<PAGE>
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
Two World Trade Center,
New York, New York 10048
LETTER TO THE SHAREHOLDERS April 30, 1996
DEAR SHAREHOLDER:
During the first six months of InterCapital Insured California Municipal
Securities's current fiscal year, interest rates initially declined, but
reversed direction in February and began to move higher. Last year's
favorable bond market environment was created by proposals to achieve a
balanced federal budget within five to seven years and by continued easing of
Federal Reserve Board monetary policy. However, budget negotiations reached a
political impasse early in 1996 and federal offices were partially closed.
This had an adverse impact on bonds. Concerns also developed about an
increase in the pace of the economic recovery, which was marked by
unexpectedly strong job growth in March and rising commodity prices. The bond
market reacted to these developments by pushing yields sharply higher.
MUNICIPAL MARKET CONDITIONS
Long-term municipal revenue bond yields as tracked by The Bond Buyer Revenue
Bond Index * moved from 6.02 percent in October 1995 to a low of 5.63 percent
in January 1996. Interest rates subsequently began to rise in mid-February on
signs of stronger economic growth and renewed inflationary fears. The Index
yield reached 6.16 percent in April. Yields on one-year municipal notes
declined from 3.82 percent to 3.70 percent over the past six months. The
yield pickup for extending maturities from one-to-thirty years was 246 basis
points at the end of April.
The risk of flat-tax legislation had caused the ratio of Revenue Bond Index
yields to 30-year U.S. Treasury bond yields to rise from 85 to 94 percent
between March and September 1995. However, as the prospects of a flat tax
faded, the ratio improved to 92 percent by the end of April. A declining
ratio means that municipal bond prices have outperformed U.S.
- ------------
* The Bond Buyer Revenue Bond Index is an arithmetic average of the yields of
25 selected municipal revenue bonds with 30-year maturities. Credit ratings
of these bonds range from Aa1 to Baa1 by Moody's Investors Service, Inc., and
AA+ to A- by Standard & Poor's Corp.
<PAGE>
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
LETTER TO THE SHAREHOLDERS April 30, 1996, continued
Treasury prices. Over the previous eight year period prior to the flat-tax
debate, long-term municipal yields averaged 89 percent of U.S. Treasury
yields.
Municipal underwriting activity was fueled by the trend of lower interest
rates in 1995. Between November 1995 and April 1996, new issue volume
increased 45 percent versus the same period a year ago. Despite a resurgence
in underwriting, dealers have continued to withdraw from the municipal
business.
PERFORMANCE
The Trust's net asset value (NAV) declined from $14.84 to $14.55 per share
during the six-month period ended April 30, 1996. Based on this NAV change
plus reinvestment of tax-free dividends totaling $0.375 per share and a
long-term capital gains distribution totaling $0.01 per share, the Trust's
total return was 0.90 percent. Over the same period, the Trust's market price
on the New York Stock Exchange increased from $12.50 to $13.375 per share.
Based on this market price change and reinvestment of tax-free dividends and
distributions, the Trust's total return was 10.11 percent. The Trust began the
period trading at a 16 percent discount to NAV and closed at an 8 percent
discount. Undistributed net investment income improved to $0.099 per share on
April 30, 1996 versus $0.089 per share six months ago.
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
(The chart below represents information which appears as a
graphic printed report for the Five Largest Sectors as of April 30, 1996.)
MUNICIPAL SECTORS PERCENT
- ---------------- -------
Other 27%
Tax Allocation 24%
Hospital 15%
Water & Sewer 14%
Transportation 11%
General Obligations 9%
A pie chart reflecting the Credit Enhancement of total long term
investments as of April 30, 1996.
CREDIT PERCENT
- ------ -------
Municipal Bond Investors Assur. Corp. (MBIA) 43%
AMBAC Indemnity Corp. (AMBAC) 30%
Financial Security Assur. Inc. (FSA) 13%
Financial Guaranty Ins. Co. (FGIC) 12%
Connie Lee 2%
PORTFOLIO STRUCTURE
On April 30, 1996, the Trust had over $62 million in net assets diversified
among 11 long-term municipal sectors and 25 credits. The five largest sectors
represented 73 percent of net assets. The average maturity and call
protection of the Trust's long-term portfolio were 25 and 7 years,
respectively. Each position in the portfolio was backed by bond insurers that
are rated triple "A" by Moody's Investors Service, Inc. and/or Standard &
Poor's Corp. This is to insure the timely payment of principal and interest.
<PAGE>
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
LETTER TO THE SHAREHOLDERS April 30, 1996, continued
LOOKING AHEAD
Tax-reduction proposals may receive additional publicity. However, the
balance between the supply of new issues and demand created by maturities and
calls for redemption should remain positive for the municipal market.
Long-term municipal securities currently yield 90 percent of the yield on
U.S. Treasury securities and may be expected to move in tandem with the
Treasury market.
The Trust's procedure for reinvestment of all dividends and distributions on
common shares is through purchases in the open market. This method helps to
support the market value of the Trust's shares. In addition, we would like to
remind you that the Trustees have approved a procedure whereby the Trust,
when appropriate, may purchase shares in the open market or in privately
negotiated transactions at a price not above market value or net asset value,
whichever is lower at the time of purchase. During the six-month period ended
April 30, 1996, the Trust purchased and retired 40,600 shares of common stock
at a weighted average market discount of 10.71 percent.
We appreciate your ongoing support of InterCapital Insured California
Municipal Securities 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>
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
PORTFOLIO OF INVESTMENTS April 30, 1996 (unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ----------- ---------------------------------------------------------------- -------- ---------- ------------
<S> <C> <C> <C> <C>
CALIFORNIA EXEMPT MUNICIPAL BONDS (97.3%)
General Obligation (8.7%)
$ 3,000 California, Various Purpose 03/01/94 (FSA) ..................... 5.50 % 03/01/20 $ 2,807,220
3,000 Moulton-Niguel Water District, 1993 Refg (MBIA) ................ 5.00 09/01/19 2,608,650
- ----------- ------------
6,000 5,415,870
- ----------- ------------
Educational Facilities Revenue (2.4%)
1,500 California Educational Facilities Authority, National University
Ser 1994 (Connie Lee) ........................................ 6.20 05/01/21 1,509,990
- ----------- ------------
Electric Revenue (7.3%)
1,500 Anaheim Public Financing Authority, San Juan 2nd Ser (FGIC) .... 5.75 10/01/22 1,450,530
3,000 Sacramento Municipal Utility District, 1992 Ser B (MBIA) ....... 6.375 08/15/22 3,105,960
- ----------- ------------
4,500 4,556,490
- ----------- ------------
Hospital Revenue (14.7%)
2,000 Anaheim, Anaheim Memorial Hospital Association COPs (AMBAC) .... 5.125 05/15/20 1,755,660
3,000 California Health Facilities Financing Authority, Catholic
Healthcare West
Ser 1994 B (AMBAC) ............................................ 5.00 07/01/21 2,577,990
3,000 California Statewide Communities Development Authority, Sharp
Health Care COPs (MBIA) ...................................... 6.00 08/15/24 2,983,500
2,000 San Mateo County Joint Powers Financing Authority, San Mateo
County Health Center 1994 Ser A (FSA) ........................ 5.75 07/15/22 1,929,040
- ----------- ------------
10,000 9,246,190
- -----------
Mortgage Revenue - Multi-Family (4.9%)
3,000 Los Angeles Community Redevelopment Agency, 1994 Ser A (AMBAC) . 6.45 07/01/17 3,082,950
- ----------- ------------
Mortgage Revenue - Single Family (3.2%)
2,000 California Housing Finance Agency, 1995 Ser B (AMT) (AMBAC) .... 6.25 08/01/14 1,997,600
- ----------- ------------
Public Facilities Revenue (3.1%)
1,000 Glendale Unified School District, 1994 Ser A COPs (AMBAC) ...... 6.00 03/01/19 998,670
1,000 Los Angeles Convention & Exhibition Center Authority, 1993 Refg
Ser A (MBIA) ................................................. 5.375 08/15/18 917,880
- ----------- ------------
2,000 1,916,550
- ----------- ------------
Tax Allocation (24.4%)
3,000 Bay Area Government Association, Pool 1994 Ser A (FSA) ......... 6.00 12/15/24 3,002,070
2,000 Brea Redevelopment Agency, Redev AB 1993 Refg Ser (MBIA) ....... 5.75 08/01/23 1,933,100
2,000 Cerritos Public Finance Authority, Los Coyotes Redev Ser 1993 A
(AMBAC) ....................................................... 5.75 11/01/22 1,934,060
3,000 Corona Redevelopment Agency, Area A 1994 Refg Ser A (FGIC) ..... 6.25 09/01/13 3,117,750
3,000 Pittsburg Redevelopment Agency, Los Medanos Refg Ser 1993 A
(AMBAC) ....................................................... 5.00 08/01/17 2,625,750
3,000 Yorba Linda Redevelopment Agency, Ser 1993 A (MBIA) ............ 5.25 09/01/23 2,688,180
- ----------- ------------
16,000 15,300,910
- ----------- ------------
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
PORTFOLIO OF INVESTMENTS April 30, 1996 (unaudited) continued
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ----------- ---------------------------------------------------------------- -------- ---------- ------------
Transportation Facilities Revenue (11.4%)
$ 3,000 Los Angeles County Transportation Commission, Second Sr Ser 1992
A (MBIA) ..................................................... 6.00 % 07/01/23 $ 2,987,760
San Francisco Airports Commission, San Francisco Int'l Airport
2,000 Second Ser Refg Issue 4 (MBIA) ................................ 6.00 05/01/20 2,000,000
2,000 Second Ser Refg Issue 2 (MBIA) ................................ 6.75 05/01/20 2,157,700
- ----------- ------------
7,000 7,145,460
- ----------- ------------
Water & Sewer Revenue (14.0%)
3,000 Central Coast Water Authority, Ser 1992 (AMBAC) ................ 6.60 10/01/22 3,186,630
2,900 Garden Grove Public Financing Authority, Ser 1993 (FGIC) ....... 5.50 12/15/23 2,697,957
3,000 Los Angeles, Wastewater Refg Ser 1993 A (MBIA) ................. 5.70 06/01/20 2,882,250
- ----------- ------------
8,900 8,766,837
- ----------- ------------
Other Revenue (3.2%)
2,000 South Orange County Public Financing District #88-1, 1994 Ser A
(MBIA) ........................................................ 6.00 09/01/18 1,999,800
- ----------- ------------
62,900 TOTAL CALIFORNIA EXEMPT MUNICIPAL BONDS (Identified Cost $59,534,084) .............. 60,938,647
- ----------- ------------
CALIFORNIA EXEMPT SHORT-TERM MUNICIPAL OBLIGATION (1.0%)
600 California Pollution Control Financing Authority, Southern
California Edison Co Ser 1986 B (Demand 05/01/96) (Identified
Cost $600,000) ................................................ 3.65* 02/28/08 600,000
- ----------- ------------
$63,500 TOTAL INVESTMENTS (Identified Cost $60,134,084) (a) ..................... 98.3% 61,538,647
===========
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES .......................... 1.7 1,061,612
---------- ------------
NET ASSETS .............................................................. 100.0% $62,600,259
============
</TABLE>
- ------------
AMT Alternative Minimum Tax.
COPs Certificates of Participation.
* Current coupon of variable rate security.
(a) The aggregate cost for federal income tax purposes approximates
identified cost. The aggregate gross unrealized appreciation was
$1,552,192 and the aggregate gross unrealized depreciation was
$147,629, resulting in net unrealized appreciation of $1,404,563.
Bond Insurance:
AMBAC AMBAC Indemnity Corporation.
Connie Lee Connie Lee Insurance Company.
FGIC Financial Guaranty Insurance Company.
FSA Financial Security Assurance Inc.
MBIA Municipal Bond Investors Assurance Corporation.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (unaudited)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $60,134,084) .......... $61,538,647
Cash .................................... 58,814
Interest receivable ..................... 1,034,936
Deferred organizational expenses ....... 22,647
Prepaid expenses and other assets ...... 10,990
-------------
TOTAL ASSETS .......................... 62,666,034
------------
LIABILITIES:
Investment management fee payable ...... 19,313
Accrued expenses and other payables .... 46,462
-------------
TOTAL LIABILITIES ..................... 65,775
-------------
NET ASSETS:
Preferred shares of beneficial interest
(1,000,000 shares authorized of
non-participating $.01 par value, none
issued) ................................ --
-------------
Common shares of beneficial interest
(unlimited shares authorized of
$.01 par value, 4,302,613 shares
outstanding) ........................... 60,775,594
Net unrealized appreciation ............. 1,404,563
Accumulated undistributed net investment
income ................................. 428,026
Accumulated undistributed net realized
loss ................................... (7,924)
-------------
NET ASSETS ............................ $62,600,259
=============
NET ASSET VALUE PER COMMON SHARE
($62,600,259 divided by 4,302,613
common shares outstanding) ............. $ 14.55
=============
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended April 30, 1996 (unaudited)
<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME ....................... $ 1,852,022
-------------
EXPENSES
Investment management fee ............. 113,576
Professional fees ..................... 26,941
Transfer agent fees and expenses ..... 11,593
Shareholder reports and notices ...... 11,218
Trustees' fees and expenses ........... 9,891
Registration fees ..................... 8,258
Organizational expenses ............... 3,988
Custodian fees ........................ 1,516
Other ................................. 4,751
-------------
TOTAL EXPENSES BEFORE EXPENSE
OFFSET .............................. 191,732
LESS: EXPENSE OFFSET ................ (1,506)
-------------
TOTAL EXPENSES AFTER EXPENSE
OFFSET .............................. 190,226
-------------
NET INVESTMENT INCOME ............... 1,661,796
-------------
NET REALIZED AND UNREALIZED LOSS:
Net realized loss ..................... (6,674)
Net change in unrealized appreciation (1,316,744)
-------------
NET LOSS ............................ (1,323,418)
-------------
NET INCREASE .......................... $ 338,378
=============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
FINANCIAL STATEMENTS, continued
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED OCTOBER
APRIL 30, 1996 31, 1995
- ------------------------------------------------------ -------------- ----------------
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income ................................. $ 1,661,796 $ 3,295,918
Net realized gain (loss) .............................. (6,674) 37,077
Net change in unrealized appreciation ................. (1,316,744) 6,919,822
-------------- ----------------
NET INCREASE ........................................ 338,378 10,252,817
-------------- ----------------
DIVIDENDS AND DISTRIBUTIONS TO COMMON SHAREHOLDERS
FROM:
Net investment income ................................. (1,621,908) (3,149,559)
Net realized gain ..................................... (38,327) --
-------------- ----------------
TOTAL ............................................... (1,660,235) (3,149,559)
-------------- ----------------
Net decrease from transactions in shares of beneficial
interest ............................................. (546,657) (1,456,853)
-------------- ----------------
TOTAL INCREASE (DECREASE) ........................... (1,868,514) 5,646,405
NET ASSETS:
Beginning of period ................................... 64,468,773 58,822,368
-------------- ----------------
END OF PERIOD
(Including undistributed net investment income of
$428,026 and $388,138, respectively) ................ $62,600,259 $64,468,773
============== ================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
NOTES TO FINANCIAL STATEMENTS April 30, 1996 (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
diversified, closed-end management investment company. The Trust was
organized as a Massachusetts business trust on October 14, 1993 and commenced
operations on February 28, 1994.
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 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. The Trust amortizes premiums and accretes discounts over the life of
the respective securities. Interest income is accrued daily except where
collection is not expected.
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;
<PAGE>
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
NOTES TO FINANCIAL STATEMENTS April 30, 1996 (unaudited) continued
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 AND OFFERING COSTS -- The Investment Manager paid
the organizational expenses and offering costs of the Trust's common shares
in the amount of $40,000 and $286,877, respectively. The organizational
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. Offering costs were charged to capital at the time of issuance of
the Trust's common shares.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement, the Trust pays a management
fee, calculated weekly and payable monthly, by applying the annual rate of
0.35% to the Trust's 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, at its own expense, office space, facilities,
equipment, clerical, bookkeeping and certain legal services and pays the
salaries of all personnel, including officers of the Trust who are employees
of the Investment Manager. The Investment Manager also bears the cost of
telephone services, heat, light, power and other utilities provided to the
Trust.
3. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The proceeds from sales of portfolio securities, excluding short-term
investments, for the six months ended April 30, 1996 aggregated $520,496.
Dean Witter Trust Company, an affiliate of the Investment Manager, is the
Trust's transfer agent. At April 30, 1996, the Trust had transfer agent fees
and expenses payable of approximately $7,000.
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 approval of
the common shareholders. The preferred shares have a liquidation value of
$50,000 per share plus the redemption premium, if any, plus accumulated but
unpaid dividends, whether or not
<PAGE>
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
NOTES TO FINANCIAL STATEMENTS April 30, 1996 (unaudited) continued
declared, thereon to the date of distribution. The Trust may redeem such
shares, in whole or in part, at the original purchase price of $50,000 per
share plus accumulated but unpaid dividends, whether or not declared, thereon
to the date of redemption.
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
purchasing common shares and/or could trigger the mandatory redemption of
preferred shares at liquidation value.
The preferred shares, entitled to one vote per share, generally vote with the
common shares but vote separately as a class to elect two Trustees and on any
matters affecting the rights of the preferred shares.
5. COMMON SHARES OF BENEFICIAL INTEREST
Transactions in common shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
CAPITAL PAID
IN EXCESS OF
SHARES PAR VALUE PAR VALUE
----------- --------- -------------
<S> <C> <C> <C>
Balance, October 31, 1994 (Note 1) ....................................... 4,474,113 $44,741 $62,734,363
Adjustments to estimated offering costs associated with the initial
public offering of the common shares .................................... -- -- 73,123
Treasury shares purchased and retired (weighted average discount 12.50%)* (130,900) (1,309) (1,528,667)
----------- --------- -------------
Balance, October 31, 1995 ................................................ 4,343,213 43,432 61,278,819
Treasury shares purchased and retired (weighted average discount 10.71%)* (40,600) (406) (546,251)
----------- --------- -------------
Balance, April 30, 1996 .................................................. 4,302,613 $43,026 $60,732,568
=========== ========= =============
</TABLE>
- ------------
* The Trustees have voted to retire the shares purchased.
6. DIVIDENDS TO COMMON SHAREHOLDERS
The Trust declared the following dividends from net investment income:
<TABLE>
<CAPTION>
AMOUNT PER RECORD PAYABLE
DECLARATION DATE SHARE DATE DATE
- ---------------- ----------- -------------- --------------
<S> <C> <C> <C>
April 23, 1996 $0.0625 May 3, 1996 May 17, 1996
May 28, 1996 $0.0625 June 7, 1996 June 21, 1996
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX FEBRUARY 28, 1994*
MONTHS ENDED FOR THE YEAR ENDED THROUGH OCTOBER 31,
APRIL 30, 1996** OCTOBER 31, 1995** 1994**++
- ------------------------------------------------- ---------------- ------------------ -------------------
<S> <C> <C> <C>
(unaudited)
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period .............$ 14.84 $13.15 $14.06
---------------- ------------------ -------------------
Net investment income ............................ 0.39 0.76 0.41
Net realized and unrealized gain (loss) ......... (0.30) 1.59 (0.92)
---------------- ------------------ -------------------
Total from investment operations ................. 0.09 2.35 (0.51)
---------------- ------------------ -------------------
Less dividends and distributions from:
Net investment income ........................... (0.37) (0.72) (0.36)
Net realized gain ............................... (0.01) -- --
---------------- ------------------ -------------------
Total dividends and distributions ................ (0.38) (0.72) (0.36)
Anti-dilutive effect of acquiring treasury shares -- 0.04 0.04
Offering costs charged against capital ........... -- 0.02 (0.08)
---------------- ------------------ -------------------
Net asset value, end of period ...................$ 14.55 $14.84 $13.15
================ ================== ===================
Market value, end of period ......................$ 13.375 $12.50 $11.00
================ ================== ===================
TOTAL INVESTMENT RETURN+ ......................... 10.11%(1) 20.51% (24.55)%(1)
RATIOS TO AVERAGE NET ASSETS:
Total expenses before expense offset ............. 0.59%(2)(4) 0.72%(3) 0.65%(2)
Net investment income ............................ 5.12%(2) 5.35%(3) 4.45%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands ......... $62,600 $64,469 $58,822
Portfolio turnover rate .......................... -- %(1) 3% -- %(1)
<FN>
- ------------
* Commencement of operations.
** The per share amounts were computed using an average number of shares
outstanding during the period.
+ Total investment return is based upon the current market value on the
last day of each period reported. Dividends 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.
++ Restated for comparative purposes.
(1) Not annualized.
(2) Annualized.
(3) The above expense and net investment income ratios would have been
0.71% and 5.36%, respectively, which reflects 0.01% effect for custody
cash credits.
(4) The above annualized expense ratio would have been 0.59% after expense
offset.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. Manuel H. Johnson
Paul Kolton
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Sheldon Curtis
Vice President, Secretary and General Counsel
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
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Dean Witter InterCapital Inc.
Two World Trade Center
New York, New York 10048
The financial statements included herein have been taken from the records of
the Trust without examination by the independent accountants and accordingly
they do not express an opinion thereon.
INTERCAPITAL
INSURED
CALIFORNIA
MUNICIPAL
SECURITIES
SEMIANNUAL REPORT
APRIL 30, 1996
