<PAGE>
DEAN WITTER HAWAII MUNICIPAL TRUST
LETTER TO THE SHAREHOLDERS November 30, 1996
Two World Trade Center, New York, New York 10048
DEAR SHAREHOLDER:
We are pleased to present the annual report on the operations of Dean Witter
Hawaii Municipal Trust for the fiscal year ended November 30, 1996.
Stronger economic growth and the potential threat of rising inflation shifted
the tone of the fixed-income markets from bullish to bearish early in 1996.
This change in market psychology was confirmed in March by a surprisingly large
increase in payroll employment. The rise in interest rates between February and
July may be attributed to market weakness on the days that strong monthly
employment figures were reported. The bond market sporadically pushed long-term
yields higher, in anticipation of a possible increase in the federal-funds rate
by the Federal Reserve Board. However, as employment growth and overall
economic activity slowed during the summer, the central bank left monetary
policy unchanged. As a result, the fixed-income markets regained an optimistic
outlook and rallied from September through November to lower yields last seen
at the beginning of the year.
MUNICIPAL MARKET CONDITIONS
Between February and July 1996, 30-year insured revenue bond yields rose 75
basis points from 5.40 percent to reach 6.15 percent in April and again in
mid-June. Subsequently, demand for municipal bonds improved and followed the
trend of Treasuries to lower rates. By the end of November, insured bond yields
stood at 5.50 percent. In November, the yield curve pickup for extending
maturities from 1 to 30 years was 190 basis points.
The ratio of insured revenue bond yields to 30-year U.S. Treasury yields moved
from 92 percent to 86 percent for the calendar year to date. A declining ratio
means that municipal bond prices outperformed U.S. Treasury prices. The
relative improvement in municipals occurred as flat-tax proposals failed to
gain public support.
The municipal market also benefited from steady demand. In addition to regular
maturities and calls for redemption this year, it has been estimated
<PAGE>
DEAN WITTER HAWAII MUNICIPAL TRUST
LETTER TO THE SHAREHOLDERS November 30, 1996, continued
that investors also faced the retirement of over $60 billion in debt that had
been previously refinanced. On the supply side, new issues increased 13 percent
to $160 billion for the first 11 months of 1996.
PERFORMANCE
DEAN WITTER HAWAII MUNICIPAL TRUST
GROWTH OF $10,000
LEHMAN BROTHERS
DATE TOTAL MUNI BOND
INDEX LIPPER
===============================================================================
June 16, 1995 $ 9,700 $10,000 $10,000
- -------------------------------------------------------------------------------
November 30, 1995 $10,108 $10,610 $10,547
- -------------------------------------------------------------------------------
November 30, 1996 $10,678 (3) $11,234 $11,098
===============================================================================
AVERAGE ANNUAL TOTAL RETURNS
1 YEAR LIFE OF FUND
================================
5.64 (1) 6.81 (1)
--------------------------------
2.47 (2) 4.60 (2)
================================
============================================================
___ Fund ___ Lehman (4) ___ Lipper Avg.(5)
============================================================
Past performance is not predictive of future returns.
- ---------------------------------------
(1) Figure shown assumes reinvestment of all distributions and does not
reflect the deduction of any sales charges.
(2) Figure shown assumes reinvestment of all distributions and the deduction
of the maximum applicable front-end sales charge (3%). See the Fund's
current prospectus for complete details on fees and sales charges.
(3) Closing value including the deduction of a 3% front-end sales charge,
assuming a complete redemption on November 30, 1996.
(4) The Lehman Brothers Municipal Bond Index tracks the performance of
municipal bonds with maturities of 2 years or greater and a minimum
credit rating of Baa or BBB, as rated by Moody's Investors Service, Inc.
or Standard & Poor's Corp., respectively. The Index does not include any
expenses, fees or charges. The Index is unmanaged and should not be
considered an investment.
(5) The Lipper HI Municipal Debt Funds Average tracks the performance of the
funds that limit assets to those securities which are exempt from
taxation in HI state (double tax exempt) or a specified city in HI
(triple tax-exempt) as reported by Lipper Analytical Services.
The net asset value (NAV) of Dean Witter Hawaii Municipal Trust rose slightly
from $9.91 to $9.95 per share during the fiscal year ended November 30, 1996.
Based on this NAV change plus reinvestment of tax-free dividends totaling
approximately $0.50 per share, the Fund's total return was 5.64 percent. The
accompanying chart illustrates the growth of a $10,000 investment in the Fund
from inception (June 16, 1995) through the fiscal year ended November 30, 1996,
versus similar hypothetical investments in the issues that comprise the Lehman
Brothers Municipal Bond Index and the funds that comprise the Lipper Analytical
Services, Inc. Hawaii Municipal Debt Funds Average.
PORTFOLIO STRUCTURE
Dean Witter Hawaii Municipal Trust's net assets, which currently exceed $3
million, were diversified among nine long-term sectors and 21 credits. In-state
credits represented over 75 percent of the portfolio. The average maturity and
call protection of the Fund's portfolio were 22 and 9 years, respectively.
Credit quality remained a major focus with nearly 60 percent of long-term
holdings insured by triple "A" rated bond insurers.
<PAGE>
DEAN WITTER HAWAII MUNICIPAL TRUST
LETTER TO THE SHAREHOLDERS November 30, 1996, continued
(The chart below represents information which appears as a graphic in the
printed report)
A pie chart reflecting the credit quality of the portfolio as rated by
Moody's or Standard & Poors Credit Rating as of November 30, 1996.
CREDIT RATING PERCENT
------------- -------
Aaa or AAA 58%
A or A 20%
Aa or AA 19%
Baa or BBB 3%
Also, a pie chart reflecting the Five largest sectors as of November 30, 1996.
FIVE LARGEST SECTORS PERCENT
All others 22%
Mortgage 18%
General Obligation 18%
Transportation 17%
IDR/PCR* 13%
Hospital 12%
* Industrial Development/Pollution Control Revenue
LOOKING AHEAD
The balance between the supply of new issues and demand created by maturities
is expected to remain positive for the municipal market. Long-term insured
municipal securities currently yield 86 percent of the yield on U.S. Treasury
securities and may be expected to follow the directions of the Treasury market.
Although municipal performance relative to Treasuries has improved, tax-exempt
investments could again be affected by market uncertainty if new tax-reduction
proposals resurface.
We appreciate your ongoing support of 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>
DEAN WITTER HAWAII MUNICIPAL TRUST
PORTFOLIO OF INVESTMENTS November 30, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HAWAII TAX-EXEMPT MUNICIPAL BONDS+ (93.9%)
General Obligations (17.5%)
$ 100 Hawaii, 1993 Ser CH ............................................ 6.00 % 11/01/10 $108,680
150 Honolulu City & County, Ser 1996 A (FGIC) ...................... 5.50 09/01/15 151,020
100 Kauai County, Refg 1992 Ser C (AMBAC) .......................... 5.15 08/01/00 103,059
100 Maui County, 1996 Ser A (MBIA) ................................. 5.75 06/01/13 103,577
100 Puerto Rico, Public Improvement Ser 1996 ....................... 5.50 07/01/17 98,781
- ----------- -----------
550 565,117
- ----------- -----------
Educational Facilities Revenue (4.6%)
150 University of Puerto Rico, Ser M (MBIA) ........................ 5.25 06/01/25 148,467
- ----------- -----------
Hospital Revenue (12.1%)
Hawaii Department of Budget & Finance,
200 Kapiolani Health Care Ser 1996 ................................ 6.25 07/01/21 207,504
100 Queens Health 1996 Ser A ...................................... 5.875 07/01/11 102,573
75 Puerto Rico Industrial, Tourist, Educational, Medical &
Environmental Control Facilities Financing Authority, Hospital
Auxilio Mutuo
1995 Ser A (MBIA) ............................................. 6.25 07/01/24 80,085
- ----------- -----------
375 390,162
- ----------- -----------
Industrial Development/Pollution Control Revenue (13.1%)
Hawaii Department of Budget & Finance,
100 Hawaiian Electric Co Ser 1995 A (AMT) (MBIA) .................. 6.60 01/01/25 109,456
200 Hawaiian Electric Co Ser 1996 A (AMT) (MBIA) .................. 6.20 05/01/26 209,834
100 Puerto Rico Ports Authority, American Airlines Inc 1996 Ser A
(AMT) ......................................................... 6.25 06/01/26 102,473
- ----------- -----------
400 421,763
- ----------- -----------
Mortgage Revenue -Multi-Family (7.1%)
Hawaii Housing Finance & Development Corporation,
100 Affordable Rental 1995 Ser A .................................. 6.10 07/01/30 101,081
125 University of Hawaii Faculty Ser 1995 (AMBAC) ................. 5.65 10/01/16 127,077
- ----------- -----------
225 228,158
- ----------- -----------
Mortgage Revenue -Single Family (10.7%)
300 Hawaii Housing Finance & Development Corporation, Purchase
1994 Ser B (MBIA) ............................................. 5.90 07/01/27 305,031
40 Puerto Rico Housing Bank & Finance Agency, GNMA/FNMA
Collateralized Portfolio I (AMT) .............................. 6.10 10/01/15 40,826
- ----------- -----------
340 345,857
- ----------- -----------
Transportation Facilities Revenue (16.5%)
Hawaii,
275 Airports Third Refg Ser of 1994 (AMT) (AMBAC) ................. 5.75 07/01/09 284,614
150 Highway Ser 1996 .............................................. 5.25 07/01/16 147,116
100 Puerto Rico Highway & Transportation Authority, Refg Ser V ..... 5.75 07/01/18 100,041
- ----------- -----------
525 531,771
- ----------- -----------
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER HAWAII MUNICIPAL TRUST
PORTFOLIO OF INVESTMENTS November 30, 1996, continued
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------
Water & Sewer Revenue (9.2%)
$ 200 Honolulu Board of Water Supply, Ser 1996 ....................... 5.80% 07/01/16 $ 204,908
100 Puerto Rico Aqueduct & Sewer Authority, Refg Ser 1995 .......... 5.00 07/01/19 92,720
- ----------- -----------
300 297,628
- ----------- -----------
Other Revenue (3.1%)
100 Puerto Rico Industrial, Tourist, Educational, Medical &
Environmental Control Facilities Financing Authority, Teachers
Retirement 1996 Ser B ......................................... 5.50 07/01/16 100,420
- ----------- -----------
$2,965 TOTAL HAWAII TAX-EXEMPT MUNICIPAL BONDS (Identified Cost $2,938,569) (a) . 93.9% 3,029,343
===========
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES .......................... 6.1 195,642
---------- -----------
NET ASSETS .............................................................. 100.0% $3,224,985
========== ===========
</TABLE>
- -------------------
AMT Alternative Minimum Tax.
+ Puerto Rico issues represent 23.7% of net assets.
(a) The aggregate cost for federal income tax purposes approximates
identified cost. The aggregate gross and net unrealized
appreciation is $90,774.
Bond Insurance:
- ---------------
AMBAC AMBAC Indemnity Corporation.
FGIC Financial Guaranty Insurance Company.
MBIA Municipal Bond Investors Assurance Corporation.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER HAWAII MUNICIPAL TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1996
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $2,938,569) ......................... $3,029,343
Cash .................................................. 132,971
Interest receivable ................................... 64,671
Deferred organizational expenses ...................... 42,505
Receivable from affiliate ............................. 30,790
------------
TOTAL ASSETS ........................................ 3,300,280
------------
LIABILITIES:
Payable for:
Dividends to shareholders ............................ 1,347
Plan of distribution fee ............................. 522
Organizational expenses ............................... 42,539
Accrued expenses and other payables ................... 30,887
------------
TOTAL LIABILITIES ................................... 75,295
------------
NET ASSETS:
Paid-in-capital ....................................... 3,151,505
Net unrealized appreciation ........................... 90,774
Accumulated undistributed net investment income ...... 919
Accumulated net realized loss ......................... (18,213)
------------
NET ASSETS .......................................... $3,224,985
============
NET ASSET VALUE PER SHARE,
324,125 shares outstanding (unlimited shares
authorized
of $.01 par value) ................................... $9.95
=====
MAXIMUM OFFERING PRICE PER SHARE,
(net asset value plus 3.09% of net asset value)* .... $10.26
======
</TABLE>
- -------------------
* On sales of $100,000 or more, the offering price is reduced.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER HAWAII MUNICIPAL TRUST
FINANCIAL STATEMENTS, continued
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED NOVEMBER 30, 1996
<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME .......................... $ 125,108
-----------
EXPENSES
Professional fees ........................ 58,357
Shareholder reports and notices .......... 32,587
Organizational expenses .................. 12,027
Investment management fee ................ 8,265
Plan of distribution fee ................. 4,594
Registration fees ........................ 3,628
Transfer agent fees and expenses ........ 2,487
Custodian fees ........................... 670
Other .................................... 4,506
-----------
TOTAL EXPENSES BEFORE EXPENSE OFFSET AND
AMOUNTS WAIVED/ASSUMED ................ 127,121
LESS: AMOUNTS WAIVED/ASSUMED .......... (121,862)
LESS: EXPENSE OFFSET .................. (665)
-----------
TOTAL EXPENSES AFTER EXPENSE OFFSET AND
AMOUNTS WAIVED/ASSUMED ................ 4,594
-----------
NET INVESTMENT INCOME .................. 120,514
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized loss ........................ (18,128)
Net change in unrealized appreciation ... 55,522
-----------
NET GAIN ............................... 37,394
-----------
NET INCREASE ............................. $ 157,908
===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER HAWAII MUNICIPAL TRUST
FINANCIAL STATEMENTS, continued
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR JUNE 16, 1995*
ENDED THROUGH
NOVEMBER 30, 1996 NOVEMBER 30, 1995
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income ................................. $ 120,514 $ 22,031
Net realized gain (loss) .............................. (18,128) 385
Net change in unrealized appreciation ................. 55,522 35,252
----------------- ------------------
NET INCREASE ........................................ 157,908 57,668
Dividends from net investment income .................. (120,065) (22,031)
Net increase from transactions in shares of beneficial
interest ............................................. 1,676,974 1,374,524
----------------- ------------------
NET INCREASE ........................................ 1,714,817 1,410,161
NET ASSETS:
Beginning of period ................................... 1,510,168 100,007
----------------- ------------------
END OF PERIOD
(Including undistributed net investment income of
$919 and $0, respectively) .......................... $3,224,985 $1,510,168
================= ==================
</TABLE>
- -------------------
* Commencement of operations.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER HAWAII MUNICIPAL TRUST
NOTES TO FINANCIAL STATEMENTS November 30, 1996
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 had
no operations other than those relating to organizational matters and the
issuance of 10,310 shares of beneficial interest for $100,007 to Dean Witter
InterCapital Inc. (the "Investment Manager") to effect the Fund's initial
capitalization. The Fund 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>
DEAN WITTER HAWAII MUNICIPAL TRUST
NOTES TO FINANCIAL STATEMENTS November 30, 1996, 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 -- 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
$17,495. 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 average 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 (except
brokerage and 12b-1 fees) and waive the compensation provided for in its
Investment Management Agreement until such time as the Fund has $50 million of
net assets or until June 30, 1997, whichever occurs first.
<PAGE>
DEAN WITTER HAWAII MUNICIPAL TRUST
NOTES TO FINANCIAL STATEMENTS November 30, 1996, 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 Distributor bears the expense of all promotional and
distribution related activities on behalf of the Fund, except for expenses that
the Trustees determine to reimburse, as described below. The following
activities and services may be provided by the Distributor, Dean Witter
Reynolds Inc. ("DWR"), an affiliate of the Investment Manager and Distributor,
its affiliates and other dealers who have entered into selected dealer
agreements with the Distributor under the Plan: (1) compensation to, and
expenses of, account executives of DWR, other employees and selected
broker-dealers, including overhead and telephone expenses; (2) sales incentives
and bonuses to sales representatives and to marketing personnel in connection
with promoting sales of the Fund's shares; (3) expenses incurred in connection
with promoting sales of the Fund's shares; (4) preparation, printing and
distributing sales literature; and (5) providing advertising and promotional
activities, including direct mail solicitation and television, radio,
newspaper, magazine and other media advertisements.
The Fund is authorized to reimburse the Distributor for specific expenses the
Distributor incurs or plans to incur in promoting the distribution of the
Fund's shares. The amount of each monthly reimbursement payment may in no event
exceed an amount equal to a payment at the annual rate of 0.20% 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 year ended
November 30, 1996, the distribution fee was accrued at the annual rate of
0.19%.
The Distributor has informed the Fund that for the year ended November 30,
1996, it received approximately $58,000 in commissions from the sale of shares
of the Fund's beneficial interest. Such commissions are deducted from the
proceeds of sales of beneficial interest 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 year ended November 30, 1996
aggregated $2,727,943 and $1,126,939 respectively.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At November 30, 1996, the Fund had
transfer agent fees and expenses payable of approximately $200.
<PAGE>
DEAN WITTER HAWAII MUNICIPAL TRUST
NOTES TO FINANCIAL STATEMENTS November 30, 1996, continued
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR JUNE 16, 1995*
ENDED THROUGH
NOVEMBER 30, 1996 NOVEMBER 30, 1995
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold ...................... 221,179 $2,156,449 141,805 $1,371,598
Reinvestment of dividends 7,541 73,494 1,510 14,596
---------- ------------ ---------- ------------
228,720 2,229,943 143,315 1,386,194
Repurchased ............... (57,016) (552,969) (1,204) (11,670)
---------- ------------ ---------- ------------
Net increase .............. 171,704 $1,676,974 142,111 $1,374,524
========== ============ ========== ============
</TABLE>
- -------------------
* Commencement of operations.
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>
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 YEAR JUNE 16, 1995*
ENDED THROUGH
NOVEMBER 30, 1996 NOVEMBER 30, 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ........................... $ 9.91 $ 9.70
----------------- -----------------
Net investment income .......................................... 0.50 0.19
Net realized and unrealized gain ............................... 0.04 0.21
----------------- -----------------
Total from investment operations ............................... 0.54 0.40
Less dividends from net investment income ...................... (0.50) (0.19)
----------------- -----------------
Net asset value, end of period ................................. $ 9.95 $ 9.91
================= =================
TOTAL INVESTMENT RETURN+ ...................................... 5.64% 4.21%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses before expense offset and after amounts waived/assumed 0.19%(4) 0.20%(2)(3)
Net investment income .......................................... 5.09%(4) 4.69%(2)(3)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands ........................ $3,225 $1,510
Portfolio turnover rate ........................................ 51% 14%(1)
</TABLE>
- -------------------
* Commencement of operations.
+ Does not reflect the deduction of sales load. 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, after
application of the Fund's state expense limitation, would have been
2.70% and 2.19%, respectively, which reflect the effect of expense
offsets of 0.10%.
(4) If the Investment Manager had not assumed expenses and waived the
management fee, the expense and net investment income ratios, after
application of the Fund's state expense limitation, would have been
2.69% and 2.59%, respectively, which reflect the effect of expense
offsets of 0.03%.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER HAWAII MUNICIPAL TRUST
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND TRUSTEES
OF DEAN WITTER HAWAII MUNICIPAL TRUST
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 Hawaii Municipal Trust
(the "Fund") at November 30, 1996, 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 June 16, 1995 (commencement of
operations) through November 30, 1995, 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 November 30, 1996 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
January 10, 1997
1996 FEDERAL TAX NOTICE (unaudited)
During the year ended November 30, 1996, the Fund paid to shareholders
$0.50 per share from net investment income. All of the Fund's dividends
from net investment income were exempt interest dividends, excludable from
gross income for Federal income tax purposes.
<PAGE>
(This page has been left blank intentionally.)
<PAGE>
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Sheldon Curtis
Vice President, Secretary and General Counsel
James F. Willison
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Dean Witter Trust Company
Haborside 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
HAWAII MUNICIPAL
TRUST
Annual Report
November 30, 1996
