<PAGE>
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST TWO WORLD TRADE CENTER,
LETTER TO THE SHAREHOLDERS OCTOBER 31, 2000 NEW YORK, NEW YORK 10048
DEAR SHAREHOLDER:
Most of the world's investment-grade bond markets showed notable improvement
during the year ended October 31, 2000. The 10-year U.S. Treasury note yield
declined from a high of 6.79 percent in January to 5.75 percent at the end of
the period. This compares with a yield of 6.02 percent in October 1999 and a
cyclical low of 4.16 percent in October 1998. Changes in most other government
securities markets were similar, but less pronounced. Benchmark German
government 10-year yields fell to 5.22 percent at the end of October from a high
of 5.64 percent in January after rising from 5.16 percent at the end of the
previous October. Unfortunately, the continued strength of the U.S. dollar
relative to most investment-grade currencies resulted in currency losses for
most non-dollar-denominated investments.
The primary factor underpinning the U.S. dollar has been the unprecedented
strength of the domestic economy. Through January, the strength of the global
economy also pressured investment-grade bond markets. As the global economy
cooled to a more sustainable growth rate and central banks appeared to be at the
end of tightening cycles, the global bond markets began to rally. Despite the
relative weakening of the U.S. economy, declining U.S. interest rates and a huge
U.S. current-account deficit, the U.S. dollar remained extremely strong compared
to most other currency units. Much of this strength appeared to be the result of
strong foreign direct investment and portfolio flows into the United States.
There were a few bright spots in the investment grade-bond markets during the
period under review. The Greek and U.K. government markets outperformed relative
to the benchmark German market, and the Norwegian, Swedish and British
currencies held up somewhat better than other European currencies.
<PAGE>
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
LETTER TO THE SHAREHOLDERS OCTOBER 31, 2000, CONTINUED
PERFORMANCE AND PORTFOLIO STRATEGY
For the 12-month period ended October 31, 2000, Morgan Stanley Dean Witter World
Wide Income Trust's Class B shares posted a total return of -7.32 percent,
compared to -6.49 percent for the unmanaged Lehman Brothers Global Intermediate
Treasury Index (formerly known as the Lehman Brothers Global Intermediate Bond
Index). For the same period, the Fund's Class A, C and D shares produced total
returns of -6.73 percent, -7.32 percent and -6.52 percent, respectively. The
performance of the Fund's four share classes varies because each class has
different expenses. The total return figures shown assume the reinvestment of
all distributions but do not reflect the deduction of any applicable sales
charges.
Throughout the period under review, the Fund continued its strategy of seeking
the best-performing markets within its investment-grade mandate while
maintaining attractive income and dividend levels. It also kept its duration
exposure below that of most funds in its fund category while the global markets
were under pressure. Duration was increased as it became clear that the outlook
for bonds was improving. Because of the Fund's income objective, it did not
invest in the Japanese markets, where short-term interest rates were near zero.
The Fund also hedged a portion of its currency exposure to limit the effect of
declining non-U.S. exchange rates.
LOOKING AHEAD
On October 26, 2000, the Board of Trustees of Morgan Stanley Dean Witter World
Wide Income Trust voted to recommend to shareholders a reorganization plan
whereby the Fund would be merged into Morgan Stanley Dean Witter Diversified
Income Trust. If approved, the Fund's assets would be combined with the assets
of Morgan Stanley Dean Witter Diversified Income Trust. Shareholders of Morgan
Stanley Dean Witter World Wide Income Trust would become shareholders of Morgan
Stanley Dean Witter Diversified Income Trust, receiving shares of that fund
equal to the value of their holdings in Morgan Stanley Dean Witter World Wide
Income Trust. Each shareholder of Morgan Stanley Dean Witter World Wide Income
Trust would receive the same class of shares of Morgan Stanley Dean Witter
Diversified Income Trust currently held by that shareholder in the Fund.
2
<PAGE>
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
LETTER TO THE SHAREHOLDERS OCTOBER 31, 2000, CONTINUED
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>
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
FUND PERFORMANCE OCTOBER 31, 2000
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 -- CLASS B SHARES
($ in Thousands)
<TABLE>
<CAPTION>
FUND LEHMAN(4)
<S> <C> <C>
October 1990 $10,000 $10,000
October 1991 $9,825 $10,948
October 1992 $10,525 $12,339
October 1993 $11,549 $13,454
October 1994 $11,088 $14,108
October 1995 $12,468 $16,149
October 1996 $14,038 $17,240
October 1997 $15,028 $17,479
October 1998 $16,322 $19,509
October 1999 $15,310 $19,327
October 2000 $14,190(3) $18,073
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RETURNS. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE. WHEN YOU SELL FUND SHARES, THEY MAY BE WORTH
LESS THAN THEIR ORIGINAL COST. PERFORMANCE FOR CLASS A, CLASS C, AND CLASS D
SHARES WILL VARY FROM THE PERFORMANCE OF CLASS B SHARES SHOWN ABOVE DUE TO
DIFFERENCES IN SALES CHARGES AND EXPENSES.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
--------------------------------------------------------------------------------------------------------
CLASS A SHARES* CLASS B SHARES**
--------------------------------------------------- -----------------------------------------------
PERIOD ENDED 10/31/00 PERIOD ENDED 10/31/00
------------------------- -------------------------
<S> <C> <C> <C> <C> <C>
1 Year (6.73)%(1) (10.69)%(2) 1 Year (7.32)%(1) (11.69)%(2)
Since Inception (7/28/97) (0.51)%(1) (1.83)%(2) 5 Years 2.62 %(1) 2.34 %(2)
10 Years 3.56 %(1) 3.56 %(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS C SHARES+ CLASS D SHARES#
------------------------------------------------- ---------------------------------------------
PERIOD ENDED 10/31/00 PERIOD ENDED 10/31/00
------------------------- -------------------------
<S> <C> <C> <C> <C> <C>
1 Year (7.32)%(1) (8.19)%(2) 1 Year (6.52)%(1)
Since Inception (7/28/97) (1.11)%(1) (1.11)%(2) Since Inception (7/28/97) (0.24)%(1)
</TABLE>
------------------------
(1) Figure shown assumes reinvestment of all distributions and does not reflect
the deduction of any sales charges.
(2) Figure shown assumes reinvestment of all distributions and the deduction of
the maximum applicable sales charge. See the Fund's current prospectus for
complete details on fees and sales charges.
(3) Closing value assuming a complete redemption on October 31, 2000.
(4) The Lehman Brothers Intermediate Global Treasury Index (formerly Lehman
Brothers Global Intermediate Bond Index) includes local
currency-denominated sovereign debt of 19 countries with maturities of 1 to
10 years.
The Index does not include any expenses, fees or charges. The Index is
unmanaged and should not be considered an investment.
* The maximum front-end sales charge for Class A is 4.25%.
** The maximum contingent deferred sales charge (CDSC) for Class B is 5.0%.
The CDSC declines to 0% after six years.
+ The maximum contingent deferred sales charge for Class C shares is 1% for
shares redeemed within one year of purchase.
# Class D shares have no sales charge.
4
<PAGE>
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
--------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
GOVERNMENT & CORPORATE BONDS (89.9%)
BELGIUM (5.6%)
GOVERNMENT OBLIGATION
EUR 4,250 Belgian Government Bond+.................................................... 8.50% 10/01/07 $ 4,211,323
-----------
CANADA (6.0%)
GOVERNMENT OBLIGATION
CAD 6,350 Government of Canada........................................................ 7.25 06/01/07 4,469,388
-----------
DENMARK (13.1%)
FINANCE/RENTAL/LEASING (7.4%)
DKK 24,306 Realkredit Denmark+......................................................... 6.00 10/01/29 2,603,887
29,357 Unikredit Realkredit+....................................................... 5.00 07/01/29 2,918,920
-----------
5,522,807
-----------
GOVERNMENT OBLIGATIONS (5.7%)
25,000 Kingdom of Denmark.......................................................... 6.00 11/15/09 2,944,347
12,000 Kingdom of Denmark+......................................................... 9.00 11/15/00 1,370,846
-----------
4,315,193
-----------
TOTAL DENMARK................................................................................. 9,838,000
-----------
GERMANY (0.6%)
MAJOR BANKS
GBP 300 Bayerische Hypo-Und Vereinsbank+............................................ 7.50 12/27/00 435,490
-----------
GREECE (14.4%)
GOVERNMENT OBLIGATIONS
GRD 1,000,000 Greece (Republic of)+....................................................... 8.70 04/08/05 2,778,270
1,500,000 Greece (Republic of)+....................................................... 9.70 05/27/01 3,819,651
1,650,000 Greece (Republic of)........................................................ 6.30 01/29/09 4,205,607
-----------
10,803,528
-----------
LUXEMBOURG (2.1%)
MAJOR BANKS
EUR 1,850 European Investment Bank+................................................... 6.00 04/04/01 1,574,110
-----------
NORWAY (17.4%)
GOVERNMENT OBLIGATIONS
NOK 5,000 Norway (Kingdom of)+........................................................ 5.75 11/30/04 520,885
30,000 Norway (Kingdom of)+........................................................ 6.75 01/15/07 3,273,226
82,000 Norway (Kingdom of)+........................................................ 9.50 10/31/02 9,202,821
-----------
12,996,932
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2000, CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
--------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
UNITED KINGDOM (1.0%)
MAJOR BANKS
GBP 500 Union Bank of Switzerland................................................... 8.00% 01/08/07 $ 772,121
-----------
UNITED STATES (29.7%)
FINANCIAL CONGLOMERATES (3.8%)
2,000 General Electric Capital Corp............................................... 6.25 09/01/09 2,880,998
-----------
GOVERNMENT AGENCIES & OBLIGATIONS (9.5%)
AUD 2,400 Federal National Mortgage Assoc............................................. 6.50 07/10/02 1,246,620
$ 1,000 Federal National Mortgage Assoc............................................. 7.25 01/15/10 1,036,750
4,650 U.S. Treasury Bond*+........................................................ 13.125 05/15/01 4,811,402
-----------
7,094,772
-----------
INTERNATIONAL BANKS (5.0%)
GBP 2,500 KFW International Finance Inc............................................... 10.625 09/03/01 3,743,032
-----------
MAJOR BANKS (4.1%)
1,076 Morgan Guaranty Trust Co.................................................... 7.375 12/28/01 1,573,917
1,000 Morgan Guaranty Trust Co.+.................................................. 7.75 12/30/03 1,499,647
-----------
3,073,564
-----------
MORTGAGE-BACKED SECURITIES (7.3%)
$ 1,927 Government National Mortgage Assoc.......................................... 7.00 02/15/29-
08/15/29 1,899,864
3,533 Government National Mortgage Assoc.......................................... 8.00 12/15/29-
05/15/30 3,590,010
-----------
5,489,874
-----------
TOTAL UNITED STATES........................................................................... 22,282,240
-----------
TOTAL GOVERNMENT & CORPORATE BONDS
(COST $81,876,066)............................................................................ 67,383,132
-----------
SHORT-TERM INVESTMENTS (11.3%)
UNITED STATES
TIME DEPOSITS (a) (6.2%)
MAJOR BANKS
GRD 1,538,247 Bank of America............................................................. 7.70 11/21/00 3,843,888
EUR 984 Chase Manhattan Bank........................................................ 4.70 11/03/00 835,690
-----------
TOTAL TIME DEPOSITS
(COST $5,340,835)............................................................................. 4,679,578
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2000, CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
--------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
GOVERNMENT AGENCY (b) (5.1%)
$ 3,800 Student Loan Marketing Assoc.
(COST $3,800,000)......................................................... 6.45% 11/01/00 $ 3,800,000
-----------
TOTAL SHORT-TERM INVESTMENTS
(COST $9,140,835)............................................................................. 8,479,578
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(COST $91,016,901) (C)..................................................................... 101.2% 75,862,710
LIABILITIES IN EXCESS OF OTHER ASSETS...................................................... (1.2) (878,761)
----- ------------
NET ASSETS................................................................................. 100.0% $ 74,983,949
----- ------------
----- ------------
</TABLE>
---------------------
* The market value of securities pledged to cover margin requirements for
open futures contracts is $630,000.
+ Some or all of these securities are segregated in connection with open
forward foreign currency contracts.
(a) Subject to withdrawal restrictions until maturity.
(b) 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 the
aggregate cost for book purposes. The aggregate gross unrealized
appreciation is $119,399 and the aggregate gross unrealized depreciation is
$15,273,590, resulting in net unrealized depreciation of $15,154,191.
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2000, CONTINUED
FUTURE CONTRACTS OPEN AT OCTOBER 31, 2000:
<TABLE>
<CAPTION>
UNDERLYING
NUMBER OF DESCRIPTION, DELIVERY MONTH, FACE AMOUNT UNREALIZED
CONTRACTS AND YEAR AT VALUE GAIN
-------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S Treasury Bond, December/2000
150 $14,976,563 $ 8,203
============ ============
</TABLE>
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT OCTOBER 31, 2000:
<TABLE>
<CAPTION>
IN
CONTRACTS EXCHANGE DELIVERY UNREALIZED
TO DELIVER FOR DATE APPRECIATION
-------------------------------------------------------------------
<S> <C> <C> <C>
$ 831,655 EUR 984,207 11/01/00 $ 4,035
GBP 559,315 $ 813,384 11/30/00 1,762
------------
Net unrealized appreciation.................. $ 5,797
============
</TABLE>
CURRENCY ABBREVIATIONS:
------------------------
<TABLE>
<S> <C>
AUD Australian Dollar.
GBP British Pound.
CAD Canadian Dollar.
DKK Danish Krone.
EUR Euro.
GRD Greek Drachma.
NOK Norwegian Krone.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 2000
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost $91,016,901)........................................ $ 75,862,710
Unrealized appreciation on open forward foreign currency contracts............................ 5,797
Cash.......................................................................................... 163,003
Receivable for:
Interest.................................................................................. 1,984,337
Shares of beneficial interest sold........................................................ 62,882
Prepaid expenses and other assets............................................................. 21,814
------------
TOTAL ASSETS............................................................................. 78,100,543
------------
LIABILITIES:
Payable for:
Shares of beneficial interest repurchased................................................. 1,974,682
Investments purchased..................................................................... 835,690
Investment management fee................................................................. 50,904
Plan of distribution fee.................................................................. 39,080
Accrued expenses and other payables........................................................... 216,238
------------
TOTAL LIABILITIES........................................................................ 3,116,594
------------
NET ASSETS............................................................................... $ 74,983,949
============
COMPOSITION OF NET ASSETS:
Paid-in-capital............................................................................... $107,003,165
Net unrealized depreciation................................................................... (15,239,395)
Dividends in excess of net investment income.................................................. (79,858)
Accumulated net realized loss................................................................. (16,699,963)
------------
NET ASSETS............................................................................... $ 74,983,949
============
CLASS A SHARES:
Net Assets.................................................................................... $ 24,216,402
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 3,469,748
NET ASSET VALUE PER SHARE................................................................ $6.98
============
MAXIMUM OFFERING PRICE PER SHARE,
(NET ASSET VALUE PLUS 4.44% OF NET ASSET VALUE)........................................ $7.29
============
CLASS B SHARES:
Net Assets.................................................................................... $ 43,537,700
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 6,221,835
NET ASSET VALUE PER SHARE................................................................ $7.00
============
CLASS C SHARES:
Net Assets.................................................................................... $667,516
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 95,529
NET ASSET VALUE PER SHARE................................................................ $6.99
============
CLASS D SHARES:
Net Assets.................................................................................... $6,562,331
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 937,357
NET ASSET VALUE PER SHARE................................................................ $7.00
============
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 2000
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME............................................................................... $ 6,985,965
------------
EXPENSES
Investment management fee..................................................................... 661,679
Plan of distribution fee (Class A shares)..................................................... 58,120
Plan of distribution fee (Class B shares)..................................................... 455,501
Plan of distribution fee (Class C shares)..................................................... 6,493
Transfer agent fees and expenses.............................................................. 151,017
Professional fees............................................................................. 78,528
Shareholder reports and notices............................................................... 77,732
Registration fees............................................................................. 65,601
Trustees' fees and expenses................................................................... 17,776
Custodian fees................................................................................ 12,324
Other......................................................................................... 7,984
------------
TOTAL EXPENSES........................................................................... 1,592,755
------------
NET INVESTMENT INCOME:................................................................... 5,393,210
------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments............................................................................... (6,679,390)
Futures contracts......................................................................... 852,131
Foreign exchange transactions............................................................. 2,719,576
------------
NET LOSS................................................................................. (3,107,683)
------------
Net change in unrealized appreciation/ depreciation on:
Investments............................................................................... (8,557,404)
Futures contracts......................................................................... (200,534)
Translation of forward foreign currency contracts, other assets and liabilities
denominated in foreign currencies....................................................... (233,035)
------------
NET DEPRECIATION......................................................................... (8,990,973)
------------
NET LOSS................................................................................. (12,098,656)
------------
NET DECREASE.................................................................................. $ (6,705,446)
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income................................................................ $ 5,393,210 $ 5,824,612
Net realized loss.................................................................... (3,107,683) (8,285,374)
Net change in unrealized depreciation................................................ (8,990,973) (3,878,832)
------------ ------------
NET DECREASE.................................................................... (6,705,446) (6,339,594)
------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A shares................................................................... (1,286,492) (583,059)
Class B shares................................................................... (2,117,644) (1,711,510)
Class C shares................................................................... (30,348) (14,322)
Class D shares................................................................... (199,689) (49,551)
Paid-in-capital
Class A shares................................................................... (576,179) (1,140,000)
Class B shares................................................................... (948,425) (3,346,351)
Class C shares................................................................... (13,592) (28,002)
Class D shares................................................................... (89,435) (96,883)
------------ ------------
TOTAL DIVIDENDS AND DISTRIBUTIONS............................................... (5,261,804) (6,969,678)
------------ ------------
Net increase (decrease) from transactions in shares of beneficial interest........... (17,044,238) 33,226,526
------------ ------------
NET INCREASE (DECREASE)......................................................... (29,011,488) 19,917,254
NET ASSETS:
Beginning of period.................................................................. 103,995,437 84,078,183
------------ ------------
END OF PERIOD
(INCLUDING DIVIDENDS IN EXCESS OF NET INVESTMENT INCOME OF $79,858, AND $186,241
RESPECTIVELY).................................................................... $ 74,983,949 $103,995,437
============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2000
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
11
<PAGE>
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2000, CONTINUED
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 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 ("forward 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
12
<PAGE>
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2000, CONTINUED
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
contracts which are valued daily at the appropriate exchange rates. The
resultant unrealized exchange 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 tax purposes are
reported as distributions of paid-in-capital.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement, 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.
13
<PAGE>
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2000, 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 daily aggregate 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 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 totaled $9,092,910
at October 31, 2000.
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 year ended October 31, 2000, the distribution fee was
accrued for Class A shares and Class C shares at the annual rate of 0.20% and
0.85%, respectively.
The Distributor has informed the Fund that for the year ended October 31, 2000,
it received contingent deferred sales charges from certain redemptions of the
Fund's Class B shares and Class C
14
<PAGE>
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2000, CONTINUED
shares of $40,577 and $466, respectively, and received $462 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 year ended October 31, 2000 aggregated
$54,349,950, and $54,571,083, respectively. Included in the aforementioned are
purchases and sales of U.S. Government securities of $12,564,677 and
$13,161,448, respectively.
Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At October 31, 2000, the Fund had
transfer agent fees and expenses payable of approximately $200.
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 year ended October 31, 2000 included
in Trustees' fees and expenses in the Statement of Operations amounted to
$6,632. At October 31, 2000, the Fund had an accrued pension liability of
$78,096 which is included in accrued expenses in the Statement of Assets and
Liabilities.
5. FEDERAL INCOME TAX STATUS
At October 31, 2000, the Fund had a net capital loss carryover of approximately
$16,692,000, which may be used to offset future capital gains to the extent
provided by regulations, which will be available through October 31 of the
following years:
<TABLE>
<CAPTION>
AMOUNTS IN THOUSANDS
-------------------------------------------------------------
2001 2002 2004 2005 2007 2008
------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$4,853 $5,322 $214 $471 $4,300 $1,532
====== ====== ==== ==== ====== ======
</TABLE>
Due to the Fund's acquisition of Morgan Stanley Dean Witter Global Short-Term
Income Fund, utilization of this carryover is subject to limitations imposed by
the Internal Revenue Code and Treasury Regulations, significantly reducing the
total carryover available.
15
<PAGE>
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2000, CONTINUED
As of October 31, 2000, the Fund had permanent book/tax differences primarily
attributable to foreign currency losses and an expired capital loss carryover.
To reflect reclassifications arising from these differences, dividends in excess
of net investment income was charged $1,652,654, paid-in-capital was credited
$659,023 and accumulated net realized loss was credited $993,631.
6. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999
--------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Sold............................................................. 4,088,315 $ 30,496,900 1,815,359 $ 14,907,629
Reinvestment of dividends........................................ 139,433 1,039,705 126,396 1,038,579
Acquisition of Morgan Stanley Dean Witter Global Short-Term
Income Fund..................................................... -- -- 4,683,780 40,215,931
Redeemed......................................................... (5,299,850) (39,523,297) (2,218,440) (18,155,151)
----------- ------------- ---------- ------------
Net increase (decrease) - Class A................................ (1,072,102) (7,986,692) 4,407,095 38,006,988
----------- ------------- ---------- ------------
CLASS B SHARES
Sold............................................................. 5,767,090 43,845,960 8,073,133 69,770,271
Reinvestment of dividends........................................ 249,379 1,863,870 356,189 3,038,854
Redeemed......................................................... (7,971,906) (60,348,308) (9,201,928) (79,010,074)
----------- ------------- ---------- ------------
Net decrease - Class B........................................... (1,955,437) (14,638,478) (772,606) (6,200,949)
----------- ------------- ---------- ------------
CLASS C SHARES
Sold............................................................. 29,593 221,714 98,810 856,107
Reinvestment of dividends........................................ 5,115 38,063 4,130 34,529
Redeemed......................................................... (39,889) (298,005) (27,927) (229,069)
----------- ------------- ---------- ------------
Net increase (decrease) - Class C................................ (5,181) (38,228) 75,013 661,567
----------- ------------- ---------- ------------
CLASS D SHARES
Sold............................................................. 2,349,533 17,644,185 2,794,192 22,574,638
Reinvestment of dividends........................................ 22,216 163,189 13,041 106,851
Redeemed......................................................... (1,624,579) (12,188,214) (2,727,393) (21,922,569)
----------- ------------- ---------- ------------
Net increase - Class D........................................... 747,170 5,619,160 79,840 758,920
----------- ------------- ---------- ------------
Net increase (decrease) in Fund.................................. (2,285,550) $ (17,044,238) 3,789,342 $ 33,226,526
=========== ============= ========== ============
</TABLE>
7. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS
The Fund may enter into 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
16
<PAGE>
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2000, CONTINUED
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 October 31, 2000, there were outstanding forward contracts and futures
contracts.
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.
9. FUND MERGER
On October 26, 2000, the Trustees of the Fund and Morgan Stanley Dean Witter
Diversified Income Trust ("Diversified") approved a plan of reorganization ("the
Plan") whereby the Fund would be merged into Diversified. The Plan is subject to
the consent of the Fund's shareholders. If approved, the assets of the Fund
would be combined with the assets of Diversified and shareholders of the Fund
would become shareholders of Diversified, receiving shares of the corresponding
class of Diversified equal to the value of their holdings in the Fund.
17
<PAGE>
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 PERIOD
FOR THE YEAR ENDED OCTOBER 31 JULY 28, 1997*
----------------------------------------- THROUGH
2000 1999 1998 OCTOBER 31, 1997
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period........................ $ 7.98 $ 9.11 $ 9.02 $ 8.97
------- ------- ------- -------
Income (loss) from investment operations:
Net investment income.................................... 0.53 0.52 0.59 0.15
Net realized and unrealized gain (loss).................. (1.05) (1.02) 0.20 0.05
------- ------- ------- -------
Total income (loss) from investment operations.............. (0.52) (0.50) 0.79 0.20
------- ------- ------- -------
Less dividends and distributions from:
Net investment income.................................... (0.33) (0.21) (0.70) (0.15)
Paid-in-capital.......................................... (0.15) (0.42) -- --
------- ------- ------- -------
Total dividends and distributions........................... (0.48) (0.63) (0.70) (0.15)
------- ------- ------- -------
Net asset value, end of period.............................. $ 6.98 $ 7.98 $ 9.11 $ 9.02
======= ======= ======= =======
TOTAL RETURN+............................................... (6.73)% (5.56)% 9.16% 2.27%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................... 1.41 %(3) 1.48 %(3) 1.45%(3) 1.46%(2)
Net investment income....................................... 6.49 %(3) 6.14 %(3) 6.63%(3) 6.69%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $24,216 $36,253 $1,227 $682
Portfolio turnover rate..................................... 73 % 144 % 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>
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE YEAR ENDED OCTOBER 31
-----------------------------------------------------------------------
2000++ 1999++ 1998++ 1997*++ 1996
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CLASS B SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of period..................... $ 8.00 $ 9.12 $ 9.03 $ 9.33 $ 9.08
--------- ------- ------- --------- ---------
Income (loss) from investment operations:
Net investment income................................. 0.48 0.47 0.53 0.55 0.60
Net realized and unrealized gain (loss)............... (1.05) (1.02) 0.20 0.07 0.48
--------- ------- ------- --------- ---------
Total income (loss) from investment operations........... (0.57) (0.55) 0.73 0.62 1.08
--------- ------- ------- --------- ---------
Less dividends and distributions from:
Net investment income................................. (0.30) (0.19) (0.64) (0.92) (0.83)
Paid-in-capital....................................... (0.13) (0.38) -- -- --
--------- ------- ------- --------- ---------
Total dividends and distributions........................ (0.43) (0.57) (0.64) (0.92) (0.83)
--------- ------- ------- --------- ---------
Net asset value, end of period........................... $ 7.00 $ 8.00 $ 9.12 $ 9.03 $ 9.33
========= ======= ======= ========= =========
TOTAL RETURN+............................................ (7.32)% (6.20)% 8.61% 7.05% 12.60%
RATIOS TO AVERAGE NET ASSETS:
Expenses................................................. 2.06 %(1) 2.09 %(1) 2.07%(1) 2.02% 1.96%
Net investment income.................................... 5.84 %(1) 5.53 %(1) 6.01%(1) 6.07% 6.39%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands.................. $43,538 $65,415 $81,611 $94,556 $114,022
Portfolio turnover rate.................................. 73 % 144 % 309% 345% 263%
</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) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE>
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR ENDED OCTOBER 31 JULY 28, 1997*
----------------------------------------- THROUGH
2000 1999 1998 OCTOBER 31, 1997
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS C SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period........................ $ 7.99 $ 9.11 $ 9.02 $ 8.97
------- ------- ------- ---------
Income (loss) from investment operations:
Net investment income.................................... 0.47 0.47 0.53 0.14
Net realized and unrealized gain (loss).................. (1.04) (1.02) 0.20 0.05
------- ------- ------- ---------
Total income (loss) from investment operations.............. (0.57) (0.55) 0.73 0.19
------- ------- ------- ---------
Less dividends and distributions from:
Net investment income.................................... (0.30) (0.19) (0.64) (0.14)
Paid-in-capital.......................................... (0.13) (0.38) -- --
------- ------- ------- ---------
Total dividends and distributions........................... (0.43) (0.57) (0.64) (0.14)
------- ------- ------- ---------
Net asset value, end of period.............................. $ 6.99 $ 7.99 $ 9.11 $ 9.02
======= ======= ======= =========
TOTAL RETURN+............................................... (7.32)% (6.19)% 8.62% 2.12%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................... 2.06 %(3) 2.09 %(3) 2.07%(3) 2.00%(2)
Net investment income....................................... 5.84 %(3) 5.53 %(3) 6.01%(3) 5.89%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $668 $805 $234 $111
Portfolio turnover rate..................................... 73 % 144 % 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
20
<PAGE>
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR ENDED OCTOBER 31 JULY 28, 1997*
----------------------------------------- THROUGH
2000 1999 1998 OCTOBER 31, 1997
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS D SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period........................ $ 8.01 $ 9.12 $ 9.03 $ 8.97
------- ------- ------- -------
Income (loss) from investment operations:
Net investment income.................................... 0.51 0.53 0.72 0.16
Net realized and unrealized gain (loss).................. (1.03) (0.99) 0.09 0.05
------- ------- ------- -------
Total income (loss) from investment operations.............. (0.52) (0.46) 0.81 0.21
------- ------- ------- -------
Less dividends and distributions from:
Net investment income.................................... (0.34) (0.22) (0.72) (0.15)
Paid-in-capital.......................................... (0.15) (0.43) -- --
------- ------- ------- -------
Total dividends and distributions........................... (0.49) (0.65) (0.72) (0.15)
------- ------- ------- -------
Net asset value, end of period.............................. $ 7.00 $ 8.01 $ 9.12 $ 9.03
======= ======= ======= =======
TOTAL RETURN+............................................... (6.52)% (5.29)% 9.41% 2.44%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................... 1.21 %(3) 1.24 %(3) 1.22%(3) 1.16%(2)
Net investment income....................................... 6.69 %(3) 6.38 %(3) 6.86%(3) 6.83%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $6,562 $1,523 $1,006 $39
Portfolio turnover rate..................................... 73 % 144 % 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
21
<PAGE>
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
INDEPENDENT AUDITORS' REPORT
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES
OF MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST:
We have audited the accompanying statement of assets and liabilities of Morgan
Stanley Dean Witter World Wide Income Trust (the "Fund"), including the
portfolio of investments, as of October 31, 2000, and the related statements of
operations and changes in net assets, and the financial highlights for the year
then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audit. The statement of changes in net assets for the year ended October 31,
1999 and the financial highlights for each of the respective stated periods
ended October 31, 1999 were audited by other independent accountants whose
report, dated December 13, 1999, expressed an unqualified opinion on that
statement and financial highlights.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 2000, by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Morgan
Stanley Dean Witter World Wide Income Trust as of October 31, 2000, the results
of its operations, the changes in its net assets, and the financial highlights
for the year then ended, in conformity with accounting principles generally
accepted in the United States of America.
Deloitte & Touche LLP
NEW YORK, NEW YORK
DECEMBER 5, 2000
2000 FEDERAL TAX NOTICE (UNAUDITED)
Of the Fund's ordinary income dividends paid during the fiscal
year ended October 31, 2000, 17.93% was attributable to qualifying
Federal obligations. Please consult your tax advisor to determine
if any portion of the dividends you received is exempt from state
income tax.
22
<PAGE>
MORGAN STANLEY DEAN WITTER WORLD WIDE INCOME TRUST
CHANGE IN INDEPENDENT ACCOUNTANTS
On July 1, 2000 PricewaterhouseCoopers LLP resigned as independent accountants
of the Fund.
The reports of PricewaterhouseCoopers LLP on the financial statements of the
Fund for the past two fiscal years contained no adverse opinion or disclaimer of
opinion and were not qualified or modified as to uncertainty, audit scope or
accounting principle.
In connection with its audits for the two most recent fiscal years and through
July 1, 2000, there have been no disagreements with PricewaterhouseCoopers LLP
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements if not resolved
to the satisfaction of PricewaterhouseCoopers LLP would have caused them to make
reference thereto in their report on the financial statements for such years.
The Fund, with the approval of its Board of Directors and its Audit Committee,
engaged Deloitte & Touche LLP as its new independent auditors as of July 1,
2000.
23
<PAGE>
TRUSTEES
Michael Bozic Morgan Stanley
Charles A. Fiumefreddo Dean Witter
Edwin J. Garn World Wide
Wayne E. Hedien Income Trust
James F. Higgins
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
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 AUDITORS
Deloitte & Touche LLP
Two World Financial Center
New York, New York 10281
INVESTMENT MANAGER
Morgan Stanley Dean Witter Advisors Inc. Annual Report
Two World Trade Center October 31, 2000
New York, New York 10048
This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and
trustees, fees, expenses and other pertinent information, please see the
prospectus of the Fund.
This report is not authorized for distribution to prospective investors in
the Fund unless preceded or accompanied by an effective prospectus. Read the
prospectus carefully before investing.
Morgan Stanley Dean Witter Distributors Inc., member NASD.
