<PAGE> 1
DEAN WITTER HAWAII MUNICIPAL TRUST Two World Trade Center, New York,
LETTER TO THE SHAREHOLDERS May 31, 1997 New York 10048
DEAR SHAREHOLDER:
We are pleased to present the semiannual report on the operations of Dean Witter
Hawaii Municipal Trust for the six-month period ended May 31, 1997.
A consumer-led acceleration in economic activity developed in the fourth quarter
of 1996 and continued into the first quarter of 1997. This contributed to rising
interest rates between December and April. On March 25, 1997, the Federal
Reserve Board raised the federal-funds rate 25 basis points to 5.50 percent in a
preemptive move against a possible acceleration in the rate of inflation. The
fixed-income markets recognized that additional rate hikes were possible, but
rallied when the Fed left short-term interest rates unchanged at its May
meeting.
MUNICIPAL MARKET CONDITIONS
Municipal yields followed the trend of Treasury yields, but were less volatile.
Long-term insured revenue bond yields rose from 5.45 percent in
BOND YIELDS 1994-1997
<TABLE>
<CAPTION>
Muni Yields Treasury Yields
<S> <C>
5.45 6.35
Jan '94 5.29 6.24
5.64 6.66
6.19 7.09
6.24 7.31
6.23 7.43
6.31 7.61
6.15 7.4
6.17 7.45
6.42 7.82
6.66 7.97
6.99 8
6.65 7.88
Jan '95 6.42 7.7
6.12 7.44
6.07 7.43
6.05 7.34
5.84 6.65
6 6.62
5.99 6.85
5.98 6.65
5.97 6.5
5.79 6.33
5.61 6.13
5.49 5.95
Jan '96 5.42 6.03
5.55 6.47
5.89 6.67
5.94 6.91
5.99 6.99
5.86 6.87
5.77 6.97
5.82 7.12
5.71 6.92
5.6 6.64
5.45 6.35
5.56 6.64
Jan '97 5.63 6.79
5.53 6.8
5.83 7.1
5.74 6.96
5.58 6.91
</TABLE>
<TABLE>
<CAPTION>
Ratio
<S> <C>
Dec '93 0.8586
0.8481
0.8468
0.8728
0.854
0.8387
Jun '94 0.8293
0.8314
0.828
0.8212
0.8356
0.8738
Dec '94 0.8438
0.834
0.8222
0.8167
0.8245
0.8784
Jun '95 0.9066
0.875
0.8997
0.9184
0.915
0.9151
Dec '95 0.923
0.8989
0.8577
0.8835
0.8601
0.8571
Jun '96 0.8529
0.8278
0.8176
0.8248
0.8431
0.8583
Dec '96 0.8372
0.8293
0.8129
0.8216
0.8251
0.8081
</TABLE>
<PAGE> 2
DEAN WITTER HAWAII MUNICIPAL TRUST
LETTER TO THE SHAREHOLDERS May 31, 1997, continued
November 1996 to a high of 5.85 percent in mid April 1997 before ending May at
5.60 percent. Similarly, yields on one-year municipal notes moved from 3.60 to
3.90 percent over the past six months. The yield curve pick-up by extending
maturity from 1 to 30 years was 170 basis points.
The ratio of 30-year insured revenue bond yields to 30-year U.S. Treasury yields
declined from 86 percent at the end of November to 81 percent in May 1997. A
declining ratio means that municipals have outperformed Treasuries, but have
become relatively more expensive. The annual range of the ratio has averaged
from 80 to 92 percent over the past three years. New-issue municipal volume was
down 5 percent during the first five months of 1997. However, underwriting
volume for the full year is expected to exceed bond maturities and redemptions.
PERFORMANCE
Dean Witter Hawaii Municipal Trust's net asset value (NAV) moved from $9.95 to
$9.84 over the six-month period ended May 31, 1997. Based on this NAV change
plus reinvestment of tax-free dividends totaling $0.29 per share, the Fund's
total return for the six-month period was 1.47 percent. The Fund's net assets
total $3.8 million.
PORTFOLIO STRUCTURE
Investments were diversified among 11 long-term sectors and 23 credits. The
average maturity and call protection were 21 years and 8 years, respectively.
Over 80 percent of the Fund's holdings were rated double "A" or better by either
Moody's Investor Service or Standard and Poor's Inc. In-state credits
represented over 70 percent of the portfolio.
<TABLE>
<CAPTION>
FIVE LARGEST SECTORS AS OF MAY 31, 1997
(% OF NET ASSETS)
<S> <C>
TRANSPORTATION 20%
GENERAL OBLIGATION 20%
MORTGAGE 15%
ID/PCR* 14%
HOSPITAL 10%
ALL OTHERS 21%
</TABLE>
* Industrial Development/Pollution Control Revenue
Portfolio structure is subject to change.
<TABLE>
<CAPTION>
CREDIT RATINGS AS OF MAY 31, 1997
(% OF TOTAL LONG-TERM PORTFOLIO)
<S> <C>
Aaa OR AAA 65%
Aa OR AA 14%
A OR A 14%
Baa OR BBB 7%
</TABLE>
As measured by Moody's Investors Service, Inc. or Standard & Poor's Corp.
Portfolio structure is subject to change.
<PAGE> 3
DEAN WITTER HAWAII MUNICIPAL TRUST
LETTER TO THE SHAREHOLDERS May 31, 1997, continued
LOOKING AHEAD
Since the election year collapse of flat-tax proposals, municipal bonds have
improved relative to U.S. Treasury securities. Although tax-free yields are
currently somewhat expensive when compared with their historical relationship
with Treasury yields, the long-term benefits of tax-exempt income remain intact.
We appreciate your ongoing support of Dean Witter Hawaii Municipal Trust 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> 4
DEAN WITTER HAWAII MUNICIPAL TRUST
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 were as
follows:
(1) APPROVAL OF A NEW INVESTMENT MANAGEMENT AGREEMENT BETWEEN THE FUND AND DEAN
WITTER INTERCAPITAL INC. IN CONNECTION WITH THE MERGER OF MORGAN STANLEY
GROUP INC. WITH DEAN WITTER, DISCOVER & CO.:
<TABLE>
<S> <C>
For............................................................................................... 219,630
Against........................................................................................... 0
Abstain........................................................................................... 16,554
</TABLE>
(2) ELECTION OF TRUSTEES:
<TABLE>
<S> <C>
Michael Bozic
For............................ 220,352
Withheld....................... 15,832
Charles A. Fiumefreddo
For............................ 220,352
Withheld....................... 15,832
Edwin J. Garn
For............................ 220,352
Withheld....................... 15,832
John R. Haire
For............................ 220,352
Withheld....................... 15,832
Wayne E. Hedien
For............................ 220,352
Withheld....................... 15,832
Dr. Manuel H. Johnson
For............................ 220,352
Withheld....................... 15,832
Michael E. Nugent
For............................ 220,352
Withheld....................... 15,832
Philip J. Purcell
For............................ 220,352
Withheld....................... 15,832
John L. Schroeder
For............................ 220,352
Withheld....................... 15,832
</TABLE>
(3) APPROVAL OF A NEW INVESTMENT POLICY WITH RESPECT TO INVESTMENTS IN CERTAIN
OTHER INVESTMENT COMPANIES:
<TABLE>
<S> <C>
For............................................................................................... 219,630
Against........................................................................................... 0
Abstain........................................................................................... 16,554
</TABLE>
(4) RATIFICATION OF PRICE WATERHOUSE LLP AS INDEPENDENT ACCOUNTANTS:
<TABLE>
<S> <C>
For............................................................................................... 232,679
Against........................................................................................... 0
Abstain........................................................................................... 3,505
</TABLE>
<PAGE> 5
DEAN WITTER HAWAII MUNICIPAL TRUST
PORTFOLIO OF INVESTMENTS May 31, 1997 (unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
HAWAII TAX-EXEMPT MUNICIPAL BONDS+ (96.1%)
General Obligation (20.1%)
Hawaii,
$ 100 1993 Ser CH.............................................................. 6.00% 11/01/10 $ 107,154
200 1996 Ser CM (FGIC)....................................................... 6.00 12/01/12 213,580
150 Honolulu City & County, Ser 1996 A (FGIC)................................. 5.50 09/01/15 150,235
100 Kauai County, Refg 1992 Ser C (AMBAC)..................................... 5.15 08/01/00 101,920
100 Maui County, 1996 Ser A (MBIA)............................................ 5.75 06/01/13 102,708
100 Puerto Rico, Public Improvement Ser 1996.................................. 5.50 07/01/17 97,972
------- ----------
750 773,569
------- ----------
Educational Facilities Revenue (3.7%)
150 University of Puerto Rico, Ser M (MBIA)................................... 5.25 06/01/25 143,232
------- ----------
Electric Revenue (3.7%)
150 Puerto Rico Electric Power Authority, Power Ser X......................... 5.50 07/01/25 143,590
------- ----------
Hospital Revenue (10.1%)
Hawaii Department of Budget & Finance,
200 Kapiolani Health Care Ser 1996........................................... 6.25 07/01/21 206,282
100 Queens Health 1996 Ser A................................................. 5.875 07/01/11 101,829
75 Puerto Rico Industrial, Tourist, Educational, Medical & Environmental
Control Facilities Financing Authority, Hospital Auxilio Mutuo 1995 Ser A
(MBIA)................................................................... 6.25 07/01/24 78,801
------- ----------
375 386,912
------- ----------
Industrial Development/Pollution Control Revenue (13.5%)
Hawaii Department of Budget & Finance,
100 Hawaiian Electric Co Ser 1992 (AMT) (MBIA)............................... 6.55 12/01/22 105,317
100 Hawaiian Electric Co Ser 1995 A (AMT) (MBIA)............................. 6.60 01/01/25 106,247
200 Hawaiian Electric Co Ser 1996 A (AMT) (MBIA)............................. 6.20 05/01/26 205,654
100 Puerto Rico Ports Authority, American Airlines Inc 1996 Ser A (AMT)....... 6.25 06/01/26 101,912
------- ----------
500 519,130
------- ----------
Mortgage Revenue - Multi-Family (5.9%)
Hawaii Housing Finance & Development Corporation,
100 Affordable Rental 1995 Ser A............................................. 6.10 07/01/30 100,217
125 University of Hawaii Faculty Ser 1995 (AMBAC)............................ 5.65 10/01/16 125,747
------- ----------
225 225,964
------- ----------
Mortgage Revenue - Single Family (8.9%)
300 Hawaii Housing Finance & Development Corporation, Purchase 1994 Ser B
(MBIA)................................................................... 5.90 07/01/27 302,709
40 Puerto Rico Housing Bank & Finance Agency, GNMA/FNMA Collateralized
Portfolio I (AMT)........................................................ 6.10 10/01/15 40,498
------- ----------
340 343,207
------- ----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 6
DEAN WITTER HAWAII MUNICIPAL TRUST
PORTFOLIO OF INVESTMENTS May 31, 1997 (unaudited) (continued)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Transportation Facilities Revenue (19.5%)
Hawaii,
$ 200 Airports Third Refg Ser of 1994 (AMT) (AMBAC)............................ 5.75% 07/01/09 $ 205,398
300 Harbor Ser 1997 (AMT) (MBIA)............................................. 5.75 07/01/17 299,982
150 Highway Ser 1996......................................................... 5.25 07/01/16 144,737
100 Puerto Rico Highway & Transportation Authority, Refg Ser V................ 5.75 07/01/18 99,030
------- ----------
750 749,147
------- ----------
Water & Sewer Revenue (4.0%)
150 Honolulu Board of Water Supply, Ser 1996.................................. 5.80 07/01/16 152,817
------- ----------
Other Revenue (2.6%)
100 Puerto Rico Industrial, Tourist, Educational, Medical & Environmental
------- Control Facilities Financing Authority, Teachers Retirement 1996 Ser B... 5.50 07/01/16 99,411
----------
Refunded (4.1%)
150 Puerto Rico Aqueduct & Sewer Authority, 1988 Ser A........................ 7.875 07/01/98++ 159,374
------- ----------
$ 3,640 TOTAL HAWAII TAX-EXEMPT MUNICIPAL BONDS (Identified Cost $3,635,019) (a)................. 96.1%
======= 3,696,353
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES........................................... 3.9 151,763
----- ----------
NET ASSETS............................................................................... 100.0% $3,848,116
===== ==========
</TABLE>
- ---------------------
<TABLE>
<C> <S>
AMT Alternative Minimum Tax.
+ Puerto Rico issues represent 25% of net assets.
++ Prerefunded to call date shown.
(a) The aggregate cost for federal income tax purposes approximates identified cost. The aggregate gross
unrealized appreciation is $62,514 and the aggregate gross unrealized depreciation is $1,180, resulting in
net unrealized appreciation of $61,334.
Bond Insurance:
- ---------------
AMBAC AMBAC Indemnity Corporation.
FGIC Financial Guaranty Insurance Company.
MBIA Municipal Bond Investors Assurance Corporation.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 7
DEAN WITTER HAWAII MUNICIPAL TRUST
FINANCIAL STATEMENTS
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1997 (unaudited)
ASSETS:
Investments in securities, at value
(identified cost $3,635,019)........................................... $3,696,353
Cash.................................................................... 69,153
Receivable for:
Interest............................................................ 81,022
Shares of beneficial interest sold.................................. 2,911
Deferred organizational expenses........................................ 36,524
Receivable from affiliate............................................... 11,434
Prepaid expenses........................................................ 13,048
----------
TOTAL ASSETS........................................................ 3,910,445
----------
LIABILITIES:
Payable for:
Dividends to shareholders........................................... 1,096
Plan of distribution fee............................................ 634
Organizational expenses................................................. 36,524
Accrued expenses and other payables..................................... 24,075
----------
TOTAL LIABILITIES................................................... 62,329
----------
NET ASSETS:
Paid-in-capital......................................................... 3,807,225
Net unrealized appreciation............................................. 61,334
Accumulated undistributed net investment income......................... 548
Accumulated net realized loss........................................... (20,991)
----------
NET ASSETS.......................................................... $3,848,116
==========
NET ASSET VALUE PER SHARE,
390,987 shares outstanding
(unlimited shares authorized of $ .01 par value)....................... $9.84
=====
MAXIMUM OFFERING PRICE PER SHARE,
(net asset value plus 3.09% of net asset value)*....................... $10.14
======
</TABLE>
- ---------------------
* On sales of $100,000 or more the offering price is reduced
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 8
DEAN WITTER HAWAII MUNICIPAL TRUST
FINANCIAL STATEMENTS, continued
<TABLE>
<S> <C>
STATEMENT OF OPERATIONS
For the six months ended May 31, 1997 (unaudited)
NET INVESTMENT INCOME:
INTEREST INCOME.......................................................... $ 93,030
--------
EXPENSES
Professional fees........................................................ 23,014
Shareholder reports and notices.......................................... 15,242
Investment management fee................................................ 6,127
Organizational expenses.................................................. 5,981
Plan of distribution fee................................................. 3,265
Registration fees........................................................ 1,436
Transfer agent fees and expenses......................................... 1,279
Other.................................................................... 2,059
--------
TOTAL EXPENSES....................................................... 58,403
LESS: AMOUNTS WAIVED/REIMBURSED...................................... (54,965)
LESS: EXPENSES OFFSET................................................ (173)
--------
NET EXPENSES......................................................... 3,265
--------
NET INVESTMENT INCOME................................................ 89,765
--------
NET REALIZED AND UNREALIZED LOSS:
Net realized loss........................................................ (3,249)
Net change in unrealized appreciation.................................... (29,440)
--------
NET LOSS............................................................. (32,689)
--------
NET INCREASE............................................................. $ 57,076
========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 9
DEAN WITTER HAWAII MUNICIPAL TRUST
FINANCIAL STATEMENTS, continued
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
MAY 31, 1997 NOVEMBER 30, 1996
- ------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income............................... $ 89,765 $ 120,514
Net realized loss................................... (3,249) (18,128)
Net change in unrealized appreciation............... (29,440) 55,522
---------- -----------
NET INCREASE.................................... 57,076 157,908
Dividends from net investment income................ (89,665) (120,065)
Net increase from transactions in shares of
beneficial interest................................ 655,720 1,676,974
---------- -----------
NET INCREASE.................................... 623,131 1,714,817
NET ASSETS:
Beginning of period................................. 3,224,985 1,510,168
---------- -----------
END OF PERIOD
(Including undistributed net investment income
of $548 and $919, respectively)................. $3,848,116 $ 3,224,985
========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 10
DEAN WITTER HAWAII MUNICIPAL TRUST
NOTES TO FINANCIAL STATEMENTS May 31, 1997 (unaudited)
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter Hawaii Municipal Trust (the "Fund") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified,
open-end management investment company. The Fund's investment objective is to
provide a high level of current income which is exempt from both federal and
State of Hawaii income taxes consistent with the preservation of capital. The
Fund was organized as a Massachusetts business trust on March 14, 1995 and
commenced operations on June 16, 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 -- Portfolio securities are valued by an outside
independent pricing service approved by the Trustees. The pricing service has
informed the Fund that in valuing the portfolio securities, it uses both a
computerized matrix of tax-exempt securities and evaluations by its staff, in
each case based on information concerning market transactions and quotations
from dealers which reflect the bid side of the market each day. The portfolio
securities are thus valued by reference to a combination of transactions and
quotations for the same or other securities believed to be comparable in
quality, coupon, maturity, type of issue, call provisions, trading
characteristics and other features deemed to be relevant. 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.
Discounts are accreted and premiums are amortized over the life of the
respective securities. Interest income is accrued daily.
C. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable and nontaxable income to its
shareholders. Accordingly, no federal income tax provision is required.
<PAGE> 11
DEAN WITTER HAWAII MUNICIPAL TRUST
NOTES TO FINANCIAL STATEMENTS May 31, 1997 (unaudited) continued
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to its shareholders on the record date. The amount of dividends
and distributions from net investment income and net realized capital gains are
determined in accordance with federal income tax regulations which may differ
from generally accepted accounting principles. These "book/tax" differences are
either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within the
capital accounts based on their federal tax-basis treatment; temporary
differences do not require reclassification. Dividends and distributions which
exceed net investment income and net realized capital gains for financial
reporting purposes but not for tax purposes are reported as dividends in excess
of net investment income or distributions in excess of net realized capital
gains. To the extent they exceed net investment income and net realized capital
gains for tax purposes, they are reported as distributions of paid-in-capital.
E. ORGANIZATIONAL EXPENSES -- Dean Witter InterCapital Inc. (the "Investment
Manager") paid the organizational expenses of the Fund in the amount of
approximately $60,000 which will be reimbursed for the full amount thereof,
exclusive of amounts assumed of $23,442. Such expenses have been deferred and
are being amortized on the straight-line method over a period not to exceed five
years from the commencement of operations.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement, the Fund pays the Investment
Manager a management fee, calculated daily and payable monthly, by applying the
annual rate of 0.35% to the Fund's daily net assets.
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.
The Investment Manager has undertaken to assume all operating expenses
(excluding plan of distribution fees) and waive the compensation provided for in
its Investment Management Agreement until December 31, 1997.
<PAGE> 12
DEAN WITTER HAWAII MUNICIPAL TRUST
NOTES TO FINANCIAL STATEMENTS May 31, 1997 (unaudited) continued
3. PLAN OF DISTRIBUTION
Dean Witter Distributors Inc. (the "Distributor"), an affiliate of the
Investment Manager, is the distributor of the Fund's shares and in accordance
with a Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act
finances certain expenses in connection therewith.
Under the Plan, the expenses of certain activities and services provided by Dean
Witter Reynolds Inc. ("DWR"), an affiliate of the Investment Manager and
Distributor, and others who engage in or support distribution of the Fund's
shares or who service shareholder accounts, including overhead and telephone
expenses incurred in connection with the distribution of the Fund's shares, are
reimbursed.
Reimbursements for these expenses will be made in monthly payments by the Fund
to the Distributor, which will in no event exceed an amount equal to a payment
at the annual rate of 0.20% of the Fund's average daily net assets during the
month. Expenses incurred by the Distributor pursuant to the Plan in any fiscal
year will not be reimbursed by the Fund through payments accrued in any
subsequent fiscal year. For the six months ended May 31, 1997, the distribution
fee was accrued at the annual rate of 0.19%.
The Distributor has informed the Fund that for the six months ended May 31,
1997, it received approximately $18,000 in commissions from the sale of the
Fund's shares of beneficial interest. Such commissions are deducted from the
proceeds of the shares and 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 May 31, 1997 aggregated
$916,655 and $216,235 respectively.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At May 31, 1997, the Fund had
transfer agent fees and expenses payable of approximately $600.
<PAGE> 13
DEAN WITTER HAWAII MUNICIPAL TRUST
NOTES TO FINANCIAL STATEMENTS May 31, 1997 (unaudited) continued
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE YEAR
MAY 31, 1997 ENDED
------------------- NOVEMBER 30, 1996
(unaudited) ----------------------
SHARES AMOUNT SHARES AMOUNT
------ -------- ------- ----------
<S> <C> <C> <C> <C>
Sold..................................................................... 71,371 $700,151 221,179 $2,156,449
Reinvestment of dividends................................................ 5,152 50,340 7,541 73,494
------ -------- ------- ----------
76,523 750,491 228,720 2,229,943
Repurchased.............................................................. (9,661) (94,771) (57,016) (552,969)
------ -------- ------- ----------
Net increase............................................................. 66,862 $655,720 171,704 $1,676,974
====== ======== ======= ==========
</TABLE>
6. FEDERAL INCOME TAX STATUS
At November 30, 1996, the Fund had a net capital loss carryover of approximately
$18,200 which will be available through November 30, 2004 to offset future
capital gains to the extent provided by regulations.
<PAGE> 14
DEAN WITTER HAWAII MUNICIPAL TRUST
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX FOR THE YEAR JUNE 16, 1995*
MONTHS ENDED ENDED THROUGH
MAY 31, 1997 NOVEMBER 30, 1996 NOVEMBER 30, 1995
- ---------------------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period........................... $ 9.95 $ 9.91 $ 9.70
------ ------- -------
Net investment income.......................................... 0.29 0.50 0.19
Net realized and unrealized gain (loss)........................ (0.11) 0.04 0.21
------ ------- -------
Total from investment operations............................... 0.18 0.54 0.40
Less dividends from net investment income...................... (0.29) (0.50) (0.19)
------ ------- -------
Net asset value, end of period................................. $ 9.84 $ 9.95 $ 9.91
====== ======= =======
TOTAL INVESTMENT RETURN+....................................... 1.47%(1) 5.64% 4.21%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses....................................................... 0.19%(2)(3) 0.19%(3) 0.20%(2)(3)
Net investment income.......................................... 5.13%(2)(3) 5.09%(3) 4.69%(2)(3)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands........................ $3,848 $3,225 $1,510
Portfolio turnover rate........................................ 7%(1) 51% 14%(1)
</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.
(3) If the Investment Manager had not assumed expenses and waived the
management fee, the expense and net investment income ratios would have
been as follows, which reflect the effect of expense offsets as follows:
<TABLE>
<CAPTION>
EXPENSE NET INVESTMENT EXPENSE
PERIOD ENDED: RATIO INCOME RATIO OFFSET
- --------------------------------------------------------------------------------------- ------- -------------- -------
<S> <C> <C> <C>
May 31, 1997....................................................................... 3.34% 1.98% 0.01%
November 30, 1996*................................................................. 2.69% 2.59% 0.03%
November 30, 1995*................................................................. 2.70% 2.19% 0.10%
</TABLE>
- -------------------------
* After application of the Fund's state expense limitation.
SEE NOTES TO FINANCIAL STATEMENTS
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<PAGE> 16
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
James F. Willison
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Dean Witter Trust Company
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Dean Witter InterCapital Inc.
Two World Trade Center
New York, New York 10048
The financial statements included herein have been taken from the records of
the Fund without examination by the independent accountants and accordingly
they do not express an opinion thereon.
This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and
trustees, fees, expenses and other pertinent information, please see the
prospectus of the Fund.
This report is not authorized for distribution to prospective investors in the
Fund unless preceded or accompanied by an effective prospectus.
DEAN WITTER
HAWAII MUNICIPAL
TRUST
[PHOTO]
Semiannual Report
May 31, 1997
