<PAGE>
DEAN WITTER SELECT MUNICIPAL REINVESTMENT FUND
Two World Trade Center
New York, New York 10048
DEAR SHAREHOLDER:
- --------------------------------------------------------------------------------
We are pleased to present the annual report on the operations of Dean Witter
Select Municipal Reinvestment Fund for the year ended December 31, 1993.
MARKET CONDITIONS
Last year set records for municipals. Underwritings of new municipal bond
issues reached an all-time high. Yields fell to an all-time low of 5.41 percent
in October, as measured by THE BOND BUYER Revenue Bond Index. The Index began
the year at 6.40 percent and ended December at 5.52 percent. In addition, the
passage and signing during the summer of the Clinton administration's Revenue
Reconciliation Act made higher marginal taxes a reality. Demand for tax-exempt
bonds was stimulated by the new top federal tax rate of 39.6 percent (36% + a
3.6% surtax).
New-issue underwriting totaled $290 billion in 1993 increasing 23 percent
over the previous record of last year. Refunding issues, which are used by state
and local governments to refinance higher coupon debt, accounted for an
unprecedented two-thirds of total volume. Underwritings backed by insurance
shared 37 percent of the market.
PERFORMANCE
Dean Witter Select Municipal Reinvestment Fund's total return for the year
ended December 31, 1993 was 11.99 percent. The Fund's net asset value per share
increased $0.70 from $12.12 to $12.82. Tax-free dividends totaling $0.67 per
share were paid during the year. Realized capital gains of $0.05 per share were
also distributed. The accompanying chart illustrates the performance of a
$10,000 investment in the Fund from inception (September 22, 1983) through the
fiscal year ended December 31, 1993 versus the performance of a similar
investment in the Lehman Brothers Municipal Bond Index.
INVESTMENT STRATEGY
During the year, the Fund
continued to meet its objectives
of attractive income--free from
federal income tax--and
preservation of capital. The Fund
was invested in long-term bonds
throughout the year with only two
to five percent of assets in
short-term maturities. During the
year, refunded and other high
coupon bonds with diminished call
protection were sold. New
purchases emphasized quality with
a preference for investment-grade
issues rated "A" or better. The
Fund's average credit rating
remained "Aa" as rated by Moody's
Investors Service, Inc. or "AA"
as rated by Standard & Poor's
Corp. The Fund's average maturity
and call protection were 19 years
and 7 years, respectively.
<PAGE>
The three largest specific municipal sectors represented in the portfolio,
transportation facilities, educational facilities and water and sewer revenue
bonds, comprised 43 percent of net assets.
LOOKING AHEAD
In 1994, the amount of municipal bonds outstanding is expected to decline.
New-issue volume is estimated to drop by 30 percent to $200 billion as state and
local governments offer fewer refundings. Bond maturities and redemptions are
expected to exceed new issuance by more than $60 billion. This relative lack of
supply should strengthen municipal performance relative to U.S. Treasury
securities.
The Fund plans to sell older, higher-coupon bonds with diminished call
protection. Purchases are expected to favor high-grade general obligations and
essential-purpose revenue bonds such as electric, water & sewer and
transportation issues.
Over the past several years, the Fund's level of dividend payments has
tended lower as interest rates have declined. This trend is expected to extend
through 1994. However, the Fund should continue to provide competitive tax-free
distribution yields as it has historically.
We appreciate your support of Dean Witter Select Municipal Reinvestment Fund
and look forward to continuing to serve your investment needs.
Very truly yours,
Charles A. Fiumefreddo
CHAIRMAN OF THE BOARD
<PAGE>
DEAN WITTER SELECT MUNICIPAL REINVESTMENT FUND
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- --------- --------- -------------
MUNICIPAL BONDS (97.1%)
<C> <S> <C> <C> <C>
GENERAL OBLIGATION (4.3%)
$ 1,000 Massachusetts, Fiscal Recovery 1990 Ser A............................. 7.25% 6/ 1/96 $ 1,084,680
3,000 New York City, New York, 1990 Ser D................................... 6.00 8/ 1/07 3,029,550
-------------
- -----------
4,114,230
4,000
-------------
- -----------
EDUCATIONAL FACILITIES REVENUE (14.7%)
2,000 Price-Elliot Research Park Inc, Arizona, Arizona State University Refg
Ser 1991 (MBIA Insured)............................................. 7.00 7/ 1/21 2,324,240
1,500 Georgetown University, District of Columbia Ser 1993.................. 5.375 4/ 1/23 1,446,345
2,000 Morgan State University, Maryland, Academic & Auxiliary Fees
1990 Ser A (MBIA Insured) (Prerefunded)............................. 7.00 7/ 1/20 2,342,440
2,000 Massachusetts Health & Educational Facilities Authority, Boston
College Ser K....................................................... 5.25 6/ 1/18 1,941,000
1,500 Rutgers--The State University, New Jersey, Refg Ser R................. 6.50 5/ 1/13 1,666,110
New York State Dormitory Authority, State University
2,000 Ser 1989 B.......................................................... 0.00 5/15/03 1,201,680
550 Ser 1990 C (Prerefunded)............................................ 7.00 5/15/18 643,813
450 Ser 1990 C (Prerefunded)............................................ 7.00 5/15/18 526,757
1,000 Ohio Higher Educational Facility Commission, Oberlin College Ser
1993................................................................ 5.375 10/ 1/15 1,012,510
1,000 Loudoun County Industrial Development Authority, Virginia,
The George Washington University Refg Ser of 1992................... 6.25 5/15/22 1,060,220
-------------
- -----------
14,165,115
14,000
-------------
- -----------
ELECTRIC REVENUE (12.9%)
1,000 Northern California Power Agency, Geothermal #3-1987 Refg Ser A
(Crossover Refunded)................................................ 7.00 7/ 1/07 1,082,030
2,500 Nebraska Public Power District, Power Supply 1993 Ser................. 6.125 1/ 1/15 2,659,500
1,000 Fayetteville, North Carolina, Public Works Ser 1990 (FGIC Insured)
(Prerefunded)....................................................... 6.50 3/ 1/14 1,137,460
665 North Carolina Municipal Power Agency #1, Catawba Ser 1985 A.......... 7.00 1/ 1/20 703,770
1,000 Austin, Texas, Utilities Refg Ser 1993 A.............................. 5.625 5/15/16 998,020
2,000 Intermountain Power Agency, Utah, Refg 1985 Ser H..................... 6.00 7/ 1/21 2,023,080
2,000 Snohomish County Public Utilities District #1, Washington, Ser 1993
(FGIC Insured)...................................................... 6.00 1/ 1/18 2,093,460
1,500 Tacoma, Washington, Electric 1991 C RIBS (AMBAC Insured).............. 10.118+ 1/ 1/15 1,751,250
-------------
- -----------
12,448,570
11,665
-------------
- -----------
HOSPITAL REVENUE (11.9%)
1,000 Maine Health & Higher Educational Facilities Authority, Maine Medical
Center Ser 1986 (Prerefunded)....................................... 7.375 10/ 1/13 1,118,560
2,000 Maryland Health & Higher Educational Facilities Authority,
University of Maryland Ser 1991 A (FGIC Insured) (Prerefunded)...... 6.50 7/ 1/21 2,266,520
2,000 Saint Cloud, Minnesota, The Saint Cloud Hospital Ser 1990 B (AMBAC
Insured)............................................................ 7.00 7/ 1/20 2,339,540
1,000 Clermont County, Ohio, Mercy Health Ser 1991A MVRICS (AMBAC Insured).. 10.391+ 10/ 5/21 1,247,500
550 Hamilton County, Ohio, St Francis-St George Hospital/Franciscan
Sisters of the Poor Health System Inc Ser 1985...................... 9.375 7/ 1/15 584,996
1,000 Stark County, Ohio, Timken Mercy Medical Center Refg
Ser 1986 A (Prerefunded)............................................ 7.50 12/ 1/07 1,127,420
2,500 North Central Texas Health Facilities Development Corporation,
University Medical Center Ser 1989.................................. 8.20 4/ 1/19 2,795,175
-------------
- -----------
11,479,711
10,050
-------------
- -----------
</TABLE>
<PAGE>
DEAN WITTER SELECT MUNICIPAL REINVESTMENT FUND
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1993 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- --------- --------- -------------
<C> <S> <C> <C> <C>
INDUSTRIAL DEVELOPMENT/POLLUTION CONTROL REVENUE (12.2%)
$ 750 California Alternative Energy Source Financing Authority, SRI
International Cogeneration Ser 1985 (a)............................. 9.75% 12/ 1/05 $ 375,000
Connecticut Development Authority, Bridgeport Hydraulic Co
700 Refg Ser 1990....................................................... 7.25 6/ 1/20 791,987
2,000 Refg 1994 Ser A (MBIA Insured) (b).................................. 6.05 3/ 1/29 2,056,620
1,500 Michigan Strategic Fund, Ford Motor Co Refg Ser 1991 A................ 7.10 2/ 1/06 1,751,745
1,000 Claiborne County, Mississippi, Middle South Energy Inc Ser C.......... 9.875 12/ 1/14 1,230,160
3,000 Ohio Water Development Authority, Dayton Power & Light Co
Collateralized Refg 1992 Ser A...................................... 6.40 8/15/27 3,261,810
1,500 Matagorda County Navigational District #1, Texas, Central Power &
Light Co Collateralized Ser 1984 A.................................. 7.50 12/15/14 1,720,380
500 Russell County Industrial Development Authority, Virginia, Appalachian
Power Co Ser G...................................................... 7.70 11/ 1/07 568,795
-------------
- -----------
11,756,497
10,950
-------------
- -----------
MORTGAGE REVENUE--MULTI-FAMILY (1.6%)
1,000 Michigan Housing Development Authority, Rental 1992 Ser A............. 6.60 4/ 1/12 1,058,280
400 Pennsylvania Housing Finance Agency, Moderate Rehabilitation-- Section
8 Assisted Issue B.................................................. 9.00 8/ 1/01 427,124
-------------
- -----------
1,485,404
1,400
-------------
- -----------
MORTGAGE REVENUE--SINGLE FAMILY (1.8%)
1,565 Maricopa County Industrial Development Authority, Arizona,
Refg 1991 Ser A..................................................... 7.50 8/ 1/12 1,690,372
10 Huntington Beach, California, Financing Program 1984 A................ 11.00 7/ 1/17 10,579
10 Riverside County, California, Issue of 1984........................... 10.50 9/ 1/14 10,457
-------------
- -----------
1,711,408
1,585
-------------
- -----------
PUBLIC FACILITIES REVENUE (5.5%)
2,000 California Public Works Board, Corrections 1993 Ser D................. 5.375 6/ 1/12 1,959,840
1,000 Metropolitan Pier & Exposition Authority, Illinois, McCormick Place
Ser 1992............................................................ 6.50 6/15/27 1,070,930
1,000 Hennepin County, Minnesota, Ser 1991 COPs............................. 6.80 5/15/17 1,111,060
1,000 Puerto Rico Infrastructure Financing Authority, Special Tax
Ser 1988 A.......................................................... 7.90 7/ 1/07 1,153,040
-------------
- -----------
5,294,870
5,000
-------------
- -----------
RESOURCE RECOVERY REVENUE (2.4%)
1,000 Palm Beach County Solid Waste Authority, Florida, Refg & Impr Ser 1985
(Prerefunded)....................................................... 10.00 12/ 1/05 1,145,830
1,000 Massachusetts Industrial Finance Agency, SEMASS Ser 1991 A............ 9.00 7/ 1/15 1,140,670
-------------
- -----------
2,286,500
2,000
-------------
- -----------
RETIREMENT & LIFECARE FACILITIES REVENUE (0.0%)
352 Alachua County, Florida, Atrium Apartments Ser 1990 (c)............... 9.00 10/15/05 12,316
-------------
- -----------
TRANSPORTATION FACILITIES REVENUE (14.9%)
2,000 Los Angeles County Metropolitan Transportation Authority, California,
Sales Tax Refg Ser 1993 A (MBIA Insured)............................ 5.625 7/ 1/18 2,021,080
2,000 Los Angeles County Transportation Commission, California, Sales Tax
Ser 1991 B.......................................................... 6.50 7/ 1/13 2,180,440
3,500 Kentucky Turnpike Authority, Resource Recovery Road 1987
Ser A BIGS.......................................................... 0.00 7/ 1/06 3,538,500
1,500 Albuquerque, New Mexico, Gross Receipts Tax-Airport Supported Sub Lien
Ser 12/84........................................................... 8.25 7/ 1/14 1,646,415
2,000 Pennsylvania Turnpike Commission, Ser A of 1986....................... 6.00 12/ 1/17 2,042,680
3,000 Puerto Rico Highway & Transportation Authority, Refg Ser X............ 5.25 7/ 1/21 2,881,950
-------------
- -----------
14,311,065
14,000
-------------
- -----------
</TABLE>
<PAGE>
DEAN WITTER SELECT MUNICIPAL REINVESTMENT FUND
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1993 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- --------- --------- -------------
<C> <S> <C> <C> <C>
WATER & SEWER REVENUE (13.1%)
$ 2,000 Maryland Water Quality Financing Administration, 1990 Ser A........... 7.25% 9/ 1/11 $ 2,281,040
2,000 Boston Water & Sewer Commission, Massachusetts, 1992 Ser A............ 6.00 11/ 1/15 2,078,280
1,500 Massachusetts Water Resources Authority, 1993 Ser C................... 5.25 12/ 1/08 1,498,380
500 Minnesota Public Facilities Authority, Water Pollution Ser 1991 A..... 6.95 3/ 1/13 568,665
1,000 Columbus, Ohio, Sewerage Refg Ser 1992................................ 6.25 6/ 1/08 1,101,790
Spartanburg, South Carolina, Water Impr
1,250 Refg Ser A 1992..................................................... 6.25 6/ 1/12 1,334,263
1,700 Refg Ser A 1992..................................................... 6.25 6/ 1/17 1,801,541
2,000 Metropolitan Government of Nashville & Davidson County, Tennessee,
Refg of 1986........................................................ 5.50 1/ 1/16 1,987,380
-------------
- -----------
12,651,339
11,950
-------------
- -----------
OTHER REVENUE (1.8%)
1,500 New York Local Government Assistance Corporation, Ser 1991 D.......... 7.00 4/ 1/11 1,720,575
-------------
- -----------
88,452 TOTAL MUNICIPAL BONDS (IDENTIFIED COST $83,059,255)......................................... 93,437,600
- -----------
-------------
SHORT-TERM MUNICIPAL OBLIGATIONS (3.0%)
1,000 Newport Beach, California, Hoag Memorial Presbyterian Ser 1992 (Tender
1/3/94)............................................................. 4.45* 10/ 1/22 1,000,000
1,900 Illinois Health Facilities Authority, Franciscan Sisters Health Care
Corp Ser 1992 (Tender 1/3/94)....................................... 4.50* 1/ 1/18 1,900,000
-------------
- -----------
TOTAL SHORT-TERM MUNICIPAL OBLIGATIONS
2,900 (IDENTIFIED COST $2,900,000)..............................................................
- ----------- 2,900,000
------------
$ 91,352 TOTAL INVESTMENTS (IDENTIFIED COST $85,959,255)(D).............. 100.1 % 96,337,600
- -----------
- -----------
LIABILITIES IN EXCESS OF CASH
AND OTHER ASSETS.............................................. (0.1) (72,697)
---------- ------------
NET ASSETS...................................................... 100.0 % $ 96,264,903
---------- ------------
---------- ------------
<FN>
- ------------------
+ CURRENT COUPON RATE FOR RESIDUAL INTEREST BONDS. THIS RATE RESETS
PERIODICALLY AS THE AUCTION RATE ON THE RELATED SHORT-TERM SECURITIES
FLUCTUATES.
* VARIABLE OR FLOATING RATE SECURITIES. COUPON RATE SHOWN REFLECTS CURRENT
RATE.
(A) BOND IN DEFAULT. PARTIAL INTEREST PAID. INTEREST INCOME IS RECORDED AS
RECEIVED.
(B) SECURITY PURCHASED ON A WHEN ISSUED BASIS.
(C) NON-INCOME PRODUCING, BOND IN DEFAULT.
(D) THE AGGREGATE COST FOR FEDERAL INCOME TAX PURPOSES IS $85,959,255; THE
AGGREGATE GROSS UNREALIZED APPRECIATION IS $10,941,000 AND THE AGGREGATE
GROSS UNREALIZED DEPRECIATION IS $562,655, RESULTING IN NET UNREALIZED
APPRECIATION OF $10,378,345.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER SELECT MUNICIPAL REINVESTMENT FUND
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $85,959,255)............ $ 96,337,600
Cash....................................... 435,400
Receivables for:
Interest................................. 1,674,703
Shares of beneficial interest sold....... 11,858
Investments sold......................... 5,000
Prepaid expenses........................... 7,016
------------
TOTAL ASSETS....................... 98,471,577
------------
LIABILITIES:
Payables for:
Investments purchased.................... 1,978,480
Shares of beneficial interest
repurchased............................ 98,204
Investment management fee payable (Note
2)....................................... 40,598
Accrued expenses (Note 3).................. 89,392
------------
TOTAL LIABILITIES.................. 2,206,674
------------
NET ASSETS:
Paid in capital............................ 85,276,101
Accumulated undistributed realized gain on
investments--net......................... 273,674
Unrealized appreciation on
investments--net......................... 10,378,345
Accumulated undistributed investment
income--net.............................. 336,783
------------
NET ASSETS......................... $ 96,264,903
------------
------------
NET ASSET VALUE PER SHARE, 7,508,472 shares
outstanding (unlimited authorized shares
of $.01 par value).......................
$12.82
------------
------------
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1993
<TABLE>
<S> <C>
INVESTMENT INCOME:
INTEREST INCOME........................... $ 5,541,024
-----------
EXPENSES
Investment management fee (Note 2)...... 442,119
Transfer agent fees and expenses (Note
3).................................... 298,668
Professional fees....................... 46,235
Registration fees....................... 40,457
Shareholder reports and notices......... 35,961
Trustees' fees and expenses............. 23,074
Other................................... 14,899
-----------
TOTAL EXPENSES...................... 901,413
-----------
INVESTMENT INCOME--NET............ 4,639,611
-----------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS--NET (Note 1):
Realized gain on investments--net....... 687,390
Change in unrealized appreciation on
investments--net...................... 4,565,906
-----------
NET GAIN ON INVESTMENTS............. 5,253,296
-----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS....... $ 9,892,907
-----------
-----------
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE YEAR ENDED
DECEMBER 31, 1993 DECEMBER 31, 1992
------------------ ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Investment income--net................................................ $ 4,639,611 $ 4,113,189
Realized gain on investments--net..................................... 687,390 542,452
Change in unrealized appreciation on investments--net................. 4,565,906 1,385,344
------------------ ------------------
Net increase in net assets resulting from operations.............. 9,892,907 6,040,985
------------------ ------------------
Dividends and distributions to shareholders from:
Investment income--net................................................ (4,564,504) (4,094,845)
Realized gain on investments--net..................................... (387,730) (519,600)
------------------ ------------------
Total dividends and distributions................................. (4,952,234) (4,614,445)
------------------ ------------------
Transactions in shares of beneficial interest--net increase (Note 4).... 15,406,570 6,588,302
------------------ ------------------
Total increase.................................................... 20,347,243 8,014,842
NET ASSETS:
Beginning of period..................................................... 75,917,660 67,902,818
------------------ ------------------
END OF PERIOD (including undistributed net investment income of $336,783
and $261,676, respectively)............................................ $ 96,264,903 $ 75,917,660
------------------ ------------------
------------------ ------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
Dean Witter Select Municipal Reinvestment Fund
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Organization and Accounting Policies--Dean Witter Select Municipal
Reinvestment Fund (the "Fund") is registered under the Investment Company Act of
1940, as amended, as a diversified, open-end management investment company and
was organized as a Massachusetts business trust on June 1, 1983. The Fund
commenced operations on September 22, 1983. On February 19, 1993 the Fund
changed its name from Sears Tax-Exempt Reinvestment Fund to Dean Witter Select
Municipal Reinvestment Fund.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS--Portfolio securities are valued for the Fund by
an outside independent pricing service approved by the Fund's Trustees. The
pricing service has informed the Fund that in valuing the Fund's portfolio
securities, it uses both a computerized grid matrix of tax-exempt securities
and evaluations by its staff, in each case based on information concerning
market transactions and quotations from dealers which reflect the bid side
of the market each day. The Fund's portfolio securities are thus valued by
reference to a combination of transactions and quotations for the same or
other securities believed to be comparable in quality, coupon, maturity,
type of issue, call provisions, trading characteristics and other features
deemed to be relevant.
B. ACCOUNTING FOR INVESTMENTS--Security transactions are accounted for on
the trade date (date the order to buy or sell is executed). In computing net
investment income, the Fund amortizes premiums and original issue discounts.
Additionally, with respect to market discount on bonds purchased after April
30, 1993, a portion of any capital gain realized upon disposition is
recharacterized as taxable investment income. Realized gains and losses on
security transactions are determined on the identified cost method. Interest
income is accrued daily except where collection is not expected.
C. FEDERAL INCOME TAX STATUS--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable and non-taxable income to its
shareholders. Accordingly, no federal income tax provision is required.
D. 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 reclassifications.
Dividends and distributions which exceed net investment income and net
realized capital gains for financial reporting purposes but not for tax
purposes are reported as dividends in excess of net investment income or
distributions in excess of net realized capital gains. To the extent they
exceed net investment income and net realized capital gains for tax
purposes, they are reported as distributions of paid-in-capital.
2. Investment Management Agreement--Pursuant to an Investment Management
Agreement (the "Agreement") with Dean Witter InterCapital Inc. (the "Investment
Manager"), the Fund pays its Investment Manager a management fee, accrued daily
and payable monthly at an annual rate of .50 of 1% of the net assets of the Fund
determined as of the close of each business day. 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 office
space and 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
<PAGE>
Dean Witter Select Municipal Reinvestment Fund
Notes to Financial Statements (CONTINUED)
- --------------------------------------------------------------------------------
Investment Manager. The Investment Manager also bears the cost of telephone
services, heat, light, power and other utilities provided to the Fund.
3. Security Transactions and Transactions with Affiliates--The cost of
purchases and the proceeds from sales of portfolio securities for the year ended
December 31, 1993, excluding short-term investments, aggregated $21,930,295 and
$7,755,471, respectively.
Dean Witter Trust Company, an affiliate of the Investment Manager, is the
Fund's transfer agent. During the year ended December 31, 1993, the Fund
incurred transfer agent fees and expenses of $298,668, of which $41,799 was
payable at December 31, 1993.
4. Shares of Beneficial Interest--Transactions in shares of beneficial interest
were as follows:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE YEAR ENDED
DECEMBER 31, 1993 DECEMBER 31, 1992
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold..................................... 4,540,460 $ 57,002,124 2,943,453 $ 35,205,749
Reinvestment of dividends and
distributions........................... 382,816 4,821,330 377,822 4,514,572
---------- ------------ ---------- ------------
4,923,276 61,823,454 3,321,275 39,720,321
Repurchased.............................. (3,677,938) (46,416,884) (2,769,655) (33,132,019)
---------- ------------ ---------- ------------
Net increase............................. 1,245,338 $ 15,406,570 551,620 $ 6,588,302
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>
1993 FEDERAL TAX NOTICE (UNAUDITED)
During the year ended December 31, 1993 the Fund paid to shareholders $0.667 per
share from net investment income. All of the Fund's dividends from net
investment income were exempt interest dividends, excludable from gross income
for Federal income tax purposes. For the same period the Fund paid to
shareholders $0.053 per share from long-term capital gains.
<PAGE>
Dean Witter Select Municipal Reinvestment Fund
Financial Highlights
- --------------------------------------------------------------------------------
Selected data and ratios for a share of beneficial interest outstanding
throughout each period:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------------------------------
1993 1992 1991 1990 1989 1988 1987 1986
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period......................... $ 12.12 $ 11.89 $ 11.25 $ 11.41 $ 11.08 $ 10.60 $ 11.85 $ 11.41
--------- --------- --------- --------- --------- --------- --------- ---------
Investment income--net........ 0.67 0.70 0.71 0.70 0.68 0.70 0.72 0.76
Realized and unrealized gain
(loss) on investments--net... 0.75 0.32 0.62 (0.15) 0.33 0.49 (1.15) 1.31
--------- --------- --------- --------- --------- --------- --------- ---------
Total from investment
operations..................... 1.42 1.02 1.33 0.55 1.01 1.19 (0.43) 2.07
--------- --------- --------- --------- --------- --------- --------- ---------
Less dividends and
distributions:
Dividends from net investment
income....................... (0.67) (0.70) (0.69) (0.71) (0.68) (0.70) (0.72) (0.77)
Distributions from net
realized gain on
investments.................. (0.05) (0.09) -0- -0- -0- (0.01) (0.10) (0.86)
--------- --------- --------- --------- --------- --------- --------- ---------
Total dividends and
distributions.................. (0.72) (0.79) (0.69) (0.71) (0.68) (0.71) (0.82) (1.63)
--------- --------- --------- --------- --------- --------- --------- ---------
Net asset value, end of
period......................... $ 12.82 $ 12.12 $ 11.89 $ 11.25 $ 11.41 $ 11.08 $ 10.60 $ 11.85
--------- --------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- --------- ---------
TOTAL INVESTMENT RETURN........... 11.99% 8.88% 12.04% 5.27% 9.47% 11.42% (3.53%) 19.33%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands)..................... $ 96,265 $ 75,918 $ 67,903 $ 60,304 $ 52,485 $ 44,769 $ 40,938 $ 38,058
Ratio of expenses to average net
assets......................... 1.02% 1.14% 1.20% 1.21% 1.40% 1.41% 1.36% 1.50%*
Ratio of net investment income
to average net assets.......... 5.25% 5.79% 6.06% 6.12% 5.90% 6.27% 6.37% 6.30%
Portfolio turnover rate......... 9% 13% 30% 22% 15% 13% 43% 35%
<FN>
- ---------------
* NET OF EXPENSE REIMBURSEMENT.
<CAPTION>
1985 1984
--------- ---------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period......................... $ 10.14 $ 10.11
--------- ---------
Investment income--net........ 0.82 0.73
Realized and unrealized gain
(loss) on investments--net... 1.28 0.01
--------- ---------
Total from investment
operations..................... 2.10 0.74
--------- ---------
Less dividends and
distributions:
Dividends from net investment
income....................... (0.82) (0.71)
Distributions from net
realized gain on
investments.................. (0.01) -0-
--------- ---------
Total dividends and
distributions.................. (0.83) (0.71)
--------- ---------
Net asset value, end of
period......................... $ 11.41 $ 10.14
--------- ---------
--------- ---------
TOTAL INVESTMENT RETURN........... 21.38% 7.91%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands)..................... $ 19,802 $ 7,070
Ratio of expenses to average net
assets......................... 1.50%* 1.50%*
Ratio of net investment income
to average net assets.......... 7.34% 7.98%
Portfolio turnover rate......... 129% 76%
<FN>
- ---------------
* NET OF EXPENSE REIMBURSEMENT.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
DEAN WITTER SELECT MUNICIPAL REINVESTMENT FUND
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Trustees of Dean Witter Select Municipal Reinvestment
Fund.
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio 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 Dean Witter Select Municipal
Reinvestment Fund (formerly Sears Tax-Exempt Reinvestment Fund) (the "Fund") at
December 31, 1993, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended and
the financial highlights for each of the ten years in the period then ended, 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 owned at December 31, 1993 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PRICE WATERHOUSE
New York, New York
January 31, 1994
<PAGE>
TRUSTEES
- ----------------------------------------------
Jack F. Bennett Dean Witter
Charles A. Fiumefreddo Select Municipal
Edwin J. Garn Reinvestment
John R. Haire Fund
Dr. John E. Jeuck
Dr. Manuel H. Johnson
Paul Kolton
Michael E. Nugent
Albert T. Sommers
Edward R. Telling
OFFICERS
- ----------------------------------------------
Charles A. Fiumefreddo
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Sheldon Curtis
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
James F. Willison
VICE PRESIDENT
Thomas F. Caloia
TREASURER
TRANSFER AGENT
- ----------------------------------------------
Dean Witter Trust Company
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
LEGAL COUNSEL
- ----------------------------------------------
Sheldon Curtis
Two World Trade Center
New York, New York 10048
INDEPENDENT ACCOUNTANTS
- ----------------------------------------------
Price Waterhouse
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
- ----------------------------------------------
Dean Witter InterCapital Inc.
Two World Trade Center
New York, New York 10048
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.
ANNUAL REPORT
SEPTEMBER 30, 1993
<PAGE>
SELECT MUNICIPAL REINVESTMENT FUND
GROWTH OF $10,000
($ IN THOUSANDS)
<TABLE>
<CAPTION>
LEHMAN BROTHERS
DATE TOTAL MUNICIPAL BOND
INDEX
<S> <C> <C>
- ------------------------------------------------------------
- ------------------------------------------------------------
December 31, 1983 $10,000 $10,000
- ------------------------------------------------------------
- ------------------------------------------------------------
December 31, 1984 $10,791 $11,055
- ------------------------------------------------------------
- ------------------------------------------------------------
December 31, 1985 $13,098 $13,269
- ------------------------------------------------------------
- ------------------------------------------------------------
December 31, 1986 $15,629 $15,832
- ------------------------------------------------------------
- ------------------------------------------------------------
December 31, 1987 $15,077 $16,071
- ------------------------------------------------------------
- ------------------------------------------------------------
December 31, 1988 $16,799 $17,703
- ------------------------------------------------------------
- ------------------------------------------------------------
December 31, 1989 $18,390 $19,614
- ------------------------------------------------------------
December 31, 1990 $19,359 $21,043
- ------------------------------------------------------------
December 31, 1991 $21,690 $23,598
- ------------------------------------------------------------
December 31, 1992 $23,616 $25,680
- ------------------------------------------------------------
December 31, 1993 $26,448(1) $28,833
- ------------------------------------------------------------
- ------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
1 YEAR 5 YEARS 10 YEARS
- ------------------------------------------------------------
- ------------------------------------------------------------
<S> <C> <C> <C>
No Load 11.99 9.50 10.21
- ------------------------------------------------------------
- ------------------------------------------------------------
<CAPTION>
- ----------------------------------
- ----------------------------------
<S> <C>
Fund Lehman (2)
- ------ -------
- ----------------------------------
- ----------------------------------
<FN>
________________________________________
Past performance is not predictive of future returns.
(1) Closing value, assuming a complete redemption on December 31, 1993.
(2) The Lehman Brothers Municipal Bond Index tracks the performance of
municipal bonds with maturities of 2 years or greater and a minimum credit
rating of Baa or BBB, as rated by Moody's Investors Service, Inc. or Standard &
Poor's Corp. The Index does not include any expenses, fees, or charges.
</TABLE>
