<PAGE> 1
DEAN WITTER GLOBAL SHORT-TERM INCOME FUND INC.
Two World Trade Center
New York, New York 10048
DEAR SHAREHOLDER:
- - - - - --------------------------------------------------------------------------------
The multi-year rally in the U.S. bond market came to an abrupt halt early
in 1994, following several increases of short-term interest rates by the Federal
Reserve Board, the first tightening move in several years. As a result, both the
U.S. and global bond markets experienced sharp bond price declines.
FEDERAL RESERVE BOARD ACTIONS UNDERMINED GLOBAL BOND MARKETS
Since the beginning of 1994, global interest rates have increased
substantially. In the U.S. the Federal Reserve Board tightened its monetary
policy in response to surging economic growth by raising the federal-funds
rate -- the interest rate banks charge one another for overnight loans -- from
3.00 percent to 3.75 percent in three separate moves in early February 1994. As
a result, three-year U.S. interest rates rose by 155 basis points (1.55 percent)
in four months. (Subsequently, the Federal Reserve Board initiated another round
of tightening with a 0.50 percent increase in both the federal funds rate, to
4.25 percent, and the discount rate -- the interest rate the Federal Reserve
charge member banks for loans -- to 3.50 percent.)
In the meantime, short-term interest rates in Europe continued to decline
or remained stable. For example, three-month rates in Germany declined by more
than 100 basis points as Germany's Bundesbank followed through with its policy
of gradually reducing interest rates in response to improving inflation
prospects and sluggish economic growth. Other European central banks adopted a
similar stance in maintaining an accommodative monetary policy.
Despite this favorable policy background, bond yields in Europe rose
sharply in sympathy with the developments in the U.S. bond market. The price
declines of European bonds were further exacerbated by selling by hedge funds
and other leveraged investors as their risk positions became overextended. As a
result, yields on three-year German government bonds rose by 74 basis points in
the last four months. In other markets, yields increased even more: three-year
yields in France went up by 95 basis points, in Sweden, by 150 basis points,
Finland, 157 basis points.
PERFORMANCE AND PORTFOLIO STRATEGY
Under these adverse market conditions, Dean Witter Global Short-Term Income
Fund Inc. declined 1.06 percent for the the six month period, with a trailing
12-month total return of 0.23 percent. The six-month return reflected the
distribution of dividends totaling $0.285 per share and a change in net asset
value from $9.23 to $8.85 per share. The Fund's annualized distribution rate as
of April 30, 1994 was 6.10 percent, or 234 basis points higher than the average
yield on six month certificates of deposits (CDs) over the past six months.
The Fund's strategy in this market environment has been to reduce the
Fund's average maturity (to approximately 1.6 years from 2.5 years) in order to
minimize the negative effect of further rate rises both here and abroad. In
addition, investments in European bonds were reduced and shifted to short-term
U.S. bonds to take advantage of higher yields and to avoid the costs of hedging
currency risks associated with
<PAGE> 2
foreign bonds. Also, some of the foreign bonds were left unhedged and thus
benefited from recent weakness of the U.S dollar versus European currencies. As
of April 30, 1994, the Fund held 50 percent of its assets in North America, 41
percent in Europe and 11 percent in the Pacific Basin countries.
LOOKING AHEAD
We anticipate that the Fund will maintain its current strategy of
diversifying into different global markets, with an emphasis on short-term
maturities. Also, since the fundamentals in Europe, including sluggish economic
growth and improving inflation outlook, argue for stable to slightly lower
short-term rates, short-term European bonds continue to offer good value. We
believe this strategy will allow the Fund to take advantage of the relative
stability of this sector of the global bond markets. At the same time, it should
help the Fund benefit once global bonds return to more normal conditions in
response to positive economic fundamentals.
We appreciate your ongoing support of Dean Witter Global Short-Term Income
Fund Inc., and look forward to continuing to serve your investment needs.
Very truly yours,
Charles A. Fiumefreddo
Chairman of the Board
<PAGE> 3
DEAN WITTER GLOBAL SHORT-TERM INCOME FUND INC.
PORTFOLIO OF INVESTMENTS April 30, 1994 (unaudited)
- - - - - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount (in Coupon Maturity
thousands) Rate Date Value
- - - - - --------------- ------ -------- ------------
<C> <S> <C> <C> <C>
FOREIGN CURRENCY DENOMINATED BONDS (100.3%)
AUSTRALIA (6.1%)
GOVERNMENT OBLIGATIONS (6.1%)
Au$ 19,300 Queens Land Treasury Corp.................................... 8.00 % 5/14/97 $ 13,912,703
500 Treasury Corp. of Victoria................................... 6.50 12/15/98 334,828
------------
TOTAL AUSTRALIA..................................................................... 14,247,531
------------
CANADA (2.1%)
BANKING--INTERNATIONAL (2.1%)
Ca$ 1,500 Royal Bank Mortgage.......................................... 11.875 8/ 3/95 1,141,077
5,000 Vancouver City Savings....................................... 10.75 11/21/94 3,684,669
------------
TOTAL CANADA........................................................................ 4,825,746
------------
DENMARK (8.3%)
GOVERNMENT OBLIGATION (8.3%)
DKr 120,600 Government of Denmark Treasury Note.......................... 9.75 2/10/95 19,152,042
------------
FINLAND (6.1%)
GOVERNMENT OBLIGATION (6.1%)
FMk 72,000 Government of Finland Treasury Note.......................... 11.00 6/15/95 14,224,522
------------
FRANCE (7.8%)
GOVERNMENT OBLIGATION (7.8%)
FFr 99,300 Government of France Treasury Bond........................... 9.00 2/12/95 18,022,448
------------
GERMANY (2.0%)
GOVERNMENT OBLIGATION (2.0%)
DEM 7,465 Bundes Obligation............................................ 8.75 7/20/95 4,706,146
------------
ITALY (3.8%)
GOVERNMENT OBLIGATION (3.8%)
ITL 13,250,000 Government of Italy Treasury Bond............................ 12.00 1/ 1/96 8,792,704
------------
NEW ZEALAND (4.3%)
GOVERNMENT OBLIGATION (4.3%)
NZ$ 16,500 Government of New Zealand Treasury Bond...................... 9.00 11/15/96 9,933,219
------------
SWEDEN (2.4%)
GOVERNMENT OBLIGATION (2.4%)
SKr 39,600 Government of Sweden Treasury Bond........................... 10.75 1/23/97 5,556,791
------------
SPAIN (7.7%)
GOVERNMENT OBLIGATION (7.7%)
ESP 2,204,000 Government of Spain Treasury Note............................ 13.45 4/15/96 17,926,086
------------
UNITED KINGDOM (2.8%)
GOVERNMENT OBLIGATIONS (2.8%)
Pound 2,700 United Kingdom Treasury Gilt................................. 12.75 11/15/95 4,504,639
1,088 United Kingdom Treasury Gilt................................. 13.25 5/15/96 1,864,984
------------
TOTAL UNITED KINGDOM................................................................ 6,369,623
------------
</TABLE>
<PAGE> 4
DEAN WITTER GLOBAL SHORT-TERM INCOME FUND INC.
PORTFOLIO OF INVESTMENTS April 30, 1994 (unaudited) (continued)
- - - - - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount (in Coupon Maturity
thousands) Rate Date Value
- - - - - --------------- ------ -------- ------------
<C> <S> <C> <C> <C>
UNITED STATES (46.9%)
BANKING--DOMESTIC (30.6%)
US$ 6,000 Barnett Banking, Inc......................................... 9.75 % 1/ 8/96 $ 6,404,280
5,000 Barnett Banking, Inc......................................... 10.00 1/ 8/96 5,356,600
5,000 Branch Banking & Trust....................................... 4.73 8/28/96 4,836,850
12,000 Corestates Capital Corp...................................... 5.60 11/17/95 11,979,720
8,000 First National Bank of Chicago............................... 7.95 3/ 6/97 8,265,680
8,500 First Union Corp............................................. 5.95 7/ 1/95 8,515,980
4,500 International Lease Finance.................................. 5.75 1/15/96 4,467,645
5,000 Northern Trust Co............................................ 4.95 8/ 5/95 4,946,500
10,000 Norwest Corp................................................. 5.75 3/15/98 9,615,600
6,200 U.S. Bancorp................................................. 8.55 8/ 7/95 6,418,550
------------
70,807,405
------------
GOVERNMENT OBLIGATIONS (16.3%)
17,500 United States Treasury Note.................................. 5.875 5/15/95 17,620,313
19,550 United States Treasury Note.................................. 8.50 5/15/95 20,197,595
------------
37,817,908
------------
TOTAL UNITED STATES................................................................. 108,625,313
------------
TOTAL BONDS (IDENTIFIED COST $236,628,955).......................................... 232,382,171
------------
SHORT-TERM INVESTMENT (a) (1.2%)
UNITED STATES (1.2%)
GOVERNMENT AGENCY (1.2%)
2,900 Federal Home Loan Mortgage Corp. (AMORTIZED COST $2,899,718).. 3.501 5/ 2/94 2,899,718
------------
TOTAL INVESTMENTS (IDENTIFIED COST $239,528,673)(b).................... 101.5% 235,281,889
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS......................... (1.5) (3,553,983)
------ ------------
NET ASSETS............................................................. 100.0% $231,727,906
------ ------------
------ ------------
</TABLE>
- - - - - ---------------
(a) Government Agency was purchased on a discount basis. The interest rate shown
has been adjusted to reflect a bond equivalent yield.
(b) The aggregate cost for federal income tax purposes is $239,528,673; the
aggregate gross unrealized appreciation is $1,470,568 and the aggregate
gross unrealized depreciation is $5,717,352, resulting in net unrealized
depreciation of $4,246,784.
FORWARD CONTRACTS FOR THE SALE OF FOREIGN CURRENCY AT APRIL 30, 1994:
<TABLE>
<CAPTION>
Unrealized
Contract In Exchange Delivery Appreciation/
to Deliver for Date (Depreciation)
- - - - - --------------- -------------- --------- --------------
<S> <C> <C> <C>
DKr 95,180,774 US$ 13,824,368 5/26/94 (866,928)
DEM 38,600,000 US$ 21,965,515 5/ 5/94 (1,468,897)
DEM 20,100,000 US$ 11,484,402 5/25/94 (708,996)
DEM 31,065,000 US$ 17,629,033 7/13/94 (1,149,968)
DEM 3,000,000 US$ 1,786,565 11/ 2/94 (27,383)
FFr 52,330,000 US$ 8,725,302 5/ 9/94 (542,321)
FFr 23,400,000 US$ 3,903,012 5/ 9/94 (241,179)
FFr 8,596,157 US$ 1,433,680 5/ 9/94 (88,713)
NZ$ 13,100,000 US$ 7,533,810 5/ 2/94 9,170
NKr 11,254,000 US$ 1,489,610 5/31/94 (84,413)
--------------
Net Unrealized Depreciation............. $ (5,169,628)
==============
</TABLE>
See Notes to Financial Statements
<PAGE> 5
DEAN WITTER GLOBAL SHORT-TERM INCOME FUND INC.
FINANCIAL STATEMENTS
- - - - - --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1994 (unaudited)
- - - - - -------------------------------------------
ASSETS:
Investments in securities, at value
(identified cost $239,528,673) (Note
1)....................................... $235,281,889
Cash....................................... 1,257,178
Receivable for:
Interest................................. 6,950,666
Compensated forward foreign currency con-
tracts................................. 721,641
Capital stock sold....................... 42,394
Deferred organizational expenses (Note
1)....................................... 45,095
Prepaid expenses & other receivables....... 3,071
------------
TOTAL ASSETS....................... 244,301,934
------------
LIABILITIES:
Net depreciation on forward foreign
currency contracts....................... 5,169,628
Payable for:
Compensated forward foreign currency con-
tracts................................. 3,692,121
Capital stock repurchased................ 1,951,573
Dividends to shareholders................ 1,280,582
Plan of distribution fee (Note 3)........ 145,325
Investment management fee (Note 2)....... 106,571
Accrued expenses & other payables (Note
4)....................................... 228,228
------------
TOTAL LIABILITIES.................. 12,574,028
------------
NET ASSETS:
Paid-in-capital............................ 250,054,270
Accumulated net realized loss.............. (13,775,354)
Net unrealized depreciation................ (9,265,278)
Accumulated undistributed net investment
income................................... 4,714,268
------------
NET ASSETS......................... $231,727,906
=============
NET ASSET VALUE PER SHARE,
26,180,337 shares outstanding
(500,000,000 authorized shares of $.01
par value)............................... $8.85
-----
-----
STATEMENT OF OPERATIONS For the six months
ended April 30, 1994 (unaudited)
- - - - - -------------------------------------------
INVESTMENT INCOME:
INTEREST (net of $72,841 foreign
withholding tax)........................ $ 10,640,315
------------
EXPENSES
Plan of distribution fee (Note 3)........ 995,033
Investment management fee (Note 2)....... 729,691
Transfer agent fees and expenses......... 159,970
Custodian fees........................... 122,495
Professional fees........................ 50,237
Interest expense......................... 48,742
Shareholder reports and notices.......... 40,255
Directors' fees & expenses (Note 4)...... 16,838
Organizational expenses (Note 1)......... 14,867
Registration fees........................ 13,914
Other.................................... 3,911
------------
TOTAL EXPENSES......................... 2,195,953
------------
NET INVESTMENT INCOME................ 8,444,362
------------
NET REALIZED AND UNREALIZED LOSS
(NOTE 1):
Net realized loss on:
Investments............................ (7,892,843)
Futures contracts...................... (981,094)
Foreign exchange transactions.......... (2,581,857)
------------
(11,455,794)
------------
Net change in unrealized depreciation on:
Investments............................ 4,002,196
Translation of forward foreign currency
contract, other assets and
liabilities
denominated in foreign currencies.... (3,738,967)
------------
263,229
------------
NET LOSS............................... (11,192,565)
------------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS.......... $ (2,748,203)
=============
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- - - - - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the six
months ended For the
April 30, 1994 year ended
(unaudited) October 31, 1993
------------------- -------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income................................................. $ 8,444,362 $ 24,992,950
Net realized loss..................................................... (11,455,794) (3,242,126)
Net change in unrealized appreciation or depreciation................. 263,229 (5,996,751)
------------------- -------------------
Net increase (decrease) in net assets resulting from operations... (2,748,203) 15,754,073
Dividends to shareholders from net investment income.................... (8,298,752) (23,594,682)
Net decrease from capital stock transactions (Note 5)................... (62,503,431) (128,072,055)
------------------- -------------------
Total decrease.................................................... (73,550,386) (135,912,664)
NET ASSETS:
Beginning of period..................................................... 305,278,292 441,190,956
------------------- -------------------
END OF PERIOD (including undistributed net investment income of
$4,714,268 and $4,568,658, respectively)............................... $ 231,727,906 $ 305,278,292
=================== ===================
</TABLE>
See Notes to Financial Statements
<PAGE> 6
DEAN WITTER GLOBAL SHORT-TERM INCOME FUND INC.
NOTES TO FINANCIAL STATEMENTS (unaudited)
- - - - - --------------------------------------------------------------------------------
1. ORGANIZATION AND ACCOUNTING POLICIES -- Dean Witter Global Short-Term Income
Fund Inc. (the "Fund") is registered under the Investment Company Act of 1940,
as amended, as a non-diversified, open-end management investment company. It was
incorporated in Maryland on August 2, 1990 and commenced operations on November
1, 1990.
The following is a summary of the significant accounting policies:
A. Valuation of Investments -- (1) an equity portfolio security listed or
traded on the New York or American Stock Exchange 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 by the Trustees; (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, including circumstances under which
it is determined by the Investment Manager that sale or bid prices are not
reflective of a security's market value, portfolio securities are valued at
their fair value as determined in good faith under procedures established
by and under the general supervision of the Trustees (valuation of debt
securities for which market quotations are not readily available may be
based upon current market prices of securities which are comparable in
coupon, rating and maturity or an appropriate matrix utilizing similar
factors); and (4) short-term debt securities with remaining maturities of
60 days or less at the time of purchase are valued at amortized cost; other
short-term debt securities are valued on a mark-to-market basis until such
time as they reach a remaining maturity of 60 days, whereupon they will be
valued at amortized cost using their value on the 61st day; and (5) all
other securities and other assets are valued at their fair value as
determined in good faith under procedures established by and under the
general supervision of the Trustees.
B. Accounting for Investments -- Security transactions are accounted for on
the trade date (date the order to buy or sell is executed). In computing
net investment income, the Fund does not amortize premiums or accrue
discounts on fixed income securities in the portfolio, except those
original issue discounts for which amortization is required for federal
income tax purposes. Realized gains and losses on security transactions are
determined on the identified cost method. Dividend income and other
distributions are recorded on the ex-dividend date, except certain
dividends from foreign securities which are recorded as soon as the Fund is
informed after the ex-dividend date. Interest income is accrued daily.
C. Futures Contracts -- A futures contract is an agreement between two
parties to buy and sell a security or foreign currency at a set price on a
future date. Upon entering into such a contract the Fund pledges to the
broker cash or U.S. Government securities equal to the minimum "initial
margin" requirements of the applicable futures exchange. Pursuant to the
contract, the Fund is to receive from or pay to the broker an amount of
cash equal to the daily fluctuation in value of the contract translated at
the current exchange rate. Such receipts or payments are known as
"variation
<PAGE> 7
DEAN WITTER GLOBAL SHORT-TERM INCOME FUND INC.
NOTES TO FINANCIAL STATEMENTS (unaudited)(continued)
- - - - - --------------------------------------------------------------------------------
margin," and are recorded by the Fund as unrealized gains or losses. When
the contract is closed, the Fund records a realized gain or loss equal to
the accumulated daily variation margin over the life of the contract.
D. Foreign Currency Translation -- The books and records of the Fund are
maintained in U.S. dollars as follows: (1) the foreign currency market
values of investment securities, other assets and liabilities and forward
contracts stated in foreign currencies are translated at the exchange rates
at the end of the period; and (2) purchases, sales, income and expenses are
translated at the rate of exchange 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 the U.S. Federal income tax regulations,
certain net foreign exchange gains/losses included in realized and
unrealized gain/loss in the Statement of Operations for the six months
ended April 30, 1994 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 Exchange Contracts -- The Fund may enter into
forward foreign currency contracts as a hedge against fluctuations in
future foreign exchange rates. All forward contracts are valued daily at
the appropriate exchange rates and any resulting unrealized currency gains
or losses are reflected in the Fund's accounts. The Fund records realized
gains or losses on delivery of the currency or at the time the forward
contract is extinguished (compensated) by entering into a closing
transaction prior to delivery.
F. Federal Income Tax Status -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income to its
shareholders. Accordingly, no federal income tax provision is required.
G. Dividends and Distributions to Shareholders -- The Fund records
dividends and distributions to its shareholders on the record date. The
amount of dividends and distributions from net investment income and net
realized capital gains are determined in accordance with federal income tax
regulations, which may differ from generally accepted accounting
principles. These "book/tax" differences are either considered temporary or
permanent in nature. To the extent these differences are permanent in
nature, such amounts are reclassified within the capital accounts based on
their federal tax-basis treatment; temporary differences do not require
reclassifications. 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.
H. Organizational Expenses -- The Fund's Investment Manager paid the
organizational expenses of the Fund in the amount of approximately $150,000
and the Fund has reimbursed the Investment Manager for the full amount
thereof which have been deferred and are being amortized by the Fund on the
straight line method over a period not to exceed five years from the
commencement of operations.
<PAGE> 8
DEAN WITTER GLOBAL SHORT-TERM INCOME FUND INC.
NOTES TO FINANCIAL STATEMENTS (unaudited)(continued)
- - - - - --------------------------------------------------------------------------------
2. INVESTMENT MANAGEMENT AGREEMENT -- Pursuant to an Investment Management
Agreement (the "Agreement") with Dean Witter InterCapital Inc. (the "Investment
Manager"), the Fund pays its Investment Manager a management fee, calculated
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: 0.55% of the
portion of the daily net assets not exceeding $500 million; and 0.50% of the
portion of the daily net assets exceeding $500 million.
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 a fee, which is
accrued daily and payable monthly, at the annual rate of 0.75% 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 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 by the Distributor, but not yet recovered, may be recovered through
future distribution fees from the Fund and contingent deferred sales charges
from the Fund's shareholders.
The Distributor has informed the Fund that for the six months ended April
30, 1994, it received approximately $377,000 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 the proceeds from sales of portfolio securities for the six months
ended April 30, 1994, excluding short-term investments, were as follows:
<TABLE>
<CAPTION>
Purchases Sales
------------- -------------
<S> <C> <C>
Corporate Bonds.................................. $ 6,610,936 $ 35,760,260
Foreign Government Obligations................... 131,770,250 175,180,170
U.S. Government Agencies & Obligations........... 52,541,389 84,080,844
</TABLE>
<PAGE> 9
DEAN WITTER GLOBAL SHORT-TERM INCOME FUND INC.
NOTES TO FINANCIAL STATEMENTS (unaudited)(continued)
- - - - - --------------------------------------------------------------------------------
On April 1, 1991, the Fund established an unfunded noncontributory defined
benefit pension plan covering all independent Directors of the Fund who will
have served as independent Directors for at least five years at the time of
retirement. Benefits under this plan are based on years of service and
compensation during the last five years of service. Aggregate pension costs for
the six months ended April 30, 1994, included in Directors' fees and expenses in
the Statement of Operations, amounted to $4,384. At April 30, 1994 the Fund had
an accrued pension liability of $41,646 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 $43,000.
5. CAPITAL STOCK -- Transactions in capital stock 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............................ 3,176,988 $ 28,803,129 1,712,023 $ 16,009,337
Reinvestment of dividends....... 536,905 4,861,045 1,490,031 13,840,182
------------ ------------- ------------ --------------
3,713,893 33,664,174 3,202,054 29,849,519
Repurchased..................... (10,610,508) (96,167,605) (17,006,913) (157,921,574)
------------ ------------- ------------ --------------
Net decrease.................... (6,896,615) $ (62,503,431) (13,804,859) $ (128,072,055)
============ ============= ============ ==============
</TABLE>
6. FEDERAL INCOME TAX STATUS -- As of October 31, 1993, the Fund had temporary
book/tax differences primarily attributable to the mark-to-market of open
forward foreign currency exchange contracts and compensated forward foreign
currency exchange contracts and permanent book/tax differences primarily
attributable to foreign currency losses and dividend redesignations. To reflect
reclassifications arising from permanent book/tax differences as of October 31,
1993, accumulated net realized loss was credited $26,971,870, paid-in-capital
was charged $24,885,529 and accumulated undistributed net investment income was
charged $2,086,341. The Investment Manager has determined that distribution of
paid-in-capital is likely to occur.
7. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK -- At April 30, 1994, the
Fund had outstanding forward foreign currency exchange contracts ("forward
contracts") as a hedge against changes in future foreign exchange rates. Forward
contracts involve elements of market risk in excess of the amount reflected in
the Statement of Assets and Liabilities. The Fund bears the risk of an
unfavorable change in the foreign exchange rate underlying the forward contract.
<PAGE> 10
DEAN WITTER GLOBAL SHORT-TERM INCOME FUND INC.
FINANCIAL HIGHLIGHTS (unaudited)
- - - - - --------------------------------------------------------------------------------
Selected ratios and per share data for a share of capital stock outstanding
throughout each period:
<TABLE>
<CAPTION>
For the six For the year ended October 31,
months ended -----------------------------------
April 30, 1994 1993 1992 1991
-------------- --------- --------- ---------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period....... $ 9.23 $ 9.41 $ 9.77 $ 10.00
-------------- --------- --------- ---------
Net investment income................... 0.35 0.70 0.82 0.95
Net realized and unrealized loss........ (0.44) (0.27) (0.46) (0.23)
-------------- --------- --------- ---------
Total from investment operations........... (0.09) 0.43 0.36 0.72
Dividends from net investment income....... (0.29) (0.61) (0.72) (0.95)
-------------- --------- --------- ---------
Net asset value, end of period............. $ 8.85 $ 9.23 $ 9.41 $ 9.77
============== ========= ========= =========
TOTAL INVESTMENT RETURN+..................... (1.06)%(1) 4.72% 3.76% 7.49%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)... $ 231,728 $ 305,278 $ 441,191 $ 462,263
Ratio of expenses to average net assets.... 1.64%(2) 1.55% 1.55% 1.61%
Ratio of net investment income to average
net assets.............................. 6.29%(2) 6.97% 8.43% 9.49%
Portfolio turnover rate.................... 74% 221% 149% 8%
</TABLE>
- - - - - ---------------
+ Does not reflect the deduction of sales load.
(1) Not annualized.
(2) Annualized.
See Notes to Financial Statements
<PAGE> 11
[This Page Intentionally Left Blank]
<PAGE> 12
TRUSTEES
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
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Sheldon Curtis
Vice President, Secretary and General Counsel
Vinh Q. Tran
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Dean Witter Trust Company
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
LEGAL COUNSEL
Sheldon Curtis
Two World Trade Center
New York, New York 10048
INDEPENDENT ACCOUNTANTS
Price Waterhouse
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
GLOBAL SHORT-TERM
INCOME FUND
[PHOTO]
SEMIANNUAL REPORT
APRIL 30, 1994
<PAGE> 13
APPENDIX TO ELECTRONIC FORMAT DOCUMENT
The back cover of the Semiannual Report in the printed version contains
a picture of a two globes and various currency.
