<PAGE>
DEAN WITTER U.S. GOVERNMENT SECURITIES TRUST
Two World Trade Center, New York, New York 10048
LETTER TO THE SHAREHOLDERS June 30, 1997
DEAR SHAREHOLDER:
The economy started 1997 off nicely with employment expanding, income
climbing and consumer confidence rising. Concern over inflation, however, was
heightened when the Federal Reserve Board chairman hinted that a preemptive
move against rising pressure on prices might be necessary. This concern
permeated the bond markets during January and February, resulting in
lackluster performance.
As anticipated, the central bank voted to raise the federal-funds rate by 25
basis points, at its March 25, 1997, meeting. Although this move initially
sent stocks and bonds lower, many economists applauded the Fed's action,
which was viewed as a strike against any increase in inflation before it
could occur, thus prolonging the current economic expansion. By the end of
March, the 30-year U.S. Treasury bond rose above the important 7 percent
level for the first time since September 1996.
While it first appeared as if the Federal Reserve was poised for a number of
further rate increases, a slight cooling of economic data and subdued
inflation during the second quarter, as well as progress toward a balanced
budget agreement, have argued against a quick succession of tightening moves.
As a result, interest rates actually declined during the second quarter of
1997.
Although the current inflation environment remains favorable, members of the
Federal Open Market Committee have voiced concerns regarding the continuing
strength in employment and the probable rise of inflationary pressures in the
near future.
PERFORMANCE AND PORTFOLIO STRUCTURE
Against this backdrop, Dean Witter U.S. Government Securities Trust produced
a total return of 3.13 percent for the six-month period ended June 30, 1997.
This compares to a return of 2.63 percent for the Lehman Brothers General
U.S. Government Funds Index and a return of 2.61 percent for the Lipper U.S.
Government Fund Index. During the six-month period under review, the Fund
paid income distributions totaling $0.27 per share.
<PAGE>
DEAN WITTER U.S. GOVERNMENT SECURITIES TRUST
LETTER TO THE SHAREHOLDERS June 30, 1997, continued
On June 30, 1997, Dean Witter U.S. Government Securities Trust had net assets
in excess of $5.7 billion, with 79 percent of net assets invested in
Government National Mortgage Association mortgage-backed securities (GNMAs),
16 percent in U.S. Treasury Securities and the remaining 5 percent in
Resolution Funding Corporation zero coupon securities (REFCORPs). We believe
that GNMAs continue to provide significant long-term value and, in the
current investment environment, offer not only an incremental yield incentive
over U.S. Treasury securities of similar maturity but also the potential for
capital gains.
On June 30, 1997, the Fund's duration stood at approximately 5.4 years. The
Fund's duration reflects a cautious view of the market. While we believe
there is considerable long-term value in the market from a nominal as well as
a real rate of return standpoint, some caution is warranted in light of the
anticipated resurgence in the growth rate of the U.S. economy in the third
quarter.
LOOKING AHEAD
For the balance of 1997, we expect the U.S. economy to moderate from its
current strong pace. The Federal Reserve Board is likely to look for
sustained confirmation of a strong economy and rising inflationary pressures
before taking any further action to slow the economy.
On June 30, 1997, the Fund's Board of Trustees approved a proposal to adopt a
multiple class share structure. Through this arrangement the Fund will offer
four classes of shares with various sales charges, ongoing fees and other
features. This conversion occurred on July 28, 1997.
We appreciate your ongoing support of Dean Witter U.S. Government Securities
Trust and look forward to continuing to serve your investment objectives.
Very truly yours,
/s/ Charles A. Fiumefreddo
CHARLES A. FIUMEFREDDO
Chairman of the Board
<PAGE>
DEAN WITTER U.S. GOVERNMENT SECURITIES TRUST
RESULTS OF SPECIAL MEETING (unaudited)
* * *
On May 21, 1997, a special meeting of the Fund's shareholders was held for
the purpose of voting on four separate matters, the results of which are as
follows:
(1) APPROVAL OF A NEW INVESTMENT MANAGEMENT AGREEMENT BETWEEN THE FUND AND
DEAN WITTER INTERCAPITAL INC. IN CONNECTION WITH THE MERGER OF MORGAN
STANLEY GROUP INC. WITH DEAN WITTER, DISCOVER & CO.:
<TABLE>
<CAPTION>
<S> <C>
For ........ 350,719,197
Against ... 9,129,293
Abstain ... 30,090,915
</TABLE>
(2) ELECTION OF TRUSTEES:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Michael Bozic John R. Haire Michael E. Nugent
For ................... 371,904,312 For ................... 371,762,131 For ................... 372,644,943
Withheld .............. 18,035,093 Withheld .............. 18,177,274 Withheld .............. 17,294,462
Charles A. Fiumefreddo Wayne E. Hedien Philip J. Purcell
For ................... 372,186,526 For ................... 372,462,335 For ................... 372,604,816
Withheld .............. 17,752,879 Withheld .............. 17,477,070 Withheld .............. 17,334,689
Edwin J. Garn Dr. Manuel H. Johnson John L. Schroeder
For ................... 372,218,614 For ................... 372,467,177 For ................... 372,391,335
Withheld .............. 17,720,791 Withheld .............. 17,472,228 Withheld .............. 17,548,070
</TABLE>
(3) APPROVAL OF A NEW INVESTMENT POLICY WITH RESPECT TO INVESTMENTS IN
CERTAIN OTHER INVESTMENT COMPANIES:
<TABLE>
<CAPTION>
<S> <C>
For ....... 337,152,165
Against .. 15,239,433
Abstain .. 37,547,807
</TABLE>
(4) RATIFICATION OF THE SELECTION OF PRICE WATERHOUSE LLP AS THE FUND'S
INDEPENDENT ACCOUNTANTS:
<TABLE>
<CAPTION>
<S> <C>
For ....... 362,204,942
Against .. 3,968,791
Abstain .. 23,765,672
</TABLE>
<PAGE>
DEAN WITTER U.S. GOVERNMENT SECURITIES TRUST
PORTFOLIO OF INVESTMENTS June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
PRINCIPAL DESCRIPTION
AMOUNT IN AND COUPON
THOUSANDS MATURITY DATE RATE VALUE
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MORTGAGE-BACKED SECURITIES (78.5%)
Government National Mortgage Assoc. I (77.5%)
$ 335,950 10/15/22-02/15/24 ............................................... 6.50% $ 321,462,438
1,823,804 04/15/17-04/15/26 ............................................... 7.00 1,790,747,301
897,769 11/15/02-06/15/27 ............................................... 7.50 900,294,387
50,000 (a) ............................................................ 7.50 50,140,625
352,391 10/15/16-07/15/26 ............................................... 8.00 360,430,163
360,344 07/15/06-04/15/25 ............................................... 8.50 374,420,400
260,057 10/15/08-08/15/21 ............................................... 9.00 274,766,842
179,523 10/15/09-12/15/20 ............................................... 9.50 193,660,006
192,789 11/15/09-11/15/20 ............................................... 10.00 211,284,998
498 05/15/10-06/15/15 ............................................... 12.50 570,044
--------------
4,477,777,204
--------------
Government National Mortgage Assoc. II (0.8%)
47,161 01/20/24-02/20/24 ............................................... 6.50 44,921,166
--------------
Government National Mortgage Assoc. GPM I (0.2%)
8,081 06/15/13-09/15/15 ............................................... 12.25 9,356,582
--------------
TOTAL MORTGAGE-BACKED SECURITIES
(Identified Cost $4,495,041,230) ......................................... 4,532,054,952
--------------
U.S. GOVERNMENT OBLIGATIONS (16.1%)
U.S. Treasury Notes (5.5%)
179,500 11/15/97 ........................................................ 7.375 180,618,285
85,500 08/15/97 ........................................................ 8.625 85,848,840
51,000 10/15/97 ........................................................ 8.75 51,468,180
--------------
317,935,305
--------------
U.S. Treasury Principal Strips (10.6%)
123,000 02/15/04 ........................................................ 0.00 80,411,250
380,000 05/15/04 ........................................................ 0.00 244,009,400
385,000 08/15/04 ........................................................ 0.00 243,204,500
75,000 11/15/04 ........................................................ 0.00 46,522,500
--------------
614,147,650
--------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Identified Cost $858,919,003) .......................................... 932,082,955
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER U.S. GOVERNMENT SECURITIES TRUST
PORTFOLIO OF INVESTMENTS June 30, 1997 (unaudited) continued
<TABLE>
<CAPTION>
PRINCIPAL DESCRIPTION
AMOUNT IN AND COUPON
THOUSANDS MATURITY DATE RATE VALUE
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCIES (5.9%)
Resolution Funding Corp Zero Coupon Strips
$ 33,500 07/15/02 ........................................................ 0.00% $ 24,214,805
5,049 10/15/02 ........................................................ 0.00 3,588,324
109,000 04/15/03 ........................................................ 0.00 74,702,060
55,000 07/15/03 ........................................................ 0.00 37,083,200
69,000 10/15/03 ........................................................ 0.00 45,731,130
89,882 01/15/04 ........................................................ 0.00 58,591,379
84,419 04/15/04 ........................................................ 0.00 54,094,007
68,000 07/15/04 ........................................................ 0.00 42,857,680
--------------
TOTAL U.S. GOVERNMENT AGENCIES
(Identified Cost $312,140,647) .......................................... 340,862,585
--------------
TOTAL INVESTMENTS
(Identified Cost $5,666,100,880)(b) ............................. 100.5% 5,805,000,492
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS ................. (0.5) (30,160,966)
------- ----------------
NET ASSETS ..................................................... 100.0% $5,774,839,526
======= ================
</TABLE>
- ------------
GPM Graduated Payment Mortgage.
(a) Securities purchased on a forward commitment basis with an
approximate principal amount and no definite maturity date; the
actual principal amount and maturity date will be determined upon
settlement.
(b) The aggregate cost for federal income tax purposes approximates
identified cost. The aggregate gross unrealized appreciation is
$191,994,877 and the aggregate gross unrealized depreciation is
$53,095,265, resulting in net unrealized appreciation of
$138,899,612.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER U.S. GOVERNMENT SECURITIES TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $5,666,100,880)...................................... $5,805,000,492
Cash................................................................... 271,856
Receivable for:
Interest............................................................. 33,869,865
Shares of beneficial interest sold................................... 1,010,696
Prepaid expenses and other assets...................................... 120,271
----------------
TOTAL ASSETS ........................................................ 5,840,273,180
----------------
LIABILITIES:
Payable for:
Investments purchased................................................ 50,161,458
Shares of beneficial interest repurchased............................ 4,459,621
Dividends to shareholders............................................ 4,073,166
Plan of distribution fee............................................. 3,710,959
Investment management fee............................................ 2,110,274
Accrued expenses and other payables ................................... 918,176
----------------
TOTAL LIABILITIES.................................................... 65,433,654
----------------
NET ASSETS:
Paid-in-capital........................................................ 6,927,962,660
Net unrealized appreciation ........................................... 138,899,612
Accumulated net realized loss.......................................... (1,292,022,746)
----------------
NET ASSETS........................................................... $5,774,839,526
================
NET ASSET VALUE PER SHARE,
647,748,209 shares outstanding (unlimited shares authorized of $.01
par value)............................................................ $8.92
=======
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER U.S. GOVERNMENT SECURITIES TRUST
FINANCIAL STATEMENTS, continued
STATEMENT OF OPERATIONS
For the six months ended June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME....................... $228,644,633
--------------
EXPENSES
Plan of distribution fee.............. 22,549,894
Investment management fee............. 12,762,618
Transfer agent fees and expenses ..... 1,935,582
Custodian fees........................ 466,491
Shareholder reports and notices ...... 144,759
Professional fees..................... 73,783
Servicing fees........................ 47,445
Registration fees..................... 19,977
Trustees' fees and expenses........... 7,009
Other................................. 30,216
--------------
TOTAL EXPENSES...................... 38,037,774
--------------
NET INVESTMENT INCOME............... 190,606,859
--------------
NET REALIZED AND UNREALIZED LOSS:
Net realized loss..................... (784,555)
Net change in unrealized
appreciation......................... (3,586,058)
--------------
NET LOSS............................ (4,370,613)
--------------
NET INCREASE.......................... $186,236,246
==============
</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 FOR THE YEAR
MONTHS ENDED ENDED
JUNE 30, 1997 DECEMBER 31, 1996
- ------------------------------------------------------ -------------- -----------------
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income ................................. $ 190,606,859 $ 445,096,615
Net realized loss...................................... (784,555) (18,950,945)
Net change in unrealized appreciation/depreciation .... (3,586,058) (237,138,336)
-------------- -----------------
NET INCREASE......................................... 186,236,246 189,007,334
Dividends from net investment income................... (190,602,137) (447,472,130)
Net decrease from transactions in shares of beneficial
interest.............................................. (670,332,739) (1,246,903,069)
-------------- -----------------
NET DECREASE......................................... (674,698,630) (1,505,367,865)
NET ASSETS:
Beginning of period.................................... 6,449,538,156 7,954,906,021
-------------- -----------------
END OF PERIOD
(Including dividends in excess of net investment
income of $0 and $4,722, respectively)............... $5,774,839,526 $6,449,538,156
============== =================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER U.S. GOVERNMENT SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS June 30, 1997 (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's investment objective is
high current income consistent with safety of principal. The Fund seeks to
achieve its objective by investing in obligations issued or guaranteed by the
U.S. Government or its instrumentalities. The Fund was organized as a
Massachusetts business trust on September 29, 1983 and commenced operations
on June 29, 1984.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts and disclosures. Actual results could differ
from those estimates.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) 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, including circumstances under which it
is determined by Dean Witter InterCapital Inc. (the "Investment Manager")
that sale or bid prices are not reflective of a security's market value,
portfolio securities are valued at their fair value as determined in good
faith under procedures established by and under the general supervision of
the Trustees (valuation of debt securities for which market quotations are
not readily available may be based upon current market prices of securities
which are comparable in coupon, rating and maturity or an appropriate matrix
utilizing similar factors); and (3) certain 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, if available, in determining what it believes is the fair
valuation of the securities valued by such pricing service; (4) short-term
debt securities having a maturity date of more than sixty days at time of
purchase are valued on a mark-to-market basis until sixty days prior to
maturity and thereafter at amortized cost based on their value on the 61st
day. Short-term debt securities having a maturity date of sixty days or less
at the time of purchase are valued at amortized cost.
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 are accreted over the life of the respective securities.
Interest income is accrued daily.
<PAGE>
DEAN WITTER U.S. GOVERNMENT SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS June 30, 1997 (unaudited) continued
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 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 the Investment Manager,
the Fund pays the 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.
<PAGE>
DEAN WITTER U.S. GOVERNMENT SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS June 30, 1997 (unaudited) continued
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 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. ("DWR"), an affiliate of the
Investment Manager and Distributor, and others 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 utilize fees paid pursuant to the Plan to compensate DWR and
other selected broker-dealers for their opportunity costs in advancing such
amounts which compensation would be in the form of a carrying charge on any
unreimbursed distribution 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.
Although there is no legal obligation for the Fund to pay expenses incurred
in excess of payments made to the Distributor under the Plan and the proceeds
of contingent deferred sales charges paid by investors upon redemption of
shares, if for any reason the Plan is terminated, the Trustees will consider
at that time the manner in which to treat such expenses. The Distributor has
advised the Fund that such excess amounts, including carrying charges, total
$50,531,127 at June 30, 1997.
The Distributor has informed the Fund that for the six months ended June 30,
1997, it received approximately $3,354,000 in contingent deferred sales
charges from certain redemptions of the Fund's shares.
<PAGE>
DEAN WITTER U.S. GOVERNMENT SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS June 30, 1997 (unaudited) continued
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The costs of purchases and sales/prepayments of portfolio securities,
excluding short-term investments, for the six months ended June 30, 1997 were
$95,470,752 and $949,707,291, respectively.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At June 30, 1997, the Fund had
transfer agent fees and expenses payable of approximately $520,000.
The Fund has an unfunded noncontributory defined benefit pension plan
covering all independent Trustees of the Fund who will have served as
independent Trustees for at least five years at the time of retirement.
Benefits under this plan are based on years of service and compensation
during the last five years of service. Aggregate pension costs for the six
months ended June 30, 1997 included in Trustees' fees and expenses in the
Statement of Operations amounted to $810. At June 30, 1997, the Fund had an
accrued pension liability of $48,788 included in accrued expenses in the
Statement of Assets and Liabilities.
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
JUNE 30, 1997 DECEMBER 31, 1996
------------------------------- -------------------------------
(UNAUDITED)
SHARES AMOUNT SHARES AMOUNT
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Sold ...................... 33,249,103 $ 294,483,726 44,291,927 $ 394,473,930
Reinvestment of dividends 10,806,240 95,417,314 25,980,320 230,960,458
--------------- --------------- --------------- ---------------
44,055,343 389,901,040 70,272,247 625,434,388
Repurchased ............... (119,721,318) (1,060,233,779) (210,573,457) (1,872,337,457)
--------------- --------------- --------------- ---------------
Net decrease .............. (75,665,975) $ (670,332,739) (140,301,210) $(1,246,903,069)
=============== =============== =============== ===============
</TABLE>
6. FEDERAL INCOME TAX STATUS
At December 31, 1996, the Fund had a net capital loss carryover of
approximately $1,290,565,000, which may be used to offset future capital
gains to the extent provided by regulations which is available through
December 31 of the following years:
<TABLE>
<CAPTION>
IN THOUSANDS
- ------------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002 2003 2004
- ---------- ---------- ---------- ---------- ---------- ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$270,987 $108,731 $261,525 $154,964 $263,492 $118,056 $63,667 $49,143
========== ========== ========== ========== ========== ========== ========= ========
</TABLE>
<PAGE>
DEAN WITTER U.S. GOVERNMENT SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS June 30, 1997 (unaudited) continued
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 $673,000 during fiscal 1996.
At December 31, 1996, the Fund had temporary book/tax differences primarily
attributable to post-October losses.
7. SUBSEQUENT EVENT
On June 30, 1997, the Fund's Board of Trustees approved a proposal to adopt a
multiple class share structure. Through this arrangement, the Fund will offer
four classes of shares with various sales charges, ongoing fees and other
features. This conversion occurred on July 28, 1997.
<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 FOR THE YEAR ENDED DECEMBER 31
MONTHS ENDED ------------------------------------------------------------
JUNE 30, 1997 1996 1995 1994 1993 1992
- ----------------------------------------- -------------- ------------ ----------- ------------ ------------- -----------
(UNAUDITED)
PER SHARE OPERATING PERFORMANCE:
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..... $ 8.92 $ 9.21 $ 8.41 $ 9.31 $ 9.30 $ 9.52
-------------- ------------ ----------- ------------ ------------- ------------
Net investment income..................... 0.27 0.56 0.57 0.58 0.64 0.74
Net realized and unrealized gain (loss) .. -- (0.29) 0.80 (0.90) 0.01 (0.22)
-------------- ------------ ----------- ------------ ------------- ------------
Total from investment operations.......... 0.27 0.27 1.37 (0.32) 0.65 0.52
-------------- ------------ ----------- ------------ ------------- ------------
Less dividends from net investment
income................................... (0.27) (0.56) (0.57) (0.58) (0.64) (0.74)
-------------- ------------ ----------- ------------ ------------- ------------
Net asset value, end of period............ $ 8.92 $ 8.92 $ 9.21 $ 8.41 $ 9.31 $ 9.30
============== ============ =========== ============ ============= ============
TOTAL INVESTMENT RETURN+ ................. 3.13%(1) 3.16% 16.74% (3.51)% 7.13% 5.76%
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................. 1.27%(2) 1.25% 1.24% 1.22% 1.18% 1.20%
Net investment income..................... 6.34%(2) 6.28% 6.44% 6.57% 6.78% 7.91%
SUPPLEMENTAL DATA:
Net assets, end of period, in millions ... $5,775 $6,450 $7,955 $8,211 $12,235 $12,484
Portfolio turnover rate................... 2%(1) 8% 14% 26% 32% 40%
</TABLE>
- ------------
+ Does not reflect the deduction of sales charge. Calculated based on the
net asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Barry Fink
Vice President, Secretary and
General Counsel
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 by an effective prospectus.
DEAN WITTER
U.S. GOVERNMENT
SECURITIES
TRUST
SEMIANNUAL REPORT
JUNE 30, 1997
