<PAGE>
DEAN WITTER VALUE-ADDED MARKET SERIES - EQUITY PORTFOLIO TWO WORLD TRADE
CENTER, NEW YORK, NEW YORK 10048
LETTER TO THE SHAREHOLDERS DECEMBER 31, 1997
DEAR SHAREHOLDER:
The stock market, aided by low inflation, gained 10.58 percent for the six-month
period ended December 31, 1997. Long-term interest rates declined as an
anticipation of slowing world economic growth, outweighed concerns about
increasing wage inflation in the United States when the unemployment rate hit a
24-year low of 4.6 percent in November.
The second half of 1997 also saw a great degree of turmoil in world financial
markets, due primarily to the Asian currency crisis, that is likely to continue
to affect the U.S. economic outlook over the coming year. As momentum is lost
from foreign trade, domestic economic growth should moderate and the threat of
inflation should diminish. Thus, while market volatility is likely to remain
high in the near term, we believe slower but still moderate economic growth in
the United States will be positive for the financial markets as inflation should
remain low and the Federal Reserve Board is unlikely to raise interest rates.
PERFORMANCE AND PORTFOLIO
On July 28, 1997, Dean Witter Value-Added Market Series - Equity Portfolio began
offering four classes of shares -- A, B, C and D -- each with its own sales
charge and distribution fee structure. A revised prospectus, which includes
complete details regarding the Fund's conversion to multiple classes of shares,
was mailed to shareholders in midsummer.
During the six-month period ended December 31, 1997, the Fund's Class B shares
produced a total return of 9.60 percent, compared to 10.58 percent for the
Standard & Poor's 500 Composite Stock Index (S&P 500 Index) and 9.51 percent for
the Lipper Growth and Income Funds Index. While the Fund outperformed the S&P
500 Index during the third quarter of 1997, it underperformed it during the
fourth quarter as both small-cap and cyclical stocks came under pressure.
<PAGE>
DEAN WITTER VALUE-ADDED MARKET SERIES - EQUITY PORTFOLIO
LETTER TO THE SHAREHOLDERS DECEMBER 31, 1997, CONTINUED
The Fund invests in substantially all the stocks included in the S&P 500 Index.
Unlike the S&P 500 Index, the Fund equally weights all stock positions, thereby
emphasizing the stocks of smaller- to medium-sized companies, which have
historically outperformed larger-capitalization companies. Large-capitalization
stocks, however, have been the market leaders for the last three years,
overshadowing the solid returns provided by small- and mid-cap stocks. Due to
the Asian currency crisis, investors in emerging markets may choose to evaluate
the attractiveness of the neglected domestic small- and mid-cap sectors. Such a
scenario would bode well for the equally weighted strategy employed by the Fund.
LOOKING AHEAD
Historically, the Fund has had strong relative returns during periods when
small-cap stocks have outperformed larger ones (e.g., 1991 through 1993). Since
1995, however, large-cap multinationals have been the market leaders, resulting
in the Fund's relative underperformance. We believe that we are now at a point
in the economic cycle where small caps may once again be positioned to
outperform large-cap stocks. Many relative valuation measures, such as
price-to-book, dividend yield and price-to-earnings, indicate that small-cap
issues are currently undervalued relative to large caps. In addition, an
expected strong dollar should reduce the relative earnings growth of large
multinationals, thus making small and mid-caps more attractive to investors.
We appreciate your support of Dean Witter Value-Added Market Series - Equity
Portfolio and look forward to continuing to serve your financial needs and
objectives.
Very truly yours,
[SIGNATURE]
CHARLES A. FIUMEFREDDO
CHAIRMAN OF THE BOARD
<PAGE>
DEAN WITTER VALUE-ADDED MARKET SERIES - EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (97.8%)
ADVERTISING/MARKETING SERVICES (0.4%)
72,000 Cognizant Corp....................................................................... $ 3,208,500
64,000 Interpublic Group of Companies, Inc.................................................. 3,188,000
--------------
6,396,500
--------------
AEROSPACE & DEFENSE (0.7%)
58,000 Boeing Co............................................................................ 2,838,375
33,000 General Dynamics Corp................................................................ 2,852,437
29,000 Lockheed Martin Corp................................................................. 2,856,500
26,000 Northrop Grumman Corp................................................................ 2,990,000
--------------
11,537,312
--------------
AGRICULTURE RELATED (0.4%)
133,350 Archer-Daniels-Midland Co............................................................ 2,892,028
30,000 Pioneer Hi-Bred International, Inc................................................... 3,217,500
--------------
6,109,528
--------------
AIR FREIGHT (0.2%)
48,000 Federal Express Corp.*............................................................... 2,931,000
--------------
AIRLINES (0.8%)
25,500 AMR Corp.*........................................................................... 3,276,750
26,600 Delta Air Lines, Inc................................................................. 3,165,400
137,000 Southwest Airlines Co................................................................ 3,373,625
54,000 US Airways Group Inc.*............................................................... 3,375,000
--------------
13,190,775
--------------
ALUMINUM (0.5%)
103,000 Alcan Aluminium Ltd. (Canada)........................................................ 2,845,375
41,000 Aluminum Co. of America.............................................................. 2,885,375
48,000 Reynolds Metals Co................................................................... 2,880,000
--------------
8,610,750
--------------
AUTO PARTS - AFTER MARKET (1.5%)
117,000 Cooper Tire & Rubber Co.............................................................. 2,851,875
65,000 Dana Corp............................................................................ 3,087,500
80,000 Echlin, Inc.......................................................................... 2,895,000
91,000 Genuine Parts Co..................................................................... 3,088,312
44,000 Goodyear Tire & Rubber Co............................................................ 2,799,500
94,000 ITT Industries, Inc.................................................................. 2,949,250
65,000 Snap-On, Inc......................................................................... 2,835,625
51,000 TRW, Inc............................................................................. 2,722,125
--------------
23,229,187
--------------
AUTOMOBILES (0.6%)
86,000 Chrysler Corp........................................................................ 3,026,125
66,000 Ford Motor Co........................................................................ 3,213,375
49,000 General Motors Corp.................................................................. 2,970,625
--------------
9,210,125
--------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
BANKS - MONEY CENTER (1.5%)
43,000 BankAmerica Corp..................................................................... $ 3,139,000
25,000 Bankers Trust New York Corp.......................................................... 2,810,937
25,500 Chase Manhattan Corp................................................................. 2,792,250
22,000 Citicorp............................................................................. 2,781,625
38,000 First Chicago NBD Corp............................................................... 3,173,000
59,000 First Union Corp..................................................................... 3,023,750
24,500 Morgan (J.P.) & Co., Inc............................................................. 2,765,437
46,000 NationsBank Corp..................................................................... 2,797,375
--------------
23,283,374
--------------
BANKS - REGIONAL (4.4%)
51,500 Banc One Corp........................................................................ 2,797,094
56,000 Bank of New York Co., Inc............................................................ 3,237,500
33,500 BankBoston Corp...................................................................... 3,146,906
43,000 Barnett Banks, Inc................................................................... 3,090,625
44,000 BB&T Corporation..................................................................... 2,818,750
35,000 Comerica, Inc........................................................................ 3,158,750
39,000 CoreStates Financial Corp............................................................ 3,122,437
38,000 Fifth Third Bancorp.................................................................. 3,101,750
44,000 Fleet Financial Group, Inc........................................................... 3,297,250
78,000 Huntington Bancshares, Inc........................................................... 2,798,250
44,500 KeyCorp.............................................................................. 3,151,156
52,000 Mellon Bank Corp..................................................................... 3,152,500
50,000 National City Corp................................................................... 3,287,500
87,000 Norwest Corp......................................................................... 3,360,375
56,000 PNC Bank Corp........................................................................ 3,195,500
26,000 Republic New York Corp............................................................... 2,968,875
50,000 State Street Corp.................................................................... 2,909,375
44,000 SunTrust Banks, Inc.................................................................. 3,140,500
85,000 Synovus Financial Corp............................................................... 2,783,750
28,000 U.S. Bancorp......................................................................... 3,134,250
39,000 Wachovia Corp........................................................................ 3,163,875
9,000 Wells Fargo & Co..................................................................... 3,054,937
--------------
67,871,905
--------------
BEVERAGES - ALCOHOLIC (0.8%)
69,000 Anheuser-Busch Companies, Inc........................................................ 3,036,000
58,000 Brown-Forman Corp. (Class B)......................................................... 3,204,500
91,000 Coors (Adolph) Co. (Class B)......................................................... 3,014,375
90,000 Seagram Co. Ltd. (Canada)............................................................ 2,908,125
--------------
12,163,000
--------------
BEVERAGES - SOFT DRINKS (0.6%)
45,000 Coca Cola Co......................................................................... 2,998,125
80,000 PepsiCo, Inc......................................................................... 2,915,000
105,500 Whitman Corp......................................................................... 2,749,594
--------------
8,662,719
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VALUE-ADDED MARKET SERIES - EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
BIOTECHNOLOGY (0.2%)
58,000 Amgen Inc.*.......................................................................... $ 3,139,250
--------------
BROADCAST MEDIA (1.0%)
110,000 CBS Corp............................................................................. 3,238,125
41,000 Clear Channel Communications, Inc.*.................................................. 3,256,937
100,000 Comcast Corp. (Class A Special)...................................................... 3,150,000
111,000 Tele-Communications, Inc. (Class A)*................................................. 3,094,125
115,000 U.S. West Media Group, Inc.*......................................................... 3,320,625
--------------
16,059,812
--------------
BUILDING MATERIALS (0.6%)
43,000 Armstrong World Industries Inc....................................................... 3,214,250
60,000 Masco Corp........................................................................... 3,052,500
81,000 Owens-Corning Fiberglas Corp......................................................... 2,764,125
--------------
9,030,875
--------------
CHEMICALS (1.4%)
37,000 Air Products & Chemicals, Inc........................................................ 3,043,250
31,000 Dow Chemical Co...................................................................... 3,146,500
51,000 DuPont (E.I) de Nemours & Co., Inc................................................... 3,063,187
48,000 Eastman Chemical Co.................................................................. 2,859,000
69,000 Praxair, Inc......................................................................... 3,105,000
32,000 Rohm & Haas Co....................................................................... 3,064,000
71,000 Union Carbide Corp................................................................... 3,048,562
--------------
21,329,499
--------------
CHEMICALS - DIVERSIFIED (0.9%)
161,000 Engelhard Corp....................................................................... 2,797,375
43,000 FMC Corp.*........................................................................... 2,894,437
68,000 Goodrich (B.F.) Co................................................................... 2,817,750
74,000 Monsanto Co.......................................................................... 3,108,000
49,000 PPG Industries, Inc.................................................................. 2,799,125
--------------
14,416,687
--------------
CHEMICALS - SPECIALTY (1.5%)
58,000 Ecolab, Inc.......................................................................... 3,215,375
39,000 Grace (W. R.) & Co................................................................... 3,137,062
63,000 Great Lakes Chemical Corp............................................................ 2,827,125
64,000 Hercules, Inc........................................................................ 3,204,000
57,000 International Flavors & Fragrances Inc............................................... 2,935,500
88,000 Morton International, Inc............................................................ 3,025,000
72,000 Nalco Chemical Co.................................................................... 2,848,500
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
82,000 Sigma-Aldrich Corp................................................................... $ 3,239,000
--------------
24,431,562
--------------
COMMERCIAL & CONSUMER SERVICES (1.0%)
69,000 Block (H.&R.), Inc................................................................... 3,092,062
96,000 Cendant Corp.*....................................................................... 3,300,000
100,000 Dun & Bradstreet Corp................................................................ 3,093,750
205,000 Laidlaw, Inc. (Canada)............................................................... 2,793,125
86,000 Service Corp. International.......................................................... 3,176,625
--------------
15,455,562
--------------
COMMUNICATIONS EQUIPMENT (1.7%)
120,000 Andrew Corp.*........................................................................ 2,872,500
120,000 DSC Communications Corp.*............................................................ 2,865,000
69,000 Harris Corp.......................................................................... 3,165,375
38,500 Lucent Technologies Inc.............................................................. 3,075,187
50,000 Motorola, Inc........................................................................ 2,853,125
178,000 NextLevel Systems, Inc.*............................................................. 3,181,750
32,000 Northern Telecom Ltd. (Canada)....................................................... 2,848,000
163,000 Scientific-Atlanta, Inc.............................................................. 2,730,250
54,000 Tellabs, Inc.*....................................................................... 2,845,125
--------------
26,436,312
--------------
COMPUTER - NETWORKING (0.7%)
83,000 3Com Corp.*.......................................................................... 2,894,625
115,000 Bay Networks, Inc.*.................................................................. 2,939,687
201,000 Cabletron Systems, Inc.*............................................................. 3,015,000
56,000 Cisco Systems, Inc.*................................................................. 3,122,000
--------------
11,971,312
--------------
COMPUTER SOFTWARE & SERVICES (2.2%)
75,000 Adobe Systems, Inc................................................................... 3,084,375
78,000 Autodesk, Inc........................................................................ 2,866,500
60,000 Computer Associates International, Inc............................................... 3,172,500
40,000 Computer Sciences Corp.*............................................................. 3,340,000
60,000 HBO & Co............................................................................. 2,876,250
22,000 Microsoft Corp.*..................................................................... 2,842,125
390,000 Novell, Inc.*........................................................................ 2,900,625
131,000 Oracle Corp.*........................................................................ 2,914,750
66,000 Parametric Technology Corp.*......................................................... 3,118,500
50,000 Shared Medical Systems Corp.......................................................... 3,300,000
222,000 Unisys Corp.*........................................................................ 3,080,250
--------------
33,495,875
--------------
COMPUTERS - PERIPHERAL EQUIPMENT (0.4%)
108,000 EMC Corp.*........................................................................... 2,963,250
144,000 Seagate Technology, Inc.*............................................................ 2,772,000
--------------
5,735,250
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VALUE-ADDED MARKET SERIES - EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMPUTERS - SYSTEMS (1.7%)
210,000 Apple Computer, Inc.*................................................................ $ 2,743,125
51,000 COMPAQ Computer Corp................................................................. 2,878,312
166,000 Data General Corp.*.................................................................. 2,894,625
33,000 Dell Computer Corp.*................................................................. 2,772,000
76,000 Digital Equipment Corp.*............................................................. 2,812,000
47,000 Hewlett-Packard Co................................................................... 2,937,500
29,000 International Business Machines Corp................................................. 3,032,312
234,000 Silicon Graphics, Inc.*.............................................................. 2,910,375
78,000 Sun Microsystems, Inc.*.............................................................. 3,110,250
--------------
26,090,499
--------------
CONSUMER - NONCYCLICAL (0.4%)
81,500 American Greetings Corp. (Class A)................................................... 3,188,687
122,000 Jostens, Inc......................................................................... 2,813,625
--------------
6,002,312
--------------
CONTAINERS - METAL & GLASS (0.6%)
89,400 Ball Corp............................................................................ 3,156,937
64,000 Crown Cork & Seal Co., Inc........................................................... 3,208,000
87,000 Owens-Illinois, Inc.*................................................................ 3,300,562
--------------
9,665,499
--------------
CONTAINERS - PAPER (0.7%)
69,800 Bemis Company, Inc................................................................... 3,075,562
267,000 Stone Container Corp................................................................. 2,786,812
55,000 Temple-Inland, Inc................................................................... 2,877,187
53,000 Union Camp Corp...................................................................... 2,845,437
--------------
11,584,998
--------------
DATA PROCESSING (0.8%)
53,000 Automatic Data Processing, Inc....................................................... 3,252,875
69,000 Ceridian Corp.*...................................................................... 3,161,062
92,000 Equifax, Inc......................................................................... 3,260,250
103,000 First Data Corp...................................................................... 3,012,750
--------------
12,686,937
--------------
DISTRIBUTORS - FOOD & HEALTH (0.8%)
43,000 Cardinal Health, Inc................................................................. 3,230,375
157,000 Fleming Companies, Inc............................................................... 2,109,687
74,500 Supervalu, Inc....................................................................... 3,119,687
70,000 Sysco Corp........................................................................... 3,189,375
--------------
11,649,124
--------------
ELECTRICAL EQUIPMENT (1.5%)
70,000 AMP, Inc............................................................................. 2,940,000
49,000 Emerson Electric Co.................................................................. 2,765,437
43,000 General Electric Co.................................................................. 3,155,125
72,000 General Signal Corp.................................................................. 3,037,500
43,000 Honeywell, Inc....................................................................... 2,945,500
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
68,000 Raychem Corp......................................................................... $ 2,928,250
57,000 Rockwell International Corp.......................................................... 2,978,250
60,000 Thomas & Betts Corp.................................................................. 2,835,000
--------------
23,585,062
--------------
ELECTRONIC COMPONENTS (0.2%)
32,000 Grainger (W.W.), Inc................................................................. 3,110,000
--------------
ELECTRONICS - DEFENSE (0.2%)
56,000 Raytheon Co. (Class B)............................................................... 2,828,036
--------------
ELECTRONICS - INSTRUMENTATION (0.6%)
135,000 EG & G, Inc.......................................................................... 2,809,687
41,000 Perkin-Elmer Corp.................................................................... 2,913,562
72,000 Tektronix, Inc....................................................................... 2,857,500
--------------
8,580,749
--------------
ELECTRONICS - SEMICONDUCTORS (1.1%)
161,000 Advanced Micro Devices, Inc.*........................................................ 2,887,937
39,000 Intel Corp........................................................................... 2,737,312
139,000 LSI Logic Corp.*..................................................................... 2,745,250
110,000 Micron Technology, Inc.*............................................................. 2,860,000
114,000 National Semiconductor Corp.*........................................................ 2,956,875
62,000 Texas Instruments, Inc............................................................... 2,790,000
--------------
16,977,374
--------------
ENGINEERING & CONSTRUCTION (0.6%)
78,000 Fluor Corp........................................................................... 2,915,250
105,000 Foster Wheeler Corp.................................................................. 2,841,562
88,000 McDermott International, Inc......................................................... 3,223,000
--------------
8,979,812
--------------
ENTERTAINMENT (0.8%)
54,900 King World Productions Inc.*......................................................... 3,170,475
52,000 Time Warner, Inc..................................................................... 3,224,000
77,000 Viacom, Inc. (Class B)*.............................................................. 3,190,687
32,000 Walt Disney Co....................................................................... 3,170,000
--------------
12,755,162
--------------
FACILITIES & ENVIRONMENTAL SERVICES (0.2%)
114,000 Safety-Kleen Corp.................................................................... 3,127,875
--------------
FINANCE - CONSUMER (1.2%)
38,500 Beneficial Corp...................................................................... 3,200,312
75,000 Countrywide Credit Industries, Inc................................................... 3,215,625
111,000 Green Tree Financial Corp............................................................ 2,906,812
25,500 Household International, Inc......................................................... 3,252,844
114,750 MBNA Corp............................................................................ 3,134,109
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VALUE-ADDED MARKET SERIES - EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
73,000 Providian Financial Corp............................................................. $ 3,298,687
--------------
19,008,389
--------------
FINANCE - DIVERSIFIED (1.6%)
34,000 American Express Co.................................................................. 3,034,500
58,665 American General Corp................................................................ 3,171,577
56,000 Fannie Mae........................................................................... 3,195,500
75,000 Freddie Mac.......................................................................... 3,145,312
49,000 MBIA Inc............................................................................. 3,273,812
47,000 MGIC Investment Corp................................................................. 3,125,500
55,000 Morgan Stanley, Dean Witter, Discover & Co. (Note 4)................................. 3,251,875
77,000 SunAmerica, Inc...................................................................... 3,291,750
--------------
25,489,826
--------------
FOODS (2.4%)
54,000 Campbell Soup Co..................................................................... 3,138,750
87,600 ConAgra, Inc......................................................................... 2,874,375
30,000 CPC International Inc................................................................ 3,232,500
42,000 General Mills, Inc................................................................... 3,008,250
62,000 Heinz (H.J.) Co...................................................................... 3,150,375
51,000 Hershey Foods Corp................................................................... 3,158,812
62,000 Kellogg Co........................................................................... 3,076,750
58,000 Quaker Oats Company (The)............................................................ 3,059,500
32,000 Ralston-Ralston Purina Group......................................................... 2,974,000
56,000 Sara Lee Corp........................................................................ 3,153,500
50,000 Unilever NV (ADR) (Netherlands)...................................................... 3,121,875
38,100 Wrigley (Wm.) Jr. Co. (Class A)...................................................... 3,031,331
--------------
36,980,018
--------------
FOOTWEAR (0.4%)
71,000 Nike, Inc. (Class B)................................................................. 2,786,750
97,000 Reebok International Ltd. (United Kingdom)*.......................................... 2,794,812
--------------
5,581,562
--------------
GAMING, LOTTERY, & PARI-MUTUEL COMPANIES (0.4%)
153,000 Harrah's Entertainment, Inc.*........................................................ 2,887,875
126,000 Mirage Resorts, Inc.*................................................................ 2,866,500
--------------
5,754,375
--------------
GOLD & PRECIOUS METALS MINING (1.0%)
152,000 Barrick Gold Corp. (Canada).......................................................... 2,831,000
518,000 Battle Mountain Gold Co.............................................................. 3,043,250
555,000 Echo Bay Mines Ltd. (Canada)......................................................... 1,352,812
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
330,000 Homestake Mining Co.................................................................. $ 2,928,750
96,000 Newmont Mining Corp.................................................................. 2,820,000
231,000 Placer Dome Inc. (Canada)............................................................ 2,930,812
--------------
15,906,624
--------------
HARDWARE & TOOLS (0.4%)
80,000 Black & Decker Corp.................................................................. 3,125,000
66,000 Stanley Works........................................................................ 3,114,375
--------------
6,239,375
--------------
HEALTHCARE - DIVERSIFIED (1.4%)
45,000 Abbott Laboratories.................................................................. 2,950,312
86,000 Allergan, Inc........................................................................ 2,886,375
40,000 American Home Products Corp.......................................................... 3,060,000
34,000 Bristol-Myers Squibb Co.............................................................. 3,217,250
47,000 Johnson & Johnson.................................................................... 3,096,125
83,000 Mallinckrodt Group, Inc.............................................................. 3,154,000
23,500 Warner-Lambert Co.................................................................... 2,914,000
--------------
21,278,062
--------------
HEALTHCARE - DRUGS (1.0%)
44,000 Lilly (Eli) & Co..................................................................... 3,063,500
28,000 Merck & Co., Inc..................................................................... 2,975,000
43,000 Pfizer, Inc.......................................................................... 3,206,187
84,000 Pharmacia & Upjohn, Inc.............................................................. 3,076,500
52,000 Schering-Plough Corp................................................................. 3,230,500
--------------
15,551,687
--------------
HEALTHCARE - HMOS (0.4%)
147,000 Humana, Inc.*........................................................................ 3,050,250
62,000 United Healthcare Corp............................................................... 3,080,625
--------------
6,130,875
--------------
HEALTHCARE - LONG TERM (0.4%)
111,000 Healthsouth Corp.*................................................................... 3,080,250
91,000 Manor Care, Inc...................................................................... 3,185,000
--------------
6,265,250
--------------
HEALTHCARE - SPECIALIZED SERVICES (0.2%)
102,000 ALZA Corp. (Class A)*................................................................ 3,244,875
--------------
HEAVY DUTY TRUCKS & PARTS (0.6%)
53,000 Cummins Engine Co., Inc.............................................................. 3,130,312
123,000 Navistar International Corp.*........................................................ 3,051,937
57,000 PACCAR, Inc.......................................................................... 2,992,500
--------------
9,174,749
--------------
HOME BUILDING (0.8%)
51,000 Centex Corp.......................................................................... 3,209,812
76,000 Fleetwood Enterprises, Inc........................................................... 3,225,250
141,000 Kaufman & Broad Home Corp............................................................ 3,163,687
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VALUE-ADDED MARKET SERIES - EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
74,000 Pulte Corp........................................................................... $ 3,094,125
--------------
12,692,874
--------------
HOSPITAL MANAGEMENT (0.4%)
103,000 Columbia/HCA Healthcare Corp......................................................... 3,051,375
99,000 Tenet Healthcare Corp.*.............................................................. 3,279,375
--------------
6,330,750
--------------
HOUSEHOLD FURNISHINGS & APPLIANCES (0.4%)
87,000 Maytag Corp.......................................................................... 3,246,187
53,000 Whirlpool Corp....................................................................... 2,915,000
--------------
6,161,187
--------------
HOUSEHOLD PRODUCTS - NON-DURABLE (1.0%)
40,000 Clorox Co............................................................................ 3,162,500
43,000 Colgate-Palmolive Co................................................................. 3,160,500
76,000 Fort James Corp...................................................................... 2,907,000
61,000 Kimberly-Clark Corp.................................................................. 3,008,062
39,000 Procter & Gamble Co.................................................................. 3,112,687
--------------
15,350,749
--------------
HOUSEWARES (0.8%)
85,000 Fortune Brands, Inc.................................................................. 3,150,312
73,000 Newell Co............................................................................ 3,102,500
118,000 Rubbermaid, Inc...................................................................... 2,950,000
110,000 Tupperware Corp...................................................................... 3,066,250
--------------
12,269,062
--------------
INSURANCE BROKERS (0.4%)
54,000 Aon Corp............................................................................. 3,165,750
39,000 Marsh & McLennan Cos., Inc........................................................... 2,907,937
--------------
6,073,687
--------------
INVESTMENT BANKING/BROKERAGE (0.4%)
41,000 Merrill Lynch & Co., Inc............................................................. 2,990,437
77,000 Schwab (Charles) Corp................................................................ 3,229,187
--------------
6,219,624
--------------
LEISURE TIME - PRODUCTS (0.6%)
98,000 Brunswick Corp....................................................................... 2,970,625
99,000 Hasbro, Inc.......................................................................... 3,118,500
86,000 Mattel, Inc.......................................................................... 3,203,500
--------------
9,292,625
--------------
LIFE & HEALTH INSURANCE (1.2%)
42,000 Aetna Inc............................................................................ 2,963,625
65,000 Conseco, Inc......................................................................... 2,953,437
38,500 Jefferson-Pilot Corp................................................................. 2,998,187
75,000 Torchmark Corp....................................................................... 3,154,687
29,000 Transamerica Corp.................................................................... 3,088,500
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
60,000 UNUM Corp............................................................................ $ 3,262,500
--------------
18,420,936
--------------
LODGING - HOTELS (0.6%)
93,600 Hilton Hotels Corp................................................................... 2,784,600
38,000 ITT Corp.*........................................................................... 3,149,250
44,000 Marriot International, Inc........................................................... 3,047,000
--------------
8,980,850
--------------
MACHINERY - DIVERSIFIED (1.9%)
48,000 Case Corp............................................................................ 2,901,000
60,000 Caterpillar Inc...................................................................... 2,913,750
113,000 Cincinnati Milacron, Inc............................................................. 2,930,937
58,000 Cooper Industries, Inc............................................................... 2,842,000
53,000 Deere & Co........................................................................... 3,090,563
89,000 Dover Corp........................................................................... 3,215,125
83,000 Harnischfeger Industries, Inc........................................................ 2,930,938
70,500 Ingersoll-Rand Co.................................................................... 2,855,250
27,000 NACCO Industries, Inc. (Class A)..................................................... 2,894,063
81,000 Timken Co............................................................................ 2,784,375
--------------
29,358,001
--------------
MANUFACTURING - DIVERSIFIED (2.7%)
60,000 Aeroquip-Vickers, Inc................................................................ 2,943,750
73,000 AlliedSignal, Inc.................................................................... 2,842,438
77,000 Corning, Inc......................................................................... 2,858,625
69,000 Crane Co............................................................................. 2,992,875
32,000 Eaton Corp........................................................................... 2,856,000
54,000 Illinois Tool Works Inc.............................................................. 3,246,750
61,000 Johnson Controls, Inc................................................................ 2,912,750
33,500 Minnesota Mining & Manufacturing Co.................................................. 2,749,094
64,000 National Service Industries, Inc..................................................... 3,172,000
73,000 Tenneco, Inc......................................................................... 2,883,500
45,600 Textron Inc.......................................................................... 2,850,000
71,000 Thermo Electron Corp.*............................................................... 3,159,500
73,000 Tyco International Ltd............................................................... 3,289,563
40,000 United Technologies Corp............................................................. 2,912,500
--------------
41,669,345
--------------
MANUFACTURING - SPECIALIZED (1.0%)
72,000 Avery Dennison Corp.................................................................. 3,222,000
59,000 Briggs & Stratton Corp............................................................... 2,865,188
81,000 Millipore Corp....................................................................... 2,748,938
135,000 Pall Corp............................................................................ 2,792,813
67,000 Parker-Hannifin Corp................................................................. 3,073,625
--------------
14,702,564
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VALUE-ADDED MARKET SERIES - EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
MEDICAL PRODUCTS & SUPPLIES (2.0%)
97,000 Bard (C.R.), Inc..................................................................... $ 3,037,313
72,000 Bausch & Lomb, Inc................................................................... 2,853,000
57,000 Baxter International, Inc............................................................ 2,874,938
62,000 Becton, Dickinson & Co............................................................... 3,100,000
131,000 Biomet, Inc.......................................................................... 3,340,500
65,000 Boston Scientific Corp.*............................................................. 2,981,875
52,000 Guidant Corp......................................................................... 3,237,000
63,000 Medtronic, Inc....................................................................... 3,295,688
93,000 St. Jude Medical, Inc.*.............................................................. 2,836,500
103,000 United States Surgical Corp.......................................................... 3,019,188
--------------
30,576,002
--------------
METALS & MINING (0.9%)
123,000 ASARCO, Inc.......................................................................... 2,759,813
184,000 Cyprus Amax Minerals Co.............................................................. 2,829,000
178,000 Freeport-McMoran Copper & Gold, Inc. (Class B)....................................... 2,803,500
162,000 Inco Ltd. (Canada)................................................................... 2,754,000
47,000 Phelps Dodge Corp.................................................................... 2,925,750
--------------
14,072,063
--------------
MULTI-LINE INSURANCE (1.2%)
30,000 American International Group, Inc.................................................... 3,262,500
17,000 CIGNA Corp........................................................................... 2,942,063
34,000 Hartford Financial Services Group Inc................................................ 3,181,125
41,000 Lincoln National Corp................................................................ 3,203,125
28,000 Loews Corp........................................................................... 2,971,500
59,000 Travelers Group, Inc................................................................. 3,178,625
--------------
18,738,938
--------------
OFFICE EQUIPMENT & SUPPLIES (0.4%)
185,500 Moore Corp. Ltd. (Canada)............................................................ 2,805,688
35,000 Pitney Bowes, Inc.................................................................... 3,147,813
--------------
5,953,501
--------------
OIL & GAS - EXPLORATION & PRODUCTION (0.2%)
30,000 Burlington Northern Santa Fe Corp.................................................... 2,788,125
--------------
OIL & GAS - REFINING & MARKETING (0.2%)
57,000 Ashland, Inc......................................................................... 3,060,188
--------------
OIL & GAS DRILLING (1.4%)
66,000 Baker Hughes, Inc.................................................................... 2,879,250
73,000 Dresser Industries, Inc.............................................................. 3,061,438
58,000 Halliburton Co....................................................................... 3,012,375
44,000 Helmerich & Payne, Inc............................................................... 2,986,500
103,000 Rowan Companies, Inc.*............................................................... 3,141,500
39,000 Schlumberger Ltd..................................................................... 3,139,500
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
42,000 Western Atlas, Inc.*................................................................. $ 3,108,000
--------------
21,328,563
--------------
OIL - EXPLORATION & PRODUCTION (0.8%)
47,000 Anardarko Petroleum Corp............................................................. 2,852,313
85,000 Apache Corp.......................................................................... 2,980,313
71,000 Burlington Resources, Inc............................................................ 3,181,688
117,000 Oryx Energy Co.*..................................................................... 2,983,500
--------------
11,997,814
--------------
OIL INTEGRATED - DOMESTIC (1.9%)
54,000 Amerada Hess Corp.................................................................... 2,963,250
36,000 Atlantic Richfield Co................................................................ 2,884,500
45,500 Kerr-McGee Corp...................................................................... 2,880,719
109,000 Occidental Petroleum Corp............................................................ 3,195,063
42,000 Pennzoil Co.......................................................................... 2,806,125
62,000 Phillips Petroleum Co................................................................ 3,014,750
71,000 Sun Co., Inc......................................................................... 2,986,438
117,000 Union Pacific Resources Group, Inc................................................... 2,837,250
75,000 Unocal Corp.......................................................................... 2,910,938
85,000 USX-Marathon Group................................................................... 2,868,750
--------------
29,347,783
--------------
OIL INTEGRATED - INTERNATIONAL (1.1%)
33,000 Amoco Corp........................................................................... 2,809,125
36,000 Chevron Corp......................................................................... 2,772,000
48,000 Exxon Corp........................................................................... 2,937,000
41,000 Mobil Corp........................................................................... 2,959,688
54,000 Royal Dutch Petroleum Co. (ADR) (Netherlands)........................................ 2,926,125
53,000 Texaco, Inc.......................................................................... 2,881,875
--------------
17,285,813
--------------
PAPER & FOREST PRODUCTS (1.8%)
95,000 Boise Cascade Corp................................................................... 2,873,750
64,000 Champion International Corp.......................................................... 2,900,000
47,000 Georgia-Pacific Corp................................................................. 2,855,250
64,300 International Paper Co............................................................... 2,772,938
148,000 Louisiana-Pacific Corp............................................................... 2,812,000
100,000 Mead Corp............................................................................ 2,800,000
67,000 Potlatch Corp........................................................................ 2,881,000
90,000 Westvaco Corp........................................................................ 2,829,375
59,000 Weyerhaeuser Co...................................................................... 2,894,688
89,000 Willamette Industries, Inc........................................................... 2,864,688
--------------
28,483,689
--------------
PERSONAL CARE (0.6%)
91,000 Alberto-Culver Co. (Class B)......................................................... 2,917,688
45,000 Avon Products, Inc................................................................... 2,761,875
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VALUE-ADDED MARKET SERIES - EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
31,000 Gillette Co.......................................................................... $ 3,113,563
--------------
8,793,126
--------------
PHOTOGRAPHY/IMAGING (0.8%)
49,000 Eastman Kodak Co..................................................................... 2,979,813
110,000 Ikon Office Solutions, Inc........................................................... 3,093,750
64,000 Polaroid Corp........................................................................ 3,116,000
40,000 Xerox Corp........................................................................... 2,952,500
--------------
12,142,063
--------------
PROPERTY - CASUALTY INSURANCE (1.6%)
35,000 Allstate Corp........................................................................ 3,180,625
42,000 Chubb Corp........................................................................... 3,176,250
20,500 Cincinnati Financial Corp............................................................ 2,880,250
14,500 General Re Corp...................................................................... 3,074,000
26,000 Progressive Corp..................................................................... 3,116,750
57,000 SAFECO Corp.......................................................................... 2,771,625
35,000 St. Paul Companies, Inc.............................................................. 2,872,188
140,000 USF&G Corp........................................................................... 3,088,750
--------------
24,160,438
--------------
PUBLISHING (0.8%)
59,000 Dow Jones & Co., Inc................................................................. 3,167,563
44,000 McGraw-Hill, Inc..................................................................... 3,256,000
90,000 Meredith Corp........................................................................ 3,211,875
50,500 Times Mirror Co. (Class A)........................................................... 3,105,750
--------------
12,741,188
--------------
PUBLISHING - NEWSPAPER (0.8%)
53,000 Gannett Co., Inc..................................................................... 3,276,063
54,000 Knight-Ridder Newspapers, Inc........................................................ 2,808,000
49,000 New York Times Co. (Class A)......................................................... 3,240,125
52,000 Tribune Co........................................................................... 3,237,000
--------------
12,561,188
--------------
RAILROADS (0.6%)
53,000 CSX Corp............................................................................. 2,862,000
92,000 Norfolk Southern Corp................................................................ 2,834,750
47,000 Union Pacific Corp................................................................... 2,934,563
--------------
8,631,313
--------------
RESTAURANTS (0.8%)
274,000 Darden Restaurants, Inc.............................................................. 3,425,000
62,000 McDonald's Corp...................................................................... 2,960,500
98,000 TRICON Global Restaurants, Inc.*..................................................... 2,848,125
133,000 Wendy's International, Inc........................................................... 3,200,313
--------------
12,433,938
--------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
RETAIL - BUILDING SUPPLIES (0.6%)
57,000 Home Depot, Inc...................................................................... $ 3,355,875
68,000 Lowe's Companies, Inc................................................................ 3,242,750
106,000 Sherwin-Williams Co.................................................................. 2,941,500
--------------
9,540,125
--------------
RETAIL - COMPUTERS & ELECTRONICS (0.4%)
80,000 Circuit City Stores, Inc............................................................. 2,845,000
85,000 Tandy Corp........................................................................... 3,277,813
--------------
6,122,813
--------------
RETAIL - DEPARTMENT STORES (1.4%)
84,000 Dillard Department Stores, Inc. (Class A)............................................ 2,961,000
73,000 Federated Department Stores, Inc.*................................................... 3,143,563
57,000 Harcourt General, Inc................................................................ 3,120,750
56,000 May Department Stores Co............................................................. 2,950,500
47,000 Mercantile Stores Co., Inc........................................................... 2,861,125
49,000 Nordstrom, Inc....................................................................... 2,946,125
48,500 Penney (J.C.) Co., Inc............................................................... 2,925,156
--------------
20,908,219
--------------
RETAIL - DRUG STORES (0.8%)
50,000 CVS Corp............................................................................. 3,203,125
102,000 Longs Drug Stores Corp............................................................... 3,276,750
55,000 Rite Aid Corp........................................................................ 3,227,813
107,000 Walgreen Co.......................................................................... 3,357,125
--------------
13,064,813
--------------
RETAIL - FOOD CHAINS (1.2%)
69,000 Albertson's, Inc..................................................................... 3,268,875
139,000 American Stores Co................................................................... 2,858,188
88,000 Giant Food, Inc. (Class A)........................................................... 2,964,500
97,000 Great Atlantic & Pacific Tea Co., Inc................................................ 2,879,688
89,000 Kroger Co.*.......................................................................... 3,287,438
73,000 Winn-Dixie Stores, Inc............................................................... 3,189,188
--------------
18,447,877
--------------
RETAIL - GENERAL MERCHANDISE (1.0%)
74,000 Costco Companies, Inc.*.............................................................. 3,297,625
51,000 Dayton-Hudson Corp................................................................... 3,442,500
253,000 Kmart Corp.*......................................................................... 2,925,313
64,000 Sears, Roebuck & Co.................................................................. 2,896,000
82,000 Wal-Mart Stores, Inc. (Class A)...................................................... 3,233,875
--------------
15,795,313
--------------
RETAIL - SPECIALTY (0.8%)
105,000 AutoZone, Inc.*...................................................................... 3,045,000
123,000 Pep Boys-Manny, Moe & Jack........................................................... 2,936,625
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VALUE-ADDED MARKET SERIES - EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
97,000 Toys 'R' Us, Inc.*................................................................... $ 3,049,438
145,000 Woolworth Corp.*..................................................................... 2,954,375
--------------
11,985,438
--------------
RETAIL - SPECIALTY APPAREL (0.8%)
585,000 Charming Shoppes, Inc.*.............................................................. 2,705,625
93,000 Gap, Inc............................................................................. 3,295,688
129,000 Limited (The), Inc................................................................... 3,289,500
97,000 TJX Companies, Inc................................................................... 3,334,375
--------------
12,625,188
--------------
SAVINGS & LOAN COMPANIES (0.6%)
47,000 Ahmanson (H.F.) & Co................................................................. 3,146,063
33,000 Golden West Financial Corp........................................................... 3,227,813
46,800 Washington Mutual, Inc............................................................... 2,983,500
--------------
9,357,376
--------------
SEMICONDUCTOR EQUIPMENT (0.4%)
93,000 Applied Materials, Inc.*............................................................. 2,795,813
72,000 KLA-Tencor Corp.*.................................................................... 2,776,500
--------------
5,572,313
--------------
SPECIALTY PRINTING (0.6%)
90,000 Deluxe Corp.......................................................................... 3,105,000
88,000 Donnelley (R.R.) & Sons Co........................................................... 3,278,000
134,000 Harland (John H.) Co................................................................. 2,814,000
--------------
9,197,000
--------------
STEEL & IRON (1.3%)
108,000 Allegheny Teledyne Inc............................................................... 2,794,500
608,000 Armco, Inc........................................................................... 3,002,000
343,000 Bethlehem Steel Corp.*............................................................... 2,958,375
173,000 Inland Steel Industries, Inc......................................................... 2,962,625
61,000 Nucor Corp........................................................................... 2,947,063
102,000 USX-U.S. Steel Group, Inc............................................................ 3,187,500
174,000 Worthington Industries, Inc.......................................................... 2,849,250
--------------
20,701,313
--------------
TELECOMMUNICATIONS - CELLULAR/WIRELESS (0.2%)
78,000 Airtouch Communications, Inc.*....................................................... 3,241,875
--------------
TELECOMMUNICATIONS - LONG DISTANCE (0.8%)
48,000 AT&T Corp............................................................................ 2,940,000
73,000 MCI Communications Corp.............................................................. 3,125,313
54,000 Sprint Corp.......................................................................... 3,165,750
90,000 WorldCom, Inc.*...................................................................... 2,722,500
--------------
11,953,563
--------------
TELEPHONES (1.6%)
76,000 Alltel Corp.......................................................................... 3,120,750
38,000 Ameritech Corp....................................................................... 3,059,000
35,000 Bell Atlantic Corp................................................................... 3,185,000
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
56,000 BellSouth Corp....................................................................... $ 3,153,500
126,400 Frontier Corp........................................................................ 3,041,500
62,000 GTE Corp............................................................................. 3,239,500
41,000 SBC Communications, Inc.............................................................. 3,003,250
70,000 U.S. West Communications Group....................................................... 3,158,750
--------------
24,961,250
--------------
TEXTILES - APPAREL (0.7%)
115,000 Fruit of the Loom, Inc. (Class A)*................................................... 2,946,875
69,000 Liz Claiborne, Inc................................................................... 2,885,063
99,000 Russell Corp......................................................................... 2,629,688
65,000 VF Corp.............................................................................. 2,985,938
--------------
11,447,564
--------------
TEXTILES - HOME FURNISHINGS (0.2%)
59,000 Springs Industries, Inc. (Class A)................................................... 3,068,000
--------------
TOBACCO (0.4%)
70,500 Philip Morris Companies, Inc......................................................... 3,194,531
88,000 UST, Inc............................................................................. 3,250,500
--------------
6,445,031
--------------
TRUCKERS (0.4%)
60,000 Caliber System, Inc.................................................................. 2,921,250
86,200 Ryder System, Inc.................................................................... 2,823,050
--------------
5,744,300
--------------
UTILITIES - ELECTRIC (5.3%)
61,000 American Electric Power Co., Inc..................................................... 3,149,125
92,000 Baltimore Gas & Electric Co.......................................................... 3,133,750
75,000 Carolina Power & Light Co............................................................ 3,182,813
115,000 Central & South West Corp............................................................ 3,112,188
80,000 CINergy Corp......................................................................... 3,065,000
77,000 Consolidated Edison Co. of New York, Inc............................................. 3,157,000
74,000 Dominion Resources, Inc.............................................................. 3,149,625
93,900 DTE Energy Co........................................................................ 3,257,156
56,000 Duke Power Co........................................................................ 3,101,000
116,000 Edison International................................................................. 3,153,750
105,000 Entergy Corp......................................................................... 3,143,438
110,000 FirstEnergy Corp.*................................................................... 3,190,000
52,000 FPL Group, Inc....................................................................... 3,077,750
74,000 GPU, Inc............................................................................. 3,117,250
120,000 Houston Industries, Inc.............................................................. 3,202,500
300,000 Niagara Mohawk Power Corp.*.......................................................... 3,150,000
54,000 Northern States Power Co............................................................. 3,145,500
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VALUE-ADDED MARKET SERIES - EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
117,000 PacifiCorp........................................................................... $ 3,195,563
128,000 PECO Energy Co....................................................................... 3,104,000
105,000 PG & E Corp.......................................................................... 3,195,938
131,000 PP&L Resources, Inc.................................................................. 3,135,813
101,500 Public Service Enterprise Group, Inc................................................. 3,216,281
121,000 Southern Co.......................................................................... 3,130,875
76,000 Texas Utilities Co................................................................... 3,158,750
104,100 Unicom Corp.......................................................................... 3,201,075
73,000 Union Electric Co.................................................................... 3,157,250
--------------
81,983,390
--------------
UTILITIES - NATURAL GAS (2.2%)
47,000 Coastal Corp......................................................................... 2,911,063
40,000 Columbia Gas System, Inc............................................................. 3,142,500
53,000 Consolidated Natural Gas Co.......................................................... 3,206,500
70,000 Eastern Enterprises.................................................................. 3,150,000
76,000 Enron Corp........................................................................... 3,158,750
74,000 NICOR, Inc........................................................................... 3,121,875
77,000 ONEOK, Inc........................................................................... 3,108,875
84,000 Pacific Enterprises.................................................................. 3,160,500
73,000 Peoples Energy Corp.................................................................. 2,874,375
62,000 Sonat, Inc........................................................................... 2,836,500
113,000 Williams Companies, Inc.............................................................. 3,206,375
--------------
33,877,313
--------------
WASTE MANAGEMENT (0.4%)
83,500 Browning-Ferris Industries, Inc...................................................... 3,089,500
109,000 Waste Management Inc................................................................. 2,997,500
--------------
6,087,000
--------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $952,652,210)....................................................... 1,513,672,338
--------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENTS (a) (1.8%)
U.S. GOVERNMENT AGENCY
$ 27,000 Federal Home Loan Banks 5.75% due 01/02/98
(AMORTIZED COST $26,995,687)....................................................... $ 26,995,687
--------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $979,647,897) (b)...................................................... 99.6 % 1,540,668,025
OTHER ASSETS IN EXCESS OF LIABILITIES................................................... 0.4 6,410,555
------ ---------------
NET ASSETS.............................................................................. 100.0 % $ 1,547,078,580
------ ---------------
------ ---------------
</TABLE>
- ---------------------
ADR American Depository Receipt.
* Non-income producing security.
(a) Security was purchased on a discount basis. The interest rate shown has
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 is $587,923,802 and the
aggregate gross unrealized depreciation is $26,903,674, resulting in net
unrealized appreciation of $561,020,128.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VALUE-ADDED MARKET SERIES - EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $979,647,897)............................................................ $1,540,668,025
Receivable for:
Investments sold........................................................................ 29,089,362
Shares of beneficial interest sold...................................................... 3,119,823
Dividends............................................................................... 2,077,469
Prepaid expenses and other assets........................................................... 80,003
--------------
TOTAL ASSETS........................................................................... 1,575,034,682
--------------
LIABILITIES:
Payable for:
Investments purchased................................................................... 24,215,572
Plan of distribution fee................................................................ 1,080,222
Shares of beneficial interest repurchased............................................... 762,016
Dividends and distributions to shareholders............................................. 754,774
Investment management fee............................................................... 628,434
Payable to bank............................................................................. 290,609
Accrued expenses............................................................................ 224,475
--------------
TOTAL LIABILITIES...................................................................... 27,956,102
--------------
NET ASSETS............................................................................. $1,547,078,580
--------------
--------------
COMPOSITION OF NET ASSETS:
Paid-in-capital............................................................................. $ 961,095,086
Net unrealized appreciation................................................................. 561,020,128
Accumulated undistributed net investment income............................................. 685,808
Accumulated undistributed net realized gain................................................. 24,277,558
--------------
NET ASSETS............................................................................. $1,547,078,580
--------------
--------------
CLASS A SHARES:
Net Assets.................................................................................. $10,422,626
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)................................... 300,705
NET ASSET VALUE PER SHARE.............................................................. $34.66
--------------
--------------
MAXIMUM OFFERING PRICE PER SHARE,
(NET ASSET VALUE PLUS 5.54% OF NET ASSET VALUE)........................................ $36.58
--------------
--------------
CLASS B SHARES:
Net Assets.................................................................................. $1,491,829,869
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)................................... 43,027,281
NET ASSET VALUE PER SHARE.............................................................. $34.67
--------------
--------------
CLASS C SHARES:
Net Assets.................................................................................. $4,456,012
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)................................... 128,640
NET ASSET VALUE PER SHARE.............................................................. $34.64
--------------
--------------
CLASS D SHARES:
Net Assets.................................................................................. $40,370,073
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)................................... 1,164,271
NET ASSET VALUE PER SHARE.............................................................. $34.67
--------------
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VALUE-ADDED MARKET SERIES - EQUITY PORTFOLIO
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1997 (UNAUDITED)*
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Dividends (net of $36,988 foreign withholding tax)............................................ $ 12,494,366
Dividends from affiliates (Note 4)............................................................ 18,053
Interest...................................................................................... 1,131,974
------------
TOTAL INCOME............................................................................. 13,644,393
------------
EXPENSES
Plan of distribution fee (Class A shares)..................................................... 7,049
Plan of distribution fee (Class B shares)..................................................... 5,787,711
Plan of distribution fee (Class C shares)..................................................... 12,914
Investment management fee..................................................................... 3,453,706
Transfer agent fees and expenses.............................................................. 585,568
Licensing fees................................................................................ 113,000
Registration fees............................................................................. 78,874
Shareholder reports and notices............................................................... 51,397
Custodian fees................................................................................ 51,030
Professional fees............................................................................. 30,208
Trustees' fees and expenses................................................................... 7,257
Other......................................................................................... 6,146
------------
TOTAL EXPENSES........................................................................... 10,184,860
------------
NET INVESTMENT INCOME.................................................................... 3,459,533
------------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain............................................................................. 54,502,716
Net change in unrealized appreciation......................................................... 74,795,136
------------
NET GAIN................................................................................. 129,297,852
------------
NET INCREASE.................................................................................. $132,757,385
------------
------------
</TABLE>
- ---------------------
* Class A, Class C and Class D shares were issued July 28, 1997.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VALUE-ADDED MARKET SERIES - EQUITY PORTFOLIO
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE YEAR
DECEMBER 31, ENDED
1997* JUNE 30, 1997
<S> <C> <C>
- ---------------------------------------------------------------------------------------
<CAPTION>
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income............................. $ 3,459,533 $ 6,882,589
Net realized gain................................. 54,502,716 29,310,632
Net change in unrealized appreciation............. 74,795,136 223,988,603
----------------- ---------------
NET INCREASE................................. 132,757,385 260,181,824
----------------- ---------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A shares................................ (63,581) --
Class B shares................................ (5,643,366) (6,849,389)
Class C shares................................ (16,505) --
Class D shares................................ (276,561) --
Net realized gain
Class A shares................................ (358,348) --
Class B shares................................ (53,722,119) (20,247,286)
Class C shares................................ (148,997) --
Class D shares................................ (1,403,319) --
----------------- ---------------
TOTAL DIVIDENDS AND DISTRIBUTIONS............ (61,632,796) (27,096,675)
----------------- ---------------
Net increase from transactions in shares of
beneficial interest............................. 106,216,623 175,057,823
----------------- ---------------
NET INCREASE................................. 177,341,212 408,142,972
NET ASSETS:
Beginning of period............................... 1,369,737,368 961,594,396
----------------- ---------------
END OF PERIOD
(INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME
OF $685,808 AND $3,226,288, RESPECTIVELY)..... $ 1,547,078,580 $ 1,369,737,368
----------------- ---------------
----------------- ---------------
</TABLE>
- ---------------------
* Class A, Class C and Class D shares were issued July 28, 1997.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VALUE-ADDED MARKET SERIES - EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 (UNAUDITED)
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter Value-Added Market Series - Equity Portfolio (the "Fund") is
registered under the Investment Company Act of 1940, amended (the "Act"), as a
diversified, open-end management investment company. The Fund's investment
objective is to achieve a high level of total return on its assets through a
combination of capital appreciation and current income. The Fund seeks to
achieve its objective by investing, on an equally-weighted basis, in a
diversified portfolio of common stocks of the companies which are included in
the Standard & Poor's 500 Composite Stock Price Index. The Fund was organized as
a Massachusetts business trust on May 27, 1987 and commenced operations on
December 1, 1987. On July 28, 1997, the Fund commenced offering three additional
classes of shares, with the then current shares, other than shares held by
certain employee benefit plans established by Dean Witter Reynolds Inc. and its
affiliate, SPS Transaction Services, Inc., designated as Class B shares. Shares
held by those employee benefit plans prior to July 28, 1997 have been designated
Class D shares.
The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase, some Class
A shares, and most Class B shares and Class C shares are subject to a contingent
deferred sales charge imposed on shares redeemed within one year, six years and
one year, respectively. Class D shares are not subject to a sales charge.
Additionally, Class A shares, Class B shares and Class C shares incur
distribution expenses.
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, American or other domestic or foreign stock 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 pursuant to procedures
adopted 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 Dean Witter InterCapital Inc. (the "Investment Manager") that sale
or bid prices are not reflective of a security's market value, portfolio
securities are valued at their fair value as determined in good faith under
<PAGE>
DEAN WITTER VALUE-ADDED MARKET SERIES - EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 (UNAUDITED) CONTINUED
procedures established by and under the general supervision of the Trustees; and
(4) short-term debt securities having a maturity date of more than sixty days at
time of purchase are valued on a mark-to-market basis until sixty days prior to
maturity and thereafter at amortized cost based on their value on the 61st day.
Short-term debt securities having a maturity date of sixty days or less at the
time of purchase are valued at amortized cost.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
Dividend income and other distributions are recorded on the ex-dividend date.
Discounts are accreted over the respective life of the securities. Interest
income is accrued daily.
C. MULTIPLE CLASS ALLOCATIONS -- Investment income, expenses (other than
distribution fees), and realized and unrealized gains and losses are allocated
to each class of shares based upon the relative net asset value on the date such
items are recognized. Distribution fees are charged directly to the respective
class.
D. 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.
E. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to its shareholders on the ex-dividend date. The amount of
dividends and distributions from net investment income and net realized capital
gains are determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for financial reporting purposes but not for tax purposes are reported as
dividends in excess of net investment income or distributions in excess of net
realized capital gains. To the extent they exceed net investment income and net
realized capital gains for tax purposes, they are reported as distributions of
paid-in-capital.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement with the Investment Manager, the
Fund pays the Investment Manager a management fee, accrued daily and payable
monthly, by applying the following annual rates to the net assets of the Fund
determined as of the close of each business day: 0.50% to
<PAGE>
DEAN WITTER VALUE-ADDED MARKET SERIES - EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 (UNAUDITED) CONTINUED
the portion of daily net assets not exceeding $500 million; 0.45% to the portion
of daily net assets exceeding $500 million but not exceeding $1 billion and
0.425% to the portion of daily net assets exceeding $1 billion.
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund's books and
records and furnishes, at its own expense, office space, facilities, equipment,
clerical, bookkeeping and certain legal services and pays the salaries of all
personnel, including officers of the Fund who are employees of the Investment
Manager. The Investment Manager also bears the cost of telephone services, heat,
light, power and other utilities provided to the Fund.
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Dean Witter Distributors Inc. (the
"Distributor"), an affiliate of the Investment Manager. The Fund has adopted a
Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act. The Plan
provides that the Fund will pay the Distributor a fee which is accrued daily and
paid monthly at the following annual rates: (i) Class A -- up to 0.25% of the
average daily net assets of Class A; (ii) Class B -- 1.0% of the lesser of: (a)
the average daily aggregate gross sales of the Class B shares since the
inception of the Fund (not including reinvestment of dividend or capital gain
distributions) less the average daily aggregate net asset value of the Class B
shares redeemed since the Fund's inception upon which a contingent deferred
sales charge has been imposed or waived; or (b) the average daily net assets of
Class B; and (iii) Class C -- up to 1.0% of the average daily net assets of
Class C. In the case of Class A shares, amounts paid under the Plan are paid to
the Distributor for services provided. In the case of Class B and Class C
shares, amounts paid under the Plan are paid to the Distributor for services
provided and the expenses borne by it and others in the distribution of the
shares of these Classes, including the payment of commissions for sales of these
Classes and incentive compensation to, and expenses of, the account executives
of Dean Witter Reynolds Inc. ("DWR"), an affiliate of the Investment Manager and
Distributor, and others who engage in or support distribution of the 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 these shares to other than current shareholders; and
preparation, printing and distribution of sales literature and advertising
materials. In addition, the Distributor may utilize fees paid pursuant to the
Plan, in the case of Class B shares, to compensate DWR and other selected
broker-dealers for their opportunity costs in advancing such amounts, which
compensation would be in the form of a carrying charge on any unreimbursed
expenses.
<PAGE>
DEAN WITTER VALUE-ADDED MARKET SERIES - EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 (UNAUDITED) CONTINUED
In the case of Class B shares, provided that the Plan continues in effect, any
cumulative expenses incurred by the Distributor but not yet recovered may be
recovered through the payment of future distribution fees from the Fund pursuant
to the Plan and contingent deferred sales charges paid by investors upon
redemption of Class B shares. Although there is no legal obligation for the Fund
to pay expenses incurred in excess of payments made to the Distributor under the
Plan and the proceeds of contingent deferred sales charges paid by investors
upon redemption of shares, if for any reason the Plan is terminated, the
Trustees will consider at that time the manner in which to treat such expenses.
The Distributor has advised the Fund that such excess amounts, including
carrying charges, totaled $63,734,874 at December 31, 1997.
In the case of Class A shares and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 1.0% of the average daily
net assets of Class A or Class C, respectively, will not be reimbursed by the
Fund through payments in any subsequent year, except that expenses representing
a gross sales credit to account executives may be reimbursed in the subsequent
calendar year. For the period ended December 31, 1997, the distribution fee was
accrued for Class A shares and Class C shares at the annual rate of 0.25% and
1.0%, respectively.
The Distributor has informed the Fund that for the period ended December 31,
1997, it received contingent deferred sales charges from certain redemptions of
the Fund's Class A shares, Class B shares and Class C shares of $77, $648,363
and $5,770, respectively and received $121,816 in front-end sales charges from
sales of the Fund's Class A shares. The respective 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 December 31, 1997 aggregated
$193,189,711 and $139,918,183, respectively. Included in the aforementioned are
purchases and sales of U.S. Government securities of $173,620 and $629,964,
respectively. Also included in the aforementioned are sales of common stock of
Morgan Stanley, Dean Witter, Discover & Co., an affiliate of the Investment
Manager, of $609,236 as well as a realized gain of $350,650.
Dean Witter Trust FSB, an affiliate of the Investment Manager and Distributor,
is the Fund's transfer agent. At December 31, 1997, the Fund had transfer agent
fees and expenses payable of approximately $3,100.
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
<PAGE>
DEAN WITTER VALUE-ADDED MARKET SERIES - EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 (UNAUDITED) CONTINUED
the last five years of service. Aggregate pension costs for the six months ended
December 31, 1997, included in Trustees' fees and expenses in the Statement of
Operations, amounted to $824. At December 31, 1997, the Fund had an accrued
pension liability of $82,873 which is included in accrued expenses in the
Statement of Assets and Liabilities.
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
DECEMBER 31, 1997+ JUNE 30, 1997
------------------------------- ----------------------------
(UNAUDITED)
SHARES AMOUNT SHARES AMOUNT
------------ ---------------- ------------ -------------
<S> <C> <C> <C> <C>
CLASS A SHARES*
Sold............................................................. 307,536 $ 10,939,550 -- --
Reinvestment of dividends and distributions...................... 10,591 362,114 -- --
Redeemed......................................................... (17,422) (629,244) -- --
------------ ---------------- ------------ -------------
Net increase -- Class A.......................................... 300,705 10,672,420 -- --
------------ ---------------- ------------ -------------
CLASS B SHARES
Sold............................................................. 4,657,251 163,734,891 13,005,357 $ 378,425,492
Reinvestment of dividends and distributions...................... 1,584,986 54,222,347 865,747 24,803,673
Redeemed......................................................... (3,720,480) (130,787,590) (7,810,681) (228,171,342)
------------ ---------------- ------------ -------------
Net increase -- Class B.......................................... 2,521,757 87,169,648 6,060,423 175,057,823
------------ ---------------- ------------ -------------
CLASS C SHARES*
Sold............................................................. 147,005 5,184,830 -- --
Reinvestment of dividends and distributions...................... 4,390 150,050 -- --
Redeemed......................................................... (22,755) (811,889) -- --
------------ ---------------- ------------ -------------
Net increase -- Class C.......................................... 128,640 4,522,991 -- --
------------ ---------------- ------------ -------------
CLASS D SHARES*
Sold............................................................. 157,296 5,522,983 -- --
Reinvestment of dividends and distributions...................... 49,109 1,679,529 -- --
Redeemed......................................................... (94,172) (3,350,948) -- --
------------ ---------------- ------------ -------------
Net increase -- Class D.......................................... 112,233 3,851,564 -- --
------------ ---------------- ------------ -------------
Net increase in Fund............................................. 3,063,335 $ 106,216,623 6,060,423 $ 175,057,823
------------ ---------------- ------------ -------------
------------ ---------------- ------------ -------------
</TABLE>
- ---------------------
+ On July 28, 1997, 1,052,038 shares representing $36,600,402 were
transferred to Class D.
* For the period July 28, 1997 (issue date) through December 31, 1997.
6. FEDERAL INCOME TAX STATUS
As of December 31, 1997, the Fund had temporary book/tax differences which were
primarily attributable to capital loss deferrals on wash sales.
<PAGE>
DEAN WITTER VALUE-ADDED MARKET SERIES - EQUITY PORTFOLIO
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 DECEMBER 31, FOR THE YEAR ENDED JUNE 30
1997*++ ------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of
period....................... $ 32.96 $ 27.09 $ 23.06 $ 19.23 $ 19.17 $ 16.29
------ --------- --------- ---------- --------- ---------
Net investment income......... 0.08 0.17 0.18 0.19 0.14 0.14
Net realized and unrealized
gain......................... 3.07 6.41 4.23 3.88 0.30 2.86
------ --------- --------- ---------- --------- ---------
Total from investment
operations................... 3.15 6.58 4.41 4.07 0.44 3.00
------ --------- --------- ---------- --------- ---------
Less dividends and
distributions from:
Net investment income...... (0.14) (0.18) (0.26) (0.09) (0.09) (0.12)
Net realized gain.......... (1.30) (0.53) (0.12) (0.15) (0.29) --
------ --------- --------- ---------- --------- ---------
Total dividends and
distributions................ (1.44) (0.71) (0.38) (0.24) (0.38) (0.12)
------ --------- --------- ---------- --------- ---------
Net asset value, end of
period....................... $ 34.67 $ 32.96 $ 27.09 $ 23.06 $ 19.23 $ 19.17
------ --------- --------- ---------- --------- ---------
------ --------- --------- ---------- --------- ---------
TOTAL INVESTMENT RETURN+...... 9.60%(1) 24.71% 19.27% 21.41% 2.26% 18.50%
RATIOS TO AVERAGE NET ASSETS:
Expenses...................... 1.37%(2) 1.45% 1.51% 1.64% 1.68% 1.71%
Net investment income......... 0.44%(2) 0.62% 0.81% 1.01% 0.86% 0.86%
SUPPLEMENTAL DATA:
Net assets, end of period, in
millions..................... $1,492 $1,370 $962 $642 $456 $311
Portfolio turnover rate....... 10%(1) 11% 10% 11% 19% 6%
Average commission rate
paid......................... $ 0.0301 $ 0.0304 $ 0.0302 -- -- --
</TABLE>
- ---------------------
* Prior to July 28, 1997, the Fund issued one class of shares. All shares of
the Fund held prior to that date, other than shares held by certain
employee benefit plans established by Dean Witter Reynolds Inc. and its
affiliate, SPS Transaction Services, Inc., have been designated Class B
shares. Shares held by those employee benefit plans prior to July 28, 1997
have been designated Class D shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VALUE-ADDED MARKET SERIES - EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 28, 1997*
THROUGH
DECEMBER 31,
1997++
- ----------------------------------------------------------------------------------------
<S> <C>
CLASS A SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................. $ 34.79
------
Net investment income................................................. 0.16
Net realized and unrealized gain...................................... 1.24
------
Total from investment operations...................................... 1.40
------
Less dividends and distributions from:
Net investment income.............................................. (0.23)
Net realized gain.................................................. (1.30)
------
Total dividends and distributions..................................... (1.53)
------
Net asset value, end of period........................................ $ 34.66
------
------
TOTAL INVESTMENT RETURN+.............................................. 4.09%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 0.84%(2)
Net investment income................................................. 1.09%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $10,423
Portfolio turnover rate............................................... 10%(1)
Average commission rate paid.......................................... $ 0.0301
</TABLE>
<TABLE>
<S> <C>
CLASS C SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................. $ 34.79
------
Net investment income................................................. 0.05
Net realized and unrealized gain...................................... 1.24
------
Total from investment operations...................................... 1.29
------
Less dividends and distributions from:
Net investment income.............................................. (0.14)
Net realized gain.................................................. (1.30)
------
Total dividends and distributions..................................... (1.44)
------
Net asset value, end of period........................................ $ 34.64
------
------
TOTAL INVESTMENT RETURN+.............................................. 3.77%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 1.59%(2)
Net investment income................................................. 0.32%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $ 4,456
Portfolio turnover rate............................................... 10%(1)
Average commission rate paid.......................................... $ 0.0301
</TABLE>
- ---------------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VALUE-ADDED MARKET SERIES - EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 28, 1997*
THROUGH
DECEMBER 31,
1997++
- ----------------------------------------------------------------------------------------
<S> <C>
CLASS D SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................. $ 34.79
------
Net investment income................................................. 0.20
Net realized and unrealized gain...................................... 1.24
------
Total from investment operations...................................... 1.44
------
Less dividends and distributions from:
Net investment income.............................................. (0.26)
Net realized gain.................................................. (1.30)
------
Total dividends and distributions..................................... (1.56)
------
Net asset value, end of period........................................ $ 34.67
------
------
TOTAL INVESTMENT RETURN+.............................................. 4.19%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 0.58%(2)
Net investment income................................................. 1.36%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $ 40,370
Portfolio turnover rate............................................... 10%(1)
Average commission rate paid.......................................... $ 0.0301
</TABLE>
- ---------------------
* The date shares were first issued. Shareholders who held shares of the Fund
prior to July 28, 1997 (the date the Fund converted to a multiple class
share structure) should refer to the Financial Highlights of Class B to
obtain the historical per share data and ratio information of their shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Calculated based on the net asset value as of the last business day of the
period.
(1) Not annualized.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER
VALUE-ADDED
MARKET SERIES
EQUITY PORTFOLIO
[PHOTO]
SEMIANNUAL REPORT
DECEMBER 31, 1997
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Wayne E. Hedien
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Barry Fink
Vice President, Secretary and General Counsel
Kenton J. Hinchliffe
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Dean Witter Trust FSB
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Dean Witter InterCapital Inc.
Two World Trade Center
New York, New York 10048
The financial statements included herein have been taken from the records
of the Fund without examination by the independent accountants and accordingly
they do not express an opinion thereon.
This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and trustees,
fees, expenses and other pertinent information, please see the prospectus of
the Fund.
This report is not authorized for distribution to prospective investors in the
Fund unless preceded or accompanied by an effective prospectus.
