<PAGE> 1
DEAN WITTER LIMITED TERM MUNICIPAL TRUST Two World Trade Center,
LETTER TO THE SHAREHOLDERS September 30, 1996 New York, New York 10048
DEAR SHAREHOLDER:
We are pleased to present the semiannual report on the operations of Dean Witter
Limited Term Municipal Trust for the six-month period ended September 30, 1996.
Stronger economic growth and the potential threat of inflation shifted the tone
of the fixed-income markets from bullish to bearish in early 1996. This change
in market psychology was confirmed in March, when a surprisingly large increase
in payroll employment was reported. Other indicators of economic activity and
rising commodity prices added to this concern. As a result, investors
anticipated that the Federal Reserve Board might reverse its pattern of
reductions in the federal-funds rate which began in 1995. The bond market
reacted to these expectations by pushing long-term yields higher. More than
three-quarters of the rise was attributed to market weakness on the days that
strong monthly employment figures were reported.
MUNICIPAL MARKET CONDITIONS
Between August 1995 and February 1996, intermediate-term yields, as measured by
10-year double "A" rated general obligation bonds, declined 65 basis points from
5.15 percent to 4.50 percent. Yields subsequently moved higher, reaching 5.40
percent in June. By September, yields stood at 5.05 percent. Comparatively,
yields on 1-year municipal notes increased from 3.30 percent to 3.85 percent
over the six-month period. In September, the yield curve pickup for extending
maturities from 1 to 10 years was 120 basis points.
As the risk diminished that flat-tax proposals would cause a radical change in
the tax code, tax-exempt bonds outperformed U.S. Treasury securities. The ratio
of 10-year double "A" rated general obligation bond yields to 10-year U.S.
Treasury yields, which began the year at 85 percent, declined to 76 percent by
the end of September. A declining ratio means that municipal bond prices were
stronger than U.S. Treasury prices.
<PAGE> 2
DEAN WITTER LIMITED TERM MUNICIPAL TRUST
LETTER TO THE SHAREHOLDERS September 30, 1996, continued
The municipal market also benefited from steady demand. In addition to regular
maturities and calls for redemption this year, it has been estimated that
investors also face the retirement of more than $60 billion of previously
refunded debt. On the supply side, new issues increased 19 percent to $128
billion during the first nine months of 1996. However, as interest rates rose,
underwritings were frequently postponed and the pace of activity slowed.
FUND PERFORMANCE AND PORTFOLIO STRUCTURE
Dean Witter Limited Term Municipal Trust's total return for the six months ended
September 30, 1996, was 1.84 percent. Tax-free dividends totaling approximately
$0.20 per share were distributed. At the conclusion of the period, the Fund's
30-day SEC yield was 4.00 percent and its distribution rate was 3.91 percent.
Although the Fund experienced moderate redemptions during the period, the
portfolio's coupon and maturity structure was maintained. At the end of
September, intermediate-term municipal bonds represented 91 percent of net
assets and short-term investments represented eight percent. The portfolio was
diversified among 14 sectors and 38 separate issuers. The five largest municipal
sectors at the end of the period were: general obligation, education, hospital,
transportation and water/sewer. These sectors represented half of the Fund's
investments. The portfolio's weighted average maturity and duration were 6.8
years and 5.5 years, respectively. Bonds subject to the alternative minimum tax
(AMT) accounted for 16 percent of net assets. At the end of September the Fund
had net assets of $65.5 million. The portfolio also maintained high
CREDIT RATINGS as of September 30, 1996
(% of Total Long-Term Portfolio)
A or A 34%
Aaa or AAA 31%
Aa or AA 24%
Baa or BBB 8%
Not Rated 3%
As measured by Standard & Poor's Corp. at Moody's Investers Services, Inc.
FIVE LARGEST SECTORS as of September 30, 1996
(% of Net Assets)
Education 11%
General Obligations 11%
Water &Sewer 10%
Hospital 9%
Transportation 9%
Other 50%
Portfolio Stracture is subject to change
<PAGE> 3
DEAN WITTER LIMITED TERM MUNICIPAL TRUST
LETTER TO THE SHAREHOLDERS September 30, 1996, continued
quality with an average rating of double "A", as measured by Moody's Investors
Service, Inc. or Standard & Poor's Corp.
LOOKING AHEAD
The balance between the supply of new issues and demand created by maturities
are expected to remain positive for the municipal market. Ten-year double "A"
rated general obligation municipal bonds currently yield 76 percent of the yield
on U.S. Treasury securities and may be expected to move in tandem with the
Treasury market. Although municipal performance relative to Treasuries has
improved, tax-exempt bonds could again be affected by market uncertainty if new
tax-reduction proposals surface.
We appreciate your ongoing support of Dean Witter Limited Term Municipal Trust
and look forward to continuing to serve your investment needs.
Very truly yours,
/s/ CHARLES A. FIUMEFREDDO
CHARLES A. FIUMEFREDDO
Chairman of the Board
<PAGE> 4
DEAN WITTER LIMITED TERM MUNICIPAL TRUST
PORTFOLIO OF INVESTMENTS September 30, 1996 (unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS (90.6%)
General Obligation (10.6%)
$ 2,000 Wilmington, Delaware, Refg Ser 1993 B (FGIC)............................. 4.60 % 07/01/04 $ 1,951,220
1,000 Honolulu, Hawaii, Refg Ser 1993 B........................................ 5.00 10/01/03 1,010,590
1,000 Rosemont, Illinois, Ser 1993 B........................................... 5.30 12/01/04 1,011,820
2,000 Massachusetts, Refg Ser 1993 C........................................... 4.80 08/01/03 1,989,520
1,000 Massillon City School District, Ohio, Refg Ser 1994 (AMBAC).............. 4.70 12/01/05 970,210
------- ---------
7,000 6,933,360
------- ---------
Educational Facilities Revenue (10.6%)
1,500 University of Delaware, Ser 1993......................................... 4.90 11/01/02 1,507,770
1,500 Massachusetts Health & Educational Facilities Authority, Boston College
Ser K................................................................... 4.80 06/01/04 1,483,050
2,000 University of Minnesota, Ser 1993 A...................................... 4.80 08/15/03 1,976,880
2,000 New York State Dormitory Authority, State University Ser 1993 B.......... 5.25 05/15/05 1,967,240
------- ---------
7,000 6,934,940
------- ---------
Electric Revenue (4.5%)
1,000 Salt River Project Agricultural Improvement & Power District, Arizona,
Refg Ser 1993 B......................................................... 4.75 01/01/03 997,790
2,000 San Antonio, Texas, Electric & Gas Refg Ser 1994......................... 4.70 02/01/05 1,943,440
------- ---------
3,000 2,941,230
------- ---------
Hospital Revenue (9.0%)
2,000 California Statewide Communities Development Authority, Cedars-Sinai
Medical Center Ser 1993................................................. 4.70 11/01/03 1,970,340
1,000 Michigan Hospital Finance Authority, McLaren Obligated Group Ser 1993 A.. 5.00 10/15/04 970,990
1,000 Murray, Utah, IHC Hospitals Inc Refg Ser 1993 (AMBAC).................... 5.00 05/15/04 1,002,460
1,000 Fairfax County Industrial Development Authority, Virginia, Inova Health
System Foundation Refg Ser 1993 A....................................... 4.70 08/15/04 968,970
1,000 Wisconsin Health & Educational Facilities Authority, Hospital Sisters
Services Ser 1993 (MBIA)................................................ 5.00 06/01/03 998,810
------- ---------
6,000 5,911,570
------- ---------
Industrial Development/Pollution Control Revenue (4.6%)
1,000 Massachusetts Industrial Finance Agency, Eastern Edison Co Refg Ser
1993.................................................................... 5.875 08/01/08 969,430
2,000 Greenwood, Wisconsin, Land O'Lakes Inc (AMT)............................. 5.50 09/01/03 2,015,660
------- ---------
3,000 2,985,090
------- ---------
Mortgage Revenue - Multi-Family (3.2%)
2,130 Wisconsin Housing & Economic Development Authority, Ser 1993 B (AMT)..... 5.10 11/01/03 2,116,922
------- ---------
Mortgage Revenue - Single Family (3.0%)
2,000 Connecticut Housing Finance Authority, 1993 Subser F-1................... 4.90 05/15/04 1,996,860
------- ---------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 5
DEAN WITTER LIMITED TERM MUNICIPAL TRUST
PORTFOLIO OF INVESTMENTS September 30, 1996 (unaudited) continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Public Facilities Revenue (8.0%)
$ 1,400 St Paul Housing & Redevelopment Authority, Minnesota, Civic Center Ser
1993.................................................................... 4.80 % 11/01/03 $ 1,407,462
2,000 Regional Convention & Sports Complex Authority, Missouri, Refg Ser A
1993.................................................................... 4.75 08/15/04 1,927,320
2,000 Ohio Building Authority, Correctional Refg 1994 Ser A.................... 4.65 10/01/04 1,943,760
------- ---------
5,400 5,278,542
------- ---------
Resource Recovery Revenue (3.1%)
2,000 Northeast Maryland Waste Disposal Authority, Montgomery County Ser 1993 A
------- (AMT)................................................................... 5.50 07/01/01 2,047,620
---------
Student Loan Revenue (6.1%)
2,000 Montana Higher Education Student Assistance Corporation, Senior Ser 1993
B (AMT)................................................................. 5.10 12/01/01 2,014,120
2,000 South Carolina Education Assistance Authority, Ser 1993 A-1 (AMT)........ 5.00 09/01/03 1,979,200
------- ---------
4,000 3,993,320
------- ---------
Tax Allocation (6.0%)
1,910 Pleasanton Joint Powers Financing Authority, California, Reassessment Ser
1993 A.................................................................. 5.60 09/02/00 1,949,594
2,000 Sacramento Financing Authority, California, Refg Ser 1993 A (AMBAC)...... 4.85 11/01/04 1,982,520
------- ---------
3,910 3,932,114
------- ---------
Transportation Facilities Revenue (9.0%)
1,000 Delaware River & Bay Authority, Delaware & New Jersey, Ser 1993+......... 4.50 01/01/04 965,110
2,000 Washington Metropolitan Area Transit Authority, District of Columbia,
Maryland and Virginia, Refg Ser 1993 (FGIC)++........................... 4.90 01/01/05 1,975,560
1,000 Chicago, Illinois, Chicago-O'Hare Int'l Airport Refg Ser 1993 A.......... 4.80 01/01/05 958,840
2,000 Harris County, Texas, Toll Road Refg Ser 1994 (AMBAC).................... 4.85 08/15/05 1,967,920
------- ---------
6,000 5,867,430
------- ---------
Water & Sewer Revenue (9.8%)
1,000 Atlanta, Georgia, Water & Sewer Ser 1993................................. 4.50 01/01/04 966,870
1,000 Massachusetts Water Resources Authority, Ser 1993 C...................... 5.25 12/01/06 997,590
1,000 New York City Municipal Water Finance Authority, New York, Ser 1994 B.... 5.125 06/15/04 1,001,500
1,500 Pittsburgh Water & Sewer Authority, Pennsylvania, Refg Ser 1993 A
(FGIC).................................................................. 4.60 09/01/03 1,469,325
2,000 Southeastern Public Service Authority, Virginia, Regional Solid Waste
Refg Ser 1993 A (MBIA).................................................. 4.70 07/01/04 1,959,680
------- ---------
6,500 6,394,965
------- ---------
Other Revenue (3.1%)
2,000 Pennsylvania Intergovernmental Cooperation Authority, Special Tax Ser
------- 1993 (FGIC)............................................................. 5.05 06/15/04 2,004,360
---------
59,940 TOTAL MUNICIPAL BONDS (Identified Cost $59,631,352)............................................. 59,338,323
------- ---------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 6
DEAN WITTER LIMITED TERM MUNICIPAL TRUST
PORTFOLIO OF INVESTMENTS September 30, 1996 (unaudited) continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
SHORT-TERM MUNICIPAL OBLIGATION (8.1%)
$ 3,100 Chicago, Illinois, Chicago-O'Hare Int'l Airport American Airlines Inc.
Ser 1983 C (Demand 10/01/96)............................................ 4.00*% 12/01/17 $ 3,100,000
2,200 Louisiana Offshore Terminal Authority, LOOP Inc. 1992 A (Demand
10/01/96)............................................................... 3.70* 09/01/08 2,200,000
------- -----------
5,300 TOTAL SHORT-TERM MUNICIPAL OBLIGATIONS (Identified Cost $5,300,000)............................. 5,300,000
-------
-----------
$65,240 TOTAL INVESTMENTS (Identified Cost $64,931,352) (a).................................... 98.7% 64,638,323
=======
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES........................................... 1.3 860,120
------ -----------
NET ASSETS.............................................................................. 100.0% $65,498,443
====== ===========
- ---------------------
AMT Alternative Minimum Tax.
+ Joint exemption in Delaware and New Jersey.
++ Exemption in District of Columbia, Maryland and Virginia.
* Current coupon of variable rate security.
(a) The aggregate cost for federal income tax purposes approximates
identified cost. The aggregate gross unrealized appreciation was
$221,837 and the aggregate gross unrealized depreciation was
$514,866, resulting in net unrealized depreciation of $293,029.
Bond Insurance:
AMBAC AMBAC Indemnity Corporation.
FGIC Financial Guaranty Insurance Company.
MBIA Municipal Bond Investors Assurance Corporation.
</TABLE>
- --------------------------------------------------------------------------------
GEOGRAPHIC SUMMARY OF INVESTMENTS
Based on Market Value as a Percentage of Net Assets
September 30, 1996
<TABLE>
<S> <C>
Arizona.................. 1.5%
California............... 9.0
Connecticut.............. 3.0
Delaware................. 6.8
District of Columbia..... 3.0
Georgia.................. 1.5
Hawaii................... 1.5
Illinois................. 7.7
Louisiana................ 3.4
Maryland................. 6.1%
Massachusetts............ 8.5
Michigan................. 1.5
Minnesota................ 5.2
Missouri................. 2.9
Montana.................. 3.1
New York................. 4.5
New Jersey............... 1.5
Ohio..................... 4.4
Pennsylvania............. 5.3%
South Carolina........... 3.0
Texas.................... 6.0
Utah..................... 1.5
Virginia................. 4.5
Wisconsin................ 7.8
Joint Exemptions......... (4.5)
----
Total.................... 98.7%
====
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 7
DEAN WITTER LIMITED TERM MUNICIPAL TRUST
FINANCIAL STATEMENTS
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1996 (unaudited)
ASSETS:
Investments in securities, at value
(identified cost $64,931,352)......................................... $64,638,323
Cash................................................................... 98,651
Receivable for:
Interest........................................................... 814,297
Investments sold................................................... 100,918
Deferred organizational expenses....................................... 56,258
Prepaid expenses....................................................... 28,527
-----------
TOTAL ASSETS....................................................... 65,736,974
-----------
LIABILITIES:
Payable for:
Shares of beneficial interest repurchased.......................... 112,404
Dividend to shareholders........................................... 28,037
Investment advisory fee............................................ 27,603
Accrued expenses and other payables.................................... 70,487
-----------
TOTAL LIABILITIES.................................................. 238,531
-----------
NET ASSETS:
Paid-in-capital........................................................ 74,606,649
Net unrealized appreciation............................................ (293,029)
Accumulated net realized loss.......................................... (8,815,177)
-----------
NET ASSETS......................................................... $65,498,443
===========
NET ASSET VALUE PER SHARE,
6,595,460 shares outstanding
(unlimited shares authorized of $.01 par value)....................... $9.93
=====
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 8
DEAN WITTER LIMITED TERM MUNICIPAL TRUST
FINANCIAL STATEMENTS, continued
<TABLE>
<S> <C>
STATEMENT OF OPERATIONS
For the six months ended September 30, 1996 (unaudited)
NET INVESTMENT INCOME:
INTEREST INCOME......................................................... $1,664,604
----------
EXPENSES
Investment management fee............................................... 168,956
Professional fees....................................................... 27,783
Registration fee........................................................ 27,595
Shareholder reports and notices......................................... 24,778
Transfer agent fees and expenses........................................ 20,935
Organizational expenses................................................. 15,888
Trustees' fees and expenses............................................. 10,255
Custodian fees.......................................................... 4,843
Other................................................................... 5,490
----------
TOTAL EXPENSES BEFORE EXPENSE OFFSET................................ 306,523
LESS: EXPENSE OFFSET................................................ (4,832)
----------
TOTAL EXPENSES AFTER EXPENSE OFFSET................................. 301,691
----------
NET INVESTMENT INCOME............................................... 1,362,913
----------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized loss....................................................... (244,109)
Net change in unrealized depreciation................................... 49,425
----------
NET LOSS............................................................ (194,684)
----------
NET INCREASE............................................................ $1,168,229
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 9
DEAN WITTER LIMITED TERM MUNICIPAL TRUST
FINANCIAL STATEMENTS, continued
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
SEPTEMBER 30, 1996 MARCH 31, 1996
- --------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income................................ $ 1,362,913 $ 3,288,222
Net realized loss.................................... (244,109) (204,169)
Net change in unrealized depreciation................ 49,425 3,701,666
------------ -------------
NET INCREASE..................................... 1,168,229 6,785,719
Dividends from net investment income................. (1,379,357) (3,271,778)
Net decrease from transactions in shares of
beneficial interest................................. (7,056,364) (16,247,458)
------------ -------------
TOTAL DECREASE................................... (7,267,492) (12,733,517)
NET ASSETS:
Beginning of period.................................. 72,765,935 85,499,452
------------ -------------
END OF PERIOD
(Including undistributed net investment income of
$0 and $16,444, respectively).................... $ 65,498,443 $ 72,765,935
============ =============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 10
DEAN WITTER LIMITED TERM MUNICIPAL TRUST
NOTES TO FINANCIAL STATEMENTS September 30, 1996 (unaudited)
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter Limited Term Municipal Trust (the "Fund") is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund's investment objective is to provide a
high level of current income which is exempt from federal income tax, consistent
with the preservation of capital and prescribed standards of quality and
maturity. The Fund seeks to achieve this objective by investing primarily in
intermediate term, investment grade municipal securities. The Fund was organized
as a Massachusetts business trust on February 25, 1993 and commenced operations
on July 12, 1993.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ from
those estimates. The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- Portfolio securities are valued by an outside
independent pricing service approved by the Trustees. The pricing service has
informed the Fund that in valuing the portfolio securities, it uses both a
computerized matrix of tax-exempt securities and evaluations by its staff, in
each case based on information concerning market transactions and quotations
from dealers which reflect the bid side of the market each day. The portfolio
securities are thus valued by reference to a combination of transactions and
quotations for the same or other securities believed to be comparable in
quality, coupon, maturity, type of issue, call provisions, trading
characteristics and other features deemed to be relevant. 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 are accreted and premiums are amortized over the life of the
respective securities. 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 and nontaxable income to its
shareholders. Accordingly, no federal income tax provision is required.
<PAGE> 11
DEAN WITTER LIMITED TERM MUNICIPAL TRUST
NOTES TO FINANCIAL STATEMENTS September 30, 1996 (unaudited) continued
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to its shareholders on the record date. The amount of dividends
and distributions from net investment income and net realized capital gains are
determined in accordance with federal income tax regulations which may differ
from generally accepted accounting principles. These "book/tax" differences are
either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within the
capital accounts based on their federal tax-basis treatment; temporary
differences do not require 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 $141,529
which were reimbursed exclusive of $12,651 which was absorbed by the Investment
Manager. Such expenses have been deferred and are being amortized by the
straight-line method over a period not to exceed five years from the
commencement of operations.
2. INVESTMENT MANAGEMENT AGREEMENTS
Pursuant to an Investment Management Agreement, the Fund pays the Investment
Manager a management fee, accrued daily and payable monthly, by applying the
annual rate of 0.50% to the Fund's net assets 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, 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. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The proceeds from sales of portfolio securities, excluding short-term
investments, for the six months ended September 30, 1996 aggregated $11,325,515
respectively.
Dean Witter Trust Company, an affiliate of the Investment Manager, is the Fund's
transfer agent. At September 30, 1996, the Fund had transfer agent fees and
expenses payable of approximately $11,000.
<PAGE> 12
DEAN WITTER LIMITED TERM MUNICIPAL TRUST
NOTES TO FINANCIAL STATEMENTS September 30, 1996 (unaudited) continued
The Fund has 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 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 September 30, 1996
included in Trustees' fees and expenses in the Statement of Operations amounted
to $2,418. At September 30, 1996, the Fund had an accrued pension liability of
$18,090 which is included in accrued expenses in the Statement of Assets and
Liabilities.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
SEPTEMBER 30, 1996 MARCH 31, 1996
--------------------------- ---------------------------
(unaudited)
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold.......................................................... 1,188,175 $ 11,727,079 4,179,668 $ 41,325,172
Reinvestment of dividends..................................... 107,280 1,061,286 252,716 2,510,255
---------- ------------ ---------- ------------
1,295,455 12,788,365 4,432,384 43,835,427
Repurchased................................................... (2,010,478) (19,844,729) (6,068,284) (60,082,885)
---------- ------------ ---------- ------------
Net decrease.................................................. (715,023) $ (7,056,364) (1,635,900) $(16,247,458)
========== ============ ========== ============
</TABLE>
5. FEDERAL INCOME TAX STATUS
At March 31, 1996, the Fund had a net capital loss carryover of approximately
$8,571,000 of which $4,630,000 will be available through March 31, 2003 and
$3,941,000 will be available through March 31, 2004 to offset future capital
gains to the extent provided by regulations. To the extent that this carryover
loss is used to offset future capital gains, it is probable that the gains so
offset will not be distributed to shareholders.
<PAGE> 13
DEAN WITTER LIMITED TERM MUNICIPAL TRUST
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX FOR THE YEAR FOR THE YEAR JULY 12, 1993*
MONTHS ENDED ENDED ENDED THROUGH
SEPTEMBER 30, 1996 MARCH 31, 1996 MARCH 31, 1995 MARCH 31, 1994
- ------------------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period........... $ 9.95 $ 9.56 $ 9.61 $10.00
---------- -------- -------- --------
Net investment income.......................... 0.20 0.41 0.42 0.29
Net realized and unrealized gain (loss)........ (0.02) 0.39 (0.05) (0.39)
---------- -------- -------- --------
Total from investment operations............... 0.18 0.80 0.37 (0.10)
Less dividends from net investment income...... (0.20) (0.41) (0.42) (0.29)
---------- -------- -------- --------
Net asset value, end of period................. $ 9.93 $ 9.95 $ 9.56 $ 9.61
========== ======== ======== ========
TOTAL INVESTMENT RETURN+....................... 1.84%(1) 8.42% 4.01% (1.11)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses....................................... 0.90%(2)(5) 0.87%(4) 0.76% 0.31%(2)(3)
Net investment income.......................... 4.01%(2) 4.09% 4.41% 3.92%(2)(3)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands........ $65,498 $72,766 $85,499 $170,589
Portfolio turnover rate........................ --%(1) --% 2% 6%(1)
</TABLE>
- ---------------------
* Commencement of operations.
+ Calculated based on the net asset value as of the last business day of the
period.
(1) Not annualized.
(2) Annualized.
(3) If the Fund had borne all of its expenses that were assumed/reimbursed or
waived by the Investment Manager, the above annualized expense and net
investment income ratios would have been 0.75% and 3.48%, respectively.
(4) The above expense ratio would have been 0.86%, which reflects 0.01% effect
for custody cash credits.
(5) The above expense ratio was 0.89% after expense offset, which reflects
0.01% effect for custody cash credits.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 14
(This page has been left blank intentionally.)
<PAGE> 15
(This page has been left blank intentionally.)
<PAGE> 16
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. Manuel H. Johnson
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. Stomberg
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
LIMITED TERM
MUNICIPAL TRUST
[PHOTO]
SEMIANNUAL REPORT
APRIL 30, 1994
