<PAGE>
DEAN WITTER HEALTH SCIENCES TRUST TWO WORLD TRADE CENTER, NEW YORK, NEW YORK
10048
LETTER TO THE SHAREHOLDERS
DEAR SHAREHOLDER:
Calendar year 1994 proved to be an important year for the health care industry.
Unlike the previous two years in which the national debate focused on health
care reform, during 1994 health care reform lost its sense of urgency and moved
from center stage. However, the health care reform debate did increase the
public's knowledge and heighten consumer awareness of health care issues. More
importantly, it accelerated the private sector's move toward cost containment, a
process which had begun years earlier. In fact, by attempting to address all of
the issues concerning health care, the federal legislature actually forced the
private sector to examine and develop specific strategies to control costs,
thereby creating opportunities for niche companies such as the health
maintenance organizations (HMOs).
A large part of the volatility associated with the entire group of publicly-
traded companies in the health care industry had been generated by the
uncertainty surrounding potential federal legislation. With this uncertainty
removed, earnings and other key fundamentals should play an increasingly greater
role in determining stock price and investment potential over the next 6 to 12
months.
Performance and Portfolio Strategy
Earlier in the fiscal year, the Fund's performance was negatively impacted by
its high exposure to small and mid-cap stocks which remained out of favor
throughout 1994, as well as by its overweighting in the biotechnology sector. We
have readjusted this strategy for 1995 by expanding holdings of large cap stocks
such as Pfizer and Schering-Plough. In addition, we have reduced the Fund's
biotechnology holdings, which now account for 5 percent of the Fund's assets,
down from 12 percent a year ago. For the six-month period ended January 31,
1995, Dean Witter Health Sciences Trust provided a total return of 12.02
percent.
<PAGE>
DEAN WITTER HEALTH SCIENCES TRUST
LETTER TO THE SHAREHOLDERS, CONTINUED
Looking ahead, we are optimistic for the health care sector. Today, investor
psychology has shifted regarding health care stocks. Investors are once again
searching for investment opportunities in the area. As a matter of fact, health
care stocks started to outperform the market beginning with the third quarter of
1994, a trend we expect to see continue in 1995.
Many related industries like the generics, nursing homes, specialty medical
devices and selected biotechs are expected to perform well, while others, like
the U.S. drug companies, are likely to produce steady, but unspectacular,
earnings gains.
We appreciate your support of Dean Witter Health Sciences Trust and look forward
to continuing to serve your investment objectives in the future.
Very truly yours,
[LOGO]
CHARLES FIUMEFREDDO
CHAIRMAN OF THE BOARD
<PAGE>
DEAN WITTER HEALTH SCIENCES TRUST
PORTFOLIO OF INVESTMENTS JANUARY 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (98.1%)
BIOTECHNOLOGY (4.9%)
50,000 Agouron Pharmaceutical, Inc.*....... $ 750,000
70,000 Amgen, Inc.*........................ 4,453,750
30,000 Cell Genesys, Inc.*................. 191,250
200,000 Centocor, Inc.*..................... 3,475,000
80,000 Genzyme Corp.*...................... 2,820,000
60,000 Viagene, Inc.*...................... 307,500
---------------
11,997,500
---------------
COMMERCIAL SERVICES (0.7%)
70,000 ABR Information Services, Inc.*..... 1,452,500
50,000 Base Ten Systems Inc. (Class A)*.... 381,250
---------------
1,833,750
---------------
COMPUTER SOFTWARE (6.5%)
60,000 Cerner Corp.*....................... 2,670,000
70,000 Clinicom, Inc.*..................... 945,000
120,000 Gmis, Inc..*........................ 2,760,000
120,000 HBO & Co............................ 4,260,000
160,000 Medic Computer Systems, Inc.*....... 5,480,000
---------------
16,115,000
---------------
DRUGS (9.3%)
100,000 Allergan, Inc....................... 2,900,000
60,000 ALZA Corp.*......................... 1,410,000
30,000 Astra AB (ADR)*..................... 757,500
340,000 Astra AB, (Series "A" Free)
(Sweden)............................ 8,625,503
90,000 Biogen, Inc.*....................... 3,262,500
90,000 Chronimed, Inc.*.................... 1,113,750
145,000 Dura-Pharmaceuticals, Inc.*......... 1,776,250
30,000 Grupo Casa Autrey, S.A. de C.V.
(ADR)............................... 420,000
50,000 Guilford Pharmaceuticals, Inc.*..... 287,500
80,000 Mylan Laboratories, Inc............. 2,240,000
15,000 Noven Pharmaceuticals, Inc.*........ 114,375
---------------
22,907,378
---------------
DRUGS & HEALTHCARE (0.7%)
50,000 Abbott Laboratories................. 1,768,750
---------------
HEALTH CARE - MISCELLANEOUS (2.2%)
90,000 Sci-Med Life Systems, Inc.*......... 5,332,500
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
HEALTH CARE DIVERSIFIED (3.9%)
80,000 Access Health Marketing, Inc.*...... $ 1,200,000
20,000 Becton, Dickinson & Co.............. 1,050,000
90,000 Healthsouth Rehabilitation Corp.*... 3,420,000
151,000 Horizon Healthcare Corp.*........... 4,001,500
---------------
9,671,500
---------------
HEALTH CARE DRUGS (3.0%)
40,000 Pfizer, Inc......................... 3,270,000
40,000 Schering-Plough Corp................ 3,140,000
30,000 Upjohn Co........................... 1,008,750
---------------
7,418,750
---------------
HEALTH EQUIPMENT & SERVICES (13.1%)
40,000 Datascope Corp.*.................... 710,000
150,000 Healthcare Compare Corp.*........... 5,212,500
70,000 Medtronic, Inc...................... 4,156,250
100,000 Quantum Health Resources, Inc.*..... 3,025,000
100,000 Renal Treatment Centers, Inc.*...... 2,162,500
100,000 Rotech Medical Corp.*............... 2,750,000
150,000 Shared Medical Systems Corp......... 4,968,750
110,000 St. Jude Medical, Inc............... 4,180,000
60,000 Surgical Care Affiliates, Inc....... 1,245,000
25,500 Sybron Corp.*....................... 831,938
100,000 Vivra, Inc. .*...................... 3,025,000
---------------
32,266,938
---------------
HOSPITAL MANAGEMENT (10.8%)
60,000 Advocat, Inc.*...................... 742,500
40,000 American HomePatient, Inc.*......... 1,010,000
130,050 Coram Healthcare Corp.*............. 2,779,819
65,000 Express Scripts, Inc. (Class A)*.... 2,047,500
130,000 Genesis Health Ventures, Inc.*...... 3,932,500
47,500 Health Management, Inc.*............ 908,437
110,000 Homedco Group, Inc.*................ 4,537,500
75,000 Mariner Health Group, Inc.*......... 1,396,875
45,000 Medcath, Inc.*...................... 596,250
15,000 Orthodontic Centers of America,
Inc.*............................... 213,750
110,000 Pediatric Services of America,
Inc.*............................... 2,062,500
100,000 PhyCor, Inc.*....................... 2,925,000
60,000 Physician Reliance Network, Inc.*... 1,185,000
110,000 Theratx, Inc.*...................... 2,337,500
---------------
26,675,131
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER HEALTH SCIENCES TRUST
PORTFOLIO OF INVESTMENTS JANUARY 31, 1995 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
HOSPITAL SUPPLY (1.8%)
80,000 Arrow International, Inc............ $ 2,480,000
60,000 Boston Scientific Corp.*............ 1,110,000
60,000 Circon Corp.*....................... 915,000
---------------
4,505,000
---------------
MANUFACTURING (0.6%)
60,000 Fisher Scientific International,
Inc................................. 1,545,000
---------------
MEDICAL EQUIPMENT (3.3%)
130,000 Heart Technology, Inc.*............. 2,535,000
90,000 Sofamor / Danek Group, Inc.*........ 1,451,250
40,000 Steris Corp.*....................... 1,400,000
100,000 Summit Technology, Inc.*............ 2,775,000
---------------
8,161,250
---------------
MEDICAL PRODUCTS & SUPPLIES (13.5%)
60,000 Amsco International, Inc.*.......... 825,000
60,000 Angeion Corp.*...................... 225,000
120,000 Biomet, Inc.*....................... 1,800,000
60,000 Cordis Corp.*....................... 3,750,000
38,000 Corvita Corp.*...................... 175,750
40,000 Dentsply International, Inc......... 1,370,000
60,000 EP Technologies, Inc.*.............. 637,500
40,000 Hologic, Inc.*...................... 600,000
180,000 I-Stat Corp.*....................... 3,240,000
200,000 IDEXX Laboratories, Inc.*........... 6,950,000
50,000 Invacare Corp....................... 1,712,500
100,000 Lunar Corp.*........................ 1,625,000
115,000 Medisense, Inc.*.................... 2,185,000
60,000 Minntech Corp....................... 915,000
40,000 Newvision Technology, Inc.
(Units)+*........................... 220,000
50,000 Omnicare, Inc....................... 2,318,750
15,000 Perseptive Technologies II Corp.*... 78,750
30,000 Respironics, Inc.*.................. 795,000
110,000 Target Therapeutics, Inc.*.......... 3,547,500
50,000 Uromed Corp.*....................... 287,500
---------------
33,258,250
---------------
MEDICAL SERVICES (15.7%)
100,000 Abbey Healthcare Group, Inc.*....... 2,525,000
70,000 Careline, Inc.*..................... 463,750
20,000 Gulf South Medical Supply, Inc.*.... 765,000
139,000 Health Care & Retirement Corp.*..... 4,065,750
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
120,000 Health Management Systems, Inc.*.... $ 3,420,000
60,000 Healthsource, Inc.*................. 2,565,000
50,000 Humana, Inc.*....................... 1,143,750
100,000 Integrated Health Services, Inc..... 3,750,000
80,000 Lincare Holdings, Inc.*............. 2,060,000
110,000 Medaphis Corp.*..................... 5,500,000
10,000 Neopath, Inc.*...................... 117,500
20,000 Ostex International, Inc.*.......... 190,000
10,000 Oxford Health Plans, Inc.*.......... 847,500
30,000 Pacific Physician Services, Inc.*... 412,500
90,000 Physicians Health Services, Inc.
(Class A)*.......................... 2,610,000
40,000 Quintiles Transnational Corp.*...... 1,220,000
50,000 Sierra Health Services, Inc.*....... 1,518,750
60,000 Sun Healthcare Group, Inc.*......... 1,597,500
128,000 Vencor, Inc.*....................... 3,904,000
---------------
38,676,000
---------------
MULTI-INSURANCE (0.6%)
50,000 Emphesys Financial Group, Inc....... 1,581,250
---------------
PHARMACEUTICALS (5.0%)
100,000 A.L. Pharma, Inc. (Class A)......... 1,950,000
120,000 Biochem Pharma, Inc.*............... 1,755,000
80,000 Biocraft Laboratories, Inc.......... 1,420,000
75,000 Biovail Corporation
International*...................... 618,750
9,450 Genzyme Corp.*...................... 42,525
60,000 Gilead Sciences, Inc.*.............. 765,000
20,000 Matrix Pharmaceuticals, Inc.*....... 195,000
100,000 Roberts Pharmaceutical Corp.*....... 3,200,000
100,000 Watson Pharmaceuticals, Inc.*....... 2,450,000
---------------
12,396,275
---------------
RETAIL - DRUG STORES (2.5%)
100,000 Eckerd Corp.*....................... 2,625,000
100,000 Revco (D.S.), Inc.*................. 2,225,000
50,000 Rite Aid Corp....................... 1,256,250
---------------
6,106,250
---------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $209,701,579)...... 242,216,472
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER HEALTH SCIENCES TRUST
PORTFOLIO OF INVESTMENTS JANUARY 31, 1995 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ------------------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENT (2.2%)
REPURCHASE AGREEMENT
$ 5,473 The Bank of NEW YORK 5.50% DUE
02/01/95 (dated 01/31/95; proceeds
$5,473,524; collateralized by
$5,524,112 U.S. Treasury Note 3.875%
due 02/28/95 valued at $5,606,222)
(Identified Cost $5,472,688)........ $ 5,472,688
---------------
TOTAL INVESTMENTS
(IDENTIFIED COST
$215,174,267)(A)............ 100.3% 247,689,160
LIABILITIES IN EXCESS OF
CASH AND OTHER ASSETS....... (0.3) (734,044)
----- ------------
NET ASSETS.................. 100.0% $246,955,116
----- ------------
----- ------------
<FN>
- ---------------------
ADR American Depository Receipt.
* Non-income producing security.
+ Consists of more than one class of securities traded together as a unit;
generally stocks with attached warrants.
(a) The aggregate cost for federal income tax purposes is $215,625,909; the
aggregate gross unrealized appreciation is $37,420,070 and the aggregate
gross unrealized depreciation is $5,356,819, resulting in net unrealized
appreciation of $32,063,251.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER HEALTH SCIENCES TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $215,174,267)............................. $247,689,160
Cash........................................................ 11,160
Receivable for:
Investments sold........................................ 3,237,398
Shares of beneficial interest sold...................... 2,878,084
Dividends............................................... 29,900
Interest................................................ 836
Deferred organizational expenses............................ 88,545
Prepaid expenses and other assets........................... 77,915
------------
TOTAL ASSETS........................................... 254,012,998
------------
LIABILITIES:
Payable for:
Investments purchased................................... 6,219,790
Shares of beneficial interest repurchased............... 293,320
Investment management fee............................... 209,456
Plan of distribution fee................................ 209,456
Accrued expenses and other payables......................... 125,860
------------
TOTAL LIABILITIES...................................... 7,057,882
------------
NET ASSETS:
Paid-in-capital............................................. 224,169,897
Net unrealized appreciation................................. 32,514,893
Accumulated net investment loss............................. (2,513,063)
Accumulated net realized loss............................... (7,216,611)
------------
NET ASSETS............................................. $246,955,116
------------
------------
NET ASSET VALUE PER SHARE,
23,661,903 SHARES OUTSTANDING (UNLIMITED SHARES AUTHORIZED
OF $.01 PAR VALUE)........................................
$10.44
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER HEALTH SCIENCES TRUST
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JANUARY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Dividends (net of $1,834 foreign withholding tax)........... $ 288,896
Interest.................................................... 32,731
-----------
TOTAL INCOME........................................... 321,627
-----------
EXPENSES
Plan of distribution fee.................................... 1,233,676
Investment management fee................................... 1,233,676
Transfer agent fees and expenses............................ 209,072
Professional fees........................................... 38,109
Shareholder reports and notices............................. 33,884
Custodian fees.............................................. 28,786
Organizational expenses..................................... 16,244
Trustees' fees and expenses................................. 15,893
Registration fees........................................... 11,918
Other....................................................... 6,432
-----------
TOTAL EXPENSES......................................... 2,827,690
-----------
NET INVESTMENT LOSS.................................... (2,506,063)
-----------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain........................................... 11,466,488
Net change in unrealized appreciation....................... 18,406,586
-----------
TOTAL GAIN............................................. 29,873,074
-----------
NET INCREASE................................................ $27,367,011
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER HEALTH SCIENCES TRUST
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS FOR THE YEAR
ENDED ENDED
JANUARY 31, 1995 JULY 31,
(UNAUDITED) 1994
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss......................................... $ (2,506,063) $ (5,352,608)
Net realized gain........................................... 11,466,488 1,562,522
Net change in unrealized appreciation....................... 18,406,586 6,227,017
------------------ ------------
NET INCREASE........................................... 27,367,011 2,436,931
------------------ ------------
Net decrease from transactions in shares of beneficial
interest.................................................. (8,985,249) (5,509,664)
TOTAL INCREASE (DECREASE)............................... 18,381,762 (3,072,733)
------------------ ------------
NET ASSETS:
Beginning of period......................................... 228,573,354 231,646,087
------------------ ------------
END OF PERIOD
(INCLUDING ACCUMULATED NET INVESTMENT LOSS OF $2,513,063
AND $7,000, RESPECTIVELY)................................ $246,955,116 $228,573,354
------------------ ------------
------------------ ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER HEALTH SCIENCES TRUST
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1995 (UNAUDITED)
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter Health Sciences Trust (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 organized as a
Massachusetts business trust on May 26, 1992 and commenced operations on October
30, 1992.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) an equity security listed or traded on the
New York or American 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; (2) all other portfolio
securities for which over-the-counter market quotations are readily available
are valued at the latest available bid price prior to the time of valuation; (3)
when market quotations are not readily available, including circumstances under
which it is determined by 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); (4) short-term debt
securities having a maturity date of more than sixty days at time of purchase
are valued on a mark-to-market basis until sixty days prior to maturity and
thereafter at amortized cost based on their value on the 61st day. Short-term
debt securities having a maturity date of sixty days or less at the time of
purchase are valued at amortized cost; and (5) the foreign currency market value
of investment securities are translated at the exchange rates prevailing at the
end of the period.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily and includes amortization of discounts on certain short-term securities.
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 ex-dividend date. The amount of
dividends and distributions from net investment
<PAGE>
DEAN WITTER HEALTH SCIENCES TRUST
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1995 (UNAUDITED) CONTINUED
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 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.
E. ORGANIZATIONAL EXPENSES -- Dean Witter InterCapital Inc. (the "Investment
Manager") paid the organizational expenses of the Fund in the amount of
approximately $162,000 which have been reimbursed for the full amount thereof.
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
annual rate of 1.0% 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 book 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 1.0% 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
<PAGE>
DEAN WITTER HEALTH SCIENCES TRUST
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1995 (UNAUDITED) CONTINUED
capital gain 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 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
Reynolds Inc., an affiliate of the Investment Manager and Distributor, and other
employees or selected 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 January 31,
1995, it received approximately $473,000 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 January 31, 1995 aggregated
$189,506,779 and $203,134,339, respectively.
For the six months ended January 31, 1995, the Fund incurred brokerage
commissions of $77,275 with Dean Witter Reynolds Inc. for portfolio transactions
executed on behalf of the Fund.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At January 31, 1995, the Fund had
transfer agent fees and expenses payable of approximately $35,000.
The Fund adopted an unfunded noncontributory defined benefit pension plan
covering all independent Trustees of the Fund who will have served as
independent Trustees for at least five years at the
<PAGE>
DEAN WITTER HEALTH SCIENCES TRUST
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1995 (UNAUDITED) CONTINUED
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 January 31, 1995, included in Trustees' fees and expenses
in the Statement of Operations amounted to $6,080. At January 31, 1995, the Fund
had an accrued pension liability of $13,020 which is included in accrued
expenses in the Statement of Assets and Liabilities.
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
JANUARY 31, 1995 JULY 31, 1994
---------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
Sold............................................................. 4,873,012 $ 49,745,690 8,331,492 $ 86,324,143
Repurchased...................................................... (5,748,574) (58,730,939) (8,906,748) (91,833,807)
----------- -------------- ----------- ------------
Net decrease..................................................... (875,562) $ (8,985,249) (575,256) $ (5,509,664)
----------- -------------- ----------- ------------
----------- -------------- ----------- ------------
</TABLE>
6. FEDERAL INCOME TAX STATUS
At July 31, 1994, the Fund had a net capital loss carryover of approximately
$18,231,000 which will be available through July 31, 2002 to offset future
capital gains to the extent provided by regulations.
At July 31, 1994, the Fund had permanent book/tax differences attributable to
net operating losses.
<PAGE>
DEAN WITTER HEALTH SCIENCES TRUST
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE SIX OCTOBER 30,
MONTHS ENDED FOR THE YEAR 1992*
JANUARY 31, 1995 ENDED THROUGH
(UNAUDITED) JULY 31, 1994 JULY 31, 1993
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period............................ $ 9.32 $ 9.22 $ 10.00
-------- -------- --------
Net investment loss................ (0.11) (0.22) (0.08)
Net realized and unrealized gain
(loss)............................ 1.23 0.32 (0.70)
-------- -------- --------
Total from investment operations... 1.12 0.10 (0.78)
-------- -------- --------
Net asset value, end of period..... $ 10.44 $ 9.32 $ 9.22
-------- -------- --------
-------- -------- --------
TOTAL INVESTMENT RETURN+........... 12.02%(1) 1.08% (7.80)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses........................... 2.29%(2) 2.30% 2.38%(2)
Net investment loss................ (2.03)%(2) (2.06)% (1.38)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands)........................ $246,955 $228,573 $231,646
Portfolio turnover rate............ 77%(1) 106% 55%(1)
<FN>
- ---------------------
* Commencement of operations.
+ Does not reflect the deduction of sales charge.
(1) Not annualized.
(2) Annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
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TRUSTEES
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
Ronald J. Worobel
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 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 HEALTH SCIENCES TRUST
[Photograph]
SEMIANNUAL REPORT JANUARY 31, 1995
