<PAGE>
TCW/DW NORTH AMERICAN INTERMEDIATE INCOME TRUST
Two World Trade Center
New York, New York 10048
DEAR SHAREHOLDER:
- -----------------------------------------------------------------------------
For the six-month period ended July 31, 1995, TCW/DW North American
Intermediate Income Trust registered a total return of 9.48 percent, versus
10.24 percent for the Lehman Brothers Intermediate (5-10) U.S. Government
Index.
THE UNITED STATES
Throughout the period, the Fund maintained 80 percent of its assets in
U.S. government, mortgage-backed and corporate issues. Although second
quarter gross domestic product (GDP) growth should be the slowest of the
year, the Fund's investment adviser, TCW Funds Management, Inc. (TCW),
expects no major rebound in economic activity over the next six months
because excess inventories need to be reduced. In the process, the investment
adviser anticipates that inflation will be contained at 3 percent or less and
that GDP should grow by about 5 percent. With the five-year U.S. Treasury
note yielding 6 percent at the end of the second quarter, lower interest
rates are needed to maintain reasonable growth in 1996. Thus, the investment
adviser believes that further reductions of short-term interest rates are
likely, a process which the Federal Reserve Board initiated on July 6, with a
0.25 percentage point reduction in the federal funds rate, the rate banks
charge each other for overnight loans. The majority of the U.S. securities
held in the Fund carry intermediate- to longer-term maturities that would
benefit in a declining interest rate environment.
MEXICO
At the end of the period under review, the amount of the Fund's net assets
allocated to Mexico stood at 19 percent. To reduce currency risk, the Fund's
Mexican investments shifted from Mexican government (Cetes) to Mexican bonds
linked to the U.S. dollar (Tesobonos) in January 1995. Since they are
dollar-linked, Tesobonos have less foreign currency risk than Cetes. The
international stabilization package offered to Mexico in early 1995, with
funds from the United States, the Bank for International Settlements and the
International Monetary Fund, exceeded $48 billion. This money, along with the
investment adviser's confidence in the current government's ability to
address Mexico's fragile economic situation, formed the basis for the Fund's
continuing investment in Tesobonos throughout the period. During March, U.S.
rating agencies downgraded all of Mexico's ratable sovereign and corporate
debt. The rating on short-term Tesobonos held in the Fund's portfolio dropped
one notch from A1 to A2, as measured by Standard & Poor's Corp. It is
important to note that this rating still constitutes investment grade. In
May, the Mexican economy appeared to have stabilized as demonstrated by a
decrease in the current account deficit. By June, interest rates on Tesobonos
declined sharply as the country's trade surplus improved. The result was an
increase in Mexico's international reserves to $10.6 billion, which exceeded
outstanding Tesobonos for the first time in over one year.
CANADA
The Fund's Canadian position was liquidated in January 1995 primarily
because of increasing budgetary concerns. In addition, short-term interest
rates moved up sharply during the period, resulting in more expensive hedging
costs and rendering investment in Canada relatively unattractive relative to
alternatives in
<PAGE>
the U.S. In April, Moody's Investors Service, Inc. downgraded Canada's
domestic debt from AAA to AA1 and its external debt from AA1 to AA2. Although
the Fund remained out of Canada throughout most of the period, a nominal
position in Canadian bonds, representing 4 percent of the Fund's net assets,
was established in late July.
* * *
As outlined in a letter dated August 24, 1995, the Board of Trustees has
recommended that the Fund be liquidated and its assets distributed to
shareholders. Liquidation requires shareholder approval. A proxy statement
formally detailing the proposal will be mailed soon. In light of this
proposal, the Trustees have suspended all new sales of Fund shares. Your
right to redeem any or all of your Fund shares at any time is not affected by
this action. Also, the Fund will no longer make payments to Dean Witter
Distributors Inc., the distributor, under its Plan and Agreement of
Distribution under Rule 12b-1. We ask that you review the proxy statement
carefully upon receipt and vote on this proposal.
We appreciate your support of TCW/DW North American Intermediate Income
Trust and look forward to continuing to serve your financial needs and
objectives.
Very truly yours,
/s/ Charles A. Fiumefreddo
Charles A. Fiumefreddo
Chairman of the Board
<PAGE>
TCW/DW NORTH AMERICAN INTERMEDIATE INCOME TRUST
Portfolio of Investments July 31, 1995 (unaudited)
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS) COUPON RATE MATURITY DATE VALUE
- ----------- -------------------------------------------------------- ------------ ----------------- -----------
<S> <C> <C> <C> <C>
GOVERNMENT OBLIGATIONS (40.8%)
CANADIAN GOVERNMENT OBLIGATION (4.1%)
$200 Canada Government ....................................... 8.00 % 03/15/97 $ 147,842
-----------
U.S. GOVERNMENT OBLIGATIONS (36.7%)
100 U.S. Treasury Bond ...................................... 9.375 02/15/06 121,641
75 U.S. Treasury Bond ...................................... 8.875 08/15/17 91,500
225 U.S. Treasury Bond ...................................... 7.50 11/15/24 242,859
470 U.S. Treasury Note ...................................... 7.25 11/30/96 478,372
105 U.S. Treasury Note ...................................... 6.75 05/31/99 107,149
100 U.S. Treasury Note ...................................... 7.25 05/15/04 105,250
165 U.S. Treasury Note ...................................... 7.50 02/15/05 177,014
-----------
1,323,785
-----------
TOTAL GOVERNMENT OBLIGATIONS (IDENTIFIED COST $1,448,014) .............................. 1,471,627
-----------
MORTGAGE PASS-THROUGH CERTIFICATES (27.5%)
101 Federal Home Loan Mortgage Corp. ........................ 8.00 12/01/24 102,203
197 Federal Home Loan Mortgage Corp. ........................ 6.50 05/01/25 187,358
190 Federal National Mortgage Association ................... 8.00 08/01/24 193,244
101 Federal National Mortgage Association ................... 8.00 10/01/24 102,355
202 Government National Mortgage Association ................ 8.00 11/15/23 205,911
200 Government National Mortgage Association ................ 7.50 08/01/25 199,938
-----------
TOTAL MORTGAGE PASS-THROUGH CERTIFICATES (IDENTIFIED COST $969,495) .................. 991,009
-----------
CORPORATE BONDS (8.0%)
BANKS (0.8%)
30 Mellon Bank Corp. ....................................... 6.50 08/01/05 28,588
-----------
GAS TRANSMISSION (0.8%)
25 ANR Pipeline Co. ........................................ 9.625 11/01/21 29,646
-----------
INDUSTRIALS (3.2%)
25 May Department Stores Co. ............................... 8.375 08/01/24 25,681
35 Mead Corp. .............................................. 7.125 08/01/25 32,167
50 Northrop Grumman Corp. .................................. 9.375 10/15/24 55,337
-----------
113,185
-----------
TELECOMMUNICATIONS (0.8%)
30 Tele-Communications, Inc. ............................... 9.25 01/15/23 30,270
-----------
TRANSPORTATION (1.4%)
50 United Air Lines, Inc. .................................. 3.907+ 10/19/18 51,953
-----------
UTILITIES - ELECTRIC (1.0%)
35 Texas Utilities Electric Co. ............................ 7.875 04/01/24 34,393
-----------
TOTAL CORPORATE BONDS (IDENTIFIED COST $271,808) ...................................... 288,035
-----------
SHORT-TERM INVESTMENTS (28.5%)
MEXICAN GOVERNMENT SECURITIES (a) (18.8%)
690 Tesobonos ...............................................8.52-17.20 08/17/95-11/30/95 677,380
-----------
U.S. GOVERNMENT AGENCY (a) (5.5%)
200 Federal Home Loan Mortgage Corp. ........................ 5.65 08/21/95 199,373
</TABLE>
<PAGE>
TCW/DW NORTH AMERICAN INTERMEDIATE INCOME TRUST
Portfolio of Investments July 31, 1995 (unaudited) (continued)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS) COUPON RATE MATURITY DATE VALUE
- ----------- ----------- ------------- -----------
<S> <C> <C> <C>
REPURCHASE AGREEMENT (4.2%)
$152 The Bank of New York (dated 07/31/95; proceeds $152,626;
collateralized by $151,111 Federal Mortgage Acceptance
Corp. 9.50% due 04/01/01 valued at $158,399)
(Identified Cost $152,380) ............................. 5.8125% 08/01/95 $ 152,380
-----------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $1,022,939) .......................................................... 1,029,133
-----------
TOTAL INVESTMENTS (IDENTIFIED COST $3,712,256) (B) ................... 104.8% 3,779,804
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS ....................... (4.8) (172,765)
-----------
NET ASSETS ........................................................... 100.0% $3,607,039
===========
</TABLE>
+ Variable rate. Rate shown is the rate in effect at July 31, 1995.
(a) Securities were purchased on a discount basis. The interest rates
shown have been adjusted to reflect a money market equivalent yield.
The money market equivalent yields for Tesobonos does not reflect the
effect of exchange rates.
(b) The aggregate cost for federal income tax purposes is $3,712,256; the
aggregate gross unrealized appreciation is $75,458 and the aggregate
gross unrealized depreciation is $7,910, resulting in net unrealized
appreciation of $67,548.
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT JULY 31, 1995:
<TABLE>
<CAPTION>
CONTRACTS DELIVERY UNREALIZED
TO RECEIVE IN EXCHANGE FOR DATE APPRECIATION
- -------------- --------------- ---------- --------------
<S> <C> <C> <C>
CAD$ 210,000 $ 154,236 10/26/95 $722
==============
</TABLE>
See Notes to Financial Statements
<PAGE>
TCW/DW NORTH AMERICAN INTERMEDIATE INCOME TRUST
Financial Statements
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
July 31, 1995 (unaudited)
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $3,712,256) ............. $3,779,804
Foreign cash .............................. 546
Receivable for:
Interest ................................. 43,704
Shares of beneficial interest sold ...... 6,793
Deferred organizational expenses .......... 135,297
Receivable from affiliate ................. 10,200
Prepaid expenses and other assets ........ 23,573
------------
TOTAL ASSETS ............................ 3,999,917
------------
LIABILITIES:
Payable for:
Investments purchased .................... 199,751
Shares of beneficial interest repurchased 20,721
Plan of distribution fee ................. 2,138
Dividends to shareholders ................ 1,036
Organizational expenses ................... 135,297
Accrued expenses and other payables ...... 33,935
------------
TOTAL LIABILITIES ....................... 392,878
------------
NET ASSETS:
Paid-in-capital ........................... 3,934,186
Net unrealized appreciation ............... 68,270
Accumulated undistributed net investment
income ................................... 33,912
Accumulated net realized loss ............. (429,329)
------------
NET ASSETS .............................. $3,607,039
============
NET ASSET VALUE PER SHARE, 383,321 shares
outstanding (unlimited shares authorized
of $.01 par value) ....................... $9.41
============
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended July 31, 1995 (unaudited)
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME .................... $158,957
----------
EXPENSES
Professional fees .................. 25,521
Organizational expenses ........... 18,254
Shareholder reports and notices ... 15,410
Trustees' fees and expenses ....... 14,842
Plan of distribution fee .......... 10,435
Registration fees ................. 6,416
Management fee .................... 6,091
Investment advisory fee ........... 4,061
Custodian fees .................... 2,074
Transfer agent fees and expenses .. 1,712
Other ............................. 4,209
----------
TOTAL EXPENSES BEFORE AMOUNTS
WAIVED/ASSUMED ................... 109,025
Less: Amounts Waived/Assumed ..... (98,590)
----------
TOTAL EXPENSES AFTER AMOUNTS
WAIVED/ASSUMED ................... 10,435
----------
NET INVESTMENT INCOME ............ 148,522
----------
NET REALIZED AND UNREALIZED
GAIN (LOSS):
Net realized gain (loss) on:
Investments ........................ 37,340
Foreign exchange transactions ..... (147)
----------
Total Gain ....................... 37,193
----------
Net change in unrealized
appreciation/depreciation on:
Investments ....................... 93,970
Translation of forward foreign
currency contracts, other assets
and liabilities denominated in
foreign currencies ................. 722
----------
Total Appreciation ............... 94,692
----------
Net Gain ......................... 131,885
----------
NET INCREASE ..................... $280,407
==========
</TABLE>
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED FOR THE PERIOD
JULY 31, 1995 APRIL 4, 1994* THROUGH
(UNAUDITED) JANUARY 31, 1995
------------------------ ----------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income ........................................ $ 148,522 $ 167,714
Net realized gain (loss) ..................................... 37,193 (479,790)
Net change in unrealized appreciation/depreciation .......... 94,692 (26,422)
------------------------ ----------------------
Net increase (decrease) ..................................... 280,407 (338,498)
------------------------ ----------------------
Dividends to shareholders from net investment income ......... (120,542) (148,514)
Net increase from transactions in shares of beneficial interest 243,548 3,590,638
------------------------ ----------------------
Total increase .............................................. 403,413 3,103,626
NET ASSETS:
Beginning of period ........................................... 3,203,626 100,000
------------------------ ----------------------
END OF PERIOD (including undistributed net investment income
of $33,912 and $5,932, respectively) ......................... $3,607,039 $3,203,626
======================== ======================
</TABLE>
- ----------
* Commencement of operations.
See Notes to Financial Statements
<PAGE>
TCW/DW NORTH AMERICAN INTERMEDIATE INCOME TRUST
Notes to Financial Statements July 31, 1995 (unaudited)
- -----------------------------------------------------------------------------
1. ORGANIZATION AND ACCOUNTING POLICIES -- TCW/DW North American Intermediate
Income 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 September 13, 1993 and had no operations other than those relating to
organizational matters and the issuance of 10,000 shares of beneficial
interest for $100,000 to Dean Witter InterCapital Inc. ("InterCapital"), an
affiliate of Dean Witter Services Company Inc. (the "Manager"). The Fund
commenced operations on April 4, 1994.
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 (in
cases where securities are traded on more than one exchange; the
securities are valued on the exchange designated as the primary market by
the Adviser); (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 Adviser 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; (4) portfolio securities
may be valued by an outside pricing service approved by the Trustees. The
pricing service utilizes a matrix system incorporating security quality,
maturity and coupon as the evaluation model parameters, and/or research
and evaluation by its staff, including review of broker-dealer market
price quotations, if available, in determining what it believes is the
fair valuation of the portfolio securities valued by such pricing service;
and (5) short-term debt securities having a maturity date of more than
sixty days at time of purchase are valued on a mark-to-market basis until
sixty days prior to maturity and thereafter at amortized cost based on
their value on the 61st day. Short-term debt securities having a maturity
date of sixty days or less at the time of purchase are valued at amortized
cost.
B. Accounting for Investments -- Security transactions are accounted for
on the trade date (date the order to buy or sell is executed). Realized
gains and losses on security transactions are determined by the identified
cost method. Discounts on securities purchased are accreted over the life
of the respective securities. Interest income is accrued daily.
C. Foreign Currency Translation -- The books and records of the Fund are
maintained in U.S. dollars as follows: (1) the foreign currency market
value of investment securities, other assets and liabilities and forward
contracts are translated at the exchange rates prevailing at the end of
the period; and (2) purchases, sales, income and expenses are translated
at the exchange rates prevailing on the respective dates of such
transactions. The resultant exchange gains and losses are included in the
Statement of Operations as realized and unrealized gain/loss on foreign
exchange transactions. Pursuant to U.S. Federal income tax regulations,
certain foreign exchange gains/losses included in realized and unrealized
gain/loss are included in or are a reduction of ordinary income for
federal income tax purposes. The Fund does not isolate that portion of the
results of operations arising as a result of changes in the foreign
exchange rates from the changes in the market prices of the securities.
<PAGE>
TCW/DW NORTH AMERICAN INTERMEDIATE INCOME TRUST
Notes to Financial Statements July 31, 1995 (unaudited) (continued)
D. Forward Foreign Currency Contracts -- The Fund may enter into forward
foreign currency contracts as a hedge against fluctuations in foreign
exchange rates. Forward contracts are valued daily at the appropriate
exchange rates. The resultant exchange gains and losses are included in
the Statement of Operations as unrealized gain/loss on foreign exchange
transactions. The Fund records realized gains or losses on delivery of the
currency or at the time the forward contract is extinguished (compensated)
by entering into a closing transaction prior to delivery.
E. 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.
F. 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 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.
G. Organizational Expenses -- InterCapital paid the organizational
expenses of the Fund in the amount of approximately $184,000. Such
expenses have been deferred and are being amortized by the Fund on the
straight line method over a period not to exceed five years from the
commencement of operations.
2. MANAGEMENT AGREEMENT -- Pursuant to a Management Agreement, the Fund pays
its Manager a management fee, accrued daily and payable monthly, by applying
the annual rate of 0.39% to the net assets of the Fund determined as of the
close of each business day.
Under the terms of the Management Agreement, the 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 Manager. The Manager also bears the cost of
telephone services, heat, light, power and other utilities provided to the
Fund.
InterCapital had undertaken to assume all operating expenses (except for
any 12b-1 and brokerage fees) and the Manager had agreed to waive the
compensation provided for in its Management Agreement and the Adviser had
undertaken to waive the compensation provided for in its Advisory Agreement,
until such time as the Fund had $50 million of net assets or until six months
from the date of commencement of the Fund's operations, whichever occurred
first. InterCapital will continue to assume all operating expenses (except
for 12b-1 and brokerage fees) and the Manager and the Adviser will continue
to waive their respective compensation until such time as the Fund has $50
million of net assets or until January 31, 1996, whichever occurs first.
<PAGE>
TCW/DW NORTH AMERICAN INTERMEDIATE INCOME TRUST
Notes to Financial Statements July 31, 1995 (unaudited) (continued)
3. INVESTMENT ADVISORY AGREEMENT -- Pursuant to an Investment Advisory
Agreement with TCW Funds Management, Inc. (the "Adviser"), the Fund pays the
Adviser an advisory fee, accrued daily and payable monthly, by applying the
annual rate of 0.26% to the net assets of the Fund determined as of the close
of each business day.
Under the terms of the Investment Advisory Agreement, the Fund has
retained the Adviser to invest the Fund's assets, including placing orders
for the purchase and sale of portfolio securities. The Adviser obtains and
evaluates such information and advice relating to the economy, securities
markets, and specific securities as it considers necessary or useful to
continuously manage the assets of the Fund in a manner consistent with its
investment objective. In addition, the Adviser pays the salaries of all
personnel, including officers of the Fund, who are employees of the Adviser.
4. PLAN OF DISTRIBUTION -- Dean Witter Distributors Inc. (the "Distributor"),
an affiliate of the Manager, is the distributor of the Fund'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 Fund, except for expenses
that the Trustees determine to reimburse, as described below. The following
activities and services may be provided by the Distributor, Dean Witter
Reynolds Inc. ("DWR"), an affiliate of the Manager, its affiliates and other
dealers who have entered into selected dealer agreements with the Distributor
under the Plan: (1) compensation to, and expenses of, account executives of
DWR and other selected broker-dealers and other employees, including overhead
and telephone expenses; (2) sales incentives and bonuses to sales
representatives and to marketing personnel in connection with promoting sales
of the Fund's shares; (3) expenses incurred in connection with promoting
sales of the Fund's shares; (4) preparing and distributing sales literature;
and (5) providing advertising and promotional activities, including direct
mail solicitation and television, radio, newspaper, magazine and other media
advertisements.
The Fund is authorized to reimburse the Distributor for specific expenses
the Distributor incurs or plans to incur in promoting the distribution of the
Fund's shares. The amount of each monthly reimbursement payment may in no
event exceed an amount equal to a payment at the annual rate of 0.75% of the
Fund's average daily net assets. Expenses incurred by the Distributor
pursuant to the Plan in any fiscal year will not be reimbursed by the Fund
through payments accrued in any subsequent fiscal year. For the six months
ended July 31, 1995, the distribution fee was accrued at the annual rate of
0.67%.
5. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES -- The cost of
purchases and proceeds from sales/prepayments of portfolio securities,
excluding short-term investments, for the six months ended July 31, 1995,
aggregated $1,644,592 and $1,599,326, respectively. Included in the
aforementioned are purchases and sales of U.S. Government securities of
$1,577,408 and $1,599,326, respectively.
Dean Witter Trust Company, an affiliate of the Manager and Distributor, is
the Fund's transfer agent.
<PAGE>
TCW/DW NORTH AMERICAN INTERMEDIATE INCOME TRUST
Notes to Financial Statements July 31, 1995 (unaudited) (continued)
6. SHARES OF BENEFICIAL INTEREST -- Transactions in shares of beneficial
interest were as follows:
<TABLE>
<CAPTION>
FOR THE SIX MONTHS FOR THE PERIOD
ENDED APRIL 4, 1994* THROUGH
JULY 31, 1995 JANUARY 31, 1995
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Sold ...................... 132,347 $ 1,234,207 670,532 $ 6,560,653
Reinvestment of dividends 10,285 95,206 10,828 102,365
----------- ------------- ----------- -------------
142,632 1,329,413 681,360 6,663,018
Repurchased ............... (118,058) (1,085,865) (332,613) (3,072,380)
----------- ------------- ----------- -------------
Net increase .............. 24,574 $ 243,548 348,747 $ 3,590,638
=========== ============= =========== =============
- ----------
<FN>
* Commencement of operations.
</TABLE>
7. FEDERAL INCOME TAX STATUS -- At January 31, 1995, the Fund had a net
capital loss carryover of approximately $11,000 which will be available
through January 31, 2003 to offset future capital gains to the extent
provided by regulations. Capital or foreign currency losses incurred after
October 31 ("post-October" losses) within the taxable year are deemed to
arise on the first business day of the Fund's next taxable year. The Fund
incurred and will elect to defer net capital and foreign currency losses of
approximately $80,000 and $375,000, respectively, during fiscal 1995. At
January 31, 1995, the Fund had temporary book/tax differences primarily
attributable to post-October losses and permanent book/tax differences
attributable to foreign currency losses. Based on the information currently
available, it appears likely that all or a substantial portion of the
distributions made for the six months ended July 31, 1995, may be considered
a nontaxable return-of-capital at year-end for federal income tax purposes.
8. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS -- The
Fund may enter into forward currency contracts ("forward contracts") to
facilitate settlement of foreign currency denominated portfolio transactions
or to manage foreign currency exposure associated with foreign currency
denominated securities.
At July 31, 1995, there were no outstanding forward contracts other than
those used to facilitate settlement of foreign currency denominated portfolio
transactions.
Forward contracts involve elements of market risk in excess of the amounts
reflected in the Statement of Assets and Liabilities. The Fund bears the risk
of an unfavorable change in foreign exchange rates underlying the forward
contracts. Risks may also arise upon entering into these contracts from the
potential inability of the counterparties to meet the terms of their
contracts.
9. SUBSEQUENT EVENT -- On August 24, 1995, the Trustees approved a Plan of
Liquidation and Dissolution of the Fund, subject to shareholders' approval.
On that date, the Fund suspended the sale of its shares, including shares to
existing shareholders (but still permits the reinvestment of dividends by
shareholders who have elected that option). As a result of the suspension of
the sale of shares, the Trustees have also determined that the distribution
fees, accrued daily and payable monthly, to the Distributor pursuant to the
Plan of Distribution shall be terminated.
<PAGE>
TCW/DW NORTH AMERICAN INTERMEDIATE INCOME TRUST
Financial Highlights
- -----------------------------------------------------------------------------
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE PERIOD ENDED
FOR THE SIX MONTHS APRIL 4, 1994*
ENDED JULY 31, THROUGH JANUARY 31,
1995 (UNAUDITED) 1995
------------------ --------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ... $ 8.93 $10.00
------------------ --------------------
Net investment income ................... 0.43 0.52
Net realized and unrealized gain (loss) 0.41 (1.12)
------------------ --------------------
Total from investment operations ....... 0.84 (0.60)
------------------ --------------------
Less dividends to shareholders from
net investment income .................. (0.36) (0.47)
------------------ --------------------
Net asset value, end of period .......... $ 9.41 $ 8.93
================== ====================
TOTAL INVESTMENT RETURN ................. 9.48%(1) (6.27)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses ................................ 0.67%(2)(4) 0.75%(2)(3)
Net investment income ................... 9.51%(2)(4) 7.59%(2)(3)
SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $3,607 $3,204
Portfolio turnover rate ................. 67%(1) 133%(1)
</TABLE>
- ----------
* Commencement of operations.
(1) Not annualized.
(2) Annualized.
(3) If the Fund had borne all expenses assumed or waived by the Manager
and Investment Adviser, after application of the expense limitation,
the above annualized expense and net investment income ratios would
have been 3.25% and 5.09%, respectively.
(4) If the Fund had borne all expenses assumed or waived by the Manager
and Investment Adviser, after application of the expense limitation,
the above annualized expense and net investment income ratios would
have been 3.25% and 6.93%, respectively.
See Notes to Financial Statements
<PAGE>
TRUSTEES
John C. Argue
Richard M. DeMartini
Charles A. Fiumefreddo
John R. Haire
Dr. Manuel H. Johnson
Paul Kolton
Thomas E. Larkin, Jr.
Michael E. Nugent
John L. Schroeder
Marc I. Stern
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Thomas E. Larkin, Jr.
President
Sheldon Curtis
Vice President, Secretary and
General Counsel
James M. Goldberg
Vice President
Douglas R. Metcalf
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
MANAGER
Dean Witter Services Company Inc.
ADVISER
TCW Funds Management, Inc.
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.
TCW/DW
NORTH AMERICAN
INTERMEDIATE
INCOME TRUST
SEMIANNUAL REPORT
JULY 31, 1995
