<PAGE>
DEAN WITTER LIQUID ASSET FUND INC. TWO WORLD TRADE CENTER, NEW YORK, NEW YORK
10048
LETTER TO THE SHAREHOLDERS FEBRUARY 28, 1998
DEAR SHAREHOLDER:
We are pleased to present the semiannual letter to shareholders of Dean Witter
Liquid Asset Fund for the six-month period ended February 28, 1998.
As of the close of the period under review, the Fund had net assets totaling
$13.7 billion. For the six-month period under review, the Fund's annualized net
investment income was 5.17 percent. The Fund's 30-day annualized yield for
February was 5.22 percent.
A STABLE INTEREST-RATE ENVIRONMENT
After rising by about 25 basis points late in the first quarter of 1997,
money-market yields held remarkably stable during the remainder of 1997 and
through the first two months of 1998. The target rate for federal funds has
remained steady at 5.50 percent from March 25, 1997, through February 28, 1998.
Overall economic conditions in the United States continue to be very good, while
inflation has remained quite moderate. Unemployment rates remain close to the
lows of the past 25 years.
Aided by favorable demographic trends, cash flows into financial assets were
robust in 1997 and early 1998. Money-market mutual funds are no exception, as
total assets in all such portfolios surpassed $1 trillion for the first time
early in August 1997.
PORTFOLIO COMPOSITION AND STRUCTURE
On February 28, 1998, approximately 81 percent of the Fund's portfolio was
invested in high-quality commercial paper, 7 percent in certificates of deposit
and bankers' acceptances of financially strong commercial banks, 6 percent in
the bank notes of such institutions and 6 percent in federal agency and U.S.
Treasury obligations. At the end of February, approximately 89 percent of the
Fund's holdings were due to mature in less than four months. Therefore, we
believe the Fund is well positioned for stability of principal with a high
degree of liquidity.
<PAGE>
DEAN WITTER LIQUID ASSET FUND INC.
LETTER TO THE SHAREHOLDERS FEBRUARY 28, 1998, CONTINUED
We continue to operate the Fund in a straightforward, conservative style without
structured notes or derivatives that could fluctuate excessively with changing
interest rates. In addition, the Fund has avoided making any direct investments
in Asian financial institutions, because of their relatively slim levels of
capital strength. As a result the Fund's exposure to credit-rating downgrades,
which some other money market funds have experienced recently, has been limited.
LOOKING AHEAD
At this time we anticipate a slight moderation in the pace of economic activity
during 1998, with no major adverse surprises in the rate of inflation. We do not
expect investment yields available to the Fund during the months immediately
ahead to differ dramatically from those available during the fiscal period just
ended.
As always, the Fund serves as a useful investment for liquidity, preservation of
capital and a yield that reflects prevailing money market conditions.
We appreciate your ongoing support of Dean Witter Liquid Asset 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>
DEAN WITTER LIQUID ASSET FUND INC.
PORTFOLIO OF INVESTMENTS FEBRUARY 28, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
PRINCIPAL YIELD ON
AMOUNT IN DATE OF MATURITY
THOUSANDS PURCHASE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
COMMERCIAL PAPER (81.2%)
AUTOMOTIVE - FINANCE (11.2%)
$495,000 Chrysler Financial Corp................................ 5.52-5.86% 03/25/98-06/15/98 $ 491,307,938
410,000 Ford Motor Credit Co................................... 5.53-5.81 03/09/98-05/04/98 407,593,736
649,000 General Motors Acceptance Corp......................... 5.51-5.85 03/06/98-08/31/98 640,388,153
---------------
1,539,289,827
---------------
BANK HOLDING COMPANIES (13.6%)
100,000 Bank of New York Co., Inc.............................. 5.56 04/13/98 99,330,222
100,000 BankAmerica Corp....................................... 5.51 06/30/98 98,173,389
585,000 Bankers Trust New York Corp............................ 5.52-5.88 04/29/98-07/08/98 575,935,482
670,000 Morgan (J.P.) & Co., Inc............................... 5.50-5.81 04/06/98-07/16/98 663,527,061
90,000 NationsBank Corp....................................... 5.54 08/28/98 87,561,025
230,000 PNC Funding Corp....................................... 5.56-5.85 04/06/98-04/22/98 228,534,620
110,000 SunTrust Banks, Inc.................................... 5.71-5.81 03/09/98-04/14/98 109,445,250
---------------
1,862,507,049
---------------
BANKS - COMMERCIAL (31.0%)
300,000 Abbey National North America Corp...................... 5.53-5.76 05/04/98-08/24/98 294,014,000
200,000 ABN-AMRO North America Finance Inc..................... 5.51-5.78 03/26/98-07/09/98 198,402,903
710,000 Barclays U.S. Funding Corp............................. 5.52-5.81 03/10/98-05/08/98 704,500,583
535,000 Canadian Imperial Holdings Inc......................... 5.52-5.81 03/09/98-05/06/98 531,555,836
405,000 Deutsche Bank Financial Inc............................ 5.49-5.79 03/05/98-04/28/98 403,617,006
200,000 Dresdner U.S. Finance Inc.............................. 5.70-5.81 03/12/98-04/13/98 199,118,222
395,000 Internationale Nederlanden (U.S.) Funding Corp......... 5.59-5.82 04/15/98-07/10/98 390,505,676
330,000 National Australia Funding (DE) Inc.................... 5.48-5.77 03/11/98-04/28/98 328,252,044
520,000 Societe Generale N.A., Inc............................. 5.53-5.82 03/16/98-06/01/98 517,225,739
340,000 Toronto-Dominion Holdings U.S.A. Inc................... 5.53-5.83 04/14/98-06/17/98 336,225,322
100,000 UnionBanCal Commercial Funding Corp.................... 5.56 05/11/98 98,904,000
240,000 Westpac Capital Corp................................... 5.75-5.79 03/25/98-04/20/98 238,848,459
---------------
4,241,169,790
---------------
BROKERAGE (0.8%)
110,000 Goldman Sachs Group L.P................................ 5.51-5.53 04/27/98-04/29/98 109,024,283
---------------
FINANCE - COMMERCIAL (1.7%)
240,000 CIT Group Holdings, Inc................................ 5.52-5.64 03/27/98-05/11/98 238,404,842
---------------
FINANCE - CONSUMER (8.0%)
190,000 American Express Credit Corp........................... 5.51-5.52 03/30/98-04/03/98 189,041,000
40,000 American General Finance Corp.......................... 5.49 04/27/98 39,651,356
234,000 Avco Financial Services Inc............................ 5.52-5.82 03/18/98-06/17/98 231,710,410
390,000 Beneficial Corp........................................ 5.51-5.81 03/20/98-05/20/98 386,158,858
105,000 Commercial Credit Co................................... 5.50-5.52 04/20/98-04/22/98 104,171,439
90,000 Household Finance Corp................................. 5.52 03/06/98 89,917,650
60,000 Norwest Financial Inc.................................. 5.58 03/27/98 59,750,250
---------------
1,100,400,963
---------------
FINANCE - CORPORATE (3.6%)
500,000 Ciesco, L.P............................................ 5.50-5.79 03/13/98-05/07/98 497,475,119
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER LIQUID ASSET FUND INC.
PORTFOLIO OF INVESTMENTS FEBRUARY 28, 1998 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
ANNUALIZED
PRINCIPAL YIELD ON
AMOUNT IN DATE OF MATURITY
THOUSANDS PURCHASE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
FINANCE - DIVERSIFIED (6.5%)
$240,000 Associates Corp. of North America...................... 5.53-5.81% 03/17/98-05/27/98 $ 237,297,565
662,000 General Electric Capital Corp.......................... 5.48-5.84 03/02/98-09/08/98 654,184,256
---------------
891,481,821
---------------
FOODS & BEVERAGES (0.5%)
25,000 Coca-Cola Co........................................... 5.48 04/14/98 24,831,250
50,000 Sara Lee Corp.......................................... 5.59 03/06/98 49,953,500
---------------
74,784,750
---------------
HOUSEHOLD PRODUCTS (0.4%)
50,000 Procter & Gamble Co.................................... 5.70 04/17/98 49,629,333
---------------
INSURANCE (0.8%)
35,000 American General Corp.................................. 5.49 04/24/98 34,710,715
75,000 MetLife Funding Inc.................................... 5.76-5.81 03/04/98-03/05/98 74,946,736
---------------
109,657,451
---------------
INDUSTRIALS (0.2%)
27,000 Emerson Electric Co.................................... 5.62 03/02/98 26,991,570
---------------
OFFICE EQUIPMENT (1.5%)
200,000 IBM Credit Corp........................................ 5.50-5.69 03/06/98-03/11/98 199,739,861
---------------
RETAIL (1.4%)
190,000 Sears Roebuck Acceptance Corp.......................... 5.53-5.83 03/09/98-03/23/98 189,444,269
---------------
TOTAL COMMERCIAL PAPER
(AMORTIZED COST $11,130,000,928)...................................................... 11,130,000,928
---------------
SHORT-TERM BANK NOTES (6.5%)
250,000 F.C.C. National Bank................................... 5.77-5.81 03/24/98-04/14/98 250,000,000
100,000 BankBoston, N.A........................................ 5.82 05/29/98 100,000,000
45,000 La Salle National Bank................................. 5.72 04/20/98 45,000,000
150,000 Wachovia Bank, N.A..................................... 5.51 04/22/98 150,000,000
350,000 NationsBank, N.A....................................... 5.58-5.62 03/04/98-04/23/98 350,000,000
---------------
TOTAL SHORT-TERM BANK NOTES
(AMORTIZED COST $895,000,000)......................................................... 895,000,000
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER LIQUID ASSET FUND INC.
PORTFOLIO OF INVESTMENTS FEBRUARY 28, 1998 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
ANNUALIZED
PRINCIPAL YIELD ON
AMOUNT IN DATE OF MATURITY
THOUSANDS PURCHASE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT & AGENCY OBLIGATIONS (6.4%)
$302,000 Federal Farm Credit Bank............................... 5.60-5.76% 06/30/98-12/18/98 $ 291,915,748
160,000 Federal Home Loan Banks................................ 5.66-5.75 06/19/98-12/04/98 155,236,271
40,000 Federal Home Loan Mortgage Corp........................ 5.74 10/30/98 38,527,867
255,000 Federal National Mortgage Assoc........................ 5.64-5.75 03/30/98-09/02/98 250,638,650
145,000 U.S. Treasury Bills.................................... 5.87-5.96 04/02/98-05/28/98 143,608,954
---------------
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(AMORTIZED COST $879,927,490)......................................................... 879,927,490
---------------
CERTIFICATES OF DEPOSIT (5.9%)
70,000 Chase Manhattan Bank (USA)............................. 5.75 03/02/98 70,000,000
100,000 First Tennessee Bank N.A............................... 5.50 04/30/98 100,000,000
100,000 Fleet National Bank.................................... 5.53 05/14/98 100,000,000
200,000 Mellon Bank, N.A....................................... 5.69-5.76 03/31/98-04/01/98 200,000,000
345,000 Union Bank of California, N.A.......................... 5.56-5.82 04/07/98-05/21/98 345,000,000
---------------
TOTAL CERTIFICATES OF DEPOSIT
(AMORTIZED COST $815,000,000)......................................................... 815,000,000
---------------
BANKERS' ACCEPTANCES (0.8%)
50,000 Bank of America NT & SA................................ 5.70 04/21/98 49,599,167
25,000 SunTrust Bank, Atlanta................................. 5.57 03/09/98 24,965,500
30,000 Wachovia Bank, N.A..................................... 5.83 07/24/98 29,329,616
---------------
TOTAL BANKERS' ACCEPTANCES
(AMORTIZED COST $103,894,283)......................................................... 103,894,283
---------------
REPURCHASE AGREEMENT (0.1%)
12,596 The Bank of New York (dated 02/27/98; proceeds
$12,601,622) (a) (IDENTIFIED COST $12,595,915)....... 5.44 03/02/98 12,595,915
---------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(AMORTIZED COST $13,836,418,616) (b)................................................... 100.9 % 13,836,418,616
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS......................................... (0.9) (128,166,985)
------ ----------------
NET ASSETS............................................................................. 100.0 % $ 13,708,251,631
------ ----------------
------ ----------------
</TABLE>
- ---------------------
(a) Collateralized by $8,720,550 Federal Farm Credit Bank 0.00% due 02/01/01
valued at $8,720,550 and by $4,097,804 U.S. Treasury Bill 5.875% due
01/31/99 valued at $4,127,283.
(b) Cost is the same for federal income tax purposes.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER LIQUID ASSET FUND INC.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 1998 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(amortized cost $13,836,418,616)......................................................... $13,836,418,616
Cash....................................................................................... 90,001
Receivable for:
Interest............................................................................... 19,530,475
Capital stock sold..................................................................... 133,622
Prepaid expenses and other assets.......................................................... 899,215
---------------
TOTAL ASSETS.......................................................................... 13,857,071,929
---------------
LIABILITIES:
Payable for:
Capital stock repurchased.............................................................. 144,405,950
Investment management fee.............................................................. 2,894,783
Plan of distribution fee............................................................... 1,067,776
Accrued expenses and other payables........................................................ 451,789
---------------
TOTAL LIABILITIES..................................................................... 148,820,298
---------------
NET ASSETS............................................................................ $13,708,251,631
---------------
---------------
COMPOSITION OF NET ASSETS:
Paid-in-capital............................................................................ $13,707,561,843
Accumulated undistributed net investment income............................................ 689,788
---------------
NET ASSETS............................................................................ $13,708,251,631
---------------
---------------
NET ASSET VALUE PER SHARE,
13,708,233,037 SHARES OUTSTANDING (25,000,000,000 SHARES AUTHORIZED OF $.01 PAR VALUE)... $1.00
---------------
---------------
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 1998 (UNAUDITED)
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME............................................................................... $385,570,361
------------
EXPENSES
Investment management fee..................................................................... 18,169,662
Transfer agent fees and expenses.............................................................. 14,937,187
Plan of distribution fee...................................................................... 6,222,267
Registration fees............................................................................. 502,643
Shareholder reports and notices............................................................... 327,424
Custodian fees................................................................................ 180,539
Professional fees............................................................................. 37,866
Directors' fees and expenses.................................................................. 9,643
Other......................................................................................... 49,752
------------
TOTAL EXPENSES........................................................................... 40,436,983
------------
NET INVESTMENT INCOME AND NET INCREASE........................................................ $345,133,378
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER LIQUID ASSET FUND INC.
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
FEBRUARY 28, 1998 AUGUST 31, 1997
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------
<CAPTION>
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income and net increase.................................. $ 345,133,378 $ 614,489,801
Dividends from net investment income.................................... (345,128,937) (614,493,201)
Net increase from capital stock transactions............................ 542,337,025 1,776,444,915
----------------- ---------------
NET INCREASE....................................................... 542,341,466 1,776,441,515
NET ASSETS:
Beginning of period..................................................... 13,165,910,165 11,389,468,650
----------------- ---------------
END OF PERIOD
(INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $689,788 AND
$685,347, RESPECTIVELY)............................................. $ 13,708,251,631 $13,165,910,165
----------------- ---------------
----------------- ---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER LIQUID ASSET FUND INC.
NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 1998 (UNAUDITED)
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter Liquid Asset Fund Inc. (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 objectives are
high current income, preservation of capital and liquidity. The Fund was
incorporated in Maryland on September 3, 1974 and commenced operations on
September 22, 1975.
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 -- Portfolio securities are valued at amortized
cost, which approximates market value.
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 and premiums are amortized over the life of the
respective securities. Interest income is accrued daily.
C. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends
and distributions as of the close of each business day.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement with Dean Witter InterCapital
Inc. (the "Investment Manager"), the Fund pays the Investment Manager a
management fee, accrued daily and payable monthly, by applying the following
annual rates to the net assets of the Fund determined as of the close of each
business day: 0.50% to the portion of the daily net assets not exceeding $500
million; 0.425% to the portion of the daily net assets exceeding $500 million
but not exceeding $750 million; 0.375% to the portion of the daily net assets
exceeding $750 million but not exceeding $1 billion; 0.35% to the portion of the
daily net assets exceeding $1 billion but not exceeding $1.35 billion; 0.325% to
the portion of the daily net assets exceeding $1.35 billion but not exceeding
<PAGE>
DEAN WITTER LIQUID ASSET FUND INC.
NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 1998 (UNAUDITED) CONTINUED
$1.75 billion; 0.30% to the portion of the daily net assets exceeding $1.75
billion but not exceeding $2.15 billion; 0.275% to the portion of the daily net
assets exceeding $2.15 billion but not exceeding $2.5 billion; 0.25% to the
portion of the daily net assets exceeding $2.5 billion but not exceeding $15
billion; 0.249% to the portion of the daily net assets exceeding $15 billion but
not exceeding $17.5 billion; and 0.248% to the portion of the daily net assets
exceeding $17.5 billion.
Under the terms of the Agreement, the Investment Manager maintains certain of
the Fund's books and records and furnishes, at its own expense, office space,
facilities, equipment, clerical, bookkeeping and certain legal services and pays
the salaries of all personnel, including officers of the Fund who are employees
of the Investment Manager. The Investment Manager also bears the cost of
telephone services, heat, light, power and other utilities provided to the Fund.
3. PLAN OF DISTRIBUTION
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 Directors 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 Investment Manager and Distributor, its
affiliates and other selected broker-dealers under the Plan: (1) compensation
to, and expenses of, DWR's and other selected broker-dealers' account executives
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) preparation, printing
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 0.15% of the Fund's average
daily net assets during the month. Expenses incurred by the Distributor pursuant
to the Plan in any fiscal year will not be reimbursed by the Fund through
payments accrued in any subsequent fiscal year. For the six months ended
February 28, 1998, the distribution fee was accrued at the annual rate of 0.09%.
<PAGE>
DEAN WITTER LIQUID ASSET FUND INC.
NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 1998 (UNAUDITED) CONTINUED
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales/maturities of portfolio securities
for the six months ended February 28, 1998 aggregated $23,721,389,575 and
$23,477,540,496, respectively.
Dean Witter Trust FSB, an affiliate of the Investment Manager and Distributor,
is the Fund's transfer agent.
The Fund has an unfunded noncontributory defined benefit pension plan covering
all independent Directors of the Fund who will have served as independent
Directors for at least five years at the time of retirement. Benefits under this
plan are based on years of service and compensation during the last five years
of service. Aggregate pension costs for the six months ended February 28, 1998
included in Directors' fees and expenses in the Statement of Operations amounted
to $1,833. At February 28, 1998, the Fund had an accrued pension liability of
$48,531 which is included in accrued expenses in the Statement of Assets and
Liabilities.
5. CAPITAL STOCK
Transactions in capital stock, at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
FEBRUARY 28, 1998 AUGUST 31, 1997
------------------- ----------------
(UNAUDITED)
<S> <C> <C>
Shares sold...................................................... 19,901,696,910 35,926,788,140
Shares issued in reinvestment of dividends....................... 344,280,116 612,893,395
------------------- ----------------
20,245,977,026 36,539,681,535
Shares repurchased............................................... (19,703,640,001) (34,763,236,620)
------------------- ----------------
Net increase..................................................... 542,337,025 1,776,444,915
------------------- ----------------
------------------- ----------------
</TABLE>
<PAGE>
DEAN WITTER LIQUID ASSET FUND INC.
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of capital stock outstanding
throughout each period:
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED
FEBRUARY FOR THE YEAR ENDED AUGUST 31,
28, 1998 -----------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period............................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- --------- --------- --------- --------- ---------
Net investment income.............. 0.026 0.050 0.050 0.053 0.030 0.027
Less dividends from net investment
income............................ (0.026) (0.050) (0.050) (0.053) (0.030) (0.027)
---------- --------- --------- --------- --------- ---------
Net asset value, end of period..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- --------- --------- --------- --------- ---------
---------- --------- --------- --------- --------- ---------
TOTAL INVESTMENT RETURN+........... 2.61%(1) 5.13% 5.15% 5.41% 3.07% 2.72%
RATIOS TO AVERAGE NET ASSETS:
Expenses........................... 0.61%(2) 0.62% 0.63% 0.65% 0.70% 0.69%
Net investment income.............. 5.17%(2) 5.01% 5.02% 5.28% 3.02% 2.67%
SUPPLEMENTAL DATA:
Net assets, end of period, in
millions.......................... $13,708 $13,166 $11,389 $10,359 $8,492 $7,959
</TABLE>
- ---------------------
+ Calculated based on the net asset value as of the last business day of the
period.
(1) Not annualized.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
BOARD OF DIRECTORS
- ---------------------------------------------
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Wayne E. Hedien
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
- ---------------------------------------------
Charles A. Fiumefreddo
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Barry Fink
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
Jonathan R. Page
VICE PRESIDENT
Thomas F. Caloia
TREASURER
TRANSFER AGENT
- ---------------------------------------------
Dean Witter Trust FSB
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
LIQUID ASSET FUND
[GRAPHIC]
SEMIANNUAL REPORT
FEBRUARY 28, 1998
