<PAGE>
DEAN WITTER PRECIOUS METALS AND MINERALS TRUST Two World Trade Center, New
York, New York 10048 LETTER TO THE SHAREHOLDERS April 30, 1998
DEAR SHAREHOLDER:
The six-month period ended April 30, 1998, was an extremely difficult one for
precious metals. As the period began, gold prices were at a 12-year low of
$311.30 per ounce, down from their February 1996 peak of $414.70. In
mid-January, prices declined to an 18-year low of $278.50 per ounce, but
recovered at month-end to $301.85. For the remainder of the period, prices
remained between $292 and $303, and closed at $306.80 per ounce.
In 1997, a number of factors combined to create this unfavorable environment,
including concerns over the European central banks selling of gold reserves to
meet European Economic and Monetary Union (EMU) requirements, producer hedging
and speculative short selling (selling a security not owned by the seller to
take advantage of an anticipated decline in the price). By the end of 1997,
however, the motivation to sell gold reserves diminished, and gold's low price
discouraged producer hedging and speculative short selling.
Despite EMU-related concerns, the World Gold Council reported that demand had
reached record levels in 1997, up 15 percent from 1996 at 4,025 tons. India was
the driving force behind the increase with a nine-month demand exceeding all of
1996. The strong demand kept the market in deficit, exceeding combined mine
production and scrap by over 1,000 tons.
Currently, the gold market is showing some of the characteristics that led to
the bull market of 1993. The similarities include depressed prices, record
levels of demand and speculative shorting. Despite the events of the past year,
we view gold as an undervalued asset that at current levels provides an
attractive investment opportunity.
It appears that there is little to suggest that inflation is on the horizon. In
the next few months, as lower Asian import prices work their way through the
system, we believe it is possible that the U.S. economy may even reach a state
of zero inflation. However, the possibility of a rise in inflationary pressures
should not be ruled out. The strength of the dollar has helped neutralize
cyclical inflationary pressure on producer prices.
<PAGE>
DEAN WITTER PRECIOUS METALS AND MINERALS TRUST
LETTER TO THE SHAREHOLDERS April 30, 1998, continued
Were it not for the strong dollar, the U.S. might otherwise have experienced
some of the cyclical rise in inflation that typically occurs in an economy
experiencing its seventh year of expansion with less than five percent
unemployment. Should the dollar weaken, the effect on U.S. commodity prices
could be dramatic, and the focus of traders could quickly go from disinflation
to inflation. If this were the case, precious metal stocks are expected to
perform well.
PERFORMANCE AND PORTFOLIO
For the six-month period ended April 30, 1998, the Fund's Class A, B, C and D
shares had total returns of -4.23, -4.67, -4.53, -3.94 percent, respectively,
versus 22.47 percent for the Standard & Poor's 500 Composite Stock Price Index
(S&P 500) and -4.37 percent for the Lipper Gold-Oriented Funds Index.
Performance of the Fund's four share classes varies because of differing
expenses. The Fund's performance reflected the generally poor environment of
the precious metals market. We believe, however, that the environment is likely
to improve as pessimism about the precious metals market abates. The Fund's key
holdings include such high-quality positions as Euro-Nevada, Stillwater Mining,
Barrick Gold, Placer Dome and Newmont Mining.
LOOKING AHEAD
The long-term outlook for precious metals appears promising. Demand is strong
and production growth is slowing as high-cost mines are closing.
Future trends may depend on the market's perception of the outcome of EMU
issues, particularly the role gold will play as a reserve for the new Euro
currency. Much remains to be decided about gold's role in this process, and
there is still no clear consensus on whether gold will benefit. Regardless,
however, of what develops concerning EMU, we believe that the strong
manufacturing demand, which is expected to continue, and the possible return of
inflation may provide a favorable environment for gold investments.
We appreciate your support of Dean Witter Precious Metals and Minerals Trust
and look forward to continuing to serve your investment objectives.
Sincerely,
/s/ Charles A. Fiumefreddo
Charles A. Fiumefreddo
Chairman of the Board
2
<PAGE>
DEAN WITTER PRECIOUS METALS AND MINERALS TRUST
PORTFOLIO OF INVESTMENTS April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- - ----------------------------------------------------------------------------- -------------
COMMON STOCKS (88.9%)
<S> <C> <C>
AUSTRALIA (15.3%)
Gold Mining
700,000 Acacia Resources Ltd. .......................................... $ 1,095,369
600,000 Delta Gold NL .................................................. 880,451
250,000 Great Central Mines Ltd. ....................................... 358,738
25,000 Lihir Gold Ltd. (ADR)* ......................................... 878,125
400,000 Newcrest Mining Ltd.* .......................................... 727,216
1,100,000 Normandy Mining Ltd. ........................................... 1,221,333
200,000 Rangers Minerals NL* ........................................... 518,142
800,000 Ross Mining NL ................................................. 472,690
-------------
TOTAL AUSTRALIA ................................................ 6,152,064
-------------
CANADA (42.9%)
Diamonds
95,000 Aber Resources Ltd.* ........................................... 1,078,716
-------------
Gold
135,000 Euro-Nevada Mining Corp. ....................................... 2,429,076
50,000 Franco Nevada Mining Corp. Ltd. ................................. 1,222,836
200,000 Romarco Minerals, Inc.* ......................................... 448,606
-------------
4,100,518
-------------
Gold Mining
85,000 Barrick Gold Corp. (ADR) ....................................... 1,907,187
150,000 Cambior, Inc. (ADR) ............................................ 1,181,250
350,000 Geomaque Explorations Ltd.* .................................... 635,875
175,000 Greenstone Resources Ltd.* ..................................... 1,063,867
100,000 IAMGOLD* ........................................................ 366,851
250,000 Kinross Gold Corp.* ............................................ 1,144,225
125,000 Placer Dome, Inc. (ADR) ........................................ 1,843,750
125,000 Prime Resources Group, Inc. (ADR)* .............................. 947,697
125,000 Repadre Capital Corp.* ......................................... 489,134
100,000 Sutton Resources Ltd.* ......................................... 775,627
5,000 Teck Corp. (B Shares) .......................................... 73,021
50,000 Teck Corp. (B Shares)(ADR)* ..................................... 730,207
550,000 Vengold Inc.* ................................................... 684,089
200,000 Yamana Resources, Inc.* ........................................ 211,026
-------------
12,053,806
-------------
TOTAL CANADA ................................................... 17,233,040
-------------
PERU (1.9%)
Gold
Compania de Minas
50,000 Buenaventura S.A. (ADR)* ........................................ 775,000
-------------
UNITED KINGDOM (2.9%)
Metals & Mining
20,000 Rio Tinto PLC (ADR) ............................................ 1,165,000
-------------
UNITED STATES (25.9%)
Diamonds
50,000 Lazare Kaplan International, Inc.* .............................. $ 550,000
-------------
Gold Mining
75,000 Ashanti Goldfield Company Ltd. (GDR) ............................ 740,625
150,000 Battle Mountain Gold Co. ........................................ 1,078,125
125,000 Crown Resources Corp.* .......................................... 531,250
75,000 Freeport-McMoran Copper & Gold, Inc. (Class A) ................. 1,335,937
65,000 Getchell Gold Corp.* ............................................ 1,600,625
200,000 Meridian Gold Inc.* ............................................ 787,500
25,000 Newmont Gold Co. ............................................... 809,375
30,000 Newmont Mining Corp. ........................................... 965,625
-------------
7,849,062
-------------
Platinum & Palladium
75,000 Stillwater Mining Co.* ......................................... 1,982,813
-------------
TOTAL UNITED STATES ............................................ 10,381,875
-------------
TOTAL COMMON STOCKS
(Identified Cost $39,832,425) .................................. 35,706,979
-------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS
- - -----------
SHORT-TERM INVESTMENTS (12.6%)
<S> <C> <C>
U.S. GOVERNMENT AGENCY (a)(12.2%)
$4,900 Federal Home Loan Mortgage Corp 5.45% due 05/01/98 (Amortized
Cost $4,900,000) ................................................ 4,900,000
-------------
REPURCHASE AGREEMENT (0.4%)
180 The Bank of New York 5.50% due 05/01/98 (dated 04/30/98;
proceeds $179,862)(b) (Identified Cost $179,835) ................ 179,835
-------------
TOTAL SHORT-TERM INVESTMENTS
(Identified Cost $5,079,835) ................................... 5,079,835
-------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
TOTAL INVESTMENTS
(Identified Cost $44,912,260)(c) . 101.5% 40,786,814
LIABILITIES IN EXCESS OF OTHER
ASSETS............................ (1.5) (610,646)
---------- ------------
NET ASSETS........................ 100.0% $40,176,168
========== ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
3
<PAGE>
DEAN WITTER PRECIOUS METALS AND MINERALS TRUST
PORTFOLIO OF INVESTMENTS April 30, 1998 (unaudited) continued
- - ------------
ADR American Depository Receipt.
GDR Global Depository Receipt.
* Non-income producing security.
(a) Security was purchased on a discount basis. The interest rate shown has
been adjusted to reflect a money market equivalent yield.
(b) Collateralized by $183,229 Federal National Mortgage Association 6.07%
due 04/24/03 valued at $183,431.
(c) The aggregate cost for federal income tax purposes approximates
identified cost. The aggregate gross unrealized appreciation is
$1,913,486 and the aggregate gross unrealized depreciation is
$6,038,932, resulting in net unrealized depreciation of $4,125,446.
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT APRIL 30, 1998:
<TABLE>
<CAPTION>
CONTRACTS IN EXCHANGE DELIVERY UNREALIZED
TO DELIVER FOR DATE DEPRECIATION
- - ------------ ----------------------------- ----------- --------------
<S> <C> <C> <C>
CAD 107,000 $74,836 5/04/98 $(68)
</TABLE>
Currency Abbreviations:
CAD Canadian Dollar
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE>
DEAN WITTER PRECIOUS METALS AND MINERALS TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $44,912,260) ........... $ 40,786,814
Receivable for:
Shares of beneficial interest sold .... 101,278
Dividends .............................. 12,875
Prepaid expenses and other assets ....... 57,872
--------------
TOTAL ASSETS ........................... 40,958,839
--------------
LIABILITIES:
Payable for:
Shares of beneficial interest
repurchased............................ 535,175
Investments purchased................... 191,268
Plan of distribution fee ............... 30,627
Investment management fee .............. 25,601
--------------
TOTAL LIABILITIES ...................... 782,671
--------------
NET ASSETS ............................. $ 40,176,168
==============
COMPOSITION OF NET ASSETS:
Paid-in-capital........................... $ 60,218,159
Net unrealized depreciation .............. (4,125,446)
Accumulated net investment loss .......... (374,858)
Accumulated net realized loss ............ (15,541,687)
--------------
NET ASSETS ............................. $ 40,176,168
==============
CLASS A SHARES:
Net Assets................................ $59,547
Shares Outstanding (unlimited authorized,
$.01 par value) ......................... 9,068
NET ASSET VALUE PER SHARE .............. $6.57
==============
MAXIMUM OFFERING PRICE PER SHARE,
(net asset value plus 5.54% of net
asset value)........................... $6.93
==============
CLASS B SHARES:
Net Assets................................ $36,367,758
Shares Outstanding (unlimited authorized,
$.01 par value) ......................... 5,569,461
NET ASSET VALUE PER SHARE .............. $6.53
==============
CLASS C SHARES:
Net Assets................................ $2,113,478
Shares Outstanding (unlimited authorized,
$.01 par value) ......................... 323,523
NET ASSET VALUE PER SHARE .............. $6.53
==============
CLASS D SHARES:
Net Assets................................ $1,635,385
Shares Outstanding (unlimited authorized,
$.01 par value) ......................... 248,266
NET ASSET VALUE PER SHARE .............. $6.59
==============
</TABLE>
<PAGE>
STATEMENT OF OPERATIONS
For the six months ended April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Dividends (net of $9,137 foreign
withholding tax) ......................... $ 145,274
Interest .................................. 86,951
-------------
TOTAL INCOME ............................ 232,225
-------------
EXPENSES
Plan of distribution fee (Class A shares) 39
Plan of distribution fee (Class B shares) 158,371
Plan of distribution fee (Class C shares) 3,698
Investment management fee ................. 132,385
Registration fees ......................... 51,679
Shareholder reports and notices ........... 28,307
Transfer agent fees and expenses .......... 22,453
Professional fees ......................... 8,255
Custodian fees ............................ 6,189
Trustees' fees and expenses ............... 2,918
Other ..................................... 1,660
-------------
TOTAL EXPENSES .......................... 415,954
-------------
NET INVESTMENT LOSS ..................... (183,729)
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized loss on:
Investments.............................. (5,205,153)
Foreign exchange transactions............ (1,122)
-------------
NET LOSS ................................ (5,206,275)
-------------
Net change in unrealized appreciation/depreciation on:
Investments.............................. 3,734,794
Translation of other assets and
liabilities denominated in foreign
currencies ............................. 135
-------------
NET APPRECIATION ........................ 3,734,929
-------------
NET LOSS ................................ (1,471,346)
-------------
NET DECREASE .............................. $(1,655,075)
=============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
DEAN WITTER PRECIOUS METALS AND MINERALS 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*
- - ------------------------------------------------------ -------------- -----------------
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss ................................... $ (183,729) $ (575,376)
Net realized loss ..................................... (5,206,275) (9,101,223)
Net change in unrealized appreciation/depreciation ... 3,734,929 (9,193,959)
-------------- -----------------
NET DECREASE ........................................ (1,655,075) (18,870,558)
-------------- -----------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class B shares ...................................... -- (656,572)
Net realized gain
Class B shares ...................................... -- (3,712,483)
-------------- -----------------
TOTAL DIVIDENDS AND DISTRIBUTIONS ................... -- (4,369,055)
-------------- -----------------
Net increase from transactions in shares of beneficial
interest.............................................. 3,350,949 878,665
-------------- -----------------
NET INCREASE (DECREASE) ............................. 1,695,874 (22,360,948)
NET ASSETS:
Beginning of period.................................... 38,480,294 60,841,242
-------------- -----------------
END OF PERIOD
(Including accumulated net investment losses of
$374,858 and $191,129, respectively) ................ $40,176,168 $ 38,480,294
============== =================
</TABLE>
- - ------------
* Class A, Class C and Class D shares were issued July 28, 1997.
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
DEAN WITTER PRECIOUS METALS AND MINERALS TRUST
NOTES TO FINANCIAL STATEMENTS April 30, 1998 (unaudited)
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter Precious Metals and Minerals Trust (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's investment objective is
long-term capital appreciation. The Fund will attempt to achieve its investment
objective by investing principally in the securities of foreign and domestic
companies engaged in the exploration, mining, fabrication, processing,
distribution or trading of precious metals and minerals or in companies engaged
in financing, managing, controlling or operating companies engaged in these
activities and also by investing a portion of its assets in gold, silver,
platinum and palladium bullion and coins. The Fund was organized as a
Massachusetts business trust on December 28, 1989 and commenced operations on
August 6, 1990. 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 reported amounts and disclosures. Actual results could differ from
those estimates.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS-- (1) an equity security listed or traded on the
New York, American or other domestic or foreign 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
(in cases where securities are traded on more than one exchange, the securities
are valued on the exchange designated as the primary market pursuant to
procedures adopted by the Trustees); (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, including circumstances under which it is
determined by Dean Witter InterCapital Inc. (the "Investment Manager") that
sale and 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
7
<PAGE>
DEAN WITTER PRECIOUS METALS AND MINERALS TRUST
NOTES TO FINANCIAL STATEMENTS April 30, 1998 (unaudited) continued
readily available may be based upon current market prices of securities which
are comparable in coupon, rating and maturity or an appropriate matrix
utilizing similar factors); and (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 and other distributions are recorded on the ex-dividend date
except for certain dividends from foreign securities which are recorded as soon
as the Fund is informed after the ex-dividend date. 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. 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
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.
E. FORWARD FOREIGN CURRENCY CONTRACTS-- The Fund may enter into forward foreign
currency contracts which are valued daily at the appropriate exchange rates.
The resultant unrealized exchange gains and losses are included in the
Statement of Operations as unrealized foreign currency gain or loss and in the
Statement of Assets and Liabilities as part of the related foreign currency
denominated asset or liability. 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.
8
<PAGE>
DEAN WITTER PRECIOUS METALS AND MINERALS TRUST
NOTES TO FINANCIAL STATEMENTS April 30, 1998 (unaudited) continued
F. FEDERAL INCOME TAX STATUS-- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.
G. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS-- The Fund records dividends and
distributions to its shareholders on the record date. The amount of dividends
and distributions from net investment income and net realized capital gains are
determined in accordance with federal income tax regulations which may differ
from generally accepted accounting principles. These "book/tax" differences are
either considered temporary or permanent in nature. To the extent 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.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement, the Fund pays the Investment
Manager a management fee, accrued daily and payable monthly, by applying the
annual rate of 0.80% to the net assets of the Fund determined as of the close
of each business day.
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 -1.0% of the lesser
of: (a) the average daily aggregate gross sales of the Class B shares since the
inception of the Fund (not including reinvestment of dividend or capital gain
9
<PAGE>
DEAN WITTER PRECIOUS METALS AND MINERALS TRUST
NOTES TO FINANCIAL STATEMENTS April 30, 1998 (unaudited) continued
distributions) less the average daily aggregate 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 1.0% 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.
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 $3,643,433 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 1.0% 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 0.25%
and 1.0%, 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 and Class C shares of
10
<PAGE>
DEAN WITTER PRECIOUS METALS AND MINERALS TRUST
NOTES TO FINANCIAL STATEMENTS April 30, 1998 (unaudited) continued
$51,719 and $878, respectively and received approximately $2,000 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 $6,094,592 and $5,348,496, respectively.
For the six months ended April 30, 1998, the Fund incurred $13,165 in brokerage
commissions with DWR for portfolio transactions executed on behalf of the Fund.
At April 30, 1998, included in the Fund's payable for investments purchased was
an unsettled trade with DWR for $116,500.
Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager
and Distributor, is the Fund's transfer agent.
5. FEDERAL INCOME TAX STATUS
At October 31, 1997, the Fund had a net capital loss carryover of approximately
$10,239,000 available through October 31, 2005 to offset future capital gains
to the extent provided by regulations.
At October 31, 1997, the Fund had temporary book/tax differences attributable
to capital loss deferrals on wash sales and income from the mark-to-market of
passive foreign investment companies.
6. 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 foreign currency exposure associated with foreign
currency denominated securities.
Forward contracts involve elements of market risk in excess of the amounts
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.
11
<PAGE>
DEAN WITTER PRECIOUS METALS AND MINERALS TRUST
NOTES TO FINANCIAL STATEMENTS April 30, 1998 (unaudited) continued
7. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
APRIL 30, 1998 OCTOBER 31, 1997*
----------------------------- -------------------------------
(UNAUDITED)
SHARES AMOUNT SHARES AMOUNT
------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Sold......................................... 14,114 $ 89,851 4,703 $ 37,724
Redeemed..................................... (9,749) (63,278) -- --
------------- -------------- -------------- ---------------
Net increase -Class A ....................... 4,365 26,573 4,703 37,724
------------- -------------- -------------- ---------------
CLASS B SHARES
Sold......................................... 7,323,992 42,753,041 12,331,939 111,539,261
Reinvestment of dividends and distributions -- -- 402,436 4,004,238
Redeemed..................................... (7,300,815) (42,488,358) (12,648,999) (115,262,441)
------------- -------------- -------------- ---------------
Net increase -Class B........................ 23,177 264,683 85,376 281,058
------------- -------------- -------------- ---------------
CLASS C SHARES
Sold......................................... 378,679 2,306,016 95,151 732,145
Redeemed..................................... (124,565) (674,961) (25,742) (182,272)
------------- -------------- -------------- ---------------
Net increase -Class C........................ 254,114 1,631,055 69,409 549,873
------------- -------------- -------------- ---------------
CLASS D SHARES
Sold......................................... 296,655 1,715,109 1,259 10,010
Redeemed..................................... (49,648) (286,471) -- --
------------- -------------- -------------- ---------------
Net increase -Class D........................ 247,007 1,428,638 1,259 10,010
------------- -------------- -------------- ---------------
Net increase in Fund......................... 528,663 $ 3,350,949 160,747 $ 878,665
============= ============== ============== ===============
</TABLE>
- - ------------
* For Class A, C, and D, for the period July 28, 1997 (issue date) through
October 31, 1997.
12
<PAGE>
DEAN WITTER PRECIOUS METALS AND MINERALS TRUST
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED OCTOBER 31,
---------------------------------------------------------------
FOR THE SIX
MONTHS ENDED
APRIL 30,
1998++ 1997*++ 1996 1995 1994 1993
- - --------------------------------------- --------------- ------------ ----------- ------------ ---------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ... $ 6.85 $ 11.14 $ 9.77 $ 11.45 $10.80 $ 7.87
--------------- ------------ ----------- ------------ ---------- -----------
Net investment loss..................... (0.03) (0.10) (0.10) (0.08) (0.06) (0.04)
Net realized and unrealized gain
(loss)................................. (0.29) (3.35) 1.66 (1.38) 0.73 2.97
--------------- ------------ ----------- ------------ ---------- -----------
Total from investment operations ....... (0.32) (3.45) 1.56 (1.46) 0.67 2.93
--------------- ------------ ----------- ------------ ---------- -----------
Less dividends and distributions from:
Net investment income................. -- (0.13) -- -- -- --
Net realized gain..................... -- (0.71) (0.19) (0.22) (0.02) --
--------------- ------------ ----------- ------------ ---------- -----------
Total dividends and distributions ..... -- (0.84) (0.19) (0.22) (0.02) --
--------------- ------------ ----------- ------------ ---------- -----------
Net asset value, end of period.......... $ 6.53 $ 6.85 $11.14 $ 9.77 $11.45 $10.80
=============== ============ =========== ============ ========== ===========
TOTAL INVESTMENT RETURN+................ (4.67)%(1) (33.29)% 15.93 % (12.78)% 6.18 % 37.23 %
RATIOS TO AVERAGE NET ASSETS:
Expenses................................ 2.53 %(2) 2.36 % 2.27 % 2.29 % 2.28 % 2.79 %
Net investment loss..................... (1.15)%(2) (1.13)% (0.84)% (0.70)% (0.87)% (1.07)%
SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands.............................. $36,368 $37,964 $60,841 $55,448 $73,444 $45,204
Portfolio turnover rate ................ 17 %(1) 53 % 46 % 23 % 46 % 25 %
Average commission rate paid ........... $0.0191 $0.0245 $0.0217 -- -- --
</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 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
13
<PAGE>
DEAN WITTER PRECIOUS METALS AND MINERALS TRUST
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX JULY 28, 1997*
MONTHS ENDED THROUGH
APRIL 30, OCTOBER 31,
1998++ 1997++
- - --------------------------------------- --------------- -----------------
(UNAUDITED)
<S> <C> <C>
CLASS A SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period .. $ 6.86 $ 7.95
--------------- -----------------
Net investment loss..................... (0.01) --
Net realized and unrealized loss ...... (0.28) (1.09)
--------------- -----------------
Total from investment operations ....... (0.29) (1.09)
--------------- -----------------
Net asset value, end of period.......... $ 6.57 $ 6.86
=============== =================
TOTAL INVESTMENT RETURN+ ............... (4.23)%(1) (13.71)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses................................ 1.74 %(2) 1.61 %(2)
Net investment loss..................... (0.28)%(2) (0.08)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands.............................. $ 60 $ 32
Portfolio turnover rate................. 17 %(1) 53 %
Average commission rate paid............ $0.0191 $0.0245
CLASS C SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ... $ 6.84 $ 7.95
--------------- -----------------
Net investment loss..................... (0.03) (0.02)
Net realized and unrealized loss ...... (0.28) (1.09)
--------------- -----------------
Total from investment operations ...... (0.31) (1.11)
--------------- -----------------
Net asset value, end of period.......... $ 6.53 $ 6.84
=============== =================
TOTAL INVESTMENT RETURN+................ (4.53)%(1) (13.96)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses................................ 2.57 %(2) 2.37 %(2)
Net investment loss..................... (1.13)%(2) (0.79)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands.............................. $2,113 $475
Portfolio turnover rate................. 17 %(1) 53 %
Average commission rate paid............ $0.0191 $0.0245
</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
14
<PAGE>
DEAN WITTER PRECIOUS METALS AND MINERALS TRUST
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX JULY 28, 1997*
MONTHS ENDED THROUGH
APRIL 30, OCTOBER 31,
1998++ 1997++
- - --------------------------------------- --------------- -----------------
(UNAUDITED)
<S> <C> <C>
CLASS D SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period .. $ 6.86 $ 7.95
--------------- -----------------
Net investment income .................. 0.02 --
Net realized and unrealized loss ...... (0.29) (1.09)
--------------- -----------------
Total from investment operations ...... (0.27) (1.09)
--------------- -----------------
Net asset value, end of period.......... $ 6.59 $ 6.86
=============== =================
TOTAL INVESTMENT RETURN+................ (3.94)%(1) (13.71)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses................................ 1.55 %(2) 1.35 %(2)
Net investment income................... 0.69 %(2) 0.22 %(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands.............................. $1,635 $9
Portfolio turnover rate................. 17 %(1) 53 %
Average commission rate paid............ $0.0191 $0.0245
</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
15
<PAGE>
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Barry Fink
Vice President, Secretary and General Counsel
Robert Rossetti
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT
Morgan Stanley Dean Witter Trust FSB
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Dean Witter InterCapital Inc.
Two World Trade Center
New York, New York 10048
The financial statements included herein have been taken from the records of
the Fund without examination by the independent accountants and accordingly
they do not express an opinion thereon.
This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and trustees,
fees, expenses and other pertinent information, please see the prospectus of
the Fund.
This report is not authorized for distribution to prospective investors in the
Fund unless preceded or accompanied by an effective prospectus.
DEAN WITTER
PRECIOUS METALS
AND MINERALS TRUST
SEMI ANNUAL REPORT
APRIL 30, 1998
