<PAGE>
InterCapital Insured Municipal Securities
Two World Trade Center
New York, New York 10048
Dear Shareholder:
- --------------------------------------------------------------------------------
Fixed-income market conditions have steadily improved since late last year.
Bonds began to rally in November 1994 on signs of slower economic growth in the
wake of a progressively tighter Federal Reserve monetary policy. The recent
trend toward lower long-term interest rates is in marked contrast to most of
1994 when rapidly rising rates created one of the most severe bear markets for
bonds in recent history.
MUNICIPAL MARKET CONDITIONS
Long-term municipal bond yields, as tracked by The Bond Buyer Revenue Bond
Index,* dropped from a high of 7.37 percent in November 1994 to 6.29 percent at
the end of April 1995. This 108 basis point decline in yield corresponded to a
13 percent price increase for 30-year municipal bonds. Short- term
municipal interest rates remained basically unchanged over the past six
months. Thus, the yield spread or difference between short-term and long-term
municipal bond interest rates, narrowed as long rates declined.
The seasonal demand for municipals in December more than offset the
uncertainty caused by the Orange County, California bankruptcy filing. The
market anticipated cash inflows from the reinvestment of coupons and the
proceeds from bond calls and maturities in January at a time of scarce supply.
Tax-exempt bonds outperformed U.S. Treasury bonds through February 1995. The
ratio of the Revenue Bond Index yield to the 30-year U.S. Treasury yield fell
from a high of 92 percent in November to 84 percent at the end of February. A
declining ratio means that municipal bond prices have been stronger than U.S.
Treasury prices. Tax reform proposals that advanced the concept of a flat tax
were partially responsible for municipals underperforming Treasuries in March
and April. By the end of April, the Revenue/Treasury yield ratio had risen to 86
percent.
The pace of new-issue underwriting over the first four months of 1995 was
40 percent below the same period last year. With bond maturities and calls
estimated to exceed new issues coming to market in 1995 the outstanding supply
of municipal securities is expected to decline. This imbalance should continue
to strengthen municipal market conditions.
PERFORMANCE
The net asset value (NAV) of InterCapital Insured Municipal Securities (IMS)
increased from $13.20 to $14.20 per share during six month period ended April
30, 1995. Based on this NAV change plus reinvestment of tax-free dividends
totaling $0.375 per share, the Trust's total NAV return for the period was 10.98
percent. Concurrently, the Trust's market price on the New York Stock Exchange
rose from $11.125 to $12.375 per share. Based on this stock price change and
reinvestment of dividends, the Trust's total market return for the period was
14.75 percent. The Trust began the year trading at a 15.7 percent discount to
NAV and closed at a 12.9 percent discount. The monthly dividend was maintained
at $0.0625 per share.
[FN]
- ---------
* 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 and AA+ to A- by Standard &
Poor's.
<PAGE>
At the end of the period, the Trust had undistributed net investment income of
$0.078 per share available for future distributions, versus $0.058 per share on
October 31, 1994. This dividend reserve or "cushion" helps sustain the Trust's
current monthly dividend.
PORTFOLIO STRUCTURE
As of April 30, 1995, the IMS's long-term investments were diversified among
10 municipal sectors and 36 issuers. The three largest sectors -- electric
revenue, transportation facilities revenue and general obligation -- represented
57 percent of net assets. The average maturity and call protection of the
Trust's long-term holdings were 25 years and 9 years, respectively. At the end
of the period, the Trust's net assets totaled $136 million.
Each position in the portfolio was backed by bond insurers rated triple "A" by
Moody's Investors Service, Inc. and/or by Standard & Poor's Corp. Bond insurance
supports timely payment of principal and interest. As of April 30, 1995, the
distribution of credit enhancements was:
<TABLE>
<S> <C>
Municipal Bond Insurance Percent
------------------------- --------
AMBAC Indemnity Corporation (AMBAC) 37%
College Construction Loan Insurance Association (Connie Lee) 2
Financial Guaranty Insurance Company (FGIC) 16
Municipal Bond Investors Assurance Corporation (MBIA) 45
LOOKING AHEAD
Slower economic growth in 1995 and the extent of the Federal Reserve Board's
previous interest rate moves have improved bond market expectations. Investor
demand for municipal securities should also be sustained by significant bond
maturities, calls for redemption and diminished new-issue supply. Market
conditions and portfolio structure are among the factors that will continue to
determine the Trust's future level of income and influence its market price.
The Trust's procedure for reinvestment of all dividends and distribution on
common shares is through purchase 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, 1995,
the Trust purchased 430,300 shares of common stock at a weighted average
discount of 11.84 percent.
We appreciate your ongoing support of InterCapital Insured 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>
</TABLE>
<TABLE>
INTERCAPITAL INSURED MUNICIPAL SECURITIES
PORTFOLIO OF INVESTMENTS April 30, 1995 (unaudited)
- --------------------------------------------------------------------------------
<CAPTION>
Principal
Amount (in Coupon Maturity
thousands) Rate Date Value
---------- -------- -------- -------
<S> <C> <C> <C>
MUNICIPAL BONDS (97.6%)
GENERAL OBLIGATION (13.9%)
$3,920 Kodiak Island Borough, Alaska,
Ser 1994 A (AMBAC) ............ 5.50% 02/15/14 $ 3,671,119
5,000 Moulton Niguel Water District,
California, 1993 Refg (MBIA) .. 5.00 09/01/19 4,190,250
3,000 Chicago, Illinois, Refg
Ser 1993 B (AMBAC) ............ 5.125 01/01/22 2,578,080
8,860 Washoe County School District,
Nevada, Ltd Tax School Bldg
Ser 4/01/94 A (MBIA) .......... 5.75 06/01/13 8,457,136
- ------- ----------
20,780 18,896,585
- ------- ----------
EDUCATIONAL FACILITIES REVENUE (8.7%)
2,000 Chicago State University, Illinois,
Ser 1994 (MBIA) ............... 6.15 12/01/23 1,937,160
3,000 New Hampshire Higher Educational
& Health Facilities Authority,
The Hitchcock Clinic Ser 1994 (MBIA) 6.00 07/01/24 2,872,500
2,350 New York State Dormitory Authority,
Fordham University
Ser 1994 (FGIC) ................. 5.50 07/01/23 2,153,752
2,000 Rhode Island Health & Educational
Building Corporation,
Providence College Ser 1993 (MBIA) 5.60 11/01/22 1,810,840
3,000 Wisconsin Health & Educational
Facilities Authority, Marquette.. 6.50 12/01/19 3,048,690
University Ser 1994 (FGIC)
- -------- ----------
12,350 11,822,942
- -------- ----------
ELECTRIC REVENUE (24.2%)
4,000 Anchorage, Alaska, Electric
Refg Ser 1993 (MBIA) ............ 6.20 12/01/13 4,017,520
5,000 Sacramento Municipal Utility
District, California, Refg 1994
Ser I (MBIA) .................... 6.00 01/01/24 4,853,150
3,000 Municipal Electric Authority of
Georgia, Power Ser EE (AMBAC) .... 6.00 01/01/22 2,914,230
5,000 Kansas City, Kansas Utility
Refg & Impr Ser 1994 (FGIC) ..... 6.375 09/01/23 5,110,800
5,000 Piedmont Municipal Power Agency,
South Carolina, Refg
Ser 1993 (AMBAC) ................ 5.375 01/01/25 4,461,350
4,730 Utah Municipal Power Agency,
Refg Ser 1993 A (FGIC) .......... 5.25 07/01/18 4,175,502
5,000 Bedford, Virginia, Hydro
Ser 1994 (AMBAC) ................ 5.25 06/01/25 4,386,150
3,000 Tacoma, Washington, Electric
Refg 1994 (FGIC) ................ 6.25 01/01/15 3,018,240
- ------- ----------
34,730 32,936,942
- ------- ----------
HOSPITAL REVENUE (10.2%)
3,000 Morgan County Health Care
Authority, Alabama, Decatur
General Hospital Ser 1994
(Connie Lee) ................... 6.375 03/01/24 2,974,230
4,000 California Statewide Communities
Development Authority, Sharp
Health Care Obligated Group
COPs (MBIA) ................... 6.00 08/15/24 3,865,880
3,000 Volusia County Health Facilities
Authority, Florida, Memorial
Health Refg & Impr Ser
1994 (AMBAC) .................. 5.75 11/15/20 2,842,590
1,500 Illinois Health Facilities
Authority, University of Chicago
Hospital Ser 1994 (MBIA) ...... 6.125 08/15/21 1,449,510
3,105 Massachusetts Health & Educational
Facilities Authority, Lahey
Clinic Medical Center
Ser B (MBIA) .................. 5.375 07/01/23 2,754,228
- ------- ----------
14,605 13,886,438
- ------- ----------
</TABLE>
<PAGE>
<TABLE>
INTERCAPITAL INSURED MUNICIPAL SECURITIES
PORTFOLIO OF INVESTMENTS April 30, 1995 (unaudited) (continued)
- --------------------------------------------------------------------------------
<CAPTION>
Principal
Amount (in Coupon Maturity
thousands) Rate Date Value
---------- -------- -------- -------
<S> <C> <C> <C>
INDUSTRIAL DEVELOPMENT/POLLUTION
CONTROL REVENUE (5.2%)
$5,550 Hawaii Department Budget & Finance,
Hawaiian Electric Co Inc
Ser 1992 (AMT) (MBIA) ........... 6.55% 12/01/22 $ 5,656,227
1,500 Pennsylvania Industrial
Development Authority,
Ser 1994 (AMBAC) ................. 5.50 01/01/14 1,416,285
- ------- -----------
7,050 7,072,512
- ------- -----------
MORTGAGE REVENUE--MULTI-FAMILY (2.2%)
3,000 Los Angeles Community Redevelopment
- ------- Agency, California
Refg Ser 1994 A (AMBAC) ......... 6.55 01/01/27 3,039,960
-----------
PUBLIC FACILITIES REVENUE (2.2%)
1,000 Hillsborough County School Board,
Florida, Ser 1994 COPs (MBIA) ... 6.00 07/01/14 1,000,700
2,000 Michigan Municipal Bond Authority,
Ser 1994 A (FGIC) ............... 6.00 12/01/13 1,971,220
- ------- -----------
3,000 2,971,920
- ------- -----------
TRANSPORTATION FACILITIES REVENUE (19.0%)
5,225 San Francisco Airports Commission,
San Francisco Intl Airport
Second Ser Refg (MBIA) .......... 6.75 05/01/20 5,504,538
3,000 Atlanta, Georgia, Airport Ser
1994 B (AMT) (AMBAC) ............ 6.00 01/01/21 2,863,860
2,875 Hawaii Airports System, Third
Refg Ser of 1994 (AMT) (AMBAC) .. 5.75 07/01/09 2,822,847
Chicago Midway Airport, Illinois,
3,000 1994 Ser A (AMT) (MBIA) ......... 6.25 01/01/14 2,947,770
4,000 1994 Ser A (AMT) (MBIA) ......... 6.25 01/01/24 3,890,440
5,000 Regional Transportation Authority,
Illinois, Ser 1994 A (AMBAC) .... 6.25 06/01/24 4,917,350
3,000 Pennsylvania Turnpike Commission,
Oil Franchise Tax Ser A
of 1994 (AMBAC) ................ 6.00 12/01/19 2,943,120
- ------- -----------
26,100 25,889,925
- ------- -----------
WATER & SEWER REVENUE (7.2%)
5,000 Central Coast Water Authority,
California, Ser 1992 (AMBAC) .... 6.60 10/01/22 5,191,400
5,000 Los Angeles, California, Wastewater
Refg Ser 1993 A (MBIA) .......... 5.70 06/01/20 4,677,500
- ------- -----------
10,000 9,868,900
- ------- -----------
OTHER REVENUE (4.8%)
Indianapolis, Indiana, Gas Utility
2,000 Refg Ser 1993 A (FGIC) ........ 5.375 06/01/21 1,773,720
5,000 Refg Ser 1994 A (AMBAC) ....... 5.875 06/01/24 4,736,900
- ------- -----------
7,000 6,510,620
- ------- -----------
138,615 TOTAL MUNICIPAL BONDS
(Identified Cost $133,121,693) ........................ 132,896,744
-----------
<PAGE>
</TABLE>
<TABLE>
INTERCAPITAL INSURED MUNICIPAL SECURITIES
PORTFOLIO OF INVESTMENTS April 30, 1995 (unaudited) (continued)
- --------------------------------------------------------------------------------
<CAPTION>
Principal
Amount (in Coupon Maturity
thousands) Rate Date Value
---------- -------- -------- -------
<S> <C> <C> <C>
SHORT-TERM MUNICIPAL OBLIGATIONS (0.4%)
$ 600 Harris County Health
Facilities Development
Corporation, Texas, Methodist
Hospital 1994 (Tender 05/01/95)
(Identified Cost $600,000) .... 5.00%* 12/01/25 $ 600,000
- ------- ------------
$139,215 TOTAL INVESTMENTS (Identified Cost
======== $133,721,693) (a) ........................... 98.0% 133,496,744
CASH AND OTHER ASSETS IN EXCESS
OF LIABILITIES ............................... 2.0 2,769,897
---- ------------
NET ASSETS ................................... 100.0 $136,266,641
===== ============
<FN>
- --------------
Bond Insurance:
AMBAC AMBAC Indemnity Corporation
Connie Lee Connie Lee Insurance Company
FGIC Financial Guaranty Insurance Company
MBIA Municipal Bond Investors Assurance Corporation
AMT Alternative Minimum Tax
COPs Certificates of Participation
* Variable or floating rate security. Coupon rate shown reflects
current rate.
(a) The aggregate cost for federal income tax purposes is
$133,721,693; the aggregate gross appreciation is $1,493,909 and
the aggregate gross unrealized depreciation is $1,718,858,
resulting in net unrealized unrealized depreciation of $224,949.
</TABLE>
See Notes to Financial Statements
<TABLE>
Geographic Summary of Investments
Based on Market Value as a Percent of Net Assets
April 30, 1995 (unaudited)
---------------------------------------------------------------------
<S> <C>
Alabama ................ 2.2%
Alaska ................. 5.6
California ............. 23.0
Florida ................ 2.8
Georgia ................ 4.2
Hawaii ................. 6.2
Illinois ............... 17.9%
Kansas ................. 3.8
Massachusetts .......... 2.0
Michigan ............... 1.5
Nevada ................. 6.2
New Hampshire .......... 2.1
New York ............... 1.6%
Pennsylvania ........... 3.2
Rhode Island ........... 1.3
South Carolina ......... 3.3
Texas .................. 0.4
Utah .................. 3.1
Virginia ............... 3.2%
Washington ............. 2.2
Wisconsin .............. 2.2
-----
Total ................. 98.0%
=====
---------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
INTERCAPITAL INSURED MUNICIPAL SECURITIES
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1995 (unaudited)
- --------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $133,721,693) ........................... $133,496,744
Cash ........................................................ 56,030
Interest receivable ......................................... 2,797,566
Deferred organizational expenses ............................ 33,733
Prepaid expenses ............................................ 46,285
------------
Total Assets ........................................... 136,430,358
-----------
LIABILITIES:
Payable for:
Common shares of beneficial interest
purchased .............................................. 86,335
Investment management fee ................................ 40,020
Accrued expenses ............................................ 37,362
------------
Total Liabilities ...................................... 163,717
------------
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, 9,595,013 shares outstanding) ..................... 136,244,212
Net unrealized depreciation ................................. (224,949)
Accumulated undistributed net investment
income .................................................... 747,638
Accumulated net realized loss ............................. (500,260)
------------
Net Assets ............................................. $136,266,641
============
Net Asset Value Per Common Share,
($136,266,641 divided by 9,595,013
common shares outstanding) ................................ $14.20
======
</TABLE>
<PAGE>
<TABLE>
- --------------------------------------------------------------------------------
<CAPTION>
STATEMENT OF OPERATIONS For the six months ended
April 30, 1995 (unaudited)
- --------------------------------------------------------------------------------
<S> <C>
NET INVESTMENT INCOME:
Interest Income ......................................... $ 4,156,970
-----------
Expenses
Investment management fee ............................... 231,088
Shareholder reports and notices ......................... 28,641
Professional fees ...................................... 27,586
Transfer agent fees and expenses ........................ 26,655
Trustees' fees and expenses ............................. 10,113
Registration fees ....................................... 9,685
Organizational expenses ................................. 4,362
Other ................................................... 4,240
-----------
Total Expenses ....................................... 342,370
-----------
Net Investment Income ................................ 3,814,600
-----------
NET REALIZED AND UNREALIZED GAIN
(LOSS):
Net realized loss ........................................ (500,260)
Net change in unrealized depreciation .................... 9,201,667
-----------
Net Gain ............................................ 8,701,407
-----------
Net Increase ......................................... $12,516,007
===========
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
INTERCAPITAL INSURED MUNICIPAL SECURITIES
FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
<CAPTION>
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
For the six For the period
months ended February 28, 1994*
April 30, 1995 through
(unaudited) October 31, 1994
---------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income ............. $ 3,814,600 $ 4,436,941
Net realized loss ................. (500,260) --
Net change in unrealized
depreciation ................... 9,201,667 (9,426,616)
----------- -----------
Net increase (decrease) ...... 12,516,007 (4,989,675)
----------- -----------
Dividends to common shareholders from
net investment income ............. (3,652,552) (3,851,351)
Net increase (decrease) from
transactions in shares of
beneficial interest ................. (4,973,861) 141,118,064
----------- -----------
Total increase ................ 3,889,594 132,277,038
----------- -----------
NET ASSETS:
Beginning of period .................. 132,377,047 100,009
----------- -----------
End of period (including
undistributed net investment income
of $747,638 and $585,590,
respectively) .................... $ 136,266,641 $ 132,377,047
============= =============
<FN>
- ---------
*Commencement of operations.
</TABLE>
See Notes to Financial Statements
<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. The
Trust was organized as a Massachusetts business trust on October 14, 1993 and
had no operations other than those relating to organizational matters and the
issuance of 7,113 common shares of beneficial interest to Dean Witter
InterCapital Inc. (the "Investment Manager") for $100,009. The Trust 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 Trust's
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 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. 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 on securities
purchased 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 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
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 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 Expenses and Offering Costs--The Investment Manager
paid the organizational expenses and offering costs of the Trust's common
shares in the amounts of $44,000 and $416,290, respectively. The
organizational expenses 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 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.
<PAGE>
INTERCAPITAL INSURED MUNICIPAL SECURITIES
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (continued)
- --------------------------------------------------------------------------------
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 cost of
purchases and the proceeds from sales of portfolio securities, excluding short-
term investments, for the six months ended April 30, 1995 aggregated $-0- and
$3,987,745, respectively.
Dean Witter Trust Company, an affiliate of the Investment Manager, is the
Trust's transfer agent. At April 30, 1995, the Trust had transfer agent fees and
expenses payable of approximately $5,100.
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.
The Trust is 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 (Note 1) 7,113 $ 71 $ 99,938
Shares issued at close of public
offering on February 28, 1994* ...... 9,500,000 95,000 133,058,710
Shares issued on April 7, 1994 to cover
over-allotment ....................... 825,000 8,250 11,591,250
Treasury shares purchased and retired
(weighted average discount 13.83%)** (306,800) (3,068) (3,632,078)
---------- -------- -----------
Balance, October 31, 1994 ............ 10,025,313 100,253 141,117,820
Treasury shares purchased and retired
(weighted average discount 11.84%)**.. (430,300) (4,303) (4,969,558)
---------- -------- -----------
Balance, April 30, 1995 .............. 9,595,013 $ 95,950 $ 136,148,262
========== ======== ===========
<FN>
- -------
* Net of offering costs of $416,290.
** The Trustees have voted to retire the shares purchased.
</TABLE>
<PAGE>
INTERCAPITAL INSURED MUNICIPAL SECURITIES
NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)
- --------------------------------------------------------------------------------
6. Dividends to Common Shareholders--The Trust has declared the following
dividends from net investment
income:
<TABLE>
<CATION>
Declaration Amount Per Record Payable
Date Share Date Date
---------- ---------- ---------- ----------
<S> <C> <C> <C>
April 25, 1995 $0.0625 May 5, 1995 May 19, 1995
June 6, 1995 0.0625 June 16, 1995 June 30, 1995
</TABLE>
7. Selected Quarterly Financial Data--
<TABLE>
<CAPTION>
Quarters Ended
----------------------------------
4/30/95 1/31/95
---------------- ----------------
Per Per
Total* Share Total* Share
-------- ------- ------ ------
<S> <C> <C> <C> <C>
Total investment income ................... $2,038 $0.21 $2,119 $0.22
Net investment income ..................... 1,859 0.19 1,956 0.20
Net realized and unrealized gain .......... 3,534 0.38 5,167 0.61
</TABLE>
<TABLE>
<CAPTION> Quarters Ended*
-------------------------------------------
10/31/94 7/31/94 4/30/94+
------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Per Per Per
Total* Share Total* Share Total* Share
------ ------ ------ ------ ------ -------
Total investment income .... $2,208 $0.22 $2,002 $0.20 $705 $0.07
Net investment income ...... 2,035 0.20 1,821 0.18 581 0.06
Net unrealized gain (loss) .. (9,838) (0.92) 2,422 0.24 (2,011) (0.20)
<FN>
- ------------
* Totals expressed in thousands.
+ For the period February 28, 1994 (commencement of operations) through April
30, 1994.
</TABLE>
<PAGE>
<TABLE>
INTERCAPITAL INSURED MUNICIPAL SECURITIES
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected ratios and per share data for a common share of beneficial interest
outstanding throughout the period:
<CAPTION>
For the six For the period
months ended February 28, 1994*
April 30, 1995** through
(unaudited) October 31, 1994**
-------------- -------------------
<S> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period ......... $13.20 $14.06
-------- --------
Net investment income ........................ 0.39 0.44
Net realized and unrealized gain (loss) ...... 0.99 (0.88)
-------- --------
Total from investment operations ............. 1.38 (0.44)
-------- --------
Less dividends from net investment income .... (0.38) (0.38)
Offering costs charged against capital ....... -- (0.04)
-------- --------
Net asset value, end of period ............... $14.20 $13.20
-------- --------
Market value, end of period .................. $12.375 $11.125
======== ========
Total Investment Return+..................... 14.75%(1) (23.56)%(1)
Ratios/Supplemental Data:
Net assets, end of period (in thousands) .... $136,267 $132,377
Ratios to average net assets of
common shareholders:
Total expenses ............................ 0.52%(2) 0.51%(2)
Net investment income ..................... 5.78%(2) 4.69%(2)
Portfolio turnover rate ...................... 0% 0%
<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 and distributions 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. 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
INTERCAPITAL
INSURED
MUNICIPAL
SECURITIES
Semiannual Report
April 30, 1995
