<PAGE>
DEAN WITTER CAPITAL GROWTH SECURITIES TWO WORLD TRADE CENTER, NEW YORK, NEW
YORK 10048
LETTER TO THE SHAREHOLDERS
DEAR SHAREHOLDER:
When the fiscal year began on November 1, 1994, the Federal Reserve Board was in
the midst of aggressively tightening monetary policy with the hopes of
orchestrating a "soft landing" for the economy and restraining inflation. By the
first quarter of 1995, it appeared that the central bank's strategy was on the
mark, as both the stock and bond markets advanced. The U.S. equity market, led
by technology and financial stocks, scaled new heights during the second
quarter. Clearly, the bulls had a lot to celebrate: the expectation of slower
U.S. growth (with no recession), containment of inflation, continued profit
increases, a balanced budget bill, slower growth overseas and an improvement in
the dollar.
As the fiscal year came to a close on October 31, 1995, stock prices sprinted
higher, with the intrepid technology sector propelling several major averages to
record levels. Overall, the fiscal year ended October 31, 1995 was favorable to
equity investors.
PERFORMANCE AND PORTFOLIO
Against this backdrop, Dean Witter Capital Growth Securities produced a total
return of 21.42 percent compared to a return of 26.43 percent for the Standard &
Poor's 500 Composite Stock Price Index (S&P 500 Index). This underperformance of
the broad-based S&P 500 Index was primarily due to the Fund's lack of exposure
to technology and emerging growth stocks, which led the stock market's rally.
Although Capital Growth Securities underperformed in comparison with the market
for most of its fiscal year, late in the year we noticed a shift in investors'
attention away from highly volatile technology and high performance growth
stocks toward high quality, consistent growth stocks such as those held in the
Fund's portfolio. Going forward, we believe this trend into high quality growth
stocks will continue. The accompanying chart illustrates the growth of a $10,000
investment in the Fund from inception (April 2, 1990) through the fiscal year
ended October 31, 1995 versus a similar investment in the securities that
comprise the S&P 500 Index.
<PAGE>
DEAN WITTER CAPITAL GROWTH SECURITIES
LETTER TO THE SHAREHOLDERS, CONTINUED
During the past twelve months, we have initiated purchases of Microsoft,
American International Group, Home Depot, U.S. Healthcare, Computer Associates,
Johnson & Johnson, and Medtronic. We sold the Fund's positions in Crawford & Co.
(Class B) and Banc One, as these two issues no longer qualified for the
portfolio under the Fund's rigorous screening process. As of October, 1995, the
portfolio consisted of forty-seven (47) equity issues spread among thirty-eight
(38) industry groups.
LOOKING AHEAD
[GRAPHIC]
Until recently we have experienced
enormous price strength in the equity
market. Yet in the past month or so, we
have begun to see some indications of a
slowdown: long-term interest rates were
down in mid-October and economic
indicators, including a flattened yield
curve, point to restrained inflation in
the months ahead. The common stocks
held in the Fund's portfolio are
well-established growth companies with
good long-term performance prospects.
Consequently, the Fund remains
relatively fully invested.
[GRAPHIC]
We appreciate your ongoing support of
Dean Witter Capital Growth Securities
and look forward to continuing to serve
your investment needs.
Very truly yours,
[SIGNATURE]
CHARLES A. FIUMEFREDDO
CHAIRMAN OF THE BOARD
<PAGE>
DEAN WITTER CAPITAL GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1995
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (97.4%)
ADVERTISING (2.3%)
284,200 Interpublic Group of Companies,
Inc................................. $ 11,012,750
---------------
APPAREL (2.2%)
255,000 Cintas Corp......................... 10,710,000
---------------
AUTOMOTIVE - REPLACEMENT PARTS (2.3%)
283,200 Genuine Parts Co.................... 11,221,800
---------------
BANKING (2.2%)
160,600 Fifth Third Bancorp................. 10,760,200
---------------
BEVERAGES - ALCOHOLIC (2.2%)
159,800 Anheuser-Busch Companies, Inc....... 10,546,800
---------------
BEVERAGES - SOFT DRINKS (2.2%)
151,000 Coca Cola Co........................ 10,853,125
---------------
BIOTECHNOLOGY (0.3%)
25,000 Medtronic Inc....................... 1,443,750
---------------
BUSINESS SYSTEMS (2.4%)
242,600 General Motors Corp. (Class E)...... 11,432,525
---------------
CHEMICALS - SPECIALTY (2.2%)
226,200 Sigma-Aldrich Corp.................. 10,744,500
---------------
COMPUTER SERVICES (2.3%)
155,800 Automatic Data Processing, Inc...... 11,139,700
---------------
COMPUTER SOFTWARE (4.5%)
204,550 Computer Associates International,
Inc................................. 11,250,250
107,000 Microsoft Corp.*.................... 10,700,000
---------------
21,950,250
---------------
CONSUMER SERVICES (2.2%)
252,800 Block (H.&R.), Inc.................. 10,428,000
---------------
COSMETICS (2.3%)
225,200 International Flavors & Fragrances
Inc................................. 10,865,900
---------------
DRUGS (4.4%)
252,500 Forest Laboratories, Inc.*.......... 10,447,187
203,000 Schering-Plough Corp................ 10,885,875
---------------
21,333,062
---------------
DRUGS & HEALTHCARE (2.2%)
269,500 Abbott Laboratories................. 10,712,625
---------------
ELECTRICAL EQUIPMENT (2.3%)
175,400 Grainger (W.W.), Inc................ 10,962,500
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
ELECTRONICS (2.3%)
209,600 Dionex Corp.*....................... $ 11,161,200
---------------
ENTERTAINMENT (2.2%)
405,500 Circus Circus Enterprises, Inc.*.... 10,796,438
---------------
FINANCIAL - MISCELLANEOUS (2.3%)
104,000 Federal National Mortgage
Association......................... 10,907,000
---------------
FOOD WHOLESALERS (2.3%)
364,200 Sysco Corp.......................... 11,062,575
---------------
FOODS (6.4%)
276,700 ConAgra, Inc........................ 10,687,537
274,084 Tootsie Roll Industries, Inc........ 9,901,285
222,800 Wrigley (Wm.) Jr. Co. (Class A)..... 10,360,200
---------------
30,949,022
---------------
GOLD MINING (2.1%)
438,000 Barrick Gold Corp. (Canada)......... 10,128,750
---------------
HEALTH CARE - MISCELLANEOUS (2.2%)
275,500 U.S. HealthCare, Inc................ 10,606,750
---------------
HOUSEWARES (0.8%)
142,400 Rubbermaid, Inc..................... 3,720,200
---------------
INSURANCE (2.3%)
131,100 American International Group,
Inc................................. 11,061,562
---------------
MACHINERY - DIVERSIFIED (2.3%)
245,500 Thermo Electron Corp.*.............. 11,293,000
---------------
MANUFACTURED HOUSING (2.3%)
419,000 Clayton Homes, Inc.................. 10,998,750
---------------
MANUFACTURING (4.5%)
497,700 Federal Signal Corp................. 11,136,038
366,000 Loral Corp.......................... 10,842,750
---------------
21,978,788
---------------
MANUFACTURING - DIVERSIFIED (2.3%)
299,000 Sherwin-Williams Co................. 11,249,875
---------------
MEDICAL EQUIPMENT (4.4%)
635,100 Biomet, Inc.*....................... 10,558,538
234,000 Stryker Corp........................ 10,559,250
---------------
21,117,788
---------------
PHARMACEUTICALS (0.3%)
18,000 Johnson & Johnson................... 1,467,000
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER CAPITAL GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1995, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
RESTAURANTS (6.6%)
855,000 Brinker International, Inc.*........ $ 10,366,875
517,200 International Dairy Queen, Inc.
(Class A)*.......................... 10,990,500
260,000 McDonald's Corp..................... 10,660,000
---------------
32,017,375
---------------
RETAIL - DEPARTMENT STORES (2.1%)
469,800 Wal-Mart Stores, Inc................ 10,159,425
---------------
RETAIL - DRUG STORES (2.3%)
395,800 Walgreen Co......................... 11,280,300
---------------
RETAIL - FOOD CHAINS (2.3%)
330,300 Albertson's Inc..................... 10,982,475
---------------
RETAIL - SPECIALTY (2.2%)
283,000 Home Depot, Inc..................... 10,541,750
---------------
TOBACCO (2.2%)
359,100 UST, Inc............................ 10,773,000
---------------
UTILITIES (2.2%)
488,943 Citizens Utilities Co. (Series
A)*................................. 5,378,373
494,995 Citizens Utilities Co. (Series
B)*................................. 5,506,819
---------------
10,885,192
---------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $387,271,209)...... 471,255,702
---------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ------------------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENTS (0.6%)
U.S. GOVERNMENT AGENCY (a) (0.5%)
$ 2,400 Student Loan Marketing Association
5.82% due 11/01/95 (Amortized Cost
$2,400,000)......................... 2,400,000
---------------
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ------------------------------------------------------------------
<C> <S> <C>
REPURCHASE AGREEMENT (0.1%)
$ 498 The Bank of New York 5.8125% due
11/01/95 (dated 10/31/95; proceeds
$497,905; collaterized by $520,916
Federal National Mortgage
Association 7.50% due 10/25/19
valued at $531,976) (Identified Cost
$497,825)........................... $ 497,825
---------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $2,897,825)........ 2,897,825
---------------
TOTAL INVESTMENTS
(IDENTIFIED COST
$390,169,034) (b)........... 98.0% 474,153,527
OTHER ASSETS IN EXCESS OF
LIABILITIES................. 2.0 9,716,176
----- ------------
NET ASSETS.................. 100.0% $483,869,703
----- ------------
----- ------------
<FN>
- ---------------------
* Non-income producing security.
(a) Security was purchased on a discount basis. The interest rate shown
reflects a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes is $391,394,213; the
aggregate gross unrealized appreciation is $93,227,282 and the aggregate
gross unrealized depreciation is $10,467,968, resulting in net unrealized
appreciation of $82,759,314.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER CAPITAL GROWTH SECURITIES
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $390,169,034)............................ $474,153,527
Receivable for:
Investments sold........................................ 13,338,071
Shares of beneficial interest sold...................... 417,110
Dividends............................................... 210,053
Prepaid expenses and other assets........................... 18,569
------------
TOTAL ASSETS........................................... 488,137,330
------------
LIABILITIES:
Payable for:
Investments purchased................................... 2,925,527
Plan of distribution fee................................ 425,045
Shares of beneficial interest repurchased............... 402,469
Investment management fee............................... 276,279
Accrued expenses............................................ 238,307
------------
TOTAL LIABILITIES...................................... 4,267,627
------------
NET ASSETS:
Paid-in-capital............................................. 404,283,595
Net unrealized appreciation................................. 83,984,493
Accumulated net investment loss............................. (51,171)
Accumulated net realized loss............................... (4,347,214)
------------
NET ASSETS............................................. $483,869,703
------------
------------
NET ASSET VALUE PER SHARE,
33,600,803 SHARES OUTSTANDING (UNLIMITED SHARES AUTHORIZED
OF $.01 PAR VALUE)........................................
$14.40
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER CAPITAL GROWTH SECURITIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1995
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Dividends (net of $6,687 foreign withholding tax)........... $ 6,583,412
Interest.................................................... 270,753
-----------
TOTAL INCOME........................................... 6,854,165
-----------
EXPENSES
Plan of distribution fee.................................... 4,693,006
Investment management fee................................... 3,050,454
Transfer agent fees and expenses............................ 822,888
Shareholder reports and notices............................. 88,485
Custodian fees.............................................. 71,789
Professional fees........................................... 51,773
Registration fees........................................... 45,096
Trustees' fees and expenses................................. 29,406
Organizational expenses..................................... 10,460
Other....................................................... 18,406
-----------
TOTAL EXPENSES......................................... 8,881,763
-----------
NET INVESTMENT LOSS.................................... (2,027,598)
-----------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain........................................... 18,302,740
Net change in unrealized appreciation....................... 74,477,893
-----------
NET GAIN............................................... 92,780,633
-----------
NET INCREASE................................................ $90,753,035
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER CAPITAL GROWTH SECURITIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
OCTOBER 31, 1995 OCTOBER 31, 1994
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss......................................... $ (2,027,598) $ (831,354)
Net realized gain (loss).................................... 18,302,740 (22,635,036)
Net change in unrealized appreciation....................... 74,477,893 21,479,587
---------------- ----------------
NET INCREASE (DECREASE)................................ 90,753,035 (1,986,803)
Distributions from net realized gain........................ -- (68,486,686)
Net decrease from transactions in shares of beneficial
interest.................................................. (63,860,121) (155,714,841)
---------------- ----------------
TOTAL INCREASE (DECREASE).............................. 26,892,914 (226,188,330)
NET ASSETS:
Beginning of period......................................... 456,976,789 683,165,119
---------------- ----------------
END OF PERIOD
(INCLUDING NET INVESTMENT LOSS OF $51,171 AND $46,185,
RESPECTIVELY)........................................... $483,869,703 $ 456,976,789
---------------- ----------------
---------------- ----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER CAPITAL GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1995
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. The Fund was organized as a
Massachusetts business trust on December 8, 1989 and commenced operations on
April 2, 1990.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) an equity security listed or traded on the
New York or American Stock Exchange is valued at its latest sale price on that
exchange prior to the time when assets are valued; if there were no sales that
day, the security is valued at the latest bid price; (2) all other portfolio
securities for which over-the-counter market quotations are readily available
are valued at the latest available bid price prior to the time of valuation; (3)
when market quotations are not readily available, portfolio securities are
valued at their fair value as determined in good faith under procedures
established by and under the general supervision of the Trustees; and (4)
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.
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily and includes accretion 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
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
<PAGE>
DEAN WITTER CAPITAL GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1995, CONTINUED
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 -- Dean Witter InterCapital Inc. (the "Investment
Manager") paid the organizational expenses of the Fund in the amount of
approximately $127,100 which were reimbursed for the full amount thereof. Such
expenses were fully amortized as of April 1, 1995.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement, the Fund pays a management fee,
accrued daily and payable monthly, by applying the following annual rates to the
net assets of the Fund determined at the close of each business day: 0.65% to
the portion of daily net assets not exceeding $500 million; 0.55% to the portion
of daily net assets exceeding $500 million but not exceeding $1 billion; 0.50%
to the portion of daily net assets exceeding $1 billion but not exceeding $1.5
billion; and 0.475% to the portion of 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, at its own expense, office space, facilities, equipment,
clerical, bookkeeping and certain legal services and pays the salaries of all
personnel, including officers of the Fund who are employees of the Investment
Manager. The Investment Manager also bears the cost of telephone services, heat,
light, power and other utilities provided to the Fund.
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Dean Witter Distributors Inc. (the
"Distributor"), an affiliate of the Investment Manager. The Fund has adopted a
Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act pursuant
to which the Fund pays the Distributor compensation, accrued daily and payable
monthly, at an annual rate of 1.0% of the lesser of: (a) the average daily
aggregate gross sales of the Fund's shares since the Fund's inception (not
including reinvestment of dividend or capital gain 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
<PAGE>
DEAN WITTER CAPITAL GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1995, CONTINUED
and the expenses borne by it and others in the distribution of the Fund's
shares, including the payment of commissions for sales of the Fund's shares and
incentive compensation to, and expenses of, the account executives of Dean
Witter Reynolds Inc. ("DWR"), an affiliate of the Investment Manager and
Distributor, and other employees or selected 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 year ended October 31, 1995,
it received approximately $1,018,000 in contingent deferred sales charges from
certain redemptions of the Fund's shares. The Fund's shareholders pay such
charges which are not an expense of the Fund.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the year ended October 31, 1995 aggregated
$152,749,118 and $219,779,658, respectively.
For the year ended October 31, 1995, the Fund incurred brokerage commissions of
$157,910 with DWR for portfolio transactions executed on behalf of the Fund. At
October 31, 1995, the Fund's receivable for investments sold and payable for
investments purchased included unsettled trades with DWR of $5,577,689 and
$963,950, respectively.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At October 31, 1995, the Fund had
transfer agent fees and expenses payable of approximately $96,000.
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
<PAGE>
DEAN WITTER CAPITAL GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1995, CONTINUED
the last five years of service. Aggregate pension costs for the year ended
October 31, 1995 included in Trustees' fees and expenses in the Statement of
Operations amounted to $7,008. At October 31, 1995, the Fund had an accrued
pension liability of $51,757 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 YEAR ENDED FOR THE YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31, 1994
---------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
Sold............................................................. 9,967,719 $ 129,676,850 4,146,525 $ 51,264,523
Reinvestment of distributions.................................... -- -- 5,417,749 65,717,298
----------- -------------- ----------- ------------
9,967,719 129,676,850 9,564,274 116,981,821
Repurchased...................................................... (14,892,453) (193,536,971) (22,223,330) (272,696,662)
----------- -------------- ----------- ------------
Net decrease..................................................... (4,924,734) $ (63,860,121) (12,659,056) $(155,714,841)
----------- -------------- ----------- ------------
----------- -------------- ----------- ------------
</TABLE>
6. FEDERAL INCOME TAX STATUS
During the year ended October 31, 1995, the Fund utilized approximately
$19,249,000 of its net capital loss carryover. At October 31, 1995, the Fund had
a net capital loss carryover of approximately $3,122,000 which will be available
through October 31, 2002 to offset future capital gains to the extent provided
by regulations.
As of October 31, 1995, the Fund had temporary book/tax differences primarily
attributable to capital loss deferrals on wash sales and permanent book/tax
differences primarily attributable to a net operating loss. To reflect
reclassifications arising from permanent book/tax differences for the year ended
October 31, 1995, paid-in-capital was charged and accumulated net investment
loss was credited $2,022,612.
<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
PERIOD
APRIL 2,
1990*
FOR THE YEAR ENDED OCTOBER 31 THROUGH
----------------------------------------------------- OCTOBER
1995 1994 1993 1992 1991 31, 1990
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value,
beginning of period............... $ 11.86 $ 13.35 $ 14.09 $ 13.58 $ 9.19 $ 10.00
--------- --------- --------- --------- --------- ---------
Net investment income (loss)....... (0.06) (0.07) (0.08) (0.03) (0.01) 0.01
Net realized and unrealized gain
(loss)............................ 2.60 -- (0.50) 0.58 4.42 (0.82)
--------- --------- --------- --------- --------- ---------
Total from investment operations... 2.54 (0.07) (0.58) 0.55 4.41 (0.81)
--------- --------- --------- --------- --------- ---------
Less dividends and distributions
from:
Net investment income........... -- -- -- -- (0.02) --
Net realized gain............... -- (1.42) (0.16) (0.04) -- --
--------- --------- --------- --------- --------- ---------
Total dividends and
distributions..................... -- (1.42) (0.16) (0.04) (0.02) --
--------- --------- --------- --------- --------- ---------
Net asset value, end of period..... $ 14.40 $ 11.86 $ 13.35 $ 14.09 $ 13.58 $ 9.19
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
TOTAL INVESTMENT RETURN+........... 21.42% (0.79)% (4.25)% 4.06% 48.07% (8.10)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses........................... 1.89% 1.87% 1.81% 1.74% 1.83% 1.97%(2)
Net investment income (loss)....... (0.43)% (0.15)% (0.38)% (0.32)% (0.17)% 0.25%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands......................... $483,870 $456,977 $683,165 $973,110 $600,027 $206,588
Portfolio turnover rate............ 33% 13% 25% 29% 40% 10%(1)
<FN>
- ---------------------
* Commencement of operations.
+ Does not reflect the deduction of sales charge.
(1) Not annualized.
(2) Annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER CAPITAL GROWTH SECURITIES
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND TRUSTEES
OF DEAN WITTER CAPITAL GROWTH SECURITIES
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Dean Witter Capital Growth
Securities (the "Fund") at October 31, 1995, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the period then ended and the financial highlights for each of the five years in
the period then ended and for the period April 2, 1990 (commencement of
operations) through October 31, 1990, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 1995 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
PRICE WATERHOUSE LLP
1177 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
DECEMBER 4, 1995
<PAGE>
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<PAGE>
TRUSTEES ------------------------------
------------------------------
Jack F. Bennett
Michael Bozic
Charles A. Fiumefreddo DEAN WITTER
Edwin J. Garn CAPITAL GROWTH
John R. Haire SECURITIES
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
Paul D. Vance
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Dean Witter Trust Company
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
[Photo]
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
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.
ANNUAL REPORT
OCTOBER 31, 1995
<PAGE>
DEAN WITTER CAPITAL GROWTH SECURITIES
GROWTH OF $10,000
<TABLE>
<CAPTION>
DATE TOTAL S&P
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
<S> <C> <C>
April 2, 1990 $10,000 $10,000
- ----------------------------------------------------------------------
October 31, 1990 $ 9,190 $ 9,173
- ----------------------------------------------------------------------
October 31, 1991 $13,605 $12,242
- ----------------------------------------------------------------------
October 31, 1992 $14,158 $13,459
- ----------------------------------------------------------------------
October 31, 1993 $13,556 $15,465
- ----------------------------------------------------------------------
October 31, 1994 $13,450 $16,061
- ----------------------------------------------------------------------
October 31, 1995 $16,230 (3) $20,306
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS
1 YEAR 5 YEARS LIFE OF FUND
21.42 (1) 12.18 (1) 9.19 (1)
16.42 (2) 11.93 (2) 9.07 (2)
____Fund ____ S&P 500 (4)
Past performance is not predictive of future returns.
- --------------------------------------------
(1) Figure shown assumes reinvestment of all distributions and does not
reflect the deduction of any sales charges.
(2) Figure shown assumes the deduction of the maximum applicable contingent
deferred sales charge (CDSC) (1 year-5%, 5 years - 2%, since
inception - 1%). See the Fund's current prospectus for complete
details on fees and sales charges.
(3) Closing value after the deduction of a 1% CDSC, assuming a complete
redemption on October 31, 1995.
(4) The Standard & Poor's 500 Composite Stock Price Index (S&P 500) is a
broad-based index, the performance of which is based on the average
performance of 500 widely held common stocks. The performance of the
index does not include any expenses, fees or charges. The Index is
unmanaged and should not be considered an investment.
