<PAGE>
PROSPECTUS - AUGUST 29, 2000
ACTIVE ASSETS
MONEY TRUST
TAX-FREE TRUST
CALIFORNIA TAX-FREE TRUST
GOVERNMENT SECURITIES TRUST
FOUR DIFFERENT MONEY MARKET FUNDS OFFERED EXCLUSIVELY TO PARTICIPANTS IN
THE ACTIVE ASSETS-Registered Trademark- OR
BUSINESSCAPE-SM- FINANCIAL SERVICE PROGRAMS AND TO OTHER
INVESTORS WHO HAVE BROKERAGE ACCOUNTS WITH DEAN WITTER REYNOLDS
FOR INFORMATION ON THE ACTIVE ASSETS OR
BUSINESSCAPE FINANCIAL SERVICE PROGRAMS, READ
THE CLIENT ACCOUNT AGREEMENT FOR EACH PROGRAM
AND/OR CALL (800) 869-3326 OR (212) 392-5000 (FOR THE ACTIVE
ASSETS PROGRAM) OR (800) 355-3086 (FOR THE BUSINESSCAPE PROGRAM).
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> <C>
Eligible Investors/Overview .......................................................... 1
The Funds
Active Assets Money Trust Investment Objectives.... 2
Principal Investment
Strategies............... 2
Principal Risks.......... 3
Past Performance......... 4
Fees and Expenses........ 5
Active Assets Tax-Free Trust Investment Objective..... 6
Principal Investment
Strategies............... 6
Principal Risks.......... 7
Past Performance......... 8
Fees and Expenses........ 9
Active Assets California
Tax-Free Trust Investment Objective..... 10
Principal Investment
Strategies............... 10
Principal Risks.......... 11
Past Performance......... 12
Fees and Expenses........ 13
Active Assets Government
Securities Trust Investment Objectives.... 14
Principal Investment
Strategies............... 14
Principal Risks.......... 15
Past Performance......... 16
Fees and Expenses........ 17
Fund Management ..................................................................... 18
Shareholder Information Pricing Fund Shares...... 19
How Are Fund Investments
Made?.................... 19
How Are Fund Shares
Sold?.................... 20
Distributions............ 22
Tax Consequences......... 23
Financial Highlights ................................................................ 24
THIS PROSPECTUS CONTAINS IMPORTANT
INFORMATION ABOUT THE FUNDS.
PLEASE READ IT CAREFULLY AND KEEP IT FOR
FUTURE REFERENCE.
</TABLE>
<PAGE>
ELIGIBLE INVESTORS/OVERVIEW
Active Assets Money Trust, Active Assets Tax-Free Trust, Active
Assets California Tax-Free Trust and Active Assets Government
Securities Trust (each, a "Fund") are four separate money market
funds offered exclusively to: (i) participants in the Active
Assets-Registered Trademark- or BusinesScape-SM- financial service
programs offered by Dean Witter Reynolds (the "Financial Service
Programs"); and (ii) other investors who have a brokerage account
with Dean Witter Reynolds. (Dean Witter Reynolds is affiliated with
Morgan Stanley Dean Witter Advisors Inc., the Funds' Investment
Manager.)
Participants in the Financial Service Programs are offered a Dean
Witter brokerage account that is linked to the Funds, as well as to
Active Assets Institutional Money Trust and Active Assets Premier
Money Trust (two other money market funds participating in the
Financial Service Programs), a debit card, a checking account and, in
the case of the Active Assets program, a federally insured bank
account. In addition, participants in the BusinesScape program may
have access to a commercial line of credit.
The annual fee presently charged for participating in the Active
Assets Program is $80 for individuals and $100 for businesses. The
annual fee presently charged for participating in the BusinesScape
program is $150. At any time, Dean Witter Reynolds Inc. may change
the annual fee charged and the services provided under the Financial
Service Programs. For details on the Financial Service Programs,
please read the client account agreement for each program.
1
<PAGE>
[Sidebar]
MONEY MARKET
A MUTUAL FUND HAVING THE GOAL TO SELECT SECURITIES TO PROVIDE CURRENT INCOME
WHILE SEEKING TO MAINTAIN A STABLE SHARE PRICE OF $1.00.
YIELD
THE FUND'S YIELD REFLECTS THE ACTUAL INCOME THE FUND PAYS TO YOU EXPRESSED AS A
PERCENTAGE OF THE FUND'S SHARE PRICE. BECAUSE THE FUND'S INCOME FROM ITS
PORTFOLIO SECURITIES WILL FLUCTUATE, THE INCOME IT IN TURN DISTRIBUTES TO YOU
AND THE FUND'S YIELD WILL VARY.
[End Sidebar]
THE FUNDS
ACTIVE ASSETS MONEY TRUST
[ICON] INVESTMENT OBJECTIVES
--------------------------------------------------------------------------------
Active Assets Money Trust is a money market fund that seeks to
provide high current income, preservation of capital and liquidity.
[ICON] PRINCIPAL INVESTMENT STRATEGIES
--------------------------------------------------------------------------------
The Fund invests in high quality, short-term debt
obligations. In selecting investments, the
"Investment Manager," Morgan Stanley Dean Witter
Advisors Inc., seeks to maintain the Fund's share
price at $1.00. The share price remaining stable at
$1.00 means that the Fund would preserve the
principal value of your investment.
The Fund's investments include the following money
market instruments:
<TABLE>
<S> <C>
- Commercial paper.
- Corporate obligations.
- Debt obligations of U.S.-regulated banks and instruments
secured by those obligations. These investments include
certificates of deposit.
- Certificates of deposit of savings banks and savings and
loan associations.
- Debt obligations issued or guaranteed as to principal and
interest by the U.S. Government, its agencies or its
instrumentalities.
- Repurchase agreements, which may be viewed as a type of
secured lending by the Fund.
</TABLE>
2
<PAGE>
[ICON] PRINCIPAL RISKS
--------------------------------------------------------------------------------
There is no assurance that the Fund will achieve its investment
objectives.
CREDIT AND INTEREST RATE RISKS. Principal risks of investing in the
Fund are associated with its debt obligation investments. All debt
obligations, such as bonds, are subject to two types of risk: credit
risk and interest rate risk.
Credit risk refers to the possibility that the issuer of a security
will be unable to make interest payments and/or repay the principal
on its debt. Interest rate risk refers to fluctuations in the value
of a debt security resulting from changes in the general level of
interest rates.
The Investment Manager actively manages the Fund's assets to reduce
the risk of losing any principal investment as a result of credit or
interest rate risks. The Fund's assets are reviewed to maintain or
improve creditworthiness. In addition, federal regulations require
money market funds to invest only in debt obligations of high quality
and short-term maturities.
FOREIGN MONEY MARKET SECURITIES. The Fund may invest in U.S. dollar
denominated money market instruments and other short-term debt
obligations issued by foreign banks. Although the Fund will invest in
these securities only if the Investment Manager determines they are
of comparable quality to the Fund's U.S. investments, investing in
securities of foreign issuers involves some additional risks. These
risks may include higher costs of foreign investing, and the
possibility of adverse political, economic or other developments
affecting the issuers of these securities.
Shares of the Fund are not bank deposits and are not insured or
guaranteed by the FDIC or any other government agency. Although the
Fund seeks to preserve the value of your investment at $1.00 per
share, if it is unable to do so, it is possible to lose money by
investing in the Fund.
3
<PAGE>
[Sidebar]
ANNUAL TOTAL RETURNS
THIS CHART SHOWS HOW THE PERFORMANCE OF THE FUND'S SHARES HAS VARIED FROM YEAR
TO YEAR OVER THE PAST 10 CALENDAR YEARS.
AVERAGE ANNUAL
TOTAL RETURNS
THIS TABLE COMPARES THE FUND'S AVERAGE ANNUAL TOTAL RETURNS.
[End Sidebar]
[ICON] 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.
ANNUAL TOTAL RETURNS - CALENDAR YEARS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
1990 7.99%
'91 5.77%
'92 3.47%
'93 2.80%
'94 3.87%
'95 5.72%
'96 5.19%
'97 5.32%
'98 5.28%
'99 4.88%
</TABLE>
During the periods shown in the bar chart, the highest return for a
calendar quarter was 1.97% (quarter ended March 31, 1990) and the
lowest return for a calendar quarter was 0.67% (quarter ended
June 30, 1993). Year-to-date total return information as of
June 30, 2000 was 2.89%.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (AS OF DECEMBER 31, 1999)
----------------------------------------------------------------------------------
PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
<S> <C> <C> <C>
----------------------------------------------------------------------------------
Active Assets Money Trust 4.88% 5.28% 5.02%
----------------------------------------------------------------------------------
</TABLE>
For the Fund's most recent 7-day annualized yield you may call
(800) 869-NEWS.
4
<PAGE>
[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 JUNE 30, 2000.
[End Sidebar]
[ICON] FEES AND EXPENSES
--------------------------------------------------------------------------------
The table below briefly describes the fees and expenses that you may
pay if you buy and hold shares of the Fund. The Fund is a no-load
fund. The Fund does not impose any sales charges.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
<S> <C>
------------------------------------------------------------------------
Management fee 0.27%
------------------------------------------------------------------------
Distribution and service (12b-1) fees 0.10%
------------------------------------------------------------------------
Other expenses 0.05%
------------------------------------------------------------------------
Total annual Fund operating expenses 0.42%
------------------------------------------------------------------------
</TABLE>
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 table below shows your costs at the end of each period
based on these assumptions.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C>
---------------------------------------------------------
$43 $134 $234 $527
---------------------------------------------------------
</TABLE>
5
<PAGE>
[Sidebar]
MONEY MARKET
A MUTUAL FUND HAVING THE GOAL TO SELECT SECURITIES TO PROVIDE CURRENT INCOME
WHILE SEEKING TO MAINTAIN A STABLE SHARE PRICE OF $1.00.
YIELD
THE FUND'S YIELD REFLECTS THE ACTUAL INCOME THE FUND PAYS TO YOU EXPRESSED AS A
PERCENTAGE OF THE FUND'S SHARE PRICE. BECAUSE THE FUND'S INCOME FROM ITS
PORTFOLIO SECURITIES WILL FLUCTUATE, THE INCOME IT IN TURN DISTRIBUTES TO YOU
AND THE FUND'S YIELD WILL VARY.
[End Sidebar]
ACTIVE ASSETS TAX-FREE TRUST
[ICON] INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------
Active Assets Tax-Free Trust is a money market fund that seeks to
provide as high a level of daily income exempt from federal personal
income tax as is consistent with stability of principal and
liquidity.
[ICON] PRINCIPAL INVESTMENT STRATEGIES
--------------------------------------------------------------------------------
The Fund will invest in high quality, short-term
securities that are normally municipal obligations
that pay interest exempt from federal income taxes.
The Fund's "Investment Manager," Morgan Stanley Dean
Witter Advisors Inc., seeks to maintain the Fund's
share price at $1.00. The share price remaining
stable at $1.00 means that the Fund would preserve
the principal value of your investment.
Municipal obligations are securities issued by state
and local governments, and their agencies. These
securities typically are "general obligation" or
"revenue" bonds, notes or commercial paper. General
obligation securities are secured by the issuer's
faith and credit, including its taxing power for
payment of principal and interest. Revenue bonds,
however, are generally payable from a specific
revenue source. They are issued to fund a wide
variety of public and private projects in sectors
such as transportation, education and industrial
development. Included within the revenue bonds
category are participations in lease obligations and
installment purchase contracts of municipalities.
The Fund has a fundamental policy of investing at
least 80% of its total assets in securities the
interest on which is exempt from federal personal
income tax. This policy may not be changed without
shareholder approval.
The Fund may invest up to 20% of its total assets in securities that
pay interest income subject to the "alternative minimum tax," and
some taxpayers may have to pay tax on a Fund distribution of this
income; see the "Tax Consequences" section of this PROSPECTUS for
more details.
6
<PAGE>
[ICON] PRINCIPAL RISKS
--------------------------------------------------------------------------------
There is no assurance that the Fund will achieve its investment
objective.
CREDIT AND INTEREST RATE RISKS. Principal risks of investing in the
Fund are associated with its municipal investments. Municipal
obligations, as with all debt securities, are subject to two types of
risks: 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, another risk of debt securities, refers
to fluctuations in the value of a fixed-income security resulting
from changes in the general level of interest rates.
The Investment Manager, however, actively manages the Fund's assets
to reduce the risk of losing any principal investment as a result of
credit or interest rate risks. The Fund's assets are reviewed to
maintain or improve creditworthiness. In addition, federal
regulations require money market funds, such as the Fund, to invest
only in debt obligations of high quality and short-term maturities.
Shares of the Fund are not bank deposits and are not insured or
guaranteed by the FDIC or any other government agency. Although the
Fund seeks to preserve the value of your investment at $1.00 per
share, if it is unable to do so, it is possible to lose money by
investing in the Fund.
7
<PAGE>
[Sidebar]
ANNUAL TOTAL RETURNS
THIS CHART SHOWS HOW THE PERFORMANCE OF THE FUND'S SHARES HAS VARIED FROM YEAR
TO YEAR OVER A 10-YEAR PERIOD.
AVERAGE ANNUAL
TOTAL RETURNS
THIS TABLE COMPARES THE FUND'S AVERAGE ANNUAL TOTAL RETURNS.
[End Sidebar]
[ICON] 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.
ANNUAL TOTAL RETURNS - CALENDAR YEARS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
1990 5.51%
'91 4.08%
'92 2.53%
'93 1.99%
'94 2.38%
'95 3.36%
'96 2.98%
'97 3.14%
'98 2.95%
'99 2.74%
</TABLE>
During the periods shown in the bar chart, the highest return for a
calendar quarter was 1.40% (quarter ended December 31, 1990) and
the lowest return for a calendar quarter was 0.46% (quarter ended
March 31, 1994). Year-to-date total return information as of
June 30, 2000 was 1.68%.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (AS OF DECEMBER 31, 1999)
----------------------------------------------------------------------------------
PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
<S> <C> <C> <C>
----------------------------------------------------------------------------------
Active Assets Tax-Free Trust 2.74% 3.03% 3.16%
----------------------------------------------------------------------------------
</TABLE>
For the Fund's most recent 7-day annualized yield you may call
(800) 869-NEWS.
8
<PAGE>
[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 JUNE 30, 2000.
[End Sidebar]
[ICON] FEES AND EXPENSES
--------------------------------------------------------------------------------
The table below briefly describes the fees and expenses that you may
pay if you buy and hold shares of the Fund. The Fund is a no-load
fund. The Fund does not impose any sales charges.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
<S> <C>
------------------------------------------------------------------------
Management fee 0.37%
------------------------------------------------------------------------
Distribution and service (12b-1) fees 0.10%
------------------------------------------------------------------------
Other expenses 0.03%
------------------------------------------------------------------------
Total annual Fund operating expenses 0.50%
------------------------------------------------------------------------
</TABLE>
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.
This example shows what expenses you could pay over time. 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 table below
shows your costs at the end of each period based on these
assumptions.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C>
---------------------------------------------------------
$52 $162 $282 $634
---------------------------------------------------------
</TABLE>
9
<PAGE>
[Sidebar]
MONEY MARKET
A MUTUAL FUND HAVING THE GOAL TO SELECT SECURITIES TO PROVIDE CURRENT INCOME
WHILE SEEKING TO MAINTAIN A STABLE SHARE PRICE OF $1.00.
YIELD
THE FUND'S YIELD REFLECTS THE ACTUAL INCOME THE FUND PAYS TO YOU EXPRESSED AS A
PERCENTAGE OF THE FUND'S SHARE PRICE. BECAUSE THE FUND'S INCOME FROM ITS
PORTFOLIO SECURITIES WILL FLUCTUATE, THE INCOME IT IN TURN DISTRIBUTES TO YOU
AND THE FUND'S YIELD WILL VARY.
[End Sidebar]
ACTIVE ASSETS CALIFORNIA TAX-FREE TRUST
[ICON] INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------
Active Assets California Tax-Free Trust is a money market fund that
seeks to provide as high a level of daily income exempt from federal
and California personal income tax as is consistent with stability of
principal and liquidity.
[ICON] PRINCIPAL INVESTMENT STRATEGIES
--------------------------------------------------------------------------------
The Fund will invest in high quality, short-term securities that are
normally municipal obligations that pay interest exempt from federal
and California income taxes. The Fund's "Investment Manager," Morgan
Stanley Dean Witter Advisors Inc., seeks to maintain the Fund's share
price at $1.00. The share price remaining stable at $1.00 means that
the Fund would preserve the principal value of your investment.
The Investment Manager generally invests substantially all of the
Fund's assets in California municipal obligations. The interest on
these investments is exempt from federal and California state income
tax. The Fund may invest up to 20% of its assets in securities that
pay interest income subject to the "alternative minimum tax," and
some taxpayers may have to pay tax on a Fund distribution of this
income; see the "Tax Consequences" section of this PROSPECTUS for
more details. Municipal obligations are securities issued by state
and local governments and regional government authorities. These
securities typically are "general obligation" or "revenue" bonds,
notes or commercial paper. General obligation securities are secured
by the issuer's faith and credit, including its taxing power for
payment of principal and interest. Revenue bonds, however, are
generally payable from a specific revenue source. They are issued to
fund a wide variety of public and private projects in sectors such as
transportation, education and industrial development. Included within
the revenue bonds category are participations in lease obligations
and installment contracts of municipalities.
The Fund has a fundamental policy of investing at least 80% of its
total assets in securities the interest on which is exempt from
federal and California personal income tax. This policy may not be
changed without shareholder approval.
10
<PAGE>
[ICON] PRINCIPAL RISKS
--------------------------------------------------------------------------------
There is no assurance that the Fund will achieve its investment
objective.
CREDIT AND INTEREST RATE RISKS. A principal risk of investing in the
Fund is associated with its municipal investments, particularly its
concentration in municipal obligations of a single state. Municipal
obligations, as with all debt securities, are subject to two types of
risks: 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. However, unlike most fixed-income mutual funds, the Fund is
subject to the added credit risk of concentrating its investments in
a single state -- California -- and its municipalities. Because the
Fund concentrates its investments in securities issued by California
state and local governments and government authorities, the Fund
could be affected by political, economic and regulatory developments
concerning these issuers. Should any difficulties develop concerning
California issuers' ability to pay principal and/or interest on their
debt obligations, the Fund's value and yield could be adversely
affected.
Interest rate risk, another risk of debt securities, refers to
fluctuations in the value of a fixed-income security resulting from
changes in the general level of interest rates.
The Investment Manager, however, actively manages the Fund's assets
to reduce the risk of losing any principal investment as a result of
credit or interest rate risks. The Fund's assets are reviewed to
maintain or improve creditworthiness. In addition, federal
regulations require money market funds, such as the Fund, to invest
only in debt obligations of high quality and short-term maturities.
Shares of the Fund are not bank deposits and are not insured or
guaranteed by the FDIC or any other government agency. Although the
Fund seeks to preserve the value of your investment at $1.00 per
share, if it is unable to do so, it is possible to lose money by
investing in the Fund.
11
<PAGE>
[Sidebar]
ANNUAL TOTAL RETURNS
THIS CHART SHOWS HOW THE PERFORMANCE OF THE FUND'S SHARES HAS VARIED FROM YEAR
TO YEAR OVER THE PAST 8 CALENDAR YEARS.
AVERAGE ANNUAL
TOTAL RETURNS
THIS TABLE COMPARES THE FUND'S AVERAGE ANNUAL TOTAL RETURNS.
[End Sidebar]
[ICON] 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.
ANNUAL TOTAL RETURNS - CALENDAR YEARS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
1992 2.14%
'93 1.72%
'94 2.20%
'95 3.10%
'96 2.73%
'97 2.88%
'98 2.58%
'99 2.35%
</TABLE>
During the periods shown in the bar chart, the highest return for a
calendar quarter was 0.82% (quarter ended June 30, 1995) and the
lowest return for a calendar quarter was 0.41% (quarter ended
March 31, 1994). Year-to-date total return as of June 30, 2000 was
1.34%.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (AS OF DECEMBER 31, 1999)
-----------------------------------------------------------------------------------
LIFE OF FUND
PAST 1 YEAR PAST 5 YEARS (SINCE 11/12/91)
<S> <C> <C> <C>
-----------------------------------------------------------------------------------
Active Assets California
Tax-Free Trust 2.35% 2.73% 2.49%
-----------------------------------------------------------------------------------
</TABLE>
For the Fund's most recent 7-day annualized yield you may call
(800) 869-NEWS.
12
<PAGE>
[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 JUNE 30, 2000.
[End Sidebar]
[ICON] FEES AND EXPENSES
--------------------------------------------------------------------------------
The table below briefly describes the fees and expenses that you may
pay if you buy and hold shares of the Fund. The Fund is a no-load
fund. The Fund does not impose any sales charges.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
<S> <C>
------------------------------------------------------------------------
Management fee 0.47%
------------------------------------------------------------------------
Distribution and service (12b-1) fees 0.10%
------------------------------------------------------------------------
Other expenses 0.04%
------------------------------------------------------------------------
Total annual Fund operating expenses 0.61%
------------------------------------------------------------------------
</TABLE>
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 table below shows your costs at the end of each period
based on these assumptions.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C>
---------------------------------------------------------
$63 $196 $342 $765
---------------------------------------------------------
</TABLE>
13
<PAGE>
[Sidebar]
MONEY MARKET
A MUTUAL FUND HAVING THE GOAL TO SELECT SECURITIES TO PROVIDE CURRENT INCOME
WHILE SEEKING TO MAINTAIN A STABLE SHARE PRICE OF $1.00.
YIELD
THE FUND'S YIELD REFLECTS THE ACTUAL INCOME THE FUND PAYS TO YOU EXPRESSED AS A
PERCENTAGE OF THE FUND'S SHARE PRICE. BECAUSE THE FUND'S INCOME FROM ITS
PORTFOLIO SECURITIES WILL FLUCTUATE, THE INCOME IT IN TURN DISTRIBUTES TO YOU
AND THE FUND'S YIELD WILL VARY.
[End Sidebar]
ACTIVE ASSETS GOVERNMENT SECURITIES TRUST
[ICON] INVESTMENT OBJECTIVES
--------------------------------------------------------------------------------
Active Assets Government Securities Trust is a money market fund that
seeks to provide high current income, preservation of capital and
liquidity.
[ICON] PRINCIPAL INVESTMENT STRATEGIES
--------------------------------------------------------------------------------
The Fund will invest in high quality, short-term U.S. Government
securities. The Fund's "Investment Manager," Morgan Stanley Dean
Witter Advisors Inc., seeks to maintain the Fund's share price at
$1.00. The share price remaining stable at $1.00 means that the Fund
would preserve the principal value of your investment.
The U.S. Government securities that the Fund may purchase include:
- U.S. Treasury bills, notes and bonds, all of which
are direct obligations of the U.S. Government.
- Securities issued by agencies and instrumentalities
of the U.S. Government which are backed by the full
faith and credit of the United States. Among the
agencies and instrumentalities issuing these
obligations are the Government National Mortgage
Association and the Federal Housing Administration.
- Securities issued by agencies and instrumentalities
which are not backed by the full faith and credit
of the United States, but whose issuing agency or
instrumentality has the right to borrow from the
U.S. Treasury to meet its obligations. Among these
agencies and instrumentalities are the Federal
National Mortgage Association, the Federal Home
Loan Mortgage Corporation and the Federal Home Loan
Banks.
- Securities issued by agencies and instrumentalities
which are backed solely by the credit of the
issuing agency or instrumentality. Among these
agencies and instrumentalities is the Federal Farm
Credit System.
The Fund also may invest up to 10% of its total assets in FDIC
insured certificates of deposit of banks and savings and loan
institutions.
In addition, the Fund may invest in repurchase agreements which may
be viewed as a type of secured lending by the Fund.
14
<PAGE>
[ICON] PRINCIPAL RISKS
--------------------------------------------------------------------------------
There is no assurance that the Fund will achieve its investment
objectives.
CREDIT AND INTEREST RATE RISKS. A principal risk of investing in the
Fund is associated with its U.S. Government securities investments,
which are subject to two types of risks: 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, another risk of debt
securities, refers to fluctuations in the value of a fixed-income
security resulting from changes in the general level of interest
rates.
Credit risk is minimal with respect to the Fund's U.S. Government
securities investments. Repurchase agreements and insured
certificates of deposit may involve a greater degree of credit risk.
The Investment Manager, however, actively manages the Fund's assets
to reduce the risk of losing any principal investment as a result of
credit or interest rate risks. In addition, federal regulations
require money market funds, such as the Fund, to invest only in debt
obligations of high quality and short-term maturities.
Shares of the Fund are not bank deposits and are not insured or
guaranteed by the FDIC or any other government agency. Although the
Fund seeks to preserve the value of your investment at $1.00 per
share, if it is unable to do so, it is possible to lose money by
investing in the Fund.
15
<PAGE>
[Sidebar]
ANNUAL TOTAL RETURNS
THIS CHART SHOWS HOW THE PERFORMANCE OF THE FUND'S SHARES HAS VARIED FROM YEAR
TO YEAR OVER THE PAST 10 CALENDAR YEARS.
AVERAGE ANNUAL
TOTAL RETURNS
THIS TABLE COMPARES THE FUND'S AVERAGE ANNUAL TOTAL RETURNS.
[End Sidebar]
[ICON] 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.
ANNUAL TOTAL RETURNS - CALENDAR YEARS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
1990 7.63%
'91 5.52%
'92 3.25%
'93 2.57%
'94 3.61%
'95 5.40%
'96 4.89%
'97 4.99%
'98 4.96%
'99 4.58%
</TABLE>
During the periods shown in the bar chart, the highest return for a
calendar quarter was 1.88% (quarter ended June 30, 1990) and the
lowest return for a calendar quarter was 0.62% (quarter ended
June 30, 1993). Year-to-date total return information as of
June 30, 2000 was 2.72%.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (AS OF DECEMBER 31, 1999)
----------------------------------------------------------------------------------
PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
<S> <C> <C> <C>
----------------------------------------------------------------------------------
Active Assets Government
Securities Trust 4.58% 4.96% 4.73%
----------------------------------------------------------------------------------
</TABLE>
For the Fund's most recent 7-day annualized yield you may call
(800) 869-NEWS.
16
<PAGE>
[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 JUNE 30, 2000.
[End Sidebar]
[ICON] FEES AND EXPENSES
--------------------------------------------------------------------------------
The table below briefly describes the fees and expenses that you may
pay if you buy and hold shares of the Fund. The Fund is a no-load
fund. The Fund does not impose any sales charges.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
<S> <C>
------------------------------------------------------------------------
Management fee 0.45%
------------------------------------------------------------------------
Distribution and service (12b-1) fees 0.10%
------------------------------------------------------------------------
Other expenses 0.04%
------------------------------------------------------------------------
Total annual Fund operating expenses 0.59%
------------------------------------------------------------------------
</TABLE>
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 table below shows your costs at the end of each period
based on these assumptions.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C>
---------------------------------------------------------
$60 $187 $327 $732
---------------------------------------------------------
</TABLE>
17
<PAGE>
[Sidebar]
MORGAN STANLEY DEAN WITTER ADVISORS INC.
THE INVESTMENT MANAGER IS WIDELY RECOGNIZED AS A LEADER IN THE MUTUAL FUND
INDUSTRY AND TOGETHER WITH MORGAN STANLEY DEAN WITTER SERVICES COMPANY INC., ITS
WHOLLY-OWNED SUBSIDIARY, HAD APPROXIMATELY $150 BILLION IN ASSETS UNDER
MANAGEMENT AS OF JULY 31, 2000.
[End Sidebar]
FUND MANAGEMENT
Each 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,
NY 10048.
Each 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 each Fund's average daily net assets. For the fiscal
year ended June 30, 2000, each Fund accrued total compensation to the
Investment Manager as follows:
<TABLE>
<CAPTION>
INVESTMENT MANAGEMENT
FEE ACCRUED
(AS A PERCENT OF
FUND FUND'S AVERAGE NET ASSETS)
<S> <C>
-------------------------------------------------------------------------------------
Active Assets Money Trust 0.27%
-------------------------------------------------------------------------------------
Active Assets Tax-Free Trust 0.37%
-------------------------------------------------------------------------------------
Active Assets California Tax-Free Trust 0.47%
-------------------------------------------------------------------------------------
Active Assets Government Securities Trust 0.45%
-------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
[Sidebar]
CONTACTING A
FINANCIAL ADVISOR
IF YOU ARE NEW TO THE MORGAN STANLEY DEAN WITTER FAMILY OF FUNDS AND WOULD LIKE
TO CONTACT A FINANCIAL ADVISOR, CALL (877) 937-MSDW (TOLL-FREE) FOR THE
TELEPHONE NUMBER OF THE MORGAN STANLEY DEAN WITTER OFFICE NEAREST YOU.
YOU MAY ALSO ACCESS OUR OFFICE LOCATOR ON OUR INTERNET SITE
AT: www.msdw.com/individual/funds
[End Sidebar]
SHAREHOLDER INFORMATION
[ICON] PRICING FUND SHARES
--------------------------------------------------------------------------------
The price of each Fund's shares, called "net asset value," is based
on the amortized cost of the Fund's portfolio securities. The
amortized cost valuation method involves valuing a debt obligation in
reference to its cost, rather than market forces.
The net asset value per share of each Fund is determined once daily
at 12:00 noon Eastern time on each day that the New York Stock
Exchange is open. Shares will not be priced on days that the New York
Stock Exchange is closed.
[ICON] HOW ARE FUND INVESTMENTS MADE?
--------------------------------------------------------------------------------
PARTICIPANTS:
Cash balances in your Financial Service Program account (through the
Active Assets program or the BusinesScape program) that are not
invested in securities will be automatically invested in shares of
the Fund of your choice on days that the New York Stock Exchange is
open for business (a "business day"). You may select any fund offered
for investment to Financial Service Program participants, including
the Funds and Active Assets Institutional Money Trust and Active
Assets Premier Money Trust. In each case, please read the respective
fund's prospectus carefully prior to making an investment decision.
If you are a participant in the BusinesScape program, you may select
more than one fund unless you select to invest in either Active
Assets Institutional Money Trust or Active Assets Premier Money
Trust. Alternatively, if you are a participant in the Active Assets
program, you may choose to have your cash balances deposited in a
federally insured bank account designated by Dean Witter Reynolds
Inc. rather than invested in a fund. You may change your investment
selection at any time by notifying your Morgan Stanley Dean Witter
Financial Advisor. Upon selecting a different fund, your shares held
in the previously designated fund will automatically be sold and
reinvested in shares of the newly selected fund.
Your account will be reviewed on each business day to determine
whether the account has a cash balance as a result of any credits
accrued that day. Credits to your account may arise, for example,
from sales of securities or from direct cash payments into the
account. The cash balance, reduced by any debits to your account
incurred that day, will be used to purchase shares of the fund of
your choice on the next business day at the fund's share price
calculated on that next day. Debits to your account may arise from
purchases of securities, margin calls, other account charges
(including, in the case of your BusinesScape account, any principal
and/or interest owed on your commercial line of credit, if
applicable), debit card purchases, cash advances, or withdrawals, and
any checks written against the account.
19
<PAGE>
Dividends are not earned until the next business day following the
purchase of Fund shares.
If you make a cash payment into your account after your Financial
Advisor's deadline for processing checks has passed, then investment
in the Fund of your choice may not occur until the second business
day after the payment is made (and at the price of the Fund's shares
calculated on that second business day). No payments into the account
will be credited until federal or other immediately available funds
become available to the account.
There is no minimum investment amount for participants, although the
current minimum initial deposit into an Active Assets account is
$5,000 in cash or securities and $20,000 in cash or securities for a
BusinesScape account.
NON-PARTICIPANTS:
To invest in any of the Funds, contact your Morgan Stanley Dean
Witter Financial Advisor. Your Financial Advisor will assist you
step-by-step with the procedures to invest in a Fund. The minimum
investment amount is $5,000 for initial investments. We may offer
reduced minimums or automatic investment options for investors that
have certain brokerage accounts held with Dean Witter Reynolds Inc.
Fund shares are purchased at the next share price calculated after we
receive your purchase order (accompanied by federal or other
immediately available funds).
Non-Participants considering investing in any of the Funds should
recognize that the Funds have been created specifically for the
Financial Service Programs and, as such, the Funds do not offer
typical money market fund features, such as checkwriting privileges,
to non-Participants. (We do offer other comparable money market funds
that have these features. For more information, call your Morgan
Stanley Dean Witter Financial Advisor.)
PLAN OF DISTRIBUTION:
Each Fund has adopted a Plan of Distribution in accordance with
Rule 12b-1 under the Investment Company Act of 1940. The Plan allows
each Fund to pay distribution fees for the sale and distribution of
these shares. It also allows each Fund to pay for services to
shareholders. Because these fees are paid out of each Fund's assets
on an ongoing basis, over time these fees will increase the cost of
your investment and may cost you more than paying other types of
sales charges.
[ICON] HOW ARE FUND SHARES SOLD?
--------------------------------------------------------------------------------
PARTICIPANTS:
AUTOMATIC SALES. Your account will be reviewed on each business day
to determine whether the account has a negative balance as a result
of debits incurred on that day. Of course, the negative balance will
be reduced by any credits accrued to the account on
20
<PAGE>
that day. On the next business day, a sufficient number of your Fund
shares will automatically be sold to equal the value of the negative
balance. The sale price of the Fund's shares will be the share price
calculated on that next business day. If the value of your Fund
shares is insufficient to equal the negative balance, Dean Witter
Reynolds Inc. is authorized to take the actions described in your
client account agreement, including, if you are eligible, applying a
margin loan to your account or accessing your line of credit, as
applicable, to cover outstanding debits.
In addition, if Dean Witter Reynolds Inc. exercises its right to
terminate the Financial Service Program you are invested in, then all
of your Fund shares will be sold.
VOLUNTARY SALES. If you wish to sell all or some of your Fund shares,
you may do so by:
(a) writing a check against your account in an amount equal to the
value of shares you wish to sell (there may be fees imposed for
writing these checks);
(b) obtaining cash using your debit card (there may be fees imposed
and certain limitations on withdrawals); or
(c) calling your Morgan Stanley Dean Witter Financial Advisor.
Once you have taken any of these steps, Fund shares will be sold at
the Fund's share price calculated on the next business day. Proceeds
from your sale of Fund shares will be reduced by any outstanding
debits to your account. Prior to selling any Fund shares through any
of the above methods you should call your Morgan Stanley Dean Witter
Financial Advisor or the applicable information number appearing on
the cover of this PROSPECTUS to determine the value of Fund shares
you own. If there is an insufficient value of Fund shares to cover
your account withdrawals (I.E., debit card purchases or checks
written), then Dean Witter Reynolds Inc. may take the authorized
steps described in your client account agreement.
NON-PARTICIPANTS:
You can sell some or all of your Fund shares at any time. Your shares
will be sold at the next share price calculated after we receive your
order to sell as described below.
To sell your shares, simply call your Morgan Stanley Dean Witter
Financial Advisor or other authorized financial representative.
Payment will be sent to the address to which the account is
registered or deposited in your brokerage account.
You may also sell your shares by writing a "letter of instruction"
that includes:
- your account number;
- the dollar amount or the number of shares you wish to sell; and
- 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)
21
<PAGE>
or pre-designated bank account, you will need a signature guarantee.
You can generally obtain a signature guarantee from an eligible
guarantor acceptable to Morgan Stanley Dean Witter Trust FSB. (You
should contact Morgan Stanley Dean Witter Trust FSB at
(800) 869-NEWS for a determination as to whether a particular
institution is an eligible guarantor.) A notary public CANNOT provide
a signature guarantee. Additional documentation may be required for
shares held by a corporation, partnership, trustee or executor. Mail
the letter to Morgan Stanley Dean Witter Trust FSB at P.O. Box 983,
Jersey City, NJ 07303. A check will be mailed to the name(s) and
address in which the account is registered, or otherwise according to
your instructions.
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.
Certain Dean Witter brokerage accounts held by non-Participants may
be eligible for an automatic redemption option where Fund shares are
sold automatically under specified circumstances. For more
information contact your Morgan Stanley Dean Witter Financial
Advisor.
PARTICIPANTS AND NON-PARTICIPANTS:
Payment for Fund shares sold may be postponed or the right to have
Fund shares sold may be suspended under unusual circumstances. If you
request to sell shares that were recently purchased by check, your
sale will not be effected until it has been verified that the check
has been honored.
[ICON] DISTRIBUTIONS
--------------------------------------------------------------------------------
Each Fund passes substantially all of its earnings along to its
investors as "distributions." Each Fund earns interest from
fixed-income investments. These amounts are passed along to Fund
shareholders as "income dividend distributions." Each Fund realizes
capital gains whenever it sells securities for a higher price than it
paid for them. These amounts may be passed along as "capital gain
distributions;" the Investment Manager does not anticipate that there
will be significant capital gain distributions.
Each Fund declares income dividends, payable on each day the New York
Stock Exchange is open for business, of all of its daily net income
to shareholders of record as of 12:00 noon the preceding business
day. Dividends are reinvested automatically in additional shares of
the Fund (rounded to the last 1/100 of a share). With respect to each
of Active Assets Money Trust and Active Assets Government Securities
Trust, its short-term capital gains, if any, are declared and payable
on each business day. The other Funds' short-term capital gains, if
any, are distributed periodically. Each Fund's long-term capital
gains, if any, are distributed at least once in December.
22
<PAGE>
[ICON] TAX CONSEQUENCES
--------------------------------------------------------------------------------
As with any investment, you should consider how your investment in a
Fund 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 a Fund.
Your income dividend distributions from Active Assets Money Trust and
Active Assets Government Securities Trust are normally subject to
federal and state income tax when they are paid.
Income dividend distributions from Active Assets Tax-Free Trust are
normally exempt from federal income tax and will generally be subject
to state income tax. Income dividend distributions from Active Assets
California Tax-Free Trust are exempt from federal and California
state income taxes -- to the extent they are derived from California
municipal obligations. With respect to these two Funds, income
derived from certain portfolio securities may be subject to federal,
state and/or local income taxes.
With respect to Active Assets Tax-Free Trust and Active Assets
California Tax-Free Trust, income derived from certain municipal
securities may be subject to the federal "alternative minimum tax."
Certain tax-exempt securities whose proceeds are used to finance
private, for-profit organizations are subject to this special tax
system that ensures that individuals pay at least some federal taxes.
Although interest on these securities is generally exempt from
federal income tax, some taxpayers who have many tax deductions or
exemptions nevertheless may have to pay tax on the income.
If a Fund makes any capital gain distributions, those distributions
will normally be subject to federal and state income tax when they
are paid. Any short-term capital gain distributions are taxable to
you as ordinary income. Any long-term capital gain distributions are
taxable to you as long-term capital gains, no matter how long you
have owned shares in a Fund.
Every January, you will be sent a statement (IRS Form 1099-DIV)
showing the distributions paid to you in the previous year. The
statement provides information on your dividends and capital gains
for tax purposes.
When you open your Fund account, you should provide your social
security or tax identification number. By providing this information,
you will avoid being subject to a federal backup withholding tax of
31% on taxable distributions and sale proceeds. Any withheld amount
would be sent to the IRS as an advance tax payment.
23
<PAGE>
ACTIVE ASSETS MONEY TRUST
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
financial performance for the past five fiscal years of the Fund. Certain
information reflects financial results for a single Fund share throughout each
year. The total returns in the table represent the rate an investor would have
earned or lost on an investment in the Fund (assuming reinvestment of all
dividends and distributions).
This information for the year ended June 30, 2000 has been audited by
Deloitte & Touche LLP, independent accountants, whose report, along with the
Fund's financial statements, is available upon request. The financial highlights
for each of the years in the four-year period ended June 30, 1999 have been
audited by other independent accountants.
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30, 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA:
------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------------------------------------------------------------------------------------------------------------------
Net income from investment operations 0.054 0.048 0.052 0.051 0.052
------------------------------------------------------------------------------------------------------------------------
Less dividends from net investment income (0.054) (0.048) (0.052) (0.051) (0.052)
------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 5.50% 4.92% 5.38% 5.23% 5.33%
------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
------------------------------------------------------------------------------------------------------------------------
Expenses 0.42% 0.43% 0.44% 0.45% 0.47%
------------------------------------------------------------------------------------------------------------------------
Net investment income 5.38% 4.78% 5.24% 5.07% 5.21%
------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
------------------------------------------------------------------------------------------------------------------------
Net assets, end of period, in millions $20,972 $15,989 $11,922 $8,928 $7,170
------------------------------------------------------------------------------------------------------------------------
</TABLE>
24
ACTIVE ASSETS MONEY TRUST
<PAGE>
ACTIVE ASSETS TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
financial performance for the past five fiscal years of the Fund. Certain
information reflects financial results for a single Fund share throughout each
year. The total returns in the table represent the rate an investor would have
earned or lost on an investment in the Fund (assuming reinvestment of all
dividends and distributions).
This information for the year ended June 30, 2000 has been audited by
Deloitte & Touche LLP, independent accountants, whose report, along with the
Fund's financial statements, is available upon request. The financial highlights
for each of the years in the four-year period ended June 30, 1999 have been
audited by other independent accountants.
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30, 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA:
---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------------------------------------------------------------------------------------------------------------------
Net income from investment operations 0.031 0.027 0.031 0.030 0.031
---------------------------------------------------------------------------------------------------------------------
Less dividends from net investment income (0.031) (0.027) (0.031) (0.030) (0.031)
---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 3.15% 2.73% 3.11% 3.05% 3.12%
---------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
---------------------------------------------------------------------------------------------------------------------
Expenses 0.50% 0.52% 0.54% 0.55% 0.55%
---------------------------------------------------------------------------------------------------------------------
Net investment income 3.11% 2.68% 3.05% 2.98% 3.08%
---------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
---------------------------------------------------------------------------------------------------------------------
Net assets, end of period, in millions $2,660 $2,290 $1,869 $1,634 $1,542
---------------------------------------------------------------------------------------------------------------------
</TABLE>
25
ACTIVE ASSETS TAX-FREE TRUST
<PAGE>
ACTIVE ASSETS CALIFORNIA TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
financial performance for the past five fiscal years of the Fund. Certain
information reflects financial results for a single Fund share throughout each
year. 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).
The information for the year ended June 30, 2000 has been audited by Deloitte &
Touche LLP, independent accountants, whose report, along with the Fund's
financial statements, is available upon request. The financial highlights for
each of the years in the four-year period ended June 30, 1999 have been audited
by other independent accountants.
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30, 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA:
---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------------------------------------------------------------------------------------------------------------------
Net income from investment operations 0.026 0.023 0.028 0.028 0.028
---------------------------------------------------------------------------------------------------------------------
Less dividends from net investment income (0.026) (0.023) (0.028) (0.028) (0.028)
---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 2.60% 2.31% 2.84% 2.83% 2.82%
---------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
---------------------------------------------------------------------------------------------------------------------
Expenses 0.61% 0.63%(1) 0.64% 0.66%(1) 0.67%
---------------------------------------------------------------------------------------------------------------------
Net investment income 2.55% 2.28% 2.79% 2.78% 2.79%
---------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
---------------------------------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $697,703 $625,753 $549,779 $431,382 $384,218
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Does not reflect the effect of expense offset of 0.01%.
26
ACTIVE ASSETS CALIFORNIA TAX-FREE TRUST
<PAGE>
ACTIVE ASSETS GOVERNMENT SECURITIES TRUST
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
financial performance for the past five fiscal years of the Fund. Certain
information reflects financial results for a single Fund share throughout each
year. 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).
The information for the year ended June 30, 2000 has been audited by Deloitte &
Touche LLP, independent accountants, whose report, along with the Fund's
financial statements, is available upon request. The financial highlights for
each of the years in the four-year period ended June 30, 1999 have been audited
by other independent accountants.
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30, 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA:
---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------------------------------------------------------------------------------------------------------------------
Net income from investment operations 0.050 0.045 0.049 0.048 0.049
---------------------------------------------------------------------------------------------------------------------
Less dividends from net investment income (0.050) (0.045) (0.049) (0.048) (0.049)
---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 5.17% 4.64% 5.05% 4.92% 5.03%
---------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
---------------------------------------------------------------------------------------------------------------------
Expenses 0.59% 0.61% 0.63% 0.64% 0.65%
---------------------------------------------------------------------------------------------------------------------
Net investment income 5.03% 4.50% 4.93% 4.78% 4.93%
---------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
---------------------------------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $932,466 $995,448 $698,977 $620,449 $571,400
---------------------------------------------------------------------------------------------------------------------
</TABLE>
27
ACTIVE ASSETS GOVERNMENT SECURITIES TRUST
<PAGE>
NOTES
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28
<PAGE>
NOTES
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29
<PAGE>
PROSPECTUS - AUGUST 29, 2000
Additional information about each Fund's investments is available in the Fund's
ANNUAL AND SEMI-ANNUAL REPORT TO SHAREHOLDERS (the current annual report is
included in this PROSPECTUS). The Funds' STATEMENT OF ADDITIONAL INFORMATION
also provides additional information about the Funds. 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 Funds, or to make shareholder inquiries, please call:
(800) 869-NEWS
You also may obtain information about each Fund by calling your Morgan Stanley
Dean Witter Financial Advisor or by visiting our Internet site at:
WWW.MSDW.COM/INDIVIDUAL/FUNDS
Information about the Funds (including the STATEMENT OF ADDITIONAL INFORMATION)
can be viewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, DC. Information about the Reference Room's
operations may be obtained by calling the SEC at (202) 942-8090. Reports and
other information about the Funds are available on the EDGAR Database on the
SEC's Internet site (www.sec.gov) and copies of this information may be
obtained, after paying a duplicating fee, by electronic request at the following
E-mail address: [email protected], or by writing the Public Reference Section
of the SEC, Washington, DC 20549-0102.
TICKER SYMBOLS:
<TABLE>
<S> <C>
ACTIVE ASSETS MONEY TRUST AAMXX
--------------------------------------- -------
ACTIVE ASSETS TAX-FREE TRUST AATXX
--------------------------------------- -------
ACTIVE ASSETS CALIFORNIA TAX-FREE TRUST AACXX
--------------------------------------- -------
ACTIVE ASSETS GOVERNMENT SECURITIES
TRUST AAGXX
--------------------------------------- -------
</TABLE>
(THE FUNDS' INVESTMENT COMPANY ACT FILE NOS. ARE 811-3159, 811-3162, 811-6530,
811-3165)
Active Assets
MONEY TRUST
TAX-FREE TRUST
CALIFORNIA TAX-FREE TRUST
GOVERNMENT SECURITIES TRUST
FOUR DIFFERENT MONEY MARKET
FUNDS OFFERED EXCLUSIVELY TO
PARTICIPANTS IN THE ACTIVE ASSETS-Registered Trademark-
OR BUSINESSCAPE-SM- FINANCIAL
SERVICE PROGRAMS AND TO
OTHER INVESTORS WHO HAVE
BROKERAGE ACCOUNTS WITH
DEAN WITTER REYNOLDS
