<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND TWO WORLD TRADE CENTER, NEW YORK, NEW YORK
10048
LETTER TO THE SHAREHOLDERS FEBRUARY 28, 1997
DEAR SHAREHOLDER:
Following mixed six months of results, the second half of the fiscal year ended
February 28, 1997, was a favorable period for the Dean Witter Global Utilities
Fund's investment markets and overall performance. Both the Fund's domestic and
international components showed steady improvement and realized attractive gains
during the fiscal year.
PERFORMANCE
The Fund's total return for the fiscal year was 12.91 percent versus 11.68
percent for the Morgan Stanley Capital International World Index (excluding
dividends) and 11.45 percent for the Lipper Analytical Services, Inc. Utility
Funds Index. The World Index includes stocks of all industries, in addition to
utilities, and has a different geographical distribution than that of the Fund.
For example, at the end of February the Index maintained a weighting in Japan of
16 percent versus 1 percent for the Fund. The Lipper Utility Funds Index is an
equally weighted performance index of the largest qualifying funds (based on net
assets) in the Lipper Utility Funds objective.
The accompanying chart illustrates the performance of a $10,000 investment in
the Fund since inception (May 31, 1994) through the fiscal year ended February
28, 1997, versus the performance of a similar hypothetical investment in the
issues comprising the Morgan Stanley Capital International World Index and the
Lipper Utility Funds Index.
THE PORTFOLIO
Strong global demand for telecommunications services provides a favorable
investment backdrop for the Fund. For example, estimates for the number of
wireless (cellular and personal communications services) subscribers worldwide
continue to show tremendous growth, a favorable indication for service providers
and equipment companies. Nokia AB, the Finnish telecommunications corporation,
estimated the number of worldwide wireless subscribers at 135 million at the end
of
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
LETTER TO THE SHAREHOLDERS FEBRUARY 28, 1997, CONTINUED
1996, up 59 percent from the previous year. At the end of the fiscal year, the
Fund held 17 percent of its net common stock assets in wireless service and
equipment companies.
A number of technology-related stocks, which had been the Fund's weakest
performers last summer, were subsequently the strongest over the second half of
the fiscal year. Examples of these stocks appearing in the portfolio include
Nokia AB and Ericsson (L.M.) Telephone Co. AB (Sweden). The
portfolio's domestic utility stocks
also performed well during the second
half of the year, as a result of the
rally in the U.S. stock market. As of
February 28, 1997, United States
utility stocks accounted for 33 percent
of the portfolio's net common stock
assets. Only toward the end of the
fiscal year did momentum slow as
concern grew that the surging U.S.
economy would result in an increase in
short-term interest rates. (Following
the conclusion of the Fund's fiscal
year this concern became reality when,
on March 25, 1997, the Federal Reserve
Board raised the federal-funds rate by
0.25 percentage points.)
LOOKING AHEAD
We continue to be optimistic regarding
the growth prospects for the global
telecommunications industry, which
accounts for 64 percent of the Fund's
investments. Additionally, the
conditions for global utility stocks
overall continue to be good as most
regions of the world are experiencing
modest growth, which is expected to
enhance utility-company earnings
without creating upward pressure on
interest rates. The Fund provides a
direct but prudent investment vehicle
for participating in steady and strong
infrastructure growth around the world.
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
LETTER TO THE SHAREHOLDERS FEBRUARY 28, 1997, CONTINUED
We appreciate your support of Dean Witter Global Utilities Fund and look forward
to serving your investment needs and objectives.
Very truly yours,
[SIGNATURE]
CHARLES A. FIUMEFREDDO
CHAIRMAN OF THE BOARD
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
PORTFOLIO OF INVESTMENTS FEBRUARY 28, 1997
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS (98.2%)
ARGENTINA (2.4%)
UTILITIES - NATURAL GAS
234,000 MetroGas S.A. (Class B) (ADR)... $ 2,603,250
735,000 Transportadora de Gas del Sur
S.A. (Class B)................ 1,897,154
---------------
4,500,404
---------------
UTILITIES - TELECOMMUNICATIONS
857,000 Telecom Argentina Stet - France
Telecom S.A. (Class B)........ 4,089,730
---------------
TOTAL ARGENTINA................. 8,590,134
---------------
AUSTRALIA (3.0%)
UTILITIES - NATURAL GAS
1,840,000 Australian Gas Light Company
Ltd........................... 10,543,522
---------------
AUSTRIA (1.0%)
TRANSPORTATION
71,000 Flughafen Wien AG............... 3,558,672
---------------
BRAZIL (2.2%)
UTILITIES - ELECTRIC
130,000,000 Companhia Energetica de Minas
Gerais S.A. (Pref.)........... 5,198,021
---------------
UTILITIES - TELECOMMUNICATIONS
9,600,000 Telecomunicacoes de Sao Paulo
S.A. (Pref.).................. 2,603,483
---------------
TOTAL BRAZIL.................... 7,801,504
---------------
CANADA (2.9%)
TELECOMMUNICATION EQUIPMENT
106,219 Northern Telecom Ltd............ 7,623,671
---------------
UTILITIES - NATURAL GAS
130,000 TransCanada Pipelines Ltd....... 2,403,888
---------------
TOTAL CANADA.................... 10,027,559
---------------
CHILE (3.3%)
UTILITIES - ELECTRIC
125,000 Enersis S.A. (ADR).............. 4,140,625
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
UTILITIES - TELECOMMUNICATIONS
208,250 Compania de Telecommunicaciones
de Chile S.A. (ADR)........... $ 6,091,313
204,000 Empresas Telex-Chile S.A.
(ADR)......................... 1,275,000
---------------
7,366,313
---------------
TOTAL CHILE..................... 11,506,938
---------------
CHINA (1.8%)
UTILITIES - ELECTRIC
140,000 Huaneng Power International,
Inc. (Class N) (ADR)*......... 3,080,000
314,000 Shandong Huaneng Power Co., Ltd.
(ADR)......................... 3,257,750
---------------
TOTAL CHINA..................... 6,337,750
---------------
DENMARK (3.7%)
TRANSPORTATION
47,000 Kobenhavns Lufthavne AS......... 4,815,649
---------------
UTILITIES - TELECOMMUNICATIONS
158,500 Tele Danmark AS (B Shares)...... 8,243,033
---------------
TOTAL DENMARK................... 13,058,682
---------------
FINLAND (2.1%)
TELECOMMUNICATION EQUIPMENT
122,000 Nokia AB (Series K)............. 7,359,314
---------------
FRANCE (1.3%)
UTILITIES - WATER
32,554 Compagnie Generale des Eaux..... 4,525,431
---------------
GERMANY (6.5%)
TELECOMMUNICATION EQUIPMENT
105,000 Siemens AG...................... 5,299,675
---------------
UTILITIES - ELECTRIC
175,000 Veba AG......................... 9,997,043
---------------
UTILITIES - TELECOMMUNICATIONS
19,700 Mannesmann AG................... 7,764,666
---------------
TOTAL GERMANY................... 23,061,384
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
PORTFOLIO OF INVESTMENTS FEBRUARY 28, 1997, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
HONG KONG (0.5%)
UTILITIES - ELECTRIC
500,000 Hong Kong Electric Holdings
Ltd........................... $ 1,730,595
---------------
INDONESIA (2.5%)
UTILITIES - TELECOMMUNICATIONS
136,000 PT Indosat (ADR)................ 3,910,000
139,000 PT Telekomunikasi Indonesia
(ADR)......................... 4,778,125
---------------
TOTAL INDONESIA................. 8,688,125
---------------
ITALY (2.5%)
UTILITIES - TELECOMMUNICATIONS
1,466,000 Telecom Italia Mobile SpA....... 3,829,428
2,103,000 Telecom Italia SpA.............. 4,928,518
---------------
TOTAL ITALY..................... 8,757,946
---------------
JAPAN (1.5%)
TELECOMMUNICATION EQUIPMENT
29,000 Kyocera Corp.................... 1,724,754
---------------
UTILITIES - TELECOMMUNICATIONS
570 DDI Corp........................ 3,446,931
---------------
TOTAL JAPAN..................... 5,171,685
---------------
MALAYSIA (1.5%)
UTILITIES - TELECOMMUNICATIONS
1,364,000 Technology Resources Industries
Berhad*....................... 3,188,714
260,000 Telekom Malaysia Berhad......... 2,106,409
---------------
TOTAL MALAYSIA.................. 5,295,123
---------------
MEXICO (1.4%)
UTILITIES - TELECOMMUNICATIONS
128,000 Telefonos de Mexico S.A. de C.V.
(Class L) (ADR)............... 4,976,000
---------------
NETHERLANDS (2.3%)
UTILITIES - TELECOMMUNICATIONS
225,000 Koninklijke PTT Nederland NV.... 8,054,327
---------------
NEW ZEALAND (2.4%)
UTILITIES - TELECOMMUNICATIONS
1,880,000 Telecom Corporation of New
Zealand Ltd................... 8,466,413
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
NORWAY (0.7%)
TELECOMMUNICATION EQUIPMENT
52,000 Nera AS......................... $ 2,529,663
---------------
PERU (0.3%)
UTILITIES - TELECOMMUNICATIONS
47,200 Telefonica del Peru S.A.
(ADR)......................... 1,038,400
---------------
PHILIPPINES (1.4%)
UTILITIES - ELECTRIC
624,000 Manila Electric Co. (B
Shares)....................... 4,958,783
---------------
PORTUGAL (1.5%)
UTILITIES - TELECOMMUNICATIONS
152,000 Portugal Telecom S.A............ 5,330,742
---------------
SOUTH KOREA (1.8%)
UTILITIES - ELECTRIC
200,000 Korea Electric Power Corp.
(ADR)......................... 3,600,000
---------------
UTILITIES - TELECOMMUNICATIONS
213,000 Korea Mobile Telecommunications
(ADR)......................... 2,635,875
---------------
TOTAL SOUTH KOREA............... 6,235,875
---------------
SPAIN (5.1%)
UTILITIES - ELECTRIC
144,600 Empresa Nacional de Electricidad
S.A........................... 8,829,379
428,000 Iberdrola S.A................... 4,674,250
---------------
13,503,629
---------------
UTILITIES - TELECOMMUNICATIONS
198,000 Telefonica de Espana............ 4,559,665
---------------
TOTAL SPAIN..................... 18,063,294
---------------
SWEDEN (2.1%)
TELECOMMUNICATION EQUIPMENT
236,000 Ericsson (L.M.) Telephone Co. AB
(Series "B" Free)............. 7,497,203
---------------
SWITZERLAND (2.0%)
ELECTRICAL EQUIPMENT
6,200 ABB AG - Bearer................. 7,025,828
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
PORTFOLIO OF INVESTMENTS FEBRUARY 28, 1997, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
UNITED KINGDOM (6.4%)
CABLE & TELECOMMUNICATIONS
135,000 Nynex CableComms Group (ADR)*... $ 2,244,375
1,831,000 Telewest PLC*................... 3,578,140
---------------
5,822,515
---------------
MEDIA GROUP
582,500 Carlton Communications PLC...... 4,951,698
---------------
UTILITIES - ELECTRIC
181,765 National Grid Group PLC......... 612,729
100,000 Yorkshire Electricity Group
PLC........................... 1,454,250
---------------
2,066,979
---------------
UTILITIES - TELECOMMUNICATIONS
487,000 Orange PLC...................... 1,681,329
1,712,000 Vodafone Group PLC.............. 8,126,997
---------------
9,808,326
---------------
TOTAL UNITED KINGDOM............ 22,649,518
---------------
UNITED STATES (32.1%)
MEDIA GROUP
125,000 U.S. West Media Group*.......... 2,296,875
---------------
TELECOMMUNICATION EQUIPMENT
75,408 Lucent Technologies, Inc........ 4,062,606
---------------
UTILITIES - ELECTRIC
50,000 AES Corp.*...................... 3,268,750
210,000 CMS Energy Corp................. 6,877,500
120,000 Duke Power Co................... 5,310,000
200,000 Edison International............ 4,300,000
50,000 Houston Industries, Inc......... 1,162,500
120,000 PG & E Corp..................... 2,760,000
230,000 Southern Co..................... 5,002,500
---------------
28,681,250
---------------
UTILITIES - NATURAL GAS
175,000 ENRON Corp...................... 6,978,125
---------------
UTILITIES - TELECOMMUNICATIONS
68,000 360 DEG. Communications Co.*.... 1,470,500
85,000 Ameritech Corp.................. 5,418,750
100,000 AT&T Corp....................... 3,987,500
70,000 Bell Atlantic Corp.............. 4,838,750
180,000 BellSouth Corp.................. 8,437,500
165,000 GTE Corp........................ 7,713,750
213,000 MCI Communications Corp......... 7,614,750
110,000 NYNEX Corp...................... 5,665,000
135,000 SBC Communications, Inc......... 7,762,500
175,000 Sprint Corp..................... 7,962,500
52,000 Teleport Communications Group
Inc. (Class A)*............... 1,547,000
125,000 U.S. West Communications Group,
Inc........................... 4,500,000
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------
<C> <S> <C>
150,000 WorldCom, Inc.*................. $ 3,993,750
---------------
70,912,250
---------------
TOTAL UNITED STATES............. 112,931,106
---------------
TOTAL COMMON AND PREFERRED
STOCKS
(IDENTIFIED COST
$270,351,245)................... 345,771,516
---------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS
- --------------
<C> <S> <C>
SHORT-TERM INVESTMENT (1.4%)
REPURCHASE AGREEMENT
$ 4,887 The Bank of New York 5.25% due
03/03/97 (dated 02/28/97;
proceeds $4,888,867;
collateralized by $4,000,644
U.S. Treasury Note 5.875% due
02/15/00 valued at $3,969,524
and $1,002,320 U.S. Treasury
Note 6.375% due 01/15/00
valued at $1,014,940)
(Identified Cost
$4,886,729)................... 4,886,729
---------------
TOTAL INVESTMENTS
(IDENTIFIED COST
$275,237,974) (A)........... 99.6% 350,658,245
OTHER ASSETS IN EXCESS OF
LIABILITIES................. 0.4 1,581,257
----- ------------
NET ASSETS.................. 100.0% $352,239,502
----- ------------
----- ------------
<FN>
- ---------------------
ADR American Depository Receipt.
* Non-income producing security.
(a) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $86,083,081 and the
aggregate gross unrealized depreciation is $10,662,810, resulting in net
unrealized appreciation of $75,420,271.
</TABLE>
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT FEBRUARY 28, 1997:
<TABLE>
<CAPTION>
CONTRACTS TO IN DELIVERY UNREALIZED
RECEIVE EXCHANGE FOR DATE APPRECIATION
- ----------------------------------------------------
<S> <C> <C> <C>
$1,459,024 L890,246 03/04/97 $9,259
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
SUMMARY OF INVESTMENTS FEBRUARY 28, 1997
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
<S> <C> <C>
- ------------------------------------------------------------------
Cable & Telecommunications.............. $ 5,822,515 1.7%
Electrical Equipment.................... 7,025,828 2.0
Media Group............................. 7,248,573 2.1
Repurchase Agreement.................... 4,886,729 1.4
Telecommunication Equipment............. 36,096,886 10.2
Transportation.......................... 8,374,321 2.4
Utilities - Electric.................... 80,214,675 22.8
Utilities - Natural Gas................. 24,425,939 6.9
Utilities - Telecommunications.......... 172,037,348 48.8
Utilities - Water....................... 4,525,431 1.3
------------ ---
$350,658,245 99.6%
------------ ---
------------ ---
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
- ------------------------------------------------------------------
<S> <C> <C>
Common Stocks........................... $337,970,012 96.0%
Preferred Stocks........................ 7,801,504 2.2
Short-Term Investment................... 4,886,729 1.4
------------ ---
$350,658,245 99.6%
------------ ---
------------ ---
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 1997
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $275,237,974)............................ $350,658,245
Receivable for:
Investments sold........................................ 1,459,024
Dividends............................................... 479,636
Shares of beneficial interest sold...................... 332,510
Foreign withholding taxes reclaimed..................... 96,160
Deferred organizational expenses............................ 80,024
Prepaid expenses and other assets........................... 10,391
------------
TOTAL ASSETS........................................... 353,115,990
------------
LIABILITIES:
Payable for:
Shares of beneficial interest repurchased............... 323,345
Plan of distribution fee................................ 242,697
Investment management fee............................... 179,213
Accrued expenses and other payables......................... 131,233
------------
TOTAL LIABILITIES...................................... 876,488
------------
NET ASSETS:
Paid-in-capital............................................. 271,534,861
Net unrealized appreciation................................. 75,420,546
Accumulated undistributed net investment income............. 163,204
Accumulated undistributed net realized gain................. 5,120,891
------------
NET ASSETS............................................. $352,239,502
------------
------------
NET ASSET VALUE PER SHARE,
27,819,682 SHARES OUTSTANDING (UNLIMITED SHARES AUTHORIZED
OF $.01 PAR VALUE)........................................
$12.66
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED FEBRUARY 28, 1997
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Dividends (net of $738,489 foreign withholding tax)......... $ 8,869,490
Interest.................................................... 546,382
-----------
TOTAL INCOME........................................... 9,415,872
-----------
EXPENSES
Plan of distribution fee.................................... 3,227,912
Investment management fee................................... 2,295,007
Transfer agent fees and expenses............................ 484,155
Custodian fees.............................................. 162,230
Professional fees........................................... 75,148
Shareholder reports and notices............................. 71,906
Registration fees........................................... 44,365
Organizational expenses..................................... 34,018
Trustees' fees and expenses................................. 12,390
Other....................................................... 9,727
-----------
TOTAL EXPENSES......................................... 6,416,858
-----------
NET INVESTMENT INCOME.................................. 2,999,014
-----------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain (loss) on:
Investments............................................. 6,178,447
Foreign exchange transactions........................... (19,129)
-----------
NET GAIN............................................... 6,159,318
-----------
Net change in unrealized appreciation on:
Investments............................................. 33,485,521
Translation of forward foreign currency contracts, other
assets and liabilities denominated in foreign
currencies............................................ 681
-----------
NET APPRECIATION....................................... 33,486,202
-----------
NET GAIN............................................... 39,645,520
-----------
NET INCREASE................................................ $42,644,534
-----------
-----------
</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 YEAR FOR THE YEAR
ENDED ENDED
FEBRUARY 28, 1997 FEBRUARY 29, 1996
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income....................................... $ 2,999,014 $ 5,844,446
Net realized gain........................................... 6,159,318 3,024,292
Net change in unrealized appreciation....................... 33,486,202 50,873,751
----------------- -----------------
NET INCREASE........................................... 42,644,534 59,742,489
----------------- -----------------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net investment income....................................... (3,680,883) (5,266,837)
Net realized gain........................................... -- (4,096,615)
----------------- -----------------
TOTAL.................................................. (3,680,883) (9,363,452)
----------------- -----------------
Net decrease from transactions in shares of beneficial
interest.................................................. (47,071,634) (27,631,296)
----------------- -----------------
NET INCREASE (DECREASE)................................ (8,107,983) 22,747,741
NET ASSETS:
Beginning of period......................................... 360,347,485 337,599,744
----------------- -----------------
END OF PERIOD
(INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF
$163,204 AND $901,819, RESPECTIVELY).................... $352,239,502 $360,347,485
----------------- -----------------
----------------- -----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 1997
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.
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 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.
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 1997, CONTINUED
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. 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.
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
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 1997, CONTINUED
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.
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 the Investment
Manager a management fee, accrued daily and payable monthly, by applying the
annual rate of 0.65% to the net assets of the Fund determined as of the close of
each business day.
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund's books and
records and furnishes, at its own expense, office space, facilities, equipment,
clerical, bookkeeping and certain legal services and pays the salaries of all
personnel, including officers of the Fund who are employees of the Investment
Manager. The Investment Manager also bears the cost of telephone services, heat,
light, power and other utilities provided to the Fund.
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Dean Witter Distributors Inc. (the
"Distributor"), an affiliate of the Investment Manager. The Fund has adopted a
Plan of Distribution (the "Plan"), pursuant to Rule 12b-1 under the Act,
pursuant to which the Fund pays the Distributor compensation, accrued daily and
payable monthly, at an annual rate of 1.0% of the lesser of: (a) the average
daily aggregate gross sales of the Fund's shares since the inception of the Fund
(not including reinvestment of dividend or capital gain distributions) less the
average daily aggregate net asset value of the Fund's shares redeemed since the
Fund's inception upon which a contingent deferred sales charge has been imposed
or upon which such charge has been waived; or (b) the Fund's average daily net
assets. Amounts paid under the Plan are paid to the Distributor to compensate it
for the services provided
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 1997, CONTINUED
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 Manager and
Distributor, and other employees or selected broker-dealers who engage in or
support distribution of the Fund's shares or who service shareholder accounts,
including overhead and telephone expenses, printing and distribution of
prospectuses and reports used in connection with the offering of the Fund's
shares to other than current shareholders and preparation, printing and
distribution of sales literature and advertising materials. In addition, the
Distributor may be compensated under the Plan for its opportunity costs in
advancing such amounts, which compensation would be in the form of a carrying
charge on any unreimbursed expenses incurred by the Distributor.
Provided that the Plan continues in effect, any cumulative expenses incurred but
not yet recovered may be recovered through future distribution fees from the
Fund and contingent deferred sales charges from the Fund's shareholders.
Although there is no legal obligation for the Fund to pay expenses incurred in
excess of payments made to the Distributor under the Plan and the proceeds of
contingent deferred sales charges paid by investors upon redemption of shares,
if for any reason the Plan is terminated, the Trustees will consider at that
time the manner in which to treat such expenses. The Distributor has advised the
Fund that such excess amounts, including carrying charges, totaled $11,326,626
at February 28, 1997.
The Distributor has informed the Fund that for the year ended February 28, 1997,
it received approximately $802,000 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 28, 1997 aggregated
$35,728,415 and $70,884,641, respectively.
For the year ended February 28, 1997, the Fund incurred brokerage commissions of
$6,236 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 28, 1997, the Fund had
transfer agent fees and expenses payable of approximately $39,000.
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 1997, CONTINUED
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
FEBRUARY 28, 1997 FEBRUARY 29, 1996
---------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
Sold.................................... 4,354,550 $ 51,632,264 4,527,808 $ 48,949,462
Reinvestment of dividends and
distributions.......................... 284,415 3,276,573 789,712 8,462,851
----------- -------------- ----------- ------------
4,638,965 54,908,837 5,317,520 57,412,313
Repurchased............................. (8,631,939) (101,980,471) (7,953,198) (85,043,609)
----------- -------------- ----------- ------------
Net decrease............................ (3,992,974) $ (47,071,634) (2,635,678) $(27,631,296)
----------- -------------- ----------- ------------
----------- -------------- ----------- ------------
</TABLE>
6. 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 and permanent book/tax
differences primarily attributable to foreign currency losses. To reflect
reclassifications arising from the permanent differences, accumulated
undistributed net investment income was charged and accumulated undistributed
net realized gain was credited $56,746.
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 February 28, 1997, there were outstanding forward contracts to facilitate
settlement of foreign currency denominated portfolio transactions.
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR FOR THE YEAR MAY 31, 1994*
ENDED ENDED THROUGH
FEBRUARY 28, FEBRUARY 29, FEBRUARY 28,
1997 1996 1995
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period............................ $ 11.33 $ 9.80 $ 10.00
-------- -------- --------
Net investment income.............. 0.10 0.18 0.13
Net realized and unrealized gain
(loss)............................ 1.35 1.64 (0.21)
-------- -------- --------
Total from investment operations... 1.45 1.82 (0.08)
-------- -------- --------
Less dividends and distributions
from:
Net investment income........... (0.12) (0.16) (0.12)
Net realized gain............... -- (0.13) --
-------- -------- --------
Total dividends and
distributions..................... (0.12) (0.29) (0.12)
-------- -------- --------
Net asset value, end of period..... $ 12.66 $ 11.33 $ 9.80
-------- -------- --------
-------- -------- --------
TOTAL INVESTMENT RETURN+........... 12.91% 18.76% (0.87)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses........................... 1.82% 1.87% 1.97%(2)
Net investment income.............. 0.85% 1.66% 1.83%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands......................... $352,240 $360,347 $337,600
Portfolio turnover rate............ 10% 16% 2%(1)
Average commission rate paid....... $0.0071 -- --
<FN>
- ---------------------
* Commencement of operations.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
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 28, 1997, the results of its operations for the year
then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the two years in the
period 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 28, 1997 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 11, 1997
- --------------------------------------------------------------------------------
1997 FEDERAL TAX NOTICE (UNAUDITED)
During the year ended February 28, 1997, 70.08% of the income
paid qualified for the dividends received deduction available to
corporations. In addition, the Fund has elected, pursuant to
Section 853 of the Internal Revenue Code, to pass through
foreign taxes of $0.03 per share to its Shareholders. The Fund
generated net foreign source income of $0.13 per share with
respect to this election.
<PAGE>
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
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 Company
Harborside Financial Center -- Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Dean Witter InterCapital Inc.
Two World Trade Center
New York, New York 10048
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
ANNUAL REPORT
FEBRUARY 28, 1997
<PAGE>
DEAN WITTER GLOBAL UTILITIES FUND
GROWTH OF $10,000
<TABLE>
<CAPTION>
DATE TOTAL MSCI WORLD IX LIPPER
<S> <C> <C> <C>
May 31, 1994 $10,000 $10,000 $10,000
February 28, 1995 $ 9,913 $ 9,970 $10,308
February 29, 1996 $11,773 $12,135 $12,546
February 28, 1997 $12,993(3) $13,553 $13,983
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
<S> <C>
12.91(1) 10.91(1)
7.91(2) 9.99(2)
</TABLE>
___ Fund ___ MSCI WORLD IX (4) ___ LIPPER (5)
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-3%). See the Fund's current prospectus for complete
details on fees and sales charges.
(3) Closing value after the deduction of a 3% CDSC, assuming a complete
redemption on February 28, 1997.
(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.
(5) The Lipper Utility Funds Index is an equally-weighted performance index
of the largest qualifying funds (based on net assets) in the Lipper
Utility Funds objective. The Index, which is adjusted for capital gains
distributions and income dividends, is unmanaged and should not be
considered an investment. Currently, there are 30 funds represented in
this index.
