<PAGE>
Registration File No.: 33-56239
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
Two World Trade Center, New York, New York 10048
LETTER TO THE SHAREHOLDERS January 31, 1996
DEAR SHAREHOLDER:
We are pleased to present the annual report to shareholders of Dean Witter
Global Asset Allocation Fund, a mutual fund with the flexibility to invest in
any combination of global equities, bonds, and money market instruments. The
Fund's management team first seeks out undervalued markets and second,
positions the Fund's assets to take advantage of investment opportunities
within those markets. This report covers the period since the Fund's
inception (February 28, 1995) through January 31, 1996. During this period,
the Fund's net assets increased from $16 million on February 28, 1995, to $44
million on January 31, 1996.
For the period under review, Dean Witter Global Asset Allocation Fund
performed favorably versus both its peers and the financial markets in
general. The Fund produced a total return of 23.89 percent for the period
since inception through January 31, 1996, compared to a return of 19.63
percent for the Lipper Global Flexible Portfolio Funds Index and a return of
21.16 percent for the Morgan Stanley Capital International World Index (MSCI
World Index). While global equity markets as a whole provided mixed results
during this period, fixed income markets throughout the world benefited from
lower interest rates, primarily in Germany, Japan, and the United States. The
accompanying chart illustrates the growth of a $10,000 investment in the Fund
from inception (February 28, 1995) through January 31, 1996, versus a similar
investment in the issues that comprise the MSCI World Index and the Lipper
Global Flexible Portfolio Funds Index.
THE GLOBAL BACKDROP
In response to the Federal Reserve Board's easing of monetary policy, a
continued benign inflation environment and outstanding corporate earnings
reports, the U.S. stock and bond markets rallied steadily during the
twelve-month period ended January 31, 1996. Globally, however, regional
markets posted mixed returns as diverse economic factors led to varied
investment results. In Europe, slow but steady economic growth in
<PAGE>
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
LETTER TO THE SHAREHOLDERS January 31, 1996, continued
the key markets of the United Kingdom and Germany led to solid equity market
returns, while cautious central bankers in both countries reduced interest
rates gradually throughout the year.
In Japan, a powerful surge of foreign buying late in 1995 boosted the NIKKEI
225 Index to its highest level in three years. Expectations for an economic
recovery, after many years of deterioration, fueled this investment wave. It
remains to be seen, however, whether or not Japan's central bank has provided
sufficient liquidity to maintain this optimism over the long term. While
risks associated with a leveraged banking system and deflationary trends
continue, the Japanese economy appears to be heading in the right direction.
The Pacific Rim countries (Malaysia, Singapore, Hong Kong), as well as
Australia and New Zealand, continued to enjoy positive economic growth,
however, only Hong Kong was able to provide outstanding equity market
returns. This region's dependence on China and Japan for sustained capital
infusions typically leads to greater volatility within each economy, however
the outstanding long-term growth rates of these countries, tied to an
efficient, low-wage work force, provides the potential for impressive
returns.
Latin America struggled throughout 1995, as a severe recession in Mexico
spilled over into other central and South American economies. As the Mexican
peso collapsed, recoveries in Brazil, Columbia, Peru and other countries were
scrutinized more closely by investors, who often chose to avoid investment in
these markets due to this uncertainty. Ironically, the fundamentals in Latin
and South America, excluding Mexico, held up quite well throughout 1995, as
programs for privatizations, inflation control and overall economic growth
continued to proliferate.
THE PORTFOLIO
As of January 31, 1996, the Portfolio's targeted allocation was 74 percent
common stocks, 10 percent bonds and 14 percent cash equivalents, continuing
our long standing bias
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
GROWTH OF $10,000
DATE TOTAL MSCI WORLD IX LIPPER IX
- ---- ----- ------------------------
February 28,1995 $10,000 $10,000 $10,000
January 31, 1996 $11,889 (3) $12,116 $11,963
CUMULATIVE TOTAL RETURNS
LIFE OF FUND
23.89 (1)
18.89 (2)
Fund MSCI WORLD IX (4) LIPPER IX (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 maximumapplicable contingent deferred sales charge (CDSC) (since
inception - 5%). See the Fund's currentprospectus for complete details
on fees and sales charges.
(3) Closing value after the deduction of a 5% CDSC, assuming a complete
redemption on January 31, 1996.
(4) The Morgan Stanley Capital International World Index (MSCI) measures
performance for a diverse range of global stock markets including the
U.S., Canada, Europe, Australia, New Zealand and the Far East. The
index does not include any expenses, fees or charges or reinvestment
of dividends.The Index is unmanaged and should not be considered an
investment.
(5) The Lipper Global Flexible Portfolio Funds Index is an equally-weighted
performance index of the largest qualifying funds (based on net assets)
in the Lipper Global Flexible Portfolio Funds objective. The Index, which
is adjusted for capital gains distributions and income dividends, is
unmanaged andshould not be considered an investment. There are currently
10 funds represented in this Index.
<PAGE>
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
LETTER TO THE SHAREHOLDERS January 31, 1996, continued
toward global equity markets. The equity portfolio's country allocation
features overweighted positions (versus a global equity index) in Japan (29
percent of net assets), the Pacific Rim (12 percent), and Latin America (6
percent). Assets allocated to the U.S. (19 percent) and Europe (19 percent)
represent underweights versus a global equity index, a position consistent
with these market's higher valuations vis-a-vis those represented by our
overweighted sectors.
The fixed-income portfolio is invested in both U.S. and European debt
instruments, including government and corporate bonds. U.S. Treasury
securities of various maturities, German, Danish, British and Italian
corporate bonds make up this well diversified portfolio.
The Fund maintains a diversified strategy toward global industries. Among the
largest industry groups represented are electronics (Applied Materials,
General Electric, Hitachi, Ltd), consumer goods (Maytag, Canon Inc., Hermes
Intl.) and financials (BankAmerica, Banco Bilbao).
LOOKING AHEAD
We believe, the balance of 1996 appears well positioned for the continuation
of this impressive global bull market in stocks and bonds. Taking into
account that corrections may occur from time to time and the inherent
uncertainties in predicting the world's markets, the positive fundamentals
which have driven this advance appear to be continuing into the spring,
including low global inflation, easing monetary policy among the G-7
industrialized nations and large flows of retirement savings moving into
investment vehicles such as mutual funds. We expect these trends to continue
well into the summer, and thus anticipate that we will maintain our fully
invested position in the Fund.
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 January 31, 1996
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS AND BONDS (84.7%)
ARGENTINA (0.7%)
Multi-Industry
24,600 Compania Naviera Perez Compac S.A.C.F.I.M.F.A. ................. $ 155,241
-------------
Oil & Gas
4,900 Transportadora de Gas del Sur S.A. (ADR) ....................... 61,863
-------------
Oil Related
2,700 Yacimentos Petroliferos Fiscales S.A. (ADR) .................... 61,088
-------------
Telecommunications
1,900 Telefonica de Argentina S.A. (ADR) ............................. 60,800
-------------
TotaL ARGENTINA ................................................ 338,992
-------------
BRAZIL (2.0%)
Brewery
192,000 Companhia Cervejaria Brahma (Pref.)* ........................... 93,545
-------------
Food, Beverage, Tobacco & Household Products
7,500 Refrigeracao Parana S.A. ....................................... 97,035
-------------
Metals & Mining
1,420 Companhia Vale do Rio Doce S.A. (Pref.) ........................ 60,173
-------------
Telecommunications
3,650 Telecomunicacoes Brasileiras S.A. (ADR) ........................ 203,488
726,000 Telecomunicacoes de Sao Paulo S.A. (Pref.)* .................... 133,620
-------------
337,108
-------------
Utilities - Electric
12,000 Centrais Electricas Brasileiras S.A. (ADR) ..................... 180,000
4,700 Companhia Energetica de Minas Gerais S.A.*
(Pref.) (ADR) - 144A** ....................................... 116,913
-------------
296,913
-------------
TOTAL BRAZIL ................................................... 884,774
-------------
</TABLE>
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------
<C> <S> <C>
CHILE (0.8%)
Food, Beverage, Tobacco & Household Products
2,620 Embotelladora Andina S.A. (ADR) ................................ $ 91,045
-------------
Investment Companies
39,000 The Five Arrows Chile Investment Trust Ltd. .................... 113,880
-------------
Telecommunications
900 Compania de Telecomunicaciones de Chile S.A. (ADR) ............. 72,113
-------------
Utilities - Electric
3,200 Enersis S.A. (ADR) ............................................. 88,000
-------------
TOTAL CHILE .................................................... 365,038
-------------
COLOMBIA (0.2%)
Banking
4,800 Banco Industrial Colombiano S.A. (ADR) ......................... 85,799
-------------
DENMARK (1.1%)
Banking
1,750 Den Danske Bank ................................................ 122,104
-------------
Foreign Government
DKK 250K Kingdom of Denmark 9.00% due 11/15/00 .......................... 48,724
DKK 1,750K Kingdom of Denmark 7.00% due 12/15/04 .......................... 305,502
-------------
354,226
-------------
TOTAL DENMARK .................................................. 476,330
-------------
FINLAND (0.2%)
Telecommunications
1,800 Nokia AB (Series K) ............................................ 70,204
-------------
FRANCE (2.5%)
Electronics - Semiconductors/Components
2,100 SGS-Thomson
Microelectronics NV* ........................................... 77,320
-------------
975 Financial Services Cetelem Group ............................... 200,308
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
<TABLE>
<CAPTION>
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
PORTFOLIO OF INVESTMENTS January 31, 1996, continued
SHARES/PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------
<C> <S> <C>
Food, Beverage, Tobacco & Household Products
580 LVMH Moet-Hennessy Louis Vuitton ............................... $ 129,381
-------------
Foreign Government
FRF 600K France (Govt of) 8.50% due 04/25/03 ............................ 134,125
FRF 200K France (Govt of) 6.00% due 10/25/25 ............................ 33,686
-------------
167,811
-------------
Insurance
3,500 Scor S.A. ...................................................... 110,429
-------------
Retail
280 Carrefour Supermarche .......................................... 180,196
666 Castorama Dubois ............................................... 117,131
-------------
297,327
-------------
Textiles
600 Hermes International ........................................... 121,622
-------------
TOTAL FRANCE ................................................... 1,104,198
-------------
GERMANY (3.3%)
Automotive
315 Volkswagen AG .................................................. 114,751
-------------
Business Services
810 SAP AG (Pref.) ................................................. 123,795
-------------
Foreign Government
DEM 150K Bundesrepublic Deutschland 8.375% due 05/21/01 ................. 115,905
DEM 300K Germany (Federal Republic) 8.25% due 09/20/01 .................. 231,205
DEM 250K Germany (Federal Republic) 7.25% due 10/21/02 .................. 184,311
DEM 400K Treuhandanstalt 5.00% due 12/17/98 ............................. 275,880
DEM 500K Treuhandanstalt 7.00% due 11/25/99 ............................. 366,035
DEM 50K Treuhandanstalt 7.50% due 09/09/04 ............................. 37,241
-------------
1,210,577
-------------
TOTAL GERMANY .................................................. 1,449,123
-------------
</TABLE>
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------
<C> <S> <C>
HONG KONG (6.6%)
Banking
28,000 Hang Seng Bank Ltd. ............................................ $ 270,702
-------------
Conglomerates
38,000 Citic Pacific, Ltd. ............................................ 147,200
188,000 First Pacific Co. Ltd. ......................................... 238,291
97,000 Hutchison Whampoa, Ltd. ........................................ 630,425
30,400 Jardine Matheson Holdings Ltd. ................................. 256,880
25,000 Swire Pacific Ltd. (Class A) ................................... 218,258
-------------
1,491,054
-------------
Hotels/Motels
100,000 Shangri-La Asia Ltd. ........................................... 136,451
-------------
Real Estate
62,000 Cheung Kong (Holdings) Ltd. .................................... 461,088
119,000 Hong Kong Land Holdings Ltd. ................................... 270,130
29,000 Sun Hung Kai Properties Ltd. ................................... 275,684
-------------
1,006,902
-------------
TOTAL HONG KONG ................................................ 2,905,109
-------------
ITALY (1.6%)
Foreign Government
ITL 75,000K Italy (Republic of) 10.50% due 11/01/98 ........................ 48,573
ITL 440,000K Italy (Republic of) 10.50% due 04/01/00 ........................ 287,296
ITL 90,000K Italy (Republic of) 11.00% due 10/01/02 ........................ 56,808
ITL 290,000K Italy (Republic of) 10.50% due 09/01/05 ........................ 186,958
-------------
579,635
-------------
Telecommunications
60,000 Telecom Italia Mobile SpA ...................................... 108,204
-------------
TOTAL ITALY .................................................... 687,839
-------------
JAPAN (29.3%)
Automotive
49,000 Suzuki Motor Co. Ltd. .......................................... 595,215
-------------
Banking
23,000 Asahi Bank, Ltd. ............................................... 275,088
18,000 Mitsubishi Trust & Banking ..................................... 279,200
15,000 Sanwa Bank, Ltd. ............................................... 283,125
22,000 Sumitomo Trust & Banking ....................................... 296,020
-------------
1,133,433
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
PORTFOLIO OF INVESTMENTS January 31, 1996, continued
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------
<C> <S> <C>
Building & Construction
14,000 Kandenko Co., Ltd. ............................................. $ 177,910
20,000 Nishimatsu Construction Co. .................................... 231,732
17,000 Sekisui House Ltd. ............................................. 216,035
-------------
625,677
-------------
Chemicals
50,000 Asahi Chemical Industrial Co Ltd. .............................. 363,017
17,000 Shin-Etsu Chemical Co. ......................................... 343,113
41,000 Teisan K.K. .................................................... 233,695
-------------
939,825
-------------
Electronic & Electrical Equipment
4,000 Advantest Corp. ................................................ 195,477
24,000 Canon, Inc. .................................................... 453,000
25,000 Hitachi, Ltd. .................................................. 252,290
4,000 Kyocera Corp. .................................................. 283,685
24,000 Matsushita Electric Industrial Co. Ltd. ........................ 399,177
-------------
1,583,629
-------------
Financial Services
36,000 New Japan Securities* .......................................... 234,125
14,000 Nomura Securities Co., Ltd. .................................... 303,495
7,400 Promise Co., Ltd. .............................................. 333,975
-------------
871,595
-------------
Gas
54,000 Osaka Gas Co. .................................................. 192,748
-------------
Health & Personal Care
13,000 Yamanouchi Pharmaceutical Co. .................................. 284,245
-------------
Insurance
22,000 Tokio Marine & Fire Insurance Co. .............................. 275,462
-------------
International Trade
21,000 Mitsubishi Corp. ............................................... 259,016
-------------
Machinery
19,000 Daifuku Co. Ltd. ............................................... 260,980
5,600 Fanuc, Ltd. .................................................... 244,365
3,400 Keyence Corp. .................................................. 365,353
29,000 Komatsu Ltd. ................................................... 244,421
64,000 Mitsubishi Heavy Industries, Ltd. .............................. 507,719
54,000 NSK Ltd. ....................................................... 393,572
-------------
2,016,410
-------------
</TABLE>
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------
<C> <S> <C>
Manufacturing
6,200 Sony Music Entertainment Inc. .................................. $ 319,790
-------------
Real Estate
24,000 Mitsubishi Estate Co. Ltd. ..................................... 291,535
20,000 Mitsui Fudosan Co. ............................................. 237,338
-------------
528,873
-------------
Retail
18,000 Best Denki Co. Ltd. ............................................ 255,654
5,000 Ito-Yokado Co. Ltd. ............................................ 284,526
20,000 Joshin Denki ................................................... 250,420
-------------
790,600
-------------
Retail - Specialty
3,800 Autobacs Seven Co. ............................................. 330,928
-------------
Steel & Iron
136,000 NKK Corp. ...................................................... 387,591
32,000 Yamato Kogyo Co., Ltd. ......................................... 299,010
-------------
686,601
-------------
Telecommunications
39 Nippon Telegraph & Telephone ................................... 295,179
-------------
Textiles
23,000 Kuraray Co. Ltd. ............................................... 242,852
-------------
Textiles - Apparel
13,000 Tokyo Style .................................................... 208,933
-------------
Transportation
52 East Japan Railway Co. ......................................... 258,494
41,000 Nippon Yusen Kabushiki ......................................... 229,481
-------------
487,975
-------------
Utilities
14,100 Kyushu Electric Power .......................................... 322,791
-------------
TOTAL JAPAN .................................................... 12,991,777
-------------
MALAYSIA (2.5%)
Banking
17,000 Malayan Banking Berhad ......................................... 152,070
-------------
Building & Construction
38,000 United Engineers Malaysia Berhad ............................... 246,406
-------------
Entertainment
21,000 Genting Berhad ................................................. 190,312
-------------
Gas
27,000 Petronas Gas Berhad* ........................................... 101,250
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
PORTFOLIO OF INVESTMENTS January 31, 1996, continued
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------
<C> <S> <C>
Telecommunications
78,000 Technology Resources Industries Berhad* ........................ $ 239,180
-------------
Utilities
47,000 Tenaga Nasional Berhad ......................................... 174,415
-------------
TOTAL MALAYSIA ................................................. 1,103,633
-------------
MEXICO (2.2%)
Building & Construction
7,600 Empresas ICA Soceidad Controladora S.A. de C.V. (ADR) .......... 102,600
-------------
Building Materials
40,300 Cemex S.A. de C.V. (B Shares) .................................. 166,183
-------------
Conglomerates
21,500 Grupo Carso S.A. de C.V. (Series A1)* .......................... 148,104
3,500 Grupo Industria Alfa S.A. de C.V. (A Shares) ................... 47,364
-------------
195,468
-------------
Food, Beverage, Tobacco & Household Products
35,500 Fomento Economico Mexicano S.A. de C.V. (B Shares) ............. 101,774
4,525 Panamerican Beverages, Inc. .................................... 178,738
-------------
280,512
-------------
Retail
29,000 Cifra S.A. de C.V. (C Shares)* ................................. 36,801
-------------
Steel & Iron
9,000 Tubos de Acero de Mexico S.A. (ADR)* ........................... 73,125
-------------
Telecommunications
3,000 Telefonos de Mexico S.A. de C.V. (Series L) (ADR) .............. 101,625
-------------
TOTAL MEXICO ................................................... 956,314
-------------
NETHERLANDS (1.7%)
Building & Construction
1,900 Hunter Douglas NV .............................................. 92,864
-------------
Business Services
2,200 Randstad Holdings NV ........................................... 100,929
-------------
</TABLE>
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------
<C> <S> <C>
Insurance
1,800 Internationale Nederlanden Groep NV ............................ $ 117,337
-------------
Publishing
900 Ver Ned Uitgev NV .............................................. 133,043
1,350 Wegener NV ..................................................... 150,990
-------------
284,033
-------------
Retail
3,927 Koninklijke Ahold NV ........................................... 161,555
-------------
Total Netherlands .............................................. 756,718
-------------
PERU (0.2%)
Brewery
67,000 Cerveceria Backus & Johnston S.A. .............................. 103,842
-------------
SINGAPORE (2.5%)
Banking
18,000 Development Bank of Singapore, Ltd. ............................ 254,879
27,000 Overseas Chinese Banking Corp., Ltd. ........................... 370,906
-------------
625,785
-------------
Conglomerates
19,000 Keppel Corp., Ltd. ............................................. 178,020
-------------
Real Estate
13,000 City Developments, Ltd. ........................................ 105,319
54,000 DBS Land Ltd. .................................................. 213,032
-------------
318,351
-------------
TOTAL SINGAPORE ................................................ 1,122,156
-------------
SPAIN (1.3%)
Banks
4,000 Banco Bilbao Vizcaya ........................................... 146,629
-------------
Foreign Government
ESP 20,000K Spain (Kingdom of) 12.25% due 03/25/00 ......................... 176,721
-------------
Gas
600 Gas Natural SDG S.A. ........................................... 86,877
-------------
Oil Related
4,500 Repsol S.A. .................................................... 156,522
-------------
TOTAL SPAIN .................................................... 566,749
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
PORTFOLIO OF INVESTMENTS January 31, 1996, continued
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------
<C> <S> <C>
SWEDEN (1.9%)
Business Services
22,000 Assa Abloy AB (Series B) ....................................... $ 192,216
10,000 Scribona AB (Series "B" Free) .................................. 96,036
3,680 Securitas AB (Series "B" Free) ................................. 159,966
-------------
448,218
-------------
Foreign Government
SEK 1,200K Sweden (Kingdom of) 13.00% due 06/15/01 ........................ 211,395
-------------
Machinery
6,000 Kalmar Industries AB ........................................... 97,047
-------------
Telecommunications
4,950 Ericsson (L.M.) Telephone Co. AB (Series "B" Free) ............. 99,721
-------------
TOTAL SWEDEN ................................................... 856,381
-------------
SWITZERLAND (1.1%)
Conglomerates
160 BBC Brown Boveri AG ............................................ 184,006
-------------
Pharmaceuticals
15 Roche Holdings AG .............................................. 109,563
240 Sandoz AG ...................................................... 207,948
-------------
317,511
-------------
TOTAL SWITZERLAND .............................................. 501,517
-------------
UNITED KINGDOM (4.0%)
Banking
5,500 HSBC Holdings PLC .............................................. 92,961
pounds
sterling 50K Midland Bank PLC 7.65% due 05/01/25 ............................ 55,725
10,000 National Westminster Bank PLC .................................. 100,308
-------------
248,994
-------------
Building & Construction
20,000 Blue Circle Industries PLC ..................................... 104,314
15,000 Williams Holdings PLC .......................................... 77,215
-------------
181,529
-------------
Electrical Equipment
17,000 General Electric Co. PLC ....................................... 93,293
-------------
Food, Beverage, Tobacco & Household Products
6,000 Unilever PLC ................................................... 123,091
-------------
</TABLE>
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------
<C> <S> <C>
Foreign Government
pounds
sterling 40K United Kingdom Treasury Gilt 8.00% due 12/07/00 ................ $ 63,375
pounds
sterling 115K United Kingdom Treasury Gilt 7.75% due 09/08/06 ................. 176,638
-------------
240,013
-------------
Insurance
15,000 Prudential Corp. PLC ........................................... 97,738
-------------
Leisure
10,000 Granada Group PLC .............................................. 108,396
-------------
Oil Related
17,000 British Petroleum Co. PLC ...................................... 135,956
-------------
Pharmaceuticals
11,000 Glaxo Wellcome PLC ............................................. 159,812
-------------
Retail
30,000 Asda Group PLC ................................................. 47,962
9,000 Great Universal Stores PLC ..................................... 94,019
-------------
141,981
-------------
Telecommunications
28,000 British Telecommunications PLC ................................. 151,120
-------------
Utilities
7,000 Severn Trent PLC ............................................... 65,348
-------------
TOTAL UNITED KINGDOM ........................................... 1,747,271
-------------
UNITED STATES (19.0%)
Aerospace & Defense
2,800 Boeing Co. ..................................................... 217,350
7,000 General Motors Corp. (Class H) ................................. 399,000
-------------
616,350
-------------
Automotive
7,000 Ford Motor Co. ................................................. 207,375
-------------
Banking
3,200 BankAmerica Corp. .............................................. 215,600
1,900 First Interstate Bancorp ....................................... 293,075
First Nationwide Bank
$ 50K 10.00% due 10/01/06 ............................................ 60,337
11,000 Roosevelt Financial Group, Inc. ................................ 189,750
-------------
758,762
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
PORTFOLIO OF INVESTMENTS January 31, 1996, continued
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------
<C> <S> <C>
Computer Equipment Manufacturers
2,200 Cisco Systems, Inc.* ........................................... $ 182,875
4,600 Komag Inc.* .................................................... 133,975
4,200 Read Rite Corp.* ............................................... 75,600
2,900 Stratacom, Inc. ................................................ 216,775
-------------
609,225
-------------
Computer Software
1,650 Microsoft Corp.* ............................................... 152,418
-------------
Computers - Systems
1,550 International Business Machines Corp. .......................... 168,562
5,000 Sun Microsystems, Inc.* ........................................ 229,375
-------------
397,937
-------------
Drugs & Healthcare
3,000 Johnson & Johnson .............................................. 288,000
6,000 U.S. Healthcare, Inc. .......................................... 290,250
-------------
578,250
-------------
Electronics
3,000 Applied Materials, Inc.* ....................................... 111,000
2,500 General Electric Co. ........................................... 191,875
-------------
302,875
-------------
Entertainment
$ 50K Time Warner Entertainment Co. 8.375% due 07/15/33 .............. 53,006
-------------
Financial Services
3,800 Beneficial Corp. ............................................... 185,725
$ 50K PaineWebber Group, Inc. 7.625% due 02/15/14 .................... 50,497
3,700 Travelers Group, Inc. .......................................... 243,275
-------------
479,497
-------------
Food, Beverage, Tobacco & Household Products
3,800 Campbell Soup Co. .............................................. 240,825
4,600 PepsiCo Inc. ................................................... 274,275
-------------
515,100
-------------
Household Furnishings & Applicances
11,000 Maytag Corp. ................................................... 215,875
-------------
</TABLE>
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------
<C> <S> <C>
Insurance
5,500 Allstate Corp. (The) ........................................... $ 239,938
-------------
Office Equipment & Supplies
3,100 Diebold, Inc. .................................................. 173,212
-------------
Oil - International Integrated
2,800 Exxon Corp. .................................................... 224,700
2,800 Texaco, Inc. ................................................... 226,450
-------------
451,150
-------------
Restaurants
5,200 McDonald's Corp. ............................................... 261,300
-------------
Retail - Specialty
3,000 Gap, Inc. ...................................................... 141,375
13,000 Liz Claiborne, Inc. ............................................ 362,375
-------------
503,750
-------------
Steel & Iron
18,000 Bethlehem Steel Corp.* ......................................... 272,250
10,000 Inland Steel Industries, Inc. .................................. 286,250
-------------
558,500
-------------
Telecommunications
4,000 Bell Atlantic Corp. ............................................ 275,500
-------------
U.S. Government Obligations
$ 50K U.S. Treasury Bond 7.50% due 11/15/24 .......................... 59,469
$ 225K U.S. Treasury Bond 7.625% due 02/15/25 ......................... 272,461
$ 150K U.S. Treasury Note 6.625% due 03/31/97 ......................... 152,766
$ 175K U.S. Treasury Note 6.50% due 04/30/99 .......................... 182,301
$ 195K U.S. Treasury Note 6.875% due 08/31/99 ......................... 205,756
$ 75K U.S. Treasury Note 7.50% due 11/15/01 .......................... 82,981
$ 100K U.S. Treasury Note 7.50% due 02/15/05 .......................... 113,266
-------------
1,069,000
-------------
TOTAL UNITED STATES ............................................ 8,419,020
-------------
TOTAL COMMON AND PREFERRED STOCKS AND BONDS
(Identified Cost $33,438,303) .................................. 37,492,784
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
PORTFOLIO OF INVESTMENTS January 31, 1996, continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ------------------------------------------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENT (a) (14.1%)
U.S. GOVERNMENT AGENCY
Federal Home Loan Mortgage Corp. 5.80% due 02/01/96 (Amortized
$6,250 Cost $6,250,000) ............................................... $6,250,000
-----------
</TABLE>
<TABLE>
<CAPTION>
CURRENCY
AMOUNT IN
THOUSANDS VALUE
- --------------------------------------------------------------------------------------------
<C> <S> <C>
PURCHASED PUT OPTIONS ON FOREIGN CURRENCY (0.7%)
FRF 550K May 16, 1996/FRF 4.86 .......................................... 28,325
DEM 300K July 17, 1996/DEM 1.50 ......................................... 7,110
DEM 165K July 19, 1996/DEM 1.48 ......................................... 5,033
NLG 530K July 19, 1996/NLG 1.66 ......................................... 14,840
yen 10,000K July 26, 1996/yen 106.56 ....................................... 259,000
-------------
TOTAL PURCHASED PUT OPTIONS ON FOREIGN CURRENCY
(Identified Cost $281,616) ..................................... 314,308
-------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
TOTAL INVESTMENTS
(Identified Cost $39,969,919) (b) 99.5% 44,057,092
CASH AND OTHER ASSETS IN EXCESS OF
LIABILITIES ....................... 0.5 214,079
-------- ------------
NET ASSETS ........................ 100.0% $44,271,171
======== ============
<FN>
- ------------
ADR American Depository Receipt.
K In thousands.
* Non-income producing security.
** Resale is restricted to qualified institutional investors.
(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 $39,973,890;
the aggregate gross unrealized appreciation is $4,635,143 and the
aggregate gross unrealized depreciation is $551,941, resulting in
net unrealized appreciation of $4,083,202.
</TABLE>
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT JANUARY 31, 1996:
<TABLE>
<CAPTION>
CONTRACTS TO IN EXCHANGE DELIVERY UNREALIZED
RECEIVE FOR DATE APPRECIATION
- ------------------- -------------- ---------- --------------
<S> <C> <C> <C> <C>
ESP 8,327,106 $65,889 02/01/96 $541
ESP 10,531,250 $83,613 02/02/96 402
--------------
Total unrealized appreciation........... $943
==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
SUMMARY OF INVESTMENTS January 31, 1996
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- ----------------------------------------------------------
<S> <C> <C>
Aerospace & Defense ........... $ 616,350 1.4%
Automotive .................... 917,341 2.1
Banking ....................... 3,397,649 7.7
Banks ......................... 146,629 0.3
Brewery ....................... 197,387 0.4
Building & Construction ...... 1,249,076 2.8
Building Materials ............ 166,183 0.4
Business Services ............. 672,942 1.5
Chemicals ..................... 939,825 2.1
Computer Equipment
Manufacturers ................ 609,225 1.4
Computer Software ............. 152,418 0.3
Computer Systems .............. 397,937 0.9
Conglomerates ................. 2,048,548 4.6
Drugs & Healthcare ............ 578,250 1.3
Electrical Equipment .......... 93,293 0.2
Electronic & Electrical
Equipment .................... 1,583,629 3.6
Electronics ................... 302,875 0.7
Electronics -
Semiconductors/Components ... 77,320 0.2
Entertainment ................. 243,318 0.6
Financial Services ............ 1,551,400 3.5
Food, Beverage, Tobacco &
Household Products ........... 1,236,164 2.8
Foreign Currency Put Options . 314,308 0.7
Foreign Government ............ 2,940,378 6.7
Gas ........................... 380,875 0.9
Health & Personal Care ........ 284,245 0.6
Hotels/Motels ................. 136,451 0.3
Household Furnishings &
Appliances ................... 215,875 0.5
Insurance ..................... 840,904 1.9
International Trade ........... 259,016 0.6
Investment Companies .......... 113,880 0.3
Leisure ....................... 108,396 0.2
Machinery ..................... 2,113,457 4.8
Manufacturing ................. $ 319,790 0.7%
Metals & Mining ............... 60,173 0.1
Multi-Industry ................ 155,241 0.4
Office Equipment & Supplies .. 173,212 0.4
Oil & Gas ..................... 61,863 0.1
Oil - International Integrated 451,150 1.0
Oil Related ................... 353,566 0.7
Pharmaceuticals ............... 477,323 1.1
Publishing .................... 284,033 0.6
Real Estate ................... 1,854,126 4.2
Restaurants ................... 261,300 0.6
Retail ........................ 1,428,264 3.2
Retail - Specialty ............ 834,678 1.9
Steel & Iron .................. 1,318,226 3.0
Telecommunications ............ 1,810,754 4.1
Textiles ...................... 364,474 0.8
Textiles - Apparel ............ 208,933 0.5
Transportation ................ 487,975 1.1
U.S. Government & Agency
Obligations .................. 7,319,000 16.5
Utilities ..................... 562,554 1.3
Utilities - Electric .......... 384,913 0.9
------------- -----
$44,057,092 99.5%
============= =====
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
- ---------------------------- ------------- ------------
<S> <C> <C>
Common Stocks ............... $32,735,795 74.0%
Corporate Bonds ............. 219,565 0.5
Foreign Currency Put Options 314,308 0.7
Preferred Stocks ............ 528,046 1.2
Short-Term Investment ....... 6,250,000 14.1
U.S & Foreign Government
Obligations ................ 4,009,378 9.0
------------- -----
$44,057,092 99.5%
============= =====
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1996
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $39,969,919) ............. $44,057,092
Foreign cash ............................... 1,494
Receivable for:
Shares of beneficial interest sold ...... 291,056
Interest ................................. 125,683
Investments sold ......................... 50,000
Dividends ................................ 46,587
Foreign withholding taxes reclaimed ..... 20,602
Deferred organizational expenses ........... 143,949
Receivable from affiliate .................. 102,743
Prepaid expenses and other assets .......... 4,604
-------------
TOTAL ASSETS ............................. 44,843,810
-------------
LIABILITIES:
Payable for:
Investments purchased .................... 359,650
Investment management fee ................ 35,663
Plan of distribution fee ................. 33,446
Shares of beneficial interest repurchased 23,384
Accrued expenses ........................... 120,496
-------------
TOTAL LIABILITIES ........................ 572,639
-------------
NET ASSETS:
Paid-in-capital ............................ 39,666,644
Net unrealized appreciation ................ 4,084,083
Undistributed net investment income ....... 463,448
Undistributed net realized gain ............ 56,996
-------------
NET ASSETS ............................... $44,271,171
=============
NET ASSET VALUE PER SHARE,
3,756,509 shares outstanding (unlimited
shares authorized of $.01 par value) ..... $11.79
=============
</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 JANUARY 31, 1996
<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Interest (net of $2,863 foreign
withholding tax) ................................................... $ 494,013
Dividends (net of $36,914 foreign withholding tax) .................. 311,203
-----------
TOTAL INCOME ...................................................... 805,216
-----------
EXPENSES
Investment management fee ........................................... 282,848
Plan of distribution fee ............................................ 261,923
Professional fees ................................................... 91,835
Custodian fees ...................................................... 51,697
Transfer agent fees and expenses .................................... 37,878
Organizational expenses ............................................. 32,698
Shareholder reports and notices ..................................... 29,007
Registration fees ................................................... 16,572
Trustees' fees and expenses ......................................... 706
Other ............................................................... 7,545
-----------
TOTAL EXPENSES BEFORE AMOUNTS
WAIVED/REIMBURSED ................................................. 812,709
LESS: AMOUNTS WAIVED/REIMBURSED ................................... (490,213)
-----------
TOTAL EXPENSES AFTER AMOUNTS
WAIVED/REIMBURSED ................................................. 322,496
-----------
NET INVESTMENT INCOME ............................................. 482,720
-----------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain on:
Investments ....................................................... 1,174,061
Foreign exchange transactions ..................................... 806,978
-----------
TOTAL GAIN ........................................................ 1,981,039
-----------
Net unrealized appreciation on:
Investments ....................................................... 4,054,481
Translation of forward foreign exchange contracts, other assets
and liabilities denominated in foreign currencies ................ 29,602
-----------
TOTAL APPRECIATION ................................................ 4,084,083
-----------
NET GAIN .......................................................... 6,065,122
-----------
NET INCREASE ........................................................ $6,547,842
===========
</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
JANUARY 31, 1996
- -------------------------------------------------------------- ------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income ......................................... $ 482,720
Net realized gain ............................................. 1,981,039
Net unrealized appreciation ................................... 4,084,083
------------------
NET INCREASE ................................................ 6,547,842
------------------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net investment income ......................................... (1,130,515)
Net realized gain ............................................. (812,800)
------------------
TOTAL ....................................................... (1,943,315)
------------------
Net increase from transactions in shares of beneficial
interest ..................................................... 39,566,644
------------------
TOTAL INCREASE .............................................. 44,171,171
NET ASSETS:
Beginning of period ........................................... 100,000
------------------
END OF PERIOD
(Including undistributed net investment income of $463,448) $44,271,171
==================
</TABLE>
- ---------------
* Commencement of operations.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS January 31, 1996
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's investment objective is to
seek long-term total return on its investments. The Fund seeks to achieve its
objective through a managed investment policy utilizing a portfolio of U.S.
and foreign equity, debt and money market securities. 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") to effect the Fund's initial capitalization.
The Fund commenced operations on February 28, 1995.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts and disclosures. Actual results could differ
from those estimates. The following is a summary of significant accounting
policies:
A. VALUATION OF INVESTMENTS -- (1) an equity security listed or traded on the
New York, American or other domestic or foreign stock exchange is valued at
its latest sale price on that exchange prior to the time when assets are
valued; if there were no sales that day, the security is valued at the latest
bid price (in cases where securities are traded on more than one exchange;
the securities are valued on the exchange designated as the primary market by
the Trustees); (2) all other portfolio securities for which over-the-counter
market quotations are readily available are valued at the latest available
bid price prior to the time of valuation; (3) when market quotations are not
readily available, including circumstances under which it is determined by
the Investment Manager or Sub-Advisors 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 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
<PAGE>
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS January 31, 1996, continued
mark-to-market basis until sixty days prior to maturity and thereafter at
amortized cost based on their value on the 61st day. Short-term debt
securities having a maturity date of sixty days or less at the time of
purchase are valued at amortized cost.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on
the trade date (date the order to buy or sell is executed). Realized gains
and losses on security transactions are determined by the identified cost
method. Dividend income and other distributions are recorded on the
ex-dividend date except for certain dividends from foreign securities which
are recorded as soon as the Fund is informed after the ex-dividend date.
Discounts are accreted over the life of the respective securities. Interest
income is accrued daily.
C. FOREIGN CURRENCY TRANSLATION -- The books and records of the Fund are
maintained in U.S. dollars as follows: (1) the foreign currency market value
of investment securities, other assets and liabilities and forward contracts
are translated at the exchange rates prevailing at the end of the period; and
(2) purchases, sales, income and expenses are translated at the exchange
rates prevailing on the respective dates of such transactions. The resultant
exchange gains and losses are included in the Statement of Operations as
realized and unrealized gain/loss on foreign exchange transactions. Pursuant
to U.S. Federal income tax regulations, certain foreign exchange gains/losses
included in realized and unrealized gain/loss are included in or are a
reduction of ordinary income for federal income tax purposes. The Fund does
not isolate that portion of the results of operations arising as a result of
changes in the foreign exchange rates from the changes in the market prices
of the securities.
D. FORWARD FOREIGN CURRENCY CONTRACTS -- The Fund may enter into forward
foreign currency contracts which are valued daily at the appropriate exchange
rates. The resultant unrealized exchange gains and losses are included in the
Statement of Operations as unrealized foreign 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. OPTION ACCOUNTING PRINCIPLES -- When the Fund writes a call option, an
amount equal to the premium received is included in the Fund's Statement of
Assets and Liabilities as a liability which is subsequently marked-to-market
to reflect the current market value of the option written. If a written
option either expires or the Fund enters into a closing purchase transaction,
the Fund realizes a gain or loss without regard to any unrealized gain or
loss on the underlying security or currency and the liability related to
<PAGE>
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS January 31, 1996, continued
such option is extinguished. If a written call option is exercised, the Fund
realizes a gain or loss from the sale of the underlying security or currency
and the proceeds from such sale are increased by the premium originally
received.
When the Fund purchases a call or put option, the premium paid is recorded as
an investment and is subsequently marked-to-market to reflect the current
market value. If a purchased option expires, the Fund will realize a loss to
the extent of the premium paid. If the Fund enters into a closing sale
transaction, a gain or loss is realized for the difference between the
proceeds from the sale and the cost of the option. If a put option is
exercised, the cost of the security or currency sold upon exercise will be
increased by the premium originally paid. If a call option is exercised, the
cost of the security purchased upon exercise will be increased by the premium
originally paid.
F. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.
G. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends
and distributions to its shareholders on the 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.
H. ORGANIZATIONAL EXPENSES -- The Investment Manager paid the organizational
expenses of the Fund in the amount of $176,647 which has been reimbursed
exclusive of $29,699 which has been absorbed by the Investment Manager. 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 AND SUB-ADVISORY AGREEMENTS
Pursuant to an Investment Management Agreement, the Fund pays 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.
<PAGE>
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS January 31, 1996, continued
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-Advisors") and the Investment
Manager, the Sub-Advisors 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-Advisor monthly compensation equal to 30% of
its monthly compensation.
The Investment Manager had undertaken to reimburse all expenses (except for
the Plan of Distribution fee and brokerage fees) and waive the compensation
provided for in the Agreement until December 31, 1995. At January 31, 1996,
included in the statement of assets and liabilities, was a receivable from an
affiliate which represents expense reimbursements due 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 Fund's
inception (not including reinvestment of dividend or capital gain
distributions) less the average daily aggregate net asset value of the Fund's
shares redeemed since the Fund's inception upon which a contingent deferred
sales charge has been imposed or upon which such charge has been waived; or
(b) the Fund's average daily net assets. Amounts paid under the Plan are paid
to the Distributor to compensate it for the services provided and the
expenses borne by it and others in the distribution of the Fund's shares,
including the payment of commissions for sales of the Fund's shares and
incentive compensation to, and expenses of, the account executives of Dean
Witter Reynolds Inc. ("DWR"), an affiliate of the Investment 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
<PAGE>
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS January 31, 1996, continued
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 year ended January 31,
1996, it received approximately $76,000 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 year ended January 31, 1996
aggregated $51,769,177 and $19,495,251, respectively. Included in the
aforementioned are purchases and sales of U.S. Government securities of
$2,410,764 and $1,368,043, respectively.
For the year ended January 31, 1996, the Fund incurred brokerage commissions
of $7,193 and $606 with DWR and affiliates of Morgan Grenfell Investment
Services Ltd., respectively, 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 January 31, 1996, the Fund had
transfer agent fees and expenses payable of approximately $4,000.
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
FEBRUARY 28, 1995*
THROUGH
JANUARY 31, 1996
--------------------------
SHARES AMOUNT
----------- -------------
<S> <C> <C>
Sold ...................................... 4,035,815 $42,743,175
Reinvestment of dividends and distributions 64,960 741,197
----------- -------------
4,100,775 43,484,372
Repurchased ............................... (354,266) (3,917,728)
----------- -------------
Net increase .............................. 3,746,509 $39,566,644
=========== =============
</TABLE>
- ---------------
* Commencement of operations.
<PAGE>
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS January 31, 1996, continued
6. FEDERAL INCOME TAX STATUS
As of January 31, 1996, the Fund had permanent book/tax differences
attributable to foreign currency gains. To reflect reclassifications arising
from permanent book/tax differences for the period ended
January 31, 1996, undistributed net realized gain was charged and
undistributed net investment income was credited $1,111,243.
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.
At January 31, 1996, the Fund had outstanding forward contracts to facilitate
settlement of foreign currency denominated portfolio transactions.
Forward contracts involve elements of market risk in excess of the amounts
reflected in the Statement of Assets and Liabilities. The Fund bears the risk
of an unfavorable change in the foreign exchange rates underlying the forward
contracts. Risks may also arise upon entering into these contracts from the
potential inability of the counterparties to meet the terms of their
contracts.
<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
JANUARY 31, 1996
- ---------------------------------------- ------------------
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ... $ 10.00
------------------
Net investment income ................... 0.17
Net realized and unrealized gain ....... 2.20
------------------
Total from investment operations ....... 2.37
------------------
Less dividends and distributions from:
Net investment income .................. (0.34)
Net realized gain ...................... (0.24)
------------------
Total dividends and distributions ...... (0.58)
------------------
Net asset value, end of period .......... $ 11.79
==================
TOTAL INVESTMENT RETURN+ ................ 23.89%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses ................................ 1.14%(2)(3)
Net investment income ................... 1.71%(2)(3)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands $44,271
Portfolio turnover rate ................. 71%(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, the above annualized expense
and net investment loss ratios would have been 2.87% and (0.02%),
respectively.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND TRUSTEES
OF DEAN WITTER GLOBAL ASSET ALLOCATION 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 Asset Allocation Fund (the "Fund") at January 31, 1996, and the
results of its operations, the changes in its net assets and the financial
highlights for the period February 28, 1995 (commencement of operations)
through January 31, 1996, 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 audit. We conducted our audit 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 audit,
which included confirmation of securities at January 31, 1996 by
correspondence with the custodian and brokers, provides a reasonable basis
for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
March 13, 1996
- -------------------------------------------------------------------------------
1996 FEDERAL TAX NOTICE (unaudited)
During the year ended January 31, 1996, 3.83% of the income dividends
qualified for the dividends-received-deduction available to
corporations.
- -------------------------------------------------------------------------------
<PAGE>
TRUSTEES
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 A. 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
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
ANNUAL REPORT
JANUARY 31, 1996
