<PAGE> 1
DEAN WITTER INFORMATION FUND Two World Trade Center, New York, New York 10048
LETTER TO THE SHAREHOLDERS September 30, 1997
DEAR SHAREHOLDER:
Dean Witter Information Fund continues to pursue its objective of long-term
capital appreciation by investing in all aspects of the communication and
information industry. The Fund focuses on companies that exhibit proven
management, proprietary technologies or barriers to entry, and strategic
relationships or alliances. As of September 30, 1997, the Fund's net assets
stood at approximately $255 million.
PERFORMANCE REVIEW
During the six-month period ended September 30, 1997, the Fund's Class B shares
provided a total return of 35.05 percent versus 40.75 percent for the Lipper
Analytical Services, Inc. Science and Technology Funds Index and 26.24 percent
for the Standard & Poor's 500 Composite Stock Price Index (S&P 500). During the
period, the Fund's Class B net asset value (NAV) rose from $8.94 to $12.06. The
sectors which helped the Fund outperform the S&P 500 included Internet-related
stocks, radio broadcasters and emerging telecommunications carriers -- both
wireline and wireless -- and firms that provide technology to these
telecommunication companies.
PORTFOLIO POSITION
Over the past six months several significant events occurred within the
communication and information arena to confirm our enthusiasm for these sectors.
First, a surge of advertising and commerce deals on the World Wide Web (the Web
is the graphical- and consumer-oriented portion of the Internet) drove interest
in such companies as America Online, Inc. (AOL) and Excite, Inc.
Second, a considerable increase in customer additions, initial public offerings
and acquisitions contributed to strong performance in the emerging
telecommunications industry. Significant acquisitions during the period
included: LCI International, Inc. purchasing U.S. Long Distance; WorldCom, Inc.
buying CompuServe's and AOL's Internet networks and WorldCom, Inc. buying Brook
Fiber Properties, Inc. In addition,
<PAGE> 2
DEAN WITTER INFORMATION FUND
LETTER TO THE SHAREHOLDERS September 30, 1997, continued
WorldCom, Inc. announced plans to acquire MCI in the largest acquisition ever in
the United States. Finally, Microsoft Corp. invested $1 billion in the cable TV
industry and is contemplating another $1 billion investment.
As of September 30, 1997, the Fund's greatest industry exposure was in media (27
percent of net assets), followed by telecommunication components and equipment
(26 percent), information services (22 percent) and telecommunication/cable
operating companies (19 percent). Ten percent of the Fund's net assets was held
in foreign securities and American Depositary Receipts, which are receipts
typically issued by a U.S. bank to evidence ownership of the underlying foreign
securities.
On July 28, 1997, the Fund began offering four classes of shares: A, B, C and D,
each with its own sales charge and distribution fee structure. A revised
prospectus, which includes complete details regarding the Fund's conversion to
multiple classes of shares, was mailed to shareholders in mid-summer.
LOOKING AHEAD
The fundamentals underpinning the communication and information sector remain
favorable. Operators continue to spend heavily on equipment and information
systems as they prepare for new competition, which has given consumers the
freedom to choose a service provider. The electronics sector is expected to
perform well in the long run as technology continues to represent more of
worldwide spending. The consolidation that has occurred within the broadcasting
industry has led to a greater control of prices, which points to continued
strong performance. With the growing popularity of advertising on the Internet,
emerging Web-based media stocks seem likely to attract a large piece of the
total $184 billion U.S. advertising pie, and Internet advertising should
eventually lead into overseas advertising as well. Service firms such as AOL,
E*Trade Group, Inc. and the wireless providers are attracting a tremendous
number of new subscribers, a trend that we expect to have a positive impact on
share prices of such companies going forward.
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> 3
DEAN WITTER INFORMATION FUND
RESULTS OF SPECIAL MEETING (unaudited)
* * *
On May 21, 1997, a special meeting of the Fund's shareholders was held for the
purpose of voting on four separate matters, the results of which are as follows:
(1) APPROVAL OF A NEW INVESTMENT MANAGEMENT AGREEMENT BETWEEN THE FUND AND DEAN
WITTER INTERCAPTIAL INC. IN CONNECTION WITH THE MERGER OF MORGAN STANLEY
GROUP INC. WITH DEAN WITTER, DISCOVER & CO.:
<TABLE>
<S> <C>
For...................................................................... 12,130,982
Against.................................................................. 329,591
Abstain.................................................................. 1,136,883
</TABLE>
(2) ELECTION OF TRUSTEES:
<TABLE>
<S> <C>
Michael Bozic
For.................... 12,793,697
Withheld............... 803,759
Charles A. Fiumefreddo
For.................... 12,786,861
Withheld............... 810,595
Edwin J. Garn
For.................... 12,812,386
Withheld............... 785,070
John R. Haire
For.................... 12,773,402
Withheld............... 824,054
Wayne E. Hedien
For.................... 12,799,981
Withheld............... 797,475
Dr. Manuel H. Johnson
For.................... 12,804,994
Withheld............... 792,462
Michael E. Nugent
For.................... 12,817,747
Withheld............... 779,709
Philip J. Purcell
For.................... 12,812,315
Withheld............... 785,141
John L. Schroeder
For.................... 12,799,512
Withheld............... 797,944
</TABLE>
(3) APPROVAL OF A NEW INVESTMENT POLICY WITH RESPECT TO INVESTMENTS IN CERTAIN
OTHER INVESTMENT COMPANIES:
<TABLE>
<S> <C>
For...................................................................... 11,714,870
Against.................................................................. 537,907
Abstain.................................................................. 1,344,679
</TABLE>
(4) RATIFICATION OF THE SELECTION OF PRICE WATERHOUSE LLP AS THE FUND'S
INDEPENDENT ACCOUNTANTS:
<TABLE>
<S> <C>
For...................................................................... 12,441,368
Against.................................................................. 174,581
Abstain.................................................................. 981,507
</TABLE>
<PAGE> 4
DEAN WITTER INFORMATION FUND
PORTFOLIO OF INVESTMENTS September 30, 1997 (unaudited)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (94.2%)
Advertising (8.1%)
60,000 CKS Group, Inc.*............. $ 2,220,000
70,000 Lamar Advertising Co.*....... 2,135,000
65,000 Mecklermedia Corp.*.......... 1,507,188
45,000 Omnicom Group, Inc........... 3,273,750
180,000 Outdoor Systems, Inc.*....... 4,725,000
42,000 Snyder Communications,
Inc.*....................... 1,155,000
80,000 Universal Outdoor Holdings,
Inc.*....................... 2,960,000
80,000 Westwood One, Inc.*.......... 2,540,000
------------
20,515,938
------------
Aerospace (1.0%)
38,000 Asia Satellite
Telecommunications Holdings
Ltd. (ADR) (Hong Kong)*..... 1,087,750
70,000 Loral Space & Communications
Ltd. (Bermuda)*............. 1,443,750
------------
2,531,500
------------
>Broadcast Media (0.2%)
17,200 TV Azteca, S.A. de C.V. (ADR)
(Mexico)*................... 387,000
------------
Broadcasting (11.6%)
5,000 American Radio Systems
Corp.*...................... 238,125
111,364 Chancellor Media Corp. (Class
A)*......................... 5,860,530
81,000 Clear Channel Communications,
Inc.*....................... 5,254,874
40,000 Comcast Corp. (Class A
Special).................... 1,025,000
115,000 Cox Radio, Inc. (Class A)*... 3,255,938
25,000 Heftel Broadcasting Corp.
(Class A)*.................. 1,862,500
70,000 Jacor Communications,
Inc.*....................... 3,088,750
60,000 Time Warner, Inc............. 3,251,250
30,000 Univision Communications,
Inc. (Class A)*............. 1,650,000
152,000 Westinghouse Electric
Corp........................ 4,113,500
------------
29,600,467
------------
Business Services (5.4%)
135,000 ACE* COMM Corp.*............. 2,919,375
30,000 Gartner Group, Inc. (Class
A)*......................... 900,000
80,000 Saville Systems Ireland PLC
(ADR) (Ireland)*............ 5,600,000
65,000 Sterling Commerce, Inc....... 2,335,938
50,000 Transaction Systems
Architects, Inc. (Class
A)*......................... 2,025,000
------------
13,780,313
------------
<CAPTION>
NUMBER OF
SHARES VALUE
<C> <S> <C>
Cable Television Equipment (0.5%)
60,000 Tele-Communications, Inc.*... $ 1,226,250
------------
Computer - Aided Design
(0.1%)
12,000 Faro Technologies, Inc....... 196,500
------------
Computer Software (8.0%)
40,000 Aspect Development, Inc.*.... 1,630,000
60,000 CyberMedia, Inc.*............ 1,601,250
57,500 Information Management
Resources, Inc.............. 1,595,625
120,000 INTERSOLV, Inc.*............. 1,852,500
28,500 Microsoft Corp.*............. 3,770,906
61,500 Oracle Corp.*................ 2,240,906
7,900 Pervasive Software Inc.*..... 88,875
50,000 Platinum Technology, Inc.*... 1,078,125
35,000 Security Dynamics
Technologies, Inc.*......... 1,290,625
66,000 Segue Software, Inc.*........ 594,000
60,000 Tecnomatix Technologies Ltd.
(Israel)*................... 2,280,000
50,000 Viasoft, Inc.*............... 2,468,750
------------
20,491,562
------------
Computer Software & Services (1.2%)
40,000 BEA Systems, Inc............. 715,000
72,000 Keane, Inc.*................. 2,286,000
------------
3,001,000
------------
Computers (0.9%)
30,000 Compaq Computer Corp......... 2,242,500
------------
Computers - Peripheral
Equipment (1.0%)
17,000 Box Hill Systems Corp.*...... 297,500
15,000 Network Appliance, Inc.*..... 815,625
30,000 Sun Microsystems, Inc.*...... 1,402,500
------------
2,515,625
------------
Consumer Products (1.0%)
100,000 Gemstar International Group
Ltd.*....................... 2,500,000
------------
Consumer Services (1.5%)
80,000 The SABRE Group Holdings,
Inc.*....................... 2,865,000
41,700 Ticketmaster Group, Inc...... 964,313
------------
3,829,313
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 5
DEAN WITTER INFORMATION FUND
PORTFOLIO OF INVESTMENTS September 30, 1997 (unaudited) continued
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------
<C> <S> <C>
Electronic & Electrical
Equipment (1.1%)
30,000 Sony Corp. (ADR) (Japan)..... $ 2,818,125
------------
Electronic Components (0.6%)
40,000 Essex International, Inc.*... 1,540,000
------------
Electronics (2.7%)
30,000 Hadco Corp.*................. 1,623,750
50,000 Imation Corp.*............... 1,334,375
45,000 Philips Electronics NV (ADR)
(Netherlands)............... 3,780,000
------------
6,738,125
------------
Entertainment (2.8%)
65,000 Cinar Films, Inc. (Class B)
(Canada).................... 2,478,125
129,000 Imax Corp. (Canada)*......... 3,337,875
110,000 Lodgenet Entertainment
Corp.*...................... 1,430,000
------------
7,246,000
------------
Internet (2.3%)
14,000 America Online, Inc.......... 1,056,125
40,000 E* TRADE Group, Inc.*........ 1,875,000
100,000 Excite, Inc.................. 2,837,500
2,200 Network Solutions, Inc.
(Class A)*.................. 46,750
------------
5,815,375
------------
Media (0.7%)
60,000 Liberty Media Group*......... 1,796,250
------------
Publishing - Newspaper (1.6%)
50,000 Belo (A.H.) Corp............. 2,425,000
15,000 Gannett Co., Inc.*........... 1,619,063
------------
4,044,063
------------
Retail - Specialty (0.9%)
63,000 CompUSA, Inc................. 2,205,000
------------
Semiconductor Capital
Equipment (0.8%)
30,000 Lam Research Corp............ 1,395,000
30,000 Semitool, Inc.*.............. 742,500
------------
2,137,500
------------
Semiconductor Equipment (2.2%)
30,000 Applied Materials, Inc.*..... 2,857,500
50,000 Plasma-Therm, Inc.*.......... 556,250
43,000 Teradyne, Inc.*.............. 2,313,938
------------
5,727,688
------------
Semiconductors (7.5%)
40,000 Altera Corp.................. 2,050,000
20,000 Analog Devices, Inc.*........ 670,000
55,500 Cypress Semiconductor
Corp.*...................... 860,250
NUMBER OF
SHARES VALUE
60,000 DSP Communications, Inc.*.... $ 1,252,500
20,000 Intel Corp................... 1,847,500
36,000 Maxim Integrated Products,
Inc.*....................... 2,560,500
20,000 Micrel, Inc.*................ 845,000
23,000 National Semiconductors
Corp.*...................... 943,000
50,000 PMC-Sierra, Inc.............. 1,268,750
44,400 RF Micro Devices, Inc.*...... 826,950
30,000 Uniphase Corp.*.............. 2,385,000
70,500 Vitesse Semiconductor
Corp.*...................... 3,489,750
------------
18,999,200
------------
Telecommunication Equipment (13.7%)
40,000 ADC Telecommunications,
Inc.*....................... 1,300,000
95,000 Bay Networks, Inc.*.......... 3,669,375
107,500 Boston Communications Group,
Inc......................... 1,572,188
60,000 Cabletron Systems, Inc....... 1,920,000
21,000 CIENA Corp.*................. 1,039,500
50,000 Davox Corp................... 1,675,000
110,000 DSC Communications Corp...... 2,956,250
50,000 Ericsson (L.M.) Telephone Co.
(Class B) (ADR) (Sweden).... 2,396,875
100,000 GeoTel Communications
Corp.*...................... 1,875,000
50,000 Glenayre Technologies,
Inc......................... 834,375
17,500 Information Management
Associates, Inc............. 214,375
55,000 Larscom, Inc. (Class A)*..... 556,875
65,000 Lucent Technologies, Inc..... 5,289,374
38,400 MAS Technology Ltd. (ADR)
(New Zealand)............... 873,600
37,900 Melita International
Corp.*...................... 426,375
16,500 MRV Communications, Inc...... 600,188
16,000 Nokia Corp. (ADR)
(Finland)................... 1,501,000
103,000 P-COM, Inc................... 2,459,125
70,000 Tellabs, Inc.*............... 3,605,000
------------
34,764,475
------------
Telecommunications (0.6%)
30,100 NEXLINK Communications, Inc.
(Class A)*.................. 722,400
20,000 Qwest Communications
International, Inc.......... 917,500
------------
1,639,900
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 6
DEAN WITTER INFORMATION FUND
PORTFOLIO OF INVESTMENTS September 30, 1997 (unaudited) continued
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------
<C> <S> <C>
Telecommunications - Long
Distance (2.2%)
30,000 Acc Corp.*................... $ 975,000
112,000 General Communication,
Inc......................... 882,000
100,000 Pacific Gateway Exchange,
Inc......................... 3,862,499
------------
5,719,499
------------
Telephones (8.9%)
20,400 Bell Canada International
Inc. (Canada)*.............. 385,050
35,000 BellSouth Corp............... 1,618,750
20,000 Century Telephone
Enterprises, Inc............ 880,000
30,775 Compania de
Telecomunicaciones de Chile
S.A. (ADR) (Chile).......... 996,341
75,000 LCI International, Inc....... 1,996,875
47,000 Portugal Telecom S.A. (ADR)
(Portugal).................. 2,041,562
25,000 SBC Communications, Inc...... 1,534,375
50,000 Telecom Argentina Stet -
France Telecom S.A. (Class
B) (ADR) (Argentina)........ 1,521,875
19,700 Telefonos de Mexico S.A. de
C.V. (Series L) (ADR)
(Mexico).................... 1,019,475
32,900 Telekomunikasi Indonesia
(ADR) (Indonesia)........... 736,138
60,000 Teleport Communications Group
Inc. (Class A)*............. 2,692,500
500,000 TIM SpA (Italy).............. 1,989,197
150,000 WorldCom, Inc.*.............. 5,296,876
------------
22,709,014
------------
Wireless Communication (5.1%)
175 DDI Corp. (Japan)............ 880,229
4,030 Mannesmann AG (ADR)
(Germany)................... 1,925,909
70,000 Millicom International
Cellular S.A................ 3,648,750
115,000 Nextel Communications, Inc.
(Class A)*.................. 3,306,250
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------
<C> <S> <C>
70,000 Powertel, Inc................ $ 1,312,500
37,000 Vodafone Group PLC (ADR)
(United Kingdom)............ 1,988,750
------------
13,062,388
------------
TOTAL COMMON STOCKS
(Identified Cost
$174,297,962)................ 239,780,570
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS
- ---------
<C> <S> <C>
SHORT-TERM INVESTMENT (a) (4.5%)
U.S. GOVERNMENT AGENCY
$11,500 Federal Home Loan Mortgage
Corp. 5.47% due 10/01/97
(Amortized Cost
$11,500,000)................ 11,500,000
------------
251,280,570
TOTAL INVESTMENTS
(Identified Cost $185,797,962)
(b)................................. 98.7%
3,220,592
CASH AND OTHER ASSETS IN
EXCESS OF LIABILITIES................ 1.3
---- ------------
NET ASSETS.......................... 100.0% $254,501,162
====== ============
</TABLE>
- ---------------------
<TABLE>
<C> <S>
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
$67,759,406 and the aggregate gross unrealized
depreciation is $2,276,798, resulting in net
unrealized appreciation of $65,482,608.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 7
DEAN WITTER INFORMATION FUND
FINANCIAL STATEMENTS
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1997 (unaudited)
ASSETS:
Investments in securities, at value
(identified cost $185,797,962)....................................... $251,280,570
Cash.................................................................. 581,259
Receivable for:
Investments sold.................................................. 8,908,917
Shares of beneficial interest sold................................ 163,139
Dividends......................................................... 102,913
Deferred organizational expenses...................................... 113,308
Prepaid expenses and other assets..................................... 127,610
------------
TOTAL ASSETS...................................................... 261,277,716
------------
LIABILITIES:
Payable for:
Investments purchased............................................. 6,121,875
Shares of beneficial interest repurchased......................... 225,486
Plan of distribution fee.......................................... 218,876
Investment management fee......................................... 164,198
Accrued expenses...................................................... 46,119
------------
TOTAL LIABILITIES................................................. 6,776,554
------------
NET ASSETS........................................................ $254,501,162
============
COMPOSITION OF NET ASSETS:
Paid-in-capital....................................................... $220,003,157
Net unrealized appreciation........................................... 65,482,562
Net investment loss................................................... (1,674,353)
Accumulated net realized loss......................................... (29,310,204)
------------
NET ASSETS........................................................ $254,501,162
============
CLASS A SHARES:
Net Assets............................................................ $88,733
Shares Outstanding (unlimited authorized, $.01 par value)............. 7,347
NET ASSET VALUE PER SHARE......................................... $12.08
============
MAXIMUM OFFERING PRICE PER SHARE $12.75
(net asset value plus 5.54% of net asset value).................. ============
CLASS B SHARES:
Net Assets............................................................ $254,347,551
Shares Outstanding (unlimited authorized, $.01 par value)............. 21,090,177
NET ASSET VALUE PER SHARE......................................... $12.06
============
CLASS C SHARES:
Net Assets............................................................ $54,293
Shares Outstanding (unlimited authorized, $.01 par value)............. 4,501
NET ASSET VALUE PER SHARE......................................... $12.06
============
CLASS D SHARES:
Net Assets............................................................ $10,585
Shares Outstanding (unlimited authorized, $.01 par value)............. 876
NET ASSET VALUE PER SHARE......................................... $12.08
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 8
DEAN WITTER INFORMATION FUND
FINANCIAL STATEMENTS, continued
<TABLE>
<S> <C>
STATEMENT OF OPERATIONS
For the six months ended September 30, 1997* (unaudited)
NET INVESTMENT INCOME:
INCOME
Dividends (net of $63,723 foreign withholding tax)..................... $ 482,264
Interest............................................................... 270,123
-----------
TOTAL INCOME....................................................... 752,387
-----------
EXPENSES
Plan of distribution fee (Class B shares).............................. 1,179,874
Investment management fee.............................................. 885,046
Transfer agent fees and expenses....................................... 240,232
Shareholder reports and notices........................................ 24,053
Custodian fees......................................................... 22,499
Registration fees...................................................... 19,087
Professional fees...................................................... 18,623
Organizational expenses................................................ 17,969
Trustees' fees and expenses............................................ 7,724
Other.................................................................. 11,633
-----------
TOTAL EXPENSES..................................................... 2,426,740
-----------
NET INVESTMENT LOSS................................................ (1,674,353)
-----------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain...................................................... 5,833,151
Net change in unrealized depreciation.................................. 65,484,125
-----------
NET GAIN........................................................... 71,317,276
-----------
NET INCREASE........................................................... $69,642,923
===========
</TABLE>
- ---------------------
* Class A, Class C and Class D shares were issued July 28, 1997.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 9
DEAN WITTER INFORMATION FUND
FINANCIAL STATEMENTS, continued
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
SEPTEMBER 30, 1997* MARCH 31, 1997
------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss............................ $ (1,674,353) $ (3,163,565)
Net realized gain (loss)....................... 5,833,151 (32,902,627)
Net change in unrealized depreciation.......... 65,484,125 (12,858,100)
----------- -----------
NET INCREASE (DECREASE).................... 69,642,923 (48,924,292)
Net increase (decrease) from transactions in
shares of beneficial interest................ (28,867,992) 55,329,540
----------- -----------
NET INCREASE............................... 40,774,931 6,405,248
NET ASSETS:
Beginning of period............................ 213,726,231 207,320,983
----------- -----------
END OF PERIOD
(Including a net investment loss of
$1,674,353 and $0, respectively)........... $254,501,162 $ 213,726,231
=========== ===========
</TABLE>
- ---------------------
* Class A, Class C and Class D shares were issued July 28, 1997.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 10
DEAN WITTER INFORMATION FUND
NOTES TO FINANCIAL STATEMENTS September 30, 1997 (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 commenced operations on
November 28, 1995. On July 28, 1997, the Fund commenced offering three
additional classes of shares, with the then current shares designated as Class B
shares.
The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase, some Class
A shares, and most Class B shares and Class C shares are subject to a contingent
deferred sales charge imposed on shares redeemed within one year, six years and
one year, respectively. Class D shares are not subject to a sales charge.
Additionally, Class A shares, Class B shares and Class C shares incur
distribution expenses.
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 Dean Witter InterCapital Inc. (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
<PAGE> 11
DEAN WITTER INFORMATION FUND
NOTES TO FINANCIAL STATEMENTS September 30, 1997 (unaudited) continued
day. Short-term debt securities having a maturity date of sixty days or less at
the time of purchase are valued at amortized cost.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
Dividend income and other distributions are recorded on the ex-dividend date
except for certain dividends 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. MULTIPLE CLASS ALLOCATIONS -- Investment income, expenses (other than
distribution fees), and realized and unrealized gains and losses are allocated
to each class of shares based upon the relative net asset value on the date such
items are recognized. Distribution fees are charged directly to the respective
class.
D. 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.
E. 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.
F. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.
<PAGE> 12
DEAN WITTER INFORMATION FUND
NOTES TO FINANCIAL STATEMENTS September 30, 1997 (unaudited) continued
G. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to its shareholders on the ex-dividend date. The amount of
dividends and distributions from net investment income and net realized capital
gains are determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for financial reporting purposes but not for tax purposes are reported as
dividends in excess of net investment income or distributions in excess of net
realized capital gains. To the extent they exceed net investment income and net
realized capital gains for tax purposes, they are reported as distributions of
paid-in-capital.
H. 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
following annual rates to the net assets of the Fund determined as of the close
of each business day: 0.75% to the portion of daily net assets not exceeding
$500 million; and 0.725% to the portion of daily net assets exceeding $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. The Plan
provides that the Fund will pay the Distributor a fee which is accrued daily and
paid monthly at the following annual rates: (i) Class A -- 0.25% of the average
daily
<PAGE> 13
DEAN WITTER INFORMATION FUND
NOTES TO FINANCIAL STATEMENTS September 30, 1997 (unaudited) continued
net assets of Class A; (ii) Class B -- 1.0% of the lesser of: (a) the average
daily aggregate gross sales of the Class B shares since the inception of the
Fund (not including reinvestment of dividend or capital gain distributions) less
the average daily aggregate net asset value of the Class B shares redeemed since
the Fund's inception upon which a contingent deferred sales charge has been
imposed or waived; or (b) the average daily net assets of Class B; and (iii)
Class C -- 1.0% of the average daily net assets of Class C. In the case of Class
A shares, amounts paid under the Plan are paid to the Distributor for services
provided. In the case of Class B and Class C shares, amounts paid under the Plan
are paid to the Distributor for services provided and the expenses borne by it
and others in the distribution of the shares of these Classes, including the
payment of commissions for sales of these Classes 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 others who engage in or
support distribution of the 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 these shares to
other than current shareholders; and preparation, printing and distribution of
sales literature and advertising materials. In addition, the Distributor may
utilize fees paid pursuant to the Plan, in the case of Class B shares, to
compensate DWR and other selected broker - dealers for their opportunity costs
in advancing such amounts, which compensation would be in the form of a carrying
charge on any unreimbursed expenses.
In the case of Class B shares, provided that the Plan continues in effect, any
cumulative expenses incurred by the Distributor but not yet recovered may be
recovered through the payment of future distribution fees from the Fund pursuant
to the Plan and contingent deferred sales charges paid by investors upon
redemption of Class B shares. 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 $12,431,851 at September 30, 1997.
In the case of Class A shares and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 1.0% of the average daily
net assets of Class A or Class C, respectively, will not be reimbursed by the
Fund through payments in any subsequent year, except that expenses representing
a gross sales credit to account executives may be reimbursed in the subsequent
calendar year. For the period ended September 30, 1997, the distribution fee was
accrued for Class A shares and Class C shares at the annual rate of 0.25% and
1.0%, respectively.
<PAGE> 14
DEAN WITTER INFORMATION FUND
NOTES TO FINANCIAL STATEMENTS September 30, 1997 (unaudited) continued
The Distributor has informed the Fund that for the six months ended September
30, 1997, it received contingent deferred sales charges from certain redemptions
of the Fund's Class B shares of $509,149 and received $3,177 in front-end sales
charges from sales of the Fund's Class A shares. The respective shareholders pay
such charges which are not an expense of the Fund.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the six months ended September 30, 1997 aggregated
$168,421,361, and $192,625,220, respectively.
For the six months September 30, 1997, the Fund incurred brokerage commissions
of $26,640 with DWR for portfolio transactions executed on behalf of the Fund.
For the period May 31, 1997 through September 30, 1997, the Fund incurred
brokerage commissions of $8,020 with Morgan Stanley & Co., Inc., an affiliate of
the Investment Manager since May 31, 1997, for portfolio transactions executed
on behalf of the Fund.
Dean Witter Trust FSB, an affiliate of the Investment Manager and Distributor,
is the Fund's transfer agent. At September 30, 1997, the Fund had transfer agent
fees and expenses payable of approximately $12,000.
5. 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.
<PAGE> 15
DEAN WITTER INFORMATION FUND
NOTES TO FINANCIAL STATEMENTS September 30, 1997 (unaudited) continued
6. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
SEPTEMBER 30, 1997 MARCH 31, 1997
--------------------------- ---------------------------
(unaudited)
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
CLASS A SHARES*
Sold.......................................................... 7,347 $ 85,100 -- --
---------- ------------ ---------- ------------
CLASS B SHARES
Sold.......................................................... 1,947,250 21,357,013 12,321,396 $136,279,927
Redeemed...................................................... (4,776,219) (50,372,359) (7,831,515) (80,950,387)
---------- ------------ ---------- ------------
Net increase (decrease) -- Class B............................ (2,828,969) (29,015,346) 4,489,881 55,329,540
---------- ------------ ---------- ------------
CLASS C SHARES*
Sold.......................................................... 4,587 53,247 -- --
Redeemed...................................................... (86) (1,007) -- --
---------- ------------ ---------- ------------
Net increase -- Class C....................................... 4,501 52,240 -- --
---------- ------------ ---------- ------------
CLASS D SHARES*
Sold.......................................................... 876 10,014 -- --
---------- ------------ ---------- ------------
Net increase (decrease) in Fund............................... (2,816,245) $(28,867,992) 4,489,881 $ 55,329,540
========== ============ ========== ============
</TABLE>
- ---------------------
* For the period July 28, 1997 (issue date) through September 30, 1997.
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 September 30, 1997, there were no outstanding forward contracts.
<PAGE> 16
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 SIX FOR THE PERIOD
MONTHS ENDED FOR THE YEAR NOVEMBER 28, 1995*
SEPTEMBER 30, ENDED THROUGH
1997**++ MARCH 31, 1997 MARCH 31, 1996
---------------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C>
CLASS B SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.......................... $ 8.94 $ 10.67 $ 10.00
-------- -------- --------
Net investment loss........................................... (0.08) (0.13) (0.01)
Net realized and unrealized gain (loss)....................... 3.20 (1.60) 0.69
-------- -------- --------
Total from investment operations.............................. 3.12 (1.73) 0.68
-------- -------- --------
Less dividends in excess of net investment income............. -- -- (0.01)
-------- -------- --------
Net asset value, end of period................................ $ 12.06 $ 8.94 $ 10.67
======== ======== ========
TOTAL INVESTMENT RETURN+...................................... 35.05%(1) (16.31)% 6.77%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses...................................................... 2.11%(2) 2.01% 2.31%(2)
Net investment loss........................................... (1.42)%(2) (1.16)% (0.51)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands....................... $254,348 $213,726 $207,321
Portfolio turnover rate....................................... 76%(1) 132% 8%(1)
Average commission rate paid.................................. $0.0453 $0.0527 $0.0496
</TABLE>
- ---------------------
<TABLE>
<C> <S>
* Commencement of operations.
** Prior to July 28, 1997, the Fund issued one class of shares. All shares of the Fund held prior to that date have been
designated Class B shares.
++ The per share amounts were computed using an average number of shares outstanding during the period.
+ 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.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 17
DEAN WITTER INFORMATION FUND
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 28, 1997*
THROUGH
SEPTEMBER 30,
1997++
---------------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C>
CLASS A SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period...................................................................... $ 11.43
Net realized and unrealized gain.......................................................................... 0.65
-------
Net asset value, end of period............................................................................ $ 12.08
=======
TOTAL INVESTMENT RETURN+.................................................................................. 5.69%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................................................................. 1.32%(2)
Net investment loss....................................................................................... (0.92)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands................................................................... $89
Portfolio turnover rate................................................................................... 76%(1)
Average commission rate paid.............................................................................. $0.0453
CLASS C SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period...................................................................... $ 11.43
Net realized and unrealized gain.......................................................................... 0.63
-------
Net asset value, end of period............................................................................ $ 12.06
=======
TOTAL INVESTMENT RETURN+.................................................................................. 5.51%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................................................................. 2.07%(2)
Net investment loss....................................................................................... (1.66)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands................................................................... $54
Portfolio turnover rate................................................................................... 76%(1)
Average commission rate paid.............................................................................. $0.0453
</TABLE>
- ---------------------
<TABLE>
<C> <S>
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares outstanding during the period.
+ 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.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 18
DEAN WITTER INFORMATION FUND
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 28, 1997*
THROUGH
SEPTEMBER 30,
1997++
---------------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C>
CLASS D SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period...................................................................... $11.43
Net realized and unrealized gain.......................................................................... 0.65
-------
Net asset value, end of period............................................................................ $12.08
=======
TOTAL INVESTMENT RETURN+.................................................................................. 5.69%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................................................................. 1.06%(2)
Net investment loss....................................................................................... (0.66)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands................................................................... $11
Portfolio turnover rate................................................................................... 76%(1)
Average commission rate paid.............................................................................. $0.0453
</TABLE>
- ---------------------
<TABLE>
<C> <S>
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares outstanding during the period.
+ Calculated based on the net asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 19
(This Page Intentionally Left Blank)
<PAGE> 20
TRUSTEES
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
Edward Gaylor
Vice President
Peter Hermann
Vice President
Jayne Stevlingson
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 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, 1997
