<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND TWO WORLD TRADE CENTER,
LETTER TO THE SHAREHOLDERS OCTOBER 31, 1999 NEW YORK, NEW YORK 10048
DEAR SHAREHOLDER:
We are pleased to present Morgan Stanley Dean Witter International Fund's first
annual report to shareholders. The Fund, which commenced operations on June 28,
1999, seeks long-term capital growth by investing primarily in a diversified
portfolio of international common stocks and other equity securities. The Fund's
sub-advisor, Morgan Stanley Dean Witter Investment Management Inc., utilizes a
country-driven investment strategy.
During the period under review, the global markets fluctuated sharply on worries
about interest rates and central bank policies. However, the October release of
moderate third-quarter economic growth numbers for the United States and a lower
than expected U.S. employment cost index increased the likelihood of a soft
landing for the domestic economy. This scenario has strengthened the
sub-advisor's belief that the global equity markets will continue to improve and
that the international markets can de-link from those of the United States. If
U.S. interest rates stay within current levels or move only moderately in either
direction, the sub-advisor believes that the equity markets in Europe, Japan and
the Pacific region may be able to outperform the U.S. market, based on rising
economic growth, continued corporate and government restructuring and improving
corporate earnings.
PERFORMANCE AND PORTFOLIO
From its inception through October 31, 1999, Morgan Stanley Dean Witter
International Fund's Class A, B, C and D shares returned 5.70 percent, 5.50
percent, 5.50 percent and 5.80 percent, respectively. The performance of the
four share classes varies because of differing expenses. (These total return
figures assume the reinvestment of all distributions and do not reflect the
deduction of any applicable sales charges.) During the same period, the Morgan
Stanley Capital International EAFE Index (MSCI EAFE) returned 8.30 percent,
while the Lipper International Funds Index returned 6.98 percent.
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
LETTER TO THE SHAREHOLDERS OCTOBER 31, 1999, CONTINUED
The Fund's underperformance relative to its Lipper peer group was the result
primarily of its being overweighted in the Pacific region (ex-Japan) and
underweighted in European growth stocks. Fund performance was also hindered by
the Fund's large initial cash position and what turned out to be a poorly timed
hedge out of the euro. Contributing positively to overall performance was the
Fund's European real estate tilt and its being overweighted in Japan,
particularly that market's high-tech sector.
JAPAN
As of October 31, 1999, Japan was the Fund's biggest single country weight, at
28.5 percent of net assets. The Japanese market rallied strongly in 1999, as a
result of strong corporate restructuring initiatives, government movements to
support the banking system and small companies, and positive gross domestic
product (GDP) growth surprises. The market enjoyed significant foreign-investor
participation as others responded positively to the Japanese restructuring.
Foreign buying contributed to the yen's strength. The Japanese government
unsuccessfully tried on several occasions to halt yen appreciation, fearing that
excessive strength could impair exports and slow the economic recovery. The
market was range bound for the last quarter of the Fund's fiscal year, possibly
because of the currency's strength, but a strong yen kept pressure on companies
to restructure and, as noted, has helped U.S.-dollar-based returns. GDP growth
exceeded expectations in the first and second quarters of 1999.
The Japanese economic recovery and market rally have been supportive of markets
throughout Asia this year. The Japanese rally seems to have attracted some
additional foreign portfolio investment to other Asian markets. More
importantly, imports into Japan from other Asian countries have grown
significantly this year, due to increasing outsourcing of production by Japanese
corporations and its rising domestic demand.
EUROPE
The sub-advisor's outlook for European equities is fairly constructive, based on
a cyclical economic pickup and the near absence of inflation. Although European
equities are generally fully valued, improving corporate earnings and marginally
falling bond yields should provide a certain measure of support. The sub-advisor
believes in the positive long-term case for a transformed Europe: corporate
taxes are being cut, merger and acquisition activity has passed $1 trillion this
year, buybacks are
2
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
LETTER TO THE SHAREHOLDERS OCTOBER 31, 1999, CONTINUED
being made easier to complete and corporations are restructuring their balance
sheets and business units. The sub-advisor considers that European profits could
grow at least as fast as those in the United States.
In September, the sub-advisor lowered the Fund's allocation for the United
Kingdom to 13.0 percent, compared to 20.5 percent for the MSCI EAFE Index. In
early September, the Bank of England raised short-term interest rates by 25
basis points, with additional rate increases likely. The central bank was very
agile in lowering interest rates to avoid an economic bust, and the sub-advisor
expects the bank to be aggressive on the upside as well.
In October, the sub-advisor increased the Fund's allocation for Germany to an
overweighted 12.2 percent versus 9.6 percent for the MSCI EAFE Index. German
valuations are attractive and economic fundamentals there are improving, as
evidenced by rising business confidence, industrial production and exports. From
a technical perspective the German market has lagged the broader European
market. In the near term, the German market's significant exposure to industrial
cyclicals should allow it to benefit from any improvement in Europe's economy.
ASIA (EX-JAPAN)
In Asia, the Fund is currently overweighted in Hong Kong. While the Hong Kong
economy is still coping with deflation and negative bank loan growth,
deregulation -- particularly in utilities and banking -- and a revival in
China's exports are likely to boost growth. The Fund continues to favor
Singapore, which represents 2.0 percent of the portfolio's net assets, compared
to 1.0 percent for its benchmark, because of its robust economic growth (the
third-quarter GDP was 16.8 percent), favorable macroeconomic policy, and strong
earnings revisions and momentum.
LOOKING AHEAD
Morgan Stanley Dean Witter Investment Management Inc. maintains a positive
outlook for the international markets. In Europe, the sub-advisor believes that
most of the major economies will see accelerated growth in 2000 while inflation
and interest rates will likely remain at moderate levels. The sub-advisor
expects to see the European markets buoyed by strong corporate earnings,
valuations that are reasonable in a global context, and continued merger and
acquisition activity. In Asia, the sub-advisor believes that the Japanese
restructuring can provide opportunities there and
3
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
LETTER TO THE SHAREHOLDERS OCTOBER 31, 1999, CONTINUED
throughout Asia. The first year of the region's economic recovery has been
driven largely by net exports, government spending and changes in inventory but
only limited recoveries in consumption. However, the sub-advisor anticipates
consumption to generate more of the growth next year.
We appreciate your ongoing support of Morgan Stanley Dean Witter International
Fund and look forward to continuing to serve your investment needs.
Very truly yours,
<TABLE>
<S> <C>
[SIGNATURE] [SIGNATURE]
Charles A. Fiumefreddo Mitchell M. Merin
CHAIRMAN OF THE BOARD PRESIDENT
</TABLE>
4
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999
<TABLE>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS AND RIGHTS (86.4%)
AUSTRALIA (1.3%)
AIR FREIGHT/DELIVERY SERVICES
14,653 Mayne Nickless Ltd..................................................................... $ 39,620
------------
ALCOHOLIC BEVERAGES
70,301 Foster's Brewing Group Ltd............................................................. 186,416
------------
BEVERAGES - NON-ALCOHOLIC
24,995 Coca-Cola Amatil Ltd................................................................... 76,965
------------
BUILDING MATERIALS
44,930 Boral Ltd.............................................................................. 67,459
40,639 CSR Limited............................................................................ 91,008
36,717 Pioneer International Ltd.............................................................. 80,123
------------
238,590
------------
CASINO/GAMBLING
12,954 TABCORP Holdings Limited............................................................... 81,919
------------
CONTAINERS/PACKAGING
25,870 Amcor Ltd.............................................................................. 112,790
25,423 Southcorp Holdings Ltd................................................................. 88,149
------------
200,939
------------
DIVERSIFIED COMMERCIAL SERVICES
8,690 Brambles Industries, Ltd............................................................... 243,810
------------
DIVERSIFIED FINANCIAL SERVICES
32,185 Colonial Limited....................................................................... 118,147
------------
ENGINEERING & CONSTRUCTION
10,862 Leighton Holdings Ltd.................................................................. 39,389
------------
FOOD CHAINS
43,442 Coles Myer Ltd......................................................................... 215,575
45,504 Woolworth's Ltd........................................................................ 154,302
------------
369,877
------------
FOREST PRODUCTS
7,399 Wesfarmers Limited..................................................................... 54,651
------------
INTERNATIONAL BANKS
52,548 National Australia Bank Ltd............................................................ 809,031
12,586 Suncorp-Metway Limited................................................................. 66,132
72,182 Westpac Banking Corp., Ltd............................................................. 462,069
------------
1,337,232
------------
LIFE INSURANCE
37,772 Amp Ltd................................................................................ 383,191
------------
MARINE TRANSPORTATION
8,023 Howard Smith Limited................................................................... 57,392
------------
MEDIA CONGLOMERATES
74,558 News Corporation Ltd................................................................... 537,899
65,870 News Corporation Ltd. (Pref.).......................................................... 444,921
------------
982,820
------------
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
MULTI-LINE INSURANCE
8,870 GIO Australia Holdings Ltd............................................................. $ 16,816
------------
MULTI-SECTOR COMPANIES
63,379 Broken Hill Proprietary Co., Ltd....................................................... 653,494
42,666 Pacific Dunlop Ltd..................................................................... 59,988
------------
713,482
------------
NATURAL GAS
15,176 Australian Gas Light Company Ltd....................................................... 83,516
------------
OIL & GAS PRODUCTION
23,982 Santos Ltd............................................................................. 61,487
------------
OTHER METALS/MINERALS
7,291 Rio Tinto Ltd.......................................................................... 116,924
71,583 Western Mining Corp. Holdings Ltd.*.................................................... 306,492
------------
423,416
------------
OTHER PHARMACEUTICALS
4,219 CSL Limited............................................................................ 50,998
4,876 FH Faulding & Company Ltd.............................................................. 29,749
------------
80,747
------------
OTHER TELECOMMUNICATIONS
191,943 Telstra Corp........................................................................... 974,104
------------
PRECIOUS METALS
79,367 Normandy Mining Ltd.................................................................... 60,087
------------
PROPERTY - CASUALTY INSURERS
16,250 QBE Insurance Group Ltd................................................................ 67,716
------------
REAL ESTATE
15,600 AMP Diversified Property Trust......................................................... 23,323
53,692 General Property Trust................................................................. 86,046
21,343 Lend Lease Corporation Ltd............................................................. 244,995
12,948 Stockland Trust Group.................................................................. 27,826
52,753 Westfield Trust........................................................................ 101,020
------------
483,210
------------
SPECIALTY CHEMICALS
11,504 Orica Limited.......................................................................... 60,673
------------
SPECIALTY FOODS/CANDY
47,768 Goodman Fielder Ltd.................................................................... 44,066
------------
STEEL/IRON ORE
26,970 North Ltd.............................................................................. 51,990
------------
TOTAL AUSTRALIA........................................................................ 7,532,268
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999, CONTINUED
<TABLE>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
AUSTRIA (0.2%)
AIRLINES
1,573 Oesterreichische Luftverkehrs AG....................................................... $ 33,509
------------
ALCOHOLIC BEVERAGES
588 BBAG Oesterreichische Brau-Beteiligungs AG............................................. 27,130
------------
BUILDING MATERIALS
898 RHI AG................................................................................. 25,286
898 RHI AG (Rights)........................................................................ 189
------------
25,475
------------
BUILDING PRODUCTS
4,433 Wienerberger Baustoffindustrie AG...................................................... 102,243
------------
CONTAINERS/PACKAGING
769 Mayr-Melnhof Karton AG................................................................. 34,345
------------
DIVERSIFIED COMMERCIAL SERVICES
1,363 Flughafen Wien AG...................................................................... 47,176
------------
ELECTRIC UTILITIES
1,959 Oesterreichische Elektrizitaetswirtschafts AG (Verbund) (A Shares)..................... 284,276
------------
ENGINEERING & CONSTRUCTION
108 BWT AG................................................................................. 19,567
963 VA Technologie AG...................................................................... 64,560
------------
84,127
------------
HOME BUILDING
302 Bau Holding AG......................................................................... 10,443
------------
INTERNATIONAL BANKS
6,967 Bank Austria AG........................................................................ 347,312
------------
MULTI-LINE INSURANCE
454 Generali Holding Vienna AG............................................................. 74,078
------------
OIL REFINING/MARKETING
1,715 OMV AG................................................................................. 166,051
------------
SEMICONDUCTORS
191 Austria Mikro Systeme International AG................................................. 6,174
------------
STEEL/IRON ORE
708 Boehler-Uddeholm AG.................................................................... 29,717
------------
TOBACCO
1,421 Austria Tabakwerke AG.................................................................. 64,065
------------
TOTAL AUSTRIA.......................................................................... 1,336,121
------------
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
FINLAND (2.1%)
ALCOHOLIC BEVERAGES
4,350 Oyj Hartwall Abp....................................................................... $ 55,922
------------
CONSTRUCTION/AGRICULTURAL EQUIPMENT/TRUCKS
4,927 Metra Oyj (B Shares)................................................................... 93,528
------------
E.D.P. SERVICES
5,282 Tietoenator Oyj Abp.................................................................... 183,823
------------
FOOD CHAINS
12,873 Kesko Oyj.............................................................................. 146,891
------------
INDUSTRIAL MACHINERY/COMPONENTS
11,519 Metso Oyj.............................................................................. 130,590
------------
INTERNATIONAL BANKS
72,399 Merita PLC............................................................................. 420,699
------------
OTHER METALS/MINERALS
13,827 Outokumpu Oyj.......................................................................... 158,652
------------
PAPER
19,909 UPM-Kymmene Oyj........................................................................ 629,881
------------
PROPERTY - CASUALTY INSURERS
7,835 Sampo Insurance Co "A"................................................................. 272,672
------------
SPECIALTY FOODS/CANDY
11,941 Raisio Group PLC....................................................................... 77,951
------------
TELECOMMUNICATIONS
25,752 Sonera Group Oyj....................................................................... 775,363
------------
TELECOMMUNICATIONS EQUIPMENT
79,035 Nokia Oyj (A Shares)................................................................... 9,069,347
------------
TOTAL FINLAND.......................................................................... 12,015,319
------------
FRANCE (6.5%)
ALCOHOLIC BEVERAGES
4,383 LVMH-Moet Hennessy Louis Vuitton....................................................... 1,326,603
------------
AUTO PARTS: O.E.M.
4,075 Valeo S.A.............................................................................. 293,519
------------
AUTOMOTIVE AFTERMARKET
5,698 Compagnie Generale des Etablissements Michelin (B Shares).............................. 248,777
------------
BEVERAGES - NON-ALCOHOLIC
3,233 Pernod-Ricard.......................................................................... 218,891
------------
BUILDING MATERIALS
4,972 Lafarge S.A............................................................................ 479,778
------------
CABLE TELEVISION
5,620 Canal Plus............................................................................. 391,172
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999, CONTINUED
<TABLE>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMPUTER SOFTWARE
4,822 Dassault Systemes S.A.................................................................. $ 200,513
------------
CONSUMER SPECIALTIES
2,801 Societe BIC S.A........................................................................ 137,358
------------
CONTAINERS/PACKAGING
4,085 Pechiney S.A. (A Shares)............................................................... 229,188
------------
DIVERSIFIED COMMERCIAL SERVICES
1,560 Sodexho Alliance S.A................................................................... 256,647
------------
DIVERSIFIED ELECTRONIC PRODUCTS
325 Sagem S.A.............................................................................. 99,567
------------
DIVERSIFIED MANUFACTURING
4,537 Compagnie de Saint Gobain.............................................................. 789,479
------------
E.D.P. SERVICES
2,849 Cap Gemini S.A......................................................................... 432,656
------------
ELECTRICAL PRODUCTS
1,304 Legrand SA............................................................................. 312,858
7,888 Schneider Electric S.A................................................................. 544,874
------------
857,732
------------
ENGINEERING & CONSTRUCTION
1,274 Bouygues S.A........................................................................... 444,718
6,509 Suez Lyonnaise des Eaux................................................................ 1,053,684
------------
1,498,402
------------
FARMING/SEEDS/MILLING
1,975 Eridania Beghin-Say S.A................................................................ 224,946
------------
FOOD CHAINS
10,499 Carrefour S.A.......................................................................... 1,948,715
3,486 Etablissements Economiques du Casino Guichard-Perrachon S.A............................ 397,044
861 Promodes............................................................................... 926,171
------------
3,271,930
------------
HOTELS/RESORTS
1,726 Accor S.A.............................................................................. 389,531
------------
INTEGRATED OIL COMPANIES
12,688 Elf Aquitaine S.A...................................................................... 1,873,307
------------
INTERNATIONAL BANKS
21,046 Banque Nationale de Paris.............................................................. 1,853,292
5,226 Banque Nationale de Paris-CVG.......................................................... 30,974
5 Compagnie Financiere de Paribas........................................................ 522
4,393 Societe Generale....................................................................... 959,002
------------
2,843,790
------------
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
MAJOR CHEMICALS
17,070 Rhone-Poulenc S.A. (A Shares).......................................................... $ 957,708
------------
MEDICAL SPECIALTIES
613 Essilor International S.A.............................................................. 193,941
------------
MILITARY/GOV'T/TECHNICAL
7,561 Thomson CSF............................................................................ 257,555
------------
MOTOR VEHICLES
2,392 PSA Peugeot Citroen.................................................................... 460,375
------------
MULTI-LINE INSURANCE
15,046 AXA++.................................................................................. 2,127,833
------------
MULTI-SECTOR COMPANIES
6,515 Lagardere S.C.A........................................................................ 264,523
21,917 Vivendi................................................................................ 1,665,340
------------
1,929,863
------------
OIL REFINING/MARKETING
11,809 Total S.A. (B Shares).................................................................. 1,600,310
------------
OTHER PHARMACEUTICALS
31,122 Sanofi-Synthelabo S.A.................................................................. 1,376,852
------------
OTHER SPECIALTY STORES
5,382 Pinault-Printemps-Redoute S.A.......................................................... 1,029,033
------------
OTHER TELECOMMUNICATIONS
41,466 France Telecom S.A..................................................................... 4,016,605
------------
PACKAGE GOODS/COSMETICS
2,997 L'Oreal S.A............................................................................ 2,005,424
------------
PACKAGED FOODS
2,867 Groupe Danone.......................................................................... 733,208
------------
REAL ESTATE
2,100 Foncierre Lyonnaise.................................................................... 281,926
4,610 Klepierre.............................................................................. 477,906
7,050 Simco S.A.............................................................................. 608,921
1,300 Societe Immobiliere de Location pour l'Industrie et le Commerce........................ 215,244
4,920 Unibail................................................................................ 721,220
------------
2,305,217
------------
SPECIALTY CHEMICALS
4,180 Air Liquide S.A........................................................................ 645,805
------------
SPECIALTY STEELS
13,126 Usinor S.A............................................................................. 182,862
------------
TELECOMMUNICATIONS EQUIPMENT
7,890 Alcatel++.............................................................................. 1,235,638
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999, CONTINUED
<TABLE>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
TOBACCO
3,039 SEITA.................................................................................. $ 169,861
------------
TOTAL FRANCE........................................................................... 37,291,876
------------
GERMANY (8.2%)
AIRLINES
23,450 Deutsche Lufthansa AG.................................................................. 494,607
------------
AUTO PARTS: O.E.M.
7,550 Continental AG......................................................................... 164,420
------------
BUILDING MATERIALS
600 Heidelberger Zement AG................................................................. 47,457
600 Heidelberger (Rights)*................................................................. 190
------------
47,647
------------
BUILDING PRODUCTS
2,950 Buderus AG............................................................................. 49,777
------------
COMPUTER SOFTWARE
3,550 SAP AG................................................................................. 1,322,321
2,450 SAP AG (Pref.)......................................................................... 1,082,600
------------
2,404,921
------------
DEPARTMENT STORES
1,650 Karstadt AG............................................................................ 74,824
------------
DIVERSIFIED ELECTRONIC PRODUCTS
36,500 Siemens AG (Registered Shares)......................................................... 3,285,369
------------
DIVERSIFIED MANUFACTURING
21,850 Mannesmann AG.......................................................................... 3,444,930
------------
ENGINEERING & CONSTRUCTION
4,200 Bilfinger & Berger Bau AG.............................................................. 86,372
------------
INTERNATIONAL BANKS
25,950 Bayerische Hypo-Und Vereinsbank AG..................................................... 1,707,693
32,650 Deutsche Bank AG (Registered Shares)................................................... 2,348,309
30,900 Dresdner Bank AG....................................................................... 1,588,623
------------
5,644,625
------------
MAJOR CHEMICALS
40,100 BASF AG................................................................................ 1,807,874
43,200 Bayer AG............................................................................... 1,772,234
------------
3,580,108
------------
METALS FABRICATIONS
9,650 FAG Kugelfischer Georg Schaefer AG..................................................... 81,924
------------
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
MOTOR VEHICLES
59,800 DaimlerChrylser AG..................................................................... $ 4,666,816
19,050 Volkswagen AG.......................................................................... 1,129,065
6,000 Volkswagen AG (Pref.).................................................................. 213,240
------------
6,009,121
------------
MULTI-LINE INSURANCE
15,100 Allianz AG++........................................................................... 4,610,131
400 Axa Colonia Konzern AG................................................................. 40,918
9,850 Muenchener Rueckver AG (Registered Shares)............................................. 2,264,543
------------
6,915,592
------------
MULTI-SECTOR COMPANIES
5,950 Linde AG............................................................................... 312,489
5,950 Linde AG (Rights)*..................................................................... 18,887
8,150 Preussag AG............................................................................ 442,642
27,600 RWE AG................................................................................. 1,114,797
26,400 Thyssen Krupp AG*...................................................................... 626,432
32,000 VEBA AG................................................................................ 1,734,606
48,000 Viag AG................................................................................ 888,395
------------
5,138,248
------------
OTHER SPECIALTY STORES
4,900 Douglas Holding AG..................................................................... 222,979
15,200 Metro AG............................................................................... 819,129
------------
1,042,108
------------
OTHER TELECOMMUNICATIONS
8,700 MAN AG................................................................................. 289,931
------------
PACKAGE GOODS/COSMETICS
2,300 Beiersdorf AG.......................................................................... 155,237
------------
SHOE MANUFACTURING
3,200 Adidas-Salomon AG...................................................................... 232,181
------------
TELECOMMUNICATIONS
173,650 Deutsche Telekom AG.................................................................... 8,002,837
------------
TOTAL GERMANY.......................................................................... 47,144,779
------------
HONG KONG (2.0%)
AIRLINES
165,000 Cathay Pacific Airways, Ltd............................................................ 334,524
------------
BROADCASTING
25,000 Television Broadcasts Ltd.............................................................. 133,552
------------
DIVERSIFIED MANUFACTURING
53,000 Johnson Electric Holdings Ltd.......................................................... 286,542
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999, CONTINUED
<TABLE>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
HOTELS/RESORTS
60,500 Hong Kong & Shanghai Hotels Ltd........................................................ $ 44,391
98,000 Regal Hotels International............................................................. 8,452
26,000 Shangri-La Asia Ltd.................................................................... 28,281
------------
81,124
------------
INTERNATIONAL BANKS
86,735 Bank of East Asia, Ltd................................................................. 189,804
122,200 Hang Seng Bank Ltd..................................................................... 1,329,201
------------
1,519,005
------------
MULTI-SECTOR COMPANIES
77,000 Hopewell Holdings Ltd.................................................................. 48,816
250,000 Hutchison Whampoa, Ltd................................................................. 2,510,137
136,000 New World Development Co., Ltd......................................................... 257,347
103,000 Swire Pacific Ltd. (Class A)........................................................... 510,459
------------
3,326,759
------------
NATURAL GAS
248,000 Hong Kong & China Gas Co., Ltd......................................................... 328,815
------------
NEWSPAPERS
52,000 South China Morning Post (Holdings) Ltd................................................ 37,819
------------
REAL ESTATE
151,000 Cheung Kong (Holdings) Ltd............................................................. 1,370,342
123,000 Hang Lung Development Co............................................................... 131,415
54,000 Hysan Development Co., Ltd............................................................. 64,298
218,000 Sino Land Co........................................................................... 99,620
161,000 Sun Hung Kai Properties Ltd............................................................ 1,300,476
147,000 Wharf (Holdings) Ltd................................................................... 424,812
------------
3,390,963
------------
TELECOMMUNICATIONS
775,200 Cable & Wireless HKT Ltd............................................................... 1,771,230
------------
UTILITIES
115,000 CLP Holdings Ltd....................................................................... 527,000
------------
TOTAL HONG KONG........................................................................ 11,737,333
------------
ITALY (2.7%)
AIRLINES
57,721 Alitalia............................................................................... 159,790
------------
APPAREL
77,548 Benetton Group SpA..................................................................... 171,742
------------
AUTO PARTS: O.E.M.
105,536 Pirelli SpA............................................................................ 242,630
------------
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
BROADCASTING
55,386 Mediaset SpA*.......................................................................... $ 554,312
------------
BUILDING MATERIALS
6,880 Italcementi SpA........................................................................ 87,140
10,136 Italcementi SpA (Pref.)................................................................ 47,354
------------
134,494
------------
CELLULAR TELEPHONE
66,807 Telecom Italia Mobile SpA-RNC.......................................................... 232,500
290,179 Telecom Italia Mobile SpA.............................................................. 1,817,775
40,713 Telecom Italia SpA-RNC................................................................. 200,511
167,059 Telecom Italia SpA..................................................................... 1,446,441
------------
3,697,227
------------
ELECTRIC UTILITIES
30,946 Edison SpA............................................................................. 257,495
------------
ENGINEERING & CONSTRUCTION
19,787 Impregilo SpA.......................................................................... 14,023
8,209 Sirti SpA.............................................................................. 44,585
------------
58,608
------------
FOOD CHAINS
9,811 La Rinascente SpA...................................................................... 68,288
------------
INTEGRATED OIL COMPANIES
362,483 Ente Nazionale Idrocarburi SpA......................................................... 2,125,447
------------
INTERNATIONAL BANKS
88,093 Banca Commerciale Italiana............................................................. 531,404
15,038 Banca Popolare di Milano............................................................... 101,339
118,991 Banco Ambrosiano Veneto SpA............................................................ 509,481
64,489 Istituto Bancario San Paolo di Torino SpA*............................................. 837,884
29,467 Mediobanca SpA......................................................................... 303,922
195,409 Unicredito Italiano SpA................................................................ 917,049
------------
3,201,079
------------
LIFE INSURANCE
45,939 Assicurazioni Generali++............................................................... 1,477,642
191,057 Istituto Nazionale delle Assicurazioni SpA............................................. 581,295
------------
2,058,937
------------
MOTOR VEHICLES
18,899 Fiat SpA............................................................................... 599,920
6,197 Fiat SpA (Pref.)....................................................................... 95,482
------------
695,402
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999, CONTINUED
<TABLE>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
MULTI-LINE INSURANCE
22,163 Runione Adriatica di Sicurta SpA....................................................... $ 204,982
6,168 Societa Assicuratrice Industriale SpA.................................................. 64,722
------------
269,704
------------
MULTI-SECTOR COMPANIES
42,033 Snia SpA............................................................................... 43,929
------------
NATURAL GAS
21,128 Italgas SpA............................................................................ 87,567
------------
OTHER TELECOMMUNICATIONS
198,110 Olivetti SpA........................................................................... 386,515
------------
PAPER
3,969 Burgo (Cartiere) SpA................................................................... 29,300
5,485 Reno de Medici SpA..................................................................... 16,110
------------
45,410
------------
REAL ESTATE
2,482,662 Unione Immobiliare SpA................................................................. 1,280,307
------------
SPECIALTY FOODS/CANDY
65,800 Montedison SpA......................................................................... 117,621
79,395 Parmalat Finanzeria SpA................................................................ 104,579
------------
222,200
------------
TOTAL ITALY............................................................................ 15,761,083
------------
JAPAN (28.5%)
AIR FREIGHT/DELIVERY SERVICES
53,000 Nippon Express Co., Ltd................................................................ 375,482
------------
AIRLINES
218,000 Japan Airlines Company, Ltd............................................................ 732,457
------------
ALCOHOLIC BEVERAGES
28,000 ASAHI Breweries, Ltd................................................................... 398,618
101,000 Kirin Brewery Co., Ltd................................................................. 1,157,665
------------
1,556,283
------------
APPAREL
24,000 Onward Kashiyama Co., Ltd.............................................................. 377,383
------------
AUTO PARTS: O.E.M.
24,000 Denso Corporation...................................................................... 513,776
44,000 NGK Spark Plug Co., Ltd................................................................ 358,607
------------
872,383
------------
AUTOMOTIVE AFTERMARKET
51,000 Bridgestone Corp....................................................................... 1,405,107
------------
BANKING
191,000 Sumitomo Bank Ltd...................................................................... 3,076,682
------------
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
BROADCASTING
18,000 Tokyo Broadcasting System, Inc......................................................... $ 476,049
------------
BUILDING MATERIALS
129,000 Asahi Glass Company, Ltd............................................................... 1,026,601
135,000 Ube Industries, Ltd.................................................................... 391,379
------------
1,417,980
------------
BUILDING PRODUCTS
73,000 Toto Ltd............................................................................... 556,417
------------
COMPUTER SOFTWARE
4,800 Fuji Soft ABC Inc...................................................................... 440,050
2,000 Konami Co., Ltd........................................................................ 193,914
------------
633,964
------------
CONSTRUCTION/AGRICULTURAL EQUIPMENT/TRUCKS
108,000 Komatsu Ltd............................................................................ 628,281
5,100 SMC Corporation........................................................................ 861,179
------------
1,489,460
------------
CONSUMER ELECTRONICS/APPLIANCES
81,000 Sharp Corp............................................................................. 1,290,775
39,000 Sony Corp.............................................................................. 6,087,549
------------
7,378,324
------------
CONSUMER SPECIALTIES
66,000 Casio Computer Co., Ltd................................................................ 453,643
------------
DEPARTMENT STORES
16,400 Marui Co. Ltd.......................................................................... 310,147
------------
DIVERSIFIED COMMERCIAL SERVICES
1,300 Meitec Corp............................................................................ 48,795
20,000 Secom Co., Ltd......................................................................... 2,146,491
------------
2,195,286
------------
DIVERSIFIED ELECTRONIC PRODUCTS
324,000 Hitachi Ltd.++......................................................................... 3,505,309
20,400 Kyocera Corp........................................................................... 1,958,337
189,000 Matsushita Electric Industrial Co., Ltd.++............................................. 3,982,481
148,000 NEC Corp............................................................................... 2,997,792
187,000 Sanyo Electric Co., Ltd................................................................ 897,571
293,000 Toshiba Corp........................................................................... 1,845,138
------------
15,186,628
------------
DIVERSIFIED FINANCIAL SERVICES
3,800 Nichiei Co., Ltd. (Kyoto).............................................................. 196,986
------------
DIVERSIFIED MANUFACTURING
164,000 Kubota Corp............................................................................ 653,355
230,000 Mitsubishi Electric Corp............................................................... 1,273,975
------------
1,927,330
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999, CONTINUED
<TABLE>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
E.D.P. SERVICES
2,100 CSK Corp............................................................................... $ 96,765
1,000 Toyo Information System Co., Ltd....................................................... 50,590
------------
147,355
------------
ELECTRIC UTILITIES
94,400 Tokyo Electric Power Co., Inc.......................................................... 2,111,472
------------
ELECTRICAL PRODUCTS
51,000 Furukawa Electric Co., Ltd............................................................. 372,084
48,000 NGK Insulators, Ltd.................................................................... 455,717
2,300 Nidec Corp............................................................................. 447,106
94,000 Sumitomo Electric Industries........................................................... 1,264,222
21,000 Taiyo Yuden Co., Ltd................................................................... 751,944
------------
3,291,073
------------
ELECTRONIC COMPONENTS
6,000 Alps Electric Co., Ltd................................................................. 116,348
1,300 Hirose Electric Co., Ltd............................................................... 227,004
25,000 Murata Manufacturing Co., Ltd.......................................................... 3,215,897
8,000 Omron Corp............................................................................. 167,419
------------
3,726,668
------------
ELECTRONIC DATA PROCESSING
10,400 Advantest Corp......................................................................... 1,567,438
179,000 Fujitsu Ltd.++......................................................................... 5,395,603
14,000 Tokyo Electron Ltd..................................................................... 1,163,867
------------
8,126,908
------------
ELECTRONIC DISTRIBUTORS
8,800 Softbank Corp.......................................................................... 3,657,867
------------
ENGINEERING & CONSTRUCTION
136,000 Kajima Corp............................................................................ 479,140
101,000 Shimizu Corporation.................................................................... 362,619
139,000 Taisei Corporation..................................................................... 293,559
------------
1,135,318
------------
FINANCE COMPANIES
8,400 Acom Co., Ltd.......................................................................... 919,267
1,300 Credit Saison Co., Ltd................................................................. 32,010
3,000 Orix Corp.............................................................................. 403,187
6,600 Promise Co., Ltd....................................................................... 443,506
8,900 Takefuji Corporation................................................................... 1,153,403
------------
2,951,373
------------
FINANCE ENERGY
21,000 Pioneer Corp........................................................................... 375,166
------------
FLUID CONTROLS
45,000 Ebara Corp............................................................................. 537,391
------------
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
FOOD CHAINS
74,000 Daiei, Inc............................................................................. $ 254,315
30,000 Ito-Yokado Co., Ltd.++................................................................. 2,401,843
27,000 Jusco Co............................................................................... 629,836
24,000 Mycal Corporation...................................................................... 113,814
------------
3,399,808
------------
HOME BUILDING
59,000 Daiwa House Industry Co., Ltd.......................................................... 540,328
60,000 Sekisui House Ltd...................................................................... 650,283
------------
1,190,611
------------
INDUSTRIAL MACHINERY/COMPONENTS
15,600 Fanuc, Ltd.++.......................................................................... 1,213,017
306,000 Mitsubishi Heavy Industries Ltd.++..................................................... 1,201,440
------------
2,414,457
------------
INDUSTRIAL SPECIALTIES
4,000 Hoya Corp.............................................................................. 287,991
------------
INTERNATIONAL BANKS
159,000 Asahi Bank Ltd......................................................................... 1,413,401
271,000 Bank of Tokyo-Mitsubishi Ltd........................................................... 4,495,421
115,000 Bank of Yokohama Ltd................................................................... 645,819
198,000 Daiwa Bank Ltd......................................................................... 948,469
190,000 Fuji Bank Ltd.++....................................................................... 2,608,237
27,000 Fukuoka Bank of Japan.................................................................. 208,131
14,000 Gunma Bank Ltd......................................................................... 105,097
173,000 Industrial Bank of Japan, Ltd.++....................................................... 2,341,653
4,000 Joyo Bank, Ltd......................................................................... 19,583
84,000 Mitsubishi Trust & Banking++........................................................... 1,131,343
114,000 Mitsui Trust & Banking Co., Ltd........................................................ 354,574
183,000 Sakura Bank Ltd........................................................................ 1,574,042
51,000 Shizuoka Bank, Ltd..................................................................... 577,710
131,000 Tokai Bank Ltd......................................................................... 1,144,379
------------
17,567,859
------------
INVESTMENT BANKERS/BROKERS/SERVICES
74,000 Daiwa Securities Co., Ltd.............................................................. 790,650
119,000 Nomura Securities Co., Ltd............................................................. 1,966,007
------------
2,756,657
------------
MAJOR PHARMACEUTICALS
32,000 Sankyo Co., Ltd........................................................................ 912,355
72,000 Takeda Chemical Industries, Ltd........................................................ 4,140,156
------------
5,052,511
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999, CONTINUED
<TABLE>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
MARINE TRANSPORTATION
108,000 Nippon Yusen Kabushiki Kaisha.......................................................... $ 466,545
------------
MEAT/POULTRY/FISH
27,000 Nippon Meat Packers, Inc............................................................... 335,135
------------
MEDICAL SPECIALTIES
14,000 Terumo Corp............................................................................ 426,034
------------
METALS FABRICATIONS
131,000 Mitsubishi Materials Corp.............................................................. 345,829
------------
MOTOR VEHICLES
52,000 Honda Motor Co.++...................................................................... 2,196,410
176,000 Nissan Motor Co., Ltd.................................................................. 1,055,966
235,000 Toyota Motor Corp...................................................................... 8,143,899
------------
11,396,275
------------
MOVIES/ENTERTAINMENT
5,900 Oriental Land Co., Ltd................................................................. 559,585
------------
NATURAL GAS
139,000 Osaka Gas Co., Ltd..................................................................... 465,691
135,000 Tokyo Gas Co., Ltd..................................................................... 320,102
------------
785,793
------------
NON - U.S. UTILITIES
77,300 Kansai Electric Power Co., Inc......................................................... 1,446,268
18,400 Tohoku Electric Power Co., Inc......................................................... 287,561
------------
1,733,829
------------
OFFICE EQUIPMENT/SUPPLIES
84,000 Canon, Inc............................................................................. 2,378,804
------------
OFFICE/PLANT AUTOMATION
6,000 Dainippon Screen Manufacturing Co., Ltd................................................ 31,161
------------
OIL REFINING/MARKETING
125,000 Nippon Oil Co.......................................................................... 551,982
------------
OTHER CONSUMER SERVICES
6,600 Benesse Corporation.................................................................... 1,412,883
------------
OTHER METALS/MINERALS
70,000 Sumitomo Metal Mining Co............................................................... 211,673
------------
OTHER PHARMACEUTICALS
28,000 Chugai Pharmaceutical Co............................................................... 333,301
28,000 Taisho Pharmaceutical Co., Ltd......................................................... 1,166,555
25,000 Yamanouchi Pharmaceutical Co., Ltd..................................................... 1,135,164
------------
2,635,020
------------
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
PACKAGE GOODS/COSMETICS
38,000 Kao Corp............................................................................... $ 1,160,027
27,000 Shiseido Company, Ltd.................................................................. 412,115
------------
1,572,142
------------
PAPER
132,000 Oji Paper Co., Ltd..................................................................... 931,362
------------
PHOTOGRAPHIC PRODUCTS
42,000 Fuji Photo Film Co.++.................................................................. 1,350,677
12,000 Nikon Corporation...................................................................... 285,687
------------
1,636,364
------------
PRECISION INSTRUMENTS
53,000 Yokogawa Electric Corp................................................................. 371,412
------------
PRINTING/FORMS
63,000 Dai Nippon Printing Co., Ltd........................................................... 1,149,688
51,000 Toppan Printing Co., Ltd............................................................... 626,178
------------
1,775,866
------------
PROPERTY - CASUALTY INSURERS
96,000 Tokio Marine & Fire Insurance Co....................................................... 1,257,944
------------
RAILROADS
118 Central Japan Railway Co............................................................... 798,598
277 East Japan Railway Co.++............................................................... 1,699,174
87,000 Kinki Nippon Railway Co................................................................ 403,389
74,000 Tobu Railway Co., Ltd.................................................................. 232,293
79,000 Tokyu Corp............................................................................. 216,137
------------
3,349,591
------------
REAL ESTATE
59,000 Mitsubishi Estate Co., Ltd............................................................. 591,869
38,000 Mitsui Fudosan Co., Ltd................................................................ 284,170
------------
876,039
------------
RECREATIONAL PRODUCTS/TOYS
13,200 Nintendo Co., Ltd...................................................................... 2,097,149
13,900 Sega Enterprises Ltd................................................................... 249,792
10,600 Shimano, Inc........................................................................... 264,568
------------
2,611,509
------------
RESTAURANTS
20,000 Skylark Co., Ltd....................................................................... 560,622
------------
SEMICONDUCTORS
11,000 Rohm Co., Ltd.......................................................................... 2,470,961
------------
SPECIALTY CHEMICALS
169,000 Asahi Chemical Industry Co., Ltd....................................................... 1,022,079
212,000 Mitsubishi Chemical Corp............................................................... 962,619
21,000 Shin-Etsu Chemical Co., Ltd............................................................ 866,852
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999, CONTINUED
<TABLE>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
266,000 Sumitomo Chemical Co., Ltd............................................................. $ 1,708,304
------------
4,559,854
------------
SPECIALTY FOODS/CANDY
86,000 Ajinomoto Co., Inc..................................................................... 965,096
------------
STEEL/IRON ORE
111,400 Kawasaki Steel Corp.................................................................... 252,380
778,000 Nippon Steel Co........................................................................ 1,979,169
------------
2,231,549
------------
TELECOMMUNICATIONS
787 Nippon Telegraph & Telephone Corp...................................................... 12,087,933
------------
TEXTILES
131,000 Teijin Ltd............................................................................. 669,022
148,000 Toray Industries Inc................................................................... 816,934
------------
1,485,956
------------
WHOLESALE DISTRIBUTORS
181,000 Marubeni Corporation................................................................... 576,865
86,000 Mitsubishi Corp........................................................................ 619,180
53,000 Mitsui & Co............................................................................ 392,272
58,000 Mitsukoshi Ltd......................................................................... 323,490
81,000 Sumitomo Corporation................................................................... 592,512
------------
2,504,319
------------
TOTAL JAPAN............................................................................ 163,867,543
------------
NETHERLANDS (5.2%)
AIR FREIGHT/DELIVERY SERVICES
31,042 TNT Post Group NV...................................................................... 792,233
------------
AIRLINES
3,894 Koninklijke Luchtvaart Maatschappi NV.................................................. 106,382
------------
ALCOHOLIC BEVERAGES
20,396 Heineken NV............................................................................ 1,043,002
------------
DIVERSIFIED COMMERCIAL SERVICES
6,363 Vedior NV.............................................................................. 107,367
------------
DIVERSIFIED ELECTRONIC PRODUCTS
21,437 Koninklijke (Royal) Philips Electronics NV............................................. 2,204,227
------------
DIVERSIFIED FINANCIAL SERVICES
62,006 ING Groep NV........................................................................... 3,667,157
------------
E.D.P. SERVICES
2,935 Getronics NV........................................................................... 146,715
------------
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
FINANCIAL PUBLISHING/SERVICES
42,876 Elsevier NV............................................................................ $ 408,310
17,908 Wolters Kluwer NV...................................................................... 600,001
------------
1,008,311
------------
FOOD CHAINS
41,208 Koninklijke Ahold NV................................................................... 1,268,972
------------
INTEGRATED OIL COMPANIES
138,118 Royal Dutch Petroleum Co............................................................... 8,277,815
------------
INTERNATIONAL BANKS
94,264 ABN-AMRO Holding NV++.................................................................. 2,285,455
------------
LIFE INSURANCE
38,108 Aegon NV++............................................................................. 3,526,558
------------
MAJOR CHEMICALS
22,221 Akzo Nobel NV.......................................................................... 959,399
------------
OFFICE EQUIPMENT/SUPPLIES
5,619 OCE NV................................................................................. 93,331
------------
PACKAGED FOODS
37,087 Unilever NV............................................................................ 2,464,053
------------
TELECOMMUNICATIONS
30,166 KPN NV................................................................................. 1,552,159
------------
WHOLESALE DISTRIBUTORS
5,216 Buhrmann NV............................................................................ 90,158
6,878 Hagemeyer NV........................................................................... 141,371
------------
231,529
------------
TOTAL NETHERLANDS...................................................................... 29,734,665
------------
PORTUGAL (0.7%)
ALCOHOLIC BEVERAGES
613 Unicer-Uniao Cervejeira, S.A........................................................... 11,636
------------
BUILDING MATERIALS
15,220 Cimpor-Cimentos de Portugal, SGPS, S.A................................................. 253,124
------------
ELECTRIC UTILITIES
62,060 EDP-Electricidade de Portugal, S.A..................................................... 967,328
------------
ENGINEERING & CONSTRUCTION
1,506 Engil-Sociedade Gestora de Participacoes Sociais S.A................................... 15,358
------------
FOOD DISTRIBUTORS
8,898 Jeronimo Martins SGPS, S.A............................................................. 249,047
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999, CONTINUED
<TABLE>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
INTERNATIONAL BANKS
21,318 Banco Comercial Portugues S.A.......................................................... $ 602,067
11,136 Banco Espirito Santo e Comercial de Lisboa, S.A. (Registered Shares)................... 290,312
------------
892,379
------------
INVESTMENT BANKERS/BROKERS/SERVICES
53,030 BPI-SGPS, S.A.......................................................................... 212,517
------------
OTHER SPECIALTY STORES
5,218 Sonae SGPS, S.A........................................................................ 174,772
------------
OTHER TRANSPORTATION
6,777 Brisa-Auto Estradas de Portugal, S.A................................................... 267,656
------------
PAPER
10,383 Portucel Industrial Empresa............................................................ 71,174
------------
PROPERTY - CASUALTY INSURERS
1,273 Companhia de Seguros Tranquilidade..................................................... 35,563
------------
TELECOMMUNICATIONS
17,563 Portugal Telecom S.A. (Registered Shares).............................................. 785,330
------------
TOTAL PORTUGAL......................................................................... 3,935,884
------------
SINGAPORE (2.0%)
AEROSPACE
437,000 Singapore Technologies Engineering Ltd................................................. 633,676
------------
AIRLINES
140,000 Singapore Airlines Ltd................................................................. 1,474,128
------------
ALCOHOLIC BEVERAGES
48,000 Fraser & Neave Ltd..................................................................... 205,054
------------
E.D.P. PERIPHERALS
13,800 Creative Technology, Ltd............................................................... 161,083
------------
ELECTRONIC COMPONENTS
36,000 Venture Manufacturing Ltd.............................................................. 320,578
------------
HOTELS/RESORTS
131,000 Hotel Properties Ltd................................................................... 111,925
170,000 United Overseas Land, Ltd.............................................................. 147,292
------------
259,217
------------
INTERNATIONAL BANKS
122,115 DBS Holdings Ltd....................................................................... 1,381,325
166,950 Overseas-Chinese Banking Corporation Ltd............................................... 1,255,641
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
109,000 United Overseas Bank Ltd............................................................... $ 826,354
------------
3,463,320
------------
MARINE TRANSPORTATION
95,000 Neptune Orient Lines Ltd............................................................... 137,756
------------
METALS FABRICATIONS
71,000 NatSteel Ltd........................................................................... 118,761
------------
MULTI-SECTOR COMPANIES
125,000 Keppel Corp., Ltd...................................................................... 339,952
275,000 Sembcorp Industries Ltd................................................................ 347,473
------------
687,425
------------
NEWSPAPERS
54,000 Singapore Press Holdings Ltd........................................................... 925,993
------------
OTHER SPECIALTY STORES
44,000 Cycle and Carriage Ltd................................................................. 149,579
------------
REAL ESTATE
119,000 City Developments Ltd.................................................................. 615,764
229,750 DBS Land Ltd........................................................................... 425,770
45,000 First Capital Corporation Ltd.......................................................... 53,610
67,000 Parkway Holdings Ltd................................................................... 123,357
241,000 United Industrial Corp................................................................. 131,230
------------
1,349,731
------------
TELECOMMUNICATIONS
928,000 Singapore Telecommunications Ltd....................................................... 1,764,428
------------
TOTAL SINGAPORE........................................................................ 11,650,729
------------
SPAIN (3.4%)
BUILDING PRODUCTS
4,506 Zardoya Otis S.A....................................................................... 50,752
4,506 Zardoya Otis S.A. (Rights)............................................................. 5,037
------------
55,789
------------
ELECTRIC UTILITIES
80,413 Endesa S.A............................................................................. 1,613,812
80,271 Iberdrola S.A.......................................................................... 1,173,302
26,222 Union Electrica Fenosa, S.A............................................................ 384,663
------------
3,171,777
------------
ENGINEERING & CONSTRUCTION
5,599 ACS, Actividades de Construccion y Servicios, S.A...................................... 134,627
8,524 Fomento de Construcciones y Contratas S.A.............................................. 214,397
13,521 Grupo Dragados, S.A.................................................................... 143,591
------------
492,615
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
14
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999, CONTINUED
<TABLE>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
ENVIRONMENTAL SERVICES
13,053 Sociedad General de Aguas de Barcelona, S.A............................................ $ 208,963
------------
FARMING/SEEDS/MILLING
2,973 Azucarera Ebro Agricolas, S.A.......................................................... 53,238
------------
HOTELS/RESORTS
8,922 Sol Melia S.A.......................................................................... 102,089
------------
INTERNATIONAL BANKS
42,129 Argentaria, Caja Postal y Banco Hipotecario de Espana, S.A............................. 937,457
162,249 Banco Bilbao Vizcaya S.A.++............................................................ 2,186,758
319,968 Banco Santander Central Hispano, S.A.++................................................ 3,330,516
------------
6,454,731
------------
NATURAL GAS
35,316 Gas Natural SDG, S.A................................................................... 774,680
------------
OIL REFINING/MARKETING
76,970 Repsol-YPF, S.A........................................................................ 1,590,982
------------
OTHER TRANSPORTATION
24,178 Autopistas Concesionaria Espanola S.A.................................................. 261,356
------------
PROPERTY - CASUALTY INSURERS
6,856 Corporacion Mapfre S.A................................................................. 117,131
------------
REAL ESTATE
6,792 Corporacion Financiera Alba, S.A....................................................... 197,694
24,133 Metrovacesa S.A........................................................................ 514,867
22,070 Prima Inmobiliaria, S.A................................................................ 195,976
94,340 Vallehermoso S.A....................................................................... 816,821
------------
1,725,358
------------
RESTAURANTS
20,667 TelePizza, S.A......................................................................... 110,721
------------
SPECIALTY STEELS
6,895 Acerinox S.A........................................................................... 210,145
------------
TELECOMMUNICATIONS
235,035 Telefonica S.A.*....................................................................... 3,876,654
------------
TOBACCO
16,319 Tabacalera S.A......................................................................... 269,337
------------
TOTAL SPAIN............................................................................ 19,475,566
------------
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
SWEDEN (2.5%)
CLOTHING/SHOE/ACCESSORY STORES
55,400 Hennes & Mauritz AB (B Shares)......................................................... $ 1,475,344
------------
CONSUMER ELECTRONICS/APPLIANCES
20,800 Electrolux AB (Series B)............................................................... 415,757
------------
DIVERSIFIED COMMERCIAL SERVICES
26,500 Securitas AB (B Shares)................................................................ 394,038
------------
DIVERSIFIED MANUFACTURING
9,900 Trelleborg AB (Series B)............................................................... 90,496
------------
E.D.P. SERVICES
4,800 WM-Data AB (B Shares).................................................................. 202,126
------------
ENGINEERING & CONSTRUCTION
8,600 Skanska AB (B Shares).................................................................. 315,498
------------
INDUSTRIAL MACHINERY/COMPONENTS
8,700 Atlas Copco AB (A Shares).............................................................. 230,097
4,600 Atlas Copco AB (B Shares).............................................................. 119,979
13,400 Sandvik AB (A Shares).................................................................. 345,420
5,500 Sandvik AB (B Shares).................................................................. 142,782
------------
838,278
------------
INTERNATIONAL BANKS
35,800 ForeningsSparbanken AB................................................................. 571,592
40,600 Skandinaviska Enskilda Banken.......................................................... 418,133
44,000 Svenska Handelsbanken AB (A Shares).................................................... 611,349
------------
1,601,074
------------
INVESTMENT BANKERS/BROKERS/SERVICES
5,000 OM Gruppen AB.......................................................................... 64,596
------------
LIFE INSURANCE
34,900 Skandia Forsakrings AB................................................................. 778,410
------------
METALS FABRICATIONS
5,900 SKF AB (B Shares)...................................................................... 120,088
------------
MOTOR VEHICLES
9,900 Volvo AB (A Shares).................................................................... 258,818
20,800 Volvo AB (B Shares).................................................................... 538,709
------------
797,527
------------
OTHER TELECOMMUNICATIONS
6,800 NetCom AB (B Shares)................................................................... 283,029
------------
PACKAGE GOODS/COSMETICS
15,000 Svenska Cellulosa AB................................................................... 405,860
------------
REAL ESTATE
27,760 Castellum AB........................................................................... 240,220
41,760 Diligentia AB.......................................................................... 297,748
25,060 Drott AB (B Shares).................................................................... 241,290
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
15
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999, CONTINUED
<TABLE>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
15,880 Tornet Fastighnets AB.................................................................. $ 207,093
------------
986,351
------------
STEEL/IRON ORE
8,200 SSAB Svenskt Stal AB (Series A)........................................................ 102,440
------------
TELECOMMUNICATIONS EQUIPMENT
125,000 Ericsson (L.M.) Telephone Co. AB (B Shares)............................................ 5,210,365
------------
TOTAL SWEDEN........................................................................... 14,081,277
------------
SWITZERLAND (5.8%)
AIRLINES
980 SAirGroup.............................................................................. 206,407
------------
BUILDING MATERIALS
430 Holderbank Financiere Glarus AG (B Shares)............................................. 530,400
------------
CONSUMER SPECIALTIES
320 The Swatch Group AG.................................................................... 255,293
------------
DIVERSIFIED COMMERCIAL SERVICES
1,130 Adecco S.A. (Registered Shares)........................................................ 686,154
------------
DIVERSIFIED FINANCIAL SERVICES
2,910 Zurich Allied AG++..................................................................... 1,650,345
------------
DIVERSIFIED MANUFACTURING
370 Alusuisse Lonza Group AG............................................................... 226,129
310 Alusuisse Lonza Group AG (Rights)*..................................................... 181,310
------------
407,439
------------
ELECTRICAL PRODUCTS
17,900 ABB Ltd.++............................................................................. 1,805,645
------------
INTERNATIONAL BANKS
16,400 Credit Suisse Group++.................................................................. 3,157,784
12,500 UBS AG (Registered Shares)*++.......................................................... 3,643,129
------------
6,800,913
------------
MAJOR PHARMACEUTICALS
3,945 Novartis AG (Registered Shares)++...................................................... 5,910,889
86 Roche Holdings AG-Bearer++............................................................. 1,503,319
444 Roche Holdings
AG-Genusshein++...................................................................... 5,339,554
------------
12,753,762
------------
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
METALS FABRICATIONS
200 Georg Fischer AG (Registered Shares)................................................... $ 62,956
------------
MULTI-SECTOR COMPANIES
260 Sulzer AG.............................................................................. 182,822
------------
OTHER SPECIALTY STORES
390 Valora Holding AG...................................................................... 99,441
------------
OTHER TELECOMMUNICATIONS
4,370 Swisscom AG (Registered Shares)*++..................................................... 1,333,946
------------
PACKAGED FOODS
2,285 Nestle S.A. (Registered Shares)++...................................................... 4,414,734
------------
PROPERTY - CASUALTY INSURERS
905 Schweizerische Rueckversicherungs-Gesellschaft (Registered Shares)++................... 1,879,345
------------
TOTAL SWITZERLAND...................................................................... 33,069,602
------------
UNITED KINGDOM (15.3%)
ADVERTISING
33,626 WPP Group PLC.......................................................................... 365,132
------------
AEROSPACE
93,997 British Aerospace PLC.................................................................. 549,358
14,138 Cobham PLC............................................................................. 171,068
6,893 Meggitt Holdings, PLC.................................................................. 17,225
41,936 Rolls-Royce PLC........................................................................ 148,916
6,185 Smiths Industries PLC.................................................................. 83,430
------------
969,997
------------
AIR FREIGHT/DELIVERY SERVICES
1,105 Ocean Group PLC........................................................................ 16,895
------------
AIRLINES
52,929 British Airways PLC.................................................................... 275,621
------------
ALCOHOLIC BEVERAGES
39,562 Bass PLC............................................................................... 434,792
167,534 Diageo PLC............................................................................. 1,693,869
------------
2,128,661
------------
APPAREL
18,995 Baird (William) PLC.................................................................... 18,424
------------
AUTO PARTS: O.E.M.
1,500 BBA Group PLC.......................................................................... 10,481
72,814 GKN PLC................................................................................ 1,165,939
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
16
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999, CONTINUED
<TABLE>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
7,821 Laird Group PLC........................................................................ $ 33,816
------------
1,210,236
------------
BOOKS/MAGAZINES
7,251 EMAP PLC............................................................................... 94,173
56,494 Reed International PLC................................................................. 329,710
------------
423,883
------------
BUILDING MATERIALS
12,535 Barratt Developments PLC............................................................... 48,840
89,254 Blue Circle Industries PLC............................................................. 414,522
81,131 BPB Industries PLC..................................................................... 478,832
63,560 Hanson PLC............................................................................. 498,430
20,552 RMC Group PLC.......................................................................... 295,641
13,858 Tarmac Group PLC....................................................................... 116,647
------------
1,852,912
------------
BUILDING PRODUCTS
100,319 Caradon PLC............................................................................ 238,316
14,959 Rugby Group PLC........................................................................ 28,036
------------
266,352
------------
CABLE TELEVISION
78,857 British Sky Broadcasting Group PLC..................................................... 847,203
------------
CASINO/GAMBLING
75,349 Hilton Group PLC....................................................................... 229,786
23,545 London Clubs International PLC......................................................... 48,385
------------
278,171
------------
CATALOG/SPECIALTY DISTRIBUTION
49,839 Great Universal Stores PLC............................................................. 378,541
------------
CELLULAR TELEPHONE
1,204,335 Vodafone AirTouch PLC.................................................................. 5,603,193
------------
CLOTHING/SHOE/ACCESSORY STORES
18,031 Next PLC............................................................................... 194,310
------------
DEPARTMENT STORES
16,849 House of Fraser PLC.................................................................... 18,559
134,767 Marks & Spencer, PLC................................................................... 620,359
------------
638,918
------------
DIVERSIFIED COMMERCIAL SERVICES
53,803 British Airport Authority PLC.......................................................... 394,939
33,993 Compass Group PLC...................................................................... 364,367
133,571 Rentokil Initial PLC................................................................... 445,220
------------
1,204,526
------------
DIVERSIFIED FINANCIAL SERVICES
68,832 Abbey National PLC++................................................................... 1,346,602
73,281 Allied Zurich PLC*..................................................................... 885,484
341,409 HSBC Holdings PLC...................................................................... 4,206,767
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
244,220 Lloyds TSB Group PLC................................................................... $ 3,378,603
------------
9,817,456
------------
DIVERSIFIED MANUFACTURING
23,123 Fki Babcock PLC........................................................................ 60,633
27,840 IMI PLC................................................................................ 109,388
30,458 TI Group PLC........................................................................... 205,549
------------
375,570
------------
DRUGSTORE CHAINS
48,400 Boots Co. PLC.......................................................................... 497,310
------------
E.D.P. SERVICES
31,653 Parity Group PLC....................................................................... 106,287
------------
ELECTRIC UTILITIES
62,579 National Power PLC..................................................................... 423,093
61,451 Scottish Power PLC..................................................................... 570,289
32,863 United Utilities PLC................................................................... 325,511
------------
1,318,893
------------
ELECTRONIC DISTRIBUTORS
66,017 Misys PLC.............................................................................. 551,342
------------
ENGINEERING & CONSTRUCTION
8,766 Amec PLC............................................................................... 30,912
42,911 BICC Group (The) PLC................................................................... 76,895
13,858 Carillion PLC.......................................................................... 28,834
16,052 Jarvis PLC............................................................................. 68,679
33,513 Taylor Woodrow PLC..................................................................... 78,786
------------
284,106
------------
ENVIRONMENTAL SERVICES
13,177 Pennon Group PLC....................................................................... 198,216
------------
FINANCIAL PUBLISHING/SERVICES
58,465 Reuters Group PLC...................................................................... 543,539
------------
FOOD CHAINS
51,778 Safeway PLC............................................................................ 162,585
89,685 Sainsbury (J.) PLC..................................................................... 538,532
150,765 Tesco PLC.............................................................................. 448,622
------------
1,149,739
------------
HOME BUILDING
28,305 Beazer Homes, PLC...................................................................... 60,959
7,555 Berkeley Group (The) PLC............................................................... 68,188
------------
129,147
------------
INDUSTRIAL MACHINERY/COMPONENTS
19,607 Berisford PLC.......................................................................... 91,544
193,962 Invensys PLC........................................................................... 953,432
------------
1,044,976
------------
INDUSTRIAL SPECIALTIES
210,951 Pilkington PLC......................................................................... 315,591
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999, CONTINUED
<TABLE>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
INTEGRATED OIL COMPANIES
798,844 BP Amoco PLC........................................................................... $ 7,755,034
------------
INTERNATIONAL BANKS
69,151 Barclays PLC........................................................................... 2,117,937
112,125 Halifax PLC............................................................................ 1,433,193
------------
3,551,130
------------
INVESTMENT BANKERS/BROKERS/SERVICES
7,489 Schroders PLC.......................................................................... 149,836
------------
LIFE INSURANCE
93,164 Prudential Corp........................................................................ 1,461,928
------------
MAJOR CHEMICALS
35,650 Imperial Chemical Industries PLC....................................................... 354,582
------------
MAJOR PHARMACEUTICALS
68,647 AstraZeneca Group PLC++................................................................ 3,105,788
144,749 Glaxo Wellcome PLC..................................................................... 4,273,894
249,615 SmithKline Beecham PLC................................................................. 3,217,278
------------
10,596,960
------------
MARINE TRANSPORTATION
60,997 Associated British Ports Holdings PLC.................................................. 302,843
36,443 Peninsular & Orient Steam Navigation Co................................................ 516,444
------------
819,287
------------
MILITARY/GOV'T/TECHNICAL
11,426 Racal Electronics PLC.................................................................. 84,342
------------
MOVIES/ENTERTAINMENT
78,374 EMI Group PLC.......................................................................... 615,888
74,730 Rank Group PLC......................................................................... 233,119
------------
849,007
------------
MULTI-LINE INSURANCE
46,551 CGU PLC................................................................................ 678,437
253,896 Legal & General Group PLC.............................................................. 705,414
64,492 Royal & Sun Alliance Insurance Group PLC............................................... 438,943
------------
1,822,794
------------
MULTI-SECTOR COMPANIES
135,013 General Electric Co. PLC............................................................... 1,468,274
------------
MUTUAL FUNDS
63,882 Limit PLC.............................................................................. 155,433
------------
NEWSPAPERS
7,836 Trinity Mirror PLC..................................................................... 72,789
------------
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
OIL & GAS PRODUCTION
29,776 Enterprise Oil PLC..................................................................... $ 211,961
128,949 LASMO PLC.............................................................................. 285,659
------------
497,620
------------
OIL REFINING/MARKETING
38,714 Burmah Castrol PLC..................................................................... 667,008
------------
OIL/GAS TRANSMISSION
191,157 BG PLC................................................................................. 1,061,420
255,341 Centrica PLC........................................................................... 741,962
------------
1,803,382
------------
OTHER METALS/MINERALS
53,215 Rio Tinto PLC.......................................................................... 910,724
------------
OTHER PHARMACEUTICALS
6,590 Scotia Holdings PLC.................................................................... 16,251
------------
OTHER SPECIALTY STORES
12,416 Carpetright PLC........................................................................ 93,487
73,111 Kingfisher PLC......................................................................... 798,692
16,083 Lex Service PLC........................................................................ 122,948
------------
1,015,127
------------
OTHER TRANSPORTATION
28,868 Firstbus PLC........................................................................... 116,275
50,744 Stagecoach Holdings PLC................................................................ 144,322
------------
260,597
------------
PACKAGED FOODS
39,697 Assocated British Food Ltd............................................................. 248,158
178,858 Unilever PLC........................................................................... 1,659,870
------------
1,908,028
------------
PAPER
34,957 Rexam PLC.............................................................................. 143,673
------------
PRECIOUS METALS
32,809 Johnson Matthey PLC.................................................................... 303,941
33,794 Lonmin PLC............................................................................. 340,011
------------
643,952
------------
PRINTING/FORMS
48,252 Arjo Wiggins Appleton PLC.............................................................. 169,758
------------
RAILROADS
23,318 Railtrack Group PLC.................................................................... 472,285
------------
REAL ESTATE
207,321 British Land Company PLC............................................................... 1,491,156
47,430 Capital Shopping Centers PLC........................................................... 314,239
258,160 Grantchester Holdings PLC.............................................................. 572,960
111,530 Great Portland Estates PLC............................................................. 348,375
79,790 Hammerson PLC.......................................................................... 590,227
176,459 Land Securities PLC.................................................................... 2,204,749
141,383 MEPC PLC............................................................................... 979,708
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999, CONTINUED
<TABLE>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
158,660 Slough Estates PLC..................................................................... $ $920,755
------------
7,422,169
------------
RESTAURANTS
87,846 Granada Group PLC...................................................................... 694,655
------------
SPECIALTY CHEMICALS
28,341 Boc Group PLC.......................................................................... 607,102
------------
SPECIALTY FOODS/CANDY
100,005 Cadbury Schweppes PLC.................................................................. 655,578
35,781 Tate & Lyle PLC........................................................................ 233,531
------------
889,109
------------
SPECIALTY STEELS
133,094 Corus Group PLC........................................................................ 253,816
------------
TELECOMMUNICATIONS
255,402 British Telecommunications PLC......................................................... 4,633,386
93,440 Cable & Wireless PLC................................................................... 1,092,205
------------
5,725,591
------------
TOBACCO
73,281 British American Tobacco PLC........................................................... 485,510
------------
TOOLS/HARDWARE
2,694 McKechnie PLC.......................................................................... 17,494
------------
TRUCKING
47,416 NFC PLC................................................................................ 152,786
------------
UTILITIES
28,786 Hyder PLC.............................................................................. 259,100
------------
WATER SUPPLY
23,388 Angian Water PLC....................................................................... 260,306
21,565 Kelda Group PLC........................................................................ 131,176
25,262 Thames Water PLC....................................................................... 365,470
------------
756,952
------------
TOTAL UNITED KINGDOM................................................................... 87,919,232
------------
TOTAL COMMON AND PREFERRED STOCKS AND RIGHTS
(IDENTIFIED COST $465,637,305)......................................................... 496,553,277
------------
</TABLE>
<TABLE>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENT (a) (14.1%)
U.S. GOVERNMENT AGENCY
$ 81,000 Federal Home Loan Mortgage Corp. 5.16% due 11/01/99 (AMORTIZED COST $81,000,000)....... $ 81,000,000
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $546,637,305) (b)........................................................ 100.5% 577,553,277
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS............................................ (0.5) (2,642,072)
----- -------------
NET ASSETS................................................................................ 100.0% $ 574,911,205
----- -------------
----- -------------
</TABLE>
- ---------------------
* Non-income producing security.
(a) Security was purchased on a discount basis. The interest rate shown has
been adjusted to reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $45,685,212 and the
aggregate gross unrealized depreciation is $14,769,240, resulting in net
unrealized appreciation of $30,915,972.
++ Some or all of these securities are segregated in connection with open
forward foreign currency contracts.
SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999, CONTINUED
FUTURES CONTRACTS OPEN AT OCTOBER 31, 1999:
<TABLE>
<CAPTION>
NUMBER OF LONG/ DESCRIPTION, DELIVERY MONTH, UNDERLYING FACE UNREALIZED
CONTRACTS SHORT AND YEAR AMOUNT AT VALUE GAIN/LOSS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
3 Short FTSE 100 December/1999 (295,826) $ (14,446)
23 Short FTSE 100 December/1999 (2,276,338) (102,415)
109 Short FTSE 100 December/1999 (10,730,596) (542,624)
112 Long TSE TOPIX 100 December/1999 16,036,095 800,998
58 Long TSE TOPIX 100 December/1999 8,529,904 189,306
29 Long MIB 30 INDEX December/1999 5,337,200 (253,781)
3 Long MIB 30 INDEX December/1999 539,935 (14,064)
153 Long CAC40 10EU December/1999 7,464,227 438,076
165 Long CAC40 10EU December/1999 8,450,837 71,254
62 Long EURX DAX INDEX December/1999 9,031,331 21,250
30 Long EURX DAX INDEX December/1999 4,193,371 186,910
24 Long EURX DAX INDEX December/1999 3,426,541 77,684
38 Long EURX DAX INDEX December/1999 5,549,494 (1,138)
66 Long IBEX 35 PLUS November/1999 6,734,148 84,569
---------
Net unrealized gain.............................................. $ 941,579
=========
</TABLE>
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT OCTOBER 31, 1999:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS IN EXCHANGE DELIVERY APPRECIATION
TO DELIVER FOR DATE (DEPRECIATION)
- ----------------------------------------------------------
<S> <C> <C> <C>
$ 62,681 JPY 6,519,479 11/1/99 (96)
$ 5,823,678 HKD 45,245,903 11/2/99 600
JPY 9,404,760 $ 89,740 11/2/99 543
$ 5,728,493 CHF 8,728,103 11/3/99 $ 7,266
$ 882,690 EUR 838,206 11/3/99 1,282
$ 4,615,882 EUR 4,265,000 3/07/00 (76,168)
$ 9,299,931 EUR 8,575,000 3/07/00 (172,605)
$ 13,494,004 EUR 12,700,000 3/07/00 24,017
EUR 5,504,160 $ 5,935,054 3/10/00 75,245
$ 2,587,923 GBP 1,597,908 3/10/00 40,177
$ 1,292,001 EUR 1,205,000 3/17/00 (8,569)
$ 4,750,793 EUR 4,476,390 3/17/00 16,961
$ 13,500,000 EUR 12,555,804 3/17/00 (126,953)
$ 1,250,000 EUR 1,165,936 3/17/00 (8,175)
$ 2,905,255 JPY 314,000,000 3/17/00 178,147
$ 3,032,774 JPY 326,842,000 3/17/00 176,734
$ 4,940,157 JPY 534,772,000 3/17/00 311,172
$ 7,461,832 JPY 782,000,000 3/17/00 217,215
JPY 944,546,336 $ 9,154,000 3/17/00 (121,212)
JPY 12,854,965 $ 125,500 3/17/00 (733)
JPY 938,971,550 $ 9,154,000 3/17/00 (66,469)
JPY 12,922,735 $ 125,500 3/17/00 (1,398)
JPY 292,200,000 $ 2,837,169 3/17/00 (32,163)
JPY 154,734,454 $ 1,519,000 3/17/00 (454)
GBP 4,556,216 $ 7,448,000 3/24/00 (45,243)
GBP 1,385,000 $ 2,269,184 3/24/00 (8,615)
GBP 6,518,000 $ 10,704,837 3/24/00 (14,796)
---------
Net unrealized appreciation......... $ 365,710
=========
</TABLE>
CURRENCY ABBREVIATIONS:
<TABLE>
<S> <C>
CHF Swiss Franc.
EUR Euro.
GBP British Pound.
HKD Hong Kong Dollar.
JPY Japanese Yen.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
SUMMARY OF INVESTMENTS OCTOBER 31, 1999
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------
Advertising....................................................................... $ 365,132 0.1%
Aerospace......................................................................... 1,603,673 0.3
Air Freight/Delivery Services..................................................... 1,224,230 0.2
Airlines.......................................................................... 3,817,425 0.7
Alcoholic Beverages............................................................... 6,540,707 1.1
Apparel........................................................................... 567,549 0.1
Auto Parts: O.E.M................................................................. 2,783,188 0.5
Automotive Aftermarket............................................................ 1,653,884 0.3
Banking........................................................................... 3,076,682 0.5
Beverages - Non-Alcoholic......................................................... 295,856 0.1
Books/Magazines................................................................... 423,883 0.1
Broadcasting...................................................................... 1,163,913 0.2
Building Materials................................................................ 4,980,400 0.9
Building Products................................................................. 1,030,578 0.2
Cable Television.................................................................. 1,238,375 0.2
Casino/Gambling................................................................... 360,090 0.1
Catalog/Specialty Distribution.................................................... 378,541 0.1
Cellular Telephone................................................................ 9,300,420 1.6
Clothing/Shoe/Accessory Stores.................................................... 1,669,654 0.3
Computer Software................................................................. 3,239,398 0.6
Construction/Agricultural Equipment/Trucks........................................ 1,582,988 0.3
Consumer Electronics/Appliances................................................... 7,794,081 1.4
Consumer Specialties.............................................................. 846,294 0.1
Containers/Packaging.............................................................. 464,472 0.1
Department Stores................................................................. 1,023,889 0.2
Diversified Commercial Services................................................... 5,135,004 0.9
Diversified Electronic Products................................................... 20,775,791 3.6
Diversified Financial Services.................................................... 15,450,091 2.7
Diversified Manufacturing......................................................... 7,321,786 1.3
Drugstore Chains.................................................................. 497,310 0.1
E.D.P. Peripherals................................................................ 161,083 0.0
E.D.P. Services................................................................... 1,218,962 0.2
Electric Utilities................................................................ 8,111,241 1.4
Electrical Products............................................................... 5,954,450 1.0
Electronic Components............................................................. 4,047,246 0.7
Electronic Data Processing........................................................ 8,126,908 1.4
Electronic Distributors........................................................... 4,209,209 0.7
Engineering & Construction........................................................ 4,009,793 0.7
Environmental Services............................................................ 407,179 0.1
Farming/Seeds/Milling............................................................. 278,184 0.0
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Finance Companies................................................................. $ 2,951,373 0.5%
Finance Energy.................................................................... 375,166 0.1
Financial Publishing/Services..................................................... 1,551,850 0.3
Fluid Controls.................................................................... 537,391 0.1
Food Chains....................................................................... 9,675,505 1.7
Food Distributors................................................................. 249,047 0.0
Forest Products................................................................... 54,651 0.0
Home Building..................................................................... 1,330,201 0.2
Hotels/Resorts.................................................................... 831,961 0.1
Industrial Machinery/Components................................................... 4,428,301 0.8
Industrial Specialties............................................................ 603,582 0.1
Integrated Oil Companies.......................................................... 20,031,603 3.5
International Banks............................................................... 57,930,603 10.1
Investment Bankers/Brokers/Services............................................... 3,183,606 0.6
Life Insurance.................................................................... 8,209,024 1.4
Major Chemicals................................................................... 5,851,797 1.0
Major Pharmaceuticals............................................................. 28,403,233 4.9
Marine Transportation............................................................. 1,480,980 0.3
Meat/Poultry/Fish................................................................. 335,135 0.1
Media Conglomerates............................................................... 982,820 0.2
Medical Specialties............................................................... 619,975 0.1
Metals Fabrications............................................................... 729,558 0.1
Military/Gov't/Technical.......................................................... 341,897 0.1
Motor Vehicles.................................................................... 19,358,700 3.4
Movies/Entertainment.............................................................. 1,408,592 0.2
Multi-Line Insurance.............................................................. 11,226,817 2.0
Multi-Sector Companies............................................................ 13,490,802 2.3
Mutual Funds...................................................................... 155,433 0.0
Natural Gas....................................................................... 2,060,371 0.4
Newspapers........................................................................ 1,036,601 0.2
Non - U.S. Utilities.............................................................. 1,733,829 0.3
Office Equipment/Supplies......................................................... 2,472,135 0.4
Office/Plant Automation........................................................... 31,161 0.0
Oil & Gas Production.............................................................. 559,107 0.1
Oil Refining/Marketing............................................................ 4,576,333 0.8
Oil/Gas Transmission.............................................................. 1,803,382 0.3
Other Consumer Services........................................................... 1,412,883 0.2
Other Metals/Minerals............................................................. 1,704,465 0.3
Other Pharmaceuticals............................................................. 4,108,870 0.7
Other Specialty Stores............................................................ 3,510,060 0.6
Other Telecommunications.......................................................... 7,284,130 1.3
Other Transportation.............................................................. 789,609 0.1
Package Goods/Cosmetics........................................................... 4,138,663 0.7
Packaged Foods.................................................................... 9,520,023 1.7
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
21
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
SUMMARY OF INVESTMENTS OCTOBER 31, 1999, CONTINUED
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Paper............................................................................. $ 1,821,500 0.3%
Photographic Products............................................................. 1,636,364 0.3
Precious Metals................................................................... 704,039 0.1
Precision Instruments............................................................. 371,412 0.1
Printing/Forms.................................................................... 1,945,624 0.3
Property - Casualty Insurers...................................................... 3,630,371 0.6
Railroads......................................................................... 3,821,876 0.7
Real Estate....................................................................... 19,819,345 3.4
Recreational Products/Toys........................................................ 2,611,509 0.5
Restaurants....................................................................... 1,365,998 0.2
Semiconductors.................................................................... 2,477,135 0.4
Shoe Manufacturing................................................................ 232,181 0.0
Specialty Chemicals............................................................... 5,873,434 1.0
Specialty Foods/Candy............................................................. 2,198,422 0.4
Specialty Steels.................................................................. 646,823 0.1
Steel/Iron Ore.................................................................... 2,415,696 0.4
Telecommunications................................................................ 36,341,525 6.3
Telecommunications Equipment...................................................... 15,515,350 2.7
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Textiles.......................................................................... $ 1,485,956 0.3%
Tobacco........................................................................... 988,773 0.2
Tools/Hardware.................................................................... 17,494 0.0
Trucking.......................................................................... 152,786 0.0
U.S. Government Agency............................................................ 81,000,000 14.1
Utilities......................................................................... 786,100 0.1
Water Supply...................................................................... 756,952 0.1
Wholesale Distributors............................................................ 2,735,848 0.5
------------ -----
$577,553,277 100.5%
------------ -----
------------ -----
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------
Common Stocks..................................................................... $494,464,067 86.0%
Preferred Stocks.................................................................. 1,883,597 0.4
Rights............................................................................ 205,613 0.0
Short-Term Investments............................................................ 81,000,000 14.1
------------ -----
$577,553,277 100.5%
------------ -----
------------ -----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
22
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $546,637,305).............................................................. $577,553,277
Unrealized appreciation on open forward foreign currency contracts............................ 581,004
Cash (including $788,663 in foreign currency and $8,141,452 segregated in connection with open
futures contracts).......................................................................... 13,177,136
Receivable for:
Shares of beneficial interest sold........................................................ 1,631,282
Variation margin.......................................................................... 940,423
Dividends................................................................................. 776,854
Foreign withholding tax reclaimed......................................................... 37,063
Deferred offering costs....................................................................... 72,374
Prepaid expenses and other assets............................................................. 85,881
------------
TOTAL ASSETS............................................................................. 594,855,294
------------
LIABILITIES:
Unrealized depreciation on open forward foreign currency contracts............................ 215,294
Payable for:
Investments purchased..................................................................... 12,601,174
Shares of beneficial interest repurchased................................................. 5,645,543
Investment management fee................................................................. 470,579
Plan of distribution fee.................................................................. 446,867
Accrued expenses and other payables........................................................... 564,632
------------
TOTAL LIABILITIES........................................................................ 19,944,089
------------
NET ASSETS............................................................................... $574,911,205
============
COMPOSITION OF NET ASSETS:
Paid-in-capital............................................................................... $544,677,938
Net unrealized appreciation................................................................... 32,198,701
Net investment loss........................................................................... (646,146)
Net realized loss............................................................................. (1,319,288)
------------
NET ASSETS............................................................................... $574,911,205
============
CLASS A SHARES:
Net Assets.................................................................................... $38,505,880
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 3,641,765
NET ASSET VALUE PER SHARE................................................................ $10.57
============
MAXIMUM OFFERING PRICE PER SHARE,
(NET ASSET VALUE PLUS 5.54% OF NET ASSET VALUE)........................................ $11.16
============
CLASS B SHARES:
Net Assets.................................................................................... $465,258,342
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 44,115,027
NET ASSET VALUE PER SHARE................................................................ $10.55
============
CLASS C SHARES:
Net Assets.................................................................................... $69,811,015
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 6,619,416
NET ASSET VALUE PER SHARE................................................................ $10.55
============
CLASS D SHARES:
Net Assets.................................................................................... $1,335,968
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 126,329
NET ASSET VALUE PER SHARE................................................................ $10.58
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
23
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF OPERATIONS
FOR THE PERIOD JUNE 28, 1999* THROUGH OCTOBER 31, 1999
<TABLE>
<S> <C>
NET INVESTMENT LOSS:
INCOME
Dividends (net of $188,107 foreign withholding tax)............................................ $ 2,080,161
Interest....................................................................................... 1,587,720
-----------
TOTAL INCOME.............................................................................. 3,667,881
-----------
EXPENSES
Investment management fee...................................................................... 1,734,026
Plan of distribution fee (Class A shares)...................................................... 28,368
Plan of distribution fee (Class B shares)...................................................... 1,399,606
Plan of distribution fee (Class C shares)...................................................... 219,865
Custodian fees................................................................................. 379,214
Transfer agent fees and expenses............................................................... 240,983
Registration fees.............................................................................. 182,950
Offering costs................................................................................. 81,246
Professional fees.............................................................................. 42,459
Shareholder reports and notices................................................................ 28,130
Trustees' fees and expenses.................................................................... 5,925
Other.......................................................................................... 12,361
-----------
TOTAL EXPENSES............................................................................ 4,355,133
-----------
NET INVESTMENT LOSS....................................................................... (687,252)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized loss on:
Investments................................................................................ (367,328)
Futures contracts.......................................................................... (378,930)
Foreign exchange transactions.............................................................. (2,740,607)
-----------
NET LOSS.................................................................................. (3,486,865)
-----------
Net unrealized appreciation/depreciation on:
Investments................................................................................ 30,915,972
Futures contracts.......................................................................... 941,579
Translation of forward foreign currency contracts and other assets and liabilities
denominated in foreign currencies........................................................ 341,150
-----------
NET APPRECIATION.......................................................................... 32,198,701
-----------
NET GAIN.................................................................................. 28,711,836
-----------
NET INCREASE................................................................................... $28,024,584
===========
</TABLE>
- ---------------------
* Commencement of operations.
SEE NOTES TO FINANCIAL STATEMENTS
24
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
FOR THE
PERIOD JUNE
28, 1999*
THROUGH
OCTOBER
31,1999
- ------------------------------------------------------------------------------------------------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss........................................................................... $ (687,252)
Net realized loss............................................................................. (3,486,865)
Net unrealized appreciation................................................................... 32,198,701
------------
NET INCREASE............................................................................. 28,024,584
Net increase from transactions in shares of beneficial interest............................... 546,786,621
------------
NET INCREASE............................................................................. 574,811,205
NET ASSETS:
Beginning of period........................................................................... 100,000
------------
END OF PERIOD
(INCLUDING A NET INVESTMENT LOSS OF $646,146)............................................. $574,911,205
============
</TABLE>
- ---------------------
* Commencement of operations.
SEE NOTES TO FINANCIAL STATEMENTS
25
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1999
1. ORGANIZATION AND ACCOUNTING POLICIES
Morgan Stanley Dean Witter International Fund (the "Fund") is registered under
the Investment Company Act of 1940, as amended (the "Act"), as a diversified,
open-end management investment company. The Fund's investment objective is
long-term capital growth. The Fund seeks to achieve its objective by investing,
under normal circumstances, at least 65% of its total assets in a diversified
portfolio of international common stocks and other equity securities. The Fund
was organized as a Massachusetts business trust on October 23, 1998 and had no
operations other than those relating to organizational matters and issuance of
2,500 shares of beneficial interest by each class for $25,000 to Morgan Stanley
Dean Witter Advisors Inc. ("Investment Manager") to effect the Fund's initial
capitalization. The Fund commenced operations June 28, 1999.
The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase and some
Class A shares, and most Class B shares and Class C shares, are subject to a
contingent deferred sales charge imposed on shares redeemed within one year, six
years and one year, respectively. Class D shares are not subject to a sales
charge. Additionally, Class A shares, Class B shares and Class C shares incur
distribution expenses.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ from
those estimates.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) an equity security listed or traded on the
New York, American or other domestic or foreign stock exchange is valued at its
latest sale price on that exchange prior to the time when assets are valued; if
there were no sales that day, the security is valued at the latest bid price (in
cases where a security is traded on more than one exchange, the security is
valued on the exchange designated as the primary market pursuant to procedures
adopted by the Trustees); (2) all other portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest available bid price prior to the time of valuation; (3) when market
quotations are not readily available, including circumstances under which it is
determined by the Investment Manager or Morgan Stanley Dean Witter Investment
Management Inc. (the "Sub-Advisor") that sale or bid prices are not reflective
of a security's market value, portfolio securities are valued at their fair
value as determined in good faith under procedures established by and under the
general
26
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1999, CONTINUED
supervision of the Trustees (valuation of debt securities for which market
quotations are not readily available may be based upon current market prices of
securities which are comparable in coupon, rating and maturity or an appropriate
matrix utilizing similar factors); and (4) short-term debt securities having a
maturity date of more than sixty days at time of purchase are valued on a mark-
to-market basis until sixty days prior to maturity and thereafter at amortized
cost based on their value on the 61st day. Short-term debt securities having a
maturity date of sixty days or less at the time of purchase are valued at
amortized cost.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
Dividend income and other distributions are recorded on the ex-dividend date
except for certain dividends on foreign securities which are recorded as soon as
the fund is informed after the ex-dividend date. Discounts are accreted over the
respective life of the securities. Interest income is accrued daily.
C. MULTIPLE CLASS ALLOCATIONS -- Investment income, expenses (other than
distribution fees), and realized and unrealized gains and losses are allocated
to each class of shares based upon the relative net asset value on the date such
items are recognized. Distribution fees are charged directly to the respective
class.
D. FUTURES CONTRACTS -- A futures contract is an agreement between two parties
to buy and sell financial instruments at a set price on a future date. Upon
entering into such a contract, the Fund is required to pledge to the broker
cash, U.S. Government securities or other liquid portfolio securities equal to
the minimum initial margin requirements of the applicable futures exchange.
Pursuant to the contract, the Fund agrees to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in the value of the contract
which is known as variation margin. Such receipts or payments are recorded by
the Fund as unrealized gains or losses. Upon closing of the contract, the Fund
realizes a gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was closed.
E. FOREIGN CURRENCY TRANSLATION -- The books and records of the Fund are
maintained in U.S. dollars as follows: (1) the foreign currency market value of
investment securities, other assets and liabilities and forward foreign currency
contracts are translated at the exchange rates prevailing at the end of the
period; and (2) purchases, sales, income and expenses are translated at the
exchange rates prevailing on the respective dates of such transactions. The
resultant exchange gains and losses
27
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1999, CONTINUED
are included in the Statement of Operations as realized and unrealized gain/loss
on foreign exchange transactions. Pursuant to U.S. Federal income tax
regulations, certain foreign exchange gains/losses included in realized and
unrealized gain/loss are included in or are a reduction of ordinary income for
federal income tax purposes. The Fund does not isolate that portion of the
results of operations arising as a result of changes in the foreign exchange
rates from the changes in the market prices of the securities.
F. FORWARD FOREIGN CURRENCY CONTRACTS -- The Fund may enter into forward
foreign currency contracts which are valued daily at the appropriate exchange
rates. The resultant unrealized exchange gains and losses are included in the
Statement of Operations as unrealized gain/loss on foreign exchange
transactions. The Fund records realized gains or losses on delivery of the
currency or at the time the forward contract is extinguished (compensated) by
entering into a closing transaction prior to delivery.
G. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.
H. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends
and distributions to its shareholders on the ex-dividend date. The amount of
dividends and distributions from net investment income and net realized capital
gains are determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for financial reporting purposes but not for tax purposes are reported as
dividends in excess of net investment income or distributions in excess of net
realized capital gains. To the extent they exceed net investment income and net
realized capital gains for tax purposes, they are reported as distributions of
paid-in-capital.
I. OFFERING COSTS -- The Investment Manager incurred offering costs on behalf
of the Fund in the amount of approximately $153,000, which was reimbursed for
the full amount thereof. Such expenses were deferred and are being amortized by
the Fund on the straight-line method over a period of approximately one year or
less from the commencement of operations.
28
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1999, CONTINUED
2. INVESTMENT MANAGEMENT AND SUB-ADVISORY AGREEMENTS
Pursuant to an Investment Management Agreement, the Fund pays the Investment
Manager a management fee, accrued daily and payable monthly, by applying the
annual rate of 1.00% to the net assets of the Fund determined as of the close of
each business day.
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund's books and
records and furnishes, at its own expense, office space, facilities, equipment,
clerical, bookkeeping and certain legal services and pays the salaries of all
personnel, including officers of the Fund who are employees of the Investment
Manager. The Investment Manager also bears the cost of telephone services, heat,
light, power and other utilities provided to the Fund.
Under a Sub-Advisory Agreement between the Sub-Advisor and the Investment
Manager, the Sub-Advisor provides the Fund with investment advice and portfolio
management relating to the Fund's investments in securities, subject to the
overall supervision of the Investment Manager. As compensation for its services
provided pursuant to the Sub-Advisory Agreement, the Investment Manager pays the
Sub-Advisor compensation equal to 40% of its monthly compensation.
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Morgan Stanley Dean Witter Distributors
Inc. (the "Distributor"), an affiliate of the Investment Manager and
Sub-Advisor. The Fund has adopted a Plan of Distribution (the "Plan") pursuant
to Rule 12b-1 under the Act. The Plan provides that the Fund will pay the
Distributor a fee which is accrued daily and paid monthly at the following
annual rates: (i) Class A - up to 0.25% of the average daily net assets of
Class A; (ii) Class B - 1.0% of the average daily net assets of Class B; and
(iii) Class C - up to 1.0% of the average daily net assets of Class C. In the
case of Class A shares, amounts paid under the Plan are paid to the Distributor
for services provided. In the case of Class B and Class C shares, amounts paid
under the Plan are paid to the Distributor for (1) services provided and the
expenses borne by it and others in the distribution of the shares of these
Classes, including the payment of commissions for sales of these Classes and
incentive compensation to, and expenses of, Morgan Stanley Dean Witter Financial
Advisors and others who engage in or support distribution of the shares or who
service shareholder accounts, including overhead and telephone expenses;
(2) printing and distribution of prospectuses and reports used in connection
with the offering of these shares to other than current shareholders; and
(3) preparation, printing and distribution of sales literature and advertising
materials. In addition,
29
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1999, CONTINUED
the Distributor may utilize fees paid pursuant to the Plan, in the case of
Class B shares, to compensate Dean Witter Reynolds Inc. ("DWR"), an affiliate of
the Investment Manager, Sub-Advisor and Distributor, and other selected
broker-dealers for their opportunity costs in advancing such amounts, which
compensation would be in the form of a carrying charge on any unreimbursed
expenses.
In the case of Class B shares, provided that the Plan continues in effect, any
cumulative expenses incurred by the Distributor but not yet recovered may be
recovered through the payment of future distribution fees from the Fund pursuant
to the Plan and contingent deferred sales charges paid by investors upon
redemption of Class B shares. Although there is no legal obligation for the Fund
to pay expenses incurred in excess of payments made to the Distributor under the
Plan and the proceeds of contingent deferred sales charges paid by investors
upon redemption of shares, if for any reason the Plan is terminated, the
Trustees will consider at that time the manner in which to treat such expenses.
The Distributor has advised the Fund that such excess amounts, including
carrying charges, totaled $21,671,679 at October 31, 1999.
In the case of Class A shares and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 1.0% of the average daily
net assets of Class A or Class C, respectively, will not be reimbursed by the
Fund through payments in any subsequent year, except that expenses representing
a gross sales credit to Morgan Stanley Dean Witter Financial Advisors or other
selected broker-dealer representatives may be reimbursed in the subsequent
calendar year. For the period ended October 31, 1999, the distribution fee was
accrued for Class A shares and Class C shares at the annual rate of 0.25% and
1.0%, respectively.
The Distributor has informed the Fund that for the period ended October 31,
1999, it received contingent deferred sales charges from certain redemptions of
the Fund's Class A shares, Class B shares and Class C shares of $1,100,
$235,698, and $29,401, respectively and received $103,705 in front-end sales
charges from sales of the Fund's Class A shares. The respective shareholders pay
such charges which are not an expense of the Fund.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the period ended October 31, 1999 aggregated
$526,302,337 and $60,291,640 respectively.
30
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1999, CONTINUED
Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager,
Sub-Advisor and Distributor, is the Fund's transfer agent. At October 31, 1999,
the Fund had transfer agent fees and expenses payable of approximately $43,500.
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
JUNE 28, 1999*
THROUGH
OCTOBER 31, 1999
---------------------------
SHARES AMOUNT
----------- --------------
<S> <C> <C>
CLASS A
Sold............................................................. 5,501,684 $ 55,679,553
Redeemed......................................................... (1,862,419) (19,164,117)
---------- -------------
Net increase - Class A........................................... 3,639,265 36,515,436
---------- -------------
CLASS B
Sold............................................................. 46,196,462 464,151,607
Redeemed......................................................... (2,083,935) (21,345,154)
---------- -------------
Net increase - Class B........................................... 44,112,527 442,806,453
---------- -------------
CLASS C
Sold............................................................. 7,186,009 72,115,535
Redeemed......................................................... (569,093) (5,816,388)
---------- -------------
Net increase - Class C........................................... 6,616,916 66,299,147
---------- -------------
CLASS D
Sold............................................................. 1,075,888 11,093,524
Redeemed......................................................... (952,059) (9,927,939)
---------- -------------
Net increase - Class D........................................... 123,829 1,165,585
---------- -------------
Net increase in Fund............................................. 54,492,537 $ 546,786,621
========== =============
</TABLE>
- ---------------------
* Commencement of operations.
6. FEDERAL INCOME TAX STATUS
As of October 31, 1999, the Fund had temporary book/tax differences primarily
attributable to the mark-to-market of passive foreign investment companies
("PFICs") and open forward foreign currency exchange contracts and capital loss
deferrals on wash sales and permanent book/tax differences primarily
attributable to foreign currency losses, a net operating loss and nondeductible
expenses. To reflect reclassifications arising from the permanent differences,
paid-in-capital was charged $2,208,683, net realized loss was credited
$2,167,577 and net investment loss was credited $41,106.
31
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1999, CONTINUED
7. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS
The Fund may enter into forward foreign currency contracts ("forward contracts")
to facilitate settlement of foreign currency denominated portfolio transactions
or to manage foreign currency exposure associated with foreign currency
denominated securities. The Fund may also purchase and sell interest rate,
currency and index futures contracts ("futures contracts") that are traded on
U.S. and foreign commodity exchanges on such underlying securities as U.S.
Treasury bonds, notes, bills and GNMA Certificates and/or any foreign government
fixed-income security, on various currencies and on such indexes of U.S. and
foreign securities as may exist or come into existence.
Forward contracts and futures contracts involve elements of market risk in
excess of the amounts reflected in the Statement of Assets and Liabilities. The
Fund bears the risk of an unfavorable change in the foreign exchange rates
underlying the forward contracts or an unfavorable change in the value of the
underlying securities. Risks may also arise upon entering into these contracts
from the potential inability of the counterparties to meet the terms of their
contracts.
At October 31, 1999, there were outstanding forward contracts used to manage
foreign currency exposure and outstanding index futures.
32
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout the period:
<TABLE>
<CAPTION>
FOR THE PERIOD JUNE 28, 1999*
THROUGH OCTOBER 31, 1999**
------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS D
SHARES SHARES SHARES SHARES
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA:
Net asset value, beginning of period......................... $ 10.00 $ 10.00 $ 10.00 $10.00
------- -------- ------- ------
Income (loss) from investment operations:
Net investment income (loss).............................. 0.01 (0.02) (0.02) 0.01
Net realized and unrealized gain.......................... 0.56 0.57 0.57 0.57
------- -------- ------- ------
Total income from investment operations...................... 0.57 0.55 0.55 0.58
------- -------- ------- ------
Net asset value, end of period............................... $ 10.57 $ 10.55 $ 10.55 $10.58
======= ======== ======= ======
TOTAL RETURN + (1)........................................... 5.70% 5.50% 5.50% 5.80%
RATIOS TO AVERAGE NET ASSETS (2) (3):
Expenses..................................................... 1.81% 2.56% 2.56% 1.56%
Net investment income........................................ 0.31% (0.44)% (0.44)% 0.56%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands...................... $38,506 $465,258 $69,811 $1,336
Portfolio turnover rate (1).................................. 14% 14% 14% 14%
</TABLE>
- ---------------------
* Commencement of operations.
** The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
33
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND TRUSTEES
OF MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Morgan Stanley Dean Witter
International Fund (the "Fund") at October 31, 1999, the results of its
operations, the changes in its net assets and the financial highlights for the
period June 28, 1999 (commencement of operations) through October 31, 1999, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audit. We
conducted our audit of these financial statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit, which included confirmation of securities at October 31, 1999 by
correspondence with the custodian and brokers, provides a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
1177 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
DECEMBER 17, 1999
34
<PAGE>
DIRECTORS
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
Wayne E. Hedien
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Mitchell M. Merin
President
Barry Fink
Vice President, Secretary and General Counsel
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Morgan Stanley Dean Witter Trust FSB
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Morgan Stanley Dean Witter Advisors Inc.
Two World Trade Center
New York, New York 10048
SUB-ADVISOR
Morgan Stanley Dean Witter
Investment Management Inc.
1221 Avenue of the Americas
New York, New York 10020
This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and
directors, fees, expenses and other pertinent information, please see the
prospectus of the Fund.
This report is not authorized for distribution to prospective investors in the
Fund unless preceded or accompanied by an effective prospectus. Read the
prospectus carefully before investing.
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
[GRAPHIC]
ANNUAL REPORT
OCTOBER 31, 1999
