<PAGE>
Registration No. 33-56239
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
Two World Trade Center, New York, New York 10048
LETTER TO SHAREHOLDERS
DEAR SHAREHOLDER:
We are pleased to present this first report to shareholders of Dean Witter
Global Asset Allocation Fund. The Fund is a fully flexible portfolio that can
invest in any combination of equities, bonds and money market securities
worldwide. The portfolio management team searches for undervalued markets and
positions the Fund's assets to take advantage of investment opportunities
within those markets. This report covers the period from the Fund's inception
on February 28, 1995 through July 31, 1995.
FUND PERFORMANCE
In the short period of time since its commencement of operations, the Fund
has provided an attractive total return of 12 percent, versus 13.90 percent
for the Morgan Stanley Capital International World Index and 11.33 percent
for the average fund in the Lipper Analytical Services, Inc. Global Flexible
Fund Index. The Fund's total net assets under management have nearly doubled
since inception, and as of July 31, 1995 stood at more than $30 million.
THE GLOBAL MARKETPLACE
Thus far, 1995 has been a tumultuous year for global investment: bond markets
around the world generally have rallied, while stock markets have been fairly
inconsistent. For example, while the U.S. equity market has posted a total
return of more than 24 percent year-to-date through July 31, 1995, Japan and
Mexico have experienced losses of approximately 5 percent and 21 percent,
respectively, in U.S. dollar terms. Various economic fundamentals (interest
rate moves, inflationary pressures, etc.), differing central bank policies
and global currency fluctuations contributed to these results.
The U.S. dollar has traded in a narrow range versus the deutschemark and yen
since early in the second quarter, with the mark/dollar and yen/dollar
<PAGE>
Dean Witter Global Asset Allocation Fund
LETTER TO SHAREHOLDERS, continued
exchange rates hovering around 1.4 and 90, respectively. While the U.S.
economy and domestic interest rates have a significant influence on the
dollar, conditions in Germany and Japan also play an important role. In
Germany the central bank -- the Bundesbank -- has been assuming a strong
anti-inflationary stance, despite a collapse in monetary growth. Meanwhile,
Japan is in political and economic distress, and short-term interest rates
have fallen close to zero.
The Asian Pacific emerging markets experienced a volatile first half of 1995
with external events -- such as the Mexican financial collapse and its effect
on the peso/dollar relationship -- providing the primary market stimulus.
Investor confidence in the Asian markets has since recovered and the Asian
Pacific markets as a whole have turned positive since the start of the year.
In addition, the ability of Latin American countries to weather the crisis of
confidence generated by the sudden devaluation of the Mexican peso has begun
to renew domestic and foreign investor interest in their equity markets.
Despite losses in all of the major Latin American equity markets during the
first quarter of 1995 -- a result of continuing uncertainties in Mexico and
fears that similar pressures could surface throughout the region -- all of
the markets posted second quarter gains.
THE PORTFOLIO
As of July 31, 1995, the Fund's targeted allocation was 80 percent common
stocks, 10 percent bonds and 10 percent cash. The portfolio's country
allocation is currently weighted toward Japan (nearly 35 percent of net
assets), the U.S. (20 percent) the United Kingdom (approximately 5 percent),
France (approximately 4 percent) and Hong Kong (approximately 4 percent). The
emerging Asian and Latin American markets are also primary investment areas,
with approximately 4 percent committed to both regions. On July 31, 1995, the
fixed-income portfolio was invested solely in U.S. and European credits.
The Fund maintains major exposure in electronics (Hitachi, Ltd., Sharp Corp.)
and diversified machinery (Mitsubishi Heavy Industries, Ltd., Komatsu Ltd.)
in Japan; bank holding companies (Bank of Boston Corp., First Interstate
Bancorp) and domestic oil (Exxon Corp., Texaco, Inc.) in the U.S.; and health
& personal care (McBride PLC, SmithKline Beecham) and banking (National
Westminster Bank PLC, HSBC Holdings PLC) in the UK.
LOOKING AHEAD
The balance of 1995 appears to be pointing toward much more consistent and
positive global equity market results. While the U.S. stock market may have a
difficult time matching its outstanding performance thus far in 1995, Japan
and the emerging Asian markets, Europe and some Latin American
<PAGE>
Dean Witter Global Asset Allocation Fund
LETTER TO SHAREHOLDERS, continued
markets are expected to rebound over the next six months. This positive
outlook for global equity markets, combined with our more cautious view
toward global fixed-income investments, is likely to keep the Fund heavily
weighted toward stocks for the balance of the year.
We appreciate your support of Dean Witter Global Asset Allocation Fund and
look forward to continuing to serve your investment needs.
Very truly yours,
/s/ Charles A. Fiumefreddo
CHARLES A. FIUMEFREDDO
Chairman of the Board
<PAGE>
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
PORTFOLIO OF INVESTMENTS July 31, 1995 (unaudited)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ---------------- ------------------------------ ---------------
<C> <S> <C>
COMMON AND PREFERRED
STOCKS, RIGHTS AND BONDS (86.5%)
ARGENTINA (0.4%)
Multi-Industry
24,600 Compania Naviera Perez
Compac S.A. $ 120,552
---------------
BELGIUM (0.2%)
Steel & Iron
310 Arbed S.A. 47,610
---------------
BRAZIL (0.9%)
Telecommunications
3,100 Telebras (ADR) 110,825
---------------
Utilities - Electric
12,000 Centrais Eletricas Brasileiras
SA (ADR) 159,756
---------------
TOTAL BRAZIL 270,581
---------------
CHILE (0.6%)
Telecommunications
2,300 Compania Telecomunicacion
Chile (ADR) 179,975
---------------
COLOMBIA (0.2%)
Banks
$ 50 BCO Commercio Exterior
8.625% due 06/02/00 -
144A** 50,750
---------------
DENMARK (1.8%)
Banking
1,750 Den Danske Bank 124,466
---------------
Foreign Government
DKK 2,400 Kingdom of Denmark
7.00% due 12/15/04 410,162
---------------
TOTAL DENMARK 534,628
---------------
FINLAND (0.4%)
Electronics
1,800 Nokia AB (Series K) 120,872
---------------
FRANCE (4.3%)
Banking
2,048 Societe Generale 245,598
---------------
Building Materials
1,174 Compagnie de Saint Gobain 155,994
---------------
Financial Services
975 Cetelem Group 159,088
79 Credit Local de France 7,336
---------------
166,424
---------------
Foods & Beverages
280 LVMH Moet-Hennessy Louis
Vuitton $ 52,648
---------------
Foreign Government
FRF 1,200 France (Govt of)
8.50% due 04/25/03 269,257
---------------
Multi-Industry
1,300 Compagnie Generale des
Eaux 153,724
---------------
Oil Related
39 Societe National Elf
Aquitaine 3,043
---------------
Retail
280 Carrefour Supermarche 160,518
606 Castorama Dubois 99,386
607 Castorama Dubois (Rights)* 9,873
---------------
269,777
---------------
TOTAL FRANCE 1,316,465
---------------
GERMANY (3.6%)
Business Services
21 Sap AG (Pref.) 34,020
---------------
Cosmetics
230 Wella AG (Pref.) 199,993
---------------
Foreign Government
DEM 250 Germany (Federal Republic)
8.25% due 09/20/01 196,060
DEM 400 Treuhandanstalt 5.00% due
12/17/98 285,034
DEM 500 Treuhandanstalt 7.50% due
09/09/04 375,487
---------------
856,581
---------------
TOTAL GERMANY 1,090,594
---------------
HONG KONG (3.6%)
Conglomerates
38,000 Citic Pacific, Ltd. 101,167
74,000 First Pacific Co. Ltd. 78,899
51,000 Hutchison Whampoa, Ltd. 257,053
24,400 Jardine Matheson
Holdings Ltd. 183,000
---------------
620,119
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
Dean Witter Global Asset Allocation Fund
PORTFOLIO OF INVESTMENTS July 31, 1995 (unaudited) continued
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ---------------- ------------------------------ ---------------
<C> <S> <C>
Real Estate
34,000 Cheung Kong
(Holdings) Ltd. $ 170,490
59,000 Hong Kong Land
Holdings Ltd. 114,460
24,000 Sun Hung Kai
Properties Ltd. 180,674
---------------
465,624
---------------
TOTAL HONG KONG 1,085,743
---------------
ITALY (0.2%)
Foreign Government
ITL 50 Italy (Republic of)
6.875% due 09/27/23 43,740
---------------
Telecommunications
15,000 Telecom Italia Mobile SpA 18,809
15,000 Telecom Italia SpA 25,880
---------------
44,689
---------------
TOTAL ITALY 88,429
---------------
JAPAN (34.5%)
Banking
21,000 Asahi Bank, Ltd. 244,822
14,000 Sanwa Bank, Ltd. 299,491
21,000 Sumitomo Trust & Banking 325,637
---------------
869,950
---------------
Banks - Commercial
17,000 Mitsubishi Trust & Banking 305,942
---------------
Building & Construction
18,000 Nishimatsu Construction Co. 232,258
16,000 Sekisui House Ltd. 197,397
---------------
429,655
---------------
Chemicals
15,000 Shin-Etsu Chemical Co. 300,509
37,000 Teisan K.K. 198,925
---------------
499,434
---------------
Computer Software
5,800 Sony Music Entertainment
Inc. 272,439
---------------
Electrical Equipment
4,000 Advantest Corp 171,590
---------------
Electronics
15,000 Canon, Inc. $ 271,647
24,000 Hitachi, Ltd. 254,261
4,000 Kyocera Corp. 344,992
23,000 Matsushita Electric
Industrial Co. Ltd. 382,683
22,000 Sharp Corp. 321,222
---------------
1,574,805
---------------
Engineering & Construction
14,600 Kandenko Co., Ltd 190,040
---------------
Financial Services
14,000 Nomura Securities Co., Ltd. 269,383
6,400 Promise Co., Ltd. 286,859
---------------
556,242
---------------
Health & Personal Care
11,000 Yamanouchi Pharmaceutical 244,029
---------------
Insurance
19,000 Tokio Marine & Fire
Insurance Co. 225,806
---------------
International Trade
19,000 Mitsubishi Corp. 223,656
---------------
Machinery - Diversified
17,000 Daifuku 227,051
5,600 Fanuc, Ltd. 252,903
3,400 Keyence Corp. 419,468
26,000 Komatsu Ltd. 211,590
44,000 Mitsubishi Heavy Industries,
Ltd. 317,238
35,000 NSK Limited 236,503
---------------
1,664,753
---------------
Natural Gas
47,000 Osaka Gas Co. 172,892
---------------
Real Estate
18,000 Mitsui Fudosan Co. 230,221
---------------
Retail
5,400 Autobacs Seven Co. 572,699
4,000 Ito Yokado Co. Ltd. 220,487
---------------
793,186
---------------
Retail - Specialty
18,000 Joshin Denki 230,221
---------------
Steel & Iron
125,000 NKK Corporation 311,262
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
Dean Witter Global Asset Allocation Fund
PORTFOLIO OF INVESTMENTS July 31, 1995 (unaudited) continued
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ---------------- ------------------------------ ---------------
<C> <S> <C>
Telecommunications
35 Nippon Telegraph &
Telephone (ADR) $ 297,906
---------------
Textiles
21,000 Kuraray Co. Ltd. 224,618
---------------
Textiles - Apparel
Manufacturers
12,000 Tokyo Style 183,362
---------------
Transportation
48 East Japan Railway Co. 241,766
37,000 Nippon Yusen Kabushiki 226,146
---------------
467,912
---------------
Utilities - Electric
13,000 Kyushu Electric Power 350,198
---------------
TOTAL JAPAN 10,490,119
---------------
MALAYSIA (2.2%)
Banking
17,000 Malayan Banking Berhad 145,287
---------------
Building & Construction
24,000 United Engineers Ltd. 171,903
---------------
Entertainment
23,000 Genting Berhad 228,390
---------------
Gas
10,000 Petronas Gas Berhad 32,557
---------------
Telecommunications
33,000 Technology Resource
Industries Berhad 89,981
---------------
TOTAL MALAYSIA 668,118
---------------
MEXICO (1.4%)
Conglomerates
13,000 Grupo Carso S.A. de C.V.* 80,983
---------------
Foods & Beverages
35,500 Fomento Economico
Mexicano S.A. de C.V. 95,443
4,525 Panamerican Beverages, Inc. 138,578
---------------
234,021
---------------
Telecommunications
3,000 Telefonos de Mexico S.A.
(Class L) (ADR) 99,000
---------------
TOTAL MEXICO 414,004
---------------
NETHERLANDS (1.2%)
Publishing
900 Ver Ned Uitgev $ 107,863
---------------
Retail - General Merchandise
6,859 Koninklijke Ahold NV 246,479
---------------
TOTAL NETHERLANDS 354,342
---------------
NEW ZEALAND (0.5%)
Foreign Government
NZ$ 200 New Zealand Government
6.50% due 02/15/00 128,000
NZ$ 50 New Zealand Government
8.00% due 04/15/04 34,141
---------------
TOTAL NEW ZEALAND 162,141
---------------
PERU (0.4%)
Brewers
60,200 Cervecer Backus & Johnson 119,101
---------------
SINGAPORE (1.9%)
Banking
9,000 Development Bank of
Singapore Ltd. 107,212
19,000 Overseas Chinese Banking
Corp., Ltd. 223,609
---------------
330,821
---------------
Machinery - Diversified
19,000 Keppel Corp., Ltd. 169,071
---------------
Real Estate
13,000 City Developments, Ltd. 81,629
---------------
TOTAL SINGAPORE 581,521
---------------
SPAIN (1.5%)
Banks
1,000 Banco Bilbao Vizcaya 31,442
ESP 50 Banco Central Hispano
7.50% due 06/15/05 49,072
---------------
80,514
---------------
Foreign Government
ESP 40,000 Spain (Kingdom of)
12.25% due 03/25/00 349,726
---------------
Oil Related
600 Gas Natural SDG S.A. 71,526
---------------
TOTAL SPAIN 501,766
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
Dean Witter Global Asset Allocation Fund
PORTFOLIO OF INVESTMENTS July 31, 1995 (unaudited) continued
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ---------------- ------------------------------ ---------------
<C> <S> <C>
SWEDEN (0.9%)
Business Services
22,000 Assa Abloy AB (Series B) $122,957
---------------
Commercial Services
3,680 Securitas AB (Series B Free) 126,529
---------------
Paper & Forest Products
2,500 Stora Kopparbergs
(Series B Free) 38,380
---------------
TOTAL SWEDEN 287,866
---------------
SWITZERLAND (0.9%)
Conglomerates
160 BBC Brown Boveri AG 168,267
---------------
Health & Personal Care
15 Roche Holdings AG 102,063
---------------
TOTAL SWITZERLAND 270,330
---------------
UNITED KINGDOM (4.9%)
Banking
2,000 HSBC Holdings PLC 27,267
10,000 National Westminster Bank
PLC 94,773
pounds 50 Midland Bank PLC
sterling 7.65% due 05/01/25 52,702
---------------
174,742
---------------
Broadcast Media
7,000 British Sky Broadcasting
Group PLC* 38,140
---------------
Building & Construction
10,000 Blue Circle Industries PLC 52,492
---------------
Electronics
17,000 General Electric Co. PLC 82,320
---------------
Food Processing
4,000 Unilever PLC 81,689
---------------
Foods & Beverages
19,000 Grand Metropolitan PLC 113,982
---------------
Foreign Government
pounds 40 United Kingdom Treasury
sterling Gilt 8.00% due 6/10/03 63,212
---------------
Health & Personal Care
27,000 McBride PLC 90,034
10,000 SmithKline Beecham
(Units)++ * 88,391
---------------
178,425
---------------
Insurance
5,000 Prudential Corp. PLC $ 26,525
---------------
Leisure
10,000 Granada Group PLC 104,027
---------------
Multi-Industry
15,000 Williams Holdings PLC 78,259
---------------
Oil Related
17,000 British Petroleum Co. PLC 128,430
---------------
Pharmaceuticals
11,000 Glaxo Wellcome PLC 131,541
---------------
Retail
43,000 Asda Group PLC 65,176
---------------
Retail - Department Stores
4,000 Great Universal Stores PLC 39,824
---------------
Telecommunications
13,000 British Telecommunications
PLC 82,551
---------------
Utilities - Electric
7,000 Severn Trent PLC 66,676
---------------
TOTAL UNITED KINGDOM 1,508,011
---------------
UNITED STATES (20.0%)
Aircraft & Aerospace
2,800 Boeing Co. 187,600
---------------
Apparel
13,000 Liz Claiborne, Inc. 297,375
---------------
Appliances & Household
Durables
11,000 Maytag Corp. 180,125
---------------
Automotive
7,000 Ford Motor Co. 202,125
---------------
Bank Holding Companies
7,000 Bank of Boston Corp. 303,625
2,500 First Interstate Bancorp 215,312
---------------
518,937
---------------
Banks
$ 50 Bank of Boston Corp.
6.875% due 07/15/03 49,114
---------------
Banks - Thrift Institutions
12,000 Roosevelt Financial Group,
Inc. 184,500
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
Dean Witter Global Asset Allocation Fund
PORTFOLIO OF INVESTMENTS July 31, 1995 (unaudited) continued
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ---------------- ------------------------------ ---------------
<C> <S> <C>
Communications -
Equipment & Software
4,600 Cisco Systems, Inc.* $255,875
---------------
Computer Equipment
1,800 International Business
Machines Corp. 195,975
---------------
Computer Software
2,200 Microsoft Corp.* 198,825
---------------
Drugs & Healthcare
3,000 Johnson & Johnson 215,250
---------------
Electronics
2,500 General Electric Co. 147,500
---------------
Electronics -
Semiconductors/Components
4,000 Intel Corp. 259,500
---------------
Entertainment
7,000 Circus Circus Enterprises,
Inc.* 208,250
---------------
Financial
$ 50 Commercial Credit
7.75% due 03/01/05 52,250
$ 50 Salomon, Inc.
6.75% due 08/15/03 46,254
---------------
98,504
---------------
Financial Services
5,000 Travelers, Inc. 236,875
---------------
Foods & Beverages
3,800 Campbell Soup Co. 177,650
4,600 PepsiCo Inc. 215,625
---------------
393,275
---------------
Health Equipment &
Services
8,700 Mid Atlantic Medical Services,
Inc.* 170,738
---------------
Industrials
$ 50 Aramark Services 8.15% due
05/01/05 51,558
$ 50 News American Holdings,
Inc. 8.25% due 08/10/18 50,676
$ 50 Time Warner Entertainment
Co. 8.375% due 07/15/33 48,856
---------------
151,090
---------------
Oil - Domestic
2,800 Exxon Corp. $203,000
2,800 Texaco, Inc. 186,200
---------------
389,200
---------------
Restaurants
5,200 McDonald's Corp. 200,850
---------------
Semiconductor Equipment
3,000 Applied Materials, Inc.* 310,500
---------------
Steel & Iron
9,000 Bethlehem Steel Corp.* 141,750
---------------
Telecommunications
4,000 Bell Atlantic Corp. 229,000
---------------
Transportation
$ 50 United Air Lines, Inc.
11.21% due 05/01/14 61,331
---------------
U.S. Government & Agencies
Obligations
$ 50 Federal Home Loan Banks
7.78% due 01/30/97 50,406
$ 50 U.S. Treasury Bond
7.50% due 11/15/24 53,969
$ 150 U.S. Treasury Note
6.625% due 03/31/97 151,805
$ 175 U.S. Treasury Note
6.50% due 04/30/99 177,133
$ 75 U.S. Treasury Note
6.875% due 08/31/99 76,910
$ 75 U.S. Treasury Note
7.50% due 11/15/01 79,629
---------------
589,852
---------------
TOTAL UNITED STATES 6,073,916
---------------
TOTAL COMMON AND
PREFERRED STOCKS, RIGHTS
AND BONDS (Identified
Cost $24,324,806) 26,337,434
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
Dean Witter Global Asset Allocation Fund
PORTFOLIO OF INVESTMENTS July 31, 1995 (unaudited) continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- -------------- ------------------------------- -------------
<C> <S> <C>
SHORT-TERM INVESTMENT (a) (14.5%)
U.S. GOVERNMENT AGENCY
$ 4,400 Federal Home Loan
Mortgage Corp.
5.75% due 08/01/95
(Amortized Cost $4,400,000) $4,400,000
-------------
</TABLE>
<TABLE>
<CAPTION>
CURRENCY
AMOUNT IN
THOUSANDS VALUE
- -------------- ------------------------------- -------------
<C> <S> <C>
PURCHASED PUT OPTIONS ON
FOREIGN CURRENCY (0.6%)
FRF 15,000 November 28, 1995/FRF
4.87 21,000
yen 36,000 October 6, 1995/yen 84.19 150,480
-------------
TOTAL PURCHASED PUT
OPTIONS ON FOREIGN
CURRENCY
(Identified Cost $153,960) 171,480
-------------
TOTAL INVESTMENTS
(Identified Cost
$28,878,766) (b) ............ 101.6% 30,908,914
LIABILITIES IN EXCESS OF CASH
AND OTHER ASSETS ............ (1.6) (477,689)
------------ ------------
NET ASSETS ................... 100.0% $30,431,225
============ ============
</TABLE>
* Non-income producing security.
** Resale is restricted to qualified institutional investors.
++ Consists of more than one class of securities traded together as a
unit; generally stocks with attached common or preferred stocks.
(a) Security was purchased on a discount basis. The interest rate shown
has been adjusted to reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes is $28,878,766;
the aggregate gross unrealized appreciation is $2,228,141 and the
aggregate gross unrealized depreciation is $197,993, resulting in net
unrealized appreciation of $2,030,148.
Forward Foreign Currency Contracts Open at July 31, 1995:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS TO DELIVERY APPRECIATION/
RECEIVE IN EXCHANGE FOR DATE (DEPRECIATION)
- ----------------- ---------------- ------------ ------------------
<S> <C> <C> <C>
JPY 60,591,928 $ 690,113 08/02/95 ($4,296)
MYR 193,032 $ 78,702 08/02/95 (144)
$ 49,700 MYR 122,039 08/02/95 34
------------------
Net unrealized depreciation ................... ($4,406)
==================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
SUMMARY OF INVESTMENTS July 31, 1995 (unaudited)
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- ----------------------------- ------------- ------------
<S> <C> <C>
Aircraft & Aerospace $ 187,600 0.6%
Apparel 297,375 1.0
Appliances & Household
Durables 180,125 0.6
Automotive 202,125 0.7
Bank Holding Companies 518,937 1.7
Banking 1,810,894 6.0
Banks 233,080 0.8
Banks - Commercial 305,942 1.0
Banks - Thrift Institutions 184,500 0.6
Brewers 119,101 0.4
Broadcast Media 38,140 0.1
Building & Construction 654,050 2.1
Building Materials 155,994 0.5
Business Services 156,977 0.5
Chemicals 499,434 1.6
Commercial Services 126,528 0.4
Communications - Equipment &
Software 255,875 0.8
Computer Equipment 195,975 0.6
Computer Software 198,825 0.7
Conglomerates 869,371 2.9
Cosmetics 199,993 0.7
Drugs & Healthcare 215,250 0.7
Electrical Equipment 171,590 0.6
Electronics 1,925,496 6.3
Electronics -
Semiconductors/Components 259,500 0.9
Engineering & Construction 190,040 0.6
Entertainment 436,640 1.4
Financial 98,504 0.3
Financial Services 986,809 3.2
Food Processing 81,690 0.3
Foods & Beverages 793,926 2.7
Foreign Currency Put Options 171,480 0.6
Foreign Government 2,154,819 7.1
Gas 32,557 0.1
Health & Personal Care 434,483 1.4
Health Equipment & Services 170,737 0.6
Industrials 151,089 0.5
Insurance 252,332 0.8
International Trade 223,656 0.7
Leisure $ 104,027 0.3%
Machinery - Diversified 1,833,825 6.0
Manufacturing 272,439 0.9
Miscellaneous 108,843 0.4
Multi-Industry 352,535 1.2
Natural Gas 172,892 0.6
Oil - Domestic 389,200 1.3
Oil Related 202,999 0.7
Paper & Forest Products 38,380 0.1
Pharmaceuticals 131,541 0.4
Publishing 107,863 0.4
Real Estate 777,473 2.6
Restaurants 200,850 0.7
Retail 1,102,786 3.6
Retail - Department Stores 65,176 0.2
Retail - General Merchandise 246,479 0.8
Retail - Specialty 230,221 0.8
Semiconductor Equipment 310,500 1.0
Steel & Iron 500,622 1.6
Telecommunications 1,115,118 3.7
Textiles 224,617 0.7
Textiles - Apparel
Manufacturers 183,362 0.6
Transportation 529,243 1.7
U.S. Government & Agencies
Obligations 4,989,852 16.4
Utilities - Electric 576,631 1.8
------------- ------------
$30,908,914 101.6%
============= ============
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
- ----------------------------- ------------- ------------
<S> <C> <C>
Common Stocks $22,836,314 75.0%
Corporate Bonds 512,563 1.7
Foreign Currency Put Options 171,480 0.6
Preferred Stocks 234,013 0.8
Rights 9,873 0.0
Short-Term Investment 4,400,000 14.4
U.S. & Foreign Government &
Agencies Obligations 2,744,671 9.1
------------- ------------
$30,908,914 101.6%
============= ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $28,878,766) ....................................... $30,908,914
Cash ................................................................. 51,245
Receivable for:
Shares of beneficial interest sold ................................. 169,727
Investments sold ................................................... 129,292
Interest ........................................................... 115,253
Foreign withholding taxes reclaimed ................................ 21,523
Dividends .......................................................... 19,167
Receivable from affiliate ............................................ 174,561
Deferred organizational expenses ..................................... 164,819
Prepaid expenses and other assets .................................... 14,059
-------------
TOTAL ASSETS ....................................................... 31,768,560
-------------
LIABILITIES:
Payable for:
Investments purchased .............................................. 960,558
Management fee ..................................................... 24,526
Plan of distribution fee ........................................... 22,855
Shares of beneficial interest repurchased .......................... 10,714
Accrued expenses and other payables .................................. 138,682
Organizational expenses payable ...................................... 180,000
-------------
TOTAL LIABILITIES .................................................. 1,337,335
-------------
NET ASSETS:
Paid-in-capital ...................................................... 27,834,018
Net unrealized appreciation .......................................... 1,961,708
Undistributed net investment income .................................. 273,356
Undistributed net realized gain ...................................... 362,143
-------------
NET ASSETS ......................................................... $30,431,225
=============
NET ASSET VALUE PER SHARE,
2,724,140 shares outstanding (unlimited shares authorized of $.01
par value) .......................................................... $ 11.17
=============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
Dean Witter Global Asset Allocation Fund
FINANCIAL STATEMENTS, continued
STATEMENT OF OPERATIONS
FOR THE PERIOD FEBRUARY 28, 1995* THROUGH JULY 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Interest ............................................................ $ 243,761
Dividends (net of $19,180 foreign withholding tax) .................. 123,835
-----------
TOTAL INCOME ...................................................... 367,596
-----------
EXPENSES
Investment management fee ........................................... 98,349
Plan of distribution fee ............................................ 94,240
Custodian fees ...................................................... 78,965
Professional fees ................................................... 29,677
Organizational expenses ............................................. 15,181
Shareholder reports and notices ..................................... 14,906
Transfer agent fees and expenses .................................... 14,273
Registration fees ................................................... 11,694
Trustees' fees and expenses ......................................... 9,094
Other ............................................................... 351
-----------
TOTAL EXPENSES BEFORE AMOUNTS WAIVED/ASSUMED ...................... 366,730
LESS: EXPENSES WAIVED/ASSUMED ..................................... (272,490)
-----------
TOTAL EXPENSES AFTER AMOUNTS WAIVED/ASSUMED ....................... 94,240
-----------
NET INVESTMENT INCOME ............................................. 273,356
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments ....................................................... 750,670
Foreign exchange transactions ..................................... (388,527)
-----------
TOTAL GAIN ........................................................ 362,143
-----------
Net unrealized appreciation/depreciation on:
Investments ....................................................... 2,012,628
Translation of forward foreign currency contracts, other assets and
liabilities denominated in foreign currencies .................... (50,920)
-----------
TOTAL APPRECIATION ................................................ 1,961,708
-----------
NET GAIN .......................................................... 2,323,851
-----------
NET INCREASE ........................................................ $2,597,207
===========
</TABLE>
- ----------
* Commencement of operations.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
Dean Witter Global Asset Allocation Fund
FINANCIAL STATEMENTS, continued
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE PERIOD
FEBRUARY 28, 1995*
THROUGH JULY 31, 1995
- ------------------------------------------------------------------- ----------------------
(unaudited)
<S> <C>
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income .............................................. $273,356
Net realized gain .................................................. 362,143
Net unrealized appreciation ........................................ 1,961,708
----------------------
NET INCREASE ..................................................... 2,597,207
----------------------
Net increase from transactions in shares of beneficial interest ... 27,734,018
----------------------
TOTAL INCREASE ................................................... 30,331,225
NET ASSETS:
Beginning of period ................................................ 100,000
----------------------
END OF PERIOD
(Including undistributed net investment income of
$273,356) ........................................................ $30,431,225
======================
</TABLE>
- ----------
* Commencement of operations.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS July 31, 1995 (unaudited)
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter Global Asset Allocation 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 was organized as a
Massachusetts business trust on October 18, 1994 and had no operations other
than those relating to organizational matters and the issuance of 10,000
shares of beneficial interest for $100,000 to Dean Witter InterCapital Inc.
(the "Investment Manager"). The Fund commenced operations on February 28,
1995.
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 Stock Exchange or other domestic or foreign stock
exchanges is valued at its latest sale price on that exchange prior to the
time when assets are valued; if there were no sales that day, the security is
valued at the latest bid price (in cases where securities are traded on more
than one exchange; the securities are valued on the exchange designated as
the primary market by the Trustees); (2) all other portfolio securities for
which over-the-counter market quotations are readily available are valued at
the latest available bid price prior to the time of valuation; (3) when
market quotations are not readily available, including circumstances under
which it is determined by the Investment Manager or Sub-Advisers that sale
and 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
(valuation of debt securities for which market quotations are not readily
available may be based upon current market prices of securities which are
comparable in coupon, rating and maturity or an appropriate matrix utilizing
similar factors); (4) certain of the Fund's portfolio securities may be
valued by an outside pricing service approved by the Trustees. The pricing
service utilizes a matrix system incorporating security quality, maturity and
coupon as the evaluation model parameters, and/or research and evaluations by
its staff, including review of broker-dealer market price quotations, if
available, in determining what it believes is the fair valuation of the
portfolio 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
<PAGE>
Dean Witter Global Asset Allocation Fund
NOTES TO FINANCIAL STATEMENTS July 31, 1995 (unaudited) continued
identified cost method. Dividend income is recorded on the ex-dividend date
except certain dividends from foreign securities which are recorded as soon
as the Fund is informed after the ex-dividend date. Interest income is
accrued daily and includes accretion of discounts of certain short-term
securities.
C. FOREIGN CURRENCY TRANSLATION -- The books and records of the Fund are
maintained in U.S. dollars as follows: (1) the foreign currency market value
of investment securities, other assets and liabilities and forward contracts
are translated at the exchange rates prevailing at the end of the period; and
(2) purchases, sales, income and expenses are translated at the exchange
rates prevailing on the respective dates of such transactions. The resultant
exchange gains and losses are included in the Statement of Operations as
realized and unrealized gain/loss on foreign exchange transactions. Pursuant
to U.S. Federal income tax regulations, certain foreign exchange gains/losses
included in realized and unrealized gain/loss are included in or are a
reduction of ordinary income for federal income tax purposes. The Fund does
not isolate that portion of the results of operations arising as a result of
changes in the foreign exchange rates from the changes in the market prices
of the securities.
D. FORWARD FOREIGN CURRENCY CONTRACTS -- The Fund may enter into forward
foreign currency contracts which are valued daily at the appropriate exchange
rates. The resultant unrealized exchange gains and losses are included in the
Statement of Operations as unrealized foreign currencies gain or loss. 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 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 Global Asset Allocation Fund
NOTES TO FINANCIAL STATEMENTS July 31, 1995 (unaudited) continued
G. ORGANIZATIONAL EXPENSES -- The Investment Manager paid the organizational
expenses of the Fund in the amount of approximately $180,000. The Fund will
reimburse the Investment Manager for such expenses, exclusive of amounts
waived.
2. INVESTMENT MANAGEMENT AND SUB-ADVISORY AGREEMENTS
Pursuant to an Investment Management Agreement, the Fund pays its Investment
Manager a management fee, calculated daily and payable monthly, by applying
the annual rate of 1.0% 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.
Under Sub-Advisory Agreements between TCW Funds Management, Inc. and Morgan
Grenfell Investment Services Ltd. (the "Sub-Advisers") and the Investment
Manager, the Sub-Advisers provide the Fund with investment advice and
portfolio management relating to the Fund's investments in securities,
subject to the overall supervision of the Investment Manager. As compensation
for the services provided pursuant to the Sub-Advisory Agreements, the
Investment Manager pays each Sub-Adviser monthly compensation equal to 30% of
its monthly compensation.
The Investment Manager had undertaken to assume and will continue to assume
all operating expenses (except for the Plan of Distribution fee and brokerage
fees) and waive the compensation provided for in its Investment Management
Agreement and the Sub-Advisers had undertaken to waive and will continue to
waive their respective compensation provided for in the Advisory Agreement,
until such time as the Fund had $50 million of net assets or until December
31, 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 1.0% 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 gain
<PAGE>
Dean Witter Global Asset Allocation Fund
NOTES TO FINANCIAL STATEMENTS July 31, 1995 (unaudited) continued
distributions) less the average daily aggregate net asset value of the Fund's
shares redeemed since the Fund's inception upon which a contingent deferred
sales charge has been imposed or upon which such charge has been waived; or
(b) the Fund's average daily net assets. Amounts paid under the Plan are paid
to the Distributor to compensate it for the services provided and the
expenses borne by it and others in the distribution of the Fund's shares,
including the payment of commissions for sales of the Fund's shares and
incentive compensation to, and expenses of, the account executives of Dean
Witter Reynolds Inc. ("DWR"), an affiliate of the Investment Manager and
Distributor, and other employees or selected 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 by the Distributor, may be recovered through future
distribution fees from the Fund and contingent deferred sales charges from
the Fund's shareholders.
The Distributor has informed the Fund that for the period ended July 31,
1995, it received approximately $18,000 in contingent deferred sales charges
from 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 period ended July 31, 1995
aggregated $36,444,997 and $12,861,296, respectively. Included in the
aforementioned are purchases and sales of U.S. Government securities of
$1,796,998 and $1,254,309, respectively.
For the period ended July 31, 1995, the Fund incurred brokerage commissions
of $5,175 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 July 31, 1995, the Fund had
transfer agent fees and expenses payable of approximately $4,000.
<PAGE>
Dean Witter Global Asset Allocation Fund
NOTES TO FINANCIAL STATEMENTS July 31, 1995 (unaudited) continued
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
FEBRUARY 28, 1995*
THROUGH JULY 31, 1995
--------------------------
Shares Amount
----------- -------------
<S> <C> <C>
Sold ..................................... 2,877,877 $29,464,984
Repurchased ............................. (163,737) (1,730,966)
----------- -------------
Net increase ............................ 2,714,140 $27,734,018
=========== =============
</TABLE>
- ----------
* Commencement of operations.
6. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS
The Fund may enter into forward foreign currency contracts ("forward
contracts") to facilitate settlement of foreign currency denominated
portfolio transactions or to manage foreign currency exposure associated with
foreign currency denominated securities. The Fund may also purchase put
options on foreign currencies in which the Funds' securities are denominated
to protect against a decline in value of such securities due to currency
devaluations.
At July 31, 1995, there were no outstanding forward contracts other than
those used to facilitate settlement of foreign currency denominated portfolio
transactions. Additionally, at July 31, 1995, the Fund had outstanding
over-the-counter purchased put options on foreign currencies.
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 and
over-the-counter purchased put options from the potential inability of the
counterparties to meet the terms of their contracts.
<PAGE>
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout the period:
<TABLE>
<CAPTION>
FOR THE PERIOD
FEBRUARY 28, 1995*
THROUGH JULY 31,
1995
- ---------------------------------------- ------------------
(UNAUDITED)
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ........................ $ 10.00
------------------
Net investment income ....................................... 0.10
Net realized and unrealized gain ............................ 1.07
------------------
Total from investment operations ............................ 1.17
------------------
Net asset value, end of period............................... $ 11.17
==================
TOTAL INVESTMENT RETURN+..................................... 12.00%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses..................................................... 0.96%(2)(3)
Net investment income........................................ 2.78%(2)(3)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands...................... $30,431
Portfolio turnover rate...................................... 61%(1)
</TABLE>
- ----------
* Commencement of operations.
+ Does not reflect the deduction of sales charge.
(1) Not annualized.
(2) Annualized.
(3) If the Fund had borne all its expenses, after application of the
Fund's expense limitation, the ratios to average net asset for
expenses and net investment income would have been 3.50% and 0.24%,
respectively.
SEE NOTES TO FINANCIAL STATEMENTS
<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
Mark Bavoso
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
GLOBAL ASSET
ALLOCATION FUND
SEMIANNUAL REPORT
JULY 31, 1995
