<PAGE> 1
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST Two World Trade Center
LETTER TO THE SHAREHOLDERS April 30, 1999 New York, New York 10048
DEAR SHAREHOLDER:
During the six-month period ended April 30, 1999, the performance of the global
fixed-income markets was mixed. The U.S. market entered into a significant
correction following its spectacular performance through early October. Other
upper-investment-grade global markets closed higher, with the help of
interest-rate cuts by their respective monetary authorities. However, the rising
dollar resulted in currency losses for most non-dollar-denominated investments.
Emerging markets and other sub-investment-grade markets enjoyed significant
recoveries during the period.
MARKET OVERVIEW
In the United States, the bond market initially benefited from low domestic
inflation and a fragile global financial system. However, as the U.S. economy
continued to surge and the price of oil and other commodities increased, market
participants began to fear a pickup in the rate of inflation and the likelihood
of a tightening in monetary policy by the Federal Reserve Board. As a result,
yields on ten-year Treasuries increased from their October low of 4.10 percent
to 5.35 percent at the end of April.
GLOBAL BOND MARKET OVERVIEW
European bond yields initially moved lower as it became evident that growth in
the major European economies was slowing. The European Central Bank supported
the markets with a 0.50 percent cut in official interest rates in early April.
This backdrop allowed yields on ten-year German government bonds to decline by
0.27 percent despite the deterioration in the U.S. market. There were even
greater opportunities to be found by looking beyond the benchmark U.S. and
German markets. Within the United States, the mortgage and corporate sectors
posted relatively high returns, as did the other dollar-bloc markets (New
Zealand, Australia and Canada). Yields dropped by some 0.40 percent in
<PAGE> 2
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
LETTER TO THE SHAREHOLDERS April 30, 1999, continued
the U.K. and Danish markets, 0.75 percent in the Norwegian and 2.22 percent in
the Greek market during the six-month period.
The U.S. economy continued to surprise investors with stronger than expected
growth, leading the U.S. dollar to recover from its earlier decline against core
European currencies and surge by almost 12 percent, to within a fraction of the
highest levels seen in almost a decade. The European commodity currencies -- the
Norwegian and Swedish kroners and the British pound -- fell by 3 to 6 percent
relative to the dollar, with their declines being blunted by the beneficial
effects of rising commodity prices.
PERFORMANCE
For the six-month period ended April 30, 1999, Morgan Stanley Dean Witter World
Wide Income Trust's Class B shares posted a total return of -3.80 percent,
compared to -3.03 percent for the unmanaged Lehman Brothers Global Intermediate
Bond Index and 1.43 percent for the Lipper Global Income Funds Index. For the
same period, the Fund's Class A, C and D shares produced total returns of -3.44
percent, -3.79 percent and -3.29 percent, respectively. The performance of the
Fund's four share classes varies because of differing expenses.
The underperformance of the Fund relative to the Lipper Global Income Funds
Index was primarily due to the fact that most of the funds in this Lipper
category include emerging-market investments, which are not within the
investment mandate for this fund. It should also be noted that, by eschewing
emerging-market investments, the Fund escaped the negative returns on those
investments during the prior six-month period and generally has enjoyed
commensurately lower volatility.
PORTFOLIO
Throughout the period under review, the Fund continued its strategy of investing
in the most attractive markets within its upper-investment-grade mandate.
Consequently, its investment allocations generally mirrored the best-performing
markets within its universe. The key non-U.S. allocations as of April 30, 1999,
were Greece (19 percent), Norway (16 percent), U.K. (17 percent), Denmark (11
percent) and New Zealand (10 percent). These markets enjoyed both the highest
incomes available and the best price performance potential. The Fund also
benefited from maintaining a significant portion of its U.S. allocation in
mortgages during the first few months of the period. Thereafter, the Fund
reduced its weighting in the U.S. market as it became apparent that the U.S.
economy was too strong to accommodate lower bond yields.
2
<PAGE> 3
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
LETTER TO THE SHAREHOLDERS April 30, 1999, continued
LOOKING AHEAD
In the months ahead, we anticipate a continuation of the Fund's strategy of
emphasizing the previously noted non-U.S. bond markets, because we believe that
these markets still offer the highest incomes and the best prospective returns.
We also expect the Fund to benefit from anticipated rising non-U.S. currency
exchange rates, particularly with respect to its European investments. If the
U.S. economy slows and the European economies gather momentum, the outsized $300
billion U.S. current-account deficit is expected to produce a significant
improvement in the relative attractiveness of European currencies.
On May 1, 1999, Mitchell M. Merin was named President of the Morgan Stanley Dean
Witter Funds. Mr. Merin is also the President and Chief Operating Officer of
Asset Management of Morgan Stanley Dean Witter & Co. and President, Chief
Executive Officer and Director of Morgan Stanley Dean Witter Advisors Inc., the
Fund's Investment Manager. He also serves as Chairman, Chief Executive Officer
and Director of the Fund's distributor and transfer agent.
We appreciate your ongoing support of Morgan Stanley Dean Witter World Wide
Income Trust and look forward to continuing to serve your investment needs.
Very truly yours,
/S/ CHARLES A. FIUMEFREDDO /S/ MITCHELL M. MERIN
CHARLES A. FIUMEFREDDO MITCHELL M. MERIN
Chairman of the Board President
3
<PAGE> 4
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
PORTFOLIO OF INVESTMENTS April 30, 1999 (unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
-----------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
GOVERNMENT & CORPORATE BONDS (84.2%)
DENMARK (11.0%)
Finance Companies (9.3%)
DKK 24,959 Danske Kredit+..................... 5.00% 10/01/29 $ 3,336,537
24,826 Realkredit Denmark+................ 6.00 10/01/29 3,499,009
29,980 Unikredit Realkredit+.............. 5.00 10/01/29 4,009,882
-----------
10,845,428
-----------
Government Obligations (1.7%)
5,000 Kingdom of Denmark+................ 9.00 11/15/00 773,682
7,000 Kingdom of Denmark+................ 8.00 03/15/06 1,235,030
-----------
2,008,712
-----------
TOTAL DENMARK.......................................... 12,854,140
-----------
EUROPE (1.8%)
Extra Governmental Institutions - Banking
EUR 1,850 European Investment Bank+.......... 6.00 04/04/01 2,071,608
-----------
GERMANY (0.8%)
Major Banks
GBP 300 Bayerische Hypotheken Bank+........ 6.75 12/30/99 485,083
300 Bayerische Vereinsbank+............ 7.50 12/27/00 495,736
-----------
980,819
-----------
GREECE (6.2%)
Government Obligations
GRD 1,000,000 Greece (Republic of)............... 8.90 03/21/04 3,609,297
1,000,000 Greece (Republic of)+.............. 8.70 04/08/05 3,646,625
-----------
7,255,922
-----------
ITALY (1.6%)
Government Obligation
EUR 1,608 Italy Treasury Bond................ 10.50 07/15/00 1,852,891
-----------
NEW ZEALAND (5.8%)
Extra Governmental Institutions -
Banking (4.2%)
NZD 8,500 International Bank for
Reconstruction & Development+..... 7.00 09/18/00 4,869,318
-----------
Government Obligation (1.6%)
3,000 New Zealand Government Bond........ 10.00 03/15/02 1,895,599
-----------
TOTAL NEW ZEALAND...................................... 6,764,917
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE> 5
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
PORTFOLIO OF INVESTMENTS April 30, 1999 (unaudited) continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
-----------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
NORWAY (14.9%)
Government Obligations
NOK 30,000 Norway (Kingdom of)+............... 5.75% 11/30/04 $ 4,059,584
82,000 Norway (Kingdom of)+............... 9.50 10/31/02 12,120,039
9,500 Norway (Kingdom of)+............... 7.00 05/31/01 1,271,530
-----------
17,451,153
-----------
SPAIN (2.9%)
Government Obligation
EUR 3,005 Spain Treasury Bond+............... 12.25 03/25/00 3,442,287
-----------
UNITED KINGDOM (12.9%)
Government Obligations (10.9%)
GBP 3,000 U.K. Treasury Bond+................ 10.00 02/26/01 5,238,080
4,000 U.K. Treasury Bond+................ 7.50 12/07/06 7,534,214
-----------
12,772,294
-----------
Major Banks (2.0%)
900 Halifax PLC+....................... 8.375 12/15/99 1,468,126
500 Union Bank of Switzerland.......... 8.00 01/08/07 903,459
-----------
2,371,585
-----------
TOTAL UNITED KINGDOM................................... 15,143,879
-----------
UNITED STATES (26.3%)
Major Banks (3.0%)
GBP 2,000 Morgan Guaranty Trust Co.+......... 7.75 12/30/03 3,466,440
-----------
Government Agencies & Obligations (23.3%)
NZD 3,000 Federal National Mortgage
Assoc.+.......................... 7.25 06/20/02 1,746,667
4,500 Federal National Mortgage
Assoc.+.......................... 7.00 09/26/00 2,577,683
$ 12,750 U.S. Treasury Bond*+............... 13.125 05/15/01 14,696,160
3,000 U.S. Treasury Bond+................ 5.25 02/15/29 2,815,080
10,000 U.S. Treasury Bond Strip+.......... 0.00 11/15/09 5,438,400
-----------
27,273,990
-----------
TOTAL UNITED STATES.................................... 30,740,430
-----------
TOTAL GOVERNMENT & CORPORATE BONDS
(Identified Cost $103,826,430)......................... 98,558,046
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE> 6
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
PORTFOLIO OF INVESTMENTS April 30, 1999 (unaudited) continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
-----------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
SHORT-TERM INVESTMENTS (15.0%)
UNITED STATES
TIME DEPOSITS (a) (13.0%)
Major Banks
GRD 1,400,000 Bankers Trust...................... 9.25% 08/16/99 $ 4,547,817
2,123,294 Bankers Trust...................... 9.25 05/17/99 6,897,395
707,801 Bankers Trust...................... 10.00 08/09/99 2,299,250
87,142 Chase Manhattan Bank............... 8.75 05/17/99 283,075
NOK 9,064 Chase Manhattan Bank............... 6.75 05/18/99 1,161,906
------------
TOTAL TIME DEPOSITS
(Identified Cost $16,612,261).......................... 15,189,443
------------
GOVERNMENT AGENCY (b) (2.0%)
$ 2,300 Student Loan Marketing Assoc.
(Amortized Cost $2,299,387)........ 4.80 05/03/99 2,299,387
------------
TOTAL SHORT-TERM INVESTMENTS
(Identified Cost $18,911,648).......................... 17,488,830
------------
TOTAL INVESTMENTS
(Identified Cost $122,738,078) (c)............. 99.2% 116,046,876
CASH AND OTHER ASSETS IN EXCESS
OF LIABILITIES................................... 0.8 927,857
----- ------------
NET ASSETS..................................... 100.0% $116,974,733
===== ============
</TABLE>
- ---------------------
<TABLE>
<C> <S>
* The market value of securities pledged to cover margin
requirements for open futures contracts is $330,000.
+ Some or all of these securities are segregated in connection
with open forward foreign currency contracts.
(a) Subject to withdrawal restrictions until maturity.
(b) Security was purchased on a discount basis. The interest
rate shown has been adjusted to reflect a money market
equivalent yield.
(c) The aggregate cost for federal income tax purposes
approximates identified cost. The aggregate gross unrealized
appreciation is $755,610 and the aggregate gross unrealized
depreciation is $7,446,812, resulting in net unrealized
depreciation of $6,691,202.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE> 7
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
PORTFOLIO OF INVESTMENTS April 30, 1999 (unaudited) continued
FUTURES CONTRACTS OPEN AT APRIL 30, 1999:
<TABLE>
<CAPTION>
NUMBER OF DESCRIPTION, DELIVERY MONTH, UNDERLYING FACE UNREALIZED
CONTRACTS AND YEAR AMOUNT AT VALUE LOSS
<S> <C> <C> <C>
- ------------------------------------------------------------------------
165 U.S. Treasury Bond June/1999 $19,830,938 $(258,828)
=========== =========
</TABLE>
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT APRIL 30, 1999:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS IN DELIVERY APPRECIATION
TO DELIVER EXCHANGE FOR DATE (DEPRECIATION)
<S> <C> <C> <C>
- --------------------------------------------------------
JPY 149,813,000 $ 1,253,183 05/06/99 $ (1,511)
NZD 2,220,000 $ 1,191,052 05/06/99 (50,017)
GBP 974,000 $ 1,563,270 05/07/99 (3,273)
GBP 164,000 $ 264,040 05/12/99 285
GBP 575,000 $ 925,750 05/12/99 1,001
NZD 900,000 $ 478,035 05/12/99 (25,137)
GBP 1,144,000 $ 1,844,128 05/17/99 4,393
NOK 9,036,000 $ 1,169,936 05/18/99 12,928
EUR 2,794,000 $ 2,992,178 05/20/99 32,215
EUR 2,425,000 $ 2,598,873 05/21/99 29,658
NZD 2,935,000 $ 1,545,865 05/24/99 (95,270)
JPY 285,362,000 $ 2,393,354 05/26/99 (3,129)
NZD 11,669,000 $ 6,231,713 05/26/99 (293,281)
NZD 3,069,000 $ 1,621,353 06/02/99 (94,893)
EUR 8,750,000 $ 9,290,663 06/04/99 11,579
GBP 1,100,000 $ 1,839,200 06/15/99 70,686
GBP 1,900,000 $ 3,176,800 06/15/99 122,094
GBP 1,690,000 $ 2,823,990 06/15/99 106,909
GBP 563,000 $ 940,773 06/15/99 35,615
$ 4,147,650 EUR 3,545,000 10/14/99 (354,689)
---------
Net unrealized depreciation...... $(493,837)
=========
</TABLE>
<TABLE>
<CAPTION>
Currency Abbreviations:
- -----------------------
<C> <S>
GBP British Pound.
DKK Danish Krone.
EUR Euro.
DEM German Deutchemark.
GRD Greek Drachma.
JPY Japanese Yen.
NZD New Zealand Dollar.
NOK Norwegian Krone.
</TABLE>
7
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 8
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
<S> <C>
April 30, 1999 (unaudited)
ASSETS:
Investments in securities, at value
(identified cost $122,738,078).............. $116,046,876
Unrealized appreciation on open forward
foreign currency contracts.................. 427,363
Cash (including $3,047 in foreign
currency)................................... 150,261
Receivable for:
Interest................................. 2,554,145
Compensated forward foreign currency
contracts............................... 690,638
Capital stock sold....................... 101,977
Prepaid expenses and other assets............ 54,287
------------
TOTAL ASSETS............................. 120,025,547
------------
LIABILITIES:
Unrealized depreciation on open forward
foreign currency contracts.................. 921,200
Payable for:
Compensated forward foreign currency
contracts............................... 1,353,208
Variation margin......................... 317,344
Capital stock repurchased................ 141,695
Investment management fee................ 73,247
Plan of distribution fee................. 61,889
Accrued expenses and other payables.......... 182,231
------------
TOTAL LIABILITIES........................ 3,050,814
------------
NET ASSETS............................... $116,974,733
============
COMPOSITION OF NET ASSETS:
Paid-in-capital.............................. $136,241,682
Net unrealized depreciation.................. (7,471,191)
Accumulated undistributed net investment
income...................................... 229,407
Accumulated net realized loss................ (12,025,165)
------------
NET ASSETS............................... $116,974,733
============
CLASS A SHARES:
Net Assets................................... $40,427,420
Shares Outstanding (unlimited authorized,
$.01 par value)............................. 4,794,222
NET ASSET VALUE PER SHARE................ $8.43
=====
MAXIMUM OFFERING PRICE PER SHARE, (net
asset value plus 4.44% of net asset
value).................................. $8.80
=====
CLASS B SHARES:
Net Assets................................... $74,519,659
Shares Outstanding (unlimited authorized,
$.01 par value)............................. 8,818,636
NET ASSET VALUE PER SHARE................ $8.45
=====
CLASS C SHARES:
Net Assets................................... $820,629
Shares Outstanding (unlimited authorized,
$.01 par value)............................. 97,220
NET ASSET VALUE PER SHARE................ $8.44
=====
CLASS D SHARES:
Net Assets................................... $1,207,025
Shares Outstanding (unlimited authorized,
$.01 par value)............................. 142,885
NET ASSET VALUE PER SHARE................ $8.45
=====
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the six months ended April 30, 1999 (unaudited)
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME (net of $14,542 foreign
withholding tax)........................ $ 3,450,905
------------
EXPENSES
Investment management fee................ 347,705
Plan of distribution fee (Class A
shares)................................. 13,779
Plan of distribution fee (Class B
shares)................................. 335,675
Plan of distribution fee (Class C
shares)................................. 2,131
Transfer agent fees and expenses......... 67,599
Professional fees........................ 39,340
Registration fees........................ 32,582
Shareholder reports and notices.......... 26,284
Custodian fees........................... 22,475
Directors' fees and expenses............. 21,369
Other.................................... 2,365
------------
TOTAL EXPENSES....................... 911,304
------------
NET INVESTMENT INCOME................ 2,539,601
------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain/loss on:
Investments.......................... 1,264,571
Futures contracts.................... (679,810)
Foreign exchange transactions........ (1,416,508)
------------
NET LOSS............................. (831,747)
------------
Net change in unrealized
appreciation/depreciation on:
Investments.......................... (5,115,300)
Futures contracts.................... (201,172)
Translation of forward foreign
currency contracts, other assets and
liabilities denominated in foreign
currencies.......................... 214,871
------------
NET DEPRECIATION..................... (5,101,601)
------------
NET LOSS............................. (5,933,348)
------------
NET DECREASE............................. $ (3,393,747)
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE> 9
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
FINANCIAL STATEMENTS, continued
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
APRIL 30, 1999 OCTOBER 31, 1998
- --------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income................................ $ 2,539,601 $ 5,289,603
Net realized gain (loss)............................. (831,747) 1,915,563
Net change in unrealized depreciation................ (5,101,601) (179,923)
------------ ------------
NET INCREASE (DECREASE).......................... (3,393,747) 7,025,243
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM
NET INVESTMENT INCOME:
Class A shares....................................... (477,335) (103,498)
Class B shares....................................... (3,012,889) (6,294,099)
Class C shares....................................... (17,852) (10,651)
Class D shares....................................... (45,613) (33,682)
------------ ------------
TOTAL DIVIDENDS.................................. (3,553,689) (6,441,930)
------------ ------------
Net increase (decrease) from capital stock
transactions........................................ 39,843,986 (11,893,088)
------------ ------------
NET INCREASE (DECREASE).......................... 32,896,550 (11,309,775)
NET ASSETS:
Beginning of period.................................. 84,078,183 95,387,958
------------ ------------
END OF PERIOD
(Including undistributed net investment income of
$229,407 and $982,035, respectively)............. $116,974,733 $ 84,078,183
============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE> 10
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS April 30, 1999 (unaudited)
1. ORGANIZATION AND ACCOUNTING POLICIES
Morgan Stanley Dean Witter World Wide Income Trust (the "Fund") is registered
under the Investment Company Act of 1940, as amended (the "Act"), as a
non-diversified, open-end management investment company. The Fund's primary
investment objective is to provide a high level of current income and, as a
secondary objective, seeks appreciation in the value of its assets. The Fund was
organized as a Massachusetts business trust on October 14, 1988 and commenced
operations on March 30, 1989. On July 28, 1997, the Fund converted to a multiple
class share structure.
The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase and some
Class A shares, and most Class B shares and Class C shares are subject to a
contingent deferred sales charge imposed on shares redeemed within one year, six
years and one year, respectively. Class D shares are not subject to a sales
charge. Additionally, Class A shares, Class B shares and Class C shares incur
distribution expenses.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ from
these estimates.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) all portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest available bid price prior to the time of valuation; (2) futures contracts
are valued at the latest sale price on the commodities exchange on which it
trades unless the Trustees determine that such price does not reflect their
market value, in which case they will be valued at fair value as determined by
the Trustees; (3) when market quotations are not readily available, including
circumstances under which it is determined by Morgan Stanley Dean Witter
Advisors Inc. (the "Investment Manager") that sale or bid prices are not
reflective of a security's market value, portfolio securities are valued at
their fair value as determined in good faith under procedures established by and
under the general supervision of the Trustees (valuation of debt securities for
which market quotations are not readily available may be based upon current
market prices of securities which are comparable in coupon, rating and maturity
or an appropriate matrix utilizing similar factors); (4) certain portfolio
securities may be valued by an outside pricing service approved by the Trustees.
The pricing service may utilize a matrix system incorporating security quality,
maturity and coupon as the evaluation model parameters, and/or research and
evaluations by its staff, including review of broker-dealer market price
quotations, if available, in determining what it believes is the fair valuation
of the securities valued by such pricing service; and (5) short-term debt
10
<PAGE> 11
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS April 30, 1999 (unaudited) continued
securities having a maturity date of more than sixty days at time of purchase
are valued on a mark-to-market basis until sixty days prior to maturity and
thereafter at amortized cost based on their value on the 61st day. Short-term
debt securities having a maturity date of sixty days or less at the time of
purchase are valued at amortized cost.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
Discounts are accreted over the life of the respective securities. Interest
income is accrued daily.
C. MULTIPLE CLASS ALLOCATIONS -- Investment income, expenses (other than
distribution fees), and realized and unrealized gains and losses are allocated
to each class of shares based upon the relative net asset value on the date such
items are recognized. Distribution fees are charged directly to the respective
class.
D. FUTURES CONTRACTS -- A futures contract is an agreement between two parties
to buy and sell financial instruments at a set price on a future date. Upon
entering into such a contract, the Fund is required to pledge to the broker
cash, U.S. Government securities or other liquid portfolio securities equal to
the minimum initial margin requirements of the applicable futures exchange.
Pursuant to the contract, the Fund agrees to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in the value of the contract
which is known as variation margin. Such receipts or payments are recorded by
the Fund as unrealized gains or losses. Upon closing of the contract, the Fund
realizes a gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was closed.
E. FOREIGN CURRENCY TRANSLATION -- The books and records of the Fund are
maintained in U.S. dollars as follows: (1) the foreign currency market value of
investment securities, other assets and liabilities and forward foreign currency
contracts are translated at the exchange rates prevailing at the end of the
period; and (2) purchases, sales, income and expenses are translated at the
exchange rates prevailing on the respective dates of such transactions. The
resultant exchange gains and losses are included in the Statement of Operations
as realized and unrealized gain/loss on foreign exchange transactions. Pursuant
to U.S. Federal income tax regulations, certain foreign exchange gains/losses
included in realized and unrealized gain/loss are included in or are a reduction
of ordinary income for federal income tax purposes. The Fund does not isolate
that portion of the results of operations arising as a result of changes in the
foreign exchange rates from the changes in the market prices of the securities.
F. FORWARD FOREIGN CURRENCY CONTRACTS -- The Fund may enter into forward foreign
currency contracts which are valued daily at the appropriate exchange rates. The
resultant unrealized exchange
11
<PAGE> 12
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS April 30, 1999 (unaudited) continued
gains and losses are included in the Statement of Operations as unrealized
foreign currency gain or loss. The Fund records realized gains or losses on
delivery of the currency or at the time the forward contract is extinguished
(compensated) by entering into a closing transaction prior to delivery.
G. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.
H. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to its shareholders on the record date. The amount of dividends
and distributions from net investment income and net realized capital gains are
determined in accordance with federal income tax regulations which may differ
from generally accepted accounting principles. These "book/tax" differences are
either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within the
capital accounts based on their federal tax-basis treatment; temporary
differences do not require reclassification. Dividends and distributions which
exceed net investment income and net realized capital gains for financial
reporting purposes but not for tax purposes are reported as dividends in excess
of net investment income or distributions in excess of net realized capital
gains. To the extent they exceed net investment income and net realized capital
gains for tax purposes, they are reported as distributions of paid-in-capital.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement with the Investment Manager the
Fund pays a management fee, accrued daily and payable monthly, by applying the
following annual rates to the net assets of the Fund determined as of the close
of each business day: 0.75% to the portion of daily net assets not exceeding
$250 million; 0.60% to the portion of daily net assets exceeding $250 million
but not exceeding $500 million; 0.50% to the portion of daily net assets
exceeding $500 million but not exceeding $750 million; 0.40% to the portion of
daily net assets exceeding $750 million but not exceeding $1 billion; and 0.30%
to the portion of daily net assets exceeding $1 billion.
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund's books and
records and furnishes, at its own expense, office space, facilities, equipment,
clerical, bookkeeping and certain legal services and pays the salaries of all
personnel, including officers of the Fund who are employees of the Investment
Manager. The Investment Manager also bears the cost of telephone services, heat,
light, power and other utilities provided to the Fund.
12
<PAGE> 13
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS April 30, 1999 (unaudited) continued
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Morgan Stanley Dean Witter Distributors
Inc. (the "Distributor"), an affiliate of the Investment Manager. The Fund has
adopted a Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the
Act. The Plan provides that the Fund will pay the Distributor a fee which is
accrued daily and paid monthly at the following annual rates: (i) Class A -- up
to 0.25% of the average daily net assets of Class A; (ii) Class B -- 0.85% of
the lesser of: (a) the average daily aggregate gross sales of the Class B shares
since inception of the Fund (not including reinvestment of dividend or capital
gain distributions) less the average net asset value of the Class B shares
redeemed since the Fund's inception upon which a contingent deferred sales
charge has been imposed or waived; or (b) the average daily net assets of Class
B; and (iii) Class C -- up to 0.85% of the average daily net assets of Class C.
In the case of Class A shares, amounts paid under the Plan are paid to the
Distributor for services provided. In the case of Class B and Class C shares,
amounts paid under the Plan are paid to the Distributor for (1) services
provided and the expenses borne by it and others in the distribution of the
shares of these Classes, including the payment of commissions for sales of these
Classes and incentive compensation to, and expenses of, Morgan Stanley Dean
Witter Financial Advisors and others who engage in or support distribution of
the shares or who service shareholder accounts, including overhead and telephone
expenses; (2) printing and distribution of prospectuses and reports used in
connection with the offering of these shares to other than current shareholders;
and (3) 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 Dean Witter
Reynolds Inc. ("DWR"), an affiliate of the Investment Manager and Distributor,
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.
In the case of Class B shares, provided that the Plan continues in effect, any
cumulative expenses incurred by the Distributor but not yet recovered may be
recovered through the payment of future distribution fees from the Fund pursuant
to the Plan and contingent deferred sales charges paid by investors upon
redemption of Class B shares. Although there is no legal obligation for the Fund
to pay expenses incurred in excess of payments made to the Distributor under the
Plan and the proceeds of contingent deferred sales charges paid by investors
upon redemption of shares, if for any reason the Plan is terminated, the
Trustees will consider at that time the manner in which to treat such expenses.
The Distributor has advised the Fund that such excess amounts, including
carrying charges, totaled $8,548,956 at April 30, 1999.
13
<PAGE> 14
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS April 30, 1999 (unaudited) continued
In the case of Class A shares and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 0.85% of the average daily
net assets of Class A or Class C, respectively, will not be reimbursed by the
Fund through payments in any subsequent year, except that expenses representing
a gross sales credit to Morgan Stanley Dean Witter Financial Advisors or other
selected broker-dealer representatives may be reimbursed in the subsequent
calendar year. For the six months ended April 30, 1999, the distribution fee was
accrued for Class A shares and Class C shares at the annual rate of 0.23% and
0.85%, respectively.
The Distributor has informed the Fund that for the six months ended April 30,
1999, it received contingent deferred sales charges from certain redemptions of
the Fund's Class B shares of $21,124 and received $2,198 in front-end sales
charges from sales of the Fund's Class A shares. The respective shareholders pay
such charges which are not an expense of the Fund.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the six months ended April 30, 1999 aggregated
$54,634,468 and $67,783,890, respectively. Included in the aforementioned are
purchases and sales of U.S. Government securities of $3,012,826 and $30,083,504,
respectively.
Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At April 30, 1999, the Fund had
transfer agent fees and expenses payable of approximately $300.
The Fund has an unfunded noncontributory defined benefit pension plan covering
all independent Trustees of the Fund who will have served as independent
Trustees for at least five years at the time of retirement. Benefits under this
plan are based on years of service and compensation during the last five years
of service. Aggregate pension costs for the six months ended April 30, 1999
included in Trustees' fees and expenses in the Statement of Operations amounted
to $15,231. At April 30, 1999, the Fund had an accrued pension liability of
$79,536 which is included in accrued expenses in the Statement of Assets and
Liabilities.
14
<PAGE> 15
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS April 30, 1999 (unaudited) continued
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
APRIL 30, 1999 OCTOBER 31, 1998
------------------------- -------------------------
(unaudited)
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Sold........................................................ 245,773 $ 2,168,916 362,853 $ 3,265,836
Reinvestment of dividends................................... 33,665 286,892 5,632 49,638
Acquisition of Morgan Stanley Dean Witter Global Short-Term
Income Fund................................................ 4,683,780 40,215,931 -- --
Redeemed.................................................... (303,751) (2,638,569) (309,381) (2,779,713)
---------- ------------ ---------- ------------
Net increase - Class A...................................... 4,659,467 40,033,170 59,104 535,761
---------- ------------ ---------- ------------
CLASS B SHARES
Sold........................................................ 4,943,205 44,421,442 3,566,324 31,772,971
Reinvestment of dividends................................... 204,301 1,805,454 429,255 3,787,888
Redeemed.................................................... (5,278,748) (47,332,737) (5,520,553) (49,041,324)
---------- ------------ ---------- ------------
Net decrease - Class B...................................... (131,242) (1,105,841) (1,524,974) (13,480,465)
---------- ------------ ---------- ------------
CLASS C SHARES
Sold........................................................ 72,928 642,496 12,490 110,678
Reinvestment of dividends................................... 1,664 14,531 1,027 9,061
Redeemed.................................................... (3,069) (26,968) (122) (1,111)
---------- ------------ ---------- ------------
Net increase - Class C...................................... 71,523 630,059 13,395 118,628
---------- ------------ ---------- ------------
CLASS D SHARES
Sold........................................................ 36,264 319,004 109,596 964,530
Reinvestment of dividends................................... 2,875 25,306 1,844 16,303
Redeemed.................................................... (6,601) (57,712) (5,403) (47,845)
---------- ------------ ---------- ------------
Net increase - Class D...................................... 32,538 286,598 106,037 932,988
---------- ------------ ---------- ------------
Net increase (decrease) in Fund............................. 4,632,286 $ 39,843,986 (1,346,438) $(11,893,088)
========== ============ ========== ============
</TABLE>
6. FEDERAL INCOME TAX STATUS
At October 31, 1998, the Fund had a net capital loss carryover of approximately
$4,160,000 which will be available through October 31, 2002 to offset future
capital gains to the extent provided by regulations.
As of October 31, 1998, the Fund had temporary book/tax differences primarily
attributable to the mark-to-market of open forward foreign currency exchange
contracts and compensated forward foreign currency exchange contracts.
The Investment Manager has determined that distribution from paid-in-capital is
likely to occur for the fiscal year ended October 31, 1999.
15
<PAGE> 16
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS April 30, 1999 (unaudited) continued
7. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS
The Fund may enter into forward foreign currency contracts ("forward contracts")
to facilitate settlement of foreign currency denominated portfolio transactions
or to manage its foreign currency exposure or to sell, for a fixed amount of
U.S. dollars or other currency, the amount of foreign currency approximating the
value of some or all of its holdings denominated in such foreign currency or an
amount of foreign currency other than the currency in which the securities to be
hedged are denominated approximating the value of some or all of its holdings to
be hedged. Additionally, when the Investment Manager anticipates purchasing
securities at some time in the future, the Fund may enter into a forward
contract to purchase an amount of currency equal to some or all the value of the
anticipated purchase for a fixed amount of U.S. dollars or other currency.
To hedge against adverse interest rate, foreign currency and market risks, the
Fund may enter into written options on interest rate futures and interest rate
futures contracts ("derivative investments").
Forward contracts and derivative instruments involve elements of market risk in
excess of the amount reflected in the Statement of Assets and Liabilities. The
Fund bears the risk of an unfavorable change in the foreign exchange rates
underlying the forward contracts. Risks may also arise upon entering into these
contracts from the potential inability of the counterparties to meet the terms
of their contracts.
At April 30, 1999, there were outstanding forward contracts used to facilitate
settlement of foreign currency denominated portfolio transactions and to manage
foreign currency exposure.
8. ACQUISITION OF MORGAN STANLEY DEAN WITTER GLOBAL SHORT-TERM INCOME FUND INC.
As of the close of business on March 12, 1999, the Fund acquired all the net
assets of Morgan Stanley Dean Witter Global Short-Term Income Fund Inc. ("Global
Short-Term") pursuant to a plan of reorganization approved by the shareholders
of Global Short-Term on February 24, 1999. The acquisition was accomplished by a
tax-free exchange of 4,683,780 Class A shares of the Fund at a net asset value
of $8.59 per share for 4,700,195 shares of Global Short-Term. The net assets of
the Fund and Global Short-Term immediately before the acquisition were
$80,419,774 and $40,215,931, respectively, including unrealized depreciation of
$893,307 for Global Short-Term. Immediately after the acquisition, the combined
net assets of the Fund amounted to $120,635,705.
16
<PAGE> 17
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR ENDED OCTOBER 31
MONTHS ENDED ----------------------------------------------------
APRIL 30, 1999++ 1998++ 1997*++ 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of period.................... $ 9.12 $ 9.03 $ 9.33 $ 9.08 $ 8.55 $ 9.39
-------- -------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income.................................. 0.23 0.53 0.55 0.60 0.55 0.55
Net realized and unrealized gain (loss)................ (0.57) 0.20 0.07 0.48 0.48 (0.92)
-------- -------- -------- -------- -------- --------
Total income (loss) from investment operations.......... (0.34) 0.73 0.62 1.08 1.03 (0.37)
-------- -------- -------- -------- -------- --------
Less dividends and distributions from:
Net investment income.................................. (0.33) (0.64) (0.92) (0.83) (0.50) (0.22)
Paid-in-capital........................................ -- -- -- -- -- (0.25)
-------- -------- -------- -------- -------- --------
Total dividends and distributions....................... (0.33) (0.64) (0.92) (0.83) (0.50) (0.47)
-------- -------- -------- -------- -------- --------
Net asset value, end of period.......................... $ 8.45 $ 9.12 $ 9.03 $ 9.33 $ 9.08 $ 8.55
======== ======== ======== ======== ======== ========
TOTAL RETURN+........................................... (3.80)%(1) 8.61% 7.05% 12.60% 12.45% (3.99)%
RATIOS TO AVERAGE NET ASSETS:
Expenses................................................ 2.06%(2)(3) 2.07%(3) 2.02% 1.96% 1.93% 1.91%
Net investment income................................... 5.38%(2)(3) 6.01%(3) 6.07% 6.39% 6.21% 5.87%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands................. $74,520 $81,611 $94,556 $114,022 $138,165 $179,563
Portfolio turnover rate................................. 67%(1) 309% 345% 263% 254% 229%
</TABLE>
- ---------------------
* Prior to July 28, 1997, the Fund issued one class of shares. All shares of
the Fund held prior to that date have been designated as Class B shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE> 18
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX FOR THE YEAR JULY 28, 1997*
MONTHS ENDED ENDED THROUGH
APRIL 30, 1999 OCTOBER 31, 1998 OCTOBER 31, 1997
- ------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C>
CLASS A SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period........................ $9.11 $9.02 $8.97
----- ----- -----
Income (loss) from investment operations:
Net investment income...................................... 0.27 0.59 0.15
Net realized and unrealized gain (loss).................... (0.58) 0.20 0.05
----- ----- -----
Total income (loss) from investment operations.............. (0.31) 0.79 0.20
----- ----- -----
Less dividends from net investment income................... (0.37) (0.70) (0.15)
----- ----- -----
Net asset value, end of period.............................. $8.43 $9.11 $9.02
===== ===== =====
TOTAL RETURN+............................................... (3.44)%(1) 9.16% 2.27%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................... 1.44%(2)(3) 1.45%(3) 1.46%(2)
Net investment income....................................... 6.00%(2)(3) 6.63%(3) 6.69%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $40,427 $1,227 $682
Portfolio turnover rate..................................... 67%(1) 309% 345%
CLASS C SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period........................ $9.11 $9.02 $8.97
----- ----- -----
Income (loss) from investment operations:
Net investment income...................................... 0.24 0.53 0.14
Net realized and unrealized gain (loss).................... (0.58) 0.20 0.05
----- ----- -----
Total income (loss) from investment operations.............. (0.34) 0.73 0.19
----- ----- -----
Less dividends from net investment income................... (0.33) (0.64) (0.14)
----- ----- -----
Net asset value, end of period.............................. $8.44 $9.11 $9.02
===== ===== =====
TOTAL RETURN+............................................... (3.79)%(1) 8.62% 2.12%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................... 2.06%(2)(3) 2.07%(3) 2.00%(2)
Net investment income....................................... 5.38%(2)(3) 6.01%(3) 5.89%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $821 $234 $111
Portfolio turnover rate..................................... 67%(1) 309% 345%
</TABLE>
- ---------------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE> 19
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
FINANCIAL HIGHLIGHTS, continued
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX FOR THE YEAR JULY 28, 1997*
MONTHS ENDED ENDED THROUGH
APRIL 30, 1999 OCTOBER 31, 1998 OCTOBER 31, 1997
- ------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C>
CLASS D SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period........................ $9.12 $9.03 $8.97
----- ----- -----
Income (loss) from investment operations:
Net investment income...................................... 0.27 0.72 0.16
Net realized and unrealized gain (loss).................... (0.57) 0.09 0.05
----- ----- -----
Total income (loss) from investment operations.............. (0.30) 0.81 0.21
----- ----- -----
Less dividends from net investment income................... (0.37) (0.72) (0.15)
----- ----- -----
Net asset value, end of period.............................. $8.45 $9.12 $9.03
===== ===== =====
TOTAL RETURN+............................................... (3.29)%(1) 9.41% 2.44%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................... 1.21%(2)(3) 1.22%(3) 1.16%(2)
Net investment income....................................... 6.23%(2)(3) 6.86%(3) 6.83%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $1,207 $1,006 $39
Portfolio turnover rate..................................... 67%(1) 309% 345%
</TABLE>
- ---------------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Calculated based on the net asset value as of the last business day of the
period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE> 20
TRUSTEES
- ------------------------------
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
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
Mitchell M. Merin
President
Barry Fink
Vice President, Secretary and General Counsel
Rajesh K. Gupta
Vice President
Anne Pickrell
Vice President
Peter J. Seeley
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
- ------------------------------
Morgan Stanley Dean Witter Trust FSB
Harborside Financial Center -- Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
- ------------------------------
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
- ------------------------------
Morgan Stanley Dean Witter Advisors Inc.
Two World Trade Center
New York, New York 10048
The financial statements included herein have been taken from the records of the
Trust without examination by the independent accountants and accordingly they do
not express an opinion thereon.
This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and trustees,
fees, expenses and other pertinent information, please see the prospectus of the
Fund.
This report is not authorized for distribution to prospective investors in the
Fund unless preceded or accompanied by an effective prospectus.
MORGAN STANLEY
DEAN WITTER
WORLD WIDE
INCOME TRUST
Semiannual Report
April 30, 1999
