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MORGAN STANLEY DEAN WITTER
VARIABLE INVESTMENT SERIES
SEMI-ANNUAL REPORT
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JUNE 30, 2000
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MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
TABLE OF CONTENTS
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<S> <C>
Letter to the Shareholders.................................. 1
Fund Performance............................................ 15
Portfolio of Investments:
Money Market............................................ 16
Short-Term Bond......................................... 19
Quality Income Plus..................................... 21
High Yield.............................................. 27
Utilities............................................... 35
Income Builder.......................................... 37
Dividend Growth......................................... 40
Capital Growth.......................................... 43
Global Dividend Growth.................................. 46
European Growth......................................... 52
Pacific Growth.......................................... 56
Equity.................................................. 63
S&P 500 Index........................................... 67
Competitive Edge "Best Ideas"........................... 77
Aggressive Equity....................................... 80
Strategist.............................................. 84
Financial Statements:
Statement of Assets and Liabilities..................... 90
Statement of Operations................................. 93
Statement of Changes in Net Assets...................... 96
Notes to Financial Statements............................... 108
Financial Highlights........................................ 120
Change in Independent Accountants........................... 128
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MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT TWO WORLD TRADE CENTER,
SERIES NEW YORK, NEW YORK 10048
LETTER TO THE SHAREHOLDERS JUNE 30, 2000
DEAR SHAREHOLDER:
The six-month period ended June 30, 2000 continued to be dominated by volatile
return trends for long-dated financial assets around the globe. While
large-capitalization growth stocks continued to outperform most other asset
classes over the entire period, the recent leadership sectors -- technology,
media and telecommunications -- also evidenced the greatest price swings as
sustainable earnings growth became the investment community's main focus. Health
care, especially pharmaceuticals and biotechnology, also came to life late in
the second quarter, providing strong performance.
Strong economic growth and mounting inflationary pressures prompted the Federal
Reserve Board to continue on its path of tight monetary policy by raising the
federal funds rate 100 basis points over three steps, to 6.50 percent.
Short-term interest rates rose 70 basis points, to 6.91 percent, before dropping
in June and ending the period at 6.36 percent. The effect of these increases was
less pronounced for long-term Treasuries, which benefited from a federal
government program of buying back outstanding debt. The subsequent reduction in
the supply of long-term Treasuries resulted in an inverted yield curve, where
short-term Treasury yields were higher than those of longer-term Treasuries. By
May, signs of more moderate economic growth appeared and the fixed-income market
rallied on hopes that the Fed's rate tightening might be nearing its end.
INTERNATIONAL OVERVIEW
During the six-month period under review, European stock markets reflected
events in the U.S. stock market. January was an uncertain month for share prices
as investors waited for a Y2K fallout, but February saw strong gains in European
stock markets when these fears proved unfounded. European markets peaked in
early March and, mirroring falls in the Nasdaq market, traded flat to down in
May and June. New-economy sectors such as technology, telecommunications and
media were strong until an early March correction. However, as the valuation
differential between these sectors and old-economy
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MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
LETTER TO THE SHAREHOLDERS JUNE 30, 2000, CONTINUED
stocks became overextended, investors preferred to switch funds into more
reasonably valued areas of the market such as consumer durables and
pharmaceuticals.
Japan has recently endured several noteworthy setbacks: its economy dipped back
into recession late last year, many Japanese companies are struggling to compete
in the fast-changing global economy, government debt continues to rise and an
unanticipated transfer of power to a new prime minister has created political
uncertainty. Despite these stumbling blocks, however, Japan's equity market has
continued to perform very well. Business sentiment among Japan's corporate
leaders is also improving, lending credence to the improved economic optimism
among global investors and the hope for a self-sustaining economic recovery.
More than one strategist is drawing a parallel of Japan today with the U.S. in
1991 and 1992. The argument centers around evidence that corporations are
aggressively restructuring, reducing their head count in order to improve
profits in light of minimal revenue growth.
The positive economic conditions experienced by emerging Asian countries in 1999
continued into 2000. Asia is believed likely to post reasonable trade surpluses
in 2000 for the third consecutive year as exports continue to grow, aided by
long-term trends in the outsourcing of semiconductor, computer and
telecommunications equipment manufacturing. With overall consumer sentiment
positive, Asia's export-led recovery is being supplemented by growth in domestic
consumption. Economic and earnings growth numbers are surprisingly high,
especially in North Asian economies, and the consensus overall growth outlook
for 2000 has been upgraded.
CLASSES OF SHARES
On June 6, 2000, Morgan Stanley Dean Witter Variable Investment Series began
offering Class Y shares of each Portfolio. All shares issued prior to May 1,
2000 were designated Class X shares. The performance figures shown below for
each Portfolio are for its Class X shares. For each Portfolio, the Class Y
shares' performance will vary somewhat from that of the Class X shares because
of differing expenses.
AGGRESSIVE EQUITY PORTFOLIO
For the six-month period ended June 30, 2000, the Aggressive Equity Portfolio
posted a return of 3.13 percent, compared to -0.43 percent for the Standard &
Poor's 500 Stock Index (S&P 500).(1)
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(1) The Standard & Poor's 500 Stock Index (S&P 500) is a broad-based index the
performance of which is based on the performance of 500 widely held common
stocks chosen for market size, liquidity and industry representation. The
performance of the index does not include any expenses, fees or charges.
The index is unmanaged and should not be considered an investment.
2
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MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
LETTER TO THE SHAREHOLDERS JUNE 30, 2000, CONTINUED
The Portfolio began the year with a significant emphasis on technology and
biotechnology. Then, with the signal from the Federal Reserve that they were
going to move to restrain the pace of economic growth by lifting interest rates,
we began to adjust our portfolio weightings. First we eliminated any highly
valued issues that were not currently profitable. Next we reduced our overall
exposure to technology stocks. We significantly peeled back the technology
groups that were most economically sensitive, such as semiconductors and
semiconductor equipment. We added to the health-care sector with the purchase of
drug, generics, specialty pharmacy and health-care services groups. Financials
were also added, given our view that interest rates would fall in the face of a
decelerating economy. Brokers and insurance group holdings were increased. We
also purchased select consumer staples.
As the Portfolio enters the second half of its fiscal year, many consumer,
industrial and monetary indicators are signaling that the economy has begun to
slow. In addition, many important measures of inflation have begun to reverse,
suggesting that the Federal Reserve appears to have successfully engineered a
soft landing. During similar periods the markets have responded quite favorably,
with groups such as health care, technology, financials and consumer staples
assuming market leadership. We believe that the Portfolio is well positioned to
benefit from this outlook.
CAPITAL GROWTH PORTFOLIO
For the six-month period ended June 30, 2000, the Capital Growth Portfolio
produced a total return of 3.30 percent versus -0.43 percent for the S&P 500.
The Portfolio continued to invest in companies across the market-capitalization
spectrum as well as all major sectors of the S&P 500. During the period the
Portfolio decreased its long-standing overweighting in technology, because of
dramatic price increases and valuation levels that we believed were
unsustainable. Toward the end of the period, the Portfolio began to move assets
marginally back into this sector. Monies flowed out of technology and consumer
stocks into capital goods and energy. The Portfolio also added to its health
care and financial services holdings.
During the recent period of market turbulence the Portfolio's managers
diversified its holdings among both growth and value issues. We shifted from a
very definitive growth bias, which the Portfolio maintained at the beginning of
the fiscal year, to a more neutral positioning. We expect to maintain this
posture until the full extent of the Federal Reserve Board's actions can be
reasonably ascertained.
The Portfolio's ten largest holdings on June 30 were Microsoft, Millipore,
Viacom, Intel, Citigroup, BP Amoco, Pfizer, Integrated Device Technology, Oracle
and Cisco Systems.
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MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
LETTER TO THE SHAREHOLDERS JUNE 30, 2000, CONTINUED
COMPETITIVE EDGE -- "BEST IDEAS" PORTFOLIO
For the six-month period ended June 30, 2000, the Competitive Edge -- "Best
Ideas" Portfolio posted a total return of -2.78 percent versus -2.56 percent for
the Morgan Stanley Capital International (MSCI) World Index.(2)
The Portfolio invests primarily in stocks compiled by the Morgan Stanley Dean
Witter Equity Research department which they believe demonstrate a long-term
sustainable "competitive edge" versus other players in the global arena. As of
June 30, 2000, approximately 99 percent of the Portfolio's assets were invested
in 40 equity positions throughout the world. The remaining 1 percent was held in
U.S. dollars. Equity holdings in the United States accounted for nearly 57
percent of the Portfolio's assets, with the remainder diversified among 10 other
countries. In descending order beginning with the largest exposure, these were
Japan, France, the United Kingdom, Finland, Sweden, the Netherlands, Mexico,
Switzerland, Australia and Germany.
Among the Portfolio's largest equity holdings were Exodus Communications
(Internet services), Wal-Mart Stores (discount chains) and General Electric
(multi-sector companies) in the United States, Shin-Etsu Chemical (specialty
chemicals) and Tokyo Electron (electronic production equipment) in Japan, Diageo
PLC (alcoholic beverages) in the United Kingdom and UPM-Kymmene (paper) in
Finland.
DIVIDEND GROWTH PORTFOLIO
For the six-month period ended June 30, 2000, the Dividend Growth Portfolio
posted a total return of -9.03 percent versus -0.43 percent for the S&P 500.
The Portfolio's underperformance relative to the S&P 500 was largely caused by
its underexposure to high-technology stocks. Because most technology stocks
generally pay little if any dividends, they do not make up a large portion of
the Portfolio. Instead, the Portfolio's screening process has led to its being
overweighted in basic materials, capital goods and utilities, which enjoy strong
cash flows and attractive dividend yields. The Fund's emphasis on these sectors
impeded its performance during the period, because these stocks significantly
underperformed growth stocks.
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(2) The Morgan Stanley Capital International (MSCI) World Index measures the
performance of a diverse range of global stock markets within the United
States, Europe, Australia, New Zealand and the Far East. The performance of
the index is listed in U.S. dollars and assumes reinvestment of net
dividends. "Net dividends" reflects a reduction in dividends after taking
into account withholding of taxes by certain foreign countries represented
in the index. The index does not take into account any expenses, fees or
charges. The index is unmanaged and should not be considered an investment.
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MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
LETTER TO THE SHAREHOLDERS JUNE 30, 2000, CONTINUED
Since late last year, the Portfolio's equity component has shifted its emphasis
toward traditional companies that have made serious commitments to e-commerce.
Portfolio transactions during the period included a reallocation of assets to
reflect a more accurate use of the dividend growth discipline. As a result,
holdings in 14 companies were liquidated and a position in Electronic Data
Systems was initiated. At the end of the period, the Portfolio was invested in
80 common stocks spread among 41 different industry groups.
EQUITY PORTFOLIO
For the six-month period ended June 30, 2000, the Equity Portfolio posted a
total return of -6.67 percent versus -0.43 percent for the S&P 500.
The Portfolio's performance lagged that of its benchmark because of its exposure
to high-growth stocks in the technology and biotechnology sectors that were
particularly hard hit during a rapid rotation to value stocks that occurred in
April and May. This rotation was partly driven by concerns that the Department
of Justice's case against Microsoft and the Clinton/Blair comments regarding
genomics would hinder growth in these two industries. It was also driven by
signs that an overheating U.S. economy would lead to tightening by the Federal
Reserve. Since then, interest-rate increases by the Fed have begun to slow
growth and inflation. We are now expecting a slower growth rate through 2001
than that experienced during the first half of 2000. Consequently, we have
increased the Fund's exposure to steady growth groups that should outperform in
this environment, including health care, financials and, to some degree,
consumer staples. In addition, we have reduced our exposure to cyclical areas
such as technology, including semiconductors.
EUROPEAN GROWTH PORTFOLIO
For the six-month period ended June 30, 2000, the European Growth Portfolio
produced a total return of 0.14 percent versus -2.56 percent for the MSCI World
Index.
Corporate earnings results in Europe for the first quarter of 2000 were on the
whole in line with estimates. Several companies reported first-quarter earnings
substantially in excess of consensus estimates, including Koninklijke Philips
Electronics, Adecco S.A. and Alcatel, all of which are held by the Portfolio.
The outlook for corporate profitability remains positive, given the benign
economic environment. Europe is experiencing low interest rates by historic
standards as well as strong GDP growth and a competitive exchange rate. Morgan
Stanley Dean Witter Investment Management Inc., the Portfolio's sub-advisor, is
currently awaiting second-quarter results from all the companies held in the
Portfolio and expect that they will continue to reflect this positive backdrop.
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MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
LETTER TO THE SHAREHOLDERS JUNE 30, 2000, CONTINUED
The Portfolio continues to emphasize mid- and large-capitalization growth
stocks. Its stock selection process is driven by stock-specific considerations
rather than a top-down approach. In 1999 this process gave rise to significant
weightings in the technology, media, telecommunications and software sectors,
which bolstered the Portfolio's performance this January and February. Then, as
shares moved ahead of price targets, some of these holdings were sold and the
proceeds were moved into more defensive areas of the stock market, including
pharmaceuticals and consumer goods. This action cushioned investment returns
when the market faltered during the latter part of the period under review. At
the end of June, the Portfolio's regional weightings were the eurozone 44.0
percent, the United Kingdom 33.0 percent, Sweden 10.5 percent and Switzerland
10.3 percent. The remaining 2.2 percent was invested in cash and other assets.
GLOBAL DIVIDEND GROWTH PORTFOLIO
For the six-month period ended June 30, 2000, the Global Dividend Growth
Portfolio produced a total return of -5.64 percent versus -2.56 percent for the
MSCI World Index.
Because most technology stocks generally pay little if any dividends, they do
not make up a large portion of the Portfolio. The Portfolio's technology
holdings have included established companies like IBM, Intel and Hewlett-Packard
rather than the more speculative dot-com startups. With more and more Internet
companies entering existing markets and challenging the incumbent players, the
Internet clearly has tremendous potential to change the competitive landscape of
most industries. We believe that the long-term beneficiaries of this trend are
likely to be the incumbent industry players that embrace the Internet to enhance
their competitive advantage. In addition to the usual comprehensive, rigorous
analysis that has always driven our stock selection process, the Portfolio has
shifted its emphasis toward traditional companies that have made serious
commitments to e-commerce.
In the coming years, we fully expect the U.S. equity market's returns to be
lower than those of the last five years, because the anticipated stellar
performance of the economy and corporate profits seem fully priced into the U.S.
market, as evidenced by record high valuations. The Portfolio remains committed
to the more attractively valued sectors of the market, where expectations seem
much more realistic. We are currently targeting 31.2 percent of the Portfolio's
net assets toward U.S. equity investments versus a 49.2 percent weighting for
the United States in the MSCI World Index.
Hong Kong is the only Asian market outside Japan to which the Portfolio has
exposure. The Portfolio is currently targeting 2.0 percent of net assets toward
Hong Kong investments, versus the MSCI
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MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
LETTER TO THE SHAREHOLDERS JUNE 30, 2000, CONTINUED
World Index's 1.0 percent weighting in Hong Kong. At current prices, much of
Asia's recovery seems well discounted, but we remain optimistic about further
strength in economic activity, corporate profits and thus share prices.
Despite the Portfolio's limited exposure to technology and telecommunications,
our overweighted stance in Europe has been rewarding. We are currently targeting
33.0 percent of the Portfolio's net assets toward continental European markets
and 11.2 percent toward the United Kingdom, versus those regions' weightings of
18.2 percent and 9.8 percent, respectively, in the MSCI World Index. Overall, we
remain very optimistic about the long-term prospects for the Portfolio's U.K.
and European holdings.
We are currently targeting 2.5 percent of assets to each Canada and Australia,
representing a slight overweighting versus the MSCI World Index. As global
economic growth persists we believe that demand for some of the natural
resources produced in these countries should remain high, providing support for
both their currencies and their equity markets.
HIGH YIELD PORTFOLIO
For the six-month period ended June 30, 2000, the High Yield Portfolio posted a
total return of -3.21 percent versus -1.21 percent for the Lehman Brothers High
Yield Index.(3)
The high-yield market continued to experience difficulty during the period.
Investor concerns about sharply rising interest rates, credit-tightening actions
by the Federal Reserve Board, the looming threat of inflation and uncertainty
over the Y2K bug's potential effects adversely affected all the fixed-income
markets during 1999 and the first four months of 2000. On the positive side, as
a result of the extended weakness in the high-yield market, yields on
lower-rated corporate bonds are now at their highest levels in nearly a decade.
Today, high-yield bonds are providing an unusually large yield advantage over
Treasuries. Historically, abnormally high yield advantages have signaled a
turning point in the high-yield market, eventually resulting in strong total
returns as bond prices recovered.
The high-yield market's woes have taken the worst toll on the B-rated sector,
the market's largest area. Although the Portfolio's position in the more
defensive, higher-quality end of the market held up relatively well during the
turbulent market environment, its long-term core position in the B-rated sector
was adversely affected. However, with yields on B-rated issues at 10-year highs
and
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(3) The Lehman Brothers High Yield Index tracks the performance of all
below-investment-grade securities that have at least $100 million in
outstanding issuance, are greater than one year to maturity and are issued
in fixed-rate U.S. dollar denominations. The index does not include any
expenses, fees or charges. The index is unmanaged and should not be
considered an investment.
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MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
LETTER TO THE SHAREHOLDERS JUNE 30, 2000, CONTINUED
many issues trading at significant discounts to their stated maturity value, we
view the B-rated sector as extremely undervalued. In light of our positive
long-term outlook, we are maintaining our focus on this large sector of the
market, which we believe offers strong long-term total return potential.
From an industry perspective, we presently view the telecommunications sector as
an excellent investment opportunity, given the overwhelming trend toward
providing expanded worldwide telecommunications services. Included among the
Portfolio's current holdings are a number of telecommunications companies that
recently have either announced important strategic partnerships or have raised
equity capital to fuel future growth and profits.
INCOME BUILDER PORTFOLIO
For the six-month period ended June 30, 2000, the Income Builder Portfolio
posted a total return of -4.10 percent versus -0.43 percent for the S&P 500.
The Portfolio's underperformance relative to its benchmark index can be
attributed largely to its lack of exposure to technology stocks, which generally
pay little if any dividends. Because the Portfolio's primary objective is
providing reasonable current income, these stocks are typically not included
among its holdings.
On June 30, 2000, the Portfolio's large-cap stock segment was relatively fully
invested, as it has been since its inception. Portfolio transactions during the
period included the sale of Air Products, Associates First Capital, SLM Holding
Corp., Tidewater, U.S. Tobacco, Equity One, Meditrust, Crown Cork and Seal,
Jefferson Pilot, Camden Property, JDN Realty, Fluor, Tanger Factory, Arch Coal,
Hercules, Public Service Enterprise Group, General Motors, Limited, USX-US Steel
and Visteon. Purchases included Rockwell, Vornado, Kerr McGee, Florida Power &
Light, Mack Cali and Simon Property.
Real estate investment trusts (REITs) were very strong performers for the
Portfolio in the first six months of 2000. The industry's strong fundamentals
and high-dividend-paying stocks lured investors weary of the effects of Fed
tightenings.
MONEY MARKET PORTFOLIO
As of June 30, 2000, the Money Market Portfolio had net assets of $387 million,
with an average life of 57 days. The Portfolio's annualized net investment
income for the six-month fiscal period ended June 30, 2000, was 5.58 percent,
while its 30-day moving average yield for June was 6.05 percent.
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MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
LETTER TO THE SHAREHOLDERS JUNE 30, 2000, CONTINUED
On June 30, 2000, approximately 79 percent of the Portfolio's assets were
invested in high-quality commercial paper, 16 percent in federal agency
obligations, and the remaining 5 percent in the short-term bank notes and
certificates of deposit of major, financially strong commercial banks.
At the end of the fiscal period under review, approximately 86 percent of the
Portfolio's holdings were due to mature in less than four months. Consequently,
the Portfolio is well positioned for stability of value with a very high degree
of liquidity. We attempt to operate the Portfolio in a conservative style
without the use of derivatives or structured notes that might fluctuate
excessively with changing interest rates. As always, the Portfolio serves as a
useful investment for liquidity, preservation of capital and a yield that
reflects prevailing money market conditions.
PACIFIC GROWTH PORTFOLIO
For the six-month period ended June 30, 2000, the Pacific Growth Portfolio
produced a total return of -6.29 percent compared to -2.56 percent for the MSCI
World Index.
During the first half of 2000, Morgan Stanley Dean Witter Investment Management
Inc., the Portfolio's sub-advisor, increased the Portfolio's exposure to Japan,
based on encouraging signs of economic recovery, including positive trends in
GDP growth, more robust retail consumption and increased spending by
manufacturers on capital expenditures. Within Japan, the sub-advisor is
currently focusing on companies geared to a cyclical recovery, including food,
warehousing, basic materials and similar economically sensitive stocks.
The Portfolio added to its positions in China, where equities have been buoyed
by better-than-expected first-quarter GDP growth and promising economic activity
based on a surge in overseas demand, industrial production and direct investment
data. The strong performance of China Telecom has benefited the Portfolio, and
we believe the company will continue to fare well because of its standing as one
of the largest, fastest-growing wireless companies in the world.
South Korea and Taiwan are among the Portfolio's largest market weights, and the
sub-advisor is encouraged by signs that the benefits of robust exports, strong
GDP growth and global outsourcing trends are not abating. Samsung Electronics,
South Korea's leading manufacturer of semiconductors, telecom equipment, and
consumer electronics, has been one of the largest contributors to the
Portfolio's performance. The Portfolio has also increased its exposure to South
Korean banks, because the sub-advisor believes they should be supported by
strong economic growth, a benign interest-rate environment and improving market
sentiment.
In Taiwan, the Portfolio has added manufacturers of computers and peripheral
products. The sub-advisor believes that companies such as Hon Hai Precision,
Siliconware, UMC and Acer Peripherals
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MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
LETTER TO THE SHAREHOLDERS JUNE 30, 2000, CONTINUED
represent attractively valued opportunities with excellent management, making
them well positioned to gain from the increasing trend toward global outsourcing
in the electronics and semiconductor industries.
Hong Kong, one of the Portfolio's largest country positions, has been benefiting
from better-than-expected GDP growth rates and a supportive interest-rate
environment. Demand is returning to the Hong Kong residential market, boosting
property and banking shares. The Portfolio continues to focus on the diversified
financials, media, telecommunications and property sectors within Hong Kong.
During the period the sub-advisor trimmed the Portfolio's Australian holdings,
which are concentrated in banks, media, metals and mining and telecommunications
stocks, because of its belief that interest rates may be tightened before
year-end. The Portfolio has also reduced its exposure to India, which has been
buoyed by the strong performance of technology, media and telecom stocks.
Although the sub-advisor continues to believe India's market should fare well
over the long term, it is disappointed by the government's lack of
follow-through regarding privatization plans.
QUALITY INCOME PLUS PORTFOLIO
For the six-month period ended June 30, 2000, the Quality Income Plus Portfolio
posted a total return of 3.17 percent versus 3.99 percent for the Lehman
Brothers Aggregate Bond Index.(4)
Against the backdrop of an inverting U.S. Treasury yield curve, a continuing
tightening of monetary policy and strong credit demands, several developments
occurred. First, corporate treasurers issued $177 billion in investment-grade
bonds during the period, in anticipation of higher rates later this year. Once
the yield curve began to invert, long-term corporate bonds underperformed other
asset categories. The Portfolio's focus on long-term corporate bonds thus
hindered its performance for the period but may benefit it going forward.
The Portfolio employed several strategies to take advantage of the unique
fixed-income environment. First, we sold several long-term bonds in the
insurance and financial areas, because those sectors generally underperform
during inverted yield curve environments. This move proved beneficial, in that
this market segment significantly underperformed the general corporate market.
Secondly, as the mortgage market came under pressure during the first quarter,
we sold some corporate notes and
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(4) The Lehman Brothers Aggregate Bond Index tracks the performance of all U.S.
government agency and Treasury securities, investment-grade corporate debt
securities, agency mortgage-backed securities and asset-backed securities,
and commercial mortgage-based securities. The performance of the index does
not include any expenses, fees or charges. The index is unmanaged and
should not be considered an investment.
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MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
LETTER TO THE SHAREHOLDERS JUNE 30, 2000, CONTINUED
used the proceeds to purchase GNMAs. During the second quarter, we sold GNMAs to
purchase AA-rated noncallable corporate 10-year notes, which we expect to
perform well if rates stay near current levels or drift lower.
We remain optimistic that the Fed's strong stance will effectively combat
inflationary pressures and that the real levels of interest rates are
fundamentally and historically attractive. We continue to believe that the
policy of matching long-term investment objectives with similar maturity assets
is the most prudent way to maintain a high level of current income with minimal
credit risk.
S&P 500 INDEX PORTFOLIO
For the six-month period ended June 30, 2000, the S&P 500 Index Portfolio
produced a total return of -0.58 percent compared to -0.43 percent for the S&P
500.
This is the first time the S&P 500 has generated a negative six-month return
since 1994. The majority of stock funds beat the index in the first half of
2000. However, like the index, the average stock fund trailed money market
returns. On a positive note, the S&P 500 held up well versus the widely followed
Nasdaq Composite Index and the Dow Jones Industrial Average, which generated
returns of -2.54 percent and -8.43 percent, respectively.
As of June 30, 2000, the top five positions in the S&P 500 were General Electric
(4.05 percent), Intel (3.45 percent), Cisco (3.41 percent), Microsoft (3.25
percent) and Pfizer (2.33 percent).
After a choppy first half of the year, the bearish sentiment that had
overshadowed the markets seemed to have peaked. Weaker economic data and anemic
inflation numbers have since alleviated fears of significantly higher interest
rates. Continued strength in corporate earnings and optimism that the Fed can
once again orchestrate a soft landing may help propel the S&P 500 back to the
high end of its 52-week trading range.
SHORT-TERM BOND PORTFOLIO
For the six-month period ended June 30, 2000, the Short-Term Bond Portfolio
posted a total return of 2.38 percent, compared to 2.70 percent for the Lehman
Brothers Short (1- to 5-Year) U.S. Credit Grade Debt Index.(5)
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(5) The Lehman Brothers Short (1- to 5-Year) U.S. Credit Index measures
(formerly Lehman Brothers Short [1 to 5 year] Investment Grade Debt Index)
all investment-grade corporate debt securities with maturities of one to
five years. The performance of the index does not include any expenses,
fees or charges. The index is unmanaged and should not be considered an
investment.
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MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
LETTER TO THE SHAREHOLDERS JUNE 30, 2000, CONTINUED
With the consensus outlook favoring higher interest rates as 2000 began, we held
close to 15 percent of the Portfolio's assets in cash reserves through early
March. As the period progressed, we reduced the Portfolio's cash reserves to
purchase U.S. government agency securities and corporate bonds, which were
providing historically attractive yields.
On June 30, one- to three-year corporate bonds made up 11.8 percent of the
Portfolio. Agencies were up to 46.5 percent of the portfolio, from 40.0 percent
on December 31, 1999, while Treasuries, providing the least yield incentive as a
sector, fell to 30.3 percent from nearly 45 percent six months earlier. Cash
reserves reaccumulated in May and June as interest rates fell sharply, spreads
tightened and money markets offered higher yields than longer-maturity
Treasuries. On June 30, cash reserves accounted for just under 12 percent of
investable assets.
With the Federal Reserve likely to hold its monetary policy steady for the
coming months and money market rates outyielding longer Treasuries, there is
little incentive to reduce the Portfolio's cash position. Should attractively
priced corporate bonds become available or agencies again offer an increased
yield incentive relative to Treasuries, they will likely be added to the
Portfolio.
On June 30, 2000, the Portfolio's average duration was 1.13 years, the average
maturity 1.22 years and the average quality rating AA. Including cash reserves,
the average duration and maturity of the Portfolio were 1.08 and 1.0 years,
respectively.
STRATEGIST PORTFOLIO
For the six-month period ended June 30, 2000, the Strategist Portfolio posted a
total return of 0.78 percent versus -0.43 percent for the S&P 500 and 4.18
percent for the Lehman Brothers Government/Credit Index.(6)
During the six-month period ended June 30, 2000, volatility returned in
long-dated financial asset prices, causing both stocks and bonds to trade in
uneven and often unexpected patterns. Generally, equity markets posted negative
returns for the first half of 2000, while bonds provided modestly positive total
returns, as did cash equivalents.
To reflect the rise in equity valuations over the last several months,
especially in the leading sectors of technology and telecommunications, the
Portfolio's equity holdings stood at a neutral weighting of
----------------
(6) The Lehman Brothers Government/Credit Index (formerly Lehman Brothers
Government/Corporate Index) tracks the performance of government and
corporate obligations, including U.S. government agency and U.S. Treasury
securities and corporate and Yankee bonds, with maturities of one to ten
years. The performance of the index does not include any expenses, fees or
charges. The index is unmanaged and should not be considered an investment.
12
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
LETTER TO THE SHAREHOLDERS JUNE 30, 2000, CONTINUED
55 percent of assets, with the bond allocation at an underweighted 20 percent,
while we increased cash reserves to 25 percent.
The equity portion of the Portfolio continues to focus on sectors that we
believe have outstanding earnings growth potential: technology, including
software and telecommunications; health care, with an emphasis on biotechnology;
and energy, including oil services. PE Biosystems (analytic devices), Jabil
Circuits (contract manufacturing), EMC Corporation (data storage) and Pfizer
(health care) were among its largest equity positions on June 30, 2000.
On that date, U.S. government-issued and government agency bonds represented 79
percent of the Portfolio's fixed-income portion, while corporate-issued paper
made up the remaining 21 percent. The Portfolio's average yield was 7.08
percent, its average maturity 9.53 years. Average duration, a measurement of
bond price volatility relative to interest rate movement, was 5.30 years.
UTILITIES PORTFOLIO
For the six-month period ended June 30, 2000, the Utilities Portfolio produced a
total return of -0.08 percent versus -0.43 percent for the S&P 500. The
Portfolio's outperformance relative to the broad market was attributable
primarily to solid performance within its electric power and natural gas
holdings. Select holdings within the Portfolio's telecommunications allocation
also contributed to its overall performance.
During the six-month period under review, the telecommunications sector
continued to benefit from positive global demand. Growth was particularly robust
within the wireless and broadband communications subsectors, which benefited
from accelerated demand for connectivity. The telecommunications infrastructure
sector, which experienced healthy order flow during the period, remains one of
the fastest growing industries worldwide. Within the electric power sector,
share prices appreciated sharply as companies within the sector benefited from
their defensive appeal, attractive relative valuations and strong financial
results. This sector's positive financial performance was driven by excellent
results associated with new-economy growth businesses in addition to surging
electric power usage. The natural gas sector remained fundamentally strong and
continued to benefit from robust profitability, favorable supply/demand dynamics
and a firm pricing environment. The sector's performance was further bolstered
by strong growth in diversified operations, which provided a nice complement to
core business results.
On June 30, 2000, 88 percent of the Portfolio's net assets were allocated to
utility and utility-related equities. Within this equity component, 51 percent
was allocated to telecommunications, 36 percent to electric power and 13 percent
to energy. Adding a further degree of diversification to the Portfolio was its
international holdings (16 percent of its net assets), which focused on
telecommunications
13
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
LETTER TO THE SHAREHOLDERS JUNE 30, 2000, CONTINUED
infrastructure growth. The Portfolio's high-quality fixed-income allocation
accounted for 6 percent of net assets with the remaining 6 percent held in cash
and cash equivalents. The fixed-income portion of the Portfolio remains well
diversified with a weighted average credit rating of Baa1 and BBB+, as measured
by Moody's Investors Service and Standard & Poor's Corporation, respectively.
During the second half of 2000, we currently anticipate modestly increasing the
Portfolio's international component while maintaining a healthy balance between
the telecommunications, electric power and natural gas industries. Broad
diversification among the various utility industries and their subsectors
remains an important component of the Portfolio's overall investment strategy.
We believe that the Portfolio remains well positioned as it pursues its
objective of seeking both capital appreciation and current income.
LOOKING AHEAD
As we enter the second half of the fiscal year, many important indicators are
signaling that economic growth in the United States is slowing down. In
addition, several measures of inflation have begun to reverse, indicating that
the Fed's strong anti-inflationary policy has proven successful. We caution,
however, that the Fed has expressed concern about consumer wealth and rising
prices. We thus anticipate that the central bank will continue to focus on
inflation and may increase short-term rates if it feels that the economic
momentum is not slowing sufficiently.
We appreciate your ongoing support of Morgan Stanley Dean Witter Variable
Investment Series and look forward to continuing to serve your investment needs
and objectives.
Very truly yours,
<TABLE>
<S> <C>
[/S/ CHARLES A. FIUMEFREDDO] [/S/ MITCHELL M. MERIN]
CHARLES A. FIUMEFREDDO MITCHELL M. MERIN
CHAIRMAN OF THE BOARD PRESIDENT
</TABLE>
14
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
FUND PERFORMANCE JUNE 30, 2000
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS(1)
------------------------------------------------------------------------------------------------------
DATE OF SINCE
1 YEAR 5 YEARS 10 YEARS INCEPTION INCEPTION
-------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C>
Money Market............. 5.39% 5.19% 4.84% -- --
Short-Term Bond.......... 4.25 -- -- 5/4/99 3.42%
Quality Income Plus...... 2.88 5.59 7.84 -- --
High Yield............... (8.32) 3.32 8.71 -- --
Utilities................ 5.78 17.16 13.75 -- --
Income Builder........... (5.79) -- -- 1/21/97 7.86
Dividend Growth.......... (18.95) 12.51 11.45 -- --
Capital Growth........... 28.07 21.40 -- 3/1/91 14.86
Global Dividend Growth... (1.88) 12.02 -- 2/23/94 11.20
European Growth.......... 26.11 21.30 -- 3/1/91 18.56
Pacific Growth........... 19.31 (1.70) -- 2/23/94 3.33
Equity................... 26.37 28.89 21.75 -- --
S&P 500 Index............ 6.81 -- -- 5/18/98 14.86
Competitive Edge -- Fund
"Best Ideas"............ 15.41 -- -- 5/18/98 9.42
Aggressive Equity........ 47.31 -- -- 5/4/99 42.45
Strategist............... 8.99 15.69 12.71 -- --
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RETURNS. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE. WHEN YOU SELL FUND SHARES, THEY MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST.
--------------------
(1) Figure shown assumes reinvestment of all distributions for the underlying
fund based on net asset value (NAV). They do not reflect the deduction of
insurance expenses, an annual contract maintenance fee, or surrender
charges.
15
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - MONEY MARKET
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED MATURITY
PRINCIPAL YIELD
AMOUNT IN ON DATE OF
THOUSANDS PURCHASE DATE VALUE
-------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
COMMERCIAL PAPER (78.9%)
BANKING (11.6%)
$ 12,000 Bank of New York Co., Inc............... 6.64 - 6.65% 08/14/00 - 08/16/00 $ 11,901,600
12,425 Citicorp................................ 6.59 - 6.61 07/05/00 - 07/11/00 12,409,961
7,000 Mellon Funding Corp..................... 6.70 07/26/00 6,967,820
13,800 Northern Trust Corp..................... 6.61 08/10/00 - 08/11/00 13,698,329
------------
44,977,710
------------
DIVERSIFIED FINANCIAL SERVICES (9.5%)
18,000 Associates First Capital
Corp.................................. 6.64 - 6.66 07/25/00 - 09/08/00 17,841,305
19,500 General Electric Capital
Corp.................................. 6.25 - 7.16 08/17/00 - 02/09/01 19,035,933
------------
36,877,238
------------
DIVERSIFIED MANUFACTURING (1.6%)
6,270 Honeywell International................. 6.62 07/10/00 6,259,733
------------
FINANCE - AUTOMOTIVE (12.7%)
7,000 American Honda Finance Corp............. 6.71 08/01/00 6,960,036
5,500 BMW U.S. Capital Corp................... 6.62 08/07/00 5,462,974
19,000 DaimlerChrylser North
America Holding Corp.................. 6.64 - 6.78 07/21/00 - 09/19/00 18,816,609
12,000 Ford Motor Credit Co.................... 6.60 - 6.61 07/06/00 - 07/12/00 11,982,533
6,000 General Motors Acceptance Corp.......... 6.55 07/13/00 5,986,980
------------
49,209,132
------------
FINANCE - CONSUMER (8.8%)
15,000 Household Finance Corp.................. 6.88 07/03/00 14,994,267
19,000 New Center Asset Trust.................. 6.14 - 6.59 07/17/00 - 07/24/00 18,939,004
------------
33,933,271
------------
FINANCE - CORPORATE (8.4%)
15,500 CIT Group Inc........................... 6.21 - 6.82 07/03/00 - 07/06/00 15,488,978
17,000 Ciesco, L.P............................. 6.64 - 6.68 07/20/00 - 09/13/00 16,879,684
------------
32,368,662
------------
FOOD & BEVERAGES (1.5%)
6,000 Heinz (H.J.) Co......................... 6.60 07/07/00 5,993,460
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
16
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - MONEY MARKET
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
ANNUALIZED MATURITY
PRINCIPAL YIELD
AMOUNT IN ON DATE OF
THOUSANDS PURCHASE DATE VALUE
-------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
INTERNATIONAL BANKS (16.0%)
$ 6,000 ANZ (DE) Inc............................ 6.68% 09/15/00 $ 5,916,780
7,000 Abbey National North America Corp....... 6.70 09/12/00 6,906,601
6,000 Canadian Imperial Holdings Inc.......... 6.72 09/11/00 5,920,800
19,500 Deutsche Bank Financial Inc............. 6.57 - 6.63 07/14/00 - 08/04/00 19,408,699
12,000 Dresdner U.S. Finance Inc............... 6.55 - 6.62 07/31/00 - 08/08/00 11,926,267
6,000 KFW International
Finance Inc........................... 6.66 09/07/00 5,925,540
6,000 National Australia Funding (DE)
Inc................................... 6.63 10/04/00 5,898,033
------------
61,902,720
------------
INVESTMENT BANKERS/BROKERS/SERVICES (4.9%)
19,000 Goldman Sachs Group Inc................. 6.61 - 6.78 07/05/00 - 08/24/00 18,885,000
------------
RENTAL/LEASING COMPANIES (1.4%)
5,500 International Lease Finance Corp........ 6.63 07/19/00 5,481,960
------------
MAJOR U.S. TELECOMMUNICATIONS (1.5%)
6,000 AT&T Corp............................... 6.66 09/05/00 5,927,840
------------
UTILITIES (1.0%)
3,750 National Rural Utilities
Cooperative Finance Corp.............. 6.72 08/18/00 3,716,900
------------
TOTAL COMMERCIAL PAPER
(AMORTIZED COST $305,533,626)............................................................. 305,533,626
------------
U.S. GOVERNMENT AGENCIES (16.3%)
9,500 Federal Farm Credit Banks............... 6.15 - 6.16 11/02/00 - 11/17/00 9,297,988
5,445 Federal Home Loan Banks................. 6.14 12/21/00 5,293,498
16,085 Federal Home Loan Mortgage Corp......... 6.02 - 7.11 09/01/00 - 04/26/01 15,602,232
33,519 Federal National Mortgage Assoc......... 5.92 - 6.47 09/28/00 - 02/01/01 32,774,693
------------
TOTAL U.S. GOVERNMENT AGENCIES
(AMORTIZED COST $62,968,411).............................................................. 62,968,411
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - MONEY MARKET
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
ANNUALIZED MATURITY
PRINCIPAL YIELD
AMOUNT IN ON DATE OF
THOUSANDS PURCHASE DATE VALUE
-------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
SHORT-TERM BANK NOTE (3.4%)
$ 13,000 Bank of America N.A. (AMORTIZED COST
$13,000,000).......................... 6.60 - 6.82% 07/07/00 - 09/01/00 $ 13,000,000
------------
CERTIFICATE OF DEPOSIT (1.6%)
6,000 First Union National Bank (AMORTIZED
COST $6,000,000)...................... 6.65 07/27/00 6,000,000
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(AMORTIZED COST $387,502,037) (A)......................................................... 100.2% 387,502,037
LIABILITIES IN EXCESS OF OTHER ASSETS..................................................... (0.2) (580,937)
----- -------------
NET ASSETS................................................................................ 100.0% $ 386,921,100
----- -------------
----- -------------
</TABLE>
---------------------
(a) Cost is the same for federal income tax purposes.
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - SHORT-TERM BOND
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
-----------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT & AGENCY OBLIGATIONS (73.2%)
$ 500 Federal Farm Credit Banks............... 5.57 - 5.88% 03/23/01 - 07/02/01 $ 494,696
975 Federal Home Loan Banks ................ 4.88 - 6.75 03/02/01 - 05/01/02 966,297
500 Federal Home Loan Mortgage Corp......... 5.75 06/15/01 494,945
500 Federal National Mortgage Assoc......... 5.63 - 6.63 03/15/01 - 07/17/02 495,769
1,600 U.S. Treasury Notes..................... 5.63 - 6.50 05/15/01 - 10/31/01 1,595,662
----------
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(IDENTIFIED COST $4,061,319).............................................................. 4,047,369
----------
CORPORATE BONDS (11.2%)
DIVERSIFIED FINANCIAL SERVICES (1.8%)
100 IBM Credit Corp......................... 7.00 01/28/02 99,837
----------
FINANCE COMPANIES (1.8%)
100 Associates Corp. of North America....... 6.50 07/15/02 98,141
----------
MAJOR BANKS (1.8%)
100 First Union Corp........................ 8.00 11/15/02 100,629
----------
MID-SIZED BANKS (2.2%)
124 Long Island Savings Bank................ 6.20 04/02/01 122,500
----------
MOTOR VEHICLES (1.8%)
100 DaimlerChrysler North
American Holdings Corp................ 7.75 05/27/03 100,645
----------
RAILROADS (1.8%)
100 Union Pacific Corp...................... 7.38 05/15/01 99,832
----------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $620,231)................................................................ 621,584
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - SHORT-TERM BOND
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
-----------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
SHORT-TERM INVESTMENT (A) (10.9%)
U.S. GOVERNMENT AGENCY
$ 600 Federal Home Loan Banks
(AMORTIZED COST $599,781)............. 6.57% 07/03/00 $ 599,781
----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $5,281,331) (b)............................................................ 95.3% 5,268,734
OTHER ASSETS IN EXCESS OF LIABILITIES....................................................... 4.7 258,884
----- -----------
NET ASSETS.................................................................................. 100.0% $ 5,527,618
----- -----------
----- -----------
</TABLE>
---------------------
(a) Purchased on a discount basis. The interest rate shown has been adjusted to
reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $3,717 and the
aggregate gross unrealized depreciation is $16,314, resulting in net
unrealized depreciation of $12,597.
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - QUALITY INCOME PLUS
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
-----------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CORPORATE BONDS (61.3%)
ACCIDENT & HEALTH INSURANCE (0.7%)
$ 3,000 Jackson National Life Insurance
Co. - 144A*...................... 8.15% 03/15/27 $ 2,812,110
------------
AEROSPACE (1.3%)
5,000 Boeing Co.......................... 7.95 08/15/24 5,141,850
------------
AIR FREIGHT/DELIVERY SERVICES (1.2%)
4,816 Federal Express Corp............... 7.50 01/15/18 4,730,564
------------
AIRLINES (1.8%)
4,729 America West Airlines (Class A).... 6.85 07/02/09 4,446,997
3,000 Continental Airlines, Inc.......... 7.056 09/15/09 2,901,240
------------
7,348,237
------------
ALUMINUM (1.1%)
5,000 Aluminum Co. of America............ 6.75 01/15/28 4,389,150
------------
AUTO PARTS: O.E.M. (1.2%)
5,000 Eaton Corp......................... 7.65 11/15/29 4,733,250
------------
BUILDING MATERIALS/DIY CHAINS (1.1%)
5,000 Home Depot Real Estate Funding
Corp. II - 144A*................. 5.95 10/15/08 4,366,350
------------
BUILDING PRODUCTS (0.6%)
3,000 Armstrong World
Industries, Inc.................. 7.45 05/15/29 2,415,000
------------
CELLULAR TELEPHONE (2.4%)
5,000 360 DEG. Communications Co......... 7.60 04/01/09 4,882,100
5,000 Vodafone AirTouch PLC - 144A*
(United Kingdom)................. 7.75 02/15/10 4,963,700
------------
9,845,800
------------
CONSTRUCTION/AGRICULTURAL EQUIPMENT/TRUCKS (0.8%)
3,000 Caterpillar, Inc................... 9.375 08/15/11 3,318,810
------------
CONTRACT DRILLING (0.7%)
3,000 Transocean Offshore Inc............ 8.00 04/15/27 2,909,970
------------
DEPARTMENT STORES (1.2%)
5,000 May Department Stores Co........... 7.625 08/15/13 4,846,050
------------
DISCOUNT CHAINS (0.6%)
2,522 Wal-Mart Stores, Inc............... 7.49 06/21/07 2,531,676
------------
DIVERSIFIED FINANCIAL SERVICES (0.7%)
3,000 Abbey National PLC (United
Kingdom)......................... 7.95 10/26/29 2,949,810
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
21
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - QUALITY INCOME PLUS
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
-----------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
DIVERSIFIED MANUFACTURING (2.2%)
$ 5,000 Dresser Industries, Inc............ 7.60% 08/15/96 $ 4,762,300
5,000 Tyco International Group S.A.
(Luxembourg)..................... 6.875 01/15/29 4,274,250
------------
9,036,550
------------
ELECTRIC UTILITIES (3.1%)
1,000 Chugach Electric Co................ 9.14 03/15/22 1,094,480
5,000 Israel Electric Co., Ltd. -
144A*............................ 7.75 03/01/09 4,823,750
3,500 Oklahoma Gas & Electric Co......... 6.50 07/15/17 3,415,370
2,500 Public Service Electric & Gas
Co............................... 6.75 03/01/06 2,381,150
1,000 Tampa Electric Co.................. 7.75 11/01/22 990,570
------------
12,705,320
------------
ELECTRONIC DATA PROCESSING (0.7%)
3,000 Hewlett-Packard Co................. 7.15 06/15/05 3,007,230
------------
ELECTRONIC DISTRIBUTORS (1.2%)
5,000 Avnet Inc.......................... 7.875 02/15/05 5,069,550
------------
ELECTRONIC PRODUCTION EQUIPMENT (1.1%)
5,000 Applied Materials, Inc............. 7.125 10/15/17 4,682,500
------------
ENERGY (0.3%)
1,000 Texaco Capital Inc................. 9.75 03/15/20 1,223,640
------------
FINANCE COMPANIES (3.3%)
3,000 Ford Capital B.V................... 9.50 06/01/10 3,336,660
5,000 General Electric Capital Corp...... 7.375 01/19/10 5,039,900
5,000 Household Finance Corp............. 8.00 05/09/05 5,035,100
------------
13,411,660
------------
INTEGRATED OIL COMPANIES (3.8%)
3,000 Atlantic Richfield Co.............. 9.00 05/01/31 3,525,690
3,000 BP Amoco PLC (United Kingdom)...... 5.90 04/15/09 2,727,870
5,000 Conoco Inc......................... 6.35 04/15/09 4,650,500
5,000 Murphy Oil Corp.................... 7.05 05/01/29 4,427,600
------------
15,331,660
------------
INTERNATIONAL BANKS (1.1%)
5,000 Dresdner Funding Trust - 144A*..... 8.151 06/30/31 4,356,150
------------
INVESTMENT BANKERS/BROKERS/SERVICES (2.6%)
2,000 Bear Stearns Companies, Inc........ 8.75% 03/15/04 2,049,300
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
22
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - QUALITY INCOME PLUS
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
-----------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
$ 3,750 Lehman Brothers Holdings, Inc...... 8.75% 03/15/05 $ 3,848,888
5,000 Lehman Brothers Holdings, Inc...... 8.50 08/01/15 4,917,000
------------
10,815,188
------------
MAJOR BANKS (6.7%)
2,000 Chase Manahattan Corp.............. 7.875 06/15/10 2,004,940
5,000 First Bank System Inc.............. 7.625 05/01/05 4,970,750
3,000 Mellon Bank N.A.................... 7.625 09/15/07 2,974,740
5,000 NationsBank Corp................... 7.80 09/15/16 4,843,900
3,000 State Street Boston Corp........... 7.65 06/15/10 2,994,330
5,000 State Street Boston Corp........... 5.95 09/15/03 4,779,350
5,000 Wells Fargo & Co................... 7.55 06/21/10 4,932,250
------------
27,500,260
------------
MAJOR PHARMACEUTICALS (1.4%)
5,000 Johnson & Johnson.................. 8.72 11/01/24 5,306,050
519 Marion Merrell Corp................ 9.11 08/01/05 537,116
------------
5,843,166
------------
MAJOR U.S. TELECOMMUNICATIONS (4.3%)
5,000 AT&T Corp.......................... 8.35 01/15/25 4,974,750
3,000 Bellsouth Capital Funding.......... 7.875 02/15/30 2,991,600
5,000 GTE Corp........................... 7.90 02/01/27 4,736,100
5,000 WorldCom, Inc...................... 8.00 05/15/06 5,070,250
------------
17,772,700
------------
MANAGED HEALTH CARE (0.3%)
1,000 Kaiser Foundation Health
Plan, Inc........................ 9.55 07/15/05 1,075,480
------------
MEDICAL SPECIALTIES (1.0%)
4,000 Becton Dickinson & Co.............. 8.70 01/15/25 4,086,520
------------
MOTOR VEHICLES (1.2%)
5,000 DaimlerChrysler North American
Holdings......................... 8.00 06/15/10 5,079,050
------------
MULTI-LINE INSURANCE (1.3%)
1,000 Hartford Financial Services
Group, Inc....................... 7.90 06/15/10 1,003,540
5,000 Nationwide Financial Services,
Inc.............................. 8.00 03/01/27 4,479,000
------------
5,482,540
------------
NATURAL GAS (0.6%)
2,500 Sempra Energy...................... 7.95 03/01/10 2,528,525
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
23
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - QUALITY INCOME PLUS
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
-----------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
OIL & GAS PRODUCTION (2.7%)
$ 2,000 Anadarko Petroleum Corp............ 7.73% 09/15/96 $ 1,951,800
5,000 Burlington Resources, Inc.......... 7.375 03/01/29 4,655,950
5,000 Kerr-McGee Corp.................... 7.125 10/15/27 4,447,150
------------
11,054,900
------------
PRECIOUS METALS (1.2%)
5,000 Barrick Gold Corp.................. 7.50 05/01/07 4,901,150
------------
PROPERTY-CASUALTY INSURERS (0.7%)
3,000 Everest Reinsurance Holdings
Corp............................. 8.50 03/15/05 3,005,250
------------
RAILROADS (1.1%)
4,423 Burlington Northern Santa Fe
Corp............................. 7.97 01/01/15 4,441,591
------------
SPECIALTY CHEMICALS (1.2%)
5,000 Great Lakes Chemicals Corp......... 7.00 07/15/09 4,695,850
------------
TELECOMMUNICATION EQUIPMENT (1.1%)
5,000 Motorola Inc....................... 6.50 11/15/28 4,379,350
------------
TELECOMMUNICATIONS (0.5%)
2,000 Deutsche Telekom International
Finance Corp..................... 8.00 06/15/10 2,019,640
------------
TOBACCO (1.2%)
5,000 Philip Morris Companies, Inc....... 7.125 10/01/04 4,783,950
------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $259,539,397).................................. 250,627,997
------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS (33.5%)
5 Federal Home Loan Mortgage
Corp............................. 11.50 05/01/19 5,067
4,237 Federal Home Loan Mortgage
Corp. PC Gold.................... 6.00 10/01/23 - 11/01/27 3,879,812
1,020 Federal Home Loan Mortgage
Corp. PC Gold.................... 8.50 01/01/22 - 12/01/24 1,039,968
11,987 Federal National Mortgage Assoc.... 6.00 02/01/27 - 03/01/29 10,964,098
21,927 Federal National Mortgage Assoc.... 6.50 03/01/26 - 01/01/30 20,666,048
6,618 Federal National Mortgage Assoc.... 7.00 03/01/17 - 05/01/29 6,386,448
3,000 Federal National Mortgage Assoc.... 7.00 (a) 2,895,000
2,271 Federal National Mortgage Assoc.... 7.50 06/01/28 - 09/01/29 2,237,261
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
24
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - QUALITY INCOME PLUS
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
-----------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
$ 7,827 Federal National Mortgage Assoc.... 8.00% 07/01/29 - 03/01/30 $ 7,855,945
281 Federal National Mortgage Assoc.... 9.00 06/01/21 - 02/01/25 288,555
9,440 Government National Mortgage
Assoc............................ 6.00 04/15/28 - 12/15/28 8,693,254
20,444 Government National Mortgage
Assoc............................ 6.50 08/15/27 - 07/15/29 19,396,448
16,099 Government National Mortgage
Assoc............................ 7.00 03/15/26 - 02/15/30 15,650,982
17 Government National Mortgage
Assoc............................ 7.50 04/15/24 - 09/15/27 17,325
12,515 Government National Mortgage
Assoc............................ 8.00 10/15/24 - 11/15/29 12,644,363
1,555 Government National Mortgage
Assoc............................ 8.50 01/15/17 - 03/01/28 1,591,124
1,247 Government National Mortgage
Assoc............................ 9.00 07/15/24 - 12/15/24 1,287,106
116 Government National Mortgage
Assoc............................ 10.00 05/15/16 - 04/15/19 122,785
5,000 Tennessee Valley Authority......... 7.85 06/15/44 4,963,850
6,000 U.S. Treasury Bond................. 6.25 05/15/30 6,296,700
5,000 U.S. Treasury Bond................. 7.25 08/15/22 5,614,000
15,000 U.S. Treasury Note Strips.......... 0.00 02/15/19 - 08/15/19 4,644,900
------------
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(IDENTIFIED COST $140,504,017).................................. 137,141,039
------------
FOREIGN GOVERNMENT OBLIGATIONS (4.0%)
5,000 Hydro-Quebec+...................... 9.50 11/15/30 6,003,300
5,000 Province of New Brunswick.......... 7.625 06/29/04 5,046,250
5,000 Province of Manitoba............... 7.75 07/17/16 5,139,500
------------
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(IDENTIFIED COST $15,896,050)................................... 16,189,050
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
25
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - QUALITY INCOME PLUS
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
-----------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
SHORT-TERM INVESTMENT (B) (1.0%)
U.S. GOVERNMENT AGENCY
$ 4,300 Federal Home Loan Banks (AMORTIZED
COST $4,298,430)................. 6.57% 07/03/00 $ 4,298,430
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $420,237,894) (C)................................ 99.8% 408,256,516
OTHER ASSETS IN EXCESS OF LIABILITIES............................. 0.2 826,156
----- -------------
NET ASSETS........................................................ 100.0% $ 409,082,672
----- -------------
----- -------------
</TABLE>
---------------------
* Resale is restricted to qualified institutional investors.
PC Participation Certificate.
+ Some of these securities are segregated in connection with securities
purchased on a forward commitment basis.
(a) Security was purchased on a forward commitment basis with an approximate
principal amount and no definite maturity date; the actual principal amount
and maturity date will be determined upon settlement.
(b) Purchased on a discount basis. The interest rate shown has been adjusted to
reflect a money market equivalent yield.
(c) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $878,865 and the
aggregate gross unrealized depreciation is $12,860,243, resulting in net
unrealized depreciation of $11,981,378.
SEE NOTES TO FINANCIAL STATEMENTS
26
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - HIGH YIELD
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
--------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CORPORATE BONDS (93.8%)
BEVERAGES - NON-ALCOHOLIC (1.7%)
$ 5,000 Sparkling Spring Water (Canada)......... 11.50% 11/15/07 $ 4,000,000
------------
BROADCAST/MEDIA (4.8%)
8,000 Brill Media Co., LLC (Series B)......... 12.00 12/15/07 5,280,000
5,648 Mentus Media Corp. (Series B)........... 12.00+ 02/01/03 2,146,240
3,890 Tri-State Outdoor Media Group........... 11.00 05/15/08 3,695,500
------------
11,121,740
------------
BROADCASTING (0.5%)
1,200 XM Satellite Radio Holdings Inc. -
144A* (Class A) (Units)++............. 14.00 03/15/10 1,062,000
------------
CABLE TELEVISION (3.7%)
3,750 Australis Holdings Ltd.
(Australia) (a)....................... 15.00++ 11/01/02 37,500
3,000 Knology Holdings Inc.................... 11.875++ 10/15/07 1,620,000
9,750 Optel Inc. (a)(b)....................... 11.50 07/01/08 5,850,000
1,500 Optel Inc. (Series B) (a)(b)............ 13.00 02/15/05 900,000
------------
8,407,500
------------
CASINO/GAMBLING (5.4%)
12,250 Aladdin Gaming Holdings/Capital Corp.
(Series B)............................ 13.50++ 03/01/10 7,166,250
9,915 Fitzgeralds Gaming Corp.
(Series B) (b)........................ 12.25 12/15/04 5,254,950
------------
12,421,200
------------
CELLULAR TELEPHONE (5.1%)
1,400 Dobson/Sygnet Communications............ 12.25 12/15/08 1,494,500
5,500 Dolphin Telecom PLC (United Kingdom).... 14.00++ 05/15/09 1,925,000
7,920 McCaw International Ltd................. 13.00++ 04/15/07 6,089,134
1,500 Tritel PCS Inc.......................... 12.75++ 05/15/09 990,000
1,500 Triton PCS Inc.......................... 11.00++ 05/01/08 1,095,000
------------
11,593,634
------------
CONSTRUCTION/AGRICULTURAL EQUIPMENT/TRUCKS (1.2%)
3,000 J.B. Poindexter & Co., Inc.............. 12.50 05/15/04 2,835,000
------------
CONSUMER ELECTRONICS/APPLIANCES (0.6%)
12,000 International Semi-Tech
Microelectronics, Inc. (Canada) (a).. 11.50++ 08/15/03 120,000
1,400 Windmere-Durable Holdings, Inc.......... 10.00 07/31/08 1,372,000
------------
1,492,000
------------
CONSUMER SPECIALTIES (0.9%)
2,500 Samsonite Corp.......................... 10.75 06/15/08 2,081,250
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
27
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - HIGH YIELD
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
--------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CONSUMER/BUSINESS SERVICES (2.9%)
$ 1,800 Anacomp, Inc. (Series B)................ 10.875% 04/01/04 $ 1,156,500
8,909 Comforce Corp. (Series B)............... 15.00+ 12/01/09 2,672,840
3,250 Comforce Operating, Inc................. 12.00 12/01/07 1,755,000
1,000 MDC Communication Corp. (Canada)........ 10.50 12/01/06 960,000
------------
6,544,340
------------
CONTAINERS/PACKAGING (2.7%)
300 Berry Plastics Corp..................... 12.25 04/15/04 282,000
1,100 Berry Plastics Corp..................... 11.00 07/15/07 968,000
6,330 Envirodyne Industries, Inc.............. 10.25 12/01/01 3,639,750
1,200 Impac Group Inc. (Series B)............. 10.125 03/15/08 1,302,000
------------
6,191,750
------------
CONTRACT DRILLING (0.3%)
1,000 Northern Offshore ASA (Series B)
(Norway).............................. 10.00 05/15/05 635,000
------------
DIVERSIFIED ELECTRONIC PRODUCTS (0.9%)
3,000 High Voltage Engineering, Inc........... 10.75 08/15/04 2,145,000
------------
DIVERSIFIED MANUFACTURING (3.3%)
1,400 Eagle-Picher Industries, Inc............ 9.375 03/01/08 1,183,000
1,800 Jordan Industries, Inc. (Class D)....... 10.375 08/01/07 1,674,000
7,200 Jordan Industries, Inc. (Series B)...... 11.75++ 04/01/09 4,608,000
------------
7,465,000
------------
DRUGSTORE CHAINS (0.2%)
1,000 Rite Aid Corp........................... 7.70 02/15/27 450,000
------------
E.D.P. SERVICES (0.5%)
1,400 Globix Corp............................. 12.50 02/01/10 1,155,000
------------
ELECTRONIC DISTRIBUTORS (0.1%)
6,000 CHS Electronics, Inc. (a)(b)............ 9.875 04/15/05 120,000
------------
ENVIRONMENTAL SERVICES (0.9%)
2,500 Allied Waste North America, Inc.
(Series B)............................ 10.00 08/01/09 2,087,500
------------
FOOD CHAINS (0.5%)
2,515 Pueblo Xtra International, Inc.
(Series C)............................ 9.50 08/01/03 1,232,350
------------
FOOD DISTRIBUTORS (0.8%)
1,300 Fleming Companies, Inc. (Series B)...... 10.625 07/31/07 1,092,000
800 Volume Services America Inc............. 11.25 03/01/09 732,000
------------
1,824,000
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
28
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - HIGH YIELD
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
--------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
HOTELS/RESORTS (4.4%)
$ 9,000 Epic Resorts LLC (Series B)............. 13.00% 06/15/05 $ 5,400,000
7,210 Resort At Summerlin (Series B).......... 13.00 12/15/07 4,686,532
------------
10,086,532
------------
INDUSTRIAL SPECIALTIES (1.8%)
1,650 Indesco International Inc............... 9.75 04/15/08 610,500
1,000 International Wire Group, Inc........... 11.75 06/01/05 1,005,000
3,000 Outsourcing Services Group, Inc.
(Series B)............................ 10.875 03/01/06 2,400,000
------------
4,015,500
------------
INTERNET SERVICES (0.5%)
1,200 PSINet Inc.............................. 11.00 08/01/09 1,122,000
------------
MEDICAL SPECIALTIES (1.5%)
5,100 Mediq Inc./PRN Life Support Services
Inc. (b).............................. 11.00 06/01/08 510,000
3,000 Universal Hospital Services, Inc.
(issued 02/25/98)..................... 10.25 03/01/08 1,710,000
2,000 Universal Hospital Services, Inc.
(Issued 02/26/99)..................... 10.25 03/01/08 1,140,000
------------
3,360,000
------------
MEDICAL/NURSING SERVICES (0.7%)
2,500 Pediatric Services of America, Inc.
(Series A)............................ 10.00 04/15/08 1,650,000
------------
MILITARY/GOV'T/TECHNICAL (0.4%)
1,300 Loral Space & Communications Ltd........ 9.50 01/15/06 952,250
------------
MOVIES/ENTERTAINMENT (0.2%)
1,700 Regal Cinemas, Inc...................... 9.50 06/01/08 408,000
------------
OFFICE EQUIPMENT/SUPPLIES (1.8%)
6,500 Mosler, Inc............................. 11.00 04/15/03 4,095,000
------------
OIL REFINING/MARKETING (0.0%)
3,000 Transamerican Refining Corp.
(Series B)(a)(b)...................... 16.00 06/30/03 37,500
------------
OTHER TELECOMMUNICATIONS (13.7%)
6,500 Birch Telecom Inc....................... 14.00 06/15/08 6,305,000
3,000 DTI Holdings Inc. - (Series B).......... 12.50++ 03/01/08 1,290,000
3,000 Esprit Telecom Group PLC (United
Kingdom).............................. 11.50 12/15/07 2,340,000
16,520 Firstworld Communications, Inc.......... 13.00++ 04/15/08 7,764,400
1,300 Globenet Comm Group Ltd. (Bermuda)...... 13.00 07/15/07 1,319,500
1,500 Pac-West Telecom Inc. (Series B)........ 13.50 02/01/09 1,515,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
29
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - HIGH YIELD
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
--------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
$ 2,500 Primus Telecommunication Group, Inc.
(Series B)............................ 9.875% 05/15/08 $ 1,875,000
1,300 Versatel Telecom International NV
(Netherlands)......................... 13.25 05/15/08 1,326,000
3,031 Viatel Inc.............................. 11.25 04/15/08 2,273,250
5,000 World Access, Inc (c)................... 13.25 01/15/08 4,250,000
1,300 Worldwide Fiber Inc. - (Canada)......... 12.00 08/01/09 1,235,000
------------
31,493,150
------------
PACKAGE GOODS/COSMETICS (1.0%)
2,419 J.B. Williams Holdings, Inc............. 12.00 03/01/04 2,394,810
------------
PRINTING/FORMS (0.1%)
2,500 Premier Graphics Inc. (b)............... 11.50 12/01/05 175,000
------------
RESTAURANTS (3.5%)
20,351 American Restaurant Group Holdings,
Inc. - 144A*(c)....................... 0.00 12/15/05 5,291,338
5,000 FRD Acquisition Corp. (Series B)........ 12.50 07/15/04 1,800,000
1,300 Friendly Ice Cream Corp................. 10.50 12/01/07 1,040,000
------------
8,131,338
------------
RETAIL - SPECIALTY (0.6%)
1,375 Pantry, Inc............................. 10.25 10/15/07 1,302,812
------------
SPECIALTY FOODS/CANDY (2.7%)
43,678 SFAC New Holdings Inc. (c).............. 13.00++ 06/15/09 6,114,941
------------
TELECOMMUNICATION EQUIPMENT (0.9%)
1,500 SBA Communications Corp................. 12.00++ 03/01/08 1,057,500
1,500 Spectrasite Holdings, Inc............... 12.00++ 07/15/08 990,000
------------
2,047,500
------------
TELECOMMUNICATIONS (10.9%)
1,200 CapRock Communications Corp............. 11.50 05/01/09 1,080,000
1,400 CapRock Communications Corp.
(Series B)............................ 12.00 07/15/08 1,288,000
1,500 Covad Communications Group, Inc......... 12.50 02/15/09 1,275,000
5,000 e. Spire Communications, Inc............ 13.75 07/15/07 2,750,000
1,500 Focal Communications, Corp.
(Series B)............................ 12.125++ 02/15/08 1,005,000
1,800 GST Equipment Funding, Inc. (a)......... 13.25 05/01/07 1,026,000
1,300 Hyperion Telecommunication, Inc.
(Series B)............................ 12.25 09/01/04 1,352,000
28,500 In-Flight Phone Corp.
(Series B) (a)(b)..................... 14.00 05/15/02 2,565,000
1,300 Level 3 Communications, Inc............. 9.125 05/01/08 1,166,750
1,000 MGC Communications Inc. - 144A*......... 13.00 04/01/10 940,000
1,300 NEXTLINK Communications, Inc............ 9.00 03/15/08 1,192,750
4,000 Onepoint Communications Corp............ 14.50 06/01/08 2,000,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
30
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - HIGH YIELD
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
--------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
$ 5,400 Rythms Netconnections, Inc.............. 12.75% 04/15/09 $ 3,780,000
1,200 Startec Global Communications Corp...... 12.00 05/15/08 960,000
3,000 Talton Holdings, Inc. - (Series B)...... 11.00 06/30/07 2,550,000
------------
24,930,500
------------
WIRELESS COMMUNICATIONS (12.1%)
11,375 Advanced Radio Telecom Corp............. 14.00 02/15/07 10,010,000
1,800 AMSC Acquisition Co., Inc.
(Series B)............................ 12.25 04/01/08 1,404,000
900 Arch Escrow Corp........................ 13.75 04/15/08 738,000
19,000 Cellnet Data Systems Inc. (a)........... 14.00++ 10/01/07 1,330,000
3,000 Globalstar LP/Capital Corp.............. 10.75 11/01/04 862,500
3,300 Orbcomm Global LP/Capital Corp.
(Series B)............................ 14.00 08/15/04 2,574,000
5,040 Paging Network, Inc. (b)................ 10.125 08/01/07 2,116,800
6,400 Paging Network, Inc. (b)................ 10.00 10/15/08 2,688,000
4,500 USA Mobile Communications Holdings,
Inc................................... 14.00 11/01/04 3,780,000
2,400 Winstar Communications, Inc. - 144A*.... 12.75 04/15/10 2,316,000
------------
27,819,300
------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $337,068,677).............................................. 215,000,397
------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES
-----------
<C> <S> <C>
COMMON STOCKS (D) (1.3%)
CASINO/GAMBLING (0.0%)
2,000 Fitzgerald Gaming Corp............................................................... 2
------------
CLOTHING/SHOE/ACCESSORY STORES (0.0%)
1,310,596 County Seat Store Corp. (c).......................................................... 11,795
------------
ENTERTAINMENT & LEISURE (0.6%)
444,351 Premier Holdings Inc. (c)............................................................ 1,333,053
------------
HOTELS/RESORTS (0.0%)
2,000 Motels of America, Inc. - 144A*...................................................... 500
71,890 Vagabond Inns, Inc. (Class D) (a).................................................... 72
------------
572
------------
MEDICAL/NURSING SERVICES (0.0%)
418,663 Raintree Healthcare Corp. (c)........................................................ 3,768
------------
MOTOR VEHICLES (0.0%)
87 Northern Holdings Industrial Corp.*(c)............................................... --
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
31
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - HIGH YIELD
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
OTHER TELECOMMUNICATIONS (0.7%)
33,335 Versatel Telecom International NV (ADR) (Netherlands)................................ $ 1,437,572
15,710 World Access, Inc (c)................................................................ 172,810
------------
1,610,382
------------
RESTAURANTS (0.0%)
7,750 American Restaurant Group Holdings, Inc. - 144A*..................................... 1,937
------------
SPECIALTY FOODS/CANDY (0.0%)
2,375 SFAC New Holdings Inc. (c)........................................................... 594
120,000 Specialty Foods Acquisition Corp. - 144A*............................................ 30,000
------------
30,594
------------
TELECOMMUNICATION EQUIPMENT (0.0%)
196,000 FWT Inc. (Class A) (c)............................................................... 1,960
------------
TEXTILES (0.0%)
298,461 U.S. Leather, Inc. (c)............................................................... 2,985
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $29,935,529)........................................................ 2,997,048
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE
--------- ------ --------
<C> <S> <C> <C> <C>
CONVERTIBLE BOND (0.3%)
HOTELS/RESORTS (0.3%)
$742 Premier Cruises Ltd. (IDENTIFIED COST $742,000)................................ 10.00+% 8/15/05 727,160
------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES
-----------
<C> <S> <C>
PREFERRED STOCKS (0.6%)
OIL REFINING/MARKETING (0.0%)
5,266 Transamerica Refining Corp. (Conv.) (Class B)*....................................... 53
2,896 Transamerica Refining Corp. (Conv.) (Class C)*....................................... 29
7,635 Transamerica Refining Corp. (Conv.) (Class D)*....................................... 76
15,797 Transamerica Refining Corp. (Conv.) (Class E)*....................................... 158
------------
316
------------
RESTAURANTS (0.2%)
1,886 American Restaurant Group Holdings, Inc. (Series B).................................. 377,200
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
32
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - HIGH YIELD
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
TELECOMMUNICATION EQUIPMENT (0.4%)
1,960,000 FWT Inc. (Series A) (c).............................................................. $ 980,000
------------
TOTAL PREFERRED STOCKS
(IDENTIFIED COST $9,661,155)......................................................... 1,357,516
------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF EXPIRATION
WARRANTS DATE
----------- ----------
<C> <S> <C> <C>
WARRANTS (D) (1.0%)
AEROSPACE (0.0%)
1,500 Sabreliner Corp. - 144A*................................................. 04/15/03 15,000
------------
BROADCAST/MEDIA (0.0%)
12,524 Next Generation Network, Inc. - 144A*.................................... 02/01/08 125
------------
CASINO/GAMBLING (0.0%)
100,000 Aladdin Gaming Enterprises, Inc. - 144A*................................. 03/01/10 1,000
------------
CONSUMER/BUSINESS SERVICES (0.0%)
42,250 Comforce Corp. - 144A*................................................... 12/01/09 10,563
------------
HOTELS/RESORTS (0.0%)
9,000 Epic Resorts LLC - 144A*................................................. 06/15/05 90
6,000 Resort At Summerlin - 144A*.............................................. 12/15/07 60
------------
150
------------
OIL & GAS PRODUCTION (0.0%)
39,665 Gothic Energy Corp. - 144A*.............................................. 05/01/05 40
------------
OIL REFINING/MARKETING (0.0%)
3,000 Transamerican Refining Corp. - 144A*..................................... 06/30/03 3
------------
OTHER TELECOMMUNICATIONS (0.7%)
6,500 Birch Telecom Inc. - 144A*............................................... 06/15/08 357,500
15,000 DTI Holdings Inc. - 144A*................................................ 03/01/08 150
16,520 Firstworld Communications, Inc. - 144A*.................................. 04/15/08 1,239,000
------------
1,596,650
------------
RESTAURANTS (0.0%)
1,500 American Restaurant Group Holdings, Inc. - 144A*......................... 08/15/08 15
------------
TELECOMMUNICATIONS (0.0%)
4,000 Onepoint Communications Corp. - 144A*.................................... 06/01/08 80,000
1,200 Startec Global Communications Corp. - 144A*.............................. 05/15/08 4,200
------------
84,200
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
33
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - HIGH YIELD
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF EXPIRATION
WARRANTS DATE VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
WIRELESS COMMUNICATIONS (0.3%)
1,800 Motient Corp. - 144A*.................................................... 04/01/08 $ 72,000
92,640 Star Choice Communications, Inc. - 144A* (Canada)........................ 12/15/05 440,040
------------
512,040
------------
TOTAL WARRANTS
(IDENTIFIED COST $464,744)........................................................... 2,219,786
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE
--------- ------ --------
<C> <S> <C> <C> <C>
SHORT-TERM INVESTMENT (0.5%)
REPURCHASE AGREEMENT
$1,183 The Bank of New York (dated
06/30/00; proceeds $1,183,850) (e) (IDENTIFIED COST $1,183,159).............. 7.00% 07/03/00 1,183,159
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $379,055,264) (F).............................................. 97.5% 223,485,066
OTHER ASSETS IN EXCESS OF LIABILITIES........................................... 2.5 5,615,040
----- -------------
NET ASSETS...................................................................... 100.0% $ 229,100,106
----- -------------
----- -------------
</TABLE>
---------------------
ADR American Depository Receipt
* Resale is restricted to qualified institutional investors.
+ Payment-in-kind security.
++ Currently a zero coupon bond and will pay interest at the rate shown at a
future specified date.
++ Consists of one or more class of securities traded together as a unit;
bonds with attached warrants.
(a) Issuer in bankruptcy.
(b) Non-income producing security; bond in default.
(c) Acquired through exchange offer.
(d) Non-income producing securities.
(e) Collateralized by $1,178,414 Federal Home Loan Bank 7.00% due 02/01/02
valued at $1,206,844.
(f) The aggregate cost for federal income tax purposes approximates
identified cost. The aggregate gross unrealized appreciation is
$5,693,193 and the aggregate gross unrealized depreciation is
$161,263,391, resulting in net unrealized depreciation of $155,570,198.
SEE NOTES TO FINANCIAL STATEMENTS
34
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - UTILITIES
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (88.1%)
ELECTRIC UTILITIES (32.0%)
270,000 AES Corp.*............................................................................. $ 12,318,750
140,000 Calpine Corp.*......................................................................... 9,205,000
205,865 Cinergy Corp........................................................................... 5,236,691
160,000 CMS Energy Corp........................................................................ 3,540,000
125,000 Consolidated Edison, Inc............................................................... 3,703,125
200,000 Constellation Energy Group............................................................. 6,512,500
135,000 CP&L, Inc.............................................................................. 4,311,562
337,500 DPL, Inc............................................................................... 7,403,906
232,500 DQE, Inc............................................................................... 9,183,750
140,000 DTE Energy Co.......................................................................... 4,278,750
141,216 Duke Energy Corp....................................................................... 7,961,052
140,000 Edison International................................................................... 2,870,000
220,000 Energy East Corp....................................................................... 4,193,750
200,000 Entergy Corp........................................................................... 5,437,500
200,000 FPL Group, Inc......................................................................... 9,900,000
135,000 GPU, Inc............................................................................... 3,653,437
75,000 Hawaiian Electric Industries, Inc...................................................... 2,460,937
400,000 IPALCO Enterprises, Inc................................................................ 8,050,000
305,000 Montana Power Co....................................................................... 10,770,312
195,000 New Century Energies, Inc.............................................................. 5,850,000
280,000 NiSource Inc........................................................................... 5,215,000
140,000 NRG Energy, Inc.*...................................................................... 2,555,000
195,000 Pinnacle West Capital Corp............................................................. 6,605,625
160,000 Public Service Company of New Mexico................................................... 2,470,000
115,000 Public Service Enterprise Group, Inc................................................... 3,981,875
200,000 Reliant Energy, Inc.................................................................... 5,912,500
215,000 SCANA Corp............................................................................. 5,186,875
120,500 Scottish Power PLC (ADR) (United Kingdom).............................................. 4,029,219
265,000 Southern Co............................................................................ 6,177,812
161,500 TXU Corp............................................................................... 4,764,250
200,000 Wisconsin Energy Corp.................................................................. 3,962,500
------------
177,701,678
------------
ENERGY (11.5%)
143,625 Burlington Resources, Inc.............................................................. 5,493,656
215,000 Dynegy, Inc. (Class A)................................................................. 14,687,187
230,460 El Paso Energy Corp.................................................................... 11,739,056
261,500 Enron Corp............................................................................. 16,866,750
155,000 Questar Corp........................................................................... 3,003,125
290,000 Williams Companies, Inc................................................................ 12,089,375
------------
63,879,149
------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
TELECOMMUNICATIONS (44.6%)
161,932 ALLTEL Corp............................................................................ $ 10,029,663
253,177 AT&T Corp.............................................................................. 8,006,723
170,000 BCE, Inc. (Canada)..................................................................... 4,048,125
154,320 Bell Atlantic Corp.*................................................................... 7,841,385
120,000 BroadWing Inc.*........................................................................ 3,112,500
190,000 Cable & Wireless PLC (ADR) (United Kingdom)............................................ 9,511,875
288,750 CenturyTel, Inc........................................................................ 8,301,563
760,000 Ericsson (L.M.) Telefonaktiebolaqet (ADR) (Sweden)..................................... 15,200,000
303,250 Global Crossing Ltd. (Bermuda)*........................................................ 7,979,266
140,000 Global Telesystems Group, Inc.*........................................................ 1,688,750
140,000 GTE Corp............................................................................... 8,715,000
87,968 Lucent Technologies Inc................................................................ 5,212,104
120,000 MediaOne Group, Inc.*.................................................................. 7,957,650
140,000 Nextel Communications, Inc. (Class A)*................................................. 8,566,250
266,965 Nortel Networks Corp. (Canada)......................................................... 18,220,361
311,508 Qwest Communications International, Inc.*.............................................. 15,478,054
215,000 RCN Corp.*............................................................................. 5,442,188
298,946 SBC Communications, Inc................................................................ 12,929,415
215,000 Sprint Corp. (FON Group)............................................................... 10,965,000
100,000 Sprint Corp. (PCS Group)*.............................................................. 5,950,000
130,000 Tele Danmark AS (ADR) (Denmark)........................................................ 4,420,000
120,000 Telecom Corp. of New Zealand Ltd. (ADR) (New Zealand).................................. 3,375,000
160,000 Telefonos de Mexico S.A. (Series L) (ADR).............................................. 9,140,000
100,000 Telephone & Data Systems, Inc.......................................................... 10,025,000
206,000 Telstra Corp. Ltd. (ADR) (Australia)................................................... 4,261,625
112,867 U.S. West, Inc......................................................................... 9,678,345
230,000 Vodafone AirTouch PLC (ADR) (United Kingdom)........................................... 9,530,625
55,000 Voicestream Wireless Corp.*............................................................ 6,397,188
124,050 WinStar Communications, Inc.*.......................................................... 4,202,194
236,163 WorldCom, Inc.*........................................................................ 10,833,978
------------
247,019,827
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $266,540,293)......................................................... 488,600,654
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
35
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - UTILITIES
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
CORPORATE BONDS (6.2%)
ELECTRIC UTILITIES (3.3%)
$ 2,250 Consumers Energy Co.
6.875% due 03/01/18.................................................................. $ 1,927,845
2,000 Empresa Nacional de Electricidad (Chile)
8.125% due 02/01/97.................................................................. 1,562,500
3,000 Indianapolis Power Co.
7.05% due 02/01/24................................................................... 2,656,890
1,500 Northern States Power Co.
6.50% due 03/01/28................................................................... 1,272,735
2,125 Public Service Electric & Gas Co.
6.75% due 01/01/16................................................................... 1,909,079
3,000 Public Service Electric & Gas Co.
7.00% due 09/01/24................................................................... 2,609,910
2,000 Southwestern Public Service
8.50% due 02/15/25................................................................... 2,000,000
5,000 Wisconsin Electric Power Co.
7.125% due 03/15/16.................................................................. 4,591,800
------------
18,530,759
------------
ENERGY (1.7%)
500 CMS Panhandle Holding Co.
7.00% due 07/15/29................................................................... 439,935
3,000 Coastal Corp.
7.75% due 10/15/35................................................................... 2,844,960
2,000 Northern Border Pipeline
7.75% due 09/01/09................................................................... 1,945,380
2,000 Panhandle Eastern Corp.
8.625% due 04/15/25.................................................................. 2,118,080
2,000 Sempra Energy
7.95% due 03/01/10................................................................... 2,022,820
------------
9,371,175
------------
TELECOMMUNICATIONS (1.2%)
2,000 360 DEG. Communications Co. 6.65% due 01/15/08......................................... 1,851,920
2,000 GTE Corp.
7.90% due 02/01/27................................................................... 1,894,440
500 LCI International, Inc.
7.25% due 06/15/07................................................................... 482,155
2,000 Sprint Corp.
9.25% due 04/15/22................................................................... 2,200,600
------------
6,429,115
------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $36,719,188).......................................................... 34,331,049
------------
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
U.S. GOVERNMENT AGENCY (0.2%)
$ 50 Tennessee Valley Authority 8.00% due 03/31/45
(IDENTIFIED COST $1,250,000)......................................................... $ 1,231,250
------------
</TABLE>
<TABLE>
<CAPTION>
<C> <S> <C>
SHORT-TERM INVESTMENTS (5.3%)
U.S. GOVERNMENT AGENCY (A) (5.3%)
29,050 Federal Home Loan Banks 6.57% due 07/03/00 (AMORTIZED COST $29,039,397)................. 29,039,397
------------
REPURCHASE AGREEMENT (0.0%)
106 The Bank of New York
7.00% due 07/03/00
(dated 06/30/00; proceeds
$106,131) (b) (IDENTIFIED COST $106,069)................................................ 106,069
------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $29,145,466)........................................................... 29,145,466
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $333,654,947) (C)........................................................ 99.8% 553,308,419
OTHER ASSETS IN EXCESS OF LIABILITIES..................................................... 0.2 1,202,334
----- -------------
NET ASSETS................................................................................ 100.0% $ 554,510,753
----- -------------
----- -------------
</TABLE>
---------------------
ADR American Depository Receipt.
* Non-income producing security.
(a) Purchased on a discount basis. The interest rate shown has been adjusted to
reflect a money market equivalent yield.
(b) Collateralized by $105,254 Federal Home Loan Bank 6.75% due 02/01/02 valued
at $108,192.
(c) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $233,391,099 and the
aggregate gross unrealized depreciation is $13,737,627, resulting in net
unrealized appreciation of $219,653,472.
SEE NOTES TO FINANCIAL STATEMENTS
36
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - INCOME BUILDER
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS AND RIGHTS (46.9%)
AUTO PARTS: O.E.M. (2.2%)
49,000 Delphi Automotive Systems Corp. ...................................... $ 713,562
14,500 Johnson Controls, Inc................................................. 744,043
-----------
1,457,605
-----------
BUILDING MATERIALS (1.1%)
17,500 Vulcan Materials Co. ................................................. 747,031
-----------
CELLULAR TELEPHONE (0.0%)
688 Leap Wireless International, Inc.*.................................... 32,293
-----------
CONSUMER ELECTRONICS/APPLIANCES (1.0%)
13,500 Whirlpool Corp. ...................................................... 629,437
-----------
DIVERSIFIED ELECTRONIC PRODUCTS (1.0%)
21,500 Rockwell International Corp........................................... 677,250
-----------
DIVERSIFIED MANUFACTURING (1.1%)
21,000 Honeywell International, Inc.......................................... 707,437
-----------
ELECTRIC UTILITIES (4.8%)
17,500 Dominion Resources, Inc............................................... 750,312
17,000 FPL Group, Inc........................................................ 841,500
28,000 Reliant Energy, Inc................................................... 827,750
37,000 TECO Energy, Inc...................................................... 742,312
-----------
3,161,874
-----------
ELECTRICAL PRODUCTS (1.3%)
14,000 Emerson Electric Co. ................................................. 845,250
-----------
FINANCE COMPANIES (1.1%)
13,300 Fannie Mae............................................................ 694,094
-----------
FOOD CHAINS (1.1%)
22,000 Albertson's, Inc...................................................... 731,500
-----------
FOOD DISTRIBUTORS (1.1%)
37,000 Supervalu, Inc........................................................ 705,312
-----------
LIFE INSURANCE (1.2%)
22,000 Lincoln National Corp................................................. 794,750
-----------
MAJOR BANKS (2.4%)
15,500 Bank of America Corp. ................................................ 666,500
19,500 Chase Manhattan Corp. (The)........................................... 898,219
-----------
1,564,719
-----------
MAJOR CHEMICALS (2.1%)
23,000 Dow Chemical Co....................................................... 694,312
20,500 Rohm & Haas Co. ...................................................... 707,250
-----------
1,401,562
-----------
MAJOR PHARMACEUTICALS (1.4%)
18,000 Schering-Plough Corp.................................................. 909,000
-----------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------
<C> <S> <C>
MAJOR U.S. TELECOMMUNICATIONS (3.1%)
21,000 AT&T Corp. ........................................................... $ 664,125
14,000 Bell Atlantic Corp.................................................... 711,375
10,500 GTE Corp.............................................................. 653,625
-----------
2,029,125
-----------
MEAT/POULTRY/FISH (1.0%)
36,000 ConAgra, Inc. ........................................................ 686,250
-----------
MOTOR VEHICLES (1.1%)
16,500 Ford Motor Co......................................................... 709,500
-----------
OFFICE EQUIPMENT/SUPPLIES (1.2%)
38,000 Xerox Corp............................................................ 788,500
-----------
OIL & GAS PRODUCTION (1.2%)
13,000 Kerr-McGee Corp....................................................... 766,188
-----------
OIL REFINING/MARKETING (2.4%)
23,000 Ashland, Inc.......................................................... 806,438
31,500 Ultramar Diamond Shamrock Corp. ...................................... 781,594
-----------
1,588,032
-----------
OTHER CONSUMER SERVICES (0.3%)
20,000 Cendant Corp. (Rights)*............................................... 168,750
-----------
PAINTS/COATINGS (1.1%)
17,000 PPG Industries, Inc................................................... 753,313
-----------
REAL ESTATE INVESTMENT TRUSTS (9.1%)
22,000 Archstone Communities Trust........................................... 463,375
10,000 Avalonbay Communities, Inc............................................ 417,500
13,500 Boston Properties, Inc................................................ 521,438
21,000 Duke-Weeks Realty Corp................................................ 469,875
18,000 Equity Office Properties Trust........................................ 496,125
5,000 Equity Residential Properties Trust................................... 230,000
16,000 First Industrial Realty Trust, Inc.................................... 472,000
27,000 Healthcare Realty Trust, Inc. ........................................ 460,688
20,000 Mack-Cali Realty Corp................................................. 513,750
24,000 MeriStar Hospitality Corp. ........................................... 504,000
21,000 Reckson Associates Realty Corp. ...................................... 498,750
18,000 Simon Property Group, Inc. ........................................... 399,375
14,000 Vornado Realty Trust.................................................. 486,500
-----------
5,933,376
-----------
RENTAL/LEASING COMPANIES (0.9%)
31,000 Ryder System, Inc..................................................... 587,063
-----------
SAVINGS & LOAN ASSOCIATIONS (1.3%)
29,500 Washington Mutual, Inc. .............................................. 851,813
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
37
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - INCOME BUILDER
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------
<C> <S> <C>
TOBACCO (1.3%)
32,000 Philip Morris Companies, Inc.......................................... $ 850,000
-----------
TOTAL COMMON STOCKS AND RIGHTS
(IDENTIFIED COST $32,402,883)......................................... 30,771,024
-----------
CONVERTIBLE PREFERRED STOCKS (15.6%)
AUTO PARTS: O.E.M. (0.0%)
12,000 BTI Capital Trust
$3.25 - 144A**...................................................... 1,500
-----------
BOOKS/MAGAZINES (1.3%)
25,000 Reader's Digest Association, Inc $1.93................................ 875,000
-----------
CONTAINERS/PACKAGING (1.5%)
20,000 Sealed Air Corp. (Series A) $2.00..................................... 1,012,500
-----------
INDUSTRIAL MACHINERY/COMPONENTS (0.9%)
28,000 Ingersoll-Rand Co. $1.69.............................................. 570,500
-----------
INTERNATIONAL BANKS (2.3%)
30,200 National Australia Bank, Ltd. $1.97 (Australia) (Units)++............. 855,037
19,500 WBK Strypes Trust $3.14............................................... 643,500
-----------
1,498,537
-----------
INVESTMENT BANKERS/BROKERS/
SERVICES (0.4%)
15,940 Merrill Lynch & Co., Inc. $2.39 (exchangeable into IMC Global, Inc.
common stock)....................................................... 242,089
-----------
MOVIES/ENTERTAINMENT (2.3%)
34,000 Premier Parks, Inc. $4.05............................................. 1,513,000
-----------
OIL REFINING/MARKETING (0.8%)
50,000 Tesoro Petroleum Corp. $1.16.......................................... 543,750
-----------
OTHER TELECOMMUNICATIONS (0.8%)
19,400 Metromedia International Group, Inc. $3.63............................ 543,200
-----------
PACKAGE GOODS/COSMETICS (1.7%)
13,000 Estee Lauder Co. $3.81................................................ 1,098,500
-----------
RAILROADS (0.5%)
7,400 Union Pacific Capital Trust $3.13..................................... 305,391
-----------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------
<C> <S> <C>
REAL ESTATE INVESTMENT TRUSTS (1.7%)
9,000 Equity Residential Properties Trust (Series E) $1.75.................. $ 231,750
30,000 SL Green Realty Corp. $2.00........................................... 849,375
-----------
1,081,125
-----------
SMALLER BANKS (1.4%)
30,000 CNB Capital Trust I $1.50............................................. 937,500
-----------
TOTAL CONVERTIBLE PREFERRED STOCKS
(IDENTIFIED COST $11,399,395)......................................... 10,222,592
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS
---------
<C> <S> <C>
CORPORATE BONDS (31.1%)
CONVERTIBLE BONDS (15.8%)
ASSISTED LIVING SERVICES (0.1%)
$ 120 Emeritus Corp. - 144A**
6.25% due 01/01/06............................................................ 84,044
-----------
AUTO PARTS: O.E.M. (0.4%)
350 MascoTech, Inc. 4.50% due
12/15/03...................................................................... 264,250
-----------
CABLE TELEVISION (1.0%)
675 EchoStar Communications - 144A** 4.875% due 01/01/07............................ 645,395
-----------
CLOTHING/SHOE/ACCESSORY STORES (1.1%)
790 Genesco Inc. 5.50% due
04/15/05...................................................................... 734,297
-----------
DIVERSIFIED ELECTRONIC PRODUCTS (3.0%)
2,000 SCI Systems, Inc. 3.00% due
03/15/07...................................................................... 1,960,840
-----------
ELECTRONIC PRODUCTION EQUIPMENT (0.8%)
460 Photronics Inc. 6.00% due
06/01/04...................................................................... 526,428
-----------
INDUSTRIAL MACHINERY/COMPONENTS (0.3%)
200 Thermo Fibertek, Inc. - 144A** 4.50% due 07/15/04............................... 166,354
-----------
INTERNET SERVICES (3.4%)
5,000 AT Home Corp. 0.525% due
12/28/18...................................................................... 2,260,100
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
38
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - INCOME BUILDER
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
--------------------------------------------------------------------------------------------------------
<C> <S> <C>
MAJOR U.S. TELECOMMUNICATIONS (3.4%)
$ 800 Bell Atlantic Financial Service - 144A** (exchangeable into Cable & Wireless
Communications common stock) 4.25% due 09/15/05............................... $ 974,000
1,300 Bell Atlantic Financial Service - 144A** (exchangeable into Telecom Corporation
of New Zealand common stock) 5.75% due 04/01/03............................... 1,265,875
-----------
2,239,875
-----------
OTHER TELECOMMUNICATIONS (2.3%)
2,000 Efficient Networks, Inc. - 144A** 5.00% due 03/15/05............................ 1,500,000
-----------
TOTAL CONVERTIBLE BONDS
(IDENTIFIED COST $10,311,238)................................................... 10,381,583
-----------
</TABLE>
<TABLE>
<CAPTION>
<C> <S> <C>
NON-CONVERTIBLE BONDS (15.3%)
BROADCASTING (2.5%)
600 EZ Communications, Inc. 9.75% due 12/01/05...................................... 634,056
1,000 Young Broadcasting Corp. 11.75% due 11/15/04.................................... 1,005,000
-----------
1,639,056
-----------
BUILDING MATERIALS (0.8%)
500 USG Corp. (Series B) 9.25%
due 09/15/01.................................................................. 507,975
-----------
MANAGED HEALTH CARE (1.0%)
700 Healthsouth Corp.
9.50% due 04/01/01............................................................ 701,750
-----------
METALS FABRICATIONS (1.0%)
600 Ivaco, Inc. (Canada) 11.50% due 09/15/05........................................ 636,000
-----------
OTHER METALS/MINERALS (3.9%)
2,500 Cyprus Amax Minerals Inc.
10.125% due 04/01/02.......................................................... 2,588,425
-----------
OTHER TELECOMMUNICATIONS (1.9%)
1,150 Sprint Spectrum L.P. 11.00%
due 08/15/06.................................................................. 1,247,451
-----------
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
--------------------------------------------------------------------------------------------------------
<C> <S> <C>
SPECIALTY CHEMICALS (2.9%)
$ 1,875 Huntsman Polymers Corp.
11.75% due 12/01/04........................................................... $ 1,903,125
-----------
TEXTILES (1.3%)
862 Dan River, Inc. 10.125% due
12/15/03...................................................................... 836,140
-----------
TOTAL NON-CONVERTIBLE BONDS
(IDENTIFIED COST $10,693,832)................................................... 10,059,922
-----------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $21,005,070)................................................... 20,441,505
-----------
</TABLE>
<TABLE>
<CAPTION>
<C> <S> <C>
SHORT-TERM INVESTMENT (A) (6.0%)
U.S. GOVERNMENT AGENCY
3,950 Federal Home Loans Banks 6.57% due 07/03/00 (AMORTIZED COST $3,948,558)................. 3,948,558
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $68,755,906) (B).......................................................... 99.6% 65,383,679
OTHER ASSETS IN EXCESS OF LIABILITIES...................................................... 0.4 290,790
----- ------------
NET ASSETS................................................................................. 100.0% $ 65,674,469
----- ------------
----- ------------
</TABLE>
---------------------
* Non-income producing securities.
** Resale is restricted to qualified institutional investors.
++ Consists of one or more class of securities traded together as a unit;
stocks with attached warrants.
(a) Purchased on a discount basis. The interest rate shown has been adjusted to
reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $2,948,287 and the
aggregate gross unrealized depreciation is $6,320,514, resulting in net
unrealized depreciation of $3,372,227.
SEE NOTES TO FINANCIAL STATEMENTS
39
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - DIVIDEND GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (98.6%)
AEROSPACE (2.6%)
590,000 Goodrich (B.F.) Co. (The)........................................................... $ 20,096,875
340,000 United Technologies Corp............................................................ 20,017,500
--------------
40,114,375
--------------
ALUMINUM (2.6%)
670,000 Alcan Aluminium, Ltd. (Canada)...................................................... 20,770,000
690,000 Alcoa, Inc.......................................................................... 20,010,000
--------------
40,780,000
--------------
APPAREL (1.3%)
815,000 VF Corp............................................................................. 19,407,187
--------------
AUTO PARTS: O.E.M. (4.8%)
830,000 Dana Corp........................................................................... 17,585,625
1,280,000 Delphi Automotive Systems Corp...................................................... 18,640,000
365,000 Johnson Controls, Inc............................................................... 18,729,062
440,000 TRW Inc............................................................................. 19,085,000
54,992 Visteon Corp.*...................................................................... 666,778
--------------
74,706,465
--------------
AUTOMOTIVE AFTERMARKET (1.1%)
830,000 Goodyear Tire & Rubber Co........................................................... 16,600,000
--------------
BEVERAGES - NON-ALCOHOLIC (2.7%)
345,000 Coca Cola Co........................................................................ 19,815,937
475,000 PepsiCo, Inc........................................................................ 21,107,812
--------------
40,923,749
--------------
CONSTRUCTION/AGRICULTURAL EQUIPMENT/TRUCKS (2.4%)
540,000 Caterpillar, Inc.................................................................... 18,292,500
485,000 Deere & Co.......................................................................... 17,945,000
--------------
36,237,500
--------------
CONSUMER ELECTRONICS/APPLIANCES (1.1%)
375,000 Whirlpool Corp...................................................................... 17,484,375
--------------
DEPARTMENT STORES (1.3%)
600,000 Sears, Roebuck & Co................................................................. 19,575,000
--------------
DISCOUNT CHAINS (1.4%)
360,000 Target Corp......................................................................... 20,880,000
--------------
DIVERSIFIED FINANCIAL SERVICES (1.3%)
215,000 Providian Financial Corp............................................................ 19,350,000
--------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
DIVERSIFIED MANUFACTURING (3.9%)
575,000 Honeywell International, Inc........................................................ $ 19,370,312
235,000 Minnesota Mining & Manufacturing Co................................................. 19,387,500
440,000 Tyco International Ltd. (Bermuda)................................................... 20,845,000
--------------
59,602,812
--------------
E.D.P. SERVICES (1.3%)
480,000 Electronic Data Systems Corp........................................................ 19,800,000
--------------
ELECTRIC UTILITIES (6.4%)
455,923 Dominion Resources, Inc............................................................. 19,547,699
420,000 FPL Group, Inc...................................................................... 20,790,000
690,000 GPU, Inc............................................................................ 18,673,125
685,000 Reliant Energy, Inc................................................................. 20,250,312
505,000 Unicom Corp......................................................................... 19,537,187
--------------
98,798,323
--------------
ELECTRONIC DATA PROCESSING (2.6%)
170,000 Hewlett-Packard Co.................................................................. 21,228,750
175,000 International Business Machines Corp................................................ 19,173,437
--------------
40,402,187
--------------
FINANCE COMPANIES (3.7%)
860,000 Associates First Capital Corp. (Class A)............................................ 19,188,750
345,500 Fannie Mae.......................................................................... 18,030,781
470,000 Household International, Inc........................................................ 19,534,375
--------------
56,753,906
--------------
FOOD CHAINS (1.5%)
600,000 Albertson's, Inc.................................................................... 19,950,000
186,700 Winn-Dixie Stores, Inc.............................................................. 2,672,144
--------------
22,622,144
--------------
FOOD DISTRIBUTORS (2.7%)
1,030,000 Supervalu, Inc...................................................................... 19,634,375
515,000 SYSCO Corp.......................................................................... 21,694,375
--------------
41,328,750
--------------
FOREST PRODUCTS (1.2%)
425,000 Weyerhaeuser Co..................................................................... 18,275,000
--------------
INTEGRATED OIL COMPANIES (3.9%)
355,000 BP Amoco PLC (ADR).................................................................. 20,079,687
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
40
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - DIVIDEND GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
255,000 Exxon Mobil Corp.................................................................... $ 20,017,500
330,000 Royal Dutch Petroleum Co. (ADR) (Netherlands)....................................... 20,315,625
--------------
60,412,812
--------------
LIFE INSURANCE (3.8%)
560,000 Aegon N.V. (ARS) (Netherlands)...................................................... 19,950,000
325,000 Jefferson-Pilot Corp................................................................ 18,342,188
555,000 Lincoln National Corp............................................................... 20,049,375
--------------
58,341,563
--------------
MAJOR BANKS (3.4%)
400,000 Bank of America Corp................................................................ 17,200,000
1,020,000 KeyCorp............................................................................. 17,977,500
160,000 Morgan (J.P.) & Co., Inc............................................................ 17,620,000
--------------
52,797,500
--------------
MAJOR CHEMICALS (2.3%)
605,000 Dow Chemical Co..................................................................... 18,263,438
405,000 Du Pont (E.I.) de Nemours & Co., Inc................................................ 17,718,750
--------------
35,982,188
--------------
MAJOR PHARMACEUTICALS (5.3%)
350,000 American Home Products Corp......................................................... 20,562,500
360,000 Bristol-Myers Squibb Co............................................................. 20,970,000
380,000 Pharmacia Corp...................................................................... 19,641,250
420,000 Schering-Plough Corp................................................................ 21,210,000
--------------
82,383,750
--------------
MAJOR U.S. TELECOMMUNICATIONS (2.4%)
365,000 Bell Atlantic Corp.................................................................. 18,546,563
295,000 GTE Corp............................................................................ 18,363,750
--------------
36,910,313
--------------
MANAGED HEALTH CARE (1.3%)
305,000 Aetna Inc........................................................................... 19,577,188
--------------
MOTOR VEHICLES (3.7%)
385,000 DaimlerChrysler AG (Germany)........................................................ 20,044,063
420,000 Ford Motor Co....................................................................... 18,060,000
305,000 General Motors Corp................................................................. 17,709,063
--------------
55,813,126
--------------
MULTI-SECTOR COMPANIES (1.4%)
420,000 General Electric Co................................................................. 22,260,000
--------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
OFFICE EQUIPMENT/SUPPLIES (2.6%)
505,000 Pitney Bowes, Inc................................................................... $ 20,200,000
960,000 Xerox Corp.......................................................................... 19,920,000
--------------
40,120,000
--------------
OIL & GAS PRODUCTION (1.3%)
350,000 Kerr-McGee Corp..................................................................... 20,628,125
--------------
OIL REFINING/MARKETING (2.5%)
675,000 Sunoco, Inc......................................................................... 19,870,313
755,000 USX-Marathon Group.................................................................. 18,922,188
--------------
38,792,501
--------------
OIL/GAS TRANSMISSION (2.5%)
400,000 El Paso Energy Corp................................................................. 20,375,000
280,000 Enron Corp.......................................................................... 18,060,000
--------------
38,435,000
--------------
OTHER METALS/MINERALS (1.2%)
510,000 Phelps Dodge Corp................................................................... 18,965,625
--------------
PACKAGE GOODS/COSMETICS (4.1%)
500,000 Avon Products, Inc.................................................................. 22,250,000
370,000 Kimberly-Clark Corp................................................................. 21,228,750
345,000 Procter & Gamble Co................................................................. 19,751,250
--------------
63,230,000
--------------
PACKAGED FOODS (1.3%)
275,000 Quaker Oats Company (The)........................................................... 20,659,375
--------------
PAINTS/COATINGS (1.2%)
430,000 PPG Industries, Inc................................................................. 19,054,375
--------------
PAPER (2.3%)
600,000 International Paper Co.............................................................. 17,887,500
700,000 Mead Corp........................................................................... 17,675,000
--------------
35,562,500
--------------
PHOTOGRAPHIC PRODUCTS (1.3%)
340,000 Eastman Kodak Co.................................................................... 20,230,000
--------------
RAILROADS (2.5%)
830,000 Burlington Northern Santa Fe Corp................................................... 19,038,125
910,000 CSX Corp............................................................................ 19,280,625
--------------
38,318,750
--------------
RENTAL/LEASING COMPANIES (1.1%)
910,000 Ryder System, Inc................................................................... 17,233,125
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
41
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - DIVIDEND GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
SEMICONDUCTORS (1.3%)
152,000 Intel Corp.......................................................................... $ 20,311,000
--------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $1,619,309,954).................................................... 1,519,660,589
--------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS
----------
<C> <S> <C>
SHORT-TERM INVESTMENT (A) (1.3%)
U.S. GOVERNMENT AGENCY
$ 19,200 Federal Home Loan Banks 6.57% due 07/03/00 (AMORTIZED COST $19,192,992)............. 19,192,992
--------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $1,638,502,946) (B).................................................... 99.9% 1,538,853,581
OTHER ASSETS IN EXCESS OF LIABILITIES................................................... 0.1 1,845,508
----- ---------------
NET ASSETS.............................................................................. 100.0% $ 1,540,699,089
----- ---------------
----- ---------------
</TABLE>
---------------------
ADR American Depository Receipt.
ARS American Registered Shares.
(a) Purchased on a discount basis. The interest rate shown has been adjusted to
reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $141,093,631 and the
aggregate gross unrealized depreciation is $240,742,996, resulting in net
unrealized depreciation of $99,649,365.
SEE NOTES TO FINANCIAL STATEMENTS
42
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - CAPITAL GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (90.4%)
AEROSPACE (0.8%)
30,000 Goodrich (B.F.) Co. (The).............................................................. $ 1,021,875
7,500 United Technologies Corp............................................................... 441,562
------------
1,463,437
------------
AIRLINES (0.6%)
40,000 AMR Corp.*............................................................................. 1,057,500
------------
BEVERAGES - NON-ALCOHOLIC (0.9%)
60,000 Pepsi Bottling Group, Inc. (The)....................................................... 1,751,250
------------
BROADCASTING (1.5%)
20,000 Clear Channel Communications, Inc.*.................................................... 1,500,000
40,000 Westwood One, Inc.*.................................................................... 1,365,000
------------
2,865,000
------------
CABLE TELEVISION (0.5%)
15,000 Cablevision Systems Corp. (Class A)*................................................... 1,018,125
------------
CATALOG/SPECIALTY DISTRIBUTION (0.2%)
6,000 CDW Computer Centers, Inc.*............................................................ 375,000
------------
COMPUTER COMMUNICATIONS (2.0%)
60,000 Cisco Systems, Inc.*................................................................... 3,813,750
------------
COMPUTER SOFTWARE (4.0%)
12,500 Mercury Interactive Corp.*............................................................. 1,209,375
40,000 Microsoft Corp.*....................................................................... 3,197,500
40,000 Oracle Corp.*.......................................................................... 3,360,000
------------
7,766,875
------------
CONSTRUCTION/AGRICULTURAL EQUIPMENT/TRUCKS (0.2%)
13,500 Caterpillar, Inc....................................................................... 457,312
------------
CONTRACT DRILLING (2.9%)
25,000 ENSCO International Inc................................................................ 895,312
30,000 Marine Drilling Companies, Inc.*....................................................... 840,000
25,000 Noble Drilling Corp.*.................................................................. 1,029,687
50,000 Rowan Companies, Inc.*................................................................. 1,518,750
25,000 Transocean Sedco Forex Inc.*........................................................... 1,335,937
------------
5,619,686
------------
DISCOUNT CHAINS (0.3%)
10,000 Wal-Mart Stores, Inc................................................................... 576,250
------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
DIVERSIFIED ELECTRONIC PRODUCTS (2.0%)
1,100 Exfo Electro-Optical Engineering Inc. (Canada)*........................................ $ 48,262
15,000 JDS Uniphase Corp.*.................................................................... 1,797,187
125,000 Sensormatic Electronics Corp.*......................................................... 1,976,562
------------
3,822,011
------------
DIVERSIFIED FINANCIAL SERVICES (2.9%)
75,000 AXA Financial, Inc..................................................................... 2,550,000
50,000 Citigroup, Inc......................................................................... 3,012,500
------------
5,562,500
------------
DIVERSIFIED MANUFACTURING (1.2%)
10,000 Dover Corp............................................................................. 405,625
40,000 Tyco International Ltd. (Bermuda)...................................................... 1,895,000
------------
2,300,625
------------
E.D.P. PERIPHERALS (0.2%)
6,000 Network Appliance, Inc.*............................................................... 482,625
------------
ELECTRIC UTILITIES (0.9%)
25,000 Dynegy, Inc. (Class A)................................................................. 1,707,812
------------
ELECTRICAL PRODUCTS (0.7%)
25,000 C&D Technologies, Inc.*................................................................ 1,412,500
------------
ELECTRONIC COMPONENTS (4.7%)
26,400 Amphenol Corp. (Class A)*.............................................................. 1,747,350
25,000 Burr-Brown Corp.*...................................................................... 2,167,187
40,000 Flextronics International, Ltd. (Singapore)*........................................... 2,747,500
25,000 Kemet Corp.*........................................................................... 626,562
25,000 Sawtek, Inc.*.......................................................................... 1,439,063
8,000 Vishay Intertechnology, Inc.*.......................................................... 303,500
------------
9,031,162
------------
ELECTRONIC DATA PROCESSING (1.5%)
25,000 Compaq Computer Corp................................................................... 639,063
25,000 Sun Microsystems, Inc.*................................................................ 2,273,438
------------
2,912,501
------------
ELECTRONIC DISTRIBUTORS (0.6%)
25,000 Arrow Electronics, Inc.*............................................................... 775,000
5,000 Avnet, Inc............................................................................. 296,250
------------
1,071,250
------------
ELECTRONIC PRODUCTION EQUIPMENT (4.0%)
25,000 Applied Materials, Inc.*............................................................... 2,265,625
30,000 Cognex Corp.*.......................................................................... 1,550,625
40,000 Lam Research Corp.*.................................................................... 1,500,000
25,000 PRI Automation, Inc.*.................................................................. 1,634,375
10,000 Teradyne, Inc.*........................................................................ 735,000
------------
7,685,625
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
43
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - CAPITAL GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
ENGINEERING & CONSTRUCTION (0.4%)
15,000 Quanta Services, Inc.*................................................................. $ 825,000
------------
FINANCE COMPANIES (1.3%)
35,000 Capital One Financial Corp............................................................. 1,561,875
30,000 CompuCredit Corp.*..................................................................... 896,250
------------
2,458,125
------------
FOOD CHAINS (1.2%)
100,000 Kroger Co.*............................................................................ 2,206,250
------------
GENERIC DRUGS (2.2%)
20,000 Alpharma Inc. (Class A)................................................................ 1,245,000
70,000 Ivax Corp.*............................................................................ 2,905,000
------------
4,150,000
------------
HOSPITAL/NURSING MANAGEMENT (0.6%)
40,000 HCA-The Healthcare Corp................................................................ 1,215,000
------------
INDUSTRIAL SPECIALTIES (2.0%)
50,000 Millipore Corp......................................................................... 3,768,750
------------
INSURANCE BROKERS/SERVICES (0.8%)
15,000 Marsh & McLennan Companies, Inc........................................................ 1,566,563
------------
INTEGRATED OIL COMPANIES (2.2%)
60,000 BP Amoco PLC (ADR)*.................................................................... 3,393,750
15,000 Murphy Oil Corp........................................................................ 891,563
------------
4,285,313
------------
INVESTMENT BANKERS/BROKERS/SERVICES (0.8%)
40,000 Edwards (A.G.), Inc.................................................................... 1,560,000
------------
MAJOR BANKS (0.9%)
15,000 Bank of America Corp................................................................... 645,000
30,000 Wells Fargo & Co....................................................................... 1,162,500
------------
1,807,500
------------
MAJOR PHARMACEUTICALS (4.0%)
50,000 American Home Products Corp............................................................ 2,937,500
15,000 Lilly (Eli) & Co....................................................................... 1,498,125
68,750 Pfizer Inc............................................................................. 3,300,000
------------
7,735,625
------------
MANAGED HEALTH CARE (1.7%)
30,000 Aetna Inc.............................................................................. 1,925,625
25,000 Trigon Healthcare, Inc.*............................................................... 1,289,063
------------
3,214,688
------------
MEDIA CONGLOMERATES (1.8%)
50,000 Viacom, Inc. (Class B)*................................................................ 3,409,375
------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
MEDICAL SPECIALTIES (1.9%)
40,000 Boston Scientific Corp.*............................................................... $ 877,500
75,000 Cooper Companies, Inc.................................................................. 2,728,125
------------
3,605,625
------------
MEDICAL/DENTAL DISTRIBUTORS (0.8%)
50,000 AmeriSource Health Corp. (Class A)*.................................................... 1,550,000
------------
MILITARY/GOV'T/TECHNICAL (0.5%)
15,000 PerkinElmer, Inc.*..................................................................... 991,875
------------
MULTI-LINE INSURANCE (1.5%)
25,000 American International Group, Inc...................................................... 2,937,500
------------
MULTI-SECTOR COMPANIES (2.5%)
35,000 Anixter International, Inc.*........................................................... 927,500
50,000 Crane Co............................................................................... 1,215,625
50,000 General Electric Co.................................................................... 2,650,000
------------
4,793,125
------------
NATURAL GAS (0.8%)
30,000 Equitable Resources, Inc............................................................... 1,447,500
------------
OIL & GAS PRODUCTION (3.6%)
40,000 Anardarko Petroleum Corp............................................................... 1,972,500
100,000 Chesapeake Energy Corp.*............................................................... 775,000
50,000 Newfield Exploration Co.*.............................................................. 1,956,250
40,000 Noble Affiliates, Inc.................................................................. 1,490,000
30,000 Pogo Producing Co...................................................................... 663,750
------------
6,857,500
------------
OIL REFINING/MARKETING (1.4%)
40,000 Tosco Corp............................................................................. 1,132,500
50,000 Valero Energy Corp..................................................................... 1,587,500
------------
2,720,000
------------
OIL/GAS TRANSMISSION (0.6%)
20,000 Coastal Corp........................................................................... 1,217,500
------------
OILFIELD SERVICES/EQUIPMENT (0.5%)
25,000 Weatherford International, Inc.*....................................................... 995,313
------------
OTHER PHARMACEUTICALS (2.3%)
30,000 Elan Corp. PLC (ADR) (Ireland)*........................................................ 1,453,125
16,000 Forest Laboratories, Inc.*............................................................. 1,616,000
25,000 Shire Pharmaceuticals Group PLC (ADR) (United Kingdom)*................................ 1,296,875
------------
4,366,000
------------
PACKAGE GOODS/COSMETICS (1.2%)
50,000 Avon Products, Inc..................................................................... 2,225,000
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
44
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - CAPITAL GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
PRECISION INSTRUMENTS (1.5%)
40,000 Tektronix, Inc......................................................................... $ 2,960,000
------------
PRINTING/FORMS (0.3%)
25,000 Donnelley (R.R.) & Sons Co............................................................. 564,063
------------
PROPERTY - CASUALTY INSURERS (2.8%)
75,000 ACE, Ltd. (Bermuda).................................................................... 2,100,000
20,000 Chubb Corp............................................................................. 1,230,000
60,000 Everest Re Group, Ltd. (Bermuda)....................................................... 1,972,500
------------
5,302,500
------------
RAILROADS (0.2%)
5,000 Kansas City Southern Industries, Inc................................................... 443,438
------------
R E I T - INDUSTRIAL/OFFICE (0.8%)
25,000 Boston Properties, Inc................................................................. 965,625
35,000 Cornerstone Properties, Inc............................................................ 630,000
------------
1,595,625
------------
SAVINGS & LOAN ASSOCIATIONS (0.6%)
30,000 Golden West Financial Corp............................................................. 1,224,375
------------
SEMICONDUCTORS (8.2%)
10,000 Analog Devices, Inc.*.................................................................. 760,000
25,000 Cypress Semiconductor Corp.*........................................................... 1,056,250
10,000 Elantec Semiconductor, Inc.*........................................................... 696,250
54,000 Fairchild Semiconductor Corp. (Class A)*............................................... 2,187,000
50,000 Integrated Device Technology, Inc.*.................................................... 3,000,000
25,000 Intel Corp............................................................................. 3,340,625
30,000 International Rectifier Corp.*......................................................... 1,680,000
25,000 Linear Technology Corp................................................................. 1,596,875
25,000 LSI Logic Corp.*....................................................................... 1,353,125
------------
15,670,125
------------
SHOE MANUFACTURING (0.4%)
10,000 Timberland Co.*........................................................................ 708,125
------------
SPECIALTY CHEMICALS (0.2%)
10,000 OM Group, Inc.......................................................................... 440,000
------------
SPECIALTY INSURERS (0.4%)
15,000 MGIC Investment Corp................................................................... 682,500
------------
TELECOMMUNICATION EQUIPMENT (3.4%)
15,000 Comverse Technology, Inc.*............................................................. 1,395,000
10,000 L-3 Communications Holdings, Inc.*..................................................... 570,625
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
35,000 Nokia Oyj (ADR) (Finland).............................................................. $ 1,747,813
40,000 Nortel Networks Corp. (Canada)......................................................... 2,730,000
------------
6,443,438
------------
TELECOMMUNICATIONS (0.5%)
75,000 Hellenic Telecommunication Organization S.A. (ADR) (Greece)*........................... 914,063
------------
TOBACCO (1.0%)
70,000 Philip Morris Companies, Inc........................................................... 1,859,375
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $152,094,691)......................................................... 173,469,550
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS
---------
<C> <S> <C>
SHORT-TERM INVESTMENT (A) (7.8%)
U.S. GOVERNMENT AGENCY
$ 14,900 Federal Home Loans Banks 6.57% due 07/03/00 (AMORTIZED COST $14,894,562)............... 14,894,562
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $166,989,253) (B)........................................................ 98.2% 188,364,112
OTHER ASSETS IN EXCESS OF LIABILITIES..................................................... 1.8 3,398,321
----- -------------
NET ASSETS................................................................................ 100.0% $ 191,762,433
----- -------------
----- -------------
</TABLE>
---------------------
ADR American Depository Receipt.
* Non-income producing security.
(a) Security was purchased on a discount basis. The interest rate shown has
been adjusted to reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $25,854,090 and the
aggregate gross unrealized depreciation is $4,479,231, resulting in net
unrealized appreciation of $21,374,859.
SEE NOTES TO FINANCIAL STATEMENTS
45
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - GLOBAL DIVIDEND GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS (96.6%)
AUSTRALIA (2.6%)
AIRLINES
900,000 Quantas Airways Ltd................................................... $ 1,813,032
------------
CONTAINERS/PACKAGING
550,000 Amcor Ltd............................................................. 1,914,680
------------
INTERNATIONAL BANKS
250,000 Australia & New Zealand Banking Group Ltd. ........................... 1,908,690
------------
OIL & GAS PRODUCTION
650,000 Santos Ltd. .......................................................... 1,971,866
------------
OTHER TELECOMMUNICATIONS
425,000 Telstra Corp., Ltd. .................................................. 1,717,374
------------
PRECIOUS METALS
3,000,000 Normandy Mining Ltd................................................... 1,609,200
------------
TOTAL AUSTRALIA....................................................... 10,934,842
------------
BELGIUM (0.8%)
DIVERSIFIED FINANCIAL SERVICES
115,000 Fortis (B Shares)..................................................... 3,345,363
------------
CANADA (2.4%)
ALUMINUM
60,000 Alcan Aluminium Ltd................................................... 1,863,983
------------
INTERNATIONAL BANKS
80,000 Toronto-Dominion Bank................................................. 1,945,026
------------
MULTI-SECTOR COMPANIES
175,000 EdperBrascan Corp. (Class A).......................................... 2,056,460
------------
OIL/GAS TRANSMISSION
108,400 Enbridge Inc.......................................................... 2,273,128
------------
TELECOMMUNICATIONS
75,000 Telus Corp. (Non-Voting).............................................. 1,998,210
------------
TOTAL CANADA.......................................................... 10,136,807
------------
FRANCE (6.8%)
AUTOMOTIVE AFTERMARKET
85,000 Compagnie Generale des Etablissements Michelin (B Shares)............. 2,726,578
------------
BUILDING MATERIALS
34,500 Lafarge S.A........................................................... 2,680,242
------------
<CAPTION>
NUMBER OF
SHARES VALUE
------------------------------------------------------------------------------------------------
<C> <S> <C>
DIVERSIFIED MANUFACTURING
22,500 Compagnie de Saint-Gobain............................................. $ 3,040,718
------------
INTERNATIONAL BANKS
35,000 Banque Nationale de Paris............................................. 3,367,123
60,000 Societe Generale (Series A)........................................... 3,607,632
------------
6,974,755
------------
MULTI-LINE INSURANCE
62,000 Assurances Generales de France........................................ 3,275,214
------------
MULTI-SECTOR COMPANIES
75,000 Compagnie Generale d'Industrie et de Participations................... 3,192,468
------------
OIL REFINING/MARKETING
23,000 Total S.A. (B Shares)................................................. 3,525,363
------------
TELECOMMUNICATION EQUIPMENT
55,000 Alcatel............................................................... 3,606,200
------------
TOTAL FRANCE.......................................................... 29,021,538
------------
GERMANY (6.5%)
APPAREL
19,500 Hugo Boss AG (Pref.) ................................................. 3,442,998
------------
DIVERSIFIED ELECTRONIC PRODUCTS
22,000 Siemens AG (Registered Shares)........................................ 3,306,996
------------
DIVERSIFIED MANUFACTURING
100,000 MAN AG................................................................ 3,058,852
------------
MAJOR CHEMICALS
70,000 BASF AG............................................................... 2,836,000
80,000 Bayer AG.............................................................. 3,115,162
------------
5,951,162
------------
MOTOR VEHICLES
50,000 DaimlerChrylser AG.................................................... 2,622,214
------------
MULTI-SECTOR COMPANIES
65,000 E. ON AG ............................................................. 3,188,650
160,000 Thyssen Krupp AG...................................................... 2,565,427
------------
5,754,077
------------
SHOE MANUFACTURING
57,000 Adidas-Salomon AG..................................................... 3,144,366
------------
TOTAL GERMANY......................................................... 27,280,665
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
46
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - GLOBAL DIVIDEND GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
------------------------------------------------------------------------------------------------
<C> <S> <C>
HONG KONG (2.0%)
REAL ESTATE
210,000 Cheung Kong (Holdings) Ltd............................................ $ 2,303,193
325,000 Sun Hung Kai Properties Ltd........................................... 2,334,620
------------
4,637,813
------------
TELECOMMUNICATIONS
800,000 Cable & Wireless HKT Ltd.............................................. 1,759,945
------------
UTILITIES
475,000 CLP Holdings Ltd...................................................... 2,211,796
------------
TOTAL HONG KONG....................................................... 8,609,554
------------
IRELAND (0.7%)
INTERNATIONAL BANKS
315,000 Allied Irish Banks PLC................................................ 2,819,966
------------
ITALY (2.3%)
CELLULAR TELEPHONE
550,000 Telecom Italia Mobile SpA............................................. 2,766,328
------------
INTERNATIONAL BANKS
225,000 San Paolo - IMI SpA .................................................. 3,992,017
------------
TELECOMMUNICATIONS
465,000 Telecom Italia SpA.................................................... 3,084,382
------------
TOTAL ITALY........................................................... 9,842,727
------------
JAPAN (14.2%)
ALCOHOLIC BEVERAGES
270,000 Kirin Brewery Co., Ltd................................................ 3,375,000
------------
CELLULAR TELEPHONE
115 NTT DoCoMo, Inc. ..................................................... 3,113,679
------------
CONSUMER ELECTRONICS/APPLIANCES
190,000 Sharp Corp............................................................ 3,360,849
33,000 Sony Corp............................................................. 3,082,075
------------
6,442,924
------------
DEPARTMENT STORES
180,000 Marui Co. Ltd. ....................................................... 3,447,170
------------
DIVERSIFIED ELECTRONIC PRODUCTS
22,000 Kyocera Corp.......................................................... 3,733,773
140,000 Matsushita Electric Industrial Co., Ltd............................... 3,632,075
115,000 NEC Corp.............................................................. 3,612,736
------------
10,978,584
------------
<CAPTION>
NUMBER OF
SHARES VALUE
------------------------------------------------------------------------------------------------
<C> <S> <C>
ELECTRICAL PRODUCTS
310,000 Matsushita Electric Works, Ltd........................................ $ 3,842,830
------------
ELECTRONIC COMPONENTS
28,000 TDK Corp.............................................................. 4,025,660
------------
FINANCE COMPANIES
42,000 Acom Co., Ltd. ....................................................... 3,534,340
------------
MAJOR PHARMACEUTICALS
52,500 Takeda Chemical Industries, Ltd....................................... 3,447,170
------------
MOTOR VEHICLES
91,000 Honda Motor Co. ...................................................... 3,099,151
75,000 Toyota Motor Corp. ................................................... 3,417,453
------------
6,516,604
------------
OTHER PHARMACEUTICALS
100,000 Taisho Pharmaceutical Co., Ltd........................................ 3,584,906
------------
RECREATIONAL PRODUCTS/TOYS
22,000 Nintendo Co., Ltd. ................................................... 3,843,774
------------
TOBACCO
420 Japan Tobacco, Inc.................................................... 3,688,868
------------
TOTAL JAPAN........................................................... 59,841,509
------------
NETHERLANDS (5.5%)
DIVERSIFIED ELECTRONIC PRODUCTS
65,000 Koninklijke (Royal) Philips Electronics NV............................ 3,064,578
------------
DIVERSIFIED FINANCIAL SERVICES
55,000 ING Groep NV.......................................................... 3,716,434
------------
FINANCIAL PUBLISHING/SERVICES
125,000 Wolters Kluwer NV..................................................... 3,328,470
------------
INTERNATIONAL BANKS
150,000 ABN-AMRO Holding NV................................................... 3,673,486
------------
PACKAGED FOODS
70,000 Unilever NV........................................................... 3,210,124
------------
SPECIALTY CHEMICALS
90,000 DSM NV................................................................ 2,886,106
------------
TELECOMMUNICATIONS
72,000 KPN NV................................................................ 3,219,382
------------
TOTAL NETHERLANDS..................................................... 23,098,580
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
47
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - GLOBAL DIVIDEND GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
------------------------------------------------------------------------------------------------
<C> <S> <C>
PORTUGAL (0.8%)
TELECOMMUNICATIONS
300,000 Portugal Telecom S.A. (Registered Shares)............................. $ 3,367,123
------------
SPAIN (1.5%)
ELECTRIC UTILITIES
250,000 Iberdrola S.A......................................................... 3,221,100
------------
INTERNATIONAL BANKS
300,000 Banco Santander Central Hispano, S.A.................................. 3,163,836
------------
TOTAL SPAIN........................................................... 6,384,936
------------
SWEDEN (1.6%)
CONSUMER ELECTRONICS/APPLIANCES
80,000 Electrolux AB (Series B).............................................. 1,241,685
------------
ENGINEERING & CONSTRUCTION
52,000 Skanska AB (B Shares)................................................. 1,847,746
------------
INDUSTRIAL MACHINERY/COMPONENTS
60,000 Sandvik AB (B Shares)................................................. 1,262,153
------------
INTERNATIONAL BANKS
300,000 Nordbanken Holding AB................................................. 2,268,463
------------
TOTAL SWEDEN.......................................................... 6,620,047
------------
SWITZERLAND (6.5%)
CONSUMER SPECIALTIES
1,800 Compagnie Financiere Richemont AG (Series A).......................... 4,843,865
------------
INTERNATIONAL BANKS
31,000 UBS AG (Registered Shares)............................................ 4,536,493
------------
MAJOR PHARMACEUTICALS
3,000 Novartis AG (Registered Shares)....................................... 4,746,510
------------
OTHER TELECOMMUNICATIONS
12,000 Swisscom AG (Registered Shares)....................................... 4,151,359
------------
PACKAGED FOODS
2,500 Nestle S.A. (Registered Shares)....................................... 4,997,857
------------
<CAPTION>
NUMBER OF
SHARES VALUE
------------------------------------------------------------------------------------------------
<C> <S> <C>
PROPERTY - CASUALTY INSURERS
2,200 Schweizerische Rueckversicherungs-Gesellschaft (Registered Shares).... $ 4,478,937
------------
TOTAL SWITZERLAND..................................................... 27,755,021
------------
UNITED KINGDOM (11.2%)
AIRLINES
495,000 British Airways PLC................................................... 2,851,596
------------
ALCOHOLIC BEVERAGES
290,000 Bass PLC.............................................................. 3,266,525
320,000 Diageo PLC............................................................ 2,876,762
------------
6,143,287
------------
BUILDING MATERIALS
450,000 Hanson PLC............................................................ 3,185,874
------------
CLOTHING/SHOE/ACCESSORY STORES
345,000 Next PLC.............................................................. 3,023,056
------------
DIVERSIFIED FINANCIAL SERVICES
76,500 Abbey National PLC.................................................... 916,194
199,800 HSBC Holdings PLC .................................................... 2,281,027
------------
3,197,221
------------
ELECTRONIC COMPONENTS
850,000 Cookson Group PLC..................................................... 2,841,363
------------
INTERNATIONAL BANKS
200,000 Royal Bank of Scotland Group PLC...................................... 3,353,392
------------
MOVIES/ENTERTAINMENT
1,500,000 Rank Group PLC........................................................ 3,479,220
------------
NON - U.S. UTILITIES
415,000 PowerGen PLC.......................................................... 3,554,641
285,000 United Utilities PLC.................................................. 2,825,672
------------
6,380,313
------------
SPECIALTY STEELS
2,000,000 Corus Group PLC....................................................... 2,925,880
------------
TELECOMMUNICATIONS
215,000 British Telecommunications PLC ....................................... 2,783,528
------------
TOBACCO
536,200 British American Tobacco PLC.......................................... 3,584,797
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
48
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - GLOBAL DIVIDEND GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
------------------------------------------------------------------------------------------------
<C> <S> <C>
WATER SUPPLY
314,000 Severn Trent PLC...................................................... $ 3,429,753
------------
TOTAL UNITED KINGDOM.................................................. 47,179,280
------------
UNITED STATES (31.2%)
ALUMINUM
130,000 Alcoa, Inc. .......................................................... 3,770,000
------------
AUTO PARTS: O.E.M.
10,475 Visteon Corp.*........................................................ 127,005
------------
AUTOMOTIVE AFTERMARKET
160,000 Goodyear Tire & Rubber Co. ........................................... 3,200,000
------------
COMPUTER SOFTWARE
78,000 Computer Associates International, Inc................................ 3,992,624
------------
CONSTRUCTION/AGRICULTURAL EQUIPMENT/TRUCKS
90,000 Deere & Co. .......................................................... 3,330,000
------------
DEPARTMENT STORES
115,000 Sears, Roebuck & Co. ................................................. 3,751,875
------------
DISCOUNT CHAINS
70,000 Target Corp. ......................................................... 4,060,000
------------
DIVERSIFIED MANUFACTURING
105,000 Honeywell International, Inc.......................................... 3,537,187
50,000 Minnesota Mining & Manufacturing Co................................... 4,125,000
------------
7,662,187
------------
E.D.P. SERVICES
95,000 Electronic Data Systems Corp. ........................................ 3,918,750
------------
ELECTRIC UTILITIES
90,000 FPL Group, Inc. ...................................................... 4,455,000
156,800 GPU, Inc.............................................................. 4,243,400
------------
8,698,400
------------
ELECTRONIC DATA PROCESSING
150,000 Compaq Computer Corp.................................................. 3,834,375
33,000 Hewlett-Packard Co.................................................... 4,120,875
38,000 International Business Machines Corp.................................. 4,163,375
------------
12,118,625
------------
ENGINEERING & CONSTRUCTION
125,000 Fluor Corp. .......................................................... 3,953,125
------------
<CAPTION>
NUMBER OF
SHARES VALUE
------------------------------------------------------------------------------------------------
<C> <S> <C>
FINANCE COMPANIES
160,000 Associates First Capital Corp. (Class A).............................. $ 3,570,000
------------
FOOD CHAINS
125,000 Albertson's, Inc. .................................................... 4,156,250
------------
INTEGRATED OIL COMPANIES
45,000 Chevron Corp.......................................................... 3,816,562
------------
MAJOR BANKS
80,000 Bank of America Corp. ................................................ 3,440,000
210,000 KeyCorp............................................................... 3,701,250
------------
7,141,250
------------
MAJOR CHEMICALS
111,000 Dow Chemical Co. ..................................................... 3,350,813
------------
MAJOR PHARMACEUTICALS
78,000 Bristol-Myers Squibb Co. ............................................. 4,543,500
------------
MAJOR U.S. TELECOMMUNICATIONS
75,000 Bell Atlantic Corp. .................................................. 3,810,938
90,000 SBC Communications, Inc. ............................................. 3,892,500
------------
7,703,438
------------
MOTOR VEHICLES
80,000 Ford Motor Co......................................................... 3,440,000
------------
OFFICE EQUIPMENT/SUPPLIES
180,000 Xerox Corp............................................................ 3,735,000
------------
OIL REFINING/MARKETING
120,000 Ashland, Inc.......................................................... 4,207,500
140,000 USX-Marathon Group.................................................... 3,508,750
------------
7,716,250
------------
OTHER METALS/MINERALS
95,000 Phelps Dodge Corp..................................................... 3,532,813
------------
PAPER
110,000 International Paper Co. .............................................. 3,279,375
------------
PHOTOGRAPHIC PRODUCTS
70,000 Eastman Kodak Co. .................................................... 4,165,000
------------
PRECISION INSTRUMENTS
12,586 Agilent Technologies, Inc............................................. 928,232
------------
SAVINGS & LOAN ASSOCIATIONS
150,000 Washington Mutual, Inc. .............................................. 4,331,250
------------
SEMICONDUCTORS
30,000 Intel Corp............................................................ 4,008,750
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
49
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - GLOBAL DIVIDEND GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
------------------------------------------------------------------------------------------------
<C> <S> <C>
TOBACCO
160,000 Philip Morris Companies, Inc.......................................... $ 4,250,000
------------
TOTAL UNITED STATES................................................... 132,251,074
------------
TOTAL COMMON AND PREFERRED STOCKS
(IDENTIFIED COST $380,177,618)........................................ 408,489,032
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS
----------
<C> <S> <C>
SHORT-TERM INVESTMENT (A) (3.0%)
U.S. GOVERNMENT AGENCY
$ 12,700 Federal Home Loan Banks 6.57% due 07/03/00 (AMORTIZED COST
$12,695,365)........................................................ 12,695,365
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $392,872,983) (B)........................................................ 99.6% 421,184,397
OTHER ASSETS IN EXCESS OF LIABILITIES .................................................... 0.4 1,666,951
----- -------------
NET ASSETS................................................................................ 100.0% $ 422,851,348
----- -------------
----- -------------
</TABLE>
---------------------
(a) Purchased on a discount basis. The interest rate shown has been adjusted to
reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $65,290,014 and the
aggregate gross unrealized depreciation is $36,978,600, resulting in net
unrealized appreciation of $28,311,414.
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT JUNE 30, 2000:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS TO IN EXCHANGE DELIVERY APPRECIATION/
DELIVER FOR DATE DEPRECIATION
---------------------------------------------------
<S> <C> <C> <C>
CHF 762,272 $465,937 07/03/00 $ (799)
EUR 340,198 $323,188 07/03/00 (1,497)
EUR 506,000 $483,129 07/31/00 203
-------
Net unrealized depreciation... $(2,093)
=======
</TABLE>
CURRENCY ABBREVIATION:
------------------------
<TABLE>
<S> <C>
CHF Swiss Franc.
EUR Euro.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
50
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - GLOBAL DIVIDEND GROWTH
SUMMARY OF INVESTMENTS JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Airlines.......................................................................... $ 4,664,628 1.1%
Alcoholic Beverages............................................................... 9,518,287 2.3
Aluminum.......................................................................... 5,633,983 1.3
Apparel........................................................................... 3,442,998 0.8
Auto Parts: O.E.M................................................................. 127,005 0.0
Automotive Aftermarket............................................................ 5,926,578 1.4
Building Materials................................................................ 5,866,116 1.4
Cellular Telephone................................................................ 5,880,008 1.4
Clothing/Shoe/Accessory Stores.................................................... 3,023,056 0.7
Computer Software................................................................. 3,992,624 0.9
Construction/Agricultural Equipment/Trucks........................................ 3,330,000 0.8
Consumer Electronics/Appliances................................................... 7,684,610 1.8
Consumer Specialties.............................................................. 4,843,865 1.1
Containers/Packaging.............................................................. 1,914,680 0.5
Department Stores................................................................. 7,199,045 1.7
Discount Chains................................................................... 4,060,000 1.0
Diversified Electronic Products................................................... 17,350,159 4.1
Diversified Financial Services.................................................... 10,259,018 2.4
Diversified Manufacturing......................................................... 13,761,758 3.3
E.D.P. Services................................................................... 3,918,750 0.9
Electric Utilities................................................................ 11,919,500 2.8
Electrical Products............................................................... 3,842,830 0.9
Electronic Components............................................................. 6,867,023 1.6
Electronic Data Processing........................................................ 12,118,625 2.9
Engineering & Construction........................................................ 5,800,871 1.4
Finance Companies................................................................. 7,104,340 1.7
Financial Publishing/Services..................................................... 3,328,470 0.8
Food Chains....................................................................... 4,156,250 1.0
Industrial Machinery/Components................................................... 1,262,152 0.3
Integrated Oil Companies.......................................................... 3,816,562 0.9
International Banks............................................................... 34,636,123 8.3
Major Banks....................................................................... 7,141,250 1.7
Major Chemicals................................................................... 9,301,974 2.2
Major Pharmaceuticals............................................................. 12,737,180 3.0
Major U.S. Telecommunications..................................................... 7,703,437 1.8
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Motor Vehicles.................................................................... $ 12,578,818 3.0%
Movies/Entertainment.............................................................. 3,479,220 0.8
Multi-Line Insurance.............................................................. 3,275,214 0.8
Multi-Sector Companies............................................................ 11,003,005 2.6
Non-U.S. Utilities................................................................ 6,380,313 1.5
Office Equipment/Supplies......................................................... 3,735,000 0.9
Oil & Gas Production.............................................................. 1,971,866 0.5
Oil Refining/Marketing............................................................ 11,241,613 2.7
Oil/Gas Transmission.............................................................. 2,273,128 0.5
Other Metals/Minerals............................................................. 3,532,813 0.8
Other Pharmaceuticals............................................................. 3,584,906 0.8
Other Telecommunications.......................................................... 5,868,733 1.4
Packaged Foods.................................................................... 8,207,981 1.9
Paper............................................................................. 3,279,375 0.8
Photographic Products............................................................. 4,165,000 1.0
Precious Metals................................................................... 1,609,200 0.4
Precision Instruments............................................................. 928,232 0.2
Property - Casualty Insurers...................................................... 4,478,937 1.1
Real Estate....................................................................... 4,637,813 1.1
Recreational Products/Toys........................................................ 3,843,774 0.9
Savings & Loan Associations....................................................... 4,331,250 1.0
Semiconductors.................................................................... 4,008,750 0.9
Shoe Manufacturing................................................................ 3,144,366 0.7
Specialty Chemicals............................................................... 2,886,106 0.7
Specialty Steels.................................................................. 2,925,880 0.7
Telecommunication Equipment....................................................... 3,606,200 0.9
Telecommunications................................................................ 16,212,570 3.8
Tobacco........................................................................... 11,523,665 2.7
U.S. Government Agency............................................................ 12,695,365 3.0
Utilities......................................................................... 2,211,796 0.5
Water Supply...................................................................... 3,429,753 0.8
------------ -----
$421,184,397 99.6%
------------ -----
------------ -----
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks..................................................................... $405,046,034 95.8%
Preferred Stocks.................................................................. 3,442,998 0.8
Short-Term Investment............................................................. 12,695,365 3.0
------------ -----
$421,184,397 99.6%
------------ -----
------------ -----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
51
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - EUROPEAN GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS (98.4%)
DENMARK (0.5%)
OTHER TELECOMMUNICATIONS
40,210 Tele Danmark AS....................................................... $ 2,705,250
------------
FINLAND (4.4%)
TELECOMMUNICATION EQUIPMENT
497,800 Nokia Oyj............................................................. 25,394,112
------------
FRANCE (15.3%)
BROADCASTING
26,530 Societe Television
Francaise 1......................................................... 1,848,377
------------
BUILDING MATERIALS/DIY CHAINS
17,040 Castorama Dubois Investissement....................................... 4,212,111
------------
CONSUMER ELECTRONICS/APPLIANCES
57,400 Thomson Multimedia*................................................... 3,714,258
------------
INTERNATIONAL BANKS
136,700 BNP Paribas........................................................... 13,151,021
------------
MAJOR CHEMICALS
260,596 Aventis S.A........................................................... 19,014,095
------------
MAJOR PHARMACEUTICALS
78,290 Sanofi-Synthelabo S.A................................................. 3,728,527
------------
MULTI-LINE INSURANCE
65,626 AXA................................................................... 10,334,520
------------
OIL REFINING/MARKETING
117,022 Total Fina Elf........................................................ 17,936,739
------------
TELECOMMUNICATION EQUIPMENT
224,315 Alcatel............................................................... 14,707,724
------------
TOTAL FRANCE.......................................................... 88,647,372
------------
GERMANY (7.1%)
APPAREL
38,254 Hugo Boss AG (Pref.).................................................. 6,754,279
------------
BANKING
63,080 Bayerische Hypo - und Vereinsbank AG.................................. 4,099,862
------------
COMPUTER SOFTWARE
66,920 SAP AG................................................................ 9,995,412
40,043 Software AG........................................................... 3,687,945
------------
13,683,357
------------
<CAPTION>
NUMBER OF
SHARES VALUE
------------------------------------------------------------------------------------------------
<C> <S> <C>
DIVERSIFIED ELECTRONIC PRODUCTS
59,930 Siemens AG (Registered Shares)........................................ $ 9,008,558
------------
TELECOMMUNICATIONS
139,850 Deutsche Telecom AG................................................... 7,954,981
------------
TOTAL GERMANY......................................................... 41,501,037
------------
ITALY (3.0%)
INTEGRATED OIL COMPANIES
821,180 ENI SpA*.............................................................. 4,741,592
------------
INTERNATIONAL BANKS
492,300 Unicredito Italiano SpA............................................... 2,353,954
------------
TELECOMMUNICATIONS
763,620 Telecom Italia SpA.................................................... 10,494,705
------------
TOTAL ITALY........................................................... 17,590,251
------------
NETHERLANDS (8.9%)
ALCOHOLIC BEVERAGES
61,580 Heineken NV........................................................... 3,746,712
------------
CABLE TELEVISION
119,240 United Pan-Europe Communications NV (A Shares)*....................... 3,117,055
------------
DIVERSIFIED ELECTRONIC PRODUCTS
369,750 Koninklijke (Royal) Philips Electronics NV............................ 17,432,736
------------
DIVERSIFIED FINANCIAL SERVICES
166,620 Fortis (NL) NV........................................................ 4,848,585
------------
E.D.P. SERVICES
242,600 Getronics NV.......................................................... 3,739,330
------------
ELECTRONIC PRODUCTION EQUIPMENT
82,120 ASM Lithography Holding NV*........................................... 3,528,457
------------
INTEGRATED OIL COMPANIES
136,710 Royal Dutch Petroleum Co.............................................. 8,493,989
------------
TELECOMMUNICATIONS
149,120 KPN NV................................................................ 6,667,698
------------
TOTAL NETHERLANDS..................................................... 51,574,562
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
52
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - EUROPEAN GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
------------------------------------------------------------------------------------------------
<C> <S> <C>
SPAIN (4.8%)
ADVERTISING
81,790 Telefonica Publicidad e Information, S.A.............................. $ 772,017
------------
INTERNATIONAL BANKS
576,160 Banco Bilbao Vizcaya Argentaria, S.A.................................. 8,605,733
------------
OTHER CONSUMER SERVICES
488,180 Amadeus Global Travel Distribution S.A. (A Shares).................... 5,567,732
------------
TELECOMMUNICATIONS
611,663 Telefonica S.A.*...................................................... 13,134,851
------------
TOTAL SPAIN........................................................... 28,080,333
------------
SWEDEN (10.5%)
DIVERSIFIED COMMERCIAL SERVICES
569,480 Securitas AB (Series "B" Free)........................................ 12,109,018
------------
INDUSTRIAL MACHINERY/COMPONENTS
488,171 Assa Abloy AB (Series B).............................................. 9,825,035
------------
INTERNATIONAL BANKS
1,144,110 Nordbanken Holding AB................................................. 8,651,238
------------
LIFE INSURANCE
132,230 Skandia Forsakrings AB................................................ 3,503,279
------------
MAJOR PHARMACEUTICALS
232,844 AstraZeneca PLC....................................................... 10,855,198
------------
OTHER TELECOMMUNICATIONS
78,360 Tele1 Europe Holding AB*.............................................. 962,292
------------
TELECOMMUNICATION EQUIPMENT
765,960 Ericsson (L.M.) Telephone Co. AB (Series "B" Free).................... 15,198,138
------------
TOTAL SWEDEN.......................................................... 61,104,198
------------
SWITZERLAND (10.3%)
CONSUMER SPECIALTIES
4,430 Compagnie Financiere Richemont AG (Series A).......................... 11,921,290
------------
DIVERSIFIED COMMERCIAL SERVICES
7,690 Adecco S.A. (Registered Shares)....................................... 6,526,047
------------
<CAPTION>
NUMBER OF
SHARES VALUE
------------------------------------------------------------------------------------------------
<C> <S> <C>
INTERNATIONAL BANKS
82,020 UBS AG (Registered Shares)............................................ $ 12,002,682
------------
MAJOR PHARMACEUTICALS
3,820 Novartis AG (Registered Shares)....................................... 6,043,889
908 Roche Holdings AG..................................................... 8,828,704
------------
14,872,593
------------
PACKAGE GOODS/COSMETICS
4,918 Givaudan (Registered Shares)*......................................... 1,495,094
------------
PACKAGED FOODS
6,597 Nestle S.A. (Registered Shares)....................................... 13,188,345
------------
TOTAL SWITZERLAND..................................................... 60,006,051
------------
UNITED KINGDOM (33.0%)
ADVERTISING
315,100 WPP Group PLC......................................................... 4,609,724
------------
AEROSPACE
401,407 Smiths Industries PLC................................................. 5,233,384
------------
ALCOHOLIC BEVERAGES
1,776,700 Allied Domecq PLC..................................................... 9,427,170
535,100 Diageo PLC............................................................ 4,810,485
------------
14,237,655
------------
AUTO PARTS: O.E.M.
709,738 BBA Group PLC......................................................... 4,658,919
------------
BOOKS/MAGAZINES
215,220 EMAP PLC.............................................................. 3,468,288
690,200 Reed International PLC................................................ 6,016,473
------------
9,484,761
------------
CABLE TELEVISION
682,960 TeleWest Communications PLC*.......................................... 2,360,638
------------
CELLULAR TELEPHONE
7,875,073 Vodafone AirTouch PLC................................................. 31,876,090
------------
DIVERSIFIED ELECTRONIC PRODUCTS
650,700 Marconi PLC........................................................... 8,483,566
------------
FINANCE COMPANIES
894,600 Woolwich PLC.......................................................... 3,794,008
------------
FOOD CHAINS
1,427,400 Tesco PLC............................................................. 4,446,893
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
53
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - EUROPEAN GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
------------------------------------------------------------------------------------------------
<C> <S> <C>
INTEGRATED OIL COMPANIES
1,395,890 BP Amoco PLC.......................................................... $ 13,416,513
------------
INTERNATIONAL BANKS
421,500 Barclays PLC.......................................................... 10,498,671
1,147,000 Egg PLC*.............................................................. 2,990,825
------------
13,489,496
------------
LIFE INSURANCE
881,000 Prudential Corp....................................................... 12,928,569
------------
MAJOR PHARMACEUTICALS
91,700 AstraZeneca Group PLC................................................. 4,288,681
346,200 Glaxo Wellcome PLC.................................................... 10,113,651
569,549 SmithKline Beecham PLC................................................ 7,468,724
------------
21,871,056
------------
OIL/GAS TRANSMISSION
896,566 BG Group PLC.......................................................... 5,803,759
------------
OTHER SPECIALTY STORES
340,000 Kingfisher PLC........................................................ 3,100,372
------------
PACKAGE GOODS/COSMETICS
283,800 Reckitt & Colman PLC.................................................. 3,183,782
------------
RESTAURANTS
1,014,856 Granada Group PLC..................................................... 10,154,243
------------
TELECOMMUNICATIONS
1,178,600 British Telecommunications PLC........................................ 15,258,910
------------
TOBACCO
340,300 Imperial Tobacco Group PLC............................................ 3,265,614
------------
TOTAL UNITED KINGDOM.................................................. 191,657,952
------------
UNITED STATES (0.6%)
OTHER TELECOMMUNICATIONS
59,200 NTL Inc.*............................................................. 3,544,600
------------
TOTAL COMMON AND PREFERRED STOCKS
(IDENTIFIED COST $444,829,458)........................................ 571,805,718
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
-----------------------------------------------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENT (A) (3.5%)
U.S. GOVERNMENT AGENCY
$20,000 Federal Home Loan Banks 6.57% due 07/03/00 (AMORTIZED COST
$19,992,700)........................................................ $ 19,992,700
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $464,822,158) (B)........................................................ 101.9% 591,798,418
LIABILITIES IN EXCESS OF OTHER ASSETS..................................................... (1.9) (10,774,845)
----- -------------
NET ASSETS................................................................................ 100.0% $ 581,023,573
----- -------------
----- -------------
</TABLE>
---------------------
* Non-income producing security.
(a) Purchased on a discount basis. The interest rate shown has been adjusted to
reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $134,851,559 and the
aggregate gross unrealized depreciation is $7,875,299, resulting in net
unrealized appreciation of $126,976,260.
SEE NOTES TO FINANCIAL STATEMENTS
54
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - EUROPEAN GROWTH
SUMMARY OF INVESTMENTS JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Advertising....................................................................... $ 5,381,741 0.9%
Aerospace......................................................................... 5,233,384 0.9
Alcoholic Beverages............................................................... 17,984,367 3.1
Apparel........................................................................... 6,754,279 1.2
Auto Parts: O.E.M................................................................. 4,658,919 0.8
Banking........................................................................... 4,099,862 0.7
Books/Magazines................................................................... 9,484,761 1.6
Broadcasting...................................................................... 1,848,377 0.3
Building Materials/Diy Chains..................................................... 4,212,111 0.7
Cable Television.................................................................. 5,477,692 0.9
Cellular Telephone................................................................ 31,876,090 5.5
Computer Software................................................................. 13,683,356 2.4
Consumer Electronics/Appliances................................................... 3,714,258 0.6
Consumer Specialties.............................................................. 11,921,289 2.1
Diversified Commercial Services................................................... 18,635,065 3.2
Diversified Electronic Products................................................... 34,924,860 6.0
Diversified Financial Services.................................................... 4,848,585 0.8
E.D.P. Services................................................................... 3,739,330 0.6
Electronic Production Equipment................................................... 3,528,457 0.6
Finance Companies................................................................. 3,794,008 0.7
Food Chains....................................................................... 4,446,893 0.8
Industrial Machinery/Components................................................... 9,825,035 1.7
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Integrated Oil Companies.......................................................... $ 26,652,094 4.6%
International Banks............................................................... 58,254,125 10.0
Life Insurance.................................................................... 16,431,848 2.8
Major Chemicals................................................................... 19,014,095 3.3
Major Pharmaceuticals............................................................. 51,327,374 8.8
Multi-Line Insurance.............................................................. 10,334,520 1.8
Oil Refining/Marketing............................................................ 17,936,739 3.1
Oil/Gas Transmission.............................................................. 5,803,759 1.0
Other Consumer Services........................................................... 5,567,732 1.0
Other Specialty Stores............................................................ 3,100,372 0.5
Other Telecommunications.......................................................... 7,212,143 1.2
Package Goods/Cosmetics........................................................... 4,678,876 0.8
Packaged Foods.................................................................... 13,188,345 2.3
Restaurants....................................................................... 10,154,243 1.8
Telecommunication Equipment....................................................... 55,299,975 9.5
Telecommunications................................................................ 53,511,145 9.2
Tobacco........................................................................... 3,265,614 0.6
U.S. Government Agency............................................................ 19,992,700 3.5
------------ -----
$591,798,418 101.9%
------------ -----
------------ -----
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks..................................................................... $565,051,439 97.2%
Preferred Stocks.................................................................. 6,754,279 1.2
Short-Term Investment............................................................. 19,992,700 3.5
------------ -----
$591,798,418 101.9%
------------ -----
------------ -----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
55
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - PACIFIC GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS AND WARRANTS (97.8%)
AUSTRALIA (6.9%)
AIRLINES
112,200 Quantas Airways Ltd.................................................................... $ 226,025
------------
ALCOHOLIC BEVERAGES
108,200 Fosters Brewing Group Ltd.............................................................. 303,090
------------
DIVERSIFIED COMMERCIAL SERVICES
9,100 Brambles Industries Ltd................................................................ 278,426
------------
E.D.P. SERVICES
31,750 Solution 6 Holdings Ltd................................................................ 61,500
------------
INTERNATIONAL BANKS
16,350 Commonwealth Bank of Australia......................................................... 269,828
40,650 National Australia Bank Ltd............................................................ 675,896
66,450 Westpac Banking Corp., Ltd............................................................. 477,231
------------
1,422,955
------------
MEDIA CONGLOMERATES
106,250 News Corp., Ltd. (The)................................................................. 1,456,475
------------
MEDICAL/NURSING SERVICES
25,750 Sonic Healthcare Ltd................................................................... 105,557
------------
MULTI-SECTOR COMPANIES
69,162 Broken Hill Proprietary Co., Ltd....................................................... 814,106
------------
OFFICE/PLANT AUTOMATION
27,977 ERG Ltd................................................................................ 216,265
------------
OTHER METALS/MINERALS
50,950 Rio Tinto Ltd.......................................................................... 838,684
------------
OTHER PHARMACEUTICALS
14,050 CSL Limited............................................................................ 276,628
------------
OTHER TELECOMMUNICATIONS
71,250 Aapt Ltd.*............................................................................. 232,708
90,000 Davnet Limited......................................................................... 67,586
112,400 Telstra Corp. Ltd...................................................................... 454,195
81,400 Telstra Corp. Ltd. (New)............................................................... 184,355
------------
938,844
------------
PRECIOUS METALS
220,200 Normandy Mining Ltd.................................................................... 118,115
------------
REAL ESTATE
22,450 Lend Lease Corp., Ltd.................................................................. 285,105
------------
TOTAL AUSTRALIA........................................................................ 7,341,775
------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
CHINA (1.0%)
ELECTRONIC COMPONENTS
381,000 Great Wall Technology Co. (Class H).................................................... $ 263,915
------------
OTHER TELECOMMUNICATIONS
386,000 China Unicom Ltd.*..................................................................... 814,513
------------
TOTAL CHINA............................................................................ 1,078,428
------------
HONG KONG (11.1%)
AIRLINES
192,000 Cathay Pacific Airways................................................................. 354,657
------------
BROADCASTING
233,000 Phoenix Satellite Television Holdings Ltd.*............................................ 32,279
49,000 Television Broadcasts Ltd.............................................................. 326,847
------------
359,126
------------
CELLULAR TELEPHONE
172,200 China Mobile Ltd.*..................................................................... 1,518,626
23,500 SmarTone Telecommunications Holdings Ltd............................................... 52,000
------------
1,570,626
------------
CONSUMER ELECTRONICS/APPLIANCES
270,000 TCL International Holdings Ltd.*....................................................... 98,708
------------
DIVERSIFIED MANUFACTURING
34,600 Johnson Electric Holdings, Ltd......................................................... 327,328
------------
E.D.P. SERVICES
176,000 Timeless Software Ltd.*................................................................ 79,582
------------
ELECTRONIC DATA PROCESSING
199,000 Legend Holdings Ltd.................................................................... 192,728
------------
ELECTRONIC PRODUCTION EQUIPMENT
44,000 ASM Pacific Technology Ltd............................................................. 164,809
------------
HOTELS/RESORTS
790,000 Sino-i.com Ltd......................................................................... 35,975
------------
INTERNATIONAL BANKS
27,000 Dao Heng Bank Group Ltd................................................................ 119,489
28,400 Hang Seng Bank Ltd..................................................................... 268,674
------------
388,163
------------
INTERNET SERVICES
4,800 Chinadot Com Corp. (Class A)*.......................................................... 97,800
------------
MARINE TRANSPORTATION
207,000 Cosco Pacific Ltd...................................................................... 163,302
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
56
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - PACIFIC GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
MULTI-SECTOR COMPANIES
218,900 Hutchison Whampoa, Ltd................................................................. $ 2,751,799
92,700 Swire Pacific Ltd. (Class A)........................................................... 542,237
------------
3,294,036
------------
NATURAL GAS
253,200 Hong Kong & China Gas Co., Ltd......................................................... 284,195
------------
OTHER TELECOMMUNICATIONS
76,000 Asia Satellite Telecommunications Holdings Ltd......................................... 259,810
------------
PAINTS/COATINGS
183,000 China Merchants Holdings International Co., Ltd........................................ 125,589
------------
REAL ESTATE
122,000 Cheung Kong (Holdings) Ltd............................................................. 1,338,045
72,000 Hong Kong Land Holdings Ltd............................................................ 115,200
364,000 Sino Land Co., Ltd..................................................................... 128,404
116,100 Sun Hung Kai Properties Ltd............................................................ 833,998
------------
2,415,647
------------
TELECOMMUNICATIONS
340,000 Cable & Wireless HKT Ltd............................................................... 747,976
------------
WHOLESALE DISTRIBUTORS
21,000 Citic Pacific Ltd...................................................................... 109,907
137,800 Li & Fung Ltd.......................................................................... 689,380
------------
799,287
------------
TOTAL HONG KONG........................................................................ 11,759,344
------------
INDIA (6.3%)
BUILDING MATERIALS
28,498 Gujarat Ambuja Cements Ltd............................................................. 124,320
------------
COMPUTER SOFTWARE
1,500 Leading Edge Systems Ltd............................................................... 29,623
3,650 NIIT Ltd............................................................................... 180,487
4,000 PSI Data Systems Ltd................................................................... 77,298
19,450 Software Solution Integrated Ltd....................................................... 1,237,642
------------
1,525,050
------------
DIVERSIFIED COMMERCIAL SERVICES
25,400 Aptech Ltd............................................................................. 480,696
38,960 ASE Test Ltd.*......................................................................... 1,144,450
------------
1,625,146
------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
DIVERSIFIED ELECTRONIC PRODUCTS
200 Satyam Computer Service Ltd............................................................ $ 13,344
------------
DIVERSIFIED MANUFACTURING
23,500 Escorts Ltd............................................................................ 74,390
12,350 Grasim Industries Ltd.................................................................. 79,073
4,050 Grasim Industries Ltd. (Bonus Shares)*................................................. 25,319
1,000 Ramco Industries Ltd................................................................... 4,922
1,000 Ramco Systems Ltd.*.................................................................... 34,228
18,000 Sterlite Industries Ltd................................................................ 335,537
------------
553,469
------------
E.D.P. SERVICES
6,250 HCL Technologies Ltd.*................................................................. 180,145
3,000 Infosys Technologies Ltd............................................................... 558,312
------------
738,457
------------
ELECTRICAL PRODUCTS
54,274 Bharat Heavy Electricals Ltd........................................................... 162,033
------------
ELECTRONIC DATA PROCESSING
15,000 Digital Equipment Ltd.................................................................. 240,805
------------
GENERIC DRUGS
7,000 Dr. Reddy's Laboratories Ltd........................................................... 204,496
------------
INTERNATIONAL BANKS
2,000 Bank of Baroda......................................................................... 1,893
41,600 Corporation Bank....................................................................... 75,569
------------
77,462
------------
MOTOR VEHICLES
7,500 Hero Honda Motors Ltd.................................................................. 165,688
------------
MOVIES/ENTERTAINMENT
12,500 Zee Telefilms Ltd...................................................................... 125,294
------------
MULTI-SECTOR COMPANIES
3,650 Wipro Ltd.............................................................................. 236,801
------------
NATURAL GAS
73,600 Gas Authority of India Ltd............................................................. 81,092
20,000 Gas Authority of India Ltd. (GDR)...................................................... 137,500
------------
218,592
------------
OTHER PHARMACEUTICALS
8,750 Ranbaxy Laboratories Ltd............................................................... 112,869
2,400 Wockhardt Life Sciences Ltd............................................................ 2,464
2,400 Wockhardt Limited...................................................................... 23,871
------------
139,204
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
57
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - PACIFIC GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
OTHER TELECOMMUNICATIONS
43,100 Mahanagar Telephone Nigam Ltd.......................................................... $ 206,870
10,090 Videsh Sanchar Nigam Ltd............................................................... 273,085
------------
479,955
------------
PACKAGE GOODS/COSMETICS
10,000 Reckitt & Coleman of India Ltd......................................................... 45,884
------------
TOTAL INDIA............................................................................ 6,676,000
------------
INDONESIA (0.3%)
BUILDING MATERIALS
22,800 PT Semen Gresik (Persero) Tbk.......................................................... 20,656
------------
MUTUAL FUNDS
500,000 Batavia Investment Fund Ltd.*.......................................................... --
------------
TELECOMMUNICATIONS
28,184 PT Telekomunikasi Indonesia (ADR)...................................................... 195,527
------------
TOBACCO
38,000 PT Gudang Garam Tbk.................................................................... 61,276
------------
TOTAL INDONESIA........................................................................ 277,459
------------
JAPAN (49.0%)
BUILDING PRODUCTS
81,000 Sanwa Shutter Corp..................................................................... 262,868
------------
CONSUMER ELECTRONICS/APPLIANCES
25,200 Aiwa Co., Ltd.......................................................................... 403,676
77,000 Casio Computer Co., Ltd................................................................ 864,434
20,700 Rinnai Corp............................................................................ 461,844
21,300 Sony Corp.............................................................................. 1,989,340
------------
3,719,294
------------
DIVERSIFIED ELECTRONIC PRODUCTS
106,000 Hitachi Ltd............................................................................ 1,530,000
8,600 Kyocera Corp........................................................................... 1,459,566
59,000 Matsushita Electric Industrial Co., Ltd................................................ 1,530,660
64,000 NEC Corp............................................................................... 2,010,566
141,000 Toshiba Corp........................................................................... 1,592,236
------------
8,123,028
------------
E.D.P. PERIPHERALS
35,000 Mitsumi Electric Co., Ltd.............................................................. 1,287,736
------------
ELECTRICAL PRODUCTS
32,000 Furukawa Electric Co................................................................... 668,679
------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
ELECTRONIC COMPONENTS
11,000 TDK Corp............................................................................... $ 1,581,509
------------
ELECTRONIC DATA PROCESSING
59,000 Fujitsu Ltd............................................................................ 2,042,736
------------
ELECTRONIC DISTRIBUTORS
23,000 Ryosan Co., Ltd........................................................................ 520,755
------------
FINANCE COMPANIES
48,100 Hitachi Credit Corp.................................................................... 1,302,330
------------
FOOD CHAINS
14,900 FamilyMart Co., Ltd.................................................................... 573,509
------------
HOME BUILDING
122,000 Sekisui Chemical Co., Ltd.............................................................. 469,585
77,000 Sekisui House Ltd...................................................................... 712,613
------------
1,182,198
------------
HOME FURNISHINGS
6,000 Sangetsu Co., Ltd...................................................................... 99,057
------------
INDUSTRIAL MACHINERY/COMPONENTS
96,000 Amada Co., Ltd......................................................................... 815,094
84,000 Daifuku Co., Ltd....................................................................... 931,925
56,000 Daikin Industries, Ltd................................................................. 1,302,264
22,000 Fuji Machine Manufacturing Co., Ltd.................................................... 1,156,038
65,000 Minebea Co., Ltd....................................................................... 815,566
188,000 Mitsubishi Heavy Industries, Ltd....................................................... 833,585
105,000 Tsubakimoto Chain Co................................................................... 534,906
------------
6,389,378
------------
INDUSTRIAL SPECIALTIES
46,000 Fujitec Co., Ltd....................................................................... 400,547
52,000 Lintec Corp............................................................................ 542,076
------------
942,623
------------
INTERNATIONAL BANKS
16,000 Bank of Tokyo-Mitsubishi, Ltd.......................................................... 193,359
------------
MAJOR PHARMACEUTICALS
45,000 Sankyo Co., Ltd........................................................................ 1,016,745
------------
MARINE TRANSPORTATION
30,000 Mitsubishi Logistics Corp.............................................................. 271,698
------------
MEAT/POULTRY/FISH
35,000 Nippon Meat Packers, Inc............................................................... 511,792
------------
MOTOR VEHICLES
150,000 Nissan Motor Co., Ltd.................................................................. 884,434
48,000 Suzuki Motor Corp...................................................................... 619,472
24,000 Toyota Motor Corp...................................................................... 1,093,585
------------
2,597,491
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
58
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - PACIFIC GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
OFFICE EQUIPMENT/SUPPLIES
32,000 Canon, Inc............................................................................. $ 1,593,962
75,000 Ricoh Co., Ltd......................................................................... 1,588,443
------------
3,182,405
------------
OTHER PHARMACEUTICALS
25,000 Ono Pharmaceutical Co., Ltd............................................................ 1,073,113
24,000 Yamanouchi Pharmaceutical Co., Ltd..................................................... 1,310,943
------------
2,384,056
------------
PHOTOGRAPHIC PRODUCTS
33,000 Fuji Photo Film Co., Ltd............................................................... 1,351,132
------------
POLLUTION CONTROL EQUIPMENT
36,000 Kurita Water Industries Ltd............................................................ 793,019
------------
PRINTING/FORMS
45,000 Dai Nippon Printing Co., Ltd........................................................... 793,443
24,000 Nissha Printing Co., Ltd............................................................... 165,962
------------
959,405
------------
REAL ESTATE
58,000 Mitsubishi Estate Co., Ltd............................................................. 682,868
------------
RECREATIONAL PRODUCTS/TOYS
10,400 Nintendo Co., Ltd...................................................................... 1,817,057
52,000 Yamaha Corp............................................................................ 568,566
------------
2,385,623
------------
SEMICONDUCTORS
3,800 Rohm Co. Ltd........................................................................... 1,111,321
------------
SPECIALTY CHEMICALS
146,000 Daicel Chemical Industries, Ltd........................................................ 471,057
103,000 Kaneka Corp............................................................................ 1,135,915
126,000 Mitsubishi Chemical Corp............................................................... 517,076
45,000 NIFCO Inc.............................................................................. 574,811
74,000 Shin-Etsu Polymer Co., Ltd............................................................. 612,943
------------
3,311,802
------------
SPECIALTY FOODS/CANDY
20,000 House Foods Corp....................................................................... 309,434
------------
TELECOMMUNICATIONS
117 Nippon Telegraph & Telephone Corp...................................................... 1,556,321
------------
UTILITIES
22,700 Tokyo Electric Power Co................................................................ 553,580
------------
WHOLESALE DISTRIBUTORS
18,000 Nissei Sangyo Co., Ltd................................................................. 263,208
------------
TOTAL JAPAN............................................................................ 52,130,959
------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
MALAYSIA (2.4%)
ALCOHOLIC BEVERAGES
46,000 Carlsberg Brewery (Malaysia) Berhad.................................................... $ 151,312
------------
CASINO/GAMBLING
97,000 Tanjong PLC............................................................................ 232,283
------------
CONTAINERS/PACKAGING
24,000 Malaysian Pacific Industries Berhad.................................................... 246,309
------------
ELECTRIC UTILITIES
54,000 Tenaga Nasional Berhad................................................................. 176,206
------------
HOTELS/RESORTS
65,000 Resorts World Berhad................................................................... 177,890
------------
INTERNATIONAL BANKS
34,000 Commerce Asset-Holdings Berhad......................................................... 98,419
144,000 Malayan Banking Berhad................................................................. 583,564
244,000 Public Bank Berhad..................................................................... 224,731
------------
906,714
------------
OTHER TELECOMMUNICATIONS
108,000 Digi.com Berhad*....................................................................... 197,521
------------
TELECOMMUNICATIONS
102,000 Telekom Malaysia Berhad................................................................ 351,622
------------
TOBACCO
18,400 British American Tobacco (Malaysia) Berhad............................................. 150,101
------------
TOTAL MALAYSIA......................................................................... 2,589,958
------------
NEW ZEALAND (0.2%)
TELECOMMUNICATIONS
73,600 Telecom Corporation of New Zealand Ltd................................................. 256,778
------------
SINGAPORE (4.4%)
AIRLINES
56,000 Singapore Airlines Ltd................................................................. 553,942
------------
DIVERSIFIED COMMERCIAL SERVICES
56,000 St Assembly Test Services Ltd.......................................................... 143,830
------------
DIVERSIFIED ELECTRONIC PRODUCTS
50,100 Natsteel Electronics Ltd............................................................... 153,601
------------
DIVERSIFIED MANUFACTURING
75,000 Omni Industries Ltd.................................................................... 123,648
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
59
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - PACIFIC GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
ELECTRONIC COMPONENTS
28,600 Venture Manufacturing Ltd.............................................................. $ 291,178
------------
ENGINEERING & CONSTRUCTION
81,000 SIA Engineering Co., Ltd.*............................................................. 90,901
------------
INTERNATIONAL BANKS
79,182 DBS Group Holdings Ltd................................................................. 1,016,857
76,086 Overseas - Chinese Banking Corp., Ltd.................................................. 523,760
44,544 Overseas Union Bank Ltd................................................................ 172,641
------------
1,713,258
------------
MARINE TRANSPORTATION
87,000 Neptune Orient Lines Ltd............................................................... 80,523
47,500 Sembcorp Logistics Ltd................................................................. 266,530
------------
347,053
------------
MULTI-SECTOR COMPANIES
67,000 Keppel Corp., Ltd...................................................................... 144,953
------------
NEWSPAPERS
40,019 Singapore Press Holdings Ltd........................................................... 625,044
------------
REAL ESTATE
37,400 City Developments Ltd.................................................................. 144,953
------------
SEMICONDUCTORS
40,000 Chartered Semiconductor Manufacturing Ltd.*............................................ 349,395
------------
TOTAL SINGAPORE........................................................................ 4,681,756
------------
SOUTH KOREA (8.3%)
ADVERTISING
2,020 Cheil Communications Inc............................................................... 263,561
------------
CATALOG/SPECIALTY DISTRIBUTION
1,490 LG Home Shopping Inc................................................................... 141,631
------------
CELLULAR TELEPHONE
550 SK Telecom Co., Ltd.................................................................... 180,021
27,800 SK Telecom Co., Ltd. (ADR)............................................................. 1,009,488
11,250 Telson Electronics Co., Ltd............................................................ 119,547
------------
1,309,056
------------
DEPARTMENT STORES
2,740 CJ39 Shopping Corp..................................................................... 89,683
------------
DIVERSIFIED ELECTRONIC PRODUCTS
240 LG Information & Communication Ltd..................................................... 13,494
11,947 Samsung Electronics Co................................................................. 3,953,229
------------
3,966,723
------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
ELECTRIC UTILITIES
25,690 Korea Electric Power Corp. (ADR)....................................................... $ 473,659
------------
ELECTRICAL PRODUCTS
11,835 Prochips Technology Inc................................................................ 46,803
------------
ELECTRONIC COMPONENTS
6,426 Samsung Electro-Mechanics Co........................................................... 402,795
------------
INTERNATIONAL BANKS
15,260 H&CB................................................................................... 357,159
21,288 Kookmin Bank........................................................................... 271,075
25,540 Shinhan Bank........................................................................... 240,479
------------
868,713
------------
INVESTMENT BANKERS/BROKERS/SERVICES
4,125 Dongwon Securities Co.................................................................. 29,740
------------
OTHER TELECOMMUNICATIONS
1,820 Korea Telecom Freetel*................................................................. 121,263
940 Locus Corp.*........................................................................... 76,286
------------
197,549
------------
SEMICONDUCTORS
8,089 Hyundai Electronics Industries Co...................................................... 159,582
------------
SPECIALTY FOODS/CANDY
3,970 Tong Yang Confectionery Corp........................................................... 86,331
------------
STEEL/IRON ORE
8,400 Pohang Iron & Steel Co., Ltd. (ADR).................................................... 201,600
------------
TELECOMMUNICATION EQUIPMENT
9,040 Communication Network Interface Inc.................................................... 49,855
11,090 Humax Co., Ltd......................................................................... 153,648
------------
203,503
------------
TELECOMMUNICATIONS
310 Korea Telecom Corp..................................................................... 27,299
7,880 Korea Telecom Corp. (ADR).............................................................. 381,195
------------
408,494
------------
TOTAL SOUTH KOREA...................................................................... 8,849,423
------------
TAIWAN (6.9%)
COMPUTER COMMUNICATIONS
4,148 Accton Technology Corp. (GDR)*......................................................... 18,355
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
60
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - PACIFIC GROWTH
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
E.D.P. PERIPHERALS
25,598 Acer Peripherals Inc. (GDR)............................................................ $ 722,899
7,935 D-Link Corp. (GDR)..................................................................... 91,052
14,100 Hon Hai Precision Industry Co., Ltd. (GDR)*............................................ 350,385
------------
1,164,336
------------
ELECTRONIC COMPONENTS
24,134 Ritek Corp. (GDR)*..................................................................... 193,076
------------
ELECTRONIC DATA PROCESSING
20,337 Acer Inc. (GDR)*....................................................................... 190,151
83,241 Asustek Computer Inc. (GDR)............................................................ 769,984
22,591 Compal Electronics Inc. (GDS).......................................................... 277,309
------------
1,237,444
------------
ELECTRONIC PRODUCTION EQUIPMENT
57,141 Taiwan Semiconductor Manufacturing Co. Ltd. (ADR)...................................... 2,214,249
------------
INTERNET SERVICES
18,200 GigaMedia Ltd.*........................................................................ 218,400
------------
SEMICONDUCTORS
18,900 Advanced Semiconductor Engineering Inc. (GDR)*......................................... 318,937
18,293 Macronix International Co., Ltd. (ADR)................................................. 466,489
45,700 Siliconware Precision Industries Co. (ADR)*............................................ 422,725
18,981 Winbond Electronics Corp. (GDR)*....................................................... 548,551
------------
1,756,702
------------
STEEL/IRON ORE
6,900 China Steel Corp. (GDR)................................................................ 94,013
------------
TEXTILES
34,600 Far Eastern Textiles Ltd. - 144A*+ (GDS)............................................... 436,825
------------
TOTAL TAIWAN........................................................................... 7,333,400
------------
THAILAND (1.0%)
BUILDING MATERIALS
30,666 Siam City Cement Co. PCL............................................................... 115,721
------------
CELLULAR TELEPHONE
26,400 Advanced Info Service PCL.............................................................. 328,486
------------
ELECTRONIC COMPONENTS
26,433 Delta Electronics Public Co., Ltd...................................................... 171,188
------------
INTERNATIONAL BANKS
215,700 Siam Commercial Bank (Warrants due 05/10/02)........................................... 25,299
202,100 Thai Farmers Bank PCL.................................................................. 170,048
------------
195,347
------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
MOVIES/ENTERTAINMENT
26,600 BEC World PCL.......................................................................... $ 154,635
------------
OTHER TELECOMMUNICATIONS
9,200 Total Access Communication PCL......................................................... 36,984
------------
REAL ESTATE
301,800 Golden Land Property Development Company Ltd........................................... 46,170
------------
TOTAL THAILAND......................................................................... 1,048,531
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL COMMON STOCKS AND WARRANTS
(IDENTIFIED COST $83,515,380) (A)......................................................... 97.8% 104,023,811
OTHER ASSETS IN EXCESS OF LIABILITIES..................................................... 2.2 2,388,920
----- -------------
NET ASSETS................................................................................ 100.0% $ 106,412,731
----- -------------
----- -------------
</TABLE>
---------------------
ADR American Depository Receipt.
GDR Global Depository Receipt.
GDS Global Depository Shares.
* Non-income producing security.
+ Resale is restricted to qualified institutional investors.
(a) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $25,860,956 and the
aggregate gross unrealized depreciation is $5,352,525, resulting in net
unrealized appreciation of $20,508,431.
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT JUNE 30, 2000:
<TABLE>
<CAPTION>
CONTRACTS TO IN EXCHANGE DELIVERY UNREALIZED
DELIVER FOR DATE APPRECIATION
----------------------------------------------------
<S> <C> <C> <C>
JPY 5,097,116 $48,086 07/03/00 $228
THB 48,411 $ 1,234 07/03/00 3
INR 7,447,096 $ 849 07/05/00 8
THB 346,182 $ 8,827 07/05/00 13
THB 149,445 $ 3,810 07/05/00 8
INR 3,735,391 $ 426 07/06/00 3
INR 7,637,773 $ 870 07/07/00 2
----
Total unrealized
appreciation................... $265
====
</TABLE>
CURRENCY ABBREVIATIONS:
------------------------
<TABLE>
<S> <C>
INR Indonesian Rupiah.
JPY Japanese yen.
THB Thai Bat.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
61
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - PACIFIC GROWTH
SUMMARY OF INVESTMENTS JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Advertising....................................................................... $ 263,561 0.3%
Airlines.......................................................................... 1,134,624 1.1
Alcoholic Beverages............................................................... 454,402 0.4
Broadcasting...................................................................... 359,126 0.3
Building Materials................................................................ 260,697 0.3
Building Products................................................................. 262,868 0.3
Casino/Gambling................................................................... 232,283 0.2
Catalog/Specialty Distribution.................................................... 141,631 0.1
Cellular Telephone................................................................ 3,208,166 3.0
Computer Communications........................................................... 18,355 0.0
Computer Software................................................................. 1,525,049 1.4
Consumer Electronics/Appliances................................................... 3,818,002 3.6
Containers/Packaging.............................................................. 246,309 0.2
Department Stores................................................................. 89,683 0.1
Diversified Commercial Services................................................... 2,047,403 1.9
Diversified Electronic Products................................................... 12,256,696 11.5
Diversified Manufacturing......................................................... 1,004,445 1.0
E.D.P. Peripherals................................................................ 2,452,072 2.3
E.D.P. Services................................................................... 879,540 0.8
Electric Utilities................................................................ 649,865 0.6
Electrical Products............................................................... 877,515 0.8
Electronic Components............................................................. 2,903,661 2.7
Electronic Data Processing........................................................ 3,713,713 3.5
Electronic Distributors........................................................... 520,755 0.5
Electronic Production Equipment................................................... 2,379,058 2.2
Engineering & Construction........................................................ 90,901 0.1
Finance Companies................................................................. 1,302,330 1.2
Food Chains....................................................................... 573,509 0.5
Generic Drugs..................................................................... 204,496 0.2
Home Building..................................................................... 1,182,198 1.1
Home Furnishings.................................................................. 99,057 0.1
Hotels/Resorts.................................................................... 213,865 0.2
Industrial Machinery/Components................................................... 6,389,377 6.0
Industrial Specialties............................................................ 942,623 0.9
International Banks............................................................... 5,765,968 5.4
Internet Services................................................................. 316,200 0.3
Investment Bankers/Brokers/Services............................................... 29,740 0.0
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Major Pharmaceuticals............................................................. $ 1,016,745 1.0%
Marine Transportation............................................................. 782,052 0.7
Meat/Poultry/Fish................................................................. 511,792 0.5
Media Conglomerates............................................................... 1,456,475 1.4
Medical/Nursing Services.......................................................... 105,557 0.1
Motor Vehicles.................................................................... 2,763,179 2.6
Movies/Entertainment.............................................................. 279,929 0.3
Multi-Sector Companies............................................................ 4,489,896 4.2
Natural Gas....................................................................... 502,787 0.5
Newspapers........................................................................ 625,044 0.6
Office Equipment/Supplies......................................................... 3,182,406 3.0
Office/Plant Automation........................................................... 216,266 0.2
Other Metals/Minerals............................................................. 838,684 0.8
Other Pharmaceuticals............................................................. 2,799,890 2.6
Other Telecommunications.......................................................... 2,925,176 2.8
Package Goods/Cosmetics........................................................... 45,884 0.0
Paints/Coatings................................................................... 125,588 0.1
Photographic Products............................................................. 1,351,132 1.3
Pollution Control Equipment....................................................... 793,019 0.8
Precious Metals................................................................... 118,115 0.1
Printing/Forms.................................................................... 959,406 0.9
Real Estate....................................................................... 3,574,744 3.4
Recreational Products/Toys........................................................ 2,385,623 2.2
Semiconductors.................................................................... 3,377,001 3.2
Specialty Chemicals............................................................... 3,311,802 3.1
Specialty Foods/Candy............................................................. 395,765 0.4
Steel/Iron Ore.................................................................... 295,613 0.3
Telecommunication Equipment....................................................... 203,503 0.2
Telecommunications................................................................ 3,516,718 3.3
Textiles.......................................................................... 436,825 0.4
Tobacco........................................................................... 211,378 0.2
Utilities......................................................................... 553,580 0.5
Wholesale Distributors............................................................ 1,062,494 1.0
------------ ----
$$104,023,811 97.8%
------------ ----
------------ ----
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks..................................................................... $$103,998,512 97.8%
Warrants.......................................................................... 25,299 0.0
------------ ----
$$104,023,811 97.8%
------------ ----
------------ ----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
62
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - EQUITY
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (91.0%)
ADVERTISING (1.1%)
221,000 Interpublic Group of Companies, Inc................................... $ 9,503,000
120,000 Omnicom Group, Inc.................................................... 10,687,500
11,850 Valassis Communications, Inc.*........................................ 451,781
16,400 WPP Group PLC (ADR) (United Kingdom).................................. 1,181,825
--------------
21,824,106
--------------
ALCOHOLIC BEVERAGES (0.9%)
251,800 Anheuser-Busch Companies, Inc......................................... 18,806,312
--------------
BEVERAGES - NON-ALCOHOLIC (1.1%)
488,000 PepsiCo, Inc.......................................................... 21,685,500
--------------
BIOTECHNOLOGY (5.2%)
40,000 Abgenix, Inc.*........................................................ 4,792,500
77,980 Alkermes, Inc.*....................................................... 3,669,934
100,000 Amgen Inc.*........................................................... 7,025,000
19,570 Cephalon, Inc.*....................................................... 1,198,662
52,500 Chiron Corp.*......................................................... 2,493,750
226,970 COR Therapeutics, Inc.*............................................... 19,349,192
85,000 Genentech, Inc.*...................................................... 14,620,000
166,000 IDEC Pharmaceuticals Corp.*........................................... 19,463,500
138,600 Immunex Corp.*........................................................ 6,852,037
204,000 MedImmune, Inc.*...................................................... 15,083,250
60,300 Millennium Pharmaceuticals, Inc.*..................................... 6,742,294
34,900 Trimeris, Inc.*....................................................... 2,440,819
--------------
103,730,938
--------------
BROADCASTING (2.4%)
224,000 Clear Channel Communications, Inc..................................... 16,800,000
75,000 Grupo Televisa S.A. (GDR) (Mexico)*................................... 5,170,312
131,500 Univision Communications, Inc. (Class A)*............................. 13,610,250
428,300 USA Networks, Inc.*................................................... 9,261,987
87,800 XM Satellite Radio Holdings Inc. (Class A)............................ 3,281,525
--------------
48,124,074
--------------
<CAPTION>
NUMBER OF
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
CABLE TELEVISION (1.1%)
458,400 AT&T Corp. - Liberty Media Group (Class A)*........................... $ 11,116,200
275,000 Comcast Corp. (Class A Special)*...................................... 11,154,687
--------------
22,270,887
--------------
CELLULAR TELEPHONE (0.8%)
280,000 Sprint Corp. (PCS Group)*............................................. 16,660,000
--------------
CLOTHING/SHOE/ACCESSORY STORES (0.1%)
58,000 Limited (The), Inc.................................................... 1,254,250
--------------
COMPUTER COMMUNICATIONS (3.6%)
686,000 Cisco Systems, Inc.*.................................................. 43,603,875
156,800 Extreme Networks, Inc.*............................................... 16,454,200
74,000 Juniper Networks, Inc.*............................................... 10,767,000
18,200 StorageNetworks, Inc.*................................................ 1,642,550
--------------
72,467,625
--------------
COMPUTER SOFTWARE (5.1%)
150,000 Check Point Software Technologies Ltd. (Israel)*...................... 31,837,500
22,510 i2 Technologies, Inc.*................................................ 2,346,667
661,000 Oracle Corp.*......................................................... 55,524,000
39,400 Precise Software Solutions Ltd.*...................................... 945,600
80,000 Siebel Systems, Inc.*................................................. 13,085,000
--------------
103,738,767
--------------
CONTRACT DRILLING (1.8%)
269,700 ENSCO International Inc............................................... 9,658,631
355,000 Global Marine, Inc.*.................................................. 10,006,562
325,000 R&B Falcon Corp.*..................................................... 7,657,812
160,000 Transocean Sedco Forex Inc............................................ 8,550,000
--------------
35,873,005
--------------
DIVERSIFIED ELECTRONIC PRODUCTS (0.6%)
6,350 Exfo Electro-Optical Engineering Inc. (Canada)*....................... 278,606
40,000 Gemstar International Group Ltd.*..................................... 2,457,500
6,500 JDS Uniphase Corp.*................................................... 778,781
180,000 Koninklijke (Royal) Philips Electronics NV (Netherlands).............. 8,550,000
--------------
12,064,887
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
63
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - EQUITY
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
DIVERSIFIED FINANCIAL SERVICES (3.6%)
240,000 American Express Co................................................... $ 12,510,000
850,000 Citigroup, Inc........................................................ 51,212,500
100,000 Providian Financial Corp.............................................. 9,000,000
--------------
72,722,500
--------------
E.D.P. SERVICES (0.7%)
195,000 Automatic Data Processing, Inc........................................ 10,444,687
69,000 First Data Corp....................................................... 3,424,125
--------------
13,868,812
--------------
ELECTRIC UTILITIES (0.3%)
100,640 Calpine Corp.*........................................................ 6,617,080
--------------
ELECTRICAL PRODUCTS (0.4%)
199,000 American Power Conversion Corp.*...................................... 8,109,250
17,900 Capstone Turbine Corp.*............................................... 808,856
--------------
8,918,106
--------------
ELECTRONIC COMPONENTS (1.4%)
218,000 Amphenol Corp. (Class A)*............................................. 14,428,875
61,000 Flextronics International, Ltd. (Singapore)*.......................... 4,189,937
195,000 Jabil Circuit, Inc.*.................................................. 9,676,875
--------------
28,295,687
--------------
ELECTRONIC DATA PROCESSING (3.2%)
72,000 Hewlett-Packard Co.................................................... 8,991,000
134,790 International Business Machines Corp.................................. 14,767,929
439,800 Sun Microsystems, Inc.*............................................... 39,994,312
--------------
63,753,241
--------------
ELECTRONIC PRODUCTION EQUIPMENT (1.8%)
146,000 Applied Materials, Inc.*.............................................. 13,231,250
148,600 ASM Lithography Holding NV (Netherlands)*............................. 6,547,688
43,700 Credence Systems Corp.*............................................... 2,408,963
151,800 Cymer, Inc.*.......................................................... 7,229,475
83,300 Teradyne, Inc.*....................................................... 6,122,550
--------------
35,539,926
--------------
ENGINEERING & CONSTRUCTION (0.0%)
15,000 Metromedia Fiber Network, Inc. (Class A)*............................. 595,313
--------------
<CAPTION>
NUMBER OF
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
FINANCE COMPANIES (1.0%)
410,300 Household International, Inc.......................................... $ 17,053,094
86,600 MBNA Corp............................................................. 2,349,025
--------------
19,402,119
--------------
GENERIC DRUGS (1.7%)
266,000 Alpharma Inc. (Class A)............................................... 16,558,500
300,000 Ivax Corp.*........................................................... 12,450,000
115,000 Watson Pharmaceuticals, Inc.*......................................... 6,181,250
--------------
35,189,750
--------------
INTERNET SERVICES (3.7%)
168,300 Art Technology Group, Inc.*........................................... 16,987,781
175,800 BEA Systems, Inc.*.................................................... 8,680,125
185,290 BroadVision, Inc.*.................................................... 9,403,468
32,800 Inktomi Corp.*........................................................ 3,878,600
200,000 VeriSign, Inc.*....................................................... 35,262,500
28,500 Virage, Inc.*......................................................... 514,781
--------------
74,727,255
--------------
INVESTMENT BANKERS/BROKERS/SERVICES (3.0%)
253,210 Lehman Brothers Holdings, Inc......................................... 23,944,171
285,500 Merrill Lynch & Co., Inc.............................................. 32,832,500
118,700 Schwab (Charles) Corp................................................. 3,991,288
--------------
60,767,959
--------------
MAJOR BANKS (1.5%)
290,000 Bank of New York Co., Inc............................................. 13,485,000
494,970 FleetBoston Financial Corp............................................ 16,828,980
--------------
30,313,980
--------------
MAJOR PHARMACEUTICALS (8.5%)
370,000 Abbott Laboratories................................................... 16,488,125
413,000 American Home Products Corp........................................... 24,263,750
148,000 Aventis (ADR) (France)................................................ 10,739,250
248,000 Johnson & Johnson..................................................... 25,265,000
54,000 Merck & Co., Inc...................................................... 4,137,750
1,181,500 Pfizer Inc............................................................ 56,712,000
160,000 Pharmacia Corp........................................................ 8,270,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
64
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - EQUITY
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
209,000 Schering-Plough Corp.................................................. $ 10,554,500
227,000 Smithkline Beecham PLC (ADR) (United Kingdom)......................... 14,797,563
--------------
171,227,938
--------------
MEDIA CONGLOMERATES (4.3%)
630,000 Disney (Walt) Co. (The)............................................... 24,451,875
194,100 Fox Entertainment Group, Inc. (Series A)*............................. 5,895,788
400,000 News Corporation Ltd. (The) (ADR) (Australia)......................... 21,800,000
510,000 Viacom, Inc. (Class B)*............................................... 34,775,625
--------------
86,923,288
--------------
MEDICAL SPECIALTIES (2.2%)
171,000 ALZA Corp.*........................................................... 10,110,375
172,000 Baxter International, Inc............................................. 12,093,750
37,000 Cytyc Corp.*.......................................................... 1,972,563
62,190 Inhale Therapeutic Systems, Inc.*..................................... 6,308,398
100,000 Invitrogen Corp.*..................................................... 7,518,750
56,100 MiniMed, Inc.*........................................................ 6,633,825
--------------
44,637,661
--------------
MEDICAL/DENTAL DISTRIBUTORS (1.0%)
135,000 Andrx Corp.*.......................................................... 8,623,125
155,250 Cardinal Health, Inc.................................................. 11,488,500
--------------
20,111,625
--------------
METALS FABRICATIONS (0.4%)
8,000 Coflexip, S.A. (ADR) (France)......................................... 482,000
284,400 Grant Predico, Inc.*.................................................. 7,110,000
--------------
7,592,000
--------------
MILITARY/GOV'T/TECHNICAL (0.4%)
84,000 General Motors Corp. (Class H)*....................................... 7,371,000
--------------
MULTI-LINE INSURANCE (2.2%)
292,000 American International Group, Inc..................................... 34,310,000
133,300 AXA (ADR) (France).................................................... 10,605,681
--------------
44,915,681
--------------
MULTI-SECTOR COMPANIES (1.1%)
397,000 General Electric Co................................................... 21,041,000
--------------
OIL & GAS PRODUCTION (0.8%)
70,000 Devon Energy Corp..................................................... 3,933,125
235,000 EOG Resources, Inc.................................................... 7,872,500
<CAPTION>
NUMBER OF
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
21,300 Kerr-McGee Corp....................................................... $ 1,255,369
145,000 Union Pacific Resources Group, Inc.................................... 3,190,000
--------------
16,250,994
--------------
OIL/GAS TRANSMISSION (0.8%)
260,000 Enron Corp............................................................ 16,770,000
--------------
OILFIELD SERVICES/EQUIPMENT (2.7%)
216,000 Baker Hughes Inc...................................................... 6,912,000
433,000 BJ Services Co.*...................................................... 27,062,500
85,000 Cooper Cameron Corp.*................................................. 5,610,000
79,800 Schlumberger Ltd...................................................... 5,955,075
131,820 Smith International, Inc.*............................................ 9,598,144
--------------
55,137,719
--------------
OTHER PHARMACEUTICALS (3.5%)
87,000 Allergan, Inc......................................................... 6,481,500
125,100 Celgene Corp.*........................................................ 7,365,263
89,000 Elan Corp. PLC (ADR) (Ireland)*....................................... 4,310,938
140,000 Forest Laboratories, Inc.*............................................ 14,140,000
65,500 Medicis Pharmaceutical Corp. (Class A)*............................... 3,733,500
48,700 Sepracor, Inc.*....................................................... 5,871,394
525,200 Teva Pharmaceutical Industries Ltd. (ADR) (Israel).................... 29,115,775
--------------
71,018,370
--------------
OTHER TELECOMMUNICATIONS (0.1%)
84,400 Asia Satellite Telecommunications Holdings Ltd. (ADR) (Hong Kong)..... 2,890,700
--------------
PACKAGE GOODS/COSMETICS (0.5%)
218,100 Avon Products, Inc.................................................... 9,705,450
--------------
PRECISION INSTRUMENTS (1.2%)
199,500 Waters Corp.*......................................................... 24,900,094
--------------
SAVINGS & LOAN ASSOCIATIONS (0.2%)
102,700 Golden West Financial Corp............................................ 4,191,444
--------------
SEMICONDUCTORS (8.8%)
477,300 Intel Corp............................................................ 63,779,213
725,000 Micron Technology, Inc.*.............................................. 63,845,313
100,000 SDL, Inc.*............................................................ 28,518,750
246,800 TranSwitch Corp.*..................................................... 19,049,875
--------------
175,193,151
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
65
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - EQUITY
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------------------------------------------------------------------------------------------------
<C> <S> <C>
SERVICES TO THE HEALTH INDUSTRY (0.0%)
10,000 MedQuist Inc.*........................................................ $ 340,000
--------------
TELECOMMUNICATION EQUIPMENT (6.2%)
11,100 Accelerated Networks, Inc.*........................................... 467,588
58,000 Alcatel (ADR) (France)................................................ 3,857,000
70,000 CIENA Corp.*.......................................................... 11,663,750
177,700 Comverse Technology, Inc.*............................................ 16,526,100
100,000 Corning Inc........................................................... 26,987,500
5,400 New Focus, Inc.*...................................................... 443,475
456,000 Nortel Networks Corp. (Canada)........................................ 31,122,000
40,000 ONI Systems Corp.*.................................................... 4,687,500
333,200 Scientific - Atlanta, Inc............................................. 24,823,400
80,000 UTStarcom, Inc.*...................................................... 2,430,000
--------------
123,008,313
--------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $1,516,604,548)...................................... 1,832,438,507
--------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS
----------
<C> <S> <C>
SHORT-TERM INVESTMENTS (7.4%)
U.S. GOVERNMENT AGENCY (A) (7.2%)
$ 145,000 Federal Home Loans Banks 6.57% due 07/03/00 (AMORTIZED COST
$ 144,947,075).................................................................... 144,947,075
--------------
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
REPURCHASE AGREEMENT (0.2%)
$ 2,717 The Bank of New York 7.0% due 07/30/00
(dated 06/30/00; proceeds
$2,717,708) (b) (IDENTIFIED COST
$2,717,179)....................................................................... $ 2,717,179
--------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $147,664,254)...................................................... 147,664,254
--------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $1,664,268,802) (C).................................................... 98.4% 1,980,102,761
OTHER ASSETS IN EXCESS OF LIABILITIES................................................... 1.6 33,208,174
----- ---------------
NET ASSETS.............................................................................. 100.0% $ 2,013,310,935
----- ---------------
----- ---------------
</TABLE>
---------------------
ADR American Depository Receipt.
* Non-income producing security.
(a) Purchased on a discount basis. The interest rate shown has been adjusted to
reflect a money market equivalent yield.
(b) Collateralized by $2,706,281 Federal Home Loan Banks 6.75% due 02/01/02
valued at $2,771,572.
(c) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $340,070,442 and the
aggregate gross unrealized depreciation is $24,236,483, resulting in net
unrealized appreciation of $315,833,959.
SEE NOTES TO FINANCIAL STATEMENTS
66
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - S&P 500 INDEX
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (96.9%)
ACCIDENT & HEALTH INSURANCE (0.1%)
4,667 AFLAC, Inc............................................................................. $ 214,390
4,228 UnumProvident Corp..................................................................... 84,824
------------
299,214
------------
ADVERTISING (0.3%)
5,305 Interpublic Group of Companies, Inc.................................................... 228,115
3,123 Omnicom Group, Inc..................................................................... 278,142
1,269 Young & Rubicam, Inc................................................................... 72,571
------------
578,828
------------
AEROSPACE (0.7%)
15,950 Boeing Co.............................................................................. 666,909
1,887 Goodrich (B.F.) Co. (The).............................................................. 64,276
7,037 Lockheed Martin Corp................................................................... 174,606
1,227 Northrop Grumman Corp.................................................................. 81,289
8,273 United Technologies Corp............................................................... 487,073
------------
1,474,153
------------
AIR FREIGHT/DELIVERY SERVICES (0.1%)
5,098 FedEx Corp.*........................................................................... 193,724
------------
AIRLINES (0.2%)
2,632 AMR Corp.*............................................................................. 69,583
2,153 Delta Air Lines, Inc................................................................... 108,861
8,725 Southwest Airlines Co.................................................................. 165,230
1,171 US Airways Group Inc.*................................................................. 45,669
------------
389,343
------------
ALCOHOLIC BEVERAGES (0.3%)
7,943 Anheuser-Busch Companies, Inc.......................................................... 593,243
1,205 Brown-Forman Corp. (Class B)........................................................... 64,769
640 Coors (Adolph) Co. (Class B)........................................................... 38,720
------------
696,732
------------
ALUMINUM (0.2%)
3,847 Alcan Aluminium, Ltd. (Canada)......................................................... 119,257
15,192 Alcoa, Inc............................................................................. 440,568
------------
559,825
------------
APPAREL (0.0%)
960 Liz Claiborne, Inc..................................................................... 33,840
574 Russell Corp........................................................................... 11,480
2,008 VF Corp................................................................................ 47,815
------------
93,135
------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
AUTO PARTS: O.E.M. (0.2%)
2,678 Dana Corp.............................................................................. $ 56,740
9,899 Delphi Automotive Systems Corp......................................................... 144,154
1,278 Eaton Corp............................................................................. 85,626
1,507 Johnson Controls, Inc.................................................................. 77,328
2,169 TRW Inc................................................................................ 94,080
2,775 Visteon Corp........................................................................... 33,642
------------
491,570
------------
AUTOMOTIVE AFTERMARKET (0.1%)
1,298 Cooper Tire & Rubber Co................................................................ 14,440
3,110 Genuine Parts Co....................................................................... 62,200
2,749 Goodyear Tire & Rubber Co.............................................................. 54,980
------------
131,620
------------
BEVERAGES - NON-ALCOHOLIC (1.7%)
43,517 Coca Cola Co........................................................................... 2,499,508
7,385 Coca-Cola Enterprises Inc.............................................................. 120,468
25,336 PepsiCo, Inc........................................................................... 1,125,868
------------
3,745,844
------------
BIOTECHNOLOGY (0.8%)
18,053 Amgen Inc.*............................................................................ 1,268,223
2,608 Biogen, Inc.*.......................................................................... 168,053
3,556 MedImmune, Inc.*....................................................................... 262,922
------------
1,699,198
------------
BOOKS/MAGAZINES (0.0%)
1,261 Harcourt General, Inc.................................................................. 68,567
893 Meredith Corp.......................................................................... 30,139
------------
98,706
------------
BROADCASTING (0.2%)
5,959 Clear Channel Communications, Inc...................................................... 446,925
------------
BUILDING MATERIALS (0.0%)
975 Owens Corning.......................................................................... 9,019
1,771 Vulcan Materials Co.................................................................... 75,600
------------
84,619
------------
BUILDING MATERIALS/DIY CHAINS (1.0%)
40,677 Home Depot, Inc. (The)................................................................. 2,031,308
6,722 Lowe's Companies, Inc.................................................................. 276,022
------------
2,307,330
------------
BUILDING PRODUCTS (0.1%)
695 Armstrong Holdings, Inc................................................................ 10,642
7,888 Masco Corp............................................................................. 142,477
------------
153,119
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
67
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - S&P 500 INDEX
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
CABLE TELEVISION (0.6%)
15,783 Comcast Corp. (Class A Special)*....................................................... $ 640,198
10,622 MediaOne Group, Inc.*.................................................................. 704,385
------------
1,344,583
------------
CASINO/GAMBLING (0.0%)
2,149 Harrah's Entertainment, Inc.*.......................................................... 44,995
------------
CELLULAR TELEPHONE (0.8%)
13,333 Nextel Communications, Inc. (Class A)*................................................. 815,813
16,091 Sprint Corp. (PCS Group)*.............................................................. 957,414
------------
1,773,227
------------
CLOTHING/SHOE/ACCESSORY STORES (0.3%)
14,961 Gap, Inc. (The)........................................................................ 467,531
7,554 Limited (The), Inc..................................................................... 163,355
2,367 Nordstrom, Inc......................................................................... 57,104
5,274 TJX Companies, Inc..................................................................... 98,887
------------
786,877
------------
COMPUTER COMMUNICATIONS (3.7%)
6,168 3Com Corp.*............................................................................ 355,045
1,828 Adaptec, Inc.*......................................................................... 41,587
3,204 Cabletron Systems, Inc.*............................................................... 80,901
122,303 Cisco Systems, Inc.*................................................................... 7,773,884
------------
8,251,417
------------
COMPUTER SOFTWARE (6.4%)
2,105 Adobe Systems, Inc..................................................................... 273,387
1,025 Autodesk, Inc.......................................................................... 35,555
4,293 BMC Software, Inc.*.................................................................... 156,426
3,255 Citrix Systems, Inc.*.................................................................. 61,642
10,346 Computer Associates International, Inc................................................. 529,586
6,338 Compuware Corp.*....................................................................... 65,361
1,400 Mercury Interactive Corp.*............................................................. 135,450
92,524 Microsoft Corp.*....................................................................... 7,396,137
5,792 Novell, Inc.*.......................................................................... 53,576
49,905 Oracle Corp.*.......................................................................... 4,192,020
4,853 Parametric Technology Corp.*........................................................... 53,080
4,852 PeopleSoft, Inc.*...................................................................... 80,664
1,034 Sapient Corp.*......................................................................... 110,509
3,509 Siebel Systems, Inc.*.................................................................. 573,941
6,873 Veritas Software Corp.*................................................................ 776,649
------------
14,493,983
------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMPUTER/VIDEO CHAINS (0.2%)
3,594 Best Buy Co., Inc.*.................................................................... $ 227,320
3,575 Circuit City Stores, Inc. - Circuit City Group......................................... 118,645
3,282 RadioShack Corp........................................................................ 155,485
------------
501,450
------------
CONSTRUCTION/AGRICULTURAL EQUIPMENT/TRUCKS (0.2%)
6,129 Caterpillar, Inc....................................................................... 207,620
730 Cummins Engine Co., Inc................................................................ 19,892
4,115 Deere & Co............................................................................. 152,255
1,097 Navistar International Corp.*.......................................................... 34,076
1,345 PACCAR, Inc............................................................................ 53,380
------------
467,223
------------
CONSUMER ELECTRONICS/APPLIANCES (0.0%)
1,378 Maytag Corp............................................................................ 50,814
1,284 Whirlpool Corp......................................................................... 59,866
------------
110,680
------------
CONSUMER SUNDRIES (0.0%)
1,120 American Greetings Corp. (Class A)..................................................... 21,280
------------
CONTAINERS/PACKAGING (0.1%)
525 Ball Corp.............................................................................. 16,898
934 Bemis Company, Inc..................................................................... 31,406
2,245 Crown Cork & Seal Co., Inc............................................................. 33,675
2,577 Owens-Illinois, Inc.*.................................................................. 30,119
2,974 Pactiv Corp.*.......................................................................... 23,420
1,471 Sealed Air Corp.*...................................................................... 77,044
922 Temple-Inland, Inc..................................................................... 38,724
------------
251,286
------------
CONTRACT DRILLING (0.1%)
1,650 Rowan Companies, Inc.*................................................................. 50,119
3,700 Transocean Sedco Forex Inc.*........................................................... 197,719
------------
247,838
------------
DEPARTMENT STORES (0.4%)
1,646 Dillard's, Inc. (Class A).............................................................. 20,163
3,763 Federated Department Stores, Inc.*..................................................... 127,001
5,735 Kohl's Corp.*.......................................................................... 319,009
5,846 May Department Stores Co............................................................... 140,304
4,589 Penney (J.C.) Co., Inc................................................................. 84,610
6,199 Sears, Roebuck & Co.................................................................... 202,242
------------
893,329
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
68
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - S&P 500 INDEX
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
DISCOUNT CHAINS (2.4%)
1,924 Consolidated Stores Corp.*............................................................. $ 23,088
7,855 Costco Wholesale Corp.*................................................................ 259,215
5,786 Dollar General Corp.................................................................... 112,827
8,451 Kmart Corp.*........................................................................... 57,572
8,017 Target Corp............................................................................ 464,986
78,363 Wal-Mart Stores, Inc................................................................... 4,515,668
------------
5,433,356
------------
DIVERSIFIED COMMERCIAL SERVICES (0.2%)
2,696 Convergys Corp.*....................................................................... 139,855
6,528 Paychex, Inc........................................................................... 274,176
2,269 Sabre Holdings Corp.*.................................................................. 64,666
------------
478,697
------------
DIVERSIFIED ELECTRONIC PRODUCTS (0.0%)
3,306 Rockwell International Corp............................................................ 104,139
------------
DIVERSIFIED FINANCIAL SERVICES (2.3%)
23,488 American Express Co.................................................................... 1,224,312
59,334 Citigroup, Inc......................................................................... 3,574,873
5,678 Conseco, Inc........................................................................... 55,360
2,505 Providian Financial Corp............................................................... 225,450
------------
5,079,995
------------
DIVERSIFIED MANUFACTURING (1.2%)
2,491 Danaher Corp........................................................................... 123,149
3,569 Dover Corp............................................................................. 144,768
14,033 Honeywell International, Inc........................................................... 472,737
1,546 ITT Industries, Inc.................................................................... 46,960
6,959 Minnesota Mining & Manufacturing Co.................................................... 574,117
2,747 Thermo Electron Corp.*................................................................. 57,859
29,679 Tyco International Ltd. (Bermuda)...................................................... 1,406,043
------------
2,825,633
------------
DRUGSTORE CHAINS (0.4%)
6,860 CVS Corp............................................................................... 274,400
683 Longs Drug Stores Corp................................................................. 14,855
4,552 Rite Aid Corp.*........................................................................ 29,872
17,720 Walgreen Co............................................................................ 570,362
------------
889,489
------------
E.D.P. PERIPHERALS (1.6%)
38,152 EMC Corp.*............................................................................. 2,935,319
2,272 Lexmark International Group, Inc.*..................................................... 152,792
5,355 Network Appliance, Inc.*............................................................... 430,743
3,995 Seagate Technology, Inc.*.............................................................. 219,725
------------
3,738,579
------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
E.D.P. SERVICES (0.7%)
11,028 Automatic Data Processing, Inc......................................................... $ 590,687
2,548 Ceridian Corp.*........................................................................ 61,311
2,942 Computer Sciences Corp.*............................................................... 219,731
8,190 Electronic Data Systems Corp........................................................... 337,837
7,249 First Data Corp........................................................................ 359,732
------------
1,569,298
------------
ELECTRIC UTILITIES (1.6%)
7,494 AES Corp. (The)*....................................................................... 341,914
2,413 Ameren Corp............................................................................ 81,439
5,627 American Electric Power Co............................................................. 166,700
2,794 Cinergy Corp........................................................................... 71,072
1,930 CMS Energy Corp........................................................................ 42,701
3,727 Consolidated Edison, Inc............................................................... 110,412
2,630 Constellation Energy Group, Inc........................................................ 85,639
2,807 CP&L, Inc.............................................................................. 89,649
4,185 Dominion Resources, Inc................................................................ 179,432
2,508 DTE Energy Co.......................................................................... 76,651
6,461 Duke Energy Corp....................................................................... 364,239
5,842 Edison International................................................................... 119,761
4,043 Entergy Corp........................................................................... 109,919
4,060 FirstEnergy Corp....................................................................... 94,902
1,734 Florida Progress Corp.................................................................. 81,281
3,133 FPL Group, Inc......................................................................... 155,083
2,142 GPU, Inc............................................................................... 57,968
2,048 New Century Energies, Inc.............................................................. 61,440
3,031 Niagara Mohawk Holdings Inc.*.......................................................... 42,245
2,762 Northern States Power Co............................................................... 55,758
2,981 PECO Energy Co......................................................................... 120,172
6,775 PG & E Corp............................................................................ 166,834
1,490 Pinnacle West Capital Corp............................................................. 50,474
2,536 PPL Corp............................................................................... 55,633
3,794 Public Service Enterprise Group, Inc................................................... 131,367
5,199 Reliant Energy, Inc.................................................................... 153,695
11,404 Southern Co............................................................................ 265,856
4,637 TXU Corp............................................................................... 136,791
3,126 Unicom Corp............................................................................ 120,937
------------
3,589,964
------------
ELECTRICAL PRODUCTS (0.4%)
3,408 American Power Conversion Corp.*....................................................... 138,876
1,634 Cooper Industries, Inc................................................................. 53,207
7,503 Emerson Electric Co.................................................................... 452,994
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
69
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - S&P 500 INDEX
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
3,449 Molex Inc.............................................................................. $ 166,199
1,019 Thomas & Betts Corp.................................................................... 19,488
------------
830,764
------------
ELECTRONIC COMPONENTS (0.3%)
1,418 Andrew Corp.*.......................................................................... 47,592
2,266 Sanmina Corp.*......................................................................... 193,601
10,483 Solectron Corp.*....................................................................... 438,976
------------
680,169
------------
ELECTRONIC DATA PROCESSING (5.2%)
5,722 Apple Computer, Inc.*.................................................................. 299,332
29,854 Compaq Computer Corp................................................................... 763,143
45,274 Dell Computer Corp.*................................................................... 2,232,574
5,658 Gateway, Inc.*......................................................................... 321,091
17,584 Hewlett-Packard Co..................................................................... 2,195,802
31,170 International Business Machines Corp................................................... 3,415,063
1,676 NCR Corp.*............................................................................. 65,259
27,892 Sun Microsystems, Inc.*................................................................ 2,536,429
5,482 Unisys Corp.*.......................................................................... 79,832
------------
11,908,525
------------
ELECTRONIC PRODUCTION EQUIPMENT (0.8%)
14,199 Applied Materials, Inc.*............................................................... 1,286,784
3,270 KLA-Tencor Corp.*...................................................................... 191,499
2,210 Novellus Systems, Inc.*................................................................ 125,003
3,045 Teradyne, Inc.*........................................................................ 223,807
------------
1,827,093
------------
ENGINEERING & CONSTRUCTION (0.0%)
1,343 Fluor Corp............................................................................. 42,472
------------
ENVIRONMENTAL SERVICES (0.1%)
3,322 Allied Waste Industries, Inc.*......................................................... 33,220
10,920 Waste Management, Inc.................................................................. 207,480
------------
240,700
------------
FARMING/SEEDS/MILLING (0.0%)
10,587 Archer-Daniels-Midland Co.............................................................. 103,885
------------
FINANCE COMPANIES (1.2%)
12,806 Associates First Capital Corp. (Class A)............................................... 285,734
3,443 Capital One Financial Corp............................................................. 153,644
1,993 Countrywide Credit Industries, Inc..................................................... 60,413
17,712 Fannie Mae............................................................................. 924,345
12,223 Freddie Mac............................................................................ 495,031
8,319 Household International, Inc........................................................... 345,758
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
14,097 MBNA Corp.............................................................................. $ 382,381
2,761 SLM Holding Corp....................................................................... 103,365
------------
2,750,671
------------
FINANCIAL PUBLISHING/SERVICES (0.1%)
2,843 Dun & Bradstreet Corp.................................................................. 81,381
2,482 Equifax, Inc........................................................................... 65,152
3,420 McGraw-Hill Companies, Inc............................................................. 184,680
------------
331,213
------------
FLUID CONTROLS (0.0%)
1,968 Parker-Hannifin Corp................................................................... 67,404
------------
FOOD CHAINS (0.4%)
7,448 Albertson's, Inc....................................................................... 247,646
666 Great Atlantic & Pacific Tea Co., Inc.................................................. 11,072
14,681 Kroger Co.*............................................................................ 323,900
8,728 Safeway Inc.*.......................................................................... 393,851
2,537 Winn-Dixie Stores, Inc................................................................. 36,311
------------
1,012,780
------------
FOOD DISTRIBUTORS (0.1%)
2,312 Supervalu, Inc......................................................................... 44,072
5,858 SYSCO Corp............................................................................. 246,768
------------
290,840
------------
FOREST PRODUCTS (0.1%)
2,998 Georgia-Pacific Corp................................................................... 78,697
1,831 Louisiana-Pacific Corp................................................................. 19,912
4,096 Weyerhaeuser Co........................................................................ 176,128
------------
274,737
------------
GENERIC DRUGS (0.0%)
1,698 Watson Pharmaceuticals, Inc.*.......................................................... 91,267
------------
HOME BUILDING (0.0%)
1,031 Centex Corp............................................................................ 24,228
828 Kaufman & Broad Home Corp.............................................................. 16,405
724 Pulte Corp............................................................................. 15,656
------------
56,289
------------
HOME FURNISHINGS (0.1%)
3,454 Leggett & Platt, Inc................................................................... 56,991
4,686 Newell Rubbermaid, Inc................................................................. 120,664
1,001 Tupperware Corp........................................................................ 22,022
------------
199,677
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
70
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - S&P 500 INDEX
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
HOSPITAL/NURSING MANAGEMENT (0.2%)
9,804 HCA - The Healthcare Corp.............................................................. $ 297,796
1,789 Manor Care, Inc.*...................................................................... 12,523
5,499 Tenet Healthcare Corp.*................................................................ 148,473
------------
458,792
------------
HOTELS/RESORTS (0.2%)
10,628 Carnival Corp.......................................................................... 207,246
6,476 Hilton Hotels Corp..................................................................... 60,712
4,213 Marriott International, Inc. (Class A)................................................. 151,931
------------
419,889
------------
INDUSTRIAL MACHINERY/COMPONENTS (0.2%)
5,302 Illinois Tool Works Inc................................................................ 302,214
2,839 Ingersoll-Rand Co...................................................................... 114,270
------------
416,484
------------
INDUSTRIAL SPECIALTIES (0.1%)
2,280 Ecolab, Inc............................................................................ 89,062
810 Millipore Corp......................................................................... 61,054
2,174 Pall Corp.............................................................................. 40,219
------------
190,335
------------
INSURANCE BROKERS/SERVICES (0.3%)
4,499 AON Corp............................................................................... 139,750
4,740 Marsh & McLennan Companies, Inc........................................................ 495,034
------------
634,784
------------
INTEGRATED OIL COMPANIES (4.1%)
1,593 Amerada Hess Corp...................................................................... 98,368
11,463 Chevron Corp........................................................................... 972,206
10,977 Conoco, Inc. (Class B)................................................................. 269,623
61,206 Exxon Mobil Corp....................................................................... 4,804,671
4,463 Phillips Petroleum Co.................................................................. 226,218
37,701 Royal Dutch Petroleum Co. (ADR) (Netherlands).......................................... 2,320,968
9,706 Texaco, Inc............................................................................ 516,844
4,270 Unocal Corp............................................................................ 141,444
------------
9,350,342
------------
INTERNET SERVICES (1.5%)
40,393 America Online, Inc.*.................................................................. 2,130,731
9,552 Yahoo! Inc.*........................................................................... 1,183,254
------------
3,313,985
------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
INVESTMENT BANKERS/BROKERS/SERVICES (1.6%)
1,945 Bear Stearns Companies, Inc............................................................ $ 80,961
2,125 Lehman Brothers Holdings, Inc.......................................................... 200,945
6,820 Merrill Lynch & Co., Inc............................................................... 784,300
19,900 Morgan Stanley Dean Witter & Co. (Note 4).............................................. 1,656,675
2,560 Paine Webber Group, Inc................................................................ 116,480
23,940 Schwab (Charles) Corp.................................................................. 804,982
------------
3,644,343
------------
INVESTMENT MANAGERS (0.1%)
4,282 Franklin Resources, Inc................................................................ 130,066
2,123 Price (T.) Rowe Associates, Inc........................................................ 90,227
------------
220,293
------------
LIFE INSURANCE (0.2%)
4,367 American General Corp.................................................................. 266,387
1,818 Jefferson-Pilot Corp................................................................... 102,603
3,371 Lincoln National Corp.................................................................. 121,777
2,253 Torchmark Corp......................................................................... 55,621
------------
546,388
------------
MAJOR BANKS (3.6%)
29,138 Bank of America Corp................................................................... 1,252,934
12,967 Bank of New York Co., Inc.............................................................. 602,965
20,165 Bank One Corp.......................................................................... 535,633
6,128 BB&T Corp.............................................................................. 146,306
21,745 Chase Manhattan Corp. (The)............................................................ 1,001,629
2,750 Comerica, Inc.......................................................................... 123,406
17,240 First Union Corp....................................................................... 427,767
15,845 FleetBoston Financial Corp............................................................. 538,730
3,903 Huntington Bancshares, Inc............................................................. 61,716
7,644 KeyCorp................................................................................ 134,725
8,637 Mellon Financial Corp.................................................................. 314,711
2,854 Morgan (J.P.) & Co., Inc............................................................... 314,297
10,659 National City Corp..................................................................... 181,869
5,103 PNC Bank Corp.......................................................................... 239,203
2,955 SouthTrust Corp........................................................................ 66,857
2,829 State Street Corp...................................................................... 300,051
3,093 Summit Bancorp......................................................................... 76,165
5,318 SunTrust Banks, Inc.................................................................... 242,966
13,219 U.S. Bancorp........................................................................... 254,466
3,560 Wachovia Corp.......................................................................... 193,130
28,328 Wells Fargo & Co....................................................................... 1,097,710
------------
8,107,236
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
71
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - S&P 500 INDEX
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
MAJOR CHEMICALS (0.7%)
11,886 Dow Chemical Co. (The)................................................................. $ 358,809
18,414 Du Pont (E.I.) de Nemours & Co., Inc................................................... 805,613
1,348 Eastman Chemical Co.................................................................... 64,367
1,885 Hercules Inc........................................................................... 26,508
3,825 Rohm & Haas Co......................................................................... 131,963
2,368 Union Carbide Corp..................................................................... 117,216
------------
1,504,476
------------
MAJOR PHARMACEUTICALS (8.7%)
27,242 Abbott Laboratories.................................................................... 1,213,972
22,931 American Home Products Corp............................................................ 1,347,196
34,682 Bristol-Myers Squibb Co................................................................ 2,020,227
24,455 Johnson & Johnson...................................................................... 2,491,353
19,856 Lilly (Eli) & Co....................................................................... 1,983,118
40,429 Merck & Co., Inc....................................................................... 3,097,872
110,653 Pfizer, Inc............................................................................ 5,311,344
22,316 Pharmacia Corp......................................................................... 1,153,458
25,742 Schering-Plough Corp................................................................... 1,299,971
------------
19,918,511
------------
MAJOR U.S. TELECOMMUNICATIONS (5.4%)
5,543 ALLTEL Corp............................................................................ 343,320
55,302 AT&T Corp.............................................................................. 1,748,926
27,176 Bell Atlantic Corp..................................................................... 1,380,881
33,081 BellSouth Corp......................................................................... 1,410,078
16,927 GTE Corp............................................................................... 1,053,706
59,809 SBC Communications, Inc................................................................ 2,586,739
15,413 Sprint Corp. (FON Group)............................................................... 786,063
8,926 U.S. West, Inc......................................................................... 765,405
50,339 WorldCom, Inc.*........................................................................ 2,309,302
------------
12,384,420
------------
MANAGED HEALTH CARE (0.2%)
2,482 Aetna Inc.............................................................................. 159,313
2,908 Humana, Inc.*.......................................................................... 14,177
2,855 UnitedHealth Group Inc................................................................. 244,816
1,091 Wellpoint Health Networks, Inc.*....................................................... 79,029
------------
497,335
------------
MEAT/POULTRY/FISH (0.1%)
8,655 ConAgra, Inc........................................................................... 164,986
------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
MEDIA CONGLOMERATES (2.2%)
36,532 Disney (Walt) Co. (The)................................................................ $ 1,417,898
23,134 Time Warner, Inc....................................................................... 1,758,184
26,813 Viacom, Inc. (Class B)*................................................................ 1,828,311
------------
5,004,393
------------
MEDICAL EQUIPMENT & SUPPLIES (0.5%)
21,044 Medtronic, Inc......................................................................... 1,048,254
------------
MEDICAL SPECIALTIES (0.7%)
1,805 ALZA Corp.*............................................................................ 106,721
889 Bard (C.R.), Inc....................................................................... 42,783
933 Bausch & Lomb, Inc..................................................................... 72,191
5,104 Baxter International, Inc.............................................................. 358,875
4,438 Becton, Dickinson & Co................................................................. 127,315
2,080 Biomet, Inc............................................................................ 79,950
7,168 Boston Scientific Corp.*............................................................... 157,248
5,388 Guidant Corp.*......................................................................... 266,706
1,190 Mallinckrodt, Inc...................................................................... 51,691
3,663 PE Corporation-PE Biosystems Group..................................................... 241,300
1,474 St. Jude Medical, Inc.*................................................................ 67,620
------------
1,572,400
------------
MEDICAL/DENTAL DISTRIBUTORS (0.2%)
4,841 Cardinal Health, Inc................................................................... 358,234
4,954 McKesson HBOC, Inc..................................................................... 103,724
------------
461,958
------------
MEDICAL/NURSING SERVICES (0.0%)
6,777 Healthsouth Corp.*..................................................................... 48,710
------------
METALS FABRICATIONS (0.0%)
1,075 Timken Co. (The)....................................................................... 20,022
------------
MID - SIZED BANKS (0.6%)
6,907 AmSouth Bancorporation................................................................. 108,785
5,446 Fifth Third Bancorp.................................................................... 344,460
17,055 Firstar Corp........................................................................... 359,221
3,909 Northern Trust Corp.................................................................... 254,085
2,416 Old Kent Financial Corp................................................................ 64,629
3,879 Regions Financial Corp................................................................. 76,853
4,965 Synovus Financial Corp................................................................. 87,508
2,379 Union Planters Corp.................................................................... 66,463
------------
1,362,004
------------
MILITARY/GOV'T/TECHNICAL (0.2%)
3,528 General Dynamics Corp.................................................................. 184,338
864 PerkinElmer, Inc.*..................................................................... 57,132
5,975 Raytheon Co. (Class B)................................................................. 115,019
------------
356,489
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
72
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - S&P 500 INDEX
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
MOTOR VEHICLES (0.7%)
21,191 Ford Motor Co.......................................................................... $ 911,213
9,406 General Motors Corp.................................................................... 546,136
5,338 Harley-Davidson, Inc................................................................... 205,513
------------
1,662,862
------------
MOVIES/ENTERTAINMENT (0.2%)
7,673 Seagram Co. Ltd. (Canada).............................................................. 445,034
------------
MULTI-LINE INSURANCE (1.8%)
13,092 Allstate Corp. (Note 4)................................................................ 291,297
27,101 American International Group, Inc...................................................... 3,184,368
2,863 CIGNA Corp............................................................................. 267,691
3,778 Hartford Financial Services Group, Inc................................................. 211,332
2,244 Safeco Corp............................................................................ 44,600
------------
3,999,288
------------
MULTI-SECTOR COMPANIES (4.2%)
1,065 Crane Co............................................................................... 25,893
2,784 Fortune Brands, Inc.................................................................... 64,206
173,947 General Electric Co.................................................................... 9,219,191
1,034 McDermott International, Inc........................................................... 9,112
706 National Service Industries, Inc....................................................... 13,767
2,535 Textron, Inc........................................................................... 137,682
------------
9,469,851
------------
NATURAL GAS (0.1%)
477 Eastern Enterprises.................................................................... 30,051
817 Nicor Inc.............................................................................. 26,655
513 ONEOK, Inc............................................................................. 13,306
617 Peoples Energy Corp.................................................................... 19,975
3,591 Sempra Energy.......................................................................... 61,047
------------
151,034
------------
NEWSPAPERS (0.3%)
1,559 Dow Jones & Co., Inc................................................................... 114,197
4,686 Gannett Co., Inc....................................................................... 280,281
1,366 Knight-Ridder, Inc..................................................................... 72,654
2,988 New York Times Co. (The) (Class A)..................................................... 118,026
4,087 Tribune Co............................................................................. 143,045
------------
728,203
------------
OFFICE EQUIPMENT/SUPPLIES (0.2%)
1,972 Avery Dennison Corp.................................................................... 132,371
4,532 Pitney Bowes, Inc...................................................................... 181,280
11,714 Xerox Corp............................................................................. 243,066
------------
556,717
------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
OIL & GAS PRODUCTION (0.3%)
2,252 Anardarko Petroleum Corp............................................................... $ 111,052
1,999 Apache Corp............................................................................ 117,566
3,785 Burlington Resources, Inc.............................................................. 144,776
1,657 Kerr-McGee Corp........................................................................ 97,659
6,481 Occidental Petroleum Corp.............................................................. 136,506
4,432 Union Pacific Resources Group, Inc..................................................... 97,504
------------
705,063
------------
OIL REFINING/MARKETING (0.1%)
1,233 Ashland, Inc........................................................................... 43,232
1,556 Sunoco Inc............................................................................. 45,805
2,541 Tosco Corp............................................................................. 71,942
5,482 USX-Marathon Group..................................................................... 137,393
------------
298,372
------------
OIL/GAS TRANSMISSION (0.7%)
3,761 Coastal Corp........................................................................... 228,951
1,418 Columbia Energy Group, Inc............................................................. 93,056
4,066 El Paso Energy Corp.................................................................... 207,112
12,871 Enron Corp............................................................................. 830,180
7,767 Williams Companies, Inc................................................................ 323,787
------------
1,683,086
------------
OILFIELD SERVICES/EQUIPMENT (0.6%)
5,806 Baker Hughes Inc....................................................................... 185,792
7,805 Halliburton Co......................................................................... 368,298
10,005 Schlumberger Ltd....................................................................... 746,623
------------
1,300,713
------------
OTHER CONSUMER SERVICES (0.1%)
1,730 Block (H.&R.), Inc..................................................................... 56,009
12,677 Cendant Corp.*......................................................................... 177,478
------------
233,487
------------
OTHER METALS/MINERALS (0.1%)
1,463 Allegheny Technologies Inc............................................................. 26,334
3,195 Inco Ltd. (Canada)*.................................................................... 49,123
1,384 Phelps Dodge Corp...................................................................... 51,468
------------
126,925
------------
OTHER PHARMACEUTICALS (0.1%)
2,282 Allergan, Inc.......................................................................... 170,009
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
73
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - S&P 500 INDEX
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
OTHER SPECIALTY STORES (0.2%)
2,352 AutoZone, Inc.*........................................................................ $ 51,744
2,467 Bed Bath & Beyond Inc.*................................................................ 89,275
5,559 Office Depot, Inc.*.................................................................... 34,744
8,516 Staples, Inc.*......................................................................... 130,934
1,274 Tiffany & Co........................................................................... 85,995
3,802 Toys 'R' Us, Inc.*..................................................................... 55,367
------------
448,059
------------
OTHER TELECOMMUNICATIONS (0.2%)
2,466 CenturyTel, Inc........................................................................ 70,898
15,491 Global Crossing Ltd. (Bermuda)*........................................................ 407,607
------------
478,505
------------
PACKAGE GOODS/COSMETICS (1.6%)
980 Alberto-Culver Co. (Class B)........................................................... 29,951
4,174 Avon Products, Inc..................................................................... 185,743
4,127 Clorox Co.............................................................................. 184,941
10,139 Colgate-Palmolive Co................................................................... 607,073
18,354 Gillette Co............................................................................ 641,243
1,808 International Flavors & Fragrances, Inc................................................ 54,579
9,769 Kimberly-Clark Corp.................................................................... 560,496
22,996 Procter & Gamble Co.................................................................... 1,316,521
------------
3,580,547
------------
PACKAGED FOODS (1.0%)
4,827 BestFoods.............................................................................. 334,270
7,428 Campbell Soup Co....................................................................... 216,341
5,125 General Mills, Inc..................................................................... 196,031
6,193 Heinz (H.J.) Co........................................................................ 270,944
7,131 Kellogg Co............................................................................. 212,147
5,740 Nabisco Group Holdings................................................................. 148,881
2,302 Quaker Oats Company (The).............................................................. 172,938
5,393 Ralston-Ralston Purina Group........................................................... 107,523
15,289 Sara Lee Corp.......................................................................... 295,269
10,049 Unilever N.V. (Netherlands)............................................................ 432,107
------------
2,386,451
------------
PAINTS/COATINGS (0.1%)
3,062 PPG Industries, Inc.................................................................... 135,685
2,879 Sherwin-Williams Co.................................................................... 60,999
------------
196,684
------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
PAPER (0.2%)
1,006 Boise Cascade Corp..................................................................... $ 26,030
3,618 Fort James Corp........................................................................ 83,666
8,473 International Paper Co................................................................. 252,600
1,807 Mead Corp.............................................................................. 45,627
503 Potlatch Corp.......................................................................... 16,662
1,768 Westavaco Corp......................................................................... 43,869
1,936 Willamette Industries, Inc............................................................. 52,756
------------
521,210
------------
PHOTOGRAPHIC PRODUCTS (0.1%)
5,447 Eastman Kodak Co....................................................................... 324,097
773 Polaroid Corp.......................................................................... 13,962
------------
338,059
------------
PRECIOUS METALS (0.1%)
6,956 Barrick Gold Corp. (Canada)............................................................ 126,512
2,813 Freeport-McMoRan Copper & Gold, Inc. (Class B)*........................................ 26,020
4,579 Homestake Mining Co.................................................................... 31,481
2,952 Newmont Mining Corp.................................................................... 63,837
5,758 Placer Dome Inc. (Canada).............................................................. 55,061
------------
302,911
------------
PRECISION INSTRUMENTS (0.3%)
7,947 Agilent Technologies, Inc.*............................................................ 586,091
848 Tektronix, Inc.*....................................................................... 62,752
------------
648,843
------------
PRINTING/FORMS (0.0%)
1,274 Deluxe Corp............................................................................ 30,019
2,143 Donnelley (R.R.) & Sons Co............................................................. 48,351
------------
78,370
------------
PROPERTY - CASUALTY INSURERS (0.3%)
3,076 Chubb Corp............................................................................. 189,174
2,827 Cincinnati Financial Corp.............................................................. 88,874
1,734 Loews Corp............................................................................. 104,040
1,284 Progressive Corp....................................................................... 95,016
3,728 St. Paul Companies, Inc................................................................ 127,218
------------
604,322
------------
RAILROADS (0.3%)
7,530 Burlington Northern Santa Fe Corp...................................................... 172,719
3,841 CSX Corp............................................................................... 81,381
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
74
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - S&P 500 INDEX
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
1,959 Kansas City Southern Industries, Inc................................................... $ 173,739
6,736 Norfolk Southern Corp.................................................................. 100,198
4,358 Union Pacific Corp..................................................................... 162,063
------------
690,100
------------
RECREATIONAL PRODUCTS/TOYS (0.1%)
1,545 Brunswick Corp......................................................................... 25,589
3,026 Hasbro, Inc............................................................................ 45,579
7,484 Mattel, Inc............................................................................ 98,695
------------
169,863
------------
RENTAL/LEASING COMPANIES (0.0%)
1,046 Ryder System, Inc...................................................................... 19,809
------------
RESTAURANTS (0.5%)
2,175 Darden Restaurants, Inc................................................................ 35,344
23,502 McDonald's Corp........................................................................ 774,097
3,226 Starbucks Corp.*....................................................................... 123,193
2,592 Tricon Global Restaurants, Inc.*....................................................... 73,224
2,000 Wendy's International, Inc.*........................................................... 35,625
------------
1,041,483
------------
SAVINGS & LOAN ASSOCIATIONS (0.2%)
3,684 Charter One Financial, Inc............................................................. 84,732
2,780 Golden West Financial Corp............................................................. 113,459
9,631 Washington Mutual, Inc................................................................. 278,095
------------
476,286
------------
SEMICONDUCTORS (6.3%)
2,693 Advanced Micro Devices, Inc.*.......................................................... 208,034
3,500 Altera Corp.*.......................................................................... 356,563
6,221 Analog Devices, Inc.*.................................................................. 472,796
3,770 Broadcom Corp. (Class A)*.............................................................. 825,394
3,821 Conexant Systems, Inc.*................................................................ 185,557
58,883 Intel Corp............................................................................. 7,868,241
5,470 Linear Technology Corp................................................................. 349,396
5,397 LSI Logic Corp.*....................................................................... 292,113
4,970 Maxim Integrated Products, Inc.*....................................................... 337,339
9,755 Micron Technology, Inc.*............................................................... 859,050
443 MIPS Technologies, Inc.*............................................................... 17,279
3,104 National Semiconductor Corp.*.......................................................... 176,152
28,771 Texas Instruments, Inc................................................................. 1,976,208
5,649 Xilinx, Inc.*.......................................................................... 466,396
------------
14,390,518
------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
SERVICES TO THE HEALTH INDUSTRY (0.1%)
5,226 IMS Health Inc......................................................................... $ 94,068
2,025 Quintiles Transnational Corp.*......................................................... 28,477
467 Shared Medical Systems Corp............................................................ 34,062
------------
156,607
------------
SHOE MANUFACTURING (0.1%)
4,808 Nike, Inc. (Class B)................................................................... 191,419
977 Reebok International Inc. (United Kingdom)*............................................ 15,571
------------
206,990
------------
SPECIALTY CHEMICALS (0.2%)
4,032 Air Products & Chemicals, Inc.......................................................... 124,236
2,244 Engelhard Corp......................................................................... 38,288
531 FMC Corp.*............................................................................. 30,798
1,187 Grace (W. R.) & Co.*................................................................... 14,392
957 Great Lakes Chemical Corp.............................................................. 30,146
2,772 Praxair, Inc........................................................................... 103,777
1,499 Sigma-Aldrich Corp..................................................................... 43,846
------------
385,483
------------
SPECIALTY FOODS/CANDY (0.1%)
2,412 Hershey Foods Corp..................................................................... 116,982
2,009 Wrigley (Wm.) Jr. Co. (Class A)........................................................ 161,097
------------
278,079
------------
SPECIALTY INSURERS (0.1%)
1,728 MBIA, Inc.............................................................................. 83,268
1,861 MGIC Investment Corp................................................................... 84,676
------------
167,944
------------
SPECIALTY STEELS (0.0%)
1,495 Nucor Corp............................................................................. 49,615
------------
STEEL/IRON ORE (0.0%)
2,276 Bethlehem Steel Corp.*................................................................. 8,108
1,554 USX-U.S. Steel Group................................................................... 28,846
1,516 Worthington Industries, Inc............................................................ 15,918
------------
52,872
------------
TELECOMMUNICATION EQUIPMENT (5.1%)
5,376 ADC Telecommunications, Inc.*.......................................................... 450,576
2,685 Comverse Technology, Inc.*............................................................. 249,705
4,849 Corning Inc............................................................................ 1,308,624
57,254 Lucent Technologies Inc................................................................ 3,392,300
37,841 Motorola, Inc.......................................................................... 1,099,754
52,083 Nortel Networks Corp. (Canada)......................................................... 3,554,665
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
75
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - S&P 500 INDEX
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
13,029 QUALCOMM Inc.*......................................................................... $ 780,926
2,800 Scientific-Atlanta, Inc................................................................ 208,600
7,200 Tellabs, Inc.*......................................................................... 492,750
------------
11,537,900
------------
TEXTILES (0.0%)
311 Springs Industries, Inc. (Class A)..................................................... 10,010
------------
TOBACCO (0.5%)
40,205 Philip Morris Companies, Inc........................................................... 1,067,945
2,852 UST, Inc............................................................................... 41,889
------------
1,109,834
------------
TOOLS/HARDWARE (0.1%)
1,497 Black & Decker Corp.................................................................... 58,851
399 Briggs & Stratton Corp................................................................. 13,666
1,030 Snap-On, Inc........................................................................... 27,424
1,541 Stanley Works.......................................................................... 36,599
------------
136,540
------------
WHOLESALE DISTRIBUTORS (0.0%)
1,652 Grainger (W.W.), Inc................................................................... 50,903
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $197,151,640)......................................................... 220,741,959
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENT (a) (3.5%)
U.S. GOVERNMENT AGENCY
$ 7,900 Federal Home Loan Banks 6.57% due 07/03/00 (AMORTIZED COST $7,897,116)................. $ 7,897,116
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $205,048,756) (B)........................................................ 100.4% 228,639,075
LIABILITIES IN EXCESS OF OTHER ASSETS..................................................... (0.4) (817,873)
----- -------------
NET ASSETS................................................................................ 100.0% $ 227,821,202
----- -------------
----- -------------
</TABLE>
---------------------
ADR American Depository Receipt.
* Non-income producing security.
(a) Purchased on a discount basis. The interest rate shown has been adjusted to
reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $41,163,787 and the
aggregate gross unrealized depreciation is $17,573,468, resulting in net
unrealized appreciation of $23,590,319.
FUTURES CONTRACTS OPEN AT JUNE 30, 2000:
<TABLE>
<CAPTION>
DESCRIPTION UNDERLYING
NUMBER OF DELIVERY MONTH, FACE AMOUNT UNREALIZED
CONTRACTS AND YEAR AT VALUE LOSS
-----------------------------------------------------------
<S> <C> <C> <C>
S&P 500 Index
SEP/2000
20 $7,340,500 $(147,092)
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
76
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - COMPETITIVE EDGE "BEST
IDEAS"
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS (98.8%)
AUSTRALIA (2.4%)
MEDIA CONGLOMERATES
162,600 News Corporation Ltd. (Pref.)......................................... $ 1,954,182
-----------
FINLAND (4.1%)
PAPER
72,300 UPM-Kymmene Oyj....................................................... 1,794,081
-----------
TELECOMMUNICATION EQUIPMENT
31,900 Nokia Oyj (ADR) (Finland)............................................. 1,593,006
-----------
TOTAL FINLAND......................................................... 3,387,087
-----------
FRANCE (7.6%)
MULTI-LINE INSURANCE
14,800 Axa................................................................... 2,330,645
-----------
OIL REFINING/MARKETING
12,600 Total Fina Elf........................................................ 1,931,286
-----------
PACKAGED FOODS
15,200 Groupe Danone......................................................... 2,016,456
-----------
TOTAL FRANCE.......................................................... 6,278,387
-----------
GERMANY (2.1%)
MOTOR VEHICLES
56,800 Bayerische Motoren Werke (BMW) AG..................................... 1,713,034
-----------
JAPAN (10.2%)
CONSUMER ELECTRONICS/APPLIANCES
20,520 Sony Corp............................................................. 1,916,491
-----------
DIVERSIFIED ELECTRONIC PRODUCTS
76,700 Matsushita Electric Industrial Co., Ltd............................... 1,989,858
-----------
ELECTRONIC PRODUCTION EQUIPMENT
15,500 Tokyo Electron Ltd.................................................... 2,123,207
-----------
SPECIALTY CHEMICALS
46,400 Shin-Etsu Chemical Co., Ltd........................................... 2,355,019
-----------
TOTAL JAPAN........................................................... 8,384,575
-----------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------
<C> <S> <C>
MEXICO (2.5%)
TELECOMMUNICATIONS
36,300 Telefonos de Mexico S.A. (Seies L) (ADR).............................. $ 2,073,638
-----------
NETHERLANDS (2.6%)
ALCOHOLIC BEVERAGES
34,800 Heineken N.V.......................................................... 2,117,336
-----------
SWEDEN (2.6%)
LIFE INSURANCE
82,600 Skandia Forsakrings AB................................................ 2,188,390
-----------
SWITZERLAND (2.4%)
BUILDING MATERIALS
1,610 Holderbank Financiere Glarus AG (B Shares)............................ 1,971,590
-----------
UNITED KINGDOM (5.1%)
ALCOHOLIC BEVERAGES
248,400 Diageo PLC............................................................ 2,233,086
-----------
INTEGRATED OIL COMPANIES
35,600 BP Amoco PLC (ADR).................................................... 2,013,625
-----------
TOTAL UNITED KINGDOM.................................................. 4,246,711
-----------
UNITED STATES (57.2%)
AIR FREIGHT/DELIVERY SERVICES
50,700 FedEx Corp.*.......................................................... 1,926,600
-----------
BROADCASTING
26,300 Clear Channel Communications, Inc.*................................... 1,972,500
-----------
COMPUTER COMMUNICATIONS
34,200 Cisco Systems, Inc.*.................................................. 2,173,837
-----------
COMPUTER SOFTWARE
28,800 Microsoft Corp.*...................................................... 2,302,200
-----------
DISCOUNT CHAINS
42,300 Wal-Mart Stores, Inc.................................................. 2,437,537
-----------
DIVERSIFIED FINANCIAL SERVICES
38,600 American Express Co................................................... 2,012,025
-----------
E.D.P. PERIPHERALS
29,000 EMC Corp.*............................................................ 2,231,188
-----------
ELECTRICAL PRODUCTS
34,200 Emerson Electric Co................................................... 2,064,825
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
77
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - COMPETITIVE EDGE "BEST
IDEAS"
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------
<C> <S> <C>
INTERNET SERVICES
35,300 America Online, Inc.*................................................. $ 1,862,075
65,200 Exodus Communications, Inc.*.......................................... 3,003,275
-----------
4,865,350
-----------
MAJOR BANKS
45,100 Bank of New York Co., Inc............................................. 2,097,150
-----------
MAJOR CHEMICALS
39,100 Du Pont (E.I.) de Nemours & Co., Inc.................................. 1,710,625
-----------
MAJOR PHARMACEUTICALS
34,200 American Home Products Corp........................................... 2,009,250
-----------
MAJOR U.S. TELECOMMUNICATIONS
44,900 WorldCom, Inc.*....................................................... 2,059,788
-----------
MEDIA CONGLOMERATES
24,100 Time Warner Inc....................................................... 1,831,600
-----------
MEDICAL EQUIPMENT & SUPPLIES
40,500 Medtronic, Inc........................................................ 2,017,406
-----------
MULTI-SECTOR COMPANIES
45,300 General Electric Co................................................... 2,400,900
-----------
OIL/GAS TRANSMISSION
28,000 Enron Corp............................................................ 1,806,000
-----------
OILFIELD SERVICES/EQUIPMENT
38,400 Halliburton Co........................................................ 1,812,000
26,100 Schlumberger Ltd...................................................... 1,947,713
-----------
3,759,713
-----------
SEMICONDUCTORS
14,800 Intel Corp............................................................ 1,977,650
-----------
TELECOMMUNICATION EQUIPMENT
33,200 Lucent Technologies Inc............................................... 1,967,100
51,300 Motorola, Inc......................................................... 1,490,906
-----------
3,458,006
-----------
TOTAL UNITED STATES................................................... 47,114,150
-----------
TOTAL COMMON AND PREFERRED STOCKS
(IDENTIFIED COST $76,053,813)......................................... 81,429,080
-----------
</TABLE>
<TABLE>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
----------------------------------------------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENT (A) (1.2%)
REPURCHASE AGREEMENT
$ 987 The Bank of New York 7.00% due 07/30/00 (dated 06/30/00; proceeds
$987,089) (IDENTIFIED COST $986,514)................................ $ 986,514
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $77,040,327) (B).......................................................... 100.0% 82,415,594
LIABILITIES IN EXCESS OF OTHER ASSETS...................................................... 0.0 (14,585)
----- ------------
NET ASSETS................................................................................. 100.0% $ 82,401,009
----- ------------
----- ------------
</TABLE>
---------------------
ADR American Depository Receipt.
* Non-income producing security.
(a) Collateralized by $982,557 Federal Home Loan Bank 6.75% due 02/01/02 valued
at $1,006,262.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $9,489,305 and the
aggregate gross unrealized depreciation is $4,114,038, resulting in net
unrealized appreciation of $5,375,267.
SEE NOTES TO FINANCIAL STATEMENTS
78
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - COMPETITIVE EDGE "BEST
IDEAS"
SUMMARY OF INVESTMENTS JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Air Freight/Delivery Services...................................................... $ 1,926,600 2.3%
Alcoholic Beverages................................................................ 4,350,422 5.3
Broadcasting....................................................................... 1,972,500 2.4
Building Materials................................................................. 1,971,590 2.4
Computer Communications............................................................ 2,173,837 2.6
Computer Software.................................................................. 2,302,200 2.8
Consumer Electronics/Appliances.................................................... 1,916,491 2.3
Discount Chains.................................................................... 2,437,537 3.0
Diversified Electronic Products.................................................... 1,989,858 2.4
Diversified Financial Services..................................................... 2,012,025 2.4
E.D.P. Peripherals................................................................. 2,231,188 2.7
Electrical Products................................................................ 2,064,825 2.5
Electronic Production Equipment.................................................... 2,123,207 2.6
Integrated Oil Companies........................................................... 2,013,625 2.4
Internet Services.................................................................. 4,865,350 5.9
Life Insurance..................................................................... 2,188,390 2.7
Major Banks........................................................................ 2,097,150 2.5
Major Chemicals.................................................................... 1,710,625 2.1
Major Pharmaceuticals.............................................................. 2,009,250 2.4
Major U.S. Telecommunications...................................................... 2,059,788 2.5
Media Conglomerates................................................................ 3,785,782 4.6
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Medical Equipment & Supplies....................................................... $ 2,017,406 2.5%
Motor Vehicles..................................................................... 1,713,034 2.1
Multi-Line Insurance............................................................... 2,330,645 2.8
Multi-Sector Companies............................................................. 2,400,900 2.9
Oil Refining/Marketing............................................................. 1,931,286 2.3
Oil/Gas Transmission............................................................... 1,806,000 2.2
Oilfield Services/Equipment........................................................ 3,759,713 4.6
Packaged Foods..................................................................... 2,016,456 2.5
Paper.............................................................................. 1,794,081 2.2
Semiconductors..................................................................... 1,977,650 2.4
Specialty Chemicals................................................................ 2,355,019 2.9
Telecommunication Equipment........................................................ 5,051,012 6.1
Telecommunications................................................................. 2,073,638 2.5
Repurchase Agreement............................................................... 986,514 1.2
----------- -----
$$82,415,594 100.0%
----------- -----
----------- -----
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks...................................................................... $$79,474,898 96.4%
Preferred Stocks................................................................... 1,954,182 2.4
Short-Term Investment.............................................................. 986,514 1.2
----------- -----
$$82,415,594 100.0%
----------- -----
----------- -----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
79
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - AGGRESSIVE EQUITY
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (93.8%)
ADVERTISING (0.6%)
7,900 Omnicom Group, Inc..................................................................... $ 703,594
------------
ALCOHOLIC BEVERAGES (1.8%)
20,700 Anheuser-Busch Companies, Inc.......................................................... 1,546,031
11,300 Coors (Adolph) Co. (Class B)........................................................... 683,650
------------
2,229,681
------------
BEVERAGES - NON-ALCOHOLIC (1.6%)
45,740 PepsiCo, Inc........................................................................... 2,032,571
------------
BIOTECHNOLOGY (5.8%)
2,600 Abgenix, Inc.*......................................................................... 311,512
10,700 Amgen Inc.*............................................................................ 751,675
11,430 Cephalon, Inc.*........................................................................ 700,087
14,590 COR Therapeutics, Inc.*................................................................ 1,243,797
4,300 Human Genome Sciences, Inc.*........................................................... 573,244
7,000 IDEC Pharmaceuticals Corp.*............................................................ 820,750
3,500 ImClone Systems, Inc.*................................................................. 267,531
6,500 Immunex Corp.*......................................................................... 321,344
19,000 MedImmune, Inc.*....................................................................... 1,404,812
5,430 Millennium Pharmaceuticals, Inc.*...................................................... 607,142
3,600 QLT, Inc. (Canada)*.................................................................... 279,450
------------
7,281,344
------------
BROADCASTING (2.6%)
13,640 Clear Channel Communications, Inc.*.................................................... 1,023,000
14,500 Infinity Broadcasting Corp. (Series A)*................................................ 528,344
9,700 Univision Communications, Inc. (Class A)*.............................................. 1,003,950
31,800 USA Networks, Inc.*.................................................................... 687,675
------------
3,242,969
------------
CABLE TELEVISION (2.0%)
25,120 AT&T Corp. - Liberty Media Group (Class A)*............................................ 609,160
5,000 Cablevision Systems Corp. (Class A)*................................................... 339,375
16,000 Comcast Corp. (Class A Special)*....................................................... 649,000
19,600 Cox Communications, Inc. (Class A)*.................................................... 893,025
------------
2,490,560
------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
CELLULAR TELEPHONE (0.9%)
17,600 Sprint Corp. (PCS Group)*.............................................................. $ 1,047,200
500 Voicestream Wireless Corp.*............................................................ 58,156
------------
1,105,356
------------
COMPUTER COMMUNICATIONS (3.1%)
36,800 Cisco Systems, Inc.*................................................................... 2,339,100
6,270 Extreme Networks, Inc.*................................................................ 657,958
5,980 Juniper Networks, Inc.*................................................................ 870,090
------------
3,867,148
------------
COMPUTER SOFTWARE (4.9%)
6,900 Check Point Software Technologies Ltd. (Israel)*....................................... 1,464,525
2,140 E.piphany, Inc.*....................................................................... 229,381
4,590 i2 Technologies, Inc.*................................................................. 478,507
2,910 Mercury Interactive Corp.*............................................................. 281,542
23,510 Oracle Corp.*.......................................................................... 1,974,840
9,000 Siebel Systems, Inc.*.................................................................. 1,472,062
2,380 Veritas Software Corp.*................................................................ 268,940
------------
6,169,797
------------
CONTRACT DRILLING (2.8%)
28,300 ENSCO International Inc................................................................ 1,013,494
9,200 Global Marine, Inc.*................................................................... 259,325
25,090 Nabors Industries, Inc.*............................................................... 1,042,803
8,000 R&B Falcon Corp.*...................................................................... 188,500
14,000 Rowan Companies, Inc.*................................................................. 425,250
11,500 Transocean Sedco Forex Inc.*........................................................... 614,531
------------
3,543,903
------------
DEPARTMENT STORES (0.3%)
7,140 Kohl's Corp.*.......................................................................... 397,162
------------
DIVERSIFIED COMMERCIAL SERVICES (0.4%)
11,535 Paychex, Inc........................................................................... 484,470
------------
DIVERSIFIED ELECTRONIC PRODUCTS (1.3%)
500 Exfo Electro-Optical Engineering Inc. (Canada)*........................................ 21,937
11,800 JDS Uniphase Corp.*.................................................................... 1,413,787
3,000 Koninklijke (Royal) Philips Electronics NV (Netherlands)............................... 142,500
------------
1,578,224
------------
DIVERSIFIED FINANCIAL SERVICES (3.6%)
18,900 American Express Co.................................................................... 985,162
22,000 AXA Financial, Inc..................................................................... 748,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
80
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - AGGRESSIVE EQUITY
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
38,710 Citigroup, Inc......................................................................... $ 2,332,277
4,300 Providian Financial Corp............................................................... 387,000
------------
4,452,439
------------
E.D.P. PERIPHERALS (1.8%)
20,600 EMC Corp.*............................................................................. 1,584,912
7,500 Network Appliance, Inc.*............................................................... 603,281
------------
2,188,193
------------
E.D.P. SERVICES (0.7%)
8,590 Automatic Data Processing, Inc......................................................... 460,102
4,000 First Data Corp........................................................................ 198,500
2,000 StorageNetworks, Inc.*................................................................. 180,500
------------
839,102
------------
ELECTRIC UTILITIES (0.3%)
5,480 Calpine Corp.*......................................................................... 360,310
------------
ELECTRICAL PRODUCTS (0.1%)
1,500 Capstone Turbine Corp.*................................................................ 67,781
------------
ELECTRONIC COMPONENTS (0.4%)
7,000 Flextronics International, Ltd. (Singapore)*........................................... 480,812
------------
ELECTRONIC DATA PROCESSING (1.6%)
25,300 Dell Computer Corp.*................................................................... 1,247,606
4,100 Hewlett-Packard Co..................................................................... 511,987
2,660 Sun Microsystems, Inc.*................................................................ 241,894
------------
2,001,487
------------
ELECTRONIC PRODUCTION EQUIPMENT (1.7%)
17,360 Applied Materials, Inc.*............................................................... 1,573,250
12,490 ASM Lithography Holding NV (Netherlands)*.............................................. 550,341
------------
2,123,591
------------
FINANCE COMPANIES (0.3%)
8,500 Capital One Financial Corp............................................................. 379,312
------------
FOOD CHAINS (0.3%)
8,500 Safeway Inc.*.......................................................................... 383,562
------------
GENERIC DRUGS (2.4%)
20,800 Alpharma Inc. (Class A)................................................................ 1,294,800
30,290 Ivax Corp.*............................................................................ 1,257,035
7,500 Watson Pharmaceuticals, Inc.*.......................................................... 403,125
------------
2,954,960
------------
HOSPITAL/NURSING MANAGEMENT (0.2%)
8,100 HCA-The Healthcare Corp................................................................ 246,037
------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
INSURANCE BROKERS/SERVICES (0.9%)
11,100 Marsh & McLennan Companies, Inc........................................................ $ 1,159,256
------------
INTERNET SERVICES (2.1%)
7,600 Art Technology Group, Inc.*............................................................ 767,125
9,920 BEA Systems, Inc.*..................................................................... 489,800
10,140 BroadVision, Inc.*..................................................................... 514,605
3,450 VeriSign, Inc.*........................................................................ 608,278
3,300 Virage, Inc.*.......................................................................... 59,606
1,150 webMethods, Inc.*...................................................................... 180,766
------------
2,620,180
------------
INVESTMENT BANKERS/BROKERS/SERVICES (2.5%)
15,900 Lehman Brothers Holdings, Inc.......................................................... 1,503,544
13,000 Merrill Lynch & Co., Inc............................................................... 1,495,000
2,820 Schwab (Charles) Corp.................................................................. 94,823
------------
3,093,367
------------
MAJOR BANKS (1.4%)
20,000 Bank of New York Co., Inc.............................................................. 930,000
7,310 State Street Corp...................................................................... 775,317
------------
1,705,317
------------
MAJOR PHARMACEUTICALS (6.5%)
30,500 American Home Products Corp............................................................ 1,791,875
7,100 Aventis (ADR) (France)................................................................. 515,194
6,400 Johnson & Johnson...................................................................... 652,000
9,100 Lilly (Eli) & Co....................................................................... 908,863
65,825 Pfizer Inc............................................................................. 3,159,600
8,500 Pharmacia Corp......................................................................... 439,344
10,193 Smithkline Beecham PLC (ADR) (United Kingdom).......................................... 664,456
------------
8,131,332
------------
MANAGED HEALTH CARE (0.8%)
11,820 UnitedHealth Group Inc................................................................. 1,013,565
------------
MEDIA CONGLOMERATES (3.8%)
40,000 Disney (Walt) Co. (The)................................................................ 1,552,500
16,710 Fox Entertainment Group, Inc. (Series A)*.............................................. 507,566
13,600 News Corporation Ltd. (The) (ADR) (Australia).......................................... 741,200
28,000 Viacom, Inc. (Class B)*................................................................ 1,909,250
------------
4,710,516
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
81
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - AGGRESSIVE EQUITY
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
MEDICAL SPECIALTIES (2.7%)
10,520 ALZA Corp. (Class A)*.................................................................. $ 621,995
5,800 Bausch & Lomb, Inc..................................................................... 448,775
3,500 Beckman Coulter, Inc................................................................... 204,313
13,000 Cytyc Corp.*........................................................................... 693,063
4,000 Inhale Therapeutic Systems, Inc.*...................................................... 405,750
3,900 MiniMed, Inc.*......................................................................... 461,175
6,700 Novoste Corp.*......................................................................... 408,700
1,000 Qiagen N.V. (Netherlands)*............................................................. 173,000
------------
3,416,771
------------
MEDICAL/DENTAL DISTRIBUTORS (0.9%)
8,000 Andrx Corp.*........................................................................... 511,000
8,700 Cardinal Health, Inc................................................................... 643,800
------------
1,154,800
------------
METALS FABRICATIONS (0.3%)
15,200 Grant Predico, Inc.*................................................................... 380,000
------------
MID-SIZED BANKS (0.5%)
10,560 Northern Trust Corp.................................................................... 686,400
------------
MILITARY/GOV'T/TECHNICAL (0.3%)
4,250 General Motors Corp. (Class H)*........................................................ 372,938
------------
MULTI-LINE INSURANCE (3.0%)
23,500 American International Group, Inc...................................................... 2,761,250
4,700 AXA (ADR) (France)..................................................................... 373,944
10,710 Hartford Financial Services Group, Inc................................................. 599,091
------------
3,734,285
------------
OIL & GAS PRODUCTION (1.5%)
7,000 Anardarko Petroleum Corp............................................................... 345,188
10,200 Apache Corp............................................................................ 599,888
5,440 Devon Energy Corp...................................................................... 305,660
17,800 EOG Resources, Inc..................................................................... 596,300
------------
1,847,036
------------
OIL/GAS TRANSMISSION (0.9%)
8,700 Dynegy, Inc. (Class A)................................................................. 594,319
8,700 Enron Corp............................................................................. 561,150
------------
1,155,469
------------
OILFIELD SERVICES/EQUIPMENT (2.7%)
18,070 BJ Services Co.*....................................................................... 1,129,375
11,800 Cooper Cameron Corp.*.................................................................. 778,800
9,220 Schlumberger Ltd....................................................................... 688,043
5,410 Smith International, Inc.*............................................................. 393,916
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
10,400 Weatherford International, Inc.*....................................................... $ 414,050
------------
3,404,184
------------
OTHER PHARMACEUTICALS (3.8%)
8,500 Allergan, Inc.......................................................................... 633,250
7,330 Celgene Corp.*......................................................................... 431,554
5,500 Elan Corp. PLC (ADR) (Ireland)*........................................................ 266,406
6,280 Forest Laboratories, Inc.*............................................................. 634,280
10,500 Sepracor, Inc.*........................................................................ 1,265,906
27,000 Teva Pharmaceutical Industries Ltd. (ADR) (Israel)..................................... 1,496,813
------------
4,728,209
------------
OTHER TELECOMMUNICATIONS (0.0%)
1,240 NEXTLINK Communications, Inc. (Class A)*............................................... 47,043
------------
PACKAGE GOODS/COSMETICS (0.6%)
17,480 Avon Products, Inc..................................................................... 777,860
------------
PACKAGED FOODS (0.5%)
8,300 Quaker Oats Company (The).............................................................. 623,538
------------
PRECISION INSTRUMENTS (0.0%)
270 Waters Corp.*.......................................................................... 33,699
------------
PROPERTY - CASUALTY INSURERS (0.3%)
13,500 ACE, Ltd. (Bermuda).................................................................... 378,000
------------
RECREATIONAL PRODUCTS/TOYS (0.1%)
11,200 Callaway Golf Co....................................................................... 182,700
------------
SEMICONDUCTORS (9.7%)
5,700 Advanced Micro Devices, Inc.*.......................................................... 440,325
7,340 Broadcom Corp. (Class A)*.............................................................. 1,607,001
23,000 Intel Corp............................................................................. 3,073,375
43,500 Micron Technology, Inc.*............................................................... 3,830,719
6,000 SDL, Inc.*............................................................................. 1,711,125
6,600 STMicroelectronics NV (France)......................................................... 423,638
7,050 Texas Instruments, Inc................................................................. 484,247
6,690 Xilinx, Inc.*.......................................................................... 552,343
------------
12,122,773
------------
SPECIALTY FOODS/CANDY (0.2%)
6,300 Keebler Foods Co....................................................................... 233,888
------------
TELECOMMUNICATION EQUIPMENT (6.3%)
1,300 Accelerated Networks, Inc.*............................................................ 54,763
1,400 American Tower Corp. (Class A)......................................................... 58,363
10,000 CIENA Corp.*........................................................................... 1,666,250
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
82
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - AGGRESSIVE EQUITY
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
8,160 Comverse Technology, Inc.*............................................................. $ 758,880
8,800 Corning Inc............................................................................ 2,374,900
2,500 New Focus, Inc.*....................................................................... 205,313
14,900 Nortel Networks Corp. (Canada)......................................................... 1,016,925
3,000 ONI Systems Corp.*..................................................................... 351,563
15,600 Scientific-Atlanta, Inc................................................................ 1,162,200
2,100 Sycamore Networks, Inc.*............................................................... 231,788
------------
7,880,945
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $100,767,786)......................................................... 117,198,436
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS
---------
<C> <S> <C>
SHORT-TERM INVESTMENT (A) (10.5%)
U.S. GOVERNMENT AGENCY
$13,100 Federal Home Loan Banks 6.57% due 07/03/00 (AMORTIZED COST $13,095,218)................ 13,095,218
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $113,863,004) (B)........................................................ 104.3% 130,293,654
LIABILITIES IN EXCESS OF OTHER ASSETS..................................................... (4.3) (5,365,491)
----- -------------
NET ASSETS................................................................................ 100.0% $ 124,928,163
----- -------------
----- -------------
</TABLE>
---------------------
ADR American Depository Receipt.
* Non-income producing security.
(a) Purchased on a discount basis. The interest rate shown has been adjusted to
reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $17,542,482 and the
aggregate gross unrealized depreciation is $1,111,832, resulting in net
unrealized appreciation of $16,430,650.
SEE NOTES TO FINANCIAL STATEMENTS
83
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - STRATEGIST
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (55.4%)
AEROSPACE (0.3%)
83,000 Lockheed Martin Corp................................................................. $ 2,059,437
------------
AUTO PARTS: O.E.M. (0.6%)
300,000 Delphi Automotive Systems Corp....................................................... 4,368,750
13,093 Visteon Corp.*....................................................................... 158,757
------------
4,527,507
------------
BEVERAGES - NON-ALCOHOLIC (0.2%)
34,000 PepsiCo, Inc......................................................................... 1,510,875
------------
BIOTECHNOLOGY (1.8%)
36,000 COR Therapeutics, Inc.*.............................................................. 3,069,000
70,000 Gene Logic, Inc.*.................................................................... 2,498,125
30,000 Human Genome Sciences, Inc.*......................................................... 3,999,375
15,000 PE Corporation-Celera Genomics Group*................................................ 1,402,500
16,000 QLT PhotoTherapeutics Inc. (Canada)*................................................. 1,242,000
15,600 Trimeris, Inc.*...................................................................... 1,091,025
------------
13,302,025
------------
CABLE TELEVISION (1.2%)
80,000 EchoStar Communications Corp. (Class A)*............................................. 2,650,000
94,300 MediaOne Group, Inc.*................................................................ 6,253,387
------------
8,903,387
------------
CELLULAR TELEPHONE (0.1%)
16,000 Vodafone AirTouch PLC (ADR) (United Kingdom)......................................... 663,000
------------
CLOTHING/SHOE/ACCESSORY STORES (1.2%)
192,825 Gap, Inc. (The)...................................................................... 6,025,781
50,000 Payless ShoeSource, Inc.*............................................................ 2,562,500
------------
8,588,281
------------
COMPUTER COMMUNICATIONS (1.8%)
211,000 Cisco Systems, Inc.*................................................................. 13,411,687
------------
COMPUTER SOFTWARE (0.9%)
78,500 Microsoft Corp.*..................................................................... 6,275,094
------------
CONTRACT DRILLING (1.6%)
169,000 Diamond Offshore Drilling, Inc....................................................... 5,936,125
100,000 Transocean Sedco Forex Inc........................................................... 5,343,750
------------
11,279,875
------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
DISCOUNT CHAINS (0.8%)
169,000 Costco Wholesale Corp.*.............................................................. $ 5,577,000
------------
DIVERSIFIED ELECTRONIC PRODUCTS (0.6%)
35,000 JDS Uniphase Corp.*.................................................................. 4,193,437
------------
DIVERSIFIED FINANCIAL SERVICES (3.2%)
145,200 American Express Co.................................................................. 7,568,550
210,600 AXA Financial, Inc................................................................... 7,160,400
141,200 Citigroup, Inc....................................................................... 8,507,300
------------
23,236,250
------------
E.D.P. PERIPHERALS (2.3%)
221,600 EMC Corp.*........................................................................... 17,049,350
------------
ELECTRONIC COMPONENTS (2.2%)
321,400 Jabil Circuit, Inc.*................................................................. 15,949,475
------------
ELECTRONIC DATA PROCESSING (1.5%)
300,000 Micron Electronics, Inc.*............................................................ 3,750,000
76,200 Sun Microsystems, Inc.*.............................................................. 6,929,437
------------
10,679,437
------------
ELECTRONIC PRODUCTION EQUIPMENT (0.9%)
65,000 KLA-Tencor Corp.*.................................................................... 3,806,562
50,000 Novellus Systems, Inc.*.............................................................. 2,828,125
------------
6,634,687
------------
INTEGRATED OIL COMPANIES (0.5%)
55,000 Royal Dutch Petroleum Co. (ADR) (Netherlands)........................................ 3,385,937
------------
INTERNET SERVICES (2.1%)
135,800 America Online, Inc.*................................................................ 7,163,450
65,000 BroadVision, Inc.*................................................................... 3,298,750
45,000 Digital Island, Inc.*................................................................ 2,185,313
21,000 Inktomi Corp.*....................................................................... 2,483,250
------------
15,130,763
------------
INVESTMENT BANKERS/BROKERS/SERVICES (1.3%)
83,800 Merrill Lynch & Co., Inc............................................................. 9,637,000
------------
MAJOR BANKS (2.6%)
119,250 Chase Manhattan Corp. (The).......................................................... 5,492,953
197,500 Mellon Financial Corp................................................................ 7,196,406
159,700 Wells Fargo & Co..................................................................... 6,188,375
------------
18,877,734
------------
MAJOR PHARMACEUTICALS (4.9%)
121,437 Johnson & Johnson.................................................................... 12,371,394
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
84
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - STRATEGIST
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
101,200 Merck & Co., Inc..................................................................... $ 7,754,450
315,200 Pfizer Inc........................................................................... 15,129,600
------------
35,255,444
------------
MAJOR U.S. TELECOMMUNICATIONS (0.6%)
136,100 AT&T Corp............................................................................ 4,304,163
------------
MANAGED HEALTH CARE (0.5%)
43,000 UnitedHealth Group Inc............................................................... 3,687,250
------------
MEDIA CONGLOMERATES (1.8%)
341,500 Disney (Walt) Co. (The).............................................................. 13,254,469
------------
MEDICAL SPECIALTIES (3.1%)
60,000 Baxter International, Inc............................................................ 4,218,750
280,000 PE Corporation-PE Biosystems Group................................................... 18,445,000
------------
22,663,750
------------
MILITARY/GOV'T/TECHNICAL (0.7%)
20,000 General Dynamics Corp................................................................ 1,045,000
24,000 General Motors Corp. (Class H)*...................................................... 2,106,000
89,000 Raytheon Co. (Class B)*.............................................................. 1,713,250
------------
4,864,250
------------
MOTOR VEHICLES (0.6%)
100,000 Ford Motor Co........................................................................ 4,300,000
------------
MULTI-LINE INSURANCE (1.7%)
200,000 Allstate Corp........................................................................ 4,450,000
70,000 American International Group, Inc.................................................... 8,225,000
------------
12,675,000
------------
MULTI-SECTOR COMPANIES (1.3%)
177,600 General Electric Co.................................................................. 9,412,800
------------
OIL & GAS PRODUCTION (0.9%)
114,000 Kerr-McGee Corp...................................................................... 6,718,875
------------
OILFIELD SERVICES/EQUIPMENT (1.5%)
11,500 Schlumberger Ltd..................................................................... 858,188
136,000 Smith International, Inc.*........................................................... 9,902,500
------------
10,760,688
------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
OTHER SPECIALTY STORES (1.1%)
219,800 Bed Bath & Beyond Inc.*.............................................................. $ 7,954,013
------------
PACKAGED FOODS (0.8%)
158,800 General Mills, Inc................................................................... 6,074,100
------------
PRECIOUS METALS (1.5%)
251,000 Barrick Gold Corp. (Canada).......................................................... 4,565,063
150,000 Newmont Mining Corp.................................................................. 3,243,750
293,000 Placer Dome Inc. (Canada)............................................................ 2,801,813
------------
10,610,626
------------
PRECISION INSTRUMENTS (0.1%)
10,000 Agilent Technologies, Inc.*.......................................................... 737,500
------------
PROPERTY - CASUALTY INSURERS (0.4%)
100,000 ACE, Ltd. (Bermuda).................................................................. 2,800,000
------------
SAVINGS & LOAN ASSOCIATIONS (1.1%)
203,700 Golden West Financial Corp........................................................... 8,313,506
------------
SEMICONDUCTORS (3.2%)
50,000 Advanced Micro Devices, Inc.*........................................................ 3,862,500
30,000 Altera Corp.*........................................................................ 3,056,250
65,000 Cypress Semiconductor Corp.*......................................................... 2,746,250
84,600 Intel Corp........................................................................... 11,304,675
22,000 Micron Technology, Inc.*............................................................. 1,937,375
------------
22,907,050
------------
TELECOMMUNICATION EQUIPMENT (1.9%)
17,000 Corning Inc.......................................................................... 4,587,875
103,500 Motorola, Inc........................................................................ 3,007,969
15,600 Nortel Networks Corp. (Canada)....................................................... 1,064,700
20,000 Scientific - Atlanta, Inc............................................................ 1,490,000
31,000 Sycamore Networks, Inc.*............................................................. 3,421,625
------------
13,572,169
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $269,928,090)....................................................... 401,737,891
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
85
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - STRATEGIST
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
--------------------------------------------------------------------------------------------------------
<C> <S> <C>
CORPORATE BONDS (9.4%)
CABLE TELEVISION (0.4%)
$ 1,000 British Sky Broadcasting Group PLC (United Kingdom)
8.20% due 07/15/09......................................................... $ 940,870
1,006 Continental Cablevision Inc.
8.50%% due 09/15/01........................................................ 1,017,267
1,000 Liberty Media Group
8.25% due 02/01/30......................................................... 920,000
------------
2,878,137
------------
DEPARTMENT STORES (0.3%)
1,000 Federated Department Stores, Inc.
8.50% due 06/01/10......................................................... 1,018,160
1,000 Saks, Inc.
7.00% due 07/15/04......................................................... 897,260
------------
1,915,420
------------
DIVERSIFIED FINANCIAL SERVICES (0.1%)
1,000 Textron Financial Corp.
7.125% due 12/09/04........................................................ 980,810
------------
ELECTRIC UTILITIES (0.8%)
1,000 Alabama Power Co.
7.85% due 05/15/03......................................................... 1,005,860
1,000 Commonwealth Edison Co.
8.375% due 09/15/22........................................................ 982,660
1,000 Connecticut Light & Power Co.
7.75% due 06/01/02......................................................... 1,004,400
1,000 Duke Capital Corp.
7.50% due 10/01/09......................................................... 985,030
1,000 South Carolina Electric & Gas Co.
7.50% due 06/15/05......................................................... 1,000,780
1,000 Texas Utilities Electric Co.
8.125% due 02/01/02........................................................ 1,006,320
------------
5,985,050
------------
FINANCE COMPANIES (1.0%)
1,000 Ford Motor Credit Corp.
5.80% due 01/12/09......................................................... 872,860
1,000 Ford Motor Credit Corp.
6.125% due 01/09/06........................................................ 928,960
1,000 Ford Motor Credit Corp.
7.375% due 10/28/09........................................................ 967,150
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
--------------------------------------------------------------------------------------------------------
<C> <S> <C>
$ 2,000 General Motors Acceptance Corp.
7.625% due 06/15/04........................................................ $ 2,004,300
1,000 Household Finance Corp.
8.00% due 05/09/05......................................................... 1,007,020
1,500 Norwest Financial, Inc.
6.375% due 07/16/02........................................................ 1,471,890
------------
7,252,180
------------
INTEGRATED OIL COMPANIES (0.3%)
1,000 BP Amoco PLC
5.90% due 04/15/09......................................................... 909,290
1,000 Conoco Inc.
6.95% due 04/15/29......................................................... 910,470
------------
1,819,760
------------
INVESTMENT BANKERS/BROKERS/
SERVICES (0.8%)
2,000 KFW International Finance Co.
7.125% due 02/15/05........................................................ 2,010,400
1,000 Paine Webber Group, Inc.
6.45% due 12/01/03......................................................... 951,110
2,000 Paine Webber Group, Inc.
6.55% due 04/15/08......................................................... 1,783,440
1,000 Paine Webber Group, Inc.
8.875% due 03/15/05........................................................ 1,028,430
------------
5,773,380
------------
LIFE INSURANCE (0.1%)
1,000 Prudential Insurance
Co. - 144A**
6.375% due 07/23/06........................................................ 924,090
------------
MAJOR BANKS (1.0%)
1,500 BankBoston National
7.00% due 09/15/07......................................................... 1,419,150
1,000 First Union National Bank
5.80% due 12/01/08......................................................... 861,830
1,000 First Union National Bank
7.875% due 02/15/10........................................................ 985,230
1,450 Mellon Bank N.A.
7.00% due 03/15/06......................................................... 1,400,134
1,000 Norwest Financial, Inc.
7.60% due 05/03/05......................................................... 1,001,480
1,500 U.S. Bancorp
6.75% due 10/15/05......................................................... 1,433,070
------------
7,100,894
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
86
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - STRATEGIST
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
--------------------------------------------------------------------------------------------------------
<C> <S> <C>
MAJOR PHARMACEUTICALS (0.2%)
$ 1,000 Abbott Laboratories
6.40% due 12/01/06......................................................... $ 961,790
1,000 Johnson & Johnson
6.95% due 09/01/29......................................................... 960,350
------------
1,922,140
------------
MAJOR U.S. TELECOMMUNICATIONS (0.3%)
1,000 Sprint Capital Corp.
7.625% due 06/10/02........................................................ 1,000,150
1,000 Worldcom, Inc.
8.00% due 05/15/06......................................................... 1,014,050
------------
2,014,200
------------
MEDIA CONGLOMERATES (0.5%)
1,900 Paramount Communications, Inc.
7.50% due 01/15/02......................................................... 1,899,791
1,000 Time Warner Entertainment Co.
8.375% due 03/15/23........................................................ 1,020,970
1,000 Time Warner Inc.
8.18% due 08/15/07......................................................... 1,023,200
------------
3,943,961
------------
MID - SIZED BANKS (0.1%)
1,000 Compass Bank
8.10% due 08/15/09......................................................... 985,570
------------
MOTOR VEHICLES (0.3%)
1,000 DaimlerChrysler North American Holdings Co.
7.40% due 01/20/05......................................................... 995,070
1,000 DaimlerChrysler North American Holdings Co.
7.75% due 06/15/05......................................................... 1,008,860
------------
2,003,930
------------
MOVIES/ENTERTAINMENT (0.4%)
1,000 Seagram (Joseph E.) & Sons, Inc.
6.80% due 12/15/08......................................................... 943,230
2,030 Seagram (Joseph E.) & Sons, Inc.
8.875% due 09/15/11........................................................ 2,155,170
------------
3,098,400
------------
OIL REFINING/MARKETING (0.1%)
1,000 Tosco Corp.
8.125% due 02/15/30........................................................ 1,008,450
------------
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
--------------------------------------------------------------------------------------------------------
<C> <S> <C>
OIL/GAS TRANSMISSION (0.3%)
$ 1,000 Coastal Corp.
7.75% due 06/15/10......................................................... $ 989,940
1,000 El Paso Energy Corp.
6.75% due 05/15/09......................................................... 930,770
------------
1,920,710
------------
OTHER TELECOMMUNICATIONS (0.9%)
1,000 AT&T Canada Inc. (Canada)
7.65% due 09/15/06......................................................... 985,250
2,000 Deutsche Telekom International Finance Corp. (Netherlands)
8.25% due 06/15/30......................................................... 2,034,100
1,000 U.S. West Capital Funding, Inc.
6.50% due 11/15/18......................................................... 845,090
1,000 U.S. West Capital Funding, Inc.
6.875% due 08/15/01........................................................ 993,100
2,000 U.S. West Communications, Inc. - 144A**
7.625% due 06/09/03........................................................ 1,996,100
------------
6,853,640
------------
PACKAGE GOODS/COSMETICS (0.3%)
1,000 Proctor & Gamble Co.
6.45% due 01/15/26......................................................... 881,500
1,000 Proctor & Gamble Co.
6.60% due 12/15/04......................................................... 976,660
------------
1,858,160
------------
PROPERTY - CASUALTY INSURERS (0.1%)
1,000 Liberty Mutual Insurance Co. - 144A**
7.697% due 10/15/97........................................................ 730,140
------------
RAILROADS (0.5%)
1,847 Southern Pacific Transportation Co. (Series B)
7.28% due 04/30/15......................................................... 1,751,321
1,000 Union Pacific Corp.
6.34% due 11/25/03......................................................... 957,490
1,000 Union Pacific Corp.
6.625% due 02/01/08........................................................ 928,470
------------
3,637,281
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
87
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - STRATEGIST
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
--------------------------------------------------------------------------------------------------------
<C> <S> <C>
SAVINGS & LOAN ASSOCIATIONS (0.3%)
$ 1,000 Washington Mutual Financial Corp.
8.25% due 04/01/10......................................................... $ 991,460
1,000 Washington Mutual Financial Corp.
8.25% due 06/15/05......................................................... 1,005,510
------------
1,996,970
------------
UTILITIES (0.3%)
2,000 Arizona Public Service Co.
5.875% due 02/15/04........................................................ 1,893,340
------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $68,955,549)................................................ 68,496,613
------------
</TABLE>
<TABLE>
<CAPTION>
<C> <S> <C>
GOVERNMENT & AGENCY OBLIGATIONS (12.4%)
CANADIAN GOVERNMENT & AGENCIES (0.1%)
1,000 Manitoba (Province of)
5.50% due 10/01/08......................................................... 889,520
------------
U.S. GOVERNMENT AGENCIES & OBLIGATIONS (12.3%)
3,000 Federal Home Loan Banks
4.875% due 01/22/02........................................................ 2,909,400
4,000 Federal Home Loan Mortgage Corp.
5.125% due 10/15/08........................................................ 3,494,760
5,500 Federal Home Loan Mortgage Corp.
7.375% due 05/15/03........................................................ 5,554,835
4,000 Federal National Mortgage Assoc.
5.625% due 05/14/04........................................................ 3,810,520
2,000 Federal National Mortgage Assoc.
7.125% due 02/15/05........................................................ 2,008,020
2,000 Federal National Mortgage Corp.
7.25% due 05/15/30......................................................... 2,040,300
5,500 U.S. Treasury Bond
5.50% due 08/15/28......................................................... 5,042,620
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
--------------------------------------------------------------------------------------------------------
<C> <S> <C>
$ 2,500 U.S. Treasury Bond
6.00% due 02/15/26......................................................... $ 2,444,400
17,100 U.S. Treasury Bond
6.25% due 08/15/23......................................................... 17,203,626
10,000 U.S. Treasury Note
4.625% due 11/30/00........................................................ 9,932,800
5,000 U.S. Treasury Note
5.375% due 02/15/01........................................................ 4,967,950
8,500 U.S. Treasury Note
5.50% due 08/31/01......................................................... 8,408,115
1,000 U.S. Treasury Note
5.625% due 11/30/00........................................................ 997,270
7,000 U.S. Treasury Note
5.875% due 11/30/01........................................................ 6,945,400
600 U.S. Treasury Note
5.875% due 11/15/04........................................................ 591,420
1,500 U.S. Treasury Note
6.00% due 08/15/09......................................................... 1,488,045
2,000 U.S. Treasury Note
6.25% due 01/31/02......................................................... 1,993,800
1,000 U.S. Treasury Note
6.25% due 02/15/03......................................................... 996,930
1,000 U.S. Treasury Note
6.25% due 02/15/07......................................................... 1,001,280
1,000 U.S. Treasury Note
6.375% due 08/15/02........................................................ 999,500
1,000 U.S. Treasury Note
6.50% due 03/31/02......................................................... 1,001,010
1,000 U.S. Treasury Note
6.50% due 08/15/05......................................................... 1,010,390
2,000 U.S. Treasury Note
6.625% due 05/15/07........................................................ 2,043,200
1,000 U.S. Treasury Note
6.875% due 05/15/06........................................................ 1,029,440
1,000 U.S. Treasury Note
7.25% due 05/15/04......................................................... 1,031,390
------------
88,946,421
------------
TOTAL GOVERNMENT & AGENCY OBLIGATIONS
(IDENTIFIED COST $88,833,433)................................................ 89,835,941
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
88
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES - STRATEGIST
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENTS (A) (22.9%)
U.S. GOVERNMENT AGENCIES
$ 85,000 Federal Home Loan Banks 6.45% due 07/19/00........................................... $ 84,725,875
43,100 Federal Home Loan Banks 6.57% due 07/03/00........................................... 43,084,269
38,741 Federal National Mortgage Assoc. 6.42% due 07/13/00.................................. 38,658,094
------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $166,468,238)....................................................... 166,468,238
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $594,185,310) (B)........................................................ 100.1% 726,538,683
LIABILITIES IN EXCESS OF OTHER ASSETS..................................................... (0.1) (824,916)
----- -------------
NET ASSETS................................................................................ 100.0% $ 725,713,767
----- -------------
----- -------------
</TABLE>
---------------------
ADR American Depository Receipt.
* Non-income producing security.
** Resale is restricted to qualified institutional investors.
(a) Purchased on a discount basis. The interest rates shown have been adjusted
to reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $147,610,913 and the
aggregate gross unrealized depreciation is $15,257,540, resulting in net
unrealized appreciation of $132,353,373.
SEE NOTES TO FINANCIAL STATEMENTS
89
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL STATEMENTS
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY SHORT-TERM QUALITY HIGH
MARKET BOND INCOME PLUS YIELD
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities, at
value *..................... $387,502,037 $5,268,734 $408,256,516 $ 223,485,066
Cash.......................... 12,819 31,098 -- 280,500
Receivable for:
Investments sold.......... -- -- 1,063,010 648,889
Shares of beneficial
interest sold........... 985,730 174,059 288,074 178,339
Dividends................. -- -- -- --
Interest.................. 146,917 68,077 6,522,767 5,308,922
Foreign withholding taxes
reclaimed............... -- -- -- --
Prepaid expenses and other
assets...................... 994 1,762 965 2,147
------------ ---------- ------------ -------------
TOTAL ASSETS............. 388,648,497 5,543,730 416,131,332 229,903,863
------------ ---------- ------------ -------------
LIABILITIES:
Payable for:
Investments purchased..... -- -- 4,881,536 401,071
Shares of beneficial
interest repurchased.... 1,527,875 1,036 1,096,509 268,366
Plan of distribution fee
(Class Y)............... 86 2 10 38
Investment management
fee..................... 161,134 1,908 167,881 94,468
Payable to bank............... -- -- 855,674 --
Unrealized depreciation on
forward foreign currency
contracts................... -- -- -- --
Accrued expenses and other
payables.................... 38,302 13,166 47,050 39,814
------------ ---------- ------------ -------------
TOTAL LIABILITIES........ 1,727,397 16,112 7,048,660 803,757
------------ ---------- ------------ -------------
NET ASSETS:
Paid-in-capital............... 386,920,154 5,547,675 456,749,874 420,803,660
Accumulated undistributed net
investment income (loss).... 270 -- 39 320,365
Accumulated undistributed net
realized gain (loss)........ 676 (7,460) (35,685,863) (36,453,721)
Net unrealized appreciation
(depreciation).............. -- (12,597) (11,981,378) (155,570,198)
------------ ---------- ------------ -------------
NET ASSETS............... $386,921,100 $5,527,618 $409,082,672 $ 229,100,106
============ ========== ============ =============
*IDENTIFIED COST......... $387,502,037 $5,281,331 $420,237,894 $ 379,055,264
============ ========== ============ =============
CLASS X SHARES:
Net Assets.................... $386,118,522 $5,484,851 $408,943,678 $ 228,554,146
Shares Outstanding (UNLIMITED
AUTHORIZED SHARES OF $.01
PAR VALUE).................. 386,117,576 555,296 41,631,541 59,033,273
NET ASSET VALUE PER
SHARE................... $1.00 $9.88 $9.82 $3.87
============ ========== ============ =============
CLASS Y SHARES:
Net Assets.................... $802,578 $42,767 $138,994 $545,960
Shares Outstanding (UNLIMITED
AUTHORIZED SHARES OF $.01
PAR VALUE).................. 802,578 4,332 14,155 140,867
NET ASSET VALUE PER
SHARE................... $1.00 $9.87 $9.82 $3.88
============ ========== ============ =============
</TABLE>
------------------
** Includes foreign cash of $221,928.
SEE NOTES TO FINANCIAL STATEMENTS
90
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
GLOBAL
INCOME DIVIDEND CAPITAL DIVIDEND EUROPEAN
UTILITIES BUILDER GROWTH GROWTH GROWTH GROWTH
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments in securities, at
value *..................... $553,308,419 $65,383,679 $1,538,853,581 $188,364,112 $421,184,397 $591,798,418
Cash.......................... -- 69,428 63,223 52,836 299,762 877,465
Receivable for:
Investments sold.......... -- 25,823 7,509,261 4,436,500 1,274,347 1,577,485
Shares of beneficial
interest sold........... 249,807 572 6,594,884 113,369 69,686 229,648
Dividends................. 805,258 180,160 2,328,227 114,972 868,394 252,151
Interest.................. 924,918 319,239 -- -- 3,942 10,599
Foreign withholding taxes
reclaimed............... -- -- -- -- 451,536 897,003
Prepaid expenses and other
assets...................... 379 2,071 1,563 322 312 1,321
------------ ----------- -------------- ------------ ------------ ------------
TOTAL ASSETS............. 555,288,781 65,980,972 1,555,350,739 193,082,111 424,152,376 595,644,090
------------ ----------- -------------- ------------ ------------ ------------
LIABILITIES:
Payable for:
Investments purchased..... -- 198,269 6,139,920 1,001,010 565,067 13,792,757
Shares of beneficial
interest repurchased.... 421,229 47,965 7,705,019 184,558 402,280 318,149
Plan of distribution fee
(Class Y)............... 82 2 117 28 16 93
Investment management
fee..................... 300,025 41,541 704,581 102,435 266,790 458,419
Payable to bank............... -- -- -- -- -- --
Unrealized depreciation on
forward foreign currency
contracts................... -- -- -- -- 2,093 --
Accrued expenses and other
payables.................... 56,692 18,726 102,013 31,647 64,782 51,099
------------ ----------- -------------- ------------ ------------ ------------
TOTAL LIABILITIES........ 778,028 306,503 14,651,650 1,319,678 1,301,028 14,620,517
------------ ----------- -------------- ------------ ------------ ------------
NET ASSETS:
Paid-in-capital............... 318,637,560 70,898,574 1,860,822,576 150,197,879 401,824,892 404,859,563
Accumulated undistributed net
investment income (loss).... (1,887) 4 42 345,079 3,130,860 2,326,767
Accumulated undistributed net
realized gain (loss)........ 16,221,608 (1,851,882) (220,474,164) 19,844,616 (10,412,794) 46,948,372
Net unrealized appreciation
(depreciation).............. 219,653,472 (3,372,227) (99,649,365) 21,374,859 28,308,390 126,888,871
------------ ----------- -------------- ------------ ------------ ------------
NET ASSETS............... $554,510,753 $65,674,469 $1,540,699,089 $191,762,433 $422,851,348 $581,023,573
============ =========== ============== ============ ============ ============
*IDENTIFIED COST......... $333,654,947 $68,755,906 $1,638,502,946 $166,989,253 $392,872,983 $464,822,158
============ =========== ============== ============ ============ ============
CLASS X SHARES:
Net Assets.................... $553,545,947 $65,626,202 $1,539,113,517 $191,158,904 $422,622,372 $579,548,842
Shares Outstanding (UNLIMITED
AUTHORIZED SHARES OF $.01
PAR VALUE).................. 26,053,249 6,152,202 121,683,830 9,344,013 34,300,819 21,687,192
NET ASSET VALUE PER
SHARE................... $21.25 $10.67 $12.65 $20.46 $12.32 $26.72
============ =========== ============== ============ ============ ============
CLASS Y SHARES:
Net Assets.................... $964,806 $48,267 $1,585,572 $603,529 $228,976 $1,474,731
Shares Outstanding (UNLIMITED
AUTHORIZED SHARES OF $.01
PAR VALUE).................. 45,402 4,525 125,417 29,511 18,587 55,197
NET ASSET VALUE PER
SHARE................... $21.25 $10.67 $12.64 $20.45 $12.32 $26.72
============ =========== ============== ============ ============ ============
<CAPTION>
PACIFIC
GROWTH EQUITY
------------------------------ --------------------------------
<S> <C> <C>
ASSETS:
Investments in securities, at
value *..................... $104,023,811 $1,980,102,761
Cash.......................... 1,454,206** --
Receivable for:
Investments sold.......... 554,832 126,486,902
Shares of beneficial
interest sold........... 673,282 926,184
Dividends................. 106,513 470,987
Interest.................. 5,634 528
Foreign withholding taxes
reclaimed............... 15,985 11,356
Prepaid expenses and other
assets...................... 107 4,679
------------ --------------
TOTAL ASSETS............. 106,834,370 2,108,003,397
------------ --------------
LIABILITIES:
Payable for:
Investments purchased..... 67,900 92,470,827
Shares of beneficial
interest repurchased.... 53,791 1,360,779
Plan of distribution fee
(Class Y)............... 6 288
Investment management
fee..................... 81,688 796,143
Payable to bank............... -- 2,723
Unrealized depreciation on
forward foreign currency
contracts................... -- --
Accrued expenses and other
payables.................... 218,254 61,702
------------ --------------
TOTAL LIABILITIES........ 421,639 94,692,462
------------ --------------
NET ASSETS:
Paid-in-capital............... 126,154,140 1,534,556,243
Accumulated undistributed net
investment income (loss).... (1,100,566) (678)
Accumulated undistributed net
realized gain (loss)........ (39,150,750) 162,921,411
Net unrealized appreciation
(depreciation).............. 20,509,907 315,833,959
------------ --------------
NET ASSETS............... $106,412,731 $2,013,310,935
============ ==============
*IDENTIFIED COST......... $ 83,515,380 $1,664,268,802
============ ==============
CLASS X SHARES:
Net Assets.................... $106,353,837 $2,009,873,603
Shares Outstanding (UNLIMITED
AUTHORIZED SHARES OF $.01
PAR VALUE).................. 13,566,747 47,356,823
NET ASSET VALUE PER
SHARE................... $7.84 $42.44
============ ==============
CLASS Y SHARES:
Net Assets.................... $58,894 $3,437,332
Shares Outstanding (UNLIMITED
AUTHORIZED SHARES OF $.01
PAR VALUE).................. 7,507 80,996
NET ASSET VALUE PER
SHARE................... $7.84 $42.44
============ ==============
</TABLE>
91
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENTS OF ASSETS AND LIABILITIES, CONTINUED
JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
COMPETITIVE
EDGE AGGRESSIVE
S&P 500 INDEX "BEST IDEAS" EQUITY STRATEGIST
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities, at
value *..................... $228,639,075 $82,415,594 $130,293,654 $726,538,683
Cash.......................... 27,210 -- 27,000 98,586
Receivable for:
Investments sold.......... 21,107 -- 3,013,555 1,008,391
Shares of beneficial
interest sold........... 217,289 77,297 201,112 554,547
Dividends................. 167,587 20,829 20,599 198,589
Interest.................. -- 192 -- 2,645,266
Foreign withholding taxes
reclaimed............... -- 43,838 116 --
Variation margin.......... 50,500 -- -- --
Prepaid expenses and other
assets...................... 9,051 285 8,538 2,259
------------ ----------- ------------ ------------
TOTAL ASSETS............. 229,131,819 82,558,035 133,564,574 731,046,321
------------ ----------- ------------ ------------
LIABILITIES:
Payable for:
Investments purchased..... 957,607 -- 8,449,298 3,973,365
Shares of beneficial
interest repurchased.... 240,000 92,016 85,567 1,016,320
Plan of distribution fee
(Class Y)............... 113 34 83 128
Investment management
fee..................... 74,161 42,975 73,762 298,372
Accrued expenses and other
payables.................... 38,736 22,001 27,701 44,369
------------ ----------- ------------ ------------
TOTAL LIABILITIES........ 1,310,617 157,026 8,636,411 5,332,554
------------ ----------- ------------ ------------
NET ASSETS:
Paid-in-capital............... 203,324,838 71,893,826 121,091,047 567,462,696
Accumulated undistributed net
investment income........... 927,762 287,391 100,799 53,797
Accumulated undistributed net
realized gain (loss)........ 125,376 4,843,879 (12,694,333) 25,843,901
Net unrealized appreciation... 23,443,226 5,375,913 16,430,650 132,353,373
------------ ----------- ------------ ------------
NET ASSETS............... $227,821,202 $82,401,009 $124,928,163 $725,713,767
============ =========== ============ ============
*IDENTIFIED COST......... $205,048,756 $77,040,327 $113,863,004 $594,185,310
============ =========== ============ ============
CLASS X SHARES:
Net Assets.................... $226,163,222 $81,796,812 $123,649,875 $723,929,905
Shares Outstanding (UNLIMITED
AUTHORIZED SHARES OF $.01
PAR VALUE).................. 17,103,602 6,828,294 8,230,234 43,202,615
NET ASSET VALUE PER
SHARE................... $13.22 $11.98 $15.02 $16.76
============ =========== ============ ============
CLASS Y SHARES:
Net Assets.................... $1,657,980 $604,197 $1,278,288 $1,783,862
Shares Outstanding (UNLIMITED
AUTHORIZED SHARES OF $.01
PAR VALUE).................. 125,411 50,468 85,084 106,486
NET ASSET VALUE PER
SHARE................... $13.22 $11.97 $15.02 $16.75
============ =========== ============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
92
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000* (UNAUDITED)
<TABLE>
<CAPTION>
QUALITY
MONEY SHORT TERM INCOME HIGH
MARKET BOND PLUS YIELD
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET INVESTMENT INCOME:
INCOME
Interest...................... $12,332,683 $129,896 $15,950,013 $ 20,613,639
Dividends..................... -- -- -- --
----------- -------- ----------- ------------
TOTAL INCOME............. 12,332,683 129,896 15,950,013 20,613,639
----------- -------- ----------- ------------
EXPENSES
Investment management fee..... 1,007,817 9,792 1,058,673 632,227
Professional fees............. 14,124 10,416 13,260 15,601
Custodian fees................ 8,656 2,498 20,426 9,388
Shareholder reports and
notices..................... 7,365 98 15,321 22,672
Trustees' fees and expenses... 506 -- 539 373
Transfer agent fees and
expenses.................... 250 250 250 250
Plan of distribution fee
(Class Y shares)............ 86 2 10 38
Other......................... 1,309 649 3,677 4,739
----------- -------- ----------- ------------
TOTAL EXPENSES........... 1,040,113 23,705 1,112,156 685,288
Less: expense offset.......... -- (906) -- --
----------- -------- ----------- ------------
NET EXPENSES............. 1,040,113 22,799 1,112,156 685,288
----------- -------- ----------- ------------
NET INVESTMENT INCOME.... 11,292,570 107,097 14,837,857 19,928,351
----------- -------- ----------- ------------
NET REALIZED AND UNREALIZED
GAIN (LOSS):
Net realized gain (loss)...... 1,580 (4,533) (7,614,911) 3,041,247
Net change in unrealized
appreciation/depreciation... -- 4,449 6,013,672 (29,988,121)
----------- -------- ----------- ------------
NET GAIN (LOSS).......... 1,580 (84) (1,601,239) (26,946,874)
----------- -------- ----------- ------------
NET INCREASE (DECREASE)....... $11,294,150 $107,013 $13,236,618 $ (7,018,523)
=========== ======== =========== ============
</TABLE>
------------------
* Class Y shares were issued June 6, 2000.
SEE NOTES TO FINANCIAL STATEMENTS
93
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
FOR THE SIX MONTHS ENDED JUNE 30, 2000* (UNAUDITED)
<TABLE>
<CAPTION>
INCOME DIVIDEND CAPITAL
UTILITIES BUILDER GROWTH GROWTH
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET INVESTMENT INCOME:
INCOME
Interest...................... $ 2,254,534 $ 963,747 $ 1,102,073 $ 467,067
Dividends..................... 5,903,333** 1,114,357 22,224,857** 503,120**
------------ ----------- ------------- ------------
TOTAL INCOME............. 8,157,867 2,078,104 23,326,930 970,187
------------ ----------- ------------- ------------
EXPENSES
Investment management fee..... 1,830,150 264,133 4,478,858 599,353
Professional fees............. 14,196 11,177 14,191 14,260
Custodian fees................ 15,945 7,232 58,484 20,601
Shareholder reports and
notices..................... 32,102 3,902 46,123 4,995
Trustees' fees and expenses... 678 60 2,972 185
Transfer agent fees and
expenses.................... 250 250 250 250
Plan of distribution fee
(Class Y shares)............ 82 2 117 28
Other......................... 2,842 1,232 7,242 368
------------ ----------- ------------- ------------
TOTAL EXPENSES........... 1,896,245 287,988 4,608,237 640,040
------------ ----------- ------------- ------------
NET INVESTMENT INCOME.... 6,261,622 1,790,116 18,718,693 330,147
------------ ----------- ------------- ------------
NET REALIZED AND UNREALIZED
GAIN (LOSS):
Net realized gain (loss) on:
Investments............... 16,261,412 (1,008,142) (201,262,748) 21,023,875
Futures contracts......... -- -- -- --
Foreign exchange
transactions............ -- -- -- --
------------ ----------- ------------- ------------
NET GAIN (LOSS).......... 16,261,412 (1,008,142) (201,262,748) 21,023,875
------------ ----------- ------------- ------------
Net change in unrealized
appreciation/depreciation
on:
Investments............... (22,434,406) (4,207,609) 223,349 (15,780,992)
Futures contracts......... -- -- -- --
Translation of forward
foreign currency
contracts, other assets
and liabilities
denominated in foreign
currencies.............. -- -- -- --
------------ ----------- ------------- ------------
NET APPRECIATION
(DEPRECIATION)........... (22,434,406) (4,207,609) 223,349 (15,780,992)
------------ ----------- ------------- ------------
NET GAIN (LOSS).......... (6,172,994) (5,215,751) (201,039,399) 5,242,883
------------ ----------- ------------- ------------
NET INCREASE (DECREASE)....... $ 88,628 $(3,425,635) $(182,320,706) $ 5,573,030
============ =========== ============= ============
</TABLE>
------------------
* Class Y shares were issued June 6, 2000.
** Net of $73,549, $259,373, $2,414, $544,834, $716,157, $213,457, $134,523,
$6,207, $45,649, $1,997 and $6,491 foreign withholding tax, respectively.
SEE NOTES TO FINANCIAL STATEMENTS
94
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENTS OF OPERATIONS, CONTINUED
FOR THE SIX MONTHS ENDED JUNE 30, 2000* (UNAUDITED)
<TABLE>
<CAPTION>
GLOBAL COMPETITIVE
DIVIDEND EUROPEAN PACIFIC S&P 500 EDGE
GROWTH GROWTH GROWTH EQUITY INDEX "BEST IDEAS"
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME:
INCOME
Interest...................... $ 527,661 $ 506,656 $ 134,302 $ 5,779,476 $ 260,777 $ 158,730
Dividends..................... 6,280,221** 4,734,230** 501,470** 3,434,885** 1,127,743** 386,384**
------------ ------------ ----------- ------------- ----------- -----------
TOTAL INCOME............. 6,807,882 5,240,886 635,772 9,214,361 1,388,520 545,114
------------ ------------ ----------- ------------- ----------- -----------
EXPENSES
Investment management fee..... 1,666,389 2,759,499 541,421 5,145,737 411,369 237,644
Professional fees............. 16,787 17,157 18,819 16,764 8,075 8,768
Custodian fees................ 72,225 94,423 117,644 57,485 26,491 8,587
Shareholder reports and
notices..................... 19,071 18,187 6,060 27,292 2,391 870
Trustees' fees and expenses... 562 598 61 1,865 81 140
Transfer agent fees and
expenses.................... 250 250 250 250 250 250
Plan of distribution fee
(Class Y shares)............ 16 93 6 288 113 34
Other......................... 5,563 4,309 10,107 5,061 11,937 746
------------ ------------ ----------- ------------- ----------- -----------
TOTAL EXPENSES........... 1,780,863 2,894,516 694,368 5,254,742 460,707 257,039
------------ ------------ ----------- ------------- ----------- -----------
NET INVESTMENT INCOME.... 5,027,019 2,346,370 (58,596) 3,959,619 927,813 288,075
------------ ------------ ----------- ------------- ----------- -----------
NET REALIZED AND UNREALIZED
GAIN (LOSS):
Net realized gain (loss) on:
Investments............... (3,133,207) 46,959,999 4,918,879 185,449,701 (249,634) 6,348,574
Futures contracts......... -- -- -- -- 558,500 --
Foreign exchange
transactions............ 15,790 88,661 (39,180) -- -- (4,011)
------------ ------------ ----------- ------------- ----------- -----------
NET GAIN (LOSS).......... (3,117,417) 47,048,660 4,879,699 185,449,701 308,866 6,344,563
------------ ------------ ----------- ------------- ----------- -----------
Net change in unrealized
appreciation/depreciation
on:
Investments............... (31,350,058) (45,741,165) (9,870,934) (340,689,705) (1,103,372) (8,461,955)
Futures contracts......... -- -- -- -- (317,356) --
Translation of forward
foreign currency
contracts, other assets
and liabilities
denominated in foreign
currencies.............. 9,619 (56,057) 226,197 -- -- 1,447
------------ ------------ ----------- ------------- ----------- -----------
NET APPRECIATION
(DEPRECIATION)........... (31,340,439) (45,797,222) (9,644,737) (340,689,705) (1,420,728) (8,460,508)
------------ ------------ ----------- ------------- ----------- -----------
NET GAIN (LOSS).......... (34,457,856) 1,251,438 (4,765,038) (155,240,004) (1,111,862) (2,115,945)
------------ ------------ ----------- ------------- ----------- -----------
NET INCREASE (DECREASE)....... $(29,430,837) $ 3,597,808 $(4,823,634) $(151,280,385) $ (184,049) $(1,827,870)
============ ============ =========== ============= =========== ===========
<CAPTION>
AGGRESSIVE
EQUITY STRATEGIST
------------------------------ --------------------------------
<S> <C> <C>
NET INVESTMENT INCOME:
INCOME
Interest...................... $ 352,195 $ 9,225,616
Dividends..................... 134,676** 1,591,588**
------------ ------------
TOTAL INCOME............. 486,871 10,817,204
------------ ------------
EXPENSES
Investment management fee..... 345,380 1,814,334
Professional fees............. 11,879 15,186
Custodian fees................ 27,539 18,244
Shareholder reports and
notices..................... 836 18,876
Trustees' fees and expenses... 12 825
Transfer agent fees and
expenses.................... 250 250
Plan of distribution fee
(Class Y shares)............ 83 128
Other......................... 87 5,071
------------ ------------
TOTAL EXPENSES........... 386,066 1,872,914
------------ ------------
NET INVESTMENT INCOME.... 100,805 8,944,290
------------ ------------
NET REALIZED AND UNREALIZED
GAIN (LOSS):
Net realized gain (loss) on:
Investments............... (12,512,441) 34,738,023
Futures contracts......... -- --
Foreign exchange
transactions............ -- --
------------ ------------
NET GAIN (LOSS).......... (12,512,441) 34,738,023
------------ ------------
Net change in unrealized
appreciation/depreciation
on:
Investments............... 9,048,737 (38,093,209)
Futures contracts......... -- --
Translation of forward
foreign currency
contracts, other assets
and liabilities
denominated in foreign
currencies.............. -- --
------------ ------------
NET APPRECIATION
(DEPRECIATION)........... 9,048,737 (38,093,209)
------------ ------------
NET GAIN (LOSS).......... (3,463,704) (3,355,186)
------------ ------------
NET INCREASE (DECREASE)....... $ (3,362,899) $ 5,589,104
============ ============
</TABLE>
95
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MONEY MARKET SHORT TERM BOND
--------------------------------- -----------------------------------
FOR THE SIX FOR THE YEAR FOR YHE SIX FOR THE YEAR
MONTHS ENDED ENDED MONTHS ENDED ENDED
JUNE 30, 2000* DECEMBER 31, 1999 JUNE 30, 2000* DECEMBER 31, 1999**
------------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
OPERATIONS:
Net investment income......... $ 11,292,570 $ 20,402,046 $ 107,097 $ 57,933
Net realized gain (loss)...... 1,580 1,751 (4,533) (2,927)
Net change in unrealized
appreciation/depreciation... -- -- 4,449 (17,046)
------------ ------------ ---------- ----------
NET INCREASE
(DECREASE)............... 11,294,150 20,403,797 107,013 37,960
------------ ------------ ---------- ----------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class X shares............ (11,290,475) (20,401,879) (106,925) (57,933)
Class Y shares............ (2,014) -- (172) --
Net realized gain
Class X shares............ (904) (1,751) -- --
Class Y shares............ -- -- -- --
Paid-in-capital
Class X shares............ -- -- -- --
Class Y shares............ -- -- -- --
------------ ------------ ---------- ----------
TOTAL DIVIDENDS AND
DISTRIBUTIONS............ (11,293,393) (20,403,630) (107,097) (57,933)
------------ ------------ ---------- ----------
Net increase (decrease) from
transactions in shares of
beneficial interest......... (48,722,768) (6,391,540) 2,353,113 3,194,562
------------ ------------ ---------- ----------
TOTAL INCREASE
(DECREASE)............... (48,722,011) (6,391,373) 2,353,029 3,174,589
NET ASSETS:
Beginning of period........... 435,643,111 442,034,484 3,174,589 --
------------ ------------ ---------- ----------
END OF PERIOD............ $386,921,100 $435,643,111 $5,527,618 $3,174,589
============ ============ ========== ==========
UNDISTRIBUTED NET INVESTMENT
INCOME (LOSS)................. $ 270 $ 189 $ -- $ --
============ ============ ========== ==========
</TABLE>
------------------
* Class Y shares were issued June 6, 2000.
** For the period May 4, 1999 (commencement of operations) through
December 31, 1999.
SEE NOTES TO FINANCIAL STATEMENTS
96
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
QUALITY INCOME PLUS HIGH YIELD
--------------------------------- ---------------------------------
FOR THE SIX FOR THE YEAR FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED MONTHS ENDED ENDED
JUNE 30, 2000* DECEMBER 31, 1999 JUNE 30, 2000* DECEMBER 31, 1999
----------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
OPERATIONS:
Net investment income......... $ 14,837,857 $ 32,603,272 $ 19,928,351 $ 46,601,600
Net realized gain (loss)...... (7,614,911) (11,840,632) 3,041,247 (7,019,312)
Net change in unrealized
appreciation/depreciation... 6,013,672 (43,753,636) (29,988,121) (43,905,004)
------------ ------------ ------------ ------------
NET INCREASE
(DECREASE)............... 13,236,618 (22,990,996) (7,018,523) (4,322,716)
------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class X shares............ (14,884,377) (32,603,082) (19,622,039) (46,732,009)
Class Y shares............ (789) -- (7,294) --
Net realized gain
Class X shares............ -- -- -- --
Class Y shares............ -- -- -- --
Paid-in-capital
Class X shares............ -- -- -- --
Class Y shares............ -- -- -- --
------------ ------------ ------------ ------------
TOTAL DIVIDENDS AND
DISTRIBUTIONS............ (14,885,166) (32,603,082) (19,629,333) (46,732,009)
------------ ------------ ------------ ------------
Net increase (decrease) from
transactions in shares of
beneficial interest......... (45,400,631) (35,856,852) (23,935,510) (33,340,707)
------------ ------------ ------------ ------------
TOTAL INCREASE
(DECREASE)............... (47,049,179) (91,450,930) (50,583,366) (84,395,432)
NET ASSETS:
Beginning of period........... 456,131,851 547,582,781 279,683,472 364,078,904
------------ ------------ ------------ ------------
END OF PERIOD............ $409,082,672 $456,131,851 $229,100,106 $279,683,472
============ ============ ============ ============
UNDISTRIBUTED NET INVESTMENT
INCOME (LOSS)................. $ 39 $ 47,349 $ 320,365 $ 21,347
============ ============ ============ ============
<CAPTION>
UTILITIES INCOME BUILDER
--------------------------------- ---------------------------------
FOR THE SIX FOR THE YEAR FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED MONTHS ENDED ENDED
JUNE 30, 2000* DECEMBER 31, 1999 JUNE 30, 2000* DECEMBER 31, 1999
------------------------------ --------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
OPERATIONS:
Net investment income......... $ 6,261,622 $ 14,157,266 $ 1,790,116 $ 4,199,255
Net realized gain (loss)...... 16,261,412 33,719,313 (1,008,142) (99,594)
Net change in unrealized
appreciation/depreciation... (22,434,406) 19,868,085 (4,207,609) 1,427,366
------------ ------------ ----------- -----------
NET INCREASE
(DECREASE)............... 88,628 67,744,664 (3,425,635) 5,527,027
------------ ------------ ----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class X shares............ (6,258,060) (14,157,310) (1,897,377) (4,106,298)
Class Y shares............ (5,430) -- (606) --
Net realized gain
Class X shares............ (33,661,384) (11,183,423) -- (1,674,655)
Class Y shares............ (57,889) -- -- --
Paid-in-capital
Class X shares............ -- -- -- (120,208)
Class Y shares............ -- -- -- --
------------ ------------ ----------- -----------
TOTAL DIVIDENDS AND
DISTRIBUTIONS............ (39,982,763) (25,340,733) (1,897,983) (5,901,161)
------------ ------------ ----------- -----------
Net increase (decrease) from
transactions in shares of
beneficial interest......... 13,917,936 (22,719,812) (10,618,249) (5,778,664)
------------ ------------ ----------- -----------
TOTAL INCREASE
(DECREASE)............... (25,976,199) 19,684,119 (15,941,867) (6,152,798)
NET ASSETS:
Beginning of period........... 580,486,952 560,802,833 81,616,336 87,769,134
------------ ------------ ----------- -----------
END OF PERIOD............ $554,510,753 $580,486,952 $65,674,469 $81,616,336
============ ============ =========== ===========
UNDISTRIBUTED NET INVESTMENT
INCOME (LOSS)................. $ (1,887) $ (19) $ 4 $ 107,871
============ ============ =========== ===========
</TABLE>
97
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENTS OF CHANGES IN NET ASSETS, CONTINUED
<TABLE>
<CAPTION>
DIVIDEND GROWTH CAPITAL GROWTH
--------------------------------- ---------------------------------
FOR THE SIX FOR THE YEAR FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED MONTHS ENDED ENDED
JUNE 30, 2000* DECEMBER 31, 1999 JUNE 30, 2000* DECEMBER 31, 1999
----------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
OPERATIONS:
Net investment income
(loss)...................... $ 18,718,693 $ 41,593,941 $ 330,147 $ 31,551
Net realized gain (loss)...... (201,262,748) 346,534,889 21,023,875 34,213,226
Net change in unrealized
appreciation/depreciation... 223,349 (441,379,064) (15,780,992) 8,664,948
-------------- -------------- ------------ ------------
NET INCREASE
(DECREASE)............... (182,320,706) (53,250,234) 5,573,030 42,909,725
-------------- -------------- ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class X shares............ (18,709,696) (41,593,983) (16,143) --
Class Y shares............ (9,067) -- (51) --
Net realized gain
Class X shares............ (355,389,431) (329,147,530) (31,601,360) (17,791,828)
Class Y shares............ (366,002) -- (99,741) --
-------------- -------------- ------------ ------------
TOTAL DIVIDENDS AND
DISTRIBUTIONS............ (374,474,196) (370,741,513) (31,717,295) (17,791,828)
-------------- -------------- ------------ ------------
Net increase (decrease) from
transactions in shares of
beneficial interest......... 63,680,064 207,878,895 46,655,282 7,530,409
-------------- -------------- ------------ ------------
TOTAL INCREASE
(DECREASE)............... (493,114,838) (216,112,852) 20,511,017 32,648,306
NET ASSETS:
Beginning of period........... 2,033,813,927 2,249,926,779 171,251,416 138,603,110
-------------- -------------- ------------ ------------
END OF PERIOD............ $1,540,699,089 $2,033,813,927 $191,762,433 $171,251,416
============== ============== ============ ============
UNDISTRIBUTED NET INVESTMENT
INCOME (LOSS)................. $ 42 $ 112 $ 345,079 $ 31,127
============== ============== ============ ============
</TABLE>
------------------
* Class Y shares were issued June 6, 2000.
SEE NOTES TO FINANCIAL STATEMENTS
98
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
GLOBAL DIVIDEND GROWTH EUROPEAN GROWTH
--------------------------------- ---------------------------------
FOR THE SIX FOR THE YEAR FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED MONTHS ENDED ENDED
JUNE 30, 2000* DECEMBER 31, 1999 JUNE 30, 2000* DECEMBER 31, 1999
----------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
OPERATIONS:
Net investment income
(loss)...................... $ 5,027,019 $ 9,301,972 $ 2,346,370 $ 4,356,655
Net realized gain (loss)...... (3,117,417) 42,434,603 47,048,660 89,014,598
Net change in unrealized
appreciation/depreciation... (31,340,439) 14,999,600 (45,797,222) 39,368,603
------------ ------------ ------------ ------------
NET INCREASE
(DECREASE)............... (29,430,837) 66,736,175 3,597,808 132,739,856
------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class X shares............ (2,796,202) (9,852,158) (3,290,821) (3,407,759)
Class Y shares............ -- -- (8,172) --
Net realized gain
Class X shares............ (38,145,171) (35,181,150) (84,881,334) (47,147,183)
Class Y shares............ (20,655) -- (210,786) --
------------ ------------ ------------ ------------
TOTAL DIVIDENDS AND
DISTRIBUTIONS............ (40,962,028) (45,033,308) (88,391,113) (50,554,942)
------------ ------------ ------------ ------------
Net increase (decrease) from
transactions in shares of
beneficial interest......... (13,685,277) 999,059 86,112,111 (13,117,744)
------------ ------------ ------------ ------------
TOTAL INCREASE
(DECREASE)............... (84,078,142) 22,701,926 1,318,806 69,067,170
NET ASSETS:
Beginning of period........... 506,929,490 484,227,564 579,704,767 510,637,597
------------ ------------ ------------ ------------
END OF PERIOD............ $422,851,348 $506,929,490 $581,023,573 $579,704,767
============ ============ ============ ============
UNDISTRIBUTED NET INVESTMENT
INCOME (LOSS)................. $ 3,130,860 $ 900,043 $ 2,326,767 $ 3,279,390
============ ============ ============ ============
<CAPTION>
PACIFIC GROWTH
---------------------------------
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
JUNE 30, 2000* DECEMBER 31, 1999
------------------------------ ---------------------------------
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
OPERATIONS:
Net investment income
(loss)...................... $ (58,596) $ 673,927
Net realized gain (loss)...... 4,879,699 15,775,724
Net change in unrealized
appreciation/depreciation... (9,644,737) 28,380,099
------------ ------------
NET INCREASE
(DECREASE)............... (4,823,634) 44,829,750
------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class X shares............ (1,544,980) (770,896)
Class Y shares............ (892) --
Net realized gain
Class X shares............ -- --
Class Y shares............ -- --
------------ ------------
TOTAL DIVIDENDS AND
DISTRIBUTIONS............ (770,896) (770,896)
------------ ------------
Net increase (decrease) from
transactions in shares of
beneficial interest......... (3,145,147) 19,026,993
------------ ------------
TOTAL INCREASE
(DECREASE)............... (9,514,653) 63,085,847
NET ASSETS:
Beginning of period........... 115,927,384 52,841,537
------------ ------------
END OF PERIOD............ $106,412,731 $115,927,384
============ ============
UNDISTRIBUTED NET INVESTMENT
INCOME (LOSS)................. $ (1,100,566) $ 503,902
============ ============
</TABLE>
99
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENTS OF CHANGES IN NET ASSETS, CONTINUED
<TABLE>
<CAPTION>
EQUITY S&P 500 INDEX
--------------------------------- ---------------------------------
FOR THE SIX FOR THE YEAR FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED MONTHS ENDED ENDED
JUNE 30, 2000* DECEMBER 31, 1999 JUNE 30, 2000* DECEMBER 31, 1999
----------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
OPERATIONS:
Net investment income......... $ 3,959,619 $ 7,884,930 $ 927,813 $ 1,179,912
Net realized gain (loss)...... 185,449,701 301,936,226 308,866 977,294
Net change in unrealized
appreciation/depreciation... (340,689,705) 429,853,712 (1,420,728) 20,690,042
-------------- -------------- ------------ ------------
NET INCREASE
(DECREASE)............... (151,280,385) 739,674,868 (184,049) 22,847,248
-------------- -------------- ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class X shares............ (3,954,587) (7,879,428) (1,171,433) (244,996)
Class Y shares............ (5,712) -- (8,524) --
Net realized gain
Class X shares............ (309,799,756) (168,434,937) (1,055,968) (283,184)
Class Y shares............ (519,733) -- (7,684) --
-------------- -------------- ------------ ------------
TOTAL DIVIDENDS AND
DISTRIBUTIONS............ (314,279,788) (176,314,365) (2,243,609) (528,180)
-------------- -------------- ------------ ------------
Net increase from transactions
in shares of beneficial
interest.................... 395,799,723 381,298,159 44,286,040 114,911,784
-------------- -------------- ------------ ------------
TOTAL INCREASE
(DECREASE)............... (69,760,450) 944,658,662 41,858,382 137,230,852
NET ASSETS:
Beginning of period........... 2,083,071,385 1,138,412,723 185,962,820 48,731,968
-------------- -------------- ------------ ------------
END OF PERIOD............ $2,013,310,935 $2,083,071,385 $227,821,202 $185,962,820
============== ============== ============ ============
UNDISTRIBUTED NET INVESTMENT
INCOME (LOSS)................. $ (678) $ 2 $ 927,762 $ 1,179,906
============== ============== ============ ============
</TABLE>
------------------
* Class Y shares were issued June 6, 2000.
** For the period May 4, 1999 (commencement of operations) through
December 31, 1999.
SEE NOTES TO FINANCIAL STATEMENTS
100
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
COMPETITIVE EDGE "BEST IDEAS" AGGRESSIVE EQUITY STRATEGIST
--------------------------------- ----------------------------------- --------------
FOR THE SIX FOR THE YEAR FOR THE SIX FOR THE YEAR FOR THE SIX
MONTHS ENDED ENDED MONTHS ENDED ENDED MONTHS ENDED
JUNE 30, 2000* DECEMBER 31, 1999 JUNE 30, 2000* DECEMBER 31, 1999** JUNE 30, 2000*
----------------------------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
OPERATIONS:
Net investment income......... $ 288,075 $ 318,798 $ 100,805 $ 57,983 $ 8,944,290
Net realized gain (loss)...... 6,344,563 (231,782) (12,512,441) (181,892) 34,738,023
Net change in unrealized
appreciation/depreciation... (8,460,508) 11,840,897 9,048,737 7,381,913 (38,093,209)
----------- ----------- ------------ ----------- ------------
NET INCREASE
(DECREASE)............... (1,827,870) 11,927,913 (3,362,899) 7,258,004 5,589,104
----------- ----------- ------------ ----------- ------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class X shares............ (314,559) (267,149) (49,395) (8,097) (8,878,667)
Class Y shares............ (2,328) -- (497) -- (11,862)
Net realized gain
Class X shares............ -- -- -- -- (85,486,980)
Class Y shares............ -- -- -- -- (209,745)
----------- ----------- ------------ ----------- ------------
TOTAL DIVIDENDS AND
DISTRIBUTIONS............ (316,887) (267,149) (49,892) (8,097) (94,587,254)
----------- ----------- ------------ ----------- ------------
Net increase from transactions
in shares of beneficial
interest.................... 22,250,964 14,095,258 90,143,578 30,947,469 85,011,241
----------- ----------- ------------ ----------- ------------
TOTAL INCREASE
(DECREASE)............... 20,106,207 25,756,022 86,730,787 38,197,376 (3,986,909)
NET ASSETS:
Beginning of period........... 62,294,802 36,538,780 38,197,376 -- 729,700,676
----------- ----------- ------------ ----------- ------------
END OF PERIOD............ $82,401,009 $62,294,802 $124,928,163 $38,197,376 $725,713,767
=========== =========== ============ =========== ============
UNDISTRIBUTED NET INVESTMENT
INCOME (LOSS)................. $ 287,391 $ 316,203 $ 100,799 $ 49,886 $ 53,797
=========== =========== ============ =========== ============
<CAPTION>
STRATEGIST
-----------------
FOR THE YEAR
ENDED
DECEMBER 31, 1999
------------------------------ -----------------
<S> <C>
INCREASE (DECREASE) IN NET
ASSETS:
OPERATIONS:
Net investment income......... $ 15,227,196
Net realized gain (loss)...... 83,843,891
Net change in unrealized
appreciation/depreciation... 10,097,511
------------
NET INCREASE
(DECREASE)............... 109,168,598
------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class X shares............ (15,227,618)
Class Y shares............ --
Net realized gain
Class X shares............ --
Class Y shares............ --
------------
TOTAL DIVIDENDS AND
DISTRIBUTIONS............ (15,227,618)
------------
Net increase from transactions
in shares of beneficial
interest.................... 1,825,416
------------
TOTAL INCREASE
(DECREASE)............... 95,766,396
NET ASSETS:
Beginning of period........... 633,934,280
------------
END OF PERIOD............ $729,700,676
============
UNDISTRIBUTED NET INVESTMENT
INCOME (LOSS)................. $ 36
============
</TABLE>
101
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENTS OF CHANGES IN NET ASSETS, CONTINUED
SUMMARY OF TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
<TABLE>
<CAPTION>
MONEY MARKET SHORT TERM BOND
-------------------------------- ----------------------------------
FOR THE SIX FOR THE YEAR FOR YHE SIX FOR THE YEAR
MONTHS ENDED ENDED MONTHS ENDED ENDED
JUNE 30, 2000 DECEMBER 31, 1999 JUNE 30, 2000 DECEMBER 31, 1999**
----------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
CLASS X SHARES
SHARES
Sold.......................... 484,053,373 560,245,244 473,994 564,039
Reinvestment of dividends and
distributions............... 11,291,379 20,403,630 10,842 5,845
Redeemed...................... (544,870,098) (587,040,414) (250,867) (248,557)
------------- ------------- ----------- -----------
NET INCREASE (DECREASE) -
CLASS X.................. (49,525,346) (6,391,540) 233,969 321,327
------------- ------------- ----------- -----------
AMOUNT
Sold.......................... $ 484,053,373 $ 560,245,244 $ 4,683,735 $ 5,606,552
Reinvestment of dividends and
distributions............... 11,291,379 20,403,630 106,925 57,933
Redeemed...................... (544,870,098) (587,040,414) (2,480,425) (2,469,923)
------------- ------------- ----------- -----------
NET INCREASE (DECREASE) -
CLASS X.................. $ (49,525,346) $ (6,391,540) $ 2,310,235 $ 3,194,562
------------- ------------- ----------- -----------
CLASS Y SHARES*
SHARES
Sold.......................... 1,120,910 -- 4,316 --
Reinvestment of dividends and
distributions............... 2,014 -- 17 --
Redeemed...................... (320,346) -- (1) --
------------- ------------- ----------- -----------
NET INCREASE - CLASS Y... 802,578 -- 4,332 --
------------- ------------- ----------- -----------
AMOUNT
Sold.......................... $ 1,120,910 -- $ 42,715 --
Reinvestment of dividends and
distributions............... 2,014 -- 172 --
Redeemed...................... (320,346) -- (9) --
------------- ------------- ----------- -----------
NET INCREASE - CLASS Y... $ 802,578 -- $ 42,878 --
------------- ------------- ----------- -----------
</TABLE>
------------------
* For the period June 6, 2000 (issue date) through June 30, 2000.
** For the period May 4, 1999 (commencement of operations) through December
31, 1999.
SEE NOTES TO FINANCIAL STATEMENTS
102
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENTS OF CHANGES IN NET ASSETS, CONTINUED
SUMMARY OF TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
<TABLE>
<CAPTION>
QUALITY INCOME PLUS HIGH YIELD
-------------------------------- --------------------------------
FOR THE SIX FOR THE YEAR FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED MONTHS ENDED ENDED
JUNE 30, 2000 DECEMBER 31, 1999 JUNE 30, 2000 DECEMBER 31, 1999
--------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
CLASS X SHARES
SHARES
Sold.......................... 2,929,343 5,941,824 3,827,905 14,733,336
Reinvestment of dividends and
distributions............... 1,520,869 3,166,433 4,787,963 9,920,699
Redeemed...................... (9,094,189) (12,626,740) (14,232,704) (31,789,573)
------------ ------------- ------------ -------------
NET INCREASE (DECREASE) -
CLASS X.................. (4,643,977) (3,518,483) (5,616,836) (7,135,538)
------------ ------------- ------------ -------------
AMOUNT
Sold.......................... $ 28,642,331 $ 62,145,724 $ 15,606,665 $ 69,363,729
Reinvestment of dividends and
distributions............... 14,884,377 32,603,082 19,622,039 46,732,009
Redeemed...................... (89,066,544) (130,605,658) (59,716,791) (149,436,445)
------------ ------------- ------------ -------------
NET INCREASE (DECREASE) -
CLASS X.................. $(45,539,836) $ (35,856,852) $(24,488,087) $ (33,340,707)
------------ ------------- ------------ -------------
CLASS Y SHARES*
SHARES
Sold.......................... 14,081 -- 139,055 --
Reinvestment of dividends and
distributions............... 80 -- 1,880 --
Redeemed...................... (6) -- (68) --
------------ ------------- ------------ -------------
NET INCREASE - CLASS Y... 14,155 -- 140,867 --
------------ ------------- ------------ -------------
AMOUNT
Sold.......................... $ 138,472 -- $ 545,550 --
Reinvestment of dividends and
distributions............... 789 -- 7,294 --
Redeemed...................... (57) -- (267) --
------------ ------------- ------------ -------------
NET INCREASE - CLASS Y... $ 139,204 -- $ 552,577 --
------------ ------------- ------------ -------------
<CAPTION>
UTILITIES INCOME BUILDER
-------------------------------- --------------------------------
FOR THE SIX FOR THE YEAR FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED MONTHS ENDED ENDED
JUNE 30, 2000 DECEMBER 31, 1999 JUNE 30, 2000 DECEMBER 31, 1999
------------------------------ ------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
CLASS X SHARES
SHARES
Sold.......................... 1,326,689 3,501,422 531,309 1,493,695
Reinvestment of dividends and
distributions............... 1,860,221 1,169,927 (15,543) 512,121
Redeemed...................... (2,484,308) (5,711,878) (1,497,922) (2,529,168)
------------ ------------- ------------ ------------
NET INCREASE (DECREASE) -
CLASS X.................. 702,602 (1,040,529) (982,156) (523,352)
------------ ------------- ------------ ------------
AMOUNT
Sold.......................... $ 30,847,743 $ 75,775,422 $ 5,863,212 $ 17,298,775
Reinvestment of dividends and
distributions............... 39,919,464 25,340,733 (237,573) 5,901,161
Redeemed...................... (57,910,880) (123,835,967) (16,293,066) (28,978,600)
------------ ------------- ------------ ------------
NET INCREASE (DECREASE) -
CLASS X.................. $ 12,856,327 $ (22,719,812) $(10,667,427) $ (5,778,664)
------------ ------------- ------------ ------------
CLASS Y SHARES*
SHARES
Sold.......................... 43,468 -- 4,469 --
Reinvestment of dividends and
distributions............... 2,980 -- 57 --
Redeemed...................... (1,046) -- (1) --
------------ ------------- ------------ ------------
NET INCREASE - CLASS Y... 45,402 -- 4,525 --
------------ ------------- ------------ ------------
AMOUNT
Sold.......................... $ 1,022,578 -- $ 48,585 --
Reinvestment of dividends and
distributions............... 63,318 -- 606 --
Redeemed...................... (24,287) -- (13) --
------------ ------------- ------------ ------------
NET INCREASE - CLASS Y... $ 1,061,609 -- $ 49,178 --
------------ ------------- ------------ ------------
</TABLE>
103
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENTS OF CHANGES IN NET ASSETS, CONTINUED
SUMMARY OF TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
<TABLE>
<CAPTION>
DIVIDEND GROWTH CAPITAL GROWTH
--------------------------------- --------------------------------
FOR THE SIX FOR THE YEAR FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED MONTHS ENDED ENDED
JUNE 30, 2000 DECEMBER 31, 1999 JUNE 30, 2000 DECEMBER 31, 1999
---------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
CLASS X SHARES
SHARES
Sold.......................... 3,794,451 13,098,987 1,403,827 1,226,447
Reinvestment of dividends and
distributions............... 28,839,679 17,950,387 1,545,333 929,562
Redeemed...................... (21,953,187) (21,694,034) (821,443) (1,746,710)
-------------- -------------- ------------ ------------
NET INCREASE (DECREASE) -
CLASS X.................. 10,680,943 9,355,340 2,127,717 409,299
-------------- -------------- ------------ ------------
AMOUNT
Sold.......................... $ 65,701,315 $ 280,502,535 $ 34,565,656 $ 25,586,183
Reinvestment of dividends and
distributions............... 364,348,148 370,741,513 31,617,502 17,791,828
Redeemed...................... (368,376,258) (443,365,153) (20,233,469) (35,847,602)
-------------- -------------- ------------ ------------
NET INCREASE (DECREASE) -
CLASS X.................. $ 61,673,205 $ 207,878,895 $ 45,949,689 $ 7,530,409
-------------- -------------- ------------ ------------
CLASS Y SHARES*
SHARES
Sold.......................... 95,787 -- 24,638 --
Reinvestment of dividends and
distributions............... 29,673 -- 4,880 --
Redeemed...................... (43) -- (7) --
-------------- -------------- ------------ ------------
NET INCREASE - CLASS Y... 125,417 -- 29,511 --
-------------- -------------- ------------ ------------
AMOUNT
Sold.......................... $ 1,632,492 -- $ 605,971 --
Reinvestment of dividends and
distributions............... 375,069 -- 99,792 --
Redeemed...................... (702) -- (170) --
-------------- -------------- ------------ ------------
NET INCREASE - CLASS Y... $ 2,006,859 -- $ 705,593 --
-------------- -------------- ------------ ------------
</TABLE>
------------------
* For the period June 6, 2000 (issue date) through June 30, 2000.
SEE NOTES TO FINANCIAL STATEMENTS
104
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENTS OF CHANGES IN NET ASSETS, CONTINUED
SUMMARY OF TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
<TABLE>
<CAPTION>
GLOBAL DIVIDEND GROWTH EUROPEAN GROWTH
-------------------------------- --------------------------------
FOR THE SIX FOR THE YEAR FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED MONTHS ENDED ENDED
JUNE 30, 2000 DECEMBER 31, 1999 JUNE 30, 2000 DECEMBER 31, 1999
--------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
CLASS X SHARES
SHARES
Sold.......................... 1,180,015 3,735,961 6,041,087 5,542,879
Reinvestment of dividends and
distributions............... 3,301,049 3,214,043 3,299,856 2,023,007
Redeemed...................... (5,287,463) (6,868,373) (6,076,921) (7,927,773)
------------ ------------ ------------- -------------
NET INCREASE (DECREASE) -
CLASS X.................. (806,399) 81,631 3,264,022 (361,887)
------------ ------------ ------------- -------------
AMOUNT
Sold.......................... $ 15,906,042 $ 52,898,642 $ 191,532,914 $ 151,803,640
Reinvestment of dividends and
distributions............... 40,941,373 45,033,308 88,172,155 50,554,942
Redeemed...................... (70,784,379) (96,932,891) (195,306,195) (215,476,326)
------------ ------------ ------------- -------------
NET INCREASE (DECREASE) -
CLASS X.................. $(13,936,964) $ 999,059 $ 84,398,874 $ (13,117,744)
------------ ------------ ------------- -------------
CLASS Y SHARES*
SHARES
Sold.......................... 16,917 -- 47,107 --
Reinvestment of dividends and
distributions............... 1,677 -- 8,195 --
Redeemed...................... (7) -- (105) --
------------ ------------ ------------- -------------
NET INCREASE - CLASS Y... 18,587 -- 55,197 --
------------ ------------ ------------- -------------
AMOUNT
Sold.......................... $ 231,125 -- $ 1,497,191 --
Reinvestment of dividends and
distributions............... 20,655 -- 218,959 --
Redeemed...................... (93) -- (2,913) --
------------ ------------ ------------- -------------
NET INCREASE - CLASS Y... $ 251,687 -- $ 1,713,237 --
------------ ------------ ------------- -------------
<CAPTION>
PACIFIC GROWTH
--------------------------------
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
JUNE 30, 2000 DECEMBER 31, 1999
------------------------------ --------------------------------
(UNAUDITED)
<S> <C> <C>
CLASS X SHARES
SHARES
Sold.......................... 21,141,641 37,338,181
Reinvestment of dividends and
distributions............... 197,316 115,750
Redeemed...................... (21,470,434) (34,025,265)
------------- -------------
NET INCREASE (DECREASE) -
CLASS X.................. (131,477) 3,428,666
------------- -------------
AMOUNT
Sold.......................... $ 167,163,219 $ 233,462,939
Reinvestment of dividends and
distributions............... 1,544,980 770,896
Redeemed...................... (171,911,907) (215,206,842)
------------- -------------
NET INCREASE (DECREASE) -
CLASS X.................. $ (3,203,708) $ 19,026,993
------------- -------------
CLASS Y SHARES*
SHARES
Sold.......................... 7,682 --
Reinvestment of dividends and
distributions............... 114 --
Redeemed...................... (289) --
------------- -------------
NET INCREASE - CLASS Y... 7,507 --
------------- -------------
AMOUNT
Sold.......................... $ 59,938 --
Reinvestment of dividends and
distributions............... 892 --
Redeemed...................... (2,269) --
------------- -------------
NET INCREASE - CLASS Y... $ 58,561 --
------------- -------------
</TABLE>
105
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENTS OF CHANGES IN NET ASSETS, CONTINUED
SUMMARY OF TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
<TABLE>
<CAPTION>
EQUITY S&P 500 INDEX
--------------------------------- --------------------------------
FOR THE SIX FOR THE YEAR FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED MONTHS ENDED ENDED
JUNE 30, 2000 DECEMBER 31, 1999 JUNE 30, 2000 DECEMBER 31, 1999
---------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
CLASS X SHARES
SHARES
Sold.......................... 4,745,492 10,020,241*** 4,728,737 11,576,170
Reinvestment of dividends and
distributions............... 7,371,126 4,406,556 168,487 42,255
Redeemed...................... (3,422,584) (5,269,790) (1,640,373) (2,115,310)
-------------- -------------- ------------ ------------
NET INCREASE - CLASS X... 8,694,034 9,157,007 3,256,851 9,503,115
-------------- -------------- ------------ ------------
AMOUNT
Sold.......................... $ 260,061,271 $ 428,695,184*** $ 61,791,022 $140,040,634
Reinvestment of dividends and
distributions............... 312,699,140 176,314,365 2,227,402 528,180
Redeemed...................... (180,895,428) (223,711,390) (21,414,999) (25,657,030)
-------------- -------------- ------------ ------------
NET INCREASE - CLASS X... $ 391,864,983 $ 381,298,159 $ 42,603,425 $114,911,784
-------------- -------------- ------------ ------------
CLASS Y SHARES*
SHARES
Sold.......................... 69,232 -- 124,236 --
Reinvestment of dividends and
distributions............... 12,381 -- 1,226 --
Redeemed...................... (617) -- (51) --
-------------- -------------- ------------ ------------
NET INCREASE - CLASS Y... 80,996 -- 125,411 --
-------------- -------------- ------------ ------------
AMOUNT
Sold.......................... $ 3,438,766 -- $ 1,667,094 --
Reinvestment of dividends and
distributions............... 525,445 -- 16,207 --
Redeemed...................... (29,471) -- (686) --
-------------- -------------- ------------ ------------
NET INCREASE - CLASS Y... $ 3,934,740 -- $ 1,682,615 --
-------------- -------------- ------------ ------------
</TABLE>
------------------
* For the period June 6, 2000 (issued date) June 30, 2000.
** For the period May 4, 1999 (commencement of operations) through December
31, 1999.
*** Includes acquisition of Capital Appreciation of $24,458 shares and
$35,291,368.
SEE NOTES TO FINANCIAL STATEMENTS
106
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL STATEMENTS, CONTINUED
STATEMENTS OF CHANGES IN NET ASSETS, CONTINUED
SUMMARY OF TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
<TABLE>
<CAPTION>
COMPETITIVE EDGE "BEST IDEAS" AGGRESSIVE EQUITY STRATEGIST
-------------------------------- ---------------------------------- -------------
FOR THE SIX FOR THE YEAR FOR THE SIX FOR THE YEAR FOR THE SIX
MONTHS ENDED ENDED MONTHS ENDED ENDED MONTHS ENDED
JUNE 30, 2000 DECEMBER 31, 1999 JUNE 30, 2000 DECEMBER 31, 1999** JUNE 30, 2000
-------------------------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
CLASS X SHARES
SHARES
Sold.......................... 2,250,448 2,453,400 6,711,827 3,507,417 2,709,828
Reinvestment of dividends and
distributions............... 26,257 25,638 3,288 794 5,788,216
Redeemed...................... (484,511) (1,165,678) (1,106,659) (886,433) (3,503,182)
----------- ------------ ------------ ------------ ------------
NET INCREASE - CLASS X... 1,792,194 1,313,360 5,608,456 2,621,778 4,994,862
----------- ------------ ------------ ------------ ------------
AMOUNT
Sold.......................... $27,159,188 $ 25,976,215 $105,306,648 $ 41,217,608 $ 51,774,953
Reinvestment of dividends and
distributions............... 314,559 267,149 49,395 8,097 98,135,704
Redeemed...................... (5,826,548) (12,148,106) (16,481,949) (10,278,236) (66,911,070)
----------- ------------ ------------ ------------ ------------
NET INCREASE - CLASS X... $21,647,199 $ 14,095,258 $ 88,874,094 $ 30,947,469 $ 82,999,587
----------- ------------ ------------ ------------ ------------
CLASS Y SHARES*
SHARES
Sold.......................... 50,588 -- 86,822 -- 93,318
Reinvestment of dividends and
distributions............... 195 -- 33 -- 13,230
Redeemed...................... (315) -- (1,771) -- (62)
----------- ------------ ------------ ------------ ------------
NET INCREASE - CLASS Y... 50,468 -- 85,084 -- 106,486
----------- ------------ ------------ ------------ ------------
AMOUNT
Sold.......................... $ 605,245 -- $ 1,294,752 -- $ 1,791,230
Reinvestment of dividends and
distributions............... 2,328 -- 497 -- 221,608
Redeemed...................... (3,808) -- (25,765) -- (1,184)
----------- ------------ ------------ ------------ ------------
NET INCREASE - CLASS Y... $ 603,765 -- $ 1,269,484 -- $ 2,011,654
----------- ------------ ------------ ------------ ------------
<CAPTION>
STRATEGIST
-----------------
FOR THE YEAR
ENDED
DECEMBER 31, 1999
------------------------------ -----------------
<S> <C>
CLASS X SHARES
SHARES
Sold.......................... 6,274,928
Reinvestment of dividends and
distributions............... 851,314
Redeemed...................... (7,016,894)
-------------
NET INCREASE - CLASS X... 109,348
-------------
AMOUNT
Sold.......................... $ 110,695,004
Reinvestment of dividends and
distributions............... 15,227,618
Redeemed...................... (124,097,206)
-------------
NET INCREASE - CLASS X... $ 1,825,416
-------------
CLASS Y SHARES*
SHARES
Sold.......................... --
Reinvestment of dividends and
distributions............... --
Redeemed...................... --
-------------
NET INCREASE - CLASS Y... --
-------------
AMOUNT
Sold.......................... --
Reinvestment of dividends and
distributions............... --
Redeemed...................... --
-------------
NET INCREASE - CLASS Y... --
-------------
</TABLE>
107
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENTS SERIES
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 (UNAUDITED)
1. ORGANIZATION AND ACCOUNTING POLICIES
Morgan Stanley Dean Witter Variable Investment Series (the "Fund") is registered
under the Investment Company Act of 1940, as amended (the "Act"), as a
diversified, open-end management investment company. Investments in the Fund may
be made only by (1) Northbrook Life Insurance Company to fund the benefits under
variable annuity contracts and variable life insurance contracts it issues;
(2) Allstate Life Insurance Company to fund the benefits under variable annuity
contracts it issues; (3) Glenbrook Life and Annuity Company to fund the benefits
under variable annuity contracts and variable life insurance contracts it
issues; and (4) Paragon Life Insurance Company to fund the benefits under
variable life insurance contracts it issues to certain employees of Morgan
Stanley Dean Witter & Co., the parent company of Morgan Stanley Dean Witter
Advisors Inc. (the "Investment Manager").
The Fund, organized on February 25, 1983 as a Massachusetts business trust,
consists of sixteen Portfolios ("Portfolios") which commenced operations as
follows:
<TABLE>
<CAPTION>
COMMENCEMENT COMMENCEMENT OF
PORTFOLIO OF OPERATIONS PORTFOLIO OPERATIONS
--------- ---------------- --------- -----------------
<S> <C> <C> <C>
Money Market........................ March 9, 1984 Global Dividend Growth ............. February 23, 1994
Short-Term Bond..................... May 4, 1999 European Growth .................... March 1, 1991
Quality Income Plus................. March 1, 1987 Pacific Growth ..................... February 23, 1994
High Yield.......................... March 9, 1984 Equity ............................. March 9, 1984
Utilities........................... March 1, 1990 S&P 500 Index ...................... May 18, 1998
Income Builder...................... January 21, 1997 Competitive Edge "Best Ideas" ...... May 18, 1998
Dividend Growth..................... March 1, 1990 Aggressive Equity .................. May 4, 1999
Capital Growth...................... March 1, 1991 Strategist ......................... March 1, 1987
</TABLE>
On June 6, 2000, the Fund commenced offering one additional class of shares
(Class Y shares), with all Portfolio shares issued prior to May 1, 2000
designated Class X shares. The two classes are identical except that Class Y
shares incur distribution expenses. Class X shares are generally available to
holders of contracts offered by Paragon Life Insurance Company and other
contracts offered before May 1, 2000. Class Y shares are available to holders of
contracts offered by Northbrook Life Insurance Company, Allstate Life Insurance
Company, and Glenbrook Life and Annuity Company offered on or after June 6,
2000.
108
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENTS SERIES
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
The investment objectives of each Portfolio are as follows:
<TABLE>
<S> <C>
PORTFOLIO INVESTMENT OBJECTIVE
Money Market Seeks high current income, preservation of capital and
liquidity by investing in short-term money market
instruments.
Short-Term Bond Seeks to provide a high level of current income consistent
with the preservation of capital, by investing primarily in
bonds issued or guaranteed as to principal and interest by
the U.S. Government, its agencies or instrumentalities and
investment grade corporate and other types of bonds.
Quality Income Plus Seeks, as its primary objective, to earn a high level of
current income and, as a secondary objective, capital
appreciation, but only when consistent with its primary
objective, by investing primarily in U.S. Government
securities and higher-rated fixed income securities.
High Yield Seeks, as its primary objective, to earn a high level of
current income and, as a secondary objective, capital
appreciation, but only when consistent with its primary
objective, by investing primarily in lower-rated fixed
income securities.
Utilities Seek both capital appreciation and current income by
investing in equity and fixed income securities of companies
engaged in the utilities industry.
Income Builder Seeks, as its primary objective, to earn reasonable income
and, as a secondary objective, growth of capital by
investing primarily in income-producing equity securities.
Dividend Growth Seeks to provide reasonable current income and long-term
growth of income and capital by investing primarily in
common stocks of companies with a record of paying dividends
and the potential for increasing dividends.
Capital Growth Seeks long-term capital growth by investing primarily in
common stocks.
Global Dividend Seeks to provide reasonable current income and long-term
Growth growth of income and capital by investing primarily in
common stocks of companies, issued by issuers worldwide,
with a record of paying dividends and the potential for
increasing dividends.
European Growth Seeks to maximize the capital appreciation of its
investments by investing primarily in securities issued by
issuers located in Europe.
Pacific Growth Seeks to maximize the capital appreciation of its
investments by investing primarily in securities issued by
issuers located in Asia, Australia and New Zealand.
Equity Seeks, as its primary objective, capital growth and, as a
secondary objective, income, but only when consistent with
its primary objective, by investing primarily in common
stocks.
S&P 500 Index Seeks to provide investment results that, before expenses,
correspond to the total return of the Standards & Poor's 500
Composite Stock Price Index (the "S&P 500 Index") by
investing primarily in common stocks included in the S&P 500
Index.
Competitive Edge Seeks long-term capital growth by investing primarily in the
"Best Ideas" common stock of U.S. and non-U.S. companies included in the
"Best Ideas" list, a research compilation assembled and
maintained by Morgan Stanley Dean Witter Equity Research.
Aggressive Equity* Seeks long-term capital growth by investing primarily in the
equity securities of companies that offer the potential for
superior earnings growth. Prior to March 15, 2000, the
investment policy was to invest primarily in equity
securities of companies covered by Morgan Stanley Dean
Witter Equity Research that offer the potential for superior
earnings growth.
Strategist Seeks a high total investment return through a fully managed
investment policy utilizing equity, investment grade fixed
income and money market securities and writing covered
options.
</TABLE>
* ON MARCH 15, 2000, SHAREHOLDERS APPROVED A CHANGE IN THE INVESTMENT OBJECTIVE.
109
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENTS SERIES
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ from
those estimates.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- Money Market: securities are valued at amortized
cost which approximates market value. All remaining Portfolios: (1) an equity
security listed or traded on the New York, American or other domestic or foreign
stock exchange is valued at its latest sale price on that exchange prior to the
time when assets are valued; if there were no sales that day, the security is
valued at the latest bid price (in cases where securities are traded on more
than one exchange, the securities are valued on the exchange designated as the
primary market pursuant to procedures adopted by the Trustees); (2) all other
portfolio securities for which over-the-counter market quotations are readily
available are valued at the latest available bid price prior to the time of
valuation; (3) listed options are valued at the latest sale price on the
exchange on which they are listed unless no sales of such options have taken
place that day, in which case they are valued at the mean between their latest
bid and asked price; (4) when market quotations are not readily available,
including circumstances under which it is determined by the Investment Manager
(or, in the case of European Growth and Pacific Growth, by Morgan Stanley Dean
Witter Investment Management Inc. (the "Sub-Advisor")) that sale or bid prices
are not reflective of a security's market value, portfolio securities are valued
at their fair value as determined in good faith under procedures established by
and under the general supervision of the Trustees (valuation of debt securities
for which market quotations are not readily available may also be based upon
current market prices of securities which are comparable in coupon, rating and
maturity or an appropriate matrix utilizing similar factors); (5) certain of the
Fund's portfolio securities may be valued by an outside pricing service approved
by the Trustees. The pricing service may utilize a matrix system incorporating
security quality, maturity and coupon as the evaluation model parameters, and/or
research and evaluations by its staff, including review of broker-dealer market
price quotations in determining what it believes is the fair valuation of the
securities valued by such pricing service; and (6) short-term debt securities
having a maturity date of more than sixty days at the time of purchase are
valued on a mark-to-market basis until sixty days prior to maturity and
thereafter at amortized cost based on their value on the 61st day. Short-term
debt securities having a maturity date of sixty days or less at the time of
purchase are valued at amortized cost.
110
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENTS SERIES
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
Dividend income and other distributions are recorded on the ex-dividend date
except for certain dividends on foreign securities which are recorded as soon as
the Fund is informed after the ex-dividend date. Interest income is accrued
daily except where collection is not expected. Money Market amortizes premiums
and accretes discounts on securities owned; gains and losses realized upon the
sale of securities are based on amortized cost. Discounts for all other
Portfolios are accreted over the life of the respective securities.
C. ACCOUNTING FOR OPTIONS AND FUTURES CONTRACTS -- (1) Written options on debt
obligations, equities and foreign currency: when the Fund writes a call or put
option, an amount equal to the premium received is included in the Fund's
Statement of Assets and Liabilities as a liability which is subsequently
marked-to-market to reflect the current market value of the option written. If a
written option either expires or the Fund enters into a closing purchase
transaction, the Fund realizes a gain or loss without regard to any unrealized
gain or loss on the underlying security or currency and the liability related to
such option is extinguished. If a written call option is exercised, the Fund
realizes a gain or loss from the sale of the underlying security or currency and
the proceeds from such sale are increased by the premium originally received. If
a put option which the Fund has written is exercised, the amount of the premium
originally received reduces the cost of the security which the Fund purchases
upon exercise of the option; (2) Purchased options on debt obligations, equities
and foreign currency: When the Fund purchases a call or put option, the premium
paid is recorded as an investment and is subsequently marked-to-market to
reflect the current market value. If a purchased option expires, the Fund will
realize a loss to the extent of the premium paid. If the Fund enters into a
closing sale transaction, a gain or loss is realized for the difference between
the proceeds from the sale and the cost of the option. If a put option is
exercised, the cost of the security sold upon exercise will be increased by the
premium originally paid. If a call option is exercised, the cost of the security
purchased upon exercise will be increased by the premium originally paid;
(3) Options on futures contracts: the Fund is required to deposit cash, U.S.
Government securities or other liquid portfolio securities as "initial
margin"and "variation margin" with respect to written call and put options on
futures contracts. If written option expires, the Fund realizes a gain. If a
written call or put option is exercised, the premium received will decrease or
increase the unrealized loss or gain on the futures contract. If the Fund enters
into a closing purchase transaction, the Fund realizes a gain or loss without
regard to any unrealized gain or loss on the underlying futures contract and the
liability related to such option is extinguished; (4) Futures contracts: a
futures contract is an
111
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENTS SERIES
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
agreement between two parties to buy and sell financial instruments at a set
price on a future date. Upon entering into such a contract, the Fund is required
to pledge to the broker cash, U.S. Government securities or other liquid
portfolio securities equal to the minimum initial margin requirements of the
applicable futures exchange. Pursuant to the contract, the Fund agrees to
receive from or pay to the broker an amount of cash equal to the daily
fluctuation in the value of the contract. Such receipts or payments known as
variation margin are recorded by the Fund as unrealized gains or losses. Upon
closing of the contract, the Fund realized a gain or loss equal to the
difference between the value of the contract at the time it was opened and the
value at the time it was closed.
D. FOREIGN CURRENCY TRANSLATION -- The books and records of the Portfolios
investing in foreign currency denominated transactions are translated into U.S.
dollars as follows: (1) the foreign currency market value of investment
securities, other assets and liabilities and forward foreign currency contracts
are translated at the exchange rates prevailing at the end of the period; and
(2) purchases, sales, income and expenses are translated at the exchange rates
prevailing on the respective dates of such transactions. The resultant exchange
gains and losses are included in the Statement of Operations as realized and
unrealized gain/loss on foreign exchange transactions. Pursuant to U.S. Federal
income tax regulations, certain foreign exchange gains/losses included in
realized and unrealized gain/loss are included in or are a reduction of ordinary
income for federal income tax purposes. The Portfolios do not isolate that
portion of the results of operations arising as a result of changes in the
foreign exchange rates from the changes in the market prices of the securities.
E. FORWARD FOREIGN CURRENCY CONTRACTS -- Some of the Portfolios may enter into
forward foreign currency contracts which are valued daily at the appropriate
forward exchange rates. The resultant unrealized exchange gains and losses are
included in the Statement of Operations as unrealized gain/ loss on foreign
exchange transactions. The Portfolios record realized gains or losses on
delivery of the currency or at the time the forward contract is extinguished
(compensated) by entering into a closing transaction prior to delivery.
F. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply individually
for each Portfolio with the requirements of the Internal Revenue Code applicable
to regulated investment companies and to distribute all of its taxable income to
its shareholders. Accordingly, no federal income tax provision is required.
112
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENTS SERIES
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
G. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to its shareholders on the record date. The amount of dividends
and distributions from net investment income and net realized capital gains are
determined in accordance with federal income tax regulations which may differ
from generally accepted accounting principles. These book/tax differences are
either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within the
capital accounts based on their federal tax-basis treatment; temporary
differences do not require reclassification. Dividends and distributions which
exceed net investment income and net realized capital gains for financial
reporting purposes but not for tax purposes are reported as dividends in excess
of net investment income or distributions in excess of net realized capital
gains. To the extent they exceed net investment income and net realized capital
gains for tax purposes, they are reported as distributions of paid-in-capital.
H. EXPENSES -- Direct expenses are charged to the respective Portfolio and
general Fund expenses are allocated on the basis of relative net assets or
equally among the Portfolios.
2. INVESTMENT MANAGEMENT AND SUB-ADVISORY AGREEMENTS
Pursuant to an Investment Management Agreement (the "Agreement"), the Fund pays
the Investment Manager a management fee, accrued daily and payable monthly, by
applying the following annual rates to each Portfolios' net assets determined at
the close of each business day:
Money Market -- 0.50% to the portion of daily net assets not exceeding $500
million; 0.425% to the portion of daily net assets exceeding $500 million but
not exceeding $750 million; and 0.375% to the portion of daily net assets
exceeding $750 million.
Short-Term Bond -- 0.45%.
Quality Income Plus -- 0.50% to the portion of daily net assets not exceeding
$500 million and 0.45% to the portion of daily net assets exceeding $500
million.
High Yield -- 0.50% to the portion of daily net assets not exceeding $500
million and 0.425% of the portion of daily net assets exceeding $500 million.
Utilities -- 0.65% to the portion of daily net assets not exceeding $500
million; 0.55% to the portion of daily net assets exceeding $500 million but not
exceeding $1 billion and 0.525% to the portion of daily net assets exceeding $1
billion.
113
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENTS SERIES
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
Income Builder -- 0.75%.
Dividend Growth -- 0.625% to the portion of daily net assets not exceeding $500
million; 0.50% to the portion of daily net assets exceeding $500 million but not
exceeding $1 billion; 0.475% to the portion of daily net assets exceeding $1
billion but not exceeding $2 billion; 0.45% to the portion of daily net assets
exceeding $2 billion but not exceeding $3 billion and 0.425% to the portion of
daily net assets exceeding $3 billion.
Capital Growth -- 0.65%.
Global Dividend Growth -- 0.75% to the portion of daily net assets not exceeding
$1 billion and 0.725% to the portion of daily net assets exceeding $1 billion.
European Growth -- 0.95% to the portion of daily net assets not exceeding $500
million and 0.90% to the portion of daily net assets exceeding $500 million.
Pacific Growth -- 0.95%.
Equity -- 0.50% to the portion of daily net assets not exceeding $1 billion and
0.475% to the portion of daily net assets exceeding $1 billion; and effective
May 1, 2000 the Agreement was amended to reduce the annual rate to 0.45% of the
portion of daily net assets exceeding $2 billion.
S&P 500 Index -- 0.40%.
Competitive Edge "Best Ideas" -- 0.65%.
Aggressive Equity -- 0.75%.
Strategist -- 0.50% to the portion of daily net assets not exceeding $1.5
billion and 0.475% to the portion of daily net assets exceeding $1.5 billion.
Under a Sub-Advisory Agreement between the Investment Manager and the
Sub-Advisor, the Sub-Advisor provides European Growth and Pacific Growth with
investment advice and portfolio management relating to the Portfolios'
investments in securities, subject to the overall supervision of the Investment
Manager. As compensation for its services provided pursuant to the Sub-Advisory
Agreement, the Investment Manager pays the Sub-Advisor monthly compensation
equal to 40% of its monthly compensation.
The Investment Manager has agreed to assume all operating expenses (except for
Plan of Distribution fees) and to waive its compensation to the extent that such
expenses and compensation on an annualized basis exceed 0.50% of the daily net
assets of S&P 500 Index.
114
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENTS SERIES
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Morgan Stanley Dean Witter Distributors
Inc. (the "Distributor"), an affiliate of the Investment Manager. The Fund has
adopted a Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the
Act. Under the Plan, Class Y shares of each Portfolio bear a distribution fee
which is accrued daily and paid monthly at the annual rate of 0.25% of the
average daily net assets of the class.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
Purchases and sales/maturities of portfolio securities, excluding short-term
investments (except Money Market), for the six months ended June 30, 2000 were
as follows:
<TABLE>
<CAPTION>
U.S. GOVERNMENT SECURITIES OTHER
------------------------------- ---------------------------------
PURCHASES SALES/MATURITIES PURCHASES SALES/MATURITIES
------------ ---------------- -------------- ----------------
<S> <C> <C> <C> <C>
Money Market.................................... $ 72,836,514 $ 89,983,528 $2,011,404,236 $2,053,291,898
Short-Term Bond................................. 1,881,445 497,782 525,535 --
Quality Income Plus............................. 145,652,466 144,239,010 105,317,785 142,516,125
High Yield...................................... -- -- 15,013,005 43,856,500
Utilities....................................... 4,307,227 4,330,938 24,607,085 57,610,450
Income Builder.................................. 247,899 668,333 20,196,996 27,639,611
Dividend Growth................................. -- -- 363,518,504 622,643,343
Capital Growth.................................. -- -- 338,106,796 332,591,683
Global Dividend Growth.......................... -- -- 115,504,990 165,585,885
European Growth................................. -- -- 213,624,664 184,301,712
Pacific Growth.................................. -- -- 30,114,709 32,603,683
Equity.......................................... -- -- 4,194,225,010 4,168,826,927
S&P 500 Index................................... -- -- 45,548,458 1,777,846
Competitive Edge "Best Ideas"................... -- -- 55,559,766 29,848,006
Aggressive Equity............................... 4,971,563 -- 285,281,536 202,448,880
Strategist...................................... 86,904,498 105,237,961 286,572,273 347,677,721
</TABLE>
Included in the aforementioned purchases and sales of portfolio securities of
S&P 500 Index are purchases of Morgan Stanley Dean Witter & Co., an affiliate of
the Investment Manager and Distributor, of $1,006,240 and purchases and sales of
Allstate Corp., an affiliate of the Fund, of $490,607 and $43,796, respectively,
including realized losses of $23,177.
Included in the payable for investments purchased at June 30, 2000 for Income
Builder and Aggressive Equity, are $160,794 and $2,842,576, respectively, for
unsettled trades with Dean Witter Reynolds Inc. ("DWR"), an affiliate of the
Investment Manager and Distributor. Included in the receivable for investments
sold at June 30, 2000 for Income Builder, Capital Growth, and Aggressive Equity,
are $25,823, $227,242, and $735,020, respectively, for unsettled trades with
DWR.
115
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENTS SERIES
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
For the six months ended June 30, 2000, the following Portfolios incurred
brokerage commissions with DWR for portfolio transactions executed on behalf of
the Portfolio:
<TABLE>
<CAPTION>
GLOBAL
INCOME DIVIDEND CAPITAL DIVIDEND AGGRESSIVE
UTILITIES BUILDER GROWTH GROWTH GROWTH EQUITY EQUITY STRATEGIST
--------- -------- -------- -------- -------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$6,750 $13,990 $93,359 $45,570 $25,635 $66,963 $67,383 $7,255
====== ======= ======= ======= ======= ======= ======= ======
</TABLE>
Included in the receivable for investments sold at June 30, 2000 for Capital
Growth is $203,223 for unsettled trades with Morgan Stanley & Co. Inc., an
affiliate of the Investment Manager and Distributor.
For the six months ended June 30, 2000, the following Portfolios incurred
brokerage commissions with Morgan Stanley & Co., for portfolio transactions
executed on behalf of the Portfolio:
<TABLE>
<CAPTION>
GLOBAL COMPETITIVE
INCOME DIVIDEND CAPITAL DIVIDEND PACIFIC EDGE AGGRESSIVE
BUILDER GROWTH GROWTH GROWTH GROWTH EQUITY "BEST IDEAS" EQUITY STRATEGIST
------- -------- -------- --------- -------- -------- -------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$1,660 $89,369 $26,055 $107,994 $5,145 $452,012 $64,326 $18,654 $12,318
====== ======= ======= ======== ====== ======== ======= ======= =======
</TABLE>
Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent.
The Fund has an unfunded noncontributory defined benefit pension plan covering
all independent Trustees of the Fund who will have served as independent
Trustees for at least five years at the time of retirement. Benefits under this
plan are based on years of service and compensation during the last five years
of service. Aggregate pension costs for the six months ended June 30, 2000
included in Trustees' fees and expenses in the Statement of Operations and the
accrued pension liability included in accrued expenses in the Statement of
Assets and Liabilities are as follows:
<TABLE>
<CAPTION>
AGGREGATE PENSION COSTS
QUALITY
MONEY INCOME HIGH INCOME DIVIDEND CAPITAL
MARKET PLUS YIELD UTILITIES BUILDER GROWTH GROWTH
-------- -------- -------- --------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
$169 $211 $140 $226 $33 $915 $112
==== ==== ==== ==== === ==== ====
</TABLE>
<TABLE>
<CAPTION>
GLOBAL COMPETITIVE
DIVIDEND EUROPEAN PACIFIC EDGE S&P 500
GROWTH GROWTH GROWTH EQUITY "BEST IDEAS" INDEX STRATEGIST
-------- -------- -------- -------- -------------- -------- ----------
-------- -------- -------- --------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
$189 $202 $27 $577 $140 $36 $273
==== ==== === ==== ==== === ====
</TABLE>
116
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENTS SERIES
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
ACCRUED PENSION LIABILITY
QUALITY
MONEY INCOME HIGH INCOME DIVIDEND CAPITAL
MARKET PLUS YIELD UTILITIES BUILDER GROWTH GROWTH
-------- -------- -------- --------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
$10,861 $7,486 $3,727 $5,053 $105 $9,326 $492
======= ====== ====== ====== ==== ====== ====
</TABLE>
<TABLE>
<CAPTION>
GLOBAL COMPETITIVE
DIVIDEND EUROPEAN PACIFIC EDGE S&P 500
GROWTH GROWTH GROWTH EQUITY "BEST IDEAS" INDEX STRATEGIST
-------- -------- -------- -------- -------------- -------- ----------
-------- -------- -------- --------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
$904 $1,164 $219 $6,365 $133 $56 $7,775
==== ====== ==== ====== ==== === ======
</TABLE>
5. FEDERAL INCOME TAX STATUS
At December 31, 1999, the following Portfolios had an approximate net capital
loss carryover which may be used to offset future capital gains to the extent
provided by regulations:
<TABLE>
<CAPTION>
AMOUNT IN THOUSANDS
------------------------------------------------------------------------------------------------
AVAILABLE THROUGH DECEMBER 31, 2000 2001 2002 2003 2004 2005 2006 2007 TOTAL
--------------------------------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Short-Term Bond.................. -- -- -- -- -- -- -- $ 3 $ 3
Quality Income Plus.............. -- -- $12,983 -- $2,491 -- -- 10,571 26,045
High Yield....................... $3,057 $4,736 3,256 $2,984 5,521 -- $ 2,735 10,786 33,075
Income Builder................... -- -- -- -- -- -- -- 229 229
Pacific Growth................... -- -- -- -- -- $9,352 33,536 -- 42,888
Equity........................... -- -- -- -- -- 5,006 14 -- 5,020
Competitive Edge "Best Ideas".... -- -- -- -- -- -- 853 544 1,397
Aggressive Equity................ -- -- -- -- -- -- -- 68 68
</TABLE>
As Part of the Equity's acquisition of the net assets of the Capital
Appreciation Portfolio ("Capital Appreciation"), Equity obtained a net capital
loss carryover of approximately $6,329,000 from Capital Appreciation.
Utilization of the carryover is subject to limitations imposed by the Internal
Revenue Code and Treasury Regulations.
Net capital and net foreign currency losses incurred after October 31
("post-October losses") within the taxable year are deemed to arise on the first
business day of the Portfolios' next taxable year. The following Portfolios
incurred and will elect to defer post-October losses during fiscal 1999: Quality
Income Plus -- $1,864,000; High Yield -- $4,391,000; Income Builder -- $197,000;
Competitive Edge "Best Ideas"-- $1,000 and Strategist --$8,855,000.
117
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENTS SERIES
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
At December 31, 1999, the primary reason(s) for significant temporary book/tax
differences were as follows:
<TABLE>
<CAPTION>
POST-OCTOBER LOSS DEFERRALS
LOSSES FROM WASH SALES
------------ ---------------
<S> <C> <C>
Quality Income Plus......................................... - -
High Yield.................................................. - -
Utilities................................................... -
Income Builder.............................................. - -
Dividend Growth............................................. -
Capital Growth.............................................. -
Global Dividend Growth...................................... -
European Growth............................................. - -
Pacific Growth.............................................. - -
Equity...................................................... -
S&P 500 Index............................................... -
Competitive Edge "Best Ideas"............................... - -
Aggressive Equity........................................... -
Strategist.................................................. - -
</TABLE>
Additionally, Global Dividend Growth and Pacific Growth had temporary
differences attributable to income from the mark-to-market of passive foreign
investment companies, S&P 500 Index had temporary differences attributable to
the mark-to-market of futures contracts and High Yield had temporary differences
attributable to interest on bonds in default.
6. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS
Global Dividend Growth, European Growth, Pacific Growth and Competitive Edge
"Best Ideas" may enter into forward foreign currency contracts ("forward
contracts") to facilitate settlement of foreign currency denominated portfolio
transactions or to manage foreign currency exposure associated with foreign
currency denominated securities. Such Portfolios may also purchase and write put
options on foreign currencies ("options") in which the Portfolios' securities
are denominated to protect against a decline in value of such securities due to
currency devaluations.
Forward contracts and options involve elements of market risk in excess of the
amounts reflected in the Statement of Assets and Liabilities. The Portfolios
bear the risk of an unfavorable change in the foreign exchange rates underlying
the forward contracts. Risks may also arise upon entering into these forward
contracts and options from the potential inability of the counterparties to meet
the terms of their contracts.
118
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENTS SERIES
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 (UNAUDITED) CONTINUED
At June 30, 2000, Global Dividend Growth had outstanding forward contracts used
to facilitate settlement of foreign currency denominated portfolio transactions.
S&P 500 Index may purchase and sell stock index futures ("futures contacts") for
the following reasons: to simulate full investment in the S&P 500 INDEX while
retaining a cash balance for fund management purposes, to facilitate trading, to
reduce transaction costs or to seek higher investment returns when a futures
contract is priced more attractively than stocks comprising the S&P 500 INDEX.
These futures contracts involve elements of market risk in excess of the amount
reflected in the Statement of Assets and Liabilities. S&P 500 Index bears the
risk of an unfavorable change in the value of the underlying securities.
At June 30, 2000, S&P 500 Index had outstanding futures contracts.
At June 30, 2000, European Growth's investments in securities of issuers in the
United Kingdom represented 33.0% of the Portfolio's net assets. Pacific Growth's
investments in securities of issuers in Japan represented 49.0% of the
Portfolio's net assets. These investments, which involve risks and
considerations not present with respect to U.S. securities, may be affected by
economic or political developments in these regions.
At June 30, 2000, Global Dividend Growth's, European Growth's and Pacific
Growth's cash balance consisted principally of interest bearing deposits with
Chase Manhattan Bank N.A., the custodian of each Portfolio.
7. PORTFOLIO MERGER
As of the close of business on March 19, 1999, Equity acquired all the net
assets of Morgan Stanley Dean Witter Variable Investment Series -- Capital
Appreciation ("Capital Appreciation") pursuant to a plan of reorganization
approved by the shareholders of Capital Appreciation on February 24, 1999. The
acquisition was accomplished by a tax-free exchange of 824,458 shares of Equity
at a net asset value of $42.80 per share for 3,210,810 shares of Capital
Appreciation. The net assets of Equity and Capital Appreciation immediately
before the acquisition were $1,300,120,916 and $35,291,368, respectively,
including unrealized appreciation of $6,437,316 for Capital Appreciation.
Immediately after the acquisition the combined net assets of Equity amounted to
$1,335,412,284.
119
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
NET ASSET NET TOTAL
VALUE INVESTMENT NET REALIZED TOTAL FROM DISTRIBUTIONS DIVIDENDS
YEAR ENDED BEGINNING INCOME AND UNREALIZED INVESTMENT DIVIDENDS TO TO AND
DECEMBER 31 OF PERIOD (LOSS) GAIN (LOSS) OPERATIONS SHAREHOLDERS SHAREHOLDERS DISTRIBUTIONS
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MONEY MARKET
CLASS X SHARES
1995 $ 1.00 $0.055 -- $0.055 $ (0.055) -- $ (0.055)
1996 1.00 0.050 -- 0.050 (0.050) -- (0.050)
1997 1.00 0.051 -- 0.051 (0.051) -- (0.051)
1998 1.00 0.051 -- 0.051 (0.051) -- (0.051)
1999 1.00 0.047 -- 0.047 (0.047) -- (0.047)
2000(a)(b) 1.00 0.030 -- 0.030 (0.030) -- (0.030)
CLASS Y SHARES
2000(c) 1.00 0.004 -- 0.004 (0.004) -- (0.004)
SHORT-TERM BOND
CLASS X SHARES
1999(f) 10.00 0.27 $(0.12) 0.15 (0.27) -- (0.27)
2000(a)(b) 9.88 0.24 (0.01) 0.23 (0.23) -- (0.23)
CLASS Y SHARES
2000(c) 9.86 0.04 0.01 0.05 (0.04) -- (0.04)
QUALITY INCOME PLUS
CLASS X SHARES
1995 9.45 0.72 1.50 2.22 (0.71) -- (0.71)
1996 10.96 0.71 (0.58) 0.13 (0.72) -- (0.72)
1997 10.37 0.70 0.40 1.10 (0.70) -- (0.70)
1998 10.77 0.68 0.23 0.91 (0.68) -- (0.68)
1999 11.00 0.67 (1.14) (0.47) (0.67) -- (0.67)
2000(a)(b) 9.86 0.34 (0.03) 0.31 (0.35) -- (0.35)
CLASS Y SHARES
2000(c) 9.80 0.05 0.03 0.08 (0.06) -- (0.06)
HIGH YIELD
CLASS X SHARES
1995 6.16 0.80 0.08 0.88 (0.78) -- (0.78)
1996 6.26 0.77 (0.06) 0.71 (0.79) -- (0.79)
1997 6.18 0.75 (0.06) 0.69 (0.75) -- (0.75)
1998 6.12 0.71 (1.05) (0.34) (0.71) -- (0.71)
1999 5.07 0.68 (0.74) (0.06) (0.68) -- (0.68)
2000(a)(b) 4.33 0.33 (0.46) (0.13) (0.33) -- (0.33)
CLASS Y SHARES
2000(c) 3.92 0.06 (0.05) 0.01 (0.05) -- (0.05)
UTILITIES
CLASS X SHARES
1995 11.92 0.53 2.81 3.34 (0.58) -- (0.58)
1996 14.68 0.55 0.70 1.25 (0.55) $ (0.04) (0.59)
1997 15.34 0.57 3.46 4.03 (0.57) (0.21) (0.78)
1998 18.59 0.57 3.68 4.25 (0.57) (1.02) (1.59)
1999 21.25 0.55 2.08 2.63 (0.55) (0.43) (0.98)
2000(a)(b) 22.90 0.26 (0.27) (0.01) (0.26) (1.38) (1.64)
CLASS Y SHARES
2000(c) 22.98 0.02 (0.24) (0.22) (0.13) (1.38) (1.51)
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
120
<PAGE>
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS
NET ASSET NET ASSETS ----------------------------
VALUE END OF NET PORTFOLIO
END OF TOTAL PERIOD INVESTMENT TURNOVER
PERIOD RETURN+ (000'S) EXPENSES INCOME RATE
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MONEY MARKET
CLASS X SHARES
1995 $ 1.00 5.66% $ 249,787 0.53% 5.52% N/A
1996 1.00 5.11 340,238 0.52 4.97 N/A
1997 1.00 5.23 335,578 0.52 5.10 N/A
1998 1.00 5.18 442,034 0.52 5.04 N/A
1999 1.00 4.80 435,643 0.52 4.68 N/A
2000(a)(b) 1.00 2.83(1) 386,118 0.52(2) 5.58(2) N/A
CLASS Y SHARES
2000(c) 1.00 0.40(1) 803 0.77(2) 5.82(2) N/A
SHORT-TERM BOND
CLASS X SHARES
1999(f) 9.88 1.56(1) 3,175 0.62(2)(5) 4.83(2)(5) 56%(1)
2000(a)(b) 9.88 2.38(1) 5,485 1.08(2)(6) 4.91(2) 11(1)
CLASS Y SHARES
2000(c) 9.87 0.51(1) 43 1.17(2)(6) 4.99(2) 11(1)
QUALITY INCOME PLUS
CLASS X SHARES
1995 10.96 24.30 520,579 0.54 7.07 162
1996 10.37 1.56 474,660 0.53 6.84 182
1997 10.77 11.09 474,990 0.53 6.71 171
1998 11.00 8.67 547,583 0.52 6.23 152
1999 9.86 (4.32) 456,132 0.52 6.45 119
2000(a)(b) 9.82 3.17(1) 408,944 0.52(2) 6.99(2) 59(1)
CLASS Y SHARES
2000(c) 9.82 0.78(1) 139 0.77(2) 6.74(2) 59(1)
HIGH YIELD
CLASS X SHARES
1995 6.26 14.93 154,310 0.54 12.67 58
1996 6.18 11.98 259,549 0.51 12.59 57
1997 6.12 11.87 368,061 0.53 12.44 95
1998 5.07 (6.20) 364,079 0.53 12.27 93
1999 4.33 (1.33) 279,683 0.53 14.05 48
2000(a)(b) 3.87 (3.21)(1) 228,554 0.54(2) 15.72(2) 6(1)
CLASS Y SHARES
2000(c) 3.88 0.32(1) 546 0.79(2) 21.68(2) 6(1)
UTILITIES
CLASS X SHARES
1995 14.68 28.65 479,070 0.68 4.00 13
1996 15.34 8.68 440,662 0.67 3.61 9
1997 18.59 27.15 458,134 0.67 3.48 13
1998 21.25 23.76 560,803 0.67 2.89 7
1999 22.90 12.71 580,487 0.67 2.51 10
2000(a)(b) 21.25 (0.08)(1) 553,546 0.66(2) 2.19(2) 5(1)
CLASS Y SHARES
2000(c) 21.25 (0.94)(1) 965 0.87(2) 0.98(2) 5(1)
</TABLE>
121
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
NET ASSET NET TOTAL
VALUE INVESTMENT NET REALIZED TOTAL FROM DISTRIBUTIONS DIVIDENDS
YEAR ENDED BEGINNING INCOME AND UNREALIZED INVESTMENT DIVIDENDS TO TO AND
DECEMBER 31 OF PERIOD (LOSS) GAIN (LOSS) OPERATIONS SHAREHOLDERS SHAREHOLDERS DISTRIBUTIONS
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME BUILDER
CLASS X SHARES
1997(d) $10.00 $ 0.44 $ 1.76 $ 2.20 $ (0.44) -- $ (0.44)
1998 11.76 0.56 (0.19) 0.37 (0.56) $ (0.11) (0.67)
1999 11.46 0.58 0.21 0.79 (0.56) (0.25)++ (0.81)
2000(a)(b) 11.44 0.28 (0.75) (0.47) (0.30) -- (0.30)
CLASS Y SHARES
2000(c) 11.32 0.06 (0.57) (0.51) (0.14) -- (0.14)
DIVIDEND GROWTH
CLASS X SHARES
1995 11.99 0.38 3.89 4.27 (0.41) (0.26) (0.67)
1996 15.59 0.41 3.22 3.63 (0.41) (0.41) (0.82)
1997 18.40 0.41 4.20 4.61 (0.41) (1.00) (1.41)
1998 21.60 0.41 2.58 2.99 (0.41) (2.05) (2.46)
1999 22.13 0.39 (0.55) (0.16) (0.39) (3.26) (3.65)
2000(a)(b) 18.32 0.19 (1.84) (1.65) (0.20) (3.82) (4.02)
CLASS Y SHARES
2000(c) 17.79 0.01 (1.25) (1.24) (0.09) (3.82) (3.91)
CAPITAL GROWTH
CLASS X SHARES
1995 11.52 0.10 3.68 3.78 (0.08) -- (0.08)
1996 15.22 0.08 1.65 1.73 (0.03) (0.27) (0.30)
1997 16.65 0.01 3.90 3.91 (0.08) (2.19) (2.27)
1998 18.29 (0.05) 3.59 3.54 -- (1.47) (1.47)
1999 20.36 -- 6.12 6.12 -- (2.75) (2.75)
2000 (a)(b) 23.73 0.04 0.74 0.78 -- (4.05) (4.05)
CLASS Y SHARES
2000(c) 24.55 0.02 (0.07) (0.05) -- (4.05) (4.05)
GLOBAL DIVIDEND GROWTH
CLASS X SHARES
1995 9.82 0.24 1.90 2.14 (0.26) (0.01) (0.27)
1996 11.69 0.24 1.75 1.99 (0.24) (0.31) (0.55)
1997 13.13 0.22 1.37 1.59 (0.23) (0.60) (0.83)
1998 13.89 0.24 1.45 1.69 (0.24) (1.52) (1.76)
1999 13.82 0.27 1.71 1.98 (0.29) (1.07) (1.36)
2000(a)(b) 14.44 0.15 (0.96) (0.81) (0.09) (1.22) (1.31)
CLASS Y SHARES
2000(c) 13.96 0.00 (0.42) (0.42) -- (1.22) (1.22)
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
122
<PAGE>
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS
----------------------------
NET ASSET NET ASSETS NET
VALUE END OF INVESTMENT PORTFOLIO
END OF TOTAL PERIOD INCOME TURNOVER
PERIOD RETURN+ (000'S) EXPENSES (LOSS) RATE
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCOME BUILDER
CLASS X SHARES
1997(d) $11.76 22.38%(1) $ 55,423 0.15%(2)(3) 5.73%(2)(3) 41%(1)
1998 11.46 3.21 87,769 0.81 5.09 54
1999 11.44 7.06 81,616 0.81 4.98 43
2000(a)(b) 10.67 (4.10)(1) 65,626 0.82(2) 5.08(2) 31(1)
CLASS Y SHARES
2000(c) 10.67 (3.09)(1) 48 1.06(2) 8.21(2) 31(1)
DIVIDEND GROWTH
CLASS X SHARES
1995 15.59 36.38 865,417 0.61 2.75 24
1996 18.40 23.96 1,288,404 0.57 2.46 23
1997 21.60 25.61 1,905,906 0.54 2.06 28
1998 22.13 14.28 2,249,927 0.53 1.85 45
1999 18.32 (2.39) 2,033,814 0.52 1.82 81
2000(a)(b) 12.65 (9.03)(1) 1,539,114 0.55(2) 2.19(2) 22(1)
CLASS Y SHARES
2000(c) 12.64 (6.93)(1) 1,586 0.80(2) 0.91(2) 22(1)
CAPITAL GROWTH
CLASS X SHARES
1995 15.22 32.92 66,995 0.74 0.70 34
1996 16.65 11.55 86,862 0.73 0.52 98
1997 18.29 24.54 127,100 0.71 0.01 139
1998 20.36 19.63 138,603 0.70 (0.26) 248
1999 23.73 33.29 171,251 0.72 0.02 575
2000 (a)(b) 20.46 3.30(1) 191,159 0.69(2) 0.36(2) 201(1)
CLASS Y SHARES
2000(c) 20.45 (0.19)(1) 604 0.91(2) 0.67(2) 201(1)
GLOBAL DIVIDEND GROWTH
CLASS X SHARES
1995 11.69 22.14 205,739 0.88 2.23 55
1996 13.13 17.49 334,821 0.85 1.94 39
1997 13.89 12.04 481,613 0.84 1.61 48
1998 13.82 12.53 484,228 0.84 1.68 52
1999 14.44 14.65 506,929 0.83 1.90 43
2000(a)(b) 12.32 (5.64)(1) 422,622 0.80(2) 2.26(2) 27(1)
CLASS Y SHARES
2000(c) 12.32 (3.00)(1) 229 1.05(2) 0.26(2) 27(1)
</TABLE>
123
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
NET ASSET NET TOTAL
VALUE INVESTMENT NET REALIZED TOTAL FROM DISTRIBUTIONS DIVIDENDS
YEAR ENDED BEGINNING INCOME AND UNREALIZED INVESTMENT DIVIDENDS TO TO AND
DECEMBER 31 OF PERIOD (LOSS) GAIN (LOSS) OPERATIONS SHAREHOLDERS SHAREHOLDERS DISTRIBUTIONS
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
EUROPEAN GROWTH
CLASS X SHARES
1995 $14.56 $ 0.20 $ 3.50 $ 3.70 $ (0.19)* $ (0.54) $ (0.73)
1996 17.53 0.17 4.91 5.08 (0.04) (1.01) (1.05)
1997 21.56 0.21 3.19 3.40 (0.24) (1.18) (1.42)
1998 23.54 0.15 5.53 5.68 (0.31) (1.73) (2.04)
1999 27.18 0.25 6.91 7.16 (0.19) (2.68) (2.87)
2000(a)(b) 31.47 0.13 (0.08) 0.05 (0.18) (4.62) (4.80)
CLASS Y SHARES
2000(c) 32.26 0.00 (0.74) (0.74) (0.18) (4.62) (4.80)
PACIFIC GROWTH
CLASS X SHARES
1995 9.26 0.12 0.41 0.53 (0.09) -- (0.09)
1996 9.70 0.05 0.32 0.37 (0.11) -- (0.11)
1997 9.96 0.12 (3.82) (3.70) (0.14) -- (0.14)
1998 6.12 0.06 (0.75) (0.69) (0.28) -- (0.28)
1999 5.15 0.04 3.33 3.37 (0.06) -- (0.06)
2000(a)(b) 8.46 0.00 (0.50) (0.50) (0.12) -- (0.12)
CLASS Y SHARES
2000 (c) 7.70 (0.01) 0.27 0.26 (0.12) -- (0.12)
EQUITY
CLASS X SHARES
1995 19.25 0.22 7.92 8.14 (0.25) -- (0.25)
1996 27.14 0.16 2.70 2.86 (0.16) (3.45) (3.61)
1997 26.39 0.18 9.27 9.45 (0.18) (2.08) (2.26)
1998 33.58 0.25 9.47 9.72 (0.25) (4.47) (4.72)
1999 38.58 0.22 20.48 20.70 (0.22) (5.18) (5.40)
2000(a)(b) 53.88 0.10 (3.69) (3.59) (0.10) (7.75) (7.85)
CLASS Y SHARES
2000(c) 49.12 0.00 1.16 1.16 (0.09) (7.75) (7.84)
S&P 500 INDEX
CLASS X SHARES
1998(e) 10.00 0.06 1.16 1.22 -- -- --
1999 11.22 0.06 2.21 2.27 (0.03) (0.03) (0.06)
2000(a)(b) 13.43 0.06 (0.14) (0.08) (0.07) (0.06) (0.13)
CLASS Y SHARES
2000(c) 13.47 0.01 (0.13) (0.12) (0.07) (0.06) (0.13)
COMPETITIVE EDGE "BEST IDEAS"
CLASS X SHARES
1998(e) 10.00 0.07 (0.25) (0.18) -- -- --
1999 9.82 0.06 2.56 2.62 (0.07) -- (0.07)
2000(a)(b) 12.37 0.05 (0.39) (0.34) (0.05) 0.00 (0.05)
CLASS Y SHARES
2000(c) 12.03 0.00 (0.01) (0.01) (0.05) 0.00 (0.05)
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
124
<PAGE>
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS
NET ASSET NET ASSETS ----------------------------
VALUE END OF NET PORTFOLIO
END OF TOTAL PERIOD INVESTMENT TURNOVER
PERIOD RETURN+ (000'S) EXPENSES INCOME RATE
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EUROPEAN GROWTH
CLASS X SHARES
1995 $17.53 25.89% $ 188,119 1.17% 1.25% 69%
1996 21.56 29.99 302,422 1.11 0.97 43
1997 23.54 16.07 391,441 1.12 1.04 45
1998 27.18 23.96 510,638 1.11 0.65 56
1999 31.47 29.11 579,705 1.04 0.87 55
2000(a)(b) 26.72 0.14(1) 579,549 0.99(2) 0.80(2) 33(1)
CLASS Y SHARES
2000(c) 26.72 (2.31)(1) 1,475 1.24(2) (0.26)(2) 33(1)
PACIFIC GROWTH
CLASS X SHARES
1995 9.70 5.74 98,330 1.44 1.23 53
1996 9.96 3.89 144,536 1.37 1.01 50
1997 6.12 (37.70) 68,904 1.44 1.09 58
1998 5.15 (10.40) 52,842 1.51 0.91 112
1999 8.46 66.09 115,927 1.42 0.85 105
2000(a)(b) 7.84 (6.29)(1) 106,354 1.22(2) (0.10)(2) 27(1)
CLASS Y SHARES
2000 (c) 7.84 3.33(1) 59 1.47(2) (1.26)(2) 27(1)
EQUITY
CLASS X SHARES
1995 27.14 42.53 359,779 0.54 0.97 269
1996 26.39 12.36 521,908 0.54 0.58 279
1997 33.58 37.43 823,090 0.52 0.61 145
1998 38.58 30.45 1,138,413 0.52 0.73 257
1999 53.88 58.59 2,083,071 0.51 0.54 323
2000(a)(b) 42.44 (6.67)(1) 2,009,874 0.50(2) 0.37(2) 219(1)
CLASS Y SHARES
2000(c) 42.44 2.35(1) 3,437 0.75(2) (0.13)(2) 219(1)
S&P 500 INDEX
CLASS X SHARES
1998(e) 11.22 12.20(1) 48,732 -- (4) 1.85(2)(4) 2(1)
1999 13.43 20.23 185,963 0.48(5) 1.03(5) 1
2000(a)(b) 13.22 (0.58)(1) 226,163 0.45(2) 0.90(2) 1(1)
CLASS Y SHARES
2000(c) 13.22 (0.88)(1) 1,658 0.70(2) 0.40(2) 1(1)
COMPETITIVE EDGE "BEST
IDEAS"
CLASS X SHARES
1998(e) 9.82 (1.90)(1) 36,539 -- (4) 1.74(2)(4) 31(1)
1999 12.37 26.88 62,295 0.56(5) 0.72(5) 54
2000(a)(b) 11.98 (2.78)(1) 81,797 0.70(2) 0.79(2) 43(1)
CLASS Y SHARES
2000(c) 11.97 (0.11)(1) 604 0.95(2) 0.24(2) 43(1)
</TABLE>
125
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
NET ASSET NET TOTAL
VALUE INVESTMENT NET REALIZED TOTAL FROM DISTRIBUTIONS DIVIDENDS
YEAR ENDED BEGINNING INCOME AND UNREALIZED INVESTMENT DIVIDENDS TO TO AND
DECEMBER 31 OF PERIOD (LOSS) GAIN (LOSS) OPERATIONS SHAREHOLDERS SHAREHOLDERS DISTRIBUTIONS
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
AGGRESSIVE EQUITY
CLASS X SHARES
1999(f) $10.00 $ 0.05 $ 4.55 $ 4.60 $ (0.03) -- $ (0.03)
2000(a)(b) 14.57 0.02 0.44 0.46 (0.01) -- (0.01)
CLASS Y SHARES
2000(c) 14.66 0.00 0.37 0.37 (0.01) -- (0.01)
STRATEGIST
CLASS X SHARES
1995 12.45 0.62 0.49 1.11 (0.67) $ (0.44) (1.11)
1996 12.45 0.43 1.39 1.82 (0.43) (0.12) (0.55)
1997 13.72 0.45 1.40 1.85 (0.45) (0.32) (0.77)
1998 14.80 0.36 3.40 3.76 (0.36) (1.56) (1.92)
1999 16.64 0.40 2.46 2.86 (0.40) -- (0.40)
2000(a)(b) 19.10 0.23 (0.08) 0.15 (0.23) (2.26) (2.49)
CLASS Y SHARES
2000(c) 19.29 0.04 (0.19) (0.15) (0.13) (2.26) (2.39)
</TABLE>
<TABLE>
<C> <S>
--------------------------------------------------------------------------------
(a) For six months ended June 30, 2000 (unaudited).
(b) Prior to June 6, 2000, the Fund issued one class of shares. All shares of
the Fund held prior to May 1, 2000 have been designated Class X shares.
(c) For the period June 6, 2000 (issued date) through June 30, 2000
(unaudited).
Commencement of operations:
(d) January 21, 1997.
(e) May 18, 1998.
(f) May 4, 1999.
+ Calculated based on the net asset value as of the last business day of the
period.
++ Includes distributions from paid-in-capital of $0.02.
* Includes dividends in excess of net investment income of $0.02.
(1) Not annualized.
(2) Annualized.
(3) If the Investment Manager had not assumed all expenses and waived its
management fee for the period January 21, 1997 through December 3, 1997 for
Income Builder, the ratios of expenses and net investment income to average
net assets would have been 0.99% and 4.89%, respectively.
(4) If the Investment Manager had not assumed all expenses and waived its
management fee for the period May 18, 1998 through December 31, 1998 for
Competitive Edge "Best Ideas" and S&P 500 Index, the ratios of expenses and
net investment income to average net assets would have been 0.92% and
0.83%, respectively, for Competitive Edge "Best Ideas" and 0.59% and 1.26%,
respectively, for S&P 500 Index.
(5) If the Investment Manager had not assumed all expenses and waived its
management fee for the period January 1, 1999 through April 30, 1999 for
Competitive Edge "Best Ideas" and for the period May 4, 1999 through
November 4, 1999 for Short-Term Bond and Aggressive Equity and for the
period January 1, 1999 through January 5, 1999 for S&P 500 Index and
"capped" the expenses of S&P 500 Index at 0.50% of its daily net assets for
the period January 6, 1999 through December 31, 1999, the ratio of expenses
and net investment income (loss) to average net assets would have been
0.77% and 0.51%, respectively for, Competitive Edge "Best Ideas", 2.38% and
3.07%, respectively for Short-Term Bond, 1.41% and (0.02)%, respectively,
for Aggressive Equity and 0.48% and 1.02%, respectively, for S&P 500 Index.
(6) Does not reflect the effect of expense offset of 0.04%.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
126
<PAGE>
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS
NET ASSET NET ASSETS ----------------------------
VALUE END OF NET PORTFOLIO
END OF TOTAL PERIOD INVESTMENT TURNOVER
PERIOD RETURN+ (000'S) EXPENSES INCOME RATE
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
AGGRESSIVE EQUITY
CLASS X SHARES
1999(f) $14.57 46.08%(1) $ 38,197 0.52%(2)(5) 0.86%(2)(5) 108%(1)
2000(a)(b) 15.02 3.13(1) 123,650 0.84(2) 0.22(2) 239(1)
CLASS Y SHARES
2000(c) 15.02 2.50(1) 1,278 1.09(2) (0.36)(2) 239(1)
STRATEGIST
CLASS X SHARES
1995 12.45 9.48 388,579 0.52 5.03 329
1996 13.72 15.02 423,768 0.52 3.30 153
1997 14.80 13.71 497,028 0.52 3.09 159
1998 16.64 26.55 633,934 0.52 2.32 84
1999 19.10 17.35 729,701 0.52 2.24 120
2000(a)(b) 16.76 0.78(1) 723,930 0.52(2) 2.45(2) 65(1)
CLASS Y SHARES
2000(c) 16.75 (0.79)(1) 1,784 0.77(2) 2.53(2) 65(1)
</TABLE>
127
<PAGE>
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
CHANGE IN INDEPENDENT ACCOUNTANTS
On July 1, 2000, PricewaterhouseCoopers LLP resigned as independent accountants
of the Fund.
The reports of PricewaterhouseCoopers LLP on the financial statements of the
Fund for the past two fiscal years contained no adverse opinion or disclaimer of
opinion and were not qualified or modified as to uncertainty, audit scope or
accounting principle.
In connection with its audits for the two most recent fiscal years and through
July 1, 2000, there have been no disagreements with PricewaterhouseCoopers LLP
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements if not resolved
to the satisfaction of PricewaterhouseCoopers LLP would have caused them to make
reference thereto in their report on the financial statements for such years.
The Fund, with the approval of its Board of Trustees and its Audit Committee,
engaged Deloitte & Touche LLP as its new independent accountants as of July 1,
2000.
128
<PAGE>
TRUSTEES
-------------------------------------------------------
Michael Bozic Dr. Manuel H. Johnson
Charles A. Fiumefreddo Michael E. Nugent
Edwin J. Garn Philip J. Purcell
Wayne E. Hedien John L. Schroeder
James F. Higgins
OFFICERS
-------------------------------------------------------
Charles A. Fiumefreddo
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Mitchell M. Merin
PRESIDENT
Barry Fink
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
Thomas F. Caloia
TREASURER
TRANSFER AGENT INDEPENDENT ACCOUNTANTS
-------------------------------------- --------------------------------------
Morgan Stanley Dean Witter Trust FSB Deloitte & Touche LLP
Harborside Financial Center--Plaza Two Two World Financial Center
Jersey City, New Jersey 07311 New York, New York 10281
INVESTMENT MANAGER
----------------------------------------
Morgan Stanley Dean Witter Advisors Inc.
Two World Trade Center
New York, New York 10048
SUB-ADVISOR
(EUROPEAN GROWTH AND PACIFIC GROWTH
PORTFOLIO)
----------------------------------------
Morgan Stanley Dean Witter Investment
Management Inc.
1221 Avenue of the Americas
New York, New York 10020
The financial statements included herein have been taken from the records of the
Fund without examination by the independent accountants and accordingly they do
not express an opinion thereon.
This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and trustees,
fees, expenses and other pertinent information, please see the prospectus of the
Fund.
This report is not authorized for distribution to prospective investors in the
Fund unless preceded or accompanied by an effective prospectus. Read the
prospectus carefully before investing.
Morgan Stanley Dean Witter Distributors Inc., member NASD.
<PAGE>
#40113A
