<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES TWO WORLD TRADE CENTER,
LETTER TO THE SHAREHOLDERS OCTOBER 31, 2000 NEW YORK, NEW YORK 10048
DEAR SHAREHOLDER:
During the fiscal year ended October 31, 2000, the U.S. equity markets
experienced extreme volatility, with technology and telecommunications stocks
leading the market both on the way up and on the decline. The U.S. Federal
Reserve Board continued instituting gradual rate hikes into the second quarter
of 2000, prompted by concerns over potentially higher inflation caused by an
overheating economy. Leadership of the market changed hands frequently in the
second and third quarters, with the end of October finding both the Dow and the
Nasdaq in negative territory. The volatility early in the year, caused largely
by speculation surrounding the Fed's inflationary-biased monetary policy, died
down as the summer went on and inflation fears faded, but continuing turmoil in
the market was spurred by negative earnings reports in all sectors.
PERFORMANCE AND PORTFOLIO STRATEGY
For the 12-month period ended October 31, 2000, Morgan Stanley Dean Witter
Capital Growth Securities' Class B shares produced a total return of 19.50
percent, outperforming the Standard & Poor's 500 Index (S&P 500), which returned
6.08 percent. For the same period, the Fund's Class A, C and D shares produced
total returns of 20.43 percent, 19.56 percent and 20.74 percent, respectively.
The performance of the Fund's four share classes varies because each has
different expenses. The total return figures given assume the reinvestment of
all distributions but do not reflect the deduction of any applicable sales
charges. The accompanying chart compares the Fund's performance to that of the
S&P 500 Index.
During the period, the Fund continued to invest in companies of all sizes and in
all the major sectors of the S&P 500. At the beginning of its fiscal year the
Fund was invested fairly aggressively, with significant exposure to the
technology sector in particular and growth stocks in general. However, as
technology stocks' valuations became extreme, the Fund moved to an approach more
balanced between growth and value stocks. This blend between the two investing
disciplines served the Fund well.
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
LETTER TO THE SHAREHOLDERS OCTOBER 31, 2000, CONTINUED
The Fund's managers redeployed assets from technology into financial services,
utilities and health care and increased the Fund's weighting in consumer
staples. At the end of October, financial services and other
interest-rate-sensitive stocks represented the largest component of the Fund's
portfolio, with a combined weighting of 31 percent. The Fund had approximately
20 percent of its assets invested in technology, more than 18 percent in health
care and 8 percent in consumer staples, with the balance invested primarily in
energy and capital goods. The Fund's ten largest holdings on October 31 were
Golden West Financial, American International Group, Everest Re Group, Oxford
Health Plans, HCA, Merck, American Home Products, Perkin Elmer, Tektronix and
Rational Software.
LOOKING AHEAD
We continue to maintain a favorable long-term outlook for the stock market.
Going forward, we do not anticipate a dramatic shift in the Fund's strategy. The
Fund will continue to monitor market conditions and look for attractive
investment opportunities as they become available.
We appreciate your ongoing support of Morgan Stanley Dean Witter Capital Growth
Securities 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
2
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
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 S&P 500(4)
<S> <C> <C>
October 1990 $10,000 $10,000
October 1991 $14,804 $13,346
October 1992 $15,406 $14,673
October 1993 $14,751 $16,860
October 1994 $14,635 $17,509
October 1995 $17,769 $22,129
October 1996 $20,953 $27,453
October 1997 $27,494 $36,252
October 1998 $26,515 $44,223
October 1999 $34,126 $55,572
October 2000 $40782(3) $58,953
</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 20.43%(1) 14.11%(2) 1 Year 19.50%(1) 14.97%(2)
Since Inception (7/28/97) 14.89%(1) 13.01%(2) 5 Years 18.08%(1) 17.87%(2)
10 Years 15.09%(1) 15.09%(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 19.56%(1) 18.65%(2) 1 Year 20.74%(1)
Since Inception (7/28/97) 14.15%(1) 14.15%(2) Since Inception (7/28/97) 15.16%(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 Standard and Poor's 500 Index (S&P 500-Registered Trademark-) is a
broad-based index, the performance of which is based on the performance of
500 widely-held common stocks chosen for market size, liquidity and
industry group representation. 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 5.25%.
** 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.
3
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2000
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (93.6%)
AEROSPACE & DEFENSE (1.4%)
120,000 Boeing Co.............................................................................. $ 8,137,500
------------
AIRLINES (0.2%)
35,000 AMR Corp.*............................................................................. 1,146,250
------------
ALTERNATIVE POWER GENERATION (1.4%)
25,000 AES Corp. (The)*....................................................................... 1,412,500
85,000 Calpine Corp.*......................................................................... 6,709,687
------------
8,122,187
------------
APPAREL/FOOTWEAR (0.4%)
50,000 Timberland Co. (Class A)*.............................................................. 2,581,250
------------
BEVERAGES: NON-ALCOHOLIC (0.9%)
150,000 Pepsi Bottling Group, Inc. (The)....................................................... 5,193,750
------------
COMPUTER COMMUNICATIONS (1.9%)
60,000 Avocent Corp.*......................................................................... 4,256,250
40,000 Cisco Systems, Inc.*................................................................... 2,155,000
30,000 Emulex Corp.*.......................................................................... 4,406,250
------------
10,817,500
------------
COMPUTER PERIPHERALS (1.1%)
50,000 EMC Corp.*............................................................................. 4,453,125
15,000 Network Appliance, Inc.*............................................................... 1,785,000
------------
6,238,125
------------
COMPUTER PROCESSING HARDWARE (1.0%)
50,000 Sun Microsystems, Inc.*................................................................ 5,543,750
------------
CONTRACT DRILLING (1.3%)
35,000 ENSCO International Inc................................................................ 1,163,750
40,000 Noble Drilling Corp.*.................................................................. 1,662,500
50,000 Rowan Companies, Inc.*................................................................. 1,259,375
60,000 Transocean Sedco Forex Inc............................................................. 3,180,000
------------
7,265,625
------------
DRUGSTORE CHAINS (2.0%)
250,000 Walgreen Co............................................................................ 11,406,250
------------
ELECTRONIC COMPONENTS (1.4%)
125,000 Amphenol Corp. (Class A)*.............................................................. 8,031,250
------------
ELECTRONIC EQUIPMENT/INSTRUMENTS (4.8%)
125,000 PerkinElmer, Inc....................................................................... 14,937,500
175,000 Tektronix, Inc......................................................................... 12,468,750
------------
27,406,250
------------
ELECTRONICS/APPLIANCE STORES (0.8%)
75,000 RadioShack Corp........................................................................ 4,471,875
------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
FINANCE/RENTAL/LEASING (2.1%)
150,000 AmeriCredit Corp.*..................................................................... $ 4,031,250
125,000 Capital One Financial Corp............................................................. 7,890,625
------------
11,921,875
------------
FINANCIAL CONGLOMERATES (3.7%)
200,000 AXA Financial, Inc..................................................................... 10,812,500
200,000 Citigroup, Inc......................................................................... 10,525,000
------------
21,337,500
------------
FINANCIAL PUBLISHING/SERVICES (1.6%)
175,000 SunGard Data Systems Inc.*............................................................. 8,946,875
------------
FOOD RETAIL (2.0%)
500,000 Kroger Co.*............................................................................ 11,281,250
------------
GAS DISTRIBUTORS (1.3%)
125,000 Equitable Resources, Inc............................................................... 7,250,000
------------
HOSPITAL/NURSING MANAGEMENT (2.4%)
350,000 HCA - The Healthcare Corp.............................................................. 13,978,125
------------
INDUSTRIAL CONGLOMERATES (4.8%)
200,000 General Electric Co.................................................................... 10,962,500
175,000 Tyco International Ltd. (Bermuda)...................................................... 9,920,312
100,000 United Technologies Corp............................................................... 6,981,250
------------
27,864,062
------------
INSURANCE BROKERS/SERVICES (1.9%)
85,000 Marsh & McLennan Companies, Inc........................................................ 11,113,750
------------
INTEGRATED OIL (2.2%)
40,000 BP Amoco PLC (ADR) (United Kingdom).................................................... 2,037,500
100,000 Exxon Mobil Corp....................................................................... 8,918,750
25,000 Murphy Oil Corp........................................................................ 1,448,437
------------
12,404,687
------------
INTERNET SOFTWARE/SERVICES (1.2%)
100,000 BEA Systems, Inc.*..................................................................... 7,175,000
------------
INVESTMENT BANKS/BROKERS (1.5%)
125,000 Edwards (A.G.), Inc.................................................................... 6,343,750
40,000 Lehman Brothers Holdings, Inc.......................................................... 2,580,000
------------
8,923,750
------------
MAJOR BANKS (2.2%)
100,000 PNC Financial Services Group, Inc...................................................... 6,687,500
125,000 Wells Fargo & Co....................................................................... 5,789,062
------------
12,476,562
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2000, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
MANAGED HEALTH CARE (4.5%)
450,000 Oxford Health Plans, Inc.*............................................................. $ 15,187,500
50,000 Trigon Healthcare, Inc.*............................................................... 3,584,375
60,000 Wellpoint Health Networks, Inc.*....................................................... 7,016,250
------------
25,788,125
------------
MEDICAL DISTRIBUTORS (1.9%)
250,000 AmeriSource Health Corp. (Class A)*.................................................... 10,859,375
------------
MEDICAL SPECIALTIES (1.1%)
175,000 Cooper Companies, Inc.................................................................. 6,256,250
------------
METAL FABRICATIONS (0.8%)
60,000 Shaw Group Inc. (The)*................................................................. 4,890,000
------------
MISCELLANEOUS COMMERCIAL SERVICES (0.6%)
85,000 Concord EFS, Inc.*..................................................................... 3,511,562
------------
MULTI-LINE INSURANCE (2.1%)
125,000 American International Group, Inc...................................................... 12,250,000
------------
OIL & GAS PIPELINES (3.2%)
120,000 Coastal Corp. (The).................................................................... 9,052,500
200,000 Dynegy, Inc. (Class A)................................................................. 9,262,500
------------
18,315,000
------------
OIL & GAS PRODUCTION (2.0%)
100,000 Anardarko Petroleum Corp............................................................... 6,405,000
250,000 Chesapeake Energy Corp.*............................................................... 1,406,250
50,000 Newfield Exploration Co.*.............................................................. 1,887,500
50,000 Noble Affiliates, Inc.................................................................. 1,834,375
------------
11,533,125
------------
OIL REFINING/MARKETING (0.8%)
135,000 Valero Refining and Marketing Corp..................................................... 4,463,437
------------
OILFIELD SERVICES/EQUIPMENT (0.2%)
40,000 Weatherford International, Inc.*....................................................... 1,460,000
------------
PACKAGED SOFTWARE (6.3%)
50,000 Check Point Software Technologies Ltd. (Israel)*....................................... 7,918,750
35,000 i2 Technologies, Inc.*................................................................. 5,950,000
60,000 Mercury Interactive Corp.*............................................................. 6,660,000
200,000 Rational Software Corp.*............................................................... 11,937,500
35,000 Siebel Systems, Inc.*.................................................................. 3,672,813
------------
36,139,063
------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
PHARMACEUTICALS: GENERIC DRUGS (0.9%)
125,000 IVAX Corp.*............................................................................ $ 5,437,500
------------
PHARMACEUTICALS: MAJOR (6.9%)
135,000 Abbott Laboratories.................................................................... 7,129,688
185,000 American Home Products Corp............................................................ 11,747,500
135,000 Merck & Co., Inc....................................................................... 12,141,563
200,000 Pfizer Inc............................................................................. 8,637,500
------------
39,656,251
------------
PHARMACEUTICALS: OTHER (2.6%)
40,000 Forest Laboratories, Inc.*............................................................. 5,300,000
150,000 Shire Pharmaceuticals Group PLC (ADR) (United Kingdom)*................................ 9,431,250
------------
14,731,250
------------
PROPERTY - CASUALTY INSURERS (5.4%)
225,000 ACE, Ltd. (Bermuda).................................................................... 8,831,250
125,000 Chubb Corp. (The)...................................................................... 10,554,688
200,000 Everest Re Group, Ltd. (Bermuda)....................................................... 11,725,000
------------
31,110,938
------------
REAL ESTATE INVESTMENT TRUSTS (0.7%)
100,000 Boston Properties, Inc................................................................. 4,050,000
------------
SAVINGS BANKS (2.2%)
225,000 Golden West Financial Corp............................................................. 12,614,063
------------
SEMICONDUCTORS (0.2%)
25,000 Integrated Device Technology, Inc.*.................................................... 1,407,813
------------
SPECIALTY INSURANCE (3.2%)
125,000 MGIC Investment Corp................................................................... 8,515,625
125,000 XL Capital Ltd. (Class A) (Bermuda).................................................... 9,609,375
------------
18,125,000
------------
TELECOMMUNICATION EQUIPMENT (1.2%)
60,000 Comverse Technology, Inc.*............................................................. 6,705,000
------------
TOBACCO (1.3%)
200,000 Philip Morris Companies, Inc........................................................... 7,325,000
------------
TOTAL COMMON STOCKS
(COST $442,167,506).................................................................... 537,663,750
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2000, CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENT (a) (7.2%)
U.S. GOVERNMENT AGENCY
$ 41,150 Student Loan Mortgage Assoc. 6.45% due 11/01/00
(COST $41,150,000)................................................................... $ 41,150,000
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(COST $483,317,506) (b)................................................................... 100.8% 578,813,750
LIABILITIES IN EXCESS OF OTHER ASSETS..................................................... (0.8) (4,369,099)
----- -------------
NET ASSETS................................................................................ 100.0% $ 574,444,651
----- -------------
----- -------------
</TABLE>
---------------------
ADR American Depository Receipt.
* Non-income producing security.
(a) Purchased on a discount basis. The interest rate shown has been adjusted to
reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates the
aggregate cost for book purposes. The aggregate gross unrealized
appreciation is $96,679,245 and the aggregate gross unrealized depreciation
is $1,183,001, resulting in net unrealized appreciation of $95,496,244.
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 2000
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(cost $483,317,506)......................................................................... $578,813,750
Cash.......................................................................................... 63,168
Receivable for:
Investments sold.......................................................................... 34,424,887
Shares of beneficial interest sold........................................................ 486,278
Dividends................................................................................. 64,813
Prepaid expenses and other assets............................................................. 6,252
------------
TOTAL ASSETS............................................................................. 613,859,148
------------
LIABILITIES:
Payable for:
Investments purchased..................................................................... 38,031,234
Shares of beneficial interest repurchased................................................. 463,740
Plan of distribution fee.................................................................. 453,731
Investment management fee................................................................. 325,397
Accrued expenses and other payables........................................................... 140,395
------------
TOTAL LIABILITIES........................................................................ 39,414,497
------------
NET ASSETS............................................................................... $574,444,651
============
COMPOSITION OF NET ASSETS:
Paid-in-capital............................................................................... $423,561,455
Net unrealized appreciation................................................................... 95,496,244
Accumulated net investment loss............................................................... (51,569)
Accumulated undistributed net realized gain................................................... 55,438,521
------------
NET ASSETS............................................................................... $574,444,651
============
CLASS A SHARES:
Net Assets.................................................................................... $6,907,677
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 443,935
NET ASSET VALUE PER SHARE................................................................ $15.56
============
MAXIMUM OFFERING PRICE PER SHARE,
(NET ASSET VALUE PLUS 5.54% OF NET
ASSET VALUE)......................................................................... $16.42
============
CLASS B SHARES:
Net Assets.................................................................................... $504,311,463
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 33,527,979
NET ASSET VALUE PER SHARE................................................................ $15.04
============
CLASS C SHARES:
Net Assets.................................................................................... $2,433,276
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 160,972
NET ASSET VALUE PER SHARE................................................................ $15.12
============
CLASS D SHARES:
Net Assets.................................................................................... $60,792,235
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 3,868,320
NET ASSET VALUE PER SHARE................................................................ $15.72
============
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 2000
<TABLE>
<S> <C>
NET INVESTMENT LOSS:
INCOME
Dividends (net of $11,337 foreign withholding tax)............................................ $ 2,775,179
Interest...................................................................................... 2,206,377
------------
TOTAL INCOME............................................................................. 4,981,556
------------
EXPENSES
Plan of distribution fee (Class A shares)..................................................... 17,105
Plan of distribution fee (Class B shares)..................................................... 5,294,471
Plan of distribution fee (Class C shares)..................................................... 17,344
Investment management fee..................................................................... 3,760,671
Transfer agent fees and expenses.............................................................. 650,826
Shareholder reports and notices............................................................... 111,862
Registration fees............................................................................. 86,804
Professional fees............................................................................. 73,794
Custodian fees................................................................................ 68,924
Trustees' fees and expenses................................................................... 15,805
Other......................................................................................... 11,199
------------
TOTAL EXPENSES........................................................................... 10,108,805
------------
NET INVESTMENT LOSS...................................................................... (5,127,249)
------------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain............................................................................. 67,890,012
Net change in unrealized appreciation......................................................... 37,777,782
------------
NET GAIN................................................................................. 105,667,794
------------
NET INCREASE.................................................................................. $100,540,545
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
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 loss..................................................... $ (5,127,249) $ (5,225,051)
Net realized gain....................................................... 67,890,012 152,060,838
Net change in unrealized appreciation................................... 37,777,782 (15,097,438)
------------- ------------
NET INCREASE....................................................... 100,540,545 131,738,349
------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED GAIN:
Class A shares.......................................................... (1,452,888) (401,300)
Class B shares.......................................................... (124,572,319) (51,411,180)
Class C shares.......................................................... (214,295) (98,960)
Class D shares.......................................................... (10,594,159) (4,282,604)
------------- ------------
TOTAL DISTRIBUTIONS................................................ (136,833,661) (56,194,044)
------------- ------------
Net increase (decrease) from transactions in shares of beneficial
interest.............................................................. 95,058,623 (44,859,929)
------------- ------------
NET INCREASE....................................................... 58,765,507 30,684,376
NET ASSETS:
Beginning of period..................................................... 515,679,144 484,994,768
------------- ------------
END OF PERIOD
(INCLUDING ACCUMULATED NET INVESTMENT LOSSES OF $51,569 AND $52,319,
RESPECTIVELY)....................................................... $ 574,444,651 $515,679,144
============= ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2000
1. ORGANIZATION AND ACCOUNTING POLICIES
Morgan Stanley Dean Witter Capital Growth Securities (the "Fund") is registered
under the Investment Company Act of 1940, as amended (the "Act"), as a
diversified, open-end management investment company. The Fund's investment
objective is long-term capital growth. The Fund was organized as a Massachusetts
business trust on December 8, 1989 and commenced operations on April 2, 1990. 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
those estimates.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) an equity portfolio security listed or traded
on the New York or American Stock Exchange, NASDAQ, or other domestic or foreign
stock exchange is valued at its latest sale price, prior to the time when assets
are valued; if there were no sales that day, the security is valued at the
latest bid price (in cases where securities are traded on more than one
exchange, the securities are valued on the exchange designated as the primary
market pursuant to procedures adopted by the Trustees); (2) all other portfolio
securities for which over-the-counter market quotations are readily available
are valued at the latest available bid price; (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; and
(4) 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.
9
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2000, CONTINUED
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
Dividend income and other distributions are recorded on the ex-dividend date.
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. 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.
E. 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 the Investment
Manager a management fee, accrued daily and payable monthly, by applying the
following annual rates to the net assets of the Fund determined at the close of
each business day: 0.65% to the portion of daily net assets not exceeding $500
million; 0.55% to the portion of daily net assets exceeding $500 million but not
exceeding $1 billion; 0.50% to the portion of daily net assets exceeding $1
billion but not exceeding $1.5 billion; and 0.475% to the portion of daily net
assets exceeding $1.5 billion.
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
10
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2000, CONTINUED
(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 -- 1.0% of the lesser of: (a) the average daily
aggregate gross sales of the Class B shares since the 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 1.0% 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
$14,037,176 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 1.0% of the average daily
net assets of Class A or Class C, respectively, will not be reimbursed by the
Fund through payments in any subsequent year, except that expenses representing
a gross sales 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 0.25% and
1.0%, 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 shares of $142,910 and $1,358, respectively
and received $7,161 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.
11
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2000, CONTINUED
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
$2,042,172,183 and $2,119,253,907, respectively.
For the year ended October 31, 2000 the Fund incurred $280,927 in brokerage
commissions with Dean Witter Reynolds Inc. ("DWR"), an affiliate of the
Investment Manager and Distributor, for portfolio transactions executed on
behalf of the Fund. At October 31, 2000, the Fund's payable for investments
purchased and receivable for investments sold included unsettled trades with DWR
of $2,777,755 and $1,839,411, respectively.
For the year ended October 31, 2000, the Fund incurred brokerage commissions of
$175,257 with Morgan Stanley & Co., Inc., an affiliate of the Investment Manager
and Distributor, for portfolio transactions executed on behalf of the Fund. At
October 31, 2000, the Fund's payable for investments purchased included
unsettled trades with Morgan Stanley & Co., Inc. of $1,301,125.
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 $700.
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
$3,544. At October 31, 2000, the Fund had an accrued pension liability of
$51,569 which is included in accrued expenses in the Statement of Assets and
Liabilities.
12
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2000, CONTINUED
5. 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............................................................. 282,896 $ 4,539,795 143,069 $ 2,289,077
Reinvestment of distributions.................................... 98,235 1,410,649 28,595 388,035
Redeemed......................................................... (245,359) (3,822,339) (95,316) (1,520,516)
---------- ------------- ---------- -------------
Net increase - Class A........................................... 135,772 2,128,105 76,348 1,156,596
---------- ------------- ---------- -------------
CLASS B SHARES
Sold............................................................. 4,308,162 68,137,512 2,423,634 37,639,071
Reinvestment of distributions.................................... 8,403,850 117,401,782 3,655,137 48,978,844
Redeemed......................................................... (7,529,809) (117,971,824) (8,138,374) (126,956,990)
---------- ------------- ---------- -------------
Net increase (decrease) - Class B................................ 5,182,203 67,567,470 (2,059,603) (40,339,075)
---------- ------------- ---------- -------------
CLASS C SHARES
Sold............................................................. 129,880 2,025,557 33,309 503,728
Reinvestment of distributions.................................... 13,398 188,105 5,482 73,451
Redeemed......................................................... (23,863) (361,966) (63,569) (976,649)
---------- ------------- ---------- -------------
Net increase (decrease) - Class C................................ 119,415 1,851,696 (24,778) (399,470)
---------- ------------- ---------- -------------
CLASS D SHARES
Sold............................................................. 1,932,874 31,620,646 1,114,224 17,761,834
Reinvestment of distributions.................................... 732,012 10,592,214 302,202 4,119,023
Redeemed......................................................... (1,135,708) (18,701,508) (1,714,336) (27,158,837)
---------- ------------- ---------- -------------
Net increase (decrease) - Class D................................ 1,529,178 23,511,352 (297,910) (5,277,980)
---------- ------------- ---------- -------------
Net increase (decrease) in Fund.................................. 6,966,568 $ 95,058,623 (2,305,943) $ (44,859,929)
========== ============= ========== =============
</TABLE>
6. FEDERAL INCOME TAX STATUS
As of October 31, 2000, the Fund had temporary book/tax differences primarily
attributable to capital loss deferrals on wash sales and permanent book/tax
differences attributable to a net operating loss. To reflect reclassifications
arising from the permanent differences, accumulated undistributed net realized
gain was charged and accumulated net investment loss was credited $5,127,999.
13
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
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......................... $16.91 $14.68 $18.75 $18.10
------ ------ ------ ------
Income (loss) from investment operations:
Net investment loss....................................... (0.03) (0.04) (0.11) (0.04)
Net realized and unrealized gain (loss)................... 3.11 3.98 (0.55) 0.69
------ ------ ------ ------
Total income (loss) from investment operations............... 3.08 3.94 (0.66) 0.65
------ ------ ------ ------
Less distributions from net realized gain.................... (4.43) (1.71) (3.41) --
------ ------ ------ ------
Net asset value, end of period............................... $15.56 $16.91 $14.68 $18.75
====== ====== ====== ======
TOTAL RETURN+................................................ 20.43 % 29.74 % (2.84)% 3.59 %(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses..................................................... 1.05 %(3) 1.06 %(3) 1.09 %(3) 1.12 %(2)
Net investment loss.......................................... (0.21)%(3) (0.28)%(3) (0.69)%(3) (0.82)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands...................... $6,908 $5,212 $3,403 $1,684
Portfolio turnover rate...................................... 376 % 557 % 230 % 123 %(1)
</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
14
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
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 $ 16.58 $ 14.53 $ 18.71 $ 16.98 $ 14.40
-------- -------- -------- -------- --------
Income (loss) from investment
operations:
Net investment loss........ (0.15) (0.17) (0.23) (0.21) (0.11)
Net realized and unrealized
gain (loss)................ 3.04 3.93 (0.54) 4.68 2.69
-------- -------- -------- -------- --------
Total income (loss) from
investment operations......... 2.89 3.76 (0.77) 4.47 2.58
-------- -------- -------- -------- --------
Less distributions from net
realized gain................. (4.43) (1.71) (3.41) (2.74) --
-------- -------- -------- -------- --------
Net asset value, end of
period........................ $ 15.04 $ 16.58 $ 14.53 $ 18.71 $ 16.98
======== ======== ======== ======== ========
TOTAL RETURN+................. 19.50 % 28.70 % (3.56)% 31.21 % 17.92 %
RATIOS TO AVERAGE NET ASSETS:
Expenses...................... 1.80 %(1) 1.86 %(1) 1.84 %(1) 1.84 % 1.84 %
Net investment loss........... (0.96)%(1) (1.08)%(1) (1.44)%(1) (1.26)% (0.64)%
SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands..................... $504,311 $469,991 $441,787 $522,276 $506,571
Portfolio turnover rate....... 376 % 557 % 230 % 123 % 72 %
</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., have been
designated as Class B shares. Shares held by those employee benefit plans
prior 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.
SEE NOTES TO FINANCIAL STATEMENTS
15
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
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........................ $16.64 $14.53 $18.71 $18.10
------ ------ ------ ------
Income (loss) from investment operations:
Net investment loss...................................... (0.15) (0.12) (0.23) (0.07)
Net realized and unrealized gain (loss).................. 3.06 3.94 (0.54) 0.68
------ ------ ------ ------
Total income (loss) from investment operations.............. 2.91 3.82 (0.77) 0.61
------ ------ ------ ------
Less distributions from net realized gain................... (4.43) (1.71) (3.41) --
------ ------ ------ ------
Net asset value, end of period.............................. $15.12 $16.64 $14.53 $18.71
====== ====== ====== ======
TOTAL RETURN+............................................... 19.56 % 29.17 % (3.56)% 3.37 %(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................... 1.80 %(3) 1.53 %(3) 1.84 %(3) 1.85 %(2)
Net investment loss......................................... (0.96)%(3) (0.75)%(3) (1.44)%(3) (1.54)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $2,433 $692 $964 $389
Portfolio turnover rate..................................... 376 % 557 % 230 % 123 %(1)
</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
16
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
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........................ $ 17.01 $ 14.73 $ 18.76 $ 18.10
------- ------- ------- -------
Income (loss) from investment operations:
Net investment income (loss)............................. 0.01 (0.01) (0.07) (0.02)
Net realized and unrealized gain (loss).................. 3.13 4.00 (0.55) 0.68
------- ------- ------- -------
Total income (loss) from investment operations.............. 3.14 3.99 (0.62) 0.66
------- ------- ------- -------
Less distributions from net realized gain................... (4.43) (1.71) (3.41) --
------- ------- ------- -------
Net asset value, end of period.............................. $ 15.72 $ 17.01 $ 14.73 $ 18.76
======= ======= ======= =======
TOTAL RETURN+............................................... 20.74 % 30.00 % (2.59)% 3.65 %(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................... 0.80 %(3) 0.86 %(3) 0.84 %(3) 0.82 %(2)
Net investment income (loss)................................ 0.04 %(3) (0.08)%(3) (0.44)%(3) (0.50)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $60,792 $39,785 $38,840 $36,863
Portfolio turnover rate..................................... 376 % 557 % 230 % 123 %(1)
</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.
SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
INDEPENDENT AUDITORS' REPORT
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES
OF MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES:
We have audited the accompanying statement of assets and liabilities of Morgan
Stanley Dean Witter Capital Growth Securities (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 8, 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 Capital Growth Securities 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 11, 2000
2000 FEDERAL TAX NOTICE (UNAUDITED)
During the fiscal year ended October 31, 2000, the Fund paid to
its shareholders $1.57 per share from long-term capital gains.
18
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
CHANGE IN INDEPENDENT ACCOUNTANTS
On July 1, 2000 PricewaterhouseCoopers LLP resigned as independent accountants
of the Fund.
The reports of PricewaterhouseCoopers LLP on the financial statements of the
Fund for the past two fiscal years contained no adverse opinion or disclaimer of
opinion and were not qualified or modified as to uncertainty, audit scope or
accounting principle.
In connection with its audits for the two most recent fiscal years and through
July 1, 2000, there have been no disagreements with PricewaterhouseCoopers LLP
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements, if not resolved
to the satisfaction of PricewaterhouseCoopers LLP would have caused them to make
reference thereto in their report on the financial statements for such years.
The Fund, with the approval of its Board of Trustees and its Audit Committee,
engaged Deloitte & Touche LLP as its new independent auditors as of July 1,
2000.
19
<PAGE>
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn MORGAN STANLEY
Wayne E. Hedien
James F. Higgins DEAN WITTER
Dr. Manuel H. Johnson
Michael E. Nugent CAPITAL GROWTH
Philip J. Purcell
John L. Schroeder SECURITIES
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Mitchell M. Merin
President
Barry Fink
Vice President, Secretary and General Counsel
Peter Hermann
Vice President
Thomas F. Caloia
[PHOTO]
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.
Two World Trade Center
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.
ANNUAL REPORT
Morgan Stanley Dean Witter Distributors Inc., member NASD. OCTOBER 31, 2000
