INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
Two World Trade Center
New York, New York 10048
DEAR SHAREHOLDER:
- - - - - -----------------------------------------------------------------------------
This is the first report to shareholders of InterCapital Insured
California Municipal Securities (NYSE symbol: ICS) covering the two months of
operations from the Trust's inception on February 28, 1994 through April 30,
1994.
During the initial underwriting (January 25, 1994 through February 18,
1994), 4.5 million common shares were sold producing net proceeds of $63
million. The Trust commenced operations during a tumultuous period for
fixed-income securities by cautiously averaging into the municipal market.
The sale of Auction Rate Preferred Shares (ARPS), which seek incremental
tax-free income for common shareholders by leveraging the common shares, has
been postponed. A stable market environment and an advantageous yield spread
between long-term municipal rates and the cost of the ARPS (yield plus
expenses) are necessary to create a favorable condition for the issuance of
preferred shares. The Trust's first dividend of $0.06 per share was paid on
May 20, 1994 to shareholders of record on May 6, 1994. Based upon this
distribution, the annualized dividend rate is $0.72 per share. The Trust's
current annualized yield is 4.80 percent, assuming the original offering
price of $15.00 per share.
THE MARKET
In October 1993, municipal yields had reached record lows in a trend that
began six years ago. Strong economic growth in the fourth quarter of 1993
prompted concern about inflation and caused interest rates to rise. This
induced the Federal Reserve Board to tighten monetary policy by raising the
federal-funds rate-the interest rate that banks charge each other for
overnight loans-from 3.00 percent to 3.75 percent in three separate moves
between early February and April. This action was presented as a preemptive
strike against inflation. However, the fixed-income markets interpreted the
change in Fed policy as the beginning of a trend toward higher interest
rates. In mid-May the Federal Reserve Board initiated another round of
tightening with a 50 basis point increase in both the federal-funds rate and
the discount rate-the interest rate the Federal Reserve charges member
banks for loans.
By the end of April the bond market was battered. Interest rates were at
levels not seen in over a year. Long-term municipal bond yields as measured
by THE BOND BUYER Revenue Bond Index* increased by 86 basis points from 5.56
percent to 6.42 percent between November and April. This corresponded to a
price decline of more than 11 percent.
New-issue underwriting totaled $290 billion in 1993, a 23 percent increase
over the previous high of $235 billion set in 1992. Refunding issues, which
are used by state and local governments to refinance higher-coupon debt,
represented 66 percent of total volume last year. It is estimated that 1994's
underwriting volume will decline by 30 percent to about $200 billion and that
approximately $260 billion
- - - - - ---------------
* THE BOND BUYER Revenue Bond Index is an arithmetic average of the yields
of 25 selected municipal revenue bonds with 30-year maturities. Ratings
of these bonds range from Aaa to Baa1 by Moody's and AAA to A- by S&P.
<PAGE>
in bonds will either mature or be called. Thus, the amount of municipal debt
outstanding will be reduced. In line with these projections, new-issue volume
for the first four months of 1994 declined by 34 percent and totaled $59
billion. Refunding activity, the catalyst of last year's record underwriting,
dropped even more sharply.
PORTFOLIO STRUCTURE
At the end of the period, the portfolio was diversified among eight
municipal sectors and 21 separate issuers. The three largest sectors
represented in the portfolio, tax allocation, hospital, and water and sewer
revenue bonds accounted for 47 percent of net assets. The average maturity
and call protection of the Trust's long-term holdings were 20 years and 9
years, respectively.
Each position in the portfolio is backed by bond insurers that are rated
triple "A" by Moody's Investors Service, Inc. and/or Standard & Poor's Corp.
This is to ensure the timely payment of principal and interest. The
distribution of these long-term credit enhancements was:
<TABLE>
<CAPTION>
<S> <C>
MUNICIPAL BOND INSURANCE PERCENT
- - - - - ---------------------------- ............................. -----------
AMBAC Indemnity Corporation (AMBAC) ...................... 27.7%
Connie Lee Insurance Company (Connie Lee) ................ 3.0
Financial Guaranty Insurance Company (FGIC) .............. 14.0
Financial Security Assurance Inc. (FSA) .................. 9.1
Municipal Bond Investors Assurance Corporation (MBIA) ... 46.2
</TABLE>
LOOKING AHEAD
A continuation of reduced supply conditions, coupled with significant bond
calls and maturities should sustain investor demand for municipals. However,
the overall direction of interest rates will primarily be determined by the
economy and the Federal Reserve Board's response to economic conditions.
The Trust's procedure for reinvestment of all dividends and distributions
on common shares is by purchase in the open market. This method helps to
support the market value of the Trust's shares. In addition, the Trustees
have approved a procedure whereby the Trust may attempt to reduce or
eliminate a market value discount from net asset value by repurchasing shares
in the open market or in privately negotiated transactions.
We appreciate your support of InterCapital Insured California Municipal
Securities and look forward to continuing to serve your investment needs and
objectives in the months and years ahead.
Very truly yours,
Charles A. Fiumefreddo
Chairman of the Board
<PAGE>
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
PORTFOLIO OF INVESTMENTS APRIL 30, 1994 (UNAUDITED)
- - - - - -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- - - - - ----------- -------- ---------- -------------
<S> <C> <C> <C> <C>
CALIFORNIA EXEMPT MUNICIPAL BONDS (78.5%)
GENERAL OBLIGATION (8.1%)
$ 3,000 California, Various Purpose 3/1/94 (FSA Insured) ................ 5.50 % 3/ 1/20 $ 2,684,940
3,000 Moulton-Niguel Water District, 1993 Refg (MBIA Insured) ........ 5.00 9/ 1/19 2,499,330
- - - - - ------- -----------
6,000 5,184,270
- - - - - ------- -----------
EDUCATIONAL REVENUE (2.3%)
1,500 California Educational Facilities Authority, National University
- - - - - ------- Ser 1994 (Connie Lee Insured) .................................. 6.20 5/ 1/21 1,471,080
-----------
ELECTRIC REVENUE (6.3%)
1,500 Anaheim Public Financing Authority, San Juan 2nd Ser (FGIC
Insured) ....................................................... 5.75 10/ 1/22 1,391,414
2,600 Sacramento Municipal Utility District, Ser B 1992 (MBIA Insured) 6.375 8/15/22 2,624,050
- - - - - ------- -----------
4,100 4,015,464
- - - - - ------- -----------
HOSPITAL REVENUE (15.4%)
3,000 Anaheim, Anaheim Memorial Hospital Association COPs
(AMBAC Insured) ................................................ 5.125 5/15/20 2,541,480
3,000 California Health Facilities Financing Authority, Catholic
Healthcare West Ser 1994 B (AMBAC Insured) ..................... 5.00 8/15/24 2,890,350
3,000 California Statewide Communities Development Authority, Sharp
Health Care Obligated Group COPs (MBIA Insured) ................ 6.00 7/ 1/21 2,478,570
2,000 San Mateo County Joint Powers Financing Authority, San Mateo
County Health Center 1994 Ser A (FSA Insured)(a) ............... 5.75 7/15/22 1,855,520
- - - - - ------- -----------
11,000 9,765,920
- - - - - ------- -----------
PUBLIC FACILITIES (3.7%)
1,000 Glendale Unified School District, 1994 Ser A COPs (AMBAC
Insured) ....................................................... 6.00 3/ 1/19 966,110
1,570 Los Angeles Convention & Exhibit Center Authority, Refg Ser A
(MBIA Insured) ................................................. 5.375 8/15/18 1,386,860
- - - - - ------- -----------
2,570 2,352,970
- - - - - ------- -----------
TAX ALLOCATION REVENUE (18.6%)
2,000 Brea Redevelopment Agency, Redev Project AB Refg Ser (MBIA
Insured) ....................................................... 5.75 8/ 1/23 1,853,580
2,000 Cerrito Public Finance Authority, Los Coyotes Redev Ser 1993 A
(AMBAC Insured) ................................................ 5.75 11/ 1/22 1,857,640
3,000 Corona Redevelopment Agency, Proj Area A (FGIC Insured)(a) ..... 6.25 9/ 1/13 3,002,220
3,000 Pittsburg Redevelopment Agency, Los Medanos Refg Ser 1993 A
(AMBAC Insured) ................................................ 5.00 8/ 1/17 2,520,540
3,000 Yorba Linda Redevelopment Agency, Ser 1993 A (MBIA Insured) .... 5.25 9/ 1/23 2,570,070
- - - - - ------- -----------
13,000 11,804,050
- - - - - ------- -----------
TRANSPORTATION FACILITIES REVENUE (10.8%)
3,000 Los Angeles County Transportation Commission, Second Sr Ser 1992
A (MBIA Insured) ............................................... 6.00 7/ 1/23 2,884,080
San Francisco Airports Commission, San Francisco Intl Airport
2,000 Second Ser Refg Issue 4 (MBIA Insured) ......................... 6.00 5/ 1/20 1,928,640
2,000 Second Ser Refg Issue 2 (MBIA Insured) ......................... 6.75 5/ 1/20 2,070,660
- - - - - ------- ------------
7,000 6,883,380
- - - - - ------- -----------
</TABLE>
<PAGE>
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
PORTFOLIO OF INVESTMENTS April 30, 1994 (unaudited) (continued)
- - - - - -------------------------------------------------------------------------------
- - - - - ----------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- - - - - ----------- -------- ---------- -------------
<S> <C> <C> <C> <C>
WATER & SEWER REVENUE (13.3%)
$ 3,000 Central Coast Water Authority, Ser 1992 (AMBAC Insured) ........ 6.60% 10/ 1/22 $ 3,070,110
2,900 Garden Grove Public Financing Authority, Ser 1993 (FGIC Insured) 5.50 12/15/23 2,586,568
3,000 Los Angeles, Waste Water Refg Ser A (MBIA Insured) .............. 5.70 6/ 1/20 2,770,680
- - - - - ------- ------------
8,900 8,427,358
- - - - - ------- ------------
54,070 TOTAL CALIFORNIA EXEMPT MUNICIPAL BONDS
- - - - - ------- (IDENTIFIED COST $50,650,009) .................................. 49,904,492
------------
CALIFORNIA EXEMPT SHORT-TERM MUNICIPAL OBLIGATIONS (31.5%)
2,200 California Health Facilities Financing Authority, Santa Barbara
Cottage Hospital Ser 1985 B (Tender 5/5/94) .................... 1.7 5* 11/ 1/19 2,200,000
3,000 California Pollution Control Financing Authority, OMS Equity of
Stanislaus Inc Ser 1987 (Tender 5/2/94) ........................ 1.85* 12/ 1/17 3,000,000
3,000 Contra Costa County, Multifamily Park Regency Ser 1992 (Tender
5/4/94) ........................................................ 2.30* 8/ 1/32 3,000,000
4,500 Orange County Sanitation District, Ser 1992 C COPs (FGIC
Insured) (Tender 5/4/94) ....................................... 1.65* 8/ 1/17 4,500,000
3,000 Orange County Water District, 1990 Proj B Cops (Tender 5/2/94)... 1.65* 8/15/15 3,000,000
1,300 Santa Ana, Health Facilities Town & Country Manor Ser 1990
(Tender 5/2/94) ................................................ 1.65* 10/ 1/20 1,300,000
3,000 Southern California Public Power Authority, Transmission Ser 1991
(AMBAC Insured) (Tender 5/4/94) ................................ 2.25* 7/ 1/19 3,000,000
- - - - - ------- -------------
20,000 TOTAL CALIFORNIA EXEMPT SHORT-TERM MUNICIPAL OBLIGATIONS
- - - - - ------- (IDENTIFIED COST $20,000,000) .................................. 20,000,000
-------------
$74,070 TOTAL INVESTMENTS (IDENTIFIED COST $70,650,009)(B) ....................... 110.0% 69,904,492
======= LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS ........................... (10.0) (6,345,464)
---- -------------
NET ASSETS ............................................................... 100.0% $63,559,028
===== =============
<FN>
- - - - - ---------------
* Variable or floating rate securities. Coupon rate shown reflects current
rate.
(a) Security purchased on a when issued basis.
(b) The aggregate cost for federal income tax purposes is $70,650,009; the
aggregate gross unrealized appreciation is $206,230 and the aggregate
gross unrealized depreciation is $951,747, resulting in net unrealized
depreciation of $745,517.
</TABLE>
See Notes to Financial Statements
<PAGE>
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
FINANCIAL STATEMENTS
- - - - - -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1994 (UNAUDITED)
- - - - - -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value $ 69,904,492
(identified cost $70,650,009) (Note 1)
Cash ................................... 674,798
Interest receivable .................... 849,010
Deferred organizational expenses (Note 1) 38,664
-----------
TOTAL ASSETS ......................... 71,466,964
-----------
LIABILITIES:
Payable for investments purchased ..... 7,485,282
Offering expenses payable (Note 1) .... 336,953
Organizational expenses payable (Note 1) 40,000
Investment management fee payable (Note 2) 21,832
Accrued expenses (Note 3) .............. 23,869
-----------
TOTAL LIABILITIES .................... 7,907,936
-----------
NET ASSETS:
Preferred shares of beneficial interest
(1,000,000 shares authorized of
non-participating $.01 par value, none
issued (Note 4)) ...................... -0-
-----------
Common shares of beneficial interest
(unlimited shares authorized of $.01
par value, 4,582,113 shares
outstanding (Note 5)) ................. 64,064,509
Net unrealized depreciation on
investments ........................... (745,517)
Undistributed net investment income ... 240,036
------------
NET ASSETS ........................... $ 63,559,028
============
NET ASSET VALUE PER COMMON SHARE,
4,582,113 shares outstanding
(unlimited shares authorized of $.01
par value) ............................ $13.87
======
</TABLE>
STATEMENT OF OPERATIONS For the Period February 28,
1994 through April 30, 1994 (Note 1) (Unaudited)
- - - - - -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME:
INTEREST INCOME .................. $ 307,419
---------
EXPENSES
Investment management fee
(Note 2) ....................... 36,965
Professional fees ............... 12,721
Transfer agent fees and expenses. 4,590
Trustees' fees and expenses .... 3,674
Shareholder reports and notices.. 3,500
Registration fees ............... 2,759
Organizational expenses (Note 1). 1,336
Other ........................... 1,838
---------
TOTAL EXPENSES ................. 67,383
---------
NET INVESTMENT INCOME ......... 240,036
---------
NET UNREALIZED LOSS ON INVESTMENTS
(Note 1):
Net unrealized depreciation on
investments ..................... (745,517)
---------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS ... $(505,481)
==========
</TABLE>
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS For the Period February 28, 1994 through
April 30, 1994 (Note 1) (Unaudited)
- - - - - -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income .................................................... $ 240,036
Net unrealized depreciation on investments ............................... (745,517)
-----------
Net decrease in net assets resulting from operations .................... (505,481)
Transactions in shares of beneficial interest (Note 5) .................... 63,964,500
-----------
Total increase .......................................................... 63,459,019
NET ASSETS:
Beginning of period ....................................................... 100,009
-----------
END OF PERIOD (including undistributed net investment income of $240,036).. $63,559,028
===========
</TABLE>
See Notes to Financial Statements
<PAGE>
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
NOTES TO FINANCIAL STATEMENTS (unaudited)
- - - - - -----------------------------------------------------------------------------
1. ORGANIZATION AND ACCOUNTING POLICIES -- InterCapital Insured California
Municipal Securities (the "Trust") is registered under the Investment Company
Act of 1940, as amended, as a non-diversified, closed-end management
investment company. It was organized on October 14, 1993 as a Massachusetts
business trust and had no operations until February 28, 1994 other than
matters relating to the sale and issuance of 7,113 common shares of
beneficial interest to Dean Witter InterCapital Inc. (the "Investment
Manager").
The following is a summary of significant accounting policies:
A. Valuation of Investments -- Portfolio securities are valued for the
Trust by an outside independent pricing service approved by the
Trustees. The pricing service has informed the Trust that in valuing the
Trust's portfolio securities, it uses both a computerized grid 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 Trust's
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.
B. Accounting for Investments -- Security transactions are accounted
for on the trade date (date the order to buy or sell is executed). In
computing net investment income, the Trust amortizes premiums and
original issue discounts on fixed income securities. Additionally, with
respect to market discount on bonds, a portion of any capital gain
realized upon disposition is recharacterized as taxable investment
income. Realized gains and losses on security transactions are
determined on the identified cost method. Interest income is accrued
daily.
C. Federal Income Tax Status -- It is the Trust's policy to comply with
the requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable and nontaxable
income to its shareholders. Accordingly, no federal income tax provision
is required.
D. Dividends and Distributions to Shareholders -- The Trust records
dividends and distributions to 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 reclassifications. 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.
<PAGE>
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)
- - - - - ------------------------------------------------------------------------
E. Organizational and Offering Expenses -- The Trust's Investment
Manager paid the organizational and offering expenses of the Trust in
the amount of approximately $40,000 and $360,000, respectively.
Organizational expenses will be reimbursed by the Trust for the full
amount thereof and are being amortized by the straight-line method over
a period not to exceed five years from the commencement of operations.
Offering expenses will also be reimbursed by the Trust and were charged
to capital at the time of issuance of the Trust's shares.
2. INVESTMENT MANAGEMENT AGREEMENT -- Pursuant to an Investment Management
Agreement (the "Agreement") with Dean Witter InterCapital Inc., the Trust
pays its Investment Manager a management fee, calculated weekly and payable
monthly, by applying the annual rate of 0.35% to the Trust's average weekly
net assets.
Under the terms of the Agreement, in addition to managing the Trust's
investments, the Investment Manager maintains certain of the Trust's books
and records and furnishes office space and facilities, equipment, clerical,
bookkeeping and certain legal services, and pays the salaries of all
personnel, including officers of the Trust who are employees of the
Investment Manager. The Investment Manager also bears the cost of telephone
services, heat, light, power and other utilities provided to the Trust.
3. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES -- The cost of
purchases and the proceeds from sales of portfolio securities for the period
February 28, 1994 (commencement of operations) through April 30, 1994,
excluding short-term investments, aggregated $50,648,979 and -0-,
respectively.
Dean Witter Trust Company, an affiliate of the Investment Manager, is the
Trust's transfer agent. For the period February 28, 1994 (commencement of
operations) through April 30, 1994, the Trust had transfer agent fees and
expenses payable of approximately $3,400.
Dean Witter Distributors Inc., the Trust's principal underwriter and an
affiliate of the Investment Manager, has informed the Trust that it received
approximately $4,315,000 in underwriting discounts and commissions from the
initial offering of the Trust's common shares.
4. PREFERRED SHARES OF BENEFICIAL INTEREST -- The Trust is authorized to
issue up to 1,000,000 non-participating preferred shares of beneficial
interest having a par value of $.01 per share, in one or more series, with
rights as determined by the Trustees, without the approval of the common
shareholders. The preferred shares have a liquidation value of $50,000 per
share plus any accumulated but unpaid dividends plus the redemption premium,
if any, and are redeemable (in whole or in part) on any dividend payment
date.
Upon issuance, the Trust will be subject to certain restrictions relating
to the preferred shares. Failure to comply with these restrictions could
preclude the Trust from declaring any distributions to common shareholders or
repurchasing common shares and/or could trigger the mandatory redemption of
preferred shares at liquidation value.
The preferred shares, which will be entitled to one vote per share, will
generally vote with the common shares but will vote separately as a class to
elect two Trustees and on any matters affecting the rights of the preferred
shares.
<PAGE>
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)
- - - - - -----------------------------------------------------------------------------
5. COMMON SHARES OF BENEFICIAL INTEREST -- Transactions in common shares of
beneficial interest were as follows:
<TABLE>
<CAPTION>
CAPITAL PAID
PAR VALUE IN EXCESS OF
SHARES OF SHARES PAR VALUE
----------- ----------- ------------
<S> <C> <C> <C>
Balance (Note 1) .............................................. 7,113 $ 71 $ 99,938
Shares issued at close of public offering on February 28, 4,500,000 45,000 62,865,000
1994* ........................................................
Shares issued on April 7, 1994 to cover over-allotment ....... 75,000 750 1,053,750
--------- ------- -----------
Balance April 30, 1994 ........................................ 4,582,113 $45,821 $64,018,688
========= ======= ===========
<FN>
- - - - - ---------------
* Net of offering costs of $360,000.
</TABLE>
6. DIVIDENDS TO COMMON SHAREHOLDERS -- The Trust has declared the following
dividends from net investment income:
<TABLE>
<CAPTION>
DECLARATION AMOUNT PER RECORD PAYABLE
DATE SHARE DATE DATE
- - - - - -------------- ------------ --------------- --------------
<S> <C> <C> <C>
April 26, 1994 $0.06 May 6, 1994 May 20, 1994
May 31, 1994 $0.06 June 10, 1994 June 24, 1994
</TABLE>
7. SELECTED QUARTERLY FINANCIAL DATA --
<TABLE>
<CAPTION>
QUARTER ENDED*
----------------
4/30/94**
----------------
PER
TOTAL SHARE
------- -------
<S> <C> <C>
Total investment income ........... $ 307 $ 0.07
Net investment income ............. 240 0.05
Net unrealized loss on investments (746) (0.16)
<FN>
- - - - - ---------------
* Totals expressed in thousands of dollars.
** For the period February 28, 1994 (commencement of operations) through
April 30, 1994.
</TABLE>
<PAGE>
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
FINANCIAL HIGHLIGHTS
- - - - - -----------------------------------------------------------------------------
Selected ratios and per share data for a common share of beneficial interest
outstanding throughout the period:
<TABLE>
<CAPTION>
FOR THE PERIOD
FEBRUARY 28, 1994*
THROUGH APRIL 30, 1994
(UNAUDITED)
------------------
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ................ $ 14.06
-------
Net investment income .............................. 0.05
Net unrealized loss on investments ................. (0.16)
-------
Total from investment operations .................... (0.11)
-------
Offering costs charged against capital .............. (0.08)
-------
Net asset value, end of period ...................... $ 13.87
=======
Market value, end of period ......................... $ 14.25
=======
TOTAL INVESTMENT RETURN+ ............................. (5.00)%(1)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ............ $63,559
Ratio of expenses to average net assets ............. 0.64% (2)
Ratio of net investment income to average net assets 2.27% (2)
Portfolio turnover rate ............................. 0%
<FN>
- - - - - ---------------
* Commencement of operations.
+ Total investment return is based upon the current market value on the
first and last day of each period reported. Dividends and distributions,
if any, are assumed to be reinvested at the prices obtained under the
Trust's dividend reinvestment plan. Total investment return does not
reflect sales charges or brokerage commissions.
(1) Not annualized.
(2) Annualized.
</TABLE>
See Notes to Financial Statements
- - - - - -----------------------------------------------------------------------------
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.
<PAGE>
TRUSTEES
Jack F. Bennett
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. John E. Jeuck
Dr. Manuel H. Johnson
Paul Kolton
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
Edward R. Telling
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Sheldon Curtis
Vice President, Secretary and General Counsel
James F. Willison
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Dean Witter Trust Company
Harborside Financial Center--Plaza Two
Jersey City, New Jersey 07311
LEGAL COUNSEL
Sheldon Curtis
Two World Trade Center
New York, New York 10048
INDEPENDENT ACCOUNTANTS
Price Waterhouse
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Dean Witter InterCapital Inc.
Two World Trade Center
New York, New York 10048
INTERCAPITAL
INSURED
CALIFORNIA
MUNICIPAL
SECURITIES
SEMIANNUAL REPORT
APRIL 30, 1994
