<PAGE> 1
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES Two World Trade Center,
New York, New York 10048
LETTER TO THE SHAREHOLDERS April 30, 1997
DEAR SHAREHOLDER:
We are pleased to present the semi-annual report on the operations of
InterCapital Insured California Municipal Securities (ICS) for the period ended
April 30, 1997.
Economic growth moderated during the third quarter of 1996, causing fixed-income
yields to move lower through November. However, an acceleration of economic
activity led by consumer spending developed in the fourth quarter of 1996 and
continued into the first quarter of 1997. This contributed to rising interest
rates between December and April. On March 25, 1997, the Federal Reserve Board
raised the federal-funds rate 25 basis points to 5.50 percent in a preemptive
move against a possible acceleration in the rate of inflation. Subsequently, the
fixed-income markets began to anticipate the possibility of additional rate
hikes by the Fed.
MUNICIPAL MARKET CONDITIONS
Municipal yields followed the trend of Treasury yields, but were less volatile.
Long-term insured revenue bond yields moved as low as 5.45 percent in November
1996, before rising to 5.75 percent in April 1997. Similarly, yields on one-year
municipal notes moved from 3.70 to 3.95 percent over the past six months. The
yield curve pick-up for extending maturities from 1 to 30 years increased to 180
basis points.
BOND YIELDS 1994-1997
<TABLE>
<CAPTION>
Insured Municipal
30-Year Insured Revenue Yields
Municipal 30-Year U.S. as a Percentage of
Revenue Yields Treasury Yields U.S. Treasury Yields
<S> <C> <C> <C>
5.45 6.35 0.8586
Jan '94 5.29 6.24 0.8481
5.64 6.66 0.8468
6.19 7.09 0.8728
6.24 7.31 0.854
6.23 7.43 0.8387
6.31 7.61 0.8293
6.15 7.4 0.8314
6.17 7.45 0.828
6.42 7.82 0.8212
6.66 7.97 0.8356
6.99 8 0.8738
6.65 7.88 0.8438
Jan '95 6.42 7.7 0.834
6.12 7.44 0.8222
6.07 7.43 0.8167
6.05 7.34 0.8245
5.84 6.65 0.8784
6 6.62 0.9066
5.99 6.85 0.875
5.98 6.65 0.8997
5.97 6.5 0.9184
5.79 6.33 0.915
5.61 6.13 0.9151
5.49 5.95 0.923
Jan '96 5.42 6.03 0.8989
5.55 6.47 0.8577
5.89 6.67 0.8835
5.94 6.91 0.8601
5.99 6.99 0.8571
5.86 6.87 0.8529
5.77 6.97 0.8278
5.82 7.12 0.8176
5.71 6.92 0.8248
5.6 6.64 0.8431
5.45 6.35 0.8583
5.56 6.64 0.8372
Jan '97 5.63 6.79 0.8293
5.53 6.8 0.8129
5.83 7.1 0.8216
5.74 6.96 0.8251
</TABLE>
Source: Bloomberg L.P.
<PAGE> 2
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
LETTER TO THE SHAREHOLDERS April 30, 1997, continued
The ratio of 30-year insured revenue bond yields to 30-year U.S. Treasury yields
declined from 86 percent at the end of October 1996 to 82 percent in April 1997.
A declining ratio means that municipals have outperformed Treasuries, but have
become relatively more expensive. The ratio has ranged from 81 to 92 percent
over the past three years.
New-issue municipal volume was down 6 percent during the first four months of
1997. However, underwriting volume for the full year is expected to exceed bond
maturities and redemptions. California new-issue underwriting represented 11
percent of national volume.
PERFORMANCE
Over the six-month period ended April 30, 1997, the Trust's net asset value
(NAV) declined from $15.02 to $14.81. Based on this NAV change plus reinvestment
of tax-free dividends totaling $0.41 per share, the Trust's total NAV return was
1.47 percent. ICS's market price on the New York Stock Exchange moved from
$13.50 to $13.875 per share. Based on this change in market price plus
reinvestment of tax-free dividends, ICS's total market return was 5.77 percent.
On April 30, 1997, the Trust was trading at a 6 percent discount to NAV.
Undistributed net investment income available for dividends declined from $0.116
to $0.098 per share.
PORTFOLIO STRUCTURE
The Trust remained fully invested in long-term municipal bonds during the
period. Investments were diversified among 12 long-term sectors and 25 credits.
ICS's average maturity and call
FIVE LARGEST SECTORS AS OF APRIL 30, 1997
[% OF NET ASSETS]
<TABLE>
<S> <C>
TAX ALLOCATION 25%
HOSPITAL 15%
TRANSPORTATION 12%
GENERAL OBLIGATION 9%
MORTGAGE 8%
ALL OTHERS 31%
</TABLE>
Portfolio structure is subject to change.
BOND INSURANCE AS OF APRIL 30, 1997
[% OF TOTAL LONG-TERM PORTFOLIO]
<TABLE>
<S> <C>
MBIA 42%
AMBAC 31%
FSA 13%
FGIC 11%
CONNIE LEE 3%
</TABLE>
Portfolio structure is subject to change.
<PAGE> 3
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
LETTER TO THE SHAREHOLDERS April 30, 1997, continued
protection were 22 years 7 years, respectively. To assure the timely payment of
principal and interest, each position in the portfolio was backed by triple "A"
rated bond insurance.
LOOKING AHEAD
With the collapse of flat-tax proposals, municipal bonds have improved relative
to U.S. Treasury securities. Although tax-free yields are currently somewhat
"rich" in their historical relationship with Treasury yields, the long-term
benefit of tax-exemption remains intact.
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, 1997,
ICS purchased and retired 34,700 shares of beneficial interest at a weighted
average market discount of 7.33 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> 4
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
PORTFOLIO OF INVESTMENTS April 30, 1997 (unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CALIFORNIA TAX-EXEMPT MUNICIPAL BONDS (97.0%)
General Obligation (8.9%)
$ 3,000 California, Various Purpose 03/01/94 (FSA)............................... 5.50% 03/01/20 $ 2,857,470
3,000 Moulton-Niguel Water District, 1993 Refg (MBIA).......................... 5.00 09/01/19 2,677,260
- -------- -----------
6,000 5,534,730
- -------- -----------
Educational Facilities Revenue (2.5%)
1,500 California Educational Facilities Authority, National University Ser 1994
- -------- (Connie Lee)............................................................ 6.20 05/01/21 1,533,180
-----------
Electric Revenue (6.6%)
1,000 Anaheim Public Financing Authority, San Juan 2nd Ser (FGIC).............. 5.75 10/01/22 982,900
3,000 Sacramento Municipal Utility District, 1992 Ser B (MBIA)................. 6.375 08/15/22 3,148,290
- -------- -----------
4,000 4,131,190
- -------- -----------
Hospital Revenue (15.1%)
2,000 Anaheim, Anaheim Memorial Hospital Association COPs (AMBAC).............. 5.125 05/15/20 1,808,360
3,000 California Health Facilities Financing Authority, Catholic Healthcare
West 1994 B (AMBAC)..................................................... 5.00 07/01/21 2,647,350
3,000 California Statewide Communities Development Authority, Sharp Health Care
COPs (MBIA)............................................................. 6.00 08/15/24 3,025,170
2,000 San Mateo County Joint Powers Financing Authority, San Mateo County
Health Center 1994 Ser A (FSA).......................................... 5.75 07/15/22 1,965,840
- -------- -----------
10,000 9,446,720
- -------- -----------
Mortgage Revenue - Multi-Family (5.0%)
3,000 Los Angeles Community Redevelopment Agency, 1994 Ser A (AMBAC)........... 6.45 07/01/17 3,108,810
- -------- -----------
Mortgage Revenue - Single Family (3.2%)
1,990 California Housing Finance Agency, 1995 Ser B (AMT) (AMBAC).............. 6.25 08/01/14 2,017,243
- -------- -----------
Public Facilities Revenue (3.1%)
1,000 Glendale Unified School District, 1994 Ser A COPs (AMBAC)................ 6.00 03/01/19 1,008,080
1,000 Los Angeles Convention & Exhibition Center Authority, 1993 Refg Ser A
(MBIA).................................................................. 5.375 08/15/18 940,180
- -------- -----------
2,000 1,948,260
- -------- -----------
Tax Allocation (25.0%)
3,000 Bay Area Government Association, Pool 1994 Ser A (FSA)................... 6.00 12/15/24 3,032,520
2,000 Brea Redevelopment Agency, 1993 Refg Ser AB (MBIA)....................... 5.75 08/01/23 1,965,240
2,000 Cerritos Public Finance Authority, Los Coyotes Redev Ser 1993 A
(AMBAC)................................................................. 5.75 11/01/22 1,965,860
3,000 Corona Redevelopment Agency, Area A 1994 Refg Ser A (FGIC)............... 6.25 09/01/13 3,148,890
3,000 Pittsburg Redevelopment Agency, Los Medanos Refg Ser 1993 A (AMBAC)...... 5.00 08/01/17 2,699,430
3,000 Yorba Linda Redevelopment Agency, Ser 1993 A (MBIA)...................... 5.25 09/01/23 2,748,180
- -------- -----------
16,000 15,560,120
- -------- -----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 5
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
PORTFOLIO OF INVESTMENTS April 30, 1997 (unaudited) continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Transportation Facilities Revenue (11.6%)
$ 3,000 Los Angeles County Transportation Commission, Second Sr Ser 1992 A
(MBIA).................................................................. 6.00% 07/01/23 $ 3,025,740
San Francisco Airports Commission, San Francisco Int'l Airport
2,000 Second Ser Refg Issue 4 (MBIA).......................................... 6.00 05/01/20 2,018,960
2,000 Second Ser Refg Issue 2 (MBIA).......................................... 6.75 05/01/20 2,176,660
- -------- -----------
7,000 7,221,360
- -------- -----------
Water & Sewer Revenue (7.5%)
2,900 Garden Grove Public Financing Authority, Water Ser 1993 (FGIC)........... 5.50 12/15/23 2,752,419
2,000 Los Angeles, Wastewater Refg Ser 1993 A (MBIA)........................... 5.70 06/01/20 1,954,720
- -------- -----------
4,900 4,707,139
- -------- -----------
Other Revenue (3.2%)
2,000 South Orange County Public Financing District #88-1, 1994 Ser A (MBIA)... 6.00 09/01/18 2,014,140
- -------- -----------
Refunded (5.3%)
3,000 Central Coast Water Authority, Ser 1992 (AMBAC).......................... 6.60 10/01/02++ 3,310,350
- -------- -----------
61,390 TOTAL CALIFORNIA TAX-EXEMPT MUNICIPAL BONDS (Identified Cost $58,068,401)....................... 60,533,242
- -------- -----------
CALIFORNIA TAX-EXEMPT SHORT-TERM MUNICIPAL OBLIGATION (1.3%)
800 California Pollution Control Financing Authority, Southern California
- -------- Edison Co Ser 1986 B (Demand 05/01/97) (Identified Cost $800,000)....... 3.85* 02/28/08 800,000
-----------
$62,190 TOTAL INVESTMENTS (Identified Cost $58,868,401) (a).................................... 98.3% 61,333,242
========
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES........................................... 1.7 1,044,029
---- -----------
NET ASSETS.............................................................................. 100.0% $62,377,271
===== ===========
</TABLE>
- ---------------------
<TABLE>
<C> <S>
AMT Alternative Minimum Tax.
COPs Certificates of Participation.
++ Prerefunded to call date shown.
* Current coupon of variable rate demand obligation.
(a) The aggregate cost for federal income tax purposes approximates identified cost. The aggregate gross
unrealized appreciation is $2,492,372 and the aggregate gross unrealized depreciation is $27,531, resulting
in net unrealized appreciation of $2,464,841.
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.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 6
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1997 (unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $58,868,401)......................................... $61,333,242
Cash................................................................... 75,086
Interest receivable.................................................... 1,007,445
Deferred organizational expenses....................................... 14,650
Prepaid expenses....................................................... 11,763
-----------
TOTAL ASSETS....................................................... 62,442,186
-----------
LIABILITIES:
Investment management fee payable...................................... 20,185
Accrued expenses....................................................... 44,730
-----------
TOTAL LIABILITIES.................................................. 64,915
-----------
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, 4,210,513 shares outstanding)......................... 59,528,495
Net unrealized appreciation............................................ 2,464,841
Accumulated undistributed net investment income........................ 411,091
Accumulated net realized loss.......................................... (27,156)
-----------
NET ASSETS......................................................... $62,377,271
===========
NET ASSET VALUE PER COMMON SHARE
($62,377,271 divided by 4,210,513 common shares outstanding).......... $14.81
======
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 7
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
FINANCIAL STATEMENTS, continued
STATEMENT OF OPERATIONS
For the six months ended April 30, 1997 (unaudited)
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME......................................................... $1,805,993
----------
EXPENSES
Investment management fee............................................... 109,943
Professional fees....................................................... 24,609
Transfer agent fees and expenses........................................ 9,504
Registration fees....................................................... 8,408
Shareholder reports and notices......................................... 8,375
Trustees' fees and expenses............................................. 7,609
Organizational expenses................................................. 3,966
Custodian fees.......................................................... 1,825
Other................................................................... 3,716
----------
TOTAL EXPENSES...................................................... 177,955
LESS: EXPENSE OFFSET................................................ (1,821)
----------
NET EXPENSES........................................................ 176,134
----------
NET INVESTMENT INCOME............................................... 1,629,859
----------
NET REALIZED AND UNREALIZED LOSS:
Net realized loss....................................................... (377)
Net change in unrealized appreciation................................... (811,526)
----------
NET LOSS............................................................ (811,903)
----------
NET INCREASE............................................................ $ 817,956
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 8
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
FINANCIAL STATEMENTS, continued
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX
MONTHS ENDED FOR THE YEAR
APRIL 30, ENDED
1997 OCTOBER 31, 1996
- -------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income................................ $ 1,629,859 $ 3,333,747
Net realized loss.................................... (377) (25,529)
Net change in unrealized appreciation................ (811,526) 555,060
----------- -----------
NET INCREASE..................................... 817,956 3,863,278
----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO COMMON SHAREHOLDERS
FROM:
Net investment income................................ (1,710,574) (3,230,079)
Net realized gain.................................... -- (38,327)
----------- -----------
TOTAL............................................ (1,710,574) (3,268,406)
----------- -----------
Decrease from transactions in common shares of
beneficial interest................................. (483,352) (1,310,404)
----------- -----------
NET DECREASE..................................... (1,375,970) (715,532)
NET ASSETS:
Beginning of period.................................. 63,753,241 64,468,773
----------- -----------
END OF PERIOD
(Including undistributed net investment income of
$411,091 and $491,806, respectively)............. $62,377,271 $63,753,241
=========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 9
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
NOTES TO FINANCIAL STATEMENTS April 30, 1997 (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's investment objective is to
provide current income which is exempt from both federal and California income
taxes. The Trust was organized as a Massachusetts business trust on October 14,
1993 and commenced operations on February 28, 1994.
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 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.
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
<PAGE> 10
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
NOTES TO FINANCIAL STATEMENTS April 30, 1997 (unaudited) continued
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 Trust's common shares in the
amount of $40,000 which have been reimbursed by the Trust for the full amount
thereof. 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 AGREEMENT
Pursuant to an Investment Management Agreement, the Trust pays the Investment
Manager 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, 1997 aggregated $500,750.
Dean Witter Trust Company, an affiliate of the Investment Manager, is the
Trust's transfer agent. At April 30, 1997, the Trust had transfer agent fees and
expenses payable of approximately $4,300.
<PAGE> 11
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
NOTES TO FINANCIAL STATEMENTS April 30, 1997 (unaudited) continued
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 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, 1995......................................................... 4,343,213 $43,432 $61,278,819
Treasury shares purchased and retired (weighted average discount 10.42%)*......... (98,000) (980) (1,309,424)
--------- ------- -----------
Balance, October 31, 1996......................................................... 4,245,213 42,452 59,969,395
Treasury shares purchased and retired (weighted average discount 7.33%)*.......... (34,700) (347) (483,005)
--------- ------- -----------
Balance, April 30, 1997........................................................... 4,210,513 $42,105 $59,486,390
========= ======= ===========
</TABLE>
- ---------------------
* The Trustees have voted to retire the shares purchased.
6. FEDERAL INCOME TAX STATUS
At October 31, 1996, the Trust had a net capital loss carryover of approximately
25,500 which will be available through October 31, 2004 to offset future capital
gains to the extent provided by regulations.
<PAGE> 12
INTERCAPITAL INSURED CALIFORNIA MUNICIPAL SECURITIES
NOTES TO FINANCIAL STATEMENTS April 30, 1997 (unaudited) continued
7. DIVIDENDS TO COMMON SHAREHOLDERS
The Trust declared the following dividends from net investment income:
<TABLE>
<CAPTION>
DECLARATION AMOUNT RECORD PAYABLE
DATE PER SHARE DATE DATE
- -------------- --------- ------------- -------------
<S> <C> <C> <C>
April 29, 1997 $0.0675 May 9, 1997 May 23, 1997
May 27, 1997 $0.0675 June 6, 1997 June 20, 1997
</TABLE>
<PAGE> 13
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 FOR THE YEAR ENDED FEBRUARY 28, 1994*
MONTHS ENDED OCTOBER 31,** THROUGH
APRIL 30, --------------------- OCTOBER 31,
1997** 1996 1995 1994**++
---------------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.............. $ 15.02 $ 14.84 $ 13.15 $ 14.06
-------- -------- -------- --------
Net investment income............................. 0.39 0.78 0.76 0.41
Net realized and unrealized gain (loss)........... (0.20) 0.12 1.59 (0.92)
-------- -------- -------- --------
Total from investment operations.................. 0.19 0.90 2.35 (0.51)
-------- -------- -------- --------
Less dividends and distributions from:
Net investment income.......................... (0.41) (0.75) (0.72) (0.36)
Net realized gain.............................. -- (0.01) -- --
-------- -------- -------- --------
Total dividends and distributions................. (0.41) (0.76) (0.72) (0.36)
-------- -------- -------- --------
Anti-dilutive effect of acquiring treasury
shares........................................... 0.01 0.04 0.04 0.04
-------- -------- -------- --------
Offering costs charged against capital............ -- -- 0.02 (0.08)
-------- -------- -------- --------
Net asset value, end of period.................... $ 14.81 $ 15.02 $ 14.84 $ 13.15
======== ======== ======== ========
Market value, end of period....................... $ 13.875 $ 13.50 $ 12.50 $ 11.00
======== ======== ======== ========
TOTAL INVESTMENT RETURN+.......................... 5.77%(1) 14.33% 20.51% (24.55)%(1)
RATIOS TO AVERAGE NET ASSETS:
Total expenses.................................... 0.57%(2)(3) 0.58%(3) 0.72%(3) 0.65%(2)
Net investment income............................. 5.19%(2) 5.22% 5.35% 4.45%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands........... $62,377 $63,753 $64,469 $58,822
Portfolio turnover rate........................... -- -- 3% --
</TABLE>
- ---------------------
* 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) Does not reflect the effect of expense offset of 0.01%.
SEE NOTES TO FINANCIAL STATEMENTS
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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
Barry Fink
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, 1997
