<PAGE>
DEAN WITTER CONVERTIBLE SECURITIES TRUST TWO WORLD TRADE CENTER, NEW YORK, NEW
YORK 10048
LETTER TO THE SHAREHOLDERS SEPTEMBER 30, 1996
DEAR SHAREHOLDER:
The twelve month period ended September 30, 1996 began with market uncertainties
concerning the strength of the economy, the direction of interest rates and the
possible threat of inflation. However, by the mid-point of the fiscal year, the
U.S. stock market, led by the technology sector, began one of its strongest
upward climbs in recent years.
PERFORMANCE
For the fiscal year ended September 30, 1996, Dean Witter Convertible Securities
Trust provided a total return of 14.70 percent, compared to 14.01 percent for
the Goldman Sachs Convertible 100 Index and 12.92 percent for the average fund
in the Lipper Convertible Securities Funds category. During the period under
review, the Fund's quarterly income dividend was increased from $0.12 per share
to $0.13 per share. The Fund paid dividends totaling $0.619 during the period,
including a extra dividend of $0.119 per share paid on December 30, 1995.
Although the Fund outperformed its peer group, convertibles as a group lagged
the overall equity market. This can be attributed to the fact that the
convertible universe consists of many small-cap companies and, during the period
under review, large-cap stocks drove the performance of the overall stock
market. This underperformance to the overall equity market can be expected
during very strong markets. However, convertibles performed much better than the
fixed-income markets during the period.
The accompanying chart illustrates the performance of a $10,000 investment in
the Fund for the ten-year period ended September 30, 1996, versus the
performance of similar investments in the issues represented by the Goldman
Sachs Convertible 100 Index and in the funds that make up the Lipper Convertible
Securities Funds Average.
INVESTMENT STRATEGY
During the past year, the Fund focused on reducing volatility by diversifying
over a wide range of industries including health care
<PAGE>
DEAN WITTER CONVERTIBLE SECURITIES TRUST
LETTER TO THE SHAREHOLDERS SEPTEMBER 30, 1996, CONTINUED
(9.1 percent), real estate investment trusts (7.6 percent), retailers (5.1
percent), and cable/cellular providers (4.4 percent). The Fund also emphasized
convertible issues with short maturities and long call protection. We believe
that the securities chosen for the Fund have attractive risk/reward
characteristics such as relatively high current yields, which would support the
price of the convertible issues if the underlying stocks declined, and
reasonable conversion premiums which would ensure participation in any
appreciation of the underlying stocks. While this strategy should prove
beneficial in a declining market, it can result in underperformance in very
strong markets.
LOOKING AHEAD
The Fund will continue to utilize a
value-oriented, bottom-up approach to
evaluating companies and their
investment merits, emphasizing
companies and industries with strong
underlying fundamentals and solid
long-term growth prospects. In
selecting securities for the portfolio,
the Fund's portfolio manager focuses on
underfollowed, small- and
medium-capitalization companies that
issue convertible securities. We
believe these issues may offer
significant price participation in
rising equity markets while providing
some downside protection in declining
markets.
[GRAPHIC]
As the convertible securities market
continues to grow, we believe this
under-utilized asset class will offer a
wide variety of investment
opportunities, providing investors with
current income and capital appreciation
potential.
<PAGE>
DEAN WITTER CONVERTIBLE SECURITIES TRUST
LETTER TO THE SHAREHOLDERS SEPTEMBER 30, 1996, CONTINUED
We appreciate your continued support of Dean Witter Convertible Securities Trust
and look forward to continuing to serve your investment needs.
Very truly yours,
[SIGNATURE]
CHARLES A. FIUMEFREDDO
CHAIRMAN OF THE BOARD
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
DEAN WITTER CONVERTIBLE SECURITIES TRUST
GROWTH OF $10,000
<TABLE>
<CAPTION>
DATE TOTAL GOLDMAN SACHS LIPPER
-------------------- ---------- -------------- ----------
<S> <C> <C> <C>
September 30, 1986 $10,000 $10,000 $10,000
September 30, 1987 $11,921 $12,231 $11,656
September 30, 1988 $ 9,561 $11,396 $10,907
September 30, 1989 $11,493 $12,780 $12,846
September 30, 1990 $ 9,547 $10,846 $11,419
September 30, 1991 $11,354 $13,631 $14,526
September 30, 1992 $12,000 $16,085 $16,677
September 30, 1993 $14,787 $19,053 $20,206
September 30, 1994 $15,528 $19,545 $20,264
September 30, 1995 $17,653 $23,233 $23,231
September 30, 1996 $20,249(3) $26,487 $26,232
</TABLE>
AVERAGE ANNUAL TOTAL RETURN (Fund)
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS
--------- --------- ---------
<S> <C> <C>
14.70(1) 12.27(1) 7.31(1)
9.70(2) 12.01(2) 7.31(2)
</TABLE>
- -- Fund
- -- Goldman Sachs (4)
- -- Lipper (5)
Past performance is not predictive of future returns.
- -------------------
(1) Figure shown assumes reinvestment of all distributions and does not reflect
the deduction of any sales charges.
(2) Figure shown assumes reinvestment of all distributions and the deduction of
the maximum applicable contingent deferred sales charge (CDSC) (1 year-5%, 5
years-2%, ten years-0%). See the Fund's current prospectus for complete
details on fees and sales charges.
(3) Closing value assuming a complete redemption on September 30, 1996.
(4) The Goldman Sachs Convertible 100 Index tracks the performance of 100
equally weighted convertible issues with market capitalizations of at least
$100 million. The index does not include any expenses, fees or charges. The
Index is unmanaged and should not be considered an investment.
(5) The Lipper Convertible Funds Average tracks the performance of the funds
which primarily invest in convertible bonds and convertible preferred shares
as reported by Lipper Analytical Services.
<PAGE>
DEAN WITTER CONVERTIBLE SECURITIES TRUST
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CORPORATE BONDS (59.4%)
CONVERTIBLE BONDS (58.7%)
AUTO PARTS (0.1%)
$ 190 Magna International, Inc. (Canada).......... 5.00 % 10/15/02 $ 202,918
---------------
BANKING (0.2%)
340 Banco de Galicia y Buenos Aires S.A.
(Argentina)................................. 7.00 08/01/02 335,288
130 Bangkok Bank Public Co. (Hong Kong)......... 3.25 03/03/04 144,300
---------------
479,588
---------------
BIOTECHNOLOGY (0.9%)
2,050 Nabi, Inc. - 144A**......................... 6.50 02/01/03 2,207,542
---------------
BROADCAST MEDIA (0.9%)
4,000 Jacor Communications, Inc................... 0.00 06/12/11 2,010,000
---------------
BUILDING MATERIALS (0.1%)
220 Cemex S.A. (Mexico)......................... 4.25 11/01/97 211,475
---------------
CABLE/CELLULAR (3.7%)
210 Comcast Corp................................ 3.375 09/09/05 181,463
4,130 Comcast Corp................................ 1.125 04/15/07 1,890,797
4,000 Tele-Communications International,
Inc......................................... 4.50 02/15/06 3,210,000
10,270 U.S. Celluar Corp........................... 0.00 06/15/15 3,414,775
---------------
8,697,035
---------------
CHEMICALS (2.4%)
125 Formosa Chem & Fibre Corp. (Taiwan)......... 1.75 07/19/01 131,094
12,500 RPM, Inc.................................... 0.00 09/30/12 5,546,875
---------------
5,677,969
---------------
COMPUTER SERVICES (0.1%)
250 Automatic Data Processing, Inc.............. 0.00 02/20/12 141,442
---------------
COMPUTER SOFTWARE (0.1%)
295 Softkey International Inc. - 144A**......... 5.50 11/01/00 236,457
---------------
CONGLOMERATES (0.9%)
1,500 Alfa S.A. de C.V. (Mexico).................. 8.00 09/15/00 1,605,000
300 Alfa S.A. de C.V. (Mexico) - 144A**......... 8.00 09/15/00 321,000
100 Renong Berhad (Malaysia) - 144A**........... 2.00 07/15/05 100,750
---------------
2,026,750
---------------
CONSTRUCTION PLANT & EQUIPMENT (0.0%)
125 Kumagai Gumi Finance (Hong Kong)............ 4.875 12/08/98 115,781
---------------
CONSUMER PRODUCTS (0.1%)
150 President Enterprises Corp. (Taiwan)........ 0.00 07/22/01 233,250
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER CONVERTIBLE SECURITIES TRUST
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996, CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
DRUGS (1.4%)
$ 3,075 Bindley Western Industries, Inc............. 6.50 % 10/01/02 $ 3,198,000
240 Elan International Finance Ltd.............. 0.00 10/16/12 155,954
---------------
3,353,954
---------------
ELECTRONICS & ELECTRICAL (1.5%)
120 Johnson Electric Holdings, Ltd. (Hong
Kong)....................................... 4.50 11/05/00 110,100
850 Recognition Equipment Inc................... 7.25 04/15/11 791,350
3,000 Richey Electronics Inc...................... 7.00 03/01/06 2,702,670
---------------
3,604,120
---------------
ELECTRONICS - SEMICONDUCTORS (0.1%)
90 Integrated Device Technology................ 5.50 06/01/02 71,787
185 Xilinx Inc. - 144A**........................ 5.25 11/01/02 176,486
---------------
248,273
---------------
ENTERTAINMENT/GAMING (1.4%)
1,353 Argosy Gaming Co............................ 12.00 06/01/01 1,190,640
2,050 Savoy Pictures Entertainment, Inc........... 7.00 07/01/03 1,476,000
170 Technology Resources Industries Berhad
(Malaysia).................................. 2.75 11/28/04 191,250
500 WMS Industries, Inc......................... 5.75 11/30/02 525,045
---------------
3,382,935
---------------
FINANCIAL SERVICES (0.9%)
2,000 AT&T Latin American Equity - 144A**......... 0.00 03/30/99 1,750,000
175 HSH Overseas Finance Ltd. (Cayman
Islands).................................... 5.00 01/06/01 196,437
200 Lend Lease Finance International Ltd.
(Australia)................................. 4.75 06/01/03 271,500
---------------
2,217,937
---------------
FOODS (0.0%)
80 Grand Metropolitan PLC (United Kingdom)..... 6.50 01/31/00 92,700
---------------
FOREIGN GOVERNMENT (0.9%)
2,000 Republic of Italy........................... 5.00 06/28/01 2,017,500
---------------
HEALTHCARE (8.6%)
2,500 ARV Assisted Living, Inc. - 144A**.......... 6.75 04/01/06 2,462,475
3,450 Beverly Enterprises, Inc.................... 5.50 08/01/18 3,297,613
200 Integrated Health Services, Inc............. 5.75 01/01/01 200,478
2,000 Integrated Health Services, Inc............. 6.00 01/01/03 1,979,680
90 Multicare Companies, Inc.................... 7.00 03/15/03 119,925
3,155 Quantum Health Resources Inc................ 4.75 10/01/00 2,918,375
2,000 Rotech Medical Corp. - 144A**............... 5.25 06/01/03 1,725,000
3,000 Tenet Healthcare Corp....................... 6.00 12/01/05 3,180,060
4,000 Vivra, Inc. - 144A**........................ 5.00 07/01/01 4,245,400
---------------
20,129,006
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER CONVERTIBLE SECURITIES TRUST
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996, CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
HEALTHCARE - MISCELLANEOUS (1.2%)
$ 3,800 Pharmaceutical Marketing Services, Inc...... 6.25 % 02/01/03 $ 2,843,502
---------------
HOME BUILDING (1.1%)
3,015 U.S. Home Corp.............................. 4.875 11/01/05 2,460,994
---------------
HOTELS/MOTELS (1.8%)
1,000 Pailburg International Finance (Hong
Kong)....................................... 3.50 02/06/01 1,002,500
225 Shangri-La Asia Capital (Hong Kong)......... 2.875 12/16/00 188,156
3,400 Sholodge Inc................................ 7.50 05/01/04 3,076,966
---------------
4,267,622
---------------
INDUSTRIALS (1.4%)
120 Banpu PCL (Thailand)........................ 3.50 08/25/04 144,000
100 Sampo Corp. (Taiwan)........................ 2.625 11/23/01 114,375
2,575 Trimas Corp................................. 5.00 08/01/03 2,833,890
100 YTL Corp. Berhad (Malaysia) - 144A**........ 0.00 08/15/02 139,500
---------------
3,231,765
---------------
INSURANCE (1.7%)
75 Aegon NV (Netherlands) - 144A**............. 4.75 11/01/04 132,750
3,000 CII Financial, Inc.......................... 7.50 09/15/01 2,712,750
1,000 Pioneer FinanciaI Services, Inc............. 6.50 04/01/03 1,027,700
200 USF&G Corp.................................. 0.00 03/03/09 126,750
---------------
3,999,950
---------------
LEISURE (2.6%)
20,995 Coleman Worldwide Corp...................... 0.00 05/27/13 6,036,062
---------------
MACHINERY (1.3%)
1,500 Cooper Industries, Inc...................... 7.05 01/01/15 1,645,980
1,500 Robbins & Meyers, Inc....................... 6.50 09/01/03 1,524,375
---------------
3,170,355
---------------
MEDIA GROUP (2.7%)
2,055 All American Communications Inc............. 6.50 10/01/03 2,013,900
395 News America Holdings, Inc.................. 0.00 03/11/13 177,750
4,065 Scandinavian Broadcasting (Luxembourg)...... 7.25 08/01/05 4,075,162
---------------
6,266,812
---------------
MEDICAL PRODUCTS & SUPPLIES (0.2%)
500 Phoenix Shannon PLC - 144A**................ 9.50 11/01/00 385,625
---------------
METALS (0.4%)
1,250 Crown Resources Corp........................ 5.75 08/27/01 1,000,000
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER CONVERTIBLE SECURITIES TRUST
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996, CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
OFFICE EQUIPMENT & SUPPLIES (1.8%)
$ 1,000 U.S. Office Products Co..................... 5.50 % 05/15/03 $ 948,750
3,500 U.S. Office Products Co. - 144A**........... 5.50 05/15/03 3,290,000
---------------
4,238,750
---------------
OIL & GAS (0.1%)
145 Apache Corp................................. 6.00 01/15/02 164,213
---------------
PAPER & FOREST PRODUCTS (0.2%)
70 PT International Indorayon Utama
(Indonesia)................................. 5.50 10/01/02 80,745
120 Riverwood International Corp................ 6.75 09/15/03 138,300
350 Sappi BVI Finance Ltd. (South Africa) -
144A**...................................... 7.50 08/01/02 322,875
---------------
541,920
---------------
POLLUTION CONTROL (0.1%)
85 Laidlaw Inc. (Canada) - 144A**.............. 6.00 01/15/99 110,118
213 WMX Technologies, Inc....................... 2.00 01/24/05 197,157
---------------
307,275
---------------
PUBLISHING (2.3%)
10,000 Hollinger, Inc. (Canada).................... 0.00 10/05/13 3,337,500
45 Nelson (Thomas), Inc. - 144A**.............. 5.75 11/30/99 42,165
90 Scholastic Corp. - 144A**................... 5.00 08/15/05 101,186
5,000 Time Warner, Inc............................ 0.00 12/17/12 1,839,250
---------------
5,320,101
---------------
REAL ESTATE (0.3%)
80 Guangzhou Investment Co. (Hong Kong)........ 4.50 10/08/98 84,600
200 HD Finance Cayman Ltd. (Cayman Islands) -
144A**...................................... 6.75 06/01/00 229,500
290 New World Development (Hong Kong)........... 4.375 12/11/00 330,238
---------------
644,338
---------------
REAL ESTATE INVESTMENT TRUST (4.2%)
2,850 Alexander Haagen Properties, Inc. (Series
A).......................................... 7.50 01/15/01 2,597,063
1,850 Camden Property Trust....................... 7.33 04/01/01 1,868,500
40 Liberty Property Trust...................... 8.00 07/01/01 43,500
2,750 Mid Atlantic Realty Trust................... 7.625 09/15/03 2,586,293
2,720 Pacific Gulf Properties Inc................. 8.375 02/15/01 2,720,000
---------------
9,815,356
---------------
RESTAURANTS (1.2%)
3,375 TPI Enterprises, Inc........................ 8.25 07/15/02 2,868,750
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER CONVERTIBLE SECURITIES TRUST
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996, CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
RETAIL (4.9%)
$ 2,000 Charming Shoppes, Inc....................... 7.50 % 07/15/06 $ 2,189,340
100 Federated Department Stores, Inc............ 5.00 10/01/03 111,688
1,750 Home Depot, Inc............................. 3.25 10/01/01 1,778,438
3,700 Men's Wearhouse, Inc. (The)................. 5.25 03/01/03 3,552,000
3,145 Office Depot, Inc........................... 0.00 11/01/08 1,914,456
75 Pep Boys-Manny, Moe & Jack.................. 4.00 09/01/99 78,265
2,000 Sports & Recreation Inc..................... 4.25 11/01/00 1,500,000
275 Staples, Inc. - 144A**...................... 4.50 10/01/00 315,098
---------------
11,439,285
---------------
STEEL (2.2%)
1,275 Nippon Denro Ltd. (India) - 144A**.......... 3.00 04/01/01 605,625
3,900 Quanex Corp................................. 6.88 06/30/07 3,948,750
700 Sahaviriya Steel Industries (Thailand) -
144A**...................................... 3.50 07/26/05 497,000
---------------
5,051,375
---------------
TECHNOLOGY (1.3%)
130 EMC Corp.................................... 4.25 01/01/01 155,401
2,000 Park Electrochemical Corp................... 5.50 03/01/06 1,642,500
150 Storage Technology Corp..................... 8.00 05/31/15 176,250
135 Unisys Corp................................. 8.25 08/01/00 125,550
750 Unisys Corp................................. 8.25 03/15/06 836,250
---------------
2,935,951
---------------
TELECOMMUNICATIONS (0.8%)
137 General Instrument Corp..................... 5.00 06/15/00 150,096
1,750 SA Telecommunications Inc. - 144A**......... 10.00 08/15/06 1,837,500
---------------
1,987,596
---------------
TEXTILES (0.1%)
200 Far Eastern Textile (Taiwan)................ 4.00 10/07/06 236,750
---------------
TRANSPORTATION - INTERNATIONAL (0.5%)
1,651 Consorcio G Grupo Dina S.A. de C.V.
(Mexico).................................... 8.00 08/08/04 1,122,680
---------------
TOTAL CONVERTIBLE BONDS
(IDENTIFIED COST $138,135,816)....................................... 137,623,659
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER CONVERTIBLE SECURITIES TRUST
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996, CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
NON-CONVERTIBLE BONDS (0.7%)
OIL & GAS (0.1%)
$ 70 SFP Pipeline Holdings, Inc.................. 11.16 % 08/15/10 $ 85,400
---------------
RESTAURANTS (0.6%)
2,500 Flagstar Corp............................... 11.375 09/15/03 1,512,500
---------------
TOTAL NON-CONVERTIBLE BONDS
(IDENTIFIED COST $2,541,700)......................................... 1,597,900
---------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $140,677,516)....................................... 139,221,559
---------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------------------------------------------
<C> <S> <C>
CONVERTIBLE PREFERRED STOCKS (18.5%)
AUTO PARTS (0.4%)
1,300 Federal Mogul Corp. (Series D) $3.875 - 144A**.......................... 79,300
66,600 Mascotech, Inc. $1.20................................................... 949,050
---------------
1,028,350
---------------
BANKS (0.8%)
40,000 BCP International Bank, Ltd. (Series A) (Portugal) $4.00................ 1,985,000
---------------
BIOTECHNOLOGY (0.4%)
63,500 Gensia, Inc. $3.75 - 144A**............................................. 1,016,000
---------------
CABLE/CELLULAR (0.5%)
30,000 TCI Communications, Inc. (Series A) $2.125.............................. 1,196,250
---------------
CHEMICALS (0.1%)
1,700 Occidental Petroleum Corp. $3.875 - 144A**.............................. 96,475
3,300 Occidental Petroleum Corp. (Series A) $3.00............................. 193,875
---------------
290,350
---------------
FINANCIAL SERVICES (0.1%)
1,700 Advanta Corp. $2.50..................................................... 72,250
2,000 Merrill Lynch & Co., Inc. $3.12......................................... 122,000
---------------
194,250
---------------
FOODS (0.5%)
30,000 Chiquita Brands International, Inc. (Series A) $2.875................... 1,271,250
---------------
INSURANCE (2.0%)
40,000 American Bankers Insurance Group, Inc. (Series B) $3.125................ 2,360,000
40,000 PennCorp Financial Group, Inc. $3.50 - 144A**........................... 2,280,000
---------------
4,640,000
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER CONVERTIBLE SECURITIES TRUST
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------------------------------------------
<C> <S> <C>
MEDIA GROUP (1.0%)
240,000 Triathlon Broadcasting Co. $0.95........................................ $ 2,460,000
---------------
OIL & GAS (3.0%)
120,000 Callon Petroleum Co. (Series A) $2.125.................................. 4,080,000
40,000 ENRON Corp. $1.36....................................................... 950,000
30,000 NorAm Financing I $3.125................................................ 1,841,250
---------------
6,871,250
---------------
PAPER & FOREST PRODUCTS (0.1%)
2,200 International Paper Capital Trust $2.625 - 144A**....................... 105,325
---------------
POLLUTION CONTROL (0.1%)
4,000 Browning-Ferris Industries, Inc. $2.58.................................. 114,000
---------------
PUBLISHING (1.5%)
27,000 Golden Books Financing Trust $4.375 - 144A**............................ 1,520,451
165,000 Hollinger International, Inc. $0.951.................................... 1,835,625
1,400 Houghton Mifflin Co. $4.08.............................................. 135,800
---------------
3,491,876
---------------
REAL ESTATE (0.8%)
35,000 Catellus Development Corp. (Series B) $3.625 - 144A**................... 1,903,125
---------------
REAL ESTATE INVESTMENT TRUST (1.7%)
151,100 FelCor Suite Hotels, Inc. (Series A) $1.95.............................. 3,928,600
---------------
STEEL (1.7%)
45,000 WHX Corp. (Series A) $3.25.............................................. 1,873,125
49,000 WHX Corp. (Series B) $3.75.............................................. 2,002,875
---------------
3,876,000
---------------
TELECOMMUNICATIONS (2.2%)
70,000 General Datacomm Industries, Inc. $2.25 - 144A**........................ 1,754,410
48,000 Globalstar Telecommunications $3.25 - 144A**............................ 2,280,000
35,000 Sprint Corp. $2.63...................................................... 1,225,000
---------------
5,259,410
---------------
TOYS (1.5%)
575,500 Tyco Toys, Inc. (Series C) $0.413....................................... 3,596,875
---------------
WHOLESALE DISTRIBUTOR (0.1%)
1,300 Alco Standard Corp. $5.04............................................... 118,300
---------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(IDENTIFIED COST $39,390,610)........................................... 43,346,211
---------------
COMMON STOCKS (7.3%)
AIR TRANSPORT (0.1%)
2,345 Delta Air Lines, Inc.................................................... 168,840
---------------
AUTO PARTS (0.5%)
79,200 Mascotech, Inc.......................................................... 1,128,600
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER CONVERTIBLE SECURITIES TRUST
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------------------------------------------
<C> <S> <C>
CABLE/CELLULAR (0.2%)
40,000 Centennial Cellular Corp................................................ $ 530,000
---------------
DRUGS (0.1%)
20,000 Bindley Western Industries, Inc......................................... 350,000
---------------
ENTERTAINMENT/GAMING (1.4%)
861,328 Alliance Gaming Corp.................................................... 3,229,980
---------------
HEALTHCARE (0.5%)
50,000 Integrated Health Services, Inc......................................... 1,262,500
---------------
MANUFACTURING (0.1%)
4,982 Fisher Scientific International, Inc.................................... 205,508
---------------
MEDICAL PRODUCTS & SUPPLIES (0.5%)
60,000 Neuromedical Systems, Inc.*............................................. 1,117,500
---------------
POLLUTION CONTROL (0.4%)
122,000 OHM Corp.*.............................................................. 960,750
---------------
REAL ESTATE INVESTMENT TRUST (1.7%)
75,000 American General Hospitality Corp....................................... 1,425,000
48,100 Avalon Properties, Inc.................................................. 1,118,325
30,000 Cali Realty Corp........................................................ 813,750
16,400 Urban Shopping Centers, Inc............................................. 399,750
---------------
3,756,825
---------------
RESTAURANTS (0.7%)
100,000 Brinker International, Inc.*............................................ 1,700,000
---------------
RETAIL (0.2%)
35,000 Michaels Stores, Inc.*.................................................. 507,500
---------------
TELECOMMUNICATIONS (0.6%)
30,000 BCE, Inc. (Canada)...................................................... 1,282,500
6,231 General Instrument Corp.*............................................... 154,217
---------------
1,436,717
---------------
TRANSPORTATION (0.3%)
40,000 Team Rental Group, Inc.*................................................ 730,000
---------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $16,332,011)........................................... 17,084,720
---------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF EXPIRATION
WARRANTS DATE VALUE
- ----------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
WARRANT (0.0%)
TELECOMMUNICATIONS
45,000 Audiovox Corp.* - 144A** (Identified Cost $0)............ 03/15/01 56,250
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER CONVERTIBLE SECURITIES TRUST
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996, CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
SHORT-TERM INVESTMENTS (10.5%)
COMMERCIAL PAPER (a) (5.5%)
AUTOMOTIVE - FINANCE (1.7%)
$ 3,900 Ford Motor Credit Co........................ 5.31 % 10/03/96.. $ 3,898,849
---------------
CHEMICALS (1.7%)
4,000 Du Pont (E.I.) de Nemours & Co., Inc........ 5.388 10/04/96.. 3,998,207
---------------
ENTERTAINMENT (2.1%)
5,000 Walt Disney Co.............................. 5.05 10/01/96.. 5,000,000
---------------
TOTAL COMMERCIAL PAPER
(AMORTIZED COST $12,897,056)......................................... 12,897,056
---------------
REPURCHASE AGREEMENT (5.0%)
11,682 The Bank of New York (dated 09/30/96;
proceeds $11,684,007; collateralized by
$11,670,451 U.S. Treasury Note 5.625% due
10/31/97 valued at $11,916,032) (Identified
Cost $11,682,384)........................... 5.00 10/01/96.. 11,682,384
---------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $24,579,440)........................................ 24,579,440
---------------
TOTAL INVESTMENTS
(IDENTIFIED COST $220,979,577) (B)....................................... 95.7% 224,288,180
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES........................... 4.3 10,046,026
----- ------------
NET ASSETS............................................................... 100.0% $234,334,206
----- ------------
----- ------------
<FN>
- ---------------------
* Non-income producing security.
** Resale is restricted to qualified institutional investors.
(a) Securities were purchased on a discount basis. The interest rates shown
have been adjusted to reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation was $11,991,694 and the
aggregate gross unrealized depreciation was $8,683,091, resulting in net
unrealized appreciation of $3,308,603.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER CONVERTIBLE SECURITIES TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1996
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $220,979,577)............................ $ 224,288,180
Cash........................................................ 9,812,251
Receivable for:
Interest................................................ 1,823,016
Investments sold........................................ 641,875
Shares of beneficial interest sold...................... 468,023
Dividends............................................... 295,102
Prepaid expenses............................................ 39,148
-------------
TOTAL ASSETS........................................... 237,367,595
-------------
LIABILITIES:
Payable for:
Investments purchased................................... 1,750,000
Shares of beneficial interest repurchased............... 727,233
Plan of distribution fee................................ 190,520
Investment management fee............................... 114,312
Dividends to shareholders............................... 107,695
Accrued expenses............................................ 143,629
-------------
TOTAL LIABILITIES...................................... 3,033,389
-------------
NET ASSETS:
Paid-in-capital............................................. 582,151,590
Net unrealized appreciation................................. 3,308,603
Accumulated undistributed net investment income............. 4,914,784
Accumulated net realized loss............................... (356,040,771)
-------------
NET ASSETS............................................. $ 234,334,206
-------------
-------------
NET ASSET VALUE PER SHARE,
18,422,346 SHARES OUTSTANDING (UNLIMITED SHARES AUTHORIZED
OF $.01 PAR VALUE)........................................
$12.72
-------------
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER CONVERTIBLE SECURITIES TRUST
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1996
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Interest.................................................... $10,804,205
Dividends (net of $8,958 foreign withholding tax)........... 2,916,746
-----------
TOTAL INCOME........................................... 13,720,951
-----------
EXPENSES
Plan of distribution fee.................................... 2,057,104
Investment management fee................................... 1,234,262
Transfer agent fees and expenses............................ 373,604
Professional fees........................................... 81,464
Shareholder reports and notices............................. 53,986
Custodian fees.............................................. 27,197
Registration fees........................................... 24,311
Trustees' fees and expenses................................. 16,451
Other....................................................... 18,564
-----------
TOTAL EXPENSES......................................... 3,886,943
-----------
NET INVESTMENT INCOME.................................. 9,834,008
-----------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain........................................... 13,199,408
Net change in unrealized appreciation....................... 5,765,842
-----------
NET GAIN............................................... 18,965,250
-----------
NET INCREASE................................................ $28,799,258
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER CONVERTIBLE SECURITIES TRUST
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE YEAR ENDED
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income....................................... $ 9,834,008 $ 9,380,335
Net realized gain........................................... 13,199,408 10,976,243
Net change in unrealized appreciation....................... 5,765,842 2,262,729
------------------ ------------------
NET INCREASE........................................... 28,799,258 22,619,307
Dividends from net investment income........................ (10,327,902) (8,166,179)
Net increase (decrease) from transactions in shares of
beneficial interest....................................... 30,464,485 (19,449,807)
------------------ ------------------
TOTAL INCREASE (DECREASE).............................. 48,935,841 (4,996,679)
NET ASSETS:
Beginning of period......................................... 185,398,365 190,395,044
------------------ ------------------
END OF PERIOD
(INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF
$4,914,784 AND $5,408,228, RESPECTIVELY)................ $234,334,206 $185,398,365
------------------ ------------------
------------------ ------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER CONVERTIBLE SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1996
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter Convertible 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 to
seek a high level of total return on its assets through a combination of current
income and capital appreciation. The Fund was organized as a Massachusetts
business trust on May 21, 1985 and commenced operations on October 31, 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 -- (1) an equity security listed or traded on the
New York or American Stock Exchange or other domestic or foreign exchange is
valued at its latest sale price on that exchange prior to the time when assets
are valued; if there were no sales that day, the security is valued at the
latest bid price (in cases where a security is traded on more than one exchange,
the security is valued on the exchange designated as the primary market by the
Trustees); (2) all other portfolio securities for which over-the-counter market
quotations are readily available are valued at the latest available bid price
prior to the time of valuation; (3) when market quotations are not readily
available, including circumstances under which it is determined by the
Investment Manager that sale and 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; (4) certain portfolio securities may be valued by an outside
pricing service approved by the Trustees. The pricing service utilizes 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 portfolio securities valued by such
pricing service; and (5) 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.
<PAGE>
DEAN WITTER CONVERTIBLE SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1996, CONTINUED
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. Dividend
income is recorded on the ex-dividend date. 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 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: 0.60% to the portion of daily net assets not exceeding $750
million; 0.55% to the portion of daily net assets exceeding $750 million but not
exceeding $1 billion; 0.50% to the portion of daily net assets exceeding $1
billion but not exceeding $1.5 billion; 0.475% to the portion of daily net
assets exceeding $1.5 billion but not exceeding $2 billion; 0.45% to the portion
of daily net assets exceeding $2 billion but not exceeding $3 billion; and
0.425% to the portion of daily net assets exceeding $3 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
<PAGE>
DEAN WITTER CONVERTIBLE SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1996, CONTINUED
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 1.0% 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 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 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 the 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, totaled
$71,800,910 at September 30,
<PAGE>
DEAN WITTER CONVERTIBLE SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1996, CONTINUED
1996. Of this amount, $1,471,908 represents excess distribution expenses of
TCW/DW Global Convertible Trust, the net assets of which were combined with
those of the Fund on December 22, 1995 pursuant to an Agreement and Plan of
Reorganization.
The Distributor has informed the Fund that for the year ended September 30,
1996, it received approximately $145,000 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 year ended September 30, 1996 aggregated
$309,357,627 and $305,835,298, respectively.
For the same period, the Fund incurred brokerage commissions of $11,922 with DWR
for portfolio transactions executed on behalf of the Fund.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At September 30, 1996, the Fund had
transfer agent fees and expenses payable of approximately $30,000.
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 year ended September 30, 1996
included in Trustees' fees and expenses in the Statement of Operations amounted
to $1,286. At September 30, 1996, the Fund had an accrued pension liability of
$49,151 which is included in accrued expenses in the Statement of Assets and
Liabilities.
<PAGE>
DEAN WITTER CONVERTIBLE SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1996, CONTINUED
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
---------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
Sold............................................................. 6,348,274 $ 78,466,531 2,692,941 $ 29,337,865
Reinvestment of dividends........................................ 715,417 8,632,934 648,602 6,920,932
Shares issued in connection with the acquisition of TCW/DW Global
Convertible Trust (Note 6)...................................... 1,665,682 19,179,898 -- --
----------- -------------- ----------- ------------
8,729,373 106,279,363 3,341,543 36,258,797
Repurchased...................................................... (6,193,018) (75,814,878) (5,171,631) (55,708,604)
----------- -------------- ----------- ------------
Net increase (decrease).......................................... 2,536,355 $ 30,464,485 (1,830,088) $(19,449,807)
----------- -------------- ----------- ------------
----------- -------------- ----------- ------------
</TABLE>
6. ACQUISITION OF TCW/DW GLOBAL CONVERTIBLE TRUST
As of the close of business on December 22, 1995, the Fund acquired all the net
assets of TCW/DW Global Convertible Trust ("Global Convertible") pursuant to a
plan of reorganization approved by the shareholders of Global Convertible on
December 19, 1995. The acquisition was accomplished by a tax-free exchange of
1,665,682 shares of the Fund at a net asset value of $11.52 for 1,811,960 shares
of Global Convertible. The net assets of the Fund and Global Convertible
immediately before the acquisition were $181,407,832 and $19,179,898,
respectively, including unrealized depreciation of $1,047,150 and distributions
in excess of net realized gains of $4,600. Immediately after the acquisition,
the combined net assets of the Fund amounted to $200,587,730.
7. FEDERAL INCOME TAX STATUS
During the year ended September 30, 1996, the Fund utilized approximately
$15,672,000 of its net capital loss carryover. At September 30, 1996, the Fund
had a net capital loss carryover of approximately $352,695,000 to offset future
capital gains to the extent provided by regulations through September 30 of the
following years:
<TABLE>
<CAPTION>
AMOUNTS IN THOUSANDS
- ---------------------------------------------
1997 1998 1999 2000 TOTAL
- -------- ------- ------- ------- --------
<S> <C> <C> <C> <C>
$207,480 $36,349 $46,135 $62,731 $352,695
- -------- ------- ------- ------- --------
- -------- ------- ------- ------- --------
</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 $2,373,000 during fiscal 1996.
As of September 30, 1996, the Fund had temporary book/tax differences primarily
attributable to post-October losses and capital loss deferrals on wash sales.
<PAGE>
DEAN WITTER CONVERTIBLE SECURITIES TRUST
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED SEPTEMBER 30
------------------------------------------------------
1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................. $ 11.67 $ 10.75 $ 10.62
------ ------ ------
Net investment income................................................. 0.55 0.60 0.42
Net realized and unrealized gain (loss)............................... 1.12 0.82 0.11
------ ------ ------
Total from investment operations...................................... 1.67 1.42 0.53
------ ------ ------
Less dividends and distributions from:
Net investment income............................................... (0.62) (0.50) (0.40)
Net realized gain................................................... -- -- --
------ ------ ------
Total dividends and distributions..................................... (0.62) (0.50) (0.40)
------ ------ ------
Net asset value, end of period........................................ $ 12.72 $ 11.67 $ 10.75
------ ------ ------
------ ------ ------
TOTAL INVESTMENT RETURN+.............................................. 14.70% 13.68% 5.02%
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 1.89% 1.96% 1.93%
Net investment income................................................. 4.78% 5.24% 3.68%
SUPPLEMENTAL DATA:
Net assets, end of period, in millions................................ $234 $185 $190
Portfolio turnover rate............................................... 171% 138% 184%
Average commission rate paid.......................................... $0.0581 -- --
<CAPTION>
1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................. $ 8.92 $ 8.67 $ 7.65
------ ----- -----
Net investment income................................................. 0.37 0.34 0.37
Net realized and unrealized gain (loss)............................... 1.67 0.15 1.05
------ ----- -----
Total from investment operations...................................... 2.04 0.49 1.42
------ ----- -----
Less dividends and distributions from:
Net investment income............................................... (0.34) (0.24) (0.40)
Net realized gain................................................... -- -- --
------ ----- -----
Total dividends and distributions..................................... (0.34) (0.24) (0.40)
------ ----- -----
Net asset value, end of period........................................ $ 10.62 $ 8.92 $ 8.67
------ ----- -----
------ ----- -----
TOTAL INVESTMENT RETURN+.............................................. 23.22% 5.69% 18.93%
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 1.93% 1.92% 1.92%
Net investment income................................................. 3.44% 3.43% 4.34%
SUPPLEMENTAL DATA:
Net assets, end of period, in millions................................ $208 $218 $297
Portfolio turnover rate............................................... 221% 145% 133%
Average commission rate paid.......................................... -- -- --
<CAPTION>
1990 1989 1988
- ------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................. $ 9.68 $ 8.63 $ 12.42
----- ----- ------
Net investment income................................................. 0.46 0.48 0.38
Net realized and unrealized gain (loss)............................... (2.06) 1.20 (2.87)
----- ----- ------
Total from investment operations...................................... (1.60) 1.68 (2.49)
----- ----- ------
Less dividends and distributions from:
Net investment income............................................... (0.43) (0.63) (0.23)
Net realized gain................................................... -- -- (1.07)
----- ----- ------
Total dividends and distributions..................................... (0.43) (0.63) (1.30)
----- ----- ------
Net asset value, end of period........................................ $ 7.65 $ 9.68 $ 8.63
----- ----- ------
----- ----- ------
TOTAL INVESTMENT RETURN+.............................................. (16.93)% 20.20% (19.79)%
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 1.88% 1.76% 1.79%
Net investment income................................................. 4.96% 4.93% 3.87%
SUPPLEMENTAL DATA:
Net assets, end of period, in millions................................ $413 $822 $1,073
Portfolio turnover rate............................................... 92% 167% 472%
Average commission rate paid.......................................... -- -- --
<CAPTION>
1987
- ------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................. $ 11.22
------
Net investment income................................................. 0.48
Net realized and unrealized gain (loss)............................... 1.59
------
Total from investment operations...................................... 2.07
------
Less dividends and distributions from:
Net investment income............................................... (0.46)
Net realized gain................................................... (0.41)
------
Total dividends and distributions..................................... (0.87)
------
Net asset value, end of period........................................ $ 12.42
------
------
TOTAL INVESTMENT RETURN+.............................................. 19.21%
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 1.62%
Net investment income................................................. 3.85%
SUPPLEMENTAL DATA:
Net assets, end of period, in millions................................ $2,029
Portfolio turnover rate............................................... 572%
Average commission rate paid.......................................... --
<FN>
- ---------------------
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER CONVERTIBLE SECURITIES TRUST
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND TRUSTEES
OF DEAN WITTER CONVERTIBLE SECURITIES TRUST
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Dean Witter Convertible Securities
Trust, (the "Fund") at September 30, 1996, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the ten years in the
period then ended, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
September 30, 1996, by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
NOVEMBER 8, 1996
- --------------------------------------------------------------------------------
1996 FEDERAL TAX NOTICE (UNAUDITED)
During the fiscal year ended September 30, 1996, 21.74% of the
income dividends qualified for dividends received deduction
available to corporations.
<PAGE>
[This page left blank intentionally.]
<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
Sheldon Curtis
Vice President, Secretary and General Counsel
Michael G. Knox
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
DEAN WITTER
CONVERTIBLE
SECURITIES
TRUST
[GRAPHIC]
ANNUAL REPORT
SEPTEMBER 30, 1996
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.
