<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST TWO WORLD TRADE CENTER, NEW
LETTER TO THE SHAREHOLDERS APRIL 30, 1998 YORK, NEW YORK 10048
DEAR SHAREHOLDER:
The global fixed-income markets had a mixed performance during the six-month
period ended April 30, 1998. The first half of this period was marked by
declining interest rates in all of the major bond markets, whereas the second
half saw European bond yields stabilize while rates in the United States edged
slightly higher.
GLOBAL BOND MARKET OVERVIEW
In the United States, the bond market initially benefited from its safe-haven
status as global investors sought relief from the ongoing turbulence in the
Southeast Asian financial markets. As 1998 began, however, the growing U.S.
economy and record-low unemployment ignited fears that inflation might begin to
move higher. As a result, yields on ten-year U.S. Treasuries increased from
their January low of 5.35 percent, to 5.65 percent on April 30.
Meanwhile, the European bond markets also saw yields moving lower, at first in
conjunction with those in the United States, then later in response to the major
European countries' reports of ongoing moderate growth with low inflation.
Further supporting the European markets, particularly those in the south (e.g.,
Italy and Spain), was the market's realization that the European Monetary Union
and the common European currency, the euro, would be launched on schedule in
January 1999. As a result, ten-year German government bond yields registered a
net decline of 65 basis points (0.65 percent) over the period, while ten-year
Italian bond yields fell 110 basis points (1.10 percent).
With the flight into U.S. assets came a further strengthening of the U.S.
dollar. This upward move of the U.S. currency also reflected the attractiveness
of U.S. money market interest rates to international investors as well as the
firmness of the U.S. economy relative to other major economies. Over this
six-month period, the dollar appreciated 9.4 percent against the Japanese yen
and 4 percent against the German mark. Overall, the dollar rose 4.5 percent
against the world's major currencies.
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
LETTER TO THE SHAREHOLDERS APRIL 30, 1998, CONTINUED
PERFORMANCE AND PORTFOLIO STRATEGY
For the six-month period ended April 30, 1998, Dean Witter World Wide Income
Trust's Class B shares posted a total return of 0.66 percent, compared to 0.60
percent for the Lehman Brothers Global Intermediate Bond Index and 3.12 percent
for the Lipper Global Income Funds Index. For the same period, the Fund's Class
A, C and D shares had total returns of 0.98 percent, 0.67 percent and 0.97
percent, respectively. The performance of the Fund's four share classes varies
because of differing expenses.
Throughout this period, the Fund continued its strategy of investing in markets
that have attractive values commensurate with low relative risk. The Fund
maintained its overweighting in the United States through January 1998, when
market expectations for an Asian-induced economic slowdown began to wane. As the
Fund reduced its U.S. exposure, assets were reallocated to Europe, particularly
its higher-yielding southern countries, to take advantage of the stronger
performance of those markets. The Fund also increased its allocation to New
Zealand, which has a significant amount of export exposure to Asia. As the New
Zealand economy slows down from the Asian crisis, its bond market should perform
well.
The currency risks associated with the European bond investments were hedged
back into the U.S. dollar for most of the six-month period. This tactic
effectively protected the Fund from the decline in the values of those
currencies. In mid April, as Europe began to reflect a strengthening economy,
some of these hedges were removed, in order to take advantage of the
appreciation of those currencies.
LOOKING AHEAD
In the months ahead, we anticipate a continuation of the Fund's strategy of
diversification in global markets, with an emphasis on markets that exhibit
stable inflation outlooks and improving fiscal discipline. As the advent of the
new European Monetary Union approaches, and with the formation of the new
European Central Bank, we believe there will continue to be a credible
anti-inflationary policy in the new united Europe, as well as ongoing pressure
on the individual governments to reduce their budget deficits. In addition, we
anticipate that global growth will continue to be moderate as the Asian
economies slowly recover, allowing the global bond markets to continue to offer
compelling value over the months ahead. This positive outlook, together with our
investment strategy, should help the Fund seek its objective.
2
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
LETTER TO THE SHAREHOLDERS APRIL 30, 1998, CONTINUED
We appreciate your ongoing support of Dean Witter World Wide Income Trust and
look forward to continuing to serve your investment needs.
Very truly yours,
C. Fiumefreddo
CHARLES A. FIUMEFREDDO
CHAIRMAN OF THE BOARD
3
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
PORTFOLIO OF INVESTMENTS APRIL 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
GOVERNMENT & CORPORATE BONDS (93.6%)
DENMARK (6.3%)
GOVERNMENT OBLIGATION
DKK 33,000 Kingdom of Denmark+......................................................... 9.00% 11/15/00 $ 5,307,581
-----------
GERMANY+ (9.3%)
BANKS
DEM 4,600 Allgemeine HypothekenBank AG................................................ 5.75 03/13/00 2,627,290
4,600 Depfa-Bank.................................................................. 6.00 08/28/00 2,648,042
4,600 Rheinische HypothekenBank AG................................................ 5.50 12/20/99 2,612,687
-----------
TOTAL GERMANY.................................................................................. 7,888,019
-----------
ITALY (6.4%)
GOVERNMENT OBLIGATIONS
ITL 2,815,000 Italy Treasury Bond......................................................... 10.50 11/01/00 1,801,473
5,090,000 Italy Treasury Bond+........................................................ 9.50 01/01/05 3,576,501
-----------
TOTAL ITALY.................................................................................... 5,377,974
-----------
NEW ZEALAND (10.2%)
BANKS (5.4%)
NZD 8,500 International Bank for Reconstruction & Development......................... 7.00 09/18/00 4,594,318
-----------
GOVERNMENT OBLIGATION (4.8%)
7,300 New Zealand Government Bond+................................................ 8.00 02/15/01 4,080,196
-----------
TOTAL NEW ZEALAND.............................................................................. 8,674,514
-----------
SPAIN (7.9%)
GOVERNMENT OBLIGATION
ESP 900,000 Spain Treasury Bond+........................................................ 12.25 03/25/00 6,728,799
-----------
SWEDEN (9.3%)
GOVERNMENT OBLIGATION
SEK 50,000 Swedish Treasury Bond....................................................... 13.00 06/15/01 7,914,418
-----------
UNITED KINGDOM+ (8.6%)
BANKS
L 1,000 Alliance & Leicester PLC.................................................... 8.75 12/07/06 1,870,050
1,000 Halifax PLC................................................................. 9.375 05/15/21 2,176,780
1,250 Lloyds TSB Group PLC........................................................ 8.50 03/29/06 2,313,545
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
PORTFOLIO OF INVESTMENTS APRIL 30, 1998 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
DEM 1,550 Suedwest LB Capital Markets................................................. 7.00% 03/31/00 $ 903,385
-----------
TOTAL UNITED KINGDOM........................................................................... 7,263,760
-----------
UNITED STATES (35.6%)
FINANCIAL (5.6%)
ITL 7,500,000 General Electric Capital Corp.+............................................. 10.375 06/14/00 4,702,314
-----------
U.S. GOVERNMENT & AGENCY OBLIGATIONS (30.0%)
NZD 7,700 Federal National Mortgage Assoc............................................. 7.00 09/26/00 4,150,332
$ 9,750 U. S. Treasury Bond *....................................................... 13.125 05/15/01 11,776,635
5,000 U. S. Treasury Bond+........................................................ 6.375 08/15/27 5,272,550
500 U. S. Treasury Bond......................................................... 6.125 11/15/27 511,945
3,000 U. S. Treasury Note+........................................................ 13.375 08/15/01 3,689,790
-----------
25,401,252
-----------
TOTAL UNITED STATES............................................................................ 30,103,566
-----------
TOTAL GOVERNMENT & CORPORATE BONDS
(IDENTIFIED COST $81,850,681).................................................................. 79,258,631
-----------
SHORT-TERM INVESTMENTS (13.6%)
TIME DEPOSIT (a) (8.7%)
GREECE
BANKS - COMMERCIAL
GRD 2,316,625 Bankers Trust (IDENTIFIED COST $8,178,524).................................. 12.00 05/07/98 7,372,855
-----------
U.S. GOVERNMENT AGENCIES (b) (4.9%)
$ 1,100 Federal Home Loan Mortgage Corp............................................. 5.45 05/01/98 1,100,000
1,400 Federal Home Loan Mortgage Corp............................................. 5.43 05/04/98 1,399,366
1,600 Federal National Mortgage Assoc............................................. 5.40 05/06/98 1,598,800
-----------
TOTAL U.S. GOVERNMENT AGENCIES
(AMORTIZED COST $4,098,166).................................................................... 4,098,166
-----------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $12,276,690).................................................................. 11,471,021
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
PORTFOLIO OF INVESTMENTS APRIL 30, 1998 (UNAUDITED) CONTINUED
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $94,127,371) (C).......................................................... 107.2 % 90,729,652
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS............................................. (7.2) (6,076,110)
------ ------------
NET ASSETS................................................................................. 100.0 % $ 84,653,542
------ ------------
------ ------------
</TABLE>
- ---------------------
* The market value of securities pledged to cover margin requirements for
open futures contracts is $60,000.
+ Some or all of these securities are segregated in connection with open
forward foreign currency contracts.
(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 approximates identified
cost. The aggregate gross unrealized appreciation is $529,101 and the
aggregate gross unrealized depreciation is $3,926,820, resulting in net
unrealized depreciation of $3,397,719.
FUTURES CONTRACTS OPEN AT APRIL 30, 1998:
<TABLE>
<CAPTION>
NUMBER OF DESCRIPTION, DELIVERY YEAR, UNDERLYING FACE UNREALIZED
CONTRACTS AND MONTH AMOUNT AT VALUE GAIN/LOSS
- ------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
10 U.S. Treasury Bond June/1998..................... $ 1,216,250 $ (14,062)
10 U.S. Treasury Bond June/1998..................... 1,205,625 (3,438)
10 U.S. Treasury Bond June/1998..................... 1,187,188 15,000
------------------ ------------
Total Futures Contracts $ 3,609,063 $ (2,500)
------------------ ------------
------------------ ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
PORTFOLIO OF INVESTMENTS APRIL 30, 1998 (UNAUDITED) CONTINUED
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT APRIL 30, 1998:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS IN EXCHANGE DELIVERY APPRECIATION
TO DELIVER FOR DATE (DEPRECIATION)
- -------------------------------------------------------------------
<S> <C> <C> <C>
NZD 3,700,000 $2,116,400 05/20/98 $ 74,000
NZD 3,700,000 $2,113,625 05/20/98 71,225
FRF 23,467,500 $3,916,799 06/30/98 3,638
ATS 49,256,900 $3,916,489 06/30/98 3,267
BEF 144,587,100 $3,912,984 06/30/98 8,474
NLG 4,670,000 $2,311,195 07/06/98 (8,230)
CHF 6,520,285 $4,381,323 07/06/98 687
DEM 7,200,000 $3,963,012 09/10/98 (76,279)
DEM 6,745,000 $3,720,148 09/10/98 (63,882)
DEM 7,870,000 $4,351,673 09/25/98 (67,050)
DEM 15,400,000 $8,515,344 09/25/98 (131,203)
--------------
Net unrealized depreciation.................. $ (185,353)
--------------
--------------
</TABLE>
CURRENCY ABBREVIATIONS:
<TABLE>
<S> <C>
ATS Austrian Schilling.
BEF Belgian Franc.
L British Pound.
DKK Danish Krone.
NLG Dutch Guilder.
FRF French Franc.
DEM German Deutschemark.
GRD Greek Drachma.
ITL Italian Lira.
NZD New Zealand Dollar.
ESP Spanish Peseta.
SEK Swedish Krona.
CHF Swiss Franc.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (identified cost $94,127,371).............................. $90,729,652
Unrealized appreciation on open forward foreign currency contracts............................. 161,291
Cash (including $1,069 in foreign currency).................................................... 102,234
Receivable for:
Interest..................................................................................... 2,932,799
Compensated forward foreign currency
contracts................................................................................. 553,517
Shares of beneficial interest sold........................................................... 133,092
Variation margin............................................................................. 45,938
Prepaid expenses............................................................................... 76,966
-----------
TOTAL ASSETS.............................................................................. 94,735,489
-----------
LIABILITIES:
Unrealized depreciation on open forward foreign currency contracts............................. 346,644
Payable for:
Investments purchased........................................................................ 8,915,767
Compensated forward foreign currency
contracts................................................................................. 464,635
Shares of beneficial interest repurchased.................................................... 129,375
Plan of distribution fee..................................................................... 59,782
Investment management fee.................................................................... 53,508
Accrued expenses............................................................................... 112,236
-----------
TOTAL LIABILITIES......................................................................... 10,081,947
-----------
NET ASSETS................................................................................ $84,653,542
-----------
-----------
COMPOSITION OF NET ASSETS:
Paid-in-capital................................................................................ $93,123,902
Net unrealized depreciation.................................................................... (3,422,403)
Dividends in excess of net investment income................................................... (828,089)
Accumulated net realized loss.................................................................. (4,219,868)
-----------
NET ASSETS................................................................................ $84,653,542
-----------
-----------
CLASS A SHARES:
Net Assets..................................................................................... $986,013
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)...................................... 113,473
NET ASSET VALUE PER SHARE................................................................. $8.69
-----------
-----------
MAXIMUM OFFERING PRICE PER SHARE,
(NET ASSET VALUE PLUS 4.44% OF NET ASSET VALUE)......................................... $9.08
-----------
-----------
CLASS B SHARES:
Net Assets..................................................................................... $83,167,007
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)...................................... 9,564,410
NET ASSET VALUE PER SHARE................................................................. $8.70
-----------
-----------
CLASS C SHARES:
Net Assets..................................................................................... $170,369
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)...................................... 19,608
NET ASSET VALUE PER SHARE................................................................. $8.69
-----------
-----------
CLASS D SHARES:
Net Assets..................................................................................... $330,153
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)...................................... 37,978
NET ASSET VALUE PER SHARE................................................................. $8.69
-----------
-----------
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME................................................................................ $ 3,660,886
-----------
EXPENSES
Plan of distribution fee (Class A shares)...................................................... 1,402
Plan of distribution fee (Class B shares)...................................................... 377,919
Plan of distribution fee (Class C shares)...................................................... 506
Investment management fee...................................................................... 339,616
Transfer agent fees and expenses............................................................... 70,718
Registration fees.............................................................................. 42,909
Professional fees.............................................................................. 36,572
Shareholder reports and notices................................................................ 31,056
Custodian fees................................................................................. 13,152
Directors' fees and expenses................................................................... 10,003
Other.......................................................................................... 3,051
-----------
TOTAL EXPENSES............................................................................ 926,904
-----------
NET INVESTMENT INCOME..................................................................... 2,733,982
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments................................................................................ 30,902
Futures contracts.......................................................................... 197,966
Foreign exchange transactions.............................................................. (245,662)
-----------
NET LOSS.................................................................................. (16,794)
-----------
Net change in unrealized appreciation/ depreciation on:
Investments................................................................................ (2,172,795)
Future contracts........................................................................... (2,500)
Translation of forward foreign currency transactions, other assets and liabilities
denominated in foreign currencies........................................................ 49,252
-----------
NET DEPRECIATION.......................................................................... (2,126,043)
-----------
NET LOSS.................................................................................. (2,142,837)
-----------
NET INCREASE................................................................................... $ 591,145
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<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
APRIL 30, 1998 OCTOBER 31, 1997*
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------
<CAPTION>
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income..................................... $ 2,733,982 $ 6,295,763
Net realized gain (loss).................................. (16,794) 2,422,462
Net change in unrealized depreciation..................... (2,126,043) (1,657,235 )
------------- -----------------
NET INCREASE......................................... 591,145 7,060,990
------------- -----------------
DIVIDENDS TO SHAREHOLDERS FROM
NET INVESTMENT INCOME:
Class A shares............................................ (69,349) (6,031 )
Class B shares............................................ (3,931,223) (10,673,831 )
Class C shares............................................ (5,215) (1,171 )
Class D shares............................................ (7,184) (283 )
------------- -----------------
TOTAL DIVIDENDS...................................... (4,012,971) (10,681,316 )
------------- -----------------
Net decrease from transactions in shares of beneficial
interest................................................ (7,312,590) (15,013,234 )
------------- -----------------
NET DECREASE......................................... (10,734,416) (18,633,560 )
NET ASSETS:
Beginning of period....................................... 95,387,958 114,021,518
------------- -----------------
END OF PERIOD
(INCLUDING DIVIDENDS IN EXCESS OF NET INVESTMENT
INCOME OF $828,089 AND UNDISTRIBUTED NET INVESTMENT
INCOME OF $450,900, RESPECTIVELY)..................... $ 84,653,542 $ 95,387,958
------------- -----------------
------------- -----------------
</TABLE>
- ---------------------
* Class A, Class C and Class D shares were issued July 28, 1997.
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS APRIL 30, 1998 (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's primary investment objective
is to provide a high level of current income and, as a secondary objective,
seeks appreciation in the value of its assets. The Fund was organized as a
Massachusetts business trust on October 14, 1988 and commenced operations on
March 30, 1989. On July 28, 1997, the Fund commenced offering three additional
classes of shares, with the then current shares designated as Class B shares.
The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase, some Class
A shares, and most Class B shares and Class C shares are subject to a contingent
deferred sales charge imposed on shares redeemed within one year, six years and
one year, respectively. Class D shares are not subject to a sales charge.
Additionally, Class A shares, Class B shares and Class C shares incur
distribution expenses.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ from
these estimates.
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) 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; (3) when market quotations are not readily available, including
circumstances under which it is determined by Dean Witter InterCapital Inc. (the
"Investment Manager") that sale or bid prices are not reflective of a security's
market value, portfolio securities are valued at their fair value as determined
in good faith under 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); (4) certain portfolio securities may be valued by an
outside pricing service approved by the Trustees. The pricing service may
utilize a matrix system incorporating security
10
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS APRIL 30, 1998 (UNAUDITED) CONTINUED
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 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. Interest
income is accrued daily.
C. MULTIPLE CLASS ALLOCATIONS -- Investment income, expenses (other than
distribution fees), and realized and unrealized gains and losses are allocated
to each class of shares based upon the relative net asset value on the date such
items are recognized. Distribution fees are charged directly to the respective
class.
D. 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, U.S. Government securities or other liquid portfolio 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.
E. 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 foreign currency
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
11
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS APRIL 30, 1998 (UNAUDITED) CONTINUED
included in realized and unrealized gain/loss 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.
F. 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.
G. 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.
H. 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
12
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS APRIL 30, 1998 (UNAUDITED) CONTINUED
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.
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund's books and
records and furnishes, at its own expense, office space, facilities, equipment,
clerical, bookkeeping and certain legal services and pays the salaries of all
personnel, including officers of the Fund who are employees of the Investment
Manager. The Investment Manager also bears the cost of telephone services, heat,
light, power and other utilities provided to the Fund.
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Dean Witter Distributors Inc. (the
"Distributor"), an affiliate of the Investment Manager. The Fund has adopted a
Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act. The Plan
provides that the Fund will pay the Distributor a fee which is accrued daily and
paid monthly at the following annual rates: (i) Class A -- up to 0.25% of the
average daily net assets of Class A; (ii) Class B -- 0.85% of the lesser of: (a)
the average daily aggregate gross sales of the Class B shares since inception of
the Fund (not including reinvestment of dividend or capital gain distributions)
less the average net asset value of the Class B shares redeemed since the Fund's
inception upon which a contingent deferred sales charge has been imposed or
waived; or (b) the average daily net assets of Class B; and (iii) Class C -- up
to 0.85% of the average daily net assets of Class C. In the case of Class A
shares, amounts paid under the Plan are paid to the Distributor for services
provided. In the case of Class B and Class C shares, amounts paid under the Plan
are paid to the Distributor for services provided and the expenses borne by it
and others in the distribution of the shares of these Classes, including the
payment of commissions for sales of these Classes and incentive compensation to,
and expenses of, the account executives of Dean Witter Reynolds Inc. ("DWR"), an
affiliate of the Investment Manager and Distributor, and others who engage in or
support distribution of the shares or who service shareholder accounts,
including overhead and telephone expenses; printing and distribution of
prospectuses and reports used in connection with the offering of these shares to
other than current shareholders; and preparation, printing and distribution of
sales literature and advertising materials. In addition, the Distributor may
utilize fees paid pursuant to the Plan, in the case of Class B shares, to
compensate DWR and other selected broker-dealers for their opportunity costs in
advancing such amounts, which compensation would be in the form of a carrying
charge on any unreimbursed expenses.
13
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS APRIL 30, 1998 (UNAUDITED) CONTINUED
In the case of Class B shares, provided that the Plan continues in effect, any
cumulative expenses incurred by the Distributor but not yet recovered may be
recovered through the payment of future distribution fees from the Fund pursuant
to the Plan and contingent deferred sales charges paid by investors upon
redemption of Class B shares. Although there is no legal obligation for the Fund
to pay expenses incurred in excess of payments made to the Distributor under the
Plan and the proceeds of contingent deferred sales charges paid by investors
upon redemption of shares, if for any reason the Plan is terminated, the
Trustees will consider at that time the manner in which to treat such expenses.
The Distributor has advised the Fund that such excess amounts, including
carrying charges, totaled $8,393,555 at April 30, 1998.
In the case of Class A shares and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 0.85% of the average daily
net assets of Class A or Class C, respectively, will not be reimbursed by the
Fund through payments in any subsequent year, except that expenses representing
a gross sales credit to account executives may be reimbursed in the subsequent
calendar year. For the six months ended April 30, 1998, the distribution fee was
accrued for Class A shares and Class C shares at the annual rate of 0.21% and
0.85%, respectively.
The Distributor has informed the Fund that for the six months ended April 30,
1998, it received contingent deferred sales charges from certain redemptions of
the Fund's Class B shares of $21,957 and received $1,215 in front-end sales
charges from sales of the Fund's Class A shares. The respective shareholders pay
such charges which are not an expense of the Fund.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the six months ended April 30, 1998 aggregated
$138,147,462 and $132,712,186, respectively. Included in the aforementioned are
purchases and sales of U.S. Government securities of $63,860,954 and
$104,239,903, respectively.
Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At April 30, 1998, the Fund had
transfer agent fees and expenses payable of approximately $2,000.
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
14
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS APRIL 30, 1998 (UNAUDITED) CONTINUED
the last five years of service. Aggregate pension costs for the six months ended
April 30, 1998 included in Trustees' fees and expenses in the Statement of
Operations amounted to $2,052. At April 30, 1998, the Fund had an accrued
pension liability of $49,151 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
APRIL 30, 1998 FOR THE YEAR
---------------------------- ENDED
OCTOBER 31, 1997*
(UNAUDITED) --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Sold............................................................. 135,734 $ 1,212,123 80,739 $ 714,181
Reinvestment of dividends........................................ 4,206 37,034 237 2,107
Redeemed......................................................... (102,118) (897,982) (5,325) (47,905)
----------- -------------- ----------- ------------
Net increase - Class A........................................... 37,822 351,175 75,651 668,383
----------- -------------- ----------- ------------
CLASS B SHARES
Sold............................................................. 1,454,374 12,927,613 3,523,435 31,673,600
Reinvestment of dividends........................................ 268,401 2,367,988 689,236 6,224,070
Redeemed......................................................... (2,633,217) (23,320,533) (5,959,324) (53,726,739)
----------- -------------- ----------- ------------
Net decrease - Class B........................................... (910,442) (8,024,932) (1,746,653) (15,829,069)
----------- -------------- ----------- ------------
CLASS C SHARES
Sold............................................................. 6,725 58,751 12,172 107,627
Reinvestment of dividends........................................ 581 5,119 130 1,156
----------- -------------- ----------- ------------
Net increase - Class C........................................... 7,306 63,870 12,302 108,783
----------- -------------- ----------- ------------
CLASS D SHARES
Sold............................................................. 34,214 302,099 4,286 38,458
Reinvestment of dividends........................................ 517 4,536 24 211
Redeemed......................................................... (1,063) (9,338) -- --
----------- -------------- ----------- ------------
Net increase - Class D........................................... 33,668 297,297 4,310 38,669
----------- -------------- ----------- ------------
Net decrease in Fund............................................. (831,646) $ (7,312,590) (1,654,390) $(15,013,234)
----------- -------------- ----------- ------------
----------- -------------- ----------- ------------
</TABLE>
- ---------------------
* For Class A, C, and D shares, for the period July 28, 1997 (issue date)
through October 31, 1997.
6. FEDERAL INCOME TAX STATUS
At October 31, 1997, the Fund had a net capital loss carryover of approximately
$5,327,000 which will be available through October 31, 2002 to offset future
capital gains to the extent provided by regulations.
15
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS APRIL 30, 1998 (UNAUDITED) CONTINUED
As of October 31, 1997, 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.
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").
Forward contracts and 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.
At April 30, 1998, there were outstanding forward contracts used to facilitate
settlement of foreign currency denominated portfolio transactions and to manage
foreign currency exposure.
16
<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 MONTHS
ENDED FOR THE YEAR ENDED OCTOBER 31
APRIL 30, -----------------------------------------------------
1998++ 1997*++ 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
(UNAUDITED)
- -----------------------------------------------------------------------------------
CLASS B SHARES
PER SHARE
OPERATING
PERFORMANCE:
Net asset value,
beginning of
period.......... $ 9.03 $ 9.33 $ 9.08 $ 8.55 $ 9.39 $ 9.11
---------- --------- --------- --------- --------- ---------
Net investment
income.......... 0.26 0.55 0.60 0.55 0.55 0.59
Net realized and
unrealized gain
(loss).......... (0.20) 0.07 0.48 0.48 (0.92) 0.27
---------- --------- --------- --------- --------- ---------
Total from
investment
operations...... 0.06 0.62 1.08 1.03 (0.37) 0.86
---------- --------- --------- --------- --------- ---------
Less dividends
and
distributions
from:
Net investment
income........ (0.39) (0.92) (0.83) (0.50) (0.22) (0.58)
Paid-in-capital... -- -- -- -- (0.25) --
---------- --------- --------- --------- --------- ---------
Total dividends
and
distributions... (0.39) (0.92) (0.83) (0.50) (0.47) (0.58)
---------- --------- --------- --------- --------- ---------
Net asset value,
end of period... $ 8.70 $ 9.03 $ 9.33 $ 9.08 $ 8.55 $ 9.39
---------- --------- --------- --------- --------- ---------
---------- --------- --------- --------- --------- ---------
TOTAL INVESTMENT
RETURN+.......... 0.66%(1) 7.05% 12.60% 12.45% (3.99)% 9.72%
RATIOS TO AVERAGE
NET ASSETS:
Expenses......... 2.06%(2) 2.02% 1.96% 1.93% 1.91% 1.87%
Net investment
income.......... 6.02%(2) 6.07% 6.39% 6.21% 5.87% 6.39%
SUPPLEMENTAL DATA:
Net assets, end
of period, in
thousands....... $83,167 $94,556 $114,022 $138,165 $179,563 $275,319
Portfolio
turnover rate... 170%(1) 345% 263% 254% 229% 229%
</TABLE>
- ---------------------
* Prior to July 28, 1997, the Fund issued one class of shares. All shares of
the Fund held prior to that date have been designated as Class B shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 28, 1997*
FOR THE SIX THROUGH
MONTHS ENDED OCTOBER 31,
APRIL 30, 1998++ 1997++
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
(UNAUDITED)
CLASS A SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................. $ 9.02 $ 8.97
------ ------
Net investment income................................................. 0.30 0.15
Net realized and unrealized gain (loss)............................... (0.21) 0.05
------ ------
Total from investment operations...................................... 0.09 0.20
------ ------
Less dividends from net investment income............................. (0.42) (0.15)
------ ------
Net asset value, end of period........................................ $ 8.69 $ 9.02
------ ------
------ ------
TOTAL INVESTMENT RETURN+.............................................. 0.98%(1) 2.27%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 1.42%(2) 1.46%(2)
Net investment income................................................. 6.74%(2) 6.69%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $986 $682
Portfolio turnover rate............................................... 170%(1) 345%
CLASS C SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................. $ 9.02 $ 8.97
------ ------
Net investment income................................................. 0.27 0.14
Net realized and unrealized gain (loss)............................... (0.21) 0.05
------ ------
Total from investment operations...................................... 0.06 0.19
------ ------
Less dividends from net investment income............................. (0.39) (0.14)
------ ------
Net asset value, end of period........................................ $ 8.69 $ 9.02
------ ------
------ ------
TOTAL INVESTMENT RETURN+.............................................. 0.67%(1) 2.12%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 2.06%(2) 2.00%(2)
Net investment income................................................. 6.07%(2) 5.89%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $170 $111
Portfolio turnover rate............................................... 170%(1) 345%
</TABLE>
- ---------------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 28, 1997*
FOR THE SIX THROUGH
MONTHS ENDED OCTOBER 31,
APRIL 30, 1998++ 1997++
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
(UNAUDITED)
CLASS D SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................. $ 9.03 $ 8.97
------ ------
Net investment income................................................. 0.32 0.16
Net realized and unrealized gain (loss)............................... (0.23) 0.05
------ ------
Total from investment operations...................................... 0.09 0.21
------ ------
Less dividends from net investment income............................. (0.43) (0.15)
------ ------
Net asset value, end of period........................................ $ 8.69 $ 9.03
------ ------
------ ------
TOTAL INVESTMENT RETURN+.............................................. 0.97%(1) 2.44%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 1.23%(2) 1.16%(2)
Net investment income................................................. 7.22%(2) 6.83%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $330 $39
Portfolio turnover rate............................................... 170%(1) 345%
</TABLE>
- ---------------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Calculated based on the net asset value as of the last business day of the
period.
(1) Not annualized.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE>
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn DEAN WITTER
John R. Haire WORLD WIDE
Wayne E. Hedien INCOME TRUST
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
[PHOTO]
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Barry Fink
Vice President, Secretary and General Counsel
Rajesh K. Gupta
Vice President
Peter J. Seeley
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Morgan Stanley Dean Witter Trust FSB
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
SEMIANNUAL REPORT
Price Waterhouse LLP APRIL 30, 1998
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.
