<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
LETTER TO THE SHAREHOLDERS AUGUST 31, 1997
DEAR SHAREHOLDER:
Dean Witter Global Utilities Fund performed well during the six-month period
ended August 31, 1997. The portfolio's global utilities stocks rose overall,
while enduring some volatility. The strongest-performing equities came from
Latin America and were followed by those in the United States and Europe.
Despite the weakness of Asian emerging markets during the period, Pacific stocks
taken as a whole (including Australia and other developed countries) rose.
PERFORMANCE AND PORTFOLIO
The Fund's Class B shares registered a total return of 4.54 percent for the
six-month period, while its comparative index, the Lipper Analytical Services,
Inc. Utility Funds Index, had a total return of 4.85 percent. The Lipper index
records the average performance of the 30 largest utility funds, most of which
emphasize United States investments.
Several new stocks were added to the Fund over the past six months, including
LCI International, Inc., a fast-growing U.S. long-distance telephone company;
Telecel-Comunicacoes Pessoais S.A., a Portuguese cellular company; and Telus
Corp., a Canadian telephone company. During the period under review, the Fund
advantageously tendered its position in the British company Yorkshire
Electricity Group PLC as part of its acquisition by two United States electric
utility companies. Also, after ongoing disappointing earnings, the Fund sold its
position in Nera AS, a Norwegian telecommunications company. Finally, in a
classic "buy low, sell high" scenario, a sharp rise and apparent overheating of
the Brazilian stock market led the Fund to reduce and rebalance its investments
in that country.
At the end of the period, 64 percent of the Fund's equity holdings was allocated
to the telecommunications sector, one of the worlds fastest-growing industries.
The Fund invested in such telecommunication sectors as telephone operating
services, cellular communications, telecommunications equipment and limited
cable television and media. Other sectors that the Fund invested in were
electricity, natural gas and
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
LETTER TO THE SHAREHOLDERS AUGUST 31, 1997, CONTINUED
water companies. The Fund's largest geographic allocation as of August 31, 1997
was in Europe (38 percent), followed by the United States (33 percent), the
Pacific (15 percent), and Latin America and Canada (a combined 12 percent).
On July 28, 1997, the Fund began offering four classes of shares: A, B, C, and
D, each with its own sales charge and distribution fee structure. A revised
prospectus, which includes complete details regarding the Fund's conversion to
multiple classes of shares, was mailed to shareholders in mid-summer.
OUTLOOK
We are convinced that the outlook for global utility stocks is favorable, given
ongoing economic expansion and stable interest rates. We continue to believe
that the Fund is an effective way for investors to diversify their portfolios
and take advantage of the development of the global infrastructure.
Thank you for your support of Dean Witter Global Utilities Fund. We look forward
to continuing to serve your investment needs.
Very truly yours,
[SIGNATURE]
CHARLES A. FIUMEFREDDO
CHAIRMAN OF THE BOARD
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
RESULTS OF SPECIAL MEETING (UNAUDITED)
On May 21, 1997, a special meeting of the Fund's shareholders was held for the
purpose of voting on four separate matters, the results of which were as
follows:
(1) APPROVAL OF A NEW INVESTMENT MANAGEMENT AGREEMENT BETWEEN THE FUND AND DEAN
WITTER INTERCAPITAL INC. IN CONNECTION WITH THE PROPOSED MERGER OF MORGAN
STANLEY GROUP INC. WITH DEAN WITTER, DISCOVER & CO.:
<TABLE>
<S> <C>
For......................................................................... 14,434,646
Against..................................................................... 293,005
Abstain..................................................................... 1,115,384
</TABLE>
(2) ELECTION OF TRUSTEES:
<TABLE>
<S> <C>
Michael Bozic
For............... 14,999,129
Withheld.......... 843,906
Charles A. Fiumefreddo
For............... 15,045,795
Withheld.......... 797,240
Edwin J. Garn
For............... 15,052,047
Withheld.......... 790,988
John R. Haire
For............... 14,976,646
Withheld.......... 866,389
Wayne E. Hedien
For............... 15,026,659
Withheld.......... 816,376
Dr. Manuel H. Johnson
For............... 15,038,388
Withheld.......... 804,647
Michael E. Nugent
For............... 15,067,760
Withheld.......... 775,275
Philip J. Purcell
For............... 15,067,341
Withheld.......... 775,694
John L. Schroeder
For............... 15,032,662
Withheld.......... 810,373
</TABLE>
(3) APPROVAL OF A NEW INVESTMENT POLICY WITH RESPECT TO INVESTMENTS IN CERTAIN
OTHER INVESTMENT COMPANIES:
<TABLE>
<S> <C>
For........................... 13,900,993
Against....................... 636,648
Abstain....................... 1,305,394
</TABLE>
(4) RATIFICATION OF THE SELECTION OF PRICE WATERHOUSE LLP AS THE FUND'S
INDEPENDENT ACCOUNTANTS:
<TABLE>
<S> <C>
For........................... 14,718,656
Against....................... 236,371
Abstain....................... 888,008
</TABLE>
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
PORTFOLIO OF INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS (97.7%)
ARGENTINA (2.5%)
UTILITIES - NATURAL GAS
259,859 MetroGas S.A. (Class B) (ADR)........................................... $ 2,371,213
735,000 Transportadora de Gas del Sur S.A. (Class B)............................ 1,750,701
------------
4,121,914
------------
UTILITIES - TELECOMMUNICATIONS
857,000 Telecom Argentina Stet - France Telecom S.A. (Class B).................. 4,717,274
------------
TOTAL ARGENTINA......................................................... 8,839,188
------------
AUSTRALIA (3.3%)
UTILITIES - NATURAL GAS
1,840,000 Australian Gas Light Company Ltd........................................ 11,539,608
------------
AUSTRIA (0.8%)
TRANSPORTATION
71,000 Flughafen Wien AG....................................................... 2,733,773
------------
BRAZIL (1.4%)
UTILITIES - ELECTRIC
55,000,000 Companhia Energetica de Minas Gerais S.A. (Pref.)....................... 2,474,118
------------
UTILITIES - TELECOMMUNICATIONS
8,000,000 Telecomunicacoes de Sao Paulo S.A. (Pref.).............................. 2,404,031
------------
TOTAL BRAZIL............................................................ 4,878,149
------------
CANADA (4.0%)
TELECOMMUNICATION EQUIPMENT
85,000 Northern Telecom Ltd.................................................... 8,426,513
------------
UTILITIES - NATURAL GAS
130,000 TransCanada Pipelines Ltd............................................... 2,430,476
------------
UTILITIES - TELECOMMUNICATIONS
158,000 Telus Corp.............................................................. 3,130,403
------------
TOTAL CANADA............................................................ 13,987,392
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
CHILE (2.6%)
UTILITIES - ELECTRIC
125,000 Enersis S.A. (ADR)...................................................... $ 4,445,312
------------
UTILITIES - TELECOMMUNICATIONS
152,000 Compania de Telecomunicaciones de Chile S.A. (ADR)...................... 4,569,500
------------
TOTAL CHILE............................................................. 9,014,812
------------
CHINA (2.0%)
UTILITIES - ELECTRIC
140,000 Huaneng Power International, Inc. (Class N) (ADR)*...................... 3,307,500
314,000 Shandong Huaneng Power Co., Ltd. (ADR).................................. 3,748,375
------------
TOTAL CHINA............................................................. 7,055,875
------------
DENMARK (3.8%)
TRANSPORTATION
47,000 Kobenhavns Lufthavne AS................................................. 5,003,778
------------
UTILITIES - TELECOMMUNICATIONS
158,500 Tele Danmark AS (B Shares).............................................. 8,285,777
------------
TOTAL DENMARK........................................................... 13,289,555
------------
FINLAND (2.4%)
TELECOMMUNICATION EQUIPMENT
109,000 Nokia AB (Series K)..................................................... 8,413,740
------------
FRANCE (1.1%)
UTILITIES - WATER
33,134 Compagnie Generale des Eaux............................................. 3,691,477
------------
GERMANY (6.9%)
TELECOMMUNICATION EQUIPMENT
105,000 Siemens AG.............................................................. 6,428,927
------------
UTILITIES - ELECTRIC
175,000 VEBA AG................................................................. 9,485,620
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
PORTFOLIO OF INVESTMENTS AUGUST 31, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
UTILITIES - TELECOMMUNICATIONS
17,500 Mannesmann AG........................................................... $ 8,091,814
------------
TOTAL GERMANY........................................................... 24,006,361
------------
HONG KONG (0.5%)
UTILITIES - ELECTRIC
500,000 Hong Kong Electric Holdings Ltd......................................... 1,748,613
------------
INDONESIA (1.8%)
UTILITIES - TELECOMMUNICATIONS
136,000 PT Indosat (ADR)........................................................ 2,949,500
176,000 PT Telekomunikasi Indonesia (ADR)....................................... 3,454,000
------------
TOTAL INDONESIA......................................................... 6,403,500
------------
ITALY (3.4%)
UTILITIES - TELECOMMUNICATIONS
1,466,000 Telecom Italia Mobile SpA............................................... 5,057,746
1,168,333 Telecom Italia SpA...................................................... 6,925,021
------------
TOTAL ITALY............................................................. 11,982,767
------------
JAPAN (1.4%)
TELECOMMUNICATION EQUIPMENT
29,000 Kyocera Corp............................................................ 1,825,259
------------
UTILITIES - TELECOMMUNICATIONS
570 DDI Corp................................................................ 2,973,913
------------
TOTAL JAPAN............................................................. 4,799,172
------------
MALAYSIA (1.2%)
UTILITIES - TELECOMMUNICATIONS
1,364,000 Technology Resources Industries Berhad.................................. 1,147,159
1,015,000 Telekom Malaysia Berhad................................................. 3,088,376
------------
TOTAL MALAYSIA.......................................................... 4,235,535
------------
MEXICO (1.5%)
UTILITIES - TELECOMMUNICATIONS
118,000 Telefonos de Mexico S.A. de C.V. (Class L) (ADR)........................ 5,413,250
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
NETHERLANDS (2.3%)
UTILITIES - TELECOMMUNICATIONS
225,000 Koninklijke PTT Nederland NV............................................ $ 7,963,917
------------
NEW ZEALAND (2.6%)
UTILITIES - TELECOMMUNICATIONS
1,880,000 Telecom Corporation of New Zealand Ltd.................................. 9,266,934
------------
PERU (0.3%)
UTILITIES - TELECOMMUNICATIONS
47,200 Telefonica del Peru S.A. (ADR).......................................... 1,103,300
------------
PHILIPPINES (0.8%)
UTILITIES - ELECTRIC
811,200 Manila Electric Co. (B Shares).......................................... 2,775,867
------------
PORTUGAL (2.2%)
UTILITIES - TELECOMMUNICATIONS
132,000 Portugal Telecom S.A.................................................... 4,894,754
------------
WIRELESS COMMUNICATION
38,000 Telecel-Comunicacoes Pessoais S.A.*..................................... 2,764,315
------------
TOTAL PORTUGAL.......................................................... 7,659,069
------------
SOUTH KOREA (1.5%)
UTILITIES - ELECTRIC
200,000 Korea Electric Power Corp. (ADR)........................................ 3,262,500
------------
WIRELESS COMMUNICATION
213,000 Sk Telecom Co., Ltd. (ADR).............................................. 1,917,000
------------
TOTAL SOUTH KOREA....................................................... 5,179,500
------------
SPAIN (5.0%)
UTILITIES - ELECTRIC
371,000 Empresa Nacional de Electricidad S.A.................................... 7,463,761
428,000 Iberdrola S.A........................................................... 4,796,068
------------
12,259,829
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
PORTFOLIO OF INVESTMENTS AUGUST 31, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
UTILITIES - TELECOMMUNICATIONS
198,000 Telefonica de Espana.................................................... $ 5,125,164
------------
TOTAL SPAIN............................................................. 17,384,993
------------
SWEDEN (2.4%)
TELECOMMUNICATION EQUIPMENT
199,000 Ericsson (L.M.) Telephone Co. AB (Series "B" Free)...................... 8,261,128
------------
SWITZERLAND (2.3%)
ELECTRICAL EQUIPMENT
5,600 ABB AG - Bearer......................................................... 8,231,099
------------
UNITED KINGDOM (5.1%)
CABLE & TELECOMMUNICATIONS
496,071 Cable & Wireless Communications PLC*.................................... 1,993,015
1,831,000 Telewest PLC*........................................................... 2,254,327
------------
4,247,342
------------
MEDIA GROUP
329,000 Carlton Communications PLC.............................................. 2,616,932
------------
UTILITIES - ELECTRIC
181,765 National Grid Group PLC................................................. 782,084
------------
WIRELESS COMMUNICATION
487,000 Orange PLC*............................................................. 1,714,367
1,726,418 Vodafone Group PLC...................................................... 8,642,103
------------
10,356,470
------------
TOTAL UNITED KINGDOM.................................................... 18,002,828
------------
UNITED STATES (32.6%)
MEDIA GROUP
125,000 U.S. West Media Group*.................................................. 2,500,000
------------
TELECOMMUNICATION EQUIPMENT
75,408 Lucent Technologies, Inc................................................ 5,872,398
------------
UTILITIES - ELECTRIC
100,000 AES Corp.*.............................................................. 3,700,000
210,000 CMS Energy Corp......................................................... 7,546,875
120,000 Duke Power Co........................................................... 5,812,500
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
200,000 Edison International.................................................... $ 4,825,000
50,000 Houston Industries, Inc................................................. 1,012,500
120,000 PG & E Corp............................................................. 2,782,500
230,000 Southern Co............................................................. 4,844,375
------------
30,523,750
------------
UTILITIES - NATURAL GAS
175,000 ENRON Corp.............................................................. 6,748,437
------------
UTILITIES - TELECOMMUNICATIONS
85,000 Ameritech Corp.......................................................... 5,328,437
100,000 AT&T Corp............................................................... 3,900,000
154,480 Bell Atlantic Corp...................................................... 11,180,490
180,000 BellSouth Corp.......................................................... 7,920,000
165,000 GTE Corp................................................................ 7,352,813
83,000 LCI International, Inc.*................................................ 1,992,000
118,000 MCI Communications Corp................................................. 3,363,000
135,000 SBC Communications, Inc................................................. 7,340,625
175,000 Sprint Corp............................................................. 8,225,000
52,000 Teleport Communications Group Inc. (Class A)*........................... 1,891,500
115,000 U.S. West Communications Group, Inc..................................... 4,118,438
150,000 WorldCom, Inc.*......................................................... 4,490,625
------------
67,102,928
------------
WIRELESS COMMUNICATION
68,000 360 DEG. Communications Co.*............................................ 1,249,500
------------
TOTAL UNITED STATES..................................................... 113,997,013
------------
TOTAL COMMON AND PREFERRED STOCKS
(IDENTIFIED COST $263,831,055).......................................... 341,858,415
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS
- -----------
<C> <S> <C>
SHORT-TERM INVESTMENTS (2.2%)
U.S. GOVERNMENT AGENCY (a) (2.1%)
$ 7,500 Federal Home Loan Mortgage Corp. 5.50% due 09/02/97 (AMORTIZED COST $7,498,854)...... 7,498,854
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
PORTFOLIO OF INVESTMENTS AUGUST 31, 1997 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
REPURCHASE AGREEMENT (0.1%)
$ 214 The Bank of New York 5.25% due 09/02/97 (dated 08/29/97; proceeds $213,885) (b)
(IDENTIFIED COST $213,760)......................................................... $ 213,760
------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $7,712,614)......................................................... 7,712,614
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $271,543,669) (C)........................................................ 99.9 % 349,571,029
OTHER ASSETS IN EXCESS OF LIABILITIES..................................................... 0.1 193,896
------ -------------
NET ASSETS................................................................................ 100.0 % $ 349,764,925
------ -------------
------ -------------
</TABLE>
- ---------------------
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) Collateralized by $210,436 U.S. Treasury Note 6.625% due 05/15/07 valued at
$218,036.
(c) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $96,024,885 and the
aggregate gross unrealized depreciation is $17,997,525, resulting in net
unrealized appreciation of $78,027,360.
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Cable & Telecommunications............................................ $ 4,247,342 1.2 %
Electrical Equipment.................................................. 8,231,099 2.3
Media Group........................................................... 5,116,932 1.5
Repurchase Agreement.................................................. 213,760 0.1
Telecommunication Equipment........................................... 39,227,965 11.2
Transportation........................................................ 7,737,551 2.2
U.S. Government Agency................................................ 7,498,854 2.1
Utilities - Electric.................................................. 74,813,568 21.4
Utilities - Natural Gas............................................... 24,840,435 7.1
Utilities - Telecommunications........................................ 157,664,761 45.1
Utilities - Water..................................................... 3,691,477 1.0
Wireless Communication................................................ 16,287,285 4.7
------------ ---
$349,571,029 99.9 %
------------ ---
------------ ---
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks......................................................... $336,980,266 96.3 %
Preferred Stocks...................................................... 4,878,149 1.4
Short-Term Investments................................................ 7,712,614 2.2
------------ ---
$349,571,029 99.9 %
------------ ---
------------ ---
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1997 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $271,543,669)............................ $349,571,029
Receivable for:
Dividends............................................... 362,009
Shares of beneficial interest sold...................... 359,161
Foreign withholding taxes reclaimed..................... 187,484
Deferred organizational expenses............................ 62,875
Prepaid expenses and other assets........................... 100,670
------------
TOTAL ASSETS........................................... 350,643,228
------------
LIABILITIES:
Payable for:
Shares of beneficial interest repurchased............... 324,080
Plan of distribution fee................................ 279,157
Investment management fee............................... 202,867
Accrued expenses and other payables......................... 72,199
------------
TOTAL LIABILITIES...................................... 878,303
------------
NET ASSETS............................................. $349,764,925
------------
------------
COMPOSITION OF NET ASSETS:
Paid-in-capital............................................. $261,371,181
Net unrealized appreciation................................. 78,014,376
Accumulated undistributed net investment income............. 522,414
Accumulated undistributed net realized gain................. 9,856,954
------------
NET ASSETS............................................. $349,764,925
------------
------------
CLASS A SHARES:
Net Assets.................................................. $404,135
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)... 31,214
NET ASSET VALUE PER SHARE..............................
$12.95
------------
------------
MAXIMUM OFFERING PRICE PER SHARE
(NET ASSET VALUE PLUS 5.54% OF NET ASSET VALUE)...... $13.67
------------
------------
CLASS B SHARES:
Net Assets.................................................. $349,299,556
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)... 26,988,356
NET ASSET VALUE PER SHARE..............................
$12.94
------------
------------
CLASS C SHARES:
Net Assets.................................................. $51,816
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)... 4,005
NET ASSET VALUE PER SHARE..............................
$12.94
------------
------------
CLASS D SHARES:
Net Assets.................................................. $9,418
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)... 727
NET ASSET VALUE PER SHARE..............................
$12.95
------------
------------
</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, 1997 (UNAUDITED)*
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Dividends (net of $541,085 foreign withholding tax)......... $ 6,516,452
Interest.................................................... 195,254
------------
TOTAL INCOME........................................... 6,711,706
------------
EXPENSES
Plan of distribution fee (Class B shares)................... 1,625,857
Investment management fee................................... 1,179,063
Transfer agent fees and expenses............................ 227,080
Custodian fees.............................................. 82,993
Shareholder reports and notices............................. 36,064
Professional fees........................................... 35,735
Organizational expenses..................................... 17,149
Trustees' fees and expenses................................. 7,081
Other....................................................... 31,770
------------
TOTAL EXPENSES......................................... 3,242,792
------------
NET INVESTMENT INCOME.................................. 3,468,914
------------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain (loss) on:
Investments............................................. 9,955,617
Foreign exchange transactions........................... (24,601)
------------
NET GAIN............................................... 9,931,016
------------
Net change in unrealized appreciation/depreciation on:
Investments............................................. 2,607,090
Translation of forward foreign currency contracts, other
assets and liabilities denominated in foreign
currencies............................................ (13,260)
------------
NET APPRECIATION....................................... 2,593,830
------------
NET GAIN............................................... 12,524,846
------------
NET INCREASE................................................ $ 15,993,760
------------
------------
<FN>
- ---------------------
* Class A, Class C and Class D shares were issued July 28, 1997.
</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, ENDED
1997* FEBRUARY 28,
(UNAUDITED) 1997
- ----------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income....................................... $ 3,468,914 $ 2,999,014
Net realized gain........................................... 9,931,016 6,159,318
Net change in unrealized appreciation....................... 2,593,830 33,486,202
------------ ------------
NET INCREASE........................................... 15,993,760 42,644,534
------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class B shares.......................................... (3,109,704) (3,680,883 )
Net realized gain
Class B shares.......................................... (5,194,953) --
------------ ------------
TOTAL DIVIDENDS AND DISTRIBUTIONS...................... (8,304,657) (3,680,883 )
------------ ------------
Net decrease from transactions in shares of beneficial
interest.................................................. (10,163,680) (47,071,634 )
------------ ------------
NET DECREASE........................................... (2,474,577) (8,107,983 )
NET ASSETS:
Beginning of period......................................... 352,239,502 360,347,485
------------ ------------
END OF PERIOD
(INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF
$522,414 AND $163,204, RESPECTIVELY).................... $349,764,925 $352,239,502
------------ ------------
------------ ------------
<FN>
- ---------------------
* Class A, Class C and Class D shares were issued July 28, 1997.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1997 (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 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
commenced operations on May 31, 1994. On July 28, 1997, the Fund commenced
offering three additional classes of shares, with the then current shares
designated as Class B shares.
The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase, some Class
A shares, and most Class B shares and Class C shares are subject to a contingent
deferred sales charge imposed on shares redeemed within one year, six years and
one year, respectively. Class D shares are not subject to a sales charge.
Additionally, Class A shares, Class B shares and Class C shares incur
distribution expenses.
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 pursuant to procedures
adopted 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 Dean Witter InterCapital Inc. (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 may utilize a matrix system
incorporating security quality, maturity and coupon as the evaluation
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1997 (UNAUDITED) CONTINUED
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 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. MULTIPLE CLASS ALLOCATIONS -- Investment income, expenses (other than
distribution fees), and realized and unrealized gains and losses are allocated
to each class of shares based upon the relative net asset value on the date such
items are recognized. Distribution fees are charged directly to the respective
class.
D. 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 foreign currency
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.
E. 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
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1997 (UNAUDITED) CONTINUED
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.
F. 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.
G. 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 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.
H. 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 the Investment
Manager a management fee, accrued daily and payable monthly, by applying the
annual rate 0.65% to the net assets of the Fund determined as of the close of
each business day. Effective May 1, 1997, the Agreement was amended to reduce
the annual rate to 0.625% of the portion of daily net assets exceeding $500
million.
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
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1997 (UNAUDITED) CONTINUED
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. The Plan
provides that the Fund will pay the Distributor a fee which is accrued daily and
paid monthly at the following annual rates: (i) Class A -- 0.25% of the average
daily net assets of Class A; (ii) Class B -- 1.0% of the lesser of: (a) the
average daily aggregate gross sales of the Class B 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 Class B shares redeemed
since the Fund's inception upon which a contingent deferred sales charge has
been imposed or waived; or (b) the average daily net assets of Class B; and
(iii) Class C -- 1.0% of the average daily net assets of Class C. In the case of
Class A shares, amounts paid under the Plan are paid to the Distributor for
services provided. In the case of Class B and Class C shares, amounts paid under
the Plan are paid to the Distributor for services provided and the expenses
borne by it and others in the distribution of the shares of these Classes,
including the payment of commissions for sales of these Classes 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 others
who engage in or support distribution of the 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 these shares
to other than current shareholders; and preparation, printing and distribution
of sales literature and advertising materials. In addition, the Distributor may
utilize fees paid pursuant to the Plan, in the case of Class B shares, to
compensate DWR and other selected broker-dealers for their opportunity costs in
advancing such amounts, which compensation would be in the form of a carrying
charge on any unreimbursed expenses.
In the case of Class B shares, provided that the Plan continues in effect, any
cumulative expenses incurred by the Distributor but not yet recovered may be
recovered through the payment of future distribution fees from the Fund pursuant
to the Plan and contingent deferred sales charges paid by investors upon
redemption of Class B shares. 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
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1997 (UNAUDITED) CONTINUED
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, including carrying charges, totaled $10,722,453 at
August 31, 1997.
In the case of Class A shares and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 1.0% of the average daily
net assets of Class A or Class C, respectively, will not be reimbursed by the
Fund through payments in any subsequent year, except that expenses representing
a gross sales credit to account executives may be reimbursed in the subsequent
calendar year. For the period ended August 31, 1997, the distribution fee was
accrued for Class A shares and Class C shares at the annual rate of 0.25% and
1.0%, respectively.
The Distributor has informed the Fund that for the six months ended August 31,
1997, it received contingent deferred sales charges from certain redemptions of
the Fund's Class B shares of $325,088 and received $4,082 in front-end sales
charges from sales of the Fund's Class A shares. The respective shareholders pay
such charges which are not an expense of the Fund.
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, 1997 aggregated
$14,552,472 and $32,389,058, respectively.
For the period May 31, 1997 through August 31, 1997, the fund incurred brokerage
commissions with Morgan Stanley & Co. Inc., an affiliate of the Investment
Manager since May 31, 1997, of $14,276, for portfolio transactions executed on
behalf of the Fund.
Dean Witter Trust FSB, an affiliate of the Investment Manager and Distributor,
is the Fund's transfer agent. At August 31, 1997, the Fund had transfer agent
fees and expenses payable of approximately $5,000.
5. FEDERAL INCOME TAX STATUS
As of February 28, 1997, the Fund had temporary book/tax differences primarily
attributable to capital loss deferrals on wash sales.
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1997 (UNAUDITED) CONTINUED
6. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED
AUGUST 31, 1997 FOR THE YEAR
------------------------ ENDED
FEBRUARY 28, 1997
(UNAUDITED) ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
CLASS A SHARES*
Sold.............................................. 31,214 $ 415,771 -- --
---------- ------------ ---------- ------------
CLASS B SHARES
Sold.............................................. 2,968,438 39,492,818 4,354,550 $ 51,632,264
Reinvestment of dividends and distributions....... 544,472 7,349,606 284,415 3,276,573
Redeemed.......................................... (4,344,236) (57,485,944) (8,631,939) (101,980,471)
---------- ------------ ---------- ------------
Net decrease--Class B............................. (831,326) (10,643,520) (3,992,974) (47,071,634)
---------- ------------ ---------- ------------
CLASS C SHARES*
Sold.............................................. 4,005 54,054 -- --
---------- ------------ ---------- ------------
CLASS D SHARES*
Sold.............................................. 727 10,015 -- --
---------- ------------ ---------- ------------
Net decrease in Fund.............................. (795,380) $(10,163,680) (3,992,974) $(47,071,634)
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<C> <S>
<FN>
- ---------------------
* For the period July 28, 1997 (issue date) through August 31, 1997.
</TABLE>
7. 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.
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.
At August 31, 1997, there were no outstanding forward contracts.
<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 FOR THE
SIX MONTHS FOR THE FOR THE PERIOD MAY
ENDED YEAR YEAR 31, 1994*
AUGUST 31, ENDED ENDED THROUGH
1997**++ FEBRUARY FEBRUARY FEBRUARY
(UNAUDITED) 28, 1997 29, 1996 28, 1995
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS B SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period............................ $ 12.66 $ 11.33 $ 9.80 $ 10.00
---------- --------- --------- ----------
Net investment income.............. 0.13 0.10 0.18 0.13
Net realized and unrealized gain
(loss)............................ 0.46 1.35 1.64 (0.21)
---------- --------- --------- ----------
Total from investment operations... 0.59 1.45 1.82 (0.08)
---------- --------- --------- ----------
Less dividends and distributions
from:
Net investment income........... (0.12) (0.12) (0.16) (0.12)
Net realized gain............... (0.19) -- (0.13) --
---------- --------- --------- ----------
Total dividends and
distributions..................... (0.31) (0.12) (0.29) (0.12)
---------- --------- --------- ----------
Net asset value, end of period..... $ 12.94 $ 12.66 $ 11.33 $ 9.80
---------- --------- --------- ----------
---------- --------- --------- ----------
TOTAL INVESTMENT RETURN+........... 4.54%(1) 12.91% 18.76% (0.87)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses........................... 1.79%(2) 1.82% 1.87% 1.97%(2)
Net investment income.............. 1.90%(2) 0.85% 1.66% 1.83%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands......................... $349,300 $352,240 $360,347 $337,600
Portfolio turnover rate............ 4%(1) 10% 16% 2%(1)
Average commission rate paid....... $0.0012 $0.0071 -- --
<FN>
- ---------------------
* Commencement of operations.
** Prior to July 28, 1997, the Fund issued one class of shares. All shares
held prior to that date have been designated Class B shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ 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>
DEAN WITTER GLOBAL UTILITIES FUND
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 28, 1997*
THROUGH
AUGUST 31,
1997++
(UNAUDITED)
- ----------------------------------------------------------------------------------------
<S> <C>
CLASS A SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................. $ 13.77
Net realized and unrealized loss...................................... (0.82)
------
Net asset value, end of period........................................ $ 12.95
------
------
TOTAL INVESTMENT RETURN+.............................................. (5.95)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 1.18%(2)
Net investment income................................................. 0.04%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $404
Portfolio turnover rate............................................... 4%(1)
Average commission rate paid.......................................... $ 0.0012
</TABLE>
<TABLE>
<S> <C>
CLASS C SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................. $ 13.77
-------
Net investment loss................................................... (0.01)
Net realized and unrealized loss...................................... (0.82)
-------
Total from investment operations...................................... (0.83)
-------
Net asset value, end of period........................................ $ 12.94
-------
-------
TOTAL INVESTMENT RETURN+.............................................. (6.03)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 1.89%(2)
Net investment income................................................. (0.71)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $52
Portfolio turnover rate............................................... 4%(1)
Average commission rate paid.......................................... $0.0012
<FN>
- ---------------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ 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>
DEAN WITTER GLOBAL UTILITIES FUND
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 28, 1997*
THROUGH
AUGUST 31,
1997++
(UNAUDITED)
- ----------------------------------------------------------------------------------------
<S> <C>
CLASS D SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................. $ 13.77
-------
Net investment income................................................. 0.01
Net realized and unrealized loss...................................... (0.83)
-------
Total from investment operations...................................... (0.82)
-------
Net asset value, end of period........................................ $ 12.95
-------
-------
TOTAL INVESTMENT RETURN+.............................................. (5.95)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 0.86%(2)
Net investment income................................................. 0.49%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $9
Portfolio turnover rate............................................... 4%(1)
Average commission rate paid.......................................... $0.0012
<FN>
- ---------------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ 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
Edwin J. Garn
John R. Haire
Wayne E. Hedien
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Barry Fink
Vice President, Secretary and General Counsel
Edward F. Gaylor
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Dean Witter Trust FSB
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.
DEAN WITTER
GLOBAL UTILITIES
FUND
[GRAPHIC]
SEMIANNUAL REPORT
AUGUST 31, 1997
