<PAGE>
DEAN WITTER CAPITAL GROWTH SECURITIES
Two World Trade Center
New York, New York 10048
DEAR SHAREHOLDER:
- - - - - --------------------------------------------------------------------------------
When Dean Witter Capital Growth Securities' new fiscal year began in
November 1993, interest rates were at 20-year lows. Within a few months,
however, in early 1994, rates began to rise as signs of substantial economic
strength and heightened inflationary fears became apparent. At the same time,
consumer spending increased as mortgage refinancings generated increased
disposable income. This scenario induced the Federal Reserve Board to change its
stance on monetary policy by raising the federal-funds rate -- the interest rate
banks charge each other for overnight loans -- from 3.00 percent to 3.75 percent
in three separate moves starting in early February. Although this action was
presented as a series of "preemptive" strikes in a war against potential
inflationary pressure, the markets interpreted the moves as the beginning of a
trend toward higher interest rates. The markets reacted immediately, with both
stock and bond prices tumbling.
PERFORMANCE
In the period since October 31, 1993, the broad market as measured by the
Standard & Poor's Index of 500 stocks (S&P 500) recorded a total return of -2.3
percent. During the same time, the Fund registered a total return of -0.95
percent. Since inception (April 2, 1990), through April 30, 1994, the Fund
recorded a total return of 34.27 percent, versus 50.55 percent for the S&P 500.
The Fund's underperformance since inception compared to the S&P 500 is
attributable to the Fund's rigorous original stock-screening process. As
outlined in the Fund's most recent annual report, we have modified the original
stock-screening process to qualify a broader list of appropriate securities.
Although the Fund registered a modest decline over the past six months, its
outperformance of the broad market not only suggests that our modified
stock-selection process is working, but also indicates a renewed focus by
investors on growth stocks. We are confident that the actions taken to modify
the Fund's criteria for selecting stocks for investment will continue to improve
performance in the months to come.
THE PORTFOLIO
During the past six months, we initiated purchases of Coca Cola and
Schering-Plough when these issues qualified for the portfolio under the Fund's
altered stock-screening process. We also sold the Fund's position in Philip
Morris as this issue no longer qualified for inclusion in the portfolio. As of
April 30, 1994, the portfolio consisted of 43 equity issues spread among 31
industry groups.
LOOKING AHEAD
During the six-month period ended April 30, 1994, we experienced unusual
price volatility in the securities markets, and believe that similar intervals
of volatility may recur in the future. However, we believe that the long-term
outlooks for the economy and the securities markets in general are favorable. We
also are strongly convinced that the common stocks of well-established growth
companies will perform relatively well over the longer term. Consequently, we
are confident, patient and relatively fully invested.
We appreciate your support of Dean Witter Capital Growth Securities and look
forward to continuing to serve your investment needs.
Sincerely,
Charles A. Fiumefreddo
CHAIRMAN OF THE BOARD
<PAGE>
DEAN WITTER CAPITAL GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS APRIL 30, 1994 (UNAUDITED)
- - - - - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- - - - - ---------- ---------------
<C> <S> <C>
COMMON STOCKS (97.0%)
ADVERTISING (2.3%)
418,200 Interpublic Group Cos., Inc............................................................. $ 12,232,350
---------------
APPAREL (0.9%)
161,000 Cintas Corp............................................................................. 4,950,750
---------------
AUTOMOTIVE - REPLACEMENT PARTS (2.5%)
362,200 Genuine Parts Co........................................................................ 12,903,375
---------------
BANKING (7.2%)
370,300 Banc One Corp........................................................................... 12,219,900
413,700 Central Fidelity Banks, Inc............................................................. 12,617,850
248,400 Fifth Third Bancorp..................................................................... 12,792,600
---------------
37,630,350
---------------
BEVERAGES - ALCOHOLIC (2.4%)
236,200 Anheuser-Busch Cos., Inc................................................................ 12,784,325
---------------
BEVERAGES - SOFT DRINKS (0.5%)
66,000 Coca Cola Co. (The)..................................................................... 2,747,250
---------------
BUSINESS SYSTEMS (2.4%)
364,300 General Motors Corp. (Class E).......................................................... 12,295,125
---------------
CHEMICALS - SPECIALTY (4.5%)
381,600 Nalco Chemical Co....................................................................... 12,831,300
237,700 Sigma-Aldrich, Inc...................................................................... 10,577,650
---------------
23,408,950
---------------
COMPUTER SOFTWARE (2.4%)
249,200 Automatic Data Processing, Inc.......................................................... 12,833,800
---------------
CONSUMER SERVICES (2.3%)
289,800 Block (H&R), Inc........................................................................ 12,316,500
---------------
COSMETICS (2.4%)
344,700 International Flavors & Fragrances, Inc................................................. 12,581,550
---------------
DRUGS (3.0%)
295,000 Forest Laboratories, Inc. (Class A)*.................................................... 13,090,625
43,000 Schering-Plough Corp.................................................................... 2,623,000
---------------
15,713,625
---------------
DRUGS AND HEALTH CARE (4.5%)
446,300 Abbott Laboratories..................................................................... 12,663,762
351,301 Block Drug, Inc. (Class A).............................................................. 11,153,807
---------------
23,817,569
---------------
ELECTRIC EQUIPMENT (2.4%)
199,200 Grainger (W.W.), Inc.................................................................... 12,450,000
---------------
ELECTRONICS (2.4%)
369,600 Dionex Corp.*........................................................................... 12,566,400
---------------
<PAGE>
</TABLE>
DEAN WITTER CAPITAL GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS APRIL 30, 1994 (UNAUDITED) (CONTINUED)
- - - - - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- - - - - ---------- ---------------
<C> <S> <C>
ELECTRONICS - DEFENSE (0.9%)
333,500 EG & G, Inc............................................................................. $ 4,960,813
---------------
ENTERTAINMENT (2.4%)
418,700 Circus Circus Enterprises, Inc.*........................................................ 12,770,350
---------------
FOOD WHOLESALERS (2.4%)
489,200 Sysco Corp.............................................................................. 12,719,200
---------------
FOODS (12.8%)
438,700 ConAgra, Inc............................................................................ 12,338,438
319,700 Smucker (J.M.) Co., (Class A)........................................................... 7,033,400
263,800 Smucker (J.M.) Co., (Class B)........................................................... 5,605,750
266,373 Tootsie Roll Industries, Inc............................................................ 17,114,465
623,500 Tyson Foods, Inc. (Class A)............................................................. 12,080,313
247,800 Wrigley, (Wm.) Jr., Co., (Class A)...................................................... 12,792,675
---------------
66,965,041
---------------
HOUSEWARES (2.2%)
437,400 Rubbermaid, Inc......................................................................... 11,591,100
---------------
INSURANCE (3.3%)
1,113,200 Crawford & Co., (Class B)............................................................... 17,532,900
---------------
MACHINERY - DIVERSIFIED (2.3%)
319,000 Thermo Electron Corp.*.................................................................. 12,082,125
---------------
MANUFACTURED HOUSING (2.4%)
580,000 Clayton Homes, Inc.*.................................................................... 12,397,500
---------------
MANUFACTURING (2.4%)
647,701 Federal Signal Corp..................................................................... 12,792,088
---------------
MEDICAL EQUIPMENT (4.4%)
1,218,100 Biomet, Inc.*........................................................................... 11,876,475
419,800 Stryker Corp............................................................................ 11,124,700
---------------
23,001,175
---------------
RESTAURANTS (4.8%)
691,100 International Dairy Queen, Inc. (Class A)*.............................................. 12,267,025
216,400 McDonald's Corp......................................................................... 12,984,000
---------------
25,251,025
---------------
RETAIL - DEPARTMENT STORES (4.7%)
365,900 Dillard Department Stores Inc., (Class A)............................................... 12,257,650
487,800 Wal-Mart Stores, Inc.................................................................... 12,316,950
---------------
24,574,600
---------------
RETAIL - DRUG STORES (2.4%)
304,900 Walgreen Co............................................................................. 12,729,575
---------------
RETAIL - FOOD CHAINS (2.4%)
438,800 Albertson's, Inc........................................................................ 12,560,650
---------------
<PAGE>
</TABLE>
DEAN WITTER CAPITAL GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS APRIL 30, 1994 (UNAUDITED) (CONTINUED)
- - - - - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- - - - - ---------- ---------------
<C> <S> <C>
TOBACCO (2.5%)
475,600 UST, Inc................................................................................ $ 13,257,350
---------------
UTILITIES (2.6%)
516,317 Citizens Utilities Co. of Delaware (Series A)*.......................................... 8,454,690
301,884 Citizens Utilities Co. of Delaware (Series B)*.......................................... 4,943,351
---------------
13,398,041
---------------
TOTAL COMMON STOCKS (IDENTIFIED COST $521,755,913)...................................... 509,815,452
---------------
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS)
- - - - - ----------
<C> <S> <C>
SHORT-TERM INVESTMENTS (2.7%)
COMMERCIAL PAPER(A)(1.1%)
FINANCE - ENERGY (1.1%)
$ 6,000 Chevron Oil Financial Corp. 3.63% due 5/05/94 (Amortized Cost $5,997,546)................ 5,997,546
---------------
U.S. GOVERNMENT AGENCY(A)(1.4%)
7,100 Federal Home Loan Mortgage Corp. 3.51% due 5/02/94 (Amortized Cost $7,099,310)........... 7,099,310
---------------
REPURCHASE AGREEMENT (0.2%)
1,127 The Bank of New York 3.625% due 5/02/94 (dated 4/29/94; proceeds $1,126,883;
collateralized by $1,156,479 U.S. Treasury Note 4.25% due 12/31/95 valued at
$1,262,604) (Identified Cost $1,126,656)............................................... 1,126,656
---------------
TOTAL SHORT-TERM INVESTMENTS (IDENTIFIED COST $14,223,512)............................... 14,223,512
<C> ---------------
TOTAL INVESTMENTS (IDENTIFIED COST $535,979,425)...................................... 99.7% 524,038,964
OTHER ASSETS IN EXCESS OF LIABILITIES................................................. 0.3 1,366,214
------ -------------
NET ASSETS........................................................................... 100.0% $ 525,405,178
------ -------------
------ -------------
<FN>
- - - - - ------------------
* NON-INCOME PRODUCING SECURITY.
(A) COMMERCIAL PAPER AND U.S. GOVERNMENT AGENCY WERE PURCHASED ON A DISCOUNT
BASIS. THE INTEREST RATES SHOWN HAVE BEEN ADJUSTED TO REFLECT A BOND
EQUIVALENT YIELD.
(B) THE AGGREGATE COST FOR FEDERAL INCOME TAX PURPOSES IS $535,994,345; THE
AGGREGATE GROSS UNREALIZED APPRECIATION IS $40,095,888 AND THE AGGREGATE
GROSS UNREALIZED DEPRECIATION IS $52,051,269, RESULTING IN NET UNREALIZED
DEPRECIATION OF $11,955,381.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER CAPITAL GROWTH SECURITIES
FINANCIAL STATEMENTS
- - - - - --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1994 (UNAUDITED)
- - - - - --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $535,979,425) (Note
1)...................................... $ 524,038,964
Receivable for:
Investments sold (Note 4)............... 2,740,195
Shares of beneficial interest sold...... 519,500
Dividends............................... 228,749
Deferred organizational expenses (Note
1)...................................... 23,285
Prepaid expenses and other assets......... 29,381
-------------
TOTAL ASSETS...................... 527,580,074
-------------
LIABILITIES:
Payable for:
Shares of beneficial interest
repurchased........................... 622,030
Investments purchased................... 464,100
Plan of distribution fee (Note 3)....... 436,233
Investment management fee (Note 2)...... 280,873
Accrued expenses and other payables (Note
4)...................................... 371,660
-------------
TOTAL LIABILITIES................. 2,174,896
-------------
NET ASSETS:
Paid-in-capital........................... 539,821,242
Accumulated net investment loss........... (676,678)
Accumulated net realized loss on
investments............................. (1,798,925)
Net unrealized depreciation............... (11,940,461)
-------------
NET ASSETS........................ $ 525,405,178
-------------
-------------
NET ASSET VALUE PER SHARE, 44,360,011
shares outstanding (unlimited shares
authorized of $.01 par value)...........
$11.84
-------------
-------------
</TABLE>
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED APRIL 30, 1994 (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
INCOME
Dividends.............................. $ 4,998,251
Interest............................... 118,245
-----------
TOTAL INCOME....................... 5,116,496
-----------
EXPENSES
Plan of distribution fee (Note 3)...... 3,029,915
Investment management fee (Note 2)..... 1,914,398
Transfer agent fees and expenses....... 604,001
Shareholder reports and notices........ 61,067
Custodian fees......................... 54,751
Professional fees...................... 33,123
Registration fees...................... 27,787
Trustees' fees and expenses (Note 4)... 14,235
Organizational expenses (Note 1)....... 12,616
Other.................................. 4,020
-----------
TOTAL EXPENSES..................... 5,755,913
-----------
NET INVESTMENT LOSS.............. (639,417)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (Note 1):
Net realized loss on investments....... (1,783,014)
Net change in unrealized depreciation
on investments....................... 32,526
-----------
NET LOSS ON INVESTMENTS............ (1,750,488)
-----------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS...... $(2,389,905)
-----------
-----------
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- - - - - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX MONTHS FOR THE YEAR
ENDED ENDED
APRIL 30, 1994 OCTOBER 31,
(UNAUDITED) 1993
------------------ --------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment loss....................................................... $ (639,417) $ (3,384,674)
Net realized gain (loss) on investments................................... (1,783,014) 68,600,006
Net change in unrealized depreciation on investments...................... 32,526 (115,365,070)
------------------ --------------
Net decrease in net assets resulting from operations.................. (2,389,905) (50,149,738)
Distributions to shareholders from net realized gain........................ (68,486,686) (11,268,234)
Net decrease from transactions in shares of beneficial interest (Note 5).... (86,883,350) (228,526,648)
------------------ --------------
Total decrease........................................................ (157,759,941) (289,944,620)
NET ASSETS:
Beginning of period......................................................... 683,165,119 973,109,739
------------------ --------------
END OF PERIOD (including accumulated net investment loss of $676,678 and
$6,951,968, respectively).................................................. $ 525,405,178 $ 683,165,119
------------------ --------------
------------------ --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER CAPITAL GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- - - - - --------------------------------------------------------------------------------
1. ORGANIZATION AND ACCOUNTING POLICIES -- Dean Witter Capital Growth Securities
(the "Fund") is registered under the Investment Company Act of 1940, as amended
(the "Act"), as a diversified, open-end management investment company. It was
organized on December 8, 1989 as a Massachusetts business trust and commenced
operations on April 2, 1990.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) an equity portfolio security listed or
traded on the New York or American Stock Exchange is valued at its latest
sale price on that exchange, 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 bid price; (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) the
fair value of short-term debt securities which mature at a date less than
sixty days subsequent to the valuation date are determined on an amortized
cost or amortized value basis; and (5) the value of other assets will be
determined in good faith at fair value under procedures established by and
under the general supervision of the Fund's Trustees.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on
the trade date (date the order to buy or sell is executed). Realized gains
and losses on security transactions are determined on the identified cost
method. Dividend income is recorded on the ex-dividend date. Interest income
is accrued daily and includes amortization of discounts on certain
short-term securities.
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.
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 detemined 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 that 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.
E. ORGANIZATIONAL EXPENSES -- The Fund's Investment Manager paid the
organizational expenses of the Fund in the amount of approximately $127,100.
Organizational expenses have been reimbursed by the Fund for the full amount
thereof and are being amortized by the straight line method over a period
not to exceed five years from the commencement of operations.
<PAGE>
DEAN WITTER CAPITAL GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- - - - - --------------------------------------------------------------------------------
F. REPURCHASE AGREEMENTS-- The Fund's custodian takes possession on behalf
of the Fund of the collateral pledged for investments in repurchase
agreements. It is the policy of the Fund to value the underlying collateral
daily on a mark-to-market basis to determine that the value, including
accrued interest, is at least equal to the repurchase price plus accrued
interest. In the event of default of the obligation to repurchase, the Fund
has the right to liquidate the collateral and apply the proceeds in
satisfaction of the obligation.
2. INVESTMENT MANAGEMENT AGREEMENT -- Pursuant to an Investment Management
Agreement (the "Agreement") with Dean Witter InterCapital Inc., the Fund pays
its Investment Manager a management fee, accrued daily and payable monthly, by
applying the following annual rates to the net assets of the Fund determined as
of the close of each business day: 0.65% of the portion of the daily net assets
not exceeding $500 million; 0.55% of the portion of the daily net assets
exceeding $500 million but not exceeding $1 billion; 0.50% of the portion of the
daily net assets exceeding $1 billion but not exceeding $1.5 billion; and 0.475%
of the portion of the daily net assets exceeding $1.5 billion.
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund's books and
records and furnishes office space and facilities, equipment, clerical,
bookkeeping and certain legal services, and pays the salaries of all personnel,
including officers of the Fund who are employees of the Investment Manager. The
Investment Manager also bears the cost of telephone services, heat, light, power
and other utilities provided to the Fund.
3. PLAN OF DISTRIBUTION -- Shares of the Fund are distributed by Dean Witter
Distributors Inc. (the "Distributor"), an affiliate of the Investment Manager.
The Fund has adopted a Plan of Distribution (the "Plan") pursuant to Rule 12b-1
under the Act, pursuant to which the Fund pays the Distributor 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
inception of the Fund (not including reinvestments of dividends or capital gains
distributions), less the average daily aggregate net asset value of the Fund's
shares redeemed since the 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 Dean Witter Reynolds Inc.'s account executives and others who engage
in or support distribution of the Fund's shares or who service shareholder
accounts, including overhead and telephone expenses, printing and distribution
of prospectuses and reports used in connection with the offering of the Fund's
shares, 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.
<PAGE>
DEAN WITTER CAPITAL GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- - - - - --------------------------------------------------------------------------------
The Distributor has informed the Fund that for the six months ended April
30, 1994, it received approximately $975,000 in deferred sales charges from
certain redemptions of the Fund's shares. The Fund's shareholders pay such
charges which are not an expense of the Fund.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES -- The cost of
purchases and the proceeds from sales of securities, excluding short-term
investments, for the six months ended April 30, 1994 aggregated $28,085,335 and
$182,005,048, respectively. For the same period, the Fund incurred brokerage
commissions of $122,925 with Dean Witter Reynolds Inc. for transactions executed
on behalf of the Fund. At April 30, 1994, the Fund's receivable for investments
sold included unsettled trades with Dean Witter Reynolds Inc. of $2,340,868.
On April 1, 1991, the Fund established an unfunded noncontributory defined
pension plan covering all Independent Trustees of the Fund who will have served
as an independent Trustee for at least five years at the time of retirement.
Benefits under this plan are based on years of service and compensation during
the last five years of service. Aggregate pension cost for the six months ended
April 30, 1994 included in Trustees' fees and expenses in the Statement of
Operations, amounted to $14,235. At April 30, 1994 the Fund had an accrued
pension liability of $41,521 which is included in accrued expenses in the
Statement of Assets and Liabilities.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At April 30, 1994, the Fund had
transfer agent fees and expenses payable of approximately $159,000.
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, 1994 OCTOBER 31, 1993
-------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Sold.............................. 2,909,002 $ 36,653,576 12,557,157 $ 177,024,756
Reinvestment of distributions..... 5,417,749 65,717,298 719,602 10,786,826
----------- ------------- ------------ -------------
8,326,751 102,370,874 13,276,759 187,811,582
Repurchased....................... (15,151,333) (189,254,224) (31,140,889) (416,338,230)
----------- ------------- ------------ -------------
Net decrease...................... (6,824,582) $ (86,883,350) (17,864,130) $(228,526,648)
----------- ------------- ------------ -------------
----------- ------------- ------------ -------------
</TABLE>
6. FEDERAL INCOME TAX STATUS -- As of October 31, 1993, the Fund had permanent
book/tax differences primarily attributable to net operating losses and dividend
redesignations. To reflect reclassifications arising from permanent book/tax
differences as of October 31, 1993, accumulated net investment loss was credited
$6,914,707, accumulated undistributed net realized gain was charged $167,340 and
paid-in-capital was charged $6,747,367.
<PAGE>
DEAN WITTER CAPITAL GROWTH SECURITIES
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, 1994 ---------------------------------------
(UNAUDITED) 1993 1992 1991
----------------- --------- --------- ---------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period........ $ 13.35 $ 14.09 $ 13.58 $ 9.19
----------------- --------- --------- ---------
Net investment income (loss).............. (0.04) (0.08) (0.03) (0.01)
Net realized and unrealized gain (loss) on
investments.............................. (0.05) (0.50) 0.58 4.42
----------------- --------- --------- ---------
Total from investment operations............ (0.09) (0.58) 0.55 4.41
----------------- --------- --------- ---------
Less dividends and distributions:
Dividends from net investment income...... 0.00 0.00 0.00 (0.02)
Distributions from net realized gains on
investments.............................. (1.42) (0.16) (0.04) 0.00
----------------- --------- --------- ---------
Total dividends and distributions........... (1.42) (0.16) (0.04) (0.02)
----------------- --------- --------- ---------
Net asset value, end of period.............. $ 11.84 $ 13.35 $ 14.09 $ 13.58
----------------- --------- --------- ---------
----------------- --------- --------- ---------
TOTAL INVESTMENT RETURN +................... (0.95) %(1) (4.25)% 4.06% 48.07%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands).... $525,405 $683,165 $973,110 $600,027
Ratio of expenses to average net assets..... 1.90 %(2) 1.81% 1.74% 1.83%
Ratio of net investment income (loss) to
average net assets......................... (0.21) %(2) (0.38)% (0.32)% (0.17)%
Portfolio turnover rate..................... 5 % 25% 29% 40%
<CAPTION>
FOR THE PERIOD
APRIL 2, 1990*
THROUGH
OCTOBER 31, 1990
-----------------
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period........ $ 10.00
-----------------
Net investment income (loss).............. 0.01
Net realized and unrealized gain (loss) on
investments.............................. (0.82)
-----------------
Total from investment operations............ (0.81)
-----------------
Less dividends and distributions:
Dividends from net investment income...... 0.00
Distributions from net realized gains on
investments.............................. 0.00
-----------------
Total dividends and distributions........... 0.00
-----------------
Net asset value, end of period.............. $ 9.19
-----------------
-----------------
TOTAL INVESTMENT RETURN +................... (8.10) %(1)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands).... $206,588
Ratio of expenses to average net assets..... 1.97 %(2)
Ratio of net investment income (loss) to
average net assets......................... 0.25 %(2)
Portfolio turnover rate..................... 10 %
<FN>
- - - - - ---------------
* DATE OF COMMENCEMENT OF OPERATIONS.
+ DOES NOT REFLECT THE DEDUCTION OF SALES LOAD.
(1) NOT ANNUALIZED.
(2) ANNUALIZED.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
T R U S T E E S
Jack F. Bennett
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. John E. Jeuck
Dr. Manuel H. Johnson
Paul Kolton
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
Edward R. Telling
O F F I C E R S
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Sheldon Curtis
Vice President, Secretary and General Counsel
Paul D. Vance
Vice President
Thomas F. Caloia
Treasurer
T R A N S F E R A G E N T
Dean Witter Trust Company
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
L E G A L C O U N S E L
Sheldon Curtis
Two World Trade Center
New York, New York 10048
I N D E P E N D E N T A C C O U N T A N T S
Price Waterhouse
1177 Avenue of the Americas
New York, New York 10036
I N V E S T M E N T M A N A G E R
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.
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Dean Witter
Capital Growth
Securities
[PHOTO]
SEMIANNUAL REPORT
APRIL 30, 1994
