<PAGE>
DEAN WITTER GLOBAL SHORT-TERM INCOME FUND INC. TWO WORLD TRADE CENTER, NEW
YORK, NEW YORK 10048
LETTER TO THE SHAREHOLDERS
DEAR SHAREHOLDER:
During the six-month period ended April 30, 1995, Dean Witter Global Short-Term
Income Fund Inc. benefited from the declines of global bond yields, especially
in the United States and, to a lesser extent, the rising values of the major
currencies against the U.S. dollar.
A DECLINE IN INTEREST RATES
After a year of dramatic rate increases in 1994, U.S. interest rates reversed
direction and declined significantly during the first four months of 1995, in
response to the perceived excessive tightening by the Federal Reserve Board and
slowdown in the growth rate of the U.S. economy. Beginning in February 1994, the
Federal Reserve Board raised the federal-funds rate seven times over a twelve
month period. However following the November 15, 1994 increase, intermediate-
and long-term interest rates began to decline. The pace of this decline
quickened after the 50 basis point hike in the federal-funds rate on February 1,
1995.
By April 30, 1995, the yield on 3-year U.S. Treasury notes declined by 115 basis
points from their highs in early January. This decline in yields was not,
however, reflected in short-term rates, as three-month U.S. Treasury bill rates
stayed near the 6.0 percent level, conforming to the federal-funds rate of 6.0
percent.
During the same period, European bond markets turned in a mixed performance as
the political and budget problems continued to undermine the Southern European
countries. For example, yields on three-year Italian government bonds rose by 82
basis points during the last six months. While, yields on three-year German
government bonds declined by 83 basis points, bringing German rates lower than
those in the U.S. by about 50 basis points.
THE DECLINE OF THE U.S. DOLLAR
In the currency markets, the U.S. dollar declined sharply against the Japanese
yen and the German mark. After failing to benefit from the substantial U.S. rate
increases in 1994, the U.S. currency bore the brunt of the trade dispute between
the U.S. and Japan, reinforced by the growing monthly trade deficits the U.S.
has recorded against its major
<PAGE>
DEAN WITTER GLOBAL SHORT-TERM INCOME FUND INC.
LETTER TO THE SHAREHOLDERS, CONTINUED
trading partners. For the six-month period, the U.S. dollar lost 8.43 percent
against the German mark and 15 percent against the Japanese yen. Against the
other major currencies, the U.S. dollar's decline was less dramatic. Overall,
the U.S. currency lost 4.7 percent on a trade-weighted basis.
PERFORMANCE AND PORTFOLIO
Against this backdrop, Dean Witter Global Short-Term Income Fund Inc. has shown
a strong performance during the last six months as global interest rates
declined and the prices of the securities in the Fund's portfolio went up
significantly in value. For the six month period, the Fund's total return was
4.45 percent. During the period, the Fund paid distributions totaling $0.27 per
share.
Under the market conditions outlined above, the Fund's investment strategy was
to allocate the bulk of its assets in the North American markets, taking
advantage of higher yields, and rising bond prices: As of April 30, 1995, 74
percent of the Fund's assets were in North America, 5 percent in Europe and 21
percent in the Pacific Basin countries. A portion of the U.S. investments were
hedged back into the German mark, the French franc and the Japanese yen in order
to protect the Fund against the U.S. dollar's weakness. In addition, the Fund
extended its average maturity from 1.76 years to about three years in mid-April.
At the close of the reporting period, the Fund's average maturity was 2.3 years.
LOOKING AHEAD
Going forward, we anticipate that the Fund will maintain its current strategy of
diversifying into different global markets with an emphasis on short-term bonds.
Also, with the improving economic fundamentals in the European countries, such
as better inflation prospects and greater fiscal discipline, short-term bonds in
these markets should offer excellent value and therefore represent good
investment opportunities for the Fund.
We appreciate your ongoing support of Dean Witter Global Short-Term Income Fund
Inc. and look forward to continuing to serve your investment needs.
Very truly yours,
[SIGNATURE]
CHARLES A. FIUMEFREDDO
CHAIRMAN OF THE BOARD
<PAGE>
DEAN WITTER GLOBAL SHORT-TERM INCOME FUND INC.
PORTFOLIO OF INVESTMENTS APRIL 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN DESCRIPTION AND COUPON
THOUSANDS MATURITY DATE RATE VALUE
- -----------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
GOVERNMENT & CORPORATE BONDS (78.6%)
CANADA (9.0%)
BANKING - INTERNATIONAL (0.9%)
Ca$ 1,500 Royal Bank Mortgage 08/03/95+............................ 11.875% $ 1,114,775
---------------
GOVERNMENT OBLIGATIONS (8.1%)
5,000 Ontario Hydro 08/22/96+.................................. 8.50 3,693,810
8,900 Ontario Province 09/30/96+............................... 10.00 6,698,283
---------------
10,392,093
---------------
TOTAL CANADA........................................................ 11,506,868
---------------
NEW ZEALAND (15.1%)
GOVERNMENT OBLIGATIONS
NZ$ 22,400 New Zealand Treasury Bond 11/15/96+...................... 9.00 15,180,941
6,000 New Zealand Treasury Bond 07/15/97+...................... 10.00 4,175,433
---------------
TOTAL NEW ZEALAND................................................... 19,356,374
---------------
UNITED KINGDOM (4.8%)
GOVERNMENT OBLIGATION
L 3,700 Abbey National Treasury 04/22/97+........................ 10.50 6,186,014
---------------
UNITED STATES (49.7%)
BANKS (17.4%)
US$ 5,000 Bank One (Ind) 12/30/96+................................. 7.80 5,076,100
5,000 Morgan (J.P.) & Co., Inc. 11/15/98+...................... 7.625 5,070,300
10,000 Norwest Corp. 03/15/98+.................................. 5.75 9,642,900
2,500 Society Bank - Cleveland 04/15/97........................ 7.125 2,502,175
---------------
22,291,475
---------------
U.S. GOVERNMENT OBLIGATIONS (32.3%)
U.S. Treasury Notes
8,000 02/29/00................................................. 7.125 8,073,750
7,000 11/15/97................................................. 7.375 7,108,281
8,000 10/31/99................................................. 7.50 8,187,500
15,000 11/30/99+................................................ 7.75 15,499,219
2,500 12/31/99................................................. 7.75 2,584,375
---------------
41,453,125
---------------
TOTAL UNITED STATES................................................. 63,744,600
---------------
TOTAL GOVERNMENT & CORPORATE BONDS
(IDENTIFIED COST $98,963,258)....................................... 100,793,856
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL SHORT-TERM INCOME FUND INC.
PORTFOLIO OF INVESTMENTS APRIL 30, 1995 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN DESCRIPTION AND COUPON
THOUSANDS MATURITY DATE RATE VALUE
- -----------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
SHORT-TERM INVESTMENTS (a) (12.6%)
AUSTRALIA (5.1%)
GOVERNMENT OBLIGATION
Au$ 9,300 Australia Treasury Bill 09/27/95......................... 7.98 % $ 6,547,769
---------------
UNITED STATES (7.5%)
COMMERCIAL PAPER (6.9%)
US$ 5,000 First Chicago Corp. 05/03/95............................. 5.87 4,998,370
3,800 Toronto-Dominion Holdings, Inc. 05/05/95................. 5.95 3,797,488
---------------
8,795,858
---------------
GOVERNMENT AGENCY (0.6%)
750 Federal Home Loan Mortgage Corp. 05/01/95................ 5.85 750,000
---------------
TOTAL UNITED STATES................................................. 9,545,858
---------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $16,208,742)....................................... 16,093,627
---------------
TOTAL INVESTMENTS
(IDENTIFIED COST $115,172,000) (B)........ 91.2% 116,887,483
CASH AND OTHER ASSETS IN EXCESS OF
LIABILITIES............................... 8.8 11,260,922
----- ------------
NET ASSETS................................ 100.0% $128,148,405
----- ------------
----- ------------
- ---------------------
+ Some or all of these securities are segregated in connection with open
forward foreign currency contracts.
(a) Securities were purchased on a discount basis. The interest rate shown has
been adjusted to reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes is $115,172,000; the
aggregate gross unrealized appreciation is $2,853,937 and the aggregate
gross unrealized depreciation is $1,138,454, resulting in net unrealized
appreciation of $1,715,483.
</TABLE>
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT APRIL 30, 1995:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS IN EXCHANGE DELIVERY APPRECIATION/
TO DELIVER FOR DATE (DEPRECIATION)
- -------------------------------------------------------------
<S> <C> <C> <C>
FFr 31,575,972 US$ 6,475,794 05/02/95 $ 55,956
US$ 5,794,414 Y 500,000,000 09/29/95 274,173
US$ 7,306,737 DEM 10,000,000 10/19/95 (34,010)
US$ 6,706,736 DEM 9,150,000 12/29/95 (29,853)
US$ 1,358,546 DEM 1,850,000 12/29/95 (8,575)
--------------
Net unrealized appreciation.......... $257,691
--------------
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL SHORT-TERM INCOME FUND INC.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1995 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $115,172,000)............................ $116,887,483
Unrealized appreciation on forward foreign currency
contracts................................................. 330,129
Cash (including $650,661 in foreign currency)............... 723,895
Receivable for:
Investments sold........................................ 6,419,838
Interest................................................ 2,965,595
Compensated forward foreign currency contracts.......... 2,599,088
Capital stock sold...................................... 7,039
Deferred organizational expenses............................ 15,114
Prepaid expenses and other assets........................... 25,398
------------
TOTAL ASSETS........................................... 129,973,579
------------
LIABILITIES:
Unrealized depreciation on forward foreign currency
contracts................................................. 72,438
Payable for:
Compensated forward foreign currency contracts.......... 1,150,592
Capital stock repurchased............................... 231,710
Plan of distribution fee................................ 80,201
Investment management fee............................... 58,814
Dividends to shareholders............................... 43,612
Accrued expenses and other payables......................... 187,807
------------
TOTAL LIABILITIES...................................... 1,825,174
------------
NET ASSETS:
Paid-in-capital............................................. 136,951,610
Net unrealized appreciation................................. 1,903,615
Accumulated undistributed net investment income............. 109,244
Accumulated net realized loss............................... (10,816,064)
------------
NET ASSETS............................................. $128,148,405
------------
------------
NET ASSET VALUE PER SHARE,
14,496,912 SHARES OUTSTANDING (500,000,000 SHARES
AUTHORIZED OF $.01 PAR VALUE).............................
$8.84
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL SHORT-TERM INCOME FUND INC.
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME............................................. $ 5,719,887
-----------
EXPENSES
Plan of distribution fee.................................... 533,681
Investment management fee................................... 391,365
Transfer agent fees and expenses............................ 91,919
Custodian fees.............................................. 67,135
Professional fees........................................... 46,460
Shareholder reports and notices............................. 17,880
Organizational expenses..................................... 14,867
Directors' fees and expenses................................ 14,076
Registration fees........................................... 11,953
Other....................................................... 10,339
-----------
TOTAL EXPENSES......................................... 1,199,675
-----------
NET INVESTMENT INCOME.................................. 4,520,212
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments............................................. (4,919,694)
Futures contracts....................................... 346,850
Foreign exchange transactions........................... 929,356
-----------
TOTAL LOSS............................................. (3,643,488)
-----------
Net change in unrealized appreciation/depreciation on:
Investments............................................. 4,147,012
Translation of forward foreign currency contracts, other
assets and liabilities denominated in foreign
currencies............................................ 526,130
-----------
TOTAL APPRECIATION..................................... 4,673,142
-----------
NET GAIN............................................... 1,029,654
-----------
NET INCREASE................................................ $ 5,549,866
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL SHORT-TERM INCOME FUND INC.
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE
APRIL 30, 1995 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1994
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income....................................... $ 4,520,212 $ 14,896,746
Net realized loss........................................... (3,643,488) (21,073,488)
Net change in unrealized appreciation/depreciation.......... 4,673,142 6,758,980
-------------- ----------------
NET INCREASE........................................... 5,549,866 582,238
-------------- ----------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income....................................... (4,410,053) (3,245,847)
Paid-in-capital............................................. -- (11,239,060)
-------------- ----------------
TOTAL.................................................. (4,410,053) (14,484,907)
-------------- ----------------
Net decrease from capital stock transactions................ (43,108,047) (121,258,984)
-------------- ----------------
TOTAL DECREASE......................................... (41,968,234) (135,161,653)
NET ASSETS:
Beginning of period......................................... 170,116,639 305,278,292
-------------- ----------------
END OF PERIOD
(INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF
$109,244 AND $915, RESPECTIVELY)........................ $ 128,148,405 $ 170,116,639
-------------- ----------------
-------------- ----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL SHORT-TERM FUND INC.
NOTES TO FINANCIAL STATEMENTS APRIL 30, 1995 (UNAUDITED)
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter Global Short-Term Fund Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified,
open-end management investment company. The Fund was incorporated in Maryland on
August 2, 1990 and commenced operations on November 1, 1990.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) all portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest available bid price prior to the time of valuation; (2) listed options
are valued at the latest sale price on the exchange on which they are listed
unless no sales of such options have taken place that day, in which case they
will be valued at the mean between their latest bid and asked price; (3) futures
contracts are valued at the latest sale price on the commodities exchange on
which they trade unless the Directors determine that such price does not reflect
their market value, in which case it will be valued at fair value as determined
by the Directors; (4) 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
Directors; (5) 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 Directors
(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 (6) short-term debt securities having a maturity date of
more than sixty days at time of purchase are valued on a mark-to-market basis
until sixty days prior to maturity and thereafter at amortized cost based on
their value on the 61st day. Short-term debt securities having a maturity date
of sixty days or less at the time of purchase are valued at amortized cost.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
Discounts on securities purchased are amortized over the life of the respective
securities. Interest income is accrued daily.
C. FUTURES CONTRACTS -- A futures contract is an agreement between two parties
to buy and sell financial instruments at a set price on a future date. Upon
entering into such a contract, the Fund is
<PAGE>
DEAN WITTER GLOBAL SHORT-TERM FUND INC.
NOTES TO FINANCIAL STATEMENTS APRIL 30, 1995 (UNAUDITED) CONTINUED
required to pledge 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 agrees to receive from or pay to the broker an amount
of cash equal to the daily fluctuation in the value of the contract which is
knows as variation margin. Such receipts or payments are recorded by the Fund as
unrealized gains or losses. Upon closing of the contract, the Fund realizes a
gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.
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 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 currencies gain or loss. The Fund records
realized gains or losses on delivery of the currency or at the time the forward
contract is extinguished (compensated) by entering into a closing transaction
prior to delivery.
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
<PAGE>
DEAN WITTER GLOBAL SHORT-TERM FUND INC.
NOTES TO FINANCIAL STATEMENTS APRIL 30, 1995 (UNAUDITED) CONTINUED
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.
H. ORGANIZATIONAL EXPENSES -- Dean Witter InterCapital Inc. (the "Investment
Manager") paid the organizational expenses of the Fund in the amount of
approximately $150,000. Such expenses have been deferred and are being amortized
on the straight-line method over a period not to exceed five years from the
commencement of operations.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement, the Fund pays its Investment
Manager a management fee, accrued daily and payable monthly, by applying the
following annual rates to the net assets of the Fund determined as of the close
of each business day: 0.55% to the portion of the daily net assets not exceeding
$500 million and 0.50% to 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, 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 0.75% 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 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
<PAGE>
DEAN WITTER GLOBAL SHORT-TERM FUND INC.
NOTES TO FINANCIAL STATEMENTS APRIL 30, 1995 (UNAUDITED) CONTINUED
imposed or upon which such charge has been waived; or (b) the Fund's average
daily net assets. Amounts paid under the Plan are paid to the Distributor to
compensate it for the services provided and the expenses borne by it and others
in the distribution of the Fund's shares, including the payment of commissions
for sales of the Fund's shares and incentive compensation to, and expenses of
the account executives of Dean Witter Reynold Inc.'s, an affiliate of the
Investment Manager and Distributor, and other employees and selected
broker-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 six months ended April 30,
1995, it received approximately $75,000 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 six months ended April 30, 1995 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
----------- -----------
<S> <C> <C>
Corporate Bonds.................................................. $18,884,519 $34,091,830
Foreign Government Bonds......................................... 17,421,892 83,765,238
U.S. Government and Agencies Obligations......................... 48,596,653 8,052,734
</TABLE>
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At April 30, 1995, the Fund had
transfer agent fees and expenses payable of approximately $20,500.
The Fund established an unfunded noncontributory defined benefit pension plan
covering all independent Directors of the Fund who will have served as
independent Directors/Trustees 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
<PAGE>
DEAN WITTER GLOBAL SHORT-TERM FUND INC.
NOTES TO FINANCIAL STATEMENTS APRIL 30, 1995 (UNAUDITED) CONTINUED
April 30, 1995 included in Directors' fees and expenses in the Statement of
Operations amounted to $4,391. At April 30, 1995, the Fund had an accrued
pension liability of $50,792 which is included in accrued expenses in the
Statement of Assets and Liabilities.
5. CAPITAL STOCK
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 1995 OCTOBER 31, 1994
--------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ------------ --------------
<S> <C> <C> <C> <C>
Sold............................................................. 176,307 $ 1,528,577 8,350,784 $ 74,163,360
Reinvestment of dividends........................................ 299,311 2,596,500 941,697 8,409,346
----------- ------------- ------------ --------------
475,618 4,125,077 9,292,481 82,572,706
Repurchased...................................................... (5,454,010) (47,233,124) (22,894,129) (203,831,690)
----------- ------------- ------------ --------------
Net decrease..................................................... (4,978,392) $ (43,108,047) (13,601,648) $ (121,258,984)
----------- ------------- ------------ --------------
----------- ------------- ------------ --------------
</TABLE>
6. FEDERAL INCOME TAX STATUS
As of October 31, 1994, the Fund had a net capital loss carryover of
approximately $7,173,000 of which $85,000 will be available through October 31,
1999, $1,231,000 will be available through October 31, 2000, $1,004,000 will be
available through October 31, 2001 and $4,853,000 will be available through
October 31, 2002 to offset future capital gains to the extent provided by
regulations.
At October 31, 1994, the Fund had permanent book/tax differences primarily
attributable to foreign currency losses and dividend redesignations.
7. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS
The Fund may enter into forward foreign currency contracts ("forward contracts")
to facilitate settlement of foreign currency denominated portfolio transactions
or to manage its foreign currency exposure or to sell, for a fixed amount of
U.S. dollars or other currency, the amount of foreign currency approximating the
value of some or all of its holdings denominated in such foreign currency or an
amount of foreign currency other than the currency in which the securities to be
hedged are denominated approximating the value of some or all of its holdings to
be hedged. Additionally, when the Investment Manager anticipates purchasing
securities at some time in the future, the Fund may enter into a forward
contract to purchase an amount of currency equal to some or all the value of the
anticipated purchase for a fixed amount of U.S. dollars or other currency.
<PAGE>
DEAN WITTER GLOBAL SHORT-TERM FUND INC.
NOTES TO FINANCIAL STATEMENTS APRIL 30, 1995 (UNAUDITED) CONTINUED
To hedge against adverse interest rate, foreign currency and market risks, the
Fund may enter into written options on interest rate futures and interest rate
futures contracts ("derivative investments").
At April 30, 1995, there were no outstanding forward contracts other than those
used to manage foreign currency exposure associated with anticipated portfolio
transactions of foreign currency denominated securities.
These derivative instruments involve elements of market risk in excess of the
amount reflected in the Statement of Assets and Liabilities. The Fund bears the
risk of an unfavorable change in the foreign exchange rates underlying the
forward contracts. Risks may also arise upon entering into these contracts from
the potential inability of the counterparties to meet the terms of their
contracts.
<PAGE>
DEAN WITTER GLOBAL SHORT-TERM INCOME FUND INC.
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of capital stock outstanding
throughout each period:
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED
APRIL 30, FOR THE YEAR ENDED OCTOBER 31
1995 ------------------------------------------
(UNAUDITED) 1994 1993 1992 1991
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value,
beginning of period............... $ 8.73 $ 9.23 $ 9.41 $ 9.77 $ 10.00
---------- --------- --------- --------- ---------
Net investment income.............. 0.28 0.72 0.70 0.82 0.95
Net realized and unrealized gain
(loss)............................ 0.10 (0.66) (0.27) (0.46) (0.23)
---------- --------- --------- --------- ---------
Total from investment operations... 0.38 0.06 0.43 0.36 0.72
---------- --------- --------- --------- ---------
Less dividends and distributions
from:
Net investment income........... (0.27) (0.13) (0.61) (0.72) (0.95)
Paid-in-capital................. -- (0.43) -- -- --
---------- --------- --------- --------- ---------
Total dividends and
distributions..................... (0.27) (0.56) (0.61) (0.72) (0.95)
---------- --------- --------- --------- ---------
Net asset value, end of period..... $ 8.84 $ 8.73 $ 9.23 $ 9.41 $ 9.77
---------- --------- --------- --------- ---------
---------- --------- --------- --------- ---------
TOTAL INVESTMENT RETURN+........... 4.45%(1) 0.65% 4.72% 3.76% 7.49%
RATIOS TO AVERAGE NET ASSETS:
Expenses........................... 1.69%(2) 1.63% 1.55% 1.55% 1.61%
Net investment income.............. 6.35%(2) 6.35% 6.97% 8.43% 9.49%
SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands......................... $128,148 $170,117 $305,278 $441,191 $462,263
Portfolio turnover rate............ 68%(1) 123% 221% 149% 8%
<FN>
- ---------------------
+ Does not reflect the deduction of sales charge.
(1) Not annualized.
(2) Annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
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<PAGE>
DIRECTORS
Jack F. Bennett
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
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
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
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 directors,
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
[Graphic]
SEMIANNUAL REPORT
APRIL 30, 1995
