MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND, 485BPOS, 2000-09-29

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
485BPOS, 2000-09-29

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 29, 2000
REGISTRATION NOS. 333-74337
811-9259

================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------

FORM N-1A
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. 1 [X]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 [X]
AMENDMENT NO. 2 [X}

---------------------

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND

(A MASSACHUSETTS BUSINESS TRUST)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 392-1600

BARRY FINK, ESQ.
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(NAME AND ADDRESS OF AGENT FOR SERVICE)

---------------------

COPY TO:

STUART M. STRAUSS, ESQ.
MAYER, BROWN & PLATT
1675 BROADWAY
NEW YORK, NEW YORK 10019

---------------------

APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
As soon as practicable after this Post-Effective Amendment becomes effective.

IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX)

immediately upon filing pursuant to paragraph (b)
----
X on September 29, 2000 pursuant to paragraph (b)
----
60 days after filing pursuant to paragraph (a)
----
on (date) pursuant to paragraph (a) of rule 485.
----

AMENDING THE PROSPECTUS AND UPDATING FINANCIAL STATEMENTS

================================================================================
<PAGE>

PROSPECTUS o SEPTEMBER 29, 2000

Morgan Stanley Dean Witter

-------------------------------------------------------

TOTAL MARKET INDEX FUND

A MUTUAL FUND THAT SEEKS TO PROVIDE INVESTMENT
RESULTS THAT, BEFORE EXPENSES, CORRESPOND TO
THE TOTAL RETURN OF THE U.S. STOCK MARKET AS
MEASURED BY THE WILSHIRE 5000 TOTAL MARKET INDEX

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this Prospectus.
Any representation to the contrary is a criminal offense.

[GRAPHIC OMITTED]

<PAGE>

CONTENTS

<TABLE>
<S> <C>
The Fund Investment Objective ........................... 1
Principal Investment Strategies ................ 1
Principal Risks ................................ 2
Fees and Expenses .............................. 3
Additional Investment Strategy Information ..... 4
Additional Risk Information .................... 5
Fund Management ................................ 6

Shareholder Information Pricing Fund Shares ............................ 7
How to Buy Shares .............................. 7
How to Exchange Shares ......................... 9
How to Sell Shares ............................. 11
Distributions .................................. 13
Tax Consequences ............................... 13
Share Class Arrangements ....................... 14

Financial Highlights ................................................ 23

Our Family of Funds ................................. Inside Back Cover

This Prospectus contains important information about the Fund.
Please read it carefully and keep it for future reference.
</TABLE>

<PAGE>

THE FUND

[GRAPHIC OMITTED]

INVESTMENT OBJECTIVE
--------------------------------
Morgan Stanley Dean Witter Total Market Index Fund seeks to provide
investment results that, before expenses, correspond to the total
return of the U.S. stock market as measured by the Wilshire 5000
Total Market Index.

[GRAPHIC OMITTED]

PRINCIPAL INVESTMENT STRATEGIES
--------------------------------------------
The Wilshire 5000 Total Market Index consists of substantially all of
the stocks which are actively traded in the U.S. (currently, more
than 7,000). The Index consists of large capitalization,
mid-capitalization and small capitalization stocks. Because the Index
is market capitalization weighted, currently large cap stocks in the
Index represent approximately two thirds of its value. The Index may
include some foreign companies. The Fund will normally invest at
least 80% of its total assets in stocks included in the Index.

Not all stocks in the Index are purchased because of the practical
difficulties and expense of purchasing and selling over 7,000 stocks.
Instead, statistical sampling is used in an attempt to recreate the
Index in terms of industry, size, dividend yield and other
characteristics. For example, if technology stocks make up 20% of the
entire market capitalization of the Index, the Fund would seek to
invest approximately 20% of its assets in certain technology stocks
which, in the aggregate, are believed to be representative of the
technology stocks in the Index. The Fund generally expects that its
portfolio will include the largest 2,500 to 3,000 U.S. stocks
(measured by market capitalization).

The inclusion of a stock in the Index is in no way an endorsement by
Wilshire Associates of the stock as an investment, nor is Wilshire a
sponsor of the Fund or in any way affiliated with it.

Common stock is a share ownership or equity interest in a
corporation. It may or may not pay dividends, as some companies
reinvest all of their profits back into their businesses, while
others pay out some of their profits to shareholders as dividends.

In addition, the Fund may invest in options and futures contracts and
may make temporary investments in money market instruments to manage
cash flows into and out of the Fund.

In pursuing the Fund's investment objective, the Investment Manager
has considerable leeway in deciding which trading or investment
strategies it uses. For example, the Investment Manager in its
discretion may determine to use some permitted trading or investment
strategies while not using others.

<PAGE>

[GRAPHIC OMITTED]

PRINCIPAL RISKS
--------------------------
There is no assurance that the Fund will achieve its investment
objective. The Fund's share price will fluctuate with changes in the
market value of the Fund's portfolio securities. When you sell Fund
shares, they may be worth less than what you paid for them and,
accordingly, you can lose money investing in this Fund.

A principal risk of investing in the Fund is associated with its
common stock investments. In general, stock values fluctuate in
response to activities specific to the company as well as general
market, economic and political conditions. Stock prices can fluctuate
widely in response to these factors.

Another risk of investing in the Fund arises from its operation as an
index fund. As such, the adverse performance of a particular stock
ordinarily will not result in the elimination of the stock from the
Fund's portfolio. The Fund will remain invested in common stocks even
when stock prices are generally falling. The Investment Manager seeks
a correlation over the long term between the Fund, before expenses,
and the Index of 95% or better. A figure of 100% would indicate
perfect correlation. The Fund's ability to achieve its goal may be
adversely affected by changes in the composition of the Index. In
addition, the Fund's ability to achieve the desired correlation will
depend upon the success of the statistical sampling utilized by the
Investment Manager and the Investment Manager's ability to manage
cash flows (primarily from purchases and redemptions and
distributions from the Fund's investments). The Fund may also not
be able to purchase isolated securities or types of securities as a
result of the Fund's fundamental investment restrictions or tax
consequences resulting from holding a particular security.

Other Risks. The Fund may invest in medium and small-sized companies,
as well as large, more established companies. Investing in securities
of small and medium-sized companies involves greater risk than is
customarily associated with investing in more established companies.
These stocks may be more volatile and have returns that vary,
sometimes significantly, from the overall stock market.

The Fund is also subject to other risks from its permissible
investments including the risks associated with its options and
futures and foreign securities investments. For more information
about these risks, see the "Additional Risk Information" section.

Shares of the Fund are not bank deposits and are not guaranteed or
insured by the FDIC or any other government agency.

<PAGE>

[GRAPHIC OMITTED]

FEES AND EXPENSES
-----------------------------
The table below briefly describes the fees and expenses that you may
pay if you buy and hold shares of the Fund. The Fund offers four
classes of shares: Classes A, B, C and D. Each Class has a different
combination of fees, expenses and other features. The Fund does not
charge account or exchange fees. See the "Share Class Arrangements"
section for further fee and expense information.

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS D
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHAREHOLDER FEES
----------------------------------------------------------------------------------------------------
Maximum sales charge (load) imposed on
purchases (as a percentage of offering price) 5.25%1 None None None
----------------------------------------------------------------------------------------------------
Maximum deferred sales charge (load) (as a
percentage based on the lesser of the offering
price or net asset value at redemption) None2 5.00%3 1.00%4 None
----------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
----------------------------------------------------------------------------------------------------
Management fee 0.25% 0.25% 0.25% 0.25%
----------------------------------------------------------------------------------------------------
Distribution and service (12b-1) fees 0.25% 1.00% 1.00% None
----------------------------------------------------------------------------------------------------
Other expenses 0.25% 0.25% 0.25% 0.25%
----------------------------------------------------------------------------------------------------
Total annual Fund operating expenses5 0.75% 1.50% 1.50% 0.50%
----------------------------------------------------------------------------------------------------
</TABLE>
1 Reduced for purchases of $25,000 and over.

2 Investments that are not subject to any sales charge
at the time of purchase are subject to a contingent deferred sales charge
("CDSC") of 1.00% that will be imposed if you sell your shares within one
year after purchase, except for certain specific circumstances.
3 The CDSC is scaled down to 1.00% during the sixth
year, reaching zero thereafter. See "Share Class Arrangements" for a
complete discussion of the CDSC.
4 Only applicable if you sell your shares within one
year after purchase.

5 The fees and expenses disclosed above reflect that under its Investment
Management Agreement with the Fund, the Investment Manager assumes the Fund's
operating expenses (except for brokerage and 12b-1 fees) to the extent that
such expenses and compensation on an annualized basis exceed 0.50% of the
daily net assets of the Fund.

[sidebar]
SHAREHOLDER FEES
These fees are paid directly from
your investment.
[end sidebar]

[sidebar]
ANNUAL FUND
OPERATING EXPENSES
These expenses are deducted
from the Fund's assets and are
based on expenses paid for the
fiscal period ended July 31, 2000.
[end sidebar]

<PAGE>

EXAMPLE

This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds.

The example assumes that you invest $10,000 in the Fund, your
investment has a 5% return each year, and the Fund's operating
expenses remain the same. Although your actual costs may be higher or
lower, the tables below show your costs at the end of each period
based on these assumptions depending upon whether or not you sell
your shares at the end of each period.

<TABLE>
<CAPTION>
IF YOU SOLD YOUR SHARES: IF YOU HELD YOUR SHARES:
------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A $598 $752 $ 920 $1,406 $598 $ 752 $920 $1,406
------------------------------------------------------------------------------------------
CLASS B $653 $774 $1,018 $1,791 $153 $ 474 $818 $1,791
------------------------------------------------------------------------------------------
CLASS C $253 $474 $ 818 $1,791 $153 $ 474 $818 $1,791
------------------------------------------------------------------------------------------
CLASS D $ 51 $160 $ 280 $ 628 $ 51 $ 160 $280 $ 628
------------------------------------------------------------------------------------------
</TABLE>

Long-term shareholders of Class B and Class C may pay more in sales
charges, including distribution fees, than the economic equivalent of
the maximum front-end sales charges permitted by the NASD.

The Fund commenced operations on September 28, 1999 and as of the
date of this Prospectus did not have a full calendar year of
performance to report.

[GRAPHIC OMITTED]

ADDITIONAL INVESTMENT STRATEGY INFORMATION
---------------------------------------------------------
This section provides additional information relating to the Fund's
principal investment strategies.

Options and Futures. The Fund may invest in put and call options and
futures contracts. Options and futures may be used to assist in
seeking performance that corresponds to the performance of the
Wilshire 5000 Total Market Index and/or to assist in managing cash
flows into and out of the Fund. Presently, there are no options and
futures on the Wilshire 5000 Total Market Index; however, the Fund
may use options and futures on other indexes that represent a portion
of the securities contained in the Wilshire 5000 Total Market Index.

Temporary Investments. The Fund also may invest up to 20% of its
assets temporarily in money market instruments when the Fund has
received cash from the sale of its shares pending investment of the
cash, and to have investments that are easily converted to cash to
pay Fund shareholders who sell (redeem) Fund shares.

<PAGE>

The percentage limitations relating to the composition of the Fund's
portfolio apply at the time the Fund acquires an investment and refer
to the Fund's net assets, unless otherwise noted. Subsequent
percentage changes that result from market fluctuations will not
require the Fund to sell any portfolio security. The Fund may change
its principal investment strategies without shareholder approval;
however, you would be notified of any changes.

[GRAPHIC OMITTED]

ADDITIONAL RISK INFORMATION
----------------------------------------
This section provides additional information relating to the
principal risks of investing in the Fund.

Options and Futures. Risks inherent in the use of options and futures
may include the possible imperfect correlation between the price of
options and futures contracts and movements in the prices of the
securities owned by the Fund or movements in the Wilshire 5000 Total
Market Index (or any other underlying index), and the possible
absence of a liquid secondary market for any particular instrument.
Certain options may be over-the-counter options, which are options
negotiated with dealers; there is no secondary market for these
investments.

Foreign Securities. The Fund's investments in the common stocks of
foreign corporations (including American Depository Receipts) may
involve risks in addition to the risks associated with domestic
securities. Foreign securities are affected by changes in currency
rates. Foreign securities also have risks related to political and
economic developments abroad. Foreign companies, in general, are not
subject to the regulatory requirements of U.S. companies and, as
such, there may be less publicly available information about these
companies. Moreover, foreign accounting, auditing and financial
reporting standards generally are different from those applicable to
U.S. companies.

<PAGE>

[GRAPHIC OMITTED]

FUND MANAGEMENT
----------------------------
The Fund has retained the Investment Manager -- Morgan
Stanley Dean Witter Advisors Inc. -- to provide
administrative services, manage its business affairs
and invest its assets, including the placing of orders
for the purchase and sale of portfolio securities. The
Investment Manager is a wholly-owned subsidiary of
Morgan Stanley Dean Witter & Co., a preeminent global
financial services firm that maintains leading market
positions in each of its three primary businesses:
securities, asset management and credit services. Its
main business office is located at Two World Trade
Center, New York, New York 10048.

[sidebar]
MORGAN STANLEY DEAN
WITTER ADVISORS INC.
The Investment Manager is widely recognized as a leader in the mutual fund
industry and together with Morgan Stanley Dean Witter Services Company Inc.,
its wholly-owned subsidiary, had approximately $155 billion in assets under
management as of August 31, 2000.
[end sidebar]

The Fund's portfolio is managed within the Investment
Manager's Growth Group. Kevin Jung, a Vice President
of the Investment Manager, is the primary portfolio
manager of the Fund. Mr. Jung has been a portfolio
manager with the Investment Manager since September
1997. Prior to that he was a Vice President and
portfolio manager with UBS Asset Management (NY) Inc.
from April 1993 through August 1997.

The Fund pays the Investment Manager a monthly
management fee as full compensation for the services
and facilities furnished to the Fund, and for Fund
expenses assumed by the Investment Manager calculated
daily by applying the annual rate of 0.40% to the
Fund's average daily net assets. The Investment
Manager has agreed under its Management Agreement with
the Fund to assume Fund operating expenses (except for
brokerage and 12b-1 fees) to the extent that such
operating expenses exceed 0.50% of the average daily
net assets of the Fund, which may reduce the
investment management fee below 0.40% of the Fund's
average daily net assets. For example, if "other
expenses" are estimated to be 0.40% of the Fund's
average daily net assets, then the investment
management fee rate paid by the Fund would equal 0.10%
of the Fund's average daily net assets. If in the
future "other expenses" decline to 0.30% of the Fund's
average daily net assets, the investment management
fee paid by the Fund would equal 0.20% of the Fund's
average daily net assets.

<PAGE>

SHAREHOLDER INFORMATION

[GRAPHIC OMITTED]

PRICING FUND SHARES
-------------------------------
The price of Fund shares (excluding sales charges), called "net asset
value," is based on the value of the Fund's portfolio securities.
While the assets of each Class are invested in a single portfolio of
securities, the net asset value of each Class will differ because the
Classes have different ongoing distribution fees.

The net asset value per share of the Fund is determined once daily at
4:00 p.m. Eastern time on each day that the New York Stock Exchange
is open (or, on days when the New York Stock Exchange closes prior to
4:00 p.m., at such earlier time). Shares will not be priced on days
that the New York Stock Exchange is closed.

The value of the Fund's portfolio securities is based on the
securities' market price when available. When a market price is not
readily available, including circumstances under which the Investment
Manager determines that a security's market price is not accurate, a
portfolio security is valued at its fair value, as determined under
procedures established by the Fund's Board of Trustees. In these
cases, the Fund's net asset value will reflect certain portfolio
securities' fair value rather than their market price.

An exception to the Fund's general policy of using market prices
concerns its short-term debt portfolio securities. Debt securities
with remaining maturities of sixty days or less at the time of
purchase are valued at amortized cost. However, if the cost does not
reflect the securities' market value, these securities will be valued
at their fair value.

[GRAPHIC OMITTED]

HOW TO BUY SHARES
------------------------------
You may open a new account to buy Fund shares or buy
additional Fund shares for an existing account by
contacting your Morgan Stanley Dean Witter Financial
Advisor or other authorized financial representative.
Your Financial Advisor will assist you, step-by-step,
with the procedures to invest in the Fund. You may also
purchase shares directly by calling the Fund's transfer
agent and requesting an application.

[sidebar]
CONTACTING A
FINANCIAL ADVISOR
If you are new to the Morgan Stanley Dean Witter Family of Funds and would
like to contact a Financial Advisor, call (877) 937-MSDW (toll-free) for the
telephone number of the Morgan Stanley Dean Witter office nearest you. You may
also access our office locator on our Internet site at: www.msdwadvice.com/funds
[end sidebar]

Because every investor has different immediate
financial needs and long-term investment goals, the
Fund offers investors four Classes of shares: Classes
A, B, C and D. Class D shares are only offered to a
limited group of investors. Each Class of shares offers
a distinct structure of sales charges, distribution and
service fees, and other features that are designed to
address a variety of needs. Your Financial Advisor or
other authorized financial representative can help you
decide which Class may be most appropriate for you.
When purchasing Fund shares, you must specify which
Class of shares you wish to purchase.

<PAGE>

When you buy Fund shares, the shares are purchased at the next share
price calculated (less any applicable front-end sales charge for
Class A shares) after we receive your purchase order. Your payment is
due on the third business day after you place your purchase order. We
reserve the right to reject any order for the purchase of Fund
shares.

<TABLE>
<CAPTION>
MINIMUM INVESTMENT AMOUNTS
-------------------------------------------------------------------------------------
MINIMUM INVESTMENT
--------------------------
INVESTMENT OPTIONS INITIAL ADDITIONAL
-------------------------------------------------------------------------------------
<S> <C> <C> <C>
Regular Accounts $1,000 $100
-------------------------------------------------------------------------------------
Individual Retirement Accounts: Regular IRAs $1,000 $100
Education IRAs $ 500 $100
-------------------------------------------------------------------------------------
EasyInvest(Service Mark)
(Automatically from your
checking or savings account
or Money Market Fund) $ 100* $100*
-------------------------------------------------------------------------------------
</TABLE>

* Provided your schedule of investments totals $1,000 in twelve months.

[sidebar]
EASYINVEST(Service Mark)
A purchase plan that allows you to transfer money automatically from your
checking or savings account or from a Money Market Fund on a semi-monthly,
monthly or quarterly basis. Contact your Morgan Stanley Dean Witter Financial
Advisor for further information about this service.
[end sidebar]

There is no minimum investment amount if you purchase Fund shares
through: (1) the Investment Manager's mutual fund asset allocation
plan, (2) a program, approved by the Fund's distributor, in which you
pay an asset-based fee for advisory, administrative and/or brokerage
services, (3) the following programs approved by the Fund's
distributor: (i) qualified state tuition plans described in Section
529 of the Internal Revenue Code and (ii) certain other investment
programs that do not charge an asset-based fee, or (4)
employer-sponsored employee benefit plan accounts.

Investment Options for Certain Institutional and Other
Investors/Class D Shares. To be eligible to purchase Class D shares,
you must qualify under one of the investor categories specified in
the "Share Class Arrangements" section of this Prospectus.

Subsequent Investments Sent Directly to the Fund. In addition to
buying additional Fund shares for an existing account by contacting
your Morgan Stanley Dean Witter Financial Advisor, you may send a
check directly to the Fund. To buy additional shares in this manner:

o Write a "letter of instruction" to the Fund specifying the
name(s) on the account, the account number, the social security or
tax identification number, the Class of shares you wish to
purchase, and the investment amount (which would include any
applicable front-end sales charge). The letter must be signed by
the account owner(s).

o Make out a check for the total amount payable to: Morgan Stanley
Dean Witter Total Market Index Fund.

<PAGE>

o Mail the letter and check to Morgan Stanley Dean Witter Trust FSB
at P.O. Box 1040, Jersey City, NJ 07303.

[GRAPHIC OMITTED]

HOW TO EXCHANGE SHARES
------------------------------------

Permissible Fund Exchanges. You may exchange shares of any Class of
the Fund for the same Class of any other continuously offered
Multi-Class Fund, or for shares of a No-Load Fund, a Money Market
Fund, North American Government Income Trust or Short-Term U.S.
Treasury Trust, without the imposition of an exchange fee. In
addition, Class A shares of the Fund may be exchanged for shares of
an FSC Fund (funds subject to a front-end sales charge). See the
inside back cover of this Prospectus for each Morgan Stanley Dean
Witter Fund's designation as a Multi-Class Fund, No-Load Fund, Money
Market Fund or FSC Fund. If a Morgan Stanley Dean Witter Fund is not
listed, consult the inside back cover of that fund's prospectus for
its designation.

Exchanges may be made after shares of the Fund acquired by purchase
have been held for thirty days. There is no waiting period for
exchanges of shares acquired by exchange or dividend reinvestment.
The current prospectus for each fund describes its investment
objective(s), policies and investment minimums, and should be read
before investment. Since exchanges are available only into
continuously offered Morgan Stanley Dean Witter Funds, exchanges are
not available into any new Morgan Stanley Dean Witter Fund during its
initial offering period, or when shares of a particular Morgan
Stanley Dean Witter Fund are not being offered for purchase.

Exchange Procedures. You can process an exchange by contacting your
Morgan Stanley Dean Witter Financial Advisor or other authorized
financial representative. Otherwise, you must forward an exchange
privilege authorization form to the Fund's transfer agent -- Morgan
Stanley Dean Witter Trust FSB -- and then write the transfer agent or
call (800) 869-NEWS to place an exchange order. You can obtain an
exchange privilege authorization form by contacting your Financial
Advisor or other authorized financial representative or by calling
(800) 869-NEWS. If you hold share certificates, no exchanges may be
processed until we have received all applicable share certificates.

An exchange to any Morgan Stanley Dean Witter Fund (except a Money
Market Fund) is made on the basis of the next calculated net asset
values of the funds involved after the exchange instructions are
accepted. When exchanging into a Money Market Fund, the Fund's shares
are sold at their next calculated net asset value and the Money
Market Fund's shares are purchased at their net asset value on the
following business day.

The Fund may terminate or revise the exchange privilege upon required
notice. The check writing privilege is not available for Money Market
Fund shares you acquire in an exchange.

<PAGE>

Telephone Exchanges. For your protection when calling Morgan Stanley
Dean Witter Trust FSB, we will employ reasonable procedures to
confirm that exchange instructions communicated over the telephone
are genuine. These procedures may include requiring various forms of
personal identification such as name, mailing address, social
security or other tax identification number. Telephone instructions
also may be recorded.

Telephone instructions will be accepted if received by the Fund's
transfer agent between 9:00 a.m. and 4:00 p.m. Eastern time on any
day the New York Stock Exchange is open for business. During periods
of drastic economic or market changes, it is possible that the
telephone exchange procedures may be difficult to implement although
this has not been the case with the Fund in the past.

Margin Accounts. If you have pledged your Fund shares in a margin
account, contact your Morgan Stanely Dean Witter Financial Advisor or
other authorized financial representative regarding restrictions on
the exchange of such shares.

Tax Considerations of Exchanges. If you exchange shares of the Fund
for shares of another Morgan Stanley Dean Witter Fund there are
important tax considerations. For tax purposes, the exchange out of
the Fund is considered a sale of the Fund's shares -- and the
exchange into the other fund is considered a purchase. As a result,
you may realize a capital gain or loss.

You should review the "Tax Consequences" section and consult your own
tax professional about the tax consequences of an exchange.

Limitations on Exchanges. Certain patterns of past exchanges and/or
purchase or sale transactions involving the Fund or other Morgan
Stanley Dean Witter Funds may result in the Fund limiting or
prohibiting, at its discretion, additional purchases and/or
exchanges. Determinations in this regard may be made based on the
frequency or dollar amount of the previous exchanges or purchase or
sale transactions. You will be notified in advance of limitations on
your exchange privileges.

CDSC Calculations on Exchanges. See the "Share Class Arrangements"
section of this Prospectus for a discussion of how applicable
contingent deferred sales charges (CDSCs) are calculated for shares
of one Morgan Stanley Dean Witter Fund that are exchanged for shares
of another.

For further information regarding exchange privileges, you should
contact your Morgan Stanley Dean Witter Financial Advisor or call
(800) 869-NEWS.

<PAGE>

[GRAPHIC OMITTED]

HOW TO SELL SHARES
------------------------------
You can sell some or all of your Fund shares at any time. If you sell
Class A, Class B or Class C shares, your net sale proceeds are
reduced by the amount of any applicable CDSC. Your shares will be
sold at the next price calculated after we receive your order to sell
as described below.

<TABLE>
<CAPTION>
OPTIONS PROCEDURES
--------------------- -----------------------------------------------------------------------------------------------
<S> <C>
Contact Your To sell your shares, simply call your Morgan Stanley Dean Witter Financial Advisor or other
Financial Advisor authorized financial representative.
[GRAPHIC OMITTED] -----------------------------------------------------------------------------------------------
Payment will be sent to the address to which the account is registered or deposited in your
brokerage account.
---------------------------------------------------------------------------------------------------------------------
By Letter You can also sell your shares by writing a "letter of instruction" that includes:
[GRAPHIC OMITTED] o your account number;
o the dollar amount or the number of shares you wish to sell;
o the Class of shares you wish to sell; and
o the signature of each owner as it appears on the account.
-----------------------------------------------------------------------------------------------
If you are requesting payment to anyone other than the registered owner(s) or that payment
be sent to any address other than the address of the registered owner(s) or pre-designated
bank account, you will need a signature guarantee. You can obtain a signature guarantee from
an eligible guarantor acceptable to Morgan Stanley Dean Witter Trust FSB. (You should
contact Morgan Stanley Dean Witter Trust FSB at (800) 869-NEWS for a determination as to
whether a particular institution is an eligible guarantor.) A notary public cannot provide a
signature guarantee. Additional documentation may be required for shares held by a
corporation, partnership, trustee or executor.
-----------------------------------------------------------------------------------------------
Mail the letter to Morgan Stanley Dean Witter Trust FSB at P.O. Box 983, Jersey City, NJ
07303. If you hold share certificates, you must return the certificates, along with the letter
and any required additional documentation.
-----------------------------------------------------------------------------------------------
A check will be mailed to the name(s) and address in which the account is registered, or
otherwise according to your instructions.
---------------------------------------------------------------------------------------------------------------------
Systematic If your investment in all of the Morgan Stanley Dean Witter Family of Funds has a total
Withdrawal Plan market value of at least $10,000, you may elect to withdraw amounts of $25 or more, or in
[GRAPHIC OMITTED] any whole percentage of a fund's balance (provided the amount is at least $25), on a monthly,
quarterly, semi-annual or annual basis, from any fund with a balance of at least $1,000. Each
time you add a fund to the plan, you must meet the plan requirements.
-----------------------------------------------------------------------------------------------
Amounts withdrawn are subject to any applicable CDSC. A CDSC may be waived under
certain circumstances. See the Class B waiver categories listed in the "Share Class
Arrangements" section of this Prospectus.
-----------------------------------------------------------------------------------------------
To sign up for the Systematic Withdrawal Plan, contact your Morgan Stanley Dean Witter
Financial Advisor or call (800) 869-NEWS. You may terminate or suspend your plan at any
time. Please remember that withdrawals from the plan are sales of shares, not Fund
"distributions," and ultimately may exhaust your account balance. The Fund may terminate or
revise the plan at any time.
---------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

Payment for Sold Shares. After we receive your complete instructions
to sell as described above, a check will be mailed to you within
seven days, although we will attempt to make payment within one
business day. Payment may also be sent to your brokerage account.

Payment may be postponed or the right to sell your shares suspended
under unusual circumstances. If you request to sell shares that were
recently purchased by check, your sale will not be effected until it
has been verified that the check has been honored.

Tax Considerations. Normally, your sale of Fund shares is subject to
federal and state income tax. You should review the "Tax
Consequences" section of this Prospectus and consult your own tax
professional about the tax consequences of a sale.

Reinstatement Privilege. If you sell Fund shares and have not
previously exercised the reinstatement privilege, you may, within 35
days after the date of sale, invest any portion of the proceeds in
the same Class of Fund shares at their net asset value and receive a
pro rata credit for any CDSC paid in connection with the sale.

Involuntary Sales. The Fund reserves the right, on sixty days'
notice, to sell the shares of any shareholder (other than shares held
in an IRA or 403(b) Custodial Account) whose shares, due to sales by
the shareholder, have a value below $100, or in the case of an
account opened through EasyInvestSM, if after 12 months the
shareholder has invested less than $1,000 in the account.

However, before the Fund sells your shares in this manner, we will
notify you and allow you sixty days to make an additional investment
in an amount that will increase the value of your account to at least
the required amount before the sale is processed. No CDSC will be
imposed on any involuntary sale.

Margin Accounts. If you have pledged your Fund shares in a margin
account, contact your Morgan Stanley Dean Witter Financial Advisor or
other authorized financial representative regarding restrictions on
the sale of such shares.

<PAGE>

[GRAPHIC OMITTED]

DISTRIBUTIONS
------------------------
The Fund passes substantially all of its earnings from
income and capital gains along to its investors as
"distributions." The Fund earns income from stocks and
interest from temporary investments. These amounts are
passed along to Fund shareholders as "income dividend
distributions." The Fund realizes capital gains
whenever it sells securities for a higher price than it
paid for them. These amounts may be passed along as
"capital gain distributions."

[sidebar]
TARGETED DIVIDENDS(Service Mark)
You may select to have your Fund distributions automatically invested in other
Classes of Fund shares or Classes of another Morgan Stanley Dean Witter Fund
that you own. Contact your Morgan Stanley Dean Witter Financial Advisor for
further information about this service.
[end sidebar]

The Fund declares income dividends separately for each
Class. Distributions paid on Class A and Class D
shares usually will be higher than for Class B and
Class C because distribution fees that Class B and
Class C pay are higher. Normally, income dividends are
distributed to shareholders annually. Capital gains,
if any, are usually distributed in December. The Fund,
however, may retain and reinvest any long-term capital
gains. The Fund may at times make payments from
sources other than income or capital gains that
represent a return of a portion of your investment.

Distributions are reinvested automatically in additional shares of
the same Class and automatically credited to your account, unless you
request in writing that all distributions be paid in cash. If you
elect the cash option, the Fund will mail a check to you no later
than seven business days after the distribution is declared. However,
if you purchase Fund shares through a Financial Advisor within three
business days prior to the record date for the distribution, the
distribution will automatically be paid to you in cash, even if you
did not request to receive all distributions in cash. No interest
will accrue on uncashed checks. If you wish to change how your
distributions are paid, your request should be received by the Fund's
transfer agent, Morgan Stanley Dean Witter Trust FSB, at least five
business days prior to the record date of the distributions.

[GRAPHIC OMITTED]

TAX CONSEQUENCES
----------------------------
As with any investment, you should consider how your Fund investment
will be taxed. The tax information in this Prospectus is provided as
general information. You should consult your own tax professional
about the tax consequences of an investment in the Fund.

Unless your investment in the Fund is through a tax-deferred
retirement account, such as a 401(k) plan or IRA, you need to be
aware of the possible tax consequences when:

o The Fund makes distributions; and

o You sell Fund shares, including an exchange to another Morgan
Stanley Dean Witter Fund.

<PAGE>

Taxes on Distributions. Your distributions are normally subject to
federal and state income tax when they are paid, whether you take
them in cash or reinvest them in Fund shares. A distribution also may
be subject to local income tax. Any income dividend distributions and
any short-term capital gain distributions are taxable to you as
ordinary income. Any long-term capital gain distributions are taxable
as long-term capital gains, no matter how long you have owned shares
in the Fund.

Every January, you will be sent a statement (IRS Form 1099-DIV)
showing the taxable distributions paid to you in the previous year.
The statement provides information on your dividends and capital
gains for tax purposes.

Taxes on Sales. Your sale of Fund shares normally is subject to
federal and state income tax and may result in a taxable gain or loss
to you. A sale also may be subject to local income tax. Your exchange
of Fund shares for shares of another Morgan Stanley Dean Witter Fund
is treated for tax purposes like a sale of your original shares and a
purchase of your new shares. Thus, the exchange may, like a sale,
result in a taxable gain or loss to you and will give you a new tax
basis for your new shares.

When you open your Fund account, you should provide your Social
Security or tax identification number on your investment application.
By providing this information, you will avoid being subject to a
federal backup withholding tax of 31% on taxable distributions and
redemption proceeds. Any withheld amount would be sent to the IRS as
an advance tax payment.

[GRAPHIC OMITTED]

SHARE CLASS ARRANGEMENTS
-------------------------------------
The Fund offers several Classes of shares having different
distribution arrangements designed to provide you with different
purchase options according to your investment needs. Your Morgan
Stanley Dean Witter Financial Advisor or other authorized financial
representative can help you decide which Class may be appropriate for
you.

The general public is offered three Classes: Class A shares, Class B
shares and Class C shares, which differ principally in terms of sales
charges and ongoing expenses. A fourth Class, Class D shares, is
offered only to a limited category of investors. Shares that you
acquire through reinvested distributions will not be subject to any
front-end sales charge or CDSC -- contingent deferred sales charge.
Sales personnel may receive different compensation for selling each
Class of shares. The sales charges applicable to each Class provide
for the distribution financing of shares of that Class.

<PAGE>

The chart below compares the sales charge and annual 12b-1 fee
applicable to each Class:

<TABLE>
<CAPTION>
MAXIMUM
CLASS SALES CHARGE ANNUAL 12B-1 FEE
--------------------------------------------------------------------------------------------------------------
<S> <C> <C>
A Maximum 5.25% initial sales charge reduced for purchase of $25,000 or more;
shares sold without an initial sales charge are generally subject to a 1.0% CDSC
during first year. 0.25%
--------------------------------------------------------------------------------------------------------------
B Maximum 5.0% CDSC during the first year decreasing to 0% after six years. 1.0%
--------------------------------------------------------------------------------------------------------------
C 1.0% CDSC during first year 1.0%
--------------------------------------------------------------------------------------------------------------
D None None
--------------------------------------------------------------------------------------------------------------
</TABLE>

CLASS A SHARES Class A shares are sold at net asset value plus an
initial sales charge of up to 5.25%. The initial sales charge is
reduced for purchases of $25,000 or more according to the schedule
below. Investments of $1 million or more are not subject to an initial
sales charge, but are generally subject to a contingent deferred sales
charge, or CDSC, of 1.0% on sales made within one year after the last
day of the month of purchase. The CDSC will be assessed in the same
manner and with the same CDSC waivers as with Class B shares. Class A
shares are also subject to a 12b-1 fee of up to 0.25% of the average
daily net assets of the Class.

The offering price of Class A shares includes a sales charge
(expressed as a percentage of the offering price) on a single
transaction as shown in the following table:

FRONT-END SALES CHARGE
-------------------------------------------------
PERCENTAGE OF APPROXIMATE PERCENTAGE
AMOUNT OF SINGLE TRANSACTION PUBLIC OFFERING PRICE OF NET AMOUNT INVESTED
---------------------------------------------------------------------------------------
<S> <C> <C>
Less than $25,000 5.25% 5.54%
---------------------------------------------------------------------------------------
$25,000 but less than $50,000 4.75% 4.99%
---------------------------------------------------------------------------------------
$50,000 but less than $100,000 4.00% 4.17%
---------------------------------------------------------------------------------------
$100,000 but less than $250,000 3.00% 3.09%
---------------------------------------------------------------------------------------
$250,000 but less than $1 million 2.00% 2.04%
---------------------------------------------------------------------------------------
$1 million and over 0 0
---------------------------------------------------------------------------------------
</TABLE>

[sidebar]
FRONT-END SALES CHARGE OR FSC
An initial sales charge you pay when purchasing Class A shares that is based on
a percentage of the offering price. The percentage declines based upon the
dollar value of Class A shares you purchase. We offer three ways to reduce your
Class A sales charges -- the Combined Purchase Privilege, Right of Accumulation
and Letter of Intent.
[end sidebar]
15

<PAGE>

The reduced sales charge schedule is applicable to purchases of Class
A shares in a single transaction by:

o A single account (including an individual, trust or fiduciary
account).

o Family member accounts (limited to husband, wife and children
under the age of 21).

o Pension, profit sharing or other employee benefit plans of
companies and their affiliates.

o Tax-exempt organizations.

o Groups organized for a purpose other than to buy mutual fund
shares.

Combined Purchase Privilege. You also will have the benefit of
reduced sales charges by combining purchases of Class A shares of the
Fund in a single transaction with purchases of Class A shares of
other Multi-Class Funds and shares of FSC Funds.

Right of Accumulation. You also may benefit from a reduction of sales
charges if the cumulative net asset value of Class A shares of the
Fund purchased in a single transaction, together with shares of other
Funds you currently own which were previously purchased at a price
including a front-end sales charge (including shares acquired through
reinvestment of distributions), amounts to $25,000 or more. Also, if
you have a cumulative net asset value of all your Class A and Class D
shares equal to at least $5 million (or $25 million for certain
employee benefit plans), you are eligible to purchase Class D shares
of any fund subject to the Fund's minimum initial investment
requirement.

You must notify your Morgan Stanley Dean Witter Financial Advisor or
other authorized financial representative (or Morgan Stanley Dean
Witter Trust FSB if you purchase directly through the Fund), at the
time a purchase order is placed, that the purchase qualifies for the
reduced sales charge under the Right of Accumulation. Similar
notification must be made in writing when an order is placed by mail.
The reduced sales charge will not be granted if: (i) notification is
not furnished at the time of the order; or (ii) a review of the
records of Dean Witter Reynolds or other authorized dealer of Fund
shares or the Fund's transfer agent does not confirm your represented
holdings.

Letter of Intent. The schedule of reduced sales charges for larger
purchases also will be available to you if you enter into a written
"letter of intent." A letter of intent provides for the purchase of
Class A shares of the Fund or other Multi-Class Funds or shares of
FSC Funds within a thirteen-month period. The initial purchase under
a letter of intent must be at least 5% of the stated investment goal.
To determine the applicable sales charge reduction, you may also
include: (1) the cost of shares of other Morgan Stanley Dean Witter
Funds which were previously purchased at a price including a
front-end sales charge during the 90-day period prior to the
distributor receiving the letter of intent, and (2) the cost of
shares of other funds you currently own acquired in exchange

<PAGE>

for shares of funds purchased during that period at a price including
a front-end sales charge. You can obtain a letter of intent by
contacting your Morgan Stanley Dean Witter Financial Advisor or other
authorized financial representative, or by calling (800) 869-NEWS. If
you do not achieve the stated investment goal within the
thirteen-month period, you are required to pay the difference between
the sales charges otherwise applicable and sales charges actually
paid, which may be deducted from your investment.

Other Sales Charge Waivers. In addition to investments of $1 million
or more, your purchase of Class A shares is not subject to a
front-end sales charge (or a CDSC upon sale) if your account
qualifies under one of the following categories:

o A trust for which Morgan Stanley Dean Witter Trust FSB provides
discretionary trustee services.

o Persons participating in a fee-based investment program (subject
to all of its terms and conditions, including termination fees,
mandatory sale or transfer restrictions on termination) approved by
the Fund's distributor pursuant to which they pay an asset based
fee for investment advisory, administrative and/or brokerage
services.

o Qualified state tuition plans described in Section 529 of the
Internal Revenue Code (subject to all applicable terms and
conditions) and certain other investment programs that do not
charge an asset-based fee and have been approved by the Fund's
distributor.

o Employer-sponsored employee benefit plans, whether or not
qualified under the Internal Revenue Code, for which Morgan Stanley
Dean Witter Trust FSB serves as trustee or Morgan Stanley Dean
Witter's Retirement Plan Services serves as recordkeeper under a
written Recordkeeping Services Agreement ("MSDW Eligible Plans")
which have at least 200 eligible employees.

o A MSDW Eligible Plan whose Class B shares have converted to Class
A shares, regardless of the plan's asset size or number of eligible
employees.

o A client of a Morgan Stanley Dean Witter Financial Advisor who
joined us from another investment firm within six months prior to
the date of purchase of Fund shares, and you used the proceeds from
the sale of shares of a proprietary mutual fund of that Financial
Advisor's previous firm that imposed either a front-end or deferred
sales charge to purchase Class A shares, provided that: (1) you
sold the shares not more than 60 days prior to purchase, and (2)
the sale proceeds were maintained in the interim in cash or a money
market fund.

o Current or retired Directors/Trustees of the Morgan Stanley Dean
Witter Funds, such persons' spouses and children under the age of
21, and trust accounts for which any of such individuals is a
beneficiary.

<PAGE>

o Current or retired directors, officers and employees of Morgan
Stanley Dean Witter & Co. and any of its subsidiaries, such
persons' spouses and children under the age of 21, and trust
accounts for which any of such individuals is a beneficiary.

CLASS B SHARES Class B shares are offered at net asset value with no
initial sales charge but are subject to a contingent deferred sales
charge, or CDSC, as set forth in the table below. For the purpose of
calculating the CDSC, shares are deemed to have been purchased on the
last day of the month during which they were purchased.

CDSC AS A PERCENTAGE OF
YEAR SINCE PURCHASE PAYMENT MADE AMOUNT REDEEMED
----------------------------------------------------------------
<S> <C>
First 5.0%
----------------------------------------------------------------
Second 4.0%
----------------------------------------------------------------
Third 3.0%
----------------------------------------------------------------
Fourth 2.0%
----------------------------------------------------------------
Fifth 2.0%
----------------------------------------------------------------
Sixth 1.0%
----------------------------------------------------------------
Seventh and thereafter None
----------------------------------------------------------------
</TABLE>

[sidebar]
CONTINGENT DEFERRED
SALES CHARGE OR CDSC
A fee you pay when you sell
shares of certain Morgan Stanley
Dean Witter Funds purchased
without an initial sales charge.
This fee declines the longer you
hold your shares as set forth in
the table.
[end sidebar]

Each time you place an order to sell or exchange shares, shares with
no CDSC will be sold or exchanged first, then shares with the lowest
CDSC will be sold or exchanged next. For any shares subject to a
CDSC, the CDSC will be assessed on an amount equal to the lesser of
the current market value or the cost of the shares being sold.

CDSC Waivers. A CDSC, if otherwise applicable, will be waived in the
case of:

o Sales of shares held at the time you die or become disabled
(within the definition in Section 72(m)(7) of the Internal Revenue
Code which relates to the ability to engage in gainful employment),
if the shares are: (i) registered either in your name (not a trust)
or in the names of you and your spouse as joint tenants with right
of survivorship; or (ii) held in a qualified corporate or
self-employed retirement plan, IRA or 403(b) Custodial Account,
provided in either case that the sale is requested within one year
of your death or initial determination of disability.

o Sales in connection with the following retirement plan
"distributions:" (i) lump-sum or other distributions from a
qualified corporate or self-employed retirement plan following
retirement (or, in the case of a "key employee" of a "top heavy"
plan, following attainment of age 591/2); (ii) distributions from
an IRA or 403(b) Custodial Account following attainment of age
591/2; or (iii) a tax-free return of an excess IRA contribution (a
"distribution" does not include a direct transfer of IRA, 403(b)
Custodial Account or retirement plan assets to a successor
custodian or trustee).

<PAGE>

o Sales of shares held for you as a participant in a MSDW Eligible
Plan.

o Sales of shares in connection with the Systematic Withdrawal Plan
of up to 12% annually of the value of each fund from which plan
sales are made. The percentage is determined on the date you
establish the Systematic Withdrawal Plan and based on the next
calculated share price. You may have this CDSC waiver applied in
amounts up to 1% per month, 3% per quarter, 6% semi-annually or 12%
annually. Shares with no CDSC will be sold first, followed by those
with the lowest CDSC. As such, the waiver benefit will be reduced
by the amount of your shares that are not subject to a CDSC. If you
suspend your participation in the plan, you may later resume plan
payments without requiring a new determination of the account value
for the 12% CDSC waiver.

o Sales of shares if you simultaneously invest the proceeds in the
Investment Manager's mutual fund asset allocation program, pursuant
to which investors pay an asset-based fee. Any shares you acquire
in connection with the Investment Manager's mutual fund asset
allocation program are subject to all of the terms and conditions
of that program, including termination fees, mandatory sale or
transfer restrictions on termination.

All waivers will be granted only following the Fund's distributor
receiving confirmation of your entitlement. If you believe you are
eligible for a CDSC waiver, please contact your Financial Advisor or
call (800) 869-NEWS.

Distribution Fee. Class B shares are also subject to an annual 12b-1
fee of 1.0% of the average daily net assets of Class B.

Conversion Feature. After ten (10) years, Class B shares will convert
automatically to Class A shares of the Fund with no initial sales
charge. The ten year period runs from the last day of the month in
which the shares were purchased, or in the case of Class B shares
acquired through an exchange, from the last day of the month in which
the original Class B shares were purchased; the shares will convert
to Class A shares based on their relative net asset values in the
month following the ten year period. At the same time, an equal
proportion of Class B shares acquired through automatically
reinvested distributions will convert to Class A shares on the same
basis. (Class B shares acquired in exchange for another Morgan
Stanley Dean Witter Fund originally purchased before May 1, 1997,
however, will convert to Class A shares in May 2007.)

In the case of Class B shares held in a MSDW Eligible Plan, the plan
is treated as a single investor and all Class B shares will convert
to Class A shares on the conversion date of the Class B shares of a
Morgan Stanley Dean Witter Fund purchased by that plan.

Currently, the Class B share conversion is not a taxable event; the
conversion feature may be cancelled if it is deemed a taxable event
in the future by the Internal Revenue Service.

19
<PAGE>

If you exchange your Class B shares for shares of a Money Market
Fund, a No-Load Fund, North American Government Income Trust or
Short-Term U.S. Treasury Trust, the holding period for conversion is
frozen as of the last day of the month of the exchange and resumes on
the last day of the month you exchange back into Class B shares.

Exchanging Shares Subject to a CDSC. There are special considerations
when you exchange Fund shares that are subject to a CDSC. When
determining the length of time you held the shares and the
corresponding CDSC rate, any period (starting at the end of the
month) during which you held shares of a fund that does not charge a
CDSC will not be counted. Thus, in effect the "holding period" for
purposes of calculating the CDSC is frozen upon exchanging into a
fund that does not charge a CDSC.

For example, if you held Class B shares of the Fund for one year,
exchanged to Class B of another Morgan Stanley Dean Witter
Multi-Class Fund for another year, then sold your shares, a CDSC rate
of 4% would be imposed on the shares based on a two year holding
period -- one year for each fund. However, if you had exchanged the
shares of the Fund for a Money Market Fund (which does not charge a
CDSC) instead of the Multi-Class Fund, then sold your shares, a CDSC
rate of 5% would be imposed on the shares based on a one year holding
period. The one year in the Money Market Fund would not be counted.
Nevertheless, if shares subject to a CDSC are exchanged for a fund
that does not charge a CDSC, you will receive a credit when you sell
the shares equal to the distribution (12b-1) fees you paid on those
shares while in that fund up to the amount of any applicable CDSC.

In addition, shares that are exchanged into or from a Morgan Stanley
Dean Witter Fund subject to a higher CDSC rate will be subject to the
higher rate, even if the shares are re-exchanged into a fund with a
lower CDSC rate.

CLASS C SHARES Class C shares are sold at net asset value with no
initial sales charge but are subject to a CDSC of 1.0% on sales made
within one year after the last day of the month of purchase. The CDSC
will be assessed in the same manner and with the same CDSC waivers as
with Class B shares.

Distribution Fee. Class C shares are subject to an annual
distribution (12b-1) fee of up to 1.0% of the average daily net
assets of that Class. The Class C shares' distribution fee may cause
that Class to have higher expenses and pay lower dividends than Class
A or Class D shares. Unlike Class B shares, Class C shares have no
conversion feature and, accordingly, an investor that purchases Class
C shares may be subject to distribution (12b-1) fees applicable to
Class C shares for an indefinite period.

<PAGE>

CLASS D SHARES Class D shares are offered without any sales charge on
purchases or sales and without any 12b-1 fee. Class D shares are
offered only to investors meeting an initial investment minimum of $5
million ($25 million for MSDW Eligible Plans) and the following
categories of investors:

o Investors participating in the Investment Manager's mutual fund
asset allocation program (subject to all of its terms and
conditions, including termination fees, mandatory sale or transfer
restrictions on termination) pursuant to which they pay an
asset-based fee.

o Certain investment programs that do not charge an asset-based fee
and have been approved by the Fund's distributor. However, Class D
shares are not offered for investments made through Section 529
plans (regardless of the size of the investment).

o Employee benefit plans maintained by Morgan Stanley Dean Witter
& Co. or any of its subsidiaries for the benefit of certain
employees of Morgan Stanley Dean Witter & Co. and its subsidiaries.

o Certain unit investment trusts sponsored by Dean Witter Reynolds.

o Certain other open-end investment companies whose shares are
distributed by the Fund's distributor.

o Investors who were shareholders of the Dean Witter Retirement
Series on September 11, 1998 for additional purchases for their
former Dean Witter Retirement Series account.

Meeting Class D Eligibility Minimums. To meet the $5 million ($25
million for MSDW Eligible Plans) initial investment to qualify to
purchase Class D shares you may combine: (1) purchases in a single
transaction of Class D shares of the Fund and other Morgan Stanley
Dean Witter Multi-Class Funds; and/or (2) previous purchases of Class
A and Class D shares of Multi-Class Funds and shares of FSC Funds you
currently own, along with shares of Morgan Stanley Dean Witter Funds
you currently own that you acquired in exchange for those shares.

<PAGE>

NO SALES CHARGES FOR REINVESTED CASH DISTRIBUTIONS If you receive a
cash payment representing an income dividend or capital gain and you
reinvest that amount in the applicable Class of shares by returning
the check within 30 days of the payment date, the purchased shares
would not be subject to an initial sales charge of CDSC.

PLAN OF DISTRIBUTION (RULE 12B-1 FEES) The Fund has adopted a Plan of
Distribution in accordance with Rule 12b-1 under the Investment
Company Act of 1940 with respect to the distribution of Class A, Class
B and Class C shares. The Plan allows the Fund to pay distribution
fees for the sale and distribution of these shares. It also allows the
Fund to pay for services to shareholders of Class A, Class B and Class
C shares. Because these fees are paid out of the Fund's assets on an
ongoing basis, over time these fees will increase the cost of your
investment in these Classes and may cost you more than paying other
types of sales charges.

<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand the Fund's
financial performance for the period indicated. Certain information reflects
financial results for a single Fund share throughout the period. The total
returns in the table represent the rate an investor would have earned or lost
on an investment in the Fund (assuming reinvestment of all dividends and
distributions).

This information for the year ended July 31, 2000 has been audited by Deloitte
& Touche LLP, independent auditors, whose report, along with the Fund's
financial statements, is included in the annual report, which is available upon
request.

<TABLE>
<CAPTION>
FOR THE PERIOD SEPTEMBER 28, 1999* THROUGH JULY 31,
2000**
-------------------------------------------------------
CLASS A CLASS B CLASS C CLASS D
SHARES SHARES SHARES SHARES
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA:
Net asset value, beginning of period $10.00 $10.00 $10.00 $10.00
-------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 0.06 (0.02) (0.02) 0.08
Net realized and unrealized gain 1.34 1.35 1.35 1.35
----- ----- ------ -----
Total income from investment operations 1.40 1.33 1.33 1.43
------------------------------------------------------------------------------------------------------
Less distributions from net realized gains (0.02) (0.02) (0.02) (0.02)
------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.38 $11.31 $11.31 $11.41
------------------------------------------------------------------------------------------------------
TOTAL RETURN+(1) 13.99% 13.29% 13.29% 14.30%
------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (2)(3)(4):
------------------------------------------------------------------------------------------------------
Expenses 0.75% 1.50% 1.50% 0.50%
------------------------------------------------------------------------------------------------------
Net investment income (loss) 0.58% (0.17)% (0.17)% 0.83%
------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
------------------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $22,895 $356,899 $43,901 $3,628
------------------------------------------------------------------------------------------------------
Portfolio turnover rate 2% 2% 2% 2%
------------------------------------------------------------------------------------------------------
</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.
(4) If the Fund had borne all its expenses that were reimbursed or waived by
the Investment Manager, the annualized expense and net investment income
(loss) ratios for the period ended July 31, 2000 would have been 0.90%
and 0.43%, respectively, for Class A; 1.65% and (0.32)%, respectively,
for Class B; 1.65% and (0.32)%, respectively, for Class C; and 0.65% and
0.68%, respectively, for Class D.

<PAGE>

NOTES

-----------------------------------------------------------------------

<PAGE>

MORGAN STANLEY DEAN WITTER
FAMILY OF FUNDS

The Morgan Stanley Dean Witter Family of Funds offers investors a wide
range of investment choices. Come on in and meet the family!

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
<S> <C> <C>
GROWTH FUNDS GROWTH FUNDS THEME FUNDS
Aggressive Equity Fund Financial Services Trust
American Opportunities Fund Health Sciences Trust
Capital Growth Securities Information Fund
Developing Growth Securities Natural Resource Development Securities
Growth Fund Technology Fund
Market Leader Trust GLOBAL/INTERNATIONAL FUNDS
Mid-Cap Equity Trust Competitive Edge Fund - "Best Ideas" Portfolio
New Discoveries Fund European Growth Fund
Next Generation Trust Fund of Funds - International Portfolio
Small Cap Growth Fund International Fund
Special Value Fund International SmallCap Fund
Tax-Managed Growth Fund Japan Fund
21st Century Trend Fund Latin American Growth Fund
Pacific Growth Fund
</TABLE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
<S> <C> <C>
GROWTH & Balanced Growth Fund Total Market Index Fund
INCOME FUNDS Balanced Income Fund Total Return Trust
Convertible Securities Trust Value Fund
Dividend Growth Securities Value-Added Market Series/Equity Portfolio
Equity Fund THEME FUNDS
Fund of Funds - Domestic Portfolio Real Estate Fund
Income Builder Fund Utilities Fund
S&P 500 Index Fund GLOBAL FUNDS
S&P 500 Select Fund Global Dividend Growth Securities
Strategist Fund Global Utilities Fund

</TABLE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
<S> <C> <C>
INCOME FUNDS GOVERNMENT INCOME FUNDS GLOBAL INCOME FUNDS
Federal Securities Trust North American Government Income Trust
Short-Term U.S. Treasury Trust World Wide Income Trust
U.S. Government Securities Trust TAX-FREE INCOME FUNDS
DIVERSIFIED INCOME FUNDS California Tax-Free Income Fund
Diversified Income Trust Hawaii Municipal Trust(FSC)
CORPORATE INCOME FUNDS Limited Term Municipal Trust(NL)
High Yield Securities Multi-State Municipal Series Trust (FSC)
Intermediate Income Securities New York Tax-Free Income Fund
Short-Term Bond Fund (NL) Tax-Exempt Securities Trust

</TABLE>

<TABLE>
<CAPTION>
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<S> <C> <C>
MONEY MARKET TAXABLE MONEY MARKET FUNDS TAX-FREE MONEY MARKET FUNDS
FUNDS Liquid Asset Fund(MM) California Tax-Free Daily Income Trust(MM)
U.S. Government Money Market Trust(MM) New York Municipal Money Market Trust(MM)
Tax-Free Daily Income Trust(MM)
</TABLE>

There may be funds created after this Prospectus was published. Please consult
the inside back cover of a new fund's prospectus for its designations, e.g.,
Multi-Class Fund or Money Market Fund.

Unless otherwise noted, each listed Morgan Stanley Dean Witter Fund, except for
North American Government Income Trust and Short-Term U.S. Treasury Trust, is a
Multi-Class Fund. A Multi-Class Fund is a mutual fund offering multiple Classes
of shares. The other types of funds are: NL -- No-Load (Mutual) Fund; MM --
Money Market Fund; FSC -- A mutual fund sold with a front-end sales charge and
a distribution (12b-1) fee.

<PAGE>

PROSPECTUS o SEPTEMBER 29, 2000

Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual Reports to Shareholders. In the Fund's Annual Report, you
will find a discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal year. The
Fund's Statement of Additional Information provides additional information about
the Fund. The Statement of Additional Information is incorporated herein by
reference (legally is part of this Prospectus). For a free copy of any of these
documents, to request other information about the Fund, or to make shareholder
inquiries, please call:

(800) 869-NEWS

You also may obtain information about the Fund by calling your Morgan Stanley
Dean Witter Financial Advisor or by visiting our Internet site at:

WWW.MSDWADVICE.COM/FUNDS

Information about the Fund (including the Statement of Additional Information)
can be viewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, DC. Information about the Reference Room's
operations may be obtained by calling the SEC at (202) 942-8090. Reports and
other information about the Fund are available on the EDGAR database on the
SEC's Internet site (www.sec.gov) and copies of this information may be
obtained, after paying a duplicating fee, by electronic request at the
following E-mail address: [email protected], or by writing the Public
Reference Section of the SEC, Washington, DC 20549-0102.

(THE FUND'S INVESTMENT COMPANY ACT FILE NO. IS 811-9259)

Morgan Stanley Dean Witter

TOTAL MARKET INDEX FUND

A MUTUAL FUND THAT SEEKS
TO PROVIDE INVESTMENT RESULTS
THAT, BEFORE EXPENSES, CORRESPOND
TO THE TOTAL RETURN OF THE U.S.
STOCK MARKET AS MEASURED BY THE
WILSHIRE 5000 TOTAL MARKET INDEX

[GRAPHIC OMITTED]

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION
MORGAN STANLEY DEAN WITTER
TOTAL MARKET INDEX FUND

SEPTEMBER 29, 2000

--------------------------------------------------------------------------------

This Statement of Additional Information is not a Prospectus. The
Prospectus (dated September 29, 2000) for the Morgan Stanley Dean Witter Total
Market Index Fund may be obtained without charge from the Fund at its address
or telephone number listed below or from Dean Witter Reynolds at any of its
branch offices.

Morgan Stanley Dean Witter Total Market Index Fund
Two World Trade Center
New York, NY 10048
(800) 869-NEWS

<PAGE>

TABLE OF CONTENTS
--------------------------------------------------------------------------------

<TABLE>
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I. Fund History ................................................... 4
II. Description of the Fund and Its Investments and Risks .......... 4
A. Classification .............................................. 4
B. Investment Strategies and Risks ............................. 4
C. Fund Policies/Investment Restrictions ....................... 11
III. Management of the Fund ......................................... 12
A. Board of Trustees ........................................... 12
B. Management Information ...................................... 13
C. Compensation ................................................ 17
IV. Control Persons and Principal Holders of Securities ............ 19
V. Investment Management and Other Services ....................... 19
A. Investment Manager .......................................... 19
B. Principal Underwriter ....................................... 20
C. Services Provided by the Investment Manager ................. 20
D. Dealer Reallowances ......................................... 21
E. Rule 12b-1 Plan ............................................. 21
F. Other Service Providers ..................................... 25
G. Codes of Ethics ............................................. 26
VI. Brokerage Allocation and Other Practices ....................... 26
A. Brokerage Transactions ...................................... 26
B. Commissions ................................................. 26
C. Brokerage Selection ......................................... 27
D. Regular Broker-Dealers ...................................... 27
VII. Capital Stock and Other Securities ............................. 28
VIII. Purchase, Redemption and Pricing of Shares ..................... 28
A. Purchase/Redemption of Shares ............................... 28
B. Offering Price .............................................. 29
IX. Taxation of the Fund and Shareholders .......................... 30
X. Underwriters ................................................... 31
XI. Calculation of Performance Data ................................ 32
XII. Financial Statements ........................................... 32
</TABLE>

<PAGE>

GLOSSARY OF SELECTED DEFINED TERMS

The terms defined in this glossary are frequently used in this Statement
of Additional Information (other terms used occasionally are defined in the
text of the document).

"Custodian" - The Bank of New York.

"Dean Witter Reynolds" - Dean Witter Reynolds Inc., a wholly-owned
broker-dealer subsidiary of MSDW.

"Distributor" - Morgan Stanley Dean Witter Distributors Inc., a
wholly-owned broker-dealer subsidiary of MSDW.

"Financial Advisors" - Morgan Stanley Dean Witter authorized financial
services representatives.

"Fund" - Morgan Stanley Dean Witter Total Market Index Fund, a registered
open-end investment company.

"Independent Trustees" - Trustees who are not "interested persons" (as
defined by the Investment Company Act) of the Fund.

"Investment Manager" - Morgan Stanley Dean Witter Advisors Inc., a
wholly-owned investment advisor subsidiary of MSDW.

"Morgan Stanley & Co." - Morgan Stanley & Co. Incorporated, a wholly-owned
broker-dealer subsidiary of MSDW.

"Morgan Stanley Dean Witter Funds" - Registered investment companies (i)
for which the Investment Manager serves as the investment advisor; and (ii)
that hold themselves out to investors as related companies for investment and
investor services.

"MSDW" - Morgan Stanley Dean Witter & Co., a preeminent global financial
services firm.

"MSDW Services Company" - Morgan Stanley Dean Witter Services Company
Inc., a wholly-owned fund services subsidiary of the Investment Manager.

"Transfer Agent" - Morgan Stanley Dean Witter Trust FSB, a wholly-owned
transfer agent subsidiary of MSDW.

"Trustees" - The Board of Trustees of the Fund.

<PAGE>

I. FUND HISTORY
--------------------------------------------------------------------------------
The Fund was organized as a Massachusetts business trust, under a
Declaration of Trust, on March 11, 1999.

II. DESCRIPTION OF THE FUND AND ITS INVESTMENTS AND RISKS
--------------------------------------------------------------------------------
A. CLASSIFICATION

The Fund is an open-end, diversified management investment company whose
investment objective is to provide investment results that, before expenses,
correspond to the total return of the Wilshire 5000 Total Market Index.

B. INVESTMENT STRATEGIES AND RISKS

The following discussion of the Fund's investment strategies and risks
should be read with the sections of the Fund's Prospectus titled "Principal
Investment Strategies," "Principal Risks," "Additional Investment Strategy
Information" and "Additional Risk Information."

OPTIONS AND FUTURES TRANSACTIONS. The Fund may engage in transactions in
listed and OTC options. Listed options are issued or guaranteed by the exchange
on which they are traded or by a clearing corporation such as the Options
Clearing Corporation ("OCC"). Ownership of a listed call option gives the Fund
the right to buy from the OCC (in the U.S.) or other clearing corporation or
exchange, the underlying security or currency covered by the option at the
stated exercise price (the price per unit of the underlying security) by filing
an exercise notice prior to the expiration date of the option. The writer
(seller) of the option would then have the obligation to sell to the OCC (in
the U.S.) or other clearing corporation or exchange, the underlying security or
currency at that exercise price prior to the expiration date of the option,
regardless of its then current market price. Ownership of a listed put option
would give the Fund the right to sell the underlying security or currency to
the OCC (in the U.S.) or other clearing corporation or exchange, at the stated
exercise price. Upon notice of exercise of the put option, the writer of the
put would have the obligation to purchase the underlying security or currency
from the OCC (in the U.S.) or other clearing corporation or exchange, at the
exercise price.

Covered Call Writing. The Fund is permitted to write covered call options
on portfolio securities and on the U.S. dollar and foreign currencies in which
they are denominated, without limit. The Fund will receive from the purchaser,
in return for a call it has written, a "premium;" i.e., the price of the
option. Receipt of these premiums may better enable the Fund to earn a higher
level of current income than it would earn from holding the underlying
securities (or currencies) alone. Moreover, the premium received will offset a
portion of the potential loss incurred by the Fund if the securities (or
currencies) underlying the option decline in value.

The Fund may be required, at any time during the option period, to deliver
the underlying security (or currency) against payment of the exercise price on
any calls it has written. This obligation is terminated upon the expiration of
the option period or at such earlier time when the writer effects a closing
purchase transaction. A closing purchase transaction is accomplished by
purchasing an option of the same series as the option previously written.
However, once the Fund has been assigned an exercise notice, the Fund will be
unable to effect a closing purchase transaction.

A call option is "covered" if the Fund owns the underlying security
subject to the option or has an absolute and immediate right to acquire that
security without additional cash consideration (or for additional consideration
(in cash, Treasury bills or other liquid portfolio securities) held in a
segregated account on the Fund's books) upon conversion or exchange of other
securities held in its portfolio. A call option is also covered if the Fund
holds a call on the same security as the call written where the exercise price
of the call held is (i) equal to or less than the exercise price of the call
written or (ii) greater than the exercise price of the call written if the
difference is maintained by the Fund in cash, Treasury bills or other liquid
portfolio securities in a segregated account on the Fund's books.

Options written by the Fund normally have expiration dates of from up to
eighteen months from the date written. The exercise price of a call option may
be below, equal to or above the current market value of the underlying security
at the time the option is written.

Covered Put Writing. A writer of a covered put option incurs an obligation
to buy the security underlying the option from the purchaser of the put, at the
option's exercise price at any time during the

<PAGE>

option period, at the purchaser's election. Through the writing of a put
option, the Fund would receive income from the premium paid by purchasers. The
potential gain on a covered put option is limited to the premium received on
the option (less the commissions paid on the transaction). During the option
period, the Fund may be required, at any time, to make payment of the exercise
price against delivery of the underlying security (or currency). A put option
is "covered" if the Fund maintains cash, Treasury bills or other liquid
portfolio securities with a value equal to the exercise price in a segregated
account on the Fund's books, or holds a put on the same security as the put
written where the exercise price of the put held is equal to or greater than
the exercise price of the put written. The aggregate value of the obligations
underlying puts may not exceed 50% of the Fund's assets. The operation of and
limitations on covered put options in other respects are substantially
identical to those of call options.

Purchasing Call and Put Options. The Fund may purchase listed and OTC call
and put options in amounts equaling up to 5% of its total assets. The purchase
of a call option would enable the Fund, in return for the premium paid to lock
in a purchase price for a security or currency during the term of the option.
The purchase of a put option would enable the Fund, in return for a premium
paid, to lock in a price at which it may sell a security or currency during the
term of the option.

OTC Options. OTC options are purchased from or sold (written) to dealers
or financial institutions which have entered into direct agreements with the
Fund. With OTC options, such variables as expiration date, exercise price and
premium will be agreed upon between the Fund and the transacting dealer,
without the intermediation of a third party such as the OCC. The Fund will
engage in OTC option transactions only with member banks of the Federal Reserve
Bank System or primary dealers in U.S. Government securities or with affiliates
of such banks or dealers.

Risks of Options Transactions. During the option period, the covered call
writer has, in return for the premium on the option, given up the opportunity
for capital appreciation above the exercise price should the market price of
the underlying security (or the value of its denominated currency) increase,
but has retained the risk of loss should the price of the underlying security
(or the value of its denominated currency) decline. The covered put writer also
retains the risk of loss should the market value of the underlying security
decline below the exercise price of the option less the premium received on the
sale of the option. In both cases, the writer has no control over the time when
it may be required to fulfill its obligation as a writer of the option. Prior
to exercise or expiration, an option position can only be terminated by
entering into a closing purchase or sale transaction. Once an option writer has
received an exercise notice, it cannot effect a closing purchase transaction in
order to terminate its obligation under the option and must deliver or receive
the underlying securities at the exercise price.

The Fund's ability to close out its position as a writer of an option is
dependent upon the existence of a liquid secondary market on option exchanges.
There is no assurance that such a market will exist, particularly in the case
of OTC options.

In the event of the bankruptcy of a broker through which the Fund engages
in transactions in options, the Fund could experience delays and/or losses in
liquidating open positions purchased or sold through the broker and/or incur a
loss of all or part of its margin deposits with the broker. In the case of OTC
options, if the transacting dealer fails to make or take delivery of the
securities underlying an option it has written, in accordance with the terms of
that option, due to insolvency or otherwise, the Fund would lose the premium
paid for the option as well as any anticipated benefit of the transaction.

Each of the exchanges has established limitations governing the maximum
number of call or put options on the same underlying security which may be
written by a single investor, whether acting alone or in concert with others
(regardless of whether such options are written on the same or different
exchanges or are held or written on one or more accounts or through one or more
brokers). An exchange may order the liquidation of positions found to be in
violation of these limits and it may impose other sanctions or restrictions.
These position limits may restrict the number of listed options which the Fund
may write.

The hours of trading for options may not conform to the hours during which
the underlying securities are traded. To the extent that the option markets
close before the markets for the underlying securities, significant price and
rate movements can take place in the underlying markets that cannot be
reflected in the option markets.

<PAGE>

Stock Index Options. The Fund may invest in options on broadly based
indexes. Options on stock indexes are similar to options on stock except that,
rather than the right to take or make delivery of stock at a specified price,
an option on a stock index gives the holder the right to receive, upon exercise
of the option, an amount of cash if the closing level of the stock index upon
which the option is based is greater than, in the case of a call, or less than,
in the case of a put, the exercise price of the option. This amount of cash is
equal to such difference between the closing price of the index and the
exercise price of the option expressed in dollars times a specified multiple.
The writer of the option is obligated, in return for the premium received, to
make delivery of this amount.

Risks of Options on Indexes. Because exercises of stock index options are
settled in cash, the Fund could not, if it wrote a call option, provide in
advance for its potential settlement obligations by acquiring and holding the
underlying securities. A call writer can offset some of the risk of its writing
position by holding a diversified portfolio of stocks similar to those on which
the underlying index is based. However, most investors cannot, as a practical
matter, acquire and hold a portfolio containing exactly the same stocks as the
underlying index, and, as a result, bear a risk that the value of the
securities held will vary from the value of the index. Even if an index call
writer could assemble a stock portfolio that exactly reproduced the composition
of the underlying index, the writer still would not be fully covered from a
risk standpoint because of the "timing risk" inherent in writing index options.

When an index option is exercised, the amount of cash that the holder is
entitled to receive is determined by the difference between the exercise price
and the closing index level on the date when the option is exercised. As with
other kinds of options, the writer will not learn that it had been assigned
until the next business day, at the earliest. The time lag between exercise and
notice of assignment poses no risk for the writer of a covered call on a
specific underlying security, such as a common stock, because there the
writer's obligation is to deliver the underlying security, not to pay its value
as of a fixed time in the past. So long as the writer already owns the
underlying security, it can satisfy its settlement obligations by simply
delivering it, and the risk that its value may have declined since the exercise
date is borne by the exercising holder. In contrast, even if the writer of an
index call holds stocks that exactly match the composition of the underlying
index, it will not be able to satisfy its assignment obligations by delivering
those stocks against payment of the exercise price. Instead, it will be
required to pay cash in an amount based on the closing index value on the
exercise date; and by the time it learns that it has been assigned, the index
may have declined, with a corresponding decrease in the value of its stock
portfolio. This "timing risk" is an inherent limitation on the ability of index
call writers to cover their risk exposure by holding stock positions.

A holder of an index option who exercises it before the closing index
value for that day is available runs the risk that the level of the underlying
index may subsequently change. If a change causes the exercised option to fall
out-of-the-money, the exercising holder will be required to pay the difference
between the closing index value and the exercise price of the option (times the
applicable multiplier) to the assigned writer.

If dissemination of the current level of an underlying index is
interrupted, or if trading is interrupted in stocks accounting for a
substantial portion of the value of an index, the trading of options on that
index will ordinarily be halted. If the trading of options on an underlying
index is halted, an exchange may impose restrictions prohibiting the exercise
of such options.

Futures Contracts. The Fund may purchase and sell interest rate, currency
and index 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.

A futures contract purchaser incurs an obligation to take delivery of a
specified amount of the obligation underlying the contract at a specified time
in the future for a specified price. A seller of a futures contract incurs an
obligation to deliver the specified amount of the underlying obligation at a
specified time in return for an agreed upon price. The purchase of a futures
contract enables the Fund, during the term of the contract, to lock in a price
at which it may purchase a security or currency and protect against a rise in
prices pending purchase of portfolio securities. The sale of a futures contract
enables the Fund to lock in a price at which it may sell a security or currency
and protect against declines in the value of portfolio securities.

<PAGE>

Although most futures contracts call for actual delivery or acceptance of
securities, the contracts usually are closed out before the settlement date
without the making or taking of delivery. Index futures contracts provide for
the delivery of an amount of cash equal to a specified dollar amount times the
difference between the index value at the open or close of the last trading day
of the contract and the futures contract price. A futures contract sale is
closed out by effecting a futures contract purchase for the same aggregate
amount of the specific type of security (currency) and the same delivery date.
If the sale price exceeds the offsetting purchase price, the seller would be
paid the difference and would realize a gain. If the offsetting purchase price
exceeds the sale price, the seller would pay the difference and would realize a
loss. Similarly, a futures contract purchase is closed out by effecting a
futures contract sale for the same aggregate amount of the specific type of
security (currency) and the same delivery date. If the offsetting sale price
exceeds the purchase price, the purchaser would realize a gain, whereas if the
purchase price exceeds the offsetting sale price, the purchaser would realize a
loss. There is no assurance that the Fund will be able to enter into a closing
transaction.

Margin. If the Fund enters into a futures contract, it is initially
required to deposit an "initial margin" of cash or U.S. Government securities
or other liquid portfolio securities ranging from approximately 2% to 5% of the
contract amount. Initial margin requirements are established by the exchanges
on which futures contracts trade and may, from time to time, change. In
addition, brokers may establish margin deposit requirements in excess of those
required by the exchanges.

Initial margin in futures transactions is different from margin in
securities transactions in that initial margin does not involve the borrowing
of funds by a broker's client but is, rather, a good faith deposit on the
futures contract which will be returned to the Fund upon the proper termination
of the futures contract. The margin deposits made are marked to market daily
and the Fund may be required to make subsequent deposits of cash or U.S.
Government securities, called "variation margin," which are reflective of price
fluctuations in the futures contract.

Options on Futures Contracts. The Fund may purchase and write call and put
options on futures contracts and enter into closing transactions with respect
to such options to terminate an existing position. An option on a futures
contract gives the purchaser the right (in return for the premium paid), and
the writer the obligation, to assume a position in a futures contract (a long
position if the option is a call and a short position if the option is a put)
at a specified exercise price at any time during the term of the option. Upon
exercise of the option, the delivery of the futures position by the writer of
the option to the holder of the option is accompanied by delivery of the
accumulated balance in the writer's futures margin account, which represents
the amount by which the market price of the futures contract at the time of
exercise exceeds, in the case of a call, or is less than, in the case of a put,
the exercise price of the option on the futures contract.

The writer of an option on a futures contract is required to deposit
initial and variation margin pursuant to requirements similar to those
applicable to futures contracts. Premiums received from the writing of an
option on a futures contract are included in initial margin deposits.

Limitations on Futures Contracts and Options on Futures. The Fund may not
enter into futures contracts or purchase related options thereon if,
immediately thereafter, the amount committed to margin plus the amount paid for
premiums for unexpired options on futures contracts exceeds 5% of the value of
the Fund's total assets, after taking into account unrealized gains and
unrealized losses on such contracts it has entered into, provided, however,
that in the case of an option that is in-the-money (the exercise price of the
call (put) option is less (more) than the market price of the underlying
security) at the time of purchase, the in-the-money amount may be excluded in
calculating the 5%. However, there is no overall limitation on the percentage
of the Fund's net assets which may be subject to a hedge position.

Risks of Transactions in Futures Contracts and Related Options. The prices
of securities and indexes subject to futures contracts (and thereby the futures
contract prices) may correlate imperfectly with the behavior of the cash prices
of the Fund's portfolio securities (and the currencies in which they are
denominated). Also, prices of futures contracts may not move in tandem with the
changes in prevailing interest rates, market movements and/or currency exchange
rates against which the Fund

7
<PAGE>

seeks a hedge. A correlation may also be distorted (a) temporarily, by
short-term traders' seeking to profit from the difference between a contract or
security price objective and their cost of borrowed funds; (b) by investors in
futures contracts electing to close out their contracts through offsetting
transactions rather than meet margin deposit requirements; (c) by investors in
futures contracts opting to make or take delivery of underlying securities
rather than engage in closing transactions, thereby reducing liquidity of the
futures market; and (d) temporarily, by speculators who view the deposit
requirements in the futures markets as less onerous than margin requirements in
the cash market. Due to the possibility of price distortion in the futures
market and because of the possible imperfect correlation between movements in
the prices of securities and movements in the prices of futures contracts, a
correct forecast of interest rate, currency exchange rate and/or market
movement trends by the Investment Manager may still not result in a successful
hedging transaction.

There is no assurance that a liquid secondary market will exist for
futures contracts and related options in which the Fund may invest. In the
event a liquid market does not exist, it may not be possible to close out a
futures position and, in the event of adverse price movements, the Fund would
continue to be required to make daily cash payments of variation margin. The
absence of a liquid market in futures contracts might cause the Fund to make or
take delivery of the underlying securities (currencies) at a time when it may
be disadvantageous to do so.

Exchanges also limit the amount by which the price of a futures contract
may move on any day. If the price moves equal the daily limit on successive
days, then it may prove impossible to liquidate a futures position until the
daily limit moves have ceased. In the event of adverse price movements, the
Fund would continue to be required to make daily cash payments of variation
margin on open futures positions. In these situations, if the Fund has
insufficient cash, it may have to sell portfolio securities to meet daily
variation margin requirements at a time when it may be disadvantageous to do
so. In addition, the Fund may be required to take or make delivery of the
instruments underlying interest rate futures contracts it holds at a time when
it is disadvantageous to do so. The inability to close out options and futures
positions could also have an adverse impact on the Fund's ability to
effectively hedge its portfolio.

In the event of the bankruptcy of a broker through which the Fund engages
in transactions in futures or options thereon, the Fund could experience delays
and/or losses in liquidating open positions purchased or sold through the
broker and/or incur a loss of all or part of its margin deposits with the
broker.

If the Fund maintains a short position in a futures contract or has sold a
call option in a futures contract, it will cover this position by holding, in a
segregated account maintained on the books of the Fund, cash, U.S. government
securities or other liquid portfolio securities equal in value (when added to
any initial or variation margin on deposit) to the market value of the
securities underlying the futures contract or the exercise price of the option.
Such a position may also be covered by owning the securities underlying the
futures contract (in the case of a stock index futures contract a portfolio of
securities substantially replicating the relevant index), or by holding a call
option permitting the Fund to purchase the same contract at a price no higher
than the price at which the short position was established.

In addition, if the Fund holds a long position in a futures contract or
has sold a put option on a futures contract, it will hold cash, U.S. government
securities or other liquid portfolio securities equal to the purchase price of
the contract or the exercise price of the put option (less the amount of
initial or variation margin on deposit) in a segregated account maintained on
the books of the Fund. Alternatively, the Fund could cover its long position by
purchasing a put option on the same futures contract with an exercise price as
high or higher than the price of the contract held by the Fund.

MONEY MARKET SECURITIES. The Fund may invest up to 20% of its assets in
various money market securities for cash management purposes or when assuming a
temporary defensive position, which among others may include commercial paper,
bank acceptances, bank obligations, corporate debt securities, certificates of
deposit, U.S. Government securities, obligations of savings institutions and
repurchase agreements. Such securities are limited to:

U.S. Government Securities. Obligations issued or guaranteed as to
principal and interest by the United States or its agencies (such as the
Export-Import Bank of the United States, Federal Housing Administration and
Government National Mortgage Association) or its instrumentalities (such as the
Federal Home Loan Bank), including Treasury bills, notes and bonds;

<PAGE>

Bank Obligations. Obligations (including certificates of deposit, time
deposits and bankers' acceptances) of banks subject to regulation by the U.S.
Government and having total assets of $1 billion or more, and instruments
secured by such obligations, not including obligations of foreign branches of
domestic banks except to the extent below;

Eurodollar Certificates of Deposit. Eurodollar certificates of deposit
issued by foreign branches of domestic banks having total assets of $1 billion
or more;

Obligations of Savings Institutions. Certificates of deposit of savings
banks and savings and loan associations, having total assets of $1 billion or
more;

Fully Insured Certificates of Deposit. Certificates of deposit of banks
and savings institutions, having total assets of less than $1 billion, if the
principal amount of the obligation is federally insured by the Bank Insurance
Fund or the Savings Association Insurance Fund (each of which is administered
by the FDIC), limited to $100,000 principal amount per certificate and to 10%
or less of the Fund's total assets in all such obligations and in all illiquid
assets, in the aggregate;

Commercial Paper. Commercial paper rated within the two highest grades by
Standard & Poor's Corporation ("S&P") or the two highest grade by Moody's
Investors Service, Inc. ("Moody's") or, if not rated, issued by a company
having an outstanding debt issue rated at least AA by S&P or Aa by Moody's; and

Repurchase Agreements. The Fund may invest in repurchase agreements. When
cash may be available for only a few days, it may be invested by the Fund in
repurchase agreements until such time as it may otherwise be invested or used
for payments of obligations of the Fund. These agreements, which may be viewed
as a type of secured lending by the Fund, typically involve the acquisition by
the Fund of debt securities from a selling financial institution such as a
bank, savings and loan association or broker-dealer. The agreement provides
that the Fund will sell back to the institution, and that the institution will
repurchase, the underlying security serving as collateral at a specified price
and at a fixed time in the future, usually not more than seven days from the
date of purchase. The collateral will be marked-to-market daily to determine
that the value of the collateral, as specified in the agreement, does not
decrease below the purchase price plus accrued interest. If such decrease
occurs, additional collateral will be requested and, when received, added to
the account to maintain full collateralization. The Fund will accrue interest
from the institution until the time when the repurchase is to occur. Although
this date is deemed by the Fund to be the maturity date of a repurchase
agreement, the maturities of securities subject to repurchase agreements are
not subject to any limits.

While repurchase agreements involve certain risks not associated with
direct investments in debt securities, the Fund follows procedures designed to
minimize such risks. These procedures include effecting repurchase transactions
only with large, well-capitalized and well-established financial institutions
whose financial condition will be continually monitored by the Investment
Manager subject to procedures established by the Trustees. In addition, as
described above, the value of the collateral underlying the repurchase
agreement will be at least equal to the repurchase price, including any accrued
interest earned on the repurchase agreement. In the event of a default or
bankruptcy by a selling financial institution, the Fund will seek to liquidate
such collateral. However, the exercising of the Fund's right to liquidate such
collateral could involve certain costs or delays and, to the extent that
proceeds from any sale upon a default of the obligation to repurchase were less
than the repurchase price, the Fund could suffer a loss. It is the current
policy of the Fund not to invest in repurchase agreements that do not mature
within seven days if any such investment, together with any other illiquid
assets held by the Fund, amounts to more than 15% of its net assets.

CONVERTIBLE SECURITIES. The Fund may invest in fixed-income securities
which are convertible into common stock of the issuer. Convertible securities
rank senior to common stocks in a corporation's capital structure and,
therefore, entail less risk than the corporation's common stock. The value of a
convertible security is a function of its "investment value" (its value as if
it did not have a conversion privilege), and its "conversion value" (the
security's worth if it were to be exchanged for the underlying security, at
market value, pursuant to its conversion privilege).

<PAGE>

To the extent that a convertible security's investment value is greater
than its conversion value, its price will be primarily a reflection of such
investment value and its price will be likely to increase when interest rates
fall and decrease when interest rates rise, as with a fixed-income security
(the credit standing of the issuer and other factors may also have an effect on
the convertible security's value). If the conversion value exceeds the
investment value, the price of the convertible security will rise above its
investment value and, in addition, will sell at some premium over its
conversion value. (This premium represents the price investors are willing to
pay for the privilege of purchasing a fixed-income security with a possibility
of capital appreciation due to the conversion privilege.) At such times the
price of the convertible security will tend to fluctuate directly with the
price of the underlying equity security. Convertible securities may be
purchased by the Fund at varying price levels above their investment values
and/or their conversion values in keeping with the Fund's objective.

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES AND FORWARD COMMITMENTS. From
time to time the Fund may purchase securities on a when-issued or delayed
delivery basis or may purchase or sell securities on a forward commitment
basis. When these transactions are negotiated, the price is fixed at the time
of the commitment, but delivery and payment can take place a month or more
after the date of commitment. While the Fund will only purchase securities on a
when-issued, delayed delivery or forward commitment basis with the intention of
acquiring the securities, the Fund may sell the securities before the
settlement date, if it is deemed advisable. The securities so purchased or sold
are subject to market fluctuation and no interest or dividends accrue to the
purchaser prior to the settlement date.

At the time the Fund makes the commitment to purchase or sell securities
on a when-issued, delayed delivery or forward commitment basis, it will record
the transaction and thereafter reflect the value, each day, of such security
purchased, or if a sale, the proceeds to be received, in determining its net
asset value. At the time of delivery of the securities, their value may be more
or less than the purchase or sale price. An increase in the percentage of the
Fund's assets committed to the purchase of securities on a when-issued, delayed
delivery or forward commitment basis may increase the volatility of its net
asset value. The Fund will also establish a segregated account on the Fund's
books in which it will continually maintain cash or cash equivalents or other
liquid portfolio securities equal in value to commitments to purchase
securities on a when-issued, delayed delivery or forward commitment basis.

WHEN, AS AND IF ISSUED SECURITIES. The Fund may purchase securities on a
"when, as and if issued" basis under which the issuance of the security depends
upon the occurrence of a subsequent event, such as approval of a merger,
corporate reorganization or debt restructuring. The commitment for the purchase
of any such security will not be recognized in the portfolio of the Fund until
the Investment Manager determines that issuance of the security is probable. At
that time, the Fund will record the transaction and, in determining its net
asset value, will reflect the value of the security daily. At that time, the
Fund will also establish a segregated account on the Fund's books in which it
will maintain cash or cash equivalents or other liquid portfolio securities
equal in value to recognized commitments for such securities.

The value of the Fund's commitments to purchase the securities of any one
issuer, together with the value of all securities of such issuer owned by the
Fund, may not exceed 5% of the value of the Fund's total assets at the time the
initial commitment to purchase such securities is made. An increase in the
percentage of the Fund's total assets committed to the purchase of securities
on a "when, as and if issued" basis may increase the volatility of its net
asset value. The Fund may also sell securities on a "when, as and if issued"
basis provided that the issuance of the security will result automatically from
the exchange or conversion of a security owned by the Fund at the time of sale.

PRIVATE PLACEMENTS AND RESTRICTED SECURITIES. The Fund may invest up to
15% of its net assets in securities which are subject to restrictions on resale
because they have not been registered under the Securities Act of 1933 (the
"Securities Act"), or which are otherwise not readily marketable. (Securities
eligible for resale pursuant to Rule 144A under the Securities Act, and
determined to be liquid pursuant to the procedures discussed in the following
paragraph, are not subject to the foregoing restriction.) These securities are
generally referred to as "private placements" or "restricted securities."
Limitations

<PAGE>

on the resale of these securities may have an adverse effect on their
marketability, and may prevent the Fund from disposing of them promptly at
reasonable prices. The Fund may have to bear the expense of registering the
securities for resale and the risk of substantial delays in effecting the
registration.

Rule 144A permits the Fund to sell restricted securities to qualified
institutional buyers without limitation. The Adviser, pursuant to procedures
adopted by the Trustees, will make a determination as to the liquidity of each
restricted security purchased by the Fund. If a restricted security is
determined to be "liquid," the security will not be included within the
category "illiquid securities," which may not exceed 15% of the Fund's net
assets. However, investing in Rule 144A securities could have the effect of
increasing the level of Fund illiquidity to the extent the Fund, at a
particular point in time, may be unable to find qualified institutional buyers
interested in purchasing such securities.

WARRANTS AND SUBSCRIPTION RIGHTS. The Fund may acquire warrants and
subscription rights attached to other securities without limit. A warrant is,
in effect, an option to purchase equity securities at a specific price,
generally valid for a specific period of time, and has no voting rights, pays
no dividends and has no rights with respect to the corporation issuing it.

A subscription right is a privilege granted to existing shareholders of a
corporation to subscribe to shares of a new issue of common stock before it is
offered to the public. A subscription right normally has a life of two to four
weeks and a subscription price lower than the current market value of the
common stock. The Fund may invest up to 5% of the value of its net assets in
rights.

C. FUND POLICIES/INVESTMENT RESTRICTIONS

The investment objective, policies and restrictions listed below have been
adopted by the Fund as fundamental policies. Under the Investment Company Act
of 1940 (the "Investment Company Act"), a fundamental policy may not be changed
without the vote of a majority of the outstanding voting securities of the
Fund. The Investment Company Act defines a majority as the lesser of (a) 67% or
more of the shares present at a meeting of shareholders, if the holders of 50%
of the outstanding shares of the Fund are present or represented by proxy; or
(b) more than 50% of the outstanding shares of the Fund. For purposes of the
following restrictions: (i) all percentage limitations apply immediately after
a purchase or initial investment; and (ii) any subsequent change in any
applicable percentage resulting from market fluctuations or other changes in
total or net assets does not require elimination of any security from the
portfolio.

The Fund will:

1. Seek to provide investment results that, before expenses, correspond to
the total return of the Wilshire 5000 Total Market Index.

The Fund may not:

1. With respect to 75% of its total assets, invest more than 5% of the
value of its total assets in the securities of any one issuer (other
than obligations issued, or guaranteed by, the United States Government,
its agencies or instrumentalities).

2. With respect to 75% of its total assets, purchase more than 10% of all
outstanding voting securities or any class of securities of any one
issuer.

3. Invest 25% or more of the value of its total assets in securities of
issuers in any one industry. This restriction does not apply to
obligations issued or guaranteed by the United States Government, its
agencies or instrumentalities or to cash equivalents.

4. Purchase or sell real estate or interests therein (including limited
partnership interests), although the Fund may purchase securities of
issuers which engage in real estate operations and securities secured by
real estate or interests therein.

5. Purchase or sell commodities, except that the Fund may purchase or sell
(write) futures contracts and related options thereon.

<PAGE>

6. Borrow money, except that the Fund may borrow from a bank for temporary
or emergency purposes, in amounts not exceeding 5% (taken at the lower
of cost or current value) of its total assets (not including the amount
borrowed).

7. Pledge its assets or assign or otherwise encumber them except to secure
permitted borrowings. For the purpose of this restriction, collateral
arrangements with respect to the writing of options and collateral
arrangements with respect to initial or variation margin for futures are
not deemed to be pledges of assets.

8. Issue senior securities as defined in the Investment Company Act,
except insofar as the Fund may be deemed to have issued a senior
security by reason of: (a) entering into any repurchase agreement; (b)
borrowing money in accordance with restrictions described above; or (c)
lending portfolio securities.

9. Make loans of money or securities, except: (a) by the purchase of debt
obligations in which the Fund may invest consistent with its investment
objective and policies; (b) by investment in repurchase agreements; or
(c) by lending its portfolio securities.

10. Purchase securities on margin, except for short-term loans as are
necessary for the clearance of portfolio securities. The deposit or
payment by the Fund of initial or variation margin in connection with
futures contracts or related options thereon is not considered the
purchase of a security on margin.

11. Engage in the underwriting of securities, except insofar as the Fund
may be deemed an underwriter under the Securities Act in disposing of a
portfolio security.

12. Purchase securities of other investment companies unless immediately
thereafter not more than (a) 5% of the Fund's total assets would be
invested in such company; and (b) 10% of the Fund's total assets would
be invested in such securities. Investments in connection with a merger,
consolidation, reorganization or acquisition of assets are not subject
to this restriction.

As a non-fundamental policy the Fund may not:

1. Invest for the purpose of exercising control or management of any
other issuer.

2. Make short sales.

Notwithstanding any other investment policy or restriction, the Fund may
seek to achieve its investment objective by investing all or substantially all
of its assets in another investment company having substantially the same
investment objective and policies as the Fund.

III. MANAGEMENT OF THE FUND
--------------------------------------------------------------------------------
A. BOARD OF TRUSTEES

The Board of Trustees of the Fund oversees the management of the Fund but
does not itself manage the Fund. The Trustees review various services provided
by or under the direction of the Investment Manager to ensure that the Fund's
general investment policies and programs are properly carried out. The Trustees
also conduct their review to ensure that administrative services are provided
to the Fund in a satisfactory manner.

Under state law, the duties of the Trustees are generally characterized as
a duty of loyalty and a duty of care. The duty of loyalty requires a Trustee to
exercise his or her powers in the interest of the Fund and not the Trustee's
own interest or the interest of another person or organization. A Trustee
satisfies his or her duty of care by acting in good faith with the care of an
ordinarily prudent person and in a manner the Trustee reasonably believes to be
in the best interest of the Fund and its shareholders.

12
<PAGE>

B. MANAGEMENT INFORMATION

TRUSTEES AND OFFICERS. The Board of the Fund consists of nine (9)
Trustees. These same individuals also serve as directors or trustees for all of
the Morgan Stanley Dean Witter Funds. Six Trustees (67% of the total number)
have no affiliation or business connection with the Investment Manager or any
of its affiliated persons and do not own any stock or other securities issued
by the Investment Manager's parent company, MSDW. These are the
"non-interested" or "independent" Trustees. The other three Trustees (the
"management Trustees") are affiliated with the Investment Manager.

The Trustees and executive officers of the Fund, their principal business
occupations during the last five years and their affiliations, if any, with the
Investment Manager, and with the Morgan Stanley Dean Witter Funds (there were
93 such funds as of the calendar year ended December 31, 1999), are shown
below.

<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
------------------------------------------- ----------------------------------------------------
<S> <C>
Michael Bozic (59) ........................ Vice Chairman of Kmart Corporation (since
Trustee December 1998); Director of Trustee of the Morgan
c/o Kmart Corporation Stanley Dean Witter Funds; formerly Chairman
3100 West Big Beaver Road and Chief Executive Officer of Levitz Furniture
Troy, Michigan Corporation (November 1995-November 1998) and
President and Chief Executive Officer of Hills
Department Stores (May 1991-July 1995); formerly
variously Chairman, Chief Executive Officer,
President and Chief Operating Officer (1987-1991)
of the Sears Merchandise Group of Sears, Roebuck
and Co.; Director of Weirton Steel Corporation.

Charles A. Fiumefreddo* (67) .............. Chairman, Director or Trustee and Chief Executive
Chairman of the Board Officer of the Morgan Stanley Dean Witter Funds;
Chief Executive Officer and Trustee formerly Chairman, Chief Executive Officer and
Two World Trade Center Director of the Investment Manager, the Distributor
New York, New York and MSDW Services Company; Executive Vice
President and Director of Dean Witter Reynolds;
Chairman and Director of the Transfer Agent;
formerly Director and/or officer of various MSDW
subsidiaries (until June 1998).

Edwin J. Garn (67) ........................ Director or Trustee of the Morgan Stanley Dean
Trustee Witter Funds; formerly United States Senator
c/o Summit Ventures LLC (R-Utah) (1974-1992) and Chairman, Senate
1 Utah Center Banking Committee (1980-1986); formerly Mayor
201 S. Main Street of Salt Lake City, Utah (1971-1974); formerly
Salt Lake City, Utah Astronaut, Space Shuttle Discovery (April 12-19,
1985); Vice Chairman, Huntsman Corporation
(chemical company); Director of Franklin Covey
(time management systems), BMW Bank of North
America, Inc. (industrial loan corporation), United
Space Alliance (joint venture between Lockheed
Martin and the Boeing Company) and Nuskin Asia
Pacific (multilevel marketing); member of the Utah
Regional Advisory Board of Pacific Corp.; member
of the board of various civic and charitable
organizations.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
------------------------------------------- ----------------------------------------------------
<S> <C>
Wayne E. Hedien (66) ...................... Retired; Director or Trustee of the Morgan Stanley
Trustee Dean Witter Funds; Director of The PMI Group,
c/o Mayer, Brown & Platt Inc. (private mortgage insurance); Trustee and
Counsel to the Independent Trustees Vice Chairman of The Field Museum of Natural
1675 Broadway History; formerly associated with the Allstate
New York, New York Companies (1966-1994), most recently as
Chairman of The Allstate corporation (March 1993-
December 1994) and Chairman and Chief
Executive Officer of its wholly-owned subsidiary,
Allstate Insurance Company (July 1989-December
1994); director of various other business and
charitable organizations.

James F. Higgins* (52) .................... Chairman of the Private Client Group of MSDW
Trustee (since August 2000); Director of the Transfer Agent
Two World Trade Center and Dean Witter Realty Inc.; Director or Trustee of
New York, New York the Morgan Stanley Dean Witter Funds (since
June 2000); previously President and Chief
Operating Officer of the Private Client Group of
MSDW (May 1999-August 2000), President and
Chief Operating Officer of Individual Securities of
MSDW (February 1997-May 1999), President and
Chief Operating Officer of Dean Witter Securities
of MSDW (1995-February 1997), and President
and Chief Operating Officer of Dean Witter
Financial (1989-1995) and Director (1985-1997) of
Dean Witter Reynolds.

Dr. Manuel H. Johnson (51) ................ Senior Partner, Johnson Smick International, Inc.,
Trustee a consulting firm; Co-Chairman and a founder of
c/o Johnson Smick International, Inc. the Group of Seven Council (G7C), an international
1133 Connecticut Avenue, N.W. economic commission; Chairman of the Audit
Washington, D.C. Committee and Director or Trustee of the Morgan
Stanley Dean Witter Funds; Director of Greenwich
Capital Markets, Inc. (broker-dealer), Independence
Standards Board (private sector organization
governing independence of auditors) and NVR,
Inc. (home construction); Chairman and Trustee of
the Financial Accounting Foundation (oversight
organization of the Financial Accounting Standards
Board); formerly Vice Chairman of the Board of
Governors of the Federal Reserve System and
Assistant Secretary of the U.S. Treasury.

Michael E. Nugent (64) .................... General Partner, Triumph Capital, L.P., a private
Trustee investment partnership; Chairman of the Insurance
c/o Triumph Capital, L.P. Committee and Director or Trustee of the Morgan
237 Park Avenue Stanley Dean Witter Funds; formerly Vice
New York, New York President, Bankers Trust Company and BT Capital
Corporation (1984-1988); director of various
business organizations.
</TABLE>

14
<PAGE>

<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
------------------------------------------- -----------------------------------------------------
<S> <C>
Philip J. Purcell* (57) ................... Chairman of the Board of Directors and Chief
Trustee Executive Officer of MSDW, Dean Witter Reynolds
1585 Broadway and Novus Credit Services Inc.; Director of the
New York, New York Distributor; Director or Trustee of the Morgan
Stanley Dean Witter Funds; Director of American
Airlines, Inc. and its parent company, AMR
Corporation; Director and/or officer of various
MSDW subsidiaries.

John L. Schroeder (70) .................... Retired; Chairman of the Derivatives Committee
Trustee and Director or Trustee of the Morgan Stanley
c/o Mayer, Brown & Platt Dean Witter Funds; Director of Citizens Utilities
Counsel to the Independent Trustees Company (telecommunications, gas, electric and
1675 Broadway water utilities company); formerly Executive Vice
New York, New York President and Chief Investment Officer of Home
Insurance Company (August 1991-September
1995).

Mitchell M. Merin (47) .................... President and Chief Operating Officer of Asset
President Management of MSDW (since December 1998);
Two World Trade Center President and Director (since April 1997) and Chief
New York, New York Executive Officer (since June 1998) of the
Investment Manager and MSDW Services
Company; Chairman, Chief Executive Officer and
Director of the Distributor (since June 1998);
Chairman and Chief Executive Officer (since June
1998) and Director (since January 1998) of the
Transfer Agent; Director of various MSDW
subsidiaries; President of the Morgan Stanley Dean
Witter Funds (since May 1999); Trustee of various
Van Kampen investment companies (since
December 1999); previously Chief Strategic Officer
of the Investment Manager and MSDW Services
Company and Executive Vice President of the
Distributor (April 1997-June 1998), Vice President
of the Morgan Stanley Dean Witter Funds and
Discover Brokerage Index Series (May 1997-April
1999), and Executive Vice President of Dean
Witter, Discover & Co.

Barry Fink (45) ........................... General Counsel of Asset Management of MSDW
Vice President, (since May 2000); Executive Vice President (since
Secretary and General Counsel December 1999) and Secretary and General
Two World Trade Center Counsel (since February 1997) and Director (since
New York, New York July 1998) of the Investment Manager and MSDW
Services Company; Vice President, Secretary and
General Counsel of the Morgan Stanley Dean
Witter Funds (since February 1997); Vice President
and Secretary of the Distributor; previously, Senior
Vice President (March 1997-December 1999), First
Vice President, Assistant Secretary and Assistant
General Counsel of the Investment Manager and
MSDW Services Company.
</TABLE>

<PAGE>

Thomas F. Caloia (54) ..................... First Vice President and Assistant Treasurer of the
Treasurer Investment Manager, the Distributor and MSDW
Two World Trade Center Services Company; Treasurer of the Morgan
New York, New York Stanley Dean Witter Funds.
</TABLE>

----------
* Denotes Trustees who are "interested persons" of the Fund, as defined in
the Investment Company Act.

In addition, Ronald E. Robison, Executive Vice President, Chief
Administrative Officer and Director of the Investment Manager and MSDW Services
Company, Robert S. Giambrone, Senior Vice President of the Investment Manager,
MSDW Services Company, the Distributor and the Transfer Agent and Director of
the Transfer Agent, Joseph J. McAlinden, Executive Vice President and Chief
Investment Officer of the Investment Manager and Director of the Transfer
Agent, Guy G. Rutherford Jr., Senior Vice President and Director of the Growth
Group of the Investment Manager, and Alice Weiss, Vice President of the
Investment Manager, are Vice Presidents of the Fund. Aaron Clark, Vice
President of the Investment Manager is an Assistant Vice President of the Fund.

In addition, Marilyn K. Cranney, Todd Lebo, Lou Anne D. McInnis, Carsten
Otto and Ruth Rossi, First Vice Presidents and Assistant General Counsels of
the Investment Manager and MSDW Services Company, and Natasha Kassian,
Assistant Vice President and Assistant General Counsel of the Investment
Manager and MSDW Services Company, are Assistant Secretaries of the Fund.

INDEPENDENT DIRECTORS/TRUSTEES AND THE COMMITTEES. Law and regulation
establish both general guidelines and specific duties for the independent
directors/trustees. The Morgan Stanley Dean Witter Funds seek as independent
directors/trustees individuals of distinction and experience in business and
finance, government service or academia; these are people whose advice and
counsel are in demand by others and for whom there is often competition. To
accept a position on the Funds' boards, such individuals may reject other
attractive assignments because the Funds make substantial demands on their
time. All of the independent directors/trustees serve as members of the Audit
Committee. In addition, three of the directors/trustees, including two
independent directors/trustees, serve as members of the Derivatives Committee
and the Insurance Committee.

The independent directors/trustees are charged with recommending to the
full board approval of management, advisory and administration contracts, Rule
12b-1 plans and distribution and underwriting agreements; continually reviewing
Fund performance; checking on the pricing of portfolio securities, brokerage
commissions, transfer agent costs and performance, and trading among funds in
the same complex; and approving fidelity bond and related insurance coverage
and allocations, as well as other matters that arise from time to time. The
independent directors/trustees are required to select and nominate individuals
to fill any independent directors/trustee vacancy on the board of any fund that
has a Rule 12b-1 plan of distribution. Most of the Morgan Stanley Dean Witter
Funds have a Rule 12b-1 plan.

The Audit Committee is charged with recommending to the full board the
engagement or discharge of the Fund's independent accountants; directing
investigations into matters within the scope of the independent accountants'
duties, including the power to retain outside specialists; reviewing with the
independent accountants the audit plan and results of the auditing engagement;
approving professional services provided by the independent accountants and
other accounting firms prior to the performance of the services; reviewing the
independence of the independent accountants; considering the range of audit and
non-audit fees; reviewing the adequacy of the Fund's system of internal
controls; and preparing and submitting Committee meeting minutes to the full
board.

The board of each Fund has a Derivatives Committee to approve parameters
for and monitor the activities of the Fund with respect to derivative
investments, if any, made by the Fund.

<PAGE>

Finally, the board of each Fund has formed an Insurance Committee to
review and monitor the insurance coverage maintained by the Fund.

ADVANTAGES OF HAVING SAME INDIVIDUALS AS INDEPENDENT DIRECTORS/TRUSTEES
FOR ALL MORGAN STANLEY DEAN WITTER FUNDS. The independent directors/trustees
and the Funds' management believe that having the same independent
directors/trustees for each of the Morgan Stanley Dean Witter Funds avoids the
duplication of effort that would arise from having different groups of
individuals serving as independent directors/trustees for each of the Funds or
even of sub-groups of Funds. They believe that having the same individuals
serve as independent directors/trustees of all the Funds tends to increase
their knowledge and expertise regarding matters which affect the Fund complex
generally and enhances their ability to negotiate on behalf of each Fund with
the Fund's service providers. This arrangement also precludes the possibility
of separate groups of independent directors/trustees arriving at conflicting
decisions regarding operations and management of the Funds and avoids the cost
and confusion that would likely ensue. Finally, having the same independent
directors/trustees serve on all Fund boards enhances the ability of each Fund
to obtain, at modest cost to each separate Fund, the services of independent
directors/trustees, of the caliber, experience and business acumen of the
individuals who serve as independent directors/trustees of the Morgan Stanley
Dean Witter Funds.

TRUSTEE AND OFFICER INDEMNIFICATION. The Fund's Declaration of Trust
provides that no Trustee, officer, employee or agent of the Fund is liable to
the Fund or to a shareholder, nor is any Trustee, officer, employee or agent
liable to any third persons in connection with the affairs of the Fund, except
as such liability may arise from his/her or its own bad faith, willful
misfeasance, gross negligence or reckless disregard of his/her or its duties.
It also provides that all third persons shall look solely to the Fund property
for satisfaction of claims arising in connection with the affairs of the Fund.
With the exceptions stated, the Declaration of Trust provides that a Trustee,
officer, employee or agent is entitled to be indemnified against all liability
in connection with the affairs of the Fund.

C. COMPENSATION

The Fund pays each Independent Trustee an annual fee of $800 plus a per
meeting fee of $50 for meetings of the Board of Trustees, the Independent
Trustees or Committees of the Board of Trustees attended by the Trustee (the
Fund pays the Chairman of the Audit Committee an additional annual fee of $750,
and the Chairmen of the Derivatives and Insurance Committees additional annual
fees of $500). If a Board meeting and a meeting of the Independent Trustees or
a Committee meeting, or a meeting of the Independent Trustees and/or more than
one Committee meeting, take place on a single day, the Trustees are paid a
single meeting fee by the Fund. The Fund also reimburses such Trustees for
travel and other out-of-pocket expenses incurred by them in connection with
attending such meetings. Trustees and officers of the Fund who are or have been
employed by the Investment Manager or an affiliated company receive no
compensation or expense reimbursement from the Fund for their services as
Trustee.

At such time as the Fund has been in operation, and has paid fees to the
Independent Trustees, for a full fiscal year, and assuming that during such
fiscal year the Fund holds the same number of meetings of the Board, the
Independent Trustees and the Committees as were held by the other Morgan
Stanley Dean Witter Funds during the calendar year ended December 31, 1999, it
is estimated that the compensation paid to each Independent Trustee during such
fiscal year will be the amount shown in the following table:

<PAGE>

FUND COMPENSATION (ESTIMATED)

<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF INDEPENDENT TRUSTEE FROM THE FUND
------------------------------- --------------
<S> <C>
Michael Bozic ................. $1,600
Edwin J. Garn ................. 1,600
Wayne E. Hedien ............... 1,600
Dr. Manuel H. Johnson ......... 2,350
Michael E. Nugent ............. 2,100
John L. Schroeder ............. 2,100
</TABLE>

The following table illustrates the compensation paid to the Fund's
Independent Trustees for the calendar year ended December 31, 1999 for services
to the 93 Morgan Stanley Dean Witter Funds that were in operation at December
31, 1999.

CASH COMPENSATION FROM MORGAN STANLEY DEAN WITTER FUNDS

<TABLE>
<CAPTION>
TOTAL CASH
COMPENSATION
FOR SERVICES TO
93 MORGAN
STANLEY DEAN
NAME OF INDEPENDENT TRUSTEE WITTER FUNDS
------------------------------- ----------------
<S> <C>
Michael Bozic ................. $134,600
Edwin J. Garn ................. 138,700
Wayne E. Hedien ............... 138,700
Dr. Manuel H. Johnson ......... 208,638
Michael E. Nugent ............. 193,324
John L. Schroeder ............. 193,324
</TABLE>

As of the date of this Statement of Additional Information, 55 of the
Morgan Stanley Dean Witter Funds, not including the Fund, have adopted a
retirement program under which an independent director/trustee who retires
after serving for at least five years (or such lesser period as may be
determined by the Board) as an independent director/trustee of any Morgan
Stanley Dean Witter Fund that has adopted the retirement program (each such
Fund referred to as an "Adopting Fund" and each such Trustee referred to as an
"Eligible Director") is entitled to retirement payments upon reaching the
eligible retirement age (normally, after attaining age 72). Annual payments are
based upon length of service.

Currently, upon retirement, each Eligible Trustee is entitled to receive
from the Adopting Fund, commencing as of his or her retirement date and
continuing for the remainder of his or her life, an annual retirement benefit
(the "Regular Benefit") equal to 30.22% of his or her Eligible Compensation
plus 0.5036667% of such Eligible Compensation for each full month of service as
an independent director/ trustee of any Adopting Fund in excess of five years
up to a maximum of 60.44% after ten years of service. The foregoing percentages
may be changed by the Board.(1) "Eligible Compensation" is one-fifth of the
total compensation earned by such Eligible Trustee for service to the Adopting
Fund in the five year period prior to the date of the Eligible Trustee's
retirement. Benefits under the retirement program are accrued as expenses on
the books of the Adopting Funds. Such benefits are not secured or funded by the
Adopting Funds.

----------
(1) An Eligible Trustee may elect alternative payments of his or her
retirement benefits based upon the combined life expectancy of the
Eligible Trustee and his or her spouse on the date of such Eligible
Trustee's retirement. In addition, the Eligible Trustee may elect that
the surviving spouse's periodic payment of benefits will be equal to a
lower percentage of the periodic amount when both spouses were alive. The
amount estimated to be payable under this method, through the remainder
of the later of the lives of the Eligible Trustee and spouse, will be the
actuarial equivalent of the Regular Benefit.

<PAGE>

The following table illustrates the retirement benefits accrued to the
Fund's Independent Trustees by the 55 Morgan Stanley Dean Witter Funds (not
including the Fund) for the calendar year ended December 31, 1999, and the
estimated retirement benefits for the Fund's Independent Trustees, to commence
upon their retirement, from the 55 Morgan Stanley Dean Witter Funds (not
including the Fund) as of the calendar year ended December 31, 1999.

RETIREMENT BENEFITS FROM ALL MORGAN STANLEY
DEAN WITTER FUNDS

<TABLE>
<CAPTION>
FOR ALL ADOPTING FUNDS
------------------------------
ESTIMATED
CREDITED
YEARS OF ESTIMATED RETIREMENT ESTIMATED ANNUAL
SERVICE AT PERCENTAGE OF BENEFITS ACCRUED BENEFITS UPON
RETIREMENT ELIGIBLE AS EXPENSES BY ALL RETIREMENT FROM ALL
NAME OF INDEPENDENT TRUSTEE (MAXIMUM 10) COMPENSATION ADOPTING FUNDS ADOPTING FUNDS(2)
------------------------------- -------------- --------------- -------------------- --------------------
<S> <C> <C> <C> <C>
Michael Bozic ................. 10 60.44% $20,933 $50,588
Edwin J. Garn ................. 10 60.44 31,737 50,675
Wayne E. Hedien ............... 9 51.37 39,566 43,000
Dr. Manuel H. Johnson ......... 10 60.44 13,129 75,520
Michael E. Nugent ............. 10 60.44 23,175 67,209
John L. Schroeder ............. 8 50.37 41,558 52,994
</TABLE>

----------
(2) Based on current levels of compensation. Amount of annual benefits also
varies depending on the Trustee's elections described in Footnote (1) on
page 18.

IV. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
--------------------------------------------------------------------------------
The following owned 5% or more of the outstanding shares of Class A on
September 8, 2000: Local No. 8 IBEW Retirement Plan, Attn: Richard Clarson,
CEBS 5/1/67, P.O. Box 60408, Rossford, OH 43460-0408 - 6.757% and E.I.B. Mutual
Business Program #19, P.O. Box HM2064, Hamilton, HM, HX, Bermuda - 6.269%. The
following owned 5% or more of the outstanding shares of Class D on September 8,
2000: Matthew Prucka & Sheryl Prucka JT TEN, 1659 South Blvd., Houston, TX
77006-6337 - 91.102%.

As of the date of this Statement of Additional Information, the aggregate
number of shares of beneficial interest of the Fund owned by the Fund's
officers and Trustees as a group was less than 1% of the Fund's shares of
beneficial interest outstanding.

V. INVESTMENT MANAGEMENT AND OTHER SERVICES
--------------------------------------------------------------------------------
A. INVESTMENT MANAGER

The Investment Manager to the Fund is Morgan Stanley Dean Witter Advisors
Inc., a Delaware corporation, whose address is Two World Trade Center, New
York, NY 10048. The Investment Manager is a wholly-owned subsidiary of MSDW, a
Delaware corporation. MSDW is a preeminent global financial services firm that
maintains leading market positions in each of its three primary businesses:
securities, asset management and credit services.

Pursuant to an Investment Management Agreement (the "Management
Agreement") with the Investment Manager, the Fund has retained the Investment
Manager to provide administrative services and manage the investment of the
Fund's assets, including the placing of orders for the purchase and sale of
portfolio securities. The Fund pays the Investment Manager monthly compensation
calculated daily at the annual rate of 0.40% of the Fund's average daily net
assets. The Investment Manager has agreed under the Management Agreement to
assume the Fund's operating expenses (except for brokerage and 12b-1 fees) to
the extent the Fund's total operating expenses (except for brokerage and

<PAGE>

12b-1 fees) exceed on an annualized basis, for the fiscal year, 0.50% of the
average daily net assets of the Fund. Taking the assumption of expenses into
account, for the period September 28, 1999 (commencement of operations) through
July 31, 2000, the fees payable to the Investment Manager under the Management
Agreement with the Fund amounted to $804,785.

The Investment Manager has retained its wholly-owned subsidiary, MSDW
Services Company, to perform administrative services for the Fund.

B. PRINCIPAL UNDERWRITER

The Fund's principal underwriter is the Distributor (which has the same
address as the Investment Manager). In this capacity, the Fund's shares are
distributed by the Distributor. The Distributor has entered into a selected
dealer agreement with Dean Witter Reynolds, which through its own sales
organization sells shares of the Fund. In addition, the Distributor may enter
into similar agreements with other selected broker-dealers. The Distributor, a
Delaware corporation, is a wholly-owned subsidiary of MSDW.

The Distributor bears all expenses it may incur in providing services
under the Distribution Agreement. These expenses include the payment of
commissions for sales of the Fund's shares and incentive compensation to
Financial Advisors, the cost of educational and/or business-related trips, and
educational and/or promotional and business-related expenses. The Distributor
also pays certain expenses in connection with the distribution of the Fund's
shares, including the costs of preparing, printing and distributing advertising
or promotional materials, and the costs of printing and distributing
prospectuses and supplements thereto used in connection with the offering and
sale of the Fund's shares. The Fund bears the costs of initial typesetting,
printing and distribution of prospectuses and supplements thereto to
shareholders. The Fund also bears the costs of registering the Fund and its
shares under federal and state securities laws and pays filing fees in
accordance with state securities laws.

The Fund and the Distributor have agreed to indemnify each other against
certain liabilities, including liabilities under the Securities Act. Under the
Distribution Agreement, the Distributor uses its best efforts in rendering
services to the Fund, but in the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of its obligations, the Distributor is
not liable to the Fund or any of its shareholders for any error of judgment or
mistake of law or for any act or omission or for any losses sustained by the
Fund or its shareholders.

C. SERVICES PROVIDED BY THE INVESTMENT MANAGER

The Investment Manager manages the investment of the Fund's assets,
including the placing of orders for the purchase and sale of portfolio
securities. The Investment Manager obtains and evaluates the information and
advice relating to the economy, securities markets, and specific securities as
it considers necessary or useful to continuously manage the assets of the Fund
in a manner consistent with its investment objective.

Under the terms of the Management Agreement, in addition to managing the
Fund's investments, the Investment Manager maintains certain of the Fund's
books and records and furnishes, at its own expense, the office space,
facilities, equipment, clerical help, bookkeeping and certain legal services as
the Fund may reasonably require in the conduct of its business, including the
preparation of prospectuses, proxy statements and reports required to be filed
with federal and state securities commissions (except insofar as the
participation or assistance of independent accountants and attorneys is, in the
opinion of the Investment Manager, necessary or desirable). In addition, the
Investment Manager pays the salaries of all personnel, including officers of
the Fund, who are employees of the Investment Manager. The Investment Manager
also bears the cost of telephone service, heat, light, power and other
utilities provided to the Fund.

Expenses not expressly assumed by the Investment Manager under the
Management Agreement or by the Distributor, will be paid by the Fund. These
expenses will be allocated among the four Classes

<PAGE>

of shares pro rata based on the net assets of the Fund attributable to each
Class, except as described below. Such expenses include, but are not limited
to: expenses of the Plan of Distribution pursuant to Rule 12b-1; charges and
expenses of any registrar, custodian, stock transfer and dividend disbursing
agent; brokerage commissions; taxes; engraving and printing share certificates;
registration costs of the Fund and its shares under federal and state
securities laws; the cost and expense of printing, including typesetting, and
distributing prospectuses of the Fund and supplements thereto to the Fund's
shareholders; all expenses of shareholders' and Trustees' meetings and of
preparing, printing and mailing of proxy statements and reports to
shareholders; fees and travel expenses of Trustees or members of any advisory
board or committee who are not employees of the Investment Manager or any
corporate affiliate of the Investment Manager; all expenses incident to any
dividend, withdrawal or redemption options; charges and expenses of any outside
service used for pricing of the Fund's shares; fees and expenses of legal
counsel, including counsel to the Trustees who are not interested persons of
the Fund or of the Investment Manager (not including compensation or expenses
of attorneys who are employees of the Investment Manager); fees and expenses of
the Fund's independent accountants; membership dues of industry associations;
interest on Fund borrowings; postage; insurance premiums on property or
personnel (including officers and Trustees) of the Fund which inure to its
benefit; extraordinary expenses (including, but not limited to, legal claims
and liabilities and litigation costs and any indemnification relating thereto);
and all other costs of the Fund's operation. The 12b-1 fees relating to a
particular Class will be allocated directly to that Class. In addition, other
expenses associated with a particular Class (except advisory or custodial fees)
may be allocated directly to that Class, provided that such expenses are
reasonably identified as specifically attributable to that Class and the direct
allocation to that Class is approved by the Trustees.

The Management Agreement provides that in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations thereunder, the Investment Manager is not liable to the Fund or any
of its investors for any act or omission by the Investment Manager or for any
losses sustained by the Fund or its investors.

The Management Agreement will remain in effect from year to year, provided
continuance of the Management Agreement is approved at least annually by the
vote of the holders of a majority, as defined in the Investment Company Act, of
the outstanding shares of the Fund, or by the Trustees; provided that in either
event such continuance is approved annually by the vote of a majority of the
Trustees, including a majority of the Independent Trustees.

D. DEALER REALLOWANCES

Upon notice to selected broker-dealers, the Distributor may reallow up to
the full applicable front-end sales charge during periods specified in such
notice. During periods when 90% or more of the sales charge is reallowed, such
selected broker-dealers may be deemed to be underwriters as that term is
defined in the Securities Act.

E. RULE 12B-1 PLAN

The Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 under
the Investment Company Act (the "Plan") pursuant to which each Class, other
than Class D, pays the Distributor compensation accrued daily and payable
monthly at the following annual rates: 0.25% of the average daily net assets of
Class A and 1.0% of the average daily net assets of Class B and Class C shares.

The Distributor also receives the proceeds of front-end sales charges
("FSCs") and of contingent deferred sales charges ("CDSCs") imposed on certain
redemptions of shares, which are separate and apart from payments made pursuant
to the Plan. The Distributor has informed the Fund that it and/or Dean Witter
Reynolds received the proceeds of CDSCs and FSCs, for the period ended July 31,
2000 in approximate amounts as provided in the table below (the Distributor did
not retain any of these amounts).

<PAGE>

<TABLE>
<CAPTION>
FOR THE PERIOD
SEPTEMBER 28, 1999
THROUGH
JULY 31, 2000
------------------------
<S> <C> <C>
Class A ......... FSCs:(1) $118,994
CDSCs: $ 3,202
Class B ......... CDSCs: $727,244
Class C ......... CDSCS: $ 45,054
</TABLE>

----------
(1) FSCs apply to Class A only.

The Distributor has informed the Fund that the entire fee payable by Class
A and a portion of the fees payable by each of Class B and Class C each year
pursuant to the Plan equal to 0.25% of such Class' average daily net assets are
currently each characterized as a "service fee" under the Rules of the National
Association of Securities Dealers, Inc. (of which the Distributor is a member).
The "service fee" is a payment made for personal service and/or the maintenance
of shareholder accounts. The remaining portion of the Plan fees payable by a
Class, if any, is characterized as an "asset-based sales charge" as such is
defined by the Rules of the Association.

Under the Plan and as required by Rule 12b-1, the Trustees receive and
review promptly after the end of each calendar quarter a written report
provided by the Distributor of the amounts expended under the Plan and the
purpose for which such expenditures were made. For the period September 28,
1999 (commencement of operations) through July 31, 2000, Class A, Class B, and
Class C shares of the Fund accrued payments under the Plan amounting to
$40,896, $2,693,569 and $322,830, respectively, which amounts are equal to
0.25%, 1.00% and 1.00% of the average daily net assets of Class A, Class B and
Class C, respectively, for the period.

The Plan was adopted in order to permit the implementation of the Fund's
method of distribution. Under this distribution method the Fund offers four
Classes, each with a different distribution arrangement.

With respect to Class A shares, Dean Witter Reynolds compensates its
Financial Advisors by paying them, from proceeds of the FSC, commissions for
the sale of Class A shares, currently a gross sales credit of up to 5.0% of the
amount sold (except as provided in the following sentence) and an annual
residual commission, currently a residual of up to 0.25% of the current value
of the respective accounts for which they are the Financial Advisors or dealers
of record in all cases. On orders of $1 million or more (for which no sales
charge was paid) or net asset value purchases by employer-sponsored employee
benefit plans, whether or not qualified under the Internal Revenue Code, for
which the Transfer Agent serves as Trustee or MSDW's Retirement Plan Services
serves as recordkeeper pursuant to a written Recordkeeping Services Agreement
("MSDW Eligible Plans"), the Investment Manager compensates Financial Advisors
by paying them, from its own funds, a gross sales credit of 1.0% of the amount
sold.

With respect to Class B shares, Dean Witter Reynolds compensates its
Financial Advisors by paying them, from its own funds, commissions for the sale
of Class B shares, currently a gross sales credit of up to 5.0% of the amount
sold (except as provided in the following sentence) and an annual residual
commission, currently a residual of up to 0.25% of the current value (not
including reinvested dividends or distributions) of the amount sold in all
cases. In the case of Class B shares purchased by MSDW Eligible Plans, Dean
Witter Reynolds compensates its Financial Advisors by paying them, from its own
funds, a gross sales credit of 3.0% of the amount sold.

With respect to Class C shares, Dean Witter Reynolds compensates its
Financial Advisors by paying them, from its own funds, commissions for the sale
of Class C shares, currently a gross sales credit of up to 1.0% of the amount
sold and an annual residual commission, currently up to 1.0% of the current
value of the respective accounts for which they are the Financial Advisors of
record.

With respect to Class D shares other than shares held by participants in
the Investment Manager's mutual fund asset allocation program, the Investment
Manager compensates Dean Witter Reynolds' Financial Advisors by paying them,
from its own funds, commissions for the sale of Class D shares,

<PAGE>

currently a gross sales credit of up to 1.0% of the amount sold. There is a
chargeback of 100% of the amount paid if the Class D shares are redeemed in the
first year and a chargeback of 50% of the amount paid if the Class D shares are
redeemed in the second year after purchase. The Investment Manager also
compensates Dean Witter Reynolds' Financial Advisors by paying them, from its
own funds, an annual residual commission, currently up to 0.10% of the current
value of the respective accounts for which they are the Financial Advisors of
record (not including accounts of participants in the Investment Manager's
mutual fund asset allocation program).

The gross sales credit is a charge which reflects commissions paid by Dean
Witter Reynolds to its Financial Advisors and Dean Witter Reynolds'
Fund-associated distribution-related expenses, including sales compensation,
and overhead and other branch office distribution-related expenses including
(a) the expenses of operating Dean Witter Reynolds' branch offices in
connection with the sale of Fund shares, including lease costs, the salaries
and employee benefits of operations and sales support personnel, utility costs,
communications costs and the costs of stationery and supplies; (b) the costs of
client sales seminars; (c) travel expenses of mutual fund sales coordinators to
promote the sale of Fund shares; and (d) other expenses relating to branch
promotion of Fund sales.

The Investment Manager pays a retention fee to Financial Advisors at an
annual rate of 0.05% of the value of shares of the Fund sold after January 1,
2000 and held for at least one year. Shares purchased through the reinvestment
of dividends will be eligible for a retention fee, provided that such dividends
were earned on shares otherwise eligible for a retention fee payment. Shares
owned in variable annuities, closed-end fund shares and shares held in 401(k)
plans where the Transfer Agent or MSDW's Retirement Plan Services is either
recordkeeper or trustee are not eligible for a retention fee.

For the first year only, the retention fee is paid on any shares of the
Fund sold after January 1, 2000 and held by shareholders on December 31, 2000.

The retention fees are paid by the Investment Manager from its own assets,
which may include profits from investment management fees payable under the
Management Agreement, as well as from borrowed funds.

The distribution fee that the Distributor receives from the Fund under the
Plan, in effect, offsets distribution expenses incurred under the Plan on
behalf of the Fund and, in the case of Class B shares, opportunity costs, such
as the gross sales credit and an assumed interest charge thereon ("carrying
charge"). These expenses may include the cost of Fund-related educational
and/or business-related trips or payment of Fund-related educational and/or
promotional expenses of Financial Advisors. In the Distributor's reporting of
the distribution expenses to the Fund, in the case of Class B shares, such
assumed interest (computed at the "broker's call rate") has been calculated on
the gross credit as it is reduced by amounts received by the Distributor under
the Plan and any contingent deferred sales charges received by the Distributor
upon redemption of shares of the Fund. No other interest charge is included as
a distribution expense in the Distributor's calculation of its distribution
costs for this purpose. The broker's call rate is the interest rate charged to
securities brokers on loans secured by exchange-listed securities.

The Fund is authorized to reimburse expenses incurred or to be incurred in
promoting the distribution of the Fund's Class A and Class C shares and in
servicing shareholder accounts. Reimbursement will be made through payments at
the end of each month. The amount of each monthly payment may in no event
exceed an amount equal to a payment at the annual rate of 0.25%, in the case of
Class A, and 1.0%, in the case of Class C, of the average net assets of the
respective Class during the month. No interest or other financing charges, if
any, incurred on any distribution expenses on behalf of Class A and Class C
will be reimbursable under the Plan. With respect to Class A, in the case of
all expenses other than expenses representing the service fee, and, with
respect to Class C, in the case of all expenses other than expenses
representing a gross sales credit or a residual to Financial Advisors and other
authorized financial representatives, such amounts shall be determined at the
beginning of each calendar quarter by the Trustees, including, a majority of
the Independent Trustees. Expenses representing the service fee (for Class A)
or a gross sales credit or a residual to Financial Advisors and other
authorized financial representatives (for Class C) may be reimbursed without
prior determination.

23
<PAGE>

In the event that the Distributor proposes that monies shall be reimbursed for
other than such expenses, then in making quarterly determinations of the
amounts that may be reimbursed by the Fund, the Distributor will provide and
the Trustees will review a quarterly budget of projected distribution expenses
to be incurred on behalf of the Fund, together with a report explaining the
purposes and anticipated benefits of incurring such expenses. The Trustees will
determine which particular expenses, and the portions thereof, that may be
borne by the Fund, and in making such a determination shall consider the scope
of the Distributor's commitment to promoting the distribution of the Fund's
Class A and Class C shares.

Each Class paid 100% of the amounts accrued under the Plan with respect to
that Class for the period September 28, 1999 (commencement of operations)
through July 31, 2000 to the Distributor. The Distributor and Dean Witter
Reynolds estimate that they have spent, pursuant to the Plan, $18,886,085 on
behalf of Class B since the inception of the Plan. It is estimated that this
amount was spent in approximately the following ways: (i) 11.03%
($2,083,680)-advertising and promotional expenses; (ii) 0.01% ($1,720)-printing
of prospectuses for distribution to other than current shareholders; and (iii)
88.96% ($16,800,685)-other expenses, including the gross sales credit and the
carrying charge, of which 3.60% ($604,244) represents carrying charges, 39.91%
($6,705,327) represents commission credits to Dean Witter Reynolds branch
offices and other selected broker-dealers for payments of commissions to
Financial Advisors and other authorized financial representatives, and 56.49%
($9,491,114) represents overhead and other branch office distribution-related
expenses. The amounts accrued by Class A and a portion of the amounts accrued
by Class C under the Plan during the fiscal period ended September 28, 1999
(commencement of operations) through July 31, 2000 were service fees. The
remainder of the amounts accrued by Class C were for expenses which relate to
compensation of sales personnel and associated overhead expenses.

In the case of Class B shares, at any given time, the expenses of
distributing shares of the Fund may be more or less than the total of (i) the
payments made by the Fund pursuant to the Plan; and (ii) the proceeds of CDSCs
paid by investors upon redemption of shares. For example, if $1 million in
expenses in distributing Class B shares of the Fund had been incurred and
$750,000 had been received as described in (i) and (ii) above, the excess
expense would amount to $250,000. The Distributor has advised the Fund that in
the case of Class B shares the excess distribution expenses, including the
carrying charge designed to approximate the opportunity costs incurred by Dean
Witter Reynolds which arise from it having advanced monies without having
received the amount of any sales charges imposed at the time of sale of the
Fund's Class B shares, totaled $15,462,992 as of July 31, 2000 (the end of the
Fund's fiscal year), which was equal to 4.33% of the net assets of Class B on
such date. Because there is no requirement under the Plan that the Distributor
be reimbursed for all distribution expenses with respect to Class B shares or
any requirement that the Plan be continued from year to year, this excess
amount does not constitute a liability of the Fund. 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 CDSCs 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. Any
cumulative expenses incurred, but not yet recovered through distribution fees
or CDSCs, may or may not be recovered through future distribution fees or
CDSCs.

In the case of Class A 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 commission credited to Morgan Stanley Dean Witter Financial
Advisors and other authorized financial representatives at the time of sale may
be reimbursed in the subsequent calendar year. The Distributor has advised the
Fund that unreimbursed expenses representing a gross sales commission credited
to Morgan Stanley Dean Witter Financial Advisors and other authorized financial
representatives at the time of sale totaled $238,030 in the case of Class C at
December 31, 1999 (end of the calendar year), which amount was equal to 0.65%
of the net assets of Class C on such date, and that there were no such expenses
that may be reimbursed in the subsequent year in the case of Class A on such
date. No interest or other financing charges will be incurred on any Class A or
Class C distribution expenses incurred by the Distributor under the Plan or on
any unreimbursed expenses due to the Distributor pursuant to the Plan.

<PAGE>

No interested person of the Fund nor any Independent Trustee has any
direct financial interest in the operation of the Plan except to the extent
that the Distributor, the Investment Manager, Dean Witter Reynolds, MSDW
Services Company or certain of their employees may be deemed to have such an
interest as a result of benefits derived from the successful operation of the
Plan or as a result of receiving a portion of the amounts expended thereunder
by the Fund.

On an annual basis the Trustees, including a majority of the Independent
Trustees, consider whether the Plan should be continued. Prior to approving the
last continuation of the Plan, the Trustees requested and received from the
Distributor and reviewed all the information which they deemed necessary to
arrive at an informed determination. In making their determination to continue
the Plan, the Trustees considered: (1) the Fund's experience under the Plan and
whether such experience indicates that the Plan is operating as anticipated;
(2) the benefits the Fund had obtained, was obtaining and would be likely to
obtain under the Plan, including that: (a) the Plan is essential in order to
give Fund investors a choice of alternatives for payment of distribution and
service charges and to enable the Fund to continue to grow and avoid a pattern
of net redemptions which, in turn, are essential for effective investment
management; and (b) without the compensation to individual brokers and the
reimbursement of distribution and account maintenance expenses of Dean Witter
Reynolds's branch offices made possible by the 12b-1 fees, Dean Witter Reynolds
could not establish and maintain an effective system for distribution,
servicing of Fund shareholders and maintenance of shareholder accounts; and (3)
what services had been provided and were continuing to be provided under the
Plan to the Fund and its shareholders. Based upon their review, the Trustees,
including each of the Independent Trustees, determined that continuation of the
Plan would be in the best interest of the Fund and would have a reasonable
likelihood of continuing to benefit the Fund and its shareholders. In the
Trustees' quarterly review of the Plan, they will consider its continued
appropriateness and the level of compensation provided therein.

The Plan may not be amended to increase materially the amount to be spent
for the services described therein without approval by the shareholders of the
affected Class or Classes of the Fund, and all material amendments to the Plan
must also be approved by the Trustees in the manner described above. The Plan
may be terminated at any time, without payment of any penalty, by vote of a
majority of the Independent Trustees or by a vote of a majority of the
outstanding voting securities of the Fund (as defined in the Investment Company
Act) on not more than thirty days' written notice to any other party to the
Plan. So long as the Plan is in effect, the election and nomination of
Independent Trustees shall be committed to the discretion of the Independent
Trustees.

F. OTHER SERVICE PROVIDERS

(1) TRANSFER AGENT/DIVIDEND-PAYING AGENT

Morgan Stanley Dean Witter Trust FSB is the Transfer Agent for the Fund's
shares and the Dividend Disbursing Agent for payment of dividends and
distributions on Fund shares and Agent for shareholders under various
investment plans. The principal business address of the Transfer Agent is
Harborside Financial Center, Plaza Two, Jersey City, NJ 07311.

(2) CUSTODIAN AND INDEPENDENT AUDITORS

The Bank of New York, 100 Church Street, New York, NY 10007, is the
Custodian of the Fund's assets. Any of the Fund's cash balances with the
Custodian in excess of $100,000 are unprotected by federal deposit insurance.
These balances may, at times, be substantial.

Deloitte & Touche LLP, Two World Financial Center, New York, NY 10281,
serves as the independent auditors of the Fund. The independent auditors are
responsible for auditing the annual financial statements of the Fund.

(3) AFFILIATED PERSONS

The Transfer Agent is an affiliate of the Investment Manager, and of the
Distributor. As Transfer Agent and Dividend Disbursing Agent, the Transfer
Agent's responsibilities include maintaining share-

25
<PAGE>

holder accounts, disbursing cash dividends and reinvesting dividends,
processing account registration changes, handling purchase and redemption
transactions, mailing prospectuses and reports, mailing and tabulating proxies,
processing share certificate transactions, and maintaining shareholder records
and lists. For these services, the Transfer Agent receives a per shareholder
account fee from the Fund and is reimbursed for its out-of-pocket expenses in
connection with such services.

G. CODES OF ETHICS

The Fund, the Investment Manager and the Distributor have each adopted a
Code of Ethics pursuant to Rule 17j-1 under the Investment Company Act. The
Codes of Ethics are designed to detect and prevent improper personal trading.
The Codes of Ethics permit personnel subject to the Codes to invest in
securities, including securities that may be purchased, sold or held by the
Fund, subject to a number of restrictions and controls including prohibitions
against purchases of securities in an Initial Public Offering and a
preclearance requirement with respect to personal securities transactions.

VI. BROKERAGE ALLOCATION AND OTHER PRACTICES
--------------------------------------------------------------------------------
A. BROKERAGE TRANSACTIONS

Subject to the general supervision of the Trustees, the Investment Manager
is responsible for decisions to buy and sell securities for the Fund, the
selection of brokers and dealers to effect the transactions, and the
negotiation of brokerage commissions, if any. Purchases and sales of securities
on a stock exchange are effected through brokers who charge a commission for
their services. In the over-the-counter market, securities are generally traded
on a "net" basis with dealers acting as principal for their own accounts
without a stated commission, although the price of the security usually
includes a profit to the dealer. Options and futures transactions will usually
be effected through a broker and a commission will be charged. On occasion, the
Fund may also purchase certain money market instruments directly from an
issuer, in which case no commissions or discounts are paid.

For the period September 28, 1999 (commencement of operations) through
July 31, 2000, the Fund paid a total of $175,792 in brokerage commissions.

B. COMMISSIONS

Pursuant to an order of the SEC, the Fund may effect principal
transactions in certain money market instruments with Dean Witter Reynolds. The
Fund will limit its transactions with Dean Witter Reynolds to U.S. Government
and government agency securities, bank money instruments (i.e., certificates of
deposit and bankers' acceptances) and commercial paper. The transactions will
be effected with Dean Witter Reynolds only when the price available from Dean
Witter Reynolds is better than that available from other dealers.

For the period September 28, 1999 (commencement of operations) through
July 31, 2000, the Fund did not effect any principal transactions with Dean
Witter Reynolds.

Brokerage transactions in securities listed on exchanges or admitted to
unlisted trading privileges may be effected through Dean Witter Reynolds,
Morgan Stanley & Co. and other affiliated brokers and dealers. In order for an
affiliated broker or dealer to effect any portfolio transactions on an exchange
for the Fund, the commissions, fees or other remuneration received by the
affiliated broker or dealer must be reasonable and fair compared to the
commissions, fees or other remuneration paid to other brokers in connection
with comparable transactions involving similar securities being purchased or
sold on an exchange during a comparable period of time. This standard would
allow the affiliated broker or dealer to receive no more than the remuneration
which would be expected to be received by an unaffiliated broker in a
commensurate arm's-length transaction. Furthermore, the Trustees, including the
Independent Trustees, have adopted procedures which are reasonably designed to
provide that any commissions, fees or other remuneration paid to an affiliated
broker or dealer are consistent with the foregoing standard. The Fund does not
reduce the management fee it pays to the Investment Manager by any amount of
the brokerage commissions it may pay to an affiliated broker or dealer.

<PAGE>

For the period September 28, 1999 (commencement of operations) through
July 31, 2000, the Fund did not pay any brokerage commissions to Dean Witter
Reynolds or to Morgan Stanley & Co.

C. BROKERAGE SELECTION

The policy of the Fund regarding purchases and sales of securities for its
portfolio is that primary consideration will be given to obtaining the most
favorable prices and efficient executions of transactions. Consistent with this
policy, when securities transactions are effected on a stock exchange, the
Fund's policy is to pay commissions which are considered fair and reasonable
without necessarily determining that the lowest possible commissions are paid
in all circumstances. The Fund believes that a requirement always to seek the
lowest possible commission cost could impede effective portfolio management and
preclude the Fund and the Investment Manager from obtaining a high quality of
brokerage and research services. In seeking to determine the reasonableness of
brokerage commissions paid in any transaction, the Investment Manager relies
upon its experience and knowledge regarding commissions generally charged by
various brokers and on its judgment in evaluating the brokerage and research
services received from the broker effecting the transaction. These
determinations are necessarily subjective and imprecise, as in most cases an
exact dollar value for those services is not ascertainable.

In seeking to implement the Fund's policies, the Investment Manager
effects transactions with those brokers and dealers who the Investment Manager
believes provide the most favorable prices and are capable of providing
efficient executions. If the Investment Manager believes the prices and
executions are obtainable from more than one broker or dealer, it may give
consideration to placing portfolio transactions with those brokers and dealers
who also furnish research and other services to the Fund or the Investment
Manager. The services may include, but are not limited to, any one or more of
the following: information as to the availability of securities for purchase or
sale; statistical or factual information or opinions pertaining to investment;
wire services; and appraisals or evaluations of portfolio securities. The
information and services received by the Investment Manager from brokers and
dealers may be of benefit to the Investment Manager in the management of
accounts of some of its other clients and may not in all cases benefit the Fund
directly.

The Investment Manager currently serves as investment manager to a number
of clients, including other investment companies, and may in the future act as
investment manager or advisor to others. It is the practice of the Investment
Manager to cause purchase and sale transactions to be allocated among the Fund
and others whose assets it manages in such manner as it deems equitable. In
making such allocations among the Fund and other client accounts, various
factors may be considered, including the respective investment objectives, the
relative size of portfolio holdings of the same or comparable securities, the
availability of cash for investment, the size of investment commitments
generally held and the opinions of the persons responsible for managing the
portfolios of the Fund and other client accounts. In the case of certain
initial and secondary public offerings, the Investment Manager utilizes a pro
rata allocation process based on the size of the relevant funds and/or client
accounts involved and the number of shares available from the public offering.

D. REGULAR BROKER-DEALERS

During the period September 28, 1999 (commencement of operations) through
July 31, 2000, the Fund purchased securities issued by: Merrill Lynch, Pierce,
Fenner & Smith, Inc., Goldman Sachs & Co., Bank of New York Co., Inc., and Bank
of America Corp. At July 31, 2000, the Fund held securities issued by: Merrill
Lynch, Pierce, Fenner & Smith Inc. with a market value of $1,324,037, Goldman
Sachs & Co. with a market value of $190,850, Bank of New York Co., Inc. with a
market value of $911,861 and Bank of America Corp. with a market value of
$2,119,652.

<PAGE>

VII. CAPITAL STOCK AND OTHER SECURITIES
--------------------------------------------------------------------------------
The shareholders of the Fund are entitled to a full vote for each full
share of beneficial interest held. The Fund is authorized to issue an unlimited
number of shares of beneficial interest. All shares of beneficial interest of
the Fund are of $0.01 par value and are equal as to earnings, assets and voting
privileges except that each Class will have exclusive voting privileges with
respect to matters relating to distribution expenses borne solely by such Class
or any other matter in which the interests of one Class differ from the
interests of any other Class. In addition, Class B shareholders will have the
right to vote on any proposed material increase in Class A's expenses, if such
proposal is submitted separately to Class A shareholders. Also, Class A, Class
B and Class C bear expenses related to the distribution of their respective
shares.

The Fund's Declaration of Trust permits the Trustees to authorize the
creation of additional series of shares (the proceeds of which would be
invested in separate, independently managed portfolios) and additional Classes
of shares within any series. The Trustees have not presently authorized any
such additional series or Classes of shares other than as set forth in the
Prospectus.

The Fund is not required to hold annual meetings of shareholders and in
ordinary circumstances the Fund does not intend to hold such meetings. The
Trustees may call special meetings of shareholders for action by shareholder
vote as may be required by the Investment Company Act or the Declaration of
Trust. Under certain circumstances, the Trustees may be removed by the actions
of the Trustees. In addition, under certain circumstances, the shareholders may
call a meeting to remove Trustees and the Fund is required to provide
assistance in communicating with shareholders about such a meeting. The voting
rights of shareholders are not cumulative, so that holders of more than 50
percent of the shares voting can, if they choose, elect all Trustees being
selected, while the holders of the remaining shares would be unable to elect
any Trustees.

Under Massachusetts law, shareholders of a business trust may, under
certain limited circumstances, be held personally liable as partners for the
obligations of the Fund. However, the Declaration of Trust contains an express
disclaimer of shareholder liability for acts or obligations of the Fund,
requires that notice of such Fund obligations include such disclaimer, and
provides for indemnification out of the Fund's property for any shareholder
held personally liable for the obligations of the Fund. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which the Fund itself would be unable to meet its
obligations. Given the above limitations on shareholder personal liability, and
the nature of the Fund's assets and operations, the possibility of the Fund
being unable to meet its obligations is remote and thus, in the opinion of
Massachusetts counsel to the Fund, the risk to Fund shareholders of personal
liability is remote.

The Trustees themselves have the power to alter the number and the terms
of office of the Trustees (as provided for in the Declaration of Trust), and
they may at any time lengthen or shorten their own terms or make their terms of
unlimited duration and appoint their own successors, provided that always at
least a majority of the Trustees has been elected by the shareholders of the
Fund.

VIII. PURCHASE, REDEMPTION AND PRICING OF SHARES
--------------------------------------------------------------------------------
A. PURCHASE/REDEMPTION OF SHARES

Information concerning how Fund shares are offered to the public (and how
they are redeemed and exchanged) is provided in the Fund's Prospectus.

TRANSFER AGENT AS AGENT. With respect to the redemption or repurchase of
Fund shares, the application of proceeds to the purchase of new shares in the
Fund or any other Morgan Stanley Dean Witter Funds and the general
administration of the exchange privilege, the Transfer Agent acts as agent for
the Distributor and for the shareholder's authorized broker-dealer, if any, in
the performance of such functions. With respect to exchanges, redemptions or
repurchases, the Transfer Agent shall be liable for its own negligence and not
for the default or negligence of its correspondents or for losses in transit.
The Fund shall not be liable for any default or negligence of the Transfer
Agent, the Distributor or any authorized broker-dealer.

<PAGE>

The Distributor and any authorized broker-dealer have appointed the
Transfer Agent to act as their agent in connection with the application of
proceeds of any redemption of Fund shares to the purchase of shares of any
other Morgan Stanley Dean Witter Fund and the general administration of the
exchange privilege. No commission or discounts will be paid to the Distributor
or any authorized broker-dealer for any transactions pursuant to the exchange
privilege.

TRANSFERS OF SHARES. In the event a shareholder requests a transfer of
Fund shares to a new registration, the shares will be transferred without sales
charge at the time of transfer. With regard to the status of shares which are
either subject to a CDSC or free of such charge (and with regard to the length
of time shares subject to the charge have been held), any transfer involving
less than all of the shares in an account will be made on a pro rata basis
(that is, by transferring shares in the same proportion that the transferred
shares bear to the total shares in the account immediately prior to the
transfer). The transferred shares will continue to be subject to any applicable
CDSC as if they had not been so transferred.

B. OFFERING PRICE

The Fund's Class B, Class C and Class D shares are offered at net asset
value per share and the Class A shares are offered at net asset value per share
plus any applicable FSC which is distributed among the Fund's Distributor, Dean
Witter Reynolds and other authorized dealers as described in Section "V.
Investment Management and Other Services-E. Rule 12b-1 Plan."

The price of Fund shares, called "net asset value," is based on the value
of the Fund's portfolio securities. Net asset value per share of each Class is
calculated by dividing the value of the portion of the Fund's securities and
other assets attributable to that Class, less the liabilities attributable to
that Class, by the number of shares of that Class outstanding. The assets of
each Class of shares are invested in a single portfolio. The net asset value of
each Class, however, will differ because the Classes have different ongoing
fees.

In the calculation of the Fund's net asset value: (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, 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); and (2) all other
portfolio securities for which over-the-counter market quotations are readily
available are valued at the latest bid price. When market quotations are not
readily available, including circumstances under which it is determined by the
Investment Manager that sale or bid prices are not reflective of a security's
market value, portfolio securities are valued at their fair value as determined
in good faith under procedures established by and under the general supervision
of the Fund's Trustees. For valuation purposes, quotations of foreign portfolio
securities, other assets and liabilities and forward contracts stated in
foreign currency are translated into U.S. dollar equivalents at the prevailing
market rates prior to the close of the New York Stock Exchange.

Short-term debt securities with remaining maturities of sixty days or less
at the time of purchase are valued at amortized cost, unless the Trustees
determine such does not reflect the securities' market value, in which case
these securities will be valued at their fair value as determined by the
Trustees.

Options on equity securities are valued at the mean between their latest
bid and asked prices. Futures are valued at the latest sale price on the
commodities exchange on which they trade unless the Trustees determine such
price does not reflect their market value, in which case they will be valued at
their fair value as determined in good faith under procedures established by
and under the supervision of the Trustees.

<PAGE>

IX. TAXATION OF THE FUND AND SHAREHOLDERS
--------------------------------------------------------------------------------

The Fund generally will make two basic types of distributions: ordinary
dividends and long-term capital gain distributions. These two types of
distributions are reported differently on a shareholder's income tax return and
they are also subject to different rates of tax. The tax treatment of the
investment activities of the Fund will affect the amount and timing and
character of the distributions made by the Fund. Tax issues relating to the
Fund are not generally a consideration for shareholders such as tax- exempt
entities and tax-advantaged retirement vehicles such as an IRA or 401(k) plan.
Shareholders are urged to consult their own tax professionals regarding
specific questions as to federal, state or local taxes.

INVESTMENT COMPANY TAXATION. The Fund intends to remain qualified as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986. As such, the Fund will not be subject to federal income tax on its net
investment income and capital gains, if any, to the extent that it distributes
such income and capital gains to its shareholders.

The Fund generally intends to distribute sufficient income and gains so
that the Fund will not pay corporate income tax on its earnings. The Fund also
generally intends to distribute to its shareholders in each calendar year a
sufficient amount of ordinary income and capital gains to avoid the imposition
of a 4% excise tax. However, the Fund may instead determine to retain all or
part of any net long-term capital gains in any year for reinvestment. In such
event, the Fund will pay federal income tax (and possibly excise tax) on such
retained gains.

Gains or losses on sales of securities by the Fund will be long-term
capital gains or losses if the securities have a tax holding period of more
than one year. Gains or losses on the sale of securities with a tax holding
period of one year or less will be short-term gains or losses.

Gains or losses on the Fund's transactions in listed non-equity options,
futures and options on futures generally are treated as 60% long-term and 40%
short-term. When the Fund engages in options and futures transactions, various
tax rules may accelerate or defer recognition of certain gains and losses,
change the character of certain gains or losses, or alter the holding period of
other investments held by the Fund. The application of these rules would
therefore also affect the amount, timing and character of distributions made by
the Fund.

Under certain tax rules, the Fund may be required to accrue a portion of
any discount at which certain securities are purchased as income each year even
though the Fund receives no payments in cash on the security during the year.
In addition, if the Fund invests in an equity security of a non-U.S.
corporation classified as a "passive foreign investment company" for U.S. tax
purposes, the application of certain technical tax provisions applying to
investments in such companies may result in the Fund being required to accrue
income in respect of the security without any receipt of cash attributable to
such income. To the extent that the Fund invests in such securities, it would
be required to pay out such accrued discount as an income distribution in each
year in order to avoid taxation at the Fund level. Such distributions will be
made from the available cash of the Fund or by liquidation of portfolio
securities if necessary. If a distribution of cash necessitates the liquidation
of portfolio securities, the Investment Manager will select which securities to
sell. The Fund may realize a gain or loss from such sales. In the event the
Fund realizes net capital gains from such transactions, its shareholders may
receive a larger capital gain distribution, if any, than they would in the
absence of such transactions.

TAXATION OF DIVIDENDS AND DISTRIBUTIONS. Shareholders normally will have
to pay federal income taxes, and any state and/or local income taxes, on the
dividends and other distributions they receive from the Fund. Such dividends
and distributions, to the extent that they are derived from net investment
income or short-term capital gains, are taxable to the shareholder as ordinary
income regardless of whether the shareholder receives such payments in
additional shares or in cash.

Distributions of net long-term capital gains, if any, are taxable to
shareholders as long-term capital gains regardless of how long a shareholder
has held the Fund's shares and regardless of whether the distribution is
received in additional shares or in cash. The maximum tax rate on long-term
capital gains realized by non-corporate shareholders is 20%.

<PAGE>

Shareholders are generally taxed on any ordinary dividend or capital gain
distributions from the Fund in the year they are actually distributed. However,
if any such dividends or distributions are declared in October, November or
December and paid in January then such amounts will be treated for tax purposes
as received by the shareholders on December 31, to shareholders of record of
such month.

Subject to certain exceptions, a corporate shareholder may be eligible for
a 70% dividends received deduction to the extent that the Fund earns and
distributes qualifying dividends from its investments. Distributions of net
capital gains by the Fund will not be eligible for the dividends received
deduction.

Shareholders who are not citizens or residents of the United States and
certain foreign entities may be subject to withholding of United States tax on
distributions made by the Fund of investment income and short-term capital
gains.

After the end of each calendar year, shareholders will be sent information
on their dividends and capital gain distributions for tax purposes, including
the portion taxable as ordinary income, the portion taxable as long-term
capital gains and the amount of any dividends eligible for the federal
dividends received deduction for corporations.

PURCHASES AND REDEMPTIONS AND EXCHANGES OF FUND SHARES. Any dividend or
capital gains distribution received by a shareholder from any investment
company will have the effect of reducing the net asset value of the
shareholder's stock in that company by the exact amount of the dividend or
capital gains distribution. Furthermore, such dividends and capital gains
distributions are subject to federal income taxes. If the net asset value of
the shares should be reduced below a shareholder's cost as a result of the
payment of dividends or the distribution of realized long-term capital gains,
such payment or distribution would be in part a return of the shareholder's
investment but nonetheless would be taxable to the shareholder. Therefore, an
investor should consider the tax implications of purchasing Fund shares
immediately prior to a distribution record date.

In general, a sale of shares results in capital gain or loss, and for
individual shareholders, is taxable at a federal rate dependent upon the length
of time the shares were held. A redemption of a shareholder's Fund shares is
normally treated as a sale for tax purposes. Fund shares held for a period of
one year or less will, for tax purposes, generally result in short-term gains
or losses and those held for more than one year generally result in long-term
gain or loss. Under current law, the maximum tax rate on long-term capital
gains realized by non-corporate shareholders is 20%. Any loss realized by
shareholders upon a redemption or sale of shares within six months of the date
of their purchase will be treated as a long-term capital loss to the extent of
any distributions of net long-term capital gains with respect to such shares
during the six-month period.

Gain or loss on the sale or redemption of shares in the Fund is measured
by the difference between the amount received and the tax basis of the shares.
Shareholders should keep records of investments made (including shares acquired
through reinvestment of dividends and distributions) so they can compute the
tax basis of their shares. Under certain circumstances a shareholder may
compute and use an average cost basis in determining the gain or loss on the
sale or redemption of shares.

Exchanges of Fund shares for shares of another fund, including shares of
other Morgan Stanley Dean Witter Funds, are also subject to similar tax
treatment. Such an exchange is treated for tax purposes as a sale of the
original shares in the first fund, followed by the purchase of shares in the
second fund.

If a shareholder realizes a loss on the redemption or exchange of a fund's
shares and reinvests in that fund's shares within 30 days before or after the
redemption or exchange, the transactions may be subject to the "wash sale"
rules, resulting in a postponement of the recognition of such loss for tax
purposes.

X. UNDERWRITERS
--------------------------------------------------------------------------------
The Fund's shares are offered to the public on a continuous basis. The
Distributor, as the principal underwriter of the shares, has certain
obligations under the Distribution Agreement concerning the distribution of the
shares. These obligations and the compensation the Distributor receives are
described above in the sections titled "Principal Underwriter" and "Rule 12b-1
Plan."

<PAGE>

XI. CALCULATION OF PERFORMANCE DATA
--------------------------------------------------------------------------------
From time to time, the Fund may quote its "total return" in advertisements
and sales literature. These figures are computed separately for Class A, Class
B, Class C and Class D shares. The Fund's "average annual total return"
represents an annualization of the Fund's total return over a particular period
and is computed by finding the annual percentage rate which will result in the
ending redeemable value of a hypothetical $1,000 investment made at the
beginning of a one, five or ten year period, or for the period from the date of
commencement of operations, if shorter than any of the foregoing.

For periods of less than one year, the Fund quotes its total return on a
non-annualized basis. Accordingly, the Fund may compute its aggregate total
return for each Class for specified period by determining the aggregate
percentage rate which will result in the ending value of a hypothetical $1,000
investment made at the beginning of the period. For the purpose of this
calculation, it is assumed that all dividends and distributions are reinvested.
The formula for computing aggregate total return involves a percentage obtained
by dividing the ending value by the initial investment (which in the case of
Class A shares is reduced by the Class A initial sales charge) and subtracting
1 from the result. The ending redeemable value is reduced by any CDSC at the
end of the period. Based on the foregoing calculations, the total returns for
the period September 28, 1999 (commencement of operations) through July 31,
2000 were 8.01%, 8.29%, 12.29% and 14.30% for Class A, Class B, Class C and
Class D, respectively.

In addition, the Fund may advertise its total return for each Class over
different periods of time by means of aggregate, average, year-by-year or other
types of total return figures. These calculations may or may not reflect the
imposition of the maximum front-end sales charge for Class A or the deduction
of the CDSC for each of Class B and Class C which, if reflected, would reduce
the performance quoted. For example, the total return of the Fund may be
calculated in the manner described above, but without deduction for any
applicable sales charge. Based on this calculation, the total returns for each
Class for the period September 28, 1999 (commencement of operations) through
July 31, 2000 were 13.99%, 13.29%, 13.29% and 14.30% for Class A, Class B,
Class C and Class D, respectively.

The Fund may also advertise the growth of hypothetical investments of
$10,000, $50,000 and $100,000 in each Class of shares of the Fund by adding 1
to the Fund's aggregate total return to date (expressed as a decimal and
without taking into account the effect of any applicable CDSC) and multiplying
by $9,475, $48,000 and $97,000 in the case of Class A (investments of $10,000,
$50,000 and $100,000 adjusted for the initial sales charge) or by $10,000,
$50,000 and $100,000 in the case of each of Class B, Class C and Class D, as
the case may be. Investments of $10,000, $50,000 and $100,000 in each Class at
inception of the Class would have grown to the following amounts at July 31,
2000.

<TABLE>
<CAPTION>
INVESTMENT AT INCEPTION OF:
INCEPTION -----------------------------------
CLASS DATE: $10,000 $50,000 $100,000
----------------- ---------- --------- --------- -----------
<S> <C> <C> <C> <C>
Class A ......... 9/28/99 $10,801 $54,715 $110,570
Class B ......... 9/28/99 11,329 56,645 113,290
Class C ......... 9/28/99 11,329 56,645 113,290
Class D ......... 9/28/99 11,430 57,150 114,300
</TABLE>

The Fund from time to time may also advertise its performance relative to
certain performance rankings and indexes compiled by recognized organizations.

XII. FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
EXPERTS. The financial statements of the Fund for the period September 28,
1999 (commencement of operations) through July 31, 2000 included in this
Statement of Additional Information and incorporated by reference in the
Prospectus have been so included and incorporated in reliance on the report of
Deloitte & Touche LLP, independent Auditors, given on the authority of said
firm as experts in auditing and accounting.

* * * * *

This Statement of Additional Information and the Prospectus do not contain
all of the information set forth in the Registration Statement the Fund has
filed with the SEC. The complete Registration Statement may be obtained from
the SEC.

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
<S> <C> <C>
COMMON AND PREFERRED STOCKS
AND RIGHTS (96.4%)
Accident & Health Insurance (0.1%)
6,974 AFLAC, Inc. ............................. $ 362,212
287 HealthAxis, Inc.* ....................... 861
1,024 UICI* ................................... 8,192
6,291 UnumProvident Corp. ..................... 144,693
------------
515,958
------------
Advertising (0.4%)
1,226 24/7 Media, Inc.* ....................... 15,018
737 Ackerley Group, Inc. (The)* ............. 9,397
490 ADVO, Inc.* ............................. 20,059
1,337 Be Free, Inc.* .......................... 6,852
479 Catalina Marketing Corp.* ............... 51,552
434 Cybergold, Inc.* ........................ 2,984
1,370 Digital Courier Technologies, Inc.*...... 5,908
616 Digital Impact, Inc.* ................... 9,009
843 Direct Focus, Inc.* ..................... 41,728
3,097 DoubleClick Inc.* ....................... 111,298
347 FreeShop.com, Inc.* ..................... 1,269
1,275 Getty Images, Inc.* ..................... 46,139
25 Grey Global Group Inc. .................. 15,319
722 Harris Interactive Inc.* ................ 2,911
1,732 Harte-Hanks Inc. ........................ 43,841
1,083 infoUSA, Inc.* .......................... 6,498
7,968 Interpublic Group of Companies,
Inc. .................................. 319,218
1,875 Lamar Advertising Co.* .................. 85,547
577 LifeMinders, Inc.* ...................... 12,982
775 Mediaplex, Inc.* ........................ 7,023
478 Modem Media. Poppe Tyson, Inc.*.......... 5,975
637 MyPoints.com, Inc.* ..................... 8,998
816 Netcentives Inc.* ....................... 10,251
378 NetCreations, Inc.* ..................... 11,482
793 Netratings, Inc.* ....................... 15,959
4,651 Omnicom Group, Inc. ..................... 395,335
1,081 Promotions.com, Inc.* ................... 5,608
723 R.H. Donnelley Corp.* ................... 14,505
1,805 Snyder Communications, Inc.* ............ 45,576
2,373 TMP Worldwide, Inc.* .................... 170,856
1,263 True North Communications, Inc. ......... 61,650
1,419 Valassis Communications, Inc.* .......... 47,714
757 Wink Communications, Inc.* .............. 18,546
1,824 Young & Rubicam, Inc. ................... 103,056
------------
1,730,063
------------
Aerospace (0.6%)
547 AAR Corp. ............................... 6,564
2,474 BE Aerospace, Inc.* ..................... 29,843

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
23,959 Boeing Co. .............................. $ 1,173,991
295 Curtiss-Wright Corp. .................... 11,450
2,852 GenCorp Inc. ............................ 22,638
2,887 Goodrich (B.F.) Co. (The) ............... 103,030
10,377 Lockheed Martin Corp. ................... 291,853
327 Moog Inc. (Class A) ..................... 9,483
1,821 Northrop Grumman Corp. .................. 129,405
866 Orbital Sciences Corp.* ................. 13,044
285 Sequa Corp. (Class A)* .................. 12,166
2,366 Teledyne Technologies Inc.* ............. 47,172
362 Triumph Group, Inc.* .................... 11,086
12,449 United Technologies Corp. ............... 726,710
------------
2,588,435
------------
Agricultural Chemicals (0.0%)
2,888 IMC Global Inc. ......................... 39,890
722 Scotts Company (The) (Class A)* ......... 23,555
------------
63,445
------------
Air Freight/Delivery Services (0.2%)
1,275 Airborne Freight Corp. .................. 19,683
903 Atlas Air, Inc.* ........................ 40,071
1,039 C.H. Robinson Worldwide, Inc. ........... 66,252
448 Circle International Group, Inc. ........ 12,656
1,221 CNF Transportation, Inc. ................ 31,059
682 EGL, Inc.* .............................. 19,565
1,322 Expeditors International of
Washington, Inc. ...................... 66,430
7,599 FedEx Corp.* ............................ 301,110
898 Fritz Companies, Inc.* .................. 13,358
2,867 United Parcel Service, Inc.
(Class B) ............................. 168,436
------------
738,620
------------
Airlines (0.3%)
1,834 AirTran Holdings, Inc.* ................. 8,024
692 Alaska Air Group, Inc.* ................. 18,987
843 America West Holdings Corp.
(Class B)* ............................ 13,541
3,881 AMR Corp.* .............................. 128,316
495 Amtran, Inc.* ........................... 6,497
537 Atlantic Coast Airlines Holdings,
Inc.* ................................. 19,802
1,815 Continental Airlines, Inc.
(Class B)* ............................ 94,834
3,352 Delta Air Lines, Inc. ................... 179,960
1,759 Frontier Airlines, Inc.* ................ 31,552
3,174 Mesa Air Group, Inc.* ................... 17,854
845 Mesaba Holdings, Inc.* .................. 8,397
354 Midwest Express Holdings, Inc.* ......... 8,319
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
2,214 Northwest Airlines Corp. (Class A)*...... $ 73,892
620 Skywest, Inc. ........................... 27,667
13,220 Southwest Airlines Co. .................. 312,322
8,079 Trans World Airlines, Inc.* ............. 18,683
1,350 UAL Corp.* .............................. 73,069
1,873 US Airways Group Inc.* .................. 73,515
------------
1,115,231
------------
Alcoholic Beverages (0.3%)
12,194 Anheuser-Busch Companies, Inc. .......... 981,617
467 Beringer Wine Estates Holdings,
Inc.* ................................. 17,162
2,090 Boston Beer Company, Inc. (The)
(Class A)* ............................ 18,287
1,796 Brown-Forman Corp. (Class B) ............ 89,800
456 Canandaigua Brands, Inc.
(Class A)* ............................ 22,515
966 Coors (Adolph) Co. (Class B) ............ 60,858
273 Mondavi (Robert) Corp. (The)
(Class A)* .............................. 8,531
------------
1,198,770
------------
Aluminum (0.2%)
22,802 Alcoa, Inc. ............................. 689,760
1,630 Century Aluminum Co. .................... 21,394
371 Commonwealth Industries, Inc. ........... 2,388
578 IMCO Recycling, Inc. .................... 2,818
1,415 Kaiser Aluminum Corp.* .................. 6,102
183 Maxxam, Inc.* ........................... 3,900
------------
726,362
------------
Apparel (0.1%)
4,386 Cintas Corp. ............................ 185,034
547 Columbia Sportswear Co.* ................ 20,034
1,122 Donna Karan International Inc.* ......... 6,732
1,028 Guess ?, Inc.* .......................... 14,006
3,211 Jones Apparel Group, Inc.* .............. 73,452
494 Kellwood Co. ............................ 11,053
1,549 Liz Claiborne, Inc. ..................... 60,411
2,199 Nautica Enterprises, Inc.* .............. 23,914
621 OshKosh B' Gosh, Inc. (Class A) ......... 9,858
426 Oxford Industries, Inc. ................. 8,227
1,090 Phillips-Van Heusen Corp. ............... 9,810
599 Polo Ralph Lauren Corp.* ................ 9,696
1,782 Quiksilver, Inc.* ....................... 23,834
651 Russell Corp. ........................... 12,817
367 Tarrant Apparel Group* .................. 2,936
3,096 VF Corp. ................................ 68,112
1,327 Warnaco Group, Inc. ..................... 5,474
------------
545,400
------------

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
Assisted Living Services (0.0%)
1,074 Alterra Healthcare Corp.* ............... $ 2,484
1,510 Sunrise Assisted Living, Inc.* .......... 24,160
------------
26,644
------------
Auto Parts: O.E.M. (0.2%)
1,073 American Axle & Manufacturing
Holdings, Inc.* ....................... 16,162
1,853 ArvinMeritor, Inc. ...................... 28,949
709 Borg-Warner Automotive, Inc. ............ 24,062
1,928 Collins & Aikman Corp.* ................. 11,086
4,312 Dana Corp. .............................. 98,906
14,808 Delphi Automotive Systems Corp. 219,343
414 Dura Automotive Systems, Inc.* .......... 4,269
1,929 Eaton Corp. ............................. 130,810
1,863 Federal Mogul Corp. ..................... 17,000
1,921 Gentex Corp.* ........................... 43,703
724 Hayes Lemmerz International, Inc.*....... 9,774
2,239 Johnson Controls, Inc. .................. 116,288
1,693 Lear Corp.* ............................. 39,468
1,111 Mark IV Industries, Inc. ................ 24,442
796 Mascotech, Inc. ......................... 9,154
704 Modine Manufacturing Co. ................ 19,008
800 Sauer-Danfoss, Inc. ..................... 7,850
418 Simpson Industries, Inc. ................ 3,396
545 Stoneridge, Inc. ........................ 4,530
127 Strattec Security Corp.* ................ 4,445
636 Superior Industries International,
Inc. .................................. 19,120
3,187 TRW Inc. ................................ 143,216
4,144 Visteon Corp. ........................... 58,016
------------
1,052,997
------------
Automotive Aftermarket (0.1%)
473 Aftermarket Technology Corp.* ........... 3,784
1,331 Apogee Enterprises, Inc. ................ 5,657
391 Bandag, Inc. ............................ 10,117
1,490 Barnes Group, Inc. ...................... 29,427
790 Carlisle Co., Inc. ...................... 35,747
533 CLARCOR Inc. ............................ 11,160
1,988 Cooper Tire & Rubber Co. ................ 22,241
964 Exide Corp. ............................. 6,808
4,660 Genuine Parts Co. ....................... 93,491
4,097 Goodyear Tire & Rubber Co. .............. 81,684
398 IMPCO Technologies, Inc.* ............... 9,552
817 SPX Corp.* .............................. 116,984
457 Standard Motor Products, Inc. ........... 4,427

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
2,682 TBC Corp.* .............................. $ 12,404
2,309 Tenneco Automotive Inc. ................. 13,565
-------------
457,048
-------------
Beverages - Non-Alcoholic (1.4%)
492 Coca-Cola Bottling Co. Consolidated...... 21,648
65,371 Coca-Cola Co. ........................... 4,008,059
11,151 Coca-Cola Enterprises Inc. .............. 213,960
1,122 National Beverage Corp.* ................ 9,116
3,911 Pepsi Bottling Group, Inc. (The) ........ 119,530
38,151 PepsiCo, Inc. ........................... 1,747,793
456 Triarc Co., Inc.* ....................... 9,946
3,561 Whitman Corp. ........................... 53,192
-------------
6,183,244
-------------
Biotechnology (1.6%)
2,096 Abgenix, Inc.* .......................... 105,062
817 Aclara Biosciences Inc.* ................ 34,314
4,276 Advanced Tissue Sciences, Inc.* ......... 23,117
716 Affymetrix, Inc.* ....................... 97,768
375 Alexion Pharmaceuticals, Inc.* .......... 24,187
1,426 Alkermes, Inc.* ......................... 47,236
27,119 Amgen Inc.* ............................. 1,761,040
1,357 Amylin Pharmaceuticals, Inc.* ........... 17,302
611 Antigenics Inc.* ........................ 10,692
674 Aphton Corp.* ........................... 18,788
1,036 ARIAD Pharmaceuticals, Inc.* ............ 9,712
703 Aurora Biosciences Corp.* ............... 56,591
1,990 AVANT Immunotherapeutics, Inc.*.......... 12,935
667 AVI BioPharma, Inc.* .................... 4,627
315 Avigen, Inc.* ........................... 11,340
1,306 Axys Pharmaceuticals, Inc.* ............. 7,183
1,335 Bio-Technology General Corp.* ........... 13,684
355 BioCryst Pharmaceuticals, Inc.* ......... 10,783
3,938 Biogen, Inc.* ........................... 208,714
1,688 Celgene Corp.* .......................... 87,670
1,166 Cell Genesys, Inc.* ..................... 24,850
817 Cephalon, Inc.* ......................... 32,935
4,761 Chiron Corp.* ........................... 199,367
634 COR Therapeutics, Inc.* ................. 51,037
709 Corixa Corp.* ........................... 24,195
515 Coulter Pharmaceutical, Inc.* ........... 12,102
912 Creative Biomolecules, Inc.* ............ 7,780
895 Cubist Pharmaceuticals, Inc.* ........... 40,387
1,184 CuraGen Corp.* .......................... 41,070
557 CV Therapeutics, Inc.* .................. 32,376
3,135 CYTOGEN Corp.* .......................... 19,986
183 Diversa Corp.* .......................... 6,588
609 Emisphere Technologies, Inc.* ........... 16,215

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
630 Enzo Biochem, Inc.* ..................... $ 33,587
1,050 Enzon, Inc.* ............................ 46,987
1,121 Exelixis, Inc.* ......................... 43,649
817 GelTex Pharmaceuticals, Inc.* ........... 23,693
608 Gene Logic, Inc.* ....................... 11,856
1,778 Genelabs Technologies, Inc.* ............ 6,112
2,201 Genentech, Inc.* ........................ 334,827
492 Genome Therapeutics Corp.* .............. 10,332
2,205 Genzyme Corp. (General Division)*........ 153,110
603 Genzyme Transgenics Corp.* .............. 18,128
459 Geron Corp.* ............................ 9,983
1,151 Gilead Sciences, Inc.* .................. 85,318
627 Guilford Pharmaceuticals Inc.* .......... 9,993
2,260 Hemispherx Biopharma, Inc.* ............. 16,102
1,430 Human Genome Sciences, Inc.* ............ 172,762
322 Hyseq, Inc.* ............................ 10,405
1,191 ICOS Corp.* ............................. 54,339
1,173 IDEC Pharmaceuticals Corp.* ............. 144,059
922 IDEXX Laboratories, Inc.* ............... 22,358
527 ILEX Oncology, Inc.* .................... 19,235
818 ImClone Systems, Inc.* .................. 59,816
13,220 Immunex Corp.* .......................... 670,089
1,206 ImmunoGen, Inc.* ........................ 12,437
1,008 Immunomedics, Inc.* ..................... 17,262
840 Incyte Pharmaceuticals, Inc.* ........... 63,682
971 Interneuron Pharmaceuticals, Inc.*....... 2,003
613 Invitrogen Corp.* ....................... 38,466
2,386 Isis Pharmaceuticals, Inc.* ............. 26,842
1,255 Lexicon Genetics Inc.* .................. 42,827
1,194 Ligand Pharmaceuticals, Inc.
(Class B)* ............................ 11,940
716 Luminex Corp.* .......................... 25,955
526 Maxim Pharmaceuticals, Inc.* ............ 25,610
846 Maxygen Inc.* ........................... 52,452
1,194 Medarex, Inc.* .......................... 87,013
5,511 MedImmune, Inc.* ........................ 327,904
377 MGI Pharma, Inc.* ....................... 10,367
2,416 Millennium Pharmaceuticals, Inc.* ....... 232,540
260 Myriad Genetics, Inc.* .................. 34,531
1,719 NABI, Inc.* ............................. 13,000
476 Nanogen, Inc.* .......................... 12,614
530 NeoRx Corp.* ............................ 8,745
481 Neurocrine Biosciences, Inc.* ........... 15,362
533 Neurogen Corp.* ......................... 15,124
459 Nexell Therapeutics Inc.* ............... 4,071
677 Northfield Laboratories, Inc.* .......... 10,493
905 NPS Pharmaceuticals, Inc.* .............. 25,566
869 Orchid Biosciences* ..................... 31,936

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
1,194 Organogenesis, Inc.* ..................... $ 14,477
1,235 OSI Pharameceuticals Inc.* ............... 41,450
909 OXiGENE, Inc.* ........................... 8,522
588 PathoGenesis Corp.* ...................... 15,472
1,473 PE Corporation-Celera Genomics
Group* ................................. 127,967
418 Pharmacyclics, Inc.* ..................... 19,646
432 Progenics Pharmaceuticals, Inc.* ......... 8,748
491 Protein Design Labs, Inc.* ............... 59,503
1,175 Regeneron Pharmaceuticals, Inc.* ......... 32,973
760 Ribozyme Pharmaceuticals, Inc.* .......... 18,525
616 SafeScience, Inc.* ....................... 2,368
450 SangStat Medical Corp.* .................. 8,437
1,639 SciClone Pharmaceuticals, Inc.* .......... 19,566
576 Sequenom Inc.* ........................... 16,308
2,369 SICOR Inc.* .............................. 22,357
801 SuperGen, Inc.* .......................... 22,215
1,990 Targeted Genetics Corp.* ................. 19,776
2,499 Texas Biotechnology Corp.* ............... 39,359
394 Titan Pharmaceuticals, Inc.* ............. 13,421
570 Transkaryotic Therapies, Inc.* ........... 15,105
897 Triangle Pharmaceuticals, Inc.* .......... 8,129
456 Trimeris, Inc.* .......................... 26,049
1,240 Tularik Inc.* ............................ 33,015
612 Valentis, Inc.* .......................... 4,877
673 Vertex Pharmaceuticals, Inc.* ............ 65,912
632 Vical, Inc.* ............................. 10,270
1,166 Vion Pharmaceuticals, Inc.* .............. 9,911
414 ViroPharma Inc.* ......................... 7,452
2,259 XOMA Ltd.* ............................... 13,836
------------
6,882,761
------------
Books/Magazines (0.1%)
1,174 Advanced Marketing Services, Inc. ........ 20,178
1,865 Harcourt General, Inc. ................... 102,925
512 Hollywood.com, Inc.* ..................... 4,864
785 Houghton Mifflin Co. ..................... 37,189
606 IDG Books Worldwide, Inc.* ............... 5,378
526 Information Holdings Inc.* ............... 18,344
1,623 John Wiley & Sons, Inc. (Class A) ........ 35,503
334 Martha Stewart Living Omnimedia,
Inc. (Class A)* ........................ 8,287
1,302 Meredith Corp. ........................... 41,420
832 Penton Media, Inc. ....................... 28,808
563 Playboy Enterprises, Inc. (Class B)*...... 6,791
4,149 PRIMEDIA Inc.* ........................... 84,536
2,795 Reader's Digest Assoc., Inc.
(Class A) ................................ 105,686

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
437 Scholastic Corp.* ........................ $ 27,913
2,616 Ziff-Davis, Inc.-ZDNET* .................. 37,441
------------
565,263
------------
Broadcasting (0.6%)
389 Acme Communications, Inc.* ............... 4,133
5,684 AMFM, Inc.* .............................. 406,051
601 BHC Communications, Inc.
(Class A) .............................. 89,474
908 Chris-Craft Industries, Inc.* ............ 60,722
927 Citadel Communications Corp.* ............ 27,752
8,871 Clear Channel Communications,
Inc.* .................................. 675,859
810 Cox Radio, Inc. (Class A)* ............... 19,541
649 Cumulus Media, Inc.* ..................... 6,328
1,074 Emmis Broadcasting Corp.
(Class A)* ............................. 38,731
880 Entercom Communications Corp.* ........... 34,155
275 Granite Broadcasting Corp.* .............. 1,702
1,299 Hearst-Argyle Television, Inc.* .......... 24,762
2,848 Hispanic Broadcasting Corp.* ............. 108,402
10,167 Infinity Broadcasting Corp.
(Series A)* ............................ 358,387
1,347 On2.com, Inc.* ........................... 4,209
1,280 Paxson Communications Corp.* ............. 13,280
584 Radio One, Inc.* ......................... 13,614
1,168 Radio One, Inc. (Class D)* ............... 22,046
483 Radio Unica Communications
Corp.* ................................. 3,668
498 Saga Communications, Inc.
(Class A)* ............................. 11,454
1,219 Salem Communications Corp.* .............. 14,780
2,734 Sinclair Broadcast Group, Inc.* .......... 29,903
1,005 Sirus Satellite Radio Inc.* .............. 38,567
530 Spanish Broadcasting System, Inc.
(Class A)* ............................. 5,896
1,087 Tanox, Inc.* ............................. 52,176
268 United Television, Inc. .................. 36,180
2,672 Univision Communications, Inc.
(Class A)* ............................. 331,996
7,695 USA Networks, Inc.* ...................... 162,076
2,907 Westwood One, Inc.* ...................... 80,851
843 XM Satellite Radio Holdings Inc.
(Class A)* ............................. 26,186
198 Young Broadcasting Corp.
(Class A)* ............................. 6,695
------------
2,709,576
------------

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
Building Materials (0.1%)
100 Ameron International Corp. .............. $ 3,750
443 Centex Construction Products, Inc. ...... 10,853
462 Elcor Corp. ............................. 8,865
437 Florida Rock Industries, Inc. ........... 15,732
3,716 Johns Manville Corp. .................... 47,843
1,809 Lafarge Corp. ........................... 40,702
1,224 Martin Marietta Materials, Inc. ......... 51,637
1,437 Owens Corning ........................... 7,903
941 Southdown, Inc. ......................... 58,577
502 Texas Industries, Inc. .................. 16,284
392 Trex Co., Inc.* ......................... 21,021
351 U.S. Aggregates, Inc. ................... 5,879
1,296 USG Corp. ............................... 38,070
2,622 Vulcan Materials Co. .................... 112,254
------------
439,370
------------
Building Materials/DIY Chains (0.9%)
994 Fastenal Co. ............................ 61,379
61,104 Home Depot, Inc. (The) .................. 3,162,132
10,020 Lowe's Companies, Inc. .................. 422,719
------------
3,646,230
------------
Building Products (0.1%)
1,854 American Standard Companies,
Inc.* ................................. 82,619
360 American Woodmark Corp. ................. 6,930
956 Armstrong Holdings, Inc. ................ 15,296
1,233 Dal-Tile International Inc.* ............ 11,097
1,275 Griffon Corp.* .......................... 7,969
778 Lennox International Inc. ............... 10,260
404 LSI Industries, Inc. .................... 6,767
11,715 Masco Corp. ............................. 231,371
557 NCI Building Systems, Inc.* ............. 10,513
1,005 Nortek, Inc.* ........................... 19,723
212 Simpson Manufacturing Co., Inc.* ........ 10,388
822 Watsco, Inc. ............................ 11,457
1,021 York International Corp. ................ 28,397
------------
452,787
------------
Cable Television (0.5%)
1,149 ACTV, Inc.* ............................. 17,163
2,963 Adelphia Communications Corp.
(Class A)* ............................ 104,446
1,889 AT&T Corp. - Liberty Media
Group (Class A)* ...................... 42,030
3,415 Cablevision Systems Corp.
(Class A)* ............................ 224,750
4,455 Charter Communications, Inc.
(Class A) ............................. 58,750

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
24,283 Comcast Corp. (Class A Special)* ........ $ 826,001
15,129 Cox Communications, Inc.
(Class A)* ............................ 558,827
6,059 EchoStar Communications Corp.
(Class A)* ............................ 238,952
1,173 Insight Communications Co., Inc.* ....... 14,369
982 Lodgenet Entertainment Corp.* ........... 25,532
1,530 Mediacom Communications Corp.
(Class A)* ............................ 23,332
852 Nucentrix Broadband Networks,
Inc.* ................................. 23,856
1,169 Pegasus Communications Corp.* ........... 49,390
1,587 TCI Satellite Entertainment, Inc.* ...... 16,862
2,017 UnitedGlobalCom, Inc. (Class A)* ........ 98,959
------------
2,323,219
------------
Canadian Oil & Gas (0.0%)
1,059 Denbury Resources Inc.* ................. 4,898
------------
Casino/Gambling (0.1%)
256 Anchor Gaming* .......................... 13,872
687 Argosy Gaming Co.* ...................... 9,575
928 Aztar Corp.* ............................ 14,152
1,653 Boyd Gaming Corp.* ...................... 7,335
843 Churchill Downs Inc. .................... 19,389
768 Dover Downs Entertainment, Inc. 8,832
832 GTECH Holdings Corp.* ................... 17,004
3,370 Harrah's Entertainment, Inc.* ........... 84,461
940 Isle of Capri Casinos, Inc.* ............ 11,632
2,377 Mandalay Resort Group* .................. 58,088
4,151 MGM Grand, Inc. ......................... 149,177
7,990 Park Place Entertainment Corp.* ......... 100,374
588 Pinnacle Entertainment, Inc.* ........... 11,503
466 Scientific Games Holding Corp.* ......... 11,941
1,508 Station Casinos, Inc.* .................. 19,409
------------
536,744
------------
Catalog/Specialty Distribution (0.2%)
1,961 1-800-Flowers.com, Inc. (Class H)* ...... 11,705
9,160 Amazon.com, Inc.* ....................... 275,945
2,585 Ashford.com, Inc.* ...................... 8,240
895 Audible, Inc.* .......................... 2,126
1,905 Barnesandnoble.com. Inc.* ............... 9,763
700 Beyond.com Corp.* ....................... 875
3,258 BUY.COM* ................................ 13,643
787 CDnow, Inc.* ............................ 2,336
2,266 CDW Computer Centers, Inc.* ............. 109,193
461 Coldwater Creek, Inc.* .................. 14,521
1,139 Cyberian Outpost, Inc.* ................. 4,485
1,035 Drugstore.com, Inc.* .................... 5,110

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
1,463 Egghead.com, Inc.* ....................... $ 3,566
2,444 EMusic.com Inc.* ......................... 5,193
394 Envision Development Corp.* .............. 4,777
3,042 eToys, Inc.* ............................. 14,545
919 Fatbrain.com, Inc.* ...................... 5,284
826 Fogdog, Inc.* ............................ 1,136
2,975 Gerald Stevens, Inc.* .................... 4,462
4,700 Hanover Direct, Inc.* .................... 4,700
2,021 iGo Corp.* ............................... 7,452
678 Insight Enterprises, Inc.* ............... 31,357
790 Lands' End, Inc.* ........................ 29,576
1,074 PC Connection, Inc.* ..................... 48,531
1,243 PlanetRx.com, Inc.* ...................... 1,243
1,139 Shop At Home, Inc.* ...................... 4,129
3,325 Spiegel, Inc. (Class A) .................. 23,275
427 Streamline.com, Inc.* .................... 1,254
1,023 Systemax, Inc.* .......................... 3,772
1,361 Tickets.com, Inc.* ....................... 3,232
3,418 Value America, Inc.* ..................... 2,670
1,009 Valuevision International, Inc.
(Class A)* ............................. 15,703
540 Webvan Group Inc.* ....................... 2,919
------------
676,718
------------
Cellular Telephone (1.0%)
737 Advanced Radio Telecom Corp.* ............ 8,429
285 AirGate PCS, Inc.* ....................... 14,321
1,494 Alamosa PCS Holdings, Inc.* .............. 29,880
2,046 Arch Communications Group, Inc.*.......... 10,230
2,375 Centennial Cellular Corp.
(Class A)* ............................. 36,070
4,371 Crown Castle International Corp.* ........ 148,614
2,449 Dobson Communications Corp.
(Class A)* ............................. 53,572
664 Leap Wireless International, Inc.* ....... 42,081
1,224 Motient Corp.* ........................... 14,458
20,029 Nextel Communications, Inc.
(Class A)* ............................. 1,120,372
811 Powertel, Inc.* .......................... 72,889
1,437 Price Communications Corp.* .............. 31,973
217 Rural Cellular Corp. (Class A)* .......... 17,007
849 SBA Communications Corp.* ................ 38,311
24,172 Sprint Corp. (PCS Group)* ................ 1,335,503
2,272 TeleCorp PCS, Inc.* ...................... 97,838
2,563 Tritel, Inc.* ............................ 79,773
1,408 Triton PCS Holdings, Inc.
(Class A)* ............................. 70,664
2,292 United States Cellular Corp.* ............ 155,856

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
5,561 Voicestream Wireless Corp.* .............. $ 713,198
1,853 Western Wireless Corp.
(Class A)* ............................... 101,915
------------
4,192,954
------------
Clothing/Shoe/Accessory Stores (0.5%)
2,600 Abercrombie & Fitch Co.
(Class A)* ............................. 41,762
1,177 American Eagle Outfitters, Inc.* ......... 17,508
827 Ann Taylor Stores Corp.* ................. 23,363
527 bebe stores, inc.* ....................... 5,237
1,611 Buckle (The), Inc.* ...................... 21,950
928 Burlington Coat Factory Warehouse
Corp. .................................. 10,904
2,179 Cato Corp. (Class A) ..................... 24,241
1,110 Charlotte Russe Holdings Inc.* ........... 13,389
2,353 Charming Shoppes, Inc.* .................. 13,236
696 Chico's Fas, Inc.* ....................... 20,532
1,803 Children's Place Retail Stores, Inc.
(The)* ................................. 46,427
1,342 Claire's Stores, Inc. .................... 22,646
588 Deb Shops, Inc. .......................... 5,843
1,539 Dress Barn, Inc.* ........................ 31,934
325 Factory 2-U Stores, Inc.* ................ 13,487
482 Footstar, Inc.* .......................... 15,183
22,300 Gap, Inc. (The) .......................... 798,619
763 Genesco Inc.* ............................ 11,636
1,059 Goody's Family Clothing, Inc.* ........... 5,527
932 Hot Topic, Inc.* ......................... 30,057
13,058 Intimate Brands, Inc. .................... 227,699
11,260 Limited, Inc. (The) ...................... 230,126
1,099 Men's Wearhouse, Inc. (The)* ............. 28,505
3,496 Nordstrom, Inc. .......................... 61,180
743 Pacific Sunwear of California, Inc.*...... 11,238
784 Payless ShoeSource, Inc.* ................ 40,474
2,283 Ross Stores, Inc.* ....................... 35,101
4,825 Stein Mart, Inc.* ........................ 53,075
794 Talbot's, Inc. (The) ..................... 40,097
8,127 TJX Companies, Inc. ...................... 136,127
774 Too, Inc.* ............................... 17,367
693 United Retail Group, Inc.* ............... 4,050
1,498 Urban Outfitters, Inc.* .................. 16,103
3,608 Venator Group, Inc.* ..................... 50,963
565 Wet Seal, Inc. (Class A)* ................ 6,286
1,425 Wilsons The Leather Experts Inc.*......... 26,184
------------
2,158,056
------------

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
Coal Mining (0.0%)
1,157 Arch Coal, Inc. ........................... $ 9,111
2,060 CONSOL Energy, Inc. ....................... 35,406
------------
44,517
------------
Computer Communications (3.8%)
9,266 3Com Corp.* ............................... 125,670
2,724 Adaptec, Inc.* ............................ 67,419
1,061 Alteon Websystems Inc.* ................... 139,986
764 Ancor Communications, Inc.* ............... 30,178
977 Auspex Systems, Inc.* ..................... 7,175
1,077 Avocent Corp.* ............................ 48,078
588 Aware, Inc.* .............................. 23,152
2,839 Brocade Communications Systems,
Inc.* ................................... 507,116
4,777 Cabletron Systems, Inc.* .................. 124,799
937 CacheFlow Inc.* ........................... 63,716
183,722 Cisco Systems, Inc.* ...................... 12,022,308
689 Cobalt Networks, Inc.* .................... 31,436
890 Computer Network Technology
Corp.* .................................. 14,462
671 Crossroads Systems, Inc.* ................. 3,061
787 Digi International Inc.* .................. 4,919
244 DSET Corp.* ............................... 7,167
1,285 Echelon Corp.* ............................ 47,706
946 Emulex Corp.* ............................. 47,300
240 Extended Systems Inc.* .................... 15,225
1,380 Extreme Networks, Inc.* ................... 192,704
4,030 Finisar Corp.* ............................ 107,047
3,017 Foundry Networks, Inc.* ................... 246,828
637 FVC.COM, Inc.* ............................ 3,026
650 Gadzoox Networks, Inc.* ................... 6,541
416 Intrusion.com, inc.* ...................... 4,524
528 JNI Corp.* ................................ 22,539
8,296 Juniper Networks, Inc.* ................... 1,181,661
850 MMC Networks, Inc.* ....................... 42,022
413 Netopia, Inc.* ............................ 22,302
660 NETRIX Corp.* ............................. 4,867
1,030 Network Equipment Technologies,
Inc.* ................................... 10,557
541 Network Peripherals Inc.* ................. 6,999
13,751 Palm, Inc.* ............................... 536,270
412 PC-Tel, Inc.* ............................. 12,592
1,195 Performance Technologies, Inc.* ........... 11,203
555 PLX Technology, Inc.* ..................... 15,609
308 Proxim, Inc.* ............................. 23,427
3,835 Redback Networks, Inc.* ................... 498,550
378 Tut Systems, Inc.* ........................ 34,492
880 Vertel Corp.* ............................. 7,370

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
516 Vixel Corp.* .............................. $ 3,048
778 Xircom, Inc.* ............................. 26,598
------------
16,351,649
------------
Computer Software (5.4%)
700 Actuate Software Corp.* ................... 34,475
3,162 Adobe Systems, Inc. ....................... 362,049
1,313 American Software, Inc.
(Class A)* .............................. 7,878
3,183 Applied Digital Solutions, Inc.* .......... 15,119
238 Applix Inc* ............................... 1,041
314 AremisSoft Corp.* ......................... 8,949
1,148 Artisoft, Inc.* ........................... 8,969
1,275 Aspect Communications Corp.* .............. 23,428
986 Aspen Technology, Inc.* ................... 29,642
1,614 Autodesk, Inc.* ........................... 34,903
892 Avant! Corp.* ............................. 13,937
737 AXENT Technologies, Inc.* ................. 18,149
1,393 Be Incorporated* .......................... 5,790
1,167 BindView Development Corp.* ............... 10,321
6,400 BMC Software, Inc.* ....................... 120,800
247 Bottomline Technologies, Inc.* ............ 5,804
695 Brio Techology, Inc.* ..................... 5,212
814 BSQUARE Corporation* ...................... 14,448
2,561 Centura Sotware Corp.* .................... 7,763
4,697 Citrix Systems, Inc.* ..................... 71,629
283 Clarus Corp.* ............................. 10,471
15,422 Computer Associates International,
Inc. .................................... 382,658
9,447 Compuware Corp.* .......................... 75,576
685 Cylink Corp.* ............................. 8,562
1,306 Daleen Technologies, Inc.* ................ 22,202
727 Datastream Systems, Inc.* ................. 6,543
588 Deltek Systems, Inc.* ..................... 3,528
495 Digital River, Inc.* ...................... 3,310
458 Documentum, Inc.* ......................... 21,469
850 E.piphany, Inc.* .......................... 79,103
1,404 Entrust Technologies Inc.* ................ 40,102
1,790 Epicor Software Corp.* .................... 6,712
852 eSoft, Inc.* .............................. 4,393
334 Excalibur Technologies Corp.* ............. 15,385
790 FileNET Corp.* ............................ 13,973
955 General Magic, Inc.* ...................... 4,924
458 Geoworks* ................................. 6,813
376 Great Plains Software, Inc.* .............. 8,789
620 HNC Software, Inc.* ....................... 27,357
787 Hyperion Solutions Corp.* ................. 20,954
5,111 i2 Technologies, Inc.* .................... 663,152
1,273 iGATE Capital Corp.* ...................... 12,014

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
2,520 Indus International, Inc.* ............. $ 20,475
1,143 Inet Technologies, Inc.* ............... 53,721
867 Informatica Corp.* ..................... 69,360
1,032 Information Architects Corp.* .......... 6,579
7,055 Informix Corp.* ........................ 31,527
2,387 Inprise Corp. (Mexico)* ................ 13,128
363 Inso Corp.* ............................ 2,359
311 Interactive Intelligence, Inc.* ........ 12,634
5,327 Intuit Inc.* ........................... 181,118
2,874 J.D. Edwards & Co.* .................... 36,464
864 JDA Software Group, Inc.* .............. 14,040
2,144 Legato Systems, Inc.* .................. 20,837
617 Level 8 Systems, Inc.* ................. 13,458
1,554 LHS Group, Inc.* ....................... 62,121
1,078 Lightspan Inc.* ........................ 6,064
799 Logility, Inc.* ........................ 3,296
1,292 Macromedia, Inc.* ...................... 98,838
1,011 MAPICS, Inc.* .......................... 3,791
457 MapInfo Corp.* ......................... 14,681
582 Marimba, Inc.* ......................... 10,440
760 Mercator Software, Inc.* ............... 15,580
2,101 Mercury Interactive Corp.* ............. 208,557
1,072 Metacreations Cor* ..................... 12,663
920 Metasolv Software, Inc.* ............... 43,355
884 Micromuse Inc.* ........................ 114,685
138,989 Microsoft Corp.* ....................... 9,703,170
1,130 MicroStrategy Inc.* .................... 25,072
1,311 National Instruments Corp.* ............ 56,619
351 NEON Systems, Inc.* .................... 4,146
324 netGuru, Inc.* ......................... 5,791
812 NetIQ Corp.* ........................... 39,179
614 NetScout Systems, Inc.* ................ 8,749
936 NetSpeak Corp.* ........................ 8,424
3,649 Network Associates, Inc.* .............. 70,015
915 New Era of Networks, Inc.* ............. 22,875
671 Novadigm, Inc.* ........................ 6,878
8,403 Novell, Inc.* .......................... 79,566
804 Nuance Communications Inc.* ............ 112,861
912 Objective Systems Integrators,
Inc.* ................................ 10,545
1,208 ONYX Software Corp.* ................... 29,218
74,967 Oracle Corp.* .......................... 5,636,581
676 Packeteer, Inc.* ....................... 26,026
7,206 Parametric Technology Corp.* ........... 72,060
485 pcOrder.com, Inc. (The)* ............... 2,455
7,036 PeopleSoft, Inc.* ...................... 153,473
3,602 Peregine Systems, Inc.* ................ 89,825
442 Persistence Software, Inc.* ............ 7,569

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
351 Pervasive Software, Inc.* .............. $ 1,294
859 Phoenix Technologies Ltd. .............. 14,603
2,079 Phone.com, Inc.* ....................... 166,060
398 Primus Knowledge Solutions, Inc.*....... 10,597
834 Progress Software Corp.* ............... 12,562
534 Project Software & Development,
Inc.* ................................ 9,412
1,060 Puma Technology, Inc.* ................. 21,200
2,204 QAD, Inc. .............................. 6,750
2,326 Rational Software Corp.* ............... 236,670
643 RAVISENT Technologies, Inc.* ........... 2,974
3,975 Red Hat, Inc.* ......................... 74,531
732 Remedy Corp.* .......................... 16,150
737 Saga Systems, Inc.* .................... 7,462
614 Sanchez Computer Associates, Inc.*...... 12,856
801 Santa Cruz Operation, Inc. (The)* ...... 2,503
1,530 Sapient Corp.* ......................... 174,037
528 SeaChange International, Inc.* ......... 11,129
1,709 Secure Computing Corp.* ................ 30,762
1,029 Serena Software, Inc.* ................. 28,297
5,272 Siebel Systems, Inc.* .................. 764,440
526 Sonic Foundry, Inc.* ................... 6,575
802 SPSS, Inc.* ............................ 23,960
720 StarBase Corp.* ........................ 5,670
640 Structural Dynamics Research
Corp.* ............................... 9,280
2,057 Sybase Inc.* ........................... 49,625
1,557 Symantec Corp.* ........................ 79,796
4,947 TIBCO Software, Inc.* .................. 509,541
706 Timberline Software Corp. .............. 4,324
821 Transaction Systems Architects,
Inc. (Class A)* ...................... 14,521
969 Ulticom, Inc.* ......................... 32,461
410 Unify Corp.* ........................... 1,614
2,525 USinternetworking, Inc.* ............... 40,084
1,232 VA Linux Systems, Inc.* ................ 39,116
10,324 Veritas Software Corp.* ................ 1,052,403
814 Verity, Inc.* .......................... 29,660
1,828 Wind River Systems, Inc.* .............. 53,583
531 Witness Systems, Inc.* ................. 8,496
980 Xybernaut Corp.* ....................... 7,687
663 Zamba Corp.* ........................... 3,729
------------
23,055,578
------------
Computer/Video Chains (0.2%)
5,357 Best Buy Co., Inc.* .................... 389,722
720 Blockbuster, Inc. (Class A) ............ 8,055

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------

5,329 Circuit City Stores, Inc. - Circuit
City Group ............................ $ 122,234
1,423 Electronics Boutique Holdings
Corp.* ................................ 25,970
987 Hollywood Entertainment Corp.* .......... 9,006
1,042 InterTan, Inc.* ......................... 12,243
3,329 Musicland Stores Corp.* ................. 26,216
5,066 RadioShack Corp. ........................ 285,596
271 REX Stores Corp.* ....................... 4,742
932 Trans World Entertainment Corp.* ........ 11,242
518 Tweeter Home Entertainment
Group, Inc.* .......................... 18,713
192 Ultimate Electronics Inc.* .............. 4,728
------------
918,467
------------
Construction/Agricultural
Equipment/Trucks (0.2%)
1,421 AGCO Corp. .............................. 18,295
422 Astec Industries, Inc.* ................. 8,216
9,318 Caterpillar, Inc. ....................... 317,394
537 Columbus McKinnon Corp. ................. 7,921
1,045 Cummins Engine Co., Inc. ................ 33,440
6,133 Deere & Co. ............................. 236,504
513 Detroit Diesel Corp. .................... 11,671
619 Gardner Denver Machinery Inc.* .......... 9,092
2,591 Greenbrier Companies, Inc. (The) ........ 21,538
1,056 JLG Industries, Inc. .................... 10,758
533 Lindsay Manufacturing Co. ............... 9,461
681 Manitowoc Co., Inc. ..................... 16,770
464 NACCO Industries, Inc. (Class A) ........ 16,849
1,604 Navistar International Corp.* ........... 57,243
365 OshKosh Truck Corp. ..................... 12,364
2,053 PACCAR, Inc. ............................ 91,487
727 Stewart & Stevenson Services, Inc. ...... 10,996
656 Terex Corp.* ............................ 10,824
869 Titan International, Inc. ............... 4,617
1,599 Wabash National Corp. ................... 17,189
------------
922,629
------------
Consumer Electronics/Appliances (0.1%)
996 3DO Co. (The)* .......................... 6,412
756 Applica Inc.* ........................... 7,843
1,567 Fedders Corp. ........................... 8,129
450 Harman International Industries,
Inc. .................................. 28,462
3,121 Helen of Troy Ltd. (Bermuda)* ........... 18,336
159 Interlogix, Inc.* ....................... 1,679
2,213 Maytag Corp. ............................ 74,965
249 National Presto Industries, Inc. ........ 7,517

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
336 Salton, Inc.* ........................... $ 10,584
2,362 Sunbeam Corp.* .......................... 6,495
1,136 Universal Electronics Inc.* ............. 21,726
1,951 Whirlpool Corp. ......................... 84,259
------------
276,407
------------
Consumer Specialties (0.0%)
2,209 Boyds Collection, Ltd. (The)* ........... 19,881
765 Fossil, Inc.* ........................... 13,961
1,082 Matthews International Corp.
(Class A) ............................. 30,296
1,230 Movado Group, Inc. ...................... 16,912
449 Russ Berrie & Co., Inc. ................. 8,812
------------
89,862
------------
Consumer Sundries (0.0%)
1,628 American Greetings Corp.
(Class A) ............................. 27,676
1,223 Blyth Industries, Inc.* ................. 35,543
1,567 Oakley, Inc.* ........................... 22,721
606 Sola International, Inc.* ............... 3,598
1,429 Yankee Candle Co., Inc. (The)* .......... 29,830
------------
119,368
------------
Containers/Packaging (0.2%)
920 Aptargroup, Inc. ........................ 22,942
793 Ball Corp. .............................. 27,507
1,320 Bemis Company, Inc. ..................... 45,375
540 Caraustar Industries, Inc. .............. 7,290
3,390 Crown Cork & Seal Co., Inc. ............. 47,248
1,928 Earthshell Corp.* ....................... 5,543
352 Entrade, Inc.* .......................... 1,474
4,179 Gaylord Container Corp.
(Series A)* ........................... 10,970
544 Greif Bros. Corp. (Class A) ............. 13,804
874 Ivex Packaging Corp.* ................... 9,068
174 Liqui-Box Corp. ......................... 8,167
531 Myers Industries, Inc. .................. 7,102
3,788 Owens-Illinois, Inc.* ................... 50,428
2,671 Packaging Corp. of America* ............. 30,383
4,323 Pactiv Corp.* ........................... 39,988
1,961 Rock-Tenn Co. (Class A) ................. 21,081
2,189 Sealed Air Corp.* ....................... 110,271
406 Silgan Holdings, Inc.* .................. 3,597
5,193 Smurfit-Stone Container Corp.* .......... 64,588
2,672 Sonoco Products Co. ..................... 50,267
1,464 Temple-Inland, Inc. ..................... 63,592
311 U.S. Can Corp.* ......................... 5,831
------------
646,516
------------

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
Contract Drilling (0.3%)
345 Atwood Oceanics, Inc.* ................. $ 14,490
3,552 Diamond Offshore Drilling, Inc. ........ 133,422
3,599 ENSCO International Inc. ............... 121,466
4,571 Global Marine, Inc.* ................... 129,416
4,679 Grey Wolf, Inc.* ....................... 21,640
1,249 Helmerich & Payne, Inc. ................ 39,968
1,528 Marine Drilling Companies, Inc.* ....... 33,234
3,847 Nabors Industries, Inc.* ............... 160,131
3,445 Noble Drilling Corp.* .................. 150,073
6,510 Parker Drilling Co.* ................... 36,212
825 Patterson Energy, Inc.* ................ 20,573
1,524 Pride International, Inc.* ............. 31,718
5,086 R&B Falcon Corp.* ...................... 101,402
2,420 Rowan Companies, Inc.* ................. 61,105
3,008 Santa Fe International Corp. ........... 105,656
5,478 Transocean Sedco Forex Inc. ............ 271,161
------------
1,431,667
------------
Department Stores (0.3%)
2,708 Dillard's, Inc. (Class A) .............. 37,066
5,503 Federated Department Stores, Inc.*...... 132,416
8,545 Kohl's Corp.* .......................... 484,929
8,715 May Department Stores Co. .............. 206,981
1,237 Neiman Marcus Group, Inc. (The)
(Class A)* ........................... 40,821
6,826 Penney (J.C.) Co., Inc. ................ 110,069
3,654 Saks, Inc.* ............................ 36,997
9,905 Sears, Roebuck & Co. ................... 295,912
------------
1,345,191
------------
Discount Chains (1.9%)
875 99 Cents Only Stores* .................. 37,680
696 Ames Department Stores, Inc.* .......... 4,959
1,927 BJ's Wholesale Club, Inc.* ............. 57,690
2,793 Consolidated Stores Corp.* ............. 33,341
11,653 Costco Wholesale Corp.* ................ 379,451
8,658 Dollar General Corp. ................... 159,091
2,674 Dollar Tree Stores, Inc.* .............. 113,812
4,530 Family Dollar Stores, Inc. ............. 76,444
995 Fred's, Inc. ........................... 20,646
12,761 Kmart Corp.* ........................... 89,327
510 PriceSmart, Inc.* ...................... 19,125
725 ShopKo Stores, Inc.* ................... 10,467
24,088 Target Corp. ........................... 698,552
660 Value City Department Stores, Inc.* .... 5,775
117,716 Wal-Mart Stores, Inc. .................. 6,467,023
------------
8,173,383
------------

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
Diversified Commercial Services (0.6%)
285 4Kids Entertainment, Inc.* ............. $ 5,415
394 ABM Industries Inc. .................... 10,244
1,461 ACNielsen Corp.* ....................... 35,794
964 Administaff, Inc.* ..................... 51,333
348 AHL Services, Inc.* .................... 2,827
2,116 ALPNET, Inc.* .......................... 4,761
1,055 AnswerThink Consulting Group,
Inc.* ................................ 17,737
2,350 Apac Teleservices* ..................... 16,891
1,044 Audio Visual Services Corp.* ........... 489
563 Bell & Howell Co.* ..................... 11,541
865 Billing Information Concepts
Corp.* ............................... 3,784
283 Bright Horizons Family Solutions,
Inc.* ................................ 6,898
752 Burns International Services Corp.* 9,964
1,175 Careerbuilder, Inc.* ................... 9,216
1,241 Carreker Corp.* ........................ 12,837
1,098 CDI Corp.* ............................. 21,823
2,178 Century Business Sevices, Inc.* ........ 4,492
345 Charles River Associates Inc.* ......... 4,269
1,567 CheckFree Holdings Corp.* .............. 95,195
799 click2learn.com, Inc.* ................. 14,032
5,390 Concord EFS, Inc.* ..................... 146,204
526 Concur Technologies, Inc.* ............. 2,071
4,002 Convergys Corp.* ....................... 180,340
404 Corporate Executive Board Co.* ......... 25,856
383 Costar Group, Inc.* .................... 14,051
823 CTC Communication Group, Inc.* ......... 21,347
1,026 Dendrite International, Inc.* .......... 27,814
543 Diamond Technology Partners,
Inc.* ................................ 48,361
1,157 Edgewater Technology, Inc.* ............ 7,484
646 Exchange Applications, Inc.* ........... 14,212
354 Fair, Isaac & Co., Inc. ................ 17,634
976 Freemarkets, Inc.* ..................... 46,909
466 G & K Services, Inc. (Class A) ......... 14,009
2,396 Galileo International, Inc. ............ 46,123
2,319 Gartner Group, Inc. (Class B)* ......... 25,654
748 GetThere.com, Inc.* .................... 7,947
654 Global Imaging Systems, Inc.* .......... 5,068
51 Global Sources Ltd. (Hong Kong)* ....... 1,530
1,600 HA-LO Industries, Inc.* ................ 8,100
853 Hall, Kinion & Associates, Inc.* ....... 33,374
588 Heidrick & Struggles International,
Inc.* ................................ 39,396
736 HotJobs.com, Ltd.* ..................... 12,926

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
1,098 Identix Inc.* ............................ $ 15,029
3,558 IKON Office Solutions, Inc. .............. 14,454
1,706 Industri-Matematik International
Corp. (Sweden)* ........................ 6,557
266 Insurance Auto Auctions, Inc.* ........... 5,586
427 Interact Commerce Corp.* ................. 5,231
861 Internet Pictures Corp.* ................. 9,525
1,431 Iron Mountain Inc.* ...................... 50,085
1,813 iXL Enterprises, Inc.* ................... 32,181
324 Jupiter Communications, Inc.* ............ 7,735
941 Kelly Services, Inc. (Class A) ........... 21,819
1,280 kforce.com, Inc.* ........................ 5,760
909 Korn/Ferry International* ................ 30,565
923 Labor Ready, Inc.* ....................... 4,615
335 Lason, Inc.* ............................. 628
570 Learning Tree International, Inc.* ....... 25,721
486 Loislaw.com, Inc.* ....................... 4,374
649 Management Network Group, Inc.
(The)* ................................. 15,535
1,988 Manpower, Inc. ........................... 76,911
760 Marketing Services Group, Inc.* .......... 3,895
529 MAXIMUS, Inc.* ........................... 12,630
376 MemberWorks Inc.* ........................ 12,314
265 Metro One Telecommunications,
Inc.* .................................. 2,584
2,423 Modis Professional Services, Inc.* ....... 18,475
859 Navigant Consulting, Inc.* ............... 2,899
1,607 Navigant International, Inc.* ............ 18,581
605 NCO Group, Inc.* ......................... 14,974
2,242 Nextera Enterprises, Inc. (Class A)*...... 9,809
1,930 NOVA Corp.* .............................. 22,316
726 On Assignment, Inc.* ..................... 20,010
9,716 Paychex, Inc. ............................ 444,507
1,213 Pegasystems Inc.* ........................ 5,989
610 Personnel Group of America, Inc.* ........ 1,944
496 ProBusiness Services, Inc.* .............. 11,470
1,228 Profit Recovery Group International,
Inc. (The)* ............................ 11,359
606 PROVANT, Inc.* ........................... 3,484
765 PurchasePro.com Inc.* .................... 29,835
915 RCM Technologies, Inc.* .................. 6,462
4,702 Robert Half International, Inc.* ......... 161,631
3,393 Sabre Holdings Corp. ..................... 82,916
2,507 Sitel Corp.* ............................. 16,295
1,656 Sodexho Marriott Services, Inc. .......... 28,048
637 Source Information Management
Co. (The)* ............................. 6,808
1,603 Spherion Corp.* .......................... 30,657

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
934 Staff Leasing, Inc.* ..................... $ 3,736
1,014 Stamps.com, Inc.* ........................ 5,070
347 StarTek, Inc.* ........................... 13,685
1,216 Sylvan Learning Systems, Inc.* ........... 13,756
2,496 TeleSpectrum Worldwide Inc.* ............. 8,892
1,634 TeleTech Holdings, Inc.* ................. 50,654
1,172 Ventro Corp.* ............................ 14,137
2,489 Viad Corp. ............................... 64,870
417 Volt Information Sciences, Inc.* ......... 14,699
1,033 Wackenhut Corp. (The) (Class A)* ......... 13,881
687 Wackenhut Corrections Corp.* ............. 5,668
1,053 Wireless Facilities, Inc.* ............... 66,997
------------
2,674,200
------------
Diversified Electronic Products (0.7%)
551 Caliper Technologies Corp.* .............. 30,305
1,067 Checkpoint Systems, Inc.* ................ 9,803
2,667 Gemstar-TV Guide International,
Inc.* .................................. 162,187
19,760 JDS Uniphase Corp.* ...................... 2,334,150
1,055 Macrovision Corp.* ....................... 79,652
1,059 Paxar Corp.* ............................. 13,105
4,973 Rockwell International Corp. ............. 174,366
1,010 RSA Security, Inc.* ...................... 64,009
3,793 SCI Systems, Inc.* ....................... 174,004
1,920 Sensormatic Electronics Corp.* ........... 24,840
1,151 Wave Systems Corp. (Class A)* ............ 20,790
756 Zomax, Inc.* ............................. 13,088
------------
3,100,299
------------
Diversified Financial Services (2.1%)
35,198 American Express Co. ..................... 1,995,287
11,358 AXA Financial, Inc. ...................... 434,443
89,131 Citigroup, Inc. .......................... 6,289,306
8,573 Conseco, Inc. ............................ 67,512
8,369 Hancock (John) Financial Services* ....... 197,718
1,416 Leucadia National Corp. .................. 37,789
1,254 Liberty Financial Co., Inc. .............. 27,588
805 StanCorp Financial Group, Inc. ........... 27,772
------------
9,077,415
------------
Diversified Manufacturing (0.6%)
768 Ametek, Inc. ............................. 15,984
690 Blount International, Inc.* .............. 5,736
3,731 Danaher Corp. ............................ 190,048
5,337 Dover Corp. .............................. 244,501
1,208 Federal Signal Corp. ..................... 24,009
901 Graphic Packaging International
Corp.* ................................. 2,140
21,081 Honeywell International, Inc. ............ 708,849

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
2,304 ITT Industries, Inc. .................... $ 75,744
10,457 Minnesota Mining & Manufacturing
Co. ................................... 941,784
1,263 Pentair, Inc. ........................... 38,679
1,567 PubliCARD, Inc.* ........................ 4,701
1,282 Smith (A.O.) Corp. ...................... 20,672
1,309 Standex International Corp. ............. 22,580
958 Teleflex, Inc. .......................... 34,727
7,394 Thermo Electron Corp.* .................. 153,420
940 Tredegar Corp. .......................... 20,680
996 Trinity Industries, Inc. ................ 19,173
2,142 U.S. Industries, Inc. ................... 28,114
935 United Dominion Industries Ltd. ......... 15,369
581 Valmont Industries, Inc. ................ 11,802
------------
2,578,712
------------
Drugstore Chains (0.3%)
10,271 CVS Corp. ............................... 405,063
330 Duane Reade, Inc.* ...................... 7,549
991 Longs Drug Stores Corp. ................. 20,068
6,533 Rite Aid Corp.* ......................... 28,174
26,619 Walgreen Co. ............................ 830,180
------------
1,291,034
------------
E.D.P. Peripherals (1.6%)
1,296 Advanced Digital Information
Corp.* ................................ 18,144
4,436 Ampex Corp. (Class A)* .................. 6,377
671 Avid Technology, Inc.* .................. 9,897
2,009 Communication Intelligence Corp.* ....... 7,471
693 DSP Group, Inc.* ........................ 29,063
1,468 Electronics for Imaging, Inc.* .......... 32,021
57,311 EMC Corp.* .............................. 4,878,599
1,529 Exabyte Corp.* .......................... 9,078
431 Gerber Scientific, Inc. ................. 4,310
592 Hauppauge Digital, Inc.* ................ 3,922
920 Imation Corp* ........................... 22,310
390 Immersion Corp.* ........................ 7,946
668 InFocus Corp.* .......................... 23,380
1,729 Intergraph Corp.* ....................... 10,806
552 Interlink Electronics, Inc.* ............ 18,216
6,807 Iomega Corp.* ........................... 25,952
309 ION Networks, Inc.* ..................... 782
3,347 Lexmark International Group, Inc.
(Class A)* ............................ 150,824
2,857 Maxtor Corp.* ........................... 16,606
601 Media 100 Inc.* ......................... 6,649
606 Mercury Computer Systems, Inc.* ......... 16,286
790 MTI Technology Corp.* ................... 3,259
7,982 Network Appliance, Inc.* ................ 687,949

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
1,204 Pinnacle Systems, Inc.* ................. $ 9,218
843 Procom Technology, Inc.* ................ 36,670
1,925 QLogic Corp.* ........................... 143,412
2,129 Quantum Corp.* .......................... 17,564
4,157 Quantum Corp. - DLT & Storage
Systems* .............................. 48,845
856 Rainbow Technologies, Inc.* ............. 37,129
356 SCM Microsystems, Inc.* ................. 18,378
5,955 Seagate Technology, Inc.* ............... 301,844
403 SmartDisk Corp.* ........................ 9,773
2,528 Storage Technology Corp.* ............... 32,548
3,486 Symbol Technologies, Inc. ............... 139,004
2,245 Western Digital Corp.* .................. 9,261
791 Zebra Technologies Corp.
(Class A)* ............................ 40,390
------------
6,833,883
------------
E.D.P. Services (0.9%)
689 4Front Technologies, Inc.* .............. 9,258
2,270 Acxiom Corp.* ........................... 48,379
1,245 Affiliated Computer Services, Inc.
(Class A)* ............................ 56,103
1,031 American Management Systems,
Inc.* ................................. 25,839
859 Analysts International Corp. ............ 7,785
16,518 Automatic Data Processing, Inc. ......... 818,673
723 Bisys Group, Inc. (The)* ................ 45,910
445 CACI International Inc. (Class A)* ...... 7,565
6,382 Cadence Design Systems, Inc.* ........... 133,224
1,441 Cambridge Technology Partners,
Inc.* ................................. 13,554
3,791 Ceridian Corp.* ......................... 86,245
1,213 Chequemate International, Inc.* ......... 2,502
1,492 CIBER, Inc.* ............................ 17,438
164 Cognizant Technology Solutions
Corp.* ................................ 6,744
991 Complete Business Solutions, Inc.*....... 12,635
809 Computer Horizons Corp.* ................ 10,568
4,386 Computer Sciences Corp.* ................ 274,125
645 Computer Task Group, Inc. ............... 2,782
399 Concero, Inc.* .......................... 3,940
342 Concord Communications, Inc.* ........... 9,405
1,358 CSG Systems International, Inc.* ........ 72,229
469 CyberCash, Inc.* ........................ 2,330
1,140 Datatec Systems, Inc.* .................. 4,667
1,662 DST Systems, Inc.* ...................... 155,189
12,338 Electronic Data Systems Corp. ........... 530,534
281 F.Y.I., Inc.* ........................... 10,292
10,983 First Data Corp. ........................ 505,904

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
3,214 Fiserv, Inc.* ........................... $ 179,381
516 Forrester Research, Inc.* ............... 32,024
848 Globix Corp.* ........................... 19,928
1,060 Henry (Jack) & Associates, Inc. ......... 47,567
1,106 IMRglobal Corp.* ........................ 14,516
7,931 Infonet Services Corp. (Class B)* ....... 111,530
2,756 Information Resources, Inc.* ............ 15,675
362 Intelligroup, Inc.* ..................... 747
615 InterCept Group, Inc. (The)* ............ 14,376
1,879 Keane, Inc.* ............................ 38,519
473 Lightbridge, Inc.* ...................... 10,406
1,279 Manhattan Associates, Inc.* ............. 48,682
3,765 MarchFirst, Inc.* ....................... 77,888
500 McAfee.com Corp.* ....................... 14,500
660 META Group, Inc.* ....................... 16,211
637 Metro Information Services, Inc.* ....... 4,777
805 National Computer Systems, Inc. ......... 57,859
1,074 National Processing, Inc.* .............. 12,619
359 Netsolve, Inc.* ......................... 8,436
465 Pegasus Solutions, Inc.* ................ 4,737
2,521 Perot Systems Corp. (Class A)* .......... 22,689
545 Pivotal Corp. (Canada)* ................. 17,644
849 Policy Management Systems Corp.*......... 11,780
662 Predictive Systems, Inc.* ............... 14,564
339 QRS Corp.* .............................. 6,229
894 Rainmaker Systems, Inc.* ................ 1,537
2,501 Razorfish, Inc.* ........................ 45,331
2,426 Renaissance Worldwide Inc.* ............. 4,549
758 ReSourcePhoenix.com, Inc.* .............. 1,326
1,949 Reynolds & Reynolds Co.
(Class A) ............................. 32,524
1,030 Sagent Technology, Inc.* ................ 10,557
362 SereNova, Inc.* ......................... 2,749
1,106 SVI Holdings, Inc.* ..................... 6,429
1,110 Sykes Enterprises, Inc.* ................ 13,944
1,003 Syntel, Inc. ............................ 9,403
813 Systems & Computer Technology
Corp.* ................................ 16,463
482 Tanning Technology Corp.* ............... 8,917
1,023 Technology Solutions Co.* ............... 5,115
874 TenFold Corp.* .......................... 7,921
5,105 Total System Services, Inc. ............. 92,209
489 U.S. Interactive, Inc.* ................. 6,601
8,140 Unisys Corp.* ........................... 79,874
819 USDATA Corp.* ........................... 5,272
1,302 viaLink Co. (The)* ...................... 8,788
984 ZapMe! Corp.* ........................... 3,290
------------
4,039,902
------------

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
Electric Utilities (1.8%)
11,379 AES Corp. (The)* ........................ $ 608,065
2,894 Allegheny Energy, Inc. .................. 90,799
2,064 Alliant Energy, Inc. .................... 54,309
3,596 Ameren Corp. ............................ 130,130
8,430 American Electric Power Co. ............. 276,609
1,235 Avista Corp. ............................ 23,156
1,041 Bangor Hydro-Electric Co. ............... 24,398
685 BayCorp Holdings, Ltd.* ................. 7,192
419 Black Hills Corp. ....................... 9,716
3,306 Calpine Corp.* .......................... 235,552
729 Central Vermont Public Service
Corp. ................................. 8,657
4,165 Cinergy Corp. ........................... 108,290
537 CLECO Corp. ............................. 19,802
850 CMP Group, Inc. ......................... 24,756
3,035 CMS Energy Corp. ........................ 77,582
301 CN Energy Group, Inc. ................... 9,820
2,347 Conectiv, Inc. .......................... 38,872
5,793 Consolidated Edison, Inc. ............... 175,600
3,920 Constellation Energy Group, Inc. ........ 130,585
4,183 CP&L, Inc ............................... 139,869
7,152 Dominion Resources, Inc. ................ 324,969
3,785 DPL, Inc. ............................... 91,313
1,974 DQE, Inc. ............................... 73,161
3,801 DTE Energy Co. .......................... 119,256
9,705 Duke Energy Corp. ....................... 598,677
9,100 Edison International .................... 179,156
1,077 El Paso Electric Co.* ................... 13,866
367 Empire District Electric Co. (The) ...... 8,808
3,186 Energy East Corp. ....................... 60,136
6,469 Entergy Corp. ........................... 175,472
6,107 FirstEnergy Corp. ....................... 155,728
2,574 Florida Progress Corp. .................. 126,126
4,698 FPL Group, Inc. ......................... 226,678
3,235 GPU, Inc. ............................... 85,727
844 Hawaiian Electric Industries, Inc. ...... 26,797
949 IDACORP, Inc. ........................... 35,113
2,163 IPALCO Enterprises, Inc. ................ 48,938
1,562 Kansas City Power & Light Co. ........... 37,293
3,399 LG&E Energy Corp. ....................... 82,426
1,283 Madison Gas & Electric Co. .............. 26,301
1,853 Minnesota Power, Inc. ................... 39,492
2,888 Montana Power Co. ....................... 83,571
809 National Data Corp. ..................... 22,247
3,028 New Century Energies, Inc. .............. 103,520
4,725 Niagara Mohawk Holdings Inc.* ........... 62,902
3,277 NiSource Inc. ........................... 63,697

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
3,661 Northeast Utilities .................... $ 81,000
4,057 Northern States Power Co. .............. 89,508
412 Northwestern Corp. ..................... 9,476
1,517 NSTAR .................................. 61,438
1,963 OGE Energy Corp. ....................... 37,297
428 Otter Tail Power Co. ................... 8,961
4,869 PECO Energy Co. ........................ 207,845
10,063 PG & E Corp. ........................... 260,380
2,221 Pinnacle West Capital Corp. ............ 87,868
3,106 Potomac Electric Power Co. ............. 76,679
3,766 PPL Corp. .............................. 101,682
973 Public Service Company of New
Mexico ............................... 17,636
5,729 Public Service Enterprise Group,
Inc. ................................. 192,638
2,216 Puget Sound Power & Light Co. .......... 50,275
7,749 Reliant Energy, Inc. ................... 259,591
865 RGS Energy Group Inc. .................. 19,841
3,036 SCANA Corp. ............................ 79,885
1,978 Sierra Pacific Resources ............... 27,939
17,641 Southern Co. ........................... 431,102
961 St. Joseph Light & Power Co. ........... 21,142
3,393 TECO Energy, Inc. ...................... 74,434
7,244 TXU Corp. .............................. 226,375
5,701 Unicom Corp. ........................... 234,097
792 UniSource Energy Corp. ................. 12,226
2,435 UtiliCorp United, Inc. ................. 51,896
1,718 Western Resources, Inc. ................ 27,166
3,089 Wisconsin Energy Corp. ................. 61,394
640 WPS Resources Corp. .................... 19,320
------------
7,894,220
------------
Electrical Products (0.4%)
346 Alpine Group, Inc. (The)* .............. 2,292
5,048 American Power Conversion Corp.*........ 128,408
696 American Superconductor Corp.* ......... 25,752
742 AstroPower, Inc.* ...................... 15,721
857 Baldor Electric Co.* ................... 15,747
448 Belden Inc. ............................ 11,256
680 C&D Technologies, Inc.* ................ 27,540
740 Cable Design Technologies Corp.* ....... 26,085
2,468 Cooper Industries, Inc. ................ 79,130
11,298 Emerson Electric Co. ................... 689,884
2,663 Energizer Holdings, Inc.* .............. 64,245
585 Energy Conversion Devices, Inc.* ....... 14,662
134 Franklin Electric Co., Inc. ............ 8,836
1,174 Genlyte Group Inc. (The)* .............. 26,121
1,634 Hubbell, Inc. (Class B) ................ 39,420

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
513 Littelfuse, Inc.* ...................... $ 18,083
1,044 MagneTek, Inc.* ........................ 8,287
5,140 Molex Inc. ............................. 241,821
1,067 National Service Industries, Inc. ...... 21,807
965 Power-One, Inc.* ....................... 113,930
593 Rayovac Corp.* ......................... 14,788
637 SLI, Inc. .............................. 6,888
664 Superior TeleCom Inc. .................. 5,768
1,459 Thomas & Betts Corp. ................... 28,450
492 Thomas Industries, Inc. ................ 10,270
869 Valence Technology, Inc.* .............. 12,981
------------
1,658,172
------------
Electronic Components (0.6%)
1,106 3DFX Interactive* ...................... 8,364
383 ACT Manufacturing, Inc.* ............... 14,219
453 American Xtal Technology, Inc.* ........ 16,138
1,090 Amphenol Corp. (Class A)* .............. 57,157
286 Anaren Microwave, Inc.* ................ 20,753
326 APA Optics, Inc.* ...................... 4,890
976 Artesyn Technologies, Inc.* ............ 33,184
4,567 AVX Corp. .............................. 109,323
121 Bel Fuse Inc. (Class A) ................ 3,660
289 Benchmark Electronics, Inc.* ........... 11,885
1,063 Blue Wave Systems Inc.* ................ 9,168
278 California Amplifier, Inc.* ............ 9,226
869 Cree Research, Inc.* ................... 97,708
691 CTS Corp. .............................. 31,700
1,494 Flextronics International, Ltd.
(Singapore)* ......................... 105,771
1,377 Hutchinson Technology Inc.* ............ 20,483
5,011 Jabil Circuit, Inc.* ................... 250,863
2,276 Kemet Corp.* ........................... 54,624
2,949 Komag Inc.* ............................ 4,884
1,646 Kopin Corp.* ........................... 41,047
1,755 MEMC Electronic Materials, Inc.* ....... 29,287
943 Methode Electronics, Inc.
(Class A) ............................ 42,848
307 NETsilicon, Inc.* ...................... 8,481
1,610 NVIDIA Corp.* .......................... 96,600
1,332 Oak Technology, Inc.* .................. 30,636
1,039 Park Electrochemical Corp. ............. 35,131
455 Plexus Corp.* .......................... 51,330
670 Power Integrations, Inc.* .............. 12,939
2,508 Rambus Inc.* ........................... 183,868
1,941 Read Rite Corp.* ....................... 6,793
220 Sage, Inc.* ............................ 2,090
1,744 SanDisk Corp.* ......................... 111,180
3,916 Sanmina Corp.* ......................... 363,698

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
1,107 Sawtek, Inc.* ............................. $ 58,948
602 SIPEX Corp.* .............................. 18,700
15,747 Solectron Corp.* .......................... 634,801
435 Spectrian Corp.* .......................... 5,900
320 Superconductor Technologies Inc.* ......... 6,760
531 Three-Five Systems, Inc.* ................. 13,906
1,081 Vicor Corp.* .............................. 45,064
3,544 Vishay Intertechnology, Inc.* ............. 109,642
------------
2,773,649
------------
Electronic Data Processing (4.2%)
8,597 Apple Computer, Inc.* ..................... 436,835
44,847 Compaq Computer Corp. ..................... 1,258,519
1,393 Concurrent Computer Corp.* ................ 17,151
1,411 Corsair Communications, Inc.* ............. 24,516
68,010 Dell Computer Corp.* ...................... 2,988,189
363 eShare Communications, Inc.* .............. 1,702
8,499 Gateway, Inc.* ............................ 469,039
26,415 Hewlett-Packard Co. ....................... 2,884,188
47,243 International Business Machines
Corp. ................................... 5,311,885
2,430 Micron Electronics, Inc.* ................. 25,667
392 MICROS Systems, Inc.* ..................... 8,918
2,531 NCR Corp.* ................................ 89,692
391 RadiSys Corp.* ............................ 24,046
4,637 Silicon Graphics, Inc.* ................... 20,866
41,900 Sun Microsystems, Inc.* ................... 4,417,831
------------
17,979,044
------------
Electronic Distributors (0.1%)
947 Anixter International, Inc.* .............. 27,522
2,516 Arrow Electronics, Inc.* .................. 83,185
1,150 Avnet, Inc. ............................... 65,478
513 Black Box Corp.* .......................... 23,213
1,331 Brightpoint, Inc.* ........................ 7,237
1,297 CellStar Corp.* ........................... 3,040
3,096 CompuCom Systems, Inc.* ................... 7,933
407 En Pointe Technologies, Inc.* ............. 3,358
1,883 Ingram Micro Inc. (Class A)* .............. 34,129
619 Intraware, Inc.* .......................... 5,029
738 Kent Electronics Corp.* ................... 22,970
271 MCSi, Inc.* ............................... 6,335
668 Pioneer-Standard Electronics, Inc. ........ 9,018
3,096 Safeguard Scientifics, Inc.* .............. 96,169
327 ScanSource, Inc.* ......................... 12,385
1,367 Tech Data Corp.* .......................... 60,831
------------
467,832
------------

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
Electronic Production Equipment (0.8%)
660 ADE Corporation* .......................... $ 14,314
711 Advanced Energy Industries, Inc.*.......... 31,995
4,005 Amkor Technology, Inc.* ................... 110,137
21,329 Applied Materials, Inc.* .................. 1,618,338
473 Applied Science & Technology,
Inc.* ................................... 7,952
1,095 Artisan Components, Inc.* ................. 9,171
811 Asyst Technologies, Inc.* ................. 19,565
735 ATMI, Inc.* ............................... 18,926
479 Brooks Automation, Inc.* .................. 23,770
1,086 Cognex Corp.* ............................. 53,282
500 Cohu, Inc. ................................ 8,844
1,300 Credence Systems Corp.* ................... 55,575
713 Cymer, Inc.* .............................. 32,352
394 DuPont Photomasks, Inc.* .................. 23,591
661 Electro Scientific Industries, Inc.* ...... 30,034
503 Electroglas, Inc.* ........................ 10,060
654 EMCORE Corp.* ............................. 44,962
2,123 Esterline Corp.* .......................... 31,314
692 FEI Co.* .................................. 18,381
541 FSI International, Inc.* .................. 8,893
609 GaSonics International Corp.* ............. 14,616
564 Helix Technology Corp. .................... 18,330
283 Ibis Technology Corp.* .................... 11,744
4,812 KLA-Tencor Corp.* ......................... 256,239
592 Kulicke & Soffa Industries, Inc.* ......... 26,714
3,261 Lam Research Corp.* ....................... 95,384
1,220 LTX Corp.* ................................ 26,840
752 Mattson Technology, Inc.* ................. 14,053
1,683 Mentor Graphics Corp.* .................... 33,555
620 MKS Instruments, Inc.* .................... 15,616
580 Nanometrics Inc.* ......................... 19,829
3,450 Novellus Systems, Inc.* ................... 186,084
778 Numerical Technologies, Inc.* ............. 36,274
180 Photon Dynamics, Inc.* .................... 9,720
601 Photronics, Inc.* ......................... 14,912
577 PRI Automation, Inc.* ..................... 26,326
312 Rudolph Technologies, Inc.* ............... 11,700
988 Semitool Inc* ............................. 13,523
834 Silicon Valley Group, Inc.* ............... 21,163
727 SpeedFam-IPEC, Inc.* ...................... 14,404
1,787 Synopsys, Inc.* ........................... 58,189
4,482 Teradyne, Inc.* ........................... 284,047
542 Therma-Wave Inc.* ......................... 12,127
727 Ultratech Stepper, Inc.* .................. 11,995

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
781 Varian Semiconductor Equipment
Associates, Inc.* ...................... $ 37,927
617 Veeco Instruments, Inc.* ................. 48,589
------------
3,491,356
------------
Engineering & Construction (0.2%)
3,084 Comfort Systems USA, Inc.* ............... 13,685
1,013 Dycom Industries, Inc.* .................. 43,306
473 EMCOR Group, Inc.* ....................... 11,086
3,559 Encompass Services Corp.* ................ 17,573
1,993 Fluor Corp. .............................. 59,416
3,063 Foster Wheeler Corp. ..................... 22,398
682 Granite Construction Inc. ................ 16,453
659 Insituform Technologies, Inc.
(Class A)* ............................. 15,898
2,910 Integrated Electrical Services, Inc.* 14,550
681 Jacobs Engineering Group, Inc.* .......... 24,303
1,221 MasTec, Inc.* ............................ 40,522
12,523 Metromedia Fiber Network, Inc.
(Class A)* ............................. 439,870
2,961 Morrison Knudsen Corp.* .................. 28,500
1,458 Quanta Services, Inc.* ................... 66,703
3,217 Spectrasite Holdings, Inc.* .............. 68,361
1,379 URS Corp.* ............................... 20,685
------------
903,309
------------
Environmental Services (0.1%)
4,765 Allied Waste Industries, Inc.* ........... 44,374
583 Casella Waste Systems Inc.,
(Class A)* ............................. 6,486
664 Catalytica, Inc.* ........................ 7,594
958 IT Group, Inc. (The)* .................... 4,191
367 Landauer, Inc. ........................... 5,964
3,766 Newpark Resources, Inc.* ................. 31,305
4,600 Republic Services, Inc.* ................. 77,050
962 Tetra Tech, Inc.* ........................ 24,110
1,184 Thermo Ecotek Corp.* ..................... 10,212
2,623 U.S. Plastic Lumber Corp. ................ 10,164
1,845 Waste Connections, Inc.* ................. 37,361
322 Waste Industries Inc.* ................... 3,663
16,239 Waste Management, Inc. ................... 303,466
------------
565,940
------------
Farming/Seeds/Milling (0.1%)
197 Agribrands International, Inc.* .......... 7,387
15,913 Archer-Daniels-Midland Co. ............... 149,184
1,009 Cadiz, Inc.* ............................. 9,712
940 Corn Products International, Inc. ........ 23,500
971 Delta & Pine Land Co. .................... 24,275

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
512 Hines Horticulture, Inc.* ................ $ 3,744
1,012 Tejon Ranch Co.* ......................... 24,478
------------
242,280
------------
Finance Companies (1.2%)
553 Advanta Corp. (Class A) .................. 6,325
1,816 Allied Capital Corp. ..................... 34,390
508 American Capital Strategies, Ltd. ........ 13,017
1,961 AmeriCredit Corp.* ....................... 40,691
3,389 Associates First Capital Corp.* .......... 112
19,086 Associates First Capital Corp.
(Class A) .............................. 499,815
5,168 Capital One Financial Corp. .............. 302,974
989 Cash American International, Inc. ........ 7,170
737 Charter Municipal Mortgage
Acceptance Co. ......................... 9,811
6,893 CIT Group, Inc. (The) (Series A) ......... 127,520
1,127 CompuCredit Corp.* ....................... 33,246
2,970 Countrywide Credit Industries, Inc. ...... 104,507
1,617 Credit Acceptance Corp.* ................. 9,803
388 Creditrust Corp.* ........................ 509
721 Doral Financial Corp. .................... 9,373
26,863 Fannie Mae ............................... 1,339,792
2,949 FiNet.com, Inc.* ......................... 2,120
1,545 FINOVA Group, Inc. ....................... 16,126
18,219 Freddie Mac .............................. 718,512
1,098 Heller Financial, Inc. ................... 26,352
12,497 Household International, Inc. ............ 556,898
3,588 Imperial Credit Industries, Inc.* ........ 15,697
21,013 MBNA Corp. ............................... 701,309
432 Medallion Financial Corp. ................ 6,912
1,524 Metris Companies, Inc. ................... 44,672
850 Mortgage.Com, Inc.* ...................... 1,062
541 New Century Financial Corp.* ............. 6,467
1,210 NextCard, Inc.* .......................... 10,701
3,721 Providian Financial Corp. ................ 379,309
4,169 SLM Holding Corp. ........................ 179,528
477 Student Loan Corp. (The) ................. 21,465
481 WFS Financial Inc.* ...................... 7,455
217 White Mountains Insurance Group,
Inc. ................................... 34,069
------------
5,267,709
------------
Financial Publishing/Services (0.2%)
776 Advent Software, Inc.* ................... 43,844
993 Aether Systems, Inc* ..................... 165,272
2,112 Ashton Technology Group, Inc.
(The)* ................................. 8,052
440 BARRA, Inc.* ............................. 25,547
1,253 Data Broadcasting Corp.* ................. 5,208

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
4,216 Dun & Bradstreet Corp. ................... $ 124,635
3,707 Equifax, Inc. ............................ 87,578
829 FactSet Research Systems Inc. ............ 27,046
297 MarketWatch.com, Inc.* ................... 5,160
5,139 McGraw-Hill Companies, Inc. .............. 305,449
684 Multex.com, Inc.* ........................ 16,501
402 NewsEdge Corp.* .......................... 804
522 Omega Research, Inc.* .................... 1,525
364 Primark Corp.* ........................... 13,627
1,395 SEI Investments Co. ...................... 76,376
96 SmartServ Online, Inc.* .................. 4,486
3,361 SunGard Data Systems Inc.* ............... 111,123
526 Telescan, Inc.* .......................... 3,386
1,413 Thestreet.com, Inc.* ..................... 7,771
1,456 Track Data Corp.* ........................ 1,547
269 Value Line, Inc. ......................... 10,491
------------
1,045,428
------------
Fluid Controls (0.1%)
235 CIRCOR International, Inc. ............... 1,645
808 Flowserve Corp. .......................... 12,524
463 Graco Inc. ............................... 15,742
777 IDEX Corp.* .............................. 25,641
3,379 Parker-Hannifin Corp. .................... 120,166
1,012 Robbins & Myers, Inc. .................... 21,758
794 Roper Industries, Inc. ................... 21,934
1,571 Watts Industries, Inc. ................... 18,656
------------
238,066
------------
Food Chains (0.4%)
2,068 7-Eleven, Inc.* .......................... 25,979
11,103 Albertson's, Inc. ........................ 335,172
940 Casey's General Stores, Inc. ............. 11,104
4,106 Delhaize America, Inc. ................... 68,262
696 Grand Union Co. (The)* ................... 164
968 Great Atlantic & Pacific Tea Co.,
Inc. ................................... 13,915
1,107 Hannaford Brothers Company ............... 83,094
737 Ingles Markets, Inc. (Class A) ........... 7,738
21,866 Kroger Co.* .............................. 452,353
826 Pantry, Inc. (The)* ...................... 9,189
1,108 Ruddick Corp. ............................ 11,772
13,335 Safeway Inc.* ............................ 600,908
334 Seaway Food Town, Inc. ................... 5,177
3,083 Smart & Final, Inc.* ..................... 23,122
1,052 Weis Markets, Inc. ....................... 36,820
681 Whole Foods Market, Inc.* ................ 30,432

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
1,205 Wild Oats Markets, Inc.* ................. $ 12,201
3,750 Winn-Dixie Stores, Inc. .................. 53,672
------------
1,781,074
------------
Food Distributors (0.1%)
885 Fleming Companies, Inc. .................. 13,883
362 Performance Food Group Co.* .............. 11,923
3,659 Supervalu, Inc. .......................... 64,719
8,649 SYSCO Corp. .............................. 340,554
874 United Natural Foods, Inc.* .............. 12,454
------------
443,533
------------
Forest Products (0.1%)
4,481 Georgia-Pacific Corp. .................... 111,185
2,172 Georgia-Pacific Corp. (Timber
Group) ................................... 65,839
2,686 Louisiana-Pacific Corp. .................. 26,021
1,343 Pope & Talbot, Inc. ...................... 25,853
693 Rayonier Inc. ............................ 28,196
273 Republic Group Inc. ...................... 3,532
629 Universal Forest Products, Inc. .......... 7,902
6,155 Weyerhaeuser Co. ......................... 281,207
------------
549,735
------------
Generic Drugs (0.1%)
907 Alpharma Inc. (Class A) .................. 59,408
903 Barr Laboratories, Inc.* ................. 48,762
1,867 Duramed Pharmaceuticals, Inc.* ........... 10,619
2,054 ICN Pharmaceuticals, Inc. ................ 48,911
4,148 IVAX Corp.* .............................. 204,289
3,390 Mylan Laboratories, Inc. ................. 72,037
686 Pharmaceutical Resources, Inc.* .......... 3,559
2,515 Watson Pharmaceuticals, Inc.* ............ 138,954
------------
586,539
------------
Home Building (0.1%)
207 Beazer Homes USA Inc.* ................... 4,360
1,495 Centex Corp. ............................. 35,787
1,037 Champion Enterprises, Inc. ............... 5,639
3,531 Clayton Homes, Inc. ...................... 28,689
485 Crossmann Communities, Inc.* ............. 7,275
1,532 D.R. Horton, Inc. ........................ 23,746
791 Fairfield Communities, Inc.* ............. 5,883
779 Fleetwood Enterprises, Inc. .............. 10,078
1,250 Kaufman & Broad Home Corp. ............... 24,453
1,917 Lennar Corp. ............................. 46,008
599 M.D.C. Holdings, Inc. .................... 11,980
181 NVR, Inc.* ............................... 11,154
1,880 Oakwood Homes Corp. ...................... 3,760
637 Palm Harbor Homes, Inc.* ................. 9,396

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
1,134 Pulte Corp. ................................. $ 26,011
412 Ryland Group, Inc. (The) .................... 8,240
347 Skyline Corp. ............................... 7,005
874 Standard Pacific Corp. ...................... 11,089
870 Toll Brothers, Inc.* ........................ 21,043
438 Webb (Del) Corp.* ........................... 6,679
------------
308,275
------------
Home Furnishings (0.1%)
592 Bassett Furniture Industries, Inc. .......... 7,992
1,168 Department 56, Inc.* ........................ 11,534
597 Enesco Group ................................ 3,806
1,071 Ethan Allen Interiors, Inc. ................. 27,310
1,178 Furniture Brands International,
Inc.* ..................................... 17,449
1,551 La-Z-Boy, Inc. .............................. 24,040
5,144 Leggett & Platt, Inc. ....................... 90,020
318 Libbey, Inc. ................................ 9,918
809 Mikasa, Inc. ................................ 7,837
1,530 Mohawk Industries, Inc.* .................... 40,832
7,392 Newell Rubbermaid, Inc. ..................... 199,122
627 O'Sullivan Industries Holdings, Inc.
(Pref.)* .................................. 313
394 Oneida Ltd. ................................. 7,141
3,506 Shaw Industries, Inc. ....................... 44,921
1,511 Tupperware Corp. ............................ 29,370
1,274 Westpoint Stevens, Inc. ..................... 15,288
------------
536,893
------------
Hospital/Nursing Management (0.3%)
2,212 Beverly Enterprises, Inc.* .................. 7,604
14,762 HCA-The Healthcare Corp. .................... 501,908
6,392 Health Management Associates, Inc.
(Class A)* ................................ 100,274
1,233 LifePoint Hospitals, Inc.* .................. 32,983
2,600 Manor Care, Inc.* ........................... 25,675
964 NovaMed Eyecare, Inc.* ...................... 5,422
1,261 Orthodontic Centers of America,
Inc.* ..................................... 32,628
809 Province Healthcare Co.* .................... 34,686
1,686 Quorum Health Group, Inc.* .................. 18,230
1,603 Res-Care, Inc.* ............................. 11,221
8,175 Tenet Healthcare Corp.* ..................... 248,827
874 Triad Hospitals, Inc.* ...................... 21,959
774 Universal Health Services, Inc.
(Class B)* ................................ 52,148
------------
1,093,565
------------

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
Hotels/Resorts (0.2%)
422 American Classic Voyager Co.* ............... $ 7,807
1,037 Boca Resorts, Inc.* ......................... 9,981
16,170 Carnival Corp. .............................. 302,177
1,289 Choice Hotels International, Inc.* .......... 12,084
446 Crestline Capital Corp.* .................... 8,669
2,295 Extended Stay America, Inc.* ................ 31,556
9,800 Hilton Hotels Corp. ......................... 100,450
779 Marcus Corp. (The) .......................... 9,153
6,520 Marriott International, Inc.
(Class A) ................................. 260,800
1,157 Prime Hospitality Corp.* .................... 10,991
1,090 ResortQuest International, Inc.* ............ 6,540
4,706 Royal Caribbean Cruises Ltd. ................ 93,532
5,097 Starwood Hotels & Resorts
Worldwide, Inc. ........................... 173,935
363 Trendwest Resorts, Inc.* .................... 6,545
557 U.S. Franchise Systems, Inc.* ............... 2,506
1,463 Vail Resorts, Inc.* ......................... 25,968
------------
1,062,694
------------
Industrial Machinery/Components (0.2%)
1,024 Applied Power, Inc. (Class A) ............... 40,512
7,875 Illinois Tool Works Inc. .................... 450,844
4,287 Ingersoll-Rand Co. .......................... 168,265
794 Kennametal, Inc. ............................ 19,800
1,077 Lincoln Electric Holdings, Inc. ............. 16,290
660 Milacron Inc. ............................... 9,487
431 Nordson Corp. ............................... 24,351
1,264 Presstek, Inc.* ............................. 18,407
456 Regal-Beloit Corp. .......................... 7,353
1,274 Specialty Equipment Co., Inc.* .............. 34,716
503 Tecumseh Products Co. ....................... 17,856
261 Tennant Co .................................. 10,652
1,367 Thermo Fibertek, Inc.* ...................... 6,493
1,234 Wabtec Corp. ................................ 12,417
384 Woodward Governor Co. ....................... 12,672
------------
850,115
------------
Industrial Specialties (0.1%)
631 Albany International Corp.
(Class A)* ................................ 8,834
537 Bacou USA, Inc.* ............................ 12,888
792 BMC Industries, Inc.* ....................... 3,960
895 BP Prudhoe Bay Royalty Trust ................ 9,565
540 Brady (W.H.) Co. ............................ 16,436
631 Buckeye Technologies Inc.* .................. 15,381
469 CUNO, Inc.* ................................. 14,187
1,161 Donaldson Co., Inc. ......................... 22,277

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
3,396 Ecolab, Inc. ................................ $ 121,619
2,371 Foamex International Inc.* .................. 16,004
295 Ionics, Inc.* ............................... 9,034
2,006 Lydall, Inc.* ............................... 22,317
811 MacDermid, Inc. ............................. 20,782
700 Material Sciences Corp.* .................... 7,262
1,186 Millipore Corp. ............................. 74,570
450 Mine Safety Appliances Co. .................. 9,984
3,133 Omnova Solutions, Inc. ...................... 19,973
556 Research Frontiers Inc.* .................... 14,699
516 Rogers Corp.* ............................... 18,447
651 Spartech Corp. .............................. 17,455
724 Symyx Technologies, Inc.* ................... 30,634
1,076 UCAR International, Inc.* ................... 15,131
1,246 WD-40 Co. ................................... 23,596
1,363 Zoltek Companies, Inc.* ..................... 11,330
------------
536,365
------------
Insurance Brokers/Services (0.3%)
6,726 AON Corp. ................................... 242,136
280 Brown & Brown, Inc. ......................... 13,440
796 CCC Information Services Group,
Inc.* ..................................... 8,656
1,376 ChoicePoint Inc.* ........................... 59,856
1,407 Copart, Inc.* ............................... 18,643
189 CorVel Corp.* ............................... 5,197
1,189 Crawford & Co. .............................. 14,788
333 E. W. Blanch Holdings, Inc. ................. 9,428
928 Gallagher (Arthur J.) & Co. ................. 45,530
382 Hilb, Rogal & Hamilton Co. .................. 14,946
7,120 Marsh & McLennan Companies,
Inc. ...................................... 868,640
------------
1,301,260
------------
Integrated Oil Companies (2.5%)
2,377 Amerada Hess Corp. .......................... 143,808
17,200 Chevron Corp. ............................... 1,358,800
16,413 Conoco, Inc. (Class B) ...................... 378,525
91,942 Exxon Mobil Corp.* .......................... 7,355,360
1,179 Murphy Oil Corp. ............................ 71,035
6,638 Phillips Petroleum Co. ...................... 337,293
14,495 Texaco, Inc. ................................ 716,597
6,353 Unocal Corp. ................................ 192,178
------------
10,553,596
------------
Internet Services (3.1%)
449 About.com, Inc.* ............................ 13,863
677 Accrue Software, Inc.* ...................... 15,656
676 Active Software, Inc.* ...................... 38,532
848 Agency.com, Inc.* ........................... 18,285

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
1,210 Agile Software Co.* ......................... $ 66,928
453 Akamai Technologies, Inc.* .................. 35,723
676 Allaire Corp.* .............................. 20,861
1,334 Alloy Online, Inc.* ......................... 14,674
60,677 America Online, Inc.* ....................... 3,234,843
771 AppliedTheory Corp.* ........................ 7,035
820 AppNet, Inc.* ............................... 27,162
347 Apropos Technology, Inc.* ................... 5,378
6,228 Ariba, Inc.* ................................ 722,059
1,739 Art Technology Group, Inc.* ................. 151,293
1,838 ASD Systems, Inc.* .......................... 3,619
982 AsiaInfo Holdings, Inc.* .................... 35,106
930 Ask Jeeves, Inc.* ........................... 16,856
9,529 At Home Corp. (Series A)* ................... 133,406
6,433 BEA Systems, Inc.* .......................... 277,021
511 Bluestone Software, Inc.* ................... 11,306
553 Braun Consulting, Inc.* ..................... 11,959
878 Breakaway Solutions, Inc.* .................. 24,474
1,219 Broadbase Software, Inc.* ................... 28,723
6,509 BroadVision, Inc.* .......................... 235,544
437 C-Bridge Internet Solutions, Inc.* .......... 8,385
800 CAIS Internet, Inc.* ........................ 7,637
847 Calico Commerce, Inc.* ...................... 8,311
603 Centra Software, Inc. ....................... 4,598
878 Chordiant Software, Inc.* ................... 11,633
1,696 Circle.com* ................................. 5,300
7,430 CMGI Inc.* .................................. 281,411
2,219 CNET Networks, Inc.* ........................ 66,431
919 Cobalt Group, Inc. (The)* ................... 5,686
4,056 Commerce One, Inc.* ......................... 170,605
1,648 Critical Path, Inc.* ........................ 91,773
951 CUseeMe Networks, Inc.* ..................... 7,341
605 CyberSource Corp.* .......................... 5,218
726 Cysive, Inc.* ............................... 17,424
893 Data Return Corp.* .......................... 22,883
633 Digex, Inc.* ................................ 39,919
578 Digital Insight Corp.* ...................... 18,099
1,691 Digital Island, Inc.* ....................... 48,511
1,491 Digitas Inc.* ............................... 33,734
3,098 Earthlink, Inc.* ............................ 38,725
256 EarthWeb, Inc.* ............................. 2,944
724 eGain Communications Corp.* ................. 5,928
669 Elcom International, Inc.* .................. 3,721
1,082 eLoyalty Corp.* ............................. 16,061
4,576 Engage Technologies, Inc.* .................. 41,756
726 eXcelon Corp.* .............................. 4,311
10,808 Exodus Communications, Inc.* ................ 480,281
474 Extensity, Inc.* ............................ 7,673

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
533 F5 Networks, Inc.* .................... $ 24,085
819 FirePond, Inc.* ....................... 17,199
1,484 Go.com, Inc.* ......................... 15,860
997 Go2Net, Inc.* ......................... 58,885
1,286 GoTo.com, Inc.* ....................... 20,737
836 GraphOn Corp.* ........................ 4,180
752 HearMe Inc.* .......................... 2,914
1,293 High Speed Access Corp.* .............. 6,627
2,784 iBEAM Broadcacting Corp.* ............. 34,278
512 iManage, Inc.* ........................ 4,928
296 Inforte Corp.* ........................ 14,356
6,015 InfoSpace.com, Inc.* .................. 203,006
2,917 Inktomi Corp.* ........................ 312,119
1,243 Interliant, Inc.* ..................... 21,131
2,978 Internap Network Services Corp.* ...... 101,578
736 Internet Capital Group, Inc.* ......... 24,886
1,095 Internet Security Systems, Inc.* ...... 80,893
633 Internet.com Corp.* ................... 12,027
2,145 Intertrust Technologies Corp.* ........ 31,237
687 InterWorld Corp.* ..................... 15,028
1,264 Interwoven, Inc.* ..................... 81,607
1,007 ITXC Corp.* ........................... 18,252
745 iVillage Inc.* ........................ 4,819
762 JFAX.COM, Inc.* ....................... 1,953
975 Juno Online Services, Inc.* ........... 8,836
2,362 Kana Communications, Inc.* ............ 86,804
652 Keynote Systems, Inc.* ................ 24,735
949 Lante Corp.* .......................... 17,972
2,362 Liberate Technologies, Inc.* .......... 54,178
342 Lionbridge Technologies, Inc.* ........ 2,651
407 Liquid Audio, Inc.* ................... 3,765
2,304 LookSmart, Ltd.* ...................... 42,048
570 Luminant Worldwide Corp.* ............. 4,631
2,881 Lycos, Inc.* .......................... 174,661
1,040 Mail.com, Inc.* ....................... 8,288
1,097 MatrixOne, Inc.* ...................... 50,188
469 Media Metrix, Inc.* ................... 12,194
1,192 MessageMedia, Inc.* ................... 4,172
796 N2H2, Inc.* ........................... 2,438
1,340 National Information Consortium,
Inc.* ............................... 10,385
1,473 NaviSite, Inc.* ....................... 59,749
423 NBC Internet, Inc. (Class A)* ......... 4,362
588 Net Perceptions, Inc.* ................ 7,056
505 Netegrity, Inc.* ...................... 39,895
1,435 NetManage, Inc.* ...................... 3,722
687 NetObjects, Inc.* ..................... 2,898
1,340 Network Commerce Inc.* ................ 8,961

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
434 Netzee, Inc.* ......................... $ 2,685
2,644 Netzero, Inc.* ........................ 13,964
1,699 OneMain.com, Inc.* .................... 16,990
1,107 Open Market, Inc.* .................... 7,265
312 OpenTV Corp.* ......................... 15,360
1,257 Optio Software, Inc.* ................. 5,657
2,295 Organic, Inc.* ........................ 22,807
1,079 Pfsweb Inc.* .......................... 4,653
374 Pilot Network Services, Inc.* ......... 4,628
4,214 Portal Software, Inc.* ................ 212,214
398 Preview Systems, Inc.* ................ 4,129
1,617 Prodigy Communications Corp.
(Class A)* .......................... 12,936
1,408 Proxicom, Inc.* ....................... 58,168
4,929 PSINet, Inc.* ......................... 85,949
2,235 Quest Software, Inc.* ................. 105,604
842 Quintus Corp.* ........................ 9,999
1,523 Ramp Networks, Inc.* .................. 8,472
1,302 Rare Medium Group, Inc.* .............. 16,356
4,045 RealNetworks, Inc.* ................... 171,660
1,148 Retek, Inc.* .......................... 35,301
377 RoweCom, Inc.* ........................ 1,673
1,337 S1 Corp.* ............................. 34,010
2,435 SAVVIS Communications Corp.* .......... 29,829
1,851 Scient Corp.* ......................... 86,303
479 SilverStream Software, Inc.* .......... 18,262
413 Softnet Systems, Inc.* ................ 3,407
1,784 Software Technologies Corp.* .......... 47,499
1,247 Software.com, Inc.* ................... 125,791
666 SonicWall, Inc.* ...................... 57,776
1,704 StarMedia Network, Inc.* .............. 25,773
1,067 Talk City, Inc.* ...................... 1,667
706 theglobe.com, Inc.* ................... 1,169
640 Tumbleweed Communications
Corp.* .............................. 28,800
2,088 Verio Inc.* ........................... 113,666
5,064 VeriSign, Inc.* ....................... 803,594
2,143 VerticalNet, Inc.* .................... 102,328
1,277 VIA NET.WORKS, Inc.* .................. 21,390
341 Viador Inc.* .......................... 3,623
1,237 Viant Corp.* .......................... 40,821
662 Vicinity Corp.* ....................... 13,157
5,903 Vignette Corp.* ....................... 199,964
3,328 Vitria Technology, Inc.* .............. 157,248
1,003 Voyager.net, Inc.* .................... 7,773
660 WatchGuard Technologies, Inc.* ........ 32,381
311 Webb Interactive Services, Inc.* ...... 3,100
789 webMethods, Inc.* ..................... 91,130

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
643 WebTrends Corp.* ......................... $ 19,330
985 Women.com Networks, Inc.* ................ 4,063
512 WorldGate Communications, Inc.* .......... 12,288
1,193 Xpedior Inc.* ............................ 15,584
14,348 Yahoo! Inc.* ............................. 1,846,408
386 ZixIt Corp. .............................. 16,309
------------
13,134,692
------------
Investment Bankers/Brokers/
Services (1.7%)
207 Advest Group, Inc.* ...................... 5,421
4,576 AmeriTrade Holding Corp.
(Class A)* ............................. 58,630
3,007 Bear Stearns Companies, Inc. ............. 162,002
315 Dain Rauscher Corp. ...................... 21,361
3,338 Donaldson, Lufkin & Jenrette, Inc. ....... 172,116
7,577 E*TRADE Group, Inc.* ..................... 113,655
2,324 Edwards (A.G.), Inc. ..................... 122,882
208 eSPEED, Inc (Class A)* ................... 6,370
577 First Albany Companies Inc.* ............. 11,504
253 GlobalNet Financial.com, Inc.* ........... 3,953
1,929 Goldman Sachs Group, Inc. (The) .......... 190,850
783 Investment Technology Group, Inc.......... 38,073
764 Investors Financial Services Corp. ....... 29,319
450 Jefferies Group, Inc. .................... 12,038
3,204 Knight Trading Group, Inc.* .............. 85,106
1,066 LaBranche & Co., Inc.* ................... 21,720
1,646 Legg Mason, Inc. ......................... 85,592
3,145 Lehman Brothers Holdings, Inc. ........... 353,419
10,244 Merrill Lynch & Co., Inc. ................ 1,324,037
572 Morgan Keegan, Inc. ...................... 11,369
29,861 Morgan Stanley Dean Witter & Co.
(Note 4) ............................... 2,724,816
429 National Discount Brokers Group,
Inc.* .................................. 14,130
3,740 Paine Webber Group, Inc. ................. 258,995
1,129 Raymond James Financial, Inc. ............ 28,225
35,964 Schwab (Charles) Corp. ................... 1,299,200
2,159 Siebert Financial Corp. .................. 15,248
418 Southwest Securities Group, Inc. ......... 11,521
7,281 TD Waterhouse Group, Inc.* ............... 132,878
730 Tucker Anthony Sutro Corp. ............... 12,501
558 Web Street, Inc.* ........................ 1,360
459 Wit Soundview Group, Inc.* ............... 3,858
------------
7,332,149
------------
Investment Managers (0.3%)
276 Acacia Research Corp.* ................... 7,866
556 Affiliated Managers Group, Inc.* ......... 26,375

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
4,520 Alliance Capital Management
Holding L.P.* .......................... $ 215,548
905 Eaton Vance Corp. ........................ 46,890
3,133 Federated Investors, Inc. (Class B) ...... 82,045
6,517 Franklin Resources, Inc. ................. 233,797
816 John Nuveen Co. (The) (Class A) .......... 36,465
1,261 Neuberger Berman Inc. .................... 62,577
1,161 Nvest, L.P. .............................. 45,061
2,235 Phoenix Investment Partners, Ltd. ........ 32,268
695 Pioneer Group, Inc. (The)* ............... 29,711
3,136 Price (T.) Rowe Associates, Inc. ......... 128,184
5,794 Stillwell Financial, Inc.* ............... 255,298
1,399 United Asset Management Corp. ............ 33,663
2,152 Waddell & Reed Financial, Inc.
(Class A) .............................. 70,478
------------
1,306,226
------------
Life Insurance (0.3%)
6,476 American General Corp. ................... 431,868
668 American National Insurance Co. .......... 41,291
453 Amerus Life Holdings, Inc. ............... 10,362
479 Delphi Financial Group, Inc.
(Class A)* ............................. 18,442
1,673 FBL Financial Group, Inc.
(Class A) .............................. 22,586
1,011 Great American Financial
Resources, Inc. ........................ 17,693
2,745 Jefferson-Pilot Corp. .................... 167,445
249 Kansas City Life Insurance Co. ........... 7,120
490 Liberty (Corp.) (The) .................... 17,854
5,123 Lincoln National Corp. ................... 223,491
5,294 MetLife, Inc.* ........................... 111,174
327 National Western Life Insurance Co.
(Class A)* ............................. 24,035
555 Presidential Life Corp. .................. 8,013
1,627 Protective Life Corp. .................... 44,132
1,306 Reinsurance Group of America, Inc. 41,547
2,326 ReliaStar Financial Corp. ................ 123,714
1,192 The MONY Group Inc. ...................... 42,614
3,447 Torchmark Corp. .......................... 85,744
------------
1,439,125
------------
Major Banks (3.1%)
44,742 Bank of America Corp. .................... 2,119,652
19,479 Bank of New York Co., Inc. ............... 911,861
30,058 Bank One Corp. ........................... 956,220
10,235 BB&T Corp. ............................... 255,235
32,665 Chase Manhattan Corp. (The) .............. 1,623,042
4,099 Comerica, Inc. ........................... 209,049

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
25,887 First Union Corp. ......................... $ 668,208
23,995 FleetBoston Financial Corp. ............... 859,321
6,599 Huntington Bancshares, Inc. ............... 103,520
11,723 KeyCorp ................................... 205,885
13,331 Mellon Financial Corp. .................... 502,412
4,538 Morgan (J.P.) & Co., Inc.* ................ 605,823
16,159 National City Corp. ....................... 286,822
7,705 PNC Bank Corp. ............................ 391,992
3,558 Popular, Inc. ............................. 77,387
4,398 SouthTrust Corp. .......................... 108,301
4,193 State Street Corp. ........................ 420,872
4,580 Summit Bancorp. ........................... 112,496
8,386 SunTrust Banks, Inc. ...................... 401,480
19,745 U.S. Bancorp .............................. 378,857
4,257 UnionBanCal Corp. ......................... 80,883
5,314 Wachovia Corp. ............................ 292,270
44,213 Wells Fargo & Co. ......................... 1,826,508
------------
13,398,096
------------
Major Chemicals (0.5%)
17,855 Dow Chemical Co. (The) .................... 513,331
27,661 Du Pont (E.I.) de Nemours & Co.,
Inc. .................................... 1,253,389
2,050 Eastman Chemical Co. ...................... 96,094
2,683 Hercules Inc. ............................. 40,077
5,737 Rohm & Haas Co. ........................... 149,162
2,779 Solutia, Inc. ............................. 39,774
3,508 Union Carbide Corp. ....................... 157,202
------------
2,249,029
------------
Major Pharmaceuticals (6.5%)
40,923 Abbott Laboratories ....................... 1,703,420
34,446 American Home Products Corp. .............. 1,827,791
51,989 Bristol-Myers Squibb Co. .................. 2,579,954
36,736 Johnson & Johnson ......................... 3,418,744
29,828 Lilly (Eli) & Co. ......................... 3,098,384
61,260 Merck & Co., Inc. ......................... 4,391,576
166,249 Pfizer Inc. ............................... 7,169,488
33,525 Pharmacia Corp. ........................... 1,835,494
38,669 Schering-Plough Corp. ..................... 1,670,017
------------
27,694,868
------------
Major U.S. Telecommunications (3.9%)
8,228 ALLTEL Corp. .............................. 507,051
98,981 AT&T Corp. ................................ 3,062,225
49,694 BellSouth Corp. ........................... 1,978,442
89,845 SBC Communications, Inc. .................. 3,824,028
23,153 Sprint Corp. (FON Group) .................. 824,826

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
71,768 Verizon Communications .................... $ 3,373,096
75,618 WorldCom, Inc.* ........................... 2,953,828
------------
16,523,496
------------
Managed Health Care (0.4%)
3,776 Aetna Inc. ................................ 209,568
1,074 AmeriPath, Inc.* .......................... 13,626
5,233 Caremark Rx, Inc.* ........................ 44,153
4,692 CIGNA Corp. ............................... 468,614
1,053 Coventry Health Care, Inc.* ............... 17,638
1,238 First Health Group Corp.* ................. 37,914
3,085 Foundation Health Systems Inc.
(Class A)* .............................. 44,925
4,227 Humana, Inc.* ............................. 30,910
1,285 Magellan Health Services, Inc.* ........... 2,088
1,044 Mid Atlantic Medical Services,
Inc.* ................................... 14,355
2,057 Oxford Health Plans, Inc.* ................ 49,239
1,142 PacifiCare Health Systems, Inc.* .......... 74,230
831 Sierra Health Services, Inc.* ............. 2,649
991 Trigon Healthcare, Inc.* .................. 52,523
4,449 UnitedHealth Group Inc. ................... 363,984
1,668 Wellpoint Health Networks, Inc.* .......... 145,429
------------
1,571,845
------------
Marine Transportation (0.0%)
1,130 Alexander & Baldwin, Inc. ................. 28,462
476 Kirby Corp.* .............................. 10,621
850 Overseas Shipholding Group, Inc. .......... 19,338
472 SEACOR Holdings, Inc.* .................... 18,821
1,458 Tidewater, Inc. ........................... 46,838
------------
124,080
------------
Meat/Poultry/Fish (0.1%)
12,906 ConAgra, Inc. ............................. 263,766
934 Dean Foods Co. ............................ 32,515
3,656 Hormel Foods Corp. ........................ 59,182
2,689 IBP, Inc. ................................. 38,822
387 Michael Foods, Inc. ....................... 9,288
1,090 Pilgrim's Pride Corp. (Class B) ........... 7,903
40 Seaboard Corp. ............................ 8,160
1,424 Smithfield Foods, Inc.* ................... 40,495
5,792 Tyson Foods, Inc. (Class A) ............... 54,300
------------
514,431
------------
Media Conglomerates (1.8%)
54,878 Disney (Walt) Co. (The) ................... 2,123,093
4,627 Fox Entertainment Group, Inc.
(Series A)* ............................. 141,702

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
34,751 Time Warner Inc. ......................... $ 2,664,967
40,278 Viacom, Inc. (Class B)
(Non-Voting)* .......................... 2,670,935
------------
7,600,697
------------
Medical Equipment & Supplies (0.4%)
760 Acuson Corp.* ............................ 9,358
1,688 ADAC Laboratories* ....................... 33,444
557 Cyberonics Inc.* ......................... 7,520
271 Datascope Corp. .......................... 10,230
1,332 DENTSPLY International, Inc. ............. 45,038
2,248 Eclipse Surgical Technologies, Inc.*...... 8,852
3,799 Imatron Inc.* ............................ 9,498
2,164 LaserSight, Inc.* ........................ 7,845
31,612 Medtronic, Inc. .......................... 1,614,188
2,032 Sunrise Technology International,
Inc.* .................................. 14,097
1,406 Thermo Cardiosystems, Inc.* .............. 13,357
1,623 VISX, Inc.* .............................. 40,879
591 Zoll Medical Corp.* ...................... 24,009
------------
1,838,315
------------
Medical Specialties (0.9%)
201 ABIOMED, Inc.* ........................... 7,990
2,677 ALZA Corp.* .............................. 173,336
646 Aradigm Corp.* ........................... 9,771
871 ArQule, Inc.* ............................ 15,896
545 Arrow International, Inc. ................ 18,598
572 ArthroCare Corp.* ........................ 20,771
413 Aspect Medical Systems, Inc.* ............ 8,931
414 ATS Medical, Inc.* ....................... 5,511
1,342 Bard (C.R.), Inc. ........................ 67,184
1,456 Bausch & Lomb, Inc. ...................... 90,545
7,739 Baxter International, Inc. ............... 601,707
733 Beckman Coulter, Inc. .................... 48,836
6,593 Becton, Dickinson & Co. .................. 166,473
351 Bio-Rad Laboratories, Inc.
(Class A)* ............................. 8,292
580 Biomatrix, Inc.* ......................... 12,071
3,125 Biomet, Inc. ............................. 139,844
940 Biopure Corp.* ........................... 16,450
687 Biosite Diagnostics Inc.* ................ 32,718
10,869 Boston Scientific Corp.* ................. 180,018
425 Cerus Corp.* ............................. 23,800
737 ChromaVision Medical Systems,
Inc.* .................................. 10,226
310 Closure Medical Corp.* ................... 6,316
362 CONMED Corp.* ............................ 4,842
318 Cooper Companies, Inc. ................... 11,170

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
831 Cygnus, Inc.* ............................ $ 7,557
961 Cytyc Corp.* ............................. 46,128
364 Diagnostic Products Corp. ................ 14,560
1,672 Diametrics Medical, Inc.* ................ 11,495
400 Digene Corp.* ............................ 14,000
1,468 Edwards Lifesciences Corp.* .............. 32,021
8,055 Guidant Corp.* ........................... 454,101
618 Haemonetics Corp.* ....................... 14,137
1,652 Hillenbrand Industries, Inc. ............. 52,864
364 I-STAT Corp.* ............................ 6,825
396 IGEN International, Inc.* ................ 7,475
471 INAMED Corp.* ............................ 15,484
548 Inhale Therapeutic Systems, Inc.* ........ 44,491
756 Invacare Corp. ........................... 17,483
864 KeraVision, Inc.* ........................ 2,457
512 KV Pharmaceutical Co. (Class A)* ......... 15,264
278 Lifecore Biomedical, Inc.* ............... 2,068
936 LJL Biosystems, Inc.* .................... 21,645
283 Lynx Therapeutics, Inc.* ................. 9,693
1,755 Mallinckrodt, Inc. ....................... 80,291
615 Mentor Corp. ............................. 11,070
815 MiniMed, Inc.* ........................... 102,741
323 Molecular Devices Corp.* ................. 25,356
537 Novoste Corp.* ........................... 31,280
526 Ocular Sciences, Inc.* ................... 6,345
645 Osteotech, Inc.* ......................... 6,450
3,250 Pall Corp. ............................... 67,438
5,502 PE Corporation-PE Biosystems
Group .................................. 479,706
750 ResMed, Inc.* ............................ 20,813
1,082 Respironics, Inc.* ....................... 18,462
482 Scott Technologies, Inc.* ................ 9,279
349 SonoSite, Inc.* .......................... 10,470
2,205 St. Jude Medical, Inc.* .................. 90,956
703 Staar Surgical Co.* ...................... 9,886
1,610 STERIS Corp.* ............................ 14,490
5,083 Stryker Corp. ............................ 218,251
490 SurModics, Inc.* ......................... 21,805
2,728 Sybron International Corp.* .............. 56,777
531 Techne Corp.* ............................ 53,034
4,250 Techniclone Corp. ........................ 11,953
1,241 Thoratec Laboratories Corp.* ............. 19,236
770 Varian Medical Systems, Inc.* ............ 33,110
621 Ventana Medical Systems, Inc.* ........... 12,769
494 Vital Signs, Inc. ........................ 7,997
405 Wesley Jessen VisionCare, Inc.* .......... 14,985

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
268 West Pharmaceutical Services, Inc....... $ 5,528
437 Xceed, Inc.* ........................... 3,523
------------
3,915,045
------------
Medical/Dental Distributors (0.3%)
1,291 AmeriSource Health Corp.
(Class A)* ........................... 45,104
1,665 Andrx Corp.* ........................... 129,974
3,202 Bergin Brunswig Corp. (Class A) ........ 28,018
660 Bindley Western Industries, Inc. ....... 17,366
7,372 Cardinal Health, Inc. .................. 541,842
725 Henry Schein, Inc.* .................... 10,195
7,384 McKesson HBOC, Inc. .................... 179,524
1,458 Neoforma.com, Inc.* .................... 6,197
885 Owens & Minor, Inc. .................... 14,160
1,700 Patterson Dental Co.* .................. 45,050
354 PolyMedica Industries, Inc.* ........... 13,397
552 Priority Healthcare Corp.* ............. 29,601
1,692 PSS World Medical, Inc.* ............... 10,152
615 SciQuest.com, Inc.* .................... 6,015
883 Syncor International Corp.* ............ 64,018
------------
1,140,613
------------
Medical/Nursing Services (0.1%)
1,242 Apria Healthcare Group, Inc.* .......... 18,552
987 Cyber-Care, Inc.* ...................... 6,878
485 Gentiva Health Services, Inc.* ......... 3,850
684 Hanger Orthopedic Group, Inc.* ......... 2,779
10,123 Healthsouth Corp.* ..................... 60,105
1,632 Hooper Holmes, Inc. .................... 19,992
675 InfoCure Corp.* ........................ 3,354
2,051 Laser Vision Centers, Inc.* ............ 10,608
4,956 LCA-Vision, Inc.* ...................... 12,855
1,363 Lincare Holdings, Inc.* ................ 36,460
1,600 Matria Healthcare, Inc.* ............... 5,900
684 Pediatrix Medical Group, Inc.* ......... 10,517
1,941 PhyCor, Inc.* .......................... 1,092
1,170 Renal Care Group, Inc.* ................ 27,129
5,029 Total Renal Care Holdings, Inc.* ....... 38,346
------------
258,417
------------
Metals Fabrications (0.1%)
687 ABC-NACO, Inc.* ........................ 4,508
332 Commercial Metals Co. .................. 9,753
1,090 Fairchild Corp. (Class A)* ............. 6,336
2,442 General Cable Corp. .................... 21,062
463 Gibraltar Steel Corp. .................. 7,090
1,013 Harsco Corp. ........................... 29,377
4,103 Hexcel Corp.* .......................... 58,724

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
901 Intermet Corp. ......................... $ 6,532
735 Kaydon Corp. ........................... 15,389
543 Maverick Tube Corp.* ................... 12,387
2,954 Metals USA, Inc. ....................... 12,739
264 Mobile Mini, Inc.* ..................... 5,066
917 Mueller Industries, Inc.* .............. 26,650
162 Penn Engineering & Manufacturing
Corp. ................................ 5,498
645 Precision Castparts Corp. .............. 41,240
432 Shaw Group Inc.* ....................... 20,358
254 SPS Technologies, Inc.* ................ 11,398
1,623 Timken Co. (The) ....................... 28,910
1,118 Tower Automotive, Inc.* ................ 13,626
588 Wolverine Tube, Inc.* .................. 10,217
------------
346,860
------------
Mid-Sized Banks (0.7%)
10,250 AmSouth Bancorporation ................. 172,328
1,840 BancWest Corp. ......................... 33,925
1,584 Commerce Bancshares, Inc. .............. 51,975
2,979 Compass Bancshares, Inc. ............... 54,181
12,137 Fifth Third Bancorp .................... 501,389
303 First Citizens BancShares, Inc.
(Class A) ............................ 18,483
5,130 First Security Corp. ................... 73,744
3,417 First Tennessee National Corp. ......... 62,360
1,302 First Virginia Banks, Inc. ............. 51,673
25,689 Firstar Corp. .......................... 507,358
4,202 Hibernia Corp. (Class A) ............... 45,959
240 M&T Bank Corp. ......................... 113,385
2,791 Marshall & Ilsley Corp. ................ 126,293
1,807 Mercantile Bankshares Corp. ............ 57,485
5,834 Northern Trust Corp. ................... 436,821
3,647 Old Kent Financial Corp. ............... 98,013
2,025 Pacific Century Financial Corp. ........ 28,223
5,730 Regions Financial Corp. ................ 114,242
1,189 South Financial Group, Inc. (The) ...... 16,869
7,333 Synovus Financial Corp. ................ 131,994
2,174 TCF Financial Corp. .................... 63,997
545 UMB Financial Corp. .................... 19,075
3,696 Union Planters Corp. ................... 106,029
------------
2,885,801
------------
Military/Gov't/Technical (0.3%)
858 Aeroflex Inc.* ......................... 24,560
283 Alliant Techsystems, Inc.* ............. 20,022
414 Cubic Corp. ............................ 8,228
1,036 ESCO Technologies Inc.* ................ 19,684
1,227 FLIR Systems, Inc.* .................... 9,509

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
327 FuelCell Energy, Inc.* .................. $ 24,137
5,267 General Dynamics Corp. .................. 297,256
18,075 General Motors Corp. (Class H)* ......... 467,691
581 Integral Systems, Inc.* ................. 9,296
1,193 Litton Industries, Inc.* ................ 58,979
7,756 Loral Space & Communications
Ltd.* ................................. 40,234
229 Microvision, Inc.* ...................... 8,473
787 Newport News Shipbuilding Inc. .......... 31,775
1,252 PerkinElmer, Inc. ....................... 80,050
461 Primex Technologies, Inc. ............... 10,632
8,870 Raytheon Co. (Class B) .................. 215,098
1,143 REMEC, Inc.* ............................ 29,254
507 SatCon Technology Corp.* ................ 13,911
364 SBS Technologies, Inc.* ................. 14,560
585 The Kroll-O'Gara Co.* ................... 3,053
519 ThermoTrex Corp.* ....................... 5,839
1,501 Titan Corp. (The)* ...................... 44,561
356 UTL Holdings Corp.* ..................... 16,955
------------
1,453,757
------------
Motor Vehicles (0.6%)
31,834 Ford Motor Co. .......................... 1,482,271
16,153 General Motors Corp. .................... 919,711
7,932 Harley-Davidson, Inc. ................... 355,949
------------
2,757,931
------------
Movies/Entertainment (0.1%)
2,391 AMC Entertainment, Inc.* ................ 7,173
6,635 AMF Bowling, Inc.* ...................... 4,976
1,362 Cedar Fair, L.P. ........................ 24,261
1,124 Championship Auto Racing Teams,
Inc.* ................................. 28,030
788 Gaylord Entertainment Co.* .............. 19,552
311 GC Companies, Inc.* ..................... 5,365
1,392 International Speedway Corp.
(Class A) ............................. 44,283
893 Launch Media, Inc.* ..................... 6,139
2,458 Learn2.com Inc.* ........................ 5,531
698 Liberty Digital, Inc. (Class A)* ........ 19,021
255 Liberty Livewire Corp. (Class A)* ....... 13,898
4,815 Loews Cineplex Entertainment
Corp.* ................................ 14,144
5,282 Metro-Goldwyn-Mayer Inc.* ............... 132,380
826 Musicmaker.com, Inc.* ................... 1,162
539 On Command Corp.* ....................... 6,603
1,233 Pixar, Inc.* ............................ 41,228
1,203 Quokka Sports, Inc.* .................... 8,496

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
1,684 SFX Entertainment, Inc.
(Class A)* ............................ $ 77,464
1,974 Six Flags, Inc.* ........................ 29,980
1,050 Speedway Motorsports, Inc.* ............. 24,150
594 SportsLine USA, Inc.* ................... 9,356
898 TiVo Inc.* .............................. 19,868
232 World Wrestling Federation
Entertainment, Inc.* .................. 4,930
418 YouthStream Media Networks,
Inc.* ................................. 1,568
------------
549,558
------------
Multi-Line Insurance (1.6%)
21,108 Allstate Corp. .......................... 581,789
61,065 American International Group, Inc. ...... 5,354,637
4,804 CNA Financial Corp.* .................... 185,254
5,808 Hartford Financial Services Group,
Inc. .................................. 373,164
931 Horace Mann Educators Corp. ............. 12,976
628 Nationwide Financial Services, Inc.
(Class A) ............................. 23,079
3,407 Safeco Corp. ............................ 78,574
1,825 Unitrin, Inc. ........................... 51,556
432 Zenith National Insurance Corp. ......... 10,152
------------
6,671,181
------------
Multi-Sector Companies (3.3%)
950 Ampal-American Israel Corp.
(Class A)* ............................ 13,359
1,662 Crane Co. ............................... 36,564
812 Fidelity Holdings, Inc.* ................ 1,446
4,300 Fortune Brands, Inc. .................... 96,750
261,301 General Electric Co.** .................. 13,440,670
2,333 Kaman Corp. ............................. 29,163
1,010 Lancaster Colony Corp. .................. 23,735
1,158 McDermott International, Inc.* .......... 8,613
1,209 Pittston Brink's Group .................. 14,508
2,197 St. Joe Co. (The) ....................... 65,361
3,898 Textron, Inc. ........................... 222,430
2,683 Tyler Technologies, Inc.* ............... 6,875
2,891 Valhi, Inc. ............................. 31,620
903 Walter Industries, Inc. ................. 9,877
227 Wesco Financial Corp. ................... 51,302
------------
14,052,273
------------
Mutual Funds (0.0%)
425 Winfield Capital Corp.* ................. 5,020
------------

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
Natural Gas (0.2%)
1,493 AGL Resources, Inc. ...................... $ 26,967
741 Atmos Energy Corp. ....................... 15,283
1,337 Cascade Natural Gas Corp. ................ 22,061
268 CTG Resources, Inc. ...................... 9,966
682 Eastern Enterprises ...................... 42,710
532 Energen Corp. ............................ 11,970
242 EnergyNorth, Inc. ........................ 14,535
834 Equitable Resources, Inc. ................ 43,420
3,508 KeySpan Corp. ............................ 111,379
2,950 Kinder Morgan, Inc. ...................... 100,300
437 Laclede Gas Co. .......................... 8,658
2,245 MCN Energy Group Inc. .................... 48,548
1,603 MDU Resources Group, Inc. ................ 37,270
1,024 National Fuel Gas Co. .................... 50,496
418 New Jersey Resources Corp. ............... 16,720
1,187 Nicor Inc. ............................... 41,174
539 Northwest Natural Gas Co. ................ 12,464
377 NUI Corp. ................................ 10,627
754 ONEOK, Inc. .............................. 20,122
895 Peoples Energy Corp. ..................... 28,360
820 Piedmont Natural Gas Co. ................. 23,268
573 Providence Energy Corp. .................. 24,173
2,080 Questar Corp. ............................ 40,560
1,070 SEMCO ENERGY, Inc. ....................... 15,716
5,734 Sempra Energy ............................ 107,513
355 South Jersey Industries, Inc. ............ 9,607
1,214 Southern Union Co.* ...................... 20,942
736 Southwest Gas Corp. ...................... 13,248
1,122 Southwestern Energy Co. .................. 8,275
757 UGI Corp. ................................ 16,985
1,607 Vectren Corp. ............................ 28,323
1,173 Washington Gas Light Co. ................. 28,885
------------
1,010,525
------------
Newspapers (0.4%)
3,104 Belo (A.H.) Corp. (Series A) ............. 59,946
857 Central Newspapers, Inc.
(Class A) .............................. 54,848
2,354 Dow Jones & Co., Inc. .................... 155,217
7,306 Gannett Co., Inc. ........................ 393,611
2,723 Hollinger International, Inc.
(Class A) .............................. 44,249
1,174 Journal Register Co.* .................... 20,545
2,118 Knight-Ridder, Inc. ...................... 110,401
1,158 Lee Enterprises, Inc. .................... 30,687
1,134 McClatchy Co. (The) (Class A) ............ 38,485
671 Media General, Inc. (Class A) ............ 33,550

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
4,488 New York Times Co. (The)
(Class A) .............................. $ 184,850
211 Pulitzer, Inc. ........................... 8,625
2,047 Scripps (E.W.) Co. ....................... 101,071
10,158 Tribune Co. .............................. 330,135
279 Washington Post Co. (The)
(Class B) .............................. 133,920
------------
1,700,140
------------
Office Equipment/Supplies (0.2%)
590 Anacomp Inc.* ............................ 1,180
2,953 Avery Dennison Corp. ..................... 160,200
1,807 Diebold, Inc. ............................ 51,161
448 General Binding Corp.* ................... 4,004
1,582 Hon Industries, Inc. ..................... 42,220
5,212 Interface, Inc. .......................... 26,712
962 Kimball International, Inc.
(Class B) .............................. 14,550
2,019 Miller (Herman), Inc. .................... 63,346
6,952 Pitney Bowes, Inc. ....................... 240,713
2,084 Steelcase, Inc. (Class A) ................ 35,428
17,409 Xerox Corp. .............................. 258,959
------------
898,473
------------
Office/Plant Automation (0.0%)
491 Brooktrout, Inc.* ........................ 14,853
1,055 ePresence, Inc.* ......................... 6,594
1,639 General DataComm Industries,
Inc.* .................................. 7,376
1,106 Hypercom Corp.* .......................... 10,369
864 InterVoice-Brite, Inc.* .................. 5,508
301 Kronos, Inc.* ............................ 10,309
980 Manugistics Group, Inc.* ................. 54,390
789 NYFIX, Inc.* ............................. 29,785
799 Radiant Systems, Inc.* ................... 14,881
1,249 Telxon Corp.* ............................ 22,794
1,395 Unova, Inc.* ............................. 11,073
------------
187,932
------------
Oil & Gas Production (0.5%)
6,348 Anardarko Petroleum Corp. ................ 303,465
2,990 Apache Corp. ............................. 148,753
854 Barrett Resources Corp.* ................. 23,752
450 Basin Exploration, Inc.* ................. 7,144
1,446 Belco Oil & Gas Corp.* ................... 12,020
671 Berry Petroleum Co. (Class A) ............ 12,204
606 Brown (Tom), Inc.* ....................... 11,666
5,700 Burlington Resources, Inc. ............... 185,963
557 Cabot Oil & Gas Corp. (Class A) .......... 10,305
8,434 Chesapeake Energy Corp.* ................. 48,496

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
2,754 Cross Timbers Oil Co. ................... $ 45,269
2,248 Devon Energy Corp. ...................... 102,846
3,177 EOG Resources, Inc. ..................... 93,920
1,236 Evergreen Resources, Inc.* .............. 33,836
1,403 Forest Oil Corp.* ....................... 18,064
464 Houston Exploration Co. (The)* .......... 10,208
568 HS Resources, Inc.* ..................... 15,691
923 Hugoton Royalty Trust ................... 10,961
2,502 Kerr-McGee Corp. ........................ 137,297
1,055 Louis Dreyfus Natural Gas Corp.* ........ 27,430
442 McMoRan Exploration Co.* ................ 5,304
1,904 Meridian Resource Corp. (The)* .......... 9,044
1,239 Mitchell Energy & Development
Corp. (Class A) ....................... 39,493
1,050 Newfield Exploration Co.* ............... 35,766
1,495 Noble Affiliates, Inc. .................. 44,850
555 Nuevo Energy Co.* ....................... 8,464
9,634 Occidental Petroleum Corp. .............. 195,089
4,373 Ocean Energy, Inc.* ..................... 53,023
1,639 Patina Oil & Gas Corp. .................. 27,658
414 Pennaco Energy, Inc.* ................... 5,020
2,630 Pioneer Natural Resources Co.* .......... 28,273
1,717 Plains Resources, Inc.* ................. 25,326
1,014 Pogo Producing Co. ...................... 20,153
4,833 Santa Fe Snyder Corp.* .................. 48,330
1,441 Spinnaker Exploration Co.* .............. 35,935
390 St. Mary Land & Exploration Co. ......... 11,676
462 Stone Energy Corp.* ..................... 22,176
730 Swift Energy Co.* ....................... 16,014
2,388 Transmontaigne, Inc.* ................... 12,836
2,758 Unit Corp.* ............................. 34,475
2,560 Vastar Resources, Inc. .................. 211,040
1,575 Vintage Petroleum, Inc. ................. 28,350
------------
2,177,585
------------
Oil Refining/Marketing (0.1%)
1,821 Ashland, Inc. ........................... 59,979
1,393 Frontier Oil Corp.* ..................... 9,751
696 Getty Realty Corp. ...................... 7,830
2,044 Pennzoil-Quaker State Co. ............... 25,550
2,365 Sunoco, Inc. ............................ 57,647
2,065 Tesoro Petroleum Corp.* ................. 19,747
3,772 Tosco Corp. ............................. 99,958
2,271 Ultramar Diamond Shamrock Corp........... 51,949
8,143 USX-Marathon Group ...................... 197,977
1,407 Valero Refining and Marketing
Corp. ................................... 36,494
------------
566,882
------------

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
Oil/Gas Transmission (0.7%)
639 Buckeye Partners, L.P.* ................. $ 17,812
5,599 Coastal Corp. ........................... 323,342
2,130 Columbia Energy Group ................... 145,373
4,236 Dynegy, Inc. (Class A) .................. 298,109
5,984 El Paso Energy Corp. .................... 289,476
19,334 Enron Corp. ............................. 1,423,466
1,194 Enterprise Products Partners L.P. ....... 27,537
1,185 Midcoast Energy Resources, Inc. ......... 18,960
1,575 Plains All American Pipeline, L.P. ...... 29,827
1,291 TC Pipelines, L.P.* ..................... 21,624
785 TEPPCO Partners, L.P. ................... 20,067
1,814 Western Gas Resources, Inc. ............. 33,106
11,668 Williams Companies, Inc. ................ 487,139
------------
3,135,838
------------
Oilfield Services/Equipment (0.7%)
8,628 Baker Hughes Inc. ....................... 298,745
2,250 BJ Services Co.* ........................ 131,344
300 Cal Dive International, Inc. ............ 14,475
1,080 Carbo Ceramics, Inc. .................... 37,395
1,361 Cooper Cameron Corp.* ................... 87,955
435 Dril-Quip, Inc.* ........................ 17,373
895 Friede Goldman International, Inc.*...... 5,762
2,300 Global Industries Ltd.* ................. 28,750
2,833 Grant Prideco, Inc.* .................... 57,014
11,578 Halliburton Co. ......................... 534,035
1,450 Hanover Compressor Co.* ................. 49,481
3,870 Input/Output, Inc.* ..................... 31,686
2,247 Key Energy Group, Inc.* ................. 17,133
2,375 National-Oilwell, Inc.* ................. 78,375
545 Oceaneering International, Inc.* ........ 8,311
934 Offshore Logistics, Inc.* ............... 11,792
1,319 RPC, Inc. ............................... 13,437
15,030 Schlumberger Ltd. ....................... 1,111,281
934 Seitel, Inc.* ........................... 10,741
1,282 Smith International, Inc.* .............. 91,503
1,419 Superior Energy Services, Inc.* ......... 14,190
1,122 Trico Marine Service, Inc.* ............. 11,080
481 UTI Energy Corp.* ....................... 15,152
2,388 Varco International, Inc.* .............. 41,193
474 Veritas DGC Inc.* ....................... 10,191
2,833 Weatherford International, Inc.* ........ 113,497
------------
2,841,891
------------
Other Consumer Services (0.3%)
825 ACE Cash Express, Inc.* ................. 9,539
736 Advantage Learning Systems, Inc.*........ 12,144
1,949 Apollo Group, Inc. (Class A)* ........... 71,504

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
763 Autobytel.com, Inc.* .................... $ 4,053
1,016 Autoweb.com, Inc.* ...................... 1,969
522 Bally Total Fitness Holding Corp.*....... 11,354
2,577 Block (H.&R.), Inc. ..................... 82,464
595 Career Education Corp.* ................. 33,989
19,044 Cendant Corp.* .......................... 244,001
966 Central Parking Corp. ................... 19,803
1,314 Cheap Tickets, Inc.* .................... 14,865
313 Chemed Corp. ............................ 9,018
465 Coinstar, Inc.* ......................... 5,231
515 Corinthian Colleges, Inc.* .............. 17,365
1,824 DeVry, Inc.* ............................ 61,788
629 drkoop.com, Inc.* ....................... 727
995 E-LOAN, Inc.* ........................... 3,980
787 E-Stamp Corp.* .......................... 885
6,824 eBay, Inc.* ............................. 341,200
1,021 Edison Schools Inc.* .................... 22,717
716 Education Management Corp.* ............. 14,768
797 Engreetings Network, Inc.* .............. 1,245
984 Expedia, Inc. (Class A)* ................ 16,851
392 garden.com, Inc.* ....................... 613
1,064 Homeseekers.com, Inc.* .................. 2,727
2,018 Homestore.com, Inc.* .................... 70,630
827 InsWeb Corp.* ........................... 1,137
1,655 ITT Educational Services, Inc.* ......... 31,445
1,729 MP3.com, Inc.* .......................... 17,074
518 Official Payments Corp.* ................ 2,784
4,458 Priceline.com Inc.* ..................... 105,320
3,069 Protection One, Inc.* ................... 6,138
609 Rollins, Inc. ........................... 9,211
796 Scientific Learning Corp.* .............. 5,062
7,131 Service Corp. International* ............ 18,273
8,005 ServiceMaster Co. ....................... 74,547
1,483 Sotheby's Holdings, Inc. (Class A)*...... 27,806
1,011 Source Media, Inc.* ..................... 5,181
1,992 Stewart Enterprises, Inc.
(Class A) ............................. 4,358
440 Strayer Education, Inc. ................. 9,598
817 Student Advantage, Inc.* ................ 6,945
690 Ticketmaster Online-CitySearch,
Inc. (Series B)* ...................... 13,498
616 Travelocity.com Inc.* ................... 9,702
940 US Search.com, Inc.* .................... 2,233
855 Veterinary Centers of America,
Inc.* ................................. 12,130
------------
1,437,872
------------

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
Other Metals/Minerals (0.0%)
2,360 Allegheny Technologies Inc. ............. $ 48,823
684 AMCOL International Corp. ............... 2,522
609 Brush Engineered Materials Inc. ......... 10,087
534 Minerals Technologies, Inc. ............. 25,599
2,220 Phelps Dodge Corp. ...................... 90,326
570 Southern Peru Copper Corp. (Peru)........ 6,733
1,044 Titanium Metals Corp.* .................. 4,763
2,162 USEC Inc. ............................... 9,459
------------
198,312
------------
Other Pharmaceuticals (0.3%)
3,446 Allergan, Inc. .......................... 230,667
1,904 Alliance Pharmaceutical Corp.* .......... 20,111
413 Aviron* ................................. 11,874
879 BioMarin Pharmaceutical, Inc.* .......... 16,481
1,041 Cell Pathways, Inc.* .................... 27,066
427 Chattem, Inc.* .......................... 5,231
464 Collateral Therpeutics, Inc.* ........... 11,143
1,297 Columbia Laboratories, Inc.* ............ 8,187
612 Connetics Corp.* ........................ 9,869
1,055 Dura Pharmaceuticals, Inc.* ............. 23,869
1,157 Elan Corp. (Rights) (Ireland)* .......... 832
445 Elan Corp. PLC (ADR) (Ireland)* ......... 23,780
1,592 Endo Pharmaceuticals Holdings,
Inc.* ................................. 13,532
435 EntreMed, Inc.* ......................... 13,213
2,214 Forest Laboratories, Inc.* .............. 236,898
1,704 Jones Pharma Incorporated ............... 55,700
2,341 King Pharmaceuticals, Inc.* ............. 70,523
915 Kos Pharmaceuticals, Inc.* .............. 13,496
727 Medicis Pharmaceutical Corp.
(Class A)* ............................ 40,894
418 Miravant Medical Technologies
Inc.* ................................. 7,106
500 Noven Pharmaceuticals, Inc.* ............ 14,188
1,582 Perrigo Co.* ............................ 10,679
1,047 PRAECIS Pharmaceuticals Inc.* ........... 29,381
1,926 Sepracor, Inc.* ......................... 203,675
826 Theragenics Corp.* ...................... 6,143
464 United Therapeutics Corp.* .............. 45,472
------------
1,150,010
------------
Other Specialty Stores (0.3%)
10,494 AutoNation, Inc.* ....................... 72,802
3,642 AutoZone, Inc.* ......................... 83,311
1,751 Barnes & Noble, Inc.* ................... 35,458
3,678 Bed Bath & Beyond Inc.* ................. 135,396
1,729 Bombay Co., Inc. (The)* ................. 4,971

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
1,970 Borders Group, Inc.* .................... $ 25,364
2,116 Central Garden & Pet Co.* ............... 15,606
487 Cost Plus, Inc.* ........................ 16,223
926 CPI Corp. ............................... 22,976
2,073 CSK Auto Corp.* ......................... 17,621
592 Discount Auto Parts, Inc.* .............. 4,810
495 Group 1 Automotive, Inc.* ............... 5,909
977 Guitar Center, Inc.* .................... 14,411
2,085 Haverty Furniture Companies, Inc......... 24,108
2,060 Heilig-Meyers Co.* ...................... 1,931
752 Jo-Ann Stores, Inc. (Class A)* .......... 5,452
995 Linens 'N Things, Inc.* ................. 29,788
780 Michaels Stores, Inc.* .................. 33,784
427 Midas, Inc. ............................. 6,779
1,209 O'Reilly Automotive, Inc.* .............. 17,455
8,394 Office Depot, Inc.* ..................... 52,463
2,704 Officemax, Inc.* ........................ 10,647
3,063 Pep Boys-Manny Moe & Jack ............... 17,804
775 Petco Animal Supplies, Inc* ............. 15,355
2,798 PETsMART, Inc.* ......................... 10,667
2,614 Pier 1 Imports, Inc. .................... 31,205
924 Regis Corp. ............................. 12,128
512 Rent-A-Center, Inc.* .................... 14,080
278 Sharper Image Corp.* .................... 4,900
800 Sonic Automotive, Inc.* ................. 9,150
12,792 Staples, Inc.* .......................... 176,690
934 Sunglass Hut International, Inc.* ....... 6,772
3,792 Tiffany & Co. ........................... 129,876
6,176 Toys 'R' Us, Inc.* ...................... 101,904
838 Tuesday Morning Corp.* .................. 8,144
752 United Auto Group, Inc.* ................ 5,875
492 Whitehall Jewellers, Inc.* .............. 4,367
1,479 Williams-Sonoma, Inc.* .................. 57,311
889 Zale Corp.* ............................. 33,226
500 Zany Brainy, Inc.* ...................... 1,344
------------
1,278,063
------------
Other Telecommunications (1.2%)
898 Adelphia Business Solutions, Inc.*....... 12,909
712 Alaska Communications Systems
Holdings, Inc.* ....................... 6,764
2,259 Allegiance Telecom, Inc.* ............... 125,516
1,430 Allied Riser Communications
Corporation* .......................... 14,658
6,274 BroadWing Inc.* ......................... 164,693
837 CapRock Communications Corp.* ........... 5,127
3,661 CenturyTel, Inc. ........................ 107,313
463 CFW Communications Co.* ................. 18,462
6,847 Citizens Communications Co.* ............ 114,687

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
850 Clarent Corp.* .......................... $ 36,444
579 Commonwealth Telephone
Enterprises, Inc.* ...................... 24,897
1,390 COMSAT Corp. ............................ 39,094
2,623 Convergent Communications, Inc.* ........ 13,443
3,763 Covad Communications Group,
Inc.* ................................. 62,090
438 CT Communications, Inc. ................. 11,826
1,157 Cypress Communications, Inc.* ........... 5,640
295 Deltathree.Com Inc.* .................... 2,544
1,473 DSL.net, Inc.* .......................... 7,273
1,259 e. spire Communications, Inc.* .......... 6,610
1,447 Efficient Networks, Inc.* ............... 90,890
582 FirstCom Corp.* ......................... 8,075
1,598 Focal Communications Corp.* ............. 59,326
1,880 General Communication, Inc.
(Class A)* ............................ 9,870
5,151 Global Telesystems Group, Inc.* ......... 43,784
447 GRIC Communications, Inc.* .............. 3,548
320 Hickory Tech Corp. ...................... 5,920
770 iBasis, Inc.* ........................... 13,860
1,200 ICG Communications, Inc.* ............... 18,300
608 IDT Corp.* .............................. 21,850
783 Illuminet Holdings, Inc.* ............... 32,935
1,379 Intermedia Communications Inc.* ......... 24,305
1,499 ITC DeltaCom, Inc.* ..................... 25,202
765 LCC International, Inc. (Class A)* ...... 15,683
9,585 Level 3 Communications, Inc.* ........... 655,973
15,154 McLeodUSA, Inc. (Class A)* .............. 256,671
1,538 Metrocall, Inc.* ........................ 8,075
940 MGC Communication, Inc.* ................ 42,300
446 Net2Phone, Inc.* ........................ 11,986
1,139 Network Access Solutions Corp.* ......... 11,390
1,374 Network Plus Corp.* ..................... 16,832
6,030 NEXTLINK Communications, Inc.
(Class A)* ............................ 199,367
336 North Pittsburgh Systems, Inc. .......... 4,536
3,365 NorthPoint Communications Group,
Inc.* ................................. 39,749
3,711 NTL Inc.* ............................... 167,227
893 Pac-West Telecomm, Inc.* ................ 17,079
657 Pacific Gateway Exchange, Inc.* ......... 1,971
500 PanAmSat Corp.* ......................... 17,031
1,266 Pinnacle Holdings Inc.* ................. 71,133
928 Primus Telecommunications Group,
Inc.* ................................... 15,138
1,551 PTEK Holdings, Inc.* .................... 6,204

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
43,115 Qwest Communications
International, Inc.* .................... $ 2,023,710
2,127 RCN Corp.* ................................ 46,262
2,059 Rhythms NetConnections Inc.* .............. 24,708
1,551 STAR Telecommunications, Inc.* ............ 3,974
872 Startec Global Communications
Corp.* .................................. 8,829
1,543 TALK.com, Inc.* ........................... 7,908
1,619 Telephone & Data Systems, Inc. ............ 180,316
999 Teligent, Inc. (Class A)* ................. 19,356
866 Time Warner Telecom Inc.
(Class A)* .............................. 53,638
376 U.S. LEC Corp. (Class A)* ................. 4,512
1,311 Viatel, Inc.* ............................. 18,272
804 WebLink Wireless, Inc.* ................... 8,090
1,673 West TeleServices Corp.* .................. 39,525
1,788 Williams Communications Group,
Inc.* ................................... 48,276
2,246 WinStar Communications, Inc.* ............. 67,942
1,706 WorldPages.com, Inc.* ..................... 9,383
550 Z-Tel Technologies, Inc.* ................. 4,091
------------
5,264,992
------------
Other Transportation (0.0%)
224 Carey International, Inc.* ................ 4,018
------------
Package Goods/Cosmetics (1.3%)
1,408 Alberto-Culver Co. (Class B) .............. 42,768
6,350 Avon Products, Inc. ....................... 252,016
561 Block Drug, Inc. .......................... 22,510
1,179 Carter-Wallace, Inc. ...................... 25,201
980 Church & Dwight Co., Inc. ................. 17,273
6,199 Clorox Co. ................................ 256,096
15,268 Colgate-Palmolive Co. ..................... 850,237
629 Del Laboratories, Inc.* ................... 7,863
2,659 Dial Corp. (The) .......................... 33,736
3,253 Estee Lauder Companies, Inc.
(Class A) (The) ......................... 143,132
28,112 Gillette Co. .............................. 820,519
889 Guest Supply, Inc.* ....................... 14,946
2,755 International Flavors & Fragrances,
Inc. .................................... 73,696
14,561 Kimberly-Clark Corp. ...................... 836,347
2,711 Nu Skin Asia Pacific Inc.
(Class A)* .............................. 15,588
1,445 Playtex Products, Inc.* ................... 17,521
34,482 Procter & Gamble Co. ...................... 1,961,164
2,487 Revlon Inc. (Class A)* .................... 15,388
------------
5,406,001
------------

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
Packaged Foods (0.7%)
1,599 Aurora Foods, Inc.* ....................... $ 4,897
7,310 Bestfoods ................................. 508,959
11,176 Campbell Soup Co. ......................... 296,164
1,126 Del Monte Foods Co.* ...................... 8,164
1,463 Dole Food Co., Inc. ....................... 20,665
7,892 General Mills, Inc. ....................... 271,288
9,295 Heinz (H.J.) Co. .......................... 371,219
1,861 International Home Foods, Inc.* ........... 40,244
10,625 Kellogg Co. ............................... 275,586
8,548 Nabisco Group Holdings Corp. .............. 226,522
1,348 Nabisco Holdings Corp. (Class A) .......... 71,276
3,506 Quaker Oats Company (The) ................. 235,779
7,991 Ralston-Ralston Purina Group .............. 161,318
23,815 Sara Lee Corp. ............................ 439,089
------------
2,931,170
------------
Paints/Coatings (0.1%)
925 Ferro Corp. ............................... 21,506
350 Fuller (H.B.) Co. ......................... 13,519
640 Lilly Industries, Inc. (Class A) .......... 19,320
4,555 PPG Industries, Inc. ...................... 185,332
2,725 RPM, Inc. ................................. 25,377
4,347 Sherwin-Williams Co. ...................... 90,472
1,084 Valspar Corp. (The) ....................... 33,740
------------
389,266
------------
Paper (0.3%)
1,442 Boise Cascade Corp. ....................... 39,835
1,354 Bowater, Inc. ............................. 66,685
479 Chesapeake Corp. .......................... 12,544
2,379 Consolidated Papers, Inc. ................. 93,078
1,248 FiberMark, Inc.* .......................... 14,898
5,671 Fort James Corp. .......................... 173,320
752 Glatfelter (P.H.) Co. ..................... 7,614
12,635 International Paper Co. ................... 429,590
1,233 Longview Fibre Co. ........................ 14,796
2,690 Mead Corp. ................................ 68,259
730 Potlatch Corp. ............................ 25,094
1,297 Wausau-Mosinee Paper Corp. ................ 11,754
2,628 Westvaco Corp. ............................ 72,106
2,924 Willamette Industries, Inc. ............... 88,634
------------
1,118,207
------------
Photographic Products (0.1%)
542 Concord Camera Corp.* ..................... 10,772
8,271 Eastman Kodak Co. ......................... 453,871
351 ParkerVision, Inc.* ....................... 16,124
1,123 Polaroid Corp. ............................ 20,354
------------
501,121
------------

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
Precious Metals (0.1%)
4,097 Battle Mountain Gold Co.* .............. $ 7,426
3,856 Echo Bay Mines Ltd. (Canada)* .......... 3,615
4,125 Freeport-McMoRan Copper & Gold,
Inc. (Class B)* ...................... 37,125
12,424 Glamis Gold Ltd. (Canada)* ............. 21,742
6,567 Homestake Mining Co. ................... 35,708
1,313 Meridian Gold Inc. (Canada)* ........... 7,796
4,393 Newmont Mining Corp. ................... 77,976
956 Stillwater Mining Co.* ................. 25,095
------------
216,483
------------
Precision Instruments (0.3%)
12,651 Agilent Technologies, Inc.* ............ 515,528
302 Analogic Corp. ......................... 13,892
1,334 BriteSmile, Inc.* ...................... 6,503
651 Coherent, Inc.* ........................ 38,979
531 Dionex Corp.* .......................... 13,806
1,020 Excel Technology, Inc.* ................ 38,760
526 GenRad, Inc.* .......................... 4,471
444 LightPath Technologies, Inc.
(Class A)* ........................... 12,876
921 Mechanical Technology, Inc.* ........... 11,743
895 MTS Systems Corp. ...................... 5,873
734 Newport Corp. .......................... 71,840
633 Robotic Vision Systems, Inc.* .......... 8,506
408 Spectra-Physics Lasers, Inc.* .......... 32,334
425 Technitrol, Inc. ....................... 46,856
1,238 Tektronix, Inc.* ....................... 76,137
964 Trimble Navigation Ltd.* ............... 41,693
842 Varian, Inc.* .......................... 35,469
1,630 Waters Corp.* .......................... 193,359
295 Zygo Corp.* ............................ 21,627
------------
1,190,252
------------
Printing/Forms (0.1%)
1,122 Applied Graphics Technologies,
Inc.* ................................ 4,488
587 Banta Corp. ............................ 11,336
767 Bowne & Co., Inc. ...................... 6,759
1,325 Consolidated Graphics, Inc.* ........... 14,161
432 CSS Industries, Inc.* .................. 8,991
1,852 Deluxe Corp. ........................... 39,818
3,314 Donnelley (R.R.) & Sons Co. ............ 73,737
553 Harland (John H.) Co. .................. 7,396
374 ImageX.com, Inc.* ...................... 2,244
1,174 Mail-Well, Inc.* ....................... 8,291
1,060 New England Business Service, Inc....... 21,995
1,544 Standard Register Co. .................. 19,783

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
947 Wallace Computer Services, Inc. ........ $ 8,464
915 Workflow Management, Inc.* ............. 6,405
------------
233,868
------------
Property - Casualty Insurers (1.0%)
2,190 21st Century Insurance Group ........... 31,755
331 Acceptance Insurance Co., Inc.* ........ 1,531
946 Alfa Corp. ............................. 17,265
235 Alleghany Corp.* ....................... 41,624
1,422 Allmerica Financial Corp. .............. 84,076
1,474 American Financial Group, Inc. ......... 36,850
684 Arch Capital Group Ltd.* ............... 10,602
424 Argonaut Group, Inc. ................... 6,599
430 Baldwin & Lyons, Inc. (Class B) ........ 6,853
1,406 Berkley (W.R.) Corp. ................... 34,096
40 Berkshire Hathaway, Inc.* .............. 2,204,000
4,611 Chubb Corp. ............................ 341,214
4,301 Cincinnati Financial Corp. ............. 162,363
896 Commerce Group, Inc. (The) ............. 24,864
1,649 Erie Indemnity Co. (Class A) ........... 52,562
1,185 Everest Re Group, Ltd. (Bermuda) ....... 47,030
239 Farm Family Holdings, Inc. ............. 7,962
1,249 Fremont General Corp. .................. 5,074
1,691 Harleysville Group, Inc. ............... 30,755
1,290 HCC Insurance Holdings, Inc. ........... 26,445
763 HSB Group, Inc. ........................ 27,087
2,779 Loews Corp. ............................ 174,382
1,380 Mercury General Corp. .................. 36,053
425 Midland Co. (The) ...................... 11,263
1,434 Ohio Casualty Corp. .................... 12,749
3,308 Old Republic International Corp. ....... 73,810
1,324 Philadelphia Consolidated Holding
Corp.* ............................... 21,432
674 PMA Capital Corp. (Class A) ............ 11,879
1,916 Progressive Corp. ...................... 128,851
2,740 Reliance Group Holdings, Inc. .......... 599
288 RLI Corp. .............................. 10,080
1,548 Selective Insurance Group, Inc. ........ 28,541
5,956 St. Paul Companies, Inc. ............... 264,670
952 State Auto Financial Corp. ............. 10,889
910 Transatlantic Holdings, Inc. ........... 77,293
1,624 Trenwick Group Inc. .................... 28,623
418 United Fire & Casualty Co. ............. 7,994
------------
4,099,715
------------
Railroads (0.2%)
11,976 Burlington Northern Santa Fe
Corp. ................................ 292,664
5,722 CSX Corp. .............................. 141,977

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
919 Florida East Coast Industries, Inc. ...... $ 38,598
1,448 Kansas City Southern Industries,
Inc. ................................... 10,046
10,012 Norfolk Southern Corp. ................... 186,474
6,515 Union Pacific Corp. ...................... 281,367
1,223 Wisconsin Central Transportation
Corp.* ................................. 15,517
------------
966,643
------------
Real Estate (0.1%)
1,157 American Real Estate Partners,
L.P.* .................................. 10,847
2,703 Catellus Development Corp.* .............. 46,627
1,897 CB Richard Ellis Services, Inc.* ......... 21,578
2,716 Flightserv.com* .......................... 2,377
787 Forest City Enterprise, Inc.
(Class A) .............................. 27,053
1,139 Insignia Financial Group, Inc.* .......... 12,671
1,847 Jones Lang LaSalle, Inc.* ................ 25,281
474 LNR Property Corp. ....................... 9,628
756 Newhall Land & Farming Co. (The).......... 20,696
1,314 Security Capital Group Inc.
(Class B)* ............................. 23,570
1,343 Syntroleum Corp.* ........................ 18,131
745 Trammell Crow Co.* ....................... 7,729
1,607 United Leisure Corp.* .................... 11,450
563 W.P. Carey & Co., LLC .................... 9,817
------------
247,455
------------
Real Estate Investment Trusts (0.9%)
122 Alexander's, Inc.* ....................... 9,081
313 Alexandria Real Estate Equities,
Inc. ................................... 11,209
2,148 AMB Property Corp. ....................... 51,284
446 Amli Residential Properties Trust ........ 10,871
1,760 Apartment Investment &
Management Co. (Class A) ............... 85,140
3,646 Archstone Communities Trust .............. 94,568
1,598 Arden Realty, Inc. ....................... 42,347
2,266 Associated Estates Realty Corp. .......... 18,128
1,734 Avalonbay Communities, Inc. .............. 81,715
535 Bedford Property Investors, Inc. ......... 10,299
1,781 Boston Properties, Inc. .................. 73,912
674 Boykin Lodging Co. ....................... 9,647
543 Bradley Real Estate, Inc. ................ 11,675
905 Brandywine Realty Trust .................. 19,853
1,127 BRE Properties, Inc. (Class A) ........... 36,557
743 Burnham Pacific Properties, Inc. ......... 5,201
969 Cabot Industrial Trust ................... 19,865

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
959 Camden Property Trust .................... $ 29,969
727 Capital Automotive REIT .................. 10,996
1,193 Capstead Mortgage Corp. .................. 9,619
1,686 CarrAmerica Realty Corp. ................. 50,369
440 CBL & Associates Properties, Inc. ........ 11,000
1,678 Center Trust, Inc. ....................... 9,019
492 CenterPoint Properties Corp. ............. 20,910
522 Charles E. Smith Residential Realty,
Inc. ................................... 23,066
677 Chateau Communities, Inc. ................ 19,083
303 Chelsea GCA Realty, Inc. ................. 10,984
436 Colonial Properties Trust ................ 12,072
895 Commercial Net Lease Realty .............. 9,677
964 Cornerstone Realty Income Trust,
Inc. ................................... 10,484
812 Cousins Properties, Inc. ................. 35,424
3,066 Crescent Real Estate Equities Co. ........ 67,644
1,611 Developers Diversified Realty Corp........ 25,373
3,315 Duke-Weeks Realty Corp. .................. 81,218
528 EastGroup Properties, Inc. ............... 12,276
611 Entertainment Properties Trust ........... 7,523
3,418 Equity Inns, Inc. ........................ 22,431
7,956 Equity Office Properties Trust ........... 242,658
3,359 Equity Residential Properties Trust....... 167,530
421 Essex Property Trust, Inc. ............... 20,734
963 Federal Realty Investment Trust .......... 20,584
1,664 FelCor Lodging Trust, Inc. ............... 36,400
961 First Industrial Realty Trust, Inc. ...... 30,752
1,979 First Union Real Estate Equity &
Mortgage Investments ................... 5,566
442 First Washington Realty Trust, Inc........ 9,696
1,414 Franchise Finance Corp. of
America ................................ 33,936
696 Frontline Capital Group* ................. 13,529
568 Gables Residential Trust ................. 15,443
1,304 General Growth Properties, Inc. .......... 44,173
574 Glenborough Realty Trust Inc. ............ 11,408
1,843 Glimcher Realty Trust .................... 27,530
619 Great Lakes REIT, Inc. ................... 11,490
1,299 Health Care Property Investors, Inc....... 38,645
1,521 Health Care REIT, Inc. ................... 27,378
954 Healthcare Realty Trust, Inc. ............ 18,961
1,557 Highwoods Properties, Inc. ............... 42,039
346 Home Properties of New York, Inc.......... 10,618
1,424 Hospitality Properties Trust ............. 35,244
5,778 Host Marriot Corp. ....................... 64,280
3,328 HRPT Properties Trust .................... 21,840
99 Imperial Parking Corp. (Canada)* ......... 1,620

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
2,034 INDYMAC Bancorp Inc.* .................... $ 34,832
1,044 Innkeepers USA Trust ..................... 10,832
1,044 IRT Property Co. ......................... 9,331
2,143 iStar Financial Inc. ..................... 44,065
593 JDN Realty Corp. ......................... 6,227
526 JP Realty, Inc. .......................... 9,928
646 Kilroy Realty Corp. ...................... 17,119
1,595 Kimco Realty Corp. ....................... 65,794
620 Koger Equity, Inc. ....................... 10,501
1,535 Konover Property Trust, Inc. ............. 7,387
1,571 LaSalle Hotel Properties ................. 22,681
1,909 Lexington Corporate Properties
Trust .................................. 22,789
1,690 Liberty Property Trust ................... 48,588
3,070 LTC Properties, Inc. ..................... 18,036
813 Macerich Co. (The) ....................... 19,461
1,475 Mack-Cali Realty Corp. ................... 38,627
465 Manufactured Home Communities,
Inc. ................................... 11,160
3,396 Meditrust Corp. (Paired Stock)* .......... 8,490
1,139 MeriStar Hospitality Corp. ............... 25,272
440 Mid-America Apartment
Communities, Inc. ...................... 10,423
522 Mills Corp. .............................. 9,527
420 National Golf Properties, Inc. ........... 8,741
533 National Health Investors, Inc. .......... 5,263
1,103 Nationwide Health Properties, Inc. ....... 17,372
2,233 New Plan Excel Realty Trust .............. 34,472
454 OMEGA Healthcare Investors, Inc........... 2,838
454 Pacific Gulf Properties, Inc. ............ 11,577
524 Pan Pacific Retail Properties, Inc. ...... 10,971
297 Parkway Properties, Inc. ................. 9,504
498 Pennsylvania Real Estate
Investment Trust ....................... 8,777
1,030 Post Properties, Inc. .................... 47,766
897 Prentiss Properties Trust ................ 22,537
609 Prime Group Realty Trust* ................ 9,478
1,432 Prime Retail, Inc.* ...................... 1,701
2,824 Prison Realty Trust, Inc.* ............... 7,766
4,258 ProLogis Trust ........................... 99,265
421 PS Business Parks, Inc. (Class A) ........ 10,736
3,264 Public Storage, Inc. ..................... 83,640
478 Realty Income Corp. ...................... 11,592
1,070 Reckson Associates Realty Corp. .......... 28,088
1,414 Regency Realty Corp. ..................... 33,936
836 RFS Hotel Investores, Inc. ............... 11,182
1,816 Rouse Co. (The) .......................... 47,330
592 Saul Centers, Inc. ....................... 9,435

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
2,220 Senior Housing Properties Trust .......... $ 18,731
692 Shurgard Storage Centers, Inc.
(Class A) .............................. 16,522
4,467 Simon Property Group, Inc. ............... 116,700
467 SL Green Realty Corp. .................... 13,864
1,226 Sovran Self Storage, Inc. ................ 26,895
1,709 Spieker Properties, Inc. ................. 88,334
669 Storage USA, Inc. ........................ 20,363
497 Summit Properties Inc. ................... 11,866
309 Sun Communities, Inc. .................... 9,772
183 Tanger Factory Outlet Centers, Inc........ 4,220
1,271 Taubman Centers, Inc. .................... 14,299
2,399 Thornburg Mortgage Asset Corp. ........... 20,092
539 Town & Country Trust ..................... 9,668
2,704 United Dominion Realty Trust, Inc......... 31,096
320 Urban Shopping Centers, Inc. ............. 10,600
6,382 Ventas, Inc. ............................. 29,118
2,268 Vornado Realty Trust ..................... 88,736
637 Washington Real Estate Investment
Trust .................................. 12,581
701 Weingarten Realty Investors .............. 29,004
1,893 Western Properties Trust ................. 23,189
1,922 Westfield America, Inc. .................. 29,190
9,258 Wyndham International, Inc.
(Class A) .............................. 19,673
------------
3,652,093
------------
Recreational Products/Toys (0.2%)
1,275 Acclaim Entertainment, Inc.* ............. 1,873
485 Action Performance Companies,
Inc.* .................................. 4,123
537 Activision, Inc.* ........................ 4,699
996 Arctic Cat, Inc. ......................... 12,201
3,688 Autotote Corp. (Class A)* ................ 14,752
2,317 Brunswick Corp. .......................... 43,589
1,919 Callaway Golf Co. ........................ 24,107
1,945 Coachmen Industries, Inc. ................ 20,179
1,684 Electronic Arts Inc.* .................... 148,929
4,889 Hasbro, Inc. ............................. 55,612
3,858 ImaginOn, Inc.* .......................... 3,858
537 Infogrames, Inc.* ........................ 3,885
3,135 Intelect Communications, Inc.* ........... 5,486
1,960 International Game Technology* ........... 58,188
445 IntraNet Solutions, Inc.* ................ 16,799
1,235 JAKKS Pacific, Inc.* ..................... 20,378
3,210 K2 Inc.* ................................. 31,899
779 Marvel Enterprises, Inc.* ................ 4,187
11,028 Mattel, Inc. ............................. 121,997
840 Meade Instruments Corp.* ................. 15,173

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
906 Midway Games, Inc.* ...................... $ 7,758
1,174 Monaco Coach Corp.* ...................... 17,537
243 National R.V. Holdings, Inc.* ............ 2,187
943 Navarre Corp.* ........................... 1,650
582 Polaris Industries Inc. .................. 17,606
446 Steinway Musical Instruments Inc.*........ 8,195
1,052 Sturm, Ruger & Co., Inc. ................. 9,271
859 Take-Two Interactive Software,
Inc.* .................................. 8,536
356 Thor Industries, Inc. .................... 8,388
399 THQ, Inc.* ............................... 6,584
1,114 Topps Co., Inc. (The)* ................... 10,705
396 Winnebago Industries, Inc. ............... 5,123
813 WMS Industries, Inc.* .................... 12,398
------------
727,852
------------
Rental/Leasing Companies (0.1%)
574 Aaron Rents, Inc (Class A)* .............. 9,148
372 AMERCO* .................................. 7,347
1,311 ANC Rental Corp. ......................... 8,931
743 Avis Group Holdings, Inc.* ............... 16,625
1,319 Budget Group, Inc. (Class A)* ............ 5,936
3,999 Comdisco, Inc. ........................... 103,474
488 Dollar Thrifty Automotive Group,
Inc.* .................................. 9,181
752 Electro Rent Corp.* ...................... 9,353
183 ePlus, Inc.* ............................. 4,392
485 Financial Federal Corp.* ................. 9,579
1,240 GATX Corp. ............................... 49,523
1,025 Hertz Corp. (Class A) .................... 32,223
3,410 Interpool, Inc. .......................... 39,002
522 McGrath Rent Corp. ....................... 7,895
809 National Equipment Services, Inc.*........ 4,247
1,297 NationsRent, Inc.* ....................... 4,540
730 Neff Corp.* .............................. 2,646
1,315 Rent-Way, Inc.* .......................... 40,765
1,238 Rollins Truck Leasing Corp. .............. 8,821
1,620 Ryder System, Inc. ....................... 33,818
895 SierraCities.com Inc.* ................... 1,846
1,889 United Rentals, Inc.* .................... 38,961
237 XTRA Corp.* .............................. 9,510
------------
457,763
------------
Restaurants (0.4%)
714 Applebee's International, Inc. ........... 15,842
1,475 Avado Brands, Inc.* ...................... 2,213
942 Bob Evans Farms, Inc. .................... 15,072
1,651 Brinker International, Inc.* ............. 47,157
874 Buffets, Inc.* ........................... 10,980

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
1,537 CBRL Group, Inc. ......................... $ 18,252
649 CEC Entertainment, Inc.* ................. 18,091
790 Cheesecake Factory, Inc. (The)* .......... 23,947
1,343 CKE Restaurants, Inc. .................... 3,945
2,423 Consolidated Products, Inc.* ............. 22,261
3,316 Darden Restaurants, Inc. ................. 54,092
1,409 IHOP Corp.* .............................. 23,072
1,003 Jack in the Box Inc.* .................... 21,502
1,175 Landry's Seafood Restaurants, Inc......... 9,106
1,253 Lone Star Steakhouse & Saloon,
Inc. ................................... 11,199
737 Luby's Cafeterias, Inc. .................. 5,988
35,486 McDonald's Corp. ......................... 1,117,809
855 NPC International, Inc.* ................. 7,481
668 O'Charley's, Inc.* ....................... 8,935
1,965 Outback Steakhouse, Inc.* ................ 45,072
432 P.F. Chang's China Bistro, Inc.* ......... 12,717
726 Papa John's International, Inc.* ......... 17,288
420 RARE Hospitality International,
Inc. ................................... 12,206
1,380 Ruby Tuesday, Inc. ....................... 16,991
977 Ryan's Family Steak Houses, Inc.* ........ 8,915
346 Sonic Corp.* ............................. 10,531
4,810 Starbucks Corp.* ......................... 180,375
3,957 Tricon Global Restaurants, Inc.* ......... 95,710
3,134 Wendy's International, Inc. .............. 53,082
------------
1,889,831
------------
Savings & Loan Associations (0.4%)
470 Alliance Bancorp ......................... 7,667
572 Anchor Bancorp Wisconsin, Inc. ........... 9,438
317 Andover Bancorp, Inc. .................... 8,579
1,372 Astoria Financial Corp. .................. 39,960
818 Bank United Corp. (Class A) .............. 29,806
1,428 Bay View Capital Corp. ................... 12,495
895 Brookline Bankcorp, Inc. ................. 10,181
1,196 BSB Bancorp, Inc. ........................ 25,565
2,183 Capitol Federal Financial ................ 26,605
917 CFS Bancorp, Inc. ........................ 9,113
5,561 Charter One Financial, Inc. .............. 119,909
1,407 Commercial Federal Corp. ................. 24,974
553 Commonwealth Bancorp, Inc. ............... 7,517
2,905 Dime Bancorp, Inc. ....................... 46,843
1,474 Dime Community Bancshares ................ 25,242
738 Downey Financial Corp. ................... 25,830
2,031 First Federal Capital Corp. .............. 22,341
1,701 First Financial Holdings, Inc. ........... 23,708
409 First Indiana Corp. ...................... 8,180
912 First Niagara Financial Group, Inc. ...... 8,208

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
1,187 First Sentinel Bancorp, Inc. ............ $ 10,331
524 First Washington Bancorp, Inc. .......... 7,205
1,811 Firstfed Financial Corp.* ............... 28,976
3,182 Golden State Bancorp Inc. ............... 60,856
4,236 Golden West Financial Corp. ............. 194,856
2,826 GreenPoint Financial Corp. .............. 66,411
760 Harbor Florida Bancshares, Inc. ......... 8,645
3,324 Harris Financial, Inc. .................. 22,853
3,025 Hudson City Bancorp, Inc. ............... 50,102
1,913 Hudson River Bancorp, Inc. .............. 22,956
1,785 Independence Community Bank
Corp. ................................. 24,098
1,350 InterWest Bancorp, Inc. ................. 17,044
477 MAF Bancorp, Inc. ....................... 9,510
634 Net.B@nk, Inc.* ......................... 6,617
1,139 Northwest Bancorp, Inc. ................. 8,222
572 OceanFirst Financial Corp. .............. 10,868
1,489 Ocwen Financial Corp.* .................. 9,492
418 Oriental Financial Group, Inc. .......... 5,277
2,174 PBOC Holdings, Inc.* .................... 17,256
1,608 People's Bank ........................... 31,758
1,398 PFF Bancorp, Inc. ....................... 24,290
462 Queens County Bancorp, Inc. ............. 10,684
1,098 Republic Security Financial Corp. ....... 4,735
573 Richmond County Financial Corp. ......... 10,887
1,856 Roslyn Bancorp, Inc. .................... 34,568
5,533 Sovereign Bancorp, Inc. ................. 38,904
448 St. Francis Capital Corp. ............... 6,664
945 Staten Island Bancorp, Inc. ............. 17,010
2,753 United Community Financial Corp.......... 16,174
627 Virginia Capital Bancshares, Inc. ....... 9,875
1,786 W Holding Co., Inc. ..................... 17,414
1,304 Washington Federal, Inc. ................ 24,450
15,130 Washington Mutual, Inc. ................. 486,051
2,063 Webster Financial Corp. ................. 46,160
663 Westcorp ................................ 8,619
263 WSFS Financial Corp. .................... 2,663
------------
1,864,642
------------
Semiconductors (5.7%)
1,110 8x8, Inc.* .............................. 9,574
553 Actel Corp.* ............................ 20,565
4,046 Advanced Micro Devices, Inc.* ........... 291,059
1,066 Alliance Semiconductor Corp.* ........... 21,387
1,042 Alpha Industries, Inc.* ................. 35,493
5,228 Altera Corp.* ........................... 513,324
780 ANADIGICS, Inc.* ........................ 20,621
9,345 Analog Devices, Inc.* ................... 624,947
3,207 Applied Micro Circuits Corp.* ........... 478,645

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
5,768 Atmel Corp.* ............................ $ 172,680
5,683 Broadcom Corp. (Class A)* ............... 1,274,413
1,458 Burr-Brown Corp.* ....................... 110,626
1,024 C-Cube Semiconductor* ................... 20,416
1,655 Cirrus Logic, Inc.* ..................... 32,066
5,628 Conexant Systems, Inc.* ................. 180,096
3,155 Cypress Semiconductor Corp.* ............ 117,721
1,514 Dallas Semiconductor Corp. .............. 63,399
480 Elantec Semiconductor, Inc.* ............ 34,950
977 ESS Technology, Inc.* ................... 16,487
488 Exar Corp.* ............................. 45,293
2,077 Fairchild Semiconductor Corp.
(Class A)* ............................ 73,474
929 General Semiconductor, Inc.* ............ 13,935
1,735 GlobeSpan, Inc.* ........................ 195,947
223 hi/fn, Inc.* ............................ 10,802
2,451 Integrated Device Technology, Inc.*...... 129,903
940 Integrated Silicon Solution, Inc.* ...... 19,740
176,904 Intel Corp. ............................. 11,808,342
1,601 International Rectifier Corp.* .......... 88,555
1,098 Intersil Holding Corp. (Class H)* ....... 62,929
1,256 Lattice Semiconductor Corp.* ............ 68,923
8,153 Linear Technology Corp. ................. 450,453
8,108 LSI Logic Corp.* ........................ 274,659
7,465 Maxim Integrated Products, Inc.* ........ 493,157
2,162 Micrel, Inc.* ........................... 108,235
2,007 Microchip Technology Inc.* .............. 139,361
14,654 Micron Technology, Inc.* ................ 1,194,301
786 Microsemi Corp.* ........................ 26,036
642 MIPS Technologies, Inc.* ................ 26,322
765 MIPS Technologies, Inc.
(Class A)* ............................ 35,668
1,502 MRV Communications, Inc.* ............... 86,928
4,663 National Semiconductor Corp.* ........... 168,742
1,131 NeoMagic Corp.* ......................... 3,358
224 Pericom Semiconductor Corp.* ............ 11,872
654 Quantum Effect Devices, Inc.* ........... 48,682
1,448 QuickLogic Corporation* ................. 29,051
1,920 S-3* .................................... 19,680
2,022 SDL, Inc.* .............................. 701,760
854 Semtech Corp.* .......................... 68,480
650 Silicon Image, Inc.* .................... 34,450
750 Silicon Storage Technology, Inc.* ....... 47,391
783 Siliconix, Inc.* ........................ 42,527
1,229 Standard Microsystems Corp.* ............ 21,661
619 Supertex, Inc.* ......................... 24,296
1,015 TelCom Semiconductor, Inc.* ............. 22,964
43,220 Texas Instruments, Inc. ................. 2,536,474

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
1,022 TranSwitch Corp.* ..................... $ 81,632
1,984 TriQuint Semiconductor, Inc.* ......... 76,012
4,926 Vitesse Semiconductor Corp.* .......... 293,713
472 Xicor, Inc.* .......................... 4,071
8,421 Xilinx, Inc.* ......................... 632,101
331 Zoran Corp.* .......................... 14,605
------------
24,274,954
------------
Services to the Health Industry (0.2%)
462 Accredo Health, Inc.* ................. 15,246
378 Advance Paradigm, Inc.* ............... 9,332
404 Albany Molecular Research, Inc.* ...... 22,372
458 Allscripts, Inc.* ..................... 9,790
1,869 CareInsite, Inc.* ..................... 30,839
848 Cerner Corp.* ......................... 29,680
1,393 Covance, Inc.* ........................ 15,845
540 Data Critical Corp.* .................. 5,603
581 DVI, Inc.* ............................ 10,095
380 eBenX, Inc.* .......................... 8,408
834 Eclipsys Corp.* ....................... 9,383
1,135 Eltrax Systems, Inc.* ................. 4,540
1,010 Express Scripts, Inc. (Class A)* ...... 64,893
940 First Consulting Group, Inc.* ......... 6,756
4,771 Healtheon/WebMD Corp.* ................ 63,514
639 HealthExtras, Inc.* ................... 2,556
663 IDX Systems Corp.* .................... 9,986
303 IMPATH Inc.* .......................... 18,123
8,070 IMS Health Inc. ....................... 145,764
486 InterDent, Inc.* ...................... 1,655
376 Laboratory Corp. of America
Holdings* ........................... 36,942
995 Medical Manager Corp.* ................ 32,151
1,104 MedicaLogic Inc.* ..................... 6,831
941 MedQuist Inc.* ........................ 20,232
453 Morrison Management Specialists,
Inc. ................................ 13,052
2,393 Omnicare, Inc. ........................ 23,182
1,074 PAREXEL International Corp.* .......... 10,673
937 Per-Se Technologies, Inc.* ............ 11,127
684 Pharmaceutical Product
Development, Inc.* .................. 14,621
917 Pharmacopeia, Inc.* ................... 36,737
370 Professional Detailing, Inc.* ......... 13,690
756 ProxyMed, Inc.* ....................... 1,181
582 QuadraMed Corp.* ...................... 1,382
1,164 Quest Diagnostics Inc.* ............... 117,491
2,900 Quintiles Transnational Corp.* ........ 45,494

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
340 Stericycle, Inc.* ..................... $ 8,500
1,558 Sunquest Information Systems,
Inc.* ............................... 16,846
500 TriZetto Group, Inc. (The)* ........... 6,438
1,523 US Oncology, Inc.* .................... 7,615
1,607 Ventiv Health, Inc.* .................. 20,891
------------
929,456
------------
Shoe Manufacturing (0.1%)
515 Brown Shoe Co., Inc. .................. 7,307
473 Global Sports, Inc.* .................. 3,548
281 K-Swiss, Inc. (Class A) ............... 4,777
532 Kenneth Cole Productions, Inc.
(Class A)* .......................... 22,976
7,234 Nike, Inc. (Class B) .................. 316,488
1,475 Reebok International Ltd.* ............ 24,891
3,897 Stride Rite Corp. ..................... 23,138
1,096 Timberland Co.* ....................... 35,963
855 Wolverine World Wide, Inc. ............ 9,031
------------
448,119
------------
Smaller Banks (0.5%)
1,135 1st Source Corp. ...................... 19,295
802 Alabama National BanCorporation........ 15,338
611 Amcore Financial, Inc. ................ 9,814
389 Area Bancshares Corp. ................. 7,975
1,775 Associated Banc-Corp. ................. 40,492
296 BancFirst Corp. ....................... 9,694
426 BancFirst Ohio Corp. .................. 6,017
1,364 BancorpSouth, Inc. .................... 20,716
425 Bank of Granite Corp. ................. 9,669
3,492 Banknorth Group, Inc. ................. 53,471
1,287 BOK Financial Corp.* .................. 23,568
767 Brenton Banks, Inc. ................... 9,300
470 BT Financial Corp. .................... 8,666
392 Capital City Bank Group, Inc. ......... 7,399
264 Cathay Bancorp, Inc. .................. 12,243
924 Centennial Bancorp* ................... 7,161
994 Centura Banks, Inc. ................... 31,622
406 Century South Banks, Inc. ............. 7,181
318 Chemical Financial Corp. .............. 7,433
743 Chittenden Corp. ...................... 19,272
1,246 Citizens Banking Corp. ................ 24,920
1,543 City Holding Co. ...................... 10,994
1,248 City National Corp. ................... 45,786
2,899 Colonial BancGroup, Inc. (The) ........ 31,164
772 Commerce Bancorp, Inc. ................ 40,096
375 Community Bank System, Inc. ........... 8,297
1,309 Community First Bankshares, Inc. ...... 21,926

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
481 Community Trust Bancorp, Inc. ............ $ 7,335
362 Corus Bankshares, Inc. ................... 10,589
418 CPB, Inc. ................................ 10,450
1,340 Cullen/Frost Bankers, Inc. ............... 38,106
447 CVB Financial Corp. ...................... 7,040
906 East West Bancorp, Inc. .................. 14,496
710 F & M Bancorp ............................ 14,466
510 F & M National Corp. ..................... 12,304
255 Farmers Capital Bank Corp. ............... 7,857
533 FCNB Corp. ............................... 9,294
517 First Bancorp ............................ 9,920
482 First Busey Corp. ........................ 9,640
1,729 First Charter Corp. ...................... 25,179
1,304 First Commonwealth Financial
Corp. .................................. 12,633
1,117 First Financial Bancorp .................. 19,268
289 First Financial Bankshares, Inc. ......... 8,381
269 First Financial Corp. .................... 7,801
413 First Merchants Corp. .................... 8,776
1,077 First Midwest Bancorp, Inc. .............. 28,675
1,181 First Republic Bank* ..................... 25,687
643 First United Bancshares, Inc. ............ 10,851
2,266 FirstMerit Corp. ......................... 47,303
1,431 Flagstar Bancorp ......................... 16,546
384 FNB Corp. ................................ 7,824
461 Frontier Financial Corp. ................. 8,125
1,819 Fulton Financial Corp. ................... 39,109
492 GBC Bancorp .............................. 15,990
458 German American Bancorp .................. 6,527
399 Gold Banc Corp., Inc. .................... 1,945
467 Greater Bay Bancorp ...................... 25,130
1,371 Hamilton Bancorp, Inc.* .................. 24,678
239 Hancock Holding Co. ...................... 7,768
276 Harleysville National Corp. .............. 8,625
1,323 Hudson United Bancorp .................... 31,587
1,132 Imperial Bancorp* ........................ 19,244
723 Independent Bank Corp. ................... 8,360
266 Independent Bank Corp. ................... 4,073
394 Integra Bank Corp. ....................... 6,846
513 International Bancshares Corp. ........... 16,160
1,483 Irwin Financial Corp. .................... 20,855
1,277 Keystone Financial, Inc. ................. 29,052
494 Merchants New York Bancorp, Inc........... 8,460
315 Mid-State Bancshares ..................... 8,899
397 MidAmerica Bancorp ....................... 9,776
538 Midwest Banc Holdings, Inc. .............. 7,196
323 Mississippi Valley Bancshares, Inc. ...... 7,752
203 National City Bancorporation ............. 2,969

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
5,436 National Commerce Bancorporation.......... $ 95,130
433 National Penn Bancshares, Inc. ........... 9,310
1,128 NBT Bancorp, Inc. ........................ 12,408
4,620 North Fork Bancorporation, Inc. .......... 71,321
1,568 Old National Bancorp ..................... 41,650
294 Omega Financial Corp. .................... 8,214
585 Pacific Capital Bancorp .................. 14,771
279 Park National Corp. ...................... 24,657
377 Peoples Bancorp Inc. ..................... 5,467
627 Premier National Bancorp, Inc. ........... 12,618
1,617 Provident Bankshares Corp. ............... 21,830
1,225 Provident Financial Group, Inc. .......... 30,319
976 Republic Bancorp Inc. .................... 7,930
995 Republic Bancshares, Inc.* ............... 11,318
2,157 Riggs National Corp. ..................... 27,502
585 S & T Bancorp, Inc. ...................... 11,188
1,101 Sandy Spring Bancorp, Inc. ............... 24,084
917 Santander BanCorp. ....................... 11,119
940 Seacoast Financial Services Corp. ........ 8,989
772 Second Bancorp, Inc. ..................... 11,966
470 Shoreline Financial Corp. ................ 5,875
1,124 Silicon Valley Bancshares* ............... 49,245
308 Simmons First National Corp.
(Class A) .............................. 6,545
1,970 Sky Financial Group, Inc. ................ 35,460
537 Southwest Bancorp, Inc.* ................. 14,063
813 Sterling Bancshares, Inc. ................ 10,976
367 Sterling Financial Corp. ................. 5,551
798 Susquehanna Bancshares, Inc. ............. 11,870
380 Texas Regional Bancshares, Inc.
(Class A) .............................. 9,049
345 Three Rivers Bancorp, Inc. ............... 2,825
448 Trust Co. Of New Jersey (The) ............ 7,392
1,278 Trustco Bank Corp. of New York ........... 15,496
1,798 Trustmark Corp. .......................... 35,286
986 UCBH Holdings, Inc. ...................... 28,286
1,120 United Bankshares, Inc. .................. 21,210
487 United National Bancorp .................. 8,279
766 USB Holding Co., Inc. .................... 10,150
690 USBANCORP, Inc. .......................... 3,407
1,601 Valley National Bancorp .................. 39,124
742 Washington Trust Bancorp, Inc. ........... 10,759
376 WesBanco, Inc. ........................... 8,813
712 West Coast Bancorp ....................... 6,542
986 Westamerica Bancorporation ............... 27,362
592 Whitney Holding Corp. .................... 22,015

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
853 Wilmington Trust Corp. ................... $ 37,372
2,241 Zions Bancorporation ..................... 98,044
------------
2,191,843
------------
Specialty Chemicals (0.3%)
247 AEP Industries, Inc.* .................... 6,576
6,010 Air Products & Chemicals, Inc. ........... 200,584
1,675 Airgas, Inc.* ............................ 9,003
1,225 Albemarle Corp. .......................... 30,242
583 Arch Chemicals, Inc. ..................... 11,660
1,758 Cabot Corp. .............................. 56,256
1,380 Calgon Carbon Corp. ...................... 10,523
645 Cambrex Corp. ............................ 29,146
784 ChemFirst Inc. ........................... 19,012
1,294 ChiRex, Inc.* ............................ 39,871
3,001 Crompton Corp. ........................... 29,447
1,065 Cytec Industries, Inc.* .................. 33,281
604 Dexter Corp. ............................. 32,578
3,298 Engelhard Corp. .......................... 59,570
2,314 Ethyl Corp. .............................. 4,628
772 FMC Corp.* ............................... 46,513
566 Geon Co. (The) ........................... 9,304
739 Georgia Gulf Corp. ....................... 12,055
1,881 Grace (W. R.) & Co.* ..................... 18,575
1,451 Great Lakes Chemical Corp. ............... 42,623
872 Hanna (M.A.) Co. ......................... 6,976
1,592 International Specialty Products,
Inc. ................................... 9,353
1,378 Lubrizol Corp. (The) ..................... 29,455
3,082 Lyondell Chemical Co. .................... 43,148
1,739 Millennium Chemicals Inc. ................ 26,955
210 NCH Corp. ................................ 8,006
1,233 NL Industries, Inc. ...................... 22,811
1,075 Olin Corp. ............................... 16,864
623 OM Group, Inc. ........................... 29,554
4,166 Praxair, Inc. ............................ 164,817
555 Schulman (A.), Inc. ...................... 6,972
2,644 Sigma-Aldrich Corp. ...................... 72,049
624 Uniroyal Technology Corp.* ............... 9,867
------------
1,148,274
------------
Specialty Foods/Candy (0.2%)
362 American Italian Pasta Co.
(Class A)* ............................. 7,150
410 Bush Boake Allen, Inc.* .................. 17,348
5,088 Chiquita Brands International, Inc. ...... 19,080
548 Dreyer's Grand Ice Cream, Inc. ........... 13,049
961 Earthgrains Co. .......................... 19,220
49 Farmer Brothers Co. ...................... 8,624

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
2,531 Flowers Industries, Inc. ................. $ 53,942
2,964 Fresh Del Monte Produce, Inc.* ........... 18,525
689 Gum Tech International, Inc.* ............ 8,957
1,354 Hain Celestial Group, Inc.* .............. 36,050
3,626 Hershey Foods Corp. ...................... 167,703
1,551 Imperial Sugar Co. ....................... 2,520
1,669 International Multifoods Corp. ........... 29,103
1,673 Interstate Bakeries Corp. ................ 32,833
427 J & J Snack Foods* ....................... 6,352
2,202 Keebler Foods Co. ........................ 97,163
783 Lance, Inc. .............................. 7,634
567 Mannatech, Inc.* ......................... 815
1,855 McCormick & Co., Inc. .................... 54,375
1,733 NBTY, Inc.* .............................. 11,048
925 Neose Technologies, Inc.* ................ 35,208
546 Ralcorp Holdings, Inc.* .................. 7,542
501 Riviana Foods, Inc. ...................... 8,141
520 Smucker (J.M.) Co. (Class A) ............. 9,360
787 Suiza Foods Corp.* ....................... 36,497
810 Tootsie Roll Industries, Inc. ............ 30,628
1,086 Twinlab Corp.* ........................... 6,109
1,200 Universal Foods Corp.* ................... 23,400
1,331 Vlasic Foods International Inc.* ......... 2,163
3,034 Wrigley (Wm.) Jr. Co. (Class A) .......... 230,584
------------
1,001,123
------------
Specialty Insurers (0.2%)
1,832 Ambac Financial Group, Inc. .............. 118,050
786 CNA Surety Corp. ......................... 8,548
821 Enhance Financial Services Group
Inc. ................................... 12,982
2,155 Fidelity National Financial, Inc. ........ 38,117
1,710 First American Financial Corp. ........... 26,612
1,101 FPIC Insurance Group, Inc.* .............. 13,143
1,059 Frontier Insurance Group, Inc.* .......... 496
453 LandAmerica Financial Group, Inc. 10,985
200 Markel Corp.* ............................ 30,925
2,610 MBIA, Inc. ............................... 145,344
430 Medical Assurance, Inc.* ................. 5,160
2,770 MGIC Investment Corp. .................... 157,371
1,875 MIIX Group, Inc. ......................... 21,914
1,610 PICO Holdings, Inc.* ..................... 20,930
1,171 PMI Group, Inc. .......................... 73,334
569 Pre-Paid Legal Services, Inc.* ........... 17,390
901 Professionals Group, Inc.* ............... 20,047
974 Radian Group, Inc. ....................... 59,292
308 SCPIE Holdings Inc. ...................... 6,372

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
588 Stewart Information Services Corp.* $ 7,791
551 Triad Guaranty, Inc.* .................. 13,362
------------
808,165
------------
Specialty Steels (0.0%)
508 Carpenter Technology Corp. ............. 15,558
864 NS Group, Inc.* ........................ 12,420
2,286 Nucor Corp. ............................ 86,297
874 Oregon Steel Mills, Inc. ............... 2,895
1,110 Quanex Corp. ........................... 19,980
------------
137,150
------------
Steel/Iron Ore (0.1%)
2,909 AK Steel Holding Corp. ................. 29,272
3,129 Bethlehem Steel Corp.* ................. 14,472
688 Birmingham Steel Corp.* ................ 2,193
288 Cleveland-Cliffs, Inc. ................. 7,146
624 Lone Star Technologies, Inc.* .......... 25,428
7,354 LTV Corp. (The) ........................ 17,925
4,559 Metal Management, Inc.* ................ 5,271
1,331 National Steel Corp. (Class B)* ........ 5,574
663 Reliance Steel & Aluminum Co. .......... 13,923
445 Ryerson Tull, Inc. ..................... 3,922
1,144 Steel Dynamics, Inc.* .................. 12,942
2,317 USX-U.S. Steel Group ................... 41,561
3,182 Weirton Steel Corp.* ................... 10,540
2,248 Worthington Industries, Inc. ........... 23,745
------------
213,914
------------
Telecommunication Equipment (3.5%)
626 Active Voice Corp.* .................... 5,634
981 Adaptive Broadband Corp.* .............. 35,377
17,822 ADC Telecommunications, Inc.* .......... 747,410
1,035 Adtran, Inc.* .......................... 62,294
2,073 Advanced Fibre Communications,
Inc.* ................................ 88,880
561 Airnet Communications Corp.* ........... 15,568
775 Alcatel (ADR) (France) ................. 56,672
977 Allen Telecom Inc.* .................... 17,098
3,867 American Tower Corp. (Class A)* ........ 165,798
2,070 Andrew Corp.* .......................... 58,348
986 Antec Corp.* ........................... 37,283
572 Audiovox Corp. (Class A)* .............. 8,866
180 Avanex Corp.* .......................... 22,849
765 AVT Corp.* ............................. 4,208
840 C-COR.net Corp.* ....................... 22,208
608 Carrier Access Corp.* .................. 36,404
583 Catapult Communications Corp.* ......... 7,761
446 Celeritec, Inc.* ....................... 15,833
842 Centillium Communications, Inc.* ....... 68,294

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
3,730 CIENA Corp.* ........................... $ 530,126
684 Com21, Inc.* ........................... 11,970
1,331 CommScope, Inc.* ....................... 44,505
4,002 Comverse Technology, Inc.* ............. 351,176
1,310 Copper Mountain Networks, Inc.* ........ 103,306
7,283 Corning Inc. ........................... 1,703,767
303 Davox Corp.* ........................... 2,547
1,319 Digital Lightwave, Inc.* ............... 115,330
1,825 Digital Microwave Corp.* ............... 49,617
738 Ditech Communications Corp.* ........... 35,332
2,838 eLOT, Inc.* ............................ 5,410
3,069 Glenayre Technologies, Inc.* ........... 30,882
2,728 Global Crossing Ltd. (Bermuda)* ........ 66,325
612 Globecomm Systems Inc.* ................ 7,115
1,496 Harmonic, Inc.* ........................ 35,250
1,898 Harris Corp. ........................... 65,007
2,022 InteliData Technologies Corp.* ......... 14,660
654 Inter-Tel, Inc. ........................ 8,502
1,749 InterDigital Communications Corp.*...... 31,482
603 Interspeed, Inc.* ...................... 7,990
827 L-3 Communications Holdings,
Inc.* ................................ 48,690
356 Latitude Communications, Inc.* ......... 1,736
86,007 Lucent Technologies Inc. ............... 3,762,806
451 MCK Communications, Inc.* .............. 8,174
966 Metawave Communications Corp.* ......... 26,142
802 Metricom, Inc.* ........................ 28,220
56,844 Motorola, Inc. ......................... 1,879,405
433 Natural Microsystems Corp.* ............ 48,252
1,315 Netro Corp.* ........................... 71,092
1,529 New Focus, Inc.* ....................... 153,473
2,168 Next Level Communications, Inc.* ....... 194,544
1,554 Nortel Networks Corp. (Canada) ......... 115,579
411 NorthEast Optic Network, Inc.* ......... 17,288
946 Optical Cable Corp.* ................... 25,187
280 Osicom Technologies, Inc.* ............. 15,960
1,817 P-COM, Inc.* ........................... 11,016
777 Paradyne Networks, Inc.* ............... 22,145
2,350 PictureTel Corp.* ...................... 9,473
424 Plantronics, Inc.* ..................... 58,512
860 Polycom, Inc.* ......................... 81,579
1,585 Powerwave Technologies, Inc.* .......... 54,980
19,572 QUALCOMM Inc.* ......................... 1,270,957
2,092 RF Micro Devices, Inc.* ................ 157,685
896 Science Dynamics Corp.* ................ 7,392
4,144 Scientific - Atlanta, Inc. ............. 319,088
1,005 Somera Communications, Inc.* ........... 11,558
1,063 SpectraLink Corp.* ..................... 12,490

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
6,409 Sycamore Networks, Inc.* ................... $ 790,310
1,508 Tekelec* ................................... 59,189
385 Telaxis Communications Corp.* .............. 7,339
10,815 Tellabs, Inc.* ............................. 702,975
663 Telular Corp.* ............................. 9,199
1,631 Terayon Communication Systems,
Inc.* .................................... 83,181
402 Tollgrade Communications, Inc.* ............ 42,204
170 Turnstone Systems, Inc.* ................... 21,728
328 U.S. Wireless Corp.* ....................... 5,699
188 ViaSat, Inc.* .............................. 9,306
1,222 Virata Corp.* .............................. 78,208
659 Visual Networks, Inc.* ..................... 7,867
2,322 Wavo Corp.* ................................ 1,596
1,555 Westell Technologies, Inc.
(Class A)* ............................... 37,417
1,080 World Access, Inc.* ........................ 9,720
------------
14,976,445
------------
Textiles (0.0%)
2,149 Burlington Industries, Inc.* ............... 3,492
1,037 Guilford Mills, Inc. ....................... 3,500
724 Polymer Group, Inc. ........................ 5,566
419 Springs Industries, Inc. (Class A) ......... 13,513
1,413 Unifi, Inc.* ............................... 15,985
786 Wellman, Inc. .............................. 11,495
------------
53,551
------------
Tobacco (0.4%)
62,012 Philip Morris Companies, Inc. .............. 1,565,803
2,873 R. J. Nabisco Tobacco Holdings,
Inc. ..................................... 81,521
706 Schweitzer-Mauduit International,
Inc. ..................................... 9,355
739 Universal Corp. ............................ 16,397
4,484 UST, Inc. .................................. 65,018
539 Vector Group Ltd. .......................... 8,355
------------
1,746,449
------------
Tools/Hardware (0.1%)
2,276 Black & Decker Corp. ....................... 84,639
602 Briggs & Stratton Corp. .................... 21,183
2,180 Metromedia International Group,
Inc.* .................................... 9,265
1,469 Snap-On, Inc. .............................. 44,345
2,344 Stanley Works .............................. 61,384
254 Toro Co. (The) ............................. 7,652
------------
228,468
------------

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
Trucking (0.1%)
1,741 American Freightways Corp.* ................ $ 30,195
745 Arkansas Best Corp.* ....................... 10,570
696 Arnold Industries, Inc. .................... 9,527
525 Consolidated Freightways Corp.* ............ 2,313
291 Covenant Transport, Inc.
(Class A)* ............................... 2,328
613 Forward Air Corp.* ......................... 27,662
648 Heartland Express, Inc.* ................... 11,583
723 Hunt (J.B.) Tansport Services, Inc. ........ 10,709
1,259 Knight Transportation, Inc.* ............... 22,347
259 Landstar Systems, Inc.* .................... 14,099
372 M.S. Carriers, Inc.* ....................... 7,463
450 Roadway Express, Inc. ...................... 10,688
1,686 Swift Transportation Co., Inc.* ............ 27,292
1,041 Transport Corporation of America,
Inc.* .................................... 6,246
632 USFreightways Corp. ........................ 17,538
1,133 Werner Enterprises, Inc. ................... 16,429
625 Yellow Corp.* .............................. 10,039
------------
237,028
------------
Unregulated Power Generation (0.0%)
1,180 Ogden Corp.* ............................... 14,529
1,131 Plug Power Inc.* ........................... 56,621
------------
71,150
------------
Water Supply (0.0%)
300 American States Water Co. .................. 9,038
2,540 American Water Works Co., Inc. ............. 61,595
3,072 Azurix Corp.* .............................. 26,112
341 California Water Service Group ............. 8,141
264 Connecticut Water Service, Inc. ............ 8,184
199 E'Town Corp. ............................... 13,321
1,074 Philadelphia Suburban Corp. ................ 23,829
100 SJW Corp. .................................. 12,050
------------
162,270
------------
Wholesale Distributors (0.1%)
198 Actrade International, Ltd.* ............... 4,257
2,162 Anicom, Inc.* .............................. 8,310
616 Applied Industries Technologies,
Inc. ..................................... 9,933
2,265 Aviation Sales Co.* ........................ 13,307
775 Daisytek International Corp.* .............. 5,134
667 eMerge Interactive, Inc.
(Class A)* ............................... 15,258
1,010 Fisher Scientific International, Inc.*...... 25,124
2,447 Grainger (W.W.), Inc. ...................... 77,692

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
PORTFOLIO OF INVESTMENTS July 31, 2000, continued

NUMBER OF
SHARES VALUE
-------------------------------------------------------------------------------
2,094 Handleman Co.* ............................ $ 27,353
438 Hughes Supply, Inc. ....................... 8,295
5,653 Lanier Worldwide, Inc.* ................... 3,886
422 Lawson Products, Inc. ..................... 10,867
1,122 MSC Industrial Direct Co., Inc.* .......... 20,406
632 School Specialty, Inc.* ................... 10,942
622 SCP Pool Corp.* ........................... 16,376
891 United Stationers, Inc.* .................. 25,954
2,743 WESCO International, Inc.* ................ 25,373
------------
308,467
------------
TOTAL COMMON AND PREFERRED
STOCKS AND RIGHTS
(Cost $376,990,678)........................ 412,077,347
------------

PRINCIPAL
AMOUNT IN
THOUSANDS
-----------
SHORT-TERM INVESTMENT (a) (3.4%)
U.S. GOVERNMENT AGENCY
$ 14,350 Federal Home Loan Banks
6.43% due 08/01/00
(Cost $14,350,000) ..................... 14,350,000
------------

TOTAL INVESTMENTS
(Cost $391,340,678) (b).................... 99.8% 426,427,347
OTHER ASSETS IN EXCESS OF
LIABILITIES ............................... 0.2 895,959
----- ------------
NET ASSETS ................................ 100.0% $427,323,306
===== ============

FUTURES CONTRACTS OPEN AT JULY 31, 2000:

DESCRIPTION, UNDERLYING
NUMBER OF DELIVERY MONTH, FACE AMOUNT UNREALIZED
CONTRACTS AND YEAR AT VALUE DEPRECIATION
-------------------------------------------------------------------------------
4 Russell 2000 Index
September/2000 $ 1,012,000 $ (42,132)
35 S&P 500 Index
September/2000 12,590,375 (478,730)
---------
Total unrealized depreciation ........ $(520,862)
=========

--------------------------------
ADR American Depository Receipt.
* Non-income producing security.

** Some or all of these securities are segregated in connection with open
futures contracts.

(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 $77,647,102 and the aggregate gross unrealized depreciation
is $42,560,433, resulting in net unrealized appreciation of $35,086,669.

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
July 31, 2000

ASSETS:
Investments in securities, at value
(cost $391,340,678) ......................................... $426,427,347
Cash .......................................................... 46,538
Receivable for:
Shares of beneficial interest sold ......................... 925,519
Investments sold ........................................... 384,505
Dividends .................................................. 232,815
Variation margin ........................................... 83,375
Deferred offering costs ....................................... 25,150
Prepaid expenses and other assets ............................. 42,249
------------
TOTAL ASSETS ............................................... 428,167,498
------------
LIABILITIES:
Payable for:
Plan of distribution fee ................................... 353,928
Shares of beneficial interest repurchased .................. 182,156
Investment management fee .................................. 112,614
Accrued expenses and other payables ........................... 195,494
------------
TOTAL LIABILITIES .......................................... 844,192
------------
NET ASSETS ................................................. $427,323,306
============
COMPOSITION OF NET ASSETS:

Paid-in-capital ............................................... $392,651,779
Net unrealized appreciation ................................... 34,565,807
Net realized gain ............................................. 105,720
------------
NET ASSETS ................................................. $427,323,306
============
CLASS A SHARES:
Net Assets .................................................... $22,894,852
Shares Outstanding (unlimited authorized, $.01 par value) ..... 2,011,401
NET ASSET VALUE PER SHARE .................................. $11.38
======
MAXIMUM OFFERING PRICE PER SHARE,
(net asset value plus 5.54% of net asset value) .......... $12.01
======
CLASS B SHARES:
Net Assets .................................................... $356,898,860
Shares Outstanding (unlimited authorized, $.01 par value) ..... 31,554,587
NET ASSET VALUE PER SHARE .................................. $11.31
======
CLASS C SHARES:
Net Assets .................................................... $43,901,407
Shares Outstanding (unlimited authorized, $.01 par value) ..... 3,881,492
NET ASSET VALUE PER SHARE .................................. $11.31
======
CLASS D SHARES:
Net Assets .................................................... $3,628,187
Shares Outstanding (unlimited authorized, $.01 par value) ..... 318,056
NET ASSET VALUE PER SHARE .................................. $11.41
======

See Notes to Financial Statements

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
FINANCIAL STATEMENTS, continued

STATEMENT OF OPERATIONS
For the period September 28, 1999* through July 31, 2000

NET INVESTMENT LOSS:

INCOME
Dividends ......................................... $ 3,237,221
Interest .......................................... 1,003,753
-----------
TOTAL INCOME ................................... 4,240,974
-----------
EXPENSES
Plan of distribution fee (Class A shares) ......... 40,896
Plan of distribution fee (Class B shares) ......... 2,693,569
Plan of distribution fee (Class C shares) ......... 322,830
Investment management fee ......................... 1,278,642
Transfer agent fees and expenses .................. 319,167
Offering costs .................................... 133,552
Registration fees ................................. 111,057
Shareholder reports and notices ................... 78,643
Custodian fees .................................... 76,909
Professional fees ................................. 54,054
Trustees' fees and expenses ....................... 10,823
Other ............................................. 9,311
-----------
TOTAL EXPENSES ................................. 5,129,453

Less: amounts waived/reimbursed ................... (473,856)
-----------
NET EXPENSES ................................... 4,655,597
-----------
NET INVESTMENT LOSS ............................ (414,623)
-----------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain on:

Investments .................................... 240,409
Futures contracts .............................. 484,162
-----------
NET GAIN ....................................... 724,571
-----------
Net unrealized appreciation/depreciation on:

Investments .................................... 35,086,669
Futures contracts .............................. (520,862)
-----------
NET APPRECIATION ............................... 34,565,807
-----------
NET GAIN ....................................... 35,290,378
-----------
NET INCREASE ...................................... $34,875,755
===========

---------------------
* Commencement of operations.

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
FINANCIAL STATEMENTS, continued

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
FOR THE PERIOD
SEPTEMBER 28, 1999*
THROUGH
JULY 31, 2000
--------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
<S> <C>
Net investment loss ..................................................... $ (414,623)
Net realized gain ....................................................... 724,571
Net unrealized appreciation ............................................. 34,565,807
------------
NET INCREASE ......................................................... 34,875,755
------------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED GAIN:
Class A shares .......................................................... (29,372)
Class B shares .......................................................... (509,664)
Class C shares .......................................................... (58,809)
Class D shares .......................................................... (263)
------------
TOTAL DISTRIBUTIONS .................................................. (598,108)
------------
Net increase from transactions in shares of beneficial interest ......... 392,945,659
------------
NET INCREASE ......................................................... 427,223,306
NET ASSETS:
Beginning of period ..................................................... 100,000
------------
END OF PERIOD ........................................................ $427,323,306
============
</TABLE>

---------------------
* Commencement of operations.

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
NOTES TO FINANCIAL STATEMENTS July 31, 2000

1. ORGANIZATION AND ACCOUNTING POLICIES

Morgan Stanley Dean Witter Total Market Index 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 to provide investment results that, before expenses, correspond to
the total return of the Wilshire 5000 Equity Index (the "Index"). The Fund seeks
to achieve its objective by investing at least 80% of its total assets in stocks
included in the Index. The Fund was organized as a Massachusetts business trust
on March 11, 1999 and had no operations other than those relating to
organizational matters and the issuance of 2,500 shares of beneficial interest
by each class for $25,000 of each class to Morgan Stanley Dean Witter Advisors
Inc. (the "Investment Manager") to effect the Fund's initial capitalization. The
Fund commenced operations on September 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, 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; (3) when market quotations are not readily available, including
circumstances under which it is determined by Investment Manager that sale or
bid prices are not reflective of a security's market value, portfolio securities
are valued at their fair value as determined in good faith under procedures
established by and under the general supervision of the Trustees (valuation of
debt securities for which market quotations are not readily available may be
based upon current market prices of securities which are comparable in coupon,
rating and maturity or an appropriate matrix utilizing similar

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
NOTES TO FINANCIAL STATEMENTS July 31, 2000, continued

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.
Discounts are accreted over the life of the respective securities. Interest
income is accrued daily.

C. MULTIPLE CLASS ALLOCATIONS -- Investment income, expenses (other than
distribution fees), and realized and unrealized gains and losses are allocated
to each class of shares based upon the relative net asset value on the date such
items are recognized. Distribution fees are charged directly to the respective
class.

D. FUTURES CONTRACTS -- A futures contract is an agreement between two parties
to buy and sell financial instruments at a set price on a future date. Upon
entering into such a contract, the Fund is required to pledge to the broker
cash, U.S. Government securities or other liquid portfolio securities equal to
the minimum initial margin requirements of the applicable futures exchange.
Pursuant to the contract, the Fund agrees to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in the value of the contract
which is known as variation margin. Such receipts or payments are recorded by
the Fund as unrealized gains or losses. Upon closing of the contract, the Fund
realizes a gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was closed.

E. 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.

F. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to its shareholders on the ex-dividend date. The amount of
dividends and distributions from net investment income and net realized capital
gains are determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for financial reporting purposes but not for tax purposes are reported as
dividends in excess of net investment income or distributions in excess of net
realized

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
NOTES TO FINANCIAL STATEMENTS July 31, 2000, continued

capital gains. To the extent they exceed net investment income and net realized
capital gains for tax purposes, they are reported as distributions of
paid-in-capital.

G. OFFERING COSTS -- The Investment Manager incurred offering costs on behalf of
the Fund in the amount of approximately $159,000, which will be reimbursed by
the Fund for the full amount thereof. Such expenses were deferred and are being
amortized on the straight-line method over a period of approximately one year or
less from the commencement of operations.

2. INVESTMENT MANAGEMENT AGREEMENT

Pursuant to an Investment Management Agreement, the Fund pays the Investment
Manager a management fee, accrued daily and payable monthly, by applying the
annual rate of 0.40% to the net assets of the Fund determined as of the close of
each business day.

The Investment Manager has agreed to assume all operating expenses (except for
Plan of Distribution fees) and to waive the compensation provided for in its
Investment Management Agreement to the extent that such expenses and
compensation on an annualized basis exceed 0.50% of the daily net assets of the
Fund.

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. 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
$15,462,992 at July 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

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
NOTES TO FINANCIAL STATEMENTS July 31, 2000, continued

not be reimbursed by the Fund through payments in any subsequent year, except
that expenses representing a gross sales credit to Morgan Stanley Dean Witter
Financial Advisors or other selected broker-dealer representatives may be
reimbursed in the subsequent calendar year. For the period ended July 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 period ended July 31, 2000,
it received contingent deferred sales charges from certain redemptions of the
Fund's Class A shares, Class B shares and Class C shares of $3,202, $727,244 and
$45,054, respectively and received $118,994 in front-end sales charges from
sales of the Fund's Class A shares. The respective shareholders pay such charges
which are not an expense of the Fund.

4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES

The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the period ended July 31, 2000 aggregated
$383,073,932 and $6,323,663, respectively. Included in the aforementioned are
purchases of common stock of Morgan Stanley Dean Witter & Co., an affiliate of
the Investment Manager and Distributor, of $1,516,251.

Morgan Stanley Dean Witter Trust FSB, an affiliate of Investment Manager and
Distributor, is the Fund's transfer agent.

5. FEDERAL INCOME TAX STATUS

Capital losses incurred after October 31 ("post-October losses") within the
taxable year are deemed to arise on the first business day of the Fund's next
taxable year. The Fund incurred and will elect to defer net capital losses of
approximately $415,000 during fiscal 2000.

As of July 31, 2000, the Fund had temporary book/tax differences primarily
attributable to post-October losses, and the mark-to-market of open futures
contracts and permanent book/tax differences primarily attributable to a net
operating loss and nondeductible expenses. To reflect reclassifications arising
from the permanent differences, paid-in-capital was charged $393,880, net
realized loss was charged $20,743 and net investment loss was credited $414,623.

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
NOTES TO FINANCIAL STATEMENTS July 31, 2000, continued

6. SHARES OF BENEFICIAL INTEREST

Transactions in shares of beneficial interest were as follows:

FOR THE PERIOD
SEPTEMBER 28, 1999*
THROUGH
JULY 31, 2000
---------------------------------
SHARES AMOUNT
-------------- ----------------
CLASS A SHARES
Sold .................................. 2,368,002 $ 24,946,767
Reinvestment of distributions ......... 2,489 28,154
Redeemed .............................. (361,590) (4,072,114)
--------- ------------
Net increase - Class A ................ 2,008,901 20,902,807
--------- ------------
CLASS B SHARES
Sold .................................. 35,671,094 375,048,235
Reinvestment of distributions ......... 42,470 479,435
Redeemed .............................. (4,161,477) (47,539,647)
---------- ------------
Net increase - Class B ................ 31,552,087 327,988,023
---------- ------------
CLASS C SHARES
Sold .................................. 4,550,160 48,134,021
Reinvestment of distributions ......... 4,961 55,999
Redeemed .............................. (676,129) (7,681,286)
---------- ------------
Net increase - Class C ................ 3,878,992 40,508,734
---------- ------------
CLASS D SHARES
Sold .................................. 315,545 3,545,971
Reinvestment of distributions ......... 11 124
---------- ------------
Net increase - Class D ................ 315,556 3,546,095
---------- ------------
Net increase in Fund .................. 37,755,536 $392,945,659
========== ============

---------------
* Commencement of operations.

7. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS

To hedge against adverse interest rate, foreign currency and market risks, the
Fund may purchase and sell interest rate, currency and index futures contracts
("futures contracts").

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 value of the underlying securities or currencies.
Risks may also arise upon entering into these contracts from the potential
inability of the counterparties to meet the terms of their contracts.

At July 31, 2000, the Fund had open futures contracts.

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
FINANCIAL HIGHLIGHTS

Selected ratios and per share data for a share of beneficial interest
outstanding throughout the period:

FOR THE PERIOD SEPTEMBER 28, 1999* THROUGH JULY 31,
2000**
------------------------------------------------------
CLASS A CLASS B CLASS C CLASS D
SHARES SHARES SHARES SHARES
------------ --------------- ------------- -----------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA:
Net asset value, beginning of period ........... $10.00 $10.00 $10.00 $10.00
------ ------ ------ ------
Income (loss) from investment operations:

Net investment income (loss) .................. 0.06 (0.02) (0.02) 0.08
Net realized and unrealized gain .............. 1.34 1.35 1.35 1.35
------ ------ ------ ------
Total income from investment operations ........ 1.40 1.33 1.33 1.43
------ ------ ------ ------
Less distributions from net realized gains ..... (0.02) (0.02) (0.02) (0.02)
------ ------ ------ ------
Net asset value, end of period ................. $11.38 $11.31 $11.31 $11.41
====== ====== ====== ======

TOTAL RETURN+(1) .............................. 13.99% 13.29 % 13.29 % 14.30%

RATIOS TO AVERAGE NET ASSETS (2)(3)(4):
Expenses ....................................... 0.75% 1.50 % 1.50 % 0.50%
Net investment income (loss) ................... 0.58% (0.17)% (0.17)% 0.83%

SUPPLEMENTAL DATA:
Net assets, end of period, in thousands ........ $22,895 $356,899 $43,901 $3,628
Portfolio turnover rate ........................ 2% 2 % 2 % 2%
</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.
(4) If the Fund had borne all its expenses that were reimbursed or waived by the
Investment Manager, the annualized expense and net investment income (loss)
ratios for the period ended July 31, 2000 would have been 0.90% and 0.43%,
respectively, for Class A; 1.65% and (0.32)%, respectively, for Class B;
1.65% and (0.32)%, respectively, for Class C; and 0.65% and 0.68%,
respectively, for Class D.

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND
INDEPENDENT AUDITORS' REPORT

TO THE SHAREHOLDERS AND BOARD OF TRUSTEES
OF MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND:

We have audited the accompanying statement of assets and liabilities of Morgan
Stanley Dean Witter Total Market Index Fund (the "Fund"), including the
portfolio of investments, as of July 31, 2000, and the related statements of
operations and changes in net assets, and financial highlights for the period
September 28, 1999 (commencement of operations) to July 31, 2000. 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.

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 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 at July 31,
2000 by correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial presentation. We believe that our audit
provides a reasonable basis for our opinion.

In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Morgan Stanley Dean
Witter Total Market Index Fund as of July 31, 2000, the results of its
operations, the changes in its net assets and the financial highlights for the
period September 28, 1999 (commencement of operations) to July 31, 2000 in
conformity with accounting principles generally accepted in the United States of
America.

Deloitte & Touche LLP
New York, New York
September 12, 2000

2000 FEDERAL TAX NOTICE (unaudited)

During the fiscal year ended July 31, 2000, the Fund paid to its
shareholders $0.01 per share from long-term capital gains.

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX 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
as of July 21, 1999 contained no adverse opinion or disclaimer of opinion and
was not qualified or modified as to uncertainty, audit scope or accounting
principle.

From July 21, 1999 through July 1, 2000, there have been no disagreements with
PricewaterhouseCoopers LLP on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements if not resolved to the satisfaction of PricewaterhouseCoopers LLP
would have caused them to make reference thereto in their report on the
financial statements.

The Fund, with the approval of its Board of Trustees and its Audit Committee,
engaged Deloitte & Touche LLP as its new independent accountants for the period
ended July 31, 2000.

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND

PART C OTHER INFORMATION

Item 23. Exhibits:

1. Declaration of Trust of the Registrant, dated March 11, 1999, is
incorporated by reference to the Initial Registration Statement on
Form N-1A, filed on March 12, 1999.

2. Amended and Restated By-Laws of the Registrant, dated May 1, 1999,
is incorporated by reference to Exhibit 2 of Pre-Effective Amendment
No. 1 to the Registration Statement on Form N-1A, filed on July 21,
1999.

3. None

4. Form of Investment Management Agreement between the Registrant and
Morgan Stanley Dean Witter Advisors Inc., is incorporated by
reference to Exhibit 4 of Pre-Effective Amendment No. 1 to the
Registration Statement on Form N-1A, filed on July 21, 1999.

5.(a) Form of Distribution Agreement between the Registrant and Morgan
Stanley Dean Witter Distributors Inc., is incorporated by reference
to Exhibit 5(a) of Pre-Effective Amendment No. 1 to the Registration
Statement on Form N-1A, filed on July 21, 1999.

5.(b) Form of Selected Dealer Agreement between Morgan Stanley Dean Witter
Distributors Inc. and Dean Witter Reynolds Inc., is incorporated by
reference to Exhibit 5(b) of Pre-Effective Amendment No. 1 to the
Registration Statement on Form N-1A, filed on July 21, 1999.

6. None

7. Form of Custodian Agreement between the Registrant and the Bank of
New York, is incorporated by reference to Exhibit 7 of Pre-Effective
Amendment No. 1 to the Registration Statement on Form N-1A, filed on
July 21, 1999.

8.(a) Form of Amended and Restated Transfer Agency and Service Agreement
between the Registrant and Morgan Stanley Dean Witter Trust FSB,
dated September 1, 2000, filed herein.

8.(b) Form of Amended and Restated Services Agreement between Morgan
Stanley Dean Witter Advisors Inc. and Morgan Stanley Dean Witter
Services Company Inc., dated June 22, 1998, is incorporated by
reference to Exhibit 8(b) of Pre-Effective Amendment No. 1 to the
Registration Statement on Form N-1A, filed on July 21, 1999.

9.(a) Opinion of Barry Fink, Esq., is incorporated by reference to Exhibit
9(a) of Pre-Effective Amendment No. 1 to the Registration Statement
on Form N-1A, filed on July 21, 1999.

<PAGE>

9.(b) Opinion of Lane Altman & Owens LLP, is incorporated by reference to
Exhibit 9(b) of Pre-Effective Amendment No. 1 to the Registration
Statement on Form N-1A, filed on July 21, 1999.

10. Consent of Independent Auditors, filed herein.

11. None

12. Not applicable.

13. Form of Plan of Distribution pursuant to Rule 12b-1 between
Registrant and Morgan Stanley Dean Witter Distributors Inc., is
incorporated by reference to Exhibit 13 of Pre-Effective Amendment
No. 1 to the Registration Statement on Form N-1A, filed on July 21,
1999.

14. Form of Multiple Class Plan pursuant to Rule 18f-3 dated August 15,
2000, filed herein.

15. Not applicable.

16(a). Codes of Ethics of Morgan Stanley Dean Witter Advisors Inc., Morgan
Stanley Dean Witter Services Company Inc. and Morgan Stanley Dean
Witter Distributors Inc., filed herein.

16(b). Code of Ethics of the Morgan Stanley Dean Witter Funds, filed
herein.

Other Powers of Attorney, is incorporated by reference to Exhibit (Other)
of Pre-Effective Amendment No. 1 to the Registration Statement on
Form N-1A, filed on July 21, 1999. The Power of Attorney of James F.
Higgins is filed herein.

Item 24. Persons Controlled by or Under Common Control with the Fund.

None

Item 25. Indemnification.

Pursuant to Section 5.3 of the Registrant's Declaration of Trust and under
Section 4.8 of the Registrant's By-Laws, the indemnification of the Registrant's
trustees, officers, employees and agents is permitted if it is determined that
they acted under the belief that their actions were in or not opposed to the
best interest of the Registrant, and, with respect to any criminal proceeding,
they had reasonable cause to believe their conduct was not unlawful. In
addition, indemnification is permitted only if it is determined that the actions
in question did not render them liable by reason of willful misfeasance, bad
faith or gross negligence in the performance of their duties or by reason of
reckless disregard of their obligations and duties to the Registrant. Trustees,
officers, employees and agents will be indemnified for the expense of litigation
if it is determined that they are entitled to indemnification against any
liability established in such litigation. The Registrant may also advance money
for these expenses provided that they give their undertakings to repay the
Registrant unless their conduct is later determined to permit indemnification.

Pursuant to Section 5.2 of the Registrant's Declaration of Trust
and paragraph 8 of the Registrant's Investment Management Agreement, neither the
Investment Manager nor any trustee, officer, employee or agent of the Registrant
shall be liable for any action or failure to

<PAGE>

act, except in the case of bad faith, willful misfeasance, gross negligence or
reckless disregard of duties to the Registrant.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to trustees, officers and
controlling persons of the Registrant pursuant to the foregoing provisions or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer, or controlling
person of the Registrant in connection with the successful defense of any
action, suit or proceeding) is asserted against the Registrant by such trustee,
officer or controlling person in connection with the shares being registered,
the Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act, and will be governed by the final adjudication of such
issue.

The Registrant hereby undertakes that it will apply the
indemnification provision of its by-laws in a manner consistent with Release
11330 of the Securities and Exchange Commission under the Investment Company Act
of 1940, so long as the interpretation of Sections 17(h) and 17(i) of such Act
remains in effect.

Registrant, in conjunction with the Investment Manager,
Registrant's Trustees, and other registered investment management companies
managed by the Investment Manager, maintains insurance on behalf of any person
who is or was a Trustee, officer, employee, or agent of Registrant, or who is or
was serving at the request of Registrant as a trustee, director, officer,
employee or agent of another trust or corporation, against any liability
asserted against him and incurred by him or arising out of his position.
However, in no event will Registrant maintain insurance to indemnify any such
person for any act for which Registrant itself is not permitted to indemnify
him.

Item 26. Business and Other Connections of Investment Advisor

See "The Fund and Its Management" in the Prospectus regarding the
business of the investment advisor. The following information is given regarding
officers of Morgan Stanley Dean Witter Advisors Inc. ("MSDW Advisors"). MSDW
Advisors is a wholly-owned subsidiary of Morgan Stanley Dean Witter & Co.

The term "Morgan Stanley Dean Witter Funds" refers to the following
registered investment companies:

Closed-End Investment Companies
(1) Morgan Stanley Dean Witter California Insured Municipal Income Trust
(2) Morgan Stanley Dean Witter California Quality Municipal Securities
(3) Morgan Stanley Dean Witter Government Income Trust
(4) Morgan Stanley Dean Witter High Income Advantage Trust
(5) Morgan Stanley Dean Witter High Income Advantage Trust II
(6) Morgan Stanley Dean Witter High Income Advantage Trust III
(7) Morgan Stanley Dean Witter Income Securities Inc.
(8) Morgan Stanley Dean Witter Insured California Municipal Securities
(9) Morgan Stanley Dean Witter Insured Municipal Bond Trust
(10) Morgan Stanley Dean Witter Insured Municipal Income Trust
(11) Morgan Stanley Dean Witter Insured Municipal Securities

<PAGE>

(12) Morgan Stanley Dean Witter Insured Municipal Trust
(13) Morgan Stanley Dean Witter Municipal Income Opportunities Trust
(14) Morgan Stanley Dean Witter Municipal Income Opportunities Trust II
(15) Morgan Stanley Dean Witter Municipal Income Opportunities Trust III
(16) Morgan Stanley Dean Witter Municipal Income Trust
(17) Morgan Stanley Dean Witter Municipal Income Trust II
(18) Morgan Stanley Dean Witter Municipal Income Trust III
(19) Morgan Stanley Dean Witter Municipal Premium Income Trust
(20) Morgan Stanley Dean Witter New York Quality Municipal Securities
(21) Morgan Stanley Dean Witter Prime Income Trust
(22) Morgan Stanley Dean Witter Quality Municipal Income Trust
(23) Morgan Stanley Dean Witter Quality Municipal Investment Trust
(24) Morgan Stanley Dean Witter Quality Municipal Securities

Open-end Investment Companies
(1) Active Assets California Tax-Free Trust
(2) Active Assets Government Securities Trust
(3) Active Assets Institutional Money Trust
(4) Active Assets Money Trust
(5) Active Assets Premier Money Trust
(6) Active Assets Tax-Free Trust
(7) Morgan Stanley Dean Witter 21st Century Trend Fund
(8) Morgan Stanley Dean Witter Aggressive Equity Fund
(9) Morgan Stanley Dean Witter American Opportunities Fund
(10) Morgan Stanley Dean Witter Balanced Growth Fund
(11) Morgan Stanley Dean Witter Balanced Income Fund
(12) Morgan Stanley Dean Witter California Tax-Free Daily Income Trust
(13) Morgan Stanley Dean Witter California Tax-Free Income Fund
(14) Morgan Stanley Dean Witter Capital Growth Securities
(15) Morgan Stanley Dean Witter Competitive Edge Fund, "Best Ideas Portfolio"
(16) Morgan Stanley Dean Witter Convertible Securities Trust
(17) Morgan Stanley Dean Witter Developing Growth Securities Trust
(18) Morgan Stanley Dean Witter Diversified Income Trust
(19) Morgan Stanley Dean Witter Dividend Growth Securities Inc.
(20) Morgan Stanley Dean Witter Equity Fund
(21) Morgan Stanley Dean Witter European Growth Fund Inc.
(22) Morgan Stanley Dean Witter Federal Securities Trust
(23) Morgan Stanley Dean Witter Financial Services Trust
(24) Morgan Stanley Dean Witter Fund of Funds
(25) Morgan Stanley Dean Witter Global Dividend Growth Securities
(26) Morgan Stanley Dean Witter Global Utilities Fund
(27) Morgan Stanley Dean Witter Growth Fund
(28) Morgan Stanley Dean Witter Hawaii Municipal Trust
(29) Morgan Stanley Dean Witter Health Sciences Trust
(30) Morgan Stanley Dean Witter High Yield Securities Inc.
(31) Morgan Stanley Dean Witter Income Builder Fund
(32) Morgan Stanley Dean Witter Information Fund
(33) Morgan Stanley Dean Witter Intermediate Income Securities
(34) Morgan Stanley Dean Witter International Fund
(35) Morgan Stanley Dean Witter International SmallCap Fund
(36) Morgan Stanley Dean Witter Japan Fund
(37) Morgan Stanley Dean Witter Latin American Growth Fund
(38) Morgan Stanley Dean Witter Limited Term Municipal Trust

<PAGE>

(39) Morgan Stanley Dean Witter Liquid Asset Fund Inc.
(40) Morgan Stanley Dean Witter Market Leader Trust
(41) Morgan Stanley Dean Witter Mid-Cap Equity Trust
(42) Morgan Stanley Dean Witter Multi-State Municipal Series Trust
(43) Morgan Stanley Dean Witter Natural Resource Development Securities Inc.
(44) Morgan Stanley Dean Witter New Discoveries Fund
(45) Morgan Stanley Dean Witter New York Municipal Money Market Trust
(46) Morgan Stanley Dean Witter New York Tax-Free Income Fund
(47) Morgan Stanley Dean Witter Next Generation Trust
(48) Morgan Stanley Dean Witter North American Government Income Trust
(49) Morgan Stanley Dean Witter Pacific Growth Fund Inc.
(50) Morgan Stanley Dean Witter Real Estate Fund
(51) Morgan Stanley Dean Witter S&P 500 Index Fund
(52) Morgan Stanley Dean Witter S&P 500 Select Fund
(53) Morgan Stanley Dean Witter Select Dimensions Investment Series
(54) Morgan Stanley Dean Witter Select Municipal Reinvestment Fund
(55) Morgan Stanley Dean Witter Short-Term Bond Fund
(56) Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust
(57) Morgan Stanley Dean Witter Small Cap Growth Fund
(58) Morgan Stanley Dean Witter Special Value Fund
(59) Morgan Stanley Dean Witter Strategist Fund
(60) Morgan Stanley Dean Witter Tax-Exempt Securities Trust
(61) Morgan Stanley Dean Witter Tax-Free Daily Income Trust
(62) Morgan Stanley Dean Witter Tax-Managed Growth Fund
(63) Morgan Stanley Dean Witter Technology Fund
(64) Morgan Stanley Dean Witter Total Market Index Fund
(65) Morgan Stanley Dean Witter Total Return Trust
(66) Morgan Stanley Dean Witter U.S. Government Money Market Trust
(67) Morgan Stanley Dean Witter U.S. Government Securities Trust
(68) Morgan Stanley Dean Witter Utilities Fund
(69) Morgan Stanley Dean Witter Value-Added Market Series
(70) Morgan Stanley Dean Witter Value Fund
(71) Morgan Stanley Dean Witter Variable Investment Series
(72) Morgan Stanley Dean Witter World Wide Income Trust

<TABLE>
<CAPTION>
NAME AND POSITION WITH OTHER SUBSTANTIAL BUSINESS, PROFESSION, VOCATION
MORGAN STANLEY DEAN OR EMPLOYMENT, INCLUDING NAME, PRINCIPAL ADDRESS
WITTER ADVISORS INC. AND NATURE OF CONNECTION
--------------------- ---------------------------------------------------
<S> <C>
Mitchell M. Merin President and Chief Operating Officer of Asset
President, Chief Management of Morgan Stanley Dean Witter & Co.
Executive Officer and ("MSDW); Chairman, Chief Executive Officer and
Director Director of Morgan Stanley Dean Witter
Distributors Inc. ("MSDW Distributors") and Morgan
Stanley Dean Witter Trust FSB ("MSDW Trust");
President, Chief Executive Officer and Director of
Morgan Stanley Dean Witter Services Company Inc.
("MSDW Services"); President of the Morgan Stanley
Dean Witter Funds; Executive Vice President and
Director of Dean Witter Reynolds Inc. ("DWR");
Director of various MSDW subsidiaries; Trustee of
various Van Kampen investment companies.
</TABLE>

<PAGE>

Joseph J. McAlinden Vice President of the Morgan Stanley Dean Witter Funds;
Executive Vice President Director of MSDW Trust.
and Chief Investment
Officer

Ronald E. Robison Executive Vice President, Chief Administrative Officer
Executive Vice President, and Director of MSDW Services; Vice President of the
Chief Administrative Morgan Stanley Dean Witter Funds.
Officer and Director

Edward C. Oelsner, III
Executive Vice President

Joseph R. Arcieri Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Peter M. Avelar Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.
and Director of the High
Yield Group

Mark Bavoso Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Douglas Brown
Senior Vice President

Rosalie Clough
Senior Vice President
and Director of Marketing

Richard G. DeSalvo
Senior Vice President
and Director of Investment
Management Services

Richard Felegy
Senior Vice President

Sheila A. Finnerty Vice President of Morgan Stanley Dean Witter Prime
Senior Vice President Income Trust.
</TABLE>

6
<PAGE>

Robert S. Giambrone Senior Vice President of MSDW Services, MSDW
Senior Vice President Distributors and MSDW Trust and Director of MSDW Trust;
Vice President of the Morgan Stanley Dean Witter Funds.

Rajesh K. Gupta Vice President of various Morgan Stanley Dean Witter
Senior Vice President, Funds.
Director of the Taxable
Fixed Income Group and
Chief Administrative Officer -
Investments

Kenton J. Hinchliffe Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Kevin Hurley Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Jenny Beth Jones Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Michelle Kaufman Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

John B. Kemp, III President of MSDW Distributors.
Senior Vice President

Anita H. Kolleeny Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.
and Director of Sector
Rotation

Jonathan R. Page Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.
and Director of the Money
Market Group

Ira N. Ross Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Guy G. Rutherfurd, Jr. Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.
and Director of the Growth
Group
</TABLE>

7
<PAGE>

James Solloway Jr.
Senior Vice President

Katherine H. Stromberg Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Paul D. Vance Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.
and Director of the Growth
and Income Group

Elizabeth A. Vetell
Senior Vice President
and Director of Shareholder
Communication

James F. Willison Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.
and Director of the
Tax-Exempt Fixed
Income Group

Raymond A. Basile
First Vice President

Thomas F. Caloia First Vice President and Assistant Treasurer of
First Vice President MSDW Services; Assistant Treasurer of MSDW
and Assistant Distributors; Treasurer and Chief Financial and
Treasurer Accounting Officer of the Morgan Stanley Dean Witter
Funds.

Thomas Chronert
First Vice President

Richard Colville First Vice President and Controller of MSDW Services;
First Vice President Assistant Treasurer of MSDW Distributors; First Vice
and Controller President and Treasurer of MSDW Trust.

Marilyn K. Cranney Assistant Secretary of DWR; First Vice President and
First Vice President Assistant Secretary of MSDW Services; Assistant
and Assistant Secretary Secretary of MSDW Distributors and the Morgan Stanley
Dean Witter Funds.

Salvatore DeSteno First Vice President of MSDW Services.
First Vice President
</TABLE>

8
<PAGE>

David Johnson
First Vice President

Stanley Kapica
First Vice President

Douglas J. Ketterer
First Vice President

Todd Lebo First Vice President and Assistant Secretary of MSDW
First Vice President and Services; Assistant Secretary of MSDW Distributors and
Assistant Secretary the Morgan Stanley Dean Witter Funds.

Lou Anne D. McInnis First Vice President and Assistant Secretary of MSDW
First Vice President and Services; Assistant Secretary of MSDW Distributors and
Assistant Secretary the Morgan Stanley Dean Witter Funds.

Carsten Otto First Vice President and Assistant Secretary of MSDW
First Vice President Services; Assistant Secretary of MSDW Distributors and
and Assistant Secretary the Morgan Stanley Dean Witter Funds.

Carl F. Sadler
First Vice President

Ruth Rossi First Vice President and Assistant Secretary of MSDW
First Vice President and Services; Assistant Secretary of MSDW Distributors and
Assistant Secretary the Morgan Stanley Dean Witter Funds.

James P. Wallin
First Vice President

Robert Abreu
Vice President

Dale Albright
Vice President

Joan G. Allman
Vice President

Andrew Arbenz Vice President of Morgan Stanley Dean Witter Global
Vice President Utilities Fund.

Sean Aurigemma
Vice President
</TABLE>

9
<PAGE>

Maurice Bendrihem
Vice President and
Assistant Controller

Thomas A. Bergeron
Vice President

Philip Bernstein
Vice President

Dale Boettcher
Vice President

Michelina Calandrella
Vice President

Ronald Caldwell
Vice President

Joseph Cardwell
Vice President

Liam Carroll
Vice President

Philip Casparius
Vice President

Annette Celenza
Vice President

Aaron Clark Vice President of Morgan Stanley Dean Witter Market
Vice President Leader Trust

William Connerly
Vice President

Virginia Connors
Vice President

Michael J. Davey
Vice President

David Dineen Vice President of various Morgan Stanley Dean Witter
Vice President Funds.
</TABLE>

10
<PAGE>

Jeffrey D. Geffen Vice President of Morgan Stanley Dean Witter U.S.
Vice President Government Securities Trust

Sandra Gelpieryn
Vice President

Charmaine George
Vice President

Michael Geringer
Vice President

Gail Gerrity Burke
Vice President

Peter Gewirtz
Vice President

Mina Gitsevich
Vice President

Ellen Gold
Vice President

Amy Golub
Vice President

Stephen Greenhut
Vice President

Joan Hamilton
Vice President

Trey Hancock
Vice President

Matthew T. Haynes Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

Peter Hermann Jr. Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

David T. Hoffman
Vice President
</TABLE>

11
<PAGE>

Linda Jones
Vice President

Norman Jones
Vice President

Kevin Jung Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

Carol Espejo-Kane
Vice President

Nancy Karole Kennedy
Vice President

Paula LaCosta Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

Kimberly LaHart
Vice President

Thomas Lawlor
Vice President

Lester Lay
Vice President

Phuong Le
Vice President

Gerard J. Lian Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

Cameron J. Livingstone
Vice President

Nancy Login Cole
Vice President

Sharon Loguercio
Vice President

Stephanie Lovinger
Vice President
</TABLE>

12
<PAGE>

Catherine Maniscalco Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

Peter R. McDowell
Vice President

Albert McGarity
Vice President

Teresa McRoberts Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

Mark Mitchell
Vice President

Thomas Moore
Vice President

Julie Morrone Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

Mary Beth Mueller
Vice President

David Myers Vice President of Morgan Stanley Dean Witter Natural
Vice President Resource Development Securities Inc.

James Nash
Vice President

Daniel Niland
Vice President

Richard Norris
Vice President

Hilary A. O'Neill
Vice President

Steven Orlov
Vice President

Mori Paulsen
Vice President
</TABLE>

13
<PAGE>

Reginald Rigaud
Vice President

Frances Roman
Vice President

Dawn Rorke
Vice President

John Roscoe Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

Hugh Rose
Vice President

Robert Rossetti Vice President of Morgan Stanley Dean Witter Competitive
Vice President Edge Fund.

Sally Sancimino Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

Deborah Santaniello
Vice President

Patrice Saunders
Vice President

Donna Savoca
Vice President

Howard A. Schloss Vice President of Morgan Stanley Dean Witter Federal
Vice President Securities Trust.

Alison M. Sharkey
Vice President

Peter J. Seeley Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

Ronald B. Silvestri Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

Herbert Simon
Vice President
</TABLE>

14
<PAGE>

Frank Smith
Vice President

Otha Smith
Vice President

Stuart Smith
Vice President

Robert Stearns
Vice President

Naomi Stein
Vice President

William Stevens
Vice President

Michael Strayhorn
Vice President

Marybeth Swisher
Vice President

Michael Thayer
Vice President

Bradford Thomas
Vice President

Barbara Toich
Vice President

Robert Vanden Assem
Vice President

Frank Vindigni
Vice President

David Walsh
Vice President

Alice Weiss Vice President of various Morgan Stanley Dean Witter
Vice President Funds.
</TABLE>

15
<PAGE>

The principal address of MSDW Advisors, MSDW Services, MSDW
Distributors, DWR, and the Morgan Stanley Dean Witter Funds is Two World Trade
Center, New York, New York 10048. The principal address of MSDW is 1585
Broadway, New York, New York 10036. The principal address of MSDW Trust is 2
Harborside Financial Center, Jersey City, New Jersey 07311.

Item 27. Principal Underwriters

(a) Morgan Stanley Dean Witter Distributors Inc. ("MSDW Distributors"), a
Delaware corporation, is the principal underwriter of the Registrant. MSDW
Distributors is also the principal underwriter of the following investment
companies:

(1) Active Assets California Tax-Free Trust
(2) Active Assets Government Securities Trust
(3) Active Assets Institutional Money Trust
(4) Active Assets Money Trust
(5) Active Assets Premier Money Trust
(6) Active Assets Tax-Free Trust
(7) Morgan Stanley Dean Witter 21st Century Trend Fund
(8) Morgan Stanley Dean Witter Aggressive Equity Fund
(9) Morgan Stanley Dean Witter American Opportunities Fund
(10) Morgan Stanley Dean Witter Balanced Growth Fund
(11) Morgan Stanley Dean Witter Balanced Income Fund
(12) Morgan Stanley Dean Witter California Tax-Free Daily Income Trust
(13) Morgan Stanley Dean Witter California Tax-Free Income Fund
(14) Morgan Stanley Dean Witter Capital Growth Securities
(15) Morgan Stanley Dean Witter Competitive Edge Fund, "Best Ideas Portfolio"
(16) Morgan Stanley Dean Witter Convertible Securities Trust
(17) Morgan Stanley Dean Witter Developing Growth Securities Trust
(18) Morgan Stanley Dean Witter Diversified Income Trust
(19) Morgan Stanley Dean Witter Dividend Growth Securities Inc.
(20) Morgan Stanley Dean Witter Equity Fund
(21) Morgan Stanley Dean Witter European Growth Fund Inc.
(22) Morgan Stanley Dean Witter Federal Securities Trust
(23) Morgan Stanley Dean Witter Financial Services Trust
(24) Morgan Stanley Dean Witter Fund of Funds
(25) Morgan Stanley Dean Witter Global Dividend Growth Securities
(26) Morgan Stanley Dean Witter Global Utilities Fund
(27) Morgan Stanley Dean Witter Growth Fund
(28) Morgan Stanley Dean Witter Hawaii Municipal Trust
(29) Morgan Stanley Dean Witter Health Sciences Trust
(30) Morgan Stanley Dean Witter High Yield Securities Inc.
(31) Morgan Stanley Dean Witter Income Builder Fund
(32) Morgan Stanley Dean Witter Information Fund
(33) Morgan Stanley Dean Witter Intermediate Income Securities
(34) Morgan Stanley Dean Witter International Fund

16
<PAGE>

(35) Morgan Stanley Dean Witter International SmallCap Fund
(36) Morgan Stanley Dean Witter Japan Fund
(37) Morgan Stanley Dean Witter Latin American Growth Fund
(38) Morgan Stanley Dean Witter Limited Term Municipal Trust
(39) Morgan Stanley Dean Witter Liquid Asset Fund Inc.
(40) Morgan Stanley Dean Witter Market Leader Trust
(41) Morgan Stanley Dean Witter Mid-Cap Equity Trust
(42) Morgan Stanley Dean Witter Multi-State Municipal Series Trust
(43) Morgan Stanley Dean Witter Natural Resource Development Securities Inc.
(44) Morgan Stanley Dean Witter New Discoveries Fund
(45) Morgan Stanley Dean Witter New York Municipal Money Market Trust
(46) Morgan Stanley Dean Witter New York Tax-Free Income Fund
(47) Morgan Stanley Dean Witter Next Generation Trust
(48) Morgan Stanley Dean Witter North American Government Income Trust
(49) Morgan Stanley Dean Witter Pacific Growth Fund Inc.
(50) Morgan Stanley Dean Witter Prime Income Trust
(51) Morgan Stanley Dean Witter Real Estate Fund
(52) Morgan Stanley Dean Witter S&P 500 Index Fund
(53) Morgan Stanley Dean Witter S&P 500 Select Fund
(54) Morgan Stanley Dean Witter Short-Term Bond Fund
(55) Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust
(56) Morgan Stanley Dean Witter Small Cap Growth Fund
(57) Morgan Stanley Dean Witter Special Value Fund
(58) Morgan Stanley Dean Witter Strategist Fund
(59) Morgan Stanley Dean Witter Tax-Exempt Securities Trust
(60) Morgan Stanley Dean Witter Tax-Free Daily Income Trust
(61) Morgan Stanley Dean Witter Tax-Managed Growth Fund
(62) Morgan Stanley Dean Witter Technology Fund
(63) Morgan Stanley Dean Witter Total Market Index Fund
(64) Morgan Stanley Dean Witter Total Return Trust
(65) Morgan Stanley Dean Witter U.S. Government Money Market Trust
(66) Morgan Stanley Dean Witter U.S. Government Securities Trust
(67) Morgan Stanley Dean Witter Utilities Fund
(68) Morgan Stanley Dean Witter Value-Added Market Series
(69) Morgan Stanley Dean Witter Value Fund
(70) Morgan Stanley Dean Witter Variable Investment Series
(71) Morgan Stanley Dean Witter World Wide Income Trust

(b) The following information is given regarding directors and officers of MSDW
Distributors not listed in Item 26 above. The principal address of MSDW
Distributors is Two World Trade Center, New York, New York 10048. Other than
Messrs. Higgins and Purcell, who are Trustees of the Registrant, none of the
following persons has any position or office with the Registrant.

Name Positions and Office with MSDW Distributors
---- -------------------------------------------

James F. Higgins Director

Philip J. Purcell Director

John Schaeffer Director

Charles Vadala Senior Vice President and Financial Principal.

17
<PAGE>

Item 28. Location of Accounts and Records

All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder are
maintained by the Investment Manager at its offices, except records relating to
holders of shares issued by the Registrant, which are maintained by the
Registrant's Transfer Agent, at its place of business as shown in the
prospectus.

Item 29. Management Services

Registrant is not a party to any such management-related service
contract.

Item 30. Undertakings

Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.

18
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York
and State of New York on the 29th day of September, 2000.

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND

By: /s/ Barry Fink
-----------------------------------------
Barry Fink
Vice President and Secretary

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No.1 has been signed below by the following persons in
the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
(1) Principal Executive Officer Chairman, Chief Executive Officer
and Trustee

By: /s/ Charles A. Fiumefreddo 09/29/00
---------------------------------
Charles A. Fiumefreddo

(2) Principal Financial Officer Treasurer and Principal
Accounting Officer

By: /s/ Thomas F. Caloia 09/29/00
---------------------------------
Thomas F. Caloia

(3) Majority of the Trustees

Charles A. Fiumefreddo (Chairman)
Philip J. Purcell
James F. Higgins

By: /s/ Barry Fink 09/29/00
---------------------------------
Barry Fink
Attorney-in-Fact

Michael Bozic Manuel H. Johnson
Edwin J. Garn Michael E. Nugent
Wayne E. Hedien John L. Schroeder

By: /s/ David M. Butowsky 09/29/00
---------------------------------
David M. Butowsky
Attorney-in-Fact
</TABLE>

<PAGE>

MORGAN STANLEY DEAN WITTER TOTAL MARKET INDEX FUND

PART C OTHER INFORMATION

8. Form of Amended and Restated Transfer Agency and Service Agreement
between Registrant and Morgan Stanley Dean Witter Trust FSB

10. Consent of Independent Auditors

14. Form of Multiple Class Plan pursuant to Rule 18f-3

16(a). Codes of Ethics of Morgan Stanley Dean Witter Advisors Inc., Morgan
Stanley Dean Witter Services Company Inc. and Morgan Stanley Dean
Witter Distributors Inc.

16(b). Code of Ethics of the Morgan Stanley Dean Witter Funds

Other Power of Attorney of James F. Higgins