MORGAN STANLEY DEAN WITTER ALL STAR GROWTH FUND, 497, 2001-01-08

MORGAN STANLEY DEAN WITTER ALL STAR GROWTH FUND
497, 2001-01-08

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<PAGE>

Filed Pursuant to Rule 497(c)
Registration File No.: 333-47522

PROSPECTUS - DECEMBER 8, 2000

Morgan Stanley Dean Witter

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

ALL STAR GROWTH FUND

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A MUTUAL FUND THAT SEEKS LONG-TERM GROWTH OF CAPITAL

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

<PAGE>

CONTENTS

The Fund Investment Objective ................................1

Principal Investment Strategies .....................1

Principal Risks .....................................3

Fees and Expenses ...................................5

Additional Investment Strategy Information ..........6

Additional Risk Information .........................7

Fund Management .....................................8

Shareholder Information Pricing Fund Shares ................................10

Underwriting .......................................10

How to Buy Shares ..................................11

How to Exchange Shares .............................12

How to Sell Shares .................................15

Distributions ......................................16

Tax Consequences ...................................17

Share Class Arrangements ...........................17

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

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INVESTMENT OBJECTIVE
--------------------
Morgan Stanley Dean Witter All Star Growth Fund seeks long-term growth of
capital.

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PRINCIPAL INVESTMENT STRATEGIES
-------------------------------

(sidebar)
CAPITAL GROWTH
An investment objective having the goal of selecting securities with the
potential to rise in price rather than pay out income.
(end sidebar)

The Fund seeks to achieve its investment objective by investing at least 65% of
its assets in the common stocks of companies that are believed to offer the
potential for superior growth. The Fund utilizes a multi-manager investment
approach whereby separate portions of the Fund's assets are managed according to
four different investment strategies, each based on the distinct investment
style of the particular manager.

The Fund currently has four primary portfolio managers. It is generally expected
that the Fund's assets, both inflows and outflows, will be allocated equally
among the four managers although Morgan Stanley Dean Witter Advisors Inc., the
"Investment Manager," has reserved the right to alter the percentage of the
Fund's assets allocated to each manager. Additionally, the Investment Manager
may substitute a different investment strategy if it believes it is advisable to
do so in furthering the Fund's investment objective. The Investment Manager will
also monitor the Fund's overall portfolio to ensure that any overlaps of
securities or industries do not create unintended concentrations.

Each portfolio manager will apply his or her own particular investment style and
strategy to the portion of the Fund's assets that he or she manages and
therefore the investment selections made by each portfolio manager will vary and
will consist of investments that are most representative of their respective
individual investment philosophies. The four investment strategies are as
follows:

(1) The Mid-Cap Strategy. The Investment Manager, under the portfolio management
supervision of Arden C. Armstrong, invests this portion of the Fund's assets
primarily in a diversified mix of common stocks of companies that primarily fall
within the market capitalizations of companies included within the Russell
Mid-Cap Growth Index (currently ranging from approximately $350 million to $30
billion). The Investment Manager utilizes a quantitative screening process that
focuses on earnings estimate revisions to identify a list of potential
investments and then applies a fundamental analysis using such factors as high
earnings growth rates, growth stability, rising profitability, attractive
business models, industry position, strong cash flow and market valuation in
order to arrive at overall stock selection. In deciding whether to sell a
particular security, the Investment Manager considers a number of factors
including falling earnings estimates, negative fundamental information or
unfavorable trends and excessive market valuations in relation to growth
prospects as well as general economic and market conditions.

(2) The Selected Focus Strategy. The Investment Manager, under the portfolio
management supervision of Philip W. Friedman, invests this portion of the Fund's
assets primarily in equity securities that are believed to exhibit strong or
accelerated earnings growth. The Investment Manager generally concentrates the
Fund's investments in a relatively select number of issuers, and, in accordance
with this focused strategy, may invest up to 25% of this portion of the Fund's
assets in the securities of a single issuer. Fundamental equity research that
encompasses the

<PAGE>

following criteria drives the investment selection process: consistent or rising
earnings growth, compelling business strategies, management focus, strong
financial results and company developments and the potential for positive
earnings surprises. Securities which no longer meet these investment criteria
are generally sold. The focus on individual security selection may at times lead
to an emphasis on particular industry sectors.

(3) The Aggressive Growth Strategy. Van Kampen Asset Management Inc. ("Van
Kampen"), a sub-advisor to the Fund, under the portfolio management supervision
of Gary M. Lewis, invests this portion of the Fund's assets in common stocks of
companies considered by Van Kampen to have an above-average potential for
capital growth. Van Kampen focuses primarily on equity securities of small and
medium-sized companies although the portfolio manager may invest in securities
of larger-sized companies that are believed to have an above-average potential
for capital growth. Van Kampen utilizes a "bottom up" investment approach that
focuses on companies that exhibit rising earnings expectations and rising
valuations. In selecting securities for investment, the portfolio manager seeks
companies that appear to be positioned to produce attractive earnings through
development of new products, services or markets or as a result of changing
markets and industry conditions. As part of its overall strategy, Van Kampen may
also invest in companies which are experiencing unusual developments or special
circumstances such as initial public offerings, mergers, liquidations,
bankruptcies or leveraged buyouts as well as companies with new management,
special products or limited or cyclical product lines. The portfolio manager
generally expects to sell securities when earnings expectations or valuations
flatten or decline. Other factors that Van Kampen may consider in selling a
security include changes in a company's fundamentals or its operations or market
performance, as well as market trends or factors affecting individual issuers or
industries and general changes in economic or market conditions.

(4) The Sector Rotation Strategy. The Investment Manager, under the portfolio
management supervision of Anita H. Kolleeny, manages this portion of the Fund's
assets by utilizing a sector rotation process which is designed to respond to
changing economic cycles by proactively investing in industries that the
Investment Manager believes to be positioned to benefit from the current phase
of the economic cycle. As part of the sector rotation process, the Investment
Manager attempts to identify which stage of the business cycle the economy is in
and which industries have historically outperformed the overall market during
this stage of the cycle. To accomplish this determination, the Investment
Manager establishes an economic forecast based on short-term and long-term views
of the domestic and global economic cycles by examining or identifying secular
trends such as shifting demographics or technological developments. Also
factored into the Investment Manager's analysis are industry variables such as
supply and demand, pricing trends and new product cycles. The Investment Manager
then selects target industries for investment and, within those industries,
specific securities whose prospects are deemed attractive based upon individual
issuer fundamentals, valuation and other research. The Investment Manager
utilizes the same sector rotation process in determining which securities to
sell from the portfolio.

2
<PAGE>

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.

The Fund may purchase securities issued as part of, or a short period after,
companies' initial public offerings ("IPOs"), and may at times dispose of those
shares shortly after their acquisition.

The Fund may also invest up to 25% of its assets in foreign equity securities
including depository receipts. This percentage limitation, however, does not
apply to securities of foreign companies that are listed in the U.S. on a
national securities exchange. A depository receipt is generally issued by a bank
or financial institution and represents an ownership interest in the common
stock or other equity securities of a foreign company.

In addition, the Fund may invest up to 35% of its assets in other equity
securities including preferred stocks, convertible securities and rights and
warrants and may also invest in fixed-income securities and options and futures.

In pursuing the Fund's investment objective, the Investment Manager and the
sub-advisor have considerable leeway in deciding which investments each buys,
holds or sells on a day-to-day basis -- and which trading or investment
strategies each uses. For example, the Investment Manager or the sub-advisor in
their discretion may determine to use some permitted trading or investment
strategies while not using others.

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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.

COMMON STOCKS. 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.

SMALL & MEDIUM CAPITALIZATION COMPANIES. The Fund may invest in stocks of small
and medium-sized companies which include emerging growth companies. Investing in
securities of these companies involves greater risk than is customarily
associated with investing in larger, more established companies. These companies
may have limited product lines, markets, distribution channels or financial
resources and the management of such companies may be dependent upon one or a
few key people. Additionally, the stocks of these companies may be more volatile
and less liquid than the stocks of more established companies and may be subject
to more abrupt and erratic price movements. These stocks may also have returns
that vary, sometimes significantly, from the overall stock market. Often smaller
and medium capitalization companies and the industries in which they are focused
are still evolving and, while this may offer better growth potential than
larger, more established companies, it also may make them more sensitive to
changing market conditions.

3
<PAGE>

SHARES OF IPOS. The Fund's purchase of shares issued in IPOs exposes it to the
additional risks associated with companies that have little operating history as
public companies, as well as to the risks inherent in those sectors of the
market where these new issuers operate. The market for IPO issuers has been
volatile, and share prices of certain newly-public companies have fluctuated in
significant amounts over short periods of time. As a result, IPO investments by
the Fund may significantly impact the Fund's performance over short periods of
time and any assumptions based upon this impact may be unwarranted. In addition,
the Investment Manager or the sub-advisor cannot guarantee continued access to
IPOs.

FOREIGN SECURITIES. The Fund's investments in foreign securities involve risks
in addition to the risks associated with domestic securities. One additional
risk is currency risk. While the price of Fund shares is quoted in U.S. dollars,
the Fund generally converts U.S. dollars to a foreign market's local currency to
purchase a security in that market. If the value of that local currency falls
relative to the U.S. dollar, the U.S. dollar value of the foreign security will
decrease. This is true even if the foreign security's local price remains
unchanged.

Foreign securities (including depository receipts) also have
risks related to economic and political developments abroad, including
expropriations, confiscatory taxation, exchange control regulation, limitations
on the use or transfer of Fund assets and any effects of foreign social,
economic or political instability. 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. Additionally, certain depository
receipts, particularly unsponsored or unregistered depository receipts and/or
depository receipts not traded on U.S. securities exchanges, are not subject to
the reporting requirements of either U.S. regulatory entities or securities
exchanges and consequently there is less available information about the issuer
of the underlying securities to holders of such depository receipts. Moreover,
the depositories of such receipts are under no obligation to distribute
shareholder communications received from the underlying issuer of such
securities or to pass through to the holders of such receipts any voting rights
with respect to the deposited securities.

Securities of foreign issuers may be less liquid than comparable securities of
U.S. issuers and, as such, their price changes may be more volatile.
Furthermore, foreign exchanges and broker-dealers are generally subject to less
government and exchange scrutiny and regulation than their U.S. counterparts. In
addition, differences in clearance and settlement procedures in foreign markets
may occasion delays in settlements of the Fund's trades effected in those
markets.

Certain foreign securities in which the Fund may invest may be issued by
companies located in developing or emerging countries. Compared to the United
States and other developed countries, developing or emerging countries may have
unstable governments, economies based on only a few industries and securities
markets that trade a small number of securities. Securities issued by companies
located in these countries tend to be especially volatile and may be less liquid
than securities traded in developed countries. In the past, securities in these
countries have offered greater potential loss (as well as gain) than securities
of companies located in developed countries.

NON-DIVERSIFIED STATUS. The Fund is a "non-diversified" mutual fund and, as
such, its investments are not required to meet certain diversification
requirements under

<PAGE>

federal law. Compared with "diversified" funds, the Fund may invest a greater
percentage of its assets in the securities of an individual issuer entity. Thus,
the Fund's assets may be concentrated in fewer securities than other funds. A
decline in the value of those investments would cause the Fund's overall value
to decline to a greater degree.

OTHER RISKS. The performance of the Fund also will depend on whether the
Investment Manager and the sub-advisor are successful in pursuing the Fund's
investment strategies. The Fund is also subject to other risks from its
permissible investments including the risks associated with convertible
securities, fixed-income securities, rights and warrants, and options and
futures. Risks of options and futures include the possibility of imperfect
correlation between the prices of the options and futures and the prices of the
underlying Fund securities. For more information about all of the foregoing
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.

The Fund was recently organized and as of the date of this Prospectus had no
historical performance to report.

[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.

(sidebar)
SHAREHOLDER FEES
These fees are paid directly from your investment.

ANNUAL FUND OPERATING EXPENSES
These expenses are deducted from the Fund's assets.
(end sidebar)

CLASS A CLASS B CLASS C CLASS D
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHAREHOLDER FEES
---------------------------------------------------------------------------------------------------
Maximum sales charge (load) imposed on
purchases (as a percentage of offering price) 5.25%(1) None None None
---------------------------------------------------------------------------------------------------
Maximum deferred sales charge (load) (as a
percentage based on the lesser of the offering
price or net asset value at redemption) None(2) 5.00%(3) 1.00%(4) None
---------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
---------------------------------------------------------------------------------------------------
Management fee(5) 0.75% 0.75% 0.75% 0.75%
---------------------------------------------------------------------------------------------------
Distribution and service (12b-1) fees 0.25% 1.00% 1.00% None
---------------------------------------------------------------------------------------------------
Other expenses(5,6) 0.24% 0.24% 0.24% 0.24%
---------------------------------------------------------------------------------------------------
Total annual Fund operating expenses(5) 1.24% 1.99% 1.99% 0.99%
---------------------------------------------------------------------------------------------------
</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 Investment Manager has agreed to assume all operating expenses (except
for brokerage and 12b-1 fees) and waive the compensation provided in the
investment management agreement until such time as the Fund has $50 million
of net assets or until six months from the date of commencement of the
Fund's operations, whichever occurs first. The expenses and fees disclosed
above do not reflect the assumption of any expenses or the waiver of any
compensation by the Investment Manager.

(6) "Other Expenses" are estimated based on expenses anticipated for the first
complete fiscal year of the Fund.

<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.

IF YOU SOLD YOUR SHARES: IF YOU HELD YOUR SHARES:
--------------------------------------- -----------------------------
1 Year 3 Years 1 Year 3 Years
--------------------------------------- -----------------------------
CLASS A $645 $897 $645 $897
--------------------------------------- -----------------------------
CLASS B $702 $924 $202 $624
--------------------------------------- -----------------------------
CLASS C $302 $624 $202 $624
--------------------------------------- -----------------------------
CLASS D $101 $315 $101 $315
--------------------------------------- -----------------------------

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.

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

OTHER EQUITY SECURITIES. Other types of equity securities include preferred
stocks, convertible securities, and rights and warrants. Preferred stocks pay a
fixed or variable dividend and have a prior claim before common stocks on assets
and earnings but generally carry no voting rights. Convertible securities are
securities that generally pay interest and may be converted into common stock.
Rights and warrants are, in effect, options to purchase equity securities for a
specific price during a fixed time period.

FIXED-INCOME SECURITIES. The Fund may invest in investment grade U.S. corporate
debt securities and U.S. government securities (including zero coupon
securities).

OPTIONS AND FUTURES. The Fund may invest in put and call options and futures on
its portfolio securities and stock indexes. The Fund may use options and futures
to protect against a decline in the Fund's securities or an increase in prices
of securities that may be purchased.

DEFENSIVE INVESTING. The Fund may take temporary "defensive" positions that are
inconsistent with the Fund's principal investment strategies in attempting to
respond to adverse market conditions. The Fund may invest any amount of its
total assets in cash or money market instruments in a defensive posture when the
Investment Manager and/or the sub-advisor believe it is advisable to do so.
Although taking a defensive posture is designed to protect the Fund from an
anticipated market

6
<PAGE>

downturn, it could have the effect of reducing the benefit from any upswing in
the market. When the Fund takes a defensive position, it may not achieve its
investment objective.

PORTFOLIO TURNOVER. The Fund may engage in active and frequent trading of
portfolio securities to achieve its principal investment strategies. Certain of
the Fund's investment strategies, including the sector-rotation strategy, may
result in increased portfolio turnover rates. The portfolio turnover rate of the
Fund may exceed 400%. A portfolio turnover rate of 400% is equivalent to the
Fund buying and selling all of its portfolio securities four times during the
course of the year. A high portfolio turnover rate (over 100%) could result in
high brokerage costs and an increase in taxable capital gains distributions to
the Fund's shareholders. Additionally, the portfolio managers associated with
the Investment Manager and the sub-advisor are responsible only for the
investment of their respective portion of the Fund's assets and thus, securities
will be purchased and sold based on each manager's independent portfolio
management decisions. This may result in purchases and sales, and concomitant
brokerage commissions, at times when they would not occur in a portfolio managed
by a single portfolio manager. See the sections on "Distributions" and "Tax
Consequences."

The percentage limitations relating to the composition of the Fund's portfolio
apply at the time the Fund acquires an investment. Other than percentage limits
relating to illiquid securities, 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.

CONVERTIBLE SECURITIES. The Fund may invest in convertible securities which
subject the Fund to the risks associated with both fixed-income securities (as
discussed below) and common stocks. To the extent that a convertible security's
investment value is greater than its conversion value, its price will be likely
to increase when interest rates fall and decrease when interest rates rise, as
with a fixed-income security. If the conversion value exceeds the investment
value, the price of the convertible security will tend to fluctuate directly
with the price of the underlying equity security. The Fund may invest up to 20%
of its assets in convertible securities rated below investment grade. Securities
rated below investment grade are commonly known as junk bonds and have
speculative characteristics. These securities may be more volatile and less
liquid than higher rated securities.

FIXED-INCOME SECURITIES. All fixed-income securities are subject to two types of
risk: credit risk and interest rate risk. Credit risk refers to the possibility
that the issuer of a security will be unable to make interest payments and/or
repay the principal on its debt. Certain investment grade fixed-income
securities have speculative characteristics.

Interest rate risk refers to fluctuations in the value of a fixed-income
security resulting from changes in the general level of interest rates. When the
general level of interest

7
<PAGE>

rates goes up, the prices of most fixed-income securities go down. When the
general level of interest rates goes down, the prices of most fixed-income
securities go up. Accordingly, a rise in the general level of interest rates may
cause the price of the Fund's fixed-income securities to fall substantially.

RIGHTS AND WARRANTS. Rights and warrants have no voting rights, receive no
dividends and have no rights with respect to the assets of the issuer. Rights
and warrants may be highly volatile and are, therefore, more susceptible to a
sharp decline in value than the underlying security. They also may be less
liquid than an investment in the underlying shares.

OPTIONS AND FUTURES. If the Fund invests in options and/or futures, its
participation in these markets would subject the Fund's portfolio to certain
risks. If the Investment Manager's and/or the sub-advisor's predictions of
movements in the direction of the stock markets are inaccurate, the adverse
consequences to the Fund (e.g., a reduction in the Fund's net asset value or a
reduction in the amount of income available for distribution) may leave the Fund
in a worse position than if these strategies were not used. Other risks inherent
in the use of options and futures include, for example, the possible imperfect
correlation between the price of options and futures contracts and movements in
the prices of the securities being hedged, and the possible absence of a liquid
secondary market for any particular instrument. Certain options may be
over-the-counter options which are options negotiated with dealers; there is no
secondary market for these investments.

[GRAPHIC OMITTED]
FUND MANAGEMENT
---------------

(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 October 31, 2000.
(end sidebar)

The Fund has retained the Investment Manager -- Morgan Stanley Dean Witter
Advisors Inc. -- to invest separate portions of the Fund's assets and to provide
administrative services and manage its business affairs. The Investment Manager
has contracted with Van Kampen Asset Management Inc., as sub-advisor, to invest
a separate portion of the Fund's assets, including the placing of orders for the
purchase and sale of portfolio securities.

The Investment Manager, which had approximately $155 billion in assets under
management as of October 31, 2000, is a wholly-owned subsidiary of Morgan
Stanley Dean Witter & Co., a preeminent global financial services firm that
maintains leading market positions in each of its three primary businesses:
securities, asset management and credit services. Its main business office is
located at Two World Trade Center, New York, NY 10048. Arden C. Armstrong,
Philip W. Friedman and Anita H. Kolleeny are the primary portfolio managers of
the respective portions of the Fund's assets managed by the Investment Manager.
Arden C. Armstrong is a Managing Director of the Investment Manager as well as a
Managing Director of Miller Anderson & Sherrerd LLP ("MAS"), an affiliate of the
Investment Manager. Ms. Armstrong has been managing portfolios for MAS and
investment advisory affiliates of MAS for over five years. Philip W. Friedman is
a Managing Director of the Investment Manager as well as a Managing Director of
Morgan Stanley Investment Management Inc. ("MSDWIM"), an affiliate of the
Investment Manager. Mr. Friedman has been managing portfolios for MSDWIM and
investment advisory affiliates of MSDWIM since 1997 and, prior thereto
(1995-1997), was Director of North American Research for Morgan Stanley & Co.
Incorporated. Ms. Kolleeny, a Managing Director and Director of

<PAGE>

the Sector Rotation Group of the Investment Manager, has been a portfolio
manager with the Investment Manager for over five years.

Van Kampen Asset Management Inc. ("Van Kampen") is a wholly-owned subsidiary of
Van Kampen Investments Inc. which has more than three million retail investor
accounts and which also manages institutional portfolios. As of October 31,
2000, Van Kampen Investments Inc. had more than approximately $84 billion under
management or supervision. Van Kampen Investments Inc. is an indirect,
wholly-owned subsidiary of Morgan Stanley Dean Witter & Co. The address of Van
Kampen Asset Management Inc. and Van Kampen Investments Inc. is 1 Parkview
Plaza, P.O. Box 5555, Oakbrook Terrace, IL 60181. Gary M. Lewis is the primary
portfolio manager of the portion of the Fund's assets managed by Van Kampen and
is assisted by Mr. Dudley Brickhouse. Mr. Lewis is a Managing Director of Van
Kampen and Van Kampen Investments Inc. and has been managing portfolios for
these entities for over five years. Mr. Brickhouse is a Vice President of Van
Kampen and Van Kampen Investments Inc. and has been a portfolio manager in
various capacities with these entities since September 1997. Prior thereto, Mr.
Brickhouse was a Vice President and portfolio manager with NationsBank
(1985-1997).

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. The fee is calculated at the annual
rate of 0.75% of the Fund's average daily net assets. The Investment Manager
pays the sub-advisor a fee, calculated by applying the annual rate of 0.60% to
the portion of the Fund's average daily net assets managed by the sub-advisor.
(If, for example, the sub-advisor manages a one-quarter portion of the Fund's
net assets, the sub-advisory fee for Van Kampen would amount to 0.15% of the
Fund's 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 and/or the sub-advisor
determine that a security's market price is not accurate, a portfolio security
is valued at its fair value, as determined under procedures established by the
Fund's Board of Trustees. In these cases, the Fund's net asset value will
reflect certain portfolio securities' fair value rather than their market price.
With respect to securities that are primarily listed on foreign exchanges, the
value of the Fund's portfolio securities may change on days when you will not be
able to purchase or sell your shares.

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

[GRAPHIC OMITTED]
UNDERWRITING
-----------------------------------------
The Fund will initially offer its shares from approximately January 25, 2001
through February 21, 2001 in an underwriting by the Fund's Distributor, Morgan
Stanley Dean Witter Distributors Inc., as the Fund's principal underwriter.
During this period, you may place orders to buy shares through the Distributor,
however, shares will not be issued until the Closing Date, which will take
place on February 26, 2001 or on such later date as agreed upon by the Fund and
the Distributor. You are not obligated to pay for the shares prior to the
Closing Date. If any orders are accompanied by payment, the payment will be
returned to you, unless you request that such payment be invested in a Morgan
Stanley Dean Witter Money Market Fund. In such case the funds will be
automatically transferred from the Money Market Fund to the Fund on the Closing
Date. You may cancel your order to purchase shares without penalty at any time
prior to the Closing Date. A continuous offering of the Fund's shares will
begin approximately two weeks after the Closing Date.

The Distributor will purchase Class B, Class C and Class D shares from the Fund
at $10.00 per share with all proceeds going to the Fund and will purchase Class
A shares at $10.00 per share plus a sales charge with the sales charge paid to
the Distributor and the net asset value of $10.00 per share going to the Fund.
The Distributor may also receive contingent deferred sales charges from future
redemptions of Class A, Class B and Class C shares.

10
<PAGE>

During the initial offering, the Fund currently anticipates suspending the
offering of its shares to investors if its assets reach a level of approximately
$2 billion.

The minimum number of Fund shares which may be purchased by any shareholder
during the initial offering period is 100 shares. Certificates for shares
purchased will not be issued unless requested by the shareholder in writing.

[GRAPHIC OMITTED]
HOW TO BUY SHARES
-----------------

(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)

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

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

The Fund may temporarily suspend the offering of its shares to new investors
whenever the Investment Manager and/or the sub-advisor determine that the
Fund's current asset level warrants such action and that a temporary suspension
would be in the best interests of shareholders. Following the suspension of
offering of shares to new investors, the Fund will continue to offer its shares
to existing shareholders and to investors participating in the Investment
Manager's mutual fund asset allocation program. The Fund may recommence
offering its shares to new investors as may be determined by the Investment
Manager and/or the sub-advisor consistent with prudent portfolio management.

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.

11
<PAGE>

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

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

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

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 All Star Growth Fund.

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, a

<PAGE>

No-Load Fund, a 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 minimum, and
should be read before investment. Since exchanges are available only into
continuously offered Morgan Stanley Dean Witter Funds, exchanges are not
available into any new Morgan Stanley Dean Witter Fund during its initial
offering period, or when shares of a particular Morgan Stanley Dean Witter Fund
are not being offered for purchase.

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

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

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

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

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

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

13
<PAGE>

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.

14
<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
Financial Advisor Advisor or other 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:
o your account number;
[GRAPHIC OMITTED] 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
Withdrawal Plan a total market value of at least $10,000, you may elect to withdraw amounts of
$25 or more, or in any whole percentage of a fund's balance (provided the
[GRAPHIC OMITTED] amount is at least $25), on a monthly, quarterly, semi-annual or annual basis,
from any fund with a balance of at least $1,000. Each time you add a fund to the
plan, you must meet the plan requirements.
-----------------------------------------------------------------------------------
Amounts withdrawn are subject to any applicable CDSC. A CDSC may be
waived under certain circumstances. See the Class B waiver categories listed in
the "Share Class Arrangements" section of this Prospectus.
-----------------------------------------------------------------------------------
To sign up for the Systematic Withdrawal Plan, contact your Morgan Stanley
Dean Witter Financial Advisor or call (800) 869-NEWS. You may terminate or
suspend your plan at any time. Please remember that withdrawals from the plan
are sales of shares, not Fund "distributions," and ultimately may exhaust your
account balance. The Fund may terminate or revise the plan at any time.
--------------------------------------------------------------------------------------------------------
</TABLE>

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

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

15
<PAGE>

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.

[GRAPHIC OMITTED]
DISTRIBUTIONS
-------------

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

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

The Fund declares income dividends separately for each Class. Distributions paid
on Class A and Class D shares usually will be higher than for Class B and Class
C because distribution fees that Class B and Class C pay are higher. Normally,
income dividends are distributed to shareholders annually. Capital gains, if
any, are usually distributed in December. The Fund, 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. No interest will accrue on uncashed checks. However,
if you purchase Fund shares prior to the record date for the distribution, and
payment for such shares is received after the record date, the distribution will
automatically be paid to you in cash, even if you did not request to receive all
distributions in cash. 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.

16
<PAGE>

[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.

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.

17
<PAGE>

The chart below compares the sales charge and annual 12b-1 fees 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 distribution (12b-1) fee of up to 0.25% of the
average daily net assets of the Class.

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

(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)

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>

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.

18
<PAGE>

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

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

You must notify your Morgan Stanley Dean Witter Financial Advisor or other
authorized financial representative, (or Morgan Stanley Dean Witter Trust FSB if
you purchase directly through the Fund) at the time a purchase order is placed,
that the purchase qualifies for the reduced 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 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

19
<PAGE>

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 Reynold's Retirement Plan
Services serves as recordkeeper under a written Recordkeeping Services
Agreement ("MSDW Eligible Plans") which have at least 200 eligible
employees.

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

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 the purchase of Fund shares, 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 persons is a beneficiary.

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
persons is a beneficiary.

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

(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)

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

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

<PAGE>

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 59 1/2); (ii)
distributions from an IRA or 403(b) Custodial Account following attainment
of age 59 1/2; or (iii) a tax-free return of an excess IRA contribution (a
"distribution" does not include a direct transfer of IRA, 403(b) Custodial
Account or retirement plan assets to a successor custodian or trustee).

o Sales of shares held for you as a participant in an 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 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

21
<PAGE>

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

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

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

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

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

<PAGE>

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

DISTRIBUTION FEE. Class C shares are subject to an annual distribution (12b-1)
fee of 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.

CLASS D SHARES Class D shares are offered without any sales charge on purchases
or sales and without any distribution (12b-1) fee. Class D shares are offered
only to investors meeting an initial investment minimum of $5 million ($25
million for MSDW Eligible Plans) and the following 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 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. With respect to Class D shares
held through the Morgan Stanley Dean Witter Choice Program, at such time as
those Fund shares are no longer held through the program, the shares will
be automatically converted into Class A shares (which are subject to higher
expenses than Class D shares) based on the then current relative net asset
values of the two classes.

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 accounts.

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

23
<PAGE>

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.

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

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

<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

All Star Growth Health Sciences Trust

American Opportunities Fund Information Fund

Capital Growth Securities Natural Resource Development Securities

Developing Growth Securities Technology Fund

Growth Fund GLOBAL/INTERNATIONAL FUNDS

Market Leader Trust Competitive Edge Fund - "Best Ideas" Portfolio

Mid-Cap Equity Trust European Growth Fund

New Discoveries Fund Fund of Funds - International Portfolio

Next Generation Trust International Fund

Small Cap Growth Fund International SmallCap Fund

Special Value Fund Japan Fund

Tax-Managed Growth Fund Latin American Growth Fund

21st Century Trend Fund Pacific Growth Fund
------------------------------------------------------------------------------------------------------------------------------------
GROWTH & INCOME FUNDS Balanced Growth Fund Total Return Trust

Balanced Income Fund Value Fund

Convertible Securities Trust Value-Added Market Series/Equity Portfolio

Dividend Growth Securities THEME FUNDS

Equity Fund Real Estate Fund

Fund of Funds - Domestic Portfolio Utilities Fund

Income Builder Fund GLOBAL FUNDS

S&P 500 Index Fund Global Dividend Growth Securities

S&P 500 Select Fund Global Utilities Fund

Strategist Fund

Total Market Index Fund
------------------------------------------------------------------------------------------------------------------------------------
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
------------------------------------------------------------------------------------------------------------------------------------
MONEY MARKET FUNDS TAXABLE MONEY MARKET FUNDS TAX-FREE MONEY MARKET 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.

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

<PAGE>

MORGAN STANLEY DEAN WITTER
ALL STAR GROWTH FUND

The Fund's Statement of Additional Information also provides additional
information about the Fund. The Statement of Additional Information, which
includes the Fund's Statement of Assets and Liabilities, is incorporated herein
by reference (legally is part of this Prospectus). For a free copy of this
document, 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 20549-0120.

(THE FUND'S INVESTMENT COMPANY ACT FILE NO. IS 811-10173)

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION
DECEMBER 8, 2000

MORGAN STANLEY DEAN WITTER
ALL STAR GROWTH FUND
-----------------------------------------------------------------------------

This Statement of Additional Information is not a Prospectus. The
Prospectus (dated December 8, 2000) for the Morgan Stanley Dean Witter All
Star Growth 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 All Star Growth Fund
Two World Trade Center
New York, NY 10048
(800) 869-NEWS
<PAGE>
TABLE OF CONTENTS
-----------------------------------------------------------------------------

<TABLE>
<CAPTION>
<S> <C> <C>
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 ........................ 13
III. Management of the Fund ........................................... 14
A. Board of Trustees ............................................ 14
B. Management Information ....................................... 14
C. Compensation ................................................. 19
IV. Control Persons and Principal Holders of Securities ............... 21
V. Investment Management and Other Services .......................... 21
A. Investment Manager and Sub-Advisor ........................... 21
B. Principal Underwriter ........................................ 22
C. Services Provided by the Investment Manager and the
Sub-Advisor .................................................. 22
D. Dealer Reallowances .......................................... 23
E. Rule 12b-1 Plan .............................................. 23
F. Other Service Providers ..................................... 26
G. Codes of Ethics .............................................. 27
VI. Brokerage Allocation and Other Practices .......................... 27
A. Brokerage Transactions ....................................... 27
B. Commissions .................................................. 27
C. Brokerage Selection .......................................... 28
D. Directed Brokerage ........................................... 28
E. Regular Broker-Dealers ....................................... 29
VII. Capital Stock and Other Securities ............................... 29
VIII. Purchase, Redemption and Pricing of Shares ....................... 29
A. Purchase/Redemption of Shares ................................ 29
B. Offering Price ............................................... 30
IX. Taxation of the Fund and Shareholders ............................. 31
X. Underwriters ...................................................... 33
XI. Calculation of Performance Data ................................... 34
XII.Financial Statements .............................................. 34
</TABLE>

2
<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 All Star Growth 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.

"Sub-Advisor" -- Van Kampen Asset Management Inc., a wholly-owned
investment advisor subsidiary of Van Kampen Investments Inc. which is an
indirect wholly-owned subsidiary of MSDW.

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

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

3
<PAGE>
I. FUND HISTORY
-----------------------------------------------------------------------------

The Fund was organized as a Massachusetts business trust, under a
Declaration of Trust, on October 5, 2000.

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

A. CLASSIFICATION

The Fund is an open-end, non-diversified management investment company
whose investment objective is to seek long-term growth of capital.

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."

CONVERTIBLE SECURITIES. The Fund may invest in fixed-income securities
which are convertible into common stock. 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).

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.

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. The Fund may enter into
forward foreign currency exchange contracts ("FORWARD CONTRACTS") to
facilitate settlement or in an attempt to limit the effect of changes in the
relationship between the U.S. dollar and the foreign currency during the
period between the date on which the security is purchased or sold and the
date on which payment is made or received. The Fund may conduct its foreign
currency exchange transactions either on a spot (i.e., cash) basis at the
spot rate prevailing in the foreign currency exchange market, or through
entering into forward contracts to purchase or sell foreign currencies. A
forward contract involves an obligation to purchase or sell a specific
currency at a future date, which may be any fixed number of days from the
date of the contract agreed upon by the parties, at a price set at the time
of the contract. These contracts are traded in the interbank market conducted
directly between currency traders (usually large commercial and investment
banks) and their customers. Forward contracts will only be entered into with
United States banks and their foreign branches, insurance companies or other
dealers or foreign banks whose assets total $1 billion or more. A forward
contract generally has no deposit requirement, and no commissions are charged
at any stage for trades.

The Investment Manager and the Sub-Advisor also may from time to time
utilize forward contracts to hedge a foreign security held in the portfolio
or a security which pays out principal tied to an exchange rate between the
U.S. dollar and a foreign currency, against a decline in value of the
applicable foreign

4
<PAGE>
currency. They also may be used to lock in the current exchange rate of the
currency in which those securities anticipated to be purchased are
denominated. At times, the Fund may enter into "cross-currency" hedging
transactions involving currencies other than those in which securities are
held or proposed to be purchased are denominated.

When management of the Fund believes that a particular foreign currency
may suffer a substantial movement against the U.S. dollar, it may enter into
a forward contract to purchase or sell, for a fixed amount of dollars or
other currency, the amount of foreign currency approximating the value of
some or all of the Fund's portfolio securities denominated in such foreign
currency. The Fund will not enter into such forward contracts or maintain a
net exposure to such contracts where the consummation of the contracts would
obligate the Fund to deliver an amount of foreign currency in excess of the
value of the Fund's portfolio securities or other assets denominated in that
currency. Under normal circumstances, consideration of the prospect for
currency parities will be incorporated into the longer term investment
decisions made with regard to overall diversification strategies. However,
management of the Fund believes that it is important to have the flexibility
to enter into such forward contracts when it determines that the best
interests of the Fund will be served. The Fund's custodian bank will place
cash, U.S. Government securities or other appropriate liquid portfolio
securities in a segregated account of the Fund in an amount equal to the
value of the Fund's total assets committed to the consummation of forward
contracts entered into under the circumstances set forth above. If the value
of the securities placed in the segregated account declines, additional cash
or securities will be placed in the account on a daily basis so that the
value of the account will equal the amount of the Fund's commitments with
respect to such contracts.

Where, for example, the Fund is hedging a portfolio position consisting of
foreign securities denominated in a foreign currency against adverse exchange
rate moves vis-a-vis the U.S. dollar, at the maturity of the forward contract
for delivery by the Fund of a foreign currency, the Fund may either sell the
portfolio security and make delivery of the foreign currency, or it may
retain the security and terminate its contractual obligation to deliver the
foreign currency by purchasing an "offsetting" contract with the same
currency trader obligating it to purchase, on the same maturity date, the
same amount of the foreign currency (however, the ability of the Fund to
terminate a contract is contingent upon the willingness of the currency
trader with whom the contract has been entered into to permit an offsetting
transaction). It is impossible to forecast the market value of portfolio
securities at the expiration of the contract. Accordingly, it may be
necessary for the Fund to purchase additional foreign currency on the spot
market (and bear the expense of such purchase) if the market value of the
security is less than the amount of foreign currency the Fund is obligated to
deliver and if a decision is made to sell the security and make delivery of
the foreign currency. Conversely, it may be necessary to sell on the spot
market some of the foreign currency received upon the sale of the portfolio
securities if its market value exceeds the amount of foreign currency the
Fund is obligated to deliver.

At times when the Fund has written a call option on a security or the
currency in which it is denominated, it may wish to enter into a forward
contract to purchase or sell the foreign currency in which the security is
denominated. A forward contract would, for example, hedge the risk of the
security on which a call option has been written declining in value to a
greater extent than the value of the premium received for the option. The
Fund will maintain with its Custodian at all times, cash, U.S. Government
securities, or other appropriate liquid portfolio securities in a segregated
account equal in value to all forward contract obligations and option
contract obligations entered into in hedge situations such as this.

The Fund will not enter into forward currency contracts or maintain a net
exposure to these contracts where the consummation of the contracts would
obligate the Fund to deliver an amount of foreign currency in excess of the
value of the Fund's portfolio securities.

Although the Fund values its assets daily in terms of U.S. dollars, it
does not intend to convert its holdings of foreign currencies into U.S.
dollars on a daily basis. It will, however, do so from time to time, and
investors should be aware of the costs of currency conversion. Although
foreign exchange dealers do not charge a fee for conversion, they do realize
a profit based on the spread between the prices at which they are buying and
selling various currencies. Thus, a dealer may offer to sell a foreign
currency to the Fund at one rate, while offering a lesser rate of exchange
should the Fund desire to resell that currency to the dealer.

5
<PAGE>
The Fund may be limited in its ability to enter into hedging transactions
involving forward contracts by the Internal Revenue Code requirements
relating to qualification as a regulated investment company.

Forward contracts may limit gains on portfolio securities that could
otherwise be realized had they not been utilized and could result in losses.
The contracts also may increase the Fund's volatility and may involve a
significant amount of risk relative to the investment of cash.

OPTION 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 currency 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 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 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 to make payment of the exercise price against delivery of the
underlying security. 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

6
<PAGE>
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 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.

Options on Foreign Currencies. The Fund may purchase and write options on
foreign currencies for purposes similar to those involved with investing in
forward foreign currency exchange contracts.

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 may
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. Certain OTC options are considered to be
illiquid investments.

Risks of Options Transactions. The successful use of options depends on
the ability of the Investment Manager and/or the Sub-Advisor, to forecast
correctly interest rates, currency exchange rates and/or market movements. If
the market value of the portfolio securities upon which call options have
been written increases, the Fund may receive a lower total return from the
portion of its portfolio upon which calls have been written than it would
have had such calls not been written. 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 decline. The covered put writer also retains the risk of
loss should the market value of the underlying security decline (or the value
of its denominated currency) 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.

7
<PAGE>
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.

The markets in foreign currency options are relatively new and the Fund's
ability to establish and close out positions on such options is subject to
the maintenance of a liquid secondary market. There can be no assurance that
a liquid secondary market will exist for a particular option at any specific
time.

The value of a foreign currency option depends upon the value of the
underlying currency relative to the U.S. dollar. As a result, the price of
the option position may vary with changes in the value of either or both
currencies and have no relationship to the investment merits of a foreign
security. Because foreign currency transactions occurring in the interbank
market involve substantially larger amounts than those that may be involved
in the use of foreign currency options, investors may be disadvantaged by
having to deal in an odd lot market (generally consisting of transactions of
less than $1 million) for the underlying foreign currencies at prices that
are less favorable than for round lots.

There is no systematic reporting of last sale information for foreign
currencies or any regulatory requirement that quotations available through
dealers or other market sources be firm or revised on a timely basis.
Quotation information available is generally representative of very large
transactions in the interbank market and thus may not reflect relatively
smaller transactions (i.e., less than $1 million) where rates may be less
favorable. The interbank market in foreign currencies is a global,
around-the-clock market. To the extent that the U.S. options markets are
closed while the markets for the underlying currencies remain open,
significant price and rate movements may take place in the underlying markets
that are not reflected in the options market.

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,
GNMA Certificates and/or on 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.

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%

8
<PAGE>
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 into which it has entered; 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 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 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 or the Sub-Advisor 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.

9
<PAGE>
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.

Futures contracts and options thereon which are purchased or sold on
foreign commodities exchanges may have greater price volatility than their
U.S. counterparts. Furthermore, foreign commodities exchanges may be less
regulated and under less governmental scrutiny than U.S. exchanges. Brokerage
commissions, clearing costs and other transaction costs may be higher on
foreign exchanges. Greater margin requirements may limit the Fund's ability
to enter into certain commodity transactions on foreign exchanges. Moreover,
differences in clearance and delivery requirements on foreign exchanges may
occasion delays in the settlement of the Fund's transactions effected on
foreign exchanges.

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. In addition to the money market securities in
which the Fund may otherwise invest, the Fund may invest 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;

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;

10
<PAGE>
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 15%
or less of the Fund's net 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 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 AAA by S&P or Aaa 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 and/or the Sub-Advisor 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.

ZERO COUPON SECURITIES. A portion of the fixed-income securities purchased
by the Fund may be zero coupon securities. Such securities are purchased at a
discount from their face amount, giving the purchaser the right to receive
their full value at maturity. The interest earned on such securities is,
implicitly, automatically compounded and paid out at maturity. While such
compounding at a constant rate eliminates the risk of receiving lower yields
upon reinvestment of interest if prevailing interest rates decline, the owner
of a zero coupon security will be unable to participate in higher yields upon
reinvestment of interest received on interest-paying securities if prevailing
interest rates rise.

A zero coupon security pays no interest to its holder during its life.
Therefore, to the extent the Fund invests in zero coupon securities, it will
not receive current cash available for distribution to shareholders. In
addition, zero coupon securities are subject to substantially greater price
fluctuations during periods

11
<PAGE>
of changing prevailing interest rates than are comparable securities which
pay interest on a current basis. Current federal tax law requires that a
holder (such as the Fund) of a zero coupon security accrue a portion of the
discount at which the security was purchased as income each year even though
the Fund receives no interest payments in cash on the security during the
year.

LENDING PORTFOLIO SECURITIES. The Fund may lend its portfolio securities
to brokers, dealers and other financial institutions, provided that the loans
are callable at any time by the Fund, and are at all times secured by cash or
cash equivalents, which are maintained in a segregated account pursuant to
applicable regulations and that are equal to at least 100% of the market
value, determined daily, of the loaned securities. The advantage of these
loans is that the Fund continues to receive the income on the loaned
securities while at the same time earning interest on the cash amounts
deposited as collateral, which will be invested in short-term obligations.
The Fund will not lend more than 25% of the value of its total assets.

As with any extensions of credit, there are risks of delay in recovery
and, in some cases, even loss of rights in the collateral should the borrower
of the securities fail financially. However, these loans of portfolio
securities will only be made to firms deemed by the Fund's management to be
creditworthy and when the income which can be earned from such loans
justifies the attendant risks. Upon termination of the loan, the borrower is
required to return the securities to the Fund. Any gain or loss in the market
price during the loan period would inure to the Fund.

When voting or consent rights which accompany loaned securities pass to
the borrower, the Fund will follow the policy of calling the loaned
securities, to be delivered within one day after notice, to permit the
exercise of the rights if the matters involved would have a material effect
on the Fund's investment in the loaned securities. The Fund will pay
reasonable finder's, administrative and custodial fees in connection with a
loan of its securities.

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 or the Sub-Advisor 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, U.S. Government securities or other liquid portfolio securities
equal in value to recognized commitments for such securities.

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.

12
<PAGE>
PRIVATE PLACEMENTS. 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 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 Investment Manager and/or the
Sub-Advisor, 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/or
rights which are attached to other securities. 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 corporations issuing them.

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.

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, as amended (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) other than percentage limits relating to illiquid securities, 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 long-term growth of capital.

The Fund may not:

1. 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.

2. 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.

3. 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).

13
<PAGE>
4. 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) purchasing
any securities on a when-issued or delayed delivery basis; (c)
purchasing or selling any futures contracts; (d) borrowing money; or
(e) lending portfolio securities.

5. Make loans of money or securities, except: (a) by the purchase of
portfolio securities; (b) by investment in repurchase agreements; or
(c) by lending its portfolio securities.

6. Purchase or sell commodities or commodities contracts except that the
Fund may purchase or sell futures contracts or options thereon.

7. 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.

In addition, as a non-fundamental policy, the Fund may not invest in other
investment companies in reliance on Section 12(d)(1)(F), 12(d)(1)(G) or
12(d)(1)(J) of the Investment Company Act.

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.

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.

14
<PAGE>

<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
-------------------------------------------- --------------------------------------------------------
<S> <C>
Michael Bozic (59) ......................... Retired; Director or Trustee of the Morgan Stanley Dean
Trustee Witter Funds; formerly Vice Chairman of Kmart
c/o Mayer Brown & Platt Corporation (since December 1998-October 2000); Chairman
Counsel to the Independent Trustees and Chief Executive Officer of Levitz Furniture
1675 Broadway Corporation (November 1995-November 1998) and President
New York, New York 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, Chief Officer of the Morgan Stanley Dean Witter Funds;
Executive Officer and Trustee formerly Chairman, Chief Executive Officer and Director
Two World Trade Center of the Investment Manager, the Distributor and MSDW
New York, New York 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 (68) ......................... Director or Trustee of the Morgan Stanley Dean Witter
Trustee Funds; formerly United States Senator
c/o Summit Ventures LLC (R-Utah)(1974-1992) and Chairman, Senate Banking
1 Utah Center Committee (1980-1986); formerly Mayor of Salt Lake City,
201 S. Main Street Utah (1971-1974); formerly Astronaut, Space Shuttle
Salt Lake City, Utah 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.

Wayne E. Hedien (66) ....................... Retired; Director or Trustee of the Morgan Stanley Dean
Trustee Witter Funds; Director of The PMI Group, Inc. (private
c/o Mayer, Brown & Platt mortgage insurance); Trustee and Vice Chairman of The
Counsel to the Independent Trustees Field Museum of Natural History; formerly associated
1675 Broadway with the Allstate Companies (1966-1994), most recently
New York, New York 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.

15
<PAGE>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
-------------------------------------------- --------------------------------------------------------

James F. Higgins* (52) ..................... Chairman of the Private Client Group of MSDW (since
Trustee August 2000); Director of the Transfer Agent and Dean
Two World Trade Center Witter Realty Inc.; Director or Trustee of the Morgan
New York, New York Stanley Dean Witter Funds (since June 2000); previously
President and Chief Operating Officer of 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., a
Trustee consulting firm; Co-Chairman and a founder of the Group
c/o Johnson Smick International, Inc. of Seven Council (G7C), an international economic
1133 Connecticut Avenue, N.W. commission; Chairman of the Audit Committee and Director
Washington, D.C. 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 Stanley
237 Park Avenue Dean Witter Funds; formerly Vice President, Bankers
New York, New York Trust Company and BT Capital Corporation; director of
various business organizations.

Philip J. Purcell* (57) .................... Chairman of the Board of Directors and Chief Executive
Trustee Officer of MSDW, Dean Witter Reynolds and Novus Credit
1585 Broadway Services Inc.; Director of the Distributor; Director or
New York, New York 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 and
Trustee Director or Trustee of the Morgan Stanley Dean Witter
c/o Mayer, Brown & Platt Funds; Director of Citizens Communications Company
Counsel to the Independent Trustees (telecommunications company); formerly Executive Vice
1675 Broadway President and Chief Investment Officer of the Home
New York, New York Insurance Company.

16
<PAGE>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
-------------------------------------------- --------------------------------------------------------

Mitchell M. Merin (47)...................... President and Chief Operating Officer of Asset
President Management of MSDW (since December 1998); President and
Two World Trade Center Director (since April 1997) and Chief Executive Officer
New York, New York (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 (May 1997-April 1999), and
Executive Vice President of Dean Witter, Discover & Co.

Barry Fink (45) ............................ General Counsel of Asset Management of MSDW (since May
Vice President, 2000); Executive Vice President (since December 1999)
Secretary and General Counsel and Secretary and General Counsel (since February 1997)
Two World Trade Center and Director (since July 1998) of the Investment Manager
New York, New York 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.

Arden C. Armstrong (45)..................... Managing Director of the Investment Manager (since
Vice President December 2000) and Managing Director of Miller Anderson
Two World Trade Center & Sherrerd LLP, an affiliate of the Investment Manager.
New York, New York

Philip W. Friedman (44)..................... Managing Director of the Investment Manager (since
Vice President December 2000) and Managing Director of Morgan Stanley
Two World Trade Center Dean Witter Investment Management, an affiliate of the
New York, New York Investment Manager (since 1997); previously Director of
North American Research for Morgan Stanley & Co.
Incorporated (1995-1997).

Anita H. Kolleeny (45)...................... Managing Director and Director of the Sector Rotation
Vice President Group of the Investment Manager; Vice President of
Two World Trade Center various Morgan Stanley Dean Witter Funds.
New York, New York

Gary M. Lewis (47).......................... Managing Director of the Investment Manager (since
Vice President December 2000) and Managing Director of Van Kampen Asset
Van Kampen Asset Management Inc. Management Inc.
1 Parkview Plaza
Oakbrook Terrace, Illinois

17
<PAGE>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
-------------------------------------------- --------------------------------------------------------

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

------------
* A Trustee who is an "interested person" 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 and Joseph J. McAlinden, Executive
Vice President and Chief Investment Officer of the Investment Manager and
Director of the Transfer Agent, are Vice Presidents of the Fund.

In addition, Lou Anne D. McInnis, Carsten Otto and Ruth Rossi, Senior Vice
Presidents and Assistant General Counsels of the Investment Manager and MSDW
Services Company, Marilyn K. Cranney and Todd Lebo, First Vice Presidents and
Assistant General Counsels of the Investment Manager and MSDW Services
Company, and Natasha Kassian, 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 director/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 auditors; directing
investigations into matters within the scope of the independent auditors'
duties, including the power to retain outside specialists; reviewing with the
independent auditors the audit plan and results of the auditing engagement;
approving professional services provided by the independent auditors and
other accounting firms prior to the performance of the services; reviewing
the independence of the independent auditors; 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.

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

18
<PAGE>
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:

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.

19
<PAGE>
CASH COMPENSATION FROM MORGAN STANLEY DEAN WITTER FUNDS

<TABLE>
<CAPTION>
TOTAL CASH
COMPENSATION
FOR SERVICES
TO 93
MORGAN STANLEY
DEAN WITTER
NAME OF INDEPENDENT TRUSTEE 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 director/trustee
referred to as an "Eligible Director/Trustee") 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 Director/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.
<F1>
The foregoing percentages may be changed by the board (1). "Eligible
Compensation" is one-fifth of the total compensation earned by such Eligible
Director/Trustee for service to the Adopting Fund in the five year period
prior to the date of the Eligible Director/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.

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 Independent Trustees, to commence upon
their retirement, from the 55 Morgan Stanley Dean Witter Funds as of the
calendar year ended December 31, 1999.
------------
(1) An Eligible Director/Trustee may elect alternative payments of his or
her retirement benefits based upon the combined life expectancy of the
Eligible Director/Trustee and his or her spouse on the date of such
Eligible Director/Trustee's retirement. In addition, the Eligible
Director/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 Director/Trustee and spouse, will be the actuarial equivalent
of the Regular Benefit.

20
<PAGE>
RETIREMENT BENEFITS FROM ALL MORGAN STANLEY DEAN WITTER FUNDS

<TABLE>
<CAPTION>
RETIREMENT ESTIMATED
BENEFITS ANNUAL
ESTIMATED ACCRUED AS BENEFITS UPON
CREDITED YEARS ESTIMATED EXPENSES RETIREMENT
OF SERVICE AT PERCENTAGE OF BY ALL FROM ALL
NAME OF RETIREMENT ELIGIBLE ADOPTING ADOPTING
INDEPENDENT TRUSTEE (MAXIMUM 10) COMPENSATION FUNDS 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 Eligible Director/Trustee's elections described
in Footnote (1) on page 19.

IV. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
-----------------------------------------------------------------------------

The Investment Manager provided the initial capital for the Fund by
purchasing 2,500 shares each of Class A, Class B, Class C and Class D of the
Fund for $25,000, respectively, on November 16, 2000. As of the date of this
Prospectus, the Investment Manager owned 100% of the outstanding shares of
the Fund. The Investment Manager may be deemed to control the Fund until such
time as it owns less than 25% of the outstanding shares of the Fund.

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 AND THE SUB-ADVISOR

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.

Van Kampen Asset Management Inc. is a sub-advisor to the Fund. Van Kampen
Asset Management is a wholly-owned subsidiary of Van Kampen Investments Inc.
which itself is an indirect wholly-owned subsidiary of MSDW. The address of
Van Kampen Asset Management Inc. and Van Kampen Investments Inc. is 1
Parkview Plaza, P.O. Box 5555, Oakbrook Terrace, Illinois 60181.

Pursuant to an Investment Management Agreement (the "Management
Agreement") with the Investment Manager, the Fund has retained the Investment
Manager to furnish investment advice concerning individual security
selections, asset allocations and overall economic trends and to manage its
portion of the Fund's assets, including the placing of orders for the
purchase and sale of portfolio securities. The Fund has also retained the
Investment Manager to provide administrative services and manage the business
affairs of the Fund. The Fund pays the Investment Manager monthly
compensation calculated daily by applying the annual rate of 0.75% 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
brokerage and 12b-1 fees) and waive the compensation provided in the
Management Agreement until such time as the Fund has $50 million of net
assets or until 6 months from the date of commencement of the Fund's
operations, whichever occurs first. The management fee is allocated among the
Classes pro rata based on the net assets of the Fund attributable to each
Class.

21
<PAGE>

Pursuant to separate a sub-advisory agreement (the "Sub-Advisory
Agreement") between the Investment Manager and Van Kampen Asset Management,
the Sub-Advisor has been retained, subject to the overall supervision of the
Investment Manager and the Trustees of the Fund, to continuously furnish
investment advice concerning individual security selections, asset
allocations and overall economic trends and to manage its respective portion
of the Fund's portfolio, including the placing of orders for the purchase and
sale of portfolio securities. As compensation for its services, the
Investment Manager pays the Sub-Advisor a fee calculated by applying the
annual rate of 0.60% to the portion of the Fund's average daily net assets
managed by the Sub-Advisor.

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 AND THE SUB-ADVISOR

The Investment Manager manages the Fund's business affairs and supervises
the investment of the Fund's assets. In addition, the Investment Manager and
the Sub-Advisor manage the investment of their respective portions of the
Fund's assets, including the placing of orders for the purchase and sale of
portfolio securities. The Investment Manager and the Sub-Advisor obtain and
evaluate 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, 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
auditors and attorneys is, in the opinion of the Investment Manager,
necessary or desirable). The Investment Manager also bears the cost of
telephone service, heat, light, power and other utilities provided to the
Fund.

22
<PAGE>

Expenses not expressly assumed by the Investment Manager under the
Management Agreement, by the Sub-Advisor under the Sub-Advisory Agreement, or
by the Distributor, will be paid by the Fund. These expenses will be
allocated among the four Classes 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 (including the Sub-Advisor); 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 or the Sub-Advisor (not
including compensation or expenses of attorneys who are employees of the
Investment Manager or the Sub-Advisor); fees and expenses of the Fund's
independent auditors; 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, including a
majority of the Independent 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%, 1.0% and 1.0% of the average
daily net assets of Class A, Class B and Class C, respectively.

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 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'

23
<PAGE>
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.

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, 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.

24
<PAGE>
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,
2001 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, 2001 and held by shareholders on December 31,
2001.

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. 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.

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. 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

25
<PAGE>
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. 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.

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 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, the Trustees
considered: (1) the benefits the Fund 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 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' 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 (2) what
services would be provided under the Plan to 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 ACCOUNTANTS

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.

26
<PAGE>
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, the
Sub-Advisor and the Distributor. As Transfer Agent and Dividend Disbursing
Agent, the Transfer Agent's responsibilities include maintaining shareholder
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, the Sub-Advisor 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
and the Sub-Advisor are 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. The Fund also
expects that securities will be purchased at times in underwritten offerings
where the price includes a fixed amount of compensation, generally referred
to as the underwriter's concession or discount. 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.

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.

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

27
<PAGE>
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.

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 and/or the Sub-Advisor 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 and/or the
Sub-Advisor rely upon their 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.

The Fund anticipates that certain of its transactions involving foreign
securities will be effected on foreign securities exchanges. Fixed
commissions on such transactions are generally higher than negotiated
commissions on domestic transactions. There is also generally less government
supervision and regulation of foreign securities exchanges and brokers than
in the United States.

In seeking to implement the Fund's policies, the Investment Manager and/or
the Sub-Advisor effect transactions with those brokers and dealers who they
believe provide the most favorable prices and are capable of providing
efficient executions. If the Investment Manager and/or the Sub-Advisor
believe the prices and executions are obtainable from more than one broker or
dealer, they 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 or the Sub-Advisor. 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 and/or the Sub-Advisor from
brokers and dealers may be of benefit to them or any of their affiliates in
the management of accounts of some of their other clients and may not in all
cases benefit the Fund directly.

The Investment Manager and the Sub-Advisor and any of their affiliates
each 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 and the
Sub-Advisor to cause purchase and sale transactions (including transactions
in certain initial and secondary public offerings to be allocated among the
assets they manage (including the Fund) in such manner as they deem
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. The Investment Manager, the Sub-Advisor and their affiliates may
operate one or more order placement facilities and each facility will
implement order allocation in accordance with the procedures described above.
From time to time, each facility may transact in a security at the same time
as other facilities are trading in that security.

D. DIRECTED BROKERAGE

Not Applicable

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<PAGE>
E. REGULAR BROKER-DEALERS

Not Applicable

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 action 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

29
<PAGE>
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.

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 assets 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 and/or the Sub-Advisor that sale or bid prices are not
reflective of a security's market value, portfolio securities are valued at
their fair value as determined in good faith under procedures established by
and under the general 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.

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.

Generally, trading in foreign securities, as well as corporate bonds, U.S.
Government securities and money market instruments, is substantially
completed each day at various times prior to the close of the New York Stock
Exchange. The values of such securities used in computing the net asset value
of the

30
<PAGE>
Fund's shares are determined as of such times. Foreign currency exchange
rates are also generally determined prior to the close of the New York Stock
Exchange. Occasionally, events which may affect the values of such securities
and such exchange rates may occur between the times at which they are
determined and the close of the New York Stock Exchange and will therefore
not be reflected in the computation of the Fund's net asset value. If events
that may affect the value of such securities occur during such period, then
these securities may be valued at their fair value as determined in good
faith under procedures established by and under the supervision of the
Trustees.

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.

The Fund's foreign currency gains or losses from forward contracts,
futures contracts that are not "regulated futures contracts," and unlisted
options, and certain other foreign currency gains or losses derived with
respect to fixed-income securities, are treated as ordinary income or loss.
In general, such foreign currency gains or losses will increase or decrease
the amount of the Fund's income available to be distributed to shareholders
as ordinary income, rather than increasing or decreasing the amount of the
Fund's net capital gain. Additionally, if such foreign currency losses exceed
other ordinary income during a taxable year, the Fund would not be able to
make ordinary income distribution for the year.

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

31
<PAGE>
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%.

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 sale or redemption 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

32
<PAGE>
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 Distributor, Morgan Stanley Dean Witter Distributors Inc.
(which has the same address as the Investment Manager), is the principal
underwriter of the Fund's shares and has agreed to purchase up to 10,000,000
shares from the Fund, which number may be increased or decreased in
accordance with the Underwriting Agreement. The Underwriting Agreement
provides that the obligation of the Distributor is subject to certain
conditions precedent (such as the filling of certain forms and documents
required by various federal and state agencies and the rendering of certain
opinions of counsel) and that the Distributor will be obligated to purchase
the shares of the Fund on February 26, 2001, or such other date as may be
agreed upon between the Distributor and the Fund and to purchase shares of
the Fund at a later date to be agreed upon between the Distributor and the
Fund (the "Closing Date"). Shares will not be issued and dividends will not
be declared by the Fund until after the Closing Date.

The Distributor may, however, receive contingent deferred sales charges
for future redemptions of Class A, Class B and Class C shares (see "Purchase
of Fund Shares--Continuous Offering" in the Prospectus).

The Distributor shall, regardless of its expected underwriting commitment,
be entitled and obligated to purchase only the number of shares for which
purchase orders have been received by the Distributor prior to 2:00 p.m., New
York time, on the third business day preceding the Closing Date, or such
other date as may be agreed to between the parties.

The minimum number of Fund shares which may be purchased pursuant to this
offering is 100 shares. Certificates for shares purchased will not be issued
unless requested by the shareholder in writing.

During the initial offering, the Fund currently anticipates suspending the
offering of shares to investors if its assets reach a level of approximately
$2 billion.

The Distributor has agreed to pay certain expenses of the initial offering
and the subsequent Continuous Offering of the Fund's shares. The Fund has
agreed to pay certain compensation to the Distributor pursuant to a Plan of
Distribution pursuant to Rule 12b-1 under the Act to compensate the
Distributor for services it renders and the expenses it bears under the
Underwriting Agreement. The Fund will bear the cost of initial typesetting,
printing and distribution of Prospectuses and Statements of Additional
Information and supplements thereto to shareholders. The Fund has agreed to
indemnify the Distributor against certain liabilities, including liabilities
under the Securities Act of 1933, as amended.

A continuous offering of the Fund's shares will commence approximately two
weeks after the Closing Date. 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."

33
<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. The ending redeemable value is reduced by any contingent deferred
sales charge ("CDSC") at the end of the one, five, ten year or other period.
For the purpose of this calculation, it is assumed that all dividends and
distributions are reinvested. The formula for computing the average annual
total return involved a percentage obtained by dividing the ending redeemable
value by the amount of the initial investment (which in the case of Class A
shares is reduced by the Class A initial sales charge), taking a root of the
quotient (which the root is equivalent to the number of years in the period)
and subtracting 1 from the result.

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 average
annual total return of the Fund may be calculated in the manner described
above, but without deduction for any applicable sales charge.

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 periods 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 distribution are
reinvested. The formula for computing aggregate total return involves a
percentage obtained by dividing the ending value (without reduction for any
sale charge) by the initial $1,000 investment and subtracting 1 from the
result.

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.

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 Statement of Assets and Liabilities of the Fund at November
17, 2000 included in this Statement of Additional Information and
incorporated by reference in the Prospectus has 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.

34
<PAGE>
MORGAN STANLEY DEAN WITTER ALL STAR GROWTH FUND
Statement of Assets and Liabilities as of November 17, 2000
-----------------------------------------------------------------------------

<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Cash.................................................... $100,000
Deferred offering costs (Note 1)........................ 149,666
----------
Total Assets........................................... 249,666
----------
LIABILITIES:
Offering costs payable (Note 1)......................... 149,666
Commitments (Notes 1 and 2)............................. --
----------
Total Liabilities...................................... 149,666
----------
Net Assets............................................. $100,000
==========
CLASS A SHARES:
Net Assets............................................... $ 25,000
Shares Outstanding (unlimited authorized, $.01 par
value).................................................. 2,500
NET ASSET VALUE PER SHARE............................... $ 10.00
==========
MAXIMUM OFFERING PRICE
(net asset value plus 5.54% of net asset value) ........ $ 10.55
==========
CLASS B SHARES:
Net Assets............................................... $ 25,000
Shares Outstanding (unlimited authorized, $.01 par
value).................................................. 2,500
NET ASSET VALUE PER SHARE............................... $ 10.00
==========
CLASS C SHARES:
Net Assets............................................... $ 25,000
Shares Outstanding (unlimited authorized, $.01 par
value).................................................. 2,500
NET ASSET VALUE PER SHARE............................... $ 10.00
==========
CLASS D SHARES:
Net Assets............................................... $ 25,000
Shares Outstanding (unlimited authorized, $.01 par
value).................................................. 2,500
NET ASSET VALUE PER SHARE............................... $ 10.00
==========
</TABLE>

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

NOTE 1--Morgan Stanley Dean Witter All Star Growth Fund (the "Fund") was
organized as a Massachusetts business trust on October 5, 2000. To date the
Fund has had no transactions other than those relating to organizational
matters and the sale of 2,500 shares of beneficial interest for $25,000 of
each class of the Fund to Morgan Stanley Dean Witter Advisors Inc. (the
"Investment Manager"). The Fund is registered under the Investment Company
Act of 1940, as amended (the "Act"), as a non-diversified, open-end
management investment company. The investment objective of the Fund is
long-term growth of capital. The Fund seeks to achieve its investment
objective by investing at least 65% of its total assets in common stocks of
companies that offer the potential for superior growth. Estimated
organizational expenses of the Fund in the amount of approximately $24,100
incurred prior to the offering of the Fund's shares will be absorbed by the
Investment Manager. It is currently estimated that the Investment Manager
will incur, and be reimbursed, approximately $149,666 by the Fund in offering
costs. Actual costs could differ from these estimates. Offering costs will be
deferred and amortized by the Fund on the straight-line method over the
period of benefit of approximately one year or less from the date of
commencement of operations.

NOTE 2--The Fund has entered into an Investment Management Agreement with the
Investment Manager. The Investment Manager has entered into separate
Sub-Advisory Agreements with Miller, Anderson & Sherrerd, LLP, Morgan Stanley
Dean Witter Investment Management Inc. and Van Kampen Asset Management Inc.
(the "Sub-Advisors"), each of which is an affiliate of the Investment
Manager. The Investment Manager and the Sub-Advisors will provide investment
advice and portfolio management relating to the Fund's investments in
securities, including the placing of orders for the purchase and sale of
portfolio securities, subject to the overall supervision of the Investment
Manager.

35
<PAGE>
As full compensation for the services and facilities furnished to the Fund
and expenses of the Fund incurred by the Investment Manager, the Fund will
pay the Investment Manager monthly compensation calculated daily by applying
the annual rate of 0.75% to the Fund's daily net assets. As compensation for
the services to be provided pursuant to the Sub-Advisory Agreements, the
Investment Manager pays each Sub-Advisor a fee calculated by applying the
annual rate of 0.60% to the portion of the Fund's average daily net assets
managed by the Sub-Advisor.

The Investment Manager has undertaken to assume all operating expenses
(except for the Plan of Distribution fees and brokerage fees) and to waive
the compensation provided for in its Investment Management Agreement until
such time as the Fund has $50 million of net assets or until six months from
the date of commencement of the Fund's operations, whichever occurs first.

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.

In the case of Class A shares and Class C shares, expenses incurred
pursuant to the Plan in any calendar year in excess of 0.25% or 1.0% of the
average daily net assets of Class A or Class C, respectively, will not be
reimbursed by the Fund through payments in any subsequent year, except that
expenses representing a gross sales credit to Morgan Stanley Dean Witter
Financial Advisors or other selected broker-dealer representatives may be
reimbursed in the subsequent calendar year.

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

36
<PAGE>
INDEPENDENT AUDITORS' REPORT
-----------------------------------------------------------------------------

The Shareholders and Board of Trustees,
Morgan Stanley Dean Witter All Star Growth Fund:

We have audited the accompanying statement of assets and liabilities of
Morgan Stanley Dean Witter All Star Growth Fund (the "Fund") as of November
16, 2000. This financial statement is the responsibility of the Fund's
management. Our responsibility is to express an opinion on this financial
statement 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 statement is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statement. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

In our opinion, the financial statement referred to above presents fairly, in
all material respects, the financial position of Morgan Stanley Dean Witter
All Star Growth Fund as of November 16, 2000 in conformity with accounting
principles generally accepted in the United States of America.

Deloitte & Touche LLP
New York, New York
November 17, 2000