<PAGE>
PROSPECTUS - FEBRUARY 3, 2000
Morgan Stanley Dean Witter
INTERNATIONAL FUND
[COVER PHOTO]
A MUTUAL FUND THAT SEEKS LONG-TERM CAPITAL GROWTH
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon
the adequacy of this PROSPECTUS. Any representation to the contrary is a
criminal offense.
<PAGE>
CONTENTS
<TABLE>
<S> <C> <C>
The Fund Investment Objective................ 1
Principal Investment Strategies..... 1
Principal Risks..................... 2
Fees and Expenses................... 3
Additional Investment Strategy
Information......................... 4
Additional Risk Information......... 5
Fund Management..................... 6
Shareholder Information Pricing Fund Shares................. 8
How to Buy Shares................... 8
How to Exchange Shares.............. 10
How to Sell Shares.................. 11
Distributions....................... 13
Tax Consequences.................... 13
Share Class Arrangements............ 14
Financial Highlights .................................... 22
Our Family of Funds .................................... Inside Back Cover
THIS PROSPECTUS CONTAINS IMPORTANT INFORMATION ABOUT THE
FUND.
PLEASE READ IT CAREFULLY AND KEEP IT FOR FUTURE
REFERENCE.
</TABLE>
<PAGE>
[Sidebar]
CAPITAL GROWTH
An investment objective having the goal of selecting securities with the
potential to rise in price rather than pay out income.
MSCI EAFE COUNTRIES
include Australia, Japan, New Zealand, most nations in Western Europe, Hong Kong
and Singapore.
[End Sidebar]
THE FUND
[ICON] INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
Morgan Stanley Dean Witter International Fund seeks
long-term capital growth.
[ICON] PRINCIPAL INVESTMENT STRATEGIES
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The Fund will normally invest at least 65% of its total
assets in a diversified portfolio of international common
stocks and other equity securities. The Fund's "Investment
Manager," Morgan Stanley Dean Witter Advisors Inc., and its
"Sub-Advisor" -- Morgan Stanley Dean Witter Investment
Management Inc. -- use a "top-down" approach that emphasizes
country and sector selection and weightings over individual
stock selection.
COUNTRY SELECTION. The Sub-Advisor first considers the
countries represented in the Morgan Stanley Capital
International EAFE (Europe, Australia and Far East) Index.
The Sub-Advisor -- on an ongoing basis -- establishes the
proportion or weighting for each country (eg., overweight,
underweight or neutral) relative to the Index for investment
by the Fund. The Sub-Advisor may also choose to overweight
or underweight particular sectors, such as
telecommunications or banking, within each country or
region. In making its determinations, it evaluates factors
such as valuation, economic outlook, corporate earnings
growth, inflation, liquidity and risk characteristics,
investor sentiment, interest rates, and currency outlook.
The Fund will invest in at least three separate countries.
STOCK SELECTION. The Sub-Advisor invests the Fund's assets
within each country and/or sector based on its assigned
weighting. Within each country, the Sub-Advisor will try to
match the performance of a broad local market index by
investing in optimized "baskets" of common stocks and other
equity securities, which may include depository receipts,
preferred securities and convertible securities. In most
cases, the MSCI Index for that country will be used as the
benchmark index.
In addition to the securities discussed above, the Fund may
also invest in equity and/or fixed-income and convertible
securities of issuers located anywhere in the world,
including the United States; securities of other investment
companies; forward currency contracts and futures on stock
indexes. The Fund may invest up to 10% of its assets in
securities of companies located in emerging market
countries.
Common stock is a share ownership or equity interest in a
corporation. It may or may not pay dividends, as some
companies reinvest all of their profits back into their
businesses, while others pay out some of their profits to
shareholders as dividends. A depository receipt is generally
issued by a bank or financial institution and represents an
ownership interest in the common stock or other equity
securities of a foreign company.
In pursuing the Fund's investment objective, the Investment
Manager and/or Sub-Advisor have considerable leeway in
deciding which investments they buy, hold or sell on a
day-to-day basis -- and which trading strategies they use.
For example, the Investment Manager and/or Sub-Advisor in
their discretion may determine to use some permitted trading
strategies while not using others.
1
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[ICON] PRINCIPAL RISKS
- --------------------------------------------------------------------------------
There is no assurance that the Fund will achieve its
investment objective. The Fund's share price will fluctuate
with changes in the market value of the Fund's portfolio
securities. When you sell Fund shares, they may be worth
less than what you paid for them and, accordingly, you can
lose money investing in this Fund.
A principal risk of investing in the Fund is associated with
its common stock investments. In general, stock values
fluctuate in response to activities specific to the company
as well as general market, economic and political
conditions. Stock prices can fluctuate widely in response to
these factors.
FOREIGN SECURITIES. The Fund's investments in foreign
securities (including depository receipts) involve risks
that are in addition to the risks associated with domestic
securities. One additional risk is currency risk. While the
price of Fund shares is quoted in U.S. dollars, the Fund
generally converts U.S. dollars to a foreign market's local
currency to purchase a security in that market. If the value
of that local currency falls relative to the U.S. dollar,
the U.S. dollar value of the foreign security will decrease.
This is true even if the foreign security's local price
remains unchanged.
Foreign securities also have risks related to economic and
political developments abroad, including expropriations,
confiscatory taxation, exchange control regulation,
limitation on the use or transfer of Fund assets and any
effects of foreign social, economic or political
instability. In particular, adverse political or economic
developments in a particular region and/or country in which
the Fund invests could cause a substantial decline in value
of the portfolio. Foreign companies, in general, are not
subject to the regulatory requirements of U.S. companies
and, as such, there may be less publicly available
information about these companies. Moreover, foreign
accounting, auditing and financial reporting standards
generally are different from those applicable to U.S.
companies. Finally, in the event of a default of any foreign
debt obligations, it may be more difficult for the Fund to
obtain or enforce a judgment against the issuers of the
securities.
Securities of foreign issuers may be less liquid than
comparable securities of U.S. issuers and, as such, their
price changes may be more volatile. Furthermore, foreign
exchanges and broker-dealers are generally subject to less
government and exchange scrutiny and regulation than their
U.S. counterparts. In addition, differences in clearance and
settlement procedures in foreign markets may occasion delays
in settlements of the Fund's trades effected in those
markets. Delays in purchasing securities may result in the
Fund losing investment opportunities. The inability to
dispose of foreign securities due to settlement delays could
result in losses to the Fund due to subsequent declines in
value of the securities.
The foreign securities in which the Fund invests may be
issued by companies located in emerging market countries.
Compared to the United States and other developed countries,
emerging market countries may have relatively unstable
governments, economies based on only a few industries and
securities markets that
2
<PAGE>
[Sidebar]
SHAREHOLDER FEES
These fees are paid directly from your investment.
ANNUAL FUND
OPERATING EXPENSES
These expenses are deducted from the Fund's assets and are based on expenses
paid for the fiscal
period ended
October 31, 1999.
[End Sidebar]
trade a small number of securities. Prices of these
securities tend to be especially volatile and, in the past,
securities in these countries have been characterized by
greater potential loss than securities of companies located
in developed countries.
Many European countries have adopted or are in the process
of adopting a single European currency, referred to as the
"euro." The consequences of the euro conversion for foreign
exchange rates, interest rates and the value of European
securities the Fund may purchase are presently unclear. The
consequences may adversely affect the value and/or increase
the volatility of securities held by the Fund.
OTHER RISKS. The performance of the Fund also will depend on
whether the Investment Manager and/or Sub-Advisor are
successful in pursuing the Fund's investment strategy. The
Fund is also subject to other risks from its permissible
investments, including the risks associated with its
investments in the securities of other investment companies,
forward currency contracts and futures on stock indexes. For
more information about these risks, see the "Additional Risk
Information" section.
Shares of the Fund are not bank deposits and are not
guaranteed or insured by the FDIC or any other government
agency.
[ICON] FEES AND EXPENSES
- --------------------------------------------------------------------------------
The table below briefly describes the fees and expenses that
you may pay if you buy and hold shares of the Fund. The Fund
offers four Classes of shares: Classes A, B, C and D. Each
Class has a different combination of fees, expenses and
other features. The Fund does not charge account or exchange
fees. See the "Share Class Arrangements" section for further
fee and expense information.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS D
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES
- ---------------------------------------------------------------------------------------------------------
Maximum sales charge (load) imposed on purchases (as a
percentage of offering price) 5.25%(1) None None None
- ---------------------------------------------------------------------------------------------------------
Maximum deferred sales charge (load) (as a percentage based
on the lesser of the offering price or net asset value at
redemption) None(2) 5.00%(3) 1.00%(4) None
- ---------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
- ---------------------------------------------------------------------------------------------------------
Management fee 1.00% 1.00% 1.00% 1.00%
- ---------------------------------------------------------------------------------------------------------
Distribution and service (12b-1) fees 0.25% 1.00% 1.00% None
- ---------------------------------------------------------------------------------------------------------
Other expenses 0.56% 0.56% 0.56% 0.56%
- ---------------------------------------------------------------------------------------------------------
Total annual Fund operating expenses 1.81% 2.56% 2.56% 1.56%
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
1 Reduced for purchases of $25,000 and over.
2 Investments that are not subject to any sales charge at the
time of purchase are subject to a contingent deferred sales
charge ("CDSC") of 1.00% that will be imposed if you sell
your shares within one year after purchase, except for
certain specific circumstances.
3 The CDSC is scaled down to 1.00% during the sixth year,
reaching zero thereafter. See "Share Class Arrangements" for
a complete discussion of the CDSC.
4 Only applicable if you sell your shares within one year
after purchase.
</TABLE>
3
<PAGE>
EXAMPLE
This example is intended to help you compare the cost of
investing in the Fund with the cost of investing in other
mutual funds.
The example assumes that you invest $10,000 in the Fund,
your investment has a 5% return each year, and the Fund's
operating expenses remain the same. Although your actual
costs may be higher or lower, the tables below show your
costs at the end of each period based on these assumptions
depending upon whether or not you sell your shares at the
end of each period.
<TABLE>
<CAPTION>
IF YOU SOLD YOUR SHARES:
---------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
----------------------------------------------------------------
CLASS A $699 $1,065 $1,454 $2,540
----------------------------------------------------------------
CLASS B $759 $1,096 $1,560 $2,895
----------------------------------------------------------------
CLASS C $359 $ 796 $1,360 $2,895
----------------------------------------------------------------
CLASS D $159 $ 493 $ 850 $1,856
----------------------------------------------------------------
<CAPTION>
IF YOU HELD YOUR SHARES:
-------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
--------------------- -------------------------------------
CLASS A $ 699 $1,065 $1,454 $2,540
--------------------- -------------------------------------
CLASS B $ 259 $ 796 $1,360 $2,895
--------------------- -------------------------------------
CLASS C $ 259 $ 796 $1,360 $2,895
--------------------- -------------------------------------
CLASS D $ 159 $ 493 $ 850 $1,856
--------------------- -------------------------------------
</TABLE>
Long-term shareholders of Class B and Class C may pay more
in sales charges, including distribution fees, than the
economic equivalent of the maximum front-end sales charges
permitted by the NASD.
[ICON] ADDITIONAL INVESTMENT STRATEGY INFORMATION
- --------------------------------------------------------------------------------
This section provides additional information relating to the
Fund's principal strategies.
OTHER GLOBAL SECURITIES. The Fund may invest up to 35% of
its assets in equity and/or fixed-income and convertible
securities of issuers located anywhere in the world,
including the United States.
INVESTMENT COMPANIES. The Fund may invest up to 10% of its
assets in securities issued by other investment companies.
The Investment Manager and/or Sub-Advisor may view these
investments as necessary to participate in certain foreign
markets where direct investment by the Fund may be difficult
or impracticable.
EMERGING MARKET COUNTRIES. The Fund may invest up to 10% of
its assets in securities of companies located in emerging
market countries. These are countries that major financial
institutions, such as the World Bank, generally consider to
be less economically mature than developed nations. Emerging
market countries can include every nation in the world
except the United States, Canada, Japan, Hong Kong,
Singapore, Australia, New Zealand and most nations located
in Western Europe.
FORWARD CURRENCY CONTRACTS. The Fund's investments also may
include forward currency contracts, which involve the
purchase or sale of a specific amount of foreign currency at
the current price with delivery at a specified future date.
The Fund may use these contracts to hedge against adverse
price movements in its portfolio securities and the
currencies in which they are denominated or to gain exposure
to currencies underlying various securities or financial
instruments held in its portfolio.
4
<PAGE>
FUTURES ON STOCK INDEXES. The Fund may invest in futures on
stock indexes. Futures on stock indexes may be used to
facilitate allocation of the Fund's investments among asset
classes, to increase or decrease the Fund's exposure to the
stock or bond markets, to generate income, or to seek to
protect against decline in securities prices or increases in
prices of securities that may be purchased.
DEFENSIVE INVESTING. The Fund may take temporary "defensive"
positions in attempting to respond to adverse market
conditions. The Fund may invest any amount of its assets in
cash or money market instruments in a defensive posture when
the Investment Manager and/or Sub-Advisor believe it is
advisable to do so. Although taking a defensive posture is
designed to protect the Fund from an anticipated market
downturn, it could have the effect of reducing the benefit
from any upswing in the market. When the Fund takes a
defensive position, it may not achieve its investment
objective.
PORTFOLIO TURNOVER. The Fund may engage in active and
frequent trading of its portfolio securities. The Financial
Highlights Table at the end of this PROSPECTUS shows the
Fund's portfolio turnover rates during the past fiscal
period. A portfolio turnover rate of 200%, for example, is
equivalent to the Fund buying and selling all of its
securities two times during the course of the year. A high
portfolio turnover rate (over 100%) could result in high
brokerage costs and an increase in taxable capital gains
distributions to the Fund's shareholders. See the sections
on "Distributions" and "Tax Consequences."
The percentage limitations relating to the composition of
the Fund's portfolio apply at the time the Fund acquires an
investment and refer to the Fund's net assets, unless
otherwise noted. Subsequent percentage changes that result
from market fluctuations will not require the Fund to sell
any portfolio security. The Fund may change its principal
investment strategies without shareholder approval; however,
you would be notified of any changes.
[ICON] ADDITIONAL RISK INFORMATION
- --------------------------------------------------------------------------------
This section provides additional information relating to the
principal risks of investing in the Fund.
FIXED-INCOME AND CONVERTIBLE SECURITIES. All fixed-income
securities, such as corporate debt, are subject to two types
of risk: credit risk and interest rate risk. Credit risk
refers to the possibility that the issuer of a security will
be unable to make interest payments and/or repay the
principal on its debt.
Interest rate risk refers to fluctuations in the value of a
fixed-income security resulting from changes in the general
level of interest rates. When the general level of interest
rates goes up, the prices of most fixed-income securities go
down. When the general level of interest rates goes down,
the prices of most fixed-income securities go up. (Zero
coupon securities are typically subject to greater price
fluctuations than comparable securities that pay interest.)
5
<PAGE>
[Sidebar]
MORGAN STANLEY DEAN WITTER ADVISORS INC.
The Investment Manager is widely recognized as a leader in the mutual fund
industry and together with Morgan Stanley Dean Witter Services Company Inc., its
wholly-owned subsidiary, had approximately $145 billion in assets under
management as of December 31, 1999.
[End Sidebar]
A portion of the fixed-income convertible securities in
which the Fund may invest may be rated below investment
grade. Securities rated below investment grade are commonly
known as "junk bonds" and have speculative credit risk
characteristics.
FORWARD CURRENCY CONTRACTS. The Fund's participation in
forward currency contracts also involves risks. If the
Investment Manager and/or Sub-Advisor employs a strategy
that does not correlate well with the Fund's investments or
the currencies in which the investments are denominated,
currency contracts could result in a loss. The contracts
also may increase the Fund's volatility and may involve a
significant risk.
FUTURES ON STOCK INDEXES. If the Fund invests in futures on
stock indexes, its participation in these markets would
subject the Fund to investment risks to which the Fund would
not be subject absent the use of these strategies. If the
Investment Manager's and/or Sub-Advisor's predictions of
movements in the direction of the stock index are
inaccurate, the adverse consequences to the Fund (e.g., a
reduction in the Fund's net asset value or a reduction in
the amount of income available for distribution) may leave
the Fund in a worse position than if these strategies were
not used. Other risks inherent in the use of futures on
stock indexes include, for example, the possible imperfect
correlation between the price of futures contracts and
movements in the prices of the securities being hedged, and
the possible absence of a liquid secondary market for any
particular instrument.
[ICON] FUND MANAGEMENT
- --------------------------------------------------------------------------------
The Fund has retained the Investment Manager -- Morgan
Stanley Dean Witter Advisors Inc. -- to provide
administrative services, manage its business affairs and
supervise the investment of its assets. The Investment
Manager has, in turn, contracted with the Sub-Advisor --
Morgan Stanley Dean Witter Investment Management Inc. -- to
invest the Fund's assets, including the placing of orders
for the purchase and sale of portfolio securities. The
Investment Manager is a wholly-owned subsidiary of Morgan
Stanley Dean Witter & Co., a preeminent global financial
services firm that maintains leading market positions in
each of its three primary businesses: securities, asset
management and credit services. Its main business office is
located at Two World Trade Center, New York, NY 10048.
The Sub-Advisor, together with its institutional investment
management affiliates, manages approximately $185 billion as
of December 31, 1999 primarily for employee benefit plans,
investment companies, endowments, foundations and wealthy
individuals. The Sub-Advisor also is a subsidiary of Morgan
Stanley Dean Witter & Co. Its main business office is
located at 1221 Avenue of the Americas, New York, NY 10020.
Ann D. Thivierge and Barton Biggs are the primary portfolio
managers of the Fund. Ann Thivierge is a Managing Director
of the Sub-Advisor. She is a member of the Sub-Advisor's
Asset Allocation Committee, primarily representing the Total
Funds Management Team since its inception in 1991. Barton M.
Biggs has been the Chairman and a Director of the
Sub-Advisor since 1980 and a Managing Director of
6
<PAGE>
Morgan Stanley & Co. Incorporated since 1975. He is also a
director and chairman of various registered investment
companies to which the Sub-Advisor and certain of its
affiliates provide investment advisory services.
The Fund pays the Investment Manager a monthly management
fee as full compensation for the services and facilities
furnished to the Fund, and for Fund expenses assumed by the
Investment Manager calculated daily by applying the annual
rate of 1.0% to the Fund's daily net assets. The Investment
Manager pays the Sub-Advisor monthly compensation equal to
40% of this fee.
7
<PAGE>
[Sidebar]
CONTACTING A FINANCIAL ADVISOR
If you are new to the Morgan Stanley Dean Witter Family of Funds and would like
to contact a Financial Advisor, call (877) 937-MSDW
(toll-free) for the telephone number of the Morgan Stanley Dean Witter office
nearest you. You may also access our office locator on our Internet site at:
www.msdw.com/individual/funds
[End Sidebar]
SHAREHOLDER INFORMATION
[ICON] PRICING FUND SHARES
- --------------------------------------------------------------------------------
The price of Fund shares (excluding sales charges), called
"net asset value," is based on the value of the Fund's
portfolio securities. While the assets of each Class are
invested in a single portfolio of securities, the net asset
value of each Class will differ because the Classes have
different ongoing distribution fees.
The net asset value per share of the Fund is determined once
daily at 4:00 p.m. Eastern time on each day that the New
York Stock Exchange is open (or, on days when the New York
Stock Exchange closes prior to 4:00 p.m., at such earlier
time). Shares will not be priced on days that the New York
Stock Exchange is closed.
The value of the Fund's portfolio securities is based on the
securities' market price when available. When a market price
is not readily available, including circumstances under
which the Investment Manager and/or Sub-Advisor determines
that a security's market price is not accurate, a portfolio
security is valued at its fair value, as determined under
procedures established by the Fund's Board of Trustees. In
these cases, the Fund's net asset value will reflect certain
portfolio securities' fair value rather than their market
price. With respect to securities that are primarily listed
on foreign exchanges, the values of the Fund's portfolio
securities may change on days when you will not be able to
purchase or sell your shares.
An exception to the Fund's general policy of using market
prices concerns its short-term debt portfolio securities.
Debt securities with remaining maturities of sixty days or
less at the time of purchase are valued at amortized cost.
However, if the cost does not reflect the securities' market
value, these securities will be valued at their fair value.
[ICON] HOW TO BUY SHARES
- --------------------------------------------------------------------------------
You may open a new account to buy Fund shares or buy
additional Fund shares for an existing account by contacting
your Morgan Stanley Dean Witter Financial Advisor or other
authorized financial representative. Your Financial Advisor
will assist you, step-by-step, with the procedures to invest
in the Fund. You may also purchase shares directly by
calling the Fund's transfer agent and requesting an
application.
Because every investor has different immediate financial
needs and long-term investment goals, the Fund offers
investors four Classes of shares: Classes A, B, C and D.
Class D shares are only offered to a limited group of
investors. Each Class of shares offers a distinct structure
of sales charges, distribution and service fees, and other
features that are designed to address a variety of needs.
Your Financial Advisor or other authorized financial
representative can help you decide which Class may be most
appropriate for you. When purchasing Fund shares, you must
specify which Class of shares you wish to purchase.
8
<PAGE>
[Sidebar]
EASYINVEST-SM-
A purchase plan that allows you to transfer money automatically from your
checking or savings account or from a Money Market Fund on a semi-monthly,
monthly or quarterly basis. Contact your Morgan Stanley Dean Witter Financial
Advisor for further information about this service.
[End Sidebar]
When you buy Fund shares, the shares are purchased at the
next share price calculated (less any applicable front-end
sales charge for Class A shares) after we receive your
purchase order. Your payment is due on the third business
day after you place your purchase order. We reserve the
right to reject any order for the purchase of Fund shares.
<TABLE>
<CAPTION>
MINIMUM INVESTMENT AMOUNTS
----------------------------------------------------------------------------------------
MINIMUM INVESTMENT
------------------------
INVESTMENT OPTIONS INITIAL ADDITIONAL
<S> <C> <C> <C>
----------------------------------------------------------------------------------------
Regular Accounts $1,000 $100
----------------------------------------------------------------------------------------
Individual Retirement
Accounts: Regular IRAs $1,000 $100
Education IRAs $500 $100
----------------------------------------------------------------------------------------
EASYINVEST-SM- (Automatically from your
checking or savings account
or Money Market Fund) $100* $100*
----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
* Provided your schedule of investments totals $1,000 in
twelve months.
</TABLE>
There is no minimum investment amount if you purchase Fund
shares through: (1) the Investment Manager's mutual fund
asset allocation plan, (2) a program, approved by the Fund's
distributor, in which you pay an asset-based fee for
advisory, administrative and/or brokerage services, or
(3) employer-sponsored employee benefit plan accounts.
INVESTMENT OPTIONS FOR CERTAIN INSTITUTIONAL AND OTHER
INVESTORS/CLASS D SHARES. To be eligible to purchase
Class D shares, you must qualify under one of the investor
categories specified in the "Share Class Arrangements"
section of this PROSPECTUS.
SUBSEQUENT INVESTMENTS SENT DIRECTLY TO THE FUND. In
addition to buying additional Fund shares for an existing
account by contacting your Morgan Stanley Dean Witter
Financial Advisor, you may send a check directly to the
Fund. To buy additional shares in this manner:
- Write a "letter of instruction" to the Fund specifying the
name(s) on the account, the account number, the social
security or tax identification number, the Class of shares
you wish to purchase and the investment amount (which
would include any applicable front-end sales charge). The
letter must be signed by the account owner(s).
- Make out a check for the total amount payable to: Morgan
Stanley Dean Witter International Fund.
- Mail the letter and check to Morgan Stanley Dean Witter
Trust FSB at P.O. Box 1040, Jersey City, NJ 07303.
9
<PAGE>
[ICON] HOW TO EXCHANGE SHARES
- --------------------------------------------------------------------------------
PERMISSIBLE FUND EXCHANGES. You may exchange shares of any
Class of the Fund for the same Class of any other
continuously offered Multi-Class Fund, or for shares of a
No-Load Fund, a Money Market Fund, North American Government
Income Trust or Short-Term U.S. Treasury Trust, without the
imposition of an exchange fee. See the inside back cover of
this PROSPECTUS for each Morgan Stanley Dean Witter Fund's
designation as a Multi-Class Fund, No-Load Fund or Money
Market Fund. If a Morgan Stanley Dean Witter Fund is not
listed, consult the inside back cover of that Fund's
PROSPECTUS for its designation. For purposes of exchanges,
shares of FSC Funds (subject to a front-end sales charge)
are treated as Class A shares of a Multi-Class Fund.
Exchanges may be made after shares of the Fund acquired by
purchase have been held for thirty days. There is no waiting
period for exchanges of shares acquired by exchange or
dividend reinvestment. The current PROSPECTUS for each fund
describes its investment objective(s), policies and
investment minimums, and should be read before investment.
Since exchanges are available only into continuously offered
Morgan Stanley Dean Witter Funds, exchanges are not
available into any new Morgan Stanley Dean Witter Fund
during its initial offering period, or when shares of a
particular Morgan Stanley Dean Witter Fund are not being
offered for purchase.
EXCHANGE PROCEDURES. You can process an exchange by
contacting your Morgan Stanley Dean Witter Financial Advisor
or other authorized financial representative. Otherwise, you
must forward an exchange privilege authorization form to the
Fund's transfer agent -- Morgan Stanley Dean Witter Trust
FSB -- and then write the transfer agent or call
(800) 869-NEWS to place an exchange order. You can obtain an
exchange privilege authorization form by contacting your
Financial Advisor or other authorized financial
representative or by calling (800) 869-NEWS. If you hold
share certificates, no exchanges may be processed until we
have received all applicable share certificates.
An exchange to any Morgan Stanley Dean Witter Fund (except a
Money Market Fund) is made on the basis of the next
calculated net asset values of the Funds involved after the
exchange instructions are accepted. When exchanging into a
Money Market Fund, the Fund's shares are sold at their next
calculated net asset value and the Money Market Fund's
shares are purchased at their net asset value on the
following business day.
The Fund may terminate or revise the exchange privilege upon
required notice. The check writing privilege is not
available for Money Market Fund shares you acquire in an
exchange.
TELEPHONE EXCHANGES. For your protection when calling Morgan
Stanley Dean Witter Trust FSB, we will employ reasonable
procedures to confirm that exchange instructions
communicated over the telephone are genuine. These
procedures may include requiring various forms of personal
identification such as name, mailing address, social
security or other tax identification number. Telephone
instructions also may be recorded.
10
<PAGE>
Telephone instructions will be accepted if received by the
Fund's transfer agent between 9:00 a.m. and 4:00 p.m.
Eastern time on any day the New York Stock Exchange is open
for business. During periods of drastic economic or market
changes, it is possible that the telephone exchange
procedures may be difficult to implement, although this has
not been the case with the Fund in the past.
MARGIN ACCOUNTS. If you have pledged your Fund shares in a
margin account, contact your Morgan Stanley Dean Witter
Financial Advisor or other authorized financial
representative regarding restrictions on the exchange of
such shares.
TAX CONSIDERATIONS OF EXCHANGES. If you exchange shares of
the Fund for shares of another Morgan Stanley Dean Witter
Fund there are important tax considerations. For tax
purposes, the exchange out of the Fund is considered a sale
of Fund shares -- and the exchange into the other Fund is
considered a purchase. As a result, you may realize a
capital gain or loss.
You should review the "Tax Consequences" section and consult
your own tax professional about the tax consequences of an
exchange.
LIMITATIONS ON EXCHANGES. Certain patterns of exchanges may
result in the Fund limiting or prohibiting, at its
discretion, additional purchases and/or exchanges.
Determinations in this regard may be made based on the
frequency or dollar amount of previous exchanges. The Fund
will notify you in advance of limiting your exchange
privileges.
CDSC CALCULATIONS ON EXCHANGES. See the "Share
Class Arrangements" section of this PROSPECTUS for a
discussion of how applicable contingent deferred sales
charges (CDSCs) are calculated for shares of one Morgan
Stanley Dean Witter Fund that are exchanged for shares of
another.
FOR FURTHER INFORMATION REGARDING EXCHANGE PRIVILEGES, YOU
SHOULD CONTACT YOUR MORGAN STANLEY DEAN WITTER FINANCIAL
ADVISOR OR CALL (800) 869-NEWS.
[ICON] HOW TO SELL SHARES
- --------------------------------------------------------------------------------
You can sell some or all of your Fund shares at any time. If
you sell Class A, Class B or Class C shares, your net sale
proceeds are reduced by the amount of any applicable CDSC.
Your shares will be sold at the next price calculated after
we receive your order to sell as described below.
<TABLE>
<CAPTION>
OPTIONS PROCEDURES
<S> <C>
------------------------------------------------------------------------------------
Contact your To sell (redeem) your shares, simply call your Morgan
Financial Advisor Stanley Dean Witter Financial Advisor or other authorized
financial representative.
------------------------------------------------------------
ICON Payment will be sent to the address to which the account is
registered or deposited in your brokerage account.
------------------------------------------------------------------------------------
By Letter You can also sell your shares by writing a "letter of
instruction" that includes:
ICON - your account number;
- the dollar amount or the number of shares you wish to
sell;
- the Class of shares you wish to sell; and
- the signature of each owner as it appears on the account.
------------------------------------------------------------
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
OPTIONS PROCEDURES
------------------------------------------------------------------------------------
<S> <C>
By Letter, If you are requesting payment to anyone other than the
continued registered owner(s) or that payment be sent to any address
other than the address of the registered owner(s) or
pre-designated bank account, you will need a signature
guarantee. You can obtain a signature guarantee from an
eligible guarantor acceptable to Morgan Stanley Dean Witter
Trust FSB. (You should contact Morgan Stanley Dean Witter
Trust FSB at (800) 869-NEWS for a determination as to
whether a particular institution is an eligible guarantor.)
A notary public CANNOT provide a signature guarantee.
Additional documentation may be required for shares held by
a corporation, partnership, trustee or executor.
------------------------------------------------------------
Mail the letter to Morgan Stanley Dean Witter Trust FSB at
P.O. Box 983, Jersey City, NJ 07303. If you hold share
certificates, you must return the certificates, along with
the letter and any required additional documentation.
------------------------------------------------------------
A check will be mailed to the name(s) and address in which
the account is registered, or otherwise according to your
instructions.
------------------------------------------------------------------------------------
Systematic If your investment in all of the Morgan Stanley Dean Witter
Withdrawal Plan Family of Funds has a total market value of at least
ICON $10,000, you may elect to withdraw amounts of $25 or more,
or in any whole percentage of a Fund's balance (provided the
amount is at least $25), on a monthly, quarterly,
semi-annual or annual basis, from any Fund with a balance of
at least $1,000. Each time you add a Fund to the plan, you
must meet the plan requirements.
------------------------------------------------------------
Amounts withdrawn are subject to any applicable CDSC. A CDSC
may be waived under certain circumstances. See the Class B
waiver categories listed in the "Share Class Arrangements"
section of this PROSPECTUS.
------------------------------------------------------------
To sign up for the Systematic Withdrawal Plan, contact your
Morgan Stanley Dean Witter Financial Advisor or call
(800) 869-NEWS. You may terminate or suspend your plan at
any time. Please remember that withdrawals from the plan are
sales of shares, not Fund "distributions," and ultimately
may exhaust your account balance. The Fund may terminate or
revise the plan at any time.
------------------------------------------------------------------------------------
</TABLE>
PAYMENT FOR SOLD SHARES. After we receive your complete
instructions to sell as described above, a check will be
mailed to you within seven days, although we will attempt to
make payment within one business day. Payment may also be
sent to your brokerage account.
Payment may be postponed or the right to sell your shares
suspended under unusual circumstances. If you request to
sell shares that were recently purchased by check, your sale
will not be effected until it has been verified that the
check has been honored.
TAX CONSIDERATIONS. Normally, your sale of Fund shares is
subject to federal and state income tax. You should review
the "Tax Consequences" section of this PROSPECTUS and
consult your own tax professional about the tax consequences
of a sale.
REINSTATEMENT PRIVILEGE. If you sell Fund shares and have
not previously exercised the reinstatement privilege, you
may, within 35 days after the date of sale, invest any
portion of the proceeds in the same Class of Fund shares at
their net asset value and receive a pro rata credit for any
CDSC paid in connection with the sale.
12
<PAGE>
[Sidebar]
TARGETED DIVIDENDS -SM-
You may select to have your Fund distributions automatically invested in other
Classes of Fund shares or Classes of another Morgan Stanley Dean Witter Fund
that you own. Contact your Morgan Stanley Dean Witter Financial Advisor for
further information about this service.
[End Sidebar]
INVOLUNTARY SALES. The Fund reserves the right, on sixty
days' notice, to sell the shares of any shareholder (other
than shares held in an IRA or 403(b) Custodial Account)
whose shares, due to sales by the shareholder, have a value
below $100, or in the case of an account opened through
EASYINVEST -SM-, if after 12 months the shareholder has
invested less than $1,000 in the account.
However, before the Fund sells your shares in this manner,
we will notify you and allow you sixty days to make an
additional investment in an amount that will increase the
value of your account to at least the required amount before
the sale is processed. No CDSC will be imposed on any
involuntary sale.
MARGIN ACCOUNTS. If you have pledged your Fund shares in a
margin account, contact your Morgan Stanley Dean Witter
Financial Advisor or other authorized financial
representative regarding restrictions on the sale of such
shares.
[ICON] DISTRIBUTIONS
- --------------------------------------------------------------------------------
The Fund passes substantially all of its earnings from
income and capital gains along to its investors as
"distributions." The Fund earns income from stocks and
interest from fixed-income investments. These amounts are
passed along to Fund shareholders as "income dividend
distributions." The Fund realizes capital gains whenever it
sells securities for a higher price than it paid for them.
These amounts may be passed along as "capital gain
distributions."
The Fund declares income dividends separately for each
Class. Distributions paid on Class A and Class D shares
usually will be higher than for Class B and Class C because
distribution fees that Class B and Class C pay are higher.
Normally, income dividends are distributed to shareholders
annually. Capital gains, if any, are usually distributed in
December. The Fund may at times make payments from sources
other than income or capital gains that represent a return
of a portion of your investment.
Distributions are reinvested automatically in additional
shares of the same Class and automatically credited to your
account, unless you request in writing that all
distributions be paid in cash. If you elect the cash option,
the Fund will mail a check to you no later than seven
business days after the distribution is declared. No
interest will accrue on uncashed checks. If you wish to
change how your distributions are paid, your request should
be received by the Fund's transfer agent, Morgan Stanley
Dean Witter Trust FSB, at least five business days prior to
the record date of the distributions.
[ICON] TAX CONSEQUENCES
- --------------------------------------------------------------------------------
As with any investment, you should consider how your Fund
investment will be taxed. The tax information in this
PROSPECTUS is provided as general information. You should
consult your own tax professional about the tax consequences
of an investment in the Fund.
13
<PAGE>
Unless your investment in the Fund is through a tax-deferred
retirement account, such as a 401(k) plan or IRA, you need
to be aware of the possible tax consequences when:
- The Fund makes distributions; and
- You sell Fund shares, including an exchange to another
Morgan Stanley Dean Witter Fund.
TAXES ON DISTRIBUTIONS. Your distributions are normally
subject to federal and state income tax when they are paid,
whether you take them in cash or reinvest them in Fund
shares. A distribution also may be subject to local income
tax. Any income dividend distributions and any short-term
capital gain distributions are taxable to you as ordinary
income. Any long-term capital gain distributions are taxable
as long-term capital gains, no matter how long you have
owned shares in the Fund.
Every January, you will be sent a statement (IRS
Form 1099-DIV) showing the taxable distributions paid to you
in the previous year. The statement provides full
information on your dividends and capital gains for tax
purposes.
TAXES ON SALES. Your sale of Fund shares normally is subject
to federal and state income tax and may result in a taxable
gain or loss to you. A sale also may be subject to local
income tax. Your exchange of Fund shares for shares of
another Morgan Stanley Dean Witter Fund is treated for tax
purposes like a sale of your original shares and a purchase
of your new shares. Thus, the exchange may, like a sale,
result in a taxable gain or loss to you and will give you a
new tax basis for your new shares.
When you open your Fund account, you should provide your
social security or tax identification number on your
investment application. By providing this information, you
will avoid being subject to a federal backup withholding tax
of 31% on taxable distributions and redemption proceeds. Any
withheld amount would be sent to the IRS as an advance tax
payment.
[ICON] SHARE CLASS ARRANGEMENTS
- --------------------------------------------------------------------------------
The Fund offers several Classes of shares having different
distribution arrangements designed to provide you with
different purchase options according to your investment
needs. Your Morgan Stanley Dean Witter Financial Advisor or
other authorized financial representative can help you
decide which Class may be appropriate for you.
The general public is offered three Classes: Class A shares,
Class B shares and Class C shares, which differ principally
in terms of sales charges and ongoing expenses. A fourth
Class, Class D shares, is offered only to a limited category
of investors. Shares that you acquire through reinvested
distributions will not be subject to any front-end sales
charge or CDSC -- contingent deferred sales charge. Sales
personnel may receive different compensation for selling
each Class of shares. The sales charges applicable to each
Class provide for the distribution financing of shares of
that Class.
14
<PAGE>
[Sidebar]
FRONT-END SALES
CHARGE OR FSC
An initial sales charge you pay when purchasing Class A shares that is based on
a percentage of the offering price. The percentage declines based upon the
dollar value of Class A shares you purchase. We offer three ways to reduce your
Class A sales charges - the Combined Purchase Privilege, Right of Accumulation
and Letter of Intent.
[End Sidebar]
The chart below compares the sales charge and annual 12b-1
fee applicable to each Class:
<TABLE>
<CAPTION>
MAXIMUM
CLASS SALES CHARGE ANNUAL 12B-1 FEE
<S> <C> <C>
----------------------------------------------------------------------------------------------------
A Maximum 5.25% initial sales charge reduced for
purchase of $25,000 or more; shares sold without
an initial sales charge are generally subject to a
1.0% CDSC during the first year 0.25%
----------------------------------------------------------------------------------------------------
B Maximum 5.0% CDSC during the first year decreasing
to 0% after six years 1.0%
----------------------------------------------------------------------------------------------------
C 1.0% CDSC during the first year 1.0%
----------------------------------------------------------------------------------------------------
D None None
----------------------------------------------------------------------------------------------------
</TABLE>
CLASS A SHARES Class A shares are sold at net asset value
plus an initial sales charge of up to 5.25%. The initial
sales charge is reduced for purchases of $25,000 or more
according to the schedule below. Investments of $1 million
or more are not subject to an initial sales charge, but are
generally subject to a contingent deferred sales charge, or
CDSC, of 1.0% on sales made within one year after the last
day of the month of purchase. The CDSC will be assessed in
the same manner and with the same CDSC waivers as with
Class B shares. Class A shares are also subject to a
distribution (12b-1) fee of up to 0.25% of the average daily
net assets of the Class.
The offering price of Class A shares includes a sales charge
(expressed as a percentage of the offering price) on a
single transaction as shown in the following table:
<TABLE>
<CAPTION>
FRONT-END SALES CHARGE
-------------------------------------------------
AMOUNT OF SINGLE PERCENTAGE OF APPROXIMATE PERCENTAGE
TRANSACTION PUBLIC OFFERING PRICE OF NET AMOUNT INVESTED
<S> <C> <C>
--------------------------------------------------------------------------------------
Less than $25,000 5.25% 5.54%
--------------------------------------------------------------------------------------
$25,000 but less than $50,000 4.75% 4.99%
--------------------------------------------------------------------------------------
$50,000 but less than $100,000 4.00% 4.17%
--------------------------------------------------------------------------------------
$100,000 but less than $250,000 3.00% 3.09%
--------------------------------------------------------------------------------------
$250,000 but less than $1 million 2.00% 2.04%
--------------------------------------------------------------------------------------
$1 million and over 0.00% 0.00%
--------------------------------------------------------------------------------------
</TABLE>
The reduced sales charge schedule is applicable to purchases
of Class A shares in a single transaction by:
- A single account (including an individual, trust or
fiduciary account).
- Family member accounts (limited to husband, wife and
children under the age of 21).
- Pension, profit sharing or other employee benefit plans of
companies and their affiliates.
- Tax-exempt organizations.
- Groups organized for a purpose other than to buy mutual
fund shares.
15
<PAGE>
COMBINED PURCHASE PRIVILEGE. You also will have the benefit
of reduced sales charges by combining purchases of Class A
shares of the Fund in a single transaction with purchases of
Class A shares of other Multi-Class Funds and shares of FSC
Funds.
RIGHT OF ACCUMULATION. You also may benefit from a reduction
of sales charges if the cumulative net asset value of
Class A shares of the Fund purchased in a single
transaction, together with shares of other Funds you
currently own which were previously purchased at a price
including a front-end sales charge (including shares
acquired through reinvestment of distributions), amounts to
$25,000 or more. Also, if you have a cumulative net asset
value of all your Class A and Class D shares equal to at
least $5 million (or $25 million for certain employee
benefit plans), you are eligible to purchase Class D shares
of any Fund subject to the Fund's minimum initial investment
requirement.
You must notify your Morgan Stanley Dean Witter Financial
Advisor or other authorized financial representative (or
Morgan Stanley Dean Witter Trust FSB if you purchase
directly through the Fund), at the time a purchase order is
placed, that the purchase qualifies for the reduced charge
under the Right of Accumulation. Similar notification must
be made in writing when an order is placed by mail. The
reduced sales charge will not be granted if: (i)
notification is not furnished at the time of the order; or
(ii) a review of the records of Dean Witter Reynolds or
other authorized dealer of Fund shares or the Fund's
transfer agent does not confirm your represented holdings.
LETTER OF INTENT. The schedule of reduced sales charges for
larger purchases also will be available to you if you enter
into a written "letter of intent." A letter of intent
provides for the purchase of Class A shares of the Fund or
other Multi-Class Funds or shares of FSC Funds within a
thirteen-month period. The initial purchase under a letter
of intent must be at least 5% of the stated investment goal.
To determine the applicable sales charge reduction, you may
also include: (1) the cost of shares of other Morgan Stanley
Dean Witter Funds which were previously purchased at a price
including a front-end sales charge during the 90-day period
prior to the distributor receiving the letter of intent, and
(2) the cost of shares of other Funds you currently own
acquired in exchange for shares of Funds purchased during
that period at a price including a front-end sales charge.
You can obtain a letter of intent by contacting your Morgan
Stanley Dean Witter Financial Advisor or other authorized
financial representative or by calling (800) 869-NEWS. If
you do not achieve the stated investment goal within the
thirteen-month period, you are required to pay the
difference between the sales charges otherwise applicable
and sales charges actually paid, which may be deducted from
your investment.
OTHER SALES CHARGE WAIVERS. In addition to investments of $1
million or more, your purchase of Class A shares is not
subject to a front-end sales charge (or CDSC upon sale) if
your account qualifies under one of the following
categories:
- A trust for which Morgan Stanley Dean Witter Trust FSB
provides discretionary trustee services.
16
<PAGE>
[Sidebar]
CONTINGENT DEFERRED SALES CHARGE OR CDSC
A fee you pay when you sell shares of certain Morgan Stanley Dean Witter Funds
purchased without an initial sales charge. This fee declines the longer you hold
your shares as set forth in the table.
[End Sidebar]
- Persons participating in a fee-based investment program
(subject to all of its terms and conditions, including
termination fees, mandatory sale or transfer restrictions
on termination) approved by the Fund's distributor
pursuant to which they pay an asset-based fee for
investment advisory, administrative and/or brokerage
services.
- Employer-sponsored employee benefit plans, whether or not
qualified under the Internal Revenue Code, for which
Morgan Stanley Dean Witter Trust FSB serves as trustee or
Dean Witter Reynolds' Retirement Plan Services serves as
recordkeeper under a written Recordkeeping Services
Agreement ("MSDW Eligible Plans") which have at least 200
eligible employees.
- An MSDW Eligible Plan whose Class B shares have converted
to Class A shares, regardless of the plan's asset size or
number of eligible employees.
- A client of a Morgan Stanley Dean Witter Financial Advisor
who joined us from another investment firm within six
months prior to the date of purchase of Fund shares, and
you used the proceeds from the sale of shares of a
proprietary mutual fund of that Financial Advisor's
previous firm that imposed either a front-end or deferred
sales charge to purchase Class A shares, provided that:
(1) you sold the shares not more than 60 days prior to the
purchase of Fund shares, and (2) the sale proceeds were
maintained in the interim in cash or a money market fund.
- Current or retired Directors/Trustees of the Morgan
Stanley Dean Witter Funds, such persons' spouses and
children under the age of 21, and trust accounts for which
any of such persons is a beneficiary.
- Current or retired directors, officers and employees of
Morgan Stanley Dean Witter & Co. and any of its
subsidiaries, such persons' spouses and children under the
age of 21, and trust accounts for which any of such
persons is a beneficiary.
CLASS B SHARES Class B shares are offered at net asset
value with no initial sales charge but are subject to a
contingent deferred sales charge, or CDSC, as set forth in
the table below. For the purpose of calculating the CDSC,
shares are deemed to have been purchased on the last day of
the month during which they were purchased.
<TABLE>
<CAPTION>
YEAR SINCE PURCHASE PAYMENT MADE CDSC AS A PERCENTAGE OF AMOUNT REDEEMED
<S> <C>
------------------------------------------------------------------------------------
First 5.0%
------------------------------------------------------------------------------------
Second 4.0%
------------------------------------------------------------------------------------
Third 3.0%
------------------------------------------------------------------------------------
Fourth 2.0%
------------------------------------------------------------------------------------
Fifth 2.0%
------------------------------------------------------------------------------------
Sixth 1.0%
------------------------------------------------------------------------------------
Seventh and thereafter None
------------------------------------------------------------------------------------
</TABLE>
Each time you place an order to sell or exchange shares,
shares with no CDSC will be sold or exchanged first, then
shares with the lowest CDSC will be sold or exchanged next.
For any shares subject to a CDSC, the CDSC will be assessed
on an amount equal to the lesser of the current market value
or the cost of the shares being sold.
17
<PAGE>
CDSC WAIVERS. A CDSC, if otherwise applicable, will be
waived in the case of:
- Sales of shares held at the time you die or become
disabled (within the definition in Section 72(m)(7) of the
Internal Revenue Code which relates to the ability to
engage in gainful employment), if the shares are:
(i) registered either in your name (not a trust) or in the
names of you and your spouse as joint tenants with right
of survivorship; or (ii) held in a qualified corporate or
self-employed retirement plan, IRA or 403(b) Custodial
Account, provided in either case that the sale is
requested within one year of your death or initial
determination of disability.
- Sales in connection with the following retirement plan
"distributions:" (i) lump-sum or other distributions from
a qualified corporate or self-employed retirement plan
following retirement (or, in the case of a "key employee"
of a "top heavy" plan, following attainment of age
59 1/2); (ii) distributions from an IRA or
403(b) Custodial Account following attainment of age
59 1/2; or (iii) a tax-free return of an excess IRA
contribution (a "distribution" does not include a direct
transfer of IRA, 403(b) Custodial Account or retirement
plan assets to a successor custodian or trustee).
- Sales of shares held for you as a participant in an MSDW
Eligible Plan.
- Sales of shares in connection with the Systematic
Withdrawal Plan of up to 12% annually of the value of each
Fund from which plan sales are made. The percentage is
determined on the date you establish the Systematic
Withdrawal Plan and based on the next calculated share
price. You may have this CDSC waiver applied in amounts up
to 1% per month, 3% per quarter, 6% semi-annually or 12%
annually. Shares with no CDSC will be sold first, followed
by those with the lowest CDSC. As such, the waiver benefit
will be reduced by the amount of your shares that are not
subject to a CDSC. If you suspend your participation in
the plan, you may later resume plan payments without
requiring a new determination of the account value for the
12% CDSC waiver.
- Sales of shares if you simultaneously invest the proceeds
in the Investment Manager's mutual fund asset allocation
program, pursuant to which investors pay an asset-based
fee. Any shares you acquire in connection with the
Investment Manager's mutual fund asset allocation program
are subject to all of the terms and conditions of that
program, including termination fees, mandatory sale or
transfer restrictions on termination.
All waivers will be granted only following the Fund's
distributor receiving confirmation of your entitlement. If
you believe you are eligible for a CDSC waiver, please
contact your Financial Advisor or call (800) 869-NEWS.
DISTRIBUTION FEE. Class B shares are subject to an annual
distribution (12b-1) fee of 1.0% of the average daily net
assets of Class B.
CONVERSION FEATURE. After ten (10) years, Class B shares
will convert automatically to Class A shares of the Fund
with no initial sales charge. The ten year period runs from
the last day of the month in which the shares were
purchased, or in the case
18
<PAGE>
of Class B shares acquired through an exchange, from the
last day of the month in which the original Class B shares
were purchased; the shares will convert to Class A shares
based on their relative net asset values in the month
following the ten year period. At the same time, an equal
proportion of Class B shares acquired through automatically
reinvested distributions will convert to Class A shares on
the same basis.
In the case of Class B shares held in an MSDW Eligible Plan,
the plan is treated as a single investor and all Class B
shares will convert to Class A shares on the conversion date
of the Class B shares of a Morgan Stanley Dean Witter Fund
purchased by that plan.
Currently, the Class B share conversion is not a taxable
event; the conversion feature may be cancelled if it is
deemed a taxable event in the future by the Internal Revenue
Service.
If you exchange your Class B shares for shares of a Money
Market Fund, a No-Load Fund, North American Government
Income Trust or Short-Term U.S. Treasury Trust, the holding
period for conversion is frozen as of the last day of the
month of the exchange and resumes on the last day of the
month you exchange back into Class B shares.
EXCHANGING SHARES SUBJECT TO A CDSC. There are special
considerations when you exchange Fund shares that are
subject to a CDSC. When determining the length of time you
held the shares and the corresponding CDSC rate, any period
(starting at the end of the month) during which you held
shares of a fund that does NOT charge a CDSC WILL NOT BE
COUNTED. Thus, in effect the "holding period" for purposes
of calculating the CDSC is frozen upon exchanging into a
fund that does not charge a CDSC.
For example, if you held Class B shares of the Fund for one
year, exchanged to Class B of another Morgan Stanley Dean
Witter Multi-Class Fund for another year, then sold your
shares, a CDSC rate of 4% would be imposed on the shares
based on a two year holding period -- one year for each
Fund. However, if you had exchanged the shares of the Fund
for a Money Market Fund (which does not charge a CDSC)
instead of the Multi-Class Fund, then sold your shares, a
CDSC rate of 5% would be imposed on the shares based on a
one year holding period. The one year in the Money Market
Fund would not be counted. Nevertheless, if shares subject
to a CDSC are exchanged for a Fund that does not charge a
CDSC, you will receive a credit when you sell the shares
equal to the distribution (12b-1) fees, if any, you paid on
those shares while in that Fund up to the amount of any
applicable CDSC.
In addition, shares that are exchanged into or from a Morgan
Stanley Dean Witter Fund subject to a higher CDSC rate will
be subject to the higher rate, even if the shares are
re-exchanged into a Fund with a lower CDSC rate.
19
<PAGE>
CLASS C SHARES Class C shares are sold at net asset value
with no initial sales charge but are subject to a CDSC of
1.0% on sales made within one year after the last day of the
month of purchase. The CDSC will be assessed in the same
manner and with the same CDSC waivers as with Class B
shares.
DISTRIBUTION FEE. Class C shares are subject to an annual
distribution (12b-1) fee of 1.0% of the average daily net
assets of that Class. The Class C shares' distribution fee
may cause that Class to have higher expenses and pay lower
dividends than Class A or Class D shares. Unlike Class B
shares, Class C shares have no conversion feature and,
accordingly, an investor that purchases Class C shares may
be subject to distribution (12b-1) fees applicable to
Class C shares for an indefinite period.
CLASS D SHARES Class D shares are offered without any
sales charge on purchases or sales and without any
distribution (12b-1) fee. Class D shares are offered only to
investors meeting an initial investment minimum of
$5 million ($25 million for MSDW Eligible Plans) and the
following investor categories:
- Investors participating in the Investment Manager's mutual
fund asset allocation program (subject to all of its terms
and conditions, including termination fees, mandatory sale
or transfer restrictions on termination) pursuant to which
they pay an asset-based fee.
- Persons participating in a fee-based investment program
(subject to all of its terms and conditions, including
termination fees, mandatory sale or transfer restrictions
on termination) approved by the Fund's distributor
pursuant to which they pay an asset-based fee for
investment advisory, administrative and/or brokerage
services.
- Employee benefit plans maintained by Morgan Stanley Dean
Witter & Co. or any of its subsidiaries for the benefit of
certain employees of Morgan Stanley Dean Witter & Co. and
its subsidiaries.
- Certain unit investment trusts sponsored by Dean Witter
Reynolds.
- Certain other open-end investment companies whose shares
are distributed by the Fund's distributor.
- Investors who were shareholders of the Dean Witter
Retirement Series on September 11, 1998 for additional
purchases for their former Dean Witter Retirement Series
accounts.
MEETING CLASS D ELIGIBILITY MINIMUMS. To meet the
$5 million ($25 million for certain MSDW Eligible Plans)
initial investment to qualify to purchase Class D shares you
may combine: (1) purchases in a single transaction of
Class D shares of the Fund and other Morgan Stanley Dean
Witter Multi-Class Funds and/or (2) previous purchases of
Class A and Class D shares of Multi-Class Funds and shares
of FSC Funds you currently own, along with shares of Morgan
Stanley Dean Witter Funds you currently own that you
acquired in exchange for those shares.
20
<PAGE>
NO SALES CHARGES FOR REINVESTED CASH DISTRIBUTIONS If you
receive a cash payment representing an income dividend or
capital gain and you reinvest that amount in the applicable
Class of shares by returning the check within 30 days of the
payment date, the purchased shares would not be subject to
an initial sales charge or CDSC.
PLAN OF DISTRIBUTION (RULE 12b-1 FEES) The Fund has
adopted a Plan of Distribution in accordance with
Rule 12b-1 under the Investment Company Act of 1940 with
respect to the distribution of Class A, Class B and Class C
shares. The Plan allows the Fund to pay distribution fees
for the sale and distribution of these shares. It also
allows the Fund to pay for services to shareholders of
Class A, Class B and Class C shares. Because these fees are
paid out of the Fund's assets on an ongoing basis, over time
these fees will increase the cost of your investment in
these Classes and may cost you more than paying other types
of sales charges.
21
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Fund's financial performance for the period June 28, 1999* through
October 31, 1999. Certain information reflects financial results for a
single Fund share throughout the period. The total return in the table
represent the rate an investor would have earned or lost on an
investment in the Fund (assuming reinvestment of all dividends and
distributions).
This information has been audited by PricewaterhouseCoopers LLP,
independent accountants, whose report, along with the Fund's financial
statements, is included in the annual report, which is available upon
request.
<TABLE>
<CAPTION>
FOR THE PERIOD JUNE 28, 1999*
THROUGH OCTOBER 31, 1999**
<S> <C>
-----------------------------------------------------------------------------------------------
CLASS B
-----------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA:
-----------------------------------------------------------------------------------------------
Net asset value, beginning of period $10.00
-----------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.02)
Net realized and unrealized gain 0.57
------
Total income from investment operations 0.55
-----------------------------------------------------------------------------------------------
Net asset value, end of period $10.55
-----------------------------------------------------------------------------------------------
TOTAL RETURN+(1) 5.50%
-----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(2)(3):
-----------------------------------------------------------------------------------------------
Expenses 2.56%
-----------------------------------------------------------------------------------------------
Net investment income (0.44)%
-----------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
-----------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $465,258
-----------------------------------------------------------------------------------------------
Portfolio turnover rate(1) 14%
-----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
* 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.
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
FOR THE PERIOD JUNE 28, 1999*
THROUGH OCTOBER 31, 1999**
<S> <C>
---------------------------------------------------------------------------------------------
CLASS A
---------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA:
---------------------------------------------------------------------------------------------
Net asset value, beginning of period $10.00
---------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.01
Net realized and unrealized gain 0.56
------
Total income from investment operations 0.57
---------------------------------------------------------------------------------------------
Net asset value, end of period $10.57
---------------------------------------------------------------------------------------------
TOTAL RETURN+(1) 5.70%
---------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(2)(3):
---------------------------------------------------------------------------------------------
Expenses 1.81%
---------------------------------------------------------------------------------------------
Net investment income 0.31%
---------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
---------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $38,506
---------------------------------------------------------------------------------------------
Portfolio turnover rate(1) 14%
---------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
CLASS C
------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA:
------------------------------------------------------------------------------------------
Net asset value, beginning of period $10.00
------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.02)
Net realized and unrealized gain 0.57
------
Total income from investment operations 0.55
------------------------------------------------------------------------------------------
Net asset value, end of period $10.55
------------------------------------------------------------------------------------------
TOTAL RETURN+(1) 5.50%
------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(2)(3):
------------------------------------------------------------------------------------------
Expenses 2.56%
------------------------------------------------------------------------------------------
Net investment income (0.44)%
------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $69,811
------------------------------------------------------------------------------------------
Portfolio turnover rate(1) 14%
------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
* 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.
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
FOR THE PERIOD JUNE 28, 1999*
THROUGH OCTOBER 31, 1999**
<S> <C>
---------------------------------------------------------------------------------------------
CLASS D
---------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA:
---------------------------------------------------------------------------------------------
Net asset value, beginning of period $10.00
---------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.01
Net realized and unrealized gain 0.57
------
Total income from investment operations 0.58
---------------------------------------------------------------------------------------------
Net asset value, end of period $10.58
---------------------------------------------------------------------------------------------
TOTAL RETURN+(1) 5.80%
---------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(2)(3):
---------------------------------------------------------------------------------------------
Expenses 1.56%
---------------------------------------------------------------------------------------------
Net investment income 0.56%
---------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
---------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $1,336
---------------------------------------------------------------------------------------------
Portfolio turnover rate(1) 14%
---------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
* 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.
</TABLE>
24
<PAGE>
MORGAN STANLEY DEAN WITTER
FAMILY OF FUNDS
The Morgan Stanley Dean Witter Family of Funds offers investors a wide
range of investment choices. Come on in and meet the family!
- --------------------------------------------------------------------------------
GROWTH FUNDS
- --------------------------------
GROWTH FUNDS
Aggressive Equity Fund
American Opportunities Fund
Capital Growth Securities
Developing Growth Securities
Growth Fund
Market Leader Trust
Mid-Cap Equity Trust
Next Generation Trust
Small Cap Growth Fund
Special Value Fund
21st Century Trend Fund
THEME FUNDS
Financial Services Trust
Health Sciences Trust
Information Fund
Natural Resource Development Securities
GLOBAL/INTERNATIONAL FUNDS
Competitive Edge Fund - "Best Ideas"
Portfolio
European Growth Fund
Fund of Funds - International Portfolio
International Fund
International SmallCap Fund
Japan Fund
Latin American Growth Fund
Pacific Growth Fund
- --------------------------------------------------------------------------------
GROWTH AND INCOME FUNDS
- --------------------------------
Balanced Growth Fund
Balanced Income Fund
Convertible Securities Trust
Dividend Growth Securities
Equity Fund
Fund of Funds - Domestic Portfolio
Income Builder Fund
Mid-Cap Dividend Growth Securities
S&P 500 Index Fund
S&P 500 Select Fund
Strategist Fund
Total Market Index Fund
Total Return Trust
Value Fund
Value-Added Market Series/Equity Portfolio
THEME FUNDS
Real Estate Fund
Utilities Fund
GLOBAL FUNDS
Global Dividend Growth Securities
Global Utilities Fund
- --------------------------------------------------------------------------------
INCOME FUNDS
- --------------------------------
GOVERNMENT INCOME FUNDS
Federal Securities Trust
Short-Term U.S. Treasury Trust
U.S. Government Securities Trust
DIVERSIFIED INCOME FUNDS
Diversified Income Trust
CORPORATE INCOME FUNDS
High Yield Securities
Intermediate Income Securities
Short-Term Bond Fund (NL)
GLOBAL INCOME FUNDS
North American Government Income Trust
World Wide Income Trust
TAX-FREE INCOME FUNDS
California Tax-Free Income Fund
Hawaii Municipal Trust (FSC)
Limited Term Municipal Trust (NL)
Multi-State Municipal Series Trust (FSC)
New York Tax-Free Income Fund
Tax-Exempt Securities Trust
- --------------------------------------------------------------------------------
MONEY MARKET FUNDS
- --------------------------------
TAXABLE MONEY MARKET FUNDS
Liquid Asset Fund (MM)
U.S. Government Money Market Trust (MM)
TAX-FREE MONEY MARKET FUNDS
California Tax-Free Daily Income Trust (MM)
N.Y. Municipal Money Market Trust (MM)
Tax-Free Daily Income Trust (MM)
There may be Funds created after this PROSPECTUS was published. Please consult
the inside back cover of a new Fund's prospectus for its designation, e.g.,
Multi-Class Fund or Money Market Fund.
Unless otherwise noted, each listed Morgan Stanley Dean Witter Fund, except for
North American Government Income Trust and Short-Term U.S. Treasury Trust, is a
Multi-Class Fund. A Multi-Class Fund is a mutual fund offering multiple Classes
of shares. The other types of funds are: NL - No-Load (Mutual) Fund; MM - Money
Market Fund; FSC - A mutual fund sold with a front-end sales charge and a
distribution (12b-1) fee.
<PAGE>
MORGAN STANLEY DEAN WITTER
INTERNATIONAL FUND
[Sidebar]
TICKER SYMBOLS:
Class A: INLAX
- -------------------
Class B: INLBX
- -------------------
Class C: INLCX
- -------------------
Class D: INLDX
- -------------------
[End Sidebar]
Additional information about the Fund's investments is
available in the Fund's ANNUAL AND SEMI-ANNUAL REPORTS TO
SHAREHOLDERS. In the Fund's ANNUAL REPORT, you will find a
discussion of the market conditions and investment
strategies that significantly affected the Fund's
performance during its last fiscal year. The Fund's
STATEMENT OF ADDITIONAL INFORMATION also provides additional
information about the Fund. The STATEMENT OF ADDITIONAL
INFORMATION is incorporated herein by reference (legally is
part of this PROSPECTUS). For a free copy of any of these
documents, to request other information about the Fund, or
to make shareholder inquiries, please call:
(800) 869-NEWS
You also may obtain information about the Fund by calling
your Morgan Stanley Dean Witter Financial Advisor or by
visiting our Internet site at:
www.msdw.com/individual/funds
Information about the Fund (including the STATEMENT OF
ADDITIONAL INFORMATION) can be viewed and copied at the
Securities and Exchange Commission's Public Reference
Room in Washington, DC. Information about the Reference
Room's operations may be obtained by calling the SEC at
(202) 942-8090. Reports and other information about the Fund
are available on the SEC's Internet site (www.sec.gov), and
copies of this information may be obtained, after paying a
duplicating fee, by electronic request at the following
e-mail address: [email protected], or by writing the Public
Reference Section of the SEC, Washington, DC 20549-0102.
(THE FUND'S INVESTMENT COMPANY ACT FILE NO. IS 811-09081)
