TCW DW MID CAP EQUITY TRUST, 485APOS, 1999-01-28

TCW DW MID CAP EQUITY TRUST
485APOS, 1999-01-28

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 28, 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. 5 [X]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 [ ]
AMENDMENT NO. 6 [ ]
----------------
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 (date) pursuant to paragraph (b)
----
X 60 days after filing pursuant to paragraph (a)
-----
on (date) pursuant to paragraph (a) of rule 485.
----

AMENDING THE PROSPECTUS

- --------------------------------------------------------------------------------
<PAGE>

TCW/DW 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: Principal Investment
Strategies; Principal Risks; 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 - MARCH , 1999

TCW/DW

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

MID-CAP EQUITY TRUST

A STOCK MUTUAL FUND THAT SEEKS LONG-TERM CAPITAL APPRECIATION

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

<PAGE>

CONTENTS

<TABLE>
<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..............................11
Distributions...................................12
Tax Consequences................................13
Share Class Arrangements........................13
Financial Highlights ................................................20
This Prospectus contains important information about
the Fund. Please read it carefully and keep it for
future reference.
</TABLE>

FUND CATEGORY
-------------
[X] GROWTH

[ ] Growth and Income

[ ] Income

[ ] Money Market
<PAGE>

THE FUND

INVESTMENT OBJECTIVE
- ---------------------------------

TCW/DW Mid-Cap Equity Trust is a stock mutual fund that seeks long-term capital
appreciation. There is no guarantee that the Fund will achieve this objective.

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 $220 million and $13 billion
as of February 24, 1998]. The Fund's "Adviser," TCW Funds Management, Inc.,
invests in companies that it believes exhibit superior earnings growth
prospects and attractive stock market valuations. The Adviser 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 Adviser then subjects the list of
securities to a fundamental analysis using a variety of criteria. Under normal
market conditions, the Adviser expects to hold a portfolio of forty to sixty
investments.

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

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 Adviser 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 Adviser 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.

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.

1
<PAGE>

THE FUND, CONTINUED

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

ANNUAL TOTAL RETURNS
This chart shows how the performance of the Fund's Class B shares has varied
from year to year over the life of the Fund.

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.

1996* 1997 1998
----- ---- ----

3.90% 10.97% 62.71%

* For the period February 27, 1996 (commencement of operations) to
December 31, 1996.

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).

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

<TABLE>
<CAPTION>
PAST 1 YEAR LIFE OF FUND
- ------------------------------------------------------------------------------
<S> <C> <C>
Class A 55.11% 42.30%
- ------------------------------------------------------------------------------
Class B1 57.71% 24.07%
- ------------------------------------------------------------------------------
Class C 61.53% 46.69%
- ------------------------------------------------------------------------------
Class D 64.16% 48.16%
- ------------------------------------------------------------------------------
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.

2
<PAGE>

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 these fees and expenses. The Fund does not charge account or
exchange fees. See the "Share Class Arrangements" section for further fee and
expense information.

(open 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.

(/end 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 None2 5.00%3 1.00%4 None
price or net asset value at redemption)
- --------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
- --------------------------------------------------------------------------------------------------
Management and Advisory fee 1.00% 1.00% 1.00% 1.00%
- --------------------------------------------------------------------------------------------------
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 1.55% 2.20% 2.30% 1.30%
- --------------------------------------------------------------------------------------------------
</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.

EXAMPLE
This example shows what expenses you could pay over time. 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 $67 $99 $133 $227 $67 $99 $133 $227
- --------------------------------------------------------------------------------------------------
Class B $72 $99 $138 $253 $22 $69 $118 $253
- --------------------------------------------------------------------------------------------------
Class C $33 $72 $123 $264 $23 $72 $123 $264
- --------------------------------------------------------------------------------------------------
Class D $13 $41 $71 $157 $13 $41 $71 $157
- --------------------------------------------------------------------------------------------------

</TABLE>

3
<PAGE>

THE FUND, CONTINUED

ADDITIONAL INVESTMENT STRATEGY INFORMATION
- -------------------------------------------------------
This section provides additional information concerning the Fund's principal
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 and other equity securities.

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 Adviser believes it is advisable to do so. This could have the effect
of reducing the benefit from any upswing in the market.

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. 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
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.

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.

FIXED-INCOME SECURITIES. Another principal risk of investing in the Fund is
associated with its fixed-income investments. All fixed-income securities, such
as corporate debt,

4
<PAGE>

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 Morgan Stanley Dean Witter Services
Company Inc. (the "Manager"), the Adviser 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 Manager, Adviser and
affiliates are working hard to avoid any problems and to obtain assurances from
their service providers that they are taking similar steps.

5
<PAGE>

THE FUND, CONTINUED

FUND MANAGEMENT
- ----------------------------
The Fund has retained the Manager -- Morgan Stanley Dean Witter Services
Company Inc. -- to provide administrative services and manage its business
affairs (other than providing investment advice). The Fund has contracted with
the Adviser -- TCW Funds Management, Inc. -- to invest the Fund's assets,
including the placing of orders for the purchase and sale of portfolio
securities. The Manager is a wholly-owned subsidiary of Morgan Stanley Dean
Witter Advisors Inc., which is in turn 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. The Manager's main business
office is located at Two World Trade Center, New York, NY 10048.

MORGAN STANLEY DEAN WITTER ADVISORS INC.
The Manager is a wholly owned subsidiary of Morgan Stanley Dean Witter Advisors
Inc., which is widely recognized as a leader in the mutual fund industry.
Together, the Manager and Morgan Stanley Dean Witter Advisors Inc. have more
than $ billion in assets under management or administration as of , 1999.

The Adviser, together with its affiliated companies, manages more than $50
billion primarily for institutional investors. The Adviser is a wholly-owned
subsidiary of The TCW Group, Inc. Its main business address is 865 South
Figueroa Street, Suite 1800, Los Angeles, California 90017.

Douglas S. Foreman, Group Managing Director of the Adviser, is the primary
portfolio manager of the Fund. He is assisted by Christopher J. Ainley,
Managing Director of the Adviser. Mr. Foreman and Mr. Ainley have been
portfolio managers with affiliated companies of The TCW Group since 1994.

The Fund pays the Manager and Adviser a monthly management or advisory fee as
full compensation for the services and facilities furnished to the Fund, and
for Fund expenses assumed by the Manager and Adviser. The fee is based on the
Fund's average daily net assets. For the fiscal year ended November 30, 1998
the Fund accrued aggregate total compensation to the Manager and the Adviser of
1.00% of the Fund's average daily net assets (0.60% to the Manager and 0.40% to
the Adviser).

6
<PAGE>

SHAREHOLDER INFORMATION

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 Adviser 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.

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.

CONTACTING A FINANCIAL ADVISOR

If you are new to the TCW/DW Funds family and would like to contact a Financial
Advisor, call (800) 869-NEWS 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.

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.

7
<PAGE>

SHAREHOLDER INFORMATION, CONTINUED

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
Educational IRAs $500 $ 100
- -------------------------------------------------------------------------------------------------
EasyInvest(SM) (Automatically from your
checking or savings account or
Money Market Fund) $ 100* $ 100*
- -------------------------------------------------------------------------------------------------
</TABLE>

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

(open 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.

(/end sidebar)

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.

ADVISORY, ADMINISTRATIVE OR BROKERAGE PROGRAMS. There is no minimum investment
amount if you purchase Fund shares through: (1) the Morgan Stanley Dean Witter
Advisors' mutual fund asset allocation plan, or (2) a program, approved by the
Fund's distributor, in which you pay an asset-based fee for advisory,
administrative and/or brokerage services.

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: TCW/DW 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.

8
<PAGE>

HOW TO EXCHANGE SHARES
- -----------------------------------

PERMISSIBLE FUND EXCHANGES. You may exchange shares of any Class of the Fund
for the same Class of any other TCW/DW Multi-Class Fund advised by the Adviser
and managed by the Manager, without the imposition of an exchange fee. You may
also exchange Fund shares, without the imposition of an exchange fee, for
shares of TCW/DW North American Government Income Trust, and five Money Market
Funds for which Morgan Stanley Dean Witter Advisors serves as Investment
Manager.

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 and policies 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 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.

9
<PAGE>

SHAREHOLDER INFORMATION, CONTINUED

TAX CONSIDERATIONS OF EXCHANGES. If you exchange shares of the Fund for shares
of another 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.

10
<PAGE>

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.

<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.
----------------------------------------------------------------------------------
Payment will be sent to the address to which the account is registered or
deposited in your brokerage account.
- -------------------------------------------------------------------------------------------------------
Systematic If your investment in all of the TCW/DW Family of Funds has a total market
Withdrawal Plan value of at least $10,000, you may elect to withdraw amounts of $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 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.
----------------------------------------------------------------------------------

(open 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 TCW/DW Funds total at least $10,000. Contact your Morgan Stanley Dean
Witter Financial Advisor for more details.

(/end sidebar)
- -------------------------------------------------------------------------------------------------------
By Letter You can also sell your shares by writing a "letter of instruction" that includes:
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 generally obtain a signature guarantee from a securities broker-dealer,
bank or credit union; 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>

PAYMENT FOR SOLD SHARES. After we receive your instruction to sell in proper
form, 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).

11
<PAGE>

SHAREHOLDER INFORMATION, CONTINUED

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 EasyInvest(SM), 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.

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."

(open sidebar)
TARGETED DIVIDENDS(SM)

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

12
<PAGE>

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.

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 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.

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 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.

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

13
<PAGE>

SHAREHOLDER INFORMATION, CONTINUED

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 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 first year. 1.0%
- ----------------------------------------------------------------------------------------------
D None None
- ----------------------------------------------------------------------------------------------
</TABLE>

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 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.

FRONT-END SALES CHARGE OR FSC

An initial sales charge you pay when purchasing Class A shares that is based on
a percentage of the offering price. The percentage declines based upon the
dollar value of Class A shares you purchase. We offer three ways to reduce your
Class A sales charges -- the Combined Purchase Privilege, Right of Accumulation
and Letter of Intent.

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 0.00% 0.00%
- -------------------------------------------------------------------------------------
</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).

14
<PAGE>

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

o Other linked accounts as approved by the Fund's transfer agent.

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 TCW/DW Multi-Class 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 TCW/DW 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 TCW/DW Fund subject to the Fund's minimum initial investment
requirement.

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 TCW/DW Multi-Class Funds. 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
TCW/DW 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.

15
<PAGE>

SHAREHOLDER INFORMATION, CONTINUED

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 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.

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.

(open sidebar)
CONTINGENT DEFERRED
SALES CHARGE OR CDSC

A fee you pay when you sell shares of certain TCW/DW Funds purchased without
an initial sales charge. This fee declines the longer you hold your shares as
set forth in the table.
(/end 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 Fund 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,

16
<PAGE>

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).

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 TCW/DW Fund purchased by that
plan.

17
<PAGE>

SHAREHOLDER INFORMATION, CONTINUED

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 one of the five Money Market
Funds for which Morgan Stanley Dean Witter Advisors serves as Investment
Manager, TCW/DW Multi-Class Fund or TCW/DW North American Government Income
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 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 TCW/DW 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 TCW/DW 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 TCW/DW Multi-Class 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
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.

18
<PAGE>

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 Morgan Stanley Dean Witter Advisors' 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.

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 TCW/DW Multi-Class Funds and/or (2) previous purchases of Class
A shares of TCW/DW Multi-Class Funds, TCW/DW North American Government Income
Trust and five Money Market Funds advised by Morgan Stanley Dean Witter
Advisors you currently own.

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.

19
<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. 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 , whose report, along with the Fund's
financial statements, is included in the annual report, which is available upon
request.

CLASS B

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
YEARS ENDED NOVEMBER 30 1998 1997 1996 1995 1994
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA
- ----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $00.00 $00.00 $00.00 $00.00 $00.00
- ----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS 00.00 00.00 00.00 00.00 00.00
- ----------------------------------------------------------------------------------------------------------------
Net investment income 00.00 00.00 00.00 00.00 00.00
- ----------------------------------------------------------------------------------------------------------------
Net gains or losses on securities
(both realized and unrealized) 00.00 00.00 00.00 00.00 00.00
- ----------------------------------------------------------------------------------------------------------------
Total from investment operations 00.00 00.00 00.00 00.00 00.00
- ----------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS 00.00 00.00 00.00 00.00 00.00
- ----------------------------------------------------------------------------------------------------------------
Dividends (from net investment income) 00.00 00.00 00.00 00.00 00.00
- ----------------------------------------------------------------------------------------------------------------
Distributions (from capital gains) 00.00 00.00 00.00 00.00 00.00
- ----------------------------------------------------------------------------------------------------------------
Returns of capital 00.00 00.00 00.00 00.00 00.00
- ----------------------------------------------------------------------------------------------------------------
Total distributions 00.00 00.00 00.00 00.00 00.00
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of period 00.00 00.00 00.00 00.00 00.00
- ----------------------------------------------------------------------------------------------------------------
TOTAL RETURN $00.00 $00.00 $00.00 $00.00 $00.00
- ----------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------
Net assets, end of period 0.00% 0.00% 0.00% 0.00% 0.00%
- ----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 0.00% 0.00% 0.00% 0.00% 0.00%
- ----------------------------------------------------------------------------------------------------------------
Ratio of net income to average net assets 0.00% 0.00% 0.00% 0.00% 0.00%
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 000% 000% 000% 000% 000%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>

20
<PAGE>

CLASS A

CLASS C

FINANCIAL HIGHLIGHTS, CONTINUED

<TABLE>
<CAPTION>
CLASS D
- ----------------------------------------------------------------------------------------------------------------
YEARS ENDED NOVEMBER 30 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA
- ----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $00.00 $00.00 $00.00 $00.00 $00.00
- ----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS 00.00 00.00 00.00 00.00 00.00
- ----------------------------------------------------------------------------------------------------------------
Net investment income 00.00 00.00 00.00 00.00 00.00
- ----------------------------------------------------------------------------------------------------------------
Net gains or losses on securities
(both realized and unrealized) 00.00 00.00 00.00 00.00 00.00
- ----------------------------------------------------------------------------------------------------------------
Total from investment operations 00.00 00.00 00.00 00.00 00.00
- ----------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS 00.00 00.00 00.00 00.00 00.00
- ----------------------------------------------------------------------------------------------------------------
Dividends (from net investment income) 00.00 00.00 00.00 00.00 00.00
- ----------------------------------------------------------------------------------------------------------------
Distributions (from capital gains) 00.00 00.00 00.00 00.00 00.00
- ----------------------------------------------------------------------------------------------------------------
Returns of capital 00.00 00.00 00.00 00.00 00.00
- ----------------------------------------------------------------------------------------------------------------
Total distributions 00.00 00.00 00.00 00.00 00.00
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of period 00.00 00.00 00.00 00.00 00.00
- ----------------------------------------------------------------------------------------------------------------
TOTAL RETURN $00.00 $00.00 $00.00 $00.00 $00.00
- ----------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------
Net assets, end of period 0.00% 0.00% 0.00% 0.00% 0.00%
- ----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 0.00% 0.00% 0.00% 0.00% 0.00%
- ----------------------------------------------------------------------------------------------------------------
Ratio of net income to average net assets 0.00% 0.00% 0.00% 0.00% 0.00%
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 000% 000% 000% 000% 000%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>

22
<PAGE>

NOTES

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

23
<PAGE>

TCW/DW 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, please call:

(212) 392-2550
OR
(800) 869-NEWS (TOLL FREE)

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

(open sidebar)
TICKER SYMBOLS:

Class A: TMDAX
- -------------------------
Class B: TMDBX
- -------------------------
Class C: TMDCX
- -------------------------
Class D: TMDDX
- -------------------------
(/end sidebar)

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.

(TCW/DW MID-CAP EQUITY TRUST; INVESTMENT COMPANY ACT FILE NO. 811- )

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION
TCW/DW MID-CAP
EQUITY TRUST

MARCH , 1999

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

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

TCW/DW Mid-Cap Equity Trust
Two World Trade Center
New York, New York 10048
(212) 392-2550 or
(800) 869-NEWS
<PAGE>

TABLE OF CONTENTS
- --------------------------------------------------------------------------------

<TABLE>
<S> <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. Manager ..................................................................... 16
B. The Adviser ................................................................. 16
C. Principal Underwriter ....................................................... 16
D. Services Provided by the Manager, the Adviser and Fund Expenses Paid by Third
Parties ....................................................................... 17
E. Dealer Reallowances ......................................................... 18
F. Rule 12b-1 Plan ............................................................. 18
G. Other Service Providers ..................................................... 22
VI. Brokerage Allocation and Other Practices ....................................... 23
A. Brokerage Transactions ...................................................... 23
B. Commissions ................................................................. 23
C. Brokerage Selection ......................................................... 23
D. Directed Brokerage .......................................................... 24
E. Regular Broker-Dealers ...................................................... 24
VII. Capital Stock and Other Securities ............................................. 24
VIII. Purchase, Redemption and Pricing of Shares .................................... 25
A. Purchase of Shares .......................................................... 25
B. Offering Price .............................................................. 26
IX. Taxation of the Fund and Shareholders .......................................... 27
X. Underwriters ................................................................... 28
XI. Calculation of Performance Data ................................................ 28
XII. Financial Statements ........................................................... 30
</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).

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

"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 " -- TCW/DW Mid-Cap Equity Trust, a registered open-end investment
company.

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

"Manager " -- Morgan Stanley Dean Witter Services Company Inc., a
wholly-owned subsidiary of Morgan Stanley Dean Witter Advisors Inc. The Manager
may also be referred to as MSDW Services Company.

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

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

"TCW/DW Funds " -- The registered investment companies managed by the
Manager and advised by the Adviser.

"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.

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. 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;

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

4
<PAGE>

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.

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 Manager 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 Adviser determines that issuance of the security is probable. At that time,
the Fund will record the transaction

6
<PAGE>

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 Adviser, 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 Adviser 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 obtain additional
financing. If the issuer of a fixed-income security owned by the Fund defaults,
the Fund

7
<PAGE>

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 management services provided to the Fund by the Manager,
the investment advisory services provided to the Fund by the Adviser 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 Manager, the Adviser, 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 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 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.

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.

8
<PAGE>

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 Adviser to ensure that the Fund's general
investment policies and programs are properly carried out. The Trustees also
conduct their review of the Manager 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

9
<PAGE>

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 nine (9)
Trustees. These same individuals also serve as trustees for all of the TCW/DW
Funds. Five Trustees (56% of the total number) have no affiliation or business
connection with the Manager or Adviser or any of their affiliated persons and
do not own any stock or other securities issued by the Manager's parent
company, MSDW or the Adviser's parent company, TCW. These are the
"disinterested" or "independent" Trustees. The other four Trustees (the
"Management Trustees") are affiliated with the Manager or Adviser. Four of the
five Independent Trustees also serve as Independent Trustees of "Discover
Brokerage Index Series" a mutual fund for which the Manager is the investment
advisor. Four of the five Independent Trustees are also Independent Trustees of
the Morgan Stanley Dean Witter Funds.

The Trustees and executive officers of the Fund, their principal business
occupations during the last five years and their affiliations, if any, with the
Manager or the Adviser, and with the 86 Morgan Stanley Dean Witter Funds, the
11 TCW/DW Funds and Discover Brokerage Index Series are shown below.

<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ------------------------------------------- -------------------------------------------------------
<S> <C>
John C. Argue (67) ........................ Of Counsel, Argue Pearson Harbison & Myers (law
Trustee firm); Trustee of the TCW/DW Funds; Director, Avery
c/o Argue Pearson Harbison & Myers Dennison Corporation (manufacturer of self-adhesive
801 South Flower Street products and office supplies); Chairman, The Rio Hondo
Los Angeles, California Memorial Foundation (charitable foundation); advisory
director, LAACO Ltd. (owner and operator of private
clubs and real estate); director or trustee of various
business and not-for-profit corporations; Director,
TCW Galileo Funds, Inc.; Director, TCW
Convertible Securities Fund, Inc.; Director, Apex
Mortgage Capital, Inc. and Nationwide Health
Properties, Inc. (real estate investment trusts).
Richard M. DeMartini* (46) ................ President and Chief Operating Officer of Morgan
Trustee Stanley Dean Witter Individual Asset Management
Two World Trade Center Group, a business unit of MSDW; President and
New York, New York Chief Operating Officer of Dean Witter Reynolds;
Trustee of the TCW/DW Funds and the Van
Kampen American Capital Funds; Director and/or
officer of various MSDW subsidiaries; formerly
Vice Chairman of the Board of the National
Association of Securities Dealers, Inc.; and
Chairman of the Board of Directors of the NASDAQ
Market, Inc.
Charles A. Fiumefreddo* (65) .............. Chairman, Chief Executive Officer and Trustee of
Chairman of the Board, President, the TCW/DW Funds; Chairman, Director or Trustee,
Chief Executive Officer and Trustee President and Chief Executive Officer of the Morgan
Two World Trade Center Stanley Dean Witter Funds; Trustee of Discover
New York, New York Brokerage Index Series; formerly Chairman, Chief
Executive Officer and Director of the Manager, the
Distributor and MSDW Advisors; Executive Vice
President and Director of Dean Witter Reynolds;
Chairman and Director of the Transfer Agent;
formerly Director and/or officer of various Morgan
Stanley Dean Witter subsidiaries (until June, 1998).
</TABLE>

10
<PAGE>

<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ------------------------------------------- ----------------------------------------------------
<S> <C>
John R. Haire (74) ........................ Chairman of the Audit Committee and Trustee of
Trustee the TCW/DW Funds; Chairman of the Audit
Two World Trade Center Committee and Director or Trustee of the Morgan
New York, New York Stanley Dean Witter Funds; Chairman of the Audit
Committee and Trustee of Discover Brokerage
Index Series; formerly Chairman of the Independent
Directors or Trustees of the Morgan Stanley Dean
Witter Funds and the TCW/DW Funds (until June,
1998); formerly President, Council for Aid to
Education (1978-1989) and Chairman and Chief
Executive Officer of Anchor Corporation, an
investment advisor (1964-1978).
Dr. Manuel H. Johnson (50) ................ Senior Partner, Johnson Smick International, Inc.,
Trustee a consulting firm; Co-Chairman and a founder of
c/o Johnson Smick International, Inc. the Group of Seven Council (G7C), an international
1133 Connecticut Avenue, N.W. economic commission; Trustee of the TCW/DW
Washington, D.C. Funds; Director or Trustee of the Morgan Stanley
Dean Witter Funds; Trustee of Discover Brokerage
Index Series; Director of NASDAQ, 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.
Thomas E. Larkin, Jr.* (59) ............... Executive Vice President and Director, TCW;
President and Trustee President and Director, Trust Company of the
865 South Figueroa Street West; Vice Chairman and Director of TCW Asset
Los Angeles, California Management Company; Chairman of the Adviser;
President and Director of TCW Galileo Funds, Inc.;
Senior Vice President of TCW Convertible
Securities Fund, Inc.; President and Trustee of the
TCW/DW Funds; Member of the Board of Trustees
of the University of Notre Dame; Director of
Orthopaedic Hospital of Los Angeles.
Michael E. Nugent (62) .................... General Partner, Triumph Capital, L.P., a private
Trustee investment partnership; Trustee of the TCW/DW
c/o Triumph Capital, L.P. Funds; Director or Trustee of the Morgan Stanley
237 Park Avenue Dean Witter Funds; Trustee of 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.
John L. Schroeder (68) .................... Retired; Trustee of the TCW/DW Funds; Director
Trustee or Trustee of the Morgan Stanley Dean Witter
c/o Gordon Altman Butowsky Funds; Trustee of Discover Brokerage Index Series;
Weitzen Shalov & Wein Director of Citizens Utilities Company; formerly
Counsel to the Independent Trustees Executive Vice President and Chief Investment
114 West 47th Street Officer of the Home Insurance Company (August,
New York, New York 1991-September, 1995).
</TABLE>

11
<PAGE>

<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ------------------------------------------- ----------------------------------------------------
<S> <C>
Marc I. Stern* (54) ....................... President and Director, TCW; President and
Trustee Director of the Adviser; Vice Chairman and Director
865 South Figueroa Street of TCW Asset Management Company; Executive
Los Angeles, California Vice President and Director of Trust Company of
the West; Chairman and Director of the TCW
Galileo Funds, Inc.; Trustee of the TCW/DW Funds;
formerly President and Director of SunAmerica,
Inc. (financial services company) (1988-1990);
Director of Qualcomm, Incorporated (wireless
communications); director or trustee of various
not-for-profit organizations.
Barry Fink (44) ........................... Senior Vice President (since March, 1997),
Vice President, Secretary and General Counsel (since February,
Secretary and General Counsel 1997) and Director (since July, 1998) of the
Two World Trade Center Manager and MSDW Advisors; Senior Vice
New York, New York President (since March, 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 TCW/DW Funds and the Morgan
Stanley Dean Witter 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 Manager and MSDW
Advisors and Assistant Secretary of the TCW/DW
Funds and the Morgan Stanley Dean Witter Funds.
Douglas H. Foreman (41) ................... Managing Director of the Adviser, Trust Company
Vice President of the West and TCW Asset Management Company
865 South Figueroa Street (since May, 1994); previously portfolio manager
Los Angeles, California with Putnam Investments.
Christopher J. Ainley (40) ................ Managing Director of the Adviser, Trust Company
Vice President of the West and TCW Asset Management Company
865 South Figueroa Street (since February, 1996); formerly Senior Vice
Los Angeles, California President of the Adviser, Trust Company of the
West and TCW Asset Management Company (May,
1994-February, 1996); previously portfolio manager
with Putnam Investments.
Thomas F. Caloia (52) ..................... First Vice President and Assistant Treasurer of the
Treasurer Manager and MSDW Advisors; Treasurer of the
Two World Trade Center TCW/DW Funds, the Morgan Stanley Dean Witter
New York, New York Funds and Discover Brokerage Index Series.
</TABLE>

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

12
<PAGE>

In addition, Mitchell M. Merin, President and Chief Operating Officer of
Asset Management of MSDW, President, Chief Executive Officer and Director of
the Manager and MSDW Advisors, Chairman and Director of the Distributor and the
Transfer Agent, Executive Vice President and Director of Dean Witter Reynolds,
and Director of various MSDW subsidiaries, Robert M. Scanlan, President, Chief
Operating Officer and Director of the Manager and MSDW Advisors, Executive Vice
President of the Distributor and the Transfer Agent and Director of the
Transfer Agent, Ronald E. Robison, Executive Vice President and Chief
Administrative Officer of the Manager and MSDW Advisors and Robert S.
Giambrone, Senior Vice President of the Manager, MSDW Advisors, the Distributor
and the Transfer Agent and Director of the Transfer Agent are Vice Presidents
of the Fund.

Marilyn K. Cranney and Carsten Otto, First Vice Presidents and Assistant
General Counsels of the Manager and MSDW Advisors, Frank Bruttomesso, Lou Anne
D. McInnis and Ruth Rossi, Vice Presidents and Assistant General Counsels of
the Manager and MSDW Advisors, and Todd Lebo, a staff attorney with MSDW
Advisors, 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 TCW/DW
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. Three of them also serve as members of the
Derivatives Committee. In addition, two of the Trustees, including one
Independent Trustee, serve as members of 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. Each of the open-end TCW/DW Funds has 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 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 TCW/DW
FUNDS. The Independent Trustees and the Funds' management believe that having
the same Independent Trustees for each of the TCW/DW 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

13
<PAGE>

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
TCW/DW 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 $2,225 plus a per
meeting fee of $200 for meetings of the Board of 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 pays the Chairman of the
Committee of the Independent Trustees an additional annual fee of $1,200). If a
Board meeting and a Committee meeting, 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 Manager, the
Adviser or an affiliated company receive no compensation or expenses reimbursed
from the Fund for their services as Trustee. The Trustees of the TCW/DW Funds
do not have retirement or deferred compensation plans.

The following table illustrates the compensation that the Fund paid to its
Independent Trustees for the fiscal year ended November 30, 1998.

FUND COMPENSATION

<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF INDEPENDENT TRUSTEE FROM THE FUND
- ------------------------------- --------------
<S> <C>
John C. Argue ................. $5,656
John R. Haire ................. 7,106
Dr. Manuel H. Johnson ......... 5,456
Michael E. Nugent ............. 5,456
John L. Schroeder ............. 5,656
</TABLE>

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 11 TCW/DW Funds that were in operation at December 31, 1998, and, in the
case of Messrs. Haire, Johnson, Nugent and Schroeder, the 86 Morgan Stanley
Dean Witter Funds that were in operation at December 31, 1998; and, in the case
of Mr. Argue, TCW Galileo Funds, Inc. and TCW Convertible Securities Fund, Inc.
With respect to Messrs. Haire, Johnson, Nugent and Schroeder, the Morgan
Stanley Dean Witter Funds are included solely because of a limited exchange
privilege between various TCW/DW Funds and five Morgan Stanley Dean Witter
Money Market Funds. With respect to Mr. Argue, TCW Galileo Funds, Inc. and TCW
Convertible Securities Fund, Inc. are included solely because the Fund's
Adviser, TCW Funds Management, Inc., also serves as Advisor to those investment
companies. Mr. Haire serves as Chairman of the Audit Committee of each Morgan
Stanley Dean Witter Fund and each TCW/DW Fund and, prior to June 1, 1998, also
served as Chairman of the Independent Directors or Trustees of those Funds.

14
<PAGE>

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

<TABLE>
<CAPTION>
FOR SERVICE
FOR SERVICE AS CHAIRMAN TOTAL CASH
AS DIRECTOR OF INDEPENDENT FOR SERVICE COMPENSATION
OR TRUSTEE FOR SERVICE DIRECTORS/TRUSTEES AS CHAIRMAN FOR SERVICES
AND COMMITTEE AS TRUSTEE AND AUDIT OF INDEPENDENT TO 86
MEMBER OF 86 AND COMMITTEE COMMITTEES OF DIRECTORS/TRUSTEES MORGAN STANLEY
MORGAN STANLEY MEMBER OF 11 86 MORGAN AND AUDIT DEAN WITTER
NAME OF DEAN WITTER TCW/DW STANLEY DEAN COMMITTEES OF 11 FUNDS AND 11
INDEPENDENT TRUSTEE FUNDS FUNDS WITTER FUNDS TCW/DW FUNDS TCW/DW FUNDS
- --------------------------- ---------------- --------------- -------------------- -------------------- ---------------
<S> <C> <C> <C> <C> <C>
John C. Argue ............. -- -- -- $
John R. Haire ............. $ $ $ $
Dr. Manuel H. Johnson -- -- --
Michael E. Nugent ......... -- -- --
John L. Schroeder ......... -- -- --
</TABLE>

As of the date of this Statement of Additional Information, 56 of the
Morgan Stanley Dean Witter Funds have adopted a retirement program under which
an Independent Trustee 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 25.0% of his or her Eligible Compensation plus
0.4166666% 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 50.0% 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 Messrs.
Haire, Johnson, Nugent and Schroeder by the 56 Morgan Stanley Dean Witter Funds
for the year ended December 31, 1998, and the estimated retirement benefits for
the Independent Trustees, to commence upon their retirement, from the 56 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 RETIREMENT BENEFITS ESTIMATED ANNUAL
YEARS ESTIMATED ACCRUED AS EXPENSES BENEFITS UPON RETIREMENT(2)
OF SERVICE AT PERCENTAGE OF --------------------- ----------------------------
NAME OF RETIREMENT ELIGIBLE BY ALL FROM ALL
INDEPENDENT TRUSTEE (MAXIMUM 10) COMPENSATION ADOPTING FUNDS ADOPTING FUNDS
- --------------------------- --------------- -------------- --------------------- ----------------------------
<S> <C> <C> <C> <C>
John R. Haire ............. 10 58.82 (3)
Dr. Manuel H. Johnson 10 58.82
Michael E. Nugent ......... 10 58.82
John L. Schroeder ......... 8 49.02
</TABLE>
<PAGE>
- ----------

(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.

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

(3) This number reflects the effect of the extension of Mr. Haire's term as
Director or Trustee until May 1, 1999.

15
<PAGE>

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

[5% ownership list]

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. MANAGER

The Manager to the Fund is Morgan Stanley Dean Witter Services Company, a
Delaware corporation, whose address is Two World Trade Center, New York, New
York 10048. The Manager is a wholly-owned subsidiary of Morgan Stanley Dean
Witter Advisors Inc., a Delaware corporation. Morgan Stanley Dean Witter
Advisors is a wholly-owned subsidiary of Morgan Stanley, Dean Witter & Co.
("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.

Pursuant to a Management Agreement (the "Management Agreement") with the
Manager, the Fund has retained the Manager to manage the Fund's business
affairs, supervise the overall day-to-day operations of the Fund (other than
rendering investment advice) and provide all administrative services to the
Fund. The Fund pays the Manager monthly compensation calculated daily by
applying the annual rate of 0.60% to the net assets of the Fund determined as
of the close of each business day. The management fee is allocated among the
Classes pro rata based on the net assets of the Fund attributable to each
Class. For the fiscal years ended November 30, 1996, 1997 and 1998, the Manager
accrued total compensation under the Management Agreement in the amounts of
$793,626, $1,081,715 and $1,085,682, respectively.

B. THE ADVISER

The Adviser to the Fund 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 Adviser is
headquartered at 865 South Figueroa Street, Suite 1800, Los Angeles, California
90017.

Pursuant to an investment advisory agreement (the "Advisory Agreement")
with the Adviser, the Fund has retained the Adviser to invest the Fund's
assets, including the placing of orders for the purchase and sale of portfolio
securities. The Fund pays the Adviser monthly compensation calculated daily by
applying the annual rate of 0.40% to the net assets of the Fund determined as
of the close of each business day. The advisory fee is allocated among the
Classes pro rata based on the net assets of the Fund attributable to each
Class. For the fiscal years ended November 30, 1996, 1997 and 1998, the Adviser
accrued total compensation under the Advisory Agreement in the amounts of
$529,084, $721,143 and $723,788, respectively.

Robert A. Day, who is Chairman of the Board of Directors of TCW, may be
deemed to be a control person of the Adviser by virtue of the aggregate
ownership by Mr. Day and his family of more than 25% of the outstanding voting
stock of TCW.

C. PRINCIPAL UNDERWRITER

The Fund's principal underwriter is the Distributor (which has the same
address as the 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.

16
<PAGE>

The Trustees, including a majority of the Independent Trustees, approved
the current Distribution Agreement appointing the Distributor as exclusive
distributor of the Fund's shares and providing for the Distributor to bear
distribution expenses not borne by the Fund. By its terms, the Distribution
Agreement had an initial term ending April 30, 1998 and will remain in effect
from year to year thereafter if approved by the Trustees. At their meeting held
on April 30, 1998, the Trustees of the Fund, including a majority of the
Independent Trustees, approved the continuation of the Distribution Agreement
until April 30, 1999.

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.

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.

D. SERVICES PROVIDED BY THE MANAGER, THE ADVISER AND FUND EXPENSES PAID BY
THIRD PARTIES

Under the terms of the Management Agreement, the Manager 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 Manager, necessary or desirable). In
addition, the Manager 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 service, heat, light, power and other utilities provided to the Fund.

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

The Management Agreement had an initial term ending April 30, 1996 and
will remain in effect from year to year thereafter, provided continuance of the
Management Agreement is approved at least annually by the vote of the holders
of a majority, as defined in the Investment Company Act, of the outstanding
shares of the Fund, or by the Trustees; provided that in either event such
continuance is approved annually by the vote of a majority of the Trustees. At
a meeting held on April 30, 1998, the Board of Trustees, including the
Independent Trustees, approved continuance of the Management Agreement until
April 30, 1999.

Under the terms of the Advisory Agreement, the Adviser invests the Fund's
assets, including placing orders for the purchase and sale of portfolio
securities. The Adviser 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 Adviser
pays the salaries of all personnel, including officers of the Fund, who are
employees of the Adviser.

17
<PAGE>

The Advisory Agreement provides that in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations thereunder, the Adviser is not liable to the Fund or any of its
investors for any act or omission by the Adviser or for any losses sustained by
the Fund or its investors. The Advisory Agreement in no way restricts the
Adviser from acting as investment adviser to others.

The Advisory Agreement had an initial term ending April 30, 1997, and
provides that it will continue from year to year thereafter, provided
continuance of the Agreement is approved at least annually by the vote of the
holders of a majority, as defined in the Act, of the outstanding shares of the
Fund, or by the Trustees of the Fund; provided that in either event such
continuance is approved annually by the vote of a majority of the Independent
Trustees of the Fund, which vote must be cast in person at a meeting called for
the purpose of voting on such approval. At a meeting held on April 30, 1998,
the Board of Trustees, including the Independent Trustees, approved the
continuance of the Advisory Agreement until April 30, 1999.

Expenses not expressly assumed by the Manager under the Management
Agreement, by the Adviser under the Advisory 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 Trustees' meetings and of
preparing, printing and mailing of proxy statements and reports to
shareholders; fees and travel expenses of Trustees or members of any advisory
board or committee who are not employees of the Manager or Adviser or any
corporate affiliate of either; 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 Trustees who are not interested persons of the Fund or
of the Manager or the Adviser (not including compensation or expenses of
attorneys who are employees of the Manager or the Adviser); 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 Trustees) 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 Trustees.

E. 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.

F. 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

18
<PAGE>

(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:(4) $ 15,552 FSCs: $ 3,000 FSCs: N/A(5)
CDSCs: $ 0 CDSCs: $ 0 CDSCs: N/A(5)
Class B .......... CDSCs: $679,862 CDSCs: $946,000 CDSCs: $ 280,000(6)
Class C .......... CDSCs: $ 372 CDSCs: $ 0 CDSCs: N/A(5)
</TABLE>

- ----------
(4) FSCs apply to Class A only.

(5) This Class commenced operations on July 28, 1997.

(6) For the period February 27, 1996 (commencement of the Fund's 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 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.

19
<PAGE>

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, the MSDW Advisor
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 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

20
<PAGE>

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
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 $ in the case of Class C at
December 31, 1998 (the end of the calendar year), which amount was equal to
0. % 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.

21
<PAGE>

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.

Under its terms, the Plan had an initial term ending April 30, 1996 and
will continue from year to year thereafter, provided such continuance is
approved annually by a vote of the Trustees in the manner described above. The
most recent continuance of the Plan for one year, until April 30, 1999, was
approved by the Trustees, including a majority of the Independent Trustees, at
a Board meeting held on April 30, 1998. Prior to approving the 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.

G. OTHER SERVICE PROVIDERS

(1) TRANSFER AGENT/DIVIDEND-PAYING AGENT

The Transfer Agent 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.

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 Manager, and of the Distributor.
As Transfer Agent and Dividend Disbursing Agent, the Transfer Agent's
responsibilities include maintaining shareholder

22
<PAGE>

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.

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

A. BROKERAGE TRANSACTIONS

Subject to the general supervision of the Trustees, the Adviser is
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

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 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
Manager by any amount of the brokerage commissions it may pay to an affiliated
broker or dealer.

During the period February 27, 1996 through November 30, 1996, the Fund
paid a total of $150 in brokerage commissions to Dean Witter Reynolds. 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 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

23
<PAGE>

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
Adviser from obtaining a high quality of brokerage and research services. In
seeking to determine the reasonableness of brokerage commissions paid in any
transaction, the Adviser 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 Adviser effects
transactions with those brokers and dealers who the Adviser believes provide
the most favorable prices and are capable of providing efficient executions. If
the Adviser 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 Adviser. 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 Adviser from brokers and dealers may be of benefit to the Adviser in the
management of accounts of some of its other clients and may not in all cases
benefit the Fund directly.

The Adviser currently serves as investment advisor to a number of clients,
including other investment companies, and may in the future act as investment
advisor to others. It is the practice of the Adviser to cause purchase and sale
transactions to be allocated among the Fund and others whose assets it manages
in such manner as it deems equitable. In making such allocations among the Fund
and other client accounts, 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 Adviser
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

24
<PAGE>

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.

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.

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

A. PURCHASE 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 TCW/DW Multi-Class Fund, any shares of TCW/DW North American
Government Income Trust or any shares of five Morgan Stanley Dean Witter money
market funds 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 TCW/DW Multi-Class Fund, any shares of TCW/DW North American Government
Income Trust or any shares of five Morgan Stanley Dean Witter money market
funds 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.

25
<PAGE>

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 are 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 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 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 Adviser 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

26
<PAGE>

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 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 Adviser 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.

27
<PAGE>

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.

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 TCW/DW Multi-Class Fund,
TCW/DW North American Government Income Trust or five money market funds for
which Morgan Stanley Dean Witter Advisors Inc. serves as investment manager 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

28
<PAGE>

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 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 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 31.08% and 43.38%, 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.

29
<PAGE>

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 71,665 143,330
</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 , 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.

<PAGE>
TCW/DW MID-CAP EQUITY TRUST

PART C OTHER INFORMATION

Item 23. Exhibits

8. Form of Amended and Restated Transfer Agency and Service
Agreement between the Registrant and Morgan Stanley Dean
Witter Trust FSB

27. Financial Data Schedules - to be filed by amendment.

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.

<PAGE>

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.

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.

2
<PAGE>

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 Value 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
(11) Morgan Stanley Dean Witter Capital Appreciation Fund
(12) Morgan Stanley Dean Witter Capital Growth Securities
(13) Morgan Stanley Dean Witter Competitive Edge Fund, "Best Ideas Portfolio"
(14) Morgan Stanley Dean Witter Convertible Securities Trust
(15) Morgan Stanley Dean Witter Developing Growth Securities Trust
(16) Morgan Stanley Dean Witter Diversified Income Trust
(17) Morgan Stanley Dean Witter Dividend Growth Securities Inc.
(18) Morgan Stanley Dean Witter Equity Fund
(19) Morgan Stanley Dean Witter European Growth Fund Inc.
(20) Morgan Stanley Dean Witter Federal Securities Trust
(21) Morgan Stanley Dean Witter Financial Services Trust
(22) Morgan Stanley Dean Witter Fund of Funds
(23) Morgan Stanley Dean Witter Global Dividend Growth Securities
(24) Morgan Stanley Dean Witter Global Short-Term Income Fund Inc.
(25) Morgan Stanley Dean Witter Global Utilities Fund
(26) Morgan Stanley Dean Witter Growth Fund
(27) Morgan Stanley Dean Witter Hawaii Municipal Trust
(28) Morgan Stanley Dean Witter Health Sciences Trust
(29) Morgan Stanley Dean Witter High Yield Securities Inc.
(30) Morgan Stanley Dean Witter Income Builder Fund
(31) Morgan Stanley Dean Witter Information Fund
(32) Morgan Stanley Dean Witter Intermediate Income Securities
(33) Morgan Stanley Dean Witter International SmallCap Fund
(34) Morgan Stanley Dean Witter Japan Fund
(35) Morgan Stanley Dean Witter Limited Term Municipal Trust
(36) Morgan Stanley Dean Witter Liquid Asset Fund Inc.
(37) Morgan Stanley Dean Witter Market Leader Trust
(38) Morgan Stanley Dean Witter Mid-Cap Dividend Growth Securities
(39) Morgan Stanley Dean Witter Mid-Cap Growth Fund
(40) Morgan Stanley Dean Witter Multi-State Municipal Series Trust
(41) Morgan Stanley Dean Witter Natural Resource Development Securities Inc.
(42) Morgan Stanley Dean Witter New York Municipal Money Market Trust
(43) Morgan Stanley Dean Witter New York Tax-Free Income Fund
(44) Morgan Stanley Dean Witter Pacific Growth Fund Inc.
(45) Morgan Stanley Dean Witter Precious Metals and Minerals Trust

<PAGE>

(46) Morgan Stanley Dean Witter Prime Income Trust
(47) Morgan Stanley Dean Witter S&P 500 Index Fund
(48) Morgan Stanley Dean Witter S&P 500 Select Fund
(49) Morgan Stanley Dean Witter Short-Term Bond Fund
(50) Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust
(51) Morgan Stanley Dean Witter Special Value Fund
(52) Morgan Stanley Dean Witter Strategist Fund
(53) Morgan Stanley Dean Witter Tax-Exempt Securities Trust
(54) Morgan Stanley Dean Witter Tax-Free Daily Income Trust
(55) Morgan Stanley Dean Witter U.S. Government Money Market Trust
(56) Morgan Stanley Dean Witter U.S. Government Securities Trust
(57) Morgan Stanley Dean Witter Utilities Fund
(58) Morgan Stanley Dean Witter Value-Added Market Series
(59) Morgan Stanley Dean Witter Value Fund
(60) Morgan Stanley Dean Witter Variable Investment Series
(61) Morgan Stanley Dean Witter World Wide Income Trust
(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. Other than Mr. Purcell, who is a Trustee of the
Registrant, none of the following persons has any position or
office with the Registrant.

<TABLE>
<CAPTION>
POSITION AND OFFICE WITH DISTRIBUTORS
NAME AND THE REGISTRANT
- ---- ------------------------------------------
<S> <C>
Philip J. Purcell Director of MSDW Distributors.

James F. Higgins Director of MSDW Distributors.

John Schaeffer Director of MSDW Distributors.

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

Mitchell M. Merin Executive Vice President of MSDW
Distributors and Vice President of the Registrant.

John B. Kemp III President of MSDW Distributors.

Robert Scanlan Executive Vice President of MSDW Distributors
and Vice President of the Registrant.

4
<PAGE>
POSITION AND OFFICE WITH DISTRIBUTORS
NAME AND THE REGISTRANT
---- ---------------------------------------

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.

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

5
<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 28th day of January, 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. 5 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 1/28/99

By: /s/ Charles A. Fiumefreddo
----------------------
Charles A. Fiumefreddo

(2) Principal Financial Officer Treasurer and Principal
Accounting Officer
1/28/99
By: /s/ Thomas F. Caloia
----------------
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
----------
Barry Fink 1/28/99
Attorney-in-Fact

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

By: /s/ David M. Butowsky
----------------- 1/28/99
David M. Butowsky
Attorney-in-Fact

</TABLE>

<PAGE>

TCW/DW MID-CAP EQUITY TRUST
EXHIBIT INDEX

8. Form of Amended and Restated Transfer Agency and Service Agreement
between the Registrant and Morgan Stanley Dean Witter Trust FSB.

27. Financial Data Schedules - To be filed by Amendment.

<PAGE>

EXHIBIT 8

AMENDED AND RESTATED
TRANSFER AGENCY AND SERVICE AGREEMENT

with

MORGAN STANLEY DEAN WITTER TRUST FSB

[open-end funds]

<PAGE>

TABLE OF CONTENTS
-----------------

Page
----
<S> <C> <C>
Article 1 Terms of Appointment..................................................... 1

Article 2 Fees and Expenses........................................................ 5

Article 3 Representations and Warranties of MSDW TRUST............................. 6

Article 4 Representations and Warranties of the Fund............................... 7

Article 5 Duty of Care and Indemnification......................................... 7

Article 6 Documents and Covenants of the Fund and MSDW TRUST.......................10

Article 7 Duration and Termination of Agreement....................................13

Article 8 Assignment...............................................................14

Article 9 Affiliations.............................................................14

Article 10 Amendment................................................................15

Article 11 Applicable Law...........................................................15

Article 12 Miscellaneous............................................................15

Article 13 Merger of Agreement......................................................17

Article 14 Personal Liability.......................................................17
</TABLE>

-i-
<PAGE>

AMENDED AND RESTATED TRANSFER AGENCY AND SERVICE AGREEMENT
----------------------------------------------------------

AMENDED AND RESTATED AGREEMENT made as of the 22nd day of
June, 1998 by and between each of the Funds listed on the signature pages
hereof, each of such Funds acting severally on its own behalf and not jointly
with any of such other Funds (each such Fund hereinafter referred to as the
"Fund"), each such Fund having its principal office and place of business at
Two World Trade Center, New York, New York, 10048, and MORGAN STANLEY DEAN
WITTER TRUST FSB ("MSDW TRUST"), a federally chartered savings bank, having its
principal office and place of business at Harborside Financial Center, Plaza
Two, Jersey City, New Jersey 07311.

WHEREAS, the Fund desires to appoint MSDW TRUST as its
transfer agent, dividend disbursing agent and shareholder servicing agent and
MSDW TRUST desires to accept such appointment;

NOW THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:

Article 1 Terms of Appointment; Duties of MSDW TRUST
------------------------------------------

1.1 Subject to the terms and conditions set forth in
this Agreement, the Fund hereby employs and appoints MSDW TRUST to act as, and
MSDW TRUST agrees to act as, the transfer agent for each series and class of
shares of the Fund, whether now or hereafter authorized or issued ("Shares"),
dividend disbursing agent and shareholder servicing agent in

-1-
<PAGE>

connection with any accumulation, open-account or similar plans provided to the
holders of such Shares ("Shareholders") and set out in the currently effective
prospectus and statement of additional information ("prospectus") of the Fund,
including without limitation any periodic investment plan or periodic
withdrawal program.

1.2 MSDW TRUST agrees that it will perform the
following services:

(a) In accordance with procedures established
from time to time by agreement between the Fund and MSDW TRUST, MSDW TRUST
shall:

(i) Receive for acceptance, orders for the
purchase of Shares, and promptly deliver payment and appropriate documentation
therefor to the custodian of the assets of the Fund (the "Custodian");

(ii) Pursuant to purchase orders, issue the
appropriate number of Shares and issue certificates therefor or hold such
Shares in book form in the appropriate Shareholder account;

(iii) Receive for acceptance redemption requests
and redemption directions and deliver the appropriate documentation therefor
to the Custodian;

(iv) At the appropriate time as and when it
receives monies paid to it by the Custodian with respect to any redemption,
pay over or cause to be paid over in the appropriate manner such monies
as instructed by the redeeming Shareholders;

-2-
<PAGE>

(v) Effect transfers of Shares by the
registered owners thereof upon receipt of appropriate instructions;

(vi) Prepare and transmit payments for dividends
and distributions declared by the Fund;

(vii) Calculate any sales charges payable by a
Shareholder on purchases and/or redemptions of Shares of the Fund as such
charges may be reflected in the prospectus;

(viii) Maintain records of account for and advise
the Fund and its Shareholders as to the foregoing; and

(ix) Record the issuance of Shares of the Fund and
maintain pursuant to Rule 17Ad-10(e) under the Securities Exchange Act of 1934
("1934 Act") a record of the total number of Shares of the Fund which are
authorized, based upon data provided to it by the Fund, and issued and
outstanding. MSDW TRUST shall also provide to the Fund on a regular basis the
total number of Shares that are authorized, issued and outstanding and shall
notify the Fund in case any proposed issue of Shares by the Fund would result
in an overissue. In case any issue of Shares would result in an overissue, MSDW
TRUST shall refuse to issue such Shares and shall not countersign and issue any
certificates requested for such Shares. When recording the issuance of Shares,
MSDW TRUST shall have no obligation to take cognizance of any Blue Sky laws
relating to the issue of sale of such Shares, which functions shall be the sole
responsibility of the Fund.

(b) In addition to and not in lieu of the services
set forth in the above paragraph (a), MSDW TRUST shall:

-3-
<PAGE>

(i) perform all of the customary services of a
transfer agent, dividend disbursing agent and, as relevant, shareholder
servicing agent in connection with dividend reinvestment, accumulation,
open-account or similar plans (including without limitation any periodic
investment plan or periodic withdrawal program), including but not limited to,
maintaining all Shareholder accounts, preparing Shareholder meeting lists,
mailing proxies, receiving and tabulating proxies, mailing shareholder reports
and prospectuses to current Shareholders, withholding taxes on U.S. resident
and non-resident alien accounts, preparing and filing appropriate forms
required with respect to dividends and distributions by federal tax authorities
for all Shareholders, preparing and mailing confirmation forms and statements
of account to Shareholders for all purchases and redemptions of Shares and
other confirmable transactions in Shareholder accounts, preparing and mailing
activity statements for Shareholders and providing Shareholder account
information;

(ii) open any and all bank accounts which may be
necessary or appropriate in order to provide the foregoing services; and

(iii) provide a system that will enable the Fund to
monitor the total number of Shares sold in each State or other jurisdiction.

(i) identify to MSDW TRUST in writing those
transactions and assets to be treated as exempt from Blue Sky reporting for
each State; and

-4-

<PAGE>

(ii) verify the inclusion on the system prior to
activation of each State in which Fund shares may be sold and thereafter
monitor the daily purchases and sales for shareholders in each State. The
responsibility of MSDW TRUST for the Fund's status under the securities laws of
any State or other jurisdiction is limited to the inclusion on the system of
each State as to which the Fund has informed MSDW TRUST that shares may be sold
in compliance with state securities laws and the reporting of purchases and
sales in each such State to the Fund as provided above and as agreed from time
to time by the Fund and MSDW TRUST.

(d) MSDW TRUST shall provide such additional
services and functions not specifically described herein as may be mutually
agreed between MSDW TRUST and the Fund. Procedures applicable to such
services may be established from time to time by agreement between the Fund
and MSDW TRUST.

Article 2 Fees and Expenses
-----------------

2.1 For performance by MSDW TRUST pursuant to this
Agreement, each Fund agrees to pay MSDW TRUST an annual maintenance fee for
each Shareholder account and certain transactional fees, if applicable, as set
out in the respective fee schedule attached hereto as Schedule A. Such fees and
out-of-pocket expenses and advances identified under Section 2.2 below may be
changed from time to time subject to mutual written agreement between the Fund
and MSDW TRUST.

2.2 In addition to the fees paid under Section 2.1
above, the Fund agrees to reimburse MSDW TRUST for out of pocket expenses in
connection with the services rendered

-5-
<PAGE>

by MSDW TRUST hereunder. In addition, any other expenses incurred by MSDW
TRUST at the request or with the consent of the Fund will be reimbursed by the
Fund.

2.3 The Fund agrees to pay all fees and
reimbursable expenses within a reasonable period of time following the mailing
of the respective billing notice. Postage for mailing of dividends, proxies,
Fund reports and other mailings to all Shareholder accounts shall be advanced
to MSDW TRUST by the Fund upon request prior to the mailing date of such
materials.

Article 3 Representations and Warranties of MSDW TRUST
--------------------------------------------

MSDW TRUST represents and warrants to the Fund that:

3.1 It is a federally chartered savings bank
whose principal office is in New Jersey.

3.2 It is and will remain registered with the
U.S. Securities and Exchange Commission ("SEC") as a Transfer Agent pursuant
to the requirements of Section 17A of the 1934 Act.

3.3 It is empowered under applicable laws and
by its charter and By-Laws to enter into and perform this Agreement.

3.4 All requisite corporate proceedings have
been taken to authorize it to enter into and perform this Agreement.

3.5 It has and will continue to have access to
the necessary facilities, equipment and personnel to perform its duties and
obligations under this Agreement.

-6-
<PAGE>

Article 4 Representations and Warranties of the Fund
------------------------------------------

The Fund represents and warrants to MSDW TRUST that:

4.1 It is a corporation duly organized and
existing and in good standing under the laws of Delaware or Maryland or a trust
duly organized and existing and in good standing under the laws of
Massachusetts, as the case may be.

4.2 It is empowered under applicable laws and
by its Articles of Incorporation or Declaration of Trust, as the case may be,
and under its By-Laws to enter into and perform this Agreement.

4.3 All corporate proceedings necessary to
authorize it to enter into and perform this Agreement have been taken.

4.4 It is an investment company registered with
the SEC under the Investment Company Act of 1940, as amended (the "1940 Act").

4.5 A registration statement under the
Securities Act of 1933 (the "1933 Act") is currently effective and will remain
effective, and appropriate state securities law filings have been made and will
continue to be made, with respect to all Shares of the Fund being offered for
sale.

Article 5 Duty of Care and Indemnification
--------------------------------

5.1 MSDW TRUST shall not be responsible for,
and the Fund shall indemnify and hold MSDW TRUST harmless from and against,
any and all losses, damages, costs,

-7-
<PAGE>

charges, counsel fees, payments, expenses and liability arising out of or
attributable to:

(a) All actions of MSDW TRUST or its agents or
subcontractors required to be taken pursuant to this Agreement, provided that
such actions are taken in good faith and without negligence or willful
misconduct.

(b) The Fund's refusal or failure to comply
with the terms of this Agreement, or which arise out of the Fund's lack of
good faith, negligence or willful misconduct or which arise out of breach
of any representation or warranty of the Fund hereunder.

(c) The reliance on or use by MSDW TRUST or
its agents or subcontractors of information, records and documents which (i)
are received by MSDW TRUST or its agents or subcontractors and furnished to it
by or on behalf of the Fund, and (ii) have been prepared and/or maintained by
the Fund or any other person or firm on behalf of the Fund.

(d) The reliance on, or the carrying out by
MSDW TRUST or its agents or subcontractors of, any instructions or requests of
the Fund.

(e) The offer or sale of Shares in violation of
any requirement under the federal securities laws or regulations or the
securities or Blue Sky laws of any State or other jurisdiction that notice of
offering of such Shares in such State or other jurisdiction or in violation of
any stop order or other determination or ruling by any federal agency or any
State or other jurisdiction with respect to the offer or sale of such Shares in
such State or other jurisdiction.

-8-

<PAGE>

5.2 MSDW TRUST shall indemnify and hold the
Fund harmless from or against any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liability arising out of or attributable
to any action or failure or omission to act by MSDW TRUST as a result of the
lack of good faith, negligence or willful misconduct of MSDW TRUST, its
officers, employees or agents.

5.3 At any time, MSDW TRUST may apply to any
officer of the Fund for instructions, and may consult with legal counsel to the
Fund, with respect to any matter arising in connection with the services to be
performed by MSDW TRUST under this Agreement, and MSDW TRUST and its agents or
subcontractors shall not be liable and shall be indemnified by the Fund for any
action taken or omitted by it in reliance upon such instructions or upon the
opinion of such counsel. MSDW TRUST, its agents and subcontractors shall be
protected and indemnified in acting upon any paper or document furnished by or
on behalf of the Fund, reasonably believed to be genuine and to have been
signed by the proper person or persons, or upon any instruction, information,
data, records or documents provided to MSDW TRUST or its agents or
subcontractors by machine readable input, telex, CRT data entry or other
similar means authorized by the Fund, and shall not be held to have notice of
any change of authority of any person, until receipt of written notice thereof
from the Fund. MSDW TRUST, its agents and subcontractors shall also be
protected and indemnified in recognizing stock certificates which are
reasonably believed to bear the proper manual or facsimile signature of the
officers of the Fund, and the proper countersignature of any former transfer
agent or registrar, or of a co-transfer agent or co-registrar.

-9-
<PAGE>

5.4 In the event either party is unable to
perform its obligations under the terms of this Agreement because of acts of
God, strikes, equipment or transmission failure or damage reasonably beyond its
control, or other causes reasonably beyond its control, such party shall not be
liable for damages to the other for any damages resulting from such failure to
perform or otherwise from such causes.

5.5 Neither party to this Agreement shall be
liable to the other party for consequential damages under any provision of this
Agreement or for any act or failure to act hereunder.

5.6 In order that the indemnification
provisions contained in this Article 5 shall apply, upon the assertion of a
claim for which either party may be required to indemnify the other, the party
seeking indemnification shall promptly notify the other party of such
assertion, and shall keep the other party advised with respect to all
developments concerning such claim. The party who may be required to indemnify
shall have the option to participate with the party seeking indemnification in
the defense of such claim. The party seeking indemnification shall in no case
confess any claim or make any compromise in any case in which the other party
may be required to indemnify it except with the other party's prior written
consent.

Article 6 Documents and Covenants of the Fund and MSDW TRUST
--------------------------------------------------

6.1 The Fund shall promptly furnish to MSDW
TRUST the following, unless previously furnished to Dean Witter Trust Company,
the prior transfer agent of the Fund:

-10-
<PAGE>

(a) If a corporation:

(i) A certified copy of the resolution of the
Board of Directors of the Fund authorizing the appointment of MSDW TRUST and
the execution and delivery of this Agreement;

(ii) A certified copy of the Articles of
Incorporation and By-Laws of the Fund and all amendments thereto;

(iii) Certified copies of each vote of the Board
of Directors designating persons authorized to give instructions on behalf of
the Fund and signature cards bearing the signature of any officer of
the Fund or any other person authorized to sign written instructions on behalf
of the Fund;

(iv) A specimen of the certificate for Shares
of the Fund in the form approved by the Board of Directors, with a certificate
of the Secretary of the Fund as to such approval;

(b) If a business trust:

(i) A certified copy of the resolution of the
Board of Trustees of the Fund authorizing the appointment of MSDW TRUST and
the execution and delivery of this Agreement;

(ii) A certified copy of the Declaration of
Trust and By-Laws of the Fund and all amendments thereto;

-11-

<PAGE>

(iii) Certified copies of each vote of the Board
of Trustees designating persons authorized to give instructions on behalf of
the Fund and signature cards bearing the signature of any officer of the Fund
or any other person authorized to sign written instructions on behalf of the
Fund;

(iv) A specimen of the certificate for Shares
of the Fund in the form approved by the Board of Trustees, with a certificate
of the Secretary of the Fund as to such approval;

(c) The current registration statements and
any amendments and supplements thereto filed with the SEC pursuant to the
requirements of the 1933 Act or the 1940 Act;

(d) All account application forms or other
documents relating to Shareholder accounts and/or relating to any plan, program
or service offered or to be offered by the Fund; and

(e) Such other certificates, documents or
opinions as MSDW TRUST deems to be appropriate or necessary for the proper
performance of its duties.

6.2 MSDW TRUST hereby agrees to establish and
maintain facilities and procedures reasonably acceptable to the Fund for
safekeeping of Share certificates, check forms and facsimile signature
imprinting devices, if any; and for the preparation or use, and for keeping
account of, such certificates, forms and devices.

-12-

<PAGE>

6.3 MSDW TRUST shall prepare and keep records
relating to the services to be performed hereunder, in the form and manner as
it may deem advisable and as required by applicable laws and regulations. To
the extent required by Section 31 of the 1940 Act, and the rules and
regulations thereunder, MSDW TRUST agrees that all such records prepared or
maintained by MSDW TRUST relating to the services performed by MSDW TRUST
hereunder are the property of the Fund and will be preserved, maintained and
made available in accordance with such Section 31 of the 1940 Act, and the
rules and regulations thereunder, and will be surrendered promptly to the Fund
on and in accordance with its request.

6.4 MSDW TRUST and the Fund agree that all
books, records, information and data pertaining to the business of the other
party which are exchanged or received pursuant to the negotiation or the
carrying out of this Agreement shall remain confidential and shall not be
voluntarily disclosed to any other person except as may be required by law or
with the prior consent of MSDW TRUST and the Fund.

6.5 In case of any request or demands for the
inspection of the Shareholder records of the Fund, MSDW TRUST will endeavor to
notify the Fund and to secure instructions from an authorized officer of the
Fund as to such inspection. MSDW TRUST reserves the right, however, to exhibit
the Shareholder records to any person whenever it is advised by its counsel
that it may be held liable for the failure to exhibit the Shareholder records
to such person.

Article 7 Duration and Termination of Agreement
-------------------------------------

7.1 This Agreement shall remain in full force
and effect until August 1,

-13-

<PAGE>

2000 and from year-to-year thereafter unless terminated by either party as
provided in Section 7.2 hereof.

7.2 This Agreement may be terminated by the
Fund on 60 days written notice, and by MSDW TRUST on 90 days written notice,
to the other party without payment of any penalty.

7.3 Should the Fund exercise its right to
terminate, all out-of-pocket expenses associated with the movement of records
and other materials will be borne by the Fund. Additionally, MSDW TRUST
reserves the right to charge for any other reasonable fees and expenses
associated with such termination.

Article 8 Assignment
----------

8.1 Except as provided in Section 8.3 below,
neither this Agreement nor any rights or obligations hereunder may be assigned
by either party without the written consent of the other party.

8.2 This Agreement shall inure to the benefit
of and be binding upon the parties and their respective permitted successors
and assigns.

8.3 MSDW TRUST may, in its sole discretion and
without further consent by the Fund, subcontract, in whole or in part, for the
performance of its obligations and duties hereunder with any person or entity
including but not limited to companies which are affiliated with MSDW TRUST;
provided, however, that such person or entity has and maintains the
qualifications, if any, required to perform such obligations and duties, and
that MSDW TRUST

-14-

<PAGE>

shall be as fully responsible to the Fund for the acts and omissions of any
agent or subcontractor as it is for its own acts or omissions under this
Agreement.

Article 9 Affiliations
------------

9.1 MSDW TRUST may now or hereafter, without
the consent of or notice to the Fund, function as transfer agent and/or
shareholder servicing agent for any other investment company registered with
the SEC under the 1940 Act and for any other issuer, including without
limitation any investment company whose adviser, administrator, sponsor or
principal underwriter is or may become affiliated with Morgan Stanley Dean
Witter & Co. or any of its direct or indirect subsidiaries or affiliates.

9.2 It is understood and agreed that the
Directors or Trustees (as the case may be), officers, employees, agents and
shareholders of the Fund, and the directors, officers, employees, agents and
shareholders of the Fund's investment adviser and/or distributor, are or may be
interested in MSDW TRUST as directors, officers, employees, agents and
shareholders or otherwise, and that the directors, officers, employees, agents
and shareholders of MSDW TRUST may be interested in the Fund as Directors or
Trustees (as the case may be), officers, employees, agents and shareholders or
otherwise, or in the investment adviser and/or distributor as directors,
officers, employees, agents, shareholders or otherwise.

Article 10 Amendment
---------

10.1 This Agreement may be amended or modified
by a written agreement executed by both parties and authorized or approved by
a resolution of the Board of Directors or the Board of Trustees (as
the case may be) of the Fund.

-15-

<PAGE>

Article 11 Applicable Law
--------------

11.1 This Agreement shall be construed and the
provisions thereof interpreted under and in accordance with the laws of the
State of New York.

Article 12 Miscellaneous
-------------

12.1 In the event that one or more additional
investment companies managed or administered by Morgan Stanley Dean Witter
Advisors Inc. or any of its affiliates ("Additional Funds") desires to retain
MSDW TRUST to act as transfer agent, dividend disbursing agent and/or
shareholder servicing agent, and MSDW TRUST desires to render such services,
such services shall be provided pursuant to a letter agreement, substantially
in the form of Exhibit A hereto, between MSDW TRUST and each Additional Fund.

12.2 In the event of an alleged loss or
destruction of any Share certificate, no new certificate shall be issued in
lieu thereof, unless there shall first be furnished to MSDW TRUST an affidavit
of loss or non-receipt by the holder of Shares with respect to which a
certificate has been lost or destroyed, supported by an appropriate bond
satisfactory to MSDW TRUST and the Fund issued by a surety company satisfactory
to MSDW TRUST, except that MSDW TRUST may accept an affidavit of loss and
indemnity agreement executed by the registered holder (or legal representative)
without surety in such form as MSDW TRUST deems appropriate indemnifying MSDW
TRUST and the Fund for the issuance of a replacement certificate, in cases
where the alleged loss is in the amount of $1,000 or less.

12.3 In the event that any check or other order for
payment of money on the

-16-

<PAGE>

account of any Shareholder or new investor is returned unpaid for any reason,
MSDW TRUST will (a) give prompt notification to the Fund's distributor
("Distributor") (or to the Fund if the Fund acts as its own distributor) of
such non-payment; and (b) take such other action, including imposition of a
reasonable processing or handling fee, as MSDW TRUST may, in its sole
discretion, deem appropriate or as the Fund and, if applicable, the Distributor
may instruct MSDW TRUST.

12.4 Any notice or other instrument authorized or
required by this Agreement to be given in writing to the Fund or to MSDW TRUST
shall be sufficiently given if addressed to that party and received by it at
its office set forth below or at such other place as it may from time to time
designate in writing.

To the Fund:

[Name of Fund]
Two World Trade Center
New York, New York 10048

Attention: General Counsel

To MSDW TRUST:
----------

Morgan Stanley Dean Witter Trust FSB
Harborside Financial Center
Plaza Two
Jersey City, New Jersey 07311

Attention: President

Article 13 Merger of Agreement
-------------------

13.1 This Agreement constitutes the entire
agreement between the parties hereto and supersedes any prior agreement with
respect to the subject matter hereof whether oral or written.

-17-

<PAGE>

Article 14 Personal Liability
------------------

14.1 In the case of a Fund organized as a
Massachusetts business trust, a copy of the Declaration of Trust of the Fund is
on file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Board of
Trustees of the Fund as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund;
provided, however, that the Declaration of Trust of the Fund provides that the
assets of a particular Series of the Fund shall under no circumstances be
charged with liabilities attributable to any other Series of the Fund and that
all persons extending credit to, or contracting with or having any claim
against, a particular Series of the Fund shall look only to the assets of that
particular Series for payment of such credit, contract or claim.

IN WITNESS WHEREOF, the parties hereto have caused this
Amended and Restated Agreement to be executed in their names and on their
behalf by and through their duly authorized officers, as of the day and year
first above written.

MORGAN STANLEY DEAN WITTER FUNDS

MONEY MARKET FUNDS

1. Morgan Stanley Dean Witter Liquid Asset Fund Inc.
2. Active Assets Money Trust
3. Morgan Stanley Dean Witter U.S. Government Money Market Trust
4. Active Assets Government Securities Trust
5. Morgan Stanley Dean Witter Tax-Free Daily Income Trust
6. Active Assets Tax-Free Trust
7. Morgan Stanley Dean Witter California Tax-Free Daily Income Trust
8. Morgan Stanley Dean Witter New York Municipal Money Market Trust
9. Active Assets California Tax-Free Trust

-18-
<PAGE>

EQUITY FUNDS

10. Morgan Stanley Dean Witter American Value Fund
11. Morgan Stanley Dean Witter Mid-Cap Growth Fund
12. Morgan Stanley Dean Witter Dividend Growth Securities Inc.
13. Morgan Stanley Dean Witter Capital Growth Securities
14. Morgan Stanley Dean Witter Global Dividend Growth Securities
15. Morgan Stanley Dean Witter Income Builder Fund
16. Morgan Stanley Dean Witter Natural Resource Development Securities Inc.
17. Morgan Stanley Dean Witter Precious Metals and Minerals Trust
18. Morgan Stanley Dean Witter Developing Growth Securities Trust
19. Morgan Stanley Dean Witter Health Sciences Trust
20. Morgan Stanley Dean Witter Capital Appreciation Fund
21. Morgan Stanley Dean Witter Information Fund
22. Morgan Stanley Dean Witter Value-Added Market Series
23. Morgan Stanley Dean Witter European Growth Fund Inc.
24. Morgan Stanley Dean Witter Pacific Growth Fund Inc.
25. Morgan Stanley Dean Witter International SmallCap Fund
26. Morgan Stanley Dean Witter Japan Fund
27. Morgan Stanley Dean Witter Utilities Fund
28. Morgan Stanley Dean Witter Global Utilities Fund
29. Morgan Stanley Dean Witter Special Value Fund
30. Morgan Stanley Dean Witter Financial Services Trust
31. Morgan Stanley Dean Witter Market Leader Trust
32. Morgan Stanley Dean Witter Fund of Funds
33. Morgan Stanley Dean Witter S&P 500 Index Fund
34. Morgan Stanley Dean Witter Competitive Edge Fund
35. Morgan Stanley Dean Witter Mid-Cap Dividend Growth Securities
36. Morgan Stanley Dean Witter Equity Fund
37. Morgan Stanley Dean Witter Growth Fund
38. Morgan Stanley Dean Witter S&P 500 Select Fund

BALANCED FUNDS

39. Morgan Stanley Dean Witter Balanced Growth Fund
40. Morgan Stanley Dean Witter Balanced Income Trust

ASSET ALLOCATION FUNDS

41. Morgan Stanley Dean Witter Strategist Fund
42. Dean Witter Global Asset Allocation Fund

-19-

<PAGE>

FIXED INCOME FUNDS

43. Morgan Stanley Dean Witter High Yield Securities Inc.
44. Morgan Stanley Dean Witter High Income Securities
45. Morgan Stanley Dean Witter Convertible Securities Trust
46. Morgan Stanley Dean Witter Intermediate Income Securities
47. Morgan Stanley Dean Witter Short-Term Bond Fund
48. Morgan Stanley Dean Witter World Wide Income Trust
49. Morgan Stanley Dean Witter Global Short-Term Income Fund Inc.
50. Morgan Stanley Dean Witter Diversified Income Trust
51. Morgan Stanley Dean Witter U.S. Government Securities Trust
52. Morgan Stanley Dean Witter Federal Securities Trust
53. Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust
54. Morgan Stanley Dean Witter Intermediate Term U.S. Treasury Trust
55. Morgan Stanley Dean Witter Tax-Exempt Securities Trust
56. Morgan Stanley Dean Witter Limited Term Municipal Trust
57. Morgan Stanley Dean Witter California Tax-Free Income Fund
58. Morgan Stanley Dean Witter New York Tax-Free Income Fund
59. Morgan Stanley Dean Witter Hawaii Municipal Trust
60. Morgan Stanley Dean Witter Multi-State Municipal Series Trust
61. Morgan Stanley Dean Witter Select Municipal Reinvestment Fund

SPECIAL PURPOSE FUNDS

62. Dean Witter Retirement Series
63. Morgan Stanley Dean Witter Variable Investment Series
64. Morgan Stanley Dean Witter Select Dimensions Investment Series

TCW/DW FUNDS

65. TCW/DW North American Government Income Trust
66. TCW/DW Latin American Growth Fund
67. TCW/DW Income and Growth Fund
68. TCW/DW Small Cap Growth Fund
69. TCW/DW Total Return Trust

-20-
<PAGE>

70. TCW/DW Global Telecom Trust
71. TCW/DW Mid-Cap Equity Trust
72. TCW/DW Emerging Markets Opportunities Trust

By:
----------------------------
Barry Fink
Vice President and General Counsel

ATTEST:

- ----------------------------
Assistant Secretary

MORGAN STANLEY DEAN WITTER TRUST FSB

By:
------------------------------
John Van Heuvelen
President

ATTEST:

- -----------------------------
Executive Vice President

-21-

<PAGE>

Exhibit A
---------

Morgan Stanley Dean Witter Trust FSB
Harborside Financial Center
Plaza Two
Jersey City, NJ 07311

Gentlemen:

The undersigned, (inset name of investment company) a
(Massachusetts business trust/Maryland corporation) (the "Fund"), desires to
employ and appoint Morgan Stanley Dean Witter Trust FSB ("MSDW TRUST") to act
as transfer agent for each series and class of shares of the Fund, whether now
or hereafter authorized or issued ("Shares"), dividend disbursing agent and
shareholder servicing agent, registrar and agent in connection with any
accumulation, open-account or similar plan provided to the holders of Shares,
including without limitation any periodic investment plan or periodic
withdrawal plan.

The Fund hereby agrees that, in consideration for the payment
by the Fund to MSDW TRUST of fees as set out in the fee schedule attached
hereto as Schedule A, MSDW TRUST shall provide such services to the Fund
pursuant to the terms and conditions set forth in the Transfer Agency and
Service Agreement annexed hereto, as if the Fund was a signatory thereto.

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Please indicate MSDW TRUST's acceptance of employment and
appointment by the Fund in the capacities set forth above by so indicating in
the space provided below.

Very truly yours,

(name of fund)

By:__________________________________
Barry Fink
Vice President and General Counsel

ACCEPTED AND AGREED TO:

MORGAN STANLEY DEAN WITTER TRUST FSB

By:_______________________
Its:______________________
Date:_____________________

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Fund: TCW/DW Mid-Cap Equity Trust

Fees: (1) Annual maintenance fee of $12.65 per shareholder account,
payable monthly.

(2) A fee equal to 1/12 of the fee set forth in (1) above,
for providing Forms 1099 for accounts closed during the year,
payable following the end of the calendar year.

(3) Out-of-pocket expenses in accordance with Section 2.2 of the
Agreement.

(4) Fees for additional services not set forth in this
Agreement shall be as negotiated between the parties.