<PAGE> 1
DEAN WITTER NEW YORK TAX-FREE INCOME FUND Two World Trade Center, New York, New
LETTER TO THE SHAREHOLDERS June 30, 1996 York 10048
DEAR SHAREHOLDER:
During the first half of 1996, the fixed income market outlook shifted from
bullishness associated with a weak economy and low inflation to bearishness
caused by stronger economic growth and the potential threat of renewed
inflation. This change in market psychology began in earnest after a
surprisingly large increase in payroll employment was reported in early March.
Other measures of economic activity and rising commodity prices added to the
concern. In addition, the market began to speculate that the Federal Reserve
Board would reverse its series of interest rate reductions with a move toward
higher interest rates. The bond market reacted to these expectations by pushing
long-term yields sharply higher.
MUNICIPAL MARKET CONDITIONS
Municipal bond yields as measured by 30-year insured revenue bonds began the
year at 5.50 percent. Interest rates subsequently began to rise in mid-February
on signs of stronger economic growth and reached a high of 6.15 percent in April
and again in mid-June before finishing the first half of 1996 at 5.90 percent.
Yields on one-year municipal notes increased from 3.60 percent to 3.90 percent
over the first six months of the year. In June, the yield curve pickup for
extending maturities from 1 to 30 years was 200 basis points.
Tax-exempt bonds outperformed U.S. Treasury securities during the first half of
1996 as the risk faded that flat tax proposals would cause a radical change in
the tax code. The ratio of insured revenue bond yields to 30-year U.S. Treasury
yields, which began the year at 92 percent, declined to 85 percent by the end of
June. A declining ratio means that municipal bond prices were relatively
stronger than U.S. Treasury prices.
The municipal market also benefited from steady demand. In addition to regular
maturities and calls for redemption this year, it has been estimated that
investors also face the retirement of $66 billion of previously refunded debt.
On the supply side, new issues increased
<PAGE> 2
DEAN WITTER NEW YORK TAX-FREE INCOME FUND
LETTER TO THE SHAREHOLDERS June 30, 1996, continued
30 percent to $90 billion during the first six months of 1996. However, as
interest rates rose, underwritings were frequently postponed and the pace of
activity slowed.
New York new issue volume increased 63 percent to $9 billion in the first six
months. This represents 11 percent of total underwriting and retained New York's
position as the second largest state source of new issues. New York issues
became more attractive as they more closely matched the yields available in the
general municipal market.
PERFORMANCE
Dean Witter New York Tax-Free Income Fund's total return for the first half of
1996 was -1.75 percent. The Fund's net asset value declined from $11.96 to
$11.46 per share. Tax-free dividends of $0.27 per share and taxable long-term
capital gains distributions of $0.04 per share were paid during the period.
Since its inception on April 25, 1985, the Fund has provided shareholders with
an average annual total return of 7.91 percent. The trailing 30-day SEC and
distribution yields on June 30, 1996 were 4.49 percent and 4.66 percent,
respectively.
PORTFOLIO STRUCTURE
The Fund's net assets of $201 million were diversified among 14 long-term
sectors and 35 credits. In response to the changing interest rate environment,
the Fund increased its cash and short-term investment position from 2 percent to
7 percent of net assets during the first half of the year. Portfolio sales
shifted to more market sensitive issues. Discount and current-coupon sales
exceeded sales of defensive, higher coupon bonds with shorter calls. The average
maturity and call protection of the long-term portfolio were 19 years and
New York Tax-Free
FIVE LARGEST SECTORS AS OF JUNE 30, 1996
(% OF NET ASSETS)
IDR/PCR* 15%
EDUCATION 13%
GENERAL OBLIGATION 10%
TRANSPORTATION 10%
WATER & SEWER 9%
OTHER 43%
* INDUSTRIAL DEVELOPMENT/POLLUTION CONTROL
PORTFOLIO STRUCTURE IS SUBJECT TO CHANGE.
CREDIT RATINGS AS OF JUNE 30, 1996
(% OF TOTAL LONG-TERM PORTFOLIO)
Aaa OR AAA 30%
Aa OR AA 11%
A OR A 36%
Baa OR BBB 20%
NOT RATED 3%
AS MEASURED BY STANDARD & POOR'S CORP. OR MOODY'S INVESTORS
SERCICE, INC.
<PAGE> 3
DEAN WITTER NEW YORK TAX-FREE INCOME FUND
LETTER TO THE SHAREHOLDERS June 30, 1996, continued
7 years, respectively. The portfolio has consistently maintained
investment-grade quality with 77 percent of its long-term holdings rated single
"A" or better.
LOOKING AHEAD
Future tax reduction proposals may renew investor concern. However, the balance
between the supply of new issues and demand created by maturities should remain
positive for the municipal market. Long-term insured municipal securities
currently yield 85 percent to the yield on U.S. Treasury securities and may be
expected to move in tandem with the Treasury market.
We appreciate your ongoing support of Dean Witter New York Tax-Free Income Fund
and look forward to continuing to serve your investment needs.
Very truly yours,
/s/ CHARLES A. FIUMEFREDDO
CHARLES A. FIUMEFREDDO
Chairman of the Board
<PAGE> 4
DEAN WITTER NEW YORK TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS June 30, 1996 (unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- --------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
NEW YORK TAX-EXEMPT MUNICIPAL BONDS (92.5%)
General Obligation (9.6%)
New York City,
$ 3,500 Various Purpose 1973................................................... 3.50 % 05/01/01 $ 3,172,470
2,500 Various Purpose 1973................................................... 3.50 05/01/03 2,121,850
4,000 1990 Ser D............................................................. 6.00 08/01/06 3,940,360
3,000 New York State, Refg Ser 1995 B......................................... 5.70 08/15/13 2,970,660
8,800 Puerto Rico, Public Improvement Refg Ser 1987 A......................... 3.00 07/01/06 7,159,592
- -------- ----------
21,800 19,364,932
- -------- ----------
Educational Facilities Revenue (13.2%)
New York State Dormitory Authority,
5,000 Canisius College Ser 1995 (CAPMAC)..................................... 5.60 07/01/23 4,715,100
2,150 City University Ser U.................................................. 6.375 07/01/08 2,200,654
3,000 City University Ser 1993 A............................................. 5.75 07/01/09 2,948,820
3,000 State University Ser 1989 B............................................ 0.00 05/15/05 1,776,210
10,000 State University Ser 1993 C............................................ 5.375 05/15/13 9,055,900
2,000 State University Ser 1993 A............................................ 5.25 05/15/15 1,802,500
4,000 University of Rochester Ser 1987....................................... 6.50 07/01/09 4,138,000
- -------- ----------
29,150 26,637,184
- -------- ----------
Electric Revenue (5.8%)
5,000 New York State Power Authority, Ser CC.................................. 5.00 01/01/14 4,512,850
8,000 Puerto Rico Electric Power Authority, Power Ser O....................... 5.00 07/01/12 7,116,160
- -------- ----------
13,000 11,629,010
- -------- ----------
Hospital Revenue (4.5%)
9,635 New York State Medical Care Facilities Finance Agency, Insured Hospital
- -------- & Nursing Home-FHA Ins Mtge 1993 Ser B................................. 5.50 02/15/22 9,019,709
----------
Industrial Development/Pollution Control Revenue (14.7%)
4,500 New York City Industrial Development Agency, 1990 American Airlines Inc
(AMT).................................................................. 8.00 07/01/20 4,759,695
New York State Energy Research & Development Authority,
3,000 Brooklyn Union Gas Co 1993 Ser B....................................... 6.368 04/01/20 3,031,950
11,000 Brooklyn Union Gas Co 1991 Ser A (AMT)................................. 6.952 07/01/26 11,691,790
4,000 Consolidated Edison Co of New York Inc Ser 1986 A (AMT)................ 7.50 11/15/21 4,114,560
1,000 Long Island Lighting Co 1990 Ser A (AMT)............................... 7.15 06/01/20 983,730
5,000 New York State Electric & Gas Corp 1987 Ser A (AMT) (MBIA)............. 6.15 07/01/26 5,019,800
- -------- ----------
28,500 29,601,525
- -------- ----------
Mortgage Revenue - Multi-Family (2.9%)
New York City Housing Development Corporation,
2,369 East Midtown Proj-FHA Ins Sec 223...................................... 6.50 11/15/18 2,411,329
945 Gen Hsg Ser A (AMBAC).................................................. 6.50 05/01/06 967,784
2,377 Ruppert Proj-FHA Ins Sec 223........................................... 6.50 11/15/18 2,391,234
- -------- ----------
5,691 5,770,347
- -------- ----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 5
DEAN WITTER NEW YORK TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS June 30, 1996 (unaudited) continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Mortgage Revenue - Single Family (3.1%)
New York State Mortgage Agency,
$ 4,500 Homeowner Ser 27....................................................... 6.90 % 04/01/15 $ 4,733,505
1,400 Homeowner Ser MM-1 (AMT)............................................... 7.95 10/01/21 1,485,414
- -------- ----------
5,900 6,218,919
- -------- ----------
Nursing & Health Related Facilities Revenue (1.3%)
2,500 New York State Medical Care Facilities Finance Authority, Long Term
- -------- Health Care 1992 Ser D (FSA)........................................... 6.50 11/01/15 2,617,575
----------
Resource Recovery Revenue (4.1%)
3,000 Hempstead Industrial Development Agency, 1985 American REF-FUEL Co of
Hempstead.............................................................. 7.40 12/01/10 3,085,800
3,000 New York State Environmental Facilities Corporation, Huntington
1989 Ser A (AMT)....................................................... 7.50 10/01/12 3,161,760
2,000 Oneida-Herkimer Solid Waste Management Authority, Ser 1992.............. 6.75 04/01/14 2,002,600
- -------- ----------
8,000 8,250,160
- -------- ----------
Transportation Facilities Revenue (10.3%)
2,500 Buffalo & Fort Erie Public Bridge Authority, Ser 1995 (MBIA)............ 5.75 01/01/25 2,462,100
5,000 Metropolitan Transportation Authority, Commuter/Sub Grand Central
Terminal Redev Ser 1995-1 (FSA)........................................ 5.70 07/01/24 4,890,550
New York State Thruway Authority,
3,500 Ser A.................................................................. 5.75 01/01/12 3,478,685
2,000 Ser C (FGIC)........................................................... 6.00 01/01/25 2,015,480
5,000 Port Authority of New York & New Jersey, Cons 100th Ser................. 5.75 12/15/20 4,909,750
3,000 Puerto Rico Highway & Transportation Authority, Refg Ser X.............. 5.50 07/01/15 2,900,490
- -------- ----------
21,000 20,657,055
- -------- ----------
Water & Sewer Revenue (8.7%)
New York City Municipal Water Finance Authority,
4,000 1994 Ser B............................................................. 5.375 06/15/07 3,952,680
4,000 1990 Ser A............................................................. 6.00 06/15/19 3,990,000
Suffolk County Industrial Development Agency,
5,000 Southwest Sewer Ser 1994 (FGIC)........................................ 6.00 02/01/07 5,305,600
4,000 Southwest Sewer Ser 1994 (FGIC)........................................ 6.00 02/01/08 4,225,760
- -------- ----------
17,000 17,474,040
- -------- ----------
Other Revenue (7.5%)
5,000 Municipal Assistance Corporation for the City of New York, Ser E........ 6.00 07/01/06 5,301,000
5,000 New York Local Government Assistance Corporation, Ser 1994 A............ 5.50 04/01/17 4,825,650
5,000 United Nations Development Corporation, 1992 Refg Ser A Sr Lien......... 6.00 07/01/26 4,924,750
- -------- ----------
15,000 15,051,400
- -------- ----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 6
DEAN WITTER NEW YORK TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS June 30, 1996 (unaudited) continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- --------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Refunded (6.8%)
$ 5,000 New York Local Government Assistance Corporation, Ser 1991 B............ 7.50 % 04/01/01++ $ 5,681,850
3,000 New York State Dormitory Authority, Suffolk County Judicial Ser 1986
(ETM).................................................................. 7.375 07/01/16 3,474,120
4,000 New York State Medical Care Facilities Finance Agency, St
Lukes-Roosevelt Hospital Center-FHA Ins Mtge 1989 Ser B................ 7.40 02/15/00++ 4,440,640
- -------- ----------
12,000 13,596,610
- -------- ----------
189,176 TOTAL NEW YORK TAX-EXEMPT MUNICIPAL BONDS (Identified Cost $177,837,270)......................... 185,888,466
- -------- ----------
SHORT-TERM NEW YORK TAX-EXEMPT MUNICIPAL OBLIGATIONS (5.8%)
1,100 Nassau County Industrial Development Agency, Cold Spring Harbor
Laboratory Ser 1993 (Demand 07/01/96).................................. 3.45* 07/01/23 1,100,000
1,400 New York City Industrial Development Agency, National Audubon Society
Inc Ser 1989 (Demand 07/01/96)......................................... 3.45* 12/01/14 1,400,000
5,500 New York State Dormitory Authority, Oxford University Press Inc Ser 1993
(Demand 07/01/96)...................................................... 3.80* 07/01/23 5,500,000
3,700 Syracuse Industrial Development Agency, Syracuse University Eggers Hall
Ser 1993 (Demand 07/01/96)............................................. 3.45* 03/01/23 3,700,000
- -------- ----------
11,700 TOTAL SHORT-TERM NEW YORK TAX-EXEMPT MUNICIPAL OBLIGATIONS
- -------- (Identified Cost $11,700,000).................................................................... 11,700,000
----------
$200,876 TOTAL INVESTMENTS (Identified Cost $189,537,270) (a).................................... 98.3% 197,588,466
========
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES............................................ 1.7 3,486,427
---- ----------
NET ASSETS............................................................................... 100.0% $201,074,893
==== ==========
</TABLE>
- ---------------------
AMT Alternative Minimum Tax.
ETM Escrowed to Maturity.
++ Prerefunded to call date shown.
* Current coupon of variable rate security.
(a) The aggregate cost for federal income tax purposes approximates
identified cost. The aggregate gross unrealized appreciation was
$10,473,972 and the aggregate gross unrealized depreciation was
$2,422,776, resulting in net unrealized appreciation of
$8,051,196.
Bond Insurance:
AMBAC AMBAC Indemnity Corporation.
CAPMAC Capital Markets Assurance Corporation.
FGIC Financial Guaranty Insurance Company.
FSA Financial Security Assurance Inc.
MBIA Municipal Bond Investors Assurance Corporation.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 7
DEAN WITTER NEW YORK TAX-FREE INCOME FUND
FINANCIAL STATEMENTS
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996 (unaudited)
ASSETS:
Investments in securities, at value
(identified cost $189,537,270)....................................... $197,588,466
Cash.................................................................. 321,335
Receivable for:
Interest.......................................................... 3,438,928
Shares of beneficial interest sold................................ 152,188
Prepaid expenses...................................................... 37,197
----------
TOTAL ASSETS...................................................... 201,538,114
----------
LIABILITIES:
Payable for:
Plan of distribution fee.......................................... 122,677
Shares of beneficial interest repurchased......................... 109,586
Investment management fee......................................... 89,963
Dividends to shareholders......................................... 49,976
Accrued expenses...................................................... 91,019
----------
TOTAL LIABILITIES................................................. 463,221
----------
NET ASSETS:
Paid-in-capital....................................................... 193,970,606
Net unrealized appreciation........................................... 8,051,196
Accumulated undistributed net investment income....................... 42,652
Accumulated net realized loss......................................... (989,561)
----------
NET ASSETS........................................................ $201,074,893
==========
NET ASSET VALUE PER SHARE
17,550,412 shares outstanding
(unlimited shares authorized of $.01 par value)...................... $11.46
=====
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 8
DEAN WITTER NEW YORK TAX-FREE INCOME FUND
FINANCIAL STATEMENTS, continued
<TABLE>
<S> <C>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996 (unaudited)
NET INVESTMENT INCOME:
INTEREST INCOME........................................................ $ 6,201,066
---------
EXPENSES
Plan of distribution fee............................................... 774,574
Investment management fee.............................................. 568,021
Transfer agent fees and expenses....................................... 38,984
Professional fees...................................................... 26,274
Shareholder reports and notices........................................ 25,501
Trustees' fees and expenses............................................ 10,912
Custodian fees......................................................... 6,008
Registration fees...................................................... 1,720
Other.................................................................. 6,871
---------
TOTAL EXPENSES BEFORE EXPENSE OFFSET............................... 1,458,865
LESS: EXPENSE OFFSET............................................... (5,997)
---------
TOTAL EXPENSES AFTER EXPENSE OFFSET................................ 1,452,868
---------
NET INVESTMENT INCOME.............................................. 4,748,198
---------
NET REALIZED AND UNREALIZED LOSS:
Net realized loss...................................................... (989,594)
Net change in unrealized appreciation.................................. (7,377,642)
---------
NET LOSS........................................................... (8,367,236)
---------
NET DECREASE........................................................... $(3,619,038)
=========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 9
DEAN WITTER NEW YORK TAX-FREE INCOME FUND
FINANCIAL STATEMENTS, continued
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
<S> <C> <C>
FOR THE SIX
MONTHS ENDED FOR THE YEAR
JUNE 30, ENDED
1996 DECEMBER 31, 1995
- -------------------------------------------------------------------------------------------
(unaudited)
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income............................... $ 4,748,198 $ 10,093,730
Net realized gain (loss)............................ (989,594) 2,568,550
Net change in unrealized appreciation............... (7,377,642) 20,081,778
------------ ------------
NET INCREASE (DECREASE)......................... (3,619,038) 32,744,058
------------ ------------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net investment income............................... (4,758,417) (10,054,862)
Net realized gain................................... (656,506) (1,424,236)
------------ ------------
TOTAL........................................... (5,414,923) (11,479,098)
------------ ------------
Net decrease from transactions in shares of
beneficial interest................................ (6,509,188) (11,693,907)
------------ ------------
TOTAL INCREASE (DECREASE)....................... (15,543,149) 9,571,053
NET ASSETS:
Beginning of period................................. 216,618,042 207,046,989
------------ ------------
END OF PERIOD
(Including undistributed net investment income
of $42,652 and $52,897, respectively)........... $201,074,893 $ 216,618,042
============= ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 10
DEAN WITTER NEW YORK TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS June 30, 1996 (unaudited)
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter New York Tax-Free Income Fund (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 to
provide a high level of current income which is exempt from federal, New York
State and New York City income tax, consistent with the preservation of capital.
The Fund was organized as a Massachusetts business trust on January 17, 1985 and
commenced operations on April 25, 1985.
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 -- Portfolio securities are valued for the Fund by
an outside independent pricing service approved by the Trustees. The pricing
service has informed the Fund that in valuing the Fund's portfolio securities,
it uses both a computerized 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. 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.
The Fund amortizes premiums and accretes discounts 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 and nontaxable income to its
shareholders. Accordingly, no federal income tax provision is required.
<PAGE> 11
DEAN WITTER NEW YORK TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS June 30, 1996 (unaudited) continued
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 Dean Witter InterCapital
Inc. (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 as of the close of each
business day: 0.55% to the portion of daily net assets not exceeding $500
million and 0.525% to the portion of daily net assets exceeding $500 million.
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% 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
<PAGE> 12
DEAN WITTER NEW YORK TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS June 30, 1996 (unaudited) continued
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, account executives of Dean Witter
Reynolds Inc., an affiliate of the Investment Manager and Distributor, and other
employees and 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 by the
Distributor.
Provided that the Plan continues in effect, any cumulative expenses incurred 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,
1996, it received approximately $99,000 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
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the six months ended June 30, 1996 aggregated
$5,352,700 and $21,381,013, respectively.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At June 30, 1996, the Fund had
transfer agent fees and expenses payable of approximately $8,000.
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, 1996
included in Trustees' fees and expenses in the Statement of Operations amounted
to $2,300. At June 30, 1996, the Fund had an accrued pension liability of
$49,078 which is included in accrued expenses in the Statement of Assets and
Liabilities.
<PAGE> 13
DEAN WITTER NEW YORK TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS June 30, 1996 (unaudited) continued
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, 1996 DECEMBER 31, 1995
--------------------------- ---------------------------
(unaudited)
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold.......................................................... 589,505 $ 6,915,355 1,646,704 $ 18,911,488
Reinvestment of dividends and distributions................... 271,279 3,144,239 580,096 6,745,389
-------- ---------- -------- ----------
860,784 10,059,594 2,226,800 25,656,877
Repurchased................................................... (1,423,942) (16,568,782) (3,239,090) (37,350,784)
-------- ---------- -------- ----------
Net decrease.................................................. (563,158) $ (6,509,188) (1,012,290) $(11,693,907)
======== ========== ======== ==========
</TABLE>
6. FEDERAL INCOME TAX STATUS
During the year ended December 31, 1995, the Fund utilized its net capital loss
carryover of approximately $488,000.
<PAGE> 14
DEAN WITTER NEW YORK TAX-FREE INCOME FUND
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 FOR THE YEAR ENDED DECEMBER 31
JUNE 30, -------------------------------------------
1996 1995 1994 1993
- ----------------------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period............................ $11.96 $10.83 $12.50 $11.98
-------- ----- ----- -----
Net investment income........................................... 0.27 0.55 0.57 0.65
Net realized and unrealized gain (loss)......................... (0.46) 1.20 (1.51) 0.72
-------- ----- ----- -----
Total from investment operations................................ (0.19) 1.75 (0.94) 1.37
-------- ----- ----- -----
Less dividends and distributions from:
Net investment income........................................ (0.27) (0.54) (0.57) (0.65)
Net realized gain............................................ (0.04) (0.08) (0.16) (0.20)
-------- ----- ----- -----
Total dividends and distributions............................... (0.31) (0.62) (0.73) (0.85)
-------- ----- ----- -----
Net asset value, end of period.................................. $11.46 $11.96 $10.83 $12.50
======== ===== ===== =====
TOTAL INVESTMENT RETURN+........................................ (1.75)%(1) 16.59% (7.74)% 11.72%
RATIOS TO AVERAGE NET ASSETS:
Expenses........................................................ 1.41%(2)(3) 1.42%(3) 1.40% 1.27%
Net investment income........................................... 4.60%(2) 4.70% 4.96% 5.20%
SUPPLEMENTAL DATA:
Net assets, end of period, in millions.......................... $201 $217 $207 $246
Portfolio turnover rate......................................... 3%(1) 17% 10% 25%
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31
-----------------------------
1992 1991
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period............................ $11.68 $11.00
----- -----
Net investment income........................................... 0.65 0.68
Net realized and unrealized gain (loss)......................... 0.34 0.70
----- -----
Total from investment operations................................ 0.99 1.38
----- -----
Less dividends and distributions from:
Net investment income........................................ (0.65) (0.68)
Net realized gain............................................ (0.04) (0.02)
----- -----
Total dividends and distributions............................... (0.69) (0.70)
----- -----
Net asset value, end of period.................................. $11.98 $11.68
===== =====
TOTAL INVESTMENT RETURN+........................................ 8.70% 12.94%
RATIOS TO AVERAGE NET ASSETS:
Expenses........................................................ 1.40% 1.32%
Net investment income........................................... 5.48% 6.00%
SUPPLEMENTAL DATA:
Net assets, end of period, in millions.......................... $209 $182
Portfolio turnover rate......................................... 16% 17%
</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.
(3) The above annualized expense ratio would have been 1.41% after expense
offset.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 15
(This Page Intentionally Left Blank)
<PAGE> 16
THRUSTEES
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
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
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 directors,
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
NEW YORK
TAX-FREE
INCOME FUND
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Semiannual Report
June 30, 1996
