<PAGE> 1
MORGAN STANLEY DEAN WITTER EQUITY FUND
Two World Trade Center, New York, New York 10048
LETTER TO THE SHAREHOLDERS May 31, 2000
DEAR SHAREHOLDER:
The 12-month period ended May 31, 2000, began with a reversal of the significant
domestic economic stimuli in place following the aftermath of the Asian crisis
of 1997-1998. Interest rates and oil prices, which had both dropped
significantly throughout 1998, had started to climb by the spring of 1999. This
change was in response to almost unprecedented domestic growth combined with a
revitalized global economy. The Federal Reserve Board also began to apply
restraint in the face of inflationary pressures brought on by record low
unemployment, rising commodity prices and historic peaks of consumer confidence.
In an attempt to slow the economy, the Federal Reserve raised the federal funds
rate six times, to 6.50 percent, a nine-year high. Because of the inherent lag
of these Fed actions, it is only recently that the economy has begun to show
signs of a slowdown. At this point, the markets appear to be discounting a
reasonably successful soft landing, with little additional Fed tightening
anticipated for the remainder of the calendar year.
In the period under review, the stock market, as measured by the Standard &
Poor's 500 Composite Stock Price Index (S&P 500) returned 10.47 percent. The
market's total return was dominated by technology issues across all
capitalization ranges. Without the technology sector, the total returns of the
market were negative for the year. Just as technology propelled the market
upward for much of the year, it likewise dragged it down in the last few months.
For the first five months of 2000, the S&P 500 was off nearly three percentage
points and technology, accounting for less than one-third of the index's market
weight, contributed more than half of the index's decline.
PERFORMANCE AND PORTFOLIO STRATEGY
For the 12-month period ended May 31, 2000, Morgan Stanley Dean Witter Equity
Fund's Class A, B, C and D shares returned 10.12 percent, 9.32 percent, 9.31
percent and 10.43 percent, respectively. During the same period, the S&P 500
returned 10.47 percent. The performance of the four classes varies because of
differing expenses. Total return figures
<PAGE> 2
MORGAN STANLEY DEAN WITTER EQUITY FUND
LETTER TO THE SHAREHOLDERS May 31, 2000, continued
assume the reinvestment of all distributions but do not reflect the deduction of
any applicable sales charges.
Solid performance in the dominant investment themes discussed below produced
good results for the year. Performance was inhibited by the portfolio's stock
selection within three market sectors: heavy industry, health care and financial
services.
According to Miller Anderson & Sherrerd (MAS), the Fund's sub-advisor, the
dominant investment themes during the year were within technology and
telecommunications (i.e., internet backbone, telecom equipment and e-business
software services), energy (i.e., oil-drilling equipment and services, such as
Smith International and Nabors Industries) and consumer services (principally
broadcast/media companies like AT&T-Liberty Media and News Corp.). These
strategies were successfully executed while the market was receptive and
produced nearly 70 percent of the portfolio's return for the year. Technology,
though underweighted on average for the year, was an especially effective
strategy, producing more than 45 percent of the total return for the portfolio.
Among the Fund's holdings in this sector were Qualcomm, JDS Uniphase, Cisco
Systems and Oracle.
Over the last four months of the fiscal year, the portfolio adopted a more
defensive posture. By May 31, 2000, technology and consumer services weightings
had been trimmed back to moderately underweighted core positions due to
valuation concerns. Among the Fund's three 1999-2000 overweighted strategies,
only the energy theme has remained substantially intact. MAS has maintained the
portfolio's energy overweighting on the conviction that the equipment
order/deployment cycle of the energy majors is not yet exhausted and will
further benefit the supplier/service regions of the energy sector. Over this
recent four-month period of market consolidation, overweighted positions among
heavy industry companies have been further built in companies that MAS believes
are demonstrating improved abilities to compete in the new economy, such as Tyco
International and Dover. Complementing these value-sector strategies are modest
overweightings in defensive growth sectors (e.g., health care, beverages,
personal products and retailing), which MAS believes are likely to benefit if
there is reduced interest among growth investors in technology sector
volatility.
LOOKING AHEAD
MAS, along with all other market participants (including the Federal Reserve),
is evaluating the response of the economy to over eighteen months of rising
interest rates and a more restrictive monetary policy. The possibility of a
slowdown has already had a large impact on the market in terms of sector shifts
and volatility. Even as value sector investors are feeling more optimistic about
near-term
2
<PAGE> 3
MORGAN STANLEY DEAN WITTER EQUITY FUND
LETTER TO THE SHAREHOLDERS May 31, 2000, continued
signs that this year's rotation to value will be more durable than last year's,
opportunities in the newly revalued technology space continue to remain
alluring. MAS believes that the Fund has a distinct advantage of being able to
position itself in any type of market. It is style balanced and diversified,
comprised as well of reasonably valued stocks of companies with attractive
earnings dynamics.
We appreciate your ongoing support of Morgan Stanley Dean Witter Equity Fund and
look forward to continuing to serve your investment needs.
<TABLE>
<S> <C>
Very truly yours,
/s/ CHARLES A. FIUMEFREDDO /s/ MITCHELL M. MERIN
CHARLES A. FIUMEFREDDO MITCHELL M. MERIN
Chairman of the Board President
</TABLE>
3
<PAGE> 4
MORGAN STANLEY DEAN WITTER EQUITY FUND
FUND PERFORMANCE May 31, 2000
GROWTH OF $10,000
($ in Thousands)
[LINE GRAPH]
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS D S&P 500(4)
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
July 29, 1998 9475 10000 10000 10000 10000
May 31, 1999 11143 11690 11710 11790 11720
May 31, 2000 12270(3) 12380(3) 12800(3) 13020(3) 12947
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RETURNS. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE. WHEN YOU SELL FUND SHARES, THEY MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE FOR CLASS A, CLASS B, CLASS C
AND CLASS D SHARES WILL VARY DUE TO DIFFERENCES IN SALES CHARGES AND EXPENSES.
AVERAGE ANNUAL TOTAL RETURNS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A SHARES*
----------------------------------------------
<S> <C> <C>
PERIOD ENDED 5/31/00
-------------------------
1 Year 10.12%(1) 4.34%(2)
Since Inception (7/29/98) 15.09%(1) 11.76%(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS C SHARES+
----------------------------------------------
<S> <C> <C>
PERIOD ENDED 5/31/00
-------------------------
1 Year 9.31%(1) 8.31%(2)
Since Inception (7/29/98) 14.36%(1) 14.36%(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS B SHARES**
----------------------------------------------
<S> <C> <C>
PERIOD ENDED 5/31/00
-------------------------
1 Year 9.32%(1) 4.32%(2)
Since Inception (7/29/98) 14.26%(1) 12.30%(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS D SHARES#
----------------------------------------------
<S> <C> <C>
PERIOD ENDED 5/31/00
-------------------------
1 Year 10.43%(1)
Since Inception (7/29/98) 15.42%(1)
</TABLE>
---------------------
<TABLE>
<S> <C>
(1) Figure shown assumes reinvestment of all distributions and
does not reflect the deduction of any sales charges.
(2) Figure shown assumes reinvestment of all distributions and
the deduction of the maximum applicable sales charge. See
the Fund's current prospectus for complete details on fees
and sales charges.
(3) Closing value assuming a complete redemption on May 31,
2000.
(4) The Standard & Poor's 500 Composite Stock Price Index (S&P
500) is a broad-based index, the performance of which is
based on the average performance of 500 widely held common
stocks. The performance of the index does not include any
expenses, fees or charges. The Index is unmanaged and should
not be considered an investment.
* The maximum front-end sales charge for Class A is 5.25%.
** The maximum contingent deferred sales charge (CDSC) for
Class B is 5.0%. The CDSC declines to 0% after six years.
+ The maximum contingent deferred sales charge for Class C
shares is 1% for shares redeemed within one year of
purchase.
# Class D shares have no sales charge.
</TABLE>
4
<PAGE> 5
MORGAN STANLEY DEAN WITTER EQUITY FUND
PORTFOLIO OF INVESTMENTS May 31, 2000
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
-------------------------------------------------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS (96.7%)
Alcoholic Beverages (0.9%)
49,200 Anheuser-Busch Companies,
Inc. $ 3,813,000
------------
Aluminum (0.2%)
15,222 Alcoa, Inc. ................. 889,536
------------
Beverages - Non-Alcoholic (1.9%)
88,900 Coca Cola Co. ............... 4,745,038
75,100 PepsiCo, Inc. ............... 3,055,631
------------
7,800,669
------------
Biotechnology (1.3%)
37,100 Amgen Inc.*.................. 2,360,488
29,000 Genentech, Inc.*............. 3,113,875
------------
5,474,363
------------
Building Materials/DIY Chains (1.0%)
84,650 Home Depot, Inc. (The)....... 4,131,978
------------
Building Products (0.5%)
104,800 Masco Corp. ................. 2,063,250
------------
Cable Television (1.6%)
17,600 AT&T Corp. - Liberty Media
Group (Class A)*............ 779,900
34,700 Comcast Corp. (Class A
Special)*................... 1,314,263
28,000 EchoStar Communications Corp.
(Class A)*.................. 1,118,250
51,700 MediaOne Group, Inc.*........ 3,454,206
------------
6,666,619
------------
Cellular Telephone (1.0%)
39,800 Sprint Corp. (PCS Group)*.... 2,208,900
40,950 Vodafone AirTouch PLC (ADR)
(United Kingdom)............ 1,876,022
------------
4,084,922
------------
Clothing/Shoe/Accessory Stores (1.2%)
140,800 Gap, Inc. (The).............. 4,936,800
------------
Computer Communications (2.4%)
175,800 Cisco Systems, Inc.*......... 10,009,613
------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
-------------------------------------------------------
<C> <S> <C>
Computer Software (5.3%)
21,900 Citrix Systems, Inc.*........ $ 1,152,488
58,100 Computer Associates
International, Inc. ........ 2,992,150
167,700 Microsoft Corp.*............. 10,481,249
92,900 Oracle Corp.*................ 6,671,381
6,500 Veritas Software Corp.*...... 756,844
------------
22,054,112
------------
Computer/Video Chains (1.1%)
21,600 Best Buy Co., Inc.*.......... 1,382,400
27,100 Circuit City Stores, Inc. -
Circuit City Group.......... 1,349,919
45,300 RadioShack Corp. ............ 1,922,419
------------
4,654,738
------------
Construction/Agricultural Equipment/Trucks
(0.8%)
46,100 Caterpillar, Inc. ........... 1,763,325
35,300 Deere & Co. ................. 1,467,156
------------
3,230,481
------------
Contract Drilling (3.0%)
89,700 Global Marine, Inc.*......... 2,539,631
105,400 Nabors Industries, Inc.*..... 4,532,200
131,000 R & B Falcon Corp.*.......... 3,070,313
56,800 Santa Fe International
Corp. ...................... 2,204,550
------------
12,346,694
------------
Discount Chains (2.6%)
100,900 Costco Wholesale Corp.*...... 3,222,494
128,900 Wal-Mart Stores, Inc......... 7,427,862
------------
10,650,356
------------
Diversified Electronic Products (0.2%)
10,300 JDS Uniphase Corp.*.......... 905,756
------------
Diversified Financial Services (3.4%)
101,000 American Express Co. ........ 5,435,062
139,625 Citigroup, Inc. ............. 8,682,929
------------
14,117,991
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE> 6
MORGAN STANLEY DEAN WITTER EQUITY FUND
PORTFOLIO OF INVESTMENTS May 31, 2000, continued
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
-------------------------------------------------------
<C> <S> <C>
Diversified Manufacturing (4.3%)
50,300 Dover Corp. ................. $ 2,338,950
98,400 Honeywell International,
Inc. ....................... 5,381,250
31,400 Minnesota Mining &
Manufacturing Co. .......... 2,692,550
158,000 Tyco International Ltd.
(Bermuda)................... 7,435,874
------------
17,848,624
------------
Drugstore Chains (0.5%)
49,700 CVS Corp. ................... 2,161,950
------------
E.D.P. Peripherals (0.9%)
23,900 EMC Corp.*................... 2,779,869
12,500 Network Appliance, Inc.*..... 806,250
------------
3,586,119
------------
E.D.P. Services (0.9%)
59,600 Electronic Data Systems
Corp. ...................... 3,833,025
------------
Electronic Data Processing (4.7%)
182,000 Compaq Computer Corp. ....... 4,777,499
233,900 Dell Computer Corp.*......... 10,086,937
19,800 International Business
Machines Corp. ............. 2,124,788
34,600 Sun Microsystems, Inc.*...... 2,651,225
------------
19,640,449
------------
Electronic Production Equipment (0.7%)
27,300 Applied Materials, Inc.*..... 2,279,550
17,600 Celestica, Inc.*............. 819,500
------------
3,099,050
------------
Finance Companies (0.9%)
10,600 Capital One Financial
Corp. ...................... 500,850
58,400 Freddie Mac.................. 2,598,800
21,900 SLM Holding Corp. ........... 737,756
------------
3,837,406
------------
Food Chains (0.5%)
46,000 Safeway Inc.*................ 2,121,750
------------
Hospital/Nursing Management (1.4%)
129,900 HCA - The Healthcare Corp.... 3,507,300
85,500 Tenet Healthcare Corp.*...... 2,190,938
------------
5,698,238
------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
-------------------------------------------------------
<C> <S> <C>
Insurance Brokers/Services (1.0%)
36,500 AON Corp. ................... $ 1,282,063
26,600 Marsh & McLennan Companies,
Inc. ....................... 2,927,662
------------
4,209,725
------------
Integrated Oil Companies (3.0%)
55,800 Exxon Mobil Corp. ........... 4,648,838
84,500 Royal Dutch Petroleum Co.
(Netherlands)............... 5,275,969
42,300 Texaco, Inc. ................ 2,429,606
------------
12,354,413
------------
Internet Services (1.7%)
90,800 America Online, Inc.*........ 4,812,400
19,500 Yahoo! Inc.*................. 2,203,500
------------
7,015,900
------------
Investment Bankers/Brokers/Services (1.0%)
26,800 Merrill Lynch & Co., Inc. ... 2,643,150
55,950 Schwab (Charles) Corp. ...... 1,608,563
------------
4,251,713
------------
Life Insurance (0.3%)
19,900 American General Corp. ...... 1,274,844
------------
Major Banks (2.5%)
65,400 Bank of America Corp. ....... 3,633,788
89,800 Bank of New York Co.,
Inc. ....................... 4,214,987
29,900 Chase Manhattan Corp.
(The)....................... 2,233,156
2,100 SunTrust Banks, Inc. ........ 125,475
------------
10,207,406
------------
Major Chemicals (1.2%)
34,700 Du Pont (E.I.) de Nemours &
Co., Inc. .................. 1,700,300
100,000 Rohm & Haas Co. ............. 3,412,500
------------
5,112,800
------------
Major Pharmaceuticals (7.2%)
44,700 American Home Products
Corp. ...................... 2,408,213
26,000 Bristol-Myers Squibb Co. .... 1,431,625
30,400 Johnson & Johnson............ 2,720,800
39,000 Lilly (Eli) & Co. ........... 2,968,875
50,200 Merck & Co., Inc. ........... 3,746,174
54,700 Pfizer, Inc. ................ 2,437,569
67,700 Pharmacia Corp. ............. 3,516,169
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE> 7
MORGAN STANLEY DEAN WITTER EQUITY FUND
PORTFOLIO OF INVESTMENTS May 31, 2000, continued
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
-------------------------------------------------------
<C> <S> <C>
48,900 Schering-Plough Corp. ....... $ 2,365,538
68,400 Warner-Lambert Co. .......... 8,353,349
------------
29,948,312
------------
Major U.S. Telecommunications (5.3%)
70,559 AT&T Corp. .................. 2,447,515
70,900 Bell Atlantic Corp. ......... 3,748,838
156,472 SBC Communications, Inc. .... 6,835,870
80,000 Sprint Corp. (FON Group)..... 4,840,000
113,103 WorldCom, Inc.*.............. 4,248,431
------------
22,120,654
------------
Media Conglomerates (2.9%)
55,500 Disney (Walt) Co. ........... 2,341,406
108,400 News Corporation Ltd. (The)
(Pref.) (ADR) (Australia)... 4,247,926
44,300 Time Warner Inc. ............ 3,496,931
31,600 Viacom, Inc. (Class B)....... 1,959,200
------------
12,045,463
------------
Medical Equipment & Supplies (0.6%)
46,900 Medtronic, Inc. ............. 2,421,213
------------
Medical Specialties (1.8%)
27,800 Baxter International,
Inc. ....................... 1,848,700
52,700 Guidant Corp.*............... 2,667,938
55,700 PE Corporation-PE Biosystems
Group....................... 3,091,350
------------
7,607,988
------------
Medical/Nursing Services (0.1%)
32,700 Healthsouth Corp.*........... 210,506
------------
Mid-Sized Banks (0.7%)
110,600 Firstar Corp. ............... 2,827,213
------------
Military/Gov't/Technical (0.1%)
5,544 General Motors Corp. (Class
H)*......................... 545,738
------------
Motor Vehicles (0.5%)
19,500 Ford Motor Co. .............. 946,969
15,794 General Motors Corp.......... 1,113,477
------------
2,060,446
------------
Movies/Entertainment (0.0%)
5,900 Liberty Digital, Inc. (Class
A)*......................... 185,850
------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
-------------------------------------------------------
<C> <S> <C>
Multi-Line Insurance (1.3%)
49,000 American International Group,
Inc. ....................... $ 5,515,563
------------
Multi-Sector Companies (4.3%)
337,300 General Electric Co. ........ 17,750,412
------------
Oil/Gas Transmission (0.6%)
43,100 Coastal Corp. ............... 2,645,263
------------
Oilfield Services/Equipment (1.7%)
108,100 Halliburton Co. ............. 5,513,100
21,200 Smith International, Inc.*... 1,676,125
------------
7,189,225
------------
Other Telecommunications (0.8%)
48,400 Global Crossing Ltd.
(Bermuda)*.................. 1,213,025
53,900 Qwest Communications
International, Inc.*........ 2,280,644
------------
3,493,669
------------
Package Goods/Cosmetics (2.3%)
112,100 Avon Products, Inc. ......... 4,631,131
50,900 Kimberly-Clark Corp. ........ 3,079,450
29,800 Procter & Gamble Co. ........ 1,981,700
------------
9,692,281
------------
Packaged Foods (0.6%)
65,200 General Mills, Inc. ......... 2,587,625
------------
Semiconductors (6.1%)
142,200 Intel Corp. ................. 17,730,562
13,400 LSI Logic Corp.*............. 706,013
15,600 National Semiconductor
Corp.*...................... 838,500
79,800 Texas Instruments, Inc. ..... 5,765,549
------------
25,040,624
------------
Specialty Chemicals (0.5%)
178,300 Grace (W. R.) & Co.*......... 2,239,894
------------
Specialty Insurers (0.4%)
28,300 XL Capital Ltd. (Class A)
(Bermuda)................... 1,683,850
------------
Telecommunications Equipment (4.5%)
16,000 Corning Inc. ................ 3,094,999
53,500 Lucent Technologies Inc. .... 3,069,563
16,805 Motorola, Inc. .............. 1,575,469
26,600 Nokia Corp. (ADR)
(Finland)................... 1,383,200
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE> 8
MORGAN STANLEY DEAN WITTER EQUITY FUND
PORTFOLIO OF INVESTMENTS May 31, 2000, continued
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
-------------------------------------------------------
<C> <S> <C>
129,400 Nortel Networks Corp. ....... $ 7,028,037
37,600 QUALCOMM Inc.*............... 2,493,350
------------
18,644,618
------------
Tobacco (0.5%)
84,400 Philip Morris Companies,
Inc......................... 2,204,950
------------
TOTAL COMMON AND PREFERRED
STOCKS
(Identified Cost
$373,501,072)................ 402,745,647
------------
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS
---------
<S> <C>
SHORT-TERM INVESTMENT (a) (2.6%)
U.S. GOVERNMENT AGENCY
$11,000 Federal Home Loan Banks 6.30%
due 06/01/00
(Amortized Cost
$11,000,000)................ 11,000,000
------------
<CAPTION>
VALUE
------------------------------------------------------------------------
<S> <C>
TOTAL INVESTMENTS
(Identified Cost $384,501,072) (b)...... 99.3% $413,745,647
OTHER ASSETS IN
EXCESS OF LIABILITIES................... 0.7 3,002,029
------ ------------
NET ASSETS............................. 100.0% $416,747,676
===== ============
</TABLE>
---------------------
<TABLE>
<C> <S>
ADR American Depository Receipt.
* Non-income producing security.
(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 identified cost. The
aggregate gross unrealized appreciation is
$46,754,635 and the aggregate gross unrealized
depreciation is $17,510,060, resulting in net
unrealized appreciation of $29,244,575.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE> 9
MORGAN STANLEY DEAN WITTER EQUITY FUND
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
May 31, 2000
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $384,501,072)............................. $413,745,647
Cash........................................................ 61,559
Receivable for:
Investments sold........................................ 7,165,811
Shares of beneficial interest sold...................... 1,027,780
Dividends............................................... 306,867
Prepaid expenses and other assets........................... 97,924
------------
TOTAL ASSETS............................................ 422,405,588
------------
LIABILITIES:
Payable for:
Investments purchased................................... 4,454,875
Shares of beneficial interest repurchased............... 442,660
Plan of distribution fee................................ 362,608
Investment management fee............................... 319,462
Accrued expenses and other payables......................... 78,307
------------
TOTAL LIABILITIES....................................... 5,657,912
------------
NET ASSETS.............................................. $416,747,676
============
COMPOSITION OF NET ASSETS:
Paid-in-capital............................................. $342,813,456
Net unrealized appreciation................................. 29,244,575
Accumulated undistributed net realized gain................. 44,689,645
------------
NET ASSETS.............................................. $416,747,676
============
CLASS A SHARES:
Net Assets.................................................. $12,482,785
Shares Outstanding (unlimited authorized, $.01 par value)... 968,946
NET ASSET VALUE PER SHARE............................... $12.88
============
MAXIMUM OFFERING PRICE PER SHARE,
(net asset value plus 5.54% of net asset value)........ $13.59
============
CLASS B SHARES:
Net Assets.................................................. $374,215,095
Shares Outstanding (unlimited authorized, $.01 par value)... 29,452,428
NET ASSET VALUE PER SHARE............................... $12.71
============
CLASS C SHARES:
Net Assets.................................................. $24,710,700
Shares Outstanding (unlimited authorized, $.01 par value)... 1,941,238
NET ASSET VALUE PER SHARE............................... $12.73
============
CLASS D SHARES:
Net Assets.................................................. $5,339,096
Shares Outstanding (unlimited authorized, $.01 par value)... 412,376
NET ASSET VALUE PER SHARE............................... $12.95
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE> 10
MORGAN STANLEY DEAN WITTER EQUITY FUND
FINANCIAL STATEMENTS, continued
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the year ended May 31, 2000
NET INVESTMENT LOSS:
<S> <C>
INCOME
Dividends (net of $31,740 foreign withholding tax).......... $ 3,032,216
Interest.................................................... 762,698
------------
TOTAL INCOME............................................ 3,794,914
------------
EXPENSES
Plan of distribution fee (Class A shares)................... 26,899
Plan of distribution fee (Class B shares)................... 3,308,717
Plan of distribution fee (Class C shares)................... 200,582
Investment management fee................................... 3,088,832
Transfer agent fees and expenses............................ 382,622
Shareholder reports and notices............................. 75,767
Professional fees........................................... 66,257
Registration fees........................................... 66,253
Custodian fees.............................................. 41,612
Trustees' fees and expenses................................. 12,564
Offering costs.............................................. 7,533
Other....................................................... 27,969
------------
TOTAL EXPENSES.......................................... 7,305,607
------------
NET INVESTMENT LOSS..................................... (3,510,693)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain........................................... 48,901,924
Net unrealized appreciation................................. (14,053,513)
------------
NET GAIN................................................ 34,848,411
------------
NET INCREASE................................................ $ 31,337,718
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE> 11
MORGAN STANLEY DEAN WITTER EQUITY FUND
FINANCIAL STATEMENTS, continued
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD
FOR THE YEAR JULY 29, 1998*
ENDED THROUGH
MAY 31, 2000 MAY 31, 1999
-------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss................................... $ (3,510,693) $ (1,293,228)
Net realized gain..................................... 48,901,924 2,324,956
Net unrealized appreciation........................... (14,053,513) 43,298,088
------------ ------------
NET INCREASE...................................... 31,337,718 44,329,816
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED GAIN:
Class A shares........................................ (56,992) --
Class B shares........................................ (1,843,858) --
Class C shares........................................ (108,119) --
Class D shares........................................ (5,936) --
------------ ------------
TOTAL DISTRIBUTIONS............................... (2,014,905) --
------------ ------------
Net increase from transactions in shares of
beneficial interest.................................. 90,334,680 252,660,367
------------ ------------
NET INCREASE...................................... 119,657,493 296,990,183
NET ASSETS:
Beginning of period................................... 297,090,183 100,000
------------ ------------
END OF PERIOD..................................... $416,747,676 $297,090,183
============ ============
</TABLE>
---------------------
* Commencement of operations.
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE> 12
MORGAN STANLEY DEAN WITTER EQUITY FUND
NOTES TO FINANCIAL STATEMENTS May 31, 2000
1. ORGANIZATION AND ACCOUNTING POLICIES
Morgan Stanley Dean Witter Equity 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 total
return. The Fund seeks to achieve its objective by investing at least 65% of its
total assets in equity securities. The Fund was organized as a Massachusetts
business trust on April 6, 1998 and had no operations other than those relating
to organizational matters and the issuance of 2,500 shares of beneficial
interest by each class for $25,000 of each class to Morgan Stanley Dean Witter
Advisors Inc. (the "Investment Manager"), to effect the Fund's initial
capitalization. The Fund commenced operations on July 29, 1998.
The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase and some
Class A shares, and most Class B shares and Class C shares are subject to a
contingent deferred sales charge imposed on shares redeemed within one year, six
years and one year, respectively. Class D shares are not subject to a sales
charge. Additionally, Class A shares, Class B shares and Class C shares incur
distribution expenses.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ from
those estimates.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) an equity security listed or traded on the
New York, American or other domestic or foreign stock exchange is valued at its
latest sale price on that exchange prior to the time when assets are valued; if
there were no sales that day, the security is valued at the latest bid price;
(2) all other portfolio securities for which over-the-counter market quotations
are readily available are valued at the latest available bid price prior to the
time of valuation; (3) when market quotations are not readily available,
including circumstances under which it is determined by the Investment Manager
or Miller Anderson & Sherrerd, LLP (the "Sub-Advisor"), an affiliate of 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
12
<PAGE> 13
MORGAN STANLEY DEAN WITTER EQUITY FUND
NOTES TO FINANCIAL STATEMENTS May 31, 2000, continued
having a maturity date of more than sixty days at time of purchase are valued on
a mark-to-market basis until sixty days prior to 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. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.
E. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to its shareholders on the 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 financial reporting purposes but not for tax purposes are reported as
dividends in excess of net investment income or distributions in excess of net
realized capital gains. To the extent they exceed net investment income and net
realized capital gains for tax purposes, they are reported as distributions of
paid-in-capital.
F. OFFERING COSTS -- The Investment Manager incurred offering costs on behalf of
the Fund in the amount of approximately $116,000 which has been reimbursed for
the full amount thereof. Such expenses were deferred and were fully amortized as
of July 29, 1999.
13
<PAGE> 14
MORGAN STANLEY DEAN WITTER EQUITY FUND
NOTES TO FINANCIAL STATEMENTS May 31, 2000, continued
2. INVESTMENT MANAGEMENT AND SUB-ADVISORY AGREEMENTS
Pursuant to an Investment Management Agreement, the Fund pays the Investment
Manager a management fee, accrued daily and payable monthly, by applying the
annual rate of 0.85% to the net assets of the Fund determined as of the close of
each business day. Effective May 1, 2000, the Agreement was amended to reduce
the annual rate to 0.825% of the portion of daily net assets exceeding $500
million but not exceeding $1 billion; and 0.80% of the portion of daily net
assets in excess of $1 billion.
Under a Sub-Advisory Agreement between the Sub-Advisor and the Investment
Manager, the Sub-Advisor provides the Fund with investment advice and portfolio
management relating to the Fund's investments in securities, subject to the
overall supervision of the Investment Manager. As compensation for its services
provided pursuant to the Sub-Advisory Agreement, the Investment Manager pays the
Sub-Advisor compensation equal to 40% of its monthly compensation.
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 and
Sub-Advisor. 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
$14,681,445 at May 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,
14
<PAGE> 15
MORGAN STANLEY DEAN WITTER EQUITY FUND
NOTES TO FINANCIAL STATEMENTS May 31, 2000, continued
respectively, will not be reimbursed by the Fund through payments in any
subsequent year, except that expenses representing a gross sales credit to
Morgan Stanley Dean Witter Financial Advisors or other selected broker-dealer
representatives may be reimbursed in the subsequent calendar year. For the year
ended May 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 May 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 $121, $802,961 and
$12,889, respectively and received $76,280 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 May 31, 2000 aggregated $726,265,914
and $645,045,654, respectively.
Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager,
Distributor and Sub-Advisor, is the Fund's transfer agent.
5. FEDERAL INCOME TAX STATUS
As of May 31, 2000, the Fund had temporary book/tax differences primarily
attributable to 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, accumulated
undistributed net realized gain was charged $3,528,913, paid-in-capital was
credited $18,220 and net investment loss was credited $3,510,693.
15
<PAGE> 16
MORGAN STANLEY DEAN WITTER EQUITY FUND
NOTES TO FINANCIAL STATEMENTS May 31, 2000, continued
6. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR JULY 29, 1998*
ENDED THROUGH
MAY 31, 2000 MAY 31, 1999
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Sold........................................................ 680,622 $ 8,450,081 986,023 $ 9,815,933
Reinvestment of distributions............................... 4,491 56,008 -- --
Redeemed.................................................... (390,693) (4,809,851) (313,997) (3,248,973)
---------- ------------ ---------- ------------
Net increase - Class A...................................... 294,420 3,696,238 672,026 6,566,960
---------- ------------ ---------- ------------
CLASS B SHARES
Sold........................................................ 11,552,357 142,064,646 26,743,761 266,671,820
Reinvestment of distributions............................... 138,513 1,709,254 -- --
Redeemed.................................................... (5,628,367) (69,821,299) (3,356,336) (33,876,428)
---------- ------------ ---------- ------------
Net increase - Class B...................................... 6,062,503 73,952,601 23,387,425 232,795,392
---------- ------------ ---------- ------------
CLASS C SHARES
Sold........................................................ 1,000,623 12,393,231 1,753,484 17,458,304
Reinvestment of distributions............................... 8,374 103,671 -- --
Redeemed.................................................... (412,853) (5,078,743) (410,890) (4,196,497)
---------- ------------ ---------- ------------
Net increase - Class C...................................... 596,144 7,418,159 1,342,594 13,261,807
---------- ------------ ---------- ------------
CLASS D SHARES
Sold........................................................ 794,026 10,366,417 3,326 36,208
Reinvestment of distributions............................... 397 4,971 -- --
Redeemed.................................................... (387,873) (5,103,706) -- --
---------- ------------ ---------- ------------
Net increase - Class D...................................... 406,550 5,267,682 3,326 36,208
---------- ------------ ---------- ------------
Net increase in Fund........................................ 7,359,617 $ 90,334,680 25,405,371 $252,660,367
========== ============ ========== ============
</TABLE>
---------------------
* Commencement of operations.
16
<PAGE> 17
MORGAN STANLEY DEAN WITTER EQUITY 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 JULY 29, 1998*
ENDED THROUGH
MAY 31, 2000 MAY 31, 1999
-------------------------------------------------------------------------------------------
<S> <C> <C>
CLASS A SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period........................ $11.76 $10.00
------ ------
Income (loss) from investment operations:
Net investment income (loss)............................... (0.03) 0.01
Net realized and unrealized gain........................... 1.22 1.75
------ ------
Total income from investment operations..................... 1.19 1.76
------ ------
Less distributions from net realized gain................... (0.07) --
------ ------
Net asset value, end of period.............................. $12.88 $11.76
====== ======
TOTAL RETURN+............................................... 10.12 % 17.60%(1)
RATIOS TO AVERAGE NET ASSETS(3):
Expenses.................................................... 1.29 % 1.38%(2)
Net investment income (loss)................................ (0.25)% 0.07%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $12,483 $7,933
Portfolio turnover rate..................................... 184 % 80%(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) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE> 18
MORGAN STANLEY DEAN WITTER EQUITY FUND
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR JULY 29, 1998*
ENDED THROUGH
MAY 31, 2000 MAY 31, 1999
-------------------------------------------------------------------------------------------
<S> <C> <C>
CLASS B SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period........................ $11.69 $10.00
------ ------
Income (loss) from investment operations:
Net investment loss........................................ (0.12) (0.07)
Net realized and unrealized gain........................... 1.21 1.76
------ ------
Total income from investment operations..................... 1.09 1.69
------ ------
Less distributions from net realized gain................... (0.07) --
------ ------
Net asset value, end of period.............................. $12.71 $11.69
====== ======
TOTAL RETURN+............................................... 9.32 % 16.90 %(1)
RATIOS TO AVERAGE NET ASSETS(3):
Expenses.................................................... 2.04 % 2.13 %(2)
Net investment loss......................................... (1.00)% (0.68)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $374,215 $273,345
Portfolio turnover rate..................................... 184 % 80 %(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) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE> 19
MORGAN STANLEY DEAN WITTER EQUITY FUND
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR JULY 29, 1998*
ENDED THROUGH
MAY 31, 2000 MAY 31, 1999
-------------------------------------------------------------------------------------------
<S> <C> <C>
CLASS C SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period........................ $11.70 $ 10.00
------ -------
Income (loss) from investment operations:
Net investment loss........................................ (0.12) (0.04)
Net realized and unrealized gain........................... 1.22 1.74
------ -------
Total income from investment operations..................... 1.10 1.70
------ -------
Less distributions from net realized gain................... (0.07) --
------ -------
Net asset value, end of period.............................. $12.73 $ 11.70
====== =======
TOTAL RETURN+............................................... 9.31 % 17.10 %(1)
RATIOS TO AVERAGE NET ASSETS(3):
Expenses.................................................... 2.04 % 1.91 %(2)
Net investment loss......................................... (1.00)% (0.46)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $24,711 $15,744
Portfolio turnover rate..................................... 184 % 80 %(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) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE> 20
MORGAN STANLEY DEAN WITTER EQUITY FUND
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR JULY 29, 1998*
ENDED THROUGH
MAY 31, 2000 MAY 31, 1999
-------------------------------------------------------------------------------------------
<S> <C> <C>
CLASS D SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period........................ $11.79 $10.00
------ ------
Income (loss) from investment operations:
Net investment income (loss)............................... (0.01) 0.03
Net realized and unrealized gain........................... 1.24 1.76
------ ------
Total income from investment operations..................... 1.23 1.79
------ ------
Less distributions from net realized gain................... (0.07) --
------ ------
Net asset value, end of period.............................. $12.95 $11.79
====== ======
TOTAL RETURN+............................................... 10.43% 17.90%(1)
RATIOS TO AVERAGE NET ASSETS(3):
Expenses.................................................... 1.04% 1.13%(2)
Net investment income....................................... 0.00% 0.32%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $5,339 $69
Portfolio turnover rate..................................... 184% 80%(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) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE> 21
MORGAN STANLEY DEAN WITTER EQUITY FUND
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND TRUSTEES
OF MORGAN STANLEY DEAN WITTER EQUITY FUND
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Morgan Stanley Dean Witter Equity
Fund (the "Fund") at May 31, 2000, and the results of its operations for the
year then ended, and the changes in its net assets and the financial highlights
for each of the periods indicated, in conformity with accounting principles
generally accepted in the United States. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at May 31,
2000 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
June 30, 2000
21
<PAGE> 22
MORGAN STANLEY DEAN WITTER EQUITY 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 fiscal year and the period ended May 31, 1999 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 most recent fiscal year and the period
ended May 31, 1999 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 periods.
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.
22
<PAGE> 23
(This Page Intentionally Left Blank)
<PAGE> 24
TRUSTEES
----------------------------------
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
Wayne E. Hedien
James F. Higgins
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
----------------------------------
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Mitchell M. Merin
President
Barry Fink
Vice President, Secretary and General Counsel
James F. Willison
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
----------------------------------
Morgan Stanley Dean Witter Trust FSB
Harborside Financial Center -- Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
----------------------------------
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
----------------------------------
Morgan Stanley Dean Witter Advisors Inc.
Two World Trade Center
New York, New York 10048
SUB-ADVISOR
----------------------------------
Miller Anderson & Sherrerd, LLP
One Tower Bridge
West Conshohocken, Pennsylvania 19428
This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and trustees,
fees, expenses and other pertinent information, please see the prospectus of
the Fund.
This report is not authorized for distribution to prospective investors in the
Fund unless preceded or accompanied by an effective prospectus. Read the
prospectus carefully before investing.
Morgan Stanley Dean Witter Distributors Inc., member NASD.
MORGAN STANLEY
DEAN WITTER
EQUITY FUND
Annual Report
May 31, 2000
