<PAGE>
Filed Pursuant to Rule 497(c)
Registration File No.: 333-29721
PROSPECTUS - OCTOBER 31, 2000
Morgan Stanley Dean Witter
-------------------------------------------------------
S&P 500 INDEX FUND
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A MUTUAL FUND THAT SEEKS TO PROVIDE INVESTMENT RESULTS THAT,
BEFORE EXPENSES, CORRESPOND TO THE TOTAL RETURN (I.E., THE
COMBINATION OF CAPITAL CHANGES AND INCOME) OF THE STANDARD &
POOR'S (REGISTERED TRADEMARK) 500 COMPOSITE STOCK PRICE
INDEX
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this Prospectus. Any representation to
the contrary is a criminal offense.
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
<S> <C>
The Fund Investment Objective............................1
Principal Investment Strategies.................1
Principal Risks.................................2
Past Performance................................3
Fees and Expenses...............................4
Additional Investment Strategy Information......5
Additional Risk Information.....................6
Fund Management.................................7
Shareholder Information Pricing Fund Shares.............................8
How to Buy Shares...............................8
How to Exchange Shares.........................10
How to Sell Shares.............................12
Distributions..................................14
Tax Consequences...............................14
Share Class Arrangements.......................15
Financial Highlights ..............................................24
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>
THE FUND
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INVESTMENT OBJECTIVE
------------------------------
Morgan Stanley Dean Witter S&P 500 Index Fund seeks to provide
investment results that, before expenses, correspond to the total
return (i.e., the combination of capital changes and income) of the
Standard & Poor's (Registered Trademark) 500 Composite Stock Price
Index ("S&P 500 Index").
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PRINCIPAL INVESTMENT STRATEGIES
-----------------------------------------
[sidebar]
TOTAL RETURN
An investment objective having
the goal of selecting securities
with the potential to rise in
price and pay out income.
---------------------------------
[/sidebar]
The Fund will normally invest at least 80% of its assets in common
stocks of companies included in the S&P 500 Index. The "Investment
Manager," Morgan Stanley Dean Witter Advisors Inc., "passively"
manages the Fund's assets by investing in stocks in approximately the
same proportion as they are represented in the Index. For example, if
the common stock of a specific company represents five percent of the
Index, the Investment Manager typically will invest the same
percentage of the Fund's assets in that stock. The S&P 500 Index is a
well-known stock market index that includes common stocks of 500
companies representing a significant portion of the market value of
all common stocks publicly traded in the United States. The Fund may
invest in foreign companies that are included in the S&P 500 Index.
The Investment Manager seeks a correlation between the performance of
the Fund, before expenses, and that of the S&P 500 Index of 95% or
better. A figure of 100% would indicate perfect correlation.
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 addition, the Fund may invest in stock index futures on the S&P
500 Index, and Standard & Poor's Depository Receipts ("SPDRs").
----------------
"Standard & Poor's (Registered Trademark)," "S&P (Registered
Trademark)," "S&P 500 (Registered Trademark)," "Standard & Poor's
500," and "500" are trademarks of The McGraw-Hill Companies, Inc. and
have been licensed for use by the Fund. The Fund is not sponsored,
endorsed, sold or promoted by S&P, and S&P makes no representation
regarding the advisability of investing in the Fund.
1
<PAGE>
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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.
Another risk of investing in the Fund arises from its operation as a
"passively" managed index fund. As such, the adverse performance of a
particular stock ordinarily will not result in the elimination of the
stock from the Fund's portfolio. The Fund will remain invested in
common stocks even when stock prices are generally falling.
Ordinarily, the Investment Manager will not sell the Fund's portfolio
securities except to reflect additions or deletions of the stocks
that comprise the S&P 500 Index, or as may be necessary to raise cash
to pay Fund shareholders who sell Fund shares.
The performance of the S&P 500 Index is a hypothetical number which
does not take into account brokerage commissions and other
transaction costs, custody and other costs which will be borne by the
Fund (e.g., management fee, transfer agency and accounting costs).
The Fund's ability to correlate its performance, before expenses,
with the S&P 500 Index may be affected by, among other things,
changes in securities markets, the manner in which the S&P 500 Index
is calculated and the timing of purchases and sales. The Fund's
ability to correlate its performance to the Index also depends to
some extent on the size of the Fund's portfolio, the size of cash
flows into and out of the Fund and differences between how and when
the Fund and the Index are valued. The Investment Manager regularly
monitors the correlation and, in the event the desired correlation is
not achieved, the Investment Manager will determine what additional
investment changes may need to be made.
The performance of the Fund also will depend on whether the
Investment Manager is successful in pursuing the Fund's investment
strategy, including the Investment Manager's ability to manage cash
flows (primarily from purchases and sales, and distributions from the
Fund's investments). The Fund is also subject to other risks from its
other permissible investments including risks associated with stock
index futures, SPDRs and foreign securities. 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.
2
<PAGE>
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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.
[sidebar]
ANNUAL TOTAL RETURNS
This chart shows the
performance of the Fund's
Class B shares over the past
2 calendar years.
-----------------------------
[/sidebar]
ANNUAL TOTAL RETURNS -- CALENDAR YEARS
[GRAPHIC OMITTED]
26.84% 19.03% The bar chart reflects the performance of the
------------------ Class B shares; performance of the
1998 '99 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
September 30, 2000 was -2.39%.
During the periods shown in the bar chart, the highest return for a
calendar quarter was 21.06% (quarter ended December 31, 1998), and
the lowest return for a calendar quarter was -10.26% (quarter ended
September 30, 1998).
[sidebar]
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.
----------------------------------
[/sidebar]
AVERAGE ANNUAL TOTAL RETURNS (AS OF DECEMBER 31, 1999)
<TABLE>
<CAPTION>
LIFE OF FUND
PAST 1 YEAR (SINCE 9/26/97)
----------------------------------------------------
<S> <C> <C>
Class A 13.65% 19.52%
----------------------------------------------------
Class B 14.03% 20.40%
----------------------------------------------------
Class C 18.03% 21.45%
----------------------------------------------------
Class D 20.24% 22.68%
----------------------------------------------------
S&P 500 Index1 21.04% 23.26%
----------------------------------------------------
</TABLE>
1 The Standard and Poor's 500 Index (S&P 500 (Registered Trademark)) is a
broad-based index, the performance of which is based on the performance of
500 widely-held common stocks chosen for market size, liquidity and
industry group representation. The Index does not include any expenses,
fees or charges. The Index is unmanaged and should not be considered an
investment.
3
<PAGE>
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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.
[sidebar]
SHAREHOLDER FEES
These fees are paid directly from
your investment.
----------------------
[/sidebar]
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS D
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<S> <C> <C> <C> <C>
SHAREHOLDER FEES
--------------------------------------------------------------------------------------------------------
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 0.38% 0.38% 0.38% 0.38%
--------------------------------------------------------------------------------------------------------
Distribution and service (12b-1) fees 0.25% 1.00% 1.00% None
--------------------------------------------------------------------------------------------------------
Other expenses 0.12% 0.12% 0.12% 0.12%
--------------------------------------------------------------------------------------------------------
Total annual Fund operating expenses5 0.75% 1.50% 1.50% 0.50%
--------------------------------------------------------------------------------------------------------
</TABLE>
[sidebar]
ANNUAL FUND
OPERATING EXPENSES
These expenses are deducted
from the Fund's assets and
are based on expenses paid
for the fiscal year ended
August 31, 2000.
----------------------
[/sidebar]
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.
5 The Investment Manager has agreed to assume all expenses (except for
brokerage and 12b-1 fees) and to waive the compensation provided for in its
Investment Management Agreement to the extent that such expenses and
compensation on an annualized basis exceed 0.50% of the daily net assets of
the Fund and will continue to do so on a permanent basis. The fees and
expenses disclosed above reflect the assumption of such expenses and waiver
of compensation by the Investment Manager to the extent that such expenses
and compensation on an annualized basis exceed 0.50% of the daily net
assets of the Fund.
4
<PAGE>
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:
----------------------------------------------------------- --------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------------------------- --------------------------------------------
CLASS A $ 598 $ 752 $ 920 $ 1,406 $ 598 $ 752 $ 920 $ 1,406
----------------------------------------------------------- --------------------------------------------
CLASS B $ 653 $ 774 $1,018 $ 1,791 $ 153 $ 474 $ 818 $ 1,791
----------------------------------------------------------- --------------------------------------------
CLASS C $ 253 $ 474 $ 818 $ 1,791 $ 153 $ 474 $ 818 $ 1,791
----------------------------------------------------------- --------------------------------------------
CLASS D $ 51 $ 160 $ 280 $ 628 $ 51 $ 160 $ 280 $ 628
----------------------------------------------------------- --------------------------------------------
</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.
[GRAPHIC OMITTED]
ADDITIONAL INVESTMENT STRATEGY INFORMATION
----------------------------------------------------
This section provides additional information relating to the Fund's
principal investment strategies.
Stock Index Futures. The Fund may invest in stock index futures with
respect to the S&P 500 Index. Stock index futures may be used to
simulate investment in the S&P 500 Index while retaining a cash
balance for fund management purposes, to facilitate trading, to
reduce transaction costs or to seek higher investment returns.
SPDRs. The Fund may invest in securities referred to as SPDRs (known
as "spiders") that are designed to track the S&P 500 Index. SPDRs
represent an ownership interest in the SPDR Trust, which holds a
portfolio of common stocks that closely tracks the price performance
and dividend yield of the S&P 500 Index. SPDRs trade on the American
Stock Exchange like shares of common stock.
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.
5
<PAGE>
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ADDITIONAL RISK INFORMATION
-------------------------------------
This section provides additional information relating to the
principal risks of investing in the Fund.
Foreign Securities. The Fund's investments in the common stocks of
foreign corporations (including American Depository Receipts) may
involve risks in addition to the risks associated with domestic
securities. Foreign securities are affected by changes in currency
rates. Foreign securities also have risks related to political and
economic developments abroad. 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.
Futures. If the Fund invests in futures, its participation in these
markets would subject the Fund's portfolio to certain risks. The
Investment Manager's predictions of movements in the direction of the
stock market 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.
Other risks inherent in the use of futures include, for example, the
possible imperfect correlation between the price of futures contracts
and movements in the prices of the securities.
SPDRs. SPDRs, which the Fund may hold, have many of the same risks as
direct investments in common stocks. The market value of SPDRs is
expected to rise and fall as the S&P 500 Index rises and falls. If
the Fund invests in SPDRs, it would, in addition to its own expenses,
indirectly bear its ratable share of the SPDR's expenses.
6
<PAGE>
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FUND MANAGEMENT
-------------------------
The Fund has retained the Investment Manager -- Morgan
Stanley Dean Witter Advisors Inc. -- to provide
administrative services, manage its business affairs
and invest its assets, including the placing of orders
for the purchase and sale of portfolio securities. 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.
[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 $155 billion
in assets under management as
of September 30, 2000.
-----------------------------------------
[/sidebar]
The Fund's portfolio is managed within the Investment
Manager's Growth and Income Group. Guy G. Rutherfurd,
Jr., Senior Vice President of the Investment Manager,
has been the primary portfolio manager of the Fund
since October 1999. Co-management has been
provided by Kevin Jung, a Vice President of the Investment Manager,
since October 2000. Mr. Rutherfurd has been a portfolio manager with
the Investment Manager since February 1997. Prior to joining the
Investment Manager, Mr. Rutherfurd was Executive Vice President and
Chief Investment Officer of Nomura Asset Management (U.S.A.). Prior
to joining the Investment Manager, Mr. Jung was a portfolio manager
with UBS Asset Management Inc.
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 calculated
daily by applying the annual rate of 0.40% to the Fund's average
daily net assets. The fee is based on the Fund's average daily net
assets. The Investment Manager has agreed, on a permanent basis, to
assume the Fund's operating expenses (except for brokerage and 12b-1
fees) to the extent such operating expenses exceed on an annualized
basis 0.50% of the average daily net assets of the Fund, which may
reduce the investment management fee below 0.40% of the Fund's
average daily net assets. For example, if "other expenses" are 0.40%
of the Fund's average daily net assets, then the investment
management fee rate paid by the Fund would equal 0.10% of the Fund's
average daily net assets. Alternatively, if "other expenses" were to
decline to 0.30% of the Fund's average daily net assets, the
investment management fee paid by the Fund would equal 0.20% of the
Fund's average daily net assets. For the fiscal year ended August 31,
2000, the Fund accrued total compensation to the Investment Manager
amounting to 0.38% of the Fund's average daily net assets.
7
<PAGE>
SHAREHOLDER INFORMATION
[GRAPHIC OMITTED]
PRICING FUND SHARES
-----------------------------
The price of Fund shares (excluding sales charges), called "net asset
value," is based on the value of the Fund's portfolio securities.
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 determines that a security's market price is not accurate, a
portfolio security is valued at its fair value, as determined under
procedures established by the Fund's Board of Trustees. In these
cases, the Fund's net asset value will reflect certain portfolio
securities' fair value rather than their market price.
An exception to the Fund's general policy of using market prices
concerns its short-term debt portfolio securities. Debt securities
with remaining maturities of sixty days or less at the time of
purchase are valued at amortized cost. However, if the cost does not
reflect the securities' market value, these securities will be valued
at their fair value.
[GRAPHIC OMITTED]
HOW TO BUY SHARES
---------------------------
You may open a new account to buy Fund shares or buy
additional Fund shares for an existing account by
contacting your Morgan Stanley Dean Witter Financial
Advisor or other authorized financial representative.
Your Financial Advisor will assist you, step-by-step,
with the procedures to invest in the Fund. You may also
purchase shares directly by calling the Fund's
transfer agent and requesting an application.
[sidebar]
CONTACTING A
FINANCIAL ADVISOR
If you are new to the Morgan
Stanley Dean Witter Family of
Funds and would like to contact
a Financial Advisor, call
(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.msdwadvice.com/funds
-----------------------------------
[/sidebar]
Because every investor has different immediate
financial needs and long-term investment goals, the
Fund offers investors four Classes of shares: Classes
A, B, C and D. Class D shares are only offered to a
limited group of investors. Each Class of shares
offers a distinct structure of sales charges,
distribution and service fees, and other features that
are designed to address a variety of needs. Your
Financial Advisor or other authorized financial
representative can help you decide which Class may be
most appropriate for you. When purchasing Fund shares,
you must specify which Class of shares you wish to
purchase.
8
<PAGE>
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.
[sidebar]
EASYINVEST(SM)
A purchase plan that allows
you to transfer money automatically
from your checking or savings
account or from a Money Market
Fund on a semi-monthly,
monthly or quarterly basis.
Contact your Morgan Stanley
Dean Witter Financial Advisor for
further information about this
service.
--------------------------------------
[/sidebar]
<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*
---------------------------------------------------------------------------------------
* Provided your schedule of investments totals $1,000 in twelve months.
</TABLE>
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, (3) the following programs approved by the Fund's
distributor: (i) qualified state tuition plans described in Section
529 of the Internal Revenue Code and (ii) certain other investment
programs that do not charge an asset-based fee, or (4)
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:
o Write a "letter of instruction" to the Fund specifying the
name(s) on the account, the account number, the social security
or tax identification number, the Class of shares you wish to
purchase and the investment amount (which would include any
applicable front-end sales charge). The letter must be signed by
the account owner(s).
o Make out a check for the total amount payable to: Morgan Stanley
Dean Witter S&P 500 Index Fund.
o Mail the letter and check to Morgan Stanley Dean Witter Trust FSB
at P.O. Box 1040, Jersey City, NJ 07303.
9
<PAGE>
[GRAPHIC OMITTED]
HOW TO EXCHANGE SHARES
--------------------------------
Permissible Fund Exchanges. You may exchange shares of any Class of
the Fund for the same Class of any other continuously offered
Multi-Class Fund, or for shares of a No-Load Fund, 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.
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 minimum, 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
10
<PAGE>
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 the Fund's 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.
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.
11
<PAGE>
[GRAPHIC OMITTED]
HOW TO SELL SHARES
----------------------------
You can sell some or all of your Fund shares at any time. If you sell
Class A, Class B or Class C shares, your net sale proceeds are
reduced by the amount of any applicable CDSC. Your shares will be
sold at the next price calculated after we receive your order to sell
as described below.
<TABLE>
<CAPTION>
OPTIONS PROCEDURES
-----------------------------------------------------------------------------------------------------------------
<S> <C>
Contact Your To sell your shares, simply call your Morgan Stanley Dean Witter Financial Advisor or
Financial Advisor other authorized financial representative.
-------------------------------------------------------------------------------------------
Payment will be sent to the address to which the account is registered or deposited in
[GRAPHIC OMITTED] your brokerage account.
-----------------------------------------------------------------------------------------------------------------
By Letter You can also sell your shares by writing a "letter of instruction" that includes:
o your account number;
[GRAPHIC OMITTED] o the dollar amount or the number of shares you wish to sell;
o the Class of shares you wish to sell; and
o the signature of each owner as it appears on the account.
-------------------------------------------------------------------------------------------
If you are requesting payment to anyone other than the registered owner(s) or that
payment be sent to any address other than the address of the registered owner(s) or
pre-designated bank account, you will need a signature guarantee. You can obtain a
signature guarantee from an eligible guarantor acceptable to Morgan Stanley Dean
Witter Trust FSB. (You should contact Morgan Stanley Dean Witter Trust FSB at (800)
869-NEWS for a determination as to whether a particular institution is an eligible
guarantor.) A notary public cannot provide a signature guarantee. Additional
documentation may be required for shares held by a corporation, partnership, trustee
or executor.
-------------------------------------------------------------------------------------------
Mail the letter to Morgan Stanley Dean Witter Trust FSB at P.O. Box 983, Jersey City,
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.
-----------------------------------------------------------------------------------------------------------------
Systematic If your investment in all of the Morgan Stanley Dean Witter Family of Funds has a total
Withdrawal Plan market 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
[GRAPHIC OMITTED] 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>
12
<PAGE>
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 EasyInvestSM, if after 12 months the
shareholder has invested less than $1,000 in the account.
However, before the Fund sells your shares in this manner, we will
notify you and allow you sixty days to make an additional investment
in an amount that will increase the value of your account to at least
the required amount before the sale is processed. No CDSC will be
imposed on any involuntary sale.
Margin Accounts. 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.
13
<PAGE>
[GRAPHIC OMITTED]
DISTRIBUTIONS
-----------------------
The Fund passes substantially all of its earnings from income and
capital gains along to its investors as "distributions." The Fund
earns income from stocks and interest from fixed-income investments.
These amounts are passed along to Fund shareholders as "income
dividend distributions." The Fund realizes capital gains whenever it
sells securities for a higher price than it paid for them. These
amounts 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, 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.
[sidebar]
TARGETED DIVIDENDS(SM)
You may select to have your
Fund distributions automatically
invested in other Classes of Fund
shares or Classes of another
Morgan Stanley Dean Witter
Fund that you own. Contact your
Morgan Stanley Dean Witter
Financial Advisor for further
information about this service.
--------------------------------
[/sidebar]
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 through a Financial Advisor within three
business days prior to the record date for the
distribution, 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.
[GRAPHIC OMITTED]
TAX CONSEQUENCES
--------------------------
As with any investment, you should consider how your Fund investment
will be taxed. The tax information in this Prospectus is provided as
general information. You should consult your own tax professional
about the tax consequences of an investment in the Fund.
Unless your investment in the Fund is through a tax-deferred
retirement account, such as a 401(k) plan or IRA, you need to be
aware of the possible tax consequences when:
o The Fund makes distributions; and
o You sell Fund shares, including an exchange to another Morgan
Stanley Dean Witter Fund.
14
<PAGE>
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 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.
[GRAPHIC OMITTED]
SHARE CLASS ARRANGEMENTS
----------------------------------
The Fund offers several Classes of shares having different
distribution arrangements designed to provide you with different
purchase options according to your investment needs. Your Morgan
Stanley Dean Witter Financial Advisor or other authorized financial
representative can help you decide which Class may be appropriate for
you.
The general public is offered three Classes: Class A shares, Class B
shares and Class C shares, which differ principally in terms of sales
charges and ongoing expenses. A fourth Class, Class D shares, is
offered only to a limited category of investors. Shares that you
acquire through reinvested distributions will not be subject to any
front-end sales charge or CDSC -- contingent deferred sales charge.
Sales personnel may receive different compensation for selling each
Class of shares. The sales charges applicable to each Class provide
for the distribution financing of shares of that Class.
15
<PAGE>
The chart below compares the sales charge and the annual 12b-1 fees
applicable to each Class:
<TABLE>
<CAPTION>
MAXIMUM
CLASS SALES CHARGE ANNUAL 12b-1 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 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 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:
[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.
-----------------------------------
[/sidebar]
<TABLE>
<CAPTION>
FRONT-END SALES CHARGE
------------------------------------------------
PERCENTAGE OF APPROXIMATE PERCENTAGE
AMOUNT OF SINGLE TRANSACTION PUBLIC OFFERING PRICE OF 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 0
--------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
---- ----
The reduced sales charge schedule is applicable to purchases of Class
A shares in a single transaction by:
o A single account (including an individual, trust or fiduciary
account).
o Family member accounts (limited to husband, wife and children
under the age of 21).
o Pension, profit sharing or other employee benefit plans of
companies and their affiliates.
o Tax-exempt organizations.
o Groups organized for a purpose other than to buy mutual fund
shares.
Combined Purchase Privilege. You also will have the benefit of
reduced sales charges by combining purchases of Class A shares of the
Fund in a single transaction with purchases of Class A shares of
other Multi-Class Funds and shares of FSC Funds.
Right of Accumulation. You also may benefit from a reduction of sales
charges if the cumulative net asset value of Class A shares of the
Fund purchased in a single transaction, together with shares of other
funds you currently own which were previously purchased at a price
including a front-end sales charge (including shares acquired through
reinvestment of distributions), amounts to $25,000 or more. Also, if
you have a cumulative net asset value of all your Class A and Class D
shares equal to at least $5 million (or $25 million for certain
employee benefit plans), you are eligible to purchase Class D shares
of any fund subject to the Fund's minimum initial investment
requirement.
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 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
17
<PAGE>
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 a CDSC upon sale) if your account
qualifies under one of the following categories:
o A trust for which Morgan Stanley Dean Witter Trust FSB provides
discretionary trustee services.
o Persons participating in a fee-based investment program (subject
to all of its terms and conditions, including 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.
o Qualified state tuition plans described in Section 529 of the
Internal Revenue Code (subject to all applicable terms and
conditions) and certain other investment programs that do not
charge an asset-based fee and have been approved by the Fund's
distributor.
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 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.
o 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.
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
purchase, and (2) the sale proceeds were maintained in the
interim in cash or a money market fund.
o Current or retired Directors/Trustees of the Morgan Stanley Dean
Witter Funds, such persons' spouses and children under the age of
21, and trust accounts for which any of such persons is a
beneficiary.
18
<PAGE>
o Current or retired directors, officers and employees of Morgan
Stanley Dean Witter & Co. and any of its subsidiaries, such
persons' spouses and children under the age of 21, and trust
accounts for which any of such persons is a beneficiary.
CLASS B SHARES Class B shares are offered at net asset
value with no initial sales charge but are subject to a contingent
deferred sales charge, or CDSC, as set forth in the table below. For
the purpose of calculating the CDSC, shares are deemed to have been
purchased on the last day of the month during which they were
purchased.
[sidebar]
CONTINGENT DEFERRED
SALES CHARGE OR CDSC
A fee you pay when you sell
shares of certain Morgan Stanley
Dean Witter Funds purchased
without an initial sales charge.
This fee declines the longer you
hold your shares as set forth in
the table.
-------------------------------------
[/sidebar]
<TABLE>
<CAPTION>
CDSC AS A PERCENTAGE
YEAR SINCE PURCHASE PAYMENT MADE OF AMOUNT REDEEMED
------------------------------------------------------------
<S> <C>
First 5.0%
------------------------------------------------------------
Second 4.0%
------------------------------------------------------------
Third 3.0%
------------------------------------------------------------
Fourth 2.0%
------------------------------------------------------------
Fifth 2.0%
------------------------------------------------------------
Sixth 1.0%
------------------------------------------------------------
Seventh and thereafter None
------------------------------------------------------------
</TABLE>
Each time you place an order to sell or exchange shares, shares with
no CDSC will be sold or exchanged first, then shares with the lowest
CDSC will be sold or exchanged next. For any shares subject to a
CDSC, the CDSC will be assessed on an amount equal to the lesser of
the current market value or the cost of the shares being sold.
CDSC Waivers. A CDSC, if otherwise applicable, will be waived in the
case of:
o Sales of shares held at the time you die or become disabled
(within the definition in Section 72(m)(7) of the Internal
Revenue Code which relates to the ability to engage in gainful
employment), if the shares are: (i) registered either in your
name (not a trust) or in the names of you and your spouse as
joint tenants with right of survivorship; or (ii) held in a
qualified corporate or self-employed retirement plan, IRA or
403(b) Custodial Account, provided in either case that the sale
is requested within one year of your death or initial
determination of disability.
o Sales in connection with the following retirement plan
"distributions:" (i) lump-sum or other distributions from a
qualified corporate or self-employed retirement plan following
retirement (or, in the case of a "key employee" of a "top heavy"
plan, following attainment of age 591/2); (ii) distributions from
an IRA or 403(b) Custodial Account following attainment of age
591/2; or (iii) a tax-free return of an excess IRA contribution
(a "distribution" does not include a direct transfer of IRA,
403(b) Custodial Account or retirement plan assets to a successor
custodian or trustee).
o Sales of shares held for you as a participant in an MSDW Eligible
Plan.
19
<PAGE>
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.
o 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 also subject to an annual
distribution (12b-1) fee of 1.0% of the average daily net assets of
Class B shares.
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 acquired in exchange for shares of another
Morgan Stanley Dean Witter Fund originally purchased 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.
20
<PAGE>
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, 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 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.
21
<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 categories of investors:
o 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.
o 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.
o Certain investment programs that do not charge an asset-based fee
and have been approved by the Fund's distributor. However, Class
D shares are not offered for investments made through Section 529
plans (regardless of the size of the investment).
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.
o 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 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.
22
<PAGE>
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.
23
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
financial performance for the periods indicated. Certain information reflects
financial results for a single Fund share throughout each period. 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).
The information for the fiscal year ended August 31, 2000 has been audited by
Deloitte & Touche LLP, independent auditors, whose report, along with the
Fund's financial statements, is included in the annual report, which is
available upon request. The financial highlights for each of the periods ended
August 31, 1999 have been audited by other independent accountants.
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR ENDED AUGUST 31, SEPTEMBER 26, 1997*
--------------------------------- THROUGH
2000 1999 AUGUST 31, 1998
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CLASS A SHARES++
---------------------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA:
---------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 14.05 $ 10.18 $ 10.00
=========================================================================================================
Income from investment operations:
Net investment income 0.08 0.10 0.10
Net realized and unrealized gain 2.10 3.85 0.11
-------- -------- -------------
Total income from investment operations 2.18 3.95 0.21
=========================================================================================================
Less dividends and distributions from:
Net investment income -- (0.07) (0.03)
Net realized gain (0.03) (0.01) --
-------- -------- -------------
Total dividends and distributions (0.03) (0.08) (0.03)
=========================================================================================================
Net asset value, end of period $ 16.20 $ 14.05 $ 10.18
=========================================================================================================
TOTAL RETURN+ 15.49% 38.82% 2.05% (1)
=========================================================================================================
RATIOS TO AVERAGE NET ASSETS (3):
---------------------------------------------------------------------------------------------------------
Expenses 0.75%(4) 0.73%(4) 0.75%(2)
---------------------------------------------------------------------------------------------------------
Net investment income 0.49%(4) 0.72%(4) 0.91%(2)
=========================================================================================================
SUPPLEMENTAL DATA:
---------------------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $183,085 $99,140 $28,719
---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 5% 5% 1%
---------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations.
++ 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) If the Fund had borne all of its expenses that were reimbursed or waived
by the Investment Manager, the annualized expenses and net investment
income ratios would have been 0.76% and 0.48%, respectively, for the year
ended August 31, 2000, 0.81% and 0.64%, respectively, for the year ended
August 31, 1999 and 0.89% and 0.77%, respectively, for the period ended
August 31, 1998.
(4) Reflects overall Fund ratios for investment income and non-class specific
expenses.
24
<PAGE>
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR ENDED AUGUST 31, SEPTEMBER 26, 1997*
----------------------------------- THROUGH
2000 1999 AUGUST 31, 1998
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CLASS B SHARES++
----------------------------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA:
----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 13.93 $ 10.13 $ 10.00
================================================================================================================
Income (loss) from investment operations:
Net investment income (loss) (0.04) (0.01) 0.02
Net realized and unrealized gain 2.08 3.83 0.12
---------- ---------- --------
Total income from investment operations 2.04 3.82 0.14
================================================================================================================
Less dividends and distributions from:
Net investment income -- (0.01) (0.01)
Net realized gain (0.03) (0.01) --
---------- ---------- --------
Total dividends and distributions (0.03) (0.02) (0.01)
================================================================================================================
Net asset value, end of period $ 15.94 $ 13.93 $ 10.13
================================================================================================================
TOTAL RETURN+ 14.69% 37.68% 1.38%(1)
================================================================================================================
RATIOS TO AVERAGE NET ASSETS (3):
----------------------------------------------------------------------------------------------------------------
Expenses 1.50%(4) 1.50%(4) 1.50%(2)
----------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.26)%(4) (0.05)%(4) 0.16%(2)
================================================================================================================
SUPPLEMENTAL DATA:
----------------------------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $2,035,848 $1,587,661 $536,349
----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 5% 5% 1%
----------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations.
++ 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) If the Fund had borne all of its expenses that were reimbursed or waived
by the Investment Manager, the annualized expense and net investment
income ratios would have been 1.51% and (0.27)%, respectively, for the
year ended August 31, 2000, 1.58% and (0.13)%, respectively, for the year
ended August 31, 1999 and 1.64% and 0.02%, respectively, for the period
ended August 31, 1998.
(4) Reflects overall Fund ratios for investment income and non-class specific
expenses.
25
<PAGE>
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR ENDED AUGUST 31, SEPTEMBER 26, 1997*
-------------------------------------- THROUGH
2000 1999 AUGUST 31, 1998
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CLASS C SHARES++
---------------------------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA:
---------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 13.93 $ 10.13 $ 10.00
===============================================================================================================
Income (loss) from investment operations:
Net investment income (loss) ( 0.04) ( 0.01) 0.02
Net realized and unrealized gain 2.08 3.83 0.12
-------- -------- --------
Total income from investment operations 2.04 3.82 0.14
===============================================================================================================
Less dividends and distributions from:
Net investment income -- ( 0.01) ( 0.01)
Net realized gain ( 0.03) ( 0.01) --
-------- -------- --------
Total dividends and distributions ( 0.03) ( 0.02) ( 0.01)
===============================================================================================================
Net asset value, end of period $ 15.94 $ 13.93 $ 10.13
===============================================================================================================
TOTAL RETURN+ 14.69% 37.70% 1.37%(1)
===============================================================================================================
RATIOS TO AVERAGE NET ASSETS (3):
---------------------------------------------------------------------------------------------------------------
Expenses 1.50%(4) 1.50%(4) 1.50%(2)
---------------------------------------------------------------------------------------------------------------
Net investment income (loss) ( 0.26)%(4) ( 0.05)%(4) 0.16%(2)
===============================================================================================================
SUPPLEMENTAL DATA:
---------------------------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $211,446 $143,092 $40,730
---------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 5% 5% 1%
---------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations.
++ 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) If the Fund had borne all of its expenses that were reimbursed or waived
by the Investment Manager, the annualized expense and net investment
income ratios would have been 1.51% and (0.27)%, respectively, for the
year ended August 31, 2000, 1.58% and (0.13)%, respectively, for the year
ended August 31, 1999 and 1.64% and 0.02%, respectively, for the period
ended August 31, 1998.
(4) Reflects overall Fund ratios for investment income and non-class specific
expenses.
26
<PAGE>
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR ENDED AUGUST 31, SEPTEMBER 26, 1997*
------------------------------- THROUGH
2000 1999 AUGUST 31, 1998
<S> <C> <C> <C>
----------------------------------------------------------------------------------------------------------
CLASS D SHARES++
----------------------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA:
----------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 14.09 $ 10.20 $ 10.00
==========================================================================================================
Income from investment operations:
Net investment income 0.11 0.13 0.12
Net realized and unrealized gain 2.11 3.85 0.11
-------- -------- --------
Total income from investment operations 2.22 3.98 0.23
==========================================================================================================
Less dividends and distributions from:
Net investment income -- ( 0.08) ( 0.03)
Net realized gain ( 0.03) ( 0.01) --
-------- -------- --------
Total dividends and distributions ( 0.03) ( 0.09) ( 0.03)
==========================================================================================================
Net asset value, end of period $ 16.28 $ 14.09 $ 10.20
==========================================================================================================
TOTAL RETURN+ 15.81% 39.13% 2.30%(1)
==========================================================================================================
RATIOS TO AVERAGE NET ASSETS (3):
----------------------------------------------------------------------------------------------------------
Expenses 0.50%(4) 0.50%(4) 0.50%(2)
----------------------------------------------------------------------------------------------------------
Net investment income 0.74%(4) 0.95%(4) 1.16%(2)
==========================================================================================================
SUPPLEMENTAL DATA:
----------------------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $92,304 $16,538 $14,186
----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 5% 5% 1%
----------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations.
++ 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) If the Fund had borne all of its expenses that were reimbursed or waived
by the Investment Manager, the annualized expense and net investment
income ratios would have been 0.51% and 0.73%, respectively, for the year
ended August 31, 2000, 0.58% and 0.87%, respectively, for the year ended
August 31, 1999 and 0.64% and 1.02%, respectively, for the period ended
August 31, 1998.
(4) Reflects overall Fund ratios for investment income and non-class specific
expenses.
27
<PAGE>
NOTES
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28
<PAGE>
<TABLE>
<CAPTION>
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!
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
GROWTH FUNDS GROWTH FUNDS THEME FUNDS
Aggressive Equity Fund Financial Services Trust
American Opportunities Fund Health Sciences Trust
Capital Growth Securities Information Fund
Developing Growth Securities Natural Resource Development Securities
Growth Fund Technology Fund
Market Leader Trust
Mid-Cap Equity Trust GLOBAL/INTERNATIONAL FUNDS
New Discoveries Fund Competitive Edge Fund - "Best Ideas" Portfolio
Next Generation Trust European Growth Fund
Small Cap Growth Fund Fund of Funds - International Portfolio
Special Value Fund International Fund
Tax-Managed Growth Fund International SmallCap Fund
21st Century Trend Fund Japan Fund
Latin American Growth Fund
Pacific Growth Fund
-----------------------------------------------------------------------------------------------------------------
GROWTH & INCOME FUNDS Balanced Growth Fund Total Market Index Fund
Balanced Income Fund Total Return Trust
Convertible Securities Trust Value Fund
Dividend Growth Securities Value-Added Market Series/Equity Portfolio
Equity Fund
Fund of Funds - Domestic Portfolio THEME FUNDS
Income Builder Fund Real Estate Fund
S&P 500 Index Fund Utilities Fund
S&P 500 Select Fund
Strategist Fund GLOBAL FUNDS
Global Dividend Growth Securities
Global Utilities Fund
-----------------------------------------------------------------------------------------------------------------
INCOME FUNDS GOVERNMENT INCOME FUNDS GLOBAL INCOME FUNDS
Federal Securities Trust North American Government Income Trust
Short-Term U.S. Treasury Trust World Wide Income Trust
U.S. Government Securities Trust
TAX-FREE INCOME FUNDS
DIVERSIFIED INCOME FUNDS California Tax-Free Income Fund
Diversified Income Trust Hawaii Municipal Trust(FSC)
Limited Term Municipal Trust(NL)
CORPORATE INCOME FUNDS Multi-State Municipal Series Trust(FSC)
High Yield Securities New York Tax-Free Income Fund
Intermediate Income Securities Tax-Exempt Securities Trust
Short-Term Bond Fund(NL)
-----------------------------------------------------------------------------------------------------------------
MONEY MARKET FUNDS TAXABLE MONEY MARKET FUNDS TAX-FREE MONEY MARKET FUNDS
Liquid Asset Fund(MM) California Tax-Free Daily Income Trust(MM)
U.S. Government Money Market Trust(MM) New York Municipal Money Market Trust(MM)
Tax-Free Daily Income Trust(MM)
</TABLE>
There may be funds created after this Prospectus was published. Please consult
the inside back cover of a new fund's prospectus for its designations, e.g.,
Multi-Class Fund or Money Market Fund.
Unless otherwise noted, each listed Morgan Stanley Dean Witter Fund, except for
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>
PROSPECTUS - OCTOBER 31, 2000
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.MSDWADVICE.COM/FUNDS
Information about the Fund (including the Statement of Additional Information)
can be viewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, DC. Information about the Reference Room's
operations may be obtained by calling the SEC at (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.
TICKER SYMBOLS:
Class A: SPIAX
--------------------
Class B: SPIBX
--------------------
Class C: SPICX
--------------------
Class D: SPIDX
--------------------
(THE FUND'S INVESTMENT COMPANY ACT FILE NO. IS 811-8265)
Morgan Stanley Dean Witter
-------------------------------
S&P 500 INDEX FUND
[GRAPHIC OMITTED]
A MUTUAL FUND THAT SEEKS
TO PROVIDE INVESTMENT RESULTS THAT,
BEFORE EXPENSES, CORRESPOND TO THE
TOTAL RETURN (I.E., THE COMBINATION
OF CAPITAL CHANGES AND INCOME) OF
THE STANDARD & POOR'S
(REGISTERED TRADEMARK) 500
COMPOSITE STOCK PRICE INDEX
