<PAGE>
ACTIVE ASSETS CALIFORNIA TAX-FREE TRUST Two World Trade Center, New York,
New York 10048
LETTER TO THE SHAREHOLDERS December 31, 1995
DEAR SHAREHOLDER:
The general direction of short-term municipal interest rates was lower during
1995. With economic indicators pointing toward modest growth and a lack of
inflationary pressures, the Federal Reserve Board acted twice during the
second half of the year to ease monetary policy. Yields for municipal
securities maturing in the six-month to one-year range declined in
conjunction with the Federal Reserve's easing moves. However, yields on money
market instruments with shorter maturities were more influenced by the
seasonal supply and demand pattern. At times, yields on variable-rate demand
obligations (VRDOs) and tax-exempt commercial paper with maturities under 30
days equaled or exceeded yields on securities with maturities longer than six
months.
Over the course of the year, The Bond Buyer One-Year Note Index, a widely
followed indicator of longer-term municipal money market rates, declined 135
basis points from 4.95 percent to 3.60 percent. At the end of 1995, the ratio
of the Index to the yield for one-year U.S. Treasury Bills was 69 percent,
unchanged from the end of 1994. A stable ratio means that this sector of the
municipal market performed equally with the taxable market for comparable
maturities.
At the short end of the tax-free money market maturity range, interest rates
remained sensitive to cash flows into and out of the market. Yields for
variable-rate demand obligations (VRDOs) with daily and weekly rate changes
were generous during periods of excess supply and relatively rich during
periods of unsatisfied demand. During the second half, weekly VRDO yields
moved between a low of 2.90 percent in early July when cash inflows were
strong and a high of 5.00 percent in December when cash outflows occurred.
PORTFOLIO MANAGEMENT AND PERFORMANCE
Active Assets California Tax-Free Trust produced an annualized return of 3.21
percent for the six-month period ended December 31, 1995. The Trust's net
assets totaled $355 million with 68 percent of the Trust's
<PAGE>
ACTIVE ASSETS CALIFORNIA TAX-FREE TRUST
LETTER TO THE SHAREHOLDERS December 31, 1995, continued
portfolio invested in VRDOs. California-exempt commercial paper and municipal
notes, the two other types of securities utilized in the portfolio, comprised
27 percent and 5 percent of the portfolio, respectively.
The Trust's weighted average maturity remained short to moderate with few
opportunities to pick up yield by extending maturity during the year. At the
same time, proposed changes in corporate treatment of tax-free debt made a
cautious approach desirable. At the end of December, the Trust's average
maturity was 38 days.
Portfolio holdings are continuously reviewed to maintain or improve
creditworthiness. During the past year, particular attention was devoted to
monitoring the credit quality of banks providing letters of credit and
liquidity facilities for our investments. Mounting concern about Japanese
banks prompted portfolio exposure to be virtually eliminated.
The Orange County, California, bankruptcy in December 1994, also influenced
investment selections. As a result, fewer commitments than in past years were
made during the summer to seasonal purchases of new one-year tax and revenue
anticipation notes (TRANs). Stringent credit criteria were applied to all
note purchases and detailed disclosure of municipal pool investment practices
was sought as part of the credit review process. California note exposure was
reduced from 15 percent to 5 percent of the portfolio during 1995.
LOOKING FORWARD
The slower pace of economic growth in 1995 and the Federal Reserve Board's
latest interest rate moves have improved market expectations. The outlook for
1996 points toward the possibility of further steps by the Federal Reserve to
ease monetary policy. If all other things were equal, the average maturity of
the Trust's investments might be extended in this economic environment.
However, tax reform proposals are likely to continue to receive publicity and
cloud the outlook for tax-exempt securities. In managing the Trust's
portfolio, we will maintain our emphasis on quality and liquidity in making
investment selections.
We appreciate your support of Active Assets California Tax-Free 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>
ACTIVE ASSETS CALIFORNIA TAX-FREE TRUST
PORTFOLIO OF INVESTMENTS December 31, 1995 (unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON DEMAND
THOUSANDS RATE+ DATE* VALUE
- ----------- ---------------------------------------------------------------- -------- ---------- --------------
<C> <S> <C> <C> <C>
CALIFORNIA TAX-EXEMPT SHORT-TERM VARIABLE RATE MUNICIPAL OBLIGATIONS
(67.0%)
$ 4,000 Big Bear Lake, Southwest Gas Corp 1993 Ser A (AMT) ............. 5.05% 01/08/96 $ 4,000,000
13,000 California Alternative Energy Finance Authority, GE Capital Corp
Arroyo
Energy Ser 1993 B (AMT) ...................................... 4.90 01/08/96 13,000,000
6,200 California Department of Water Resources, Central Valley Project
Ser N-V2 ...................................................... 4.90 01/08/96 6,200,000
California Health Facilities Financing Authority,
2,700 Catholic HealthCare West 1988 Ser A ........................... 4.85 01/08/96 2,700,000
3,800 Childrens Hospital of Orange County Ser 1991 (MBIA) ........... 4.75 01/08/96 3,800,000
8,800 Health Dimensions Inc Ser 1987 A .............................. 3.50 02/01/96 8,800,000
5,360 Huntington Memorial Hospital Ser 1985 ......................... 4.90 01/08/96 5,360,000
4,700 Kaiser Permanente Ser 1993 A .................................. 4.90 01/08/96 4,700,000
4,000 Memorial Health Services Ser 1994 ............................. 4.90 01/08/96 4,000,000
10,000 St Francis Medical Center (MBIA) 1995 Ser E ................... 4.85 01/08/96 10,000,000
5,300 St Francis Memorial Hospital Ser 1993 B ....................... 5.90 01/02/96 5,300,000
6,100 St Joseph Health System Ser 1991 B ............................ 5.90 01/02/96 6,100,000
5,000 Sutter Health Ser 1990 B ...................................... 5.85 01/02/96 5,000,000
2,300 Sutter Health Ser 1990 A ...................................... 5.90 01/02/96 2,300,000
2,655 California Housing Finance Agency, 1995 Ser E (AMT) ............ 4.60 02/01/96 2,655,000
California Pollution Control Financing Authority,
2,720 Chevron USA Ser 1983 .......................................... 4.00 11/15/96 2,727,753
4,895 Chevron USA Ser 1984 B ........................................ 4.25 06/15/96 4,898,340
1,200 Exxon Corp Ser 1989 ........................................... 5.80 01/02/96 1,200,000
1,750 Noranda-Grey Eagle Mines Inc 1984 Ser B ....................... 5.00 01/08/96 1,750,000
5,000 North County Recycling Center 1991 Ser B ...................... 4.95 01/08/96 5,000,000
2,100 Shell Oil Co 1991 Ser A ....................................... 5.90 01/02/96 2,100,000
6,000 Shell Oil Co 1994 Ser A & B ................................... 6.05 01/02/96 6,000,000
3,000 Southern California Edison Co 1986 Ser C ...................... 5.40 01/02/96 3,000,000
14,000 California Public Capital Improvements Financing Authority,
Pooled Ser 1988 C ............................................ 3.70 03/15/96 14,000,000
California Statewide Communities Development Authority,
3,400 House Ear Institute 1993 Ser A COPs ........................... 6.00 01/02/96 3,400,000
9,000 Kaiser Permanente Ser 1995 COPs ............................... 4.90 01/08/96 9,000,000
7,000 St Joseph Health System COPs .................................. 5.90 01/02/96 7,000,000
5,000 Contra Costa Transportation Authority, Sales Tax 1993 Ser A
(FGIC) ........................................................ 4.90 01/08/96 5,000,000
8,000 Foothill/Eastern Transportation Corridor Agency, Toll Road Ser
1995 B ........................................................ 4.75 01/08/96 8,000,000
10,000 Long Beach, Memorial Health Services Ser 1991 .................. 4.90 01/08/96 10,000,000
Los Angeles, Multi-Family
2,900 1985 Ser K .................................................... 4.40 01/08/96 2,900,000
5,200 1994 Ser A (AMT) .............................................. 6.25 01/02/96 5,200,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
ACTIVE ASSETS CALIFORNIA TAX-FREE TRUST
PORTFOLIO OF INVESTMENTS December 31, 1995 (unaudited) continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON DEMAND
THOUSANDS RATE+ DATE* VALUE
- ----------- ---------------------------------------------------------------- -------- ---------- --------------
<C> <S> <C> <C> <C>
$ 8,000 Los Angeles County Metropolitan Transportation Authority, Prop C
Sales Tax Refg Ser 1993 A (MBIA) ............................. 5.00% 01/08/96 $ 8,000,000
7,000 Newport Beach, Hoag Memorial Hospital/Presbyterian 1992 Ser A .. 5.90 01/02/96 7,000,000
4,600 Ontario Redevelopment Agency, Daisy XX Assoc Ltd Ser 1984 ...... 4.80 01/08/96 4,600,000
3,900 Redlands, Orange Village Apts 1988 Ser A (AMT) ................. 5.30 01/08/96 3,900,000
6,100 Sacramento County, Administration Center & Courthouse Ser 1990
COPs .......................................................... 4.75 01/08/96 6,100,000
2,800 San Jose-Santa Clara Clean Water Financing Authority, Sewer Ser
1995 B (FGIC) ................................................ 4.75 01/08/96 2,800,000
10,200 Santa Clara County-El Camino Hospital District Hospital
Facilities Authority, Valley Medical Center 1985 Ser A ....... 4.85 01/08/96 10,200,000
11,800 Southern California Public Power Authority, Transmission 1991
Refg Ser (AMBAC) ............................................. 4.75 01/08/96 11,800,000
3,965 Tri City Housing Finance Agency, Single Family Ser 1994 (AMT) .. 4.30 01/08/96 3,965,000
4,415 Turlock, Irrigation District Ser 1988 A ........................ 4.85 01/08/96 4,415,000
--------------
TOTAL CALIFORNIA TAX-EXEMPT SHORT-TERM VARIABLE RATE MUNICIPAL OBLIGATIONS
(Amortized Cost $237,871,093) ..................................................... 237,871,093
--------------
</TABLE>
<TABLE>
<CAPTION>
YIELD TO
PRINCIPAL MATURITY ON
AMOUNT IN COUPON MATURITY DATE OF
THOUSANDS RATE DATE PURCHASE VALUE
- --------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
CALIFORNIA TAX-EXEMPT COMMERCIAL PAPER (27.3%)
California Pollution Control Financing Authority,
Pacific Gas & Electric Co 1988 Ser C
$4,000 .............................................................. 3.65% 02/27/96 3.65% $4,000,000
5,500 .............................................................. 3.65 02/29/96 3.65 5,500,000
4,000 .............................................................. 3.55 03/20/96 3.55 4,000,000
3,500 Southern California Edison Ser 1985 A ......................... 3.60 02/26/96 3.60 3,500,000
Chula Vista, San Diego Gas & Electric Co Ser 1992 C (AMT)
5,000 .............................................................. 3.80 02/13/96 3.80 5,000,000
5,000 .............................................................. 3.65 02/20/96 3.65 5,000,000
3,000 Delmar Race Track Authority, 1993 BANs ......................... 3.50 02/26/96 3.50 3,000,000
Long Beach Harbor Department, Ser A (AMT)
4,000 .............................................................. 3.70 02/16/96 3.70 4,000,000
4,000 .............................................................. 3.50 03/07/96 3.50 4,000,000
Los Angeles Department of Water & Power, Electric
5,000 .............................................................. 3.45 01/29/96 3.45 5,000,000
6,700 .............................................................. 3.70 02/22/96 3.70 6,700,000
4,000 Los Angeles Harbor Department, Ser A (AMT) ..................... 4.00 01/12/96 4.00 4,000,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
ACTIVE ASSETS CALIFORNIA TAX-FREE TRUST
PORTFOLIO OF INVESTMENTS December 31, 1995 (unaudited) continued
<TABLE>
<CAPTION>
YIELD TO
PRINCIPAL MATURITY ON
AMOUNT IN COUPON MATURITY DATE OF
THOUSANDS RATE DATE PURCHASE VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
Metropolitan Water District of Southern California, Ser 1995 B
$5,000 .............................................................. 3.30% 02/15/96 3.30% $ 5,000,000
6,500 .............................................................. 3.55 03/12/96 3.55 6,500,000
Sacramento Municipal Utility District, Ser I
4,000 .............................................................. 3.35 03/13/96 3.35 4,000,000
4,000 .............................................................. 3.55 03/21/96 3.55 4,000,000
San Diego, San Diego Gas & Electric Co Ser 1995 B
5,000 .............................................................. 3.65 01/31/96 3.65 5,000,000
2,500 .............................................................. 3.60 01/31/96 3.60 2,500,000
West & Central Basin Financing Authority, West Basin Municipal
Water District TRANs
4,000 .............................................................. 3.70 02/09/96 3.70 4,000,000
4,000 .............................................................. 3.70 02/14/96 3.70 4,000,000
Puerto Rico
Puerto Rico Government Development Bank,
4,000 .............................................................. 3.60 02/08/96 3.60 4,000,000
4,000 .............................................................. 3.60 02/15/96 3.60 4,000,000
--------------
TOTAL CALIFORNIA TAX-EXEMPT COMMERCIAL PAPER
(Amortized Cost $96,700,000)..................................................................... 96,700,000
--------------
CALIFORNIA TAX-EXEMPT SHORT-TERM MUNICIPAL NOTES (5.1%)
9,000 California School Cash Reserve Program Authority, 1995 Pool
Ser A, dtd 07/05/95 ........................................... 4.75 07/03/96 3.75 9,044,057
9,000 Santa Barbara County, 1995-1996 Ser A TRANs, dtd 07/06/95 ...... 4.50 07/05/96 3.79 9,031,615
--------------
TOTAL CALIFORNIA TAX-EXEMPT SHORT-TERM MUNICIPAL NOTES
(Amortized Cost $18,075,672)..................................................................... 18,075,672
--------------
TOTAL INVESTMENTS
(Amortized Cost $352,646,765) (a) ................................................. 99.4% 352,646,765
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES ..................................... 0.6 2,242,124
--------------
NET ASSETS ......................................................................... 100.0% $354,888,889
==============
</TABLE>
- ------------
AMT Alternative Minimum Tax.
BANs Bond Anticipation Notes.
COPs Certificates of Participation.
TRANs Tax and Revenue Anticipation Notes.
+ Rate shown is rate in effect at December 31, 1995.
* Date in which the principal amount can be recovered through demand.
(a) Cost is the same for federal income tax purposes.
Bond Insurance:
- ---------------
AMBAC AMBAC Indemnity Corporation.
FGIC Financial Guaranty Insurance Company.
MBIA Municipal Bond Investors Assurance Corporation.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
ACTIVE ASSETS CALIFORNIA TAX-FREE TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value (amortized
cost $352,646,765) ........................... $352,646,765
Cash .......................................... 485,214
Interest receivable ........................... 1,970,152
Deferred organizational expenses .............. 8,118
Prepaid expenses .............................. 33,186
--------------
TOTAL ASSETS ................................ 355,143,435
--------------
LIABILITIES:
Payable for:
Investment management fee .................... 142,228
Plan of distribution fee ..................... 28,446
Shares of beneficial interest repurchased .. 1,079
Accrued expenses .............................. 82,793
--------------
TOTAL LIABILITIES ........................... 254,546
--------------
NET ASSETS:
Paid-in-capital ............................... 354,905,674
Accumulated undistributed net investment
income ....................................... 172
Accumulated net realized loss ................. (16,957)
--------------
NET ASSETS .................................. $354,888,889
==============
NET ASSET VALUE PER SHARE,
354,905,674 shares outstanding (unlimited
shares authorized of $.01 par value) ........ $ 1.00
==============
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME ................. $6,231,492
------------
EXPENSES
Investment management fee ...... 852,478
Plan of distribution fee ........ 170,507
Transfer agent fees and expenses 38,691
Professional fees ............... 30,946
Trustees' fees and expenses .... 20,894
Registration fees ............... 18,221
Shareholder reports and notices 12,573
Custodian fees .................. 11,137
Organizational expenses ......... 4,632
Other ........................... 1,907
------------
TOTAL EXPENSES BEFORE EXPENSE
OFFSET ......................... 1,161,986
LESS: EXPENSE OFFSET .......... (11,108)
------------
TOTAL EXPENSES AFTER EXPENSE
OFFSET ......................... 1,150,878
------------
NET INVESTMENT INCOME AND NET
INCREASE ........................ $5,080,614
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
ACTIVE ASSETS CALIFORNIA TAX-FREE TRUST
FINANCIAL STATEMENTS, continued
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS FOR THE YEAR
ENDED DECEMBER 31, ENDED JUNE 30,
1995 1995
- ------------------------------------------------------ ------------------ ---------------
<S> <C> <C>
(unaudited)
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income and net increase ................ $ 5,080,614 $ 8,592,974
Dividends from net investment income .................. (5,080,492) (8,593,044)
Net increase from transactions in shares of beneficial
interest ............................................. 41,322,580 25,060,313
------------------ ---------------
TOTAL INCREASE ...................................... 41,322,702 25,060,243
NET ASSETS:
Beginning of period ................................... 313,566,187 288,505,944
------------------ ---------------
END OF PERIOD
(Including undistributed net investment income of
$172 and $50, respectively) .......................... $354,888,889 $313,566,187
================== ===============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
ACTIVE ASSETS CALIFORNIA TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS December 31, 1995 (unaudited)
1. Organization and Accounting Policies
Active Assets California Tax-Free Trust (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a diversified,
open-end management investment company. The Trust
was organized as a Massachusetts business trust on July 10, 1991 and
commenced operations on November 12, 1991.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- Portfolio securities are valued at amortized
cost, which approximates market value.
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. The Trust amortizes premiums and accretes discounts over the life of
the respective securities. Interest income is accrued daily.
C. FEDERAL INCOME TAX STATUS -- It is the Trust's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable and nontaxable income to its
shareholders. Accordingly, no federal income tax provision is required.
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Trust records dividends
and distributions to shareholders as of the close of each business day.
E. ORGANIZATIONAL EXPENSES -- Dean Witter InterCapital Inc. (the "Investment
Manager") paid the organizational expenses of the Trust in the amount of
approximately $46,500 which have been reimbursed for the full amount thereof.
Such expenses have been deferred and are being amortized by the Trust on a
straight-line basis over a period not to exceed five years from the
commencement of operations.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement with the Investment Manager,
the Trust pays a management fee, accrued daily and payable monthly, by
applying the following annual rates to the net assets of the Trust determined
as of the close of each business day: 0.50% to the portion of the average
daily net assets not exceeding $500 million; 0.425% to the portion of the
average daily net assets exceeding $500 million but not exceeding $750
million; 0.375% to the portion of the average daily net assets exceeding $750
million but not exceeding $1 billion; 0.35% to the portion of the average
daily net
<PAGE>
ACTIVE ASSETS CALIFORNIA TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS December 31, 1995 (unaudited) continued
assets exceeding $1 billion but not exceeding $1.5 billion; 0.325% to the
portion of the average daily net assets exceeding $1.5 billion but not exceeding
$2 billion; 0.30% to the portion of the average daily net assets exceeding $2
billion but not exceeding $2.5 billion; 0.275% to the portion of the average
daily net assets exceeding $2.5 billion but not exceeding $3 billion; and 0.25%
to the portion of the average daily net assets exceeding $3 billion.
Under the terms of the Agreement, in addition to managing the Trust's
investments, the Investment Manager maintains certain of the Trust'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 Trust 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
Trust.
3. PLAN OF DISTRIBUTION
Dean Witter Distributors Inc. (the "Distributor"), an affiliate of the
Investment Manager, is the distributor of the Trust's shares and, in
accordance with a Plan of Distribution (the "Plan") pursuant to Rule 12b-1
under the Act, finances certain expenses in connection therewith.
Under the Plan, the Distributor bears the expense of all promotional and
distribution related activities on behalf of the Trust, except for expenses
that the Trustees determine to reimburse, as described below. The following
activities and services may be provided by the Distributor and other
broker-dealers under the Plan: (1) compensation to, and expenses 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 Trust's shares; (3) expenses incurred in connection with promoting
sales of the Trust'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 Trust is authorized to reimburse the Distributor for specific expenses
the Distributor incurs or plans to incur in promoting the distribution of the
Trust'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 0.15% of the
Trust's average daily net assets during the month. Expenses incurred by the
Distributor pursuant to the Plan in any fiscal year will not be reimbursed by
the Trust through payments accrued in any subsequent fiscal year. For the six
months ended December 31, 1995, the distribution fee was accrued at the
annual rate of 0.10%.
<PAGE>
ACTIVE ASSETS CALIFORNIA TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS December 31, 1995 (unaudited) continued
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales/maturities of portfolio
securities for the six months ended December 31, 1995 aggregated $364,901,915
and $334,718,000, respectively.
The Trust has an unfunded noncontributory defined benefit pension plan
covering all independent Trustees of the Trust who will have served as an
independent Trustee 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 cost for the six
months ended December 31, 1995 included in Trustees' fees and expenses in the
Statement of Operations, amounted to $12,716. At December 31, 1995, the Trust
had an accrued pension liability of $29,854 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 Trust's transfer agent. At December 31, 1995, the Trust
had transfer agent fees and expenses payable of approximately $8,300.
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest, at $1.00 per share, were as
follows:
<TABLE>
<CAPTION>
FOR THE SIX MONTHS FOR THE YEAR
ENDED ENDED
DECEMBER 31, 1995 JUNE 30, 1995
----------------------- -----------------
(UNAUDITED)
<S> <C> <C>
Shares sold ................................ 617,475,131 1,156,418,031
Shares issued in reinvestment of dividends 5,080,492 8,593,045
----------------------- -----------------
622,555,623 1,165,011,076
Shares repurchased ......................... (581,233,043) (1,139,950,763)
----------------------- -----------------
Net increase in shares outstanding ........ 41,322,580 25,060,313
======================= =================
</TABLE>
6. FEDERAL INCOME TAX STATUS
At June 30, 1995, the Trust had a capital loss carryover of approximately
$16,900 of which $16,000 will be available through June 30, 2002 and $900
will be available through June 30, 2003 to offset future capital gains to the
extent provided by regulations.
<PAGE>
ACTIVE ASSETS CALIFORNIA TAX-FREE 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 FOR THE PERIOD
FOR THE SIX JUNE 30 NOVEMBER 12, 1991*
MONTHS ENDED ------------------------------- THROUGH
DECEMBER 31, 1995 1995 1994 1993 JUNE 30, 1992
- ----------------------------------------------------------------------------------------------------------------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------------- ---------- ---------- ---------- ------------------
Net investment income ..................... 0.015 0.029 0.018 0.018 0.017
Less dividends from net investment income (0.015) (0.029) (0.018) (0.018) (0.017)
----------------- ---------- ---------- ---------- ------------------
Net asset value, end of period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
================= ========== ========== ========== ==================
TOTAL INVESTMENT RETURN ................... 1.49%(1) 2.89% 1.78% 1.84% 1.66%(1)
RATIOS TO AVERAGE NET ASsETS:
Expenses .................................. 0.68%(4) 0.67% 0.68% 0.71% 0.56%(2)(3)
Net investment income ..................... 2.97% 2.86% 1.77% 1.82% 2.42%(2)(3)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands .. $354,889 $313,566 $288,506 $202,149 $170,364
</TABLE>
- ------------
* Commencement of operations.
(1) Not annualized.
(2) Annualized.
(3) If the Trust had borne all expenses that were assumed or waived by
the Investment Manager, the above annualized expense and net
investment income ratios would have been 0.80% and 2.18%,
respectively.
(4) The above annualized expense ratio would have been 0.67% which
reflects 0.01% effect for custody cash credits.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TRUSTEES
- -----------------------------------------
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
Katherine H. Stromberg
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 Trust 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 Trust. For more detailed information about the Trust, its officers and
trustees, fees, expenses and other pertinent information, please see
the prospectus of the Trust.
This report is not authorized for distribution to prospective investors
in the Trust unless preceded or accompanied by an effective prospectus.
A C T I V E
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A S S E T S (REGISTERED TRADEMARK)
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A C C O U N T
Active Assets
California
Tax-Free Trust
Semiannual Report
December 31, 1995
