<PAGE>
DEAN WITTER INFORMATION FUND Two World Trade Center, New York, New York 10048
LETTER TO THE SHAREHOLDERS March 31, 1997
DEAR SHAREHOLDER:
Dean Witter Information Fund continues to invest in companies that are
involved in all aspects of the communications and information industries,
paying particular attention to companies that possess some combination of
attributes such as 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 March 31, 1997, net assets stood at approximately $214 million.
PERFORMANCE REVIEW
Over the first half of its recently concluded fiscal year, the Fund
registered a positive total return of 2.53 percent. Subsequently, a
combination of widespread poor small-stock performance, uncertainty
surrounding the timing and effects of new telecommunications legislation, and
generally higher interest rates provided the backdrop for a disappointing
total return of -16.31 percent for the full fiscal year ended March 31, 1997.
Over the same period, the Standard & Poor's 500 Composite Stock Price Index
(S&P 500) and the Lipper Analytical Services, Inc. Science and Technology
Funds Index registered total returns of 19.84 percent and 7.03 percent,
respectively.
The accompanying chart illustrates the performance of a $10,000 investment in
the Fund since inception (November 28, 1995) through the fiscal year ended
March 31, 1997, versus the performance of similar hypothetical investments in
the issues comprising the S&P 500 and the Lipper Science and Technology Funds
Index.
The fourth quarter of 1996 saw significant performance improvement among
technology-related stocks and the portfolio management team's primary and
immediate goal is to use this degree of improvement to bolster the Fund's
overall performance. A strategic reallocation of assets is occurring
throughout the portfolio, marked by a greater focus on selective
larger-capitalization companies.
<PAGE>
DEAN WITTER INFORMATION FUND
LETTER TO THE SHAREHOLDERS March 31, 1997, continued
POSITIONING THE FUND'S PORTFOLIO
On March 31, 1997, the Fund's assets were allocated primarily among four
sectors: telecommunications equipment; electronics; media and entertainment;
and telecommunications operating companies. During the recent period of
higher interest rates and a rather directionless market, the Fund also
maintained a modestly defensive cash position totaling approximately 8
percent of net assets. Additionally, the Fund holds approximately 20 percent
of its total net assets in foreign securities representing 19 countries,
including several American Depository Receipts, which are receipts for shares
of foreign issuers held in U.S. banks.
GOING FORWARD
[THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND
ACCURATE DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR
THE PURPOSE OF EDGAR FILING.]
DEAN WITTER INFORMATION FUND
GROWTH OF $10,000
DATE FUND S&P LIPPER
- ------------------------------------------------------------------------------
November 28, 1995 $10000 $10000 $10000
- ------------------------------------------------------------------------------
March 31, 1996 $10677 $10743 $ 9473
- ------------------------------------------------------------------------------
March 31, 1997 $ 8579 (3) $12874 $10139
- ------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (FUND)
1 YEAR LIFE OF FUND
===========================================================
-16.31% (1) - 8.06% (1)
-----------------------------------------------------------
-20.49% (2) -10.82% (2)
===========================================================
===============================================================
Fund S&P 500 (4) LIPPER (5)
------- ------- -------
===============================================================
Past performance is not predictive of future returns.
- ------------------------
(1) Figure shown does not reflect the deduction of any sales charges.
(2) Figure shown assumes the deduction of the maximum applicable
contingent deferred sales charge (CDSC) (1 year-5%, since
inception-4%). See the Fund's current prospectus for complete details
on fees and sales charges.
(3) Closing value after the deduction of a 4% CDSC, assuming a complete
redemption on March 31, 1997.
(4) The Standard & Poor's 500 Composite Stock Price Index (S&P 500) is a
broad-based index, the performance of which is based on the average
performance of 500 widely held common stocks. The performance of the
Index does not include any expenses, fees or charges. The Index is
unmanaged and should not be considered an investment.
(5) The Lipper Science & Technology Funds Index is an equally-weighted
performance index of the largest qualifying funds (based on net
assets) in the Lipper Science & Technology Funds objective. The Index,
which is adjusted for capital gains distributions and income
dividends, is unmanaged and should not be considered an investment.
There are currently 10 funds represented in this index.
An ever-increasing global dependence on telecommunications and the
accompanying demand for speed and reliability provides the fundamental
underpinnings for robust growth among the key sectors in which the Fund
invests. The borders for these sectors continue to expand as the world's
emerging markets not only demand state-of-the-art telecommunications
technology, but require immediate infrastructure improvements, which
particularly enhances the attraction and value of the equipment and
electronics areas. Meanwhile, declining telecommunications costs should
trigger greater usage, which is good news for the operating and media and
entertainment companies. Further, given the increase in the number of
larger-capitalization stocks held in the portfolio, combined with an expected
recovery among smaller-cap stocks, we are cautiously optimistic regarding the
Fund's future prospects.
In conclusion, we expect the era of telecommunications competition to be a
primary catalyst for enhanced market valuations among all of the sectors that
comprise the communications information sector. There is no question that the
transition has involved uncertainty and a test of faith among investors.
However, we believe that the period
<PAGE>
DEAN WITTER INFORMATION FUND
LETTER TO THE SHAREHOLDERS March 31, 1997, continued
of execution is upon us and are confident that those investors who have
remained on the sideline will be rejuvenated as legislative clarity arrives
and attractive earnings growth materializes.
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 March 31, 1997
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (90.2%)
Advertising (5.7%)
26,000 Interpublic Group of Companies, Inc. ........................... $ 1,371,500
51,300 Omnicom Group, Inc. ............................................ 2,558,587
85,000 Outdoor Systems, Inc.* .......................................... 2,465,000
136,000 Sitel Corp.* .................................................... 1,819,000
42,000 Snyder Communications, Inc.* .................................... 987,000
100,000 Universal Outdoor Holdings, Inc.* .............................. 2,900,000
--------------
12,101,087
--------------
Aerospace (4.7%)
Asia Satellite Telecommunications Holdings Ltd. (ADR)(Hong
43,000 Kong)* .......................................................... 1,101,875
45,000 EchoStar Communications Corp. (Class A)* ....................... 922,500
80,000 Electromagnetic Sciences, Inc.* ................................. 1,480,000
20,000 Globalstar Telecommunications Ltd. (Bermuda)* .................. 1,040,000
2,262 Globalstar Telecommunications Ltd. (Bermuda)(Rights)* .......... 56,550
120,000 Loral Space & Communications Ltd. (Bermuda)* ................... 1,695,000
129,500 Orbital Sciences Corp.* ......................................... 1,780,625
70,000 PanAmSat Corp.* ................................................. 1,986,250
--------------
10,062,800
--------------
Broadcast Media (0.5%)
23,000 Carlton Communications PLC (United Kingdom) .................... 986,125
--------------
Broadcasting (16.0%)
85,000 American Radio Systems Corp.* ................................... 2,592,500
Argyle Television, Inc.
103,000 (Class A)* ..................................................... 2,472,000
50,000 Chancellor Broadcasting Co. (Class A)* ......................... 1,287,500
65,000 Cinar Films, Inc. (Class B) (Canada)* .......................... 1,576,250
110,000 Clear Channel Communications, Inc.* ............................ 4,716,250
25,000 Comcast Corp. (Class A Special) ................................. 421,875
110,000 Cox Radio, Inc. (Class A)* ...................................... 2,282,500
70,000 Emmis Broadcasting Corp. (Class A)* ............................ 2,686,250
Evergreen Media Corp.
110,000 (Class A)* ..................................................... 3,203,750
Heftel Broadcasting Corp.
57,000 (Class A)* ..................................................... 2,622,000
80,000 Jacor Communications, Inc.* ..................................... 2,210,000
39,000 Lin Television Corp.* ........................................... 1,408,875
Telemundo Group, Inc.
80,000 (Class A)* ..................................................... $ 2,240,000
40,000 Time Warner, Inc. .............................................. 1,730,000
30,000 Univision Communications, Inc. (Class A)* ...................... 978,750
100,000 Westwood One, Inc.* ............................................. 1,850,000
--------------
34,278,500
--------------
Business Services (5.5%)
100,000 ACE*COMM Corp.* ................................................. 812,500
111,200 CUC International, Inc.* ........................................ 2,502,000
70,000 Gartner Group, Inc. (Class A)* .................................. 1,487,500
144,000 Getty Communication PLC (ADR)(United Kingdom)* ................. 2,016,000
40,000 Precision Response Corp.* ....................................... 945,000
40,000 Primark Corp.* .................................................. 950,000
80,000 Saville Systems Ireland PLC (ADR)(Ireland)* .................... 2,260,000
25,000 Tollgrade Communications, Inc. .................................. 437,500
100,000 TTI Team Telecom International Ltd. (Israel)* .................. 375,000
--------------
11,785,500
--------------
Computer Software (11.2%)
43,750 Adobe Systems, Inc. ............................................. 1,750,000
68,000 America Online, Inc.* ........................................... 2,881,500
56,000 Check Point Software Technologies Ltd. (Israel)* ............... 1,148,000
50,000 Clarify Inc.* ................................................... 1,175,000
53,500 CyberMedia, Inc.* ............................................... 468,125
23,600 Edify Corp.* .................................................... 247,800
Eidos PLC (ADR)
44,200 (United Kingdom)* .............................................. 591,175
33,500 Geoworks* ....................................................... 217,750
75,000 Interlink Computer Sciences, Inc.* ............................. 806,250
6,500 IONA Technologies PLC (ADR) (United Kingdom)* .................. 115,375
100,000 ISG International Software Group Ltd. (Israel)* ................ 962,500
20,000 Lycos, Inc.* .................................................... 280,000
30,900 Memco Software Ltd.* ............................................ 436,462
8,500 Microsoft Corp.* ................................................ 778,812
30,000 Netscape Communications Corp.* ................................. 900,000
91,000 Network General Corp.* .......................................... 1,956,500
80,000 Raptor Systems, Inc.* ........................................... 1,030,000
35,000 Security Dynamics Technologies, Inc.* .......................... 857,500
76,000 Segue Software, Inc.* ........................................... 731,500
7,000 Simulation Sciences, Inc.* ...................................... 70,000
110,000 Sterling Commerce, Inc.* ........................................ 3,190,000
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER INFORMATION FUND
PORTFOLIO OF INVESTMENTS March 31, 1997, continued
NUMBER OF
SHARES VALUE
- -------------------------------------------------------------------------------------------
30,000 Synopsys, Inc.* ................................................. $ 750,000
68,000 Tecnomatix Technologies Ltd. (Israel)* ......................... 1,411,000
125,000 Visigenic Software, Inc.* ....................................... 1,109,375
--------------
23,864,624
--------------
Computer Software & Services (0.4%)
30,000 Black Box Corp.* ................................................ 806,250
--------------
Computers -Peripheral Equipment (1.1%)
65,000 EMC Corp.* ...................................................... 2,307,500
--------------
Electronics (1.4%)
26,500 Diebold, Inc. .................................................. 997,062
45,000 Natural Microsystems Corp.* ..................................... 894,375
25,000 Uniphase Corp.* ................................................. 925,000
5,000 Verifone, Inc.* ................................................. 163,750
--------------
2,980,187
--------------
Electronics -Semiconductors/
Components (0.7%)
100,000 Sierra Semiconductor Corp.* ..................................... 1,612,500
--------------
Entertainment/Gaming & Lodging (1.8%)
67,000 Imax Corp. (Canada)* ............................................ 2,269,625
150,000 Lodgenet Entertainment Corp.* ................................... 1,481,250
--------------
3,750,875
--------------
Housing & Home Furnishings (0.5%)
100,000 Gemstar International Group Ltd.* .............................. 1,175,000
--------------
Internet (2.5%)
18,000 AmeriTrade Holding Corp. (Class A)* ............................ 281,250
50,000 Checkfree Corp.* ................................................ 606,250
110,000 E*TRADE Group, Inc.* ............................................ 1,980,000
105,000 Mecklermedia Corp.* ............................................. 2,441,250
--------------
5,308,750
--------------
Office Equipment & Supplies (0.6%)
55,000 Lexmark International Group, Inc.* ............................. 1,333,750
--------------
Publishing -Newspaper (0.5%)
8,500 Gannett Co., Inc. ............................................... 729,938
10,500 New York Times Co. (The) (Class A) ............................. 463,313
--------------
1,193,251
--------------
Semiconductors (4.6%)
25,000 Altera Corp.* ................................................... 1,075,000
10,500 Intel Corp. ..................................................... 1,459,500
36,000 Maxim Integrated Products, Inc.* ............................... 1,741,500
<PAGE>
30,000 Micrel, Inc.* ................................................... $ 870,000
32,000 Micron Technology, Inc. ......................................... 1,296,000
20,000 Texas Instruments, Inc. ......................................... 1,497,500
65,500 Vitesse Semiconductor Corp.* .................................... 1,809,438
--------------
9,748,938
--------------
Telecommunication Equipment (13.9%)
20,000 3Com Corp.* ..................................................... 652,500
56,000 ADC Telecommunications, Inc.* ................................... 1,505,000
20,000 Adtran, Inc.* ................................................... 495,000
34,000 Ascend Communications, Inc.* .................................... 1,385,500
30,000 BBN Corp. ....................................................... 498,750
20,000 Coherent Communications Systems Corp.* ......................... 345,000
37,500 Digital Link Corp.* ............................................. 450,000
50,000 Digital Microwave Corp.* ........................................ 950,000
66,000 Ericsson (L.M.) Telephone Co. (Class B)(ADR)(Sweden) ........... 2,227,500
65,000 FORE Systems, Inc.* ............................................. 966,875
68,000 IFR Systems, Inc. ............................................... 1,020,000
90,000 Larscom Inc. (Class A)* ......................................... 742,500
55,000 Lucent Technologies, Inc. ....................................... 2,901,250
60,000 Nokia Corp. (ADR)(Finland) ...................................... 3,495,000
26,000 Northern Telecom Ltd. (Canada) .................................. 1,699,750
79,000 Ortel Corp.* .................................................... 997,375
40,000 Pairgain Technologies, Inc.* .................................... 1,185,000
65,000 Philips Electronics NV (ADR) (Netherlands) ..................... 2,892,500
50,000 QUALCOMM, Incorporated* ......................................... 2,818,750
70,000 Tellabs, Inc.* .................................................. 2,520,000
--------------
29,748,250
--------------
Telephones (15.1%)
50,400 Airtouch Communications, Inc.* .................................. 1,159,200
50,000 Alltel Corp.* ................................................... 1,625,000
60,000 BellSouth Corp. ................................................ 2,535,000
55,000 Century Telephone Enterprises, Inc. ............................ 1,622,500
60,775 Compania de Telecommunicaciones de Chile S.A. (ADR)(Chile) .... 1,747,281
60,000 GTE Corp. ...................................................... 2,797,500
29,000 LCI International, Inc.* ........................................ 485,750
57,000 Portugal Telecom SA (ADR) (Portugal) ........................... 2,094,750
17,700 PT Indonesian Satellite Corp. (ADR)(Indonesia)* ................ 473,475
27,000 Royal PTT Nederland NV (ADR)(Netherlands) ...................... 978,750
60,000 SBC Communications, Inc. ........................................ 3,157,500
40,000 Tele Danmark A/S (ADR) (Denmark) ............................... 1,045,000
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER INFORMATION FUND
PORTFOLIO OF INVESTMENTS March 31, 1997, continued
NUMBER OF
SHARES VALUE
- -------------------------------------------------------------------------------------------
Telecom Argentina Stet - France Telecom S.A. (Class B)
25,000 (ADR)(Argentina) ............................................... $ 1,150,000
18,000 Telecom Corp. of New Zealand, Ltd. (ADR)(New Zealand) .......... 1,278,000
29,700 Telefonos de Mexico S.A. de C.V. (Series L)(ADR)(Mexico) ....... 1,143,450
47,900 Telekomunikasi Indonesia (ADR)(Indonesia) ...................... 1,442,988
60,000 Telephone & Data Systems, Inc. .................................. 2,302,500
24,500 Teleport Communications Group Inc. (Class A)* .................. 560,438
210,000 WorldCom, Inc.* ................................................. 4,593,750
--------------
32,192,832
--------------
Wireless Communication (3.5%)
175 DDI Corp. (Japan) ............................................... 1,104,177
4,030 Mannesmann AG (Germany) ......................................... 1,534,551
55,000 Millicom International Cellular S.A.* .......................... 2,255,000
415,000 Technology Resources Industries
Berhad (Malaysia)* ............................................. 904,066
37,000 Vodafone Group PLC (ADR) (United Kingdom) ...................... 1,632,625
--------------
7,430,419
--------------
TOTAL COMMON STOCKS
(Identified Cost $192,668,700) .................................. 192,667,138
--------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENT (A) (8.0%)
<S> <C> <C>
U.S. GOVERNMENT AGENCY
Federal Home Loan Mortgage Corp. 6.50% due 04/01/97 (Amortized
$17,200 Cost $17,200,000) ............................................... $17,200,000
-------------
</TABLE>
<TABLE>
<CAPTION>
TOTAL INVESTMENTS
IDENTIFIED COST $209,868,700)(B) .. 98.2% 209,867,138
<S> <C> <C>
CASH AND OTHER ASSETS IN EXCESS OF
LIABILITIES........................ 1.8 3,859,093
-------- --------------
NET ASSETS......................... 100.0% $213,726,231
======== ==============
</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 approximates
identified cost. The aggregate gross unrealized appreciation is
$18,362,809 and the aggregate gross unrealized depreciation is
$18,364,372, resulting in net unrealized depreciation of $1,563.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER INFORMATION FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1997
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value (identified
cost $209,868,700) ............................ $209,867,138
Cash ........................................... 575,074
Receivable for:
Investments sold ............................. 3,902,370
Dividends .................................... 231,300
Shares of beneficial interest sold ........... 137,841
Interest ..................................... 4,106
Deferred organizational expenses................ 131,277
Prepaid expenses and other assets............... 24,880
--------------
TOTAL ASSETS.................................. 214,873,986
--------------
LIABILITIES:
Payable for:
Shares of beneficial interest repurchased .... 426,429
Plan of distribution fee...................... 227,745
Investments purchased......................... 175,000
Investment management fee..................... 148,608
Accrued expenses ............................... 169,973
--------------
TOTAL LIABILITIES ............................ 1,147,755
--------------
NET ASSETS:
Paid-in-capital................................. 248,871,149
Net unrealized depreciation .................... (1,563)
Accumulated net realized loss .................. (35,143,355)
--------------
NET ASSETS ................................... $213,726,231
==============
NET ASSET VALUE PER SHARE,
23,919,146 shares outstanding (unlimited
shares authorized of $.01 par value) .......... $8.94
==============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended March 31, 1997
<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Dividends (net of $68,738 foreign
withholding tax) ............................ $ 1,376,455
Interest ..................................... 945,171
--------------
TOTAL INCOME ............................... 2,321,626
--------------
EXPENSES
Plan of distribution fee ..................... 2,733,235
Investment management fee .................... 2,043,107
Transfer agent fees and expenses ............. 514,587
Registration fees ............................ 45,569
Shareholder reports and notices .............. 43,804
Organizational expenses ...................... 35,839
Professional fees ............................ 28,312
Custodian fees ............................... 17,659
Trustees' fees and expenses .................. 17,381
Other ........................................ 5,698
--------------
TOTAL EXPENSES.............................. 5,485,191
--------------
NET INVESTMENT LOSS ........................ (3,163,565)
--------------
NET REALIZED AND UNREALIZED LOSS:
Net realized loss on:
Investments ................................ (32,888,142)
Foreign exchange transactions .............. (14,485)
--------------
NET LOSS ................................... (32,902,627)
--------------
Net change in unrealized appreciation on:
Investments ................................ (12,858,029)
Translation of other assets and liabilities
denominated in foreign currencies ........ (71)
--------------
NET DEPRECIATION ........................... (12,858,100)
--------------
NET LOSS ................................... (45,760,727)
--------------
NET DECREASE ................................. $(48,924,292)
==============
</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 YEAR NOVEMBER 28, 1995*
ENDED THROUGH
MARCH 31, 1997 MARCH 31, 1996
- ------------------------------------------------------ -------------- ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss ................................... $ (3,163,565) $ (274,103)
Net realized loss ..................................... (32,902,627) (2,243,508)
Net change in unrealized appreciation ................. (12,858,100) 12,856,537
-------------- ------------------
NET INCREASE (DECREASE) ............................. (48,924,292) 10,338,926
Dividends from net investment income .................. -- (92,429)
Net increase from transactions in shares of beneficial
interest ............................................. 55,329,540 196,974,486
-------------- ------------------
NET INCREASE ........................................ 6,405,248 207,220,983
NET ASSETS:
Beginning of period.................................... 207,320,983 100,000
-------------- ------------------
END OF PERIOD ....................................... $213,726,231 $207,320,983
============== ==================
</TABLE>
- ------------
* Commencement of operations.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER INFORMATION FUND
NOTES TO FINANCIAL STATEMENTS March 31, 1997
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
pursuant to procedures adopted 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 March 31, 1997, 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 foreign
currency 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
<PAGE>
DEAN WITTER INFORMATION FUND
NOTES TO FINANCIAL STATEMENTS March 31, 1997, continued
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.
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. Effective May 1, 1997, the annual rate will be reduced
to 0.725% of the net assets in excess of $500 million.
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
<PAGE>
DEAN WITTER INFORMATION FUND
NOTES TO FINANCIAL STATEMENTS March 31, 1997, continued
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 reports used in connection with the offering
of the Fund's shares to other than current shareholders and preparation,
printing and distribution of sales literature and advertising materials. In
addition, the Distributor may be compensated under the Plan for its
opportunity costs in advancing such amounts, which compensation would be in
the form of a carrying charge on any unreimbursed expenses incurred by the
Distributor.
Provided that the Plan continues in effect, any cumulative expenses incurred
but not yet recovered may be recovered through future distribution fees from
the Fund and contingent deferred sales charges from the Fund's shareholders.
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, including carrying charges,
totaled $12,988,417 at March 31, 1997.
The Distributor has informed the Fund that for the year ended March 31, 1997,
it received approximately $874,000 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 year ended March 31, 1997
aggregated $372,276,351 and $327,439,957, respectively.
For the year ended March 31, 1997, the Fund incurred brokerage commissions of
$73,538 with DWR for portfolio transactions executed on behalf of the Fund.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At March 31, 1997, the Fund had
transfer agent fees and expenses payable of approximately $88,000.
<PAGE>
DEAN WITTER INFORMATION FUND
NOTES TO FINANCIAL STATEMENTS March 31, 1997, continued
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR NOVEMBER 28, 1995*
ENDED THROUGH
MARCH 31, 1997 MARCH 31, 1996
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Sold...................... 12,321,396 $136,279,927 19,923,449 $202,231,632
Reinvestment of
dividends................ -- -- 8,519 85,362
-------------- -------------- -------------- --------------
12,321,396 136,279,927 19,931,968 202,316,994
Repurchased............... (7,831,515) (80,950,387) (512,703) (5,342,508)
-------------- -------------- -------------- --------------
Net increase.............. 4,489,881 $ 55,329,540 19,419,265 $196,974,486
============== ============== ============== ==============
</TABLE>
- ------------
* Commencement of operations.
6. FEDERAL INCOME TAX STATUS
At March 31, 1997, the Fund had a net capital loss carryover of approximately
$19,779,000 which will be available through March 31, 2005 to offset future
capital gains to the extent provided by regulations.
Capital and foreign currency losses incurred after October 31 ("post-October
losses") within the taxable year 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 and foreign currency losses of approximately $14,822,000
and $11,800, respectively, during fiscal 1997.
As of March 31, 1997, the Fund had temporary book/tax differences primarily
attributable to post-October losses and capital loss deferrals on wash sales.
The Fund had permanent book/tax differences primarily attributable to a net
operating loss. To reflect reclassifications arising from the permanent
differences, paid-in-capital was charged $3,166,345, net investment loss was
credited $3,163,565 and accumulated net realized loss was credited $2,780.
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.
At March 31, 1997, there were no outstanding forward foreign currency
contracts used to facilitate settlement of foreign currency denominated
portfolio transactions.
<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 YEAR NOVEMBER 28, 1995*
ENDED THROUGH
MARCH 31, 1997 MARCH 31, 1996
- ------------------------------------------------- -------------- ------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ............. $ 10.67 $10.00
-------------- ------------------
Net investment loss .............................. (0.13) (0.01)
Net realized and unrealized gain (loss) ......... (1.60) 0.69
-------------- ------------------
Total from investment operations ................. (1.73) 0.68
Less dividends in excess of net investment income -- (0.01)
-------------- ------------------
Net asset value, end of period ................... $ 8.94 $10.67
============== ==================
TOTAL INVESTMENT RETURN+ ........................ (16.31)% 6.77%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses ......................................... 2.01% 2.31%(2)
Net investment loss .............................. (1.16)% (0.51)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands ......... $213,726 $207,321
Portfolio turnover rate .......................... 132% 8%(1)
Average commission rate paid ..................... $0.0527 $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>
DEAN WITTER INFORMATION FUND
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND TRUSTEES
OF DEAN WITTER INFORMATION FUND
In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of Dean Witter
Information Fund (the "Fund") at March 31, 1997, the results of its
operations for the year then ended, and the changes in its net assets and the
financial highlights for the year then ended and for the period November 28,
1995 (commencement of operations) through March 31, 1996, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Fund's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted
our audits of these financial statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at March
31, 1997 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
May 9, 1997
<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
Barry Fink
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
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
ANNUAL REPORT
MARCH 31, 1997
