<PAGE> 1
DEAN WITTER BALANCED INCOME FUND Two World Trade Center, New York,
LETTER TO THE SHAREHOLDERS July 31, 1996 New York 10048
DEAR SHAREHOLDER:
During the six months ended July 31, 1996, interest rates on intermediate-term
U.S. Treasury securities rose sharply, retracing all of the decline of the
preceding six months. Early in 1996, the market's perception of the U.S. economy
had changed from weakness to strong growth. The combined effect of the
government shut-down and the severe winter weather created pent-up demand by the
consumer sector. Reinvigorated by low mortgage rates, rebate-incentives by the
auto dealers and extraordinary "sale" prices at local retailers, retail sales
and housing starts soared. This wholesale inventory liquidation, combined with
strong employment data, caused considerable consternation about a quickly
rebounding economy, and possibly an inflation surge.
PERFORMANCE AND PORTFOLIO
Against this backdrop, Dean Witter Balanced Income Fund produced a total return
of -0.81 percent for the six-month period ended July 31, 1996, compared to a
return of 1.77 percent for the Standard & Poor's 500 Composite Stock Price Index
and a return of -2.26 percent for the Lehman Brothers Government/Corporate Bond
Index. The Fund's performance during the period was influenced by an advancing
stock market and a declining bond market. This divergence was created by an
economy which was somewhat stronger than anticipated by many analysts.
On July 31, 1996, the Fund's net assets exceeded $38 million, with an asset mix
of 64 percent in fixed-income securities, 35 percent in equities and 1 percent
in cash. The Fund's fixed-income assets were invested as follows: 65 percent in
mortgage-backed securities, 21 percent in U.S. treasuries and 14 percent in U.S.
agency obligations. On July 31, 1996, the fixed-income component's average
maturity and duration were 7.8 years and 5.5 years, respectively.
During the period under review, five new common stock positions were added to
the equity portfolio: Banc One Corp., May Department Stores Co., Timken Co.,
American Brands, Inc. and General Public Utilities
<PAGE> 2
DEAN WITTER BALANCED INCOME FUND
LETTER TO THE SHAREHOLDERS July 31, 1996, continued
Corp. As of July 31, 1996, the equity segment of the portfolio contained
twenty-four (24) stocks representing twenty-one (21) different industry groups.
LOOKING AHEAD
For the balance of 1996, we expect U.S. economic growth to moderate from the
rapid pace of the second quarter. The Federal Reserve Board will want to see a
sustained confirmation of strong economic trends and rising inflation before
taking overt action to slow the economy. Inflation should remain subdued in the
months ahead, albeit at a slightly higher level than 1995. Going forward,
moderate economic activity combined with low inflation, should provide a
favorable environment for the Fund.
We appreciate your support of Dean Witter Balanced Income Fund and look forward
to continuing to serve your investment needs and objectives.
Very truly yours,
/s/ CHARLES A. FIUMEFREDDO
CHARLES A. FIUMEFREDDO
Chairman of the Board
<PAGE> 3
DEAN WITTER BALANCED INCOME FUND
PORTFOLIO OF INVESTMENTS July 31, 1996 (unaudited)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (34.3%)
Aerospace & Defense (1.5%)
12,000 Raytheon Co. ................. $ 582,000
-----------
Aluminum (1.4%)
9,600 Aluminum Co. of America....... 556,800
-----------
Automotive (1.5%)
17,400 Ford Motor Co. ............... 565,500
-----------
Banking (3.0%)
16,700 Banc One Corp. ............... 578,237
7,200 BankAmerica Corp. ............ 574,200
-----------
1,152,437
-----------
Beverages - Soft Drinks (1.4%)
16,900 PepsiCo Inc. ................. 534,463
-----------
Chemicals (1.5%)
7,200 Du Pont (E.I.) de Nemours &
Co. .......................... 581,400
-----------
Computer Equipment (1.4%)
5,400 International Business
Machines Corp. ............... 582,525
-----------
Conglomerates (1.5%)
11,500 Tenneco, Inc. ................ 566,375
-----------
Drugs & Health Care (1.4%)
6,300 Bristol-Myers Squibb Co. ..... 545,738
-----------
Electric - Major (1.4%)
7,000 General Electric Co. ......... 576,625
-----------
Foods (1.4%)
12,500 ConAgra, Inc. ................ 531,250
-----------
Machinery - Agricultural
(1.4%)
15,400 Deere & Co. .................. 550,550
-----------
Manufacturing - Diversified (1.4%)
14,900 Timken Co. ................... 545,713
-----------
Natural Gas (1.4%)
13,600 Enron Corp. .................. 535,500
-----------
Oil - Domestic (1.4%)
4,700 Atlantic Richfield Co. ....... 545,200
-----------
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------
<C> <S> <C>
Paper & Forest Products (1.4%)
12,800 Weyerhaeuser Co. ............. $ 534,400
-----------
Railroads (1.5%)
12,000 CSX Corp. .................... 579,000
-----------
Retail (2.9%)
18,300 Dayton-Hudson Corp. .......... 553,575
13,000 May Department Stores Co. .... 583,374
-----------
1,136,949
-----------
Telecommunications (1.5%)
16,000 Sprint Corp. ................. 586,000
-----------
Tobacco (1.5%)
12,600 American Brands, Inc. ........ 573,300
-----------
Utilities - Electric (2.5%)
17,200 General Public Utilities
Corp. ........................ 559,000
21,900 Pacific Gas & Electric Co. ... 432,525
-----------
991,525
-----------
TOTAL COMMON STOCKS
(Identified Cost
$12,459,598).................. 13,353,250
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ----------------------------------------------------------
<C> <S> <C>
U.S. GOVERNMENT & AGENCIES
OBLIGATIONS (62.5%)
Federal National Mortgage
Assoc.
$ 999 6.00% due 02/01/11............. 942,782
1,992 6.50% due
03/01/11 - 05/01/11............ 1,921,824
1,917 7.00% due
08/01/25 - 11/01/25............ 1,839,412
2,585 7.50% due
08/01/23 - 09/01/25............ 2,544,135
1,873 8.00% due
05/01/24 - 06/01/26............ 1,883,378
Government National Mortgage Assoc.
3,965 7.00% due
09/15/23 - 02/20/26............ 3,782,267
2,019 7.50% due
08/15/25 - 06/15/26............ 1,983,346
990 8.00% due
06/15/26 - 07/15/26............ 995,569
Resolution Funding Corp.
Coupon Strips
5,500 0.00% due
04/15/04 - 01/15/08............ 2,820,573
U.S. Treasury Bond Coupon Strip
2,500 0.00% due 11/15/04............. 1,429,152
U.S. Treasury Bond Principal
Strip
1,000 0.00% due 11/15/97............. 925,720
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 4
DEAN WITTER BALANCED INCOME FUND
PORTFOLIO OF INVESTMENTS July 31, 1996 (unaudited) continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ----------------------------------------------------------
<C> <S> <C>
U.S. Treasury Notes
$ 1,500 5.875% due 06/30/00............ $ 1,467,188
500 6.50% due 04/30/97............. 502,422
600 6.625% due 03/31/97............ 603,281
500 6.875% due 03/31/00............ 506,093
200 7.125% due 02/29/00............ 203,969
-----------
TOTAL U.S. GOVERNMENT &
AGENCIES OBLIGATIONS
(Identified Cost
$25,034,128)................... 24,351,111
-----------
SHORT-TERM INVESTMENT (0.7%)
REPURCHASE AGREEMENT
292 The Bank of New York 5.75% due
08/01/96 (dated 07/31/96;
proceeds $292,017;
collateralized by $348,174
Federal Mortgage Acceptance
Corp. 6.50% due 12/15/23 valued
at $297,809) (Identified Cost
$291,970)...................... 291,970
-----------
TOTAL INVESTMENTS
(Identified Cost $37,785,696)
(a)............................... 97.5% 37,996,331
OTHER ASSETS IN EXCESS OF
LIABILITIES....................... 2.5 977,470
----- -----------
NET ASSETS........................ 100.0% $38,973,801
===== ===========
</TABLE>
- ---------------------
(a) The aggregate cost for federal income tax purposes is $37,785,696. The
aggregate gross unrealized appreciation is $1,159,452 and the aggregate
gross unrealized depreciation is $948,817, resulting in net unrealized
appreciation of $210,635.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 5
DEAN WITTER BALANCED INCOME FUND
FINANCIAL STATEMENTS
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
July 31, 1996 (unaudited)
ASSETS:
Investments in securities, at value
(identified cost $37,785,696)............ $37,996,331
Receivable for:
Shares of beneficial interest sold..... 794,989
Interest............................... 144,747
Dividends.............................. 33,747
Investments sold....................... 21,239
Deferred organizational expenses.......... 124,340
Receivable from affiliate................. 11,014
Prepaid expenses.......................... 47,127
---------
TOTAL ASSETS........................... 39,173,534
---------
LIABILITIES:
Payable for:
Shares of beneficial interest
repurchased........................... 105,106
Plan of distribution fee............... 34,394
Investment management fee.............. 20,636
Accrued expenses.......................... 39,597
---------
TOTAL LIABILITIES...................... 199,733
---------
NET ASSETS:
Paid-in-capital........................... 37,810,229
Net unrealized appreciation............... 210,635
Accumulated undistributed net investment
income................................... 270,532
Accumulated undistributed net realized gain... 682,405
---------
NET ASSETS............................. $38,973,801
=========
NET ASSET VALUE PER SHARE,
3,520,056 shares outstanding (unlimited
shares authorized of $.01 par value)..... $11.07
=====
STATEMENT OF OPERATIONS
For the six months ended July 31, 1996 (unaudited)
NET INVESTMENT INCOME:
INCOME:
Interest.................................. $ 780,396
Dividends................................. 189,238
---------
TOTAL INCOME........................... 969,634
---------
EXPENSES:
Plan of distribution fee.................. 181,594
Investment management fee................. 108,957
Shareholder reports and notices........... 28,185
Professional fees......................... 26,301
Organizational expenses................... 16,964
Registration fees......................... 16,806
Transfer agent fees and expenses.......... 10,121
Custodian fees............................ 7,998
Trustees' fees and expenses............... 3,417
Other..................................... 2,306
---------
TOTAL EXPENSES BEFORE AMOUNTS
WAIVED/REIMBURSED...................... 402,649
LESS: AMOUNTS WAIVED/REIMBURSED........ (124,262)
---------
TOTAL EXPENSES AFTER AMOUNTS
WAIVED/REIMBURSED...................... 278,387
---------
NET INVESTMENT INCOME.................. 691,247
---------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain......................... 682,405
Net change in unrealized appreciation..... (1,637,437)
---------
NET LOSS............................... (955,032)
---------
NET DECREASE.............................. $ (263,785)
=========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 6
DEAN WITTER BALANCED INCOME FUND
FINANCIAL STATEMENTS, continued
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE
PERIOD
MARCH 28,
1995*
FOR THE SIX THROUGH
MONTHS ENDED JANUARY 31,
JULY 31, 1996 1996
------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income............................... $ 691,247 $ 710,144
Net realized gain................................... 682,405 42,559
Net change in unrealized appreciation............... (1,637,437) 1,848,072
----------- -----------
NET INCREASE (DECREASE)......................... (263,785) 2,600,775
----------- -----------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net investment income............................... (562,449) (568,410)
Net realized gain................................... (31,540) (11,019)
----------- -----------
TOTAL........................................... (593,989) (579,429)
----------- -----------
Net increase from transactions in shares of
beneficial interest................................ 8,579,231 29,130,998
----------- -----------
TOTAL INCREASE.................................. 7,721,457 31,152,344
NET ASSETS:
Beginning of period................................. 31,252,344 100,000
----------- -----------
END OF PERIOD
(Including undistributed net investment income of
$270,532 and $141,734, respectively)............ $38,973,801 $31,252,344
=========== ===========
</TABLE>
- ---------------------
* Commencement of operations.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 7
DEAN WITTER BALANCED INCOME FUND
NOTES TO FINANCIAL STATEMENTS July 31, 1996 (unaudited)
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter Balanced Income 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 provide
current income and moderate capital growth. The Fund seeks to achieve its
objective by investing in investment grade fixed income securities and, to a
lesser extent, common stock of companies which have a record of paying dividends
and, in the opinion of Dean Witter InterCapital Inc. (the "Investment Manager"),
have the potential for increasing dividends and securities convertible into
common stock. The Fund was organized as a Massachusetts business trust on
November 23, 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. to effect the Fund's initial
capitalization. The Fund commenced operations on March 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 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) options
are valued at the latest bid and asked price; (3) 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; (4) when market
quotations are not readily available, including circumstances under which it is
determined by the Investment Manager that sale or bid prices are not reflective
of a security's market value, portfolio securities are valued at their fair
value as determined in good faith under procedures established by and under the
general supervision of the Trustees (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); and (5) short-term debt
securities having a maturity date of more than sixty days at time of purchase
are valued on a mark-to-market basis until sixty days prior to maturity and
thereafter at amortized cost based on their value on the 61st day. Short-term
debt securities having a maturity date of sixty days or less at the time of
purchase are valued at amortized cost.
<PAGE> 8
DEAN WITTER BALANCED INCOME FUND
NOTES TO FINANCIAL STATEMENTS July 31, 1996 (unaudited) continued
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
Discounts are accreted over the life of the respective securities. Dividend
income and other distributions are recorded on the ex-dividend date. Interest
income is accrued daily.
C. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to its shareholders on the ex-dividend date. The amount of
dividends and distributions from net investment income and net realized capital
gains are determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for financial reporting purposes but not for tax purposes are reported as
dividends in excess of net investment income or distributions in excess of net
realized capital gains. To the extent they exceed net investment income and net
realized capital gains for tax purposes, they are reported as distributions of
paid-in-capital.
E. ORGANIZATIONAL EXPENSES -- The Investment Manager paid the organizational
expenses of the Fund in the amount of $170,199 and was reimbursed exclusive of
$34,488 which had 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 AGREEMENT
Pursuant to an Investment Management Agreement, the Fund pays the Investment
Manager a management fee, accrued daily and payable monthly, by applying the
annual rate of 0.60% 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
<PAGE> 9
DEAN WITTER BALANCED INCOME FUND
NOTES TO FINANCIAL STATEMENTS July 31, 1996 (unaudited) continued
Investment Manager also bears the cost of telephone services, heat, light, power
and other utilities provided to the Fund.
The Investment Manager has undertaken to reimburse all operating expenses
(except brokerage fees) and waive the compensation provided for in its
Investment Management Agreement until March 31, 1996. At July 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
Dean Witter Distributors Inc. (the "Distributor"), an affiliate of the
Investment Manager, is the distributor of the Fund's shares and, in accordance
with a Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act,
finances certain expenses in connection therewith.
Under the Plan, the Distributor bears the expense of all promotional and
distribution related activities on behalf of the Fund, except for expenses that
the Trustees determine to reimburse, as described below. The following
activities and services may be provided by the Distributor, Dean Witter Reynolds
Inc. ("DWR"), an affiliate of the Distributor and Investment Manager, its
affiliates and other selected broker-dealers under the Plan: (1) compensation
to, and expenses of, account executives of DWR and other selected broker-dealers
and other employees, including overhead and telephone expenses; (2) sales
incentives and bonuses to sales representatives and to marketing personnel in
connection with promoting sales of the Fund's shares; (3) expenses incurred in
connection with promoting sales of the Fund's shares; (4) preparing and
distributing sales literature; and (5) providing advertising and promotional
activities, including direct mail solicitation and television, radio, newspaper,
magazine and other media advertisements.
The Fund is authorized to reimburse the Distributor for specific expenses the
Distributor incurs or plans to incur in promoting the distribution of the Fund's
shares. The amount of each monthly reimbursement payment may in no event exceed
an amount equal to a payment at the annual rate of 1.0% of the Fund's average
daily net assets during the month. Expenses incurred by the Distributor pursuant
to the Plan in any fiscal year in excess of 1.0% will not be reimbursed by the
Fund through payments accrued in any subsequent fiscal year. For the six months
ended July 31, 1996, the distribution fee was accrued at the annual rate of
1.0%.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the six months ended July 31, 1996 aggregated
$12,756,441 and $3,922,406,
<PAGE> 10
DEAN WITTER BALANCED INCOME FUND
NOTES TO FINANCIAL STATEMENTS July 31, 1996 (unaudited) continued
respectively. Included in the aforementioned are purchases and sales of U.S.
Government securities of $7,086,146 and $484,715, respectively.
For the six months ended July 31, 1996, the Fund incurred brokerage commissions
of $6,451 with DWR for portfolio transactions executed on behalf of the Fund. At
July 31, 1996, the Fund's receivable for investments sold included unsettled
trades with DWR of $21,239.
Dean Witter Trust Company, an affiliate of the Manager and Distributor, is the
Fund's transfer agent. At July 31, 1996, the Fund had transfer agent fees and
expenses payable of approximately $13,500.
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE SIX FOR THE PERIOD
MONTHS ENDED MARCH 28, 1995*
JULY 31, 1996 THROUGH
--------------------------- JANUARY 31, 1996
(unaudited) -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ --------- -----------
<S> <C> <C> <C> <C>
Sold............................................................ 1,740,953 $ 19,580,599 3,181,539 $33,881,688
Reinvestment of dividends and distributions..................... 40,295 450,839 42,146 454,527
-------- ---------- ------- ---------
1,781,248 20,031,438 3,223,685 34,336,215
Repurchased..................................................... (1,017,772) (11,452,207) (477,105) (5,205,217)
-------- ---------- ------- ---------
Net increase.................................................... 763,476 $ 8,579,231 2,746,580 $29,130,998
======== ========== ======= =========
</TABLE>
- ---------------------
* Commencement of operations.
<PAGE> 11
DEAN WITTER BALANCED INCOME FUND
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX MARCH 28, 1995*
MONTHS ENDED THROUGH
JULY 31, JANUARY 31,
1996 1996
---------------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period..................................................... $11.34 $10.00
------- ---------
Net investment income.................................................................... 0.20 0.38
Net realized and unrealized gain......................................................... (0.29) 1.30
------- ---------
Total from investment operations......................................................... (0.09) 1.68
------- ---------
Less dividends and distributions from:
Net investment income................................................................. (0.17) (0.33)
Net realized gain..................................................................... (0.01) (0.01)
------- ---------
Total dividends and distributions........................................................ (0.18) (0.34)
------- ---------
Net asset value, end of period........................................................... $11.07 $11.34
======= =========
TOTAL INVESTMENT RETURN+................................................................. (0.81)%(1) 16.93%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses................................................................................. 1.53%(2) --%(2)(3)
Net investment income.................................................................... 3.81%(2) 5.27%(2)(3)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands.................................................. $38,974 $31,252
Portfolio turnover rate.................................................................. 11%(1) 3%(1)
Average commission rate paid............................................................. $0.0512 --
</TABLE>
- ---------------------
* Commencement of operations.
+ Calculated based on the net asset value as of the last business day of the
period.
(1) Not annualized.
(2) Annualized.
(3) If the Investment Manager had not reimbursed all expenses and waived the
management fee, the above annualized expense and net investment income
ratios would have been 2.69% and 2.58%, respectively.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 12
BOARD OF DIRECTORS
Michael Bozic
Charles A. Fiumfreddo
Edwin J. Garn
John R. Haire
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Sheldon Cutis
Vice President, Secretary and General Counsel
Paul D. Vance
Vice President
Rajesh Gupta
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
directors, 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
BALANCED
INCOME FUND
[GRAPHIC]
SEMIANNUAL REPORT
JULY 31, 1996
