<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND TWO WORLD TRADE CENTER, NEW YORK, NEW YORK
10048
LETTER TO THE SHAREHOLDERS FEBRUARY 29, 1996
DEAR SHAREHOLDER:
The investment environment during the fiscal year ended February 29, 1996 was
favorable for global utilities investments. The global telecommunications
revolution continued, benefiting telephone operating, cellular and
telecommunications equipment companies. A favorable interest rate environment
for much of the fiscal year benefited stocks in the electric utility sector.
United States' utilities were the star performers, pulled along by the surge in
the U.S. stock market, while foreign utilities performed well but not as
spectacularly as those in the United States.
PERFORMANCE
Against this backdrop, Dean Witter Global Utilities Fund provided a total return
(excluding any applicable sales charges) of 18.76 percent for the fiscal year
ended February 29, 1996, compared to a return of 21.72 percent for the
broad-based Morgan Stanley Capital International World Index (MSCI Index). The
MSCI Index contains other industry groups in addition to the utilities sector in
which the Fund invests. Also, the U.S. weighting in the MSCI Index
(approximately 42 percent) was higher than in the Fund's portfolio (31 percent).
The Fund's U.S. weighting was in line with the Fund's objective.
The accompanying chart illustrates the growth of a $10,000 investment in the
Fund from inception (May 31, 1994) through the fiscal year ended February 29,
1996 versus a hypothetical investment in the issues that comprise the MSCI
Index.
PORTFOLIO COMPOSITION
On February 29, 1996, the Fund's net assets exceeded $360 million. The
geographic breakdown of the Fund's investments at the end of the fiscal year was
36 percent in European equities, 31 percent in U.S. equities, 19 percent in
Pacific Basin equities and 8 percent in Latin American/Canadian equities. The
remaining six percent of the portfolio was invested in cash equivalents. The
largest individual country investments, in addition to the United States, were
Germany,
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
LETTER TO THE SHAREHOLDERS FEBRUARY 29, 1996, CONTINUED
the United Kingdom, Japan and Spain. The Fund's portfolio was spread among 28
countries in total, with its emerging market exposure accounting for 12 percent
of its assets. While emerging market performance has been weak for the last two
years, this area includes the highest growth utilities in the world.
Industry allocations of the portfolio included 47 percent in telecommunications
service, 8 percent in telecommunications equipment, 21 percent in electric
utilities and 19 percent in natural gas/water/ other utilities-related equities.
Representative large holdings of individual stocks included Veba AG (Germany),
BBC Brown Boveri AG (Switzerland), Nippon Telegraph & Telephone Corp. (Japan),
Australian Gas Light Co. Ltd. (Australia), and AT&T Corp. and NYNEX Corp. in the
United States.
LOOKING AHEAD
[GRAPHIC]
We continue to be enthusiastic about
the global
telecommunications revolution and the
investment opportunities it presents.
Electricity usage internationally is
lower than in the United States and the
narrowing of this gap over time
represents an opportunity for the
portfolio. The Fund continues to
participate in selected privatizations
internationally. Among privatizations
scheduled for this year are the Greek
and German telephone companies (the
German privatization will be one of the
biggest, if not the biggest,
privatization ever). In short, the Fund
should continue to benefit from the
growth of essential services and
infrastructure around the world.
[GRAPHIC]
We appreciate your support of Dean
Witter Global Utilities Fund and look
forward to continuing to serve you.
Very truly yours,
[LOGO]
CHARLES A. FIUMEFREDDO
CHAIRMAN OF THE BOARD
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
PORTFOLIO OF INVESTMENTS FEBRUARY 29, 1996
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS (94.6%)
ARGENTINA (2.1%)
NATURAL GAS
234,000 Metrogas S.A. (Class B) (ADR)... $ 2,106,000
---------------
TELECOMMUNICATIONS
857,000 Telecom Argentina Stet - France
Telecom S.A. (Class B).......... 3,686,944
---------------
UTILITIES - ELECTRIC
499,000 Central Puerto S.A. (Class B)... 1,787,314
---------------
TOTAL ARGENTINA................. 7,580,258
---------------
AUSTRALIA (2.3%)
NATURAL GAS
2,170,000 Australian Gas Light Company
Ltd............................. 8,791,364
---------------
AUSTRIA (1.3%)
AIRPORT MANAGEMENT
71,000 Flughafen Wien AG............... 4,848,546
---------------
BRAZIL (1.0%)
UTILITIES - ELECTRIC
142,000,000 Companhia Energetica de Minas
Gerais S.A. (Pref.)............. 3,606,258
---------------
CANADA (1.6%)
NATURAL GAS
130,000 TransCanada Pipelines Ltd. ..... 1,838,101
---------------
TELECOMMUNICATION EQUIPMENT
80,000 Northern Telecom Ltd............ 3,794,790
---------------
TOTAL CANADA.................... 5,632,891
---------------
CHILE (2.5%)
TELECOMMUNICATIONS
49,000 Compania de Telecommunicaciones
de Chile S.A. (ADR)............. 4,054,750
170,000 Empresas Telex-Chile S.A.
(ADR)........................... 1,466,250
---------------
5,521,000
---------------
UTILITIES - ELECTRIC
125,000 Enersis S.A. (ADR).............. 3,546,875
---------------
TOTAL CHILE..................... 9,067,875
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
CHINA (1.6%)
UTILITIES - ELECTRIC
140,000 Huaneng Power International,
Inc. (Class N) (ADR)*........... $ 2,590,000
314,000 Shandong Huaneng Power Co., Ltd.
(ADR)........................... 3,022,250
---------------
TOTAL CHINA..................... 5,612,250
---------------
DENMARK (3.7%)
AIRPORT MANAGEMENT
47,000 Kobenhavns Lufthavne AS......... 4,080,851
---------------
TELECOMMUNICATIONS
158,500 Tele Danmark AS (B Shares)...... 9,304,684
---------------
TOTAL DENMARK................... 13,385,535
---------------
FINLAND (1.7%)
TELECOMMUNICATION EQUIPMENT
174,000 Nokia AB (Series K)............. 6,020,431
---------------
FRANCE (2.1%)
WATER
77,157 Compagnie Generale des Eaux..... 7,715,700
---------------
GERMANY (6.8%)
MANUFACTURING - DIVERSIFIED
25,700 Mannesmann AG................... 9,167,357
---------------
TELECOMMUNICATION EQUIPMENT
10,500 Siemens AG...................... 5,976,276
---------------
UTILITIES - ELECTRIC
197,000 Veba AG......................... 9,253,597
---------------
TOTAL GERMANY................... 24,397,230
---------------
HONG KONG (0.8%)
TELECOMMUNICATIONS
6,000,000 ABC Communications Holdings
Ltd............................. 1,195,188
---------------
UTILITIES - ELECTRIC
500,000 Hong Kong Electric Holdings
Ltd............................. 1,694,477
---------------
TOTAL HONG KONG................. 2,889,665
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
PORTFOLIO OF INVESTMENTS FEBRUARY 29, 1996, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
INDONESIA (2.3%)
TELECOMMUNICATIONS
107,000 PT Indosat (ADR)................ $ 3,999,125
139,000 PT Telekomunikasi Indonesia
(ADR)*.......................... 4,361,125
---------------
TOTAL INDONESIA................. 8,360,250
---------------
ITALY (1.4%)
TELECOMMUNICATIONS
1,466,000 Telecom Italia Mobile SpA....... 2,689,001
1,466,000 Telecom Italia SpA.............. 2,453,537
---------------
TOTAL ITALY..................... 5,142,538
---------------
JAPAN (5.3%)
TELECOMMUNICATION EQUIPMENT
64,000 Kyocera Corp.................... 4,378,147
132,000 Sumitomo Electric Industries.... 1,705,653
---------------
6,083,800
---------------
TELECOMMUNICATIONS
570 DDI Corp........................ 4,175,487
1,156 Nippon Telegraph & Telephone
Corp............................ 8,782,898
---------------
12,958,385
---------------
TOTAL JAPAN..................... 19,042,185
---------------
MALAYSIA (1.5%)
TELECOMMUNICATIONS
1,024,000 Technology Resources Industries
Berhad*......................... 3,195,980
260,000 Telekom Malaysia Berhad......... 2,235,396
---------------
TOTAL MALAYSIA.................. 5,431,376
---------------
MEXICO (1.1%)
TELECOMMUNICATIONS
128,000 Telefonos de Mexico S.A. de C.V.
(Class L) (ADR)................. 3,904,000
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
NETHERLANDS (2.5%)
TELECOMMUNICATIONS
225,000 Koninklijke PTT Nederland NV.... $ 9,018,009
---------------
NEW ZEALAND (2.3%)
TELECOMMUNICATIONS
1,880,000 Telecommunications Corp. of New
Zealand Ltd..................... 8,426,498
---------------
NORWAY (0.4%)
TELECOMMUNICATION EQUIPMENT
36,000 Nera AS......................... 1,364,381
---------------
PHILIPPINES (1.6%)
TELECOMMUNICATIONS
68,000 Philippine Long Distance
Telephone Co. (ADR)............. 4,020,500
---------------
UTILITIES - ELECTRIC
191,000 Manila Electric Co. (B
Shares)......................... 1,776,914
---------------
TOTAL PHILIPPINES............... 5,797,414
---------------
PORTUGAL (1.4%)
TELECOMMUNICATIONS
212,000 Portugal Telecom S.A.*.......... 4,907,343
---------------
SOUTH KOREA (1.4%)
UTILITIES - ELECTRIC
207,000 Korea Electric Power Corp.
(ADR)........................... 5,019,750
---------------
SPAIN (4.6%)
TELECOMMUNICATIONS
318,000 Telefonica de Espana............ 5,223,002
---------------
UTILITIES - ELECTRIC
144,600 Empresa Nacional de Electridad
S.A............................. 8,227,845
318,000 Iberdrola S.A................... 3,131,235
---------------
11,359,080
---------------
TOTAL SPAIN..................... 16,582,082
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
PORTFOLIO OF INVESTMENTS FEBRUARY 29, 1996, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
SWEDEN (2.0%)
TELECOMMUNICATION EQUIPMENT
328,000 Ericsson (L.M.) Telephone Co. AB
(Series "B" Free)............... $ 7,102,085
---------------
SWITZERLAND (2.1%)
ELECTRICAL EQUIPMENT
6,200 BBC Brown Boveri AG............. 7,413,156
---------------
UNITED KINGDOM (6.0%)
BROADCAST MEDIA
582,500 Carlton Communications PLC...... 3,730,228
---------------
TELECOMMUNICATIONS
135,000 Nynex CableComms Group (ADR)*... 2,041,875
1,831,000 Telewest PLC.................... 3,784,650
2,140,000 Vodafone Group PLC.............. 7,536,074
---------------
13,362,599
---------------
UTILITIES - ELECTRIC
181,766 National Grid Group PLC......... 542,687
220,000 National Power PLC.............. 1,616,842
200,200 Yorkshire Electricity........... 2,298,947
---------------
4,458,476
---------------
TOTAL UNITED KINGDOM............ 21,551,303
---------------
UNITED STATES (31.2%)
BROADCAST MEDIA
125,000 U.S. West Media Group*.......... 2,609,375
---------------
ELECTRONICS - SEMICONDUCTORS/COMPONENTS
48,000 Motorola, Inc................... 2,604,000
---------------
NATURAL GAS
165,000 ENRON Corp...................... 6,043,125
115,000 Tenneco Inc..................... 6,425,625
---------------
12,468,750
---------------
TELECOMMUNICATIONS
85,000 Ameritech Corp.................. 4,898,125
80,000 Bell Atlantic Corp.............. 5,290,000
180,000 BellSouth Corp.................. 7,177,500
175,000 GTE Corp........................ 7,503,125
120,000 NYNEX Corp...................... 6,180,000
135,000 SBC Communications, Inc......... 7,408,125
125,000 U.S. West Communications
Group........................... 4,093,750
---------------
42,550,625
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
TELECOMMUNICATIONS - LONG DISTANCE
120,000 AT&T Corp....................... $ 7,635,000
280,000 MCI Communications Corp......... 8,155,000
175,000 Sprint Corp..................... 7,525,000
85,000 WorldCom, Inc.*................. 3,346,875
---------------
26,661,875
---------------
UTILITIES - ELECTRIC
210,000 CMS Energy Corp................. 6,378,750
120,000 Duke Power Co................... 5,865,000
205,000 Edison International............ 3,587,500
160,000 Pacific Gas & Electric Co....... 4,100,000
230,000 Southern Co..................... 5,491,250
---------------
25,422,500
---------------
TOTAL UNITED STATES............. 112,317,125
---------------
TOTAL COMMON AND PREFERRED
STOCKS
(IDENTIFIED COST
$298,992,748)................... 340,927,498
---------------
</TABLE>
<TABLE>
<C> <S> <C>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- -----------------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENTS (5.8%)
U.S. GOVERNMENT AGENCY (a) (3.6%)
$ 13,000 Federal Home Loan Banks 5.15%
due 03/06/96.................... 12,990,701
---------------
REPURCHASE AGREEMENT (2.2%)
8,002 The Bank of New York 5.75% due
03/01/96 (dated 02/29/96;
proceeds $8,003,458;
collateralized by $7,476,653
U.S. Treasury Bond 7.25% due
05/15/16 valued at $8,162,224)
(Identified Cost $8,002,180).... 8,002,180
---------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $20,992,881)... 20,992,881
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
PORTFOLIO OF INVESTMENTS FEBRUARY 29, 1996, CONTINUED
<TABLE>
<CAPTION>
VALUE
- -----------------------------------------------------------------
<C> <S> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST
$319,985,629) (B)........... 100.4% $361,920,379
LIABILITIES IN EXCESS OF
OTHER ASSETS................ (0.4) (1,572,894)
----- ------------
NET ASSETS.................. 100.0% $360,347,485
----- ------------
----- ------------
<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 $320,113,109; the
aggregate gross unrealized appreciation is $55,749,296, and the aggregate
gross unrealized depreciation is $13,942,026, resulting in net unrealized
appreciation of $41,807,270.
</TABLE>
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT FEBRUARY 29, 1996:
<TABLE>
<CAPTION>
CONTRACTS TO IN EXCHANGE DELIVERY UNREALIZED
RECEIVE FOR DATE APPRECIATION
- ----------------------------------------------------
<S> <C> <C> <C>
PHP 21,204,483 $ 810,569 03/01/96 $1,241
PHP 10,247,630 $ 391,654 03/04/96 675
------
$1,916
Total unrealized
appreciation........................
--------------
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
SUMMARY OF INVESTMENTS FEBRUARY 29, 1996
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
Airport Management................................................................... $ 8,929,397 2.5%
Broadcast Media...................................................................... 6,339,603 1.8
Electrical Equipment................................................................. 7,413,156 2.1
Electronics - Semiconductors/Components.............................................. 2,604,000 0.7
Manufacturing - Diversified.......................................................... 9,167,357 2.5
Natural Gas.......................................................................... 25,204,216 7.0
Repurchase Agreement................................................................. 8,002,180 2.2
Telecommunication Equipment.......................................................... 30,341,763 8.4
Telecommunications................................................................... 143,012,941 39.7
Telecommunications - Long Distance................................................... 26,661,875 7.4
U.S. Government Agency............................................................... 12,990,701 3.6
Utilities - Electric................................................................. 73,537,490 20.4
Water................................................................................ 7,715,700 2.1
------------------ -----
$ 361,920,379 100.4%
------------------ -----
------------------ -----
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks........................................................................ $ 337,321,240 93.6%
Preferred Stock...................................................................... 3,606,258 1.0
Short-Term Investments............................................................... 20,992,881 5.8
------------------ -----
$ 361,920,379 100.4%
------------------ -----
------------------ -----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 29, 1996
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $319,985,629)............................ $361,920,379
Receivable for:
Shares of beneficial interest sold...................... 629,548
Dividends............................................... 539,821
Foreign withholding taxes reclaimed..................... 147,359
Deferred organizational expenses............................ 114,042
Prepaid expenses and other assets........................... 14,599
------------
TOTAL ASSETS........................................... 363,365,748
------------
LIABILITIES:
Payable for:
Investments purchased................................... 2,216,317
Plan of distribution fee................................ 261,461
Shares of beneficial interest repurchased............... 219,229
Investment management fee............................... 188,432
Accrued expenses............................................ 132,824
------------
TOTAL LIABILITIES...................................... 3,018,263
------------
NET ASSETS:
Paid-in-capital............................................. 318,606,495
Net unrealized appreciation................................. 41,934,344
Accumulated undistributed net investment income............. 901,819
Accumulated net realized loss............................... (1,095,173)
------------
NET ASSETS............................................. $360,347,485
------------
------------
NET ASSET VALUE PER SHARE,
31,812,656 SHARES OUTSTANDING (UNLIMITED SHARES AUTHORIZED
OF $.01 PAR VALUE)........................................
$11.33
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED FEBRUARY 29, 1996
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Dividends (net of $703,728 foreign withholding tax)......... $ 8,538,436
Interest.................................................... 3,879,095
-----------
TOTAL INCOME........................................... 12,417,531
-----------
EXPENSES
Plan of distribution fee.................................... 3,341,620
Investment management fee................................... 2,282,675
Transfer agent fees and expenses............................ 526,381
Custodian fees.............................................. 123,619
Shareholder reports and notices............................. 108,899
Registration fees........................................... 65,372
Professional fees........................................... 61,409
Organizational expenses..................................... 34,142
Trustees' fees and expenses................................. 19,974
Other....................................................... 8,994
-----------
TOTAL EXPENSES......................................... 6,573,085
-----------
NET INVESTMENT INCOME.................................. 5,844,446
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments............................................. 3,038,429
Foreign exchange transactions........................... (14,137)
-----------
TOTAL GAIN............................................. 3,024,292
-----------
Net change in unrealized depreciation on:
Investments............................................. 50,876,445
Translation of forward foreign currency contracts, other
assets and liabilities denominated in foreign
currencies............................................ (2,694)
-----------
TOTAL APPRECIATION..................................... 50,873,751
-----------
NET GAIN............................................... 53,898,043
-----------
NET INCREASE................................................ $59,742,489
-----------
-----------
</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
PERIOD
FOR THE YEAR MAY 31, 1994*
ENDED THROUGH
FEBRUARY 29, FEBRUARY 28,
1996 1995
- -------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income....................................... $ 5,844,446 $ 4,091,207
Net realized gain (loss).................................... 3,024,292 (15,376)
Net change in unrealized depreciation....................... 50,873,751 (8,939,407)
------------- -------------
NET INCREASE (DECREASE)................................ 59,742,489 (4,863,576)
------------- -------------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net investment income....................................... (5,266,837) (3,774,471)
Net realized gain........................................... (4,096,615) --
------------- -------------
TOTAL.................................................. (9,363,452) (3,774,471)
------------- -------------
Net increase (decrease) from transactions in shares of
beneficial interest....................................... (27,631,296) 346,137,791
------------- -------------
TOTAL INCREASE......................................... 22,747,741 337,499,744
NET ASSETS:
Beginning of period......................................... 337,599,744 100,000
------------- -------------
END OF PERIOD
(INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF
$901,819 AND $333,688, RESPECTIVELY).................... $360,347,485 $337,599,744
------------- -------------
------------- -------------
<FN>
- ---------------------
* Commencement of operations.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS FEBRUARY 29, 1996
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 in 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 had
no operations other than those relating to organizational matters and the
issuance of 10,000 shares of beneficial interest for $100,000 to Dean Witter
InterCapital Inc. (the "Investment Manager") to effect the Fund's initial
capitalization. The Fund 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; and
(4) 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.
Dividend income and other distributions are recorded on the ex-
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS FEBRUARY 29, 1996, CONTINUED
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
distributions which exceed net investment income and net realized capital gains
for financial
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS FEBRUARY 29, 1996, CONTINUED
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 -- 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 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 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
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS FEBRUARY 29, 1996, CONTINUED
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.
The Distributor has informed the Fund that for the year ended February 29, 1996,
it received approximately $1,102,000 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 year ended February 29, 1996 aggregated
$129,692,800 and $46,310,200, respectively.
For the year ended February 29, 1996, the Fund incurred brokerage commissions of
$28,405 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 February 29, 1996, the Fund had
transfer agent fees and expenses payable of approximately $46,000.
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS FEBRUARY 29, 1996, CONTINUED
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR ENDED MAY 31, 1994* THROUGH
FEBRUARY 29, 1996 FEBRUARY 28, 1995
------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Sold............................................................. 4,527,808 $ 48,949,462 37,349,295 $375,264,971
Reinvestment of dividends and distributions...................... 789,712 8,462,851 340,265 3,390,729
---------- ------------ ----------- ------------
5,317,520 57,412,313 37,689,560 378,655,700
Repurchased...................................................... (7,953,198) (85,043,609) (3,251,226) (32,517,909)
---------- ------------ ----------- ------------
Net increase (decrease).......................................... (2,635,678) $(27,631,296) 34,438,334 $346,137,791
---------- ------------ ----------- ------------
---------- ------------ ----------- ------------
</TABLE>
<TABLE>
<S> <C>
<FN>
- ---------------------
* Commencement of operations.
</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 February 29, 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 YEAR FOR THE PERIOD
ENDED MAY 31, 1994*
FEBRUARY 29, THROUGH FEBRUARY
1996 28, 1995
- ------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period............................ $ 9.80 $ 10.00
-------- --------
Net investment income.............. 0.18 0.13
Net realized and unrealized gain
(loss)............................ 1.64 (0.21)
-------- --------
Total from investment operations... 1.82 (0.08)
-------- --------
Less dividends and distributions
from:
Net investment income........... (0.16) (0.12)
Net realized gain............... (0.13) --
-------- --------
Total dividends and
distributions..................... (0.29) (0.12)
-------- --------
Net asset value, end of period..... $ 11.33 $ 9.80
-------- --------
-------- --------
TOTAL INVESTMENT RETURN+........... 18.76% (0.87)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses........................... 1.87% 1.97%(2)
Net investment income.............. 1.66% 1.83%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands......................... $360,347 $337,600
Portfolio turnover rate............ 16% 2%(1)
<FN>
- ---------------------
* Commencement of operations.
+ Does not reflect the deduction of sales charge.
(1) Not annualized.
(2) Annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND TRUSTEES
OF DEAN WITTER GLOBAL UTILITIES FUND
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Dean Witter Global Utilities Fund
(the "Fund") at February 29, 1996, the results of its operations for the year
then ended, and the changes in its net assets and the financial highlights for
the year then ended and for the period May 31, 1994 (commencement of operations)
through February 28, 1995, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at February 29, 1996 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
PRICE WATERHOUSE LLP
1177 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
APRIL 12, 1996
- --------------------------------------------------------------------------------
1996 FEDERAL TAX NOTICE (UNAUDITED)
During the year ended February 29, 1996, the Fund paid to its
shareholders $0.05 per share from long-term capital gains. For
such period, 37.56% of the income paid qualified for the dividends
received deduction available to corporations.
<PAGE>
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn DEAN WITTER
John R. Haire GLOBAL UTILITIES
Dr. Manuel H. Johnson FUND
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
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 (PHOTO)
INVESTMENT MANAGER
Dean Witter InterCapital Inc.
Two World Trade Center
New York, New York 10048
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 ANNUAL REPORT
preceded or accompanied by an effective prospectus. FEBRUARY 29, 1996
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
GROWTH OF $10,000
DATE TOTAL MSCI WORLD IX
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
May 31, 1994 $10,000 $10,000
- ------------------------------------------------------------------------
February 28, 1995 $ 9,913 $ 9,970
- ------------------------------------------------------------------------
February 29, 1996 $11,373(3) $12,135
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
1 YEAR LIFE OF FUND
-----------------------------
-----------------------------
18.76 (1) 9.78 (1)
-----------------------------
13.76 (2) 7.63 (2)
-----------------------------
-----------------------------
-------------------------------------
-------------------------------------
_____ Fund _____ MSCI WORLD IX (4)
-------------------------------------
-------------------------------------
Past performance is not predictive of future returns.
________________________________________
(1) Figure shown assumes reinvestment of all distributions and does not
reflect the deduction of any sales charges.
(2) Figure shown assumes reinvestment of all distributions and the
deduction of the maximum applicable contingent deferred sales charge
(CDSC) (1 year-5%, since inception 4%). See the Fund's current
prospectus for complete details on fees and sales charges.
(3) Closing value after the deduction of a 4% CDSC, assuming a complete
redemption on February 29, 1996.
(4) The Morgan Stanley Capital International World Index (MSCI) measures
performance for a diverse range of global stock markets including the
U.S., Canada, Europe, Australia, New Zealand and the Far East. The
index does not include any expenses, fees or charges or reinvestment of
dividends. The Index is unmanaged and should not be considered an
investment.
