<PAGE>
PROSPECTUS - JULY 31, 2000
Morgan Stanley Dean Witter
JAPAN FUND
[COVER PHOTO]
A MUTUAL FUND THAT SEEKS LONG-TERM CAPITAL APPRECIATION
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this Prospectus. Any representation to
the contrary is a criminal offense.
<PAGE>
CONTENTS
<TABLE>
<S> <C> <C>
The Fund Investment Objective........................................ 1
Principal Investment Strategies............................. 1
Principal Risks............................................. 1
Past Performance............................................ 3
Fees and Expenses........................................... 4
Additional Investment Strategy Information.................. 5
Additional Risk Information................................. 5
Fund Management............................................. 6
Shareholder Information Pricing Fund Shares......................................... 8
How to Buy Shares........................................... 8
How to Exchange Shares...................................... 9
How to Sell Shares.......................................... 11
Distributions............................................... 13
Tax Consequences............................................ 13
Share Class Arrangements.................................... 14
Financial Highlights ............................................................ 21
Our Family of Funds ............................................................ Inside Back Cover
THIS PROSPECTUS CONTAINS IMPORTANT INFORMATION ABOUT THE FUND. PLEASE READ IT
CAREFULLY AND KEEP IT FOR FUTURE REFERENCE.
</TABLE>
<PAGE>
[Sidebar]
CAPITAL APPRECIATION
An investment objective having the goal of selecting securities with the
potential to rise in price rather than pay out income.
[End Sidebar]
THE FUND
[ICON] INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------
Morgan Stanley Dean Witter Japan Fund seeks long-term capital
appreciation.
[ICON] PRINCIPAL INVESTMENT STRATEGIES
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The Fund will normally invest at least 65% of its total
assets in common or preferred stocks (including depository
receipts) of companies which are located in Japan. A company
will be considered located in Japan if (i) it is organized
under the laws of Japan and has its principal office in
Japan, (ii) it derives 50% or more of its revenues from
businesses in Japan or (iii) its equity securities are traded
principally on a Japanese stock exchange. Up to 25% of the
Fund's total assets may be invested in Japanese stocks that
are NOT traded on the "first" (i.e., principal) sections of
the three main Japanese exchanges (the Tokyo, Osaka and
Nagoya exchanges).
The Fund's "Sub-Advisor" - Morgan Stanley Dean Witter
Investment Management Inc. - generally invests Fund assets in
companies it believes have earnings growth potential and are
attractively priced.
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. A depository receipt is generally
issued by a bank or financial institution and represents an
ownership interest in the common stock or other equity
securities of a foreign company.
In addition, the Fund may invest in convertible securities
and fixed-income securities of companies located in Japan or
guaranteed by the Japanese government, and in equity or
fixed-income securities of companies located in, or
governments of, developed countries in Asia, Europe or North
America (including the U.S.). These securities may include
lower-rated securities. The Fund may also invest in forward
currency contracts and options on foreign currencies.
In pursuing the Fund's investment objective, the Sub-Advisor
has considerable leeway in deciding which investments it
buys, holds or sells on a day-to-day basis - and which
trading strategies it uses. For example, the Sub-Advisor in
its discretion may determine to use some permitted trading
strategies while not using others.
[ICON] PRINCIPAL RISKS
--------------------------------------------------------------------------------
There is no assurance that the Fund will achieve its
investment objective. 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. 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.
JAPANESE SECURITIES. The Fund concentrates its investments in
the common stock (including depository receipts) of Japanese
companies. Consequently, the Fund's share
1
<PAGE>
price may be more volatile than that of mutual funds not
sharing this geographic concentration. The value of the
Fund's shares may vary widely in response to political and
economic factors affecting companies in Japan.
Securities in Japan are denominated and quoted in yen. As a
result, the value of the Fund's Japanese securities as
measured in U.S. dollars may be affected by fluctuations in
the value of the Japanese yen relative to the U.S. dollar.
Securities traded on Japanese stock exchanges have exhibited
significant volatility in recent years. In addition, Japanese
securities that are not traded on the first sections of the
three main Japanese exchanges may be more volatile and less
liquid than those traded on the first sections.
The decline in the Japanese securities markets since 1989 has
contributed to a weakness in the Japanese economy. Continued
economic weakness could result in further declines in the
Japanese securities markets. Japan's economy may be
significantly affected by any strains in its trade relations,
particularly with the U.S.
Japanese securities are also subject to the more general
risks associated with foreign securities which are discussed
below.
FOREIGN SECURITIES IN GENERAL. The Fund's investments in
foreign securities 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 (including depository receipts) also have
risks related to economic and political developments abroad,
including expropriations, confiscatory taxation, exchange
control regulation, limitation on the use or transfer of Fund
assets and any effects of foreign social, economic or
political instability. In particular, adverse political or
economic developments in Japan or another region or country
in which the Fund invests could cause a substantial decline
in value of the portfolio. 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. In addition, differences in clearance and
settlement procedures in foreign markets may occasion delays
in settlements of the Fund's trades effected in those
markets. Delays in purchasing securities may result in the
Fund losing investment opportunities. The inability to
dispose of foreign securities due to settlement delays could
result in losses to the Fund due to subsequent declines in
value of the securities.
2
<PAGE>
[Sidebar]
ANNUAL TOTAL RETURNS
This chart shows how the performance of the Fund's Class B shares has varied
from year to year over the past 3 calendar years.
AVERAGE ANNUAL TOTAL RETURNS
This table compares the Fund's average annual total returns with those of a
broad measure of market performance over time. The Fund's returns include the
maximum applicable sales charge for each Class and assume you sold your shares
at the end of each period.
[End Sidebar]
OTHER RISKS. The performance of the Fund also will depend on
whether the Sub-Advisor is successful in pursuing the Fund's
investment strategy. The Fund is also subject to other risks
from its permissible investments, including the risks
associated with its investments in fixed-income and
convertible securities (including lower-rated securities),
forward currency contracts and options on foreign currencies.
For more information about these risks, see the "Additional
Risk Information" section.
Shares of the Fund are not bank deposits and are not
guaranteed or insured by the FDIC or any other government
agency.
[ICON] PAST PERFORMANCE
--------------------------------------------------------------------------------
The bar chart and table below provide some indication of the
risks of investing in the Fund. The Fund's past performance
does not indicate how the Fund will perform in the future.
ANNUAL TOTAL RETURNS - CALENDAR YEARS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
1997 -15.98%
'98 6.97%
'99 58.16%
</TABLE>
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. Year-to-date total return as of
June 30, 2000 was 2.49%.
During the periods shown in the bar chart, the highest return
for a calendar quarter was 23.48% (quarter ended June 30,
1997) and the lowest return for a calendar quarter was
-17.32% (quarter ended December 31, 1997).
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (AS OF DECEMBER 31, 1999)
----------------------------------------------------------------------------------------
LIFE OF FUND
PAST 1 YEAR (SINCE 4/26/96)
<S> <C> <C>
----------------------------------------------------------------------------------------
Class A(1) 50.49% --
----------------------------------------------------------------------------------------
Class B 53.16% 3.09%
----------------------------------------------------------------------------------------
Class C(1) 57.03% --
----------------------------------------------------------------------------------------
Class D(1) 59.53% --
----------------------------------------------------------------------------------------
MSCI Japan Index(2) 61.53% 1.15%
----------------------------------------------------------------------------------------
</TABLE>
1 Classes A, C and D commenced operations on July 28, 1997.
2 The Morgan Stanley Capital International (MSCI) Japan Index is a
capitalization weighted index that measures performance in U.S. dollars
and assumes reinvestment of net dividends of companies listed on the Tokyo
Stock Exchange. "Net dividends" reflects a reduction in dividends after
taking into account withholding of taxes by Japan.
The Index does not include any expenses, fees or charges. The Index is
unmanaged and should not be considered
an investment.
3
<PAGE>
[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 May 31, 2000.
[End Sidebar]
[ICON] FEES AND EXPENSES
--------------------------------------------------------------------------------
The table below briefly describes the fees and expenses that
you may pay if you buy and hold shares of the Fund. 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 Fund does not charge account or exchange fees.
See the "Share Class Arrangements" section for further fee
and expense information.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS D
<S> <C> <C> <C> <C>
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SHAREHOLDER FEES
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Maximum sales charge (load) imposed on purchases (as a
percentage of offering price) 5.25%(1) None None None
---------------------------------------------------------------------------------------------------
Maximum deferred sales charge (load)
(as a percentage based on the lesser of the offering price
or net asset value at redemption) None(2) 5.00%(3) 1.00%(4) None
---------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
---------------------------------------------------------------------------------------------------
Management fee 0.95% 0.95% 0.95% 0.95%
---------------------------------------------------------------------------------------------------
Distribution and service (12b-1) fees 0.21% 1.00% 1.00% None
---------------------------------------------------------------------------------------------------
Other expenses 0.38% 0.38% 0.38% 0.38%
---------------------------------------------------------------------------------------------------
Total annual Fund operating expenses 1.54% 2.33% 2.33% 1.33%
---------------------------------------------------------------------------------------------------
</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 if you sell your shares 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 if you sell your shares within one year after purchase.
EXAMPLE
This example is intended to help you compare the cost of
investing in the Fund with the cost of investing in other
mutual funds.
The example assumes that you invest $10,000 in the Fund, your
investment has a 5% return each year, and the Fund's
operating expenses remain the same. Although your actual
costs may be higher or lower, the tables below show your
costs at the end of each period based on these assumptions
depending upon whether or not you sell your shares at the end
of each period.
<TABLE>
<CAPTION>
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
<S> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------- ----------------------------------
CLASS A $673 $ 984 $1,318 $2,258 $673 $984 $1,318 $2,258
--------------------------------------------------- ----------------------------------
CLASS B $736 $1,027 $1,445 $2,666 $236 $727 $1,245 $2,666
--------------------------------------------------- ----------------------------------
CLASS C $336 $ 728 $1,246 $2,666 $236 $728 $1,246 $2,666
--------------------------------------------------- ----------------------------------
CLASS D $135 $ 421 $ 728 $1,600 $135 $421 $ 728 $1,600
--------------------------------------------------- ----------------------------------
</TABLE>
Long-term shareholders of Class B and Class C may pay more in
sales charges, including distribution fees, than the economic
equivalent of the maximum front-end sales charges permitted
by the NASD.
4
<PAGE>
[ICON] ADDITIONAL INVESTMENT STRATEGY INFORMATION
--------------------------------------------------------------------------------
This section provides additional information relating to the
Fund's principal investment strategies.
FIXED-INCOME AND CONVERTIBLE SECURITIES. The Fund may invest
up to 35% of its total assets in fixed-income securities or
securities convertible into common stock of companies located
in Japan, Asia, Europe or North America (including the U.S.).
These securities may be rated below investment grade
(commonly known as "junk bonds"). The Fund's fixed-income
investments may include zero coupon securities, which are
purchased at a discount and either (i) pay no interest, or
(ii) accrue interest, but make no payment until maturity.
FORWARD CURRENCY CONTRACTS AND OPTIONS ON FOREIGN
CURRENCIES. The Fund's investments also may include forward
currency contracts, which involve the purchase or sale of a
specific amount of foreign currency at the current price with
delivery at a specified future date. The Fund may use these
contracts to hedge against adverse price movements in its
portfolio securities or securities it may purchase and the
currencies in which they are denominated, or to gain exposure
to currencies underlying various securities or financial
instruments. In addition, the Fund may invest in put and call
options with respect to foreign currencies. Options may be
used to seek to protect against a decline in currency prices
or an increase in prices of currencies that may be purchased.
DEFENSIVE INVESTING. The Fund may take temporary "defensive"
positions in attempting to respond to adverse market
conditions. The Fund may invest any amount of its assets in
cash or money market instruments in a defensive posture when
the Sub-Advisor believes it is advisable to do so. Although
taking a defensive posture is designed to protect the Fund
from an anticipated market downturn, it could have the effect
of reducing the benefit from any upswing in the market. When
the Fund takes a defensive position, it may not achieve its
investment objective.
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 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.
[ICON] ADDITIONAL RISK INFORMATION
--------------------------------------------------------------------------------
This section provides additional information relating to the
principal risks of investing in the Fund.
FIXED-INCOME SECURITIES. All fixed-income securities, such as
corporate debt, are subject to two types of risk: credit risk
and interest rate risk. Credit risk refers to the possibility
that the issuer of a security will be unable to make interest
payments and/or repay the principal on its debt.
Interest rate risk refers to fluctuations in the value of a
fixed-income security resulting from changes in the general
level of interest rates. When the general level of interest
5
<PAGE>
[Sidebar]
MORGAN STANLEY DEAN WITTER ADVISORS INC.
The Investment Manager is widely recognized as a leader in the mutual fund
industry and together with Morgan Stanley Dean Witter Services Company Inc., its
wholly-owned subsidiary, had approximately $150 billion in assets under
management as of June 30, 2000.
[End Sidebar]
rates goes up, the prices of most fixed-income securities go
down. When the general level of interest rates goes down, the
prices of most fixed-income securities go up. (Zero coupon
securities are typically subject to greater price
fluctuations than comparable securities that pay interest.) A
portion of the Fund's fixed-income securities may include
junk bonds, which have speculative characteristics.
CONVERTIBLE SECURITIES. The Fund also may invest a portion of
its assets in convertible securities, which are securities
that generally pay interest and may be converted into common
stock. These securities may carry risks associated with both
common stock and fixed-income securities. To the extent that
a convertible security's investment value is greater than its
conversion value, its price will be likely to increase when
interest rates fall and decrease when interests rates rise,
as with a fixed-income security. If the conversion value
exceeds the investment value, the price of the convertible
security will tend to fluctuate directly with the price of
the underlying equity security. A portion of these securities
may include junk bonds, which have speculative
characteristics.
FORWARD CURRENCY CONTRACTS AND OPTIONS ON FOREIGN
CURRENCIES. Participation in forward currency contracts also
involves risks. If the Sub-Advisor employs a strategy that
does not correlate well with the Fund's investments or the
currencies in which the investments are denominated, currency
contracts could result in a loss. The contracts also may
increase the Fund's volatility and may involve a significant
risk. In addition, if the Fund invests in options on
currencies, its participation in these markets would subject
the Fund's portfolio to certain risks. The Sub-Advisor's
predictions of movements in the direction of the currency
markets may be inaccurate, and the adverse consequences to
the Fund (e.g., a reduction in the Fund's net asset value or
a reduction in the amount of income available for
distribution) may leave the Fund in a worse position than if
these strategies were not used. The options may be
over-the-counter options, which are options negotiated with
dealers; there is no secondary market for these investments.
[ICON] FUND MANAGEMENT
--------------------------------------------------------------------------------
The Fund has retained the Investment Manager - Morgan Stanley
Dean Witter Advisors Inc. - to provide administrative
services, manage its business affairs and supervise the
investment of its assets. The Investment Manager has, in
turn, contracted with the Sub-Advisor - Morgan Stanley Dean
Witter Investment Management Inc. - to invest the Fund's
assets, including the placing of orders for the purchase and
sale of portfolio securities. Morgan Stanley Dean Witter
Investment Management Inc. has been the Sub-Advisor of the
Fund since October 1, 1998. The Investment Manager is a
wholly-owned subsidiary of Morgan Stanley Dean Witter & Co.,
a preeminent global financial services firm that maintains
leading market positions in each of its three primary
businesses: securities, asset management and credit services.
Its main business office is located at Two World Trade
Center, New York, NY 10048.
The Sub-Advisor, together with its institutional investment
management affiliates, managed approximately $180 billion as
of June 30, 2000 primarily for employee benefit plans,
investment companies, endowments, foundations and wealthy
individuals. The Sub-Advisor also is a subsidiary of Morgan
Stanley Dean Witter & Co. Its main business office is located
at 1221 Avenue of the Americas, New York, NY 10020.
6
<PAGE>
Kunihiko Sugio, Principal of the Sub-Advisor, and John R.
Alkire, Managing Director of the Sub-Advisor and President of
Morgan Stanley Investment Advisory, Japan, are the primary
portfolio managers of the Fund. Mr. Sugio and Mr. Alkire have
been managing Japanese equity portfolios for the Sub-Advisor
for over five years.
The Fund pays the Investment Manager a monthly management fee
as full compensation for the services and facilities
furnished to the Fund, and for Fund expenses assumed by the
Investment Manager. The fee is based on the Fund's average
daily net assets. The Investment Manager pays the Sub-Advisor
monthly compensation equal to 40% of this fee. For the fiscal
year ended May 31, 2000, the Fund accrued total compensation
to the Investment Manager amounting to 0.95% of the Fund's
average daily net assets.
7
<PAGE>
[Sidebar]
CONTACTING A FINANCIAL ADVISOR
If you are new to the Morgan Stanley Dean Witter Family of Funds and would like
to contact a Financial Advisor, call (877) 937-MSDW (toll-free) 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.msdw.com/individual/
funds
[End Sidebar]
SHAREHOLDER INFORMATION
[ICON] 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. While the assets of each Class are
invested in a single portfolio of securities, the net asset
value of each Class will differ because the Classes have
different ongoing distribution fees.
The net asset value per share of the Fund is determined once
daily at 4:00 p.m. Eastern time on each day that the New York
Stock Exchange is open (or, on days when the New York Stock
Exchange closes prior to 4:00 p.m., at such earlier time).
Shares will not be priced on days that the New York Stock
Exchange is closed.
The value of the Fund's portfolio securities is based on the
securities' market price when available. When a market price
is not readily available, including circumstances under which
the Investment Manager and/or Sub-Advisor determines that a
security's market price is not accurate, a portfolio security
is valued at its fair value, as determined under procedures
established by the Fund's Board of Trustees. In these cases,
the Fund's net asset value will reflect certain portfolio
securities' fair value rather than their market price. With
respect to securities that are primarily listed on foreign
exchanges, the values of the Fund's portfolio securities may
change on days when you will not be able to purchase or sell
your shares.
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.
[ICON] HOW TO BUY SHARES
--------------------------------------------------------------------------------
You may open a new account to buy Fund shares or buy
additional Fund shares for an existing account by contacting
your Morgan Stanley Dean Witter Financial Advisor or other
authorized financial representative. Your Financial Advisor
will assist you, step-by-step, with the procedures to invest
in the Fund. You may also purchase shares directly by calling
the Fund's transfer agent and requesting an application.
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.
8
<PAGE>
[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]
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
purchase order. Your payment is due on the third business day
after you place your purchase order. We reserve the right to
reject any order for the purchase of Fund shares.
<TABLE>
<CAPTION>
MINIMUM INVESTMENT AMOUNTS
---------------------------------------------------------------------------------------------
MINIMUM INVESTMENT
-------------------
INVESTMENT OPTIONS INITIAL ADDITIONAL
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------
Regular Accounts $1,000 $100
---------------------------------------------------------------------------------------------
Individual Retirement Accounts: Regular IRAs $1,000 $100
Education IRAs $ 500 $100
---------------------------------------------------------------------------------------------
EASYINVEST-SM- (Automatically from your
checking or savings account
or Money Market Fund) $ 100* $100*
---------------------------------------------------------------------------------------------
</TABLE>
* Provided your schedule of investments totals $1,000 in twelve months.
There is no minimum investment amount if you purchase Fund
shares through: (1) the Investment Manager's mutual fund
asset allocation plan, (2) a program, approved by the Fund's
distributor, in which you pay an asset-based fee for
advisory, administrative and/ or brokerage services, or
(3) employer-sponsored employee benefit plan accounts.
INVESTMENT OPTIONS FOR CERTAIN INSTITUTIONAL AND OTHER
INVESTORS/CLASS D SHARES. To be eligible to purchase Class D
shares, you must qualify under one of the investor categories
specified in the "Share Class Arrangements" section of this
PROSPECTUS.
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:
- 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).
- Make out a check for the total amount payable to: Morgan
Stanley Dean Witter Japan Fund.
- Mail the letter and check to Morgan Stanley Dean Witter
Trust FSB at P.O. Box 1040, Jersey City, NJ 07303.
[ICON] HOW TO EXCHANGE SHARES
--------------------------------------------------------------------------------
PERMISSIBLE FUND EXCHANGES. You may exchange shares of any
Class of the Fund for the same Class of any other
continuously offered Multi-Class Fund, or for shares of a
No-Load Fund, a Money Market Fund, North American Government
Income Trust or Short-Term U.S. Treasury Trust, without the
imposition of an exchange fee. In addition, Class A shares of
the Fund may be exchanged for shares of an FSC Fund (funds
subject to a front-end sales charge). See the inside back
cover of this PROSPECTUS for each Morgan Stanley Dean Witter
Fund's designation as a Multi-Class Fund, No-Load Fund, Money
Market Fund or FSC Fund. If a Morgan Stanley Dean Witter Fund
is not listed, consult the inside back cover of that fund's
prospectus for its designation.
9
<PAGE>
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(s), policies and
investment minimums, and should be read before investment.
Since exchanges are available only into continuously offered
Morgan Stanley Dean Witter Funds, exchanges are not available
into any new Morgan Stanley Dean Witter Fund during its
initial offering period, or when shares of a particular
Morgan Stanley Dean Witter Fund are not being offered for
purchase.
EXCHANGE PROCEDURES. You can process an exchange by
contacting your Morgan Stanley Dean Witter Financial Advisor
or other authorized financial representative. Otherwise, you
must forward an exchange privilege authorization form to the
Fund's transfer agent - Morgan Stanley Dean Witter Trust FSB
- and then write the transfer agent or call (800) 869-NEWS to
place an exchange order. You can obtain an exchange privilege
authorization form by contacting your Financial Advisor or
other authorized financial representative or by calling (800)
869-NEWS. If you hold share certificates, no exchanges may be
processed until we have received all applicable share
certificates.
An exchange to any Morgan Stanley Dean Witter Fund (except a
Money Market Fund) is made on the basis of the next
calculated net asset values of the funds involved after the
exchange instructions are accepted. When exchanging into a
Money Market Fund, the Fund's shares are sold at their next
calculated net asset value and the Money Market Fund's shares
are purchased at their net asset value on the following
business day.
The Fund may terminate or revise the exchange privilege upon
required notice. The check writing privilege is 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.
MARGIN ACCOUNTS. If you have pledged your Fund shares in a
margin account, contact your Morgan Stanley Dean Witter
Financial Advisor or other authorized financial
representative regarding restrictions on the exchange of such
shares.
TAX CONSIDERATIONS OF EXCHANGES. If you exchange shares of
the Fund for shares of another Morgan Stanley Dean Witter
Fund, there are important tax considerations. For tax
purposes, the exchange out of the Fund is considered a sale
of Fund shares - and the exchange into the other fund is
considered a purchase. As a result, you may realize a capital
gain or loss.
10
<PAGE>
You should review the "Tax Consequences" section and consult
your own tax professional about the tax consequences of an
exchange.
LIMITATIONS ON EXCHANGES. Certain patterns of past exchanges
and/or purchase or sale transactions involving the Fund or
other Morgan Stanley Dean Witter Funds may result in the Fund
limiting or prohibiting, at its discretion, additional
purchases and/or exchanges. Determinations in this regard may
be made based on the frequency or dollar amount of the
previous exchanges or purchase or sale transactions. You will
be notified in advance of limitations on your exchange
privileges.
CDSC CALCULATIONS ON EXCHANGES. See the "Share
Class Arrangements" section of this PROSPECTUS for a
discussion of how applicable contingent deferred sales
charges (CDSCs) are calculated for shares of one Morgan
Stanley Dean Witter 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.
[ICON] HOW TO SELL SHARES
--------------------------------------------------------------------------------
You can sell some or all of your Fund shares at any time. If
you sell Class A, Class B or Class C shares, your net sale
proceeds are reduced by the amount of any applicable CDSC.
Your shares will be sold at the next price calculated after
we receive your order to sell as described below.
<TABLE>
<CAPTION>
OPTIONS PROCEDURES
<S> <C>
--------------------------------------------------------------------------------
Contact your To sell (redeem) your shares, simply call your Morgan
Financial Advisor Stanley Dean Witter Financial Advisor or other authorized
financial representative.
------------------------------------------------------------
[ICON] Payment will be sent to the address to which the account is
registered or deposited in your brokerage account.
--------------------------------------------------------------------------------
By Letter You can also sell your shares by writing a "letter of
instruction" that includes:
[ICON] - your account number;
- the dollar amount or the number of shares you wish to
sell;
- the Class of shares you wish to sell; and
- the signature of each owner as it appears on the account.
------------------------------------------------------------
If you are requesting payment to anyone other than the
registered owner(s) or that payment be sent to any address
other than the address of the registered owner(s) or
pre-designated bank account, you will need a signature
guarantee. You can obtain a signature guarantee from an
eligible guarantor acceptable to Morgan Stanley Dean Witter
Trust FSB. (You should contact Morgan Stanley Dean Witter
Trust FSB at (800) 869-NEWS for a determination as to
whether a particular institution is an eligible guarantor.)
A notary public cannot provide a signature guarantee.
Additional documentation may be required for shares held by
a corporation, partnership, trustee or executor.
------------------------------------------------------------
Mail the letter to Morgan Stanley Dean Witter Trust FSB at
P.O. Box 983, Jersey City, NJ 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>
11
<PAGE>
<TABLE>
<CAPTION>
OPTIONS PROCEDURES
<S> <C>
--------------------------------------------------------------------------------
Systematic If your investment in all of the Morgan Stanley Dean Witter
Withdrawal Plan Family of Funds has a total market value of at least
[ICON] $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 or annual basis, from any fund with a balance of
at least $1,000. Each time you add a fund to the plan, you
must meet the plan requirements.
------------------------------------------------------------
Amounts withdrawn are subject to any applicable CDSC. A CDSC
may be waived under certain circumstances. See the Class B
waiver categories listed in the "Share Class Arrangements"
section of this PROSPECTUS.
------------------------------------------------------------
To sign up for the Systematic Withdrawal Plan, contact your
Morgan Stanley Dean Witter Financial Advisor or call
(800) 869-NEWS. You may terminate or suspend your plan at
any time. Please remember that withdrawals from the plan are
sales of shares, not Fund "distributions," and ultimately
may exhaust your account balance. The Fund may terminate or
revise the plan at any time.
--------------------------------------------------------------------------------
</TABLE>
PAYMENT FOR SOLD SHARES. After we receive your complete
instructions to sell as described above, a check will be
mailed to you within seven days, although we will attempt to
make payment within one business day. Payment may also be
sent to your brokerage account.
Payment may be postponed or the right to sell your shares
suspended under unusual circumstances. If you request to sell
shares that were recently purchased by check, your sale will
not be effected until it has been verified that the check has
been honored.
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. If you have pledged your Fund shares in a
margin account, contact your Morgan Stanley Dean Witter
Financial Advisor or other authorized financial
representative regarding restrictions on the sale of such
shares.
12
<PAGE>
[SIDEBAR]
TARGETED DIVIDENDS-SM-
You may select to have your Fund distributions automatically invested in other
Classes of Fund shares or Classes of another Morgan Stanley Dean Witter Fund
that you own. Contact your Morgan Stanley Dean Witter Financial Advisor for
further information about this service.
[End Sidebar]
[ICON] 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 may be
passed along as "capital gain distributions."
The Fund declares income dividends separately for each Class.
Distributions paid on Class A and Class D shares usually 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.
Capital gains, if any, are usually distributed in December.
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. However, if you purchase Fund
shares prior to the record date for the distribution, and
payment for such shares is received after the record date,
the distribution will automatically be paid to you in cash,
even if you did not request to receive all distributions in
cash. No interest will accrue on uncashed checks. If you wish
to change how your distributions are paid, your request
should be received by the Fund's transfer agent, Morgan
Stanley Dean Witter Trust FSB, at least five business days
prior to the record date of the distributions.
[ICON] 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:
- The Fund makes distributions; and
- You sell Fund shares, including an exchange to another
Morgan Stanley Dean Witter Fund.
TAXES ON DISTRIBUTIONS. Your distributions are normally
subject to federal and state income tax when they are paid,
whether you take them in cash or reinvest them in fund
shares. A distribution also may be subject to local income
tax. Any income dividend distributions and any short-term
capital gain distributions are taxable to you as ordinary
income. Any long-term capital gain distributions are taxable
as long-term capital gains, no matter how long you have owned
shares in the Fund.
13
<PAGE>
If more than 50% of the Fund's assets are invested in foreign
securities at the end of any fiscal year, the Fund may elect
to permit shareholders to take a credit or deduction on their
federal income tax return for foreign taxes paid by 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 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 Morgan Stanley Dean Witter Fund is treated for tax
purposes like a sale of your original shares and a purchase
of your new shares. Thus, the exchange may, like a sale,
result in a taxable gain or loss to you and will give you a
new tax basis for your new shares.
When you open your Fund account, you should provide your
social security or tax identification number on your
investment application. By providing this information, you
will avoid being subject to a federal backup withholding tax
of 31% on taxable distributions and redemption proceeds. Any
withheld amount would be sent to the IRS as an advance tax
payment.
[ICON] SHARE CLASS ARRANGEMENTS
--------------------------------------------------------------------------------
The Fund offers several Classes of shares having different
distribution arrangements designed to provide you with
different purchase options according to your investment
needs. Your Morgan Stanley Dean Witter Financial Advisor or
other authorized financial representative can help you decide
which Class may be appropriate for you.
The general public is offered three Classes: Class A shares,
Class B shares and Class C shares, which differ principally
in terms of sales charges and ongoing expenses. A fourth
Class, Class D shares, is offered only to a limited category
of investors. Shares that you acquire through reinvested
distributions will not be subject to any front-end sales
charge or CDSC - contingent deferred sales charge. Sales
personnel may receive different compensation for selling each
Class of shares. The sales charges applicable to each
Class provide for the distribution financing of shares of
that Class.
The chart below compares the sales charge and annual 12b-1
fee applicable to each Class:
<TABLE>
<CAPTION>
MAXIMUM
ANNUAL 12B-1
CLASS SALES CHARGE FEE
<S> <C> <C>
-----------------------------------------------------------------
A Maximum 5.25% initial sales charge
reduced for purchase of $25,000 or more;
shares sold without an initial sales
charge are generally subject to a 1.0%
CDSC during the first year 0.25%
-----------------------------------------------------------------
B Maximum 5.0% CDSC during the first year
decreasing to 0% after six years 1.0%
-----------------------------------------------------------------
C 1.0% CDSC during the first year 1.0%
-----------------------------------------------------------------
D None None
-----------------------------------------------------------------
</TABLE>
14
<PAGE>
[Sidebar]
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.
[End Sidebar]
CLASS A SHARES Class A shares are sold at net asset value
plus an initial sales charge of up to 5.25%. The initial
sales charge is reduced for purchases of $25,000 or more
according to the schedule below. Investments of $1 million or
more are not subject to an initial sales charge, but are
generally subject to a contingent deferred sales charge, or
CDSC, of 1.0% on sales made within one year after the last
day of the month of purchase. The CDSC will be assessed in
the same manner and with the same CDSC waivers as with
Class B shares. Class A shares are also subject to a
distribution (12b-1) fee of up to 0.25% of the average daily
net assets of the Class.
The offering price of Class A shares includes a sales charge
(expressed as a percentage of the offering price) on a single
transaction as shown in the following table:
<TABLE>
<CAPTION>
FRONT-END SALES CHARGE
------------------------------------------------
AMOUNT OF SINGLE PERCENTAGE OF APPROXIMATE PERCENTAGE OF
TRANSACTION PUBLIC OFFERING PRICE NET 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:
- A single account (including an individual, trust or
fiduciary account).
- Family member accounts (limited to husband, wife and
children under the age of 21).
- Pension, profit sharing or other employee benefit plans of
companies and their affiliates.
- Tax-exempt organizations.
- Groups organized for a purpose other than to buy mutual
fund shares.
COMBINED PURCHASE PRIVILEGE. You also will have the benefit
of reduced sales charges by combining purchases of Class A
shares of the Fund in a single transaction with purchases of
Class A shares of other Multi-Class Funds and shares of FSC
Funds.
RIGHT OF ACCUMULATION. You also may benefit from a reduction
of sales charges if the cumulative net asset value of
Class A shares of the Fund purchased in a single transaction,
together with shares of other funds you currently own which
were previously purchased at a price including a front-end
sales charge (including shares acquired through reinvestment
of distributions), amounts to $25,000 or more. Also, if you
have a cumulative net asset value of all your Class A and
Class D shares equal to at least $5 million (or $25 million
for certain employee benefit plans), you are eligible to
purchase Class D shares of any fund subject to the fund's
minimum initial investment requirement.
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
15
<PAGE>
directly through the Fund), at the time a purchase order is
placed, that the purchase qualifies for the reduced sales
charge under the Right of Accumulation. Similar notification
must be made in writing when an order is placed by mail. The
reduced sales charge will not be granted if: (i) notification
is not furnished at the time of the order; or (ii) a review
of the records of Dean Witter Reynolds or other authorized
dealer of Fund shares or the Fund's transfer agent does not
confirm your represented holdings.
LETTER OF INTENT. The schedule of reduced sales charges for
larger purchases also will be available to you if you enter
into a written "letter of intent." A letter of intent
provides for the purchase of Class A shares of the Fund or
other Multi-Class Funds or shares of FSC Funds within a
thirteen-month period. The initial purchase under a letter of
intent must be at least 5% of the stated investment goal. To
determine the applicable sales charge reduction, you may also
include: (1) the cost of shares of other Morgan Stanley Dean
Witter 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, which may be deducted from your
investment.
OTHER 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 CDSC upon sale) if
your account qualifies under one of the following categories:
- A trust for which Morgan Stanley Dean Witter Trust FSB
provides discretionary trustee services.
- Persons participating in a fee-based investment program
(subject to all of its terms and conditions, including
termination fees, 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.
- 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 Morgan
Stanley Dean Witter's Retirement Plan Services serves as
recordkeeper under a written Recordkeeping Services
Agreement ("MSDW Eligible Plans") which have at least 200
eligible employees.
- An 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.
- 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 Fundshares, 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
16
<PAGE>
[Sidebar]
CONTINGENT DEFERRED
SALES CHARGE OR CDSC
A fee you pay when you sell shares of certain Morgan Stanley Dean Witter Funds
purchased without an initial sales charge. This fee declines the longer you hold
your shares as set forth in the table.
[End Sidebar]
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.
- Current or retired Directors/Trustees of the Morgan Stanley
Dean Witter Funds, such persons' spouses and children under
the age of 21, and trust accounts for which any of such
persons is a beneficiary.
- Current or retired directors, officers and employees of
Morgan Stanley Dean Witter & Co. and any of its
subsidiaries, such persons' spouses and children under the
age of 21, and trust accounts for which any of such persons
is a beneficiary.
CLASS B SHARES Class B shares are offered at net asset value
with no initial sales charge but are subject to a contingent
deferred sales charge, or CDSC, as set forth in the table
below. For the purpose of calculating the CDSC, shares are
deemed to have been purchased on the last day of the month
during which they were purchased.
<TABLE>
<CAPTION>
YEAR SINCE PURCHASE PAYMENT MADE CDSC AS A PERCENTAGE OF AMOUNT REDEEMED
<S> <C>
--------------------------------------------------------------------------------------------
First 5.0%
--------------------------------------------------------------------------------------------
Second 4.0%
--------------------------------------------------------------------------------------------
Third 3.0%
--------------------------------------------------------------------------------------------
Fourth 2.0%
--------------------------------------------------------------------------------------------
Fifth 2.0%
--------------------------------------------------------------------------------------------
Sixth 1.0%
--------------------------------------------------------------------------------------------
Seventh and thereafter None
--------------------------------------------------------------------------------------------
</TABLE>
Each time you place an order to sell or exchange shares,
shares with no CDSC will be sold or exchanged first, then
shares with the lowest CDSC will be sold or exchanged next.
For any shares subject to a CDSC, the CDSC will be assessed
on an amount equal to the lesser of the current market value
or the cost of the shares being sold.
CDSC WAIVERS. A CDSC, if otherwise applicable, will be waived
in the case of:
- Sales of shares held at the time you die or become disabled
(within the definition in Section 72(m)(7) of the Internal
Revenue Code which relates to the ability to engage in
gainful employment), if the shares are: (i) registered
either in your name (not a trust) or in the names of you
and your spouse as joint tenants with right of
survivorship; or (ii) held in a qualified corporate or
self-employed retirement plan, IRA or 403(b) Custodial
Account, provided in either case that the sale is requested
within one year of your death or initial determination of
disability.
- 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
59 1/2); (ii) distributions from an IRA or
403(b) Custodial Account following attainment of age
59 1/2; 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).
17
<PAGE>
- Sales of shares held for you as a participant in an MSDW
Eligible Plan.
- 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.
- Sales of shares if you simultaneously invest the proceeds
in the Investment Manager's mutual fund asset allocation
program, pursuant to which investors pay an asset-based
fee. Any shares you acquire in connection with the
Investment Manager's mutual fund asset allocation program
are subject to all of the terms and conditions of that
program, including termination fees, mandatory sale or
transfer restrictions on termination.
All waivers will be granted only following the Fund's
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
distribution (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 reinvestment of dividends or capital gains
distributions), less the 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 an MSDW Eligible Plan,
the plan is treated as a single investor and all Class B
shares will convert to Class A shares on the conversion date
of the Class B shares of a Morgan Stanley Dean Witter Fund
purchased by that plan.
Currently, the Class B share conversion is not a taxable
event; the conversion feature may be cancelled if it is
deemed a taxable event in the future by the Internal Revenue
Service.
If you exchange your Class B shares for shares of a Money
Market Fund, a No-Load Fund, North American Government Income
Trust or Short-Term U.S. Treasury Trust,
18
<PAGE>
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 for one
year, exchanged to Class B of another Morgan Stanley Dean
Witter Multi- Class Fund for another year, then sold your
shares, a CDSC rate of 4% would be imposed on the shares
based on a two year holding period -- one year for each fund.
However, if you had exchanged the shares of the Fund for a
Money Market Fund (which does not charge a CDSC) instead of
the Multi-Class Fund, then sold your shares, a CDSC rate of
5% would be imposed on the shares based on a one year holding
period. The one year in the Money Market Fund would not be
counted. Nevertheless, if shares subject to a CDSC are
exchanged for a fund that does not charge a CDSC, you will
receive a credit when you sell the shares equal to the
distribution (12b-1) fees, if any, you paid on those shares
while in that fund up to the amount of any applicable CDSC.
In addition, shares that are exchanged into or from a Morgan
Stanley Dean Witter Fund subject to a higher CDSC rate will
be subject to the higher rate, even if the shares are re-
exchanged into a fund with a lower CDSC rate.
CLASS C SHARES Class C shares are sold at net asset value
with no initial sales charge but are subject to a CDSC of
1.0% on sales made within one year after the last day of the
month of purchase. The CDSC will be assessed in the same
manner and with the same CDSC waivers as with Class B shares.
DISTRIBUTION FEE. Class C shares are subject to an annual
distribution (12b-1) fee of up to 1.0% of the average daily
net assets of that Class. The Class C shares' distribution
fee may cause that Class to have higher expenses and pay
lower dividends than Class A or Class D shares. Unlike
Class B shares, Class C shares have no conversion feature
and, accordingly, an investor that purchases Class C shares
may be subject to distribution (12b-1) fees applicable to
Class C shares for an indefinite period.
CLASS D SHARES Class D shares are offered without any sales
charge on purchases or sales and without any distribution
(12b-1) fee. Class D shares are offered only to investors
meeting an initial investment minimum of $5 million
($25 million for MSDW Eligible Plans) and the following
investor categories:
- Investors participating in the Investment Manager's mutual
fund asset allocation program (subject to all of its terms
and conditions, including termination fees, mandatory sale
or transfer restrictions on termination) pursuant to which
they pay an asset-based fee.
19
<PAGE>
- Persons participating in a fee-based investment program
(subject to all of its terms and conditions, including
termination fees, 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.
- 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.
- Certain unit investment trusts sponsored by Dean Witter
Reynolds.
- Certain other open-end investment companies whose shares
are distributed by the Fund's distributor.
- Investors who were shareholders of the Dean Witter
Retirement Series on September 11, 1998 for additional
purchases for their former Dean Witter Retirement
Series accounts.
MEETING CLASS D ELIGIBILITY MINIMUMS. To meet the $5 million
($25 million for certain MSDW Eligible Plans) initial
investment to qualify to purchase Class D shares you may
combine: (1) purchases in a single transaction of Class D
shares of the Fund and other Morgan Stanley Dean Witter
Multi-Class Funds; and/or (2) previous purchases of Class A
and Class D shares of Multi-Class Funds and shares of FSC
Funds you currently own, along with shares of Morgan Stanley
Dean Witter Funds you currently own that you acquired in
exchange for those shares.
NO SALES CHARGES FOR REINVESTED CASH DISTRIBUTIONS If you
receive a cash payment representing an income dividend or
capital gain and you reinvest that amount in the applicable
Class of shares by returning the check within 30 days of the
payment date, the purchased shares would not be subject to an
initial sales charge or CDSC.
PLAN OF DISTRIBUTION (RULE 12B-1 FEES) The Fund has adopted
a Plan of Distribution in accordance with Rule 12b-1 under
the Investment Company Act of 1940 with respect to the
distribution of Class A, Class B and Class C shares. The Plan
allows the Fund to pay distribution fees for the sale and
distribution of these shares. It also allows the Fund to pay
for services to shareholders of Class A, Class B and Class C
shares. Because these fees are paid out of the Fund's assets
on an ongoing basis, over time these fees will increase the
cost of your investment in these Classes and may cost you
more than paying other types of sales charges.
20
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
financial performance of the Fund for the periods indicated. Certain
information reflects financial results for a single Fund share
throughout each year. The total returns in the table represent the rate
an investor would have earned or lost on an investment in the Fund
(assuming reinvestment of all dividends and distributions).
This information has been audited by PricewaterhouseCoopers LLP,
independent accountants, whose report, along with the Fund's financial
statements, is included in the annual report, which is available upon
request.
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31,
-------------------------- FOR THE PERIOD JULY 28, 1997*
2000 1999 THROUGH MAY 31, 1998
<S> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------
CLASS A SHARES++
-------------------------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA:
-------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 7.57 $ 6.72 $ 9.16
-------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.10) (0.02) 0.05
Net realized and unrealized gain (loss) 2.66 1.31 (2.49)
------ ------ -------
Total income (loss) from investment operations 2.56 1.29 (2.44)
-------------------------------------------------------------------------------------------------------------
LESS DIVIDENDS:
From net investment income -- (0.33) --
In excess of net investment income -- (0.11) --
------ ------ -------
Total dividends -- (0.44) --
-------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.13 $ 7.57 $ 6.72
-------------------------------------------------------------------------------------------------------------
TOTAL RETURN+ 33.25 % 20.61 % (26.64)%(1)
-------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
-------------------------------------------------------------------------------------------------------------
Expenses 1.54 %(3) 1.72 %(3) 1.83 %(2)
-------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.79)%(3) (0.94)%(3) 0.75 %(2)
-------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
-------------------------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $5,314 $1,823 $126
-------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 35% 78% 7%
-------------------------------------------------------------------------------------------------------------
</TABLE>
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
21
<PAGE>
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31,
-----------------------------------------------------
2000++ 1999++ 1998**++ 1997
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------
CLASS B SHARES
---------------------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA:
---------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 7.58 $ 6.67 $ 8.79 $ 9.61
---------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment loss (0.17) (0.13) (0.13) (0.16)
Net realized and unrealized gain (loss) 2.67 1.37 (1.99) (0.66)
-------- -------- -------- --------
Total income (loss) from investment operations 2.50 1.24 (2.12) (0.82)
---------------------------------------------------------------------------------------------------------
LESS DIVIDENDS:
From net investment income -- (0.22) -- --
In excess of net investment income -- (0.11) -- --
-------- -------- -------- --------
Total dividends -- (0.33) -- --
---------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.08 $ 7.58 $ 6.67 $ 8.79
---------------------------------------------------------------------------------------------------------
TOTAL RETURN+ 32.28 % 19.89 % (24.12)% (8.53)%
---------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
---------------------------------------------------------------------------------------------------------
Expenses 2.33 %(3) 2.59 %(3) 2.48 % 2.43 %
---------------------------------------------------------------------------------------------------------
Net investment loss (1.58)%(3) (1.81)%(3) (1.62)% (1.77)%
---------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
---------------------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $210,006 $147,812 $125,008 $239,719
---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 35 % 78 % 7 % 25 %
---------------------------------------------------------------------------------------------------------
<CAPTION>
FOR THE PERIOD APRIL 26, 1996*
THROUGH MAY 31, 1996
<S> <C>
--------------------------------------------------
CLASS B SHARES
--------------------------------------------------
SELECTED PER SHARE DATA:
--------------------------------------------------
Net asset value, beginning of period $10.00
--------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment loss --
Net realized and unrealized gain (loss) (0.39)
--------
Total income (loss) from investment operations (0.39)
--------------------------------------------------
LESS DIVIDENDS:
From net investment income --
In excess of net investment income --
--------
Total dividends --
--------------------------------------------------
Net asset value, end of period $ 9.61
--------------------------------------------------
TOTAL RETURN+ (3.90)%(1)
--------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
--------------------------------------------------
Expenses 2.84 %(2)
--------------------------------------------------
Net investment loss (0.52)%(2)
--------------------------------------------------
SUPPLEMENTAL DATA:
--------------------------------------------------
Net assets, end of period, in thousands $273,544
--------------------------------------------------
Portfolio turnover rate --
--------------------------------------------------
</TABLE>
* Commencement of operations.
** Prior to July 28, 1997, the Fund issued one class of shares. All shares of
the Fund held prior to that date have been designated Class B shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the
net asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class
specific expenses.
22
<PAGE>
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31,
-------------------------- FOR THE PERIOD JULY 28, 1997*
2000 1999 THROUGH MAY 31, 1998
<S> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------
CLASS C SHARES++
-------------------------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA:
-------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 7.49 $ 6.68 $ 9.16
-------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment loss (0.17) (0.12) (0.07)
Net realized and unrealized gain (loss) 2.64 1.34 (2.41)
------- ------ -------
Total income (loss) from investment operations 2.47 1.22 (2.48)
-------------------------------------------------------------------------------------------------------------
LESS DIVIDENDS:
From net investment income -- (0.30) --
In excess of net investment income -- (0.11) --
------- ------ -------
Total dividends -- (0.41) --
-------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.96 $ 7.49 $ 6.68
-------------------------------------------------------------------------------------------------------------
TOTAL RETURN+ 32.10 % 19.86 % (27.07)%(1)
-------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
-------------------------------------------------------------------------------------------------------------
Expenses 2.33 %(3) 2.58 %(3) 2.52 %(2)
-------------------------------------------------------------------------------------------------------------
Net investment loss (1.58)%(3) (1.80)%(3) (1.21)%(2)
-------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
-------------------------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $10,792 $5,423 $1,738
-------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 35 % 78 % 7 %
-------------------------------------------------------------------------------------------------------------
</TABLE>
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
23
<PAGE>
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31,
-------------------------- FOR THE YEAR JULY 28, 1997*
2000 1999 THROUGH MAY 31, 1998
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------
CLASS D SHARES++
---------------------------------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA:
---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 7.62 $ 6.72 $ 9.16
---------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment loss (0.08) (0.02) (0.01)
Net realized and unrealized gain (loss) 2.68 1.37 (2.43)
------- ------ -------
Total income (loss) from investment operations 2.60 1.35 (2.44)
---------------------------------------------------------------------------------------------------------------------
LESS DIVIDENDS:
From net investment income -- (0.34) --
In excess of net investment income -- (0.11) --
------- ------ -------
Total dividends -- (0.45) --
---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.22 $ 7.62 $ 6.72
---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN+ 33.25 % 21.76 % (26.64)%(1)
---------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
---------------------------------------------------------------------------------------------------------------------
Expenses 1.33 %(3) 1.59 %(3) 1.60 %(2)
---------------------------------------------------------------------------------------------------------------------
Net investment loss (0.58)%(3) (0.81)%(3) (0.23)%(2)
---------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
---------------------------------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $16,887 $1,051 $628
---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 35% 78% 7%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Calculated based on the net asset value as of the last business day of the
period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
24
<PAGE>
MORGAN STANLEY DEAN WITTER
FAMILY OF FUNDS
The Morgan Stanley Dean Witter Family of Funds offers investors a wide
range of investment choices. Come on in and meet the family!
--------------------------------------------------------------------------------
GROWTH FUNDS
--------------------------------
GROWTH FUNDS
Aggressive Equity Fund
American Opportunities Fund
Capital Growth Securities
Developing Growth Securities
Growth Fund
Market Leader Trust
Mid-Cap Equity Trust
Next Generation Trust
Small Cap Growth Fund
Special Value Fund
Tax-Managed Growth Fund
21st Century Trend Fund
THEME FUNDS
Financial Services Trust
Health Sciences Trust
Information Fund
Natural Resource Development Securities
GLOBAL/INTERNATIONAL FUNDS
Competitive Edge Fund - "Best Ideas"
Portfolio
European Growth Fund
Fund of Funds - International Portfolio
International Fund
International SmallCap Fund
Japan Fund
Latin American Growth Fund
Pacific Growth Fund
--------------------------------------------------------------------------------
GROWTH & INCOME FUNDS
--------------------------------
Balanced Growth Fund
Balanced Income Fund
Convertible Securities Trust
Dividend Growth Securities
Equity Fund
Fund of Funds - Domestic Portfolio
Income Builder Fund
S&P 500 Index Fund
S&P 500 Select Fund
Strategist Fund
Total Market Index Fund
Total Return Trust
Value Fund
Value-Added Market Series/Equity Portfolio
THEME FUNDS
Real Estate Fund
Utilities Fund
GLOBAL FUNDS
Global Dividend Growth Securities
Global Utilities Fund
--------------------------------------------------------------------------------
INCOME FUNDS
--------------------------------
GOVERNMENT INCOME FUNDS
Federal Securities Trust
Short-Term U.S. Treasury Trust
U.S. Government Securities Trust
DIVERSIFIED INCOME FUNDS
Diversified Income Trust
CORPORATE INCOME FUNDS
High Yield Securities
Intermediate Income Securities
Short-Term Bond Fund (NL)
GLOBAL INCOME FUNDS
North American Government Income Trust
World Wide Income Trust
TAX-FREE INCOME FUNDS
California Tax-Free Income Fund
Hawaii Municipal Trust (FSC)
Limited Term Municipal Trust (NL)
Multi-State Municipal Series Trust (FSC)
New York Tax-Free Income Fund
Tax-Exempt Securities Trust
--------------------------------------------------------------------------------
MONEY MARKET FUNDS
--------------------------------
TAXABLE MONEY MARKET FUNDS
Liquid Asset Fund (MM)
U.S. Government Money Market Trust (MM)
TAX-FREE MONEY MARKET FUNDS
California Tax-Free Daily Income Trust (MM)
New York Municipal Money Market Trust (MM)
Tax-Free Daily Income Trust (MM)
There may be funds created after this PROSPECTUS was published. Please consult
the inside back cover of a new fund's prospectus for its designation, e.g.,
Multi-Class Fund or Money Market Fund.
Unless otherwise noted, each listed Morgan Stanley Dean Witter Fund, except for
North American Government Income Trust and Short-Term U.S. Treasury Trust, is a
Multi-Class Fund. A Multi-Class Fund is a mutual fund offering multiple Classes
of shares. The other types of funds are: NL - No-Load (Mutual) Fund; MM - Money
Market Fund; FSC - A mutual fund sold with a front-end sales charge and a
distribution (12b-1) fee.
<PAGE>
MORGAN STANLEY DEAN WITTER
JAPAN FUND
[Sidebar]
TICKER SYMBOLS:
Class A: JPNAX
-------------------
Class B: JPNBX
-------------------
Class C: JPNCX
-------------------
Class D: JPNDX
-------------------
[End Sidebar]
Additional information about the Fund's investments is
available in the Fund's ANNUAL AND SEMI-ANNUAL REPORTS TO
SHAREHOLDERS. In the Fund's ANNUAL REPORT, you will find a
discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during its
last fiscal year. The Fund's STATEMENT OF ADDITIONAL
INFORMATION also provides additional information about the
Fund. The STATEMENT OF ADDITIONAL INFORMATION is incorporated
herein by reference (legally is part of this PROSPECTUS). For
a free copy of any of these documents, to request other
information about the Fund, or to make shareholder inquiries,
please call:
(800) 869-NEWS
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.msdw.com/individual/funds
Information about the Fund (including the STATEMENT OF
ADDITIONAL INFORMATION) can be viewed and copied at the
Securities and Exchange Commission's Public Reference Room in
Washington, DC. Information about the Reference Room's
operations may be obtained by calling the SEC at
(202) 942-8090. Reports and other information about the Fund
are available on the EDGAR Database on the SEC's Internet
site (www.sec.gov), and copies of this information may be
obtained, after paying a duplicating fee, by electronic
request at the following E-mail address: [email protected],
or by writing the Public Reference Section of the SEC,
Washington, DC 20549-0102.
(THE FUND'S INVESTMENT COMPANY ACT FILE NO. IS 811-7503)
