<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND TWO WORLD TRADE CENTER, NEW YORK, NEW YORK
10048
LETTER TO THE SHAREHOLDERS AUGUST 31, 1996
DEAR SHAREHOLDER:
The global utilities markets were mixed during the six-month period ended August
31, 1996. Non-U.S. utilities stocks performed well, particularly in the earlier
part of the reporting period when emerging market stocks were strong. In the
United States, however, utilities stocks were weak due in part to the renewed
strength of the economy and its upward pressure on interest rates.
For the six-month period ended August 31, 1996, Dean Witter Global Utilities
Fund produced a total return of 0.43 percent, compared to a return of 0.32
percent for the average fund in the Lipper utilities funds category (89 funds)
and a return of 1.21 percent for the Morgan Stanley Capital International World
Index (MSCI World Index). The MSCI World Index is a broad-based index that
incorporates stocks of all industries including the utilities and
telecommunications industries.
PORTFOLIO COMPOSITION AND STRATEGY
The portfolio's industry breakdown continued to emphasize telecommunications
stocks, which accounted for 60 percent of the Fund's equity holdings. Included
in this broad category are telephone service companies, cellular operators,
telecom equipment and selected media companies. Electricity-related stocks
accounted for 24 percent of all equities, while the remaining 16 percent was
invested in natural gas, water and other utilities-related companies.
On August 31, 1996, the Fund's portfolio was diversified among the following
geographic regions: 38 percent in Europe, 33 percent in the United States, 19
percent in the Pacific Basin and the remaining 10 percent in Latin America and
Canada. We believe European utilities offer a combination of relatively
inexpensive stocks with good growth potential, while Asian and Latin American
utilities offer the potential for excellent growth as these emerging economies
improve their infrastructure.
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
LETTER TO THE SHAREHOLDERS AUGUST 31, 1996, CONTINUED
During the six-month period under review, the Fund gained exposure to one
additional country, Peru, bringing the portfolio's total exposure to 29
countries. This was accomplished through the addition of Telefonica del Peru
S.A. (ADR) in July. Other companies added to the portfolio included
Telecomunicacoes de Sao Paulo S.A. (Brazil) and Orange PLC (United Kingdom),
both focused on telecommunications. U.S. participations in initial public
offerings included Lucent Technologies, Inc., Teleport Communications Group Inc.
and 360 Communications Co.
LOOKING AHEAD
Given the fact that many countries around the world are experiencing relatively
slow economic growth, we believe that the current investment environment for
global utilities stocks is favorable. Such an economic climate allows for
expansion in company earnings without sharply increasing interest rates. In
addition, telecommunications continues to be among the fastest growing
industries around the world, as emerging and developed economies alike look for
quicker and improved means of communication. We believe the Fund is well
positioned to take advantage of these investment opportunities.
We appreciate your support of Dean Witter Global Utilities Fund and look forward
to serving your investment needs and objectives.
Very truly yours,
[SIGNATURE]
CHARLES A. FIUMEFREDDO
CHAIRMAN OF THE BOARD
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
PORTFOLIO OF INVESTMENTS AUGUST 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS (96.3%)
ARGENTINA (2.0%)
TELECOMMUNICATIONS
857,000 Telecom Argentina Stet - France
Telecom S.A. (Class B)............... $ 3,232,765
---------------
UTILITIES - ELECTRIC
499,000 Central Puerto S.A. (Class B)........ 1,532,819
---------------
UTILITIES - NATURAL GAS
234,000 MetroGas S.A. (Class B) (ADR)........ 2,223,000
---------------
TOTAL ARGENTINA...................... 6,988,584
---------------
AUSTRALIA (3.1%)
UTILITIES - NATURAL GAS
2,227,337 Australian Gas Light Company Ltd..... 10,729,462
---------------
AUSTRIA (1.4%)
AIRPORT MANAGEMENT
71,000 Flughafen Wien AG.................... 4,949,372
---------------
BRAZIL (1.8%)
TELECOMMUNICATIONS
9,600,000 Telecomunicacoes de Sao Paulo S.A.
(Pref.).............................. 1,850,295
---------------
UTILITIES - ELECTRIC
142,000,000 Companhia Energetica de Minas Gerais
S.A. (Pref.)......................... 4,275,089
---------------
TOTAL BRAZIL......................... 6,125,384
---------------
CANADA (1.8%)
TELECOMMUNICATION EQUIPMENT
80,152 Northern Telecom Ltd................. 4,012,873
---------------
UTILITIES - NATURAL GAS
130,000 TransCanada Pipelines Ltd............ 2,076,085
---------------
TOTAL CANADA......................... 6,088,958
---------------
CHILE (2.9%)
TELECOMMUNICATIONS
49,000 Compania de Telecommunicaciones de
Chile S.A. (ADR)..................... 4,789,750
204,000 Empresas Telex-Chile S.A. (ADR)...... 1,300,500
---------------
6,090,250
---------------
UTILITIES - ELECTRIC
125,000 Enersis S.A. (ADR)................... 3,890,625
---------------
TOTAL CHILE.......................... 9,980,875
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------
<C> <S> <C>
CHINA (1.6%)
UTILITIES - ELECTRIC
140,000 Huaneng Power International, Inc.
(Class N) (ADR)*..................... $ 2,467,500
314,000 Shandong Huaneng Power Co., Ltd.
(ADR)................................ 2,943,750
---------------
TOTAL CHINA.......................... 5,411,250
---------------
DENMARK (3.6%)
AIRPORT MANAGEMENT
47,000 Kobenhavns Lufthavne AS.............. 4,638,023
---------------
TELECOMMUNICATIONS
158,500 Tele Danmark AS (B Shares)........... 7,806,654
---------------
TOTAL DENMARK........................ 12,444,677
---------------
FINLAND (2.2%)
TELECOMMUNICATION EQUIPMENT
180,000 Nokia AB (Series K).................. 7,618,431
---------------
FRANCE (0.9%)
UTILITIES - WATER
32,554 Compagnie Generale des Eaux.......... 3,136,899
---------------
GERMANY (7.0%)
MANUFACTURING - DIVERSIFIED
25,700 Mannesmann AG........................ 9,259,699
---------------
TELECOMMUNICATION EQUIPMENT
105,000 Siemens AG........................... 5,540,112
---------------
UTILITIES - ELECTRIC
175,000 Veba AG.............................. 9,168,578
---------------
TOTAL GERMANY........................ 23,968,389
---------------
HONG KONG (0.4%)
UTILITIES - ELECTRIC
500,000 Hong Kong Electric Holdings Ltd...... 1,493,792
---------------
INDONESIA (2.4%)
TELECOMMUNICATIONS
136,000 PT Indosat (ADR)..................... 4,250,000
139,000 PT Telekomunikasi Indonesia (ADR).... 3,874,625
---------------
TOTAL INDONESIA...................... 8,124,625
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
PORTFOLIO OF INVESTMENTS AUGUST 31, 1996 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------
<C> <S> <C>
ITALY (2.1%)
CABLE/CELLULAR
1,466,000 Telecom Italia Mobile SpA............ $ 3,016,521
---------------
TELECOMMUNICATIONS
2,103,000 Telecom Italia SpA................... 4,125,493
---------------
TOTAL ITALY.......................... 7,142,014
---------------
JAPAN (4.9%)
TELECOMMUNICATION EQUIPMENT
64,000 Kyocera Corp......................... 4,339,581
130,000 Nippon Comsys Corp................... 1,719,956
---------------
6,059,537
---------------
TELECOMMUNICATIONS
570 DDI Corp............................. 4,530,044
890 Nippon Telegraph & Telephone Corp.... 6,304,576
---------------
10,834,620
---------------
TOTAL JAPAN.......................... 16,894,157
---------------
MALAYSIA (1.8%)
TELECOMMUNICATIONS
1,364,000 Technology Resources Industries
Berhad*.............................. 3,939,350
260,000 Telekom Malaysia Berhad.............. 2,294,425
---------------
TOTAL MALAYSIA....................... 6,233,775
---------------
MEXICO (1.2%)
TELECOMMUNICATIONS
128,000 Telefonos de Mexico S.A. de C.V.
(Class L) (ADR)...................... 4,208,000
---------------
NETHERLANDS (2.3%)
TELECOMMUNICATIONS
225,000 Koninklijke PTT Nederland NV......... 7,883,805
---------------
NEW ZEALAND (2.6%)
TELECOMMUNICATIONS
1,880,000 Telecom Corporation of New Zealand
Ltd.................................. 8,985,687
---------------
NORWAY (0.6%)
TELECOMMUNICATION EQUIPMENT
52,000 Nera AS.............................. 1,908,963
---------------
PERU (0.3%)
TELECOMMUNICATIONS
47,200 Telefonica del Peru S.A. (ADR)....... 1,103,300
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------
<C> <S> <C>
PHILIPPINES (1.3%)
UTILITIES - ELECTRIC
567,950 Manila Electric Co. (B Shares)....... $ 4,363,836
---------------
PORTUGAL (1.6%)
TELECOMMUNICATIONS
212,000 Portugal Telecom S.A.*............... 5,664,964
---------------
SOUTH KOREA (1.3%)
UTILITIES - ELECTRIC
207,000 Korea Electric Power Corp. (ADR)..... 4,398,750
---------------
SPAIN (5.0%)
TELECOMMUNICATIONS
274,000 Telefonica de Espana................. 5,086,634
---------------
UTILITIES - ELECTRIC
144,600 Empresa Nacional de Electridad
S.A.................................. 8,416,912
428,000 Iberdrola S.A........................ 3,861,705
---------------
12,278,617
---------------
TOTAL SPAIN.......................... 17,365,251
---------------
SWEDEN (2.2%)
TELECOMMUNICATION EQUIPMENT
328,000 Ericsson (L.M.) Telephone Co. AB
(Series "B" Free).................... 7,648,976
---------------
SWITZERLAND (2.2%)
ELECTRICAL EQUIPMENT
6,200 ABB AG - Bearer...................... 7,631,960
---------------
UNITED KINGDOM (6.4%)
BROADCAST MEDIA
582,500 Carlton Communications PLC........... 4,352,115
---------------
CABLE/CELLULAR
487,000 Orange PLC*.......................... 1,458,475
---------------
TELECOMMUNICATIONS
135,000 Nynex CableComms Group (ADR)*........ 2,193,750
1,831,000 Telewest PLC*........................ 3,969,831
1,926,000 Vodafone Group PLC................... 7,240,061
---------------
13,403,642
---------------
UTILITIES - ELECTRIC
181,765 National Grid Group PLC.............. 490,485
200,200 Yorkshire Electricity................ 2,395,126
---------------
2,885,611
---------------
TOTAL UNITED KINGDOM................. 22,099,843
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
PORTFOLIO OF INVESTMENTS AUGUST 31, 1996 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------
<C> <S> <C>
UNITED STATES (29.4%)
BROADCAST MEDIA
125,000 U.S. West Media Group*............... $ 2,265,625
---------------
CABLE/CELLULAR
58,333 360 Communications Co.*.............. 1,392,700
---------------
TELECOMMUNICATION EQUIPMENT
43,000 Lucent Technologies, Inc............. 1,585,625
---------------
TELECOMMUNICATIONS
85,000 Ameritech Corp....................... 4,388,125
70,000 Bell Atlantic Corp................... 3,937,500
180,000 BellSouth Corp....................... 6,525,000
175,000 GTE Corp............................. 6,890,625
110,000 NYNEX Corp........................... 4,743,750
135,000 SBC Communications, Inc.............. 6,294,375
32,000 Teleport Communications Group Inc.
(Class A)*........................... 732,000
125,000 U.S. West Communications Group....... 3,687,500
---------------
37,198,875
---------------
TELECOMMUNICATIONS - LONG DISTANCE
120,000 AT&T Corp............................ 6,300,000
280,000 MCI Communications Corp.............. 7,035,000
175,000 Sprint Corp.......................... 7,109,375
140,000 WorldCom, Inc.*...................... 2,922,500
---------------
23,366,875
---------------
UTILITIES - ELECTRIC
210,000 CMS Energy Corp...................... 6,273,750
120,000 Duke Power Co........................ 5,610,000
205,000 Edison International................. 3,561,875
100,000 Pacific Gas & Electric Co............ 2,262,500
230,000 Southern Co.......................... 5,203,750
---------------
22,911,875
---------------
UTILITIES - NATURAL GAS
165,000 ENRON Corp........................... 6,620,625
115,000 Tenneco, Inc......................... 5,721,250
---------------
12,341,875
---------------
TOTAL UNITED STATES.................. 101,063,450
---------------
TOTAL COMMON AND PREFERRED STOCKS
(IDENTIFIED COST $290,612,250)....... 331,657,429
---------------
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ----------------------------------------------------------------------
SHORT-TERM INVESTMENTS (3.1%)
COMMERCIAL PAPER (a) (1.2%)
TELECOMMUNICATION EQUIPMENT
$4,000 Motorola Inc.
5.20% due 09/04/96................... $ 3,998,267
---------------
REPURCHASE AGREEMENT (1.9%)
6,510 The Bank of New York 5.125% due
09/03/96 (dated 08/30/96; proceeds
$6,513,872; collateralized by
$6,592,568 Federal Home Loan Banks
6.19% due 07/10/98 valued at
$6,640,368) (Identified Cost
$6,510,165).......................... 6,510,165
---------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $10,508,432)........ 10,508,432
---------------
TOTAL INVESTMENTS
(IDENTIFIED COST $301,120,682)
(B)............................. 99.4 % 342,165,861
OTHER ASSETS IN EXCESS OF
LIABILITIES..................... 0.6 2,186,345
----- ------------
NET ASSETS...................... 100.0 % $344,352,206
----- ------------
----- ------------
<FN>
- ---------------------
ADR American Depository Receipt.
* Non-income producing security.
(a) Security was purchased on a discount basis. The interest rate shown has
been adjusted to reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes is $301,248,162. The
aggregate gross unrealized appreciation is $55,600,824 and the aggregate
gross unrealized depreciation is $14,683,125, resulting in net unrealized
appreciation of $40,917,699.
</TABLE>
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT AUGUST 31, 1996:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS TO IN DELIVERY APPRECIATION
RECEIVE EXCHANGE FOR DATE (DEPRECIATION)
- ------------------------------------------------
<S> <C> <C> <C>
$ 1,924,821 Y 708,650,577 09/03/96 $ 7,781
$ 1,766,608 Y 191,500,268 09/03/96 7,142
PHP 7,861,883 $ 300,588 09/04/96 (57)
PHP 7,195,100 $ 274,622 09/05/96 420
MYR 2,493,405 $ 999,761 09/09/96 401
--------
Net unrealized appreciation....... $15,687
--------
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
SUMMARY OF INVESTMENTS AUGUST 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
Airport Management................................................................... $ 9,587,395 2.8%
Broadcast Media...................................................................... 6,617,740 1.9
Cable/Cellular....................................................................... 5,867,697 1.7
Electrical Equipment................................................................. 7,631,960 2.2
Manufacturing - Diversified.......................................................... 9,259,699 2.7
Repurchase Agreement................................................................. 6,510,165 1.9
Telecommunication Equipment.......................................................... 38,372,784 11.1
Telecommunications................................................................... 131,833,384 38.4
Telecommunications - Long Distance................................................... 23,366,875 6.8
Utilities - Electric................................................................. 72,610,841 21.1
Utilities - Natural Gas.............................................................. 27,370,422 7.9
Utilities - Water.................................................................... 3,136,899 0.9
------------------ -----
$ 342,165,861 99.4%
------------------ -----
------------------ -----
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks........................................................................ $ 325,532,046 94.5%
Preferred Stocks..................................................................... 6,125,383 1.8
Short-Term Investments............................................................... 10,508,432 3.1
------------------ -----
$ 342,165,861 99.4%
------------------ -----
------------------ -----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1996 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $301,120,682)............................ $342,165,861
Receivable for:
Investments sold........................................ 3,691,428
Dividends............................................... 480,302
Foreign withholding taxes reclaimed..................... 164,674
Shares of beneficial interest sold...................... 117,531
Interest................................................ 1,854
Deferred organizational expenses............................ 96,893
Prepaid expenses and other assets........................... 36,103
------------
TOTAL ASSETS........................................... 346,754,646
------------
LIABILITIES:
Payable for:
Investments purchased................................... 1,574,972
Plan of distribution fee................................ 278,407
Shares of beneficial interest repurchased............... 212,019
Investment management fee............................... 192,465
Accrued expenses and other payables......................... 144,577
------------
TOTAL LIABILITIES...................................... 2,402,440
------------
NET ASSETS:
Paid-in-capital............................................. 303,192,956
Net unrealized appreciation................................. 41,052,257
Accumulated undistributed net investment income............. 661,786
Accumulated net realized loss............................... (554,793)
------------
NET ASSETS............................................. $344,352,206
------------
------------
NET ASSET VALUE PER SHARE,
30,462,738 SHARES OUTSTANDING (UNLIMITED SHARES AUTHORIZED
OF $.01 PAR VALUE)........................................
$11.30
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED AUGUST 31, 1996 (UNAUDITED)
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Dividends (net of $532,120 foreign withholding tax)......... $5,215,035
Interest.................................................... 335,151
----------
TOTAL INCOME........................................... 5,550,186
----------
EXPENSES
Plan of distribution fee.................................... 1,655,620
Investment management fee................................... 1,168,173
Transfer agent fees and expenses............................ 266,373
Custodian fees.............................................. 90,104
Shareholder reports and notices............................. 44,033
Registration fees........................................... 20,275
Professional fees........................................... 19,106
Organizational expenses..................................... 17,149
Trustees' fees and expenses................................. 7,039
Other....................................................... 3,652
----------
TOTAL EXPENSES......................................... 3,291,524
----------
NET INVESTMENT INCOME.................................. 2,258,662
----------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments............................................. 550,869
Foreign exchange transactions........................... (10,489)
----------
TOTAL GAIN............................................. 540,380
----------
Net change in unrealized appreciation/depreciation on:
Investments............................................. (889,570)
Translation of forward foreign exchange contracts, other
assets and liabilities denominated in foreign
currencies............................................ 7,483
----------
TOTAL DEPRECIATION..................................... (882,087)
----------
NET LOSS............................................... (341,707)
----------
NET INCREASE................................................ $1,916,955
----------
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE YEAR
AUGUST 31, 1996 ENDED
(UNAUDITED) FEBRUARY 29, 1996
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income....................................... $ 2,258,662 $ 5,844,446
Net realized gain........................................... 540,380 3,024,292
Net change in unrealized appreciation/depreciation.......... (882,087) 50,873,751
----------------- -----------------
NET INCREASE........................................... 1,916,955 59,742,489
----------------- -----------------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net investment income....................................... (2,498,695) (5,266,837)
Net realized gain........................................... -- (4,096,615)
----------------- -----------------
TOTAL.................................................. (2,498,695) (9,363,452)
----------------- -----------------
Net decrease from transactions in shares of beneficial
interest.................................................. (15,413,539) (27,631,296)
----------------- -----------------
TOTAL INCREASE (DECREASE).............................. (15,995,279) 22,747,741
NET ASSETS:
Beginning of period......................................... 360,347,485 337,599,744
----------------- -----------------
END OF PERIOD
(INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF
$661,786 AND $901,819, RESPECTIVELY).................... $344,352,206 $360,347,485
----------------- -----------------
----------------- -----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1996 (UNAUDITED)
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter Global Utilities Fund (the "Fund") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a diversified,
open-end management investment company. The Fund's investment objective is to
seek both capital appreciation and current income. The Fund seeks to achieve its
objective by investing equity and fixed income securities of companies, issued
by issuers worldwide, which are engaged in the utilities industry. The Fund was
organized as a Massachusetts business trust on October 22, 1993 and commenced
operations on May 31, 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 -- (1) an equity security listed or traded on the
New York, American or other domestic or foreign stock exchange is valued at its
latest sale price on that exchange prior to the time when assets are valued; if
there were no sales that day, the security is valued at the latest bid price (in
cases where securities are traded on more than one exchange; the securities are
valued on the exchange designated as the primary market by the Trustees); (2)
all other portfolio securities for which over-the-counter market quotations are
readily available are valued at the latest available bid price prior to the time
of valuation; (3) when market quotations are not readily available, including
circumstances under which it is determined by the Investment Manager that sale
or bid prices are not reflective of a security's market value, portfolio
securities are valued at their fair value as determined in good faith under
procedures established by and under the general supervision of the Trustees; (4)
certain portfolio securities may be valued by an outside pricing service
approved by the Trustees. The pricing service utilizes a matrix system
incorporating security quality, maturity and coupon as the evaluation model
parameters, and/or research and evaluations by its staff, including review of
broker-dealer market price quotations, if available, in determining what it
believes is the fair valuation of the securities valued by such pricing service;
and (5) 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
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1996 (UNAUDITED) CONTINUED
by the identified cost method. Dividend income and other distributions are
recorded on the ex-dividend date except for certain dividends on foreign
securities which are recorded as soon as the Fund is informed after the
ex-dividend date. Discounts are accreted over the life of the respective
securities. Interest income is accrued daily.
C. FOREIGN CURRENCY TRANSLATION -- The books and records of the Fund are
maintained in U.S. dollars as follows: (1) the foreign currency market value of
investment securities, other assets and liabilities and forward contracts are
translated at the exchange rates prevailing at the end of the period; and (2)
purchases, sales, income and expenses are translated at the exchange rates
prevailing on the respective dates of such transactions. The resultant exchange
gains and losses are included in the Statement of Operations as realized and
unrealized gain/loss on foreign exchange transactions. Pursuant to U.S. Federal
income tax regulations, certain foreign exchange gains/losses included in
realized and unrealized gain/loss are included in or are a reduction of ordinary
income for federal income tax purposes. The Fund does not isolate that portion
of the results of operations arising as a result of changes in the foreign
exchange rates from the changes in the market prices of the securities.
D. FORWARD FOREIGN CURRENCY CONTRACTS -- The Fund may enter into forward foreign
currency contracts which are valued daily at the appropriate exchange rates. The
resultant unrealized exchange gains and losses are included in the Statement of
Operations as unrealized foreign currency gain or loss and in the Statement of
Assets and Liabilities as part of the related foreign currency denominated asset
or liability. The Fund records realized gains or losses on delivery of the
currency or at the time the forward contract is extinguished (compensated) by
entering into a closing transaction prior to delivery.
E. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.
F. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to its shareholders on the ex-dividend date. The amount of
dividends and distributions from net investment income and net realized capital
gains are determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. Dividends and
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1996 (UNAUDITED) CONTINUED
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.
G. ORGANIZATIONAL EXPENSES -- Dean Witter InterCapital Inc. (the "Investment
Manager") paid the organizational expenses of the Fund in the amount of
approximately $174,000 which have been reimbursed for the full amount thereof.
Such expenses have been deferred and are being amortized on 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 Fund pays the Investment
Manager a management fee, accrued daily and payable monthly, by applying the
annual rate of 0.65% to the net assets of the Fund determined as of the close of
each business day.
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund'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 Fund 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 Fund.
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Dean Witter Distributors Inc. (the
"Distributor"), an affiliate of the Investment Manager. The Fund has adopted a
Plan of Distribution (the "Plan"), pursuant to Rule 12b-1 under the Act,
pursuant to which the Fund pays the Distributor compensation, accrued daily and
payable monthly, at an annual rate of 1.0% of the lesser of: (a) the average
daily aggregate gross sales of the Fund's shares since the inception of the Fund
(not including reinvestment of dividend or capital gain distributions) less the
average daily aggregate net asset value of the Fund's shares redeemed since the
Fund's inception upon which a contingent deferred sales charge has been imposed
or upon which such charge has been waived; or (b) the Fund's average daily net
assets. Amounts paid under the Plan are paid to the Distributor to compensate it
for the services provided and the expenses borne by it and others in the
distribution of the Fund's shares, including the
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1996 (UNAUDITED) CONTINUED
payment of commissions for sales of the Fund's shares and incentive compensation
to, and expenses of, the account executives of Dean Witter Reynolds Inc.
("DWR"), an affiliate of the Investment Manager and Distributor, and other
employees or selected broker-dealers who engage in or support distribution of
the Fund's shares or who service shareholder accounts, including overhead and
telephone expenses, printing and distribution of prospectuses and reports used
in connection with the offering of the Fund's shares to other than current
shareholders and preparation, printing and distribution of sales literature and
advertising materials. In addition, the Distributor may be compensated under the
Plan for its opportunity costs in advancing such amounts, which compensation
would be in the form of a carrying charge on any unreimbursed expenses incurred
by the Distributor.
Provided that the Plan continues in effect, any cumulative expenses incurred but
not yet recovered may be recovered through future distribution fees from the
Fund and contingent deferred sales charges from the Fund's shareholders.
Although there is no legal obligation for the Fund to pay expenses incurred in
excess of payments made to the Distributor under the Plan and the proceeds of
contingent deferred sales charges paid by investors upon redemption of shares,
if for any reason the Plan is terminated, the Trustees will consider at that
time the manner in which to treat such expenses. The Distributor has advised the
Fund that such excess amounts, included carrying charges, totaled $12,029,910 at
August 31, 1996.
The Distributor has informed the Fund that for the six months ended August 31,
1996, it received approximately $409,000 in contingent deferred sales charges
from certain redemptions of the Fund's shares.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the six months ended August 31, 1996 aggregated
$18,876,976 and $28,090,837, respectively.
For the six months ended August 31, 1996, the Fund incurred brokerage
commissions of $4,190 with DWR for portfolio transactions executed on behalf of
the Fund.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At August 31, 1996, the Fund had
transfer agent fees and expenses payable of approximately $59,000.
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1996 (UNAUDITED) CONTINUED
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED
AUGUST 31, 1996 FOR THE YEAR
------------------------- ENDED
FEBRUARY 29, 1996
(UNAUDITED) --------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Sold............................................................. 2,249,525 $ 25,676,274 4,527,808 $ 48,949,462
Reinvestment of dividends and distributions...................... 194,055 2,225,310 789,712 8,462,851
---------- ------------ ----------- ------------
2,443,580 27,901,584 5,317,520 57,412,313
Repurchased...................................................... (3,793,498) (43,315,123) (7,953,198) (85,043,609)
---------- ------------ ----------- ------------
Net decrease..................................................... (1,349,918) $(15,413,539) (2,635,678) $(27,631,296)
---------- ------------ ----------- ------------
---------- ------------ ----------- ------------
</TABLE>
6. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS
The Fund may enter into forward foreign currency contracts ("forward contracts")
to facilitate settlement of foreign currency denominated portfolio transactions
or to manage foreign currency exposure associated with foreign currency
denominated securities.
At August 31, 1996, there were outstanding forward contracts to facilitate
settlement of foreign currency denominated portfolio transactions.
Forward contracts involve elements of market risk in excess of the amounts
reflected in the Statement of Assets and Liabilities. The Fund bears the risk of
an unfavorable change in the foreign exchange rates underlying the forward
contracts. Risks may also arise upon entering into these contracts from the
potential inability of the counterparties to meet the terms of their contracts.
7. FEDERAL INCOME TAX STATUS
Capital and foreign currency losses incurred after October 31 ("post-October
losses") within the taxable year are deemed to arise on the first business day
of the Fund's next taxable year. The Fund incurred and will elect to defer net
capital and foreign currency losses of approximately $960,000 and $9,000,
respectively during fiscal 1996. As of February 29, 1996, the Fund had temporary
book/tax differences attributable to post-October losses and capital loss
deferrals on wash sales and permanent book/tax differences attributable to
foreign currency gains.
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
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 MAY 31, 1994*
MONTHS ENDED ENDED THROUGH
AUGUST 31, 1996 FEBRUARY 29, FEBRUARY 28,
(UNAUDITED) 1996 1995
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period............................ $ 11.33 $ 9.80 $ 10.00
------ ------ ------
Net investment income.............. 0.07 0.18 0.13
Net realized and unrealized gain
(loss)............................ (0.02) 1.64 (0.21)
------ ------ ------
Total from investment operations... 0.05 1.82 (0.08)
------ ------ ------
Less dividends and distributions
from:
Net investment income........... (0.08) (0.16) (0.12)
Net realized gain............... -- (0.13) --
------ ------ ------
Total dividends and
distributions..................... (0.08) (0.29) (0.12)
------ ------ ------
Net asset value, end of period..... $ 11.30 $ 11.33 $ 9.80
------ ------ ------
------ ------ ------
TOTAL INVESTMENT RETURN+........... 0.43%(1) 18.76% (0.87)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses........................... 1.83%(2) 1.87% 1.97%(2)
Net investment income.............. 1.26%(2) 1.66% 1.83%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands......................... $344,352 $360,347 $337,600
Portfolio turnover rate............ 6%(1) 16% 2%(1)
Average commission rate paid....... $0.0058 -- --
<FN>
- ---------------------
* Commencement of operations.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo DEAN WITTER
Edwin J. Garn GLOBAL UTILITIES
John R. Haire FUND
Dr. Manuel H. Johnson
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
Edward F. Gaylor
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 Fund without examination by the independent accountants and
accordingly they do not express an opinion thereon.
This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and trustees,
fees, expenses and other pertinent information, please see the prospectus of
the Fund.
This report is not authorized for distribution to prospective investors in the
Fund unless preceded or accompanied by an effective prospectus.
[GRAPHIC]
SEMIANNUAL REPORT
AUGUST 31, 1996
