<PAGE>
PROSPECTUS - FEBRUARY 23, 1999
Morgan Stanley Dean Witter
CAPITAL GROWTH SECURITIES
[COVER PHOTO]
A MUTUAL FUND THAT SEEKS LONG-TERM CAPITAL GROWTH
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of
this PROSPECTUS. Any representation to the contrary is a criminal offense.
<PAGE>
CONTENTS
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The Fund Investment Objective.................................. 1
Principal Investment Strategies....................... 1
Principal Risks....................................... 1
Past Performance...................................... 2
Fees and Expenses..................................... 3
Additional Investment Strategy Information............ 4
Additional Risk Information........................... 4
Fund Management....................................... 6
Shareholder Information Pricing Fund Shares................................... 7
How to Buy Shares..................................... 7
How to Exchange Shares................................ 9
How to Sell Shares.................................... 10
Distributions......................................... 12
Tax Consequences...................................... 13
Share Class Arrangements.............................. 13
Financial Highlights ...................................................... 20
Our Family of Funds ...................................................... Inside Back Cover
THIS PROSPECTUS CONTAINS IMPORTANT INFORMATION ABOUT THE FUND.
PLEASE READ IT CAREFULLY AND KEEP IT FOR FUTURE REFERENCE.
</TABLE>
FUND CATEGORY
---------------------------
/X/ GROWTH
/ / Growth and Income
/ / Income
/ / Money Market
<PAGE>
(SIDEBAR)
CAPITAL GROWTH
AN INVESTMENT OBJECTIVE HAVING THE GOAL OF SELECTING SECURITIES WITH THE
POTENTIAL TO RISE IN VALUE RATHER THAN PAY OUT INCOME.
(END SIDEBAR)
THE FUND
ICON INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
Morgan Stanley Dean Witter Capital Growth Securities is a mutual fund
that seeks long-term capital growth. There is no guarantee that the Fund
will achieve this objective.
ICON PRINCIPAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
The Fund will normally invest at least 65% of its assets in common
stocks. The Fund's "Investment Manager," Morgan Stanley Dean Witter
Advisors Inc., utilizes a two-stage computerized screening process
designed to find companies that demonstrate a history of consistent
growth in earnings and revenues over the past several years, and have
solid future earnings growth characteristics and attractive valuations.
Dividend income is not a consideration in this stock selection process.
Companies meeting these requirements are potential candidates for
investment by the Fund. The Investment Manager may modify the screening
process and/or may utilize additional or different screening processes
in connection with the Fund's investments.
Common stock is a share ownership or equity interest in a corporation.
It may or may not pay dividends, as some companies reinvest all of their
profits back into their businesses, while others pay out some of their
profits to shareholders as dividends.
In addition to common stocks, the Fund may invest up to 35% of its
assets in U.S. Government securities (including zero coupon bonds),
investment grade fixed-income securities, preferred securities,
convertible securities and real estate investment trusts known as
"REITs".
The Fund may also invest up to 25% of its assets in foreign securities
(including depository receipts). This percentage limitation, however,
does not apply to securities of foreign companies that are listed in the
U.S. on a national securities exchange.
In pursuing the Fund's investment objective, the Investment Manager has
considerable leeway in deciding which investments it buys, holds or
sells on a day-to-day basis -- and which trading strategies it uses. For
example, the Investment Manager in its discretion may determine to use
some permitted trading strategies while not using others.
ICON PRINCIPAL RISKS
- --------------------------------------------------------------------------------
The Fund's share price will fluctuate with changes in the market value
of the Fund's portfolio securities. When you sell Fund shares, they may
be worth less than what you paid for them and, accordingly, you can lose
money investing in this Fund.
A principal risk of investing in the Fund is associated with its common
stock investments. In general, stock values fluctuate in response to
activities specific to the company as well as general market, economic
and political conditions. Stock prices can fluctuate widely in response
to these factors.
1
<PAGE>
(SIDEBAR)
ANNUAL TOTAL RETURNS
THIS CHART SHOWS HOW THE PERFORMANCE OF THE FUND'S CLASS B SHARES HAS VARIED
FROM YEAR TO YEAR OVER THE LIFE OF THE FUND.
AVERAGE ANNUAL
TOTAL RETURNS
THIS TABLE COMPARES THE FUND'S AVERAGE ANNUAL RETURNS WITH THOSE OF A BROAD
MEASURE OF MARKET PERFORMANCE OVER TIME. THE FUND'S RETURNS INCLUDE THE MAXIMUM
APPLICABLE SALES CHARGE FOR EACH CLASS AND ASSUME YOU SOLD YOUR SHARES AT THE
END OF EACH PERIOD.
(END SIDEBAR)
The performance of the Fund also will depend on whether or not the
Investment Manager is successful in pursuing the Fund's investment
strategy. The Fund is also subject to other risks from its permissible
investments including the risks associated with its fixed-income,
convertible and foreign investments. For more information about these
risks, see the "Additional Risk Information" section.
Shares of the Fund are not bank deposits and are not guaranteed or
insured by any bank, governmental entity, or the FDIC.
ICON PAST PERFORMANCE
- --------------------------------------------------------------------------------
The bar chart and table below provide some indication of the risks of
investing in the Fund. The Fund's past performance does not indicate how
the Fund will perform in the future.
ANNUAL TOTAL RETURNS - CALENDAR YEARS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
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1990* 3.49%
91 47.97%
92 -0.47%
93 -9.01%
94 -3.03%
95 31.28%
96 10.67%
97 25.20%
98 16.98%
</TABLE>
The bar chart reflects the performance of Class B shares; the performance of the
other Classes will differ because the Classes have different ongoing fees. The
performance information in the bar chart does not reflect the deduction of sales
charges; if these amounts were reflected, returns would be less than shown.
* For the period April 2, 1990 to December 31, 1990.
During the periods shown in the bar chart, the highest return for a calendar
quarter was 19.84% (quarter ended December 31, 1998) and the lowest return for a
calendar quarter was -16.30% (quarter ended September 30, 1990).
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED THE 1998 CALENDAR YEAR)
- --------------------------------------------------------------------------------
PAST 1 YEAR PAST 5 YEARS LIFE OF
FUND(4)
(SINCE 4/2/90)
<S> <C> <C> <C>
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Class A 11.68% -- --
- --------------------------------------------------------------------------------
Class B(1) 11.98% 15.37% 12.77%
- --------------------------------------------------------------------------------
Class C 15.98% -- --
- --------------------------------------------------------------------------------
Class D 18.11% -- --
- --------------------------------------------------------------------------------
S&P 500(2) 28.58% 24.05% 18.91%
- --------------------------------------------------------------------------------
Lipper Growth Funds Index(3) 25.69% 19.82% 16.98%
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</TABLE>
1 Prior to July 28, 1997, the Fund only issued Class B shares.
2 The Standard & Poor's 500 Stock Index (S&P 500) is a broad-based index, the
performance of which is based on the average performance of 500 widely held
common stocks. The performance of the Index does not include any expenses,
fees or charges. The Index is unmanaged and should not be considered an
investment.
3 The Lipper Growth Fund Index is an equally-weighted performance index of
the largest qualifying funds (based on net assets) in the Lipper Growth
Funds objective. The Index, which is adjusted for capital gains
distributions and income dividends, is unmanaged and should not be
considered an investment. There are currently 30 funds represented in this
Index.
4 The return of the Lipper Growth Funds Index is from April 5, 1990 to
December 31, 1998.
<PAGE>
(SIDEBAR)
SHAREHOLDER FEES
THESE FEES ARE PAID DIRECTLY FROM YOUR INVESTMENT.
ANNUAL FUND
OPERATING EXPENSES
THESE EXPENSES ARE DEDUCTED FROM THE FUND'S ASSETS AND ARE BASED ON EXPENSES
PAID FOR THE FISCAL YEAR ENDED OCTOBER 31, 1998.
(END SIDEBAR)
ICON FEES AND EXPENSES
- --------------------------------------------------------------------------------
The Fund offers four Classes of shares: Classes A, B, C and D. Each
Class has a different combination of fees, expenses and other features.
The table below briefly describes the fees and expenses that you may pay
if you buy and hold shares of the Fund. The Fund does not charge account
or exchange fees. See the "Share Class Arrangements" section for further
fee and expense information.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS D
<S> <C> <C> <C> <C>
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SHAREHOLDER FEES
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Maximum sales charge (load) imposed on purchases (as a
percentage of offering price) 5.25%(1) None None None
- ---------------------------------------------------------------------------------------------------------
Maximum deferred sales charge (load) (as a percentage based
on the lesser of the offering price or net asset value at
redemption) None(2) 5.00%(3) 1.00%(4) None
- ---------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
- ---------------------------------------------------------------------------------------------------------
Management fee 0.64% 0.64% 0.64% 0.64%
- ---------------------------------------------------------------------------------------------------------
Distribution and service (12b-1) fees 0.25% 1.00% 1.00% None
- ---------------------------------------------------------------------------------------------------------
Other expenses 0.20% 0.20% 0.20% 0.20%
- ---------------------------------------------------------------------------------------------------------
Total annual Fund operating expenses 1.09% 1.84% 1.84% 0.84%
- ---------------------------------------------------------------------------------------------------------
</TABLE>
1 Reduced for purchases of $25,000 and over.
2 Investments that are not subject to any sales charge at the time of
purchase are subject to a contingent deferred sales charge ("CDSC") of
1.00% that will be imposed on sales made within one year after purchase,
except for certain specific circumstances.
3 The CDSC is scaled down to 1.00% during the sixth year, reaching zero
thereafter. See "Share Class Arrangements" for a complete discussion of the
CDSC.
4 Only applicable to sales made within one year after purchase.
EXAMPLE
This Example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the Fund, your investment
has a 5% return each year, and the Fund's operating expenses remain the
same. Although your actual costs may be higher or lower, the qtables
below show your costs at the end of each period based on these
assumptions depending upon whether or not you sell your shares at the
end of each period.
<TABLE>
<CAPTION>
IF YOU SOLD YOUR SHARES: IF YOU HELD YOUR SHARES:
----------------------------------------- -----------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------- -----------------------------------------
CLASS A $630 $853 $1,094 $1,784 $630 $853 $1,094 $1,784
- ---------------------------------------------------------- -----------------------------------------
CLASS B $687 $879 $1,195 $2,159 $187 $579 $ 995 $2,159
- ---------------------------------------------------------- -----------------------------------------
CLASS C $287 $579 $ 995 $2,159 $187 $579 $ 995 $2,159
- ---------------------------------------------------------- -----------------------------------------
CLASS D $ 86 $268 $ 466 $1,037 $ 86 $268 $ 466 $1,037
- ---------------------------------------------------------- -----------------------------------------
</TABLE>
3
<PAGE>
ICON ADDITIONAL INVESTMENT STRATEGY INFORMATION
- --------------------------------------------------------------------------------
This section provides additional information concerning the Fund's
principal strategies.
DEFENSIVE INVESTING. The Fund may take temporary "defensive" positions
in attempting to respond to adverse market conditions. The Fund may
invest any amount of its assets in cash or money market instruments in a
defensive posture when the Investment Manager believes it is advisable
to do so. Although taking a defensive posture is designed to protect the
Fund from an anticipated market downturn, it could have the effect of
reducing the benefit from any upswing in the market.
PORTFOLIO TURNOVER. The Fund may engage in active and frequent trading
of portfolio securities to achieve its principal investment strategies.
The portfolio turnover rate is not expected to exceed 200% annually
under normal circumstances. A high turnover rate will increase Fund
brokerage costs. It also may increase the Fund's capital gains, which
are passed along to Fund shareholders as distributions. This, in turn,
may increase your tax liability as a Fund shareholder. See the sections
on "Distributions" and "Tax Consequences."
The percentage limitations relating to the composition of the Fund's
portfolio referenced in "Principal Investment Strategies" apply at the
time the Fund acquires an investment. Subsequent percentage changes that
result from market fluctuations or changes in assets will not require
the Fund to sell any portfolio security. The Fund may change its
principal investment strategies without shareholder approval; however,
you would be notified of any changes.
ICON ADDITIONAL RISK INFORMATION
- --------------------------------------------------------------------------------
As discussed in the "Principal Risks" section, a principal risk of
investing in the Fund is associated with its common stock investments.
This section provides additional information regarding the principal
risks of investing in the Fund.
FIXED-INCOME SECURITIES. Principal risks of investing in the Fund are
associated with its fixed-income investments. All fixed-income
securities, such as corporate debt, are subject to two types of risk:
credit risk and interest rate risk. Credit risk refers to the
possibility that the issuer of a security will be unable to make
interest payments and/or repay the principal on its debt.
Interest rate risk refers to fluctuations in the value of a fixed-income
security resulting from changes in the general level of interest rates.
When the general level of interest rates goes up, the prices of most
fixed-income securities go down. When the general level of interest
rates goes down, the prices of most fixed-income securities go up. (Zero
coupon securities are typically subject to greater price fluctuations
than comparable securities that pay interest.)
4
<PAGE>
CONVERTIBLE SECURITIES. The Fund also may invest a portion of its assets
in convertible securities, which are securities that generally pay
interest and may be converted into common stock. These securities may
carry risks associated with both common stock and fixed-income
securities.
FOREIGN SECURITIES. The Fund's investments in foreign securities
(including depository receipts) involve risks that are in addition to
the risks associated with domestic securities. One additional risk is
currency risk. While the price of Fund shares is quoted in U.S. dollars,
the Fund generally converts U.S. dollars to a foreign market's local
currency to purchase a security in that market. If the value of that
local currency falls relative to the U.S. dollar, the U.S. dollar value
of the foreign security will decrease. This is true even if the foreign
security's local price remains unchanged.
Foreign securities also have risks related to economic and political
developments abroad, including expropriations, confiscatory taxation,
exchange control regulation, limitations on the use or transfer of Fund
assets and any effects of foreign social, economic or political
instability. Foreign companies, in general, are not subject to the
regulatory requirements of U.S. companies and, as such, there may be
less publicly available information about these companies. Moreover,
foreign accounting, auditing and financial reporting standards generally
are different from those applicable to U.S. companies. Finally, in the
event of a default of any foreign debt obligations, it may be more
difficult for the Fund to obtain or enforce a judgment against the
issuers of the securities.
Securities of foreign issuers may be less liquid than comparable
securities of U.S. issuers and, as such, their price changes may be more
volatile. Furthermore, foreign exchanges and broker-dealers are
generally subject to less government and exchange scrutiny and
regulation than their U.S. counterparts.
Many European countries have adopted or are in the process of adopting a
single European currency, referred to as the "euro." The consequences of
the euro conversion for foreign exchange rates, interest rates and the
value of European securities the Fund may purchase are presently
unclear. The consequences may adversely affect the value and/or increase
the volatility of securities held by the Fund.
REITS. REITs pool investors' funds for investments primarily in
commercial real estate properties. Like mutual funds, REITs have
expenses, including advisory and administration fees, that are paid by
its shareholders. As a result, you will absorb duplicate levels of fees
when the Fund invests in REITs. The performance of any Fund REIT
holdings ultimately depends on the types of real property in which the
REITs invest and how well the property is managed. A general downturn in
real estate values also can hurt REIT performance.
YEAR 2000. The Fund could be adversely affected if the computer systems
necessary for the efficient operation of the Investment Manager, the
Fund's other service providers and the markets and individual and
governmental issuers in which the Fund invests do not properly process
and calculate date-related information from and after January 1, 2000.
While year 2000-related computer problems could have a negative effect
on the Fund, the Investment Manager and affiliates are working hard to
avoid any problems and to obtain assurances from their service providers
that they are taking similar steps.
5
<PAGE>
(SIDEBAR)
MORGAN STANLEY DEAN WITTER ADVISORS INC.
THE INVESTMENT MANAGER IS WIDELY RECOGNIZED AS A LEADER IN THE MUTUAL FUND
INDUSTRY AND TOGETHER WITH MORGAN STANLEY DEAN WITTER SERVICES COMPANY INC., ITS
WHOLLY-OWNED SUBSIDIARY, HAS MORE THAN $127 BILLION IN ASSETS UNDER MANAGEMENT
OR ADMINISTRATION AS OF JANUARY 31, 1999.
(END SIDEBAR)
ICON FUND MANAGEMENT
- --------------------------------------------------------------------------------
The Fund has retained the Investment Manager -- Morgan Stanley Dean
Witter Advisors Inc. -- to provide administrative services, manage its
business affairs and invest its assets, including the placing of orders
for the purchase and sale of portfolio securities. The Investment
Manager is a wholly-owned subsidiary of Morgan Stanley Dean Witter &
Co., a preeminent global financial services firm that maintains leading
market positions in each of its three primary businesses: securities,
asset management and credit services. Its main business office is
located at Two World Trade Center, New York, NY 10048.
The Fund's portfolio is managed within the Investment Manager's Growth
Group. Peter Hermann, a Vice President of the Investment Manager has
been the primary portfolio manager of the Fund since April 1996. Mr.
Hermann has been a portfolio manager with the Investment Manager for
over five years.
The Fund pays the Investment Manager a monthly management fee as full
compensation for the services and facilities furnished to the Fund, and
for Fund expenses assumed by the Investment Manager. The fee is based on
the Fund's average daily net assets. For the fiscal year ended October
31, 1998 the Fund accrued total compensation to the Investment Manager
amounting to 0.64% of the Fund's average daily net assets.
6
<PAGE>
(SIDEBAR)
CONTACTING A FINANCIAL ADVISOR
IF YOU ARE NEW TO THE MORGAN STANLEY DEAN WITTER FAMILY OF FUNDS AND WOULD LIKE
TO CONTACT A FINANCIAL ADVISOR, CALL (800) THE-DEAN FOR THE TELEPHONE NUMBER OF
THE MORGAN STANLEY DEAN WITTER OFFICE NEAREST YOU. YOU MAY ALSO ACCESS OUR
OFFICE LOCATOR ON OUR INTERNET SITE AT: WWW.DEANWITTER.COM/FUNDS
(END SIDEBAR)
SHAREHOLDER INFORMATION
ICON PRICING FUND SHARES
- --------------------------------------------------------------------------------
The price of Fund shares (excluding sales charges), called "net asset
value," is based on the value of the Fund's portfolio securities. While
the assets of each Class are invested in a single portfolio of
securities, the net asset value of each Class will differ because the
Classes have different ongoing distribution fees.
The net asset value per share of the Fund is determined once daily at
4:00 p.m. Eastern time on each day that the New York Stock Exchange is
open (or, on days when the New York Stock Exchange closes prior to 4:00
p.m., at such earlier time). Shares will not be priced on days that the
New York Stock Exchange is closed.
The value of the Fund's portfolio securities is based on the securities'
market price when available. When a market price is not readily
available, including circumstances under which the Investment Manager
determines that a security's market price is not accurate, a portfolio
security is valued at its fair value, as determined under procedures
established by the Fund's Board of Trustees. In these cases, the Fund's
net asset value will reflect certain portfolio securities' fair value
rather than their market price. In addition, if the Fund holds
securities primarily listed on foreign exchanges, the value of the
Fund's portfolio securities may change on days when you will not be able
to purchase or sell your shares.
An exception to the Fund's general policy of using market prices
concerns its short-term debt portfolio securities. Debt securities with
remaining maturities of sixty days or less at the time of purchase are
valued at amortized cost. However, if the cost does not reflect the
securities' market value, these securities will be valued at their fair
value.
ICON HOW TO BUY SHARES
- --------------------------------------------------------------------------------
You may open a new account to buy Fund shares or buy additional Fund
shares for an existing account by contacting your Morgan Stanley Dean
Witter Financial Advisor or other authorized financial
representative. Your Financial Advisor will assist you, step-by-step,
with the procedures to invest in the Fund. You may also purchase
shares directly by calling the Fund's transfer agent and requesting
an application.
Because every investor has different immediate financial needs and
long-term investment goals, the Fund offers investors four Classes of
shares: Classes A, B, C and D. Class D shares are only offered to a
limited group of investors. Each Class of shares offers a distinct
structure of sales charges, distribution and service fees, and other
features that are designed to address a variety of needs. Your
Financial Advisor or other authorized financial representative can
help you decide which Class may be most appropriate for you. When
purchasing Fund shares, you must specify which Class of shares you
wish to purchase.
7
<PAGE>
When you buy Fund shares, the shares are purchased at the next share
price calculated (less any applicable front-end sales charge for
Class A shares) after we receive your investment order in proper
form. We reserve the right to reject any order for the purchase of
(SIDEBAR) Fund Shares.
EASYINVEST-SM-
A PURCHASE PLAN THAT ALLOWS YOU TO TRANSFER MONEY AUTOMATICALLY FROM YOUR
CHECKING OR SAVINGS ACCOUNT OR FROM A MONEY MARKET FUND ON A SEMI-MONTHLY,
MONTHLY OR QUARTERLY BASIS. CONTACT YOUR MORGAN STANLEY DEAN WITTER FINANCIAL
ADVISOR FOR FURTHER INFORMATION ABOUT THIS SERVICE.
(END SIDEBAR)
<TABLE>
<CAPTION>
MINIMUM INVESTMENT AMOUNTS
- ------------------------------------------------------------------------------------------------
MINIMUM INVESTMENT
----------------------
INVESTMENT OPTIONS INITIAL ADDITIONAL
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- ------------------------------------------------------------------------------------------------
Regular accounts $ 1,000* $100
- ------------------------------------------------------------------------------------------------
Individual Retirement Accounts: Regular IRAs $ 1,000 $100
Education IRAs $ 500 $100
- ------------------------------------------------------------------------------------------------
EASYINVEST-SM- (Automatically from your checking
or savings account or Money Market
Fund) $ 100** $100**
- ------------------------------------------------------------------------------------------------
</TABLE>
* The Fund will waive the minimum purchase requirement for investments in
Class B shares in connection with certain unit investment trusts.
** Provided your schedule of investments totals $1,000 in twelve months.
There is no minimum investment amount if you purchase Fund shares
through: (1) the Investment Manager's mutual fund asset allocation plan,
(2) a program, approved by the Fund's distributor, in which you pay an
asset-based fee for advisory, administrative and/or brokerage services,
or (3) employer-sponsored employee benefit plan accounts.
INVESTMENT OPTIONS FOR CERTAIN INSTITUTIONAL AND OTHER INVESTORS/CLASS D
SHARES. To be eligible to purchase Class D shares, you must qualify
under one of the investor categories specified in the "Share Class
Arrangements" section of this PROSPECTUS.
THREE DAY SETTLEMENT. Fund shares are sold through the Fund's
distributor, Morgan Stanley Dean Witter Distributors Inc., on a normal
three business day basis; that is, your payment for Fund shares is due
on the third business day (settlement day) after you place a purchase
order.
SUBSEQUENT INVESTMENTS SENT DIRECTLY TO THE FUND. In addition to buying
additional Fund shares for an existing account by contacting your Morgan
Stanley Dean Witter Financial Advisor, you may send a check directly to
the Fund. To buy additional shares in this manner:
- Write a "letter of instruction" to the Fund specifying the name(s) on
the account, the account number, the social security or tax
identification number, the Class of shares you wish to purchase and
the investment amount (which would include any applicable front-end
sales charge). The letter must be signed by the account owner(s).
- Make out a check for the total amount payable to: Morgan Stanley Dean
Witter Capital Growth Securities.
- Mail the letter and check to Morgan Stanley Dean Witter Trust FSB at
P.O. Box 1040, Jersey City, NJ 07303.
8
<PAGE>
ICON HOW TO EXCHANGE SHARES
- --------------------------------------------------------------------------------
PERMISSIBLE FUND EXCHANGES. You may exchange shares of any Class of the
Fund for the same Class of any other continuously offered Multi-Class
Fund, or for shares of a No-Load Fund, Money Market Fund or Short-Term
U.S. Treasury Trust, without the imposition of an exchange fee. See the
inside back cover of this PROSPECTUS for each Morgan Stanley Dean Witter
Fund's designation as a Multi-Class Fund, No-Load Fund or Money Market
Fund. If a Morgan Stanley Dean Witter Fund is not listed, consult the
inside back cover of that fund's PROSPECTUS for its designation. For
purposes of exchanges, shares of FSC Funds (subject to a front-end sales
charge) are treated as Class A shares of a Multi-Class Fund.
Exchanges may be made after shares of the Fund acquired by purchase have
been held for thirty days. There is no waiting period for exchanges of
shares acquired by exchange or dividend reinvestment. The current
PROSPECTUS for each Fund describes its investment objective(s), policies
and investment minimums, and should be read before investment.
EXCHANGE PROCEDURES. You can process an exchange by contacting your
Morgan Stanley Dean Witter Financial Advisor or other authorized
financial representative. Otherwise, you must forward an exchange
privilege authorization form to the Fund's transfer agent -- Morgan
Stanley Dean Witter Trust FSB -- and then write the transfer agent or
call (800) 869-NEWS to place an exchange order. You can obtain an
exchange privilege authorization form by contacting your Financial
Advisor or other authorized financial representative or by calling (800)
869-NEWS. If you hold share certificates, no exchanges may be processed
until we have received all applicable share certificates.
An exchange to any Morgan Stanley Dean Witter Fund (except a Money
Market Fund) is made on the basis of the next calculated net asset
values of the Funds involved after the exchange instructions are
accepted. When exchanging into a Money Market Fund, the Fund's shares
are sold at their next calculated net asset value and the Money Market
Fund's shares are purchased at their net asset value on the following
business day.
The Fund may terminate or revise the exchange privilege upon required
notice. Certain services normally available to shareholders of Money
Market Funds, including the check writing privilege, are not available
for Money Market Fund shares you acquire in an exchange.
TELEPHONE EXCHANGES. For your protection when calling Morgan Stanley
Dean Witter Trust FSB, we will employ reasonable procedures to confirm
that exchange instructions communicated over the telephone are genuine.
These procedures may include requiring various forms of personal
identification such as name, mailing address, social security or other
tax identification number. Telephone instructions also may be recorded.
Telephone instructions will be accepted if received by the Fund's
transfer agent between 9:00 a.m. and 4:00 p.m. Eastern time, on any day
the New York Stock Exchange is open for business. During periods of
drastic economic or market changes, it is possible that the telephone
exchange procedures may be difficult to implement, although this has not
been the case with the Fund in the past.
9
<PAGE>
MARGIN ACCOUNTS. If you have pledged your Fund shares in a margin
account, contact your Morgan Stanley Dean Witter Financial Advisor or
other authorized financial representative regarding restrictions on the
exchange of such shares.
TAX CONSIDERATIONS OF EXCHANGES. If you exchange shares of the Fund for
shares of another Morgan Stanley Dean Witter Fund there are important
tax considerations. For tax purposes, the exchange out of the Fund is
considered a sale of Fund shares -- and the exchange into the other Fund
is considered a purchase. As a result, you may realize a capital gain or
loss.
You should review the "Tax Consequences" section and consult your own
tax professional about the tax consequences of an exchange.
FREQUENT EXCHANGES. A pattern of frequent exchanges may result in the
Fund limiting or prohibiting, at its discretion, additional purchases
and/or exchanges. The Fund will notify you in advance of limiting your
exchange privileges.
CDSC CALCULATIONS ON EXCHANGES. See the "Share Class Arrangements"
section of this PROSPECTUS for a further discussion of how applicable
contingent deferred sales charges (CDSCs) are calculated for shares of
one Morgan Stanley Dean Witter Fund that are exchanged for shares of
another.
FOR FURTHER INFORMATION REGARDING EXCHANGE PRIVILEGES, YOU SHOULD
CONTACT YOUR MORGAN STANLEY DEAN WITTER FINANCIAL ADVISOR OR CALL (800)
869-NEWS.
ICON HOW TO SELL SHARES
- --------------------------------------------------------------------------------
You can sell some or all of your Fund shares at any time. If you sell
Class A, Class B or Class C shares, your net sale proceeds are reduced
by the amount of any applicable CDSC. Your shares will be sold at the
next price calculated after we receive your order to sell as described
below.
<TABLE>
<CAPTION>
OPTIONS PROCEDURES
<S> <C>
- --------------------------------------------------------------------------------
Contact your To sell your shares, simply call your Morgan Stanley Dean
Financial Advisor Witter Financial Advisor or other authorized financial
representative.
------------------------------------------------------------
ICON
Payment will be sent to the address to which the account is
registered or deposited in your brokerage account.
- --------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
(SIDEBAR)
SYSTEMATIC
WITHDRAWAL PLAN
THIS PLAN ALLOWS YOU TO WITHDRAW MONEY AUTOMATICALLY FROM YOUR FUND ACCOUNT AT
REGULAR INTERVALS. CONTACT YOUR MORGAN STANLEY DEAN WITTER FINANCIAL ADVISOR FOR
MORE DETAILS.
(END SIDEBAR)
<TABLE>
<CAPTION>
OPTIONS PROCEDURES
<S> <C>
- --------------------------------------------------------------------------------
By Letter You can also sell your shares by writing a "letter of
instruction" that includes:
ICON
- your account number;
- the dollar amount or the number of shares you wish to
sell;
- the Class of shares you wish to sell; and
- the signature of each owner as it appears on the account.
If you are requesting payment to anyone other than the
registered owner(s) or that payment be sent to any address
other than the address of the registered owner(s) or
pre-designated bank account, you will need a signature
guarantee. You can obtain a signature guarantee from an
eligible guarantor acceptable to Morgan Stanley Dean Witter
Trust FSB. (You should contact Morgan Stanley Dean Witter
Trust FSB at (800) 869-NEWS for a determination as to
whether a particular institution is an eligible guarantor.)
A notary public CANNOT provide a signature guarantee.
Additional documentation may be required for shares held by
a corporation, partnership, trustee or executor.
------------------------------------------------------------
Mail the letter to Morgan Stanley Dean Witter Trust FSB at
P.O. Box 983, Jersey City, New Jersey 07303. If you hold
share certificates, you must return the certificates, along
with the letter and any required additional documentation.
------------------------------------------------------------
A check will be mailed to the name(s) and address in which
the account is registered, or otherwise according to your
instructions.
- --------------------------------------------------------------------------------
Systematic If your investment in all of the Morgan Stanley Dean Witter
Withdrawal Plan Family of Funds has a total market value of at least
ICON $10,000, you may elect to withdraw amounts of $25 or more,
or in any whole percentage of a Fund's balance (provided the
amount is at least $25), on a monthly, quarterly,
semi-annual or annual basis, from any Fund with a balance of
at least $1,000. Each time you add a Fund to the plan, you
must meet the plan requirements.
------------------------------------------------------------
Amounts withdrawn are subject to any applicable CDSC. A CDSC
may be waived under certain circumstances. See the Class B
waiver categories listed in the "Share Class Arrangements"
section of this Prospectus.
------------------------------------------------------------
To sign up for the Systematic Withdrawal Plan, contact your
Morgan Stanley Dean Witter Financial Advisor or call (800)
869-NEWS. You may terminate or suspend your plan at any
time. Please remember that withdrawals from the plan are
sales of shares, not Fund "distributions," and ultimately
may exhaust your account balance. The Fund may terminate or
revise the plan at any time.
------------------------------------------------------------
</TABLE>
PAYMENT FOR SOLD SHARES. After we receive your complete instructions to
sell as described above, a check will be mailed to you within seven
days, although we will attempt to make payment within one business day.
Payment may also be sent to your brokerage account.
Payment may be postponed or the right to sell your shares suspended
under unusual circumstances. If you request to sell shares that were
recently purchased by check, payment of the sale proceeds may be delayed
for the minimum time needed to verify that the check has been honored
(not more than fifteen days from the time we receive the check).
TAX CONSIDERATIONS. Normally, your sale of Fund shares is subject to
federal and state income tax. You should review the "Tax Consequences"
section of this PROSPECTUS and consult your own tax professional about
the tax consequences of a sale.
11
<PAGE>
REINSTATEMENT PRIVILEGE. If you sell Fund shares and have not previously
exercised the reinstatement privilege, you may, within 35 days after the
date of sale, invest any portion of the proceeds in the same Class of
Fund shares at their net asset value and receive a pro rata credit for
any CDSC paid in connection with the sale.
INVOLUNTARY SALES. The Fund reserves the right, on sixty days' notice,
to sell the shares of any shareholder (other than shares held in an IRA
or 403(b) Custodial Account) whose shares, due to sales by the
shareholder, have a value below $100, or in the case of an account
opened through EASYINVEST-SM-, if after 12 months the shareholder has
invested less than $1,000 in the account.
However, before the Fund sells your shares in this manner, we will
notify you and allow you sixty days to make an additional investment in
an amount that will increase the value of your account to at least the
required amount before the sale is processed. No CDSC will be imposed on
any involuntary sale.
MARGIN ACCOUNTS. Certain restrictions may apply to Fund shares pledged
in margin accounts with Dean Witter Reynolds or another authorized
broker-dealer of Fund shares. If you hold Fund shares in this manner,
please contact your Morgan Stanley Dean Witter Financial Advisor or
other authorized financial representative for more details.
ICON DISTRIBUTIONS
- --------------------------------------------------------------------------------
The Fund passes substantially all of its earnings from income and
capital gains along to its investors as "distributions." The Fund earns
income from stocks and interest from fixed-income investments. These
amounts are passed along to Fund shareholders as "income dividend
distributions." The Fund realizes capital gains whenever it sells
securities for a higher price than it paid for them. These amounts may
be passed along as "capital gain distributions."
The Fund declares income dividends separately for each Class.
Distributions paid on Class A and Class D shares usually will be
higher than for Class B and Class C because distribution fees that
Class B and Class C pay are higher. Normally, income dividends and
capital gains are distributed annually in December. The Fund,
however, may retain and reinvest any long-term capital gains. The
Fund may at times make payments from sources other than income or
capital gains that represent a return of a portion of your
investment.
Distributions are reinvested automatically in additional shares of
the same Class and automatically credited to your account, unless
you request in writing that all distributions be paid in cash. If
you elect the cash option, the Fund will mail a check to you no
later than seven
business days after the distribution is declared. No interest will
accrue on uncashed checks. If you wish to change how your
distributions are paid, your request should be received by the
Fund's transfer agent, Morgan Stanley Dean Witter Trust FSB, at
least five business days prior to the record date of the
(SIDEBAR) distributions.
TARGETED DIVIDENDS-SM-
YOU MAY SELECT TO HAVE YOUR FUND DISTRIBUTIONS AUTOMATICALLY INVESTED IN OTHER
CLASSES OF FUND SHARES OR CLASSES OF ANOTHER MORGAN STANLEY DEAN WITTER FUND
THAT YOU OWN. CONTACT YOUR MORGAN STANLEY DEAN WITTER FINANCIAL ADVISOR FOR
FURTHER INFORMATION ABOUT THIS SERVICE.
(END SIDEBAR)
12
<PAGE>
ICON TAX CONSEQUENCES
- --------------------------------------------------------------------------------
As with any investment, you should consider how your Fund investment
will be taxed. The tax information in this PROSPECTUS is provided as
general information. You should consult your own tax professional about
the tax consequences of an investment in the Fund.
Unless your investment in the Fund is through a tax-deferred retirement
account, such as a 401(k) plan or IRA, you need to be aware of the
possible tax consequences when:
- The Fund makes distributions; and
- You sell Fund shares, including an exchange to another Morgan Stanley
Dean Witter Fund.
TAXES ON DISTRIBUTIONS. Your distributions are normally subject to
federal and state income tax when they are paid, whether you take them
in cash or reinvest them in Fund shares. A distribution also may be
subject to local income tax. Any income dividend distributions and any
short-term capital gain distributions are taxable to you as ordinary
income. Any long-term capital gain distributions are taxable as
long-term capital gains, no matter how long you have owned shares in the
Fund.
Every January, you will be sent a statement (IRS Form 1099-DIV) showing
the taxable distributions paid to you in the previous year. The
statement provides full information on your dividends and capital gains
for tax purposes.
TAXES ON SALES. Your sale of Fund shares normally is subject to federal
and state income tax and may result in a taxable gain or loss to you. A
sale also may be subject to local income tax. Your exchange of Fund
shares for shares of another Morgan Stanley Dean Witter Fund is treated
for tax purposes like a sale of your original shares and a purchase of
your new shares. Thus, the exchange may, like a sale, result in a
taxable gain or loss to you and will give you a new tax basis for your
new shares.
When you open your Fund account, you should provide your social security
or tax identification number on your investment application. By
providing this information, you will avoid being subject to a federal
backup withholding tax of 31% on taxable distributions and redemption
proceeds. Any withheld amount would be sent to the IRS as an advance tax
payment.
ICON SHARE CLASS ARRANGEMENTS
- --------------------------------------------------------------------------------
The Fund offers several Classes of shares having different distribution
arrangements designed to provide you with different purchase options
according to your investment needs. Your Morgan Stanley Dean Witter
Financial Advisor or other authorized financial representative can help
you decide which Class may be appropriate for you.
The general public is offered three Classes: Class A shares, Class B
shares and Class C shares, which differ principally in terms of sales
charges and ongoing expenses. A fourth Class, Class D shares, is offered
only to a limited category of investors. Shares that you acquire through
reinvested distributions will not be subject to any front-end
13
<PAGE>
(SIDEBAR)
FRONT-END SALES
CHARGE OR FSC
AN INITIAL SALES CHARGE YOU PAY WHEN PURCHASING CLASS A SHARES THAT IS BASED ON
A PERCENTAGE OF THE OFFERING PRICE. THE PERCENTAGE DECLINES BASED UPON THE
DOLLAR VALUE OF CLASS A SHARES YOU PURCHASE. WE OFFER THREE WAYS TO REDUCE YOUR
CLASS A SALES CHARGES - THE COMBINED PURCHASE PRIVILEGE, RIGHT OF ACCUMULATION
AND LETTER OF INTENT.
(END SIDEBAR)
sales charge or CDSC - contingent deferred sales charge. Sales personnel
may receive different compensation for selling each Class of shares. The
sales charges applicable to each Class provide for the distribution
financing of shares of that Class.
The chart below compares the sales charge and annual 12b-1 fee
applicable to each Class:
<TABLE>
<CAPTION>
CLASS SALES CHARGE ANNUAL 12b-1 FEE
<S> <C> <C>
- ------------------------------------------------------------------
A Maximum 5.25% initial sales charge
reduced for purchase of $25,000 or more;
shares sold without an initial sales
charge are generally subject to a 1.0%
CDSC during the first year 0.25%
- ------------------------------------------------------------------
B Maximum 5.0% CDSC during the first year
decreasing to 0% after six years 1.0%
- ------------------------------------------------------------------
C 1.0% CDSC during the first year 1.0%
- ------------------------------------------------------------------
D None None
- ------------------------------------------------------------------
</TABLE>
CLASS A SHARES Class A shares are sold at net asset value plus an
initial sales charge of up to 5.25%. The initial sales charge is reduced
for purchases of $25,000 or more according to the schedule below.
Investments of $1 million or more are not subject to an initial sales
charge, but are generally subject to a contingent deferred sales charge,
or CDSC, of 1.0% on sales made within one year after the last day of the
month of purchase. The CDSC will be assessed in the same manner and with
the same CDSC waivers as with Class B shares. Class A shares are also
subject to a distribution (12b-1) fee of up to 0.25% of the average
daily net assets of the Class.
The offering price of Class A shares includes a sales charge (expressed
as a percentage of the offering price) on a single transaction as shown
in the following table:
<TABLE>
<CAPTION>
FRONT-END SALES CHARGE
----------------------------------------------
PERCENTAGE OF APPROXIMATE PERCENTAGE
AMOUNT OF SINGLE TRANSACTION PUBLIC OFFERING PRICE OF AMOUNT INVESTED
<S> <C> <C>
- ----------------------------------------------------------------------------------------
Less than $25,000 5.25% 5.54%
- ----------------------------------------------------------------------------------------
$25,000 but less than $50,000 4.75% 4.99%
- ----------------------------------------------------------------------------------------
$50,000 but less than $100,000 4.00% 4.17%
- ----------------------------------------------------------------------------------------
$100,000 but less than $250,000 3.00% 3.09%
- ----------------------------------------------------------------------------------------
$250,000 but less than $1 million 2.00% 2.04%
- ----------------------------------------------------------------------------------------
$1 million and over 0 0
- ----------------------------------------------------------------------------------------
</TABLE>
The reduced sales charge schedule is applicable to purchases of Class A
shares in a single transaction by:
- A single account (including an individual, trust or fiduciary
account).
- Family member accounts (limited to husband, wife and children under
the age of 21).
- Pension, profit sharing or other employee benefit plans of companies
and their affiliates.
14
<PAGE>
- Tax-exempt organizations.
- Groups organized for a purpose other than to buy mutual fund shares.
COMBINED PURCHASE PRIVILEGE. You also will have the benefit of reduced
sales charges by combining purchases of Class A shares of the Fund in a
single transaction with purchases of Class A shares of other Multi-Class
Funds and shares of FSC Funds.
RIGHT OF ACCUMULATION. You also may benefit from a reduction of sales
charges if the cumulative net asset value of Class A shares of the Fund
purchased in a single transaction, together with shares of other Funds
you currently own which were previously purchased at a price including a
front-end sales charge (including shares acquired through reinvestment
of distributions), amounts to $25,000 or more. Also, if you have a
cumulative net asset value of all your Class A and Class D shares equal
to at least $5 million (or $25 million for certain employee benefit
plans), you are eligible to purchase Class D shares of any Fund subject
to the Fund's minimum initial investment requirement.
You must notify your Morgan Stanley Dean Witter Financial Advisor or
other authorized financial representative (or Morgan Stanley Dean Witter
Trust FSB if you purchase directly through the Fund), at the time a
purchase order is placed, that the purchase qualifies for the reduced
charge under the Right of Accumulation. Similar notification must be
made in writing when an order is placed by mail. The reduced sales
charge will not be granted if: (i) notification is not furnished at the
time of the order; or (ii) a review of the records of Dean Witter
Reynolds or other authorized dealer of Fund shares or the Fund's
transfer agent does not confirm your represented holdings.
LETTER OF INTENT. The schedule of reduced sales charges for larger
purchases also will be available to you if you enter into a written
"letter of intent." A letter of intent provides for the purchase of
Class A shares of the Fund or other Multi-Class Funds and/or shares of
FSC Funds. The initial purchase under a letter of intent must be at
least 5% of the stated investment goal. To determine the applicable
sales charge reduction, you may also include: (1) the cost of shares of
other Morgan Stanley Dean Witter Funds which were previously purchased
at a price including a front-end sales charge during the 90-day period
prior to the distributor receiving the letter of intent, and (2) the
cost of shares of other Funds you currently own acquired in exchange for
shares of Funds purchased during that period at a price including a
front-end sales charge. You can obtain a letter of intent by contacting
your Morgan Stanley Dean Witter Financial Advisor or other authorized
financial representative, or by calling (800) 869-NEWS. If you do not
achieve the stated investment goal within the thirteen-month period, you
are required to pay the difference between the sales charges otherwise
applicable and sales charges actually paid.
OTHER FRONT-END SALES CHARGE WAIVERS. In addition to investments of $1
million or more, your purchase of Class A shares is not subject to a
front-end sales charge (or a CDSC upon sale) if your account qualifies
under one of the following categories:
- A trust for which Morgan Stanley Dean Witter Trust FSB provides
discretionary trustee services.
15
<PAGE>
(SIDEBAR)
CONTINGENT DEFERRED SALES
CHARGE OR CDSC
A FEE YOU PAY WHEN YOU SELL SHARES OF CERTAIN MORGAN STANLEY DEAN WITTER FUNDS
PURCHASED WITHOUT AN INITIAL SALES CHARGE. THIS FEE DECLINES THE LONGER YOU HOLD
YOUR SHARES AS SET FORTH IN THE TABLE.
(END SIDEBAR)
- Persons participating in a fee-based investment program (subject to
all of its terms and conditions, including mandatory sale or transfer
restrictions on termination) approved by the Fund's distributor
pursuant to which they pay an asset-based fee for investment advisory,
administrative and/or brokerage services.
- Employer-sponsored employee benefit plans, whether or not qualified
under the Internal Revenue Code, for which Morgan Stanley Dean Witter
Trust FSB serves as trustee or Dean Witter Reynolds' Retirement Plan
Services serves as recordkeeper under a written Recordkeeping Services
Agreement ("MSDW Eligible Plans") which have at least 200 eligible
employees.
- An MSDW Eligible Plan whose Class B shares have converted to Class A
shares, regardless of the plan's asset size or number of eligible
employees.
- A client of a Morgan Stanley Dean Witter Financial Advisor who joined
us from another investment firm within six months prior to the date of
purchase of Fund shares, and you used the proceeds from the sale of
shares of a proprietary mutual fund of that Financial Advisor's
previous firm that imposed either a front-end or deferred sales charge
to purchase Class A shares, provided that: (1) you sold the shares not
more than 60 days prior to the purchase of Fund shares, and (2) the
sale proceeds were maintained in the interim in cash or a money market
fund.
CLASS B SHARES Class B shares are offered at net asset value with no
initial sales charge but are subject to a contingent deferred sales
charge, or CDSC, as set forth in the table below. For the purpose of
calculating the CDSC, shares are deemed to have been purchased on the
last day of the month during which they were purchased.
<TABLE>
<CAPTION>
CDSC AS A PERCENTAGE
YEAR SINCE PURCHASE PAYMENT MADE OF AMOUNT REDEEMED
<S> <C>
- --------------------------------------------------------------
First 5.0%
- --------------------------------------------------------------
Second 4.0%
- --------------------------------------------------------------
Third 3.0%
- --------------------------------------------------------------
Fourth 2.0%
- --------------------------------------------------------------
Fifth 2.0%
- --------------------------------------------------------------
Sixth 1.0%
- --------------------------------------------------------------
Seventh and thereafter None
- --------------------------------------------------------------
</TABLE>
Each time you place an order to sell or exchange shares, shares with no
CDSC will be sold or exchanged first, then shares with the lowest CDSC
will be sold or exchanged next. For any shares subject to a CDSC, the
CDSC will be assessed on an amount equal to the lesser of the current
market value or the cost of the shares being sold.
CDSC WAIVERS. A CDSC, if otherwise applicable, will be waived in the
case of:
- Sales of shares held at the time you die or become disabled (within
the definition in Section 72(m)(7) of the Internal Revenue Code which
relates to the ability to engage in gainful employment), if the shares
are: (i) registered either in your name (not a trust) or in the names
of you and your spouse as joint tenants with right of survivorship; or
16
<PAGE>
(ii) held in a qualified corporate or self-employed retirement plan,
IRA or 403(b) Custodial Account, provided in either case that the sale
is requested within one year of your death or initial determination of
disability.
- Sales in connection with the following retirement plan
"distributions": (i) lump-sum or other distributions from a qualified
corporate or self-employed retirement plan following retirement (or,
in the case of a "key employee" of a "top heavy" plan, following
attainment of age 59 1/2); (ii) distributions from an IRA or 403(b)
Custodial Account following attainment of age 59 1/2; or (iii) a
tax-free return of an excess IRA contribution (a "distribution" does
not include a direct transfer of IRA, 403(b) Custodial Account or
retirement plan assets to a successor custodian or trustee).
- Sales of shares held for you as a participant in an MSDW Eligible
Plan.
- Sales of shares in connection with the Systematic Withdrawal Plan of
up to 12% annually of the value of each Fund from which plan sales are
made. The percentage is determined on the date you establish the
Systematic Withdrawal Plan and based on the next calculated share
price. You may have this CDSC waiver applied in amounts up to 1% per
month, 3% per quarter, 6% semi-annually or 12% annually. Shares with
no CDSC will be sold first, followed by those with the lowest CDSC. As
such, the waiver benefit will be reduced by the amount of your shares
that are not subject to a CDSC. If you suspend your participation in
the plan, you may later resume plan payments without requiring a new
determination of the account value for the 12% CDSC waiver.
- Sales of shares that (i) certain unit investment trusts purchased (on
which a sales charge has been paid) or (ii) are attributable to
reinvested distributions from, or the proceeds of, certain unit
investment trusts.
All waivers will be granted only following the Distributor receiving
confirmation of your entitlement. If you believe you are eligible for a
CDSC waiver, please contact your Financial Advisor or call (800)
869-NEWS.
DISTRIBUTION FEE. Class B shares are subject to an annual 12b-1 fee of
1.0% of the lesser of: (a) the average daily aggregate gross purchases
by all shareholders of the Fund's Class B shares since the inception of
the Fund (not including reinvestments of dividends or capital gains
distributions), less the average daily aggregate net asset value of the
Fund's Class B shares sold by all shareholders since the Fund's
inception upon which a CDSC has been imposed or waived, or (b) the
average daily net assets of Class B.
CONVERSION FEATURE. After ten (10) years, Class B shares will convert
automatically to Class A shares of the Fund with no initial sales
charge. The ten year period runs from the last day of the month in which
the shares were purchased, or in the case of Class B shares acquired
through an exchange, from the last day of the month in which the
original Class B shares were purchased; the shares will convert to Class
A shares based on their relative net asset values in the month following
the ten year period. At the same time, an equal proportion of Class B
shares acquired through automatically reinvested distributions will
convert to Class A shares on the same basis. (Class B shares held before
May 1, 1997, however, will convert to Class A shares in May 2007.)
17
<PAGE>
In the case of Class B shares held in an MSDW Eligible Plan, the plan is
treated as a single investor and all Class B shares will convert to
Class A shares on the conversion date of the Class B shares of a Morgan
Stanley Dean Witter Fund purchased by that plan.
Currently, the Class B share conversion is not a taxable event; the
conversion feature may be cancelled if it is deemed a taxable event in
the future by the Internal Revenue Service.
If you exchange your Class B shares for shares of a Money Market Fund,
No-Load Fund or Short-Term U.S. Treasury Trust, the holding period for
conversion is frozen as of the last day of the month of the exchange and
resumes on the last day of the month you exchange back into Class B
shares.
EXCHANGING SHARES SUBJECT TO A CDSC. There are special considerations
when you exchange Fund shares that are subject to a CDSC. When
determining the length of time you held the shares and the corresponding
CDSC rate, any period (starting at the end of the month) during which
you held shares of a fund that does NOT charge a CDSC WILL NOT BE
COUNTED. Thus, in effect the "holding period" for purposes of
calculating the CDSC is frozen upon exchanging into a fund that does not
charge a CDSC.
For example, if you held Class B shares of the Fund in a regular account
for one year, exchanged to Class B of another Morgan Stanley Dean Witter
Multi-Class Fund for another year, then sold your shares, a CDSC rate of
4% would be imposed on the shares based on a two year holding period --
one year for each Fund. However, if you had exchanged the shares of the
Fund for a Money Market Fund (which does not charge a CDSC) instead of
the Multi-Class Fund, then sold your shares, a CDSC rate of 5% would be
imposed on the shares based on a one year holding period. The one year
in the Money Market Fund would not be counted. Nevertheless, if shares
subject to a CDSC are exchanged for a Fund that does not charge a CDSC,
you will receive a credit when you sell the shares equal to the
distribution (12b-1) fees, if any, you paid on those shares while in
that Fund up to the amount of any applicable CDSC.
In addition, shares that are exchanged into or from a Morgan Stanley
Dean Witter Fund subject to a higher CDSC rate will be subject to the
higher rate, even if the shares are re-exchanged into a Fund with a
lower CDSC rate.
CLASS C SHARES Class C shares are sold at net asset value with no
initial sales charge but are subject to a CDSC of 1.0% on sales made
within one year after the last day of the month of purchase. The CDSC
will be assessed in the same manner and with the same CDSC waivers as
with Class B shares.
DISTRIBUTION FEE. Class C shares are subject to an annual distribution
(12b-1) fee of up to 1.0% of the average daily net assets of that Class.
The Class C shares' distribution fee may cause that Class to have higher
expenses and pay lower dividends than Class A or Class D shares. Unlike
Class B shares, Class C shares have no conversion feature and,
accordingly, an investor that purchases Class C shares may be subject to
distribution (12b-1) fees applicable to Class C shares for an indefinite
period.
18
<PAGE>
CLASS D SHARES Class D shares are offered without any sales charge on
purchases or sales and without any distribution (12b-1) fee. Class D
shares are offered only to investors meeting an initial investment
minimum of $5 million ($25 million for MSDW Eligible Plans) and the
following investor categories:
- Investors participating in the Investment Manager's mutual fund asset
allocation program (subject to all of its terms and conditions,
including mandatory sale or transfer restrictions on termination)
pursuant to which they pay an asset-based fee.
- Persons participating in a fee-based investment program (subject to
all of its terms and conditions, including mandatory sale or transfer
restrictions on termination) approved by the Fund's distributor
pursuant to which they pay an asset-based fee for investment advisory,
administrative and/or brokerage services.
- Employee benefit plans maintained by Morgan Stanley Dean Witter & Co.
or any of its subsidiaries for the benefit of certain employees of
Morgan Stanley Dean Witter & Co. and its subsidiaries.
- Certain unit investment trusts sponsored by Dean Witter Reynolds.
- Certain other open-end investment companies whose shares are
distributed by the Fund's distributor.
- Investors who were shareholders of the Dean Witter Retirement Series
on September 11, 1998 for additional purchases for their former Dean
Witter Retirement Series accounts.
MEETING CLASS D ELIGIBILITY MINIMUMS. To meet the $5 million ($25
million for MSDW Eligible Plans) initial investment to qualify to
purchase Class D shares you may combine: (1) purchases in a single
transaction of Class D shares of the Fund and other Morgan Stanley Dean
Witter Multi-Class Funds and/or (2) previous purchases of Class A and
Class D shares of Multi-Class Funds and shares of FSC Funds you
currently own, along with shares of Morgan Stanley Dean Witter Funds you
currently own that you acquired in exchange for those shares.
NO SALES CHARGES FOR REINVESTED CASH DISTRIBUTIONS If you receive a
cash payment representing an income dividend or capital gain and you
reinvest that amount in the applicable Class of shares by returning the
check within 30 days of the payment date, the purchased shares would not
be subject to an initial sales charge or CDSC.
PLAN OF DISTRIBUTION (RULE 12B-1 FEES) The Fund has adopted a Plan of
Distribution in accordance with Rule 12b-1 under the Investment Company
Act of 1940 with respect to the distribution of Class A, Class B and
Class C shares. The Plan allows the Fund to pay distribution fees for
the sale and distribution of these shares. It also allows the Fund to
pay for services to shareholders of Class A, Class B and Class C shares.
Because these fees are paid out of the Fund's assets on an ongoing
basis, over time these fees will increase the cost of your investment in
these Classes and may cost you more than paying other types of sales
charges.
19
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
financial performance for the past 5 fiscal years of the Fund. Certain
information reflects financial results for a single Fund share throughout each
year. The total returns in the table represent the rate an investor would have
earned or lost on an investment in the Fund (assuming reinvestment of all
dividends and distributions).
This information has been audited by PricewaterhouseCoopers LLP, whose report,
along with the Fund's financial statements, is included in the annual report,
which is available upon request.
<TABLE>
<CAPTION>
CLASS B SHARES
- -------------------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED OCTOBER 31 1998++ 1997*++ 1996 1995 1994
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA:
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 18.71 $ 16.98 $ 14.40 $ 11.86 $ 13.35
- -------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment loss (0.23) (0.21) (0.11) (0.06) (0.07)
Net realized and unrealized gain (loss) (0.54) 4.68 2.69 2.60 --
--------- --------- --------- --------- ---------
Total income (loss) from investment operations (0.77) 4.47 2.58 2.54 (0.07)
- -------------------------------------------------------------------------------------------------------------------------
Less distributions from net realized gain (3.41) (2.74) -- -- (1.42)
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.53 $ 18.71 $ 16.98 $ 14.40 $ 11.86
- -------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN+ (3.56)% 31.21% 17.92% 21.42% (0.79)%
- -------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
- -------------------------------------------------------------------------------------------------------------------------
Expenses 1.84%(1) 1.84% 1.84% 1.89% 1.87%
- -------------------------------------------------------------------------------------------------------------------------
Net investment loss (1.44)%(1) (1.26)% (0.64)% (0.43)% (0.15)%
- -------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $ 441,787 $ 522,276 $ 506,571 $ 483,870 $ 456,977
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 230% 123% 72% 33% 13%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Prior to July 28, 1997, the Fund issued one class of shares. All shares of the
Fund held prior to that date, other than shares held by certain employee
benefit plans established by Dean Witter Reynolds Inc. and its affiliate, SPS
Transaction Services, Inc., have been designated as Class B shares. Shares
held by those employee benefit plans prior to July 28, 1997 have been
designated Class D 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.
20
<PAGE>
<TABLE>
<CAPTION>
CLASS A SHARES++
- ---------------------------------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE PERIOD JULY 28, 1997*
OCTOBER 31, 1998 THROUGH OCTOBER 31, 1997
<S> <C> <C>
- ---------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA:
- ---------------------------------------------------------------------------------------------
Net asset value, beginning of period $18.75 $18.10
- ---------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment loss (0.11) (0.04)
Net realized and unrealized gain
(loss) (0.55) 0.69
------ ------
Total income (loss) from investment
operations (0.66) 0.65
- ---------------------------------------------------------------------------------------------
Less distributions from net realized
gain (3.41) --
- ---------------------------------------------------------------------------------------------
Net asset value, end of period $14.68 $18.75
- ---------------------------------------------------------------------------------------------
TOTAL RETURN+ (2.84)% 3.59%(1)
- ---------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
- ---------------------------------------------------------------------------------------------
Expenses 1.09%(3) 1.12%(2)
- ---------------------------------------------------------------------------------------------
Net investment loss (0.69)%(3) (0.82)%(2)
- ---------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------
Net assets, end of period, in
thousands $3,403 $1,684
- ---------------------------------------------------------------------------------------------
Portfolio turnover rate 230% 123%
- ---------------------------------------------------------------------------------------------
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
CLASS C SHARES++
- ----------------------------------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE PERIOD JULY 28, 1997*
OCTOBER 31, 1998 THROUGH OCTOBER 31, 1997
<S> <C> <C>
- ----------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA:
- ----------------------------------------------------------------------------------------------
Net asset value, beginning of period $18.71 $18.10
- ----------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment loss (0.23) (0.07)
Net realized and unrealized gain
(loss) (0.54) 0.68
------ ------
Total income (loss) from investment
operations (0.77) 0.61
- ----------------------------------------------------------------------------------------------
Less distributions from net realized
gain (3.41) --
- ----------------------------------------------------------------------------------------------
Net asset value, end of period $14.53 $18.71
- ----------------------------------------------------------------------------------------------
TOTAL RETURN+ (3.56)% 3.37%(1)
- ----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
- ----------------------------------------------------------------------------------------------
Expenses 1.84%(3) 1.85%(2)
- ----------------------------------------------------------------------------------------------
Net investment loss (1.44)%(3) (1.54)%(2)
- ----------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $ 964 $ 389
- ----------------------------------------------------------------------------------------------
Portfolio turnover rate 230% 123%
- ----------------------------------------------------------------------------------------------
</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.
22
<PAGE>
<TABLE>
<CAPTION>
CLASS D SHARES++
- ----------------------------------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE PERIOD JULY 28, 1997*
OCTOBER 31, 1998 THROUGH OCTOBER 31, 1997
<S> <C> <C>
- ----------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA:
- ----------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 18.76 $ 18.10
- ----------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment loss (0.07) (0.02)
Net realized and unrealized gain
(loss) (0.55) 0.68
------- -------
Total income (loss) from investment
operations (0.62) 0.66
- ----------------------------------------------------------------------------------------------
Less distributions from net realized
gain (3.41) --
- ----------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.73 $ 18.76
- ----------------------------------------------------------------------------------------------
TOTAL RETURN+ (2.59)% 3.65%(1)
- ----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
- ----------------------------------------------------------------------------------------------
Expenses 0.84%(3) 0.82%(2)
- ----------------------------------------------------------------------------------------------
Net investment loss (0.44)%(3) (0.50)%(2)
- ----------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $38,840 $36,863
- ----------------------------------------------------------------------------------------------
Portfolio turnover rate 230% 123%
- ----------------------------------------------------------------------------------------------
</TABLE>
* The date shares were first issued. Shareholders who held shares of the Fund
prior to July 28, 1997 (the date the Fund converted to a multiple class share
structure) should refer to the Financial Highlights of Class B to obtain the
historical per share data and ratio information of their shares.
++ 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.
23
<PAGE>
NOTES
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24
<PAGE>
MORGAN STANLEY DEAN WITTER
FAMILY OF FUNDS
The Morgan Stanley Dean Witter Family of Funds offers
investors a wide range of investment choices. Come on
in and meet the family!
- --------------------------------------------------------------------------------
GROWTH FUNDS
- ---------------------------------
GROWTH FUNDS
Aggressive Equity Fund
American Value Fund
Capital Growth Securities
Developing Growth Securities
Equity Fund
Growth Fund
Market Leader Trust
Mid-Cap Growth Fund
Special Value Fund
Value Fund
THEME FUNDS
Financial Services Trust
Health Sciences Trust
Information Fund
Natural Resource Development Securities
Precious Metals and Minerals Trust
GLOBAL/INTERNATIONAL FUNDS
Competitive Edge Fund - "Best Ideas" Portfolio
European Growth Fund
Fund of Funds - International Portfolio
Global Dividend Growth Securities
International SmallCap Fund
Japan Fund
Pacific Growth Fund
- --------------------------------------------------------------------------------
GROWTH AND INCOME FUNDS
- ---------------------------------
Balanced Growth Fund
Balanced Income Fund
Convertible Securities Trust
Dividend Growth Securities
Fund of Funds - Domestic Portfolio
Income Builder Fund
Mid-Cap Dividend Growth Securities
S&P 500 Index Fund
S&P 500 Select Fund
Strategist Fund
Value-Added Market Series/Equity Portfolio
THEME FUNDS
Global Utilities Fund
Utilities Fund
- --------------------------------------------------------------------------------
INCOME FUNDS
- ---------------------------------
GOVERNMENT INCOME FUNDS
Federal Securities Trust
Short-Term U.S. Treasury Trust
U.S. Government Securities Trust
DIVERSIFIED INCOME FUNDS
Diversified Income Trust
CORPORATE INCOME FUNDS
High Yield Securities
Intermediate Income Securities
Short-Term Bond Fund (NL)
GLOBAL INCOME FUNDS
World Wide Income Trust
TAX-FREE INCOME FUNDS
California Tax-Free Income Fund
Hawaii Municipal Trust (FSC)
Limited Term Municipal Trust (NL)
Multi-State Municipal Series Trust (FSC)
New York Tax-Free Income Fund
Tax-Exempt Securities Trust
- --------------------------------------------------------------------------------
MONEY MARKET FUNDS
- ---------------------------------
TAXABLE MONEY MARKET FUNDS
Liquid Asset Fund (MM)
U.S. Government Money Market Trust (MM)
TAX-FREE MONEY MARKET FUNDS
California Tax-Free Daily Income Trust (MM)
N.Y. Municipal Money Market Trust (MM)
Tax-Free Daily Income Trust (MM)
There may be Funds created after this PROSPECTUS was published. Please consult
the inside front cover of a new Fund's prospectus for its designation, e.g.,
Multi-Class Fund or Money Market Fund.
Unless otherwise noted, each listed Morgan Stanley Dean Witter Fund, except for
Short-Term U.S. Treasury Trust, is a Multi-Class Fund. A Multi-Class Fund is a
mutual fund offering multiple Classes of shares. The other types of funds are:
NL - No-Load (Mutual) Fund; MM - Money Market Fund; FSC - A mutual fund sold
with a front-end sales charge and a distribution (12b-1) fee.
<PAGE>
PROSPECTUS - FEBRUARY 23, 1999
Additional information about the Fund's investments is available in the Fund's
ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS. In the Fund's ANNUAL REPORT, you
will find a discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal year. The
Fund's Statement of Additional Information also provides additional information
about the Fund. The Statement of Additional Information is incorporated herein
by reference (legally is part of this PROSPECTUS). For a free copy of any of
these documents, to request other information about the Fund, or to make
shareholder inquiries, please call:
(800) 869-NEWS
You also may obtain information about the Fund by calling your Morgan Stanley
Dean Witter Financial Advisor or by visiting our Internet site at:
WWW.DEANWITTER.COM/FUNDS
Information about the Fund (including the STATEMENT OF ADDITIONAL INFORMATION)
can be viewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, DC. Information about the Reference Room's
operations may be obtained by calling the SEC at (800) SEC-0330. Reports and
other information about the Fund are available on the SEC's Internet site
(www.sec.gov) and copies of this information may be obtained, upon payment of a
duplicating fee, by writing the Public Reference Section of the SEC, Washington,
DC 20549-6009.
Morgan Stanley Dean Witter
CAPITAL GROWTH SECURITIES
[BACK COVER PHOTO]
A MUTUAL FUND THAT SEEKS
LONG-TERM CAPITAL GROWTH
TICKER SYMBOLS:
CLASS A: CAPVAX CLASS C: CAPVCX
- -------------------- --------------------
CLASS B: CAPVBX CLASS D: CAPVDX
- -------------------- --------------------
(MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES;
INVESTMENT COMPANY ACT FILE NO. 811-5975)
