<PAGE>
DEAN WITTER U.S. GOVERNMENT SECURITIES TRUST TWO WORLD TRADE CENTER, NEW YORK,
NEW YORK 10048
LETTER TO THE SHAREHOLDERS
DEAR SHAREHOLDER:
After suffering sharp declines last year as interest rates rose significantly,
the fixed-income markets began to show signs of life in the fourth quarter of
1994 and started a full-scale rebound during the first quarter of 1995. By the
end of the first quarter, the yield on the 2-year U.S. Treasury note had
declined to 6.79 percent, while the 30-year U.S. Treasury bond was yielding 7.43
percent.
The bond market rally continued through the second quarter of 1995. Yields on
intermediate- and long-term bonds declined to levels not seen since before the
Federal Reserve Board began its restrictive monetary policy in February 1994. As
of June 30, 1995, the yield on the 30-year U.S. Treasury bond was 6.62 percent.
On the short-term end of the maturity spectrum, rates have remained in line with
the federal-funds target rate, which stood at 6.00 percent on June 30, but was
cut to 5.75 percent on July 6. At the end of the second quarter, the two-year
U.S. Treasury note was yielding 5.79 percent. Much of the bond market's strength
in the second quarter can be attributed to the continued perception of an
economic slowdown, as employment, housing starts and automobile sales all
declined. At this point, its appears that the Federal Reserve Board may have
successfully orchestrated a "soft landing," which suggests an economy that is
growing quickly enough to avoid recession, yet not so rapidly that inflationary
pressure becomes a major issue.
PERFORMANCE AND PORTFOLIO
Against a backdrop of declining interest rates, Dean Witter U.S. Government
Securities Trust posted a strong performance during the six-month reporting
period. On June 30, 1995, the Fund's net asset value per share (NAV) was $9.01,
up from $8.41 on December 31, 1994. For the six-month period ended June 30,
1995, the Fund provided a total return of 10.68 percent, including income
distributions of $.29 per share.
<PAGE>
DEAN WITTER U.S. GOVERNMENT SECURITIES TRUST
LETTER TO THE SHAREHOLDERS, CONTINUED
During the period under review, the Fund's average maturity was gradually
extended, as attractive investment opportunities became available. This enabled
the Fund to provide a competitive level of income as well as capital
appreciation. While this strategy has proven successful in 1995, further
adjustments to the Fund's average maturity will be made as conditions warrant.
On June 30, 1995, the Fund's average maturity was 7.3 years.
On June 30, 1995, 73 percent of the Fund's assets were invested in Government
National Mortgage Association mortgage-backed securities (GNMAs), 21 percent in
U.S. Treasury securities and 6 percent in Resolution Funding Corp. strips. For
the balance of 1995, we will seek to further reduce the high-coupon, short-term
U.S. Treasury portion of the portfolio. As conditions warrant, the proceeds from
these sales and/or maturities may be reinvested in GNMA mortgage-backed
securities, which we believe continue to offer significant long-term value, an
incremental yield incentive over U.S. Treasury securities of similar maturity
and the potential for capital gains.
LOOKING AHEAD
For the balance of this year, we expect economic growth to continue to moderate
vis-a-vis the rapid pace of 1994, as evidenced by the slowing of the economy
during the first six months of 1995. Despite a 25 basis point cut in the
federal-funds rate on July 6, 1995, we believe that the Federal Reserve will
want to see a sustained confirmation of weak economic trends before taking
further action. Inflation should continue to remain subdued, albeit at a
modestly higher level than in 1994, at approximately 3.00 to 3.50 percent. These
factors should enable the Fund to continue to provide an attractive income
stream as well as a competitive total return.
We appreciate your support of Dean Witter U.S. Government Securities Trust and
look forward to continuing to serve your investment objectives.
Very truly yours,
[SIG]
CHARLES A. FIUMEFREDDO
CHAIRMAN OF THE BOARD
<PAGE>
DEAN WITTER U.S. GOVERNMENT SECURITIES TRUST
PORTFOLIO OF INVESTMENTS JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL DESCRIPTION
AMOUNT IN AND COUPON
THOUSANDS MATURITY DATE RATE VALUE
-----------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
MORTGAGE-BACKED SECURITIES (74.1%)
Government National Mortgage Assoc. I (73.3%)
$ 385,826 10/15/22 - 02/15/24............................... 6.50% $ 370,634,213
50,000 (a)............................................... 7.00 49,140,625
2,067,808 04/15/17 - 06/15/24............................... 7.00 2,034,852,346
50,000 (a)............................................... 7.50 50,148,438
1,460,195 09/15/16 - 05/15/23............................... 7.50 1,467,951,877
455,198 10/15/16 - 12/15/24............................... 8.00 465,724,955
514,158 07/15/06 - 04/15/25............................... 8.50 533,760,002
25,000 (a)............................................... 9.00 26,195,313
380,676 10/15/08 - 08/15/21............................... 9.00 399,591,085
282,349 10/15/09 - 12/15/20............................... 9.50 299,201,772
312,300 11/15/09 - 11/15/20............................... 10.00 339,821,797
918 04/15/10 - 06/15/15............................... 12.50 1,033,241
---------------
6,038,055,664
---------------
Government National Mortgage Assoc. II (0.6%)
53,700 01/20/24 - 02/20/24............................... 6.50 51,367,016
---------------
Government National Mortgage Assoc. GPM I (0.2%)
14,290 06/15/13 - 09/15/15............................... 12.50 15,964,420
---------------
TOTAL MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $6,034,845,646)................................ 6,105,387,100
---------------
U.S. GOVERNMENT OBLIGATIONS (20.8%)
U.S. Treasury Notes (14.1%)
198,000 07/15/95.......................................... 8.875 198,092,812
184,000 10/15/95.......................................... 8.625 185,408,750
258,500 11/15/95.......................................... 8.50 260,963,828
41,500 01/15/96.......................................... 9.25 42,239,219
193,500 02/15/96.......................................... 8.875 197,037,422
9,000 10/15/96.......................................... 8.00 9,237,656
20,500 03/31/97.......................................... 6.875 20,845,938
189,000 04/30/97.......................................... 6.875 192,337,031
55,000 04/15/99.......................................... 7.00 56,916,406
---------------
1,163,079,062
---------------
U.S. Treasury Strips (6.7%)
123,000 02/15/04.......................................... 0.00 71,668,115
380,000 05/15/04.......................................... 0.00 217,441,510
385,000 08/15/04.......................................... 0.00 216,837,159
75,000 11/15/04.......................................... 0.00 41,474,190
---------------
547,420,974
---------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(IDENTIFIED COST $1,694,056,393)................................ 1,710,500,036
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER U.S. GOVERNMENT SECURITIES TRUST
PORTFOLIO OF INVESTMENTS JUNE 30, 1995 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL DESCRIPTION
AMOUNT IN AND COUPON
THOUSANDS MATURITY DATE RATE VALUE
-----------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
U.S. GOVERNMENT AGENCY (5.7%)
Resolution Funding Corp Zero Coupon Strips
$ 19,000 01/15/02.......................................... 0.00% $ 12,727,441
7,150 04/15/02.......................................... 0.00 4,725,820
61,500 07/15/02.......................................... 0.00 39,845,161
57,049 10/15/02.......................................... 0.00 36,368,424
62,000 01/15/03.......................................... 0.00 38,609,781
109,000 04/15/03.......................................... 0.00 66,716,393
55,000 07/15/03.......................................... 0.00 33,140,101
80,000 10/15/03.......................................... 0.00 47,371,640
143,882 01/15/04.......................................... 0.00 83,591,399
104,419 04/15/04.......................................... 0.00 59,552,067
80,000 07/15/04.......................................... 0.00 44,826,776
---------------
TOTAL U.S. GOVERNMENT AGENCY
(IDENTIFIED COST $411,755,992).................................. 467,475,003
---------------
SHORT-TERM INVESTMENT (b) (0.3%)
U.S. GOVERNMENT OBLIGATIONS
U.S. Treasury Bills
28,000 07/06/95.......................................... 5.25 - 5.40
(AMORTIZED COST $27,979,375).................................... 27,979,375
---------------
TOTAL INVESTMENTS
(IDENTIFIED COST $8,168,637,406) (C).............. 100.9 % 8,311,341,514
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS.... (0.9) (71,244,366)
------ ---------------
NET ASSETS........................................ 100.0 % $ 8,240,097,148
------ ---------------
------ ---------------
<FN>
---------------------
GPM Graduated Payment Mortgage.
(a) Securities purchased on a forward commitment basis with an approximate
princpal amount and no definite maturity date; the actual principal amount
and maturity date will be determined upon settlement.
(b) Securities were purchased on a discount basis. The rate shown reflects a
money market equivalent yield.
(c) The aggregate cost for federal income tax purposes is $8,168,637,406; the
aggregate gross unrealized appreciation is $275,258,124 and the aggregate
gross unrealized depreciation is $132,554,016, resulting in net unrealized
appreciation of $142,704,108.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER U.S. GOVERNMENT SECURITIES TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $8,168,637,406).......................... $ 8,311,341,514
Cash........................................................ 1,008,752
Receivable for:
Interest................................................ 64,590,850
Shares of beneficial interest sold...................... 3,028,997
Investments sold........................................ 2,998,750
Prepaid expenses and other assets........................... 198,712
---------------
TOTAL ASSETS........................................... 8,383,167,575
---------------
LIABILITIES:
Payable for:
Investments purchased................................... 126,036,967
Plan of distribution fee................................ 5,106,037
Shares of beneficial interest repurchased............... 4,986,311
Dividends to shareholders............................... 2,990,991
Investment management fee............................... 2,783,502
Accrued expenses and other payables......................... 1,166,619
---------------
TOTAL LIABILITIES...................................... 143,070,427
---------------
NET ASSETS:
Paid-in-capital............................................. 9,808,446,725
Net unrealized appreciation................................. 142,704,108
Distributions in excess of net investment income............ (4,725)
Accumulated net realized loss............................... (1,711,048,960)
---------------
NET ASSETS............................................. $ 8,240,097,148
---------------
---------------
NET ASSET VALUE PER SHARE,
914,271,686 SHARES OUTSTANDING (UNLIMITED SHARES
AUTHORIZED OF $.01 PAR VALUE).............................
$9.01
---------------
---------------
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 (UNAUDITED)
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME............................................. $320,797,987
------------
EXPENSES
Plan of distribution fee.................................... 30,466,756
Investment management fee................................... 16,635,285
Transfer agent fees and expenses............................ 2,800,956
Custodian fees.............................................. 379,515
Shareholder reports and notices............................. 119,420
Professional fees........................................... 57,996
Registration fees........................................... 22,958
Trustees' fees and expenses................................. 15,582
Other....................................................... 46,371
------------
TOTAL EXPENSES......................................... 50,544,839
------------
NET INVESTMENT INCOME.................................. 270,253,148
------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized loss........................................... (10,896,406)
Net change in unrealized depreciation....................... 574,813,525
------------
NET GAIN............................................... 563,917,119
------------
NET INCREASE................................................ $834,170,267
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER U.S. GOVERNMENT SECURITIES TRUST
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED FOR THE YEAR
JUNE 30, 1995 ENDED
(UNAUDITED) DECEMBER 31, 1994
----------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income....................................... $ 270,253,148 $ 672,850,910
Net realized loss........................................... (10,896,406) (93,634,833)
Net change in unrealized appreciation/depreciation.......... 574,813,525 (1,005,227,953)
------------------ -----------------
NET INCREASE (DECREASE)................................ 834,170,267 (426,011,876)
------------------ -----------------
Dividends to shareholders from net investment income........ (271,777,378) (671,363,981)
Net decrease from transactions in shares of beneficial
interest.................................................. (533,000,036) (2,926,948,321)
------------------ -----------------
TOTAL INCREASE (DECREASE).............................. 29,392,853 (4,024,324,178)
------------------ -----------------
NET ASSETS:
Beginning of period......................................... 8,210,704,295 12,235,028,473
------------------ -----------------
END OF PERIOD
(INCLUDING DISTRIBUTIONS IN EXCESS OF NET INVESTMENT
INCOME OF $4,725 AND UNDISTRIBUTED NET INVESTMENT INCOME
OF $1,519,505, RESPECTIVELY)............................ $8,240,097,148 $ 8,210,704,295
------------------ -----------------
------------------ -----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER U.S. GOVERNMENT SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1995 (UNAUDITED)
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter U.S. Government Securities Trust (the "Fund") is registered under
the Investment Company Act of 1940, as amended (the "Act"), as a diversified,
open-end management investment company. The Fund was organized as a
Massachusetts trust on September 29, 1983, and commenced operations on June 29,
1984.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) all 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; (2) when market
quotations are not readily available, portfolio securities are valued at their
fair value as determined in good faith under procedures established by and under
the general supervision of the Trustees (valuation of debt securities for which
market quotations are not readily available may be based upon current market
prices of securities which are comparable in coupon, rating and maturity or an
appropriate matrix utilizing similar factors); and (3) short-term debt
securities having a maturity date of more than sixty days at time of purchase
are valued on a mark-to-market basis until sixty days prior to maturity and
thereafter at amortized cost based on their value on the 61st day. Short-term
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.
Discounts on securities purchased are amortized over the life of the respective
securities. Interest income is accrued daily.
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 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 reclassification. Dividends and
<PAGE>
DEAN WITTER U.S. GOVERNMENT SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1995 (UNAUDITED) CONTINUED
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 with Dean Witter InterCapital
Inc. (the "Investment Manager"), the Fund pays its Investment Manager a
management fee, accrued daily and payable monthly, by applying the following
annual rates to the Fund's net assets determined at the close of each business
day: 0.50% to the portion of daily net assets not exceeding $1 billion; 0.475%
to the portion of daily net assets exceeding $1 billion but not exceeding $1.5
billion; 0.45% to the portion of daily net assets exceeding $1.5 billion but not
exceeding $2 billion; 0.425% to the portion of daily net assets exceeding $2
billion but not exceeding $2.5 billion; 0.40% to the portion of daily net assets
exceeding $2.5 billion but not exceeding $5 billion; 0.375% to the portion of
daily net assets exceeding $5 billion but not exceeding $7.5 billion; 0.35% to
the portion of daily net assets exceeding $7.5 billion but not exceeding $10
billion; 0.325% to the portion of daily net assets exceeding $10 billion but not
exceeding $12.5 billion; and 0.30% to the portion of daily net assets exceeding
$12.5 billion.
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund's books and
records and furnishes, at its own expense, office space, facilities, equipment,
clerical, bookkeeping and certain legal services and pays the salaries of all
personnel, including officers of the Fund who are employees of the Investment
Manager. The Investment Manager also bears the cost of telephone services, heat,
light, power and other utilities provided to the Fund.
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Dean Witter Distributors Inc. (the
"Distributor"), an affiliate of the Investment Manager. The Fund has adopted a
Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act pursuant
to which the Fund pays the Distributor compensation, accrued daily and payable
monthly, at an annual rate of 0.75% (0.65% on amounts over $10 billion) of the
lesser of: (a) the average daily aggregate gross sales of the Fund's shares
since the Fund's inception (not including reinvestment of dividend or capital
gain distributions) less the average daily aggregate net asset value of the
Fund's shares redeemed since the Fund's inception upon which a contingent
<PAGE>
DEAN WITTER U.S. GOVERNMENT SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1995 (UNAUDITED) CONTINUED
deferred sales charge has been imposed or upon which such charge has been
waived; or (b) the Fund's average daily net assets. Amounts paid under the Plan
are paid to the Distributor to compensate it for the services provided and the
expenses borne by it and others in the distribution of the Fund's shares,
including the payment of commissions for sales of the Fund's shares and
incentive compensation to, and expenses of, the account executives of Dean
Witter Reynolds Inc., an affiliate of the Investment Manager and Distributor,
and other employees or selected broker-dealers who engage in or support
distribution of the Fund's shares or who service shareholder accounts, including
overhead and telephone expenses, printing and distribution of prospectuses and
reports used in connection with the offering of the Fund's shares to other than
current shareholders and preparation, printing and distribution of sales
literature and advertising materials. In addition, the Distributor may be
compensated under the Plan for its opportunity costs in advancing such amounts
which compensation would be in the form of a carrying charge on any unreimbursed
expenses incurred by the Distributor.
Provided that the Plan continues in effect, any cumulative expenses incurred by
the Distributor but not yet recovered, may be recovered through future
distribution fees from the Fund and contingent deferred sales charges from the
Fund's shareholders.
The Distributor has informed the Fund that for the six months ended June 30,
1995, it received approximately $6,095,000 in contingent deferred sales charges
from certain redemptions of the Fund's shares. The Fund's shareholders pay such
charges which are not an expense of the Fund.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
Purchases and sales/prepayments of portfolio securities, excluding short-term
investments, for the six months ended June 30, 1995 were $645,617,739 and
$975,761,622, respectively.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At June 30, 1995, the Fund had
transfer agent fees and expenses payable of approximately $697,000.
The Fund established an unfunded noncontributory defined benefit pension plan
covering all independent Trustees of the Fund who will have served as
independent Trustees for at least five years at the time of retirement. Benefits
under this plan are based on years of service and compensation during the last
five years of service. Aggregate pension costs for the six months ended
<PAGE>
DEAN WITTER U.S. GOVERNMENT SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1995 (UNAUDITED) CONTINUED
June 30, 1995 included in Trustees' fees and expenses in the Statement of
Operations amounted to $4,847. At June 30, 1995, the Fund had an accrued pension
liability of $50,829 included in accrued expenses in the Statement of Assets and
Liabilities.
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE FOR THE YEAR ENDED DECEMBER 31,
30, 1995 1994
------------------------------ --------------------------------
SHARES AMOUNT SHARES AMOUNT
------------- -------------- ------------- ----------------
<S> <C> <C> <C> <C>
Sold......................................... 26,664,476 $ 233,447,673 67,499,792 $ 600,440,123
Reinvestment of dividends.................... 15,801,438 138,703,631 39,882,269 348,224,623
------------- -------------- ------------- ----------------
42,465,914 372,151,304 107,382,061 948,664,746
Repurchased.................................. (104,084,924) (905,151,340) (445,440,434) (3,875,613,067)
------------- -------------- ------------- ----------------
Net decrease................................. (61,619,010) $ (533,000,036) (338,058,373) $ (2,926,948,321)
------------- -------------- ------------- ----------------
------------- -------------- ------------- ----------------
</TABLE>
6. FEDERAL INCOME TAX STATUS
At December 31, 1994, the Fund had an approximate net capital loss carryover
which may be used to offset future capital gains to the extent provided by
regulations which is available through December 31 in the following years:
<TABLE>
<CAPTION>
IN THOUSANDS
---------------------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000 2001 2002 Total
--------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 228,402 $ 277,199 $ 270,987 $ 108,731 $ 261,526 $ 154,964 $ 263,492 $ 118,056 $1,683,357
</TABLE>
Capital losses incurred after October 31 ("post-October" losses) within the
taxable year are deemed to arise on the first business day of the Fund's next
taxable year. The Fund incurred and will elect to defer net capital losses of
approximately $16,795,000 during fiscal 1994.
At December 31, 1994, the Fund had temporary book/tax differences primarily
attributable to post-October losses and a permanent book/tax difference
attributable to expired capital loss carryover.
<PAGE>
DEAN WITTER U.S. GOVERNMENT SECURITIES TRUST
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED
JUNE 30, FOR THE YEAR ENDED DECEMBER 31
1995 ----------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value,
beginning of period............... $ 8.41 $ 9.31 $ 9.30 $ 9.52 $ 9.37 $ 9.51
---------- ---------- ---------- ---------- ---------- ----------
Net investment income.............. 0.29 0.58 0.64 0.74 0.87 0.90
Net realized and unrealized gain
(loss)............................ 0.60 (0.90) 0.01 (0.22) 0.15 (0.14)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations... 0.89 (0.32) 0.65 0.52 1.02 0.76
---------- ---------- ---------- ---------- ---------- ----------
Less dividends from net investment
income............................ (0.29) (0.58) (0.64) (0.74) (0.87) (0.90)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period..... $ 9.01 $ 8.41 $ 9.31 $ 9.30 $ 9.52 $ 9.37
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
TOTAL INVESTMENT RETURN+........... 10.68%(1) (3.51)% 7.13% 5.76% 11.43% 8.49%
RATIOS TO AVERAGE NET ASSETS:
Expenses........................... 1.24%(2) 1.22% 1.18% 1.20% 1.17% 1.23%
Net investment income.............. 6.65%(2) 6.57% 6.78% 7.91% 9.23% 9.60%
SUPPLEMENTAL DATA:
Net assets, end of period, in
millions.......................... $8,240 $8,211 $12,235 $12,484 $11,736 $9,829
Portfolio turnover rate............ 8%(1) 26% 32% 40% 104% 54%
<FN>
---------------------
+ Does not reflect the deduction of sales charge.
(1) Not annualized.
(2) Annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TRUSTEES
Jack F. Bennett ---------------------------
Michael Bozic
Charles A. Fiumefreddo DEAN WITTER
Edwin J. Garn U.S. GOVERNMENT
John R. Haire SECURITIES
Dr. Manuel H. Johnson TRUST
Paul Kolton
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
Charles A. Fiumefreddo [PICTURE]
Chairman and Chief Executive Officer
Sheldon Curtis
Vice President, Secretary and General Counsel
Rajesh K. Gupta
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Dean Witter Trust Company
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Dean Witter InterCapital Inc.
Two World Trade Center
New York, New York 10048
The financial statements included herein
have been taken from the records of the
Fund without examination by the independent
accountants and accordingly they do not
express an opinion thereon.
This report is submitted for the general
information of shareholders of the Fund.
For more detailed information about the
Fund, its officers and trustees, fees,
expenses and other pertinent information,
please see the prospectus of the Fund.
This report is not authorized for
distribution to prospective investors
in the Fund unless preceded or accompanied SEMIANNUAL REPORT
by an effective prospectus. JUNE 30, 1995
