<PAGE> 1
DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
Two World Trade Center
New York, New York 10048
DEAR SHAREHOLDER:
- --------------------------------------------------------------------------------
For the six-month period ended November 30, 1993, Dean Witter Short-Term U.S.
Treasury Trust produced a total return of 1.98 percent; for the trailing 12
months ended November 30, 1993 the Fund's total return was 5.63 percent. Over
the last six months, the Fund's net asset value has been relatively stable, with
a high of $10.43 and a low of $10.28. As of November 30, 1993, the Fund's net
asset value was $10.29 per share.
THE MARKETPLACE
The economic landscape in the United States over the six-month period ended
November 30, 1993 proved to be a considerable challenge. At the Fund's fiscal
year end on May 31, 1993, the consensus economic outlook was for continued
malaise for the balance of 1993, despite the fact that interest rates were at
their lowest levels in 30 years and were continuing to decline. However, the
middle of October saw an end to the slide, with rates creeping higher as signs
of renewed economic vigor became apparent. At this time, the market was
characterized by increased consumer spending as mortgage refinancing generated
greater disposable income.
The general decline in interest rates brought with it a decline in the Fund's
dividend. Nevertheless, the current distribution rate as of November 30, 1993,
of 4.67 percent -- reduced from 5.04 percent at May 31, 1993 -- continues to
offer investors an attractive alternative to other short-term investments, free
from state and local taxes in all 50 states and the District of Columbia. As of
November 30, 1993, the Fund's 30-day SEC yield was 3.31 percent. Since its
inception and despite the decades-low U.S. Treasury yields, the Fund, which
invests primarily in U.S. Treasuries with two-to-three year maturities, has been
able to consistently offer higher yields than short-term certificates of deposit
(CDs) and money market securities (unlike shares of the Fund, CDs are federally
insured and offer a fixed rate of return for the term of the certificate).
LOOKING AHEAD
Our expectations are for the economy to slow from the rapid pace of 1993's
fourth quarter. This should occur as the 1993 tax hike begins to take its toll.
The general concern over President Clinton's health plan and its effect on U.S.
industry, coupled with the public's general dissatisfaction with the pace of
Congress' spending reduction plans should also contribute to this scenario.
Inflation however, should remain subdued at approximately three percent, which
enables the Fund to continue to provide an attractive income stream with a
relatively stable net asset value.
We appreciate your support of Dean Witter Short-Term U.S. Treasury Trust and
look forward to continuing to serve your investment needs and objectives.
Very truly yours,
/s/ CHARLES A. FIUMEFREDDO
--------------------------------
Charles A. Fiumefreddo
Chairman of the Board
<PAGE> 2
DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
PORTFOLIO OF INVESTMENTS November 30, 1993 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Coupon Maturity
(in thousands) Rate Date Value
- -------------------------------------- ------ -------- ------------
<S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS (98.9%)
U.S. TREASURY STRIPS (8.1%)
$ 5,000 0.000% 5/15/94 $ 4,923,908
5,000 0.000 8/15/94 4,877,778
5,000 0.000 5/15/96 4,488,290
10,000 0.000 5/15/96 8,974,421
10,000 0.000 5/15/97 8,464,097
30,000 0.000 5/15/97 25,392,291
------------
TOTAL U.S. TREASURY STRIPS (IDENTIFIED COST $57,453,505)...... 57,120,785
------------
U.S. TREASURY NOTES (86.4%)
5,000 3.875 2/28/95 5,001,562
5,000 3.875 4/30/95 4,995,312
10,000 3.875 8/31/95 9,960,937
20,000 3.875 10/31/95 19,884,375
5,000 4.250 5/15/96 4,984,375
5,000 4.375 8/15/96 4,989,062
25,500 4.625 8/15/95 25,711,171
5,000 4.625 2/15/96 5,032,812
5,000 4.750 8/31/98 4,922,656
10,000 4.750 9/30/98 9,846,875
20,000 4.750 10/31/98 19,650,000
20,000 4.875 1/31/94 20,050,000
10,000 5.125 5/31/94 10,082,812
5,000 5.125 2/28/98 5,021,875
5,000 5.125 3/31/98 5,019,530
20,000 5.125 6/30/98 20,021,875
10,000 5.125 11/30/98 9,984,375
10,000 5.250 7/31/98 10,059,375
5,000 5.375 5/31/98 5,058,593
30,000 5.500 2/15/95 30,585,937
25,000 5.500 7/31/97 25,582,030
10,000 5.500 9/30/97 10,225,000
10,000 5.875 5/15/95 10,267,187
20,000 6.000 11/15/94 20,434,375
40,000 6.125 12/31/96 41,850,000
10,000 6.375 6/30/97 10,526,562
25,000 6.500 11/30/96 26,332,031
110,000 6.875 2/15/94 110,790,634
75,000 6.875 8/15/94 76,734,375
5,000 6.875 10/31/96 5,312,500
40,000 7.000 9/30/96 42,675,000
------------
TOTAL U.S. TREASURY NOTES (IDENTIFIED COST $601,471,468)...... 611,593,203
------------
</TABLE>
<PAGE> 3
DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
PORTFOLIO OF INVESTMENTS November 30, 1993 (unaudited) (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Coupon Maturity
(in thousands) Rate Date Value
- -------------------------------------- ------ -------- ------------
<S> <C> <C> <C>
U.S. TREASURY BILLS (a) (4.4%)
$ 6,400 2.895% 12/09/93 $ 6,395,883
10,500 2.935 12/23/93 10,481,167
10,400 2.940 12/16/93 10,387,260
4,000 2.960 12/09/93 3,997,369
------------
TOTAL U.S. TREASURY BILLS (AMORTIZED COST $31,261,679)........ 31,261,679
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(IDENTIFIED COST $690,186,652)............................ 699,975,667
------------
TOTAL INVESTMENTS (IDENTIFIED COST
$690,186,652)(B).............................. 98.9% 699,975,667
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES.... 1.1 7,513,660
------ ------------
NET ASSETS........................................ 100.0% $707,489,327
------ ------------
------ ------------
</TABLE>
- ---------------
(a) Treasury bills were purchased on a discount basis. The rate shown reflects
the bond equivalent interest rate.
(b) The aggregate cost of investments for federal income tax purposes is
$690,186,652; the aggregate gross unrealized appreciation is $10,962,144 and
the aggregate gross unrealized depreciation is $1,173,129, resulting in net
unrealized appreciation of $9,789,015.
See Notes to Financial Statements
<PAGE> 4
DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
November 30, 1993 (unaudited)
- -------------------------------------------
ASSETS:
Investments in securities, at value
(identified cost $690,186,652) (Note
1)....................................... $ 699,975,667
Cash....................................... 240,843
Receivable for:
Interest................................. 8,627,355
Shares of beneficial interest sold....... 3,320,919
Deferred organizational expenses (Note
1)....................................... 73,990
Prepaid expenses........................... 199,653
-------------
TOTAL ASSETS....................... 712,438,427
-------------
LIABILITIES:
Payable for:
Shares of beneficial interest
repurchased............................ 4,042,206
Dividends to shareholders................ 362,367
Management fee payable (Note 2).......... 214,938
Plan of distribution fee payable (Note
3)..................................... 214,938
Accrued expenses and other payables
(Note 4)................................. 114,651
-------------
TOTAL LIABILITIES.................. 4,949,100
-------------
NET ASSETS:
Paid in capital............................ 697,346,380
Accumulated undistributed net realized
gain..................................... 282,061
Net unrealized appreciation of
investments.............................. 9,789,015
Accumulated undistributed net investment
income................................... 71,871
-------------
NET ASSETS......................... $ 707,489,327
-------------
-------------
NET ASSET VALUE PER SHARE, 68,770,210
shares outstanding (unlimited shares
authorized at $.01 par value)............ $10.29
-----
-----
STATEMENT OF OPERATIONS For the six months ended November
30, 1993 (unaudited)
- -------------------------------------------
INVESTMENT INCOME:
INTEREST INCOME............................ $ 18,411,992
-------------
EXPENSES
Investment management fee (Note 2)....... 1,146,693
Plan of distribution fee (Note 3)........ 1,146,693
Registration fees........................ 130,698
Transfer agent fees and expenses (Note
4)..................................... 110,058
Professional fees........................ 30,405
Shareholder reports and notices.......... 23,657
Custodian fees........................... 15,311
Organizational expenses (Note 1)......... 13,505
Trustees' fees & expenses................ 10,325
Other.................................... 7,424
-------------
TOTAL EXPENSES......................... 2,634,769
-------------
NET INVESTMENT INCOME................ 15,777,223
-------------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTE 1):
Net realized gain on investments......... 16,060
Net change in unrealized appreciation on
investments............................ (3,568,690)
-------------
NET LOSS ON INVESTMENTS.............. (3,552,630)
-------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS........ $ 12,224,593
-------------
-------------
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the six
months ended For the
November 30, 1993 year ended
(unaudited) May 31, 1993
------------------- -------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income................................................. $ 15,777,223 $ 29,832,988
Net realized gain on investments...................................... 16,060 266,090
Net change in unrealized appreciation on investments.................. (3,568,690) 6,464,012
------------------- -------------------
Net increase in net assets resulting from operations.............. 12,224,593 36,563,090
------------------- -------------------
Dividends and distributions to shareholders from:
Net Investment Income................................................. (16,121,561) (29,690,814)
Net realized gain on investments...................................... 0 (679,492)
------------------- -------------------
(16,121,561) (30,370,306)
------------------- -------------------
Net increase from transactions in shares of beneficial interest (Note
5).................................................................... 127,180,034 54,458,749
------------------- -------------------
Total increase.................................................... 123,283,066 60,651,533
NET ASSETS:
Beginning of period..................................................... 584,206,261 523,554,728
------------------- -------------------
END OF PERIOD (including undistributed net investment income of $71,871
and $416,209, respectively)............................................ $ 707,489,327 $ 584,206,261
------------------- -------------------
------------------- -------------------
</TABLE>
See Notes to Financial Statements
<PAGE> 5
DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
NOTES TO FINANCIAL STATEMENTS (unaudited)
- --------------------------------------------------------------------------------
1. ORGANIZATION AND ACCOUNTING POLICIES -- Dean Witter Short-Term U.S. Treasury
Trust (the "Fund") is registered under the Investment Company Act of 1940, as
amended (the "Act"), as a diversified, open-end management investment company.
It was organized on June 4, 1991 as a Massachusetts business trust and on July
19, 1991 issued 10,000 shares of beneficial interest for $100,000 to Dean Witter
Reynolds Inc., an affiliate of the Investment Manager, to effect the Fund's
initial capitalization. The Fund commenced operations on August 13, 1991.
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
bid price; (2) when market quotations are not readily available, portfolio
securities are valued at their fair value as determined in good faith under
procedures established by and under the general supervision of the Trustees
(valuation of 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 (3) short-term debt securities with
remaining maturities of 60 days or less to maturity at time of purchase are
valued at amortized cost; other short-term securities are valued on a
mark-to-market basis until such time as they reach a remaining maturity of
60 days, whereupon they are valued at amortized cost using their value on
the 61st day.
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. Additionally, with respect to market discount, a
portion of any capital gain realized upon disposition is recharacterized as
investment income in accordance with the provisions of the Internal Revenue
Code. Realized gains and losses on security transactions are determined on
the identified cost method. Interest income is accrued daily.
C. Federal Income Tax Status -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income to its
shareholders. Accordingly, no federal income tax provision is required.
D. Dividends and Distributions to Shareholders -- The Fund records
dividends and distributions to its shareholders on the record date.
E. Organizational Expenses -- The Fund has reimbursed the Manager for
$135,000 of organizational expenses. The reimbursed expenses have been
deferred and are being amortized by the Fund on the straight-line method
over a period of five years from the commencement of operations.
2. INVESTMENT MANAGEMENT AGREEMENT -- Pursuant to an Investment Management
Agreement (the "Agreement") with Dean Witter InterCapital Inc. (the "Investment
Manager"), formerly the InterCapital Division of Dean Witter Reynolds Inc., the
Fund pays its Investment Manager a management fee accrued daily and payable
monthly by applying the annual rate of 0.35% 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 office space and facilities,
<PAGE> 6
DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)
- --------------------------------------------------------------------------------
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.
Previously the shares were distributed by Dean Witter Reynolds Inc. ("DWR"),
also an affiliate of the Investment Manager, exclusively through its own sales
organization. To compensate the Distributor, the Fund adopted a Plan of
Distribution (the "Plan") pursuant to Rule 12b-1 under the Act with the
Distributor whereby the Distributor finances certain activities in connection
with the distribution of shares of the Fund.
Under the Plan, the Distributor bears the expense of all promotional and
distribution related activities on behalf of the Fund, except for expenses that
the Trustees determine to reimburse as described below. The following activities
and services may be provided by the Distributor under the Plan; (1) compensation
to sales representatives of the Distributor and other broker-dealers; (2) sales
incentives and bonuses to sales representatives and to marketing personnel in
connection with promoting sales of the Fund's shares; (3) expenses incurred in
connection with promoting sales of the Fund's shares; (4) preparing and
distributing sales literature; and (5) providing advertising and promotional
activities, including direct mail solicitation and television, radio, newspaper,
magazine and other media advertisements.
The Fund is authorized to reimburse the Distributor for specific expenses
the Distributor incurs or plans to incur in promoting the distribution of the
Fund's shares. The amount of each monthly reimbursement payment may in no event
exceed an amount equal to a payment at the annual rate of 0.35% of the Fund's
average daily net assets during the month. For the six months ended November 30,
1993, the distribution fee accrued was at the annual rate of 0.35%.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES -- The cost of
purchases and the proceeds from sales of portfolio securities for the six months
ended November 30, 1993, excluding short-term investments, aggregated
$154,013,484 and $56,021,094, respectively.
Dean Witter Trust Company ("DWTC"), an affiliate of the Investment Manager
and Distributor, is the Fund's transfer agent. The Fund incurred transfer agent
fees and expenses of $110,058 with DWTC for the six months ended November 30,
1993, of which $14,168 was payable at November 30, 1993.
5. SHARES OF BENEFICIAL INTEREST -- Transactions in shares of beneficial
interest were as follows:
<TABLE>
<CAPTION>
For the six
months ended For the year ended
November 30, 1993 May 31, 1993
----------------------------- -----------------------------
Shares Amount Shares Amount
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Sold........................ 48,479,045 $ 501,946,180 83,302,728 $ 863,032,328
Reinvestment of dividends
and distributions......... 1,322,057 13,683,602 2,511,899 26,016,212
----------- ------------- ----------- -------------
49,801,102 515,629,782 85,814,627 889,048,540
Repurchased................. (37,522,140) (388,449,748) (80,582,390) (834,589,791)
----------- ------------- ----------- -------------
Net increase................ 12,278,962 $ 127,180,034 5,232,237 $ 54,458,749
----------- ------------- ----------- -------------
----------- ------------- ----------- -------------
</TABLE>
<PAGE> 7
DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
FINANCIAL HIGHLIGHTS (unaudited)
- --------------------------------------------------------------------------------
Selected data and ratios for a share of beneficial interest outstanding
throughout each period:
<TABLE>
<CAPTION>
For the period
For the six For the year August 13, 1991*
months ended ended through
November 30, 1993 May 31, 1993 May 31, 1992
----------------- ------------ ----------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period....... $ 10.34 $ 10.21 $ 10.00
----------------- ------------ ----------------
Net investment income...................... 0.26 0.54 0.44
Net realized and unrealized gain (loss) on
investments............................. (0.06) 0.13 0.20
----------------- ------------ ----------------
Total from investment operations........... 0.20 0.67 0.64
----------------- ------------ ----------------
Less dividends and distributions:
Dividends from net investment income....... (0.25) (0.53) (0.43)
Distribution from realized gains on
investments............................. -0- (0.01) -0-
----------------- ------------ ----------------
Total dividends and distributions.......... (0.25) (0.54) (0.43)
----------------- ------------ ----------------
Net asset value, end of period............. $ 10.29 $ 10.34 $ 10.21
----------------- ------------ ----------------
----------------- ------------ ----------------
TOTAL INVESTMENT RETURN...................... 5.63% 6.75% 6.55%(1)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)... $ 707,489 $584,206 $523,555
Ratio of expenses to average net assets.... 0.80%(2) 0.80% 0.79%(2)(3)
Ratio of net investment income to average
net assets.............................. 4.82%(2) 5.18% 5.49%(2)(3)
Portfolio turnover rate.................... 9% 21% 12%
</TABLE>
- ---------------
* Date of commencement of operations.
(1) Not Annualized.
(2) Annualized.
(3) If the Fund had borne all expenses that were assumed or waived by the
Investment Manager (Note 2), the above annualized expense ratio would have
been .81% ($.065 per share) and the above annualized net investment income
rate would have been 5.47% ($.437 per share).
See Notes to Financial Statements
<PAGE> 8
TRUSTEES
Jack F. Bennett
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. John E. Jeuck
Dr. Manuel H. Johnson
Paul Kolton
Michael E. Nugent
Albert T. Sommers
Edward R. Telling
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Sheldon Curtis
Vice President, Secretary and General Counsel
Rajesh K. Gupta
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
SHORT-TERM
U.S. TREASURY
TRUST
Semiannual Report
November 30, 1993
