<PAGE>
Filed Pursuant to Rule 497(e)
Registration File No.: 2-66269
PROSPECTUS - APRIL 26, 1999
Morgan Stanley Dean Witter
----------------------------------------------------------------
AMERICAN OPPORTUNITIES FUND
[GRAPHIC OMITTED]
A MUTUAL FUND THAT SEEKS LONG-TERM CAPITAL GROWTH CONSISTENT WITH AN EFFORT TO
REDUCE VOLATILITY
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this Prospectus. Any
representation to the contrary is a criminal offense.
<PAGE>
CONTENTS
<TABLE>
<S> <C>
The Fund Investment Objective .................................... 1
Principal Investment Strategies ......................... 1
Principal Risks ......................................... 2
Past Performance ........................................ 3
Fees and Expenses ....................................... 4
Additional Investment Strategy Information .............. 5
Additional Risk Information ............................. 5
Fund Management ......................................... 8
Shareholder Information Pricing Fund Shares ..................................... 9
How to Buy Shares ....................................... 9
How to Exchange Shares ..................................11
How to Sell Shares ......................................13
Distributions ...........................................15
Tax Consequences ........................................15
Share Class Arrangements ................................16
Financial Highlights .........................................................24
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>
FUND CATEGORY
--------------
[X] GROWTH
[ ] Growth and Income
[ ] Income
[ ] Money Market
<PAGE>
THE FUND
INVESTMENT OBJECTIVE
- --------------------------------
Morgan Stanley Dean Witter American Opportunities Fund is a mutual
fund that seeks long-term capital growth consistent with an effort to
reduce volatility. There is no guarantee that the Fund will achieve
this objective. The Fund was formerly named Morgan Stanley Dean
Witter American Value Fund.
PRINCIPAL INVESTMENT STRATEGIES
- --------------------------------------------
The Fund will normally invest at least 65% of its assets in a
diversified portfolio of common stocks. The Fund's "Investment
Manager," Morgan Stanley Dean Witter Advisors Inc., invests in
companies that it believes have earnings growth potential. The
Investment Manager utilizes a process, known as sector rotation,
that emphasizes industry selection over individual company selection.
The Investment Manager invests in those industries that it believes
will have the strongest relative earnings growth potential given the
projected economic outlook. After selecting the Fund's target
industries, the Investment Manager then selects specific companies
within those industries whose prospects are deemed attractive after
assessing company fundamentals and valuation screens.
(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)
Sector Rotation. The Investment Manager will utilize a sector
rotation process 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. First, the Investment Manager attempts to identify at
what stage of the business cycle the economy is in and which
industries have historically outperformed the overall market during
that stage of the cycle. To accomplish this task, the Investment
Manager establishes an economic forecast based on its short term and
long term views of the domestic and global economic cycles. As part
of this process, the Investment Manager will attempt to identify
secular trends, such as shifting demographics or technological
developments, that could add clarity to its analysis. Also considered
are competitive industry variables, such as supply and demand,
pricing trends and new product cycles.
Common stock is a share ownership or equity interest in a
corporation. It may or may not pay dividends, as some companies
reinvest all of their profits back into their businesses, while
others pay out some of their profits to shareholders as dividends.
In addition, the Fund may invest up to 35% of its assets in
convertible debt and preferred securities; fixed-income securities
(including zero coupon bonds) such as U.S. government securities and
investment grade corporate debt securities; and foreign securities
(including depository receipts).
1
<PAGE>
In pursuing the Fund's investment objective, the Investment Manager
has considerable leeway in deciding which investments it buys, holds
or sells on a day-to-day basis -- and which trading or investment
strategies it uses. For example, the Investment Manager in its
discretion may determine to use some permitted trading or investment
strategies while not using others.
PRINCIPAL RISKS
- --------------------------
The Fund's share price will fluctuate with changes in the market
value of the Fund's portfolio securities. When you sell Fund shares,
they may be worth less than what you paid for them and, accordingly,
you can lose money investing in this Fund.
A principal risk of investing in the Fund is associated with its
common stock investments. In general, stock values fluctuate in
response to activities specific to the company as well as general
market, economic and political conditions. Stock prices can fluctuate
widely in response to these factors. The Fund's emphasis on
industries may cause its performance to be more sensitive to
developments affecting particular industries than a fund that places
primary emphasis on individual companies.
While the Fund principally invests in large, established companies,
the Fund may invest in medium sized companies and small sized
companies. Investing in securities of medium and small sized growth
companies involves greater risk than is customarily associated with
investing in more established companies. These stocks may be more
volatile and have returns that vary, sometimes significantly, from
the overall stock market.
The performance of the Fund also will depend on whether the
Investment Manager is successful in pursuing the Fund's investment
strategy. The Fund is also subject to other risks from its
permissible investments including the risks associated with its
fixed-income securities, convertible securities and foreign
securities investments. For more information about these risks, see
the "Additional Risk Information" section.
Shares of the Fund are not bank deposits and are not guaranteed or
insured by any bank, governmental entity, or the FDIC.
2
<PAGE>
PAST PERFORMANCE
- ----------------------------
The bar chart and table below provide some indication of the risks of
investing in the Fund. The Fund's past performance does not indicate
how the Fund will perform in the future.
(sidebar)
ANNUAL TOTAL RETURNS
This chart shows how the performance of the Fund's Class B shares has varied
from year to year over the past 10 calendar years.
(end sidebar)
[GRAPHIC OMITTED]
ANNUAL TOTAL RETURNS -- CALENDAR YEARS
1989 25.39%
1990 -0.90%
1991 56.26%
1992 3.84%
1993 18.70%
1994 -6.75%
1995 42.20%
1996 10.53%
1997 31.55%
1998 31.07%
The bar chart
reflects the
performance of
Class B shares;
the performance of
the other Classes
will differ
because the
Classes have
different ongoing
fees. The
performance
information in the
bar chart does not
reflect the
deduction of sales
charges; if these
amounts were
reflected, returns
would be less than
shown.
During the periods shown in the bar chart, the highest return for a
calendar quarter was 21.98% (quarter ended May 31, 1991), and the
lowest return for a calendar quarter was -11.99% (quarter ended
September 30, 1990). Year-to-date total return as of March 31, 1999
was 8.74%.
(sidebar)
AVERAGE ANNUAL TOTAL RETURNS
This table compares the Fund's average annual returns with those of a broad
measure of market performance over time. The Fund's returns include the maximum
applicable sales charge for each Class and assume you sold your shares at the
end of each period.
(end sidebar)
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIOD ENDED
THE 1998 CALENDAR YEAR)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
- ---------------------------------------------------------------------------------
<S> <C> <C> <C>
Class A 24.86% -- --
- ---------------------------------------------------------------------------------
Class B1 26.07% 20.18% 19.72%
- ---------------------------------------------------------------------------------
Class C 29.78% -- --
- ---------------------------------------------------------------------------------
Class D 32.12% -- --
- ---------------------------------------------------------------------------------
S&P 500 Index2 28.58% 24.05% 19.91%
- ---------------------------------------------------------------------------------
Lipper Growth Funds Index3 25.69% 19.82% 17.21%
- ---------------------------------------------------------------------------------
</TABLE>
1 Prior to July 28, 1997, the Fund only issued Class B shares.
2 The Standard & Poor's (Registered Tracemark) 500 Composite Stock Price
Index is a broad-based index, the performance of which is based on the
average performance of 500 widely hold common stocks. The performance of
the Index does not include any expenses, fees or charges. The Index is
unmanaged and should not be considered an investment.
3 The Lipper Growth Funds Index is an equally-weighted performance index
of the largest qualifying funds in the Lipper Growth Funds objective. The
returns for the Index have been adjusted to reflect the reinvestment of
dividends. The Index is unmanaged and should not be considered an
investment.
3
<PAGE>
FEES AND EXPENSES
- -----------------------------
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 table below briefly describes the fees and expenses
that you may pay if you buy and hold shares of the Fund. 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.
(end sidebar)
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS D
<S> <C> <C> <C> <C>
SHAREHOLDER FEES
- ------------------------------------------------------------------------------------------------------
Maximum sales charge (load) imposed on
purchases (as a percentage of offering price) 5.25%1 None None None
- ------------------------------------------------------------------------------------------------------
Maximum deferred sales charge (load) (as a
percentage based on the lesser of the offering
price or net asset value at redemption) None2 5.00%3 1.00%4 None
- ------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
- ------------------------------------------------------------------------------------------------------
Management fee 0.49% 0.49% 0.49% 0.49%
- ------------------------------------------------------------------------------------------------------
Distribution and service (12b-1) fees 0.25% 0.78% 1.00% None
- ------------------------------------------------------------------------------------------------------
Other expenses 0.12% 0.12% 0.12% 0.12%
- ------------------------------------------------------------------------------------------------------
Total annual Fund operating expenses 0.86% 1.39% 1.61% 0.61%
- ------------------------------------------------------------------------------------------------------
</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 on sales made 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 to sales made within one year after purchase.
(sidebar)
ANNUAL FUND
OPERATING EXPENSES
These expenses are deducted from the Fund's assets and are based on expenses
paid for the fiscal year ended December 31, 1998.
(end sidebar)
4
<PAGE>
EXAMPLE
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the Fund, your
investment has a 5% return each year, and the Fund's operating
expenses remain the same. Although your actual costs may be higher or
lower, the tables below show your costs at the end of each period
based on these assumptions depending upon whether or not you sell
your shares at the end of each period.
<TABLE>
<CAPTION>
IF YOU SOLD YOUR SHARES: IF YOU HELD YOUR SHARES:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------- --------------------------------------
CLASS A $608 $784 $975 $1,527 $608 $784 $975 $1,527
- ------------------------------------------------- --------------------------------------
CLASS B $642 $740 $961 $1,669 $142 $440 $761 $1,669
- ------------------------------------------------- --------------------------------------
CLASS C $264 $508 $876 $1,910 $164 $508 $876 $1,910
- ------------------------------------------------- --------------------------------------
CLASS D $62 $195 $340 $ 761 $62 $195 $340 $761
- ------------------------------------------------- --------------------------------------
</TABLE>
ADDITIONAL INVESTMENT STRATEGY INFORMATION
- ---------------------------------------------------------
The Fund seeks long-term capital growth consistent with an effort to
reduce volatility. There is no guarantee that the Fund will achieve
this objective.
This section provides additional information concerning the Fund's
principal strategies.
Defensive Investing. The Fund may take temporary "defensive"
positions in attempting to respond to adverse market conditions. The
Fund may invest any amount of its total assets in cash or money
market instruments in a defensive posture when the Investment Manager
believes it is advisable to do so. Although taking a defensive
posture is designed to protect the Fund from an anticipated market
downturn, it could have the effect of reducing the benefit from any
upswing in the market.
Portfolio Turnover. The Fund may engage in active and frequent
trading of portfolio securities to achieve its principal investment
strategies. The portfolio turnover rate is not expected to exceed
300% annually under normal circumstances. A high turnover rate will
increase Fund brokerage costs. It also may increase the Fund's
capital gains, which are passed along to Fund shareholders as
distributions. This, in turn, may increase your tax liability as a
Fund shareholder. See the sections on "Distributions" and "Tax
Consequences."
The percentage limitations relating to the composition of the Fund's
portfolio referenced in "Principal Investment Strategies" apply at
the time the Fund acquires an investment. Subsequent percentage
changes that result from market fluctuations or
5
<PAGE>
changes in total assets 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.
ADDITIONAL RISK INFORMATION
- ----------------------------------------
As discussed in the "Principal Risks" section, a principal risk of
investing in the Fund is associated with its common stock
investments. This section provides additional information regarding
the principal risks of investing in the Fund.
Fixed-Income Securities. Principal risks of investing in the Fund are
associated with its fixed-income investments. All fixed-income
securities, such as corporate debt, are subject to two types of risk:
credit risk and interest rate risk. Credit risk refers to the
possibility that the issuer of a security will be unable to make
interest payments and repay the principal on its debt.
Interest rate risk refers to fluctuations in the value of a
fixed-income security resulting from changes in the general level of
interest rates. When the general level of interest rates goes up, the
prices of most fixed-income securities go down. When the general
level of interest rates goes down, the prices of most fixed-income
securities go up. (Zero coupon securities are typically subject to
greater price fluctuations than comparable securities that pay
interest.)
Convertible Securities. The Fund also may invest a portion of its
assets in convertible securities, which are securities that generally
pay interest and may be converted into common stock. These securities
may carry risks associated with both common stock and fixed-income
securities.
Foreign Securities. The Fund's investments in foreign securities
(including depository receipts) may 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 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.
6
<PAGE>
companies. Finally, in the event of a default of any foreign debt
obligations, it may be more difficult for the Fund to obtain or
enforce a judgment against the issuers of the securities.
Securities of foreign issuers may be less liquid than comparable
securities of U.S. issuers and, as such, their price changes may be
more volatile. Furthermore, foreign exchanges and broker-dealers are
generally subject to less government and exchange scrutiny and
regulation than their U.S. counterparts. In addition, differences in
clearance and settlement procedures in foreign markets may occasion
delays in settlements of the Fund's trades effected in those markets.
Many European countries have adopted or are in the process of
adopting a single European currency, referred to as the "euro." The
consequences of the euro conversion for foreign exchange rates,
interest rates and the value of European securities the Fund may
purchase are presently unclear. The consequences may adversely affect
the value and/or increase the volatility of securities held by the
Fund.
Year 2000. The Fund could be adversely affected if the computer
systems necessary for the efficient operation of the Investment
Manager, the Fund's other service providers and the markets and
individual and governmental issuers in which the Fund invests do not
properly process and calculate date-related information from and
after January 1, 2000. While year 2000-related computer problems
could have a negative effect on the Fund, the Investment Manager and
affiliates are working hard to avoid any problems and to obtain
assurances from their service providers that they are taking similar
steps.
In addition, it is possible that the markets for securities in which
the Fund invests may be detrimentally affected by computer failures
throughout the financial services industry beginning January 1, 2000.
Improperly functioning trading systems may result in settlement
problems and liquidity issues. In addition, corporate and
governmental data processing errors may result in production problems
for individual companies and overall economic uncertainties. Earnings
of individual issuers will be affected by remediation costs, which
may be substantial and may be reported inconsistently in U.S. and
foreign financial statements. Accordingly, the Fund's investments may
be adversely affected.
7
<PAGE>
FUND MANAGEMENT
- ----------------------------
The Fund has retained the Investment Manager -- Morgan
Stanley Dean Witter Advisors Inc. -- to provide
administrative services, manage its business affairs
and invest its assets, including the placing of orders
for the purchase and sale of portfolio securities. The
Investment Manager is a wholly-owned subsidiary of
Morgan Stanley Dean Witter & Co., a preeminent global
financial services firm that maintains leading market
positions in each of its three primary businesses:
securities, asset management and credit services. Its
main business office is located at Two World Trade
Center, New York, New York 10048.
(sidebar)
MORGAN STANLEY DEAN WITTER ADVISORS INC.
The Investment Manager is widely recognized as a leader in the mutual fund
industry and together with Morgan Stanley Dean Witter Services Company Inc.,
its wholly-owned subsidiary, has more than $129.2 billion in assets under
management or administration as of March 31, 1999.
(end sidebar)
The Fund's portfolio is managed within the Investment
Manager's Sector Rotation Group. Anita H. Kolleeny, a
Senior Vice President of the Investment Manager and
head of the Sector Rotation Group, has been the
primary portfolio manager of the Fund for over five
years. Ms. Kolleeny is assisted by Michelle Kaufman, a
Vice President of the Investment Manager since 1993
and a member of the Sector Rotation Group.
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
based on the Fund's average daily net assets. For the
fiscal year ended December 31, 1998, the Fund accrued
total compensation to the Investment Manager amounting
to 0.49% of the Fund's average daily net assets.
8
<PAGE>
SHAREHOLDER INFORMATION
PRICING FUND SHARES
- -------------------------------
The price of Fund shares (excluding sales charges), called "net asset
value," is based on the value of the Fund's portfolio securities.
While the assets of each Class are invested in a single portfolio of
securities, the net asset value of each Class will differ because the
Classes have different ongoing distribution fees.
The net asset value per share of the Fund is determined once daily at
4:00 p.m. Eastern time on each day that the New York Stock Exchange
is open (or, on days when the New York Stock Exchange closes prior to
4:00 p.m., at such earlier time). Shares will not be priced on days
that the New York Stock Exchange is closed.
The value of the Fund's portfolio securities is based on the
securities' market price when available. When a market price is not
readily available, including circumstances under which the Investment
Manager determines that a security's market price is not accurate, a
portfolio security is valued at its fair value, as determined under
procedures established by the Fund's Board of Trustees. In these
cases, the Fund's net asset value will reflect certain portfolio
securities' fair value rather than their market price. In addition,
if the Fund holds securities 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 pricing policy 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.
HOW TO BUY SHARES
- ------------------------------
You may open a new account to buy Fund shares or buy
additional Fund shares for an existing account by
contacting your Morgan Stanley Dean Witter Financial
Advisor or other authorized financial representative.
Your Financial Advisor will assist you, step-by-step,
with the procedures to invest in the Fund. You may
also purchase shares directly by calling the Fund's
transfer agent and requesting an application.
(sidebar)
CONTACTING A FINANCIAL ADVISOR
If you are new to the Morgan Stanley Dean Witter Family of Funds and would like
to contact a Financial Advisor, call (800) THE-DEAN 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.deanwitter.com/funds
(end sidebar)
Because every investor has different immediate
financial needs and long-term investment goals, the
Fund offers investors four Classes of shares: Classes
A, B, C and D. Class D shares are only offered to a
limited group of investors. Each Class of shares
offers a distinct structure of sales charges,
distribution and service fees, and other features that
are designed to address a variety of needs. Your
Financial Advisor or other authorized financial
representative can
9
<PAGE>
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.
When you buy Fund shares, the shares are purchased at the next share
price calculated, less any applicable front-end sales charge, after
we receive your investment order in proper form. We reserve the right
to reject any order for the purchase of Fund shares.
(sidebar)
EASYINVEST(service mark)
A purchase plan that allows you to transfer money automatically from your
checking or savings account or from a Money Market Fund on a semi-monthly,
monthly or quarterly basis. Contact your Morgan Stanley Dean Witter Financial
Advisor for further information about this service.
(end sidebar)
MINIMUM INVESTMENT AMOUNTS
<TABLE>
<CAPTION>
MINIMUM INVESTMENT
----------------------
INVESTMENT OPTIONS INITIAL ADDITIONAL
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Regular Accounts $1,000 $ 100
- -------------------------------------------------------------------------------------------------
Individual Retirement
Accounts: Regular IRAs $1,000 $ 100
Education IRAs $500 $ 100
- -------------------------------------------------------------------------------------------------
EasyInvest(service mark)
(Automatically from your checking or savings account
or Money Market Fund) $ 100* $ 100*
- -------------------------------------------------------------------------------------------------
</TABLE>
* Provided your schedule of investments totals $1,000 in twelve months.
There is no minimum investment amount if you purchase Fund shares
through: (1) the Investment Manager's mutual fund asset allocation
plan, (2) a program, approved by the Fund's distributor, in which you
pay an asset-based fee for advisory, administrative and/or brokerage
services, or (3) employer-sponsored employee benefit plan accounts.
Investment Options for Certain Institutional and Other
Investors/Class D Shares. To be eligible to purchase Class D shares,
you must qualify under one of the investor categories specified in
the "Share Class Arrangements" section of this Prospectus.
Three Day Settlement. Fund shares are sold through the Fund's
distributor, Morgan Stanley Dean Witter Distributors Inc., on a
normal three business day basis; that is, your payment for Fund
shares is due on the third business day (settlement day) after you
place a purchase order.
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 American Opportunities Fund.
10
<PAGE>
o Mail the letter and check to Morgan Stanley Dean Witter Trust FSB
at P.O. Box 1040, Jersey City, NJ 07303.
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, Money Market Fund
or Short-Term U.S. Treasury Trust, without the imposition of an
exchange fee. See the inside back cover of this Prospectus for each
Morgan Stanley Dean Witter Fund's designation as a Multi-Class Fund,
No-Load Fund or Money Market Fund. If a Morgan Stanley Dean Witter
Fund is not listed, consult the inside back cover of that Fund's
Prospectus for its designation. For purposes of exchanges, shares of
FSC Funds (subject to a front-end sales charge) are treated as Class
A shares of a Multi-Class Fund.
Exchanges may be made after shares of the Fund acquired by purchase
have been held for thirty days. There is no waiting period for
exchanges of shares acquired by exchange or dividend reinvestment.
The current Prospectus for each fund describes its investment
objective(s), policies and investment minimums, and should be read
before investment.
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. Certain services normally available to shareholders of Money
Market Funds, including the check writing privilege, are 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
11
<PAGE>
requiring various forms of personal identification such as name,
mailing address, social security or other tax identification number.
Telephone instructions also may be recorded.
Telephone instructions will be accepted if received by the Fund's
transfer agent between 9:00 a.m. and 4:00 p.m. Eastern time, on any
day the New York Stock Exchange is open for business. During periods
of drastic economic or market changes, it is possible that the
telephone exchange procedures may be difficult to implement, although
this has not been the case with the Fund in the past.
Margin Accounts. If you have pledged your Fund shares in a margin
account, contact your Morgan Stanely Dean Witter Financial Advisor or
other authorized financial representative regarding restrictions on
the exchange of such shares.
Tax Considerations of Exchanges. If you exchange shares of the Fund
for shares of another Morgan Stanley Dean Witter Fund there are
important tax considerations. For tax purposes, the exchange out of
the Fund is considered a sale of the Fund's shares -- and the
exchange into the other Fund is considered a purchase. As a result,
you may realize a capital gain or loss.
You should review the "Tax Consequences" section and consult your own
tax professional about the tax consequences of an exchange.
Frequent Exchanges. A pattern of frequent exchanges may result in the
Fund limiting or prohibiting, at its discretion, additional purchases
and/or exchanges. The Fund will notify you in advance of limiting
your exchange privileges.
CDSC Calculations on Exchanges. See the "Share Class Arrangements"
section of this Prospectus for a discussion of how applicable
contingent deferred sales charges (CDSCs) are calculated for shares
of one Morgan Stanley Dean Witter Fund that are exchanged for shares
of another.
For further information regarding exchange privileges, you should
contact your Morgan Stanley Dean Witter Financial Advisor or call
(800) 869-NEWS.
12
<PAGE>
HOW TO SELL SHARES
- ------------------------------
You can sell some or all of your Fund shares at any time. If you sell
Class A, Class B or Class C shares, your net sale proceeds are
reduced by the amount of any applicable CDSC. Your shares will be
sold at the next price calculated after we receive your order to sell
as described below.
<TABLE>
<CAPTION>
OPTIONS PROCEDURES
- --------------------- --------------------------------------------------------------------------------------------
<S> <C>
Contact Your To sell your shares, simply call your Morgan Stanley Dean Witter Financial Advisor or
Financial Advisor other authorized financial representative.
--------------------------------------------------------------------------------------------
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;
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,
New Jersey 07303. If you hold share certificates, you must return the certificates, along
with the letter and any required additional documentation.
--------------------------------------------------------------------------------------------
A check will be mailed to the name(s) and address in which the account is registered, or
otherwise according to your instructions.
--------------------------------------------------------------------------------------------
Systematic If your investment in all of the Morgan Stanley Dean Witter Family of Funds has a total
Withdrawal Plan market value of at least $10,000, you may elect to withdraw amounts of $25 or more,
or in any whole percentage of a Fund's balance (provided the amount is at least $25), on
a monthly, quarterly, semi-annual or annual basis, from any Fund with a balance of at least
$1,000. Each time you add a Fund to the plan, you must meet the plan requirements.
--------------------------------------------------------------------------------------------
Amounts withdrawn are subject to any applicable CDSC. A CDSC may be waived under
certain circumstances. See the Class B waiver categories listed in the "Share Class
Arrangements" section of this Prospectus.
--------------------------------------------------------------------------------------------
To sign up for the systematic withdrawal plan, contact your Morgan Stanley Dean Witter
Financial Advisor or call (800) 869-NEWS. You may terminate or suspend your plan at
any time. Please remember that withdrawals from the plan are sales of shares, not Fund
"distributions," and ultimately may exhaust your account balance. The Fund may
terminate or revise the plan at any time.
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
Payment for Sold Shares. After we receive your complete instructions
to sell as described above, a check will be mailed to you within
seven days, although we will attempt to make payment within one
business day. Payment may also be sent to your brokerage account.
Payment may be postponed or the right to sell your shares suspended
under unusual circumstances. If you request to sell shares that were
recently purchased by check, payment of the sale proceeds may be
delayed for the minimum time needed to verify that the check has been
honored (not more than fifteen days from the time we receive the
check).
Tax Considerations. Normally, your sale of Fund shares is subject to
federal and state income tax. You should review the "Tax
Consequences" section of this Prospectus and consult your own tax
professional about the tax consequences of a sale.
Reinstatement Privilege. If you sell Fund shares and have not
previously exercised the reinstatement privilege, you may, within 35
days after the date of sale, invest any portion of the proceeds in
the same Class of Fund shares at their net asset value and receive a
pro rata credit for any CDSC paid in connection with the sale.
Involuntary Sales. The Fund reserves the right, on sixty days'
notice, to sell the shares of any shareholder (other than shares held
in an IRA or 403(b) Custodial Account) whose shares, due to sales by
the shareholder, have a value below $100, or in the case of an
account opened through EasyInvestSM, if after 12 months the
shareholder has invested less than $1,000 in the account.
However, before the Fund sells your shares in this manner, we will
notify you and allow you sixty days to make an additional investment
in an amount that will increase the value of your account to at least
the required amount before the sale is processed. No CDSC will be
imposed on any involuntary sale.
Margin Accounts. Certain restrictions may apply to Fund shares
pledged in margin accounts with Dean Witter Reynolds or another
authorized broker-dealer of Fund shares. If you hold Fund shares in
this manner, please contact your Morgan Stanley Dean Witter Financial
Advisor or other authorized financial representative for more
details.
14
<PAGE>
DISTRIBUTIONS
- ------------------------
The Fund passes substantially all of its earnings from
income and capital gains along to its investors as
"distributions." The Fund earns income from stocks and
interest from fixed-income investments. These amounts
are passed along to Fund shareholders as "income
dividend distributions." The Fund realizes capital
gains whenever it sells securities for a higher price
than it paid for them. These amounts may be passed
along as "capital gain distributions."
(sidebar)
TARGETED DIVIDENDS(service mark)
You may select to have your Fund distributions automatically invested in other
Classes of Fund shares or Classes of another Morgan Stanley Dean Witter Fund
that you own. Contact your Morgan Stanley Dean Witter Financial Advisor for
further information about this service.
(end sidebar)
The Fund declares income dividends separately for each
Class. Distributions paid on Class A and Class D
shares usually will be higher than for Class B and
Class C because distribution fees that Class B and
Class C pay are higher. Normally, income dividends and
short-term capital gains are distributed semi-annually
and any other capital gains are distributed annually
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. 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.
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
15
<PAGE>
dividend distributions and any short-term capital gain distributions
are taxable to you as ordinary income. Any long-term capital gain
distributions are taxable as long-term capital gains, no matter how
long you have owned shares in the Fund.
Every January, you will be sent a statement (IRS Form 1099-DIV)
showing the taxable distributions paid to you in the previous year.
The statement provides full information on your dividends and capital
gains for tax purposes.
Taxes on Sales. Your sale of Fund shares normally is subject to
federal and state income tax and may result in a taxable gain or loss
to you. A sale also may be subject to local income tax. Your exchange
of Fund shares for shares of another Morgan Stanley Dean Witter Fund
is treated for tax purposes like a sale of your original shares and a
purchase of your new shares. Thus, the exchange may, like a sale,
result in a taxable gain or loss to you and will give you a new tax
basis for your new shares.
When you open your Fund account, you should provide your Social
Security or tax identification number on your investment application.
By providing this information, you will avoid being subject to a
federal backup withholding tax of 31% on taxable distributions and
redemption proceeds. Any withheld amount would be sent to the IRS as
an advance tax payment.
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.
16
<PAGE>
The chart below compares the sales charge and annual 12b-1 fees
applicable to each Class:
<TABLE>
<CAPTION>
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:
<TABLE>
<CAPTION>
FRONT-END SALES CHARGE
-------------------------------------------------
PERCENTAGE OF PUBLIC APPROXIMATE PERCENTAGE OF
AMOUNT OF SINGLE TRANSACTION OFFERING PRICE AMOUNT INVESTED
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Less than $25,000 5.25% 5.54%
- ---------------------------------------------------------------------------------------
$25,000 but less than $50,000 4.75% 4.99%
- ---------------------------------------------------------------------------------------
$50,000 but less than $100,000 4.00% 4.17%
- ---------------------------------------------------------------------------------------
$100,000 but less than $250,000 3.00% 3.09%
- ---------------------------------------------------------------------------------------
$250,000 but less than $1 million 2.00% 2.04%
- ---------------------------------------------------------------------------------------
$1 million and over 0 0
- ---------------------------------------------------------------------------------------
</TABLE>
(sidebar)
FRONT-END SALES CHARGE OR FSC
An initial sales charge you pay when purchasing Class A shares that is based
on a percentage of the offering price. The percentage declines based upon
the dollar value of Class A shares you purchase. We offer three ways to reduce
your Class A sales charges -- the Combined Purchase Privilege, Right of
Accumulation and Letter of Intent.
(end sidebar)
17
<PAGE>
The reduced sales charge schedule is applicable to purchases of Class
A shares in a single transaction by:
o A single account (including an individual, trust or fiduciary
account).
o Family member accounts (limited to husband, wife and children
under the age of 21).
o Pension, profit sharing or other employee benefit plans of
companies and their affiliates.
o Tax-exempt organizations.
o Groups organized for a purpose other than to buy mutual fund
shares.
Combined Purchase Privilege. You also will have the benefit of
reduced sales charges by combining purchases of Class A shares of the
Fund in a single transaction with purchases of Class A shares of
other Multi-Class Funds and shares of FSC Funds.
Right of Accumulation. You also may benefit from a reduction of sales
charges, if the cumulative net asset value of Class A shares of the
Fund purchased in a single transaction, together with shares of other
Funds you currently own which were previously purchased at a price
including a front-end sales charge (including shares acquired through
reinvestment of distributions), amounts to $25,000 or more. Also, if
you have a cumulative net asset value of all your Class A and Class D
shares equal to at least $5 million (or $25 million for certain
employee benefit plans), you are eligible to purchase Class D shares
of any Fund subject to the Fund's minimum initial investment
requirement.
You must notify your Morgan Stanley Dean Witter Financial Advisor or
other authorized financial representative, (or Morgan Stanley Dean
Witter Trust FSB if you purchase directly through the Fund) at the
time a purchase order is placed, that the purchase qualifies for the
reduced 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
shares within a thirteen-month period. It is available for purchases
of Class A shares of Multi-Class Funds and/or shares of FSC Funds.
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
18
<PAGE>
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.
Other Front-End 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 mandatory sale or
transfer restrictions on termination) approved by the Fund's
distributor pursuant to which they pay an asset based fee for
investment advisory, administrative and/or brokerage services.
o Employer-sponsored employee benefit plans, whether or not
qualified under the Internal Revenue Code, for which Morgan
Stanley Dean Witter Trust FSB serves as trustee or Dean Witter
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 A MSDW Eligible Plan whose Class B shares have converted to Class
A shares, regardless of the plan's asset size or number of
eligible employees.
o A client of a Morgan Stanley Dean Witter Financial Advisor who
joined us from another investment firm within six months prior to
the date of purchase of Fund shares, and you used the proceeds
from the sale of shares of a proprietary mutual fund of that
Financial Advisor's previous firm that imposed either a front-end
or deferred sales charge to purchase Class A shares, provided
that: (1) you sold the shares not more than 60 days prior to
purchase, and (2) the sale proceeds were maintained in the
interim in cash or a money market fund.
o Current or retired Directors/Trustees of the Morgan Stanley Dean
Witter Funds, such persons' spouses and children under the age of
21, and trust accounts for which any of such 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.
19
<PAGE>
CLASS B SHARES Class B shares are offered at net asset value with no
initial sales charge but are subject to a contingent deferred sales
charge, or CDSC, as set forth in the table below. For the purpose of
calculating the CDSC, shares are deemed to have been purchased on the
last day of the month during which they were purchased.
<TABLE>
<CAPTION>
CDSC AS A PERCENTAGE
YEAR SINCE PURCHASE PAYMENT MADE OF AMOUNT REDEEMED
- -----------------------------------------------------------
<S> <C>
First 5.0%
- -----------------------------------------------------------
Second 4.0%
- -----------------------------------------------------------
Third 3.0%
- -----------------------------------------------------------
Fourth 2.0%
- -----------------------------------------------------------
Fifth 2.0%
- -----------------------------------------------------------
Sixth 1.0%
- -----------------------------------------------------------
Seventh and thereafter None
- -----------------------------------------------------------
</TABLE>
(sidebar)
CONTINGENT DEFERRED SALES CHARGE OR CDSC
A fee you pay when you sell shares of certain Morgan Stanley Dean Witter Funds
purchased without an initial sales charge. This fee declines the longer you
hold your shares as set forth in the table.
(end sidebar)
Each time you place an order to sell or exchange shares, shares with
no CDSC will be sold or exchanged first, then shares with the lowest
CDSC will be sold or exchanged next. For any shares subject to a
CDSC, the CDSC will be assessed on an amount equal to the lesser of
the current market value or the cost of the shares being sold.
CDSC Waivers. A CDSC, if otherwise applicable, will be waived in the
case of:
o Sales of shares held at the time you die or become disabled
(within the definition in Section 72(m)(7) of the Internal Revenue
Code which relates to the ability to engage in gainful
employment), if the shares are: (i) registered either in your name
(not a trust) or in the names of you and your spouse as joint
tenants with right of survivorship; or (ii) held in a qualified
corporate or self-employed retirement plan, IRA or 403(b)
Custodial Account, provided in either case that the sale is
requested within one year of your death or initial determination
of disability.
o Sales in connection with the following retirement plan
"distributions": (i) lump-sum or other distributions from a
qualified corporate or self-employed retirement plan following
retirement (or, in the case of a "key employee" of a "top heavy"
plan, following attainment of age 591/2); (ii) distributions from
an IRA or 403(b) Custodial Account following attainment of age
591/2; or (iii) a tax-free return of an excess IRA contribution (a
"distribution" does not include a direct transfer of IRA, 403(b)
Custodial Account or retirement plan assets to a successor
custodian or trustee).
o Sales of shares held for you as a participant in a MSDW Eligible
Plan.
o Sales of shares in connection with the Systematic Withdrawal Plan
of up to 12% annually of the value of each Fund from which plan
sales are made. The percentage is determined on the date you
establish the Systematic Withdrawal Plan and based on the next
calculated share price. You may have this CDSC waiver applied in
amounts up to 1% per month, 3% per quarter, 6% semi-annually or
12% annually. Shares with no CDSC will be sold first, followed by
those with the lowest CDSC. As such, the waiver benefit will be
reduced by the amount of your shares that are not subject to a
CDSC. If
20
<PAGE>
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.
All waivers will be granted only following the Distributor receiving
confirmation of your entitlement. If you believe you are eligible for
a CDSC waiver, please contact your Financial Advisor or call
(800) 869-NEWS.
Distribution Fee. Class B shares are also subject to an annual
distribution (12b-1) fee of 1.0% of the lesser of: (a) the average
daily aggregate gross purchases by all shareholders of the Fund's
Class B shares since the inception of the 12b-1 plan on April 30,
1984 (not including reinvestment of dividends or capital gains
distributions), less the average daily aggregate net asset value of
the Fund's Class B shares sold by all shareholders since the
inception of the 12b-1 plan upon which a CDSC has been imposed or
waived, or (b) the average daily net assets of Class B attributable
to shares issued, net of related shares sold, since inception of the
12b-1 plan.
Conversion Feature. After ten (10) years, Class B shares will convert
automatically to Class A shares of the Fund with no initial sales
charge. The ten year period runs from the last day of the month in
which the shares were purchased, or in the case of Class B shares
acquired through an exchange, from the last day of the month in which
the original Class B shares were purchased; the shares will convert
to Class A shares based on their relative net asset values in the
month following the ten year period. At the same time, an equal
proportion of Class B shares acquired through automatically
reinvested distributions will convert to Class A shares on the same
basis. (Class B shares held before May 1, 1997, however, will convert
to Class A shares in May 2007.)
In the case of Class B shares held in a MSDW Eligible Plan, the plan
is treated as a single investor and all Class B shares will convert
to Class A shares on the conversion date of the Class B shares of a
Morgan Stanley Dean Witter Fund purchased by that plan.
Currently, the Class B share conversion is not a taxable event; the
conversion feature may be cancelled if it is deemed a taxable event
in the future by the Internal Revenue Service.
If you exchange your Class B shares for shares of a Money Market
Fund, No-Load Fund 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
21
<PAGE>
be counted. Thus, in effect the "holding period" for purposes of
calculating the CDSC is frozen upon exchanging into a fund that does
not charge a CDSC.
For example, if you held Class B shares of the Fund for one year,
exchanged to Class B of another Morgan Stanley Dean Witter
Multi-Class Fund for another year, then sold your shares, a CDSC rate
of 4% would be imposed on the shares based on a two year holding
period -- one year for each Fund. However, if you had exchanged the
shares of the Fund for a Money Market Fund (which does not charge a
CDSC) instead of the Multi-Class Fund, then sold your shares, a CDSC
rate of 5% would be imposed on the shares based on a one year holding
period. The one year in the Money Market Fund would not be counted.
Nevertheless, if shares subject to a CDSC are exchanged for a fund
that does not charge a CDSC, you will receive a credit when you sell
the shares equal to the distribution (12b-1) fees you paid on those
shares while in that Fund up to the amount of any applicable CDSC.
In addition, shares that are exchanged into or from a Morgan Stanley
Dean Witter Fund subject to a higher CDSC rate will be subject to the
higher rate, even if the shares are re-exchanged into a Fund with a
lower CDSC rate.
CLASS C SHARES Class C shares are sold at net asset value with no
initial sales charge but are subject to a CDSC of 1.0% on sales
made within one year after the last day of the month of purchase.
The CDSC will be assessed in the same manner and with the same
CDSC waivers as with Class B shares.
Distribution Fee. Class C shares are subject to an annual
distribution (12b-1) fee of 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 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 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.
22
<PAGE>
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 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.
23
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
financial performance for the past 5 fiscal years of the Fund. Certain
information reflects financial results for a single Fund share. The total
returns in the table represent the rate an investor would have earned or lost
on an investment in the Fund (assuming reinvestment of all dividends and
distributions).
This information has been audited by PricewaterhouseCoopers LLP, whose report,
along with the Fund's financial statements, is included in the annual report,
which is available upon request.
CLASS B
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31 1998++ 1997++ 1996 1995 1994
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
- ----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 29.51 $ 27.01 $ 27.16 $ 21.21 $ 23.10
- ----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
Net investment income (loss) (0.03) (0.10) (0.08) 0.01 --
Net realized and unrealized gain (loss) 8.66 8.34 2.86 8.87 (1.57)
------- ------- ------- ------- -------
Total income (loss) from investment
operations 8.63 8.24 2.78 8.88 (1.57)
- ----------------------------------------------------------------------------------------------------------------
Less dividends and distributions from
Net investment income -- -- (0.01) -- --
Net realized gain (5.29) (5.74) (2.92) (2.93) (0.32)
------- ------- ------- ------- -------
Total dividends and distributions (5.29) (5.74) (2.93) (2.93) (0.32)
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 32.85 $ 29.51 $ 27.01 $ 27.16 $ 21.21
- ----------------------------------------------------------------------------------------------------------------
TOTAL RETURN+ 31.07% 31.55% 10.53% 42.20% (6.75)%
- ----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------------------------------------------------------
Expenses 1.39%(1) 1.46% 1.53% 1.61% 1.71%
- ----------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.10)%(1) (0.34)% (0.33)% 0.06% 0.01%
- ----------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------
Net assets, end of period, in millions $5,750 $4,078 $3,099 $2,389 $1,490
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 321% 275% 279% 256% 295%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* Prior to July 28, 1997, the Fund issued one class of shares. All shares
of the Fund held prior to that date, other than shares which were
purchased prior to April 30, 1984 (and with respect to such shares,
certain shares acquired through reinvestment of dividends and capital
gains distributions (collectively the "Old Shares")), have been
designated Class B shares. The Old Shares have been designated Class D
shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the
net asset value as of the last business day of the period.
(1) Reflects overall Fund ratios for investment income and non-class specific
expenses.
24
<PAGE>
CLASS A
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31 1998 1997
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SELECTED PER-SHARE DATA
- ----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 29.59 $ 31.87
- ----------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income 0.15 0.05
Net realized and unrealized gain 8.71 2.32
-------- --------
Total income from investment operations 8.86 2.37
- ----------------------------------------------------------------------------------------------------------------
Less distributions from net realized gain (5.29) (4.65)
Net asset value, end of period $ 33.16 $ 29.59
- ----------------------------------------------------------------------------------------------------------------
TOTAL RETURN+ 31.78% 7.70%(1)
- ----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------------------------------------------------------
Expenses 0.86%(3) 0.92%(2)
- ----------------------------------------------------------------------------------------------------------------
Net investment income 0.43%(3) 0.38%(2)
- ----------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $116,894 $15,844
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 321% 275%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* The date shares were first issued. Shareholders who held shares of the
Fund prior to July 28, 1997 (the date the Fund converted to a multiple
class share structure) should refer to the Financial Highlights of Class
B to obtain the historical per share data and ratio information of their
shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Calculated based on the net asset value as of the last business day of
the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
25
<PAGE>
CLASS C
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31 1998 1997
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SELECTED PER SHARE DATA
- ----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 29.49 $ 31.87
- ----------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment loss (0.10) (0.05)
Net realized and unrealized gain 8.64 2.32
------- --------
Total income from investment operations 8.54 2.27
- ----------------------------------------------------------------------------------------------------------------
Less distributions from net realized gain (5.29) (4.65)
Net asset value, end of period $ 32.74 $ 29.49
- ----------------------------------------------------------------------------------------------------------------
TOTAL RETURN+ 30.78% 7.39%(1)
- ----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------------------------------------------------------
Expenses 1.61%(3) 1.66%(2)
- ----------------------------------------------------------------------------------------------------------------
Net investment loss (0.32)%(3) (0.36)%(2)
- ----------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $60,861 $12,204
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 321% 275%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
26
<PAGE>
CLASS D
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31 1998 1997
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SELECTED PER-SHARE DATA
- ----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 29.63 $ 31.87
- ----------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income 0.24 0.07
Net realized and unrealized gain 8.73 2.34
-------- --------
Total income from investment operations 8.97 2.41
- ----------------------------------------------------------------------------------------------------------------
Less distributions from net realized gain (5.29) (4.65)
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 33.31 $ 29.63
- ----------------------------------------------------------------------------------------------------------------
TOTAL RETURN+ 32.12% 7.83%(1)
- ----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------------------------------------------------------
Expenses 0.61%(3) 0.64%(2)
- ----------------------------------------------------------------------------------------------------------------
Net investment income 0.68%(3) 0.50%(2)
- ----------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $135,022 $49,772
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 321% 275%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* The date shares were first issued. Shareholders who held shares of the
Fund prior to July 28, 1997 (the date the Fund converted to a multiple
class share structure) should refer to the Financial Highlights of Class
B to obtain the historical per share data and ratio information of their
shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Calculated based on the net asset value as of the last business day of the
period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
27
<PAGE>
NOTES
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
28
- ---- ----
<PAGE>
- ---- ----
MORGAN STANLEY DEAN WITTER
FAMILY OF FUNDS
The Morgan Stanley Dean Witter Family of Funds offers
investors a wide range of investment choices. Come on
in and meet the family!
- --------------------------------------------------------------------------------
GROWTH FUNDS
Aggressive Equity Fund
American Opportunities Fund
Capital Growth Securities
Developing Growth Securities
Equity Fund
Growth Fund
Market Leader Trust
Mid-Cap Growth Fund
Special Value Fund
Value Fund
THEME FUNDS
Financial Services Trust
Health Sciences Trust
Information Fund
Natural Resource Development Securities
Precious Metals and Minerals Trust
GLOBAL/INTERNATIONAL FUNDS
Competitive Edge Fund - "Best Ideas" Portfolio
European Growth Fund
Fund of Funds - International Portfolio
Global Dividend Growth Securities
International SmallCap Fund
Japan Fund
Pacific Growth Fund
- --------------------------------------------------------------------------------
GROWTH & INCOME FUNDS
Balanced Growth Fund
Balanced Income Fund
Convertible Securities Trust
Dividend Growth Securities
Fund of Funds - Domestic Portfolio
Income Builder Fund
Mid-Cap Dividend Growth Securities
S&P 500 Index Fund
S&P 500 Select Fund
Strategist Fund
Value/Added Market Series/Equity Portfolio
THEME FUNDS
Global Utilities Fund
Real Estate Fund
Utilities Fund
- --------------------------------------------------------------------------------
INCOME FUNDS
GOVERNMENT INCOME FUNDS
Federal Securities Trust
Short-Term U.S. Treasury Trust
U.S. Government Securities Trust
DIVERSIFIED INCOME FUNDS
Diversified Income Trust
CORPORATE INCOME FUNDS
High Yield Securities
Intermediate Income Securities
Short-Term Bond Fund(NL)
GLOBAL INCOME FUNDS
World Wide Income Trust
TAX-FREE INCOME FUNDS
California Tax-Free Income Fund
Hawaii Municipal Trust(FSC)
Limited Term Municipal Trust(NL)
Multi-State Municipal Series Trust(FSC)
New York Tax-Free Income Fund
Tax-Exempt Securities Trust
- --------------------------------------------------------------------------------
MONEY MARKET FUNDS
TAXABLE MONEY MARKET FUNDS
Liquid Asset Fund(MM)
U.S. Government Money Market Trust(MM)
TAX-FREE MONEY MARKET FUNDS
California Tax-Free Daily Income Trust(MM)
New York Municipal Money Market Trust(MM)
Tax-Free Daily Income Trust(MM)
There may be Funds created after this Prospectus was published. Please consult
the inside front cover of a new Fund's prospectus for its designations, e.g.,
Multi-Class Fund or Money Market Fund.
Unless otherwise noted, each listed Morgan Stanley Dean Witter Fund, except for
Short-Term U.S. Treasury Trust, is a Multi-Class Fund. A Multi-Class Fund is a
mutual fund offering multiple Classes of shares. The other types of Funds are:
NL -- No-Load (Mutual) Fund; MM -- Money Market Fund; FSC -- A mutual fund sold
with a front-end sales charge and a distribution (12b-1) fee.
<PAGE>
PROSPECTUS - APRIL 26, 1999
Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual Reports to Shareholders. In the Fund's Annual Report,
you will find a discussion of the market conditions and investment
strategies that significantly affected the Fund's performance during its
last fiscal year. The Fund's Statement of Additional Information also provides
additional information about the Fund. The Statement of Additional Information
is incorporated herein by reference (legally is part of this Prospectus). For a
free copy of any of these documents, to request other information about the
Fund, or to make shareholder inquiries, please call:
(800) 869-NEWS
You also may obtain information about the Fund by calling your Morgan Stanley
Dean Witter Financial Advisor or by visiting our Internet site at:
WWW.DEANWITTER.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 (800) SEC-0330. Reports and
other information about the Fund are available on the SEC's Internet site
(www.sec.gov), and copies of this information may be obtained, upon payment of
a duplicating fee, by writing the Public Reference Section of the SEC,
Washington, DC 20549-6009.
TICKER SYMBOLS:
Class A: AMOAX
- -----------------------------------------
Class B: AMOBX
- -----------------------------------------
Class C: AMOCX
- -----------------------------------------
Class D: AMODX
- -----------------------------------------
(INVESTMENT COMPANY ACT FILE NO. 811-2978)
Morgan Stanley Dean Witter
==========================
AMERICAN OPPORTUNITIES FUND
A MUTUAL FUND THAT SEEKS LONG-TERM CAPITAL GROWTH CONSISTENT WITH AN EFFORT TO
REDUCE VOLATILITY
