<PAGE> 1
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(212) 392-2550
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 19, 1998
TO THE SHAREHOLDERS OF DEAN WITTER GLOBAL ASSET ALLOCATION FUND:
Notice is hereby given of a Special Meeting of the Shareholders of Dean
Witter Global Asset Allocation Fund ("Dean Witter Global Asset") to be held in
the Career Development Room, Sixty-First Floor, Two World Trade Center, New
York, New York 10048, at 10:00 A.M., New York time, on August 19, 1998, and any
adjournments thereof (the "Meeting"), for the following purposes:
1. To consider and vote upon an Agreement and Plan of Reorganization, dated
April 30, 1998 (the "Reorganization Agreement"), between Dean Witter Global
Asset and Dean Witter Strategist Fund ("Dean Witter Strategist"), pursuant
to which substantially all of the assets of Dean Witter Global Asset would
be combined with those of Dean Witter Strategist and shareholders of Dean
Witter Global Asset would become shareholders of Dean Witter Strategist
receiving shares of Dean Witter Strategist with a value equal to the value
of their holdings in Dean Witter Global Asset (the "Reorganization"); and
2. To act upon such other matters as may properly come before the Meeting.
The Reorganization is more fully described in the accompanying Proxy
Statement and Prospectus and a copy of the Reorganization Agreement is attached
as Exhibit A thereto. Shareholders of record at the close of business on June 2,
1998 are entitled to notice of, and to vote at, the Meeting. Please read the
Proxy Statement and Prospectus carefully before telling us, through your proxy
or in person, how you wish your shares to be voted. THE BOARD OF TRUSTEES OF
DEAN WITTER GLOBAL ASSET RECOMMENDS YOU VOTE IN FAVOR OF THE REORGANIZATION. WE
URGE YOU TO SIGN, DATE AND MAIL THE ENCLOSED PROXY PROMPTLY.
By Order of the Board of Trustees,
Barry Fink,
Secretary
June 8, 1998
YOU CAN HELP AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP LETTERS TO
ENSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY. IF YOU ARE UNABLE TO
BE PRESENT IN PERSON, PLEASE FILL IN, SIGN AND RETURN THE ENCLOSED PROXY IN
ORDER THAT THE NECESSARY QUORUM BE REPRESENTED AT THE MEETING. THE ENCLOSED
ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE> 2
(THIS PAGE LEFT BLANK INTENTIONALLY.)
<PAGE> 3
DEAN WITTER STRATEGIST FUND
TWO WORLD TRADE CENTER, NEW YORK, NEW YORK 10048
(212) 392-2550
ACQUISITION OF THE ASSETS OF
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
BY AND IN EXCHANGE FOR SHARES OF
DEAN WITTER STRATEGIST FUND
This Proxy Statement and Prospectus is being furnished to shareholders of
Dean Witter Global Asset Allocation Fund ("Dean Witter Global Asset") in
connection with an Agreement and Plan of Reorganization, dated April 30, 1998
(the "Reorganization Agreement"), pursuant to which substantially all the assets
of Dean Witter Global Asset will be combined with those of Dean Witter
Strategist Fund ("Dean Witter Strategist") in exchange for shares of Dean Witter
Strategist. As a result of this transaction, shareholders of Dean Witter Global
Asset will become shareholders of Dean Witter Strategist and will receive shares
of Dean Witter Strategist with a value equal to the value of their holdings in
Dean Witter Global Asset. The terms and conditions of this transaction are more
fully described in this Proxy Statement and Prospectus and in the Reorganization
Agreement between Dean Witter Global Asset and Dean Witter Strategist, attached
hereto as Exhibit A. The address of Dean Witter Global Asset is that of Dean
Witter Strategist set forth above. This Proxy Statement also constitutes a
Prospectus of Dean Witter Strategist, which is dated June 3, 1998, filed by Dean
Witter Strategist with the Securities and Exchange Commission (the "Commission")
as part of its Registration Statement on Form N-14 (the "Registration
Statement").
Dean Witter Strategist is an open-end non-diversified management investment
company whose investment objective is to maximize total return on its
investments. The fund seeks to achieve its objective by actively allocating its
assets among the major asset categories of equity securities, fixed-income
securities and money market instruments.
This Proxy Statement and Prospectus sets forth concisely information about
Dean Witter Strategist that shareholders of Dean Witter Global Asset should know
before voting on the Reorganization Agreement. A copy of the Prospectus for Dean
Witter Strategist dated September 26, 1997, is attached as Exhibit B and
incorporated herein by reference. Also enclosed and incorporated herein by
reference is Dean Witter Strategist's Annual Report for the fiscal year ended
July 31, 1997 and the succeeding unaudited Semi-Annual Report for the six months
ended January 31, 1998. A Statement of Additional Information relating to the
Reorganization, described in this Proxy Statement and Prospectus (the
"Additional Statement"), dated June 3, 1998, has been filed with the Commission
and is also incorporated herein by reference. Also incorporated herein by
reference are Dean Witter Global Asset's Prospectus, dated March 2, 1998, and
Annual Report for its fiscal year ended January 31, 1998. Such documents are
available without charge by calling (212) 392-2550 or (800) 526-3143 (TOLL
FREE).
Investors are advised to read and retain this Proxy Statement and Prospectus for
future reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THIS PROXY STATEMENT AND PROSPECTUS IS DATED JUNE 3, 1998.
<PAGE> 4
TABLE OF CONTENTS
PROXY STATEMENT AND PROSPECTUS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INTRODUCTION................................................ 1
General................................................ 1
Record Date; Share Information......................... 1
Proxies................................................ 2
Expenses of Solicitation............................... 3
Vote Required.......................................... 3
SYNOPSIS.................................................... 3
The Reorganization..................................... 4
Fee Table.............................................. 4
Hypothetical Expenses.................................. 7
Tax Consequences of the Reorganization................. 8
Comparison of Dean Witter Global Asset and Dean Witter
Strategist............................................ 8
PRINCIPAL RISK FACTORS...................................... 11
THE REORGANIZATION.......................................... 12
The Proposal........................................... 12
The Board's Consideration.............................. 13
The Reorganization Agreement........................... 14
Tax Aspects of the Reorganization...................... 15
Description of Shares.................................. 17
Capitalization Table (unaudited)....................... 17
Appraisal Rights....................................... 17
COMPARISON OF INVESTMENT OBJECTIVES, POLICIES AND
RESTRICTIONS.............................................. 18
Investment Objectives and Policies..................... 18
Investment Restrictions................................ 20
ADDITIONAL INFORMATION ABOUT DEAN WITTER GLOBAL ASSET AND
DEAN WITTER STRATEGIST.................................... 20
General................................................ 20
Financial Information.................................. 20
Management............................................. 20
Description of Securities and Shareholder Inquiries.... 21
Dividends, Distributions and Taxes..................... 21
Purchases, Repurchases and Redemptions................. 21
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE................. 21
FINANCIAL STATEMENTS AND EXPERTS............................ 21
LEGAL MATTERS............................................... 21
AVAILABLE INFORMATION....................................... 21
OTHER BUSINESS.............................................. 22
Exhibit A - Agreement and Plan of Reorganization, dated
April 30, 1998, by and between Dean Witter Global Asset
and Dean Witter Strategist................................ A-1
</TABLE>
<PAGE> 5
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(212) 392-2550
------------------------------
PROXY STATEMENT AND PROSPECTUS
------------------------------
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 19, 1998
INTRODUCTION
GENERAL
This Proxy Statement and Prospectus is being furnished to the shareholders
of Dean Witter Global Asset Allocation Fund ("Dean Witter Global Asset"), an
open-end diversified management investment company, in connection with the
solicitation by the Board of Trustees of Dean Witter Global Asset (the "Board")
of proxies to be used at the Special Meeting of Shareholders of Dean Witter
Global Asset to be held in the Career Development Room, Sixty-First Floor, Two
World Trade Center, New York, New York 10048 at 10:00 A.M., New York time, on
August 19, 1998, and any adjournments thereof (the "Meeting"). It is expected
that the mailing of this Proxy Statement and Prospectus will be made on or about
June 8, 1998.
At the Meeting, Dean Witter Global Asset shareholders ("Shareholders") will
consider and vote upon an Agreement and Plan of Reorganization, dated April 30,
1998 (the "Reorganization Agreement"), between Dean Witter Global Asset and Dean
Witter Strategist Fund ("Dean Witter Strategist") pursuant to which
substantially all of the assets of Dean Witter Global Asset will be combined
with those of Dean Witter Strategist in exchange for shares of Dean Witter
Strategist. As a result of this transaction, Shareholders will become
shareholders of Dean Witter Strategist and will receive shares of Dean Witter
Strategist equal to the value of their holdings in Dean Witter Global Asset on
the date of such transaction (the "Reorganization"). Pursuant to the
Reorganization, each Shareholder will receive the class of shares of Dean Witter
Strategist that corresponds to the class of shares of Dean Witter Global Asset
currently held by that Shareholder. Accordingly, as a result of the
Reorganization, each Class A, Class B, Class C and Class D Shareholder of Dean
Witter Global Asset will receive Class A, Class B, Class C and Class D shares of
Dean Witter Strategist, respectively. The shares to be issued by Dean Witter
Strategist pursuant to the Reorganization (the "Dean Witter Strategist Shares")
will be issued at net asset value without an initial sales charge. Further
information relating to Dean Witter Strategist is set forth herein and in Dean
Witter Strategist's current Prospectus, dated September 26, 1997 ("Dean Witter
Strategist's Prospectus"), attached to this Proxy Statement and Prospectus and
incorporated herein by reference.
The information concerning Dean Witter Global Asset contained herein has
been supplied by Dean Witter Global Asset and the information concerning Dean
Witter Strategist contained herein has been supplied by Dean Witter Strategist.
RECORD DATE; SHARE INFORMATION
The Board has fixed the close of business on June 2, 1998 as the record
date (the "Record Date") for the determination of the Shareholders entitled to
notice of, and to vote at, the Meeting. As of the Record Date, there
1
<PAGE> 6
were 4,066,249.623 shares of Dean Witter Global Asset issued and outstanding.
Shareholders on the Record Date are entitled to one vote per share on each
matter submitted to a vote at the Meeting. A majority of the outstanding shares
entitled to vote, represented in person or by proxy, will constitute a quorum at
the Meeting.
The following persons were known to own of record or beneficially 5% or
more of the outstanding shares of a Class of Dean Witter Global Asset as of the
Record Date: Class A -- Beatus Pension Trust, BL Beatus MD Trustee, 55 Humphreys
Center, Suite 300, Memphis, TN 38120-2353 (13,115.8 shares); Morgan Stanley Dean
Witter Trust FSB, Trustee for Louise Mullins Hamer, for benefit of Virginia L.
Morgenroth, P.O. Box 503, Jersey City, NJ 07311 (2,075.4 shares); Morgan Stanley
Dean Witter Trust FSB, Trustee for Mortimer R. Platt IV, for benefit of John H.
Platt, P.O. Box 503, Jersey City, NJ 07311 (7,036.7 shares). Class C -- Dean
Witter InterCapital Inc., Attn: Maurice Bendrihem, 2 World Trade Center, New
York, NY 10048-0230 (813.3 shares); Donald F. Griffone Sr. Trustee, Donald F.
Griffone Living Trust, 5521 Washington Street, Downers Grove, IL 60516-1328
(1,683.3 shares); James Piccione, 1040 Aberdeen, Inverness, IL 60067 (8,058
shares). Class D -- Dean Witter InterCapital Inc., Attn: Maurice Bendrihem, 2
World Trade Center, New York, NY 10048-0230 (813.2 shares); David R. Dyroff, 15
Woodoaks Trail, Ladue, MO 63124-1159 (1,067.4 shares). As of the Record Date,
the trustees and officers of Dean Witter Global Asset, as a group, owned less
than 1% of the outstanding shares of Dean Witter Global Asset.
The following persons were known to own of record or beneficially 5% or
more of the outstanding shares of a Class of Dean Witter Strategist as of the
Record Date: Class A -- Morgan Stanley Dean Witter Trust FSB as Trustee for
Fenner Inc. (130,475.4 shares) and as Trustee for West Coast Beauty Supply Co.
Retirement Savings Plan (78,244.5 shares), P.O. Box 957, Jersey City, NJ
07303-0957. Class C -- Smith Mullin P.C., Attn: Nancy Erika Smith or Neil
Mullin, 240 Claremont Avenue, Montclair, NJ 07042-2830 (38,808.5 shares). Class
D -- MAC & Co, Mellon Bank N.A. Mutual Funds, P.O. Box 3198, Pittsburgh, PA
15230-3198 (1,209,475.7 shares); Morgan Stanley Dean Witter Trust FSB as Trustee
for Pizzagalli Construction, P.O. Box 957, Jersey City, NJ 07303-0957 (360,612.6
shares). As of the Record Date, the trustees and officers of Dean Witter
Strategist, as a group, owned less than 1% of the outstanding shares of Dean
Witter Strategist.
PROXIES
The enclosed form of proxy, if properly executed and returned, will be
voted in accordance with the choice specified thereon. The proxy will be voted
in favor of the Reorganization Agreement unless a choice is indicated to vote
against or to abstain from voting on the Reorganization Agreement. The Board
knows of no business, other than that set forth in the Notice of Special Meeting
of Shareholders, to be presented for consideration at the Meeting. However, the
proxy confers discretionary authority upon the persons named therein to vote as
they determine on other business, not currently contemplated, which may come
before the Meeting. Abstentions and, if applicable, broker "non-votes" will not
count as votes in favor of the Reorganization Agreement, and broker "non-votes"
will not be deemed to be present at the meeting for purposes of determining
whether the Reorganization Agreement has been approved. Broker "non-votes" are
shares held in street name for which the broker indicates that instructions have
not been received from the beneficial owners or other persons entitled to vote
and for which the broker does not have discretionary voting authority. If a
Shareholder executes and returns a proxy but fails to indicate how the votes
should be cast, the proxy will be voted in favor of the Reorganization
Agreement. The proxy may be revoked at any time prior to the voting thereof by:
(i) delivering written notice of revocation to the Secretary of Dean Witter
Global Asset at Two World Trade Center, New York, New York 10048; (ii) attending
the Meeting and voting in person; or (iii) signing and returning a new proxy (if
returned and received in time to be voted). Attendance at the Meeting will not
in and of itself revoke a proxy.
2
<PAGE> 7
In the event that the necessary quorum to transact business or the vote
required to approve or reject the Reorganization Agreement is not obtained at
the Meeting, the persons named as proxies may propose one or more adjournments
of the Meeting to permit further solicitation of proxies. Any such adjournment
will require the affirmative vote of the holders of a majority of shares of Dean
Witter Global Asset present in person or by proxy at the Meeting. The persons
named as proxies will vote in favor of such adjournment those proxies which they
are entitled to vote in favor of the Reorganization Agreement and will vote
against any such adjournment those proxies required to be voted against the
Reorganization Agreement.
EXPENSES OF SOLICITATION
All expenses of this solicitation, including the cost of preparing and
mailing this Proxy Statement and Prospectus, will be borne by Dean Witter Global
Asset which expenses are expected to approximate $78,000. Dean Witter Global
Asset and Dean Witter Strategist will bear all of their respective other
expenses associated with the Reorganization. In addition to the solicitation of
proxies by mail, proxies may be solicited by officers of Dean Witter Global
Asset, and officers and regular employees of Dean Witter InterCapital Inc.
("InterCapital" or the "Investment Manager") and Morgan Stanley Dean Witter
Trust FSB ("MSDW Trust"), personally or by mail, telephone, telegraph or
otherwise, without compensation therefor. Brokerage houses, banks and other
fiduciaries may be requested to forward soliciting material to the beneficial
owners of shares and to obtain authorization for the execution of proxies.
MSDW Trust, an affiliate of InterCapital, may call Shareholders to ask if
they would be willing to have their votes recorded by telephone. The telephone
voting procedure is designed to authenticate Shareholders' identities, to allow
Shareholders to authorize the voting of their shares in accordance with their
instructions and to confirm that their instructions have been recorded properly.
No recommendation will be made as to how a Shareholder should vote on the
Reorganization Agreement other than to refer to the recommendation of the Board.
Dean Witter Global Asset has been advised by counsel that these procedures are
consistent with the requirements of applicable law. Shareholders voting by
telephone will be asked for their social security number or other identifying
information and will be given an opportunity to authorize proxies to vote their
shares in accordance with their instructions. To ensure that the Shareholders'
instructions have been recorded correctly they will receive a confirmation of
their instructions in the mail. A special toll-free number will be available in
case the information contained in the confirmation is incorrect. Although a
Shareholder's vote may be taken by telephone, each Shareholder will receive a
copy of this Proxy Statement and Prospectus and may vote by mail using the
enclosed proxy card.
VOTE REQUIRED
Approval of the Reorganization Agreement by the Shareholders requires the
affirmative vote of a majority (i.e., more than 50%) of the shares of Dean
Witter Global Asset represented in person or by proxy and entitled to vote at
the Meeting, provided a quorum is present at the Meeting. If the Reorganization
Agreement is not approved by Shareholders, Dean Witter Global Asset will
continue in existence and the Board will consider alternative actions.
SYNOPSIS
The following is a synopsis of certain information contained in or
incorporated by reference in this Proxy Statement and Prospectus. This synopsis
is only a summary and is qualified in its entirety by the more detailed
information contained or incorporated by reference in this Proxy Statement and
Prospectus and the Reorganization Agreement. Shareholders should carefully
review this Proxy Statement and Prospectus and The Reorganization
3
<PAGE> 8
Agreement in their entirety and, in particular, Dean Witter Strategist's
Prospectus, which is attached to this Proxy Statement and incorporated herein by
reference.
THE REORGANIZATION
The Reorganization Agreement provides for the transfer of substantially all
the assets of Dean Witter Global Asset, subject to stated liabilities, to Dean
Witter Strategist in exchange for the Dean Witter Strategist Shares. The
aggregate net asset value of the Dean Witter Strategist Shares issued in the
exchange will equal the aggregate value of the net assets of Dean Witter Global
Asset received by Dean Witter Strategist . On or after the closing date
scheduled for the Reorganization (the "Closing Date"), Dean Witter Global Asset
will distribute the Dean Witter Strategist Shares received by Dean Witter Global
Asset to Shareholders as of the Valuation Date (as defined below under "The
Reorganization Agreement") in complete liquidation of Dean Witter Global Asset
and Dean Witter Global Asset will thereafter be dissolved and deregistered under
the Investment Company Act of 1940, as amended (the "1940 Act"). As a result of
the Reorganization, each Shareholder will receive that number of full and
fractional Dean Witter Strategist Shares equal in value to such Shareholder's
pro rata interest in the net assets of Dean Witter Global Asset transferred to
Dean Witter Strategist. Pursuant to the Reorganization, each Shareholder will
receive the class of shares of Dean Witter Strategist that corresponds to the
class of shares of Dean Witter Global Asset currently held by that Shareholder.
Accordingly, as a result of the Reorganization, each Class A, Class B, Class C
and Class D Shareholder of Dean Witter Global Asset will become holders of Class
A, Class B, Class C and Class D shares of Dean Witter Strategist, respectively.
Shareholders holding their shares of Dean Witter Global Asset in certificate
form will be asked to surrender their certificates in connection with the
Reorganization. Shareholders who do not surrender their certificates prior to
the Closing Date will still receive their shares of Dean Witter Strategist;
however, such Shareholders will not be able to redeem, transfer or exchange the
Dean Witter Strategist Shares received until the old certificates have been
surrendered. The Board has determined that the interests of Shareholders will
not be diluted as a result of the Reorganization.
FOR THE REASONS SET FORTH BELOW UNDER "THE REORGANIZATION -- THE BOARD'S
CONSIDERATION," THE BOARD, INCLUDING THE TRUSTEES WHO ARE NOT "INTERESTED
PERSONS" OF DEAN WITTER GLOBAL ASSET ("INDEPENDENT TRUSTEES"), AS THAT TERM IS
DEFINED IN THE 1940 ACT, HAS CONCLUDED THAT THE REORGANIZATION IS IN THE BEST
INTERESTS OF DEAN WITTER GLOBAL ASSET AND ITS SHAREHOLDERS AND RECOMMENDS
APPROVAL OF THE REORGANIZATION AGREEMENT.
FEE TABLE
Dean Witter Global Asset and Dean Witter Strategist each pay expenses for
management of their assets, distribution of their shares and other services, and
those expenses are reflected in the net asset value per share of each fund. On
July 28, 1997, each of Dean Witter Global Asset and Dean Witter Strategist began
offering its shares in multiple classes, each with a different combination of
sales charges, ongoing fees and other features. The following table illustrates
expenses and fees that each class of shares of Dean Witter Global Asset incurred
during the fund's fiscal year ended January 31, 1998 adjusted, with respect to
Class A, Class C and Class D shares of the fund, for the shareholder transaction
expenses and 12b-1 fees in effect for such classes as of July 28, 1997. With
respect to Dean Witter Strategist, the table sets forth expenses and fees based
on the fund's July 31, 1997 fiscal year end, adjusted, with respect to Class A,
Class C and Class D shares of the fund, for the shareholder transaction expenses
and 12b-1 fees in effect for such classes as of July 28, 1997. The table also
sets forth pro forma fees for the surviving combined fund (Dean Witter
Strategist) reflecting what the fee schedule would have been on January 31,
1998, if the Reorganization had been consummated twelve (12) months prior to
that date.
4
<PAGE> 9
Shareholder Transaction Expenses
<TABLE>
<CAPTION>
DEAN WITTER DEAN WITTER PRO FORMA
GLOBAL ASSET STRATEGIST COMBINED
------------ ----------- ---------
<S> <C> <C> <C>
MAXIMUM SALES CHARGE IMPOSED ON PURCHASES
(AS A PERCENTAGE OF OFFERING PRICE)
Class A..................................................... 5.25%(1) 5.25%(1) 5.25%(1)
Class B..................................................... none none none
Class C..................................................... none none none
Class D..................................................... none none none
MAXIMUM SALES CHARGE IMPOSED ON REINVESTED DIVIDENDS
Class A..................................................... none none none
Class B..................................................... none none none
Class C..................................................... none none none
Class D..................................................... none none none
MAXIMUM CONTINGENT DEFERRED SALES CHARGE (AS A PERCENTAGE OF
THE LESSER OF ORIGINAL PURCHASE PRICE OR REDEMPTION
PROCEEDS)
Class A..................................................... none(2) none(2) none(2)
Class B..................................................... 5.00%(3) 5.00%(3) 5.00%(3)
Class C..................................................... 1.00%(4) 1.00%(4) 1.00%(4)
Class D..................................................... none none none
REDEMPTION FEES
Class A..................................................... none none none
Class B..................................................... none none none
Class C..................................................... none none none
Class D..................................................... none none none
EXCHANGE FEE
Class A..................................................... none none none
Class B..................................................... none none none
Class C..................................................... none none none
Class D..................................................... none none none
</TABLE>
Annual Fund Operating Expenses As a Percentage of Average Net Assets
<TABLE>
<CAPTION>
DEAN WITTER DEAN WITTER PRO FORMA
GLOBAL ASSET STRATEGIST COMBINED
------------ ----------- ---------
<S> <C> <C> <C>
MANAGEMENT AND ADVISORY FEE
Class A..................................................... 1.00% 0.56% 0.55%(5)
Class B..................................................... 1.00% 0.56% 0.55%(5)
Class C..................................................... 1.00% 0.56% 0.55%(5)
Class D..................................................... 1.00% 0.56% 0.55%(5)
12b-1 FEES(6)(7)(8)
Class A..................................................... 0.25% 0.25% 0.25%
Class B..................................................... 0.94% 0.90%(8) 0.90%
Class C..................................................... 1.00% 1.00% 1.00%
Class D..................................................... none none none
</TABLE>
5
<PAGE> 10
<TABLE>
<CAPTION>
DEAN WITTER DEAN WITTER PRO FORMA
GLOBAL ASSET STRATEGIST COMBINED
------------ ----------- ---------
<S> <C> <C> <C>
OTHER EXPENSES
Class A..................................................... 0.71% 0.11% 0.12%
Class B..................................................... 0.71% 0.11% 0.12%
Class C..................................................... 0.71% 0.11% 0.12%
Class D..................................................... 0.71% 0.11% 0.12%
TOTAL FUND OPERATING EXPENSES
Class A..................................................... 1.96% 0.92% 0.92%
Class B..................................................... 2.65% 1.57% 1.57%
Class C..................................................... 2.71% 1.67% 1.67%
Class D..................................................... 1.71% 0.67% 0.67%
</TABLE>
- ---------------
(1) Reduced for purchases of $25,000 and over (see "Purchase of Fund
Shares -- Initial Sales Charge Alternative -- Class A Shares" in each
fund's Prospectus).
(2) Investments that are not subject to any sales charge at the time of purchase
are subject to a Contingent Deferred Sales Charge ("CDSC") of 1.00% that
will be imposed on redemptions made within one year after purchase, except
for certain specific circumstances (see "Purchases, Exchanges and
Redemptions" below and "Purchase of Fund Shares -- Initial Sales Charge
Alternative -- Class A Shares" in each fund's Prospectus).
(3) The CDSC is scaled down to 1.00% during the sixth year, reaching zero
thereafter.
(4) Only applicable to redemptions made within one year after purchase (see
"Purchases, Exchanges and Redemptions" below and "Purchase of Fund
Shares -- Level Load Alternative -- Class C Shares" in each fund's
Prospectus).
(5) This rate reflects the anticipated lower advisory fee of Dean Witter
Strategist obtained by the effect of having additional assets at a lower
breakpoint in the advisory fee upon the combination of the two funds based
upon Dean Witter Global Asset's average net assets for the year ended
January 31, 1998 and Dean Witter Strategist's average net assets for the
twelve months ended January 31, 1998, thus, a scaling down of the advisory
fee to the effective advisory fee rate shown.
(6) The 12b-1 fee is accrued daily and payable monthly. With respect to each
fund, the entire 12b-1 fee payable by Class A and a portion of the 12b-1
fee payable by each of Class B and Class C equal to 0.25% of the average
daily net assets of the class are currently characterized as a service fee
within the meaning of National Association of Securities Dealers, Inc.
("NASD") guidelines and are payments made for personal service and/ or
maintenance of shareholder accounts. The remainder of the 12b-1 fee, if
any, is an asset-based sales charge, and is a distribution fee paid to Dean
Witter Distributors Inc. (the "Distributor") to compensate it for the
services provided and the expenses borne by the Distributor and others in
the distribution of each fund's shares (see "Description of Shares" below
and "Purchase of Fund Shares -- Plan of Distribution" in each fund's
Prospectus).
(7) Upon conversion of Class B shares to Class A shares, such shares will be
subject to the lower 12b-1 fee applicable to Class A shares. No sales
charge is imposed at the time of conversion of Class B shares to Class A
shares. Class C shares do not have a conversion feature and, therefore, are
subject to an ongoing 1.00% 12b-1 fee (see "Description of Shares" below
and "Purchase of Fund Shares -- Alternative Purchase Arrangements" in each
fund's Prospectus).
(8) The 12b-1 fee has been restated to reflect what the fee would have been if
the shares that were designated Class D shares on July 28, 1997 had not
been included in Dean Witter Strategist during the fiscal year ended July
31, 1997. The actual 12b-1 fee was 0.89%.
6
<PAGE> 11
HYPOTHETICAL EXPENSES
To attempt to show the effect of these expenses on an investment over time,
the hypotheticals shown below have been created. Assuming that an investor makes
a $1,000 investment in either Dean Witter Global Asset or Dean Witter Strategist
or the new combined fund (Dean Witter Strategist), that the annual return is 5%
and that the operating expenses for each fund are the ones shown in the chart
above, if the investment was redeemed at the end of each period shown below, the
investor would incur the following expenses by the end of each period shown:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Dean Witter Global Asset
Class A............................................... $71 $111 $153 $269
Class B............................................... $77 $112 $161 $298
Class C............................................... $37 $ 84 $143 $304
Class D............................................... $17 $ 54 $ 93 $202
Dean Witter Strategist
Class A............................................... $61 $ 80 $101 $159
Class B............................................... $66 $ 80 $106 $187
Class C............................................... $27 $ 53 $ 91 $197
Class D............................................... $ 7 $ 21 $ 37 $ 83
Pro Forma Combined
Class A............................................... $61 $ 80 $101 $159
Class B............................................... $66 $ 80 $106 $187
Class C............................................... $27 $ 53 $ 91 $197
Class D............................................... $ 7 $ 21 $ 37 $ 83
</TABLE>
If such investment was not redeemed, the investor would incur the following
expenses:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Dean Witter Global Asset
Class A............................................... $71 $111 $153 $269
Class B............................................... $27 $ 82 $141 $298
Class C............................................... $27 $ 84 $143 $304
Class D............................................... $17 $ 54 $ 93 $202
Dean Witter Strategist
Class A............................................... $61 $ 80 $101 $159
Class B............................................... $16 $ 50 $ 86 $187
Class C............................................... $17 $ 53 $ 91 $197
Class D............................................... $ 7 $ 21 $ 37 $ 83
Pro Forma Combined
Class A............................................... $61 $ 80 $101 $159
Class B............................................... $16 $ 50 $ 86 $187
Class C............................................... $17 $ 53 $ 91 $197
Class D............................................... $ 7 $ 21 $ 37 $ 83
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR PERFORMANCE. ACTUAL OPERATING EXPENSES MAY BE GREATER OR LESS
THAN THOSE SHOWN. LONG-TERM SHAREHOLDERS OF CLASS A, CLASS B
7
<PAGE> 12
AND CLASS C SHARES OF DEAN WITTER GLOBAL ASSET AND DEAN WITTER STRATEGIST MAY
PAY MORE IN SALES CHARGES INCLUDING DISTRIBUTION FEES THAN THE ECONOMIC
EQUIVALENT OF THE MAXIMUM FRONT-END SALES CHARGES PERMITTED BY THE NASD.
TAX CONSEQUENCES OF THE REORGANIZATION
As a condition to the Reorganization, Dean Witter Global Asset will receive
an opinion of Gordon Altman Butowsky Weitzen Shalov & Wein to the effect that
the Reorganization will constitute a tax-free reorganization for Federal income
tax purposes, and that no gain or loss will be recognized by Dean Witter Global
Asset or the shareholders of Dean Witter Global Asset for Federal income tax
purposes as a result of the transactions included in the Reorganization. For
further information about the tax consequences of the Reorganization, see "The
Reorganization -- Tax Aspects of the Reorganization" below.
COMPARISON OF DEAN WITTER GLOBAL ASSET AND DEAN WITTER STRATEGIST
INVESTMENT OBJECTIVES AND POLICIES. Dean Witter Global Asset and Dean
Witter Strategist each are funds which allocate their assets among asset
categories of equity securities, fixed-income securities and money market
instruments. The investment objective of Dean Witter Global Asset is to seek
long-term total return on its investments. The investment objective of Dean
Witter Strategist is to maximize the total return on its investments. Both funds
seek to achieve their objective through an asset allocation investment policy
among asset categories of equity securities, fixed-income securities and money
market instruments. Dean Witter Global Asset may invest its assets in any
combination of U.S. and foreign equity, debt and money market securities and,
under normal market conditions, the fund will have at least 65% of its total
asset invested in securities issued in at least three separate countries
(including the U.S.). Dean Witter Strategist may also invest its assets in any
combination or amount of equity and debt securities and money market instruments
but not more than 20% of its total assets may be invested in securities issued
by foreign issuers and foreign governments and not more than 10% of its total
assets may be invested in securities denominated in foreign currencies. Dean
Witter Strategist is a non-diversified investment company and, as such, may
invest a greater portion of its assets in the securities of a single issuer as
more fully described under "Principal Risk Factors" below. The processes by
which each fund allocates its assets may differ and are fully described under
"Comparison of Investment Objectives, Policies and Restrictions" below.
The investment policies of both funds are similar; the principal
differences between them are more fully described under "Comparison of
Investment Objectives, Policies and Restrictions" below.
The investment policies of both Dean Witter Global Asset and Dean Witter
Strategist are not fundamental and may be changed by their respective Boards of
Trustees.
INVESTMENT MANAGEMENT AND DISTRIBUTION PLAN FEES. Dean Witter Global Asset
obtains management services from InterCapital, and sub-advisory investment
services from Morgan Grenfell Investment Services Limited ("Morgan Grenfell")
pursuant to a sub-advisory agreement (the "Sub-Advisory Agreement"). Morgan
Grenfell, subject to the overall supervision of the Investment Manager and the
Trustees of Dean Witter Global Asset, assists the Investment Manager in
determining the asset allocations of Dean Witter Global Asset, and manages the
portion of Dean Witter Global Asset's portfolio invested in securities issued by
issuers located outside of the Western Hemisphere. Prior to March 1998, TCW
Funds Management, Inc. ("TCW"), a wholly-owned subsidiary of the TCW Group,
Inc., served as a sub-adviser to Dean Witter Global Asset pursuant to a
sub-advisory agreement between InterCapital and TCW relating to the portion of
Dean Witter Global Asset's portfolio invested in securities of issuers located
in Canada and Latin America. In October 1997, TCW indicated its intention to
resign as sub-adviser. Prior to November 6, 1997, InterCapital informed the
Board of Trustees of its intention to
8
<PAGE> 13
assume the investment management function performed by TCW. On November 6, 1997,
the Board approved the submission to shareholders for approval at a special
meeting of shareholders of a new Investment Management Agreement between Dean
Witter Global Asset and InterCapital. The new Investment Management Agreement
clarified InterCapital's ability to manage all or part of Dean Witter Global
Asset's portfolio itself, rather than through a sub-adviser. Dean Witter Global
Asset's shareholders approved the new Investment Management Agreement at a
meeting held on February 26, 1998. TCW's resignation and the new Investment
Management Agreement became effective on March 2, 1998.
As compensation for such management services, Dean Witter Global Asset pays
InterCapital monthly compensation calculated daily by applying the annual rate
of 1.0% to the fund's average daily net assets. As compensation for the services
provided pursuant to the Sub-Advisory Agreement between InterCapital and Morgan
Grenfell, InterCapital pays Morgan Grenfell monthly compensation equal to 30% of
the monthly compensation which InterCapital receives from the fund. Dean Witter
Strategist also obtains investment management services from InterCapital. As
compensation for such services, Dean Witter Strategist pays InterCapital monthly
compensation calculated daily by applying the annual rate of 0.60% to the fund's
average daily net assets not exceeding $500 million; 0.55% to the portion of
such daily net assets exceeding $500 million, but not exceeding $1 billion;
0.50% to the portion of such daily net assets exceeding $1 billion, but not
exceeding $1.5 billion; 0.475% to the portion of such daily net assets exceeding
$1.5 billion but not exceeding $2 billion; and 0.45% to the portion of such
daily net assets exceeding $2 billion. Each class of both funds' shares is
subject to the same management fee rates applicable to the respective fund.
Both Dean Witter Global Asset and Dean Witter Strategist have adopted
identical distribution plans ("Plans") pursuant to Rule 12b-1 under the 1940
Act. In the case of Class A and Class C shares, each fund's Plan provides that
the fund will reimburse the Distributor and others for the expenses of certain
activities and services incurred by them in connection with the distribution of
the Class A and Class C Shares of each fund. Reimbursement for these expenses is
made in monthly payments by each fund to the Distributor which will in no event
exceed amounts equal to payments at the annual rates of 0.25% and 1.0% of the
average daily net assets of Class A and Class C shares, respectively. In the
case of Class B shares, Dean Witter Global Asset's Plan provides that the fund
will pay the Distributor a fee, which is accrued daily and paid monthly, at the
annual rate of 1.0% of the lesser of (a) the average daily net sales of the
fund's Class B shares or (b) the average daily net assets of Class B of the
fund. In the case of Dean Witter Strategist's Class B shares, Dean Witter
Strategist's Plan provides that the fund will pay the Distributor a fee, which
is accrued daily and paid monthly, at the annual rate of (i) 1.0% of the lesser
of (a) the average daily net sales of the fund's Class B shares since the
implementation of the Plan on November 8, 1989 or (b) the average daily net
assets of Class B attributable to shares issued, net of related shares redeemed,
since implementation of the 12b-1 Plan, plus (ii) 0.25% of the average daily net
assets of Class B attributable to shares issued, net of related shares redeemed,
prior to implementation of the 12b-1 Plan. The fee is paid for the services
provided and the expenses borne by the Distributor and others in connection with
the distribution of each fund's Class B shares. There are no 12b-1 fees
applicable to both funds' Class D shares. For further information relating to
the 12b-1 fees applicable to each class of Dean Witter Strategist's shares, see
the section entitled "Purchase of Fund Shares" in Dean Witter Strategist's
Prospectus, attached hereto. The Distributor also receives the proceeds of any
contingent deferred sales charge ("CDSC") paid by the funds' shareholders at the
time of redemption. The CDSC schedules applicable to each of Dean Witter Global
Asset and Dean Witter Strategist are set forth below under "Purchases, Exchanges
and Redemptions." The excess of the Distributor's expenses over the amounts it
receives in annual 12b-1 fees and CDSCs is referred to by the Distributor as
"carryover charges." The 12b-1 Plan of Dean Witter Strategist permits the
carryover charges of Dean Witter Global Asset's Class B shares to remain as
Class B carryover charges after the Reorganization and accordingly such
carryover charges will become carryover charges of
9
<PAGE> 14
Dean Witter Strategist after the Reorganization. These carryover charges do not
appear as an expense or liability of either fund nor do they enter into the
calculation of net asset value or 12b-1 fees of either fund.
OTHER SIGNIFICANT FEES. Both Dean Witter Global Asset and Dean Witter
Strategist pay additional fees in connection with their operations, including
legal, auditing, transfer agent, trustees fees and custodial fees. See
"Synopsis -- Fee Table" above for the percentage of average net assets
represented by such "Other Expenses."
PURCHASES, EXCHANGES AND REDEMPTIONS. Class A shares of each fund are sold
at net asset value plus an initial sales charge of up to 5.25%. The initial
sales charge is reduced for certain purchases. Investments of $1 million or more
(and investment by certain other limited categories of investors) are not
subject to any sales charges at the time of purchase, but are subject to a CDSC
of 1.0% on redemptions made within one year after purchase (except for certain
specific circumstances fully described in each fund's Prospectus).
Class B shares of each fund are offered at net asset value with no initial
sales charge, but are subject to the same CDSC schedule set forth below (Class B
shares of each fund purchased by certain qualified employer sponsored benefit
plans are subject to a reduced CDSC schedule):
<TABLE>
<CAPTION>
CLASS B SHARES OF DEAN WITTER GLOBAL ASSET AND
YEAR SINCE PURCHASE PAYMENT MADE DEAN WITTER STRATEGIST
- -------------------------------------------- ----------------------------------------------
<S> <C>
First....................................... 5.0%
Second...................................... 4.0%
Third....................................... 3.0%
Fourth...................................... 2.0%
Fifth....................................... 2.0%
Sixth....................................... 1.0%
Seventh and thereafter...................... none
</TABLE>
Class C shares of each fund are sold at net asset value with no initial
sales charge, but are subject to a CDSC of 1.0% on redemptions made within one
year after purchase. The CDSC may be waived for certain redemptions (which are
fully described in each fund's Prospectus).
Class D shares of each fund are available only to limited categories of
investors and are sold at net asset value with no initial sales charge or CDSC.
The CDSC charge is paid to the Distributor. Shares of Dean Witter
Strategist and Dean Witter Global Asset are distributed by the Distributor and
offered by Dean Witter Reynolds Inc. and other dealers who have entered into
selected dealer agreements with the Distributor. For further information
relating to the CDSC schedules applicable to each of the classes of Dean Witter
Strategist's shares, see the section entitled "Purchase of Fund Shares" in Dean
Witter Strategist's Prospectus.
Shares of each class of Dean Witter Global Asset and Dean Witter Strategist
may be exchanged for shares of the same class of any other Dean Witter Fund that
offers its shares in more than one class, without the imposition of an exchange
fee. Additionally, shares of each class of Dean Witter Global Asset and Dean
Witter Strategist may be exchanged for shares of Dean Witter Short-Term U.S.
Treasury Trust, Dean Witter Limited Term Municipal Trust, Dean Witter Short-Term
Bond Fund, Dean Witter Intermediate Term U.S. Treasury Trust and the five Dean
Witter Funds that are money market funds (the foregoing nine funds are
collectively referred to as the "Exchange Funds"), without the imposition of an
exchange fee. Class A shares of Dean Witter Global Asset and Dean Witter
Strategist may also be exchanged for shares of Dean Witter Multi-State Municipal
Series Trust and Dean Witter Hawaii Municipal Trust, and Class B shares of Dean
Witter Global Asset and Dean Witter Strategist may also be
10
<PAGE> 15
exchanged for shares of Dean Witter Global Short-Term Income Fund Inc., all
without the imposition of an exchange fee. Upon consummation of the
Reorganization, the foregoing exchange privileges will still be applicable to
shareholders of the combined fund (Dean Witter Strategist).
With respect to both funds, no CDSC is imposed at the time of any exchange,
although any applicable CDSC will be imposed upon ultimate redemption. During
the period of time a Dean Witter Strategist or Dean Witter Global Asset
shareholder remains in an Exchange Fund, the holding period (for purposes of
determining the CDSC rate) is frozen. Both Dean Witter Global Asset and Dean
Witter Strategist provide telephone exchange privileges to their shareholders.
For greater details relating to exchange privileges applicable to Dean Witter
Strategist, see the section entitled "Shareholder Services" in Dean Witter
Strategist's Prospectus.
Shareholders of Dean Witter Global Asset and Dean Witter Strategist may
redeem their shares for cash at any time at the net asset value per share next
determined; however, such redemption proceeds may be reduced by the amount of
any applicable CDSC. Both Dean Witter Global Asset and Dean Witter Strategist
offer a reinstatement privilege whereby a shareholder who has not previously
exercised such privilege whose shares have been redeemed or repurchased may,
within thirty-five days after the date of redemption or repurchase, reinstate
any portion or all of the proceeds thereof in shares of the same class from
which such shares were redeemed or repurchased and receive a pro rata credit for
any CDSC paid in connection with such redemption or repurchase. Dean Witter
Global Asset and Dean Witter Strategist may redeem involuntarily, at net asset
value, most accounts valued at less than $100.
DIVIDENDS. Each fund declares dividends separately for each of its
classes. Dean Witter Global Asset pays dividends at least once per year from the
net investment income of the fund and Dean Witter Strategist pays quarterly
dividends from the net investment income of the fund. Both funds distribute net
short-term and long-term capital gains, if any, at least annually. Each fund,
however, may determine either to distribute or to retain all or part of any net
long-term capital gains in any year for reinvestment. With respect to each fund,
dividends and capital gains distributions are automatically reinvested in
additional shares of the same class of shares of the fund at net asset value
unless the shareholder elects to receive cash.
PRINCIPAL RISK FACTORS
The net asset value of Dean Witter Strategist and Dean Witter Global Asset
will fluctuate with changes in the market value of their respective portfolio
securities. The market value of the funds' portfolio securities will increase or
decrease due to a variety of economic, market and political factors, including
movements in interest rates, which cannot be predicted. All fixed-income
securities are subject to two types of risk: credit risk and interest rate risk.
Credit risk relates to the ability of the issuer to meet interest or principal
payments or both as they come due. Interest rate risk refers to the fluctuations
in the net asset value of any portfolio of fixed-income securities resulting
from the inverse relationship between price and yield of fixed-income
securities; that is, when the general level of interest rates rises, the prices
of outstanding fixed-income securities decline, and when interest rates fall,
prices rise. With respect to fixed-income securities, both funds may invest
their assets in investment grade fixed-income securities rated Baa or higher by
Moody's Investors Service, Inc. ("Moody's") or BBB or higher by Standard &
Poor's Corporation ("S&P") (or, additionally, in the case of Dean Witter Global
Asset, rated investment grade by a nationally recognized statistical rating
organization ("NRSRO"), or, if not rated, are determined to be of comparable
quality by the Investment Manager and/or Sub-Adviser. However, Dean Witter
Global Asset may invest up to 10% of its total assets in fixed-income securities
(including convertible securities) which are rated below investment grade by a
NRSRO or which are unrated. Fixed-income securities rated Baa by Moody's or BBB
by S&P, while considered investment grade, have speculative characteristics
greater than those of more highly rated bonds and fixed-income securities rated
Ba or BB or lower by Moody's and S&P, respectively, are considered to be
11
<PAGE> 16
speculative investments and changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity to make principal
and interest payments than in the case of securities with higher ratings.
Both funds may invest all or a portion (up to 20% for Dean Witter
Strategist) of their assets in foreign securities and, as such, are subject to
additional risks such as adverse political and economic developments abroad,
including the possibility of expropriations or confiscatory taxation,
limitations on the use or transfer of fund assets and any effects of foreign
social, economic or political instability. Foreign companies are not subject to
the regulatory requirements of U.S. companies and, as such, there may be less
publicly available information about such companies. Moreover, foreign companies
are not subject to uniform accounting, auditing and financial reporting
standards and requirements comparable to those applicable to U.S. companies.
Additionally, securities of foreign issuers may be less liquid than comparable
securities of U.S. issuers and, as such, their price changes may be more
volatile. Furthermore, foreign exchanges and broker-dealers are generally
subject to less government and exchange scrutiny and regulation than their
American counterparts and brokerage commissions, dealer concessions and other
transaction costs may be higher on foreign markets than in the U.S. Fluctuations
in the relative rates of exchange between the currencies of different countries
will affect the value of a fund's investments. Changes in foreign currency
exchange rates relative to the U.S. dollar will affect the U.S. dollar value of
a fund's assets denominated in that currency and thereby impact upon the fund's
total return on such assets.
Dean Witter Strategist is a non-diversified investment company and, as
such, is not subject to the diversification requirements of the Investment
Company Act of 1940 (the "Act"). As a non-diversified investment company, the
Fund may invest a greater portion of its assets in the securities of a single
issuer and thus is subject to greater exposure to risks such as a decline in the
credit rating of that issuer. However, the fund has qualified and intends to
continue to qualify as a regulated investment company under the federal income
tax laws and, if so qualified, will be subject to the applicable diversification
requirements of the Internal Revenue Code (the "Code"). As a regulated
investment company under the Code, the Fund may not, as of the end of any of its
fiscal quarters, have invested more than 25% of its total assets in the
securities of any one issuer (including a foreign government), or as to 50% of
its total assets, have invested more than 5% of its total assets in the
securities of a single issuer.
Dean Witter Global Asset may enter into foreign currency exchange contracts
as a hedge against fluctuations in future foreign exchange rates, and both funds
may enter into repurchase agreements, and reverse repurchase agreements, may
purchase securities on a when-issued and delayed delivery basis, or on a when,
as and if issued basis, may lend their portfolio securities, and may enter into
options and futures transactions for hedging purposes, all of which involve
certain special risks.
The foregoing discussion is a summary of the principal risk factors. For a
more complete discussion of the risks of each fund, see "Investment Objective
and Policies -- Risk Considerations" in the Prospectus of Dean Witter Global
Asset and "Investment Objective and Policies" in Dean Witter Strategist's
Prospectus attached hereto and incorporated herein by reference.
THE REORGANIZATION
THE PROPOSAL
The Board of Trustees of Dean Witter Global Asset, including the
Independent Trustees, having reviewed the financial position of Dean Witter
Global Asset and the prospects for achieving economies of scale through the
Reorganization and having determined that the Reorganization is in the best
interests of Dean Witter Global Asset and its Shareholders and that the
interests of Shareholders will not be diluted as a result thereof, recommends
approval of the Reorganization by Shareholders of Dean Witter Global Asset.
12
<PAGE> 17
THE BOARD'S CONSIDERATION
At a meeting held on April 30, 1998, the Board, including all of the
Independent Trustees, unanimously approved the Reorganization Agreement and
determined to recommend that Shareholders approve the Reorganization Agreement.
In reaching this decision, the Board made an extensive inquiry into a number of
factors, particularly the comparative expenses currently incurred in the
operations of Dean Witter Global Asset and Dean Witter Strategist. The Board
also considered other factors, including, but not limited to: the comparative
investment performance and past growth in assets of Dean Witter Global Asset and
Dean Witter Strategist; the compatibility of the investment objectives,
policies, restrictions and portfolios of Dean Witter Global Asset and Dean
Witter Strategist; the terms and conditions of the Reorganization which would
affect the price of shares to be issued in the Reorganization; the tax-free
nature of the Reorganization; and any direct or indirect costs to be incurred by
Dean Witter Global Asset and Dean Witter Strategist in connection with the
Reorganization.
In recommending the Reorganization to Shareholders, the Board of Dean
Witter Global Asset considered that the Reorganization would have the following
benefits to Shareholders:
1. Once the Reorganization is consummated, the expenses which would be
borne by shareholders of each class of the "combined fund" should be lower on a
percentage basis than the actual expenses per share of each corresponding class
of Dean Witter Global Asset. In part, this is because the current rate of the
investment management fee payable by the surviving Dean Witter Strategist fund
(0.55% of average daily net assets) would be lower than the rate of the
investment management fee currently paid by Dean Witter Global Asset (1.0% of
average daily net assets). Furthermore, to the extent that the Reorganization
would result in Shareholders becoming shareholders of a combined larger fund,
further economies of scale could be achieved since various fixed expenses (e.g.,
auditing and legal) can be spread over a larger number of shares. The Board
noted that the expense ratio for each class of Dean Witter Global Asset was
higher (for its fiscal year ended January 31, 1998) than the expense ratio for
each class of Dean Witter Strategist (for the fiscal year ended July 31, 1997).
2. Shareholders would have a continued participation in a fund with an
asset allocation strategy through investment in Dean Witter Strategist, which
has a similar investment objective to that of Dean Witter Global Asset.
3. The Board also considered that the assets of Dean Witter Strategist have
continued to increase and grew from approximately $1,259,304,733 at July 31,
1996 to $1,599,011,147 at July 31, 1997, its past fiscal year end. By
comparison, the assets of Dean Witter Global Asset declined during its past
fiscal year from approximately $65,313,790 at January 31, 1997 to $52,471,537 at
January 31, 1998. The Board noted that the assets of Dean Witter Global Asset
may continue to decline and considered the adverse effects that a shrinking
asset base is likely to have on expenses and performance.
4. The Reorganization will constitute a tax-free reorganization for Federal
income tax purposes, and no gain or loss will be recognized by Dean Witter
Global Asset or its Shareholders for Federal income tax purposes as a result of
transactions included in the Reorganization.
The Board of Trustees of Dean Witter Strategist, including a majority of
the Independent Trustees of Dean Witter Strategist, also have determined that
the Reorganization is in the best interests of Dean Witter Strategist and its
shareholders and that the interests of existing shareholders of Dean Witter
Strategist will not be diluted as a result thereof. The transaction will enable
Dean Witter Strategist to acquire investment securities which are consistent
with Dean Witter Strategist's investment objective, without the brokerage costs
attendant to the purchase of such securities in the market. Also, the addition
of assets to Dean Witter Strategist's portfolio may result in a further
reduction in the investment management fee resulting from the addition of more
assets at a lower breakpoint
13
<PAGE> 18
rate in the fee schedule. Finally, the Board considered that even if the
benefits enumerated above are not realized, the costs to the Fund are
sufficiently minor to warrant taking the opportunity to realize those benefits.
THE REORGANIZATION AGREEMENT
The terms and conditions under which the Reorganization would be
consummated, as summarized below, are set forth in the Reorganization Agreement.
This summary is qualified in its entirety by reference to the Reorganization
Agreement, a copy of which is attached as Exhibit A to this Proxy Statement and
Prospectus.
The Reorganization Agreement provides that (i) Dean Witter Global Asset
will transfer all of its assets, including portfolio securities, cash (other
than cash amounts retained by Dean Witter Global Asset as a "Cash Reserve" in
the amount sufficient to discharge its liabilities not discharged prior to the
Valuation Date (as defined below) and for expenses of the dissolution), cash
equivalents and receivables to Dean Witter Strategist on the Closing Date in
exchange for the assumption by Dean Witter Strategist of stated liabilities of
Dean Witter Global Asset, including all expenses, costs, charges and reserves,
as reflected on an unaudited statement of assets and liabilities of Dean Witter
Global Asset prepared by the Treasurer of Dean Witter Global Asset as of the
Valuation Date (as defined below) in accordance with generally accepted
accounting principles consistently applied from the prior audited period, and
the delivery of Dean Witter Strategist Shares; (ii) such Dean Witter Strategist
Shares would be distributed to Shareholders on the Closing Date or as soon as
practicable thereafter; (iii) Dean Witter Global Asset would be dissolved; and
(iv) the outstanding shares of Dean Witter Global Asset would be canceled.
The number of Dean Witter Strategist Shares to be delivered to Dean Witter
Global Asset will be determined by dividing the aggregate net asset value of
each class of shares of Dean Witter Global Asset acquired by Dean Witter
Strategist by the net asset value per share of the corresponding class of shares
of Dean Witter Strategist; these values will be calculated as of the close of
business of the New York Stock Exchange on the third business day following the
receipt of the requisite approval by Shareholders of the Reorganization
Agreement or at such other time as Dean Witter Global Asset and Dean Witter
Strategist may agree (the "Valuation Date"). As an illustration, assume that on
the Valuation Date, Class B shares of Dean Witter Global Asset had an aggregate
net asset value (not including any Cash Reserve of Dean Witter Global Asset) of
$100,000. If the net asset value per Class B share of Dean Witter Strategist
were $10 per share at the close of business on the Valuation Date, the number of
Class B shares to be issued would be 10,000 ($100,000 / $10). These 10,000 Class
B shares of Dean Witter Strategist would be distributed to the former Class B
shareholders of Dean Witter Global Asset. This example is given for illustration
purposes only and does not bear any relationship to the dollar amounts or shares
expected to be involved in the Reorganization.
On the Closing Date or as soon as practicable thereafter, Dean Witter
Global Asset will distribute pro rata to its Shareholders of record as of the
close of business on the Valuation Date, the Dean Witter Strategist Shares it
receives. Each Shareholder will receive the class of shares of Dean Witter
Strategist that corresponds to the class of shares of Dean Witter Global Asset
currently held by that Shareholder. Accordingly, the Dean Witter Strategist
Shares will be distributed as follows: each of the Class A, Class B, Class C and
Class D shares of Dean Witter Strategist will be distributed to holders of Class
A, Class B, Class C and Class D shares of Dean Witter Global Asset,
respectively. Dean Witter Strategist will cause its transfer agent to credit and
confirm an appropriate number of Dean Witter Strategist Shares to each
Shareholder. Certificates for Dean Witter Strategist Shares will be issued only
upon written request of a Shareholder and only for whole shares, with fractional
shares credited to the name of the Shareholder on the books of Dean Witter
Strategist. Shareholders who wish to receive certificates representing their
Dean Witter Strategist Shares must, after receipt of their confirmations, make a
written request to Dean Witter Strategist's transfer agent Morgan Stanley Dean
Witter Trust FSB, Harborside Financial Center, Jersey City, New Jersey 07311.
Shareholders of Dean Witter Global Asset holding their shares in certificate
form will be
14
<PAGE> 19
asked to surrender such certificates in connection with the Reorganization.
Shareholders who do not surrender their certificates prior to the Closing Date
will still receive their shares of Dean Witter Strategist; however, such
Shareholders will not be able to redeem, transfer or exchange the Dean Witter
Strategist Shares received until the old certificates have been surrendered.
The Closing Date will be the next business day following the Valuation
Date. The consummation of the Reorganization is contingent upon the approval of
the Reorganization by the Shareholders and the receipt of the other opinions and
certificates set forth in Sections 6, 7 and 8 of the Reorganization Agreement
and the occurrence of the events described in those Sections, certain of which
may be waived by Dean Witter Global Asset or Dean Witter Strategist. The
Reorganization Agreement may be amended in any mutually agreeable manner, except
that no amendment may be made subsequent to the Meeting which would
detrimentally affect the value of the shares of Dean Witter Strategist to be
distributed. All expenses of this solicitation, including the cost of preparing
and mailing this Proxy Statement and Prospectus, will be borne by Dean Witter
Global Asset, which expenses are expected to approximate $78,000. Dean Witter
Global Asset and Dean Witter Strategist will bear all of their respective other
expenses associated with the Reorganization.
The Reorganization Agreement may be terminated and the Reorganization
abandoned at any time, before or after approval by Shareholders or by mutual
consent of Dean Witter Global Asset and Dean Witter Strategist. In addition,
either party may terminate the Reorganization Agreement upon the occurrence of a
material breach of the Reorganization Agreement by the other party or if, by
November 30, 1998, any condition set forth in the Reorganization Agreement has
not been fulfilled or waived by the party entitled to its benefits.
Under the Reorganization Agreement, within one year after the Closing Date,
Dean Witter Global Asset shall: either pay or make provision for all of its
liabilities and distribute any remaining amount of the Cash Reserve (after
paying or making provision for such liabilities and the estimated cost of making
the distribution) to former shareholders of Dean Witter Global Asset that
received Dean Witter Strategist Shares. Dean Witter Global Asset shall be
dissolved and deregistered as an investment company promptly following the
distributions of shares of Dean Witter Strategist to Shareholders of record of
Dean Witter Global Asset.
The effect of the Reorganization is that Shareholders who vote their shares
in favor of the Reorganization Agreement are electing to sell their shares of
Dean Witter Global Asset (at net asset value on the Valuation Date calculated
after subtracting any Cash Reserve) and reinvest the proceeds in Dean Witter
Strategist Shares at net asset value and without recognition of taxable gain or
loss for Federal income tax purposes. See "Tax Aspects of the Reorganization"
below. As noted in "Tax Aspects of the Reorganization" below, if Dean Witter
Global Asset recognizes net gain from the sale of securities prior to the
Closing Date, such gain, to the extent not offset by capital loss carryforwards,
will be distributed to Shareholders prior to the Closing Date and will be
taxable to Shareholders as capital gain.
Shareholders will continue to be able to redeem their shares of Dean Witter
Global Asset at net asset value next determined after receipt of the redemption
request (subject to any applicable CDSC) until the close of business on the
business day next preceding the Closing Date. Redemption requests received by
Dean Witter Global Asset thereafter will be treated as requests for redemption
of shares of Dean Witter Strategist.
TAX ASPECTS OF THE REORGANIZATION
At least one but not more than 20 business days prior to the Valuation
Date, Dean Witter Global Asset will declare and pay a dividend or dividends
which, together with all previous such dividends, will have the effect of
distributing to Shareholders all of Dean Witter Global Asset's investment
company taxable income for all periods since the inception of Dean Witter Global
Asset through and including the Valuation Date (computed without
15
<PAGE> 20
regard to any dividends paid deduction), and all of Dean Witter Global Asset's
net capital gain, if any, realized in such periods (after reduction for any
capital loss carryforward).
The Reorganization is intended to qualify for Federal income tax purposes
as a tax-free reorganization under Section 368(a)(1)(C) of the Internal Revenue
Code of 1986, as amended (the "Code"). Dean Witter Global Asset and Dean Witter
Strategist have represented that, to their best knowledge, there is no plan or
intention by Shareholders to redeem, sell, exchange or otherwise dispose of a
number of Dean Witter Strategist Shares received in the transaction that would
reduce Shareholders' ownership of Dean Witter Strategist Shares to a number of
shares having a value, as of the Closing Date, of less than 50% of the value of
all of the formerly outstanding Dean Witter Global Asset shares as of the same
date. Dean Witter Global Asset and Dean Witter Strategist have each further
represented that, as of the Closing Date, Dean Witter Global Asset and Dean
Witter Strategist will qualify as regulated investment companies.
As a condition to the Reorganization, Dean Witter Global Asset and Dean
Witter Strategist will receive an opinion of Gordon Altman Butowsky Weitzen
Shalov & Wein that, based on certain assumptions, facts, the terms of the
Reorganization Agreement and additional representations set forth in the
Reorganization Agreement or provided by Dean Witter Global Asset and Dean Witter
Strategist:
1. The transfer of substantially all of Dean Witter Global Asset's assets
in exchange for the Dean Witter Strategist Shares and the assumption by Dean
Witter Strategist of certain stated liabilities of Dean Witter Global Asset
followed by the distribution by Dean Witter Global Asset of the Dean Witter
Strategist Shares to Shareholders in exchange for their Dean Witter Global Asset
shares will constitute a "reorganization" within the meaning of Section
368(a)(1)(C) of the Code, and Dean Witter Global Asset and Dean Witter
Strategist will each be a "party to a reorganization" within the meaning of
Section 368(b) of the Code;
2. No gain or loss will be recognized by Dean Witter Strategist upon the
receipt of the assets of Dean Witter Global Asset solely in exchange for the
Dean Witter Strategist Shares and the assumption by Dean Witter Strategist of
the stated liabilities of Dean Witter Global Asset;
3. No gain or loss will be recognized by Dean Witter Global Asset upon the
transfer of the assets of Dean Witter Global Asset to Dean Witter Strategist in
exchange for the Dean Witter Strategist Shares and the assumption by Dean Witter
Strategist of the stated liabilities or upon the distribution of Dean Witter
Strategist Shares to Shareholders in exchange for their Dean Witter Global Asset
shares;
4. No gain or loss will be recognized by Shareholders upon the exchange of
the shares of Dean Witter Global Asset for the Dean Witter Strategist Shares;
5. The aggregate tax basis for the Dean Witter Strategist Shares received
by each of the Shareholders pursuant to the Reorganization will be the same as
the aggregate tax basis of the shares in Dean Witter Global Asset held by each
such Shareholder immediately prior to the Reorganization;
6. The holding period of the Dean Witter Strategist Shares to be received
by each Shareholder will include the period during which the shares in Dean
Witter Global Asset surrendered in exchange therefor were held (provided such
shares in Dean Witter Global Asset were held as capital assets on the date of
the Reorganization);
7. The tax basis of the assets of Dean Witter Global Asset acquired by Dean
Witter Strategist will be the same as the tax basis of such assets to Dean
Witter Global Asset immediately prior to the Reorganization; and
8. The holding period of the assets of Dean Witter Global Asset in the
hands of Dean Witter Strategist will include the period during which those
assets were held by Dean Witter Global Asset.
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<PAGE> 21
SHAREHOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE EFFECT, IF
ANY, OF THE PROPOSED TRANSACTION IN LIGHT OF THEIR INDIVIDUAL CIRCUMSTANCES.
BECAUSE THE FOREGOING DISCUSSION ONLY RELATES TO THE FEDERAL INCOME TAX
CONSEQUENCES OF THE PROPOSED TRANSACTION, SHAREHOLDERS SHOULD ALSO CONSULT THEIR
TAX ADVISORS AS TO STATE AND LOCAL TAX CONSEQUENCES, IF ANY, OF THE PROPOSED
TRANSACTION.
DESCRIPTION OF SHARES
Dean Witter Strategist shares to be issued pursuant to the Reorganization
Agreement will, when issued, be fully paid and non-assessable by Dean Witter
Strategist and transferable without restrictions and will have no preemptive
rights. Class B shares of Dean Witter Strategist, like Class B shares of Dean
Witter Global Asset, have a conversion feature pursuant to which approximately
ten (10) years after the date of the original purchase of such shares, the
shares will convert automatically to Class A shares, based on the relative net
asset values of the two classes. For greater details regarding the conversion
feature, including the method by which the 10 year period is calculated and the
treatment of reinvested dividends, see "Purchase of Fund Shares" in each fund's
Prospectus.
CAPITALIZATION TABLE (UNAUDITED)
The following table sets forth the capitalization of Dean Witter Strategist
and Dean Witter Global Asset as of January 31, 1998 and on a pro forma combined
basis as if the Reorganization had occurred on that date:
<TABLE>
<CAPTION>
NET ASSET
SHARES VALUE
CLASS A NET ASSETS OUTSTANDING PER SHARE
- ----------------------------------------------------- ---------- ----------- ---------
<S> <C> <C> <C>
Dean Witter Global Asset............................. $ 26,956 2,344 $11.50
Dean Witter Strategist............................... $ 19,436,107 1,077,245 $18.04
Combined Fund (pro forma)............................ $ 19,463,063 1,078,739 $18.04
CLASS B
- -----------------------------------------------------
Dean Witter Global Asset............................. $ 52,374,341 4,568,443 $11.46
Dean Witter Strategist............................... $1,507,103,949 83,545,891 $18.04
Combined Fund (pro forma)............................ $1,559,478,290 86,449,125 $18.04
NET ASSET
SHARES VALUE
CLASS C NET ASSETS OUTSTANDING PER SHARE
- ----------------------------------------------------- -------------- ---------- ------
Dean Witter Global Asset............................. $ 53,358 4,660 $11.45
Dean Witter Strategist............................... $ 3,006,533 166,851 $18.02
Combined Fund (pro forma)............................ $ 3,059,891 169,812 $18.02
CLASS D
- -----------------------------------------------------
Dean Witter Global Asset............................. $ 16,882 1,467 $11.51
Dean Witter Strategist............................... $ 57,066,917 3,160,930 $18.05
Combined Fund (pro forma)............................ $ 57,083,799 3,161,865 $18.05
</TABLE>
APPRAISAL RIGHTS
Shareholders will have no appraisal rights in connection with the
Reorganization.
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<PAGE> 22
COMPARISON OF INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
INVESTMENT OBJECTIVES AND POLICIES
Dean Witter Global Asset and Dean Witter Strategist each are funds which
allocate their assets among asset categories of equity securities, fixed-income
securities, and money market instruments. The investment objective of Dean
Witter Global Asset is long-term total return on its investments. The investment
objective of Dean Witter Strategist is to maximize the total return on its
investments. Dean Witter Global Asset seeks to achieve its objective through a
managed investment policy utilizing a portfolio of U.S. and foreign equity, debt
and money market securities. Dean Witter Strategist seeks to achieve its
objective by actively allocating its assets among major asset categories of
equity securities, fixed-income securities and money market instruments.
Dean Witter Strategist actively allocates its assets to the equity, debt
and money market sectors of the market as opposed to relying solely on just one
market. At times, the equity market may hold a higher potential return than the
debt market and would warrant a higher asset allocation. The reverse would be
true when the bond market potential return is higher. Short duration bonds and
money market instruments can be used to soften market declines when both bonds
and equities are fully priced. Within the equity sector, the fund may purchase
equity securities (including convertible debt obligations and convertible
preferred stock) sold on the New York, American and other stock exchanges and in
the over-the-counter market. Fixed-income securities in which the Fund may
invest are short-term to intermediate (one to five year maturities) and
intermediate to long-term (greater than five year maturities) debt securities
and preferred stocks, including U.S. Government securities (securities issued or
guaranteed as to principal and interest by the United States or its agencies and
instrumentalities) and corporate securities which are rated at the time of
purchase Baa or better by Moody's or BBB or better by S&P, or which, if unrated,
are deemed to be of comparable quality. The money market portion of the Fund's
portfolio may contain short-term (maturities of up to thirteen months)
fixed-income securities, issued by private and governmental institutions. Such
securities may include: U.S. Government securities; bank obligations; Eurodollar
certificates of deposit issued by foreign branches of domestic banks;
obligations of savings institutions; fully insured certificates of deposit; and
commercial paper rated within the two highest grades by S&P or the highest grade
by Moody's or, if not rated, issued by a company having an outstanding debt
issue rated at least AA by S&P or Aa by Moody's.
Dean Witter Global Asset allocates and periodically reallocates the
composition of its assets based upon an overall evaluation by the Investment
Manager and Sub-Adviser of global monetary, economic and financial market trends
and the anticipated relative total return on securities available in different
capital markets around the world. Therefore, at any given time, the Fund's
assets may be invested in any amounts of either U.S. or foreign equity or
fixed-income (including money market) securities, or in any combination thereof.
Under normal circumstances, the Fund will have at least 65% of its total assets
invested in securities issued in at least three separate countries (including
the U.S.). Within the equity sector, the fund may purchase equity securities
(including convertible debt obligations and, except for certain foreign
jurisdictions, convertible preferred stock) sold on the New York, American and
other domestic and foreign stock exchanges and in the over-the-counter market.
The fixed-income securities in which the fund may invest include debt securities
with maturities of greater than one year, which are issued or guaranteed by the
U.S. Government and its agencies or instrumentalities, by foreign governments
(including foreign states, provinces and municipalities) and agencies or
instrumentalities thereof and debt securities and preferred stocks issued by
U.S. and foreign corporations and other similar business entities. The fund may
also invest in fixed-income securities issued or guaranteed by international
organizations designed or supported by multiple governmental entities (which are
not obligations of the U.S. Government or foreign governments) to promote
economic reconstruction or development such as the International Bank for
Reconstruction and Development (the "World Bank"). Generally, the fixed-income
securities (including "convertible" securities, see below) in which the Fund may
invest will be rated at the time of their purchase, BBB or better by S&P or Baa
or better by
18
<PAGE> 23
Moody's, or investment grade by a NRSRO, or which, if unrated, are deemed to be
of comparable quality by the fund's Investment Manager and/or Sub-Adviser.
However, the fund may invest up to 10% of its total assets in fixed-income
securities (including convertible securities) which are rated below investment
grade by a NRSRO or which are unrated. The money market portion of the fund's
portfolio may contain short-term (maturities of up to thirteen months)
fixed-income securities, issued by private and governmental institutions. Such
securities may include: U.S. and foreign government securities; domestic and
foreign bank obligations; certificates of deposit issued by foreign and domestic
banks; obligations of savings institutions; fully insured certificates of
deposit; and commercial paper rated within the two highest grades by S&P or the
highest grade by Moody's or, if not rated, issued by a company having an
outstanding debt issue rated at least AA by S&P or Aa by Moody's. Also included
within the money market sector are repurchase agreements and reverse repurchase
agreements with maturities of under thirteen months.
Both funds may invest their assets in foreign securities, including
securities of foreign issuers in the form of American Depository Receipts
("ADRs") or European Depository Receipts ("EDRs") although Dean Witter
Strategist may only invest up to 20% of its total assets in foreign securities
and may not invest more than 10% of its total assets in securities denominated
in foreign currencies; Dean Witter Global Asset has no such limitations and
under normal market conditions, at least 65% of its total assets will be
invested in at least three separate countries (including the U.S.).
Additionally, Dean Witter Global Asset may enter into forward foreign currency
exchange contracts in connection with its foreign securities investments as a
hedge against fluctuations in future foreign exchange rates.
Both Dean Witter Global Asset and Dean Witter Strategist may purchase and
sell (write) options on portfolio securities denominated in U.S. dollars and may
purchase and sell (write) options on the U.S. dollar which are or may be in the
future listed on U.S. and foreign securities exchanges or are written in
over-the-counter transactions ("OTC options"). Additionally, Dean Witter Global
Asset may purchase and sell (write) options on portfolio securities denominated
in foreign currencies in the manner set forth above. Both funds may write
covered call options on such securities without limit, in order to hedge against
the decline in the value of a security or currency (in the case of Dean Witter
Global Asset) in which such security is denominated, to earn additional income
and or to close out long call option positions. Both funds also may purchase
listed and OTC call and put options in amounts equaling up to 5% of their
respective total assets. Both funds may purchase call and put options to close
out covered call or written put positions, as applicable, or to protect the
value of the relevant security. Both funds may purchase and sell futures
contracts that are currently traded, or may in the future be traded, on U.S. and
foreign commodity exchanges on underlying portfolio securities and, in the case
of Dean Witter Global Asset on any currency ("currency" futures), on U.S. and
foreign fixed-income securities ("interest rate" futures) and on such indexes of
U.S. or foreign equity or fixed-income securities as may exist or come into
being ("index" futures).
Both Dean Witter Strategist and Dean Witter Global Asset may (i) purchase
securities on a when-issued or delayed delivery basis, (ii) purchase or sell
securities on a forward commitment basis, (iii) purchase securities on a "when,
as and if issued" basis, (iv) enter into repurchase agreements subject to
certain procedures designed to minimize risks associated with such agreements,
(v) enter into reverse repurchase agreements, (vi) purchase rights and warrants
and (vii) invest in zero coupon securities.
Additionally, Dean Witter Global Asset may invest in adjustable rate
mortgage securities, may utilize dollar rolls as an investment technique and may
invest up to 10% of its total assets in shares of other investment companies.
Dean Witter Strategist's current investment policies do not permit such
investments, however, Dean Witter Strategist may invest in real estate
investment trusts whereas Dean Witter Global Asset may not.
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<PAGE> 24
The investment policies of both Dean Witter Global Asset and Dean Witter
Strategist are not fundamental and may be changed by their respective Boards.
The foregoing discussion is a summary of the principal differences and
similarities between the investment policies of the funds. For a more complete
discussion of each fund's policies, see "Investment Objective and Policies" in
each fund's Prospectus and "Investment Practices and Policies" in each fund's
Statement of Additional Information.
INVESTMENT RESTRICTIONS
The investment restrictions adopted by Dean Witter Global Asset and Dean
Witter Strategist as fundamental policies are substantially similar and are
summarized under the caption "Investment Restrictions" in their respective
Prospectuses and Statements of Additional Information. A fundamental investment
restriction cannot be changed without the vote of the majority of the
outstanding voting securities of a fund, as defined in the 1940 Act. The
material differences are as follows: (a) Dean Witter Global Asset has a
fundamental restriction that it may not, as to 75% of its total assets, invest
more than 5% of the value of its total assets in the securities of any one
issuer (other than obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities) or purchase more than 10% of all outstanding
voting securities or any class of securities of any one issuer, whereas Dean
Witter Strategist is not subject to such percentage limitations due to the fact
that it is a non-diversified fund and (b) Dean Witter Strategist may not
purchase securities of other investment companies except in connection with a
merger, consolidation, reorganization or acquisition of assets. Dean Witter
Global Asset has no such limitation.
In addition, Dean Witter Strategist has a fundamental restriction that it
may not invest in securities of any issuer if, in the exercise of reasonable
diligence, the fund has determined that any officer or trustee of the fund or of
the fund's investment manager owns more than 1/2 of 1% of the outstanding
securities of such issuer, and such officers and trustees who own more than 1/2
of 1% own in the aggregate more than 5% of the outstanding securities of such
issuer; Dean Witter Global Asset has no such limitation.
ADDITIONAL INFORMATION ABOUT DEAN WITTER GLOBAL ASSET
AND DEAN WITTER STRATEGIST
GENERAL
For a discussion of the organization and operation of Dean Witter
Strategist and Dean Witter Global Asset, see "The Fund and its Management,"
"Investment Objective and Policies," "Investment Restrictions" and "Prospectus
Summary" in, and the cover page of, their respective Prospectuses.
FINANCIAL INFORMATION
For certain financial information about Dean Witter Strategist and Dean
Witter Global Asset, see "Financial Highlights" and "Performance Information" in
their respective Prospectuses.
MANAGEMENT
For information about the respective Board of Trustees, investment manager,
sub-adviser (in the case of Dean Witter Global Asset) and the Distributor of
Dean Witter Strategist and Dean Witter Global Asset, see "The Fund and its
Management" and "Investment Objective and Policies" in, and on the back cover
of, their respective Prospectuses.
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<PAGE> 25
DESCRIPTION OF SECURITIES AND SHAREHOLDER INQUIRIES
For a description of the nature and most significant attributes of shares
of Dean Witter Global Asset and Dean Witter Strategist, and information
regarding shareholder inquiries, see "Additional Information" in their
respective Prospectuses.
DIVIDENDS, DISTRIBUTIONS AND TAXES
For a discussion of Dean Witter Strategist's and Dean Witter Global Asset's
policies with respect to dividends, distributions and taxes, see "Dividends,
Distributions and Taxes" in their respective Prospectuses as well as the
discussion herein under "Synopsis -- Purchases, Exchanges and Redemptions."
PURCHASES, REPURCHASES AND REDEMPTIONS
For a discussion of how Dean Witter Strategist's and Dean Witter Global
Asset's shares may be purchased, repurchased and redeemed, see "Purchase of Fund
Shares", "Shareholder Services" and "Redemptions and Repurchases" in their
respective Prospectuses.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
For a discussion of Dean Witter Strategist's performance, see management's
letter to shareholders in its Annual Report for its fiscal year ended July 31,
1997 accompanying this Proxy Statement and Prospectus. For a discussion of the
performance of Dean Witter Global Asset, see its Annual Report for its fiscal
year ended January 31, 1998.
FINANCIAL STATEMENTS AND EXPERTS
The financial statements of Dean Witter Strategist, for the year ended July
31, 1997, and Dean Witter Global Asset, for the year ended January 31, 1998 that
are incorporated by reference in the Statement of Additional Information
relating to the Registration Statement on Form N-14 of which this Proxy
Statement and Prospectus forms a part have been audited by Price Waterhouse LLP,
independent accountants. The financial statements have been incorporated by
reference in reliance upon such reports given upon the authority of Price
Waterhouse LLP as experts in accounting and auditing.
LEGAL MATTERS
Certain legal matters concerning the issuance of shares of Dean Witter
Strategist will be passed upon by Gordon Altman Butowsky Weitzen Shalov & Wein,
New York, New York. Such firm will rely on Lane Altman & Owens as to matters of
Massachusetts law.
AVAILABLE INFORMATION
Additional information about Dean Witter Global Asset and Dean Witter
Strategist is available, as applicable, in the following documents which are
incorporated herein by reference: (i) Dean Witter Strategist's Prospectus dated
September 26, 1997, accompanying this Proxy Statement and Prospectus, which
Prospectus forms a part of Post-Effective Amendment No. 11 to Dean Witter
Strategist's Registration Statement on Form N-1A (File Nos. 33-23669;
811-5654); (ii) Dean Witter Strategist's Annual Report for its fiscal year
ended July 31, 1997 and its unaudited Semi-Annual Report for the six months
ended January 31, 1998, accompanying this Proxy Statement and Prospectus; (iii)
Dean Witter
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<PAGE> 26
Global Asset's Prospectus dated March 2, 1998, which Prospectus forms a part of
Post-Effective Amendment No. 6 to Dean Witter Global Asset's Registration
Statement on Form N-1A (File Nos. 33-56239; 811-07233); and (iv) Dean Witter
Global Asset's Annual Report for the fiscal year January 31, 1998. The
foregoing documents may be obtained without charge by calling (212) 392-2550 or
(800) 869-NEWS (toll-free).
Dean Witter Global Asset and Dean Witter Strategist are subject to the
informational requirements of the Securities Exchange Act of 1934, as amended,
and in accordance therewith, file reports and other information with the
Commission. Proxy material, reports and other information about Dean Witter
Global Asset and Dean Witter Strategist which are of public record can be
inspected and copied at public reference facilities maintained by the Commission
at Room 1204, Judiciary Plaza, 450 Fifth Street, NW, Washington, D.C. 20549 and
certain of its regional offices, and copies of such materials can be obtained at
prescribed rates from the Public Reference Branch, Office of Consumer Affairs
and Information Services, Securities and Exchange Commission, Washington, D.C.
20549.
OTHER BUSINESS
Management of Dean Witter Global Asset knows of no business other than the
matters specified above which will be presented at the Meeting. Since matters
not known at the time of the solicitation may come before the Meeting, the proxy
as solicited confers discretionary authority with respect to such matters as
properly come before the Meeting, including any adjournment or adjournments
thereof, and it is the intention of the persons named as attorneys-in-fact in
the proxy to vote this proxy in accordance with their judgment on such matters.
By Order of the Board of Trustees
Barry Fink,
Secretary
June 8, 1998
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<PAGE> 27
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made as of this
30th day of April, 1998, by and between DEAN WITTER STRATEGIST FUND, a
Massachusetts business trust ("Dean Witter Strategist") and DEAN WITTER GLOBAL
ASSET ALLOCATION FUND, a Massachusetts business trust ("Dean Witter Global
Asset").
This Agreement is intended to be and is adopted as a "plan of
reorganization" within the meaning of Treas. Reg. 1.368-2(g), for a
reorganization under Section 368(a)(1) of the Internal Revenue Code of 1986, as
amended (the "Code"). The reorganization ("Reorganization") will consist of the
transfer to Dean Witter Strategist of substantially all of the assets of Dean
Witter Global Asset in exchange for the assumption by Dean Witter Strategist of
all stated liabilities of Dean Witter Global Asset and the issuance by Dean
Witter Strategist of shares of beneficial interest, par value $0.01 per share
(the "Dean Witter Strategist Shares"), to be distributed, after the Closing Date
hereinafter referred to, to the shareholders of Dean Witter Global Asset in
liquidation of Dean Witter Global Asset as provided herein, all upon the terms
and conditions hereinafter set forth in this Agreement.
In consideration of the premises and of the covenants and agreements
hereinafter set forth, the parties hereto covenant and agree as follows:
1. THE REORGANIZATION AND LIQUIDATION OF DEAN WITTER GLOBAL ASSET
1.1 Subject to the terms and conditions herein set forth and on the basis
of the representations and warranties contained herein, Dean Witter Global Asset
agrees to assign, deliver and otherwise transfer the Dean Witter Global Asset
Assets (as defined in paragraph 1.2) to Dean Witter Strategist and Dean Witter
Strategist agrees in exchange therefor to assume all of Dean Witter Global
Asset's stated liabilities on the Closing Date as set forth in paragraph 1.3(a)
and to deliver to Dean Witter Global Asset the number of Dean Witter Strategist
Shares, including fractional Dean Witter Strategist Shares, determined in the
manner set forth in paragraph 2.3. Such transactions shall take place at the
closing provided for in paragraph 3.1 ("Closing").
1.2 (a) The "Dean Witter Global Asset Assets" shall consist of all
property, including without limitation, all cash (other than the "Cash Reserve"
(as defined in paragraph 1.3(b)), cash equivalents, securities and dividend and
interest receivables owned by Dean Witter Global Asset, and any deferred or
prepaid expenses shown as an asset on Dean Witter Global Asset's books on the
Valuation Date.
(b) On or prior to the Valuation Date, Dean Witter Global Asset will
provide Dean Witter Strategist with a list of all of Dean Witter Global Asset's
assets to be assigned, delivered and otherwise transferred to Dean Witter
Strategist and of the stated liabilities to be assumed by Dean Witter Strategist
pursuant to this Agreement. Dean Witter Global Asset reserves the right to sell
any of the securities on such list but will not, without the prior approval of
Dean Witter Strategist, acquire any additional securities other than securities
of the type in which Dean Witter Strategist is permitted to invest and in
amounts agreed to in writing by Dean Witter Strategist. Dean Witter Strategist
will, within a reasonable time prior to the Valuation Date, furnish Dean Witter
Global Asset with a statement of Dean Witter Strategist's investment objectives,
policies and restrictions and a list of the securities, if any, on the list
referred to in the first sentence of this paragraph that do not conform to Dean
Witter Strategist's investment objective, policies and restrictions. In the
event that Dean Witter Global Asset holds any investments that Dean Witter
Strategist is not permitted to hold, Dean Witter Global Asset will dispose of
such securities on or prior to the Valuation Date. In addition, if it is
determined that the portfolios of Dean Witter Global Asset and Dean
A-1
<PAGE> 28
Witter Strategist, when aggregated, would contain investments exceeding certain
percentage limitations imposed upon Dean Witter Strategist with respect to such
investments, Dean Witter Global Asset if requested by Dean Witter Strategist
will, on or prior to the Valuation Date, dispose of and/or reinvest a sufficient
amount of such investments as may be necessary to avoid violating such
limitations as of the Closing Date (as defined in paragraph 3.1).
1.3 (a) Dean Witter Global Asset will endeavor to discharge all of its
liabilities and obligations on or prior to the Valuation Date. Dean Witter
Strategist will assume all stated liabilities, which includes, without
limitation, all expenses, costs, charges and reserves reflected on an unaudited
Statement of Assets and Liabilities of Dean Witter Global Asset prepared by the
Treasurer of Dean Witter Global Asset as of the Valuation Date in accordance
with generally accepted accounting principles consistently applied from the
prior audited period.
(b) On the Valuation Date, Dean Witter Global Asset may establish a
cash reserve, which shall not exceed 5% of Dean Witter Global Asset's net assets
as of the close of business on the Valuation Date ("Cash Reserve") to be
retained by Dean Witter Global Asset and used for the payment of its liabilities
not discharged prior to the Valuation Date and for the expenses of dissolution.
1.4 In order for Dean Witter Global Asset to comply with Section 852(a)(1)
of the Code and to avoid having any investment company taxable income or net
capital gain (as defined in Sections 852(b)(2) and 1222(11) of the Code,
respectively) in the short taxable year ending with its dissolution, Dean Witter
Global Asset will on or before the Valuation Date (a) declare a dividend in an
amount large enough so that it will have declared dividends of all of its
investment company taxable income and net capital gain, if any, for such taxable
year (determined without regard to any deduction for dividends paid) and (b)
distribute such dividend.
1.5 On the Closing Date or as soon as practicable thereafter, Dean Witter
Global Asset will distribute Dean Witter Strategist Shares received by Dean
Witter Global Asset pursuant to paragraph 1.1 pro rata to its shareholders of
record determined as of the close of business on the Valuation Date ("Dean
Witter Global Asset Shareholders"). Each Dean Witter Global Asset Shareholder
will receive the class of shares of Dean Witter Strategist that corresponds to
the class of shares of Dean Witter Global Asset currently held by that Dean
Witter Global Asset Shareholder. Accordingly, the Dean Witter Strategist Shares
will be distributed as follows: each of the Class A, Class B, Class C and Class
D shares of Dean Witter Strategist will be distributed to holders of Class A,
Class B, Class C and Class D shares of Dean Witter Global Asset, respectively.
Such distribution will be accomplished by an instruction, signed by Dean Witter
Global Asset's Secretary, to transfer Dean Witter Strategist Shares then
credited to Dean Witter Global Asset's account on the books of Dean Witter
Strategist to open accounts on the books of Dean Witter Strategist in the names
of the Dean Witter Global Asset Shareholders and representing the respective pro
rata number of Dean Witter Strategist Shares due such Dean Witter Global Asset
Shareholders. All issued and outstanding shares of Dean Witter Global Asset
simultaneously will be canceled on Dean Witter Global Asset's books; however,
share certificates representing interests in Dean Witter Global Asset will
represent a number of Dean Witter Strategist Shares after the Closing Date as
determined in accordance with paragraph 2.3. Dean Witter Strategist will issue
certificates representing Dean Witter Strategist Shares in connection with such
exchange only upon the written request of a Dean Witter Global Asset
Shareholder.
1.6 Ownership of Dean Witter Strategist Shares will be shown on the books
of Dean Witter Strategist's transfer agent. Dean Witter Strategist Shares will
be issued in the manner described in Dean Witter Strategist's current Prospectus
and Statement of Additional Information.
1.7 Any transfer taxes payable upon issuance of Dean Witter Strategist
Shares in a name other than the registered holder of Dean Witter Strategist
Shares on Dean Witter Global Asset's books as of the close of business
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on the Valuation Date shall, as a condition of such issuance and transfer, be
paid by the person to whom Dean Witter Strategist Shares are to be issued and
transferred.
1.8 Any reporting responsibility of Dean Witter Global Asset is and shall
remain the responsibility of Dean Witter Global Asset up to and including the
date on which Dean Witter Global Asset is dissolved and deregistered pursuant to
paragraph 1.9.
1.9 Within one year after the Closing Date, Dean Witter Global Asset shall
pay or make provision for the payment of all its liabilities and taxes, and
distribute to the shareholders of Dean Witter Global Asset as of the close of
business on the Valuation Date any remaining amount of the Cash Reserve (as
reduced by the estimated cost of distributing it to shareholders). Dean Witter
Global Asset shall be dissolved as a Massachusetts business trust and
deregistered as an investment company under the Investment Company Act of 1940,
as amended ("1940 Act"), promptly following the making of all distributions
pursuant to paragraph 1.5.
1.10 Copies of all books and records maintained on behalf of Dean Witter
Global Asset in connection with its obligations under the 1940 Act, the Code,
state blue sky laws or otherwise in connection with this Agreement will promptly
after the Closing be delivered to officers of Dean Witter Strategist or their
designee and Dean Witter Strategist or its designee shall comply with applicable
record retention requirements to which Dean Witter Global Asset is subject under
the 1940 Act.
2. VALUATION
2.1 The value of the Dean Witter Global Asset Assets shall be the value of
such assets computed as of 4:00 p.m. on the New York Stock Exchange on the third
business day following the receipt of the requisite approval by shareholders of
Dean Witter Global Asset of this Agreement or at such time on such earlier or
later date after such approval as may be mutually agreed upon in writing (such
time and date being hereinafter called the "Valuation Date"), using the
valuation procedures set forth in Dean Witter Strategist's then current
Prospectus and Statement of Additional Information.
2.2 The net asset value of a Dean Witter Strategist Share shall be the net
asset value per share computed on the Valuation Date, using the valuation
procedures set forth in Dean Witter Strategist's then current Prospectus and
Statement of Additional Information.
2.3 The number of Dean Witter Strategist Shares (including fractional
shares, if any) to be issued hereunder shall be determined, with respect to each
class, by dividing the aggregate net asset value of each class of Dean Witter
Global Asset shares (determined in accordance with paragraph 2.1) by the net
asset value per share of the corresponding class of shares of Dean Witter
Strategist (determined in accordance with paragraph 2.2). For purposes of this
paragraph, the aggregate net asset value of each class of shares of Dean Witter
Global Asset shall not include the amount of the Cash Reserve.
2.4 All computations of value shall be made by Dean Witter Services Company
Inc. ("Services") in accordance with its regular practice in pricing Dean Witter
Strategist. Dean Witter Strategist shall cause Services to deliver a copy of its
valuation report at the Closing.
3. CLOSING AND CLOSING DATE
3.1 The Closing shall take place on the next business day following the
Valuation Date (the "Closing Date"). The Closing shall be held as of 9:00 a.m.
Eastern time, or at such other time as the parties may agree. The Closing shall
be held in a location mutually agreeable to the parties hereto. All acts taking
place at the Closing shall be deemed to take place simultaneously as of 9:00
a.m. Eastern time on the Closing Date unless otherwise provided.
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3.2 Portfolio securities held by Dean Witter Global Asset and represented
by a certificate or other written instrument shall be presented by it or on its
behalf to The Bank of New York (the "Custodian"), as custodian for Dean Witter
Strategist, for examination no later than five business days preceding the
Valuation Date. Such portfolio securities (together with any cash or other
assets) shall be delivered by Dean Witter Global Asset to the Custodian for the
account of Dean Witter Strategist on or before the Closing Date in conformity
with applicable custody provisions under the 1940 Act and duly endorsed in
proper form for transfer in such condition as to constitute good delivery
thereof in accordance with the custom of brokers. The portfolio securities shall
be accompanied by all necessary Federal and state stock transfer stamps or a
check for the appropriate purchase price of such stamps. Portfolio securities
and instruments deposited with a securities depository (as defined in Rule 17f-4
under the 1940 Act) shall be delivered on or before the Closing Date by
book-entry in accordance with customary practices of such depository and the
Custodian. The cash delivered shall be in the form of a Federal Funds wire,
payable to the order of "The Bank of New York, Custodian for Dean Witter
Strategist Fund."
3.3 In the event that on the Valuation Date, (a) the New York Stock
Exchange shall be closed to trading or trading thereon shall be restricted or
(b) trading or the reporting of trading on such Exchange or elsewhere shall be
disrupted so that, in the judgment of both Dean Witter Strategist and Dean
Witter Global Asset, accurate appraisal of the value of the net assets of Dean
Witter Strategist or the Dean Witter Global Asset Assets is impracticable, the
Valuation Date shall be postponed until the first business day after the day
when trading shall have been fully resumed without restriction or disruption and
reporting shall have been restored.
3.4 If requested, Dean Witter Global Asset shall deliver to Dean Witter
Strategist or its designee (a) at the Closing, a list, certified by its
Secretary, of the names, addresses and taxpayer identification numbers of the
Dean Witter Global Asset Shareholders and the number and percentage ownership of
outstanding Dean Witter Global Asset shares owned by each such Dean Witter
Global Asset Shareholder, all as of the Valuation Date, and (b) as soon as
practicable after the Closing, all original documentation (including Internal
Revenue Service forms, certificates, certifications and correspondence) relating
to the Dean Witter Global Asset Shareholders' taxpayer identification numbers
and their liability for or exemption from back-up withholding. Dean Witter
Strategist shall issue and deliver to such Secretary a confirmation evidencing
delivery of Dean Witter Strategist Shares to be credited on the Closing Date to
Dean Witter Global Asset or provide evidence satisfactory to Dean Witter Global
Asset that such Dean Witter Strategist Shares have been credited to Dean Witter
Global Asset's account on the books of Dean Witter Strategist. At the Closing,
each party shall deliver to the other such bills of sale, checks, assignments,
share certificates, if any, receipts or other documents as such other party or
its counsel may reasonably request.
4. COVENANTS OF DEAN WITTER STRATEGIST AND DEAN WITTER GLOBAL ASSET
4.1 Except as otherwise expressly provided herein with respect to Dean
Witter Global Asset, Dean Witter Strategist and Dean Witter Global Asset each
will operate its business in the ordinary course between the date hereof and the
Closing Date, it being understood that such ordinary course of business will
include customary dividends and other distributions.
4.2 Dean Witter Strategist will prepare and file with the Securities and
Exchange Commission ("Commission") a registration statement on Form N-14 under
the Securities Act of 1933, as amended ("1933 Act"), relating to Dean Witter
Strategist Shares ("Registration Statement"). Dean Witter Global Asset will
provide Dean Witter Strategist with the Proxy Materials as described in
paragraph 4.3 below, for inclusion in the Registration Statement. Dean Witter
Global Asset will further provide Dean Witter Strategist with such other
information and documents relating to Dean Witter Strategist as are reasonably
necessary for the preparation of the Registration Statement.
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4.3 Dean Witter Global Asset will call a meeting of its shareholders to
consider and act upon this Agreement and to take all other action necessary to
obtain approval of the transactions contemplated herein. Dean Witter Global
Asset will prepare the notice of meeting, form of proxy and proxy statement
(collectively, "Proxy Materials") to be used in connection with such meeting;
provided that Dean Witter Strategist will furnish Dean Witter Global Asset with
its currently effective prospectus for inclusion in the Proxy Materials and with
such other information relating to Dean Witter Strategist as is reasonably
necessary for the preparation of the Proxy Materials.
4.4 Dean Witter Global Asset will assist Dean Witter Strategist in
obtaining such information as Dean Witter Strategist reasonably requests
concerning the beneficial ownership of Dean Witter Global Asset shares.
4.5 Subject to the provisions of this Agreement, Dean Witter Strategist and
Dean Witter Global Asset will each take, or cause to be taken, all action, and
do or cause to be done, all things reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement.
4.6 Dean Witter Global Asset shall furnish or cause to be furnished to Dean
Witter Strategist within 30 days after the Closing Date a statement of Dean
Witter Global Asset's assets and liabilities as of the Closing Date, which
statement shall be certified by Dean Witter Global Asset's Treasurer and shall
be in accordance with generally accepted accounting principles consistently
applied. As promptly as practicable, but in any case within 60 days after the
Closing Date, Dean Witter Global Asset shall furnish Dean Witter Strategist, in
such form as is reasonably satisfactory to Dean Witter Strategist, a statement
certified by Dean Witter Global Asset's Treasurer of Dean Witter Global Asset's
earnings and profits for Federal income tax purposes that will be carried over
to Dean Witter Strategist pursuant to Section 381 of the Code.
4.7 As soon after the Closing Date as is reasonably practicable, Dean
Witter Global Asset (a) shall prepare and file all Federal and other tax returns
and reports of Dean Witter Global Asset required by law to be filed with respect
to all periods ending on or before the Closing Date but not theretofore filed
and (b) shall pay all Federal and other taxes shown as due thereon and/or all
Federal and other taxes that were unpaid as of the Closing Date, including
without limitation, all taxes for which the provision for payment was made as of
the Closing Date (as represented in paragraph 5.2(k)).
4.8 Dean Witter Strategist agrees to use all reasonable efforts to obtain
the approvals and authorizations required by the 1933 Act and the 1940 Act and
to make such filings required by the state Blue Sky and securities laws as it
may deem appropriate in order to continue its operations after the Closing Date.
5. REPRESENTATIONS AND WARRANTIES
5.1 Dean Witter Strategist represents and warrants to Dean Witter Global
Asset as follows:
(a) Dean Witter Strategist is a validly existing Massachusetts business
trust with full power to carry on its business as presently conducted;
(b) Dean Witter Strategist is a duly registered, open-end, management
investment company, and its registration with the Commission as an investment
company under the 1940 Act and the registration of its shares under the 1933 Act
are in full force and effect;
(c) All of the issued and outstanding shares of Dean Witter Strategist
have been offered and sold in compliance in all material respects with
applicable registration requirements of the 1933 Act and state securities laws.
Shares of Dean Witter Strategist are registered in all jurisdictions in which
they are required to be registered under state securities laws and other laws,
and said registrations, including any periodic reports or supplemental
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filings, are complete and current, all fees required to be paid have been paid,
and Dean Witter Strategist is not subject to any stop order and is fully
qualified to sell its shares in each state in which its shares have been
registered;
(d) The current Prospectus and Statement of Additional Information of
Dean Witter Strategist conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the regulations thereunder and
do not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
(e) Dean Witter Strategist is not in, and the execution, delivery and
performance of this Agreement will not result in a, material violation of any
provision of Dean Witter Strategist's Declaration of Trust or By-Laws or of any
agreement, indenture, instrument, contract, lease or other undertaking to which
Dean Witter Strategist is a party or by which it is bound;
(f) No litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or, to its knowledge,
threatened against Dean Witter Strategist or any of its properties or assets
which, if adversely determined, would materially and adversely affect its
financial condition or the conduct of its business; and Dean Witter Strategist
knows of no facts that might form the basis for the institution of such
proceedings and is not a party to or subject to the provisions of any order,
decree or judgment of any court or governmental body which materially and
adversely affects, or is reasonably likely to materially and adversely effect,
its business or its ability to consummate the transactions herein contemplated;
(g) The Statement of Assets and Liabilities, Statement of Operations,
Statement of Changes in Net Assets and Financial Highlights for the year ended
July 31, 1997, of Dean Witter Strategist certified by Price Waterhouse LLP
(copies of which have been furnished to Dean Witter Global Asset), fairly
present, in all material respects, Dean Witter Strategist's financial condition
as of such date in accordance with generally accepted accounting principles, and
its results of such operations, changes in its net assets and financial
highlights for such period, and as of such date there were no known liabilities
of Dean Witter Strategist (contingent or otherwise) not disclosed therein that
would be required in accordance with generally accepted accounting principles to
be disclosed therein;
(h) All issued and outstanding Dean Witter Strategist Shares are, and
at the Closing Date will be, duly and validly issued and outstanding, fully paid
and nonassessable with no personal liability attaching to the ownership thereof,
except as set forth under the caption "Additional Information" in Dean Witter
Strategist's current Prospectus incorporated by reference in the Registration
Statement. Dean Witter Strategist does not have outstanding any options,
warrants or other rights to subscribe for or purchase any of its shares;
(i) The execution, delivery and performance of this Agreement have been
duly authorized by all necessary action on the part of Dean Witter Strategist,
and this Agreement constitutes a valid and binding obligation of Dean Witter
Strategist enforceable in accordance with its terms, subject as to enforcement,
to bankruptcy, insolvency, reorganization, moratorium and other laws relating to
or affecting creditors rights and to general equity principles. No other
consents, authorizations or approvals are necessary in connection with Dean
Witter Strategist's performance of this Agreement;
(j) Dean Witter Strategist Shares to be issued and delivered to Dean
Witter Global Asset, for the account of the Dean Witter Global Asset
Shareholders, pursuant to the terms of this Agreement will at the Closing Date
have been duly authorized and, when so issued and delivered, will be duly and
validly issued Dean Witter Strategist Shares, and will be fully paid and
non-assessable with no personal liability attaching to the ownership thereof,
except
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as set forth under the caption "Additional Information" in Dean Witter
Strategist's current Prospectus incorporated by reference in the Registration
Statement;
(k) All material Federal and other tax returns and reports of Dean
Witter Strategist required by law to be filed on or before the Closing Date have
been filed and are correct, and all Federal and other taxes shown as due or
required to be shown as due on said returns and reports have been paid or
provision has been made for the payment thereof, and to the best of Dean Witter
Strategist's knowledge, no such return is currently under audit and no
assessment has been asserted with respect to any such return;
(l) For each taxable year since its inception, Dean Witter Strategist
has met the requirements of Subchapter M of the Code for qualification and
treatment as a "regulated investment company" and neither the execution or
delivery of nor the performance of its obligations under this Agreement will
adversely affect, and no other events are reasonably likely to occur which will
adversely affect the ability of Dean Witter Strategist to continue to meet the
requirements of Subchapter M of the Code;
(m) Since July 31, 1997 there has been no change by Dean Witter
Strategist in accounting methods, principles, or practices, including those
required by generally accepted accounting principles;
(n) The information furnished or to be furnished by Dean Witter
Strategist for use in registration statements, proxy materials and other
documents which may be necessary in connection with the transactions
contemplated hereby shall be accurate and complete in all material respects and
shall comply in all material respects with Federal securities and other laws and
regulations applicable thereto; and
(o) The Proxy Materials to be included in the Registration Statement
(only insofar as they relate to Dean Witter Strategist) will, on the effective
date of the Registration Statement and on the Closing Date, not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which such statements were made, not materially misleading.
5.2 Dean Witter Global Asset represents and warrants to Dean Witter
Strategist as follows:
(a) Dean Witter Global Asset is a validly existing Massachusetts
business trust with full power to carry on its business as presently conducted;
(b) Dean Witter Global Asset is a duly registered, open-end, management
investment company, and its registration with the Commission as an investment
company under the 1940 Act and the registration of its shares under the 1933 Act
are in full force and effect;
(c) All of the issued and outstanding shares of beneficial interest of
Dean Witter Global Asset have been offered and sold in compliance in all
material respects with applicable requirements of the 1933 Act and state
securities laws. Shares of Dean Witter Global Asset are registered in all
jurisdictions in which they are required to be registered and said
registrations, including any periodic reports or supplemental filings, are
complete and current, all fees required to be paid have been paid, and Dean
Witter Global Asset is not subject to any stop order and is fully qualified to
sell its shares in each state in which its shares have been registered;
(d) The current Prospectus and Statement of Additional Information of
Dean Witter Global Asset conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the regulations thereunder and
do not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
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(e) Dean Witter Global Asset is not, and the execution, delivery and
performance of this Agreement will not result, in a material violation of any
provision of Dean Witter Global Asset's Declaration of Trust or By-Laws or of
any agreement, indenture, instrument, contract, lease or other undertaking to
which Dean Witter Global Asset is a party or by which it is bound;
(f) No litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or, to its knowledge,
threatened against Dean Witter Global Asset or any of its properties or assets
which, if adversely determined, would materially and adversely affect its
financial condition or the conduct of its business; and Dean Witter Global Asset
knows of no facts that might form the basis for the institution of such
proceedings and is not a party to or subject to the provisions of any order,
decree or judgment of any court or governmental body which materially and
adversely affects, or is reasonably likely to materially and adversely effect,
its business or its ability to consummate the transactions herein contemplated;
(g) The Statement of Assets and Liabilities, Statement of Operations,
Statement of Changes in Net Assets and Financial Highlights of Dean Witter
Global Asset for the year ended January 31, 1998, certified by Price Waterhouse
LLP (copies of which have been or will be furnished to Dean Witter Strategist)
fairly present, in all material respects, Dean Witter Global Asset's financial
condition as of such date, and its results of operations, changes in its net
assets and financial highlights for such period in accordance with generally
accepted accounting principles, and as of such date there were no known
liabilities of Dean Witter Global Asset (contingent or otherwise) not disclosed
therein that would be required in accordance with generally accepted accounting
principles to be disclosed therein;
(h) Dean Witter Global Asset has no material contracts or other
commitments (other than this Agreement) that will be terminated with liability
to it prior to the Closing Date;
(i) All issued and outstanding shares of Dean Witter Global Asset are,
and at the Closing Date will be, duly and validly issued and outstanding, fully
paid and nonassessable with no personal liability attaching to the ownership
thereof, except as set forth under the caption "Additional Information" in Dean
Witter Global Asset's current Prospectus incorporated by reference in the
Registration Statement. Dean Witter Global Asset does not have outstanding any
options, warrants or other rights to subscribe for or purchase any of its
shares, nor is there outstanding any security convertible to any of its shares.
All such shares will, at the time of Closing, be held by the persons and in the
amounts set forth in the list of shareholders submitted to Dean Witter
Strategist pursuant to paragraph 3.4;
(j) The execution, delivery and performance of this Agreement will have
been duly authorized prior to the Closing Date by all necessary action on the
part of Dean Witter Global Asset, and subject to the approval of Dean Witter
Global Asset's shareholders, this Agreement constitutes a valid and binding
obligation of Dean Witter Global Asset, enforceable in accordance with its
terms, subject as to enforcement to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors rights and to
general equity principles. No other consents, authorizations or approvals are
necessary in connection with Dean Witter Global Asset's performance of this
Agreement;
(k) All material Federal and other tax returns and reports of Dean
Witter Global Asset required by law to be filed on or before the Closing Date
shall have been filed and are correct and all Federal and other taxes shown as
due or required to be shown as due on said returns and reports have been paid or
provision has been made for the payment thereof, and to the best of Dean Witter
Global Asset's knowledge, no such return is currently under audit and no
assessment has been asserted with respect to any such return;
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(l) For each taxable year since its inception, Dean Witter Global Asset
has met all the requirements of Subchapter M of the Code for qualification and
treatment as a "regulated investment company" and neither the execution or
delivery of nor the performance of its obligations under this Agreement will
adversely affect, and no other events are reasonably likely to occur which will
adversely affect the ability of Dean Witter Global Asset to continue to meet the
requirements of Subchapter M of the Code;
(m) At the Closing Date, Dean Witter Global Asset will have good and
valid title to the Dean Witter Global Asset Assets, subject to no liens (other
than the obligation, if any, to pay the purchase price of portfolio securities
purchased by Dean Witter Global Asset which have not settled prior to the
Closing Date), security interests or other encumbrances, and full right, power
and authority to assign, deliver and otherwise transfer such assets hereunder,
and upon delivery and payment for such assets, Dean Witter Strategist will
acquire good and marketable title thereto, subject to no restrictions on the
full transfer thereof, including any restrictions as might arise under the 1933
Act;
(n) On the effective date of the Registration Statement, at the time of
the meeting of Dean Witter Global Asset's shareholders and on the Closing Date,
the Proxy Materials (exclusive of the currently effective Dean Witter Strategist
Prospectus contained therein) will (i) comply in all material respects with the
provisions of the 1933 Act, the Securities Exchange Act of 1934, as amended
("1934 Act") and the 1940 Act and the regulations thereunder and (ii) not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading. Any other information furnished by Dean Witter Global Asset for use
in the Registration Statement or in any other manner that may be necessary in
connection with the transactions contemplated hereby shall be accurate and
complete and shall comply in all material respects with applicable Federal
securities and other laws and regulations thereunder;
(o) Dean Witter Global Asset will, on or prior to the Valuation Date,
declare one or more dividends or other distributions to shareholders that,
together with all previous dividends and other distributions to shareholders,
shall have the effect of distributing to the shareholders all of its investment
company taxable income and net capital gain, if any, through the Valuation Date
(computed without regard to any deduction for dividends paid);
(p) Dean Witter Global Asset has maintained or has caused to be
maintained on its behalf all books and accounts as required of a registered
investment company in compliance with the requirements of Section 31 of the 1940
Act and the Rules thereunder; and
(q) Dean Witter Global Asset is not acquiring Dean Witter Strategist
Shares to be issued hereunder for the purpose of making any distribution thereof
other than in accordance with the terms of this Agreement.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF DEAN WITTER GLOBAL ASSET
The obligations of Dean Witter Global Asset to consummate the transactions
provided for herein shall be subject, at its election, to the performance by
Dean Witter Strategist of all the obligations to be performed by it hereunder on
or before the Closing Date and, in addition thereto, the following conditions:
6.1 All representations and warranties of Dean Witter Strategist contained
in this Agreement shall be true and correct in all material respects as of the
date hereof and, except as they may be affected by the transactions contemplated
by this Agreement, as of the Closing Date with the same force and effect as if
made on and as of the Closing Date;
6.2 Dean Witter Strategist shall have delivered to Dean Witter Global Asset
a certificate of its President and Treasurer, in a form reasonably satisfactory
to Dean Witter Global Asset and dated as of the Closing Date, to the effect that
the representations and warranties of Dean Witter Strategist made in this
Agreement are true and correct
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at and as of the Closing Date, except as they may be affected by the
transactions contemplated by this Agreement, and as to such other matters as
Dean Witter Global Asset shall reasonably request;
6.3 Dean Witter Global Asset shall have received a favorable opinion from
Gordon Altman Butowsky Weitzen Shalov & Wein, counsel to Dean Witter Strategist,
dated as of the Closing Date, to the effect that:
(a) Dean Witter Strategist is a validly existing Massachusetts business
trust, and has the power to own all of its properties and assets and to carry on
its business as presently conducted (Massachusetts counsel may be relied upon in
delivering such opinion); (b) Dean Witter Strategist is a duly registered,
open-end, management investment company, and its registration with the
Commission as an investment company under the 1940 Act is in full force and
effect; (c) this Agreement has been duly authorized, executed and delivered by
Dean Witter Strategist and, assuming that the Registration Statement complies
with the 1933 Act, the 1934 Act and the 1940 Act and regulations thereunder and
assuming due authorization, execution and delivery of this Agreement by Dean
Witter Global Asset, is a valid and binding obligation of Dean Witter Strategist
enforceable against Dean Witter Strategist in accordance with its terms, subject
as to enforcement, to bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors rights and to general equity
principles; (d) Dean Witter Strategist Shares to be issued to Dean Witter Global
Asset Shareholders as provided by this Agreement are duly authorized and upon
such delivery will be validly issued, fully paid and non-assessable (except as
set forth under the caption "Additional Information" in Dean Witter Strategist's
Prospectus), and no shareholder of Dean Witter Strategist has any preemptive
rights to subscription or purchase in respect thereof (Massachusetts counsel may
be relied upon in delivering such opinion); (e) the execution and delivery of
this Agreement did not, and the consummation of the transactions contemplated
hereby will not, violate Dean Witter Strategist's Declaration of Trust or
By-Laws; and (f) to the knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental authority of the United
States or any state is required for the consummation by Dean Witter Strategist
of the transactions contemplated herein, except such as have been obtained under
the 1933 Act, the 1934 Act and the 1940 Act and such as may be required under
state securities laws; and
6.4 As of the Closing Date, there shall have been no material change in the
investment objective, policies and restrictions nor any increase in the
investment management fees or annual fees pursuant to Dean Witter Strategist's
12b-1 plan of distribution from those described in Dean Witter Strategist's
Prospectus and Statement of Additional Information dated September 26, 1997.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF DEAN WITTER STRATEGIST
The obligations of Dean Witter Strategist to complete the transactions
provided for herein shall be subject, at its election, to the performance by
Dean Witter Global Asset of all the obligations to be performed by it hereunder
on or before the Closing Date and, in addition thereto, the following
conditions:
7.1 All representations and warranties of Dean Witter Global Asset
contained in this Agreement shall be true and correct in all material respects
as of the date hereof and, except as they may be affected by the
transactions contemplated by this Agreement, as of the Closing Date with the
same force and effect as if made on and as of the Closing Date;
7.2 Dean Witter Global Asset shall have delivered to Dean Witter Strategist
at the Closing a certificate of its President and its Treasurer, in form and
substance satisfactory to Dean Witter Strategist and dated as of the Closing
Date, to the effect that the representations and warranties of Dean Witter
Global Asset made in this Agreement are true and correct at and as of the
Closing Date, except as they may be affected by the transactions contemplated by
this Agreement, and as to such other matters as Dean Witter Strategist shall
reasonably request;
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7.3 Dean Witter Global Asset shall have delivered to Dean Witter Strategist
a statement of the Dean Witter Global Asset Assets and its liabilities, together
with a list of Dean Witter Global Asset's portfolio securities and other assets
showing the respective adjusted bases and holding periods thereof for income tax
purposes, as of the Closing Date, certified by the Treasurer of Dean Witter
Global Asset;
7.4 Dean Witter Global Asset shall have delivered to Dean Witter Strategist
within three business days after the Closing a letter from Price Waterhouse LLP
dated as of the Closing Date stating that (a) such firm has performed a limited
review of the Federal and state income tax returns of Dean Witter Global Asset
for each of the last three taxable years and, based on such limited review,
nothing came to their attention that caused them to believe that such returns
did not properly reflect, in all material respects, the Federal and state income
tax liabilities of Dean Witter Global Asset for the periods covered thereby, (b)
for the period from January 31, 1998 to and including the Closing Date, such
firm has performed a limited review (based on unaudited financial data) to
ascertain the amount of applicable Federal, state and local taxes and has
determined that same either have been paid or reserves have been established for
payment of such taxes, and, based on such limited review, nothing came to their
attention that caused them to believe that the taxes paid or reserves set aside
for payment of such taxes were not adequate in all material respects for the
satisfaction of all Federal, state and local tax liabilities for the period from
January 31, 1998 to and including the Closing Date and (c) based on such limited
reviews, nothing came to their attention that caused them to believe that Dean
Witter Global Asset would not qualify as a regulated investment company for
Federal income tax purposes for any such year or period;
7.5 Dean Witter Strategist shall have received at the Closing a favorable
opinion from Gordon Altman Butowsky Weitzen Shalov & Wein, counsel to Dean
Witter Global Asset, dated as of the Closing Date to the effect that:
(a) Dean Witter Global Asset is a validly existing Massachusetts
business trust and has the power to own all of its properties and assets and to
carry on its business as presently conducted (Massachusetts counsel may be
relied upon in delivering such opinion); (b) Dean Witter Global Asset is a duly
registered, open-end, management investment company under the 1940 Act, and its
registration with the Commission as an investment company under the 1940 Act is
in full force and effect; (c) this Agreement has been duly authorized, executed
and delivered by Dean Witter Global Asset and, assuming that the Registration
Statement complies with the 1933 Act, the 1934 Act and the 1940 Act and the
regulations thereunder and assuming due authorization, execution and delivery of
this Agreement by Dean Witter Strategist, is a valid and binding obligation of
Dean Witter Global Asset enforceable against Dean Witter Global Asset in
accordance with its terms, subject as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting creditors
rights and to general equity principles; (d) the execution and delivery of this
Agreement did not, and the consummation of the transactions contemplated hereby
will not, violate Dean Witter Global Asset's Declaration of Trust or By-Laws;
and (e) to the knowledge of such counsel, no consent, approval, authorization or
order of any court or governmental authority of the United States or any state
is required for the consummation by Dean Witter Global Asset of the transactions
contemplated herein, except such as have been obtained under the 1933 Act, the
1934 Act and the 1940 Act and such as may be required under state securities
laws; and
7.6 On the Closing Date, the Dean Witter Global Asset Assets shall include
no assets that Dean Witter Strategist, by reason of limitations of the fund's
Declaration of Trust or otherwise, may not properly acquire.
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<PAGE> 38
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF DEAN WITTER STRATEGIST AND
DEAN WITTER GLOBAL ASSET
The obligations of Dean Witter Global Asset and Dean Witter Strategist
hereunder are each subject to the further conditions that on or before the
Closing Date:
8.1 This Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the holders of the outstanding shares of Dean
Witter Global Asset in accordance with the provisions of Dean Witter Global
Asset's Declaration of Trust, and certified copies of the resolutions evidencing
such approval shall have been delivered to Dean Witter Strategist;
8.2 On the Closing Date, no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein;
8.3 All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities (including those of
the Commission and of state Blue Sky and securities authorities, including
"no-action" positions of and exemptive orders from such Federal and state
authorities) deemed necessary by Dean Witter Strategist or Dean Witter Global
Asset to permit consummation, in all material respects, of the transactions
contemplated herein shall have been obtained, except where failure to obtain any
such consent, order or permit would not involve risk of a material adverse
effect on the assets or properties of Dean Witter Strategist or Dean Witter
Global Asset;
8.4 The Registration Statement shall have become effective under the 1933
Act, no stop orders suspending the effectiveness thereof shall have been issued
and, to the best knowledge of the parties hereto, no investigation or proceeding
for that purpose shall have been instituted or be pending, threatened or
contemplated under the 1933 Act;
8.5 Dean Witter Global Asset shall have declared and paid a dividend or
dividends and/or other distribution or distributions that, together with all
previous such dividends or distributions, shall have the effect of distributing
to the Dean Witter Global Asset Shareholders all of Dean Witter Global Asset's
investment company taxable income (computed without regard to any deduction for
dividends paid) and all of its net capital gain (after reduction for any capital
loss carry-forward and computed without regard to any deduction for dividends
paid) for all taxable years ending on or before the Closing Date; and
8.6 The parties shall have received a favorable opinion of the law firm of
Gordon Altman Butowsky Weitzen Shalov & Wein (based on such representations as
such law firm shall reasonably request), addressed to Dean Witter Strategist and
Dean Witter Global Asset, which opinion may be relied upon by the shareholders
of Dean Witter Global Asset, substantially to the effect that, for Federal
income tax purposes:
(a) The transfer of substantially all of Dean Witter Global Asset's
assets in exchange for Dean Witter Strategist Shares and the assumption by Dean
Witter Strategist of certain stated liabilities of Dean Witter Global Asset
followed by the distribution by Dean Witter Global Asset of Dean Witter
Strategist Shares to the Dean Witter Global Asset Shareholders in exchange for
their Dean Witter Global Asset shares will constitute a "reorganization" within
the meaning of Section 368(a)(1)(C) of the Code, and Dean Witter Global Asset
and Dean Witter Strategist will each be a "party to a reorganization" within the
meaning of Section 368(b) of the Code;
(b) No gain or loss will be recognized by Dean Witter Strategist upon
the receipt of the assets of Dean Witter Global Asset solely in exchange for
Dean Witter Strategist Shares and the assumption by Dean Witter Strategist of
the stated liabilities of Dean Witter Global Asset;
A-12
<PAGE> 39
(c) No gain or loss will be recognized by Dean Witter Global Asset upon
the transfer of the assets of Dean Witter Global Asset to Dean Witter Strategist
in exchange for Dean Witter Strategist Shares and the assumption by Dean Witter
Strategist of the stated liabilities or upon the distribution of Dean Witter
Strategist Shares to the Dean Witter Global Asset Shareholders in exchange for
their Dean Witter Global Asset shares;
(d) No gain or loss will be recognized by the Dean Witter Global Asset
Shareholders upon the exchange of the Dean Witter Global Asset shares for Dean
Witter Strategist Shares;
(e) The aggregate tax basis for Dean Witter Strategist Shares received
by each Dean Witter Global Asset Shareholder pursuant to the reorganization will
be the same as the aggregate tax basis of the Dean Witter Global Asset Shares
held by each such Dean Witter Global Asset Shareholder immediately prior to the
Reorganization;
(f) The holding period of Dean Witter Strategist Shares to be received
by each Dean Witter Global Asset Shareholder will include the period during
which the Dean Witter Global Asset Shares surrendered in exchange therefor were
held (provided such Dean Witter Global Asset Shares were held as capital assets
on the date of the Reorganization);
(g) The tax basis of the assets of Dean Witter Global Asset acquired by
Dean Witter Strategist will be the same as the tax basis of such assets to Dean
Witter Global Asset immediately prior to the Reorganization; and
(h) The holding period of the assets of Dean Witter Global Asset in the
hands of Dean Witter Strategist will include the period during which those
assets were held by Dean Witter Global Asset.
Notwithstanding anything herein to the contrary, neither Dean Witter
Strategist nor Dean Witter Global Asset may waive the conditions set forth in
this paragraph 8.6.
9. FEES AND EXPENSES
9.1 (a) Dean Witter Strategist shall bear its expenses incurred in
connection with the entering into, and carrying out of, the provisions of this
Agreement, including legal, accounting, Commission registration fees and Blue
Sky expenses. Dean Witter Global Asset shall bear its expenses incurred in
connection with the entering into and carrying out of the provisions of this
Agreement, including legal and accounting fees, printing, filing and proxy
solicitation expenses and portfolio transfer taxes (if any) incurred in
connection with the consummation of the transactions contemplated herein.
(b) In the event the transactions contemplated herein are not
consummated by reason of Dean Witter Global Assets being either unwilling or
unable to go forward (other than by reason of the nonfulfillment or failure of
any condition to Dean Witter's Global Asset's obligations specified in this
Agreement), Dean Witter Global Asset's only obligations hereunder shall be to
reimburse Dean Witter Strategist for all reasonable out-of-pocket fees and
expenses incurred by Dean Witter Strategist in connection with those
transactions.
(c) In the event the transactions contemplated herein are not
consummated by reason of Dean Witter Strategist being either unwilling or unable
to go forward (other than by reason of the nonfulfillment or failure of any
condition to Dean Witter Strategist's obligations specified in this Agreement),
Dean Witter Strategist's only obligation hereunder shall be to reimburse Dean
Witter Global Asset for all reasonable out-of-pocket fees and expenses incurred
by Dean Witter Global Asset in connection with those transactions.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 This Agreement constitutes the entire agreement between the parties.
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<PAGE> 40
10.2 The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated herein, except
that the representations, warranties and covenants of Dean Witter Global Asset
hereunder shall not survive the dissolution and complete liquidation of Dean
Witter Global Asset in accordance with Section 1.9.
11. TERMINATION
11.1 This Agreement may be terminated and the transactions contemplated
hereby may be abandoned at any time prior to the Closing:
(a) by the mutual written consent of Dean Witter Global Asset and Dean
Witter Strategist;
(b) by either Dean Witter Strategist or Dean Witter Global Asset by
notice to the other, without liability to the terminating party on account of
such termination (providing the terminating party is not otherwise in material
default or breach of this Agreement) if the Closing shall not have occurred on
or before November 30, 1998; or
(c) by either Dean Witter Strategist or Dean Witter Global Asset, in
writing without liability to the terminating party on account of such
termination (provided the terminating party is not otherwise in material default
or breach of this Agreement), if (i) the other party shall fail to perform in
any material respect its agreements contained herein required to be performed on
or prior to the Closing Date, (ii) the other party materially breaches any of
its representations, warranties or covenants contained herein, (iii) the Dean
Witter Global Asset shareholders fail to approve this Agreement at any meeting
called for such purpose at which a quorum was present or (iv) any other
condition herein expressed to be precedent to the obligations of the terminating
party has not been met and it reasonably appears that it will not or cannot be
met.
11.2 (a) Termination of this Agreement pursuant to paragraphs 11.1 (a) or
(b) shall terminate all obligations of the parties hereunder and there shall be
no liability for damages on the part of Dean Witter Strategist or Dean Witter
Global Asset, or the trustees or officers of Dean Witter Strategist or Dean
Witter Global Asset, to any other party or its trustees or officers.
(b) Termination of this Agreement pursuant to paragraph 11.1 (c) shall
terminate all obligations of the parties hereunder and there shall be no
liability for damages on the part of Dean Witter Strategist or Dean Witter
Global Asset, or the trustees or officers of Dean Witter Strategist or Dean
Witter Global Asset, except that any party in breach of this Agreement shall,
upon demand, reimburse the non-breaching party for all reasonable out-of-pocket
fees and expenses incurred in connection with the transactions contemplated by
this Agreement, including legal, accounting and filing fees.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by the parties; provided, however, that
following the meeting of Dean Witter Global Asset's shareholders called by Dean
Witter Global Asset pursuant to paragraph 4.3, no such amendment may have the
effect of changing the provisions for determining the number of Dean Witter
Strategist Shares to be issued to the Dean Witter Global Asset Shareholders
under this Agreement to the detriment of such Dean Witter Global Asset
Shareholders without their further approval.
13. MISCELLANEOUS
13.1 The article and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
A-14
<PAGE> 41
13.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
13.3 This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts.
13.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
13.5 The obligations and liabilities of Dean Witter Strategist hereunder
are solely those of Dean Witter Strategist. It is expressly agreed that no
shareholder, nominee, trustee, officer, agent, or employee of Dean Witter
Strategist shall be personally liable hereunder. The execution and delivery of
this Agreement have been authorized by the trustees of Dean Witter Strategist
and signed by authorized officers of Dean Witter Strategist acting as such, and
neither such authorization by such trustees nor such execution and delivery by
such officers shall be deemed to have been made by any of them individually or
to impose any liability on any of them personally.
13.6 The obligations and liabilities of Dean Witter Global Asset hereunder
are solely those of Dean Witter Global Asset. It is expressly agreed that no
shareholder, nominee, trustee, officer, agent, or employee of Dean Witter Global
Asset shall be personally liable hereunder. The execution and delivery of this
Agreement have been authorized by the trustees of Dean Witter Global Asset and
signed by authorized officers of Dean Witter Global Asset acting as such, and
neither such authorization by such trustees nor such execution and delivery by
such officers shall be deemed to have been made by any of them individually or
to impose any liability on any of them personally.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by a duly authorized officer.
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
By: /s/ CHARLES A. FIUMEFREDDO
-------------------------------------------
Name: Charles A. Fiumefreddo
Title: President
DEAN WITTER STRATEGIST FUND
By: /s/ BARRY FINK
-------------------------------------------
Name: Barry Fink
Title: Vice President
A-15
<PAGE> 42
DEAN WITTER STRATEGIST FUND
PART B
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information relates to the shares of Dean
Witter Strategist Fund ("Dean Witter Strategist") to be issued pursuant to an
Agreement and Plan of Reorganization, dated April 30, 1998, between Dean Witter
Strategist and Dean Witter Global Asset Allocation Fund ("Dean Witter Global
Asset) in connection with the acquisition by Dean Witter Strategist of
substantially all of the assets, subject to stated liabilities, of Dean Witter
Global Asset. This Statement of Additional Information does not constitute a
prospectus. This Statement of Additional Information does not include all
information that a shareholder should consider before voting on the proposals
contained in the Proxy Statement and Prospectus, and, therefore, should be read
in conjunction with the related Proxy Statement and Prospectus, dated June ,
1998. A copy of the Proxy Statement and Prospectus may be obtained without
charge by mailing a written request to Dean Witter Strategist at Two World Trade
Center, New York, New York 10048 or by calling (212) 392-2550 or (800) 896-NEWS
(TOLL FREE). Please retain this document for future reference.
THE DATE OF THIS STATEMENT OF ADDITIONAL INFORMATION IS JUNE , 1998.
<PAGE> 43
PROSPECTUS
SEPTEMBER 26, 1997
Dean Witter Strategist Fund (the "Fund") is an open-end,
non-diversified management investment company, the objective of which is to
maximize the total return on its investments. The Fund seeks to achieve its
investment objective by actively allocating its assets among the major asset
categories of equity securities, fixed-income securities and money market
instruments. See "Investment Objective and Policies."
The Fund offers four classes of shares (each, a "Class"), each
with a different combination of sales charges, ongoing fees and other features.
The different distribution arrangements permit an investor to choose the method
of purchasing shares that the investor believes is most beneficial given the
amount of the purchase, the length of time the investor expects to hold the
shares and other relevant circumstances. See "Purchase of Fund
Shares--Alternative Purchase Arrangements."
This Prospectus sets forth concisely the information you should
know before investing in the Fund. It should be read and retained for future
reference. Additional information about the Fund is contained in the Statement
of Additional Information, dated September 26, 1997, which has been filed with
the Securities and Exchange Commission, and which is available at no charge upon
request of the Fund at the address or telephone numbers listed on this page. The
Statement of Additional Information is incorporated herein by reference.
DEAN WITTER DISTRIBUTORS INC.
DISTRIBUTOR
TABLE OF CONTENTS
Prospectus Summary/2
Summary of Fund Expenses/5
Financial Highlights/7
The Fund and its Management/10
Investment Objective and Policies/10
Risk Considerations/14
Investment Restrictions/18
Purchase of Fund Shares/18
Shareholder Services/30
Redemptions and Repurchases/33
Dividends, Distributions and Taxes/34
Performance Information/35
Additional Information/35
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Dean Witter
Strategist Fund
Two World Trade Center
New York, New York 10048
(212) 392-2550 or
(800) 869-NEWS (toll-free)
<PAGE> 44
PROSPECTUS SUMMARY
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
The The Fund is organized as a Trust, commonly known as a Massachusetts business trust, and is
Fund an open-end, non-diversified management investment company. The Fund invests in equity
securities, fixed-income securities and money market instruments in portions determined by
the Investment Manager to best enable the Fund to maximize the total return on a
shareholder's investment.
- ----------------------------------------------------------------------------------------------------------
Shares Shares of beneficial interest with $0.01 par value (see page 35). The Fund offers four
Offered Classes of shares, each with a different combination of sales charges, ongoing fees and
other features (see pages 18-29).
- ----------------------------------------------------------------------------------------------------------
Minimum The minimum initial investment for each Class is $1,000 ($100 if the account is opened
Purchase through EasyInvest-SM-). Class D shares are only available to persons investing $5 million
or more and to certain other limited categories of investors. For the purpose of meeting
the minimum $5 million investment for Class D shares, and subject to the $1,000 minimum
initial investment for each Class of the Fund, an investor's existing holdings of Class A
shares and shares of funds for which Dean Witter InterCapital Inc. serves as investment
manager ("Dean Witter Funds") that are sold with a front-end sales charge, and concurrent
investments in Class D shares of the Fund and other Dean Witter Funds that are multiple
class funds, will be aggregated. The minimum subsequent investment is $100 (see page 18).
- ----------------------------------------------------------------------------------------------------------
Investment The investment objective of the Fund is to maximize the total return on its investments.
Objective
- ----------------------------------------------------------------------------------------------------------
Investment Dean Witter InterCapital Inc., the Investment Manager of the Fund, and its wholly-owned
Manager subsidiary, Dean Witter Services Company Inc., serve in various investment management,
advisory, management and administrative capacities to 101 investment companies and other
portfolios with assets of approximately $99.5 billion at August 31, 1997 (see page 10).
- ----------------------------------------------------------------------------------------------------------
Management The Investment Manager receives a monthly fee at the annual rate of 0.60% of daily net
Fee assets on assets not exceeding $500 million, scaled down at various asset levels to 0.475%
on daily net assets exceeding $1.5 billion (see page 10).
- ----------------------------------------------------------------------------------------------------------
Distributor Dean Witter Distributors Inc. (the "Distributor"). The Fund has adopted a distribution
and plan pursuant to Rule 12b-1 under the Investment Company Act (the "12b-1 Plan") with
Distribution respect to the distribution fees paid by the Class A, Class B, and Class C shares of the
Fee Fund to the Distributor. The entire 12b-1 fee payable by Class A and a portion of the
12b-1 fee payable by each of Class B and Class C equal to 0.25% of the average daily net
assets of the Class are currently each characterized as a service fee within the meaning
of the National Association of Securities Dealers, Inc. guidelines. The remaining portion
of the 12b-1 fee, if any, is characterized as an asset-based sales charge (see pages 18
and 27).
- ----------------------------------------------------------------------------------------------------------
Alternative Four classes of shares are offered:
Purchase
Arrangements - Class A shares are offered with a front-end sales charge, starting at 5.25% and reduced
for larger purchases. Investments of $1 million or more (and investments by certain other
limited categories of investors) are not subject to any sales charge at the time of
purchase but a contingent deferred sales charge ("CDSC") of 1.0% may be imposed on
redemptions within one year of purchase. The Fund is authorized to reimburse the
Distributor for specific expenses incurred in promoting the distribution of the Fund's
Class A shares and servicing shareholder accounts pursuant to the Fund's 12b-1 Plan.
Reimbursement may in no event exceed an amount equal to payments at an annual rate of
0.25% of average daily net assets of the Class (see pages 18, 22 and 27).
</TABLE>
2
<PAGE> 45
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
- Class B shares are offered without a front-end sales charge, but will in most cases be
subject to a CDSC (scaled down from 5.0% to 1.0%) if redeemed within six years after
purchase. The CDSC will be imposed on any redemption of shares if after such redemption
the aggregate current value of a Class B account with the Fund falls below the aggregate
amount of the investor's purchase payments made during the six years preceding the
redemption. A different CDSC schedule applies to investments by certain qualified plans.
Class B shares are also subject to a 12b-1 fee assessed at the annual rate of (i) 1.0% of
the lesser of: (a) the average daily net sales of the Fund's Class B shares since
implementation of the 12b-1 Plan on November 8, 1989 or (b) the average daily net assets
of Class B attributable to shares issued since implementation of the 12b-1 Plan, plus (ii)
0.25% of the average daily net assets of Class B attributable to shares issued prior to
implementation of the 12b-1 Plan. All shares of the Fund held prior to July 28, 1997
(other than shares which were purchased prior to November 8, 1989 (and, with respect to
such shares, certain shares acquired through reinvestment of dividends and capital gains
distributions) and the shares held by certain employee benefit plans established by Dean
Witter Reynolds Inc. and its affiliate, SPS Transaction Services, Inc.) have been
designated Class B shares. Shares which were purchased prior to November 8, 1989 (and,
with respect to such shares, certain shares acquired through reinvestment of dividends and
capital gains distributions) and shares held by those employee benefit plans prior to July
28, 1997 have been designated Class D shares. Shares held before May 1, 1997 that have
been designated Class B shares will convert to Class A shares in May, 2007. In all other
instances, Class B shares convert to Class A shares approximately ten years after the date
of the original purchase (see pages 18, 24 and 27).
- Class C shares are offered without a front-end sales charge, but will in most cases be
subject to a CDSC of 1.0% if redeemed within one year after purchase. The Fund is
authorized to reimburse the Distributor for specific expenses incurred in promoting the
distribution of the Fund's Class C shares and servicing shareholder accounts pursuant to
the Fund's 12b-1 Plan. Reimbursement may in no event exceed an amount equal to payments at
an annual rate of 1.0% of average daily net assets of the Class (see pages 18 and 27).
- Class D shares are offered only to investors meeting an initial investment minimum of $5
million and to certain other limited categories of investors. Class D shares are offered
without a front-end sales charge or CDSC and are not subject to any 12b-1 fee (see pages
18 and 27).
- ----------------------------------------------------------------------------------------------------------
Dividends Dividends from net investment income are paid quarterly and distributions from net capital
and gains, if any, are paid at least once per year. The Fund may, however, determine to retain
Capital Gains all or part of any net long-term capital gains in any year for reinvestment. Dividends and
Distributions capital gains distributions paid on shares of a Class are automatically reinvested in
additional shares of the same Class at net asset value unless the shareholder elects to
receive cash. Shares acquired by dividend and distribution reinvestment will not be
subject to any sales charge or CDSC (see pages 30 and 34).
- ----------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE> 46
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Redemption Shares are redeemable by the shareholder at net asset value less any applicable CDSC on
Class A, Class B or Class C shares. An account may be involuntarily redeemed if the total
value of the account is less than $100 or, if the account was opened through
EasyInvest-SM-, if after twelve months the shareholder has invested less than $1,000 in
the account (see page 33).
- ----------------------------------------------------------------------------------------------------------
Special The net asset value of the Fund's shares will fluctuate with changes in the market value
Risk of its portfolio securities. The level of income payable to the investor will vary
Considerations depending upon the market allocation determined by the Fund's Investment Manager and with
various market determinants such as interest rates. The Fund may make various investments
and may engage in various investment strategies including option and futures transactions,
when-issued and delayed delivery securities and forward commitments, when, as and if
issued securities, foreign securities and repurchase agreements (pages 10-18). The Fund is
a non-diversified investment company and, as such, is not subject to the diversification
requirements of the Investment Company Act of 1940, as amended (see page 17).
- ----------------------------------------------------------------------------------------------------------
</TABLE>
THE ABOVE IS QUALIFIED IN ITS ENTIRETY BY THE DETAILED INFORMATION APPEARING
ELSEWHERE IN THIS PROSPECTUS AND IN THE STATEMENT OF ADDITIONAL INFORMATION.
4
<PAGE> 47
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
The following table illustrates all expenses and fees that a shareholder of
the Fund will incur. The expenses and fees set forth in the table are based on
the expenses and fees for the fiscal year ended July 31, 1997.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS D
------- ------- ------- -------
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
- -------------------------------------------------------
Maximum Sales Charge Imposed on Purchases (as a
percentage of offering price)........................ 5.25%(1) None None None
Sales Charge Imposed on Dividend Reinvestments......... None None None None
Maximum Contingent Deferred Sales Charge (as a
percentage of original purchase price or redemption
proceeds)............................................ None(2) 5.00%(3) 1.00%(4) None
Redemption Fees........................................ None None None None
Exchange Fee........................................... None None None None
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF
AVERAGE NET ASSETS)
Management Fees........................................ 0.56% 0.56% 0.56% 0.56%
12b-1 Fees (5) (6)..................................... 0.25% 0.90%(7) 1.00% None
Other Expenses......................................... 0.11% 0.11% 0.11% 0.11%
Total Fund Operating Expenses (8)...................... 0.92% 1.57% 1.67% 0.67%
</TABLE>
- ------------
(1) REDUCED FOR PURCHASES OF $25,000 AND OVER (SEE "PURCHASE OF FUND
SHARES--INITIAL SALES CHARGE ALTERNATIVE--CLASS A SHARES").
(2) INVESTMENTS THAT ARE NOT SUBJECT TO ANY SALES CHARGE AT THE TIME OF PURCHASE
ARE SUBJECT TO A CDSC OF 1.00% THAT WILL BE IMPOSED ON REDEMPTIONS MADE
WITHIN ONE YEAR AFTER PURCHASE, EXCEPT FOR CERTAIN SPECIFIC CIRCUMSTANCES
(SEE "PURCHASE OF FUND SHARES--INITIAL SALES CHARGE ALTERNATIVE--CLASS A
SHARES").
(3) THE CDSC IS SCALED DOWN TO 1.00% DURING THE SIXTH YEAR, REACHING ZERO
THEREAFTER.
(4) ONLY APPLICABLE TO REDEMPTIONS MADE WITHIN ONE YEAR AFTER PURCHASE (SEE
"PURCHASE OF FUND SHARES-- LEVEL LOAD ALTERNATIVE--CLASS C SHARES").
(5) THE 12b-1 FEE IS ACCRUED DAILY AND PAYABLE MONTHLY. THE ENTIRE 12b-1 FEE
PAYABLE BY CLASS A AND A PORTION OF THE 12b-1 FEE PAYABLE BY EACH OF CLASS B
AND CLASS C EQUAL TO 0.25% OF THE AVERAGE DAILY NET ASSETS OF THE CLASS ARE
CURRENTLY EACH CHARACTERIZED AS A SERVICE FEE WITHIN THE MEANING OF NATIONAL
ASSOCIATION OF SECURITIES DEALERS, INC. ("NASD") GUIDELINES AND ARE PAYMENTS
MADE FOR PERSONAL SERVICE AND/OR MAINTENANCE OF SHAREHOLDER ACCOUNTS. THE
REMAINDER OF THE 12b-1 FEE, IF ANY, IS AN ASSET-BASED SALES CHARGE, AND IS A
DISTRIBUTION FEE PAID TO THE DISTRIBUTOR TO COMPENSATE IT FOR THE SERVICES
PROVIDED AND THE EXPENSES BORNE BY THE DISTRIBUTOR AND OTHERS IN THE
DISTRIBUTION OF THE FUND'S SHARES (SEE "PURCHASE OF FUND SHARES--PLAN OF
DISTRIBUTION").
(6) UPON CONVERSION OF CLASS B SHARES TO CLASS A SHARES, SUCH SHARES WILL BE
SUBJECT TO THE LOWER 12b-1 FEE APPLICABLE TO CLASS A SHARES. NO SALES CHARGE
IS IMPOSED AT THE TIME OF CONVERSION OF CLASS B SHARES TO CLASS A SHARES.
CLASS C SHARES DO NOT HAVE A CONVERSION FEATURE AND, THEREFORE, ARE SUBJECT
TO AN ONGOING 1.00% DISTRIBUTION FEE (SEE "PURCHASE OF FUND
SHARES--ALTERNATIVE PURCHASE ARRANGEMENTS").
(7) THE 12b-1 FEE HAS BEEN RESTATED TO REFLECT WHAT THE FEE WOULD HAVE BEEN IF
THE SHARES THAT WERE DESIGNATED CLASS D SHARES ON JULY 28, 1997 HAD NOT BEEN
INCLUDED IN THE FUND DURING THE FISCAL YEAR ENDED JULY 31, 1997. THE ACTUAL
12b-1 FEE WAS 0.89%.
(8) THERE WERE NO OUTSTANDING SHARES OF CLASS A, CLASS C OR CLASS D PRIOR TO
JULY 28, 1997. ACCORDINGLY, "TOTAL FUND OPERATING EXPENSES," AS SHOWN ABOVE
WITH RESPECT TO THOSE CLASSES, ARE BASED UPON THE SUM OF 12b-1 FEES,
MANAGEMENT FEES AND ESTIMATED "OTHER EXPENSES."
5
<PAGE> 48
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
10
EXAMPLES 1 YEAR 3 YEARS 5 YEARS YEARS
- ---------------------------------------------------------------------------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment assuming (1) a 5%
annual return and (2) redemption at the end of each time period:
Class A....................................................................... $ 61 $ 80 $ 101 $ 159
Class B....................................................................... $ 66 $ 80 $ 106 $ 187
Class C....................................................................... $ 27 $ 53 $ 91 $ 197
Class D....................................................................... $ 7 $ 21 $ 37 $ 83
You would pay the following expenses on the same $1,000 investment assuming no
redemption at the end of the period:
Class A....................................................................... $ 61 $ 80 $ 101 $ 159
Class B....................................................................... $ 16 $ 50 $ 86 $ 187
Class C....................................................................... $ 17 $ 53 $ 91 $ 197
Class D....................................................................... $ 7 $ 21 $ 37 $ 83
</TABLE>
THE ABOVE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR PERFORMANCE. ACTUAL EXPENSES OF EACH CLASS MAY BE GREATER OR
LESS THAN THOSE SHOWN.
The purpose of this table is to assist the investor in understanding the
various costs and expenses that an investor in the Fund will bear directly or
indirectly. For a more complete description of these costs and expenses, see
"The Fund and its Management," "Purchase of Fund Shares--Plan of Distribution"
and "Redemptions and Repurchases."
Long-term shareholders of Class B and Class C may pay more in sales charges,
including distribution fees, than the economic equivalent of the maximum
front-end sales charges permitted by the NASD.
6
<PAGE> 49
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following ratios and per share data for a share of beneficial interest
outstanding throughout each period have been audited by Price Waterhouse LLP,
independent accountants. The financial highlights should be read in conjunction
with the financial statements, the notes thereto and the unqualified report of
independent accountants, which are contained in the Statement of Additional
Information. Further information about the performance of the Fund is contained
in the Fund's Annual Report to Shareholders, which may be obtained without
charge upon request to the Fund.
<TABLE>
<CAPTION>
FOR THE PERIOD
OCTOBER 31,
FOR THE YEAR ENDED JULY 31 1988*
--------------------------------------------------------------------------- THROUGH
CLASS B SHARES 1997** 1996 1995 1994 1993 1992 1991 1990 JULY 31, 1989
------ ------ ------ ------ ------ ------ ------ ------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning
of period................ $16.02 $15.87 $14.43 $14.59 $14.39 $13.09 $11.65 $11.37 $9.45
------ ------ ------ ------ ------ ------ ------ ------ ------
Net investment income..... 0.39 0.30 0.34 0.30 0.26 0.27 0.27 0.23 0.38
Net realized and
unrealized gain.......... 4.10 1.43 1.86 0.22 0.81 1.27 1.50 0.55 1.84
------ ------ ------ ------ ------ ------ ------ ------ ------
Total from investment
operations............... 4.49 1.73 2.20 0.52 1.07 1.54 1.77 0.78 2.22
------ ------ ------ ------ ------ ------ ------ ------ ------
Less dividends and
distributions from:
Net investment
income................. (0.36) (0.32) (0.29) (0.26) (0.31) (0.24) (0.26) (0.29) (0.30)
Net realized gain...... (1.40) (1.26) (0.47) (0.42) (0.56) -- (0.07) (0.21) --
------ ------ ------ ------ ------ ------ ------ ------ ------
Total dividends and
distributions............ (1.76) (1.58) (0.76) (0.68) (0.87) (0.24) (0.33) (0.50) (0.30)
------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of
period................... $18.75 $16.02 $15.87 $14.43 $14.59 $14.39 $13.09 $11.65 $11.37
====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL INVESTMENT
RETURN+.................. 29.73% 11.47% 16.05% 3.53% 7.59% 11.88% 15.67% 7.21% 23.76%(1)
RATIOS TO AVERAGE NET
ASSETS:
Expenses.................. 1.56% 1.58% 1.63% 1.62% 1.62% 1.63% 1.59% 1.53% 0.97%(2)(3)
Net investment income..... 2.29% 1.88% 2.35% 2.03% 1.90% 2.19% 2.37% 2.39% 6.00%(2)(3)
SUPPLEMENTAL DATA:
Net assets, end of period,
in millions.............. $1,541 $1,259 $878 $806 $783 $441 $238 $196 $48
Portfolio turnover rate... 158% 174% 179% 90% 98% 79% 140% 101% 70%(1)
Average commission rate
paid..................... $0.0595 $0.0597 -- -- -- -- -- -- --
</TABLE>
- ------------
* COMMENCEMENT OF OPERATIONS.
** PRIOR TO JULY 28, 1997, THE FUND ISSUED ONE CLASS OF SHARES. ALL
SHARES OF THE FUND HELD PRIOR TO THAT DATE, OTHER THAN SHARES WHICH
WERE PURCHASED PRIOR TO NOVEMBER 8, 1989 (AND WITH RESPECT TO SUCH
SHARES, CERTAIN SHARES ACQUIRED THROUGH REINVESTMENT OF DIVIDENDS AND
CAPITAL GAINS DISTRIBUTIONS (COLLECTIVELY THE "OLD SHARES")) AND
SHARES HELD BY CERTAIN EMPLOYEE BENEFIT PLANS ESTABLISHED BY DEAN
WITTER REYNOLDS INC., AND ITS AFFILIATE, SPS TRANSACTION SERVICES,
INC., HAVE BEEN DESIGNATED CLASS B SHARES. THE OLD SHARES AND SHARES
HELD BY THOSE EMPLOYEE BENEFIT PLANS PRIOR TO JULY 28, 1997 HAVE BEEN
DESIGNATED CLASS D SHARES.
+ DOES NOT REFLECT THE DEDUCTION OF SALES CHARGE. CALCULATED BASED ON
THE NET ASSET VALUE AS OF THE LAST BUSINESS DAY OF THE PERIOD.
(1) NOT ANNUALIZED.
(2) ANNUALIZED.
(3) IF THE FUND HAD BORNE ALL ITS EXPENSES THAT WERE ASSUMED OR WAIVED BY
THE INVESTMENT MANAGER, THE ABOVE ANNUALIZED EXPENSE AND NET
INVESTMENT INCOME RATIOS WOULD HAVE BEEN 1.48% AND 5.48%,
RESPECTIVELY.
7
<PAGE> 50
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 28, 1997*
THROUGH
CLASS A SHARES JULY 31, 1997
-------------
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................. $ 18.40
-------
Net investment income................................................. 0.01
Net realized and unrealized gain...................................... 0.34
-------
Total from investment operations...................................... 0.35
Net asset value, end of period........................................ $ 18.75
=======
TOTAL INVESTMENT RETURN+.............................................. 1.90%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 0.92%(2)
Net investment income................................................. 5.06%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $79
Portfolio turnover rate............................................... 158%
Average commission rate paid.......................................... $0.0595
CLASS C SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................. $ 18.40
-------
Net investment income................................................. 0.01
Net realized and unrealized gain...................................... 0.34
-------
Total from investment operations...................................... 0.35
-------
Net asset value, end of period........................................ $ 18.75
=======
TOTAL INVESTMENT RETURN+.............................................. 1.90%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 1.67%(2)
Net investment income................................................. 4.38%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $114
Portfolio turnover rate............................................... 158%
Average commission rate paid.......................................... $0.0595
</TABLE>
- ------------
* THE DATE SHARES WERE FIRST ISSUED.
+ DOES NOT REFLECT THE DEDUCTION OF SALES CHARGE. CALCULATED BASED ON THE NET
ASSET VALUE AS OF THE LAST BUSINESS DAY OF THE PERIOD.
(1) NOT ANNUALIZED.
(2) ANNUALIZED.
8
<PAGE> 51
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 28, 1997*
THROUGH
CLASS D SHARES JULY 31, 1997
---------------
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................. $ 18.40
-------
Net investment income................................................. 0.01
Net realized and unrealized gain...................................... 0.34
-------
Total from investment operations...................................... 0.35
-------
Net asset value, end of period........................................ $ 18.75
=======
TOTAL INVESTMENT RETURN+.............................................. 1.90%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 0.67%(2)
Net investment income................................................. 5.40%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $57,938
Portfolio turnover rate............................................... 158%
Average commission rate paid.......................................... $0.0595
</TABLE>
- ------------
* THE DATE SHARES WERE FIRST ISSUED. SHAREHOLDERS WHO HELD SHARES OF THE FUND
PRIOR TO JULY 28, 1997 (THE DATE THE FUND CONVERTED TO A MULTIPLE CLASS SHARE
STRUCTURE) SHOULD REFER TO THE FINANCIAL HIGHLIGHTS OF CLASS B TO OBTAIN THE
HISTORICAL PER SHARE DATA AND RATIO INFORMATION OF THEIR SHARES.
+ CALCULATED BASED ON THE NET ASSET VALUE AS OF THE LAST BUSINESS DAY OF THE
PERIOD.
(1) NOT ANNUALIZED.
(2) ANNUALIZED.
9
<PAGE> 52
THE FUND AND ITS MANAGEMENT
- --------------------------------------------------------------------------------
Dean Witter Strategist Fund (the "Fund") is an open-end, non-diversified
management investment company. The Fund is a trust of the type commonly known as
a "Massachusetts business trust" and was organized under the laws of
Massachusetts on August 5, 1988.
Dean Witter InterCapital Inc. ("InterCapital" or the "Investment Manager"),
whose address is Two World Trade Center, New York, New York 10048, is the Fund's
Investment Manager. The Investment Manager, which was incorporated in July,
1992, is a wholly-owned subsidiary of Morgan Stanley, Dean Witter, Discover &
Co, a preeminent global financial services firm that maintains leading market
positions in each of its three primary businesses--securities, asset management
and credit services.
InterCapital and its wholly-owned subsidiary, Dean Witter Services Company
Inc., serve in various investment management, advisory, management and
administrative capacities to 101 investment companies, thirty of which are
listed on the New York Stock Exchange, with combined assets of approximately
$95.9 billion as of August 31, 1997. The Investment Manager also manages and
advises portfolios of pension plans, other institutions and individuals which
aggregated approximately $3.6 billion at such date.
The Fund has retained the Investment Manager to provide administrative
services, manage its business affairs, manage the investment of the Fund's
assets and determine the allocations of the Fund's assets, including the placing
of orders for the purchase and sale of portfolio securities. InterCapital has
retained Dean Witter Services Company Inc. to perform the aforementioned
administrative services for the Fund.
The Fund's Trustees review the various services provided by or under the
direction of the Investment Manager to ensure that the Fund's general investment
policies and programs are being properly carried out and that administrative
services are being provided to the Fund in a satisfactory manner.
As full compensation for the services and facilities furnished to the Fund
and for expenses of the Fund assumed by the Investment Manager, the Fund pays
the Investment Manager monthly compensation calculated daily at the annual rate
of 0.60% of the portion of the Fund's net assets not exceeding $500 million,
scaled down at various asset levels to 0.475% on the portion of the Fund's net
assets exceeding $1.5 billion. For the fiscal year ended July 31, 1997, the Fund
accrued total compensation to the Investment Manager amounting to 0.56% of the
Fund's average daily net assets and the total expenses of Class B amounted to
1.56% of the average daily net assets of Class B. Shares of Class A, Class C and
Class D were first issued on July 28, 1997. The expenses of the Fund include:
the fee of the Investment Manager; the fee pursuant to the Plan of Distribution
(see "Purchase of Fund Shares"); taxes; transfer agent, custodian and auditing
fees; certain legal fees; and printing and other expenses relating to the Fund's
operations which are not expressly assumed by the Investment Manager under its
Investment Management Agreement with the Fund.
INVESTMENT OBJECTIVE AND POLICIES
- --------------------------------------------------------------------------------
The investment objective of the Fund is to maximize the total return on its
investments. This is a fundamental policy and cannot be changed without the
approval of the Fund's shareholders. In seeking to achieve its objective, the
Fund actively allocates assets among the major asset categories of equity
securities, fixed-income securities and money market instruments. Total return
consists of current income (including dividends, interest and, in the case of
discounted instruments, discount accruals) and capital appreciation (including
realized and unrealized capital gains and losses). There can be
10
<PAGE> 53
no assurance that the investment objective of the Fund will be achieved.
The achievement of the Fund's investment objective depends upon the ability
of the Investment Manager to correctly assess the effects of economic and market
trends on different sectors of the market. The Investment Manager believes that
superior investment returns at lower risk are achievable by actively allocating
resources to the equity, debt and money market sectors of the market as opposed
to relying solely on just one market. At times, the equity market may hold a
higher potential return than the debt market and would warrant a higher asset
allocation. The reverse would be true when the bond market potential return is
higher. Short duration bonds and money market instruments can be used to soften
market declines when both bonds and equities are fully priced. Conserving
capital during declining markets can contribute to maximizing total return over
a longer period of time. In addition, the securities of companies within various
economic sectors may at times offer higher returns than other sectors and can
thus contribute to superior returns. Finally, the Investment Manager believes
that superior stock selection can also contribute to superior total return.
To facilitate reallocation of the Fund's assets in accordance with the
Investment Manager's views as to shifts in the marketplace, the Investment
Manager employs transactions in futures contracts and options thereon. For
example, if the Investment Manager believes that a ten percent increase in that
portion of the Fund's assets invested in fixed-income securities and a
concomitant decrease in that portion of the Fund's assets invested in equity
securities is timely, the Fund might purchase interest rate futures, such as
Treasury bond futures, and sell stock index futures, such as the Standard &
Poor's Corporation ("S&P") 500 Stock Index futures, in equivalent amounts. The
utilization of futures transactions, rather than the purchase and sale of equity
and fixed-income securities, increases the speed and efficacy of the Fund's
asset reallocations. See below for a discussion of futures transactions.
Within the equity sector, the Investment Manager actively allocates funds to
those economic sectors expected to benefit from major trends and to individual
stocks which are deemed to have superior investment potential. The Fund may
purchase equity securities (including convertible debt obligations and
convertible preferred stock) sold on the New York, American and other stock
exchanges and in the over-the-counter market. In addition, the Fund may purchase
and sell warrants and purchase and write listed and over-the-counter options on
individual stocks and stock indexes to hedge against adverse price movements in
its equity portfolio and to increase its total return through the receipt of
premium income. The Fund may also purchase and sell stock index futures and
options thereon to hedge against adverse price movements in its equity portfolio
and to facilitate asset reallocations into and out of the equity area.
Within the fixed-income sector of the market, the Investment Manager seeks
to maximize the return on its investments by adjusting maturities and coupon
rates as well as by exploiting yield differentials among different types of
investment grade bonds. Fixed-income securities in which the Fund may invest are
short-term to intermediate (one to five year maturities) and intermediate to
long-term (greater than five year maturities) debt securities and preferred
stocks, including U.S. Government securities (securities issued or guaranteed as
to principal and interest by the United States or its agencies and
instrumentalities) and corporate securities which are rated at the time of
purchase Baa or better by Moody's Investors Service, Inc. ("Moody's") (while
bonds rated Baa by Moody's are considered investment grade, they have
speculative characteristics as well) or BBB or better by S&P, or which, if
unrated, are deemed to be of comparable quality by the Fund's Trustees (a
description of corporate bond ratings is contained in the Appendix to the
Statement of Additional Information). U.S. Government securities which may be
purchased
11
<PAGE> 54
include zero coupon securities. In addition, the Fund may purchase and write
listed and over-the-counter options on fixed-income securities to hedge against
adverse price movements in its fixed-income portfolio and to increase its total
return through the receipt of premium income. The Fund may also purchase and
sell interest rate futures and options thereon to hedge against adverse price
movements in its fixed-income portfolio and to facilitate asset reallocations
into and out of the fixed-income area.
Within the money market sector of the market, the Investment Manager seeks
to maximize returns by exploiting spreads among short-term instruments. The
money market portion of the Fund's portfolio will contain short-term (maturities
of up to thirteen months) fixed-income securities, issued by private and
governmental institutions. Such securities may include: U.S. Government
securities; bank obligations; Eurodollar certificates of deposit issued by
foreign branches of domestic banks; obligations of savings institutions; fully
insured certificates of deposit; and commercial paper rated within the two
highest grades by S&P or the highest grade by Moody's or, if not rated, issued
by a company having an outstanding debt issue rated at least AA by S&P or Aa by
Moody's. For a discussion of the risks of investing in Eurodollar certificates
of deposit, see "Risk Considerations--Foreign Securities" below.
FOREIGN SECURITIES. The Fund may invest up to 20% of its total assets in
securities issued by foreign governments and other foreign issuers and in
foreign currency issues of domestic issuers, but not more than 10% of its total
assets in such securities, whether issued by a foreign or domestic issuer, which
are denominated in foreign currency. With regard to foreign fixed-income
securities, the Investment Manager believes that in many instances such
securities may provide higher yields than similar securities of domestic
issuers. For a discussion of the risks of investing in foreign securities, see
"Risk Considerations" below.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements, which
may be viewed as a type of secured lending by the Fund, and which typically
involve the acquisition by the Fund of debt securities from a selling financial
institution such as a bank, savings and loan association or broker-dealer. The
agreement provides that the Fund will sell back to the institution, and that the
institution will repurchase, the underlying security at a specified price and at
a fixed time in the future, usually not more than seven days from the date of
purchase. For a discussion of the risks of investing in repurchase agreements,
see "Risk Considerations" below.
PRIVATE PLACEMENTS. The Fund may invest in securities which are subject to
restrictions on resale because they have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), or which are
otherwise not readily marketable. These securities are generally referred to as
private placements or restricted securities. The Securities and Exchange
Commission has adopted Rule 144A under the Securities Act, which permits the
Fund to sell restricted securities to qualified institutional buyers without
limitation. The Investment Manager, pursuant to procedures adopted by the
Trustees of the Fund, will make a determination as to the liquidity of each
restricted security purchased by the Fund. If a restricted security is
determined to be "liquid," such security will not be included within the
category "illiquid securities," which is limited by the Fund's investment
restrictions to 10% of the Fund's total assets. For a discussion of the risks of
investing in private placements, see "Risk Considerations" below.
INVESTMENT IN REAL ESTATE INVESTMENT TRUSTS. The Fund may invest in real
estate investment trusts, which pool investors' funds for investments primarily
in commercial real estate properties. Investment in real estate investment
trusts may be the most practical available means for the Fund to invest in the
real estate industry (the Fund is prohibited from investing in real estate
directly). As a shareholder in a real estate investment trust, the Fund would
bear its ratable share of the real estate investment trust's expenses, including
its advisory and administration
12
<PAGE> 55
fees. At the same time the Fund would continue to pay its own investment
management fees and other expenses, as a result of which the Fund and its
shareholders in effect will be absorbing duplicate levels of fees with respect
to investments in real estate investment trusts.
OPTIONS. The Fund also may purchase and sell (write) call and put options
on debt and equity securities which are listed on Exchanges or are written in
over-the-counter transactions ("OTC options"). Listed options, which are
currently listed on several different Exchanges, are issued by the Options
Clearing Corporation ("OCC"). Ownership of a listed call option gives the Fund
the right to buy from the OCC the underlying security covered by the option at
the stated exercise price (the price per unit of the underlying security) by
filing an exercise notice prior to the expiration date of the option. The writer
(seller) of the option would then have the obligation to sell to the OCC the
underlying security at that exercise price prior to the expiration date of the
option, regardless of its then current market price. Ownership of a listed put
option would give the Fund the right to sell the underlying security to the OCC
at the stated exercise price.
OTC OPTIONS. OTC options are purchased from or sold (written) to dealers or
financial institutions which have entered into direct agreements with the Fund.
With OTC options, such variables as expiration date, exercise price and premium
will be agreed upon between the Fund and the transacting dealer, without the
intermediation of a third party such as the OCC. The Fund will engage in OTC
option transactions only with primary U.S. Government securities dealers
recognized by the Federal Reserve Bank of New York.
COVERED CALL WRITING. The Fund is permitted to write covered call options
on portfolio securities, without limit, in order to aid it in achieving its
investment objective. As a writer of a call option, the Fund has the obligation,
upon notice of exercise of the option, to deliver the security underlying the
option (certain listed call options written by the Fund will be exercisable by
the purchaser only on a specific date). See "Options and Futures Transactions--
Covered Call Writing" in the Statement of Additional Information.
COVERED PUT WRITING. As a writer of covered put options, the Fund incurs an
obligation to buy the security underlying the option from the purchaser of the
put at the option's exercise price at any time during the option period. The
Fund will write put options for two purposes: (1) to receive the premiums paid
by purchasers; and (2) when the Investment Manager wishes to purchase the
security underlying the option at a price lower than its current market price,
in which case it will write the covered put at an exercise price reflecting the
lower purchase price sought. See "Options and Futures Transactions--Covered Put
Writing" in the Statement of Additional Information.
PURCHASING CALL AND PUT OPTIONS. The Fund may invest up to 5% of its total
assets in the purchase of put and call options on securities and stock indexes.
The Fund may purchase call options only in order to close out a covered call
position. The Fund may purchase put options on securities which it holds (or has
the right to acquire) in its portfolio only to protect itself against a decline
in the value of the security. The Fund may also purchase put options to close
out written put positions in a manner similar to call option closing purchase
transactions. There are no other limits on the Fund's ability to purchase call
and put options.
STOCK INDEX OPTIONS. The Fund may purchase and write options on stock
indexes. Options on stock indexes are similar to options on stock except that,
rather than the right to take or make delivery of stock at a specified price, an
option on a stock index gives the holder the right to receive, upon exercise of
the option, an amount of cash if the closing level of the stock index upon which
the option is based is greater than, in the case of a call, or less than, in the
case of a put, the exercise price of the option. See "Stock Index Options" and
"Risks of Options on Indexes" in the Statement of Additional Information.
13
<PAGE> 56
FUTURES CONTRACTS. The Fund may purchase and sell interest rate and stock
index futures contracts ("futures contracts") that are traded on U.S. commodity
exchanges on such underlying securities as U.S. Treasury bonds, notes, and bills
and GNMA Certificates ("interest rate futures") and such indexes as the S&P 500
Index and the New York Stock Exchange Composite Index ("stock index futures")
and the Moody's Investment-Grade Corporate Bond Index ("bond index futures"). As
a futures contract purchaser, the Fund incurs an obligation to take delivery of
a specified amount of the obligation underlying the contract at a specified time
in the future for a specified price. As a seller of a futures contract, the Fund
incurs an obligation to deliver the specified amount of the underlying
obligation at a specified time in return for an agreed upon price. The Fund will
purchase or sell interest rate futures contracts and bond index futures
contracts for the purpose of hedging its fixed-income portfolio (or anticipated
portfolio) securities against changes in prevailing interest rates. The Fund
will purchase or sell stock index futures contracts for the purpose of hedging
its equity portfolio (or anticipated portfolio) securities against changes in
their prices. As noted above, the Fund may also engage in futures transactions
to facilitate reallocation of the Fund's assets. The Fund also may purchase and
write call and put options on futures contracts and enter into closing
transactions with respect to such options to terminate an existing position. See
"Options and Futures Transactions--Futures Contracts" and "Options on Futures
Contracts" in the Statement of Additional Information.
For a discussion of the risks of options and futures transactions, see "Risk
Considerations" below and "Options and Futures Transactions" in the Statement of
Additional Information.
------------------------
The Fund may purchase securities on a when-issued or delayed delivery basis,
may purchase or sell securities on a forward commitment basis, may purchase
securities on a "when, as and if issued" basis, may lend its portfolio
securities, and may enter into reverse repurchase agreements, as discussed under
"Risk Considerations" below.
RISK CONSIDERATIONS
The net asset value of the Fund's shares will fluctuate with changes in the
market value of its portfolio securities. The market value of the Fund's
portfolio securities will increase or decrease due to a variety of economic,
market or political factors which cannot be predicted. The level of income
payable to the investor will vary depending upon the market allocation
determined by the Investment Manager and with various determinants such as
interest rates.
FOREIGN SECURITIES. Foreign securities investments may be affected by
changes in currency rates or exchange control regulations, changes in
governmental administration or economic or monetary policy (in the United States
and abroad) or changed circumstances in dealings between nations. Fluctuations
in the relative rates of exchange between the currencies of different nations
will affect the value of the Fund's investments denominated in foreign currency.
Changes in foreign currency exchange rates relative to the U.S. dollar will
affect the U.S. dollar value of the Fund's assets denominated in that currency
and thereby impact upon the Fund's total return on such assets.
Foreign currency exchange rates are determined by forces of supply and
demand on the foreign exchange markets. These forces are themselves affected by
the international balance of payments and other economic and financial
conditions, government intervention, speculation and other factors. Moreover,
foreign currency exchange rates may be affected by the regulatory control of the
exchanges on which the currencies trade. The Fund will incur costs in connection
with conversions between various currencies.
Investments in foreign securities will also occasion risks relating to
political and economic developments abroad, including the possibility of
expropriations or confiscatory taxation, limitations on the use or transfer of
Fund assets and any effects of
14
<PAGE> 57
foreign social, economic or political instability. Foreign companies are not
subject to the regulatory requirements of U.S. companies and, as such, there may
be less publicly available information about such companies. Moreover, foreign
companies are not subject to uniform accounting, auditing and financial
reporting standards and requirements comparable to those applicable to U.S.
companies. Finally, in the event of a default of any foreign debt obligations,
it may be more difficult for the Fund to obtain or enforce a judgment against
the issuers of such securities.
Securities of foreign issuers may be less liquid than comparable securities
of U.S. issuers and, as such, their price changes may be more volatile.
Furthermore, foreign exchanges and broker-dealers are generally subject to less
government and exchange scrutiny and regulation than their American
counterparts. Brokerage commissions, dealer concessions and other transaction
costs may be higher on foreign markets than in the U.S. In addition, differences
in clearance and settlement procedures on foreign markets may occasion delays in
settlements of the Fund's trades effected in such markets. As such, the
inability to dispose of portfolio securities due to settlement delays could
result in losses to the Fund due to subsequent declines in value of such
securities and the inability of the Fund to make intended security purchases due
to settlement problems could result in a failure of the Fund to make potentially
advantageous investments. To the extent the Fund purchases Eurodollar
certificates of deposit issued by foreign branches of domestic United States
banks, consideration will be given to their domestic marketability, the lower
reserve requirements normally mandated for overseas banking operations, the
possible impact of interruptions in the flow of international currency
transactions and future international political and economic developments which
might adversely affect the payment of principal or interest.
REPURCHASE AGREEMENTS. While repurchase agreements involve certain risks
not associated with direct investments in debt securities, the Fund follows
procedures designed to minimize those risks. These procedures include effecting
repurchase transactions only with large, well-capitalized and well-established
financial institutions whose financial condition will be continually monitored
by the Investment Manager subject to procedures established by the Board of
Trustees of the Fund. In addition, the value of the collateral underlying the
repurchase agreement will be at least equal to the repurchase price, including
any accrued interest earned on the repurchase agreement. In the event of a
default or bankruptcy by a selling financial institution, the Fund will seek to
liquidate such collateral. However, the exercising of the Fund's right to
liquidate such collateral could involve certain costs or delays and, to the
extent that proceeds from any sale upon a default of the obligation to
repurchase were less than the repurchase price, the Fund could suffer a loss.
The Fund may not invest in repurchase agreements that do not mature within seven
days if any such investment, together with any other illiquid assets held by the
Fund, amounts to more than 10% of its total assets.
PRIVATE PLACEMENTS. Limitations on the resale of private placements may
have an adverse effect on their marketability, and may prevent the Fund from
disposing of them promptly at reasonable prices. The Fund may have to bear the
expense of registering such securities for resale and the risk of substantial
delays in effecting such registration. In the case of restricted securities
determined to be "liquid" pursuant to Rule 144A under the Securities Act, the
Fund's illiquidity could increase if qualified institutional buyers become
unavailable.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES AND FORWARD COMMITMENTS. From
time to time, in the ordinary course of business, the Fund may purchase
securities on a when-issued or delayed delivery basis or may purchase or sell
securities on a forward commitment basis. When such transactions are negotiated,
the price is fixed at the time of the commitment, but delivery and payment can
take place a month or more after the date of the commitment. There is no overall
limit on the percentage of
15
<PAGE> 58
the Fund's assets which may be committed to the purchase of securities on a
when-issued, delayed delivery or forward commitment basis. An increase in the
percentage of the Fund's assets committed to the purchase of securities on a
when-issued, delayed delivery or forward commitment basis may increase the
volatility of the Fund's net asset value.
WHEN, AS AND IF ISSUED SECURITIES. The Fund may purchase securities on a
"when, as and if issued" basis under which the issuance of the security depends
upon the occurrence of a subsequent event, such as approval of a merger,
corporate reorganization, leveraged buyout or debt restructuring. If the
anticipated event does not occur and the securities are not issued, the Fund
will have lost an investment opportunity. There is no overall limit on the
percentage of the Fund's assets which may be committed to the purchase of
securities on a "when, as and if issued" basis. An increase in the percentage of
the Fund's assets committed to the purchase of securities on a "when, as and if
issued" basis may increase the volatility of the Fund's net asset value.
OPTIONS AND FUTURES TRANSACTIONS. The Fund may close out its position as
writer of an option, or as a buyer or seller of a futures contract, only if a
liquid secondary market exists for options or futures contracts of that series.
There is no assurance that such a market will exist, particularly in the case of
OTC options, as such options will generally only be closed out by entering into
a closing purchase transaction with the purchasing dealer. Also, exchanges may
limit the amount by which the price of many futures contracts may move on any
day. If the price moves equal the daily limit on successive days, then it may
prove impossible to liquidate a futures position until the daily limit moves
have ceased.
The extent to which the Fund may enter into transactions involving options
and futures contracts may be limited by the Internal Revenue Code's requirements
for qualification as a regulated investment company and the Fund's intention to
qualify as such. See "Dividends, Distributions and Taxes."
While the futures contracts and options transactions to be engaged in by the
Fund for the purpose of hedging the Fund's portfolio securities are not
speculative in nature, there are risks inherent in the use of such instruments.
One such risk is that the Investment Manager could be incorrect in its
expectations as to the direction or extent of various interest rate or price
movements or the time span within which the movements take place. For example,
if the Fund sold futures contracts for the sale of securities in anticipation of
an increase in interest rates, and then interest rates went down instead,
causing bond prices to rise, the Fund would lose money on the sale. Another risk
which may arise in employing futures contracts to protect against the price
volatility of portfolio securities is that the prices of securities and indexes
subject to futures contracts (and thereby the futures contract prices) may
correlate imperfectly with the behavior of the cash prices of the Fund's
portfolio securities. See the Statement of Additional Information for further
discussion of such risks.
New futures contracts, options and other financial products and various
combinations thereof continue to be developed. The Fund may invest in any such
futures, options or products as may be developed, to the extent consistent with
its investment objective and applicable regulatory requirements.
REVERSE REPURCHASE AGREEMENTS. The Fund may enter into reverse repurchase
agreements, which involve sales by the Fund of portfolio assets concurrently
with an agreement by the Fund to repurchase the same assets at a later date at a
fixed price.
Reverse repurchase agreements involve the risk that the market value of the
securities the Fund is obligated to repurchase under the agreement may decline
below the repurchase price. In the event the buyer of securities under a reverse
repurchase agreement files for bankruptcy or becomes insolvent, the Fund's use
of the proceeds of the
16
<PAGE> 59
agreement may be restricted pending a determination by the other party, or its
trustee or receiver, whether to enforce the Fund's obligation to repurchase the
securities. Reverse repurchase agreements are considered borrowings by the Fund
and for purposes other than meeting redemptions may not exceed 5% of the Fund's
total assets.
LENDING OF PORTFOLIO SECURITIES. Consistent with applicable regulatory
requirements, the Fund may lend its portfolio securities to brokers, dealers and
other financial institutions, provided that such loans are callable at any time
by the Fund (subject to certain notice provisions described in the Statement of
Additional Information), and are at all times secured by cash or money market
instruments, which are maintained in a segregated account pursuant to applicable
regulations and that are equal to at least the market value, determined daily,
of the loaned securities. As with any extensions of credit, there are risks of
delay in recovery and in some cases even loss of rights in the collateral should
the borrower of the securities fail financially. However, loans of portfolio
securities will only be made to firms deemed by the Investment Manager to be
creditworthy and when the income which can be earned from such loans justifies
the attendant risks.
NON-DIVERSIFIED STATUS. The Fund is a non-diversified investment company
and, as such, is not subject to the diversification requirements of the
Investment Company Act of 1940 (the "Act"). As a non-diversified investment
company, the Fund may invest a greater portion of its assets in the securities
of a single issuer and thus is subject to greater exposure to risks such as a
decline in the credit rating of that issuer. However, the Fund anticipates that
it will qualify as a regulated investment company under the federal income tax
laws and, if so qualified, will be subject to the applicable diversification
requirements of the Internal Revenue Code (the "Code"). As a regulated
investment company under the Code, the Fund may not, as of the end of any of its
fiscal quarters, have invested more than 25% of its total assets in the
securities of any one issuer (including a foreign government), or as to 50% of
its total assets, have invested more than 5% of its total assets in the
securities of a single issuer.
For additional risk disclosure, please refer to the "Investment Objective
and Policies" section of the Prospectus and to the "Investment Practices and
Policies" section of the Statement of Additional Information.
PORTFOLIO MANAGEMENT
The Fund's portfolio is actively managed by the Investment Manager with a
view to achieving the Fund's investment objective. In determining which
securities to purchase for the Fund or hold in the Fund's portfolio, the
Investment Manager will rely on information from various sources, including
research, analysis and appraisals of brokers and dealers, including Dean Witter
Reynolds Inc. ("DWR") and other broker-dealer affiliates of InterCapital, the
views of others regarding economic developments and interest rate trends, and
the Investment Manager's own analysis of factors it deems relevant. The Fund's
portfolio is managed within InterCapital's Growth and Income Group, which
manages twenty-three funds and fund portfolios, with approximately $27.8 billion
in assets as of August 31, 1997. Mark Bavoso, Senior Vice President of
InterCapital and a member of InterCapital's Growth and Income Group, has been
the primary portfolio manager of the Fund since January, 1994, and has been a
portfolio manager at InterCapital for over five years.
Orders for transactions in other portfolio securities and commodities are
placed for the Fund with a number of brokers and dealers, including DWR and
other broker-dealer affiliates of InterCapital. Pursuant to an order of the
Securities and Exchange Commission, the Fund may effect principal transactions
in certain money market instruments with DWR. In addition, the Fund may incur
brokerage commissions on transactions conducted through DWR and other brokers
and dealers that are affiliates of InterCapital.
It is not anticipated that the portfolio trading engaged in by the Fund will
result in its portfolio turnover rate exceeding 200% in any one year. The
17
<PAGE> 60
Fund will incur underwriting discount costs (on underwritten securities) and
brokerage costs commensurate with its portfolio turnover rate, and thus a higher
level (over 100%) of portfolio transactions will increase the Fund's overall
brokerage expenses. See "Dividends, Distributions and Taxes" for a discussion of
the tax implications of the Fund's transactions. A more extensive discussion of
the Fund's portfolio brokerage policies is set forth in the Statement of
Additional Information.
Except as specifically noted, all investment objectives, policies and
practices discussed above are not fundamental policies of the Fund and, as such,
may be changed without shareholder approval.
INVESTMENT RESTRICTIONS
- --------------------------------------------------------------------------------
The investment restrictions listed below are among the restrictions which
have been adopted by the Fund as fundamental policies. Under the Act, a
fundamental policy may not be changed without the vote of a majority of the
outstanding voting securities of the Fund, as defined in the Act. For purposes
of the following limitations: (i) all percentage limitations apply immediately
after a purchase or initial investment, and (ii) any subsequent change in any
applicable percentage resulting from market fluctuations or other changes in
total or net assets does not require elimination of any security from the
portfolio.
The Fund may not:
1. Invest 25% or more of the value of its total assets in securities of
issuers in any one industry. This restriction does not apply to obligations
issued or guaranteed by the United States Government or its agencies or
instrumentalities.
2. Invest more than 5% of the value of its total assets in securities of
issuers having a record, together with predecessors, of less than three years of
continuous operation. This restriction shall not apply to any obligation issued
or guaranteed by the United States Government, its agencies or
instrumentalities.
3. Purchase or sell commodities or commodities contracts except that the Fund
may purchase or write interest rate and stock and bond index futures contracts
and related options thereon.
4. Pledge its assets or assign or otherwise encumber them except to secure
permitted borrowings. (For the purpose of this restriction, collateral
arrangements with respect to the writing of options and collateral arrangements
with respect to initial or variation margin for futures are not deemed to be
pledges of assets.)
5. Purchase securities on margin (but the Fund may obtain short-term loans as
are necessary for the clearance of transactions). The deposit or payment by the
Fund of initial or variation margin in connection with futures contracts or
related options thereon is not considered the purchase of a security on margin.
Notwithstanding any other investment policy or restriction, the Fund may
seek to achieve its investment objective by investing all or substantially all
of its assets in another investment company having substantially the same
investment objective and policies as the Fund.
PURCHASE OF FUND SHARES
- --------------------------------------------------------------------------------
GENERAL
The Fund offers each class of its its shares for sale to the public on a
continuous basis. Pursuant to a Distribution Agreement between the Fund and Dean
Witter Distributors Inc. (the "Distributor"), an affiliate of the Investment
Manager, shares of the Fund are distributed by the Distributor and offered by
DWR and other dealers who have entered into
18
<PAGE> 61
selected dealer agreements with the Distributor ("Selected Broker-Dealers"). The
principal executive office of the Distributor is located at Two World Trade
Center, New York, New York 10048.
The Fund offers four classes of shares (each, a "Class"). Class A shares are
sold to investors with an initial sales charge that declines to zero for larger
purchases; however, Class A shares sold without an initial sales charge are
subject to a contingent deferred sales charge ("CDSC") of 1.0% if redeemed
within one year of purchase, except for certain specific circumstances. Class B
shares are sold without an initial sales charge but are subject to a CDSC
(scaled down from 5.0% to 1.0%) payable upon most redemptions within six years
after purchase. (Class B shares purchased by certain qualified
employer-sponsored benefit plans are subject to a CDSC scaled down from 2.0% to
1.0% if redeemed within three years after purchase.) Class C shares are sold
without an initial sales charge but are subject to a CDSC of 1.0% on most
redemptions made within one year after purchase. Class D shares are sold without
an initial sales charge or CDSC and are available only to investors meeting an
initial investment minimum of $5 million, and to certain other limited
categories of investors. At the discretion of the Board of Trustees of the Fund,
Class A shares may be sold to categories of investors in addition to those set
forth in this prospectus at net asset value without a front-end sales charge,
and Class D shares may be sold to certain other categories of investors, in each
case as may be described in the then current prospectus of the Fund. See
"Alternative Purchase Arrangements-- Selecting a Particular Class" for a
discussion of factors to consider in selecting which Class of shares to
purchase.
The minimum initial purchase is $1,000 for each Class of shares, although
Class D shares are only available to persons investing $5 million or more and to
certain other limited categories of investors. For the purpose of meeting the
minimum $5 million initial investment for Class D shares, and subject to the
$1,000 minimum initial investment for each Class of the Fund, an investor's
existing holdings of Class A shares of the Fund and other Dean Witter Funds that
are multiple class funds ("Dean Witter Multi-Class Funds") and shares of Dean
Witter Funds sold with a front-end sales charge ("FSC Funds") and concurrent
investments in Class D shares of the Fund and other Dean Witter Multi-Class
Funds will be aggregated. Subsequent purchases of $100 or more may be made by
sending a check, payable to Dean Witter Strategist Fund, directly to Dean Witter
Trust FSB (the "Transfer Agent" or "DWT") at P.O. Box 1040, Jersey City, NJ
07303 or by contacting an account executive of DWR or other Selected
Broker-Dealer. When purchasing shares of the Fund, investors must specify
whether the purchase is for Class A, Class B, Class C or Class D shares. If no
Class is specified, the Transfer Agent will not process the transaction until
the proper Class is identified. The minimum initial purchase in the case of
investments through EasyInvest-SM-, an automatic purchase plan (see "Shareholder
Services"), is $100, provided that the schedule of automatic investments will
result in investments totalling at least $1,000 within the first twelve months.
In the case of investments pursuant to Systematic Payroll Deduction Plans
(including Individual Retirement Plans), the Fund, in its discretion, may accept
investments without regard to any minimum amounts which would otherwise be
required, if the Fund has reason to believe that additional investments will
increase the investment in each account under such Plans to at least $1,000.
Certificates for shares purchased will not be issued unless requested by the
shareholder in writing to the Transfer Agent.
Shares of the Fund are sold through the Distributor on a normal three
business day settlement basis; that is, payment is due on the third business day
(settlement date) after the order is placed with the Distributor. Since DWR and
other Selected Broker-Dealers forward investors' funds on settlement date, they
will benefit from the temporary use of the funds if payment is made prior
thereto. As noted above, orders placed directly with the Transfer
19
<PAGE> 62
Agent must be accompanied by payment. Investors will be entitled to receive
income dividends and capital gains distributions if their order is received by
the close of business on the day prior to the record date for such dividends and
distributions. Sales personnel of a Selected Broker-Dealer are compensated for
selling shares of the Fund at the time of their sale by the Distributor or any
of its affiliates and/or the Selected Broker-Dealer. In addition, some sales
personnel of the Selected Broker-Dealer will receive various types of non-cash
compensation as special sales incentives, including trips, educational and/or
business seminars and merchandise. The Fund and the Distributor reserve the
right to reject any purchase orders.
ALTERNATIVE PURCHASE ARRANGEMENTS
The Fund offers several Classes of shares to investors designed to provide
them with the flexibility of selecting an investment best suited to their needs.
The general public is offered three Classes of shares: Class A shares, Class B
shares and Class C shares, which differ principally in terms of sales charges
and rate of expenses to which they are subject. A fourth Class of shares, Class
D shares, is offered only to limited categories of investors (see "No Load
Alternative--Class D Shares" below).
Each Class A, Class B, Class C or Class D share of the Fund represents an
identical interest in the investment portfolio of the Fund except that Class A,
Class B and Class C shares bear the expenses of the ongoing shareholder service
fees, Class B and Class C shares bear the expenses of the ongoing distribution
fees and Class A, Class B and Class C shares which are redeemed subject to a
CDSC bear the expense of the additional incremental distribution costs resulting
from the CDSC applicable to shares of those Classes. The ongoing distribution
fees that are imposed on Class A, Class B and Class C shares will be imposed
directly against those Classes and not against all assets of the Fund and,
accordingly, such charges against one Class will not affect the net asset value
of any other Class or have any impact on investors choosing another sales charge
option. See "Plan of Distribution" and "Redemptions and Repurchases."
Set forth below is a summary of the differences between the Classes and the
factors an investor should consider when selecting a particular Class. This
summary is qualified in its entirety by detailed discussion of each Class that
follows this summary.
CLASS A SHARES. Class A shares are sold at net asset value plus an initial
sales charge of up to 5.25%. The initial sales charge is reduced for certain
purchases. Investments of $1 million or more (and investments by certain other
limited categories of investors) are not subject to any sales charges at the
time of purchase but are subject to a CDSC of 1.0% on redemptions made within
one year after purchase, except for certain specific circumstances. Class A
shares are also subject to a 12b-1 fee of up to 0.25% of the average daily net
assets of the Class. See "Initial Sales Charge Alternative--Class A Shares."
CLASS B SHARES. Class B shares are offered at net asset value with no
initial sales charge but are subject to a CDSC (scaled down from 5.0% to 1.0%)
if redeemed within six years of purchase. (Class B shares purchased by certain
qualified employer-sponsored benefit plans are subject to a CDSC scaled down
from 2.0% to 1.0% if redeemed within three years after purchase.) This CDSC may
be waived for certain redemptions. Class B shares are also subject to an annual
12b-1 fee of (i) 1.0% of the lesser of: (a) the average daily aggregate gross
sales of the Fund's Class B shares since the implementation of the 12b-1 Plan on
November 8, 1989 (not including reinvestments of dividends or capital gains
distributions), less the average daily aggregate net asset value of the Fund's
Class B shares redeemed since the implementation of the 12b-1 Plan upon which a
CDSC has been imposed or waived, or (b) the average daily net assets of Class B
attributable to shares issued, net of related shares redeemed, since
implementation of the 12b-1 Plan, plus (ii) 0.25% of the average daily net
assets of Class B attributable to shares issued, net
20
<PAGE> 63
of related shares redeemed, prior to implementation of the 12b-1 Plan. The Class
B shares' distribution fee will cause that Class to have higher expenses and pay
lower dividends than Class A or Class D shares.
After approximately ten (10) years, Class B shares will convert
automatically to Class A shares of the Fund, based on the relative net asset
values of the shares of the two Classes on the conversion date. In addition, a
certain portion of Class B shares that have been acquired through the
reinvestment of dividends and distributions will be converted at that time. See
"Contingent Deferred Sales Charge Alternative--Class B Shares."
CLASS C SHARES. Class C shares are sold at net asset value with no initial
sales charge but are subject to a CDSC of 1.0% on redemptions made within one
year after purchase. This CDSC may be waived for certain redemptions. They are
subject to an annual 12b-1 fee of up to 1.0% of the average daily net assets of
the Class C shares. The Class C shares' distribution fee may cause that Class to
have higher expenses and pay lower dividends than Class A or Class D shares. See
"Level Load Alternative--Class C Shares."
CLASS D SHARES. Class D shares are available only to limited categories of
investors (see "No Load Alternative--Class D Shares" below). Class D shares are
sold at net asset value with no initial sales charge or CDSC. They are not
subject to any 12b-1 fees. See "No Load Alternative--Class D Shares."
SELECTING A PARTICULAR CLASS. In deciding which Class of Fund shares to
purchase, investors should consider the following factors, as well as any other
relevant facts and circumstances:
The decision as to which Class of shares is more beneficial to an investor
depends on the amount and intended length of his or her investment. Investors
who prefer an initial sales charge alternative may elect to purchase Class A
shares. Investors qualifying for significantly reduced or, in the case of
purchases of $1 million or more, no initial sales charges may find Class A
shares particularly attractive because similar sales charge reductions are not
available with respect to Class B or Class C shares. Moreover, Class A shares
are subject to lower ongoing expenses than are Class B or Class C shares over
the term of the investment. As an alternative, Class B and Class C shares are
sold without any initial sales charge so the entire purchase price is
immediately invested in the Fund. Any investment return on these additional
investment amounts may partially or wholly offset the higher annual expenses of
these Classes. Because the Fund's future return cannot be predicted, however,
there can be no assurance that this would be the case.
Finally, investors should consider the effect of the CDSC period and any
conversion rights of the Classes in the context of their own investment time
frame. For example, although Class C shares are subject to a significantly lower
CDSC upon redemptions, they do not, unlike Class B shares, convert into Class A
shares after approximately ten years, and, therefore, are subject to an ongoing
12b-1 fee of 1.0% (rather than the 0.25% fee applicable to Class A shares) for
an indefinite period of time. Thus, Class B shares may be more attractive than
Class C shares to investors with longer term investment outlooks. Other
investors, however, may elect to purchase Class C shares if, for example, they
determine that they do not wish to be subject to a front-end sales charge and
they are uncertain as to the length of time they intend to hold their shares.
For the purpose of meeting the $5 million minimum investment amount for
Class D shares, holdings of Class A shares in all Dean Witter Multi-Class Funds,
shares of FSC Funds and shares of Dean Witter Funds for which such shares have
been exchanged will be included together with the current investment amount.
Sales personnel may receive different compensation for selling each Class of
shares. Investors should understand that the purpose of a CDSC is the same as
that of the initial sales charge in that the
21
<PAGE> 64
sales charges applicable to each Class provide for the financing of the
distribution of shares of that Class.
Set forth below is a chart comparing the sales charge, 12b-1 fees and
conversion options applicable to each Class of shares:
<TABLE>
<CAPTION>
---------------------------------------------------------------------
CLASS SALES CHARGE 12b-1 FEE CONVERSION FEATURE
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
A Maximum 5.25% initial sales 0.25% No
charge reduced for purchases
of $25,000 and over; shares
sold without an initial sales
charge generally subject to a
1.0% CDSC during first year.
- --------------------------------------------------------------------------------------
B Maximum 5.0% CDSC during the 1.0% B shares convert to A shares
first year decreasing to 0 automatically after
after six years approximately ten years
- --------------------------------------------------------------------------------------
C 1.0% CDSC during first year 1.0% No
- --------------------------------------------------------------------------------------
D None None No
- --------------------------------------------------------------------------------------
</TABLE>
See "Purchase of Fund Shares" and "The Fund and its Management" for a
complete description of the sales charges and service and distribution fees for
each Class of shares and "Determination of Net Asset Value," "Dividends,
Distributions and Taxes" and "Shareholder Services--Exchange Privilege" for
other differences between the Classes of shares.
INITIAL SALES CHARGE ALTERNATIVE--CLASS A SHARES
Class A shares are sold at net asset value plus an initial sales charge. In
some cases, reduced sales charges may be available, as described below.
Investments of $1 million or more (and investments by certain other limited
categories of investors) are not subject to any sales charges at the time of
purchase but are subject to a CDSC of 1.0% on redemptions made within one year
after purchase (calculated from the last day of the month in which the shares
were purchased), except for certain specific circumstances. The CDSC will be
assessed on an amount equal to the lesser of the current market value or the
cost of the shares being redeemed. The CDSC will not be imposed (i) in the
circumstances set forth below in the section "Contingent Deferred Sales Charge
Alternative--Class B Shares--CDSC Waivers," except that the references to six
years in the first paragraph of that section shall mean one year in the case of
Class A shares, and (ii) in the circumstances identified in the section
"Additional Net Asset Value Purchase Options" below. Class A shares are also
subject to an annual 12b-1 fee of up to 0.25% of the average daily net assets of
the Class.
The offering price of Class A shares will be the net asset value per share
next determined following receipt of an order (see "Determination of Net Asset
Value" below), plus a sales charge (expressed as a percentage of the offering
price) on a single transaction as shown in the following table:
<TABLE>
<CAPTION>
SALES CHARGE
------------------------------------------
PERCENTAGE OF APPROXIMATE
AMOUNT OF SINGLE PUBLIC OFFERING PERCENTAGE OF AMOUNT
TRANSACTION PRICE INVESTED
- ------------------------- ------------------- ---------------------
<S> <C> <C>
Less than $25,000........ 5.25% 5.54%
$25,000 but less
than $50,000........ 4.75% 4.99%
$50,000 but less
than $100,000....... 4.00% 4.17%
$100,000 but less
than $250,000....... 3.00% 3.09%
$250,000 but less
than $1 million..... 2.00% 2.04%
$1 million and over...... 0 0
</TABLE>
Upon notice to all Selected Broker-Dealers, the Distributor may reallow up
to the full applicable sales charge as shown in the above schedule during
periods specified in such notice. During periods when 90% or more of the sales
charge is reallowed, such Selected Broker-Dealers may be deemed to be
underwriters as that term is defined in the Securities Act of 1933.
22
<PAGE> 65
The above schedule of sales charges is applicable to purchases in a single
transaction by, among others: (a) an individual; (b) an individual, his or her
spouse and their children under the age of 21 purchasing shares for his, her or
their own accounts; (c) a trustee or other fiduciary purchasing shares for a
single trust estate or a single fiduciary account; (d) a pension, profit-sharing
or other employee benefit plan qualified or non-qualified under Section 401 of
the Internal Revenue Code; (e) tax-exempt organizations enumerated in Section
501(c)(3) or (13) of the Internal Revenue Code; (f) employee benefit plans
qualified under Section 401 of the Internal Revenue Code of a single employer
or of employers who are "affiliated persons" of each other within the meaning of
Section 2(a)(3)(c) of the Act; and for investments in Individual Retirement
Accounts of employees of a single employer through Systematic Payroll Deduction
plans; or (g) any other organized group of persons, whether incorporated or not,
provided the organization has been in existence for at least six months and has
some purpose other than the purchase of redeemable securities of a registered
investment company at a discount.
COMBINED PURCHASE PRIVILEGE. Investors may have the benefit of reduced
sales charges in accordance with the above schedule by combining purchases of
Class A shares of the Fund in single transactions with the purchase of Class A
shares of other Dean Witter Multi-Class Funds and shares of FSC Funds. The sales
charge payable on the purchase of the Class A shares of the Fund, the Class A
shares of the other Dean Witter Multi-Class Funds and the shares of the FSC
Funds will be at their respective rates applicable to the total amount of the
combined concurrent purchases of such shares.
RIGHT OF ACCUMULATION. The above persons and entities may benefit from a
reduction of the sales charges in accordance with the above schedule if the
cumulative net asset value of Class A shares purchased in a single transaction,
together with shares of the Fund and other Dean Witter Funds previously
purchased at a price including a front-end sales charge (including shares of the
Fund and other Dean Witter Funds acquired in exchange for those shares, and
including in each case shares acquired through reinvestment of dividends and
distributions), which are held at the time of such transaction, amounts to
$25,000 or more. If such investor has a cumulative net asset value of shares of
FSC Funds and Class A and Class D shares equal to at least $5 million, such
investor is eligible to purchase Class D shares subject to the $1,000 minimum
initial investment requirement of that Class of the Fund. See "No Load
Alternative-- Class D Shares" below.
The Distributor must be notified by DWR or a Selected Broker-Dealer or the
shareholder at the time a purchase order is placed that the purchase qualifies
for the reduced charge under the Right of Accumulation. Similar notification
must be made in writing by the dealer or shareholder when such an order is
placed by mail. The reduced sales charge will not be granted if: (a) such
notification is not furnished at the time of the order; or (b) a review of the
records of the Selected Broker-Dealer or the Transfer Agent fails to confirm the
investor's represented holdings.
LETTER OF INTENT. The foregoing schedule of reduced sales charges will also
be available to investors who enter into a written Letter of Intent providing
for the purchase, within a thirteen-month period, of Class A shares of the Fund
from DWR or other Selected Broker-Dealers. The cost of Class A shares of the
Fund or shares of other Dean Witter Funds which were previously purchased at a
price including a front-end sales charge during the 90-day period prior to the
date of receipt by the Distributor of the Letter of Intent, or of Class A shares
of the Fund or shares of other Dean Witter Funds acquired in exchange for shares
of such funds purchased during such period at a price including a front-end
sales charge, which are still owned by the shareholder, may also be included in
determining the applicable reduction.
23
<PAGE> 66
ADDITIONAL NET ASSET VALUE PURCHASE OPTIONS. In addition to investments of
$1 million or more, Class A shares also may be purchased at net asset value by
the following:
(1) trusts for which DWT (an affiliate of the Investment Manager) provides
discretionary trustee services;
(2) persons participating in a fee-based program approved by the Distributor,
pursuant to which such persons pay an asset based fee for services in the nature
of investment advisory or administrative services (such investments are subject
to all of the terms and conditions of such programs, which may include
termination fees, mandatory redemption upon termination and such other
circumstances as specified in the programs' agreements, and restrictions on
transferability of Fund shares);
(3) retirement plans qualified under Section 401(k) of the Internal Revenue
Code ("401(k) plans") and other employer-sponsored plans qualified under Section
401(a) of the Internal Revenue Code with at least 200 eligible employees and for
which DWT serves as Trustee or the 401(k) Support Services Group of DWR serves
as recordkeeper;
(4) 401(k) plans and other employer-sponsored plans qualified under Section
401(a) of the Internal Revenue Code for which DWT serves as Trustee or the
401(k) Support Services Group of DWR serves as recordkeeper whose Class B shares
have converted to Class A shares, regardless of the plan's asset size or number
of eligible employees;
(5) investors who are clients of a Dean Witter account executive who joined
Dean Witter from another investment firm within six months prior to the date of
purchase of Fund shares by such investors, if the shares are being purchased
with the proceeds from a redemption of shares of an open-end proprietary mutual
fund of the account executive's previous firm which imposed either a front-end
or deferred sales charge, provided such purchase was made within sixty days
after the redemption and the proceeds of the redemption had been maintained in
the interim in cash or a money market fund; and
(6) other categories of investors, at the discretion of the Board, as
disclosed in the then current prospectus of the Fund.
No CDSC will be imposed on redemptions of shares purchased pursuant to
paragraphs (1), (2) or (5), above.
For further information concerning purchases of the Fund's shares, contact
DWR or another Selected Broker-Dealer or consult the Statement of Additional
Information.
CONTINGENT DEFERRED SALES CHARGE ALTERNATIVE-- CLASS B SHARES
Class B shares are sold at net asset value next determined without an
initial sales charge so that the full amount of an investor's purchase payment
may be immediately invested in the Fund. A CDSC, however, will be imposed on
most Class B shares redeemed within six years after purchase. The CDSC will be
imposed on any redemption of shares if after such redemption the aggregate
current value of a Class B account with the Fund falls below the aggregate
amount of the investor's purchase payments for Class B shares made during the
six years (or, in the case of shares held by certain employer-sponsored benefit
plans, three years) preceding the redemption. In addition, Class B shares are
subject to an annual 12b-1 fee of (i) 1.0% of the lesser of: (a) the average
daily aggregate gross sales of the Fund's Class B shares since the
implementation of the 12b-1 Plan on November 8, 1989 (not including
reinvestments of dividends or capital gains distributions), less the average
daily aggregate net asset value of the Fund's Class B shares redeemed since the
implementation of the 12b-1 Plan upon which a CDSC has been imposed or waived,
or (b) the average daily net assets of Class B attributable to shares issued,
net of related shares redeemed, since implementation of the 12b-1 Plan, plus
(ii) 0.25% of the average daily net assets of Class B attributable to shares
issued, net of related shares redeemed, prior to implementation of the 12b-1
Plan.
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<PAGE> 67
Except as noted below, Class B shares of the Fund which are held for six
years or more after purchase (calculated from the last day of the month in which
the shares were purchased) will not be subject to any CDSC upon redemption.
Shares redeemed earlier than six years after purchase may, however, be subject
to a CDSC which will be a percentage of the dollar amount of shares redeemed and
will be assessed on an amount equal to the lesser of the current market value or
the cost of the shares being redeemed. The size of this percentage will depend
upon how long the shares have been held, as set forth in the following table:
<TABLE>
<CAPTION>
YEAR SINCE CDSC AS A
PURCHASE PERCENTAGE OF
PAYMENT MADE AMOUNT REDEEMED
- --------------------------------- -----------------------
<S> <C>
First............................ 5.0%
Second........................... 4.0%
Third............................ 3.0%
Fourth........................... 2.0%
Fifth............................ 2.0%
Sixth............................ 1.0%
Seventh and thereafter........... None
</TABLE>
In the case of Class B shares of the Fund held by 401 (k) plans or other
employer-sponsored plans qualified under Section 401(a) of the Internal Revenue
Code for which DWT serves as Trustee or the 401(k) Support Services Group of DWR
serves as recordkeeper and whose accounts are opened on or after July 28, 1997,
shares held for three years or more after purchase (calculated as described in
the paragraph above) will not be subject to any CDSC upon redemption. However,
shares redeemed earlier than three years after purchase may be subject to a CDSC
(calculated as described in the paragraph above), the percentage of which will
depend on how long the shares have been held, as set forth in the following
table:
<TABLE>
<CAPTION>
YEAR SINCE
PURCHASE CDSC AS A PERCENTAGE OF
PAYMENT MADE AMOUNT REDEEMED
- --------------------------------- -----------------------
<S> <C>
First............................ 2.0%
Second........................... 2.0%
Third............................ 1.0%
Fourth and thereafter............ None
</TABLE>
CDSC WAIVERS. A CDSC will not be imposed on: (i) any amount which
represents an increase in value of shares purchased within the six years (or, in
the case of shares held by certain employer-sponsored benefit plans, three
years) preceding the redemption; (ii) the current net asset value of shares
purchased more than six years (or, in the case of shares held by certain
employer-sponsored benefit plans, three years) prior to the redemption; and
(iii) the current net asset value of shares purchased through reinvestment of
dividends or distributions and/or shares acquired in exchange for shares of FSC
Funds or of other Dean Witter Funds acquired in exchange for such shares.
Moreover, in determining whether a CDSC is applicable it will be assumed that
amounts described in (i), (ii) and (iii) above (in that order) are redeemed
first.
In addition, the CDSC, if otherwise applicable, will be waived in the case
of:
(1) redemptions of shares held at the time a shareholder dies or becomes
disabled, only if the shares are: (a) registered either in the name of an
individual shareholder (not a trust), or in the names of such shareholder and
his or her spouse as joint tenants with right of survivorship; or (b) held in a
qualified corporate or self-employed retirement plan, Individual Retirement
Account ("IRA") or Custodial Account under Section 403(b)(7) of the Internal
Revenue Code ("403(b) Custodial Account"), provided in either case that the
redemption is requested within one year of the death or initial determination of
disability;
(2) redemptions in connection with the following retirement plan
distributions: (a) lump-sum or other distributions from a qualified corporate
or self-employed retirement plan following retirement (or, in the case of a "key
employee" of a "top heavy" plan, following attainment of age 59 1/2); (b)
distributions from an IRA or 403(b) Custodial Account following attainment of
age 59 1/2; or (C) a tax-free return of an excess contribution to an IRA; and
(3) all redemptions of shares held for the benefit of a participant in a
401(k) plan or other employer-
25
<PAGE> 68
sponsored plan qualified under Section 401(a) of the Internal Revenue Code which
offers investment companies managed by the Investment Manager or its subsidiary,
Dean Witter Services Company Inc., as self-directed investment alternatives and
for which DWT serves as Trustee or the 401(k) Support Services Group of DWR
serves as recordkeeper ("Eligible Plan"), provided that either: (a) the plan
continues to be an Eligible Plan after the redemption; or (b) the redemption is
in connection with the complete termination of the plan involving the
distribution of all plan assets to participants.
With reference to (1) above, for the purpose of determining disability, the
Distributor utilizes the definition of disability contained in Section 72(m)(7)
of the Internal Revenue Code, which relates to the inability to engage in
gainful employment. With reference to (2) above, the term "distribution" does
not encompass a direct transfer of IRA, 403(b) Custodial Account or retirement
plan assets to a successor custodian or trustee. All waivers will be granted
only following receipt by the Distributor of confirmation of the shareholder's
entitlement.
CONVERSION TO CLASS A SHARES. All shares of the Fund held prior to July 28,
1997 (other than shares which were purchased prior to November 8, 1989 (and,
with respect to such shares, including such proportion of shares acquired
through reinvestment of dividends and capital gains distributions as the total
number of shares acquired prior to such date bears to the total number of Fund
shares purchased and owned by a shareholder (collectively, the "Old Shares"))
and shares held by certain employee benefit plans established by DWR and its
affiliate, SPS Transaction Services, Inc.) have been designated Class B shares.
Shares held before May 1, 1997 that have been designated Class B shares will
convert to Class A shares in May, 2007. In all other instances Class B shares
will convert automatically to Class A shares, based on the relative net asset
values of the shares of the two Classes on the conversion date, which will be
approximately ten (10) years after the date of the original purchase.
The ten year period is calculated from the last day of the month in which the
shares were purchased or, in the case of Class B shares acquired through an
exchange or a series of exchanges, from the last day of the month in which the
original Class B shares were purchased, provided that shares originally
purchased before May 1, 1997 will convert to Class A shares in May, 2007. The
conversion of shares purchased on or after May 1, 1997 will take place in the
month following the tenth anniversary of the purchase. There will also be
converted at that time such proportion of Class B shares acquired through
automatic reinvestment of dividends and distributions owned by the shareholder
as the total number of his or her Class B shares converting at the time bears to
the total number of outstanding Class B shares purchased and owned by the
shareholder. In the case of Class B shares held by a 401(k) plan or other
employer-sponsored plan qualified under Section 401(a) of the Internal Revenue
Code and for which DWT serves as Trustee or the 401(k) Support Services Group of
DWR serves as recordkeeper, the plan is treated as a single investor and all
Class B shares will convert to Class A shares on the conversion date of the
first shares of a Dean Witter Multi-Class Fund purchased by that plan. In the
case of Class B shares previously exchanged for shares of an "Exchange Fund"
(see "Shareholder Services--Exchange Privilege"), the period of time the shares
were held in the Exchange Fund (calculated from the last day of the month in
which the Exchange Fund shares were acquired) is excluded from the holding
period for conversion. If those shares are subsequently re-exchanged for Class B
shares of a Dean Witter Multi-Class Fund, the holding period resumes on the last
day of the month in which Class B shares are reacquired.
If a shareholder has received share certificates for Class B shares, such
certificates must be delivered to the Transfer Agent at least one week prior to
the date for conversion. Class B shares evidenced by share certificates that are
not received by the Transfer Agent at least one week prior to any conversion
date will be converted into Class A shares
26
<PAGE> 69
on the next scheduled conversion date after such certificates are received.
Effectiveness of the conversion feature is subject to the continuing
availability of a ruling of the Internal Revenue Service or an opinion of
counsel that (i) the conversion of shares does not constitute a taxable event
under the Internal Revenue Code, (ii) Class A shares received on conversion will
have a basis equal to the shareholder's basis in the converted Class B shares
immediately prior to the conversion, and (iii) Class A shares received on
conversion will have a holding period that includes the holding period of the
converted Class B shares. The conversion feature may be suspended if the ruling
or opinion is no longer available. In such event, Class B shares would continue
to be subject to Class B 12b-1 fees.
LEVEL LOAD ALTERNATIVE--CLASS C SHARES
Class C shares are sold at net asset value next determined without an
initial sales charge but are subject to a CDSC of 1.0% on most redemptions made
within one year after purchase (calculated from the last day of the month in
which the shares were purchased). The CDSC will be assessed on an amount equal
to the lesser of the current market value or the cost of the shares being
redeemed. The CDSC will not be imposed in the circumstances set forth above in
the section "Contingent Deferred Sales Charge Alternative--Class B Shares--CDSC
Waivers," except that the references to six years in the first paragraph of that
section shall mean one year in the case of Class C shares. Class C shares are
subject to an annual 12b-1 fee of up to 1.0% of the average daily net assets of
the Class. Unlike Class B shares, Class C shares have no conversion feature and,
accordingly, an investor that purchases Class C shares will be subject to 12b-1
fees applicable to Class C shares for an indefinite period subject to annual
approval by the Fund's Board of Trustees and regulatory limitations.
NO LOAD ALTERNATIVE--CLASS D SHARES
Class D shares are offered without any sales charge on purchase or
redemption and without any 12b-1 fee. Class D shares are offered only to
investors meeting an initial investment minimum of $5 million and the following
categories of investors: (i) investors participating in the InterCapital mutual
fund asset allocation program pursuant to which such persons pay an asset based
fee; (ii) persons participating in a fee-based program approved by the
Distributor, pursuant to which such persons pay an asset based fee for services
in the nature of investment advisory or administrative services (subject to all
of the terms and conditions of such programs referred to in (i) and (ii) above,
which may include termination fees, mandatory redemption upon termination and
such other circumstances as specified in the programs' agreements, and
restrictions on transferability of Fund shares); (iii) 401(k) plans established
by DWR and SPS Transaction Services, Inc. (an affiliate of DWR) for their
employees; (iv) certain Unit Investment Trusts sponsored by DWR; (v) certain
other open-end investment companies whose shares are distributed by the
Distributor; and (vi) other categories of investors, at the discretion of the
Board, as disclosed in the then current prospectus of the Fund. The Old Shares
and shares held by the employee benefit plans referred to in clause (iii) above
prior to July 28, 1997 have been designated Class D shares. Investors who
require a $5 million minimum initial investment to qualify to purchase Class D
shares may satisfy that requirement by investing that amount in a single
transaction in Class D shares of the Fund and other Dean Witter Multi-Class
Funds, subject to the $1,000 minimum initial investment required for that Class
of the Fund. In addition, for the purpose of meeting the $5 million minimum
investment amount, holdings of Class A shares in all Dean Witter Multi-Class
Funds, shares of FSC Funds and shares of Dean Witter Funds for which such shares
have been exchanged will be included together with the current investment
amount. If a shareholder redeems Class A shares and purchases Class D shares,
such redemption may be a taxable event.
PLAN OF DISTRIBUTION
The Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 under the
Act with respect to
27
<PAGE> 70
the distribution of Class A, Class B and Class C shares of the Fund. In the case
of Class A and Class C shares, the Plan provides that the Fund will reimburse
the Distributor and others for the expenses of certain activities and services
incurred by them specifically on behalf of those shares. Reimbursements for
these expenses will be made in monthly payments by the Fund to the Distributor,
which will in no event exceed amounts equal to payments at the annual rates of
0.25% and 1.0% of the average daily net assets of Class A and Class C,
respectively. In the case of Class B shares, the Plan provides that the Fund
will pay the Distributor a fee, which is accrued daily and paid monthly, at the
annual rate of (i) 1.0% of the lesser of: (a) the average daily aggregate gross
sales of the Fund's Class B shares since the implementation of the Plan on
November 8, 1989 (not including reinvestments of dividends or capital gains
distributions), less the average daily aggregate net asset value of the Fund's
Class B shares redeemed since the implementation of the 12b-1 Plan upon which a
CDSC has been imposed or waived, or (b) the average daily net assets of Class B
attributable to shares issued, net of related shares redeemed, since
implementation of the 12b-1 Plan, plus (ii) 0.25% of the average daily net
assets of Class B attributable to shares issued, net of related shares redeemed,
prior to implementation of the 12b-1 Plan. The fee is treated by the Fund as an
expense in the year it is accrued. In the case of Class A shares, the entire
amount of the fee currently represents a service fee within the meaning of the
NASD guidelines. In the case of Class B and Class C shares, a portion of the fee
payable pursuant to the Plan, equal to 0.25% of the average daily net assets of
each of these Classes, is currently characterized as a service fee. A service
fee is a payment made for personal service and/or the maintenance of shareholder
accounts.
Additional amounts paid under the Plan in the case of Class B and Class C
shares are paid to the Distributor for services provided and the expenses borne
by the Distributor and others in the distribution of the shares of those
Classes, including the payment of commissions for sales of the shares of those
Classes and incentive compensation to and expenses of DWR's account executives
and others who engage in or support distribution of shares or who service
shareholder accounts, including overhead and telephone expenses; printing and
distribution of prospectuses and reports used in connection with the offering of
the Fund's shares to other than current shareholders; and preparation, printing
and distribution of sales literature and advertising materials. In addition, the
Distributor may utilize fees paid pursuant to the Plan in the case of Class B
shares to compensate DWR and other Selected Broker-Dealers for their opportunity
costs in advancing such amounts, which compensation would be in the form of a
carrying charge on any unreimbursed expenses.
For the fiscal year ended July 31, 1997, Class B shares of the Fund accrued
payments under the Plan amounting to $12,491,604, which amount is equal to 0.89%
of the average daily net assets of Class B for the fiscal year. These payments
were calculated pursuant to clauses (i)(a) and (ii) of the compensation formula
under the Plan. All shares held prior to July 28, 1997 (other than the Old
Shares and shares held by certain employee benefit plans established by DWR and
its affiliate, SPS Transaction Services, Inc.) have been designated Class B
shares. For the fiscal period July 28 through July 31, 1997, Class A and Class C
shares of the Fund accrued payments under the Plan amounting to $1 and $6,
respectively, which amounts on an annualized basis are equal to 0.25% and 1.0%
of the average daily net assets of Class A and Class C, respectively, for such
period.
In the case of Class B shares, at any given time, the expenses in
distributing Class B shares of the Fund may be in excess of the total of (i) the
payments made by the Fund pursuant to the Plan, and (ii) the proceeds of CDSCs
paid by investors upon the redemption of Class B shares. For example, if $1
million in expenses in distributing Class B shares of the Fund had been incurred
and $750,000 had been received as described in (i) and (ii) above, the excess
expense would amount to $250,000. The
28
<PAGE> 71
Distributor has advised the Fund that such excess amounts, including the
carrying charge described above, totalled $37,067,710 at July 31, 1997, which
was equal to 2.38% of the net assets of Class B on such date. Of this amount,
$13,444,602 represents excess distribution expenses of Dean Witter Managed
Assets Trust, the net assets of which were combined with those of the Fund on
December 22, 1995 pursuant to an Agreement and Plan of Reorganization. Because
there is no requirement under the Plan that the Distributor be reimbursed for
all distribution expenses or any requirement that the Plan be continued from
year to year, such excess amount does not constitute a liability of the Fund.
Although there is no legal obligation for the Fund to pay expenses incurred in
excess of payments made to the Distributor under the Plan and the proceeds of
CDSCs paid by investors upon redemption of shares, if for any reason the Plan is
terminated, the Trustees will consider at that time the manner in which to treat
such expenses. Any cumulative expenses incurred, but not yet recovered through
distribution fees or CDSCs, may or may not be recovered through future
distribution fees or CDSCs.
In the case of Class A and Class C shares, expenses incurred pursuant to the
Plan in any calendar year in excess of 0.25% or 1.0% of the average daily net
assets of Class A or Class C, respectively, will not be reimbursed by the Fund
through payments in any subsequent year, except that expenses representing a
gross sales commission credited to account executives at the time of sale may be
reimbursed in the subsequent calendar year. The Distributor has advised the Fund
that there were no such expenses which may be reimbursed in the subsequent year
in the case of Class A and Class C on such date. No interest or other financing
charges will be incurred on any Class A or Class C distribution expenses
incurred by the Distributor under the Plan or on any unreimbursed expenses due
to the Distributor pursuant to the Plan.
DETERMINATION OF NET ASSET VALUE
The net asset value per share is determined once daily at 4:00 p.m., New
York time (or, on days when the New York Stock Exchange closes prior to 4:00
p.m., at such earlier time), on each day that the New York Stock Exchange is
open by taking the net assets of the Fund, dividing by the number of shares
outstanding and adjusting to the nearest cent. The assets belonging to the Class
A, Class B, Class C and Class D shares will be invested together in a single
portfolio. The net asset value of each Class, however, will be determined
separately by subtracting each Class's accrued expenses and liabilities. The net
asset value per share will not be determined on Good Friday and on such other
federal and non-federal holidays as are observed by the New York Stock Exchange.
In the calculation of the Fund's net asset value: (1) an equity portfolio
security listed or traded on the New York or American Stock Exchange is valued
at its latest sale price on that exchange prior to the time assets are valued;
if there were no sales that day, the security is valued at the latest bid price
(in cases where a security is traded on more than one exchange, the security is
valued on the exchange designated as the primary market pursuant to procedures
adopted by the Trustees), and (2) all other portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest bid price (in cases where a security is traded on more than one exchange,
the security is valued on the exchange designated as the primary market pursuant
to procedures adopted by the Trustees). When market quotations are not readily
available, including circumstances under which it is determined by the
Investment Manager that sale or bid prices are not reflective of a security's
market value, portfolio securities are valued at their fair value as determined
in good faith under procedures established by and under the general supervision
of the Fund's Trustees (valuation of debt securities for which market quotations
are not readily available may be based upon current market prices of securities
which are comparable in coupon, rating and maturity or an appropriate matrix
utilizing similar factors).
Short-term debt securities with remaining maturities of sixty days or less
at the time of purchase are
29
<PAGE> 72
valued at amortized cost, unless the Trustees determine such does not reflect
the securities' market value, in which case these securities will be valued at
their fair value as determined by the Trustees.
Certain of the Fund's portfolio securities may be valued by an outside
pricing service approved by the Fund's Trustees. The pricing service may utilize
a matrix system incorporating security quality, maturity and coupon as the
evaluation model parameters, and/or research evaluations by its staff, including
review of broker-dealer market price quotations, in determining what the pricing
service believes is the fair valuation of such portfolio securities.
SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
AUTOMATIC INVESTMENT OF DIVIDENDS AND DISTRIBUTIONS. All income dividends
and capital gains distributions are automatically paid in full and fractional
shares of the applicable Class of the Fund (or, if specified by the shareholder,
in shares of any other open-end Dean Witter Fund), unless the shareholder
requests that they be paid in cash. Shares so acquired are acquired at net asset
value and are not subject to the imposition of a front-end sales charge or a
CDSC (see "Redemptions and Repurchases").
EASYINVEST-SM-. Shareholders may subscribe to EasyInvest, an automatic
purchase plan which provides for any amount from $100 to $5,000 to be
transferred automatically from a checking or savings account or following
redemption of shares of a Dean Witter money market fund, on a semi-monthly,
monthly or quarterly basis, to the Transfer Agent for investment in shares of
the Fund (see "Purchase of Fund Shares" and "Redemptions and
Repurchases--Involuntary Redemption").
INVESTMENT OF DIVIDENDS AND DISTRIBUTIONS RECEIVED IN CASH. Any shareholder
who receives a cash payment representing a dividend or capital gains
distribution may invest such dividend or distribution in shares of the
applicable Class at the net asset value per share next determined after receipt
by the Transfer Agent, by returning the check or the proceeds to the Transfer
Agent within thirty days after the payment date. Shares so acquired are acquired
at net asset value and are not subject to the imposition of a front-end sales
charge or a CDSC (see "Redemptions and Repurchases").
SYSTEMATIC WITHDRAWAL PLAN. A systematic withdrawal plan (the "Withdrawal
Plan") is available for shareholders who own or purchase shares of the Fund
having a minimum value of $10,000 based upon the then current net asset value.
The Withdrawal Plan provides for monthly or quarterly (March, June, September,
and December) checks in any dollar amount, not less than $25, or in any whole
percentage of the account balance, on an annualized basis. Any applicable CDSC
will be imposed on shares redeemed under the Withdrawal Plan (see "Purchase of
Fund Shares"). Therefore, any shareholder participating in the Withdrawal Plan
will have sufficient shares redeemed from his or her account so that the
proceeds (net of any applicable CDSC) to the shareholder will be the designated
monthly or quarterly amount. Withdrawal plan payments should not be considered
as dividends, yields or income. If periodic withdrawal plan payments
continuously exceed net investment income and net capital gains, the
shareholder's original investment will be correspondingly reduced and ultimately
exhausted. Each withdrawal constitutes a redemption of shares and any gain or
loss realized must be recognized for federal income tax purposes.
Shareholders should contact their DWR or other Selected Broker-Dealer
account executive or the Transfer Agent for further information about any of the
above services.
TAX-SHELTERED RETIREMENT PLANS. Retirement plans are available for use by
corporations, the self-employed, eligible Individual Retirement Accounts and
Custodial Accounts under Section 403(b)(7) of the Internal Revenue Code.
Adoption of such plans should be on advice of legal counsel or tax adviser.
30
<PAGE> 73
For further information regarding plan administration, custodial fees and
other details, investors should contact their DWR or other Selected Broker-
Dealer account executive or the Transfer Agent.
EXCHANGE PRIVILEGE
Shares of each Class may be exchanged for shares of the same Class of any
other Dean Witter Multi-Class Fund without the imposition of any exchange fee.
Shares may also be exchanged for shares of the following funds: Dean Witter
Short-Term U.S. Treasury Trust, Dean Witter Limited Term Municipal Trust, Dean
Witter Short-Term Bond Fund, Dean Witter Intermediate Term U.S. Treasury Trust
and five Dean Witter funds which are money market funds (the "Exchange Funds").
Class A shares may also be exchanged for shares of Dean Witter Multi-State
Municipal Series Trust and Dean Witter Hawaii Municipal Trust, which are Dean
Witter Funds sold with a front-end sales charge ("FSC Funds"). Class B shares
may also be exchanged for shares of Dean Witter Global Short-Term Income Fund
Inc., Dean Witter High Income Securities and Dean Witter National Municipal
Trust, which are Dean Witter Funds offered with a CDSC ("CDSC Funds"). Exchanges
may be made after the shares of the Fund acquired by purchase (not by exchange
or dividend reinvestment) have been held for thirty days. There is no waiting
period for exchanges of shares acquired by exchange or dividend reinvestment.
An exchange to another Dean Witter Multi-Class Fund, any FSC Fund, any CDSC
Fund or any Exchange Fund that is not a money market fund is on the basis of the
next calculated net asset value per share of each fund after the exchange order
is received. When exchanging into a money market fund from the Fund, shares of
the Fund are redeemed out of the Fund at their next calculated net asset value
and the proceeds of the redemption are used to purchase shares of the money
market fund at their net asset value determined the following business day.
Subsequent exchanges between any of the money market funds and any of the Dean
Witter Multi-Class Funds, FSC Funds or CDSC Funds or any Exchange Fund that is
not a money market fund can be effected on the same basis.
No CDSC is imposed at the time of any exchange of shares, although any
applicable CDSC will be imposed upon ultimate redemption. During the period of
time the shareholder remains in an Exchange Fund (calculated from the last day
of the month in which the Exchange Fund shares were acquired), the holding
period (for the purpose of determining the rate of the CDSC) is frozen. If those
shares are subsequently re-exchanged for shares of a Dean Witter Multi-Class
Fund or shares of a CDSC Fund, the holding period previously frozen when the
first exchange was made resumes on the last day of the month in which shares of
a Dean Witter Multi-Class Fund or shares of a CDSC Fund are reacquired. Thus,
the CDSC is based upon the time (calculated as described above) the shareholder
was invested in shares of a Dean Witter Multi-Class Fund or in shares of a CDSC
Fund (see "Purchase of Fund Shares"). In the case of exchanges of Class A shares
which are subject to a CDSC, the holding period also includes the time
(calculated as described above) the shareholder was invested in shares of a FSC
Fund. In the case of shares exchanged into an Exchange Fund on or after April
23, 1990, upon a redemption of shares which results in a CDSC being imposed, a
credit (not to exceed the amount of the CDSC) will be given in an amount equal
to the Exchange Fund 12b-1 distribution fees, if any, incurred on or after that
date which are attributable to those shares. (Exchange Fund 12b-1 distribution
fees are described in the prospectus for those funds.) Class B shares of the
Fund acquired in exchange for Class B shares of another Dean Witter Multi-Class
Fund or shares of a CDSC Fund having a different CDSC schedule than that of this
Fund will be subject to the higher CDSC schedule, even if such shares are
subsequently re-exchanged for shares of the fund with the lower CDSC schedule.
ADDITIONAL INFORMATION REGARDING EXCHANGES. Purchases and exchanges should
be made for investment purposes only. A pattern of frequent
31
<PAGE> 74
exchanges may be deemed by the Investment Manager to be abusive and contrary to
the best interests of the Fund's other shareholders and, at the Investment
Manager's discretion, may be limited by the Fund's refusal to accept additional
purchases and/ or exchanges from the investor. Although the Fund does not have
any specific definition of what constitutes a pattern of frequent exchanges, and
will consider all relevant factors in determining whether a particular situation
is abusive and contrary to the best interests of the Fund and its other
shareholders, investors should be aware that the Fund and each of the other Dean
Witter Funds may in their discretion limit or otherwise restrict the number of
times this Exchange Privilege may be exercised by any investor. Any such
restriction will be made by the Fund on a prospective basis only, upon notice to
the shareholder not later than ten days following such shareholder's most recent
exchange. Also, the Exchange Privilege may be terminated or revised at any time
by the Fund and/or any of such Dean Witter Funds for which shares of the Fund
have been exchanged, upon such notice as may be required by applicable
regulatory agencies. Shareholders maintaining margin accounts with DWR or
another Selected Broker-Dealer are referred to their account executive regarding
restrictions on exchange of shares of the Fund pledged in the margin account.
The current prospectus for each fund describes its investment objective(s)
and policies, and shareholders should obtain a copy and examine it carefully
before investing. Exchanges are subject to the minimum investment requirement of
each Class of shares and any other conditions imposed by each fund. In the case
of a shareholder holding a share certificate or certificates, no exchanges may
be made until all applicable share certificates have been received by the
Transfer Agent and deposited in the shareholder's account. An exchange will be
treated for federal income tax purposes the same as a repurchase or redemption
of shares, on which the shareholder may realize a capital gain or loss. However,
the ability to deduct capital losses on an exchange may be limited in situations
where there is an exchange of shares within ninety days after the shares are
purchased. The Exchange Privilege is only available in states where an exchange
may legally be made.
If DWR or another Selected Broker-Dealer is the current dealer of record and
its account numbers are part of the account information, shareholders may
initiate an exchange of shares of the Fund for shares of any of the Dean Witter
Funds (for which the Exchange Privilege is available) pursuant to this Exchange
Privilege by contacting their account executive (no Exchange Privilege
Authorization Form is required). Other shareholders (and those shareholders who
are clients of DWR or another Selected Broker-Dealer but who wish to make
exchanges directly by writing or telephoning the Transfer Agent) must complete
and forward to the Transfer Agent an Exchange Privilege Authorization Form,
copies of which may be obtained from the Transfer Agent, to initiate an
exchange. If the Authorization Form is used, exchanges may be made in writing or
by contacting the Transfer Agent at (800) 869-NEWS (toll-free).
The Fund will employ reasonable procedures to confirm that exchange
instructions communicated over the telephone are genuine. Such procedures may
include requiring various forms of personal identification such as name, mailing
address, social security or other tax identification number and DWR or other
Selected Broker-Dealer account number (if any). Telephone instructions may also
be recorded. If such procedures are not employed, the Fund may be liable for any
losses due to unauthorized or fraudulent instructions.
Telephone exchange instructions will be accepted if received by the Transfer
Agent between 9:00 a.m. and 4:00 p.m., New York time, on any day the New York
Stock Exchange is open. Any shareholder wishing to make an exchange who has
previously filed an Exchange Privilege Authorization Form and who is unable to
reach the Fund by telephone should contact his or her DWR or other Selected
Broker-Dealer account executive, if
32
<PAGE> 75
appropriate, or make a written exchange request. Shareholders are advised that
during periods of drastic economic or market changes, it is possible that the
telephone exchange procedures may be difficult to implement, although this has
not been the case with the Dean Witter Funds in the past.
Shareholders should contact their DWR or other Selected Broker-Dealer
account executive or the Transfer Agent for further information about the
Exchange Privilege.
REDEMPTIONS AND REPURCHASES
- --------------------------------------------------------------------------------
REDEMPTION. Shares of each Class of the Fund can be redeemed for cash at
any time at the net asset value per share next determined less the amount of any
applicable CDSC in the case of Class A, Class B or Class C shares (see "Purchase
of Fund Shares"). If shares are held in a shareholder's account without a share
certificate, a written request for redemption to the Fund's Transfer Agent at P.
O. Box 983, Jersey City, NJ 07303 is required. If certificates are held by the
shareholder, the shares may be redeemed by surrendering the certificates with a
written request for redemption, along with any additional documentation required
by the Transfer Agent.
REPURCHASE. DWR and other Selected Broker-Dealers are authorized to
repurchase shares represented by a share certificate which is delivered to any
of their offices. Shares held in a shareholder's account without a share
certificate may also be repurchased by DWR and other Selected Broker-Dealers
upon the telephonic request of the shareholder. The repurchase price is the net
asset value next computed (see "Purchase of Fund Shares") after such repurchase
order is received by DWR or other Selected Broker-Dealer, reduced by any
applicable CDSC.
The CDSC, if any, will be the only fee imposed by the Fund or the
Distributor. The offer by DWR and other Selected Broker-Dealers to repurchase
shares may be suspended without notice by them at any time. In that event,
shareholders may redeem their shares through the Fund's Transfer Agent as set
forth above under "Redemption."
PAYMENT FOR SHARES REDEEMED OR REPURCHASED. Payment for shares presented
for repurchase or redemption will be made by check within seven days after
receipt by the Transfer Agent of the certificate and/or written request in good
order. Such payment may be postponed or the right of redemption suspended under
unusual circumstances, e.g., when normal trading is not taking place on the New
York Stock Exchange. If the shares to be redeemed have recently been purchased
by check, payment of the redemption proceeds may be delayed for the minimum time
needed to verify that the check used for investment has been honored (not more
than fifteen days from the time of investment of the check by the Transfer
Agent). Shareholders maintaining margin accounts with DWR or another Selected
Broker-Dealer are referred to their account executive regarding restrictions on
redemption of shares of the Fund pledged in the margin account.
REINSTATEMENT PRIVILEGE. A shareholder who has had his or her shares
redeemed or repurchased and has not previously exercised this reinstatement
privilege may, within 35 days after the date of the redemption or repurchase,
reinstate any portion or all of the proceeds of such redemption or repurchase in
shares of the Fund in the same Class from which such shares were redeemed or
repurchased, at their net asset value next determined after a reinstatement
request, together with the proceeds, is received by the Transfer Agent and
receive a pro rata credit for any CDSC paid in connection with such redemption
or repurchase.
INVOLUNTARY REDEMPTION. The Fund reserves the right, on sixty days' notice,
to redeem, at their net asset value, the shares of any shareholder (other than
shares held in an Individual Retirement Account or custodial account under
Section 403(b)(7) of the
33
<PAGE> 76
Internal Revenue Code) whose shares have a value of less than $100, or such
lesser amount as may be fixed by the Board of Trustees or, in the case of an
account opened through EasyInvest-SM-, if after twelve months the shareholder
has invested less than $1,000 in the account. However, before the Fund redeems
such shares and sends the proceeds to the shareholder it will notify the
shareholder that the value of the shares is less than the applicable amount and
allow the shareholder sixty days to make an additional investment in an amount
which will increase the value of the account to at least the applicable amount
before the redemption is processed. No CDSC will be imposed on any involuntary
redemption.
DIVIDENDS, DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS. The Fund declares dividends separately for
each Class of shares and intends to pay quarterly income dividends and to
distribute net short-term and net long-term capital gains, if any, at least once
each year. The Fund may, however, determine either to distribute or to retain
all or part of any long-term capital gains in any year for reinvestment.
All dividends and any capital gains distributions will be paid in additional
shares of the same Class and automatically credited to the shareholder's account
without issuance of a share certificate unless the shareholder requests in
writing that all dividends and/or distributions be paid in cash. Shares acquired
by dividend and distribution reinvestments will not be subject to any front-end
sales charge or CDSC. Class B shares acquired through dividend and distribution
reinvestments will become eligible for conversion to Class A shares on a pro
rata basis. Distributions paid on Class A and Class D shares will be higher than
for Class B and Class C shares because distribution fees paid by Class B and
Class C shares are higher. (See "Shareholder Services--Automatic Investment of
Dividends and Distributions.")
TAXES. Because the Fund intends to distribute all of its net investment
income and net short-term capital gains to shareholders and otherwise continue
to qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code, it is not expected that the Fund will be required to pay any
federal income tax. Shareholders who are required to pay taxes on their income
will normally have to pay federal income taxes, and any state income taxes, on
the dividends and distributions they receive from the Fund. Such dividends and
distributions, to the extent that they are derived from net investment income or
net short-term capital gains, are taxable to the shareholder as ordinary income
regardless of whether the shareholder receives such payments in additional
shares or in cash. Any dividends declared in the last quarter of any calendar
year which are paid in the following year prior to February 1 will be deemed,
for tax purposes, to have been received by the shareholder in the prior year.
Gains or losses on the Fund's transactions in listed non-equity options,
futures and options on futures generally are treated as 60% long-term and 40%
short-term capital gains or losses. When the Fund engages in options and futures
transactions, various tax regulations applicable to the Fund may have the effect
of causing the Fund to recognize a gain or loss for tax purposes before that
gain or loss is realized, or to defer recognition of a realized loss for tax
purposes. Recognition, for tax purposes, of an unrealized loss may result in a
lesser amount of the Fund's realized gains being available for annual
distribution.
One of the requirements for the Fund to remain qualified as a regulated
investment company is that less than 30% of the Fund's gross income be derived
from gains from the sale or other disposition of securities held for less than
three months. Accordingly, the Fund may be restricted in the writing of options
on securities held for less than three months, in the writing of options which
expire in less than three
34
<PAGE> 77
months, and in effecting closing transactions with respect to call or put
options which have been written or purchased less than three months prior to
such transactions. The Fund may also be restricted in its ability to engage in
transactions involving futures contracts.
Distributions of net long-term capital gains, if any, are taxable to
shareholders as long-term capital gains regardless of how long a shareholder has
held the Fund's shares and regardless of whether the distribution is received in
additional shares or in cash. Capital gains distributions are not eligible for
the corporate dividends received deduction.
The Fund may at times make payments from sources other than income or net
capital gains.
Payments from such sources would, in effect, represent a return of a portion of
each shareholder's investment. All, or a portion, of such payments would not be
taxable to shareholders.
After the end of the calendar year, shareholders will be sent full
information on their dividends and capital gains distributions for tax purposes.
To avoid being subject to a 31% federal backup withholding tax on taxable
dividends, capital gains distributions and the proceeds of redemptions and
repurchases, shareholders' taxpayer identification numbers must be furnished and
certified as to their accuracy.
Shareholders should consult their tax advisers as to the applicability of
the foregoing to their current situation.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time the Fund may quote its "total return" in advertisements
and sales literature. These figures are computed separately for Class A, Class
B, Class C and Class D shares. The total return of the Fund is based on
historical earnings and is not intended to indicate future performance. The
"average annual total return" of the Fund refers to a figure reflecting the
average annualized percentage increase (or decrease) in the value of an initial
investment in a Class of the Fund of $1,000 over periods of one, five and ten
years, or over the life of the Fund, if less than any of the foregoing. Average
annual total return reflects all income earned by the Fund, any appreciation or
depreciation of the Fund's assets, all expenses incurred by the applicable Class
and all sales charges which would be incurred by shareholders, for the stated
periods. It also assumes reinvestment of all dividends and distributions paid by
the Fund.
In addition to the foregoing, the Fund may advertise its total return for
each Class over different periods of time by means of aggregate, average,
year-by-year or other types of total return figures. Such calculations may or
may not reflect the deduction of any sales charge which, if reflected, would
reduce the performance quoted. The Fund may also advertise the growth of
hypothetical investments of $10,000, $50,000 and $100,000 in each Class of
shares of the Fund. The Fund from time to time may also advertise its
performance relative to certain performance rankings and indexes compiled by
independent organizations (e.g., mutual fund performance rankings of Lipper
Analytical Services, Inc.; S&P 500 stock index; Dow Jones and Company, Inc.
Industrial Average).
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS. All shares of beneficial interest of the Fund are of $0.01
par value and are equal as to earnings, assets and voting privileges except that
each Class will have exclusive voting privileges with respect to matters
relating to distribution expenses borne solely by such Class or any other matter
in which the interests of one Class differ from the interests of any other
Class. In addition, Class B shareholders will have the right to vote on any
proposed material increase in Class A's expenses, if such
35
<PAGE> 78
proposal is submitted separately to Class A shareholders. Also, as discussed
herein, Class A, Class B and Class C bear the expenses related to the
distribution of their respective shares.
The Fund is not required to hold Annual Meetings of Shareholders and in
ordinary circumstances the Fund does not intend to hold such meetings. The
Trustees may call Special Meetings of Shareholders for action by shareholder
vote as may be required by the Act or the Declaration of Trust. Under certain
circumstances, the Trustees may be removed by action of the Trustees or by the
Shareholders.
Under Massachusetts law, shareholders of a business trust may, under certain
limited circumstances, be held personally liable as partners for obligations of
the Fund. However, the Declaration of Trust contains an express disclaimer of
shareholder liability for acts or obligations of the Fund, requires that Fund
obligations include such disclaimer, and provides for indemnification and
reimbursement of expenses out of the Fund's property for any shareholder held
personally liable for the obligations of the Fund. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which the Fund itself would be unable to meet its
obligations. Given the above limitations on shareholder personal liability, and
the nature of the Fund's assets and operations, the possibility of the Fund
being unable to meet its obligations is remote and thus, in the opinion of
Massachusetts counsel to the Fund, the risk to Fund shareholders of personal
liability is remote.
CODE OF ETHICS. Directors, officers and employees of InterCapital, Dean
Witter Services Company Inc. and the Distributor are subject to a strict Code of
Ethics adopted by those companies. The Code of Ethics is intended to ensure that
the interests of shareholders and other clients are placed ahead of any personal
interest, that no undue personal benefit is obtained from a person's employment
activities and that actual and potential conflicts of interest are avoided. To
achieve these goals and comply with regulatory requirements, the Code of Ethics
requires, among other things, that personal securities transactions by employees
of the companies be subject to an advance clearance process to monitor that no
Dean Witter Fund is engaged at the same time in a purchase or sale of the same
security. The Code of Ethics bans the purchase of securities in an initial
public offering, and also prohibits engaging in futures and options transactions
and profiting on short-term trading (that is, a purchase within sixty days of a
sale or a sale within sixty days of a purchase) of a security. In addition,
investment personnel may not purchase or sell a security for their personal
account within thirty days before or after any transaction in any Dean Witter
Fund managed by them. Any violations of the Code of Ethics are subject to
sanctions, including reprimand, demotion or suspension or termination of
employment. The Code of Ethics comports with regulatory requirements and the
recommendations in the 1994 report by the Investment Company Institute Advisory
Group on Personal Investing.
MASTER/FEEDER CONVERSION. The Fund reserves the right to seek to achieve
its investment objective by investing all of its investable assets in a
non-diversified, open-end management investment company having the same
investment objective and policies and substantially the same investment
restrictions as those applicable to the Fund.
SHAREHOLDER INQUIRIES. All inquiries regarding the Fund should be directed
to the Fund at the telephone numbers or address set forth on the front cover of
this Prospectus.
36
<PAGE> 79
THE DEAN WITTER FAMILY OF FUNDS
<TABLE>
<S> <C>
MONEY MARKET FUNDS FIXED-INCOME FUNDS
Dean Witter Liquid Asset Fund Inc. Dean Witter High Yield Securities Inc.
Dean Witter Tax-Free Daily Income Trust Dean Witter Tax-Exempt Securities Trust
Dean Witter New York Municipal Money Market Trust Dean Witter U.S. Government Securities Trust
Dean Witter California Tax-Free Daily Income Trust Dean Witter California Tax-Free Income Fund
Dean Witter U.S. Government Money Market Trust Dean Witter New York Tax-Free Income Fund
EQUITY FUNDS Dean Witter Convertible Securities Trust
Dean Witter American Value Fund Dean Witter Federal Securities Trust
Dean Witter Natural Resource Development Dean Witter World Wide Income Trust
Securities Inc. Dean Witter Intermediate Income Securities
Dean Witter Dividend Growth Securities Inc. Dean Witter Global Short-Term Income Fund Inc.
Dean Witter Developing Growth Securities Trust Dean Witter Multi-State Municipal Series Trust
Dean Witter World Wide Investment Trust Dean Witter Short-Term U.S. Treasury Trust
Dean Witter Value-Added Market Series Dean Witter Diversified Income Trust
Dean Witter Utilities Fund Dean Witter Limited Term Municipal Trust
Dean Witter Precious Metals and Minerals Trust Dean Witter Short-Term Bond Fund
Dean Witter Capital Growth Securities Dean Witter High Income Securities
Dean Witter European Growth Fund Inc. Dean Witter National Municipal Trust
Dean Witter Pacific Growth Fund Inc. Dean Witter Balanced Income Fund
Dean Witter Health Sciences Trust Dean Witter Hawaii Municipal Trust
Dean Witter Global Dividend Growth Securities Dean Witter Intermediate Term U.S. Treasury
Dean Witter Global Utilities Fund Trust
Dean Witter International SmallCap Fund DEAN WITTER RETIREMENT SERIES
Dean Witter Mid-Cap Growth Fund Liquid Asset Series
Dean Witter Balanced Growth Fund U.S. Government Money Market Series
Dean Witter Capital Appreciation Fund U.S. Government Securities Series
Dean Witter Information Fund Intermediate Income Securities Series
Dean Witter Special Value Fund American Value Series
Dean Witter Financial Services Trust Capital Growth Series
Dean Witter Market Leader Trust Dividend Growth Series
Dean Witter S&P 500 Index Fund Strategist Series
ASSET ALLOCATION FUNDS Utilities Series
Dean Witter Strategist Fund Value-Added Market Series
Dean Witter Global Asset Allocation Fund Global Equity Series
ACTIVE ASSETS ACCOUNT PROGRAM
Active Assets Money Trust
Active Assets Tax-Free Trust
Active Assets Government Securities Trust
Active Assets California Tax-Free Trust
</TABLE>
<PAGE> 80
DEAN WITTER
Dean Witter STRATEGIST
Strategist Fund FUND
Two World Trade Center
New York, New York 10048
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Wayne E. Hedien
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive
Officer
Barry Fink
Vice President, Secretary and
General Counsel
Mark Bavoso
Vice President
Thomas F. Caloia
Treasurer
CUSTODIAN
The Bank of New York
90 Washington Street
New York, New York 10286
TRANSFER AGENT AND DIVIDEND
DISBURSING AGENT
Dean Witter Trust FSB
Harborside Financial Center
Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Dean Witter InterCapital Inc.
PROSPECTUS -- SEPTEMBER 26, 1997
<PAGE> 81
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 19, 1998
The undersigned shareholder of Dean Witter Global Asset Allocation Fund does
hereby appoint BARRY FINK, ROBERT M. SCANLAN and JOSEPH MCALINDEN and each of
them, as attorneys-in-fact and proxies of the undersigned, each with the full
power of substitution, to attend the Special Meeting of Shareholders of Dean
Witter Global Asset Allocation Fund to be held on August 19, 1998, in the Career
Development Room, Sixty-First Floor, Two World Trade Center, New York, New York
at 10:00 A.M., New York time, and at all adjournments thereof and to vote the
shares held in the name of the undersigned on the record date for said meeting
for the Proposal specified on the reverse side hereof. Said attorneys-in-fact
shall vote in accordance with their best judgment as to any other matter.
(Continued on reverse side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
"FOR" THE PROPOSAL SET FORTH ON THE REVERSE HEREOF AND AS RECOMMENDED BY THE
BOARD OF TRUSTEES.
IMPORTANT -- THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE.
<PAGE> 82
<TABLE>
<S> <C>
[X] PLEASE MARK BOXES
IN BLACK OR BLUE INK
</TABLE>
The Proposal:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
Approval of the Agreement and Plan of [ ] [ ] [ ]
Reorganization, dated as of April 30, 1998,
pursuant to which substantially all of the
assets
</TABLE>
of Dean Witter Global Asset Allocation Fund would be combined with
those of Dean Witter Strategist Fund and shareholders of Dean Witter
Global Asset Allocation Fund would become shareholders of Dean Witter
Strategist Fund receiving shares in Dean Witter Strategist Fund with a
value equal to the value of their holdings in Dean Witter Global Asset
Allocation Fund.
Please sign personally. If the shares are registered in more than one name, each
joint owner or each fiduciary should sign personally. Only authorized officers
should sign for corporations.
Date
---------------------------
Please make sure to sign and date this
Proxy using black or blue ink.
---------------------------------------
Shareholder sign in the box above
---------------------------------------
Co-Owner (if any) sign in the box above
================================================================================
PLEASE DETACH AT PERFORATION
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
IMPORTANT
PLEASE SEND IN YOUR PROXY......TODAY!
YOU ARE URGED TO DATE AND SIGN THE ATTACHED PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE. THIS WILL HELP SAVE THE EXPENSE OF FOLLOW-UP LETTERS TO
SHAREHOLDERS WHO HAVE NOT RESPONDED.
- --------------------------------------------------------------------------------
