<PAGE>
DEAN WITTER NATIONAL MUNICIPAL TRUST
Two World Trade Center
New York, New York 10048
DEAR SHAREHOLDER:
- --------------------------------------------------------------------------------
Dean Witter National Municipal Trust commenced operations on June 2, 1994 in
the midst of one of the most volatile bond markets in recent history. Interest
rates moved higher throughout most of 1994 as the fixed-income markets focused
on the strong pace of economic growth and the risk of higher inflation. Four
months prior to the Fund's inception, the Federal Reserve Board had become
convinced that economic growth would be sustained and began to progressively
tighten its monetary policy. This led to a severe bear market for bonds. It was
not until November 1994 that bonds began to rally on signs of slower growth and
investor perception that the central bank's tighter monetary policy was taking
effect. This rally continued through the first calendar quarter of 1995.
MUNICIPAL MARKET CONDITIONS
Municipal bond yields, as tracked by THE BOND BUYER Revenue Bond Index,*
moved 187 basis points higher over a 10-month period from a low of 5.50 percent
prior to the Federal Reserve Board's first rate increase in February 1994 to a
high of 7.37 percent in November. The municipal market rallied over the next
four months and the Revenue Bond Index yield declined 108 basis points to 6.29
percent by the end of March 1995.
The balance between supply and demand for municipal securities shifted along
with market conditions during the fiscal year. In the spring of 1994, dealer
inventories reached near-record levels as investors sold long-term bonds to pay
taxes and raise cash. A semblance of stability returned to the market during the
summer. However, after Labor Day the market was subjected to another round of
weakness caused by tax-loss selling. Conditions improved in December as the
market anticipated the reinvestment of coupons, bond calls and maturities in
January at a time of scarce supply. This seasonal pattern more than offset the
adverse publicity caused by the Orange County, California bankruptcy filing in
December. The market rebound continued through March 1995, as investor demand
remained substantial and supply thin.
Long-term municipal bonds have outperformed U.S. Treasury bonds since
November. The ratio of Revenue Bond Index yields to 30-year Treasury yields over
the past 12 months began at 87 percent, ranged as high as 92 percent in November
and ended at 85 percent on March 31, 1995. A declining ratio means that
municipal bond prices have been strong relative to U.S. Treasury bond prices.
The rise in interest rates in 1994 also took its toll on the level of state
and local government debt issuance. For the year, new-issue volume declined 44
percent to $163 billion. The driving force behind this sharp decline was the
virtual halt in refunding issues, which plummeted 74 percent. Last year,
municipal maturities and bond calls reached $191 billion and exceeded the supply
of new issues coming to market. This marked the first decline in the outstanding
supply of municipal securities. A continuation of this pattern is expected in
1995 and should strengthen municipal market conditions. In the first three
months of 1995, municipal volume was down approximately 46 percent compared to
the same period in 1994.
- --------------
*THE BOND BUYER Revenue Bond Index is an arithmetic average of the yields of 25
selected municipal revenue bonds with 30-year maturities. Credit ratings of
these bonds range from Aa1 to Baa1 by Moody's and AA+ to A- by Standard &
Poor's.
<PAGE>
FUND PERFORMANCE
Dean Witter National Municipal Trust's net asset value (NAV) appreciated
from $9.87 to $10.21 per share during the six month period ended March 31, 1995.
Based on this change and reinvestment of tax-free dividends totaling $0.23 per
share, the Fund's total return for this period was 5.42 percent. By way of
comparison, the Lehman Brothers Municipal Bond Index registered a total return
of 5.54 percent.
PORTFOLIO STRUCTURE
Over the past six months, the Fund continued to average into the long-term
end of the municipal market. At the end of September 1994, the Fund was 60
percent invested in long-term municipal bonds. By March 31, 1995, the Fund's
long-term position had increased to 82 percent of net assets. Long-term
municipal bonds are currently diversified among 11 specific sectors and 34
credits. The three largest sectors, which comprise 51 percent of the portfolio,
were general obligation, water & sewer and transportation bonds. The average
maturity and call protection of the Fund's long-term holdings were 18 and 9
years, respectively. Bonds subject to the alternative minimum tax comprised
approximately 10 percent of net assets. None of the Fund's holdings have been
identified as participants in the Orange County investment pool. Credit
selection has emphasized high quality as summarized below:
<TABLE>
<CAPTION>
MOODY'S OR STANDARD & POOR'S RATING PERCENT
- -------------------------------------------------------------------------------- -------------
<S> <C>
Aaa or AAA...................................................................... 65
Aa or AA........................................................................ 21
A or A.......................................................................... 14
</TABLE>
LOOKING AHEAD
Slower economic growth in 1995 and the extent of the Federal Reserve Board's
previous actions have improved bond market expectations. Investor demand for
municipal securities should be sustained by significant bond maturities, calls
for redemption and diminished new-issue supply. The Fund will seek a competitive
yield while continuing to stress credit quality and essential service sectors
with maturities in the 20 year range.
We appreciate your support of Dean Witter National Municipal Trust and look
forward to continuing to serve your investment needs.
Very truly yours,
[SIGNATURE]
Charles A. Fiumefreddo
CHAIRMAN OF THE BOARD
<PAGE>
DEAN WITTER NATIONAL MUNICIPAL TRUST
PORTFOLIO OF INVESTMENTS MARCH 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ---------- ---------- --------- --------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS (82.3%)
GENERAL OBLIGATION (27.8%)
$ 3,000 North Slope Borough, Alaska, Ser 1994 B (CGIC)........................ 0.00 % 06/30/05 $ 1,664,550
1,000 Santa Margarita/Dana Point Authority, California, Impr Dists #3, 3A, 4
& 4A 1994 Ser B Refg (MBIA)......................................... 5.75 08/01/20 953,800
500 Florida Board of Education, Cap Outlay Ser 1994 A..................... 6.10 06/01/24 500,315
1,000 Atlanta, Georgia, Pub Impr Ser 1994 A................................. 6.125 12/01/23 992,550
1,500 Hawaii, 1995 Ser CJ................................................... 6.25 01/01/15 1,522,770
1,000 Chicago Park District, Illinois, Ser 1995............................. 6.60 11/15/14 1,040,570
1,000 Chelsea, Massachusetts, School Act of 1948 (AMBAC).................... 6.50 06/15/12 1,053,600
1,000 Massachusetts, 1994 Ser C (FGIC)...................................... 6.75 11/01/12 1,072,510
1,500 New York City, New York, 1995 Ser D (MBIA)............................ 6.20 02/01/07 1,579,620
2,000 Washington, 1994 Ser A................................................ 5.80 09/01/08 2,017,200
--------------
- ----------
12,397,485
13,500
--------------
- ----------
EDUCATIONAL FACILITIES REVENUE (5.7%)
500 Glendale Industrial Development Authority, Arizona, Thunderbird-The
American Graduate School of International Management (Connie Lee)... 7.125 07/01/20 547,675
1,000 California Educational Facilities Authority, Claremont Colleges
Ser 1992............................................................ 6.375 05/01/22 991,640
500 New York State Dormitory Authority, City University
1994 3rd Resolution Ser 1 (AMBAC)................................... 6.30 07/01/24 508,805
500 Rhode Island Health & Educational Building Corporation, Providence
College Ser 1993 (MBIA)............................................. 5.60 11/01/15 464,800
--------------
- ----------
2,512,920
2,500
--------------
- ----------
ELECTRIC REVENUE (4.2%)
900 Sacramento Municipal Utility District, California, Refg 1994 Ser I
(MBIA).............................................................. 5.75 01/01/15 868,023
1,000 Austin, Texas, Combined Utility Refg Ser 1994 (FGIC).................. 6.25 05/15/16 1,013,090
--------------
- ----------
1,881,113
1,900
--------------
- ----------
HOSPITAL REVENUE (6.4%)
500 Rancho Mirage Joint Powers Financing Authority, California, Eisenhower
Memorial Hospital COPs.............................................. 7.00 03/01/22 516,340
1,000 Maryland Health & Higher Educational Facilities Authority, Kernan
Hospital Ser 1994 (Connie Lee)...................................... 6.10 07/01/24 983,800
1,300 New Hampshire Higher Educational & Health Facilities Authority, St
Joseph Hospital Ser 1994 (Connie Lee)............................... 6.35 01/01/07 1,367,106
--------------
- ----------
2,867,246
2,800
--------------
- ----------
INDUSTRIAL DEVELOPMENT/POLLUTION CONTROL REVENUE (3.4%)
1,500 Hawaii Department of Budget & Finance, Hawaiian Electric Co Ser 1995 A
(AMT) (MBIA)........................................................ 6.60 01/01/25 1,536,900
--------------
- ----------
MORTGAGE REVENUE - MULTI-FAMILY (2.3%)
1,000 Massachusetts Housing Finance Agency, Rental 1994 Ser A (AMT)
(AMBAC)............................................................. 6.65 07/01/19 1,023,730
--------------
- ----------
MORTGAGE REVENUE - SINGLE FAMILY (4.5%)
1,000 Tennessee Housing Development Agency, Finance 1994 Ser B (AMT)........ 6.55 07/01/19 1,006,970
1,000 Utah Housing Finance Agency, Federally Insured/Guaranteed Loans 1994
Issue E (AMT)....................................................... 6.50 07/01/26 1,008,600
--------------
- ----------
2,015,570
2,000
--------------
- ----------
</TABLE>
<PAGE>
DEAN WITTER NATIONAL MUNICIPAL TRUST
PORTFOLIO OF INVESTMENTS MARCH 31, 1995 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ---------- PUBLIC FACILITIES REVENUE (2.5%) ---------- --------- --------------
<C> <S> <C> <C> <C>
$ 1,000 Essex County Improvement Authority, New Jersey, County Jail & Youth
House Ser 1994 (AMBAC).............................................. 6.90 % 12/01/14 $ 1,096,600
--------------
- ----------
TRANSPORTATION FACILITIES REVENUE (9.6%)
850 Regional Transportation Authority, Illinois, Ser 1994 A............... 6.25 06/01/15 845,078
2,500 Maine Turnpike Authority, Ser 1994 (MBIA)............................. 6.00 07/01/18 2,468,825
1,000 New York State Thruway Authority, General 1995 Ser C (FGIC)........... 6.00 01/01/25 982,850
--------------
- ----------
4,296,753
4,350
--------------
- ----------
WATER & SEWER REVENUE (13.7%)
1,000 Birmingham Waterworks & Sewer Board, Alabama, Ser 1994................ 6.00 01/01/20 993,500
1,000 Castaic Lake Water Agency, California, Refg Ser 1994 A COPs (MBIA).... 6.00 08/01/18 982,640
1,000 Chicago, Illinois, Wastewater Ser 1994 (MBIA)......................... 6.375 01/01/24 1,013,480
500 Indiana Bond Bank, Revolving Fund Ser 1994 A.......................... 6.00 02/01/16 488,910
2,000 Massachusetts Water Resources Authority, 1992 Ser A................... 6.50 07/15/07 2,150,780
500 Santa Fe, New Mexico, Ser 1994 A (AMBAC).............................. 6.30 06/01/24 507,590
--------------
- ----------
6,136,900
6,000
--------------
- ----------
OTHER REVENUE (2.2%)
1,000 New Jersey Economic Development Authority, Market Transition Sr Lien
Ser 1994 A (MBIA)................................................... 5.875 07/01/11 998,320
--------------
- ----------
37,550 TOTAL MUNICIPAL BONDS (IDENTIFIED COST $35,598,254).......................................... 36,763,537
--------------
- ----------
</TABLE>
<TABLE>
<CAPTION>
<C> <S> <C> <C> <C>
SHORT-TERM MUNICIPAL OBLIGATIONS (15.0%)
600 Illinois Health Facilities Authority, Evangelical Hospitals Corp Ser
1985 B (Tender 04/05/95)............................................ 4.20* 01/01/16 600,000
2,000 Louisiana Offshore Terminal Authority, LOOP Inc Ser 1992 A (Tender
04/03/95)........................................................... 4.50* 09/01/08 2,000,000
1,200 Port Authority of New York & New Jersey, Ser 2** (Tender 04/03/95).... 4.25* 05/01/19 1,200,000
1,300 Gulf Coast Waste Disposal Authority, Texas, Amoco Oil Co Ser 1992
(Tender 04/03/95)................................................... 4.40* 10/01/17 1,300,000
1,600 Harris County Health Facilities Development Corporation, Texas,
Methodist Hospital Ser 1994 (Tender 04/03/95)....................... 4.50* 12/01/25 1,600,000
--------------
- ----------
6,700 TOTAL SHORT-TERM MUNICIPAL OBLIGATIONS (IDENTIFIED COST $6,700,000)........................... 6,700,000
--------------
- ----------
$ 44,250 TOTAL INVESTMENTS (IDENTIFIED COST $42,298,254) (A)................... 97.3 % 43,463,537
- ----------
- ----------
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES........................ 2.7 1,218,591
------- ------------
NET ASSETS............................................................ 100.0 % $ 44,682,128
------- ------------
------- ------------
<FN>
- ----------------
AMT ALTERNATIVE MINIMUM TAX.
COPS CERTIFICATES OF PARTICIPATION.
* VARIABLE OR FLOATING RATE SECURITIES. COUPON RATE REFLECTS CURRENT RATE.
** JOINTLY ISSUED.
(A) THE AGGREGATE COST FOR FEDERAL INCOME TAX PURPOSES IS $42,298,254; THE
AGGREGATE GROSS UNREALIZED APPRECIATION IS $1,166,199 AND THE AGGREGATE
GROSS UNREALIZED DEPRECIATION IS $916, RESULTING IN NET UNREALIZED
APPRECIATION OF $1,165,283.
BOND INSURANCE:
AMBAC AMBAC INDEMNITY CORPORATION.
CGIC CAPITAL GUARANTY INSURANCE COMPANY.
CONNIE CONNIE LEE INSURANCE COMPANY.
LEE
FGIC FINANCIAL GUARANTY INSURANCE COMPANY.
MBIA MUNICIPAL BOND INVESTORS ASSURANCE CORPORATION.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
GEOGRAPHIC SUMMARY OF INVESTMENTS
Based on Market Value as a Percent of Net Assets
MARCH 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
Alabama.................. 2.2% Massachusetts............ 11.9%
Alaska................... 3.7 New Hampshire............ 3.1
Arizona.................. 1.2 New Jersey............... 4.7
California............... 9.7 New Mexico............... 1.1
Florida.................. 1.1 New York................. 6.9
Georgia.................. 2.2 Rhode Island............. 1.0
Hawaii................... 6.8 Tennessee................ 2.3
Illinois................. 7.8 Texas.................... 8.8
Indiana.................. 1.1 Utah..................... 2.3
Louisiana................ 4.5 Washington............... 4.5
Maine.................... 5.5 Jointly Issued........... 2.7
Maryland................. 2.2 Total.................... 97.3%
</TABLE>
<PAGE>
DEAN WITTER NATIONAL MUNICIPAL TRUST
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $42,298,254)............ $ 43,463,537
Cash....................................... 285,067
Receivable for:
Interest................................. 627,663
Shares of beneficial interest sold....... 377,819
Deferred organizational expenses........... 128,530
Receivable from investment manager......... 22,636
Prepaid expenses........................... 19,083
------------
TOTAL ASSETS....................... 44,924,335
------------
LIABILITIES:
Payable for:
Shares of beneficial interest
repurchased............................ 37,540
Plan of distribution fee................. 21,797
Dividends to shareholders................ 12,621
Organizational expenses payable............ 128,530
Accrued expenses........................... 41,719
------------
TOTAL LIABILITIES.................. 242,207
------------
NET ASSETS:
Paid-in-capital............................ 43,518,049
Net unrealized appreciation................ 1,165,283
Accumulated net realized loss.............. (1,204)
------------
NET ASSETS......................... $ 44,682,128
------------
------------
NET ASSET VALUE PER SHARE, 4,376,991 shares
outstanding (unlimited shares authorized
of $.01 par value).......................
$10.21
------------
------------
</TABLE>
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED MARCH 31, 1995 (UNAUDITED)
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME........................... $ 979,959
-----------
EXPENSES
Plan of distribution fee................ 110,078
Investment management fee............... 64,212
Professional fees....................... 23,510
Shareholder reports and notices......... 16,542
Organizational expenses................. 15,350
Registration fees....................... 10,053
Transfer agent fees and expenses........ 9,179
Other................................... 2,730
-----------
Total Expenses before Amounts
Assumed/Waived....................... 251,654
-----------
Less: Amounts Assumed/Waived.......... (141,576)
-----------
Total Expenses after Amounts Assumed/
Waived............................... 110,078
-----------
NET INVESTMENT INCOME................. 869,881
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized loss....................... (1,204)
Net change in unrealized depreciation... 1,530,142
-----------
NET GAIN.............................. 1,528,938
-----------
NET INCREASE.......................... $ 2,398,819
-----------
-----------
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED FOR THE PERIOD
MARCH 31, 1995 JUNE 2, 1994* THROUGH
(UNAUDITED) SEPTEMBER 30, 1994
----------------------- ---------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income........................................ $ 869,881 $ 186,504
Net realized loss............................................ (1,204) --
Net change in unrealized appreciation/depreciation........... 1,530,142 (364,859)
----------------------- ---------------------
Net increase (decrease).................................. 2,398,819 (178,355)
Dividends to shareholders from net investment income........... (869,881) (186,504)
Net increase from transactions in shares of beneficial
interest...................................................... 13,293,438 30,124,611
----------------------- ---------------------
Total increase........................................... 14,822,376 29,759,752
NET ASSETS:
Beginning of period............................................ 29,859,752 100,000
----------------------- ---------------------
END OF PERIOD.................................................. $ 44,682,128 $ 29,859,752
----------------------- ---------------------
----------------------- ---------------------
<FN>
- ------------------
* COMMENCEMENT OF OPERATIONS.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER NATIONAL MUNICIPAL TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION AND ACCOUNTING POLICIES -- Dean Witter National Municipal Trust
(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
was organized as a Massachusetts business trust on March 29, 1994 and on May 10,
1994 issued 10,000 shares of beneficial interest for $100,000 to Dean Witter
InterCapital Inc. (the "Investment Manager") to effect the Fund's initial
capitalization. The Fund commenced operations on June 2, 1994.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- Portfolio securities are valued for the Fund
by an outside independent pricing service approved by the Trustees. The
pricing service has informed the Fund that in valuing the Fund's portfolio
securities, it uses both a computerized matrix of tax-exempt securities and
evaluations by its staff, in each case based on information concerning
market transactions and quotations from dealers which reflect the bid side
of the market each day. The Fund's portfolio securities are thus valued by
reference to a combination of transactions and quotations for the same or
other securities believed to be comparable in quality, coupon, maturity,
type of issue, call provisions, trading characteristics and other features
deemed to be relevant. Short-term debt securities having a maturity date of
more than sixty days at time of purchase are valued on a mark-to-market
basis until sixty days prior to maturity and thereafter at amortized cost
based on their value on the 61st day. Short-term debt securities having a
maturity date of sixty days or less at the time of purchase are valued at
amortized cost.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on
the trade date (date the order to buy or sell is executed). Realized gains
and losses on security transactions are determined by the identified cost
method. Discounts and premiums on securities purchased are amortized over
the life of the respective securities. Interest income is accrued daily.
C. 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 and nontaxable income to its
shareholders. Accordingly, no federal income tax provision is required.
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records
dividends and distributions to its shareholders on the record 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.
<PAGE>
DEAN WITTER NATIONAL MUNICIPAL TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
- --------------------------------------------------------------------------------
E. ORGANIZATIONAL EXPENSES -- The Investment Manager paid the
organizational expenses of the Fund in the amount of approximately $154,000
which will be reimbursed, exclusive of amounts assumed. Such expenses have
been deferred and are being amortized by the Fund 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 its Investment Manager a management fee, accrued daily
and payable monthly, by applying the annual rate of 0.35% to the Fund's net
assets 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.
The Investment Manager has undertaken to assume all expenses (except for the
Plan of Distribution fee and brokerage fees) and waive the compensation provided
for in the Agreement until such time as the Fund has $50 million of net assets
or until June 30, 1995, whichever occurs first.
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 0.60% of the lesser of:
(a) the average daily aggregate gross sales of the Fund's shares since the
Fund's inception (not including reinvestment of dividend or capital gains
distributions) less the average daily aggregate net asset value of the Fund's
shares redeemed since the Fund's inception upon which a contingent deferred
sales charge has been imposed or upon which such charge has been waived; or (b)
the Fund's average daily net assets. Amounts paid under the Plan are paid to the
Distributor to compensate it for the services provided and the expenses borne by
it and others in the distribution of the Fund's shares, including the payment of
commissions for sales of the Fund's shares and incentive compensation to, and
expenses of, account executives of Dean Witter Reynold Inc., an affiliate of the
Investment Manager and Distributor, and other 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.
<PAGE>
DEAN WITTER NATIONAL MUNICIPAL TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
- --------------------------------------------------------------------------------
The Distributor has informed the Fund that for the six months ended March
31, 1995, it received approximately $75,000 in contingent deferred sales charges
from certain redemptions of the Fund's shares. The Fund's 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 March 31, 1995 aggregated $17,520,153 and
$289,941, respectively.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At March 31, 1995, the Fund had
transfer agent fees and expenses payable of approximately $3,700.
5. SHARES OF BENEFICIAL INTEREST -- Transactions in shares of beneficial
interest were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX JUNE 2, 1994*
MONTHS ENDED THROUGH
MARCH 31, 1995 SEPTEMBER 30, 1994
--------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- --------------
<S> <C> <C> <C> <C>
Sold................................................. 1,923,871 $ 18,935,682 3,078,785 $ 30,761,843
Reinvestment of dividends............................ 51,591 510,621 11,037 109,831
----------- -------------- ----------- --------------
1,975,462 19,446,303 3,089,822 30,871,674
Repurchased.......................................... (623,281) (6,152,865) (75,012) (747,063)
----------- -------------- ----------- --------------
Net increase......................................... 1,352,181 $ 13,293,438 3,014,810 $ 30,124,611
----------- -------------- ----------- --------------
----------- -------------- ----------- --------------
- --------------
* COMMENCEMENT OF OPERATIONS.
</TABLE>
<PAGE>
DEAN WITTER NATIONAL MUNICIPAL TRUST
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 PERIOD
MONTHS ENDED JUNE 2, 1994*
MARCH 31, THROUGH
1995 SEPTEMBER 30,
(UNAUDITED) 1994
------------- -------------
<S> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning
of period................ $ 9.87 $ 10.00
------------- -------------
Net investment income..... 0.23 0.09
Net realized and
unrealized gain (loss)... 0.34 (0.13)
------------- -------------
Total from investment
operations............... 0.57 (0.04)
------------- -------------
Dividends from net
investment income........ (0.23) (0.09)
------------- -------------
Net asset value, end of
period................... $ 10.21 $ 9.87
------------- -------------
------------- -------------
TOTAL INVESTMENT
RETURN+.................. 5.42%(1) (0.46)%(1)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands)........... $44,682 $29,860
Ratios to average net
assets:
Expenses................ 0.60%(2)(4) 0.60%(2)(3)
Net investment income... 4.74%(2)(4) 3.07%(2)(3)
Portfolio turnover rate... 1.29%(1) 0%
</TABLE>
<TABLE>
<C> <S>
- --------------
* COMMENCEMENT OF OPERATIONS.
+ DOES NOT REFLECT THE DEDUCTION OF SALES CHARGE.
(1) NOT ANNUALIZED.
(2) ANNUALIZED.
(3) IF THE FUND HAD BORNE ALL EXPENSES THAT WERE ASSUMED OR WAIVED BY THE
INVESTMENT MANAGER, THE ABOVE ANNUALIZED EXPENSE AND NET INVESTMENT INCOME
RATIOS WOULD HAVE BEEN 2.08% AND 1.59%, RESPECTIVELY.
(4) IF THE FUND HAD BORNE ALL EXPENSES THAT WERE ASSUMED OR WAIVED BY THE
INVESTMENT MANAGER, THE ABOVE ANNUALIZED EXPENSE AND NET INVESTMENT INCOME
RATIOS WOULD HAVE BEEN 1.37% AND 3.97%, RESPECTIVELY.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
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<PAGE>
TRUSTEES
Jack F. Bennett
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. Manuel H. Johnson
Paul Kolton
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Sheldon Curtis
Vice President, Secretary and General Counsel
James F. Willison
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Dean Witter Trust Company
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Dean Witter InterCapital Inc.
Two World Trade Center
New York, New York 10048
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 NATIONAL MUNICIPAL TRUST
SEMIANNUAL REPORT
MARCH 31, 1995
