<PAGE> 1
MORGAN STANLEY DEAN WITTER AMERICAN OPPORTUNITIES FUND Two World Trade Center
LETTER TO THE SHAREHOLDERS June 30, 2000 New York, New York 10048
DEAR SHAREHOLDER:
Calendar year 2000 began much as the previous year had left off, with technology
stocks surging to new highs while the rest of the market lay in wait for a
change in investor sentiment. That fateful day came in March as two
government-related stories became the catalysts for a sharp correction in
new-economy stocks. The first story centered on a suggestion from the federal
government that genomic companies should be restricted in their patent ability.
The second concerned a ruling in favor of the Justice Department's case that
Microsoft had used its monopoly status to restrict competition. Further
contributing to the market's correction was a decision by the Federal Reserve
Board that the economy was too hot and needed to be slowed. This development
also held the implication that earnings growth would peak in the first quarter
of 2000 and decelerate thereafter. This increase in earnings uncertainty further
sparked a rotation out of new-economy issues and into more stable growth sectors
such as consumer staples and health- care stocks. Cyclical growth sectors such
as technology were further slammed by concerns about future earnings shortfalls
and higher interest rates and inflation, while biotechnology stocks were
negatively affected by fears of government interference.
PERFORMANCE
For the six-month period ended June 30, 2000, Morgan Stanley Dean Witter
American Opportunities Fund's Class B shares produced a total return of -4.46
percent compared to -0.43 percent for the Standard & Poor's 500 Stock Index (S&P
500).(1) For the same period, the Fund's Class A, C and D shares returned -4.25
percent, -4.61 percent and -4.13 percent, respectively. The performance of the
Fund's four share classes varies because of differing expenses. Total return
figures assume the reinvestment of all distributions but do not reflect the
deduction of any applicable sales charges.
---------------------
(1) The Standard & Poor's 500 Stock Index (S&P 500) is a broad-based index the
performance of which is based on the performance of 500 widely held common
stocks chosen for market size, liquidity and industry representation. The
performance of the index does not include any expenses, fees or charges. The
index is unmanaged and should not be considered an investment.
<PAGE> 2
MORGAN STANLEY DEAN WITTER AMERICAN OPPORTUNITIES FUND
LETTER TO THE SHAREHOLDERS June 30, 2000, continued
PORTFOLIO STRATEGY
The Fund began the year with a significant emphasis on technology and
biotechnology. Then, with the signal from the Federal Reserve that they were
going to move to restrain the pace of economic growth by lifting interest rates,
we began to adjust our portfolio weightings. First we eliminated any highly
valued issues that were not currently profitable. Next we reduced our overall
exposure to technology stocks. We significantly peeled back the technology
groups that were most economically sensitive, such as semiconductors and
semiconductor equipment. We added to the health-care sector with the purchase of
drug, generics, specialty pharmacy and health-care services groups. Financials
were also added, given our view that interest rates would fall in the face of a
decelerating economy. Brokers and insurance group holdings were increased. We
also purchased select consumer staples.
LOOKING AHEAD
As the Fund enters the second half of its fiscal year, many consumer, industrial
and monetary indicators are signaling that the economy has begun to slow. In
addition, many important measures of inflation have begun to reverse, suggesting
that the Federal Reserve appears to have successfully engineered a soft landing.
During similar periods the markets have responded quite favorably, with groups
such as health care, technology, financials and consumer staples assuming market
leadership. We believe that the Fund is well positioned to benefit from this
outlook.
We appreciate your continuing support of the Morgan Stanley Dean Witter American
Opportunities Fund and look forward to continuing to serve your investment
needs.
<TABLE>
<S> <C>
Very truly yours,
/s/ CHARLES A. FIUMEFREDDO /s/ MITCHELL M. MERIN
CHARLES A. FIUMEFREDDO MITCHELL M. MERIN
Chairman of the Board President
</TABLE>
2
<PAGE> 3
MORGAN STANLEY DEAN WITTER AMERICAN OPPORTUNITIES FUND
FUND PERFORMANCE June 30, 2000
AVERAGE ANNUAL TOTAL RETURNS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A SHARES*
----------------------------------------------
<S> <C> <C>
PERIOD ENDED 6/30/00
-------------------------
1 Year 25.32%(1) 18.74%(2)
Since Inception (7/28/97) 26.68%(1) 24.37%(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS B SHARES**
------------------------------------------------
<S> <C> <C>
PERIOD ENDED 6/30/00
-------------------------
1 Year 24.69%(1) 19.69%(2)
5 Years 25.79%(1) 25.63%(2)
10 Years 20.59%(1) 20.59%(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS C SHARES+
------------------------------------------------
<S> <C> <C>
PERIOD ENDED 6/30/00
-------------------------
1 Year 24.34%(1) 23.34%(2)
Since Inception (7/28/97) 25.71%(1) 25.71%(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS D SHARES++
------------------------------------------------
<S> <C>
PERIOD ENDED 6/30/00
-------------------------
1 Year 25.61%(1)
Since Inception (7/28/97) 26.98%(1)
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RETURNS. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE. WHEN YOU SELL FUND SHARES, THEY MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST.
---------------------
<TABLE>
<S> <C>
(1) Figure shown assumes reinvestment of all distributions and
does not reflect the deduction of any sales charges.
(2) Figure shown assumes reinvestment of all distributions and
the deduction of the maximum applicable sales charge. See
the Fund's current prospectus for complete details on fees
and sales charges.
* The maximum front-end sales charge for Class A is 5.25%.
** The maximum contingent deferred sales charge (CDSC) for
Class B is 5.0%. The CDSC declines to 0% after six years.
+ The maximum CDSC for Class C shares is 1% for shares
redeemed within one year of purchase.
++ Class D shares have no sales charge.
</TABLE>
3
<PAGE> 4
MORGAN STANLEY DEAN WITTER AMERICAN OPPORTUNITIES FUND
PORTFOLIO OF INVESTMENTS June 30, 2000 (unaudited)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (88.4%)
Advertising (0.3%)
349,000 Omnicom Group, Inc. ........ $ 31,082,813
---------------
Alcoholic Beverages (1.2%)
2,005,000 Anheuser-Busch Companies,
Inc. ...................... 149,748,438
---------------
Beverages - Non-Alcoholic (1.6%)
4,450,260 PepsiCo, Inc. .............. 197,758,429
---------------
Biotechnology (4.9%)
400,000 Abgenix, Inc.*.............. 47,925,000
1,065,000 Amgen Inc.*................. 74,816,250
795,330 COR Therapeutics, Inc.*..... 67,801,883
223,500 Genentech, Inc.*............ 38,442,000
420,000 Human Genome Sciences,
Inc.*...................... 55,991,250
530,000 IDEC Pharmaceuticals
Corp.*..................... 62,142,500
650,000 Immunex Corp.*.............. 32,134,375
1,880,000 MedImmune, Inc.*............ 139,002,499
673,270 Millennium Pharmaceuticals,
Inc.*...................... 75,280,001
---------------
593,535,758
---------------
Broadcasting (1.7%)
1,329,260 Clear Channel
Communications, Inc.*...... 99,694,500
770,000 Infinity Broadcasting Corp.
(Series A)*................ 28,056,875
360,000 Univision Communications,
Inc. (Class A)*............ 37,260,000
1,872,800 USA Networks, Inc.*......... 40,499,300
---------------
205,510,675
---------------
Cable Television (1.6%)
2,504,080 AT&T Corp. - Liberty Media
Group (Class A)*........... 60,723,940
2,180,000 Comcast Corp. (Class A
Special)*.................. 88,426,250
961,700 Cox Communications, Inc.
(Class A)*................. 43,817,456
---------------
192,967,646
---------------
Cellular Telephone (0.9%)
1,760,000 Sprint Corp. (PCS Group)*... 104,720,000
---------------
Computer Communications (3.1%)
3,561,600 Cisco Systems, Inc.*........ 226,384,200
610,530 Extreme Networks, Inc.*..... 64,067,492
599,640 Juniper Networks, Inc.*..... 87,247,620
---------------
377,699,312
---------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------------------------------------------------------------------
<C> <S> <C>
Computer Software (4.7%)
422,490 Check Point Software
Technologies Ltd.
(Israel)*.................. $ 89,673,503
446,890 i2 Technologies, Inc.*...... 46,588,283
3,436,515 Oracle Corp.* (Japan)....... 292,217,506
756,200 Siebel Systems, Inc.*....... 123,685,962
167,920 Veritas Software Corp.*..... 18,974,960
---------------
571,140,214
---------------
Contract Drilling (2.6%)
1,695,000 ENSCO International Inc. ... 60,702,187
1,700,600 Global Marine, Inc.*........ 47,935,663
925,300 Nabors Industries, Inc.*.... 38,457,781
780,000 Noble Drilling Corp.*....... 32,126,250
2,090,000 R & B Falcon Corp.*......... 49,245,625
1,128,700 Rowan Companies, Inc.*...... 34,284,263
913,956 Transocean Sedco Forex
Inc. ...................... 48,839,524
---------------
311,591,293
---------------
Department Stores (0.4%)
768,160 Kohl's Corp. ............... 42,728,900
---------------
Diversified Commercial Services (0.5%)
1,440,000 Paychex, Inc. .............. 60,480,000
---------------
Diversified Electronic Products (1.7%)
1,140,000 JDS Uniphase Corp.*......... 136,586,250
1,510,000 Phillips Electronics
(Netherlands).............. 71,192,514
---------------
207,778,764
---------------
Diversified Financial Services (3.0%)
1,830,700 American Express Co. ....... 95,425,238
3,830,390 Citigroup, Inc. ............ 230,780,997
425,000 Providian Financial
Corp. ..................... 38,250,000
---------------
364,456,235
---------------
E.D.P. Peripherals (1.4%)
1,995,220 EMC Corp.*.................. 153,507,238
254,630 Network Appliance, Inc.*.... 20,481,801
---------------
173,989,039
---------------
E.D.P. Services (0.6%)
16,400 Amdocs Ltd.*................ 1,258,700
903,380 Automatic Data Processing,
Inc. ...................... 48,387,291
415,000 First Data Corp. ........... 20,594,375
---------------
70,240,366
---------------
Electric Utilities (0.3%)
587,680 Calpine Corp.*.............. 38,639,960
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE> 5
MORGAN STANLEY DEAN WITTER AMERICAN OPPORTUNITIES FUND
PORTFOLIO OF INVESTMENTS June 30, 2000 (unaudited) continued
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------------------------------------------------------------------
<C> <S> <C>
Electrical Products (0.0%)
88,000 American Power Conversion
Corp.*..................... $ 3,586,000
---------------
Electronic Components (0.5%)
64,000 Flextronics International,
Ltd.*...................... 4,396,000
1,065,000 Jabil Circuit, Inc.*........ 52,850,625
---------------
57,246,625
---------------
Electronic Data Processing (2.3%)
2,450,000 Dell Computer Corp.*........ 120,815,625
400,000 Hewlett-Packard Co. ........ 49,950,000
1,227,240 Sun Microsystems, Inc.*..... 111,602,138
---------------
282,367,763
---------------
Electronic Production Equipment (1.8%)
1,680,540 Applied Materials, Inc.*.... 152,298,938
1,325,600 ASM Lithography Holding NV
(Netherlands)*............. 58,409,250
---------------
210,708,188
---------------
Food Chains (0.5%)
1,000,000 Koninklijke Ahold NV
(Netherlands).............. 29,424,152
580,000 Safeway Inc.*............... 26,172,500
---------------
55,596,652
---------------
Generic Drugs (0.6%)
220,000 Alpharma Inc. (Class A)..... 13,695,000
601,210 Ivax Corp.*................. 24,950,215
730,000 Watson Pharmaceuticals,
Inc.*...................... 39,237,500
---------------
77,882,715
---------------
Hospital/Nursing Management (0.2%)
780,000 HCA - The Healthcare
Corp. ..................... 23,692,500
---------------
Insurance Brokers/Services (0.6%)
715,000 Marsh & McLennan Companies,
Inc. ...................... 74,672,813
---------------
Internet Services (1.6%)
292,720 Art Technology Group,
Inc.*...................... 29,546,425
959,180 BEA Systems, Inc.*.......... 47,359,513
1,003,370 BroadVision, Inc.*.......... 50,921,028
340,050 VeriSign, Inc.*............. 59,955,065
---------------
187,782,031
---------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------------------------------------------------------------------
<C> <S> <C>
Investment Bankers/Brokers/Services (3.0%)
1,540,000 Lehman Brothers Holdings,
Inc. ...................... $ 145,626,250
1,549,100 Merrill Lynch & Co.,
Inc. ...................... 178,146,500
486,500 Paine Webber Group, Inc. ... 22,135,750
286,780 Schwab (Charles) Corp. ..... 9,642,978
---------------
355,551,478
---------------
Investment Managers (0.0%)
25,000 Amvescap PLC (United
Kingdom)................... 401,740
---------------
Major Banks (1.4%)
1,462,020 Bank of New York Co.,
Inc. ...................... 67,983,930
918,690 State Street Corp. ......... 97,438,558
---------------
165,422,488
---------------
Major Pharmaceuticals (8.5%)
761,550 Abbott Laboratories......... 33,936,572
2,955,000 American Home Products
Corp. ..................... 173,606,250
1,029,000 Aventis (France)............ 75,079,833
630,000 Johnson & Johnson........... 64,181,250
742,000 Lilly (Eli) & Co. .......... 74,107,250
6,867,500 Pfizer, Inc. ............... 329,639,999
915,000 Pharmacia Corp. ............ 47,294,063
15,975,000 SmithKline Beecham, PLC
(United Kingdom)........... 209,486,564
---------------
1,007,331,781
---------------
Managed Health Care (0.8%)
1,145,580 UnitedHealth Group, Inc. ... 98,233,485
---------------
Media Conglomerates (3.9%)
4,430,000 Disney (Walt) Co. .......... 171,939,375
297,490 Fox Entertainment Group,
Inc. (Series A)*........... 9,036,259
1,576,542 News Corporation Ltd. (The)
(ADR) (Australia).......... 85,921,539
2,940,000 Viacom, Inc. (Class B)*..... 200,471,250
---------------
467,368,423
---------------
Medical Equipment & Supplies (0.5%)
1,223,800 Medtronic, Inc. ............ 60,960,538
---------------
Medical Specialties (0.9%)
712,080 ALZA Corp.*................. 42,101,730
242,900 Bausch & Lomb Inc. ......... 18,794,388
410,210 Minimed, Inc.*.............. 48,507,332
---------------
109,403,450
---------------
Medical/Dental Distributors (0.3%)
510,000 Cardinal Health, Inc.*...... 37,740,000
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE> 6
MORGAN STANLEY DEAN WITTER AMERICAN OPPORTUNITIES FUND
PORTFOLIO OF INVESTMENTS June 30, 2000 (unaudited) continued
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------------------------------------------------------------------
<C> <S> <C>
Metals Fabrications (0.2%)
1,104,100 Grant Prideco, Inc. ........ $ 27,602,500
---------------
Mid-Sized Banks (0.8%)
20,000 Fifth Third Bancorp......... 1,265,000
1,521,170 Northern Trust Corp. ....... 98,876,050
---------------
100,141,050
---------------
Military/Gov't/Technical (0.3%)
45,000 General Dynamics Corp. ..... 2,351,250
428,650 General Motors Corp. (Class
H)*........................ 37,614,038
---------------
39,965,288
---------------
Multi-Line Insurance (4.0%)
2,473,200 American International
Group, Inc. ............... 290,601,000
785,000 AXA (France)................ 123,618,660
1,188,470 Hartford Financial Services
Group, Inc. ............... 66,480,041
---------------
480,699,701
---------------
Multi-Sector Companies (0.8%)
1,810,000 General Electric Co. ....... 95,930,000
---------------
Oil & Gas Production (1.5%)
1,110,000 Anardarko Petroleum
Corp. ..................... 54,736,875
1,023,700 Apache Corp. ............... 60,206,356
559,750 Devon Energy Corp. ......... 31,450,953
1,000,000 EOG Resources, Inc. ........ 33,500,000
---------------
179,894,184
---------------
Oil/Gas Transmission (0.5%)
160,900 Dynegy, Inc. ............... 10,991,481
840,000 Enron Corp. ................ 54,180,000
---------------
65,171,481
---------------
Oilfield Services/Equipment (3.5%)
136,800 Baker Hughes Inc. .......... 4,377,600
1,787,330 BJ Services Co.*............ 111,708,125
618,500 Cooper Cameron Corp.*....... 40,821,000
2,576,580 Schlumberger Ltd. .......... 192,277,282
532,790 Smith International,
Inc.*...................... 38,793,772
755,900 Weatherford International,
Inc.*...................... 30,094,269
---------------
418,072,048
---------------
Other Pharmaceuticals (2.1%)
645,000 Allergan, Inc. ............. 48,052,500
94,370 Celgene Corp.*.............. 5,556,034
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------------------------------------------------------------------
<C> <S> <C>
535,000 Elan Corp. PLC (ADR)
(Ireland)*................. $ 25,914,063
615,000 Forest Laboratories,
Inc.*...................... 62,115,000
621,100 Sepracor, Inc.*............. 74,881,368
650,500 Teva Pharmaceutical
Industries Ltd. (ADR)
(Israel)................... 36,062,094
---------------
252,581,059
---------------
Package Goods/Cosmetics (0.4%)
1,032,420 Avon Products, Inc. ........ 45,942,690
---------------
Packaged Foods (0.4%)
650,000 Quaker Oats Company (The)... 48,831,250
---------------
Property - Casualty Insurers (0.5%)
229,400 ACE Ltd. (Bermuda).......... 6,423,200
838,400 Chubb Corp. ................ 51,561,600
---------------
57,984,800
---------------
Semiconductors (8.4%)
736,500 Advanced Micro Devices,
Inc.*...................... 56,894,625
135,000 Broadcom Corp. (Class A)*... 29,556,563
2,260,200 Intel Corp. ................ 302,019,224
4,357,000 Micron Technology, Inc.*.... 383,688,785
320,000 SDL, Inc.*.................. 91,260,000
639,900 STMicroelectronics NV
(Netherlands).............. 41,073,581
679,650 Texas Instruments, Inc. .... 46,683,459
648,810 Xilinx, Inc.*............... 53,567,376
---------------
1,004,743,613
---------------
Telecommunication Equipment (7.1%)
305,000 Alcatel (France)............ 19,998,020
800,000 Alcatel SA (ADR) (France)... 53,200,000
970,000 CIENA Corp.*................ 161,626,250
1,065,030 Comverse Technology,
Inc.*...................... 99,047,790
910,000 Corning Inc. ............... 245,586,249
2,226,100 Nortel Networks Corp.
(Canada)................... 151,931,325
1,603,600 Scientific-Atlanta, Inc. ... 119,468,200
---------------
850,857,834
---------------
TOTAL COMMON STOCKS
(Identified Cost
$8,639,107,526)............ 10,638,434,010
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE> 7
MORGAN STANLEY DEAN WITTER AMERICAN OPPORTUNITIES FUND
PORTFOLIO OF INVESTMENTS June 30, 2000 (unaudited) continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
---------------------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENTS (15.2%)
U.S. GOVERNMENT AGENCIES (a) (15.0%)
$ 400 Federal Home Loan Banks
6.45% due 07/06/00......... $ 399,641,667
1,397 Federal Home Loan Mortgage
Corp. 6.57% due 07/03/00... 1,396,490,095
---------------
TOTAL U.S. GOVERNMENT
AGENCIES
(Amortized Cost
$1,796,131,762)............ 1,796,131,762
---------------
REPURCHASE AGREEMENT (0.2%)
29,375 The Bank of New York 7.00% due 07/03/00
(dated 06/30/00; proceeds $29,380,812) (b)
(Identified Cost
$29,375,101)............... 29,375,101
---------------
TOTAL SHORT-TERM INVESTMENTS
(Identified Cost
$1,825,506,863)............ 1,825,506,863
---------------
TOTAL INVESTMENTS
(Identified Cost $10,464,614,389) (c)....... 103.6% 12,463,940,873
LIABILITIES IN EXCESS OF OTHER
ASSETS...................................... (3.6) (428,691,956)
---- ---------------
NET ASSETS.................................. 100.0% $12,035,248,917
====== ===============
</TABLE>
---------------------
<TABLE>
<C> <S>
ADR American Depository Receipt.
* Non-income producing security.
(a) Purchased on a discount basis. The interest rate
shown has been adjusted to reflect a money market
equivalent yield.
(b) Collateralized by $29,626,611 Federal Home Loan
Banks 6.75% due 05/01/02 valued at $29,963,137.
(c) The aggregate cost for federal income tax purposes
approximates identified cost. The aggregate gross
unrealized appreciation is $2,066,275,608 and the
aggregate gross unrealized depreciation is
$66,949,124, resulting in net unrealized
appreciation of $1,999,326,484.
</TABLE>
FUTURES CONTRACTS OPEN AT JUNE 30, 2000:
<TABLE>
<CAPTION>
DESCRIPTION UNDERLYING
NUMBER OF DELIVERY MONTH FACE AMOUNT UNREALIZED
CONTRACTS AND YEAR AT VALUE LOSS
---------------------------------------------------------
<S> <C> <C> <C>
(3,183) NASDAQ $1,214,951,100 $(5,442,743)
100 FUTURES
SEPTEMBER/2000
</TABLE>
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT JUNE 30, 2000:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS IN EXCHANGE DELIVERY APPRECIATION
TO DELIVER FOR DATE (DEPRECIATION)
------------------------------------------------------------------
<S> <C> <C> <C>
$25,950,630 GBP 17,139,310 07/03/2000 32,565
$40,064,983 GBP 26,461,253 07/03/2000 50,276
$33,240,740 GBP 21,857,404 07/05/2000 (104,916)
$19,830,821 GBP 13,082,743 07/06/2000 2,617
$17,728,338 EUR 18,734,374 07/31/2000 151,748
$17,965,165 EUR 18,942,603 07/31/2000 113,656
$24,106,408 EUR 25,417,976 07/31/2000 152,508
---------
Net unrealized appreciation.................... $ 398,454
=========
Currency Abbreviations:
----------------------
GBP British Pound.
EUR Euro.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE> 8
MORGAN STANLEY DEAN WITTER AMERICAN OPPORTUNITIES FUND
FINANCIAL STATEMENTS
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited)
ASSETS:
Investments in securities, at value
(identified cost $10,464,614,389).......................... $12,463,940,873
Cash........................................................ 1,455,547
Receivable for:
Investments sold........................................ 393,394,599
Shares of beneficial interest sold...................... 21,547,644
Dividends............................................... 3,073,574
Foreign withholding taxes reclaimed..................... 626,131
Prepaid expenses and other assets........................... 587,817
---------------
TOTAL ASSETS............................................ 12,884,626,185
---------------
LIABILITIES:
Payable for:
Investments purchased................................... 797,553,838
Shares of beneficial interest repurchased............... 12,363,961
Plan of distribution fee................................ 6,950,302
Investment management fee............................... 4,398,730
Accrued expenses and other payables......................... 28,110,437
---------------
TOTAL LIABILITIES....................................... 849,377,268
---------------
NET ASSETS.............................................. $12,035,248,917
===============
COMPOSITION OF NET ASSETS:
Paid-in-capital............................................. $ 9,240,820,585
Net unrealized appreciation................................. 1,993,874,519
Accumulated net investment loss............................. (15,881,382)
Accumulated undistributed net realized gain................. 816,435,195
---------------
NET ASSETS.............................................. $12,035,248,917
===============
CLASS A SHARES:
Net Assets.................................................. $392,183,770
Shares Outstanding (unlimited authorized, $.01 par value)... 9,563,983
NET ASSET VALUE PER SHARE............................... $41.01
=======
MAXIMUM OFFERING PRICE PER SHARE,
(net asset value plus 5.54% of net asset value)........ $43.28
=======
CLASS B SHARES:
Net Assets.................................................. $10,827,391,395
Shares Outstanding (unlimited authorized, $.01 par value)... 269,121,720
NET ASSET VALUE PER SHARE............................... $40.23
=======
CLASS C SHARES:
Net Assets.................................................. $336,119,218
Shares Outstanding (unlimited authorized, $.01 par value)... 8,423,441
NET ASSET VALUE PER SHARE............................... $39.90
=======
CLASS D SHARES:
Net Assets.................................................. $479,554,534
Shares Outstanding (unlimited authorized, $.01 par value)... 11,595,761
NET ASSET VALUE PER SHARE............................... $41.36
=======
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE> 9
MORGAN STANLEY DEAN WITTER AMERICAN OPPORTUNITIES FUND
FINANCIAL STATEMENTS, continued
<TABLE>
<S> <C>
STATEMENT OF OPERATIONS
For the six months ended June 30, 2000 (unaudited)
NET INVESTMENT LOSS:
INCOME
Interest.................................................... $ 36,553,919
Dividends (net of $570,791 foreign withholding tax)......... 19,570,434
---------------
TOTAL INCOME............................................ 56,124,353
---------------
EXPENSES
Plan of distribution fee (Class A shares)................... 443,621
Plan of distribution fee (Class B shares)................... 37,414,641
Plan of distribution fee (Class C shares)................... 1,508,016
Investment management fee................................... 26,844,928
Transfer agent fees and expenses............................ 4,461,466
Registration fees........................................... 561,488
Custodian fees.............................................. 394,364
Shareholder reports and notices............................. 251,150
Professional fees........................................... 35,293
Trustees' fees and expenses................................. 8,767
Other....................................................... 35,477
---------------
TOTAL EXPENSES.......................................... 71,959,211
---------------
NET INVESTMENT LOSS..................................... (15,834,858)
---------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain/loss on:
Investments............................................. 1,101,520,741
Futures contracts....................................... (196,132,864)
Foreign exchange transactions........................... (37,547)
---------------
NET GAIN................................................ 905,350,330
---------------
Net change in unrealized appreciation/depreciation on:
Investments............................................. (1,493,393,495)
Futures contracts....................................... 17,743,119
Translation of forward foreign currency contracts, other
assets and liabilities denominated in foreign
currencies............................................. 8,868
---------------
NET DEPRECIATION........................................ (1,475,641,508)
---------------
NET LOSS................................................ (570,291,178)
---------------
NET DECREASE................................................ $ (586,126,036)
===============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE> 10
MORGAN STANLEY DEAN WITTER AMERICAN OPPORTUNITIES FUND
FINANCIAL STATEMENTS, continued
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
JUNE 30, 2000 DECEMBER 31, 1999
---------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss............................... $ (15,834,858) $ (17,092,053)
Net realized gain................................. 905,350,330 1,042,346,909
Net change in unrealized appreciation............. (1,475,641,508) 2,347,697,489
--------------- ---------------
NET INCREASE (DECREASE)....................... (586,126,036) 3,372,952,345
--------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED GAIN:
Class A shares.................................... (4,606,163) (28,551,583)
Class B shares.................................... (130,574,866) (1,024,566,187)
Class C shares.................................... (4,067,112) (22,478,831)
Class D shares.................................... (5,576,561) (28,966,000)
--------------- ---------------
TOTAL DISTRIBUTIONS........................... (144,824,702) (1,104,562,601)
--------------- ---------------
Net increase from transactions in shares of
beneficial interest.............................. 1,505,297,704 2,929,254,218
--------------- ---------------
NET INCREASE.................................. 774,346,966 5,197,643,962
NET ASSETS:
Beginning of period............................... 11,260,901,951 6,063,257,989
--------------- ---------------
END OF PERIOD
(Including accumulated net investment losses
of $15,881,382 and $46,524, respectively)..... $12,035,248,917 $11,260,901,951
=============== ===============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE> 11
MORGAN STANLEY DEAN WITTER AMERICAN OPPORTUNITIES FUND
NOTES TO FINANCIAL STATEMENTS June 30, 2000 (unaudited)
1. ORGANIZATION AND ACCOUNTING POLICIES
Morgan Stanley Dean Witter American Opportunities Fund (the "Fund") is
registered under the Investment Company Act of 1940, as amended (the "Act"), as
a diversified, open-end management investment company. The Fund's investment
objective is capital growth consistent with an effort to reduce volatility. The
Fund seeks to achieve its objective by investing in a diversified portfolio of
securities consisting principally of common stocks. The Fund was incorporated in
Maryland in 1979, commenced operations on March 27, 1980 and was reorganized as
a Massachusetts business trust on April 30, 1987. On July 28, 1997, the Fund
converted to a multiple class share structure.
The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase and some
Class A shares, and most Class B shares and Class C shares are subject to a
contingent deferred sales charge imposed on shares redeemed within one year, six
years and one year, respectively. Class D shares are not subject to a sales
charge. Additionally, Class A shares, Class B shares and Class C shares incur
distribution expenses.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ from
those estimates.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) an equity security listed or traded on the
New York, American or other domestic or foreign stock exchange is valued at its
latest sale price on that exchange prior to the time when assets are valued; if
there were no sales that day, the security is valued at the latest bid price (in
cases where a security is traded on more than one exchange, the security is
valued on the exchange designated as the primary market pursuant to procedures
adopted by the Trustees); (2) all other portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest available bid price prior to the time of valuation; (3) when market
quotations are not readily available, including circumstances under which it is
determined by Morgan Stanley Dean Witter Advisors Inc. (the "Investment
Manager") that sale or bid prices are not reflective of a security's market
value, portfolio securities are valued at their fair value as determined in good
faith under procedures established by and under the general supervision of the
Trustees (valuation of debt securities for which market quotations are not
readily available may be based upon current market prices of securities which
are comparable in coupon, rating and maturity or an appropriate matrix
11
<PAGE> 12
MORGAN STANLEY DEAN WITTER AMERICAN OPPORTUNITIES FUND
NOTES TO FINANCIAL STATEMENTS June 30, 2000 (unaudited) continued
utilizing similar factors); and (4) short-term debt securities having a maturity
date of more than sixty days at time of purchase are valued on a mark-to-market
basis until sixty days prior to maturity and thereafter at amortized cost based
on their value on the 61st day. Short-term debt securities having a maturity
date of sixty days or less at the time of purchase are valued at amortized cost.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
Dividend income and other distributions are recorded on the ex-dividend date.
Discounts are accreted over the life of the respective securities. Interest
income is accrued daily.
C. MULTIPLE CLASS ALLOCATIONS -- Investment income, expenses (other than
distribution fees), and realized and unrealized gains and losses are allocated
to each class of shares based upon the relative net asset value on the date such
items are recognized. Distribution fees are charged directly to the respective
class.
D. FUTURES CONTRACTS -- A futures contract is an agreement between two parties
to buy and sell financial instruments at a set price on a future date. Upon
entering into such a contract, the Fund is required to pledge to the broker
cash, U.S. Government securities or other liquid portfolio securities equal to
the minimum initial margin requirement of the applicable futures exchange.
Pursuant to the contract, the Fund agrees to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in the value of the contract
which is known as variation margin. Such receipts or payments are recorded by
the Fund as unrealized gains or losses. Upon closing of the contract, the Fund
realizes a gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was closed.
E. FOREIGN CURRENCY TRANSLATION -- The books and records of the Fund are
maintained in U.S. dollars as follows: (1) the foreign currency market value of
investment securities, other assets and liabilities and forward foreign currency
contracts are translated at the exchange rates prevailing at the end of the
period; and (2) purchases, sales, income and expenses are translated at the
exchange rates prevailing on the respective dates of such transactions. The
resultant exchange gains and losses are included in the Statement of Operations
as realized and unrealized gain/loss on foreign exchange transactions. Pursuant
to U.S. Federal income tax regulations, certain foreign exchange gains/losses
included in realized and unrealized gain/loss are included in or are a reduction
of ordinary income for federal
12
<PAGE> 13
MORGAN STANLEY DEAN WITTER AMERICAN OPPORTUNITIES FUND
NOTES TO FINANCIAL STATEMENTS June 30, 2000 (unaudited) continued
income tax purposes. The Fund does not isolate that portion of the results of
operations arising as a result of changes in the foreign exchange rates from the
changes in the market prices of the securities.
F. FORWARD FOREIGN CURRENCY CONTRACTS -- The Fund may enter into forward foreign
currency contracts which are valued daily at the appropriate exchange rates. The
resultant unrealized exchange gains and losses are included in the Statement of
Operations as unrealized gain/loss on foreign exchange transactions. The Fund
records realized gains or losses on delivery of the currency or at the time the
forward contract is extinguished (compensated) by entering into a closing
transaction prior to delivery.
G. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.
H. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to its shareholders on the record date. The amount of dividends
and distributions from net investment income and net realized capital gains are
determined in accordance with federal income tax regulations which may differ
from generally accepted accounting principles. These "book/tax" differences are
either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within the
capital accounts based on their federal tax-basis treatment; temporary
differences do not require reclassification. Dividends and distributions which
exceed net investment income and net realized capital gains for financial
reporting purposes but not for tax purposes are reported as dividends in excess
of net investment income or distributions in excess of net realized capital
gains. To the extent they exceed net investment income and net realized capital
gains for tax purposes, they are reported as distributions of paid-in-capital.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement with the Investment Manager, the
Fund pays a management fee, accrued daily and payable monthly, by applying the
following annual rates to the net assets of the Fund determined at the close of
each business day: 0.625% to the portion of daily net assets not exceeding $250
million; 0.50% to the portion of daily net assets exceeding $250 million but not
exceeding $2.5 billion; 0.475% to the portion of daily net assets exceeding $2.5
billion but not exceeding $3.5 billion; 0.45% to the portion of daily net assets
exceeding $3.5 billion but not exceeding $4.5 billion; and 0.425% to the portion
of daily net assets in excess of $4.5 billion.
13
<PAGE> 14
MORGAN STANLEY DEAN WITTER AMERICAN OPPORTUNITIES FUND
NOTES TO FINANCIAL STATEMENTS June 30, 2000 (unaudited) continued
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Morgan Stanley Dean Witter Distributors
Inc. (the "Distributor"), an affiliate of the Investment Manager. The Fund has
adopted a Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the
Act. The Plan provides that the Fund will pay the Distributor a fee which is
accrued daily and paid monthly at the following annual rates: (i) Class A -- up
to 0.25% of the average daily net assets of Class A; (ii) Class B -- 1.0% of the
lesser of: (a) the average daily aggregate gross sales of the Class B shares
since the inception of the Plan on July 2, 1984 (not including reinvestment of
dividend or capital gain distributions) less the average daily aggregate net
asset value of the Class B shares redeemed since the Fund's inception upon which
a contingent deferred sales charge has been imposed or waived; or (b) the
average daily net assets of Class B attributable to shares issued, net of
related shares redeemed, since the Plan's inception; and (iii) Class C -- up to
1.0% of the average daily net assets of Class C.
In the case of Class B shares, provided that the Plan continues in effect, any
cumulative expenses incurred by the Distributor but not yet recovered may be
recovered through the payment of future distribution fees from the Fund pursuant
to the Plan and contingent deferred sales charges paid by investors upon
redemption of Class B shares. Although there is no legal obligation for the Fund
to pay expenses incurred in excess of payments made to the Distributor under the
Plan and the proceeds of contingent deferred sales charges paid by investors
upon redemption of shares, if for any reason the Plan is terminated, the
Trustees will consider at that time the manner in which to treat such expenses.
The Distributor has advised the Fund that such excess amounts totaled
$150,281,286 at June 30, 2000.
In the case of Class A shares and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 1.0% of the average daily
net assets of Class A or Class C, respectively, will not be reimbursed by the
Fund through payments in any subsequent year, except that expenses representing
a gross sales credit to Morgan Stanley Dean Witter Financial Advisors or other
selected broker-dealer representatives may be reimbursed in the subsequent
calendar year. For the six months ended June 30, 2000, the distribution fee was
accrued for Class A shares and Class C shares at the annual rate of 0.25% and
1.0%, respectively.
The Distributor has informed the Fund that for six months ended June 30, 2000,
it received contingent deferred sales charges from certain redemptions of the
Fund's Class A shares, Class B shares and Class C shares of $26,667, $5,408,496,
and $82,542 respectively and received $886,188 in front-end sales
14
<PAGE> 15
MORGAN STANLEY DEAN WITTER AMERICAN OPPORTUNITIES FUND
NOTES TO FINANCIAL STATEMENTS June 30, 2000 (unaudited) continued
charges from sales of the Fund's Class A shares. The respective shareholders pay
such charges which are not an expense of the Fund.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the six months ended June 30, 2000, aggregated
$26,253,921,072 and $25,407,938,942, respectively. Included in the
aforementioned are purchases and sales of U.S. Government securities of
$793,117,938 and $795,365,656, respectively.
For the six months ended June 30, 2000, the Fund incurred $457,055 in brokerage
commissions with DWR for portfolio transactions executed on behalf of the Fund.
For the six months ended June 30, 2000, the Fund incurred brokerage commissions
of $3,065,855 with Morgan Stanley & Co., Inc., an affiliate of the Investment
Manager and Distributor, for portfolio transactions executed on behalf of the
Fund. At June 30, 2000, the Fund's receivables for securities sold included
unsettled trades with Morgan Stanley & Co., Inc. of $42,703,114.
Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent.
The Fund has an unfunded noncontributory defined benefit pension plan covering
all independent Trustees of the Fund who will have served as independent
Trustees for at least five years at the time of retirement. Benefits under this
plan are based on years of service and compensation during the last five years
of service. Aggregate pension costs for the six months ended June 30, 2000
included in Trustees' fees and expenses in the Statement of Operations amounted
to $2,992. At June 30, 2000, the Fund had an accrued pension liability of
$45,726 which is included in accrued expenses in the Statement of Assets and
Liabilities.
15
<PAGE> 16
MORGAN STANLEY DEAN WITTER AMERICAN OPPORTUNITIES FUND
NOTES TO FINANCIAL STATEMENTS June 30, 2000 (unaudited) continued
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
JUNE 30, 2000 DECEMBER 31, 1999
---------------------------- ----------------------------
(unaudited)
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- --------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Sold..................................................... 4,059,758 $ 175,684,837 4,338,198 $ 158,802,903
Reinvestment of distributions............................ 111,749 4,524,724 717,347 27,977,919
Shares issued in connection with the acquisition of
Morgan Stanley Dean Witter Capital Appreciation Fund.... -- -- 21,302 761,171
Redeemed................................................. (1,679,296) (71,059,342) (1,529,947) (56,507,414)
----------- -------------- ----------- --------------
Net increase - Class A................................... 2,492,211 109,150,219 3,546,900 131,034,579
----------- -------------- ----------- --------------
CLASS B SHARES
Sold..................................................... 45,463,199 1,953,929,082 71,285,499 2,582,385,467
Reinvestment of distributions............................ 3,086,884 122,641,858 25,191,185 963,793,541
Shares issued in connection with the acquisition of
Morgan Stanley Dean Witter Capital Appreciation Fund.... -- -- 6,039,569 213,444,830
Redeemed................................................. (23,105,619) (977,542,712) (33,894,354) (1,228,290,302)
----------- -------------- ----------- --------------
Net increase - Class B................................... 25,444,464 1,099,028,228 68,621,899 2,531,333,536
----------- -------------- ----------- --------------
CLASS C SHARES
Sold..................................................... 3,401,462 144,275,119 4,261,820 153,567,595
Reinvestment of distributions............................ 99,921 3,937,897 568,229 21,693,093
Shares issued in connection with the acquisition of
Morgan Stanley Dean Witter Capital Appreciation Fund.... -- -- 35,974 1,266,865
Redeemed................................................. (884,876) (37,113,339) (918,072) (33,332,226)
----------- -------------- ----------- --------------
Net increase - Class C................................... 2,616,507 111,099,677 3,947,951 143,195,327
----------- -------------- ----------- --------------
CLASS D SHARES
Sold..................................................... 5,277,610 229,673,092 4,457,365 166,990,004
Reinvestment of distributions............................ 128,821 5,261,055 706,696 27,710,295
Shares issued in connection with the acquisition of
Morgan Stanley Dean Witter Capital Appreciation Fund.... -- -- 3,051 109,510
Redeemed................................................. (1,133,100) (48,914,567) (1,898,576) (71,119,033)
----------- -------------- ----------- --------------
Net increase - Class D................................... 4,273,331 186,019,580 3,268,536 123,690,776
----------- -------------- ----------- --------------
Net increase in Fund..................................... 34,826,513 $1,505,297,704 79,385,286 $2,929,254,218
=========== ============== =========== ==============
</TABLE>
6. FEDERAL INCOME TAX STATUS
As of December 31, 1999, the Fund had temporary book/tax differences primarily
attributable to the mark-to-market of open future contracts and capital loss
deferrals on wash sales.
16
<PAGE> 17
MORGAN STANLEY DEAN WITTER AMERICAN OPPORTUNITIES FUND
NOTES TO FINANCIAL STATEMENTS June 30, 2000 (unaudited) continued
7. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS
The Fund may enter into forward foreign currency contracts ("forward contracts")
to facilitate settlement of foreign currency denominated portfolio transactions
or to manage foreign currency exposure associated with foreign currency
denominated securities.
To hedge against adverse interest rate, foreign currency and market risks, the
Fund may purchase and sell interest rate, currency and index futures ("futures
contracts").
Forward contracts and futures contracts involve elements of market risk in
excess of the amounts reflected in the Statement of Assets and Liabilities. The
Fund bears the risk of an unfavorable change in the foreign exchange rates
underlying the forward contracts. Risks may also arise upon entering into these
contracts from the potential inability of the counterparties to meet the terms
of their contracts.
At June 30, 2000, the Fund had outstanding futures contracts and forward
contracts.
8. ACQUISITION OF MORGAN STANLEY DEAN WITTER CAPITAL APPRECIATION FUND
On March 12, 1999, the Fund acquired all the net assets of Morgan Stanley Dean
Witter Capital Appreciation Fund ("Capital Appreciation") pursuant to a plan of
reorganization approved by the shareholders of Capital Appreciation on October
29, 1998. The acquisition was accomplished by a tax-free exchange of 21,302
Class A shares of the Fund at a net asset value of $35.74 per share for 60,567
Class A shares of Capital Appreciation; 6,039,569 Class B shares of the Fund at
a net asset value of $35.35 per share for 17,217,642 Class B shares of Capital
Appreciation; 35,974 Class C shares of the Fund at a net asset value of $35.22
per share for 102,177 Class C shares of Capital Appreciation; and 3,051 Class D
shares of the Fund at a net asset value of $35.90 per share for 8,685 Class D
shares of Capital Appreciation. The net assets of the Fund and Capital
Appreciation immediately before the acquisition were $7,027,067,112 and
$215,582,364, respectively, including unrealized appreciation of $42,624,304 for
Capital Appreciation. Immediately after the acquisition, the combined assets of
the Fund amounted to $7,242,649,476.
17
<PAGE> 18
MORGAN STANLEY DEAN WITTER AMERICAN OPPORTUNITIES FUND
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX FOR THE YEAR FOR THE YEAR JULY 28, 1997*
MONTHS ENDED ENDED ENDED THROUGH
JUNE 30, 2000 DECEMBER 31, 1999 DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C> <C>
CLASS A SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period..... $43.35 $33.16 $29.59 $31.87
------ ------ ------ ------
Income (loss) from investment operations:
Net investment income................... 0.04 0.10 0.15 0.05
Net realized and unrealized gain
(loss)................................ (1.89) 14.80 8.71 2.32
------ ------ ------ ------
Total income (loss) from investment
operations.............................. (1.85) 14.90 8.86 2.37
------ ------ ------ ------
Less distributions from net realized
gain.................................... (0.49) (4.71) (5.29) (4.65)
------ ------ ------ ------
Net asset value, end of period........... $41.01 $43.35 $33.16 $29.59
====== ====== ====== ======
TOTAL RETURN+............................ (4.25)%(1) 46.94% 31.78% 7.70%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses................................. 0.80 %(2)(3) 0.81%(3) 0.86%(3) 0.92%(2)
Net investment income.................... 0.14 %(2)(3) 0.28%(3) 0.43%(3) 0.38%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands............................... $392,184 $306,542 $116,894 $15,844
Portfolio turnover rate.................. 238 %(1) 378% 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.
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE> 19
MORGAN STANLEY DEAN WITTER AMERICAN OPPORTUNITIES FUND
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR ENDED DECEMBER 31,
MONTHS ENDED --------------------------------------------------------------------
JUNE 30, 2000++ 1999++ 1998++ 1997*++ 1996 1995
---------------------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of
period.............................. $42.63 $32.85 $29.51 $27.01 $27.16 $21.21
------ ------ ------ ------ ------ ------
Income (loss) from investment
operations:
Net investment income (loss)........ (0.06) (0.09) (0.03) (0.10) (0.08) 0.01
Net realized and unrealized gain
(loss)............................ (1.85) 14.58 8.66 8.34 2.86 8.87
------ ------ ------ ------ ------ ------
Total income (loss) from investment
operations.......................... (1.91) 14.49 8.63 8.24 2.78 8.88
------ ------ ------ ------ ------ ------
Less dividends and distributions
from:
Net investment income............... -- -- -- -- (0.01) --
Net realized gain................... (0.49) (4.71) (5.29) (5.74) (2.92) (2.93)
------ ------ ------ ------ ------ ------
Total dividends and distributions.... (0.49) (4.71) (5.29) (5.74) (2.93) (2.93)
------ ------ ------ ------ ------ ------
Net asset value, end of period....... $40.23 $42.63 $32.85 $29.51 $27.01 $27.16
====== ====== ====== ====== ====== ======
TOTAL RETURN+........................ (4.46)%(1) 46.12% 31.07% 31.55% 10.53% 42.20%
RATIOS TO AVERAGE NET ASSETS:
Expenses............................. 1.24 %(2)(3) 1.33%(3) 1.39%(3) 1.46% 1.53% 1.61%
Net investment income (loss)......... (0.30)%(2)(3) (0.24)%(3) (0.10)%(3) (0.34)% (0.33)% 0.06%
SUPPLEMENTAL DATA:
Net assets, end of period, in
millions............................ $10,827 $10,389 $5,750 $4,078 $3,099 $2,389
Portfolio turnover rate.............. 238 %(1) 378% 321% 275% 279% 256%
</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 amount were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE> 20
MORGAN STANLEY DEAN WITTER AMERICAN OPPORTUNITIES FUND
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX FOR THE YEAR FOR THE YEAR JULY 28, 1997*
MONTHS ENDED ENDED ENDED THROUGH
JUNE 30, 2000 DECEMBER 31, 1999 DECEMBER 31, 1998 DECEMBER 31, 1997
---------------------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C> <C>
CLASS C SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period........ $42.35 $32.74 $29.49 $31.87
------ ------ ------ ------
Income (loss) from investment operations:
Net investment loss........................ (0.12) (0.18) (0.10) (0.05)
Net realized and unrealized gain (loss).... (1.84) 14.50 8.64 2.32
------ ------ ------ ------
Total income (loss) from investment
operations................................. (1.96) 14.32 8.54 2.27
------ ------ ------ ------
Less distributions from net realized gain... (0.49) (4.71) (5.29) (4.65)
------ ------ ------ ------
Net asset value, end of period.............. $39.90 $42.35 $32.74 $29.49
====== ====== ====== ======
TOTAL RETURN+............................... (4.61)%(1) 45.75 % 30.78 % 7.39 %(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................... 1.55 %(2)(3) 1.59 %(3) 1.61 %(3) 1.66 %(2)
Net investment loss......................... (0.61)%(2)(3) (0.50)%(3) (0.32)%(3) (0.36)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..... $336,119 $245,942 $60,861 $12,204
Portfolio turnover rate..................... 238 % 378 % 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.
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE> 21
MORGAN STANLEY DEAN WITTER AMERICAN OPPORTUNITIES FUND
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX FOR THE YEAR FOR THE YEAR JULY 28, 1997*
MONTHS ENDED ENDED ENDED THROUGH
JUNE 30, 2000 DECEMBER 31, 1999 DECEMBER 31, 1998 DECEMBER 31, 1997
---------------------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C> <C>
CLASS D SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period........ $43.66 $33.31 $29.63 $31.87
------ ------ ------ ------
Income (loss) from investment operations:
Net investment income...................... 0.09 0.18 0.24 0.07
Net realized and unrealized gain (loss).... (1.90) 14.88 8.73 2.34
------ ------ ------ ------
Total income (loss) from investment
operations................................. (1.81) 15.06 8.97 2.41
------ ------ ------ ------
Less distributions from net realized gain... (0.49) (4.71) (5.29) (4.65)
------ ------ ------ ------
Net asset value, end of period.............. $41.36 $43.66 $33.31 $29.63
====== ====== ====== ======
TOTAL RETURN+............................... (4.13)%(1) 47.22% 32.12% 7.83%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................... 0.55 %(2)(3) 0.59%(3) 0.61%(3) 0.64%(2)
Net investment income....................... 0.39 %(2)(3) 0.50%(3) 0.68%(3) 0.50%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..... $479,555 $319,692 $135,022 $49,772
Portfolio turnover rate..................... 238 %(1) 378% 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.
SEE NOTES TO FINANCIAL STATEMENTS
21
<PAGE> 22
MORGAN STANLEY DEAN WITTER AMERICAN OPPORTUNITIES FUND
CHANGE IN INDEPENDENT ACCOUNTANTS
On July 1, 2000 PricewaterhouseCoopers LLP resigned as independent accountants
of the Fund.
The reports of PricewaterhouseCoopers LLP on the financial statements of the
Fund for the past two fiscal years contained no adverse opinion or disclaimer of
opinion and were not qualified or modified as to uncertainty, audit scope or
accounting principle.
In connection with its audit for the two most recent fiscal years and through
July 1, 2000, there have been no disagreements with PricewaterhouseCoopers LLP
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements if not resolved
to the satisfaction of PricewaterhouseCoopers LLP would have caused them to make
reference thereto in their report on the financial statements for such years.
The Fund, with the approval of its Board of Trustees and its Audit Committee,
engaged Deloitte & Touche LLP as its new independent accountants as of July 1,
2000.
22
<PAGE> 23
(This Page Intentionally Left Blank)
<PAGE> 24
TRUSTEES
----------------------------------
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
Wayne E. Hedien
James F. Higgins
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
----------------------------------
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Mitchell M. Merin
President
Barry Fink
Vice President, Secretary and General Counsel
Anita H. Kolleeny
Vice President
Michelle Kaufman
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
----------------------------------
Morgan Stanley Dean Witter Trust FSB
Harborside Financial Center -- Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
----------------------------------
Deloitte & Touche LLP
Two World Financial Center
New York, New York 10281
INVESTMENT MANAGER
----------------------------------
Morgan Stanley Dean Witter Advisors Inc.
Two World Trade Center
New York, New York 10048
The financial statements included herein have been taken from the records of the
Fund without examination by the independent accountants and accordingly they
do not express an opinion thereon.
This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and trustees,
fees, expenses and other pertinent information, please see the prospectus of
the Fund.
This report is not authorized for distribution to prospective investors in the
Fund unless preceded or accompanied by an effective prospectus. Read the
prospectus carefully before investing.
Morgan Stanley Dean Witter Distributors Inc., member NASD.
MORGAN STANLEY
DEAN WITTER
AMERICAN
OPPORTUNITIES
FUND
Semiannual Report
June 30, 2000
