<PAGE>
DEAN WITTER INFORMATION FUND Two World Trade Center, New York, New York 10048
LETTER TO THE SHAREHOLDERS September 30, 1996
DEAR SHAREHOLDER:
Dean Witter Information Fund targets companies that the Fund's portfolio
management team believes are best positioned to capitalize on the growth
potential of the various sectors that comprise the communications and
information industries. The companies whose stocks the Fund holds possess a
combination of attributes, including an established market presence,
leading-edge technology, proven management and strategic relationships and
alliances.
The Fund commenced operations on November 28, 1995 with nearly $105 million
in net assets. As of September 30, 1996, net assets had grown to nearly $305
million.
PERFORMANCE REVIEW
For the six-month period ended September 30, 1996, the Fund provided a total
return of 2.53 percent. This period was characterized by a strong equity
market until mid June. Over the ensuing six weeks the stock market suffered a
sharp decline, with the Fund following suit. The next two months, through the
end of September, saw both the market and the Fund turn in better
performance. The Fund's net asset value on September 30, 1996 was $10.94, up
from $10.67 on March 31, 1996.
POSITIONING THE FUND'S PORTFOLIO
As of September 30, 1996, the Fund's net assets were allocated to the
following four industry groups approximately as follows: media/entertainment
(35 percent of net assets), operating telecommunications (22 percent),
electronics (19 percent) and telecommunications equipment (19 percent). In
addition, the Fund had a well-diversified commitment of approximately 10
percent of net assets devoted to foreign securities and American Depository
Receipts. Approximately 5 percent of net assets were held in cash.
<PAGE>
DEAN WITTER INFORMATION FUND
LETTER TO THE SHAREHOLDERS September 30, 1996, continued
The Fund has also maintained above-average weightings in the
media/entertainment sector on the basis of the beneficial impact on
broadcasting companies expected by the passage of the Telecommunications
Bill. Attractive valuations and strong, improving fundamentals during the
second calendar quarter prompted the portfolio management team to increase
exposure to technology. Finally, the Fund's operating telecommunications
investments brought mixed results as the promise of deregulation heightened
competition-related fears for many of the companies in that sector. By
contrast, many smaller long-distance operators and competitive local access
providers had favorable performance.
GOING FORWARD
The fundamentals underpinning the sectors in which the Fund invests remain
quite robust. Within the portfolio's technology component, the advent of
cable modems and interactive television, as well as infrastructure spending
by telephone companies, is expected to spur capital spending, which would
benefit the telecommunications equipment industry. The electronics sector is
also poised to exhibit attractive long-term performance, as technology
continues to gain in importance as a component of U.S. gross national
product. For the telecommunications operating companies, ongoing joint
ventures, mergers and alliances worldwide are expected to keep investors
focused on those industries. Continued consolidation within the broadcast
industry and an industry-wide desire to own "content" is expected to enable
the media and entertainment industries to continue to provide above-average
performance.
We appreciate your support of Dean Witter Information 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 INFORMATION FUND
PORTFOLIO OF INVESTMENTS September 30, 1996 (unaudited)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (95.0%)
Advertising (4.4%)
100,000 Eagle River Interactive, Inc.* ................................. $ 1,025,000
90,000 Getty Communication PLC (ADR)* (United Kingdom) ................ 1,215,000
137,000 Heritage Media Corp. (Class A)* ................................ 2,585,875
55,000 Interpublic Group of Companies, Inc. ........................... 2,598,750
4,500 Lamar Advertising Co.* ......................................... 183,375
57,000 Omnicom Group, Inc. ............................................ 2,664,750
22,800 Outdoor Systems, Inc.* ......................................... 1,060,200
58,500 Universal Outdoor Holdings, Inc.* .............................. 2,091,375
--------------
13,424,325
--------------
Aerospace (0.7%)
129,500 Orbital Sciences Corp.* ........................................ 2,298,625
--------------
Broadcast Media (9.8%)
86,000 American Radio Systems Corp.* .................................. 3,160,500
103,000 Argyle Television, Inc. (Class A)* ............................. 2,884,000
69,000 Chancellor Broadcasting Co. (Class A)* ......................... 2,863,500
60,000 Cinar Films, Inc. (Class B)* (Canada) .......................... 1,545,000
25,000 Cox Radio, Inc.* ............................................... 550,000
35,200 Film Roman, Inc.* .............................................. 352,000
57,000 Heftel Broadcasting Corp. (Class A)* ........................... 2,458,125
100,000 Jacor Communications, Inc.* .................................... 3,400,000
78,000 Lin Television Corp.* .......................................... 3,198,000
90,000 Mecklermedia Corp.* ............................................ 1,620,000
15,000 Renaissance Communications Corp.* .............................. 528,750
53,500 SFX Broadcasting, Inc. (Class A)* .............................. 2,420,875
55,000 Sinclair Broadcast Group, Inc. (Class A)* ...................... 2,193,125
55,000 Telemundo Group, Inc. (Class A)* ............................... 1,883,750
22,600 Univision Communications, Inc.* ................................ 757,100
--------------
29,814,725
--------------
Broadcasting (6.7%)
38,000 Clear Channel Communications, Inc.* ............................ 3,363,000
75,000 Emmis Broadcasting Corp. (Class A)* ............................ 3,450,000
99,000 Evergreen Media Corp. (Class A)* ............................... 3,093,750
145,000 National Media Corp.* .......................................... 2,156,875
105,000 PanAmSat Corp.* ................................................ 2,887,500
125,000 Westwood One, Inc.* ............................................ $ 2,265,625
95,600 Young Broadcasting Corp. (Class A)* ............................ 3,130,900
--------------
20,347,650
--------------
Business Services (3.7%)
61,200 CCC Information Services, Inc.* ................................ 1,269,900
72,000 CFI Proservices, Inc.* ......................................... 1,368,000
120,000 Checkfree Corp.* ............................................... 2,400,000
38,200 CSG Systems International, Inc.* ............................... 744,900
46,000 Gartner Group, Inc. (Class A)* ................................. 1,541,000
31,300 Restrac, Inc.* ................................................. 586,875
17,000 RMH Teleservices, Inc.* ........................................ 250,750
68,000 Sitel Corp.* ................................................... 3,026,000
--------------
11,187,425
--------------
Cable Television Equipment (3.5%)
108,000 Comcast Corp. (Class A Special) ................................ 1,660,500
92,000 Cox Communications, Inc. (Class A)* ............................ 1,690,500
200,000 Lodgenet Entertainment Corp.* .................................. 2,350,000
110,000 Tele-Communications, Inc. (Class A)* ........................... 1,636,250
330,000 Telewest PLC* (United Kingdom) ................................. 619,661
85,000 U.S. West Media Group* ......................................... 1,434,375
60,000 United Video Satellite Group, Inc. (Class A)* .................. 1,185,000
--------------
10,576,286
--------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Commercial Services (1.5%)
75,000 Bell & Howell Co.* ............................................. 2,381,250
2,200 International Network Services* ................................ 77,275
112,000 Metromedia International Group, Inc.* .......................... 1,190,000
11,200 National Processing, Inc.* ..................................... 218,400
1,900 NOVA Corp.* .................................................... 62,700
20,000 Precision Response Corp.* ...................................... 755,000
--------------
4,684,625
--------------
Communications -Equipment & Software (2.0%)
120,200 Cellular Technical Services Co.* ............................... 2,373,950
47,000 Proxim, Inc. ................................................... 1,327,750
42,250 Raptor Systems, Inc.* .......................................... 718,250
30,000 Shiva Corp.* ................................................... 1,717,500
--------------
6,137,450
--------------
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
<CAPTION>
DEAN WITTER INFORMATION FUND
PORTFOLIO OF INVESTMETNS September 30, 1996 (unaudited) continued
NUMBER OF
SHARES VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Communications - Equipment/Manufacturers (0.4%)
90,000 TCSI Corp.* .................................................... $ 1,192,500
--------------
Computer - Aided Design (0.5%)
30,000 Synopsys, Inc.* ................................................ 1,380,000
--------------
Computer Software (3.2%)
26,000 Check Point Software Technologies Ltd.* (Israel) ............... 877,500
8,000 Dell Computer Corp.* ........................................... 621,000
62,600 Edify Corp.* ................................................... 1,220,700
80,000 Geoworks* ...................................................... 2,070,000
90,000 MetaTools, Inc.* ............................................... 1,890,000
25,000 Security Dynamics Technologies, Inc.* .......................... 1,790,625
125,000 Visigenic Software, Inc.* ...................................... 1,406,250
--------------
9,876,075
--------------
Computer Software & Services (2.9%)
55,000 Black Box Corp.* ............................................... 1,815,000
100,000 Caere Corp.* ................................................... 900,000
80,000 Document Sciences Corp.* ....................................... 1,010,000
25,000 ISG International Software Group Ltd.* (Israel) ................ 425,000
100,000 Olicom A/S* (Denmark) .......................................... 1,475,000
80,000 Saville Systems Ireland PLC (ADR)* (Ireland) ................... 2,820,000
5,100 Technology Modeling Associates, Inc.* .......................... 66,300
19,700 Versant Object Technology Corp.* ............................... 462,950
--------------
8,974,250
--------------
Computers (1.5%)
55,000 Verifone, Inc.* ................................................ 2,461,250
60,000 VideoServer, Inc.* ............................................. 2,062,500
--------------
4,523,750
--------------
Conglomerates (1.2%)
27,000 ITT Corp.* ..................................................... 1,177,875
142,000 Westinghouse Electric Corp. .................................... 2,644,750
--------------
3,822,625
--------------
Consumer Services (2.3%)
80,800 CUC International, Inc.* ....................................... 3,221,900
83,000 Primark Corp.* ................................................. 2,272,125
85,000 Spyglass, Inc.* ................................................ 1,593,750
--------------
7,087,775
--------------
Electronic Components (1.3%)
45,500 DSP Communications, Inc.* ...................................... $ 2,536,625
60,000 Micrel, Inc.* .................................................. 1,425,000
--------------
3,961,625
--------------
Electronics (2.4%)
55,000 Gemstar International Group Ltd.* .............................. 1,622,500
2,900 Orckit Communications Ltd.* (Israel) ........................... 53,287
101,000 Ortel Corp.* ................................................... 2,373,500
200,000 TranSwitch Corp.* .............................................. 1,250,000
80,000 Trimble Navigation Ltd.* ....................................... 1,310,000
26,000 Ultrak, Inc.* .................................................. 711,750
--------------
7,321,037
--------------
Entertainment/Gaming (6.7%)
108,000 AMC Entertainment, Inc. ........................................ 1,687,500
97,500 Carlton Communications PLC (United Kingdom) .................... 738,429
60,000 Circus Circus Enterprises, Inc.* ............................... 2,122,500
35,000 Electronic Arts, Inc.* ......................................... 1,303,750
96,000 Gaylord Entertainment Co. (Class A) ............................ 2,172,000
50,000 Grand Casinos, Inc. ............................................ 737,500
50,000 GT Interactive Software Corp.* ................................. 1,137,500
58,000 Imax Corp.* (Canada) ........................................... 1,899,500
132,000 International Game Technology .................................. 2,706,000
40,000 MGM Grand, Inc.* ............................................... 1,690,000
100,000 Primadonna Resorts, Inc.* ...................................... 1,800,000
53,000 Showboat, Inc. ................................................. 1,166,000
50,000 WMS Industries, Inc.* .......................................... 1,350,000
--------------
20,510,679
--------------
<PAGE>
<CAPTION>
DEAN WITTER INFORMATION FUND
PORTFOLIO OF INVESTMENTS September 30, 1996 (unaudited)
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Financial Services (0.8%)
80,000 Sterling Commerce, Inc.* ....................................... 2,360,000
--------------
Hotels/Motels (1.2%)
90,000 Hilton Hotels Corp. ............................................ 2,553,750
80,000 Rio Hotel and Casino, Inc.* .................................... 1,260,000
--------------
3,813,750
--------------
Office Equipment & Supplies (0.5%)
28,000 Diebold, Inc. .................................................. 1,634,500
--------------
Publishing (0.9%)
34,000 Tribune Co. .................................................... 2,652,000
--------------
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER INFORMATION FUND
PORTFOLIO OF INVESTMENTS September 30, 1996 (unaudited) continued
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Semiconductors (1.3%)
50,000 Atmel Corp.* ................................................... $ 1,537,500
107,500 Triquint Semiconductor, Inc.* .................................. 2,499,375
--------------
4,036,875
--------------
Specialty Printing (0.8%)
106,000 World Color Press, Inc.* ....................................... 2,358,500
--------------
Telecommunication Equipment (8.8%)
100,000 ACE*COMM Corp.* ................................................ 1,175,000
53,000 Andrew Corp.* .................................................. 2,636,750
40,000 Aspect Telecommunications Corp.* ............................... 2,490,000
40,000 Bay Networks, Inc.* ............................................ 1,090,000
42,000 Cisco Systems, Inc.* ........................................... 2,604,000
40,000 DSC Communications Corp.* ...................................... 1,005,000
70,000 Ericsson (L.M.) Telephone Co. AB (Series "B" Free) (Sweden) .... 1,765,861
50,000 FORE Systems, Inc.* ............................................ 2,068,750
110,000 Geotek Communications, Inc.* ................................... 921,250
49,500 Glenayre Technologies, Inc.* ................................... 1,126,125
87,000 Harmonic Lightwares, Inc.* ..................................... 1,674,750
50,000 LCC International, Inc. (Class A)* ............................. 912,500
22,500 Natural Microsystems Corp.* .................................... 1,057,500
91,000 Network General Corp.* ......................................... 2,081,625
30,000 Nokia AB (Series K) (Finland) .................................. 1,342,223
14,000 Northern Telecom Ltd. (Canada) ................................. 806,961
58,000 Picturetel Corp.* .............................................. 2,030,000
--------------
26,788,295
--------------
Telecommunications (11.3%)
60,000 Alltel Corp.* .................................................. 1,672,500
21,500 Asia Satellite Telecommunications Holdings Ltd.* (Hong Kong) ... 577,812
94,200 Boston Communications Group, Inc.* ............................. 1,518,975
40,000 Brooks Fiber Properties, Inc.* ................................. 1,130,000
65,000 Century Telephone Enterprises, Inc. ............................ 2,234,375
14,300 Compania de Telecommunicaciones de Chile S.A. (ADR) (Chile) .... 1,381,737
30,000 Comsat Corp. ................................................... 678,750
70,000 ICG Communications, Inc.* ...................................... 1,470,000
48,000 Inter-Tel, Inc.* ............................................... 972,000
87,000 Intercel, Inc.* ................................................ 1,783,500
82,000 Intermedia Communications of Florida, Inc.* .................... $ 2,398,500
39,000 Koninklijke PTT Nederland NV (Netherlands) ..................... 1,343,333
72,000 KVH Industries, Inc.* .......................................... 720,000
89,000 LCI International, Inc.* ....................................... 2,803,500
35,000 Lucent Technologies, Inc. ...................................... 1,605,625
4,300 Mannesmann AG (Germany) ........................................ 1,612,641
30,000 Millicom International Cellular S.A.* .......................... 1,207,500
170 Nippon Telegraph & Telephone Corp. (ADR) (Japan) ............... 1,251,010
28,000 Premisys Communications, Inc.* ................................. 1,029,000
17,700 PT Indonesian Satellite Corp. (ADR) (Indonesia) ................ 584,100
286,000 Telecom Corp. of New Zealand, Ltd. (New Zealand) ............... 1,343,422
51,200 Telefonica del Peru S.A. (ADR) (Peru) .......................... 1,171,200
29,700 Telefonos de Mexico S.A. de C.V. (Series L) (ADR) (Mexico) ..... 954,112
47,900 Telekomunikasi Indonesia (ADR) (Indonesia) ..................... 1,490,888
49,500 Teleport Communications Group Inc. (Class A)* .................. 1,163,250
18,200 Western Wireless Corp. (Class A)* .............................. 304,850
--------------
34,402,580
--------------
Telecommunications - Wireless (1.9%)
100,000 Arch Communications Group, Inc.* ............................... 1,362,500
60,000 CommNet Cellular, Inc.* ........................................ 1,732,500
32,000 Globalstar Telecommunications Ltd.* (Bermuda) .................. 1,600,000
50,900 Paging Network, Inc.* .......................................... 1,005,275
--------------
5,700,275
--------------
Telephone - Long Distance (5.8%)
35,000 Ameritech Corp. ................................................ 1,841,875
30,000 BellSouth Corp. ................................................ 1,110,000
60,000 Frontier Corp. ................................................. 1,597,500
60,000 GTE Corp. ...................................................... 2,310,000
100,000 MFS Communications Company, Inc.* .............................. 4,350,000
53,000 Portugal Telecom S.A.* (Portugal) .............................. 1,363,443
40,000 SBC Communications, Inc. ....................................... 1,925,000
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER INFORMATION FUND
PORTFOLIO OF INVESTMENTS September 30, 1996 (unaudited) continued
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
18,000 Tele Danmark AS (B Shares) (Denmark) ........................... $ 855,312
60,000 Telephone & Data Systems, Inc. ................................. 2,415,000
--------------
17,768,130
--------------
Wide Area Networking (4.8%)
50,000 ACT Networks, Inc.* ............................................ 1,387,500
33,000 ADC Telecommunications, Inc.* .................................. 2,103,750
50,000 Adtran, Inc.* .................................................. 2,475,000
40,000 Ascend Communications, Inc.* ................................... 2,640,000
42,000 Cascade Communications Corp.* .................................. 3,417,750
35,000 Tellabs, Inc.* ................................................. 2,467,500
--------------
14,491,500
--------------
Wireless Communication (2.2%)
53,333 360 Communications Co.* ........................................ 1,253,326
50,400 Airtouch Communications, Inc.* ................................. 1,392,300
175 DDI Corp. (Japan) .............................................. 1,415,014
415,000 Technology Resources Industries Berhad* (Malaysia) ............. 1,092,890
42,000 Vodafone Group PLC (ADR) (United Kingdom) ...................... 1,433,250
--------------
6,586,780
--------------
TOTAL COMMON STOCKS (Identified Cost $264,430,850) ............. 289,714,612
--------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- --------------------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENT (a) (4.7%)
U.S. GOVERNMENT AGENCY
$14,300 Federal Home Loan Mortgage Corp. 5.70% due 10/01/96 (Amortized
Cost $14,300,000) .............................................. $ 14,300,000
-------------
TOTAL INVESTMENTS
(Identified Cost $278,730,850) (b) 99.7% 304,014,612
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES .................... 0.3 1,058,676
-------- --------------
NET ASSETS ........................................................ 100.0% $305,073,288
======== ==============
</TABLE>
- ------------
ADR American Depository Receipt.
* Non-income producing security.
(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 $278,807,975.
The aggregate gross unrealized appreciation was $41,737,309 and the
aggregate gross unrealized depreciation was $16,530,672, resulting
in net unrealized appreciation of $25,206,637.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER INFORMATION FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1996 (unaudited)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $278,730,850) ....................................... $304,014,612
Cash .................................................................. 443,133
Receivable for:
Investments sold .................................................... 4,694,229
Shares of beneficial interest sold .................................. 818,662
Dividends ........................................................... 114,529
Foreign withholding taxes reclaimed ................................. 13,568
Deferred organizational expenses ...................................... 149,148
Prepaid expenses and other assets ..................................... 43,154
--------------
TOTAL ASSETS ........................................................ 310,291,035
--------------
LIABILITIES:
Payable for:
Investments purchased ............................................... 4,565,465
Plan of distribution fee ............................................ 249,053
Investment management fee ........................................... 187,995
Shares of beneficial interest repurchased ........................... 87,047
Accrued expenses ...................................................... 128,187
--------------
TOTAL LIABILITIES ................................................... 5,217,747
--------------
NET ASSETS:
Paid-in-capital ....................................................... 291,865,129
Net unrealized appreciation ........................................... 25,283,546
Net investment loss ................................................... (1,422,412)
Accumulated net realized loss ......................................... (10,652,975)
--------------
NET ASSETS .......................................................... $305,073,288
==============
NET ASSET VALUE PER SHARE,
27,891,791 shares outstanding (unlimited shares authorized of $.01
par value) ............................................................ $10.94
==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER INFORMATION FUND
FINANCIAL STATEMENTS, continued
STATEMENT OF OPERATIONS
For the six months ended September, 1996 (unaudited)
<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Dividends (net of $52,724 foreign withholding tax) .................. $ 782,950
Interest ............................................................ 462,542
-------------
TOTAL INCOME ...................................................... 1,245,492
-------------
EXPENSES
Plan of distribution fee ............................................ 1,294,625
Investment management fee ........................................... 1,011,194
Transfer agent fees and expenses .................................... 202,869
Registration fees ................................................... 40,967
Professional fees ................................................... 30,138
Shareholder reports and notices ..................................... 29,458
Custodian fees ...................................................... 25,653
Organizational expenses ............................................. 17,968
Trustees' fees and expenses ......................................... 10,580
Other ............................................................... 4,452
-------------
TOTAL EXPENSES .................................................... 2,667,904
-------------
NET INVESTMENT LOSS ............................................... (1,422,412)
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized loss on:
Investments ....................................................... (8,408,371)
Foreign exchange transactions ..................................... (1,096)
-------------
TOTAL LOSS ........................................................ (8,409,467)
-------------
Net change in unrealized appreciation/depreciation on:
Investments ....................................................... 12,427,295
Translation of forward foreign currency contracts, other assets
and liabilities denominated in foreign currencies ................ (286)
-------------
TOTAL APPRECIATION ................................................ 12,427,009
-------------
NET GAIN .......................................................... 4,017,542
-------------
NET INCREASE ........................................................ $ 2,595,130
=============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER INFORMATION FUND
FINANCIAL STATEMENTS, continued
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX NOVEMBER 28, 1995*
MONTHS ENDED THROUGH MARCH 31,
SEPTEMBER 30, 1996 1996
- ----------------------------------------------------- ------------------ ------------------
<S> <C> <C>
(unaudited)
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss ................................... $ (1,422,412) $ (274,103)
Net realized loss ..................................... (8,409,467) (2,243,508)
Net change in unrealized appreciation ................. 12,427,009 12,856,537
------------------ ------------------
NET INCREASE ........................................ 2,595,130 10,338,926
Dividends in excess of net investment income ......... -- (92,429)
Net increase from transactions in shares of beneficial
interest ............................................. 95,157,175 196,974,486
------------------ ------------------
TOTAL INCREASE ...................................... 97,752,305 207,220,983
NET ASSETS:
Beginning of period ................................... 207,320,983 100,000
------------------ ------------------
END OF PERIOD
(Including a net investment loss of $1,422,412 and
$0, respectively) ................................... $305,073,288 $207,320,983
================== ==================
</TABLE>
- ------------
* Commencement of operations.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER INFORMATION FUND
NOTES TO FINANCIAL STATEMENTS September 30, 1996 (unaudited)
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter Information 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 long-term
capital appreciation. The Fund seeks to achieve its investment objective by
investing primarily in common stocks and securities convertible into common
stocks of domestic and foreign companies which are involved in the
communications and information industry. The Fund was organized as a
Massachusetts business trust on December 8, 1994 and had no other 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 November 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 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; and (4) short-term debt securities
having a maturity date of more than sixty days at time of purchase are valued
on a mark-to-market basis until sixty days prior to maturity and thereafter
at amortized cost based on their value on the 61st day. Short-term debt
securities having a maturity date of sixty days or less at the time of
purchase are valued at amortized cost.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on
the trade date (date the order to buy or sell is executed). Realized gains
and losses on security transactions are determined by the identified cost
method. Dividend income and other distributions are recorded on the
ex-dividend date
<PAGE>
DEAN WITTER INFORMATION FUND
NOTES TO FINANCIAL STATEMENTS September 30, 1996 (unaudited) continued
except for certain dividends on 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 currency gain or loss and in
the Statement of Assets and Liabilities as part of the related foreign
currency denominated asset or liability. The Fund records realized gains or
losses on delivery of the currency or at the time the forward contract is
extinguished (compensated) by entering into a closing transaction prior to
delivery.
E. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.
F. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends
and distributions to its shareholders on the 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
<PAGE>
DEAN WITTER INFORMATION FUND
NOTES TO FINANCIAL STATEMENTS September 30, 1996 (unaudited) continued
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.
G. ORGANIZATIONAL EXPENSES -- The Investment Manager paid the organizational
expenses of the Fund in the amount of approximately $179,000 which have been
reimbursed for the full amount thereof. Such expenses have been deferred and
are being amortized on the straight-line method over a period not to exceed
five years from 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 0.75% to the net assets of the Fund determined as of the close
of each business day.
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund's books and
records and furnishes, at its own expense, office space, facilities,
equipment, clerical, bookkeeping and certain legal services and pays the
salaries of all personnel, including officers of the Fund who are employees
of the Investment Manager. The Investment Manager also bears the cost of
telephone services, heat, light, power and other utilities provided to the
Fund.
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 broker-dealers who engage in or
support distribution of the Fund's shares or who service shareholder
accounts, including overhead and telephone expenses, printing and
distribution of prospectuses and
<PAGE>
DEAN WITTER INFORMATION FUND
NOTES TO FINANCIAL STATEMENTS September 30, 1996 (unaudited) continued
reports used in connection with the offering of the Fund's shares to other
than current shareholders and preparation, printing and distribution of sales
literature and advertising materials. In addition, the Distributor may be
compensated under the Plan for its opportunity costs in advancing such
amounts, which compensation would be in the form of a carrying charge on any
unreimbursed expenses incurred by the Distributor.
Although there is no legal obligation for the Fund to pay expenses incurred
in excess of payments made to the Distributor under the Plan and the proceeds
of contingent deferred sales charges paid by investors upon redemption of
shares, if for any reason the Plan is terminated, the Trustees will consider
at that time the manner in which to treat such expenses. The Distributor has
advised the Fund that such excess amounts, included carrying charges, totaled
$13,271,732 at September 30, 1996.
Provided that the Plan continues in effect, any cumulative expenses incurred
but not yet recovered may be recovered through future distribution fees from
the Fund and contingent deferred sales charges from the Fund's shareholders.
The Distributor has informed the Fund that for the six months ended September
30, 1996, it received approximately $305,600 in contingent deferred sales
charges from certain redemptions of the Fund's shares.
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 September 30, 1996
aggregated $207,430,318 and $115,311,544, respectively.
For the six months ended September 30, 1996, the Fund incurred brokerage
commissions of $34,618 with DWR for portfolio transactions executed on behalf
of the Fund.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent.
<PAGE>
DEAN WITTER INFORMATION FUND
NOTES TO FINANCIAL STATEMENTS September 30, 1996 (unaudited) continued
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX NOVEMBER 28, 1995*
MONTHS ENDED THROUGH
SEPTEMBER 30, 1996 MARCH 31, 1996
------------------------------ ------------------------------
(unaudited)
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Sold ...................... 10,197,498 $114,172,716 19,923,449 $202,231,632
Reinvestment of dividends -- -- 8,519 85,362
-------------- -------------- -------------- --------------
10,197,498 114,172,716 19,931,968 202,316,994
Repurchased ............... (1,734,972) (19,015,541) (512,703) (5,342,508)
-------------- -------------- -------------- --------------
Net increase .............. 8,462,526 $ 95,157,175 19,419,265 $196,974,486
============== ============== ============== ==============
</TABLE>
- ------------
* Commencement of operations.
6. FEDERAL INCOME TAX STATUS
Capital losses incurred after October 31 within the taxable year
("post-October" losses) are deemed to arise on the first business day of the
Fund's next taxable year. The Fund incurred and will elect to defer net
capital losses of approximately $2,166,000 during fiscal 1996.
At March 31, 1996, the Fund had temporary book/tax differences primarily
attributable to post-October losses and permanent book/tax differences
primarily attributable to a net operating loss.
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.
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 INFORMATION 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 NOVEMBER 28, 1995*
MONTHS ENDED THROUGH
SEPTEMBER 30, 1996 MARCH 31, 1996
- -------------------------------------------------- --------------------- ------------------
(unaudited)
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period .............. $10.67 $10.00
------------------ -------------------
Net investment loss ............................... (0.05) (0.01)
Net realized and unrealized gain .................. 0.32 0.69
------------------ -------------------
Total from investment operations .................. 0.27 0.68
Less dividends in excess of net investment income -- (0.01)
------------------ -------------------
Net asset value, end of period .................... $10.94 $10.67
================== ===================
TOTAL INVESTMENT RETURN + ......................... 2.53%(1) 6.77%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses .......................................... 1.98%(2) 2.31%(2)
Net investment loss ............................... (1.05)%(2) (0.51)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands .......... $305,073 $207,321
Portfolio turnover rate ........................... 46%(1) 8%(1)
Average commission rate paid ...................... $0.0549 $0.0496
</TABLE>
- ------------
* Commencement of operations.
+ Does not reflect the deduction of sales charge. 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>
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
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 Curtis
Vice President, Secretary and General Counsel
Edward Gaylor
Vice President
Peter Hermann
Vice President
Jayne Stevlingson
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Dean Witter Trust Company
Harborside Financial Center -- Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Dean Witter InterCapital Inc.
Two World Trade Center
New York, New York 10048
The financial statements included herein have been taken from the
records of the Fund without examination by the independent accountants and
accordingly they do not express an opinion thereon.
This report is submitted for the general information of shareholders
of the Fund. For more detailed information about the Fund, its officers and
trustees, fees, expenses and other pertinent information, please see the
prospectus of the Fund.
This report is not authorized for distribution to prospective investors in
the Fund unless preceded or accompanied by an effective prospectus.
DEAN WITTER
INFORMATION FUND
SEMIANNUAL REPORT
SEPTEMBER 30, 1996
