<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
Two World Trade Center
New York, New York 10048
DEAR SHAREHOLDER:
- --------------------------------------------------------------------------------
Despite two minor stock market corrections, the first in June-July and the
second in October, 1996 was another impressive year for the stock market, with
the Dow Jones Industrial Average (DJIA) ending the year over 6400. The Standard
& Poor's 500 Composite Stock Index (S&P 500) and the NASDAQ composite were also
strong, advancing 22.95 and 22.71 percent, respectively, for the year. Large
caps outperformed small caps by a wide margin, with small caps (as measured by
the Russell 2000 Index) posting a 14.76 percent gain for the year.
The year ended with Federal Reserve Chairman Alan Greenspan warning, on
December 5, 1996, that the outlook for inflation "remains uncertain," partly
because of a possible speculative bubble caused by a surge in U.S. stocks, real
estate and other financial assets this year. This comment, his first such
warning since 1993, caused a downward price reaction in most financial markets
around the globe. However, the November U.S. employment report, released on
December 6, revealed smaller than expected growth of 118,000 new jobs and a rise
in the unemployment rate from 5.2 percent to 5.4 percent. While that report
calmed the markets to a degree, some nervousness remained on news revealing that
wages rose an average of nine cents an hour, tying a record set in June and
resulting in a 3.5 percent rise for the past twelve months. The Federal Reserve
Board has not changed monetary policy since February 1996.
Throughout 1996, the economic environment in Europe was, with the notable
exception of the U.K., generally weaker than expected. Within the European
Union, sluggish economic conditions persisted well into the second quarter
before evidence of a resurgence emerged. Progress has varied considerably
between industries: auto sales and chemical pricing improved, while prices in
pulp, paper and steel were weak. Unemployment continued to rise in both France
and Germany. In this environment, the European central banks continued to
maintain loose monetary policies, and interest rates, in most countries, fell
steadily throughout 1996. At year-end, inflation was not a threat in any
continental economy.
The U.K.'s economy has improved, driven by a competitive currency
(notwithstanding the sterling's appreciation against the dollar in November and
December), flexible labor markets, substantial foreign investment and robust
consumer spending. In November, the benchmark interest rate (base rate) was
raised as a preemptive strike at inflation and will likely rise again in the
near future.
As ever, in 1996 politics affected European economies, most notably in Spain
and Italy. New governments were installed in both countries during the second
quarter--a rightist government in Spain and a leftist coalition in Italy. The
political orientations of these administrations are less important than the fact
that both are pro-deregulation, pro-business and fiscally conservative.
<PAGE>
Europe's equity markets were strong performers during the period under
review, particularly during the fourth quarter. Well-managed growth companies
were able to deliver rising earnings and this, in turn, was rewarded by the
market with higher valuations. Earnings for cyclical issues, however, were
frequently disappointing and these stocks made little progress. The financial
sectors also underperformed, mainly because of high costs and the relative
inflexibility of much of the European banking sector. The U.K. provided a more
balanced stock market performance.
The period under review began on a relatively strong note for Pacific Basin
countries, with investors encouraged by continued high levels of economic and
corporate earnings growth in these countries and by cuts in U.S. interest rates.
However, from May onward, the gyrations of Wall Street, wild swings in
expectations regarding U.S. interest rates and a downturn in the global
electronics cycle created a negative background for markets in the region.
Export growth has also been disappointing, lowering forecasts for both GDP and
corporate earnings growth.
In contrast to much of the rest of the region, the Hong Kong market was
relatively strong, rising 33.10 percent for the year in U.S. dollar terms,
buoyed by encouraging economic data from China and a strong property market.
Taiwan also recorded strong gains. Early in 1996, Chinese missile tests off the
coast of Taiwan, an attempt by China to influence important Taiwanese elections,
severely depressed investment sentiment. However, after the elections, tensions
quickly subsided and the subsequent rapprochement in Chinese/Taiwanese relations
helped the market rally sharply. Furthermore, the decision by Morgan Stanley
Capital International, the main international equity performance index provider,
to include Taiwan in regional indices beginning September 2 resulted in a
significant inflow of foreign funds to the market.
At the other end of the performance spectrum, Thailand put in a particularly
weak performance, falling by 36.60 percent for the year in U.S. dollar terms,
with almost all of the decline occurring in the second half of the year amid
concerns over a worsening deficit, resultant downgrades to GNP and corporate
earnings estimates, and political uncertainty. Toward the end of the year, the
Bank of Thailand took measures to reduce the level of offshore borrowing by Thai
corporations. While essentially a move in the right direction, the timing of
this effective monetary tightening in the face of slowing economic growth and an
escalating negative wealth effect has adversely affected the stock market.
Korea was also disappointing. First-half corporate results were weak because
of exchange losses on foreign currency debt and a difficult domestic operating
environment. Moreover, weak export growth on the back of a rapid decline in
semiconductor prices and political scandals (including the death penalty imposed
on a former president) further depressed sentiment.
At present, the main attraction of the Pacific Basin still lies in P/E
valuations which, at around 16.5 times twelve-month prospective earnings, are
historically low. Regional equities are currently available at prices similar to
those seen during the Gulf War of 1990-1991. In our view, these low valuations
more than compensate for the present uncertainties, and there is additional
upside potential, driven both by a reacceleration of corporate earnings and by
some P/E expansion.
CAPITAL GROWTH PORTFOLIO
For the fiscal year ended December 31, 1996, the Capital Growth Portfolio
posted a total return of 11.55 percent versus 22.95 percent for the Standard &
Poor's 500 Composite Stock Price Index (S&P 500). The accompanying chart
compares the performance of a $10,000 investment in the Portfolio from inception
(March 1, 1991) through the fiscal year ended December 31, 1996, with the
performance of a similar hypothetical investment in the S&P 500 Index.
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CAPITAL GROWTH PORTFOLIO
<S> <C> <C>
Growth of $10,000 ($ in Thousands)
March 1991 10000 10000
12841 11563
December 1992 13051 12443
12139 13696
December 1994 11984 13876
15929 19089
December 1996 17768 23466
Past performance is not predictive of future returns.
(1) Figure assumes reinvestment of all distributions for the underlying
portfolio based on net asset value (NAV). It does not reflect the deduction of insurance
expenses, an annual contract maintenance fee, or surrender charges.
(2) The Standard & Poor's 500 Composite Stock Price Index (S&P 500)
is a broad-based index, the performance of which is based on the average performance
of 500 widely held common stocks. The performance of the Index does not include any expenses,
fees or charges. The Index is unmanaged and should not be considered an investment.
(3) Closing value on December 31, 1996 for the underlying portfolio. This
figure does not reflect the deduction of any account fees or sales charges.
</TABLE>
While the Portfolio essentially tracked the market during the first half of
the fiscal year, it underperformed in the second, for several reasons. First was
the particularly strong impact of the two market corrections on growth-related
issues. With the Portfolio's transformation into a more classic type of growth
portfolio, it was penalized during these time periods, particularly during the
October correction. Additionally, the Fund had been underweighted in the
financial and technology sectors which, aside from the above mentioned time
periods, were solidly performing sectors during fiscal 1996. The Fund now holds
a much more representative weighting in these two areas. Also, the Fund had no
meaningful exposure to the energy sector, one of the best performing sectors
throughout the fiscal year, since these companies have generally not met the
Fund's screening criteria. However, we are now gaining some exposure to this
industry.
During the fiscal year, to widen the universe from which to choose stocks,
we modified our screening criteria. The new criteria state that companies
considered for the Portfolio must have demonstrated a history of consistent
growth in earnings and revenues for the past several years. These companies
should also have solid future earnings growth characteristics and attractive
valuations.
As part of our new focus, we established positions in several companies,
including HFS Inc., Intel Corp., Clear Channel Communications Inc., Green Tree
Financial Corp., Dollar General Corp., Household International Inc., Tidewater
Inc., and Cisco Systems Inc., and eliminated positions such as Forest
Laboratories Inc., International Flavor and Fragrances Inc., Biomet Inc.,
Wrigley (Wm.) Jr. Co., Tootsie Roll Industries, Inc., U.S. Tobacco Inc.,
International Dairy Queen Inc., and Genuine Parts Co. At the end of the 1996
fiscal year the Portfolio owned 59 stocks.
DIVIDEND GROWTH PORTFOLIO
For the fiscal year ended December 31, 1996, the Dividend Growth Portfolio
posted a total return of 23.96 percent versus 22.95 percent for the Standard &
Poor's 500 Composite Stock Index (S&P 500). The accompanying chart compares the
performance of a $10,000 investment in the Portfolio from inception (March 1,
1990) through the fiscal year ended December 31, 1996, with the performance of a
similar hypothetical investment in the S&P 500 Index.
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DIVIDEND GROWTH PORTFOLIO
<S> <C> <C>
Growth of $10,000 ($ in Thousands)
March 1990 10000 10000
9219 10235
11778 13347
December 1992 12740 14363
14567 15808
December 1994 14090 16017
19216 22030
December 1996 23821 27086
Past performance is not predictive of future returns.
(1) Figure assumes reinvestment of all distributions for the underlying
portfolio based on net asset value (NAV). It does not reflect the deduction of insurance
expenses, an annual contract maintenance fee, or surrender charges.
(2) The Standard & Poor's 500 Composite Stock Price Index (S&P 500)
is a broad-based index, the performance of which is based on the average performance
of 500 widely held common stocks. The performance of the Index does not include any
expenses, fees or charges. The Index is unmanaged and should not be considered an investment.
(3) Closing value on December 31, 1996 for the underlying portfolio. This
figure does not reflect the deduction of any account fees or sales charges.
</TABLE>
During the period under review, net assets increased by $400 million, to
more than $1.2 billion on December 31, 1996. Six new common stock positions were
added to the Portfolio: International Paper Co., American Stores Co., Ashland,
Inc., Banc One Corp., PPG Industries, Inc. and Timken Co., and three were
eliminated: 360 DEG. Communications Co. (a spinoff from Sprint Corp.), W. R.
Grace & Co. and Payless Shoesource Inc. (a spinoff from May Department Stores
Co.). On December 31, 1996, the Portfolio consisted of 51 equity issues spread
among 30 industry groups, plus six U.S. Treasury bond and note issues. The
Portfolio remains relatively fully invested, with 99.2 percent of total net
assets committed to longer-term investments at period-end.
EQUITY PORTFOLIO
For the fiscal year ended December 31, 1996, the Equity Portfolio posted a
total return of 12.36 percent versus 22.95 percent for the Standard & Poor's 500
Composite Stock Index (S&P 500). The accompanying chart compares the performance
of a $10,000 investment in the Portfolio for the 10-year period ended December
31, 1996, with the performance of a similar hypothetical investment in the S&P
500 Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
EQUITY PORTFOLIO
<S> <C> <C>
Growth of $10,000 ($ in Thousands)
December 1986 10000 10000
9377 10525
December 1988 10300 12267
12239 16148
December 1990 11797 15649
18762 20408
December 1992 18772 21961
22474 24170
December 1994 21370 24489
30458 33683
December 1996 34224 41412
Past performance is not predictive of future returns.
(1) Figure assumes reinvestment of all distributions for the underlying
portfolio based on net asset value (NAV). It does not reflect the deduction of insurance
expenses, an annual contract maintenance fee, or surrender charges.
(2) The Standard & Poor's 500 Composite Stock Price Index (S&P 500)
is a broad-based index, the performance of which is based on the average performance
of 500 widely held common stocks. The performance of the Index does not include any expenses,
fees or charges. The Index is unmanaged and should not be considered an investment.
(3) Closing value on December 31, 1996 for the underlying portfolio. This
figure does not reflect the deduction of any account fees or sales charges.
</TABLE>
The Equity Portfolio was positioned for slow economic growth through much of
the year, remaining equally weighted in steady growth stocks and cyclical
stocks. However, during the spring and summer, many economic indicators led us
to believe that corporate earnings would be flat to down for 1996. Economic
growth began to decelerate while wages and raw materials prices for energy and
grain rose. Based on that data we took, as it turned out, an overly defensive
position with the Portfolio during midsummer, which caused it to underperform
against the overall market for the year.
<PAGE>
Since then, we have returned to overweighting those sectors of the market
that should achieve relative earnings outperformance, based upon both near-term
considerations and long-term secular trends. The first of these sectors is
technology, which currently makes up about one-third of the Portfolio. It is
likely that the industrialized nations will continue to invest heavily in
technology in order to compete effectively with low-wage, emerging markets.
Meanwhile, in order to compete globally, the emerging markets are investing
heavily in technologies such as basic phone service and computing capacity. Our
technology holdings, which are concentrated in PC-, networking- and
semiconductor-related companies, include Intel Corp, Microsoft Corp., Seagate
Technology, Inc. and Cisco Systems Inc.
We are also focused on the aging of the baby boom generation. As this large
segment of the population approaches retirement, they are likely to intensify
their savings efforts to supplement any Medicare or Social Security payments
they may expect to receive. This should benefit the brokerage, life insurance
and banking industries. Our holdings in financial services include SunAmerica
Inc., a leader in annuities and, increasingly, banks like NationsBank, which is
building its asset management business, and Citicorp, which maintains a major
global presence. Health-care industries such as drugs, biotechnology and medical
devices also benefit from an aging population. Our health-care holdings include
Lilly (Eli) & Co., Bristol-Myers Squibb Co., Centocor Inc. and Medtronic Inc.
Finally, industries that export goods to developing markets are expected to
benefit from continued strong economic growth in those regions. Primary industry
beneficiaries include aerospace, oil equipment, agriculture-related and consumer
goods. Holdings include Boeing Co. in aerospace, Schlumberger Ltd. in oil well
equipment, Monsanto Co. in agriculture and Avon Products, Inc. in consumer
goods.
Energy has been market weighted in the Portfolio for most of the year, with
a concentration in drilling and oil service stocks. This is atypical for the
Portfolio but, when it became clear that oil and gas companies were entering a
new phase of capital spending that would continue in 1997 (even if oil prices
were to sink to $19 to $20 a barrel), we began to build our positions during the
first quarter of 1996. Again, volume growth is expected to remain resilient,
boosted by accelerating demand from developing countries undergoing
industrialization and national standard of living improvements.
We expect the world economy to continue to grow moderately in 1997. Modest
earnings growth of approximately 8 percent and relatively stable inflation
should continue to drive markets higher. We will continue to focus on sectors
expected to have relative earnings outperformance such as technology and health
care, as well as interest-rate-sensitive and export-related industries.
EUROPEAN GROWTH PORTFOLIO
During the fiscal year ended December 31, 1996, the European Growth
Portfolio posted a total return of 29.99 percent versus 11.72 percent for the
Morgan Stanley Capital International (MSCI) World Index. The accompanying chart
compares the performance of a $10,000 investment in the Portfolio from inception
(March 1, 1991) through the fiscal year ended December 31, 1996, with the
performance of a similar hypothetical investment in the MSCI World Index.
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
EUROPEAN GROWTH PORTFOLIO
<S> <C> <C>
Growth of $10,000 ($ in Thousands)
March 1991 10000 10000
10134 10399
December 1992 10539 9656
14847 11625
December 1994 16089 12016
20254 14263
December 1996 26329 15935
Past performance is not predictive of future returns.
(1) Figure assumes reinvestment of all distributions for the underlying
portfolio based on net asset value (NAV). It does not reflect the deduction of
insurance expenses, an annual contract maintenance fee, or surrender
charges.
(2) The Morgan Stanley Capital International World Index (MSCI) measures
performance for a diverse range of global stock markets including the U.S.,
Canada, Europe, Australia, New Zealand and the Far East. The
Index does not include any expenses, fees or charges or reinvestment of
dividends. The Index is unmanaged and should not be considered an investment.
(3) Closing value on December 31, 1996 for the underlying portfolio.
This figure does not reflect the deduction of any account fees or sales charges.
</TABLE>
During the period under review, the Portfolio's orientation shifted in a
number of ways. Our core blue-chip holdings in a wide range of growth stocks
performed well; e.g., Hennes & Mauritz AB (retail, Sweden), Carrefour
Supermarche (retail, France), Aegon NV (insurance, the Netherlands) and Reuters
Holdings PLC (business services, U.K.). We also added to our positions in a
number of cyclical stocks; e.g., Usinor Sacilor (steel & iron, France), SGL
Carbon AG (chemicals, Germany), BICC Group PLC (electrical equipment, U.K.) and
Akzo Nobel NV (chemicals, the Netherlands).
We expect to further increase the Portfolio's weightings in cyclical and
economically sensitive stocks if economic growth underpins rising cyclical
earnings as we expect. At this time, the Portfolio has no currency hedges in
place, given today's relatively stable currency relationships.
GLOBAL DIVIDEND GROWTH PORTFOLIO
For the fiscal year ended December 31, 1996, the Global Dividend Growth
Portfolio posted a total return of 17.49 percent versus 11.72 percent for the
Morgan Stanley Capital International (MSCI) World Index. Since inception
(February 23, 1994), the Portfolio's cumulative total return was 43.88 percent
versus 31.62 percent for the MSCI World Index. The accompanying chart compares
the performance of a $10,000 investment in the Portfolio from inception through
the fiscal year end December 31, 1996, with the performance of a similar
hypothetical investment in the MSCI World Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GLOBAL DIVIDEND GROWTH PORTFOLIO
<S> <C> <C>
Growth of $10,000 ($ in Thousands)
February 1994 10000 10000
December 1994 10027 9925
December 1995 12247 11781
December 1996 14388 13162
Past performance is not predictive of future returns.
(1) Figure assumes reinvestment of all distributions for the underlying
portfolio based on net asset value (NAV). It does not reflect the deduction of
insurance expenses, an annual contract maintenance fee, or surrender
charges.
(2) The Morgan Stanley Capital International World Index (MSCI) measures
performance for a diverse range of global stock markets including the U.S.,
Canada, Europe, Australia, New Zealand and the Far East. The
Index does not include any expenses, fees or charges or reinvestment of
dividends. The Index is unmanaged and should not be considered an investment.
(3) Closing value on December 31, 1996 for the underlying portfolio.
This figure does not reflect the deduction of any account fees or sales charges.
</TABLE>
The Portfolio's management uses stringent screening processes to help search
for attractive opportunities in high-quality common stocks in the largest and
most developed markets in the world. The Portfolio currently owns 124 issues in
twelve countries. Examples include Sprint Corp.
<PAGE>
and IBM in the United States., Sony Corp. and Honda Motor Co. in Japan, British
Telecom and NatWest bank in the U.K., Hugo Boss AG and Bayer AG in Germany,
Royal Dutch Petroleum Co. in the Netherlands and Nestle AG in Switzerland.
We revised several country allocation targets in January 1996 after
reassessing the Portfolio's strategic weightings. We increased assets committed
to Japan and Italy by 2 percent each, to 26 percent and 4 percent, respectively.
Offsetting these moves, we decreased assets committed to Switzerland and the
U.K. by 2 percent and 1 percent respectively, to 2 percent and 11 percent,
respectively.
HIGH YIELD PORTFOLIO
For the fiscal year ended December 31, 1996, the High Yield Portfolio posted
a total return of 11.98 percent versus 4.70 percent for the Lehman Brothers
Corporate/High Yield Index and 11.35% for the Lehman Brothers High Yield Index.
The accompanying chart compares the performance of a $10,000 investment in the
Portfolio for the ten-year period ended December 31, 1996, with the performance
of similar hypothetical investments in the issues comprising the Lehman Brothers
Mutual Fund Corporate/High Yield Index and the Lehman Brothers High Yield Index.
The Portfolio's investment strategy remained essentially unchanged over the
year, with a continued emphasis on discounted B-rated issues. In today's market,
many of these issues can be purchased at or below par, providing significant
future appreciation potential and attractive yields (in the 10 to 12 percent
range) versus comparable Treasuries. In light of the rebounding economy, we feel
quite comfortable with the earnings outlook for most of our B-rated issuers.
However, recognizing that the economy may slow somewhat over the next twelve to
eighteen months, we have tried to limit the Portfolio's potential volatility by
focusing primarily on growth-type, recession-resistant industry sectors such as
cable, media, telecommunications, and food and beverage.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
HIGH YIELD PORTFOLIO
<S> <C> <C> <C>
Growth of $10,000 ($ in Thousands)
December 1986 10000 10000 10000
9698 10270 10499
December 1988 10749 11251 11815
9411 12659 11913
December 1990 7007 13355 10770
11081 16112 15744
December 1992 13115 17617 18223
16273 19879 21343
December 1994 15871 19194 21124
18241 23365 25173
December 1996 20426 24463 28030
Past performance is not predictive of future performance.
(1) Figure assumes reinvestment of all distributions for the underlying portfolio
based on net asset value (NAV). It does not reflect the deduction of insurance expenses,
an annual contract maintenance fee, or surrender charges.
(2) The Lehman Brothers Mutual Fund Corporate/High Yield Index tracks the performance of all
investment and noninvestment-grade corporate debt securities. The Index does not
include any expenses, fees or charges. The Index is unmanaged and should not be
considered an investment.
(3) The Lehman Brothers High Yield Index tracks the performance of
all below investment-grade securities which have at least $100 million in
outstanding issuance, are greater than one year to maturity and are issued
in fixed rate U.S. dollar denominations. The Index does not include any expenses,
fees or charges. The Index is unmanaged and should not be considered an investment.
(4) Closing value on December 31, 1996 for the underlying portfolio. This figure does not
reflect the deduction of any account fees or sales charges.
</TABLE>
Given our outlook for continued, albeit moderate, economic growth, we find
that many of today's B-rated issues offer excellent long-term return potential.
Over the near term, there could be continued volatility in the financial markets
as investors assess the economy's strength, possible Federal Reserve Board
actions and the ongoing budget debate. However, despite any potential short-term
weakness, we consider today's high-yield market to be an attractive long-term
opportunity for investors.
<PAGE>
MONEY MARKET PORTFOLIO
As of December 31, 1996, the Money Market Portfolio had assets in excess of
$340 million and an average life of 70 days. The Portfolio's total return for
the fiscal year was 5.11 percent and its annualized yield on December 31, 1996,
was 4.97 percent.
On December 31, 1996, approximately 86 percent of the Portfolio was invested
in high-quality commercial paper, 10 percent in short-term bank notes and
certificates of deposit of major, financially strong commercial banks, 3 percent
in bankers' acceptances issued by such institutions and the remaining 1 percent
in federal agency obligations.
At the end of this fiscal period, more than 88 percent of the Portfolio's
assets were due to mature in less than four months. Therefore, the Portfolio is
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 changing interest rates.
At this time we anticipate a moderate pace for economic activity during the
first half of 1997, with no major adverse surprises in the rate of inflation.
Investment yields available to the Portfolio during the next six months are not
expected to differ significantly from those available during the second half of
1996.
PACIFIC GROWTH PORTFOLIO
During the fiscal year ended December 31, 1996, the Pacific Growth Portfolio
posted a total return of 3.89 percent versus 11.72 percent for the Morgan
Stanley Capital International (MSCI) World Index. The accompanying chart
compares the performance of a $10,000 investment in the Portfolio from inception
(February 23, 1994) through the fiscal year ended December 31, 1996, with the
performance of a similar hypothetical investment in the issues comprising the
MSCI World Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PACIFIC GROWTH PORTFOLIO
<S> <C> <C>
Growth of $10,000 ($ in Thousands)
February 1994 10000 10000
December 1994 9327 9925
December 1995 9862 11781
December 1996 10246 13162
Past performance is not predictive of future returns.
(1) Figure assumes reinvestment of all distributions for the underlying
portfolio based on net asset value (NAV). It does not reflect the deduction of
insurance expenses, an annual contract maintenance fee, or surrender
charges.
(2) The Morgan Stanley Capital International World Index (MSCI) measures
performance for a diverse range of global stock markets including the U.S.,
Canada, Europe, Australia, New Zealand and the Far East. The
Index does not include any expenses, fees or charges or reinvestment of
dividends. The Index is unmanaged and should not be considered an investment.
(3) Closing value on December 31, 1996 for the underlying portfolio.
This figure does not reflect the deduction of any account fees or sales charges.
</TABLE>
At year-end, we were overweighted in Southeast Asia, particularly in
Indonesia. Earnings in this market are rising strongly on the back of solid,
investment-driven GDP growth and accelerating deregulation of a number of
industries. Meanwhile, valuations have fallen to the low end of historic ranges
at just 15.5 times 1997 estimated earnings. In addition, a heavy supply of large
new issues over the past few years has significantly improved the overall depth
and breadth of the market. The Indonesian portfolio is focused on beneficiaries
of increased disposable incomes (e.g., HM Sampoerna, a cigarette company) and
infrastructure development (e.g., cement manufacturer PT Semen Gresik). The Fund
also maintains modestly overweighted positions in Malaysia and Singapore.
The largest single country position in the Portfolio remains Hong Kong.
Despite having performed relatively well in 1996, this market con-
<PAGE>
tinues to offer the potential for good returns in 1997. Chinese economic growth
has now slowed to a more sustainable, noninflationary level of about 8 percent,
down from over 13 percent three years ago. With inflationary pressures having
receded, monetary policy is beginning to ease. The resurgence of growth in
China, which is expected to follow this easing, will underpin regional growth in
general and Hong Kong in particular. We are quickly approaching the return of
Hong Kong to the Chinese at midnight on June 30, 1997. This will clearly be a
significant focus of attention and media comment, with the consequent potential
for market volatility. Although certainly a risk factor, we expect the
transition to go smoothly and for Hong Kong's new status to benefit its
long-term economic development. In Hong Kong we favor real estate investment
stocks (Hong Kong's commercial and office landlords) such as Hong Kong Land
Holdings Ltd., Great Eagle Holding Co., Wharf Holdings Ltd. and Amoy Properties
Ltd.
The Portfolio's exposure to Japan remains modest. We expect the Japanese
economy to continue its recovery in 1997 and for this to drive corporate
earnings growth. However, investment sentiment remains very weak at present and,
given the greater long-term attractions of the rest of the Pacific Basin, we
will maintain the strategic orientation of the Portfolio toward the Tiger
markets. Our exposure to Japan is still biased toward small-cap stocks, which
continue to have attractive growth and valuation characteristics relative to
their larger counterparts.
We continue to see many attractive stock selection opportunities across the
region. For example, toll road operators such as United Engineers Malaysia
Berhad Ltd, Gamuda Berhad and Sungei Way Holdings Berhad in Malaysia and Road
King Infrastructure Ltd. in Hong Kong continue to benefit from the regional boom
in privatized infrastructure development. Specialist electronics-related
manufacturers such as Amtek Engineering Ltd. and Venture Manufacturing Ltd. in
Singapore continue to benefit from a growth in outsourcing by multinational
companies despite a decline in overall demand for the industry.
QUALITY INCOME PLUS PORTFOLIO
For the fiscal year ended December 31, 1996, the Quality Income Plus
Portfolio posted a total return of 1.56 percent versus 3.63 percent for the
Lehman Brothers Aggregate Bond Index. For the five-year period ended December
31, 1996, the Portfolio returned 44.17 percent, according to Lipper. The
accompanying chart compares the performance of a $10,000 investment in the
Portfolio from inception (March 1, 1987) through the fiscal year ended December
31, 1996, with the performance of a similar hypothetical investment in the
Lehman Brothers Aggregate Bond Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
QUALITY INCOME PLUS PORTFOLIO
<S> <C> <C>
Growth of $10,000 ($ in Thousands)
March 1987 10000 10000
10262 10109
December 1988 11014 10907
12421 12491
December 1990 13271 13611
15759 15788
December 1992 17060 16957
19276 18610
December 1994 17998 18066
22371 21403
December 1996 22719 22180
Past performance is not predictive of future returns.
(1) Figure assumes reinvestment of all distributions for the underlying portfolio
based on net asset value (NAV). It does not reflect the deduction of insurance expenses,
an annual contract maintenance fee, or surrender charges.
(2) The Lehman Brothers Aggregate Bond Index tracks the performance
of all U.S. Government agency and Treasury securities, investment-grade corporate debt
securities, agency mortgage-backed securities and asset-backed securities. The performance
of the Index does not include any expenses, fees or charges. The Index is unmanaged and
should not be considered an investment.
(3) Closing value on December 31, 1996 for the underlying portfolio. This
figure does not reflect the deduction of any account fees or sales charges.
</TABLE>
The relatively low-interest-rate environment that prevailed throughout 1995
continued for only the first three trading days of 1996. Subse-
<PAGE>
quently, the first quarter witnessed a rapid twelve-point drop in the benchmark
thirty-year U.S. Treasury bond and for the next three months its yield swung
from 6.69 to 7.26 percent. By the end of the third quarter, however, the bond
market's volatility had subsided. In this environment, mortgage-backed
securities that were overweighted relative to our benchmark at 33 percent of the
Portfolio outperformed most high-grade asset classes.
As the economy continued to exhibit mixed economic signals, the bond market
rebounded through the first week of December, only to relinquish some of its
earlier gains of the quarter at year-end. Nonetheless, the Portfolio's
diversified asset mix allowed for a very competitive risk-adjusted return.
During 1996, the Fund's weighted-average maturity ranged from 12.6 to 14.7
years. Our diversified asset allocation strategy, which focuses principally on
corporate bonds, is reviewed on an ongoing basis. Asset shifts between sectors
such as U.S. Treasury securities, which are sold to purchase mortgage-backed
securities, occur regularly to capitalize on the constantly changing investment
outlook. It is this dynamic asset allocation, combined with careful credit
reviews and yield curve assessments, that has provided the Portfolio with
competitive returns since its inception.
STRATEGIST PORTFOLIO
For the fiscal year ended December 31, 1996, the Strategist Portfolio posted
a total return of 15.02 percent versus 22.95 percent for the Standard & Poor's
500 Composite Stock Index (S&P 500) and 2.90 percent for the Lehman Brothers
Government/Corporate Bond Index. The Portfolio's total return also compares
favorably with the average total return for the Lipper Flexible Fund category,
which was 13.93 percent during the same period. The accompanying chart compares
the performance of a $10,000 investment in the Portfolio from inception (March
1, 1987) through the fiscal year ended December 31, 1996, with the performance
of similar hypothetical investments in the S&P 500 and the Lehman Brothers
Government/Corporate Bond Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
STRATEGIST PORTFOLIO
<S> <C> <C> <C>
Growth of $10,000 ($ in Thousands)
March 1987 10000 10000 10000
10123 8787 10080
December 1988 11418 10241 10844
12637 13481 12387
December 1990 12833 13064 13413
16460 17036 15576
December 1992 17651 18332 16757
19484 20178 19605
December 1994 20251 20443 17952
22154 28119 21406
December 1996 25482 34572 22027
Past performance is not predictive of future performance.
(1) Figure assumes reinvestment of all distributions for the underlying portfolio
based on net asset value (NAV). It does not reflect the deduction of insurance expenses,
an annual contract maintenance fee, or surrender charges.
(2) The Standard & Poor's 500 Composite Stock Price Index (S&P 500) is a broad-
based index, the performance of which is based on the average performance of 500
widely held common stocks. The performance of the Index does not include any
expenses, fees or charges. The Index is unmanaged and should not be considered
an investment.
(3) The Lehman Brothers Government/Corporate Bond Index tracks the performance of
government and corporate obligations, including U.S. Government agency and U.S.
Treasury securities and corporate and yankee bonds with maturities of one to ten years.
The performance of the Index does not include any expenses, fees or charges. The Index is
unmanaged and should not be considered an investment.
(4) Closing value on December 31, 1996 for the underlying portfolio. This
figure does not reflect the deduction of any account fees or sales charges.
</TABLE>
The Strategist Portfolio's year-end asset allocation target stood at 50
percent equities, 42 percent bonds and 8 percent cash equivalent investments.
For the past year, the Portfolio has remained fully invested in long-dated
financial assets, gradually lowering its exposure to equities and increasing its
exposure to fixed-income investments. As equity markets rallied throughout 1996,
valuation disparities, combined with attractive real yields in bonds, led to
this asset allocation shift.
<PAGE>
Our equity portfolio is overweighted in the following sectors: technology,
consumer staples, cyclicals, financials and defense/aerospace. Among our largest
positions are Seagate Technology Inc., Gateway 2000 Inc., Citicorp., Microsoft
Corp and Monsanto Co.
Our fixed-income portfolio consists of 46 corporate bond issues
(representing 65 percent of overall bond holdings) and 14 government bond issues
(representing 35 percent of overall bond holdings). The average coupon of the
entire fixed-income portfolio is approximately 7.75 percent and the average
maturity is close to 10.5 years.
We expect the first half of 1997 to be characterized by a slowing economy,
declining earnings growth and stable long-term interest rates. With the 30-year
U.S. government bond yielding nearly 7 percent, we feel our current asset
allocation will provide the best opportunities to achieve a competitive total
return in the coming months.
UTILITIES PORTFOLIO
For the fiscal year ended December 31, 1996, the Utilities Portfolio posted
a total return of 8.68 percent versus 22.95 percent for the Standard & Poor's
500 Composite Stock Index (S&P 500). The underlying cause of the Portfolio's
poor performance relative to the S&P 500 was a volatile interest-rate
environment that produces weak markets for both the electric and telephone
utility sectors. The accompanying chart compares the growth of a $10,000
investment in the Portfolio from inception (March 1, 1990) through the fiscal
year ended December 31, 1996, versus a similar hypothetical investment in the
S&P 500 Index.
A volatile interest-rate environment and the uncertainties associated with
the transition of the utilities industry to a more competitive environment made
for a challenging investing environment in 1996. However, stabilization of
interest rates over the fourth quarter and a broad-based improvement in industry
fundamentals, aided in part by several merger and acquisition announcements,
afforded the Portfolio a strong year-end performance.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
UTILITIES PORTFOLIO
<S> <C> <C>
Growth of $10,000 ($ in Thousands)
March 1990 10000 10000
10452 10235
12601 13347
December 1992 14194 14363
16422 15808
December 1994 14940 16017
19220 22030
December 1996 20889 27086
Past performance is not predictive of future returns.
(1) Figure assumes reinvestment of all distributions for the underlying
portfolio based on net asset value (NAV). It does not reflect the deduction of insurance
expenses, an annual contract maintenance fee, or surrender charges.
(2) The Standard & Poor's 500 Composite Stock Price Index (S&P 500)
is a broad-based index, the performance of which is based on the average performance
of 500 widely held common stocks. The performance of the Index does not include any expenses,
fees or charges. The Index is unmanaged and should not be considered an investment.
(3) Closing value on December 31, 1996 for the underlying portfolio. This
figure does not reflect the deduction of any account fees or sales charges.
</TABLE>
Continuing progress by legislators and regulators toward developing a fully
competitive utility industry provided an optimistic outlook for investors.
Throughout 1996 a common thread among all sectors of the utilities industry was
the merger and acquisition strategy resulting from the need for "size and scope"
to compete successfully in a deregulated environment. Specifically, electric
utilities began to receive regulatory relief on the matter of "stranded costs,"
(uneconomic assets under competition) thereby tempering the need for asset
write-downs and the threat of financial weakening. Meanwhile, the
telecommunications industry has received its long-awaited federal legislation on
competition, with full implementation expected to begin in 1997. The worldwide
<PAGE>
demand for telecommunications services should reinforce strong industry growth
and the need for domestic and global industry convergence. The natural gas
sector benefited from a combination of higher commodity prices and a stream of
acquisitions by electric utilities at attractive premium levels.
At year-end, the Portfolio remained nearly fully invested, reflecting in
part improving trends in industry fundamentals, including an improved outlook
for the forthcoming competitive environment and a degree of optimism regarding
interest rate stability going into 1997. On December 31, 1996, 88 percent of the
Portfolio's net assets were allocated to utility and utility-related equities.
While the major portion of the Portfolio's equity holdings remained within the
electric utility sector, we reduced the Portfolio's overall allocation
throughout 1996 in favor of selective natural gas and foreign investments, with
an emphasis on telecommunications. A diverse portfolio of foreign securities
accounted for 9 percent of net assets. Approximately 10 percent of the
Portfolio's net assets were allocated to a high-quality diversified mix of
fixed-income securities, with 2 percent in cash equivalents.
For 1997, we expect further clarity on the structure and timing of a
deregulated and competitive utilities industry to be established, which would
remove much of the uncertainty that prevailed throughout 1996 and give investors
greater visibility on the direction and prospects of utilities investments in
1997 and beyond.
In 1997, we anticipate broadening the Portfolio's exposure to selective
areas of telecommunications that are expected to show near-term benefits from
the competition and convergence of the industry. In addition, a modest increase
in foreign investments is expected as global infrastructure growth expands and
investment opportunities appear. As worldwide restructuring, alliances,
competition and broad-base deregulation progress throughout the utilities and
related industries, we believe the Portfolio is well positioned to meet its
long-term total return objectives.
LOOKING AHEAD
As the new year begins, we believe the economy exhibits a healthy, balanced
condition and is poised for further growth. With business activity already
operating at close to full employment, however, future growth will necessarily
be slower than earlier stages of the expansion. We believe that the U.S. equity
markets have additional upside potential going into 1997, but investors should
be prepared for more turbulence, perhaps even a correction or two. Interest
rates should average modestly higher in 1997 than in 1996. This is based
primarily on the likelihood of the Federal Reserve Board's responding to higher
wage inflation stemming from a fully employed economy.
In continental Europe, a combination of low inflation and low interest rates
sets the stage for better economic performance in 1997. The coming year is also
expected to be good for the U.K., assuming a noninflationary spiral can be
avoided. Politically, the coming year should be generally quiet on the
continent, but a general election is likely in the U.K. in April. While the
centrist nature of the current Labour Party should limit the political risk of
an election, some nervousness in the U.K.'s stock and bond markets must be
expected.
In 1997, Europe's stock markets are expected to be buoyed by stronger
economies, low inflation and easy monetary policy. However, the bond markets,
which provided considerable support for equities in 1996, may not be as
supportive in 1997, and a number of external factors may come into play. Among
the most prominent of these will be concerns over monetary union. Decisions
regarding this matter will have to be made beginning in December 1997, although
implementation will not be before 1999.
In the Pacific Basin, forecasts for 1997 GDP growth remain strong by global
standards, ranging from 4.5 to 9.5 percent across the region, with
<PAGE>
most countries falling between 6 and 7 percent. Interest rates are probably at
their peak; in some countries they have begun to decline. There is also some
evidence that the electronics industry may be beginning to recover, with the
U.S. semiconductor book-to-bill ratio (which measures orders received by
semiconductor manufacturers against orders dispatched) rising to 1.10 in
December 1996, up from a low of 0.79 in March. Hence, most economic cycles in
the region should move in a favorable direction next year. While corporate
earnings growth this year fell to an average of around 11 percent for the
region, upgrades are likely over the coming months and a reacceleration to
around 14 percent is expected for 1997. These prospects sparked improved
performance from most regional markets in November and December 1996 and, we
believe, bode well for the Pacific Basin in 1997.
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--MONEY MARKET
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ANNUALIZED
PRINCIPAL YIELD
AMOUNT (IN ON DATE OF MATURITY
THOUSANDS) PURCHASE DATE VALUE
- ----------- ------------ ------------------- ---------------
<C> <S> <C> <C> <C>
COMMERCIAL PAPER (85.4%)
AUTOMOTIVE - FINANCE (11.0%)
$ 3,000 Chrysler Financial Corp................................. 5.46 % 04/07/97 $ 2,956,960
14,930 Ford Motor Credit Co.................................... 5.38-5.48 02/12/97-04/10/97 14,758,203
14,880 General Motors Acceptance Corp.......................... 5.40-5.63 01/15/97-06/02/97 14,689,058
5,000 Toyota Motor Credit Corp................................ 5.40 02/07/97 4,972,713
---------------
37,376,934
---------------
BANK HOLDING COMPANIES (9.7%)
8,680 BankAmerica Corp........................................ 5.41-5.45 03/10/97-04/11/97 8,573,661
10,000 NationsBank Corp........................................ 5.37-5.75 02/19/97-02/28/97 9,919,532
14,700 PNC Funding Corp........................................ 5.42-5.52 01/24/97-03/31/97 14,605,202
---------------
33,098,395
---------------
BANKS - COMMERCIAL (21.5%)
8,000 Abbey National North America Corp....................... 5.38-5.42 03/11/97-03/21/97 7,911,194
8,500 ANZ Delaware Inc........................................ 5.36-5.40 02/25/97-04/14/97 8,396,180
3,850 Barclays U.S. Funding Corp.............................. 5.65 01/10/97 3,844,668
10,055 Commerzbank U.S. Finance Inc............................ 5.35-5.50 01/02/97-01/30/97 10,023,545
11,500 National Australia Funding (DE) Inc..................... 5.53-6.01 01/03/97-02/11/97 11,459,039
4,000 Rabobank USA Financial Corp............................. 5.43 05/09/97 3,924,480
11,960 Societe Generale N.A., Inc.............................. 5.42-5.62 02/20/97-04/09/97 11,826,637
15,815 WestPac Capital Corp.................................... 5.41-5.59 01/13/97-05/20/97 15,649,166
---------------
73,034,909
---------------
BROKERAGE (5.9%)
14,200 Goldman Sachs Group L.P................................. 5.38-7.35 01/02/97-03/20/97 14,068,776
5,875 Morgan Stanley Group, Inc............................... 5.39-6.79 01/02/97-01/28/97 5,858,686
---------------
19,927,462
---------------
ENTERTAINMENT (0.7%)
2,350 Walt Disney Co.......................................... 5.49 01/23/97 2,342,245
---------------
FINANCE - COMMERCIAL (4.7%)
16,300 CIT Group Holdings, Inc................................. 5.42-5.47 02/27/97-05/16/97 16,071,433
---------------
FINANCE - CONSUMER (13.3%)
15,330 American Express Credit Corp............................ 5.39-5.42 02/24/97-05/27/97 15,125,188
4,000 American General Finance Corp........................... 5.41 02/06/97 3,978,720
3,500 Avco Financial Services Inc............................. 5.38 03/21/97 3,459,447
9,825 Beneficial Corp......................................... 5.37-5.41 02/05/97-03/17/97 9,742,026
13,150 Household Finance Corp.................................. 5.36-5.66 01/08/97-04/17/97 13,054,868
---------------
45,360,249
---------------
FINANCE - CORPORATE (0.9%)
3,000 Ciesco, L.P............................................. 5.48 01/07/97 2,997,300
---------------
FINANCE - DIVERSIFIED (5.9%)
4,000 Commercial Credit Co.................................... 5.46 03/05/97 3,962,200
16,155 General Electric Capital Corp........................... 5.40-5.81 01/06/97-04/24/97 15,995,637
---------------
19,957,837
---------------
HEALTHCARE-DIVERSIFIED (1.1%)
4,000 Becton, Dickinson & Co.................................. 5.49 06/09/97 3,905,483
---------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--MONEY MARKET
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ANNUALIZED
PRINCIPAL YIELD
AMOUNT (IN ON DATE OF MATURITY
THOUSANDS) PURCHASE DATE VALUE
- ----------- ------------ ------------------- ---------------
<C> <S> <C> <C> <C>
INDUSTRIALS (0.6%)
$ 2,035 Caterpillar Financial Service Corp...................... 5.63 % 01/13/97 $ 2,031,249
---------------
INSURANCE (2.7%)
4,260 American General Corp................................... 5.40 01/21/97 4,247,409
5,000 MetLife Funding, Inc.................................... 5.36 03/04/97 4,954,533
---------------
9,201,942
---------------
OFFICE EQUIPMENT (2.0%)
3,000 IBM Credit Corp......................................... 5.35 03/06/97 2,971,893
4,000 International Business Machines Corp.................... 5.36 03/18/97 3,955,498
---------------
6,927,391
---------------
RETAIL (4.8%)
16,450 Sears Roebuck Acceptance Corp........................... 5.42-5.54 01/27/97-06/10/97 16,194,373
---------------
UTILITIES - FINANCE (0.6%)
2,000 National Rural Utilities Cooperative Finance Corp....... 5.37 03/11/97 1,979,722
---------------
TOTAL COMMERCIAL PAPER (AMORTIZED COST $290,406,924)....................................... 290,406,924
---------------
</TABLE>
<TABLE>
<CAPTION>
<C> <S> <C> <C> <C>
CERTIFICATES OF DEPOSIT (6.5%)
11,500 Chase Manhattan Bank (USA).............................. 5.40-5.75 03/11/97-05/05/97 11,500,000
5,000 First Alabama Bank...................................... 5.39 01/15/97 4,999,994
3,500 Mellon Bank, N.A........................................ 5.48 03/03/97 3,500,000
2,000 Union Bank of California, N.A........................... 5.72 01/09/97 2,000,000
---------------
TOTAL CERTIFICATES OF DEPOSIT (AMORTIZED COST $21,999,994)................................. 21,999,994
---------------
</TABLE>
<TABLE>
<CAPTION>
<C> <S> <C> <C> <C>
SHORT-TERM BANK NOTES (3.6%)
12,400 La Salle National Bank (Amortized Cost $12,400,000)..... 5.45-5.59 03/26/97-06/11/97 12,400,000
---------------
</TABLE>
<TABLE>
<CAPTION>
<C> <S> <C> <C> <C>
BANKERS' ACCEPTANCES (3.2%)
4,400 Chase Manhattan Bank.................................... 5.54 02/04/97 4,377,435
1,000 First National Bank of Boston........................... 5.54 02/10/97 994,000
3,000 First Union National Bank of Florida.................... 5.39 04/04/97 2,959,158
2,700 Republic National Bank of New York...................... 5.46 04/23/97 2,654,892
---------------
TOTAL BANKERS' ACCEPTANCES (AMORTIZED COST $10,985,485).................................... 10,985,485
---------------
</TABLE>
<TABLE>
<CAPTION>
<C> <S> <C> <C> <C>
U.S. GOVERNMENT AGENCY (1.3%)
4,500 Federal National Mortgage Assoc.
(Amortized Cost $4,440,200)........................... 5.29 04/03/97 4,440,200
---------------
TOTAL INVESTMENTS (AMORTIZED COST $340,232,603) (A).................... 100.0% 340,232,603
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES......................... 0.0 5,438
---------- -------------
NET ASSETS............................................................. 100.0% $ 340,238,041
---------- -------------
---------- -------------
<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 DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- ---------- ------------------- ---------------
<C> <S> <C> <C> <C>
CORPORATE BONDS (63.7%)
BANK HOLDING COMPANIES (9.7%)
$ 1,000 Banc One Corp.............................................. 8.74% 09/15/03 $ 1,101,710
5,000 Bank One Corp.............................................. 7.625 10/15/26 5,062,100
4,000 Bankers Trust New York Corp................................ 7.375 05/01/08 4,022,160
2,000 Citicorp................................................... 7.25 09/01/08 2,015,320
5,000 First Bank, N.A............................................ 8.35 11/01/04 5,414,550
5,000 First Bank System.......................................... 7.625 05/01/05 5,182,600
2,000 Huntington National Bank................................... 7.625 01/15/03 2,067,760
3,000 Mellon Bank N.A............................................ 7.625 09/15/07 3,113,790
5,000 NBD Bank N.A............................................... 6.25 08/15/03 4,851,700
3,000 Old Kent Financial Corp.................................... 6.625 11/15/05 2,893,740
3,145 PNC Funding Corp........................................... 9.875 03/01/01 3,504,379
5,000 State Street Boston Corp................................... 5.95 09/15/03 4,776,950
2,000 Wachovia Corp.............................................. 6.375 04/15/03 1,962,620
---------------
45,969,379
---------------
BEVERAGES (0.5%)
2,000 Coca-Cola Enterprises, Inc................................. 8.50 02/01/22 2,246,780
---------------
BROKERAGE (3.0%)
4,000 Bear Stearns Companies, Inc................................ 6.625 01/15/04 3,913,640
2,000 Donaldson, Lufkin & Jenrette, Inc.......................... 6.875 11/01/05 1,955,260
3,000 Lehman Brothers Holdings Inc............................... 7.25 10/15/03 3,011,670
5,000 Lehman Brothers Holdings Inc............................... 8.50 08/01/15 5,299,750
---------------
14,180,320
---------------
COMPUTERS (1.0%)
5,000 International Business Machines Corp....................... 7.125 12/01/96 4,759,800
---------------
CONSUMER PRODUCTS (5.2%)
4,000 Becton, Dickinson & Co..................................... 8.70 01/15/25 4,352,440
5,000 CPC International, Inc..................................... 7.25 12/15/26 4,970,050
5,000 General Motors Corp........................................ 7.70 04/15/16 5,168,050
5,000 Philip Morris Companies, Inc............................... 7.125 10/01/04 4,994,150
5,000 Philip Morris Companies, Inc............................... 7.50 01/15/02 5,118,050
---------------
24,602,740
---------------
CONSUMER SERVICES (0.9%)
4,500 Times Mirror Co............................................ 7.25 11/15/96 4,370,445
---------------
ENERGY (1.9%)
2,000 Anadarko Petroleum Corp.................................... 7.73 09/15/96 2,089,080
5,000 Dresser Industries, Inc.................................... 7.60 08/15/96 5,111,000
520 Mobil Corp................................................. 9.17 02/29/00 545,252
1,000 Texaco Capital, Inc........................................ 9.75 03/15/20 1,273,250
---------------
9,018,582
---------------
FINANCIAL SERVICES (7.8%)
5,000 CNA Financial Corp......................................... 7.25 11/15/23 4,751,450
2,000 Corestates Capital Corp.................................... 6.75 11/15/06 1,954,900
5,000 Countrywide Funding Corp................................... 6.875 09/15/05 4,936,700
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--QUALITY INCOME PLUS
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- ---------- ------------------- ---------------
<C> <S> <C> <C> <C>
$ 3,000 Equifax, Inc............................................... 6.50% 06/15/03 $ 2,976,120
3,000 Ford Capital BV............................................ 9.50 06/01/10 3,560,670
5,000 Ford Motor Credit Corp..................................... 7.75 03/15/05 5,228,400
3,000 General Motors Acceptance Corp............................. 9.00 10/15/02 3,301,140
2,000 Household Finance Corp..................................... 8.95 09/15/99 2,127,100
3,500 Household Finance Corp..................................... 8.45 12/10/02 3,765,125
4,000 Norwest Financial Inc...................................... 7.875 02/15/02 4,212,400
---------------
36,814,005
---------------
FOODS (0.8%)
5,000 Archer-Daniels-Midland Co.................................. 0.00 05/01/02 3,544,150
---------------
HEALTHCARE - DIVERSIFIED (1.9%)
5,000 Columbia/HCA Healthcare Corp............................... 9.00 12/15/14 5,831,750
2,000 Kaiser Foundation Health Plan, Inc......................... 9.00 11/01/01 2,199,340
1,000 Kaiser Foundation Health Plan, Inc......................... 9.55 07/15/05 1,170,720
---------------
9,201,810
---------------
INDUSTRIALS (7.5%)
5,000 Boeing Co.................................................. 7.95 08/15/24 5,544,100
5,000 Browning Ferris Industries, Inc............................ 9.25 05/01/21 5,952,500
5,019 Burlington Northern Santa Fe Corp.......................... 7.33 06/23/10 5,112,554
4,888 Burlington Northern Santa Fe Corp.......................... 7.97 01/01/15 5,206,865
1,000 Caterpillar, Inc........................................... 9.375 07/15/01 1,107,820
3,000 Caterpillar, Inc........................................... 9.375 08/15/11 3,592,440
1,000 Consolidated Rail Corp..................................... 9.75 06/15/20 1,240,140
7,500 Union Pacific Resources.................................... 7.50 11/01/96 7,514,850
---------------
35,271,269
---------------
INSURANCE (2.9%)
5,000 Liberty Mutual Insurance Co. - 144A*....................... 7.875 10/15/26 5,037,150
5,000 Lumbermens Mutual Casualty - 144A*......................... 9.15 07/01/26 5,442,400
3,000 Travelers Group, Inc....................................... 7.75 06/15/99 3,095,640
---------------
13,575,190
---------------
PHARMACEUTICALS (1.7%)
2,000 Bristol-Myers Squibb....................................... 6.80 11/15/26 1,928,420
5,000 Johnson & Johnson.......................................... 8.72 11/01/24 5,525,350
733 Marion Merrell Corp........................................ 9.11 08/01/05 804,946
---------------
8,258,716
---------------
REAL ESTATE INVESTMENT TRUST (1.0%)
5,000 Kimco Realty Corp.......................................... 6.50 10/01/03 4,882,200
---------------
RESTAURANTS (0.2%)
1,000 McDonald's Corp............................................ 8.875 04/01/11 1,160,140
---------------
RETAIL (3.9%)
5,000 May Department Stores Co................................... 6.875 11/01/05 4,974,850
5,000 May Department Stores Co................................... 7.625 08/15/13 5,159,700
1,000 Maytag Corp................................................ 9.75 05/15/02 1,126,390
1,000 Penney (J.C) Co., Inc...................................... 9.75 06/15/21 1,120,420
3,000 Sears Roebuck Acceptance Corp.............................. 6.90 08/01/03 3,015,360
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--QUALITY INCOME PLUS
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- ---------- ------------------- ---------------
<C> <S> <C> <C> <C>
$ 3,000 Wal-Mart Stores, Inc....................................... 7.49% 06/21/07 $ 3,152,880
---------------
18,549,600
---------------
TECHNOLOGY (2.8%)
5,000 Lockheed Corp.............................................. 7.875 03/15/23 5,052,450
3,000 Lockheed Martin Corp....................................... 7.70 06/15/08 3,165,630
5,000 Lockheed Martin Corp....................................... 7.20 05/01/36 5,127,600
---------------
13,345,680
---------------
TELECOMMUNICATIONS (4.7%)
9,000 AT&T Corp.................................................. 8.35 01/15/25 9,465,390
5,000 GTE North Inc.............................................. 7.625 05/15/26 5,032,100
5,000 Lucent Technologies Inc.................................... 7.25 07/15/06 5,127,500
3,000 U.S. West Communications, Inc.............................. 7.25 10/15/35 2,862,210
---------------
22,487,200
---------------
TRANSPORTATION (1.0%)
5,000 America West Airlines...................................... 6.85 07/02/09 4,917,250
---------------
UTILITIES - ELECTRIC (5.3%)
1,000 Chugach Electric Co........................................ 9.14 03/15/22 1,120,410
3,750 Consolidated Edison Co. of New York, Inc................... 8.05 12/15/27 3,775,800
4,000 Duke Power Co.............................................. 8.625 03/01/22 4,171,000
5,000 Florida Power & Light Co................................... 7.05 12/01/26 4,688,250
1,260 Georgia Power Co........................................... 8.625 06/01/22 1,260,000
5,000 Pennsylvania Power & Light Co.............................. 7.70 10/01/09 5,325,700
5,000 South Carolina Electric & Gas Co........................... 7.625 06/01/23 4,991,550
---------------
25,332,710
---------------
TOTAL CORPORATE BONDS (IDENTIFIED COST $294,793,311)........................................ 302,487,966
---------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS (31.9%)
31 Federal Home Loan Mortgage Corp............................ 11.50 06/01/11-05/01/19 35,147
540 Federal Home Loan Mortgage Corp. PC Gold................... 6.50 01/01/24-09/01/24 516,190
3,377 Federal Home Loan Mortgage Corp. PC Gold................... 8.50 01/01/22-12/01/24 3,499,009
14,027 Federal National Mortgage Assoc............................ 7.50 07/01/26-09/01/26 14,018,263
1,763 Federal National Mortgage Assoc............................ 9.00 06/01/21-02/01/25 1,857,900
25,152 Government National Mortgage Assoc......................... 6.50 08/15/25-05/15/26 23,980,806
25,942 Government National Mortgage Assoc......................... 7.00 10/15/22-08/15/26 25,358,589
18,191 Government National Mortgage Assoc......................... 7.50 02/15/24-08/15/26 18,197,123
20,059 Government National Mortgage Assoc......................... 8.00 10/15/24-09/15/26 20,466,427
5,206 Government National Mortgage Assoc......................... 8.50 01/15/17-07/15/26 5,392,914
3,493 Government National Mortgage Assoc......................... 9.00 07/15/24-12/15/24 3,678,819
212 Government National Mortgage Assoc......................... 10.00 05/15/16-04/15/19 232,567
5,000 Tennessee Valley Authority................................. 7.85 06/15/44 5,121,950
13,000 U.S. Treasury Bond......................................... 6.50 10/15/06 13,073,060
7,000 U.S. Treasury Bond......................................... 6.50 11/15/26 6,870,010
9,000 U.S. Treasury Bond......................................... 6.75 08/15/26 9,069,480
---------------
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(IDENTIFIED COST $150,414,282)............................................................ 151,368,254
---------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--QUALITY INCOME PLUS
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- ---------- ------------------- ---------------
<C> <S> <C> <C> <C>
FOREIGN GOVERNMENT & AGENCY OBLIGATIONS (2.8%)
$ 5,000 Hydro-Quebec (Canada)...................................... 9.50% 11/15/30 $ 6,135,350
5,000 Province of New Brunswick (Canada)......................... 7.625 06/29/04 5,270,000
2,000 Quebec Province (Canada)................................... 7.50 07/15/23 1,995,600
---------------
TOTAL FOREIGN GOVERNMENT & AGENCY OBLIGATIONS
(IDENTIFIED COST $12,385,590)............................................................. 13,400,950
---------------
SHORT-TERM INVESTMENT (0.2%)
REPURCHASE AGREEMENT
914 The Bank of New York (dated 12/31/96; proceeds $914,226;
collateralized by $271,000 U.S. Treasury Bond 13.75% due
08/15/04 valued at $404,044, $25,450 U.S. Treasury Bond
8.125% due 05/15/21 valued at $29,845, $90,285 U.S.
Treasury Note 5.875% due 03/31/99 valued at $91,541 and
$400,000 U.S. Treasury Note 6.375% due 05/15/99 valued at
$406,803) (Identified Cost $913,953) 5.375 01/02/97 913,953
---------------
TOTAL INVESTMENTS (IDENTIFIED COST $458,507,136) (A)................... 98.6% 468,171,123
OTHER ASSETS IN EXCESS OF LIABILITIES.................................. 1.4 6,489,089
---------- -------------
NET ASSETS............................................................. 100.0% $ 474,660,212
---------- -------------
---------- -------------
<FN>
- ----------------
* 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 $12,469,104, AND THE
AGGREGATE GROSS UNREALIZED DEPRECIATION IS $2,805,117, RESULTING IN NET
UNREALIZED APPRECIATION OF $9,663,987.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--HIGH YIELD
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- --------- --------- ---------------
<C> <S> <C> <C> <C>
CORPORATE BONDS (87.1%)
AEROSPACE (1.4%)
$ 3,800 Sabreliner Corp. (Series B)......................................... 12.50 % 04/15/03 $ 3,724,000
---------------
AUTOMOTIVE (4.7%)
1,800 APS, Inc............................................................ 11.875 01/15/06 1,948,500
4,000 Envirotest Systems, Inc............................................. 9.125 03/15/01 3,775,000
6,000 Toyota Motor Credit Corp............................................ 15.00 09/26/97 6,391,680
---------------
12,115,180
---------------
BROADCAST MEDIA (3.1%)
2,000 Adams Outdoor Advertising L.P....................................... 10.75 03/15/06 2,135,000
2,000 Paxson Communications............................................... 11.625 10/01/02 2,095,000
3,505 Spanish Broadcasting System, Inc.................................... 7.50 06/15/02 3,715,300
---------------
7,945,300
---------------
BUSINESS SERVICES (4.3%)
5,909 Anacomp, Inc........................................................ 13.00+ 06/04/02 6,086,408
5,000 Xerox Credit Corp................................................... 15.00 06/10/97 5,195,300
---------------
11,281,708
---------------
CABLE & TELECOMMUNICATIONS (15.9%)
5,759 Adelphia Communications Corp. (Series B)............................ 9.50+ 02/15/04 5,010,523
3,000 American Communications Services, Inc............................... 13.00++ 11/01/05 1,807,500
2,000 American Communications Services, Inc............................... 12.75++ 04/01/06 1,125,000
5,000 AT&T Capital Corp................................................... 15.00 05/05/97 5,151,750
2,350 Cablevision Systems Corp............................................ 10.50 05/15/16 2,423,437
2,000 Charter Communication South East L.P. (Series B).................... 11.25 03/15/06 2,072,500
4,985 Falcon Holdings Group L.P. (Series B)............................... 11.00+ 09/15/03 4,486,303
2,000 Frontiervision L.P.................................................. 11.00 10/15/06 2,000,000
5,000 Hyperion Telecommunication (Series B)............................... 13.00++ 04/15/03 2,850,000
23,835 In-Flight Phone Corp. (Series B).................................... 14.00++ 05/15/02 8,014,519
2,000 IXC Communications Inc. (Series B).................................. 12.50 10/01/05 2,200,000
2,000 Peoples Telephone Co., Inc.......................................... 12.25 07/15/02 2,110,000
2,000 Rifkin Acquisition Partners L.P..................................... 11.125 01/15/06 2,075,000
---------------
41,326,532
---------------
COMPUTER EQUIPMENT (3.6%)
2,000 Advanced Micro Devices.............................................. 11.00 08/01/03 2,170,000
2,000 Unisys Corp......................................................... 15.00 07/01/97 2,095,000
4,180 Unisys Corp. (Conv.)................................................ 8.25 03/15/06 5,110,510
---------------
9,375,510
---------------
CONSUMER PRODUCTS (1.2%)
3,000 J.B. Williams Holdings, Inc......................................... 12.00 03/01/04 3,078,750
---------------
CONTAINERS (1.6%)
2,000 Mail-Well Corp...................................................... 10.50 02/15/04 2,030,000
2,000 Packaging Resources, Inc............................................ 11.625 05/01/03 2,110,000
---------------
4,140,000
---------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--HIGH YIELD
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- --------- --------- ---------------
<C> <S> <C> <C> <C>
ELECTRICAL & ALARM SYSTEMS (2.4%)
$ 6,500 Mosler, Inc......................................................... 11.00 % 04/15/03 $ 6,142,500
---------------
ENTERTAINMENT/GAMING & LODGING (12.9%)
2,000 AMF Group Inc. (Series B)........................................... 10.875 03/15/06 2,110,000
4,850 Fitzgeralds Gaming Corp. (Units)++.................................. 13.00 12/31/02 4,122,500
3,740 Lady Luck Gaming Finance Corp....................................... 11.875 03/01/01 3,688,575
4,000 MGM Grand Hotels Inc................................................ 12.00 05/01/02 4,310,000
8,000 Motels of America, Inc. (Series B).................................. 12.00 04/15/04 6,760,000
3,000 Players International, Inc.......................................... 10.875 04/15/05 2,985,000
3,400 Plitt Theaters, Inc. (Canada)....................................... 10.875 06/15/04 3,455,250
3,000 Station Casinos, Inc................................................ 9.625 06/01/03 2,977,500
3,000 Stuart Entertainment Inc. - 144A*................................... 12.50 11/15/04 3,052,500
---------------
33,461,325
---------------
FINANCIAL (2.4%)
6,000 Household Finance Corp.............................................. 15.00 09/25/97 6,391,020
---------------
FOODS & BEVERAGES (7.3%)
8,915 Envirodyne Industries, Inc.......................................... 10.25 12/01/01 8,647,550
2,500 Fleming Companies Inc............................................... 10.625 12/15/01 2,553,125
20,250 Specialty Foods Acquisition Corp. (Series B)........................ 13.00++ 08/15/05 7,897,500
---------------
19,098,175
---------------
HEALTHCARE (2.7%)
6,060 Unilab Corp......................................................... 11.00 04/01/06 4,120,800
2,750 Unison Healthcare Corp. - 144A*..................................... 12.25 11/01/06 2,815,312
---------------
6,936,112
---------------
MANUFACTURING (3.5%)
2,000 Berry Plastics Corp................................................. 12.25 04/15/04 2,192,500
2,000 Exide Electronics Group, Inc. (Series B)............................ 11.50 03/15/06 2,132,500
2,000 International Wire Group, Inc....................................... 11.75 06/01/05 2,150,000
2,500 Uniroyal Technology Corp............................................ 11.75 06/01/03 2,493,750
---------------
8,968,750
---------------
MANUFACTURING - DIVERSIFIED (5.3%)
2,090 Foamex L.P.......................................................... 11.875 10/01/04 2,249,363
3,000 Interlake Corp...................................................... 12.125 03/01/02 3,131,250
3,000 J.B. Poindexter & Co., Inc.......................................... 12.50 05/15/04 2,958,750
2,000 Jordan Industries, Inc.............................................. 10.375 08/01/03 1,980,000
4,500 Jordan Industries, Inc.............................................. 11.75++ 08/01/05 3,577,500
---------------
13,896,863
---------------
OIL & GAS (0.7%)
2,000 Empire Gas Corp..................................................... 7.00 07/15/04 1,740,000
---------------
PUBLISHING (3.0%)
3,250 Affiliated Newspapers Investments, Inc.............................. 13.25++ 07/01/06 2,665,000
2,000 American Media Operations, Inc...................................... 11.625 11/15/04 2,140,000
2,975 United States Banknote Corp......................................... 10.375 06/01/02 2,937,813
---------------
7,742,813
---------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--HIGH YIELD
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- --------- --------- ---------------
<C> <S> <C> <C> <C>
RESTAURANTS (4.8%)
$ 7,750 American Restaurant Group Holdings, Inc............................. 14.00++% 12/15/05 $ 3,177,500
3,000 Carrols Corp........................................................ 11.50 08/15/03 3,180,000
8,350 Flagstar Corp....................................................... 11.25 11/01/04 3,423,500
2,500 FRD Acquisition..................................................... 12.50 07/15/04 2,565,625
---------------
12,346,625
---------------
RETAIL (1.5%)
10,450 County Seat Stores Co. (b).......................................... 12.00 10/01/02 3,814,250
---------------
RETAIL - FOOD CHAINS (2.5%)
2,000 Jitney-Jungle Stores................................................ 12.00 03/01/06 2,112,500
2,500 Pathmark Stores, Inc................................................ 9.625 05/01/03 2,393,750
2,000 Ralphs Grocery Co................................................... 10.45 06/15/04 2,125,000
---------------
6,631,250
---------------
TEXTILES (2.3%)
2,500 Reeves Industries Inc............................................... 11.00 07/15/02 2,412,500
4,000 U.S. Leather, Inc................................................... 10.25 07/31/03 3,520,000
---------------
5,932,500
---------------
TOTAL CORPORATE BONDS (IDENTIFIED COST $235,033,351)...................................... 226,089,163
---------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES
- -----------
<C> <S> <C>
COMMON STOCKS (C) (1.9%)
AUTOMOTIVE (0.0%)
87 Northern Holdings Industrial Corp. (Restricted) (d)..................................... --
---------------
COMPUTER EQUIPMENT (0.0%)
39,813 Memorex Telex NV (ADR) (Netherlands) (d)................................................ 2,389
---------------
ENTERTAINMENT/GAMING & LODGING (0.0%)
2,000 Motels of America, Inc. - 144A*......................................................... 100,000
71,890 Vagabond Inns, Inc. (Class D) (a)....................................................... 72
---------------
100,072
---------------
FOODS & BEVERAGES (0.8%)
201,075 Seven-Up/RC Bottling Co. Southern California, Inc....................................... 1,985,615
120,000 Specialty Foods Acquisition Corp. - 144A*............................................... 120,000
---------------
2,105,615
---------------
MANUFACTURING - DIVERSIFIED (0.9%)
84,072 Thermadyne Holdings Corp. (d)........................................................... 2,227,908
---------------
PUBLISHING (0.2%)
5,000 Affiliated Newspapers Investments, Inc. (Class B)....................................... 575,000
---------------
RESTAURANTS (0.0%)
7,750 American Restaurant Group Holdings, Inc. - 144A*........................................ 7,750
---------------
TOTAL COMMON STOCKS (IDENTIFIED COST $11,693,479)....................................... 5,018,734
---------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--HIGH YIELD
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- ---------------
<C> <S> <C>
PREFERRED STOCK (0.7%)
ENTERTAINMENT/GAMING & LODGING
80,000 Fitzgeralds Gaming Corp. (Units)++ (Identified Cost $2,000,000)......................... $ 1,840,000
---------------
</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
---------------
CABLE & TELECOMMUNICATIONS (0.1%)
2,000 Hyperion Telecommunication - 144A*............................................ 04/01/01 90,000
9,485 In-Flight Phone Corp. - 144A*................................................. 08/31/02 9,485
---------------
99,485
---------------
CONTAINERS (0.0%)
2,000 Crown Packaging Holdings, Ltd. (Canada) - 144A*............................... 11/01/03 20
---------------
ENTERTAINMENT/GAMING & LODGING (0.0%)
1,000 Boomtown, Inc. - 144A*........................................................ 11/01/98 10
2,000 Fitzgeralds Gaming Corp....................................................... 12/19/98 2,000
3,500 Fitzgeralds South Inc. - 144A*................................................ 03/15/99 35
---------------
2,045
---------------
MANUFACTURING (0.0%)
2,000 Exide Electronics Group, Inc. - 144A*......................................... 03/15/06 75,000
15,000 Uniroyal Technology Corp...................................................... 06/01/03 15,000
---------------
90,000
---------------
OIL & GAS (0.0%)
4,140 Empire Gas Corp............................................................... 07/15/04 20,700
---------------
RETAIL (0.0%)
2,000 County Seat Holdings Co....................................................... 10/15/98 20
---------------
TOTAL WARRANTS (IDENTIFIED COST $834,540)................................................ 227,270
---------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--HIGH YIELD
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- ---------- ------------------- ---------------
<C> <S> <C> <C> <C>
SHORT-TERM INVESTMENTS (8.3%)
U.S. GOVERNMENT AGENCY (E) (7.7%)
$ 20,000 Federal Home Loan Banks
(Amortized Cost $19,995,028)........................... 5.70-6.50% 01/02/97-01/03/97 $ 19,995,028
---------------
REPURCHASE AGREEMENT (0.6%)
1,481 The Bank of New York (dated 12/31/96; proceeds
$1,481,216; collateralized by $569,000 U.S. Treasury
Bill 0.00% due 02/20/97 valued at $565,017, $400,000
U.S. Treasury Bond 12.75% due 11/15/10 valued at
$572,731, $16,461 U.S. Treasury Bond 13.375% due
08/15/01 valued at $21,989 and $346,623 U.S. Treasury
Note 6.25% due 10/31/01 valued at $350,653) (Identified
Cost $1,480,774)....................................... 5.375 01/02/97 1,480,774
---------------
TOTAL SHORT-TERM INVESTMENTS (IDENTIFIED COST $21,475,802)................................ 21,475,802
---------------
TOTAL INVESTMENTS (IDENTIFIED COST $271,037,172) (F)................... 98.1% 254,650,969
OTHER ASSETS IN EXCESS OF LIABILITIES.................................. 1.9 4,897,572
---------- -------------
NET ASSETS............................................................. 100.0% $ 259,548,541
---------- -------------
---------- -------------
<FN>
- ----------------
ADR AMERICAN DEPOSITORY RECEIPT.
* RESALE IS RESTRICTED TO QUALIFIED INSTITUTIONAL INVESTORS.
++ CONSISTS OF ONE OR MORE CLASS OF SECURITIES TRADED TOGETHER AS A UNIT;
GENERALLY 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 $10,771,721 AND THE
AGGREGATE GROSS UNREALIZED DEPRECIATION IS $27,157,924, RESULTING IN NET
UNREALIZED DEPRECIATION OF $16,386,203.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--UTILITIES
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- ---------------
<C> <S> <C>
COMMON STOCKS (87.5%)
NATURAL GAS (13.3%)
70,000 Apache Corp......................... $ 2,476,250
115,000 Burlington Resources, Inc........... 5,793,125
150,230 El Paso Natural Gas Co.............. 7,586,615
100,000 Enron Corp.......................... 4,312,500
145,000 ENSERCH Corp........................ 3,335,000
80,000 Louisiana Land & Exploration Co..... 4,290,000
140,000 PanEnergy Corp...................... 6,300,000
130,000 Questar Corp........................ 4,777,500
180,000 Seagull Energy Corp.*............... 3,960,000
85,000 Tenneco, Inc........................ 3,835,625
115,000 Union Texas Petroleum Holdings,
Inc............................... 2,573,125
255,000 Williams Companies, Inc............. 9,562,500
---------------
58,802,240
---------------
TELECOMMUNICATIONS (32.3%)
71,666 360 DEG. Communications Co.*........ 1,657,276
135,000 Airtouch Communications, Inc.*...... 3,408,750
220,000 Alltel Corp......................... 6,902,500
100,000 AT&T Corp........................... 4,350,000
145,000 BCE, Inc. (Canada).................. 6,923,750
275,000 Cable & Wireless PLC (ADR) (United
Kingdom).......................... 6,771,875
155,000 Century Telephone Enterprises,
Inc............................... 4,785,625
140,000 Comcast Corp. (Class A)............. 2,467,500
150,000 Comsat Corp......................... 3,693,750
240,000 Ericsson (L.M.) Telephone Co. (Class
B) (ADR) (Sweden)................. 7,230,000
150,000 Frontier Corp....................... 3,393,750
160,000 GTE Corp............................ 7,280,000
61,250 Liberty Media Group (Class A)*...... 1,745,625
46,992 Lucent Technologies, Inc............ 2,173,380
175,000 MCI Communications Corp............. 5,709,375
145,000 MFS Communications Company, Inc.*... 7,866,250
95,000 Northern Telecom Ltd. (Canada)...... 5,878,125
135,000 NYNEX Corp.......................... 6,496,875
115,000 Pacific Telesis Group............... 4,226,250
130,000 SBC Communications, Inc............. 6,727,500
170,000 Southern New England
Telecommunications Corp........... 6,608,750
125,000 Sprint Corp......................... 4,984,375
65,000 Tele Danmark AS (ADR) (Denmark)..... 1,771,250
185,000 Tele-Communications, Inc. (Class
A)*............................... 2,405,000
70,000 Telecommunications Corp. New
Zealand, Ltd. (ADR) (New
Zealand).......................... 5,670,000
65,000 Telefonica de Argentina S.A. (ADR)
(Argentina)....................... 1,681,875
90,000 Telefonos de Mexico S.A. de C.V.
(Series L) (ADR) (Mexico)......... 2,970,000
130,000 Telephone & Data Systems, Inc....... 4,712,500
45,300 Teleport Communications Group Inc.
(Class A)*........................ 1,375,988
110,000 U.S. West Communications Group...... 3,547,500
150,000 U.S. West Media Group*.............. 2,775,000
155,000 WorldCom, Inc.*..................... 4,030,000
---------------
142,220,394
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- ---------------
<C> <S> <C>
UTILITIES - ELECTRIC (41.9%)
220,000 Baltimore Gas & Electric Co......... $ 5,885,000
135,000 Carolina Power & Light Co........... 4,927,500
150,000 Central & South West Corp........... 3,843,750
235,865 CINergy Corp........................ 7,871,994
240,000 CMS Energy Corp..................... 8,070,000
130,000 Consolidated Edison Co. of
New York, Inc..................... 3,802,500
215,000 DPL, Inc............................ 5,267,500
202,500 DQE, Inc............................ 5,872,500
165,000 DTE Energy Co....................... 5,341,875
130,000 Edison International................ 2,583,750
140,000 Enova Corp.......................... 3,185,000
220,000 Entergy Corp........................ 6,105,000
140,000 FPL Group, Inc...................... 6,440,000
175,000 General Public Utilities Corp....... 5,884,375
125,000 Hawaiian Electric Industries, Inc... 4,515,625
200,000 Houston Industries, Inc............. 4,525,000
255,000 Illinova Corp....................... 7,012,500
225,000 IPALCO Enterprises, Inc............. 6,131,250
145,000 Kansas City Power & Light Co........ 4,132,500
90,000 Montana Power Co.................... 1,923,750
110,000 New England Electric System......... 3,836,250
110,000 New York State Electric & Gas
Corp.............................. 2,378,750
175,000 NIPSCO Industries, Inc.............. 6,934,375
305,000 PacifiCorp.......................... 6,252,500
235,000 Pinnacle West Capital Corp.......... 7,461,250
110,000 Portland General Corp............... 4,620,000
80,000 Potomac Electric Power Co........... 2,060,000
200,000 Public Service Company of Colorado.. 7,775,000
240,000 Public Service Company of New
Mexico............................ 4,710,000
130,000 Public Service Enterprise Group,
Inc............................... 3,542,500
180,000 SCANA Corp.......................... 4,815,000
275,000 Southern Co......................... 6,221,875
140,000 Texas Utilities Co.................. 5,705,000
110,000 United Illuminating Co.............. 3,451,250
200,000 Western Resources, Inc.............. 6,175,000
205,000 Wisconsin Energy Corp............... 5,509,375
---------------
184,769,494
---------------
TOTAL COMMON STOCKS (IDENTIFIED COST
$308,066,459)..................... 385,792,128
---------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS)
- -----------
<C> <S> <C>
CORPORATE BONDS (9.7%)
NATURAL GAS (2.6%)
$ 3,000 Coastal Corp. 7.75% due 10/15/35.... 3,036,930
1,000 El Paso Natural Gas Co.
7.50% due 11/15/26................ 1,001,150
2,500 Enserch Exploration Inc.
7.54% due 01/02/09 144A**......... 2,464,200
2,000 Panhandle Eastern Corp.
8.625% due 04/15/25............... 2,127,340
3,000 Tenneco, Inc. 7.45% due 12/15/25.... 2,958,120
---------------
11,587,740
---------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--UTILITIES
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS) VALUE
- ----------- ---------------
<C> <S> <C>
TELECOMMUNICATIONS (2.9%)
$ 2,000 BellSouth Telecommunications, Inc.
7.625% due 05/15/35............... $ 1,998,720
5,000 Century Telephone Enterprises, Inc.
8.25% due 05/01/24................ 5,154,550
1,400 Century Telephone Enterprises, Inc.
7.20% due 12/01/25................ 1,360,324
2,000 Southwestern Bell Telephone Co.
7.20% due 10/15/26................ 1,924,240
2,000 Sprint Corp. 9.25% due 04/15/22..... 2,420,160
---------------
12,857,994
---------------
UTILITIES - ELECTRIC (4.2%)
2,000 Florida Power & Light Co.
7.05% due 12/01/26................ 1,875,300
3,000 Illinois Power Co. 8.75% due
07/01/21.......................... 3,124,560
3,000 Indianapolis Power Co.
7.05% due 02/01/24................ 2,838,000
1,500 Long Island Lighting Co.
9.625% due 07/01/24............... 1,552,500
2,000 South Carolina Electric & Gas Co.
7.625% due 06/01/23............... 1,996,620
2,000 Union Electric Co.
8.00% due 12/15/22................ 2,033,100
5,000 Wisconsin Electric Power Co. 7.125%
due 03/15/16...................... 4,825,300
---------------
18,245,380
---------------
TOTAL CORPORATE BONDS (IDENTIFIED
COST $42,107,361)................. 42,691,114
---------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES
- -----------
<C> <S> <C>
PREFERRED STOCKS (0.5%)
UTILITIES - ELECTRIC
40,000 Arizona Public Service Co.
(Series A) $2.50.................. 1,100,000
20,000 Atlantic Capital I $2.0625.......... 497,500
1,022 Cleveland Electric Illuminating Co.
(Series N) $9.125................. 103,988
14,000 Duquesne Capital LP (Series A)
$2.09375.......................... 353,500
---------------
TOTAL PREFERRED STOCKS (IDENTIFIED
COST $1,952,494).................. 2,054,988
---------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS) VALUE
- ----------- ---------------
<C> <S> <C>
U.S. GOVERNMENT AGENCY (0.3%)
$ 1,250 Tennessee Valley Authority
8.00% due 03/31/45
(Identified Cost $1,250,000)...... $ 1,300,000
---------------
SHORT-TERM INVESTMENTS (1.6%)
U.S. GOVERNMENT AGENCY (A) (1.3%)
6,000 Federal Home Loan Bank
6.50% due 01/02/97
(Amortized Cost $5,998,917)....... 5,998,917
---------------
REPURCHASE AGREEMENT (0.3%)
1,270 The Bank of New York 5.375% due
01/02/97 (dated 12/31/96: proceeds
$1,270,209; collateralized by
$423,313 U.S. Treasury Note 7.50%
due 02/15/05 valued at $464,718,
$318,484 U.S. Treasury Note 6.125%
due 07/31/00 valued at $326,644,
and $502,000 U.S. Treasury Note
5.875% due 11/15/99 valued at
$503,865) (Identified Cost
$1,269,830)....................... 1,269,830
---------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $7,268,747)...... 7,268,747
---------------
TOTAL INVESTMENTS (IDENTIFIED
COST $360,645,061) (B)......... 99.6% 439,106,977
OTHER ASSETS IN EXCESS OF
LIABILITIES.................... 0.4 1,554,889
---------- -------------
NET ASSETS....................... 100.0% $ 440,661,866
---------- -------------
---------- -------------
<FN>
- ------------------
</TABLE>
<TABLE>
<C> <S>
ADR AMERICAN DEPOSITORY RECEIPT.
* NON-INCOME PRODUCING SECURITY.
** RESALE IS RESTRICTED TO QUALIFIED INSTITUTIONAL INVESTORS.
(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 $88,292,975 AND THE
AGGREGATE GROSS UNREALIZED DEPRECIATION IS $9,831,059, RESULTING IN NET
UNREALIZED APPRECIATION OF $78,461,916.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--DIVIDEND GROWTH
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- -----------------
<C> <S> <C>
COMMON STOCKS (96.0%)
AEROSPACE (3.8%)
503,000 Raytheon Co...................... $ 24,206,875
376,000 United Technologies Corp......... 24,816,000
-----------------
49,022,875
-----------------
ALUMINUM (2.0%)
396,000 Aluminum Co. of America.......... 25,245,000
-----------------
AUTO PARTS (1.9%)
498,000 TRW, Inc......................... 24,651,000
-----------------
AUTOMOTIVE (3.9%)
770,000 Ford Motor Co.................... 24,543,750
452,000 General Motors Corp.............. 25,199,000
-----------------
49,742,750
-----------------
BANKS (5.8%)
579,000 Banc One Corp.................... 24,897,000
252,200 BankAmerica Corp................. 25,156,950
487,000 KeyCorp.......................... 24,593,500
-----------------
74,647,450
-----------------
BEVERAGES -
SOFT DRINKS (1.9%)
819,000 PepsiCo Inc...................... 23,955,750
-----------------
CHEMICALS (5.6%)
309,000 Dow Chemical Co.................. 24,217,875
438,000 Eastman Chemical Co.............. 24,199,500
425,200 PPG Industries, Inc.............. 23,864,350
-----------------
72,281,725
-----------------
COMPUTERS (1.9%)
163,000 International Business Machines
Corp........................... 24,613,000
-----------------
CONGLOMERATES (3.7%)
299,000 Minnesota Mining & Manufacturing
Co............................. 24,779,625
97,600 Newport News Shipbuilding Inc.... 1,464,000
488,000 Tenneco, Inc..................... 22,021,000
-----------------
48,264,625
-----------------
COSMETICS (2.1%)
342,000 Gillette Co...................... 26,590,500
-----------------
DRUGS (5.6%)
476,000 Abbott Laboratories.............. 24,157,000
404,000 American Home Products Corp...... 23,684,500
219,200 Bristol-Myers Squibb Co.......... 23,838,000
-----------------
71,679,500
-----------------
ELECTRIC - MAJOR (3.9%)
247,000 General Electric Co.............. 24,422,125
1,321,000 Westinghouse Electric Corp....... 26,254,875
-----------------
50,677,000
-----------------
FINANCIAL -
MISCELLANEOUS (2.0%)
277,000 Household International, Inc..... 25,553,250
-----------------
FOODS (3.9%)
656,000 Quaker Oats Company (The)........ 25,010,000
666,500 Sara Lee Corp.................... 24,827,125
-----------------
49,837,125
-----------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- -----------------
<C> <S> <C>
HOUSEHOLD PRODUCTS (1.9%)
232,000 Procter & Gamble Co.............. $ 24,940,000
-----------------
INSURANCE (2.0%)
325,000 Aetna Inc........................ 26,000,000
-----------------
METALS & MINING (1.8%)
354,000 Phelps Dodge Corp................ 23,895,000
-----------------
NATURAL GAS (5.7%)
469,000 Burlington Resources, Inc........ 23,625,875
489,384 El Paso Natural Gas Co........... 24,713,892
564,000 PanEnergy Corp................... 25,380,000
-----------------
73,719,767
-----------------
OFFICE EQUIPMENT (1.8%)
435,000 Pitney Bowes, Inc................ 23,707,500
-----------------
OIL - DOMESTIC (3.8%)
558,000 Ashland, Inc..................... 24,482,250
186,000 Atlantic Richfield Co............ 24,645,000
-----------------
49,127,250
-----------------
OIL INTEGRATED - INTERNATIONAL (5.7%)
251,000 Exxon Corp....................... 24,598,000
200,000 Mobil Corp....................... 24,450,000
146,000 Royal Dutch Petroleum Co. (ADR)
(Netherlands).................. 24,929,500
-----------------
73,977,500
-----------------
PAPER & FOREST
PRODUCTS (3.9%)
600,000 International Paper Co........... 24,225,000
536,000 Weyerhaeuser Co.................. 25,393,000
-----------------
49,618,000
-----------------
PHOTOGRAPHY (1.9%)
302,000 Eastman Kodak Co................. 24,235,500
-----------------
RAILROADS (1.9%)
281,000 Burlington Northern Santa Fe
Corp........................... 24,271,375
-----------------
RETAIL - DEPARTMENT
STORES (1.9%)
533,000 May Department Stores Co......... 24,917,750
-----------------
RETAIL - FOOD CHAINS (1.9%)
600,000 American Stores Co............... 24,525,000
-----------------
STEEL (2.0%)
552,000 Timken Co........................ 25,323,000
-----------------
TELECOMMUNICATIONS (6.0%)
393,000 Bell Atlantic Corp............... 25,446,750
647,000 Sprint Corp...................... 25,799,125
795,000 U.S. West Communications Group... 25,638,750
-----------------
76,884,625
-----------------
TOBACCO (1.9%)
222,000 Philip Morris Companies, Inc..... 25,002,750
-----------------
UTILITIES - ELECTRIC (3.9%)
546,000 FPL Group, Inc................... 25,116,000
924,000 Unicom Corp...................... 25,063,500
-----------------
50,179,500
-----------------
TOTAL COMMON STOCKS (IDENTIFIED
COST $938,785,654)............. 1,237,086,067
-----------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--DIVIDEND GROWTH
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS) VALUE
- ----------- -----------------
<C> <S> <C>
U.S. GOVERNMENT OBLIGATIONS (3.2%)
$ 2,000 U.S. Treasury Bond
8.125% due 08/15/19............ $ 2,311,260
5,000 U.S. Treasury Bond
8.00% due 11/15/21............. 5,731,850
5,000 U.S. Treasury Bond
7.125% due 02/15/23............ 5,217,500
17,000 U.S. Treasury Bond
6.25% due 08/15/23............. 15,935,120
7,000 U.S. Treasury Bond
6.00% due 02/15/26............. 6,368,740
5,000 U.S. Treasury Note
6.375% due 01/15/99............ 5,048,350
-----------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(IDENTIFIED COST
$39,899,914)................... 40,612,820
-----------------
SHORT-TERM INVESTMENTS (0.7%)
U.S. GOVERNMENT AGENCY (A) (0.7%)
9,000 Federal Home Loan Banks 6.50% due
01/02/97
(Amortized Cost $8,998,375).... 8,998,375
-----------------
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS) VALUE
- ----------- -----------------
<C> <S> <C>
REPURCHASE AGREEMENT (0.0%)
$ 291 The Bank of New York 5.375% due
01/02/97 (dated 12/31/96;
proceeds $290,747;
collateralized by $130,591 U.S.
Treasury Bills 0.00% due
01/30/97 and 05/08/97 valued at
$128,496 and $162,245 U.S.
Treasury Notes 6.00% and 7.875%
due 04/15/98 and 10/15/99
valued at $167,978)
(Identified Cost $290,660)..... $ 290,660
-----------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $9,289,035)... 9,289,035
-----------------
TOTAL INVESTMENTS (IDENTIFIED
COST $987,974,603)(B)......... 99.9% 1,286,987,922
OTHER ASSETS IN EXCESS OF
LIABILITIES................... 0.1 1,416,505
---------- ---------------
NET ASSETS...................... 100.0% $ 1,288,404,427
---------- ---------------
---------- ---------------
<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 $299,945,233 AND THE
AGGREGATE GROSS UNREALIZED DEPRECIATION IS $931,914, RESULTING IN NET
UNREALIZED APPRECIATION OF $299,013,319.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--CAPITAL GROWTH
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- -------------
<C> <S> <C>
COMMON STOCKS (91.2%)
ADVERTISING (1.4%)
25,600 Interpublic Group of Companies,
Inc................................. $ 1,216,000
-------------
APPAREL (1.4%)
21,000 Cintas Corp........................... 1,233,750
-------------
AUTO TRUCKS & PARTS (0.6%)
25,050 Miller Industries, Inc.*.............. 501,000
-------------
BANKING (3.4%)
15,850 Fifth Third Bancorp................... 994,588
12,000 State Street Boston Corp.............. 774,000
28,000 Washington Mutual, Inc................ 1,211,000
-------------
2,979,588
-------------
BEVERAGES - ALCOHOLIC (1.0%)
22,000 Anheuser-Busch Companies, Inc......... 880,000
-------------
BIOTECHNOLOGY (2.0%)
25,500 Medtronic, Inc........................ 1,734,000
-------------
CHEMICALS - SPECIALTY (1.7%)
23,700 Sigma-Aldrich Corp.................... 1,478,287
-------------
COMMERCIAL SERVICES (4.2%)
46,000 Affiliated Computer Services, Inc.*... 1,334,000
60,000 Service Corp. International........... 1,680,000
19,500 Stewart Enterprises, Inc. (Class A)... 658,125
-------------
3,672,125
-------------
COMMUNICATIONS -
EQUIPMENT & SOFTWARE (1.5%)
21,000 Cisco Systems, Inc.*.................. 1,336,125
-------------
COMMUNICATIONS
EQUIPMENT (1.4%)
31,500 Tellabs, Inc.*........................ 1,185,187
-------------
COMPUTER EQUIPMENT (1.3%)
32,000 Cabletron Systems, Inc.*.............. 1,064,000
-------------
COMPUTER SERVICES (1.9%)
48,000 Sterling Commerce, Inc.*.............. 1,692,000
-------------
COMPUTER SOFTWARE (7.2%)
24,000 Computer Associates International,
Inc................................. 1,194,000
21,600 Microsoft Corp.*...................... 1,784,700
28,500 Oracle Corp.*......................... 1,186,313
41,000 Parametric Technology Corp.*.......... 2,106,375
-------------
6,271,388
-------------
COMPUTERS - SYSTEMS (5.1%)
38,000 Adaptec, Inc.*........................ 1,520,000
60,000 EMC Corp.*............................ 1,987,500
19,000 Hewlett-Packard Co.................... 954,750
-------------
4,462,250
-------------
DRUGS (1.6%)
27,300 Abbott Laboratories................... 1,385,475
-------------
ELECTRONICS (3.8%)
28,000 Dionex Corp.*......................... 980,000
29,000 Harman International Industries,
Inc................................. 1,613,125
16,500 Jabil Circuit, Inc.*.................. 660,000
-------------
3,253,125
-------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- -------------
<C> <S> <C>
ELECTRONICS -
SEMICONDUCTORS/
COMPONENTS (3.0%)
32,000 Atmel Corp.*.......................... $ 1,060,000
11,500 Intel Corp............................ 1,505,063
-------------
2,565,063
-------------
ENTERTAINMENT/GAMING & LODGING (1.4%)
35,000 Circus Circus Enterprises, Inc.*...... 1,203,125
-------------
ENVIRONMENTAL CONTROL (2.0%)
50,000 United Waste Systems, Inc.*........... 1,712,500
-------------
FINANCIAL - MISCELLANEOUS (9.9%)
46,000 Federal National Mortgage Assoc....... 1,713,500
55,000 Green Tree Financial Corp............. 2,124,375
16,000 Household International, Inc.......... 1,476,000
38,000 MBNA Corp............................. 1,577,000
22,000 MGIC Investment Corp.................. 1,672,000
-------------
8,562,875
-------------
FINANCIAL SERVICES (2.3%)
27,400 Primark Corp.*........................ 678,150
30,000 SunAmerica, Inc....................... 1,331,250
-------------
2,009,400
-------------
FOOD WHOLESALERS (1.1%)
30,000 Sysco Corp............................ 978,750
-------------
HEALTHCARE - DIVERSIFIED (4.9%)
84,000 General Nutrition Companies, Inc.*.... 1,417,500
34,000 United Healthcare Corp................ 1,530,000
45,000 Universal Health Services, Inc. (Class
B)*................................. 1,288,125
-------------
4,235,625
-------------
HOME ENTERTAINMENT (1.6%)
46,000 Electronic Arts, Inc.*................ 1,374,250
-------------
HOTELS/MOTELS (2.7%)
22,900 HFS Inc.*............................. 1,368,275
51,000 La Quinta Inns, Inc................... 975,375
-------------
2,343,650
-------------
INSURANCE (1.7%)
14,000 American International Group, Inc..... 1,515,500
-------------
MANUFACTURED HOUSING (0.7%)
43,000 Clayton Homes, Inc.................... 580,500
-------------
MANUFACTURING -
DIVERSIFIED (0.9%)
14,600 Sherwin-Williams Co................... 817,600
-------------
MEDIA GROUP (1.6%)
39,600 Clear Channel Communications, Inc.*... 1,430,550
-------------
OFFICE EQUIPMENT
& SUPPLIES (1.4%)
67,200 Staples, Inc.*........................ 1,209,600
-------------
OIL DRILLING & SERVICES (6.2%)
30,000 ENSCO International, Inc.*............ 1,455,000
85,000 Pride Petroleum Services, Inc.*....... 1,955,000
43,000 Tidewater, Inc........................ 1,945,750
-------------
5,355,750
-------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--CAPITAL GROWTH
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- -------------
<C> <S> <C>
PHARMACEUTICALS (1.8%)
31,800 Johnson & Johnson..................... $ 1,582,050
-------------
POLLUTION CONTROL (1.6%)
42,900 U.S. Filter Corp.*.................... 1,362,075
-------------
RETAIL - DEPARTMENT
STORES (1.8%)
47,800 Dollar General Corp................... 1,529,600
-------------
RETAIL - DRUG STORES (1.8%)
40,000 Walgreen Co........................... 1,600,000
-------------
RETAIL - FOOD CHAINS (2.2%)
45,000 Safeway, Inc.*........................ 1,923,750
-------------
UTILITIES - ELECTRIC (1.1%)
21,000 AES Corp.*............................ 976,500
-------------
TOTAL COMMON STOCKS (IDENTIFIED COST
$69,321,743)........................ 79,213,013
-------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS)
- -----------
<C> <S> <C>
SHORT-TERM INVESTMENTS (9.2%)
U.S. GOVERNMENT AGENCY (A) (8.7%)
$ 7,600 Federal Home Loan Banks
6.50% due 01/02/97 (Amortized Cost
$7,598,628)........................ 7,598,628
-------------
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS) VALUE
- ----------- -------------
<C> <S> <C>
REPURCHASE AGREEMENT (0.5%)
$ 424 The Bank of New York 5.375% due
01/02/97 (dated 12/31/96; proceeds
$424,474; collateralized by
$104,899 U.S. Treasury Bond 7.875%
due 02/15/21 valued at $121,847,
$180,000 U.S. Treasury Note 7.50%
due 10/31/99 valued at $189,025 and
$119,260 U.S. Treasury Note 5.875%
due 08/15/98 valued at $121,962)
(Identified Cost $424,347)......... $ 424,347
-------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $8,022,975)....... 8,022,975
-------------
TOTAL INVESTMENTS (IDENTIFIED COST
$77,344,718) (B)................ 100.4% 87,235,988
LIABILITIES IN EXCESS OF OTHER
ASSETS.......................... (0.4) (373,838)
---------- ------------
NET ASSETS........................ 100.0% $ 86,862,150
---------- ------------
---------- ------------
<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 $11,174,054 AND THE
AGGREGATE GROSS UNREALIZED DEPRECIATION IS $1,282,784, RESULTING IN NET
UNREALIZED APPRECIATION OF $9,891,270.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--GLOBAL DIVIDEND GROWTH
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- ---------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS (98.1%)
AUSTRALIA (1.5%)
BUILDING & CONSTRUCTION
582,000 Pioneer International Ltd......... $ 1,733,996
---------------
MULTI-INDUSTRY
526,000 Southcorp Holdings Ltd............ 1,671,628
---------------
PAPER & FOREST PRODUCTS
268,000 Amcor Ltd......................... 1,722,572
---------------
TOTAL AUSTRALIA................... 5,128,196
---------------
CANADA (3.0%)
BANKS - COMMERCIAL
81,800 Toronto Dominion Bank............. 2,101,263
---------------
NATURAL GAS
115,000 TransCanada Pipelines Ltd......... 2,014,157
69,400 IPL Energy, Inc................... 2,023,301
---------------
4,037,458
---------------
OIL RELATED
42,600 Imperial Oil Ltd.................. 2,005,181
---------------
TELECOMMUNICATIONS
42,800 BCE, Inc.......................... 2,039,583
---------------
TOTAL CANADA...................... 10,183,485
---------------
FRANCE (7.5%)
BANKING
19,550 Societe Generale.................. 2,113,819
---------------
BUILDING & CONSTRUCTION
33,300 Lafarge S.A....................... 1,997,936
---------------
FINANCIAL SERVICES
4,550 Societe Eurafrance S.A............ 1,966,098
---------------
FOODS & BEVERAGES
13,300 Eridania Beghin-Say S.A........... 2,140,407
---------------
MISCELLANEOUS MATERIALS & COMMODITIES
14,100 Compagnie de Saint Gobain......... 1,994,681
---------------
MULTI-INDUSTRY
8,000 Compagnie Generale d'Industrie et
de Participations............... 2,206,418
8,700 Saint-Louis....................... 2,166,406
34,061 Worms et Compagnie................ 2,064,601
---------------
6,437,425
---------------
OIL INTEGRATED - INTERNATIONAL
23,500 Elf Aquitaine S.A................. 2,139,163
25,700 Total S.A. (B Shares)............. 2,090,277
---------------
4,229,440
---------------
TELECOMMUNICATIONS
25,300 Alcatel Alsthom................... 2,032,387
---------------
TELEVISION
21,303 Societe Television Francaise 1.... 2,036,482
---------------
TOTAL FRANCE...................... 24,948,675
---------------
GERMANY (6.3%)
BANKING
66,600 Commerzbank AG.................... 1,689,851
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- ---------------
<C> <S> <C>
BUILDING & CONSTRUCTION
45,900 Bilfinger & Berger Bau AG......... $ 1,682,901
---------------
CHEMICALS
43,000 BASF AG........................... 1,654,147
42,000 Bayer AG.......................... 1,711,616
---------------
3,365,763
---------------
HEALTH & PERSONAL CARE
41,800 Douglas Holding AG................ 1,641,077
---------------
MACHINERY - DIVERSIFIED
6,700 M.A.N. AG......................... 1,621,739
---------------
MULTI-INDUSTRY
7,600 Preussag AG....................... 1,718,754
37,300 RWE AG............................ 1,578,170
4,100 Viag AG........................... 1,607,009
---------------
4,903,933
---------------
RETAIL - DEPARTMENT STORES
4,700 Karstadt AG....................... 1,585,983
---------------
STEEL & IRON
9,500 Thyssen AG........................ 1,682,998
---------------
TEXTILES - APPAREL
1,150 Hugo Boss AG (Pref.).............. 1,442,537
---------------
UTILITIES - ELECTRIC
27,700 Veba AG........................... 1,599,805
---------------
TOTAL GERMANY..................... 21,216,587
---------------
HONG KONG (3.9%)
BANKING
131,100 HSBC Holdings PLC................. 2,805,411
---------------
CONGLOMERATES
273,500 Swire Pacific Ltd. (Class A)...... 2,608,045
---------------
REAL ESTATE
299,000 Cheung Kong (Holdings) Ltd........ 2,657,907
---------------
TELECOMMUNICATIONS
1,566,000 Hong Kong Telecommunications
Ltd............................. 2,520,908
---------------
UTILITIES - ELECTRIC
773,000 Hong Kong Electric Holdings Ltd... 2,568,671
---------------
TOTAL HONG KONG................... 13,160,942
---------------
ITALY (4.0%)
FINANCIAL SERVICES
268,000 Istituto Mobiliare Italiano SpA... 2,296,638
---------------
NATURAL GAS
538,000 Italgas SpA....................... 2,246,691
---------------
OIL & GAS PRODUCTS
423,000 Ente Nazionale Idrocarburi SpA.... 2,170,768
---------------
TELECOMMUNICATIONS
350,000 Sirti SpA......................... 2,122,611
1,175,000 Telecom Italia SpA................ 2,292,683
---------------
4,415,294
---------------
TEXTILES - APPAREL
175,000 Benetton Group SpA................ 2,213,744
---------------
TOTAL ITALY....................... 13,343,135
---------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--GLOBAL DIVIDEND GROWTH
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- ---------------
<C> <S> <C>
JAPAN (25.5%)
AUTOMOTIVE
137,000 Honda Motor Co.................... $ 3,912,597
140,000 Toyota Motor Corp................. 4,022,433
---------------
7,935,030
---------------
BREWERS
403,000 Kirin Brewery Co., Ltd............ 3,963,934
---------------
BUILDING & CONSTRUCTION
376,000 Sekisui House Ltd................. 3,828,128
---------------
COMPUTER SERVICES
460,000 NCR Japan Limited................. 3,837,964
---------------
ELECTRONICS & ELECTRICAL
430,000 Hitachi, Ltd...................... 4,006,903
63,000 Kyocera Corp...................... 3,924,590
238,000 Matsushita Electric Industrial
Co., Ltd........................ 3,881,104
447,000 Matsushita Electric Works......... 3,845,203
676,000 Mitsubishi Electric Corp.......... 4,024,504
336,000 NEC Corp.......................... 4,058,671
278,000 Sharp Corp........................ 3,957,722
59,600 Sony Corp......................... 3,903,054
60,000 TDK Corp.......................... 3,908,542
---------------
35,510,293
---------------
ENTERTAINMENT & LEISURE TIME
359,000 Mizuno Corp....................... 2,719,603
53,400 Nintendo Corp., Ltd............... 3,801,122
---------------
6,520,725
---------------
FOODS & BEVERAGES
235,000 House Food Industry............... 3,791,631
699,000 Snow Brand Milk Products.......... 3,950,345
---------------
7,741,976
---------------
MACHINERY - DIVERSIFIED
53,000 Furukawa Co., Ltd................. 178,343
496,000 Mitsubishi Heavy Industries,
Ltd............................. 3,937,187
---------------
4,115,530
---------------
PHARMACEUTICALS
172,000 Taisho Pharmaceutical Co., Ltd.... 4,051,424
191,000 Takeda Chemical Industries........ 4,004,573
---------------
8,055,997
---------------
TRANSPORTATION
376,000 Yamato Transport Co. Ltd.......... 3,893,011
---------------
TOTAL JAPAN....................... 85,402,588
---------------
MALAYSIA (1.4%)
BANKING
136,000 AMMB Holdings Berhad.............. 1,141,862
---------------
BUILDING & CONSTRUCTION
98,000 Cement Industries of Malaysia..... 294,970
130,000 United Engineers (Malaysia) Berhad
Ltd............................. 1,173,861
---------------
1,468,831
---------------
CONGLOMERATES
311,000 Sime Darby Berhad................. 1,225,525
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- ---------------
<C> <S> <C>
OIL RELATED
275,000 Esso Malaysia Berhad.............. $ 778,713
---------------
TOTAL MALAYSIA.................... 4,614,931
---------------
NETHERLANDS (3.0%)
APPLIANCES & HOUSEHOLD DURABLES
28,400 Philips Electronics NV............ 1,150,596
---------------
BANKING
16,700 ABN-AMRO Holding NV............... 1,086,399
---------------
BUILDING & CONSTRUCTION
11,700 Koninklijke Volker Stevin NV...... 1,093,616
---------------
CHEMICALS
11,100 DSM NV............................ 1,094,710
---------------
FINANCIAL SERVICES
30,600 ING Groep NV...................... 1,101,586
---------------
INSURANCE
31,250 Fortis Amev NV.................... 1,094,238
---------------
OIL
6,300 Royal Dutch Petroleum Co.......... 1,104,451
---------------
TELECOMMUNICATIONS
28,000 Koninklijke PTT Nederland NV...... 1,067,948
---------------
TEXTILES
23,600 Gamma Holding NV.................. 1,139,159
---------------
TOTAL NETHERLANDS................. 9,932,703
---------------
SWITZERLAND (2.0%)
BANKING
11,600 Swiss Bank Corp................... 2,199,851
---------------
FOODS & BEVERAGES
2,025 Nestle AG......................... 2,168,349
---------------
PHARMACEUTICALS
1,990 Novartis AG-Bearer................ 2,271,856
---------------
TOTAL SWITZERLAND................. 6,640,056
---------------
UNITED KINGDOM (10.7%)
BANKING
294,000 Hambros PLC....................... 1,129,377
303,000 Lloyds TSB Group PLC.............. 2,238,364
179,000 National Westminster Bank PLC..... 2,104,689
---------------
5,472,430
---------------
BREWERS
150,500 Bass PLC.......................... 2,120,407
185,000 Scottish & Newcastle Breweries
PLC............................. 2,178,408
---------------
4,298,815
---------------
FOODS & BEVERAGES
1,173,000 Hazlewood Foods PLC............... 2,141,206
650,000 Hillsdown Holdings PLC............ 2,217,059
---------------
4,358,265
---------------
MULTI-INDUSTRY
750,000 Hanson PLC........................ 1,054,110
---------------
NATURAL GAS
633,000 British Gas PLC................... 2,430,315
---------------
RETAIL - MERCHANDISING
368,000 Tesco PLC......................... 2,232,862
---------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--GLOBAL DIVIDEND GROWTH
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- ---------------
<C> <S> <C>
STEEL & IRON
762,000 British Steel PLC................. $ 2,089,709
---------------
TELECOMMUNICATIONS
320,000 British Telecommunications PLC.... 2,166,496
---------------
TOBACCO
265,000 B.A.T. Industries PLC............. 2,198,376
---------------
UTILITIES - ELECTRIC
340,000 National Power PLC................ 2,843,869
387,000 Scottish Hydro-Electric PLC....... 2,169,050
---------------
5,012,919
---------------
UTILITIES - WATER
162,000 Hyder PLC......................... 2,071,403
121,500 Hyder PLC (Pref.)................. 213,457
188,000 Severn Trent PLC.................. 2,155,732
---------------
4,440,592
---------------
TOTAL UNITED KINGDOM.............. 35,754,889
---------------
UNITED STATES (29.3%)
AEROSPACE & DEFENSE
62,400 Northrop Grumman Corp............. 5,163,600
---------------
AUTOMOTIVE
159,000 Ford Motor Co..................... 5,068,125
---------------
BANKS
50,100 BankAmerica Corp.................. 4,997,475
97,000 KeyCorp........................... 4,898,500
---------------
9,895,975
---------------
CHEMICALS
66,000 Dow Chemical Co................... 5,172,750
---------------
COMPUTERS - SYSTEMS
32,000 International Business Machines
Corp............................ 4,832,000
---------------
CONGLOMERATES
60,300 Minnesota Mining & Manufacturing
Co.............................. 4,997,362
98,800 Tenneco, Inc...................... 4,458,350
---------------
9,455,712
---------------
MACHINERY - DIVERSIFIED
119,700 Deere & Co........................ 4,862,813
---------------
METALS & MINING
72,500 Phelps Dodge Corp................. 4,893,750
---------------
NATURAL GAS
9,188 El Paso Natural Gas Co............ 464,014
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- ---------------
<C> <S> <C>
OIL - DOMESTIC
114,200 Ashland, Inc...................... $ 5,010,525
---------------
OIL INTEGRATED - INTERNATIONAL
76,800 Chevron Corp...................... 4,992,000
---------------
PAPER & FOREST PRODUCTS
125,000 International Paper Co............ 5,046,875
---------------
PHARMACEUTICALS
45,200 Bristol-Myers Squibb Co........... 4,915,500
---------------
RAILROADS
23,730 Conrail, Inc...................... 2,364,101
---------------
RETAIL
131,400 Dayton-Hudson Corp................ 5,157,450
---------------
SHIPBUILDING
19,760 Newport News Shipbuilding Inc..... 296,400
---------------
TELECOMMUNICATIONS
128,500 A T & T Corp...................... 5,364,875
128,300 Sprint Corp....................... 5,115,963
---------------
10,480,838
---------------
TIRE & RUBBER GOODS
99,600 Goodyear Tire & Rubber Co......... 5,116,950
---------------
TOBACCO
44,400 Philip Morris Companies, Inc...... 5,000,550
---------------
TOTAL UNITED STATES............... 98,189,928
---------------
TOTAL COMMON AND PREFERRED STOCKS
(IDENTIFIED COST
$287,001,315)................... 328,516,115
---------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS)
- -----------
<C> <S> <C>
SHORT-TERM INVESTMENT (A) (2.7%)
U.S. GOVERNMENT AGENCY
$ 9,000 Federal Home Loan Banks
6.50% due 01/02/97
(Amortized Cost $8,998,375)..... 8,998,375
---------------
TOTAL INVESTMENTS (IDENTIFIED
COST $295,999,690) (B)......... 100.8% 337,514,490
LIABILITIES IN EXCESS OF CASH AND
OTHER ASSETS................... (0.8) (2,693,548)
---------- -------------
NET ASSETS....................... 100.0% $ 334,820,942
---------- -------------
---------- -------------
<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 $50,240,249 AND THE
AGGREGATE GROSS UNREALIZED DEPRECIATION IS $8,725,449, RESULTING IN NET
UNREALIZED APPRECIATION OF $41,514,800.
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--GLOBAL DIVIDEND GROWTH
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT DECEMBER 31, 1996:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS TO IN EXCHANGE DELIVERY APPRECIATION
RECEIVE FOR DATE (DEPRECIATION)
- ---------------- ---------------- -------- ---------------
<S> <C> <C> <C> <C> <C>
$ 82,924 L 49,610 01/02/97 $ (2,109)
$ 282,585 L 169,061 01/03/97 (7,185)
DEM 665,842 $ 432,927 01/03/97 (843)
Y 13,707,675 $ 118,681 01/06/97 (410)
CHF 228,739 $ 170,497 01/06/97 (51)
$ 84,255 L 49,401 01/07/97 (417)
$ 67,648 Y 7,845,831 01/07/97 (47)
Y 15,317,075 $ 131,822 01/08/97 336
$ 81,328 FRF 423,526 01/31/97 (299)
---------------
Net unrealized depreciation.......$(11,025)
---------------
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--GLOBAL DIVIDEND GROWTH
SUMMARY OF INVESTMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- -------------------------- -------------- -------------
<S> <C> <C>
Aerospace & Defense....... $ 5,163,600 1.5%
Appliances & Household
Durables................ 1,150,596 0.4
Automotive................ 13,003,155 3.9
Banking................... 16,509,623 4.9
Banks..................... 9,895,975 3.0
Banks - Commercial........ 2,101,263 0.6
Brewers................... 8,262,749 2.5
Building & Construction... 11,805,408 3.5
Chemicals................. 9,633,223 2.9
Computer Services......... 3,837,964 1.1
Computer Systems.......... 4,832,000 1.4
Conglomerates............. 13,289,282 4.0
Electronics & Electrical.. 35,510,293 10.6
Entertainment & Leisure
Time.................... 6,520,725 1.9
Financial Services........ 5,364,322 1.6
Foods & Beverages......... 16,408,997 4.9
Health & Personal Care.... 1,641,077 0.5
Insurance................. 1,094,238 0.3
Machinery - Diversified... 10,600,082 3.2
Metals & Mining........... 4,893,750 1.5
Miscellaneous Materials &
Commodities............. 1,994,681 0.6
Multi-Industry............ 14,067,096 4.2
Natural Gas............... 9,178,478 2.7
Oil....................... 1,104,451 0.3
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- -------------------------- -------------- -------------
<S> <C> <C>
Oil - Domestic............ $ 5,010,525 1.5%
Oil & Gas Products........ 2,170,768 0.6
Oil Integrated -
International........... 9,221,440 2.8
Oil Related............... 2,783,894 0.8
Paper & Forest Products... 6,769,447 2.0
Pharmaceuticals........... 15,243,353 4.6
Railroads................. 2,364,101 0.7
Real Estate............... 2,657,907 0.8
Retail.................... 5,157,450 1.5
Retail - Department
Stores.................. 1,585,983 0.5
Retail - Merchandising.... 2,232,862 0.7
Shipbuilding.............. 296,400 0.1
Steel & Iron.............. 3,772,707 1.1
Telecommunications........ 24,723,454 7.4
Television................ 2,036,482 0.6
Textiles.................. 1,139,159 0.3
Textiles - Apparel........ 3,656,281 1.1
Tire & Rubber Goods....... 5,116,950 1.5
Tobacco................... 7,198,926 2.2
Transportation............ 3,893,011 1.2
U.S. Government Agency.... 8,998,375 2.7
Utilities - Electric...... 9,181,395 2.8
Utilities - Water......... 4,440,592 1.3
-------------- ------
$ 337,514,490 100.8%
-------------- ------
-------------- ------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
- -------------------------------------------------------------------------------------- -------------- -------------
<S> <C> <C>
Common Stocks......................................................................... $ 326,860,121 97.6%
Preferred Stocks...................................................................... 1,655,994 0.5
Short-Term Investment................................................................. 8,998,375 2.7
-------------- ------
$ 337,514,490 100.8%
-------------- ------
-------------- ------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--EUROPEAN GROWTH
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------- ---------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS AND WARRANTS (95.3%)
BELGIUM (1.2%)
RETAIL
81,327 G.I.B. Holdings Ltd............. $ 3,644,262
---------------
DENMARK (2.4%)
AIR TRANSPORT
28,500 Kobenhavns Lufthavne AS......... 2,901,748
---------------
PHARMACEUTICALS
22,400 Novo-Nordisk AS (Series B)...... 4,219,243
---------------
TOTAL DENMARK................... 7,120,991
---------------
FRANCE (15.1%)
BUILDING MATERIALS
19,430 IMETAL.......................... 2,868,532
---------------
ENERGY
45,100 Elf Aquitaine S.A............... 4,105,373
---------------
FINANCIAL SERVICES
33,230 Cetelem Groupe.................. 3,842,729
---------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
12,185 LVMH Moet-Hennessy Louis
Vuitton....................... 3,402,923
92,000 SEITA........................... 3,847,740
17,895 Societe BIC S.A.*............... 2,683,301
---------------
9,933,964
---------------
INSURANCE
75,500 AXA............................. 4,801,966
34,472 Scor S.A........................ 1,212,516
---------------
6,014,482
---------------
OIL RELATED
35,000 Total S.A. (B Shares)........... 2,846,680
---------------
PHARMACEUTICALS
28,069 Sanofi S.A...................... 2,791,482
2,187 Sanofi S.A. 4.00% due 01/01/00
(Conv. Pfd.).................. 238,153
---------------
3,029,635
---------------
RETAIL
7,326 Carrefour Supermarche........... 4,766,807
20,160 Castorama Dubois
Investissement................ 3,469,766
495 Castorama Dubois Investissement
3.15% due 01/01/03 (Conv.
Pfd.)......................... 116,392
---------------
8,352,965
---------------
STEEL & IRON
229,790 Usinor Sacilor.................. 3,343,769
---------------
TEXTILES
7,800 Christian Dior S.A.............. 1,258,283
3,500 Christian Dior S.A.
(Warrants due 06/30/98)*...... 121,153
---------------
1,379,436
---------------
TOTAL FRANCE.................... 45,717,565
---------------
GERMANY (7.8%)
AUTOMOTIVE
3,900 BMW AG.......................... 2,715,574
11,020 Volkswagen AG................... 4,576,768
---------------
7,292,342
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------- ---------------
<C> <S> <C>
CHEMICALS
106,000 BASF AG......................... $ 4,077,664
98,650 Bayer AG........................ 4,020,260
20,000 SGL Carbon AG................... 2,517,846
---------------
10,615,770
---------------
HEALTH & PERSONAL CARE
5,220 Rhoen-Klinikum AG............... 545,373
5,080 Rhoen-Klinikum AG (Pref.)....... 504,374
---------------
1,049,747
---------------
MANUFACTURING
24,635 Adidas AG....................... 2,126,187
---------------
PHARMACEUTICALS
38,500 Gehe AG......................... 2,460,902
---------------
TOTAL GERMANY................... 23,544,948
---------------
ITALY (4.0%)
FOOD MANUFACTURER
2,109,200 Parmalat Finanzeria SpA......... 3,225,672
---------------
HOUSEHOLD FURNISHINGS & APPLIANCES
116,400 Industrie Natuzzi SpA (ADR)..... 2,677,200
---------------
OIL & GAS PRODUCTS
653,700 Ente Nazionale Idrocarburi SpA.. 3,354,683
---------------
TELECOMMUNICATIONS
1,100,850 Telecom Italia Mobile SpA....... 2,782,966
---------------
TOTAL ITALY..................... 12,040,521
---------------
NETHERLANDS (12.3%)
BANKING
44,275 ABN-AMRO Holding NV............. 2,880,258
---------------
CHEMICALS
25,000 Akzo Nobel NV................... 3,414,747
---------------
FOOD DISTRIBUTION
51,705 Koninklijke Ahold NV............ 3,231,937
---------------
FOOD PROCESSING
18,524 Nutricia Vereenigde Bedrijven
NV............................ 2,814,301
---------------
INSURANCE
48,462 Aegon NV........................ 3,088,127
123,822 ING Groep NV.................... 4,457,535
---------------
7,545,662
---------------
MANUFACTURING
37,550 ASM Lithography Holding NV*..... 1,875,544
---------------
MERCHANDISING
37,600 Gucci Group NV.................. 2,524,366
---------------
MULTI-INDUSTRY
23,778 Hunter Douglas NV............... 1,603,274
---------------
PUBLISHING
241,000 Elsevier NV..................... 4,072,925
177,000 Ver Ned Uitgev Ver Bezit NV..... 3,698,171
26,232 Wolters Kluwer NV............... 3,484,341
---------------
11,255,437
---------------
TOTAL NETHERLANDS............... 37,145,526
---------------
NORWAY (0.7%)
INSURANCE
341,000 Storebrand AS (A Shares)*....... 1,978,517
---------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--EUROPEAN GROWTH
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------- ---------------
<C> <S> <C>
SPAIN (6.6%)
BANKS
71,686 Banco Bilbao Vizcaya............ $ 3,870,591
17,946 Banco Popular Espanol S.A....... 3,524,786
---------------
7,395,377
---------------
FINANCIAL SERVICES
28,160 Corporacion Financiera Alba..... 2,845,715
---------------
OIL RELATED
11,826 Gas Natural SDG S.A. (Series
E)............................ 2,750,868
---------------
TELECOMMUNICATIONS
181,500 Telefonica de Espana S.A........ 4,214,916
---------------
UTILITIES
203,250 Iberdrola S.A................... 2,880,536
---------------
TOTAL SPAIN..................... 20,087,412
---------------
SWEDEN (7.6%)
AUTO TRUCKS & PARTS
57,000 Scania AB (A Shares)............ 1,415,446
80,000 Scania AB (B Shares)............ 1,992,434
---------------
3,407,880
---------------
BUSINESS SERVICES
100,000 Assa Abloy AB (Series B)........ 1,811,303
119,000 Securitas AB (Series "B"
Free)......................... 3,450,459
---------------
5,261,762
---------------
INSURANCE
99,181 Scandia Forsakrings AB.......... 2,796,116
---------------
PHARMACEUTICALS
76,000 Astra AB (B Shares)............. 3,652,405
---------------
RETAIL
32,810 Hennes & Mauritz AB (B
Shares)....................... 4,524,261
---------------
TELECOMMUNICATION EQUIPMENT
108,900 Ericsson (L.M.) Telephone Co. AB
(Series "B" Free)............. 3,356,447
---------------
TOTAL SWEDEN.................... 22,998,871
---------------
SWITZERLAND (4.8%)
INSURANCE
3,200 Schweizerische
Rueckversicherungs-
Gesellschaft.................. 3,407,452
---------------
MULTI-INDUSTRY
1,756 ABB AG - Bearer................. 2,178,644
---------------
PHARMACEUTICALS
3,430 Novartis AG*.................... 3,918,174
1,000 Novartis AG-Bearer*............. 1,141,580
506 Roche Holdings AG............... 3,926,967
---------------
8,986,721
---------------
TOTAL SWITZERLAND............... 14,572,817
---------------
UNITED KINGDOM (32.8%)
AEROSPACE & DEFENSE
133,333 British Aerospace PLC........... 2,920,648
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------- ---------------
<C> <S> <C>
AUTOMOTIVE
405,000 BBA Group PLC................... $ 2,443,478
810,000 Rolls-Royce PLC................. 3,568,034
---------------
6,011,512
---------------
BANKING
225,000 Abbey National PLC.............. 2,946,366
100,000 National Westminster Bank PLC... 1,175,804
290,000 TSB Group PLC................... 2,142,329
---------------
6,264,499
---------------
BREWERS
145,000 Scottish & Newcastle Breweries
PLC........................... 1,707,401
325,000 Vaux Group PLC.................. 1,384,269
---------------
3,091,670
---------------
BROADCAST MEDIA
155,000 Flextech PLC*................... 1,806,556
---------------
BUILDING & CONSTRUCTION
313,000 Blue Circle Industries PLC...... 1,915,241
207,400 CRH PLC......................... 2,154,231
217,800 Williams Holdings PLC........... 1,284,184
---------------
5,353,656
---------------
BUILDING MATERIALS
309,000 Redland PLC..................... 1,954,320
---------------
BUSINESS SERVICES
150,000 Reuters Holdings PLC............ 1,929,535
---------------
CHEMICALS
306,000 Albright & Wilson PLC........... 881,133
215,000 Courtaulds PLC.................. 1,455,614
---------------
2,336,747
---------------
COMPUTER SOFTWARE & SERVICES
200,000 Sage Group (The) PLC............ 1,833,980
153,454 SEMA Group PLC.................. 2,866,920
---------------
4,700,900
---------------
COMPUTERS
350,000 Amstrad PLC..................... 883,353
---------------
CONGLOMERATES
435,000 BTR PLC......................... 2,124,931
415,000 Tomkins PLC..................... 1,920,537
---------------
4,045,468
---------------
ELECTRICAL EQUIPMENT
306,363 The BICC Group PLC.............. 1,444,042
---------------
FOOD PROCESSING
275,000 Associated British Foods PLC.... 2,276,621
---------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
94,261 B.A.T. Industries PLC........... 781,967
187,000 Grand Metropolitan PLC.......... 1,467,972
180,000 Guinness PLC.................... 1,416,107
177,500 Tate & Lyle PLC................. 1,437,510
---------------
5,103,556
---------------
FOREST PRODUCTS, PAPER & PACKAGING
191,000 De La Rue PLC................... 1,882,401
---------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--EUROPEAN GROWTH
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------- ---------------
<C> <S> <C>
INSURANCE
55,000 Britannic Assurance PLC......... $ 678,744
123,057 Commercial Union PLC............ 1,444,800
261,200 Prudential Corp. PLC............ 2,202,668
327,271 Royal & Sun Alliance Insurance
Group PLC..................... 2,498,999
---------------
6,825,211
---------------
LEISURE
180,000 Granada Group PLC............... 2,662,528
---------------
METALS & MINING
104,000 Smiths Industries PLC........... 1,429,613
---------------
MISCELLANEOUS
200,000 Vendome Luxury Group PLC
(Units)++..................... 1,820,268
---------------
OIL RELATED
591,000 Lasmo PLC....................... 2,380,489
245,000 Shell Transport & Trading Co.
PLC........................... 4,249,691
---------------
6,630,180
---------------
PHARMACEUTICALS
191,810 British Biotech PLC*............ 669,031
279,100 Glaxo Wellcome PLC.............. 4,544,585
554,166 Medeva PLC...................... 2,412,595
---------------
7,626,211
---------------
REAL ESTATE
203,200 Hammerson PLC................... 1,407,071
---------------
RETAIL
100,000 Great Universal Stores PLC...... 1,050,682
250,000 LucasVarity PLC*................ 955,555
247,000 Morrison (W.M.) Supermarkets
PLC........................... 696,424
214,000 Next PLC........................ 2,087,069
290,000 W.H. Smith Group PLC (Class A).. 2,127,417
---------------
6,917,147
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------- ---------------
<C> <S> <C>
TELECOMMUNICATIONS
842,700 British Telecommunications PLC.. $ 5,705,332
400,635 Securicor Group PLC
(Class A)..................... 1,926,161
180,000 Vodafone Group PLC.............. 762,044
---------------
8,393,537
---------------
TRANSPORTATION
235,500 British Airways PLC............. 2,448,119
---------------
UTILITIES
198,360 Scottish Power PLC.............. 1,193,362
---------------
TOTAL UNITED KINGDOM............ 99,358,731
---------------
TOTAL COMMON AND PREFERRED
STOCKS AND WARRANTS
(IDENTIFIED COST
$214,435,012)................. 288,210,161
---------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS)
- -----------
<C> <S> <C>
SHORT-TERM INVESTMENT (A) (4.0%)
U.S. GOVERNMENT AGENCY
$ 12,000 Federal Home Loan Banks 6.50% due
01/02/97 (Amortized Cost
$11,997,833).................... 11,997,833
---------------
TOTAL INVESTMENTS (IDENTIFIED
COST $226,432,845) (B)......... 99.3% 300,207,994
CASH AND OTHER ASSETS IN EXCESS
OF LIABILITIES................. 0.7 2,214,060
---------- -------------
NET ASSETS....................... 100.0% $ 302,422,054
---------- -------------
---------- -------------
<FN>
- ------------------
ADR AMERICAN DEPOSITORY RECEIPT.
* NON-INCOME PRODUCING SECURITY.
++ CONSISTS OF MORE THAN ONE CLASS OF SECURITIES TRADED TOGETHER AS A UNIT;
COMMON 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 $74,537,493 AND
THE AGGREGATE GROSS UNREALIZED DEPRECIATION IS $762,344, RESULTING IN NET
UNREALIZED APPRECIATION OF $73,775,149.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--EUROPEAN GROWTH
SUMMARY OF INVESTMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- -------------------------- -------------- -------------
<S> <C> <C>
Aerospace & Defense....... $ 2,920,648 1.0%
Air Transport............. 2,901,748 1.0
Auto Trucks & Parts....... 3,407,879 1.1
Automotive................ 13,303,855 4.4
Banking................... 9,144,757 3.0
Banks..................... 7,395,377 2.4
Brewers................... 3,091,670 1.0
Broadcast Media........... 1,806,556 0.6
Building & Construction... 5,353,655 1.8
Building Materials........ 4,822,852 1.6
Business Services......... 7,191,298 2.4
Chemicals................. 16,367,264 5.4
Computer Software &
Services................ 4,700,900 1.6
Computers................. 883,353 0.3
Conglomerates............. 4,045,469 1.3
Electrical Equipment...... 1,444,042 0.5
Energy.................... 4,105,373 1.4
Financial Services........ 6,688,444 2.2
Food Distribution......... 3,231,937 1.1
Food Manufacturer......... 3,225,672 1.1
Food Processing........... 5,090,922 1.7
Food, Beverage, Tobacco &
Household Products...... 15,037,521 5.0
Forest Products, Paper &
Packaging............... 1,882,401 0.6
Health & Personal Care.... 1,049,747 0.3
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- -------------------------- -------------- -------------
<S> <C> <C>
Household Furnishings &
Appliances.............. $ 2,677,200 0.9%
Insurance................. 28,567,440 9.4
Leisure................... 2,662,528 0.9
Manufacturing............. 4,001,732 1.3
Merchandising............. 2,524,366 0.8
Metals & Mining........... 1,429,613 0.5
Miscellaneous............. 1,820,268 0.6
Multi-Industry............ 3,781,918 1.2
Oil & Gas Products........ 3,354,683 1.1
Oil Related............... 12,227,728 4.0
Pharmaceuticals........... 29,975,116 9.9
Publishing................ 11,255,437 3.7
Real Estate............... 1,407,071 0.5
Retail.................... 23,438,634 7.8
Steel & Iron.............. 3,343,769 1.1
Telecommunication
Equipment............... 3,356,447 1.1
Telecommunications........ 15,391,419 5.1
Textiles.................. 1,379,435 0.5
Transportation............ 2,448,119 0.8
U.S. Government Agency.... 11,997,833 4.0
Utilities................. 4,073,898 1.3
-------------- -----
$ 300,207,994 99.3%
-------------- -----
-------------- -----
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
- -------------------------------------------------------------------------------------- -------------- -------------
<S> <C> <C>
Common Stocks......................................................................... $ 287,230,090 95.0%
Convertible Preferred Stocks.......................................................... 354,545 0.1
Preferred Stocks...................................................................... 504,374 0.2
Short-Term Investment................................................................. 11,997,833 4.0
Warrants.............................................................................. 121,152 0.0
-------------- -----
$ 300,207,994 99.3%
-------------- -----
-------------- -----
</TABLE>
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT DECEMBER 31, 1996:
<TABLE>
<CAPTION>
CONTRACTS TO IN EXCHANGE DELIVERY UNREALIZED
RECEIVE FOR DATE DEPRECIATION
- ---------------- ---------------- -------- ---------------
<S> <C> <C> <C> <C> <C>
$ 100,543 DEM 156,636 01/02/97 $ (1,103)
$ 84,006 SEK 578,759 01/02/97 (535)
$ 401,426 SEK 2,764,820 01/03/97 (2,439)
-------
Net unrealized
depreciation.............. $ (4,077)
-------
-------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--PACIFIC GROWTH
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------- --------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS, WARRANTS, RIGHTS
AND BONDS (95.2%)
AUSTRALIA (2.6%)
BUILDING & CONSTRUCTION
210,000 Boral, Ltd...................... $ 597,305
--------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
204,000 Fosters Brewing Group Ltd.
(New)......................... 413,299
--------------
FOODS & BEVERAGES
440,000 Goodman Fielder Wattie Ltd...... 545,345
--------------
METALS & MINING
18,000 CRA Ltd......................... 282,445
404,000 M.I.M. Holdings, Ltd............ 564,921
195,000 North Ltd....................... 570,133
38,750 Overseas & General, Ltd......... 6,003
--------------
1,423,502
--------------
OIL RELATED
100,000 Santos, Ltd..................... 405,195
50,000 Woodside Petroleum Ltd.......... 365,073
--------------
770,268
--------------
TOTAL AUSTRALIA................. 3,749,719
--------------
CHINA (0.7%)
TRANSPORTATION
160,000 Jinhui Shipping and
Transportation Ltd............ 163,086
--------------
UTILITIES
16,000 Huaneng Power International,
Inc. (Class N) (ADR)*......... 360,000
45,000 Shandong Huaneng Power Co., Ltd.
(ADR)......................... 438,750
--------------
798,750
--------------
TOTAL CHINA..................... 961,836
--------------
HONG KONG (21.4%)
BANKING
139,000 Bank of East Asia, Ltd.......... 618,257
102,000 Dao Heng Bank Group Ltd......... 489,294
64,000 Guoco Group Ltd................. 358,314
59,000 Hang Seng Bank Ltd.............. 717,093
300,000 Hang Seng Bank Ltd. (Warrants
due 02/12/97)................. 118,309
425,000 International Bank of Asia...... 283,004
--------------
2,584,271
--------------
BUILDING MATERIALS
17,000 Guangdong Tannery Ltd*.......... 4,286
--------------
BUSINESS SERVICES
204,000 First Pacific Co. Ltd........... 265,089
--------------
CONGLOMERATES
43,000 Citic Pacific, Ltd.............. 249,638
90,136 Henderson China Holding Ltd..... 205,119
428,000 Hutchison Whampoa, Ltd.......... 3,361,908
60,000 Jardine Matheson Holdings Ltd... 396,000
154,000 Swire Pacific Ltd. (Class A).... 1,468,516
530,000 Swire Pacific Ltd.
(Warrants due 07/30/97)....... 135,687
--------------
5,816,868
--------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------- --------------
<C> <S> <C>
ELECTRONIC & ELECTRICAL EQUIPMENT
212,000 ASM Pacific Technology Ltd...... $ 164,469
--------------
ENGINEERING & CONSTRUCTION
612,000 Road King Infrastructure Ltd.*.. 542,048
--------------
FINANCIAL SERVICES
850,000 Manhattan Card Co. Ltd.......... 431,374
--------------
FOOD PROCESSING
750,000 Tingyi (Cayman Islands) Holding
Co.*.......................... 196,373
--------------
HOTELS/MOTELS
190,000 Shangri-La Asia Ltd............. 281,290
--------------
INSURANCE
331,000 National Mutual Asia Ltd........ 314,566
--------------
INVESTMENT COMPANIES
340,000 Guangdong Investments........... 327,515
252,000 Peregrine- Hong Kong (Warrants
due 07/30/97)................. 2,444
560,000 Sun Hung Kai
(Warrants due 07/10/97)....... 257,047
--------------
587,006
--------------
LEISURE
1,509,000 CDL Hotels International, Ltd... 863,373
--------------
MISCELLANEOUS
192,000 BZW (Warrants due 02/27/97)..... 148,953
750,000 Hutchinson Whampoa (Warrants due
02/12/97)..................... 169,705
--------------
318,658
--------------
PUBLISHING
340,000 South China Morning Post
(Holdings) Ltd................ 281,355
--------------
REAL ESTATE
414,000 Amoy Properties, Ltd............ 596,858
308,000 Cheung Kong (Holdings) Ltd...... 2,737,910
800,000 Cheung Kong (Holdings) Ltd.
(Warrants due 02/27/97)....... 341,350
190,000 China Resources Enterprise
Ltd........................... 427,463
170,000 Great Eagle Holding Co.......... 701,190
$ 425K Henderson Capital International
5.00% due 03/27/98 (Conv.).... 363,375
118,000 Henderson Land Development Co.
Ltd........................... 1,190,070
352,000 Hong Kong Land Holdings Ltd..... 978,560
106,000 Hysan Development Co. Ltd....... 422,136
6,250 Hysan Development Co. Ltd.
(Warrants due 04/30/98)*...... 5,657
229,000 New World Development........... 1,547,097
$ 120K Paliburg International Finance -
144A** 3.50% due 02/06/01
(Conv.)....................... 132,000
195,000 Sun Hung Kai Properties Ltd..... 2,388,964
215,000 Wharf (Holdings) Ltd............ 1,073,054
1,250,000 Wharf-B.T.
(Warrants due 01/10/97)....... 279,609
--------------
13,185,293
--------------
RETAIL
90,399 Dickson Concepts International
Ltd. (New).................... 338,967
--------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--PACIFIC GROWTH
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------- --------------
<C> <S> <C>
RETAIL - SPECIALTY
408,000 Giordano International Ltd...... $ 348,177
--------------
TELECOMMUNICATIONS
1,377,400 Hong Kong Telecommunications
Ltd........................... 2,217,304
--------------
TRANSPORTATION
119,000 Cathay Pacific Airways.......... 187,717
794,000 The Guangshen Railway Co.,
Ltd........................... 343,923
--------------
531,640
--------------
UTILITIES
59,500 China Light & Power Co. Ltd..... 264,650
372,000 Hong Kong & China Gas Co. Ltd... 719,085
119,500 Hong Kong & China Gas Co.
(Warrants due 09/30/97)*...... 66,440
162,000 Hong Kong Electric Holdings
Ltd........................... 538,324
500,000 Hong Kong Electric Holdings Ltd.
(Warrants due 03/27/97)....... 29,416
--------------
1,617,915
--------------
TOTAL HONG KONG................. 30,890,322
--------------
INDONESIA (7.9%)
AUTOMOTIVE
1,250,000 PT Gadjah Tunggal............... 542,673
--------------
BANKING
400,000 PT Bank Dagang Nasional
Indonesia..................... 406,607
763,820 PT Bank International
Indonesia..................... 752,173
--------------
1,158,780
--------------
BUILDING MATERIALS
963,732 PT Mulia Industrindo............ 1,000,061
400,000 PT Semen Gresik................. 1,287,590
--------------
2,287,651
--------------
COMMERCIAL SERVICES
340,000 PT Steady Safe.................. 435,620
--------------
CONSTRUCTION PLANT & EQUIPMENT
340,000 PT United Tractors.............. 712,834
--------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
270,000 PT Hanjaya Mandala Sampoerna.... 1,440,915
--------------
FOREST PRODUCTS, PAPER & PACKAGING
1,159,380 PT Indah Kiat Pulp Paper Corp... 847,069
7,433 PT Pabrikkertas Tjiwi Kimia..... 7,398
--------------
854,467
--------------
INDUSTRIALS
300,000 PT Bukaka Teknik Utama.......... 225,540
--------------
INVESTMENT COMPANIES
1 Peregrine Indonesia
(Units)++** *................. 529,750
--------------
METALS
460,000 PT Tambang Timah................ 837,781
--------------
MISCELLANEOUS
120,000 PT Perusahaan Perkebu*.......... 317,662
--------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------- --------------
<C> <S> <C>
PLANTATION
30,000 Jababeka - 144A** (GDR)......... $ 322,500
60,000 PT London Sumatra............... 158,831
--------------
481,331
--------------
RETAIL
250,000 PT Ramayana Lestari Sentosa*.... 540,025
--------------
TELECOMMUNICATIONS
587,000 PT Telekomunikasi Indonesia..... 1,013,141
--------------
TOTAL INDONESIA................. 11,378,170
--------------
JAPAN (13.2%)
AEROSPACE & DEFENSE
45,000 Ishikawajima-Harima Heavy
Industry...................... 199,957
--------------
AUTOMOTIVE
11,000 Honda Motor Co.................. 314,150
51,000 Isuzu Motors Ltd................ 226,618
12,000 Toyota Motor Corp............... 344,780
--------------
885,548
--------------
BANKING
25,000 Asahi Bank, Ltd................. 222,174
17,000 Bank of Tokyo - Mitsubishi
Ltd........................... 315,358
16,000 Dai-Ichi Kangyo Bank............ 230,544
18,000 Long Term Credit Bank of Japan.. 97,377
29,000 Mitsui Trust & Banking.......... 226,445
15,000 Sanwa Bank, Ltd................. 204,487
14,000 Sumitomo Bank................... 201,726
16,000 Sumitomo Trust & Banking........ 160,138
--------------
1,658,249
--------------
BUILDING & CONSTRUCTION
3,000 Japan Industrial Land
Development................... 56,946
32,000 Kajima Corp..................... 228,611
9,000 Kaneshita Construction.......... 85,418
6,000 Mitsui Home Co., Ltd............ 74,029
--------------
445,004
--------------
BUILDING MATERIALS
4,000 Oriental Construction Co........ 51,424
28,000 Sanwa Shutter................... 208,973
13,000 Shin Nikkei Co., Ltd............ 60,345
11,000 Toyo Shutter.................... 59,413
--------------
380,155
--------------
BUSINESS SERVICES
2,000 Nippon Kanzai................... 51,769
1,880 Nissin Co. Ltd.................. 40,714
4,000 Secom Co........................ 241,933
7,000 Tanseisha....................... 60,337
--------------
394,753
--------------
CHEMICALS
2,000 Maezawa Kasei Industries........ 56,083
58,000 Mitsubishi Chemical Corp........ 187,662
33,000 Nippon Zeon Co. Ltd............. 126,704
15,000 Sakai Chemical Industry Co...... 65,617
9,000 Shin-Etsu Chemical Co........... 163,848
14,000 Sumitomo Bakelite Co. Ltd....... 84,556
--------------
684,470
--------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--PACIFIC GROWTH
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------- --------------
<C> <S> <C>
COMMERCIAL SERVICES
6,000 Kawasho Gecoss Corp............. $ 55,910
2,000 Nichii Gakkan Co................ 99,741
--------------
155,651
--------------
COMPUTER SERVICES
3,000 Nintendo Corp., Ltd............. 213,546
--------------
COMPUTER SOFTWARE & SERVICES
2,000 Enix Corp....................... 45,211
8,000 Ines Corp....................... 116,652
5,000 Meitec Corp..................... 95,341
5 NTT Data Communications Systems
Corp.......................... 146,247
--------------
403,451
--------------
COMPUTERS
26,000 Fujitsu, Ltd.................... 242,278
550 TKC Corp........................ 13,050
--------------
255,328
--------------
COMPUTERS - SYSTEMS
3,000 Daiwabo Information Systems
Co............................ 42,709
--------------
DATA PROCESSING
9,000 Ricoh Elemex.................... 125,798
--------------
ELECTRICAL EQUIPMENT
7,000 Maspro Denkoh Corp.............. 107,506
--------------
ELECTRONIC & ELECTRICAL EQUIPMENT
5,000 Aiwa Co......................... 85,850
5,000 Canon, Inc...................... 110,440
Y 9,000K Canon, Inc. 1.00% due 12/20/02
(Conv.)....................... 132,787
27,000 Hitachi, Ltd.................... 251,596
3,000 Kyocera Corp.................... 186,885
4,000 Mitsui High-Tec................. 78,343
5,000 Murata Manufacturing Co., Ltd... 163,934
6,000 Nitto Electric Works............ 101,467
8,000 Omron Corp...................... 148,404
12,000 Sharp Corp...................... 170,837
5,000 Sony Corp....................... 327,437
3,000 TDK Corp........................ 195,427
--------------
1,953,407
--------------
ELECTRONICS
28,000 Fujikura Ltd.................... 224,193
3,000 Kojima Co. Ltd.................. 72,217
10,000 Nissin Electric................. 47,972
2,000 Rohm Co., Ltd................... 131,148
3,000 Ryoyo Electro Corp.............. 54,357
--------------
529,887
--------------
ELECTRONICS - SEMICONDUCTORS/COMPONENTS
4,000 Toshiba Ceramics................ 28,818
--------------
ENTERTAINMENT
2,200 H.I.S. Company Ltd.............. 106,299
--------------
FINANCIAL SERVICES
20,000 Daiwa Securities Co., Ltd....... 177,739
1,900 Nichiei Co., Ltd. (Kyoto)....... 139,508
13,000 Nomura Securities Co. Ltd....... 195,168
1,000 Sanyo Shinpan Finance Co.,
Ltd........................... 62,554
2,000 Shinki Co. Ltd.................. 46,247
--------------
621,216
--------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------- --------------
<C> <S> <C>
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
16,000 Nippon Meat Packers, Inc........ $ 207,075
--------------
FOREST PRODUCTS, PAPER & PACKAGING
10,000 Daishowa Paper Manufacturing Co.
Ltd........................... 43,400
--------------
HEALTH & PERSONAL CARE
5,000 Kawasumi Laboratories, Inc...... 56,514
--------------
HOUSEHOLD FURNISHINGS & APPLIANCES
6,000 Beltecno Corp................... 56,946
6,000 Juken Sangyo Co................. 40,897
--------------
97,843
--------------
INDUSTRIALS
Y 10,000K Forval Corp 1.35% due 9/30/03
(Conv.)....................... 81,104
12,000 Nippon Thompson Co.............. 85,315
27,000 Tokai Carbon Co., Ltd........... 105,065
--------------
271,484
--------------
INSURANCE
17,000 Tokio Marine & Fire Insurance
Co............................ 159,879
22,000 Yasuda Fire & Marine Insurance.. 114,271
--------------
274,150
--------------
MACHINE TOOLS
2,000 Nitto Kohki Co. Ltd............. 71,613
12,000 OSG Corp........................ 63,676
--------------
135,289
--------------
MACHINERY
8,000 Aichi Corp...................... 60,052
24,000 Amada Co., Ltd.................. 186,368
16,000 Daifuku Co. Ltd................. 201,553
3,000 Fuji Machine Manufacturing Co... 79,465
5,000 Fujitec Co. Ltd................. 50,043
2,000 Keyence Corp.................... 246,764
Y 19,000K Minebea Co. Ltd.
0.80% due 03/31/03 (Conv.).... 187,049
29,000 Mitsubishi Heavy Industries,
Ltd........................... 230,198
5,000 Sansei Yusoki Co., Ltd.......... 55,220
9,000 Sintokogio...................... 65,695
6,000 Takuma Co., Ltd................. 65,746
15,000 Tsudakoma....................... 63,158
--------------
1,491,311
--------------
MANUFACTURING
5,000 Arcland Sakamoto................ 64,711
7,000 Bridgestone Metalpha Corp....... 59,793
9,000 Daiwa House Industry............ 115,703
10,000 Itoki Crebio Corp............... 66,609
5,000 Nichiha Corp.................... 88,438
10,000 Nippon Electric Glass Co.,
Ltd........................... 153,581
4,000 Sony Music Entertainment Inc.... 158,067
17,000 Tokyo Style..................... 237,619
--------------
944,521
--------------
MEDICAL SUPPLIES
10,000 Shimadzu Corp................... 49,267
13,000 Terumo.......................... 176,100
--------------
225,367
--------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--PACIFIC GROWTH
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------- --------------
<C> <S> <C>
MERCHANDISING
3,000 Misumi Corp..................... $ 51,769
--------------
METALS
6,000 Takada Kiko..................... 44,573
9,200 Tokyo Steel Manufacturing....... 130,975
--------------
175,548
--------------
METALS & MINING
31,000 Nippon Light Metal Co........... 127,317
89,000 Nippon Steel Co................. 262,623
--------------
389,940
--------------
MISCELLANEOUS MATERIALS & COMMODITIES
7,000 Minebea Co., Ltd................ 58,464
--------------
MULTI-INDUSTRY
26,000 Mitsui & Co..................... 210,871
3,300 Trusco Nakayama Corp............ 60,932
6,000 Yamae Hisano.................... 59,016
--------------
330,819
--------------
NATURAL GAS
76,000 Tokyo Gas Co., Ltd.............. 205,902
--------------
OIL RELATED
16,000 General Sekiyu.................. 113,339
--------------
PHARMACEUTICALS
16,000 Daiichi Pharmaceutical.......... 256,773
11,000 Eisai Co. Ltd................... 216,393
--------------
473,166
--------------
REAL ESTATE
12,000 Cesar Co........................ 62,640
5,000 Chubu Sekiwa Real Estate, Ltd... 64,280
5,000 Kansai Sekiwa Real Estate....... 63,417
23,000 Mitsui Fudosan Co............... 230,198
5,000 Sekiwa Real Estate.............. 40,984
5,000 Tohoku Misawa Homes Co., Ltd.... 59,103
--------------
520,622
--------------
RETAIL
3,300 Ministop Co., Ltd............... 80,578
4,000 Seven - Eleven Japan............ 233,995
7,000 Shimachu Co., Ltd............... 179,379
2,000 Sundrug Co., Ltd................ 66,437
2,000 Xebio Co. Ltd................... 59,534
--------------
619,923
--------------
RETAIL - DEPARTMENT STORES
22,000 Hankyu Department Stores........ 218,292
--------------
RETAIL - GENERAL MERCHANDISE
3,000 Circle K Japan Co. Ltd.......... 129,422
--------------
RETAIL - SPECIALTY
5,000 Aderans Co. Ltd................. 122,088
5,500 Seijo Corp...................... 105,349
--------------
227,437
--------------
STEEL
94,000 Sumitomo Metal Industries....... 231,148
--------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------- --------------
<C> <S> <C>
STEEL & IRON
10,000 Yamato Kogyo Co., Ltd........... $ 92,321
--------------
TELECOMMUNICATIONS
30 DDI Corp........................ 198,274
21,000 Nippon Comsys Corp.............. 239,172
12,000 Nippon Denwa Shisetsu........... 110,785
48 Nippon Telegraph & Telephone
Corp. (ADR)................... 363,624
--------------
911,855
--------------
TEXTILES
5,000 Chuo Warehouse Co............... 48,749
2,200 Maruco Co., Ltd................. 73,840
64,000 Mitsubishi Rayon Co., Ltd....... 236,894
30,000 Nitto Boseki Co*................ 81,536
--------------
441,019
--------------
TRANSPORTATION
17,000 Fukuyama Transporting Co........ 124,970
21,000 Kamigumi Co. Ltd................ 137,705
4,000 Kanto Seino Transportation...... 113,891
27,000 Tokyu Corp...................... 153,287
--------------
529,853
--------------
TRUCKERS
1,000 Sakai Moving Service Co.,
Ltd.*......................... 25,108
--------------
UTILITIES
8,900 Hokkaido Electric Power......... 175,082
--------------
WHOLESALE & INTERNATIONAL TRADE
3,000 Satori Electric Co. Ltd......... 103,279
--------------
WHOLESALE DISTRIBUTOR
5,000 Wakita & Co..................... 60,397
--------------
TOTAL JAPAN..................... 19,023,411
--------------
MALAYSIA (20.4%)
AGRICULTURE
245,000 Highlands & Lowlands Berhad..... 409,465
170,000 Lingui Developments Berhad...... 290,852
--------------
700,317
--------------
AUTOMOTIVE
50,000 Cycle & Carriage Bintang
Berhad........................ 328,713
160,000 Diversified Resources Berhad.... 592,475
100,800 Oriental Holdings Berhad........ 686,638
50,000 Perusahaan Otomobil Nasional
Berhad........................ 316,832
109,000 Tan Chong Motor Holdings
Berhad........................ 184,760
--------------
2,109,418
--------------
BANKING
95,000 DCB Holdings Berhad............. 325,446
37,500 DCB Holdings Berhad (Warrants
due 12/27/99)................. 56,436
152,000 Kwong Yik Bank.................. 535,762
127,600 Malayan Banking Berhad.......... 1,414,970
226,666 Public Bank Berhad
(Alien Market)................ 480,263
40,000 Public Bank Berhad
(Alien Market)................ 81,773
--------------
2,894,650
--------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--PACIFIC GROWTH
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------- --------------
<C> <S> <C>
BUILDING & CONSTRUCTION
116,666 Gamuda Berhad................... $ 494,387
8,333 Gamuda Berhad (Rights).......... 17,161
32,000 Hume Industries (Malaysia)
Berhad........................ 201,505
120,000 Kedah Cement Berhad............. 237,624
150,000 Lingkaran Trans Kota Holdings*.. 308,911
150,000 Malayan Cement Berhad........... 344,554
340,000 Sungei Way Holdings Berhad...... 1,009,901
34,000 Sungei Way Holdings N/P......... 40,396
150,000 United Engineers (Malaysia)
Berhad........................ 1,354,455
--------------
4,008,894
--------------
CHEMICALS
125,000 Chemical Co. of Malaysia
Berhad........................ 361,386
31,250 Chemical Co. of Malaysia Berhad
(Warrants due 11/07/00)*...... 28,960
--------------
390,346
--------------
CONGLOMERATES
400,000 Berjaya Group Berhad............ 340,594
40,000 Gadek Berhad*................... 321,584
280,000 Malaysian Resources Corp.
Berhad........................ 1,103,366
210,000 Renong Berhad................... 372,594
105,000 Sime Darby Berhad............... 413,762
--------------
2,551,900
--------------
CONSTRUCTION PLANT & EQUIPMENT
107,500 YTL Corp. Berhad................ 579,010
--------------
ELECTRONIC & ELECTRICAL EQUIPMENT
39,666 Leader Universal Holdings
Berhad........................ 83,259
--------------
ENGINEERING & CONSTRUCTION
184,000 Intria Berhad................... 462,733
--------------
ENTERTAINMENT
290,000 Magnum Corporation Berhad....... 562,772
254,000 Resorts World Berhad............ 1,156,832
--------------
1,719,604
--------------
FINANCIAL SERVICES
266,000 Affin Holdings Berhad........... 732,158
105,000 Gadek Capital Berhad............ 276,535
80,000 Hong Leong Credit Berhad........ 503,762
297,000 Public Finance Berhad........... 517,545
50,000 Rashid Hussain Berhad........... 330,693
--------------
2,360,693
--------------
HOUSEHOLD APPLIANCES
200,000 Berjaya Singer Bhd.............. 300,990
--------------
INSURANCE
70,000 Malaysian Assurance Alliance
Berhad........................ 340,990
--------------
MANUFACTURING
75,000 Kian Joo Can Factory Berhad..... 415,842
57,000 Malaysian Pacific Industries
Berhad........................ 221,228
19,375 O.Y.L. Industries Berhad........ 203,342
--------------
840,412
--------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------- --------------
<C> <S> <C>
MULTI-INDUSTRY
338,000 Multi-Purpose Holdings Berhad... $ 655,921
338,000 Multi-Purpose Holdings Berhad
(Rights)...................... 15,233
225,000 Nylex Berhad.................... 507,921
--------------
1,179,075
--------------
OIL & GAS PRODUCTS
160,000 Petronas Dagangan Berhad........ 411,881
--------------
PLANTATION
210,000 Industrial Oxygen Incorporated
Berhad........................ 322,693
97,500 Kuala Lumpur Kepong Berhad...... 247,129
--------------
569,822
--------------
REAL ESTATE
100,000 IOI Properties Berhad........... 324,753
177,500 Land & General Berhad........... 425,297
268,000 Metroplex Berhad................ 329,030
225,000 Pelangi Berhad.................. 242,376
200,000 Selangor Properties Berhad...... 219,406
--------------
1,540,862
--------------
TELECOMMUNICATIONS
120,000 Technology Resources Industries
Berhad*....................... 236,673
305,000 Telekom Malaysia Berhad......... 2,717,822
--------------
2,954,495
--------------
TRANSPORTATION
80,000 Konsortium Perkapalan Berhad*... 538,614
140,000 Malaysian Airline System
Berhad........................ 363,168
--------------
901,782
--------------
UTILITIES
60,000 Malakoff Berhad................. 294,654
57,000 Prime Utilities Berhad.......... 564,356
12,000 Prime Utilities Berhad (Warrants
due 03/11/01)*................ 27,564
24,000 Prime Utilities Berhad 1.00% due
03/01/01 (Loan Stock)......... 7,889
354,000 Tenaga Nasional Berhad.......... 1,696,396
--------------
2,590,859
--------------
TOTAL MALAYSIA.................. 29,491,992
--------------
PAKISTAN (0.0%)
TELECOMMUNICATIONS
1,100 Pakistan Telecommunications
Corp. (GDS)*.................. 69,300
--------------
PHILIPPINES (3.2%)
BANKING
70,000 Bank of the Philippine Islands.. 423,838
75,000 Far East Bank & Trust........... 299,886
19,780 Philippine National Bank........ 235,386
107,200 Security Bank Corp.............. 185,743
--------------
1,144,853
--------------
BUILDING & CONSTRUCTION
68,199 Bacnotan Consolidated
Industries.................... 223,348
--------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--PACIFIC GROWTH
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------- --------------
<C> <S> <C>
CONGLOMERATES
340,000 First Philippine Holdings Corp.
(B Shares).................... $ 776,847
600,000 JG Summit Holdings, Inc. (B
Shares)....................... 169,078
--------------
945,925
--------------
ENGINEERING & CONSTRUCTION
1,050,000 DMCI Holdings Inc.*............. 689,737
--------------
FOREST PRODUCTS, PAPER & PACKAGING
52,500 PICOP Resources*................ 8,897
--------------
REAL ESTATE
2,000,000 Belle Corp.*.................... 555,979
460,000 Fil-Estate Land, Inc.*.......... 407,273
$ 150K Filinvest Land, Inc. 3.75% due
01/02/02 (Conv.).............. 143,625
--------------
1,106,877
--------------
UTILITIES
67,500 Manila Electric Co. (B Shares).. 552,647
--------------
TOTAL PHILIPPINES............... 4,672,284
--------------
SINGAPORE (13.6%)
APPLIANCES & HOUSEHOLD DURABLES
300,000 Courts (Singapore) Ltd.......... 373,124
--------------
AUTOMOTIVE
15,000 Singapore Technologies
Automotive Ltd................ 33,453
--------------
BANKING
116,000 Development Bank of Singapore,
Ltd........................... 1,567,119
15,000 Keppel Bank..................... 42,245
159,100 Overseas Chinese Banking Corp.,
Ltd........................... 1,978,799
41,000 Overseas Union Bank, Ltd........ 316,512
161,000 United Overseas Bank, Ltd....... 1,795,282
--------------
5,699,957
--------------
CONGLOMERATES
108,000 Keppel Corp., Ltd............... 841,458
--------------
ELECTRONIC & ELECTRICAL EQUIPMENT
90,000 Elec & Eltek International Co.
Ltd........................... 342,000
400,000 Venture Manufacturing Ltd....... 994,996
--------------
1,336,996
--------------
FINANCE
85,000 Hong Leong Finance Ltd.......... 295,282
--------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
49,600 Fraser & Neave Ltd.............. 510,536
--------------
HOTELS
50,000 Overseas Union Enterprise Ltd... 250,179
210,000 Republic Hotels & Resorts Ltd... 247,677
56,000 Republic Hotels & Resorts Ltd.
(Warrants due 07/12/00)*...... 27,620
--------------
525,476
--------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------- --------------
<C> <S> <C>
MACHINERY
65,000 Van Der Horst Ltd............... $ 271,801
--------------
METALS
340,000 Amtek Engineering Ltd........... 675,626
--------------
PUBLISHING
39,200 Singapore Press Holdings........ 773,352
--------------
REAL ESTATE
12,000 Bukit Sembawang Estates Ltd..... 265,904
150,000 City Developments, Ltd.......... 1,350,965
125,000 DBS Land Ltd.................... 460,150
125,000 Parkway Holdings Ltd............ 491,422
38,000 Singapore Land Ltd.............. 210,508
240,000 United Overseas Land, Ltd....... 365,404
37,000 United Overseas Land, Ltd.
(Warrants due 05/28/01)*...... 22,348
155,000 Wing Tai Holdings Ltd........... 443,174
--------------
3,609,875
--------------
SHIPBUILDING
30,000 Far East Levingston Shipbuilding
Ltd........................... 156,540
130,000 Sembawang Corp. Ltd............. 687,634
--------------
844,174
--------------
STEEL & IRON
250,000 Natsteel Ltd.................... 568,263
--------------
TELECOMMUNICATIONS
400,000 Singapore Telecommunications,
Ltd........................... 943,531
--------------
TRANSPORTATION
350,000 Comfort Group Ltd............... 310,222
220,000 Singapore Airlines Ltd.......... 1,997,141
--------------
2,307,363
--------------
TOTAL SINGAPORE................. 19,610,267
--------------
SOUTH KOREA (5.5%)
AIR TRANSPORT
1,460 Korean Air...................... 23,504
--------------
AUTOMOTIVE
25,000 Hyundai Motor Co., Ltd. (GDR)... 182,500
--------------
BANKING
6,670 Cho Hung Bank................... 54,342
61,000 Cho Hung Bank Co Ltd Gd......... 445,300
33,000 Kangwon Bank.................... 231,098
4,350 Korea Exchange Bank............. 39,499
45,000 Kyungnam Bank................... 480,712
2,740 Shinhan Bank.................... 43,508
--------------
1,294,459
--------------
CHEMICALS
2,316 Sunkyong........................ 32,163
16,000 Sunkyong Ltd.................... 233,591
--------------
265,754
--------------
COMMUNICATIONS - EQUIPMENT/MANUFACTURERS
3,500 LG Information & Communication
Ltd........................... 224,332
220 Sungmi Telecom Electronics...... 32,902
--------------
257,234
--------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--PACIFIC GROWTH
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------- --------------
<C> <S> <C>
ELECTRICAL EQUIPMENT
5,500 Samsung Display Devices Co...... $ 315,312
--------------
ELECTRONIC & ELECTRICAL EQUIPMENT
10,270 Samsung Electronics Co.......... 619,345
--------------
ELECTRONICS
4,388 Samsung Electronics Co.
(GDR)*........................ 78,852
135 Samsung Electronics Co. (GDS)*.. 5,450
--------------
84,302
--------------
ENGINEERING & CONSTRUCTION
2,642 Dong-Ah Constuction Industrial
Co............................ 27,741
30,000 Dong-Ah Construction Industrial
Co. (EDR)*.................... 315,000
15,000 Hyundai Engineering &
Construction Co.*............. 348,961
--------------
691,702
--------------
FOOD PROCESSING
5,000 Cheil Foods & Chemicals......... 201,780
--------------
INDUSTRIALS
$ 200K Kia Precisions Works 0.50% due
12/31/09 (Conv.).............. 221,000
--------------
INSURANCE
10,000 Oriental Fire & Marine
Insurance..................... 206,528
130 Samsung Fire & Marine
Insurance..................... 53,733
--------------
260,261
--------------
INVESTMENT COMPANIES
25,000 Atlantis Korean Smaller Co's*... 181,250
5,000 Atlantis Korean Smaller Co's
(Warrants due 06/30/97)*...... 1,250
--------------
182,500
--------------
OIL RELATED
14,358 Yukong, Ltd. (GDS).............. 272,674
--------------
PHARMACEUTICALS
$ 400K Dong-A Pharmaceutical Co., Ltd.
3.125% due 12/31/06 (Conv.)... 488,000
--------------
STEEL & IRON
4,410 Pohang Iron & Steel Co.......... 257,288
21,800 Pohang Iron & Steel Co., Ltd.
(ADR)......................... 441,450
--------------
698,738
--------------
UTILITIES
30,750 Korea Electric Power Corp....... 897,863
1,000 Samchully Co.................... 70,030
10,000 Seoul City Gas Go Ltd........... 629,080
--------------
1,596,973
--------------
WHOLESALE DISTRIBUTOR
$ 250K Daewoo Corp. 0.25% due 12/31/08
(Conv.)....................... 269,375
--------------
TOTAL SOUTH KOREA............... 7,925,413
--------------
TAIWAN (1.6%)
BUILDING MATERIALS
11,650 Asia Cement Corp. (GDR)......... 214,127
--------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- --------------- --------------
<C> <S> <C>
INVESTMENT COMPANIES
90 Taipei Fund*.................... $ 810,000
26,000 Taiwan American Fund (Pref.)*... 357,500
--------------
1,167,500
--------------
TRANSPORTATION
$ 500K U-Ming Marine Transport 1.50%
due 02/07/01 (Conv.).......... 435,000
$ 504K Yang Ming Marine Transportation
- 144A** 2.00% due 10/06/01
(Conv.)....................... 572,040
--------------
1,007,040
--------------
TOTAL TAIWAN.................... 2,388,667
--------------
THAILAND (4.4%)
BANKING
80,000 Bangkok Bank PCL................ 773,580
50,000 Thai Farmers Bank, Ltd.......... 311,927
--------------
1,085,507
--------------
BUILDING MATERIALS
140,000 Tipco Asphalt Co., Ltd. (Alien
Market)....................... 851,562
--------------
ENTERTAINMENT
20,000 Grammy Entertainment PLC........ 227,707
--------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
75,000 Charoen Pokphand Feedmill Co.
Ltd........................... 271,962
--------------
INVESTMENT COMPANIES
600,000 Ruang Khao 2 Fund (Units)++..... 208,211
--------------
METALS & MINING
23,100 Ban Pu Coal Co., Ltd............ 428,728
76,300 Lanna Lignite Public Co. (Alien
Market)....................... 678,301
--------------
1,107,029
--------------
OIL RELATED
95,000 PTT Exploration & Production
PCL........................... 1,370,531
--------------
TELECOMMUNICATIONS
28,500 Advanced Information Service PCL
(Alien Market)................ 242,250
--------------
TRANSPORTATION
434,000 Bangkok Expressway Public Co.
(Alien Market)*............... 486,509
116,000 Bangkok Expressway Public Co.
(Local Market)*............... 130,035
--------------
616,544
--------------
UTILITIES - ELECTRIC
110,000 Cogeneration Public Co.*........ 409,600
--------------
TOTAL THAILAND.................. 6,390,903
--------------
UNITED KINGDOM (0.7%)
FINANCIAL SERVICES
46,000 HSBC Holdings PLC............... 1,028,914
--------------
TOTAL COMMON AND PREFERRED
STOCKS, WARRANTS, RIGHTS, AND
BONDS (IDENTIFIED COST
$130,383,101)................. 137,581,198
--------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--PACIFIC GROWTH
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS) VALUE
- --------------- --------------
SHORT-TERM INVESTMENTS (4.2%)
<C> <S> <C>
HONG KONG
TIME DEPOSIT (a)
BANKING
HKD 30,343 Chase Manhattan Bank 5.75% due
01/02/97 (Identified Cost
$3,922,891).................... $ 3,922,891
--------------
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS) VALUE
- ------------- --------------
<C> <S> <C>
UNITED STATES
GOVERNMENT AGENCY (b)
$ 2,200 Federal Home Loan Banks
6.50% due 01/02/97 (Amortized
Cost $2,199,603)............... $ 2,199,603
--------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $6,122,494)... 6,122,494
--------------
TOTAL INVESTMENTS (IDENTIFIED
COST
$136,505,595) (C).............. 99.4% 143,703,692
CASH AND OTHER ASSETS IN EXCESS
OF LIABILITIES................. 0.6 832,765
---------- -------------
NET ASSETS....................... 100.0% $ 144,536,457
---------- -------------
---------- -------------
<FN>
- ------------------
ADR AMERICAN DEPOSITORY RECEIPT.
EDR EUROPEAN DEPOSITORY RECEIPT.
GDR GLOBAL DEPOSITORY RECEIPT.
GDS GLOBAL DEPOSITORY SHARES.
K IN THOUSANDS.
* NON-INCOME PRODUCING SECURITY.
** RESALE IS RESTRICTED TO QUALIFIED INSTITUTIONAL INVESTORS.
++ CONSISTS OF MORE THAN ONE CLASS OF SECURITIES TRADED TOGETHER AS A UNIT;
GENERALLY STOCKS WITH ATTACHED WARRANTS.
(A) SUBJECT TO WITHDRAWAL RESTRICTIONS UNTIL MATURITY.
(B) SECURITY WAS PURCHASED ON A DISCOUNT BASIS. THE INTEREST RATE SHOWN HAS
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 $19,319,119 AND THE
AGGREGATE GROSS UNREALIZED DEPRECIATION IS $12,121,022, RESULTING IN NET
UNREALIZED APPRECIATION OF $7,198,097.
</TABLE>
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT DECEMBER 31, 1996:
<TABLE>
<CAPTION>
CONTRACTS IN EXCHANGE DELIVERY UNREALIZED
TO DELIVER FOR DATE DEPRECIATION
- ---------------- ---------------- -------- ---------------
<S> <C> <C> <C> <C> <C>
HKD 2,100,000 $ 271,395 01/06/97 $ (133)
------
------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--PACIFIC GROWTH
SUMMARY OF INVESTMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- --------------------------------------------- ------------ ----------
<S> <C> <C>
Aerospace & Defense.......................... $ 199,957 0.1%
Agriculture.................................. 700,317 0.5
Air Transport................................ 23,504 0.0
Appliances & Household Durables.............. 373,124 0.3
Automotive................................... 3,753,592 2.6
Banking...................................... 17,520,726 12.1
Banks -- International....................... 3,922,891 2.7
Building & Construction...................... 5,274,551 3.6
Building Materials........................... 3,737,781 2.6
Business Services............................ 659,842 0.5
Chemicals.................................... 1,340,570 0.9
Commercial Services.......................... 591,271 0.4
Communications - Equipment/Manufacturers..... 257,234 0.2
Computer Services............................ 213,546 0.1
Computer Software & Services................. 403,451 0.3
Computers.................................... 255,328 0.2
Computers - Systems.......................... 42,709 0.0
Conglomerates................................ 10,156,151 7.0
Construction Plant & Equipment............... 1,291,844 0.9
Data Processing.............................. 125,798 0.1
Electrical Equipment......................... 422,818 0.3
Electronic & Electrical Equipment............ 4,157,476 2.9
Electronics.................................. 614,189 0.4
Electronics - Semiconductors/
Components.................................. 28,818 0.0
Engineering & Construction................... 2,386,220 1.7
Entertainment................................ 2,053,610 1.4
Finance...................................... 295,282 0.2
Financial Services........................... 4,442,197 3.1
Food Processing.............................. 398,153 0.3
Food, Beverage, Tobacco & Household
Products.................................... 2,843,787 2.0
Foods & Beverages............................ 545,345 0.4
Forest Products, Paper & Packaging........... 906,764 0.6
Health & Personal Care....................... 56,514 0.0
Hotels....................................... 525,476 0.4
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- --------------------------------------------- ------------ ----------
<S> <C> <C>
Hotels/Motels................................ $ 281,290 0.2%
Household Furnishings & Appliances........... 97,843 0.1
Household Appliances......................... 300,990 0.2
Industrials.................................. 718,024 0.5
Insurance.................................... 1,189,967 0.8
Investment Companies......................... 2,674,967 1.9
Leisure...................................... 863,373 0.6
Machine Tools................................ 135,289 0.1
Machinery.................................... 1,763,112 1.2
Manufacturing................................ 1,784,933 1.2
Medical Supplies............................. 225,367 0.2
Merchandising................................ 51,769 0.0
Metals....................................... 1,688,955 1.2
Metals & Mining.............................. 2,920,471 2.0
Miscellaneous................................ 636,320 0.4
Miscellaneous Materials & Commodities........ 58,464 0.0
Multi-Industry............................... 1,509,894 1.0
Natural Gas.................................. 205,902 0.1
Oil & Gas Products........................... 411,881 0.3
Oil Related.................................. 2,526,812 1.7
Pharmaceuticals.............................. 961,166 0.7
Plantation................................... 1,051,153 0.8
Publishing................................... 1,054,707 0.7
Real Estate.................................. 19,963,529 13.8
Retail....................................... 1,498,915 1.0
Retail - Department Stores................... 218,292 0.2
Retail - General Merchandise................. 129,422 0.1
Retail - Specialty........................... 575,614 0.4
Shipbuilding................................. 844,174 0.6
Steel........................................ 231,148 0.2
Steel & Iron................................. 1,359,322 0.9
Telecommunications........................... 8,351,876 5.8
Textiles..................................... 441,019 0.3
Transportation............................... 6,057,308 4.2
Truckers..................................... 25,108 0.0
U.S. Government & Agency Obligations......... 2,199,603 1.5
Utilities.................................... 7,332,226 5.1
Utilities - Electric......................... 409,600 0.3
Wholesale & International Trade.............. 103,279 0.1
Wholesale Distributor........................ 329,772 0.2
------------ ---
$143,703,692 99.4%
------------ ---
------------ ---
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
- --------------------------------------------- ------------ ----------
<S> <C> <C>
Common Stocks................................ $133,859,796 92.7%
Convertible Bonds............................ 2,537,869 1.8
Preferred Stocks............................. 357,500 0.2
Rights....................................... 32,394 --
Short-Term Investments....................... 6,122,494 4.2
Warrants..................................... 793,639 0.5
------------ ---
$143,703,692 99.4%
------------ ---
------------ ---
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--EQUITY
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- ---------------
<C> <S> <C>
COMMON STOCKS (95.5%)
AGRICULTURE RELATED (5.3%)
115,000 Archer-Daniels-Midland Co........... $ 2,530,000
75,000 Dekalb Genetics Corp. (Class B)..... 3,806,250
57,000 Delta & Pine Land Co................ 1,824,000
40,000 IMC Global, Inc..................... 1,565,000
200,000 Monsanto Co......................... 7,775,000
16,000 Mycogen Corp.*...................... 336,000
75,000 Pioneer Hi-Bred International,
Inc............................... 5,250,000
25,000 Potash Corp. of Saskatchewan, Inc.
(Canada).......................... 2,125,000
60,000 Tyson Foods, Inc. (Class A)......... 2,047,500
---------------
27,258,750
---------------
APPAREL & FOOTWEAR (0.9%)
57,900 Jones Apparel Group, Inc.*.......... 2,164,012
60,000 Reebok International Ltd. (United
Kingdom).......................... 2,520,000
---------------
4,684,012
---------------
AUTO RELATED (1.0%)
80,000 General Motors Corp................. 4,460,000
35,400 Miller Industries, Inc.*............ 708,000
---------------
5,168,000
---------------
BANKS (7.3%)
80,000 Bank of Boston Corp................. 5,140,000
55,000 BankAmerica Corp.................... 5,486,250
60,000 Chase Manhattan Corp................ 5,355,000
63,000 Citicorp............................ 6,489,000
80,000 First Chicago NBD Corp.............. 4,300,000
15,000 Firstar Corp........................ 787,500
77,600 Mellon Bank Corp.................... 5,509,600
50,000 NationsBank Corp.................... 4,887,500
---------------
37,954,850
---------------
BASIC CYCLICALS (3.2%)
40,000 Aluminum Co. of America............. 2,550,000
100,000 Crown Cork & Seal Co., Inc.......... 5,437,500
40,000 Du Pont (E.I.) de Nemours & Co...... 3,775,000
100,000 RMI Titanium Co.*................... 2,812,500
70,000 Titanium Metals Corp.*.............. 2,283,750
---------------
16,858,750
---------------
BIOTECHNOLOGY (3.8%)
130,000 Biochem Pharma, Inc.*............... 6,483,750
137,000 Biogen, Inc.*....................... 5,274,500
200,000 Centocor, Inc.*..................... 7,150,000
33,000 IDEC Pharmaceuticals Corp.*......... 779,625
---------------
19,687,875
---------------
CAPITAL GOODS (3.1%)
63,000 Boeing Co........................... 6,701,625
70,000 Honeywell, Inc...................... 4,602,500
70,000 United Technologies Corp............ 4,620,000
---------------
15,924,125
---------------
COMMUNICATIONS EQUIPMENT (6.4%)
31,400 ADC Telecommunications, Inc.*....... 973,400
48,000 Adtran, Inc.*....................... 1,992,000
6,200 Advanced Fibre Communications,
Inc.*............................. 344,875
60,000 Andrew Corp.*....................... 3,180,000
20,000 Ascend Communications, Inc.*........ 1,240,000
98,000 Cisco Systems, Inc.*................ 6,235,250
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- ---------------
<C> <S> <C>
80,000 3Com Corp.*......................... $ 5,860,000
55,000 Ericsson (L.M.) Telephone Co. (Class
B) (ADR) (Sweden)................. 1,656,875
20,000 Lucent Technologies, Inc............ 925,000
60,000 Newbridge Networks Corp.*
(Canada).......................... 1,695,000
120,000 Pairgain Technologies, Inc.*........ 3,645,000
50,000 Tellabs, Inc.*...................... 1,881,250
15,000 Uniphase Corp.*..................... 787,500
40,000 U.S. Robotics Corp.*................ 2,880,000
9,100 XlConnect Solutions, Inc............ 261,625
---------------
33,557,775
---------------
COMPUTER EQUIPMENT (5.2%)
15,000 COMPAQ Computer Corp.*.............. 1,113,750
152,000 Dell Computer Corp.*................ 8,075,000
200,000 EMC Corp.*.......................... 6,625,000
40,000 Gateway 2000, Inc.*................. 2,140,000
86,000 Quantum Corp.*...................... 2,440,250
170,000 Seagate Technology, Inc.*........... 6,715,000
---------------
27,109,000
---------------
COMPUTER SERVICES (1.4%)
80,000 Gartner Group, Inc. (Class A)*...... 3,110,000
60,000 Keane, Inc.*........................ 1,905,000
19,000 Reuters Holdings PLC (ADR) (United
Kingdom).......................... 1,453,500
25,000 Transaction Systems Architects, Inc.
(Class A)*........................ 818,750
---------------
7,287,250
---------------
COMPUTER SOFTWARE (5.7%)
60,000 BMC Software, Inc.*................. 2,482,500
43,000 Computer Associates International,
Inc............................... 2,139,250
150,000 Microsoft Corp.*.................... 12,393,750
70,000 Peoplesoft, Inc.*................... 3,351,250
67,900 Rational Software Corp.*............ 2,665,075
8,400 Rogue Wave Software*................ 132,300
100,000 Veritas Software Co.*............... 4,925,000
40,000 Viasoft, Inc.*...................... 1,890,000
---------------
29,979,125
---------------
CONSTRUCTION (0.5%)
29,000 American Standard Companies,
Inc.*............................. 1,109,250
30,000 Miller (Herman), Inc................ 1,687,500
---------------
2,796,750
---------------
CONSUMER BUSINESS SERVICES (1.3%)
22,600 BA Merchant Services, Inc.*......... 403,975
45,000 Diebold, Inc........................ 2,829,375
78,800 National Education Corp.*........... 1,201,700
82,800 Service Corp. International......... 2,318,400
---------------
6,753,450
---------------
CONSUMER - NONCYCLICAL (2.2%)
64,600 Avon Products, Inc.................. 3,690,275
30,000 Colgate-Palmolive Co................ 2,767,500
5,300 Nu Skin Asia Pacific Inc. (Class
A)*............................... 163,676
40,000 PanAmerican Beverages, Inc. (Class
A) (Mexico)....................... 1,875,000
30,000 Procter & Gamble Co................. 3,225,000
---------------
11,721,451
---------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--EQUITY
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- ---------------
<C> <S> <C>
CONSUMER PRODUCTS (1.6%)
65,900 Callaway Golf Company............... $ 1,894,625
66,000 Kroger Co.*......................... 3,069,000
80,000 Safeway, Inc.*...................... 3,420,000
---------------
8,383,625
---------------
DRUGS (4.3%)
70,000 Bristol-Myers Squibb Co............. 7,612,500
59,000 Dura Pharmaceuticals, Inc.*......... 2,809,875
90,000 Lilly (Eli) & Co.................... 6,570,000
70,000 Warner-Lambert Co................... 5,250,000
---------------
22,242,375
---------------
ENERGY (8.2%)
9,000 Apache Corp......................... 318,375
95,000 Baker Hughes, Inc................... 3,277,500
25,600 BJ Services Co.*.................... 1,305,600
38,000 British Petroleum Co. PLC (ADR)
(United Kingdom).................. 5,372,250
25,000 Chesapeake Energy Corp.*............ 1,390,625
40,000 Cooper Cameron Corp.*............... 3,060,000
41,000 Diamond Offshore Drilling, Inc.*.... 2,337,000
24,600 Falcon Drilling Company, Inc.*...... 965,550
130,300 Global Marine, Inc.*................ 2,687,437
48,000 Louisiana Land & Exploration Co..... 2,574,000
23,000 Marine Drilling Company, Inc.*...... 451,375
85,000 Reading & Bates Corp.*.............. 2,252,500
80,000 Rowan Companies, Inc.*.............. 1,810,000
70,000 Schlumberger, Ltd................... 6,991,250
41,000 Smith International, Inc.*.......... 1,839,875
40,000 Transocean Offshore, Inc............ 2,505,000
60,000 Unocal Corp......................... 2,437,500
20,000 Western Atlas, Inc.*................ 1,417,500
---------------
42,993,337
---------------
ENTERTAINMENT, GAMING & LODGING (2.8%)
40,000 HFS Inc.*........................... 2,390,000
190,000 Hilton Hotels Corp.................. 4,963,750
150,000 International Game Technology....... 2,737,500
100,000 Mirage Resorts, Inc.*............... 2,162,500
140,000 Sodak Gaming, Inc.*................. 2,100,000
---------------
14,353,750
---------------
FINANCIAL - MISCELLANEOUS (7.8%)
30,000 American Express Co................. 1,695,000
24,000 Countrywide Credit Industries,
Inc............................... 687,000
57,600 Crescent Real Estate Equities,
Inc............................... 3,038,400
24,800 Federal Home Loan Mortgage Corp..... 2,731,100
160,000 Federal National Mortgage Assoc..... 5,960,000
18,300 Infinity Financial Technology,
Inc.*............................. 306,525
179,200 Lehman Brothers Holdings, Inc....... 5,622,400
100,000 Merrill Lynch & Co., Inc............ 8,150,000
100,000 Morgan Stanley Group, Inc........... 5,712,500
80,000 Paine Webber Group Inc.............. 2,250,000
85,000 PMI Group, Inc...................... 4,706,875
---------------
40,859,800
---------------
HEALTHCARE PRODUCTS & SERVICES (0.7%)
145,000 Health Management Associates, Inc.
(Class A)*........................ 3,262,500
7,000 PhyCor, Inc.*....................... 196,875
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- ---------------
<C> <S> <C>
4,000 Shared Medical Systems Corp......... $ 196,500
---------------
3,655,875
---------------
INSURANCE (3.7%)
50,000 Ace, Ltd. (Bermuda)................. 3,006,250
64,000 Allstate Corp. (Note 3)............. 3,704,000
91,000 Conseco Inc......................... 5,801,250
50,000 Exel Ltd. (Bermuda)................. 1,893,750
52,000 SunAmerica, Inc..................... 2,307,500
60,000 Travelers Group, Inc................ 2,722,500
---------------
19,435,250
---------------
INTERNET (1.0%)
140,000 America Online, Inc.*............... 4,655,000
15,000 Security Dynamics Technologies,
Inc.*............................. 470,625
---------------
5,125,625
---------------
MEDIA GROUP (2.5%)
61,600 Clear Channel Communications,
Inc.*............................. 2,225,300
67,500 Evergreen Media Corp. (Class A)*.... 1,670,625
71,000 Infinity Broadcasting Corp. (Class
A)*............................... 2,387,375
61,000 Lin Television Corp.*............... 2,562,000
63,750 Outdoor Systems, Inc................ 1,785,000
66,600 Univision Communications, Inc.
(Class A)*........................ 2,464,200
---------------
13,094,500
---------------
MEDICAL SUPPLIES (1.7%)
65,000 Boston Scientific Corp.*............ 3,900,000
42,000 Guidant Corp........................ 2,394,000
40,000 Medtronic, Inc...................... 2,720,000
---------------
9,014,000
---------------
RESTAURANTS (0.9%)
80,000 Boston Chicken, Inc.*............... 2,860,000
70,000 Starbucks Corp.*.................... 1,995,000
---------------
4,855,000
---------------
RETAIL (3.1%)
80,000 Dayton-Hudson Corp.................. 3,140,000
54,000 Federated Department Stores, Inc.*.. 1,842,750
17,000 Gucci Group NV (Italy).............. 1,085,875
75,000 Home Depot, Inc..................... 3,759,375
32,800 Neiman-Marcus Group, Inc............ 836,400
130,000 Price/Costco, Inc.*................. 3,266,250
56,000 Tiffany & Co........................ 2,051,000
---------------
15,981,650
---------------
SEMICONDUCTORS (9.3%)
76,000 Altera Corp.*....................... 5,519,500
120,000 Analog Devices, Inc.*............... 4,065,000
130,000 Applied Materials, Inc.*............ 4,663,750
70,000 Atmel Corp.*........................ 2,318,750
48,000 Intel Corp.......................... 6,282,000
150,000 KLA Instruments Corp.*.............. 5,306,250
113,000 Maxim Integrated Products, Inc.*.... 4,887,250
95,000 Microchip Technology, Inc.*......... 4,821,250
140,000 Micron Technology, Inc.............. 4,077,500
30,000 Novellus Systems, Inc.*............. 1,623,750
100,000 Tencor Instruments*................. 2,637,500
50,000 Vitesse Semiconductor Corp.*........ 2,275,000
---------------
48,477,500
---------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--EQUITY
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- ---------------
<C> <S> <C>
TELECOMMUNICATIONS (0.4%)
50,000 McLeod, Inc. (Class A)*............. $ 1,275,000
30,000 Teleport Communications Group Inc.
(Class A)*........................ 911,250
---------------
2,186,250
---------------
TRANSPORTATION (0.2%)
41,600 OMI Corp.*.......................... 364,000
15,000 Teekay Shipping Corp................ 491,250
---------------
855,250
---------------
TOTAL COMMON STOCKS (IDENTIFIED
COST $455,616,320)................ 498,254,950
---------------
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS)
- -----------
<C> <S> <C>
U.S. GOVERNMENT OBLIGATION (1.6%)
$ 38,500 U.S. Treasury Note Strips
0.00% due 5/15/19
(Amortized Cost $8,087,951)...... 8,329,090
---------------
SHORT-TERM INVESTMENTS (2.6%)
U.S. GOVERNMENT AGENCY (A) (1.7%)
9,000 Federal Home Loan Banks
6.50% due 01/02/97
(Amortized Cost $8,998,375)...... 8,998,375
---------------
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS) VALUE
- ----------- ---------------
<C> <S> <C>
REPURCHASE AGREEMENT (0.9%)
$ 4,889 The Bank of New York 5.375% due
01/02/97 (dated 12/31/96;
proceeds $4,890,655;
collateralized by $3,790,228 U.S
Treasury Bonds 7.50% to 10.625%
due 08/15/15 - 11/15/24 valued at
$4,986,979) (Identified
Cost $4,889,195)................. $ 4,889,195
---------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $13,887,570).... 13,887,570
---------------
TOTAL INVESTMENTS (IDENTIFIED
COST $477,591,841) (B)......... 99.7% 520,471,610
OTHER ASSETS IN EXCESS OF
LIABILITIES.................... 0.3 1,436,814
---------- -------------
NET ASSETS....................... 100.0% $ 521,908,424
---------- -------------
---------- -------------
<FN>
- ------------------
ADR AMERICAN DEPOSITORY RECEIPT.
* NON-INCOME PRODUCING SECURITY.
(A) SECURITY WAS PURCHASED ON A DISCOUNT BASIS. THE INTEREST RATE SHOWN HAS
BEEN ADJUSTED TO REFLECT A MONEY MARKET EQUIVALENT YIELD.
(B) THE AGGREGATE COST FOR FEDERAL INCOME TAX PURPOSES APPROXIMATES IDENTIFIED
COST. THE AGGREGATE GROSS UNREALIZED APPRECIATION IS $54,662,238 AND THE
AGGREGATE GROSS UNREALIZED DEPRECIATION IS $11,782,469, RESULTING IN NET
UNREALIZED APPRECATION OF $42,879,769.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--STRATEGIST
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- ---------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS (49.8%)
AEROSPACE & DEFENSE (3.2%)
44,000 Boeing Co............................................................................... $ 4,680,500
75,000 Honeywell, Inc.......................................................................... 4,931,250
160,000 Watkins-Johnson Co...................................................................... 3,920,000
---------------
13,531,750
---------------
ALUMINUM (1.0%)
67,000 Aluminum Co. of America................................................................. 4,271,250
---------------
BANKS - MONEY CENTER (2.2%)
47,000 Citicorp................................................................................ 4,841,000
45,000 Morgan (J.P.) & Co., Inc................................................................ 4,393,125
---------------
9,234,125
---------------
BEVERAGES - SOFT DRINKS (0.8%)
120,000 PepsiCo Inc............................................................................. 3,510,000
---------------
BROKERAGE (2.3%)
64,000 Merrill Lynch & Co., Inc................................................................ 5,216,000
82,000 Morgan Stanley Group, Inc............................................................... 4,684,250
---------------
9,900,250
---------------
CHEMICALS (1.2%)
130,000 Monsanto Co............................................................................. 5,053,750
---------------
COMPUTER EQUIPMENT (2.4%)
70,000 Cisco Systems, Inc.*.................................................................... 4,453,750
144,000 Seagate Technology, Inc.*............................................................... 5,688,000
---------------
10,141,750
---------------
COMPUTER SOFTWARE (2.1%)
60,000 Microsoft Corp.*........................................................................ 4,957,500
90,000 Oracle Corp.*........................................................................... 3,746,250
---------------
8,703,750
---------------
COMPUTERS (1.1%)
90,000 Gateway 2000, Inc.*..................................................................... 4,815,000
---------------
COMPUTERS - SYSTEMS (1.7%)
76,000 Hewlett-Packard Co...................................................................... 3,819,000
134,000 Sun Microsystems, Inc.*................................................................. 3,433,750
---------------
7,252,750
---------------
ELECTRICAL EQUIPMENT (1.6%)
47,000 General Electric Co..................................................................... 4,647,125
110,000 Westinghouse Electric Corp.............................................................. 2,186,250
---------------
6,833,375
---------------
ELECTRONICS - SEMICONDUCTORS/COMPONENTS (1.3%)
42,000 Intel Corp.............................................................................. 5,496,750
---------------
ENTERTAINMENT/GAMING & LODGING (0.9%)
110,000 Circus Circus Enterprises, Inc.*........................................................ 3,781,250
---------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--STRATEGIST
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- ---------------
<C> <S> <C>
FINANCIAL - MISCELLANEOUS (1.1%)
120,000 Federal National Mortgage Assoc......................................................... $ 4,470,000
---------------
FOODS (3.2%)
52,000 Campbell Soup Co........................................................................ 4,173,000
70,000 General Mills, Inc...................................................................... 4,436,250
130,000 Quaker Oats Company (The)............................................................... 4,956,250
---------------
13,565,500
---------------
HEALTHCARE - MISCELLANEOUS (1.9%)
210,000 Humana, Inc.*........................................................................... 4,016,250
47,000 PacifiCare Health Systems, Inc. (Class B)*.............................................. 3,995,000
---------------
8,011,250
---------------
HOUSEHOLD PRODUCTS (1.0%)
48,000 Colgate-Palmolive Co.................................................................... 4,428,000
---------------
HOUSEWARES (0.8%)
60,500 Tupperware Corp......................................................................... 3,244,312
---------------
INDUSTRIALS (1.0%)
66,000 AlliedSignal, Inc....................................................................... 4,422,000
---------------
MEDICAL PRODUCTS & SUPPLIES (0.8%)
84,000 Baxter International, Inc............................................................... 3,444,000
---------------
MULTI-LINE INSURANCE (0.1%)
7,490 Aetna Inc. (Class C) (Conv. Pref.) $1.48................................................ 594,519
---------------
NATURAL GAS (1.1%)
120,000 Williams Companies, Inc................................................................. 4,500,000
---------------
OFFICE EQUIPMENT & SUPPLIES (1.0%)
80,000 Alco Standard Corp...................................................................... 4,130,000
---------------
OIL - DOMESTIC (1.0%)
31,300 Atlantic Richfield Co................................................................... 4,147,250
---------------
OIL INTEGRATED - INTERNATIONAL (2.1%)
45,000 Exxon Corp.............................................................................. 4,410,000
45,000 Texaco, Inc............................................................................. 4,415,625
---------------
8,825,625
---------------
PHARMACEUTICALS (3.7%)
56,000 American Home Products Corp............................................................. 3,283,000
60,000 Lilly (Eli) & Co........................................................................ 4,380,000
75,000 Johnson & Johnson....................................................................... 3,731,250
50,000 Pfizer, Inc............................................................................. 4,143,750
---------------
15,538,000
---------------
RETAIL (0.9%)
100,000 Dayton-Hudson Corp...................................................................... 3,925,000
---------------
RETAIL - SPECIALTY (2.0%)
75,000 Home Depot, Inc......................................................................... 3,759,375
126,000 Payless ShoeSource, Inc.*............................................................... 4,725,000
---------------
8,484,375
---------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--STRATEGIST
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- ---------------
<C> <S> <C>
RETAIL - SPECIALTY APPAREL (0.7%)
100,000 Gap, Inc................................................................................ $ 3,012,500
---------------
SAVINGS & LOAN ASSOCIATIONS (2.3%)
70,000 Golden West Financial Corp.............................................................. 4,418,750
250,000 Roosevelt Financial Group, Inc.......................................................... 5,187,500
---------------
9,606,250
---------------
SHIPPING (0.4%)
80,000 APL Ltd................................................................................. 1,890,000
---------------
SHOES (0.9%)
64,000 Nike, Inc. (Class B).................................................................... 3,824,000
---------------
STEEL & IRON (1.0%)
133,000 Inland Steel Industries, Inc............................................................ 2,660,000
30,000 Nucor Corp.............................................................................. 1,530,000
---------------
4,190,000
---------------
TELECOMMUNICATIONS (0.6%)
92,000 Newbridge Networks Corp.* (Canada)...................................................... 2,599,000
---------------
UTILITIES - ELECTRIC (0.4%)
60,000 Kansas City Power & Light Co............................................................ 1,710,000
---------------
TOTAL COMMON AND PREFERRED STOCKS (IDENTIFIED COST $168,327,131)........................ 211,087,331
---------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE
- ----------- ---------- ---------
<C> <S> <C> <C> <C>
CORPORATE BONDS (27.0%)
AIRLINES (2.0%)
$ 3,000 America West Airlines................................................ 6.86% 07/02/04 2,992,500
1,612 United Air Lines, Inc................................................ 10.125 03/22/15 1,932,708
3,100 United Air Lines, Inc................................................ 9.35 04/07/16 3,491,375
---------------
8,416,583
---------------
BANKS (5.1%)
2,000 Banque Paribas of New York........................................... 6.875 03/01/09 1,895,060
3,000 Capital One Bank Corp................................................ 6.74 05/31/99 3,009,540
2,160 First Nationwide Bank................................................ 10.00 10/01/06 2,500,308
3,000 MBNA Capital Inc..................................................... 8.278 12/01/26 3,011,250
3,000 People's Bank-Bridgeport............................................. 7.20 12/01/06 2,933,370
3,000 Provident Bank - 144A **............................................. 8.60 12/01/26 3,030,000
3,000 Skandinaviska Enskilda Banken (Hong Kong) - 144A **.................. 8.125 09/06/49 3,135,000
2,000 Standard Federal Bancorp............................................. 7.75 07/17/06 2,088,820
---------------
21,603,348
---------------
BEVERAGES - SOFT DRINKS (0.5%)
2,000 Coca-Cola Enterprises, Inc........................................... 8.50 02/01/22 2,246,780
---------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--STRATEGIST
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- ---------- --------- ---------------
<C> <S> <C> <C> <C>
BROKERAGE (1.0%)
$ 2,000 Lehman Brothers Holdings Inc......................................... 8.05% 01/15/19 $ 2,118,480
2,000 Paine Webber Group, Inc.............................................. 8.25 05/01/02 2,107,940
---------------
4,226,420
---------------
CABLE/CELLULAR (0.5%)
2,000 Tele-Communications, Inc............................................. 9.25 04/15/02 2,111,540
---------------
COMPUTERS (0.6%)
3,000 International Business Machines...................................... 7.125 12/01/96 2,865,000
---------------
ENERGY (0.7%)
3,000 Freeport-McMoran C & G Co............................................ 7.50 11/15/06 2,944,500
---------------
ENTERTAINMENT (0.5%)
2,000 Time Warner Inc...................................................... 9.125 01/15/13 2,212,880
---------------
FINANCE (0.5%)
2,000 Terra Nova Holdings (United Kingdom)................................. 10.75 07/01/05 2,252,860
---------------
FINANCIAL (7.6%)
4,000 Arkwright CSN Trust - 144A**......................................... 9.625 08/15/26 4,380,000
2,000 Associates Corp. N.A................................................. 6.25 03/15/99 1,999,460
2,000 Associates Corp. N.A................................................. 6.375 08/15/99 2,002,220
2,000 BankBoston Capital Trust II - 144A**................................. 7.75 12/15/26 1,922,500
2,000 Farmers Insurance Exchange - 144A**.................................. 8.50 08/01/04 2,127,500
2,000 Firstar Capital Trust I - 144A**..................................... 8.32 12/15/26 2,037,500
3,000 GMAC Asset Trust - 144A**............................................ 6.375 09/30/98 3,007,500
3,000 Guangdong International Trust & Investment - 144A** (South Korea).... 8.75 10/24/16 3,090,000
2,000 Lehman Brothers Holdings............................................. 6.625 11/15/00 1,987,560
1,650 Price Reit Inc....................................................... 7.25 11/01/00 1,664,850
2,000 RHG Finance Corp..................................................... 8.875 10/01/05 2,124,820
2,000 State Street Institute Capital - A................................... 7.94 12/30/26 2,010,000
4,000 W.R. Berkley Capital Trust - 144A**.................................. 8.197 12/15/45 3,940,000
---------------
32,293,910
---------------
FINANCIAL SERVICES (1.1%)
2,000 Conseco, Inc......................................................... 10.50 12/15/04 2,364,760
2,000 Lumbermens Mutual Casualty - 144A**.................................. 9.15 07/01/26 2,182,500
---------------
4,547,260
---------------
FOREIGN GOVERNMENT AGENCY (0.8%)
1,000 Quebec Province (Canada)............................................. 6.89 04/15/26 1,010,000
2,000 Quebec Province (Canada)............................................. 8.625 12/01/26 2,243,340
---------------
3,253,340
---------------
INDUSTRIALS (2.0%)
2,000 Anixter International Inc............................................ 8.00 09/15/03 2,039,100
2,000 Legrand S.A. (France)................................................ 8.50 02/15/25 2,240,660
4,000 Reliance Industries. Inc - 144A**.................................... 10.50 08/06/46 4,269,520
---------------
8,549,280
---------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--STRATEGIST
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- ---------- --------- ---------------
<C> <S> <C> <C> <C>
TELECOMMUNICATIONS (1.2%)
$ 2,000 360 Communications Co................................................ 7.125% 03/01/03 $ 1,974,380
3,000 Total Access Communication - 144A**.................................. 8.375 11/04/06 3,026,250
---------------
5,000,630
---------------
TELEPHONES (0.5%)
2,000 British Telecom Finance (United Kingdom)............................. 9.625 02/15/19 2,181,100
---------------
TOBACCO (1.0%)
2,000 Philip Morris Companies, Inc......................................... 7.50 01/15/02 2,047,220
2,000 Philip Morris Companies, Inc......................................... 7.65 07/01/08 2,050,620
---------------
4,097,840
---------------
TRANSPORTATION EQUIPMENT (0.9%)
3,100 Jet Equipment Trust - 144A**......................................... 10.91 08/15/14 3,642,500
---------------
UTILITIES - ELECTRIC (0.5%)
2,000 Niagara Mohawk Power Corp............................................ 9.25 10/01/01 2,019,580
---------------
TOTAL CORPORATE BONDS (IDENTIFIED COST $112,302,271)........................................ 114,465,351
---------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS (15.0%)
2,000 Federal Home Loan Banks.............................................. 7.00 10/03/01 2,000,000
3,000 U.S. Treasury Bond................................................... 7.625 02/15/25 3,331,320
6,000 U.S. Treasury Note................................................... 5.625 11/30/00 5,894,460
3,000 U.S. Treasury Note................................................... 5.75 09/30/97 3,005,100
2,000 U.S. Treasury Note................................................... 5.75 08/15/03 1,938,100
6,000 U.S. Treasury Note................................................... 6.00 08/31/97 6,016,860
2,000 U.S. Treasury Note................................................... 6.375 05/15/99 2,018,080
500 U.S. Treasury Note................................................... 6.50 04/30/99 506,080
4,500 U.S. Treasury Note................................................... 6.75 04/30/00 4,587,345
2,000 U.S. Treasury Note................................................... 6.875 08/31/99 2,042,380
7,000 U.S. Treasury Note................................................... 6.875 03/31/00 7,160,650
4,000 U.S. Treasury Note................................................... 7.25 05/15/04 4,203,800
1,000 U.S. Treasury Note................................................... 7.25 08/15/04 1,051,380
19,000 U.S. Treasury Note................................................... 7.75 12/31/99 19,879,130
---------------
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(IDENTIFIED COST $65,413,173)............................................................. 63,634,685
---------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--STRATEGIST
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- ---------- --------- ---------------
<C> <S> <C> <C> <C>
SHORT-TERM INVESTMENTS (7.5%)
U.S. GOVERNMENT AGENCIES (A) (7.1%)
$ 20,000 Federal Home Loan Bank............................................... 6.50% 01/02/97 $ 19,996,389
10,000 Federal Home Loan Mortgage Corp...................................... 5.47 01/03/97 9,996,961
---------------
TOTAL U.S. GOVERNMENT AGENCIES
(Amortized Cost $29,993,350).............................................................. 29,993,350
---------------
REPURCHASE AGREEMENT (0.4%)
1,635 The Bank of New York (dated 12/31/96; proceeds $1,635,330;
collateralized by $1,308,510 U.S Treasury Bonds 7.25% to 7.625% due
05/15/16 to 11/15/22 valued at $1,436,508 and by $228,377 U.S
Treasury Note 6.25% due 10/31/01 valued at $231,031) (Identified
Cost $1,634,842)................................................... 5.375 01/02/97 1,634,842
---------------
TOTAL SHORT-TERM INVESTMENTS (IDENTIFIED COST $31,628,192).................................. 31,628,192
---------------
TOTAL INVESTMENTS (IDENTIFIED COST $377,670,767) (B)................... 99.3% 420,815,559
OTHER ASSETS IN EXCESS OF LIABILITIES.................................. 0.7 2,952,293
---------- -------------
NET ASSETS............................................................. 100.0% $ 423,767,852
---------- -------------
---------- -------------
<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 $47,190,336 AND THE
AGGREGATE GROSS UNREALIZED DEPRECIATION IS $4,045,544, RESULTING IN NET
UNREALIZED APPRECIATION OF $43,144,792.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
QUALITY
MONEY MARKET INCOME PLUS HIGH YIELD UTILITIES
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities, at value *... $340,232,603 $468,171,123 $254,650,969 $439,106,977
Cash.................................... 12,389 -- -- --
Receivable for:
Investments sold...................... -- -- -- --
Shares of beneficial interest sold.... 44 -- 26,261 --
Dividends............................. -- -- -- 1,335,622
Interest.............................. 372,349 6,797,681 5,741,923 723,329
Foreign withholding taxes reclaimed... -- -- -- --
Prepaid expenses and other assets....... 3,020 3,338 26,976 6,847
------------ ------------ ------------ ------------
TOTAL ASSETS.................... 340,620,405 474,972,142 260,446,129 441,172,775
------------ ------------ ------------ ------------
LIABILITIES:
Payable for:
Investments purchased................. -- -- 748,750 --
Shares of beneficial interest
repurchased......................... 193,366 41,164 364 217,257
Investment management fee............. 145,803 209,255 110,579 250,029
Accrued expenses and other payables..... 43,195 61,511 37,895 43,623
------------ ------------ ------------ ------------
TOTAL LIABILITIES............... 382,364 311,930 897,588 510,909
------------ ------------ ------------ ------------
NET ASSETS:
Paid-in-capital......................... 340,237,797 492,383,880 348,017,773 356,859,427
Accumulated undistributed net investment
income................................ 244 67,529 15,210 --
Accumulated undistributed net realized
gain (loss)........................... -- (27,455,184) (72,098,239) 5,340,523
Net unrealized appreciation
(depreciation)........................ -- 9,663,987 (16,386,203) 78,461,916
------------ ------------ ------------ ------------
NET ASSETS...................... $340,238,041 $474,660,212 $259,548,541 $440,661,866
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
*IDENTIFIED COST........................ $340,232,603 $458,507,136 $271,037,172 $360,645,061
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
SHARES OF BENEFICIAL INTEREST
OUTSTANDING........................... 340,237,797 45,752,768 42,004,612 28,734,976
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
NET ASSET VALUE PER SHARE (unlimited
authorized shares of $.01 par
value)................................ $1.00 $10.37 $6.18 $15.34
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
<FN>
- ------------------
** Includes foreign cash of $460,644 and $1,098,296, respectively.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL
DIVIDEND CAPITAL DIVIDEND EUROPEAN PACIFIC
GROWTH GROWTH GROWTH GROWTH GROWTH EQUITY STRATEGIST
-------------- ----------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments in securities, at
value *..................... $1,286,987,922 $87,235,988 $337,514,490 $300,207,994 $143,703,692 $520,471,610 $420,815,559
Cash.......................... -- -- 1,279,230 1,569,071** 1,662,153** -- --
Receivable for:
Investments sold............ 790,324 637,389 965,620 403,865 -- 4,680,611 --
Shares of beneficial
interest sold............. 343,986 64 196,157 155,288 -- 131,351 2,967
Dividends................... 2,592,137 31,485 668,935 350,675 49,482 198,208 189,050
Interest.................... 955,133 63 13,826 13,987 28,049 730 2,996,688
Foreign withholding taxes
reclaimed................. -- -- 294,384 330,180 1,157 -- --
Prepaid expenses and other
assets...................... 10,044 1,922 3,502 4,330 5,525 5,600 2,994
-------------- ----------- ------------ ------------ ------------ ------------ ------------
TOTAL ASSETS.......... 1,291,679,546 87,906,911 340,936,144 303,035,390 145,450,058 525,488,110 424,007,258
-------------- ----------- ------------ ------------ ------------ ------------ ------------
LIABILITIES:
Payable for:
Investments purchased....... 2,604,050 963,365 5,790,815 268,425 478,468 3,300,270 --
Shares of beneficial
interest repurchased...... -- 3,120 5,133 484 161,153 752 1,228
Investment management fee... 607,696 48,841 216,192 251,876 126,005 228,540 186,511
Accrued expenses and other
payables.................... 63,373 29,435 103,062 92,551 147,975 50,124 51,667
-------------- ----------- ------------ ------------ ------------ ------------ ------------
TOTAL LIABILITIES..... 3,275,119 1,044,761 6,115,202 613,336 913,601 3,579,686 239,406
-------------- ----------- ------------ ------------ ------------ ------------ ------------
NET ASSETS:
Paid-in-capital............... 915,310,805 65,244,908 276,789,851 208,223,367 143,272,989 437,122,352 370,797,235
Accumulated undistributed net
investment income........... 105 406,472 348,453 2,259,627 1,663,988 763 16,567
Accumulated undistributed net
realized gain (loss)........ 74,080,198 11,319,500 16,157,781 18,157,740 (7,597,217) 41,905,540 9,809,258
Net unrealized appreciation
(depreciation).............. 299,013,319 9,891,270 41,524,857 73,781,320 7,196,697 42,879,769 43,144,792
-------------- ----------- ------------ ------------ ------------ ------------ ------------
NET ASSETS............ $1,288,404,427 $86,862,150 $334,820,942 $302,422,054 $144,536,457 $521,908,424 $423,767,852
-------------- ----------- ------------ ------------ ------------ ------------ ------------
-------------- ----------- ------------ ------------ ------------ ------------ ------------
*IDENTIFIED COST.............. $ 987,974,603 $77,344,718 $295,999,690 $226,432,845 $136,505,595 $477,591,841 $377,670,767
-------------- ----------- ------------ ------------ ------------ ------------ ------------
-------------- ----------- ------------ ------------ ------------ ------------ ------------
SHARES OF BENEFICIAL INTEREST
OUTSTANDING................. 70,017,080 5,215,456 25,502,657 14,026,817 14,506,677 19,778,958 30,890,244
-------------- ----------- ------------ ------------ ------------ ------------ ------------
-------------- ----------- ------------ ------------ ------------ ------------ ------------
NET ASSET VALUE PER
SHARE (unlimited authorized
shares of $.01 par value)... $18.40 $16.65 $13.13 $21.56 $9.96 $26.39 $13.72
-------------- ----------- ------------ ------------ ------------ ------------ ------------
-------------- ----------- ------------ ------------ ------------ ------------ ------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
QUALITY
MONEY MARKET INCOME PLUS HIGH YIELD UTILITIES
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest................................ $ 15,967,394 $ 35,505,039 $ 26,452,356 $ 4,021,333
Dividends............................... -- -- -- 15,549,589**
------------- ------------- ------------- -------------
TOTAL INCOME.................... 15,967,394 35,505,039 26,452,356 19,570,922
------------- ------------- ------------- -------------
EXPENSES
Investment management fee............... 1,454,423 2,407,993 1,009,452 2,972,835
Transfer agent fees and expenses........ 1,000 1,000 1,000 1,000
Shareholder reports and notices......... 14,143 21,368 -- 15,870
Professional fees....................... 28,258 29,970 1,825 28,226
Trustees' fees and expenses............. 1,109 4,670 807 1,952
Custodian fees.......................... 20,278 71,629 18,946 28,637
Other................................... 5,643 17,846 4,776 9,369
------------- ------------- ------------- -------------
TOTAL EXPENSES.................. 1,524,854 2,554,476 1,036,806 3,057,889
------------- ------------- ------------- -------------
NET INVESTMENT INCOME....... 14,442,540 32,950,563 25,415,550 16,513,033
------------- ------------- ------------- -------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments....................... -- (2,603,573) (5,282,128) 5,380,515
Foreign exchange transactions..... -- -- -- --
------------- ------------- ------------- -------------
NET GAIN (LOSS)................. -- (2,603,573) (5,282,128) 5,380,515
------------- ------------- ------------- -------------
Net change in unrealized
appreciation/depreciation on:
Investments....................... -- (24,916,368) 2,235,871 14,769,561
Translation of forward foreign
currency contracts, other assets
and liabilities denominated in
foreign currencies.............. -- -- -- --
------------- ------------- ------------- -------------
NET APPRECIATION
(DEPRECIATION)................ -- (24,916,368) 2,235,871 14,769,561
------------- ------------- ------------- -------------
NET GAIN (LOSS)................. -- (27,519,941) (3,046,257) 20,150,076
------------- ------------- ------------- -------------
NET INCREASE................ $ 14,442,540 $ 5,430,622 $ 22,369,293 $ 36,663,109
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
<FN>
- ------------------
* Net of $2,591 foreign witholding tax.
** Net of $158,294, $116,527, $564, $737,043, $731,249, $273,348 and
$13,378 foreign witholding tax, respectively.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL
DIVIDEND CAPITAL DIVIDEND EUROPEAN PACIFIC
GROWTH GROWTH GROWTH GROWTH GROWTH EQUITY STRATEGIST
------------ ---------- ----------- ------------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest...................... $ 3,060,823 $ 283,463 $ 186,926 $ 628,715 $ 412,382* $ 1,628,837 $10,578,267
Dividends..................... 29,108,427** 691,115** 7,259,862** 4,226,975** 2,911,717** 3,304,593** 4,655,430
------------ ---------- ----------- ------------- ---------- ----------- -----------
TOTAL INCOME.......... 32,169,250 974,578 7,446,788 4,855,690 3,324,099 4,933,430 15,233,697
------------ ---------- ----------- ------------- ---------- ----------- -----------
EXPENSES
Investment management fee..... 5,902,896 509,004 2,005,162 2,332,742 1,397,813 2,211,777 1,994,396
Transfer agent fees and
expenses.................... 1,000 1,000 1,000 1,000 1,000 1,000 1,000
Shareholder reports and
notices..................... 50,854 5,432 13,087 12,360 3,271 15,918 16,920
Professional fees............. 28,566 30,787 33,336 67,924 45,571 29,828 25,262
Trustees' fees and expenses... 4,406 201 1,425 985 1,060 1,158 1,922
Custodian fees................ 56,152 20,823 203,544 159,461 428,891 112,250 39,708
Other......................... 12,237 517 10,419 16,726 33,894 4,527 10,664
------------ ---------- ----------- ------------- ---------- ----------- -----------
TOTAL EXPENSES........ 6,056,111 567,764 2,267,973 2,591,198 1,911,500 2,376,458 2,089,872
------------ ---------- ----------- ------------- ---------- ----------- -----------
NET INVESTMENT
INCOME.......... 26,113,139 406,814 5,178,815 2,264,492 1,412,599 2,556,972 13,143,825
------------ ---------- ----------- ------------- ---------- ----------- -----------
NET REALIZED AND UNREALIZED
GAIN (LOSS):
Net realized gain (loss)
on:
Investments............. 76,341,307 11,957,509 17,474,321 19,107,457 (2,397,792) 42,116,968 9,836,251
Foreign exchange
transactions.......... -- -- (20,026) 440,246 (77,285) -- --
------------ ---------- ----------- ------------- ---------- ----------- -----------
NET GAIN (LOSS)....... 76,341,307 11,957,509 17,454,295 19,547,703 (2,475,077) 42,116,968 9,836,251
------------ ---------- ----------- ------------- ---------- ----------- -----------
Net change in unrealized
appreciation/depreciation
on:
Investments............. 126,566,513 (4,318,064) 21,226,194 41,045,757 3,540,486 5,775,201 32,734,426
Translation of forward
foreign currency
contracts, other
assets and liabilities
denominated in foreign
currencies............ -- -- 10,306 28,906 (141) -- --
------------ ---------- ----------- ------------- ---------- ----------- -----------
NET APPRECIATION
(DEPRECIATION)...... 126,566,513 (4,318,064) 21,236,500 41,074,663 3,540,345 5,775,201 32,734,426
------------ ---------- ----------- ------------- ---------- ----------- -----------
NET GAIN (LOSS)....... 202,907,820 7,639,445 38,690,795 60,622,366 1,065,268 47,892,169 42,570,677
------------ ---------- ----------- ------------- ---------- ----------- -----------
NET INCREASE...... $229,020,959 $8,046,259 $43,869,610 $ 62,886,858 $2,477,867 $50,449,141 $55,714,502
------------ ---------- ----------- ------------- ---------- ----------- -----------
------------ ---------- ----------- ------------- ---------- ----------- -----------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31,
<TABLE>
<CAPTION>
MONEY MARKET QUALITY INCOME PLUS
--------------------------- ---------------------------
1996 1995 1996 1995
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income............... $ 14,442,540 $ 13,741,500 $ 32,950,563 $ 32,845,926
Net realized gain (loss)............ -- -- (2,603,573) 14,651,610
Net change in unrealized
appreciation/depreciation......... -- -- (24,916,368) 53,023,332
------------- ------------ ------------- ------------
Net increase.................... 14,442,540 13,741,500 5,430,622 100,520,868
------------- ------------ ------------- ------------
Dividends and distributions from:
Net investment income............... (14,442,318) (13,741,498) (33,491,200) (32,322,904)
Net realized gain................... -- -- -- --
------------- ------------ ------------- ------------
Total........................... (14,442,318) (13,741,498) (33,491,200) (32,322,904)
------------- ------------ ------------- ------------
Transactions in shares of beneficial
interest:
Net proceeds from sales............. 199,781,437 96,881,194 18,363,915 36,146,570
Reinvestment of dividends and
distributions..................... 14,442,318 13,741,498 33,491,200 32,322,904
Cost of shares repurchased.......... (123,772,522) (129,460,561) (69,712,880) (30,993,795)
------------- ------------ ------------- ------------
Net increase (decrease)......... 90,451,233 (18,837,869) (17,857,765) 37,475,679
------------- ------------ ------------- ------------
Total increase (decrease)....... 90,451,455 (18,837,867) (45,918,343) 105,673,643
NET ASSETS:
Beginning of period................... 249,786,586 268,624,453 520,578,555 414,904,912
------------- ------------ ------------- ------------
END OF PERIOD......................... $ 340,238,041 $249,786,586 $ 474,660,212 $520,578,555
------------- ------------ ------------- ------------
------------- ------------ ------------- ------------
Undistributed net investment income..... $ 244 $ 22 $ 67,529 $ 608,166
------------- ------------ ------------- ------------
------------- ------------ ------------- ------------
SHARES ISSUED AND REPURCHASED:
Sold.................................. 199,781,437 96,881,194 1,751,757 3,515,633
Issued in reinvestment of dividends
and distributions................... 14,442,318 13,741,498 3,241,058 3,154,028
Repurchased........................... (123,772,522) (129,460,561) (6,752,796) (3,077,582)
------------- ------------ ------------- ------------
Net increase (decrease)............... 90,451,233 (18,837,869) (1,759,981) 3,592,079
------------- ------------ ------------- ------------
------------- ------------ ------------- ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HIGH YIELD UTILITIES DIVIDEND GROWTH
--------------------------- --------------------------- --------------------------
1996 1995 1996 1995 1996 1995
------------- ------------ ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
Operations:
Net investment income..... $ 25,415,550 $ 17,067,326 $ 16,513,033 $ 16,939,135 $ 26,113,139 $ 19,552,389
Net realized gain
(loss).................. (5,282,128) (1,098,358) 5,380,515 3,776,681 76,341,307 25,514,561
Net change in unrealized
appreciation/depreciation.. 2,235,871 2,521,011 14,769,561 86,839,183 126,566,513 170,908,947
------------- ------------ ------------- ------------ ------------ ------------
Net increase.......... 22,369,293 18,489,979 36,663,109 107,554,999 229,020,959 215,975,897
------------- ------------ ------------- ------------ ------------ ------------
Dividends and distributions
from:
Net investment income..... (25,894,730) (16,648,733) (16,518,454) (18,544,715) (26,130,248) (20,821,765)
Net realized gain......... -- -- (1,186,573) -- (25,851,911) (12,652,636)
------------- ------------ ------------- ------------ ------------ ------------
Total................. (25,894,730) (16,648,733) (17,705,027) (18,544,715) (51,982,159) (33,474,401)
------------- ------------ ------------- ------------ ------------ ------------
Transactions in shares of
beneficial interest:
Net proceeds from sales... 97,281,752 36,566,043 10,173,470 25,533,783 216,135,874 101,006,743
Reinvestment of dividends
and distributions....... 25,894,730 16,648,733 17,705,027 18,544,715 51,982,159 33,474,401
Cost of shares
repurchased............. (14,412,089) (12,680,679) (85,244,858) (36,430,389) (22,169,232) (24,518,137)
------------- ------------ ------------- ------------ ------------ ------------
Net increase
(decrease).......... 108,764,393 40,534,097 (57,366,361) 7,648,109 245,948,801 109,963,007
------------- ------------ ------------- ------------ ------------ ------------
Total increase
(decrease).......... 105,238,956 42,375,343 (38,408,279) 96,658,393 422,987,601 292,464,503
NET ASSETS:
Beginning of period......... 154,309,585 111,934,242 479,070,145 382,411,752 865,416,826 572,952,323
------------- ------------ ------------- ------------ ------------ ------------
END OF PERIOD............... $ 259,548,541 $154,309,585 $ 440,661,866 $479,070,145 $1,288,404,427 $865,416,826
------------- ------------ ------------- ------------ ------------ ------------
------------- ------------ ------------- ------------ ------------ ------------
Undistributed net investment
income...................... $ 15,210 $ 494,390 $ -- $ 5,421 $ 105 $ 17,214
------------- ------------ ------------- ------------ ------------ ------------
------------- ------------ ------------- ------------ ------------ ------------
SHARES ISSUED AND REPURCHASED:
Sold........................ 15,513,116 5,834,627 688,255 1,947,513 12,705,268 7,140,373
Issued in reinvestment of
dividends and
distributions............. 4,153,525 2,658,293 1,195,247 1,407,989 3,121,829 2,413,931
Repurchased................. (2,293,681) (2,029,027) (5,772,285) (2,821,228) (1,315,470) (1,815,800)
------------- ------------ ------------- ------------ ------------ ------------
Net increase (decrease)..... 17,372,960 6,463,893 (3,888,783) 534,274 14,511,627 7,738,504
------------- ------------ ------------- ------------ ------------ ------------
------------- ------------ ------------- ------------ ------------ ------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31,
<TABLE>
<CAPTION>
CAPITAL GROWTH GLOBAL DIVIDEND GROWTH
---------------------- ---------------------------
1996 1995 1996 1995
----------- --------- ------------- ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income............... $ 406,814 3$87,427 $ 5,178,815 $ 3,729,139
Net realized gain (loss)............ 11,957,509 2,153,798 17,454,295 6,300,237
Net change in unrealized
appreciation/depreciation......... (4,318,064) 13,237,372 21,236,500 23,341,679
----------- --------- ------------- ------------
Net increase.................... 8,046,259 15,778,597 43,869,610 33,371,055
----------- --------- ------------- ------------
Dividends and distributions from:
Net investment income............... (132,322) (310,895) (5,251,753) (4,044,117)
Net realized gain................... (1,337,440) -- (6,985,312) (222,586)
In excess of net investment
income............................ -- -- -- --
----------- --------- ------------- ------------
Total........................... (1,469,762) (310,895) (12,237,065) (4,266,703)
----------- --------- ------------- ------------
Transactions in shares of beneficial
interest:
Net proceeds from sales............. 21,627,226 14,176,359 90,625,831 41,054,512
Reinvestment of dividends and
distributions..................... 1,469,762 310,895 12,237,065 4,266,703
Cost of shares repurchased.......... (9,806,505) (8,675,047) (5,413,023) (7,173,082)
----------- --------- ------------- ------------
Net increase (decrease)......... 13,290,483 5,812,207 97,449,873 38,148,133
----------- --------- ------------- ------------
Total increase (decrease)....... 19,866,980 21,279,909 129,082,418 67,252,485
NET ASSETS:
Beginning of period................... 66,995,170 45,715,261 205,738,524 138,486,039
----------- --------- ------------- ------------
END OF PERIOD......................... $86,862,150 66,$995,170 $ 334,820,942 $205,738,524
----------- --------- ------------- ------------
----------- --------- ------------- ------------
Undistributed net investment income..... $ 406,472 1$31,980 $ 348,453 $ 73,685
----------- --------- ------------- ------------
----------- --------- ------------- ------------
SHARES ISSUED AND REPURCHASED:
Sold.................................. 1,329,674 1,056,301 7,330,384 3,795,718
Issued in reinvestment of dividends
and distributions................... 96,568 24,762 1,008,262 397,706
Repurchased........................... (611,382) (649,418) (440,583) (688,539)
----------- --------- ------------- ------------
Net increase (decrease)............... 814,860 431,645 7,898,063 3,504,885
----------- --------- ------------- ------------
----------- --------- ------------- ------------
<FN>
- ------------------
* Dividends in excess of net investment income.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EUROPEAN GROWTH PACIFIC GROWTH
--------------------------- -------------------------
1996 1995 1996 1995
------------ ------------- ------------ -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
Operations:
Net investment income..... $ 2,264,492 $ 2,114,492 $ 1,412,599 $ 1,021,997
Net realized gain
(loss).................. 19,547,703 10,996,721 (2,475,077) (2,760,376)
Net change in unrealized
appreciation/depreciation... 41,074,663 24,638,745 3,540,345 6,493,134
------------ ------------- ------------ -----------
Net increase.......... 62,886,858 37,749,958 2,477,867 4,754,755
------------ ------------- ------------ -----------
Dividends and distributions
from:
Net investment income..... (531,371) (1,774,678) (1,651,362) (719,960)
Net realized gain......... (11,996,632) (5,391,962) -- (15,252)
In excess of net
investment income....... -- (210,717) -- --
------------ ------------- ------------ -----------
Total................. (12,528,003) (7,377,357) (1,651,362) (735,212)
------------ ------------- ------------ -----------
Transactions in shares of
beneficial interest:
Net proceeds from sales... 60,993,831 18,351,213 66,862,929 33,260,368
Reinvestment of dividends
and distributions....... 12,528,003 7,377,357 1,651,362 735,212
Cost of shares
repurchased............. (9,578,044) (20,019,201) (23,134,634) (15,110,167)
------------ ------------- ------------ -----------
Net increase
(decrease).......... 63,943,790 5,709,369 45,379,657 18,885,413
------------ ------------- ------------ -----------
Total increase
(decrease).......... 114,302,645 36,081,970 46,206,162 22,904,956
NET ASSETS:
Beginning of period......... 188,119,409 152,037,439 98,330,295 75,425,339
------------ ------------- ------------ -----------
END OF PERIOD............... $302,422,054 $188,119,409 $144,536,457 $98,330,295
------------ ------------- ------------ -----------
------------ ------------- ------------ -----------
Undistributed net investment
income...................... $ 2,259,627 $ (210,717)* $ 1,663,988 $ 1,563,457
------------ ------------- ------------ -----------
------------ ------------- ------------ -----------
SHARES ISSUED AND REPURCHASED:
Sold........................ 3,131,701 1,106,630 6,522,537 3,543,683
Issued in reinvestment of
dividends and
distributions............. 677,922 454,397 173,462 79,076
Repurchased................. (514,185) (1,268,442) (2,326,246) (1,630,781)
------------ ------------- ------------ -----------
Net increase (decrease)..... 3,295,438 292,585 4,369,753 1,991,978
------------ ------------- ------------ -----------
------------ ------------- ------------ -----------
<CAPTION>
EQUITY STRATEGIST
-------------------------- --------------------------
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
Operations:
Net investment income..... $ 2,556,972 $ 2,708,609 $ 13,143,825 $ 19,633,402
Net realized gain
(loss).................. 42,116,968 66,181,855 9,836,251 4,287,366
Net change in unrealized
appreciation/depreciation... 5,775,201 28,684,738 32,734,426 10,997,160
------------ ------------ ------------ ------------
Net increase.......... 50,449,141 97,575,202 55,714,502 34,917,928
------------ ------------ ------------ ------------
Dividends and distributions
from:
Net investment income..... (2,577,952) (3,058,144) (13,174,571) (21,267,198)
Net realized gain......... (54,814,557) -- (3,569,367) (13,902,986)
In excess of net
investment income....... -- -- -- --
------------ ------------ ------------ ------------
Total................. (57,392,509) (3,058,144) (16,743,938) (35,170,184)
------------ ------------ ------------ ------------
Transactions in shares of
beneficial interest:
Net proceeds from sales... 132,116,853 60,875,983 25,629,890 24,116,300
Reinvestment of dividends
and distributions....... 57,392,509 3,058,144 16,743,938 35,170,184
Cost of shares
repurchased............. (20,436,940) (23,961,072) (46,155,709) (63,215,404)
------------ ------------ ------------ ------------
Net increase
(decrease).......... 169,072,422 39,973,055 (3,781,881) (3,928,920)
------------ ------------ ------------ ------------
Total increase
(decrease).......... 162,129,054 134,490,113 35,188,683 (4,181,176)
NET ASSETS:
Beginning of period......... 359,779,370 225,289,257 388,579,169 392,760,345
------------ ------------ ------------ ------------
END OF PERIOD............... $521,908,424 $359,779,370 $423,767,852 $388,579,169
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Undistributed net investment
income...................... $ 763 $ 21,743 $ 16,567 $ 47,313
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
SHARES ISSUED AND REPURCHASED:
Sold........................ 4,838,072 2,501,214 1,954,971 1,957,299
Issued in reinvestment of
dividends and
distributions............. 2,452,920 136,228 1,285,378 2,891,755
Repurchased................. (770,532) (1,080,135) (3,573,439) (5,160,690)
------------ ------------ ------------ ------------
Net increase (decrease)..... 6,520,460 1,557,307 (333,090) (311,636)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
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 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 eleven Portfolios ("Portfolios") which commenced operations as
follows:
<TABLE>
<CAPTION>
COMMENCEMENT OF
PORTFOLIO OPERATIONS
- ------------------------------- ---------------------
<S> <C>
Money Market................... March 9, 1984
Quality Income Plus............ March 1, 1987
High Yield..................... March 9, 1984
Utilities...................... March 1, 1990
Dividend Growth................ March 1, 1990
Capital Growth................. March 1, 1991
<CAPTION>
COMMENCEMENT OF
PORTFOLIO OPERATIONS
- ------------------------------- ---------------------
<S> <C>
Global Dividend Growth......... February 23, 1994
European Growth................ March 1, 1991
Pacific Growth................. February 23, 1994
Equity......................... March 9, 1984
Strategist..................... March 1, 1987
</TABLE>
Subsequent to the date of this report, two additional portfolios, Capital
Appreciation and Income Builder, commenced operations.
The investment objectives of each Portfolio are as follows:
<TABLE>
<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
Plus of current 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 Growth Seeks to provide reasonable current income and
long-term 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.
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PORTFOLIO INVESTMENT OBJECTIVE
<S> <C>
Capital Growth Seeks long-term capital growth by investing primarily
in common stocks.
Global Dividend Seeks to provide reasonable current income and
Growth long-term growth of income and capital by investing
primarily in common stocks of companies, issued by
issuers worldwide, with a record of paying dividends
and the potential for increasing dividends.
European Growth Seeks to maximize the capital appreciation of its
investments by 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.
</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 the European Growth and the Pacific Growth Portfolios, by Morgan
Grenfell Investment Services Limited (the "Sub-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
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
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 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.
The Money Market Portfolio 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: 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.
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
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" 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 AGREEMENTS--Pursuant to an Investment
Management Agreement, the Fund pays the Investment Manager a management fee,
accrued daily and payable monthly, by applying the following annual rates to
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 - 0.75%; European Growth and Pacific Growth - 1.0%; Dividend Growth -
0.625% to the portion of daily net assets not exceeding $500 million and 0.50%
to the portion of daily net assets exceeding $500 million; and Equity - 0.50%.
Effective May 1, 1996, both Dividend Growth and Equity reduced the fee to 0.475%
to the portion of daily net assets exceeding $1 billion.
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
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 the Pacific Growth
Portfolios with investment advice and portfolio management relating to the
Portfolios' investments in securities, subject to the overall supervision of 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.
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 year ended December 31, 1996
were as follows:
<TABLE>
<CAPTION>
U.S. GOVERNMENT SECURITIES OTHER
---------------------------------- --------------------------------------
PURCHASES SALES/MATURITIES PURCHASES SALES/MATURITIES
---------------- ---------------- ------------------ ------------------
<S> <C> <C> <C> <C>
Money Market.......................... $ 34,727,080 $ 34,146,513 $ 1,364,792,850 $ 1,289,557,502
Quality Income Plus................... 540,237,465 537,800,364 327,453,423 342,350,395
High Yield............................ -- -- 193,637,673 107,500,195
Utilities............................. -- -- 39,515,210 86,337,177
Dividend Growth....................... 9,726,945 -- 450,355,560 245,956,315
Capital Growth........................ 276,950 482,131 76,773,736 70,773,986
Global Dividend Growth................ -- -- 188,880,870 103,806,207
European Growth....................... -- -- 147,909,438 95,507,480
Pacific Growth........................ -- -- 107,612,810 65,775,402
Equity................................ 25,736,705 68,057,156 1,259,806,434 1,111,280,254
Strategist............................ 151,982,528 125,116,517 414,261,509 460,798,455
</TABLE>
Included in the aforementioned purchases and sales of portfolio securities
of the Equity Portfolio are purchases and sales of equity securities of The
Allstate Corporation, the parent company of Northbrook Life Insurance Company
and Allstate Life Insurance Company of New York, affiliates of the Fund, in the
amount of $5,701,295 and $5,059,117, respectively, as well as a realized gain of
$491,975.
Included in the payable for investments purchased at December 31, 1996 for
the Capital Growth and Dividend Growth Portfolios are $476,125 and $1,234,400,
respectively, for unsettled trades with DWR.
Included in the receivable for investments sold at December 31, 1996 for the
Global Dividend Growth and Equity Portfolios are $114,705 and $1,628,455,
respectively, for unsettled trades with DWR.
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
For the year ended December 31, 1996, the following Portfolios incurred
commissions with Dean Witter Reynolds Inc. ("DWR"), an affiliate of the
Investment Manager, for portfolio transactions executed on behalf of the
Portfolio:
<TABLE>
<CAPTION>
GLOBAL
DIVIDEND CAPITAL DIVIDEND
UTILITIES GROWTH GROWTH GROWTH EQUITY STRATEGIST
- --------- ----------- --------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
$ 49,500 $ 181,121 $ 38,010 $ 35,401 $ 220,150 $ 34,525
- --------- ----------- --------- --------- ----------- ---------
- --------- ----------- --------- --------- ----------- ---------
</TABLE>
For the year ended December 31, 1996, the Pacific Growth Portfolio incurred
brokerage commissions of $16,933 with affiliates of the Sub-Adviser for
portfolio transactions executed.
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 year ended December 31,
1996 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 DIVIDEND CAPITAL
MARKET PLUS YIELD UTILITIES GROWTH GROWTH
--------- --------- --------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Aggregate Pension Cost............................. $ 91 $ 160 $ 59 $ 155 $ 332 $ 25
--------- --------- --------- --------- ----------- -----
--------- --------- --------- --------- ----------- -----
Accrued Pension Liability.......................... $ 11,251 $ 9,984 $ 3,383 $ 4,848 $ 7,933 $ 320
--------- --------- --------- --------- ----------- -----
--------- --------- --------- --------- ----------- -----
</TABLE>
<TABLE>
<CAPTION>
GLOBAL
DIVIDEND EUROPEAN PACIFIC
GROWTH GROWTH GROWTH EQUITY STRATEGIST
----------- ----------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
Aggregate Pension Cost...................................... $ 609 $ 71 $ 328 $ 140 $ 131
----- ----- --------- --------- -----------
----- ----- --------- --------- -----------
Accrued Pension Liability................................... $ 485 $ 738 $ 1,094 $ 5,083 $ 8,645
----- ----- --------- --------- -----------
----- ----- --------- --------- -----------
</TABLE>
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 2001 2002 2003 2004 TOTAL
- ------------------------------ --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Quality Income Plus........... -- -- -- -- -- $ 24,848 -- $ 2,604 $ 27,452
High Yield.................... $ 10,694 $ 34,291 $ 7,336 $ 3,057 $ 4,736 3,256 $ 2,984 5,521 71,875
Pacific Growth................ -- -- -- -- -- -- 1,398 5,350 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>
HIGH YIELD GLOBAL DIVIDEND GROWTH EUROPEAN GROWTH PACIFIC GROWTH
- ----------- ---------------------- ---------------- --------------
<S> <C> <C> <C>
$ 218,000 $ 9,000 $ 289,000 $ 488,000
- ----------- ------- ---------------- --------------
- ----------- ------- ---------------- --------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
At December 31, 1996, the primary reason(s) for significant
temporary/permanent book/tax differences were as follows:
<TABLE>
<CAPTION>
TEMPORARY DIFFERENCES PERMANENT DIFFERENCES
----------------------------- ------------------------------------------
POST-OCTOBER LOSS DEFERRALS FOREIGN CURRENCY EXPIRED CAPITAL
LOSSES FROM WASH SALES GAINS/LOSSES LOSS CARRYFORWARD
------------ --------------- --------------------- -------------------
<S> <C> <C> <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 ("PFICs") and permanent
differences attributable to tax adjustments on PFICs sold.
To reflect reclassifications arising from permanent book/tax differences for
the year ended December 31, 1996, the following accounts were (charged)
credited:
<TABLE>
<CAPTION>
ACCUMULATED UNDISTRIBUTED
NET REALIZED
ACCUMULATED UNDISTRIBUTED GAIN/ACCUMULATED NET
NET INVESTMENT INCOME REALIZED LOSS PAID-IN-CAPITAL
------------------------- ------------------------- --------------
<S> <C> <C> <C>
High Yield.................................. -- $ 7,297,039 $ (7,297,039)
Global Dividend Growth...................... $ 347,706 (347,706) --
European Growth............................. 737,223 (737,223) --
Pacific Growth.............................. 339,294 (339,294) --
</TABLE>
5. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS--The Global
Dividend Growth, European Growth and Pacific Growth Portfolios 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 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.
Forward contracts and over-the-counter purchased 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 purchased put options on foreign currencies from the potential
inability of the counterparties to meet the terms of their contracts.
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 (CONTINUED)
- --------------------------------------------------------------------------------
At December 31, 1996, the Global Dividend Growth, European Growth and
Pacific Growth Portfolios had outstanding forward contracts used to facilitate
settlement of foreign currency denominated portfolio transactions and to manage
foreign currency exposure.
At December 31, 1996 the Global Dividend Growth Portfolio's investments in
securities of issuers in Japan represented 25.5% 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 this region.
At December 31, 1996, the Global Dividend Growth, European Growth and
Pacific Growth Portfolios' cash balance consisted principally of interest
bearing deposits with Chase Manhattan Bank N.A., the Fund's custodian.
<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
BEGINNING INVESTMENT AND UNREALIZED INVESTMENT DIVIDENDS TO DISTRIBUTIONS TO
YEAR ENDED DEC. 31 OF PERIOD INCOME GAIN (LOSS) OPERATIONS SHAREHOLDERS SHAREHOLDERS
---------- --------- ---------- -------------- ---------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
MONEY MARKET
1987 $ 1.00 $0.061 $-- $ 0.061 $(0.061) $--
1988 1.00 0.070 -- 0.070 (0.070) --
1989 1.00 0.086 -- 0.086 (0.086) --
1990 1.00 0.076 -- 0.076 (0.076) --
1991 1.00 0.056 -- 0.056 (0.056) --
1992 1.00 0.034 -- 0.034 (0.034) --
1993 1.00 0.027 -- 0.027 (0.027) --
1994 1.00 0.037 -- 0.037 (0.037) --
1995 1.00 0.055 -- 0.055 (0.055) --
1996 1.00 0.050 -- 0.050 (0.050) --
QUALITY INCOME PLUS
1987(a) 10.00 0.64 (0.39) 0.25 (0.64) --
1988 9.61 0.85 (0.16) 0.69 (0.85) --
1989 9.45 0.88 0.28 1.16 (0.88) --
1990 9.73 0.86 (0.24) 0.62 (0.86) --
1991 9.49 0.85 0.85 1.70 (0.85) --
1992 10.34 0.77 0.05 0.82 (0.77) --
1993 10.39 0.69 0.64 1.33 (0.69) --
1994 11.03 0.69 (1.40) (0.71) (0.69) (0.18)
1995 9.45 0.72 1.50 2.22 (0.71) --
1996 10.96 0.71 (0.58) 0.13 (0.72) --
HIGH YIELD
1987 12.06 0.91 (1.15) (0.24) (0.91) (0.94)
1988 9.97 1.14 (0.05) 1.09 (1.14) --
1989 9.92 1.30 (2.40) (1.10) (1.30) --
1990 7.52 1.13 (2.91) (1.78) (1.13) (0.06)*
1991 4.55 0.70 1.81 2.51 (0.70) (0.11)*
1992 6.25 0.96 0.18 1.14 (0.96) --
1993 6.43 0.81 0.68 1.49 (0.81) --
1994 7.11 0.79 (0.95) (0.16) (0.79) --
1995 6.16 0.80 0.08 0.88 (0.78) --
1996 6.26 0.77 (0.06) 0.71 (0.79) --
UTILITIES
1990 (b) 10.00 0.47 (0.04) 0.43 (0.41) --
1991 10.02 0.54 1.45 1.99 (0.54) --
1992 11.47 0.51 0.88 1.39 (0.52) --
1993 12.34 0.49 1.43 1.92 (0.50) (0.02)
1994 13.74 0.53 (1.75) (1.22) (0.52) (0.08)
1995 11.92 0.53 2.81 3.34 (0.58) --
1996 14.68 0.55 0.70 1.25 (0.55) (0.04)
DIVIDEND GROWTH
1990(b) 10.00 0.33 (1.10) (0.77) (0.30) --
1991 8.93 0.36 2.08 2.44 (0.37) --
1992 11.00 0.37 0.51 0.88 (0.37) --
1993 11.51 0.36 1.27 1.63 (0.36) --
1994 12.78 0.38 (0.80) (0.42) (0.37) --
1995 11.99 0.38 3.89 4.27 (0.41) (0.26)
1996 15.59 0.41 3.22 3.63 (0.41) (0.41)
</TABLE>
- ------------
Commencement of operations:
(a) March 1, 1987.
(b) March 1, 1990.
+ Calculated based on the net asset value as of the last business day of
the period.
* Distribution from capital.
(1) Not annualized.
(2) Annualized.
(3) If the Investment Manager had not assumed all expenses and waived the
management fee for the period March 1, 1987 through August 26, 1987, the
ratio of expenses to average net assets would have been 0.74%.
(4) If the Investment Manager had not assumed all expenses and waived the
management fee for the period March 1, 1990 through August 31, 1990, the
ratio of expenses to average net assets would have been 0.75%.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIOS TO
AVERAGE NET ASSETS
---------------------
TOTAL DIVIDENDS NET ASSET TOTAL NET ASSETS AT NET PORTFOLIO AVERAGE
AND VALUE END INVESTMENT END OF PERIOD INVESTMENT TURNOVER COMMISSION
DISTRIBUTIONS OF PERIOD RETURN+ (000'S) EXPENSES INCOME RATE RATE PAID
- ---------------- ----------- -------------- -------------- ---------- -------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ (0.061) $1.00 6.26% $ 69,467 0.65% 6.26% N/A N/A
(0.070) 1.00 7.23 77,304 0.62 7.04 N/A N/A
(0.086) 1.00 9.05 76,701 0.58 8.67 N/A N/A
(0.076) 1.00 7.89 118,058 0.57 7.60 N/A N/A
(0.056) 1.00 5.75 104,277 0.57 5.62 N/A N/A
(0.034) 1.00 3.43 96,151 0.59 3.38 N/A N/A
(0.027) 1.00 2.75 129,925 0.57 2.71 N/A N/A
(0.037) 1.00 3.81 268,624 0.55 3.93 N/A N/A
(0.055) 1.00 5.66 249,787 0.53 5.52 N/A N/A
(0.050) 1.00 5.11 340,238 0.52 4.97 N/A N/A
(0.64) 9.61 2.62(1) 24,094 0.35(2)(3) 8.33(2) 265%(1) N/A
(0.85) 9.45 7.32 28,037 0.73 8.87 277 N/A
(0.88) 9.73 12.78 48,784 0.70 9.09 242 N/A
(0.86) 9.49 6.84 57,407 0.66 9.09 166 N/A
(0.85) 10.34 18.75 81,918 0.60 8.39 105 N/A
(0.77) 10.39 8.26 163,368 0.58 7.41 148 N/A
(0.69) 11.03 12.99 487,647 0.56 6.17 219 N/A
(0.87) 9.45 (6.63) 414,905 0.54 6.88 254 N/A
(0.71) 10.96 24.30 520,579 0.54 7.07 162 N/A
(0.72) 10.37 1.56 474,660 0.53 6.84 182 N/A
(1.85) 9.97 (3.02) 191,631 0.53 7.66 287 N/A
(1.14) 9.92 10.83 192,290 0.56 11.06 140 N/A
(1.30) 7.52 (12.44) 96,359 0.55 13.94 54 N/A
(1.19) 4.55 (25.54) 27,078 0.69 17.98 42 N/A
(0.81) 6.25 58.14 34,603 1.01 12.29 300 N/A
(0.96) 6.43 18.35 40,042 0.74 14.05 204 N/A
(0.81) 7.11 24.08 90,200 0.60 11.80 177 N/A
(0.79) 6.16 (2.47) 111,934 0.59 11.71 105 N/A
(0.78) 6.26 14.93 154,310 0.54 12.67 58 N/A
(0.79) 6.18 11.98 259,549 0.51 12.59 57 N/A
(0.41) 10.02 4.52(1) 37,597 0.40(2)(4) 6.38(2) 46(1) --
(0.54) 11.47 20.56 68,449 0.80 5.23 25 --
(0.52) 12.34 12.64 153,748 0.73 4.63 26 --
(0.52) 13.74 15.69 490,934 0.71 3.75 11 --
(0.60) 11.92 (9.02) 382,412 0.68 4.21 15 --
(0.58) 14.68 28.65 479,070 0.68 4.00 13 --
(0.59) 15.34 8.68 440,662 0.67 3.61 9 $ 0.0543
(0.30) 8.93 (7.81)(1) 57,282 0.54(2)(4) 4.50(2) 19(1) --
(0.37) 11.00 27.76 98,023 0.73 3.61 6 --
(0.37) 11.51 8.16 192,551 0.69 3.42 4 --
(0.36) 12.78 14.34 483,145 0.68 3.01 6 --
(0.37) 11.99 (3.27) 572,952 0.64 3.13 20 --
(0.67) 15.59 36.38 865,417 0.61 2.75 24 --
(0.82) 18.40 23.96 1,288,404 0.57 2.46 23 0.0553
</TABLE>
<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
BEGINNING INVESTMENT AND UNREALIZED INVESTMENT DIVIDENDS TO DISTRIBUTIONS TO
YEAR ENDED DEC. 31 OF PERIOD INCOME GAIN (LOSS) OPERATIONS SHAREHOLDERS SHAREHOLDERS
---------- --------- ---------- -------------- ---------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
CAPITAL GROWTH
1991(b) $10.00 $ 0.15 $ 2.67 $ 2.82 $ (0.13) $ --
1992 12.69 0.07 0.13 0.20 (0.08) (0.02)
1993 12.79 0.08 (0.98) (0.90) (0.08) --
1994 11.81 0.10 (0.26) (0.16) (0.10) (0.03)
1995 11.52 0.10 3.68 3.78 (0.08) --
1996 15.22 0.08 1.65 1.73 (0.03) (0.27)
GLOBAL DIVIDEND GROWTH
1994(c) 10.00 0.23 (0.20) 0.03 (0.21) --
1995 9.82 0.24 1.90 2.14 (0.26) (0.01)
1996 11.69 0.24 1.75 1.99 (0.24) (0.31)
EUROPEAN GROWTH
1991(b) 10.00 0.25 (0.13) 0.12 (0.23) --
1992 9.89 0.08 0.32 0.40 (0.10) (0.01)
1993 10.18 0.12 3.98 4.10 (0.12) (0.13)
1994 14.03 0.17 0.96 1.13 (0.16) (0.44)
1995 14.56 0.20 3.50 3.70 (0.19)** (0.54)
1996 17.53 0.17 4.91 5.08 (0.04) (1.01)
PACIFIC GROWTH
1994(c) 10.00 0.07 (0.74) (0.67) -- (0.07)
1995 9.26 0.12 0.41 0.53 (0.09) --
1996 9.70 0.05 0.32 0.37 (0.11) --
EQUITY
1987 14.41 0.30 (0.94) (0.64) (0.33) (0.95)
1988 12.49 0.39 0.83 1.22 (0.35) --
1989 13.36 0.71 1.77 2.48 (0.70) --
1990 15.14 0.48 (1.03) (0.55) (0.49) --
1991 14.10 0.20 8.05 8.25 (0.21) --
1992 22.14 0.23 (0.47) (0.24) (0.24) (1.86)
1993 19.80 0.15 3.63 3.78 (0.15) (1.28)
1994 22.15 0.23 (1.31) (1.08) (0.22) (1.60)
1995 19.25 0.22 7.92 8.14 (0.25) --
1996 27.14 0.16 2.70 2.86 (0.16) (3.45)
STRATEGIST
1987(a) 10.00 0.48 (0.35) 0.13 (0.48) --
1988 9.65 0.70 0.51 1.21 (0.64) --
1989 10.22 0.84 0.20 1.04 (0.79) (0.06)
1990 10.41 0.61 (0.46) 0.15 (0.67) (0.08)
1991 9.81 0.47 2.24 2.71 (0.50) --
1992 12.02 0.44 0.41 0.85 (0.45) (0.13)
1993 12.29 0.38 0.86 1.24 (0.38) (0.47)
1994 12.68 0.48 0.01 0.49 (0.46) (0.26)
1995 12.45 0.62 0.49 1.11 (0.67) (0.44)
1996 12.45 0.43 1.39 1.82 (0.43) (0.12)
</TABLE>
- ------------
Commencement of operations:
(a) March 1, 1987.
(b) March 1, 1991.
(c) February 23, 1994.
+ 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 the
management fee for the period March 1, 1987 through August 26, 1987, the
ratio of expenses to average net assets would have been 0.74%.
(4) If the Investment Manager had not assumed all expenses and waived the
management fee for the period March 1, 1991 through December 31, 1991,
the ratio of expenses to average net assets would have been 1.60% for
Capital Growth and 4.12% for European Growth.
(5) If the Investment Manager had not assumed all expenses and waived the
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.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIOS TO
AVERAGE NET ASSETS
---------------------------
TOTAL NET ASSET TOTAL NET ASSETS AT NET PORTFOLIO AVERAGE
DIVIDENDS AND VALUE END INVESTMENT END OF PERIOD INVESTMENT TURNOVER COMMISSION
DISTRIBUTIONS OF PERIOD RETURN+ (000'S) EXPENSES INCOME RATE RATE PAID
- -------------- ----------- -------------- -------------- -------------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ (0.13) $12.69 28.41%(1) $ 18,400 -- %(2)(4) 1.82%(2) 32%(1) $ --
(0.10) 12.79 1.64 45,105 0.86 0.62 22 --
(0.08) 11.81 (6.99) 50,309 0.74 0.78 36 --
(0.13) 11.52 (1.28) 45,715 0.77 0.90 37 --
(0.08) 15.22 32.92 66,995 0.74 0.70 34 --
(0.30) 16.65 11.55 86,862 0.73 0.52 98 0.0570
(0.21) 9.82 0.27(1) 138,486 0.87(2)(5) 2.62(2) 20(1) --
(0.27) 11.69 22.14 205,739 0.88 2.23 55 --
(0.55) 13.13 17.49 334,821 0.85 1.94 39 0.0360
(0.23) 9.89 1.34(1) 3,653 -- (2)(4) 3.18(2) 77(1) --
(0.11) 10.18 3.99 10,686 1.73 0.74 97 --
(0.25) 14.03 40.88 79,052 1.28 0.97 77 --
(0.60) 14.56 8.36 152,021 1.16 1.49 58 --
(0.73) 17.53 25.89 188,119 1.17 1.25 69 --
(1.05) 21.56 29.99 302,422 1.11 0.97 43 0.0453
(0.07) 9.26 (6.73)(1) 75,425 1.00(2)(5) 0.56(2) 22(1) --
(0.09) 9.70 5.74 98,330 1.44 1.23 53 --
(0.11) 9.96 3.89 144,536 1.37 1.01 50 0.0108
(1.28) 12.49 (6.23) 52,502 0.59 2.02 63 --
(0.35) 13.36 9.84 39,857 0.65 2.77 162 --
(0.70) 15.14 18.83 58,316 0.60 4.85 81 --
(0.49) 14.10 (3.62) 41,234 0.62 3.38 130 --
(0.21) 22.14 59.05 63,524 0.64 1.09 214 --
(2.10) 19.80 0.05 77,527 0.62 1.22 286 --
(1.43) 22.15 19.72 182,828 0.58 0.69 265 --
(1.82) 19.25 (4.91) 225,289 0.57 1.19 299 --
(0.25) 27.14 42.53 359,779 0.54 0.97 269 --
(3.61) 26.39 12.36 521,908 0.54 0.58 279 0.0587
(0.48) 9.65 1.23(1) 27,016 0.38(2)(3) 6.73(2) 172(1) --
(0.64) 10.22 12.79 61,947 0.66 7.29 310 --
(0.85) 10.41 10.67 88,712 0.57 8.38 282 --
(0.75) 9.81 1.56 68,447 0.58 6.10 163 --
(0.50) 12.02 28.26 87,779 0.60 4.34 86 --
(0.58) 12.29 7.24 136,741 0.58 3.74 87 --
(0.85) 12.68 10.38 287,502 0.57 3.11 57 --
(0.72) 12.45 3.94 392,760 0.54 3.93 125 --
(1.11) 12.45 9.48 388,579 0.52 5.03 329 --
(0.55) 13.72 15.02 423,768 0.52 3.30 153 0.0591
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Trustees of Dean Witter Variable Investment Series
In our opinion, the accompanying statements of assets and liabilities, including
the portfolios of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Money Market Portfolio, the
Quality Income Plus Portfolio, the High Yield Portfolio, the Utilities
Portfolio, the Dividend Growth Portfolio, the Capital Growth Portfolio, the
Global Dividend Growth Portfolio, the European Growth Portfolio, the Pacific
Growth Portfolio, the Equity Portfolio, and the Strategist Portfolio
(constituting Dean Witter Variable Investment Series, hereafter referred to as
the "Fund") at December 31, 1996, the results of each of their operations for
the year then ended, the changes in each of their net assets and the financial
highlights for each of the periods indicated, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 1996 by
correspondence with the custodians and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
February 17, 1997
1996 FEDERAL INCOME TAX NOTICE (UNAUDITED)
During the year ended December 31, 1996, the following Portfolios
paid to shareholders the following long-term capital gains per
share:
<TABLE>
<CAPTION>
GLOBAL
DIVIDEND CAPITAL DIVIDEND EUROPEAN
UTILITIES GROWTH GROWTH GROWTH GROWTH EQUITY STRATEGIST
- ----------- ----------- ----------- ----------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
$ 0.04 $ 0.41 $ 0.27 $ 0.14 $ 1.01 $ 0.58 $ 0.01
----- ----- ----- ----- ----- --------- -----
----- ----- ----- ----- ----- --------- -----
</TABLE>
<PAGE>
Trustees
------------------------------------------------------
<TABLE>
<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
</TABLE>
Officers
------------------------------------------------------
Charles A. Fiumefreddo
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Barry Fink
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
Thomas F. Caloia
TREASURER
<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>
Investment Manager
------------------------------------------------------
Dean Witter InterCapital Inc.
Two World Trade Center
New York, New York 10048
Sub-Adviser
(European Growth and Pacific Growth Portfolios)
------------------------------------------------------
Morgan Grenfell Investment Services Limited
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
ANNUAL REPORT
DECEMBER 31, 1996
[LOGO] DEAN WITTER
Allstate Life Insurance BULK RATE MAIL
Company of New York U.S. POSTAGE
Post Office Box 2898 PAID
Huntington Station, NY 11746 ROCKVILLE CENTER
NY 11570
PERMIT NO. 150
40915A
<PAGE>
DEAN WITTER VARIABLE CAPITAL GROWTH PORTFOLIO
GROWTH OF $10,000
DATE TOTAL S&P 500
March 1, 1991 $10,000 $10,000
December 31, 1991 $12,841 $11,563
December 31, 1992 $13,051 $12,443
December 31, 1993 $12,139 $13,696
December 31, 1994 $11,984 $13,876
December 31, 1995 $15,929 $19,089
December 31, 1996 $17,768(3) $23,466
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5 YEAR LIFE OF PORTFOLIO
11.55%(1) 6.71%(1) 10.35%(1)
_____ Portfolio _____ S&P 500 (2)
Past performance is not predictive of future returns.
- ----------------------------------------
(1) Figure assumes reinvestment of all distributions for the
underlying Portfolio based on net asset value (NAV). It does not
reflect the deduction of insurance expenses, an annual
contract maintenance fee, or surrender charges.
(2) The Standard & Poor's 500 Composite Stock Price Index (S&P 500) is a
broad-based index, the performance of which is based on the average
performance of 500 widely held common stocks. The performance of the
index does not include any expenses, fees or charges. The Index is
unmanaged and should not be considered an investment.
(3) Closing value on December 31, 1996 for the underlying Portfolio. This
figure does not reflect the deduction of any account fees or sales
charges.
<PAGE>
DEAN WITTER VARIABLE DIVIDEND GROWTH PORTFOLIO
GROWTH OF $10,000
DATE TOTAL S&P 500
March 1, 1990 $10,000 $10,000
December 31, 1990 $ 9,219 $10,235
December 31, 1991 $11,778 $13,347
December 31, 1992 $12,740 $14,363
December 31, 1993 $14,567 $15,808
December 31, 1994 $14,090 $16,017
December 31, 1995 $19,216 $22,030
December 31, 1996 $23,821(3) $27,086
AVERAGE ANNUAL TOTAL RETURN (FUND)
1 YEAR 5 YEARS LIFE OF PORTFOLIO
23.96%(1) 15.13%(1) 13.54%(1)
_____ Portfolio _____ S&P 500 (2)
Past performance is not predictive of future returns.
- ----------------------------------------
(1) Figure assumes reinvestment of all distributions for the
underlying Portfolio based on net asset value (NAV). It does not
reflect the deduction of insurance expenses, an annual
contract maintenance fee, or surrender charges.
(2) The Standard & Poor's 500 Composite Stock Price Index (S&P
500) is a broad-based index, the performance of which is
based on the average performance of 500 widely held
common stocks. The performance of the index does not
include any expenses, fees or charges. The Index is
unmanaged and should not be considered an investment.
(3) Closing value on December 31, 1996 for the underlying Portfolio.
This figure does not reflect the deduction of any account fees
or sales charges.
<PAGE>
DEAN WITTER VARIABLE EQUITY PORTFOLIO
GROWTH OF $10,000
DATE TOTAL S&P 500
December 31, 1986 $10,000 $10,000
December 31, 1987 $ 9,377 $10,525
December 31, 1988 $10,300 $12,267
December 31, 1989 $12,239 $16,148
December 31, 1990 $11,797 $15,649
December 31, 1991 $18,762 $20,408
December 31, 1992 $18,772 $21,961
December 31, 1993 $22,474 $24,170
December 31, 1994 $21,370 $24,489
December 31, 1995 $30,458 $33,683
December 31, 1996 $34,224(3) $41,412
AVERAGE ANNUAL TOTAL RETURN (FUND)
1 YEAR 5 YEARS 10 YEARS
12.36%(1) 12.77%(1) 13.09%(1)
_____ Portfolio _____ S&P 500(2)
Past performance is not predictive of future returns.
- ----------------------------------------
(1) Figure assumes reinvestment of all distributions for the
underlying Portfolio based on net asset value (NAV). It does not
reflect the deduction of insurance expenses, an annual
contract maintenance fee, or surrender charges.
(2) The Standard & Poor's 500 Composite Stock Price Index (S&P 500) is a
broad-based index, the performance of which is based on the average
performance of 500 widely held common stocks. The performance of the
Index does not include any expenses, fees or charges. The Index is
unmanaged and should not be considered an investment.
(3) Closing value on December 31, 1996 for the underlying Portfolio. This
figure does not reflect the deduction of any account fees or sales
charges.
<PAGE>
DEAN WITTER VARIABLE EUROPEAN GROWTH PORTFOLIO
GROWTH OF $10,000
DATE TOTAL MSCI WORLD INDEX
March 1, 1991 $10,000 $10,000
December 31, 1991 $10,134 $10,399
December 31, 1992 $10,539 $ 9,656
December 31, 1993 $14,847 $11,625
December 31, 1994 $16,089 $12,016
December 31, 1995 $20,254 $14,263
December 31, 1996 $26,329(3) $15,935
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5 YEAR LIFE OF PORTFOLIO
29.99%(1) 21.04%(1) 18.04%(1)
_____ Portfolio _____ MSCI WORLD INDEX(2)
Past performance is not predictive of future returns.
- ----------------------------------------
(1) Figure assumes reinvestment of all distributions for the
underlying Portfolio based on net asset value. It does not
reflect the deduction of any insurance expenses, and annual
contract maintenance fee, or surrender charges.
(2) The Morgan Stanley Capital International World Index (MSCI) measures
performance for a diverse range of global stock markets including the
U.S., Canada, Europe, Australia, New Zealand and the Far East. The
Index does not include any expenses, fees or charges or reinvestment of
dividends. The Index is unmanaged and should not be considered an
investment.
(3) Closing value on December 31, 1996 for the underlying Portfolio. This
figure does not reflect the deduction of any account fees or sales
charges.
<PAGE>
DEAN WITTER VARIABLE GLOBAL DIVIDEND GROWTH PORTFOLIO
GROWTH OF $10,000
DATE TOTAL MSCI WORLD IX
February 23, 1994 $10,000 $10,000
December 31, 1994 $10,027 $ 9,925
December 31, 1995 $12,247 $11,781
December 31, 1996 $14,388(3) $13,162
AVERAGE ANNUAL TOTAL RETURN (FUND)
ONE YEAR LIFE OF PORTFOLIO
17.49%(1) 13.60%(1)
_____ Portfolio _____ MSCI(2)
Past performance is not predictive of future returns.
- ----------------------------------------
(1) Figure assumes reinvestment of all distributions for the
underlying Portfolio based on net asset value (NAV). It does not
reflect the deduction of insurance expenses, an annual
contract maintenance fee, or surrender charges.
(2) The Morgan Stanley Capital International World Index (MSCI) measures
performance for a diverse range of global stock markets including the
U.S., Canada, Europe, Australia, New Zealand and the Far East. The
Index does not include any expenses, fees or charges or reinvestment of
dividends. The Index is unmanaged and should not be considered an
investment.
(3) Closing value on December 31, 1996 for the underlying Portfolio. This
figure does not reflect the deduction of any account fees or sales
charges.
<PAGE>
DEAN WITTER VARIABLE HIGH YIELD PORTFOLIO
GROWTH OF $10,000
DATE TOTAL LEHMAN MF IX LEHMAN BROS
December 31, 1986 $10,000 $10,000 $10,000
December 31, 1987 $ 9,698 $10,270 $10,499
December 31, 1988 $10,749 $11,251 $11,815
December 31, 1989 $ 9,411 $12,659 $11,913
December 31, 1990 $ 7,007 $13,355 $10,770
December 31, 1991 $11,081 $16,112 $15,744
December 31, 1992 $13,115 $17,617 $18,223
December 31, 1993 $16,273 $19,879 $21,343
December 31, 1994 $15,871 $19,194 $21,124
December 31, 1995 $18,241 $23,365 $25,173
December 31, 1996 $20,426(4) $24,463 $28,030
AVERAGE ANNUAL TOTAL RETURN (FUND)
1 YEAR 5 YEARS 10 YEARS
11.98%(1) 13.01%(1) 7.40%(1)
_____ Portfolio _____ Lehman MF IX (2) _____ Lehman Bros. (3)
Past performance is not predictive of future returns.
- ----------------------------------------
(1) Figure assumes reinvestment of all distributions for the underlying
Portfolio based on net asset value (NAV). It does not reflect the
deduction of insurance expenses, an annual contract maintenance fee,
or surrender charges.
(2) The Lehman Brothers Mutual Fund Corporate/High Yield Index tracks the
performance of all investment and noninvestment-grade corporate debt
securities. The Index does not include any expenses, fees or charges.
The Index is unmanaged and should not be considered an investment.
(3) The Lehman Brothers High Yield Index tracks the performance of all below
investment-grade securities which have at least $100 million in
outstanding issuance, are greater than one year to maturity and are
issued in fixed rate U.S. dollar denominations. The Index does not
include any expenses, fees or charges. The Index is unmanaged and
should not be considered an investment.
(4) Closing value on December 31, 1996 for the underlying Portfolio. This
figure does not reflect the deduction of any account fees or sales
charges.
<PAGE>
DEAN WITTER VARIABLE PACIFIC GROWTH PORTFOLIO
GROWTH OF $10,000
DATE TOTAL MSCI WORLD IX
February 23, 1994 $10,000 $10,000
December 31, 1994 $ 9,327 $ 9,925
December 31, 1995 $ 9,862 $11,781
December 31, 1996 $10,246(3) $13,162
AVERAGE ANNUAL TOTAL RETURN (FUND)
ONE YEAR LIFE OF PORTFOLIO
3.89%(1) 0.85%(1)
_____ Portfolio _____ MSCI WORLD IX(2)
Past performance is not predictive of future returns.
- ----------------------------------------
(1) Figure assumes reinvestment of all distributions for the
underlying Portfolio based on net asset value (NAV). It does not
reflect the deduction of insurance expenses, an annual
contract maintenance fee, or surrender charges.
(2) The Morgan Stanley Capital International World Index (MSCI) measures
performance for a diverse range of global stock markets including the
U.S., Canada, Europe, Australia, New Zealand and the Far East. The
Index does not include any expenses, fees or charges or reinvestment of
dividends. The Index is unmanaged and should not be considered an
investment.
(3) Closing value on December 31, 1996 for the underlying Portfolio.
This figure does not reflect the deduction of any account fees
or sales charges.
<PAGE>
DEAN WITTER VARIABLE QUALITY INCOME PLUS PORTFOLIO
GROWTH OF $10,000
DATE TOTAL LEHMAN
March 1, 1987 $10,000 $10,000
December 31, 1987 $10,262 $10,109
December 31, 1988 $11,014 $10,907
December 31, 1989 $12,421 $12,491
December 31, 1990 $13,271 $13,611
December 31, 1991 $15,759 $15,788
December 31, 1992 $17,060 $16,957
December 31, 1993 $19,276 $18,610
December 31, 1994 $17,998 $18,066
December 31, 1995 $22,371 $21,403
December 31, 1996 $22,719(3) $22,180
AVERAGE ANNUAL TOTAL RETURN (FUND)
1 YEAR 5 YEARS LIFE OF PORTFOLIO
1.56%(1) 7.59%(1) 8.70%(1)
_____ Portfolio _____ Lehman(2)
Past performance is not predictive of future returns.
- ----------------------------------------
(1) Figure assumes reinvestment of all distributions for the
underlying Portfolio based on net asset value (NAV). It does
not reflect the deduction of insurance expenses, an annual
contract maintenance fee, or surrender charges.
(2) The Lehman Brothers Aggregate Bond Index tracks the performance of
all U.S. Government agency and Treasury securities, investment-grade
corporate debt securities, agency mortgage-backed securities and
asset-backed securities. The performance of the Index does not include
any expenses, fees or charges. The Index is unmanaged and should not
be considered an investment.
(3) Closing value on December 31, 1996 for the underlying Portfolio. This
figure does not reflect the deduction of any account fees or sales
charges.
<PAGE>
DEAN WITTER VARIABLE STRATEGIST PORTFOLIO
GROWTH OF $10,000
DATE TOTAL S&P 500 LEHMAN IX
March 4, 1987 $10,000 $10,000 $10,000
December 31, 1987 $10,123 $ 8,787 $10,080
December 31, 1988 $11,418 $10,241 $10,844
December 31, 1989 $12,637 $13,481 $12,387
December 31, 1990 $12,833 $13,064 $13,413
December 31, 1991 $16,460 $17,036 $15,576
December 31, 1992 $17,651 $18,332 $16,757
December 31, 1993 $19,484 $20,178 $18,605
December 31, 1994 $20,251 $20,443 $17,952
December 31, 1995 $22,154 $28,119 $21,406
December 31, 1996 $25,482(4) $34,572 $22,027
AVERAGE ANNUAL TOTAL RETURN (FUND)
1 YEAR 5 YEARS LIFE OF PORTFOLIO
15.02%(1) 9.13%(1) 9.98%(1)
_____ Portfolio _____ S&P 500 (2) _____ Lehman(3)
Past performance is not predictive of future returns.
- ----------------------------------------
(1) Figure assumes reinvestment of all distributions for the underlying
Portfolio based on net asset value (NAV). It does not reflect the
deduction of insurance expenses, an annual contract maintenance fee,
or surrender charges.
(2) The Standard & Poor's 500 Composite Stock Price Index (S&P 500) is a
broad-based index, the performance of which is based on the average
performance of 500 widely held common stocks. The performance of the
Index does not include any expenses, fees or charges. The Index is
unmanaged and should not be considered an investment.
(3) The Lehman Brothers Government/Corporate Bond Index tracks the
performance of government and corporate obligations, including U.S.
government agency and U.S. treasury securities and corporate and yankee
bonds, with maturities of one to ten years. The performance of the
Index does not include any expenses, fees or charges. The Index is
unmanaged and should not be considered an investment.
(4) Closing value on December 31, 1996 for the underlying Portfolio. This
figure does not reflect the deduction of any account fees or sales
charges.
<PAGE>
DEAN WITTER VARIABLE UTILITIES PORTFOLIO
GROWTH OF $10,000
DATE TOTAL S&P 500
March 1, 1990 $10,000 $10,000
December 31, 1990 $10,452 $10,235
December 31, 1991 $12,601 $13,347
December 31, 1992 $14,194 $14,363
December 31, 1993 $16,422 $15,808
December 31, 1994 $14,940 $16,017
December 31, 1995 $19,220 $22,030
December 31, 1996 $20,889(3) $27,086
AVERAGE ANNUAL TOTAL RETURN (FUND)
1 YEAR 5 YEARS LIFE OF PORTFOLIO
8.68%(1) 10.64%(1) 11.38%(1)
_____ Portfolio _____ S&P 500 (2)
Past performance is not predictive of future returns.
- ----------------------------------------
(1) Figure assumes reinvestment of all distributions for the
underlying Portfolio based on net asset value (NAV). It does
not reflect the deduction of insurance expenses, an annual
contract maintenance fee, or surrender charges.
(2) The Standard & Poor's 500 Composite Stock Price Index (S&P
500) is a broad-based index, the performance of which is
based on the average performance of 500 widely held common
stocks. The performance of the Index does not include any
expenses, fees or charges. The Index is unmanaged and
should not be considered an investment.
(3) Closing value on December 31, 1996 for the underlying Portfolio.
This figure does not reflect the deduction of any account
fees or sales charges.
