<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND TWO WORLD TRADE CENTER,
LETTER TO THE SHAREHOLDERS OCTOBER 31, 2000 NEW YORK, NEW YORK 10048
DEAR SHAREHOLDER:
During the 12-month period ended October 31, 2000, the international equity
markets outpaced the U.S. market in local currency terms. However, weakness in
the euro and the British pound resulted in a return of -2.90 percent in U.S.
dollar terms for the Morgan Stanley Capital International Europe, Australia and
Far East Index (MSCI EAFE).
Global equity markets were increasingly volatile during this period, dominated
by dramatic changes in leadership from growth to value. The primary cause of the
weakness in global equity markets was the ongoing deterioration of the
fundamentals for economic growth and corporate profits. Morgan Stanley Dean
Witter Investment Management Inc., the sub-advisor for Morgan Stanley Dean
Witter International Fund, believes that global economic growth peaked over the
summer as the result of central bank tightenings, higher energy costs and
possibly a negative wealth effect. In addition, the U.S. economic slowdown had a
more pronounced effect than the markets had anticipated.
PERFORMANCE
For the 12-month period ended October 31, 2000, Morgan Stanley Dean Witter
International Fund's Class A, B, C and D shares returned -2.65 percent, -3.41
percent, -3.41 percent and -2.46 percent, respectively. During the same period
the MSCI EAFE Index returned -2.90 percent. The performance of the Fund's four
share classes varies because each has different expenses. The total return
figures given assume the reinvestment of all distributions but do not reflect
the deduction of any applicable sales charges. The accompanying chart compares
the Fund's performance to that of the MSCI EAFE Index.
The Fund's performance was helped by its underweighting in telecommunications
services and its April shift to an overweighted position in both consumer
staples and utilities. The Fund's sector allocations during the period -- an
initial overweighting in technology and then a
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
LETTER TO THE SHAREHOLDERS OCTOBER 31, 2000, CONTINUED
rotation into old-economy sectors in the first quarter -- also contributed
positively to its return. In currency terms, the Fund was virtually unhedged
during this period, but its performance relative to its benchmark was enhanced
by its limited exposure to the euro.
The Fund's overweighting in Singapore and underweighting in Denmark negatively
affected its performance, as did its overweighting in Japan in the first half of
2000.
PORTFOLIO STRATEGY
The Fund continues to underweight the technology, media and telecommunications
sectors despite noticeably better valuations, concentrating its investments
instead in such defensive sectors as food and beverages and utilities. The Fund
is overweighted in energy because of that sector's defensive characteristics,
its strong supply/demand dynamic and the sub-advisor's expectation that earnings
for energy companies will continue to rise.
Most recently, the Fund increased its position in basic materials to a neutral
weighting. Morgan Stanley Dean Witter Investment Management believes that the
fundamental case for these stocks is not overly compelling, given the evidence
indicating a slowdown in the global economy. However, the sub-advisor believes
that this sector is inexpensive, with current valuations taking into account
virtually no earnings growth for the next several years.
JAPAN
In Japan, the Fund is now underweighted relative to its benchmark. Economic
growth and money-supply growth are weak. The Economic Planning Agency recently
downgraded its assessment for the economy for the first time since 1998, because
of a weaker outlook for exports, particularly for the U.S. and European markets.
Although the end of the zero-interest-rate policy was anticipated, investors
seem to believe that this was a one-time adjustment as opposed to a first step
of further monetary tightening. Morgan Stanley Dean Witter Investment Management
believes this action by the Bank of Japan was highly risky, but maintains
optimism that it may lead to a sustained economic recovery.
EUROPE
The Fund is now neutrally weighted in the United Kingdom and overweighted in
Switzerland, having added to its positions in both markets in the third quarter
because the sub-advisor perceived them as offering good relative value and
having high defensive sector weightings. Among the factors working in Europe's
favor were the intervention staged by several central banks on behalf of the
euro, which
2
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
LETTER TO THE SHAREHOLDERS OCTOBER 31, 2000, CONTINUED
provided a needed floor for that currency's decline, and the tax-reform programs
announced in Germany, France and Italy that will likely benefit the markets in
those countries. However, the economic bite from the sharp rise in oil prices
and short-term interest-rate increases could be harsher than expected.
LOOKING AHEAD
The end of the fiscal year found the Fund's sub-advisor looking for safe havens
amid the global market turmoil. The sub-advisor does not expect that strong
growth will necessarily sustain healthy advances in earnings in a global
economic slowdown. However, Morgan Stanley Dean Witter Investment Management
continues to maintain a favorable long-term outlook for the international
markets.
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,
[/S/ CHARLES A. FIUMEFREDDO] [/S/ MITCHELL M. MERIN]
CHARLES A. FIUMEFREDDO MITCHELL M. MERIN
CHAIRMAN OF THE BOARD PRESIDENT
3
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
FUND PERFORMANCE OCTOBER 31, 2000
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GROWTH OF $10,000
($ IN THOUSANDS) CLASS A CLASS B CLASS C CLASS D MSCI EAFE(4)
<S> <C> <C> <C> <C> <C>
Jun-99 $9,475 $10,000 $10,000 $10,000 $10,000
Jun-99 $9,380 $9,900 $9,900 $9,900 $9,949
Jul-99 $9,608 $10,130 $10,130 $10,140 $10,244
Oct-99 $10,015 $10,550 $10,550 $10,580 $10,774
Jan-00 $10,603 $11,140 $11,140 $11,200 $11,377
Apr-00 $10,631 $11,150 $11,150 $11,240 $11,498
Jul-00 $10,356 $10,850 $10,850 $10,960 $11,167
Oct-00 $9,750(3) $9,790(3) $10,190(3) $10,320(3) $10,462(3)
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RETURNS. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE. WHEN YOU SELL FUND SHARES, THEY MAY BE WORTH
LESS THAN THEIR ORIGINAL COST. PERFORMANCE FOR CLASS A, CLASS B, CLASS C,
AND CLASS D SHARES WILL VARY DUE TO DIFFERENCES IN SALES CHARGES AND
EXPENSES.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES* CLASS B SHARES**
---------------------------------------------------------- ---------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 Year (2.65)%(1) (7.76)%(2) 1 Year (3.41)%(1) (8.24)%(2)
Since Inception (6/28/99) 2.15%(1) (1.87)%(2) Since Inception (6/28/99) 1.41%(1) (1.57)%(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS C SHARES+ CLASS D SHARES#
------------------------------------------------------ -------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 Year (3.41)%(1) (4.38)%(2) 1 Year (2.46)%(1)
Since Inception (6/28/99) 1.41%(1) 1.41%(2) Since Inception (6/28/99) 2.37%(1)
</TABLE>
------------------------
(1) Figure shown assumes reinvestment of all distributions and does not reflect
the deduction of any sales charges.
(2) Figure shown assumes reinvestment of all distributions and the deduction of
the maximum applicable sales charge. See the Fund's current prospectus for
complete details on fees and sales charges.
(3) Closing value assuming a complete redemption on October 31, 2000.
(4) The Morgan Stanley Capital International (MSCI) EAFE Index measures the
performance for a diverse range of global stock markets within Europe,
Australasia, and the Far East. The performance of the Index is listed in
U.S. dollars and assumes reinvestment of net dividends. "Net dividends"
reflects a reduction in dividends after taking into account withholding of
taxes by certain foreign countries represented in the Index. The Index does
not include any expenses, fees or charges. The Index is unmanaged and
should not be considered an investment.
* The maximum front-end sales charge for Class A is 5.25%.
** The maximum contingent deferred sales charge (CDSC) for Class B is 5.0%.
The CDSC declines to 0% after six years.
+ The maximum contingent deferred sales charge for Class C shares is 1% for
shares redeemed within one year of purchase.
# Class D shares have no sales charge.
4
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2000
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS, RIGHTS AND WARRANTS (81.1%)
AUSTRALIA (1.5%)
AIR FREIGHT/COURIERS
28,081 Mayne Nickless Ltd.................................................... $ 74,950
------------
BEVERAGES: ALCOHOLIC
127,993 Foster's Brewing Group Ltd............................................ 291,578
------------
BEVERAGES: NON-ALCOHOLIC
47,124 Coca-Cola Amatil Ltd.................................................. 96,470
------------
CASINO/GAMING
23,585 TABCORP Holdings Limited.............................................. 128,949
------------
CHEMICALS: SPECIALTY
11,632 Orica Ltd............................................................. 35,170
------------
CONTAINERS/PACKAGING
47,100 Amcor Ltd............................................................. 131,360
------------
ENGINEERING & CONSTRUCTION
19,776 Leighton Holdings Ltd................................................. 68,979
------------
FOOD RETAIL
79,696 Coles Myer Ltd........................................................ 290,403
83,646 Woolworth's Ltd....................................................... 335,145
------------
625,548
------------
FOOD: SPECIALTY/CANDY
88,267 Goodman Fielder Ltd................................................... 57,517
------------
GAS DISTRIBUTORS
38,594 Australian Gas Light Company Ltd...................................... 233,904
------------
INDUSTRIAL CONGLOMERATES
77,680 Pacific Dunlop Ltd.................................................... 62,362
46,286 Southcorp Holdings Ltd................................................ 120,258
13,941 Wesfarmers Limited.................................................... 107,042
------------
289,662
------------
LIFE/HEALTH INSURANCE
70,597 Amp Ltd............................................................... 639,991
------------
MAJOR BANKS
21,081 Commonwealth Bank of Australia........................................ 315,498
100,302 National Australia Bank Ltd........................................... 1,401,303
137,249 Westpac Banking Corp., Ltd............................................ 942,572
------------
2,659,373
------------
MAJOR TELECOMMUNICATIONS
80,283 Telstra Corp., Ltd.................................................... 263,497
------------
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
MEDIA CONGLOMERATES
136,133 News Corporation Ltd.................................................. $ 1,432,097
120,900 News Corporation Ltd. (Pref.)......................................... 1,090,335
------------
2,522,432
------------
MISCELLANEOUS COMMERCIAL SERVICES
15,821 Brambles Industries, Ltd.............................................. 412,531
------------
OIL & GAS PRODUCTION
70,406 Santos Ltd............................................................ 225,354
------------
OTHER METALS/MINERALS
92,649 Broken Hill Proprietary Co., Ltd...................................... 903,171
23,162 OneSteel Ltd.*........................................................ 11,108
10,881 Rio Tinto Ltd......................................................... 150,213
103,021 WMC Ltd............................................................... 396,073
------------
1,460,565
------------
PHARMACEUTICALS: OTHER
7,681 CSL Limited........................................................... 137,413
9,112 FH Faulding & Company Ltd............................................. 48,451
------------
185,864
------------
PRECIOUS METALS
121,676 Normandy Mining Ltd................................................... 58,990
------------
PROPERTY - CASUALTY INSURERS
30,731 QBE Insurance Group Ltd............................................... 142,579
------------
PULP & PAPER
15,700 Paperlinx Ltd......................................................... 27,009
------------
REAL ESTATE DEVELOPMENT
28,402 AMP Diversified Property Trust........................................ 34,942
104,546 General Property Trust (Units)=/=..................................... 137,340
40,106 Lend Lease Corporation Ltd............................................ 472,190
23,205 Stockland Trust Group (Units)=/=...................................... 45,363
3,355 Westfield Trust....................................................... 5,562
98,188 Westfield Trust (Units)=/=............................................ 159,135
------------
854,532
------------
REGIONAL BANKS
22,915 Suncorp-Metway Ltd.................................................... 117,067
------------
TOTAL AUSTRALIA....................................................... 11,603,871
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2000, CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
AUSTRIA (0.1%)
BEVERAGES: ALCOHOLIC
588 BBAG Oesterreichische Brau-Beteiligungs AG............................ $ 21,718
------------
BUILDING PRODUCTS
4,433 Wienerberger Baustoffindustrie AG..................................... 83,449
------------
CONTAINERS/PACKAGING
769 Mayr-Melnhof Karton AG................................................ 29,873
------------
ELECTRIC UTILITIES
1,959 Oesterreichische Elektrizitaetswirtschafts AG (Verbund) (A Shares).... 157,972
------------
ENGINEERING & CONSTRUCTION
302 Bau Holding AG........................................................ 7,667
963 VA Technologie AG..................................................... 39,004
------------
46,671
------------
MAJOR BANKS
4,522 Bank Austria AG....................................................... 244,776
------------
MISCELLANEOUS MANUFACTURING
1,080 BWT AG................................................................ 33,921
------------
MULTI-LINE INSURANCE
454 Generali Holding Vienna AG............................................ 66,497
------------
OTHER TRANSPORTATION
1,363 Flughafen Wien AG..................................................... 49,753
------------
STEEL
673 Boehler-Uddeholm AG................................................... 21,144
------------
TOBACCO
2,939 Austria Tabakwerke AG................................................. 134,757
------------
TOTAL AUSTRIA......................................................... 890,531
------------
BELGIUM (0.0%)
PHARMACEUTICALS: OTHER
1,600 UCB S.A............................................................... 57,060
------------
BRAZIL (1.2%)
BEVERAGES: ALCOHOLIC
2,110,000 Companhia de Bebidas das Americas (Pref.)*............................ 472,846
------------
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
ELECTRIC UTILITIES
44,732,000 Centrais Electricas Brasileiras S.A................................... $ 797,693
19,826,000 Companhia Energetica de Minas Gerais S.A. (Pref.)..................... 302,240
------------
1,099,933
------------
FINANCE/RENTAL/LEASING
66,636,000 Bradespar S.A.*....................................................... 36,455
64,675,000 Bradespar S.A. (Pref.)*............................................... 38,104
------------
74,559
------------
FOOD RETAIL
10,219,000 Companhia Brasileira de Distribuicao Grupo Pao de Acucar (Pref.)...... 365,594
------------
INTEGRATED OIL
58,250 Petroleo Brasileiro S.A............................................... 1,700,618
43,830 Petroleo Brasileiro S.A. (Pref.)...................................... 1,166,879
------------
2,867,497
------------
MAJOR TELECOMMUNICATIONS
22,490,000 Tele Centro Sul Participacoes S.A. (Pref.)............................ 244,539
------------
METAL FABRICATIONS
6,859,000 Companhia Siderurgica Nacional........................................ 191,193
------------
OTHER METALS/MINERALS
35,000 Companhia Vale do Rio Doce (Pref.) (Class A).......................... 810,100
------------
PULP & PAPER
98,000 Aracruz Celulose S.A. (Pref.) (B Shares).............................. 145,376
------------
REGIONAL BANKS
66,636,000 Banco Bradesco S.A.................................................... 315,478
64,675,000 Banco Bradesco S.A. (Pref.)........................................... 413,362
8,659,000 Banco Itau S.A. (Pref.)............................................... 676,413
------------
1,405,253
------------
SPECIALTY TELECOMMUNICATIONS
22,237,000 Embratel Participacoes S.A. (Pref.)................................... 358,295
25,601,544 Tele Norte Leste Participacoes S.A. (Pref.)........................... 561,322
------------
919,617
------------
TOBACCO
32,000 Souza Cruz S.A........................................................ 156,213
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2000, CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
WIRELESS COMMUNICATIONS
19,332,351 Telesp Celular Participacoes S.A. (Pref.)............................. $ 229,629
------------
TOTAL BRAZIL.......................................................... 8,982,349
------------
DENMARK (0.1%)
BEVERAGES: ALCOHOLIC
1,645 Carlsberg AS (Series A)............................................... 71,317
1,800 Carlsberg AS (Series B)............................................... 75,367
------------
146,684
------------
FOOD: SPECIALTY/CANDY
3,700 Danisco AS............................................................ 146,479
------------
PHARMACEUTICALS: MAJOR
800 Novo-Nordisk AS (Series B)............................................ 169,764
------------
TOTAL DENMARK......................................................... 462,927
------------
FINLAND (0.9%)
BEVERAGES: ALCOHOLIC
8,005 Hartwall Oyj ABP...................................................... 138,660
------------
FOOD RETAIL
18,773 Kesko Oyj (B Shares).................................................. 157,011
------------
FOOD: SPECIALTY/CANDY
17,441 Raisio Group PLC...................................................... 26,360
------------
INDUSTRIAL MACHINERY
16,819 Metso Oyj............................................................. 128,529
------------
INFORMATION TECHNOLOGY SERVICES
7,682 Tietoenator Oyj ABP................................................... 147,741
------------
MAJOR TELECOMMUNICATIONS
14,351 Sonera Oyj............................................................ 316,334
------------
OTHER METALS/MINERALS
12,313 Outokumpu Oyj......................................................... 85,731
------------
PROPERTY - CASUALTY INSURERS
11,435 Sampo Insurance Co. Ltd. (A Shares)................................... 466,054
------------
PULP & PAPER
29,009 UPM-Kymmene Oyj....................................................... 821,462
------------
TELECOMMUNICATION EQUIPMENT
105,427 Nokia Oyj+............................................................ 4,340,731
------------
TRUCKS/CONSTRUCTION/FARM MACHINERY
7,227 Wartsila Oyj (B Shares)............................................... 116,592
------------
TOTAL FINLAND......................................................... 6,745,205
------------
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
FRANCE (8.9%)
AEROSPACE & DEFENSE
13,917 Thomson CSF........................................................... $ 625,115
------------
AGRICULTURAL COMMODITIES/MILLING
4,438 Eridania Beghin-Say S.A............................................... 341,597
------------
AUTO PARTS: O.E.M.
7,722 Valeo S.A............................................................. 336,361
------------
AUTOMOTIVE AFTERMARKET
11,392 Compagnie Generale des Etablissements Michelin (B Shares)............. 329,847
------------
BEVERAGES: ALCOHOLIC
39,095 LVMH (Louis Vuitton Moet Hennessy)+................................... 2,854,819
8,558 Pernod-Ricard......................................................... 392,396
------------
3,247,215
------------
CABLE/SATELLITE TV
10,325 Canal Plus............................................................ 1,494,766
------------
CHEMICALS: SPECIALTY
8,568 Air Liquide S.A....................................................... 1,013,420
------------
CONSTRUCTION MATERIALS
783 Imetal S.A............................................................ 77,454
6,763 Lafarge S.A........................................................... 499,594
------------
577,048
------------
CONTAINERS/PACKAGING
8,087 Compagnie de Saint-Gobain............................................. 1,070,514
10,515 Pechiney S.A. (A Shares).............................................. 392,845
------------
1,463,359
------------
ELECTRICAL PRODUCTS
14,199 Schneider Electric S.A................................................ 925,326
------------
ENGINEERING & CONSTRUCTION
25,730 Bouygues S.A.......................................................... 1,310,841
12,952 Suez Lyonnaise des Eaux............................................... 1,977,358
------------
3,288,199
------------
FOOD RETAIL
49,586 Carrefour S.A.+....................................................... 3,330,385
6,736 Etablissements Economiques du Casino Guichard-Perrachon S.A........... 588,540
------------
3,918,925
------------
FOOD: MAJOR DIVERSIFIED
26,848 Groupe Danone......................................................... 3,756,886
------------
HOTELS/RESORTS/CRUISELINES
15,568 Accor S.A............................................................. 630,536
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2000, CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
HOUSEHOLD/PERSONAL CARE
54,410 L'Oreal S.A.+......................................................... $ 4,157,958
------------
INFORMATION TECHNOLOGY SERVICES
5,910 Cap Gemini S.A........................................................ 943,418
2,769 Sodexho Alliance S.A.................................................. 433,789
------------
1,377,207
------------
MAJOR BANKS
13,865 BNP Paribas S.A.+..................................................... 1,196,114
16,700 Societe Generale (A Shares)........................................... 948,640
------------
2,144,754
------------
MAJOR TELECOMMUNICATIONS
13,870 France Telecom S.A.+.................................................. 1,450,928
------------
MEDICAL SPECIALTIES
613 Essilor International S.A............................................. 147,301
------------
MOTOR VEHICLES
3,645 PSA Peugeot Citroen................................................... 671,608
------------
MOVIES/ENTERTAINMENT
42,291 Vivendi S.A........................................................... 3,041,517
------------
MULTI-LINE INSURANCE
27,424 AXA+.................................................................. 3,632,572
------------
OIL REFINING/MARKETING
94,403 Total Fina Elf........................................................ 13,514,569
------------
OILFIELD SERVICES/EQUIPMENT
2,378 Coflexip S.A.......................................................... 275,615
------------
OTHER CONSUMER SPECIALTIES
5,655 Societe BIC S.A....................................................... 196,148
------------
PACKAGED SOFTWARE
6,970 Dassault Systemes S.A................................................. 531,753
------------
PHARMACEUTICALS: MAJOR
65,555 Aventis S.A........................................................... 4,731,334
64,933 Sanofi-Synthelabo S.A................................................. 3,418,346
------------
8,149,680
------------
PUBLISHING: BOOKS/MAGAZINES
12,432 Lagardere S.C.A....................................................... 706,197
------------
REAL ESTATE DEVELOPMENT
2,100 Fonciere Lyonnaise.................................................... 205,058
3,970 Gecina................................................................ 340,464
5,460 Klepierre............................................................. 440,428
6,854 Simco S.A............................................................. 424,840
1,764 Simco-CIF de Valeur Garant (Warrants due 10/31/03).................... 8,837
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
1,010 Societe Immobiliere de Location pour l'Industrie et le Commerce....... $ 135,328
5,170 Sophia (EX-SFI)....................................................... 127,130
6,270 Unibail............................................................... 835,846
------------
2,517,931
------------
SEMICONDUCTORS
21,403 STMicroelectronics NV................................................. 1,080,402
------------
SPECIALTY STORES
10,090 Pinault-Printemps-Redoute S.A......................................... 1,801,728
------------
STEEL
26,581 Usinor S.A............................................................ 290,024
------------
TELECOMMUNICATION EQUIPMENT
25,387 Alcatel+.............................................................. 1,549,884
718 Sagem S.A. (New)...................................................... 131,685
------------
1,681,569
------------
TOTAL FRANCE.......................................................... 69,318,061
------------
GERMANY (7.8%)
AIRLINES
19,550 Deutsche Lufthansa AG................................................. 386,778
------------
AUTO PARTS: O.E.M.
7,050 Continental AG........................................................ 107,451
------------
CHEMICALS: MAJOR DIVERSIFIED
75,700 BASF AG............................................................... 2,982,447
88,600 Bayer AG.............................................................. 3,844,266
------------
6,826,713
------------
CONSTRUCTION MATERIALS
2,300 Dyckerhoff AG (Pref.)................................................. 36,520
5,550 Heidelberger Zement AG................................................ 264,843
------------
301,363
------------
DEPARTMENT STORES
7,850 Karstadquelle AG...................................................... 258,286
------------
HOUSEHOLD/PERSONAL CARE
14,500 Beiersdorf AG......................................................... 1,428,186
------------
INDUSTRIAL CONGLOMERATES
99,280 E. ON AG.............................................................. 5,049,489
7,800 MAN AG................................................................ 205,975
60,200 RWE AG................................................................ 2,422,890
2,050 RWE AG (Pref.)........................................................ 64,404
55,550 Siemens AG (Registered Shares)........................................ 7,075,126
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2000, CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
67,450 ThyssenKrupp AG....................................................... $ 967,893
------------
15,785,777
------------
INDUSTRIAL MACHINERY
11,900 Linde AG.............................................................. 520,371
------------
INDUSTRIAL SPECIALTIES
1,000 SGL Carbon AG*........................................................ 60,965
------------
MAJOR BANKS
23,350 Bayerische Hypo - und Vereinsbank AG+................................. 1,282,774
33,450 Deutsche Bank AG (Registered Shares)+................................. 2,755,032
26,500 Dresdner Bank AG...................................................... 1,101,431
------------
5,139,237
------------
MAJOR TELECOMMUNICATIONS
41,150 Deutsche Telecom AG+.................................................. 1,539,128
------------
MEDICAL DISTRIBUTORS
4,150 Gehe AG............................................................... 150,465
------------
MEDICAL/NURSING SERVICES
8,050 Fresenius Medical Care AG............................................. 642,514
------------
MOTOR VEHICLES
81,450 DaimlerChrylser AG (Registered Shares)+............................... 3,758,802
25,800 Volkswagen AG......................................................... 1,290,309
3,650 Volkswagen AG (Pref.)................................................. 104,753
------------
5,153,864
------------
MOVIES/ENTERTAINMENT
5,600 EM. TV & Merchandising AG............................................. 168,801
------------
MULTI-LINE INSURANCE
23,900 Allianz AG (Registered Shares)+....................................... 8,127,543
16,650 Muenchener Rueckver AG (Registered Shares)+........................... 5,259,156
------------
13,386,699
------------
OTHER CONSUMER SERVICES
15,450 Preussag AG........................................................... 503,754
------------
PACKAGED SOFTWARE
18,000 SAP AG................................................................ 2,948,245
12,750 SAP AG (Pref.)........................................................ 2,582,007
------------
5,530,252
------------
PHARMACEUTICALS: MAJOR
11,200 Merck KGaA............................................................ 427,471
12,600 Schering AG........................................................... 702,902
------------
1,130,373
------------
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
REAL ESTATE DEVELOPMENT
30,007 IVG Holding AG........................................................ $ 331,226
8,550 WCM Beteiligungs-und Grundbesitz AG................................... 170,605
------------
501,831
------------
RESTAURANTS
5,100 Kamps AG.............................................................. 80,113
------------
SPECIALTY STORES
5,400 Douglas Holding AG.................................................... 161,397
27,200 Metro AG.............................................................. 1,097,037
------------
1,258,434
------------
TOTAL GERMANY......................................................... 60,861,355
------------
HONG KONG (1.5%)
AIRLINES
226,000 Cathay Pacific Airways, Ltd........................................... 410,071
------------
BROADCASTING
31,000 Television Broadcasts Ltd............................................. 169,740
------------
ELECTRIC UTILITIES
154,000 CLP Holdings Ltd...................................................... 718,814
------------
ENGINEERING & CONSTRUCTION
135,004 New World Development Co., Ltd........................................ 160,134
------------
GAS DISTRIBUTORS
326,300 Hong Kong & China Gas Co., Ltd........................................ 412,143
------------
HOTELS/RESORTS/CRUISELINES
38,000 Shangri-La Asia Ltd................................................... 37,520
------------
INDUSTRIAL CONGLOMERATES
271,900 Hutchison Whampoa, Ltd................................................ 3,373,298
99,000 Swire Pacific Ltd. (Class A).......................................... 610,625
------------
3,983,923
------------
MAJOR BANKS
128,500 Hang Seng Bank Ltd.................................................... 1,511,832
------------
MISCELLANEOUS MANUFACTURING
250,000 Johnson Electric Holdings Ltd......................................... 498,500
------------
REAL ESTATE DEVELOPMENT
92,000 Henderson Land Development Co., Ltd................................... 396,389
42,000 Hysan Development Co., Ltd............................................ 53,319
336,996 Sino Land Co., Ltd.................................................... 150,167
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2000, CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
156,000 Sun Hung Kai Properties Ltd........................................... $ 1,275,262
168,000 Wharf (Holdings) Ltd. (The)........................................... 342,532
------------
2,217,669
------------
REGIONAL BANKS
98,338 Bank of East Asia, Ltd................................................ 221,936
------------
SPECIALTY TELECOMMUNICATIONS
941,056 Pacific Century CyberWorks Ltd.*...................................... 724,038
------------
WHOLESALE DISTRIBUTORS
416,000 Li & Fung Limited..................................................... 773,492
------------
TOTAL HONG KONG....................................................... 11,839,812
------------
IRELAND (0.0%)
FOOD: SPECIALTY/CANDY
2,623 Kerry Group PLC (A Shares)............................................ 32,762
------------
ITALY (2.7%)
APPAREL/FOOTWEAR
102,548 Benetton Group SpA.................................................... 186,337
------------
AUTO PARTS: O.E.M.
139,536 Pirelli SpA........................................................... 405,202
------------
BROADCASTING
72,886 Mediaset SpA.......................................................... 1,055,182
------------
CONSTRUCTION MATERIALS
4,227 Italcementi SpA....................................................... 33,594
------------
ELECTRIC UTILITIES
765,943 Enel SpA+............................................................. 2,842,083
------------
ENGINEERING & CONSTRUCTION
24,787 Impregilo SpA......................................................... 13,301
11,209 Sirti SpA............................................................. 16,085
------------
29,386
------------
FOOD RETAIL
12,811 La Rinascente SpA..................................................... 65,484
------------
FOOD: MEAT/FISH/DAIRY
202,003 Parmalat Finanziara SpA............................................... 291,585
------------
GAS DISTRIBUTORS
50,128 Italgas SpA........................................................... 207,285
------------
INDUSTRIAL SPECIALTIES
32,601 Snia SpA.............................................................. 67,543
------------
INTEGRATED OIL
852,103 ENI SpA+.............................................................. 4,616,062
------------
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
LIFE/HEALTH INSURANCE
78,112 Assicurazioni Generali+............................................... $ 2,570,090
------------
MAJOR BANKS
155,370 Banca di Roma SpA..................................................... 163,850
171,364 Banca Intesa SpA...................................................... 711,520
50,952 San Paolo - IMI SpA................................................... 826,330
159,934 Unicredito Italiano SpA............................................... 814,800
------------
2,516,500
------------
MAJOR TELECOMMUNICATIONS
52,110 Olivetti SpA.......................................................... 157,960
56,579 Telecom Italia SpA.................................................... 655,763
8,820 Telecom Italia SpA - RNC.............................................. 48,005
------------
861,728
------------
MOTOR VEHICLES
16,389 Fiat SpA.............................................................. 381,296
3,384 Fiat SpA (Pref.)...................................................... 50,514
------------
431,810
------------
MULTI-LINE INSURANCE
35,095 Riunione Adriatica di Sicurta SpA..................................... 460,993
4,084 Societa Assicuratrice Industriale SpA (SAI)........................... 67,794
------------
528,787
------------
PULP & PAPER
7,485 Reno de Medici SpA.................................................... 15,507
------------
REGIONAL BANKS
13,047 Banca Popolare di Milano.............................................. 81,979
22,718 Mediobanca SpA........................................................ 252,890
------------
334,869
------------
RESTAURANTS
13,310 Autogrill SpA......................................................... 147,033
------------
WIRELESS COMMUNICATIONS
95,611 Telecom Italia Mobile SpA-RNC......................................... 507,396
402,165 Telecom Italia Mobile SpA............................................. 3,421,613
------------
3,929,009
------------
TOTAL ITALY........................................................... 21,135,076
------------
JAPAN (16.4%)
AIR FREIGHT/COURIERS
70,000 Nippon Express Co., Ltd............................................... 420,026
4,000 Yamato Transport Co., Ltd............................................. 80,799
------------
500,825
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2000, CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
AIRLINES
42,000 Japan Airlines Company, Ltd........................................... $ 168,138
------------
APPAREL/FOOTWEAR
23,000 Onward Kashiyama Co., Ltd............................................. 170,667
------------
APPAREL/FOOTWEAR RETAIL
200 Shimamura Co., Ltd.................................................... 15,170
------------
AUTO PARTS: O.E.M.
33,000 Denso Corporation..................................................... 752,748
35,000 NGK Spark Plug Co., Ltd............................................... 538,338
------------
1,291,086
------------
AUTOMOTIVE AFTERMARKET
58,000 Bridgestone Corp...................................................... 574,899
------------
BEVERAGES: ALCOHOLIC
31,000 Asahi Breweries, Ltd.................................................. 306,138
143,000 Kirin Brewery Co., Ltd................................................ 1,490,784
3,000 Takara Shuzo Co., Ltd................................................. 50,540
------------
1,847,462
------------
BROADCASTING
19,000 Tokyo Broadcasting System, Inc........................................ 743,221
------------
BUILDING PRODUCTS
3,000 Nippon Sheet Glass Company, Ltd....................................... 45,621
3,000 Tostem Corporation.................................................... 43,697
69,000 Toto Ltd.............................................................. 523,379
------------
612,697
------------
CHEMICALS: SPECIALTY
86,000 Asahi Chemical Industry Co., Ltd...................................... 532,576
5,000 Kaneka Corp........................................................... 48,553
4,000 Kuraray Co., Ltd...................................................... 37,560
123,000 Mitsubishi Chemical Corp.............................................. 388,741
13,000 Shin-Etsu Chemical Co., Ltd........................................... 533,529
129,000 Sumitomo Chemical Co Ltd.............................................. 635,782
------------
2,176,741
------------
COMMERCIAL PRINTING/FORMS
69,000 Dai Nippon Printing Co., Ltd.......................................... 1,080,890
57,000 Toppan Printing Co. Ltd............................................... 503,371
------------
1,584,261
------------
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
COMPUTER PROCESSING HARDWARE
105,000 Fujitsu Ltd.+......................................................... $ 1,869,916
------------
CONSTRUCTION MATERIALS
128,000 Ube Industries, Ltd................................................... 257,970
------------
CONTAINERS/PACKAGING
3,000 Toyo Seikan Kaisha, Ltd............................................... 50,843
------------
DATA PROCESSING SERVICES
200 Trans Cosmos Inc...................................................... 14,456
------------
DEPARTMENT STORES
21,400 Marui Co., Ltd........................................................ 315,628
56,000 Mitsukoshi Ltd.*...................................................... 199,560
------------
515,188
------------
ELECTRIC UTILITIES
98,600 Kansai Electric Power Co. Inc......................................... 1,614,128
35,700 Tohoku Electric Power Co., Inc........................................ 480,753
127,800 Tokyo Electric Power Co............................................... 3,102,510
------------
5,197,391
------------
ELECTRICAL PRODUCTS
56,000 Furukawa Electric Co., Ltd............................................ 1,472,334
47,000 NGK Insulators, Ltd................................................... 622,160
2,400 Nidec Corp............................................................ 147,087
101,000 Sumitomo Electric Industries.......................................... 1,864,373
7,000 Taiyo Yuden Co., Ltd.................................................. 267,406
------------
4,373,360
------------
ELECTRONIC COMPONENTS
1,600 Hirose Electric Co., Ltd.............................................. 184,683
10,700 Murata Manufacturing Co., Ltd......................................... 1,280,158
7,000 Omron Corp............................................................ 172,499
------------
1,637,340
------------
ELECTRONIC DISTRIBUTORS
16,000 Softbank Corp......................................................... 960,059
------------
ELECTRONIC EQUIPMENT/INSTRUMENTS
35,000 Canon, Inc............................................................ 1,388,329
8,400 Kyocera Corp.......................................................... 1,092,708
134,000 Matsushita Electric Industrial Co., Ltd.+............................. 3,891,352
60,000 NEC Corp. (Japan)..................................................... 1,143,276
167,000 Sanyo Electric Co. Ltd................................................ 1,269,787
121,000 Toshiba Corp.......................................................... 864,602
12,000 Yokogawa Electric Corp................................................ 94,100
------------
9,744,154
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2000, CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
ELECTRONIC PRODUCTION EQUIPMENT
4,100 Advantest Corp........................................................ $ 534,472
15,000 Nikon Corporation..................................................... 217,937
7,600 Tokyo Electron Ltd.................................................... 594,577
------------
1,346,986
------------
ELECTRONICS/APPLIANCES
65,000 Casio Computer Co., Ltd............................................... 655,002
16,000 Pioneer Corp.......................................................... 495,420
49,000 Sharp Corp............................................................ 623,946
51,400 Sony Corp............................................................. 4,105,973
------------
5,880,341
------------
ENGINEERING & CONSTRUCTION
130,000 Kajima Corp........................................................... 338,219
3,000 Kinden Corp........................................................... 19,678
17,000 Obayashi Corp......................................................... 70,392
96,000 Shimizu Corporation................................................... 262,074
131,000 Taisei Corporation.................................................... 187,211
------------
877,574
------------
FINANCE/RENTAL/LEASING
9,800 Acom Co., Ltd......................................................... 792,726
2,200 Credit Saison Co., Ltd................................................ 46,556
5,400 Nichiei Co., Ltd...................................................... 23,745
3,800 Orix Corp............................................................. 398,589
7,700 Promise Co., Ltd...................................................... 577,712
9,900 Takefuji Corporation.................................................. 979,480
------------
2,818,808
------------
FLUID CONTROLS
45,000 Ebara Corp............................................................ 698,745
------------
FOOD RETAIL
78,000 Daiei, Inc.*.......................................................... 132,906
32,000 Ito-Yokado Co., Ltd.+................................................. 1,445,218
30,000 Jusco Co.............................................................. 563,393
22,000 Mycal Corporation..................................................... 50,788
------------
2,192,305
------------
FOOD: MEAT/FISH/DAIRY
30,000 Nippon Meat Packers, Inc.............................................. 380,359
------------
FOOD: SPECIALTY/CANDY
94,000 Ajinomoto Co., Inc.................................................... 1,050,568
1,400 Nissin Food Products Co., Ltd......................................... 36,744
------------
1,087,312
------------
GAS DISTRIBUTORS
214,000 Osaka Gas Co. Ltd..................................................... 527,354
208,000 Tokyo Gas Co., Ltd.................................................... 543,056
------------
1,070,410
------------
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
HOME BUILDING
68,000 Daiwa House Industry Co., Ltd......................................... $ 426,713
3,000 Sekisui Chemical Co., Ltd............................................. 8,657
69,000 Sekisui House Ltd..................................................... 729,443
------------
1,164,813
------------
HOUSEHOLD/PERSONAL CARE
63,000 Kao Corp.............................................................. 1,887,230
30,000 Shiseido Company, Ltd................................................. 387,505
1,100 Uni-Charm Corp........................................................ 47,059
------------
2,321,794
------------
INDUSTRIAL CONGLOMERATES
124,000 Hitachi Ltd.+......................................................... 1,329,058
13,000 Kawasaki Heavy Industries, Ltd.*...................................... 13,457
------------
1,342,515
------------
INDUSTRIAL MACHINERY
4,000 Daikin Industries, Ltd................................................ 77,318
17,500 Fanuc, Ltd.+.......................................................... 1,571,088
3,000 Minebea Co., Ltd...................................................... 29,956
338,000 Mitsubishi Heavy Industries Ltd.+..................................... 1,312,862
------------
2,991,224
------------
INDUSTRIAL SPECIALTIES
140,000 Asahi Glass Company, Ltd.............................................. 1,436,424
2,000 Hoya Corp............................................................. 165,262
2,000 Nitto Denko Corp...................................................... 67,607
------------
1,669,293
------------
INVESTMENT BANKS/BROKERS
88,000 Daiwa Securities Co., Ltd............................................. 974,643
135,000 Nomura Securities Co., Ltd............................................ 2,862,999
------------
3,837,642
------------
MAJOR BANKS
187,000 Asahi Bank Ltd. (The)................................................. 736,625
33,000 Bank of Fukuoka, Ltd. (The)........................................... 162,037
241,000 Bank of Tokyo-Mitsubishi, Ltd......................................... 2,889,969
82,000 Bank of Yokohama Ltd.................................................. 401,887
202,000 Daiwa Bank Ltd........................................................ 410,810
13,000 Joyo Bank, Ltd. (The)................................................. 44,421
95,000 Mitsubishi Trust & Banking+........................................... 770,200
369 Mizuho Holdings, Inc.+................................................ 2,836,121
239,000 Sakura Bank, Ltd. (The)............................................... 1,740,610
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2000, CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
60,000 Shizuoka Bank, Ltd. (The)............................................. $ 544,705
164,000 Sumitomo Bank Ltd. (The).............................................. 1,990,656
163,000 Tokai Bank Ltd. (The)................................................. 873,534
------------
13,401,575
------------
MAJOR TELECOMMUNICATIONS
356 Nippon Telegraph & Telephone Corp..................................... 3,238,439
------------
MARINE SHIPPING
120,000 Nippon Yusen Kabushiki Kaisha......................................... 562,844
------------
MEDICAL SPECIALTIES
4,000 Olympus Optical Co., Ltd.............................................. 55,258
21,000 Terumo Corp........................................................... 594,449
------------
649,707
------------
METAL FABRICATIONS
86,000 Mitsubishi Materials Corp............................................. 252,895
8,000 NSK Ltd............................................................... 57,604
------------
310,499
------------
MISCELLANEOUS COMMERCIAL SERVICES
22,000 Secom Co., Ltd........................................................ 1,567,974
------------
MISCELLANEOUS MANUFACTURING
177,000 Kubota Corp........................................................... 595,081
183,000 Mitsubishi Electric Corp.............................................. 1,314,328
------------
1,909,409
------------
MOTOR VEHICLES
38,000 Honda Motor Co.+...................................................... 1,312,385
133,000 Nissan Motor Co., Ltd.*............................................... 912,578
162,000 Toyota Motor Corp..................................................... 6,470,502
------------
8,695,465
------------
MOVIES/ENTERTAINMENT
700 Namco Ltd............................................................. 18,084
6,400 Oriental Land Co. Ltd................................................. 386,955
100 Toho Co., Ltd......................................................... 14,410
------------
419,449
------------
OIL REFINING/MARKETING
12,000 Japan Energy Corp.*................................................... 15,940
187,000 Nippon Mitsubishi Oil Corp............................................ 1,005,579
11,000 Showa Shell Sekiyu K.K................................................ 55,322
------------
1,076,841
------------
OTHER CONSUMER SERVICES
13,000 Benesse Corporation................................................... 714,547
------------
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
OTHER METALS/MINERALS
42,000 Sumitomo Metal Mining Co.............................................. $ 216,618
------------
PACKAGED SOFTWARE
2,900 Fuji Soft ABC Inc..................................................... 190,748
500 Konami Co., Ltd....................................................... 42,140
------------
232,888
------------
PHARMACEUTICALS: MAJOR
51,000 Sankyo Co., Ltd....................................................... 1,123,626
106,000 Takeda Chemical Industries, Ltd....................................... 6,981,861
------------
8,105,487
------------
PHARMACEUTICALS: OTHER
35,000 Chugai Pharmaceutical Co.............................................. 593,807
7,000 Daiichi Pharmaceutical Co., Ltd....................................... 198,791
13,000 Eisai Co., Ltd........................................................ 400,147
10,000 Kyowa Hakko Kogyo Co., Ltd............................................ 79,974
13,000 Shionogi & Co., Ltd................................................... 253,664
42,000 Taisho Pharmaceutical Co., Ltd........................................ 1,208,135
40,000 Yamanouchi Pharmaceutical Co., Ltd.................................... 1,810,187
------------
4,544,705
------------
PROPERTY - CASUALTY INSURERS
6,000 Mitsui Marine & Fire Insurance Co., Ltd............................... 30,451
4,000 Sumitomo Marine & Fire Insurance Co., Ltd. (The)...................... 24,405
112,000 Tokio Marine & Fire Insurance Co...................................... 1,237,376
------------
1,292,232
------------
PUBLISHING: BOOKS/MAGAZINES
100 Kadokawa Shoten Publishing Co., Ltd................................... 3,280
100 Kadokawa Shoten Publishing Co., Ltd. (New) (Rights)................... 3,298
------------
6,578
------------
PULP & PAPER
11,000 Nippon Paper Industries Co., Ltd...................................... 62,679
141,000 Oji Paper Co. Ltd..................................................... 820,218
------------
882,897
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2000, CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
RAILROADS
152 Central Japan Railway Co.............................................. $ 925,980
345 East Japan Railway Co.+............................................... 1,981,632
119,000 Kinki Nippon Railway Co............................................... 515,638
73,000 Tobu Railway Co., Ltd................................................. 215,335
79,000 Tokyu Corp............................................................ 408,171
------------
4,046,756
------------
REAL ESTATE DEVELOPMENT
70,000 Mitsubishi Estate Co., Ltd............................................ 743,862
45,000 Mitsui Fudosan Co., Ltd............................................... 544,980
------------
1,288,842
------------
RECREATIONAL PRODUCTS
46,000 Fuji Photo Film Co., Ltd.+............................................ 1,706,669
9,600 Nintendo Co., Ltd..................................................... 1,587,395
13,000 Sega Enterprises Ltd.*................................................ 92,296
10,200 Shimano, Inc.......................................................... 205,103
------------
3,591,463
------------
REGIONAL BANKS
3,000 77 Bank, Ltd. (The)................................................... 22,206
42,000 Chuo Mitsui Trust & Banking Co., Ltd. (The)........................... 128,124
18,000 Gunma Bank Ltd. (The)................................................. 91,517
------------
241,847
------------
RESTAURANTS
19,000 Skylark Co., Ltd...................................................... 670,117
------------
SEMICONDUCTORS
4,800 Rohm Co., Ltd......................................................... 1,209,674
------------
STEEL
121,400 Kawasaki Steel Corp................................................... 118,998
573,000 Nippon Steel Co....................................................... 929,104
45,000 Sumitomo Metal Industries, Ltd.*...................................... 24,734
------------
1,072,836
------------
TEXTILES
76,000 Teijin Ltd............................................................ 343,935
85,000 Toray Industries Inc.................................................. 330,936
------------
674,871
------------
TOBACCO
116 Japan Tobacco, Inc.................................................... 796,995
------------
TRUCKS/CONSTRUCTION/FARM MACHINERY
115,000 Komatsu Ltd........................................................... 509,894
5,600 SMC Corporation....................................................... 792,085
------------
1,301,979
------------
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
WHOLESALE DISTRIBUTORS
5,000 Itochu Corp........................................................... $ 21,299
8,000 Marubeni Corporation.................................................. 18,688
23,000 Mitsubishi Corp....................................................... 189,630
25,000 Mitsui & Co........................................................... 166,041
14,000 Sumitomo Corporation.................................................. 123,122
600 World Co., Ltd........................................................ 22,316
------------
541,096
------------
TOTAL JAPAN........................................................... 127,250,595
------------
NETHERLANDS (5.8%)
AIR FREIGHT/COURIERS
43,087 TNT Post Group NV..................................................... 913,166
------------
BEVERAGES: ALCOHOLIC
62,030 Heineken NV+.......................................................... 3,370,859
------------
ELECTRONIC EQUIPMENT/INSTRUMENTS
114,027 Koninklijke (Royal) Philips Electronics NV+........................... 4,483,749
1,922 OCE NV................................................................ 28,641
------------
4,512,390
------------
ELECTRONIC PRODUCTION EQUIPMENT
2,269 ASM Lithography Holding NV*........................................... 62,056
------------
FINANCIAL CONGLOMERATES
87,089 ING Groep NV.......................................................... 5,983,813
------------
FINANCIAL PUBLISHING/SERVICES
58,780 Elsevier NV........................................................... 751,147
24,966 Wolters Kluwer NV..................................................... 562,188
------------
1,313,335
------------
FOOD RETAIL
58,199 Koninklijke Ahold NV.................................................. 1,691,536
------------
FOOD: MAJOR DIVERSIFIED
113,120 Unilever NV........................................................... 5,676,566
------------
INDUSTRIAL SPECIALTIES
12,192 Akzo Nobel NV......................................................... 555,397
------------
INFORMATION TECHNOLOGY SERVICES
12,114 Getronics NV.......................................................... 136,290
------------
INTEGRATED OIL
226,786 Royal Dutch Petroleum Co.............................................. 13,458,297
------------
LIFE/HEALTH INSURANCE
106,015 Aegon N.V. +.......................................................... 4,212,811
------------
MAJOR BANKS
66,244 ABN-AMRO Holding NV+.................................................. 1,535,564
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
14
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2000, CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
MAJOR TELECOMMUNICATIONS
144 Koninklijke (Royal) Kpn NV............................................ $ 2,919
------------
PERSONNEL SERVICES
8,887 Vedior NV............................................................. 132,432
------------
REAL ESTATE DEVELOPMENT
17,200 Rodamco Continental Europe NV......................................... 617,771
25,885 Uni-Invest NV......................................................... 248,362
------------
866,133
------------
WHOLESALE DISTRIBUTORS
7,306 Buhrmann NV........................................................... 199,754
9,643 Hagemeyer NV.......................................................... 228,032
------------
427,786
------------
TOTAL NETHERLANDS..................................................... 44,851,350
------------
NORWAY (0.0%)
FOOD: SPECIALTY/CANDY
13,400 Orkla ASA............................................................. 241,630
------------
PORTUGAL (0.3%)
ELECTRIC UTILITIES
383,765 Electricidade de Portugal, S.A........................................ 1,042,735
------------
FOOD RETAIL
8,898 Jeronimo Martins SGPS, S.A............................................ 85,828
------------
INVESTMENT BANKS/BROKERS
53,030 Banco SGPS S.A. (Rights).............................................. 59,887
53,030 BPI-SGPS, S.A. (Registered Shares).................................... 172,456
------------
232,343
------------
OTHER TRANSPORTATION
33,885 Brisa-Auto Estradas de Portugal, S.A.................................. 262,111
------------
PULP & PAPER
10,383 Portucel Industrial Empresa........................................... 58,540
------------
REGIONAL BANKS
65,530 Banco Comercial Portugues, S.A........................................ 327,729
10,252 Banco Espirito Santo e Comercial de Lisboa, S.A. (Registered Shares).. 155,819
------------
483,548
------------
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
SPECIALTY STORES
104,360 Sonae, SGPA S.A....................................................... $ 126,715
------------
TELECOMMUNICATIONS
21,042 Portugal Telecom, S.A. (Registered Shares)............................ 187,601
------------
TOTAL PORTUGAL........................................................ 2,479,421
------------
SINGAPORE (1.9%)
AEROSPACE & DEFENSE
669,000 Singapore Technologies Engineering Ltd................................ 1,078,663
------------
AIRLINES
256,000 Singapore Airlines Ltd................................................ 2,567,001
------------
BEVERAGES: ALCOHOLIC
72,000 Fraser & Neave Ltd.................................................... 250,228
------------
COMPUTER PERIPHERALS
5,000 Creative Technology, Ltd.............................................. 81,187
------------
ELECTRONIC COMPONENTS
13,000 Venture Manufacturing Ltd............................................. 125,912
------------
ENGINEERING & CONSTRUCTION
409,000 Sembcorp Industries Ltd............................................... 393,807
------------
FINANCIAL CONGLOMERATES
183,000 Keppel Corp., Ltd..................................................... 364,916
------------
HOSPITAL/NURSING MANAGEMENT
97,000 Parkway Holdings Ltd.................................................. 198,952
------------
HOTELS/RESORTS/CRUISELINES
192,000 Hotel Properties Ltd.................................................. 164,084
162,000 United Overseas Land, Ltd............................................. 143,061
------------
307,145
------------
MAJOR BANKS
262,115 DBS Group Holdings Ltd................................................ 3,091,260
------------
MAJOR TELECOMMUNICATIONS
109,100 Singapore Telecommunications Ltd...................................... 180,880
------------
MARINE SHIPPING
146,000 Neptune Orient Lines Ltd.*............................................ 123,940
------------
PUBLISHING: NEWSPAPERS
83,000 Singapore Press Holdings Ltd.......................................... 1,186,930
------------
REAL ESTATE DEVELOPMENT
157,000 City Developments Ltd................................................. 724,533
301,750 DBS Land Ltd.......................................................... 459,020
66,000 First Capital Corporation Ltd......................................... 53,396
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
15
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2000, CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
352,000 United Industrial Corp................................................ $ 162,443
------------
1,399,392
------------
REGIONAL BANKS
263,950 Overseas - Chinese Banking Corp., Ltd................................. 1,684,275
210,104 United Overseas Bank Ltd.............................................. 1,556,149
------------
3,240,424
------------
SPECIALTY STORES
63,000 Cycle and Carriage Ltd................................................ 114,859
------------
TOTAL SINGAPORE....................................................... 14,705,496
------------
SPAIN (2.1%)
BUILDING PRODUCTS
4,506 Zardoya Otis S.A...................................................... 34,243
------------
ELECTRIC UTILITIES
106,340 Endesa S.A.+.......................................................... 1,733,631
102,348 Iberdrola S.A......................................................... 1,252,282
33,683 Union Electrica Fenosa, S.A........................................... 623,199
------------
3,609,112
------------
ENGINEERING & CONSTRUCTION
5,599 ACS, Actividades de Construccion y Servicios, S.A..................... 122,608
8,524 Fomento de Construcciones y Contratas S.A............................. 156,697
13,521 Grupo Dragados, S.A................................................... 131,454
------------
410,759
------------
FOOD: SPECIALTY/CANDY
2,973 Azucarera Ebro Agricolas, S.A......................................... 36,225
------------
GAS DISTRIBUTORS
46,281 Gas Natural SDG, S.A.................................................. 793,803
------------
HOTELS/RESORTS/CRUISELINES
8,922 Sol Melia S.A......................................................... 81,666
------------
MAJOR BANKS
232,464 Banco Bilbao Vizcaya Argentaria, S.A.+................................ 3,098,947
213,780 Banco Santander Central Hispano, S.A.+................................ 2,072,965
------------
5,171,912
------------
MAJOR TELECOMMUNICATIONS
49,790 Telefonica S.A.*...................................................... 949,957
------------
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
OIL REFINING/MARKETING
131,584 Repsol-YPF, S.A....................................................... $ 2,091,548
------------
OTHER TRANSPORTATION
24,178 Autopistas Concesionaria Espanola S.A................................. 183,945
------------
PROPERTY - CASUALTY INSURERS
6,856 Corporacion Mapfre S.A................................................ 120,795
------------
REAL ESTATE DEVELOPMENT
6,792 Corporacion Financiera Alba, S.A...................................... 173,013
26,420 Inmobiliaria Colonial, S.A............................................ 314,514
28,983 Metrovacesa S.A....................................................... 392,275
26,470 Prima Inmobiliaria, S.A.*............................................. 250,379
111,430 Vallehermoso S.A...................................................... 631,083
------------
1,761,264
------------
RESTAURANTS
20,667 TelePizza, S.A.*...................................................... 79,143
------------
STEEL
4,740 Acerinox S.A.......................................................... 131,971
------------
TOBACCO
22,074 Altadis, S.A.......................................................... 330,815
------------
WATER UTILITIES
16,442 Sociedad General de Aguas de Barcelona, S.A........................... 202,433
------------
TOTAL SPAIN........................................................... 15,989,591
------------
SWEDEN (2.1%)
APPAREL/FOOTWEAR RETAIL
80,800 Hennes & Mauritz AB (B Shares)........................................ 1,510,809
------------
CONTAINERS/PACKAGING
2,548 Assidoman............................................................. 43,184
------------
ELECTRONICS/APPLIANCES
30,400 Electrolux AB (Series B).............................................. 383,002
------------
ENGINEERING & CONSTRUCTION
19,400 JM AB (B Shares)...................................................... 442,276
12,600 Skanska AB (B Shares)................................................. 498,910
------------
941,186
------------
HOUSEHOLD/PERSONAL CARE
27,387 Svenska Cellulosa AB (B Shares)....................................... 561,377
------------
INDUSTRIAL MACHINERY
12,700 Atlas Copco AB (A Shares)............................................. 269,213
6,700 Atlas Copco AB (B Shares)............................................. 138,341
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
16
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2000, CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
27,600 Sandvik AB (B Shares)................................................. $ 608,519
------------
1,016,073
------------
INFORMATION TECHNOLOGY SERVICES
35,000 WM-Data AB (B Shares)................................................. 121,788
------------
INVESTMENT BANKS/BROKERS
7,300 OM Gruppen AB......................................................... 260,584
------------
LIFE/HEALTH INSURANCE
101,800 Skandia Forsakrings AB................................................ 1,725,338
------------
MAJOR BANKS
27,900 ForeningsSparbanken AB................................................ 400,325
31,700 Skandinaviska Enskilda Banken......................................... 374,023
34,100 Svenska Handelsbanken AB (A Shares)................................... 535,317
------------
1,309,665
------------
MAJOR TELECOMMUNICATIONS
2,060 NetCom AB (B Shares)*................................................. 96,604
------------
METAL FABRICATIONS
8,600 SKF AB (B Shares)..................................................... 127,697
------------
MISCELLANEOUS COMMERCIAL SERVICES
38,700 Securitas AB (Series "B" Free)........................................ 824,228
------------
MISCELLANEOUS MANUFACTURING
14,400 Trelleborg AB (Series B).............................................. 80,632
------------
REAL ESTATE DEVELOPMENT
54,160 Castellum AB.......................................................... 576,746
56,445 Drott AB (B Shares)................................................... 663,162
29,600 Wihlborgs Fastigheter AB (B Shares)................................... 42,324
------------
1,282,232
------------
REGIONAL BANKS
58,006 Nordic Baltic Holding AB.............................................. 438,351
------------
STEEL
8,200 SSAB Svenskt Stal AB (Series A)....................................... 66,413
------------
TELECOMMUNICATION EQUIPMENT
368,100 Telefonaktiebolaget LM Ericsson AB (Series "B" Free).................. 4,895,241
------------
TOBACCO
28,800 Swedish Match AB...................................................... 98,774
------------
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
TRUCKS/CONSTRUCTION/FARM MACHINERY
6,000 Volvo AB (A Shares)................................................... $ 89,991
22,500 Volvo AB (B Shares)................................................... 346,465
------------
436,456
------------
TOTAL SWEDEN.......................................................... 16,219,634
------------
SWITZERLAND (7.7%)
AIRLINES
1,210 SAirGroup............................................................. 163,550
------------
CONSTRUCTION MATERIALS
780 Holderbank Financiere Glarus AG (B Shares)............................ 819,568
400 Holderbank Financiere Glarus AG (Registered Shares)................... 117,700
------------
937,268
------------
FOOD: MAJOR DIVERSIFIED
8,205 Nestle S.A. (Registered Shares)+...................................... 17,000,570
------------
HOUSEHOLD/PERSONAL CARE
746 Givaudan (Registered Shares)*......................................... 178,844
------------
INDUSTRIAL CONGLOMERATES
32,200 ABB Ltd.+............................................................. 2,861,247
410 Sulzer AG (Registered Shares)......................................... 264,774
------------
3,126,021
------------
MAJOR BANKS
14,300 Credit Suisse Group (Registered Shares)+.............................. 2,680,554
22,260 UBS AG (Registered Shares)+........................................... 3,083,068
------------
5,763,622
------------
MAJOR TELECOMMUNICATIONS
3,770 Swisscom AG (Registered Shares)+...................................... 957,284
------------
METAL FABRICATIONS
240 Georg Fischer AG (Registered Shares).................................. 65,146
------------
MULTI-LINE INSURANCE
8,318 Zurich Financial Services AG+......................................... 4,025,287
------------
OTHER CONSUMER SPECIALTIES
550 The Swatch Group AG................................................... 728,112
700 The Swatch Group AG (Registered Shares)............................... 190,399
------------
918,511
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2000, CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
PERSONNEL SERVICES
2,010 Adecco S.A. (Registered Shares)....................................... $ 1,389,715
------------
PHARMACEUTICALS: MAJOR
8,035 Novartis AG (Registered Shares)+...................................... 12,187,921
854 Roche Holdings AG+.................................................... 7,799,911
178 Roche Holdings AG - Bearer+........................................... 1,923,267
------------
21,911,099
------------
PROPERTY - CASUALTY INSURERS
1,590 Schweizerische Rueckversicherungs-Gesellschaft (Registered Shares)+... 3,135,249
------------
SPECIALTY STORES
480 Valora Holding AG..................................................... 97,586
------------
TOTAL SWITZERLAND..................................................... 59,669,752
------------
UNITED KINGDOM (20.1%)
ADVERTISING/MARKETING SERVICES
82,366 WPP Group PLC......................................................... 1,104,963
------------
AEROSPACE & DEFENSE
291,960 BAE Systems PLC....................................................... 1,657,727
138,948 Marconi PLC........................................................... 1,753,192
------------
3,410,919
------------
AIRLINES
153,107 British Airways PLC................................................... 683,917
------------
AUTO PARTS: O.E.M.
142,936 GKN PLC............................................................... 1,637,671
------------
BEVERAGES: ALCOHOLIC
115,032 Bass PLC.............................................................. 1,125,275
507,971 Diageo PLC............................................................ 4,792,301
------------
5,917,576
------------
BUILDING PRODUCTS
3,964 Caradon PLC........................................................... 10,923
------------
CABLE/SATELLITE TV
166,887 British Sky Broadcasting Group PLC*................................... 2,408,260
------------
CASINO/GAMING
218,025 Hilton Group PLC...................................................... 605,526
------------
CATALOG/SPECIALTY DISTRIBUTION
112,955 Great Universal Stores PLC............................................ 779,777
------------
CHEMICALS: MAJOR DIVERSIFIED
138,961 Imperial Chemicals Industries PLC..................................... 850,478
------------
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
CHEMICALS: SPECIALTY
64,603 Boc Group PLC......................................................... $ 899,460
------------
COMPUTER PROCESSING HARDWARE
7,322 Psion PLC............................................................. 44,282
------------
CONSTRUCTION MATERIALS
2,652 Hanson PLC............................................................ 13,981
------------
DEPARTMENT STORES
290,358 Marks & Spencer, PLC.................................................. 808,524
------------
DRUGSTORE CHAINS
78,638 Boots Co. PLC......................................................... 627,268
------------
ELECTRIC UTILITIES
143,472 National Grid Group PLC............................................... 1,243,263
76,753 National Power PLC.................................................... 309,455
178,763 Scottish Power PLC.................................................... 1,341,670
73,306 United Utilities PLC.................................................. 736,768
------------
3,631,156
------------
ELECTRONIC EQUIPMENT/INSTRUMENTS
430,153 Invensys PLC.......................................................... 1,026,235
------------
ELECTRONICS/APPLIANCE STORES
175,334 New Dixons Group PLC.................................................. 521,288
------------
ENGINEERING & CONSTRUCTION
2,739 Balfour Beatty PLC.................................................... 4,648
2,699 Taylor Woodrow PLC.................................................... 7,046
------------
11,694
------------
FINANCIAL CONGLOMERATES
81,354 Abbey National PLC+................................................... 1,122,063
532,657 HSBC Holdings PLC..................................................... 7,586,072
300,959 Lloyds TSB Group PLC.................................................. 3,064,096
------------
11,772,231
------------
FINANCIAL PUBLISHING/SERVICES
137,883 Reuters Group PLC..................................................... 2,683,620
------------
FOOD RETAIL
184,002 Sainsbury (J.) PLC.................................................... 1,033,408
674,590 Tesco PLC............................................................. 2,570,635
------------
3,604,043
------------
FOOD: MAJOR DIVERSIFIED
427,841 Unilever PLC.......................................................... 2,893,071
------------
FOOD: SPECIALTY/CANDY
287,769 Cadbury Schweppes PLC................................................. 1,777,917
34,945 Tate & Lyle PLC....................................................... 111,751
------------
1,889,668
------------
GAS DISTRIBUTORS
362,468 Centrica PLC.......................................................... 1,245,879
------------
INDUSTRIAL SPECIALTIES
7,243 Pilkington PLC........................................................ 10,321
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2000, CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
INFORMATION TECHNOLOGY SERVICES
35,362 Logica PlC............................................................ $ 1,045,712
64,536 Misys PLC............................................................. 672,023
40,237 SEMA Group PLC........................................................ 507,695
------------
2,225,430
------------
INTEGRATED OIL
2,889,122 BP Amoco PLC.......................................................... 24,491,097
------------
INVESTMENT BANKS/BROKERS
26,709 Schroders PLC......................................................... 483,039
------------
INVESTMENT MANAGERS
70,719 Amvescap PLC.......................................................... 1,579,482
------------
INVESTMENT TRUSTS/MUTUAL FUNDS
74,421 3i Group PLC.......................................................... 1,689,148
------------
LIFE/HEALTH INSURANCE
177,091 Prudential Corp....................................................... 2,380,861
------------
MAJOR BANKS
111,420 Barclays PLC.......................................................... 3,186,603
133,171 Halifax PLC........................................................... 1,046,807
140,030 Royal Bank of Scotland Group PLC...................................... 3,141,733
------------
7,375,143
------------
MAJOR TELECOMMUNICATIONS
579,748 British Telecommunications PLC........................................ 6,793,733
------------
MARINE SHIPPING
60,817 Peninsular & Orient Princess Cruises.................................. 238,809
60,817 Peninsular & Orient Steam Navigation Co............................... 250,496
------------
489,305
------------
MEDICAL SPECIALTIES
67,264 Nycomed Amersham PLC.................................................. 601,902
41,657 Smith & Nephew PLC.................................................... 170,975
------------
772,877
------------
MISCELLANEOUS COMMERCIAL SERVICES
93,804 Capita Group PLC...................................................... 714,231
178,839 Hays PLC.............................................................. 975,880
197,045 Rentokil Initial PLC.................................................. 454,381
------------
2,144,492
------------
MISCELLANEOUS MANUFACTURING
2,453 TI Group PLC.......................................................... 13,234
------------
MOVIES/ENTERTAINMENT
70,121 Carlton Communications PLC............................................ 564,416
76,206 Emi Group PLC......................................................... 570,291
3,486 Rank Group PLC........................................................ 8,645
------------
1,143,352
------------
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
MULTI-LINE INSURANCE
217,828 CGU PLC............................................................... $ 2,912,745
541,681 Legal & General Group PLC............................................. 1,347,304
------------
4,260,049
------------
OIL & GAS PIPELINES
381,113 BG Group PLC.......................................................... 1,525,530
381,113 Lattice Group PLC*.................................................... 812,510
------------
2,338,040
------------
OIL & GAS PRODUCTION
8,472 LASMO PLC............................................................. 18,000
------------
OTHER METALS/MINERALS
115,344 Rio Tinto PLC (Registered Shares)..................................... 1,865,210
------------
OTHER TRANSPORTATION
111,922 British Airport Authority PLC......................................... 930,096
------------
PACKAGED SOFTWARE
118,585 Sage Group (The) PLC.................................................. 865,079
------------
PHARMACEUTICALS: MAJOR
152,867 AstraZeneca Group PLC+................................................ 7,156,573
313,701 Glaxo Wellcome PLC.................................................... 9,026,418
485,991 SmithKline Beecham PLC................................................ 6,273,011
------------
22,456,002
------------
PUBLISHING: BOOKS/MAGAZINES
53,116 Pearson PLC........................................................... 1,424,361
98,301 Reed International PLC................................................ 908,145
------------
2,332,506
------------
PULP & PAPER
2,592 Rexam PLC............................................................. 8,759
------------
RAILROADS
46,596 Railtrack Group PLC................................................... 720,383
------------
REAL ESTATE DEVELOPMENT
194,500 British Land Company PLC.............................................. 1,162,183
129,700 Burford Holdings PLC.................................................. 186,223
31,041 Canary Wharf Finance PLC*............................................. 242,201
51,545 Chelsfied PLC......................................................... 272,858
116,550 Grantchester Holdings PLC............................................. 309,329
71,466 Great Port Land Estate PLC............................................ 266,632
65,960 Hammerson PLC......................................................... 390,539
120,097 Land Securities PLC................................................... 1,236,654
99,726 Slough Estates PLC.................................................... 533,694
------------
4,600,313
------------
RESTAURANTS
251,669 Granada Compass PLC*.................................................. 2,168,074
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2000, CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
SEMICONDUCTORS
86,632 ARM Holdings PLC*..................................................... $ 854,368
------------
SPECIALTY STORES
134,968 Kingfisher PLC........................................................ 806,466
------------
STEEL
5,500 Corus Group PLC....................................................... 4,946
------------
TOBACCO
332,075 British American Tobacco PLC.......................................... 2,326,168
------------
WATER UTILITIES
498 AWG PLC*.............................................................. 4,305
154,380 AWG PLC (Register Shares)*............................................ 134
2,675 Thames Water PLC...................................................... 46,865
------------
51,304
------------
WIRELESS COMMUNICATIONS
2,172,697 Vodafone AirTouch PLC................................................. 9,035,672
------------
TOTAL UNITED KINGDOM.................................................. 156,315,359
------------
TOTAL COMMON AND PREFERRED STOCKS, RIGHTS AND WARRANTS
(COST $669,096,014)................................................... 629,651,837
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
----------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENT (a) (20.1%)
U.S. GOVERNMENT AGENCY
$ 156,000 Student Loan Mortgage Assoc. 6.45% due 11/01/00
(COST $156,000,000)................................................. $156,000,000
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(COST $825,096,014) (B)................................................................... 101.2% 785,651,837
LIABILITIES IN EXCESS OF OTHER ASSETS..................................................... (1.2) (9,636,753)
----- -------------
NET ASSETS................................................................................ 100.0% $ 776,015,084
----- -------------
----- -------------
</TABLE>
---------------------
ADR American Depository Receipt.
GDR Global Depository Receipt.
+ Some or all of these securities are segregated in connection with open
forward foreign currency contracts.
++ Consists of one or more class of securities traded together as unit; stock
with attached warrants.
* Non-income producing security.
(a) Purchased on a discount basis. The interest rate shown has been adjusted to
reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates the
aggregate cost for book purposes. The aggregate gross unrealized
appreciation is $32,102,479 and the aggregate gross unrealized depreciation
is $71,546,656, resulting in net unrealized depreciation of $39,444,177.
FUTURES CONTRACTS OPEN AT OCTOBER, 31, 2000:
<TABLE>
<CAPTION>
NUMBER OF DESCRIPTION, DELIVERY MONTH, UNDERLYING FACE UNREALIZED
CONTRACTS LONG/SHORT AND YEAR AMOUNT AT VALUE GAIN/LOSS
-------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
72 Long FTSE 100 December/2000 $ 6,971,685 $ (186,082)
391 Long TSE TOPIX December/2000 52,832,997 (3,438,622)
43 Long MIB 30 INDEX December/2000 8,848,514 (109,534)
52 Long EURX DAX INDEX December/2000 8,144,949 (281,264)
76 Long MTF CAC40 10EU December/2000 4,110,018 56,465
123 Long IBEX 35 Plus November/2000 10,741,419 122,880
-----------
Net unrealized loss.................................................... $(3,836,157)
===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2000, CONTINUED
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT OCTOBER 31, 2000:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS IN EXCHANGE DELIVERY APPRECIATION
TO DELIVER FOR DATE (DEPRECIATION)
---------------------------------------------------------------------
<S> <C> <C> <C>
$ 24,402 EUR 28,923 11/1/00 $ 156
$ 82,026 SEK 824,357 11/1/00 402
$ 4,776,589 CHF 8,627,570 11/2/00 22,371
$ 213,623 DKK 1,885,738 11/2/00 1,518
$ 3,496,070 EUR 4,145,947 11/2/00 24,254
$ 684,118 GBP 477,703 11/2/00 8,694
$ 236,002 NOK 2,214,787 11/2/00 2,430
$ 94,089 SEK 946,841 11/2/00 585
$ 74,160 DKK 649,830 11/3/00 (22)
$ 374,342 EUR 443,912 11/3/00 2,584
$ 4,445,548 EUR 5,235,939 11/3/00 288
$ 155,990 SEK 1,559,086 11/3/00 (97)
$ 7,160 EUR 8,432 11/6/00 (1)
$ 4,535,578 GBP 3,122,730 11/6/00 (6,683)
$ 32,750 EUR 38,566 11/7/00 (4)
$ 423,079 GBP 291,648 11/7/00 (102)
$ 34,803,709 EUR 39,806,375 12/8/00 (944,672)
EUR 19,686,000 $ 17,209,993 12/8/00 465,213
$ 2,802,758 EUR 3,207,000 12/8/00 (74,905)
$ 1,822,018 EUR 2,084,880 12/8/00 (48,633)
$ 7,721,194 EUR 8,896,000 12/8/00 (154,316)
$ 6,774,930 GBP 4,708,000 12/8/00 58,230
$ 36,584,271 JPY 3,794,996,143 12/8/00 (1,577,665)
$ 27,269,146 JPY 2,822,629,334 12/8/00 (1,232,052)
JPY 949,635,000 $ 8,991,053 12/8/00 231,231
-----------
Net unrealized depreciation................... $(3,221,196)
===========
</TABLE>
CURRENCY ABBREVIATIONS:
------------------------
<TABLE>
<S> <C>
GBP British Pound.
DKK Danish Krone.
EUR Euro.
JPY Japanese Yen.
NOK Norwegian Krone.
SEK Swedish Krona.
CHF Swiss Franc.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
21
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
SUMMARY OF INVESTMENTS OCTOBER 31, 2000
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Advertising/Marketing Services....................................................
$ 1,104,963 0.1%
Aerospace & Defense............................................................... 5,114,697 0.7
Agricultural Commodities/Milling.................................................. 341,597 0.0
Air Freight/Couriers.............................................................. 1,488,941 0.2
Airlines.......................................................................... 4,379,455 0.6
Apparel/Footwear.................................................................. 357,004 0.1
Apparel/Footwear Retail........................................................... 1,525,979 0.2
Auto Parts: O.E.M................................................................. 3,777,771 0.5
Automotive Aftermarket............................................................ 904,746 0.1
Beverages: Alcoholic.............................................................. 15,704,826 2.0
Beverages: Non-Alcoholic.......................................................... 96,470 0.0
Broadcasting...................................................................... 1,968,143 0.3
Building Products................................................................. 741,312 0.1
Cable/Satellite TV................................................................ 3,903,026 0.5
Casino/Gaming..................................................................... 734,475 0.1
Catalog/Specialty Distribution.................................................... 779,777 0.1
Chemicals: Major Diversified...................................................... 7,677,191 1.0
Chemicals: Specialty.............................................................. 4,124,791 0.5
Commercial Printing/Forms......................................................... 1,584,261 0.2
Computer Peripherals.............................................................. 81,187 0.0
Computer Processing Hardware...................................................... 1,914,198 0.2
Construction Materials............................................................ 2,121,224 0.3
Containers/Packaging.............................................................. 1,718,619 0.2
Data Processing Services.......................................................... 14,456 0.0
Department Stores................................................................. 1,581,998 0.2
Drugstore Chains.................................................................. 627,268 0.1
Electric Utilities................................................................ 18,299,196 2.4
Electrical Products............................................................... 5,298,686 0.7
Electronic Components............................................................. 1,763,252 0.2
Electronic Distributors........................................................... 960,059 0.1
Electronic Equipment/Instruments.................................................. 15,282,779 2.0
Electronic Production Equipment................................................... 1,409,042 0.2
Electronics/Appliance Stores...................................................... 521,288 0.1
Electronics/Appliances............................................................ 6,263,343 0.8
Engineering & Construction........................................................ 6,228,389 0.8
Finance/Rental/Leasing............................................................ 2,893,367 0.4
Financial Conglomerates........................................................... 18,120,960 2.3
Financial Publishing/Services..................................................... 3,996,955 0.5
Fluid Controls.................................................................... 698,745 0.1
Food Retail....................................................................... 12,706,274 1.6
Food: Major Diversified........................................................... 29,327,093 3.8
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Food: Meat/Fish/Dairy............................................................. $ 671,944 0.1%
Food: Specialty/Candy............................................................. 3,517,953 0.5
Gas Distributors.................................................................. 3,963,424 0.5
Home Building..................................................................... 1,164,813 0.2
Hospital/Nursing Management....................................................... 198,952 0.0
Hotels/Resorts/Cruiselines........................................................ 1,056,867 0.1
Household/Personal Care........................................................... 8,648,159 1.1
Industrial Conglomerates.......................................................... 24,527,898 3.2
Industrial Machinery.............................................................. 4,656,197 0.6
Industrial Specialties............................................................ 2,363,519 0.3
Information Technology Services................................................... 4,008,456 0.5
Integrated Oil.................................................................... 45,432,953 5.9
Investment Banks/Brokers.......................................................... 4,813,608 0.6
Investment Managers............................................................... 1,579,482 0.2
Investment Trusts/Mutual Funds.................................................... 1,689,148 0.2
Life/Health Insurance............................................................. 11,529,091 1.5
Major Banks....................................................................... 51,865,213 6.7
Major Telecommunications.......................................................... 16,895,970 2.2
Marine Shipping................................................................... 1,176,089 0.2
Media Conglomerates............................................................... 2,522,432 0.3
Medical Distributors.............................................................. 150,465 0.0
Medical Specialties............................................................... 1,569,885 0.2
Medical/Nursing Services.......................................................... 642,514 0.1
Metal Fabrications................................................................ 694,535 0.1
Miscellaneous Commercial Services................................................. 4,949,225 0.6
Miscellaneous Manufacturing....................................................... 2,535,696 0.3
Motor Vehicles.................................................................... 14,952,747 1.9
Movies/Entertainment.............................................................. 4,773,119 0.6
Multi-Line Insurance.............................................................. 25,899,891 3.3
Oil & Gas Pipelines............................................................... 2,338,040 0.3
Oil & Gas Production.............................................................. 243,354 0.0
Oil Refining/Marketing............................................................ 16,682,958 2.1
Oilfield Services/Equipment....................................................... 275,615 0.0
Other Consumer Services........................................................... 1,218,301 0.2
Other Consumer Specialties........................................................ 1,114,659 0.1
Other Metals/Minerals............................................................. 4,438,224 0.6
Other Transportation.............................................................. 1,425,905 0.2
Packaged Software................................................................. 7,159,972 0.9
Personnel Services................................................................ 1,522,147 0.2
Pharmaceuticals: Major............................................................ 61,922,405 8.0
Pharmaceuticals: Other............................................................ 4,787,629 0.6
Precious Metals................................................................... 58,990 0.0
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
22
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
SUMMARY OF INVESTMENTS OCTOBER 31, 2000, CONTINUED
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Property - Casualty Insurers...................................................... $ 5,156,909 0.7%
Publishing: Books/Magazines....................................................... 3,045,281 0.4
Publishing: Newspapers............................................................ 1,186,930 0.2
Pulp & Paper...................................................................... 1,959,550 0.3
Railroads......................................................................... 4,767,139 0.6
Real Estate Development........................................................... 17,290,139 2.2
Recreational Products............................................................. 3,591,463 0.5
Regional Banks.................................................................... 6,483,295 0.8
Restaurants....................................................................... 3,144,480 0.4
Semiconductors.................................................................... 3,144,444 0.4
Specialty Stores.................................................................. 4,205,788 0.5
Specialty Telecommunications...................................................... 1,643,655 0.2
Steel............................................................................. 1,587,334 0.2
Telecommunication Equipment....................................................... 10,917,541 1.4
Telecommunications................................................................ 187,601 0.0
Textiles.......................................................................... 674,871 0.1
Tobacco........................................................................... 3,843,722 0.5
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Trucks/Construction/Farm Machinery................................................ $ 1,855,027 0.2%
U.S. Government Agency............................................................ 156,000,000 20.1
Water Utilities................................................................... 253,737 0.1
Wholesale Distributors............................................................ 1,742,374 0.2
Wireless Communications........................................................... 13,194,310 1.7
------------ -----
$785,651,837 101.2%
------------ -----
------------ -----
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks..................................................................... $619,866,583 79.9%
Preferred Stocks.................................................................. 9,713,232 1.2
Rights............................................................................ 63,185 0.0
Short-Term Investment............................................................. 156,000,000 20.1
Warrants.......................................................................... 8,837 0.0
------------ -----
$785,651,837 101.2%
------------ -----
------------ -----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
23
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 2000
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost $825,096,014)....................................... $785,651,837
Cash (including $204,934 in foreign currency and $11,990,371 segregated in connection with
open futures contracts)..................................................................... 13,676,786
Receivable for:
Shares of beneficial interest sold........................................................ 6,436,505
Dividends................................................................................. 572,688
Foreign withholding taxes reclaimed....................................................... 451,534
Prepaid expenses and other assets............................................................. 81,370
------------
TOTAL ASSETS............................................................................. 806,870,720
------------
LIABILITIES:
Unrealized depreciation on forward foreign currency contracts................................. 3,221,196
Payable for:
Investments purchased..................................................................... 19,716,550
Variation margin on future contracts...................................................... 3,836,157
Shares of beneficial interest repurchased................................................. 2,629,116
Investment management fee................................................................. 679,031
Plan of distribution fee.................................................................. 563,890
Accrued expenses and other payables........................................................... 209,696
------------
TOTAL LIABILITIES........................................................................ 30,855,636
------------
NET ASSETS............................................................................... $776,015,084
============
COMPOSITION OF NET ASSETS:
Paid-in-capital............................................................................... $786,959,563
Net unrealized depreciation................................................................... (46,677,246)
Accumulated undistributed net investment income............................................... 3,001,759
Accumulated undistributed net realized gain................................................... 32,731,008
------------
NET ASSETS............................................................................... $776,015,084
============
CLASS A SHARES:
Net Assets.................................................................................... $46,534,548
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 4,522,012
NET ASSET VALUE PER SHARE................................................................ $10.29
============
MAXIMUM OFFERING PRICE PER SHARE,
(NET ASSET VALUE PLUS 5.54% OF NET ASSET VALUE)........................................ $10.86
============
CLASS B SHARES:
Net Assets.................................................................................... $561,374,970
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 55,087,343
NET ASSET VALUE PER SHARE................................................................ $10.19
============
CLASS C SHARES:
Net Assets.................................................................................... $69,640,182
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 6,833,673
NET ASSET VALUE PER SHARE................................................................ $10.19
============
CLASS D SHARES:
Net Assets.................................................................................... $98,465,384
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 9,538,299
NET ASSET VALUE PER SHARE................................................................ $10.32
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
24
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 2000
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Interest..................................................................................... $ 9,736,883
Dividends (net of $974,470 foreign withholding tax).......................................... 8,795,937
-------------
TOTAL INCOME............................................................................ 18,532,820
-------------
EXPENSES
Investment management fee.................................................................... 7,648,431
Plan of distribution fee (Class A shares).................................................... 115,305
Plan of distribution fee (Class B shares).................................................... 5,876,326
Plan of distribution fee (Class C shares).................................................... 785,100
Transfer agent fees and expenses............................................................. 842,975
Custodian fees............................................................................... 316,482
Registration fees............................................................................ 196,680
Shareholder reports and notices.............................................................. 105,931
Professional fees............................................................................ 77,740
Offering costs............................................................................... 72,374
Trustees' fees and expenses.................................................................. 11,111
Other........................................................................................ 70,020
-------------
TOTAL EXPENSES.......................................................................... 16,118,475
-------------
NET INVESTMENT INCOME:.................................................................. 2,414,345
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain/loss on:
Investments.............................................................................. 44,577,268
Futures contracts........................................................................ 4,806,665
Foreign exchange transactions............................................................ (14,172,451)
-------------
NET GAIN................................................................................ 35,211,482
-------------
Net change in unrealized appreciation/depreciation on:
Investments.............................................................................. (70,360,149)
Futures contracts........................................................................ (4,777,736)
Translation of forward foreign currency contracts, other assets and liabilities
denominated in foreign currencies...................................................... (3,738,062)
-------------
NET DEPRECIATION........................................................................ (78,875,947)
-------------
NET LOSS................................................................................ (43,664,465)
-------------
NET DECREASE................................................................................. $ (41,250,120)
=============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
25
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR JUNE 28, 1999*
ENDED THROUGH
OCTOBER 31, 2000 OCTOBER 31, 1999
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income (loss)............................................ $ 2,414,345 $ (687,252)
Net realized gain (loss)................................................ 35,211,482 (3,486,865)
Net change in unrealized appreciation................................... (78,875,947) 32,198,701
------------ ------------
NET INCREASE (DECREASE)............................................ (41,250,120) 28,024,584
------------ ------------
Net increase from transactions in shares of beneficial interest......... 242,353,999 546,786,621
------------ ------------
NET INCREASE....................................................... 201,103,879 574,811,205
NET ASSETS:
Beginning of period..................................................... 574,911,205 100,000
------------ ------------
END OF PERIOD
(INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF 3,001,759 AND A
NET INVESTMENT LOSS OF $646,146, RESPECTIVELY)...................... $776,015,084 $574,911,205
============ ============
</TABLE>
---------------------
* Commencement of operations.
SEE NOTES TO FINANCIAL STATEMENTS
26
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2000
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 others 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 portfolio security listed or traded
on the New York or American Stock Exchange, NASDAQ, or other 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
27
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2000, CONTINUED
the general supervision of the Trustees (valuation of debt securities for which
market quotations are not readily available may be based upon current market
prices of securities which are comparable in coupon, rating and maturity or an
appropriate matrix utilizing similar factors); and (4) short-term debt
securities having a maturity date of 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 requirement 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 ("forward 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
28
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2000, CONTINUED
gains and losses 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
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 tax purposes 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 were reimbursed for the
full amount thereof. Such expenses were deferred and were fully amortized as of
June 27, 2000.
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 1.0% to the net assets of the Fund determined as of the close of
each business day.
29
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2000, CONTINUED
Under a Sub-Advisory Agreement between the Sub-Advisor and the Investment
Manager, the Sub-Advisor provides the Fund with investment advice and portfolio
management relating to the Fund's investments in securities, subject to the
overall supervision of the Investment Manager. As compensation for its services
provided pursuant to the Sub-Advisory Agreement, the Investment Manager pays the
Sub-Advisor compensation equal to 40% of its monthly compensation.
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Morgan Stanley Dean Witter Distributors
Inc. (the "Distributor"), an affiliate of the Investment Manager and
Sub-Advisor. The Fund has adopted a Plan of Distribution (the "Plan") pursuant
to Rule 12b-1 under the Act. The Plan provides that the Fund will pay the
Distributor a fee which is accrued daily and paid monthly at the following
annual rates: (i) Class A -- up to 0.25% of the average daily net assets of
Class A; (ii) Class B -- 1.0% of the average daily net assets of Class B; and
(iii) Class C -- up to 1.0% of the average daily net assets of Class C.
In the case of Class B shares, provided that the Plan continues in effect, any
cumulative expenses incurred by the Distributor but not yet recovered may be
recovered through the payment of future distribution fees from the Fund pursuant
to the Plan and contingent deferred sales charges paid by investors upon
redemption of Class B shares. Although there is no legal obligation for the Fund
to pay expenses incurred in excess of payments made to the Distributor under the
Plan and the proceeds of contingent deferred sales charges paid by investors
upon redemption of shares, if for any reason the Plan is terminated, the
Trustees will consider at that time the manner in which to treat such expenses.
The Distributor has advised the Fund that such excess amounts totaled
$27,458,643 at October 31, 2000.
In the case of Class A shares and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 1.0% of the average daily
net assets of Class A or Class C, respectively, will not be reimbursed by the
Fund through payments in any subsequent year, except that expenses representing
a gross sales credit to Morgan Stanley Dean Witter Financial Advisors or other
selected broker-dealer representatives may be reimbursed in the subsequent
calendar year. For the year ended October 31, 2000, the distribution fee was
accrued for Class A shares and Class C shares at the annual rate of 0.25% and
1.0%, respectively.
The Distributor has informed the Fund that for the year ended October 31, 2000,
it received contingent deferred sales charges from certain redemptions of the
Fund's Class A shares, Class B
30
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2000, CONTINUED
shares and Class C shares of $10,799, $1,819,631, and $104,710, respectively and
received $187,515 in front-end sales charges from sales of the Fund's Class A
shares. The respective shareholders pay such charges which are not an expense of
the Fund.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the year ended October 31, 2000 aggregated
$665,427,287 and $506,849,177, respectively.
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, 2000,
the Fund had transfer agent fees and expenses payable of approximately $100.
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR JUNE 28, 1999*
ENDED THROUGH
OCTOBER 31, 2000 OCTOBER 31, 1999
--------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------- ----------- -------------
<S> <C> <C> <C> <C>
CLASS A
Sold............................................................. 14,921,256 $ 167,279,283 5,501,684 $ 55,679,553
Redeemed......................................................... (14,041,009) (157,908,926) (1,862,419) (19,164,117)
----------- ------------- ---------- ------------
Net increase - Class A........................................... 880,247 9,370,357 3,639,265 36,515,436
----------- ------------- ---------- ------------
CLASS B
Sold............................................................. 40,456,127 452,222,607 46,196,462 464,151,607
Redeemed......................................................... (29,483,811) (327,484,831) (2,083,935) (21,345,154)
----------- ------------- ---------- ------------
Net increase - Class B........................................... 10,972,316 124,737,776 44,112,527 442,806,453
----------- ------------- ---------- ------------
CLASS C
Sold............................................................. 3,739,861 41,364,492 7,186,009 72,115,535
Redeemed......................................................... (3,525,604) (38,882,026) (569,093) (5,816,388)
----------- ------------- ---------- ------------
Net increase - Class C........................................... 214,257 2,482,466 6,616,916 66,299,147
----------- ------------- ---------- ------------
CLASS D
Sold............................................................. 12,198,351 137,247,940 1,075,888 11,093,524
Redeemed......................................................... (2,786,381) (31,484,540) (952,059) (9,927,939)
----------- ------------- ---------- ------------
Net increase - Class D........................................... 9,411,970 105,763,400 123,829 1,165,585
----------- ------------- ---------- ------------
Net increase in Fund............................................. 21,478,790 $ 242,353,999 54,492,537 $546,786,621
=========== ============= ========== ============
</TABLE>
---------------------
* Commencement of operations.
31
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2000, CONTINUED
6. FEDERAL INCOME TAX STATUS
As of October 31, 2000, the Fund had temporary book/tax differences primarily
attributable to the mark-to-market of passive foreign investment companies and
open forward foreign currency exchange contracts and capital loss deferals on
wash sales and permanent book/tax differences primarily attributable to foreign
currency losses and a net operating loss. To reflect reclassifications arising
from the permanent differences, paid-in-capital was charged $72,374, accumulated
undistributed net realized gain was charged $1,161,186 and accumulated
undistributed net investment income was credited $1,233,560.
7. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS
The Fund may enter into 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, 2000, there were outstanding forward contracts and outstanding
index futures contracts.
32
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR JUNE 28, 1999*
ENDED THROUGH
OCTOBER 31, 2000 OCTOBER 31, 1999
----------------------------------------------------------------------------------------------------
<S> <C> <C>
CLASS A SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period........................ $ 10.57 $ 10.00
------- -------
Income (loss) from investment operations:
Net investment income.................................... 0.11 0.01
Net realized and unrealized gain (loss).................. (0.39) 0.56
------- -------
Total income (loss) from investment operations.............. (0.28) 0.57
------- -------
Net asset value, end of period.............................. $ 10.29 $ 10.57
======= =======
TOTAL RETURN+............................................... (2.65)% 5.70%(1)
RATIOS TO AVERAGE NET ASSETS (3):
Expenses.................................................... 1.47 % 1.81%(2)
Net investment income....................................... 0.95 % 0.31%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $46,535 $38,506
Portfolio turnover rate..................................... 84 % 14%(1)
</TABLE>
---------------------
* Commencement of operations.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
33
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR JUNE 28, 1999*
ENDED THROUGH
OCTOBER 31, 2000 OCTOBER 31, 1999
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
CLASS B SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period........................ $ 10.55 $ 10.00
-------- --------
Income (loss) from investment operations:
Net investment income (loss)............................. 0.02 (0.02)
Net realized and unrealized gain (loss).................. (0.38) 0.57
-------- --------
Total income (loss) from investment operations.............. (0.36) 0.55
-------- --------
Net asset value, end of period.............................. $ 10.19 $ 10.55
======== ========
TOTAL RETURN+............................................... (3.41)% 5.50 %(1)
RATIOS TO AVERAGE NET ASSETS (3):
Expenses.................................................... 2.22 % 2.56 %(2)
Net investment income (loss)................................ 0.20 % (0.44)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $561,375 $465,258
Portfolio turnover rate..................................... 84 % 14 %(1)
</TABLE>
---------------------
* Commencement of operations.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
34
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR JUNE 28, 1999*
ENDED THROUGH
OCTOBER 31, 2000 OCTOBER 31, 1999
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
CLASS C SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period........................ $ 10.55 $ 10.00
------- -------
Income (loss) from investment operations:
Net investment income (loss)............................. 0.02 (0.02)
Net realized and unrealized gain (loss).................. (0.38) 0.57
------- -------
Total income (loss) from investment operations.............. (0.36) 0.55
------- -------
Net asset value, end of period.............................. $ 10.19 $ 10.55
======= =======
TOTAL RETURN+............................................... (3.41)% 5.50 %(1)
RATIOS TO AVERAGE NET ASSETS (3):
Expenses.................................................... 2.22 % 2.56 %(2)
Net investment income (loss)................................ 0.20 % (0.44)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $69,640 $69,811
Portfolio turnover rate..................................... 84 % 14 %(1)
</TABLE>
---------------------
* Commencement of operations.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
35
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR JUNE 28, 1999*
ENDED THROUGH
OCTOBER 31, 2000 OCTOBER 31, 1999
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
CLASS D SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period........................ $ 10.58 $10.00
------- ------
Income from investment operations:
Net investment income.................................... 0.15 0.01
Net realized and unrealized gain (loss).................. (0.41) 0.57
------- ------
Total income (loss) from investment operations.............. (0.26) 0.58
------- ------
Net asset value, end of period.............................. $ 10.32 $10.58
======= ======
TOTAL RETURN+............................................... (2.46)% 5.80(1)
RATIOS TO AVERAGE NET ASSETS (3):
Expenses.................................................... 1.22 % 1.56(2)
Net investment income....................................... 1.20 % 0.56(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $98,465 $1,336
Portfolio turnover rate..................................... 84 % 14(1)
</TABLE>
---------------------
* Commencement of operations.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
36
<PAGE>
INDEPENDENT AUDITORS' REPORT
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES
OF MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND:
We have audited the accompanying statement of assets and liabilities of Morgan
Stanley Dean Witter International Fund (the "Fund"), including the portfolio of
investments, as of October 31, 2000, and the related statements of operations
and changes in net assets, and the financial highlights for the year then ended.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit. The statement
of changes in net assets and the Financial Highlights for the period June 28,
1999 to October 31, 1999 were audited by other independent accountants whose
report, dated December 17, 1999, expressed an unqualified opinion on that
statement and financial highlights.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 2000, by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Morgan
Stanley Dean Witter International Fund as of October 31, 2000, the results of
its operations, the changes in its net assets, and the financial highlights for
the year then ended, in conformity with accounting principles generally accepted
in the United States of America.
Deloitte & Touche LLP
NEW YORK, NEW YORK
DECEMBER 11, 2000
37
<PAGE>
MORGAN STANLEY DEAN WITTER INTERNATIONAL FUND
CHANGE IN INDEPENDENT ACCOUNTANTS
On July 1, 2000 PricewaterhouseCoopers LLP resigned as independent accountants
of the Fund.
The report of PricewaterhouseCoopers LLP on the financial statements of the Fund
for the period ended October 31, 1999, contained no adverse opinion or
disclaimer of opinion and was not qualified or modified as to uncertainty, audit
scope or accounting principle.
In connection with its audit for the period ended October 31, 1999, and through
July 1, 2000, there have been no disagreements with PricewaterhouseCoopers LLP
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements, if not resolved
to the satisfaction of PricewaterhouseCoopers LLP would have caused them to make
reference thereto in their report of the financial statements for such period.
The Fund, with the approval of its Board of Trustees and its Audit Committee,
engaged Deloitte & Touche LLP as its new independent auditors as of July 1,
2000.
38
<PAGE>
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
Wayne E. Hedien
James F. Higgins
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Mitchell M. Merin
President
Barry Fink
Vice President, Secretary and General Counsel
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Morgan Stanley Dean Witter Trust FSB
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT AUDITORS
Deloitte & Touche LLP
Two World Financial Center
New York, New York 10281
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
trustees, fees, expenses and other pertinent information, please see the
prospectus of the Fund.
This report is not authorized for distribution to prospective investors in
the Fund unless preceded or accompanied by an effective prospectus. Read the
prospectus carefully before investing.
Morgan Stanley Dean Witter Distributors Inc., member NASD.
MORGAN STANLEY
DEAN WITTER
INTERNATIONAL FUND
[ARTWORK]
ANNUAL REPORT
OCTOBER 31, 2000
