76,803
Net unrealized appreciation
(depreciation)....................... 1,214,876 774,275
------------ -----------
NET ASSETS........................ $ 14,227,389 $20,063,578
------------ -----------
------------ -----------
*IDENTIFIED COST.................. $ 13,426,970 $19,288,378
------------ -----------
------------ -----------
SHARES OF BENEFICIAL INTEREST
OUTSTANDING....................... 1,378,497 1,889,576
------------ -----------
------------ -----------
NET ASSET VALUE PER SHARE
(UNLIMITED AUTHORIZED SHARES OF $.01
PAR VALUE)............................. $10.32 $10.62
------------ -----------
------------ -----------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY QUALITY HIGH DIVIDEND
MARKET INCOME PLUS YIELD UTILITIES GROWTH
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
INCOME
Interest................................ $9,656,295 $16,753,260 $17,429,453 $ 1,814,061 $ 1,609,725
Dividends............................... -- -- -- 7,037,224** 17,940,261**
---------- ----------- ----------- ----------- ------------
TOTAL INCOME....................... 9,656,295 16,753,260 17,429,453 8,851,285 19,549,986
---------- ----------- ----------- ----------- ------------
EXPENSES
Investment management fee............... 871,413 1,132,840 691,945 1,343,152 3,800,732
Professional fees....................... 14,149 12,940 13,917 14,915 15,937
Custodian fees.......................... 10,341 20,353 10,413 14,927 35,264
Shareholder reports and notices......... 9,216 5,495 6,945 14,048 45,469
Trustees' fees and expenses............. 735 1,445 388 1,140 3,728
Transfer agent fees and expenses........ 248 248 248 248 248
Other................................... 2,397 5,492 5,056 4,654 5,484
---------- ----------- ----------- ----------- ------------
TOTAL EXPENSES..................... 908,499 1,178,813 728,912 1,393,084 3,906,862
LESS: AMOUNTS WAIVED/ASSUMED....... -- -- -- -- --
---------- ----------- ----------- ----------- ------------
NET EXPENSES....................... 908,499 1,178,813 728,912 1,393,084 3,906,862
---------- ----------- ----------- ----------- ------------
NET INVESTMENT INCOME.............. 8,747,796 15,574,447 16,700,541 7,458,201 15,643,124
---------- ----------- ----------- ----------- ------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments......................... -- 156,829 (6,582,289) 8,068,074 66,034,728
Options written..................... -- -- -- -- --
Foreign exchange transactions....... -- -- -- -- --
---------- ----------- ----------- ----------- ------------
NET GAIN (LOSS).................... -- 156,829 (6,582,289) 8,068,074 66,034,728
---------- ----------- ----------- ----------- ------------
Net change in unrealized
appreciation/ depreciation on:
Investments......................... -- (2,810,285) 2,970,883 6,666,854 158,207,532
Translation of forward foreign
currency contracts, other assets
and liabilities denominated in
foreign currencies................ -- -- -- -- --
---------- ----------- ----------- ----------- ------------
NET APPRECIATION (DEPRECIATION).... -- (2,810,285) 2,970,883 6,666,854 158,207,532
---------- ----------- ----------- ----------- ------------
NET GAIN (LOSS).................... -- (2,653,456) (3,611,406) 14,734,928 224,242,260
---------- ----------- ----------- ----------- ------------
NET INCREASE............................ $8,747,796 $12,920,991 $13,089,135 $22,193,129 $239,885,384
---------- ----------- ----------- ----------- ------------
---------- ----------- ----------- ----------- ------------
<FN>
- ------------------
* For the period January 21, 1997 (commencement of operations) through June
30, 1997.
** Net of $91,029, $75,500, $315, $599,210, $773,217, $133,650 and $18,938
foreign witholding tax, respectively.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
GLOBAL
CAPITAL DIVIDEND EUROPEAN PACIFIC
GROWTH GROWTH GROWTH GROWTH EQUITY
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
INCOME
Interest............................... $ 257,368 $ 299,562 $ 304,645 $ 109,673 $ 1,425,067
Dividends.............................. 176,273** 5,351,818** 4,704,425** 1,882,769** 2,167,343**
----------- ------------- ------------- ------------- -------------
TOTAL INCOME...................... 433,641 5,651,380 5,009,070 1,992,442 3,592,410
----------- ------------- ------------- ------------- -------------
EXPENSES
Investment management fee.............. 300,243 1,386,245 1,638,764 671,338 1,422,843
Professional fees...................... 13,955 16,290 16,656 19,910 14,130
Custodian fees......................... 11,777 141,836 116,231 242,500 31,834
Shareholder reports and notices........ 2,733 12,570 8,950 7,139 13,660
Trustees' fees and expenses............ 133 537 500 411 908
Transfer agent fees and expenses....... 248 248 248 248 248
Other.................................. 1,792 5,008 8,383 10,738 3,338
----------- ------------- ------------- ------------- -------------
TOTAL EXPENSES.................... 330,881 1,562,734 1,789,732 952,284 1,486,961
LESS: AMOUNTS WAIVED/ASSUMED...... -- -- -- -- --
----------- ------------- ------------- ------------- -------------
NET EXPENSES...................... 330,881 1,562,734 1,789,732 952,284 1,486,961
----------- ------------- ------------- ------------- -------------
NET INVESTMENT INCOME............. 102,760 4,088,646 3,219,338 1,040,158 2,105,449
----------- ------------- ------------- ------------- -------------
NET REALIZED AND UNREALIZED GAIN
(LOSS):
Net realized gain (loss) on:
Investments........................ 4,110,799 14,096,625 15,225,919 (3,834,238) 14,218,473
Options written.................... -- -- -- 1,365 --
Foreign exchange transactions...... -- 10,433 (15,182) (40,152) --
----------- ------------- ------------- ------------- -------------
NET GAIN (LOSS)................... 4,110,799 14,107,058 15,210,737 (3,873,025) 14,218,473
----------- ------------- ------------- ------------- -------------
Net change in unrealized
appreciation/ depreciation on:
Investments........................ 9,353,897 33,520,894 17,447,113 5,272,511 66,216,940
Translation of forward foreign
currency contracts, other assets
and liabilities denominated in
foreign currencies............... -- 23,508 1,407,700 2,967 --
----------- ------------- ------------- ------------- -------------
NET APPRECIATION (DEPRECIATION)... 9,353,897 33,544,402 18,854,813 5,275,478 66,216,940
----------- ------------- ------------- ------------- -------------
NET GAIN (LOSS)................... 13,464,696 47,651,460 34,065,550 1,402,453 80,435,413
----------- ------------- ------------- ------------- -------------
NET INCREASE........................... $13,567,456 $ 51,740,106 $ 37,284,888 $ 2,442,611 $ 82,540,862
----------- ------------- ------------- ------------- -------------
----------- ------------- ------------- ------------- -------------
<CAPTION>
CAPITAL INCOME
STRATEGIST APPRECIATION* BUILDER*
<S> <C> <C> <C>
- ---------------------------------------
INVESTMENT INCOME:
INCOME
Interest............................... $ 7,384,374 $ 74,785 $ 141,170
Dividends.............................. 1,702,260 2,629 134,076
------------- ------------ ------------
TOTAL INCOME...................... 9,086,634 77,414 275,246
------------- ------------ ------------
EXPENSES
Investment management fee.............. 1,105,914 29,788 34,116
Professional fees...................... 13,779 13,582 13,234
Custodian fees......................... 14,664 6,464 7,964
Shareholder reports and notices........ 10,212 3,579 1,430
Trustees' fees and expenses............ 1,277 659 46
Transfer agent fees and expenses....... 248 248 224
Other.................................. 4,684 -- 417
------------- ------------ ------------
TOTAL EXPENSES.................... 1,150,778 54,320 57,431
LESS: AMOUNTS WAIVED/ASSUMED...... -- (54,320) (57,431)
------------- ------------ ------------
NET EXPENSES...................... 1,150,778 -- --
------------- ------------ ------------
NET INVESTMENT INCOME............. 7,935,856 77,414 275,246
------------- ------------ ------------
NET REALIZED AND UNREALIZED GAIN
(LOSS):
Net realized gain (loss) on:
Investments........................ 9,415,066 (600,852) 76,803
Options written.................... -- -- --
Foreign exchange transactions...... -- -- --
------------- ------------ ------------
NET GAIN (LOSS)................... 9,415,066 (600,852) 76,803
------------- ------------ ------------
Net change in unrealized
appreciation/ depreciation on:
Investments........................ 22,660,994 1,214,876 774,275
Translation of forward foreign
currency contracts, other assets
and liabilities denominated in
foreign currencies............... -- -- --
------------- ------------ ------------
NET APPRECIATION (DEPRECIATION)... 22,660,994 1,214,876 774,275
------------- ------------ ------------
NET GAIN (LOSS)................... 32,076,060 614,024 851,078
------------- ------------ ------------
NET INCREASE........................... $ 40,011,916 $ 691,438 $ 1,126,324
------------- ------------ ------------
------------- ------------ ------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MONEY MARKET QUALITY INCOME PLUS
--------------------------- --------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE YEAR MONTHS ENDED FOR THE YEAR
JUNE 30, ENDED JUNE 30, ENDED
1997 DECEMBER 31, 1997 DECEMBER 31,
(UNAUDITED) 1996 (UNAUDITED) 1996
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income................... $ 8,747,796 $ 14,442,540 $ 15,574,447 $32,950,563
Net realized gain (loss)................ -- -- 156,829 (2,603,573 )
Net change in unrealized
appreciation/depreciation............. -- -- (2,810,285) (24,916,368 )
------------ ------------- ------------ ------------
NET INCREASE....................... 8,747,796 14,442,540 12,920,991 5,430,622
------------ ------------- ------------ ------------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net investment income................... (8,747,752) (14,442,318 ) (15,641,976) (33,491,200 )
Net realized gain....................... -- -- -- --
------------ ------------- ------------ ------------
TOTAL.............................. (8,747,752) (14,442,318 ) (15,641,976) (33,491,200 )
------------ ------------- ------------ ------------
TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST:
Net proceeds from sales................. 92,427,371 199,781,437 4,443,668 18,363,915
Reinvestment of dividends and
distributions......................... 8,747,752 14,442,318 15,641,986 33,491,200
Cost of shares repurchased.............. (78,707,757) (123,772,522 ) (39,643,044) (69,712,880 )
------------ ------------- ------------ ------------
NET INCREASE (DECREASE)............ 22,467,366 90,451,233 (19,557,390) (17,857,765 )
------------ ------------- ------------ ------------
TOTAL INCREASE (DECREASE).......... 22,467,410 90,451,455 (22,278,375) (45,918,343 )
NET ASSETS:
Beginning of period..................... 340,238,041 249,786,586 474,660,212 520,578,555
------------ ------------- ------------ ------------
END OF PERIOD...................... $362,705,451 $340,238,041 $452,381,837 $474,660,212
------------ ------------- ------------ ------------
------------ ------------- ------------ ------------
UNDISTRIBUTED NET INVESTMENT INCOME..... $ 288 $ 244 -- $ 67,529
------------ ------------- ------------ ------------
------------ ------------- ------------ ------------
SHARES ISSUED AND REPURCHASED:
Sold.................................... 92,427,371 199,781,437 433,855 1,751,757
Issued in reinvestment of dividends and
distributions......................... 8,747,752 14,442,318 1,530,424 3,241,058
Repurchased............................. (78,707,757) (123,772,522 ) (3,867,996) (6,752,796 )
------------ ------------- ------------ ------------
NET INCREASE (DECREASE)................. 22,467,366 90,451,233 (1,903,717) (1,759,981 )
------------ ------------- ------------ ------------
------------ ------------- ------------ ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
HIGH YIELD UTILITES
-------------------------- -------------------------- DIVIDEND GROWTH
------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE YEAR MONTHS ENDED FOR THE YEAR FOR THE SIX
JUNE 30, ENDED JUNE 30, ENDED MONTHS ENDED FOR THE YEAR
1997 DECEMBER 31, 1997 DECEMBER 31, JUNE 30, 1997 ENDED DECEMBER
(UNAUDITED) 1996 (UNAUDITED) 1996 (UNAUDITED) 31, 1996
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income.................. $ 16,700,541 $25,415,550 $ 7,458,201 $16,513,033 $ 15,643,124 $ 26,113,139
Net realized gain (loss)............... (6,582,289) (5,282,128 ) 8,068,074 5,380,515 66,034,728 76,341,307
Net change in unrealized
appreciation/depreciation............ 2,970,883 2,235,871 6,666,854 14,769,561 158,207,532 126,566,513
------------ ------------ ------------ ------------ -------------- --------------
NET INCREASE...................... 13,089,135 22,369,293 22,193,129 36,663,109 239,885,384 229,020,959
------------ ------------ ------------ ------------ -------------- --------------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net investment income.................. (16,492,603) (25,894,730 ) (7,457,900) (16,518,454 ) (15,643,133) (26,130,248)
Net realized gain...................... -- -- (5,380,334) (1,186,573 ) (76,862,063) (25,851,911)
------------ ------------ ------------ ------------ -------------- --------------
TOTAL............................. (16,492,603) (25,894,730 ) (12,838,234) (17,705,027 ) (92,505,196) (51,982,159)
------------ ------------ ------------ ------------ -------------- --------------
TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST:
Net proceeds from sales................ 39,353,485 97,281,752 328,753 10,173,470 144,824,227 216,135,874
Reinvestment of dividends and
distributions........................ 16,492,618 25,894,730 12,838,234 17,705,027 92,505,178 51,982,159
Cost of shares repurchased............. (5,959,908) (14,412,089 ) (54,485,578) (85,244,858 ) (12,267,679) (22,169,232)
------------ ------------ ------------ ------------ -------------- --------------
NET INCREASE (DECREASE)........... 49,886,195 108,764,393 (41,318,591) (57,366,361 ) 225,061,726 245,948,801
------------ ------------ ------------ ------------ -------------- --------------
TOTAL INCREASE (DECREASE)......... 46,482,727 105,238,956 (31,963,696) (38,408,279 ) 372,441,914 422,987,601
NET ASSETS:
Beginning of period.................... 259,548,541 154,309,585 440,661,866 479,070,145 1,288,404,427 865,416,826
------------ ------------ ------------ ------------ -------------- --------------
END OF PERIOD..................... $306,031,268 $259,548,541 $408,698,170 $440,661,866 $1,660,846,341 $1,288,404,427
------------ ------------ ------------ ------------ -------------- --------------
------------ ------------ ------------ ------------ -------------- --------------
UNDISTRIBUTED NET INVESTMENT INCOME.... $ 223,148 $ 15,210 $ 301 -- $ 96 $ 105
------------ ------------ ------------ ------------ -------------- --------------
------------ ------------ ------------ ------------ -------------- --------------
SHARES ISSUED AND REPURCHASED:
Sold................................... 6,462,994 15,513,116 21,146 688,255 7,340,440 12,705,268
Issued in reinvestment of dividends and
distributions........................ 2,732,226 4,153,525 831,893 1,195,247 4,567,039 3,121,829
Repurchased............................ (986,265) (2,293,681 ) (3,563,838) (5,772,285 ) (637,393) (1,315,470)
------------ ------------ ------------ ------------ -------------- --------------
NET INCREASE (DECREASE)................ 8,208,955 17,372,960 (2,710,799) (3,888,783 ) 11,270,086 14,511,627
------------ ------------ ------------ ------------ -------------- --------------
------------ ------------ ------------ ------------ -------------- --------------
<CAPTION>
CAPITAL GROWTH
-------------------------
FOR THE SIX
MONTHS ENDED FOR THE
JUNE 30, YEAR ENDED
1997 DECEMBER
(UNAUDITED) 31, 1996
<S> <C> <C>
- ---------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income.................. $ 102,760 $ 406,814
Net realized gain (loss)............... 4,110,799 11,957,509
Net change in unrealized
appreciation/depreciation............ 9,353,897 (4,318,064 )
------------ -----------
NET INCREASE...................... 13,567,456 8,046,259
------------ -----------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net investment income.................. (406,790) (132,322 )
Net realized gain...................... (11,642,834) (1,337,440 )
------------ -----------
TOTAL............................. (12,049,624) (1,469,762 )
------------ -----------
TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST:
Net proceeds from sales................ 6,956,890 21,627,226
Reinvestment of dividends and
distributions........................ 12,049,624 1,469,762
Cost of shares repurchased............. (5,382,843) (9,806,505 )
------------ -----------
NET INCREASE (DECREASE)........... 13,623,671 13,290,483
------------ -----------
TOTAL INCREASE (DECREASE)......... 15,141,503 19,866,980
NET ASSETS:
Beginning of period.................... 86,862,150 66,995,170
------------ -----------
END OF PERIOD..................... $102,003,653 $86,862,150
------------ -----------
------------ -----------
UNDISTRIBUTED NET INVESTMENT INCOME.... $ 102,442 $ 406,472
------------ -----------
------------ -----------
SHARES ISSUED AND REPURCHASED:
Sold................................... 397,780 1,329,674
Issued in reinvestment of dividends and
distributions........................ 710,054 96,568
Repurchased............................ (311,890) (611,382 )
------------ -----------
NET INCREASE (DECREASE)................ 795,944 814,860
------------ -----------
------------ -----------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENTS OF CHANGES IN NET ASSETS, CONTINUED
<TABLE>
<CAPTION>
GLOBAL DIVIDEND GROWTH EUROPEAN GROWTH
-------------------------- --------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE YEAR MONTHS ENDED FOR THE YEAR
JUNE 30, ENDED JUNE 30, ENDED
1997 DECEMBER 31, 1997 DECEMBER 31,
(UNAUDITED) 1996 (UNAUDITED) 1996
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income................... $ 4,088,646 $ 5,178,815 $ 3,219,338 $ 2,264,492
Net realized gain (loss)................ 14,107,058 17,454,295 15,210,737 19,547,703
Net change in unrealized
appreciation/depreciation............. 33,544,402 21,236,500 18,854,813 41,074,663
------------ ------------ ------------ ------------
NET INCREASE....................... 51,740,106 43,869,610 37,284,888 62,886,858
------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net investment income................... (4,441,032) (5,251,753 ) (3,760,260) (531,371 )
Net realized gain....................... (17,705,615) (6,985,312 ) (18,466,455) (11,996,632 )
------------ ------------ ------------ ------------
TOTAL.............................. (22,146,647) (12,237,065 ) (22,226,715) (12,528,003 )
------------ ------------ ------------ ------------
TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST:
Net proceeds from sales................. 59,933,312 90,625,831 42,198,517 60,993,831
Reinvestment of dividends and
distributions......................... 22,146,643 12,237,065 22,226,715 12,528,003
Cost of shares repurchased.............. (3,535,684) (5,413,023 ) (7,297,747) (9,578,044 )
------------ ------------ ------------ ------------
NET INCREASE (DECREASE)............ 78,544,271 97,449,873 57,127,485 63,943,790
------------ ------------ ------------ ------------
TOTAL INCREASE (DECREASE).......... 108,137,730 129,082,418 72,185,658 114,302,645
NET ASSETS:
Beginning of period..................... 334,820,942 205,738,524 302,422,054 188,119,409
------------ ------------ ------------ ------------
END OF PERIOD...................... $442,958,672 $334,820,942 $374,607,712 $302,422,054
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
UNDISTRIBUTED NET INVESTMENT INCOME..... $ (3,933)** $ 348,453 $ 1,718,705 $ 2,259,627
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
SHARES ISSUED AND REPURCHASED:
Sold.................................... 4,371,924 7,330,384 1,900,025 3,131,701
Issued in reinvestment of dividends and
distributions......................... 1,564,658 1,008,262 983,918 677,922
Repurchased............................. (260,394) (440,583 ) (327,701) (514,185 )
------------ ------------ ------------ ------------
NET INCREASE (DECREASE)................. 5,676,188 7,898,063 2,556,242 3,295,438
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
<FN>
- ------------------
* For the period January 21, 1997 (commencement of operations) through June
30, 1997.
** Dividends in excess of net investment income.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PACIFIC GROWTH EQUITY STRATEGIST
-------------------------- -------------------------- --------------------------
FOR THE SIX FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE YEAR MONTHS ENDED FOR THE YEAR MONTHS ENDED FOR THE YEAR
JUNE 30, ENDED JUNE 30, ENDED JUNE 30, ENDED
1997 DECEMBER 31, 1997 DECEMBER 31, 1997 DECEMBER 31,
(UNAUDITED) 1996 (UNAUDITED) 1996 (UNAUDITED) 1996
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income.................. $ 1,040,158 $ 1,412,599 $ 2,105,449 $ 2,556,972 $ 7,935,856 $13,143,825
Net realized gain (loss)............... (3,873,025) (2,475,077 ) 14,218,473 42,116,968 9,415,066 9,836,251
Net change in unrealized
appreciation/depreciation............ 5,275,478 3,540,345 66,216,940 5,775,201 22,660,994 32,734,426
------------ ------------ ------------ ------------ ------------ ------------
NET INCREASE...................... 2,442,611 2,477,867 82,540,862 50,449,141 40,011,916 55,714,502
------------ ------------ ------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net investment income.................. (1,891,258) (1,651,362 ) (2,106,164) (2,577,952 ) (7,933,398) (13,174,571)
Net realized gain...................... -- -- (43,430,212) (54,814,557 ) (10,026,594) (3,569,367)
------------ ------------ ------------ ------------ ------------ ------------
TOTAL............................. (1,891,258) (1,651,362 ) (45,536,376) (57,392,509 ) (17,959,992) (16,743,938)
------------ ------------ ------------ ------------ ------------ ------------
TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST:
Net proceeds from sales................ 11,138,156 66,862,929 52,764,227 132,116,853 22,590,103 25,629,890
Reinvestment of dividends and
distributions........................ 1,891,258 1,651,362 45,536,376 57,392,509 17,959,991 16,743,938
Cost of shares repurchased............. (19,966,091) (23,134,634 ) (22,224,825) (20,436,940 ) (15,400,830) (46,155,709)
------------ ------------ ------------ ------------ ------------ ------------
NET INCREASE (DECREASE)........... (6,936,677) 45,379,657 76,075,778 169,072,422 25,149,264 (3,781,881)
------------ ------------ ------------ ------------ ------------ ------------
TOTAL INCREASE (DECREASE)......... (6,385,324) 46,206,162 113,080,264 162,129,054 47,201,188 35,188,683
NET ASSETS:
Beginning of period.................... 144,536,457 98,330,295 521,908,424 359,779,370 423,767,852 388,579,169
------------ ------------ ------------ ------------ ------------ ------------
END OF PERIOD..................... $138,151,133 $144,536,457 $634,988,688 $521,908,424 $470,969,040 $423,767,852
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
UNDISTRIBUTED NET INVESTMENT INCOME.... $ 812,888 $ 1,663,988 $ 48 $ 763 $ 19,025 $ 16,567
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
SHARES ISSUED AND REPURCHASED:
Sold................................... 1,136,342 6,522,537 1,865,912 4,838,072 1,582,854 1,954,971
Issued in reinvestment of dividends and
distributions........................ 188,937 173,462 1,613,652 2,452,920 1,260,034 1,285,378
Repurchased............................ (2,037,810) (2,326,246 ) (786,582) (770,532 ) (1,082,773) (3,573,439)
------------ ------------ ------------ ------------ ------------ ------------
NET INCREASE (DECREASE)................ (712,531) 4,369,753 2,692,982 6,520,460 1,760,115 (333,090)
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
<CAPTION>
CAPITAL INCOME
APPRECIATION BUILDER
----------- -----------
FOR THE SIX FOR THE SIX
MONTHS MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
1997* 1997*
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
- ---------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income.................. $ 77,414 $ 275,246
Net realized gain (loss)............... (600,852) 76,803
Net change in unrealized
appreciation/depreciation............ 1,214,876 774,275
----------- -----------
NET INCREASE...................... 691,438 1,126,324
----------- -----------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net investment income.................. -- (272,484)
Net realized gain...................... -- --
----------- -----------
TOTAL............................. -- (272,484)
----------- -----------
TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST:
Net proceeds from sales................ 14,673,617 19,221,839
Reinvestment of dividends and
distributions........................ -- 272,484
Cost of shares repurchased............. (1,137,676) (284,595)
----------- -----------
NET INCREASE (DECREASE)........... 13,535,941 19,209,728
----------- -----------
TOTAL INCREASE (DECREASE)......... 14,227,379 20,063,568
NET ASSETS:
Beginning of period.................... 10 10
----------- -----------
END OF PERIOD..................... $14,227,389 $20,063,578
----------- -----------
----------- -----------
UNDISTRIBUTED NET INVESTMENT INCOME.... $ 77,414 $ 2,762
----------- -----------
----------- -----------
SHARES ISSUED AND REPURCHASED:
Sold................................... 1,493,791 1,892,294
Issued in reinvestment of dividends and
distributions........................ -- 26,161
Repurchased............................ (115,295) (28,880)
----------- -----------
NET INCREASE (DECREASE)................ 1,378,496 1,889,575
----------- -----------
----------- -----------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENTS SERIES
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1997 (UNAUDITED)
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter Variable Investment Series (the "Fund") is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. Investments in the Fund may be made only by (1)
Northbrook Life Insurance Company to fund the benefits under variable annuity
contracts and variable life insurance contracts it issues; (2) Allstate Life
Insurance Company of New York to fund the benefits under variable annuity
contracts it issues; (3) Glenbrook Life and Annuity Company to fund the benefits
under variable annuity contracts and variable life insurance contracts it
issues; and (4) Paragon Life Insurance Company to fund the benefits under
variable life insurance contracts it issues to certain employees of Morgan
Stanley, Dean Witter, Discover & Co., the parent company of Dean Witter
InterCapital Inc. (the "Investment Manager").
The Fund, organized on February 25, 1983 as a Massachusetts business trust,
consists of thirteen Portfolios ("Portfolios") which commenced operations as
follows:
<TABLE>
<CAPTION>
COMMENCEMENT COMMENCEMENT
OF OF
PORTFOLIO OPERATIONS PORTFOLIO OPERATIONS
- --------------------------------------------- ----------- --------------------------------------------- -----------
<S> <C> <C> <C>
March 9, March 1,
Money Market................................. 1984 European Growth.............................. 1991
March 1, February
Quality Income Plus.......................... 1987 Pacific Growth............................... 23, 1994
March 9, March 9,
High Yield................................... 1984 Equity....................................... 1984
March 1, March 1,
Utilities.................................... 1990 Strategist................................... 1987
March 1, January 21,
Dividend Growth.............................. 1990 Capital Appreciation......................... 1997
March 1, January 21,
Capital Growth............................... 1991 Income Builder............................... 1997
February
Global Dividend Growth....................... 23, 1994
</TABLE>
<TABLE>
<CAPTION>
The investment objectives of each Portfolio are as follows:
<S> <C>
<CAPTION>
PORTFOLIO INVESTMENT OBJECTIVE
<S> <C>
Money Market Seeks high current income, preservation of capital and liquidity
by investing in short-term money market instruments.
Quality Income Seeks, as its primary objective, to earn a high level of current
Plus income and, as a secondary objective, capital appreciation, but
only when consistent with its primary objective, by investing
primarily in U.S. Government securities and higher-rated fixed
income securities.
High Yield Seeks, as its primary objective, to earn a high level of current
income and, as a secondary objective, capital appreciation, but
only when consistent with its primary objective, by investing
primarily in lower-rated fixed income securities.
Utilities Seeks to provide current income and long-term growth of income
and capital by investing primarily in equity and fixed income
securities of companies engaged in the public utilities industry.
Dividend Seeks to provide reasonable current income and long-term growth
Growth of income and capital by investing primarily in common stock of
companies with a record of paying dividends and the potential for
increasing dividends.
<PAGE>
</TABLE>
DEAN WITTER VARIABLE INVESTMENTS SERIES
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PORTFOLIO INVESTMENT OBJECTIVE
<S> <C>
Capital Growth Seeks long-term capital growth by investing primarily in common
stocks.
Global Seeks to provide reasonable current income and long-term growth
Dividend of income and capital by investing primarily in common stocks of
Growth companies, issued by issuers worldwide, with a record of paying
dividends and the potential for increasing dividends.
European Seeks to maximize the capital appreciation of its investments by
Growth investing primarily in securities issued by issuers located in
Europe.
Pacific Growth Seeks to maximize the capital appreciation of its investments by
investing primarily in securities issued by issuers located in
Asia, Australia and New Zealand.
Equity Seeks, as its primary objective, capital growth and, as a
secondary objective, income, but only when consistent with its
primary objective, by investing primarily in common stocks.
Strategist Seeks a high total investment return through a fully managed
investment policy utilizing equity, investment grade fixed income
and money market securities and writing covered options.
Capital Seeks long-term capital appreciation by investing primarily in
Appreciation the common stocks of U.S. companies that offer the potential for
either superior earnings growth and/or appear to be undervalued.
Income Builder Seeks, as its primary objective, to earn reasonable income and,
as a secondary objective, growth of capital by investing
primarily in income-producing equity securities.
</TABLE>
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 -- Money Market: Securities are valued at amortized
cost which approximates market value. All remaining Portfolios: (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 (in cases where securities are traded on more
than one exchange, the securities are valued on the exchange designated as the
primary market pursuant to procedures adopted by the Trustees); (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) listed options are valued at the latest sale price on the
exchange on which they are listed unless no sales of such options have taken
place that day, in which case they are valued at the mean between their latest
bid and asked price; (4) when market quotations are not readily available,
including circumstances under which it is determined by the Investment Manager
(or, in the case of European Growth and Pacific Growth, by Morgan Grenfell
Investment Services Limited (the "Sub-
<PAGE>
DEAN WITTER VARIABLE INVESTMENTS SERIES
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
Adviser")) 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 also be based upon current market prices of securities
which are comparable in coupon, rating and maturity or an appropriate matrix
utilizing similar factors); (5) certain of the Fund's portfolio securities may
be valued by an outside pricing service approved by the Trustees. The pricing
service may utilize a matrix system incorporating security quality, maturity and
coupon as the evaluation model parameters, and/or research and evaluations by
its staff, including review of broker-dealer market price quotations in
determining what it believes is the fair valuation of the securities valued by
such pricing service; and (6) short-term debt securities having a maturity date
of more than sixty days at the 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.
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
except for certain dividends on foreign securities which are recorded as soon as
the Fund is informed after the ex-dividend date. Interest income is accrued
daily except where collection is not expected. Money Market amortizes premiums
and accretes discounts on securities owned; gains and losses realized upon the
sale of securities are based on amortized cost. Discounts for all other
Portfolios are accreted over the life of the respective securities.
C. ACCOUNTING FOR OPTIONS -- (1) Written options on debt obligations, equities
and foreign currency: When the Fund writes a call or put option, an amount equal
to the premium received is included in the Fund's Statement of Assets and
Liabilities as a liability which is subsequently marked-to-market to reflect the
current market value of the option written. If a written option either expires
or the Fund enters into a closing purchase transaction, the Fund realizes a gain
or loss without regard to any unrealized gain or loss on the underlying security
or currency and the liability related to such option is extinguished. If a
written call option is exercised, the Fund realizes a gain or loss from the sale
of the underlying security or currency and the proceeds from such sale are
increased by the premium originally received. If a put option which the Fund has
written is exercised, the amount of the premium originally received reduces the
cost of the security which the Fund purchases upon exercise of the option; and
(2) purchased options on debt obligations, equities and foreign currency:
<PAGE>
DEAN WITTER VARIABLE INVESTMENTS SERIES
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
When the Fund purchases a call or put option, the premium paid is recorded as an
investment and is subsequently marked-to-market to reflect the current market
value. If a purchased option expires, the Fund will realize a loss to the extent
of the premium paid. If the Fund enters into a closing sale transaction, a gain
or loss is realized for the difference between the proceeds from the sale and
the cost of the option. If a put option is exercised, the cost of the security
sold upon exercise will be increased by the premium originally paid. If a call
option is exercised, the cost of the security purchased upon exercise will be
increased by the premium originally paid.
D. FOREIGN CURRENCY TRANSLATION -- The books and records of the Portfolios
investing in foreign currency denominated transactions are translated into U.S.
dollars as follows: (1) the foreign currency market value of investment
securities, other assets and liabilities and forward foreign currency contracts
are translated at the exchange rates prevailing at the end of the period; and
(2) purchases, sales, income and expenses are translated at the exchange rates
prevailing on the respective dates of such transactions. The resultant exchange
gains and losses are included in the Statement of Operations as realized and
unrealized gain/loss on foreign exchange transactions. Pursuant to U.S. Federal
income tax regulations, certain foreign exchange gains/losses included in
realized and unrealized gain/loss are included in or are a reduction of ordinary
income for federal income tax purposes. The Portfolios do not isolate that
portion of the results of operations arising as a result of changes in the
foreign exchange rates from the changes in the market prices of the securities.
E. FORWARD FOREIGN CURRENCY CONTRACTS -- Some of the Portfolios may enter into
forward foreign currency contracts which are valued daily at the appropriate
exchange rates. The resultant unrealized exchange gains and losses are included
in the Statement of Operations as unrealized gain/loss on foreign exchange
transactions. The Portfolios record realized gains or losses on delivery of the
currency or at the time the forward contract is extinguished (compensated) by
entering into a closing transaction prior to delivery.
F. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply individually
for each Portfolio 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.
G. 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"
<PAGE>
DEAN WITTER VARIABLE INVESTMENTS SERIES
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
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.
H. EXPENSES -- Direct expenses are charged to the respective Portfolio and
general Fund expenses are allocated on the basis of relative net assets or
equally among the Portfolios.
2. INVESTMENT MANAGEMENT AND SUB-ADVISORY AGREEMENT
Pursuant to an Investment Management Agreement (the "Agreement"), the Fund pays
the Investment Manager a management fee, accrued daily and payable monthly, by
applying the following annual rates to each Portfolios' net assets determined at
the close of each business day: Money Market, High Yield and Strategist-0.50%;
Quality Income Plus-0.50% to the portion of daily net assets not exceeding $500
million and 0.45% to the portion of daily net assets exceeding $500 million;
Utilities-0.65% to the portion of daily net assets not exceeding $500 million
and 0.55% to the portion of daily net assets exceeding $500 million; Capital
Growth-0.65%; Global Dividend Growth, Capital Appreciation and Income
Builder-0.75%; European Growth and Pacific Growth-1.0%; Dividend Growth-0.625%
to the portion of daily net assets not exceeding $500 million; 0.50% to the
portion of daily net assets exceeding $500 million but not exceeding $1 billion
and 0.475% to the portion of daily net assets exceeding $1 billion; and
Equity-0.50% to the portion of daily net assets not exceeding $1 billion and
0.475% to the portion of daily net assets exceeding $1 billion.
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
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.
Under a Sub-Advisory Agreement between the Investment Manager and the
Sub-Adviser, the Sub-Adviser provides the European Growth and Pacific Growth
with investment advice and portfolio management relating to the Portfolios'
investments in securities, subject to the overall supervision of
<PAGE>
DEAN WITTER VARIABLE INVESTMENTS SERIES
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
the Investment Manager. As compensation for its services provided pursuant to
the Sub-Advisory Agreement, the Investment Manager pays the Sub-Adviser monthly
compensation equal to 40% of its monthly compensation.
The Investment Manager has undertaken to reimburse all operating expenses and
waive the compensation provided for in its Investment Management Agreement with
Capital Appreciation and Income Builder until such time as the respective
Portfolios have $50 million of net assets or July 31, 1998, whichever occurs
first. At June 30, 1997, included in the Statements of Assets and Liabilities
are receivables from an affiliate which represent expense reimbursements due to
the Portfolios.
3. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
Purchases and sales/maturities of portfolio securities, excluding short-term
investments (except for the Money Market Portfolio), for the period ended June
30, 1997 were as follows:
<TABLE>
<CAPTION>
U.S. GOVERNMENT SECURITIES OTHER
---------------------------- --------------------------
PURCHASES SALES/MATURITIES PURCHASES SALES/MATURITIES
----------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
Money Market..................................................... $11,015,516 $ 9,068,874 $630,055,609 $616,749,955
Quality Income Plus.............................................. 279,811,094 290,059,552 109,322,037 116,564,150
High Yield....................................................... -- -- 116,374,407 55,531,254
Utilities........................................................ -- -- 30,364,452 72,627,579
Dividend Growth.................................................. -- 3,296,094 292,543,297 157,806,480
Capital Growth................................................... 650,435 769,798 57,674,533 52,207,665
Global Dividend Growth........................................... -- -- 136,370,994 83,895,365
European Growth.................................................. -- -- 105,164,853 60,919,554
Pacific Growth................................................... -- -- 47,143,990 50,453,295
Equity........................................................... -- 15,045,308 385,740,777 339,933,754
Strategist....................................................... 59,781,947 103,622,501 231,131,756 246,972,028
Capital Appreciation............................................. -- -- 15,596,012 2,692,542
Income Builder................................................... 303,829 -- 19,121,215 2,648,447
</TABLE>
Included in the payable for investments purchased at June 30, 1997 for Capital
Growth, Global Dividend Growth, Capital Appreciation and Income Builder are
$224,659, $1,265,423, $101,348 and $142,324, respectively, for unsettled trades
with Dean Witter Reynolds Inc. ("DWR"), an affiliate of the Investment Manager.
Included in the receivable for investments sold at June 30, 1997 for Capital
Growth, and Dividend Growth are $150,295, and $801,998, respectively, for
unsettled trades with DWR.
Included in the receivable for investments sold at June 30, 1997 for Capital
Growth and Global Dividend Growth are $218,493 and $298,946, respectively, for
unsettled trades with Morgan Stanley & Co. Inc. ("Morgan Stanley"), an affiliate
of the Investment Manager since May 31, 1997.
<PAGE>
DEAN WITTER VARIABLE INVESTMENTS SERIES
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
For the period ended June 30, 1997, the following Portfolios incurred
commissions with DWR for portfolio transactions executed on behalf of the
Portfolio:
<TABLE>
<CAPTION>
GLOBAL
DIVIDEND CAPITAL DIVIDEND CAPITAL INCOME
UTILITIES GROWTH GROWTH GROWTH EQUITY STRATEGIST APPRECIATION BUILDER
----------- -------------- ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 20,000 $ 56,305 $ 14,021 $ 22,044 $ 28,168 $ 15,800 $ 12,810 $ 9,925
----------- ------- ------------ ------------ ------------ ------------ ------------ ------
----------- ------- ------------ ------------ ------------ ------------ ------------ ------
</TABLE>
For the period May 31, 1997 through June 30, 1997, Capital Growth, Global
Dividend Growth and European Growth incurred brokerage commissions of $250,
$18,010 and $8,136, respectively, with Morgan Stanley, for portfolio
transactions executed on behalf of the Portfolio.
For the six months ended June 30, 1997, Pacific Growth incurred brokerage
commissions of $7,479 with affiliates of the Sub-Adviser for portfolio
transactions executed on behalf of the Portfolio.
Dean Witter Trust Company, an affiliate of the Investment Manager, is the Fund's
transfer agent.
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 June 30, 1997
included in Trustees' fees and expenses in the Statement of Operations and the
accrued pension liability included in accrued expenses in the Statement of
Assets and Liabilities are as follows:
<TABLE>
<CAPTION>
QUALITY
MONEY INCOME HIGH
MARKET PLUS YIELD UTILITIES
----------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
Aggregate Pension Cost........................................... $ 275 $ 539 $ -- $ 510
----------- ------- ----------- ------
----------- ------- ----------- ------
Accrued Pension Liability........................................ $ 11,334 $ 10,196 $ 3,387 $ 5,033
----------- ------- ----------- ------
----------- ------- ----------- ------
<CAPTION>
GLOBAL
DIVIDEND EUROPEAN PACIFIC
GROWTH GROWTH GROWTH EQUITY
----------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
Aggregate Pension Cost........................................... $ 84 $ 118 $ 49 $ 249
----------- ------- ----------- ------
----------- ------- ----------- ------
Accrued Pension Liability........................................ $ 453 $ 730 $ 1,235 $ 5,109
----------- ------- ----------- ------
----------- ------- ----------- ------
<CAPTION>
DIVIDEND CAPITAL
GROWTH GROWTH
------------ ------------
<S> <C> <C>
Aggregate Pension Cost........................................... $ 613 $ 52
------ -----
------ -----
Accrued Pension Liability........................................ $ 8,363 $ 329
------ -----
------ -----
STRATEGIST
------------
<S> <C> <C>
Aggregate Pension Cost........................................... $ 432
------
------
Accrued Pension Liability........................................ $ 8,111
------
------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENTS SERIES
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
4. FEDERAL INCOME TAX STATUS
At December 31, 1996, the following Portfolios had an approximate net capital
loss carryover which may be used to offset future capital gains to the extent
provided by regulations:
<TABLE>
<CAPTION>
AMOUNTS IN THOUSANDS
Available through ---------------------------------------------------------
December 31, 1997 1998 1999 2000
- ----------------------------------------------------------------- ----------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
Quality Income Plus.............................................. -- -- -- --
High Yield....................................................... $ 10,694 $ 34,291 $ 7,336 $ 3,057
Pacific Growth................................................... -- -- -- --
<CAPTION>
Available through
December 31, 2001 2002 2003 2004
- ----------------------------------------------------------------- ------------ ------------ ------------ ------------
<S> <C>
Quality Income Plus.............................................. -- $ 24,848 -- $ 2,604
High Yield....................................................... $ 4,736 3,256 $ 2,984 5,521
Pacific Growth................................................... -- -- 1,398 5,350
<CAPTION>
Available through
December 31, TOTAL
- ----------------------------------------------------------------- ------------
Quality Income Plus.............................................. $ 27,452
High Yield....................................................... 71,875
Pacific Growth................................................... 6,748
</TABLE>
Net capital and net currency losses incurred after October 31 ("post-October
losses") within the taxable year are deemed to arise on the first business day
of the Portfolios' next taxable year. The following Portfolios incurred and will
elect to defer post-October losses during fiscal 1996:
<TABLE>
<CAPTION>
GLOBAL
DIVIDEND EUROPEAN PACIFIC
HIGH YIELD GROWTH GROWTH GROWTH
----------- -------------- ----------- ------------
<S> <C> <C> <C>
$ 218,000 $ 9,000 $ 289,000 $ 488,000
----------- ------ ----------- ------------
----------- ------ ----------- ------------
</TABLE>
At December 31, 1996, the primary reason(s) for significant temporary book/tax
differences were as follows:
<TABLE>
<CAPTION>
LOSS DEFERRALS
POST-OCTOBER FROM WASH
LOSSES SALES
----------- --------------
<S> <C> <C>
Quality Income Plus.............................................. -
High Yield....................................................... - -
Utilities........................................................ -
Dividend Growth.................................................. -
Capital Growth................................................... -
Global Dividend Growth........................................... - -
European Growth.................................................. - -
Pacific Growth................................................... - -
Equity........................................................... -
Strategist....................................................... -
</TABLE>
Additionally, Global Dividend Growth, European Growth and Pacific Growth
Portfolios had temporary differences attributable to income from the
mark-to-market of passive foreign investment companies.
5. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS
Global Dividend Growth, European Growth and Pacific Growth may enter into
forward foreign currency contracts ("forward contracts") to facilitate
settlement of foreign currency denominated portfolio transactions or to manage
foreign currency exposure associated with foreign currency denominated
securities. Such Portfolios may also purchase and write put options on foreign
currencies in which the Portfolios' securities are denominated to protect
against a decline in value of such securities due to currency devaluations.
<PAGE>
DEAN WITTER VARIABLE INVESTMENTS SERIES
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1997 (UNAUDITED) CONTINUED
Forward contracts and over-the-counter put options on foreign currencies involve
elements of market risk in excess of the amounts reflected in the Statement of
Assets and Liabilities. The Portfolios bear the risk of an unfavorable change in
the foreign exchange rates underlying the forward contracts. Risks may also
arise upon entering into these contracts and over-the-counter put options on
foreign currencies from the potential inability of the counterparties to meet
the terms of their contracts.
At June 30, 1997, Global Dividend Growth, European Growth and Pacific Growth had
outstanding forward contracts used to facilitate settlement of foreign currency
denominated portfolio transactions and to manage foreign currency exposure.
At June 30, 1997, European Growth's investments in securities of issuers in the
United Kingdom represented 32.0% of the Portfolio's net assets. The Pacific
Growth Portfolio's investments in securities of issuers in Hong Kong represented
32.1% of the Portfolio's net assets. These investments, which involve risks and
considerations not present with respect to U.S. securities, may be affected by
economic or political developments in these regions.
At June 30, 1997, Global Dividend Growth's, European Growth's and Pacific
Growth's cash balance consisted principally of interest bearing deposits with
Chase Manhattan Bank N.A., the custodian of each Portfolio.
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
NET ASSET
VALUE NET NET REALIZED TOTAL FROM DISTRIBUTIONS TOTAL DIVIDENDS
BEGINNING INVESTMENT AND UNREALIZED INVESTMENT DIVIDENDS TO TO AND
YEAR ENDED DECEMBER 31 OF PERIOD INCOME GAIN (LOSS) OPERATIONS SHAREHOLDERS SHAREHOLDERS DISTRIBUTIONS
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MONEY MARKET
1992 $ 1.00 $0.034 -- $0.034 $(0.034) -- $(0.034)
1993 1.00 0.027 -- 0.027 (0.027) -- (0.027)
1994 1.00 0.037 -- 0.037 (0.037) -- (0.037)
1995 1.00 0.055 -- 0.055 (0.055) -- (0.055)
1996 1.00 0.050 -- 0.050 (0.050) -- (0.050)
1997(a) 1.00 0.025 -- 0.025 (0.025) -- (0.025)
QUALITY INCOME PLUS
1992 10.34 0.77 $ 0.05 0.82 (0.77) -- (0.77)
1993 10.39 0.69 0.64 1.33 (0.69) -- (0.69)
1994 11.03 0.69 (1.40) (0.71) (0.69) $(0.18) (0.87)
1995 9.45 0.72 1.50 2.22 (0.71) -- (0.71)
1996 10.96 0.71 (0.58) 0.13 (0.72) -- (0.72)
1997(a) 10.37 0.35 (0.05) 0.30 (0.35) -- (0.35)
HIGH YIELD
1992 6.25 0.96 0.18 1.14 (0.96) -- (0.96)
1993 6.43 0.81 0.68 1.49 (0.81) -- (0.81)
1994 7.11 0.79 (0.95) (0.16) (0.79) -- (0.79)
1995 6.16 0.80 0.08 0.88 (0.78) -- (0.78)
1996 6.26 0.77 (0.06) 0.71 (0.79) -- (0.79)
1997(a) 6.18 0.35 (0.09) 0.26 (0.35) -- (0.35)
UTILITIES
1992 11.47 0.51 0.88 1.39 (0.52) -- (0.52)
1993 12.34 0.49 1.43 1.92 (0.50) (0.02) (0.52)
1994 13.74 0.53 (1.75) (1.22) (0.52) (0.08) (0.60)
1995 11.92 0.53 2.81 3.34 (0.58) -- (0.58)
1996 14.68 0.55 0.70 1.25 (0.55) (0.04) (0.59)
1997(a) 15.34 0.28 0.57 0.85 (0.28) (0.21) (0.49)
DIVIDEND GROWTH
1992 11.00 0.37 0.51 0.88 (0.37) -- (0.37)
1993 11.51 0.36 1.27 1.63 (0.36) -- (0.36)
1994 12.78 0.38 (0.80) (0.42) (0.37) -- (0.37)
1995 11.99 0.38 3.89 4.27 (0.41) (0.26) (0.67)
1996 15.59 0.41 3.22 3.63 (0.41) (0.41) (0.82)
1997(a) 18.40 0.21 3.03 3.24 (0.21) (1.00) (1.21)
CAPITAL GROWTH
1992 12.69 0.07 0.13 0.20 (0.08) (0.02) (0.10)
1993 12.79 0.08 (0.98) (0.90) (0.08) -- (0.08)
1994 11.81 0.10 (0.26) (0.16) (0.10) (0.03) (0.13)
1995 11.52 0.10 3.68 3.78 (0.08) -- (0.08)
1996 15.22 0.08 1.65 1.73 (0.03) (0.27) (0.30)
1997(a) 16.65 0.02 2.57 2.59 (0.08) (2.19) (2.27)
</TABLE>
<TABLE>
<C> <S>
- ---------------------
(a) For the six months ended June 30, 1997 (unaudited).
+ Calculated based on the net asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET
ASSETS
NET ASSETS -----------------------
NET ASSET TOTAL AT END OF NET PORTFOLIO AVERAGE
VALUE END INVESTMENT PERIOD INVESTMENT TURNOVER COMMISSION
OF PERIOD RETURN+ (000'S) EXPENSES INCOME RATE RATE PAID
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MONEY MARKET
1992 $ 1.00 3.43 % $ 96,151 0.59 % 3.38 % N/A N/A
1993 1.00 2.75 129,925 0.57 2.71 N/A N/A
1994 1.00 3.81 268,624 0.55 3.93 N/A N/A
1995 1.00 5.66 249,787 0.53 5.52 N/A N/A
1996 1.00 5.11 340,238 0.52 4.97 N/A N/A
1997(a) 1.00 2.52(1) 362,705 0.52(2) 5.02(2) N/A N/A
QUALITY INCOME PLUS
1992 10.39 8.26 163,368 0.58 7.41 148 % N/A
1993 11.03 12.99 487,647 0.56 6.17 219 N/A
1994 9.45 (6.63) 414,905 0.54 6.88 254 N/A
1995 10.96 24.30 520,579 0.54 7.07 162 N/A
1996 10.37 1.56 474,660 0.53 6.84 182 N/A
1997(a) 10.32 3.01(1) 452,382 0.52(2) 6.87(2) 86(1) N/A
HIGH YIELD
1992 6.43 18.35 40,042 0.74 14.05 204 N/A
1993 7.11 24.08 90,200 0.60 11.80 177 N/A
1994 6.16 (2.47) 111,934 0.59 11.71 105 N/A
1995 6.26 14.93 154,310 0.54 12.67 58 N/A
1996 6.18 11.98 259,549 0.51 12.59 57 N/A
1997(a) 6.09 4.48(1) 306,031 0.53(2) 12.07(2) 21(1) N/A
UTILITIES
1992 12.34 12.64 153,748 0.73 4.63 26 --
1993 13.74 15.69 490,934 0.71 3.75 11 --
1994 11.92 (9.02) 382,412 0.68 4.21 15 --
1995 14.68 28.65 479,070 0.68 4.00 13 --
1996 15.34 8.68 440,662 0.67 3.61 9 $0.0543
1997(a) 15.70 5.65(1) 408,698 0.68(2) 3.62(2) 7(1) 0.0561
DIVIDEND GROWTH
1992 11.51 8.16 192,551 0.69 3.42 4 --
1993 12.78 14.34 483,145 0.68 3.01 6 --
1994 11.99 (3.27) 572,952 0.64 3.13 20 --
1995 15.59 36.38 865,417 0.61 2.75 24 --
1996 18.40 23.96 1,288,404 0.57 2.46 23 0.0553
1997(a) 20.43 17.68(1) 1,660,846 0.55(2) 2.21(2) 11(1) 0.0557
CAPITAL GROWTH
1992 12.79 1.64 45,105 0.86 0.62 22 --
1993 11.81 (6.99) 50,309 0.74 0.78 36 --
1994 11.52 (1.28) 45,715 0.77 0.90 37 --
1995 15.22 32.92 66,995 0.74 0.70 34 --
1996 16.65 11.55 86,862 0.73 0.52 98 0.0570
1997(a) 16.97 15.55(1) 102,004 0.72(2) 0.22(2) 63(1) 0.0577
</TABLE>
<TABLE>
<C> <S>
- ---------------------
(a) For the six months ended June 30, 1997 (unaudited).
+ Calculated based on the net asset value as of the last business day of the
(1) Not annualized.
(2) Annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL HIGHLIGHTS, CONTINUED
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
NET ASSET
VALUE NET NET REALIZED TOTAL FROM DISTRIBUTIONS TOTAL DIVIDENDS
BEGINNING INVESTMENT AND UNREALIZED INVESTMENT DIVIDENDS TO TO AND
YEAR ENDED DECEMBER 31 OF PERIOD INCOME GAIN (LOSS) OPERATIONS SHAREHOLDERS SHAREHOLDERS DISTRIBUTIONS
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
GLOBAL DIVIDEND GROWTH
1994(b) $ 10.00 $ 0.23 $(0.20) $ 0.03 $(0.21) -- $(0.21)
1995 9.82 0.24 1.90 2.14 (0.26) $(0.01) (0.27)
1996 11.69 0.24 1.75 1.99 (0.24) (0.31) (0.55)
1997(a) 13.13 0.14 1.69 1.83 (0.15) (0.60) (0.75)
EUROPEAN GROWTH
1992 9.89 0.08 0.32 0.40 (0.10) (0.01) (0.11)
1993 10.18 0.12 3.98 4.10 (0.12) (0.13) (0.25)
1994 14.03 0.17 0.96 1.13 (0.16) (0.44) (0.60)
1995 14.56 0.20 3.50 3.70 (0.19)* (0.54) (0.73)
1996 17.53 0.17 4.91 5.08 (0.04) (1.01) (1.05)
1997(a) 21.56 0.18 2.27 2.45 (0.24) (1.18) (1.42)
PACIFIC GROWTH
1994(b) 10.00 0.07 (0.74) (0.67) -- (0.07) (0.07)
1995 9.26 0.12 0.41 0.53 (0.09) -- (0.09)
1996 9.70 0.05 0.32 0.37 (0.11) -- (0.11)
1997(a) 9.96 0.08 0.12 0.20 (0.14) -- (0.14)
EQUITY
1992 22.14 0.23 (0.47) (0.24) (0.24) (1.86) (2.10)
1993 19.80 0.15 3.63 3.78 (0.15) (1.28) (1.43)
1994 22.15 0.23 (1.31) (1.08) (0.22) (1.60) (1.82)
1995 19.25 0.22 7.92 8.14 (0.25) -- (0.25)
1996 27.14 0.16 2.70 2.86 (0.16) (3.45) (3.61)
1997(a) 26.39 0.10 3.95 4.05 (0.10) (2.08) (2.18)
STRATEGIST
1992 12.02 0.44 0.41 0.85 (0.45) (0.13) (0.58)
1993 12.29 0.38 0.86 1.24 (0.38) (0.47) (0.85)
1994 12.68 0.48 0.01 0.49 (0.46) (0.26) (0.72)
1995 12.45 0.62 0.49 1.11 (0.67) (0.44) (1.11)
1996 12.45 0.43 1.39 1.82 (0.43) (0.12) (0.55)
1997(a) 13.72 0.25 1.02 1.27 (0.25) (0.32) (0.57)
CAPITAL APPRECIATION
1997(a)(c) 10.00 0.06 0.26 0.32 -- -- --
INCOME BUILDER
1997(a)(c) 10.00 0.17 0.62 0.79 (0.17) -- (0.17)
</TABLE>
<TABLE>
<C> <S>
- ---------------------
(a) For the six months ended June 30, 1997 (unaudited).
Commencement of operations:
(b) February 23, 1994.
(c) January 21, 1997.
+ Calculated based on the net asset value as of the last business day of the period.
* Includes distributions in excess of net investment income of $0.02.
(1) Not annualized.
(2) Annualized.
(3) If the Investment Manager had not assumed all expenses and waived its management fee for the period February 23, 1994
through May 12, 1994 for Global Dividend Growth and February 23, 1994 through August 2, 1994 for Pacific Growth, the
ratio of expenses to average net assets would have been 0.97% for Global Dividend Growth and 1.40% for Pacific
Growth.
(4) If the Investment Manager had not assumed all expenses and waived its management fee, the ratios of expenses and net
investment income to average net assets would have been 1.37% and 0.58%, respectively, for Capital Appreciation and
1.26% and 4.79%, respectively, for Income Builder.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET
ASSETS
NET ASSETS -----------------------
NET ASSET TOTAL AT END OF NET PORTFOLIO AVERAGE
VALUE END INVESTMENT PERIOD INVESTMENT TURNOVER COMMISSION
OF PERIOD RETURN+ (000'S) EXPENSES INCOME RATE RATE PAID
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
GLOBAL DIVIDEND GROWTH
1994(b) $ 9.82 0.27 %(1) $ 138,486 0.87 %(2)(3) 2.62 %(2) 20 %(1) --
1995 11.69 22.14 205,739 0.88 2.23 55 --
1996 13.13 17.49 334,821 0.85 1.94 39 $0.0360
1997(a) 14.21 13.98(1) 442,959 0.85(2) 2.21(2) 23(1) 0.0268
EUROPEAN GROWTH
1992 10.18 3.99 10,686 1.73 0.74 97 --
1993 14.03 40.88 79,052 1.28 0.97 77 --
1994 14.56 8.36 152,021 1.16 1.49 58 --
1995 17.53 25.89 188,119 1.17 1.25 69 --
1996 21.56 29.99 302,422 1.11 0.97 43 0.0453
1997(a) 22.59 11.39(1) 374,608 1.09(2) 1.96(2) 19(1) 0.0475
PACIFIC GROWTH
1994(b) 9.26 (6.73) (1) 75,425 1.00 (2)(3 0.56(2) 22(1) --
1995 9.70 5.74 98,330 1.44 1.23 53 --
1996 9.96 3.89 144,536 1.37 1.01 50 0.0108
1997(a) 10.02 1.90(1) 138,151 1.42(2) 1.55(2) 36(1) 0.0078
EQUITY
1992 19.80 0.05 77,527 0.62 1.22 286 --
1993 22.15 19.72 182,828 0.58 0.69 265 --
1994 19.25 (4.91) 225,289 0.57 1.19 299 --
1995 27.14 42.53 359,779 0.54 0.97 269 --
1996 26.39 12.36 521,908 0.54 0.58 279 0.0587
1997(a) 28.26 15.39(1) 634,989 0.52(2) 0.74(2) 67(1) 0.0586
STRATEGIST
1992 12.29 7.24 136,741 0.58 3.74 87 --
1993 12.68 10.38 287,502 0.57 3.11 57 --
1994 12.45 3.94 392,760 0.54 3.93 125 --
1995 12.45 9.48 388,579 0.52 5.03 329 --
1996 13.72 15.02 423,768 0.52 3.30 153 0.0591
1997(a) 14.42 9.33(1) 470,969 0.52(2) 3.59(2) 79(1) 0.0586
CAPITAL APPRECIATION
1997(a)(c) 10.32 3.20(1) 14,227 -- (2)(4 1.95 (2)(4 28(1) 0.0481
INCOME BUILDER
1997(a)(c) 10.62 8.00(1) 20,064 -- (2)(4 6.05 (2)(4 27(1) 0.0525
</TABLE>
<TABLE>
<C> <S>
- ---------------------
(a) For the six months ended June 30, 1997 (unaudited).
(b) February 23, 1994.
(c) January 21, 1997.
+ Calculated based on the net asset value as of the last business day of the
* Includes distributions in excess of net investment income of $0.02.
(1) Not annualized.
(2) Annualized.
(3) If the Investment Manager had not assumed all expenses and waived its
(4) If the Investment Manager had not assumed all expenses and waived its
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
<TABLE>
<CAPTION>
Trustees
- --------------------------------------------------------------------
<S> <C>
Michael Bozic Dr. Manuel H. Johnson
Charles A. Fiumefreddo Michael E. Nugent
Edwin J. Garn Philip J. Purcell
John R. Haire John L. Schroeder
<CAPTION>
Officers
- --------------------------------------------------------------------
Charles A. Fiumefreddo
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Barry Fink
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
Thomas F. Caloia
TREASURER
</TABLE>
<TABLE>
<S> <C>
Transfer Agent Independent Accountants
- -------------------------------------------------------- --------------------------------------------------------
Dean Witter Trust Company Price Waterhouse LLP
Harborside Financial Center--Plaza Two 1177 Avenue of the Americas
Jersey City, New Jersey 07311 New York, New York 10036
</TABLE>
<TABLE>
<CAPTION>
Investment Manager
- --------------------------------------------------------------------
<S> <C>
Dean Witter InterCapital Inc.
Two World Trade Center
New York, New York 10048
<CAPTION>
Sub-Adviser
(European Growth and Pacific Growth Portfolio)
- --------------------------------------------------------------------
Morgan Grenfell Investment Services Limited
</TABLE>
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.
<PAGE>
DEAN WITTER
VARIABLE INVESTMENT SERIES
SEMI-ANNUAL REPORT
JUNE 30, 1997
Allstate Life Insurance Company of New York
P.O. Box 9095
Farmingville, NY 11738
40915A [DEAN WITTER LOGO]
<PAGE>
DEAN WITTER
VARIABLE INVESTMENT SERIES
SEMI-ANNUAL REPORT
JUNE 30, 1997
Northbrook Life Insurance Company
P.O. Box 94040
Palatine, IL 60094-4040
40113A [DEAN WITTER LOGO]
