MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND, 485BPOS, 2000-10-27

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND
485BPOS, 2000-10-27

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 27, 2000
REGISTRATION NO. 333-29721
811-8265
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

FORM N-1A
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. 7 [X]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 [X]
AMENDMENT NO. 8 [X]

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

MORGAN STANLEY DEAN WITTER
S&P 500 INDEX FUND
(A MASSACHUSETTS BUSINESS TRUST)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

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

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

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

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

COPY TO:

STUART M. STRAUSS, ESQ.
MAYER, BROWN & PLATT
1675 BROADWAY
NEW YORK, NEW YORK 10019

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

APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:

As soon as practicable after this Post-Effective Amendment becomes effective.

IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX)

immediately upon filing pursuant to paragraph (b)
----
X on October 31, 2000 pursuant to paragraph (b)
-----
60 days after filing pursuant to paragraph (a)
----
on (date) pursuant to paragraph (a) of rule 485.
----

AMENDING THE PROSPECTUS AND UPDATING FINANCIAL STATEMENTS
================================================================================

<PAGE>

PROSPECTUS - OCTOBER 31, 2000

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

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................................... 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

[GRAPHIC OMITTED]

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").

[GRAPHIC OMITTED]

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.
[end sidebar]

The Fund will normally invest at least 80% of its total 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.

<PAGE>

[GRAPHIC OMITTED]

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.

<PAGE>

[GRAPHIC OMITTED]

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.
[end sidebar]

[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.
[end sidebar]

ANNUAL TOTAL RETURNS -- CALENDAR YEARS

[GRAPHIC OMITTED]

26.84% 19.03%
1998 '99

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 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).

AVERAGE ANNUAL TOTAL RETURNS (AS OF DECEMBER 31, 1999)

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 Index(1) 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.

<PAGE>

[GRAPHIC OMITTED]

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.
[end sidebar]

[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.
[end sidebar]

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS D
------- ------- ------- -------
<S> <C> <C> <C> <C>
SHAREHOLDER FEES
Maximum sales charge (load) imposed on
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 expenses(5) 0.75% 1.50% 1.50% 0.50%
</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.

(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.

<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 and refer
to the Fund's net assets, unless otherwise noted. 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.

<PAGE>

[GRAPHIC OMITTED]

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.

<PAGE>

[GRAPHIC OMITTED]

FUND MANAGEMENT
----------------------------

[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.
[end sidebar]

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.

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.

<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
------------------------------
[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
[end sidebar]

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.

<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.
[end sidebar]

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, (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.

<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

<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.

<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.
-------------------------------------------------------------------------------------------
[GRAPHIC OMITTED] Payment will be sent to the address to which the account is registered or deposited in
your brokerage account.
--------------------- -------------------------------------------------------------------------------------------
By Letter You can also sell your shares by writing a "letter of instruction" that includes:
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>

<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 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.

<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."

[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]

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.

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.

<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.

<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>

[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
----------------------------------------------
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>

<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

<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.

<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.
[end sidebar]

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 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).

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

<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.

<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.

<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 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.

<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.

<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.

<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.

<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.

(4) Reflects overall Fund ratios for investment income and non-class specific
expenses.

<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.

<PAGE>

NOTES

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

<PAGE>

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

GROWTH FUNDS

GROWTH FUNDS
Aggressive Equity Fund
American Opportunities Fund
Capital Growth Securities
Developing Growth Securities
Growth Fund
Market Leader Trust
Mid-Cap Equity Trust

New Discoveries Fund

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

Technology Fund

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 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]

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION MORGAN STANLEY DEAN WITTER
S&P 500 INDEX FUND

OCTOBER 31, 2000

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

This Statement of Additional Information is not a Prospectus. The
Prospectus (dated October 31, 2000) for the Morgan Stanley Dean Witter S&P 500
Index Fund may be obtained without charge from the Fund at its address or
telephone number listed below or from Dean Witter Reynolds at any of its branch
offices.

Morgan Stanley Dean Witter
S&P 500 Index Fund
Two World Trade Center
New York, New York 10048
(800) 869-NEWS

<PAGE>

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

<TABLE>
<S> <C>
I. Fund History ...................................................... 4
II. Description of the Fund and Its Investments and Risks ............. 4
A. Classification .............................................. 4
B. Investment Strategies and Risks ............................. 4
C. Fund Policies/Investment Restrictions ....................... 7
III. Management of the Fund ............................................ 9
A. Board of Trustees ........................................... 9
B. Management Information ...................................... 9
C. Compensation ................................................ 14
IV. Control Persons and Principal Holders of Securities ............... 15
V. Investment Management and Other Services .......................... 16
A. Investment Manager .......................................... 16
B. Principal Underwriter ....................................... 16
C. Services Provided by the Investment Manager ................. 17
D. Dealer Reallowances ......................................... 18
E. Rule 12b-1 Plan ............................................. 18
F. Other Service Providers .................................... 22
G. Codes of Ethics ............................................ 22
VI. Brokerage Allocation and Other Practices .......................... 22
A. Brokerage Transactions ...................................... 22
B. Commissions ................................................. 23
C. Brokerage Selection ......................................... 23
D. Directed Brokerage .......................................... 24
E. Regular Broker-Dealers ...................................... 24
VII. Capital Stock and Other Securities ................................ 24
VIII. Purchase, Redemption and Pricing of Shares ........................ 25
A. Purchase/Redemption of Shares ............................... 25
B. Offering Price .............................................. 25
IX. Taxation of the Fund and Shareholders ............................. 26
X. Underwriters ...................................................... 28
XI. Calculation of Performance Data ................................... 28
XII. Financial Statements .............................................. 30
</TABLE>

<PAGE>

GLOSSARY OF SELECTED DEFINED TERMS

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

"Custodian" - The Bank of New York.

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

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

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

"Fund" - Morgan Stanley Dean Witter S&P 500 Index Fund, a registered
open-end investment company.

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

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

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

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

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

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

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

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

<PAGE>

I. FUND HISTORY
--------------------------------------------------------------------------------
The Fund was organized as a Massachusetts business trust, under a
Declaration of Trust, on June 18, 1997, under the name Dean Witter S&P 500
Index Fund. Effective June 22, 1998, the Fund's name was changed to Morgan
Stanley Dean Witter S&P 500 Index Fund.

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

A. CLASSIFICATION

The Fund is an open-end, diversified management investment company whose
investment objective is to seek 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(Reg. TM) 500 Composite Stock Price
Index ("S&P 500 Index").

B. INVESTMENT STRATEGIES AND RISKS

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

ADDITIONAL INFORMATION CONCERNING THE S&P 500 INDEX. The Fund is not
sponsored, endorsed, sold or promoted by Standard & Poor's, a division of The
McGraw-Hill Companies Inc. ("S&P"). S&P makes no representation or warranty,
express or implied, to the owners of shares of the Fund or any member of the
public regarding the advisability of investing in securities generally or in
the Fund particularly or the ability of the S&P 500 Index to track general
stock market performance. S&P's only relationship to the Fund is the licensing
of certain trademarks and trade names of S&P and of the S&P 500 Index which is
determined, composed and calculated by S&P without regard to the Fund. S&P has
no obligation to take the needs of the Fund or the owners of shares of the Fund
into consideration in determining, composing or calculating the S&P 500 Index.
S&P is not responsible for and has not participated in the determination of the
prices and amount of the Fund or the timing of the issuance of sale of shares
of the Fund. S&P has no obligation or liability in connection with the
administration, marketing or trading of the Fund.

S&P does not guarantee the accuracy and/or the completeness of the S&P 500
Index or any data included therein and S&P shall have no liability for any
errors, omissions, or interruptions therein. S&P makes no warranty, express or
implied, as to results to be obtained by the Fund, owners of shares of the
Fund, or any other person or entity from the use of the S&P 500 Index or any
data included therein. S&P makes no express or implied warranties, and
expressly disclaims all warranties of merchantability or fitness for a
particular purpose or use with respect to the S&P 500 Index or any data
included therein. Without limiting any of the foregoing, in no event shall S&P
have any liability for any special, punitive, indirect, or consequential
damages (including lost profits), even if notified of the possibility of such
damages.

STOCK INDEX FUTURES TRANSACTIONS. The Fund may invest in stock index
futures.

A futures contract purchaser incurs an obligation to take delivery of a
specified amount of the obligation underlying the contract at a specified time
in the future for a specified price. A seller of a futures contract incurs an
obligation to deliver the specified amount of the underlying obligation at a
specified time in return for an agreed upon price.

Index futures contracts provide for the delivery of an amount of cash
equal to a specified dollar amount times the difference between the index value
at the open or close of the last trading day of the contract and the futures
contract price. A futures contract sale is closed out by effecting a futures
contract purchase for the same aggregate amount of the specific type of
security and the same delivery date. If the sale price exceeds the offsetting
purchase price, the seller would be paid the difference and would realize a
gain. If the offsetting purchase price exceeds the sale price, the seller would
pay the difference

<PAGE>

and would realize a loss. Similarly, a futures contract purchase is closed out
by effecting a futures contract sale for the same aggregate amount of the
specific type of security and the same delivery date. If the offsetting sale
price exceeds the purchase price, the purchaser would realize a gain, whereas
if the purchase price exceeds the offsetting sale price, the purchaser would
realize a loss. There is no assurance that the Fund will be able to enter into
a closing transaction.

Margin. If the Fund enters into a futures contract, it is initially
required to deposit an "initial margin" of cash or U.S. Government securities
or other liquid portfolio securities ranging from approximately 2% to 5% of the
contract amount. Initial margin requirements are established by the exchanges
on which futures contracts trade and may, from time to time, change. In
addition, brokers may establish margin deposit requirements in excess of those
required by the exchanges.

Initial margin in futures transactions is different from margin in
securities transactions in that initial margin does not involve the borrowing
of funds by a broker's client but is, rather, a good faith deposit on the
futures contract which will be returned to the Fund upon the proper termination
of the futures contract. The margin deposits made are marked to market daily
and the Fund may be required to make subsequent deposits of cash or U.S.
Government securities, called "variation margin," which are reflective of price
fluctuations in the futures contract.

Limitations on Futures Contracts. The Fund may not enter into futures
contracts if, immediately thereafter, the amount committed to margin plus the
amount paid for premiums for unexpired options on futures contracts exceeds 5%
of the value of the Fund's total assets, after taking into account unrealized
gains and unrealized losses on such contracts it has entered into. However,
there is no overall limitation on the percentage of the Fund's net assets which
may be subject to a hedge position.

Risks of Transactions in Futures Contracts. The prices of indexes subject
to futures contracts (and thereby the futures contract prices) may correlate
imperfectly with the behavior of the cash prices of the Fund's portfolio
securities. A correlation may also be distorted (a) temporarily, by short-term
traders' seeking to profit from the difference between a contract or security
price objective and their cost of borrowed funds; (b) by investors in futures
contracts electing to close out their contracts through offsetting transactions
rather than meet margin deposit requirements; (c) by investors in futures
contracts opting to make or take delivery of underlying securities rather than
engage in closing transactions, thereby reducing liquidity of the futures
market; and (d) temporarily, by speculators who view the deposit requirements
in the futures markets as less onerous than margin requirements in the cash
market. Due to the possibility of price distortion in the futures market and
because of the possible imperfect correlation between movements in the prices
of securities and movements in the prices of futures contracts, a correct
forecast or market movement trends by the Investment Manager may still not
result in a successful hedging transaction.

There is no assurance that a liquid secondary market will exist for
futures contracts in which the Fund may invest. In the event a liquid market
does not exist, it may not be possible to close out a futures position and, in
the event of adverse price movements, the Fund would continue to be required to
make daily cash payments of variation margin. The absence of a liquid market in
futures conracts might cause the Fund to make or take delivery of the
underlying securities at a time when it may be disadvantageous to do so.

Exchanges also limit the amount by which the price of a futures contract
may move on any day. If the price moves equal the daily limit on successive
days, then it may prove impossible to liquidate a futures position until the
daily limit moves have ceased. In the event of adverse price movements, the
Fund would continue to be required to make daily cash payments of variation
margin on open futures positions. In these situations, if the Fund has
insufficient cash, it may have to sell portfolio securities to meet daily
variation margin requirements at a time when it may be disadvantageous to do
so. The inability to close out options and futures positions could also have an
adverse impact on the Fund's ability to effectively hedge its portfolio.

In the event of the bankruptcy of a broker through which the Fund engages
in transactions in futures the Fund could experience delays and/or losses in
liquidating open positions purchased or sold through the broker and/or incur a
loss of all or part of its margin deposits with the broker.

<PAGE>

If the Fund maintains a short position in a futures contract it will cover
this position by holding, in a segregated account maintained on the books of
the Fund, cash, U.S. government securities or other liquid portfolio securities
equal in value (when added to any initial or variation margin on deposit) to
the market value of the securities underlying the futures contract. Such a
position may also be covered by owning the securities underlying the futures
contract (in the case of a stock index futures contract a portfolio of
securities substantially replicating the relevant index).

In addition, if the Fund holds a long position in a futures contract it
will hold cash, U.S. government securities or other liquid portfolio securities
equal to the purchase price of the contract (less the amount of initial or
variation margin on deposit) in a segregated account maintained on the books of
the Fund.

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

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

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

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

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

Fully Insured Certificates of Deposit. Certificates of deposit of banks
and savings institutions, having total assets of less than $1 billion, if the
principal amount of the obligation is federally insured by the Bank Insurance
Fund or the Savings Association Insurance Fund (each of which is administered
by the FDIC), limited to $100,000 principal amount per certificate and to 15%
or less of the Fund's total assets in all such obligations and in all illiquid
assets, in the aggregate;

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

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

<PAGE>

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

LENDING PORTFOLIO SECURITIES. The Fund may lend its portfolio securities
to brokers, dealers and other financial institutions, provided that the loans
are callable at any time by the Fund, and are at all times secured by cash or
cash equivalents, which are maintained in a segregated account pursuant to
applicable regulations and that are equal to at least 100% of the market value,
determined daily, of the loaned securities. The advantage of these loans is
that the Fund continues to receive the income on the loaned securities while at
the same time earning interest on the cash amounts deposited as collateral,
which will be invested in short-term obligations. The Fund will not lend more
than 20% of the value of its total assets.

A loan may be terminated by the borrower on one business day's notice, or
by the Fund on four business days' notice. If the borrower fails to deliver the
loaned securities within four days after receipt of notice, the Fund could use
the collateral to replace the securities while holding the borrower liable for
any excess of replacement cost over collateral. As with any extensions of
credit, there are risks of delay in recovery and, in some cases, even loss of
rights in the collateral should the borrower of the securities fail
financially. However, these loans of portfolio securities will only be made to
firms deemed by the Fund's management to be creditworthy and when the income
which can be earned from such loans justifies the attendant risks. Upon
termination of the loan, the borrower is required to return the securities to
the Fund. Any gain or loss in the market price during the loan period would
inure to the Fund.

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

C. FUND POLICIES/INVESTMENT RESTRICTIONS

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

The Fund will:

1. Seek 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 500 Composite Stock Price Index.

<PAGE>

The Fund may not:

1. With respect to 75% of its total assets, invest more than 5% of the
value of its total assets in the securities of any one issuer (other
than obligations issued, or guaranteed by, the United States
Government, its agencies or instrumentalities), except that the Fund
may invest all or substantially all of its assets in another registered
investment company having the same investment objective and policies
and substantially the same investment restrictions as the Fund.

2. With respect to 75% of its total assets, purchase more than 10% of all
outstanding voting securities or any class of securities of any one
issuer, except that the Fund may invest all or substantially all of its
assets in another registered investment company having the same
investment objective and policies and substantially the same investment
restrictions as the Fund.

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

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

5. Purchase or sell commodities or commodities contracts except that the
Fund may purchase or sell index futures contracts.

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

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

8. Pledge its assets or assign or otherwise encumber them except to secure
permitted borrowings.

9. Issue senior securities as defined in the Act except insofar as the
Fund may be deemed to have issued a senior security by reason of: (a)
entering into any repurchase agreement; (b) purchasing or selling
futures contracts or options; (c) borrowing money in accordance with
restrictions described above; (d) purchasing any securities on a
when-issued or delayed delivery basis; or (e) lending portfolio
securities.

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

11. Make short sales of securities.

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

13. Invest more than 15% of its total assets in "illiquid securities"
(securities for which market quotations are not readily available),
restricted securities and repurchase agreements which have a maturity
of longer than seven days.

14. Engage in the underwriting of securities, except insofar as the Fund
may be deemed an underwriter under the Securities Act of 1933 in
disposing of a portfolio security.

<PAGE>

15. Invest for the purpose of exercising control or management of any
other issuer, except that the Fund may invest all or substantially all
of its assets in another registered investment company having the same
investment objective and policies and substantially the same investment
restrictions as the Fund.

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

A. BOARD OF TRUSTEES

The Board of Trustees of the Fund oversees the management of the Fund but
does not itself manage the Fund. The Trustees review various services provided
by or under the direction of the Investment Manager to ensure that the Fund's
general investment policies and programs are properly carried out. The Trustees
also conduct their review to ensure that administrative services are provided
to the Fund in a satisfactory manner.

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

B. MANAGEMENT INFORMATION

TRUSTEES AND OFFICERS. The Board of the Fund consists of nine (9)
Trustees. These same individuals also serve as directors or trustees for all of
the Morgan Stanley Dean Witter Funds. Six Trustees (67% of the total number)
have no affiliation or business connection with the Investment Manager or any
of its affiliated persons and do not own any stock or other securities issued
by the Investment Manager's parent company, MSDW. These are the
"non-interested" or "independent" Trustees. The other three Trustees (the
"management Trustees") are affiliated with the Investment Manager.

The Trustees and executive officers of the Fund, their principal business
occupations during the last five years and their affiliations, if any, with the
Investment Manager, and with the Morgan Stanley Dean Witter Funds (there were
93 such Funds as of the calendar year ended December 31, 1999), are shown
below.

<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
------------------------------------------- ---------------------------------------------------
<S> <C>
Michael Bozic (59) ........................ Retired; Director or Trustee of the Morgan Stanley
Trustee Dean Witter Funds; formerly Vice Chairman of
c/o Mayer, Brown & Platt Kmart Corporation (December 1998-October
Counsel to the Independent Trustees 2000); Chairman and Chief Executive Officer of
1675 Broadway Levitz Furniture Corporation (November 1995-
New York, New York November 1998) and President and Chief
Executive Officer of Hills Department Stores (May
1991-July 1995); formerly variously Chairman,
Chief Executive Officer, President and Chief
Operating Officer (1987-1991) of the Sears
Merchandise Group of Sears, Roebuck and Co.;
Director of Weirton Steel Corporation.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
------------------------------------------- ----------------------------------------------------
<S> <C>
Charles A. Fiumefreddo* (67) .............. Chairman, Director or Trustee and Chief Executive
Chairman of the Board, Chief Officer of the Morgan Stanley Dean Witter Funds;
Executive Officer and Trustee formerly Chairman, Chief Executive Officer and
Two World Trade Center Director of the Investment Manager, the Distributor
New York, New York and MSDW Services Company; Executive Vice
President and Director of Dean Witter Reynolds;
Chairman and Director of the Transfer Agent;
formerly Director and/or officer of various MSDW
subsidiaries (until June 1998).

Edwin J. Garn (68) ........................ Director or Trustee of the Morgan Stanley Dean
Trustee Witter Funds; formerly United States Senator (R-
c/o Summit Ventures LLC Utah) (1974-1992) and Chairman, Senate Banking
1 Utah Center Committee (1980-1986); formerly Mayor of Salt
201 S. Main Street Lake City, Utah (1971-1974); formerly Astronaut,
Salt Lake City, Utah Space Shuttle Discovery (April 12-19, 1985); Vice
Chairman, Huntsman Corporation (chemical
company); Director of Franklin Covey (time
management systems), BMW Bank of North
America, Inc. (industrial loan corporation), United
Space Alliance (joint venture between Lockheed
Martin and the Boeing Company) and Nuskin Asia
Pacific (multilevel marketing); member of the Utah
Regional Advisory Board of Pacific Corp.; member
of the board of various civic and charitable
organizations.

Wayne E. Hedien (66) ...................... Retired; Director or Trustee of the Morgan Stanley
Trustee Dean Witter Funds; Director of The PMI Group,
c/o Mayer, Brown & Platt Inc. (private mortgage insurance); Trustee and
Counsel to the Independent Trustees Vice Chairman of The Field Museum of Natural
1675 Broadway History; formerly associated with the Allstate
New York, New York Companies (1966-1994), most recently as
Chairman of The Allstate Corporation (March 1993-
December 1994) and Chairman and Chief
Executive Officer of its wholly-owned subsidiary,
Allstate Insurance Company (July 1989-December
1994); director of various other business and
charitable organizations.

James F. Higgins* (52) .................... Chairman of the Private Client Group of MSDW
Trustee (since August 2000); Director of the Transfer Agent
Two World Trade Center and Dean Witter Realty Inc.; Director or Trustee of
New York, New York the Morgan Stanley Dean Witter Funds (since
June 2000); previously President and Chief
Operating Officer of the Private Client Group of
MSDW (May 1999-August 2000), President and
Chief Operating Officer of Individual Securities of
MSDW (February 1997-May 1999), President and
Chief Operating Officer of Dean Witter Securities
of MSDW (1995-February 1997), and President
and Chief Operating Officer of Dean Witter
Financial (1989-1995) and Director (1985-1997) of
Dean Witter Reynolds.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
------------------------------------------- ----------------------------------------------------
<S> <C>
Dr. Manuel H. Johnson (51) ................ Senior Partner, Johnson Smick International, Inc.,
Trustee a consulting firm; Co-Chairman and a founder of
c/o Johnson Smick International, Inc. the Group of Seven Council (G7C), an international
1133 Connecticut Avenue, N.W. economic commission; Chairman of the Audit
Washington, D.C. Committee and Director or Trustee of the Morgan
Stanley Dean Witter Funds; Director of Greenwich
Capital Markets, Inc. (broker-dealer), Independence
Standards Board (private sector organization
governing independence of auditors) and NVR,
Inc. (home construction); Chairman and Trustee of
the Financial Accounting Foundation (oversight
organization of the Financial Accounting Standards
Board); formerly Vice Chairman of the Board of
Governors of the Federal Reserve System and
Assistant Secretary of the U.S. Treasury.

Michael E. Nugent (64) .................... General Partner, Triumph Capital, L.P., a private
Trustee investment partnership; Chairman of the Insurance
c/o Triumph Capital, L.P. Committee and Director or Trustee of the Morgan
237 Park Avenue Stanley Dean Witter Funds; formerly Vice
New York, New York President, Bankers Trust Company and BT Capital
Corporation; director of various business
organizations.

Philip J. Purcell* (57) ................... Chairman of the Board of Directors and Chief
Trustee Executive Officer of MSDW, Dean Witter Reynolds
1585 Broadway and Novus Credit Services Inc.; Director of the
New York, New York Distributor; Director or Trustee of the Morgan
Stanley Dean Witter Funds; Director of American
Airlines, Inc. and its parent company, AMR
Corporation; Director and/or officer of various
MSDW subsidiaries.

John L. Schroeder (70) .................... Retired; Chairman of the Derivatives Committee
Trustee and Director or Trustee of the Morgan Stanley
c/o Mayer, Brown & Platt Dean Witter Funds; Director of Citizens
Counsel to the Independent Trustees Communications Company (telecommunication
1675 Broadway company); formerly Executive Vice President and
New York, New York Chief Investment Officer of the Home Insurance
Company (August 1991-September 1995).

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
------------------------------------------- -----------------------------------------------------
<S> <C>
Mitchell M. Merin (47) .................... President and Chief Operating Officer of Asset
President Management of MSDW (since December 1998);
Two World Trade Center President and Director (since April 1997) and Chief
New York, New York Executive Officer (since June 1998) of the
Investment Manager and MSDW Services
Company; Chairman, Chief Executive Officer and
Director of the Distributor (since June 1998);
Chairman and Chief Executive Officer (since June
1998) and Director (since January 1998) of the
Transfer Agent; Director of various MSDW
subsidiaries; President of the Morgan Stanley Dean
Witter Funds (since May 1999); Trustee of various
Van Kampen investment companies (since
December 1999); previously Chief Strategic Officer
of the Investment Manager and MSDW Services
Company and Executive Vice President of the
Distributor (April 1997-June 1998), Vice President
of the Morgan Stanley Dean Witter Funds (May
1997-April 1999), and Executive Vice President of
Dean Witter, Discover & Co.

Barry Fink (45) ........................... General Counsel of Asset Management of MSDW
Vice President, (since May 2000); Executive Vice President (since
Secretary and General Counsel December 1999) and Secretary and General
Two World Trade Center Counsel (since February 1997) and Director (since
New York, New York July 1998) of the Investment Manager and MSDW
Services Company; Vice President, Secretary and
General Counsel of the Morgan Stanley Dean
Witter Funds (since February 1997); Vice President
and Secretary of the Distributor; previously, Senior
Vice President (March 1997-December 1999), First
VIce President, Assistant Secretary and Assistant
General Counsel of the Investment Manager and
MSDW Services Company.

Guy G. Rutherfurd, Jr. (60) ............... Senior Vice President and Director of the Growth
Vice President Group of the Investment Manager; Vice President
Two World Trade Center of various Morgan Stanley Dean Witter Funds
New York, New York (since February 1997). Formerly Executive Vice
President and Chief Investment Officer of Nomura
Asset Management (U.S.A.).

Kevin Jung (34) ........................... Vice President of the Investment Manager (since
Vice President September 1997) and Vice President of various
Two World Trade Center Morgan Stanley Dean Witter Funds. Formerly a
New York, New York portfolio manager with UBS Asset Management
Inc.

Thomas F. Caloia (54) ..................... First Vice President and Assistant Treasurer of the
Treasurer Investment Manager, the Distributor and MSDW
Two World Trade Center Services Company; Treasurer of the Morgan
New York, New York Stanley Dean Witter Funds.
</TABLE>

----------
* A Trustee who is an "interested person" of the Fund, as defined in the
Investment Company Act.

In addition, Ronald E. Robison, Executive Vice President, Chief
Administrative Officer and Director of the Investment Manager and MSDW Services
Company, Robert S. Giambrone, Senior Vice President

<PAGE>

of the Investment Manager, MSDW Services Company, the Distributor and the
Transfer Agent and Director of the Transfer Agent, Joseph J. McAlinden,
Executive Vice President and Chief Investment Officer of the Investment Manager
and Director of the Transfer Agent and Alice Weiss, Vice President of the
Investment Manager, are Vice Presidents of the Fund.

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

INDEPENDENT DIRECTORS/TRUSTEES AND THE COMMITTEES. Law and regulation
establish both general guidelines and specific duties for the independent
directors/trustees. The Morgan Stanley Dean Witter Funds seek as independent
directors/trustees individuals of distinction and experience in business and
finance, government service or academia; these are people whose advice and
counsel are in demand by others and for whom there is often competition. To
accept a position on the Funds' boards, such individuals may reject other
attractive assignments because the funds make substantial demands on their
time. All of the independent directors/trustees serve as members of the Audit
Committee. In addition, three of the directors/trustees, including two
independent directors/trustees, serve as members of the Derivatives Committee
and the Insurance Committee.

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

The Audit Committee is charged with recommending to the full board the
engagement or discharge of the Fund's independent auditors; directing
investigations into matters within the scope of the independent auditors'
duties, including the power to retain outside specialists; reviewing with the
independent auditors the audit plan and results of the auditing engagement;
approving professional services provided by the independent auditors and other
accounting firms prior to the performance of the services; reviewing the
independence of the independent auditors; considering the range of audit and
non-audit fees; reviewing the adequacy of the Fund's system of internal
controls; and preparing and submitting Committee meeting minutes to the full
board.

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

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

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

<PAGE>

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

C. COMPENSATION

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

The following table illustrates the compensation that the Fund paid to its
Independent Trustees for the fiscal year ended August 31, 2000.

FUND COMPENSATION

<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF INDEPENDENT TRUSTEE FROM THE FUND
--------------------------- -------------
<S> <C>
Michael Bozic ............................................. $1,550
Edwin J. Garn ............................................. 1,600
Wayne E. Hedien ........................................... 1,600
Dr. Manuel H. Johnson ..................................... 2,350
Michael E. Nugent ......................................... 2,100
John L. Schroeder ......................................... 2,050
</TABLE>

The following table illustrates the compensation paid to the Fund's
Independent Trustees for the calendar year ended December 31, 1999 for services
to the 93 Morgan Stanley Dean Witter Funds that were in operation at December
31, 1999.

CASH COMPENSATION FROM MORGAN STANLEY DEAN WITTER FUNDS

<TABLE>
<CAPTION>
TOTAL CASH
COMPENSATION
FOR SERVICES
TO 93
MORGAN STANLEY
DEAN WITTER
NAME OF INDEPENDENT TRUSTEE FUNDS
--------------------------- -----
<S> <C>
Michael Bozic ............................................ $134,600
Edwin J. Garn ............................................ 138,700
Wayne E. Hedien .......................................... 138,700
Dr. Manuel H. Johnson .................................... 208,638
Michael E. Nugent ........................................ 193,324
John L. Schroeder ........................................ 193,324
</TABLE>

<PAGE>

As of the date of this Statement of Additional Information, 55 of the
Morgan Stanley Dean Witter Funds, not including the Fund, have adopted a
retirement program under which an independent director/trustee who retires
after serving for at least five years (or such lesser period as may be
determined by the Board) as an independent director/trustee of any Morgan
Stanley Dean Witter Fund that has adopted the retirement program (each such
Fund referred to as an "Adopting Fund" and each such director/trustee referred
to as an "Eligible Trustee") is entitled to retirement payments upon reaching
the eligible retirement age (normally, after attaining age 72). Annual payments
are based upon length of service.

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

The following table illustrates the retirement benefits accrued to the
Fund's Independent Trustees by the 55 Morgan Stanley Dean Witter Funds (not
including the Fund) for the calendar year ended December 31, 1999, and the
estimated retirement benefits for the Independent Trustees, to commence upon
their retirement, from the 55 Morgan Stanley Dean Witter Funds as of the
calendar year ended December 31, 1999.

RETIREMENT BENEFITS FROM ALL MORGAN STANLEY DEAN WITTER FUNDS

<TABLE>
<CAPTION>
RETIREMENT ESTIMATED
BENEFITS ANNUAL
ESTIMATED ACCRUED AS BENEFITS UPON
CREDITED YEARS ESTIMATED EXPENSES RETIREMENT
OF SERVICE AT PERCENTAGE OF BY ALL FROM ALL
RETIREMENT ELIGIBLE ADOPTING ADOPTING
NAME OF INDEPENDENT TRUSTEE (MAXIMUM 10) COMPENSATION FUNDS FUNDS(2)
------------------------------- ---------------- --------------- ------------ --------------
<S> <C> <C> <C> <C>
Michael Bozic ................. 10 60.44% $20,933 $50,588
Edwin J. Garn ................. 10 60.44 31,737 50,675
Wayne E. Hedien ............... 9 51.37 39,566 43,000
Dr. Manuel H. Johnson ......... 10 60.44 13,129 75,520
Michael E. Nugent ............. 10 60.44 23,175 67,209
John L. Schroeder ............. 8 50.37 41,558 52,994
</TABLE>

----------

(1) An Eligible Trustee may elect alternative payments of his or her
retirement benefits based upon the combined life expectancy of the
Eligible Trustee and his or her spouse on the date of such Eligible
Trustee's retirement. In addition, the Eligible Trustee may elect that
the surviving spouse's periodic payment of benefits will be equal to a
lower percentage of the periodic amount when both spouses were alive. The
amount estimated to be payable under this method, through the remainder
of the later of the lives of the Eligible Trustee and spouse, will be the
actuarial equivalent of the Regular Benefit.

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

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

The following owned 5% or more of the outstanding Class D shares of the
Fund as of October 10, 2000: Morgan Stanley Dean Witter Trust FSB, Trustee,
Consolidated Graphics Inc. Employee 401(k) Savings Plan, P.O. Box 957, Jersey
City, NJ 07303-0957 - 6.501%; and Morgan Stanley Dean Witter Trust FSB Trustee,
Kulicke & Soffa IND INC Incentive Savings Plan, P.O. Box 957, Jersey City, NJ
07303-0957 - 5.569%.

<PAGE>

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

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

A. INVESTMENT MANAGER

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

Pursuant to an Investment Management Agreement (the "Management
Agreement") with the Investment Manager, the Fund has retained the Investment
Manager to provide administrative services and manage the investment of the
Fund's assets, including the placing of orders for the purchase and sale of
portfolio securities. The Fund pays the Investment Manager monthly compensation
calculated daily by applying the following annual rates to the net assets of
the Fund determined as of the close of each business day: 0.40% to the portion
of daily net assets not exceeding $1.5 billion; 0.375% to the portion of daily
net assets exceeding $1.5 billion but not exceeding $3 billion; and 0.350% to
the portion of such daily net assets exceeding $3 billion. The Investment
Manager has agreed, under its Management Agreement with the Fund, 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. The management fee is allocated among the Classes
pro rata based on the net assets of the Fund attributable to each Class. Taking
into account the Investment Manager's assumption of expenses, for the period
September 26, 1997 (commencement of operations) through August 31, 1998 and for
the fiscal years ended August 31, 1999 and August 31, 2000, the Investment
Manager paid compensation under the Management Agreement in the amounts of
$1,092,209, $4,271,384, and $8,311,986, respectively.

The Investment Manager has retained its wholly-owned subsidiary, MSDW
Services Company, to perform administrative services for the Fund.

B. PRINCIPAL UNDERWRITER

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

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

The Fund and the Distributor have agreed to indemnify each other against
certain liabilities, including liabilities under the Securities Act. Under the
Distribution Agreement, the Distributor uses its

<PAGE>

best efforts in rendering services to the Fund, but in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations, the Distributor is not liable to the Fund or any of its
shareholders for any error of judgment or mistake of law or for any act or
omission or for any losses sustained by the Fund or its shareholders.

C. SERVICES PROVIDED BY THE INVESTMENT MANAGER

The Investment Manager manages the investment of the Fund's assets,
including the placing of orders for the purchase and sale of portfolio
securities. The Investment Manager obtains and evaluates the information and
advice relating to the economy, securities markets, and specific securities as
it considers necessary or useful to continuously manage the assets of the Fund
in a manner consistent with its investment objective.

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

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

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

The Management Agreement will remain in effect from year to year, provided
continuance of the Management Agreement is approved at least annually by the
vote of the holders of a majority, as defined in the Investment Company Act, of
the outstanding shares of the Fund, or by the Trustees; provided that in either
event such continuance is approved annually by the vote of a majority of the
Trustees, including a majority of the Independent Trustees.

<PAGE>

D. DEALER REALLOWANCES

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

E. RULE 12b-1 PLAN

The Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 under
the Investment Company Act (the "Plan") pursuant to which each Class, other
than Class D, pays the Distributor compensation accrued daily and payable
monthly at the annual rate of 0.25% of the average daily net assets of Class A
and 1.0% of the average daily net assets of each of Class B and Class C.

The Distributor also receives the proceeds of front-end sales charges
("FSCs") and of contingent deferred sales charges ("CDSCs") imposed on certain
redemptions of shares, which are separate and apart from payments made pursuant
to the Plan. The Distributor has informed the Fund that it and/or Dean Witter
Reynolds received the proceeds of CDSCs and FSCs, for the period September 26,
1997 (commencement of operations) through August 31, 1998, and the fiscal years
ended August 31, 1999 and August 31, 2000, in approximate amounts as provided
in the table below (the Distributor did not retain any of these amounts).

<TABLE>
<CAPTION>
FOR THE PERIOD
SEPTEMBER 26, 1997
2000 1999 THROUGH AUGUST 31, 1998
---- ---- -----------------------
<S> <C> <C> <C> <C>
Class A ......... FSCs:(1) $ 368,755 $ 546,251 $297,370
CDSCs: $ 8,761 $ 11,704 $ 17,842
Class B ......... CDSCs: $4,206,084 $2,206,303 $689,099
Class C ......... CDSCs: $ 128,722 $ 78,362 $ 24,054
</TABLE>

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

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

Under the Plan and as required by Rule 12b-1, the Trustees receive and
review promptly after the end of each calendar quarter a written report
provided by the Distributor of the amounts expended under the Plan and the
purpose for which such expenditures were made. For the fiscal year ended August
31, 2000, Class A, Class B and Class C shares of the Fund accrued payments
under the Plan amounting to $337,108, $18,407,231 and $1,777,625, respectively,
which amounts are equal to 0.25%, 1.00% and 1.00% of the average daily net
assets of Class A, Class B and Class C, respectively, for the fiscal year.

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

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

<PAGE>

serves as Trustee or MSDW's Retirement Plan Services serves as recordkeeper
pursuant to a written Recordkeeping Services Agreement ("MSDW Eligible Plans"),
the Investment Manager compensates Financial Advisors by paying them, from its
own funds, a gross sales credit of 1.0% of the amount sold.

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

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

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

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

The Investment Manager pays a retention fee to Financial Advisors at an
annual rate of 0.05% of the value of shares of the Fund sold after January 1,
2000 and held for at least one year. Shares purchased through the reinvestment
of dividends will be eligible for a retention fee, provided that such dividends
were earned on shares otherwise eligible for a retention fee payment. Shares
owned in variable annuities, closed-end fund shares and shares held in 401(k)
plans where the Transfer Agent or MSDW's Retirement Plan Services is either
recordkeeper or trustee are not eligible for a retention fee.

For the first year only, the retention fee is paid on any shares of the
Fund sold after January 1, 2000 and held by shareholders on December 31, 2000.

The retention fees are paid by the Investment Manager from its own assets,
which may include profits from investment management fees payable under the
Management Agreement, as well as from borrowed funds.

The distribution fee that the Distributor receives from the Fund under the
Plan, in effect, offsets distribution expenses incurred under the Plan on
behalf of the Fund and, in the case of Class B shares, opportunity costs, such
as the gross sales credit and an assumed interest charge thereon ("carrying
charge"). These expenses may include the cost of Fund-related educational
and/or business related trips, or payment of Fund-related educational and/or
promotional expenses of Financial Advisors. In the Distributor's reporting of
the distribution expenses to the Fund, in the case of Class B shares, such
assumed interest (computed at the "broker's call rate") has been calculated on
the gross credit as it is reduced by amounts received by the Distributor under
the Plan and any contingent deferred sales

<PAGE>

charges received by the Distributor upon redemption of shares of the Fund. No
other interest charge is included as a distribution expense in the
Distributor's calculation of its distribution costs for this purpose. The
broker's call rate is the interest rate charged to securities brokers on loans
secured by exchange-listed securities.

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

Each Class paid 100% of the amounts accrued under the Plan with respect to
that Class for the fiscal year ended August 31, 2000 to the Distributor. The
Distributor and Dean Witter Reynolds estimate that they have spent, pursuant to
the Plan, $93,819,509 on behalf of Class B since the inception of the Plan. It
is estimated that this amount was spent in approximately the following ways:
(i) 4.26% ($3,997,893)-advertising and promotional expenses; (ii) 0.28%
($261,153)-printing of prospectuses for distribution to other than current
shareholders; and (iii) 95.46% ($89,560,463)-other expenses, including the
gross sales credit and the carrying charge, of which 5.62% ($5,029,268)
represents carrying charges, 39.08% ($34,995,915) represents commission credits
to Dean Witter Reynolds branch offices and other selected broker-dealers for
payments of commissions to Financial Advisors and other authorized financial
representatives, and 55.30% ($49,535,280) represents overhead and other branch
office distribution-related expenses. The amounts accrued by Class A and a
portion of the amounts accrued by Class C under the Plan during the fiscal year
ended August 31, 2000 were service fees. The remainder of the amounts accrued
by Class C were for expenses which relate to compensation of sales personnel
and associated overhead expenses.

In the case of Class B shares, at any given time, the expenses of
distributing shares of the Fund may be more or less than the total of (i) the
payments made by the Fund pursuant to the Plan; and (ii) the proceeds of CDSCs
paid by investors upon redemption of shares. For example, if $1 million in
expenses in distributing Class B shares of the Fund had been incurred and
$750,000 had been received as described in (i) and (ii) above, the excess
expense would amount to $250,000. The Distributor has advised the Fund that in
the case of Class B shares the excess distribution expenses, including the
carrying charge designed to approximate the opportunity costs incurred by Dean
Witter Reynolds which arise from it having advanced monies without having
received the amount of any sales charges imposed at the time of sale of the
Fund's Class B shares, totaled $53,054,813 as of August 31, 2000 (the end of
the Fund's fiscal year), which was equal to 2.61% of the net assets of Class B
on such date. Because there is no requirement under the Plan that the
Distributor be reimbursed for all distribution expenses with respect to Class B
shares or any requirement that the Plan be continued from year to year, this
excess amount does not constitute a liability of the Fund. Although there is no
legal obligation for the Fund to pay expenses incurred in excess of payments
made to the Distributor under the Plan and the

<PAGE>

proceeds of CDSCs paid by investors upon redemption of shares, if for any
reason the Plan is terminated, the Trustees will consider at that time the
manner in which to treat such expenses. Any cumulative expenses incurred, but
not yet recovered through distribution fees or CDSCs, may or may not be
recovered through future distribution fees or CDSCs.

In the case of Class A and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 1.0% of the average daily
net assets of Class A or Class C, respectively, will not be reimbursed by the
Fund through payments in any subsequent year, except that expenses representing
a gross sales commission credited to Morgan Stanley Dean Witter Financial
Advisors and other authorized financial representatives at the time of sale may
be reimbursed in the subsequent calendar year. The Distributor has advised the
Fund that unreimbursed expenses representing a gross sales commission credited
to Morgan Stanley Dean Witter Financial Advisors and other authorized financial
representatives at the time of sale totaled $112,517 in the case of Class C at
December 31, 1999 (end of the calendar year), which amount was equal to 0.06%
of the net assets of Class C on such date, and that there were no such expenses
that may be reimbursed in the subsequent year in the case of Class A on such
date. No interest or other financing charges will be incurred on any Class A or
Class C distribution expenses incurred by the Distributor under the Plan or on
any unreimbursed expenses due to the Distributor pursuant to the Plan.

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

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

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

<PAGE>

F. OTHER SERVICE PROVIDERS

(1) TRANSFER AGENT/DIVIDEND-PAYING AGENT

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

(2) CUSTODIAN AND INDEPENDENT AUDITORS

The Bank of New York, 100 Church Street, New York, NY 10007, is the
Custodian of the Fund's assets. Any of the Fund's cash balances with the
Custodian in excess of $100,000 are unprotected by federal deposit insurance.
These balances may, at times, be substantial.

Deloitte & Touche LLP, Two World Financial Center, New York, NY 10281,
serves as the independent auditors of the Fund. The independent auditors are
responsible for auditing the annual financial statements of the Fund.

(3) AFFILIATED PERSONS

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

G. CODES OF ETHICS

The Fund, the Investment Manager and the Distributor have each adopted a
Code of Ethics pursuant to Rule 17j-1 under the Investment Company Act. The
Codes of Ethics are designed to detect and prevent improper personal trading.
The Codes of Ethics permit personnel subject to the Codes to invest in
securities, including securities that may be purchased, sold or held by the
Fund, subject to a number of restrictions and controls including prohibitions
against purchases of securities in an Initial Public Offering and a
preclearance requirement with respect to personal securities transactions.

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

A. BROKERAGE TRANSACTIONS

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

For the period September 26, 1997 (commencement of operations) through
August 31, 1998 and the fiscal years ended August 31, 1999 and 2000, the Fund
paid a total of $94,540, $156,832 and $132,435 in brokerage commissions,
respectively.

<PAGE>

B. COMMISSIONS

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

During the period September 26, 1997 (commencement of operations) through
August 31, 1998 and the fiscal years ended August 31, 1999 and 2000, the Fund
did not effect any principal transactions with Dean Witter Reynolds.

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

During the period September 26, 1997 (commencement of operations) through
August 31, 1998 and the fiscal year ended August 31, 1999, the Fund paid no
brokerage commissions to an affiliated broker or dealer. During the fiscal year
ended August 31, 2000 the Fund paid a total of $2,068 in brokerage commissions
to Morgan Stanley & Co. During the fiscal year ended August 31, 2000 the
brokerage commissions paid to Morgan Stanley & Co. represented approximately
1.56% of the total brokerage commissions paid by the Fund during the year and
were paid on account of transactions having an aggregate dollar value equal to
approximately 1.22% of the aggregate dollar value of all portfolio transactions
of the Fund during the year for which commissions were paid.

C. BROKERAGE SELECTION

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

In seeking to implement the Fund's policies, the Investment Manager
effects transactions with those brokers and dealers who the Investment Manager
believes provide the most favorable prices and are capable of providing
efficient executions. If the Investment Manager believes the prices and
executions are obtainable from more than one broker or dealer, it may give
consideration to placing portfolio transactions with those brokers and dealers
who also furnish research and other services to the Fund or

<PAGE>

the Investment Manager. The services may include, but are not limited to, any
one or more of the following: information as to the availability of securities
for purchase or sale; statistical or factual information or opinions pertaining
to investment; wire services; and appraisals or evaluations of portfolio
securities. The information and services received by the Investment Manager
from brokers and dealers may be of benefit to the Investment Manager in the
management of accounts of some of its other clients and may not in all cases
benefit the Fund directly.

The Investment Manager currently serves as investment manager to a number
of clients, including other investment companies, and may in the future act as
investment manager or advisor to others. It is the practice of the Investment
Manager to cause purchase and sale transactions to be allocated among the Fund
and others whose assets it manages in such manner as it deems equitable. In
making such allocations among the Fund and other client accounts, various
factors may be considered, including the respective investment objectives, the
relative size of portfolio holdings of the same or comparable securities, the
availability of cash for investment, the size of investment commitments
generally held and the opinions of the persons responsible for managing the
portfolios of the Fund and other client accounts. In the case of certain
initial and secondary public offerings, the Investment Manager utilizes a pro
rata allocation process based on the size of the relevant funds and/or client
accounts involved and the number of shares available from the public offering.

D. DIRECTED BROKERAGE

During the fiscal year ended August 31, 2000, the Fund did not pay any
brokerage commissions to brokers because of research services provided.

E. REGULAR BROKER-DEALERS

During the fiscal year ended August 31, 2000, the Fund purchased
securities issued by brokers or dealers that were among the ten brokers or the
ten dealers that executed transactions for or with the Fund in the largest
dollar amounts during the year. At August 31, 2000, the Fund owned securities
issued by these issuers in the following amounts:

Merrill Lynch & Company Inc. - $10,475,235, Bank of America Corporation -
$16,532,869 and The Bank of New York - $7,203,130.

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

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

The Fund is not required to hold annual meetings of shareholders and in
ordinary circumstances the Fund does not intend to hold such meetings. The
Trustees may call special meetings of shareholders for action by shareholder
vote as may be required by the Investment Company Act or the Declaration of
Trust. Under certain circumstances, the Trustees may be removed by action of
the Trustees. In addition, under certain circumstances, the shareholders may
call a meeting to remove Trustees and the Fund is required to provide
assistance in communicating with shareholders about such a meeting. The voting

<PAGE>

rights of shareholders are not cumulative, so that holders of more than 50
percent of the shares voting can, if they choose, elect all Trustees being
selected, while the holders of the remaining shares would be unable to elect
any Trustees.

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

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

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

A. PURCHASE/REDEMPTION OF SHARES

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

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

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

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

B. OFFERING PRICE

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

<PAGE>

The price of Fund shares, called "net asset value," is based on the value
of the Fund's portfolio securities. Net asset value per share of each Class is
calculated by dividing the value of the portion of the Fund's securities and
other assets attributable to that Class, less the liabilities attributable to
that Class, by the number of shares of that Class outstanding. The assets of
each Class of shares are invested in a single portfolio. The net asset value of
each Class, however, will differ because the Classes have different ongoing
fees.

In the calculation of the Fund's net asset value: (1) an equity portfolio
security listed or traded on the New York or American Stock Exchange, NASDAQ or
other exchange is valued at its latest sale price, prior to the time when
assets are valued; if there were no sales that day, the security is valued at
the latest bid price (in cases where a security is traded on more than one
exchange, the security is valued on the exchange designated as the primary
market pursuant to procedures adopted by the Trustees); and (2) all other
portfolio securities for which over-the-counter market quotations are readily
available are valued at the latest bid price. When market quotations are not
readily available, including circumstances under which it is determined by the
Investment Manager that sale or bid prices are not reflective of a security's
market value, portfolio securities are valued at their fair value as determined
in good faith under procedures established by and under the general supervision
of the Fund's Trustees.

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

Futures are valued at the latest sale price on the commodities exchange on
which they trade unless the Trustees determine such price does not reflect
their market value, in which case they will be valued at their fair value as
determined in good faith under procedures established by and under the
supervision of the Trustees.

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

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

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

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

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

<PAGE>

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

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

Gains or losses on the Fund's transactions in listed non-equity options,
futures and options on futures generally are treated as 60% long-term and 40%
short-term. When the Fund engages in options and futures transactions, various
tax rules may accelerate or defer recognition of certain gains and losses,
change the character of certain gains or losses, or alter the holding period of
other investments held by the Fund. The application of these rules would
therefore also affect the amount, timing and character of distributions made by
the Fund.

Under certain tax rules, the Fund may be required to accrue a portion of
any discount at which certain securities are purchased as income each year even
though the Fund receives no payments in cash on the security during the year. In
addition, if the Fund invests in an equity security of a non-U.S. corporation
classified as a "passive investment company" for U.S. tax purposes, the
application of certain technical tax provisions applying to investments in such
companies may result in the Fund being required to accrue income in respect of
the security without any receipt of cash attributable to such income. To the
extent that the Fund invests in such securities, it would be required to pay out
such accrued discount as an income distribution in each year in order to avoid
taxation at the Fund level. Such distributions will be made from the available
cash of the Fund or by liquidation of portfolio securities if necessary. If a
distribution of cash necessitates the liquidation of portfolio securities, the
Investment Manager will select which securities to sell. The Fund may realize a
gain or loss from such sales. In the event the Fund realizes net capital gains
from such transactions, its shareholders may receive a larger capital gain
distribution, if any, than they would in the absence of such transactions.

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

Distributions of net long-term capital gains, if any, are taxable to
shareholders as long-term capital gains regardless of how long a shareholder
has held the Fund's shares and regardless of whether the distribution is
received in additional shares or in cash. The maximum tax rate on long-term
capital gains realized by non-corporate shareholders is 20%.

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

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

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

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

<PAGE>

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

In general, a sale of shares results in capital gain or loss, and for
individual shareholders, is taxable at a federal rate dependent upon the length
of time the shares were held. A redemption of a shareholder's Fund shares is
normally treated as a sale for tax purposes. Fund shares held for a period of
one year or less will, for tax purposes, generally result in short-term gains
or losses and those held for more than one year generally result in long-term
gain or loss. Under current law, the maximum tax rate on long-term capital
gains realized by non-corporate shareholders is 20%. Any loss realized by
shareholders upon a sale or redemption of shares within six months of the date
of their purchase will be treated as a long-term capital loss to the extent of
any distributions of net long-term capital gains with respect to such shares
during the six-month period.

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

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

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

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

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

XI. CALCULATION OF PERFORMANCE DATA
--------------------------------------------------------------------------------
From time to time, the Fund may quote its "total return" in advertisements
and sales literature. These figures are computed separately for Class A, Class
B, Class C and Class D shares. The Fund's "average annual total return"
represents an annualization of the Fund's total return over a particular period
and is computed by finding the annual percentage rate which will result in the
ending redeemable value of a hypothetical $1,000 investment made at the
beginning of a one, five or ten year period, or for the period from the date of
commencement of operations, if shorter than any of the foregoing. The ending
redeemable value is reduced by any contingent deferred sales charge ("CDSC") at
the end of the one, five, ten year or other period. For the purpose of this
calculation, it is assumed that all dividends and distributions are reinvested.
The formula for computing the average annual total return involved a percentage
obtained by dividing the ending redeemable value by the amount of the initial
investment (which in the case of Class A shares is reduced by the Class A
initial sales charge), taking a root of the

<PAGE>

quotient (which the root is equivalent to the number of years in the period)
and subtracting 1 from the result. Based on this calculation, the average
annual total returns of Class A, Class B, Class C and Class D for the fiscal
year ended August 31, 2000 and for the period September 26, 1997 (commencement
of operations) through August 31, 2000 were: Class A: 9.43% and 16.14%,
respectively; Class B: 9.69% and 16.67%, respectively; Class C: 13.69% and
17.43%, respectively; and Class D: 15.81% and 18.60%, respectively.

In addition, the Fund may advertise its total return for each Class over
different periods of time by means of aggregate, average, year-by-year or other
types of total return figures. These calculations may or may not reflect the
imposition of the maximum front-end sales charge for Class A or the deduction
of the CDSC for each of Class B and Class C which, if reflected, would reduce
the performance quoted. For example, the average annual total return of the
Fund may be calculated in the manner described above, but without deduction for
any applicable sales charge. Based on this calculation, the average annual
total returns of Class A, Class B, Class C and Class D for the fiscal year
ended August 31, 2000 and the period September 26, 1997 (commencement of
operations) through August 31, 2000 were: Class A: 15.49% and 18.30%,
respectively; Class B: 14.69% and 17.43%, respectively; Class C: 14.69% and
17.43%, respectively; and Class D: 15.81% and 18.60%, respectively.

In addition, the Fund may compute its aggregate total return for each
Class for specified periods by determining the aggregate percentage rate which
will result in the ending value of a hypothetical $1,000 investment made at the
beginning of the period. For the purpose of this calculation, it is assumed
that all dividends and distribution are reinvested. The formula for computing
aggregate total return involves a percentage obtained by dividing the ending
value (without reduction for any sale charge) by the initial $1,000 investment
and subtracting 1 from the result. Based on this calculation, the total returns
of Class A, Class B, Class C and Class D for the fiscal year ended August 31,
2000 and for the period September 26, 1997 (commencement of operations) through
August 31, 2000 were: Class A: 15.49% and 63.62%, respectively; Class B: 14.69%
and 60.10%, respectively; Class C: 14.69% and 60.10%, respectively; and Class
D: 15.81% and 64.83%, respectively.

The Fund may also advertise the growth of hypothetical investment of
$10,000, $50,000 and $100,000 in each Class of shares of the Fund by adding 1
to the Fund's aggregate total return to date (expressed as a decimal and
without taking into account the effect of any applicable CDSC) and multiplying
by $9,475, $48,000 and $97,000 in the case of Class A (investments of $10,000,
$50,000 and $100,000 in each Class of shares of the Fund by adding 1 to the
Fund's aggregate total return to date (expressed as a decimal and without
taking into account the effect of any applicable CDSC) and multiplying by
$9,475, $48,000 and $97,000 in the case of Class A (investments of $10,000,
$50,000 and $100,000 adjusted for the initial sales charge) or by $10,000,
$50,000 and $100,000 in the case of each of Class B, Class C and Class D, as
the case may be. Investments of $10,000, $50,000 and $100,000 in each Class at
inception of the Class would have grown to the following amounts at August 31,
2000:

<TABLE>
<CAPTION>
INVESTMENT AT INCEPTION OF:
INCEPTION -----------------------------------
CLASS DATE: $10,000 $50,000 $100,000
------------------------ ---------- --------- --------- -----------
<S> <C> <C> <C> <C>
Class A ................ 9/26/97 $15,503 $78,538 $158,711
Class B ................ 9/26/97 16,010 80,050 160,100
Class C ................ 9/26/97 16,010 80,050 160,100
Class D ................ 9/26/97 16,483 82,415 164,830
</TABLE>

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

<PAGE>

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

EXPERTS. The financial statements of the Fund for the fiscal year ended
August 31, 2000 included in this Statement of Additional Information and
incorporated by reference in the Prospectus have been so included and
incorporated herein in reliance on the report of Deloitte & Touche LLP,
independent auditors, given on the authority of said firm as experts in
auditing and accounting.

* * * * *

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

<PAGE>

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND
Portfolio of Investments August 31, 2000

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------- ------------------
<S> <C> <C>
COMMON STOCKS (98.2%)
Advertising/Marketing Services (0.2%)
56,193 Interpublic Group of Companies,
Inc. .................................. $ 2,149,382
33,087 Omnicom Group, Inc. ................... 2,760,697
13,442 Young & Rubicam, Inc. ................. 786,357
--------------
5,696,436
--------------
Aerospace & Defense (0.8%)
168,959 Boeing Co. ............................ 9,060,426
37,373 General Dynamics Corp. ................ 2,352,163
19,991 Goodrich (B.F.) Co. (The) ............. 815,883
79,684 Lockheed Martin Corp. ................. 2,261,033
13,003 Northrop Grumman Corp. ................ 1,011,796
63,297 Raytheon Co. (Class B) ................ 1,760,448
26,857 Textron, Inc. ......................... 1,505,671
--------------
18,767,420
--------------
Agricultural Commodities/Milling (0.0%)
117,762 Archer-Daniels-Midland Co. ............ 1,037,775
--------------
Air Freight/Couriers (0.1%)
54,005 FedEx Corp.* .......................... 2,179,102
--------------
Airlines (0.2%)
27,879 AMR Corp.* ............................ 914,780
22,811 Delta Air Lines, Inc. ................. 1,129,144
92,424 Southwest Airlines Co. ................ 2,091,093
12,408 US Airways Group Inc.* ................ 421,872
--------------
4,556,889
--------------
Alternative Power Generation (0.2%)
79,389 AES Corp. (The)* ...................... 5,061,049
--------------
Aluminum (0.3%)
40,753 Alcan Aluminium, Ltd. (Canada) ........ 1,337,208
160,928 Alcoa, Inc. ........................... 5,350,856
--------------
6,688,064
--------------
Apparel/Footwear (0.1%)
10,165 Liz Claiborne, Inc. ................... 446,625
50,931 Nike, Inc. (Class B) .................. 2,014,958
10,557 Reebok International Ltd.* ............ 202,562
6,050 Russell Corp. ......................... 115,328
21,268 VF Corp. .............................. 486,505
--------------
3,265,978
--------------
Apparel/Footwear Retail (0.3%)
158,481 Gap, Inc. (The) ....................... 3,555,917
80,019 Limited, Inc. (The) ................... 1,600,380
</TABLE>

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------- ------------------
<S> <C> <C>
25,069 Nordstrom, Inc. ....................... $ 432,440
55,872 TJX Companies, Inc. (The) ............. 1,051,092
--------------
6,639,829
--------------
Auto Parts: O.E.M. (0.2%)
28,373 Dana Corp. ............................ 700,458
104,860 Delphi Automotive Systems Corp......... 1,723,636
13,541 Eaton Corp. ........................... 898,784
15,968 Johnson Controls, Inc. ................ 853,290
22,972 TRW Inc. .............................. 1,049,533
29,392 Visteon Corp. ......................... 461,087
--------------
5,686,788
--------------
Automotive Aftermarket (0.0%)
13,747 Cooper Tire & Rubber Co. .............. 165,823
29,124 Goodyear Tire & Rubber Co. (The) ...... 680,773
--------------
846,596
--------------
Beverages: Non-Alcoholic (1.5%)
460,993 Coca Cola Co. ......................... 24,259,757
78,328 Coca-Cola Enterprises Inc. ............ 1,458,859
268,393 PepsiCo, Inc. ......................... 11,440,252
--------------
37,158,868
--------------
Beverages: Alcoholic (0.3%)
84,142 Anheuser-Busch Companies, Inc.......... 6,631,441
12,760 Brown-Forman Corp. (Class B) .......... 676,280
6,834 Coors (Adolph) Co. (Class B) .......... 407,050
--------------
7,714,771
--------------
Biotechnology (0.8%)
191,238 Amgen Inc.* ........................... 14,498,231
27,654 Biogen, Inc.* ......................... 1,911,583
37,671 MedImmune, Inc.* ...................... 3,169,073
--------------
19,578,887
--------------
Broadcasting (0.3%)
100,924 Clear Channel Communications,
Inc.* ................................. 7,304,374
--------------
Building Products (0.1%)
7,498 Armstrong Holdings, Inc. .............. 119,499
83,562 Masco Corp. ........................... 1,629,459
--------------
1,748,958
--------------
Cable/Satellite TV (0.2%)
167,197 Comcast Corp. (Class A Special)*....... 6,228,088
--------------
Casino/Gaming (0.0%)
22,765 Harrah's Entertainment, Inc.* ......... 645,957
--------------
</TABLE>

See Notes to Financial Statements

<PAGE>

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND
Portfolio of Investments August 31, 2000, continued

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------- ------------------
<S> <C> <C>
Chemicals: Major Diversified (0.6%)
125,913 Dow Chemical Co. (The) ................... $ 3,297,347
195,065 Du Pont (E.I.) de Nemours & Co.,
Inc. ..................................... 8,753,542
14,285 Eastman Chemical Co. ..................... 616,041
19,966 Hercules Inc. ............................ 264,549
40,515 Rohm & Haas Co. .......................... 1,172,403
25,086 Union Carbide Corp. ...................... 1,005,008
--------------
15,108,890
--------------
Chemicals: Specialty (0.2%)
42,709 Air Products & Chemicals, Inc. ........... 1,550,871
23,769 Engelhard Corp. .......................... 445,669
5,654 FMC Corp.* ............................... 383,412
12,571 Grace (W. R.) & Co.* ..................... 99,782
10,140 Great Lakes Chemical Corp. ............... 342,225
29,363 Praxair, Inc. ............................ 1,299,313
15,876 Sigma-Aldrich Corp. ...................... 461,396
--------------
4,582,668
--------------
Commercial Printing/Forms (0.0%)
13,470 Deluxe Corp. ............................. 296,340
22,706 Donnelley (R.R.) & Sons Co. .............. 584,679
--------------
881,019
--------------
Computer Communications (3.6%)
19,360 Adaptec, Inc.* ........................... 474,320
33,946 Cabletron Systems, Inc.* ................. 1,270,853
1,295,597 Cisco Systems, Inc.* ..................... 88,748,394
--------------
90,493,567
--------------
Computer Peripherals (2.0%)
404,154 EMC Corp.* ............................... 39,607,092
24,071 Lexmark International Group,
Inc.* .................................... 1,632,315
56,727 Network Appliance, Inc.* ................. 6,637,059
42,321 Seagate Technology, Inc.* ................ 2,512,809
--------------
50,389,275
--------------
Computer Processing Hardware (6.0%)
60,624 Apple Computer, Inc.* .................... 3,694,275
316,257 Compaq Computer Corp. .................... 10,772,504
479,601 Dell Computer Corp.* ..................... 20,922,594
59,936 Gateway, Inc.* ........................... 4,081,642
186,274 Hewlett-Packard Co. ...................... 22,492,585
330,196 International Business Machines
Corp. .................................... 43,585,872
17,720 NCR Corp.* ............................... 715,445
</TABLE>

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------- ------------------
<S> <C> <C>
105,088 Palm, Inc.* .............................. $ 4,623,872
295,474 Sun Microsystems, Inc.* .................. 37,506,731
--------------
148,395,520
--------------
Construction Materials (0.0%)
10,333 Owens Corning ............................ 53,602
18,763 Vulcan Materials Co. ..................... 831,435
--------------
885,037
--------------
Consumer Sundries (0.0%)
12,017 American Greetings Corp.
(Class A) ................................ 223,817
--------------
Containers/Packaging (0.1%)
5,535 Ball Corp. ............................... 191,649
9,897 Bemis Company, Inc. ...................... 331,549
23,860 Crown Cork & Seal Co., Inc. .............. 308,689
27,296 Owens-Illinois, Inc.* .................... 356,554
31,468 Pactiv Corp.* ............................ 346,148
15,582 Sealed Air Corp.* ........................ 799,551
9,764 Temple-Inland, Inc. ...................... 414,360
--------------
2,748,500
--------------
Contract Drilling (0.1%)
17,481 Rowan Companies, Inc.* ................... 541,911
39,198 Transocean Sedco Forex Inc. .............. 2,342,080
--------------
2,883,991
--------------
Data Processing Services (0.4%)
116,819 Automatic Data Processing, Inc. .......... 6,965,333
26,997 Ceridian Corp.* .......................... 652,990
76,786 First Data Corp. ......................... 3,661,732
--------------
11,280,055
--------------
Department Stores (0.4%)
17,433 Dillard's, Inc. (Class A) ................ 223,360
39,858 Federated Department Stores,
Inc.* .................................... 1,101,077
60,755 Kohl's Corp.* ............................ 3,402,280
61,931 May Department Stores Co. ................ 1,420,542
48,612 Penney (J.C.) Co., Inc. .................. 680,568
65,664 Sears, Roebuck & Co. ..................... 2,047,896
--------------
8,875,723
--------------
Discount Stores (2.0%)
20,641 Consolidated Stores Corp.* ............... 281,234
83,210 Costco Wholesale Corp.* .................. 2,865,544
61,293 Dollar General Corp. ..................... 1,260,337
89,588 Kmart Corp.* ............................. 627,116
169,862 Target Corp. ............................. 3,949,291
830,128 Wal-Mart Stores, Inc. .................... 39,379,197
--------------
48,362,719
--------------
</TABLE>

See Notes to Financial Statements

<PAGE>

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND
Portfolio of Investments August 31, 2000, continued

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------- ------------------
<S> <C> <C>
Drugstore Chains (0.4%)
72,673 CVS Corp. .............................. $ 2,697,985
7,336 Longs Drug Stores Corp. ................ 138,467
187,716 Walgreen Co. ........................... 6,171,163
--------------
9,007,615
--------------
Electric Utilities (1.6%)
25,557 Ameren Corp. ........................... 1,033,461
59,712 American Electric Power Co., Inc........ 2,104,848
29,600 Cinergy Corp. .......................... 869,500
20,441 CMS Energy Corp. ....................... 534,021
39,478 Consolidated Edison, Inc. .............. 1,236,155
27,864 Constellation Energy Group, Inc......... 1,065,798
29,733 CP&L, Inc .............................. 1,100,121
44,328 Dominion Resources, Inc. ............... 2,349,384
26,571 DTE Energy Co. ......................... 923,342
68,441 Duke Energy Corp. ...................... 5,120,242
61,891 Edison International ................... 1,280,370
42,833 Entergy Corp. .......................... 1,303,729
43,007 FirstEnergy Corp. ...................... 1,064,423
18,367 Florida Progress Corp. ................. 952,788
33,184 FPL Group, Inc. ........................ 1,771,196
22,597 GPU, Inc. .............................. 692,033
32,103 Niagara Mohawk Holdings Inc.* .......... 413,326
31,583 PECO Energy Co. ........................ 1,521,906
71,768 PG & E Corp. ........................... 2,076,786
15,782 Pinnacle West Capital Corp ............. 650,021
26,870 PPL Corp. .............................. 900,145
40,297 Public Service Enterprise Group,
Inc. ................................... 1,460,766
55,070 Reliant Energy, Inc. ................... 2,044,474
120,808 Southern Co. (The) ..................... 3,616,689
49,120 TXU Corp. .............................. 1,716,130
33,113 Unicom Corp. ........................... 1,512,850
62,893 Xcel Energy, Inc. ...................... 1,576,251
--------------
40,890,755
--------------
Electrical Products (0.4%)
36,103 American Power Conversion
Corp.* ................................. 859,703
17,355 Cooper Industries, Inc. ................ 612,848
79,477 Emerson Electric Co. ................... 5,260,384
36,538 Molex Inc. ............................. 1,929,663
7,585 National Service Industries, Inc. ...... 151,226
10,795 Thomas & Betts Corp. ................... 202,406
--------------
9,016,230
--------------
Electronic Components (0.3%)
27,606 Sanmina Corp.* ......................... 3,257,508
111,046 Solectron Corp.* ....................... 5,031,772
--------------
8,289,280
--------------
</TABLE>

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------- ------------------
<S> <C> <C>
Electronic Equipment/Instruments (1.3%)
84,186 Agilent Technologies, Inc.* ............ $ 5,077,468
173,523 JDS Uniphase Corp.* .................... 21,600,902
9,152 PerkinElmer, Inc. ...................... 823,108
35,020 Rockwell International Corp. ........... 1,416,121
8,978 Tektronix, Inc.* ....................... 684,011
124,094 Xerox Corp. ............................ 1,993,260
--------------
31,594,870
--------------
Electronic Production Equipment (0.7%)
150,409 Applied Materials, Inc.* ............... 12,982,177
34,639 KLA-Tencor Corp.* ...................... 2,273,184
23,413 Novellus Systems, Inc.* ................ 1,441,363
32,256 Teradyne, Inc.* ........................ 2,090,592
--------------
18,787,316
--------------
Electronics/Appliance Stores (0.2%)
38,072 Best Buy Co., Inc.* .................... 2,350,946
37,874 Circuit City Stores, Inc.- Circuit
City Group ............................. 982,357
34,766 RadioShack Corp. ....................... 2,051,194
--------------
5,384,497
--------------
Electronics/Appliances (0.0%)
14,600 Maytag Corp. ........................... 556,625
8,361 Polaroid Corp. ......................... 142,137
13,604 Whirlpool Corp. ........................ 516,952
--------------
1,215,714
--------------
Engineering & Construction (0.0%)
14,224 Fluor Corp. ............................ 425,831
--------------
Environmental Services (0.1%)
35,189 Allied Waste Industries, Inc.* ......... 323,299
115,679 Waste Management, Inc. ................. 2,190,671
--------------
2,513,970
--------------
Finance/Rental/Leasing (1.5%)
135,658 Associates First Capital Corp.
(Class A) .............................. 3,815,381
36,472 Capital One Financial Corp. ............ 2,199,717
48,988 CIT Group, Inc. (The) (Series A) ....... 857,290
21,108 Countrywide Credit Industries,
Inc. ................................... 799,465
187,628 Fannie Mae ............................. 10,085,005
129,479 Freddie Mac ............................ 5,454,303
88,130 Household International, Inc. .......... 4,230,240
158,634 MBNA Corp. ............................. 5,601,763
26,539 Providian Financial Corp. .............. 3,050,326
11,077 Ryder System, Inc. ..................... 212,540
29,168 USA Education Inc. ..................... 1,143,021
--------------
37,449,051
--------------
</TABLE>

See Notes to Financial Statements

<PAGE>

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND
Portfolio of Investments August 31, 2000, continued

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------- ------------------
<S> <C> <C>
Financial Conglomerates (2.5%)
248,818 American Express Co. .................. $ 14,711,364
838,060 Citigroup, Inc. ....................... 48,921,753
60,581 Conseco, Inc. ......................... 511,152
--------------
64,144,269
--------------
Financial Publishing/Services (0.2%)
30,118 Dun & Bradstreet Corp. (The) .......... 993,894
26,290 Equifax, Inc. ......................... 668,752
36,226 McGraw-Hill Companies, Inc. ........... 2,243,748
--------------
3,906,394
--------------
Food Distributors (0.1%)
24,487 Supervalu, Inc. ....................... 365,775
62,060 SYSCO Corp. ........................... 2,625,914
--------------
2,991,689
--------------
Food Retail (0.4%)
78,902 Albertson's, Inc. ..................... 1,696,393
155,521 Kroger Co.* ........................... 3,528,383
92,456 Safeway Inc.* ......................... 4,559,236
26,913 Winn-Dixie Stores, Inc. ............... 375,100
--------------
10,159,112
--------------
Food: Major Diversified (1.0%)
51,135 Bestfoods ............................. 3,611,409
78,692 Campbell Soup Co. ..................... 1,996,809
54,288 General Mills, Inc. ................... 1,744,002
65,604 Heinz (H.J.) Co. ...................... 2,501,152
75,539 Kellogg Co. ........................... 1,751,561
60,801 Nabisco Group Holdings Corp. .......... 1,706,228
24,383 Quaker Oats Company (The) ............. 1,656,520
57,135 Ralston-Ralston Purina Group .......... 1,292,679
161,959 Sara Lee Corp. ........................ 3,016,486
106,457 Unilever N.V. (Netherlands) ........... 5,030,093
--------------
24,306,939
--------------
Food: Meat/Fish/Dairy (0.1%)
99,234 ConAgra, Inc. ......................... 1,817,223
--------------
Food: Specialty/Candy (0.1%)
25,552 Hershey Foods Corp. ................... 1,090,751
21,254 Wrigley (Wm.) Jr. Co. ................. 1,574,124
--------------
2,664,875
--------------
Forest Products (0.1%)
19,400 Louisiana-Pacific Corp. ............... 204,912
43,388 Weyerhaeuser Co. ...................... 2,009,407
--------------
2,214,319
--------------
</TABLE>

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------- ------------------
<S> <C> <C>
Gas Distributors (0.1%)
5,056 Eastern Enterprises ................... $ 319,792
24,935 KeySpan Corp. ......................... 858,699
8,651 Nicor Inc. ............................ 319,006
5,437 ONEOK, Inc. ........................... 173,644
6,573 Peoples Energy Corp. .................. 213,622
38,045 Sempra Energy ......................... 741,877
--------------
2,626,640
--------------
Home Building (0.0%)
11,061 Centex Corp. .......................... 319,386
8,963 Kaufman & Broad Home Corp. ............ 222,394
7,669 Pulte Corp. ........................... 252,598
--------------
794,378
--------------
Home Furnishings (0.1%)
36,590 Leggett & Platt, Inc. ................. 647,186
49,642 Newell Rubbermaid, Inc. ............... 1,287,589
10,752 Tupperware Corp. ...................... 217,056
--------------
2,151,831
--------------
Home Improvement Chains (1.0%)
430,903 Home Depot, Inc. (The) ................ 20,710,275
71,208 Lowe's Companies, Inc. ................ 3,191,008
--------------
23,901,283
--------------
Hospital/Nursing Management (0.2%)
103,862 HCA-The Healthcare Corp. .............. 3,583,239
19,049 Manor Care, Inc.* ..................... 254,780
58,252 Tenet Healthcare Corp.* ............... 1,805,812
--------------
5,643,831
--------------
Hotels/Resorts/Cruiselines (0.2%)
112,581 Carnival Corp. ........................ 2,244,584
68,598 Hilton Hotels Corp. ................... 685,980
44,630 Marriott International, Inc.
(Class A) ............................. 1,762,885
--------------
4,693,449
--------------
Household/Personal Care (1.4%)
10,383 Alberto-Culver Co. (Class B) .......... 293,969
44,220 Avon Products, Inc. ................... 1,732,871
43,716 Clorox Co. ............................ 1,581,973
107,402 Colgate-Palmolive Co. ................. 5,470,789
194,427 Gillette Co. .......................... 5,832,810
19,150 International Flavors &
Fragrances, Inc. ...................... 493,112
103,481 Kimberly-Clark Corp. .................. 6,053,638
243,599 Procter & Gamble Co. (The) ............ 15,057,463
--------------
36,516,625
--------------
</TABLE>

See Notes to Financial Statements

<PAGE>

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND
Portfolio of Investments August 31, 2000, continued

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------- ------------------
<S> <C> <C>
Industrial Conglomerates (5.7%)
1,842,677 General Electric Co.** .................... $ 108,142,106
148,660 Honeywell International, Inc. ............. 5,732,701
73,720 Minnesota Mining &
Manufacturing Co. ......................... 6,855,960
314,396 Tyco International Ltd.
(Bermuda) ................................. 17,920,572
87,636 United Technologies Corp. ................. 5,471,773
--------------
144,123,112
--------------
Industrial Machinery (0.2%)
56,162 Illinois Tool Works Inc. .................. 3,148,582
30,146 Ingersoll-Rand Co. ........................ 1,373,527
11,181 McDermott International, Inc.* ............ 85,954
20,852 Parker-Hannifin Corp. ..................... 725,910
--------------
5,333,973
--------------
Industrial Specialties (0.1%)
24,149 Ecolab, Inc. .............................. 940,302
8,581 Millipore Corp. ........................... 522,368
32,435 PPG Industries, Inc. ...................... 1,313,617
30,499 Sherwin-Williams Co. ...................... 701,477
--------------
3,477,764
--------------
Information Technology Services (0.5%)
34,478 Citrix Systems, Inc.* ..................... 758,516
31,166 Computer Sciences Corp.* .................. 2,464,062
86,759 Electronic Data Systems Corp. ............. 4,321,683
51,402 PeopleSoft, Inc.* ......................... 1,657,714
21,914 Sapient Corp.* ............................ 1,150,485
58,069 Unisys Corp.* ............................. 754,897
--------------
11,107,357
--------------
Insurance Brokers/Services (0.3%)
47,655 AON Corp. ................................. 1,778,127
50,209 Marsh & McLennan Companies,
Inc. ...................................... 5,962,319
--------------
7,740,446
--------------
Integrated Oil (4.0%)
16,874 Amerada Hess Corp. ........................ 1,154,814
121,431 Chevron Corp. ............................. 10,260,919
116,278 Conoco, Inc. (Class B) .................... 3,037,763
648,369 Exxon Mobil Corp. ......................... 52,923,120
47,281 Phillips Petroleum Co. .................... 2,925,512
399,381 Royal Dutch Petroleum Co. (ADR)
(Netherlands) ............................. 24,437,125
102,819 Texaco, Inc. .............................. 5,295,178
45,233 Unocal Corp. .............................. 1,509,651
--------------
101,544,082
--------------
</TABLE>

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------- ------------------
<S> <C> <C>
Internet Software/Services (1.5%)
427,894 America Online, Inc.* ..................... $ 25,085,286
101,184 Yahoo! Inc.* .............................. 12,293,856
--------------
37,379,142
--------------
Investment Banks/Brokers (2.0%)
20,601 Bear Stearns Companies, Inc. .............. 1,381,555
22,507 Lehman Brothers Holdings, Inc. ............ 3,263,515
72,243 Merrill Lynch & Co., Inc. ................. 10,475,235
210,805 Morgan Stanley Dean Witter &
Co. (Note 4) .............................. 22,674,713
27,123 Paine Webber Group, Inc. .................. 1,939,295
253,616 Schwab (Charles) Corp. .................... 9,684,961
--------------
49,419,274
--------------
Investment Managers (0.2%)
45,361 Franklin Resources, Inc. .................. 1,723,718
22,493 Price (T.) Rowe Associates, Inc. .......... 1,017,808
41,508 Stillwell Financial, Inc.* ................ 2,007,950
--------------
4,749,476
--------------
Life/Health Insurance (0.4%)
49,439 AFLAC, Inc. ............................... 2,669,706
46,264 American General Corp. .................... 3,368,598
19,202 Jefferson-Pilot Corp. ..................... 1,270,932
35,709 Lincoln National Corp. .................... 1,928,286
23,869 Torchmark Corp. ........................... 669,824
44,792 UnumProvident Corp. ....................... 971,427
--------------
10,878,773
--------------
Major Banks (4.1%)
308,665 Bank of America Corp. ..................... 16,532,869
137,366 Bank of New York Co., Inc. ................ 7,203,130
213,609 Bank One Corp. ............................ 7,529,717
72,911 BB&T Corp. ................................ 1,973,154
242,634 Chase Manhattan Corp. (The) ............... 13,557,175
29,134 Comerica, Inc. ............................ 1,640,608
182,628 First Union Corp. ......................... 5,284,798
167,849 FleetBoston Financial Corp. ............... 7,165,054
45,480 Huntington Bancshares, Inc. ............... 767,475
80,979 KeyCorp ................................... 1,634,764
91,489 Mellon Financial Corp. .................... 4,139,877
30,236 Morgan (J.P.) & Co., Inc. ................. 5,055,081
112,912 National City Corp. ....................... 2,364,095
54,088 PNC Financial Services Group,
Inc. ...................................... 3,187,812
31,308 SouthTrust Corp. .......................... 882,494
29,965 State Street Corp. ........................ 3,528,379
32,767 Summit Bancorp. ........................... 907,236
56,331 SunTrust Banks, Inc. ...................... 2,781,343
</TABLE>

See Notes to Financial Statements

<PAGE>

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND
Portfolio of Investments August 31, 2000, continued

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------- ------------------
<S> <C> <C>
140,031 U.S. Bancorp ......................... $ 3,045,674
37,708 Wachovia Corp. ....................... 2,161,140
300,091 Wells Fargo & Co. .................... 12,960,180
--------------
104,302,055
--------------
Major Telecommunications (4.4%)
58,722 ALLTEL Corp. ......................... 2,969,131
698,624 AT&T Corp. ........................... 22,006,656
350,441 BellSouth Corp. ...................... 13,075,830
633,579 SBC Communications, Inc. ............. 26,451,923
163,271 Sprint Corp. (FON Group) ............. 5,469,579
506,648 Verizon Communications ............... 22,102,519
533,252 WorldCom, Inc.* ...................... 19,463,698
--------------
111,539,336
--------------
Managed Health Care (0.3%)
26,249 Aetna Inc. ........................... 1,468,303
30,332 CIGNA Corp. .......................... 2,949,787
31,242 Humana, Inc.* ........................ 267,510
30,249 UnitedHealth Group Inc. .............. 2,858,531
11,562 Wellpoint Health Networks, Inc.*...... 997,945
--------------
8,542,076
--------------
Media Conglomerates (2.2%)
386,996 Disney (Walt) Co. (The) .............. 15,068,657
245,061 Time Warner Inc. ..................... 20,952,716
284,035 Viacom, Inc. (Class B)
(Non-Voting)* ........................ 19,119,106
--------------
55,140,479
--------------
Medical Distributors (0.2%)
51,279 Cardinal Health, Inc. ................ 4,195,263
52,476 McKesson HBOC, Inc. .................. 1,308,620
--------------
5,503,883
--------------
Medical Specialties (1.3%)
19,116 ALZA Corp. * ......................... 1,445,648
9,400 Bard (C.R.), Inc. .................... 458,838
9,886 Bausch & Lomb, Inc. .................. 353,425
54,066 Baxter International, Inc. ........... 4,500,995
47,015 Becton, Dickinson & Co. .............. 1,416,327
33,054 Biomet, Inc. ......................... 1,117,638
75,935 Boston Scientific Corp.* ............. 1,438,019
57,079 Guidant Corp.* ....................... 3,842,130
12,518 Mallinckrodt, Inc. ................... 564,092
222,926 Medtronic, Inc. ...................... 11,424,958
23,030 Pall Corp. ........................... 492,266
38,799 PE Corporation-PE Biosystems
Group ................................ 3,816,852
15,613 St. Jude Medical, Inc.* .............. 618,665
--------------
31,489,853
--------------
</TABLE>

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------- -------------------
<S> <C> <C>
Medical/Nursing Services (0.0%)
71,789 Healthsouth Corp.* ................... $ 439,708
--------------
Metal Fabrications (0.0%)
11,355 Timken Co. (The) ..................... 185,228
--------------
Miscellaneous Manufacturing (0.2%)
11,278 Crane Co. ............................ 283,360
26,389 Danaher Corp. ........................ 1,482,732
37,809 Dover Corp. .......................... 1,847,915
16,374 ITT Industries, Inc.* ................ 550,576
32,175 Thermo Electron Corp.* ............... 748,069
--------------
4,912,652
--------------
Miscellaneous Commercial Services (0.2%)
28,557 Convergys Corp.* ..................... 1,117,293
69,156 Paychex, Inc. ........................ 3,086,087
24,039 Sabre Holdings Corp. ................. 670,087
--------------
4,873,467
--------------
Motor Vehicles (0.7%)
348,987 Ford Motor Co. ....................... 8,441,123
99,645 General Motors Corp. ................. 7,193,123
56,545 Harley-Davidson, Inc. ................ 2,816,648
--------------
18,450,894
--------------
Movies/Entertainment (0.2%)
81,286 Seagram Co. Ltd. (The) (Canada)....... 4,892,401
--------------
Multi-Line Insurance (1.7%)
430,630 American International Group,
Inc. ................................. 38,379,899
40,024 Hartford Financial Services
Group, Inc. (The) .................... 2,666,599
23,769 Safeco Corp. ......................... 625,422
--------------
41,671,920
--------------
Office Equipment/Supplies (0.1%)
20,887 Avery Dennison Corp. ................. 1,129,203
48,005 Pitney Bowes, Inc. ................... 1,755,183
--------------
2,884,386
--------------
Oil & Gas Pipelines (0.9%)
39,844 Coastal Corp. (The) .................. 2,744,256
15,025 Columbia Energy Group ................ 1,054,567
43,074 El Paso Energy Corp. ................. 2,509,061
136,345 Enron Corp. .......................... 11,572,282
82,281 Williams Companies, Inc. (The) ....... 3,790,069
--------------
21,670,235
--------------
Oil & Gas Production (0.4%)
45,215 Anardarko Petroleum Corp. ............ 2,973,791
21,180 Apache Corp. ......................... 1,334,340
</TABLE>

See Notes to Financial Statements

<PAGE>

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND
Portfolio of Investments August 31, 2000, continued

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------- ------------------
<S> <C> <C>
40,098 Burlington Resources, Inc. ............. $ 1,576,353
23,580 Devon Energy Corp. ..................... 1,380,904
17,533 Kerr-McGee Corp. ....................... 1,107,866
68,657 Occidental Petroleum Corp. ............. 1,484,708
--------------
9,857,962
--------------
Oil Refining/Marketing (0.1%)
13,145 Ashland, Inc. .......................... 463,361
16,482 Sunoco, Inc. ........................... 448,104
26,917 Tosco Corp. ............................ 820,969
58,069 USX-Marathon Group ..................... 1,593,268
--------------
3,325,702
--------------
Oilfield Services/Equipment (0.6%)
61,503 Baker Hughes Inc. ...................... 2,248,703
82,684 Halliburton Co. ........................ 4,382,252
105,989 Schlumberger Ltd. ...................... 9,042,187
--------------
15,673,142
--------------
Other Consumer Services (0.1%)
18,324 Block (H.&R.), Inc. .................... 657,374
134,297 Cendant Corp.* ......................... 1,771,042
--------------
2,428,416
--------------
Other Consumer Specialties (0.0%)
29,489 Fortune Brands, Inc. ................... 751,970
--------------
Other Metals/Minerals (0.1%)
15,497 Allegheny Technologies Inc. ............ 337,060
33,842 Inco Ltd. (Canada)* .................... 604,926
14,662 Phelps Dodge Corp. ..................... 652,459
--------------
1,594,445
--------------
Packaged Software (5.7%)
22,300 Adobe Systems, Inc. .................... 2,899,000
10,859 Autodesk, Inc. ......................... 305,409
45,480 BMC Software, Inc.* .................... 1,227,960
109,601 Computer Associates
International, Inc. .................... 3,479,832
67,139 Compuware Corp.* ....................... 709,156
14,810 Mercury Interactive Corp.* ............. 1,809,597
980,137 Microsoft Corp.* ....................... 68,425,814
61,357 Novell, Inc.* .......................... 751,623
528,661 Oracle Corp.* .......................... 48,075,110
51,407 Parametric Technology Corp.* ........... 687,569
37,177 Siebel Systems, Inc.* .................. 7,354,075
72,806 Veritas Software Corp.* ................ 8,777,673
--------------
144,502,818
--------------
Pharmaceuticals: Generic Drugs (0.0%)
17,983 Watson Pharmaceuticals, Inc.* .......... 1,109,326
--------------
</TABLE>

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------- ------------------
<S> <C> <C>
Pharmaceuticals: Major (7.5%)
288,584 Abbott Laboratories .................... $ 12,625,550
242,910 American Home Products Corp. ........... 13,162,686
367,400 Bristol-Myers Squibb Co. ............... 19,472,200
259,058 Johnson & Johnson ...................... 23,817,145
210,345 Lilly (Eli) & Co. ...................... 15,355,185
428,273 Merck & Co., Inc. ...................... 29,925,576
1,171,781 Pfizer Inc. ............................ 50,679,528
236,414 Pharmacia Corp. ........................ 13,844,995
272,693 Schering-Plough Corp. .................. 10,941,807
--------------
189,824,672
--------------
Pharmaceuticals: Other (0.1%)
24,134 Allergan, Inc. ......................... 1,764,799
--------------
Precious Metals (0.1%)
73,686 Barrick Gold Corp. (Canada) ............ 1,174,371
29,801 Freeport-McMoRan Copper &
Gold, Inc. (Class B)* .................. 292,422
48,508 Homestake Mining Co. ................... 269,826
31,268 Newmont Mining Corp. ................... 580,412
61,000 Placer Dome Inc. (Canada) .............. 541,375
--------------
2,858,406
--------------
Property - Casualty Insurers (0.5%)
138,689 Allstate Corp. (The) ................... 4,030,649
32,586 Chubb Corp. (The) ...................... 2,494,866
29,946 Cincinnati Financial Corp. ............. 1,164,151
18,368 Loews Corp. ............................ 1,486,660
13,604 Progressive Corp. ...................... 1,031,353
39,497 St. Paul Companies, Inc. ............... 1,881,045
--------------
12,088,724
--------------
Publishing: Books/Magazines (0.0%)
13,361 Harcourt General, Inc. ................. 792,474
9,434 Meredith Corp. ......................... 257,666
--------------
1,050,140
--------------
Publishing: Newspapers (0.3%)
16,513 Dow Jones & Co., Inc. .................. 1,033,095
49,636 Gannett Co., Inc. ...................... 2,810,639
14,466 Knight-Ridder, Inc. .................... 790,205
31,652 New York Times Co. (The)
(Class A) .............................. 1,240,363
57,441 Tribune Co. ............................ 2,049,926
--------------
7,924,228
--------------
Pulp & Paper (0.3%)
10,658 Boise Cascade Corp. .................... 318,408
38,325 Fort James Corp. ....................... 1,212,028
31,763 Georgia-Pacific Corp. .................. 849,660
</TABLE>

See Notes to Financial Statements

<PAGE>

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND
Portfolio of Investments August 31, 2000, continued

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------------- -----------------
<S> <C> <C>
89,811 International Paper Co. ............... $ 2,862,726
19,145 Mead Corp. ............................ 513,325
5,336 Potlatch Corp. ........................ 179,423
18,731 Westvaco Corp. ........................ 512,761
20,629 Willamette Industries, Inc. ........... 629,185
--------------
7,077,516
--------------
Railroads (0.2%)
79,767 Burlington Northern Santa Fe
Corp. ................................. 1,784,787
40,687 CSX Corp. ............................. 971,402
71,355 Norfolk Southern Corp. ................ 1,146,140
46,162 Union Pacific Corp. ................... 1,834,940
--------------
5,737,269
--------------
Recreational Products (0.2%)
16,368 Brunswick Corp. ....................... 306,900
57,698 Eastman Kodak Co. ..................... 3,591,701
32,059 Hasbro, Inc. .......................... 394,726
79,284 Mattel, Inc. .......................... 782,930
--------------
5,076,257
--------------
Regional Banks (0.7%)
73,172 AmSouth Bancorporation ................ 1,335,389
86,542 Fifth Third Bancorp ................... 3,997,159
180,670 Firstar Corp. ......................... 4,313,496
41,404 Northern Trust Corp. .................. 3,490,875
25,578 Old Kent Financial Corp. .............. 749,755
41,096 Regions Financial Corp. ............... 893,838
52,595 Synovus Financial Corp. ............... 1,035,464
25,203 Union Planters Corp. .................. 763,966
--------------
16,579,942
--------------
Restaurants (0.4%)
23,045 Darden Restaurants, Inc. .............. 407,608
248,877 McDonald's Corp. ...................... 7,435,200
34,186 Starbucks Corp.* ...................... 1,252,062
27,461 Tricon Global Restaurants, Inc.* ...... 799,802
21,184 Wendy's International, Inc. ........... 399,848
--------------
10,294,520
--------------
Savings Banks (0.3%)
39,027 Charter One Financial, Inc. ........... 926,891
29,444 Golden West Financial Corp. ........... 1,402,271
102,022 Washington Mutual, Inc. ............... 3,570,770
--------------
5,899,932
--------------
Semiconductors (6.6%)
57,064 Advanced Micro Devices, Inc.* ......... 2,147,033
74,154 Altera Corp.* ......................... 4,806,106
65,900 Analog Devices, Inc.* ................. 6,622,950
</TABLE>

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------------- -----------------
<S> <C> <C>
40,000 Broadcom Corp. (Class A)* ............. $ 10,000,000
40,478 Conexant Systems, Inc.* ............... 1,505,276
1,247,520 Intel Corp. ........................... 93,408,060
57,942 Linear Technology Corp. ............... 4,168,203
57,175 LSI Logic Corp.* ...................... 2,054,727
52,645 Maxim Integrated Products, Inc.*....... 4,616,308
103,337 Micron Technology, Inc.* .............. 8,447,800
32,881 National Semiconductor Corp.* ......... 1,463,205
321,146 Texas Instruments, Inc. ............... 21,496,710
59,842 Xilinx, Inc.* ......................... 5,318,458
--------------
166,054,836
--------------
Services to the Health Industry (0.1%)
55,356 IMS Health Inc. ....................... 1,044,845
21,449 Quintiles Transnational Corp.* ........ 298,945
--------------
1,343,790
--------------
Specialty Insurance (0.1%)
18,324 MBIA, Inc. ............................ 1,204,803
19,714 MGIC Investment Corp. ................. 1,159,430
--------------
2,364,233
--------------
Specialty Stores (0.2%)
24,917 AutoZone, Inc.* ....................... 560,633
52,278 Bed Bath & Beyond Inc.* ............... 918,132
58,893 Office Depot, Inc.* ................... 430,655
90,209 Staples, Inc.* ........................ 1,386,963
27,000 Tiffany & Co. ......................... 1,123,875
40,274 Toys 'R' Us, Inc.* .................... 732,483
--------------
5,152,741
--------------
Specialty Telecommunications (0.8%)
26,119 CenturyTel, Inc. ...................... 752,554
164,100 Global Crossing Ltd. (Bermuda)*........ 4,933,256
304,051 Qwest Communications
International, Inc.* .................. 15,696,633
--------------
21,382,443
--------------
Steel (0.0%)
24,556 Bethlehem Steel Corp.* ................ 85,946
15,840 Nucor Corp. ........................... 582,120
16,464 USX-U.S. Steel Group .................. 286,062
16,055 Worthington Industries, Inc. .......... 167,574
--------------
1,121,702
--------------
Telecommunication Equipment (5.0%)
125,692 ADC Telecommunications, Inc.* ......... 5,145,516
15,021 Andrew Corp.* ......................... 444,997
28,440 Comverse Technology, Inc.* ............ 2,614,703
51,371 Corning Inc. .......................... 16,846,477
606,512 Lucent Technologies Inc. .............. 25,359,783
</TABLE>

See Notes to Financial Statements

<PAGE>

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND
Portfolio of Investments August 31, 2000, continued

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------- -----------------
<S> <C> <C>
400,861 Motorola, Inc. ......................... $ 14,456,050
551,732 Nortel Networks Corp. (Canada) ......... 45,000,641
138,020 QUALCOMM Inc.* ......................... 8,263,948
29,662 Scientific-Atlanta, Inc. ............... 2,311,782
76,269 Tellabs, Inc.* ......................... 4,285,364
--------------
124,729,261
--------------
Textiles (0.0%)
3,337 Springs Industries, Inc. (Class A)...... 99,693
--------------
Tobacco (0.5%)
425,902 Philip Morris Companies, Inc. .......... 12,617,347
30,212 UST, Inc. .............................. 653,335
--------------
13,270,682
--------------
Tools/Hardware (0.1%)
15,859 Black & Decker Corp. ................... 635,351
4,154 Briggs & Stratton Corp. ................ 179,661
10,909 Snap-On, Inc. .......................... 336,134
16,322 Stanley Works .......................... 436,614
--------------
1,587,760
--------------
Trucks/Construction/Farm
Machinery (0.2%)
64,926 Caterpillar, Inc. ...................... 2,386,031
7,729 Cummins Engine Co., Inc. ............... 274,380
43,590 Deere & Co. ............................ 1,435,746
11,526 Navistar International Corp.* .......... 432,225
14,251 PACCAR, Inc. ........................... 604,777
--------------
5,133,159
--------------
Wholesale Distributors (0.0%)
32,940 Genuine Parts Co. ...................... 677,329
17,497 Grainger (W.W.), Inc. .................. 505,226
--------------
1,182,555
--------------
Wireless Communications (0.6%)
141,243 Nextel Communications, Inc.
(Class A)* ............................. 7,830,159
170,462 Sprint Corp. (PCS Group)* .............. 8,555,062
--------------
16,385,221
--------------
TOTAL COMMON STOCKS
(Cost $1,895,365,749)................... 2,476,504,830
--------------
</TABLE>

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
----------- ---------------------------------------------------------
<S> <C> <C> <C>
SHORT-TERM INVESTMENT (a) (1.8%)
U.S. GOVERNMENT AGENCY
$ 44,800 Federal National Mortgage Assoc.
6.53% due 09/01/00
(Cost $44,800,000)...................... $ 44,800,000
--------------
TOTAL INVESTMENTS
(Cost $1,940,165,749) (b)............... 100.0% 2,521,304,830
OTHER ASSETS IN EXCESS OF
LIABILITIES ............................ 0.0 1,378,585
----- -------------
NET ASSETS ............................. 100.0% $2,522,683,415
===== ==============
</TABLE>

------------------
ADR American Depository Receipt.
* Non-income producing security.
** Some of this security is segregated in connection with open
futures contracts.
(a) Purchased on a discount basis. The interest rate shown has been adjusted
to reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates the
aggregate cost for book purposes. The aggregate gross unrealized
appreciation is $748,839,333 and the aggregate gross unrealized
depreciation is $167,700,252, resulting in net unrealized appreciation of
$581,139,081.

FUTURES CONTRACTS OPEN AT AUGUST 31, 2000:

<TABLE>
<CAPTION>
UNDERLYING
DESCRIPTION, FACE
NUMBER OF DELIVERY YEAR, AMOUNT UNREALIZED
CONTRACTS AND MONTH AT VALUE GAIN
----------- ---------------- -------------- -------------
<S> <C> <C> <C>
124 S&P 500 Index
September/2000 $47,157,200 $1,011,984
</TABLE>

See Notes to Financial Statements

<PAGE>

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND
Financial Statements

STATEMENT OF ASSETS AND LIABILITIES
August 31, 2000

<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(cost $1,940,165,749) ........................................... $2,521,304,830
Cash .............................................................. 68,380
Receivable for:
Shares of beneficial interest sold ............................. 6,435,048
Dividends ...................................................... 3,123,071
Variation margin ............................................... 545,600
Investments sold ............................................... 97,147
Deferred organizational expenses .................................. 28,370
Prepaid expenses and other assets ................................. 84,608
--------------
TOTAL ASSETS ................................................... 2,531,687,054
--------------
LIABILITIES:
Payable for:
Investments purchased .......................................... 3,607,212
Shares of beneficial interest repurchased ...................... 2,482,722
Plan of distribution fee ....................................... 1,887,740
Investment management fee ...................................... 790,327
Accrued expenses and other payables ............................... 235,638
--------------
TOTAL LIABILITIES .............................................. 9,003,639
--------------
NET ASSETS ..................................................... $2,522,683,415
==============
COMPOSITION OF NET ASSETS:
Paid-in-capital ................................................... $1,962,699,372
Net unrealized appreciation ....................................... 582,151,065
Accumulated net realized loss ..................................... (22,167,022)
--------------
NET ASSETS ..................................................... $2,522,683,415
==============
CLASS A SHARES:
Net Assets ........................................................ $183,084,710
Shares Outstanding (unlimited authorized, $.01 par value) ......... 11,305,011
NET ASSET VALUE PER SHARE ...................................... $16.20
======
MAXIMUM OFFERING PRICE PER SHARE,
(net asset value plus 5.54% of net asset value) ................. $17.10
======
CLASS B SHARES:
Net Assets ........................................................ $2,035,848,439
Shares Outstanding (unlimited authorized, $.01 par value) ......... 127,746,797
NET ASSET VALUE PER SHARE ...................................... $15.94
======
CLASS C SHARES:
Net Assets ........................................................ $211,446,488
Shares Outstanding (unlimited authorized, $.01 par value) ......... 13,268,332
NET ASSET VALUE PER SHARE ...................................... $15.94
======
CLASS D SHARES:
Net Assets ........................................................ $92,303,778
Shares Outstanding (unlimited authorized, $.01 par value) ......... 5,670,123
NET ASSET VALUE PER SHARE ...................................... $16.28
======
</TABLE>

See Notes to Financial Statements

<PAGE>

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND
Financial Statements, continued

STATEMENT OF OPERATIONS
For the year ended August 31, 2000

<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT LOSS:
INCOME
Dividends (net of $122,661 foreign withholding tax) ......... $ 25,846,907
Interest .................................................... 1,426,040
------------
TOTAL INCOME ............................................. 27,272,947
------------
EXPENSES
Plan of distribution fee (Class A shares) ................... 337,108
Plan of distribution fee (Class B shares) ................... 18,407,231
Plan of distribution fee (Class C shares) ................... 1,777,625
Investment management fee ................................... 8,627,398
Transfer agent fees and expenses ............................ 1,909,951
Registration fees ........................................... 278,723
Shareholder reports and notices ............................. 166,253
Professional fees ........................................... 75,635
Organizational expenses ..................................... 13,736
Trustees' fees and expenses ................................. 9,667
Other ....................................................... 237,246
------------
TOTAL EXPENSES ........................................... 31,840,573
Less: amounts waived/reimbursed ............................. (315,412)
------------
NET EXPENSES ............................................. 31,525,161
------------
NET INVESTMENT LOSS ...................................... (4,252,214)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized loss on:
Investments .............................................. (17,279,996)
Futures contracts ........................................ (1,617,279)
------------
NET LOSS ................................................. (18,897,275)
------------
Net change in unrealized appreciation/depreciation on:
Investments .............................................. 320,520,224
Futures contracts ........................................ 1,560,852
------------
NET APPRECIATION ......................................... 322,081,076
------------
NET GAIN ................................................. 303,183,801
------------
NET INCREASE ................................................ $298,931,587
============
</TABLE>

See Notes to Financial Statements

<PAGE>

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND
Financial Statements, continued

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
AUGUST 31, 2000 AUGUST 31, 1999
----------------- ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income (loss) ......................... $ (4,252,214) $ 251,395
Net realized gain (loss) ............................. (18,897,275) 3,050,206
Net change in unrealized appreciation ................ 322,081,076 295,107,663
-------------- --------------
NET INCREASE ...................................... 298,931,587 298,409,264
-------------- --------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A shares .................................... - (286,359)
Class B shares .................................... - (612,696)
Class C shares .................................... - (55,326)
Class D shares .................................... - (139,228)
Net realized gain
Class A shares .................................... (283,108) (31,341)
Class B shares .................................... (4,247,416) (524,676)
Class C shares .................................... (390,381) (39,375)
Class D shares .................................... (61,600) (12,126)
-------------- --------------
TOTAL DIVIDENDS AND DISTRIBUTIONS ................. (4,982,505) (1,701,127)
-------------- --------------
Net increase from transactions in shares of beneficial
interest ........................................... 382,303,284 929,739,512
-------------- --------------
NET INCREASE ...................................... 676,252,366 1,226,447,649
NET ASSETS:
Beginning of period .................................. 1,846,431,049 619,983,400
-------------- --------------
END OF PERIOD ..................................... $2,522,683,415 $1,846,431,049
============== ==============
</TABLE>

See Notes to Financial Statements

<PAGE>

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND
Notes to Financial Statements August 31, 2000

1. ORGANIZATION AND ACCOUNTING POLICIES

Morgan Stanley Dean Witter S&P 500 Index Fund (the "Fund") is registered under
the Investment Company Act of 1940, as amended (the "Act"), as a diversified,
open-end management investment company. The Fund's investment objective is to
provide investment results that, before expenses, correspond to the total
return of the Standard & Poor's 500 Composite Stock Price Index (the "S&P 500
Index"). The Fund seeks to achieve its objective by investing at least 80% of
its total assets in common stocks included in the S&P 500 Index in
approximately the same weighting as the Index. The Fund was organized as a
Massachusetts business trust on June 18, 1997 and commenced operations on
September 26, 1997.

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

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

The following is a summary of significant accounting policies:

A. VALUATION OF INVESTMENTS - (1) an equity portfolio security listed or traded
on the New York or American stock exchange, NASDAQ, or other exchange is valued
at its latest sale price, prior to the time when assets are valued; if there
were no sales that day, the security is valued at the latest bid price (in
cases where a security is traded on more than one exchange, the security is
valued on the exchange designated as the primary market pursuant to procedures
adopted by the Trustees); (2) all other portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest available bid price; (3) when market quotations are not readily
available, including circumstances under which it is determined by Morgan
Stanley Dean Witter Advisors Inc. (the "Investment Manager") that sale or bid
prices are not reflective of a security's market value, portfolio securities
are valued at their fair value as determined in good faith under procedures
established by and under the general supervision of the Trustees (valuation of
debt securities for which market quotations are not readily available may be
based upon current market prices of securities which are comparable in coupon,
rating and maturity or an appropriate matrix utilizing similar factors); and
(4) short-term debt securities having a maturity date of

<PAGE>

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND
Notes to Financial Statements August 31, 2000, continued

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

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

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

D. FUTURES CONTRACTS - A futures contract is an agreement between two parties
to buy and sell financial instruments at a set price on a future date. Upon
entering into such a contract, the Fund is required to pledge to the broker
cash, U.S. Government securities or other liquid portfolio securities equal to
the minimum initial margin requirements of the applicable futures exchange.
Pursuant to the contract, the Fund agrees to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in the value of the contract
which is known as variation margin. Such receipts or payments are recorded by
the Fund as unrealized gains or losses. Upon closing of the contract, the Fund
realizes a gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was closed.

E. FEDERAL INCOME TAX STATUS - It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.

F. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - The Fund records dividends and
distributions to its shareholders on the ex-dividend date. The amount of
dividends and distributions from net investment income and net realized capital
gains are determined in accordance with federal income tax regulations which
may differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for tax purposes are reported as distributions of paid-in-capital.

<PAGE>

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND
Notes to Financial Statements August 31, 2000, continued

G. ORGANIZATIONAL EXPENSES - The Investment Manager incurred the organizational
expenses of the Fund in the amount of approximately $68,000 which have been
reimbursed by the Fund for the full amount thereof. Such expenses have been
deferred and are being amortized on the straight-line method over a period not
to exceed five years from the commencement of operations.

2. INVESTMENT MANAGEMENT AGREEMENT

Pursuant to an Investment Management Agreement, the Fund pays the Investment
Manager a management fee, accrued daily and payable monthly, by applying the
following annual rates to the net assets of the Fund determined as of the close
of each business day: 0.40% of the portion of daily net assets not exceeding
$1.5 billion; 0.375% to the portion of daily net assets exceeding $1.5 billion
but not exceeding $3 billion; and 0.35% of the portion of daily net assets in
excess of $3 billion.

The Investment Manager has agreed to assume all operating expenses (except for
Plan of Distribution 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.

3. PLAN OF DISTRIBUTION

Shares of the Fund are distributed by Morgan Stanley Dean Witter Distributors
Inc. (the "Distributor"), an affiliate of the Investment Manager. The Fund has
adopted a Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the
Act. The Plan provides that the Fund will pay the Distributor a fee which is
accrued daily and paid monthly at the following annual rates: (i) Class A - up
to 0.25% of the average daily net assets of Class A; (ii) Class B - 1.0% of the
average daily net assets of Class B; and (iii) Class C - up to 1.0% of the
average daily net assets of Class C.

In the case of Class B shares, provided that the Plan continues in effect, any
cumulative expenses incurred by the Distributor but not yet recovered may be
recovered through the payment of future distribution fees from the Fund
pursuant to the Plan and contingent deferred sales charges paid by investors
upon redemption of Class B shares. Although there is no legal obligation for
the Fund to pay expenses incurred in excess of payments made to the Distributor
under the Plan and the proceeds of contingent deferred sales charges paid by
investors upon redemption of shares, if for any reason the Plan is terminated,
the Trustees will consider at that time the manner in which to treat such
expenses. The Distributor has advised the Fund that such excess amounts totaled
$53,054,813 at August 31, 2000.

In the case of Class A shares and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 1.0% of the average daily
net assets of Class A or Class C, respectively, will

<PAGE>

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND
Notes to Financial Statements August 31, 2000, continued

not be reimbursed by the Fund through payments in any subsequent year, except
that expenses representing a gross sales credit to Morgan Stanley Dean Witter
Financial Advisors or other selected broker-dealer representatives may be
reimbursed in the subsequent calendar year. For the year ended August 31, 2000,
the distribution fee was accrued for Class A shares and Class C shares at the
annual rate of 0.25% and 1.0%, respectively.

The Distributor has informed the Fund that for the year ended August 31, 2000
it received contingent deferred sales charges from certain redemptions of the
Fund's Class A shares, Class B shares and Class C shares of $8,761 , $4,206,084
and $128,722, respectively and received $368,755 in front-end sales charges
from sales of the Fund's Class A shares. The respective shareholders pay such
charges which are not an expense of the Fund.

4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES

The cost of purchases and proceeds from sales of portfolio securities,
excluding short-term investments, for the year ended August 31, 2000 aggregated
$474,710,652 and $105,080,381, respectively. Included in the aforementioned are
purchases and sales of common stock of Morgan Stanley Dean Witter & Co., an
affiliate of the Investment Manager and Distributor, of $8,674,481 and
$392,268, respectively, as well as a realized gain of $75,202.

Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager
and Distributor, is the Fund's transfer agent.

5. FEDERAL INCOME TAX STATUS

At August 31, 2000, the Fund had a net capital loss carryover of approximately
$1,014,000 which will be available through August 31, 2008 to offset future
capital gains to the extent provided by regulations.

Capital losses incurred after October 31 ("post-October losses") within the
taxable year are deemed to arise on the first business day of the Fund's next
taxable year. The Fund incurred and will elect to defer net capital losses of
approximately $16,323,000 during fiscal 2000.

At August 31, 2000, the Fund had temporary book/tax differences primarily
attributable to post-October losses, mark-to-market of open futures contracts
and capital loss deferrals on wash sales and permanent book/tax differences
primarily attributable to a net operating loss. To reflect reclassifications
arising from the permanent differences, paid-in-capital was charged $4,252,310,
net investment loss was credited $4,252,214 and accumulated net realized loss
was credited $96.

<PAGE>

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND
Notes to Financial Statements August 31, 2000, continued

6. SHARES OF BENEFICIAL INTEREST

Transactions in shares of beneficial interest were as follows:

<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
AUGUST 31, 2000 AUGUST 31, 1999
----------------------------------- ----------------------------------
SHARES AMOUNT SHARES AMOUNT
--------------- ----------------- --------------- ----------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Sold ................................................ 7,116,892 $ 107,676,840 6,680,320 $ 86,767,191
Reinvestment of dividends and distributions ......... 17,601 265,419 23,092 300,893
Redeemed ............................................ (2,883,766) (43,685,750) (2,469,479) (31,741,936)
---------- ------------- ---------- --------------
Net increase - Class A .............................. 4,250,727 64,256,509 4,233,933 55,326,148
---------- ------------- ---------- --------------
CLASS B SHARES
Sold ................................................ 46,386,133 688,740,928 80,470,161 1,054,390,780
Reinvestment of dividends and distributions ......... 264,957 3,953,148 80,119 1,040,747
Redeemed ............................................ (32,840,732) (488,362,464) (19,572,235) (256,833,169)
----------- ------------- ----------- --------------
Net increase - Class B .............................. 13,810,358 204,331,612 60,978,045 798,598,358
----------- ------------- ----------- --------------
CLASS C SHARES
Sold ................................................ 6,318,335 93,989,704 7,972,059 105,606,189
Reinvestment of dividends and distributions ......... 25,132 374,970 6,822 88,622
Redeemed ............................................ (3,344,237) (49,854,787) (1,731,053) (22,722,524)
----------- ------------- ----------- --------------
Net increase - Class C .............................. 2,999,230 44,509,887 6,247,828 82,972,287
----------- ------------- ----------- --------------
CLASS D SHARES
Sold ................................................ 5,582,313 85,395,200 4,490,458 59,446,759
Reinvestment of dividends and distributions ......... 3,003 45,467 9,731 126,988
Redeemed ............................................ (1,088,746) (16,235,391) (4,717,139) (66,731,028)
----------- ------------- ----------- --------------
Net increase (decrease) - Class D ................... 4,496,570 69,205,276 (216,950) (7,157,281)
----------- ------------- ----------- --------------
Net increase in Fund ................................ 25,556,885 $ 382,303,284 71,242,856 $ 929,739,512
========== ============= ========== ==============
</TABLE>

7. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS

The Fund may purchase and sell stock index futures ("futures contracts") for
the following reasons: to simulate full 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 when a
futures contract is priced more attractively than stocks comprising the S&P 500
Index.

These futures contracts involve elements of market risk in excess of the amount
reflected in the Statement of Assets and Liabilities. The Fund bears the risk
of an unfavorable change in the value of the underlying securities.

At August 31, 2000, the Fund had outstanding futures contracts.

<PAGE>

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND
Financial Highlights

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

<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR FOR THE YEAR SEPTEMBER 26, 1997*
ENDED ENDED THROUGH
AUGUST 31, 2000 AUGUST 31, 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 expense 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.

See Notes to Financial Statements

<PAGE>

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND
Financial Highlights, continued

<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR FOR THE YEAR SEPTEMBER 26, 1997*
ENDED ENDED THROUGH
AUGUST 31, 2000 AUGUST 31, 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.

See Notes to Financial Statements

<PAGE>

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND
Financial Highlights, continued

<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR FOR THE YEAR SEPTEMBER 26, 1997*
ENDED ENDED THROUGH
AUGUST 31, 2000 AUGUST 31, 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.

See Notes to Financial Statements

<PAGE>

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND
Financial Highlights, continued

<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR FOR THE YEAR SEPTEMBER 26, 1997*
ENDED ENDED THROUGH
AUGUST 31, 2000 AUGUST 31, 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.

See Notes to Financial Statements

<PAGE>

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND
Report of Independent Accountants

TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND:

We have audited the accompanying statement of assets and liabilities of Morgan
Stanley Dean Witter S&P 500 Index Fund (the "Fund"), including the portfolio of
investments, as of August 31, 2000, and the related statements of operations
and changes in net assets, and the financial highlights for the year then
ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audit. The statement of changes in net assets for the year ended August 31,
1999 and the financial highlights for each of the respective stated periods
ended August 31, 1999 were audited by other independent accountants whose
report, dated October 11, 1999, expressed an unqualified opinion on that
statement and financial highlights.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 2000, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Morgan Stanley Dean Witter S&P 500 Index Fund as of August 31, 2000, the
results of its operations, the changes in its net assets, and the financial
highlights for the year then ended, in conformity with accounting principles
generally accepted in the United States of America.

Deloitte & Touche LLP
New York, New York
October 10, 2000

2000 FEDERAL TAX NOTICE (unaudited)

During the fiscal year ended August 31, 2000, the Fund paid to its
shareholders $0.02 per share from long-term capital gains.

<PAGE>

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND
Change in Independent Accountants

On July 1, 2000 PricewaterhouseCoopers LLP resigned as independent accountants
of the Fund.

The reports of PricewaterhouseCoopers LLP on the financial statements of the
Fund for the past two fiscal years contained no adverse opinion or disclaimer
of opinion and were not qualified or modified as to uncertainty, audit scope or
accounting principle.

In connection with its audits for the two most recent fiscal years and through
July 1, 2000, there have been no disagreements with PricewaterhouseCoopers LLP
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements if not resolved
to the satisfaction of PricewaterhouseCoopers LLP would have caused them to
make reference thereto in their report on the financial statements for such
years.

The Fund, with the approval of its Board of Trustees and its Audit Committee,
engaged Deloitte & Touche LLP as its new independent accountants as of July 1,
2000.

<PAGE>

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND
Report of Independent Accountants

TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND:

In our opinion, the statement of changes in net assets and the financial
highlights of Morgan Stanley Dean Witter S&P 500 Index Fund (the "Fund") (not
presented separately herein) present fairly, in all material respects, the
changes in its net assets for the year ended August 31, 1999 and the financial
highlights for each of the years in the period ended August 31, 1999, in
conformity with generally accepted accounting principles. This financial
statement and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for the
opinion expressed above. We have not audited the financial statements or
financial highlights of the Fund for any period subsequent to August 31, 1999.

PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
October 11, 1999

<PAGE>

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND
PART C OTHER INFORMATION

Item 23. Exhibits
-------- --------

1 (a). Amended and Restated Declaration of Trust of the Registrant,
dated July 16, 1997, is incorporated by reference to Exhibit
1 of Pre-Effective Amendment No. 1 to the Registration
Statement on Form N-1A, filed on July 30, 1997.

1 (b). Amendment, dated June 22, 1998, to the Declaration of Trust
of the Registrant is incorporated by reference to Exhibit 1
of Post-Effective Amendment No. 3 to the Registration
Statement on Form N-1A, filed on October 30, 1998.

2. Amended and Restated By-Laws of the Registrant, dated May 1,
1999, is incorporated by reference to Exhibit 2 of
Post-Effective Amendment No. 5 to the Registration Statement
on Form N-1A, filed on August 31, 1999.

3. Not applicable.

4. Amended Investment Management Agreement between the
Registrant and Morgan Stanley Dean Witter Advisors Inc.,
dated May 1, 1999, is incorporated by reference to Exhibit 4
of Post-Effective Amendment No. 5 to the Registration
Statement on Form N-1A, filed on August 31, 1999.

5(a). Amended Distribution Agreement between the Registrant and
Morgan Stanley Dean Witter Distributors Inc., dated June 22,
1998, is incorporated by reference to Exhibit 6 of
Post-Effective Amendment No. 3 to the Registration Statement
on Form N-1A, filed on October 30, 1998.

5(b). Selected Dealer Agreement between Morgan Stanley Dean Witter
Distributors Inc. and Dean Witter Reynolds Inc., dated July
28, 1997, is incorporated by reference to Exhibit 6(b) of
Pre-Effective Amendment No. 1 to the Registration Statement
on Form N-1A, filed on July 30, 1997.

5(c). Omnibus Selected Dealer Agreement between Morgan Stanley Dean
Witter Distributors Inc. and National Financial Services
Corporation, dated October 17, 1998, is incorporated by
reference to Exhibit 5(c) of Post-Effective Amendment No. 5
to the Registration Statement on Form N-1A, filed on August
31, 1999.

6. Not applicable.

<PAGE>

7. Custodian Agreement between The Bank of New York and the
Registrant, dated July 23, 1997, is incorporated by reference
to Exhibit 8(a) of Pre-Effective Amendment No. 1 to the
Registration Statement on Form N-1A, filed on July 30, 1997.

8(a). Amended and Restated Transfer Agency Agreement between the
Registrant and Morgan Stanley Dean Witter Trust FSB, dated
September 1, 2000, filed herein.

8(b). Amended Services Agreement between Morgan Stanley Dean Witter
Advisors Inc. and Morgan Stanley Dean Witter Services Company
Inc., dated June 22, 1998, is incorporated by reference to
Exhibit 8(b) of Post-Effective Amendment No. 5 to the
Registration Statement on Form N-1A, filed on August 31,
1999.

9(a). Opinion of Barry Fink, Esq., dated July 30, 1997, is
incorporated by reference to Exhibit 10(a) of Pre-Effective
Amendment No.1 to the Registration Statement on Form N-1A,
filed on July 30, 1997.

9(b). Opinion of Lane Altman & Owens LLP, Massachusetts Counsel,
dated July 30, 1997, is incorporated by reference to Exhibit
10(b) of Pre-Effective Amendment No. 1 to the Registration
Statement on Form N-1A, filed on July 30, 1997.

10(a). Consent of Independent Auditors, filed herein.

10(b). Consent of PricewaterhouseCoopers LLP, filed herein.

11. Not applicable.

12. Not applicable.

13. Amended and Restated Plan of Distribution pursuant to Rule
12b-1 between the Registrant and Morgan Stanley Dean Witter
Distributors Inc., dated July 23, 1997, is incorporated by
reference to Exhibit 15 of Pre-Effective Amendment No. 1 to
the Registration Statement on Form N-1A, filed on July 30,
1997.

15. Amended and Restated Multiple Class Plan pursuant to Rule
18f-3, dated August 15, 2000, filed herein.

16(a). Code of Ethics of Morgan Stanley Dean Witter Advisors Inc.,
Morgan Stanley Dean Witter Services Company Inc. and Morgan
Stanley Dean Witter Distributors Inc., filed herein.

16(b). Code of Ethics of the Morgan Stanley Dean Witter Funds, filed
herein.
<PAGE>

Other. Powers of Attorney of Trustees are incorporated by reference
to Exhibit Other of Pre-Effective Amendment No. 1 to the
Registration Statement on Form N-1A, filed on July 30, 1997
and Exhibit Other of Post-Effective Amendment No. 1 to the
Registration Statement on Form N-1A, filed on March 31, 1998.
Power of Attorney for James F. Higgins, filed herein.

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

None

Item 25. Indemnification.

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

Pursuant to Section 5.2 of the Registrant's Declaration of Trust and
paragraph 8 of the Registrant's Investment Management Agreement, neither the
Investment Manager nor any trustee, officer, employee or agent of the Registrant
shall be liable for any action or failure to act, except in the case of bad
faith, willful misfeasance, gross negligence or reckless disregard of duties to
the Registrant.

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

<PAGE>

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

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

Item 26. Business and Other Connections of Investment Advisor

See "The Fund and Its Management" in the Prospectus regarding the business
of the investment advisor. The following information is given regarding officers
of Morgan Stanley Dean Witter Advisors Inc. ("MSDW Advisors"). MSDW Advisors is
a wholly-owned subsidiary of Morgan Stanley Dean Witter & Co.

The term "Morgan Stanley Dean Witter Funds" refers to the following
registered investment companies:

Closed-End Investment Companies
-------------------------------
(1) Morgan Stanley Dean Witter California Insured Municipal Income Trust
(2) Morgan Stanley Dean Witter California Quality Municipal Securities
(3) Morgan Stanley Dean Witter Government Income Trust
(4) Morgan Stanley Dean Witter High Income Advantage Trust
(5) Morgan Stanley Dean Witter High Income Advantage Trust II
(6) Morgan Stanley Dean Witter High Income Advantage Trust III
(7) Morgan Stanley Dean Witter Income Securities Inc.
(8) Morgan Stanley Dean Witter Insured California Municipal Securities
(9) Morgan Stanley Dean Witter Insured Municipal Bond Trust
(10) Morgan Stanley Dean Witter Insured Municipal Income Trust
(11) Morgan Stanley Dean Witter Insured Municipal Securities
(12) Morgan Stanley Dean Witter Insured Municipal Trust
(13) Morgan Stanley Dean Witter Municipal Income Opportunities Trust
(14) Morgan Stanley Dean Witter Municipal Income Opportunities Trust II
(15) Morgan Stanley Dean Witter Municipal Income Opportunities Trust III
(16) Morgan Stanley Dean Witter Municipal Income Trust
(17) Morgan Stanley Dean Witter Municipal Income Trust II
(18) Morgan Stanley Dean Witter Municipal Income Trust III
(19) Morgan Stanley Dean Witter Municipal Premium Income Trust
(20) Morgan Stanley Dean Witter New York Quality Municipal Securities
(21) Morgan Stanley Dean Witter Prime Income Trust
(22) Morgan Stanley Dean Witter Quality Municipal Income Trust
(23) Morgan Stanley Dean Witter Quality Municipal Investment Trust
(24) Morgan Stanley Dean Witter Quality Municipal Securities

Open-end Investment Companies
-----------------------------

<PAGE>

(1) Active Assets California Tax-Free Trust
(2) Active Assets Government Securities Trust
(3) Active Assets Institutional Money Trust
(4) Active Assets Money Trust
(5) Active Assets Premier Money Trust
(6) Active Assets Tax-Free Trust
(7) Morgan Stanley Dean Witter 21st Century Trend Fund
(8) Morgan Stanley Dean Witter Aggressive Equity Fund
(9) Morgan Stanley Dean Witter American Opportunities Fund
(10) Morgan Stanley Dean Witter Balanced Growth Fund
(11) Morgan Stanley Dean Witter Balanced Income Fund
(12) Morgan Stanley Dean Witter California Tax-Free Daily Income Trust
(13) Morgan Stanley Dean Witter California Tax-Free Income Fund
(14) Morgan Stanley Dean Witter Capital Growth Securities
(15) Morgan Stanley Dean Witter Competitive Edge Fund, "Best Ideas Portfolio"
(16) Morgan Stanley Dean Witter Convertible Securities Trust
(17) Morgan Stanley Dean Witter Developing Growth Securities Trust
(18) Morgan Stanley Dean Witter Diversified Income Trust
(19) Morgan Stanley Dean Witter Dividend Growth Securities Inc.
(20) Morgan Stanley Dean Witter Equity Fund
(21) Morgan Stanley Dean Witter European Growth Fund Inc.
(22) Morgan Stanley Dean Witter Federal Securities Trust
(23) Morgan Stanley Dean Witter Financial Services Trust
(24) Morgan Stanley Dean Witter Fund of Funds
(25) Morgan Stanley Dean Witter Global Dividend Growth Securities
(26) Morgan Stanley Dean Witter Global Utilities Fund
(27) Morgan Stanley Dean Witter Growth Fund
(28) Morgan Stanley Dean Witter Hawaii Municipal Trust
(29) Morgan Stanley Dean Witter Health Sciences Trust
(30) Morgan Stanley Dean Witter High Yield Securities Inc.
(31) Morgan Stanley Dean Witter Income Builder Fund
(32) Morgan Stanley Dean Witter Information Fund
(33) Morgan Stanley Dean Witter Intermediate Income Securities
(34) Morgan Stanley Dean Witter International Fund
(35) Morgan Stanley Dean Witter International SmallCap Fund
(36) Morgan Stanley Dean Witter Japan Fund
(37) Morgan Stanley Dean Witter Latin American Growth Fund
(38) Morgan Stanley Dean Witter Limited Term Municipal Trust
(39) Morgan Stanley Dean Witter Liquid Asset Fund Inc.
(40) Morgan Stanley Dean Witter Market Leader Trust
(41) Morgan Stanley Dean Witter Mid-Cap Equity Trust
(42) Morgan Stanley Dean Witter Multi-State Municipal Series Trust
(43) Morgan Stanley Dean Witter Natural Resource Development Securities Inc.
(44) Morgan Stanley Dean Witter New Discoveries Fund
(45) Morgan Stanley Dean Witter New York Municipal Money Market Trust
(46) Morgan Stanley Dean Witter New York Tax-Free Income Fund
(47) Morgan Stanley Dean Witter Next Generation Trust
(48) Morgan Stanley Dean Witter North American Government Income Trust
(49) Morgan Stanley Dean Witter Pacific Growth Fund Inc.
(50) Morgan Stanley Dean Witter Real Estate Fund
(51) Morgan Stanley Dean Witter S&P 500 Index Fund

<PAGE>

(52) Morgan Stanley Dean Witter S&P 500 Select Fund
(53) Morgan Stanley Dean Witter Select Dimensions Investment Series
(54) Morgan Stanley Dean Witter Select Municipal Reinvestment Fund
(55) Morgan Stanley Dean Witter Short-Term Bond Fund
(56) Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust
(57) Morgan Stanley Dean Witter Small Cap Growth Fund
(58) Morgan Stanley Dean Witter Special Value Fund
(59) Morgan Stanley Dean Witter Strategist Fund
(60) Morgan Stanley Dean Witter Tax-Exempt Securities Trust
(61) Morgan Stanley Dean Witter Tax-Free Daily Income Trust
(62) Morgan Stanley Dean Witter Tax-Managed Growth Fund
(63) Morgan Stanley Dean Witter Technology Fund
(64) Morgan Stanley Dean Witter Total Market Index Fund
(65) Morgan Stanley Dean Witter Total Return Trust
(66) Morgan Stanley Dean Witter U.S. Government Money Market Trust
(67) Morgan Stanley Dean Witter U.S. Government Securities Trust
(68) Morgan Stanley Dean Witter Utilities Fund
(69) Morgan Stanley Dean Witter Value-Added Market Series
(70) Morgan Stanley Dean Witter Value Fund
(71) Morgan Stanley Dean Witter Variable Investment Series
(72) Morgan Stanley Dean Witter World Wide Income Trust

NAME AND POSITION WITH OTHER SUBSTANTIAL BUSINESS, PROFESSION, VOCATION
MORGAN STANLEY DEAN OR EMPLOYMENT, INCLUDING NAME, PRINCIPAL ADDRESS
WITTER ADVISORS INC. AND NATURE OF CONNECTION
---------------------- ------------------------------------------------

Mitchell M. Merin President and Chief Operating Officer of Asset
President, Chief Management of Morgan Stanley Dean Witter & Co.
Executive Officer and ("MSDW); Chairman, Chief Executive Officer and
Director Director of Morgan Stanley Dean Witter Distributors
Inc. ("MSDW Distributors") and Morgan Stanley Dean
Witter Trust FSB ("MSDW Trust"); President, Chief
Executive Officer and Director of Morgan Stanley
Dean Witter Services Company Inc. ("MSDW
Services"); President of the Morgan Stanley Dean
Witter Funds; Executive Vice President and Director
of Dean Witter Reynolds Inc. ("DWR"); Director of
various MSDW subsidiaries; Trustee of various Van
Kampen investment companies.

Barry Fink General Counsel of Asset Management of MSDW;
Executive Vice President, Executive Vice President, Secretary, General
Secretary, General Counsel Counsel and Director of MSDW Services; Vice
and Director President and Secretary of MSDW Distributors; Vice
President, Secretary and General Counsel of the
Morgan Stanley Dean Witter Funds.

Joseph J. McAlinden Vice President of the Morgan Stanley Dean Witter
Executive Vice President Funds; Director of MSDW Trust.
and Chief Investment
Officer

<PAGE>

Ronald E. Robison Executive Vice President, Chief Administrative
Executive Vice President, Officer and Director of MSDW Services; Vice
Chief Administrative President of the Morgan Stanley Dean Witter Funds.
Officer and Director

Edward C. Oelsner, III
Executive Vice President

Joseph R. Arcieri Vice President of various Morgan Stanley Dean
Senior Vice President Witter Funds.

Peter M. Avelar Vice President of various Morgan Stanley Dean
Senior Vice President Witter Funds.
and Director of the High
Yield Group

Mark Bavoso Vice President of various Morgan Stanley Dean
Senior Vice President Witter Funds.

Douglas Brown
Senior Vice President

Rosalie Clough
Senior Vice President
and Director of Marketing

Richard G. DeSalvo
Senior Vice President
and Director of Investment
Management Services

Richard Felegy
Senior Vice President

Sheila A. Finnerty Vice President of Morgan Stanley Dean Witter Prime
Senior Vice President Income Trust.

Edward F. Gaylor Vice President of various Morgan Stanley Dean
Senior Vice President Witter Funds.
Director of the Research
Group

Robert S. Giambrone Senior Vice President of MSDW Services, MSDW
Senior Vice President Distributors and MSDW Trust and Director of MSDW
Trust; Vice President of the Morgan Stanley Dean
Witter Funds.

<PAGE>

Rajesh K. Gupta Vice President of various Morgan Stanley Dean
Senior Vice President, Witter Funds.
Director of the Taxable
Fixed Income Group and
Chief Administrative
Officer - Investments

Kenton J. Hinchliffe Vice President of various Morgan Stanley Dean
Senior Vice President Witter Funds.

Kevin Hurley Vice President of various Morgan Stanley Dean
Senior Vice President Witter Funds.

Jenny Beth Jones Vice President of various Morgan Stanley Dean
Senior Vice President Witter Funds.

Michelle Kaufman Vice President of various Morgan Stanley Dean
Senior Vice President Witter Funds.

John B. Kemp, III President of MSDW Distributors.
Senior Vice President

Anita H. Kolleeny Vice President of various Morgan Stanley Dean
Senior Vice President Witter Funds.
and Director of Sector
Rotation

Jonathan R. Page Vice President of various Morgan Stanley Dean
Senior Vice President Witter Funds.
and Director of the
Money Market Group

Ira N. Ross Vice President of various Morgan Stanley Dean
Senior Vice President Witter Funds.

Guy G. Rutherfurd, Jr. Vice President of various Morgan Stanley Dean
Senior Vice President Witter Funds.
and Director of the
Growth Group

Rochelle G. Siegel Vice President of various Morgan Stanley Dean
Senior Vice President Witter Funds.

James Solloway Jr.
Senior Vice President

<PAGE>

Katherine H. Stromberg Vice President of various Morgan Stanley Dean
Senior Vice President Witter Funds.

Paul D. Vance Vice President of various Morgan Stanley Dean
Senior Vice President Witter Funds.
and Director of the
Growth and Income Group

Elizabeth A. Vetell
Senior Vice President
and Director of Shareholder
Communication

James F. Willison Vice President of various Morgan Stanley Dean
Senior Vice President Witter Funds.
and Director of the
Tax-Exempt Fixed
Income Group

Raymond A. Basile
First Vice President

Thomas F. Caloia First Vice President and Assistant Treasurer of
First Vice President MSDW Services; Assistant Treasurer of MSDW
and Assistant Distributors; Treasurer and Chief Financial and
Accounting Treasurer Officer of the Morgan Stanley Dean Witter Funds.

Thomas Chronert
First Vice President

Richard Colville First Vice President and Controller of MSDW
First Vice President Services; Assistant Treasurer of MSDW Distributors;
and Controller First Vice President and Treasurer of MSDW Trust.

Marilyn K. Cranney Assistant Secretary of DWR; First Vice President
First Vice President and Assistant Secretary of MSDW Services; Assistant
and Assistant Secretary Secretary of MSDW Distributors and the Morgan
Stanley Dean Witter Funds.

Salvatore DeSteno First Vice President of MSDW Services.
First Vice President

Peter W. Gurman
First Vice President

David Johnson
First Vice President

<PAGE>

Stanley Kapica
First Vice President

Douglas J. Ketterer
First Vice President

Todd Lebo First Vice President and Assistant Secretary of
First Vice President and MSDW Services; Assistant Secretary of MSDW
Assistant Secretary Distributors and the Morgan Stanley Dean Witter
Funds.

Lou Anne D. McInnis First Vice President and Assistant Secretary of
First Vice President and MSDW Services; Assistant Secretary of MSDW
Assistant Secretary Distributors and the Morgan Stanley Dean Witter
Funds.

Carsten Otto First Vice President and Assistant Secretary of
First Vice President MSDW Services; Assistant Secretary of MSDW
and Assistant Secretary Distributors and the Morgan Stanley Dean Witter
Funds.

Carl F. Sadler
First Vice President

Ruth Rossi First Vice President and Assistant Secretary of
First Vice President and MSDW Services; Assistant Secretary of MSDW
Assistant Secretary Distributors and the Morgan Stanley Dean Witter
Funds.

James P. Wallin
First Vice President

Robert Abreu
Vice President

Dale Albright
Vice President

Joan G. Allman
Vice President

Andrew Arbenz Vice President of Morgan Stanley Dean Witter Global
Vice President Utilities Fund.

Sean Aurigemma
Vice President

Armon Bar-Tur Vice President of various Morgan Stanley Dean
Vice President Witter Funds.

<PAGE>

Thomas A. Bergeron
Vice President

Philip Bernstein
Vice President

Dale Boettcher
Vice President

Michelina Calandrella
Vice President

Ronald Caldwell
Vice President

Joseph Cardwell
Vice President

Liam Carroll
Vice President

Philip Casparius
Vice President

Annette Celenza
Vice President

Aaron Clark Vice President of Morgan Stanley Dean Witter Market
Vice President Leader Trust

William Connerly
Vice President

Virginia Connors
Vice President

Michael J. Davey
Vice President

David Dineen Vice President of various Morgan Stanley Dean
Vice President Witter Funds.

June Ewers
Vice President

Jeffrey D. Geffen Vice President of Morgan Stanley Dean Witter U.S.
Vice President Government Securities Trust

<PAGE>

Sandra Gelpieryn
Vice President

Charmaine George
Vice President

Michael Geringer
Vice President

Gail Gerrity Burke
Vice President

Peter Gewirtz
Vice President

Mina Gitsevich
Vice President

Ellen Gold
Vice President

Amy Golub
Vice President

Stephen Greenhut
Vice President

Joan Hamilton
Vice President

Trey Hancock
Vice President

Matthew T. Haynes Vice President of various Morgan Stanley Dean
Vice President Witter Funds.

Peter Hermann Jr. Vice President of various Morgan Stanley Dean
Vice President Witter Funds.

David T. Hoffman
Vice President

Thomas G. Hudson II
Vice President

<PAGE>

Linda Jones
Vice President

Norman Jones
Vice President

Kevin Jung Vice President of various Morgan Stanley Dean
Vice President Witter Funds.

Carol Espejo-Kane
Vice President

Nancy Karole Kennedy
Vice President

Paula LaCosta Vice President of various Morgan Stanley Dean
Vice President Witter Funds.

Kimberly LaHart
Vice President

Thomas Lawlor
Vice President

Lester Lay
Vice President

Phuong Le
Vice President

Gerard J. Lian Vice President of various Morgan Stanley Dean
Vice President Witter Funds.

Cameron J. Livingstone
Vice President

Nancy Login Cole
Vice President

Sharon Loguercio
Vice President

Stephanie Lovinger
Vice President

Steven MacNamara
Vice President

<PAGE>

Catherine Maniscalco Vice President of various Morgan Stanley Dean
Vice President Witter Funds.

Peter R. McDowell
Vice President

Albert McGarity
Vice President

Teresa McRoberts Vice President of various Morgan Stanley Dean
Vice President Witter Funds.

Mark Mitchell
Vice President

Thomas Moore
Vice President

Julie Morrone Vice President of various Morgan Stanley Dean
Vice President Witter Funds.

Mary Beth Mueller
Vice President

David Myers Vice President of Morgan Stanley Dean Witter
Vice President Natural Resource Development Securities Inc.

James Nash
Vice President

Daniel Niland
Vice President

Richard Norris
Vice President

Hilary A. O'Neill
Vice President

Steven Orlov
Vice President

Mori Paulsen
Vice President

Anne Pickrell
Vice President

<PAGE>

Reginald Rigaud
Vice President

Frances Roman
Vice President

Dawn Rorke
Vice President

John Roscoe Vice President of various Morgan Stanley Dean
Vice President Witter Funds.

Hugh Rose
Vice President

Robert Rossetti Vice President of Morgan Stanley Dean Witter
Vice President Competitive Edge Fund.

Sally Sancimino Vice President of various Morgan Stanley Dean
Vice President Witter Funds.

Deborah Santaniello
Vice President

Patrice Saunders
Vice President

Donna Savoca
Vice President

Howard A. Schloss Vice President of Morgan Stanley Dean Witter
Vice President Federal Securities Trust.

Alison M. Sharkey
Vice President

Peter J. Seeley Vice President of various Morgan Stanley Dean
Vice President Witter Funds.

Ronald B. Silvestri Vice President of various Morgan Stanley Dean
Vice President Witter Funds.

Herbert Simon
Vice President

<PAGE>

Martha Slezak
Vice President

Frank Smith
Vice President

Otha Smith
Vice President

Stuart Smith
Vice President

Robert Stearns
Vice President

Naomi Stein
Vice President

William Stevens
Vice President

Michael Strayhorn
Vice President

Marybeth Swisher
Vice President

Michael Thayer
Vice President

Bradford Thomas
Vice President

Barbara Toich
Vice President

Robert Vanden Assem
Vice President

Frank Vindigni
Vice President

David Walsh
Vice President

Alice Weiss Vice President of various Morgan Stanley Dean
Vice President Witter Funds.

<PAGE>

The principal address of MSDW Advisors, MSDW Services, MSDW Distributors,
DWR, and the Morgan Stanley Dean Witter Funds is Two World Trade Center, New
York, New York 10048. The principal address of MSDW is 1585 Broadway, New York,
New York 10036. The principal address of MSDW Trust is 2 Harborside Financial
Center, Jersey City, New Jersey 07311.

Item 27. Principal Underwriters

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

<PAGE>

(33) Morgan Stanley Dean Witter Intermediate Income Securities
(34) Morgan Stanley Dean Witter International Fund
(35) Morgan Stanley Dean Witter International SmallCap Fund
(36) Morgan Stanley Dean Witter Japan Fund
(37) Morgan Stanley Dean Witter Latin American Growth Fund
(38) Morgan Stanley Dean Witter Limited Term Municipal Trust
(39) Morgan Stanley Dean Witter Liquid Asset Fund Inc.
(40) Morgan Stanley Dean Witter Market Leader Trust
(41) Morgan Stanley Dean Witter Mid-Cap Equity Trust
(42) Morgan Stanley Dean Witter Multi-State Municipal Series Trust
(43) Morgan Stanley Dean Witter Natural Resource Development Securities Inc.
(44) Morgan Stanley Dean Witter New Discoveries Fund
(45) Morgan Stanley Dean Witter New York Municipal Money Market Trust
(46) Morgan Stanley Dean Witter New York Tax-Free Income Fund
(47) Morgan Stanley Dean Witter Next Generation Trust
(48) Morgan Stanley Dean Witter North American Government Income Trust
(49) Morgan Stanley Dean Witter Pacific Growth Fund Inc.
(50) Morgan Stanley Dean Witter Prime Income Trust
(51) Morgan Stanley Dean Witter Real Estate Fund
(52) Morgan Stanley Dean Witter S&P 500 Index Fund
(53) Morgan Stanley Dean Witter S&P 500 Select Fund
(54) Morgan Stanley Dean Witter Short-Term Bond Fund
(55) Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust
(56) Morgan Stanley Dean Witter Small Cap Growth Fund
(57) Morgan Stanley Dean Witter Special Value Fund
(58) Morgan Stanley Dean Witter Strategist Fund
(59) Morgan Stanley Dean Witter Tax-Exempt Securities Trust
(60) Morgan Stanley Dean Witter Tax-Free Daily Income Trust
(61) Morgan Stanley Dean Witter Tax-Managed Growth Fund
(62) Morgan Stanley Dean Witter Technology Fund
(63) Morgan Stanley Dean Witter Total Market Index Fund
(64) Morgan Stanley Dean Witter Total Return Trust
(65) Morgan Stanley Dean Witter U.S. Government Money Market Trust
(66) Morgan Stanley Dean Witter U.S. Government Securities Trust
(67) Morgan Stanley Dean Witter Utilities Fund
(68) Morgan Stanley Dean Witter Value-Added Market Series
(69) Morgan Stanley Dean Witter Value Fund
(70) Morgan Stanley Dean Witter Variable Investment Series
(71) Morgan Stanley Dean Witter World Wide Income Trust

<PAGE>

(b) The following information is given regarding directors and officers of MSDW
Distributors not listed in Item 26 above. The principal address of MSDW
Distributors is Two World Trade Center, New York, New York 10048. Other than
Messrs. Higgins and Purcell, who are Trustees of the Registrant, none of the
following persons has any position or office with the Registrant.

Name Positions and Office with MSDW Distributors
---- -------------------------------------------

James F. Higgins Director

Philip J. Purcell Director

John Schaeffer Director

Charles Vadala Senior Vice President and Financial Principal.

Item 28. Location of Accounts and Records

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

Item 29. Management Services

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

Item 30. Undertakings

Registrant hereby undertakes to furnish each person to whom a prospectus is
delivered with a copy of the Registrant's latest annual report to shareholders,
upon request and without charge.

<PAGE>

SIGNATURES
----------

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York
and State of New York on the 27th day of October, 2000.

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND

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

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

Signatures Title Date
---------- ----- ----

(1) Principal Executive Officer Chief Executive Officer,
Trustee and Chairman
By /s/ Charles A. Fiumefreddo 10/27/00
--------------------------------
Charles A. Fiumefreddo

(2) Principal Financial Officer Treasurer and Principal
Accounting Officer

By /s/ Thomas F. Caloia 10/27/00
--------------------------------
Thomas F. Caloia

(3) Majority of the Trustees

Charles A. Fiumefreddo (Chairman)
Philip J. Purcell
James F. Higgins

By /s/ Barry Fink 10/27/00
--------------------------------
Barry Fink
Attorney-in-Fact

Michael Bozic Manuel H. Johnson
Edwin J. Garn Michael E. Nugent
Wayne E. Hedien John L. Schroeder

By /s/ David M. Butowsky 10/27/00
--------------------------------
David M. Butowsky
Attorney-in-Fact

<PAGE>

MORGAN STANLEY DEAN WITTER S&P 500 INDEX FUND

EXHIBIT INDEX

8(a). Amended and Restated Transfer Agency and Service Agreement.

10(a). Consent of Independent Auditors

10(b). Consent of PricewaterhouseCoopers LLP.

15. Amended and Restated Multiple Class Plan pursuant to Rule 18f-3.

16(a). Code of Ethics of Morgan Stanley Dean Witter Advisors,Inc., Morgan
Stanley Dean Witter Services Company Inc. and Morgan Stanley Dean
Witter Distributors, Inc.

16(b). Code of Ethics of the Morgan Stanley Dean Witter Funds.

Other. Power of Attorney for James F. Higgins.