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<IMS-DOCUMENT>0000912057-94-004312.txt : 19941227
<IMS-HEADER>0000912057-94-004312.hdr.sgml : 19941227
ACCESSION NUMBER: 0000912057-94-004312
CONFORMED SUBMISSION TYPE: N-30D
PUBLIC DOCUMENT COUNT: 1
CONFORMED PERIOD OF REPORT: 19941031
FILED AS OF DATE: 19941223
SROS: NONE
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: WITTER DEAN WORLD WIDE INCOME TRUST
CENTRAL INDEX KEY: 0000844936
STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000]
STATE OF INCORPORATION: MA
FISCAL YEAR END: 1031
FILING VALUES:
FORM TYPE: N-30D
SEC ACT: 1940 Act
SEC FILE NUMBER: 811-05744
FILM NUMBER: 94566215
BUSINESS ADDRESS:
STREET 1: TWO WORLD TRADE CENTER
CITY: NEW YORK
STATE: NY
ZIP: 10048
BUSINESS PHONE: 2123922550
MAIL ADDRESS:
STREET 2: TWO WORLD TRADE CENTER
CITY: NEW YORK
STATE: NY
ZIP: 10048
</IMS-HEADER>
<DOCUMENT>
<TYPE>N-30D
<SEQUENCE>1
<DESCRIPTION>FORM N-30D
<TEXT>
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
Two World Trade Center
New York, New York 10048
DEAR SHAREHOLDER:
- --------------------------------------------------------------------------------
During the fiscal year ended October 31, 1994, global bond yields rose
substantially reaching their highest levels in two years. In the United States,
the Federal Reserve Board, anticipating concerns over higher inflation and
strong economic growth, aggressively tightened monetary policy by raising short-
term interest rates. Since February, the Federal Reserve Board has raised the
federal-funds rate, the interest rate banks charge one another for overnight
loans, four times, from 3.00 percent to 4.75 percent. Additionally, the Federal
Reserve Board raised the discount rate, the interest rate the Federal Reserve
charges member banks for loans, from 3.00 percent to 4.00 percent. (Following
the end of the reporting period, the Federal Reserve Board raised the
federal-funds rate and discount rate to 5.50 percent and 4.50 percent,
respectively.) As a result of the Federal Reserve's monetary policy, the yield
on the ten-year U.S. Treasury bond rose by more than 230 basis points (2.30
percent) during the reporting period.
Interest rates in the global bond markets also rose during the reporting
period, partly in sympathy with the U.S., as well as to improving economic
fundamentals in many countries. In Germany, yields on ten-year bonds rose by
approximately 225 basis points (2.25 percent); while in Australia, yields on
ten-year bonds rose by approximately 415 basis points (4.15 percent).
Concurrently, the U.S. dollar broadly
declined against most major currencies,
depreciating by about 11.75 percent
against the Deutschemark, 11 percent
against the Japanese yen, and 11.7
percent against the Australian dollar.
Under these adverse market
conditions, Dean Witter World Wide Income
Trust's total return was -3.99 percent
for the 12-month period ended October 31,
1994 (not reflecting a deduction for the
applicable sales charge). This compares
to the total return of -4.65 percent for
the average general world income fund as
reported by Lipper Analytical Services,
Inc. and a total return of 4.85 percent
for the Lehman Brothers Mutual Fund
Global Intermediate Bond Index (the
Index). Unlike the Fund, the Index is an
unmanaged, unhedged index of global
securities with maturities of 1 to 10
years issued in the U.S., Japan, Europe,
Scandinavia, Canada, Australia and New
Zealand.
As of October 31, 1994, the Fund's
net assets exceeded $179 million. During
the fiscal year, the Fund's distributions
totaled $0.47 per share. The accompanying
chart illustrates the growth of a $10,000
investment in the Fund from inception
(March 30, 1989) through the recently
concluded fiscal year versus the
performance of a similar investment in
the Lehman Brothers Mutual Fund Global
Intermediate Bond Index.
<PAGE>
INVESTMENT STRATEGY
The Fund's strategy in this market environment has been to reduce the
average maturity of its portfolio from approximately 5.70 years to 2.87 years,
in order to minimize the negative effect of further interest rate hikes both
here and abroad. During the period, the Fund decreased its investments in
European bonds from 65.5 percent of portfolio assets to approximately 28.0
percent of portfolio assets, while increasing its exposure to short-term debt
instruments in the U.S. and the dollar-bloc countries (Canada, Australia and New
Zealand) in order to take advantage of the higher yields that are available in
those markets and thus enhance the total return potential of the Fund. As of
October 31, 1994, the Fund's assets were invested primarily in three regions,
Europe (27 percent), the U.S. (40 percent) and the dollar-bloc countries of
Canada (13 percent), Australia (10 percent) and New Zealand (10 percent).
Positions in Europe were only partially hedged, while positions in the
dollar-bloc nations were left unhedged. This strategy was designed to minimize
the negative effects of rising interest rates while simultaneously allowing the
portfolio to benefit from the rising values of foreign currencies. At the end of
the reporting period, 97 percent of the Fund's investments were securities
issued by governments of major countries and top-rated banks.
LOOKING AHEAD
Looking ahead, further increases in interest rates in the near term remain a
possibility as many of the global economies exhibit signs of strength. With this
in mind, the Fund will continue its investment strategy of diversification in
different major global markets to achieve high current income, as well as its
selective currency risk hedging to minimize the impact of currency fluctuations
on the Fund.
We appreciate your support of Dean Witter World Wide Income Trust and look
forward to continuing to serve your investment needs and objectives.
Very truly yours,
Charles A. Fiumefreddo
CHAIRMAN OF THE BOARD
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- --------------- ---------- --------- ---------------
<C> <S> <C> <C> <C>
GOVERNMENT & CORPORATE BONDS (80.9%)
AUSTRALIA (10.3%)
GOVERNMENT OBLIGATIONS (10.3%)
Au$ 21,600 Queensland Treasury Corp. + ............................... 8.00 % 5/14/97 $ 15,528,125
4,500 Treasury Corp. of Victoria + .............................. 6.50 12/15/98 2,949,927
---------------
TOTAL AUSTRALIA............................................ 18,478,052
---------------
CANADA (10.3%)
GOVERNMENT OBLIGATION (10.3%)
Ca$ 25,000 Government of Canada Treasury Bond + ...................... 7.75 9/15/96 18,521,600
---------------
FINLAND (5.8%)
GOVERNMENT OBLIGATION (5.8%)
FMk 50,000 Government of Finland Treasury Bond + ..................... 6.50 9/15/96 10,501,815
---------------
IRELAND (2.6%)
GOVERNMENT OBLIGATION (2.6%)
IEP 2,850 Ireland Treasury Gilt + ................................... 9.00 7/30/96 4,634,153
---------------
NEW ZEALAND (10.1%)
GOVERNMENT OBLIGATIONS (10.1%)
NZ$ 24,600 Government of New Zealand Treasury Bond +.................. 8.00 11/15/95 15,039,237
5,000 Government of New Zealand Treasury Bond.................... 9.00 11/15/96 3,084,074
---------------
TOTAL NEW ZEALAND.......................................... 18,123,311
---------------
SPAIN (6.7%)
GOVERNMENT OBLIGATION (6.7%)
ESP 1,500,000 Government of Spain Treasury Bond + ....................... 10.55 11/30/96 11,985,674
---------------
UNITED KINGDOM (0.2%)
GOVERNMENT OBLIGATION (0.2%)
L 195 United Kingdom Treasury Gilt + ............................ 13.25 5/15/96 342,753
---------------
UNITED STATES (34.9%)
BANKING (2.7%)
US$ 5,000 Branch Banking & Trust..................................... 4.73 8/28/96 4,797,000
---------------
FINANCIAL SERVICES (2.8%)
5,000 International Lease Finance Corp........................... 7.83 11/14/96 5,058,450
---------------
GOVERNMENT OBLIGATIONS (29.4%)
20,000 United States Treasury Note................................ 7.125 10/15/98 19,859,375
15,000 United States Treasury Bond................................ 13.125 5/15/01 19,246,875
10,000 United States Treasury Bond................................ 14.25 2/15/02 13,650,000
---------------
52,756,250
---------------
TOTAL UNITED STATES............................................................... 62,611,700
---------------
TOTAL GOVERNMENT & CORPORATE BONDS
(IDENTIFIED COST $148,748,966).................................................... 145,199,058
---------------
<CAPTION>
SHORT-TERM INVESTMENTS (22.8%)
<C> <S> <C> <C> <C>
CANADA (A) (3.7%)
GOVERNMENT OBLIGATION (3.7%)
Ca$ 9,500 Canadian Treasury Bill..................................... 6.87 10/19/95 6,588,438
---------------
</TABLE>
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- -------------- IRELAND (A) (7.8%) ---------- --------- -------------
<C> <S> <C> <C> <C> <C>
GOVERNMENT OBLIGATIONS (7.8%)
IEP 3,153 Irish Government Exchequer Note...................... 7.24 % 9/ 7/95 $ 4,772,175
6,184 Irish Government Exchequer Note...................... 7.375 10/ 6/95 9,341,785
-------------
TOTAL IRELAND............................................................... 14,113,960
-------------
PORTUGAL (5.0%)
BANKING - INTERNATIONAL (5.0%)
PTE 1,384,704 Chase Manhattan Bank Time Deposit(c)................. 9.375 11/21/94 8,968,290
-------------
UNITED STATES (A) (6.3%)
U.S. GOVERNMENT AGENCIES & OBLIGATIONS (6.3%)
US$ 1,500 Student Loan Market Association...................... 4.60 11/ 1/94 1,500,000
10,000 United States Treasury Bill.......................... 5.095 2/ 2/95 9,870,317
-------------
TOTAL UNITED STATES......................................................... 11,370,317
-------------
TOTAL SHORT-TERM INVESTMENTS (IDENTIFIED COST $40,554,391).................. 41,041,005
-------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS (IDENTIFIED COST $189,303,357)(B)............ 103.7% 186,240,063
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS................. (3.7) (6,677,377)
---------- -------------
NET ASSETS..................................................... 100.0% $ 179,562,686
---------- -------------
---------- -------------
<FN>
- ----------------
+ SOME OR ALL OF THESE SECURITIES ARE SEGREGATED IN CONNECTION WITH OPEN
FORWARD FOREIGN CURRENCY CONTRACTS.
(A) SECURITIES WERE PURCHASED ON A DISCOUNT BASIS. THE INTEREST SHOWN HAS BEEN
ADJUSTED TO REFLECT A BOND EQUIVALENT YIELD. THE BOND EQUIVALENT YIELD FOR
FOREIGN SECURITIES DOES NOT REFLECT THE EFFECT OF EXCHANGE RATES.
(B) THE AGGREGATE COST FOR FEDERAL INCOME TAX PURPOSES IS $189,303,357; THE
AGGREGATE GROSS UNREALIZED APPRECIATION IS $3,120,890 AND THE AGGREGATE
GROSS UNREALIZED DEPRECIATION IS $6,184,184, RESULTING IN NET UNREALIZED
DEPRECIATION OF $3,063,294.
(C) SUBJECT TO WITHDRAWAL RESTRICTIONS UNTIL MATURITY.
</TABLE>
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT OCTOBER 31, 1994:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS IN EXCHANGE DELIVERY APPRECIATION/
TO DELIVER FOR DATE (DEPRECIATION)
------------ ----------------- --------- -------------
<S> <C> <C> <C> <C>
Ca$ 20,238,055 US$ 14,633,445 2/10/95 $ (393,325)
DEM 14,058,000 US$ 9,023,686 9/ 6/95 (358,698)
US$ 14,711,257 Ca$ 20,238,055 2/10/95 315,514
US$ 4,932,020 Au$ 6,729,000 9/21/95 (11,776)
-------------
Net unrealized depreciation................... $(448,285)
-------------
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investments in securities, at value
(identified cost $189,303,357) (Note
1)....................................... $ 186,240,063
Unrealized appreciation on open forward
foreign currency contracts (Note 1)...... 315,514
Cash (including $1,362,447 in foreign
currency)................................ 1,407,369
Receivable for:
Interest................................ 4,290,717
Compensated forward foreign currency
contracts (Note 1)..................... 974,768
Shares of beneficial interest sold...... 20,000
Prepaid expenses and other assets......... 5,622
-------------
TOTAL ASSETS........................ 193,254,053
-------------
LIABILITIES:
Unrealized depreciation on open forward
foreign currency contracts (Note 1)...... 763,799
Payable for:
Investments purchased................... 9,869,154
Compensated forward foreign currency
contracts (Note 1)..................... 2,341,190
Shares of beneficial interest
repurchased............................ 259,854
Plan of distribution fee (Note 3)....... 131,861
Investment management fee (Note 2)...... 116,348
Accrued expenses and other payables (Note
4)....................................... 209,161
-------------
TOTAL LIABILITIES................... 13,691,367
-------------
NET ASSETS:
Paid-in-capital........................... 193,188,785
Accumulated net realized loss............. (9,697,493)
Net unrealized depreciation............... (3,371,759)
Distributions in excess of net investment
income................................... (556,847)
-------------
NET ASSETS.......................... $ 179,562,686
-------------
-------------
NET ASSET VALUE PER SHARE, 20,999,419
shares outstanding (unlimited authorized
shares of $.01 par value)................ $8.55
-------------
-------------
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1994
<TABLE>
<S> <C>
INVESTMENT INCOME:
INTEREST INCOME (net of $88,128 in
foreign withholding tax)............... $ 17,440,662
------------
EXPENSES
Plan of distribution fee (Note 3)..... 1,905,466
Investment management fee (Note 2).... 1,674,474
Transfer agent fees and expenses (Note
4)................................... 279,255
Custodian fees........................ 150,331
Professional fees..................... 101,190
Shareholder reports and notices....... 52,231
Registration fees..................... 43,762
Trustees' fees and expenses (Note
4)................................... 32,091
Organizational expenses (Note 1)...... 10,841
Other................................. 30,224
------------
TOTAL EXPENSES...................... 4,279,865
------------
NET INVESTMENT INCOME............. 13,160,797
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) (Note 1):
Net realized loss on:
Investments........................... (13,535,951)
Futures contracts..................... (5,707,013)
Foreign exchange transactions......... (4,401,991)
------------
(23,644,955)
------------
Net change in unrealized appreciation
(depreciation) on:
Investments........................... (2,056,274)
Translation of open forward foreign
currency contracts and other assets
and liabilities denominated in
foreign currencies................... 1,915,576
------------
(140,698)
------------
NET LOSS............................ (23,785,653)
------------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS....... $(10,624,856)
------------
------------
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEAR ENDED OCTOBER 31,
--------------------------------------
1994 1993
------------------ ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income................................................. $ 13,160,797 $ 18,689,959
Net realized gain (loss).............................................. (23,644,955) 7,562,927
Net change in unrealized appreciation (depreciation).................. (140,698) 502,607
------------------ ------------------
Net increase (decrease) in net assets resulting from operations..... (10,624,856) 26,755,493
Dividends and distributions to shareholders from:
Net investment income................................................. (5,584,978) (18,190,961)
Paid-in-capital....................................................... (6,229,873) --
------------------ ------------------
(11,814,851) (18,190,961)
------------------ ------------------
Net decrease from transactions in shares of beneficial interest (Note
5)..................................................................... (73,316,664) (57,430,882)
------------------ ------------------
Total decrease...................................................... (95,756,371) (48,866,350)
NET ASSETS:
Beginning of period..................................................... 275,319,057 324,185,407
------------------ ------------------
END OF PERIOD (including distributions in excess of net investment
income of $556,847 and undistributed net investment income of
$5,814,796, respectively).............................................. $ 179,562,686 $ 275,319,057
------------------ ------------------
------------------ ------------------
</TABLE>
<PAGE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. ORGANIZATION AND ACCOUNTING POLICIES -- Dean Witter World Wide Income 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 was organized as a Massachusetts business trust on October 14, 1988 and
commenced operations on March 30, 1989.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) an equity security listed or traded on
the New York or American Stock Exchange or other domestic or foreign stock
exchange is valued at its latest sale price on that exchange prior to the
time when assets are valued (if there were no sales that day, the security
is valued at the latest bid price). In cases where securities are traded on
more than one exchange, the securities are valued on the exchange designated
as the primary market by the Trustees; (2) listed options are valued at the
latest sale price on the exchange on which they are listed unless no sales
of such options have taken place that day, in which case they will be valued
at the mean between their latest bid and asked price; (3) futures contracts
are valued at the latest sale price on the commodities exchange on which
they trade unless the Trustees determine that such price does not reflect
their market value, in which case it will be valued at their fair value as
determined in good faith under procedures established by and under the
general supervision of the Trustees; (4) 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; (5) when
market quotations are not readily available, including circumstances under
which it is determined by the Investment Manager that sale or bid prices are
not reflective of a security's market value, portfolio securities are valued
at their fair value as determined in good faith under procedures established
by and under the general supervision of the Trustees (valuation of debt
securities for which market quotations are not readily available may be
based upon current market prices of securities which are comparable in
coupon, rating and maturity or an appropriate matrix utilizing similar
factors); and (6) short-term debt securities having a maturity date of more
than sixty days at the 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 on the identified cost
method. Discounts on securities purchased are amortized over the life of the
respective securities. The Fund does not amortize premiums on securities.
Interest income is accrued daily.
C. OPTIONS AND FUTURES -- (1) Written options: When the Fund writes a call
or put option, an amount equal to the premium received is included in the
Statement of Assets and Liabilities as a liability which is subsequently
marked-to-market to reflect the current market value of the option written.
If a written option either expires or the Fund enters into a closing
purchase transaction, the Fund realizes a gain or loss without regard to any
unrealized gain or loss on the underlying security or currency and the
liability related to such option is extinguished. If a written call option
is exercised, the Fund realizes a gain or loss from the sale of the
underlying security or currency and the proceeds from such sale are
increased by the premium originally received. If a put option which the Fund
has written is exercised, the amount of the premium originally received
reduces the cost of
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
the security which the Fund purchases upon exercise of the option; (2)
Purchased options: When the Fund purchases a call or put option, the premium
paid is recorded as an investment and is subsequently marked-to-market to
reflect the current market value. If a purchased option expires, the Fund
will realize a loss to the extent of the premium paid. If the Fund enters
into a closing sale transaction, a gain or loss is realized for the
difference between the proceeds from the sale and the cost of the option. If
a put option is exercised, the cost of the security sold upon exercise will
be increased by the premium originally paid. If a call option is exercised,
the cost of the security purchased upon exercise will be increased by the
premium originally paid; (3) Option on futures contracts: The Fund is
required to deposit U.S. Government securities as "initial margin" and
"variation margin", with respect to written call and put options on futures
contracts. If a written option expires, the Fund realizes a gain. If a
written call or put option is exercised, the premium received will decrease
or increase the unrealized loss or gain, respectively, on the future. If the
Fund enters into a closing purchase transaction, the Fund realizes a gain or
loss without regard to any unrealized gain or loss on the underlying futures
contract and the liability related to such option is extinguished; (4)
Futures contracts: A futures contract is an agreement between two parties to
buy and sell financial instruments at a set price on a future date. Upon
entering into such a contract, the Fund is required to pledge to the broker
cash or U.S. Government securities equal to the minimum initial margin
requirements of the applicable futures exchange. Pursuant to the contract,
the Fund agrees to receive from or pay to the broker an amount of cash equal
to the daily fluctuation in the value of the contract which is known as
variation margin. Such receipts or payments are recorded by the Fund as
unrealized gains or losses. Upon closing of the contract, the Fund realizes
a gain or loss equal to the difference between the value of the contract at
the time it was opened and the value at the time it was closed.
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 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 as a hedge against fluctuations in foreign
exchange rates. Forward contracts are valued daily at the appropriate
exchange rates. The resultant exchange gains and losses are included in the
Statement of Operations as unrealized gain/loss on foreign exchange
transactions. 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>
DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (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 -- Dean Witter InterCapital Inc. (the
"Investment Manager") paid the organizational expenses of the Fund in the
amount of approximately $132,000. The Fund has reimbursed the Investment
Manager for these expenses, exclusive of any amounts assumed by the
Investment Manager. 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. As of March 30, 1994, these expenses were fully
amortized.
2. INVESTMENT MANAGEMENT AGREEMENT -- Pursuant to an Investment Management
Agreement, the Fund pays its 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 $250 million; 0.60% to the portion of daily
net assets exceeding $250 million but not exceeding $500 million; 0.50% to the
portion of daily net assets exceeding $500 million but not exceeding $750
million; 0.40% to the portion of daily net assets exceeding $750 million but not
exceeding $1 billion; and 0.30% to the portion of daily net assets exceeding $1
billion.
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund's books and
records and furnishes, at its own expense, office space, facilities, equipment,
clerical, bookkeeping and certain legal services and pays the salaries of all
personnel, including officers of the Fund who are employees of the Investment
Manager. The Investment Manager also bears the cost of telephone services, heat,
light, power and other utilities provided to the Fund.
3. PLAN OF DISTRIBUTION -- Shares of the Fund are distributed by Dean Witter
Distributors Inc. (the "Distributor"), an affiliate of the Investment Manager.
The Fund has adopted a Plan of Distribution (the "Plan") pursuant to Rule 12b-1
under the Act pursuant to which the Fund pays the Distributor compensation,
accrued daily and payable monthly, at an annual rate of 0.85% of the lesser of:
(a) the average daily aggregate gross sales of the Fund's shares since the
Fund's inception (not including reinvestment of dividends or capital gains
distributions) less the average daily aggregate net asset value of the Fund's
shares redeemed since the Fund's inception upon which a contingent deferred
sales charge has been imposed or upon which such charge has been waived; or (b)
the Fund's average daily net assets. Amounts paid under the Plan are paid to the
Distributor to compensate it for the services provided and the expenses borne by
it and others in the distribution of the Fund's shares, including the payment of
commissions for sales of the Fund's shares and incentive compensation to and
expenses of the account
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
executives of Dean Witter Reynolds Inc., an affiliate of the Investment Manager
and Distributor, and other employees and selected broker-dealers who engage in
or support distribution of the Fund's shares or who service shareholder
accounts, including overhead and telephone expenses, printing and distribution
of prospectuses and reports used in connection with the offering of the Fund's
shares to other than current shareholders and preparation, printing and
distribution of sales literature and advertising materials. In addition, the
Distributor may be compensated under the Plan for its opportunity costs in
advancing such amounts, which compensation would be in the form of a carrying
charge on any unreimbursed expenses by the Distributor.
Provided that the Plan continues in effect, any cumulative expenses incurred
but not yet recovered may be recovered through future distribution fees from the
Fund and contingent deferred sales charges from the Fund's shareholders.
The Distributor has informed the Fund that for the year ended October 31,
1994, it received approximately $637,000 in contingent deferred sales charges
from certain redemptions of the Fund's shares. The Fund's 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 year ended October 31, 1994 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
-------------- --------------
<S> <C> <C>
Corporate Bonds....................................................... $ 9,960,900 $ 1,473,899
Foreign Government Obligations........................................ 295,302,970 408,805,287
U.S. Government Agencies and Obligations.............................. 128,897,445 174,579,209
</TABLE>
Transactions in written options were as follows:
<TABLE>
<CAPTION>
CURRENCY
AMOUNT PREMIUMS
----------------- -------------
<S> <C> <C>
Options written: outstanding at beginning of period................ -- --
Options written.................................................... DEM 20,000,000 $ 23,269
Options expired.................................................... (20,000,000) (23,269)
----------------- -------------
Options written: outstanding at end of period...................... DEM -- $ --
----------------- -------------
----------------- -------------
</TABLE>
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At October 31, 1994, the Fund had
transfer agent fees and expenses payable of approximately $42,000.
On April 1, 1991, the Fund established an unfunded noncontributory defined
benefit pension plan covering all independent Trustees of the Fund who will have
served as independent Trustees for at least five years at the time of
retirement. Benefits under this plan are based on years of service and
compensation during the last five years of service. Aggregate pension costs for
the year ended October 31, 1994, included in Trustees' fees and expenses in the
Statement of Operations, amounted to $9,406. At October 31, 1994, the Fund had
an accrued pension liability of $46,103 which is included in accrued expenses
and other payables in the Statement of Assets and Liabilities.
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
5. SHARES OF BENEFICIAL INTEREST -- Transactions in shares of beneficial
interest were as follows:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED OCTOBER 31,
--------------------------------------------------------
1994 1993
--------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------- ------------ -------------
<S> <C> <C> <C> <C>
Sold...................................... 1,700,869 $ 15,341,706 3,405,127 $ 31,563,475
Reinvestment of dividends................. 717,268 6,333,779 1,033,162 9,475,837
------------ ------------- ------------ -------------
2,418,137 21,675,485 4,438,289 41,039,312
Repurchased............................... (10,739,557) (94,992,149) (10,713,382) (98,470,194)
------------ ------------- ------------ -------------
Net decrease.............................. (8,321,420) $ (73,316,664) (6,275,093) $ (57,430,882)
------------ ------------- ------------ -------------
------------ ------------- ------------ -------------
</TABLE>
6. FEDERAL INCOME TAX STATUS -- At October 31, 1994, the Fund had net capital
loss carryovers of approximately $9,697,000 which will be available through
October 31, 2002 to offset future capital gains to the extent provided by
regulations. To the extent that these carryover losses are used to offset future
capital gains, it is probable that the gains so offset will not be distributed
to shareholders.
As of October 31, 1994, the Fund had temporary book/tax differences
primarily attributable to the mark-to-market of open forward foreign currency
exchange contracts and compensated forward foreign currency contracts and
permanent book/tax differences primarily attributable to foreign currency losses
and dividend redesignations. To reflect cumulative reclassifications arising
from permanent book/tax differences as of October 31, 1993, paid-in-capital was
charged $35,131,236, accumulated net realized loss was credited $30,220,998, and
distributions in excess of net investment income was credited $4,910,238. To
reflect reclassifications arising from permanent book/tax differences for the
year ended October 31, 1994, distributions in excess of net investment income
was charged and accumulated net realized loss was credited $13,947,462.
7. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK -- As of October 31, 1994,
the Fund had outstanding forward foreign currency contracts ("forward
contracts") as a hedge against changes in foreign exchange rates. Forward
contracts involve elements of market risk in excess of the amount reflected in
the Statement of Assets and Liabilities. The Fund bears the risk of an
unfavorable change in the foreign exchange rates underlying the forward
contracts. Risks may also arise upon entering into these contracts from the
potential inability of the counterparties to meet the terms of their contracts.
<PAGE>
DEAN WITTER WORLD WIDE INCOME 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 ENDED OCTOBER 31, MARCH 30, 1989*
----------------------------------------------------------- THROUGH
1994 1993 1992 1991 1990 OCTOBER 31, 1989
---------- --------- --------- ---------- --------- ----------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.............. $ 9.39 $ 9.11 $ 9.11 $10.38 $ 9.55 $10.00
---------- --------- --------- ---------- --------- ----------------
Net investment income............................. 0.55 0.59 0.62 0.82 0.95 0.49
Net realized and unrealized gain (loss)........... (0.92) 0.27 0.01 (0.99) 0.78 (0.45)
---------- --------- --------- ---------- --------- ----------------
Total from investment operations.................. (0.37) 0.86 0.63 (0.17) 1.73 0.04
---------- --------- --------- ---------- --------- ----------------
Less dividends and distributions from:
Net investment income........................... (0.22) (0.58) (0.63) (0.86) (0.90) (0.49)
Net realized gain on investments................ -- -- -- (0.24) -- --
Paid-in-capital................................. (0.25) -- -- -- -- --
---------- --------- --------- ---------- --------- ----------------
Total dividends and distributions................. (0.47) (0.58) (0.63) (1.10) (0.90) (0.49)
---------- --------- --------- ---------- --------- ----------------
Net asset value, end of period.................... $ 8.55 $ 9.39 $ 9.11 $ 9.11 $10.38 $ 9.55
---------- --------- --------- ---------- --------- ----------------
---------- --------- --------- ---------- --------- ----------------
TOTAL INVESTMENT RETURN+.......................... (3.99)% 9.72% 7.13% (1.75)% 19.22% 0.40%(1)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands).......... $179,563 $275,319 $324,185 $421,051 $462,709 $388,578
Ratios to average net assets:
Expenses........................................ 1.91% 1.87% 1.87% 1.76% 1.81% 1.90%(2)
Net investment income........................... 5.87% 6.39% 6.78% 8.45% 9.76% 9.10%(2)
Portfolio turnover rate........................... 229% 229% 214% 245% 109% 113%(1)
<FN>
- ----------------
* COMMENCEMENT OF OPERATIONS.
+ DOES NOT REFLECT THE DEDUCTION OF SALES LOAD.
(1) NOT ANNUALIZED.
(2) ANNUALIZED.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Trustees of Dean Witter World Wide Income 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 World Wide Income Trust
(the "Fund") at October 31, 1994, the results of its operations for the year
then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the five years in the
period then ended and for the period March 30, 1989 (commencement of operations)
through October 31, 1989, 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 owned at October 31, 1994 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
PRICE WATERHOUSE LLP
New York, New York
December 9, 1994
<PAGE>
DIRECTORS
Jack F. Bennett
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire DEAN WITTER
Dr. Manuel H. Johnson WORLD WIDE
Paul Kolton INCOME TRUST
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
Vinh Q. Tran
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Dean Witter Trust Company
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS [PHOTO]
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.
ANNUAL REPORT
OCTOBER 31, 1994
<PAGE>
DEAN WITTER WORLD WIDE INCOME TRUST
GROWTH OF $10,000
($ IN THOUSANDS)
<TABLE>
<S> <C> <C>
LEHMAN BROS. GLOBAL
TOTAL INTERMEDIATE BOND
INDEX
March 31, 1989 $10,000 $10,000
October 31, 1989 $10,040 $10,509
October 31, 1990 $11,969 $12,041
October 31, 1991 $11,759 $13,181
October 31, 1992 $12,598 $14,853
October 31, 1993 $13,822 $16,194
October 31, 1994 $13,185 (3) $16,981
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<S> <C> <C>
1 YEAR 5 YEARS LIFE OF FUND
-3.99 (1) 5.74 (1) 5.19 (1)
-8.54 (2) 5.45 (2) 5.07 (2)
</TABLE>
Fund Lehman (4)
----- -----
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 the deduction of the maximum applicable contingent
deferred sales charges (CDSC) (1 year-5%, 5 years-2%, since inception
1%). See the Fund's current prospectus for complete details on fees
and sales charges.
(3) Closing value after the deduction of a 1% CDSC, assuming a complete
redemption on October 31, 1994.
(4) The Lehman Brothers Global Intermediate Bond Index, includes local
currency-denominated sovereign debt of 19 countries with maturities
of 1 to 10 years. Unlike the Fund, the index does not include any
expenses, fees or charges.
</TEXT>
</DOCUMENT>
</IMS-DOCUMENT>
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