MORGAN STANLEY DEAN WITTER DEVELOPING GROWTH SECURITIES TRUS, 485APOS, 1999-09-28

MORGAN STANLEY DEAN WITTER DEVELOPING GROWTH SECURITIES TRUS
485APOS, 1999-09-28

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 28, 1999
REGISTRATION NOS.: 2-81151
811-3639
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549
----------------
FORM N-1A
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. 18 [X]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 [X]
AMENDMENT NO. 20 [X]
----------------
MORGAN STANLEY DEAN WITTER
DEVELOPING GROWTH SECURITIES TRUST
(FORMERLY NAMED DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST)
(A MASSACHUSETTS BUSINESS TRUST)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

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

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 392-1600
BARRY FINK, ESQ.
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(NAME AND ADDRESS OF AGENT FOR SERVICE)

Copy to:
STUART M. STRAUSS, ESQ.
MAYER, BROWN & PLATT
1675 BROADWAY
NEW YORK, NEW YORK 10019
----------------
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:

As soon as practicable after this Post-Effective Amendment becomes effective.

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

---- immediately upon filing pursuant to paragraph (b)

---- on (date) pursuant to paragraph (b)

---- 60 days after filing pursuant to paragraph (a)
X
---- on November 29, 1999 pursuant to paragraph (a) of rule
485.

----------------
AMENDING THE PROSPECTUS
- --------------------------------------------------------------------------------
<PAGE>

- --------------------------------------------------------------------------------
PROSPECTUS - NOVEMBER 29, 1999
- --------------------------------------------------------------------------------

Morgan Stanley Dean Witter

DEVELOPING GROWTH SECURITIES TRUST

A MUTUAL FUND THAT SEEKS LONG-TERM CAPITAL GROWTH

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

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

Principal Risks ...................................1

Past Performance ..................................3

Fees and Expenses .................................4

Additional Investment Strategy Information ........5

Additional Risk Information .......................6

Fund Management ...................................7

Shareholder Information Pricing Fund Shares ...............................9

How to Buy Shares .................................9

How to Exchange Shares ............................11

How to Sell Shares ................................13

Distributions .....................................15

Tax Consequences ..................................15

Share Class Arrangements ..........................16

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

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

<PAGE>

THE FUND

[GRAPHIC OMITTED]

INVESTMENT OBJECTIVE
- --------------------------------
Morgan Stanley Dean Witter Developing Growth Securities Trust (the
"Fund") seeks long-term capital growth.

[GRAPHIC OMITTED]

PRINCIPAL INVESTMENT STRATEGIES
- --------------------------------------------
[sidebar]
CAPITAL GROWTH
An investment objective having the goal of selecting securities with the
potential to rise in price rather than pay out income.
[end sidebar]

The Fund will normally invest at least 65% of its total assets in common
stocks and other equity securities of companies that the Fund's "Investment
Manager," Morgan Stanley Dean Witter Advisors Inc., believes have the
potential to grow much more rapidly than the economy. The Fund's other
equity securities may include convertible securities and preferred stocks.
The Fund will invest primarily in smaller and medium-sized companies. The
Investment Manager focuses its securities selection upon a diversified
group of emerging growth companies that have moved beyond the difficult and
extremely risky start-up phase and show positive earnings with the
prospects of achieving significant further profit gains in at least the
next two-to-three years. The proportion of the Fund's assets invested in
particular industries will shift in accordance with the Investment
Manager's views of the market, economy and political conditions.

Common stock is a share ownership or equity interest in a corporation. It
may or may not pay dividends, as some companies reinvest all of their
profits back into their businesses, while others pay out some of their
profits to shareholders as dividends. A depository receipt is generally
issued by a bank or financial institution and represents an ownership
interest in the common stock or other equity securities of a foreign
company.

In addition, the Fund may invest in fixed-income securities issued or
guaranteed by United States government, its agencies or instrumentalities,
investment grade debt securities and foreign securities.

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

[GRAPHIC OMITTED]

PRINCIPAL RISKS
- --------------------------
There is no assurance that the Fund will achieve its investment objective.
The Fund's share price will fluctuate with changes in the market value of
the Fund's portfolio

<PAGE>

securities. When you sell Fund shares, they may be worth less than what you
paid for them and, accordingly, you can lose money investing in this Fund.

Common Stocks and Other Equity Securities. A principal risk of investing in
the Fund is associated with its investments in common stocks and other
equity securities. In general, stock and other equity security values
fluctuate in response to activities specific to the company as well as
general market, economic and political conditions. These prices can
fluctuate widely.

Investing in securities of medium-sized and small companies may involve
greater risk than is customarily associated with investing in more
established companies. Often, medium-sized and small companies and the
industries in which they are focused are still evolving, and they are more
sensitive to changing market conditions than larger companies in more
established industries. Their securities may be more volatile and have
returns that vary, sometimes significantly, from the overall stock market.

Convertible Securities. The Fund's investments in convertible securities
subject the Fund to the risks associated with both fixed-income securities
and common stocks. To the extent that a convertible security's investment
value is greater than its conversion value, its price will be likely to
increase when interest rates fall and decrease when interest rates rise, as
with a fixed-income security. If the conversion value exceeds the
investment value, the price of the convertible security will tend to
fluctuate directly with the price of the underlying equity security.

Other Risks. The performance of the Fund also will depend on whether the
Investment Manager is successful in pursuing the Fund's investment
strategy. The Fund is also subject to other risks from its permissible
investments including the risks associated with fixed-income securities and
foreign securities.

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

<PAGE>

[GRAPHIC OMITTED]

PAST PERFORMANCE
- ----------------------------
The bar chart and table below provide some indication of the risks of
investing in the Fund. The Fund's past performance does not indicate
how the Fund will perform in the future.

[sidebar]
ANNUAL TOTAL RETURNS
This chart shows the performance of the Fund's Class B shares over the past
10 calendar years.
[end sidebar]

ANNUAL TOTAL RETURNS -- CALENDAR YEARS

% % % % % % % % % %
---------------------------------------------------------------------------
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998

The bar chart reflects the performance of Class B shares; the performance
of the other Classes will differ because the Classes have different ongoing
fees. The performance information in the bar chart does not reflect the
deduction of sales charges; if these amounts were reflected, returns would
be less than shown. Year-to-date total return as of September 30, 1999 was
%.

During the periods shown in the bar chart, the highest return for a
calendar quarter was % (quarter ended ) and the lowest return for a
calendar quarter was % (quarter ended ).

[sidebar]
AVERAGE ANNUAL TOTAL RETURNS
This table compares the Fund's average annual returns with those of a broad
measure of market performance over time, as well as with indexes of funds with
similar investment objectives. The Fund's returns include the maximum
applicable sales charge for each Class and assume you sold your shares at the
end of each period.
[end sidebar]

AVERAGE ANNUAL TOTAL RETURNS (AS OF DECEMBER 31, 1998)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Class A1 % -- --
- --------------------------------------------------------------------------------
Class B % % %
- --------------------------------------------------------------------------------
Class C1 % -- --
- --------------------------------------------------------------------------------
Class D1 % -- --
- --------------------------------------------------------------------------------
S&P 500 Index2 % % %
- --------------------------------------------------------------------------------
Russell 2000 Index3 % % %
- --------------------------------------------------------------------------------
Lipper Small Cap Fund Index4 % % %
- --------------------------------------------------------------------------------
</TABLE>

1 Classes A, C and D commenced operations on July 28, 1997.

2 The Standard & Poor's (Registered Trademark) 500 Composite Stock Price
Index is a broad-based index, the performance of which is based on the
average performance of 500 widely held common stocks. The performance of
the Index does not include any expenses, fees or charges. The Index is
unmanaged and should not be considered an investment.

3 The Russell 2000 Index is a capitalization weighted index which is
comprised of 2000 of the smallest stocks (on the basis of capitalization)
in the Russell 3000 Index. The Index does not include any expenses, fees or
charges. The Index is unmanaged and should not be considered an investment.

4 The Lipper Small Cap Fund Index is an equally-weighted performance index of
the largest qualifying funds (based on net assets) in the Lipper Small Cap
Funds objective. The Index, which is adjusted for capital gains
distributions and income dividends, is unmanaged and should not be
considered an investment. There are currently 30 funds represented in this
index.

<PAGE>

[GRAPHIC OMITTED]

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

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

[sidebar]
ANNUAL FUND OPERATING EXPENSES ANNUAL FUND OPERATING EXPENSES
These expenses are deducted from the Fund's assets and are based on expenses
paid for the fiscal year ended September 30, 1999.
[end sidebar]

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS D
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHAREHOLDER FEES
- ----------------------------------------------------------------------------------------------------
Maximum sales charge (load) imposed on
purchases (as a percentage of offering price) 5.25% 1 None None None
- ----------------------------------------------------------------------------------------------------
Maximum deferred sales charge (load) (as a
percentage based on the lesser of the offering
price or net asset value at redemption) None 2 5.00% 3 1.00% 4 None
- ----------------------------------------------------------------------------------------------------
Management fee % % % %
- ----------------------------------------------------------------------------------------------------
Distribution and service (12b-1) fees % % % None
- ----------------------------------------------------------------------------------------------------
Other expenses % % % %
- ----------------------------------------------------------------------------------------------------
Total annual Fund operating expenses % % % %
- ----------------------------------------------------------------------------------------------------
</TABLE>

1 Reduced for purchases of $25,000 and over.

2 Investments that are not subject to any sales charge at the time of
purchase are subject to a CDSC of 1.00% that will be imposed if you sell
your shares within one year after purchase, except for certain specific
circumstances.

3 The CDSC is scaled down to 1.00% during the sixth year, reaching zero
thereafter. See "Share Class Arrangements" for a complete discussion of the
CDSC.

4 Only applicable if you sell your shares within one year after purchase.

EXAMPLE

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

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

<TABLE>
<CAPTION>
IF YOU SOLD YOUR SHARES: IF YOU HELD YOUR SHARES:
- --------------------------------------------------- -----------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------- -----------------------------------------
CLASS A $ $ $ $ $ $ $ $
- --------------------------------------------------- -----------------------------------------
CLASS B $ $ $ $ $ $ $ $
- --------------------------------------------------- -----------------------------------------
CLASS C $ $ $ $ $ $ $ $
- --------------------------------------------------- -----------------------------------------
CLASS D $ $ $ $ $ $ $ $
- --------------------------------------------------- -----------------------------------------
</TABLE>

<PAGE>

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

[GRAPHIC OMITTED]

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

Fixed-Income Securities. The Fund may invest up to 35% of its total assets
in fixed-income securities issued or guaranteed by the United States
government, its agencies or instrumentalities, and corporate debt
securities rated Baa or better by Moody's Investors Service or BBB or
better by Standard & Poor's or, if not rated, judged to be of comparable
quality by the Investment Manager.

Foreign Securities. The Fund may invest up to 10% of its total assets in
foreign securities (including depository receipts). This percentage
limitation, however, does not apply to securities of foreign companies that
are listed in the U.S. on a national securities exchange.

Portfolio Turnover. The Fund may engage in active and frequent trading of
portfolio securities to achieve its principal investment strategies. The
portfolio turnover rate is not expected to exceed 250% annually under
normal circumstances. A high turnover rate, such as 250%, will increase
Fund brokerage costs. It also may increase the Fund's capital gains, which
are passed along to Fund shareholders as distributions. This, in turn, may
increase your tax liability as a Fund shareholder. See the sections
"Distributions" and "Tax Consequences."

Defensive Investing. The Fund may take temporary "defensive" positions in
attempting to respond to adverse market conditions. The Fund may invest any
amount of its assets in cash or money market instruments in a defensive
posture when the Investment Manager believes it is advisable to do so.
Although taking a defensive posture is designed to protect the Fund from an
anticipated market downturn, it could have the effect of reducing the
benefit from any upswing in the market. When the Fund takes a defensive
position, it may not achieve its investment objective.

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

<PAGE>

[GRAPHIC OMITTED]

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

Fixed-Income Securities. Principal risks of investing in the Fund are also
associated with its fixed-income securities. All fixed-income securities
are subject to two types of risk: credit risk and interest rate risk.
Credit risk refers to the possibility that the issuer of a security will be
unable to make interest payments and/or repay the principal on its debt.
Interest rate risk refers to fluctuations in the value of a fixed-income
security resulting from changes in the general level of interest rates.
When the general level of interest rates goes up, the prices of most
fixed-income securities go down. When the general level of interest rates
goes down, the prices of most fixed-income securities go up.

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

Foreign securities also have risks related to economic and political
developments abroad, including expropriations, confiscatory taxation,
exchange control regulation, limitations on the use or transfer of Fund
assets and any effects of foreign social, economic or political
instability. Foreign companies, in general, are not subject to the
regulatory requirements of U.S. companies and, as such, there may be less
publicly available information about these companies. Moreover, foreign
accounting, auditing and financial reporting standards generally are
different from those applicable to U.S. companies. Finally, in the event of
a default of any foreign debt obligations, it may be more difficult for the
Fund to obtain or enforce a judgment against the issuers of the securities.

Securities of foreign issuers may be less liquid than comparable securities
of U.S. issuers and, as such, their price changes may be more volatile.
Furthermore, foreign exchanges and broker-dealers are generally subject to
less government and exchange scrutiny and regulation than their U.S.
counterparts.

Many European countries have adopted or are in the process of adopting a
single European currency, referred to as the "euro." The long-term
consequences of the euro conversion for foreign exchange rates, interest
rates and the value of European securities the Fund may purchase are
unclear. The consequences may adversely affect the value and/or increase
the volatility of securities held by the Fund.

<PAGE>

Year 2000. The Fund could be adversely affected if the computer systems
necessary for the efficient operation of the Investment Manager, the Fund's
other service providers and the markets and corporate and governmental
issuers in which the Fund invests do not properly process and calculate
date-related information from and after January 1, 2000. While year
2000-related computer problems could have a negative effect on the Fund,
the Investment Manager and its affiliates are working hard to avoid any
problems and to obtain assurances from their service providers that they
are taking similar steps.

In addition, it is possible that the markets for securities in which the
Fund invests may be detrimentally affected by computer failures throughout
the financial services industry beginning January 1, 2000. Improperly
functioning trading systems may result in settlement problems and liquidity
issues. Corporate and governmental data processing errors also may result
in production problems for individual companies and overall economic
uncertainties. Earnings of individual issuers will be affected by
remediation costs, which may be substantial and may be reported
inconsistently in U.S. and foreign financial statements. Accordingly, the
Fund's investments may be adversely affected.

[GRAPHIC OMITTED]

FUND MANAGEMENT
- ----------------------------

[sidebar]
MORGAN STANLEY DEAN WITTER ADVISORS INC.
The Investment Manager is widely recognized as a leader in the mutual fund
industry and together with Morgan Stanley Dean Witter Services Company Inc.,
its wholly-owned subsidiary, has more than $ billion in assets under
management or administration as of October 31, 1999.
[end sidebar]

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

The Fund's portfolio is managed within the Investment Manager's Growth
Group. Armon Bar-Tur, Vice President of the Investment Manager, has been
the Fund's primary portfolio manager since July 12, 1999. Mr. Bar-Tur has
been a portfolio manager with the Investment Manager since October 1996,
prior to which time he was a research analyst with Merrill Lynch Asset
Management.

<PAGE>

The Fund pays the Investment Manager a monthly management fee as full
compensation for the services and facilities furnished to the Fund, and for
Fund expenses assumed by the Investment Manager. The fee is based on the
Fund's average daily net assets. For the fiscal year ended September 30,
1999, the Fund accrued total compensation to the Investment Manager
amounting to % of the Fund's average daily net assets.

<PAGE>

[GRAPHIC OMITTED]

SHAREHOLDER INFORMATION

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

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

The value of the Fund's portfolio securities is based on the securities'
market price when available. When a market price is not readily available,
including circumstances under which the Investment Manager determines that
a security's market price is not accurate, a portfolio security is valued
at its fair value, as determined under procedures established by the Fund's
Board of Trustees. In these cases, the Fund's net asset value will reflect
certain portfolio securities' fair value rather than their market price. In
addition, if the Fund holds securities primarily listed on foreign
exchanges, the value of the Fund's portfolio securities may change on days
when you will not be able to purchase or sell your shares.

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

[GRAPHIC OMITTED]

HOW TO BUY SHARES
- ------------------------------

[sidebar]
CONTACTING A FINANCIAL ADVISOR
If you are new to the Morgan Stanley Dean Witter Family of Funds and would like
to contact a Financial Advisor, call (800) THE-DEAN for the telephone number of
the Morgan Stanley Dean Witter office nearest you. You may also access our
office locator on our Internet site at: www.msdw.com/individual/funds
[end sidebar]

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

Because every investor has different immediate financial needs and
long-term investment goals, the Fund offers investors four Classes of
shares: Classes A, B, C and D. Class D shares are only offered to a limited
group of investors. Each Class of shares offers a distinct structure of
sales charges, distribution and service fees, and other features that are
designed to address a variety of needs. Your Financial Advisor or other
authorized financial representative can

<PAGE>

help you decide which Class may be most appropriate for you. When
purchasing Fund shares, you must specify which Class of shares you wish to
purchase.

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

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

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

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

There is no minimum investment amount if you purchase Fund shares through:
(1) the Investment Manager's mutual fund asset allocation plan, (2) a
program, approved by the Fund's distributor, in which you pay an
asset-based fee for advisory, administrative and/or brokerage services, or
(3) employer-sponsored employee benefit plan accounts.

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

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

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

o Make out a check for the total amount payable to: Morgan Stanley Dean
Witter Developing Growth Securities Trust.

<PAGE>

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

[GRAPHIC OMITTED]

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

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

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

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

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

<PAGE>

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

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

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

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

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

Frequent Exchanges. A pattern of frequent exchanges may result in the Fund
limiting or prohibiting, at its discretion, additional purchases and/or
exchanges. The Fund will notify you in advance of limiting your exchange
privileges.

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

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

<PAGE>

[GRAPHIC OMITTED]

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

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

<PAGE>

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

Payment may be postponed or the right to sell your shares suspended under
unusual circumstances. If you request to sell shares that were recently
purchased by check, payment of the sale proceeds may be delayed for the
minimum time needed to verify that the check has been honored (not more
than fifteen days from the time we receive the check).

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

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

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

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

<PAGE>

[GRAPHIC OMITTED]

DISTRIBUTIONS
- ------------------------

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

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

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

Distributions are reinvested automatically in additional shares of the same
Class and automatically credited to your account, unless you request in
writing that all distributions be paid in cash. If you elect the cash
option, the Fund will mail a check to you no later than seven business days
after the distribution is declared. No interest will accrue on uncashed
checks. If you wish to change how your distributions are paid, your request
should be received by the Fund's transfer agent, Morgan Stanley Dean Witter
Trust FSB, at least five business days prior to the record date of the
distributions.

[GRAPHIC OMITTED]

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

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

o The Fund makes distributions; and

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

Taxes on Distributions. Your distributions are normally subject to federal
and state income tax when they are paid, whether you take them in cash or
reinvest them in

<PAGE>

Fund shares. A distribution also may be subject to local income tax. Any
income dividend distributions and any short-term capital gain distributions
are taxable to you as ordinary income. Any long-term capital gain
distributions are taxable as long-term capital gains, no matter how long
you have owned shares in the Fund.

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

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

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

[GRAPHIC OMITTED]

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

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

<PAGE>

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

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

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

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

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

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

<PAGE>

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

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

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

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

o Tax-exempt organizations.

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

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

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

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

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

<PAGE>

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

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

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

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

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

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

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

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

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

<PAGE>

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

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

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

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

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

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

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

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

o Sales of shares in connection with the Systematic Withdrawal Plan of
up to 12% annually of the value of each Fund from which plan sales are
made. The percentage is determined on the date you establish the
Systematic Withdrawal Plan and based on the next calculated share
price. You may have this CDSC waiver applied in amounts

<PAGE>

up to 1% per month, 3% per quarter, 6% semi-annually or 12% annually.
Shares with no CDSC will be sold first, followed by those with the
lowest CDSC. As such, the waiver benefit will be reduced by the amount
of your shares that are not subject to a CDSC. If you suspend your
participation in the plan, you may later resume plan payments without
requiring a new determination of the account value for the 12% CDSC
waiver.

o Sales of shares that are attributable to reinvested distributions
from, or the proceeds of, certain unit investment trusts sponsored by
Dean Witter Reynolds.

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

Distribution Fee. Class B shares are subject to an annual 12b-1 fee of 1.0%
of the lesser of: (a) the average daily aggregate gross sales of the Fund's
Class B shares since the inception of the Fund (not including reinvestments
of dividends or capital gains distributions), less the average daily
aggregate net asset value of the Fund's Class B shares redeemed since the
Fund's inception upon which a CDSC has been imposed or waived, or (b) the
average daily net assets of Class B.

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

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

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

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

<PAGE>

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

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

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

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

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

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

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

<PAGE>

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

o Certain unit investment trusts sponsored by Dean Witter Reynolds.

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

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

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

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

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

<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand the Fund's
financial performance for the past 5 fiscal years of the Fund. Certain
information reflects financial results for a single Fund share 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 has been audited by , independent
accountants, whose report, along with the Fund's financial statements, is
included in the annual report, which is available upon request.

<TABLE>
<CAPTION>
FOR THE YEAR ENDED SEPTEMBER 30, 1999 1998 1997* 1996 1995
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CLASS B SHARES
- ----------------------------------------------------------------------------------------------

SELECTED PER SHARE DATA:
- ----------------------------------------------------------------------------------------------
Net asset value, beginning of period $ $ $ $ $
- ----------------------------------------------------------------------------------------------

Income (loss) from investment operations:
Net investment loss
Net realized and unrealized gain (loss)
Total income (loss) from investment operations
- ----------------------------------------------------------------------------------------------

Less dividends and distributions:
In excess of net investment income
From net realized gain
------ ------ ------ ------ ------
Total dividends and distributions
- ----------------------------------------------------------------------------------------------
Net asset value, end of period
- ----------------------------------------------------------------------------------------------

TOTAL RETURN
- ----------------------------------------------------------------------------------------------

RATIOS TO AVERATE NET ASSETS:
- ----------------------------------------------------------------------------------------------
Expenses
- ----------------------------------------------------------------------------------------------
Net investment loss
- ----------------------------------------------------------------------------------------------

SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------
Net assets, end of period, in thousands
- ----------------------------------------------------------------------------------------------
Portfolio turnover rate
- ----------------------------------------------------------------------------------------------
</TABLE>

* Prior to July 28, 1997, the Fund issued one class of shares.

<PAGE>

<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 28, 1997*
THROUGH
FOR THE YEAR ENDED SEPTEMBER 30, 1999 1998 SEPTEMBER 30, 1997
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
CLASS A SHARES
- ------------------------------------------------------------------------------------

SELECTED PER SHARE DATA:
- ------------------------------------------------------------------------------------
Net asset value, beginning of period
- ------------------------------------------------------------------------------------

Income (loss) from investment operations:
Net investment loss
Net realized and unrealized gain
------- -------- --------
Total income from investment operations
- ------------------------------------------------------------------------------------

Less distributions from

Net realized gain
------- -------- --------

Net asset value, end of period
- ------------------------------------------------------------------------------------

TOTAL RETURN
- ------------------------------------------------------------------------------------

RATIOS TO AVERAGE NET ASSETS:
- ------------------------------------------------------------------------------------
Expenses
- ------------------------------------------------------------------------------------
Net investment loss
- ------------------------------------------------------------------------------------

SUPPLEMENTAL DATA:
- ------------------------------------------------------------------------------------
Net assets, end of period, in thousands
- ------------------------------------------------------------------------------------
Portfolio turnover rate
- ------------------------------------------------------------------------------------
</TABLE>

* The date shares were first issued.

<PAGE>

CLASS C SHARES
- -----------------------------------------------------------------------------------------

SELECTED PER SHARE DATA:
Net asset value, beginning of period
- -----------------------------------------------------------------------------------------

Income (loss) from Investment operations:

Net investment loss

Net realized and unrealized gain
------- ------- -------
Total income from investment operations
- -----------------------------------------------------------------------------------------

Less distributions from

Net realized gain
------- ------- -------

Net asset value, end of period
- -----------------------------------------------------------------------------------------

TOTAL RETURN
- -----------------------------------------------------------------------------------------

RATIOS TO AVERAGE NET ASSETS
- -----------------------------------------------------------------------------------------
Expenses
- -----------------------------------------------------------------------------------------
Net investment loss
- -----------------------------------------------------------------------------------------

SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------
Net assets, end of period, in thousands
- -----------------------------------------------------------------------------------------
Portfolio turnover rate
- -----------------------------------------------------------------------------------------
</TABLE>

* The date shares were first issued.

<PAGE>

CLASS D SHARES
- --------------------------------------------------------------------------------------------

SELECTED PER SHARE DATA:
- --------------------------------------------------------------------------------------------
Net asset value, beginning of period
- --------------------------------------------------------------------------------------------

Income (loss) from investment operations:

Net investment loss

Net realized and unrealized gain
------- ------- -------
Total income from investment operations
- --------------------------------------------------------------------------------------------

Less distributions from

Net realized gain
------- ------- -------
Net asset value, end of period
- --------------------------------------------------------------------------------------------

TOTAL RETURN
- --------------------------------------------------------------------------------------------

RATIOS TO AVERAGE NET ASSETS:
- --------------------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------------------
Net investment loss
- --------------------------------------------------------------------------------------------

SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------
Net assets, end of period, in thousands
- --------------------------------------------------------------------------------------------
Portfolio turnover rate
- --------------------------------------------------------------------------------------------
</TABLE>

* The date shares were first issued.

<PAGE>

MORGAN STANLEY DEAN WITTER
FAMILY OF FUNDS
The Morgan Stanley Dean Witter Family of Funds offers
investors a wide range of investment choices. Come on
in and meet the family!
- --------------------------------------------------------------------------------

GROWTH FUNDS

<TABLE>
<CAPTION>
<S> <C>
GROWTH FUNDS Information Fund
Aggressive Equity Fund Natural Resource Development Securities
American Opportunities Fund Precious Metals and Minerals Trust
Capital Growth Securities GLOBAL/INTERNATIONAL FUNDS
Developing Growth Securities Competitive Edge Fund - "Best Ideas"
Growth Fund Portfolio
Market Leader Trust European Growth Fund
Mid-Cap Equity Trust Fund of Funds - International Portfolio
Small Cap Growth Fund International Fund
Special Value Fund International SmallCap Fund
THEME FUNDS Japan Fund
Financial Services Trust Latin American Growth Fund
Health Sciences Trust Pacific Growth Fund
- --------------------------------------------------------------------------------
GROWTH & INCOME FUNDS

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

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

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

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

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

<PAGE>

- --------------------------------------------------------------------------------
PROSPECTUS - NOVEMBER 29, 1999
- --------------------------------------------------------------------------------

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

(800) 869-NEWS

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

WWW.MSDW.COM/INDIVIDUAL/FUNDS

Information about the Fund (including the Statement of Additional Information)
can be viewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, DC. Information about the Reference Room's
operations may be obtained by calling the SEC at (800) SEC-0330. Reports and
other information about the Fund are available on the SEC's Internet site
(www.sec.gov), and copies of this information may be obtained, upon payment of
a duplicating fee, by writing to the Public Reference Section of the SEC,
Washington, DC 20549-6009.

TICKER SYMBOLS:

CLASS A: DGRAX
- -------------------------------
CLASS B: DGRBX
- -------------------------------

CLASS C: DGRCX
- -------------------------------
CLASS D: DGRDX
- -------------------------------

(THE FUND'S INVESTMENT COMPANY ACT FILE NO. IS 811-3639)

Morgan Stanley Dean Witter

DEVELOPING GROWTH
SECURITIES TRUS

A MUTUAL FUND THAT SEEKS LONG-TERM CAPITAL GROWTH

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION MORGAN STANLEY DEAN WITTER
DEVELOPING GROWTH
SECURITIES TRUST
NOVEMBER 29, 1999
- --------------------------------------------------------------------------------
This Statement of Additional Information is not a Prospectus. The
Prospectus (dated November 29, 1999) for the Morgan Stanley Dean Witter
Developing Growth Securities Trust may be obtained without charge from the Fund
at its address or telephone number listed below or from Dean Witter Reynolds at
any of its branch offices.

Morgan Stanley Dean Witter
Developing Growth Securities Trust
Two World Trade Center
New York, New York 10048
(800) 869-NEWS

<PAGE>

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

<TABLE>
<S> <C>
I. Fund History .................................................................. 4
II. Description of the Fund and Its Investments and Risks ........................ 4
A. Classification ............................................................ 4
B. Investment Strategies and Risks ........................................... 4
C. Fund Policies/Investment Restrictions ..................................... 7
III. Management of the Fund ...................................................... 9
A. Board of Trustees ......................................................... 9
B. Management Information .................................................... 9
C. Compensation .............................................................. 13
IV. Control Persons and Principal Holders of Securities .......................... 15
V. Investment Management and Other Services ..................................... 15
A. Investment Manager ........................................................ 15
B. Principal Underwriter ..................................................... 16
C. Services Provided by the Investment Manager and Fund Expenses Paid by Third
Parties ................................................................... 16
D. Dealer Reallowances ....................................................... 17
E. Rule 12b-1 Plan ........................................................... 17
F. Other Service Providers ................................................... 21
VI. Brokerage Allocation and Other Practices ..................................... 21
A. Brokerage Transactions .................................................... 21
B. Commissions ............................................................... 22
C. Brokerage Selection ....................................................... 22
D. Directed Brokerage ........................................................ 23
E. Regular Broker-Dealers .................................................... 23
VII. Capital Stock and Other Securities .......................................... 23
VIII. Purchase, Redemption and Pricing of Shares ................................. 24
A. Purchase/Redemption of Shares ............................................. 24
B. Offering Price ............................................................ 25
IX. Taxation of the Fund and Shareholders ........................................ 26
X. Underwriters .................................................................. 27
XI. Calculation of Performance Data .............................................. 28
XII. Financial Statements ........................................................ 29
</TABLE>

2
<PAGE>

GLOSSARY OF SELECTED DEFINED TERMS

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

"Custodian" -- The Bank of New York.

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

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

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

"Fund" -- Morgan Stanley Dean Witter Developing Growth Securities Trust, a
registered open-end investment company.

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

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

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

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

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

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

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

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

3
<PAGE>

I. FUND HISTORY
- --------------------------------------------------------------------------------
The Fund was organized as a Massachusetts business trust, under a
Declaration of Trust, on December 28, 1982, with the name Dean Witter
Developing Growth Securities Trust. On June 22, 1998, the Fund's name was
changed to Morgan Stanley Dean Witter Developing Growth Securities Trust.

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

A. CLASSIFICATION

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

B. INVESTMENT STRATEGIES AND RISKS

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

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

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

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

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

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

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

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

Repurchase Agreements. The Fund may invest in repurchase agreements. When
cash may be available for only a few days, it may be invested by the Fund in
repurchase agreements until such time as it may otherwise be invested or used
for payments of obligations of the Fund. These agreements, which may be viewed
as a type of secured lending by the Fund, typically involve the acquisition by
the Fund of debt securities from a selling financial institution such as a
bank, savings and loan association or broker-dealer. The agreement provides
that the Fund will sell back to the institution, and that the institution will
repurchase, the underlying security serving as collateral at a specified price
and at a fixed

4
<PAGE>

time in the future, usually not more than seven days from the date of purchase.
The collateral will be marked-to-market daily to determine that the value of
the collateral, as specified in the agreement, does not decrease below the
purchase price plus accrued interest. If such decrease occurs, additional
collateral will be requested and, when received, added to the account to
maintain full collateralization. The Fund will accrue interest from the
institution until the time when the repurchase is to occur. Although this date
is deemed by the Fund to be the maturity date of a repurchase agreement, the
maturities of securities subject to repurchase agreements are not subject to
any limits.

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

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

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

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

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

At the time the Fund makes the commitment to purchase or sell securities
on a when-issued, delayed delivery or forward commitment basis, it will record
the transaction and thereafter reflect the value, each day, of such security
purchased, or if a sale, the proceeds to be received, in determining its net
asset value. At the time of delivery of the securities, their value may be more
or less than the purchase or sale price. An increase in the percentage of the
Fund's assets committed to the purchase of securities on a when-issued, delayed
delivery or forward commitment basis may increase the volatility

5
<PAGE>

of its net asset value. The Fund will also establish a segregated account on
the Fund's books in which it will continually maintain cash or cash equivalents
or other liquid portfolio securities equal in value to commitments to purchase
securities on a when-issued, delayed delivery or forward commitment basis.

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

An increase in the percentage of the Fund's assets committed to the
purchase of securities on a "when, as and if issued" basis may increase the
volatility of its net asset value. The Fund may also sell securities on a
"when, as and if issued" basis provided that the issuance of the security will
result automatically from the exchange or conversion of a security owned by the
Fund at the time of sale.

PRIVATE PLACEMENTS. The Fund may invest up to 15% of its net assets in
securities which are subject to restrictions on resale because they have not
been registered under the Securities Act of 1933 (the "Securities Act"), or
which are otherwise not readily marketable. (Securities eligible for resale
pursuant to Rule 144A under the Securities Act, and determined to be liquid
pursuant to the procedures discussed in the following paragraph, are not
subject to the foregoing restriction.) These securities are generally referred
to as private placements or restricted securities. Limitations on the resale of
these securities may have an adverse effect on their marketability, and may
prevent the Fund from disposing of them promptly at reasonable prices. The Fund
may have to bear the expense of registering the securities for resale and the
risk of substantial delays in effecting the registration.

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

WARRANTS. The Fund may acquire warrants. A warrant is, in effect, an
option to purchase equity securities at a specific price, generally valid for a
specific period of time, and has no voting rights, pays no dividends and has no
rights with respect to the corporation issuing it.

INVESTMENT IN REAL ESTATE INVESTMENT TRUSTS. The Fund may invest in real
estate investment trusts, which pool investors' funds for investments primarily
in commercial real estate properties. Investment in real estate investment
trusts may be the most practical available means for the Fund to invest in the
real estate industry (the Fund is prohibited from investing in real estate
directly). As a shareholder in a real estate investment trust, the Fund would
bear its ratable share of the real estate investment trust's expenses,
including its advisory and administration fees. At the same time the Fund would
continue to pay its own investment management fees and other expenses, as a
result of which the Fund and its shareholders in effect will be absorbing
duplicate levels of fees with respect to investments in real estate investment
trusts.

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

6
<PAGE>

A zero coupon security pays no interest to its holder during its life.
Therefore, to the extent the Fund invests in zero coupon securities, it will
not receive current cash available for distribution to shareholders. In
addition, zero coupon securities are subject to substantially greater price
fluctuations during periods of changing prevailing interest rates than are
comparable securities which pay interest on a current basis. Current federal
tax law requires that a holder (such as the Fund) of a zero coupon security
accrue a portion of the discount at which the security was purchased as income
each year even though the Fund receives no interest payments in cash on the
security during the year.

LEVERAGING. The Fund may borrow money from a bank in an amount up to 25%
of the Fund's total assets (including the amount borrowed) less its liabilities
(not including any borrowings but including the fair market value at the time
of computation of any other senior securities then outstanding). The Fund may
borrow to seek to enhance capital appreciation by leveraging its investments
through purchasing securities with borrowed funds. The Fund will maintain asset
coverage with respect to any borrowings in accordance with the Investment
Company Act of 1940 (the "Investment Company Act"). Leveraging Fund investments
has speculative characteristics.

YEAR 2000. The investment management services provided to the Fund by the
Investment Manager and the services provided to shareholders by the Distributor
and the Transfer Agent depend on the smooth functioning of their computer
systems. Many computer software systems in use today cannot recognize the year
2000, but revert to 1900 or some other date, due to the manner in which dates
were encoded and calculated. That failure could have a negative impact on the
handling of securities trades, pricing and account services. The Investment
Manager, the Distributor and the Transfer Agent have been actively working on
necessary changes to their own computer systems to prepare for the year 2000
and expect that their systems will be adapted before that date, but there can
be no assurance that they will be successful, or that interaction with other
non-complying computer systems will not impair their services at that time.

In addition, it is possible that the markets for securities in which the
Fund invests may be detrimentally affected by computer failures throughout the
financial services industry beginning January 1, 2000. Improperly functioning
trading systems may result in settlement problems and liquidity issues.
Corporate and governmental data processing errors also may result in production
problems for individual companies and overall economic uncertainties. Earnings
of individual issuers will be affected by remediation costs, which may be
substantial and may be reported inconsistently in U.S. and foreign financial
statements. Accordingly, the Fund's investments may be adversely affected.

C. FUND POLICIES/INVESTMENT RESTRICTIONS

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

The Fund will:

1. Seek long-term capital growth.

The Fund may not:

1. Invest more than 5% of the value of its total assets in the securities
of any one issuer (other than obligations issued, or guaranteed, by the
United States government, its agencies or instrumentalities).

2. Purchase more than 10% of all outstanding voting securities or any
class of securities of any one issuer.

7
<PAGE>

3. Concentrate its investments in any particular industry, but if deemed
appropriate for attainment of its investment objective, up to 25% of
its total assets (valued at the time of investment) may be invested in
any one industry classification used by the Fund for investment
purposes. This restriction does not apply to obligations issued or
guaranteed by the United States government or its agencies or
instrumentalities.

4. Invest more than 5% of the value of its total assets in securities of
issuers having a record, together with predecessors, of less than three
years of continuous operation. This restriction shall not apply to any
obligation of the United States government, its agencies or
instrumentalities.

5. Borrow money, except from banks for investment purposes or as a
temporary measure for extraordinary or emergency purposes.

6. Invest in securities of any issuer if, to the knowledge of the Fund,
any officer or trustee of the Fund or any officer or director of the
Investment Manager owns more than 1/2 of 1% of the outstanding
securities of such issuer, and such officers, trustees and directors
who own more than 1/2 of 1% own in the aggregate more than 5% of the
outstanding securities of such issuer.

7. Purchase or sell real estate or interests therein, although the Fund
may purchase securities of issuers which engage in real estate
operations and securities which are secured by real estate or interests
therein.

8. Purchase or sell commodities or commodity futures contracts.

9. Purchase oil, gas or other mineral leases, rights or royalty
contracts, or exploration or development programs, except that the Fund
may invest in the securities of companies which operate, invest in, or
sponsor such programs.

10. Write, purchase or sell puts, calls, or combinations thereof.

11. Purchase securities of other investment companies, except in
connection with a merger, consolidation, reorganization or acquisition
of assets.

12. Invest more than 5% of its total assets in warrants, including not
more than 2% of such assets in warrants not listed on either the New
York or American Stock Exchange. However, the acquisition of warrants
attached to other securities is not subject to this restriction.

13. Pledge its assets or assign or otherwise encumber them except to
secure permitted borrowings. To meet the requirements of regulations in
certain states, the Fund, as a matter of operating policy but not as a
fundamental policy, will limit any pledge of its assets to 5% of its
net assets so long as shares of the Fund are being sold in those
states.

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

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

16. Make short sales of securities.

17. Purchase securities on margin, except for such short-term loans as are
necessary for the clearance of portfolio securities.

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

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

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

8
<PAGE>

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

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

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

B. MANAGEMENT INFORMATION

TRUSTEES AND OFFICERS. The Board of the Fund consists of eight (8)
Trustees. These same individuals also serve as directors or trustees for all of
the Morgan Stanley Dean Witter Funds. Six Trustees (75% of the total number)
have no affiliation or business connection with the Investment Manager or any
of its affiliated persons and do not own any stock or other securities issued
by the Investment Manager's parent company, MSDW. These are the
"non-interested" or "independent" Trustees. The other two Trustees (the
"management Trustees") are affiliated with the Investment Manager. All of the
Trustees also serve as Trustees of "Discover Brokerage Index Series," a mutual
fund for which the Investment Manager is the investment advisor.

The Trustees and executive officers of the Fund, their principal business
occupations during the last five years and their affiliations, if any, with the
Investment Manager, and with the 91 Morgan Stanley Dean Witter Funds and
Discover Brokerage Index Series, are shown below.

<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ------------------------------------------- ---------------------------------------------------
<S> <C>
Michael Bozic (58) ........................ Vice Chairman of Kmart Corporation (since
Trustee December, 1998); Director or Trustee of the Morgan
c/o Kmart Corporation Stanley Dean Witter Funds and Discover Brokerage
3100 West Big Beaver Road Index Series; formerly Chairman and Chief
Troy, Michigan Executive Officer of Levitz Furniture Corporation
(November, 1995-November, 1998) and President
and Chief Executive Officer of Hills Department
Stores (May, 1991-July, 1995); formerly variously
Chairman, Chief Executive Officer, President and
Chief Operating Officer (1987-1991) of the Sears
Merchandise Group of Sears, Roebuck and Co.;
Director of Eaglemark Financial Services, Inc. and
Weirton Steel Corporation.

Charles A. Fiumefreddo* (66) .............. Chairman, Director or Trustee and Chief Executive
Chairman of the Board, Officer of the Morgan Stanley Dean Witter Funds
Chief Executive Officer and Trustee and Discover Brokerage Index Series; formerly
Two World Trade Center Chairman, Chief Executive Officer and Director of
New York, New York the Investment Manager, the Distributor and MSDW
Services Company; Executive Vice President and
Director of Dean Witter Reynolds; Chairman and
Director of the Transfer Agent; formerly Director
and/or officer of various MSDW subsidiaries (until
June 1998).
</TABLE>

9
<PAGE>

<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ------------------------------------------- --------------------------------------------------------
<S> <C>
Edwin J. Garn (67) ........................ Director or Trustee of the Morgan Stanley Dean
Trustee Witter Funds and Discover Brokerage Index Series;
c/o Huntsman Corporation formerly United States Senator (R-Utah)
500 Huntsman Way (1974-1992) and Chairman, Senate Banking
Salt Lake City, Utah Committee (1980-1986); formerly Mayor of Salt
Lake City, Utah (1971-1974); formerly Astronaut,
Space Shuttle Discovery (April 12-19, 1985); Vice
Chairman, Huntsman Corporation (chemical
company); Director of Franklin Covey (time
management systems), BMW Bank of North
America, Inc. (industrial loan corporation), United
Space Alliance (joint venture between Lockheed
Martin and the Boeing Company) and Nuskin Asia
Pacific (multilevel marketing); member of the board
of various civic and charitable organizations.

Wayne E. Hedien (65) ...................... Retired; Director or Trustee of the Morgan Stanley
Trustee Dean Witter Funds and Discover Brokerage Index
c/o Mayer, Brown & Platt Series; Director of The PMI Group, Inc. (private
Counsel to the Independent Trustees mortgage insurance); Trustee and Vice Chairman of
1675 Broadway The Field Museum of Natural History; formerly
New York, New York associated with the Allstate Companies (1966-1994),
most recently as Chairman of The Allstate Corporation
(March, 1993-December, 1994) and Chairman and
Chief Executive Officer of its wholly-owned subsidiary,
Allstate Insurance Company (July, 1989-December,
1994); director of various other business and
charitable organizations.

Dr. Manuel H. Johnson (50) ................ Senior Partner, Johnson Smick International, Inc.,
Trustee a consulting firm; Co-Chairman and a founder of
c/o Johnson Smick International, Inc. the Group of Seven Council (G7C), an international
1133 Connecticut Avenue, N.W. economic commission; Chairman of the Audit
Washington, D.C. Committee and Director or Trustee of the Morgan
Stanley Dean Witter Funds and Discover Brokerage
Index Series; Director of Greenwich Capital
Markets, Inc. (broker-dealer) and NVR, Inc. (home
construction); Chairman and Trustee of the
Financial Accounting Foundation (oversight
organization of the Financial Accounting Standards
Board); formerly Vice Chairman of the Board of
Governors of the Federal Reserve System
(1986-1990) and Assistant Secretary of the U.S.
Treasury.

Michael E. Nugent (63) .................... General Partner, Triumph Capital, L.P., a private
Trustee investment partnership; Chairman of the Insurance
c/o Triumph Capital, L.P. Committee and Director or Trustee of the Morgan
237 Park Avenue Stanley Dean Witter Funds and Discover Brokerage
New York, New York Index Series; formerly Vice President, Bankers Trust
Company and BT Capital Corporation (1984-1988);
director of various business organizations.
</TABLE>

10
<PAGE>

<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ------------------------------------------- ------------------------------------------------------
<S> <C>
Philip J. Purcell* (56) ................... Chairman of the Board of Directors and Chief
Trustee Executive Officer of MSDW, Dean Witter Reynolds
1585 Broadway and Novus Credit Services Inc.; Director of the
New York, New York Distributor; Director or Trustee of the Morgan
Stanley Dean Witter Funds and Discover Brokerage
Index Series; Director and/or officer of various
MSDW subsidiaries.

John L. Schroeder (69) .................... Retired; Chairman of the Derivatives Committee
Trustee and Director or Trustee of the Morgan Stanley
c/o Mayer, Brown & Platt Dean Witter Funds and Discover Brokerage Index
Counsel to the Independent Trustees Series; Director of Citizens Utilities Company
1675 Broadway (telecommunications, gas, electric and water
New York, New York utilities company); formerly Executive Vice
President and Chief Investment Officer of the
Home Insurance Company (August, 1991-
September, 1995).

Mitchell M. Merin (46) .................... President and Chief Operating Officer of Asset
President Management of MSDW (since December, 1998);
Two World Trade Center President and Director (since April, 1997) and
New York, New York Chief Executive Officer (since June, 1998) of the
Investment Manager and MSDW Services
Company; Chairman, Chief Executive Officer and
Director of the Distributor (since June, 1998);
Chairman and Chief Executive Officer (since June,
1998) and Director (since January, 1998) of the
Transfer Agent; Director of various MSDW
subsidiaries; President of the Morgan Stanley Dean
Witter Funds and Discover Brokerage Index Series
(since May, 1999); previously Chief Strategic Officer
of the Investment Manager and MSDW Services
Company and Executive Vice President of the
Distributor (April, 1997-June, 1998), Vice President
of the Morgan Stanely Dean Witter Funds and
Discover Brokerage Index Series (May, 1997-April,
1999), and Executive Vice President of Dean
Witter, Discover & Co.
</TABLE>

11
<PAGE>

<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ------------------------------------------- ----------------------------------------------------
<S> <C>
Barry Fink (44) ........................... Senior Vice President (since March, 1997) and
Vice President, Secretary Secretary and General Counsel (since February,
and General Counsel 1997) and Director (since July, 1998) of the
Two World Trade Center Investment Manager and MSDW Services
New York, New York Company; Senior Vice President (since March,
1997) and Assistant Secretary and Assistant
General Counsel (since February, 1997) of the
Distributor; Assistant Secretary of Dean Witter
Reynolds (since August, 1996); Vice President,
Secretary and General Counsel of the Morgan
Stanley Dean Witter Funds (since February, 1997);
Vice President, Secretary and General Counsel of
Discover Brokerage Index Series; previously First
Vice President (June, 1993-February, 1997), Vice
President and Assistant Secretary and Assistant
General Counsel of the Investment Manager and
MSDW Services Company and Assistant Secretary
of the Morgan Stanley Dean Witter Funds.

Armon Bar-Tur (29) ........................ Vice President of the Investment Manager (since
Vice President October, 1996); formerly research analyst with
Two World Trade Center Merrill Lynch Asset Management.
New York, New York

Thomas F. Caloia (53) ..................... First Vice President and Assistant Treasurer of the
Treasurer Investment Manager, the Distributor and MSDW
Two World Trade Center Services Company; Treasurer of the Morgan
New York, New York Stanley Dean Witter Funds and Discover Brokerage
Index Series.
</TABLE>

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

In addition, Ronald E. Robison, Executive Vice President, Chief
Administrative Officer and Director of the Investment Manager and MSDW Services
Company, Robert S. Giambrone, Senior Vice President of the Investment Manager,
MSDW Services Company, the Distributor and the Transfer Agent and Director of
the Transfer Agent, and Joseph J. McAlinden, Executive Vice President and Chief
Investment Officer of the Investment Manager and Director of the Transfer
Agent, and Ira N. Ross and Paul D. Vance, Senior Vice Presidents of the
Investment Manager, are Vice Presidents of the Fund.

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

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

12
<PAGE>

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

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

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

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

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

C. COMPENSATION

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

13
<PAGE>

The following table illustrates the compensation that the Fund paid to its
Independent Trustees for the fiscal year ended September 30, 1999.

FUND COMPENSATION

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

The following table illustrates the compensation paid to the Fund's
Independent Trustees for the calendar year ended December 31, 1998 for services
to the 90 Morgan Stanley Dean Witter Funds that were in operation at December
31, 1998. No compensation was paid to the Fund's Independent Trustees by
Discover Brokerage Index Series for the calendar year ended December 31, 1998.

CASH COMPENSATION FROM MORGAN STANLEY DEAN WITTER FUNDS

<TABLE>
<CAPTION>
TOTAL CASH
COMPENSATION
FOR SERVICES TO 90
MORGAN STANLEY
DEAN WITTER
NAME OF INDEPENDENT TRUSTEE FUNDS
- ------------------------------- -------------------
<S> <C>
Michael Bozic ................. $120,150
Edwin J. Garn ................. 132,450
Wayne E. Hedien ............... 132,350
Dr. Manuel H. Johnson ......... 155,681
Michael E. Nugent ............. 159,731
John L. Schroeder ............. 160,731
</TABLE>

As of the date of this Statement of Additional Information, 55 of the
Morgan Stanley Dean Witter Funds, including the Fund, have adopted a retirement
program under which an independent director/ trustee who retires after serving
for at least five years (or such lesser period as may be determined by the
Board) as an independent director/trustee of any Morgan Stanley Dean Witter
Fund that has adopted the retirement program (each such Fund referred to as an
"Adopting Fund" and each such director/ trustee referred to as an "Eligible
Trustee") is entitled to retirement payments upon reaching the eligible
retirement age (normally, after attaining age 72). Annual payments are based
upon length of service.

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

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

14
<PAGE>

The following table illustrates the retirement benefits accrued to the
Fund's Independent Trustees by the Fund for the fiscal year ended September 30,
1999 and by the 55 Morgan Stanley Dean Witter Funds (including the Fund) for
the year ended December 31, 1998, and the estimated retirement benefits for the
Independent Trustees, to commence upon their retirement, from the Fund as of
September 30, 1999 and from the 55 Morgan Stanley Dean Witter Funds as of
December 31, 1998.

RETIREMENT BENEFITS FROM ALL MORGAN STANLEY DEAN WITTER FUNDS

<TABLE>
<CAPTION>
ESTIMATED
FOR ALL ADOPTING FUNDS RETIREMENT ANNUAL
-------------------------------- BENEFITS BENEFITS
ESTIMATED ACCRUED AS UPON
CREDITED EXPENSES RETIREMENT(2)
YEARS ESTIMATED --------------------- -------------------------
OF SERVICE AT PERCENTAGE OF BY ALL FROM ALL
RETIREMENT ELIGIBLE BY THE ADOPTING FROM ADOPTING
NAME OF INDEPENDENT TRUSTEE (MAXIMUM 10) COMPENSATION FUND FUNDS THE FUND FUNDS
- ------------------------------- --------------- -------------- -------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Michael Bozic ................. 10 60.44% $ $22,377 $ $52,250
Edwin J. Garn ................. 10 60.44 35,225 52,250
Wayne E. Hedien ............... 9 51.37 41,979 44,413
Dr. Manuel H. Johnson ......... 10 60.44 14,047 52,250
Michael E. Nugent ............. 10 60.44 25,336 52,250
John L. Schroeder ............. 8 50.37 45,117 44,343
</TABLE>

- ----------
(2) Based on current levels of compensation. Amount of annual benefits also
varies depending on the Trustee's elections described in Footnote (1) on
page 14.

IV. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
- --------------------------------------------------------------------------------
The following owned 5% or more [to come].

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

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

A. INVESTMENT MANAGER

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

Pursuant to an Investment Management Agreement (the "Management
Agreement") with the Investment Manager, the Fund has retained the Investment
Manager to provide administrative services and manage the investment of the
Fund's assets, including the placing of orders for the purchase and sale of
portfolio securities. The Fund pays the Investment Manager monthly compensation
calculated daily by applying the following annual rates to the net assets of
the Fund determined as of the close of each business day: 0.50% to the portion
of the Fund's average daily net assets not exceeding $500 million and 0.475% of
the portion of the Fund's average daily net assets exceeding $500 million. The
management fee is allocated among the Classes pro rata based on the net assets
of the Fund attributable to each Class. For the fiscal years ended September
30, 1997, 1998 and 1999, the Fund accrued total compensation to the Investment
Manager under the Management Agreement in the amount of $3,729,759, $3,924,618
and $ , respectively.

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

15
<PAGE>

B. PRINCIPAL UNDERWRITER

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

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

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

C. SERVICES PROVIDED BY THE INVESTMENT MANAGER AND FUND EXPENSES PAID BY THIRD
PARTIES

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

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

Expenses not expressly assumed by the Investment Manager under the
Management Agreement or by the Distributor, will be paid by the Fund. These
expenses will be allocated among the four Classes of shares pro rata based on
the net assets of the Fund attributable to each Class, except as described
below. Such expenses include, but are not limited to: expenses of the Plan of
Distribution pursuant to Rule 12b-1; charges and expenses of any registrar,
custodian, stock transfer and dividend disbursing agent; brokerage commissions;
taxes; engraving and printing share certificates; registration costs of the
Fund and its shares under federal and state securities laws; the cost and
expense of printing, including typesetting, and distributing prospectuses of
the Fund and supplements thereto to the Fund's shareholders; all expenses of
shareholders' and Trustees' meetings and of preparing, printing and mailing of
proxy statements and reports to shareholders; fees and travel expenses of
Trustees or members of any advisory board or committee who are not employees of
the Investment Manager or any corporate affiliate of the Investment Manager;
all expenses incident to any dividend, withdrawal or

16
<PAGE>

redemption options; charges and expenses of any outside service used for
pricing of the Fund's shares; fees and expenses of legal counsel, including
counsel to the Trustees who are not interested persons of the Fund or of the
Investment Manager (not including compensation or expenses of attorneys who are
employees of the Investment Manager); fees and expenses of the Fund's
independent accountants; membership dues of industry associations; interest on
Fund borrowings; postage; insurance premiums on property or personnel
(including officers and Trustees) of the Fund which inure to its benefit;
extraordinary expenses (including, but not limited to, legal claims and
liabilities and litigation costs and any indemnification relating thereto); and
all other costs of the Fund's operation. The 12b-1 fees relating to a
particular Class will be allocated directly to that Class. In addition, other
expenses associated with a particular Class (except advisory or custodial fees)
may be allocated directly to that Class, provided that such expenses are
reasonably identified as specifically attributable to that Class and the direct
allocation to that Class is approved by the Trustees.

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

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

D. DEALER REALLOWANCES

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

E. RULE 12B-1 PLAN

The Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 under
the Investment Company Act (the "Plan") pursuant to which each Class, other
than Class D, pays the Distributor compensation accrued daily and payable
monthly at the following annual rates: 0.25% and 1.0% of the average daily net
assets of Class A and Class C, respectively, and, with respect to Class B, 1.0%
of the lesser of: (a) the average daily aggregate gross sales of the Fund's
Class B shares since the inception of the Fund (not including reinvestments of
dividends or capital gains distributions), less the average daily aggregate net
asset value of the Fund's Class B shares redeemed since the Fund's inception
upon which a contingent deferred sales charge has been imposed or upon which
such charge has been waived, or (b) the average daily net assets of Class B.

The Distributor also receives the proceeds of front-end sales charges
("FSCs") and of contingent deferred sales charges ("CDSCs") imposed on certain
redemptions of shares, which are separate and apart from payments made pursuant
to the Plan. The Distributor has informed the Fund that it and/or Dean Witter
Reynolds received the proceeds of CDSCs and FSCs, for the last three fiscal
years ended September 30, in approximate amounts as provided in the table below
(the Distributor did not retain any of these amounts).

<TABLE>
<CAPTION>
1999 1998 1997
-------------------- ------------------------ ----------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A .......... FSCs:(1) $ FSCs: $ 56,000 FSCs: $ 4,800(2)
CDSCs: $ CDSCs: $ 40 CDSCs: $ 0(2)
Class B .......... CDSCs: $ CDSCs: $1,202,000 CDSCs: $1,278,000
Class C .......... CDSCs: $ CDSCs: $ 2,700 CDSCs: $ 0 (2)
</TABLE>

- ----------
(1) FSCs apply to Class A only.
(2) This Class commenced operations on July 28, 1997.

17
<PAGE>

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

Under the Plan and as required by Rule 12b-1, the Trustees receive and
review promptly after the end of each calendar quarter a written report
provided by the Distributor of the amounts expended under the Plan and the
purpose for which such expenditures were made. For the fiscal year ended
September 30, 1999, Class B shares of the Fund accrued amounts payable to the
Distributor under the Plan of $ . This amount is equal to 1.00% of the
average daily net assets of Class B and was calculated pursuant to clause ( )
of the compensation formula under the Plan. For the fiscal year ended September
30, 1999, Class A and Class C shares of the Fund accrued payments under the
Plan amounting to $ and $ , respectively, which amounts are equal to
0.25% and 1.00% of the average daily net assets of Class A and Class C,
respectively, for the fiscal year.

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

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

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

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

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

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<PAGE>

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

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

The Fund is authorized to reimburse expenses incurred or to be incurred in
promoting the distribution of the Fund's Class A and Class C shares and in
servicing shareholder accounts. Reimbursement will be made through payments at
the end of each month. The amount of each monthly payment may in no event
exceed an amount equal to a payment at the annual rate of 0.25%, in the case of
Class A, and 1.0%, in the case of Class C, of the average net assets of the
respective Class during the month. No interest or other financing charges, if
any, incurred on any distribution expenses on behalf of Class A and Class C
will be reimbursable under the Plan. With respect to Class A, in the case of
all expenses other than expenses representing the service fee, and, with
respect to Class C, in the case of all expenses other than expenses
representing a gross sales credit or a residual to Financial Advisors and other
authorized financial representatives, such amounts shall be determined at the
beginning of each calendar quarter by the Trustees, including, a majority of
the Independent Trustees. Expenses representing the service fee (for Class A)
or a gross sales credit or a residual to Financial Advisors and other
authorized financial representatives (for Class C) may be reimbursed without
prior determination. In the event that the Distributor proposes that monies
shall be reimbursed for other than such expenses, then in making quarterly
determinations of the amounts that may be reimbursed by the Fund, the
Distributor will provide and the Trustees will review a quarterly budget of
projected distribution expenses to be incurred on behalf of the Fund, together
with a report explaining the purposes and anticipated benefits of incurring
such expenses. The Trustees will determine which particular expenses, and the
portions thereof, that may be borne by the Fund, and in making such a
determination shall consider the scope of the Distributor's commitment to
promoting the distribution of the Fund's Class A and Class C shares.

Each Class paid 100% of the amounts accrued under the Plan with respect to
that Class for the fiscal year ended September 30, 1999 to the Distributor. The
Distributor and Dean Witter Reynolds estimate that they have spent, pursuant to
the Plan, $ on behalf of Class B since the inception of the Plan. It is
estimated that this amount was spent in approximately the following ways: (i)
% ($ ) -- advertising and promotional expenses; (ii) % ($ ) --
printing of prospectuses for distribution to other than current shareholders;
and (iii) % ($ ) -- other expenses, including the gross sales credit and
the carrying charge, of which % ($ ) represents carrying charges, %
($ ) represents commission credits to Dean Witter Reynolds branch offices
and other selected broker-dealers for payments of commissions to Financial
Advisors and other authorized financial representatives, and % ($ )
represents overhead and other branch office distribution-related expenses. The
amounts accrued by Class A and a portion of the amounts accrued by Class C
under the Plan during the fiscal year ended September 30, 1999 were service
fees. The remainder of the amounts accrued by Class C were for expenses which
relate to compensation of sales personnel and associated overhead expenses.

19
<PAGE>

In the case of Class B shares, at any given time, the expenses of
distributing shares of the Fund may be more or less than the total of (i) the
payments made by the Fund pursuant to the Plan; and (ii) the proceeds of CDSCs
paid by investors upon redemption of shares. For example, if $1 million in
expenses in distributing Class B shares of the Fund had been incurred and
$750,000 had been received as described in (i) and (ii) above, the excess
expense would amount to $250,000. The Distributor has advised the Fund that in
the case of Class B shares the excess distribution expenses, including the
carrying charge designed to approximate the opportunity costs incurred by Dean
Witter Reynolds which arise from it having advanced monies without having
received the amount of any sales charges imposed at the time of sale of the
Fund's Class B shares, totaled $ as of September 30, 1999 (the end of the
Fund's fiscal year), which was equal to % of the net assets of Class B on
such date. Because there is no requirement under the Plan that the Distributor
be reimbursed for all distribution expenses with respect to Class B shares or
any requirement that the Plan be continued from year to year, this excess
amount does not constitute a liability of the Fund. Although there is no legal
obligation for the Fund to pay expenses incurred in excess of payments made to
the Distributor under the Plan and the proceeds of CDSCs paid by investors upon
redemption of shares, if for any reason the Plan is terminated, the Trustees
will consider at that time the manner in which to treat such expenses. Any
cumulative expenses incurred, but not yet recovered through distribution fees
or CDSCs, may or may not be recovered through future distribution fees or
CDSCs.

In the case of Class A and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 1.0% of the average daily
net assets of Class A or Class C, respectively, will not be reimbursed by the
Fund through payments in any subsequent year, except that expenses representing
a gross sales commission credited to Morgan Stanley Dean Witter Financial
Advisors and other authorized financial representatives at the time of sale may
be reimbursed in the subsequent calendar year. The Distributor has advised the
Fund that there were no such expenses that may be reimbursed in the subsequent
year in the case of Class A or Class C on December 31, 1998 (end of the
calendar year). No interest or other financing charges will be incurred on any
Class A or Class C distribution expenses incurred by the Distributor under the
Plan or on any unreimbursed expenses due to the Distributor pursuant to the
Plan.

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

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

20
<PAGE>

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

F. OTHER SERVICE PROVIDERS

(1) TRANSFER AGENT/DIVIDEND-PAYING AGENT

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

(2) CUSTODIAN AND INDEPENDENT ACCOUNTANTS

The Bank of New York, 90 Washington Street, New York, New York 10286 is
the Custodian of the Fund's assets. Any of the Fund's cash balances with the
Custodian in excess of $100,000 are unprotected by federal deposit insurance.
These balances may, at times, be substantial.

, serves as the independent
accountants of the Fund. The independent accountants are responsible for
auditing the annual financial statements of the Fund.

(3) AFFILIATED PERSONS

The Transfer Agent is an affiliate of the Investment Manager, and of the
Distributor. As Transfer Agent and Dividend Disbursing Agent, the Transfer
Agent's responsibilities include maintaining shareholder accounts, disbursing
cash dividends and reinvesting dividends, processing account registration
changes, handling purchase and redemption transactions, mailing prospectuses
and reports, mailing and tabulating proxies, processing share certificate
transactions, and maintaining shareholder records and lists. For these
services, the Transfer Agent receives a per shareholder account fee from the
Fund and is reimbursed for its out-of-pocket expenses in connection with such
services.

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

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

For the fiscal years ended September, 1997, 1998 and 1999, the Fund paid a
total of $1,739,634, $2,210,633 and $ , respectively, in brokerage
commissions.

21
<PAGE>

B. COMMISSIONS

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

During the fiscal years ended September, 1997, 1998 and 1999, the Fund did
not effect any principal transactions with Dean Witter Reynolds.

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

During the fiscal years ended September 30, 1997, 1998 and 1999, the Fund
paid a total of $39,264, $100,032 and $ , respectively, in brokerage
commissions to Dean Witter Reynolds. During the fiscal year ended September 30,
1999, the brokerage commissions paid to Dean Witter Reynolds represented
approximately % of the total brokerage commissions paid by the Fund during
the year and were paid on account of transactions having an aggregate dollar
value equal to approximately % of the aggregate dollar value of all
portfolio transactions of the Fund during the year for which commissions were
paid.

During the period June 1, 1997 through September 30, 1997 and during the
fiscal years ended September 30, 1998 and 1999, the Fund paid a total of
$23,533, $125,345 and $ , respectively, in brokerage commissions to Morgan
Stanley & Co., which broker-dealer became an affiliate of the Investment
Manager on May 31, 1997 upon consummation of the merger of Dean Witter,
Discover & Co. with Morgan Stanley Group Inc. During the fiscal year ended
September 30, 1999, the brokerage commissions paid to Morgan Stanley & Co.
represented approximately % of the total brokerage commissions paid by the
Fund for this period and were paid on account of transactions having an
aggregate dollar value equal to approximately % of the aggregate dollar value
of all portfolio transactions of the Fund during the year for which commissions
were paid.

C. BROKERAGE SELECTION

The policy of the Fund regarding purchases and sales of securities for its
portfolio is that primary consideration will be given to obtaining the most
favorable prices and efficient executions of transactions. Consistent with this
policy, when securities transactions are effected on a stock exchange, the
Fund's policy is to pay commissions which are considered fair and reasonable
without necessarily determining that the lowest possible commissions are paid
in all circumstances. The Fund believes that a requirement always to seek the
lowest possible commission cost could impede effective portfolio management and
preclude the Fund and the Investment Manager from obtaining a high quality of
brokerage and research services. In seeking to determine the reasonableness of
brokerage commissions paid in any transaction, the Investment Manager relies
upon its experience and knowledge

22
<PAGE>

regarding commissions generally charged by various brokers and on its judgment
in evaluating the brokerage and research services received from the broker
effecting the transaction. These determinations are necessarily subjective and
imprecise, as in most cases an exact dollar value for those services is not
ascertainable.

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

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

D. DIRECTED BROKERAGE

During the fiscal year ended September 30, 1999, the Fund paid $ in
brokerage commissions in connection with transactions in the aggregate amount
of $ to brokers because of research services provided.

E. REGULAR BROKER-DEALERS

During the fiscal year ended September 30, 1999, the Fund did not purchase
securities issued by brokers or dealers that were among the ten brokers or ten
dealers which executed transactions for or with the Fund in the largest dollar
amounts during the period. At September 30, 1999, the Fund did not own any
securities issued by any such issuers.

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

23
<PAGE>

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

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

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

All of the Trustees have been elected by the shareholders of the Fund,
most recently at a Special Meeting of Shareholders held on May 21, 1997. The
Trustees themselves have the power to alter the number and the terms of office
of the Trustees (as provided for in the Declaration of Trust), and they may at
any time lengthen or shorten their own terms or make their terms of unlimited
duration and appoint their own successors, provided that always at least a
majority of the Trustees has been elected by the shareholders of the Fund.

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

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

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

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

TRANSFERS OF SHARES. In the event a shareholder requests a transfer of
Fund shares to a new registration, the shares will be transferred without sales
charge at the time of transfer. With regard to the status of shares which are
either subject to the CDSC or free of such charge (and with regard to the

24
<PAGE>

length of time shares subject to the charge have been held), any transfer
involving less than all of the shares in an account will be made on a pro rata
basis (that is, by transferring shares in the same proportion that the
transferred shares bear to the total shares in the account immediately prior to
the transfer). The transferred shares will continue to be subject to any
applicable CDSC as if they had not been so transferred.

B. OFFERING PRICE

The Fund's Class B, Class C and Class D shares are offered at net asset
value per share and the Class A shares are offered at net asset value per share
plus any applicable FSC which is distributed among the Fund's Distributor, Dean
Witter Reynolds and other authorized dealers as described in Section "V.
Investment Management and Other Services -- E. Rule 12b-1 Plan." The price of
Fund shares, called "net asset value," is based on the value of the Fund's
portfolio securities. Net asset value per share of each Class is calculated by
dividing the value of the portion of the Fund's securities and other assets
attributable to that Class, less the liabilities attributable to that Class, by
the number of shares of that Class outstanding. The assets of each Class of
shares are invested in a single portfolio. The net asset value of each Class,
however, will differ because the Classes have different ongoing fees.

In the calculation of the Fund's net asset value: (1) an equity portfolio
security listed or traded on the New York or American Stock Exchange or other
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); and (2) all
other portfolio securities for which over-the-counter market quotations are
readily available are valued at the latest bid price. When market quotations
are not readily available, including circumstances under which it is determined
by the Investment Manager that sale or bid prices are not reflective of a
security's market value, portfolio securities are valued at their fair value as
determined in good faith under procedures established by and under the general
supervision of the Fund's Trustees. For valuation purposes, quotations of
foreign portfolio securities, other assets and liabilities and forward
contracts stated in foreign currency are translated into U.S. dollar
equivalents at the prevailing market rates prior to the close of the New York
Stock Exchange.

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

Certain of the Fund's portfolio securities may be valued by an outside
pricing service approved by the Fund's Trustees. The pricing service may
utilize a matrix system incorporating security quality, maturity and coupon as
the evaluation model parameters, and/or research evaluations by its staff,
including review of broker-dealer market price quotations in determining what
it believes is the fair valuation of the portfolio securities valued by such
pricing service.

Generally, trading in foreign securities, as well as corporate bonds, U.S.
Government securities and money market instruments is substantially completed
each day at various times prior to the close of the New York Stock Exchange.
The values of such securities used in computing the net asset value of the
Fund's shares are determined as of such times. Foreign currency exchange rates
are also generally determined prior to the close of the New York Stock
Exchange. Occasionally events which may affect the values of such securities
and such exchange rates may occur between the times at which they are
determined and the close of the New York Stock Exchange and will therefore not
be reflected in the computation of the Fund's net asset value. If events that
may affect the value of such securities occur during such period, then these
securities may be valued at their fair value as determined in good faith under
procedures established by and under the supervision of the Trustees.

25
<PAGE>

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

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

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

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

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

Under certain tax rules, the Fund may be required to accrue a portion of
any discount at which certain securities are purchased as income each year even
though the Fund receives no payments in cash on the security during the year.
To the extent that the Fund invests in such securities, it would be required to
pay out such accrued discount as an income distribution in each year in order
to avoid taxation at the Fund level. Such distributions will be made from the
available cash of the Fund or by liquidation of portfolio securities if
necessary. If a distribution of cash necessitates the liquidation of portfolio
securities, the Investment Manager will select which securities to sell. The
Fund may realize a gain or loss from such sales. In the event the Fund realizes
net capital gains from such transactions, its shareholders may receive a larger
capital gain distribution, if any, than they would in the absence of such
transactions.

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

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

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

26
<PAGE>

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

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

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

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

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

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

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

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

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

27
<PAGE>

XI. CALCULATION OF PERFORMANCE DATA
- --------------------------------------------------------------------------------
From time to time, the Fund may quote its "total return" in advertisements
and sales literature. These figures are computed separately for Class A, Class
B, Class C and Class D shares. The Fund's "average annual total return"
represents an annualization of the Fund's total return over a particular period
and is computed by finding the annual percentage rate which will result in the
ending redeemable value of a hypothetical $1,000 investment made at the
beginning of a one, five or ten year period, or for the period from the date of
commencement of operations, if shorter than any of the foregoing. The ending
redeemable value is reduced by any contingent deferred sales charge ("CDSC") at
the end of the one, five, ten year or other period. For the purpose of this
calculation, it is assumed that all dividends and distributions are reinvested.
The formula for computing the average annual total return involves a percentage
obtained by dividing the ending redeemable value by the amount of the initial
investment (which in the case of Class A shares is reduced by the Class A
initial sales charge), taking a root of the quotient (where the root is
equivalent to the number of years in the period) and subtracting 1 from the
result. Based on this calculation, the average annual total returns for Class B
for the one year, five year and ten year periods ended September 30, 1999 were
%, % and %, respectively. The average annual total returns of Class A
for the fiscal year ended September 30, 1999 and for the period July 28, 1997
(inception of the Class) through September 30, 1999 were % and %,
respectively. The average annual total returns of Class C for the fiscal year
ended September 30, 1999 and for the period July 28, 1997 (inception of the
Class) through September 30, 1999 were % and %, respectively. The average
annual total returns of Class D for the fiscal year ended September 30, 1999
and for the period July 28, 1997 (inception of the Class) through September 30,
1999 were % and %, respectively.

In addition, the Fund may advertise its total return for each Class over
different periods of time by means of aggregate, average, year-by-year or other
types of total return figures. These calculations may or may not reflect the
imposition of the maximum front-end sales charge for Class A or the deduction
of the CDSC for each of Class B and Class C which, if reflected, would reduce
the performance quoted. For example, the average annual total return of the
Fund may be calculated in the manner described above, but without deduction for
any applicable sales charge. Based on this calculation, the average annual
total returns of Class B for the one year, five year and ten year periods ended
September 30, 1999 were %, % and %, respectively. The average annual
total returns of Class A for the fiscal year ended September 30, 1999 and for
the period July 28, 1997 (inception of the Class) through September 30, 1999
were % and %, respectively. The average annual total returns of Class C
for the fiscal year ended September 30, 1999 and for the period July 28, 1997
(inception of the Class) through September 30, 1999 were % and %,
respectively. The average annual total returns of Class D for the fiscal year
ended September 30, 1999 and for the period July 28, 1997 (inception of the
Class) through September 30, 1999 were % and %, respectively.

In addition, the Fund may compute its aggregate total return for each
Class for specified periods by determining the aggregate percentage rate which
will result in the ending value of a hypothetical $1,000 investment made at the
beginning of the period. For the purpose of this calculation, it is assumed
that all dividends and distributions are reinvested. The formula for computing
aggregate total return involves a percentage obtained by dividing the ending
value (without reduction for any sales charge) by the initial $1,000 investment
and subtracting 1 from the result. Based on this calculation, the total returns
of Class B for the one year, five year and ten year periods ended September 30,
1999 were %, % and %, respectively. The total returns of Class A for
the fiscal year ended September 30, 1999 and for the period July 28, 1997
(inception of the Class) through September 30, 1999 were % and %,
respectively. The total returns of Class C for the fiscal year ended September
30, 1999 and for the period July 28, 1997 (inception of the Class) through
September 30, 1999 were % and %, respectively. The total returns of
Class D for the fiscal year ended September 30, 1999 and for the period July
28, 1997 (inception of the Class) through September 30, 1999 were % and
%, respectively.

28
<PAGE>

The Fund may also advertise the growth of hypothetical investments of
$10,000, $50,000 and $100,000 in each Class of shares of the Fund by adding 1
to the Fund's aggregate total return to date (expressed as a decimal and
without taking into account the effect of any applicable CDSC) and multiplying
by $9,475, $48,000 and $97,000 in the case of Class A (investments of $10,000,
$50,000 and $100,000 adjusted for the initial sales charge) or by $10,000,
$50,000 and $100,000 in the case of each of Class B, Class C and Class D, as
the case may be. Investments of $10,000, $50,000 and $100,000 in each Class at
inception of the Class would have grown to the following amounts at September
30, 1999:

<TABLE>
<CAPTION>
INVESTMENT AT INCEPTION OF:
INCEPTION ---------------------------------
CLASS DATE: $10,000 $50,000 $100,000
- ----------------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C>
Class A ......... 07/28/97 $ $ $
Class B ......... 04/29/83
Class C ......... 07/28/97
Class D ......... 07/28/97
</TABLE>

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

XII. FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
EXPERTS. The financial statements of the Fund for the fiscal year ended
September 30, 1999 included herein in reliance on the report of ,
independent accountants, and on the authority of that firm as experts in
auditing and accounting.

* * * * *

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

<PAGE>
MORGAN STANLEY DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
PART C OTHER INFORMATION

Item 23. Exhibits
- -------- -----------------------------------------------------------------
1 (a). Declaration of Trust of the Registrant, dated December 28, 1982,
is incorporated by reference to Exhibit 1(a) of Post-Effective
Amendment No. 13 to the Registration Statement on Form N-1A,
filed on November 22, 1995.

1 (b). Amendment, dated January 11, 1983, to the Declaration of Trust of
the Registrant is incorporated by reference to Exhibit 1(b) of
Post-Effective Amendment No. 13 to the Registration Statement on
Form N-1A, filed on November 22, 1995.

1 (c). Amendment, dated May 18, 1984, to the Declaration of Trust of the
Registrant is incorporated by reference to Exhibit 1(c) of
Post-Effective Amendment No. 13 to the Registration Statement on
Form N-1A, filed on November 22, 1995.

1 (d). Amendment, dated July 18, 1984, to the Declaration of Trust of
the Registrant is incorporated by reference to Exhibit 1(d) of
Post-Effective Amendment No. 13 to the Registration Statement on
Form N-1A, filed on November 22, 1995.

1 (e). Instrument Establishing and Designating Additional Classes of
Shares, dated July 28, 1997, is incorporated by reference to
Exhibit 1 of Post-Effective Amendment No. 15 to the Registration
Statement on Form N-1A, filed on July 10, 1997.

1 (f). Amendment, dated June 22, 1998, to the Declaration of Trust of
the Registrant is incorporated by reference to Exhibit 1 of
Post-Effective Amendment No. 17 to the Registration Statement on
Form N-1A, filed on November 24, 1998.

2. Amended and Restated By-Laws of the Registrant dated May 1, 1999,
filed herein.

3. Not applicable.

4. Amended Investment Management Agreement between the Registrant
and Morgan Stanley Dean Witter Advisors Inc., dated April 30,
1998, is incorporated by reference to Exhibit 5 of Post-Effective
Amendment No. 17 to the Registration Statement on Form N-1A,
filed on November 24, 1998.
<PAGE>

5(a). Amended Distribution Agreement between the Registrant and Morgan
Stanley Dean Witter Distributors Inc., dated June 22, 1998, is
incorporated by reference to Exhibit 6(a) of Post-Effective
Amendment No. 17 to the Registration Statement on Form N-1A,
filed on November 24, 1998.

5(b). Selected Dealer Agreement between Morgan Stanley Dean Witter
Distributors Inc. and Dean Witter Reynolds Inc., dated January 4,
1993, is incorporated by reference to Exhibit 6 of Post-Effective
Amendment No. 12 to the Registration Statement on Form N-1A,
filed on November 21, 1994.

5(c). Omnibus Selected Dealer Agreement between Morgan Stanley Dean
Witter Distributors Inc. and National Financial Services
Corporation, dated October 17, 1998, is incorporated by reference
to Exhibit 6 (b) of Post-Effective Amendment No. 17 to the
Registration Statement on Form N-1A, filed on November 24, 1998.

6. Amended and Restated Retirement Plan for Non-Interested Trustees
or Directors, dated May 8, 1997, is filed herein.

7(a). Custodian Agreement between The Bank of New York and the
Registrant, dated September 20, 1991, is incorporated by
reference to Exhibit 8 of Post-Effective Amendment No. 13 to the
Registration Statement on Form N-1A, filed on November 22, 1995.

7(b). Amendment to the Custody Agreement, dated April 17, 1996, is
incorporated by reference to Exhibit 8 of Post-Effective
Amendment No. 14 to the Registration Statement on Form N-1A,filed
on November 21, 1996.

8(a). Amended and Restated Transfer Agency Agreement between the
Registrant and Morgan Stanley Dean Witter Trust FSB, dated June
22, 1998, is incorporated by reference to Exhibit 8 of
Post-Effective Amendment No. 17 to the Registration Statement on
Form N-1A, filed on November 24, 1998.

8(b). Amended Services Agreement between Morgan Stanley Dean
Witter Advisors Inc. and Morgan Stanley Dean Witter Services
Company Inc., dated June 22, 1998, is incorporated by reference
to Exhibit 9 of Post-Effective Amendment No. 17 to the
Registration Statement on Form N-1A, filed on November 24, 1998.

9(a). Opinion of Sheldon Curtis, Esq., dated March 3, 1983, filed
herein.

9(b). Opinion of Gaston Snow & Ely Bartlett, Massachusetts
Counsel, dated March 2, 1983, filed herein.
<PAGE>

10. Not applicable.

11. Not applicable.

12. Not applicable.

13. Amended and Restated Plan of Distribution Pursuant to Rule 12b-1
between the Registrant and Morgan Stanley Dean Witter
Distributors Inc., dated July 28, 1997, is incorporated by
reference to Exhibit 15 of Post-Effective Amendment No. 15 to the
Registration Statement on Form N-1A, filed on July 10, 1997.

14. Amended Multiple Class Plan Pursuant to Rule 18f-3 is
incorporated by reference to Exhibit 18 of Post-Effective
Amendment No. 17 to the Registration Statement on Form N-1A,
filed on November 24, 1998.

Other. Powers of Attorney of Trustees are incorporated by reference to
Exhibit (Other) of Post-Effective Amendment No. 12 to the
Registration Statement on Form N-1A, filed on November 21, 1994
and Exhibit (Other) of Post-Effective Amendment No. 16 to the
Registration Statement on Form N-1A, filed on October 25, 1997.

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

None

Item 25. Indemnification.
----------------

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

Pursuant to Section 5.2 of the Registrant's Declaration of Trust and
paragraph 8 of the Registrant's Investment Management Agreement, neither the
Investment Manager nor any trustee, officer, employee or agent of the Registrant
shall be liable for any action or failure to act, except in the case of bad
faith, willful misfeasance, gross negligence or reckless disregard of duties to
the Registrant.

<PAGE>

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

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

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

Item 26. Business and Other Connections of Investment Advisor
----------------------------------------------------

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

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

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

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

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

<PAGE>

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

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

<PAGE>

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

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

Edward C. Oelsner, III
Executive Vice President

Barry Fink Assistant Secretary of DWR; Senior Vice President,
Senior Vice President, Secretary, General Counsel and Director of MSDW
Secretary, General Services; Senior Vice President, Assistant
Counsel and Director Secretary and Assistant General Counsel of MSDW
Distributors; Vice President, Secretary and General
Counsel of the Morgan Stanley Dean Witter Funds and
Discover Brokerage Index Series.

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

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

Rosalie Clough
Senior Vice President
and Director of Marketing

Richard Felegy
Senior Vice President

Edward F. Gaylor Vice President of various Morgan Stanley Dean
Senior Vice President Witter Funds.

Robert S. Giambrone Senior Vice President of MSDW Services, MSDW
Senior Vice President Distributors and MSDW Trust and Director of MSDW
Trust; Vice President of the Morgan Stanley Dean
Witter Funds and Discover Brokerage Index Series.
<PAGE>

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

Kenton J. Hinchliffe Vice President of various Morgan Stanley Dean
Senior Vice President Witter Funds and Discover Brokerage Index Series.

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

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

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

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

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

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

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

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

Rochelle G. Siegel Vice President of various Morgan Stanley Dean
Senior Vice President Witter Funds.

James Solloway
Senior Vice President

<PAGE>

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

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

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

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

Thomas Chronert
First Vice President

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

Salvatore DeSteno First Vice President of MSDW Services.
First Vice President

Peter W. Gurman
First Vice President

Michael Interrante First Vice President and Controller of MSDW
First Vice President Services; Assistant Treasurer of MSDW
and Controller Distributors; First Vice President and
Treasurer of MSDW Trust.

David Johnson
First Vice President

<PAGE>

Stanley Kapica
First Vice President

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

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

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

James P. Wallin
First Vice President

Robert Abreu
Vice President

Dale Albright
Vice President

Joan G. Allman
Vice President

Andrew Arbenz
Vice President

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

Armon Bar-Tur Vice President of various Morgan Stanley Dean
Vice President Witter Funds.

Raymond Basile
Vice President

Nancy Belza
Vice President

<PAGE>

Maurice Bendrihem
Vice President and
Assistant Controller

Dale Boettcher
Vice President

Ronald Caldwell
Vice President

Joseph Cardwell
Vice President

Liam Carroll
Vice President

Philip Casparius
Vice President

Aaron Clark
Vice President

William Connerly
Vice President

David Dineen
Vice President

Sheila Finnerty Vice President of Morgan Stanley Dean Witter
Vice President Prime Income Trust

Jeffrey D. Geffen
Vice President

Sandra Gelpieryn
Vice President

Charmaine George
Vice President

Michael Geringer
Vice President

Gail Gerrity
Vice President

<PAGE>

Ellen Gold
Vice President

Stephen Greenhut
Vice President

Trey Hancock
Vice President

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

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

David T. Hoffman
Vice President

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

Carol Espejo-Kane
Vice President

Nancy Karole-Kennedy
Vice President

Doug Ketterer
Vice President

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

Kimberly LaHart
Vice President

Thomas Lawlor
Vice President

Todd Lebo Vice President and Assistant Secretary of MSDW
Vice President and Services; Assistant Secretary of MSDW Distributors,
Assistant Secretary the Morgan Stanley Dean Witter Funds and Discover
Brokerage Index Series.

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

<PAGE>

Nancy Login
Vice President

Sharon Loguercio
Vice President

Steven MacNamara
Vice President

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

Albert McGarity
Vice President

Teresa McRoberts Vice President of Morgan Stanley Dean Witter S&P
Vice President 500 Select Fund.

Mark Mitchell
Vice President

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

Mary Beth Mueller
Vice President

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

James Nash
Vice President

Richard Norris
Vice President

Anne Pickrell
Vice President

Dawn Rorke
Vice President

John Roscoe Vice President of Morgan Stanley Dean Witter Real
Vice President Estate Fund

Hugh Rose
Vice President

<PAGE>

Robert Rossetti Vice President of various Morgan Stanley Dean
Vice President Witter Funds.

Carl F. Sadler
Vice President

Deborah Santaniello
Vice President

Patrice Saunders
Vice President

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

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

Robert Stearns
Vice President

Naomi Stein
Vice President

Michael Strayhorn
Vice President

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

Marybeth Swisher
Vice President

Michael Thayer
Vice President

Robert Vanden Assem
Vice President

David Walsh
Vice President

Alice Weiss Vice President of various Morgan Stanley Dean
Vice President Witter Funds.

John Wong
Vice President

<PAGE>

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

Item 27. Principal Underwriters

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

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

<PAGE>

(40) Morgan Stanley Dean Witter Multi-State Municipal Series Trust
(41) Morgan Stanley Dean Witter Natural Resource Development Securities Inc.
(42) Morgan Stanley Dean Witter New York Municipal Money Market Trust
(43) Morgan Stanley Dean Witter New York Tax-Free Income Fund
(44) Morgan Stanley Dean Witter North American Government Income Trust
(45) Morgan Stanley Dean Witter Pacific Growth Fund Inc.
(46) Morgan Stanley Dean Witter Precious Metals and Minerals Trust
(47) Morgan Stanley Dean Witter Prime Income Trust
(48) Morgan Stanley Dean Witter Real Estate Fund
(49) Morgan Stanley Dean Witter S&P 500 Index Fund
(50) Morgan Stanley Dean Witter S&P 500 Select Fund
(51) Morgan Stanley Dean Witter Short-Term Bond Fund
(52) Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust
(53) Morgan Stanley Dean Witter Small Cap Growth Fund
(54) Morgan Stanley Dean Witter Special Value Fund
(55) Morgan Stanley Dean Witter Strategist Fund
(56) Morgan Stanley Dean Witter Tax-Exempt Securities Trust
(57) Morgan Stanley Dean Witter Tax-Free Daily Income Trust
(58) Morgan Stanley Dean Witter Total Market Index Fund
(59) Morgan Stanley Dean Witter Total Return Trust
(60) Morgan Stanley Dean Witter U.S. Government Money Market Trust
(61) Morgan Stanley Dean Witter U.S. Government Securities Trust
(62) Morgan Stanley Dean Witter Utilities Fund
(63) Morgan Stanley Dean Witter Value-Added Market Series
(64) Morgan Stanley Dean Witter Value Fund
(65) Morgan Stanley Dean Witter Variable Investment Series
(66) Morgan Stanley Dean Witter World Wide Income Trust

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

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

Michael T. Gregg Vice President and Assistant Secretary.

James F. Higgins Director

Fredrick K. Kubler Senior Vice President, Assistant Secretary and
Chief Compliance Officer.

Philip J. Purcell Director

John Schaeffer Director

Charles Vadala Senior Vice President and Financial Principal.

<PAGE>

Item 28. Location of Accounts and Records
--------------------------------

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

Item 29. Management Services
-------------------

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

Item 30. Undertakings
------------

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

<PAGE>

SIGNATURES
----------

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it has duly caused
this Post-Effective Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York
and State of New York on the 28th day of September, 1999.

MORGAN STANLEY DEAN WITTER
DEVELOPING GROWTH SECURITIES TRUST

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

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 18 has been signed below by the following persons
in the capacities and on the dates indicated.

<TABLE>
Signatures Title Date
---------- ----- ----
<CAPTION>

<S> <C> <C>
(1) Principal Executive Officer Chairman, Chief Executive Officer,
and Trustee

By: /s/ Charles A. Fiumefreddo 09/28/99
--------------------------
Charles A. Fiumefreddo

(2) Principal Financial Officer Treasurer and Principal
Accounting Officer

By: /s/ Thomas F. Caloia 09/28/99
--------------------
Thomas F. Caloia

(3) Majority of the Trustees

Charles A. Fiumefreddo (Chairman)
Philip J. Purcell

By: /s/ Barry Fink 09/28/99
--------------
Barry Fink
Attorney-in-Fact

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

By: /s/David M. Butowsky 09/28/99
-------------------
David M. Butowsky
Attorney-in-Fact
</TABLE>

<PAGE>

MORGAN STANLEY DEAN WITTER
DEVELOPING GROWTH SECURITIES TRUST
EXHIBIT INDEX

2. Amended and Restated By-Laws of the Registrant dated May 1, 1999

6. Second Amended and Restated Retirement Plan for Non-Interested
Trustees or Directors, dated May 8, 1997.

9(a). Opinion of Sheldon Curtus, Esq., dated March 3, 1983.

9(b). Opinion of Gaston Snow & Ely Bartlett, Massachusetts Counsel, dated
March 2, 1983.

<PAGE>

BY-LAWS

DEVELOPING GROWTH SECURITIES TRUST
AMENDED AND RESTATED AS OF MAY 1, 1999

ARTICLE I

DEFINITIONS

The terms "Commission," "Declaration," "Distributor," "Investment Adviser,"
"Majority Shareholder Vote," "1940 Act," "Shareholder," "Shares," "Transfer
Agent," "Trust," "Trust Property," and "Trustees" have the respective meanings
given them in the Declaration of Trust of Morgan Stanley Dean Witter S&P 500
Index Fund dated June 18, 1997, as amended from time to time.

ARTICLE II

OFFICES

SECTION 2.1. Principal Office. Until changed by the Trustees, the
principal office of the Trust in the Commonwealth of Massachusetts shall be in
the City of Boston, County of Suffolk.

SECTION 2.2. Other Offices. In addition to its principal office in the
Commonwealth of Massachusetts, the Trust may have an office or offices in the
City of New York, State of New York, and at such other places within and without
the Commonwealth as the Trustees may from time to time designate or the business
of the Trust may require.

ARTICLE III

SHAREHOLDERS' MEETINGS

SECTION 3.1. Place of Meetings. Meetings of Shareholders shall be held at
such place, within or without the Commonwealth of Massachusetts, as may be
designated from time to time by the Trustees.

SECTION 3.2. Meetings. Meetings of Shareholders of the Trust shall be held
whenever called by the Trustees or the President of the Trust and whenever
election of a Trustee or Trustees by Shareholders is required by the provisions
of Section 16(a) of the 1940 Act, for that purpose. Meetings of Shareholders
shall also be called by the Secretary upon the written request of the holders of
Shares entitled to vote as otherwise required by Section 16(c) of the 1940 Act
and to the extent required by the corporate or business statute of any state in
which the Shares of the Trust are sold, as made applicable to the Trust by the
provisions of Section 2.3 of the Declaration. Such request shall state the
purpose or purposes of such meeting and the matters proposed to be acted on
thereat. Except to the extent otherwise required by Section 16(c) of the 1940
Act, as made applicable to the Trust by the provisions of Section 2.3 of the
Declaration, the Secretary shall inform such Shareholders of the reasonable
estimated cost of preparing and mailing such notice of the meeting, and upon
payment to the Trust of such costs, the Secretary shall give notice stating the
purpose or purposes of the meeting to all entitled to vote at such meeting. No
meeting need be called upon the request of the holders of Shares entitled to
cast less than a majority of all votes entitled to be cast at such meeting, to
consider any matter which is substantially the same as a matter voted upon at
any meeting of Shareholders held during the preceding twelve months.

SECTION 3.3. Notice of Meetings. Written or printed notice of every
Shareholders' meeting stating the place, date, and purpose or purposes thereof,
shall be given by the Secretary not less than ten (10) nor more than ninety (90)
days before such meeting to each Shareholder entitled to vote at such meeting.
Such notice shall be deemed to be given when deposited in the United States
mail, postage prepaid, directed to the Shareholder at his address as it appears
on the records of the Trust.

SECTION 3.4. Quorum and Adjournment of Meetings. Except as otherwise
provided by law, by the Declaration or by these By-Laws, at all meetings of
Shareholders, the holders of a majority of the Shares issued and outstanding and
entitled to vote thereat, present in person or represented by proxy, shall be
requisite and shall constitute a quorum for the transaction of business. In the
absence of a quorum, the

<PAGE>

Shareholders present or represented by proxy and entitled to vote thereat shall
have the power to adjourn the meeting from time to time. The Shareholders
present in person or represented by proxy at any meeting and entitled to vote
thereat also shall have the power to adjourn the meeting from time to time if
the vote required to approve or reject any proposal described in the original
notice of such meeting is not obtained (with proxies being voted for or against
adjournment consistent with the votes for and against the proposal for which the
required vote has not been obtained). The affirmative vote of the holders of a
majority of the Shares then present in person or represented by proxy shall be
required to adjourn any meeting. Any adjourned meeting may be reconvened without
further notice or change in record date. At any reconvened meeting at which a
quorum shall be present, any business may be transacted that might have been
transacted at the meeting as originally called.

SECTION 3.5. Voting Rights, Proxies. At each meeting of Shareholders, each
holder of record of Shares entitled to vote thereat shall be entitled to one
vote in person or by proxy for each Share of beneficial interest of the Trust
and for the fractional portion of one vote for each fractional Share entitled to
vote so registered in his or her name on the records of the Trust on the date
fixed as the record date for the determination of Shareholders entitled to vote
at such meeting. Without limiting the manner in which a Shareholder may
authorize another person or persons to act for such Shareholder as proxy
pursuant hereto, the following shall constitute a valid means by which a
Shareholder may grant such authority:

(i) A Shareholder may execute a writing authorizing another person or persons
to act for such Shareholder as proxy. Execution may be accomplished by the
Shareholder or such Shareholder's authorized officer, director, employee,
attorney-in-fact or another agent signing such writing or causing such
person's signature to be affixed to such writing by any reasonable means
including, but not limited to, by facsimile or telecopy signature. No written
evidence of authority of a Shareholder's authorized officer, director,
employee, attorney-in-fact or other agent shall be required; and

(ii) A Shareholder may authorize another person or persons to act for such
Shareholder as proxy by transmitting or authorizing the transmission of a
telegram or cablegram or by other means of telephonic, electronic or computer
transmission to the person who will be the holder of the proxy or to a proxy
solicitation firm, proxy support service organization or like agent duly
authorized by the person who will be the holder of the proxy to receive such
transmission, provided that any such telegram or cablegram or other means of
telephonic, electronic or computer transmission must either set forth or be
submitted with information from which it can be determined that the telegram,
cablegram or other transmission was authorized by the Shareholder.

No proxy shall be valid after eleven months from its date, unless otherwise
provided in the proxy. At all meetings of Shareholders, unless the voting is
conducted by inspectors, all questions relating to the qualification of voters
and the validity of proxies and the acceptance or rejection of votes shall be
decided by the chairman of the meeting. In determining whether a telegram,
cablegram or other electronic transmission is valid, the chairman or inspector,
as the case may be, shall specify the information upon which he or she relied.
Pursuant to a resolution of a majority of the Trustees, proxies may be solicited
in the name of one or more Trustees or Officers of the Trust. Proxy
solicitations may be made in writing or by using telephonic or other electronic
solicitation procedures that include appropriate methods of verifying the
identity of the Shareholder and confirming any instructions given thereby.

SECTION 3.6. Vote Required. Except as otherwise provided by law, by the
Declaration of Trust, or by these By-Laws, at each meeting of Shareholders at
which a quorum is present, all matters shall be decided by Majority Shareholder
Vote.

SECTION 3.7. Inspectors of Election. In advance of any meeting of
Shareholders, the Trustees may appoint Inspectors of Election to act at the
meeting or any adjournment thereof. If Inspectors of Election are not so
appointed, the chairman of any meeting of Shareholders may, and on the request
of any Shareholder or his proxy shall, appoint Inspectors of Election of the
meeting. In case any person appointed as Inspector fails to appear or fails or
refuses to act, the vacancy may be filled by appointment made by the Trustees in
advance of the convening of the meeting or at the meeting by the person acting
as chairman. The Inspectors of Election shall determine the number of Shares
outstanding, the Shares

<PAGE>

represented at the meeting, the existence of a quorum, the authenticity,
validity and effect of proxies, shall receive votes, ballots or consents, shall
hear and determine all challenges and questions in any way arising in connection
with the right to vote, shall count and tabulate all votes or consents,
determine the results, and do such other acts as may be proper to conduct the
election or vote with fairness to all Shareholders. On request of the chairman
of the meeting, or of any Shareholder or his proxy, the Inspectors of Election
shall make a report in writing of any challenge or question or matter determined
by them and shall execute a certificate of any facts found by them.

SECTION 3.8. Inspection of Books and Records. Shareholders shall have such
rights and procedures of inspection of the books and records of the Trust as are
granted to Shareholders under Section 32 of the Business Corporation Law of the
Commonwealth of Massachusetts.

SECTION 3.9. Action by Shareholders Without Meeting. Except as otherwise
provided by law, the provisions of these By-Laws relating to notices and
meetings to the contrary notwithstanding, any action required or permitted to be
taken at any meeting of Shareholders may be taken without a meeting if a
majority of the Shareholders entitled to vote upon the action consent to the
action in writing and such consents are filed with the records of the Trust.
Such consent shall be treated for all purposes as a vote taken at a meeting of
Shareholders.

SECTION 3.10. Presence at Meetings. Presence at meetings of Shareholders
requires physical attendance by the Shareholder or his or her proxy at the
meeting site and does not encompass attendance by telephonic or other electronic
means.

ARTICLE IV

TRUSTEES

SECTION 4.1. Meetings of the Trustees. The Trustees may in their discretion
provide for regular or special meetings of the Trustees. Regular meetings of the
Trustees may be held at such time and place as shall be determined from time to
time by the Trustees without further notice. Special meetings of the Trustees
may be called at any time by the Chairman and shall be called by the Chairman or
the Secretary upon the written request of any two (2) Trustees.

SECTION 4.2. Notice of Special Meetings. Written notice of special meetings
of the Trustees, stating the place, date and time thereof, shall be given not
less than two (2) days before such meeting to each Trustee, personally, by
telegram, by mail, or by leaving such notice at his place of residence or usual
place of business. If mailed, such notice shall be deemed to be given when
deposited in the United States mail, postage prepaid, directed to the Trustee at
his address as it appears on the records of the Trust. Subject to the provisions
of the 1940 Act, notice or waiver of notice need not specify the purpose of any
special meeting.

SECTION 4.3. Telephone Meetings. Subject to the provisions of the 1940 Act,
any Trustee, or any member or members of any committee designated by the
Trustees, may participate in a meeting of the Trustees, or any such committee,
as the case may be, by means of a conference telephone or similar communications
equipment if all persons participating in the meeting can hear each other at the
same time. Participation in a meeting by these means constitutes presence in
person at the meeting.

SECTION 4.4. Quorum, Voting and Adjournment of Meetings. At all meetings of
the Trustees, a majority of the Trustees shall be requisite to and shall
constitute a quorum for the transaction of business. If a quorum is present, the
affirmative vote of a majority of the Trustees present shall be the act of the
Trustees, unless the concurrence of a greater proportion is expressly required
for such action by law, the Declaration or these By- Laws. If at any meeting of
the Trustees there be less than a quorum present, the Trustees present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall have been obtained.

SECTION 4.5. Action by Trustees Without Meeting. The provisions of these
By-Laws covering notices and meetings to the contrary notwithstanding, and
except as required by law, any action required

<PAGE>

or permitted to be taken at any meeting of the Trustees may be taken without a
meeting if a consent in writing setting forth the action shall be signed by all
of the Trustees entitled to vote upon the action and such written consent is
filed with the minutes of proceedings of the Trustees.

SECTION 4.6. Expenses and Fees. Each Trustee may be allowed expenses, if
any, for attendance at each regular or special meeting of the Trustees, and each
Trustee who is not an officer or employee of the Trust or of its investment
manager or underwriter or of any corporate affiliate of any of said persons
shall receive for services rendered as a Trustee of the Trust such compensation
as may be fixed by the Trustees. Nothing herein contained shall be construed to
preclude any Trustee from serving the Trust in any other capacity and receiving
compensation therefor.

SECTION 4.7. Execution of Instruments and Documents and Signing of Checks
and Other Obligations and Transfers. All instruments, documents and other papers
shall be executed in the name and on behalf of the Trust and all checks, notes,
drafts and other obligations for the payment of money by the Trust shall be
signed, and all transfer of securities standing in the name of the Trust shall
be executed, by the Chairman, the President, any Vice President or the Treasurer
or by any one or more officers or agents of the Trust as shall be designated for
that purpose by vote of the Trustees; notwithstanding the above, nothing in this
Section 4.7 shall be deemed to preclude the electronic authorization, by
designated persons, of the Trust's Custodian (as described herein in Section
9.1) to transfer assets of the Trust, as provided for herein in Section 9.1.

SECTION 4.8. Indemnification of Trustees, Officers, Employees and Agents.
(a) The Trust shall indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending, or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the Trust) by reason of the fact that he is or
was a Trustee, officer, employee, or agent of the Trust. The indemnification
shall be against expenses, including attorneys' fees, judgments, fines, and
amounts paid in settlement, actually and reasonably incurred by him in
connection with the action, suit, or proceeding, if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interests
of the Trust, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

(b) The Trust shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or on behalf of the Trust to obtain a judgment or decree in its favor by
reason of the fact that he is or was a Trustee, officer, employee, or agent of
the Trust. The indemnification shall be against expenses, including attorneys'
fees actually and reasonably incurred by him in connection with the defense or
settlement of the action or suit, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Trust;
except that no indemnification shall be made in respect of any claim, issue, or
matter as to which the person has been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Trust, except to the extent
that the court in which the action or suit was brought, or a court of equity in
the county in which the Trust has its principal office, determines upon
application that, despite the adjudication of liability but in view of all
circumstances of the case, the person is fairly and reasonably entitled to
indemnity for those expenses which the court shall deem proper, provided such
Trustee, officer, employee or agent is not adjudged to be liable by reason of
his willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his office.

(c) To the extent that a Trustee, officer, employee, or agent of the Trust
has been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in subsection (a) or (b) or in defense of any claim,
issue or matter therein, he shall be indemnified against expenses, including
attorneys' fees, actually and reasonably incurred by him in connection
therewith.

<PAGE>

(d) (1) Unless a court orders otherwise, any indemnification under
subsections (a) or (b) of this section may be made by the Trust only as
authorized in the specific case after a determination that indemnification of
the Trustee, officer, employee, or agent is proper in the circumstances because
he has met the applicable standard of conduct set forth in subsections (a) or
(b).

(2) The determination shall be made:

(i) By the Trustees, by a majority vote of a quorum which consists of
Trustees who were not parties to the action, suit or proceeding; or

(ii) If the required quorum is not obtainable, or if a quorum of
disinterested Trustees so directs, by independent legal counsel in a written
opinion; or

(iii) By the Shareholders.

(3) Notwithstanding any provision of this Section 4.8, no person shall be
entitled to indemnification for any liability, whether or not there is an
adjudication of liability, arising by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of duties as described in
Section 17(h) and (i) of the Investment Company Act of 1940 ("disabling
conduct"). A person shall be deemed not liable by reason of disabling
conduct if, either:

(i) a final decision on the merits is made by a court or other body before
whom the proceeding was brought that the person to be indemnified
("indemnitee") was not liable by reason of disabling conduct; or

(ii) in the absence of such a decision, a reasonable determination, based
upon a review of the facts, that the indemnitee was not liable by reason of
disabling conduct, is made by either--

(A) a majority of a quorum of Trustees who are neither "interested
persons" of the Trust, as defined in Section 2(a)(19) of the Investment
Company Act of 1940, nor parties to the action, suit or proceeding, or

(B) an independent legal counsel in a written opinion.

(e) Expenses, including attorneys' fees, incurred by a Trustee, officer,
employee or agent of the Trust in defending a civil or criminal action, suit or
proceeding may be paid by the Trust in advance of the final disposition thereof
if:

(1) authorized in the specific case by the Trustees; and

(2) the Trust receives an undertaking by or on behalf of the Trustee,
officer, employee or agent of the Trust to repay the advance if it is not
ultimately determined that such person is entitled to be indemnified by the
Trust; and

(3) either, (i) such person provides a security for his undertaking, or

(ii) the Trust is insured against losses by reason of any lawful
advances, or

(iii) a determination, based on a review of readily available facts,
that there is reason to believe that such person ultimately will be
found entitled to indemnification, is made by either--

(A) a majority of a quorum which consists of Trustees who are
neither "interested persons" of the Trust, as defined in Section
2(a)(19) of the 1940 Act, nor parties to the action, suit or
proceeding, or

(B) an independent legal counsel in a written opinion.

(f) The indemnification provided by this Section shall not be deemed
exclusive of any other rights to which a person may be entitled under any
by-law, agreement, vote of Shareholders or disinterested Trustees or otherwise,
both as to action in his official capacity and as to action in another capacity
while holding the office, and shall continue as to a person who has ceased to be
a Trustee, officer, employee, or agent and inure to the benefit of the heirs,
executors and administrators of such person; provided that no

<PAGE>

person may satisfy any right of indemnity or reimbursement granted herein or to
which he may be otherwise entitled except out of the property of the Trust, and
no Shareholder shall be personally liable with respect to any claim for
indemnity or reimbursement or otherwise.

(g) The Trust may purchase and maintain insurance on behalf of any person
who is or was a Trustee, officer, employee, or agent of the Trust, against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such. However, in no event will the Trust purchase
insurance to indemnify any officer or Trustee against liability for any act for
which the Trust itself is not permitted to indemnify him.

(h) Nothing contained in this Section shall be construed to protect any
Trustee or officer of the Trust against any liability to the Trust or to its
security holders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.

ARTICLE V

COMMITTEES

SECTION 5.1. Executive and Other Committees. The Trustees, by resolution
adopted by a majority of the Trustees, may designate an Executive Committee
and/or committees, each committee to consist of two (2) or more of the Trustees
of the Trust and may delegate to such committees, in the intervals between
meetings of the Trustees, any or all of the powers of the Trustees in the
management of the business and affairs of the Trust. In the absence of any
member of any such committee, the members thereof present at any meeting,
whether or not they constitute a quorum, may appoint a Trustee to act in place
of such absent member. Each such committee shall keep a record of its
proceedings.

The Executive Committee and any other committee shall fix its own rules or
procedure, but the presence of at least fifty percent (50%) of the members of
the whole committee shall in each case be necessary to constitute a quorum of
the committee and the affirmative vote of the majority of the members of the
committee present at the meeting shall be necessary to take action.

All actions of the Executive Committee shall be reported to the Trustees at
the meeting thereof next succeeding to the taking of such action.

SECTION 5.2. Advisory Committee. The Trustees may appoint an advisory
committee which shall be composed of persons who do not serve the Trust in any
other capacity and which shall have advisory functions with respect to the
investments of the Trust but which shall have no power to determine that any
security or other investment shall be purchased, sold or otherwise disposed of
by the Trust. The number of persons constituting any such advisory committee
shall be determined from time to time by the Trustees. The members of any such
advisory committee may receive compensation for their services and may be
allowed such fees and expenses for the attendance at meetings as the Trustees
may from time to time determine to be appropriate.

SECTION 5.3. Committee Action Without Meeting. The provisions of these
By-Laws covering notices and meetings to the contrary notwithstanding, and
except as required by law, any action required or permitted to be taken at any
meeting of any Committee of the Trustees appointed pursuant to Section 5.1 of
these By-Laws may be taken without a meeting if a consent in writing setting
forth the action shall be signed by all members of the Committee entitled to
vote upon the action and such written consent is filed with the records of the
proceedings of the Committee.

ARTICLE VI

OFFICERS

SECTION 6.1. Executive Officers. The executive officers of the Trust shall
be a Chairman, a President, one or more Vice Presidents, a Secretary and a
Treasurer. The Chairman shall be selected from among the Trustees but none of
the other executive officers need be a Trustee. Two or more offices, except
those of President and any Vice President, may be held by the same person, but
no officer shall execute,

<PAGE>

acknowledge or verify any instrument in more than one capacity. The executive
officers of the Trust shall be elected annually by the Trustees and each
executive officer so elected shall hold office until his or her successor is
elected and has qualified.

SECTION 6.2. Other Officers and Agents. The Trustees may also elect one or
more Assistant Vice Presidents, Assistant Secretaries and Assistant Treasurers
and may elect, or may delegate to the Chairman the power to appoint, such other
officers and agents as the Trustees shall at any time or from time to time deem
advisable.

SECTION 6.3. Term and Removal and Vacancies. Each officer of the Trust
shall hold office until his or her successor is elected and has qualified. Any
officer or agent of the Trust may be removed by the Trustees whenever, in their
judgment, the best interests of the Trust will be served thereby, but such
removal shall be without prejudice to the contractual rights, if any, of the
person so removed.

SECTION 6.4. Compensation of Officers. The compensation of officers and
agents of the Trust shall be fixed by the Trustees, or by the Chairman to the
extent provided by the Trustees with respect to officers appointed by the
Chairman.

SECTION 6.5. Powers and Duties. All officers and agents of the Trust, as
between themselves and the Trust, shall have such authority and perform such
duties in the management of the Trust as may be provided in or pursuant to these
By-Laws or, to the extent not so provided, as may be prescribed by the Trustees;
provided that no rights of any third party shall be affected or impaired by any
such By-Law or resolution of the Trustees unless such third party has knowledge
thereof.

SECTION 6.6. The Chairman. The Chairman shall be the chief executive
officer of the Trust, shall preside at all meetings of the Shareholders and of
the Trustees, shall have general and active management of the business of the
Trust, shall see that all orders and resolutions of the Trustees are carried
into effect and, in connection therewith, shall be authorized to delegate to the
President or to one or more Vice Presidents such of his or her powers and duties
at such times and in such manner as he or she may deem advisable, shall be a
signatory on all Annual and Semi-Annual Reports as may be sent to Shareholders,
and shall perform such other duties as the Trustees may from time to time
prescribe.

SECTION 6.7. The President. The President shall perform such duties as the
Trustees and the Chairman may from time to time prescribe and shall, in the
absence or disability of the Chairman, exercise the powers and perform the
duties of the Chairman. The President shall be authorized to delegate to one or
more Vice Presidents such of his or her powers and duties at such times and in
such manner as he or she may deem advisable.

SECTION 6.8. The Vice Presidents. The Vice Presidents shall be of such
number and shall have such titles as may be determined from time to time by the
Trustees. The Vice President, or, if there shall be more than one, the Vice
Presidents in such order as may be determined from time to time by the Trustees
or the Chairman, shall, in the absence or disability of the President, exercise
the powers and perform the duties of the President, and shall perform such other
duties as the Trustees or the Chairman may from time to time prescribe.

SECTION 6.9. The Assistant Vice Presidents. The Assistant Vice President,
or, if there shall be more than one, the Assistant Vice Presidents in such order
as may be determined from time to time by the Trustees or the Chairman, shall
perform such duties and have such powers as may be assigned them from time to
time by the Trustees or the Chairman.

SECTION 6.10. The Secretary. The Secretary shall attend all meetings of the
Trustees and all meetings of the Shareholders and record all the proceedings of
the meetings of the Shareholders and of the Trustees in a book to be kept for
that purpose, and shall perform like duties for the standing committees when
required. He or she shall give, or cause to be given, notice of all meetings of
the Shareholders and special meetings of the Trustees, and shall perform such
other duties and have such powers as the Trustees or the Chairman may from time
to time prescribe. He or she shall keep in safe custody the seal of the Trust
and affix or cause the same to be affixed to any instrument requiring it, and,
when so affixed, it shall be attested by his or her signature or by the
signature of an Assistant Secretary.

<PAGE>

SECTION 6.11. The Assistant Secretaries. The Assistant Secretary, or, if
there shall be more than one, the Assistant Secretaries in such order as may be
determined from time to time by the Trustees or the Chairman, shall, in the
absence or disability of the Secretary, perform the duties and exercise the
powers of the Secretary and shall perform such duties and have such other powers
as the Trustees or the Chairman may from time to time prescribe.

SECTION 6.12. The Treasurer. The Treasurer shall be the chief financial
officer of the Trust. He or she shall keep or cause to be kept full and accurate
accounts of receipts and disbursements in books belonging to the Trust, and he
or she shall render to the Trustees and the Chairman, whenever any of them
require it, an account of his or her transactions as Treasurer and of the
financial condition of the Trust, and he or she shall perform such other duties
as the Trustees or the Chairman may from time to time prescribe.

SECTION 6.13. The Assistant Treasurers. The Assistant Treasurer, or, if
there shall be more than one, the Assistant Treasurers in such order as may be
determined from time to time by the Trustees or the Chairman, shall, in the
absence or disability of the Treasurer, perform the duties and exercise the
powers of the Treasurer and shall perform such other duties and have such other
powers as the Trustees or the Chairman may from time to time prescribe.

SECTION 6.14. Delegation of Duties. Whenever an officer is absent or
disabled, or whenever for any reason the Trustees may deem it desirable, the
Trustees may delegate the powers and duties of an officer or officers to any
other officer or officers or to any Trustee or Trustees.

ARTICLE VII

DIVIDENDS AND DISTRIBUTIONS

Subject to any applicable provisions of law and the Declaration, dividends
and distributions upon the Shares may be declared at such intervals as the
Trustees may determine, in cash, in securities or other property, or in Shares,
from any sources permitted by law, all as the Trustees shall from time to time
determine.

Inasmuch as the computation of net income and net profits from the sales of
securities or other properties for federal income tax purposes may vary from the
computation thereof on the records of the Trust, the Trustees shall have power,
in their discretion, to distribute as income dividends and as capital gain
distributions, respectively, amounts sufficient to enable the Trust to avoid or
reduce liability for federal income taxes.

ARTICLE VIII

CERTIFICATES OF SHARES

SECTION 8.1. Certificates of Shares. Certificates for Shares of each series
or class of Shares shall be in such form and of such design as the Trustees
shall approve, subject to the right of the Trustees to change such form and
design at any time or from time to time, and shall be entered in the records of
the Trust as they are issued. Each such certificate shall bear a distinguishing
number; shall exhibit the holders' name and certify the number of full Shares
owned by such holder; shall be signed by or in the name of the Trust by the
Chairman, the President, or a Vice President, and countersigned by the Secretary
or an Assistant Secretary or the Treasurer and an Assistant Treasurer of the
Trust; shall be sealed with the seal; and shall contain such recitals as may be
required by law. Where any certificate is signed by a Transfer Agent or by a
Registrar, the signature of such officers and the seal may be facsimile, printed
or engraved. The Trust may, at its option, determine not to issue a certificate
or certificates to evidence Shares owned of record by any Shareholder.

In case any officer or officers who shall have signed, or whose facsimile
signature or signatures shall appear on, any such certificate or certificates
shall cease to be such officer or officers of the Trust, whether because of
death, resignation or otherwise, before such certificate or certificates shall
have been delivered by the Trust, such certificate or certificates shall,
nevertheless, be adopted by the Trust and be issued and

<PAGE>

delivered as though the person or persons who signed such certificate or
certificates or whose facsimile signature or signatures shall appear therein had
not ceased to be such officer or officers of the Trust.

No certificate shall be issued for any share until such share is fully
paid.

SECTION 8.2. Lost, Stolen, Destroyed and Mutilated Certificates. The
Trustees may direct a new certificate or certificates to be issued in place of
any certificate or certificates theretofore issued by the Trust alleged to have
been lost, stolen or destroyed, upon satisfactory proof of such loss, theft, or
destruction; and the Trustees may, in their discretion, require the owner of the
lost, stolen or destroyed certificate, or his legal representative, to give to
the Trust and to such Registrar, Transfer Agent and/or Transfer Clerk as may be
authorized or required to countersign such new certificate or certificates, a
bond in such sum and of such type as they may direct, and with such surety or
sureties, as they may direct, as indemnity against any claim that may be against
them or any of them on account of or in connection with the alleged loss, theft
or destruction of any such certificate.

ARTICLE IX

CUSTODIAN

SECTION 9.1. Appointment and Duties. The Trust shall at all times employ a
bank or trust company having capital, surplus and undivided profits of at least
five million dollars ($5,000,000) as custodian with authority as its agent, but
subject to such restrictions, limitations and other requirements, if any, as may
be contained in these By-Laws and the 1940 Act:

(1) to receive and hold the securities owned by the Trust and deliver the
same upon written or electronically transmitted order;

(2) to receive and receipt for any moneys due to the Trust and deposit the
same in its own banking department or elsewhere as the Trustees may direct;

(3) to disburse such funds upon orders or vouchers;

all upon such basis of compensation as may be agreed upon between the Trustees
and the custodian. If so directed by a Majority Shareholder Vote, the custodian
shall deliver and pay over all property of the Trust held by it as specified in
such vote.

The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services of the
custodian and upon such terms and conditions as may be agreed upon between the
custodian and such sub-custodian and approved by the Trustees, provided that in
every case such sub-custodian shall be a bank or trust company organized under
the laws of the United States or one of the states thereof and having capital,
surplus and undivided profits of at least five million dollars ($5,000,000).

SECTION 9.2. Central Certificate System. Subject to such rules, regulations
and orders as the Commission may adopt, the Trustees may direct the custodian to
deposit all or any part of the securities owned by the Trust in a system for the
central handling of securities established by a national securities exchange or
a national securities association registered with the Commission under the
Securities Exchange Act of 1934, or such other person as may be permitted by the
Commission, or otherwise in accordance with the 1940 Act, pursuant to which
system all securities of any particular class or series of any issuer deposited
within the system are treated as fungible and may be transferred or pledged by
bookkeeping entry without physical delivery of such securities, provided that
all such deposits shall be subject to withdrawal only upon the order of the
Trust.

ARTICLE X

WAIVER OF NOTICE

Whenever any notice of the time, place or purpose of any meeting of
Shareholders, Trustees, or of any committee is required to be given in
accordance with law or under the provisions of the Declaration or these ByLaws,
a waiver thereof in writing, signed by the person or persons entitled to such
notice and
9

<PAGE>

filed with the records of the meeting, whether before or after the holding
thereof, or actual attendance at the meeting of shareholders, Trustees or
committee, as the case may be, in person, shall be deemed equivalent to the
giving of such notice to such person.

ARTICLE XI

MISCELLANEOUS

SECTION 11.1. Location of Books and Records. The books and records of the
Trust may be kept outside the Commonwealth of Massachusetts at such place or
places as the Trustees may from time to time determine, except as otherwise
required by law.

SECTION 11.2. Record Date. The Trustees may fix in advance a date as the
record date for the purpose of determining the Shareholders entitled to (i)
receive notice of, or to vote at, any meeting of Shareholders, or (ii) receive
payment of any dividend or the allotment of any rights, or in order to make a
determination of Shareholders for any other proper purpose. The record date, in
any case, shall not be more than one hundred eighty (180) days, and in the case
of a meeting of Shareholders not less than ten (10) days, prior to the date on
which such meeting is to be held or the date on which such other particular
action requiring determination of Shareholders is to be taken, as the case may
be. In the case of a meeting of Shareholders, the meeting date set forth in the
notice to Shareholders accompanying the proxy statement shall be the date used
for purposes of calculating the 180 day or 10 day period, and any adjourned
meeting may be reconvened without a change in record date. In lieu of fixing a
record date, the Trustees may provide that the transfer books shall be closed
for a stated period but not to exceed, in any case, twenty (20) days. If the
transfer books are closed for the purpose of determining Shareholders entitled
to notice of a vote at a meeting of Shareholders, such books shall be closed for
at least ten (10) days immediately preceding the meeting.

SECTION 11.3. Seal. The Trustees shall adopt a seal, which shall be in such
form and shall have such inscription thereon as the Trustees may from time to
time provide. The seal of the Trust may be affixed to any document, and the seal
and its attestation may be lithographed, engraved or otherwise printed on any
document with the same force and effect as if it had been imprinted and attested
manually in the same manner and with the same effect as if done by a
Massachusetts business corporation under Massachusetts law.

SECTION 11.4. Fiscal Year. The fiscal year of the Trust shall end on such
date as the Trustees may by resolution specify, and the Trustees may by
resolution change such date for future fiscal years at any time and from time to
time.

SECTION 11.5. Orders for Payment of Money. All orders or instructions for
the payment of money of the Trust, and all notes or other evidences of
indebtedness issued in the name of the Trust, shall be signed by such officer or
officers or such other person or persons as the Trustees may from time to time
designate, or as may be specified in or pursuant to the agreement between the
Trust and the bank or trust company appointed as Custodian of the securities and
funds of the Trust.

ARTICLE XII

COMPLIANCE WITH FEDERAL REGULATIONS

The Trustees are hereby empowered to take such action as they may deem to
be necessary, desirable or appropriate so that the Trust is or shall be in
compliance with any federal or state statute, rule or regulation with which
compliance by the Trust is required.

ARTICLE XIII

AMENDMENTS

These By-Laws may be amended, altered, or repealed, or new By-Laws may be
adopted, (a) by a Majority Shareholder Vote, or (b) by the Trustees; provided,
however, that no By-Law may be amended,

<PAGE>

adopted or repealed by the Trustees if such amendment, adoption or repeal
requires, pursuant to law, the Declaration, or these By-Laws, a vote of the
Shareholders. The Trustees shall in no event adopt By-Laws which are in conflict
with the Declaration, and any apparent inconsistency shall be construed in favor
of the related provisions in the Declaration.

ARTICLE XIV

DECLARATION OF TRUST

The Declaration of Trust establishing Morgan Stanley Dean Witter S&P 500
Index Fund, dated June 18, 1997, a copy of which, together with all amendments
thereto, is on file in the office of the Secretary of the Commonwealth of
Massachusetts, provides that the name Morgan Stanley Dean Witter S&P 500 Index
Fund refers to the Trustees under the Declaration collectively as Trustees, but
not as individuals or personally; and no Trustee, Shareholder, officer, employee
or agent of Morgan Stanley Dean Witter S&P 500 Index Fund shall be held to any
personal liability, nor shall resort be had to their private property for the
satisfaction of any obligation or claim or otherwise, in connection with the
affairs of said Morgan Stanley Dean Witter S&P 500 Index Fund, but the Trust
Estate only shall be liable.

<PAGE>

SECOND AMENDED AND RESTATED
RETIREMENT PLAN FOR
NON-INTERESTED TRUSTEES
OR DIRECTORS

Certain of the investment companies for which Morgan Stanley Dean Witter
Advisors Inc. ("MSDW Advisors") currently acts as manager or adviser adopted a
Retirement Plan for Non-Interested Trustees and Directors (the "Original Plan")
on February 21, 1991 (the "Commencement Date"). The Original Plan was amended
and restated on October 22, 1993, effective January 1, 1994 and further amended
by First Amendment dated December 19, 1995 and by Second Amendment dated May 8,
1997. The participating Funds now desire to amend and restate the Plan further
as provided herein effective as of the Commencement Date (as so amended, the
"Plan"), for the purposes of expanding the flexibility of Non-Interested
Trustees and Directors to make and change their elections of benefits.

1. DEFINITIONS

(a) "Independent Board Member" shall mean (i) a Trustee of an Adopting Fund
if the Adopting Fund is organized as a Massachusetts business trust, (ii) a
Director of an Adopting Fund if the Adopting Fund is organized as a corporation,
and (iii) a "director" (as such term is defined in Section 2(a)(12) of the
Investment Company Act of 1940, as amended [the "Act"]) of an Adopting Fund if
the Adopting Fund is any other type of organization, who in any such case is not
an interested person (as such term is defined in Section 2(a)(19) of the Act) of
MSDW Advisors.

(b) "Eligible Board Member" shall mean an Independent Board Member who at
the time of Retirement (as hereinafter defined) has served as an Independent
Board Member of any Adopting Fund for at least five years, or such lesser period
as may be determined by the Board.

(d) "Eligible Retirement Date" shall mean, with respect to any Independent
Board Member, the later of (i) January 1, 1993, (ii) the first day of the
calendar month following the month in which such Independent Board Member's
seventy-second birthday occurs, or (iii) such later date as the Board may
establish as his or her "Eligible Retirement Date."

(e) "Retirement" shall mean any termination of service of an Independent
Board Member except any termination which the Board determines to have resulted
from the Independent Board Member's willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of the
office of Independent Board Member.

(f) "Benefit" shall mean with respect to any Eligible Board Member, (i) the
Regular Benefit, unless the Alternate Benefit has been elected or the Early
Benefit granted, (ii) the Alternate Benefit, if elected by such Eligible Board
Member, unless the Early Benefit has been granted, or (iii) the Early Benefit,
if granted by the Board.

(g) "Eligible Compensation" shall mean, with respect to any Eligible Board
Member of any Adopting Fund, an amount equal to one-fifth of the total
compensation, inclusive of compensation as a member of the Board or of a Board
Committee or as chairperson of a Board Committee, earned by such Eligible Board
Member for Eligible Service with respect to such Adopting Fund (other than under
this Plan) in the five year period prior to the date of his or her Retirement.

(h) "Actuarial Equivalent" shall mean an actuarially equivalent benefit, as
computed by the Board with the advice of an enrolled actuary (as defined in the
Employee Retirement Income Security Act of 1974, as amended ["ERISA"]), using
assumptions determined by the Board at the time of the computation.

(i) "Board" shall mean, with respect to any Adopting Fund, the Board of
Directors or Trustee or "directors," (as such term is defined in Section
2(a)(12) of the Act, of such Adopting Fund.

(j) "Adoption Date" shall mean February 21, 1991.

<PAGE>

2. ELIGIBILITY

Each Eligible Board Member will be eligible to receive a Benefit from each
Adopting Fund commencing on such Eligible Board Member's Eligible Retirement
Date.

3. RETIREMENT DATE; AMOUNT OF BENEFIT

(a) Retirement. Each Independent Board Member will retire not later than
his or her Eligible Retirement Date. The foregoing provision shall be deemed by
the adoption of this Plan by any Fund to be an amendment of such Fund's by-laws
superseding any provision therein that an Independent Board Member shall serve
until his or her successor shall have been elected and qualified.
Notwithstanding the foregoing, the Board of any Adopting Fund may, to avoid the
simultaneous retirement of more than one of the Independent Board Members or for
any other appropriate reason, waive the obligation of any Independent Board
Member to retire on such date and may establish a later date as his or her
"Eligible Retirement Date." Any establishment of an Eligible Retirement Date may
be further extended by the Board.

(b) Regular Retirement Benefit. Upon Retirement, each Eligible Board Member
will receive, commencing as of such Eligible Board Member's Eligible Retirement
Date and continuing for the remainder of the Eligible Board Member's life, from
each Adopting Fund a retirement benefit (the "Regular Benefit") paid at an
annual rate equal to the percentage of his or her Eligible Compensation
established by resolution of the Board of such Adopting Fund most recently
adopted prior to the date of his or her retirement (the "Most Recent
Resolution") as the "Minimum Percentage," PLUS an additional percentage of such
Eligible Compensation for each full month of Eligible Service for any of the
Adopting Funds in excess of five years established by the Most Recent Resolution
as the "Monthly Additional Percentage," up to the percentage established by the
Most Recent Resolution as the "Maximum Percentage" of such Eligible Compensation
for ten or more years of Eligible Service for any of the Adopting Funds.

(c) Election of Alternate Payment of Benefit. Each Independent Board Member
shall have the option, exercisable at any time, and revisable at any time and
from time to time, prior to his or her first acceptance of benefits under the
Plan to elect (i) to receive, subject to being or becoming an Eligible Board
Member, a retirement benefit (the "Alternate Benefit") based upon the combined
life expectancy of such Eligible Board Member and his or her spouse on the date
of such Eligible Board Member's Retirement (rather than solely upon such
Eligible Board Member's own life, as shall be the case unless such Eligible
Board Member shall otherwise elect as provided in this Section 3(c)), and (ii)
if the Independent Board Member elects to receive the Alternate Benefit, to
elect a benefit either (x) to the last survivor of the Eligible Board Member or
spouse, whether the Eligible Board Member or spouse is the last survivor (a
"joint and last survivor" benefit) or (y) to the Eligible Board Member's spouse
if the spouse survives the Eligible Board Member (a "joint and contingent
survivor" benefit) equal in periodic amount to a percentage (the "Designated
Survivor's Percentage") of the periodic amount that would be, or would be
assumed to be, in effect while both the Eligible Board Member and spouse were
alive. The Designated Survivor's Percentage shall be the percentage stated in
the most recently delivered notice of election given by such Independent Board
Member, or, if no percentage is stated in any such notice, 100%. Payment of the
Alternate Benefit shall commence on the later of such Eligible Board Member's
Eligible Retirement Date or the date of his or her Retirement, shall be reduced
to the Designated Survivor's Percentage (if less than 100%) upon the earlier of
the deceases of the Eligible Board Member and spouse in the case of a joint and
last survivor benefit, or of the Eligible Board Member in the case of a joint
and contingent survivor benefit, and shall be payable through the remainder of
the life of the survivor of such Eligible Board Member and spouse. The Alternate
Benefit shall be the Actuarial Equivalent of the Regular Benefit provided under
paragraph 3(b). In the event of the death of an Eligible Board Member who has
chosen the Alternate Benefit prior to such Eligible Board Member's Retirement,
his or her spouse shall be entitled to a retirement benefit, commencing upon
such death, which shall be the Actuarial Equivalent of the benefit such spouse
would have received had such Eligible Board Member died on his or her Eligible
Retirement Date.

<PAGE>

(d) Early Payment of Benefit. An Eligible Board Member for good cause may
apply to the Board of any Adopting Fund for, and, at the discretion of such
Board, may be granted, a retirement benefit (the "Early Benefit") which is the
Actuarial Equivalent of the Regular Benefit or Alternate Benefit previously
elected by such Eligible Board Member. Payment of the Early Benefit shall
commence on a date fixed by the Board in its sole discretion as such Eligible
Board Member's Eligible Retirement Date and shall be payable through the
remainder of such Eligible Board Member's life, or, if the Alternate Benefit had
been elected, the later of the lives of such Eligible Board Member and spouse.
Good cause for these purposes may include (but is not limited to) the permanent
disability of the Eligible Board Member.

(e) Anything contained herein to the contrary notwithstanding, upon the
adoption by an Adopting Fund of a plan of liquidation, such Adopting Fund shall
pay to each Eligible Board Member who has retired, in lieu of his or her Benefit
from such Adopting Fund, an amount (the "Lump Sum") equal to the then present
value of the Benefit, using a discount rate determined by the Board at the time
of the computation. The Lump Sum shall be paid by such Adopting Fund at or
before the final liquidation and dissolution of such Adopting Fund.

4. TIME OF PAYMENT

The Benefit to each Eligible Board Member or his or her spouse will, except
as provided in Section 3(c), 3(d) or 3(e) hereof, commence on such Eligible
Board Member's Eligible Retirement Date and will be paid each year in quarterly
installments that are as nearly equal as possible on the first day of each
calendar quarter.

5. PAYMENT OF BENEFIT; ALLOCATION OF COSTS

Each Adopting Fund is responsible for the payment of Benefits based upon
Eligible Compensation from such Adopting Fund, as well as its proportionate
share of all expenses of administration of the Plan, including without
limitation all accounting and legal fees and expenses and fees and expenses of
any enrolled actuary. The obligations of each Adopting Fund to pay such benefits
and expenses will not be secured or funded in any manner, and such obligations
will not have any preference over the lawful claims of the Adopting Funds'
creditors and stockholders, shareholders, beneficiaries or limited partners, as
the case may be. To the extent that an Adopting Fund consists of one or more
separate portfolios, such costs and expenses will be allocated among such
portfolios in the proportion that compensation of Independent Board Members is
allocated among such portfolios.

6. ADMINISTRATION

(a) Administration. Any question involving entitlement to payments under or
the administration of the Plan will be referred to the Board, which shall make
all interpretations and determinations necessary or desirable for the Plan's
administration (such interpretations and determinations to be final and
conclusive) and shall cause such records to be kept as may be necessary for the
administration of the Plan.

7. MISCELLANEOUS

(a) Rights Not Assignable. The right to receive any payment under the Plan
is not transferable or assignable. Except as otherwise provided herein with
respect to the Alternate Benefit, the Plan shall not create any benefit, cause
of action, right of sale, transfer, assignment, pledge, encumbrance, or other
such right in any spouse or heirs or the estate of any Eligible Board Member or
retired Eligible Board Member.

(b) Amendment, etc. With respect to each Adopting Fund, the Board,
including a majority of the Independent Board Members of such Board, may at any
time amend or terminate the Plan or waive any provision of the Plan, PROVIDED,
that except as otherwise provided herein, no amendment, termination or waiver
will impair the rights of an Independent Board Member to receive upon Retirement
the payments which would have been made to such Independent Board Member had
there been no such amendment, termination or waiver (based upon such Board
Member's Eligible Service to the date of such amendment, termination or waiver)
or the rights of a retired Eligible Board Member to receive any Benefit due
under the Plan, without the consent of such Independent Board Member or Eligible
Board Member. Notwithstanding any provision to the contrary, the Board, with the
concurrence of a majority of the Independent Board Members of such Board and
without the consent of any individual Independent

<PAGE>

Board Member, may at any time (i) amend or terminate the Plan to comply with any
applicable provision of law or any rule or regulation adopted, or proposed to be
adopted, by any governmental agency or any decision of any court or
administrative agency, (ii) change any assumptions used to determine what
benefit may be an Actuarial Equivalent, or (iii) terminate the Plan of an
Adopting Fund (an "Acquired Adopting Fund") substantially all the assets of
which are acquired by an entity which is itself an Adopting Fund (the "Acquiring
Adopting Fund") pursuant to a plan of reorganization between the Acquired
Adopting Fund and the Acquiring Adopting Fund (the "Reorganization Plan"), such
termination to be deemed approved upon adoption of the Reorganization Plan and
to be effective upon the effectiveness of the reorganization contemplated
thereby without liability or further obligation for any benefits accrued or
otherwise payable to an Independent Board Member by the Acquired Adopting Fund.

(c) No Right to Reelection. Nothing in the Plan will create any obligation
on the part of the Board to nominate any Independent Board Member for
reelection.

(d) Vacancies. Although the Board will retain the right to increase or
decrease its size, it shall be the general policy to replace each retired
Independent Board Member by selecting a new Independent Board Member from
candidates recommended by the remaining Independent Board Members.

(e) Consulting. Each retired Eligible Board Member may render such services
for any of the Adopting Funds, for such compensation, as may be agreed upon from
time to time by such retired Eligible Board Member and the Board.

(f) Effectiveness. The Plan will be effective for all Independent Board
Members who have dates of Retirement occurring on or after the Adoption Date.
Periods of Eligible Service shall include periods commencing prior to such date.

4
<PAGE>

SCHEDULE A

MORGAN STANLEY DEAN WITTER FUNDS:
FUNDS THAT HAVE ADOPTED THE RETIREMENT PLAN
FOR NON-INTERESTED TRUSTEES OR DIRECTORS

MARCH 1999

1. Active Assets California Tax-Free Trust
2. Active Assets Government Securities Trust
3. Active Assets Money Trust
4. Active Assets Tax-Free Trust
5. Morgan Stanley Dean Witter American Value Fund
6. Morgan Stanley Dean Witter California Insured Municipal Income Trust
7. Morgan Stanley Dean Witter California Quality Municipal Securities
8. Morgan Stanley Dean Witter California Tax-Free Daily Income Trust
9. Morgan Stanley Dean Witter California Tax-Free Income Fund
10. Morgan Stanley Dean Witter Capital Growth Securities
11. Morgan Stanley Dean Witter Convertible Securities Trust
12. Morgan Stanley Dean Witter Developing Growth Securities Trust
13. Morgan Stanley Dean Witter Diversified Income Trust
14. Morgan Stanley Dean Witter Dividend Growth Securities Inc.
15. Morgan Stanley Dean Witter European Growth Fund Inc.
16. Morgan Stanley Dean Witter Federal Securities Trust
17. Morgan Stanley Dean Witter Global Dividend Growth Securities
18. Morgan Stanley Dean Witter Government Income Trust
19. Morgan Stanley Dean Witter Health Sciences Trust
20. Morgan Stanley Dean Witter High Income Advantage Trust
21. Morgan Stanley Dean Witter High Income Advantage Trust II
22. Morgan Stanley Dean Witter High Yield Securities Inc.
23. Morgan Stanley Dean Witter Income Securities Inc.
24. Morgan Stanley Dean Witter Insured Municipal Bond Trust
25. Morgan Stanley Dean Witter Insured Municipal Income Trust
26. Morgan Stanley Dean Witter Insured Municipal Securities
27. Morgan Stanley Dean Witter Insured Municipal Trust
28. Morgan Stanley Dean Witter Intermediate Income Securities
29. Morgan Stanley Dean Witter Limited Term Municipal Trust
30. Morgan Stanley Dean Witter Liquid Asset Fund Inc.
31. Morgan Stanley Dean Witter Multi-State Municipal Series Trust
32. Morgan Stanley Dean Witter Municipal Income Opportunities Trust
33. Morgan Stanley Dean Witter Municipal Income Opportunities Trust II
34. Morgan Stanley Dean Witter Municipal Income Opportunities Trust III
35. Morgan Stanley Dean Witter Municipal Income Trust
36. Morgan Stanley Dean Witter Municipal Income Trust II
37. Morgan Stanley Dean Witter Municipal Premium Income Trust
38. Morgan Stanley Dean Witter Natural Resource Development Securities Inc.
39. Morgan Stanley Dean Witter New York Municipal Money Market Trust
40. Morgan Stanley Dean Witter New York Tax-Free Income Fund
41. Morgan Stanley Dean Witter Pacific Growth Fund Inc.
42. Morgan Stanley Dean Witter Prime Income Trust
43. Morgan Stanley Dean Witter Quality Municipal Income Trust

<PAGE>

44. Morgan Stanley Dean Witter Quality Municipal Investment Trust
45. Morgan Stanley Dean Witter Quality Municipal Securities
46. Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust
47. Morgan Stanley Dean Witter Strategist Fund
48. Morgan Stanley Dean Witter Tax-Exempt Securities Trust
49. Morgan Stanley Dean Witter Tax-Free Daily Income Trust
50. Morgan Stanley Dean Witter U.S. Government Money Market Trust
51. Morgan Stanley Dean Witter U.S. Government Securities Trust
52. Morgan Stanley Dean Witter Utilities Fund
53. Morgan Stanley Dean Witter Value-Added Market Series
54. Morgan Stanley Dean Witter Variable Investment Series
55. Morgan Stanley Dean Witter World Wide Income Trust

<PAGE>

DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST

March 3, 1983

Dean Witter Developing
Growth Securities Trust
One World Trade Center
New York, New York 10048

Dear Sirs:

With respect to the Registration Statement on Form N-1 (File No. 2-81151)
(the "Registration Statement") filed by Dean Witter Developing Growth Securities
Trust, a Massachusetts business trust (the "Trust"), with the Securities and
Exchange Commission for the purpose of registering under the Securities Act of
1933, as amended, an indefinite number of shares of beneficial interest of no
par value of the Trust (the "Shares"), I, as your counsel, have examined such
Trust records, certificates and other documents and reviewed such questions of
law as I have considered necessary or appropriate for the purposes of this
opinion, and on the basis of such examination and review, I advise you that, in
my opinion, proper trust proceedings have been taken by the Trust so that the
Shares have been validly authorized; and when the shares have been issued and
sold in accordance with the terms of the Underwriting and Distribution
Agreements referred to in the Registration Statement, the Shares will be validly
issued, fully paid and non-assessable.

I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the caption "Validity of
Shares" in the Prospectus forming a part of the Registration Statement. In
giving this consent, I do not thereby admit that I am within the category of
persons whose consent is required under Section 7 of the Securities and Exchange
Act of 1933, as amended, or the rules and regulations of the Securities and
Exchange Commission thereunder.

Very truly yours,
/s/Sheldon Curtis
- -----------------
Sheldon Curtis
General Counsel

<PAGE>
[Gaston Snow & Ely Bartlett Letterhead]

March 2, 1983

Senior Vice President
Dean Witter Reynolds Iintercapital, Inc.
Five World Trade Center
New York, NY 10048

Gentlemen:

Dean Witter Developing Growth Securities Trust (the "Trust") is a trust
created under the name "Dean Witter Emerging Growth Securities Trust" by a
written Declaration of Trust dated December 28, 1982 and finally executed in
Boston on that date (the "Trust Agreement"), which Trust Agreement was amended
by an amendment dated January 11, 1983 and filed January 12, 1983 which changed
the name of the Trust to "Dean Witter Developing Growth Securities Trust."

The Trustees have the powers set forth in the Trust Agreement, subject to
the terms, provisions and conditions therein provided.

We have acted as special Massachusetts counsel for the Trust with respect
to organization of the Trust and in such capacity we are furnishing you this
opinion.

We have examined originals and copies, certified or otherwise identified to
our satisfaction, of such certificates, records and other documents as we have
deemed necessary or appropriate for the purpose of this opinion, including the
Trust Agreement, and the amendment thereto. We have caused copies of the Trust
Agreement, and the amendment thereto, to be duly filed with the Secretary of the
Commonwealth of Massachusetts and the City Clerk of the City of Boston. All
filing requirements (other than the filing requirements of the Massachusetts
Uniform

<PAGE>

GASTON SNOW & ELY BARTLETT

Sheldon Curtis, Esq.
Senior Vice President
Dean Witter Reynolds Intercapital, Inc.
March 2, 1983
Page 2

Securities Act) under the laws of Massachusetts have been complied with.

Under Article VI, Section 6.1 of the Trust Agreement, as amended, the
beneficial interest in the Trust is represented by an unlimited number of
transferable shares without par value. Under Article VI, Section 6.4, of the
Trust Agreement, as amended, the Trustees are empowered in their discretion to
issue shares of beneficial interest to such party or parties and for such amount
and type of consideration, including cash or property, at such time or times and
on such terms as the Trustees may deem best.

Based upon the foregoing, and with respect to Massachusetts law (other than
the Massachusetts Uniform Securities Act as to which we have not been asked to
express any opinion) only to the extent that Massachusetts law may be applicable
and without reference to the laws of the other several states or of the United
States of America, we are of the opinion that, under existing law:

1. The Trust is a trust with transferable shares of beneficial interest,
organized in compliance with the laws of the Commonwealth of
Massachusetts.

2. The Trust Agreement is legal and valid.

3. Shares of beneficial interest, when issued from time to time in
accordance with the Trust Agreement, as amended, upon receipt by the
Trust of payment in compliance with Section 6.4 of Article VI of the
Trust Agreement, as amended, will be legally and validly issued and
such shares when so issued will be fully paid and nonassessable by the
Trust.

We understand that you will rely on this opinion in order to prepare an
opinion to the Trust, which opinion will be filed with the Securities and
Exchange Commission and will refer to this opinion and to us in such
opinion. We hereby consent to such use of and reference to this opinion and
to such reference to us.

Very truly yours,
/s/ Gaston Snow & Ely Bartlett
------------------------------
Gaston Snow & Ely Bartlett