<PAGE> 1
DEAN WITTER STRATEGIST FUND
Two World Trade Center
New York, New York 10048
DEAR SHAREHOLDER:
- --------------------------------------------------------------------------------
We are pleased to present the semiannual report on the operations of Dean
Witter Strategist Fund for the six month period ended January 31, 1994.
For the six month period ended January 31, 1994, the Fund delivered a total
return of 9.37 percent, eclipsing the Standard & Poor's 500 Index, which
returned 8.96 percent for the same period. Net asset value rose from $14.59 to
$15.38, and quarterly dividends/capital gains disbursements totaled $0.55 per
share. The Fund's total assets climbed from $783 million to $851 million.
Asset allocation funds provide shareholders with the opportunity to
participate in the long-term growth potential of the stock market, as well as
the total return available from fixed-income investments. The Fund's management
team believes that the flexibility to alter the investment landscape of the
portfolio based on both historical and projected data, make it a superior
vehicle for investors seeking compounding growth with additional security and
less volatility.
INVESTMENT STRATEGY
As the Fund entered its new fiscal year, its assets were positioned to
reflect an economy beginning a more robust recovery, as well as the conclusion
of a 12-year trend of declining interest rates. In other words, what a sluggish
recovery had failed to provide over the past 10 quarters, we expect to see in
the next two. Thus, the Fund's strong performance during the period under review
was the direct result of an accelerated rate of growth enjoyed by the U.S.
economy. With 74 percent of its assets invested in the equity market and 25
percent of its assets invested in government and corporate bonds, the Fund was
ideally positioned to capitalize on the economy's strength.
The Fund continues to overweight the cyclical sectors, specifically basic
materials, industrials, energy, technology and consumer cyclicals, as well as
corporate debt paper within these sectors. Holdings that reflected this equity
strategy over the six-month period under review included Chevron Corp.,
Microsoft Corp., Chrysler Corp. and Phelps Dodge. The fixed-income portfolio
consists of U.S. government bonds and U.S. and foreign corporate bonds, all
equally weighted. On January 31, 1994, the total average maturity of the
fixed-income segment of the Fund was approximately 12 years, and all debt
ratings were in excess of investment grade, as set forth by the Fund's
prospectus.
An acceleration in housing demand has sparked new-home construction, while
factory operating rates and automobile sales have returned to historically high
levels. Low inventories among both U.S. and foreign purchasers of steel, forest
products, chemicals and other basic materials have resulted in strong demand for
these raw materials. Looking ahead, we believe that the U.S. economic recovery
will continue at least through the first half of calendar 1994. While economic
strength may appear robust early in 1994, we foresee a second-half slowdown as
the most likely scenario in a continuing sluggish recovery.
We appreciate your support of Dean Witter Strategist Fund and look forward
to continuing to serve your investment needs.
Very truly yours,
Charles A. Fiumefreddo
Chairman of the Board
<PAGE> 2
DEAN WITTER STRATEGIST FUND
PORTFOLIO OF INVESTMENTS January 31, 1994 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
- ----------- -------------
<C> <S> <C>
COMMON STOCKS (73.5%)
AEROSPACE & DEFENSE (2.6%)
200,000 Allied - Signal, Inc........... $ 15,725,000
70,000 Lockheed Corp.................. 4,541,250
46,000 Loral Corp..................... 1,834,250
------------
22,100,500
------------
ALUMINUM (1.3%)
200,000 Reynolds Metals Co............. 10,675,000
------------
AUTOMOTIVE (3.1%)
120,000 Chrysler Corporation........... 7,380,000
46,000 Daimler Benz AEG - ADR*+....... 2,173,500
160,000 Ford Motor Company............. 10,720,000
100,000 General Motors Corp............ 6,137,500
------------
26,411,000
------------
BANKING (2.9%)
100,000 Chemical Banking Corp.......... 3,950,000
120,000 First Interstate Bancorp....... 8,415,000
140,000 Norwest Corp................... 3,692,500
60,000 Wells Fargo & Co............... 8,227,500
------------
24,285,000
------------
BEVERAGES -- SOFT DRINK (1.0%)
210,000 PepsiCo, Inc................... 8,478,750
------------
CABLE/CELLULAR (1.0%)
300,000 Tele Communications, Inc.
Class A........................ 8,175,000
------------
CHEMICALS (4.1%)
120,000 Dow Chemical Co................ 7,620,000
205,000 duPont (E.I.) de Nemours &
Co............................. 11,480,000
200,000 Monsanto Co.................... 15,425,000
------------
34,525,000
------------
CHEMICALS -- SPECIALTY (3.1%)
400,000 Georgia Gulf Corp.*............ 9,700,000
95,000 Morton International, Inc...... 10,200,625
350,000 Praxair, Inc................... 6,562,500
------------
26,463,125
------------
COMMUNICATIONS -- EQUIPMENT &
SOFTWARE (1.7%)
60,000 Cabletron Systems, Inc.*....... 7,207,500
100,000 Wellfleet Communications,
Inc.*.......................... 7,400,000
------------
14,607,500
------------
COMPUTERS -- SOFTWARE (2.5%)
100,000 BMC Software, Inc.*............ 6,350,000
60,000 Microsoft Corporation*......... 5,100,000
300,000 Oracle Systems Corp.*.......... 9,637,500
------------
21,087,500
------------
COMPUTER SOFTWARE SERVICES (1.0%)
280,000 General Motors Class E......... 8,400,000
------------
<CAPTION>
Number
of Shares Value
- ----------- -------------
<C> <S> <C>
COMPUTERS -- SYSTEMS (2.5%)
70,700 Digital Equipment Corp.*....... $ 2,138,675
160,000 Hewlett-Packard Co............. 13,660,000
200,000 Sun Microsystems, Inc.*........ 5,300,000
------------
21,098,675
------------
DRUGS (2.2%)
400,000 Abbott Laboratories............ 11,800,000
200,000 Merck & Co., Inc............... 7,300,000
------------
19,100,000
------------
ELECTRICAL EQUIPMENT (3.8%)
181,000 Emerson Electric Co............ 11,086,250
100,000 General Electric Corp.......... 10,775,000
320,000 Honeywell, Inc................. 10,440,000
------------
32,301,250
------------
ELECTRONIC SEMICONDUCTORS (1.5%)
80,000 Intel Corp..................... 5,220,000
80,000 Motorola, Inc.................. 7,880,000
------------
13,100,000
------------
ENTERTAINMENT/GAMING (1.3%)
124,500 Circus Circus Enterprises,
Inc.*.......................... 4,606,500
135,000 Promus Companies, Inc.*........ 6,834,375
------------
11,440,875
------------
FINANCE (1.3%)
130,000 Federal National Mortgage
Association.................... 11,358,750
------------
FINANCIAL SERVICES (1.2%)
233,733 Travelers, Inc................. 9,846,003
------------
FOODS (2.1%)
218,000 Campbell Soup Co............... 8,447,500
145,000 Quaker Oats Co. (The).......... 9,570,000
------------
18,017,500
------------
HEALTHCARE (2.5%)
400,000 Humana, Inc.*.................. 8,100,000
200,000 U.S. Healthcare, Inc........... 13,250,000
------------
21,350,000
------------
HOUSEHOLD APPLIANCES (1.3%)
158,000 Whirlpool Corp................. 10,684,750
------------
HOUSEHOLD PRODUCTS (1.4%)
200,000 Colgate - Palmolive Co......... 11,925,000
------------
INSURANCE (1.0%)
240,000 Capital Holding Corp........... 8,700,000
------------
MACHINERY -- CONSTRUCTION &
MATERIALS (1.3%)
280,000 Ingersoll Rand Co.............. 10,710,000
------------
</TABLE>
<PAGE> 3
DEAN WITTER STRATEGIST FUND
PORTFOLIO OF INVESTMENTS January 31, 1994 (unaudited)(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Value
- ----------- -------------
<C> <S> <C>
MACHINERY -- AGRICULTURAL (0.8%)
85,000 Deere & Co..................... $ 6,842,500
------------
METALS (1.3%)
200,000 Phelps Dodge Corp.............. 10,850,000
------------
NATURAL GAS -- DISTRIBUTOR (1.4%)
110,400 Pacific Enterprises............ 2,484,000
360,000 Williams Cos., Inc............. 9,405,000
------------
11,889,000
------------
OIL DRILLING & SERVICES (1.9%)
350,000 Dresser Industries, Inc........ 7,743,750
150,000 Schlumberger, Ltd.............. 8,906,250
------------
16,650,000
------------
OIL INTEGRATED -- INTERNATIONAL(4.5%)
105,000 Chevron Corp................... 9,804,375
125,000 Exxon Corp..................... 8,312,500
107,000 Mobil Corp..................... 8,667,000
170,000 Texaco, Inc.................... 11,496,250
------------
38,280,125
------------
PAPER & FOREST PRODUCTS (0.7%)
120,000 Potlatch Corp.*................ 5,655,000
------------
RAILROADS (3.0%)
198,000 Conrail, Inc................... 12,870,000
140,000 CSX Corp....................... 12,845,000
------------
25,715,000
------------
RAILROAD EQUIPMENT (0.9%)
166,500 Trinity Industries, Inc........ 7,305,187
------------
RESTAURANTS (0.4%)
60,000 McDonald's Corp................ 3,645,000
------------
RETAIL (1.7%)
170,000 Penney (J.C.) Co............... 8,903,750
225,200 Wal - Mart Stores, Inc......... 5,967,800
------------
14,871,550
------------
RETAIL -- SPECIALTY (2.5%)
30,000 Carson Pirie Scott & Co.*...... 480,000
230,000 Gap, Inc....................... 9,717,500
540,000 Pier 1 Imports, Inc............ 4,995,000
350,000 Price/Costco, Inc.*............ 6,168,750
------------
21,361,250
------------
SHOES (0.9%)
240,000 Reebok International Ltd....... 7,710,000
------------
STEEL & IRON (1.0%)
370,000 Bethlehem Steel Corp........... 8,741,250
------------
<CAPTION>
Number
of Shares Value
- ----------- -------------
<C> <S> <C>
TELEPHONE (4.8%)
150,000 American Telephone &
Telegraph Co................... $ 8,512,500
120,000 Bell Atlantic Corp............. 6,810,000
400,000 MCI Communications Corp........ 11,000,000
140,000 Nynex Corp..................... 5,740,000
160,000 Pacific Telesis Group.......... 9,220,000
------------
41,282,500
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $518,409,099)... 625,639,540
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount (in Coupon Maturity
thousands) Rate Date
- --------- -------- ----------
<C> <S> <C> <C> <C>
CORPORATE BONDS (17.3%)
BANKING (2.7%)
$ 5,000 Chase Manhattan Corp........ 6.125% 10/15/08 4,863,550
5,000 Chemical Banking Corp....... 6.50 1/15/09 4,957,350
2,000 First USA Bank.............. 5.75 1/15/99 1,991,540
5,000 Fleet Norstar Financial
Group, Inc................. 8.625 1/15/07 5,939,100
5,086 Midlantic Corp.............. 9.25 9/ 1/99 5,797,633
----------
23,549,173
----------
BANKS -- INTERNATIONAL (2.7%)
5,000 Banca Commercial Italiana... 8.25 7/15/07 5,635,050
5,000 Bank of Nova Scotia......... 6.25 9/15/08 5,046,600
5,000 Kansallie-Osake Pankki NY
Branch..................... 10.00 5/ 1/02 6,082,950
5,000 Royal Bank of Scotland
Capital Corp............... 10.125 3/ 1/04 6,360,500
----------
23,125,100
----------
BROKERAGE (1.7%)
5,000 Morgan Stanley Group,
Inc........................ 7.25 10/15/23 4,902,250
3,500 Paine Webber Group, Inc..... 7.75 9/ 1/02 3,757,355
5,000 Shearson Lehman Brothers
Holdings, Inc.............. 9.875 10/15/00 6,002,300
----------
14,661,905
----------
CANADIAN GOVERNMENTS & AGENCIES (0.6%)
5,000 Quebec Hydro Electric
Commonwealth............... 8.625 6/15/29 5,836,000
----------
FINANCIAL SERVICES (1.1%)
3,000 Ahmanson H.F. & Co.......... 8.25 10/ 1/02 3,368,160
5,000 Greentree Financial Corp.... 10.25 6/ 1/02 6,122,500
----------
9,490,660
----------
FOREIGN GOVERNMENTS & AGENCIES (1.2%)
5,000 Province of Saskatchewan,
Canada..................... 8.00 2/ 1/13 5,493,750
5,000 Republic of Italy........... 6.875 9/27/23 4,849,150
----------
10,342,900
----------
</TABLE>
<PAGE> 4
DEAN WITTER STRATEGIST FUND
PORTFOLIO OF INVESTMENTS January 31, 1994 (unaudited)(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount (in Coupon Maturity
thousands) Rate Date Value
- --------- -------- ---------- -------------
<C> <S> <C> <C> <C>
INDUSTRIALS (2.3%)
$ 2,500 Bowater, Inc................ 9.50 % 10/15/12 $2,823,275
5,000 Phillips Van Heusen Corp.... 7.75 11/15/23 5,023,050
5,000 Time Warner Entertainment
Co., Private Placement..... 8.375 7/15/33 5,256,100
3,500 USX-Marthon Corp............ 9.125 1/15/13 3,691,240
-----------
16,793,665
-----------
OIL & GAS PRODUCTS (0.6%)
5,000 Lasmo (USA), Inc............ 8.375 6/ 1/23 5,309,650
-----------
STEEL (0.6%)
5,015 Pohang Iron & Steel, LTD.... 7.50 8/ 1/02 5,402,308
-----------
TELECOMMUNICATIONS (1.0%)
5,000 Tele Communications, Inc.... 7.875 8/ 1/13 5,336,650
3,000 U.S. West Communications,
Inc........................ 7.125 11/15/43 2,973,540
-----------
8,310,190
-----------
UTILITIES -- ELECTRIC (2.8%)
5,000 Commonwealth Edison Co...... 6.40 10/15/05 4,851,850
4,000 Korea Electric Power Co..... 6.375 12/ 1/03 3,958,480
5,000 Long Island Lighting Co..... 6.25 7/15/01 4,860,700
5,000 Norsk Hydro A. S. .......... 7.75 6/15/23 5,258,850
5,000 The United Illuminating
Co......................... 6.20 1/15/99 5,043,750
-----------
23,973,630
-----------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $145,411,949)............... 146,795,181
-----------
<CAPTION>
Principal
Amount (in Coupon Maturity
thousands) Rate Date Value
- --------- -------- ---------- -------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT AGENCIES & OBLIGATIONS (7.8%)
$ 1,121 Federal Home Loan Mortgage
Corp....................... 8.50 % 7/ 1/02 $1,167,978
479 Federal Home Loan Mortgage
Corp....................... 9.00 8/ 1/02 504,897
3,000 Federal National Mortgage
Association................ 6.40 1/13/04 3,036,750
5,000 Private Export Funding
Corp....................... 5.80 2/ 1/04 5,050,850
17,650 Resolution Funding Corp..... 0.00 1/15/18 3,426,635
1,500 U.S. Treasury Bond.......... 10.75 8/15/05 2,125,078
6,500 U.S. Treasury Bond.......... 8.125 8/15/19 7,885,313
3,500 U.S. Treasury Bond.......... 7.125 2/15/23 3,852,188
1,000 U.S. Treasury Note.......... 7.25 11/15/96 1,073,125
6,500 U.S. Treasury Note.......... 7.875 11/15/99 7,376,484
4,100 U.S. Treasury Note.......... 8.50 11/15/00 4,836,079
12,000 U.S. Treasury Note.......... 7.50 11/15/01 13,530,000
10,020 U.S. Treasury Note.......... 7.50 5/15/02 11,328,862
1,500 U.S. Treasury Note.......... 6.25 2/15/03 1,566,328
-----------
TOTAL U.S. GOVERNMENT AGENCIES
& OBLIGATIONS
(IDENTIFIED COST $61,250,587)................
66,760,567
-----------
SHORT-TERM INVESTMENT (0.2%)
U.S. GOVERNMENT AGENCY(A) (0.2%)
FINANCE
2,000 Federal Home Loan Mortgage
Corporation (Amortized Cost
$2,000,000)................ 3.05 2/ 1/94 2,000,000
-----------
TOTAL INVESTMENTS
(IDENTIFIED COST $727,071,635)(B)............
98.8% 841,195,288
CASH AND OTHER ASSETS IN EXCESS
OF LIABILITIES................................ 1.2 9,991,235
------ -----------
NET ASSETS.................................... 100.0% $851,186,523
------ -----------
------ -----------
</TABLE>
- ---------------
* Non-income producing security.
+ American Depository Receipt.
(a) U.S. Government Agency was purchased on a discount basis. The rate shown has
been adjusted to reflect a bond equivalent yield.
(b) The aggregate cost of investments for federal income tax purposes is
$727,893,135; the aggregate gross unrealized appreciation is $121,102,576 and
the aggregate gross unrealized depreciation is $7,800,424, resulting in net
unrealized appreciation of $113,302,152.
See Notes to Financial Statements
<PAGE> 5
DEAN WITTER STRATEGIST FUND
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
January 31, 1994 (unaudited)
- -------------------------------------------
ASSETS:
Investments in securities, at value
(Identified cost $727,071,635)(Note 1)... $ 841,195,288
Cash....................................... 87,096
Receivable for:
Shares of beneficial interest sold....... 3,494,020
Investments sold......................... 24,240,197
Interest................................. 3,698,216
Dividends................................ 850,233
Principal paydowns....................... 53,575
Prepaid expenses and other assets.......... 74,762
-------------
TOTAL ASSETS....................... 873,693,387
-------------
LIABILITIES:
Payable for:
Investments purchased.................... 20,097,320
Shares of beneficial interest
repurchased............................ 1,223,920
Plan of distribution fee (Note 3)........ 606,703
Investment management fee (Note 2)....... 411,940
Accrued expenses (Note 4).................. 166,981
-------------
TOTAL LIABILITIES.................. 22,506,864
-------------
NET ASSETS:
Paid-in-capital............................ 737,184,338
Distributions in excess of net realized
gains on investments..................... (1,241,776)
Net unrealized appreciation................ 114,123,653
Accumulated undistributed net investment
income................................... 1,120,308
-------------
NET ASSETS......................... $ 851,186,523
-------------
-------------
NET ASSET VALUE PER SHARE,
55,336,848 shares outstanding (unlimited
shares authorized of $.01 par value)..... $15.38
-----
-----
STATEMENT OF OPERATIONS
For the six months ended January 31, 1994 (unaudited)
- -------------------------------------------
INVESTMENT INCOME:
INCOME
Interest................................. $ 7,385,168
Dividends................................ 6,456,888
-------------
TOTAL INCOME........................... 13,842,056
-------------
EXPENSES
Plan of distribution fee (Note 3)........ 3,531,985
Investment management fee (Note 2)....... 2,372,799
Transfer agent fees and expenses (Note
4)..................................... 424,400
Registration fees........................ 43,758
Shareholder reports and notices.......... 39,075
Custodian fees........................... 30,008
Professional fees........................ 25,390
Trustees' fees and expenses (Note 4)..... 12,701
Organizational expenses (Note 1)......... 5,436
Other.................................... 4,989
-------------
TOTAL EXPENSES......................... 6,490,541
-------------
NET INVESTMENT INCOME................ 7,351,515
-------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS (Note 1):
Net realized gain on investments......... 4,870,257
Net change in unrealized appreciation on
investments............................ 60,923,770
-------------
NET GAIN ON INVESTMENTS................ 65,794,027
-------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS.................... $ 73,145,542
-------------
-------------
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the
six months ended For the
January 31, 1994 year ended
(unaudited) July 31, 1993
----------------- --------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income....................................................... $ 7,351,515 $ 11,410,889
Net realized gain on investments............................................ 4,870,257 25,392,991
Net change in unrealized appreciation on investments........................ 60,923,770 2,422,221
----------------- --------------
Net increase in net assets resulting from operations...................... 73,145,542 39,226,101
----------------- --------------
Dividends and distributions from:
Net investment income....................................................... (6,974,935) (12,576,422)
Net realized gain........................................................... (22,860,148) (20,203,899)
----------------- --------------
(29,835,083) (32,780,321)
----------------- --------------
Net increase from transactions in shares of beneficial interest (Note 5)...... 25,042,590 335,585,995
----------------- --------------
Total increase............................................................ 68,353,049 342,031,775
NET ASSETS:
Beginning of period........................................................... 782,833,474 440,801,699
----------------- --------------
END OF PERIOD (including undistributed net investment income of
$1,120,308 and $743,729, respectively)...................................... $ 851,186,523 $782,833,474
----------------- --------------
----------------- --------------
See Notes to Financial Statements
</TABLE>
<PAGE> 6
DEAN WITTER STRATEGIST FUND
NOTES TO FINANCIAL STATEMENTS (unaudited)
- --------------------------------------------------------------------------------
1. ORGANIZATION AND ACCOUNTING POLICIES -- Dean Witter Strategist Fund (the
"Fund") is registered under the Investment Company Act of 1940, as amended (the
"Act"), as a non-diversified, open-end management investment company. It was
organized on August 5, 1988 as a Massachusetts business trust and commenced
operations on October 31, 1988.
The following is a summary of significant accounting policies:
A. Valuation of Investments -- (1) an equity portfolio security listed or
traded on the New York or American Stock Exchange is valued at its latest
sale price on that exchange (if there were no sales that day, the security
is valued at the latest bid price); (2) all other portfolio securities for
which over-the-counter market quotations are readily available are valued
at the latest bid price; (3) listed options on debt securities are valued
at the latest sale price on the exchange on which they are listed unless no
sales of such options have taken place that day, in which case they will be
valued at the mean between their latest bid and asked prices. Unlisted
options on debt securities and all options on equity securities are valued
at the mean between their latest bid and asked price; (4) a futures
contract is valued at the latest sale price on the commodities exchange on
which it trades unless the Trustees determine that such price does not
reflect its fair value, in which case it will be valued at its fair value
as determined by the Trustees; (5) when market quotations are not readily
available, portfolio securities are valued at their fair value as
determined in good faith under procedures established by and under the
general supervision of the Trustees (valuation of debt securities for which
market quotations are not readily available may be based upon current
market prices of securities which are comparable in coupon, rating and
maturity or an appropriate matrix utilizing similar factors); (6) certain
of the Fund's portfolio securities may be valued by an outside pricing
service approved by the Fund's Trustees. The pricing service utilizes a
matrix system incorporating security quality, maturity and coupon as the
evaluation model parameters, and/or research and evaluations by its staff,
including review of broker-dealer market price quotations, in determining
what it believes is the fair valuation of the portfolio securities valued
by such pricing service; (7) the fair market value of short-term debt
securities which mature at a date less than sixty days subsequent to the
valuation date will be determined on an amortized cost or amortized value
basis; other short-term debt securities will be valued on a mark-to-market
basis until such time as they reach a maturity of 60 days, whereupon they
will be valued at amortized value unless the Trustees determine such does
not reflect the securities' fair value, in which case these securities will
be valued at their fair value as determined by the Trustees; and (8) the
value of other assets will be determined in good faith at fair value under
procedures established by and under the general supervision of the Fund's
Trustees.
B. Accounting for Investments -- Security transactions are accounted for on
the trade date (date the order to buy or sell is executed). In computing
net investment income, the Fund will not amortize premiums or accrue
discounts on fixed income securities in the portfolio, except those
original issue discounts for which amortization is required for federal
income tax purposes. Additionally, with respect to market discount, a
portion of any capital gain realized upon disposition may be
recharacterized as investment income. Realized gains and losses on security
transactions are determined on the identified cost method. Dividend income
is recorded on the ex-dividend date. Interest income is accrued daily.
<PAGE> 7
DEAN WITTER STRATEGIST FUND
NOTES TO FINANCIAL STATEMENTS (unaudited)(continued)
- --------------------------------------------------------------------------------
C. Repurchase Agreements -- The Fund's custodian takes possession on behalf
of the Fund of the collateral pledged for investments in repurchase
agreements. It is the policy of the Fund to value the underlying collateral
daily on a mark-to-market basis to determine that the value, including
accrued interest, is at least equal to the repurchase price plus accrued
interest. In the event of default of the obligation to repurchase, the Fund
has the right to liquidate the collateral and apply the proceeds in
satisfaction of the obligation.
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 record date. The
amount of dividends and distributions from net investment income and net
realized capital gains are determined in accordance with federal income tax
regulations, which may differ from generally accepted accounting
principles. These "book/tax" differences are either considered temporary or
permanent in nature. To the extent these differences are permanent in
nature, such amounts are reclassified within the capital accounts based on
their federal tax-basis treatment; temporary differences do not require
reclassifications. 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.
F. Organizational Expenses -- The Fund's Investment Manager paid the
organizational expenses of the Fund in the amount of approximately
$110,000. The Fund had reimbursed the Investment Manager for these costs
which were deferred and amortized by the Fund on the straight line method
over a period not to exceed five years from the commencement of operations.
As of January 31, 1994, these expenses were fully amortized.
2. INVESTMENT MANAGEMENT AGREEMENT -- Pursuant to an Investment Management
Agreement (the "Agreement") with Dean Witter InterCapital Inc. (the "Investment
Manager"), the Fund pays its Investment Manager a management fee, calculated and
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: 0.60% of
the portion of the daily net assets not exceeding $500 million; 0.55% of the
portion of the daily net assets exceeding $500 million, but not exceeding $1
billion and 0.50% of the daily net assets of the Fund 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 office space and facilities, equipment, clerical,
bookkeeping and certain legal services, and pays the salaries of all personnel,
including officers of the Fund who are employees of the Investment Manager. The
Investment Manager also bears the cost of telephone services, heat, light, power
and other utilities provided to the Fund.
3. PLAN OF DISTRIBUTION -- Shares of the Fund are distributed by Dean Witter
Distributors Inc. (the "Distributor"), an affiliate of the Investment Manager.
The Fund has adopted a Plan of Distribution (the "Plan") pursuant to Rule 12b-1
under the Act pursuant to which the Fund pays the Distributor
<PAGE> 8
DEAN WITTER STRATEGIST FUND
NOTES TO FINANCIAL STATEMENTS (unaudited)(continued)
- --------------------------------------------------------------------------------
compensation accrued daily and payable monthly at an annual rate of 1.0% of the
lesser of: (a) the average daily aggregate gross sales of the Fund's shares
since the implementation of the Plan on November 8, 1989 (not including
reinvestments of dividends or capital gains distributions), less the average
daily aggregate net asset value of the Fund's shares redeemed since the Plan's
implementation upon which a contingent deferred sales charge has been imposed or
waived; or (b) the average daily net assets of the Fund attributable to shares
issued, net of related shares redeemed, since implementation of the Plan; plus
(ii) 0.25% of the Fund's average daily net assets attributable to shares issued,
net of related shares redeemed, prior to implementation of the Plan. Amounts
paid under the Plan are paid to the Distributor to compensate it for the
services provided and the expenses borne by it and others in the distribution of
the Fund's shares, including the payment of commissions for sales of the Fund's
shares and incentive compensation to and expenses of Dean Witter Reynolds Inc.'s
account executives and others, who engage in or support distribution of the
Fund's shares or who service shareholder accounts, including overhead and
telephone expenses; printing and distribution of prospectuses and reports used
in connection with the offering of the Fund's shares to other than current
shareholders; and preparation, printing and distribution of sales literature and
advertising materials. In addition, the Distributor may be compensated under the
Plan for its opportunity costs in advancing such amounts, which compensation
would be in the form of a carrying charge on any unreimbursed expenses incurred
by the Distributor.
Provided that the Plan continues in effect, any cumulative expenses
incurred by the Distributor, but not yet recovered, may be recovered through
future distribution fees from the Fund and contingent deferred sales charges
from the Fund's shareholders.
The Distributor has informed the Fund that during the six months ended
January 31, 1994, it received approximately $589,000 in deferred sales charges
from certain redemptions of the Fund's shares. The Fund's shareholders pay such
charges which are not an expense of the Fund.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES -- The cost of
purchases and the proceeds from sales of portfolio securities (excluding
short-term investments) for the six months ended January 31, 1994 were as
follows:
<TABLE>
<CAPTION>
Purchases Sales
------------ ------------
<S> <C> <C>
Common Stocks and Corporate Bonds............................ $294,652,601 $266,170,786
U.S. Government Agencies and Obligations..................... 11,107,500 35,800,325
</TABLE>
For the same period, the Fund incurred brokerage commissions of $13,910
with Dean Witter Reynolds Inc. for transactions executed on behalf of the Fund.
On April 1, 1991, the Fund established an unfunded noncontributory defined
pension plan covering all independent Trustees of the Fund who will have served
as an Independent Trustee for at least five years at the time of retirement.
Benefits under this plan are based on years of service and compensation during
the last five years of service. Aggregate pension cost for the six months ended
January 31, 1994, included in Trustees' fees and expenses in the Statement of
Operations, amounted to $4,968. At January 31, 1994, the Fund had an accrued
pension liability of $39,170 which is included in accrued expenses in the
Statement of Assets and Liabilities.
<PAGE> 9
DEAN WITTER STRATEGIST FUND
NOTES TO FINANCIAL STATEMENTS (unaudited)(continued)
- --------------------------------------------------------------------------------
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. For the six months ended January 31,
1994, the Fund incurred transfer agent fees and expenses of approximately
$424,000 of which approximately $74,000 was payable at January 31, 1994.
5. SHARES OF BENEFICIAL INTEREST -- Transactions in shares of beneficial
interest were as follows:
<TABLE>
<CAPTION>
For the six
months ended For the year ended
January 31, 1994 July 31, 1993
---------------------------- ---------------------------
Shares Amount Shares Amount
---------- ------------- ---------- ------------
<S> <C> <C> <C> <C>
Sold............................ 6,878,674 $ 103,369,517 26,799,488 $391,170,413
Reinvestment of dividends and
distributions................. 1,875,768 27,828,928 2,097,936 30,207,970
---------- ------------- ---------- ------------
8,754,442 131,198,445 28,897,424 421,378,383
Repurchased..................... (7,068,204) (106,155,855) (5,884,829) (85,792,388)
---------- ------------- ---------- ------------
Net increase.................... 1,686,238 $ 25,042,590 23,012,595 $335,585,995
---------- ------------- ---------- ------------
---------- ------------- ---------- ------------
</TABLE>
<PAGE> 10
DEAN WITTER STRATEGIST FUND
FINANCIAL HIGHLIGHTS (unaudited)
- --------------------------------------------------------------------------------
Selected data and ratios for a share of beneficial interest outstanding
throughout each period:
<TABLE>
<CAPTION>
For the period
For the six For the year ended July 31, October 31, 1988*
months ended ----------------------------------------- through
January 31, 1994 1993 1992 1991 1990 July 31, 1989
---------------- -------- -------- -------- -------- -----------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of
period..................... $ 14.59 $ 14.39 $ 13.09 $ 11.65 $ 11.37 $ 9.45
---------------- -------- -------- -------- -------- -----------------
Net investment income...... 0.14 0.26 0.27 0.27 0.23 0.38
Net realized and unrealized
gain on investments...... 1.20 0.81 1.27 1.50 0.55 1.84
---------------- -------- -------- -------- -------- -----------------
Total from investment
operations................. 1.34 1.07 1.54 1.77 0.78 2.22
---------------- -------- -------- -------- -------- -----------------
Less dividends and
distributions:
Dividends from net
investment income........ (0.13) (0.31) (0.24) (0.26) (0.29) (0.30)
Distributions from net
realized gains on
investments.............. (0.42) (0.56) 0.00 (0.07) (0.21) 0.00
---------------- -------- -------- -------- -------- -----------------
Total dividends and
distributions.............. (0.55) (0.87) (0.24) (0.33) (0.50) (0.30)
---------------- -------- -------- -------- -------- -----------------
Net asset value, end
of period.................. $ 15.38 $ 14.59 $ 14.39 $ 13.09 $ 11.65 $ 11.37
---------------- -------- -------- -------- -------- -----------------
---------------- -------- -------- -------- -------- -----------------
TOTAL INVESTMENT RETURN+..... 9.37%(1) 7.59% 11.88% 15.67% 7.21% 23.76%(1)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands)................. $851,187 $782,833 $440,802 $238,432 $195,687 $47,921
Ratio of expenses to average
net assets................. 0.80%(2) 1.62% 1.63% 1.59% 1.53% 0.97%(2)(3)
Ratio of net investment
income to average net
assets..................... 0.91%(2) 1.90% 2.19% 2.37% 2.39% 6.00%(2)(3)
Portfolio turnover rate...... 38% 98% 79% 140% 101% 70%
</TABLE>
- ---------------
* Date of commencement of operations.
+ Does not reflect the deduction of sales load.
(1) Not annualized.
(2) Annualized.
(3) If the Fund had borne all its expenses that were assumed or waived by the
Investment Manager, the above expense ratio would have been 1.48% and the
above investment income -- net ratio would have been 5.48%.
See Notes to Financial Statements
<PAGE> 11
(This Page Intentionally Left Blank)
<PAGE> 12
TRUSTEES
Jack F. Bennett
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. John E. Jeuck
Dr. Manuel H. Johnson
Paul Kolton
Michael E. Nugent
Edward R. Telling
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Sheldon Curtis
Vice President, Secretary and General Counsel
Mark A. Bavoso
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Dean Witter Trust Company
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
LEGAL COUNSEL
Sheldon Curtis
Two World Trade Center
New York, New York 10048
INDEPENDENT ACCOUNTANTS
Price Waterhouse
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Dean Witter InterCapital Inc.
Two World Trade Center
New York, New York 10048
The financial statements included herein have been taken from the records of
the Fund without examination by the independent accountants and accordingly
they do not express an opinion thereon.
This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and trustees,
fees, expenses and other pertinent information, please see the prospectus of
the Fund.
This report is not authorized for distribution to prospective investors in the
Fund unless preceded or accompanied by an effective prospectus.
DEAN WITTER
STRATEGIST FUND
[PHOTO]
SEMIANNUAL REPORT
JANUARY 31, 1994
<PAGE> 13
APPENDIX TO ELECTRONIC FORMAT DOCUMENT
The back cover of the Semiannual Report in the printed version contains
a picture of a compass with a map in the background.
