DEAN WITTER WORLD WIDE INCOME TRUST Two World Trade Center, New York, New
LETTER TO THE SHAREHOLDERS New York 10048
April 30, 1996
DEAR SHAREHOLDER:
During the six-month period ended April 30, 1996, the Federal Reserve Board
cut the federal-funds rate by 0.25 percent in December, and again in January,
as concerns increased over the prospect of the U.S. economy slipping into a
recession. Almost immediately thereafter, U.S. bond yields made an abrupt
about-face and rose sharply in response to statistical releases indicating
that the economy was rebounding strongly and inflationary pressures were
mounting. From the low point in January, the yield on the ten-year U.S.
Treasury note increased by 1.17 percent to 6.67 percent at the end of April,
making the first four months of 1996 one of the worst periods in U.S. bond
marketing history.
Meanwhile, short-term interest rates in Europe continued lower, in reaction
to their central banks' cuts of official short rates, as well as ongoing weak
growth of their economies. However, at the longer end of the yield curve,
rates went up slightly in the core countries, such as Germany and France, in
sympathy with the higher-rate pressures in the United States. On the other
hand, three-year rates in Italy, Spain and Sweden declined as bond market
participants took note of the ongoing progress that these countries have made
in reducing public spending and deficits, as well as lower inflationary
expectations. Thus, ten-year yields in Italy declined by about 2.0 percent
since the beginning of the year, while yields on ten-year Spanish and Swedish
bonds declined by approximately 1.7 percent and 1.0 percent, respectively.
In the foreign exchange markets, the U.S. dollar, in reaction to improving
interest rate differentials and a stronger U.S. economic growth outlook,
appreciated against most of the major currencies, with the dollar gaining
approximately 8.7 percent against the Deutschemark and 3.0 percent against
the Japanese yen. Overall, the trade weighted dollar gained about 5.1 percent
during the six-month period.
PERFORMANCE AND INVESTMENT STRATEGY
Against this backdrop, Dean Witter World Wide Income Trust produced a total
return of 4.49 percent for the six-month period ended April 30, 1996,
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
LETTER TO THE SHAREHOLDERS April 30, 1996, continued
compared to a total return of 3.99 percent for the average general world
income fund, as reported by Lipper Analytical Services, Inc. and an increase
of 0.78 percent for the unhedged and unmanaged Lehman Brothers Mutual Fund
Global Intermediate Bond Index.
In mid-February, and prior to the sharp rise in interest rates, the Fund's
duration was reduced substantially from 7.0 years at the end of 1995 to 4.1
years. By the end of April, the Fund's duration was further reduced to 2.5
years.
Simultaneously, the Fund reduced its weightings in the U.S. market to 41
percent by mid-February, while increasing its holdings in Italy, Spain and
Sweden. This enabled the Fund to take advantage of the higher yields and
rising bond prices in these markets. Weightings in New Zealand and Australian
short-term investments were maintained at 14 percent in order to benefit from
higher but stable yields and exchange rates. The Fund's average maturity at
the end of April was 6.4 years. At this time, 46 percent of the Fund's assets
were in North America, 47 percent in Europe and 7 percent in the Pacific
Basin. Most of the currency risks of the European investments were hedged back
into the dollar as the U.S. dollar appreciated in value.
LOOKING AHEAD
The Fund's management believes that the current global bond market decline
was a temporary correction, and the Fund has been positioned appropriately to
preserve its capital. However, inflation in the global economy remains low,
and though there is some ongoing concern, mostly due to rises of commodity
prices and wage pressure, inflationary expectations should be well contained
as the global economy continues to experience fiscal contraction and moderate
growth. In this context, we anticipate that the Fund will maintain its
current strategy of diversifying into different global markets with an
emphasis on those that exhibit non-inflationary growth, continuing progress
toward fiscal balance and reduced public spending. This strategy seeks to
protect shareholder value while allowing the Fund to achieve attractive
current income.
We appreciate your continued support of Dean Witter World Wide Income Trust
and look forward to serving your investment needs.
Very truly yours,
/s/ Charles A. Fiumefreddo
CHARLES A. FIUMEFREDDO
Chairman of the Board
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
PORTFOLIO OF INVESTMENTS April 30, 1996 (unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN MATURITY
THOUSANDS COUPON RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
GOVERNMENT & CORPORATE BONDS (74.4%)
ITALY (23.8%)
Finance (0.8%)
ITL 1,520 M Abbey National Treasury ........................................ 11.00% 04/21/97 $ 993,751
--------------
Government Obligations (23.0%)
19,460 M Italy Treasury Bond+ ........................................... 10.50 04/15/98 12,864,868
5,090 M Italy Treasury Bond+ ........................................... 9.50 12/01/99 3,306,592
17,900 M Italy Treasury Bond+ ........................................... 10.50 04/01/00 12,000,994
--------------
28,172,454
--------------
TOTAL ITALY ............................................................................... 29,166,205
--------------
NEW ZEALAND (6.8%)
Government Obligations
NZ$ 8,965 New Zealand Treasury Bond+ ..................................... 9.00 11/15/96 6,136,739
3,200 New Zealand Treasury Bond+ ..................................... 8.00 07/15/98 2,150,819
--------------
TOTAL NEW ZEALAND ......................................................................... 8,287,558
--------------
SPAIN (10.8%)
Government Obligations
ESP 1,376 M Spain Treasury Bond+ ........................................... 11.60 01/15/97 11,102,778
250 M Spain Treasury Bond+ ........................................... 10.90 08/30/03 2,161,896
--------------
TOTAL SPAIN ............................................................................... 13,264,674
--------------
SWEDEN (5.2%)
Government Obligation
SEK 38,900 Sweden Treasury Bond+ .......................................... 10.25 05/05/03 6,429,990
--------------
UNITED STATES (27.8%)
U.S. Government & Agencies Obligations
Government National Mortgage Assoc.
$ 5,490 .............................................................. 6.50 02/15/26 5,134,593
7,000 .............................................................. 7.50 * 6,912,500
4,106 .............................................................. 8.00 01/15/24-
10/15/24 4,156,005
--------------
16,203,098
--------------
10,750 U.S. Treasury Bond+ ............................................ 13.125 05/15/01 13,800,313
--------------
4,250 U.S. Treasury Note ............................................. 6.50 05/15/05 4,187,578
--------------
TOTAL UNITED STATES ...................................................................... 34,190,989
--------------
TOTAL GOVERNMENT & CORPORATE BONDS
(Identified Cost $91,533,535) ............................................................ 91,339,416
--------------
SEE NOTES TO FINANCIAL STATEMENTS
</TABLE>
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
PORTFOLIO OF INVESTMENTS April 30, 1996 (unaudited) continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN MATURITY
THOUSANDS COUPON RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS (21.6%)
TIME DEPOSITS (a) (5.0%)
PORTUGAL (1.6%)
Banking - International
PTE 307,772 Bankers Trust ..................................................7.125% 05/31/96 $ 1,961,827
--------------
SPAIN (3.4%)
Banking - International
ESP 530,899 Bank of New York ...............................................7.65 05/13/96 4,174,387
--------------
TOTAL TIME DEPOSITS
(Identified Cost $6,164,941) ............................................................. 6,136,214
--------------
GOVERNMENT & AGENCIES OBLIGATION (16.6%)
SWEDEN (0.1%)
SEK 1,000 Sweden Treasury Bill ...........................................6.02 10/16/96 143,132
--------------
UNITED STATES (b) (16.5%)
$ 20,275 Federal Home Loan Mortgage Corp ................................5.20 - 5.30 05/01/96-
05/09/96 20,253,044
--------------
TOTAL GOVERNMENT & AGENCIES OBLIGATION
(Identified Cost $20,397,887) ............................................................ 20,396,176
--------------
TOTAL SHORT-TERM INVESTMENTS
(Identified Cost $26,562,828) ............................................................ 26,532,390
--------------
TOTAL INVESTMENTS
(Identified Cost $118,096,363) (c) ........................................... 96.0 % 117,871,806
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES ............................... 4.0 4,953,246
------- --------------
NET ASSETS ................................................................... 100.0 % $122,825,052
======= ==============
</TABLE>
- ------------
M In millions.
+ Some or all of these securities are segregated in connection with open
forward foreign currency contracts.
* Security purchased on a forward commitment basis with an approximate
principal amount and no definite maturity date; the actual principal amount
and maturity date will be determined upon settlement.
(a) Subject to withdrawal restrictions until maturity.
(b) Securities were purchased on a discount basis. The interest rates shown
have been adjusted to reflect a money market equivalent yield.
(c) The aggregate cost for federal income tax purposes is $118,096,363; the
aggregate gross unrealized appreciation is $2,723,375 and the aggregate
gross unrealized depreciation is $2,947,932, resulting in net unrealized
depreciation of $224,557.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
PORTFOLIO OF INVESTMENTS April 30, 1996 (unaudited) continued
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT APRIL 30, 1996:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS IN EXCHANGE DELIVERY APPRECIATION
TO DELIVER FOR DATE (DEPRECIATION)
- -----------------------------------------------------------
<S> <C> <C> <C>
yen 1,000,000,000 $ 9,344,048 11/05/96 $ (74,865)
DEM 12,550,000 $ 8,515,980 03/25/97 329,897
yen 1,300,000,000 $12,172,285 03/26/97 (147,285)
CHF 25,000,000 $20,315,293 04/29/97 219,783
--------------
Net unrealized appreciation ........ $ 327,530
==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $118,096,363) ...................................... $117,871,806
Cash (including $213,975 in foreign currency) ........................ 227,232
Unrealized appreciation on open forward foreign currency contracts .. 549,680
Receivable for:
Investments sold ................................................... 11,473,806
Compensated forward foreign currency contracts ..................... 3,037,636
Interest ........................................................... 2,504,390
Shares of beneficial interest sold ................................. 33,030
Foreign withholding taxes reclaimed ................................ 4,867
Prepaid expenses ..................................................... 53,436
--------------
TOTAL ASSETS ...................................................... 135,755,883
--------------
LIABILITIES:
Unrealized depreciation on open forward foreign currency contracts .. 222,150
Payable for:
Investments purchased .............................................. 11,145,221
Compensated forward foreign currency contracts ..................... 1,045,756
Shares of beneficial interest repurchased .......................... 125,210
Plan of distribution fee ........................................... 92,770
Investment management fee .......................................... 81,856
Variation margin ................................................... 67,725
Accrued expenses ..................................................... 150,143
--------------
TOTAL LIABILITIES ................................................. 12,930,831
--------------
NET ASSETS:
Paid-in-capital ...................................................... 129,425,490
Net unrealized appreciation .......................................... 97,091
Accumulated undistributed net investment income ...................... 230,469
Accumulated net realized loss ........................................ (6,927,998)
--------------
NET ASSETS ........................................................ $122,825,052
==============
NET ASSET VALUE PER SHARE,
13,762,290 shares outstanding (unlimited shares authorized of $.01
par value) .......................................................... $8.92
=====
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
FINANCIAL STATEMENTS, continued
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME (net of $161,419 foreign withholding tax) ........ $5,388,121
------------
EXPENSES
Plan of distribution fee .......................................... 557,199
Investment management fee ......................................... 491,646
Transfer agent fees and expenses .................................. 89,355
Professional fees ................................................. 46,532
Custodian fees .................................................... 40,430
Shareholder reports and notices ................................... 22,463
Registration fees ................................................. 10,851
Trustees' fees and expenses ....................................... 10,141
Other ............................................................. 2,612
------------
TOTAL EXPENSES .................................................. 1,271,229
------------
NET INVESTMENT INCOME ........................................... 4,116,892
------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on:
Investments ..................................................... 22,415
Futures contracts ............................................... 968,907
Foreign exchange transactions ................................... 1,033,824
------------
TOTAL GAIN ..................................................... 2,025,146
------------
Net change in unrealized depreciation on:
Investments ..................................................... (292,365)
Translation of forward foreign currency contracts, other assets
and liabilities denominated in foreign currencies ............ 197,917
------------
TOTAL DEPRECIATION ............................................. (94,448)
------------
NET GAIN ........................................................ 1,930,698
------------
NET INCREASE ...................................................... $6,047,590
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
FINANCIAL STATEMENTS, continued
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED OCTOBER
APRIL 30, 1996 31, 1995
- ----------------------------------------------------------------------------------------
<S> <C> <C>
(unaudited)
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income ................................. $ 4,116,892 $ 9,681,807
Net realized gain ..................................... 2,025,146 4,717,657
Net change in unrealized depreciation ................. (94,448) 3,563,298
-------------- ----------------
NET INCREASE ....................................... 6,047,590 17,962,762
Dividends from net investment income .................. (8,146,496) (8,838,195)
Net decrease from transactions in shares of beneficial
interest ............................................. (13,241,509) (50,521,786)
-------------- ----------------
TOTAL DECREASE ..................................... (15,340,415) (41,397,219)
NET ASSETS:
Beginning of period ................................... 138,165,467 179,562,686
-------------- ----------------
END OF PERIOD
(Including undistributed net investment income of
$230,469 and $4,260,073, respectively) ................ $122,825,052 $138,165,467
============== ================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS April 30, 1996 (unaudited)
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter World Wide Income Trust (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 October 14, 1988 and commenced operations on
March 30, 1989.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) all 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; (2) listed options
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 price; (3)
futures contracts are valued at the latest sale price on the commodities
exchange on which they trade unless the Trustees determine that such price
does not reflect their market value, in which case it will be valued at fair
value as determined by the Trustees; (4) when market quotations are not
readily available, including circumstances under which it is determined by
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 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); 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.
Interest income is accrued daily.
C. OPTIONS AND FUTURES -- (1) Written options: When the Fund writes a call or
put option, an amount equal to the premium received is included in the Fund's
Statement of Assets and Liabilities as an asset and as an equivalent
liability. The amount of the liability is subsequently marked-to-market to
reflect the current market value of the option written. If a written option
either expires or the Fund enters into a closing purchase transaction, the
Fund realizes a gain or loss without regard to any unrealized gain or
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS April 30, 1996 (unaudited) continued
loss on the underlying security or currency and the liability related to such
option is extinguished. If a written call option is exercised, the Fund
realizes a gain or loss from the sale of the underlying security or currency
and the proceeds from such sale are increased by the premium originally
received. If a put option which the Fund has written is exercised, the amount
of the premium originally received reduces the cost of the security which the
Fund purchases upon exercise of the option; (2) Purchased options: When the
Fund purchases a call or put option, the premium paid is recorded as an
investment and is subsequently marked-to-market to reflect the current market
value. If a purchased option expires, the Fund will realize a loss to the
extent of the premium paid. If the Fund enters into a closing sale
transaction, a gain or loss is realized for the difference between the
proceeds from the sale and the cost of the option. If a put option is
exercised, the cost of the security sold upon exercise will be increased by
the premium originally paid. If a call option is exercised, the cost of the
security purchased upon exercise will be increased by the premium originally
paid; (3) Options on futures contracts: The Fund is required to deposit U.S.
Government securities as "initial margin" and "variation margin", with
respect to written call and put options on futures contracts. If a written
option expires, the Fund realizes a gain. If a written call or put option is
exercised, the premium received will decrease or increase the unrealized loss
or gain, respectively, on the future. If the Fund enters into a closing
purchase transaction, the Fund realizes a gain or loss without regard to any
unrealized gain or loss on the underlying futures contract and the liability
related to such option is extinguished; and (4) Futures contracts: A futures
contract is an agreement between two parties to buy and sell financial
instruments at a set price on a future date. Upon entering into such a
contract, the Fund is required to pledge to the broker cash or U.S.
Government securities equal to the minimum initial margin requirements of the
applicable futures exchange. Pursuant to the contract, the Fund agrees to
receive from or pay to the broker an amount of cash equal to the daily
fluctuation in the value of the contract which is known as variation margin.
Such receipts or payments are recorded by the Fund as unrealized gains or
losses. Upon closing of the contract, the Fund realizes a gain or loss equal
to the difference between the value of the contract at the time it was opened
and the value at the time it was closed.
D. FOREIGN CURRENCY TRANSLATION -- The books and records of the Fund are
maintained in U.S. dollars as follows: (1) the foreign currency market value
of investment securities, other assets and liabilities and forward contracts
are translated at the exchange rates prevailing at the end of the period; and
(2) purchases, sales, income and expenses are translated at the exchange
rates prevailing on the respective dates of such transactions. The resultant
exchange gains and losses are included in the Statement of Operations as
realized and unrealized gain/loss on foreign exchange transactions. Pursuant
to U.S. Federal income tax regulations, certain foreign exchange gains/losses
included in realized and unrealized gain/loss
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS April 30, 1996 (unaudited) continued
are included in or are a reduction of ordinary income for federal income tax
purposes. The Fund does not isolate that portion of the results of operations
arising as a result of changes in the foreign exchange rates from the changes
in the market prices of the securities.
E. FORWARD FOREIGN CURRENCY CONTRACTS -- The Fund may enter into forward
foreign currency contracts which are valued daily at the appropriate exchange
rates. The resultant unrealized exchange gains and losses are included in the
Statement of Operations as unrealized foreign currency gain or loss. The Fund
records realized gains or losses on delivery of the currency or at the time
the forward contract is extinguished (compensated) by entering into a closing
transaction prior to delivery.
F. 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.
G. 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 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
as of the close of each business day: 0.75% to the portion of daily net
assets not exceeding $250 million; 0.60% to the portion of daily net assets
exceeding $250 million but not exceeding $500 million; 0.50% to the portion
of daily net assets exceeding $500 million but not exceeding $750 million;
0.40% to the portion of daily net assets exceeding $750 million but not
exceeding $1 billion; and 0.30% to the portion of daily net assets exceeding
$1 billion.
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS April 30, 1996 (unaudited) continued
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund's books and
records and furnishes, at its own expense, office space, facilities,
equipment, clerical, bookkeeping and certain legal services and pays the
salaries of all personnel, including officers of the Fund who are employees
of the Investment Manager. The Investment Manager also bears the cost of
telephone services, heat, light, power and other utilities provided to the
Fund.
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Dean Witter Distributors Inc. (the
"Distributor"), an affiliate of the Investment Manager. The Fund has adopted
a Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act
pursuant to which the Fund pays the Distributor compensation, accrued daily
and payable monthly, at an annual rate of 0.85% of the lesser of: (a) the
average daily aggregate gross sales of the Fund's shares since the Fund's
inception (not including reinvestment of dividend or capital gains
distributions) less the average daily aggregate net asset value of the Fund's
shares redeemed since the Fund's inception upon which a contingent deferred
sales charge has been imposed or upon which such charge has been waived; or
(b) the Fund's average daily net assets. Amounts paid under the Plan are paid
to the Distributor to compensate it for the services provided and the
expenses borne by it and others in the distribution of the Fund's shares,
including the payment of commissions for sales of the Fund's shares and
incentive compensation to, and expenses of, account executives of Dean Witter
Reynolds Inc., an affiliate of the Investment Manager and Distributor, and
other employees and selected broker-dealers, who engage in or support
distribution of the Fund's shares or who service shareholder accounts,
including overhead and telephone expenses, printing and distribution of
prospectuses and reports used in connection with the offering of the Fund's
shares to other than current shareholders and preparation, printing and
distribution of sales literature and advertising materials. In addition, the
Distributor may be compensated under the Plan for its opportunity costs in
advancing such amounts, which compensation would be in the form of a carrying
charge on any unreimbursed expenses 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 April 30,
1996, it received approximately $64,000 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.
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS April 30, 1996 (unaudited) continued
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 April 30, 1996
were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
------------- -------------
<S> <C> <C>
Foreign Government Bonds $74,883,233 $ 72,852,060
U.S. Government and Agencies Obligations 98,793,409 152,189,911
</TABLE>
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At April 30, 1996, the Fund had
transfer agent fees and expenses payable of approximately $16,000.
The Fund has an unfunded noncontributory defined benefit pension plan
covering all independent Trustees of the Fund who will have served as
independent Trustees for at least five years at the time of retirement.
Benefits under this plan are based on years of service and compensation
during the last five years of service. Aggregate pension costs for the six
months ended April 30, 1996 included in Trustees' fees and expenses in the
Statement of Operations amounted to $2,130. At April 30, 1996, the Fund had
an accrued pension liability of $50,231 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
APRIL 30, 1996 OCTOBER 31, 1995
----------------------------- ----------------------------
(UNAUDITED)
SHARES AMOUNT SHARES AMOUNT
------------- ------------- -------------- ------------
<S> <C> <C> <C> <C>
Sold 529,741 $ 4,765,508 1,928,605 $ 16,883,971
Reinvestment of dividends 500,355 4,487,463 548,538 4,798,502
------------- --------------- ------------- --------------
1,030,096 9,252,971 2,477,143 21,682,473
Repurchased (2,486,119) (22,494,480) (8,258,249) (72,204,259)
------------- --------------- ------------- --------------
Net decrease (1,456,023) $(13,241,509) (5,781,106) $(50,521,786)
============= =============== ============= ==============
</TABLE>
6. FEDERAL INCOME TAX STATUS
During the year ended October 31, 1995, the Fund utilized approximately
$1,094,000 of its net capital loss carryover. At October 31, 1995, the Fund
had a net capital loss carryover of approximately $8,603,000 which will be
available through October 31, 2002 to offset future capital gains to the
extent provided by regulations.
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS April 30, 1996 (unaudited) continued
As of October 31, 1995, the Fund had temporary book/tax differences primarily
attributable to the mark-to-market of open forward foreign currency exchange
contracts and compensated forward foreign currency exchange contracts and
permanent book/tax differences primarily attributable to foreign currency
gains.
7. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS
The Fund may enter into forward foreign currency contracts ("forward
contracts") to facilitate settlement of foreign currency denominated
portfolio transactions or to manage its foreign currency exposure or to sell,
for a fixed amount of U.S. dollars or other currency, the amount of foreign
currency approximating the value of some or all of its holdings denominated
in such foreign currency or an amount of foreign currency other than the
currency in which the securities to be hedged are denominated approximating
the value of some or all of its holdings to be hedged. Additionally, when the
Investment Manager anticipates purchasing securities at some time in the
future, the Fund may enter into a forward contract to purchase an amount of
currency equal to some or all the value of the anticipated purchase for a
fixed amount of U.S. dollars or other currency.
To hedge against adverse interest rate, foreign currency and market risks,
the Fund may enter into written options on interest rate futures and interest
rate futures contracts ("derivative investments").
At April 30, 1996, there were outstanding forward contracts used to manage
foreign currency exposure associated with some of the Fund's foreign currency
denominated holdings.
These derivative instruments involve elements of market risk in excess of the
amount reflected in the Statement of Assets and Liabilities. The Fund bears
the risk of an unfavorable change in the foreign exchange rates underlying
the forward contracts. Risks may also arise upon entering into these
contracts from the potential inability of the counterparties to meet the
terms of their contracts.
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR ENDED OCTOBER 31
MONTHS ENDED --------------------------------------------------
APRIL 30, 1996 1995 1994 1993 1992 1991
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
(unaudited)
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period .. $ 9.08 $ 8.55 $ 9.39 $ 9.11 $ 9.11 $10.38
-------------- -------- --------- -------- -------- ---------
Net investment income .................. 0.01 0.55 0.55 0.59 0.62 0.82
Net realized and unrealized gain (loss) 0.39 0.48 (0.92) 0.27 0.01 (0.99)
-------------- -------- --------- -------- -------- ---------
Total from investment operations ...... 0.40 1.03 (0.37) 0.86 0.63 (0.17)
-------------- -------- --------- -------- -------- ---------
Less dividends and distributions from:
Net investment income ................. (0.56) (0.50) (0.22) (0.58) (0.63) (0.86)
Net realized gain ..................... -- -- -- -- -- (0.24)
Paid-in-capital ....................... -- -- (0.25) -- -- --
-------------- -------- --------- -------- -------- ---------
Total dividends and distributions ..... (0.56) (0.50) (0.47) (0.58) (0.63) (1.10)
-------------- -------- --------- -------- -------- ---------
Net asset value, end of period ......... $ 8.92 $ 9.08 $ 8.55 $ 9.39 $ 9.11 $ 9.11
============== ======== ========= ======== ======== =========
TOTAL INVESTMENT RETURN+ ............... 4.49%(1) 12.45% (3.99)% 9.72% 7.13% (1.75)%
RATIOS TO AVERAGE NET ASSETS:
Expenses ............................... 1.93%(2) 1.93% 1.91% 1.87% 1.87% 1.76%
Net investment income .................. 6.26%(2) 6.21% 5.87% 6.39% 6.78% 8.45%
SUPPLEMENTAL DATA:
Net assets, end of period, in millions $123 $138 $180 $275 $324 $421
Portfolio turnover rate ................ 130%(1) 254% 229% 229% 214% 245%
</TABLE>
- ------------
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
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
Vinh Q. Tran
Vice President
Peter J. Seeley
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 prospectus.
DEAN WITTER
WORLD WIDE
INCOME TRUST
SEMIANNUAL REPORT
APRIL 30, 1996
