<PAGE>
File No. 333-53613
Investment Company Act No. 811-5065
Filer: MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST
Select Global Series 98-4
Select Global 30 Portfolio 98-4
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-6
For Registration Under the Securities Act of 1933 of Securities
of Unit Investment Trusts Registered on Form N-8B-2.
A. Exact name of Trust:
MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST,*
Select Global Series 98-4
Select Global 30 Portfolio 98-4
B. Name of Depositor:
DEAN WITTER REYNOLDS INC.
C. Complete address of Depositor's principal executive
office:
DEAN WITTER REYNOLDS INC.
Two World Trade Center
New York, New York 10048
D. Name and complete address of agents for service:
MR. MICHAEL D. BROWNE
DEAN WITTER REYNOLDS INC.
Unit Trust Department
Two World Trade Center - 59th Floor
New York, New York 10048
Copy to:
<PAGE>
KENNETH W. ORCE, ESQ.
CAHILL GORDON & REINDEL
80 Pine Street
New York, New York 10005
______________
* Formerly: Dean Witter Select Equity Trust, Select
Global Series 98-4 Select Global 30 Portfolio 98-4
<PAGE>
E. Total and amount of securities being registered:
An indefinite number of Units of Beneficial Interest
pursuant to Rule 24f-2 promulgated under the Invest-
ment Company Act of 1940, as amended
F. Proposed maximum offering price to the public of the
securities being registered:
Indefinite
G. Amount of filing fee:
N/A
H. Approximate date of proposed sale to public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF
THE REGISTRATION STATEMENT
/X/ Check box if it is proposed that this filing will be-
come effective immediately upon filing on
July 1, 1998 pursuant to Rule 487.
<PAGE>
MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST,
SELECT GLOBAL SERIES 98-4
SELECT GLOBAL 30 PORTFOLIO 98-4
Cross Reference Sheet
Pursuant to Rule 404(c) of Regulation C
under the Securities Act of 1933
(Form N-8B-2 Items required by Instruction 1
as to Prospectus on Form S-6)
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
- ----------- ---------------------
I. ORGANIZATIONAL AND GENERAL INFORMATION
1. (a) Name of Trust ) Front Cover
(b) Title of securities issued )
2. Name and address of Depositor ) Table of Contents
3. Name and address of Trustee ) Table of Contents
4. Name and address of principal ) Table of Contents
Underwriter )
5. Organization of Trust ) Introduction
6. Execution and termination of In- ) Introduction; Amend-
denture ) ment and Termination
) of the Indenture
7. Changes of name ) Included in Form
) N-8B-2
8. Fiscal Year ) Included in Form
) N-8B-2
9. Litigation ) *
II. GENERAL DESCRIPTION OF THE TRUST
AND SECURITIES OF THE TRUST
____________________
* Not applicable, answer negative or not required
<PAGE>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
- ----------- ---------------------
10. General Information regarding )
Trust's Securities and Rights of )
Holders )
(a) Type of Securities ) Rights of Unit Hold-
(Registered or Bearer) ) ers
(b) Type of Securities ) Administration of the
(Cumulative or Distribu- ) Trust-Distribution
tive) )
(c) Rights of Holders as to ) Redemption; Public
withdrawal or redemption ) Offering of Units-
) Secondary Market
(d) Rights of Holders as to ) Public Offering of
conversion, transfer, par- ) Units - Secondary
tial redemption and similar ) Market; Exchange Op-
matters ) tion; Redemption;
) Rights of Unit Hold-
) ers; Certificates
(e) Lapses or defaults with re- ) *
spect to periodic payment )
plan certificates )
(f) Voting rights as to Securi- ) Rights of Unit Hold-
ties under the Indenture ) ers - Certain Limita-
) tions; Amendment and
) Termination of the
) Indenture
(g) Notice to Holders as to )
change in )
(1) Composition of assets ) Administration of the
of Trust ) Trust - Reports to
) Unit Holders; The
) Trust - Summary De-
) scription of the
) Portfolios
(2) Terms and Conditions ) Amendment and Termi-
of Trust's Securities ) nation of the Inden-
) ture
____________________
* Not applicable, answer negative or not required
<PAGE>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
- ----------- ---------------------
(3) Provisions of Inden- ) Amendment and Termi-
ture ) nation of the Inden-
) ture
(4) Identity of Depositor ) Sponsor; Trustee
and Trustee )
(h) Security Holders Consent )
required to change )
(1) Composition of assets of ) Amendment and Termi-
Trust ) nation of the Inden-
) ture
(2) Terms and conditions of ) Amendment and Termi-
Trust's Securities ) nation of the Inden-
) ture
(3) Provisions of Indenture ) Amendment and Termi-
) nation of the Inden-
) ture
(4) Identity of Depositor and ) *
Trustee )
(i) Other principal features ) Cover of Prospectus;
of the Trust's Securities ) Tax Status
11. Type of securities comprising ) The Trust - Summary
units ) Description of the
) Portfolios; Objec-
) tives and Securities
) Selection; The Trust
) - Special Considera-
) tions
12. Type of securities comprising ) *
periodic payment certificates )
____________________
* Not applicable, answer negative or not required
<PAGE>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
- ----------- ---------------------
13. (a) Load, fees, expenses, etc. ) Summary of Essential
) Information; Public
) Offering of Units -
) Public Offering
) Price; - Profit of
) Sponsor; - Volume
) Discount; Expenses
) and Charges
(b) Certain information regard- ) *
ing periodic payment cer- )
tificates )
(c) Certain percentages ) Summary of Essential
) Information; Public
) Offering of Units -
) Public Offering
) Price; - Profit of
) Sponsor; - Volume
) Discount
(d) Price differentials ) Public Offering of
) Units - Public Offer-
) ing Price
(e) Certain other loads, fees, ) Rights of Unit Hold-
expenses, etc. payable by ) ers - Certificates
holders )
(f) Certain profits receivable ) Redemption - Purchase
by depositor, principal un- ) by the Sponsors of
derwriters, trustee or af- ) Units Tendered for
filiated persons ) Redemption
(g) Ratio of annual charges to ) *
income )
14. Issuance of trust's securities ) Introduction; Rights
) of Unit Holders -
) Certificates
15. Receipt and handling of payments ) Public Offering of
from purchasers Units - Profit of
Sponsor
____________________
* Not applicable, answer negative or not required
<PAGE>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
- ----------- ---------------------
16. Acquisition and disposition of ) Introduction; Amend-
underlying securities ) ment and Termination
) of the Indenture; Ob-
) jectives and Securi-
) ties Selection; The
) Trust - Summary De-
) scription of the
) Portfolio; Sponsor -
) Responsibility
17. Withdrawal or redemption ) Redemption; Public
) Offering of Units -
) Secondary Market
18. (a) Receipt and disposition of ) Administration of the
income ) Trust; Reinvestment
) Programs
(b) Reinvestment of distribu- ) Reinvestment Programs
tions )
(c) Reserves or special fund ) Administration of the
) Trust - Distribution
(d) Schedule of distribution ) *
19. Records, accounts and report ) Administration of the
) Trust-Records and Ac-
) counts; - Reports to
) Unit Holders
20. Certain miscellaneous provisions ) Amendment and Termi-
of trust agreement ) nation of the Inden-
) ture; Sponsor - Limi-
) tation on Liability -
) Resignation; Trustee
) - Limitation on Li-
) ability - Resignation
21. Loans to security holders ) *
22. Limitations on liability of de- ) Sponsor, Trustee;
positor, trustee, custodian, ) Evaluator - Limita-
etc. ) tion on Liability
____________________
* Not applicable, answer negative or not required
<PAGE>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
- ----------- ---------------------
23. Bonding arrangements ) Included in Form
) N-8B-2
24. Other material provisions of ) *
trust agreement )
III. ORGANIZATION, PERSONNEL AND
AFFILIATED PERSONS OF DEPOSITOR
25. Organization of Depositor ) Sponsor
26. Fees received by Depositor ) Expenses and Charges
) - Fees; Public Offer-
) ing of Units - Profit
) of Sponsor
27. Business of Depositor ) Sponsor and Included
) in Form N-8B-2
28. Certain information as to offi- ) Included in Form
cials and affiliated persons of ) N-8B-2
Depositor )
29. Voting securities of Depositor ) Included in Form
) N-8B-2
30. Persons controlling Depositor ) *
31. Compensation of Officers and Di- ) *
rector of Depositor )
32. Compensation of Directors of De- ) *
positor )
33. Compensation of employees of De- ) *
positor )
34. Remuneration of other persons ) *
for certain services rendered )
IV. DISTRIBUTION AND REDEMPTION OF SECURITIES
35. Distribution of trust's securi- ) Public Offering of
ties by states ) Units - Public Dis-
) tribution
____________________
* Not applicable, answer negative or not required
<PAGE>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
- ----------- ---------------------
36. Suspension of sales of trust's ) *
securities )
37. Revocation of authority to dis- ) *
tribute )
38. (a) Method of distribution ) Public Offering of
(b) Underwriting agreements ) Units
(c) Selling agreements )
39. (a) Organization of principal ) Sponsor
underwriter )
(b) N.A.S.D. membership of )
principal underwriter )
40. Certain fees received by princi- ) Public Offering of
pal underwriter ) Units - Profit of
) Sponsor
41. (a) Business of principal un- ) Sponsor
derwriter )
(b) Branch offices of principal ) *
underwriter )
(c) Salesman of principal un- ) *
derwriter )
42. Ownership of trust's securities ) *
by certain persons )
43. Certain brokerage commissions ) *
received by principal un- )
derwriter )
44. (a) Method of valuation ) Public Offering of
) Units
(b) Schedule as to offering ) *
price )
(c) Variation in offering price ) Public Offering of
to certain persons ) Units - Volume Dis-
) count; Exchange Op-
) tion
45. Suspension of redemption rights ) *
____________________
* Not applicable, answer negative or not required
<PAGE>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
- ----------- ---------------------
46. (a) Redemption valuation ) Public Offering of
) Units - Secondary
) Market; Redemption
(b) Schedule as to redemption ) *
price )
47. Maintenance of position in un- ) See items 10(d), 44
derlying securities ) and 46
V. INFORMATION CONCERNING THE
TRUSTEE OR CUSTODIAN
48. Organization and regulation of ) Trustee
Trustee )
49. Fees and expenses of Trustee ) Expenses and Charges
50. Trustee's lien ) Expenses and Charges
VI. INFORMATION CONCERNING INSURANCE OF
HOLDERS OF SECURITIES
51. (a) Name and address of Insur- ) *
ance Company )
(b) Type of policies ) *
)
(c) Type of risks insured and ) *
excluded )
(d) Coverage of policies ) *
(e) Beneficiaries of policies ) *
(f) Terms and manner of cancel- ) *
lation )
(g) Method of determining pre- ) *
miums )
(h) Amount of aggregate premi- ) *
ums paid )
(i) Persons receiving any part ) *
of premiums )
(j) Other material provisions ) *
of the Trust relating to )
insurance )
VII. POLICY OF REGISTRANT
____________________
* Not applicable, answer negative or not required
<PAGE>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
- ----------- ---------------------
52. (a) Method of selecting and ) Introduction Objec-
eliminating securities from ) tives and Securities
the Trust ) Selection; The Trust
) - Summary Description
) of the Portfolio
) Sponsor - Responsi-
) bility
(b) Elimination of securities ) *
from the Trust )
(c) Substitution and elimina- ) Introduction Objec-
tion of securities from the ) tives and Securities
Trust ) Selection; Sponsor -
) Responsibility;
(d) Description of any funda- )
mental policy of the Trust )
53. Taxable status of the Trust ) Cover of Prospectus;
) Tax Status
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Information regarding the ) *
Trust's past ten fiscal years )
55. Certain information regarding ) *
periodic payment plan certifi- )
cates )
56. Certain information regarding ) *
periodic payment plan certifi- )
cates )
57. Certain information regarding ) *
periodic payment plan certifi- )
cates )
58. Certain information regarding ) *
periodic payment plan certifi- )
cates )
59. Financial statements ) Statement of Finan-
(Instruction 1(c) to Form S-6 ) cial Condition
____________________
* Not applicable, answer negative or not required
<PAGE>
Parts A and B of this Prospectus do not contain all of the information with
respect to the investment company set forth in its registration statement and
exhibits relating thereto which have been filed with the Securities and Exchange
Commission, Washington, D.C. under the Securities Act of 1933 and the Investment
Company Act of 1940, and to which reference is hereby made.
[LOGO Morgan Stanley/Dean Witter Select Equity Trust]
SELECT GLOBAL SERIES 98-4
SELECT GLOBAL 30 PORTFOLIO 98-4
-----------------------------------------------------------------------
(United States, Hong Kong, United Kingdom)
-----------------------------------------------------------------
The objectives of this Trust are to provide income and above-average growth
potential through an investment for approximately 1 year in a fixed portfolio
(the "Portfolio") consisting of 30 stocks (the "Securities") which are the ten
common stocks in each of the Dow Jones Industrial Average (the "DJIA"), the
Financial Times Ordinary Share Index (the "FT Index") and the Hang Seng Index
(the "HS Index") having the highest dividend yields on June 30, 1998 (the
"Domestic Stock Determination Date") and June 29, 1998 (the "Foreign Stock
Determination Date") (collectively, the "Stock Determination Dates"). DOW JONES
& COMPANY, INC. (OWNER OF THE DJIA) AND THE PUBLISHERS OF THE FT INDEX AND THE
HS INDEX HAVE NOT PARTICIPATED IN ANY WAY IN THE CREATION OF THE TRUST OR IN THE
SELECTION OF STOCKS INCLUDED IN THE TRUST AND HAVE NOT APPROVED ANY INFORMATION
INCLUDED HEREIN RELATING THERETO.
The value of the Units of the Trust will fluctuate with the value of the
Portfolio of underlying Securities, and with changes in exchange rates in the
case of the Securities which are represented in either the FT Index or the HS
Index (the "Foreign Securities"). Unless otherwise indicated, all amounts herein
are stated in U.S. dollars computed on the basis of the exchange rate for
British pounds sterling or Hong Kong dollars, as applicable, on the Date of
Deposit, or other date indicated herein. Units of the Trust are not deposits or
obligations of, or guaranteed or endorsed by, any bank, and the Units are not
insured by the Federal Deposit Insurance Corporation, Federal Reserve Board or
any other agency. Investment in Units of the Trust is subject to investment
risk, including the possible loss of the principal amount invested.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SPONSOR TRUSTEE
- ---------------------------- ----------------------------
<S> <C>
Dean Witter Reynolds Inc. The Bank of New York
2 World Trade Center 101 Barclay Street
New York, New York 10048 New York, New York 10286
</TABLE>
PROSPECTUS DATED JULY 1, 1998
<PAGE>
SUMMARY OF ESSENTIAL INFORMATION
MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST
SELECT GLOBAL SERIES 98-4
SELECT GLOBAL 30 PORTFOLIO 98-4
AS OF JUNE 30, 1998(1)
<TABLE>
<S> <C>
Aggregate Value of Securities in Trust(2)............................. $239,358.95
Number of Units(3).................................................... 25,000
Fractional Undivided Interest in the Trust Represented by Each Unit... 1/25,000th
Public Offering Price Per Unit:
Aggregate Value of Securities in the Trust Divided by 25,000 Units
(times 100 Units)................................................ $ 957.44
Plus Sales Charge of 2.90% of Public Offering Price(4) (2.924% of
the amount invested in Securities)............................... 28.00
Less Deferred Sales Charge per 100 Units.......................... (20.00)
-----------
Public Offering Price per 100 Units(5)............................ $ 965.44
-----------
-----------
Sponsor's Repurchase Price per 100 Units and Redemption Price per 100
Units (based on the value of the underlying Securities, $28.00 less
than the Public Offering Price per 100 Units)(6).................... $ 937.44
-----------
-----------
</TABLE>
<TABLE>
<S> <C>
Evaluation Time................................... Close of the market: 4:00 P .M . New York time.
Record Dates...................................... October 1, 1998, January 1, 1999, April 1, 1999 and
September 1, 1999.
Distribution Dates................................ October 15, 1998, January 15, 1999, April 15, 1999 and on or
about September 8, 1999.(7)
Minimum Principal Distribution.................... No distribution need be made from the Principal Account if
the balance therein is less than $1.00 per 100 Units
outstanding.
In-Kind Distribution Date......................... August 12, 1999
Liquidation Period................................ Not to exceed 14 business days after the In-kind
Distribution Date.(7)
Mandatory Termination Date........................ September 1, 1999.
Discretionary Liquidation Amount.................. The Indenture may be terminated by the Sponsor if the value
of the Trust at any time is less than 40% of the market
value of the Securities deposited in the Trust.(3)
Trustee's Fee (including estimated expenses)(8)... $2.25 per 100 Units.
Organizational Expenses (estimated)(9)............ $4.21 per 100 Units.
Sponsor's Portfolio Supervision Fee............... Maximum of $0.25 per 100 Units.
Deferred Sales Charge Payment Date................ The last business day of each month commencing August 31,
1998.
Minimum Purchase: $1,000 ($250 for IRA's) -- The Sponsor offers a program which permits a lower minimum purchase
(see "Direct Invest").
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
- ------------------------
(1)The Initial Date of Deposit. The Indenture was signed and the initial
deposit of Securities with the Trustee was made on the Initial Date of Deposit.
(2)Each Security listed on a securities exchange is valued at the last
closing sale price on the relevant stock exchange (generally 4:00 p.m. Eastern
time on the New York Stock Exchange, 11:30 a.m. Eastern time on the London Stock
Exchange and 3:30 a.m. Eastern time on the Hong Kong Stock Exchange) on June 30,
1998 or if no such price exists at the closing offer price thereof. The
aggregate U.S. dollar value of the Foreign Securities in the Trust is based on
the offering side of the currency exchange rate for the British pound sterling
or the Hong Kong dollar at the Evaluation Time on the Date of Deposit.
(3)The number of Units will be increased as the Sponsor deposits additional
Securities into the Trust. See "Introduction", in Part B.
(4)The sales charge consists of an Initial Sales Charge and a Deferred Sales
Charge. The Initial Sales Charge is computed by deducting the Deferred Sales
Charge ($20.00 per 100 Units) from the aggregate sales charge (a maximum of
2.90% of the Public Offering Price); thus on the date of this Summary of
Essential Information, the Initial Sales Charge is $8.00 per 100 Units or 0.83%
of the Public Offering Price. The Initial Sales Charge paid by a Unit Holder may
be more or less than $8.00 per 100 Units because of the fluctuation of the value
of the Securities from that on the Initial Date of Deposit. The Initial Sales
Charge is reduced on a graduated basis on purchases of $25,000 or more (see
"Public Offering of Units--Volume Discount"). The Deferred Sales Charge is paid
through reduction of Trust assets by $2.00 per 100 Units on each Deferred Sales
Charge Payment Date through the sale of Securities on each such date or
distribution of cash available in the Principal Account for such payment. On a
repurchase, redemption or exchange of Units before the last Deferred Sales
Charge Payment Date, any remaining Deferred Sales Charge payments will be
deducted from the proceeds. Units purchased pursuant to the Reinvestment Program
are subject to that portion of the Deferred Sales Charge remaining at the time
of reinvestment (see "Reinvestment Program").
(5)This price is computed as of the Initial Date of Deposit and may vary
from such price on the date of this Prospectus or any subsequent date. The
Public Offering Price per Unit is based on the aggregate U.S. dollar value of
the Securities computed on the basis of the offering side of the relevant
currency exchange rate. No sales to investors will be executed on such date at
this price. Additional Securities will be deposited after the Date of Deposit
which Securities will be valued generally as of 4:00 p.m. Eastern time and Units
will be sold to investors at a Public Offering Price based on this valuation.
(6)This price is computed as of the Initial Date of Deposit and may vary
from such price on the date of this Prospectus or any subsequent date. This
price reflects deductions for remaining Deferred Sales Charge payments ($20.00
per 100 Units initially). In addition, after the initial offering period, the
repurchase and cash redemption prices will be further reduced to reflect the
Trust's estimated brokerage costs of selling Securities to meet redemptions,
currently estimated at $1.15 per 100 Units.
(7)The final distribution will be made within 5 business days following the
receipt of proceeds from the sale of all Portfolio Securities. (See:
"Administration of the Trust--Termination".)
(8)See: "Expenses and Charges" herein. The fee and the expenses accrue daily
and are payable on each Distribution Date. Estimated dividends from the
Securities, based on the last dividends actually paid, are expected by the
Sponsor to be sufficient to pay the estimated expenses of the Trust. In addition
to the Trustee's fee, brokerage costs borne by the Trust in connection with the
purchase of Securities by the Trustee with cash deposited in the Trust are
currently estimated at $0.90 per 100 Units.
(9)The cost of preparation and printing of the Indenture, Registration
Statement and other documents relating to the Trust, Federal and State
registration fees and costs, initial fees of the Trustee, and legal and auditing
expenses will be paid by the Trust and, therefore, will be borne by Unit
Holders. These organizational expenses will be amortized over the life of
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
the Trust. Organizational expenses per Unit have been estimated based on a Trust
with projected total assets of $25 million. To the extent the assets of the
Trust are less than such amount, the organizational expense per Unit will be
greater than the estimate shown.
</TABLE>
iii
<PAGE>
SUMMARY OF ESSENTIAL INFORMATION--(continued)
FEE TABLE
THIS FEE TABLE IS INTENDED TO HELP YOU TO UNDERSTAND THE COSTS AND EXPENSES THAT
YOU WILL BEAR DIRECTLY OR INDIRECTLY. SEE PUBLIC OFFERING OF UNITS AND EXPENSES
AND CHARGES. ALTHOUGH THE TRUST HAS A TERM OF APPROXIMATELY ONE YEAR, AND IS A
UNIT INVESTMENT TRUST RATHER THAN A MUTUAL FUND, THIS INFORMATION IS PRESENTED
TO PERMIT A COMPARISON OF FEES (PERCENTAGES ARE BASED ON A $1,000 INVESTMENT IN
100 UNITS), ASSUMING THE PRINCIPAL AMOUNT AND DISTRIBUTIONS ARE EXCHANGED EACH
YEAR INTO A NEW TRUST SUBJECT ONLY TO THE DEFERRED SALES CHARGE AND TRUST
EXPENSES.
<TABLE>
<CAPTION>
AMOUNT PER
$1,000
INVESTMENT
UNIT HOLDER TRANSACTION EXPENSES IN 100 UNITS
- ----------------------------------------------------------------- -------------
<S> <C> <C>
Initial Sales Charge Imposed on Purchase......................... 0.90%(a) $ 9.00
Deferred Sales Charge per Year................................... 2.00%(b) 20.00
----- ------
Maximum Sales Charge per Year.................................... 2.90% $ 29.00
----- ------
----- ------
Maximum Sales Charge Imposed Per Year on Reinvested Dividends.... $ 20.00(c)
</TABLE>
<TABLE>
<S> <C> <C>
ESTIMATED ANNUAL TRUST OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)(d)
Trustee's Fee.................................................. 0.225% $ 2.25
Organizational Expenses (e).................................... 0.421% 4.21
Portfolio Supervision, Bookkeeping and Administrative Fees..... 0.025% 0.25
Other Operating Expenses....................................... -- --
----- ------
Total...................................................... 0.671% $ 6.71
----- ------
----- ------
</TABLE>
iv
<PAGE>
FEE TABLE--(continued)
EXAMPLE
<TABLE>
<CAPTION>
CUMULATIVE EXPENSES PAID FOR PERIOD
-------------------------------------------
3 5 10
1 YEAR YEARS(f) YEARS(f) YEARS(f)
------- --------- --------- ---------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a $1,000
investment, assuming an estimated operating expense ratio
of 0.671% and a 5% annual return on the investment
throughout the periods..................................... $ 36 $ 91 $ 148 $ 304
The Example assumes reinvestment of all dividends and distributions and utilizes a 5% annual rate of
return as mandated by Securities and Exchange Commission regulations applicable to mutual funds. For
purposes of the Example, the Deferred Sales Charge imposed on reinvestment of dividends is not reflected
until the year following payment of the dividend; the cumulative expenses would be higher if sales
charges on reinvested dividends were reflected in the year of reinvestment. Because the reductions to the
repurchase and cash redemption prices described in footnote 6 on page (ii) apply only to the secondary
market, these reductions have not been reflected in the figures above. The Example should not be
considered a representation of past or future expenses or annual rate of return; the actual expenses and
annual rate of return may be more or less than those assumed for purposes of the Example.
- ------------------------
(a) The Initial Sales Charge is actually the difference between 2.90% and the
Deferred Sales Charge ($20.00 per 100 Units) and would exceed 0.90% if the
Public Offering Price exceeds $1,000 per 100 Units.
(b) The actual fee is $2.00 per month per 100 Units, irrespective of purchase
or redemption price, paid on each Deferred Sales Charge Payment Date. If a
Holder sells Units before all of these payments have been made, the balance
of the Deferred Sales Charge will be paid from the sales proceeds. If the
Unit purchase price exceeds $10 per Unit, the Deferred Sales Charge will be
less than 2.00%; if the Unit purchase price is less than $10 per Unit, the
Deferred Sales Charge will exceed 2.00%.
(c) Reinvested dividends will be subject only to the Deferred Sales Charge
remaining at the time of reinvestment which may be more or less than 2.00%
of the Public Offering Price at the time of reinvestment (see "Reinvestment
Program").
(d) The estimates do not include the costs borne by Unit Holders of purchasing
and selling Securities.
(e) The cost of preparation and printing of the Indenture, Registration
Statement and other documents relating to the Trust, Federal and State
registration fees and costs, initial fees of the Trustee, and legal and
auditing expenses will be paid by the Trust and, therefore, will be borne
by Unit Holders. Organizational expenses per Unit have been estimated based
on a Trust with projected total assets of $25 million. To the extent the
assets of the Trust are less than such amount, the organizational expense
per Unit will be greater than the estimate shown.
(f) Although each Trust has a term of approximately one year and is a unit
investment trust rather than a mutual fund, this information is presented
to permit a comparison of fees and expenses, assuming the principal amount
and distributions are exchanged each year into a new trust subject only to
the Deferred Sales Charge.
</TABLE>
v
<PAGE>
SUMMARY OF ESSENTIAL INFORMATION--(continued)
THE TRUST--OBJECTIVE--The Morgan Stanley Dean Witter Select Equity Trust,
Select Global Series 98-4, Select Global 30 Portfolio 98-4 (the "Trust") is a
unit investment trust composed of publicly-traded common stocks or contracts to
purchase such stocks (the "Securities"). The objectives of the Trust are to
provide income and above-average growth potential through investment in the
stocks which are the ten common stocks in each of the DJIA, FT Index and HS
Index (the "Indices" or the "Index") having the highest dividend yield (the
"Select 30") as of the Stock Determination Dates. Investment in a number of
companies having high dividends relative to their stock prices (possibly because
their stock prices are depressed) is designed to increase the Trust's potential
for higher returns. There is, however, no guarantee that the objectives of the
Trust will be achieved. See "Risk Factors-- Special Considerations" below.
On the initial Date of Deposit and thereafter, the Sponsor may, under the
Indenture and Agreement, deposit additional Securities, contracts to purchase
additional Securities together with a letter of credit and/or cash (or a letter
of credit in lieu of cash) with instructions to purchase additional Securities
in order to create Additional Units while maintaining to the extent practicable
the proportionate relationship between the number of shares of each Security in
the Portfolio.
SPECIAL CHARACTERISTICS OF THE TRUST--SECURITIES SELECTION.
The Trust Portfolio consists of the ten common stocks in each Index having
the highest dividend yield as of the Stock Determination Dates. The yield for
each stock in the DJIA was calculated by annualizing the last quarterly ordinary
dividend declared and dividing the annualized dividend by the market value of
the stock. The yield for each stock in the FT Index and the HS Index was
calculated by adding together the most recent interim and final dividend
declared (generally, United Kingdom and Hong Kong companies pay one interim and
one final dividend per fiscal year) and dividing the result by the market value
of the stock. Such formula (an objective determination) served as the basis for
the Sponsor's selection of the ten stocks in each Index having the highest
dividend yield. The philosophy is simple. The Trust does not require
sophisticated analysis or an explanation of complex investment strategies, just
the pure and simple concept of buying a quality portfolio of stocks in one
convenient purchase. The Securities were selected irrespective of any buy or
sell recommendation by the Sponsor.
Simple strategies can sometimes be the most effective. To outperform the
market is more difficult than just outperforming other asset classes. Purchasing
a portfolio of these stocks through an investment in the Trust as opposed to one
or two individual stocks may achieve better overall performance and will achieve
greater diversification. There is only one investment decision instead of
thirty, and four distributions to the investor during the one-year life of the
Trust instead of multiple distributions. An investment in the Trust can be
cost-efficient, avoiding the odd-lot costs of buying small quantities of
securities directly. Investment in a number of companies with high dividends
relative to their stock prices is designed to increase the Trust's potential for
higher returns. The Trust's return may consist of a combination of capital
appreciation and current dividend income.
RISK FACTORS--SPECIAL CONSIDERATIONS--An investment in Units of the Trust
should be made with an understanding of the following risks:
Investors should note that the above criteria were applied to the Securities
selected for inclusion in the Trust Portfolio as of the respective Stock
Determination Dates. The Trust is an unmanaged, fixed portfolio of common
stocks. Subsequent to such dates, the Securities may no longer rank among the
ten stocks in each Index having the highest dividend yield (other securities
having replaced them in such ranking), the yields on the Securities in the
portfolio may change or the Securities may no longer be included in an Index.
The Sponsor, on and subsequent to the Initial Date of Deposit, expects to
deposit additional Securities which reflect the Portfolio as of the Initial Date
of Deposit, subject to permitted adjustments, and sell such additional Units
created. The sale of additional Units and the sale of Units in the secondary
market may continue even though the Securities would no longer be chosen for
deposit into the Trust if the selection process were to be made at such later
time.
v
<PAGE>
Investors must be able and willing to assume the risks associated with
equity investing in a fixed portfolio of common stocks. There are risks inherent
in an investment in common stocks, which comprise the portfolio of the Trust,
including price fluctuation and risks associated with the limited rights of
holders of common stock to receive payments from issuers of such stock; such
rights are inferior to those of creditors and holders of debt obligations or
preferred stock. The Securities may be adversely affected by securities market
changes. A decline in income, revenue, business opportunities and other business
factors may adversely affect a Security. Also, holders of common stock have the
right to receive dividends only when, as and if such dividends are declared by
the issuer's board of directors. Investors should also be aware that the value
of the underlying Securities in the Portfolio may fluctuate in accordance with
changes in the value of common stocks in general. Although there are certain
risks of price volatility associated with investment in common stocks, the Trust
helps reduce risk because your capital is divided among 30 stocks from several
different industry groups.
The Securities may appreciate or depreciate in value (or pay dividends)
depending on the full range of economic and market influences (both domestic and
international) affecting corporate profitability, the financial condition of
issuers, political factors and the prices of equity securities in general and
the Securities in particular. In addition, a decrease in the value of the
British pound sterling or the Hong Kong dollar relative to the U.S. dollar will
adversely affect the U.S. dollar value of the Trust's income and assets and,
therefore, the value of Units. An investment in HS Index common stock, including
the Securities in this Trust, may be considered speculative and therefore may be
appropriate only for those investors able and willing to assume the increased
risks of higher price volatility, currency fluctuations and investment in Hong
Kong following its July 1, 1997 reversion to Chinese control. See "The
Trust--Risk Factors--Special Considerations" and notes to Portfolio Securities
below.
Although the Trust is a one-year investment, the strategy is long-term.
Investors should consider reinvesting in successive trusts, for example, for at
least three to five years, to take advantage of the long-term strategy. There
can be no assurance, however, that the Sponsor will offer successive trusts.
Investors desiring to invest in successive trusts must so elect in connection
with the termination of the prior trust.
FOREIGN ISSUERS. The Portfolio is considered to be concentrated in
securities of non-United States issuers. Holding securities of non-United States
companies may involve investment risks that are different from those involved in
holding securities of domestic issuers, including future political and economic
developments, the possible imposition of withholding taxes and exchange controls
or other foreign governmental restrictions which might adversely affect the
payment of distributions on Securities in the Portfolio. In addition, there may
be less publicly available information about a foreign issuer and foreign
issuers may not generally be subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to domestic issuers. Foreign securities markets, while growing in
volume, have, for the most part, substantially less volume than U.S. markets,
and securities of many foreign companies are less liquid and their prices more
volatile than securities of comparable domestic companies. Brokerage commissions
and other transaction costs on foreign securities exchanges are generally higher
than in the United States and there is generally less government supervision and
regulation of exchanges, brokers and issuers in foreign countries than there is
in the United States. Global and regional perceptions of the United Kingdom and
Hong Kong markets' and currency exchange rate fluctuations should also be
considered both of which may adversely affect the value of the Foreign
Securities.
For example, during October, 1997, the Hang Seng Index experienced
substantial volatility, including a decline of approximately 38% between October
20 and October 28. This was due to, among other things, the widely held concern
and speculation that the Hong Kong dollar's peg to the U.S. dollar (in place
since 1983) might be removed in the near future, and a resulting steep rise in
Hong Kong's interest rates. There can be no assurance that the peg will
continue. Should the peg be removed, further and significant volatility and
decline in Hang Seng stocks may occur.
vi
<PAGE>
Events in Hong Kong and other Asian markets have caused and may continue to
cause volatility and declines in U.S. and British common stocks, including the
Trust Securities.
HONG KONG'S REVERSION TO CHINESE SOVEREIGNTY. An investment in securities in
the HS Index may be considered speculative and therefore may be appropriate only
for those investors able and willing to assume the increased risks of higher
price volatility, currency fluctuations and the increased risks of investment in
Hong Kong following its reversion to Chinese control. In December 1984, Great
Britain and China signed an agreement under which Hong Kong reverted to Chinese
sovereignty effective July 1, 1997. Hong Kong's new constitution is the Basic
Law (promulgated by China in 1990), which took effect on July 1, 1997. The Basic
Law binds executive, legislative and judicial branches of the government and
provides a framework in which Hong Kong's legal system can continue.
The Basic Law provides that for the next fifty years, Hong Kong will retain
a "high degree of autonomy," except in defense and foreign affairs. While China
has committed to preserve for fifty years the capitalist economy, legal system,
and social freedoms currently enjoyed in Hong Kong, there can be no assurance
that China will abide by its commitment. The implementation of the Basic Law is
subject to China's interpretation and no assurance can be given as to the
continuing effect of the resumption of Chinese sovereignty on Hong Kong or the
Hong Kong stock market. Hong Kong has been sensitive to political events.
Continued political instability could adversely affect the Hong Kong economy and
therefore the value of the Portfolio.
The first election of the Legislative Council of Hong Kong ("Legco") was
held in May, 1998. Disagreements had arisen over the fairness of the election.
In the event, the first election witnessed a 53% turn out of registered voters,
and produced a Legco where the Democratic Party hold thirteen of the available
sixty seats, forming the largest single block of party affiliated Legco members.
However, continued doubts about the effective nature of Legco's influence as a
governing body, concerns about China's commitment to the political autonomy of
Hong Kong and disagreements between members of Legco may affect public
confidence in the securities markets, increase market volatility and may
adversely affect the Trust.
CURRENCY EXCHANGE. All of the Securities from the FT Index in the Portfolio
are quoted in British pounds sterling and all of the Securities from the HS
Index in the Portfolio are quoted in Hong Kong dollars. In the past both of
these currencies have fluctuated in value against the United States dollar for
many reasons, including supply and demand of each currency, the impact of
interest rate differentials between different currencies on the movement of
foreign currency rates, the soundness of the world economy, the rate of
inflation in the United Kingdom and Hong Kong compared to that of the United
States and the strength of the economies of the United Kingdom and Hong Kong as
compared to the economy of the United States. The Hong Kong Dollar has been
"pegged" to the U.S. dollar since 1983 although there is no assurance that this
will continue in the future. (See "Risk Factors--Foreign Exchange Rates".) There
can be no assurance that fluctuations in exchange rates will not adversely
affect the value of the Units of the Trust.
At the start of the third stage of European economic and monetary union
("EMU") which is currently intended to begin on 1st January, 1999, the euro will
become the lawful currency of the participating member states and the previous
currencies of such states will cease to exist as currencies in their own right,
becoming instead denominations of the euro. It is presently uncertain whether
and, if so, when the United Kingdom will participate in EMU. The consequences of
EMU for the foreign exchange rates, interest rates and shares and securities
listed on the national stock exchanges of member states of the European Union,
whether or not a particular member state participates in EMU, are presently
unclear. Such consequences may adversely affect the value of the Securities in
the Trust.
The Securities in the Indices are listed on a securities exchange. Whether
or not those Securities are, or continue to be, listed, their principal trading
market may be in the over-the-counter market. As a result, the existence of a
liquid trading market for the Securities may depend on whether dealers will make
a market in the Securities. There can be no assurance that a market will be made
for any of the Securities, that any market for the Securities will be maintained
or of the liquidity of the Securities in any
vii
<PAGE>
markets made. In addition, the Trust may be restricted under the Investment
Company Act of 1940 from selling Securities to the Sponsor. The price at which
the Securities may be sold to meet redemptions and the value of Units will be
adversely affected if trading markets for the Securities are limited or absent.
(See "Risk Factors--Liquidity".)
In connection with the deposit by the Sponsor of cash (or a letter of credit
in lieu of cash) with instructions to purchase additional Securities in order to
create Additional Units, to the extent that the price of a Security fluctuates
between the time the cash is deposited and the time the cash is used to purchase
the Security, Units (including previously issued Units) may represent more or
less of that Security and more or less of other Securities in the Portfolio of
the Trust. In addition, the brokerage fees incurred in purchasing Securities
with such deposited cash will be borne by the Trust. Any Unit Holder who
purchased Units prior to the purchase of Securities with such deposited cash
would experience dilution as a result of any such brokerage fees.
ADDITIONAL RISK FACTORS--SPECIAL CONSIDERATIONS. See also notes to
"Schedule of Portfolio Securities" and "The Trust--Risk Factors--Special
Considerations" below.
DISTRIBUTION--The Trustee will distribute any dividends (net of Trust
expenses) and any proceeds from the disposition of Securities not used for
redemption of Units received by the Trust on October 15, 1998, January 15, 1999,
April 15, 1999 and on or about September 8, 1999 to holders of record on October
1, 1998, January 1, 1999, April 1, 1999 and the Termination Date, respectively.
Upon termination of the Trust, the Trustee will distribute to each Unit Holder
of record its pro rata share of the Trust's assets, less expenses and less any
Deferred Sales Charge then payable or Unit Holders can elect to reinvest their
distributions automatically in units of a New Series (as defined below), if
offered by the Sponsor, which units acquired through reinvestment upon
termination will be subject only to a deferred sales charge (see "Administration
of the Trust--Termination"). The sale of Securities in the Trust during the
period prior to termination and upon termination may result in a lower amount
than might otherwise be realized if such sale were not required at such time due
to impending or actual termination of the Trust. For this reason, among others,
the amount realized by a Unit Holder upon termination may be less than the
amount paid by such Unit Holder (see "Administration of the
Trust--Distribution".)
The Sponsor anticipates that, based upon the last dividends actually paid by
the companies listed in the "Schedule of Portfolio Securities," dividends from
the Securities will be sufficient to (i) pay expenses of the Trust and (ii)
after such payment, to make distributions to Unit Holders as described herein
(see "Expenses and Charges" and "Administration of the Trust-- Distribution".)
PUBLIC OFFERING PRICE--The Public Offering Price per 100 Units is computed
on the basis of the aggregate value of the underlying Securities next computed
after receipt of a purchase order plus cash on hand in the Trust, divided by the
number of Units outstanding times 100, plus a sales charge of 2.924% of such
evaluation per 100 Units (the amount invested in Securities); this results in a
sales charge of 2.90% of the Public Offering Price. A proportionate share of
amounts, if any, in the Income Account is also added to the Public Offering
Price (see "Public Offering of Units--Public Offering Price".) The total sales
charge consists of an Initial Sales Charge and a Deferred Sales Charge, the
total of which equals 2.90% of the Public Offering Price or 2.924% of the amount
invested in Securities. The Initial Sales Charge is computed by deducting the
Deferred Sales Charge ($20.00 per 100 Units) from the aggregate sales charge;
thus, on the date of the Summary of Essential Information, the Initial Sales
Charge is $8.00 per 100 Units or 0.83% of the Public Offering Price. The Initial
Sales Charge paid by a Unit Holder may be more or less than $8.00 per 100 Units
because of the fluctuation of the value of the Securities from that on the Date
of Deposit. The Initial Sales Charge will vary with changes in the aggregate
sales charge and is deducted from the purchase price of a Unit at the time of
purchase and paid to the Sponsor. The Initial Sales Charge will be reduced on a
graduated basis on purchases of $25,000 or more.
Unit Holders acquiring Units in the Trust through an exchange or rollover of
units of a previous series of the Select Global 30 Portfolio will acquire such
Units subject only to the Deferred Sales Charge. The Deferred Sales Charge is
paid through reduction of Trust assets by $2.00 per 100 Units monthly on each
Deferred Sales Charge Payment Date commencing on the first Deferred Sales
viii
<PAGE>
Charge Payment Date shown on the Summary of Essential Information through the
sale of Securities on each such date or distribution of cash available for such
payment. Units purchased pursuant to the Reinvestment Program are subject only
to deductions remaining of the Deferred Sales Charge (see "Reinvestment
Program"). If a Unit Holder exchanges, redeems or sells his Units to the Sponsor
prior to the last Deferred Sales Charge Payment Date, the Unit Holder is
obligated to pay any remaining Deferred Sales Charge.
MARKET FOR UNITS--The Sponsor, though not obligated to do so, intends to
maintain a market for the Units. If such market is not maintained, a Unit Holder
will be able to dispose of his Units through redemption at prices based on the
aggregate value of the underlying Securities. (See: "Redemption".) Market
conditions may cause such prices to be greater or less than the amount paid for
Units. The Sponsor's Repurchase Price, like the Redemption Price, will reflect
the deduction from the value of the underlying Securities of any unpaid amount
of the Deferred Sales Charge. Investors should note that the Deferred Sales
Charge of $2.00 per 100 Units will be deducted from Trust assets on the last
business day of each of the ten months commencing on the first Deferred Sales
Charge Payment Date shown on the Summary of Essential Information, and to the
extent the entire Deferred Sales Charge has not been so deducted or paid at the
time of repurchase or redemption of the Units, the remainder will be deducted
from the proceeds of sale or redemption or in calculating an in-kind redemption.
TERMINATION--The Trust will terminate approximately 1 year after the Initial
Date of Deposit regardless of market conditions at that time. The Trust will
then liquidate. Unit Holders may elect to receive shares in-kind. Prior to
termination of the Trust, the
Trustee will begin to sell the Securities held in the Trust over a period not to
exceed 14 consecutive business days (the "Liquidation Period"). Monies held upon
such sale of Securities will be held uninvested in non-interest bearing accounts
created by the Indenture until distributed pro rata to Unit Holders on or about
September 8, 1999 and will be of benefit to the Trustee during such period.
During the life of the Trust, Securities will not be sold to take advantage of
market fluctuations.
Because the Trust is not managed and the Securities can only be sold during
the Liquidation Period or under certain other limited circumstances described
herein, the proceeds received from the sale of Securities may be less than could
be obtained if the sale had taken place at a different time. Depending on the
volume of Securities sold and the prices of and demand for Securities at the
time of such sale, the sales of Securities from the Trust may tend to depress
the market prices of such Securities and hence the value of the Units, thus
reducing termination proceeds available to Unit Holders. In order to mitigate
potential adverse price consequences of heavy volume trading in the Securities
taking place over a short period of time and to provide an average market price
for the Securities, the Trustee will follow procedures set forth in the
Indenture to sell the Securities in an orderly fashion over a period not to
exceed the Liquidation Period. The Sponsor can give no assurance, however, that
such procedures will mitigate negative price consequences or provide a better
price for such Securities. The Trust may terminate earlier than on the Mandatory
Termination Date if the value of the Trust is less than the Discretionary
Liquidation Amount set forth under "Administration of the Trust--Termination."
ix
<PAGE>
THE DOW JONES INDUSTRIAL AVERAGE
The first DJIA, consisting of 12 stocks, was published in THE WALL STREET
JOURNAL in 1896. The list grew to 20 stocks in 1916 and to 30 stocks on October
1, 1928. Taking into account a number of name changes, 1 of the original
companies is still in the DJIA today. For two periods of 17 consecutive years
each, there were no changes to the list: March 15, 1939-July 2, 1956 and June 2,
1959-August 8, 1976. The following is a list of the companies which currently
comprise the DJIA.
<TABLE>
<S> <C>
Allied Signal Hewlett-Packard Co.
Aluminum Co. of America IBM
American Express International Paper
AT&T Corp. Johnson & Johnson
Boeing McDonald's
Caterpillar Merck
Chevron Minnesota Mining and Manufacturing Co.
Coca-Cola Morgan (J.P.), & Co., Incorporated
Disney, Walt Philip Morris Cos., Inc.
Dupont (E.I.) de Nemours & Co. Procter & Gamble
Eastman Kodak Co. Sears, Roebuck & Company
Exxon Corp. Travelers Group
General Electric Union Carbide
General Motors Corp. United Technologies
Goodyear Wal-Mart Stores Inc.
</TABLE>
The Dow Jones Industrial Average is comprised of 30 common stocks chosen by
the editors of THE WALL STREET JOURNAL as representative of the broad market and
of American industry. The companies are major factors in their industries and
their stocks are widely held by individuals and institutional investors.
Changes in the components are made entirely by the editors of THE WALL
STREET JOURNAL without consultation with the companies, the stock exchange or
any official agency. For the sake of continuity, such changes are made rarely.
Most substitutions have been the result of mergers, but from time to time
changes may be made to achieve a better representation. The composition of the
Dow Jones Industrial Average may be changed at any time for any reason.
x
<PAGE>
THE FINANCIAL TIMES ORDINARY SHARE INDEX
The FT Index was designed to reflect changes in the United Kingdom equity
market as reflected in prices of the leading and most actively traded shares and
comprises 30 common stocks chosen by the editors of THE FINANCIAL TIMES (London)
as representative of British industry and commerce. Such companies are major
factors in their industries and their stocks are widely held by individuals and
institutional investors. The FT Index is a geometric, unweighted average of the
share prices of these companies and is calculated on a minute-by-minute basis.
Its base is 100 as of July 1, 1935. Changes in the components of the FT Index
are made entirely by the editors of THE FINANCIAL TIMES without consultation
with the companies, any stock exchange or any official agency. Since the
introduction of the Financial Times Index in 1935, there has been a steady shift
of emphasis in its makeup from heavy industry towards companies engaged in
service trades. Most substitutions of companies have been the result of mergers
or because of bankruptcy. The components of the FT Index may be changed at any
time for any reason. Any changes in the components in the FT Index announced
after the Foreign Stock Determination Date will not cause a change in the
identity of the common stocks included in the Portfolio, including any
Securities deposited thereafter.
The FT Index began as the Financial News Industrial Ordinary Share Index in
London in 1935, became the Financial Times Industrial Ordinary Share Index in
1947 and is now known as the Financial Times Ordinary Share Index. The following
are the companies whose stocks are currently represented in the FT Index*:
<TABLE>
<S> <C>
Allied-Domecq PLC Granada Group PLC
ASDA Group PLC GKN PLC
The BOC Group PLC Imperial Chemical Industries PLC
BTR PLC Lloyds TSB Group PLC
Blue Circle Industries PLC LucasVarity
The Boots Company PLC Marks & Spencer PLC
The British Petroleum Company PLC National Westminster Bank PLC
British Telecommunications PLC Peninsular & Oriental Steam Navigation
BG PLC Company
British Airways PLC Reuters Holdings PLC
Cadbury Schweppes PLC Royal & Sun Alliance Insurance Group PLC
Courtaulds PLC* Scottish Power PLC
Diageo PLC SmithKline Beecham PLC (A shares)
EMI Group Tate & Lyle PLC
The General Electric Company PLC Vodafone Group
Glaxo Wellcome PLC
</TABLE>
* Reflects a change to the FT Index announced prior to the Foreign Stock
Determination Date that will not be implemented until after such date. The
Portfolio was selected after reflecting the announced acquisition of
Courtaulds PLC and its elimination from the FT Index. There can be no
assurance that such change will be implemented and, if not implemented, the
stocks in the Portfolio will not be changed.
xi
<PAGE>
THE HANG SENG INDEX
The HS Index, which was first published in 1969, comprises 33 of the stocks
listed on the Stock Exchange of Hong Kong Ltd. (the "Hong Kong Exchange"), and
includes companies intended to represent four major market sectors: commerce and
industry, finance, properties and utilities. The HS Index is a recognized
indicator of stock market performance in Hong Kong. It is computed by dividing
the aggregate current market value of the constituent stocks (I.E. the sum of
the products of the current market price of each stock and the number of issued
shares of such stock) by the aggregate base market value of those stocks.
Accordingly, the Hang Seng Index is strongly influenced by stocks with large
market capitalizations. The HS Index represents approximately 70% of the total
market capitalization of the stocks listed on the Hong Kong Exchange. Any
changes in the components in the HS Index announced after the Foreign Stock
Determination Date will not cause a change in the identity of the common stocks
included in the Portfolio, including any Securities deposited thereafter.
Following are the stocks comprising the Hang Seng Index:
<TABLE>
<S> <C>
Amoy Properties Ltd. Hong Kong and Shanghai Hotels Ltd.
Bank of East Asia Ltd. Hong Kong Telecommunications Ltd.
Cathay Pacific Airways Ltd. Hopewell Holdings Ltd.
Cheung Kong Holdings Ltd. HSBC Holdings PLC
Cheung Kong Infrastructure Holdings Ltd. Hutchison Whampoa Ltd.
CLP Holdings Ltd. Hysan Development Co. Ltd.
China Resources Enterprise Ltd. New World Development Co. Ltd.
China Telecom Shanghai Industrial Holdings Ltd.
Citic Pacific Ltd. Shangri-La Asia Ltd.
First Pacific Co. Ltd. Sino Land Co. Ltd.
Great Eagle Holdings Ltd. Sun Hung Kai Properties Ltd.
Guangdong Investment Ltd. Swire Pacific Ltd.
Hang Lung Development Co. Ltd. Television Broadcasts Ltd.
Hang Seng Bank Ltd. Wharf Holdings Ltd.
Henderson Investment Ltd. Wheelock & Co. Ltd.
Henderson Land Development Co. Ltd.
Hong Kong Electric Holdings Ltd.
Hong Kong and China Gas Co. Ltd.
</TABLE>
xii
<PAGE>
The following table shows the actual performance of (i) the S&P
500-Registered Trademark- Index; (ii) the average of all of the stocks in each
of the DJIA, FT Index and HS Index; and (iii) a hypothetical investment in
approximately equal values of the ten stocks in each of the DJIA, FI Index and
HS Index having the highest dividend yield as of the close of the last business
day of the previous year for each year indicated.
<TABLE>
<CAPTION>
AVERAGE OF SELECT GLOBAL
DJIA, FTI AND 30
S&P 500-REGISTERED TRADEMARK- HSI STRATEGY
YEAR INDEX TOTAL TOTAL
ENDED 12/31 TOTAL RETURN(1)(2) RETURNS(2)(3) RETURN(4)
- --------------------- ----------------------------- ------------- -------------
<S> <C> <C> <C>
1983 22.31% 15.19% 18.68%
1984 5.97% 15.35% 18.93%
1985 31.06% 46.15% 48.85%
1986 18.54% 34.14% 39.19%
1987 5.67% 12.78% 17.55%
1988 16.34% 14.46% 20.67%
1989 31.23% 21.46% 17.14%
1990 -3.14% 7.33% 0.46%
1991 30.00% 29.02% 31.55%
1992 7.43% 12.75% 15.87%
1993 9.94% 52.00% 59.75%
1994 1.29% -7.31% -10.44%
1995 37.11% 26.95% 17.45%
1996 22.70% 28.66% 24.41%
1997 33.10% 7.81% 3.35%
1/1/98 through 17.72% 5.08% -5.93%
6/30/98
Average Annual 17.30% 20.21% 20.34%
Return, 1983-1997
</TABLE>
- ------------------------
(1) S&P 500-Registered Trademark- is a registered trademark of the McGraw-Hill
Companies, Inc.
(2) These returns reflect past performance and are not guarantees of future
performance and should not be used as a predictor of returns to be expected
in connection with a Trust. Such returns do not reflect sales charges,
commissions, expenses or taxes.
(3) The Average of Total Returns for the individual years is calculated by using
a simple arithmetic average of each of the three indices' change in value
plus the dividend return for each year. There is no published index
combining the total returns of the three indices. It is not representative
of any recognized index and is purely hypothetical. The source for the FT
Index and HS Index is Datastream International, Inc. The FT Index and HS
Index returns are calculated based on U.S. dollars and reflect currency
exchange rate fluctuation. Conversion into U.S. dollars was made based on
the exchange rate as of the last day of each year as supplied by a major
international bank. Past exchange rate fluctuations are not indicative of
future exchange rate movements. No adjustments have been made to reflect
taxes payable or withholding taxes.
(4) The hypothetical performance of the Select Global 30 strategy, which is
derived by averaging the total return in U.S. dollars of the Select 10
Strategy Stocks in each of the DJIA, FT Index and HS Index. Each respective
index's strategy total return represents the percentage change in value,
over a one year period, of a hypothetical investment in approximately equal
values of the 10 Highest Yielding Stocks in the Index ("Select 10 Strategy
Stocks") as of the close of the last business day of the previous year plus
the dividend return for the year on such stocks. These returns do not
reflect the performance of any actual trust.
xiii
<PAGE>
(footnote 4 continued)
The FT Index and HS Index Select 10 Strategy Stocks are calculated based on
U.S. dollars and reflect currency exchange rate fluctuation. Conversion into
U.S. dollars in the case of such stocks was made based on the exchange rate
as of the last day of each year as supplied by a major international bank.
Past exchange rate fluctuations are not indicative of future exchange rate
movements. No adjustments have been made to reflect taxes payable or
withholding taxes.
These returns reflect past performance (but not any trust) and are not
guarantees of future performance and should not be used as a predictor of
returns to be expected in connection with a Trust. These returns reflect
Trust sales charges (the full sales charge in the first year; reduced
rollover sales charges thereafter), estimated expenses and quarterly
reinvestment of dividends but do not reflect commissions incurred in buying
and selling portfolio securities or taxes. Reasonable assumptions were
relied upon where data was either unavailable or only partially available
and these assumptions could have a material impact on the historical
performance calculations. The actual returns of a particular Trust or
purchase of Units of a Trust will vary from the hypothetical strategy
returns due to, among other things, timing differences and the fact that an
actual Trust has sales charges, expenses and commissions.
-------------------
In 9 of the last 15 years, a hypothetical strategy of investing in
approximately equal values of Select 30 strategy stocks each year would have
yielded a higher total return than the Average of Total Returns.
The average annual return reflects a rate of growth per year (assuming
reinvestment of all dividends at the end of each period for the Average of the
DJIA, FT Index and HS Index) that a hypothetical investment in all of the stocks
in each Index and the Select Global 30 strategy would have provided over the
above 15 year period. The returns shown above are not guarantees of future
performance and should not be used as a predictor of returns to be expected in
connection with the Trust. These returns are not those of any trust. Returns
shown represent price changes plus dividend returns and do not reflect
commissions or taxes. Only the Select Global Strategy figures reflect Trust
sales charges (the full sales charge in the first year; reduced rollover sales
charges thereafter), estimated expenses and quarterly reinvestment of dividends.
As indicated in the above tables, the Select Global 30 strategy underperformed
the total returns of the Indices and the Average of Total Returns in certain
years and there can be no assurance that the portfolio of the Trust will
outperform the total returns of the Indices and the Average of Total Returns
over the life of the Trust. The actual returns of a particular Trust or purchase
of Units of a Trust will vary from the hypothetical strategy returns due to,
among other things, timing differences, and the fact that an actual Trust has
sales charges, expenses, and commissions.
xiv
<PAGE>
--PORTFOLIO CHARACTERISTICS. The Portfolio of the Trust consists of 30
issues of Securities, all of which are common stocks, issued by companies in the
categories set forth below:
<TABLE>
<CAPTION>
PERCENTAGE OF
AGGREGATE MARKET VALUE
CATEGORIES OF ISSUER PORTFOLIO NUMBERS OF TRUST PORTFOLIO*
- ------------------------------------------- --------------------------------- -----------------------
<S> <C> <C>
Integrated Petroleum....................... 3, 5 6.64 %
Telecommunications......................... 1 3.34 %
Heavy Construction Equipment 2 3.36 %
Photographic Equipment..................... 4 3.36 %
Automotive................................. 6 3.35 %
Paper, Packaging Products, Building
Materials................................ 7 3.40 %
Consumer, Chemical, Health Products........ 8, 16 6.66 %
Entertainment.............................. 15 3.34 %
Financial Services......................... 9, 22 6.68 %
Food, Tobacco, Beverage.................... 10 3.31 %
Food, Beverage............................. 11 3.33 %
Building Materials......................... 12 3.26 %
Industrial, Consumer Products.............. 13, 14 6.72 %
Transportation............................. 17 3.37 %
Insurance.................................. 18 3.39 %
Electric Power Generation.................. 19 3.33 %
Food....................................... 20 3.32 %
Property Investment........................ 21, 23, 24, 25, 26, 27, 28, 29,
30 29.85 %
</TABLE>
On the Date of Deposit, the aggregate market value of the Securities in the
Trust was $239,358.95.
* As of Initial Date of Deposit, subject to future change.
PERFORMANCE INFORMATION--Information on the performance of the Trust, one or
more Select Global 30 series and the Select Global 30 stock strategy on the
basis of changes in Unit price (total return) may be included from time to time
in advertisements, sales literature and reports to current or prospective Unit
Holders. Average annualized returns may also be shown for consecutive series of
the same Select Global 30 Portfolio cycle. Information on the performance of the
Select 30 stocks contained in this Prospectus, as further updated, may also be
included from time to time in such material. Performance of individual Select
Global 30 Portfolios may also be shown along with performance of the other
Select Global 30 Portfolios for comparable (though not necessarily identical)
periods and on a combined basis. Total return for the Select 30 strategy is
computed by dividing share price changes plus dividends reinvested quarterly by
initial share prices, but does not reflect commissions or taxes which would
decrease the return. Actual average annualized return figures of a Portfolio
would reflect deduction of the maximum sales charge. Material reflecting annual
performance of a hypothetical investment in the Select Global 30 stock strategy
may not reflect commissions, taxes, sales charges or expenses. No provision is
made for any income taxes payable or withholding taxes. Past performance cannot
guarantee future results.
LITIGATION AND LEGISLATION--Philip Morris Companies common stock is included
in the Portfolio. Pending legal proceedings against Philip Morris cover a wide
range of matters including product liability and consumer protection. Damages
claimed in many of the smoking and health cases alleging personal injury (both
individual and class actions), and in health cost recovery cases brought by
governments, unions and similar entities seeking reimbursement for health care
expenditures, aggregate many billions of dollars.
xv
<PAGE>
In June 1997, Philip Morris and other companies in the U.S. tobacco industry
entered into a settlement of significant litigation and regulatory issues
affecting the industry generally. While the costs of that settlement to the
tobacco industry would have been great and would have had a material adverse
effect on the financial performance of the domestic tobacco business of Philip
Morris, industry leaders considered that it at least would reduce uncertainties
facing the industry and increase stability in business and capital markets.
Proposed legislation threatens the negotiated settlement, would substantially
change many aspects of it and would increase the uncertainty surrounding the
proposed resolution of issues that could adversely affect the volume, operating
revenues and financial position of tobacco companies such as Philip Morris. Such
legislation would have a devastating impact on the company and its stockholders,
among others.
The Sponsor cannot predict the outcome of the litigation pending against
Philip Morris or how the current uncertainty concerning regulatory and
legislative measures will ultimately be resolved. The Sponsor cannot predict
whether these and other possible developments will have a material effect on the
price of Philip Morris stock over the term of the Portfolio, which could in turn
adversely affect Unit prices. A substantial decline in the price of Philip
Morris stock may result in a substantial decline in the value of a Unit.
Except as stated above, the Sponsor does not know of any pending litigation
as of the initial date of deposit that might reasonably be expected to have a
material adverse effect on the Portfolio, although pending litigation may have a
material adverse effect on the value of Securities in the Portfolio. In
addition, at any time after the initial date of deposit, litigation may be
initiated on a variety of grounds, or legislation may be enacted, affecting the
Securities in the Portfolio or the issuers of the Securities. Changing
approaches to regulation, particularly with respect to the environment or with
respect to the petroleum or tobacco industry, may have a negative impact on
certain companies represented in the Portfolio. There can be no assurance that
future litigation, legislation, regulation or deregulation will not have a
material adverse effect on the Portfolio or will not impair the abilities of the
issuers of the Securities to achieve their business goals. From time to time
Congress considers proposals to reduce the rate of the dividends-received
deduction. This type of legislation, if enacted into law, would adversely affect
the after-tax return of investors who can take advantage of the deduction.
xvi
<PAGE>
INDEPENDENT AUDITORS' REPORT
THE UNIT HOLDERS, SPONSOR AND TRUSTEE
MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST
SELECT GLOBAL SERIES 98-4
SELECT GLOBAL 30 PORTFOLIO 98-4
We have audited the accompanying statement of financial condition and
schedule of portfolio securities of the Morgan Stanley Dean Witter Select Equity
Trust Select Global Series 98-4 Select Global 30 Portfolio 98-4 as of June 30,
1998. These financial statements are the responsibility of the Trustee. (See
note (f) to the statement of financial condition). Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. 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 an irrevocable letter of credit and contracts for the purchase
of securities, as shown in the statement of financial condition and schedule of
portfolio securities as of June 30, 1998, by correspondence with The Bank of New
York, the Trustee. An audit also includes assessing the accounting principles
used and significant estimates made by the Trustee, 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 statement of financial condition and schedule of
portfolio securities referred to above present fairly, in all material respects,
the financial position of the Morgan Stanley Dean Witter Select Equity Trust
Select Global Series 98-4 Select Global 30 Portfolio 98-4 as of June 30, 1998 in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
June 30, 1998
New York, New York
xvii
<PAGE>
STATEMENT OF FINANCIAL CONDITION
MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST
SELECT GLOBAL SERIES 98-4
SELECT GLOBAL 30 PORTFOLIO 98-4
DATE OF DEPOSIT, JUNE 30, 1998
<TABLE>
<S> <C>
TRUST PROPERTY
Sponsor's Contracts to purchase
underlying Securities backed by an
irrevocable letter of credit (a)... $239,358.95
Organizational costs (b)............ 105,138.00
-----------
Total............................. $344,496.95
-----------
-----------
LIABILITY AND INTEREST OF UNIT HOLDERS
Liability--
Payment of deferred portion of
sales charge (c)................. $ 5,000.00
Accrued liability (b)............. 105,138.00
-----------
Subtotal.......................... $110,138.00
-----------
Interest of Unit Holders--
Units of fractional undivided
interest outstanding:
Cost to investors (d)............. $241,360.00
Gross underwriting commissions
(e).............................. (7,001.05)
-----------
Net amount applicable to
investors.......................... 234,358.95
-----------
Total............................. $344,496.95
-----------
-----------
</TABLE>
xviii
<PAGE>
<TABLE>
<S> <C> <S>
- ------------------------
(a) The aggregate U.S. dollar value of the Securities represented by Contracts
to Purchase listed under "Schedule of Portfolio Securities" based on the
U.S. dollar offer side value of the relevant exchange rate determined by
the Trustee at the Evaluation Time on June 30, 1998 and their cost to the
Trust are the same. The value is determined by the Trustee on the basis set
forth under "Public Offering of Units--Public Offering Price" as of the
Initial Date of Deposit. An irrevocable letter of credit drawn on The Chase
Manhattan Bank, New York Branch in the amount of $300,000.00 has been
deposited with the Trustee.
(b) Organizational costs borne by the Trust have been deferred and will be
amortized over the life of the Trust. Organizational costs have been
estimated based on a Trust with projected total assets of $25 million. To
the extent the assets of the Trust are less than $25 million, the
organizational costs may be less although the per Unit amount may increase.
To the extent the assets of the Trust are more, the organizational costs
may be higher.
(c) Represents the aggregate amount of mandatory distributions of $2.00 per 100
Units per month payable on the last business day of each month from August
31, 1998 through May 28, 1999. Distributions will be made to an account
maintained by the Trustee from which the Unit Holders' Deferred Sales
Charge obligation to the Sponsor will be satisfied. If Units are redeemed
prior to May 28, 1999, the remaining portion of the obligation applicable
to such Units will be transferred to such account on the redemption date.
(d) The aggregate Public Offering Price is computed on the basis set forth
under "Public Offering of Units--Public Offering Price" as of the
evaluation time on the Date of Deposit.
(e) The aggregate sales charge of 2.90% of the Public Offering Price per 100
Units is computed on the basis set forth under "Public Offering of
Units--Public Offering Price".
(f) The Trustee has custody of and responsibility for all accounting and
financial books, records, financial statements and related data of the
Trust and is responsible for establishing and maintaining a system of
internal controls directly related to, and designed to provide reasonable
assurance as to the integrity and reliability of, financial reporting of
the Trust. The Trustee is also responsible for all estimates and accruals
reflected in the Trust's financial statements. The Trustee determines the
price for each underlying Security included in the Trust's Schedule of
Portfolio Securities on the basis set forth in "Public Offering of
Units--Public Offering Price". Under the Securities Act of 1933, as amended
(the "Act"), the Sponsor is deemed to be an issuer of the Trust's Units. As
such, the Sponsor has the responsibility of an issuer under the Act with
respect to financial statements of the Trust included in the Registration
Statement under the Act and amendments thereto.
</TABLE>
xix
<PAGE>
SCHEDULE OF PORTFOLIO SECURITIES
MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST
SELECT GLOBAL SERIES 98-4
SELECT GLOBAL 30 PORTFOLIO 98-4
ON INITIAL DATE OF DEPOSIT, JUNE 30, 1998
<TABLE>
<CAPTION>
PERCENTAGE
CURRENT OF
ANNUAL PROPORTIONATE AGGREGATE COST OF
DIVIDEND RELATIONSHIP MARKET PRICE PER SECURITIES
PORTFOLIO PER NUMBER OF BETWEEN NO. VALUE OF SHARE TO TO
NO. NAME OF ISSUER SHARE (1) SHARES OF SHARES TRUST TRUST TRUST (2)(3)
- --------- ---------------------------------------- --------- --------- ----------- ----------- --------- ------------
<C> <S> <C> <C> <C> <C> <C> <C>
DJIA STOCKS
1. AT&T Corp. $ 1.32 140 0.11% 3.34% 5$7.1250 $ 7,997.50
2. Caterpillar 1.20 152 0.12 3.36 52.8750 8,037.00
3. Chevron 2.44 96 0.07 3.33 83.0625 7,974.00
4. Eastman Kodak Co. 1.76 110 0.09 3.36 73.0625 8,036.88
5. Exxon Corp. 1.64 111 0.09 3.31 71.3125 7,915.69
6. General Motors Corp. 2.00 120 0.09 3.35 66.8125 8,017.50
7. International Paper 1.00 189 0.15 3.40 43.0000 8,127.00
8. Minnesota Mining and Manufacturing Co. 2.20 97 0.08 3.33 82.1875 7,972.19
9. Morgan (J.P.) & Co. Incorporated 3.80 68 0.05 3.33 117.1250 7,964.50
10. Philip Morris Cos., Inc. 1.60 201 0.16 3.31 39.3750 7,914.38
FT INDEX STOCKS
11. Allied-Domeq PLC 0.411 849 0.66 3.33 9.4010 7,981.43
12. Blue Circle Industries PLC 0.241 1,379 1.07 3.26 5.6523 7,794.48
13. BOC Group PLC 0.514 579 0.45 3.30 13.6339 7,894.04
14. BTR PLC 0.197 2,886 2.24 3.42 2.8387 8,192.37
15. EMI Group 0.266 915 0.71 3.34 8.7498 8,006.02
16. Imperial Chemical Industries PLC 0.532 496 0.38 3.33 16.0635 7,967.48
17. Pennisular & Oriental Steam Navigation
Company 0.507 559 0.43 3.37 14.4104 8,055.40
18. Royal & Sun Alliance Insurance Group PLC 0.349 785 0.61 3.39 10.3444 8,120.36
19. Scottish Power 0.339 910 0.71 3.33 8.7665 7,977.47
20. Tate & Lyle PLC 0.283 1,001 0.78 3.32 7.9357 7,943.66
HS INDEX STOCK
21. Amoy Properties Ltd. 0.062 12,500 9.69 3.37 0.6453 8,066.70
22. Bank of East Asia Ltd. 0.094 7,400 5.73 3.35 1.0842 8,022.82
23. Hang Lung Development Co. Ltd. 0.096 8,000 6.20 3.32 0.9938 7,950.54
24. Henderson Investment Ltd. 0.054 15,000 11.62 3.26 0.5195 7,792.43
25. Henderson Land Development Co. Ltd. 0.320 2,000 1.55 2.76 3.2977 6,595.34
26. Hong Kong & Shanghai Hotels Ltd. 0.049 16,500 12.79 3.45 0.5001 8,252.24
27. Hysan Development Co. Ltd. 0.126 10,000 7.75 3.45 0.8260 8,260.30
28. Sino Land Co. Ltd. 0.034 24,000 18.60 3.49 0.3485 8,363.56
29. Wharf Holdings Ltd. 0.101 8,000 6.20 3.30 0.9874 7,898.91
30. Wheelock & Company Ltd. 0.056 14,000 10.85 3.45 0.5905 8,266.76
--------- ------------
129,043 $239,358.95
--------- ------------
--------- ------------
- ---
(1) Based on the latest quarterly or semiannual declaration in the case of
stocks in the DJIA and the most recent interim and final dividends declared
in the case of Foreign Securities. There can be no assurance that future
dividend payments, if any, will be maintained in an amount equal to the
dividend listed above.
(2) All Securities are represented entirely by contracts to purchase entered
into by the Sponsor on June 30, 1998. Valuation of Securities by the Trustee
was made on the basis of the closing sale price on the applicable exchange
converted into U.S. dollars at the offer side of the exchange rate at the
Evaluation Time on June 30, 1998. The aggregate purchase price to the
Sponsor for the Securities deposited in the Trust is $240,388.02.
(3) The Sponsor had a loss of $1,029.07 on the Initial Date of Deposit.
</TABLE>
xx
<PAGE>
The Sponsor or affilites thereof may perform or seek to perform investment
banking services for, and may have acted as an underwriter manager or co-manager
of a public offerign of the securities of, the above issuers during the last
three years. The Sponsor or affiliates may serve as specialists in the
Securities in this Trust on one or more stock exchanges, or markets, may make
markets in or may have a long or short position in or effect transactions in any
of these stocks or in options on any of these stocks, and may be on the opposite
side of public orders executedon the floor of an exchange where the Securities
are listed. An officer, director or employee of the Sponsor or affiliates may be
an officer or director of one or more of the issuers of the Securities in the
Trust. The Sponsor or affiliate may trade for its own account as an odd-lot
dealer, market maker, block positioner and/or arbitrageur in any of the
Securities or options relating thereto. The Sponsor, its affilites directors,
elected officers, employees and employee benefits programs may have either a
long or short position in any Security or option relating thereto.
xxi
<PAGE>
PROSPECTUS PART B
MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST
INTRODUCTION
This series of the Morgan Stanley Dean Witter Select Equity Trust (the
"Trust") was created under the laws of the State of New York pursuant to a Trust
Indenture and Agreement (the "Indenture") and a related Reference Trust
Agreement (the "Agreement") (collectively, the "Indenture and Agreement")*,
between Dean Witter Reynolds Inc. (the "Sponsor") and The Bank of New York (the
"Trustee"). The Sponsor is a principal operating subsidiary of Morgan Stanley
Dean Witter & Co., a publicly-held corporation. (See: "Sponsor".) The objectives
of the Trust are income and above average growth potential through investment in
a fixed portfolio of Securities (the "Portfolio") of publicly-traded common
stock. There is no assurance that these objectives will be met because the
Securities may appreciate or depreciate in value (or pay dividends) depending on
the full range of economic and market influences affecting corporate
profitability, the financial condition of issuers and the prices of equity
securities in general and the Securities in particular, fluctuations in exchange
rates, political and economic uncertainty, foreign security volatility and other
factors.
On the date of creation of the Trust (the "Initial Date of Deposit"), the
Sponsor deposited with the Trustee certain securities and/or contracts and funds
(represented by irrevocable letter(s) of credit issued by major commercial
bank(s)) for the purchase of such securities (collectively, the "Securities") at
prices equal to the market value of such Securities converted into U.S. dollars
in the case of Foreign Securities at the offer side value of the applicable
exchange rate as determined by the Trustee as of the Initial Date of Deposit
and/or cash (or a letter of credit in lieu of cash) with instructions to the
Trustee to purchase such Securities. (See: "Schedule of Portfolio Securities".)
The Trust was created simultaneously with the deposit of the Securities with the
Trustee and the execution of the Indenture and the Agreement. The Trustee then
immediately recorded the Sponsor as owner of the units (the "Units") comprising
the entire ownership of the Trust.
Through this prospectus (the "Prospectus"), the Sponsor is offering the
Units, including Additional Units, as defined below, for sale to the public. The
holders of Units (the "Unit Holders") will have the right to have their Units
redeemed at a U.S. dollar price based on the market value of the Securities (the
"Redemption Value") if they cannot be sold in the secondary market which the
Sponsor, although not obligated to, proposes to maintain. In addition, the
Sponsor may offer for sale, through this Prospectus, Units which the Sponsor may
have repurchased in the secondary market or upon the tender of such Units for
redemption. The Trustee has not participated in the selection of Securities for
the Trust, and neither the Sponsor nor the Trustee will be liable in any way for
any default, failure or defect in any Securities.
With the deposit of the Securities in the Trust on the Initial Date of
Deposit, the Sponsor established a proportionate relationship between the number
of shares of each Security in the Portfolio. (The original proportionate
relationships on the Initial Date of Deposit are set forth in "Schedule of
Portfolio Securities".) The original proportionate relationships are subject to
adjustment under certain limited circumstances. (See: "Administration of the
Trust--Portfolio Supervision".) The Sponsor is permitted under the Indenture and
Agreement to deposit additional Securities, contracts to purchase additional
Securities together with a letter of credit and/or cash (or a letter of credit
in lieu of cash) with instructions to the Trustee to purchase additional
Securities in order to create additional Units ("Additional Units"). Any such
additional deposits made in the 90 day period following the creation of the
Trust will consist of securities identical to those already in the Trust and
will be in amounts which maintain, to the extent practicable, the original
proportionate relationship between the number of shares of each Security and any
cash in the Portfolio. It may not be possible to maintain the exact original
proportionate relationship because of price changes or other reasons.
- ------------------------
* Reference is hereby made to said Indenture and Agreement and any statements
contained herein are qualified in their entirety by the provisions of said
Indenture and Agreement.
<PAGE>
Any cash deposited with instructions to purchase Securities may be held in
an interest bearing account by the Trustee. Any interest earned on such cash
will be the property of the Trust. Any cash deposited with instruction to
purchase Securities not used to purchase Securities and any interest not used to
pay Trust expenses will be distributed to Unit Holders on the earlier of the
first Distribution Date or 90 days after the Initial Date of Deposit. Additional
Units may be continuously offered for sale to the public by means of this
Prospectus. Subsequent to the 90 day period following the Initial Date of
Deposit any deposit of additional Securities and cash must exactly replicate the
portfolio immediately prior to such deposit.
The Sponsor may acquire large volumes of additional Securities for deposit
into the Trust over a short period of time. Such acquisitions may tend to raise
the market prices of these Securities. To minimize the risk of price
fluctuations when purchasing Securities, the Trust may purchase Securities at
the closing price as of the Evaluation Time by entering into trades with
unaffiliated broker/dealers for the purchase of large quantities of shares. Such
trades will be entered into at an increased commission cost which will be borne
by the Trust (see "Summary of Essential Information"). The Sponsor cannot
currently predict the actual market impact of the Sponsor's purchases of
additional Securities, because the actual volume of Securities to be purchased
and the supply and price of such Securities is not known.
Units will be sold to investors at the Public Offering Price next computed
after receipt of the investor's order to purchase Units, if Units are available
to fill orders on the day that that price is set. If Units are not available or
are insufficient to fill the order, the investor's order will be rejected by the
Sponsor. The number of Units available may be insufficient to meet demand
because of the Sponsor's inability to or decision not to purchase and deposit
underlying Securities in amounts sufficient to maintain the proportionate
numbers of shares of each Security as required to create additional Units. The
Sponsor may, if unable to accept orders on any given day, offer to execute the
order as soon as sufficient Units can be created. An investor who agrees to this
will be deemed to place a new order for that number of Units each day until that
order is accepted. The investor's order will then be executed, when Units are
available, at the Public Offering Price next calculated after such continuing
order is accepted. The investor will, of course, be able to revoke his purchase
offer at any time prior to acceptance by the Sponsor. The Sponsor will execute
orders to purchase in the order it determines that they are received, i.e.,
orders received first will be filled first, except that indications of interest
prior to the effectiveness of the registration of the offering of Trust Units
which become orders upon effectiveness will be accepted according to the order
in which the indications of interest were received.
On the Initial Date of Deposit, each Unit represented the fractional
undivided interest in the Securities and net income of the Trust set forth under
"Summary of Essential Information." Thereafter, if any Units are redeemed, the
amount of Securities in the Trust will be reduced, and the fractional undivided
interest represented by each remaining Unit in the balance of the Trust will be
increased. However, if Additional Units are issued by the Trust, the aggregate
value of the Securities in the Trust will be increased by amounts allocable to
such Additional Units and the fractional undivided interest in the balance will
be decreased. In connection with the deposit by the Sponsor of cash (or a letter
of credit in lieu of cash) with instructions to purchase additional Securities
in order to create Additional Units, to the extent that the price of a Security
fluctuates or exchange rates fluctuate between the time the cash is deposited
and the time the cash is used to purchase the Security, Units (including
previously issued Units) may represent more or less of that Security and more or
less of other Securities in the Portfolio of the Trust. Units will remain
outstanding until redeemed upon tender to the Trustee by any Unit Holder (which
may include the Sponsor) or until the termination of the Trust pursuant to the
Indenture and Agreement.
2
<PAGE>
THE TRUST
OBJECTIVES AND SECURITIES SELECTION
The objectives of the Trust are (i) to provide income and (ii) to offer
above-average growth potential through an investment for approximately one year
in a fixed diversified portfolio of Securities chosen in the manner described in
the "Summary of Essential Information" in Part A herein. There is, of course, no
guarantee that the Trust's objectives will be achieved.
The Trust consists of such of the Securities listed under "Schedule of
Portfolio Securities" as may continue to be held from time to time in the Trust
and any additional Securities and/or contributed cash acquired and held by the
Trust pursuant to the provisions of the Indenture together with undistributed
income therefrom and undistributed cash realized from the disposition of
Securities (See: "Administration of the Trust"). Neither the Sponsor nor the
Trustee shall be liable in any way for any default, failure or defect in any of
the Securities. However, should any contract deposited hereunder fail and no
substitute Security be acquired, the Sponsor shall cause to be refunded the
sales charge relating to such security, plus the portion of the cost of the
failed contract listed under "Schedule of Portfolio Securities".
Because certain Securities from time to time may be sold or their percentage
reduced under certain circumstances described herein, and because additional
Securities are expected to be deposited into the Trust from time to time, the
Trust is not expected to retain for any length of time its present size and
exact composition. (See: "Administration of the Trust--Portfolio Supervision".)
The Trust is organized as a unit investment trust and not as a management
investment company. Therefore, neither the Trustee nor the Sponsor has the
authority to manage the Trust's assets in an attempt to take advantage of
various market conditions to improve the Trust's net asset value, and further,
the Trust's Securities may be disposed of only under limited circumstances.
(See: "Administration of the Trust--Portfolio Supervision".)
There is no assurance that any dividends will be declared or paid in the
future on the Securities initially deposited or to be deposited subsequently in
the Trust.
SUMMARY DESCRIPTION OF THE PORTFOLIO
As used herein, the term "Common Stocks" refers to the common stocks (or
contracts to purchase such common stocks) (any such contracts to purchase common
stocks to be accompanied by an irrevocable letter of credit sufficient to
perform such contracts), initially deposited in the Trust and described under
"Schedule of Portfolio Securities". The term "Securities" includes any
additional common stock or contracts to purchase additional common stock
together with the corresponding irrevocable letter of credit, subsequently
acquired by the Trust pursuant to the Indenture and Agreement.
RISK FACTORS--SPECIAL CONSIDERATIONS
An investment in Units of the Trust should be made with an understanding of
the risks which an investment in publicly-traded common stock including foreign
common stocks may entail, including the risk that the value of the Portfolio and
hence of the Units will decline with decreases in the market value of the
Securities. See the risks described in the "Summary of Essential Information" in
Part A herein, as well as those set forth below. The Trust will be terminated
and liquidated no later than the Mandatory Termination Date set forth in the
"Summary of Essential Information."
On each Deferred Sales Charge Payment Date Securities will be sold pro rata
in an amount equal to $2.00 per 100 Units to pay the Deferred Sales Charge and
the proceeds will be distributed to the Sponsor. As Securities are sold to pay
the Deferred Sales Charge a Unit Holder's assets will be reduced and income per
Unit may be reduced.
3
<PAGE>
The value of the underlying Securities, and therefore the value of Units,
will fluctuate and can decline, depending upon the full range of economic and
market influences which may affect the market value of such Securities. Certain
risks are inherent in an investment in equity securities, including the risk
that the financial condition of one or more of the issuers of the Securities may
worsen or the general condition of the common stock market may weaken. In such
case, the value of the Portfolio Securities and hence the value of Units may
decline.
Common stocks are susceptible to general stock market movements and to
volatile and unpredictable increases and decreases in value as market confidence
in and perceptions of the issuers change from time to time. Such perceptions are
based upon varying reactions to such factors as expectations regarding domestic
and foreign economic, monetary and fiscal policies, inflation and interest
rates, currency exchange rates, economic expansion or contraction, and global or
regional political, economic or banking crises. The Sponsor cannot predict the
direction or scope of any of these factors. Additionally, equity markets have
been at historically high levels and no assurance can be given that these levels
will continue. Therefore there can be no assurance that the Trust will be
effective in achieving its objective over its one-year life or that future
portfolios selected using the same methodology as the Trust during consecutive
one-year periods will meet their objectives. The Trust is not designed to be a
complete equity investment program.
There are certain payment risks involved in owning common stocks, including
risks arising from the fact that holders of common and preferred stocks have
rights to receive payments from the issuers of those stocks that are generally
inferior to those of creditors of, or holders of debt obligations issued by,
such issuers. Furthermore, the rights of holders of common stocks are inferior
to the rights of holders of preferred stocks. Holders of common stocks of the
type held in the Portfolio have a right to receive dividends only when, as and
if, and in the amounts, declared by the issuer's board of directors and to
participate in amounts available for distribution by the issuer only after all
other claims on the issuer have been paid or provided for. By contrast, holders
of preferred stocks have the right to receive dividends at a fixed rate when and
as declared by the issuer's board of directors, normally on a cumulative basis,
but do not ordinarily participate in other amounts available for distribution by
the issuing corporation. Cumulative preferred stock dividends must be paid
before common stock dividends, and any cumulative preferred stock dividend
omitted is added to future dividends payable to the holders of such cumulative
preferred stock. Preferred stocks are also entitled to rights on liquidation
which are senior to those of common stocks. For these reasons, preferred stocks
entail less risk than common stocks. However, neither preferred nor common
stocks represent an obligation or liability of the issuer and therefore do not
offer any assurance of income or provide the degree of protection of capital of
debt securities.
The issuance of debt securities (as compared with both preferred and common
stock) and preferred stock (as compared with common stock) will create prior
claims for payment of principal and interest (in the case of debt securities)
and dividends and liquidation preferences (in the case of preferred stock) which
could adversely affect the ability and inclination of the issuer to declare or
pay dividends on its common stock or the rights of holders of common stock with
respect to assets of the issuer upon liquidation or bankruptcy. Further, unlike
debt securities which typically have a stated principal amount payable at
maturity (which value will be subject to market fluctuations prior thereto), or
preferred stocks which typically have a liquidation preference and which may
have stated optional or mandatory redemption provisions, common stocks have
neither a fixed principal amount nor a maturity date and have values which are
subject to market fluctuations for as long as the common stocks remain
outstanding. Additionally, market timing and volume trading will also affect the
underlying value of Securities, including the Sponsor's buying of additional
Securities and the Trust's selling of Securities during the Liquidation Period.
The value of the Securities in the Portfolio thus may be expected to fluctuate
over the entire life of the Trust to values higher or lower than those
prevailing on the Initial Date of Deposit. The Sponsor may direct the Trustee to
dispose of Securities under certain specified circumstances (see "Administration
of the Trust--Portfolio Supervision"). However, Securities will not be disposed
of solely as a result of normal fluctuations in market value.
4
<PAGE>
FOREIGN ISSUERS. Investment in a Portfolio in which the majority of the
securities are securities of foreign issuers involves investments risks that are
different in some respects from an investment in a trust that invests in
securities of domestic issuers. Those investment risks include future political
and economic developments and the possible establishment of exchange controls or
other governmental restrictions which might adversely affect the payment or
receipt of payment of dividends on the relevant Securities. In addition, for the
foreign issuers that are not subject to the reporting requirements of the
Securities Exchange Act of 1934, there may be less publicly available
information than is available from a domestic issuer. Also, foreign issuers are
not necessarily subject to uniform accounting, auditing and financial reporting
standards, practices and requirements such as those applicable to domestic
issuers.
FOREIGN EXCHANGE RATES. Securities issued by non-U.S. issuers generally pay
dividends in foreign currencies, and are principally traded in foreign
currencies. Therefore, there is a risk that the United States dollar value of
these Securities will vary with fluctuations in the United States dollar foreign
exchange rates for the relevant currencies. A decline in the U.K. or Hong Kong
foreign currency relative to the U.S. dollar will adversely affect the value of
the securities valued in such currency.
Moreover, speculation that a given exchange rate may change, even without
any actual change, may result in securities' price fluctuation. For example,
during October, 1997, the Hang Seng Index experienced substantial volatility,
including a decline in value of approximately 38% from October 20 through
October 28. This was due to among other things, the widely held concern and
speculation that the Hong Kong dollar's peg to the U.S. dollar (in place since
1983) might be removed in the near future, and a resulting steep rise in Hong
Kong's interest rates. As of May 31, 1998, the peg remains, although there can
be no assurance that this will continue, particularly in the light of concerns
about the possible devaluation of China's Renminbi. Should the peg be removed,
further and significant volatility and decline in Hang Seng stocks, including
the Trust Securities, may occur.
These events in Hong Kong and other Asian market have caused and may
continue to cause volatility and declines in U.S. and British common stocks,
including the Trust Securities.
A Portfolio of securities that are principally traded in foreign currencies
involves investment risks that are substantially different from an investment in
a trust which invests in securities that are principally traded in United States
dollars. This is because the United States dollar value of a Portfolio (and
hence of the Units) and of the distributions from the Portfolio will vary with
fluctuations in the United States dollar foreign exchange rates for the relevant
currencies. Most foreign currencies have fluctuated widely in value against the
United States dollar for many reasons, including supply and demand of the
respective currency, the soundness of the world economy and the strength of the
respective economy as compared to the economies of the United States and other
countries.
The post-World War II international monetary system was, until 1973,
dominated by the Bretton Woods Treaty, which established a system of fixed
exchange rates and the convertibility of the United States dollar into gold
through foreign central banks. Starting in 1971, growing volatility in the
foreign exchange markets caused the United States to abandon gold convertibility
and to effect a small devaluation of the United States dollar. In 1973, the
system of fixed exchange rates between a number of the most important industrial
countries of the world, among them the United States and most Western European
countries, was completely abandoned. Subsequently, major industrialized
countries have adopted "floating" exchange rates, under which daily currency
valuations depend on supply and demand in a freely fluctuating international
market. Many smaller or developing countries have continued to "peg" their
currencies to the United States dollar although there has been some interest in
recent years in "pegging" currencies to "baskets" of other currencies or to a
Special Drawing Right administered by the International Monetary Fund.
As stated above, since 1983, the Hong Kong dollar has been pegged to the
U.S. dollar, although there is no assurance that this will continue in the
future.
5
<PAGE>
In Europe a European Currency Unit ("ECU") has been developed. Currencies
are generally traded by leading international commercial banks and institutional
investors (including corporate treasurers, money managers, pension funds and
insurance companies). From time to time, central banks in a number of countries
also are major buyers and sellers of foreign currencies, mostly for the purpose
of preventing or reducing substantial exchange rate fluctuations.
Exchange rate fluctuations are partly dependent on a number of economic
factors including economic conditions within countries, the impact of actual and
proposed government policies on the value of the currencies, interest rate
differentials between the currencies, the balance of imports and exports of
goods and services and transfers of income and capital from one country to
another. These economic factors are influenced primarily by a particular
country's monetary and fiscal policies (although the perceived political
situation in a particular country may have an influence as well--particularly
with respect to transfers of capital). Investor psychology may also be an
important determinant of currency fluctuations in the short run. Moreover,
institutional investors trying to anticipate the future relative strength or
weakness of a particular currency may sometimes exercise considerable
speculative influence on currency exchange rates by purchasing or selling large
amounts of the same currency or currencies. However, over the long term, the
currency of a country with a low rate of inflation and a favorable balance of
trade should increase in value relative to the currency of a country with a high
rate of inflation and deficits in the balance of trade.
The following table sets forth recent end-of-month United States dollar
exchange rates for the British pound sterling and the Hong Kong dollar.
Fluctuations of the rates that have occurred in the past are not necessarily
indicative of fluctuations that may occur over the life of the Trust:
FOREIGN EXCHANGE RATES
END-OF-MONTH
U.S. DOLLAR
EXCHANGE RATES
<TABLE>
<CAPTION>
1996: U.S.$/L HK$/U.S.$ 1997: U.S.$/L HK$/U.S.$
- ----------------- --------- ----------- ----------------- --------- -----------
<S> <C> <C> <C> <C> <C>
January 1.51070 7.7322 January 1.60130 7.7490
February 1.53120 7.7313 February 1.62910 7.7435
March 1.52630 7.7331 March 1.63150 7.7490
April 1.50280 7.7348 April 1.62230 7.7464
May 1.54970 7.7372 May 1.63550 7.7485
June 1.55320 7.7413 June 1.66510 7.7470
July 1.55520 7.7337 July 1.64170 7.7410
August 1.56150 7.7320 August 1.62020 7.7495
September 1.56550 7.7330 September 1.61570 7.7380
October 1.62770 7.7323 October 1.67830 7.7300
November 1.68230 7.7320 November 1.68920 7.7303
December 1.70050 7.7345 December 1.65530 7.7495
Source: Datastream International, Inc.
</TABLE>
6
<PAGE>
The following table shows fluctuations in the value of the British pound and
Hong Kong dollar relative to the United States dollar in the past ten years.
FOREIGN EXCHANGE RATES
RANGE OF FLUCTUATIONS IN FOREIGN CURRENCY
<TABLE>
<CAPTION>
U.S. HONG KONG
DOLLAR/BRITISH DOLLAR/ U.S.
PERIOD POUND STERLING DOLLAR
- --------- ----------------- ---------------
<S> <C> <C>
1988 1.89610-1.66600 7.8225-7.7500
1989 1.82550-1.50900 7.8155-7.7730
1990 1.97750-1.59250 7.8155-7.7543
1991 1.99900-1.60000 7.7875-7.7160
1992 2.00440-1.50780 7.7770-7.7200
1993 1.59280-1.41820 7.7650-7.7235
1994 1.63800-1.46100 7.7525-7.7225
1995 1.64100-1.52900 7.7660-7.7300
1996 1.70050-1.49550 7.7444-7.7160
1997 1.70460-1.57750 7.7838-7.7210
Source: Datastream International, Inc.
</TABLE>
The Trustee will estimate current exchange rates for the relevant currencies
based on activity in the various currency exchange markets. However, since these
markets are volatile, depending on the activity at any particular time of the
large international commercial banks, various central banks, large multinational
corporations, speculators and other buyers and sellers of foreign currencies,
and since actual foreign currency transactions may not be instantly reported,
the exchange rates estimated by the Trustee may not be indicative of the amount
in United States dollars the Trust would receive had the Trustee sold any
particular currency in the market.
The foreign exchange transactions of a Trust may be concluded by the Trustee
with foreign exchange dealers acting as principals either on a spot (I.E., cash)
buying basis or on a forward foreign exchange basis on the date a Trust is
entitled to receive the applicable foreign currency. These forward foreign
exchange transactions will generally be of as short a duration as practicable
and will generally settle on the date of receipt of the applicable foreign
currency involving specific receivables or payables of the Trust accruing in
connection with the purchase and sale of its Securities and income received on
the Securities or the sale and redemption of Units. These transactions are
accomplished by contracting to purchase or sell a specific currency at a future
date and price set at the time of the contract. The cost to the Trust of
engaging in these foreign currency transactions varies with such factors as the
currency involved, the length of the contract period and the market conditions
then prevailing. Since transactions in foreign currency exchange are usually
conducted on a principal basis, fees or commissions are not normally involved.
Although foreign exchange dealers trade on a net basis, they do realize a profit
based upon the difference between the price at which they are willing to buy a
particular currency (bid price) and the price at which they are willing to sell
the currency (offering price). The relevant exchange rate used for evaluations
of the Securities may include the cost of buying or selling, as the case may be,
of any forward foreign exchange contract in the relevant currency.
EXCHANGE CONTROLS. On the basis of the best information available to the
Sponsor at the present time none of the Foreign Securities is subject to
exchange control restrictions under existing law which would materially
interfere with payment to the Portfolio of amounts due on the Foreign Securities
either because the particular jurisdictions have not adopted any currency
regulations of this type or because the issues qualify for an exemption or the
Portfolio, as an extraterritorial investor, has qualified its
7
<PAGE>
purchase of the Foreign Securities as exempt by following applicable
"validation" or similar regulatory or exemptive procedures. However, there can
be no assurance that exchange control regulations might not be adopted in the
future which might adversely affect payments to a Trust.
In addition, the adoption of exchange control regulations and other legal
restrictions could have an adverse impact on the marketability of international
securities in the Portfolio and on the ability of the Trust to satisfy its
obligation to redeem Units tendered to the Trustee for redemption (see
"Redemption").
LIQUIDITY. Foreign securities generally have not been registered under the
Securities Act of 1933 and may not be exempt from the registration requirements
of the Act. Sales of non-exempt Securities by a Trust in United States
securities markets are subject to severe restrictions and may not be
practicable. Accordingly, sales of these Securities by a Trust will generally be
effected only in foreign securities markets. Although the Sponsor does not
believe that a Trust will encounter obstacles in disposing of the Securities,
investors should realize that the Securities may be traded in foreign countries
where the securities markets are not as developed or efficient and may not be as
liquid as those in the United States. To the extent the liquidity of these
markets becomes impaired, however, the value of a Trust when responding to a
substantial volume of requests for redemption of Units (should redemptions be
necessary despite the market making activities of the Sponsor) received at or
about the same time could be adversely affected. This might occur, for example,
as a result of economic or political turmoil in a country in whose currency a
Trust had a substantial portion of its assets invested or should relations
between the United States and such foreign country deteriorate markedly.
Even though the Securities are listed, the principal trading market for the
Securities may be in the over-the-counter market. As a result, the existence of
a liquid trading market for the Securities may depend on whether dealers will
make a market in the Securities. There can be no assurance that a market will be
made for any of the Securities, that any market for the Securities will be
maintained or of the liquidity of the Securities in any markets made. In
addition, the Trust may be restricted under the Investment Company Act of 1940
from selling Securities to the Sponsor. The price at which the Securities may be
sold in connection with redemptions and the value of a Trust will be adversely
affected if trading markets for the Securities are limited or absent.
The information set forth below has been extracted from various governmental
and private publications, but no representation can be made as to its accuracy;
furthermore, no representation is made that any correlation exists between the
state of the economy of the United Kingdom and the economy of Hong Kong and the
value of any Securities held by the Trust.
UNITED KINGDOM
The Portfolio contains common stocks of United Kingdom companies engaged in
such industries as the building materials industry, the food and beverage
industry, the automotive/aviation industry, the transportation industry,
engineering, finance and utilities.
The economy of the United Kingdom is focused upon the private services
sector, which includes the wholesale and retail sector, banking, finance,
insurance and tourism. Services as a whole account for a majority of the United
Kingdom's gross national product and make a significant contribution to the
country's balance of payments. London is one of the world's major financial
centers, with a substantial part of the business international in nature. The
continuance of London as an international financial center is dependent on,
among other things, a favorable regulatory regime and its success against
foreign competition. Current risks affecting the United Kingdom's economy
include over-expansion of the economy, increased taxation and political
instability.
In addition, the United Kingdom is a member of the European Union (the
"EU"). The EU was established by the Treaty on Economic Union signed at
Maastricht which came into force on November 1, 1994. The aim of the Maastricht
Treaty, as it is sometimes known, is to build on the economic and monetary
integration put in place by the Treaties establishing the European Communities
and to extend the ambit of the EU to matters such as social policy,
international relations and defense. One of the central aims of the Maastricht
Treaty is to create an internal market in the EU. The basic legal framework to
assure the free circulation
8
<PAGE>
of goods, services and capital is well advanced and systematic controls at
internal borders on goods, capital and services have been abolished. The EU now
consists of 15 nations, having expanded with the accession of Sweden, Finland
and Austria on January 1, 1995. The EU is a powerful trade bloc with a combined
population of approximately 350 million people and an annual gross national
product of more than $5.5 trillion. The recent rapid political and social change
throughout Europe make the extent and nature of future economic development in
the United Kingdom and Europe and the impact of such development upon the value
of the Securities in the Portfolio impossible to predict at present. Volatility
in oil prices could slow economic development throughout Western Europe;
moreover, it is not possible to accurately predict the effect of the current
political and economic situation upon the long-term inflation and balance of
trade cycles and how these changes would affect the currency exchange rate
between the U.S. dollar and the British pound sterling.
At the start of the third stage of European economic and monetary union
("EMU") which is currently intended to begin on 1st January, 1999, the euro will
become the lawful currency of the participating member states and the previous
currencies of such states will cease to exist as currencies in their own right,
becoming instead denominations of the euro. It is presently uncertain whether
and, if so, when the United Kingdom will participate in EMU. The consequences of
EMU for the foreign exchange rates, interest rates and shares and securities
listed on the national stock exchanges of member states of the European Union,
whether or not a particular member state participates in EMU, are presently
unclear. Such consequences may adversely affect the value of the Securities in
the Trust.
HONG KONG
The Portfolio contains common stocks of companies trading on the Hong Kong
Exchange and engaged in such businesses as hotels, property and real estate,
textiles, telecommunications and utilities. Hong Kong, which was established as
a colony of Great Britain in the 1840's, is situated on and adjacent to the
southern coast of the People's Republic of China ("China"). It is currently a
Special Administrative Region of China. An investment in Securities in the HS
Index may be considered speculative and therefore may be appropriate only for
those investors able and willing to assume the increased risks of higher price
volatility, currency fluctuations and the increased risks of investment in Hong
Kong following its reversion to Chinese control. Under British rule, the Hong
Kong government has generally followed a laissez-faire policy towards industry,
and this general policy appears to have continued under Chinese rule. There are
limited import and export restrictions, and regulation of business is generally
less than in other developed countries.
HONG KONG'S REVERSION TO CHINESE SOVEREIGNTY. In December 1984, Great
Britain and China signed an agreement under which Hong Kong reverted to Chinese
sovereignty effective July 1, 1997. Hong Kong's new constitution is the Basic
Law (promulgated by China in 1990), which took effect on July 1, 1997. The Basic
Law binds executive, legislative and judicial branches of the government and
provides a framework in which Hong Kong's legal system can continue.
The Basic Law provides that for the next fifty years, Hong Kong will retain
a "high degree of autonomy," except in defense and foreign affairs. While China
has committed to preserve for fifty years the capitalist economy, legal system,
and social freedoms currently enjoyed in Hong Kong, there can be no assurance
that China will abide by its commitment. The implementation of the Basic Law is
subject to China's interpretation and no assurance can be given as to the
continuing effect of the resumption of Chinese sovereignty on Hong Kong or the
Hong Kong stock market. Hong Kong has been sensitive to political events.
Continued political instability could adversely affect the Hong Kong economy and
therefore the value of the Portfolio.
The first election of Legco was held in May, 1998. Disagreements had arisen
over the fairness of the election. In the event, the first election witnessed a
53% turn out of registered voters, and produced a Legco where the Democratic
Party hold thirteen of the available sixty seats, forming the largest single
block of party affiliated Legco members. However, continued doubts about the
effective nature of Legco's influence as a governing body, concerns about
China's commitment to the political autonomy of Hong Kong and disagreements
between members of Legco may affect public confidence in the securities markets,
increase market volatility and may adversely affect the Trust.
9
<PAGE>
Hong Kong Exchange
Formal trading of securities was established in Hong Kong in 1891, when the
Association of Stockbrokers in Hong Kong was formed. It was renamed the Hong
Kong Stock Exchange in 1914. In 1969, the Far East exchange was formed, followed
by the Kam Ngan Stock Exchange in 1971 and the Kowloon Stock Exchange in 1972.
These four exchanges were merged to form The Stock Exchange of Hong Kong Limited
(the "Hong Kong Exchange"), which commenced trading on April 2, 1986. With a
total market capitalization as of April 30, 1998 of approximately US$377
billion, the Hong Kong Exchange is the second largest stock market in Asia,
measured by market capitalization, behind that of Japan. The Securities and
Futures Commission, which was established by the Hong Kong government in May
1989 in response to the difficulties encountered in Hong Kong's financial
markets at the time of the October 1987 world stock market crash, exercises
supervision of the securities, financial investment and commodities futures
industry.
Volatility of the Hang Seng Index
Securities prices on the Hang Seng Index can be highly volatile and are
sensitive to developments in both Hong Kong and China, as well as other world
markets. An investment in Hang Seng Index common stock, including the Securities
in this Trust, may be considered speculative and presenting substantial risks.
For example, in 1989, the Hang Seng Index rose to 3,310 in May from its
previous year-end level of 2,687 but fell to 2,094 in early June following the
events at Tiananmen Square. The Hang Seng Index gradually climbed in subsequent
months but fell by 181 points on October 13, 1989 (approximately 6.5%) following
a substantial fall in the U.S. stock market, and at the year end, closed at a
level of 2,837. Also during 1994, the Hang Seng Index lost approximately 31% of
its value.
As a further example, during October, 1997, the Hang Seng Index experienced
substantial volatility, including a decline in value of approximately 38% from
October 20 through October 28, 1997. This was due to among other things, the
widely held concern and speculation that the Hong Kong dollar's peg to the U.S.
dollar (in place since 1983) might be removed in the near future, and a
resulting steep rise in Hong Kong's interest rates. As of May 31, 1998, the peg
remains, although there can be no assurance that this will continue,
particularly in the light of concerns about the possible devaluation of China's
Renminbi. Should the peg be removed, further and significant volatility and
decline in Hang Seng stocks, including the Trust Securities, may occur.
These events in Hong Kong and other Asian market have caused and may
continue to cause volatility and declines in U.S. and British common stocks,
including the Trust Securities.
There can be no assurance that similar volatility will not be experienced in
the future. Factors which may cause added volatility of the Hang Seng Index
include, but are not limited to, those discussed below. (See "Additional Hong
Kong Risk Factors" below.)
The following table demonstrates the volatility of the Hang Seng Index in
comparison to that of the Financial Times Index and the Dow Jones Industrial
Average by showing for each index the number of trading days during the period
from January 1, 1997 through December 31, 1997 on which the value of the index
in local currency gained or lost 1%, 2% and 3% of its value as of the previous
trading day.
<TABLE>
<CAPTION>
NUMBER OF TRADING DAYS WITH GAINS OR
LOSSES SHOWN
PERCENTAGE -------------------------------------
GAINS OR LOSSES DOW JONES
IN VALUE OF HANG SENG FT INDUSTRIAL
INDEX INDEX INDEX AVERAGE
- -------------------------- --------- --------- ---------------
<S> <C> <C> <C>
1.00 - 1.99%.............. 58 45 61
2.00 - 2.99%.............. 24 5 13
3.00% or more............. 32 0 5
</TABLE>
10
<PAGE>
Since 1979, the Heng Seng Index has fallen 10% or more over a five-day
period an average of three times a year. Previous performance is no guarantee of
future results; any index may display more or less volatility in the future.
Hong Kong Real Estate Companies
The Hang Seng Index is heavily weighted in common stocks of companies
engaged in real estate asset management, development, leasing, property sales
and other related activities. Investment in securities issued by these real
estate companies should be made with an understanding of the many factors which
may have an adverse impact on the credit quality of the particular company or
industry. Generally, these include economic recession, the cyclical nature of
real estate markets, competitive overbuilding, the supply of land for
construction made available by the Hong Kong government, changing demographics,
changes in governmental regulations (including tax laws and environmental,
building, zoning and sales regulations), increases in real estate taxes or costs
of material and labor, the inability to secure performance guarantees or
insurance as required, the unavailability of investment capital and the
inability to obtain construction financing or mortgage loans at rates acceptable
to builders and purchasers of real estate. Additional risks include an inability
to reduce expenditures associated with a property (such as mortgage payments and
property taxes) when rental revenue declines, and possible loss upon foreclosure
of mortgaged properties if mortgage payments are not paid when due.
Recently, in the wake of Chinese economic development and reform, certain
Hong Kong real estate companies and other investors began purchasing and
developing real estate in China, including Beijing, the Chinese capital. By
1992, however, some of the major development areas in China began to experience
a rise in real estate prices and construction costs, a growing supply of real
estate and a tightening of credit markets. Speculative activities have abated
and rentals have also suffered in the subdued property market. Any worsening of
these conditions could affect the profitability and financial condition of Hong
Kong real estate companies and could have a materially adverse effect on the
value of the Portfolio. Hong Kong real estate companies also could be materially
adversely affected by other factors, including those discussed below (see
"Additional Hong Kong Risk Factors" below).
Additional Hong Kong Risk Factors
MOST FAVORED NATION STATUS. China (like most other nations) currently enjoys
a most favored nation status ("MFN Status") from the United States, which is
subject to annual review by the President of the United States. Revocation of
the MFN Status would have a severe effect on China's trade and thus could have a
materially adverse effect on the value of the Portfolio.
OTHER ECONOMIC FACTORS. Hong Kong is subject to a relatively high inflation
rate of approximately 8.7% in 1995 , 6% in 1996 and 5.8% in 1997. Any downturn
in economic growth or increase in the rate of inflation in Hong Kong could have
a materially adverse effect on the value of the Portfolio. In addition, risks
resulting from the $US/$HK pegging could have an adverse effect on the value of
the Portfolio. Because of Hong Kong's vulnerability as a small territory with an
open nature, the government often struggles in its attempt to protect the
economy from external influences. Due to strong economic ties that have
developed since 1978, the economy is particularly affected by factors in China.
The performance of certain companies listed on the Hong Kong Exchange is linked
to the economic climate of China. Any downturn in economic growth or increase in
the rate of inflation in China could have a materially adverse effect on the
value of the Portfolio.
YEAR 2000 PROBLEM
Like other investment companies, financial and business organizations and
individuals around the world, the Trust depends on the smooth functioning of
computer systems. The Trust could be adversely affected if computer systems,
such as those used by the Sponsor or Trustee, do not properly process and
calculate date-related information and data concerning dates on or after January
1, 2000. Many computer systems in use today cannot recognize the year 2000, but
revert to 1900 or some other date, due to the
11
<PAGE>
manner in which dates were encoded and calculated. That failure could have a
negative impact on the handling of securities trades, pricing, and Trust
services, among other things. This is commonly known as the "Year 2000 Problem."
The Sponsor and Trustee are taking steps that they believe are reasonably
designed to address the Year 2000 Problem with respect to computer systems that
they use. At this time, however, there can be no assurance that these steps will
be sufficient to avoid any adverse impact to the Trust, and interaction with
other non-complying computer systems may have an adverse effect on the Trust.
The Year 2000 Problem is expected to affect business entities, which may
include issuers of the Trust's Securities, to varying extent and based upon a
number of factors, including, but not limited to, industry sector and level of
technological sophistication. The Sponsor is unable to predict what impact, if
any, the Year 2000 Problem will have on issuers of the Securities contained in
the Trust.
DISTRIBUTION
The Record Dates and the Distribution Dates are set forth in Part A hereto.
(See: "Summary of Essential Information".) The distributions will be an amount
equal to such Unit Holder's pro rata portion of the amount of dividend income
received by the Trust (net of any foreign withholding taxes) and proceeds of the
sale of Portfolio Securities, including capital gains, not used for the
redemption of Units, if any (less the Trustee's fees, Sponsor's portfolio
supervision fees and expenses). Distributions for the account of beneficial
owners of Units registered in "street name" and held by the Sponsor will be made
to the investment account of such beneficial owners maintained with the Sponsor.
Whenever required for regulatory or tax purposes or if otherwise directed by the
Sponsor, the Trustee may make special distributions on special distribution
dates to Unit Holders of record on special record dates declared by the Trustee.
TAX STATUS OF THE TRUST
As used herein, the term "U.S. Holder" means an owner of a Unit that is for
United States federal income tax purposes a resident of the United States or a
United States domestic corporation. A partnership, estate or trust is a U.S.
Holder to the extent that income derived by such person is subject to tax in the
United States as income of a resident.
UNITED STATES TAXATION
In the opinion of Cahill Gordon & Reindel, special counsel for the Sponsor,
under existing Federal income tax law:
The Trust is not an association taxable as a corporation for Federal
income tax purposes, and income received by the Trust will be treated as
income of the Unit Holders in the manner set forth below.
Each Unit Holder will be considered the owner of a pro rata portion of
each asset in the Trust under the grantor trust rules of Sections 671-678 of
the Internal Revenue Code of 1986, as amended (the "Code"). The total tax
cost of each Unit purchased solely for cash will equal the cost of Units
(including the Initial Sales Charge) plus the amount of organizational
expenses borne by the Unit Holder. A Unit Holder should determine the tax
cost (in U.S. dollars) for each asset represented by the Holder's Units
purchased solely for cash by allocating the total cost (in U.S. dollars) for
such Units (including the Initial Sales Charge) among the assets in the
Trust represented by the Units in proportion to the relative fair market
values thereof on the date the Unit Holder purchases such Units.
The proceeds received by a Unit Holder upon termination of the Trust or
redemption of Units will be paid net of the Deferred Sales Charge. The
relevant tax reporting forms sent to Unit Holders will also reflect the
actual amounts paid to them, net of the Deferred Sales Charge. Accordingly,
Unit Holders should not increase the total cost for their Units by the
amount of the Deferred Sales Charge.
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A Unit Holder will be considered to have received all of the dividends
paid on the Holder's pro rata portion of each Security when such dividends
are received by the Trust including the portion of such dividend used to pay
ongoing expenses and organizational expenses. The amount of the dividend
payment will be its U.S. dollar value based on the exchange rate in effect
on the date the dividend payment is received by the Trust. In the case of a
corporate Unit Holder, the dividends on the U.S. Securities will qualify for
the 70% dividends received deduction for corporations to the same extent as
though the dividend paying stock were held directly by the corporate Unit
Holder. Dividends considered to have been received by a Unit Holder from
Foreign Securities will not qualify for the dividends-received deduction for
corporate Unit Holders because the dividends-received deduction is generally
only available for dividends received from domestic corporations.
As stated below under "United Kingdom Taxation," it is unclear whether
in practice U.S. Holders will be able to obtain directly Treaty Payments
(also described below) to which they are entitled under the U.S./U.K. income
tax treaty (the "Treaty"). However, the Inland Revenue has approved a
special procedure whereby the Trustee can claim Treaty Payments on behalf of
U.S. Holders of the U.K. Trust and distribute those payments to Unit
Holders. To the extent the Trustee obtains Treaty Payments, U.S. Holders
will report as gross income earned their pro rata share of dividends
received by the Trust as well as the amount of the associated tax credit
(described below). Such Holders will be entitled to either a foreign tax
credit or deduction for the U.K. tax withheld on such refund, subject to
applicable limitations on such credit or deduction under the Code.
An individual Unit Holder who itemizes deductions will be entitled to an
itemized deduction for the Holder's pro rata share of fees and expenses
(other than organizational expenses added to basis) paid by the Trust as
though such fees and expenses were paid directly by the Unit Holder, but
only to the extent that this amount together with the Unit Holder's other
miscellaneous deductions exceeds 2% of the Holder's adjusted gross income. A
corporate Unit Holder will not be subject to this 2% floor.
Under the position taken by the Internal Revenue Service in Revenue
Ruling 90-7, a distribution by the Trustee to a Unit Holder (or to the
Holder's agent) of such Holder's PRO RATA share of the Securities in kind
upon redemption or termination of the Trust will not be a taxable event to
the Unit Holder. Such Unit Holder's basis for Securities so distributed will
be equal to the Holder's basis for the same Securities (previously
represented by the Holder's Units) prior to such distribution and the
holding period for such Securities will include the period during which the
Unit Holder held the Units. A Unit Holder will have a taxable gain or loss,
which will be a capital gain or loss except in the case of a dealer, when
the Unit Holder disposes of such Securities in a taxable transfer.
Under the income tax laws of the State and City of New York, the Trust
is not an association taxable as a corporation and the income of the Trust
will be treated as the income of the Unit Holders.
In connection with the In-Kind Rollover Option set forth under
"Termination--In-Kind Rollover Option", the receipt in-kind from the
Terminating Trust and the deposit in the New Trust of the Duplicated Stocks
will not be a taxable event to a Unit Holder. The Unit Holder's basis in
such Duplicated Stocks will be the Unit Holder's basis in such Duplicated
Stocks prior to the distribution from the Terminating Trust and the holding
period of such Duplicated Stocks will include the period during which the
Unit Holder held the Units. To the extent securities received in-kind are
sold by the Agent on behalf of the Unit Holder of such securities, a Unit
Holder will have a taxable gain or loss, which will be a capital gain or
loss except in the case of a dealer. The Unit Holder's basis in
non-Duplicated Stocks will equal the purchase price paid by the Agent. The
basis of the Duplicated Stocks and the non-Duplicated Stocks in the New
Trust should be increased by the amount of organizational expenses borne by
the Unit Holder.
The amount of the proceeds received by the Distribution Agent or by the
Trustee upon the sale of an underlying Security will be the U.S. dollar
value of the proceeds based on the exchange rate in effect on the date of
disposition. If the proceeds received by the Distribution Agent or by the
Trustee upon the sale of an underlying Security exceed a Unit Holder's
adjusted tax cost allocable to the Security disposed of, that Unit Holder
will realize a taxable gain to the extent of such excess.
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Conversely, if the proceeds received by the Distribution Agent or by the
Trustee upon the sale of an underlying Security are less than a Unit
Holder's adjusted tax cost allocable to the Security disposed of, that Unit
Holder will realize a loss for tax purposes to the extent of such difference
except that upon reinvestment of proceeds in a New Series in connection with
an exchange or non In-Kind Rollover the Internal Revenue Service may seek to
disallow such loss to the extent that the underlying securities in each
trust are substantially identical and the purchase of units of the New
Series takes place less than thirty-one days after the sale of the
underlying Security. Under the Code, capital gain of individuals, estates
and trusts from Securities held for more than 1 year, but not more than 18
months, is subject to a maximum nominal tax rate of 28% and for Securities
held for more than 18 months the maximum nominal tax rate is 20%. Such
capital gain may, however, result in a disallowance of itemized deducions
and/or affect a personal exemption phase-out. These maximum lower capital
gain rates will be unavailable with respect to the Securities which have
been held for less than a year and a day at the time of sale (including
sales occasioned by mandatory or early termination of the Trust or exchange
or rollover of Units). Unit Holders should note that their choice of
termination or rollover option will affect their ability to achieve an 18
month holding period.
The Internal Revenue Service Restructuring and Reform Act of 1998,
recently passed by the House of Representatives, would eliminate the 18
month holding period requirement for capital gains discussed above. As a
result, capital gain of individuals, estates and trusts from Securities held
for more than 1 year would generally be subject to a maximum nominal tax
rate of 20%. If enacted, this change will apply to amounts taken into
account on or after January 1, 1998.
UNITED KINGDOM TAXATION
In the opinion of Slaughter and May, special U.K. counsel to the Sponsor,
based on the terms of the Trust as described in the Prospectus, the following
summary accurately describes certain of the U.K. tax consequences to U.S.
Holders of Units of the Trust. This summary is based upon current U.K. law and
Inland Revenue practice, the Treaty and the U.S./U.K. convention relating to
estate and gift taxes (the "Estate Tax Treaty"). The summary is a general guide
only and is subject to any changes in U.K. law, or the practice relating thereto
and in the Treaty or Estate Tax Treaty occurring after the date of this
Prospectus which may affect (including possibly on a retroactive basis) the tax
consequences described herein.
TAXATION OF DIVIDENDS--Subject to the comments in the following paragraphs,
if a U.K. resident receives a dividend from a U.K. corporation, such resident is
generally entitled to a tax credit (currently equal to one quarter of the cash
dividend received), which may be offset against such resident's U.K. taxes, or,
in certain circumstances, repaid. However, under the provisions of the Finance
(No. 2) Act 1997 changes will be made to the taxation of dividends paid on or
after April 6, 1999 but the effective tax charge imposed on an individual
resident (for tax purposes) in the United Kingdom who receives a dividend from a
UK corporation will not change unless that individual's liability to income tax
on the total of the dividend and the tax credit is less than the tax credit. As
from April 6, 1999 such an individual will not be able to claim payment of the
excess.
Under the Treaty, a U.S. Holder who holds shares in a U.K. corporation
directly may, in appropriate circumstances, be entitled to a repayment of that
tax credit, but such repayment is subject to withholding tax at the rate of 15%
of the sum of the cash dividend and the credit (the net amount of such repayment
being a "Treaty Payment"). It is unclear, however, whether a U.S. Holder who
holds shares in a U.K. corporation indirectly through a trust, such as the
Trust, would also be entitled to a Treaty Payment where the dividend payments
are made directly to the Trust. Any claim for such a Treaty Payment would have
to be supported by evidence of each U.S. Holder's entitlement to the relevant
dividend and credit. It is therefore uncertain whether U.S. Holders would in
practice be able to secure the benefit of the Treaty and obtain Treaty Payments
directly from the U.K. Inland Revenue. While no formal procedure exists
generally for trusts to claim Treaty Payments on behalf of unitholders, the
Inland Revenue have confirmed a special procedure whereby they will allow the
Trustee to claim Treaty Payments on behalf of the U.S. Holders of the Trust
(treating the Trust, instead of the U.S. Holders, as the beneficiary of the
dividend). This concessionary treatment will enable U.S. Holders to benefit from
Treaty Payments without having to file individual claims with the Inland Revenue
and will avoid the uncertainty of whether in
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practice a U.S. Holder could obtain a Treaty Payment. US holders should note
that the reduction in the rate of tax credit from April 6, 1999 will mean that
most shareholders who are entitled to claim payment of tax credits pursuant to
double taxation conventions will not be able to obtain payment of tax credits.
Under the provisions of the Finance Act 1994, after July 1, 1994 a U.K.
company can elect to pay a "foreign income dividend" rather than an ordinary
dividend. If a company whose shares were held in the Portfolio of the Trust pays
a foreign income dividend, no tax credit would be attributable to it and,
therefore, no Treaty Payment could be claimed. However, under the provisions of
the Finance (No. 2) Act 1997 a UK company will no longer be able to elect for
dividends to be treated as foreign income dividends with respect to any dividend
paid on or after April 6, 1999.
TAXATION OF CAPITAL GAINS--U.S. Holders who are not resident or ordinarily
resident for tax purposes in the U.K. will not be liable for U.K. tax on capital
gains realized on the disposal of their Units unless such units are used, held
or acquired for the purposes of a trade, profession or vocation carried on in
the U.K. through a branch or agency or for the purposes of such branch or
agency.
U.K. INHERITANCE TAX--An individual Holder who is domiciled in the U.S. for
the purposes of the Estate Tax Treaty and who is not a national of the U.K. for
the purposes of the Estate Tax Treaty will not generally be subject to U.K.
inheritance tax in respect of Units in the Trust on the individual's death or on
a gift of such Units during the individual's lifetime provided that any
applicable U.S. federal gift or estate tax liability is paid, unless the Units
are part of the business property of a permanent establishment of the individual
in the U.K. or pertain to a fixed base in the U.K. used by an individual for the
performance of independent personal services. In the exceptional case where the
Units are subject both to U.K. inheritance tax and to U.S. federal gift or
estate tax, the Estate Tax Treaty generally provides for the tax paid in the
U.K. to be credited against tax paid in the U.S. or for tax paid in the U.S. to
be credited against tax payable in the U.K. based on priority rules set out in
that Treaty.
For the U.S. tax consequences to U.S. Holders, see "United States Taxation."
The taxation of non-U.S. Holders in the U.K. and in their own countries of
residence as a result of their ownership, sale, exchange or other disposition of
Units of the Trust will be governed by the relevant treaties, if any, between
the countries of residence of such non-U.S. Holders and the U.K. and by the
internal tax laws of such countries.The foregoing discussion is based on the
laws of the United Kingdom in effect on the date of this prospectus.
Furthermore, the foregoing discussion addresses only the United Kingdom tax
consequences to holders of Units in the Trust. Unit Holders should consult their
tax advisors with respect to the application of the above general information to
their own personal situation.
HONG KONG TAXATION
In the opinion of Slaughter and May, special Hong Kong counsel to the
Sponsor, the following summary accurately describes the Hong Kong tax
consequences under existing law to all Holders of Units of the Trust. This
discussion is for general purposes only and assumes that such Holder is not
carrying on a trade, profession or business in Hong Kong and has no profits
arising in or derived from Hong Kong in respect of the carrying on of such
trade, profession or business. Holders should consult their tax advisors as to
the Hong Kong tax consequences of ownership of the Units of the Trust applicable
to their particular circumstances.
TAXATION OF DIVIDENDS--Amounts in respect of dividends paid by corporations
listed on the Hong Kong Exchange to the Trust are not chargeable to tax in Hong
Kong under current legislation and practice and therefore will not be subject to
the deduction of any withholding tax.
PROFITS TAX--A Holder of Units of the Trust (other than a person carrying on
a trade, profession or business in Hong Kong) will not be subject to profits tax
on any gain or profits made on the redemption or other disposal of such Units.
ESTATE DUTY--Ownership of Units of the Trust will not give rise to a
liability to Hong Kong estate duty.
HONG KONG STAMP DUTY--No Hong Kong stamp duty will be payable in respect of
transactions in Units of the Trust.
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The foregoing discussion addresses only the Hong Kong tax consequences to
Holders of Units in the Trust. For the U.S. income tax consequences, see "United
States Taxation." The taxation of Unit Holders by other countries, including
their respective countries of residence, as a result of their ownership, sale,
exchange or other disposition of Units in the Trust will be governed by the tax
laws of such countries.
UNIT HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE
APPLICATION OF THE ABOVE GENERAL INFORMATION TO THEIR OWN PERSONAL SITUATION.
RETIREMENT PLANS
Units of the Trust may be suited for purchase by Individual Retirement
Accounts and pension plans or profit sharing and other qualified retirement
plans. Investors considering participation in any such plan should review
specific tax laws and pending legislation relating thereto and should consult
their attorneys or tax advisors with respect to the establishment and
maintenance of any such plan.
A qualified retirement plan provides employee retirement benefits and is
funded in whole or in part by contributions from the employer (including
contributions by a self-employed individual, in which case the plan is sometimes
called a Keogh plan). The employer contributions are, within limits, deductible
in determining the taxable income of the contributing employer for Federal
income tax purposes. Income received by the plan is not taxed when received by
it (nor are plan losses deductible), but distributions from the plan are
generally included in ordinary income of the distributee upon receipt. A lump
sum payout of the entire amount held in such a plan can, however, be eligible
for 5 or 10 year averaging.
An individual retirement account (an "IRA") is similar to a qualified
retirement plan but contributions to an IRA up to $2,000 per year are generally
made by an individual from earned income, rather than by an employer.
(Additional contributions of up to $2,000 may also be made to an IRA of an
individual's spouse provided the combined income of the individual and his or
her spouse is sufficient.) An individual is permitted to contribute to an IRA
even though he or she is also covered by a qualified retirement plan; but, in
the case of higher-income individuals who are active participants in a qualified
retirement plan, IRA contributions are neither currently deductible nor taxed
when paid out by the IRA (although income earned in the IRA is taxed as ordinary
income when distributed). The IRA beneficiary must not have attained age 70 1/2
by the close of the taxable year for which an IRA contribution is made; and 5
and 10 year averaging is not allowable for IRA distributions. Small employers
can establish so-called SIMPLE IRA plans allowing annual pre-tax contributions
by an employee to an IRA of up to $6,000 (subject to cost-of-living adjustments)
and requiring a minimum level of employer contributions. Two new types of IRAs
have been created by recent legislation effective beginning in 1998: Roth IRAs
and education IRAs. Contributions to Roth IRAs and education IRAs are not
deductible, but distributions of the income of the IRA can be received tax-free
if the applicable requirements are met (however, such income would be taxed upon
distribution if such requirements are not met). Distributions from a Roth IRA
are tax-free if made after satisfaction of a 5-year holding period and (i) on or
after attainment of age 59 1/2, (ii) upon death or disability, or (iii) to buy
or construct a first home as a principal residence for the individual, his
spouse or any child, grandchild or ancestor (up to $10,000). Distributions from
an education IRA are tax-free to the extent not in excess of the beneficiary's
qualified higher education expenses for the applicable year. (Distributions of
the non-deductible contributions themselves would in any event not be taxed.)
Contributions to Roth IRAs are limited to $2,000 per year (reduced by
contributions to other than IRAs); contributions to education IRAs are limited
to $500 per year for each beneficiary under age 18. Higher-income individuals
cannot establish Roth IRAs or education IRAs.
Distributions from qualified retirement plans must begin in minimum amounts
no later than the April 1 following the calendar year in which the employee
attains age 70 1/2 (or in the case of a person other than a 5% owner, April 1
following the calendar year in which the employee retires, if later) or within 5
years after his or her prior death if death occurs before distributions begin
(with later distribution allowed for a surviving spouse and with lifetime
annuity-type payouts to any beneficiary permitted). Minimum required
distributions from IRAs (other than Roth IRAs and education IRAs) are governed
by similar rules (except that minimum distributions to the individual for whom
the IRA is maintained must in all cases begin no later than the April 1
following the calendar year in
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which the individual attains age 70 1/2). Roth IRAs are not required to commence
distributions upon the individual's attainment of age 70 1/2 but are subject to
the foregoing post-death minimum distribution requirements upon the individual's
death. Education IRAs are required to distribute the account balance within 30
days of the death of the designated beneficiary to the beneficiary's estate.
Forms and arrangements for establishing qualified retirement plans and IRAs
are available from the Sponsor, as well as from other brokerage firms, other
financial institutions and others. Fees and charges with respect to such plans
and IRAs are not uniform and may vary from time to time as well as from
institution to institution.
Distributions received from a qualified retirement plan or IRA (other than
an education IRA) before the employee attains age 59 1/2 are subject to a 10%
additional tax on the amount includible in income, unless the distribution is
(i) made on or after the employee's death, (ii) attributable to his being
disabled, (iii) in the nature of a life annuity, (iv) made to the employee after
separation from service after attainment of age 55, (v) made from an IRA after
1997 to pay certain qualified higher education expenses for the individual, his
spouse or any child or grandchild, (vi) made from an IRA after 1997 to buy or
construct a first home as a principal residence for the individual, his spouse
or any child, grandchild or ancestor (up to $10,000), or (vii) made for other
reasons specified in the law. Distributions from an education IRA in excess of
qualified higher education expenses are subject to a 10% additional tax on the
amount includible in income, unless the distribution is (i) made on or after the
death of the designated beneficiary, (ii) attributable to the designated
beneficiary's being disabled, or (iii) made on account of a scholarship or
certain other educational assistance allowances. Qualifying distributions from a
qualified retirement plan or from an IRA may, however, be rolled over or
transferred to another qualified retirement plan or IRA under specified
circumstances.
The foregoing information is of a general nature, does not purport to be
complete and relates only to the Federal income tax rules applicable to
qualified retirement plans and IRAs. State and local tax rules and foreign tax
regimes may treat qualified retirement plans and IRAs differently. Anyone
contemplating establishing a qualified retirement plan or IRA or investing funds
of such a plan or IRA in Trust units should consult his, her or its tax advisor
with respect to the tax consequences of any such action and the application of
the foregoing general tax information to his, her or its particular situation.
PUBLIC OFFERING OF UNITS
PUBLIC OFFERING PRICE
The Public Offering Price of the Units is calculated on each business day
and is computed by adding to the aggregate U.S. dollar market value of the
Portfolio Securities (as determined by the Trustee) next computed after receipt
of a purchase order, divided by the number of Units outstanding, the sales
charge shown in "Summary of Essential Information". In order to enable
purchasers of Units on the date of this Prospectus to purchase Units at a Public
Offering Price of $10.00 per Unit, the Units outstanding as of the Evaluation
Time on the date of this Prospectus (all of which are held by the Sponsor) may
be split (or split in reverse). Commissions and any other transactional costs,
if any, incurred by the Sponsor in connection with the deposit of additional
Securities or contracts to purchase additional Securities for the creation of
Additional Units will be added to the Public Offering Price. After the Initial
Date of Deposit, a proportionate share of amounts in the Income Account and
Principal Account and amounts receivable in respect of stocks trading
ex-dividend (other than money required to be distributed to Unit Holders on a
Distribution Date and money required to redeem tendered Units) is added to the
Public Offering Price. In the event a stock is trading ex-dividend at the time
of deposit of additional Securities, an amount equal to the dividend that would
be received if such stock were to receive a dividend will be added to the Public
Offering Price. The Public Offering Price per Unit is calculated to five decimal
places and rounded up or down to three decimal places. The Public Offering Price
on any particular date will vary from the Public Offering Price on the Initial
Date of Deposit (set forth in the "Summary of Essential Information") in
accordance with fluctuations in the aggregate market value of the Securities,
the amount of available cash on hand in the Trust, the amount of certain accrued
fees and expenses and changes in the relevant foreign currency exchange rates
and applicable commissions.
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The sales charge consists of an Initial Sales Charge and a Deferred Sales
Charge. The Initial Sales Charge is computed by deducting the Deferred Sales
Charge ($20.00 per 100 Units) from the aggregate sales charge. The Initial Sales
Charge paid by a Unit Holder may be more or less than the Initial Sales Charge
on the Date of Deposit due to the fluctuation of the value of the Securities
from that on the Date of Deposit. The Deferred Sales Charge will initially be
$20.00 per 100 Units but will be reduced each month by one tenth; the Deferred
Sales Charge will be paid through monthly payments of $2.00 per 100 Units per
month commencing on the first Deferred Sales Charge Payment Date as shown on the
Summary of Essential Information through the sale of Securities on each such
date or distribution of cash available for such payment. To the extent the
entire Deferred Sales Charge has not been so paid at the time of repurchase,
redemption or exchange of the Units, any unpaid amount will be deducted from the
proceeds or in calculating an in kind distribution. For purchases of Units with
a value of $25,000 or more, the Initial Sales Charge is reduced on a graduated
basis as shown below under "Volume Discount". Units purchased pursuant to the
Reinvestment Program are subject only to any remaining Deferred Sales Charge
payments (see "Reinvestment Program"). Unit Holders investing the proceeds of
distribution from a previous terminating Series of Morgan Stanley Dean Witter
Select Equity Trust, upon purchase of Units of the Trust, will be subject only
to the Deferred Sales Charge on such Units. Unit Holders acquiring Units of the
Trust pursuant to an exchange of units of a different unit investment trust will
not be charged an initial sales charge at the time of the exchange but such
Units acquired will be subject to the Deferred Sales Charge.
As more fully described in the Indenture, the aggregate U.S. dollar market
value of the Securities is determined on each business day by the Trustee based
on closing prices and relevant currency exchange rates on the day the valuation
is made or, if there are no such reported prices or if certain events or
announcements have occurred, by taking into account the same factors referred to
under "Redemption--Computation of Redemption Price", except that the relevant
exchange rate used for determining the value of Securities in foreign currency
may include the cost of any forward contract to purchase the relevant currency.
The term business day, as used herein and under "Redemption", shall exclude
Saturdays, Sundays and the following holidays as observed by the New York Stock
Exchange, Inc.: New Year's Day, Washington's Birthday, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving and Christmas Day. Determinations
are effective for transactions effected subsequent to the last preceding
determination.
PUBLIC DISTRIBUTION
Units issued on the Initial Date of Deposit and Additional Units issued in
respect of additional deposits of Securities will be distributed to the public
by the Sponsor and through dealers at the Public Offering Price determined as
provided above. Unsold Units or Units acquired by the Sponsor in the secondary
market referred to below may be offered to the public by this Prospectus at the
then current Public Offering Price determined as provided above.
The Sponsor intends to qualify Units in states selected by the Sponsor for
sale by the Sponsor and through dealers who are members of the National
Association of Securities Dealers, Inc. Sales to dealers during the initial
offering period will be made at prices which reflect a concession of 65% of the
applicable sales charge, subject to change from time to time. In addition, sales
of Units may be made pursuant to distribution arrangements with certain banks
and/or other entities subject to regulation by the Office of the Comptroller of
the Currency which are acting as agents for their customers. These banks and/or
entities are making Units of the Trust available to their customers on an agency
basis. A portion of the sales charge paid by these customers is retained by or
remitted to such banks or entities in an amount equal to the fee customarily
received by an agent for acting in such capacity in connection with the purchase
of Units. The Glass-Steagall Act prohibits banks from underwriting certain
securities, including Units of the Trust; however, this Act does permit certain
agency transactions, and banking regulators have not indicated that these
particular agency transactions are impermissible under this Act. In Texas, as
well as certain other states, any bank making Units available must be registered
as a broker-dealer in that State. The Sponsor reserves the right to reject, in
whole or in part, any order for the purchase of Units.
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SECONDARY MARKET
While not obligated to do so, it is the Sponsor's present intention to
maintain, at its expense, a secondary market for Units of this series of the
Morgan Stanley Dean Witter Select Equity Trust and to continuously offer to
repurchase Units from Unit Holders at the Sponsor's Repurchase Price. The
Sponsor's Repurchase Price is computed by adding to the aggregate U.S. dollar
value of the Securities in the Trust based on the applicable exchange rate, any
cash on hand in the Trust including dividends receivable on stocks trading
ex-dividend (other than money required to redeem tendered Units and cash
deposited by the Sponsor to purchase Securities or cash held in the Reserve
Account) and deducting therefrom expenses of the Trust, Sponsor, counsel and
taxes, if any, any remaining unpaid portion of the Deferred Sales Charge and
cash held for distribution to Unit Holders of record as of a date on or prior to
the evaluation; and then dividing the resulting sum by the number of Units
outstanding, as of the date of such computation. In addition, after the initial
offering period, the Sponsor's Repurchase Price will be reduced to reflect the
estimated costs of liquidating the Securities to meet redemption requests. There
is no sales charge incurred when a Unit Holder sells Units back to the Sponsor
other than the payment of the unpaid portion of the Deferred Sales Charge. Any
Units repurchased by the Sponsor at the Sponsor's Repurchase Price may be
reoffered to the public by the Sponsor at the then current Public Offering
Price. Any profit or loss resulting from the resale of such Units will belong to
the Sponsor.
If the supply of Units exceeds demand (or for any other business reason),
the Sponsor may, at any time, occasionally, from time to time, or permanently,
discontinue the repurchase of Units of this series at the Sponsor's Repurchase
Price. In such event, although under no obligation to do so, the Sponsor may, as
a service to Unit Holders, offer to repurchase Units at the "Redemption Price".
Alternatively, Unit Holders may redeem their Units through the Trustee.
PROFIT OF SPONSOR
The Sponsor receives a sales charge on Units sold to the public and to
dealers. The Sponsor may have also realized a profit (or sustained a loss) on
the deposit of the Securities in the Trust representing the difference between
the cost of the Securities to the Sponsor and the cost of the Securities to the
Trust (for a description of such profit (or loss) and the amount of such
difference on the Initial Date of Deposit see: "Schedule of Portfolio
Securities"). The Sponsor may realize a similar profit (or loss) in connection
with each additional deposit of Securities. In addition, the Sponsor may have
acted as broker in transactions relating to the purchase of Securities for
deposit in the Trust. During the initial public offering period the Sponsor may
realize additional profit (or sustain a loss) due to daily fluctuations in the
prices of the Securities in the Trust and thus in the Public Offering Price of
Units received by the Sponsor. Cash, if any, received by the Sponsor from the
Unit Holders prior to the settlement date for purchase of Units or prior to the
payment for Securities upon their delivery may be used in the Sponsor's business
and may be of benefit to the Sponsor.
The Sponsor may also realize profits (or sustain losses) while maintaining a
secondary market in the Units, in the amount of any difference between the
prices at which the Sponsor buys Units and the prices at which the Sponsor
resells such Units (such prices include a sales charge) or the prices at which
the Sponsor redeems such Units, as the case may be.
VOLUME DISCOUNT
Although under no obligation to do so, the Sponsor intends to permit volume
purchasers of Units to purchase Units at a reduced sales charge. The Sponsor may
at any time change the amount by which the sales charge is reduced, or may
discontinue the discount altogether.
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The sales charge of 2.90% of the Public Offering Price will be reduced
pursuant to the following graduated scale for sales to any person of at least
$25,000 during the Initial Offering Period. The sales charge in the secondary
market, which will be reduced pursuant to the following graduated scale,
consists of an Initial Sales Charge and the remaining portions of the Deferred
Sales Charge. The reductions indicated will be applied to the Initial Sales
Charge.
<TABLE>
<CAPTION>
SALES CHARGE
----------------------------------------------
PERCENT OF
PERCENT OF THE AMOUNT INVESTED
PUBLIC OFFERING PRICE IN SECURITIES
---------------------- ---------------------
<S> <C> <C>
Less than $25,000....................... 2.90% 2.926%
$25,000 to $49,999...................... 2.75 2.775
$50,000 to $99,999...................... 2.50 2.523
$100,000 to $249,999.................... 2.25 2.270
$250,000 to $999,999.................... 2.00 2.00
$1,000,000 or more...................... 1.00 1.00
- ------------------------
* Deferred Sales Charge only.
</TABLE>
The reduced sales charges as shown on the chart above will apply to all
purchases of Units of this Trust on any one day by the same person, partnership
or corporation (other than a dealer), in the amounts stated herein. For
purchases of $250,000.00 or more, the sales charge consists solely of deferred
sales charge of $20.00 per 100 units for a purchase of $250,000.00 to
$999,999.99 and adjusted to total $10.00 per 100 units for a purchase of
$1,000,000.00 or more.
Units held in the name of the purchaser's spouse or in the name of a
purchaser's child under the age 21 are deemed for the purposes hereof to be
registered in the name of the purchaser. The reduced sales charges are also
applicable to a trustee or other fiduciary, including a partnership or
corporation purchasing Units for a single trust estate or single fiduciary
account.
The dealer concession will be 65% of the sales charge per Unit.
REDEMPTION
RIGHT OF REDEMPTION
One or more Units may be redeemed at the Redemption Price upon delivery of a
request for redemption to the Trustee at its unit investment trust office in the
City of New York, in form satisfactory to the Trustee. A Unit Holder may tender
its Units for redemption at any time after the settlement date for purchase. The
Redemption Price per Unit is calculated as set forth under "Computation of
Redemption Price". There is no sales charge incurred when a Unit Holder tenders
its Units to the Trustee for redemption other than the payment of any Deferred
Sales Charge then due. The London Stock Exchange and the Hong Kong Exchange are
open for trading on certain days which are U.S. holidays on which the Trust will
not transact business. The Foreign Securities will continue to trade on those
days and thus the value of the Portfolio may be significantly affected on days
when a Unit Holder cannot sell or redeem Units.
On the third business day following the tender to the Trustee of Units to be
redeemed the Unit Holder will be entitled to receive monies per Unit equal to
the Redemption Price per Unit as determined by the Trustee as of the Evaluation
Time on the date of tender.
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The "date of tender" is deemed to be the date on which Units are received by
the Trustee, except that as regards Units received after the Evaluation Time,
the date of tender is the next day on which the New York Stock Exchange is open
for trading, and such Units will be deemed to have been tendered to the Trustee
on such day for redemption at the Redemption Price computed on that day.
During the period in which the Sponsor maintains a secondary market for
Units, the Sponsor may repurchase any Unit presented for tender to the Trustee
for redemption no later than the close of business on the next Business Day
following such presentation.
In connection with each redemption the Sponsor will direct the Trustee to
redeem Units in accordance with the procedures set forth in either (a) or (b)
below.
(a) Units will be redeemed by the Trustee solely in cash for any one Unit
Holder tendering less than 25,000 Units. With respect to redemption requests
regarding at least 25,000 Units, the Sponsor may determine, in its discretion,
to direct the Trustee to redeem Units "in kind" by distributing Portfolio
Securities to the redeeming Unit Holder. The Sponsor may direct the Trustee to
redeem Units "in kind" even if it is then maintaining a secondary market in
Units of the Trust. Unit Holders redeeming "in kind" will receive an amount and
value of Trust Securities per Unit equal to the Redemption Price Per Unit as
determined as of the Evaluation Time next following the tender as set forth
herein under "Computation of Redemption Price" below. The distribution "in kind"
for redemption of Units will be held by the Trustee for the account of, and for
disposition in accordance with the instructions of, the tendering Unit Holder.
The tendering Unit Holder will be entitled to receive whole shares of each of
the underlying Portfolio Securities, plus cash equal to the Unit Holder's pro
rata share of the cash balance of the Income and Principal Accounts and cash
from the Principal Account equal to the fractional shares to which such
tendering Unit Holder is entitled. The Trustee, in connection with implementing
the redemption "in kind," procedures outlined above, may make any adjustments
necessary to reflect differences between the Redemption Price of Units and the
value of the Securities distributed "in kind" as of the date of tender. If the
Principal Account does not contain amounts sufficient to cover the required cash
distribution to the tendering Unit Holder, the Trustee is empowered to sell
Securities in the Trust Portfolio in the manner discussed below. A Unit Holder
receiving redemption distributions of Securities "in kind" may incur brokerage
costs and odd-lot charges in converting Securities so received into cash. The
Trustee will assess transfer charges to Unit Holders taking Securities "in kind"
according to its usual practice.
The portion of the Redemption Price which represents the Unit Holder's
interest in the Income Account shall be withdrawn from the Income Account to the
extent available. The balance paid on any redemption, including dividends
receivable on stocks trading ex-dividend, if any, shall be drawn from the
Principal Account to the extent that funds are available for such purpose. The
Trustee is authorized by the Agreement to sell Securities in order to provide
funds for redemption. To the extent Securities are sold, the size of the Trust
will be reduced. Such sales may be required at a time when Securities would not
otherwise be sold and might result in lower prices than might otherwise be
realized. The Redemption Price received by a tendering Unit Holder may be more
or less than the purchase price originally paid by such Unit Holder, depending
on the value of the Securities in the Portfolio at the time of redemption.
Moreover, due to the minimum lot size in which Securities may be required to be
sold, the proceeds of such sales may exceed the amount necessary for payment of
Units redeemed. Such excess proceeds will be distributed pro rata to all
remaining Unit Holders of record on the next following Record Date.
Securities to be sold for purposes of redeeming Units will be selected from
a list supplied by the Sponsor. If not so instructed by the Sponsor, the Trustee
will select the Securities to be sold so as to maintain, as closely as
practicable, the proportionate relationship between the number of shares of each
Security in the Trust.
(b) The Trustee will redeem Units in kind by an in kind distribution to The
Bank of New York as the Distribution Agent. A Unit Holder will be able to
receive in kind an amount per Unit equal to the Redemption Price per Unit as
determined as of the day of
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<PAGE>
tender. In kind distributions (the "In Kind Distribution") to Unit Holders will
take the form of whole shares of Securities. Cash will be distributed by the
Distribution Agent in lieu of fractional shares. The whole shares, fractional
shares and cash distributed to the Distribution Agent will aggregate an amount
equal to the Redemption Price per Unit.
Distributions in kind on redemption of Units shall be held by the
Distribution Agent, whom each Unit Holder shall be deemed to have designated as
his agent upon purchase of a Unit, for the account, and for disposition in
accordance with the instructions of, the tendering Unit Holder as follows:
(i) The Distribution Agent shall sell the In Kind Distribution as of the
close of business on the date of tender or as soon thereafter as possible and
remit to the Unit Holder not later than seven calendar days thereafter the net
proceeds of sale, after deducting brokerage commissions and transfer taxes, if
any, on the sale unless the tendering Unit Holder requests a distribution of the
Securities as set forth in paragraph (ii) below. The Distribution Agent may sell
the Securities through the Sponsor, and the Sponsor may charge brokerage
commissions on those sales.
(ii) If the tendering Unit Holder requests distribution in kind and tenders
in excess of 25,000 Units, the Distribution Agent shall sell any portion of the
In Kind Distribution represented by fractional interests in shares in accordance
with the foregoing and distribute the net cash proceeds plus any other
distributable cash to the tendering Unit Holder together with certificates or
book-entry credit to the account of the Unit Holder at the Sponsor representing
whole shares of each of the Securities comprising the In Kind Distribution.
The 25,000 Unit threshold will not apply to redemptions in kind in
connection with a rollover or on an In-Kind Distribution Date in connection with
the termination of the Trust.
The portion of the Redemption Price which represents the Unit Holder's
interest in the Income Account shall be withdrawn from the Income Account to the
extent available. The balance paid on any redemption, including dividends
receivable on stocks trading ex-dividend, if any, shall be drawn from the
Principal Account to the extent that funds are available for such purpose. To
the extent Securities are distributed in kind to the Distribution Agent, the
size of the Trust will be reduced. Sales by the Distribution Agent may be
required at a time when Securities would not otherwise be sold and might result
in lower prices than might otherwise be realized. The Redemption Price received
by a tendering Unit Holder may be more or less than the purchase price
originally paid by such Unit Holder, depending on the value of the Securities in
the Portfolio at the time of redemption.
COMPUTATION OF REDEMPTION PRICE
The Trust Evaluation per Unit is determined as of the Evaluation Time stated
under "Summary of Essential Information" above (a) semiannually, on the last
Business Day of each of the months of June and December, (b) on the day on which
any Unit of the Trust is tendered for redemption (unless tender is made after
the Evaluation Time on such day, in which case Tender shall be deemed to have
been made on the next day subsequent thereto on which the New York Stock
Exchange is open for trading) and (c) on any other Business Day desired by the
Sponsor or the Trustee, (1) by adding:
a. The aggregate U.S. dollar value of Securities in the Trust based on
the bid side of the applicable exchange rate, as determined by the Trustee;
b. Cash on hand in the Trust (in U.S. dollars based on the applicable
exchange rate), including dividends receivable on stocks trading
ex-dividend, other than money deposited to purchase Securities or money
credited to the Reserve Account;
c. All other assets of the Trust.
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<PAGE>
(2) and then, by deducting from the resulting figure: amounts representing
any applicable taxes or governmental charges payable by the Trust for the
purpose of making an addition to the reserve account (as defined in the
Agreement, the "Reserve Account"), amounts representing estimated accrued fees
and expenses of the Trust (including legal and auditing expenses), amounts
representing unpaid fees of the Trustee, the Sponsor and counsel, any remaining
unpaid portion of the Deferred Sales Charge and monies held to redeem tendered
Units and for distribution to Unit Holders of record as of the Business Day
prior to the Evaluation being made on the days or dates set forth above and
then;
(3) by dividing the result of the above computation by the total number of
Units outstanding on the date of such Evaluation. The resulting figure equals
the Redemption Price for each Unit.
In addition, after the initial offering period, the Redemption Price will be
reduced to reflect the estimated costs of liquidating the Securities to meet the
redemption.
The aggregate value of the Securities shall be determined by the Trustee in
good faith in the following manner: If the Securities are listed on one or more
national securities exchanges, such valuation shall be based on the closing
price on such exchange which is the principal market thereof and which shall be
deemed to be the New York Stock Exchange if the Securities are listed thereon
(unless the Trustee deems such price inappropriate as a basis for valuation). If
the Securities are not so listed, or, if so listed and the principal market
therefor is other than such exchange or there is no closing price on such
exchange, such valuation shall be based on the closing price in the
over-the-counter market (unless the Trustee deems such price inappropriate as a
basis for valuation) or if there is no such closing price, by any of the
following methods which the Trustee deems appropriate: (i) on the basis of
current bid prices of such Securities as obtained from investment dealers or
brokers (including the Depositor) who customarily deal in securities comparable
to those held by the Trust, or (ii) if bid prices are not available for any of
such Securities, on the basis of bid prices for comparable securities, or (iii)
by appraisal of the value of the Securities on the bid side of the market or by
such other appraisal as is deemed appropriate, or (iv) by any combination of the
above. The valuation of a foreign Security may take into consideration events or
announcements occurring after the close of the related foreign securities
exchange and prior to the Evaluation Time which could have a material effect on
the value of a Security. The relevant exchange rate used for evaluations of the
Securities will include the cost of any forward foreign exchange contract in the
relevant currency to correspond to the Trustee's settlement requirements for
redemption requests.
POSTPONEMENT OF REDEMPTION
The right of redemption may be suspended and payment of the Redemption Price
per Unit postponed for more than seven calendar days following a tender of Units
for redemption (i) for any period during which the New York Stock Exchange, Inc.
is closed, other than for customary weekend and holiday closings, or (ii) for
any period during which, as determined by the Securities and Exchange
Commission, either trading on the New York Stock Exchange, Inc. is restricted or
an emergency exists as a result of which disposal or evaluation of the
Securities is not reasonably practicable, or (iii) for such other periods as the
Securities and Exchange Commission may by order permit. The Trustee is not
liable to any person or in any way for any loss or damage that may result from
any such suspension or postponement.
EXCHANGE OPTION
Unit Holders of any Morgan Stanley Dean Witter Select Trust or any holders
of units of any other unit investment trust (collectively, "Holders") may elect
to exchange any or all of their units for units of one or more of any series of
the Morgan Stanley Dean Witter Select Equity Trust or for units of any other
Morgan Stanley Dean Witter Select Trusts, that may from time to time be made
available for such exchange by the Sponsor (the "Exchange Trusts"). Such an
exchange is implemented by a sale of Units
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<PAGE>
and a purchase of the units of an Exchange Trust. Such units may be acquired at
prices based on reduced sales charges per unit. The purpose of such reduced
sales charge is to permit the Sponsor to pass on to the Holder who wishes to
exchange units the cost savings resulting from such exchange. The cost savings
result from reductions in time and expense related to advice, financial planning
and operational expense required for the Exchange Option. The following Exchange
Trusts are currently available: the Dean Witter Select Municipal Trust, the Dean
Witter Select Government Trust and the Dean Witter Select Equity Trust.
Each Exchange Trust has different investment objectives: a Holder should
read the Prospectus for the applicable Exchange Trust carefully to determine the
investment objective prior to exercise of this option.
This option will be available provided the Sponsor maintains a secondary
market in units of the applicable Exchange Trust and provided that units of the
applicable Exchange Trust are available for sale and are lawfully qualified for
sale in the state in which the Holder is a resident. While it is the Sponsor's
present intention to maintain a secondary market for the units of Exchange
Trusts, there is no obligation on its part to do so. Therefore, there is no
assurance that a market for units will in fact exist on any given date in which
a Holder wishes to sell or exchange Units; thus, there is no assurance that the
Exchange Option will be available to any Unit Holder. The Sponsor reserves the
right to modify, suspend or terminate this option. Sixty days notice will be
given prior to the date of the termination of or a material amendment to the
Exchange Option except that no notice need be given in certain circumstances
approved by the Securities and Exchange Commission. In the event the Exchange
Option is not available to a Unit Holder at the time such Unit Holder wishes to
exercise such option, the Unit Holder will be immediately notified and no action
will be taken with respect to such tendered Units without further instruction
from the Unit Holder.
Exchanges will be affected in whole units only. Any excess proceeds from the
surrender of a Unit Holder's Units will be returned. Alternatively, Unit Holders
will be permitted to make up any difference between the amount representing the
Units being submitted for exchange and the amount representing the units being
acquired up to the next highest number of whole units.
An exchange of Units pursuant to the Exchange Option will constitute a
"taxable event" under the Code, i.e., a Holder will recognize a gain or loss at
the time of exchange, except that, upon an exchange of Units for units of any
series of the Exchange Trusts which are grantor trusts for U.S. federal income
tax purposes the Internal Revenue Service may seek to disallow any loss incurred
upon such exchange to the extent that the underlying securities in each Trust
are substantially identical and the purchase of the units of an Exchange Trust
takes place less than thirty-one days after the sale of the Units. In order to
avoid the potential disallowance of losses for tax purposes, a Unit Holder may
notify the Sponsor that the Unit Holder desires to purchase units of the
Exchange Trust on the thirty-first day after the day of the sale of the Units
exchanged. The proceeds of the Units surrendered will be deposited in the Unit
Holder's brokerage account at the Sponsor and may be withdrawn at any time. Cash
from the account will be utilized to purchase units of the Exchange Trust on the
thirty-first day after the day of sale of the Units exchanged in accordance with
the procedures set forth above. A Unit Holder may revoke the order to purchase
at any time prior to the purchase on the thirty-first day by calling his
financial advisor. Units will be purchased at a price based upon the net asset
value per unit plus the applicable sales charge of 2.0%. However, there can be
no assurance that a market for units will exist on such date or that units will
be available for purchase on such date. If units are unavailable, the Sponsor
may acquire units in the secondary market or create units as soon as possible
thereafter, which units will be sold by the Sponsor based on the net asset value
on the date of purchase of the units plus the applicable sales charge of 2.0%.
The order does not create a contract or option to acquire units. If units are
not held in the Sponsor's inventory on the 31st day or if the Sponsor does not
create additional units or is unable to acquire units in the secondary market,
units of the Exchange Trust will not be purchased and the cash will remain in
the Unit Holder's account. A Unit Holder who exchanges Units of one Trust for
units of another Trust should consult his or her tax advisor regarding the
extent to which such exchange results in the recognition of a loss for Federal
and/or state or local income tax purposes.
To exercise the Exchange Option, a Unit Holder should notify the Sponsor of
the desire to acquire units of one or more of the Exchange Trusts. Upon the
exchange of Units of the Trust, any Deferred Sales Charge balance will be
deducted from the exchange
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<PAGE>
proceeds. If units of the applicable outstanding series of the Exchange Trust
are at that time available for sale, the Unit Holder may select the series or
group of series for which the Units are to be exchanged. The Unit Holder will be
provided with a current prospectus or prospectuses relating to each series in
which interest is indicated.
The exchange transaction will operate in a manner essentially identical to
any secondary market transaction, i.e., Units will be repurchased at a price
based upon the aggregate bid side evaluation per Unit of the Securities in the
Portfolio. Units of the Exchange Trust will be sold to the Unit Holder at a
price equal to the net asset value based on the offering or bid side evaluation
(as applicable) per unit of the securities in the Exchange Trust's Portfolio,
plus accrued interest, if any, and the applicable sales charge of 2.0% of the
Public Offering Price per Unit. If the Exchange Trust is a series of Morgan
Stanley Dean Witter Select Equity Trust, the applicable sales charge on such
Trust will be the Deferred Sales Charge of such Trust which may be more or less
than 2.0% of the Public Offering Price.
REINVESTMENT PROGRAM
Unit Holders may elect to have the distributions with respect to their Units
automatically reinvested in additional Units of the Trust subject only to any
remaining portions of the Deferred Sales Charge. (Reinvestment Units are not
subject to the Initial Sales Charge.) The Unit Holder may participate in the
Trust's reinvestment program (the "Program") by filing with the Trustee a
written notice of election. The Unit Holder's completed notice of election to
participate in the Program must be received by the Trustee at least ten days
prior to the Record Date applicable to any distribution in order for the Program
to be in effect as to such distribution. Elections may be modified or revoked on
similar notice.
Such distributions, to the extent reinvested in the Trust, will be used by
the Trustee at the direction of the Sponsor in one or both of the following
manners. (i) The distributions may be used by the Trustee to purchase Units of
this Series of the Trust held in the Sponsor's inventory. The purchase price
payable by the Trustee for each of such Units will be equal to the applicable
Trust evaluation per Unit on (or as soon as possible after) the close of
business on the Distribution Date. The Units so purchased by the Trustee will be
issued or credited to the accounts of Unit Holders participating in the Program.
(ii) If there are no Units in the Sponsor's inventory, the Sponsor may purchase
additional Securities for deposit into the Trust (as described in "Prospectus
Part B--Introduction.") The additional Securities with any necessary cash will
be deposited by the Sponsor with the Trustee in exchange for new Units. The
distributions may then be used by the Trustee to purchase the new Units from the
Sponsor. The price for such new Units will be the applicable Trust evaluation
per Unit on (or as soon as possible after) the close of business on the
Distribution Date. (See "Public Offering of Units--Public Offering Price.") The
Units so purchased by the Trustee will be issued or credited to the accounts of
Unit Holders participating in the Program. The Sponsor may terminate the Program
if it does not have sufficient Units in its inventory or it is no longer deemed
practical to create additional Units.
No fractional Units will be issued under any circumstances. If, after the
maximum number of full Units has been issued or credited at the applicable
price, there remains a portion of the distribution which is not sufficient to
purchase a full Unit at such price, the Trustee will distribute such cash to
Unit Holders. The cost of administering the reinvestment program will be borne
by the Trust and thus will be borne indirectly by all Unit Holders.
RIGHTS OF UNIT HOLDERS
UNIT HOLDERS
A Unit Holder is deemed to be a beneficiary of the Trust created by the
Indenture and Agreement and vested with all right, title and interest in the
Trust created therein. A Unit Holder may at any time tender its Units to the
Trustee for redemption.
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<PAGE>
Unit Holders are required to hold their Units in uncertificated form. The
Trustee will credit a Unit Holder's account with the number of Units held by the
Unit Holder. Units are transferable only on the records of the Trustee upon
presentation of evidence satisfactory to the Trustee for each transfer and any
sums payable for taxes or other governmental charges imposed upon these
transactions and compliance with the formalities necessary to redeem Units.
CERTAIN LIMITATIONS
The death or incapacity of any Unit Holder will not operate to terminate the
Trust nor entitle the legal representatives or heirs of such Unit Holder to
claim an accounting or to take any other action or proceeding in any court for a
partition or winding up of the Trust.
No Unit Holder shall have the right to vote except with respect to removal
of the Trustee or amendment and termination of the Trust. (See: "Administration
of the Trust--Amendment" and "Administration of the Trust--Termination".) Unit
Holders shall have no right to control the operation or administration of the
Trust in any manner, except upon the vote of 51% of the Units outstanding at any
time for purposes of amendment, or termination of the Trust or discharge of the
Trustee, all as provided in the Agreement; however, no Unit Holder shall ever be
under any liability to any third party for any action taken by the Trustee or
Sponsor. Unit Holders will be unable to dispose of any of the Securities in the
Portfolio, as such, and will not be able to vote the Securities. The Trustee, as
holder of the Securities, will have the right to vote all of the voting
Securities held in the Trust, and will vote such Securities in accordance with
the instructions of the Sponsor, if given. Otherwise the Trustee shall vote as
it, in its sole discretion, shall determine.
EXPENSES AND CHARGES
EXPENSES
All or a portion of the organizational expenses and charges incurred in
connection with the establishment of the Trust including the cost of the
preparation, printing and execution of the Indenture, Registration Statement and
other documents relating to the Trust, Federal and State registration fees and
costs, the initial fees and expenses of the Trustee and legal and auditing
expenses will be paid by the Trust and amortized over the life of the Trust.
Historically, the costs of establishing unit investment trusts have been borne
by a trust's sponsor. Advertising and selling expenses will be paid by the
Sponsor at no cost to the Trust.
FEES
The Sponsor's fee, earned for portfolio supervisory services, is based upon
the largest number of Units outstanding during the computation period. The
Sponsor's fee as set forth in "Summary of Essential Information" may exceed the
actual costs of providing portfolio supervisory services for this Trust, but at
no time will the total amount the Sponsor receives for portfolio supervisory
services rendered to all series of the Morgan Stanley Dean Witter Select Equity
Trust in any calendar year exceed the aggregate cost to it of supplying such
services in such year.
Under the Indenture and Agreement for its services as Trustee and evaluator,
the Trustee receives the fee set forth in "Summary of Essential Information".
Certain regular expenses of the Trust, including certain mailing and printing
expenses, are borne by the Trust.
The Sponsor's fee, the Trustee's fees and the Trust expenses accrue daily
but are payable only on or before each Distribution Date from the Income
Account, to the extent funds are available and thereafter from the Principal
Account. Any of such fees may be increased without approval of the Unit Holders
in proportion to increases under the classification "All Services Less Rent" in
the
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Consumer Price Index published by the United States Department of Labor or, if
no longer published, a similar index. The Trustee, pursuant to normal banking
procedures, also receives benefits to the extent that it holds funds on deposit
in various non-interest bearing accounts created under the Indenture and
Agreement.
OTHER CHARGES
The following additional charges are or may be incurred by the Trust as more
fully described in the Indenture and Agreement: (a) fees of the Trustee for
extraordinary services, (b) expenses of the Trustee (including legal and
auditing expenses) and of counsel designated by the Sponsor, (c) various
governmental charges, (d) expenses and costs of any action taken by the Trustee
to protect the Trust and the rights and interests of the Unit Holders, (e)
indemnification of the Trustee for any loss, liability or expenses incurred by
it in the administration of the Trust without gross negligence, bad faith,
wilful malfeasance or wilful misconduct on its part or reckless disregard of its
obligations and duties, (f) indemnification of the Sponsor for any losses,
liabilities and expenses incurred in acting as Sponsor or Depositor under the
Agreement without gross negligence, bad faith, wilful malfeasance or wilful
misconduct or reckless disregard of its obligations and duties, (g) expenditures
incurred in contacting Unit Holders upon termination of the Trust, and (h)
brokerage commissions or charges incurred in connection with the purchase or
sale of Securities.
PAYMENT
The fees and expenses set forth herein are payable out of the Trust and when
so paid by or owing to the Trustee are secured by a lien on the Trust. Dividends
on the Securities are expected to be sufficient to pay the estimated expenses of
the Trust. If the balances in the Income and Principal Account are insufficient
to provide for amounts payable by the Trust, the Trustee has the power to sell
Securities to pay such amounts. To the extent Securities are sold, the size of
the Trust will be reduced and the proportions of the types of Securities may
change. Such sales might be required at a time when Securities would not
otherwise be sold and might result in lower prices than might otherwise be
realized. Moreover, due to the minimum lot size in which Securities may be
required to be sold, the proceeds of such sales may exceed the amount necessary
for the payment of such fees and expenses.
ADMINISTRATION OF THE TRUST
RECORDS AND ACCOUNTS
The Trustee will keep records and accounts of all transactions of the Trust
at its unit investment trust office at 101 Barclay Street, New York, New York
10286. These records and accounts will be available for inspection by Unit
Holders at reasonable times during normal business hours. The Trustee will
additionally keep on file for inspection by Unit Holders an executed copy of the
Indenture and Agreement together with a current list of the Securities then held
in the Trust. In connection with the storage and handling of certain Securities
deposited in the Trust, the Trustee is authorized to use the services of
Depository Trust Company. These services would include safekeeping of the
Securities, coupon-clipping, computer book-entry transfer and institutional
delivery services. The Depository Trust Company is a limited purpose trust
company organized under the Banking Law of the State of New York, a member of
the Federal Reserve System and a clearing agency registered under the Securities
Exchange Act of 1934.
DISTRIBUTION
Dividends payable to the Trust as a holder of record of its Securities are
credited by the Trustee to an Income Account (after conversion into U.S. dollars
at the applicable exchange rate, in connection with payments on the Foreign
Securities), as of the date on which the Trust is entitled to receive such
dividends. Other receipts, including return of investment and gain and amounts
received upon the sale, pursuant to the Indenture and Agreement, of rights to
purchase other Securities distributed in respect of the
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Securities in the Portfolio, are credited to a Principal Account (after
conversion into U.S. dollars at the applicable exchange rate, in connection with
payments on the Foreign Securities). Any distribution for each Unit Holder as of
a Record Date will be made on the next following Distribution Date or shortly
thereafter and shall consist of an amount approximately equal to the dividend
income per Unit, after deducting estimated expenses, if any, plus such Holder's
pro rata share of the distributable cash balance of the Principal Account.
Proceeds received from the disposition of any of the Securities which are not
used for redemption of Units will be held in the Principal Account to be
distributed on the Distribution Date following receipt of such proceeds. No
distribution need be made from the Principal Account if the balance therein is
less than $1.00 per 100 Units outstanding. A Reserve Account may be created by
the Trustee by withdrawing from the Income or Principal Accounts, from time to
time, such amounts as it deems requisite to establish a reserve for any taxes or
other governmental charges that may be payable out of the Trust. Funds held by
the Trustee in the various accounts created under the Indenture are non-interest
bearing to Unit Holders.
On each Deferred Sales Charge Payment Date Securities will be sold pro rata
in an amount equal to $2.00 per 100 Units to pay the Deferred Sales Charge and
the proceeds will be distributed to the Sponsor.
The Trustee will follow a policy that it will place securities acquisition
or disposition transactions with a broker or dealer only if it expects to obtain
favorable prices and executions of orders. Transactions in securities held in
the Trust are generally made in brokerage transactions (as distinguished from
principal transactions) and the Sponsor may act as broker therein and receive
commissions thereon if the Trustee expects thereby to obtain favorable prices
and execution. The furnishing of statistical and research information to the
Trustee by any of the securities dealers through which transactions are executed
will not be considered in placing securities transactions.
PORTFOLIO SUPERVISION
The original proportionate relationship between the number of shares of each
Security in the Trust will be adjusted to reflect the occurrence of a stock
dividend, a stock split, merger, reorganization or a similar event which affects
the capital structure of the issuer of a Security in the Trust but which does
not affect the Trust's percentage ownership of the common stock equity of such
issuer at the time of such event. If the Trust receives the securities of
another issuer as the result of a merger or reorganization of, or a spin-off,
split-off or split-up by the issuer of a Security included in the original
portfolio, the Trust may hold those securities as if they were one of the
Securities initially deposited and adjust the proportionate relationship
accordingly for all future subsequent deposits. The Portfolio of the Trust is
not "managed" by the Sponsor or the Trustee; their activities described below
are governed solely by the provisions of the Indenture and Agreement. The
Sponsor may direct the Trustee to dispose of Securities upon failure of the
issuer of a Security in the Trust to declare or pay anticipated cash dividends,
institution of certain materially adverse legal proceedings, default under
certain documents materially and adversely affecting future declaration or
payment of dividends, or the occurrence of other market or credit factors that
in the opinion of the Sponsor would make the retention of such Securities in the
Trust detrimental to the interests of the Unit Holders. The Sponsor will direct
the Trustee to sell Securities to pay portions of the Deferred Sales Charge.
Except as otherwise discussed herein, the acquisition of any Securities for the
Trust other than those initially deposited and deposited in order to create
additional Units, is prohibited. The Sponsor is authorized under the Indenture
to direct the Trustee to invest the proceeds of any sale of Securities not
required for the redemption of Units in eligible money market instruments
selected by the Sponsor which will include only negotiable certificates of
deposit or time deposits of domestic banks which are members of the Federal
Deposit Insurance Corporation and which have, together with their branches or
subsidiaries, more than $2 billion in total assets, except that certificates of
deposit or time deposits of smaller domestic banks may be held provided the
deposit does not exceed the insurance coverage on the instrument (which
currently is $100,000), and provided further that the Trust's aggregate holding
of certificates of deposit or time deposits issued by the Trustee may not exceed
the insurance coverage of such obligations and U.S. Treasury notes or bills
(which shall be held until the maturity thereof) each of which matures
28
<PAGE>
prior to the earlier of the next following Distribution Date or 90 days after
receipt, the principal thereof and interest thereon (to the extent such interest
is not used to pay Trust expenses) to be distributed on the earlier of the 90th
day after receipt or the next following Distribution Date.
During the life of the Trust, the Sponsor, as part of its administrative
responsibilities, shall conduct reviews to determine whether or not to recommend
the disposition of Securities. In addition, the Sponsor shall undertake to
perform such other reviews and procedures as it may deem necessary in order for
it to give the consents and directions, including directions as to voting on the
underlying Securities, required by the Indenture and Agreement. For the
administrative services performed in making such recommendations and giving such
consents and directions, and in making the reviews called for in connection
therewith the Sponsor shall receive the portfolio supervisory fee referred to
under "Summary of Essential Information".
VOTING OF THE PORTFOLIO SECURITIES
Pursuant to the Indenture and Agreement, voting rights with respect to the
Portfolio Securities and Replacement Securities, if any, will be exercised by
the Trustee in accordance with the Indenture or the directions given by the
Sponsor.
REPORTS TO UNIT HOLDERS
With each distribution, the Trustee will furnish to Unit Holders a statement
of the amount of income and other receipts distributed, including the proceeds
of the sale of the Securities (including the sale of any Securities to pay
portions of the Deferred Sales Charge), expressed in each case as a dollar
amount per Unit.
Within a reasonable period of time after the last Business Day in each
calendar year, but not later than February 15, the Trustee will furnish to each
person who at any time during such calendar year was a Unit Holder of record a
statement setting forth:
1. As to the Income and Principal Account:
(a) the amount of income received on the Securities;
(b) the amount paid for redemption of Units;
(c) the deductions for applicable taxes or other governmental
charges, if any, and fees and expenses of the Sponsor, the Trustee and
counsel;
(d) the deductions of portions of the Deferred Sales Charge;
(e) the amounts distributed from the Income Account;
(f) any other amount credited or deducted from the Income Account;
and
(g) the net amount remaining after such payments and deductions
expressed both as a total dollar amount and as a dollar amount per Unit
outstanding on the last business day of such calendar year.
2. The following information:
(a) a list of the Securities as of the last business day of such
calendar year;
(b) the number of Units outstanding as of the last business day of
such calendar year;
(c) the Unit Value (as defined in the Agreement) based on the last
Evaluation made during such calendar year; and
(d) the amounts actually distributed during such calendar year from
the Income and Principal Accounts, separately stated, expressed both as
total dollar amounts and as dollar amounts per Unit outstanding on the
Record Dates for such distributions.
29
<PAGE>
AMENDMENT
The Indenture and Agreement may be amended from time to time by the Trustee
and the Sponsor or their respective successors, without the consent of any of
the Unit Holders (a) to cure any ambiguity or to correct or supplement any
provision contained therein which may be defective or inconsistent with any
other provision contained therein; (b) to change any provision thereof as may be
required by the Securities and Exchange Commission or any successor governmental
agency exercising similar authority; or (c) to make such other provision in
regard to matters or questions arising thereunder as shall not adversely affect
the interest of the Unit Holders; provided, that the Indenture and Agreement may
also be amended from time to time by the parties thereto (or the performance of
any of the provisions of this Indenture and Agreement may be waived) with the
expressed written consent of Holders of Units evidencing 51% of the Units at the
time outstanding under the Indenture and Agreement for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture and Agreement or of modifying in any manner the rights of the Unit
Holders; provided, further however, that the Indenture and Agreement may not be
amended (nor may any provision thereof be waived) so as to (1) increase the
number of Units issuable in respect of the Trust above the aggregate number
specified in Part II of the Agreement or such lesser amount as may be
outstanding at any time during the term of the Indenture except as the result of
the deposit of Additional Securities, as therein provided, or reduce the
relative interest in the Trust of any Unit Holder without his consent, (2)
permit the deposit or acquisition thereunder of securities or other property
either in addition to or in substitution for any of the Securities except in the
manner permitted by the Trust Indenture as in effect on the date of the first
deposit of Securities or permit the Trustee to engage in business or investment
activities not specifically authorized in the Indenture and Agreement as
originally adopted or (3) adversely affect the characterization of the Trust as
a grantor trust for federal income tax purposes.
TERMINATION
The Indenture and Agreement provides that the Trust will be liquidated
during the Liquidation Period as set forth under "Summary of Essential
Information" and terminated at the end of such period. Additionally, if the
value of the Trust as shown by any Evaluation is less than forty percent (40%)
of the value of the Securities deposited in the Trust on the Initial Date of
Deposit and thereafter, the Trustee will, if directed by the Sponsor in writing,
terminate the Trust. The Trust may also be terminated at any time by the written
consent of Unit Holders owning 51% or more of the Units then outstanding. Unit
Holders will receive their final distributions (that is, their pro rata
distributions realized from the sale of Portfolio Securities plus any other
Trust assets, less Trust expenses) according to their Election Instructions. The
Election Instructions will provide for the following distribution options: (1)
cash distributions; (2) distributions "in kind"; or (3) investment of the
distributions attributable to the Unit Holder in units of a subsequent series of
the Morgan Stanley Dean Witter Select Equity Trust as designated by the Sponsor
(the "New Series") if such New Series is offered at such time (the "Rollover
Option"). Unit Holders who do not tender properly completed Election
Instructions to the Trustee will be deemed to have elected a cash distribution.
CASH OR "IN KIND" DISTRIBUTIONS. Unit Holders holding Units at termination
will receive distributions in respect of their Units in cash, unless they
indicate to the Trustee that they wish to receive termination distributions "in
kind", by returning to the Trustee properly completed Election Instructions
distributed by the Trustee to such Unit Holders of record 45 days prior to the
Termination Date. No minimum number of Units are needed to elect an in kind
distribution. The Trustee will duly honor such election instructions received on
or before the In Kind Distribution Date. Such Unit Holder will be entitled to
receive whole shares of each of the underlying Portfolio Securities and cash
from the Principal Account equal to the fractional shares to which such
tendering Unit Holder is entitled. A Unit Holder receiving distributions of
Securities "in kind" may incur brokerage and odd-lot costs in converting
Securities so received into cash and may incur expenses in connection with the
delivery of foreign securities. The Trustee will transfer the foreign securities
to be delivered in kind to the foreign custody account of, and for disposition
in accordance with the instructions of, the Unit Holder.
30
<PAGE>
NON IN-KIND ROLLOVER OPTION. A Unit Holder may elect to invest the
distributions attributable to the Unit Holder in units of a New Series subject
only to the deferred sales charge of the New Series. It is expected that the
terms of the New Series will be substantially the same as the terms of the Trust
described in this Prospectus, and that similar options to invest in a subsequent
series of the Trust will be exercisable as respects termination distributions
from each New Series of the Trust approximately one year after that New Series'
creation. The availability of this option does not constitute a solicitation of
an offer to purchase Units of a New Series or any other security. A Unit
Holder's election to exercise this option will be treated as an indication of
interest only. At any time prior to the purchase by a Unit Holder of units of a
New Series, such Unit Holder may change his investment strategy and receive, in
cash, the proceeds of the sale of the Securities.
IN-KIND ROLLOVER OPTION. The Sponsor may offer Unit Holders the ability to
"rollover" their Units of the Trust for Units of a subsequent series as set
forth below. If such feature is offered, the following structure will be
implemented for such rollovers. Although the Sponsor may offer Unit Holders this
additional termination alternative, the Sponsor reserves the right in its sole
discretion to decline to offer such alternative for any reason. If the Sponsor
determines to offer such alternative, it will notify Unit Holders who will then
notify the Sponsor whether they wish to participate. Such rollover will occur at
least 30 days prior to but not more than 65 days prior to the scheduled
termination of the Terminating Trust.
Unit Holders desiring to reinvest their interests in units of the Trust
("Terminating Trust") in Units of a newly created series of Morgan Stanley Dean
Witter Select Equity Trust, Select Global 30 Portfolio ("New Trust") may do so
by so advising their account executive. Such exchange will be effected by an in
kind redemption from the Terminating Trust and subsequent in kind deposit with
the Trustee of the New Trust, as follows:
The number and types of securities constituting a Unit of the New Trust will
be deposited in kind in the New Trust by The Bank of New York acting as agent on
behalf of a Unit Holder (the "Agent") in connection with the creation of a Unit
of the New Trust. Certain of the stocks contained in the Terminating Trust are
likely to be included in the portfolio of the New Trust ("Duplicated Stocks"). A
Unit Holder in the Terminating Trust electing to receive his interest in such
Terminating Trust in kind and desiring to purchase Units in the New Trust by an
in kind contribution to the New Trust would direct the Agent to carry out the
transactions necessary to consummate the in kind deposit. The Agent would be
authorized to receive the Unit Holder's in kind distribution from the
Terminating Trust and to assemble and deposit, on the Unit Holder's behalf, the
package of stocks needed to make up a Unit in the New Trust. Such assembly and
deposit would include an in kind contribution to the New Trust of an appropriate
amount of the Unit Holder's interest in Duplicated Stocks. Securities
distributed in kind from the Terminating Trust not required to make up a Unit in
the New Trust would be sold by the Agent with the cash proceeds of each sale
utilized by the Agent to purchase the stocks, other than the Duplicated Stocks,
necessary to constitute a Unit of the New Trust. The proceeds of such sales will
be reduced and the cost of such purchases will be increased by any applicable
brokerage commissions. If additional cash is needed to purchase stocks, such
cash would be paid to the Agent by the Unit Holder. Any cash not used to make up
a Unit in the New Trust would be distributed to the Unit Holder. Fractional
interests received from the Terminating Trust will be sold by the Agent with the
cash proceeds of such sale used to purchase securities for deposit in the New
Trust or, if not so utilized, distributed to the Unit Holder. Upon receipt of
the in kind deposit, the Trustee will issue the appropriate number of Units in
the New Trust to the Unit Holder on whose behalf the Agent acted. Units acquired
pursuant to an in kind deposit into a New Trust by a Unit Holder of a
Terminating Trust will not be subject to an Initial Sales Charge but only
subject to a Deferred Sales Charge.
The ability to purchase Units of the New Trust by the deposit of securities
in kind will also be offered to persons who were not Unit Holders in a
Terminating Trust and any such person may contribute whole shares in kind to a
New Trust. Such person will be required to pay the Initial Sales Charge to the
Sponsor in connection with the in kind purchase of Units, which Units will be
subject to a Deferred Sales Charge.
31
<PAGE>
METHOD OF SECURITIES DISPOSAL. The Trustee will begin to sell the remaining
Securities held in the Trust on the next business day following the In-Kind
Date. Since the Trust is not managed, Securities in the Portfolio must be sold
in accordance with the Indenture, which provides for sales over a period of days
or on any one day during the Liquidation Period set forth in the "Summary of
Essential Information". Daily proceeds of such sales will be deposited into the
Trust, will be held in a non-interest bearing account until distributed and will
be of benefit to the Trustee. The sales of Portfolio Securities may tend to
depress the market prices for such Securities and thus reduce the proceeds
available to Unit Holders. The Sponsor believes that gradual liquidation of
Securities during the Liquidation Period may mitigate negative market price
consequences stemming from the trading of large volumes of Securities over a
short period of time. There can be no assurance, however, that such procedures
will effectively mitigate any adverse price consequences of heavy volume trading
or that such procedures will produce a better price for Unit Holders than might
have been obtained had all the Securities been sold on one particular day during
the Liquidation Period.
The Trustee will, after deduction of brokerage charges and costs incurred in
connection with the sale of Securities, any fees and expenses of the Trust and
payment into the Reserve Account of any amount required for taxes or other
governmental charges that may be payable by the Trust, distribute to each Unit
Holder, upon surrender for cancellation of its Certificate, if any, after due
notice of such termination, such Unit Holder's pro rata share in the Income and
Principal Accounts. The sale of Securities in the Trust upon termination may
result in a lower amount than might otherwise be realized if such sale were not
required at such time. For this reason, among others, the amount realized by a
Unit Holder upon termination may be less than the amount paid by such Unit
Holder for Units.
Section 17(a) of the Investment Company Act of 1940 restricts purchases and
sales between affiliates of registered investment companies and those companies.
Pursuant to a recent exemptive order, each terminating Select Global 30
Portfolio Series can now sell securities to the next Series if those securities
will be contained in the portfolio of such next Series. The exemption will
enable each Series to eliminate commission costs on these transactions. The
price for those securities will be the closing sale price on the sale date on
the exchange where the securities are principally traded, as certified and
confirmed by the Trustee of each Series.
The Division of Investment Management of the SEC is of the view that the
rollover option constitutes an "exchange offer", for the purposes of Section
11(c) of the Investment Company Act of 1940, and would therefore be prohibited
absent an exemptive order. The Sponsor has received an exemptive order under
Section 11(c) which it believes permits it to offer the rollover, but no
assurance can be given that the SEC will concur with the Sponsor's position and
additional regulatory approvals may be required.
RESIGNATION, REMOVAL AND LIABILITY
REGARDING THE TRUSTEE
The Trustee shall be under no liability for any action taken in good faith
in reliance on prima facie properly executed documents or for the disposition of
monies or Securities in the Trust, nor shall the Trustee be liable or
responsible in any way for depreciation or loss incurred by reason of the
disposition of any Securities by the Trustee. However, the Trustee shall be
liable for wilful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its obligations and
duties under the Indenture and Agreement. In the event of a failure of the
Sponsor to act, the Trustee may act under the Indenture and Agreement and shall
not be liable for any such action taken by it in good faith. The Trustee shall
not be personally liable for any taxes or other governmental charges imposed
upon the Trust or in respect of the Securities or the interest thereon. The
Agreement also contains other customary provisions limiting the liability of the
Trustee and providing for the indemnification of the Trustee for any loss or
claim accruing to it without gross negligence, bad faith, wilful misconduct,
wilful misfeasance or reckless disregard of its duties and obligations under the
Agreement on its part.
32
<PAGE>
The Trustee or any successor may resign by executing an instrument in
writing, filing the same with the Sponsor and mailing a copy of such notice of
resignation to all Unit Holders then of record. Upon receiving such notice the
Sponsor will use its best efforts to appoint a successor Trustee promptly. If
the Trustee becomes incapable of acting or becomes bankrupt or its affairs are
taken over by public authorities, or upon the determination of the Sponsor to
remove the Trustee for any reason, either with or without cause, the Sponsor may
remove the Trustee and appoint a successor as provided in the Agreement. If
within 30 days of the resignation of a Trustee no successor has been appointed
or, if appointed, has not accepted the appointment, the retiring Trustee may
apply to a court of competent jurisdiction for the appointment of a successor.
The resignation or removal of a Trustee becomes effective only when the
successor Trustee accepts its appointment as such or when a court of competent
jurisdiction appoints a successor Trustee.
REGARDING THE SPONSOR
The Sponsor shall be under no liability to the Trust or to Unit Holders for
taking any action or for refraining from any action in good faith or for errors
in judgment. Nor shall the Sponsor be liable or responsible in any way for
depreciation or loss incurred by reason of the disposition of any Security. The
Sponsor will, however, be liable for its own wilful misfeasance, wilful
misconduct, bad faith, gross negligence or reckless disregard of its duties and
obligations under the Agreement.
If at any time the Sponsor shall resign under the Agreement or shall fail or
be incapable of performing its duties thereunder or shall become bankrupt or its
affairs are taken over by public authorities, the Agreement directs the Trustee
to either (1) appoint a successor Sponsor or Sponsors at rates of compensation
deemed reasonable by the Trustee not exceeding amounts prescribed by the
Securities and Exchange Commission, or (2) terminate the Trust Indenture and
Agreement and the Trust and liquidate the Trust. The Trustee will promptly
notify Unit Holders of any such action.
MISCELLANEOUS
SPONSOR
Dean Witter Reynolds Inc. ("Dean Witter") is a corporation organized under
the laws of the State of Delaware and is a principal operating subsidiary of
Morgan Stanley Dean Witter & Co. ("MSDW" formerly known as Morgan Stanley, Dean
Witter, Discover & Co.), a publicly-held corporation. On May 31, 1997, Dean
Witter, Discover & Co., Dean Witter's former parent company, and Morgan Stanley
Group Inc. merged to form MSDW. Dean Witter is a financial services company that
provides to its individual, corporate, and institutional clients services as a
broker in securities and commodities, a dealer in corporate, municipal, and
government securities, an investment banker, an investment adviser, and an agent
in the sale of life insurance and various other products and services. Dean
Witter is a member firm of the New York Stock Exchange, the American Stock
Exchange, other major securities exchanges and the National Association of
Securities Dealers. Dean Witter is currently servicing its clients through a
network of more than 350 domestic and international offices with approximately
10,000 account executives servicing individual and institutional client
accounts.
TRUSTEE
The Trustee is The Bank of New York. The Trustee is organized under the laws
of the State of New York, is a member of the New York Clearing House Association
and is subject to supervision and examination by the Superintendent of Banks of
the State of New York, the Federal Deposit Insurance Corporation and the Board
of Governors of the Federal Reserve System. Unit Holders should direct inquiries
regarding distributions, address changes and other matters relating to the
administration of the Trust to the Trustee at Unit Investment Trust Division,
P.O. Box 974, Wall Street Station, New York, New York 10268-0974.
33
<PAGE>
LEGAL OPINIONS
The legality of the Units offered hereby has been passed upon by Cahill
Gordon & Reindel, a partnership including a professional corporation, 80 Pine
Street, New York, New York 10005, as special counsel for the Sponsor.
AUDITORS
The Statement of Financial Condition and Schedule of Portfolio Securities of
this series of the Morgan Stanley Dean Witter Select Equity Trust included in
this Prospectus have been audited by Deloitte & Touche LLP, certified public
accountants, as stated in their report as set forth in Part A of this
Prospectus, and are included in reliance upon such report given upon the
authority of that firm as experts in accounting and auditing.
34
<PAGE>
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS WITH RESPECT TO THIS INVESTMENT COMPANY NOT CONTAINED IN
PARTS A AND B OF THIS PROSPECTUS; AND ANY INFORMATION OR REPRESENTATION NOT
CONTAINED HEREIN MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. PARTS A
AND B OF THIS PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, SECURITIES IN ANY STATE TO ANY PERSON TO
WHOM IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH STATE.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
PART A
Summary of Essential Information........... i
Independent Auditors' Report............... xvii
Statement of Financial Condition........... xviii
Schedule of Portfolio Securities........... xx
PART B
Introduction............................... 1
The Trust.................................. 3
Objectives and Securities Selection.... 3
Summary Description of the Portfolio... 3
Risk Factors--Special Considerations... 3
Distribution........................... 12
Tax Status of the Trust.................... 12
Retirement Plans........................... 16
Public Offering of Units................... 17
Public Offering Price.................. 17
Public Distribution.................... 18
Secondary Market....................... 19
Profit of Sponsor...................... 19
Volume Discount........................ 19
Redemption................................. 20
Right of Redemption.................... 20
Computation of Redemption Price........ 22
Postponement of Redemption............. 23
Exchange Option............................ 23
Reinvestment Program....................... 25
Rights of Unit Holders..................... 25
Unit Holders........................... 25
Certain Limitations.................... 26
Expenses and Charges....................... 26
Expenses............................... 26
Fees................................... 26
Other Charges.......................... 27
Payment................................ 27
Administration of the Trust................ 27
Records and Accounts................... 27
Distribution........................... 27
Portfolio Supervision.................. 28
Voting of the Portfolio Securities..... 29
Reports to Unit Holders................ 29
Amendment.............................. 30
Termination............................ 30
Resignation, Removal and Liability......... 32
Regarding the Trustee.................. 32
Regarding the Sponsor.................. 33
Miscellaneous.............................. 33
Sponsor................................ 33
Trustee................................ 33
Legal Opinions......................... 34
Auditors................................... 34
</TABLE>
37613
[LOGO] MORGAN STANLEY/DEAN WITTER SELECT EQUITY TRUST
SELECT GLOBAL SERIES 98-4
Select Global 30 Portfolio 98-4
- ------------------------------
(A UNIT INVESTMENT TRUST)
- ------------------------------------------------
[LOGO] MORGAN STANLEY DEAN WITTER
- ------------------------------------------------
READ AND RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE.
This prospectus may be used as a preliminary prospectus for a future series,
such as when Units of this Trust are no longer available, or for Investors who
will reinvest into subsequent series of Select Global Portfolios. In such cases,
Investors should note that:
Information contained herein is subject to amendment. A registration
statement relating to securities of a future series has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
MORGAN STANLEY DEAN WITTER IS A SERVICE MARK OF MORGAN STANLEY DEAN WITTER &
CO.
<PAGE>
PART II. ADDITIONAL INFORMATION NOT REQUIRED IN PROSPECTUS
CONTENTS OF REGISTRATION STATEMENT
This registration statement on Form S-6 comprises the
following documents:
The facing sheet.
The Cross Reference Sheet.
The Prospectus.
The signatures.
Written consents of the following persons:
. Cahill Gordon & Reindel (included in Exhibit
5)
. Deloitte & Touche LLP
The following Exhibits:
***EX-3(i) Certificate of Incorporation of Dean Witter
Reynolds Inc.
***EX-3(ii) By-Laws of Dean Witter Reynolds Inc.
*EX-4.1 Trust Indenture and Agreement, dated Septem-
ber 30, 1993.
*EX-4.15 Amendment to Exhibit 4.1 dated December 30,
1997.
**EX-4.2 Reference Trust Agreement dated June 30, 1998.
**EX-5 Opinion of counsel as to the legality of the
securities being registered.
**EX-8.UK Opinion of Special United Kingdom counsel.
**EX-8.HK Opinion of Special Hong Kong counsel.
**EX-23.1 Consent of Independent Auditors.
**EX-23.2 Consent of Cahill Gordon & Reindel (included in
Exhibit 5).
<PAGE>
**EX-23.3 Consent of Slaughter and May (included in Ex-
hibit 8.UK).
**EX-23.4 Consent of Slaughter and May (included in Ex-
hibit 8.HK).
***EX-24 Powers of Attorney executed by a majority of
the Board of Directors of Dean Witter Reynolds
Inc.
**EX-27 Financial Data Schedule.
EX-99 Information as to Officers and Directors of
Dean Witter Reynolds Inc. is incorporated by
reference to Schedules A and D of Form BD filed
by Dean Witter Reynolds Inc. pursuant to Rule
15b1-1 and 15b3-1 under the Securities Exchange
Act of 1934 (1934 Act File No. 8-14172).
_________________________
* Incorporated by reference to exhibit of same designation
filed with the Securities and Exchange Commission as an
exhibit to the Registration Statement of Dean Witter Se-
lect Equity Trust, Selected Opportunities Series 18, Reg-
istration no. 33-50105 and as filed as an exhibit to Dean
Witter Select Equity Trust, Select Global Series 98-1, Se-
lect Global 30 Portfolio 98-1, Registration No. 333-41787.
** Filed herewith.
*** Previously filed.
**** Incorporated by reference to exhibit of same designation
filed with the Securities and Exchange Commission as an
exhibit to the Registration Statement of Sears Tax-Exempt
Investment Trust, Insured Long Term Series 33 and Long
Term Municipal Portfolio Series 106, Registration numbers
33-38086 and 33-37629, respectively.
<PAGE>
SIGNATURES
The Registrant, Morgan Stanley Dean Witter Select Eq-
uity Trust, Select Global Series 98-4, Select Global 30 Portfo-
lio 98-4, hereby identifies the Dean Witter Select Equity
Trust, Select Global Series 97-3, Select Global 30 Portfolio
97-3 and Select 5 Industrial Portfolio 97-6 for purposes of the
representations required by Rule 487 and represents the follow-
ing:
1) That the portfolio securities deposited in the series
with respect to which this registration statement is
being filed do not differ materially in type or qual-
ity from those deposited in such previous series;
2) That, except to the extent necessary to identify the
specific portfolio securities deposited in, and to
provide essential financial information for, the se-
ries with respect to the securities of which this
registration statement is being filed, this registra-
tion statement does not contain disclosures that dif-
fer in any material respect from those contained in
the registration statement for such previous series
as to which the effective date was determined by the
Commission or the staff; and
3) That it has complied with Rule 460 under the Securi-
ties Act of 1933.
Pursuant to the requirements of the Securities Act of
1933, the registrant, Morgan Stanley Dean Witter Select Equity
Trust, Select Global Series 98-4, Select Global 30 Portfolio
98-4, has duly caused this Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, there-
unto duly authorized, all in the City of New York and State of
New York on the 29th day of June, 1998.
MORGAN STANLEY DEAN WITTER SELECT
EQUITY TRUST,
SELECT GLOBAL SERIES 98-4
SELECT GLOBAL 30 PORTFOLIO 98-4
(Registrant)
By: Dean Witter Reynolds Inc.
(Depositor)
/s/Thomas Hines
Thomas Hines
Authorized Signatory
<PAGE>
Pursuant to the requirements of the Securities Act of
1933, this Amendment No. 1 to the Registration Statement has
been signed on behalf of Dean Witter Reynolds Inc., the Deposi-
tor, by the following person in the following capacities and by
the following persons who constitute a majority of the Deposi-
tor's Board of Directors in the City of New York, and State of
New York, on this 29th day of June, 1998.
DEAN WITTER REYNOLDS INC.
Name Office
Philip J. Purcell Chairman & Chief )
Executive Officer )
and Director )
Richard M. DeMartini Director
Robert J. Dwyer Director
Christine A. Edwards Director
Charles A. Fiumefreddo Director
James F. Higgins Director
Mitchell M. Merin Director
Stephen R. Miller Director
Richard F. Powers, III Director
Philip J. Purcell Director
Thomas C. Schneider Director
William B. Smith Director
By: /s/Thomas Hines
Thomas Hines
Attorney-in-fact*
____________________
* Executed copies of the Powers of Attorney of the Board
Members listed below have been filed with the Securities
and Exchange Commission in connection with Amendment No. 1
to the Registration Statement on Form S-6 for Dean Witter
Select Equity, Select 10 Industrial Portfolio 97-1, File
No. 333-16839, Amendment No. 1 to the Registration State-
ment on Form S-6 for Dean Witter Select Equity Trust, Se-
lect 10 Industrial Portfolio 96-4, File No. 333-10499 and
the Registration Statement on Form S-6 for Dean Witter Se-
lect Equity Trust, Select 10 International Series 95-1,
File No. 33-56389.
<PAGE>
Exhibit Index
To
Form S-6
Registration Statement
Under the Securities Act of 1933
Exhibit No. Title of Document
***EX-3(i) Certificate of Incorporation of Dean Witter Rey-
nolds Inc.
***EX-3(ii) By-Laws of Dean Witter Reynolds Inc.
*EX-4.1 Trust Indenture and Agreement, dated Septem-
ber 30, 1993.
*EX-4.15 Amendment to Exhibit 4.1 dated December 30,
1997.
**EX-4.2 Reference Trust Agreement dated June 30, 1998.
**EX-5 Opinion of counsel as to the legality of the se-
curities being registered.
**EX-8.UK Opinion of special UK Counsel.
**EX-8.HK Opinion of special HK Counsel.
**EX-23.1 Consent of Independent Auditors.
**EX-23.2 Consent of Cahill Gordon & Reindel (included in
Exhibit 5).
**EX-23.3 Consent of Slaughter and May (included in Ex-
hibit 8.UK).
**EX-23.4 Consent of Slaughter and May (included in Ex-
hibit 8.HK).
***EX-24 Powers of Attorney executed by a majority of the
Board of Directors of Dean Witter Reynolds Inc.
**EX-27 Financial Data Schedule.
EX-99 Information as to Officers and Directors of Dean
Witter Reynolds Inc. is incorporated by refer-
ence to Schedules A and D of Form BD filed by
Dean Witter Reynolds Inc. pursuant to Rule 15b1-
<PAGE>
1 and 15b3-1 under the Securities Exchange Act
of 1934 (1934 Act File No. 8-14172).
_________________________
* Incorporated by reference to exhibit of same designation
filed with the Securities and Exchange Commission as an
exhibit to the Registration Statement of Dean Witter Se-
lect Equity Trust, Selected Opportunities Series 18, Reg-
istration No. 33-50105 and as filed as an exhibit to Dean
Witter Select Equity Trust, Select Global Series 98-1, Se-
lect Global 30 Portfolio 98-1, Registration No. 333-41787.
** Filed herewith.
*** Previously filed.
**** Incorporated by reference to exhibit of same designation
filed with the Securities and Exchange Commission as an
exhibit to the Registration Statement of Sears Tax-Exempt
Investment Trust, Insured Long Term Series 33 and Long
Term Municipal Portfolio Series 106, Registration numbers
33-38086 and 33-37629, respectively.
<PAGE>
MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST
SELECT GLOBAL SERIES 98-4
SELECT GLOBAL 30 PORTFOLIO 98-4
REFERENCE TRUST AGREEMENT
This Reference Trust Agreement dated June 30, 1998
between DEAN WITTER REYNOLDS INC., as Depositor, and The Bank
of New York, as Trustee, sets forth certain provisions in full
and incorporates other provisions by reference to the document
entitled "Morgan Stanley Dean Witter Select Equity Trust, Trust
Indenture and Agreement" (the "Basic Agreement") dated Septem-
ber 30, 1993 as amended on December 30, 1997. Such provisions
as are incorporated by reference constitute a single instrument
(the "Indenture").
WITNESSETH THAT:
In consideration of the premises and of the mutual
agreements herein contained, the Depositor and the Trustee
agree as follows:
I.
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II hereof, all the
provisions contained in the Basic Agreement are herein incorpo-
rated by reference in their entirety and shall be deemed to be
a part of this instrument as fully and to the same extent as
though said provisions had been set forth in full in this in-
strument except that the Basic Agreement is hereby amended as
follows:
A. The first sentence of Section 2.01 is amended to
add the following language at the end of such sentence:
"and/or cash (or a letter of credit in lieu of cash) with
instructions to the Trustee to purchase one or more of
such Securities which cash (or cash in an amount equal to
the face amount of the letter of credit), to the extent
not used by the Trustee to purchase such Securities within
the 90-day period following the first deposit of Securi-
ties in the Trust, shall be distributed to Unit Holders on
the Distribution Date next following such 90-day period or
such earlier date as the Depositor and the Trustee deter-
mine".
<PAGE>
-2-
B. The first sentence of Section 2.06 is amended to
add the following language after "Securities"))": "and/or
cash (or a letter of credit in lieu of cash) with instruc-
tions to the Trustee to purchase one or more Additional
Securities which cash (or cash in an amount equal to the
face amount of the letter of credit), to the extent not
used by the Trustee to purchase such Additional Securities
within the 90-day period following the first deposit of
Securities in the Trust, shall be distributed to Unit
Holders on the Distribution Date next following such 90-
day period or such earlier date as the Depositor and the
Trustee determine".
C. Article III, entitled "Administration of Trust",
Section 3.01 Initial Cost shall be amended as follows:
(i) the first part of the first sentence of
Section 3.01 Initial Cost shall be amended to substi-
tute the following language before the phrase
"provided, however":
"With respect to the Trust, the cost of the
preparation, printing and execution of the Cer-
tificates, Indenture, Registration Statement and
other documents relating to the Trust, Federal
and State registration fees and costs, the ini-
tial fees and expenses of the Trustee, legal and
auditing expenses and other out-of-pocket organ-
izational expenses, to the extent not borne by
the Sponsor, shall be paid by the Trust;"
D. The third paragraph of Section 3.05 is hereby
amended to add the following sentence after the first sen-
tence thereof: "Depositor may direct the Trustee to in-
vest the proceeds of any sale of Securities not required
for the redemption of Units in eligible money market in-
struments selected by the Depositor which will include
only negotiable certificates of deposit or time deposits
of domestic banks which are members of the Federal Deposit
Insurance Corporation and which have, together with their
branches or subsidiaries, more than $2 billion in total
assets, except that certificates of deposit or time depos-
its of smaller domestic banks may be held provided the de-
posit does not exceed the insurance coverage on the in-
strument (which currently is $100,000), and provided fur-
ther that the Trust's aggregate holding of certificates of
deposit or time deposits issued by the Trustee may not ex-
ceed the insurance coverage of such obligations and U.S.
<PAGE>
-3-
Treasury notes or bills (which shall be held until the ma-
turity thereof) each of which matures prior to the earlier
of the next following Distribution Date or 90 days after
receipt, the principal thereof and interest thereon (to
the extent such interest is not used to pay Trust ex-
penses) to be distributed on the earlier of the 90th day
after receipt or the next following Distribution Date."
E. The first sentence of each of Sections 3.10,
3.11 and 3.12 is amended to insert the following language
at the beginning of such sentence, "Except as otherwise
provided in Section 3.13,".
F. The following new Section 3.13 is added:
Section 3.13. EXTRAORDINARY EVENT - SECURITY RETEN-
TION AND VOTING. In the event the Trustee is notified of
any action to be taken or proposed to be taken by holders
of the securities held by the Trust in connection with any
proposed merger, reorganization, spin-off, split-off or
split-up by the issuer of stock or securities held in the
Trust, the Trustee shall take such action or refrain from
taking any action, as appropriate, so as to insure that
the securities are voted as closely as possible in the
same manner and in the same general proportion as are the
securities held by owners other than the Trust. If stock
or securities are received by the Trustee, with or without
cash, as a result of any merger, reorganization, spin-off,
split-off or split-up by the issuer of stock or securities
held in the Trust, the Trustee at the direction of the De-
positor may retain such stock or securities in the Trust.
Neither the Depositor nor the Trustee shall be liable to
any person for any action or failure to take action with
respect to this section.
G. Section 1.01 is amended to add the following
definition: (9) "Deferred Sales Charge" shall mean any
deferred sales charge payable in accordance with the pro-
visions of Section 3.14 hereof, as set forth in the pro-
spectus for a Trust. Definitions following this defini-
tion (9) shall be renumbered.
H. Section 3.05 is hereby amended to add the fol-
lowing paragraph after the end thereof: On each Deferred
Sales Charge payment date set forth in the prospectus for
a Trust, the Trustee shall pay the account created pursu-
ant to Section 3.14 the amount of the Deferred Sales
<PAGE>
-4-
Charge payable on each such date as stated in the prospec-
tus for a Trust. Such amount shall be withdrawn from the
Principal Account from the amounts therein designated for
such purpose.
I. Section 3.06B(3) shall be amended by adding the
following: "and any Deferred Sales Charge paid".
J. Section 3.08 shall be amended by adding the fol-
lowing at the end thereof: "In order to pay the Deferred
Sales Charge, the Trustee shall sell or liquidate an
amount of Securities at such time and from time to time
and in such manner as the Depositor shall direct such that
the proceeds of such sale or liquidation shall equal the
amount required to be paid to the Depositor pursuant to
the Deferred Sales Charge program as set forth in the pro-
spectus for a Trust.
K. Section 3.14 shall be added as follows:
Section 3.14. DEFERRED SALES CHARGE. If the pro-
spectus for a Trust specifies a Deferred Sales Charge, the
Trustee shall, on the dates specified in and as permitted
by the prospectus, withdraw from the Income Account if
such account is designated in the prospectus as the source
of the payments of the Deferred Sales Charge, or to the
extent funds are not available in that account or if such
account is not so designated, from the Principal Account,
an amount per Unit specified in the prospectus and credit
such amount to a special, non-Trust account maintained at
the Trustee out of which the Deferred Sales Charge will be
distributed to the Depositor. If the Income Account is
not designated as the source of the Deferred Sales Charge
payment or if the balances in the Income and Principal Ac-
counts are insufficient to make any such withdrawal, the
Trustee shall, as directed by the Depositor, either ad-
vance funds, if so agreed to by the Trustee, in an amount
equal to the proposed withdrawal and be entitled to reim-
bursement of such advance upon the deposit of additional
monies in the Income Account or the Principal Account,
sell Securities and credit the proceeds thereof to such
special Depositor's account or credit Securities in kind
to such special Depositor's Account. Such directions
shall identify the Securities, if any, to be sold or dis-
tributed in kind and shall contain, if the Trustee is di-
rected by the Depositor to sell a Security, instructions
as to execution of such sales. If a Unit Holder redeems
Units prior to full payment of the Deferred Sales Charge,
<PAGE>
-5-
the Trustee shall, if so provided in the prospectus, on
the Redemption Date, withhold from the Redemption Price
payment to such Unit Holder an amount equal to the unpaid
portion of the Deferred Sales Charge and distribute such
amount to such special Depositor's account or, if the De-
positor shall purchase such Unit pursuant to the terms of
Section 5.02 hereof, the Depositor shall pay the Redemp-
tion Price for such Unit less the unpaid portion of the
Deferred Sales Charge. The Depositor may at any time in-
struct the Trustee to distribute to the Depositor cash or
Securities previously credited to the special Depositor's
account.
L. The following new Section 3.15 is added:
Section 3.15. FOREIGN EXCHANGE TRANSACTIONS; RE-
CLAIMING FOREIGN TAXES. (a) For any Trust holding Securi-
ties denominated in a currency other than U.S. dollars,
the Depositor shall direct the Trustee with respect to the
circumstances under which foreign exchange transactions
are to be entered into and calculations under this Inden-
ture are to be made, in order to convert amounts receiv-
able in respect of the Securities in foreign currencies
into U.S. dollars.
(b) The Trustee shall take such reasonable action as
the Depositor shall direct or, if not so directed, use
reasonable efforts to reclaim or recoup any amounts of
non-U.S. tax paid by the Trust or withheld from income re-
ceived by the Trust to which the Trust may be entitled as
a refund.
M. The following paragraphs are inserted after the
first paragraph in Section 4.01:
"With respect to foreign securities, each secu-
rity listed on a securities exchange will be
valued at the last closing sale price on the
relevant stock exchange or if no such price ex-
ists at the closing offer price thereof.
If the Trust holds securities denominated in a
currency other than U.S. dollars, the evalua-
tions shall be converted to U.S. dollars based,
during the initial offering period, on the of-
fering side of the relevant currency exchange
rate, and, subsequent to such period, on the bid
<PAGE>
-6-
side of the relevant exchange rate, including
the cost of a forward foreign exchange contract
in the relevant currency to correspond to the
Trustee's settlement requirement for redemption
requests as quoted to the Trustee by one or more
banks designated by the Depositor, unless the
Security is in the form of an American deposi-
tory share or receipt, in which case the evalua-
tions shall be based upon the U.S. dollar prices
in the market for American depository shares or
receipts (unless the Trustee deems such prices
inappropriate as a basis for valuation)."
N. Reference to "Dean Witter Select Equity Trust"
is replaced by "Morgan Stanley Dean Witter Select Equity
Trust".
II.
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby
agreed to:
A. The Trust is denominated Morgan Stanley Dean
Witter Select Equity Trust, Select Global Series 98-4, Se-
lect Global 30 Portfolio 98-4 (the "Select 30 Trust").
B. The publicly traded stocks listed in Schedule A
hereto are those which, subject to the terms of this In-
denture, have been or are to be deposited in trust under
this Indenture.
C. The term, "Depositor" shall mean Dean Witter
Reynolds Inc.
D. The aggregate number of Units referred to in
Sections 2.03 and 9.01 of the Basic Agreement is 25,000
for the Select 30 Trust.
E. A Unit is hereby declared initially equal to
1/25,000.
F. The term "In-Kind Distribution Date" shall mean
August 12, 1999.
G. The term "Record Dates" shall mean October 1,
1998, January 1, 1999, April 1, 1999 and
<PAGE>
-7-
September 1, 1999 and such other date as the Depositor
may direct.
H. The term "Distribution Dates shall mean October
15, 1999, January 15, 1999, April 15, 1999 and
September 8, 1999 and such other date as the Depositor
may direct.
I. The term "Termination Date" shall mean
September 1, 1999.
J. The Depositor's Annual Portfolio Supervision Fee
shall be a maximum of $0.25 per 100 Units.
K. The Trustee's Annual Fee as defined in Section
6.04 of the Indenture shall be $.80 per 100 Units.
L. For a Unit Holder to receive an "in-kind" dis-
tribution during the life of the Trust, such Unit Holder
must tender at least 25,000 Units for redemption. There
is no minimum amount of Units that a Unit Holder must ten-
der in order to receive an "in-kind" distribution on the
In-Kind Date or in connection with a rollover.
(Signatures and acknowledgments on separate pages)
<PAGE>
-8-
The Schedule of Portfolio Securities in the prospec-
tus included in this Registration Statement is hereby incorpo-
rated by reference herein as Schedule A hereto.
<PAGE>
(Letterhead of Cahill Gordon & Reindel)
June 30, 1998
Dean Witter Reynolds Inc.
Two World Trade Center
New York, New York 10048
Re: Morgan Stanley Dean Witter Select Equity Trust,
Select Global Series 98-4
Select Global 30 Portfolio 98-4
Gentlemen:
We have acted as special counsel for you as Depositor
of the Morgan Stanley Dean Witter Select Equity Trust, Select
Global Series 98-4, Select Global 30 Portfolio 98-4 (the
"Trust"), in connection with the issuance under the Trust In-
denture and Agreement, dated September 30, 1993, as amended,
and the related Reference Trust Agreement, dated June 30, 1998
(such Trust Indenture and Agreement and Reference Trust Agree-
ment collectively referred to as the "Indenture"), between you,
as Depositor, and The Bank of New York, as Trustee, of units of
fractional undivided interest in said Trust (the "Units") com-
prising the Units of Morgan Stanley Dean Witter Select Equity
Trust, Select Global Series 98-4, Select Global 30 Portfolio
98-4. In rendering our opinion expressed below, we have relied
in part upon the opinions and representations of your officers
and upon opinions of counsel to Dean Witter Reynolds Inc.
<PAGE>
-2-
Based upon the foregoing, we advise you that, in our
opinion, when the indenture has been duly executed and deliv-
ered on behalf of the Depositor and Trustee and when the Re-
ceipt for Units evidencing the Units has been duly executed and
delivered by the Trustee to the Depositor in accordance with
the Indenture, the Units will be legally issued, fully paid and
nonassessable by the Trust, and will constitute valid and bind-
ing obligations of the Trust and the Depositor in accordance
with their terms, except that enforceability of certain provi-
sions thereof may be limited by applicable bankruptcy, insol-
vency, reorganization, moratorium or other similar laws affect-
ing creditors generally and by general equitable principles.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 333-53613) re-
lating to the Units referred to above and to the use of our
name and to the reference to our firm in said Registration
Statement and the related Prospectus. Our consent to such ref-
erence does not constitute a consent under Section 7 of the Se-
curities Act, as in consenting to such reference we have not
certified any part of the Registration Statement and do not
otherwise come within the categories of persons whose consent
is required under said Section 7 or under the rules and regula-
tions of the Commission thereunder.
Very truly yours,
CAHILL GORDON & REINDEL
<PAGE>
(Letterhead of Slaughter and May)
Dean Witter Reynolds Inc.,
2 World Trade Center,
New York,
New York 10048,
U.S.A
June 30, 1998
Dear Sirs:
Dean Witter Select Equity Trust
Select Global 30 Portfolio 98-4
We have acted as special United Kingdom ("UK") taxa-
tion advisors in connection with the issue of units in the
above Trust on the basis of directions given to us by Cahill
Gordon & Reindel, counsel to yourselves.
This opinion is limited to UK taxation law as applied
in practice on the date hereof by the Inland Revenue and is
given on the basis that it will be governed by and construed in
accordance with English law as enacted.
For the purpose of this opinion, the only documenta-
tion which we have examined is a draft of the Trusts's final
prospectus dated 24th June, 1998 (the "Prospectus") which we
understand will be included in the Registration Statement for
the Fund to be filed with the Securities and Exchange Commis-
sion on or about 30th June, 1998. Terms defined in the Pro-
spectus have the same meaning herein.
We have assumed for the purposes of this opinion
that:
(i) a Unitholder is, under the terms of the Trust Agreement
governing the Portfolio, entitled as beneficiary under
a trust to have paid to him (subject to a deduction for
expenses, including Trustee's fees, Sponsor's fees and
brokerage commissions or charges), his pro rata share
of all the income which arises from the investments in
the Portfolio;
<PAGE>
-2-
(ii) for taxation purposes the Trustee is not a UK resident
but is a US resident; the general administration of the
Trust will be carried out only in the US; and no Units
are registered in a register kept in the UK by or on
behalf of the Trustee;
(iii) the Trust is not treated as a corporation for US tax
purposes; and
(iv) no Unitholder is resident or ordinarily resident in the
UK, nor is that Unitholder carrying on a trade in the
UK through a branch or agency.
We understand that the Trust will consist of a single
portfolio consisting of 30 stocks which are the 10 common
stocks in each of the Dow Jones Industrial Average, the Finan-
cial Times Ordinary Share Index and the Hang Seng Index having
the highest dividend yield on the date specified in the Pro-
spectus; and that the Portfolio will hold the common stocks for
approximately one year, after which time the Portfolio will
terminate and the stocks will be sold. We address UK tax is-
sues in relation only to the United Kingdom stocks in the Port-
folio.
In our opinion the taxation paragraphs on pages 14
and 15 of the Prospectus under the heading "United Kingdom
Taxation", represent a fair summary of material UK taxation
consequences for a US-resident Unitholder.
This opinion is addressed to you on the understanding
that you (and only you) may rely upon it in connection with the
issue and sale of the Units (and for no other purpose).
This opinion may not be quoted or referred to in any
public document or filed with any governmental agency or other
person without our written consent. We consent, however, to
the reference which is made in the Prospectus to our opinion as
to the UK tax consequences to US persons holding Units in the
Trust and we consent to the filing of this opinion as an ex-
hibit to the Registration Statement.
Yours faithfully,
/s/ Slaughter and May
Slaughter and May
<PAGE>
(Letterhead of Slaughter and May)
Dean Witter Reynolds Inc.,
2 World Trade Center,
New York,
New York 10048,
U.S.A June 30, 1998
Dear Sirs:
Dean Witter Select Equity Trust
Select Global 30 Portfolio 98-4 (the "Trust")
We have acted as Hong Kong counsel in connection with
the taxation aspects of the issue of units in the above Trust.
This opinion is limited to Hong Kong law as applied
in practice on the date hereof by the Inland Revenue. This
opinion is governed by and shall be construed in accordance
with Hong Kong law.
For the purpose of this opinion, the only documenta-
tion which we have examined is a draft, dated 24th June, 1998 of the
Trust's prospectus (the "Prospectus") which we understand will be in-
cluded in the Registration Statement for the Trust to be filed
with the Securities and Exchange Commission on or around 30th
June, 1998. Terms defined in the Prospectus have the same
meaning herein.
We have assumed for the purposes of this opinion
that:
(i) for taxation purposes the Trustee is not a Hong Kong
resident but is a United States resident; the Trust
does not carry on a trade, profession or business in
Hong Kong and the general administration of the Trust
(including portfolio management) will be carried out
only in the United States; and no Units are regis-
<PAGE>
-2-
tered in a register kept in Hong Kong by or on behalf
of the Trustee; and
(ii) no Holder of Units is resident or ordinarily resident
in Hong Kong, nor is that Holder carrying on a trade,
profession or business in Hong Kong through a branch
or agency.
We understand that the Trust will consist of a single
portfolio consisting of 30 stocks which are the 10 common
stocks in each of the Dow Jones Industrial Average, the Finan-
cial Times Ordinary Share Index and the Hang Seng Index having
the highest dividend yields on the Stock Determination Dates
specified in the Prospectus.
In our opinion the taxation paragraphs on page 15 of
the Prospectus, under the heading "Hong Kong Taxation", repre-
sent a fair summary of material Hong Kong taxation consequences
for Holders of Units of the Trust.
This opinion is addressed to you on the understanding
that you (and only you) may rely upon it in connection with the
issue and sale of the Units (and for no other purpose).
This opinion may not be quoted or referred to in any
public document or filed with any governmental agency or other
person without our written consent. We consent, however, to
the reference which is made in the Prospectus to our opinion as
to the Hong Kong tax consequences to US persons holding Units
in the Trust and we consent to the filing of this opinion as an
exhibit to the Registration Statement.
Yours faithfully,
/s/ Slaughter and May
Slaughter and May
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the use of our report dated June 30,
1998, accompanying the financial statements of the Morgan Stan-
ley Dean Witter Select Equity Trust, Select Global Series 98-4,
Select Global 30 Portfolio 98-4, included herein and to the
reference to our Firm as experts under the heading "Auditors"
in the prospectus which is a part of this registration state-
ment.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
June 30, 1998
New York, New York
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS FOR MORGAN STANLEY DEAN WITTER SELECT EQUITY TRUST SELECT GLOBAL
SERIES 98-4 SELECT GLOBAL 30 PORTFOLIO 98-4 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 6
<NAME> MS/DW SELECT EQUITY TRUST SELECT GLOBAL SERIES 98-4 SELECT GLOBAL 30
PORTFOLIO 98-4
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUN-30-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 239,359
<INVESTMENTS-AT-VALUE> 239,359
<RECEIVABLES> 0
<ASSETS-OTHER> 105,138
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 344,497
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 110,138
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 234,359
<SHARES-COMMON-STOCK> 25,000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 234,359
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 25,000
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
