<PAGE>
DEAN WITTER STRATEGIST FUND TWO WORLD TRADE CENTER, NEW YORK, NEW YORK
10048
LETTER TO THE SHAREHOLDERS JANUARY 31, 1996
DEAR SHAREHOLDER:
The six-month period ended January 31, 1996 was favorable to both equity and
fixed-income investors.
Dean Witter Strategist Fund, an asset allocation fund, provides shareholders
with the opportunity to participate in the long term wealth-building potential
of the stock market and the total return characteristics of fixed income
investments. The Fund produced a total return of 9.41 percent for the six-month
period ended January 31, 1996, compared to a total return of 14.53 percent for
the Standard & Poor's 500 Composite Stock Price Index and a total return of 7.74
percent for the Lehman Brothers Government/Corporate Bond Index. On January 31,
1996, the Fund had total assets exceeding $1.28 billion.
PORTFOLIO STRATEGY
As we enter the second half of the fiscal year, we have repositioned the Fund's
asset base to benefit from a gradual economic recovery, declining interest
rates, and relatively benign inflation by increasing our equity exposure
throughout the winter months. Our greatest concern was that the Federal Reserve,
out of an overriding anti-inflation vigilance, would resist further cuts in the
federal-funds rate and the discount rate and thus choke off the economic
recovery, ultimately risking recession. However, the Federal Reserve reduced
rates further, surprisingly sooner than we had expected, and provided support to
our investment thesis and asset allocation.
The Fund ended the period with targeted asset allocation of 75 percent in
equities, 20 percent in bonds and 5 percent in cash equivalents. Within a highly
diversified equity portfolio, favored core industry weightings included
technology (13 percent of assets), financial services (10 percent), consumer
staples (8 percent) and basic materials companies (5 percent). Representative
equity holdings on January 31, 1996 included International Business Machines
Corp., Hewlett-Packard Co. and Oracle Corp. (technology); Citicorp, Morgan
Stanley Group, Inc. and Roosevelt Financial Group, Inc. (financial services);
Merck &
<PAGE>
DEAN WITTER STRATEGIST FUND
LETTER TO THE SHAREHOLDERS JANUARY 31, 1996, CONTINUED
Co., Inc., Campbell Soup Co., and Chiron Corp. (consumer staples); and Monsanto
Co., Bethlehem Steel Corp. and Phelps-Dodge Corp. (basic materials companies).
On January 31, 1996, the fixed-income portfolio consisted of U.S. government
bonds, U.S. corporate bonds and foreign debt instruments. The bulk of the
portfolio's holdings average in maturities from 8 to 12 years and all debt
ratings are above investment grade, as proscribed by our prospectus.
LOOKING AHEAD
Of course, the stock market cannot be expected to rise unabated forever.
Following further advancement in 1996 leading up to the presidential election,
it is reasonable to expect some turbulence. A post election surprise could be a
resurgence of inflationary pressure that would inspire another round of Federal
Reserve Board tightening in 1997.
We expect the economy to experience a protracted economic slowdown extending
into the latter part of 1996. Falling interest rates, expanding price/earnings
ratios and modest earnings growth on the order of 5 percent should continue to
drive the broader markets higher. However, we expect the market to narrow, as
fewer companies will be able to sustain their recent growth rates.
We appreciate your support of Dean Witter Strategist Fund and look forward to
continuing to serve your investment needs.
Very truly yours,
[SIGNATURE]
CHARLES A. FIUMEFREDDO
CHAIRMAN OF THE BOARD
On December 19, 1995, a special meeting of the Fund's shareholders was held for
the purpose of voting on the following issue, the results of which were as
follows:
Approval of an amendment to the Fund's Plan of Distribution under Rule 12b-1:
<TABLE>
<S> <C>
For.................................................................. 24,849,816
Against.............................................................. 2,913,017
Abstain.............................................................. 4,350,640
</TABLE>
<PAGE>
DEAN WITTER STRATEGIST FUND
PORTFOLIO OF INVESTMENTS JANUARY 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (65.0%)
AEROSPACE & DEFENSE (1.4%)
216,000 Honeywell, Inc................... $ 10,989,000
125,700 Rockwell International Corp...... 7,369,162
-----------------
18,358,162
-----------------
ALUMINUM (0.7%)
150,000 Aluminum Co. of America.......... 8,325,000
4,000 Reynolds Metals Co............... 214,000
-----------------
8,539,000
-----------------
AUTO PARTS (0.1%)
9,000 TRW, Inc......................... 760,500
10,200 Superior Industries
International, Inc............... 249,900
-----------------
1,010,400
-----------------
AUTOMOTIVE (1.3%)
100,000 Chrysler Corp.................... 5,775,000
199,700 Ford Motor Co.................... 5,916,112
100,000 General Motors Corp.............. 5,262,500
-----------------
16,953,612
-----------------
BANKS - MONEY CENTER (1.4%)
135,000 Citicorp......................... 9,973,125
96,000 Morgan (J.P.) & Co., Inc......... 7,800,000
-----------------
17,773,125
-----------------
BANKS - REGIONAL (2.6%)
140,000 BankAmerica Corp................. 9,432,500
150,000 First Bank System, Inc........... 7,875,000
11,600 Integra Financial Corp........... 746,750
200,000 Norwest Corp..................... 6,875,000
40,300 Wells Fargo & Co................. 9,455,387
-----------------
34,384,637
-----------------
BEVERAGES - SOFT DRINKS (0.8%)
163,900 PepsiCo Inc...................... 9,772,537
-----------------
BIOTECHNOLOGY (2.0%)
150,000 Autoimmune, Inc.*................ 2,025,000
80,000 Biochem Pharma, Inc.*............ 3,500,000
83,600 Biogen Inc.*..................... 5,841,550
69,900 Chiron Corp.*.................... 8,003,550
120,000 Liposome Co., Inc.*.............. 2,880,000
136,000 Oravax Inc.*..................... 1,870,000
140,000 Regeneron Pharmaceuticals,
Inc.*............................ 2,117,500
-----------------
26,237,600
-----------------
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
BREWERY (0.1%)
13,000 Anheuser-Busch Companies, Inc.... $ 903,500
-----------------
BROKERAGE (1.3%)
140,000 Merrill Lynch & Co., Inc......... 7,962,500
194,000 Morgan Stanley Group, Inc........ 9,239,250
-----------------
17,201,750
-----------------
CHEMICALS (1.5%)
110,000 Dow Chemical Co.................. 8,195,000
10,000 Du Pont (E.I.) de Nemours & Co.,
Inc.............................. 768,750
78,000 Monsanto Co...................... 10,159,500
-----------------
19,123,250
-----------------
CHEMICALS - SPECIALTY (1.5%)
257,600 Georgia Gulf Corp................ 8,211,000
16,000 PPG Industries, Inc.............. 748,000
300,000 Praxair, Inc..................... 10,200,000
12,000 Rohm & Haas Co................... 831,000
-----------------
19,990,000
-----------------
COMMUNICATIONS - EQUIPMENT & SOFTWARE (0.7%)
108,700 Cisco Systems, Inc.*............. 9,035,687
-----------------
COMPUTER EQUIPMENT (1.2%)
166,200 Komag Inc.*...................... 4,840,575
13,800 Read Rite Corp.*................. 248,400
176,800 Seagate Technology, Inc.*........ 10,475,400
-----------------
15,564,375
-----------------
COMPUTER SERVICES (1.3%)
165,000 Diebold, Inc..................... 9,219,375
140,000 General Motors Corp. (Class E)... 7,770,000
-----------------
16,989,375
-----------------
COMPUTER SOFTWARE (2.1%)
160,000 Broderbund Software, Inc.*....... 7,680,000
103,400 Microsoft Corp.*................. 9,551,575
200,000 Oracle Corp.*.................... 9,525,000
-----------------
26,756,575
-----------------
COMPUTERS - SYSTEMS (2.6%)
12,500 Apple Computer, Inc.............. 343,750
122,900 Hewlett-Packard Co............... 10,415,775
75,200 International Business Machines
Corp............................. 8,178,000
225,000 Silicon Graphics, Inc.*.......... 6,328,125
170,000 Sun Microsystems, Inc.*.......... 7,798,750
-----------------
33,064,400
-----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER STRATEGIST FUND
PORTFOLIO OF INVESTMENTS JANUARY 31, 1996 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
DRUGS & HEALTHCARE (1.5%)
210,000 Abbott Laboratories.............. $ 8,872,500
112,000 Johnson & Johnson................ 10,752,000
-----------------
19,624,500
-----------------
ELECTRICAL EQUIPMENT (1.0%)
71,000 Emerson Electric Co.............. 5,946,250
89,300 General Electric Co.............. 6,853,775
-----------------
12,800,025
-----------------
ELECTRICAL HOUSEHOLD APPLIANCES (1.1%)
291,500 Maytag Corp...................... 5,720,688
150,000 Whirlpool Corp................... 8,156,250
-----------------
13,876,938
-----------------
ELECTRONICS - SEMICONDUCTORS/COMPONENTS (0.4%)
9,200 Intel Corp....................... 507,150
100,000 Texas Instruments Inc............ 4,650,000
-----------------
5,157,150
-----------------
ENTERTAINMENT (1.7%)
400,000 Carnival Corp. (Class A)......... 10,800,000
350,000 Circus Circus Enterprises,
Inc.*............................ 11,156,250
-----------------
21,956,250
-----------------
FINANCIAL - MISCELLANEOUS (1.6%)
110,000 Federal Home Loan Mortgage
Corp............................. 9,418,750
320,000 Federal National Mortgage
Assoc............................ 11,040,000
-----------------
20,458,750
-----------------
FINANCIAL SERVICES (1.4%)
160,000 Beneficial Corp.................. 7,820,000
160,000 Travelers Group, Inc............. 10,520,000
-----------------
18,340,000
-----------------
FOODS (1.6%)
168,000 Campbell Soup Co................. 10,647,000
19,000 ConAgra, Inc..................... 871,625
150,000 General Mills, Inc............... 8,625,000
-----------------
20,143,625
-----------------
FOREST PRODUCTS, PAPER & PACKAGING (0.7%)
200,000 Champion International Corp...... 8,950,000
27,000 Louisiana-Pacific Corp........... 688,500
-----------------
9,638,500
-----------------
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
HARDWARE & TOOLS (0.1%)
18,000 Stanley Works.................... $ 927,000
-----------------
HEALTHCARE - MISCELLANEOUS (0.8%)
374,000 Humana, Inc.*.................... 10,331,750
-----------------
HOSPITAL MANAGEMENT (0.7%)
173,000 Columbia/HCA Healthcare Corp..... 9,623,125
-----------------
HOUSEHOLD PRODUCTS (2.1%)
126,700 Colgate-Palmolive Co............. 9,375,800
100,000 Procter & Gamble Co.............. 8,387,500
184,700 Tambrands, Inc................... 9,073,388
-----------------
26,836,688
-----------------
INDUSTRIALS (0.0%)
5,500 AlliedSignal, Inc................ 274,313
-----------------
INSURANCE (0.7%)
100,000 American International Group,
Inc.............................. 9,687,500
-----------------
LABELS (0.1%)
17,000 Avery Dennison Corp.............. 907,375
-----------------
MACHINERY - CONSTRUCTION & MATERIALS (0.8%)
111,000 Ingersoll-Rand Co................ 4,453,875
12,000 Johnson Controls, Inc............ 867,000
27,000 Masco Corp....................... 789,750
120,000 Parker-Hannifin Corp............. 4,095,000
-----------------
10,205,625
-----------------
MEDICAL PRODUCTS & SUPPLIES (1.0%)
19,000 Baxter International, Inc........ 864,500
106,600 Cordis Corp...................... 11,486,150
-----------------
12,350,650
-----------------
METALS - MISCELLANEOUS (0.6%)
115,700 Phelps Dodge Corp................ 7,289,100
-----------------
MOBIL HOME & RECREATION (0.1%)
35,000 Fleetwood Enterprises, Inc....... 892,500
-----------------
MULTI-LINE INSURANCE (0.8%)
90,000 CIGNA Corp....................... 10,676,250
-----------------
OFFICE EQUIPMENT & SUPPLIES (0.9%)
282,200 Alco Standard Corp............... 11,076,350
17,000 Pitney Bowes, Inc................ 769,250
-----------------
11,845,600
-----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER STRATEGIST FUND
PORTFOLIO OF INVESTMENTS JANUARY 31, 1996 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
OIL DRILLING & SERVICES (1.6%)
267,300 Dresser Industries, Inc.......... $ 6,949,800
186,300 Schlumberger Ltd. (Netherlands
Antilles)........................ 13,064,288
-----------------
20,014,088
-----------------
OIL INTEGRATED - INTERNATIONAL (4.0%)
248,400 Chevron Corp..................... 12,885,750
155,800 Exxon Corp....................... 12,502,950
114,100 Mobil Corp....................... 12,636,575
161,100 Texaco, Inc...................... 13,028,963
-----------------
51,054,238
-----------------
PHARMACEUTICALS (3.5%)
99,200 American Home Products Corp...... 10,118,400
191,800 Lilly (Eli) & Co................. 11,028,500
160,200 Merck & Co., Inc................. 11,254,050
153,000 Pfizer, Inc...................... 10,518,750
15,000 Schering-Plough Corp............. 811,875
8,000 Warner-Lambert Co................ 750,000
-----------------
44,481,575
-----------------
PUBLISHING - NEWSPAPER (0.1%)
13,000 Gannett Co., Inc................. 825,500
-----------------
RAILROAD EQUIPMENT (0.6%)
216,500 Trinity Industries, Inc.......... 7,577,500
-----------------
RAILROADS (0.5%)
83,100 Conrail, Inc..................... 5,879,325
-----------------
RESTAURANTS (0.4%)
115,000 McDonald's Corp.................. 5,778,750
-----------------
RETAIL - DEPARTMENT STORES (1.8%)
140,000 Dayton-Hudson Corp............... 10,465,000
246,000 May Department Stores Co......... 10,947,000
-----------------
21,412,000
-----------------
RETAIL - DRUG STORES (0.1%)
25,000 Rite Aid Corp.................... 803,125
-----------------
RETAIL - SPECIALTY (2.9%)
300,000 Bed, Bath & Beyond, Inc.*........ 11,887,500
250,000 Home Depot, Inc.................. 11,500,000
600,000 Pier 1 Imports, Inc.............. 7,050,000
405,000 Price/Costco, Inc.*.............. 6,277,500
24,000 Super Valu Stores, Inc........... 744,000
-----------------
37,459,000
-----------------
RETAIL - SPECIALTY APPAREL (0.7%)
203,000 Gap, Inc......................... 9,566,375
-----------------
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
SAVINGS & LOAN ASSOCIATIONS (1.5%)
362,000 California Federal Bank*......... $ 5,656,250
115,000 Golden West Financial Corp....... 5,951,250
435,000 Roosevelt Financial Group,
Inc.............................. 7,503,750
-----------------
19,111,250
-----------------
SHIPPING (0.4%)
225,800 American President Companies,
Ltd.............................. 4,713,575
-----------------
SHOES (1.1%)
195,000 Nike, Inc. (Class B)............. 13,601,250
-----------------
STEEL & IRON (0.8%)
687,000 Bethlehem Steel Corp.*........... 10,390,875
-----------------
TELECOMMUNICATIONS (0.9%)
200,000 ITT Corp.*....................... 11,100,000
-----------------
TELEPHONE - LONG DISTANCE (0.7%)
315,000 MCI Communications Corp.......... 8,977,500
-----------------
TEXTILES - APPAREL MANUFACTURERS (0.3%)
131,000 Liz Claiborne, Inc............... 3,651,625
13,000 VF Corp.......................... 656,500
-----------------
4,308,125
-----------------
TOBACCO (0.8%)
110,000 Philip Morris Companies, Inc..... 10,230,000
-----------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $680,503,725)... 832,785,250
-----------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- -----------------------------------------------------------------
<C> <S> <C>
CORPORATE BONDS (9.5%)
BANKS (1.4%)
$ 5,000 First Nationwide Bank 10.00% due
10/01/06......................... 6,033,800
5,050 Midland Bank PLC
7.65% due 05/01/25
(United Kingdom)................. 5,628,275
5,000 Santander Financial Issuances
7.875% due 04/15/05.............. 5,520,350
-----------------
17,182,425
-----------------
BROADCAST MEDIA (0.4%)
4,900 Time Warner Entertainment Co.
8.375% due 07/15/33.............. 5,194,637
-----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER STRATEGIST FUND
PORTFOLIO OF INVESTMENTS JANUARY 31, 1996 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- -----------------------------------------------------------------
<C> <S> <C>
BROKERAGE (0.8%)
$ 4,950 Lehman Brothers Holdings, Inc.
8.80% due 03/01/15............... $ 5,685,322
5,000 Paine Webber Group, Inc. 7.625%
due 02/15/14..................... 5,049,650
-----------------
10,734,972
-----------------
FINANCIAL (1.1%)
5,000 CCP Insurance, Inc.
10.50% due 12/15/04.............. 5,841,100
7,950 RHG Finance Corp.
8.875% due 10/01/05.............. 8,362,764
-----------------
14,203,864
-----------------
FOREIGN GOVERNMENT (1.6%)
4,900 Italy (Republic of)
6.875% due 09/27/23.............. 4,770,640
5,000 Province of British Columbia
6.50% due 01/15/26 (Canada)...... 4,993,750
5,000 Province of Ontario
7.75% due 06/04/02 (Canada)...... 5,497,400
4,950 Province of Quebec
8.625% due 12/01/26 (Canada)..... 5,836,892
-----------------
21,098,682
-----------------
HOTELS (0.3%)
3,950 La Quinta Motor Inns, Inc. 7.40%
due 09/15/05..................... 4,064,590
-----------------
INDUSTRIALS (0.7%)
4,950 Brascan Ltd.
7.375% due 10/01/02 (Canada)..... 5,110,083
3,000 Joy Technologies Inc. 10.25% due
09/01/03......................... 3,400,110
-----------------
8,510,193
-----------------
INSURANCE (0.5%)
6,000 Prudential Insurance - 144A**
7.65% due 07/01/07............... 6,435,000
-----------------
NATURAL GAS (0.6%)
5,100 Occidental Petroleum Corp.
11.125% due 08/01/10............. 7,120,212
-----------------
RESTAURANTS (0.4%)
5,000 Darden Restaurants, Inc. 7.125%
due 02/01/16..................... 4,962,500
-----------------
TELECOMMUNICATIONS (0.7%)
8,000 TCI Communications, Inc. 8.75%
due 08/01/15..................... 8,863,760
-----------------
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- -----------------------------------------------------------------
<C> <S> <C>
TOBACCO (0.6%)
$ 7,950 RJR Nabisco, Inc.
8.75% due 08/15/05............... $ 8,301,390
-----------------
UTILITIES - ELECTRIC (0.4%)
4,950 Niagara Mohawk Power Corp. 9.25%
due 10/01/01..................... 5,044,446
-----------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $118,139,425)... 121,716,671
-----------------
U.S. GOVERNMENT AGENCIES & OBLIGATIONS (10.3%)
630 Federal Home Loan Mortgage Corp.
8.50% due 07/01/02............... 651,436
249 Federal Home Loan Mortgage Corp.
9.00% due 08/01/02............... 260,223
2,500 Private Export Funding Corp.
7.95% due 11/01/06............... 2,823,775
15,850 U.S. Treasury Bond
7.625% due 02/15/25.............. 19,193,359
1,000 U.S. Treasury Note
7.25% due 11/15/96............... 1,016,875
10,000 U.S. Treasury Note
6.50% due 05/15/97............... 10,190,625
5,000 U.S. Treasury Note
6.375% due 01/15/99.............. 5,178,125
17,050 U.S. Treasury Note
6.50% due 04/30/99............... 17,761,305
25,000 U.S. Treasury Note
6.875% due 08/31/99.............. 26,378,906
8,500 U.S. Treasury Note
7.875% due 11/15/99.............. 9,280,937
5,000 U.S. Treasury Note
6.875% due 03/31/00.............. 5,305,469
7,000 U.S. Treasury Note
7.50% due 11/15/01............... 7,744,844
13,950 U.S. Treasury Note
5.75% due 08/15/03............... 14,152,711
8,900 U.S. Treasury Note
7.50% due 02/15/05............... 10,080,641
2,000 U.S. Treasury Note
5.875% due 11/15/05.............. 2,043,437
-----------------
TOTAL U.S. GOVERNMENT AGENCIES &
OBLIGATIONS
(IDENTIFIED COST $129,349,012)... 132,062,668
-----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER STRATEGIST FUND
PORTFOLIO OF INVESTMENTS JANUARY 31, 1996 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- -----------------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENTS (17.9%)
U.S. GOVERNMENT AGENCY (a) (17.9%)
$ 229,000 Federal Home Loan Mortgage Corp.
5.80% due 02/01/96............... $ 229,000,000
-----------------
REPURCHASE AGREEMENT (0.0%)
838 The Bank of New York 5.75% due
02/01/96 (dated 01/31/96;
proceeds $837,917; collateralized
by $1,129,263 U.S. Treasury Strip
due 05/15/01 valued at $854,539)
(Identified Cost $837,783)....... 837,783
-----------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $229,837,783)... 229,837,783
-----------------
TOTAL INVESTMENTS
(IDENTIFIED COST
$1,157,829,945) (B)........ 102.7% 1,316,402,372
LIABILITIES IN EXCESS OF
OTHER ASSETS............... (2.7) (34,323,185)
----- -------------
NET ASSETS................. 100.0% $1,282,079,187
----- -------------
----- -------------
<FN>
- ---------------------
* Non-income producing security.
** Resale is restricted to qualified institutional investors.
(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 is $1,158,892,440; the
aggregate gross unrealized appreciation is $169,428,459 and the aggregate
gross unrealized depreciation is $11,918,527, resulting in net unrealized
appreciation of $157,509,932.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER STRATEGIST FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1996 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $1,157,829,945).......................... $1,316,402,372
Receivable for:
Investments sold........................................ 14,204,158
Interest................................................ 5,713,058
Shares of beneficial interest sold...................... 2,231,816
Dividends............................................... 622,609
Principal paydowns...................................... 16,451
Prepaid expenses and other assets........................... 80,588
--------------
TOTAL ASSETS........................................... 1,339,271,052
--------------
LIABILITIES:
Payable for:
Investments purchased................................... 54,369,266
Plan of distribution fee................................ 995,376
Shares of beneficial interest repurchased............... 893,105
Investment management fee............................... 631,574
Accrued expenses and other payables......................... 247,636
Organizational expenses..................................... 54,908
--------------
TOTAL LIABILITIES...................................... 57,191,865
--------------
NET ASSETS:
Paid-in-capital............................................. 1,124,638,196
Net unrealized appreciation................................. 158,572,427
Accumulated undistributed net investment income............. 3,248,373
Accumulated net realized loss............................... (4,379,809)
--------------
NET ASSETS............................................. $1,282,079,187
--------------
--------------
NET ASSET VALUE PER SHARE,
80,848,122 SHARES OUTSTANDING (UNLIMITED SHARES AUTHORIZED
OF $.01 PAR VALUE)........................................
$15.86
--------------
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER STRATEGIST FUND
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JANUARY 31, 1996 (UNAUDITED)
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Interest.................................................... $12,365,384
Dividends................................................... 5,576,618
-----------
TOTAL INCOME........................................... 17,942,002
-----------
EXPENSES
Plan of distribution fee.................................... 4,217,446
Investment management fee................................... 2,820,226
Transfer agent fees and expenses............................ 514,531
Registration fees........................................... 87,282
Shareholder reports and notices............................. 59,023
Custodian fees.............................................. 48,174
Professional fees........................................... 36,341
Trustees' fees and expenses................................. 11,795
Other....................................................... 1,654
-----------
TOTAL EXPENSES......................................... 7,796,472
-----------
NET INVESTMENT INCOME.................................. 10,145,530
-----------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain........................................... 12,586,461
Net change in unrealized appreciation....................... 69,131,075
-----------
NET GAIN............................................... 81,717,536
-----------
NET INCREASE................................................ $91,863,066
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER STRATEGIST FUND
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS FOR THE YEAR
ENDED ENDED
JANUARY 31, 1996 JULY 31,
(UNAUDITED) 1995
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income....................................... $ 10,145,530 $ 18,982,173
Net realized gain........................................... 12,586,461 56,953,694
Net change in unrealized appreciation....................... 69,131,075 45,494,865
------------------ ------------
NET INCREASE........................................... 91,863,066 121,430,732
------------------ ------------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net investment income....................................... (10,726,896) (15,997,877)
Net realized gain........................................... (70,591,947) (25,273,043)
------------------ ------------
TOTAL.................................................. (81,318,843) (41,270,920)
------------------ ------------
Net increase (decrease) from transactions in shares of
beneficial interest....................................... 393,939,638 (8,813,901)
------------------ ------------
TOTAL INCREASE......................................... 404,483,861 71,345,911
NET ASSETS:
Beginning of period......................................... 877,595,326 806,249,415
------------------ ------------
END OF PERIOD
(INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF
$3,248,373 AND $3,987,969, RESPECTIVELY)................ $1,282,079,187 $877,595,326
------------------ ------------
------------------ ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER STRATEGIST FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1996 (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. The Fund was organized as a Massachusetts
business trust on August 5, 1988 and commenced operations on October 31, 1988.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) an equity security listed or traded on the
New York or American Stock Exchange 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; (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, portfolio securities are
valued at their fair value as determined in good faith under procedures
established by and under the general supervision of the Trustees; (4) certain of
the Fund's portfolio securities may be valued by an outside pricing service
approved by the Trustees. The pricing service utilizes a matrix system
incorporating security quality, maturity and coupon as the evaluation model
parameters, and/or research and evaluations by its staff, including review of
broker-dealer market price quotations, if available, in determining what it
believes is the fair valuation of the portfolio securities valued by such
pricing service; and (5) short-term debt securities having a maturity date of
more than sixty days at time of purchase are valued on a mark-to-market basis
until sixty days prior to maturity and thereafter at amortized cost based on
their value on the 61st day. Short-term debt securities having a maturity date
of sixty days or less at the time of purchase are valued at amortized cost.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
Discounts are accreted over the life of the respective securities. Dividend
income and other distributions are recorded on the ex-dividend date. Interest
income is accrued daily.
C. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.
<PAGE>
DEAN WITTER STRATEGIST FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1996 (UNAUDITED) CONTINUED
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends
and distributions to its shareholders on the record date. The amount of
dividends and distributions from net investment income and net realized capital
gains are determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for financial reporting purposes but not for tax purposes are reported as
dividends in excess of net investment income or distributions in excess of net
realized capital gains. To the extent they exceed net investment income and net
realized capital gains for tax purposes, they are reported as distributions of
paid-in-capital.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement with Dean Witter InterCapital
Inc. (the "Investment Manager"), the Fund pays a management fee, accrued daily
and payable monthly, by applying the following annual rates to the net assets of
the Fund determined at the close of each business day: 0.60% to the portion of
daily net assets not exceeding $500 million; 0.55% to the portion of daily net
assets exceeding $500 million but not exceeding $1 billion; 0.50% 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 pursuant
to which the Fund pays the Distributor compensation, accrued daily and payable
monthly, at an annual rate of 1.0% of the lesser of: (a) the average daily
aggregate gross sales of the Fund's shares since the implementation of the Plan
on November 8, 1989 (not including reinvestment of dividend or capital gain
distributions) less the average daily aggregate net asset
<PAGE>
DEAN WITTER STRATEGIST FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1996 (UNAUDITED) CONTINUED
value of the Fund's shares redeemed since the Fund's implementation of the Plan
upon which a contingent deferred sales charge has been imposed or upon which
such charge has been waived; or (b) the Fund's average daily net assets
attributable to shares issued, net of related shares redeemed, since
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, the account executives of Dean Witter Reynolds Inc. ("DWR"), an
affiliate of the Investment Manager and Distributor, and other employees or
selected broker-dealers who engage in or support distribution of the Fund's
shares or who service shareholder accounts, including overhead and telephone
expenses; printing and distribution of prospectuses and reports used in
connection with the offering of the Fund's shares to other than current
shareholders and preparation, printing and distribution of sales literature and
advertising materials. In addition, the Distributor may be compensated under the
Plan for its opportunity costs in advancing such amounts, which compensation
would be in the form of a carrying charge on any unreimbursed expenses incurred
by the Distributor.
Provided that the Plan continues in effect, any cumulative expenses incurred but
not yet recovered, may be recovered through future distribution fees from the
Fund and contingent deferred sales charges from the Fund's shareholders.
The Distributor has informed the Fund that for the six months ended January 31,
1996, it received approximately $720,000 in contingent deferred sales charges
from certain redemptions of the Fund's shares. The Fund's shareholders pay such
charges which are not an expense of the Fund.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the six months ended January 31, 1996 aggregated
$891,883,478 and $821,213,165, respectively. Included in the aforementioned are
purchases and sales of U.S. Government securities of $145,748,993 and
$230,961,680, respectively. For the same period, the Fund incurred brokerage
commissions with DWR of approximately $46,000 for transactions executed on
behalf of the Fund.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At January 31, 1996, the Fund had
transfer agent fees and expenses payable of approximately $74,000.
<PAGE>
DEAN WITTER STRATEGIST FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1996 (UNAUDITED) CONTINUED
The Fund has an unfunded noncontributory defined benefit pension plan covering
all independent Trustees of the Fund who will have served as independent
Trustees for at least five years at the time of retirement. Benefits under this
plan are based on years of service and compensation during the last five years
of service. Aggregate pension costs for the January 31, 1996 included in
Trustees' fees and expenses in the Statement of Operations amounted to $2,434.
At January 31, 1996, the Fund had an accrued pension liability of $95,840 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 MONTHS ENDED FOR THE YEAR ENDED
JANUARY 31, 1996 JULY 31, 1995
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Sold............................... 5,939,069 $ 95,184,454 9,276,510 $ 137,319,676
Reinvestment of dividends and
distributions..................... 4,860,171 74,671,628 2,728,962 38,146,103
Shares issued in connection with
the acquisition of Dean Witter
Managed Assets Trust (Note 6)..... 20,952,000 322,593,266 -- --
------------- ------------- ------------- -------------
31,751,240 492,449,348 12,005,472 175,465,779
Repurchased........................ (6,192,604) (98,509,710) (12,582,171) (184,279,680)
------------- ------------- ------------- -------------
Net increase (decrease)............ 25,558,636 $ 393,939,638 (576,699) $ (8,813,901)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
6. ACQUISITION OF DEAN WITTER MANAGED ASSETS TRUST
As of the close of business on December 22, 1995, the Fund acquired all the net
assets of Dean Witter Managed Assets Trust ("Managed Assets") pursuant to a plan
of reorganization approved by the shareholders of Managed Assets on December 19,
1995. The acquisition was accomplished by a tax-free exchange of 20,952,000
shares of the Fund at a net asset value of $15.39 for 30,683,052 shares of
Managed Assets. The net assets of the Fund and Managed Assets immediately before
the acquisition were $935,510,174 and $322,593,266, respectively, including
unrealized depreciation of $6,077,572, accumulated undistributed net investment
income of $158,230 and accumulated net realized gain of $16,410. Immediately
after the acquisition, the combined net assets of the Fund amounted to
$1,260,344,463.
7. FEDERAL INCOME TAX STATUS
At July 31, 1995, the Fund had temporary book/tax differences which were
primarily attributable to capital loss deferrals on wash sales and permanent
book/tax differences attributable to dividend redesignations.
<PAGE>
DEAN WITTER STRATEGIST FUND
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE
PERIOD
FOR THE SIX OCTOBER 31,
MONTHS ENDED 1988*
JANUARY 31, FOR THE YEAR ENDED JULY 31 THROUGH
1996 --------------------------------------------------------------- JULY 31,
(UNAUDITED) 1995 1994 1993 1992 1991 1990 1989
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value,
beginning
of period............... $ 15.87 $ 14.43 $ 14.59 $ 14.39 $ 13.09 $ 11.65 $ 11.37 $ 9.45
------ -------- -------- -------- -------- -------- -------- ------
Net investment income.... 0.16 0.34 0.30 0.26 0.27 0.27 0.23 0.38
Net realized and
unrealized gain......... 1.28 1.86 0.22 0.81 1.27 1.50 0.55 1.84
------ -------- -------- -------- -------- -------- -------- ------
Total from investment
operations.............. 1.44 2.20 0.52 1.07 1.54 1.77 0.78 2.22
------ -------- -------- -------- -------- -------- -------- ------
Less dividends and
distributions from:
Net investment
income................ (0.19) (0.29) (0.26) (0.31) (0.24) (0.26) (0.29) (0.30)
Net realized gain..... (1.26) (0.47) (0.42) (0.56) -- (0.07) (0.21) --
------ -------- -------- -------- -------- -------- -------- ------
Total dividends and
distributions........... (1.45) (0.76) (0.68) (0.87) (0.24) (0.33) (0.50) (0.30)
------ -------- -------- -------- -------- -------- -------- ------
Net asset value, end of
period.................. $ 15.86 $ 15.87 $ 14.43 $ 14.59 $ 14.39 $ 13.09 $ 11.65 $ 11.37
------ -------- -------- -------- -------- -------- -------- ------
------ -------- -------- -------- -------- -------- -------- ------
TOTAL INVESTMENT
RETURN+.................. 9.41%(1) 16.05% 3.53% 7.59% 11.88% 15.67% 7.21% 23.76%(1)
RATIOS TO AVERAGE NET
ASSETS:
Expenses................. 1.58%(2) 1.63% 1.62% 1.62% 1.63% 1.59% 1.53% 0.97%(2)(3)
Net investment income.... 2.05%(2) 2.35% 2.03% 1.90% 2.19% 2.37% 2.39% 6.00%(2)(3)
SUPPLEMENTAL DATA:
Net assets, end of
period, in thousands.... $1,282,079 $877,595 $806,249 $782,833 $440,802 $238,432 $195,687 $47,921
Portfolio turnover
rate.................... 89%(1) 179% 90% 98% 79% 140% 101% 70%(1)
<FN>
- ---------------------
* Commencement of operations.
+ Does not reflect the deduction of sales charge.
(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 annualized expense and net investment income
ratios would have been 1.48% and 5.48%, respectively.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn DEAN WITTER
John R. Haire STRATEGIST FUND
Dr. Manuel H. Johnson
Paul Kolton
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Sheldon Curtis
Vice President, Secretary and General Counsel
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
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 SEMIANNUAL REPORT
prospectus. JANUARY 31, 1996
