<PAGE>
INTERCAPITAL INSURED MUNICIPAL SECURITIES
Two World Trade Center
New York, New York 10048
DEAR SHAREHOLDER:
- - - - - --------------------------------------------------------------------------------
This is the first report to shareholders of InterCapital Insured Municipal
Securities (NYSE symbol: IMS) 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), 9.5 million common shares were sold producing net proceeds of $133.57
million. The Trust commenced operations during
a tumultuous period for fixed-income securities by cautiously averaging into the
municipal market. The portfolio was 74.3 percent invested in long-term, insured,
tax-exempt bonds by the end of April. 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. An ARPS issuance will be considered when
market conditions become favorable. The Trust's first dividend of $0.0625 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 $0.75 per share. The
Trust's current annualized yield is 5.00 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
[FN]
- - - - - ------------------
* 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>
approximately $260 billion 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
specific municipal sectors and 27 separate issuers. The three largest sectors
represented in the portfolio, transportation revenue, electric revenue and
general obligation bonds, accounted for 44 percent of net assets. The average
maturity and call protection of the Trust's long-term holdings were 17 years and
10 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 credit long-term enhancements was:
Municipal Bond Insurance Percent
------------------------- --------
AMBAC Indemnity Corporation (AMBAC) 26.5
Connie Lee Insurance Company (Connie Lee) 2.8
Financial Guaranty Insurance Company (FGIC) 18.8
Municipal Bond Investors Assurance Corporation (MBA) 51.9
-------
100.0%
=======
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 Municipal Securities and
look forward to continuing to serve your investment needs and objectives in the
months and years ahead.
Very truly yours,
/S/ C. Fiumefreddo
Charles A. Fiumefreddo
Chairman of the Board
<PAGE>
<TABLE>
INTERCAPITAL INSURED MUNICIPAL SECURITIES
PORTFOLIO OF INVESTMENTS April 30, 1994 (unaudited)
- - - - - --------------------------------------------------------------------------------
<CAPTION>
Principal
Amount (in Coupon Maturity
thousands) Rate Date Value
---------- --------- --------- --------
<S> <C> <C> <C>
MUNICIPAL BONDS (74.3%)
GENERAL OBLIGATION (13.1%)
$ 3,920 Kodiak Island Borough,
Alaska, Ser 1994 A (AMBAC Insured)... 5.50 % 2/15/14 $ 3,571,708
5,000 Moulton Niguel Water District,
California, 1993 Refg
(MBIA Insured) .................... 5.00 9/ 1/19 4,165,550
3,000 Chicago, Illinois, Refg Ser 1993 B...
(AMBAC Insured) ................... 5.125 1/ 1/22 2,554,560
8,860 Washoe County School District,
Nevada, Ltd Tax School Bldg
Ser 4/1/94 A (MBIA Insured)....... 5.75 6/ 1/13 8,435,783
------- ----------
20,780 18,727,601
------- ----------
EDUCATIONAL FACILITIES REVENUE (2.8%)
2,000 Chicago State University, Illinois,
Ser 1994 (MBIA Insured) .......... 6.15 12/ 1/23 1,949,360
2,350 New York State Dormitory Authority,
Fordham University Ser 1994
(FGIC Insured) .................... 5.50 7/ 1/23 2,114,601
------- ----------
4,350 4,063,961
------- ---------
ELECTRIC REVENUE (14.8%)
4,000 Anchorage, Alaska, Electric Refg
Ser 1993 (MBIA Insured) .......... 6.20 12/ 1/13 3,977,280
6,000 Kansas City, Kansas Utility Refg &
Impr Ser 1994
(FGIC Insured)(a) .............. 6.375 9/ 1/23 6,042,600
5,000 Piedmont Municipal Power Agency,
South Carolina, Refg Ser 1993
(MBIA Insured).................... 5.375 1/ 1/25 4,356,700
3,000 Utah Municipal Power Agency,
Refg Ser 1993 A (FGIC insured) 5.25 7/ 1/18 2,561,850
5,000 Bedford Virginia, Hydro Ser 1994
(AMBAC Insured)................... 5.25 6/ 1/25 4,293,450
------- ----------
23,000 21,231,880
------- ----------
HOSPITAL REVENUE (8.6%)
3,000 Morgan County Health Care Authority,
Alabama, Decatur General
Hospital Ser 1994
(Connie Lee Insured) (a) .......... 6.375 3/ 1/24 2,942,760
4,000 California Statewide Communities
Development Authority, Sharp
Health Care Obligated Group COPs
(MBIA Insured) .................... 6.00 8/15/24 3,853,800
3,000 Volusia County Health Facilities
Authority, Florida, Memorial
Health Refg & Impr Ser 1994
(AMBAC Insured) ................... 5.75 11/15/20 2,788,410
3,105 Massachusetts Health & Educational
Facilities Authority, Lahey
Clinic Medical Center Ser B
(MBIA Insured) .................... 5.375 7/ 1/23 2,723,458
------- -----------
13,105 12,308,428
------- -----------
INDUSTRIAL DEVELOPMENT/POLLUTION
CONTROL REVENUE (4.9%)
5,550 Hawaii Department Budget & Finance,
Hawaiian Electric Co Inc
Ser 1992 (AMT) (MBIA Insured)....... 6.55 12/ 1/22 5,617,155
1,500 Pennsylvania Industrial Development
Authority, Ser 1994
(AMBAC Insured) (a) ................ 5.50 1/ 1/14 1,370,325
------- ----------
7,050 6,987,480
------- ----------
</TABLE>
<PAGE>
<TABLE>
INTERCAPITAL INSURED MUNICIPAL SECURITIES
PORTFOLIO OF INVESTMENTS April 30, 1994 (unaudited) (continued)
- - - - - --------------------------------------------------------------------------------
<CAPTION>
Principal
Amount (in Coupon Maturity
thousands) Rate Date Value
---------- --------- --------- --------
<S> <C> <C> <C>
PUBLIC FACILITIES REVENUE (2.1%)
$ 1,000 Hillsborough County School Board,
Florida, Ser 1994 COPs
(MBIA Insured) (a) ............... 6.00% 7/ 1/14 $ 982,730
2,000 Michigan Municipal Bond Authority,
Ser 1994 A (FGIC Insured) ........ 6.00 12/ 1/13 1,961,480
------- ----------
3,000 2,944,210
------- ----------
TRANSPORTATION FACILITIES REVENUE (16.2%)
5,225 San Francisco Airports Commission,
San Francisco Intl Airport
Second Ser Refg Issue (MBIA Insured).. 6.75 5/ 1/20 5,409,599
3,000 Atlanta, Georgia, Airport Ser 1994 B
(AMT) (AMBAC Insured) ................ 6.00 1/ 1/21 2,880,000
2,875 Hawaii Airports System, Third Refg
Ser of 1994 (AMT) (AMBAC Insured)..... 5.75 7/ 1/09 2,803,758
Chicago Midway Airport, Illinois,
3,000 1994 Ser A (AMT) (MBIA Insured) (a)... 6.25 1/ 1/14 2,933,280
6,665 1994 Ser A (AMT) (MBIA Insured) (a)... 6.25 1/ 1/24 6,395,600
3,000 Pennsylvania Turnpike Commission,
Oil Franchise Tax Ser A of 1994
(AMBAC Insured) (a)................... 6.00 12/ 1/19 2,856,930
------- ----------
23,765 23,279,167
------- ----------
WATER & SEWER REVENUE (6.8%)
5,000 Central Coast Water Authority,
California, Ser 1992
(AMBAC Insured) ..................... 6.60 10/ 1/22 5,116,850
5,000 Los Angeles, California, Wastewater
Refg Ser 1993 A (MBIA Insured) ...... 5.70 6/ 1/20 4,617,800
------- ----------
10,000 9,734,650
------- ----------
OTHER REVENUE (5.1%)
Indianapolis, Indiana, Gas Utility
3,000 Refg Ser 1993 A (FGIC Insured)..... 5.375 6/ 1/21 2,623,860
5,000 Refg Ser 1994 A (FGIC Insured)..... 5.875 6/ 1/24 4,682,600
------- -----------
8,000 7,306,460
------- -----------
113,050 TOTAL MUNICIPAL BONDS (Identified Cost $108,594,491) 106,583,837
------- -----------
SHORT-TERM MUNICIPAL OBLIGATIONS (41.5%)
6,500 Connecticut Development Authority,
Connecticut Light & Power Co
1993 A Ser (Tender 5/4/94) .......... 3.25* 9/ 1/28 6,500,000
6,000 Volusia County Health Facilities
Authority, Florida, Pooled
Hospital Loan (FGIC Insured)
(Tender 5/4/94)...................... 3.25* 11/ 1/15 6,000,000
6,300 Illinois Health Facilities Authority,
Franciscan Sisters Health
Corp Ser 1993 (Tender 5/2/94)........ 3.20* 1/ 1/18 6,300,000
6,500 Daviess County, Kentucky,
Scott Paper Co Ser 1993 A (AMT)
(Tender 5/2/94)...................... 3.10* 12/ 1/23 6,500,000
5,000 Louisiana Offshore Terminal
Authority, LOOP Inc Ser 1992 A
(Tender 5/2/94)...................... 3.00* 9/ 1/08 5,000,000
</TABLE>
<PAGE>
<TABLE>
INTERCAPITAL INSURED MUNICIPAL SECURITIES
PORTFOLIO OF INVESTMENTS April 30, 1994 (unaudited) (continued)
- - - - - --------------------------------------------------------------------------------
<CAPTION>
Principal
Amount (in Coupon Maturity
thousands) Rate Date Value
---------- --------- --------- ----------
<S> <C> <C> <C>
$ 6,500 New York City, New York,
1992 D Ser (FGIC Insured)
(Tender 5/2/94) ................. 2.85*% 2/ 1/22 $ 6,500,000
5,200 Schuykill County Industrial
Development Authority,
Pennsylvania, Northeastern
Power Co Ser 1985 (AMT)
(Tender 5/2/94)................... 3.15* 12/ 1/11 5,200,000
5,000 Bexar County, Texas, Bexar Air
Force Village II Ser 1985 B
(Tender 5/5/94)................... 2.90* 3/ 1/12 5,000,000
6,500 Gulf Coast Waste Disposal
Authority, Texas, Amoco Oil Co
Ser 1992 (Tender 5/2/94).......... 2.90* 10/ 1/12 6,500,000
6,000 Washington Health Care Facilities
Authority, Sisters of Providence
Ser 1985 C (Tender 5/2/94)........ 2.95* 10/ 1/05 6,000,000
------- ---------
59,500 TOTAL SHORT-TERM MUNICIPAL OBLIGATIONS
------- (Identified Cost $59,500,000) ....................... 59,500,000
----------
TOTAL INVESTMENTS (Identified Cost
$172,550 $168,094,491) (b) ......................... 115.8% 166,083,837
========
LIABILITIES IN EXCESS OF CASH AND
OTHER ASSETS .............................. (15.8) (22,649,726)
------- ------------
NET ASSETS .................................. 100.0% $143,434,111
------- ------------
<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 $168,094,491; the
aggregate gross unrealized appreciation is $436,555 and the aggregate
gross unrealized depreciation is $2,447,209, resulting in net unrealized
depreciation of $2,010,654.
See Notes to Financial Statements
</TABLE>
<TABLE>
GEOGRAPHIC SUMMARY OF INVESTMENTS
Based on Market Value as a Percent of Net Assets
April 30, 1994 (unaudited)
- - - - - --------------------------------------------------------------------------------
<S> <C>
Alabama ................. 2.1%
Arkansas ................ 5.3
California .............. 16.2
Connecticut ............. 4.5
Florida ................. 6.8
Georgia ................. 2.0
Hawaii .................. 5.9
Illinois ................ 14.0
Indiana ................. 5.1
Kansas .................. 4.2
Kentucky ................ 4.5
Louisiana ............... 3.5
Massachusetts ........... 1.9
Michigan ................ 1.4
Nevada .................. 5.9
New York ................ 6.0
Pennsylvania ............ 6.5
South Carolina .......... 3.0
Texas ................... 8.0
Utah .................... 1.8
Virginia ................ 3.0
Washington .............. 4.2
------
Total .................. 115.8%
======
</TABLE>
- - - - - --------------------------------------------------------------------------------
<PAGE>
<TABLE>
INTERCAPITAL INSURED MUNICIPAL SECURITIES
FINANCIAL STATEMENTS
- - - - - --------------------------------------------------------------------------------
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1994 (unaudited)
- - - - - --------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $168,094,491) (Note 1) .................... $ 166,083,837
Cash .......................................................... 607,747
Interest receivable ........................................... 1,569,091
Deferred organizational expenses (Note 1) ..................... 42,530
Prepaid expenses .............................................. 1,458
------------
Total Assets .................................................. 168,304,663
------------
LIABILITIES:
Payable for investments purchased ............................. 24,335,833
Offering expenses payable (Note 1) ............................ 406,000
Investment management fee payable (Note 2) .................... 48,097
Organizational expenses payable (Note 1) ...................... 44,000
Accrued expenses (Note 3) 36,622
----------
Total Liabilities ............................................. 24,870,552
----------
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, 10,332,113 shares outstanding
(Note 5))................................................... 144,863,509
Net unrealized depreciation on investments .................... (2,010,654)
Undistributed net investment income ........................... 581,256
------------
Net Assets .................................................... $143,434,111
============
Net Asset Value Per Common Share,
10,332,113 shares outstanding, (unlimited
shares athorized of $.01 par value) ........................ $13.88
======
</TABLE>
<TABLE>
- - - - - --------------------------------------------------------------------------------
<CAPTION>
STATEMENT OF OPERATIONS (For the period February
28, 1994 through April 30, 1994 (Note 1)(unaudited)
- - - - - --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Interest Income ............................................. $ 704,920
----------
Expenses
Investment management fee (Note 2) ........................ 80,110
Professional fees ......................................... 12,194
Shareholder reports and notices .......................... 10,802
Transfer agent fees and expenses .......................... 10,761
Registration fees ......................................... 4,911
Trustees' fees and expenses ............................... 2,141
Organizational expenses (Note 1) .......................... 1,470
Other ..................................................... 1,275
----------
Total Expenses ......................................... 123,664
----------
Net Investment Income ................................ 581,256
----------
NET UNREALIZED LOSS ON
INVESTMENTS (Note 1):
Net unrealized depreciation on investments................ (2,010,654)
------------
Net Decrease in Net Assets
Resulting from Operations ......................... $(1,429,398)
============
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
For the period February 28, 1994 through April 30, 1994 (Note 1) (unaudited)
- - - - - -------------------------------------------------------------------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income .................................... $ 581,256
Net unrealized depreciation on investments ............... (2,010,654)
------------
Net decrease in net assets resulting
from operations .................................... (1,429,398)
Transactions in common shares of beneficial interest
(Note 5) ............................................. 144,763,500
------------
Total increase ................................................ 143,334,102
NET ASSETS:
Beginning of period ........................................ 100,009
------------
End of period (including undistributed net investment
income of $581,256) ..................................... $143,434,111
============
See Notes to Financial Statements
</TABLE>
<PAGE>
INTERCAPITAL INSURED MUNICIPAL SECURITIES
NOTES TO FINANCIAL STATEMENTS (unaudited)
- - - - - --------------------------------------------------------------------------------
1. Organization and Accounting Policies--InterCapital Insured Municipal
Securities (the "Trust") is registered under the Investment Company Act of 1940,
as amended, as a 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 related 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 that 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 that they exceed net investment income and net realized capital
gains for tax purposes, they are reported as distributions of paid-in-
capital.
E. Organizational and Offering Expenses--The Trust's Investment Manager
paid the organizational and offering expenses of the Trust's common shares
in the amount of $44,000 and $406,000, 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 "Investment
Manager"), the Trust pays its Investment Manager a management fee, calculated
weekly and payable monthly, by applying the annual rates 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 book 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.
<PAGE>
INTERCAPITAL INSURED MUNICIPAL SECURITIES
NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)
- - - - - --------------------------------------------------------------------------------
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
$108,591,972 and $0, respectively.
Dean Witter Trust Company, an affiliate of the Investment Manager, is the
Trust's transfer agent. At April 30, 1994, the Trust had transfer agent fees and
expenses payable of approximately $7,600.
Dean Witter Distributors Inc., the Trust's principal underwriter and an
affiliate of the Investment Manager, has informed the Trust that it received
approximately $9,471,000 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.
5. Common Shares of Beneficial Interest--Transactions in common shares of
beneficial interest were as follows:
<TABLE>
<CAPTION>
Capital
Par Value Paid in
of Excess of
Shares 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, 1994* .................. 9,500,000 95,000 133,069,000
Shares issued on April 7, 1994 to cover
over-allotment .......................... 825,000 8,250 11,591,250
---------- -------- ------------
Balance, April 30, 1994 ................... 10,332,113 $103,321 $144,760,188
========== ======== ============
<FN>
- - - - - ----------
*Net of offering costs of $406,000.
6. Dividends to Common Shareholders--The Trust has declared the following
dividends from net investment income:
</TABLE>
<TABLE>
<CAPTION>
Declaration Amount Per Record Payable
Date Share Date Date
---------- ---------- ---------- ----------
<S> <C> <C> <C>
April 26, 1994 $0.0625 May 6, 1994 May 20, 1994
May 31, 1994 $0.0625 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 .............................. $ 705 $ 0.07
Net investment income .............................. 581 0.06
Net unrealized loss on investments ................... (2,011) (0.20)
<FN>
- - - - - --------------
**Totals expressed in thousands of dollars.
**For the period February 28, 1994 (commencement of operations) through April
30, 1994.
</TABLE>
<PAGE>
<TABLE>
INTERCAPITAL INSURED MUNICIPAL SECURITIES
FINANCIAL HIGHLIGHTS (unaudited)
- - - - - --------------------------------------------------------------------------------
Selected ratios and per share data for a common share of beneficial interest
outstanding throughout the period:
<CAPTION>
For the period
February 28, 1994*
through
April 30, 1994
-------------
<S> <C>
Per Share Operating Performance:
Net asset value, beginning of period ....................... $14.06
-------
Net investment income .................................... 0.06
Net unrealized loss on investments ....................... (0.20)
-------
Total from investment operations ........................... (0.14)
-------
Offering costs charged against capital ..................... (0.04)
-------
Net asset value, end of period ............................. $13.88
=======
Market value, end of period ................................ $14.25
=======
Total Investment Return ....................................... (5.00)%(1)
Ratios/Supplemental Data:
Net assets, end of period (in thousands) ................... $143,434
Ratios to average net assets of common shareholders:
Total expenses ........................................... 0.54%(2)
Net investment income available to common shareholders ... 2.54%(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.
See Notes to Financial Statements
</TABLE>
- - - - - --------------------------------------------------------------------------------
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.
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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
MUNICIPAL
SECURITIES
Semiannual Report
April 30, 1994
