TCW DW MID CAP EQUITY TRUST, 485APOS, 1999-04-23

TCW DW MID CAP EQUITY TRUST
485APOS, 1999-04-23

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 23, 1999
REGISTRATION NOS.: 33-63685
811-7377

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM N-1A
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 [ ]
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. 7 [X]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 [ ]
AMENDMENT NO. 8 [X]
----------------
TCW/DW MID-CAP EQUITY TRUST
(A MASSACHUSETTS BUSINESS TRUST)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 392-1600

BARRY FINK, ESQ.
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(NAME AND ADDRESS OF AGENT FOR SERVICE)
----------------
COPY TO:

DAVID M. BUTOWSKY, ESQ.
GORDON ALTMAN BUTOWSKY
WEITZEN SHALOV & WEIN
114 WEST 47TH STREET
NEW YORK, NEW YORK 10036
----------------
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
As soon as practicable after this Post-Effective Amendment becomes effective.
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX)

immediately upon filing pursuant to paragraph (b)
----
on March 29, 1999 pursuant to paragraph (b)
----
60 days after filing pursuant to paragraph (a)
----
X on June 25, 1999 pursuant to paragraph (a) of rule 485.
----

AMENDING THE PROSPECTUS AND UPDATING FINANCIAL STATEMENTS
<PAGE>

MORGAN STANLEY DEAN WITTER MID-CAP EQUITY TRUST

CROSS-REFERENCE SHEET

FORM N-1A

<TABLE>
<CAPTION>
ITEM CAPTION
- ------------------ -------------------------------------------------------
PART A PROSPECTUS
<S> <C> <C>
1. .......... Cover Page; Back Cover
2. .......... Investment Objective; Principal Investment
Strategies, Principal Risks, Past Performance
3. .......... Fees and Expenses
4. .......... Investment Objective; Additional Investment
Strategy Information; Additional Risk Information
5. .......... Not Applicable
6. .......... Fund Management
7. .......... Pricing Fund Shares; Buying and Selling Shares; How to
Exchange Shares; How to Sell Shares; Distributions;
Tax Consequences
8. .......... Share Class Arrangments
9. .......... Financial Highlights
</TABLE>

PART B STATEMENT OF ADDITIONAL INFORMATION

Information required to be included in Part B is set forth under the
appropriate caption in Part B of this Registration Statement.

PART C

Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.
<PAGE>

PROSPECTUS - JUNE 25, 1999

MORGAN STANLEY DEAN WITTER

MID-CAP EQUITY TRUST

A MUTUAL FUND THAT SEEKS LONG-TERM CAPITAL APPRECIATION

The Securities and Exchange Commission has not approved or disapproved these
securities or passed
upon the adequacy of this Prospectus. Any representation to the contrary is a
criminal offense.

<PAGE>

CONTENTS
<TABLE>
<CAPTION>

<S> <C> <C>
The Fund Investment Objective ..................................................... 1

Principal Investment Strategies ........................................... 1

Principal Risks .......................................................... 1

Past Performance .......................................................... 2

Fees and Expenses ........................................................ 3

Additional Investment Strategy Information ................................. 4

Additional Risk Information ............................................... 4

Fund Management ........................................................... 6

Shareholder Information Pricing Fund Shares ........................................................ 7

How to Buy Shares .......................................................... 7

How to Exchange Shares ..................................................... 9

How to Sell Shares ........................................................ 10

Distributions ............................................................. 12

Tax Consequences .......................................................... 12
Share Class Arrangements .................................................. 13

Financial Highlights .......................................................................... 20
</TABLE>

This Prospectus contains important information about the Fund. Please read it
carefully and keep it for future reference.

FUND CATEGORY

[X] GROWTH

[ ] Growth and Income

[ ] Income

[ ] Money Market

<PAGE>

THE FUND

[GRAPHIC OMITTED]

INVESTMENT OBJECTIVE
- --------------------------------------------------
Morgan Stanley Dean Witter Mid-Cap Equity Trust is a mutual fund that seeks
long-term capital appreciation. There is no guarantee that the Fund will
achieve this objective.

[GRAPHIC OMITTED]

PRINCIPAL INVESTMENT STRATEGIES
- ----------------------------------------------------------------

The Fund will normally invest at least 65% of its assets in a portfolio of
common stocks and other equity securities of medium-sized companies with market
capitalizations, at the time of purchase, within the capitalization range of the
companies comprising the Standard & Poor's Mid-Cap 400 Index, which
capitalization range is approximately between $192 million and $11.7 billion as
of February 26, 1999. The Fund's "Sub-Advisor," TCW Funds Management, Inc.,
invests in companies that it believes exhibit superior earnings growth prospects
and attractive stock market valuations. The Sub-Advisor uses its proprietary
research in pursuing a "bottom-up" investment philosophy, which emphasizes
individual company selection. Quantitative and qualitative standards also will
be used to screen more than one thousand companies to provide a list of
potential investment securities. The Sub-Advisor then subjects the list of
securities to a fundamental analysis using a variety of criteria.

(sidebar)
CAPITAL APPRECIATION
An investment objective having the goal of selecting securities with the
potential to rise in value rather than pay out income.
(/sidebar)

Common stock is a share ownership or equity interest in a corporation. It may
or may not pay dividends, as some companies reinvest all of their profits back
into their businesses, while others pay out some of their profits to
shareholders as dividends.

In pursuing the Fund's investment objective, the Sub-Advisor has considerable
leeway in deciding which investments it buys, holds or sells on a day-to-day
basis -- and which trading strategies it uses. For example, the Sub-Advisor in
its discretion may determine to use some permitted trading strategies while not
using others. In addition to U.S. common stocks, the Fund may make other
investments. For more information about the Fund's investments, see the
"Additional Investment Strategy Information" section.

[GRAPHIC OMITTED]

PRINCIPAL RISKS
- -------------------------------------------
The Fund's share price will fluctuate with changes in the market value of the
Fund's portfolio securities. When you sell Fund shares, they may be worth less
than what you paid for them and, accordingly, you can lose money investing in
this Fund.

A principal risk of investing in the Fund is associated with its common stock
investments of medium-sized companies. In general, stock values fluctuate in
response to activities specific to the company as well as general market,
economic and political conditions. Stock prices can fluctuate widely in
response to these factors.

Investing in securities of medium-sized companies may involve greater risk than
is customarily associated with investing in more established companies. Often,
medium-sized companies and the industries in which they are focused are still
evolving, and they are more sensitive to changing market conditions than larger
companies in more established industries. Their securities may be more volatile
and have returns that vary, sometimes significantly, from the overall stock
market.

Shares of the Fund are not bank deposits and are not guaranteed or insured by
any bank, governmental entity, or the FDIC.

<PAGE>

[GRAPHIC OMITTED]

PAST PERFORMANCE
- ----------------------------------------------
The bar chart and table below provide some indication of the Fund's performance
history. The Fund's past performance does not indicate how the Fund will
perform in the future.

ANNUAL TOTAL RETURNS -- CALENDAR YEARS

(sidebar)
ANNUAL TOTAL RETURNS
This chart shows how the performance of the Fund's Class B shares has varied
from year to year for the past two calendar years.
(/sidebar)

[GRAPHIC OMITTED]

The bar chart reflects the performance of Class B shares; the performance of
the other Classes will differ because the Classes have different ongoing fees.
The performance information in the bar chart does not reflect the deduction of
sales charges; if these amounts were reflected, returns would be less than
shown.

During the periods shown in the bar chart, the highest return for a calendar
quarter was 49.24% (quarter ended December 31, 1998) and the lowest return for
a calendar quarter was -21.17% (quarter ended March 31, 1997). Year-to-date
total return as of March 31, 1999 was ___%.

(sidebar)
AVERAGE ANNUAL
TOTAL RETURNS

This table compares the Fund's average annual returns with those of a broad
measure of market performance over time. The Fund's returns include the maximum
applicable sales charge for each Class and assume you sold your shares at the
end of each period.
(/sidebar)

AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED THE 1998 CALENDAR YEAR)

<TABLE>
<CAPTION>
LIFE OF FUND
PAST 1 YEAR (SINCE 2/27/96)
<S> <C> <C>
Class A 55.11% --
Class B1 57.71% 24.07%
Class C 61.53% --
Class D 64.16% --
S&P 4002 19.11% 22.76%
Lipper Mid-Cap Funds Index3 13.92% 15.07%
</TABLE>

1 Prior to July 28, 1997, the Fund only issued Class B shares.

2 The Standard & Poor's (Registered Trademark) Mid-Cap 400 Index, a widely
recognized, unmanaged index of common stock prices. The performance of the
Index does not include expenses or fees, and should not be considered an
investment.

3 The Lipper Mid-Cap Funds Index is an equally-weighted performance index of
mid-cap funds. The Index is unmanaged and should not be considered an
investment.

<PAGE>

[GRAPHIC OMITTED]

FEES AND EXPENSES
- -----------------------------------------------
The Fund offers four Classes of shares: Classes A, B, C and D. Each Class has a
different combination of fees, expenses and other features. The table below
briefly describes the fees and expenses that you may pay if you buy and hold
shares of the Fund. The Fund does not charge account or exchange fees. See the
"Share Class Arrangements" section for further fee and expense information.

(sidebar)
SHAREHOLDER FEES
These fees are paid
directly from your
investment.

ANNUAL FUND
OPERATING EXPENSES
These expenses are
deducted from the
Fund's assets and are
based on expenses paid
for the fiscal year ended
November 30, 1998.*
(/sidebar)

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS D
<S> <C> <C> <C> <C>
SHAREHOLDER FEES
Maximum sales charge (load) imposed on
5.25%(1) None None None
purchases (as a percentage of offering price)
Maximum deferred sales charge (load) (as a
percentage based on the lesser of the offering None(2) 5.00%(3) 1.00%(4) None
price or net asset value at redemption)
ANNUAL FUND OPERATING EXPENSES
Management and advisory fees* 0.75% 0.75% 0.75% 0.75%
Distribution and service (12b-1) fees 0.25% 0.90% 1.00% None
Other expenses 0.30% 0.30% 0.30% 0.30%
Total annual Fund operating expenses 1.30% 1.95% 2.05% 1.05%
</TABLE>

1 Reduced for purchases of $25,000 and over.

2 Investments that are not subject to any sales charge at the time of
purchase are subject to a contingent deferred sales charge ("CDSC") of
1.00% that will be imposed on sales made within one year after purchase,
except for certain specific circumstances.

3 The CDSC is scaled down to 1.00% during the sixth year, reaching zero
thereafter. See "Share Class Arrangements" for a complete discussion of the
CDSC.

4 Only applicable to sales made within one year after purchase.

* Restated to reflect a reduction in the management fee by 0.25% of the
average daily net assets which took effect when the Fund's management
arrangements were changed effective June 25, 1999.

EXAMPLE
This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.

The example assumes that you invest $10,000 in the Fund, your investment has a
5% return each year, and the Fund's operating expenses remain the same.
Although your actual costs may be higher or lower, the tables below show your
costs at the end of each period based on these assumptions depending upon
whether or not you sell your shares at the end of each period.

<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
IF YOU SOLD YOUR SHARES: IF YOU HELD YOUR SHARES:
1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
CLASS A $650 $915 $1,200 $2,010 $650 $915 $1,200 $2,010
CLASS B $698 $912 $1,252 $2,275 $198 $612 $1,052 $2,275
CLASS C $308 $643 $1,103 $2,379 $208 $643 $1,103 $2,379
CLASS D $107 $334 $ 579 $1,283 $107 $334 $ 579 $1,283

</TABLE>

<PAGE>

[GRAPHIC OMITTED]

ADDITIONAL INVESTMENT STRATEGY INFORMATION
- -------------------------------------------------------------------------------

The Fund seeks long-term capital appreciation. There is no guarantee that the
Fund will achieve this objective.

This section provides additional information concerning the Fund's principal
investment strategies.

COMMON STOCKS. As discussed in the "Principal Investment Strategies" section,
the Fund will normally invest at least 65% of its assets in a portfolio of
common stocks of medium-sized companies.

OTHER INVESTMENTS. The Fund also may invest up to 35% of its assets in equity
securities of small or large companies and investment grade fixed-income
securities. It also may invest up to 25% of its assets in foreign equity
securities (including depository receipts).

DEFENSIVE INVESTING. The Fund may take temporary "defensive" positions in
attempting to respond to adverse market conditions. The Fund may invest any
amount of its assets in cash or money market instruments in a defensive posture
when the Sub-Advisor believes it is advisable to do so. Although taking a
defensive posture is designed to protect the Fund from an anticipated market
downturn, it could have the effect of reducing the benefit from any upswing in
the market or otherwise affect the Fund's ability to meet its investment
objective.

PORTFOLIO TURNOVER. The Fund may engage in active and frequent trading of
portfolio securities to achieve its principal investment strategies. The
portfolio turnover rate is not expected to exceed 150% annually under normal
circumstances. A high turnover rate will increase Fund brokerage costs and may
affect the Fund's performance. It also may increase the Fund's capital gains,
which are passed along to Fund shareholders as distributions. This, in turn,
may increase your tax liability as a Fund shareholder. See the sections on
"Distributions" and "Tax Consequences."

The percentage limitations relating to the composition of the Fund's portfolio
referenced in "Principal Investment Strategies" apply at the time the Fund
acquires an investment. Subsequent percentage changes that result from market
fluctuations or changes in assets will not require the Fund to sell any
portfolio security. The Fund may change its principal investment strategies
without shareholder approval; however, you would be notified of any changes.

[GRAPHIC OMITTED]

ADDITIONAL RISK INFORMATION
- -----------------------------------------------------------
As discussed in the "Principal Risks" section, a principal risk of investing in
the Fund is associated with its common stock investments, including the risks
associated with investments in securities of medium-sized companies. This
section provides additional information regarding the principal risks of
investing in the Fund.

SMALL COMPANIES. As with the Fund's investments in medium-sized companies, its
investments in the securities of small companies may involve greater risk than
is customarily associated with investing in more established companies. Small
companies in particular often have limited product lines, financial resources
and less experienced management. As a consequence, their securities may be more
volatile and have returns that vary, sometimes significantly, from the overall
stock market.

<PAGE>

FIXED-INCOME SECURITIES. Principal risks of investing in the Fund are
associated with its fixed-income investments. All fixed-income securities, such
as corporate debt, are subject to two types of risk: credit risk and interest
rate risk. Credit risk refers to the possibility that the issuer of a security
will be unable to make interest payments and/or repay the principal on its
debt.

Interest rate risk refers to fluctuations in the value of a fixed-income
security resulting from changes in the general level of interest rates. When
the general level of interest rates goes up, the price of most fixed-income
securities goes down. When the general level of interest rates goes down, the
price of most fixed-income securities goes up.

FOREIGN SECURITIES. The Fund's investments in foreign securities (including
depository receipts) involve risks that are in addition to the risks associated
with domestic securities. One additional risk is currency risk. While the price
of Fund shares is quoted in U.S. dollars, the Fund generally converts U.S.
dollars to a foreign market's local currency to purchase a security in that
market. If the value of that local currency falls relative to the U.S. dollar,
the U.S. dollar value of the foreign security will decrease. This is true even
if the foreign security's local price remains unchanged.

Foreign securities also have risks related to economic and political
developments abroad, including expropriations, confiscatory taxation, exchange
control regulation, limitations on the use or transfer of Fund assets and any
effects of foreign social, economic or political instability. Foreign
companies, in general, are not subject to the regulatory requirements of U.S.
companies and, as such, there may be less publicly available information about
these companies. Moreover, foreign accounting, auditing and financial reporting
standards generally are different from those applicable to U.S. companies.
Finally, in the event of a default of any foreign debt obligations, it may be
more difficult for the Fund to obtain or enforce a judgment against the issuers
of the securities.

Securities of foreign issuers may be less liquid than comparable securities of
U.S. issuers and, as such, their price changes may be more volatile.
Furthermore, foreign exchanges and broker-dealers are generally subject to less
government and exchange scrutiny and regulation than their U.S. counterparts.

Many European countries have adopted or are in the process of adopting a single
European currency, referred to as the "euro." The consequences of the euro
conversion for foreign exchange rates, interest rates and the value of European
securities the Fund may purchase are presently unclear. The consequences may
adversely affect the value and/or increase the volatility of securities held by
the Fund.

YEAR 2000. The Fund could be adversely affected if the computer systems
necessary for the efficient operation of the Investment Manager, the
Sub-Advisor and the Fund's other service providers, as well as the markets and
individual and governmental issuers in which the Fund invests do not properly
process and calculate date-related information from and after January 1, 2000.
While year 2000-related computer problems could have a negative effect on the
Fund, the Investment Manager, Sub-Advisor and affiliates are working hard to
avoid any problems and to obtain assurances from their service providers that
they are taking similar steps.

<PAGE>

In addition, it is possible that the markets for securities in which the Fund
invests may be detrimentally affected by computer failures throughout the
financial services industry beginning January 1, 2000. Improperly functioning
trading systems may result in settlement problems and liquidity issues. In
addition, corporate and governmental data processing errors may result in
production problems for individual companies and overall economic
uncertainties. Earnings of individual issuers will be affected by remediation
costs, which may be substantial and may be reported inconsistently in U.S. and
foreign financial statements. Accordingly, the Fund's investments may be
adversely affected.

[GRAPHIC OMITTED]

FUND MANAGEMENT
- --------------------------------------
The Fund has retained the Investment Manager - Morgan Stanley Dean Witter
Advisors Inc. - to provide administrative services, manage its business affairs
and supervise the investment of its assets. The Investment Manager has, in turn,
contracted with the Sub-Advisor - TCW Funds Management, Inc. - to invest the
Funds assets, including the placing of orders for the purchase and sale of
portfolio securities. TCW Funds Management, Inc. has been the Sub-Advisor of the
Fund since June 26, 1999. Prior to that TCW Funds Management, Inc. acted as the
Fund's advisor and Morgan Stanley Dean Witter Services Company Inc. was the
Fund's manager. The Investment Manager is a wholly-owned subsidiary of Morgan
Stanley Dean Witter & Co., a preeminent global financial services firm that
maintains leading market positions in each of its three primary businesses:
securities, asset management and credit services. Its main business office is
located at Two World Trade Center, New York, New York 10048.

(sidebar)
MORGAN STANLEY DEAN WITTER ADVISORS INC.

The Investment Manager is widely recognized as a leader in the mutual fund
industry and together with Morgan Stanley Dean Witter Services Company Inc.,
its wholly-owned subsidiary, has more than $ billion in assets under
management or administration as of May 31, 1999.
(/sidebar)

The Fund pays the Investment Manager a monthly management fee as full
compensation for the services and facilities furnished to the Fund, and for
Fund expenses assumed by the Investment Manager. The fee is based on the Fund's
average daily net assets. The Investment Manager pays the Sub-Advisor monthly
compensation equal to 40% of this fee. For the fiscal year ended November 30,
1998 the Fund accrued aggregate total compensation to Morgan Stanley Dean
Witter Services Company Inc. and TCW Funds Management, Inc. of 1.00% of the
Fund's average daily net assets (0.60% to Morgan Stanley Dean Witter Services
Company Inc. and 0.40% to TCW Funds Management, Inc.).

<PAGE>

SHAREHOLDER INFORMATION

[GRAPHIC OMITTED]

PRICING FUND SHARES
- -------------------------------------------------
The price of Fund shares (excluding sales charges), called "net asset value,"
is based on the value of the Fund's portfolio securities. The net asset value
of each Class, however, will differ because the Classes have different ongoing
distribution fees.

The net asset value per share of the Fund is determined once daily at 4:00 p.m.
Eastern time, on each day that the New York Stock Exchange is open (or, on days
when the New York Stock Exchange closes prior to 4:00 p.m., at such earlier
time). Shares will not be priced on days that the New York Stock Exchange is
closed.

The value of the Fund's portfolio securities is based on the securities' market
price when available. When a market price is not readily available, including
circumstances under which the Investment Manager and/or Sub-Advisor determines
that a security's market price is not accurate, a portfolio security is valued
at its fair value, as determined under procedures established by the Fund's
Board of Trustees. In these cases, the Fund's net asset value will reflect
certain portfolio securities' fair value rather than their market price.

An exception to the Fund's general policy of using market prices concerns its
short-term debt portfolio securities. Debt securities with remaining maturities
of sixty days or less at the time of purchase are valued at amortized cost.
However, if the cost does not reflect the securities' market value, these
securities will be valued at their fair value.

[GRAPHIC OMITTED]

HOW TO BUY SHARES
- -----------------------------------------------
You may open a new account to buy Fund shares or buy additional Fund shares for
an existing account by contacting your Morgan Stanley Dean Witter Financial
Advisor or other authorized financial representative. Your Financial Advisor
will assist you, step-by-step, with the procedures to invest in the Fund. You
may also purchase shares directly by calling the Fund's transfer agent and
requesting an application.

(sidebar)
CONTACTING A FINANCIAL ADVISOR

If you are new to the Morgan Stanley Dean Witter Family of Funds and would like
to contact a Financial Advisor, call (800) THE-DEAN for the telephone number of
the Morgan Stanley Dean Witter office nearest you. You may also access our
office locator on our Internet site at: www.deanwitter.com/funds
(/sidebar)

Because every investor has different immediate financial needs and long-term
investment goals, the Fund offers investors four Classes of shares: Classes A,
B, C and D. Class D shares are only offered to a limited group of investors.
Each Class of shares offers a distinct structure of sales charges, distribution
and service fees, and other features that are designed to address a variety of
needs. Your Financial Advisor or other authorized financial representative can
help you decide which Class may be most appropriate for you. When purchasing
Fund shares, you must specify which Class of shares you wish to purchase.

When you buy Fund shares, the shares are purchased at the next share price
calculated (less any applicable front-end sales charge for Class A shares)
after we receive your investment order in proper form. We reserve the right to
reject any order for the purchase of Fund shares.

<PAGE>

MINIMUM INVESTMENT AMOUNTS

<TABLE>
<CAPTION>
MINIMUM INVESTMENT
INVESTMENT OPTIONS INITIAL ADDITIONAL
<S> <C> <C> <C>
Regular Accounts: $1,000 $ 100

Individual Retirement Accounts: Regular IRAs $1,000 $ 100
Education IRAs $500 $ 100

EasyInvest(SM) (Automatically from your
checking or savings account or
Money Market Fund) $ 100* $ 100*
</TABLE>

(sidebar)
EASYINVEST(SM)
A purchase plan that
allows you to transfer
money automatically
from your checking or
savings account or from
a Money Market Fund
on a semi-monthly,
monthly or quarterly
basis. Contact your
Morgan Stanley Dean
Witter Financial
Advisor for further
information about this
service.
(/sidebar)

* Provided your schedule of investments totals $1,000 in twelve months.

There is no minimum investment amount if you purchase Fund shares through: (1)
the Investment Manager's mutual fund asset allocation plan, (2) a program,
approved by the Fund's distributor, in which you pay an asset-based fee for
advisory, administrative and/or brokerage services, or (3) employer-sponsored
employee benefit plan accounts.

INVESTMENT OPTIONS FOR CERTAIN INSTITUTIONAL AND OTHER INVESTORS/CLASS D
SHARES.
To be eligible to purchase Class D shares, you must qualify under one of the
investor categories specified in the "Share Class Arrangements" section of this
Prospectus.

THREE DAY SETTLEMENT. Fund shares are sold through the Fund's distributor,
Morgan Stanley Dean Witter Distributors Inc., on a normal three business day
basis; that is, your payment for Fund shares is due on the third business day
(settlement day) after you place a purchase order.

SUBSEQUENT INVESTMENTS SENT DIRECTLY TO THE FUND. In addition to buying
additional Fund shares for an existing account by contacting your Morgan
Stanley Dean Witter Financial Advisor, you may send a check directly to the
Fund. To buy additional shares in this manner:

o Write a "letter of instruction" to the Fund specifying the name(s) on the
account, the account number, the social security or tax identification
number, the Class of shares you wish to purchase and the investment amount
(which would include any applicable front-end sales charge). The letter must
be signed by the account owner(s).

o Make out a check for the total amount payable to: Morgan Stanley Dean Witter
Mid-Cap Equity Trust.

o Mail the letter and check to Morgan Stanley Dean Witter Trust FSB at P.O. Box
1040, Jersey City, NJ 07303.

<PAGE>

[GRAPHIC OMITTED]

HOW TO EXCHANGE SHARES
- -------------------------------------------------------
PERMISSIBLE FUND EXCHANGES. You may exchange shares of any Class of the Fund
for the same Class of any other continuously offered Multi-Class Fund, or for
shares of a No-Load Fund, Money Market Fund or Short-Term U.S. Treasury Trust,
without the imposition of an exchange fee. See the inside back cover of this
Prospectus for each Morgan Stanley Dean Witter Fund's designation as a
Multi-Class Fund, No-Load Fund or Money Market Fund. If a Morgan Stanley Dean
Witter Fund is not listed, consult the inside back cover of that Fund's
Prospectus for its designation. For purposes of exchanges, shares of FSC Funds
(subject to a front-end sales charge) are treated as Class A shares of a
Multi-Class Fund.

Exchanges may be made after shares of the Fund acquired by purchase have been
held for thirty days. There is no waiting period for exchanges of shares
acquired by exchange or dividend reinvestment. The current Prospectus for each
Fund describes its investment objective, policies and investment minimums and
should be read before investment.

EXCHANGE PROCEDURES. You can process an exchange by contacting your Morgan
Stanley Dean Witter Financial Advisor or other authorized financial
representative. Otherwise, you must forward an exchange privilege authorization
form to the Fund's transfer agent -- Morgan Stanley Dean Witter Trust FSB --
and then write the transfer agent or call (800) 869-NEWS to place an exchange
order. You can obtain an exchange privilege authorization form by contacting
your Financial Advisor or other authorized financial representative or by
calling (800) 869-NEWS. If you hold share certificates, no exchanges may be
processed until we have received all applicable share certificates.

An exchange to any Morgan Stanley Dean Witter Fund (except a Money Market Fund)
is made on the basis of the next calculated net asset values of the Funds
involved after the exchange instructions are accepted. When exchanging into a
Money Market Fund, the Fund's shares are sold at their next calculated net
asset value and the Money Market Fund's shares are purchased at their net asset
value on the following business day.

The Fund may terminate or revise the exchange privilege upon required notice.
Certain services normally available to shareholders of Money Market Funds,
including the check writing privilege, are not available for Money Market Fund
shares you acquire in an exchange.

TELEPHONE EXCHANGES. For your protection when calling Morgan Stanley Dean
Witter Trust FSB, we will employ reasonable procedures to confirm that exchange
instructions communicated over the telephone are genuine. These procedures may
include requiring various forms of personal identification such as name,
mailing address, social security or other tax identification number. Telephone
instructions also may be recorded.

Telephone instructions will be accepted if received by the Fund's transfer
agent between 9:00 a.m. and 4:00 p.m. Eastern time, on any day the New York
Stock Exchange is open for business. During periods of drastic economic or
market changes, it is possible that the telephone exchange procedures may be
difficult to implement, although this has not been the case with the Fund in
the past.

<PAGE>

TAX CONSIDERATIONS OF EXCHANGES. If you exchange shares of the Fund for shares
of another Morgan Stanley Dean Witter Fund there are important tax
considerations. For tax purposes, the exchange out of the Fund is considered a
sale of Fund shares -- and the exchange into the other Fund is considered a
purchase. As a result, you may realize a capital gain or loss.

You should review the "Tax Consequences" section and consult your own tax
professional about the tax consequences of an exchange.

FREQUENT EXCHANGES. A pattern of frequent exchanges may result in the Fund
limiting or prohibiting, at its discretion, additional purchases and/or
exchanges. The Fund will notify you in advance of limiting your exchange
privileges.

CDSC CALCULATIONS ON EXCHANGES. See the "Share Class Arrangements" section of
this Prospectus for a further discussion of how applicable contingent deferred
sales charges (CDSCs) are calculated for shares of one Fund that are exchanged
for shares of another.

For further information regarding exchange privileges, you should contact your
Morgan Stanley Dean Witter Financial Advisor or call (800) 869-NEWS.

[GRAPHIC OMITTED]

HOW TO SELL SHARES
- ------------------------------------------------
You can sell some or all of your Fund shares at any time. If you sell Class A,
Class B or Class C shares, your net sale proceeds are reduced by the amount of
any applicable CDSC. Your shares will be sold at the next price calculated
after we receive your order to sell as described below.

<TABLE>
<S> <C>
OPTIONS PROCEDURES
- -------------------- -------------------------------------------------------------------------------------
Contact Your To sell your shares, simply call your Morgan Stanley Dean Witter Financial
Financial Advisor Advisor or other authorized financial representative.
-------------------------------------------------------------------------------------
[GRAPHIC OMITTED]
Payment will be sent to the address to which the account is registered or
deposited in your brokerage account.
- -------------------- -------------------------------------------------------------------------------------
By Letter You can also sell your shares by writing a "letter of instruction" that includes:

[GRAPHIC OMITTED] o your account number;
o the dollar amount or the number of shares you wish to sell;
o the Class of shares you wish to sell; and
o the signature of each owner as it appears on the account.
-------------------------------------------------------------------------------------
If you are requesting payment to anyone other than the registered owner(s) or
that payment be sent to any address other than the address of the registered
owner(s) or pre-designated bank account, you will need a signature guarantee.
You can obtain a signature guarantee from an eligible guarantor acceptable to
Morgan Stanley Dean Witter Trust FSB. (You should contact Morgan Stanley
Dean Witter Trust FSB at (800) 869-NEWS for a determination as to whether
a particular institution is an eligible guarantor.) A notary public cannot provide a
signature guarantee. Additional documentation may be required for shares held
by a corporation, partnership, trustee or executor.
-------------------------------------------------------------------------------------
Mail the letter to Morgan Stanley Dean Witter Trust FSB at P.O. Box 983, Jersey
City, New Jersey 07303. If you hold share certificates, you must return the
certificates, along with the letter and any required additional documentation.
-------------------------------------------------------------------------------------
A check will be mailed to the name(s) and address in which the account is
-------------------------------------------------------------------------------------
registered, or otherwise according to your instructions.
-------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<S> <C>
OPTIONS PROCEDURES
- ------------------ ---------------------------------------------------------------------------------
Systematic If your investment in all of the Morgan Stanley Dean Witter Family of Funds has
Withdrawal Plan a total market value of at least $10,000, you may elect to withdraw amounts of
[GRAPHIC OMITTED] $25 or more, or in any whole percentage of a Fund's balance (provided the
amount is at least $25), on a monthly, quarterly, semi-annual or annual basis,
from any Fund with a balance of at least $1,000. Each time you add a Fund to
the plan, you must meet the plan requirements.
---------------------------------------------------------------------------------
Amounts withdrawn are subject to any applicable CDSC. A CDSC may be
waived under certain circumstances. See the Class B waiver categories listed in
the "Share Class Arrangements" section of this Prospectus.
---------------------------------------------------------------------------------
To sign up for the Systematic Withdrawal Plan, contact your Morgan Stanley
---------------------------------------------------------------------------------
Dean Witter Financial Advisor or call (800) 869-NEWS. You may terminate or
suspend your plan at any time. Please remember that withdrawals from the
plan are sales of shares, not Fund "distributions," and ultimately may exhaust
your account balance. The Fund may terminate or revise the plan at any time.
---------------------------------------------------------------------------------
</TABLE>
(sidebar)
SYSTEMATIC
WITHDRAWAL PLAN

This plan allows you to withdraw money automatically from your Fund account at
regular intervals. The service is available to shareholders whose investments in
all Morgan Stanley Dean Witter Funds total at least $10,000. Contact your Morgan
Stanley Dean Witter Financial Advisor for more details.
(/sidebar)

PAYMENT FOR SOLD SHARES. After we receive your complete instruction to sell as
described above, a check will be mailed to you within seven days, although we
will attempt to make payment within one business day. Payment may also be sent
to your brokerage account.

Payment may be postponed or the right to sell your shares suspended, however,
under unusual circumstances. If you request to sell shares that were recently
purchased by check, payment of the sale proceeds may be delayed for the minimum
time needed to verify that the check has been honored (not more than fifteen
days from the time we receive the check).

TAX CONSIDERATIONS. Normally, your sale of Fund shares is subject to federal
and state income tax. You should review the "Tax Consequences" section of this
Prospectus and consult your own tax professional about the tax consequences of
a sale.

REINSTATEMENT PRIVILEGE. If you sell Fund shares and have not previously
exercised the reinstatement privilege, you may, within 35 days after the date
of sale, invest any portion of the proceeds in the same Class of Fund shares at
their net asset value and receive a pro rata credit for any CDSC paid in
connection with the sale.

INVOLUNTARY SALES. The Fund reserves the right, on sixty days' notice, to sell
the shares of any shareholder (other than shares held in an IRA or 403(b)
Custodial Account) whose shares, due to sales by the shareholder, have a value
below $100, or in the case of an account opened through EasyInvestSM, if after
12 months the shareholder has invested less than $1,000 in the account.

However, before the Fund sells your shares in this manner, we will notify you
and allow you sixty days to make an additional investment in an amount that
will increase the value of your account to at least the required amount before
the sale is processed. No CDSC will be imposed on any involuntary sale.

MARGIN ACCOUNTS. Certain restrictions may apply to Fund shares pledged in
margin accounts with Dean Witter Reynolds or another authorized broker-dealer
of Fund shares. If you hold Fund shares in this manner, please contact your
Morgan Stanley Dean Witter Financial Advisor or other authorized financial
representative for more details.

<PAGE>

[GRAPHIC OMITTED]

DISTRIBUTIONS
- ----------------------------------------
The Fund passes substantially all of its earnings from income and capital gains
along to its investors as "distributions." The Fund earns income from stocks and
interest from fixed-income investments. These amounts are passed along to Fund
shareholders as "income dividend distributions." The Fund realizes capital gains
whenever it sells securities for a higher price than it paid for them. These
amounts are passed along as "capital gain distributions."

(sidebar)
TARGETED DIVIDENDS(SM)
You may select to have your Fund distributions automatically invested in other
Classes of Fund shares or Classes of another Morgan Stanley Dean Witter Fund
that you own. Contact your Morgan Stanley Dean Witter Financial Advisor for
further information about this service.
(/sidebar)

The Fund declares income dividends separately for each Class. Distributions
paid on Class A and Class D shares will be higher than for Class B and Class C
because distribution fees that Class B and Class C pay are higher. Normally,
income dividends are distributed to shareholders annually. Any capital gains
are distributed in December; if a second capital gain distribution is
necessary, it is paid in the following year. The Fund, however, may retain and
reinvest any long-term capital gains. The Fund may at times make payments from
sources other than income or capital gains that represent a return of a portion
of your investment.

Distributions are reinvested automatically in additional shares of the same
Class and automatically credited to your account, unless you request in writing
that all distributions be paid in cash. If you elect the cash option, the Fund
will mail a check to you no later than seven business days after the
distribution is declared. No interest will accrue on uncashed checks. If you
wish to change how your distributions are paid, your request should be received
by the Fund's transfer agent, Morgan Stanley Dean Witter Trust FSB, at least
five business days prior to the record date of the distributions.

[GRAPHIC OMITTED]

TAX CONSEQUENCES
- ----------------------------------------------
As with any investment, you should consider how your Fund investment will be
taxed. The tax information in this Prospectus is provided as general
information. You should consult your own tax professional about the tax
consequences of an investment in the Fund.

Unless your investment in the Fund is through a tax-deferred retirement
account, such as a 401(k) plan or IRA, you need to be aware of the possible tax
consequences when:

o The Fund makes distributions; and

o You sell Fund shares, including an exchange to another Morgan Stanley Dean
Witter Fund.

TAXES ON DISTRIBUTIONS. Your distributions are normally subject to federal and
state income tax when they are paid, whether you take them in cash or reinvest
them in Fund shares. A distribution also may be subject to local income tax.
Any income dividend distributions and any short-term capital gain distributions
are taxable to you as ordinary income. Any long-term capital gain distributions
are taxable as long-term capital gains, no matter how long you have owned
shares in the Fund.

Every January, you will be sent a statement (IRS Form 1099-DIV) showing the
taxable distributions paid to you in the previous year. The statement provides
full information on your dividends and capital gains for tax purposes.

<PAGE>

TAXES ON SALES. Your sale of Fund shares normally is subject to federal and
state income tax and may result in a taxable gain or loss to you. A sale also
may be subject to local income tax. Your exchange of Fund shares for shares of
another Morgan Stanley Dean Witter Fund is treated for tax purposes like a sale
of your original shares and a purchase of your new shares. Thus, the exchange
may, like a sale, result in a taxable gain or loss to you and will give you a
new tax basis for your new shares.

When you open your Fund account, you should provide your social security or tax
identification number on your investment application. By providing this
information, you will avoid being subject to a federal backup withholding tax
of 31% on taxable distributions and redemption proceeds. Any withheld amount
would be sent to the IRS as an advance tax payment.

[GRAPHIC OMITTED]

SHARE CLASS ARRANGEMENTS
- --------------------------------------------------------
The Fund offers several Classes of shares having different distribution
arrangements designed to provide you with different purchase options according
to your investment needs. Your Morgan Stanley Dean Witter Financial Advisor or
other authorized financial representative can help you decide which Class may
be appropriate for you.

The general public is offered three Classes: Class A shares, Class B shares and
Class C shares, which differ principally in terms of sales charges and ongoing
expenses. A fourth Class, Class D shares, is offered only to a limited category
of investors. Shares that you acquire through reinvested distributions will not
be subject to any front-end sales charge or CDSC -- contingent deferred sales
charge. Sales personnel may receive different compensation for selling each
Class of shares. The sales charges applicable to each Class provide for the
distribution financing of shares of that Class.

The chart below compares the sales charge and annual 12b-1 fee applicable to
each Class:

<TABLE>
<CAPTION>
CLASS SALES CHARGE ANNUAL 12B-1FEE
<S> <C> <C>
A Maximum 5.25% initial sales charge reduced for purchase of
$25,000 or more; shares sold without an initial sales charge are
generally subject to a 1.0% CDSC during the first year 0.25%

B Maximum 5.0% CDSC during the first year decreasing to 0%
after six years 1.0%

C 1.0% CDSC during the first year 1.0%

D None None
</TABLE>

<PAGE>

CLASS A SHARES Class A shares are sold at net asset value plus an initial sales
charge of up to 5.25%. The initial sales charge is reduced for purchases of
$25,000 or more according to the schedule below. Investments of $1 million or
more are not subject to an initial sales charge, but are generally subject to a
contingent deferred sales charge, or CDSC, of 1.0% on sales made within one year
after the last day of the month of purchase. The CDSC will be assessed in the
same manner and with the same CDSC waivers as with Class B shares. Class A
shares are also subject to a distribution (12b-1) fee of up to 0.25% of the
average daily net assets of the Class.

The offering price of Class A shares includes a sales charge (expressed as a
percentage of the offering price) on a single transaction as shown in the
following table:

<TABLE>
<CAPTION>
FRONT-END SALES CHARGE
PERCENTAGE OF APPROXIMATE PERCENTAGE
AMOUNT OF SINGLE TRANSACTION PUBLIC OFFERING PRICE OF AMOUNT INVESTED
<S> <C> <C>
Less than $25,000 5.25% 5.54%
$25,000 but less than $50,000 4.75% 4.99%
$50,000 but less than $100,000 4.00% 4.17%
$100,000 but less than $250,000 3.00% 3.09%
$250,000 but less than $1 million 2.00% 2.04%
$1 million and over 0 0
</TABLE>

The reduced sales charge schedule is applicable to purchases of Class A shares
in a single transaction by:

o A single account (including an individual, trust or fiduciary account).

o Family member accounts (limited to husband, wife and children under the age
of 21).

o Pension, profit sharing or other employee benefit plans of companies and
their affiliates.

o Tax-exempt organizations.

o Groups organized for a purpose other than to buy mutual fund shares.

COMBINED PURCHASE PRIVILEGE. You also will have the benefit of reduced sales
charges by combining purchases of Class A shares of the Fund in a single
transaction with purchases of Class A shares of other Multi-Class Funds and
shares of FSC Funds.

RIGHT OF ACCUMULATION. You also may benefit from a reduction of sales charges
if the cumulative net asset value of Class A shares of the Fund purchased in a
single transaction, together with shares of other Funds you currently own which
were previously purchased at a price including a front-end sales charge
(including shares acquired through reinvestment of distributions), amounts to
$25,000 or more. Also, if you have a cumulative net asset value of all your
Class A and Class D shares equal to at least $5 million (or $25 million for
certain employee benefit plans), you are eligible to purchase Class D shares of
any Fund subject to the Fund's minimum initial investment requirement.

<PAGE>

You must notify your Morgan Stanley Dean Witter Financial Advisor or other
authorized financial representative (or Morgan Stanley Dean Witter Trust FSB if
you purchase directly through the Fund), at the time a purchase order is
placed, that the purchase qualifies for the reduced charge under the Right of
Accumulation. Similar notification must be made in writing when an order is
placed by mail. The reduced sales charge will not be granted if: (i)
notification is not furnished at the time of the order; or (ii) a review of the
records of Dean Witter Reynolds or other authorized dealer of Fund shares or
the Fund's transfer agent does not confirm your represented holdings.

LETTER OF INTENT. The schedule of reduced sales charges for larger purchases
also will be available to you if you enter into a written "letter of intent." A
letter of intent provides for the purchase of Class A shares of the Fund or
other Multi-Class Funds or shares of FSC Funds within a thirteen month period.
The initial purchase under a letter of intent must be at least 5% of the stated
investment goal. To determine the applicable sales charge reduction, you may
also include: (1) the cost of shares of other Morgan Stanley Dean Witter
Multi-Class Funds which were previously purchased at a price including a
front-end sales charge during the 90-day period prior to the distributor
receiving the letter of intent, and (2) the cost of shares of other Funds you
currently own acquired in exchange for shares of Funds purchased during that
period at a price including a front-end sales charge. You can obtain a letter
of intent by contacting your Morgan Stanley Dean Witter Financial Advisor or
other authorized financial representative, or by calling (800) 869-NEWS. If you
do not achieve the stated investment goal within the thirteen-month period, you
are required to pay the difference between the sales charges otherwise
applicable and sales charges actually paid.

OTHER FRONT-END SALES CHARGE WAIVERS. In addition to investments of $1 million
or more, your purchase of Class A shares is not subject to a front-end sales
charge (or a CDSC upon sale) if your account qualifies under one of the
following categories:

o A trust for which Morgan Stanley Dean Witter Trust FSB provides discretionary
trustee services.

o Persons participating in a fee-based investment program (subject to all of
its terms and conditions, including mandatory sale or transfer restrictions
on termination) approved by the Fund's distributor pursuant to which they
pay an asset-based fee for investment advisory, administrative and/or
brokerage services.

o Employer-sponsored employee benefit plans, whether or not qualified under the
Internal Revenue Code, for which Morgan Stanley Dean Witter Trust FSB serves
as trustee or Dean Witter Reynolds' Retirement Plan Services serves as
recordkeeper under a written Recordkeeping Services Agreement ("MSDW
Eligible Plans") which have at least 200 eligible employees.

o A MSDW Eligible Plan whose Class B shares have converted to Class A shares,
regardless of the plan's asset size or number of eligible employees.

o A client of a Morgan Stanley Dean Witter Financial Advisor who joined us from
another investment firm within six months prior to the date of purchase of
Fund shares, and you used the proceeds from the sale of shares of a
proprietary mutual

<PAGE>

fund of that Financial Advisor's previous firm that imposed either a front-end
or deferred sales charge to purchase Class A shares, provided that: (1) you
sold the shares not more than 60 days prior to the purchase of Fund shares,
and (2) the sale proceeds were maintained in the interim in cash or a money
market fund.

o Current or retired Directors/Trustees of the Morgan Stanley Dean Witter
Funds, such persons' spouses and children under the age of 21, and trust
accounts for which any of such persons is a beneficiary.

o Current or retired directors, officers and employees of Morgan Stanley Dean
Witter & Co. and any of its subsidiaries, such persons' spouses and children
under the age of 21 and trust accounts for which any of such persons is a
beneficiary.

CLASS B SHARES Class B shares are offered at net asset value with no initial
sales charge but are subject to a contingent deferred sales charge, or CDSC, as
set forth in the table below. For the purpose of calculating the CDSC, shares
are deemed to have been purchased on the last day of the month during which they
were purchased.

(sidebar)
CONTINGENT DEFERRED SALES CHARGE OR CDSC

A fee you pay when you sell shares of certain Morgan Stanley Dean Witter Funds
purchased without an initial sales charge. This fee declines the longer you hold
your shares as set forth in the table.
(/sidebar)

<TABLE>
<CAPTION>
YEAR SINCE PURCHASE PAYMENT MADE CDSC AS A PERCENTAGE OF AMOUNT REDEEMED
<S> <C>
First 5.0%
Second 4.0%
Third 3.0%
Fourth 2.0%
Fifth 2.0%
Sixth 1.0%
Seventh and thereafter None
</TABLE>

Each time you place an order to sell or exchange shares, shares with no CDSC
will be sold or exchanged first, then shares with the lowest CDSC will be sold
or exchanged next. For any shares subject to a CDSC, the CDSC will be assessed
on an amount equal to the lesser of the current market value or the cost of the
shares being sold.

CDSC WAIVERS. A CDSC, if otherwise applicable, will be waived in the case of:

o Sales of shares held at the time you die or become disabled (within the
definition in Section 72(m)(7) of the Internal Revenue Code which relates to
the ability to engage in gainful employment), if the shares are: (i)
registered either in your name (not a trust) or in the names of you and your
spouse as joint tenants with right of survivorship; or (ii) held in a
qualified corporate or self-employed retirement plan, IRA or 403(b)
Custodial Account, provided in either case that the sale is requested within
one year of your death or initial determination of disability.

o Sales in connection with the following retirement plan "distributions": (i)
lump-sum or other distributions from a qualified corporate or self-employed
retirement plan following retirement (or, in the case of a "key employee" of
a "top heavy" plan, following attainment of age 591/2); (ii) distributions
from an IRA or 403(b) Custodial Account following attainment of age 591/2;
or (iii) a tax-free return of an excess IRA contribution (a "distribution"
does not include a direct transfer of IRA, 403(b) Custodial Account or
retirement plan assets to a successor custodian or trustee).

<PAGE>

o Sales of shares held for you as a participant in a MSDW Eligible Plan.

o Sales of shares in connection with the Systematic Withdrawal Plan of up to
12% annually of the value of each Fund from which plan sales are made. The
percentage is determined on the date you establish the Systematic Withdrawal
Plan and based on the next calculated share price. You may have this CDSC
waiver applied in amounts up to 1% per month, 3% per quarter, 6%
semi-annually or 12% annually. Shares with no CDSC will be sold first,
followed by those with the lowest CDSC. As such, the waiver benefit will be
reduced by the amount of your shares that are not subject to a CDSC. If you
suspend your participation in the plan, you may later resume plan payments
without requiring a new determination of the account value for the 12% CDSC
waiver.

All waivers will be granted only following the Distributor receiving
confirmation of your entitlement. If you believe you are eligible for a CDSC
waiver, please contact your Financial Advisor or call (800) 869-NEWS.

DISTRIBUTION FEE. Class B shares are subject to an annual 12b-1 fee of 1.0% of
the lesser of: (a) the average daily aggregate gross purchases by all
shareholders of the Fund's Class B shares since the inception of the Fund (not
including reinvestments of dividends or capital gains distributions), less the
average daily aggregate net asset value of the Fund's Class B shares sold by
all shareholders since the Fund's inception upon which a CDSC has been imposed
or waived, or (b) the average daily net assets of Class B.

CONVERSION FEATURE. After ten (10) years, Class B shares will convert
automatically to Class A shares of the Fund with no initial sales charge. The
ten year period runs from the last day of the month in which the shares were
purchased, or in the case of Class B shares acquired through an exchange, from
the last day of the month in which the original Class B shares were purchased;
the shares will convert to Class A shares based on their relative net asset
values in the month following the ten year period. At the same time, an equal
proportion of Class B shares acquired through automatically reinvested
distributions will convert to Class A shares on the same basis. (Class B shares
held before May 1, 1997, however, will convert to Class A shares in May 2007.)

In the case of Class B shares held in a MSDW Eligible Plan, the plan is treated
as a single investor and all Class B shares will convert to Class A shares on
the conversion date of the Class B shares of a Morgan Stanley Dean Witter Fund
purchased by that plan.

Currently, the Class B share conversion is not a taxable event; the conversion
feature may be cancelled if it is deemed a taxable event in the future by the
Internal Revenue Service.

If you exchange your Class B shares for shares of a Money Market Fund, No-Load
Fund or Short-Term U.S. Treasury Trust, the holding period for conversion is
frozen as of the last day of the month of the exchange and resumes on the last
day of the month you exchange back into Class B shares.

EXCHANGING SHARES SUBJECT TO A CDSC. There are special considerations when you
exchange Fund shares that are subject to a CDSC. When determining the length of
time you held the shares and the corresponding CDSC rate, any period (starting
at the

<PAGE>

end of the month) during which you held shares of a fund that does not charge a
CDSC will not be counted. Thus, in effect the "holding period" for purposes of
calculating the CDSC is frozen upon exchanging into a fund that does not charge
a CDSC.

For example, if you held Class B shares of the Fund in a regular account for
one year, exchanged to Class B of another Morgan Stanley Dean Witter
Multi-Class Fund for another year, then sold your shares, a CDSC rate of 4%
would be imposed on the shares based on a two year holding period -- one year
for each Fund. However, if you had exchanged the shares of the Fund for a Money
Market Fund (which does not charge a CDSC) instead of the Multi-Class Fund,
then sold your shares, a CDSC rate of 5% would be imposed on the shares based
on a one year holding period. The one year in the Money Market Fund would not
be counted. Nevertheless, if shares subject to a CDSC are exchanged for a Fund
that does not charge a CDSC, you will receive a credit when you sell the shares
equal to the distribution (12b-1) fees, if any, you paid on those shares while
in that Fund up to the amount of any applicable CDSC.

In addition, shares that are exchanged into or from a Morgan Stanley Dean
Witter Fund subject to a higher CDSC rate will be subject to the higher rate,
even if the shares are re-exchanged into a Fund with a lower CDSC rate.

CLASS C SHARES Class C shares are sold at net asset value with no initial sales
charge but are subject to a CDSC of 1.0% on sales made within one year after the
last day of the month of purchase. The CDSC will be assessed in the same manner
and with the same CDSC waivers as with Class B shares.

DISTRIBUTION FEE. Class C shares are subject to an annual distribution (12b-1)
fee of up to 1.0% of the average daily net assets of that Class. The Class C
shares' distribution fee may cause that Class to have higher expenses and pay
lower dividends than Class A or Class D shares. Unlike Class B shares, Class C
shares have no conversion feature and, accordingly, an investor that purchases
Class C shares may be subject to distribution (12b-1) fees applicable to Class
C shares for an indefinite period.

CLASS D SHARES Class D shares are offered without any sales charge on purchases
or sales and without any distribution (12b-1) fee. Class D shares are offered
only to investors meeting an initial investment minimum of $5 million ($25
million for MSDW Eligible Plans) and the following investor categories:

o Investors participating in the Investment Manager's mutual fund asset
allocation program (subject to all of its terms and conditions, including
mandatory sale or transfer restrictions on termination) pursuant to which
they pay an asset-based fee.

o Employee benefit plans maintained by Morgan Stanley Dean Witter & Co. or any
of its subsidiaries for the benefit of certain employees of Morgan Stanley
Dean Witter & Co. and its subsidiaries.

o Certain unit investment trusts sponsored by Dean Witter Reynolds.

<PAGE>

o Certain other open-end investment companies whose shares are distributed by
the Fund's distributor.

MEETING CLASS D ELIGIBILITY MINIMUMS. To meet the $5 million ($25 million for
MSDW Eligible Plans) initial investment to qualify to purchase Class D shares
you may combine: (1) purchases in a single transaction of Class D shares of the
Fund and other Morgan Stanley Dean Witter Multi-Class Funds and/or (2) previous
purchases of Class A and Class D shares of Multi-Class Funds and shares of FSC
Funds you currently own, along with shares of Morgan Stanley Dean Witter Funds
you currently own that you acquired in exchange for those shares.

NO SALES CHARGES FOR REINVESTED CASH DISTRIBUTIONS If you receive a cash payment
representing an income dividend or capital gain and you reinvest that amount in
the applicable Class of shares by returning the check within 30 days of the
payment date, the purchased shares would not be subject to an initial sales
charge or CDSC.

PLAN OF DISTRIBUTION (RULE 12B-1 FEES) The Fund has adopted a Plan of
Distribution in accordance with Rule 12b-1 under the Investment Company Act of
1940 with respect to the distribution of Class A, Class B and Class C shares.
The Plan allows the Fund to pay distribution fees for the sale and distribution
of these shares. It also allows the Fund to pay for services to shareholders of
Class A, Class B and Class C shares. Because these fees are paid out of the
Fund's assets on an ongoing basis, over time these fees will increase the cost
of your investment in these Classes and may cost you more than paying other
types of sales charges.

<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand the Fund's
financial performance for the past 5 fiscal years of the Fund. Certain
information reflects financial results for a single Fund share throughout each
year. The total returns in the table represent the rate an investor would have
earned or lost on an investment in the Fund (assuming reinvestment of all
dividends and distributions).

This information has been audited by PricewaterhouseCoopers LLP, whose report,
along with the Fund's financial statements, is included in the annual report,
which is available upon request.

CLASS B SHARES

<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR FOR THE YEAR FEBRUARY 27, 1996*
ENDED ENDED THROUGH
NOVEMBER 30, 1998++ NOVEMBER 30, 1997**++ NOVEMBER 30, 1996
<S> <C> <C> <C>
SELECTED PER SHARE DATA
Net asset value, beginning of period $ 10.85 $ 10.92 $ 10.00
- ------------------------------------------- -------- -------- --------
Income (loss) from Investment operations
Net investment income (0.26) (0.22) (0.13)
Net realized and unrealized gain 4.87 0.15 1.05
-------- -------- --------
Total income (loss) from investment
operations 4.61 (0.07) 0.92
- ------------------------------------------- -------- -------- --------
Net asset value, end of period $ 15.46 $ 10.85 $ 10.92
- ------------------------------------------- -------- -------- --------
TOTAL RETURN+ 42.49% (0.64)% 9.20%(1)
RATIOS TO AVERAGE NET ASSETS
Expenses 2.20%(3) 2.29% 2.28%(2)
Net investment loss (2.05)%(3) (2.16)% (1.79)%(2)
SUPPLEMENTAL DATA
Net assets, end of period, in thousands $212,043 $174,412 $205,274
Portfolio turnover rate 52% 49% 25% (1)
</TABLE>

* Commencement of operations.
** Prior to July 28, 1997, the Fund issued one class of shares. All shares
of the Fund held prior to that date have been designated Class B shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the
net asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.

<PAGE>

CLASS A SHARES++

<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR JULY 28, 1997*
ENDED THROUGH
NOVEMBER 30, 1998 NOVEMBER 30, 1997
<S> <C> <C>
SELECTED PER SHARE DATA
Net asset value, beginning of period $10.88 $10.85
- ------------------------------------------ ------- --------
Income from Investment operations
Net investment loss (0.18) (0.06)
Net realized and unrealized gain 4.90 0.09
------- --------
Total income from investment operations 4.72 0.03
- ------------------------------------------ ------- --------
Net asset value, end of period $15.60 $10.88
- ------------------------------------------ ------- --------
TOTAL RETURN+ 43.38% 0.28%(1)
RATIOS TO AVERAGE NET ASSETS
Expenses 1.55%(3) 1.55%(2)
Net investment loss (1.40)%(3) (1.46)%(2)
SUPPLEMENTAL DATA
Net assets, end of period, in thousands $1,107 $ 58
Portfolio turnover rate 52% 49%
</TABLE>

CLASS C SHARES++

<TABLE>
<CAPTION>
SELECTED PER SHARE DATA
<S> <C> <C>
Net asset value, beginning of period $10.85 $10.85
- ------------------------------------------ ------- --------
Income from Investment operations
Net investment loss (0.28) (0.08)
Net realized and unrealized gain 4.88 0.08
------- --------
Total income from investment operations 4.60 --
- ------------------------------------------ ------- --------
Net asset value, end of period $15.45 $10.85
- ------------------------------------------ ------- --------
TOTAL RETURN+ 42.27% 0.09%(1)
RATIOS TO AVERAGE NET ASSETS
Expenses 2.30%(3) 2.32%(2)
Net investment loss (2.15)%(3) (2.22)%(2)
SUPPLEMENTAL DATA
Net assets, end of period, in thousands $ 712 $ 83
Portfolio turnover rate 52% 49%
</TABLE>

* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the
net asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.

<PAGE>

CLASS D SHARES++

<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR JULY 28, 1997*
ENDED THROUGH
NOVEMBER 30, 1998 NOVEMBER 30, 1997
<S> <C> <C>
SELECTED PER SHARE DATA
Net asset value, beginning of period $10.89 $10.85
- ------------------------------------------ ------- --------
Income from Investment operations
Net investment loss (0.15) (0.05)
Net realized and unrealized gain 4.92 0.09
------- --------
Total income from investment operations 4.77 0.04
- ------------------------------------------ ------- --------
Net asset value, end of period $15.66 $10.89
- ------------------------------------------ ------- --------
TOTAL RETURN+ 43.80% 0.37%(1)
RATIOS TO AVERAGE NET ASSETS
Expenses 1.30%(3) 1.30%(2)
Net investment loss (1.15)%(3) (1.19)%(2)
SUPPLEMENTAL DATA
Net assets, end of period, in thousands $15 $10
Portfolio turnover rate 52% 49%
</TABLE>

* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Calculated based on the net asset value as of the last business day of
the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.

<PAGE>

NOTES

------------------------------------------------------------------------

<PAGE>

NOTES

------------------------------------------------------------------------

<PAGE>

NOTES

------------------------------------------------------------------------

<PAGE>

MORGAN STANLEY DEAN WITTER
FAMILY OF FUNDS
The Morgan Stanley Dean Witter Family of Funds
offers investors a wide range of investment choices.
Come on in and meet the family!

- --------------------------------------------------------------------------------

GROWTH FUNDS

Aggressive Equity Fund
American Opportunities Fund
Capital Growth Securities
Developing Growth Securities
Equity Fund
Growth Fund
Market Leader Trust
Mid-Cap Growth Fund
Special Value Fund
Value Fund

THEME FUNDS

Financial Services Trust
Health Sciences Trust

Information Fund
Natural Resource Development Securities
Precious Metals and Minerals Trust
Real Estate Fund

GLOBAL/INTERNATIONAL FUNDS

Competitive Edge Fund - "Best Ideas" Portfolio
European Growth Fund
Fund of Funds - International Portfolio
Global Dividend Growth Securities
International SmallCap Fund
Japan Fund
Pacific Growth Fund

- --------------------------------------------------------------------------------

GROWTH & INCOME FUNDS

Balanced Growth Fund
Balanced Income Fund
Convertible Securities Trust
Dividend Growth Securities
Fund of Funds - Domestic Portfolio
Income Builder Fund
Mid-Cap Dividend Growth Securities
S&P 500 Index Fund
S&P 500 Select Fund
Strategist Fund
Value/Added Market Series/Equity Portfolio

THEME FUNDS

Global Utilities Fund
Utilities Fund

- --------------------------------------------------------------------------------

INCOME FUNDS

GOVERNMENT INCOME FUNDS

Federal Securities Trust
Short-Term U.S. Treasury Trust
U.S. Government Securities Trust

DIVERSIFIED INCOME FUNDS

Diversified Income Trust

CORPORATE INCOME FUNDS

High Yield Securities
Intermediate Income Securities
Short-Term Bond Fund(NL)

GLOBAL INCOME FUNDS

World Wide Income Trust

TAX-FREE INCOME FUNDS

California Tax-Free Income Fund
Hawaii Municipal Trust(FSC)
Limited Term Municipal Trust(NL)
Multi-State Municipal Series Trust(FSC)
New York Tax-Free Income Fund
Tax-Exempt Securities Trust

- --------------------------------------------------------------------------------

MONEY MARKET FUNDS

TAXABLE MONEY MARKET FUNDS

Liquid Asset Fund(MM)
U.S. Government Money Market Trust(MM)

TAX-FREE MONEY MARKET FUNDS

California Tax-Free Daily Income Trust(MM)

New York Municipal Money Market Trust(MM)

Tax-Free Daily Income Trust(MM)

There may be Funds created after this Prospectus was published. Please consult
the inside front cover of a new Fund's prospectus for its designations, e.g.,
Multi-Class Fund or Money Market Fund.

Unless otherwise noted, each listed Morgan Stanley Dean Witter Fund, except for
Short-Term U.S. Treasury Trust, is a Multi-Class Fund. A Multi-Class Fund is a
mutual fund offering multiple Classes of shares. The other types of Funds are:
NL -- No-Load (Mutual) Fund; MM -- Money Market Fund; FSC -- A mutual fund sold
with a front-end sales charge and a distribution (12b-1) fee.

<PAGE>
MORGAN STANLEY DEAN WITTER
MID-CAP EQUITY TRUST

Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual Reports to Shareholders. In the Fund's Annual Report, you
will find a discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal year. The
Fund's Statement of Additional Information also provides additional information
about the Fund. The Statement of Additional Information is incorporated herein
by reference (legally is part of this Prospectus). For a free copy of any of
these documents to request other information about the Fund, or to make
shareholder inquiries, please call:

(800) 869-NEWS

(sidebar)
TICKER SYMBOLS:
Class A:
- -----------------------------------------------------------------------------
Class B:
- -----------------------------------------------------------------------------
Class C:
- -----------------------------------------------------------------------------
Class D:
- -----------------------------------------------------------------------------
(/sidebar)

You also may obtain information about the Fund by calling your Morgan Stanley
Dean Witter Financial Advisor or by visiting our Internet site at:

www.deanwitter.com/funds

Information about the Fund (including the Statement of Additional
Information) can be viewed and copied at the Securities and Exchange
Commission's Public Reference Room in Washington, DC. Information about the
Reference Room's operations may be obtained by calling the SEC at (800)
SEC-0330. Reports and other information about the Fund are available on the
SEC's Internet site (www.sec.gov) and copies of this information may be
obtained, upon payment of a duplicating fee, by writing the Public Reference
Section of the SEC, Washington, DC 20549-6009.

(INVESTMENT COMPANY ACT FILE NO. 811-7377)

<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
June 25, 1999

MORGAN STANLEY DEAN
WITTER
MID-CAP
EQUITY TRUST
- -----------------------------------------------------------------------------

This Statement of Additional Information is not a Prospectus. The
Prospectus (dated June 25, 1999) for Morgan Stanley Dean Witter Mid-Cap
Equity Trust may be obtained without charge from the Fund at its address or
telephone number listed below or from Dean Witter Reynolds at any of its
branch offices.

Morgan Stanley Dean Witter Mid-Cap Equity Trust
Two World Trade Center
New York, New York 10048
(800) 869-NEWS
<PAGE>
TABLE OF CONTENTS
- -----------------------------------------------------------------------------

<TABLE>
<CAPTION>
<S> <C> <C>
I. Fund History................................................................. 4
II. Description of the Fund and Its Investments and Risks........................ 4
A. Classification.......................................................... 4
B. Investment Strategies and Risks......................................... 4
C. Fund Policies/Investment Restrictions................................... 8
III. Management of the Fund....................................................... 9
A. Board of Trustees....................................................... 9
B. Management Information.................................................. 10
C. Compensation............................................................ 14
IV. Control Persons and Principal Holders of Securities.......................... 16
V. Management, Investment Advice and Other Services............................. 16
A. The Investment Manager and Sub-Advisor.................................. 16
B. Principal Underwriter................................................... 17
C. Services Provided by the Investment Manager, the Sub-Advisor and Fund
Expenses Paid by Third Parties..................................................... 17
D. Dealer Reallowances..................................................... 18
E. Rule 12b-1 Plan......................................................... 19
F. Other Service Providers................................................. 22
VI. Brokerage Allocation and Other Practices..................................... 23
A. Brokerage Transactions.................................................. 23
B. Commissions............................................................. 23
C. Brokerage Selection..................................................... 24
D. Directed Brokerage...................................................... 24
E. Regular Broker-Dealers.................................................. 25
VII. Capital Stock and Other Securities........................................... 25
VIII. Purchase, Redemption and Pricing of Shares................................... 25
A. Purchase/Redemption of Shares........................................... 25
B. Offering Price.......................................................... 26
IX. Taxation of the Fund and Shareholders........................................ 27
X. Underwriters................................................................. 29
XI. Calculation of Performance Data.............................................. 29
30
XII. Financial Statements.........................................................
</TABLE>

2
<PAGE>
GLOSSARY OF SELECTED DEFINED TERMS

The terms defined in this glossary are frequently used in this Statement
of Additional Information (other terms used occasionally are defined in the
text of the document).

"Custodian" -- The Bank of New York.

"Dean Witter Reynolds" -- Dean Witter Reynolds Inc., a wholly-owned
broker-dealer subsidiary of MSDW.

"Distributor" -- Morgan Stanley Dean Witter Distributors Inc., a
wholly-owned broker-dealer subsidiary of MSDW.

"Financial Advisors" -- Morgan Stanley Dean Witter authorized financial
services representatives.

"Fund" -- Morgan Stanley Dean Witter Mid-Cap Equity Trust, a registered
open-end investment company.

"Investment Manager" -- Morgan Stanley Dean Witter Advisors Inc., a
wholly-owned investment advisor subsidiary of MSDW.

"Independent Trustees" -- Trustees who are not "interested persons" (as
defined by the Investment Company Act) of the Fund.

"Morgan Stanley & Co." -- Morgan Stanley & Co. Incorporated, a
wholly-owned broker-dealer subsidiary of MSDW.

"Morgan Stanley Dean Witter Funds" -- Registered investment companies (i)
for which the Investment Manager serves as the investment advisor; and (ii)
that hold themselves out to investors as related companies for investment and
investor services.

"MSDW" -- Morgan Stanley Dean Witter & Co., a preeminent global financial
services firm.

"MSDW Services Company" -- Morgan Stanley Dean Witter Services Company
Inc., a wholly-owned fund services subsidiary of the Investment Manager.

"Sub-Advisor" -- TCW Funds Management, Inc. a wholly-owned subsidiary of
TCW.

"TCW" -- The TCW Group, Inc., a preeminent investment management and
investment advisory services firm.

"Transfer Agent" -- Morgan Stanley Dean Witter Trust FSB, a wholly-owned
transfer agent subsidiary of MSDW.

"Trustees" -- The Board of Trustees of the Fund.

3
<PAGE>
I. FUND HISTORY
- -----------------------------------------------------------------------------

The Fund was organized under the laws of the Commonwealth of Massachusetts
on October 17, 1995 as a Massachusetts business trust under the name "TCW/DW
Mid-Cap Equity Trust." On February 25, 1999 the Fund's Trustees adopted an
Amendment to the Fund's Declaration of Trust changing the name of the Fund to
Morgan Stanley Dean Witter Mid-Cap Equity Trust.

II. DESCRIPTION OF THE FUND AND ITS INVESTMENTS AND RISKS
- -----------------------------------------------------------------------------

A. CLASSIFICATION

The Fund is an open-end, diversified management investment company whose
investment objective is long-term capital appreciation.

B. INVESTMENT STRATEGIES AND RISKS

The following discussion of the Fund's investment strategies and risks
should be read with the sections of the Fund's Prospectus titled "Principal
Investment Strategies," "Principal Risks," "Additional Investment Strategy
Information" and "Additional Risk Information."

CONVERTIBLE SECURITIES. The Fund may invest in fixed-income securities
which are convertible into common stock of the issuer. Convertible securities
rank senior to common stocks in a corporation's capital structure and,
therefore, entail less risk than the corporation's common stock. The value of
a convertible security is a function of its "investment value" (its value as
if it did not have a conversion privilege), and its "conversion value" (the
security's worth if it were to be exchanged for the underlying security, at
market value, pursuant to its conversion privilege).

To the extent that a convertible security's investment value is greater
than its conversion value, its price will be primarily a reflection of such
investment value and its price will be likely to increase when interest rates
fall and decrease when interest rates rise, as with a fixed-income security
(the credit standing of the issuer and other factors may also have an effect
on the convertible security's value). If the conversion value exceeds the
investment value, the price of the convertible security will rise above its
investment value and, in addition, will sell at some premium over its
conversion value. (This premium represents the price investors are willing to
pay for the privilege of purchasing a fixed-income security with a
possibility of capital appreciation due to the conversion privilege.) At such
times the price of the convertible security will tend to fluctuate directly
with the price of the underlying equity security. Convertible securities may
be purchased by the Fund at varying price levels above their investment
values and/or their conversion values in keeping with the Fund's objective.

MONEY MARKET SECURITIES. The Fund may invest in various money market
securities for cash management purposes or when assuming a temporary
defensive position, which among others may include commercial paper, bank
acceptances, bank obligations, corporate debt securities, certificates of
deposit, U.S. Government securities and obligations of savings institutions
and repurchase agreements. Such securities are limited to:

U.S. Government Securities. Obligations issued or guaranteed as to
principal and interest by the United States or its agencies (such as the
Export-Import Bank of the United States, Federal Housing Administration and
Government National Mortgage Association) or its instrumentalities (such as
the Federal Home Loan Bank), including Treasury bills, notes and bonds;

Bank Obligations. Obligations (including certificates of deposit and
bankers' acceptances) of banks subject to regulation by the U.S. Government
and having total assets of $1 billion or more, and instruments secured by
such obligations, not including obligations of foreign branches of domestic
banks except to the extent below;

Eurodollar Certificates of Deposit. Eurodollar certificates of deposit
issued by foreign branches of domestic banks having total assets of $1
billion or more;

4
<PAGE>
Obligations of Savings Institutions. Certificates of deposit of savings
banks and savings and loan associations, having total assets of $1 billion or
more;

Fully Insured Certificates of Deposit. Certificates of deposit of banks
and savings institutions having total assets of less than $1 billion, if the
principal amount of the obligation is federally insured by the Bank Insurance
Fund or the Savings Association Insurance Fund (each of which is administered
by the FDIC), limited to $100,000 principal amount per certificate and to 10%
or less of the Fund's total assets in all such obligations and in all
illiquid assets, in the aggregate;

Commercial Paper. Commercial paper rated within the two highest grades by
Standard & Poor's Corporation ("S&P") or the two highest grade by Moody's
Investor's Service, Inc. ("Moody's") or, if not rated, issued by a company
having an outstanding debt issue rated at least AA by S&P or Aa by Moody's;
and

Repurchase Agreements. The Fund may invest in repurchase agreements. When
cash may be available for only a few days, it may be invested by the Fund in
repurchase agreements until such time as it may otherwise be invested or used
for payments of obligations of the Fund. These agreements, which may be
viewed as a type of secured lending by the Fund, typically involve the
acquisition, by the Fund, of debt securities from a selling financial
institution such as a bank, savings and loan association or broker-dealer.
The agreement provides that the Fund will sell back to the institution, and
that the institution will repurchase, the underlying security serving as
collateral at a specified price and at a fixed time in the future, usually
not more than seven days from the date of purchase. The collateral will be
marked-to-market daily to determine that the value of the collateral, as
specified in the agreement, does not decrease below the purchase price plus
accrued interest. If such decrease occurs, additional collateral will be
requested and, when received, added to the account to maintain full
collateralization. The Fund will accrue interest from the institution until
the time when the repurchase is to occur. Although this date is deemed by the
Fund to be the maturity date of a repurchase agreement, the maturities of
securities subject to repurchase agreements are not subject to any limits.

While repurchase agreements involve certain risks not associated with
direct investments in debt securities, the Fund follows procedures designed
to minimize such risks. These procedures include effecting repurchase
transactions only with large, well-capitalized and well-established financial
institutions whose financial condition will be continually monitored by the
Investment Manager and/or Sub-Advisor subject to procedures established by
the Trustees. In addition, as described above, the value of the collateral
underlying the repurchase agreement will be at least equal to the repurchase
price, including any accrued interest earned on the repurchase agreement. In
the event of a default or bankruptcy by a selling financial institution, the
Fund will seek to liquidate such collateral. However, the exercising of the
Fund's right to liquidate such collateral could involve certain costs or
delays and, to the extent that proceeds from any sale upon a default of the
obligation to repurchase were less than the repurchase price, the Fund could
suffer a loss. It is the current policy of the Fund not to invest in
repurchase agreements that do not mature within seven days if any such
investment, together with any other illiquid assets held by the Fund, amounts
to more than 15% of its net assets.

ZERO COUPON SECURITIES. A portion of the fixed-income securities purchased
by the Fund may be zero coupon securities. Such securities are purchased at a
discount from their face amount, giving the purchaser the right to receive
their full value at maturity. The interest earned on such securities is,
implicitly, automatically compounded and paid out at maturity. While such
compounding at a constant rate eliminates the risk of receiving lower yields
upon reinvestment of interest if prevailing interest rates decline, the owner
of a zero coupon security will be unable to participate in higher yields upon
reinvestment of interest received on interest-paying securities if prevailing
interest rates rise.

A zero coupon security pays no interest to its holder during its life.
Therefore, to the extent the Fund invests in zero coupon securities, it will
not receive current cash available for distribution to shareholders. In
addition, zero coupon securities are subject to substantially greater price
fluctuations during periods of changing prevailing interest rates than are
comparable securities which pay interest on a current basis. Current federal
tax law requires that a holder (such as the Fund) of a zero coupon security
accrue a portion of the discount at which the security was purchased as
income each year even though the Fund receives no interest payments in cash
on the security during the year.

5
<PAGE>
INVESTMENT IN REAL ESTATE INVESTMENT TRUSTS. The Fund may invest in real
estate investment trusts, which pool investors' funds for investments
primarily in commercial real estate properties. Investment in real estate
investment trusts may be the most practical available means for the Fund to
invest in the real estate industry (the Fund is prohibited from investing in
real estate directly). As a shareholder in a real estate investment trust,
the Fund would bear its ratable share of the real estate investment trust's
expenses, including its advisory and administration fees. At the same time
the Fund would continue to pay its own management fees, investment advisory
fees and other expenses, as a result of which the Fund and its shareholders
in effect will be absorbing duplicate levels of fees with respect to
investments in real estate investment trusts.

LENDING PORTFOLIO SECURITIES. The Fund may lend its portfolio securities
to brokers, dealers and other financial institutions, provided that the loans
are callable at any time by the Fund, and are at all times secured by cash or
cash equivalents, which are maintained in a segregated account pursuant to
applicable regulations and that are equal to at least 100% of the market
value, determined daily, of the loaned securities. The advantage of these
loans is that the Fund continues to receive the income on the loaned
securities while at the same time earning interest on the cash amounts
deposited as collateral, which will be invested in short-term obligations.
The Fund will not lend more than 25% of the value of its total assets.

As with any extensions of credit, there are risks of delay in recovery
and, in some cases, even loss of rights in the collateral should the borrower
of the securities fail financially. However, these loans of portfolio
securities will only be made to firms deemed by the Fund's management to be
creditworthy and when the income which can be earned from such loans
justifies the attendant risks. Upon termination of the loan, the borrower is
required to return the securities to the Fund. Any gain or loss in the market
price during the loan period would inure to the Fund.

When voting or consent rights which accompany loaned securities pass to
the borrower, the Fund will follow the policy of calling the loaned
securities, to be delivered within one day after notice, to permit the
exercise of the rights if the matters involved would have a material effect
on the Fund's investment in the loaned securities. The Fund will pay
reasonable finder's, administrative and custodial fees in connection with a
loan of its securities.

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES AND FORWARD COMMITMENTS. The
Fund may purchase securities on a when-issued or delayed delivery basis or
may purchase or sell securities on a forward commitment basis. When these
transactions are negotiated, the price is fixed at the time of the
commitment, but delivery and payment can take place a month or more after the
date of commitment. While the Fund will only purchase securities on a
when-issued, delayed delivery or forward commitment basis with the intention
of acquiring the securities, the Fund may sell the securities before the
settlement date, if it is deemed advisable. The securities so purchased or
sold are subject to market fluctuation and no interest or dividends accrue to
the purchaser prior to the settlement date.

At the time the Fund makes the commitment to purchase or sell securities
on a when-issued, delayed delivery or forward commitment basis, it will
record the transaction and thereafter reflect the value, each day, of such
security purchased, or if a sale, the proceeds to be received, in determining
its net asset value. At the time of delivery of the securities, their value
may be more or less than the purchase or sale price. An increase in the
percentage of the Fund's assets committed to the purchase of securities on a
when-issued, delayed delivery or forward commitment basis may increase the
volatility of its net asset value. The Fund will also establish a segregated
account on the Fund's books in which it will continually maintain cash or
cash equivalents or other liquid portfolio securities equal in value to
commitments to purchase securities on a when-issued, delayed delivery or
forward commitment basis.

WHEN, AS AND IF ISSUED SECURITIES. The Fund may purchase securities on a
"when, as and if issued" basis under which the issuance of the security
depends upon the occurrence of a subsequent event, such as approval of a
merger, corporate reorganization or debt restructuring. The commitment for
the purchase of any such security will not be recognized in the portfolio of
the Fund until the Investment Manager and/or Sub-Advisor determines that
issuance of the security is probable. At that time, the Fund

6
<PAGE>
will record the transaction and, in determining its net asset value, will
reflect the value of the security daily. At that time, the Fund will also
establish a segregated account on the Fund's books in which it will maintain
cash or cash equivalents or other liquid portfolio securities equal in value
to recognized commitments for such securities.

An increase in the percentage of the Fund's assets committed to the
purchase of securities on a "when, as and if issued" basis may increase the
volatility of its net asset value. The Fund may also sell securities on a
"when, as and if issued" basis provided that the issuance of the security
will result automatically from the exchange or conversion of a security owned
by the Fund at the time of sale.

PRIVATE PLACEMENTS AND RESTRICTED SECURITIES. The Fund may invest up to
15% of its net assets in securities which are subject to restrictions on
resale because they have not been registered under the Securities Act of 1933
(the "Securities Act"), or which are otherwise not readily marketable.
(Securities eligible for resale pursuant to Rule 144A under the Securities
Act, and determined to be liquid pursuant to the procedures discussed in the
following paragraph, are not subject to the foregoing restriction.) These
securities are generally referred to as "private placements" or "restricted
securities." Limitations on the resale of these securities may have an
adverse effect on their marketability, and may prevent the Fund from
disposing of them promptly at reasonable prices. The Fund may have to bear
the expense of registering the securities for resale and the risk of
substantial delays in effecting the registration.

Rule 144A permits the Fund to sell restricted securities to qualified
institutional buyers without limitation. The Investment Manager and/or
Sub-Advisor, pursuant to procedures adopted by the Trustees, will make a
determination as to the liquidity of each restricted security purchased by
the Fund. If a restricted security is determined to be "liquid," the security
will not be included within the category "illiquid securities," which under
current policy may not exceed 15% of the Fund's net assets. However,
investing in Rule 144A securities could have the effect of increasing the
level of Fund illiquidity to the extent the Fund, at a particular point in
time, may be unable to find qualified institutional buyers interested in
purchasing such securities.

WARRANTS AND SUBSCRIPTION RIGHTS. The Fund may acquire warrants and
subscription rights attached to other securities. The Fund may invest up to
5% of the value of its net assets in warrants, including not more than 2% in
warrants not listed on either the New York or American Stock Exchange. A
warrant is, in effect, an option to purchase equity securities at a specific
price, generally valid for a specific period of time, and has no voting
rights, pays no dividends and has no rights with respect to the corporation
issuing it.

A subscription right is a privilege granted to existing shareholders of a
corporation to subscribe to shares of a new issue of common stock before it
is offered to the public. A subscription right normally has a life of two to
four weeks and a subscription price lower than the current market value of
the common stock. A subscription right is freely transferable. The Fund may
invest up to 5% of the value of its net assets in rights.

HIGH YIELD, HIGH RISK SECURITIES. Because of the ability of the Fund to
invest in certain high yield, high risk convertible and other fixed-income
securities (commonly known as "junk bonds"), the Investment Manager and/or
Sub-Advisor must take into account the special nature of such securities and
certain special considerations in assessing the risks associated with such
investments. Although the growth of the high yield securities market in the
1980s had paralleled a long economic expansion, since that time many issuers
have been affected by adverse economic and market conditions. It should be
recognized that an economic downturn or increase in interest rates is likely
to have a negative effect on the high yield bond market and on the value of
the high yield securities held by the Fund, as well as on the ability of the
securities' issuers to repay principal and interest on their borrowings.

The prices of high yield securities have been found to be less sensitive
to changes in prevailing interest rates than higher-rated investments but
more sensitive to adverse economic changes or individual corporate
developments. During an economic downturn or substantial period of rising
interest rates, highly leveraged issuers may experience financial stress
which would adversely affect their ability to service their principal and
interest payment obligations, to meet their projected business goals or to

7
<PAGE>
obtain additional financing. If the issuer of a fixed-income security owned
by the Fund defaults, the Fund may incur additional expenses to seek
recovery. In addition, periods of economic uncertainty and change can be
expected to result in an increased volatility of market prices of high yield
securities and a concomitant volatility in the net asset value of a share of
the Fund.

The secondary market for high yield securities may be less liquid than the
markets for higher quality securities and, as such, may have an adverse
effect on the market prices of certain securities. The limited liquidity of
the market may also adversely affect the ability of the Trustees to arrive at
a fair value for certain high yield securities at certain times and could
make it difficult for the Fund to sell certain securities. In addition, new
laws and potential new laws may have an adverse effect upon the value of high
yield securities and a concomitant negative impact upon the net asset value
of a share of the Fund.

YEAR 2000. The investment management services provided to the Fund by the
Investment Manager and the Sub-Advisor and the services provided to
shareholders by the Distributor and the Transfer Agent depend on the smooth
functioning of their computer systems. Many computer software systems in use
today cannot recognize the year 2000, but revert to 1900 or some other date,
due to the manner in which dates were encoded and calculated. That failure
could have a negative impact on the handling of securities trades, pricing
and account services. The Investment Manager, the Sub-Advisor, the
Distributor and the Transfer Agent have been actively working on necessary
changes to their own computer systems to prepare for the year 2000 and expect
that their systems will be adapted before that date, but there can be no
assurance that they will be successful, or that interaction with other
non-complying computer systems will not impair their services at that time.

In addition, it is possible that the markets for securities in which the
Fund invests may be detrimentally affected by computer failures throughout
the financial services industry beginning January 1, 2000. Improperly
functioning trading systems may result in settlement problems and liquidity
issues. In addition, corporate and governmental data processing errors may
result in production problems for individual companies and overall economic
uncertainties. Earnings of individual issuers will be affected by remediation
costs, which may be substantial and may be reported inconsistently in U.S.
and foreign financial statements. Accordingly, the Fund's investments may be
adversely affected.

C. FUND POLICIES/INVESTMENT RESTRICTIONS

The investment objective, policies and restrictions listed below have been
adopted by the Fund as fundamental policies. Under the Investment Company Act
of 1940 (the "Investment Company Act"), a fundamental policy may not be
changed without the vote of a majority of the outstanding voting securities
of the Fund. The Investment Company Act defines a majority as the lesser of
(a) 67% or more of the shares present at a meeting of shareholders, if the
holders of 50% of the outstanding shares of the Fund are present or
represented by proxy; or (b) more than 50% of the outstanding shares of the
Fund. For purposes of the following restrictions: (i) all percentage
limitations apply immediately after a purchase or initial investment; and
(ii) any subsequent change in any applicable percentage resulting from market
fluctuations or other changes in total or net assets does not require
elimination of any security from the portfolio.

The Fund will:

1. Seek long-term capital appreciation.

The Fund may not:

1. As to 75% of its assets, invest more than 5% of the value of its total
assets in the securities of any one issuer (other than obligations
issued, or guaranteed by, the United States Government, its agencies
or instrumentalities).

2. As to 75% of its assets, purchase more than 10% of all outstanding
voting securities or any class of securities of any one issuer.

3. Invest 25% or more of the value of its total assets in securities of
issuers in any one industry. This restriction does not apply to
obligations issued or guaranteed by the United States Government, its
agencies or instrumentalities or to cash equivalents.

8
<PAGE>
4. Invest more than 5% of the value of its total assets in securities of
issuers having a record, together with predecessors, of less than 3
years of continuous operation. This restriction does not apply to any
obligation of the United States Government, its agencies or
instrumentalities.

5. Purchase securities of other investment companies, except in
connection with a merger, consolidation, reorganization or acquisition
of assets.

6. Purchase or sell real estate or interests therein (including limited
partnership interests), although the Fund may purchase securities of
issuers which engage in real estate operations and securities secured
by real estate or interests therein.

7. Purchase oil, gas or other mineral leases, rights or royalty
contracts, or exploration or development programs, except that the
Fund may invest in the securities of companies which operate, invest
in, or sponsor these programs.

8. Purchase or sell commodities or commodities contracts.

9. Borrow money, except that the Fund may borrow from a bank for
temporary or emergency purposes, in amounts not exceeding 5% of its
total assets (not including the amount borrowed).

10. Pledge its assets or assign or otherwise encumber them except to
secure permitted borrowings. For the purpose of this restriction,
collateral arrangements with respect to initial or variation margin
for futures are not deemed to be pledges of assets.

11. Issue senior securities as defined in the Investment Company Act,
except insofar as the Fund may be deemed to have issued a senior
security by reason of: (a) entering into any repurchase agreement; (b)
purchasing any securities on a when-issued or delayed delivery basis;
(c) borrowing money; or (d) lending portfolio securities.

12. Make loans of money or securities, except: (a) by the purchase of
portfolio securities; (b) by investment in repurchase agreements; or
(c) by lending its portfolio securities.

13. Make short sales of securities.

14. Purchase securities on margin, except for short-term loans as are
necessary for the clearance of portfolio securities. The deposit or
payment by the Fund of initial or variation margin in connection with
futures contracts or related options thereon is not considered the
purchase of a security on margin.

15. Engage in the underwriting of securities, except insofar as the Fund
may be deemed an underwriter under the Securities Act in disposing of
a portfolio security.

16. Invest for the purpose of exercising control or management of any
other issuer.

17. Purchase warrants if, as a result, the Fund would then have either
more than 5% of its net assets invested in warrants or more than 2% of
its net assets invested in warrants not listed on the New York or
American Stock Exchange.

18. Invest in options or futures contracts.

If a percentage restriction is adhered to at the time of investment, a
later increase or decrease in percentage resulting from a change in values of
portfolio securities or amount of total or net assets will not be considered
a violation of any of the foregoing restrictions.

III. MANAGEMENT OF THE FUND
- -----------------------------------------------------------------------------

A. BOARD OF TRUSTEES

The Board of Trustees of the Fund oversees the management of the Fund but
does not itself manage the Fund. The Trustees review various services
provided by or under the direction of the

9
<PAGE>
Investment Manager to ensure that the Fund's general investment policies and
programs are properly carried out. The Trustees also conduct their review to
ensure that administrative services are provided to the Fund in a
satisfactory manner.

Under state law, the duties of the Trustees are generally characterized as
a duty of loyalty and a duty of care. The duty of loyalty requires a Trustee
to exercise his or her powers in the interest of the Fund and not the
Trustee's own interest or the interest of another person or organization. A
Trustee satisfies his or her duty of care by acting in good faith with the
care of an ordinarily prudent person and in a manner the Trustee reasonably
believes to be in the best interest of the Fund and its shareholders.

B. MANAGEMENT INFORMATION

TRUSTEES AND OFFICERS. The Board of the Fund consists of eight (8)
Trustees. These same individuals also serve as trustees for all of the Morgan
Stanley Dean Witter Funds. Six Trustees (75% of the total number) have no
affiliation or business connection with the Investment Manager or any of its
affiliated persons and do not own any stock or other securities issued by the
Investment Manager's parent company, MSDW or the Sub-Advisor's parent
company, TCW. These are the "disinterested" or "independent" Trustees. The
other two Trustees (the "Management Trustees") are affiliated with the
Investment Manager. All of the Independent Trustees also serve as Independent
Trustees of "Discover Brokerage Index Series," a mutual fund for which the
Investment Manager is the investment advisor.

The Trustees and executive officers of the Fund, their principal business
occupations during the last five years and their affiliations, if any, with
the Investment Manager or the Sub-Advisor, and with the 84 Morgan Stanley
Dean Witter Funds are shown below.

<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- -------------------------------------------- -------------------------------------------------------
<S> <C>
Michael Bozic (58).......................... Vice Chairman of Kmart Corporation (since December,
Trustee 1998); Director or Trustee of the Morgan Stanley Dean
c/o Kmart Corporation Witter Funds and Discover Brokerage Index Series; formerly
3100 West Big Beaver Road Chairman and Chief Executive Officer of Levitz Furniture
Troy, Michigan Corporation (November, 1995-November, 1998) and President
and Chief Executive Officer of Hills Department Stores
(May, 1991-July, 1995); formerly variously Chairman,
Chief Executive Officer, President and Chief Operating
Officer (1987-1991) of the Sears Merchandise Group of
Sears, Roebuck and Co.; Director of Eaglemark Financial
Services, Inc. and Weirton Steel Corporation.

Charles A. Fiumefreddo* (65)................ Chairman, Director or Trustee and Chief Executive Officer
Chairman of the Board, Chief of the Morgan Stanley Dean Witter Funds, the TCW/DW Funds and
Executive Officer and Trustee Discover Brokerage Index Series; formerly Chairman, Chief
Two World Trade Center Executive Officer and Director of the Investment Manager,
New York, New York the Distributor and MSDW Services Company; Executive Vice
President and Director of Dean Witter Reynolds; Chairman
and Director of the Transfer Agent; formerly Director
and/or officer of various MSDW subsidiaries (until June,
1998).

10
<PAGE>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- -------------------------------------------- -------------------------------------------------------

Edwin J. Garn (66).......................... Director or Trustee of the Morgan Stanley Dean Witter
Trustee Funds and Discover Brokerage Index Series; formerly
c/o Huntsman Corporation United States Senator (R-Utah)(1974-1992) and
500 Huntsman Way Chairman, Senate Banking Committee (1980-1986);
Salt Lake City, Utah formerly Mayor of Salt Lake City, Utah (1971-1974);
formerly Astronaut, Space Shuttle Discovery (April
12-19, 1985); Vice Chairman, Huntsman Corporation;
Director of Franklin Covey (time management systems),
BMW Bank of North America, Inc., United Space Alliance
(joint venture between Lockheed Martin and the Boeing
Company) and Nuskin Asia Pacific (multilevel
marketing); member of the board of various civic and
charitable organizations.

Wayne E. Hedien (65)........................ Retired; Director or Trustee of the Morgan Stanley Dean
Trustee Witter Funds and Discover Brokerage Index Series;
c/o Gordon Altman Butowsky Director of The PMI Group, Inc. (private mortgage
Weitzen Shalov & Wein insurance); Trustee and Vice Chairman of The
Counsel to the Independent Trustees Field Museum of Natural History; formerly associated
114 West 47th Street with the Allstate Companies (1966-1994), most recently
New York, New York as Chairman of The Allstate Corporation (March,
1993-December, 1994) and Chairman and Chief Executive
Officer of its wholly-owned subsidiary, Allstate
Insurance Company (July, 1989-December, 1994); director
of various other business and charitable organizations.

Dr. Manuel H. Johnson (50).................. Senior Partner, Johnson Smick International, Inc., a
Trustee consulting firm; Co-Chairman and a founder of the Group
c/o Johnson Smick International, Inc. of Seven Council (G7C), an international economic
1133 Connecticut Avenue, N.W. commission; Chairman of the Audit Committee and Director
Washington, D.C. or Trustee of the Morgan Stanley Dean Witter Funds, the
TCW/DW Funds and Discover Brokerage Index Series; Trustee
of the TCW/DW Funds; Trustee of Discover Brokerage Index
Series; Director of NASDAQ (since June, 1995); Director of
Greenwich Capital Markets, Inc. (broker-dealer) and NVR,
Inc. (home construction); Chairman and Trustee of the
Financial Accounting Foundation (oversight organization of
the Financial Accounting Standards Board); formerly Vice
Chairman of the Board of Governors of the Federal Reserve
System (1986-1990) and Assistant Secretary of the U.S.
Treasury.

Michael E. Nugent (62)...................... General Partner, Triumph Capital, L.P., a private
Trustee investment partnership; Chairman of the Insurance
c/o Triumph Capital, L.P. Committee and Director or Trustee of the Morgan Stanley
237 Park Avenue Dean Witter Funds, the TCW/DW Funds and Discover Brokerage
New York, New York Index Series; formerly Vice President, Bankers Trust
Company and BT Capital Corporation (1984-1988); director
of various business organizations.
11
<PAGE>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- -------------------------------------------- -------------------------------------------------------

Philip J. Purcell* (55)..................... Chairman of the Board of Directors and Chief Executive
Trustee Officer of MSDW, Dean Witter Reynolds and Novus Credit
1585 Broadway Services Inc.; Director of the Distributor; Director or
New York, New York Trustee of the Morgan Stanley Dean Witter Funds and
Discover Brokerage Index Series; Director and/or officer
of various MSDW subsidiaries.

John L. Schroeder (68)...................... Retired; Chairman of the Derivatives Committee and
Trustee Director or Trustee of the Morgan Stanley Dean Witter
c/o Gordon Altman Butowsky Funds, the TCW/DW Funds and Discover Brokerage Index
Weitzen Shalov & Wein Series; Director of Citizens Utilities Company; formerly
Counsel to the Independent Trustees Executive Vice President and Chief Investment Officer of
114 West 47th Street Home Insurance Company (August, 1991-September, 1995).
New York, New York

Mitchell M. Merin (45) ..................... President and Chief Operating Officer of Asset Management
President of MSDW (since December, 1998); President and Director
Two World Trade Center (since April, 1997) and Chief Executive Officer (since
New York, New York June, 1998) of the Investment Manager and MSDW Services
Company; Chairman, Chief Executive Officer and Director
of the Distributor (since June, 1998); Chairman and Chief
Executive Officer (since June, 1998) and Director (since
January, 1998) of the Transfer Agent; Director of various
MSDW subsidiaries; President of the Morgan Stanley Dean
Witter Funds, the TCW/DW Funds and Discover Brokerage Index
Series (since May, 1999); previously Chief Strategic
Officer of the Investment Manager and MSDW Services Company
and Executive Vice President of the Distributor (April,
1997-June, 1998), Vice President of the Morgan Stanley Dean
Witter Funds, the TCW/DW Funds and Discover Brokerage Index
Series (May, 1997-April, 1999), and Executive Vice
President of Dean Witter, Discover & Co.

Barry Fink (44)............................. Senior Vice President (since March, 1997) and Secretary
Vice President, and General Counsel (since February, 1997) and Director
Secretary and General Counsel (since July, 1998) of the Investment Manager and MSDW
Two World Trade Center Services Company; Senior Vice President (since March,
New York, New York 1997) and Assistant Secretary and Assistant General
Counsel (since February, 1997) of the Distributor;
Assistant Secretary of Dean Witter Reynolds (since
August, 1996); Vice President, Secretary and General
Counsel of the Morgan Stanley Dean Witter Funds and the
TCW/DW Funds (since February, 1997); Vice President,
Secretary and General Counsel of Discover Brokerage
Index Series; previously First Vice President (June,
1993-February, 1997), Vice President and Assistant
Secretary and Assistant General Counsel of the
Investment Manager and MSDW Services Company and
Assistant Secretary of the Morgan Stanley Dean Witter
Funds and the TCW/DW Funds.

12
<PAGE>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- -------------------------------------------- -------------------------------------------------------
Douglas S. Foreman (41) .................... Managing Director of the Advisor, Trust Company of the
Vice President West and TCW Asset Management Company (since May,
865 South Figueroa Street 1994); previously portfolio manager with Putnam
Los Angeles, California Investments.

Christopher J. Ainley (40) ................. Managing Director of the Advisor, Trust Company of the
Vice President West and TCW Asset Management Company (since February,
865 South Figueroa Street 1996); formerly Senior Vice President of the Advisor,
Los Angeles, California Trust Company of the West and TCW Asset Management
Company (May, 1994-February, 1996); previously
portfolio manager with Putnam Investments.

Thomas F. Caloia (53) ...................... First Vice President and Assistant Treasurer of the
Treasurer Manager and MSDW Advisors; Treasurer of the TCW/DW
Two World Trade Center Funds, the Morgan Stanley Dean Witter Funds and
New York, New York Discover Brokerage Index Series.
</TABLE>

- ------------
* Denotes Trustees who are "interested persons" of the Fund as defined by the
Investment Company Act.

In addition, Ronald E. Robison, Executive Vice President, Chief
Administrative Officer and Director of the Investment Manager and MSDW Services
Company, Robert S. Giambrone, Senior Vice President of the Investment Manager,
MSDW Services Company, the Distributor and the Transfer Agent and Director of
the Transfer Agent, and Joseph J. McAlinden, Executive Vice President and Chief
Investment Officer of the Investment Manager and Director of the Transfer
Agent, and Peter M. Avelar, Kenton J. Hinchliffe, Mark Bavoso, and Jonathan R.
Page, Senior Vice Presidents of the Investment Manager, are Vice Presidents of
the Fund,

In addition, Frank Bruttomesso, Marilyn K. Cranney, Lou Anne D. McInnis,
Carsten Otto and Ruth Rossi, First Vice Presidents and Assistant General
Counsels of the Investment Manager and MSDW Services Company, and Todd Lebo,
Vice President and Assistant General Counsel of the Investment Manager and
MSDW Services Company, are Assistant Secretaries of the Fund.

INDEPENDENT TRUSTEES AND THE COMMITTEES. Law and regulation establish both
general guidelines and specific duties for the Independent Trustees. The
Morgan Stanley Dean Witter Funds seek as Independent Trustees individuals of
distinction and experience in business and finance, government service or
academia; these are people whose advice and counsel are in demand by others
and for whom there is often competition. To accept a position on the Funds'
Boards, such individuals may reject other attractive assignments because the
Funds make substantial demands on their time. Indeed, by serving on the
Funds' Boards, certain Trustees who would otherwise be qualified and in
demand to serve on bank boards would be prohibited by law from doing so. All
of the Independent Trustees serve as members of the Audit Committee. In
addition, three of the Trustees, including two Independent Trustees, serve as
members of the Derivatives Committee and the Insurance Committee.

The Independent Trustees are charged with recommending to the full Board
approval of management, advisory and administration contracts, Rule 12b-1
plans and distribution and underwriting agreements; continually reviewing
Fund performance; checking on the pricing of portfolio securities, brokerage
commissions, transfer agent costs and performance, and trading among Funds in
the same complex; and approving fidelity bond and related insurance coverage
and allocations, as well as other matters that arise from time to time. The
Independent Trustees are required to select and nominate individuals to fill
any Independent Trustee vacancy on the Board of any Fund that has a Rule
12b-1 plan of distribution. Most of the Morgan Stanley Dean Witter Funds have
a Rule 12b-1 plan.

The Audit Committee is charged with recommending to the full Board the
engagement or discharge of the Fund's independent accountants; directing
investigations into matters within the scope of the independent accountants'
duties, including the power to retain outside specialists; reviewing with the
independent accountants the audit plan and results of the auditing
engagement; approving professional services provided by the independent
accountants and other accounting firms prior to the performance

13
<PAGE>

of the services; reviewing the independence of the independent accountants;
considering the range of audit and non-audit fees; reviewing the adequacy of
the Fund's system of internal controls; and preparing and submitting Committee
meeting minutes to the full Board.

The Board of each Fund has a Derivatives Committee to approve parameters
for and monitor the activities of the Fund with respect to derivative
investments, if any, made by the Fund.

Finally, the Board of each Fund has formed an Insurance Committee to
review and monitor the insurance coverage maintained by the Fund.

ADVANTAGES OF HAVING SAME INDIVIDUALS AS INDEPENDENT TRUSTEES FOR ALL
MORGAN STANLEY DEAN WITTER FUNDS. The Independent Trustees and the Funds'
management believe that having the same Independent Trustees for each of the
Morgan Stanley Dean Witter Funds avoids the duplication of effort that would
arise from having different groups of individuals serving as Independent
Trustees for each of the Funds or even of sub-groups of Funds. They believe
that having the same individuals serve as Independent Trustees of all the
Funds tends to increase their knowledge and expertise regarding matters which
affect the Fund complex generally and enhances their ability to negotiate on
behalf of each Fund with the Fund's service providers. This arrangement also
precludes the possibility of separate groups of Independent Trustees arriving
at conflicting decisions regarding operations and management
of the Funds and avoids the cost and confusion that would likely ensue.
Finally, having the same Independent Trustees serve on all Fund Boards
enhances the ability of each Fund to obtain, at modest cost to each separate
Fund, the services of Independent Trustees, of the caliber, experience and
business acumen of the individuals who serve as Independent Trustees of the
Morgan Stanley Dean Witter Funds.

TRUSTEE AND OFFICER INDEMNIFICATION. The Fund's Declaration of Trust
provides that no Trustee, officer, employee or agent of the Fund is liable to
the Fund or to a shareholder, nor is any Trustee, officer, employee or agent
liable to any third persons in connection with the affairs of the Fund,
except as such liability may arise from his/her or its own bad faith, willful
misfeasance, gross negligence or reckless disregard of his/her or its duties.
It also provides that all third persons shall look solely to the Fund
property for satisfaction of claims arising in connection with the affairs of
the Fund. With the exceptions stated, the Declaration of Trust provides that
a Trustee, officer, employee or agent is entitled to be indemnified against
all liability in connection with the affairs of the Fund.

C. COMPENSATION

The Fund pays each Independent Trustee an annual fee of $800 plus a per
meeting fee of $50 for meetings of the Board of Trustees, the Independent
Trustees or Committees of the Board of Trustees attended by the Trustee (the
Fund pays the Chairman of the Audit Committee an additional annual fee of $750,
and the Chairman of the Derivatives and Insurance Committees additional annual
fees of $500). If a Board meeting and a meeting of the Independent Trustees or
a Committee meeting, or a meeting of the Independent Trustees and/or more than
one Committee meeting, take place on a single day, the Trustees are paid a
single meeting fee by the Fund. The Fund also reimburses such Trustees for
travel and other out-of-pocket expenses incurred by them in connection with
attending such meetings. Trustees and officers of the Fund who are or have been
employed by the Investment Manager or an affiliated company receive no
compensation or expense reimbursement from the Fund for their services as
Trustee.

At their June 8, 1999 meeting, shareholders elected or re-elected, as
appropriate, the following eight individuals to the Fund's Board of Trustees
to serve for indefinite terms: Michael Bozic, Charles A. Fiumefreddo, Edwin
Jacob (Jake) Garn, Wayne E. Hedien, Dr. Manuel H. Johnson, Michael E. Nugent,
Philip J. Purcell and John L. Schroeder. Messrs. Fiumefreddo, Johnson, Nugent
and Schroeder previously served as Trustees of the Fund and were previously
elected by shareholders. Messrs. Bozic, Garn, Hedien and Purcell previously
held directorships or trusteeships with the other Morgan Stanley Dean Witter
Funds and were elected to replace Messrs. Argue, DeMartini, Larkin and Stern
who resigned as Trustees. Messrs. Bozic, Garn, Hedien and Purcell commenced
service at the time the new Investment Management Agreement took effect on
June 25, 1999. Prior to the February 25, 1999

14
<PAGE>

election of Messrs. Bozic, Garn, Hedien and Purcell and the resignation of
Messrs. Argue, DeMartini, Larkin and Stern, the Fund paid each Independent
Trustee an annual fee of $2,225 plus a per meeting fee of $200 for meetings of
the Board of Trustees or committees of the Board attended by the Trustee. The
fee paid by the Fund to the Chairman of the Audit Committee and the Chairman of
the Independent Trustees remained unchanged after the February 26, 1998
election.

The following table illustrates the compensation that the Fund paid to
those of its Independent Trustees who were Trustees of the Fund on November
30, 1998, for the fiscal year ended on that date.

FUND COMPENSATION

<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF INDEPENDENT TRUSTEE FROM THE FUND
- --------------------------- ---------------
<S> <C>
Dr. Manuel H. Johnson....... $5,456
Michael E. Nugent........... 5,456
John L. Schroeder........... 5,656
</TABLE>

At such time as the Fund has paid fees to the Independent Trustees for a
full fiscal year at the lower current compensation rates set forth above, and
assuming that during such fiscal year the Fund holds the same number of
meetings of the Board, the Independent Trustees and the Committees as were held
by the other Morgan Stanley Dean Witter Funds during the calendar year ended
December 31, 1998, it is estimated that the compensation paid to each
Independent Trustee during such fiscal year will be $1,650 and an additional
$750 to Dr. Johnson who serves as Chairman of the Audit Committee.

The following table illustrates the compensation paid to the Fund's
Independent Trustees for the calendar year ended December 31, 1998 for services
to the 85 Morgan Stanley Dean Witter Funds and, in the case of Messrs. Johnson,
Nugent and Schroeder, the 11 TCW/DW Funds that were in operation at December
31, 1998. With respect to Messrs. Johnson, Nugent and Schroeder, the TCW/DW
Funds are included solely because of a limited exchange privilege between those
Funds and five Morgan Stanley Dean Witter Money Market Funds. No compensation
was paid to the Fund's Independent Trustees by Discover Brokerage Index Series
for the calendar year ended December 31, 1998.

CASH COMPENSATION FROM MORGAN STANLEY DEAN WITTER FUNDS AND TCW/DW FUNDS

<TABLE>
<CAPTION>
TOTAL CASH
COMPENSATION
FOR SERVICES TO
FOR SERVICE 85 MORGAN
AS DIRECTOR OR FOR SERVICE AS STANLEY DEAN
TRUSTEE AND TRUSTEE AND WITTER FUNDS
COMMITTEE MEMBER COMMITTEE MEMBER AND 11
NAME OF OF 85 MORGAN STANLEY DEAN OF 11 TCW/DW TCW/DW
INDEPENDENT TRUSTEE WITTER FUNDS FUNDS FUNDS
- --------------------- ------------------------- ---------------- ---------------
<S> <C> <C> <C>
Michael Bozic......... $120,150 -- $120,150
Edwin J. Garn......... 132,450 -- 132,450
Wayne E. Hedien....... 132,350 -- 132,350
Dr. Manuel H.
Johnson.............. 128,400 $62,331 190,731
Michael E. Nugent .... 132,450 62,131 194,581
John L. Schroeder .... 132,450 64,731 197,181
</TABLE>

As of the date of this Statement of Additional Information, 55 of the
Morgan Stanley Dean Witter Funds, not including the Fund, have adopted a
retirement program under which an Independent Trustee
- ------------
(1) An Eligible Trustee may elect alternative payments of his or her
retirement benefits based upon the combined life expectancy of the
Eligible Trustee and his or her spouse on the date of such Eligible
Trustee's retirement. In addition, the Eligible Trustee may elect that
the surviving spouse's periodic payment of benefits will be equal to a
lower percentage of the periodic amount when both spouses were alive.
The amount estimated to be payable under this method, through the
remainder of the later of the lives of the Eligible Trustee and spouse,
will be the actuarial equivalent of the Regular Benefit.

15
<PAGE>
who retires after serving for at least five years (or such lesser period as may
be determined by the Board) as an Independent Director or Trustee of any Morgan
Stanley Dean Witter Fund that has adopted the retirement program (each such
Fund referred to as an "Adopting Fund" and each such Trustee referred to as an
"Eligible Trustee") is entitled to retirement payments upon reaching the
eligible retirement age (normally, after attaining age 72), Annual payments are
based upon length of service.

Currently, upon retirement, each Eligible Trustee is entitled to receive
from the Adopting Fund, commencing as of his or her retirement date and
continuing for the remainder of his or her life, an annual retirement benefit
(the "Regular Benefit") equal to 30.22% of his or her Eligible Compensation
plus 0.5036667% of such Eligible Compensation for each full month of service
as an Independent Director or Trustee of any Adopting Fund in excess of five
years up to a maximum of 60.44% after ten years of service. The foregoing
percentages may be changed by the Board(1). "Eligible Compensation" is
one-fifth of the total compensation earned by such Eligible Trustee for
service to the Adopting Fund in the five year period prior to the date of the
Eligible Trustee's retirement. Benefits under the retirement program are not
secured or funded by the Adopting Funds.

The following table illustrates the retirement benefits accrued to the
Fund's Independent Trustees by the 55 Morgan Stanley Dean Witter Funds (not
including the Fund) for the year ended December 31,
1998, and the estimated retirement benefits for the Independent Trustees, to
commence upon their retirement, from the 55 Morgan Stanley Dean Witter Funds
as of December 31, 1998.

RETIREMENT BENEFITS FROM ALL MORGAN STANLEY DEAN WITTER FUNDS

<TABLE>
<CAPTION>
FOR ALL ADOPTING FUNDS
--------------------------------
ESTIMATED
CREDITED
YEARS ESTIMATED RETIREMENT BENEFITS ESTIMATED ANNUAL
OF SERVICE AT PERCENTAGE OF ACCRUED AS EXPENSES BENEFITS UPON RETIREMENT
NAME OF RETIREMENT ELIGIBLE BY ALL FROM ALL
INDEPENDENT TRUSTEE (MAXIMUM 10) COMPENSATION ADOPTING FUNDS ADOPTING FUNDS(2)
- --------------------- --------------- --------------- ------------------- ------------------------
<S> <C> <C> <C> <C>
Michael Bozic ........ 10 60.44% $22,377 $52,250
Edwin J. Garn......... 10 60.44 35,225 52,250
Wayne E. Hedien....... 9 51.37 41,979 44,413
Dr. Manuel H.
Johnson.............. 10 60.44 14,047 52,250
Michael E. Nugent ... 10 60.44 25,336 52,250
John L. Schroeder ... 8 50.37 45,117 44,343
</TABLE>

- ------------
(2) Based on current levels of compensation. Amount of annual benefits also
varies depending on the Trustee's elections described in Footnote (1)
on page 15.

IV. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
- -----------------------------------------------------------------------------

The following persons owned 5% or more of the Class A Shares of the Fund
as of May 31, 1999:

As of the date of this Statement of Additional Information, the aggregate
number of shares of beneficial interest of the Fund owned by the Fund's
officers and Trustees as a group was less than 1% of the Fund's shares of
beneficial interest outstanding.

V. MANAGEMENT, INVESTMENT ADVICE AND OTHER SERVICES
- -----------------------------------------------------------------------------

A. INVESTMENT MANAGER AND SUB-ADVISOR

The Investment Manager to the Fund is Morgan Stanley Dean Witter Advisors
Inc., a Delaware corporation, whose address is Two World Trade Center, New
York, New York 10048. The Investment Manager is a wholly-owned subsidiary of
MSDW, a Delaware corporation. MSDW is a preeminent global financial services
firm that maintains leading market positions in each of its three primary
businesses: securities, asset management and credit services.

The Sub-Advisor is TCW Funds Management, Inc., a wholly-owned subsidiary
of TCW, whose direct and indirect subsidiaries provide a variety of trust,
investment management and investment advisory services. The Sub-Advisor is
headquartered at 865 South Figueroa Street, Suite 1800, Los Angeles,

16
<PAGE>

California 90017. Robert A. Day, who is Chairman of the Board of Directors of
TCW, may be deemed to be a control person of the Sub-Advisor by virtue of the
aggregate ownership by Mr. Day and his family of more than 25% of the
outstanding voting stock of TCW. The Sub-Advisor was retained to provide
sub-advisory services to the Fund effective June 25, 1999.

Pursuant to an Investment Management Agreement (the "Management
Agreement") with the Investment Manager, the Fund has retained the Investment
Manager to provide administrative services, manage its business affairs and
supervise the investment of the Fund's assets. The Fund pays the Investment
Manager monthly compensation calculated daily by applying the following
annual rates to the net assets of the Fund determined as of the close of each
business day: 0.75% to the portion of daily net assets not exceeding $500
million; and 0.725% to the portion of daily net assets exceeding $500
million. The management fee is allocated among the Classes pro rata based on
the net assets of the Fund attributable to each Class. The Investment Manager
has retained its wholly-owned subsidiary, MSDW Services Company, to perform
administrative services for the Fund.

Under a Sub-Advisory Agreement (the "Sub-Advisory Agreement") between the
Sub-Advisor and the Investment Manager, the Sub-Advisor provides the Fund with
investment advice and portfolio management relating to the Fund's investments
in securities, subject to the overall supervision of the Investment Manager.
The Investment Manager pays the Sub-Advisor monthly compensation equal to 40%
of the Investment Manager's fee.

Prior to June, 1998, the Fund was managed by MSDW Services Company,
pursuant to a management agreement between the Fund and MSDW Services Company
and was advised by TCW Funds Management, Inc. pursuant to an advisory
agreement between the Fund and TCW Funds Management, Inc. As part of an
overall consolidation of the TCW/DW Family of Funds and the Morgan Stanley
Dean Witter Family of Funds, the Fund's Board of Trustees recommended on
February 25, 1999 and shareholders of the Fund approved on June 8, 1999 the
Investment Management Agreement between the Fund and Morgan Stanley Dean
Witter Advisors Inc. The Board also recommended and shareholders also
approved the Sub-Advisory Agreement between MSDW Advisors and TCW Funds
Management, Inc. The fee rate under the Management Agreement with MSDW
Advisors with respect to the portion of the Fund's average daily net assets
not exceeding $500 million is 0.25% lower and with respect to the portion of
the Fund's average daily net assets exceeding $500 million is 0.275% lower
than the total aggregate fee rate that was in effect under the previous
management agreement and advisory agreement combined. For the fiscal years
ended November 30, 1996, 1997 and 1998 MSDW Services Company accrued total
compensation under the old management agreement in the amounts of $793,626,
$1,081,715 and $ 1,085,682, respectively. For the same periods, TCW Funds
Management, Inc. accrued total compensation in its capacity of adviser to the
Fund in the amounts of $529,084, $721,143 and $723,788, respectively.

B. PRINCIPAL UNDERWRITER

The Fund's principal underwriter is the Distributor (which has the same
address as the Investment Manager). In this capacity, the Fund's shares are
distributed by the Distributor. The Distributor has entered into a Selected
Dealer Agreement with Dean Witter Reynolds, which through its own sales
organization sells shares of the Fund. In addition, the Distributor may enter
into similar agreements with other selected broker-dealers. The Distributor,
a Delaware corporation, is a wholly-owned subsidiary of MSDW.

The Distributor bears all expenses it may incur in providing services
under the Distribution Agreement. These expenses include the payment of
commissions for sales of the Fund's shares and incentive compensation to
Financial Advisors. The Distributor also pays certain expenses in connection
with the distribution of the Fund's shares, including the costs of preparing,
printing and distributing advertising or promotional materials, and the costs
of printing and distributing prospectuses and supplements thereto used in
connection with the offering and sale of the Fund's shares. The Fund bears
the costs of initial typesetting, printing and distribution of prospectuses
and supplements thereto to shareholders. The Fund also bears the costs of
registering the Fund and its shares under federal and state securities laws
and pays filing fees in accordance with state securities laws.

17
<PAGE>

The Fund and the Distributor have agreed to indemnify each other against
certain liabilities, including liabilities under the Securities Act. Under
the Distribution Agreement, the Distributor uses its best efforts in
rendering services to the Fund, but in the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations, the
Distributor is not liable to the Fund or any of its shareholders for any
error of judgment or mistake of law or for any act or omission or for any
losses sustained by the Fund or its shareholders.

C. SERVICES PROVIDED BY THE INVESTMENT MANAGER, THE SUB-ADVISOR AND FUND
EXPENSES PAID BY THIRD PARTIES

The Investment Manager supervises the investment of the Fund's assets. The
Investment Manager obtains and evaluates the information and advice relating
to the economy, securities markets, and specific securities as it considers
necessary or useful to continuously oversee the management of the assets of
the Fund in a manner consistent with its investment objective.

Under the terms of the Management Agreement, the Investment Manager also
maintains certain of the Fund's books and records and furnishes, at its own
expense, the office space, facilities, equipment, clerical help, bookkeeping
and certain legal services as the Fund may reasonably require in the conduct
of its business, including the preparation of prospectuses, proxy statements
and reports required to be filed with federal and state securities
commissions (except insofar as the participation or assistance of independent
accountants and attorneys is, in the opinion of the Investment Manager,
necessary or desirable). In addition, the Investment Manager 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 service, heat, light, power and other utilities provided to the
Fund.

Pursuant to the Sub-Advisory Agreement, the Sub-Advisor has been retained,
subject to the overall supervision of the Investment Manager, to continuously
furnish investment advice concerning individual security selections, asset
allocations and overall economic trends.

Expenses not expressly assumed by the Investment Manager under the
Management Agreement or by the Distributor, will be paid by the Fund. These
expenses will be allocated among the four Classes of shares pro rata based on
the net assets of the Fund attributable to each Class, except as described
below. Such expenses include, but are not limited to: expenses of the Plan of
Distribution pursuant to Rule 12b-1; charges and expenses of any registrar,
custodian, stock transfer and dividend disbursing agent; brokerage
commissions; taxes; engraving and printing share certificates; registration
costs of the Fund and its shares under federal and state securities laws; the
cost and expense of printing, including typesetting, and distributing
prospectuses of the Fund and supplements thereto to the Fund's shareholders;
all expenses of shareholders' and Directors' meetings and of preparing,
printing and mailing of proxy statements and reports to shareholders; fees
and travel expenses of Directors or members of any advisory board or
committee who are not employees of the Investment Manager or any corporate
affiliate of the Investment Manager; all expenses incident to any dividend,
withdrawal or redemption options; charges and expenses of any outside service
used for pricing of the Fund's shares; fees and expenses of legal counsel,
including counsel to the Directors who are not interested persons of the Fund
or of the Investment Manager (not including compensation or expenses of
attorneys who are employees of the Investment Manager); fees and expenses of
the Fund's independent accountants; membership dues of industry associations;
interest on Fund borrowings; postage; insurance premiums on property or
personnel (including officers and Directors) of the Fund which inure to its
benefit; extraordinary expenses (including, but not limited to, legal claims
and liabilities and litigation costs and any indemnification relating
thereto); and all other costs of the Fund's operation. The 12b-1 fees
relating to a particular Class will be allocated directly to that Class. In
addition, other expenses associated with a particular Class (except advisory
or custodial fees) may be allocated directly to that Class, provided that
such expenses are reasonably identified as specifically attributable to that
Class and the direct allocation to that Class is approved by the Directors.

The Management Agreement provides that in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations thereunder, the Investment Manager is not liable to the Fund or
any of its investors for any act or omission by the Investment Manager or for
any losses sustained by the Fund or its investors.

The Management Agreement will remain in effect from year to year, provided
continuance of the Management Agreement is approved at least annually by the
vote of the holders of a majority, as defined

18
<PAGE>

in the Investment Company Act, of the outstanding shares of the Fund, or by the
Directors; provided that in either event such continuance is approved annually
by the vote of a majority of the Directors who are not parties to the
Management Agreement or the Sub-Advisory Agreement or are "independent
Directors," which votes must be cast in person at a meeting called for the
purpose of voting on such approval.

D. DEALER REALLOWANCES

Upon notice to selected broker-dealers, the Distributor may reallow up to
the full applicable front-end sales charge during periods specified in such
notice. During periods when 90% or more of the sales charge is reallowed,
such selected broker-dealers may be deemed to be underwriters as that term is
defined in the Securities Act.

E. RULE 12B-1 PLAN

The Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 under
the Investment Company Act (the "Plan") pursuant to which each Class, other
than Class D, pays the Distributor compensation accrued daily and payable
monthly at the following annual rates: 0.25% and 1.0% of the average daily
net assets of Class A and Class C, respectively, and, with respect to Class
B, 1.0% of the lesser of: (a) the average daily aggregate gross sales of the
Fund's Class B shares since the inception of the Fund (not including
reinvestment of dividends or capital gains distributions), less the average
daily aggregate net asset value of the Fund's Class B 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 average daily
net assets of Class B shares.

The Distributor also receives the proceeds of front-end sales charges
("FSCs") and of contingent deferred sales charges ("CDSCs") imposed on
certain redemptions of shares, which are separate and apart from payments
made pursuant to the Plan. The Distributor has informed the Fund that it
and/or Dean Witter Reynolds received the proceeds of CDSCs and FSCs, for the
last three fiscal years ended November 30, in approximate amounts as provided
in the table below (the Distributor did not retain any of these amounts).

<TABLE>
<CAPTION>
1998 1997 1996
----------------------- ---------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Class A... FSCs:(1) $ 15,552 FSCs:(1) $ 3,000 FSCs: N/A(2)
CDSCs: $ 0 CDSCs: $ 0 CDSCs: N/A(2)
Class B... CDSCs: $679,862 CDSCs: $946,000 CDSCs: $280,000(3)
Class C... CDSCs: $ 372 CDSCs: $ 0 CDSCs: N/A(2)
</TABLE>

- ------------
(1) FSCs apply to Class A only.
(2) This Class commenced operations on July 28, 1997.
(3) For the period February 27, 1996 (commencement of operations) through
November 30, 1996.

The Distributor has informed the Fund that the entire fee payable by Class
A and a portion of the fees payable by each of Class B and Class C each year
pursuant to the Plan equal to 0.25% of such Class' average daily net assets
are currently each characterized as a "service fee" under the Rules of the
National Association of Securities Dealers, Inc. (of which the Distributor is
a member). The "service fee" is a payment made for personal service and/or
the maintenance of shareholder accounts. The remaining portion of the Plan
fees payable by a Class, if any, is characterized as an "asset-based sales
charge" as such is defined by the Rules of the Association.

Under the Plan and as required by Rule 12b-1, the Trustees receive and
review promptly after the end of each calendar quarter a written report
provided by the Distributor of the amounts expended under the Plan and the
purpose for which such expenditures were made. Class B shares of the Fund
accrued amounts payable to the Distributor under the Plan, during the fiscal
year ended November 30, 1998, of $1,616,961. This amount is equal to 0.90% of
the average daily net assets of Class B for the fiscal year and was
calculated pursuant to clause (a) of the compensation formula under the Plan.
For the fiscal

19
<PAGE>

year ended November 30, 1998, Class A and Class C shares of the Fund accrued
payments under the Plan amounting to $1,092 and $2,906, respectively, which
amounts are equal to 0.25% and 1.00% of the average daily net assets of Class A
and Class C, respectively, for the fiscal year.

The Plan was adopted in order to permit the implementation of the Fund's
method of distribution. Under this distribution method the Fund offers four
Classes, each with a different distribution arrangement.

With respect to Class A shares, Dean Witter Reynolds compensates its
Financial Advisors by paying them, from proceeds of the FSC, commissions for
the sale of Class A shares, currently a gross sales credit of up to 5.0% of
the amount sold (except as provided in the following sentence) and an annual
residual commission, currently a residual of up to 0.25% of the current value
of the respective accounts for which they are the Financial Advisors or
dealers of record in all cases. On orders of $1 million or more (for which no
sales charge was paid) or net asset value purchases by employer-sponsored
employee benefit plans, whether or not qualified under the Internal Revenue
Code, for which the Transfer Agent serves as Trustee or Dean Witter Reynolds
Retirement Plan Services serves as recordkeeper pursuant to a written
Recordkeeping Services Agreement ("MSDW Eligible Plans"), MSDW Advisors
compensates Financial Advisors by paying them, from its own funds, a gross
sales credit of 1.0% of the amount sold.

With respect to Class B shares, Dean Witter Reynolds compensates its
Financial Advisors by paying them, from its own funds, commissions for the
sale of Class B shares, currently a gross sales credit of up to 5.0% of the
amount sold (except as provided in the following sentence) and an annual
residual commission, currently a residual of up to 0.25% of the current value
(not including reinvested dividends or distributions) of the amount sold in
all cases. In the case of Class B shares purchased on or after July 28, 1997
by MSDW Eligible Plans, Dean Witter Reynolds compensates its Financial
Advisors by paying them, from its own funds, a gross sales credit of 3.0% of
the amount sold.

With respect to Class C shares, Dean Witter Reynolds compensates its
Financial Advisors by paying them, from its own funds, commissions for the
sale of Class C shares, currently a gross sales credit of up to 1.0% of the
amount sold and an annual residual commission, currently up to 1.0% of the
current value of the respective accounts for which they are the Financial
Advisors of record.

With respect to Class D shares other than shares held by participants in
MSDW Advisor's mutual fund asset allocation program, MSDW Advisors
compensates Dean Witter Reynolds' Financial Advisors by paying them, from its
own funds, commissions for the sale of Class D shares, currently a gross
sales credit of up to 1.0% of the amount sold. There is a chargeback of 100%
of the amount paid if the Class D shares are redeemed in the first year and a
chargeback of 50% of the amount paid if the Class D shares are redeemed in
the second year after purchase. The Manager also compensates Dean Witter
Reynolds' Financial Advisors by paying them, from its own funds, an annual
residual commission, currently up to 0.10% of the current value of the
respective accounts for which they are the Financial Advisors of record (not
including accounts of participants in MSDW Advisor's mutual fund asset
allocation program).

The gross sales credit is a charge which reflects commissions paid by Dean
Witter Reynolds to its Financial Advisors and Dean Witter Reynolds'
Fund-associated distribution-related expenses, including sales compensation,
and overhead and other branch office distribution-related expenses including
(a) the expenses of operating Dean Witter Reynolds' branch offices in
connection with the sale of Fund shares, including lease costs, the salaries
and employee benefits of operations and sales support personnel, utility
costs, communications costs and the costs of stationery and supplies; (b) the
costs of client sales seminars; (c) travel expenses of mutual fund sales
coordinators to promote the sale of Fund shares; and (d) other expenses
relating to branch promotion of Fund sales.

The distribution fee that the Distributor receives from the Fund under the
Plan, in effect, offsets distribution expenses incurred under the Plan on
behalf of the Fund and, in the case of Class B shares, opportunity costs,
such as the gross sales credit and an assumed interest charge thereon
("carrying charge"). In the Distributor's reporting of the distribution
expenses to the Fund, in the case of Class B

20
<PAGE>

shares, such assumed interest (computed at the "broker's call rate") has been
calculated on the gross credit as it is reduced by amounts received by the
Distributor under the Plan and any contingent deferred sales charges received
by the Distributor upon redemption of shares of the Fund. No other interest
charge is included as a distribution expense in the Distributor's calculation
of its distribution costs for this purpose. The broker's call rate is the
interest rate charged to securities brokers on loans secured by exchange-listed
securities.

The Fund is authorized to reimburse expenses incurred or to be incurred in
promoting the distribution of the Fund's Class A and Class C shares and in
servicing shareholder accounts. Reimbursement will be made through payments
at the end of each month. The amount of each monthly payment may in no event
exceed an amount equal to a payment at the annual rate of 0.25%, in the case
of Class A, and 1.0%, in the case of Class C, of the average net assets of
the respective Class during the month. No interest or other financing
charges, if any, incurred on any distribution expenses on behalf of Class A
and Class C will be reimbursable under the Plan. With respect to Class A, in
the case of all expenses other than expenses representing the service fee, and,
with respect to Class C, in the case of all expenses other than expenses
representing a gross sales credit or a residual to Financial Advisors and other
authorized financial representatives, such amounts shall be determined at the
beginning of each calendar quarter by the Trustees, including, a majority of
the Independent Trustees. Expenses representing the service fee (for Class A)
or a gross sales credit or a residual to Financial Advisors and other
authorized financial representatives (for Class C) may be reimbursed without
prior determination. In the event that the Distributor proposes that monies
shall be reimbursed for other than such expenses, then in making quarterly
determinations of the amounts that may be reimbursed by the Fund, the
Distributor will provide and the Trustees will review a quarterly budget of
projected distribution expenses to be incurred on behalf of the Fund, together
with a report explaining the purposes and anticipated benefits of incurring
such expenses. The Trustees will determine which particular expenses, and the
portions thereof, that may be borne by the Fund, and in making such a
determination shall consider the scope of the Distributor's commitment to
promoting the distribution of the Fund's Class A and Class C shares.

Each Class paid 100% of the amounts accrued under the Plan with respect to
that Class for the fiscal year ended November 30, 1998 to the Distributor.
The Distributor and Dean Witter Reynolds estimate that they have spent,
pursuant to the Plan, $15,417,031 on behalf of Class B since the inception of
the Plan. It is estimated that this amount was spent in approximately the
following ways: (i) 10.70% ($1,650,179)--advertising and promotional
expenses; (ii) 0.72% ($111,402)--printing and mailing of prospectuses for
distribution to other than current shareholders; and (iii) 88.58%
($13,655,450)--other expenses, including the gross sales credit and the
carrying charge, of which 8.49% ($1,158,906) represents carrying charges,
37.43% ($5,111,086) represents commission credits to Dean Witter Reynolds
branch offices and other selected broker-dealers for payments of commissions
to Financial Advisors and other authorized financial representatives, and
54.08% ($7,385,458) represents overhead and other branch office
distribution-related expenses. The amounts accrued by Class A and Class C for
distribution during the fiscal year ended November 30, 1998 were for expenses
which relate to compensation of sales personnel and associated overhead
expenses.

In the case of Class B shares, at any given time, the expenses of
distributing shares of the Fund may be more or less than the total of (i) the
payments made by the Fund pursuant to the Plan; and (ii) the proceeds of
CDSCs paid by investors upon redemption of shares. For example, if $1 million
in expenses in distributing Class B shares of the Fund had been incurred and
$750,000 had been received as described in (i) and (ii) above, the excess
expense would amount to $250,000. The Distributor has advised the Fund that
in the case of Class B shares the excess distribution expenses, including the
carrying charge designed to approximate the opportunity costs incurred by
Dean Witter Reynolds which arise from it having advanced monies without
having received the amount of any sales charges imposed at the time of sale
of the Fund's Class B shares, totaled $8,805,273 as of November 30, 1998 (the
end of the Fund's fiscal year), which was equal to 4.15% of the net assets of
Class B on such date. Because there is no requirement under the Plan that the
Distributor be reimbursed for all distribution expenses with respect to Class
B shares or any requirement that the Plan be continued from year to year,
this

21
<PAGE>

excess amount does not constitute a liability of the Fund. Although there is no
legal obligation for the Fund to pay expenses incurred in excess of payments
made to the Distributor under the Plan and the proceeds of CDSCs paid by
investors upon redemption of shares, if for any reason the Plan is terminated,
the Trustees will consider at that time the manner in which to treat such
expenses. Any cumulative expenses incurred, but not yet recovered through
distribution fees or CDSCs, may or may not be recovered through future
distribution fees or CDSCs.

In the case of Class A and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 1.0% of the average daily
net assets of Class A or Class C, respectively, will not be reimbursed by the
Fund through payments in any subsequent year, except that expenses
representing a gross sales commission credited to Morgan Stanley Dean Witter
Financial Advisors and other authorized financial representatives at the time
of sale may be reimbursed in the subsequent calendar year. The Distributor
has advised the Fund that unreimbursed expenses representing a gross sales
commission credited to Morgan Stanley Dean Witter Financial Advisors and
other authorized financial representatives at the time of sale totaled $3,174
in the case of Class C at December 31, 1998 (the end of the calendar year),
which amount was equal to 0.29% of the net assets of Class C on such date, and
that there were no such expenses that may be reimbursed in the subsequent year
in the case of Class A on such date. No interest or other financing charges
will be incurred on any Class A or Class C distribution expenses incurred by
the Distributor under the Plan or on any unreimbursed expenses due to the
Distributor pursuant to the Plan.

No interested person of the Fund nor any Independent Trustee has any
direct financial interest in the operation of the Plan except to the extent
that the Distributor, the Manager, Dean Witter Reynolds, MSDW Advisors or
certain of their employees may be deemed to have such an interest as a result
of benefits derived from the successful operation of the Plan or as a result
of receiving a portion of the amounts expended thereunder by the Fund.

On an annual basis, the Trustees, including a majority of the Independent
Trustees, consider whether the Plan should be continued. Prior to approving
the last continuation of the Plan, the Trustees requested and received from
the Distributor and reviewed all the information which they deemed necessary
to arrive at an informed determination. In making their determination to
continue the Plan, the Trustees considered: (1) the Fund's experience under
the Plan and whether such experience indicates that the Plan is operating as
anticipated; (2) the benefits the Fund had obtained, was obtaining and would
be likely to obtain under the Plan, including that: (a) the Plan is essential
in order to give Fund investors a choice of alternatives for payment of
distribution and service charges and to enable the Fund to continue to grow
and avoid a pattern of net redemptions which, in turn, are essential for
effective investment management; and (b) without the compensation to
individual brokers and the reimbursement of distribution and account
maintenance expenses of Dean Witter Reynolds' branch offices made possible by
the 12b-1 fees, Dean Witter Reynolds could not establish and maintain an
effective system for distribution, servicing of Fund shareholders and
maintenance of shareholder accounts; and (3) what services had been provided
and were continuing to be provided under the Plan to the Fund and its
shareholders. Based upon their review, the Trustees, including each of the
Independent Trustees, determined that continuation of the Plan would be in
the best interest of the Fund and would have a reasonable likelihood of
continuing to benefit the Fund and its shareholders. In the Trustees'
quarterly review of the Plan, they will consider its continued
appropriateness and the level of compensation provided therein.

The Plan may not be amended to increase materially the amount to be spent
for the services described therein without approval by the shareholders of
the affected Class or Classes of the Fund, and all material amendments to the
Plan must also be approved by the Trustees in the manner described above. The
Plan may be terminated at any time, without payment of any penalty, by vote
of a majority of the Independent Trustees or by a vote of a majority of the
outstanding voting securities of the Fund (as defined in the Investment
Company Act) on not more than thirty days' written notice to any other party
to the Plan. So long as the Plan is in effect, the election and nomination of
Independent Trustees shall be committed to the discretion of the Independent
Trustees.
22
<PAGE>

F. OTHER SERVICE PROVIDERS

(1) TRANSFER AGENT/DIVIDEND-PAYING AGENT

Morgan Stanley Dean Witter Trust FSB is the Transfer Agent for the Fund's
shares and the Dividend Disbursing Agent for payment of dividends and
distributions on Fund shares and Agent for shareholders under various
investment plans. The principal business address of the Transfer Agent is
Harborside Financial Center, Plaza Two, Jersey City, New Jersey 07311.

(2) CUSTODIAN AND INDEPENDENT ACCOUNTANTS

The Bank of New York, 90 Washington Street, New York, New York 10286, is
the Custodian of the Fund's assets. Any of the Fund's cash balances with the
Custodian in excess of $100,000 are unprotected by federal deposit insurance.
These balances may, at times, be substantial.

PricewaterhouseCoopers LLP, 1177 Avenue of the Americas, New York, New
York 10036, serves as the independent accountants of the Fund. The
independent accountants are responsible for auditing the annual financial
statements of the Fund.

(3) AFFILIATED PERSONS

The Transfer Agent is an affiliate of the Investment Manager, and of the
Distributor. As Transfer Agent and Dividend Disbursing Agent, the Transfer
Agent's responsibilities include maintaining shareholder accounts, disbursing
cash dividends and reinvesting dividends, processing account registration
changes, handling purchase and redemption transactions, mailing prospectuses
and reports, mailing and tabulating proxies, processing share certificate
transactions, and maintaining shareholder records and lists. For these
services, the Transfer Agent receives a per shareholder account fee from the
Fund and is reimbursed for its out-of-pocket expenses in connection with such
services.

VI. BROKERAGE ALLOCATION AND OTHER PRACTICES
- -----------------------------------------------------------------------------

A. BROKERAGE TRANSACTIONS

Subject to the general supervision of the Trustees, the Investment Manager
and/or Sub-Advisor are responsible for decisions to buy and sell securities
for the Fund, the selection of brokers and dealers to effect the
transactions, and the negotiation of brokerage commissions, if any. Purchases
and sales of securities on a stock exchange are effected through brokers who
charge a commission for their services. In the over-the-counter market,
securities are generally traded on a "net" basis with dealers acting as
principal for their own accounts without a stated commission, although the
price of the security usually includes a profit to the dealer. The Fund also
expects that securities will be purchased at times in underwritten offerings
where the price includes a fixed amount of compensation, generally referred
to as the underwriter's concession or discount. On occasion, the Fund may
also purchase certain money market instruments directly from an issuer, in
which case no commissions or discounts are paid.

During the period February 27, 1996 (commencement of operations) through
November 30, 1996, and for the fiscal years ended November 30, 1997 and 1998,
the Fund paid a total of $197,506, $170,759 and $88,027, respectively, in
brokerage commissions.

B. COMMISSIONS

Pursuant to an order of the SEC, the Fund may effect principal
transactions in certain money market instruments with Dean Witter Reynolds.
The Fund will limit its transactions with Dean Witter Reynolds to U.S.
Government and government agency securities, bank money instruments (i.e.,
certificates of deposit and bankers' acceptances) and commercial paper. The
transactions will be effected with Dean Witter Reynolds only when the price
available from Dean Witter Reynolds is better than that available from other
dealers.

During the fiscal years ended January 31, 1997, 1998 and 1999, the Fund
did not effect any principal transactions with Dean Witter Reynolds.

Consistent with the policy described above, brokerage transactions in
securities listed on exchanges or admitted to unlisted trading privileges may
be effected through Dean Witter Reynolds, Morgan Stanley & Co. and other
affiliated brokers and dealers. In order for an affiliated broker or dealer
to effect any

23
<PAGE>

portfolio transactions on an exchange for the Fund, the commissions, fees or
other remuneration received by the affiliated broker or dealer must be
reasonable and fair compared to the commissions, fees or other remuneration
paid to other brokers in connection with comparable transactions involving
similar securities being purchased or sold on an exchange during a comparable
period of time. This standard would allow the affiliated broker or dealer to
receive no more than the remuneration which would be expected to be received by
an unaffiliated broker in a commensurate arm's-length transaction. Furthermore,
the Trustees, including the Independent Trustees, have adopted procedures which
are reasonably designed to provide that any commissions, fees or other
remuneration paid to an affiliated broker or dealer are consistent with the
foregoing standard. The Fund does not reduce the management fee it pays to the
Investment Manager by any amount of the brokerage commissions it may pay to an
affiliated broker or dealer.

During the fiscal years ended November 30, 1997 and 1998 there were no
brokerage fees paid to Dean Witter Reynolds. During the period June 1 through
November 30, 1997 and during the fiscal year ended November 30, 1998, the
Fund paid a total of $1,235 and $645, respectively, in brokerage commissions
to Morgan Stanley & Co., which broker-dealer became an affiliate of the
Investment Manager on May 31, 1997 upon consummation of the merger of Dean
Witter, Discover & Co. with Morgan Stanley Group Inc. During the fiscal year
ended November 30, 1998, the brokerage commissions paid to Morgan Stanley &
Co. represented approximately 0.73% of the total brokerage commissions paid
by the Fund for this period and were paid on account of transactions having
an aggregate dollar value equal to approximately 0.93% of the aggregate
dollar value of all portfolio transactions of the Fund during the year for
which commissions were paid.

C. BROKERAGE SELECTION

The policy of the Fund regarding purchases and sales of securities for its
portfolio is that primary consideration will be given to obtaining the most
favorable prices and efficient executions of transactions. Consistent with
this policy, when securities transactions are effected on a stock exchange,
the Fund's policy is to pay commissions which are considered fair and
reasonable without necessarily determining that the lowest possible
commissions are paid in all circumstances. The Fund believes that a
requirement always to seek the lowest possible commission cost could impede
effective portfolio management and preclude the Fund and the Investment
Manager and/or Sub-Advisor from obtaining a high quality of brokerage and
research services. In seeking to determine the reasonableness of brokerage
commissions paid in any transaction, the Investment Manager and/or
Sub-Advisor relies upon its experience and knowledge regarding commissions
generally charged by various brokers and on its judgment in evaluating the
brokerage and research services received from the broker effecting the
transaction. These determinations are necessarily subjective and imprecise,
as in most cases an exact dollar value for those services is not
ascertainable.

In seeking to implement the Fund's policies, the Investment Manager and
the Sub-Advisor effect transactions with those brokers and dealers who the
Investment Manager and/or Sub-Advisor believes provide the most favorable
prices and are capable of providing efficient executions. If the Investment
Manager and/or Sub-Advisor believes the prices and executions are obtainable
from more than one broker or dealer, it may give consideration to placing
portfolio transactions with those brokers and dealers who also furnish
research and other services to the Fund or the Investment Manager and the
Sub-Advisor. The services may include, but are not limited to, any one or
more of the following: information as to the availability of securities for
purchase or sale; statistical or factual information or opinions pertaining
to investment; wire services; and appraisals or evaluations of portfolio
securities. The information and services received by the Investment Manager
and/or Sub-Advisor from brokers and dealers may be of benefit to the
Investment Manager and/or Sub-Advisor in the management of accounts of some
of their other clients and may not in all cases benefit the Fund directly.

The Investment Manager and the Sub-Advisor currently serve as investment
advisors to a number of clients, including other investment companies, and
may in the future act as investment manager or advisor to others. It is the
practice of the Investment Manager and the Sub-Advisor to cause purchase and
sale transactions to be allocated among the Fund and others whose assets they
manage in such manner as they deem equitable. In making such allocations
among the Fund and other client accounts,

24
<PAGE>

various factors may be considered, including the respective investment
objectives, the relative size of portfolio holdings of the same or comparable
securities, the availability of cash for investment, the size of investment
commitments generally held and the opinions of the persons responsible for
managing the portfolios of the Fund and other client accounts. In the case of
certain initial and secondary public offerings, the Investment Manager utilizes
a pro rata allocation process based on the size of the funds involved and the
number of shares available from the public offering.

D. DIRECTED BROKERAGE

During the fiscal year ended November 30, 1998, the Fund paid $87,382 in
brokerage commissions in connection with transactions in the aggregate amount
of $45,585,903 to brokers because of research services provided.

E. REGULAR BROKER-DEALERS

During the fiscal year ended November 30, 1998, the Fund did not purchase
securities issued by brokers or dealers that were among the ten brokers or
the ten dealers that executed transactions for or with the Fund in the
largest dollar amounts during the year.

VII. CAPITAL STOCK AND OTHER SECURITIES
- -----------------------------------------------------------------------------

The shareholders of the Fund are entitled to a full vote for each full
share of beneficial interest held. The Fund is authorized to issue an
unlimited number of shares of beneficial interest. All shares of beneficial
interest of the Fund are of $0.01 par value and are equal as to earnings,
assets and voting privileges except that each Class will have exclusive
voting privileges with respect to matters relating to distribution expenses
borne solely by such Class or any other matter in which the interests of one
Class differ from the interests of any other Class. In addition, Class B
shareholders will have the right to vote on any proposed material increase in
Class A's expenses, if such proposal is submitted separately to Class A
shareholders. Also, Class A, Class B and Class C bear expenses related to the
distribution of their respective shares.

The Fund's Declaration of Trust permits the Trustees to authorize the
creation of additional series of shares (the proceeds of which would be
invested in separate, independently managed portfolios) and additional
Classes of shares within any series. The Trustees have not presently
authorized any such additional series or Classes of shares other than as set
forth in the Prospectus.

The Fund is not required to hold annual meetings of shareholders and in
ordinary circumstances the Fund does not intend to hold such meetings. The
Trustees may call special meetings of shareholders for action by shareholder
vote as may be required by the Investment Company Act or the Declaration of
Trust. Under certain circumstances, the Trustees may be removed by action of
the Trustees or by the shareholders.

Under Massachusetts law, shareholders of a business trust may, under
certain limited circumstances, be held personally liable as partners for the
obligations of the Fund. However, the Declaration of Trust contains an
express disclaimer of shareholder liability for acts or obligations of the
Fund, requires that notice of such Fund obligations include such disclaimer,
and provides for indemnification out of the Fund's property for any
shareholder held personally liable for the obligations of the Fund. Thus, the
risk of a shareholder incurring financial loss on account of shareholder
liability is limited to circumstances in which the Fund itself would be
unable to meet its obligations. Given the above limitations on shareholder
personal liability, and the nature of the Fund's assets and operations, the
possibility of the Fund being unable to meet its obligations is remote and
thus, in the opinion of Massachusetts counsel to the Fund, the risk to Fund
shareholders of personal liability is remote.

All of the Trustees have been elected by the shareholders of the Fund,
most recently at a Special Meeting of Shareholders held on June 8, 1999. The
Trustees themselves have the power to alter the number and the terms of
office of the Trustees (as provided for in the Declaration of Trust), and
they may at any time lengthen or shorten their own terms or make their terms
of unlimited duration and appoint their own successors, provided that always
at least a majority of the Trustees has been elected by the shareholders of
the Fund.

25
<PAGE>

VIII. PURCHASE, REDEMPTION AND PRICING OF SHARES
- -----------------------------------------------------------------------------

A. PURCHASE/REDEMPTION OF SHARES

Information concerning how Fund shares are offered to the public (and how
they are redeemed and exchanged) is provided in the Fund's Prospectus.

TRANSFER AGENT AS AGENT. With respect to the redemption or repurchase of
Fund shares, the application of proceeds to the purchase of new shares in the
Fund or any other Morgan Stanley Dean Witter Fund and the general
administration of the exchange privilege, the Transfer Agent acts as agent
for the Distributor and for the shareholder's authorized broker-dealer, if
any, in the performance of such functions. With respect to exchanges,
redemptions or repurchases, the Transfer Agent shall be liable for its own
negligence and not for the default or negligence of its correspondents or for
losses in transit. The Fund shall not be liable for any default or negligence
of the Transfer Agent, the Distributor or any authorized broker-dealer.

The Distributor and any authorized broker-dealer have appointed the
Transfer Agent to act as their agent in connection with the application of
proceeds of any redemption of Fund shares to the purchase of shares of any
other continuously offered Morgan Stanley Dean Witter Fund and the general
administration of the exchange privilege. No commission or discounts will be
paid to the Distributor or any authorized broker-dealer for any transaction
pursuant to the exchange privilege.

TRANSFERS OF SHARES. In the event a shareholder requests a transfer of
Fund shares to a new registration, the shares will be transferred without
sales charge at the time of transfer. With regard to the status of shares
which are either subject to the CDSC or free of such charge (and with regard
to the length of time shares subject to the charge have been held), any
transfer involving less than all of the shares in an account will be made on
a pro rata basis (that is, by transferring shares in the same proportion that
the transferred shares bear to the total shares in the account immediately
prior to the transfer). The transferred shares will continue to be subject to
any applicable CDSC as if they had not been so transferred.

EXCHANGING SHARES OF CLASSES WITH A CDSC

When exchanging shares of a Class of the Fund that imposes a CDSC, shares
that are not subject to a CDSC because they were (i) purchased more than one
year ago (for Class A and Class C) or six years ago (for Class B) or (ii)
acquired through reinvestment of dividends or distributions (all such shares
referred to as "Free Shares") will be exchanged first. After exchanging such
Free Shares the shares subject to a CDSC that were held the longest will be
exchanged next. Shares purchased during the same month are deemed to be held
for the same length of time. (For shares held for the same length of time but
subject to different CDSC rates, the shares with the lower CDSC rate will be
exchanged first.) When exchanging shares subject to a CDSC, you should know
that the CDSC rate will be calculated on such exchanged shares based on the
lesser of: (a) the purchase price of those shares; or (b) their current net
asset value at the time of the exchange. Accordingly, any appreciation in
value on such exchanged shares is not subject to a CDSC. When exchanging a
portion of shares deemed to be held for the same length of time, shares
representing any appreciation in value (and therefore, such shares will not
be subject to any CDSC) will be exchanged first.

B. OFFERING PRICE

The Fund's Class B, Class C and Class D shares are offered at net asset
value per share and the Class A shares are offered at net asset value per
share plus any applicable FSC which is distributed among the Fund's
Distributor, Dean Witter Reynolds and other authorized dealers as described
in Section "V. Management, Investment Advice and Other Services--F. Rule
12b-1 Plan."

The price of Fund shares, called "net asset value," is based on the value
of the Fund's portfolio securities. Net asset value per share of each Class
is calculated by dividing the value of the portion of the Fund's securities
and other assets attributable to that

26
<PAGE>

Class, less the liabilities attributable to that Class, by the number of shares
of that Class outstanding. The assets of each Class of shares are invested in a
single portfolio. The net asset value of each Class, however, will differ
because the Classes have different ongoing fees.

In the calculation of the Fund's net asset value: (1) an equity portfolio
security listed or traded on the New York or American Stock Exchange or other
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 a security is
traded on more than one exchange, the security is valued on the exchange
designated as the primary market pursuant to procedures adopted by the
Trustees); and (2) all other portfolio securities for which over-the-counter
market quotations are readily available are valued at the latest bid price.
When market quotations are not readily available, including circumstances under
which it is determined by the Investment Manager or the Sub-Advisor 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 Fund's
Trustees. For valuation purposes, quotations of foreign portfolio securities,
other assets and liabilities and forward contracts stated in foreign currency
are translated into U.S. dollar equivalents at the prevailing market rates
prior to the close of the New York Stock Exchange.

Short-term debt securities with remaining maturities of sixty days or less
at the time of purchase are valued at amortized cost, unless the Trustees
determine such does not reflect the securities' market value, in which case
these securities will be valued at their fair value as determined by the
Trustees.

Certain of the Fund's portfolio securities may be valued by an outside
pricing service approved by the Fund's Trustees. The pricing service may
utilize a matrix system incorporating security quality, maturity and coupon
as the evaluation model parameters, and/or research evaluations by its staff,
including review of broker-dealer market price quotations in determining what
it believes is the fair valuation of the portfolio securities valued by such
pricing service.

Generally, trading in foreign securities, as well as corporate bonds, U.S.
Government securities and money market instruments, is substantially
completed each day at various times prior to the close of the New York Stock
Exchange. The values of such securities used in computing the net asset value
of the Fund's shares are determined as of such times. Foreign currency
exchange rates are also generally determined prior to the close of the New
York Stock Exchange. Occasionally, events which may affect the values of such
securities and such exchange rates may occur between the times at which they
are determined and the close of the New York Stock Exchange and will
therefore not be reflected in the computation of the Fund's net asset value.
If events that may affect the value of such securities occur during such
period, then these securities may be valued at their fair value as determined
in good faith under procedures established by and under the supervision of
the Trustees.

IX. TAXATION OF THE FUND AND SHAREHOLDERS
- -----------------------------------------------------------------------------

The Fund generally will make two basic types of distributions: ordinary
dividends and long-term capital gain distributions. These two types of
distributions are reported differently on a shareholder's income tax return
and they are also subject to different rates of tax. The tax treatment of the
investment activities of the Fund will affect the amount and timing and
character of the distributions made by the Fund. Tax issues relating to the
Fund are not generally a consideration for shareholders such as tax exempt
entities and tax-advantaged retirement vehicles such as an IRA or 401(k)
plan. Shareholders are urged to consult their own tax professionals regarding
specific questions as to federal, state or local taxes.

INVESTMENT COMPANY TAXATION. The Fund intends to remain qualified as a
regulated investment company under Subchapter M of the Internal Revenue Code
of 1986. As such, the Fund will not be subject to federal income tax on its
net investment income and capital gains, if any, to the extent that it
distributes such income and capital gains to its shareholders.

The Fund generally intends to distribute sufficient income and gains so
that the Fund will not pay corporate income tax on its earnings. The Fund
also generally intends to distribute to its shareholders in

27
<PAGE>

each calendar year a sufficient amount of ordinary income and capital gains to
avoid the imposition of a 4% excise tax. However, the Fund may instead
determine to retain all or part of any net long-term capital gains in any year
for reinvestment. In such event, the Fund will pay federal income tax (and
possibly excise tax) on such retained gains.

Gains or losses on sales of securities by the Fund will be long-term
capital gains or losses if the securities have a tax holding period of more
than one year. Gains or losses on the sale of securities with a tax holding
period of one year or less will be short-term gains or losses.

Under certain tax rules, the Fund may be required to accrue a portion of
any discount at which certain securities are purchased as income each year
even though the Fund receives no payments in cash on the security during the
year. To the extent that the Fund invests in such securities, it would be
required to pay out such accrued discount as an income distribution in each
year in order to avoid taxation at the Fund level. Such distributions will be
made from the available cash of the Fund or by liquidation of portfolio
securities if necessary. If a distribution of cash necessitates the liquidation
of portfolio securities, the Investment Manager and/or Sub-Advisor will select
which securities to sell. The Fund may realize a gain or loss from such sales.
In the event the Fund realizes net capital gains from such transactions, its
shareholders may receive a larger capital gain distribution, if any, than they
would in the absence of such transactions.

TAXATION OF DIVIDENDS AND DISTRIBUTIONS. Shareholders normally will have
to pay federal income taxes, and any state and/or local income taxes, on the
dividends and other distributions they receive from the Fund. Such dividends
and distributions, to the extent that they are derived from net investment
income or short-term capital gains, are taxable to the shareholder as
ordinary income regardless of whether the shareholder receives such payments
in additional shares or in cash.

Distributions of net long-term capital gains, if any, are taxable to
shareholders as long-term capital gains regardless of how long a shareholder
has held the Fund's shares and regardless of whether the distribution is
received in additional shares or in cash. The Taxpayer Relief Act of 1997
reduced the maximum tax on long-term capital gains applicable to individuals
from 28% to 20%.

Shareholders are generally taxed on any ordinary dividend or capital gain
distributions from the Fund in the year they are actually distributed.
However, if any such dividends or distributions are declared in October,
November or December and paid in January then such amounts will be treated
for tax purposes as received by the shareholders on December 31, to
shareholders of record of such month.

Subject to certain exceptions, a corporate shareholder may be eligible for
a 70% dividends received deduction to the extent that the Fund earns and
distributes qualifying dividends from its investments. Distributions of net
capital gains by the Fund will not be eligible for the dividends received
deduction.

Shareholders who are not citizens or residents of the United States and
certain foreign entities may be subject to withholding of United States tax
on distributions made by the Fund of investment income and short term capital
gains.

After the end of each calendar year, shareholders will be sent full
information on their dividends and capital gain distributions for tax
purposes, including the portion taxable as ordinary income, the portion
taxable as long-term capital gains and the amount of any dividends eligible
for the federal dividends received deduction for corporations.

PURCHASES AND REDEMPTIONS AND EXCHANGES OF FUND SHARES. Any dividend or
capital gains distribution received by a shareholder from any investment
company will have the effect of reducing the net asset value of the
shareholder's stock in that company by the exact amount of the dividend or
capital gains distribution. Furthermore, such dividends and capital gains
distributions are subject to federal income taxes. If the net asset value of
the shares should be reduced below a shareholder's cost as a result of the
payment of dividends or the distribution of realized long-term capital gains,
such payment or distribution would be in part a return of the shareholder's
investment but nonetheless would be taxable to the shareholder. Therefore, an
investor should consider the tax implications of purchasing Fund shares
immediately prior to a distribution record date.

28
<PAGE>

In general, a sale of shares results in capital gain or loss, and for
individual shareholders, is taxable at a federal rate dependent upon the
length of time the shares were held. A redemption of a shareholder's Fund
shares is normally treated as a sale for tax purposes. Fund shares held for a
period of one year or less will, for tax purposes, generally result in
short-term gains or losses and those held for more than one year generally
result in long-term gain or loss. Any loss realized by shareholders upon a
redemption of shares within six months of the date of their purchase will be
treated as a long-term capital loss to the extent of any distributions of net
long-term capital gains with respect to such shares during the six-month
period.

Gain or loss on the sale or redemption of shares in the Fund is measured
by the difference between the amount received and the tax basis of the
shares. Shareholders should keep records of investments made (including shares
acquired through reinvestment of dividends and distributions) so they can
compute the tax basis of their shares. Under certain circumstances a
shareholder may compute and use an average cost basis in determining the gain
or loss on the sale or redemption of shares.

Exchanges of Fund shares for shares of any other continuously offered
Morgan Stanley Dean Witter Fund are also subject to similar tax treatment.
Such an exchange is treated for tax purposes as a sale of the original shares
in the first fund, followed by the purchase of shares in the second fund.

If a shareholder realizes a loss on the redemption or exchange of a fund's
shares and reinvests in that fund's shares within 30 days before or after the
redemption or exchange, the transactions may be subject to the "wash sale"
rules, resulting in a postponement of the recognition of such loss for tax
purposes.

X. UNDERWRITERS
- -----------------------------------------------------------------------------

The Fund's shares are offered to the public on a continuous basis. The
Distributor, as the principal underwriter of the shares, has certain
obligations under the Distribution Agreement concerning the distribution of
the shares. These obligations and the compensation the Distributor receives
are described above in the sections titled "Principal Underwriter" and "Rule
12b-1 Plans".

XI. CALCULATION OF PERFORMANCE DATA
- -----------------------------------------------------------------------------

From time to time, the Fund may quote its "total return" in advertisements
and sales literature. These figures are computed separately for Class A,
Class B, Class C and Class D shares. The Fund's "average annual total return"
represents an annualization of the Fund's total return over a particular
period and is computed by finding the annual percentage rate which will
result in the ending redeemable value of a hypothetical $1,000 investment
made at the beginning of a one, five or ten year period, or for the period
from the date of commencement of operations, if shorter than any of the
foregoing. The ending redeemable value is reduced by any contingent deferred
sales charge ("CDSC") at the end of the one, five, ten year or other period.
For the purpose of this calculation, it is assumed that all dividends and
distributions are reinvested. The formula for computing the average annual
total return involves a percentage obtained by dividing the ending redeemable
value by the amount of the initial investment (which in the case of Class A
shares is reduced by the Class A initial sales charge), taking a root of the
quotient (where the root is equivalent to the number of years in the period)
and subtracting 1 from the result. The average annual total returns for Class
B for the one year period ended November 30, 1998 and the date of inception
through November 30, 1998 were 37.49% and 16.29%, respectively. The average
annual total returns of Class A for the fiscal year ended November 30, 1998
and for the period July 28, 1997 (inception of the Class) through November
30, 1998 were 35.85% and 25.92%, respectively. The average annual total
returns of Class C for the fiscal year ended November 30, 1998 and for the
period July 28, 1997 (inception of the Class) through November 30, 1998 were
41.27% and 30.14%, respectively. The average annual total returns of Class D
for the fiscal year ended November 30, 1998 and for the period July 28, 1997
(inception of the Class) through November 30, 1998 were 43.80% and 31.46%,
respectively.

In addition, the Fund may advertise its total return for each Class over
different periods of time by means of aggregate, average, year-by-year or
other types of total return figures. These calculations may

29
<PAGE>

or may not reflect the imposition of the maximum front-end sales charge for
Class A or the deduction of the CDSC for each of Class B and Class C which, if
reflected, would reduce the performance quoted. For example, the average annual
total return of the Fund may be calculated in the manner described above, but
without deduction for any applicable sales charge. Based on this calculation,
the average annual total returns of Class B for the one year period ended
November 30, 1998 and the date of inception through November 30, 1998 through
November 30, 1998 were 42.49% and 17.12%, respectively. Based on this
calculation, the average annual total returns of Class A for the fiscal year
ended November 30, 1998 and for the period July 28, 1997 through November 30,
1998 were 43.38% and 31.08%, respectively, the average annual total returns of
Class C for the fiscal year ended November 30, 1998 and for the period July 28,
1997 through November 30, 1998 were 42.27% and 30.14%, respectively, and the
average annual total returns of Class D for the fiscal year ended November 30,
1998 and for the period July 28, 1997 through November 30, 1998 were 43.80% and
31.46%, respectively.

In addition, the Fund may compute its aggregate total return for each
Class for specified periods by determining the aggregate percentage rate
which will result in the ending value of a hypothetical $1,000 investment
made at the beginning of the period. For the purpose of this calculation, it
is assumed that all dividends and distributions are reinvested. The formula
for computing aggregate total return involves a percentage obtained by
dividing the ending value (without reduction for any sales charge) by the
initial $1,000 investment and subtracting 1 from the result. Based on the
foregoing calculation, the total returns for Class B for the one year period
ended November 30, 1998 and the date of inception through November 30, 1998
were 42.49% and 54.60%, respectively. Based on the foregoing calculation, the
total returns of Class A for the fiscal year ended November 30, 1998 and for
the period July 28, 1997 through November 30, 1998 were 43.38% and 43.78%,
respectively, the total returns of Class C for the fiscal year ended November
30, 1998 and for the period July 28, 1997 through November 30, 1998 were
42.27% and 42.40%, respectively, and the total returns of Class D for the
fiscal year ended November 30, 1998 and for the period July 28, 1997 through
November 30, 1998 were 43.80% and 44.33%, respectively.

The Fund may also advertise the growth of hypothetical investments of
$10,000, $50,000 and $100,000 in each Class of shares of the Fund by adding 1
to the Fund's aggregate total return to date (expressed as a decimal and
without taking into account the effect of any applicable CDSC) and
multiplying by $9,475, $48,000 and $97,000 in the case of Class A
(investments of $10,000, $50,000 and $100,000 adjusted for the initial sales
charge) or by $10,000, $50,000 and $100,000 in the case of each of Class B,
Class C and Class D, as the case may be. Investments of $10,000, $50,000 and
$100,000 in each Class at inception of the Class would have grown to the
following amounts at November 30, 1998:

<TABLE>
<CAPTION>
INVESTMENT AT INCEPTION OF:
INCEPTION --------------------------------
CLASS DATE $10,000 $50,000 $100,000
- ---------- ----------- --------- --------- ----------
<S> <C> <C> <C> <C>
Class A.... 7/28/97 $13,623 $69,014 $139,467
Class B .. 2/27/96 15,460 77,300 154,600
Class C .. 7/28/97 14,240 71,200 142,400
Class D .. 7/28/97 14,333 72,165 144,330
</TABLE>

The Fund from time to time may also advertise its performance relative to
certain performance rankings and indexes compiled by independent
organizations.

XII. FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------

EXPERTS. The financial statements of the Fund for the fiscal year ended
November 30, 1998 included in this Statement of Additional Information and
incorporated by reference in the Prospectus have been so included and
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.

* * * * *

This Statement of Additional Information and the Prospectus do not contain
all of the information set forth in the Registration Statement the Fund has
filed with the SEC. The complete Registration Statement may be obtained from
the SEC.

30
<PAGE>
TCW/DW MID-CAP EQUITY TRUST
PORTFOLIO OF INVESTMENTS November 30, 1998

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (98.4%)
Accident & Health Insurance (2.0%)
78,200 Hartford Life, Inc. (Class A) ................................... $ 4,286,337
--------------
Advertising (3.2%)
253,712 Outdoor Systems, Inc.* .......................................... 6,850,224
--------------
Biotechnology (1.2%)
34,400 Biogen, Inc.* ................................................... 2,610,100
--------------
Books/Magazine (0.3%)
Playboy Enterprises, Inc.
39,000 (Class B)* ...................................................... 602,062
--------------
Broadcast Media (9.9%)
Cablevision Systems Corp.
152,000 (Class A)* ...................................................... 6,289,000
171,800 Clear Channel Communications, Inc.* ............................. 8,031,650
130,000 TCA Cable TV, Inc. .............................................. 3,705,000
119,600 Westwood One, Inc.* ............................................. 3,139,500
--------------
21,165,150
--------------
Cable & Telecommunications (2.9%)
82,900 Global Crossing Ltd.* ........................................... 3,139,837
114,100 MetroNet Communications Corp. (Class B)(Canada)* ................ 3,016,519
--------------
6,156,356
--------------
Casino/Gambling (1.0%)
139,800 Mirage Resorts, Inc.* ........................................... 2,079,525
--------------
Computer Software (1.8%)
149,400 Cerner Corp.* ................................................... 3,921,750
--------------
Computer Software
& Services (8.6%)
55,200 Documentum, Inc.* ............................................... 2,318,400
178,300 FORE Systems, Inc.* ............................................. 2,696,787
106,200 National Techteam, Inc.* ........................................ 716,850
56,300 Rational Software Corp.* ........................................ 1,277,306
333,600 Siebel Systems, Inc.* ........................................... 8,048,100
86,400 VeriSign, Inc.* ................................................. 3,434,400
--------------
18,491,843
--------------
Diversified Commercial
Services (10.7%)
68,287 Apollo Group, Inc. (Class A)* ................................... 2,202,256
121,250 Paychex, Inc. ................................................... 6,032,187
133,800 Robert Half International, Inc.* ................................ 6,288,600
275,500 Romac International, Inc.* ...................................... 3,839,781
209,700 Whittman-Hart, Inc.* ............................................ 4,613,400
--------------
22,976,224
--------------
Diversified Financial Services (1.6%)
93,000 Price (T. Rowe) Associates, Inc. ................................ 3,324,750
--------------
Electronic Components (2.5%)
103,300 Xilinx, Inc.* ................................................... $ 5,242,475
--------------
Electronics -Semiconductors/
Components (5.8%)
87,800 Altera Corp.* ................................................... 4,307,688
147,600 Maxim Integrated Products, Inc.* ................................ 5,793,300
66,600 Microchip Technology, Inc.* ..................................... 2,318,513
--------------
12,419,501
--------------
Hospital/Nursing Management (2.3%)
230,287 Health Management Associates, Inc. (Class A)* ................... 4,994,349
--------------
Household Furnishings &
Appliances (1.6%)
123,900 Restoration Hardware, Inc.* ..................................... 3,407,250
--------------
Internet (26.8%)
72,100 Amazon.com, Inc.* ............................................... 13,843,200
104,800 At Home Corp. (Series A)* ....................................... 6,091,500
53,300 Broadcast.com Inc.* ............................................. 3,517,800
141,200 E*TRADE Group, Inc.* ............................................ 3,812,400
56,500 eBay Inc.* ...................................................... 11,158,750
3,200 GeoCities* ...................................................... 96,200
97,500 Yahoo! Inc.* .................................................... 18,713,906
--------------
57,233,756
--------------
Life Insurance (0.5%)
32,300 MONY Group Inc.* ................................................ 999,281
--------------
Medical Specialties (1.3%)
151,300 Safeskin Corp.* ................................................. 2,865,244
--------------
Oil & Gas Drilling (0.9%)
174,700 Precision Drilling Corp. (Canada)* .............................. 1,888,944
--------------
Real Estate (0.4%)
48,000 CB Richard Ellis Services, Inc.* ................................ 852,000
--------------
Retail -Specialty (9.7%)
155,600 Bed Bath & Beyond, Inc.* ........................................ 4,852,775
141,200 Best Buy Co., Inc.* ............................................. 8,136,650
140,300 Corporate Express, Inc.* ........................................ 806,725
167,500 Just For Feet, Inc.* ............................................ 3,789,688
358,200 PetSmart, Inc.* ................................................. 3,067,088
--------------
20,652,926
--------------
Retail -Specialty Apparel (1.2%)
104,800 Talbot's, Inc. (The) ............................................ 2,672,400
--------------
Wireless Communication (2.2%)
207,300 American Tower Corp. (Class A)* ................................. 4,793,813
--------------
TOTAL COMMON STOCKS
(Identified Cost $123,840,678) .................................. 210,486,260
--------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS

31
<PAGE>
TCW/DW MID-CAP EQUITY TRUST
PORTFOLIO OF INVESTMENTS November 30, 1998, continued

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- --------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENT (1.6%)
<S> <C> <C>
REPURCHASE AGREEMENT
The Bank of New York 4.625% due 12/01/98 (dated 11/30/98;
proceeds $3,398,551)(a)
$3,398 (Identified Cost $3,398,114) .................................... $ 3,398,114
--------------
</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C>
TOTAL INVESTMENTS
(Identified Cost $127,238,792) (b) ................................. 100.0% 213,884,374
LIABILITIES IN EXCESS OF OTHER ASSETS ............................. (0.0) (7,569)
-------- -------------
NET ASSETS ......................................................... 100.0% $213,876,805
======== =============
</TABLE>

- ------------
* Non-income producing security.
(a) Collateralized by $1,052,812 Student Loan Marketing Assoc. 5.057% due
12/17/98 valued at $1,052,580; $1,740,000 U.S. Treasury Note 4.00% due
10/31/00 valued at $1,726,623 and $655,872 U.S. Treasury Note 6.25%
due 10/31/01 valued at $687,554.
(b) The aggregate cost for federal income tax purposes approximates
identified cost. The aggregate gross unrealized appreciation is
$95,811,768 and the aggregate gross unrealized depreciation is
$9,166,186, resulting in net unrealized appreciation of $86,645,582.

SEE NOTES TO FINANCIAL STATEMENTS

32
<PAGE>
TCW/DW MID-CAP EQUITY TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
November 30, 1998

<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $127,238,792).......................... $213,884,374
Receivable for:
Investments sold....................................... 325,774
Shares of beneficial interest sold..................... 185,611
Dividends.............................................. 18,566
Deferred organizational expenses......................... 74,115
Prepaid expenses ........................................ 40,983
--------------
TOTAL ASSETS .......................................... 214,529,423
--------------
LIABILITIES:
Payable for:
Shares of beneficial interest repurchased.............. 271,355
Plan of distribution fee............................... 140,902
Management fee......................................... 102,036
Investment advisory fee................................ 68,024
Investments purchased.................................. 24,750
Accrued expenses ........................................ 45,551
--------------
TOTAL LIABILITIES ..................................... 652,618
--------------
NET ASSETS ............................................ $213,876,805
==============
COMPOSITION OF NET ASSETS:
Paid-in-capital.......................................... $130,533,669
Net unrealized appreciation ............................. 86,645,582
Accumulated net realized loss............................ (3,302,446)
--------------
NET ASSETS ............................................ $213,876,805
==============
CLASS A SHARES:
Net Assets............................................... $1,107,296
Shares Outstanding (unlimited authorized, $.01 par
value).................................................. 70,981
NET ASSET VALUE PER SHARE ............................. $15.60
==============
MAXIMUM OFFERING PRICE PER SHARE,
(net asset value plus 5.54% of net asset value) ...... $16.46
==============
CLASS B SHARES:
Net Assets............................................... $212,042,718
Shares Outstanding (unlimited authorized, $.01 par
value).................................................. 13,717,791
NET ASSET VALUE PER SHARE ............................. $15.46
==============
CLASS C SHARES:
Net Assets............................................... $712,341
Shares Outstanding (unlimited authorized, $.01 par
value).................................................. 46,118
NET ASSET VALUE PER SHARE ............................. $15.45
==============
CLASS D SHARES:
Net Assets............................................... $14,450
Shares Outstanding (unlimited authorized, $.01 par
value).................................................. 923
NET ASSET VALUE PER SHARE ............................. $15.66
==============
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS

33
<PAGE>
TCW/DW MID-CAP EQUITY TRUST
FINANCIAL STATEMENTS, continued

STATEMENT OF OPERATIONS
For the year ended November 30, 1998

<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT LOSS:
INCOME
Dividends................................. $ 176,224
Interest.................................. 102,687
-------------
TOTAL INCOME ........................... 278,911
-------------
EXPENSES
Plan of distribution fee (Class A
shares).................................. 1,092
Plan of distribution fee (Class B
shares).................................. 1,616,961
Plan of distribution fee (Class C
shares).................................. 2,906
Management fee............................ 1,085,682
Investment advisory fee................... 723,788
Transfer agent fees and expenses.......... 242,766
Registration fees......................... 84,733
Shareholder reports and notices........... 59,459
Professional fees......................... 51,628
Organizational expenses................... 33,032
Custodian fees............................ 32,366
Trustees' fees and expenses............... 31,640
Other..................................... 11,845
-------------
TOTAL EXPENSES ......................... 3,977,898
-------------
NET INVESTMENT LOSS .................... (3,698,987)
-------------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain......................... 31,236,102
Net change in unrealized appreciation .... 37,809,903
-------------
NET GAIN ............................... 69,046,005
-------------
NET INCREASE.............................. $65,347,018
=============
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS

34
<PAGE>
TCW/DW MID-CAP EQUITY TRUST
FINANCIAL STATEMENTS, continued

Statement of Changes in Net Assets

<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
NOVEMBER 30, 1998 NOVEMBER 30, 1997*
- ------------------------------------------------------ ----------------- ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss.................................... $ (3,698,987) $ (3,891,233)
Net realized gain (loss)............................... 31,236,102 (22,962,571)
Net change in unrealized appreciation.................. 37,809,903 23,258,457
----------------- ------------------
NET INCREASE (DECREASE).............................. 65,347,018 (3,595,347)
Net decrease from transactions in shares of beneficial
interest.............................................. (26,033,572) (27,115,386)
----------------- ------------------
NET INCREASE (DECREASE).............................. 39,313,446 (30,710,733)
NET ASSETS:
Beginning of period.................................... 174,563,359 205,274,092
----------------- ------------------
END OF PERIOD ....................................... $213,876,805 $174,563,359
================= ==================
</TABLE>

- ------------

* Class A, Class C and Class D shares were issued July 28, 1997.

SEE NOTES TO FINANCIAL STATEMENTS

35
<PAGE>
TCW/DW MID-CAP EQUITY TRUST
NOTES TO FINANCIAL STATEMENTS November 30, 1998

1. ORGANIZATION AND ACCOUNTING POLICIES

TCW/DW Mid-Cap Equity Trust (the "Fund") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as a diversified, open-end
management investment company. The Fund's investment objective is to seek
long-term capital appreciation. The Fund seeks to achieve its objective by
investing primarily in equity securities, including common stocks and
securities convertible into common stock, issued by medium-sized companies.
The Fund was organized as a Massachusetts business trust on October 17, 1995
and commenced operations on February 27, 1996. On July 28, 1997, the Fund
commenced offering three additional classes of shares, with the then current
shares designated as Class B shares.

The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase and some
Class A shares, and most Class B shares and Class C shares are subject to a
contingent deferred sales charge imposed on shares redeemed within one year,
six years and one year, respectively. Class D shares are not subject to a
sales charge. Additionally, Class A shares, Class B shares and Class C shares
incur distribution expenses.

The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts and disclosures. Actual results could differ
from those estimates.

The following is a summary of significant accounting policies:

A. VALUATION OF INVESTMENTS -- (1) an equity security listed or traded on the
New York, American or other domestic or foreign stock exchange is valued at its
latest sale price on that exchange prior to the time when assets are valued; if
there were no sales that day, the security is valued at the latest bid price (in
cases where securities are traded on more than one exchange, the securities are
valued on the exchange designated as the primary market pursuant to procedures
adopted by the Trustees); (2) all other portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest available bid price prior to the time of valuation; (3) when market
quotations are not readily available, including circumstances under which it is
determined by TCW Funds Management, Inc. (the "Advisor") 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 (4) short-term debt
securities having a maturity date of more than sixty days at time of purchase
are valued on a mark-to-market basis until sixty days prior to

36
<PAGE>
TCW/DW MID-CAP EQUITY TRUST
NOTES TO FINANCIAL STATEMENTS November 30, 1998, continued

maturity and thereafter at amortized cost based on their value on the 61st
day. Short-term debt securities having a maturity date of sixty days or less
at the time of purchase are valued at amortized cost.

B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
Dividend income and other distributions are recorded on the ex-dividend date
except for certain dividends from foreign securities which are recorded as
soon as the fund is informed after the ex-dividend date. Discounts are
accreted over the life of the respective securities. Interest income is
accrued daily.

C. MULTIPLE CLASS ALLOCATIONS -- Investment income, expenses (other than
distribution fees), and realized and unrealized gains and losses are
allocated to each class of shares based upon the relative net asset value on
the date such items are recognized. Distribution fees are charged directly to
the respective class.

D. 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.

E. 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.

F. ORGANIZATIONAL EXPENSES -- Morgan Stanley Dean Witter Advisors Inc., formerly
Dean Witter InterCapital Inc., an affiliate of Morgan Stanley Dean Witter
Services Co. Inc. (the "Manager"), paid the organizational expenses of the
Fund in the amount of approximately $165,000 which have been reimbursed for
the full amount thereof. Such expenses have been deferred and are being
amortized on the straight-line method over a period not to exceed five years
from the commencement of operations.

37
<PAGE>
TCW/DW MID-CAP EQUITY TRUST
NOTES TO FINANCIAL STATEMENTS November 30, 1998, continued

2. MANAGEMENT AGREEMENT

Pursuant to a Management Agreement, the Fund pays the Manager a management
fee, accrued daily and payable monthly, by applying the annual rate of 0.60%
to the net assets of the Fund determined as of the close of each business
day.

Under the terms of the Management Agreement, the 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 Manager. The Manager also bears the cost of telephone
services, heat, light, power and other utilities provided to the Fund.

3. INVESTMENT ADVISORY AGREEMENT

Pursuant to an Investment Advisory Agreement, the Fund pays the Advisor an
advisory fee, accrued daily and payable monthly, by applying the annual rate
of 0.40% to the net assets of the Fund determined as of the close of each
business day.

Under the terms of the Investment Advisory Agreement, the Fund has retained
the Advisor to invest the Fund's assets, including placing orders for the
purchase and sale of portfolio securities. The Advisor obtains and evaluates
such information and advice relating to the economy, securities markets, and
specific securities as it considers necessary or useful to continuously
manage the assets of the Fund in a manner consistent with its investment
objective. In addition, the Advisor pays the salaries of all personnel,
including officers of the Fund who are employees of the Advisor.

4. PLAN OF DISTRIBUTION

Shares of the Fund are distributed by Morgan Stanley Dean Witter Distributors
Inc. (the "Distributor"), an affiliate of the Manager. The Fund has adopted a
Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act. The
Plan provides that the Fund will pay the Distributor a fee which is accrued
daily and paid monthly at the following annual rates: (i) Class A -- up to
0.25% of the average daily net assets of Class A; (ii) Class B -- 1.0% of the
lesser of: (a) the average daily aggregate gross sales of the Class B shares
since inception of the Fund (not including reinvestment of dividend or
capital gain distributions) less the average net asset value of the Class B
shares redeemed since the Fund's inception upon which a contingent deferred
sales charge has been imposed or waived; or (b) the average daily net assets
of Class B; and (iii) Class C -- up to 1.0% of the average daily net assets of
Class C. In the case of Class A shares, amounts paid under the Plan are paid
to the Distributor for services provided. In the case of Class B and Class C
shares, amounts paid under the Plan are paid to the Distributor for (1)
services

38
<PAGE>
TCW/DW MID-CAP EQUITY TRUST
NOTES TO FINANCIAL STATEMENTS November 30, 1998, continued

provided and the expenses borne by it and others in the distribution of the
shares of these Classes, including the payment of commissions for sales of
these Classes and incentive compensation to, and expenses of, Morgan Stanley
Dean Witter Financial Advisors and others who engage in or support
distribution of the shares or who service shareholder accounts, including
overhead and telephone expenses; (2) printing and distribution of
prospectuses and reports used in connection with the offering of these shares
to other than current shareholders; and (3) preparation, printing and
distribution of sales literature and advertising materials. In addition, the
Distributor may utilize fees paid pursuant to the Plan, in the case of Class
B shares, to compensate Dean Witter Reynolds Inc. ("DWR"), an affiliate of
the Investment Manager and Distributor, and other selected broker-dealers for
their opportunity costs in advancing such amounts, which compensation would
be in the form of a carrying charge on any unreimbursed expenses.

In the case of Class B shares, provided that the Plan continues in effect,
any cumulative expenses incurred by the Distributor but not yet recovered may
be recovered through the payment of future distribution fees from the Fund
pursuant to the Plan and contingent deferred sales charges paid by investors
upon redemption of Class B shares. Although there is no legal obligation for
the Fund to pay expenses incurred in excess of payments made to the
Distributor under the Plan and the proceeds of contingent deferred sales
charges paid by investors upon redemption of shares, if for any reason the
Plan is terminated, the Trustees will consider at that time the manner in
which to treat such expenses. The Distributor has advised the Fund that such
excess amounts, including carrying charges, totaled $8,805,273 at November
30, 1998.

In the case of Class A shares and Class C shares, expenses incurred pursuant
to the Plan in any calendar year in excess of 0.25% or 1.0% of the average
daily net assets of Class A or Class C, respectively, will not be reimbursed
by the Fund through payments in any subsequent year, except that expenses
representing a gross sales credit to Morgan Stanley Dean Witter Financial
Advisors or other selected broker-dealer representatives may be reimbursed in
the subsequent calendar year. For the year ended November 30, 1998, the
distribution fee was accrued for Class A shares and Class C shares at the
annual rate of 0.25% and 1.0%, respectively.

The Distributor has informed the Fund that for the year ended November 30,
1998, it received contingent deferred sales charges from certain redemptions
of the Fund's Class B shares and Class C shares of $679,862 and $372,
respectively and received $15,552 in front-end sales charges from sales of
the Fund's Class A shares. The respective shareholders pay such charges which
are not an expense of the Fund.

39
<PAGE>
TCW/DW MID-CAP EQUITY TRUST
NOTES TO FINANCIAL STATEMENTS November 30, 1998, continued

5. 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, 1998
aggregated $92,856,026 and $125,265,184, respectively.

For the year ended November 30, 1998, the Fund incurred brokerage commissions
of $645 with Morgan Stanley & Co., Inc., an affliate of the Manager and
Distributor, for portfolio transactions executed on behalf of the Fund.

Morgan Stanley Dean Witter Trust FSB, an affiliate of the Manager and
Distributor, is the Fund's transfer agent. At November 30, 1998, the Fund had
transfer agent fees and expenses payable of approximately $1,000.

6. SHARES OF BENEFICIAL INTEREST

Transactions in shares of beneficial interest were as follows:

<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
NOVEMBER 30, 1998 NOVEMBER 30, 1997*
------------------------------ -----------------------------
SHARES AMOUNT SHARES AMOUNT
------------- --------------- ------------- --------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Sold 70,760 $ 975,219 6,748 $ 74,233
Repurchased (5,127) (68,294) (1,400) (15,778)
------------- --------------- ------------- --------------
Net increase -- Class A 65,633 906,925 5,348 58,455
------------- --------------- ------------- --------------
CLASS B SHARES
Sold 2,515,413 32,751,132 2,893,121 29,335,443
Repurchased (4,871,632) (60,224,693) (5,621,922) (56,605,744)
------------- --------------- ------------- --------------
Net decrease -- Class B (2,356,219) (27,473,561) (2,728,801) (27,270,301)
------------- --------------- ------------- --------------
CLASS C SHARES
Sold 41,665 574,086 7,669 86,447
Repurchased (3,216) (41,022) -- --
------------- --------------- ------------- --------------
Net increase -- Class C 38,449 533,064 7,669 86,447
------------- --------------- ------------- --------------
CLASS D SHARES
Sold -- -- 923 10,013
------------- --------------- ------------- --------------
Net decrease in Fund (2,252,137) $(26,033,572) (2,714,861) $(27,115,386)
============= =============== ============= ==============
</TABLE>

- ------------

* For Class A, C and D, for the period July 28, 1997 (issue date) through
November 30, 1997.

40
<PAGE>
TCW/DW MID-CAP EQUITY TRUST
NOTES TO FINANCIAL STATEMENTS November 30, 1998, continued

7. FEDERAL INCOME TAX STATUS

During the year ended November 30, 1998, the Fund utilized its net capital
loss carryover of approximately $34,462,000.

Capital losses incurred after October 31 ("post-October" losses) within the
taxable year are deemed to arise on the first business day of the Fund's next
taxable year. The Fund incurred and will elect to defer net capital losses of
approximately $3,106,000 during fiscal 1998.

As of November 30, 1998, the Fund had temporary book/tax differences
attributable to post-October losses and capital loss deferrals on wash sales
and permanent book/tax differences primarily attributable to a net operating
loss. To reflect reclassifications arising from the permanent differences,
paid-in-capital was charged and net investment loss was credited $3,698,987.

41
<PAGE>
TCW/DW MID-CAP EQUITY TRUST
FINANCIAL HIGHLIGHTS

Selected ratios and per share data for a share of beneficial interest
outstanding throughout the period:

<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR FOR THE PERIOD
ENDED ENDED FEBRUARY 27, 1996*
NOVEMBER 30, NOVEMBER 30, THROUGH
1998++ 1997**++ NOVEMBER 30, 1996
- ----------------------------------------------- ------------------ -------------------- ------------------
<S> <C> <C> <C>
CLASS B SHARES
SELECTED PER SHARE DATA
Net asset value, beginning of period ........... $10.85 $10.92 $10.00
------------------ -------------------- ------------------
Income (loss) from investment operations:
Net investment loss ........................... (0.26) (0.22) (0.13)
Net realized and unrealized gain .............. 4.87 0.15 1.05
------------------ -------------------- ------------------
Total income (loss) from investment operations 4.61 (0.07) 0.92
------------------ -------------------- ------------------
Net asset value, end of period ................. $15.46 $10.85 $10.92
================== ==================== ==================
TOTAL RETURN+ .................................. 42.49 % (0.64)% 9.20 %(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses ....................................... 2.20 %(3) 2.29 % 2.28 %(2)
Net investment loss ............................ (2.05)%(3) (2.16)% (1.79)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands ....... $212,043 $174,412 $205,274
Portfolio turnover rate ........................ 52 % 49 % 25 %(1)
</TABLE>

- ------------
* Commencement of operations.
** Prior to July 28, 1997, the Fund issued one class of shares. All shares
of the Fund held prior to that date have been designated Class B
shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the
net asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class
specific expenses.

SEE NOTES TO FINANCIAL STATEMENTS

42
<PAGE>
TCW/DW MID-CAP EQUITY TRUST
FINANCIAL HIGHLIGHTS, continued

<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR JULY 28, 1997*
ENDED THROUGH
NOVEMBER 30, 1998 NOVEMBER 30, 1997
- ---------------------------------------- ----------------- -----------------
<S> <C> <C>
CLASS A SHARES++
SELECTED PER SHARE DATA
Net asset value, beginning of period ... $10.88 $10.85
----------------- -----------------
Income from investment operations:
Net investment loss .................... (0.18) (0.06)
Net realized and unrealized gain ...... 4.90 0.09
----------------- -----------------
Total income from investment operations 4.72 0.03
----------------- -----------------
Net asset value, end of period .......... $15.60 $10.88
================= =================
TOTAL RETURN+ ........................... 43.38 % 0.28 %(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses ................................ 1.55 %(3) 1.55 %(2)
Net investment loss ..................... (1.40)%(3) (1.46)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands $1,107 $58
Portfolio turnover rate ................. 52 % 49 %
CLASS C SHARES++
SELECTED PER SHARE DATA
Net asset value, beginning of period ... $10.85 $10.85
----------------- -----------------
Income from investment operations:
Net investment loss .................... (0.28) (0.08)
Net realized and unrealized gain ...... 4.88 0.08
----------------- -----------------
Total income from investment operations 4.60 --
----------------- -----------------
Net asset value, end of period .......... $15.45 $10.85
================= =================
TOTAL RETURN+ ........................... 42.27 % 0.09 %(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses ................................ 2.30 %(3) 2.32 %(2)
Net investment loss ..................... (2.15)%(3) (2.22)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands $712 $83
Portfolio turnover rate ................. 52 % 49 %
</TABLE>

- ------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on
the net asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class
specific expenses.

SEE NOTES TO FINANCIAL STATEMENTS

43
<PAGE>
TCW/DW MID-CAP EQUITY TRUST
FINANCIAL HIGHLIGHTS, continued

- ------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Calculated based on the net asset value as of the last business day
of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class
specific expenses.

SEE NOTES TO FINANCIAL STATEMENTS

44
<PAGE>
TCW/DW MID-CAP EQUITY TRUST
REPORT OF INDEPENDENT ACCOUNTANTS

TO THE SHAREHOLDERS AND TRUSTEES
OF TCW/DW MID-CAP EQUITY 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 TCW/DW Mid-Cap
Equity Trust (the "Fund") at November 30, 1998, 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
periods presented, 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, 1998 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.

PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
January 8, 1999

<PAGE>

TCW/DW MID-CAP EQUITY TRUST

PART C OTHER INFORMATION

Item 23. Exhibits
--------
2. Amended and Restated By-Laws of the Registrant dated May 1, 1999.

10. Consent of Independent Accountants.

14. Financial Data Schedules.

All other exhibits were previously filed via EDGAR and are hereby incorporated
by reference.

Item 24. Persons Controlled by or Under Common Control With the Fund
------------------------------------------------------------

None

Item 25. Indemnification.
---------------

Pursuant to Section 5.3 of the Registrant's Declaration of Trust and
under Section 4.8 of the Registrant's By-Laws, the indemnification of the
Registrant's trustees, officers, employees and agents is permitted if it is
determined that they acted under the belief that their actions were in or not
opposed to the best interest of the Registrant, and, with respect to any
criminal proceeding, they had reasonable cause to believe their conduct was not
unlawful. In addition, indemnification is permitted only if it is determined
that the actions in question did not render them liable by reason of willful
misfeasance, bad faith or gross negligence in the performance of their duties
or by reason of reckless disregard of their obligations and duties to the
Registrant. Trustees, officers, employees and agents will be indemnified for
the expense of litigation if it is determined that they are entitled to
indemnification against any liability established in such litigation. The
Registrant may also advance money for these expenses provided that they give
their undertakings to repay the Registrant unless their conduct is later
determined to permit indemnification.

Pursuant to Section 5.2 of the Registrant's Declaration of Trust
and paragraph 8 of the Registrant's Management and Advisory Agreements, none of
the Manager, the Adviser or any trustee, officer, employee or agent of the
Registrant shall be liable for any action or failure to act, except in the case
of bad faith, willful misfeasance, gross negligence or reckless disregard of
duties to the Registrant.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to trustees, officers and
controlling persons of the Registrant pursuant to the foregoing provisions or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a trustee, officer,
or controlling person of the Registrant in connection with the successful
defense of any action, suit or proceeding) is asserted against the Registrant
by such trustee, officer or controlling person in connection with the shares
being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act, and will be governed by the
final adjudication of such issue.

<PAGE>

The Registrant hereby undertakes that it will apply the
indemnification provision of its by-laws in a manner consistent with Release
11330 of the Securities and Exchange Commission under the Investment Company
Act of 1940, so long as the interpretation of Sections 17(h) and 17(i) of such
Act remains in effect.

Registrant, in conjunction with the Manager, Registrant's
Trustees, and other registered investment management companies managed by the
Manager, maintains insurance on behalf of any person who is or was a Trustee,
officer, employee, or agent of Registrant, or who is or was serving at the
request of Registrant as a trustee, director, officer, employee or agent of
another trust or corporation, against any liability asserted against him and
incurred by him or arising out of his position. However, in no event will
Registrant maintain insurance to indemnify any such person for any act for
which Registrant itself is not permitted to indemnify him.

Item 26. Business and Other Connections of Investment Adviser.
----------------------------------------------------

The TCW Funds Management, Inc. ("TCW") is a 100% owned subsidiary of
The TCW Group, Inc., a Nevada corporation. TCW presently serves as investment
adviser to: (1) TCW/DW North American Government Income Trust, an open-end,
non-diversified management company; (2) TCW/DW Income and Growth Fund, an
open-end, non-diversified management company; (3) TCW/DW Latin American Growth
Fund, an open-end, non-diversified management company; (4) TCW/DW Small Cap
Growth Fund, an open-end non-diversified management company; (5) TCW/DW Term
Trust 2000, a closed-end, diversified management company; (6) TCW/DW Term Trust
2002, a closed-end diversified management company; (7) TCW/DW Term Trust 2003,
a closed-end diversified management company; (8) TCW/DW Emerging Markets
Opportunities Trust, an open-end, non-diversified management company; (9)
TCW/DW Total Return Trust, an open-end non-diversified management investment
company; (10) TCW/DW Mid-Cap Equity Trust, an open-end, diversified management
investment company; and (11) TCW/DW Global Telecom Trust, an open-end
diversified management investment company. TCW also serves as investment
adviser or sub-adviser to other investment companies, including foreign
investment companies. The list required by this Item 26 of the officers and
directors of TCW together with information as to any other business,
profession, vocation or employment of a substantive nature engaged in by TCW
and such officers and directors during the past two years, is incorporated by
reference to Form ADV (File No. 801-29075) filed by TCW pursuant to the
Investment Advisers Act.

Item 27. Principal Underwriters
----------------------

(a) Morgan Stanley Dean Witter Distributors Inc. ("MSDW Distributors"), a
Delaware corporation, is the principal underwriter of the Registrant.
MSDW Distributors is also the principal underwriter of the following
investment companies:

(1) Active Assets California Tax-Free Trust
(2) Active Assets Government Securities Trust
(3) Active Assets Money Trust
(4) Active Assets Tax-Free Trust
(5) Morgan Stanley Dean Witter Aggressive Equity Fund
(6) Morgan Stanley Dean Witter American Opportunities Fund
(7) Morgan Stanley Dean Witter Balanced Growth Fund
(8) Morgan Stanley Dean Witter Balanced Income Fund
(9) Morgan Stanley Dean Witter California Tax-Free Daily Income Trust
(10) Morgan Stanley Dean Witter California Tax-Free Income Fund

<PAGE>

(11) Morgan Stanley Dean Witter Capital Growth Securities
(12) Morgan Stanley Dean Witter Competitive Edge Fund, "Best Ideas
Portfolio"
(13) Morgan Stanley Dean Witter Convertible Securities Trust
(14) Morgan Stanley Dean Witter Developing Growth Securities Trust
(15) Morgan Stanley Dean Witter Diversified Income Trust
(16) Morgan Stanley Dean Witter Dividend Growth Securities Inc.
(17) Morgan Stanley Dean Witter Equity Fund
(18) Morgan Stanley Dean Witter European Growth Fund Inc.
(19) Morgan Stanley Dean Witter Federal Securities Trust
(20) Morgan Stanley Dean Witter Financial Services Trust
(21) Morgan Stanley Dean Witter Fund of Funds
(22) Morgan Stanley Dean Witter Global Dividend Growth Securities
(23) Morgan Stanley Dean Witter Global Utilities Fund
(24) Morgan Stanley Dean Witter Growth Fund
(25) Morgan Stanley Dean Witter Hawaii Municipal Trust
(26) Morgan Stanley Dean Witter Health Sciences Trust
(27) Morgan Stanley Dean Witter High Yield Securities Inc.
(28) Morgan Stanley Dean Witter Income Builder Fund
(29) Morgan Stanley Dean Witter Information Fund
(30) Morgan Stanley Dean Witter Intermediate Income Securities
(31) Morgan Stanley Dean Witter International SmallCap Fund
(32) Morgan Stanley Dean Witter Japan Fund
(33) Morgan Stanley Dean Witter Limited Term Municipal Trust
(34) Morgan Stanley Dean Witter Liquid Asset Fund Inc.
(35) Morgan Stanley Dean Witter Market Leader Trust
(36) Morgan Stanley Dean Witter Mid-Cap Dividend Growth Securities
(37) Morgan Stanley Dean Witter Mid-Cap Growth Fund
(38) Morgan Stanley Dean Witter Multi-State Municipal Series Trust
(39) Morgan Stanley Dean Witter Natural Resource Development Securities Inc.
(40) Morgan Stanley Dean Witter New York Municipal Money Market Trust
(41) Morgan Stanley Dean Witter New York Tax-Free Income Fund
(42) Morgan Stanley Dean Witter Pacific Growth Fund Inc.
(43) Morgan Stanley Dean Witter Precious Metals and Minerals Trust
(44) Morgan Stanley Dean Witter Prime Income Trust
(45) Morgan Stanley Dean Witter Real Estate Fund
(46) Morgan Stanley Dean Witter S&P 500 Index Fund
(47) Morgan Stanley Dean Witter S&P 500 Select Fund
(48) Morgan Stanley Dean Witter Short-Term Bond Fund
(49) Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust
(50) Morgan Stanley Dean Witter Special Value Fund
(51) Morgan Stanley Dean Witter Strategist Fund
(52) Morgan Stanley Dean Witter Tax-Exempt Securities Trust
(53) Morgan Stanley Dean Witter Tax-Free Daily Income Trust
(54) Morgan Stanley Dean Witter U.S. Government Money Market Trust
(55) Morgan Stanley Dean Witter U.S. Government Securities Trust
(56) Morgan Stanley Dean Witter Utilities Fund
(57) Morgan Stanley Dean Witter Value-Added Market Series
(58) Morgan Stanley Dean Witter Value Fund
(59) Morgan Stanley Dean Witter Variable Investment Series
(60) Morgan Stanley Dean Witter World Wide Income Trust

<PAGE>

(1) TCW/DW Emerging Markets Opportunities Trust
(2) TCW/DW Global Telecom Trust
(3) TCW/DW Income and Growth
(4) TCW/DW Latin American Growth Fund
(5) TCW/DW Mid-Cap Equity Trust
(6) TCW/DW North American Government Income Trust
(7) TCW/DW Small Cap Growth Fund
(8) TCW/DW Total Return Trust

(b) The following information is given regarding directors and officers of
MSDW Distributors not listed in Item 26 above. The principal address of
MSDW Distributors is Two World Trade Center, New York, New York 10048.

<TABLE>
<CAPTION>
POSITION AND OFFICE WITH DISTRIBUTORS
NAME AND THE REGISTRANT
- ---- -------------------------------------
<S> <C>
Mitchell M. Merin Chairman, Chief Executive Officer and Director
of MSDW Distributors and President of the Registrant.

Christine A. Edwards Executive Vice President, Secretary, Director and
Chief Legal Officer of MSDW Distributors.

Philip J. Purcell Director of MSDW Distributors.

James F. Higgins Director of MSDW Distributors.

John Schaeffer Director of MSDW Distributors.

John B. Kemp III President of MSDW Distributors.

Robert S. Giambrone Senior Vice President of MSDW Distributors and
Vice President of the Registrant.

Barry Fink Senior Vice President, Assistant General
Counsel and Assistant Secretary of MSDW
Distributors and Vice President, Secretary and
General Counsel of the Registrant.

Frederick K. Kubler Senior Vice President, Assistant Secretary and Chief
Compliance Officer of MSDW Distributors.

Charles Vidala Senior Vice President and Financial Principal of
MSDW Distributors.

Michael T. Gregg Vice President and Assistant Secretary of
MSDW Distributors.

Thomas F. Caloia Assistant Treasurer of MSDW Distributors and
Treasurer of the Registrant.

<PAGE>
POSITION AND OFFICE WITH DISTRIBUTORS
NAME AND THE REGISTRANT
- ---- ----------------------------------------
Michael Interrante Assistant Treasurer of MSDW Distributors.
</TABLE>

Item 28. Location of Accounts and Records
--------------------------------

All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder
are maintained by the Investment Manager at its offices, except records
relating to holders of shares issued by the Registrant, which are maintained by
the Registrant's Transfer Agent, at its place of business as shown in the
prospectus.

Item 29. Management Services
-------------------

Registrant is not a party to any such management-related service
contract.

Item 30. Undertakings
------------

None

<PAGE>

SIGNATURES
----------

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it has duly
caused this Post-Effective Amendment to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of New
York and State of New York on the 23rd day of April, 1999.

TCW/DW MID-CAP EQUITY TRUST

By: /s/ Barry Fink
----------
Barry Fink
Vice President and Secretary

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 7 has been signed below by the following persons
in the capacities and on the dates indicated.

SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
(1) Principal Executive Officer President, Chief
Executive Officer,
Trustee and Chairman
By: /s/ Charles A. Fiumefreddo 04/23/99
----------------------
Charles A. Fiumefreddo

(2) Principal Financial Officer Treasurer and Principal
Accounting Officer

By: /s/ Thomas F. Caloia 04/23/99
----------------
Thomas F. Caloia

(3) Majority of the Trustees

Charles A. Fiumefreddo (Chairman)
Thomas E. Larkin, Jr.
Richard M. DeMartini
Marc I. Stern

By: /s/ Barry Fink 04/23/99
----------
Barry Fink
Attorney-in-Fact

John C. Argue Michael E. Nugent
Manuel H. Johnson John L. Schroeder

By: /s/ David M. Butowsky 04/23/99
-----------------
David M. Butowsky
Attorney-in-Fact
</TABLE>

<PAGE>

TCW/DW MID-CAP EQUITY TRUST

EXHIBIT INDEX

2. Amended and Restated By-Laws of the Registrant dated May 1, 1999.

10. Consent of Independent Accountants.

14. Financial Data Schedules.

<PAGE>

BY-LAWS
OF
TCW/DW MID-CAP EQUITY TRUST
AMENDED AND RESTATED AS OF MAY 1, 1999

ARTICLE I
DEFINITIONS

The terms "Commission," "Declaration," "Distributor," "Investment
Adviser," "Majority Shareholder Vote," "1940 Act," "Shareholder," "Shares,"
"Transfer Agent," "Trust," "Trust Property," and "Trustees" have the
respective meanings given them in the Declaration of Trust of TCW/DW Mid-Cap
Equity Trust dated October 16, 1995, as amended from time to time.

ARTICLE II
OFFICES

SECTION 2.1. Principal Office. Until changed by the Trustees, the
principal office of the Trust in the Commonwealth of Massachusetts shall be
in the City of Boston, County of Suffolk.

SECTION 2.2. Other Offices. In addition to its principal office in the
Commonwealth of Massachusetts, the Trust may have an office or offices in the
City of New York, State of New York, and at such other places within and
without the Commonwealth as the Trustees may from time to time designate or
the business of the Trust may require.

ARTICLE III
SHAREHOLDERS' MEETINGS

SECTION 3.1. Place of Meetings. Meetings of Shareholders shall be held at
such place, within or without the Commonwealth of Massachusetts, as may be
designated from time to time by the Trustees.

SECTION 3.2. Meetings. Meetings of Shareholders of the Trust shall be held
whenever called by the Trustees or the President of the Trust and whenever
election of a Trustee or Trustees by Shareholders is required by the
provisions of Section 16(a) of the 1940 Act, for that purpose. Meetings of
Shareholders shall also be called by the Secretary upon the written request
of the holders of Shares entitled to vote as otherwise required by Section
16(c) of the 1940 Act and to the extent required by the corporate or business
statute of any state in which the Shares of the Trust are sold, as made
applicable to the Trust by the provisions of Section 2.3 of the Declaration.
Such request shall state the purpose or purposes of such meeting and the
matters proposed to be acted on thereat. Except to the extent otherwise
required by Section 16(c) of the 1940 Act, as made applicable to the Trust by
the provisions of Section 2.3 of the Declaration, the Secretary shall inform
such Shareholders of the reasonable estimated cost of preparing and mailing
such notice of the meeting, and upon payment to the Trust of such costs, the
Secretary shall give notice stating the purpose or purposes of the meeting to
all entitled to vote at such meeting. No meeting need be called upon the
request of the holders of Shares entitled to cast less than a majority of all
votes entitled to be cast at such meeting, to consider any matter which is
substantially the same as a matter voted upon at any meeting of Shareholders
held during the preceding twelve months.

SECTION 3.3. Notice of Meetings. Written or printed notice of every
Shareholders' meeting stating the place, date, and purpose or purposes
thereof, shall be given by the Secretary not less than ten (10) nor more than
ninety (90) days before such meeting to each Shareholder entitled to vote at
such meeting. Such notice shall be deemed to be given when deposited in the
United States mail, postage prepaid, directed to the Shareholder at his
address as it appears on the records of the Trust.

SECTION 3.4. Quorum and Adjournment of Meetings. Except as otherwise
provided by law, by the Declaration or by these By-Laws, at all meetings of
Shareholders, the holders of a majority of the Shares issued and outstanding
and entitled to vote thereat, present in person or represented by proxy,
shall be

1
<PAGE>
requisite and shall constitute a quorum for the transaction of business. In
the absence of a quorum, the Shareholders present or represented by proxy and
entitled to vote thereat shall have the power to adjourn the meeting from
time to time. The Shareholders present in person or represented by proxy at
any meeting and entitled to vote thereat also shall have the power to adjourn
the meeting from time to time if the vote required to approve or reject any
proposal described in the original notice of such meeting is not obtained
(with proxies being voted for or against adjournment consistent with the
votes for and against the proposal for which the required vote has not been
obtained). The affirmative vote of the holders of a majority of the Shares
then present in person or represented by proxy shall be required to adjourn
any meeting. Any adjourned meeting may be reconvened without further notice
or change in record date. At any reconvened meeting at which a quorum shall
be present, any business may be transacted that might have been transacted at
the meeting as originally called.

SECTION 3.5. Voting Rights, Proxies. At each meeting of Shareholders, each
holder of record of Shares entitled to vote thereat shall be entitled to one
vote in person or by proxy for each Share of beneficial interest of the Trust
and for the fractional portion of one vote for each fractional Share entitled
to vote so registered in his or her name on the records of the Trust on the
date fixed as the record date for the determination of Shareholders entitled
to vote at such meeting. Without limiting the manner in which a Shareholder
may authorize another person or persons to act for such Shareholder as proxy
pursuant hereto, the following shall constitute a valid means by which a
Shareholder may grant such authority:

(i) A Shareholder may execute a writing authorizing another person or
persons to act for such Shareholder as proxy. Execution may be
accomplished by the Shareholder or such Shareholder's authorized
officer, director, employee, attorney-in-fact or another agent signing
such writing or causing such person's signature to be affixed to such
writing by any reasonable means including, but not limited to, by
facsimile or telecopy signature. No written evidence of authority of a
Shareholder's authorized officer, director, employee, attorney-in-fact
or other agent shall be required; and

(ii) A Shareholder may authorize another person or persons to act for
such Shareholder as proxy by transmitting or authorizing the
transmission of a telegram or cablegram or by other means of
telephonic, electronic or computer transmission to the person who will
be the holder of the proxy or to a proxy solicitation firm, proxy
support service organization or like agent duly authorized by the
person who will be the holder of the proxy to receive such
transmission, provided that any such telegram or cablegram or other
means of telephonic, electronic or computer transmission must either
set forth or be submitted with information from which it can be
determined that the telegram, cablegram or other transmission was
authorized by the Shareholder.

No proxy shall be valid after eleven months from its date, unless otherwise
provided in the proxy. At all meetings of Shareholders, unless the voting is
conducted by inspectors, all questions relating to the qualification of
voters and the validity of proxies and the acceptance or rejection of votes
shall be decided by the chairman of the meeting. In determining whether a
telegram, cablegram or other electronic transmission is valid, the chairman
or inspector, as the case may be, shall specify the information upon which he
or she relied. Pursuant to a resolution of a majority of the Trustees,
proxies may be solicited in the name of one or more Trustees or Officers of
the Trust. Proxy solicitations may be made in writing or by using telephonic
or other electronic solicitation procedures that include appropriate methods
of verifying the identity of the Shareholder and confirming any instructions
given thereby.

SECTION 3.6. Vote Required. Except as otherwise provided by law, by the
Declaration of Trust, or by these By-Laws, at each meeting of Shareholders at
which a quorum is present, all matters shall be decided by Majority
Shareholder Vote.

SECTION 3.7. Inspectors of Election. In advance of any meeting of
Shareholders, the Trustees may appoint Inspectors of Election to act at the
meeting or any adjournment thereof. If Inspectors of Election are not so
appointed, the chairman of any meeting of Shareholders may, and on the
request of any Shareholder or his proxy shall, appoint Inspectors of Election
of the meeting. In case any person appointed as Inspector fails to appear or
fails or refuses to act, the vacancy may be filled by appointment made by the
Trustees in advance of the convening of the meeting or at the meeting by the
person acting

2
<PAGE>
as chairman. The Inspectors of Election shall determine the number of Shares
outstanding, the Shares represented at the meeting, the existence of a
quorum, the authenticity, validity and effect of proxies, shall receive
votes, ballots or consents, shall hear and determine all challenges and
questions in any way arising in connection with the right to vote, shall
count and tabulate all votes or consents, determine the results, and do such
other acts as may be proper to conduct the election or vote with fairness to
all Shareholders. On request of the chairman of the meeting, or of any
Shareholder or his proxy, the Inspectors of Election shall make a report in
writing of any challenge or question or matter determined by them and shall
execute a certificate of any facts found by them.

SECTION 3.8. Inspection of Books and Records. Shareholders shall have such
rights and procedures of inspection of the books and records of the Trust as
are granted to Shareholders under Section 32 of the Business Corporation Law
of the Commonwealth of Massachusetts.

SECTION 3.9. Action by Shareholders Without Meeting. Except as otherwise
provided by law, the provisions of these By-Laws relating to notices and
meetings to the contrary notwithstanding, any action required or permitted to
be taken at any meeting of Shareholders may be taken without a meeting if a
majority of the Shareholders entitled to vote upon the action consent to the
action in writing and such consents are filed with the records of the Trust.
Such consent shall be treated for all purposes as a vote taken at a meeting
of Shareholders.

SECTION 3.10. Presence at Meetings. Presence at meetings of shareholders
requires physical attendance by the shareholder or his or her proxy at the
meeting site and does not encompass attendance by telephonic or other
electronic means.

ARTICLE IV
TRUSTEES

SECTION 4.1. Meetings of the Trustees. The Trustees may in their
discretion provide for regular or special meetings of the Trustees. Regular
meetings of the Trustees may be held at such time and place as shall be
determined from time to time by the Trustees without further notice. Special
meetings of the Trustees may be called at any time by the Chairman and shall
be called by the Chairman or the Secretary upon the written request of any
two (2) Trustees.

SECTION 4.2. Notice of Special Meetings. Written notice of special
meetings of the Trustees, stating the place, date and time thereof, shall be
given not less than two (2) days before such meeting to each Trustee,
personally, by telegram, by mail, or by leaving such notice at his place of
residence or usual place of business. If mailed, such notice shall be deemed
to be given when deposited in the United States mail, postage prepaid,
directed to the Trustee at his address as it appears on the records of the
Trust. Subject to the provisions of the 1940 Act, notice or waiver of notice
need not specify the purpose of any special meeting.

SECTION 4.3. Telephone Meetings. Subject to the provisions of the 1940
Act, any Trustee, or any member or members of any committee designated by the
Trustees, may participate in a meeting of the Trustees, or any such
committee, as the case may be, by means of a conference telephone or similar
communications equipment if all persons participating in the meeting can hear
each other at the same time. Participation in a meeting by these means
constitutes presence in person at the meeting.

SECTION 4.4. Quorum, Voting and Adjournment of Meetings. At all meetings
of the Trustees, a majority of the Trustees shall be requisite to and shall
constitute a quorum for the transaction of business. If a quorum is present,
the affirmative vote of a majority of the Trustees present shall be the act
of the Trustees, unless the concurrence of a greater proportion is expressly
required for such action by law, the Declaration or these By-Laws. If at any
meeting of the Trustees there be less than a quorum present, the Trustees
present thereat may adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall have been
obtained.

SECTION 4.5. Action by Trustees Without Meeting. The provisions of these
By-Laws covering notices and meetings to the contrary notwithstanding, and
except as required by law, any action required or permitted to be taken at
any meeting of the Trustees may be taken without a meeting if a consent in

3
<PAGE>
writing setting forth the action shall be signed by all of the Trustees
entitled to vote upon the action and such written consent is filed with the
minutes of proceedings of the Trustees.

SECTION 4.6. Expenses and Fees. Each Trustee may be allowed expenses, if
any, for attendance at each regular or special meeting of the Trustees, and
each Trustee who is not an officer or employee of the Trust or of its
investment manager or underwriter or of any corporate affiliate of any of
said persons shall receive for services rendered as a Trustee of the Trust
such compensation as may be fixed by the Trustees. Nothing herein contained
shall be construed to preclude any Trustee from serving the Trust in any
other capacity and receiving compensation therefor.

SECTION 4.7. Execution of Instruments and Documents and Signing of Checks
and Other Obligations and Transfers. All instruments, documents and other
papers shall be executed in the name and on behalf of the Trust and all
checks, notes, drafts and other obligations for the payment of money by the
Trust shall be signed, and all transfer of securities standing in the name of
the Trust shall be executed, by the Chairman, the President, any Vice
President or the Treasurer or by any one or more officers or agents of the
Trust as shall be designated for that purpose by vote of the Trustees;
notwithstanding the above, nothing in this Section 4.7 shall be deemed to
preclude the electronic authorization, by designated persons, of the Trust's
Custodian (as described herein in Section 9.1) to transfer assets of the
Trust, as provided for herein in Section 9.1.

SECTION 4.8. Indemnification of Trustees, Officers, Employees and
Agents. (a) The Trust shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Trustee, officer, employee, or agent
of the Trust. The indemnification shall be against expenses, including
attorneys' fees, judgments, fines, and amounts paid in settlement, actually
and reasonably incurred by him in connection with the action, suit, or
proceeding, if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Trust, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person
did not act in good faith and in a manner which he reasonably believed to be
in or not opposed to the best interests of the Trust, and, with respect to
any criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.

(b) The Trust shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action
or suit by or on behalf of the Trust to obtain a judgment or decree in its
favor by reason of the fact that he is or was a Trustee, officer, employee,
or agent of the Trust. The indemnification shall be against expenses,
including attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit, if he acted
in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the Trust; except that no indemnification shall be
made in respect of any claim, issue, or matter as to which the person has
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the Trust, except to the extent that the court in which the
action or suit was brought, or a court of equity in the county in which the
Trust has its principal office, determines upon application that, despite the
adjudication of liability but in view of all circumstances of the case, the
person is fairly and reasonably entitled to indemnity for those expenses
which the court shall deem proper, provided such Trustee, officer, employee
or agent is not adjudged to be liable by reason of his willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in
the conduct of his office.

(c) To the extent that a Trustee, officer, employee, or agent of the Trust
has been successful on the merits or otherwise in defense of any action, suit
or proceeding referred to in subsection (a) or (b) or in defense of any
claim, issue or matter therein, he shall be indemnified against expenses,
including attorneys' fees, actually and reasonably incurred by him in
connection therewith.

(d) (1) Unless a court orders otherwise, any indemnification under
subsections (a) or (b) of this section may be made by the Trust only as
authorized in the specific case after a determination that indemnification of
the Trustee, officer, employee, or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in
subsections (a) or (b).

4
<PAGE>
(2) The determination shall be made:

(i) By the Trustees, by a majority vote of a quorum which consists of
Trustees who were not parties to the action, suit or proceeding; or

(ii) If the required quorum is not obtainable, or if a quorum of
disinterested Trustees so directs, by independent legal counsel in a
written opinion; or

(iii) By the Shareholders.

(3) Notwithstanding any provision of this Section 4.8, no person shall be
entitled to indemnification for any liability, whether or not there is an
adjudication of liability, arising by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of duties as described in
Section 17(h) and (i) of the Investment Company Act of 1940 ("disabling
conduct"). A person shall be deemed not liable by reason of disabling
conduct if, either:

(i) a final decision on the merits is made by a court or other body
before whom the proceeding was brought that the person to be indemnified
("indemnitee") was not liable by reason of disabling conduct; or

(ii) in the absence of such a decision, a reasonable determination,
based upon a review of the facts, that the indemnitee was not liable by
reason of disabling conduct, is made by either--

(A) a majority of a quorum of Trustees who are neither "interested
persons" of the Trust, as defined in Section 2(a)(19) of the
Investment Company Act of 1940, nor parties to the action, suit or
proceeding, or

(B) an independent legal counsel in a written opinion.

(e) Expenses, including attorneys' fees, incurred by a Trustee, officer,
employee or agent of the Trust in defending a civil or criminal action, suit
or proceeding may be paid by the Trust in advance of the final disposition
thereof if:

(1) authorized in the specific case by the Trustees; and

(2) the Trust receives an undertaking by or on behalf of the Trustee,
officer, employee or agent of the Trust to repay the advance if it is not
ultimately determined that such person is entitled to be indemnified by
the Trust; and

(3) either, (i) such person provides a security for his undertaking, or

(ii) the Trust is insured against losses by reason of any lawful
advances, or

(iii) a determination, based on a review of readily available facts,
that there is reason to believe that such person ultimately will be found
entitled to indemnification, is made by either--

(A) a majority of a quorum which consists of Trustees who are neither
"interested persons" of the Trust, as defined in Section 2(a)(19) of
the 1940 Act, nor parties to the action, suit or proceeding, or

(B) an independent legal counsel in a written opinion.

(f) The indemnification provided by this Section shall not be deemed
exclusive of any other rights to which a person may be entitled under any
by-law, agreement, vote of Shareholders or disinterested Trustees or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding the office, and shall continue as to a person
who has ceased to be a Trustee, officer, employee, or agent and inure to the
benefit of the heirs, executors and administrators of such person; provided
that no person may satisfy any right of indemnity or reimbursement granted
herein or to which he may be otherwise entitled except out of the property of
the Trust, and no Shareholder shall be personally liable with respect to any
claim for indemnity or reimbursement or otherwise.

(g) The Trust may purchase and maintain insurance on behalf of any person
who is or was a Trustee, officer, employee, or agent of the Trust, against
any liability asserted against him and incurred by him in

5
<PAGE>
any such capacity, or arising out of his status as such. However, in no event
will the Trust purchase insurance to indemnify any officer or Trustee against
liability for any act for which the Trust itself is not permitted to
indemnify him.

(h) Nothing contained in this Section shall be construed to protect any
Trustee or officer of the Trust against any liability to the Trust or to its
security holders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.

ARTICLE V
COMMITTEES

SECTION 5.1. Executive and Other Committees. The Trustees, by resolution
adopted by a majority of the Trustees, may designate an Executive Committee
and/or committees, each committee to consist of two (2) or more of the
Trustees of the Trust and may delegate to such committees, in the intervals
between meetings of the Trustees, any or all of the powers of the Trustees in
the management of the business and affairs of the Trust. In the absence of
any member of any such committee, the members thereof present at any meeting,
whether or not they constitute a quorum, may appoint a Trustee to act in
place of such absent member. Each such committee shall keep a record of its
proceedings.

The Executive Committee and any other committee shall fix its own rules or
procedure, but the presence of at least fifty percent (50%) of the members of
the whole committee shall in each case be necessary to constitute a quorum of
the committee and the affirmative vote of the majority of the members of the
committee present at the meeting shall be necessary to take action.

All actions of the Executive Committee shall be reported to the Trustees
at the meeting thereof next succeeding to the taking of such action.

SECTION 5.2. Advisory Committee. The Trustees may appoint an advisory
committee which shall be composed of persons who do not serve the Trust in
any other capacity and which shall have advisory functions with respect to
the investments of the Trust but which shall have no power to determine that
any security or other investment shall be purchased, sold or otherwise
disposed of by the Trust. The number of persons constituting any such
advisory committee shall be determined from time to time by the Trustees. The
members of any such advisory committee may receive compensation for their
services and may be allowed such fees and expenses for the attendance at
meetings as the Trustees may from time to time determine to be appropriate.

SECTION 5.3. Committee Action Without Meeting. The provisions of these
By-Laws covering notices and meetings to the contrary notwithstanding, and
except as required by law, any action required or permitted to be taken at
any meeting of any Committee of the Trustees appointed pursuant to Section
5.1 of these By-Laws may be taken without a meeting if a consent in writing
setting forth the action shall be signed by all members of the Committee
entitled to vote upon the action and such written consent is filed with the
records of the proceedings of the Committee.

ARTICLE VI
OFFICERS

SECTION 6.1. Executive Officers. The executive officers of the Trust shall
be a Chairman, a President, one or more Vice Presidents, a Secretary and a
Treasurer. The Chairman shall be selected from among the Trustees but none of
the other executive officers need be a Trustee. Two or more offices, except
those of President and any Vice President, may be held by the same person,
but no officer shall execute, acknowledge or verify any instrument in more
than one capacity. The executive officers of the Trust shall be elected
annually by the Trustees and each executive officer so elected shall hold
office until his or her successor is elected and has qualified.

SECTION 6.2. Other Officers and Agents. The Trustees may also elect one or
more Assistant Vice Presidents, Assistant Secretaries and Assistant
Treasurers and may elect, or may delegate to the Chairman the power to
appoint, such other officers and agents as the Trustees shall at any time or
from time to time deem advisable.

6
<PAGE>
SECTION 6.3. Term and Removal and Vacancies. Each officer of the Trust
shall hold office until his or her successor is elected and has qualified.
Any officer or agent of the Trust may be removed by the Trustees whenever, in
their judgment, the best interests of the Trust will be served thereby, but
such removal shall be without prejudice to the contractual rights, if any, of
the person so removed.

SECTION 6.4. Compensation of Officers. The compensation of officers and
agents of the Trust shall be fixed by the Trustees, or by the Chairman to the
extent provided by the Trustees with respect to officers appointed by the
Chairman.

SECTION 6.5. Powers and Duties. All officers and agents of the Trust, as
between themselves and the Trust, shall have such authority and perform such
duties in the management of the Trust as may be provided in or pursuant to
these By-Laws or, to the extent not so provided, as may be prescribed by the
Trustees; provided that no rights of any third party shall be affected or
impaired by any such By-Law or resolution of the Trustees unless such third
party has knowledge thereof.

SECTION 6.6. The Chairman. The Chairman shall be the chief executive
officer of the Trust, shall preside at all meetings of the Shareholders and
of the Trustees, shall have general and active management of the business of
the Trust, shall see that all orders and resolutions of the Trustees are
carried into effect and, in connection therewith, shall be authorized to
delegate to the President or to one or more Vice Presidents such of his or
her powers and duties at such times and in such manner as he or she may deem
advisable, shall be a signatory on all Annual and Semi-Annual Reports as may
be sent to Shareholders, and shall perform such other duties as the Trustees
may from time to time prescribe.

SECTION 6.7. The President. The President shall perform such duties as the
Trustees and the Chairman may from time to time prescribe and shall, in the
absence or disability of the Chairman, exercise the powers and perform the
duties of the Chairman. The President shall be authorized to delegate to one
or more Vice Presidents such of his or her powers and duties at such times
and in such manner as he or she may deem advisable.

SECTION 6.8. The Vice Presidents. The Vice Presidents shall be of such
number and shall have such titles as may be determined from time to time by
the Trustees. The Vice President, or, if there shall be more than one, the
Vice Presidents in such order as may be determined from time to time by the
Trustees or the Chairman, shall, in the absence or disability of the
President, exercise the powers and perform the duties of the President, and
shall perform such other duties as the Trustees or the Chairman may from time
to time prescribe.

SECTION 6.9. The Assistant Vice Presidents. The Assistant Vice President,
or, if there shall be more than one, the Assistant Vice Presidents in such
order as may be determined from time to time by the Trustees or the Chairman,
shall perform such duties and have such powers as may be assigned them from
time to time by the Trustees or the Chairman.

SECTION 6.10. The Secretary. The Secretary shall attend all meetings of
the Trustees and all meetings of the Shareholders and record all the
proceedings of the meetings of the Shareholders and of the Trustees in a book
to be kept for that purpose, and shall perform like duties for the standing
committees when required. He or she shall give, or cause to be given, notice
of all meetings of the Shareholders and special meetings of the Trustees, and
shall perform such other duties and have such powers as the Trustees or the
Chairman may from time to time prescribe. He or she shall keep in safe
custody the seal of the Trust and affix or cause the same to be affixed to
any instrument requiring it, and, when so affixed, it shall be attested by
his or her signature or by the signature of an Assistant Secretary.

SECTION 6.11. The Assistant Secretaries. The Assistant Secretary, or, if
there shall be more than one, the Assistant Secretaries in such order as may
be determined from time to time by the Trustees or the Chairman, shall, in
the absence or disability of the Secretary, perform the duties and exercise
the powers of the Secretary and shall perform such duties and have such other
powers as the Trustees or the Chairman may from time to time prescribe.

SECTION 6.12. The Treasurer. The Treasurer shall be the chief financial
officer of the Trust. He or she shall keep or cause to be kept full and
accurate accounts of receipts and disbursements in books

7
<PAGE>
belonging to the Trust, and he or she shall render to the Trustees and the
Chairman, whenever any of them require it, an account of his or her
transactions as Treasurer and of the financial condition of the Trust, and he
or she shall perform such other duties as the Trustees or the Chairman may
from time to time prescribe.

SECTION 6.13. The Assistant Treasurers. The Assistant Treasurer, or, if
there shall be more than one, the Assistant Treasurers in such order as may
be determined from time to time by the Trustees or the Chairman, shall, in
the absence or disability of the Treasurer, perform the duties and exercise
the powers of the Treasurer and shall perform such other duties and have such
other powers as the Trustees or the Chairman may from time to time prescribe.

SECTION 6.14. Delegation of Duties. Whenever an officer is absent or
disabled, or whenever for any reason the Trustees may deem it desirable, the
Trustees may delegate the powers and duties of an officer or officers to any
other officer or officers or to any Trustee or Trustees.

ARTICLE VII
DIVIDENDS AND DISTRIBUTIONS

Subject to any applicable provisions of law and the Declaration, dividends
and distributions upon the Shares may be declared at such intervals as the
Trustees may determine, in cash, in securities or other property, or in
Shares, from any sources permitted by law, all as the Trustees shall from
time to time determine.

Inasmuch as the computation of net income and net profits from the sales
of securities or other properties for federal income tax purposes may vary
from the computation thereof on the records of the Trust, the Trustees shall
have power, in their discretion, to distribute as income dividends and as
capital gain distributions, respectively, amounts sufficient to enable the
Trust to avoid or reduce liability for federal income taxes.

ARTICLE VIII
CERTIFICATES OF SHARES

SECTION 8.1. Certificates of Shares. Certificates for Shares of each
series or class of Shares shall be in such form and of such design as the
Trustees shall approve, subject to the right of the Trustees to change such
form and design at any time or from time to time, and shall be entered in the
records of the Trust as they are issued. Each such certificate shall bear a
distinguishing number; shall exhibit the holder's name and certify the number
of full Shares owned by such holder; shall be signed by or in the name of the
Trust by the Chairman, the President, or a Vice President, and countersigned
by the Secretary or an Assistant Secretary or the Treasurer and an Assistant
Treasurer of the Trust; shall be sealed with the seal; and shall contain such
recitals as may be required by law. Where any certificate is signed by a
Transfer Agent or by a Registrar, the signature of such officers and the seal
may be facsimile, printed or engraved. The Trust may, at its option,
determine not to issue a certificate or certificates to evidence Shares owned
of record by any Shareholder.

In case any officer or officers who shall have signed, or whose facsimile
signature or signatures shall appear on, any such certificate or certificates
shall cease to be such officer or officers of the Trust, whether because of
death, resignation or otherwise, before such certificate or certificates
shall have been delivered by the Trust, such certificate or certificates
shall, nevertheless, be adopted by the Trust and be issued and delivered as
though the person or persons who signed such certificate or certificates or
whose facsimile signature or signatures shall appear therein had not ceased
to be such officer or officers of the Trust.

No certificate shall be issued for any share until such share is fully
paid.

SECTION 8.2. Lost, Stolen, Destroyed and Mutilated Certificates. The
Trustees may direct a new certificate or certificates to be issued in place
of any certificate or certificates theretofore issued by the Trust alleged to
have been lost, stolen or destroyed, upon satisfactory proof of such loss,
theft, or destruction; and the Trustees may, in their discretion, require the
owner of the lost, stolen or destroyed

8
<PAGE>
certificate, or his legal representative, to give to the Trust and to such
Registrar, Transfer Agent and/or Transfer Clerk as may be authorized or
required to countersign such new certificate or certificates, a bond in such
sum and of such type as they may direct, and with such surety or sureties, as
they may direct, as indemnity against any claim that may be against them or
any of them on account of or in connection with the alleged loss, theft or
destruction of any such certificate.

ARTICLE IX
CUSTODIAN

SECTION 9.1. Appointment and Duties. The Trust shall at times employ a
bank or trust company having capital, surplus and undivided profits of at
least five million dollars ($5,000,000) as custodian with authority as its
agent, but subject to such restrictions, limitations and other requirements,
if any, as may be contained in these By-Laws and the 1940 Act:

(1) to receive and hold the securities owned by the Trust and deliver the
same upon written or electronically transmitted order;

(2) to receive and receipt for any moneys due to the Trust and deposit
the same in its own banking department or elsewhere as the Trustees may
direct;

(3) to disburse such funds upon orders or vouchers;

all upon such basis of compensation as may be agreed upon between the
Trustees and the custodian. If so directed by a Majority Shareholder Vote,
the custodian shall deliver and pay over all property of the Trust held by it
as specified in such vote.

The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services of
the custodian and upon such terms and conditions as may be agreed upon
between the custodian and such sub-custodian and approved by the Trustees.

SECTION 9.2. Central Certificate System. Subject to such rules,
regulations and orders as the Commission may adopt, the Trustees may direct
the custodian to deposit all or any part of the securities owned by the Trust
in a system for the central handling of securities established by a national
securities exchange or a national securities association registered with the
Commission under the Securities Exchange Act of 1934, or such other person as
may be permitted by the Commission, or otherwise in accordance with the 1940
Act, pursuant to which system all securities of any particular class or
series of any issuer deposited within the system are treated as fungible and
may be transferred or pledged by bookkeeping entry without physical delivery
of such securities, provided that all such deposits shall be subject to
withdrawal only upon the order of the Trust.

ARTICLE X
WAIVER OF NOTICE

Whenever any notice of the time, place or purpose of any meeting of
Shareholders, Trustees, or of any committee is required to be given in
accordance with law or under the provisions of the Declaration or these
By-Laws, a waiver thereof in writing, signed by the person or persons
entitled to such notice and filed with the records of the meeting, whether
before or after the holding thereof, or actual attendance at the meeting of
shareholders, Trustees or committee, as the case may be, in person, shall be
deemed equivalent to the giving of such notice to such person.

ARTICLE XI
MISCELLANEOUS

SECTION 11.1. Location of Books and Records. The books and records of the
Trust may be kept outside the Commonwealth of Massachusetts at such place or
places as the Trustees may from time to time determine, except as otherwise
required by law.

9
<PAGE>
SECTION 11.2. Record Date. The Trustees may fix in advance a date as the
record date for the purpose of determining the Shareholders entitled to (i)
receive notice of, or to vote at, any meeting of Shareholders, or (ii)
receive payment of any dividend or the allotment of any rights, or in order
to make a determination of Shareholders for any other proper purpose. The
record date, in any case, shall not be more than one hundred eighty (180)
days, and in the case of a meeting of Shareholders not less than ten (10)
days, prior to the date on which such meeting is to be held or the date on
which such other particular action requiring determination of Shareholders is
to be taken, as the case may be. In the case of a meeting of Shareholders,
the meeting date set forth in the notice to Shareholders accompanying the
proxy statement shall be the date used for purposes of calculating the 180
day or 10 day period, and any adjourned meeting may be reconvened without a
change in record date. In lieu of fixing a record date, the Trustees may
provide that the transfer books shall be closed for a stated period but not
to exceed, in any case, twenty (20) days. If the transfer books are closed
for the purpose of determining Shareholders entitled to notice of a vote at a
meeting of Shareholders, such books shall be closed for at least ten (10)
days immediately preceding the meeting.

SECTION 11.3. Seal. The Trustees shall adopt a seal, which shall be in
such form and shall have such inscription thereon as the Trustees may from
time to time provide. The seal of the Trust may be affixed to any document,
and the seal and its attestation may be lithographed, engraved or otherwise
printed on any document with the same force and effect as if it had been
imprinted and attested manually in the same manner and with the same effect
as if done by a Massachusetts business corporation under Massachusetts law.

SECTION 11.4. Fiscal Year. The fiscal year of the Trust shall end on such
date as the Trustees may by resolution specify, and the Trustees may by
resolution change such date for future fiscal years at any time and from time
to time.

SECTION 11.5. Orders for Payment of Money. All orders or instructions for
the payment of money of the Trust, and all notes or other evidences of
indebtedness issued in the name of the Trust, shall be signed by such officer
or officers or such other person or persons as the Trustees may from time to
time designate, or as may be specified in or pursuant to the agreement
between the Trust and the bank or trust company appointed as Custodian of the
securities and funds of the Trust.

ARTICLE XII
COMPLIANCE WITH FEDERAL REGULATIONS

The Trustees are hereby empowered to take such action as they may deem to
be necessary, desirable or appropriate so that the Trust is or shall be in
compliance with any federal or state statute, rule or regulation with which
compliance by the Trust is required.

ARTICLE XIII
AMENDMENTS

These By-Laws may be amended, altered, or repealed, or new By-Laws may be
adopted, (a) by a Majority Shareholder Vote, or (b) by the Trustees;
provided, however, that no By-Law may be amended, adopted or repealed by the
Trustees if such amendment, adoption or repeal requires, pursuant to law, the
Declaration, or these By-Laws, a vote of the Shareholders. The Trustees shall
in no event adopt By-Laws which are in conflict with the Declaration, and any
apparent inconsistency shall be construed in favor of the related provisions
in the Declaration.

ARTICLE XIV
DECLARATION OF TRUST

The Declaration of Trust establishing TCW/DW Mid-Cap Equity Trust, dated
October 16, 1995, a copy of which, together with all amendments thereto, is
on file in the office of the Secretary of the Commonwealth of Massachusetts,
provides that the name TCW/DW Mid-Cap Equity Trust refers to the

10
<PAGE>
Trustees under the Declaration collectively as Trustees, but not as
individuals or personally; and no Trustee, Shareholder, officer, employee or
agent of TCW/DW Mid-Cap Equity Trust shall be held to any personal liability,
nor shall resort be had to their private property for the satisfaction of any
obligation or claim or otherwise, in connection with the affairs of said
TCW/DW Mid-Cap Equity Trust, but the Trust Estate only shall be liable.

<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 7 to the registration
statement on Form N-1A (the "Registration Statement") of our report dated
January 8, 1999, relating to the financial statements and financial highlights
of TCW/DW Mid-Cap Equity Trust, which appears in such Statement of Additional
Information, and to the incorporation by reference of our report into the
Prospectus which constitutes part of this Registration Statement. We also
consent to the references to us under the headings "Custodian and Independent
Accountants" and "Experts" in such Statement of Additional Information and to
the reference to us under the heading "Financial Highlights" in such Prospectus.

PricewaterhouseCooopers LLP
1177 Avenue of the Americas
New York, New York 10036
April 22, 1999

<PAGE>

<ARTICLE> 6
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<NUMBER> 1
<NAME> Class A

<S> <C>
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<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
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<NUMBER-OF-SHARES-SOLD> 70,760
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<NET-CHANGE-IN-ASSETS> 39,313,446
<ACCUMULATED-NII-PRIOR> 0
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<PER-SHARE-GAIN-APPREC> 4.90
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</TABLE>

<PAGE>

<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> Class B

<S> <C>
<PERIOD-TYPE> 12-MOS
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<PERIOD-END> NOV-30-1998
<INVESTMENTS-AT-COST> 127,238,792
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<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 627,868
<TOTAL-LIABILITIES> 652,618
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 130,533,669
<SHARES-COMMON-STOCK> 13,717,791
<SHARES-COMMON-PRIOR> 16,074,010
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<OVERDISTRIBUTION-GAINS> 0
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<NET-ASSETS> 212,042,718
<DIVIDEND-INCOME> 176,224
<INTEREST-INCOME> 102,687
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<EXPENSES-NET> 3,977,898
<NET-INVESTMENT-INCOME> (3,698,987)
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<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,515,413
<NUMBER-OF-SHARES-REDEEMED> 4,871,632
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 39,313,446
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (34,538,548)
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<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,809,470
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,977,898
<AVERAGE-NET-ASSETS> 180,202,384
<PER-SHARE-NAV-BEGIN> 10.85
<PER-SHARE-NII> (0.26)
<PER-SHARE-GAIN-APPREC> 4.87
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.46
<EXPENSE-RATIO> 2.20
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<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>

<ARTICLE> 6
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<NAME> Class C

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<PERIOD-END> NOV-30-1998
<INVESTMENTS-AT-COST> 127,238,792
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<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 627,868
<TOTAL-LIABILITIES> 652,618
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 130,533,669
<SHARES-COMMON-STOCK> 46,118
<SHARES-COMMON-PRIOR> 7,669
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (3,302,446)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 86,645,582
<NET-ASSETS> 712,341
<DIVIDEND-INCOME> 176,224
<INTEREST-INCOME> 102,687
<OTHER-INCOME> 0
<EXPENSES-NET> 3,977,898
<NET-INVESTMENT-INCOME> (3,698,987)
<REALIZED-GAINS-CURRENT> 31,236,102
<APPREC-INCREASE-CURRENT> 37,809,903
<NET-CHANGE-FROM-OPS> 65,347,018
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
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</TABLE>

<PAGE>

<ARTICLE> 6
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<NAME> Class D

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