<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC. TWO WORLD TRADE CENTER, NEW YORK, NEW
YORK 10048
LETTER TO THE SHAREHOLDERS OCTOBER 31, 1995
DEAR SHAREHOLDER:
During the fiscal year ended October 31, 1995, the global economic and market
environment was relatively benign with a modest dollar recovery versus the
Deutschemark, stable or rising bond markets worldwide as interest rates trended
lower and a positive trend for U.S. stocks. Against this background, investors
in European stocks were able to focus on underlying economic and corporate
fundamentals which were, and remain, positive. Inflation in Europe poses little
threat, interest rates are set to fall further and will likely stay low well
into 1996 and all countries should continue to post positive economic growth,
albeit at a slower pace. Corporate earnings are maintaining their upward
momentum. While some cyclical industries such as steel, chemicals, and pulp and
paper may be approaching peak cycle earnings in late 1995/early 1996, many
defensive and growth sectors, including financials, hold out the prospect of
earnings rising in 1996 and 1997. Given these positive factors, the Fund was
fully invested throughout the period under review.
PERFORMANCE AND PORTFOLIO
Against this backdrop, Dean Witter European Growth Fund produced a total return
of 16.83 percent for the twelve-month period ended October 31, 1995, compared to
a return of 7.63 percent for the Morgan Stanley Capital International (MSCI)
World Index. The Fund continues to perform well relative to its peers and was
ranked #2 of 41 European stock funds for the 12-month period and #2 of 17 funds
for the trailing five years, according to Lipper Analytical Services, Inc.
(Rankings are based on total return and do not reflect any applicable sales
charges.) The accompanying chart illustrates the growth of a $10,000 investment
in the Fund since inception (May 31, 1990) through October 31, 1995, versus
investments in the companies that comprise the MSCI World Index.
As always, political developments had a significant influence upon certain
markets and thus the Fund's portfolio allocations. In France,
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
LETTER TO THE SHAREHOLDERS OCTOBER 31, 1995, CONTINUED
investors quickly turned negative on the policies of the Chirac administration
elected in May which represented no significant change from the previous
government and held out no prospect for an improvement in the sluggish economy.
The French stock market turned in a poor performance throughout the period, but
rallied strongly in October as changes in policy and personnel became
inevitable. The Fund's weighting in France has been increased from 11.3 percent
of Fund assets on April 30, 1995 to 13.4 percent at the end of October in
anticipation of a sustained market recovery.
The Fund remains relatively underweighted in Italy (1.9 percent), given the fact
that country's currency instability, political uncertainty and budgetary
problems remain as entrenched as ever. The Fund's Scandinavian allocation was
somewhat reduced during the reporting period as the Swedish Krona
appreciated against most European
currencies, thereby jeopardizing the
strength of the vital export sector of
its economy. On October 31, 13.3
percent of Fund assets were invested in
Scandinavia. The United Kingdom remains
the Fund's largest single country
allocation (36.3 percent) with stock
selection emphasizing growth stocks and
companies with high earnings
visibility. As expected, there was a
pick-up in merger and takeover activity
during the period which benefited a
number of the Fund's holdings,
including TSB and Boddingtons, which
was subsequently sold off. The British
economy remains supportive of the
equity market with low inflation,
moderate interest rates and a
sustainable pace of economic growth.
LOOKING AHEAD
Morgan Grenfell, the Fund's
Sub-Advisor, believes the prospects for
the Fund are positive. The portfolio is
well balanced geographically and by
industry. Cyclical sectors are
underweighted in favor of financials,
interest rate sensitive stocks and
growth stocks. They anticipate 1996 to
be another
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
LETTER TO THE SHAREHOLDERS OCTOBER 31, 1995, CONTINUED
good year for the European economies although as the economic cycle advances
growth will be moderate and a mid-cycle pause is a possibility. The Fund is
well-positioned for this scenario, with an emphasis on companies with sound
financials, good products/franchises and shareholder-oriented management. Stock
selection remains the primary source of value added.
We appreciate your ongoing support of Dean Witter European Growth Fund and look
forward to continuing to serve your investment needs.
Very truly yours,
[SIGNATURE]
CHARLES A. FIUMEFREDDO
CHAIRMAN OF THE BOARD
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1995
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- --------------------------------------------------------------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS, WARRANTS, RIGHTS
AND BONDS (93.4%)
AUSTRIA (1.6%)
ENGINEERING
82,730 VA Technologie AG.............. $ 9,586,559
---------------
UTILITIES
75,000 Oester Elek AG (A Shares)...... 4,580,095
---------------
TOTAL AUSTRIA.................. 14,166,654
---------------
BELGIUM (0.4%)
RETAIL
14,350 Colruyt S.A.................... 3,639,439
---------------
DENMARK (1.7%)
AIR TRANSPORT
24,700 Kobenhavns Lufthavne AS........ 1,854,762
---------------
BANKING
187,240 Den Danske Bank................ 12,414,081
---------------
TOTAL DENMARK.................. 14,268,843
---------------
FINLAND (1.9%)
ELECTRONICS
52,000 Nokia AB (Series A)............ 2,979,275
226,000 Nokia AB (Series K)............ 13,214,816
---------------
TOTAL FINLAND.................. 16,194,091
---------------
FRANCE (13.4%)
BANKING
87,099 Societe Generale............... 9,995,378
---------------
ELECTRONICS
168,800 SGS-Thomson Microelectronics
NV............................. 7,800,403
---------------
FINANCIAL SERVICES
32,500 Cetelem Group.................. 5,194,885
88,923 Credit Local de France......... 7,053,997
---------------
12,248,882
---------------
FOOD MANUFACTURER
257,000 SEITA.......................... 8,953,236
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- --------------------------------------------------------------------
<C> <S> <C>
FOOD, BEVERAGE, TOBACCO &
HOUSEHOLD PRODUCTS
77,450 LVMH Moet-Hennessy Louis
Vuitton........................ $ 15,443,020
---------------
INSURANCE
175,136 Scor S.A....................... 5,232,761
---------------
OIL RELATED
76,184 Societe National Elf
Aquitaine...................... 5,198,834
---------------
PHARMACEUTICALS
200,279 Sanofi S.A..................... 12,801,156
FRF 13 Sanofi S.A. 4.00% due 01/01/00
(Conv.)........................ 961,156
---------------
13,762,312
---------------
RETAIL
22,500 Carrefour Supermarche.......... 13,242,346
73,147 Castorama Dubois............... 11,886,875
---------------
25,129,221
---------------
TEXTILES
32,666 Christian Dior S.A............. 3,213,181
4,666 Christian Dior S.A. (Warrants
due 06/30/98)*................. 48,765
54,452 Hermes International........... 9,596,442
---------------
12,858,388
---------------
TOTAL FRANCE................... 116,622,435
---------------
GERMANY (5.9%)
BANKING
121,060 Deutsche Pfandbrief &
Hypothekenbank AG.............. 4,730,586
---------------
BUSINESS SERVICES
99,400 SAP AG (Pref.)................. 15,254,281
---------------
CHEMICALS
46,495 Bayer AG....................... 12,367,835
---------------
HEALTH & PERSONAL CARE
50,000 Rhoen-Klinikum AG.............. 4,689,165
50,000 Rhoen-Klinikum AG
(Sub. Rights)*................. 781,527
28,830 Rhoen-Klinikum AG (Pref.)...... 2,396,526
28,830 Rhoen-Klinikum AG
(Pref. Rights)*................ 512,078
---------------
8,379,296
---------------
MACHINERY - DIVERSIFIED
12,000 Jungheinrich AG (Pref.)........ 2,208,170
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1995, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- --------------------------------------------------------------------
<C> <S> <C>
MERCHANDISING
12,740 Gehe AG........................ $ 6,254,593
4,435 Gehe AG (Rank for Dividend
Shares)........................ 2,108,004
---------------
8,362,597
---------------
TOTAL GERMANY.................. 51,302,765
---------------
ITALY (1.9%)
TELECOMMUNICATIONS
1,345,000 Stet Societa' Finanziaria
Telefonica SpA................. 3,819,292
7,526,850 Telecom Italia SpA............. 12,663,097
---------------
TOTAL ITALY.................... 16,482,389
---------------
NETHERLANDS (8.8%)
BUSINESS SERVICES
206,100 Randstad Holdings NV........... 9,300,494
---------------
INSURANCE
261,404 Aegon NV....................... 9,924,008
---------------
MANUFACTURING
80,000 ASM Lithography Holding NV*.... 3,944,733
---------------
MERCHANDISING
234,976 Koninklijke Ahold NV........... 8,905,796
---------------
MULTI-INDUSTRY
256,181 Hunter Douglas NV.............. 12,420,995
---------------
PUBLISHING
1,130,000 Elsevier NV.................... 14,610,217
83,000 Ver Ned Uitgev................. 11,636,202
72,954 Wegener NV..................... 5,918,438
---------------
32,164,857
---------------
TOTAL NETHERLANDS.............. 76,660,883
---------------
NORWAY (1.1%)
OIL & GAS PRODUCTS
758,000 Saga Petroleum AS (B Shares)... 9,130,183
---------------
SPAIN (4.2%)
BANKS
461,000 Banco Bilbao Vizcaya........... 14,100,287
25,250 Banco Popular Espanol S.A...... 4,014,740
---------------
18,115,027
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- --------------------------------------------------------------------
<C> <S> <C>
FINANCIAL SERVICES
85,136 Corporacion Financiera Hispamer
S.A............................ $ 4,712,325
---------------
OIL RELATED
95,450 Gas Natural SDG................ 13,102,362
---------------
RETAIL
22,994 Centros Comerciales Continente
S.A............................ 576,028
---------------
TOTAL SPAIN.................... 36,505,742
---------------
SWEDEN (8.4%)
AEROSPACE & DEFENSE
311,550 Securitas AB
(Series "B" Free).............. 12,083,054
---------------
AUTOMOTIVE
80,000 Autoliv AB..................... 4,599,714
---------------
BANKING
200,000 Stadshypotek AB................ 3,636,912
---------------
BUSINESS SERVICES
330,600 Scribona AB
(Series "B" Free).............. 3,267,834
---------------
FOREST PRODUCTS, PAPER & PACKAGING
185,000 Mo och Domsjoe AB (B Shares)... 9,436,354
625,000 Stora Kopparbergs
(Series "B" Free).............. 7,592,621
---------------
17,028,975
---------------
HEALTH & PERSONAL CARE
54,450 Getinge Industrier AB (B
Shares)........................ 2,325,413
---------------
MACHINERY
124,000 Kalmar Industries AB........... 2,020,976
---------------
PHARMACEUTICALS
306,830 Astra AB (Series "A" Free)..... 11,298,049
---------------
TELECOMMUNICATIONS EQUIPMENT
70,860 Ericsson (L.M.) Telephone Co.
AB (Rights)*................... 1,507,773
718,600 Ericsson (L.M.) Telephone Co.
AB (Series "B" Free)........... 15,290,515
---------------
16,798,288
---------------
TOTAL SWEDEN................... 73,059,215
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1995, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- --------------------------------------------------------------------
<C> <S> <C>
SWITZERLAND (7.8%)
BUSINESS SERVICES
2,010 Societe Generale de
Surveillance Holdings S.A...... $ 3,798,634
---------------
INDUSTRIALS
11,000 Hilti AG....................... 9,071,366
---------------
MULTI-INDUSTRY
13,359 BBC Brown Boveri AG............ 15,501,148
---------------
PHARMACEUTICALS
9,620 Ciba-Geigy AG.................. 8,331,683
2,179 Roche Holdings AG.............. 15,838,546
12,000 Sandoz AG...................... 9,906,608
6,000 Sandoz AG (Series B)........... 4,995,595
---------------
39,072,432
---------------
TOTAL SWITZERLAND.............. 67,443,580
---------------
UNITED KINGDOM (36.3%)
AEROSPACE & DEFENSE
572,222 British Aerospace PLC.......... 6,403,130
22,888 British Aerospace PLC
(Units)+....................... 92,607
---------------
6,495,737
---------------
AUTOMOTIVE
1,910,000 BBA Group PLC.................. 8,120,452
---------------
BANKING
850,000 Abbey National PLC............. 7,194,041
475,000 National Westminster Bank
PLC............................ 4,740,907
925,000 TSB Group PLC.................. 5,453,120
---------------
17,388,068
---------------
BREWERS
815,000 Scottish & Newcastle Breweries
PLC............................ 7,554,751
---------------
BROADCAST MEDIA
1,013,000 British Sky Broadcasting Group
PLC*........................... 6,051,956
608,274 Flextech PLC................... 4,547,313
---------------
10,599,269
---------------
BUILDING & CONSTRUCTION
1,626,000 Blue Circle Industries PLC..... 7,478,389
1,205,200 Mowlem (John) & Co. PLC........ 1,142,891
1,716,200 Williams Holdings PLC.......... 8,503,544
---------------
17,124,824
---------------
BUSINESS SERVICES
648,000 Reuters Holdings PLC........... 6,022,084
---------------
CHEMICALS
1,326,000 Albright & Wilson PLC.......... 3,332,231
---------------
<CAPTION>
SHARES/PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- --------------------------------------------------------------------
<C> <S> <C>
CONGLOMERATES
1,167,857 BTR PLC........................ $ 6,201,881
1,200,000 Tomkins PLC.................... 4,732,017
---------------
10,933,898
---------------
CONSTRUCTION PLANT & EQUIPMENT
1,320,000 CRH PLC........................ 8,762,292
---------------
ELECTRONICS
3,150,000 Cray Electronics Holdings
PLC............................ 2,140,787
---------------
FOOD PROCESSING
475,000 Associated British Foods PLC... 5,280,688
---------------
FOOD, BEVERAGE, TOBACCO &
HOUSEHOLD PRODUCTS
711,153 B.A.T. Industries PLC.......... 5,833,442
867,000 Grand Metropolitan PLC......... 6,001,886
836,000 Tate & Lyle PLC................ 5,919,415
---------------
17,754,743
---------------
HEALTH & PERSONAL CARE
554,750 Reckitt & Colman PLC........... 5,900,745
---------------
INSURANCE
375,000 Britannic Assurance PLC........ 4,184,374
619,884 Commercial Union PLC........... 6,005,724
556,000 Lloyds Abbey Life PLC.......... 4,020,318
1,519,800 Prudential Corp. PLC........... 9,500,084
1,308,666 Royal Insurance Holdings PLC... 8,076,893
---------------
31,787,393
---------------
LEISURE
1,081,000 Granada Group PLC.............. 11,541,056
---------------
METALS & MINING
548,000 Smiths Industries PLC.......... 5,023,461
---------------
MISCELLANEOUS
689,000 Vendome Luxury Group PLC
(Units)+*...................... 6,092,756
---------------
OIL RELATED
2,357,900 British Petroleum Co. PLC...... 17,347,607
2,627,000 Lasmo PLC...................... 6,352,519
---------------
23,700,126
---------------
PAPER PRODUCTS
1,530,000 Arjo Wiggins Appleton PLC...... 5,658,506
---------------
PHARMACEUTICALS
1,274,325 Glaxo Wellcome PLC............. 17,190,093
1,665,000 Medeva PLC..................... 7,170,926
1,053,300 SmithKline Beecham (Units)+.... 10,787,519
---------------
35,148,538
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1995, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- --------------------------------------------------------------------
<C> <S> <C>
PUBLISHING
325,000 Daily Mail & General Trust..... $ 5,624,604
---------------
REAL ESTATE
1,000,000 Hammerson PLC.................. 5,160,333
---------------
RETAIL
470,000 Boots Co. PLC.................. 4,156,162
668,000 Great Universal Stores PLC..... 6,023,191
2,211,000 Morrison (W.M.) Supermarkets
PLC............................ 5,206,783
1,230,000 Next PLC....................... 8,019,062
---------------
23,405,198
---------------
TELECOMMUNICATIONS
3,042,000 British Telecommunications
PLC............................ 18,101,672
---------------
TRANSPORTATION
686,300 British Airways PLC............ 4,935,372
---------------
UTILITIES
985,000 Scottish Power PLC............. 5,433,206
720,000 Thames Water PLC............... 5,991,359
---------------
11,424,565
---------------
TOTAL UNITED KINGDOM........... 315,014,149
---------------
TOTAL COMMON AND PREFERRED
STOCKS, WARRANTS, RIGHTS AND
BONDS
(IDENTIFIED COST
$646,765,870).................. 810,490,368
---------------
SHORT-TERM INVESTMENTS (a) (5.6%)
COMMERCIAL PAPER (2.7%)
AUTOMOTIVE FINANCE
$ 23,400 Ford Motor Credit Co. 5.89% due
11/01/95....................... 23,400,000
---------------
U.S. GOVERNMENT AGENCY (2.9%)
25,000 Federal Home Loan Banks 5.63%
due 11/13/95................... 24,953,083
---------------
TOTAL SHORT-TERM INVESTMENTS
(AMORTIZED COST $48,353,083)... 48,353,083
---------------
</TABLE>
<TABLE>
<CAPTION>
CURRENCY
AMOUNT IN
THOUSANDS VALUE
- --------------------------------------------------------------------
<C> <S> <C>
PURCHASED PUT OPTION ON FOREIGN CURRENCY (0.1%)
FRF 85,500 November 28, 1995/FRF 4.87
(Identified Cost $3,214,800)... $ 1,248,300
---------------
TOTAL INVESTMENTS
(IDENTIFIED COST
$698,333,753) (B)........... 99.1% 860,091,751
OTHER ASSETS IN EXCESS OF
LIABILITIES................. 0.9 7,638,745
----- ------------
NET ASSETS.................. 100.0% $867,730,496
----- ------------
----- ------------
<FN>
- ---------------------
* Non-income producing security.
+ Consists of more than one class of securities traded together as a unit;
generally stocks with attached stocks/warrants.
(a) Securities were purchased on a discount basis. The interest rates shown
have been adjusted to reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes is $699,043,827; the
aggregate gross unrealized depreciation is $13,900,522 and the aggregate
gross unrealized appreciation is $174,948,446, resulting in net unrealized
appreciation of $161,047,924.
</TABLE>
<TABLE>
<CAPTION>
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT OCTOBER 31, 1995:
<C> <C> <S> <C>
IN EXCHANGE DELIVERY UNREALIZED
CONTRACTS TO RECEIVE FOR DATE DEPRECIATION
--------------------------------------------------------------------
DKK 10,015,925 $ 1,835,763 11/01/95 $ (1,345)
NLG 1,890,720 $ 1,198,631 11/01/95 (304)
$ 1,986,581 ESP 242,442,291 11/03/95 (1,466)
-------
Net unrealized depreciation .......................... $ (3,115)
-------
-------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
SUMMARY OF INVESTMENTS OCTOBER 31, 1995
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- ------------------------------------------------------------------------------
<S> <C> <C>
Aerospace & Defense....................... $ 18,578,790 2.1%
Air Transport............................. 1,854,762 0.2
Automotive................................ 12,720,164 1.4
Automotive Finance........................ 23,400,000 2.7
Banking................................... 48,165,024 5.5
Banks..................................... 18,115,027 2.1
Brewers................................... 7,554,750 0.9
Broadcast Media........................... 10,599,269 1.2
Building & Construction................... 17,124,824 2.0
Business Services......................... 37,643,327 4.3
Chemicals................................. 15,700,066 1.8
Conglomerates............................. 10,933,898 1.2
Construction Plant & Equipment............ 8,762,292 1.0
Electronics............................... 26,135,280 3.0
Engineering............................... 9,586,559 1.1
Financial Services........................ 16,961,207 2.0
Food Manufacturer......................... 8,953,236 1.0
Food Processing........................... 5,280,688 0.6
Food, Beverage, Tobacco & Household
Products................................ 33,197,763 3.8
Foreign Currency Put Option............... 1,248,300 0.1
Forest Products, Paper & Packaging........ 17,028,975 2.0
Health & Personal Care.................... 16,605,454 1.9
Industrials............................... 9,071,366 1.0
Insurance................................. 46,944,162 5.4
Leisure................................... 11,541,056 1.3
Machinery................................. 2,020,976 0.2
Machinery - Diversified................... 2,208,170 0.2
Manufacturing............................. 3,944,733 0.4
Merchandising............................. 17,268,399 2.0
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- ------------------------------------------------------------------------------
<S> <C> <C>
Metals & Mining........................... $ 5,023,461 0.6%
Miscellaneous............................. 6,092,756 0.7
Multi-Industry............................ 27,922,143 3.2
Oil & Gas Products........................ 9,130,183 1.1
Oil Related............................... 42,001,322 4.9
Paper Products............................ 5,658,506 0.7
Pharmaceuticals........................... 99,281,331 11.5
Publishing................................ 37,789,461 4.4
Real Estate............................... 5,160,333 0.6
Retail.................................... 52,749,886 6.1
Telecommunications........................ 34,584,061 4.0
Telecommunications Equipment.............. 16,798,288 2.0
Textiles.................................. 12,858,388 1.5
Transportation............................ 4,935,372 0.6
U.S. Government Agency.................... 24,953,083 2.9
Utilities................................. 16,004,660 1.9
------------------ -----
$ 860,091,751 99.1%
------------------ -----
------------------ -----
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
- ------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks............................. $ 786,820,092 90.7%
Convertible Bond.......................... 961,156 0.1
Preferred Stocks.......................... 19,858,977 2.3
Foreign Currency Put
Option.................................. 1,248,300 0.1
Rights.................................... 2,801,378 0.3
Short-Term Investments.................... 48,353,083 5.6
Warrants.................................. 48,765 0.0
------------------ -----
$ 860,091,751 99.1%
------------------ -----
------------------ -----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $698,333,753)............................ $860,091,751
Receivable for:
Investments sold........................................ 15,570,311
Capital stock sold...................................... 2,003,339
Dividends............................................... 1,451,282
Foreign withholding taxes reclaimed..................... 1,340,805
Prepaid expenses and other assets........................... 40,639
------------
TOTAL ASSETS........................................... 880,498,127
------------
LIABILITIES:
Payable for:
Investments purchased................................... 9,051,139
Investment management fee............................... 742,154
Capital stock repurchased............................... 694,071
Plan of distribution fee................................ 690,726
Payable to bank............................................. 1,087,627
Accrued expenses and other payables......................... 501,914
------------
TOTAL LIABILITIES...................................... 12,767,631
------------
NET ASSETS:
Paid-in-capital............................................. 662,558,945
Net unrealized appreciation................................. 161,850,367
Accumulated net investment loss............................. (240,553)
Accumulated undistributed net realized gain................. 43,561,737
------------
NET ASSETS............................................. $867,730,496
------------
------------
NET ASSET VALUE PER SHARE,
60,112,542 SHARES OUTSTANDING (200,000,000 SHARES
AUTHORIZED OF $.01 PAR VALUE).............................
$14.44
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1995
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Dividends (net of $2,922,311 foreign withholding tax)....... $ 17,204,102
Interest.................................................... 1,161,500
------------
TOTAL INCOME........................................... 18,365,602
------------
EXPENSES
Investment management fee................................... 7,653,283
Plan of distribution fee.................................... 7,407,909
Transfer agent fees and expenses............................ 1,139,482
Custodian fees.............................................. 862,539
Shareholder reports and notices............................. 113,207
Professional fees........................................... 76,403
Registration fees........................................... 46,862
Directors' fees and expenses................................ 30,585
Organizational expenses..................................... 17,416
Other....................................................... 15,476
------------
TOTAL EXPENSES......................................... 17,363,162
------------
NET INVESTMENT INCOME.................................. 1,002,440
------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments............................................. 43,982,062
Foreign exchange transactions........................... (2,794,914)
------------
TOTAL GAIN............................................. 41,187,148
------------
Net change in unrealized appreciation on:
Investments............................................. 79,097,468
Translation of forward foreign exchange contracts, other
assets and liabilities denominated in foreign
currencies............................................ (43,896)
------------
TOTAL APPRECIATION..................................... 79,053,572
------------
NET GAIN............................................... 120,240,720
------------
NET INCREASE................................................ $121,243,160
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
OCTOBER 31, 1995 OCTOBER 31, 1994
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income....................................... $ 1,002,440 $ 1,305,840
Net realized gain........................................... 41,187,148 61,479,985
Net change in unrealized appreciation....................... 79,053,572 27,138,310
---------------- ----------------
NET INCREASE........................................... 121,243,160 89,924,135
Distributions from net realized gain........................ (60,625,845) (9,695,849)
Net increase from capital stock transactions................ 48,611,356 219,072,953
---------------- ----------------
TOTAL INCREASE......................................... 109,228,671 299,301,239
NET ASSETS:
Beginning of period......................................... 758,501,825 459,200,586
---------------- ----------------
END OF PERIOD
(INCLUDING ACCUMULATED NET INVESTMENT LOSS OF $240,553
AND $302,165, RESPECTIVELY)............................. $867,730,496 $758,501,825
---------------- ----------------
---------------- ----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1995
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter European Growth Fund Inc. (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 was incorporated in Maryland on
February 13, 1990 and commenced operations on May 31, 1990.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) an equity security listed or traded on the
New York, American or other domestic or foreign stock exchange is valued at its
latest sale price on that exchange 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 by the Directors); (2)
listed options are valued at the latest sale price on the exchange on which they
are listed unless no sales of such options have taken place that day, in which
case they will be valued at the mean between their latest bid and asked price;
(3) all other portfolio securities for which over-the-counter market quotations
are readily available are valued at the latest available bid price prior to the
time of valuation; (4) when market quotations are not readily available,
including circumstances under which it is determined by the Investment Manager
that sale and 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
Directors (valuation of debt securities for which market quotations are not
readily available may be based upon current market prices of securities which
are comparable in coupon, rating and maturity or an appropriate matrix utilizing
similar factors); and (5) short-term debt securities having a maturity date of
more than sixty days at time of purchase are valued on a mark-to-market basis
until sixty days prior to maturity and thereafter at amortized cost based on
their value on the 61st day. Short-term debt securities having a maturity date
of sixty days or less at the time of purchase are valued at amortized cost.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
Dividend income and other distributions are recorded on the ex-dividend date
except for certain dividends on foreign securities which are recorded as soon as
the Fund is informed after the ex-dividend date. Discounts are accreted over the
life of the respective securities. Interest income is accrued daily.
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1995, CONTINUED
C. OPTION ACCOUNTING PRINCIPLES -- When the Fund writes a call option, an amount
equal to the premium received is included in the Fund's Statement of Assets and
Liabilities as a liability which is subsequently marked-to-market to reflect the
current market value of the option written. If a written option either expires
or the Fund enters into a closing purchase transaction, the Fund realizes a gain
or loss without regard to any unrealized gain or loss on the underlying security
or currency and the liability related to such option is extinguished. If a
written call option is exercised, the Fund realizes a gain or loss from the sale
of the underlying security or currency and the proceeds from such sale are
increased by the premium originally received.
When the Fund purchases a call or put option, the premium paid is recorded as an
investment and is subsequently marked-to-market to reflect the current market
value. If a purchased option expires, the Fund will realize a loss to the extent
of the premium paid. If the Fund enters into a closing sale transaction, a gain
or loss is realized for the difference between the proceeds from the sale and
the cost of the option. If a put option is exercised, the cost of the security
or currency sold upon exercise will be increased by the premium originally paid.
If a call option is exercised, the cost of the security purchased upon exercise
will be increased by the premium originally paid.
D. FOREIGN CURRENCY TRANSLATION -- The books and records of the Fund are
maintained in U.S. dollars as follows: (1) the foreign currency market value of
investment securities, other assets and liabilities and forward contracts are
translated at the exchange rates prevailing at the end of the period; and (2)
purchases, sales, income and expenses are translated at the exchange rates
prevailing on the respective dates of such transactions. The resultant exchange
gains and losses are included in the Statement of Operations. Pursuant to U.S.
Federal income tax regulations, certain foreign exchange gains/losses included
in realized and unrealized gain/loss are included in or are a reduction of
ordinary income for federal income tax purposes. The Fund does not isolate that
portion of the results of operations arising as a result of changes in the
foreign exchange rates from the changes in the market prices of the securities.
E. FORWARD FOREIGN CURRENCY CONTRACTS -- The Fund may enter into forward foreign
currency contracts which are valued daily at the appropriate exchange rates. The
resultant unrealized exchange gains and losses are included in the Statement of
Operations as unrealized gain/loss on foreign exchange transactions. The Fund
records realized gains or losses on delivery of the currency or at the time the
forward contract is extinguished (compensated) by entering into a closing
transaction prior to delivery.
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1995, CONTINUED
F. 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.
G. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to its shareholders on the ex-dividend date. The amount of
dividends and distributions from net investment income and net realized capital
gains are determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for financial reporting purposes but not for tax purposes are reported as
dividends in excess of net investment income or distributions in excess of net
realized capital gains. To the extent they exceed net investment income and net
realized capital gains for tax purposes, they are reported as distributions of
paid-in-capital.
H. ORGANIZATIONAL EXPENSES -- Dean Witter InterCapital Inc. (the "Investment
Manager") paid the organizational expenses of the Fund in the amount of $150,100
which were reimbursed for the full amount thereof. Such expenses were fully
amortized as of May 30, 1995.
2. INVESTMENT MANAGEMENT AND SUB-ADVISORY AGREEMENTS
Pursuant to an Investment Management Agreement, the Fund pays a management fee,
accrued daily and payable monthly, by applying the following annual rates to the
net assets of the Fund determined as of the close of each business day: 1.0% of
the portion of average daily net assets not exceeding $500 million and 0.95% of
the portion of average daily net assets exceeding $500 million.
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund's books and
records and furnishes, at its own expense, office space, facilities, equipment,
clerical, bookkeeping and certain legal services and pays the salaries of all
personnel, including officers of the Fund who are employees of the Investment
Manager. The Investment Manager also bears the cost of telephone services, heat,
light, power and other utilities provided to the Fund.
Under a Sub-Advisory Agreement between Morgan Grenfell Investment Services
Limited (the "Sub-Advisor") and the Investment Manager, the Sub-Advisor provides
the Fund with investment advice
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1995, CONTINUED
and portfolio management relating to the Fund's investments in securities,
subject to the overall supervision of the Investment Manager. As compensation
for its services provided pursuant to the Sub-Advisory Agreement, the Investment
Manager pays the Sub-Advisor compensation equal to 40% of its monthly
compensation.
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Dean Witter Distributors Inc. (the
"Distributor"), an affiliate of the Investment Manager. The Fund has adopted a
Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act pursuant
to which the Fund pays the Distributor compensation, accrued daily and payable
monthly, at an annual rate of 1.0% of the lesser of: (a) the average daily
aggregate gross sales of the Fund's shares since the Fund's inception (not
including reinvestment of dividend or capital gain distributions) less the
average daily aggregate net asset value of the Fund's shares redeemed since the
Fund's inception upon which a contingent deferred sales charge has been imposed
or upon which such charge has been waived; or (b) the Fund's average daily net
assets. Amounts paid under the Plan are paid to the Distributor to compensate it
for the services provided and the expenses borne by it and others in the
distribution of the Fund's shares, including the payment of commissions for
sales of the Fund's shares and incentive compensation to, and expenses of, the
account executives of Dean Witter Reynolds Inc. ("DWR"), an affiliate of the
Investment Manager and Distributor, and other employees or selected dealers who
engage in or support distribution of the Fund's shares or who service
shareholder accounts, including overhead and telephone expenses, printing and
distribution of prospectuses and reports used in connection with the offering of
the Fund's shares to other than current shareholders and preparation and
printing and distribution of sales literature and advertising materials. In
addition, the Distributor may be compensated under the Plan for its opportunity
costs in advancing such amounts, which compensation would be in the form of a
carrying charge on any unreimbursed expenses incurred by the Distributor.
Provided that the Plan continues in effect, any cumulative expenses incurred but
not yet recovered, may be recovered through future distribution fees from the
Fund and contingent deferred sales charges from the Fund's shareholders.
The Distributor has informed the Fund that for the year ended October 31, 1995,
it received approximately $1,628,000 in contingent deferred sales charges from
certain redemptions of the Fund's shares. The Fund's shareholders pay such
charges which are not an expense of the Fund.
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1995, 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, 1995 aggregated
$459,420,120 and $512,721,461, respectively.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At October 31, 1995, the Fund had
transfer agent fees and expenses payable of approximately $1,139,500.
The Fund has an unfunded noncontributory defined benefit pension plan covering
all independent Directors of the Fund who will have served as independent
Directors/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,
1995 included in Directors' fees and expenses in the Statement of Operations
amounted to $8,909. At October 31, 1995, the Fund had an accrued pension
liability of $53,242 which is included in accrued expenses in the Statement of
Assets and Liabilities.
5. CAPITAL STOCK
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31, 1994
---------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
Sold............................................................. 15,721,889 $ 209,149,980 29,930,054 $375,870,856
Reinvestment of distributions.................................... 4,855,138 56,984,815 746,489 9,137,027
----------- -------------- ----------- ------------
20,577,027 266,134,795 30,676,543 385,007,883
Repurchased...................................................... (16,689,142) (217,523,439) (13,166,728) (165,934,930)
----------- -------------- ----------- ------------
Net increase..................................................... 3,887,885 $ 48,611,356 17,509,815 $219,072,953
----------- -------------- ----------- ------------
----------- -------------- ----------- ------------
</TABLE>
6. FEDERAL INCOME TAX STATUS
As of October 31, 1995, the Fund had temporary book/tax differences primarily
attributable to capital loss deferrals on wash sales and permanent book/tax
differences primarily attributable to a net operating loss and foreign currency
losses. To reflect reclassifications arising from permanent book/ tax
differences for the year ended October 31, 1995, accumulated net investment loss
was charged $940,828, paid-in-capital was charged $1,953,102 and accumulated
undistributed net realized gain was credited $2,893,930.
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1995, CONTINUED
7. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS
The Fund may enter into forward foreign currency contracts ("forward contracts")
to facilitate settlement of foreign currency denominated portfolio transactions
or to manage foreign currency exposure associated with foreign currency
denominated securities.
At October 31, 1995, there were no outstanding forward contracts other than
those used to facilitate settlement of foreign currency denominated portfolio
transactions.
Forward contracts involve elements of market risk in excess of the amounts
reflected in the Statement of Assets and Liabilities. The Fund bears the risk of
an unfavorable change in the foreign exchange rates underlying the forward
contracts. Risks may also arise upon entering into these contracts from the
potential inability of the counterparties to meet the terms of their contracts.
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of capital stock outstanding
throughout each period:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED OCTOBER 31
--------------------------------
1995 1994 1993
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period..................................................... $ 13.49 $ 11.86 $ 8.57
---------- --------- ---------
Net investment income (loss)............................................................. 0.02 0.02 (0.01)
Net realized and unrealized gain (loss).................................................. 2.00 1.84 3.30
---------- --------- ---------
Total from investment operations......................................................... 2.02 1.86 3.29
---------- --------- ---------
Less dividends and distributions from:
Net investment income................................................................. -- -- --
Net realized gain..................................................................... (1.07) (0.23) --
---------- --------- ---------
Total dividends and distributions........................................................ (1.07) (0.23) --
---------- --------- ---------
Net asset value, end of period........................................................... $ 14.44 $ 13.49 $ 11.86
---------- --------- ---------
---------- --------- ---------
TOTAL INVESTMENT RETURN+................................................................. 16.83% 15.61% 38.74%
RATIOS TO AVERAGE NET ASSETS:
Expenses................................................................................. 2.23% 2.27% 2.38%
Net investment income (loss)............................................................. 0.13% 0.21% (0.09)%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands.................................................. $867,730 $758,502 $459,201
Portfolio turnover rate.................................................................. 61% 72% 120%
<CAPTION>
FOR THE
OCTOBER
1992 1991 31, 1990
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period..................................................... $ 9.22 $ 9.23 $ 10.00
--------- --------- ---------
Net investment income (loss)............................................................. 0.01 0.05 0.05
Net realized and unrealized gain (loss).................................................. (0.23) 0.07 (0.82)
--------- --------- ---------
Total from investment operations......................................................... (0.22) 0.12 (0.77)
--------- --------- ---------
Less dividends and distributions from:
Net investment income................................................................. (0.03) (0.07) --
Net realized gain..................................................................... (0.40) (0.06) --
--------- --------- ---------
Total dividends and distributions........................................................ (0.43) (0.13) --
--------- --------- ---------
Net asset value, end of period........................................................... $ 8.57 $ 9.22 $ 9.23
--------- --------- ---------
--------- --------- ---------
TOTAL INVESTMENT RETURN+................................................................. (2.39)% 1.33% (7.70)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses................................................................................. 2.40% 2.44% 2.45%(2)
Net investment income (loss)............................................................. 0.11% 0.51% 1.52%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands.................................................. $296,548 $315,944 $303,872
Portfolio turnover rate.................................................................. 116% 111% 36%(1)
<FN>
- ---------------------
* Commencement of operations.
+ Does not reflect the deduction of sales charge.
(1) Not annualized.
(2) Annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
OF DEAN WITTER EUROPEAN GROWTH FUND INC.
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Dean Witter European Growth Fund
Inc. (the "Fund") at October 31, 1995, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the five years in the
period then ended and for the period May 31, 1990 (commencement of operations)
through October 31, 1990, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 1995 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable basis
for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
DECEMBER 11, 1995
- --------------------------------------------------------------------------------
1995 FEDERAL TAX NOTICE (UNAUDITED)
During the year ended October 31, 1995, Fund paid to shareholders
$0.22 per share from long-term capital gains.
<PAGE>
BOARD OF DIRECTORS
Jack F. Bennett
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. Manuel H. Johnson
Paul Kolton
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
Charles A. Fiumefreddo
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Sheldon Curtis
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
Thomas F. Caloia
TREASURER
TRANSFER AGENT
Dean Witter Trust Company
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Dean Witter InterCapital Inc.
Two World Trade Center
New York, New York 10048
SUB-ADVISOR
Morgan Grenfell Investment Services Limited
This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and directors,
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.
DEAN WITTER
EUROPEAN
GROWTH FUND
[Graphic]
ANNUAL REPORT
OCTOBER 31, 1995
<PAGE>
DEAN WITTER EUROPEAN GROWTH
GROWTH OF $10,000
DATE TOTAL MSCI WORLD INDEX
- ---------------------------------------------------------------
June 1, 1990 $ 10,000 $ 10,000
- ---------------------------------------------------------------
October 31, 1990 $ 9,230 $ 8,742
- ---------------------------------------------------------------
October 31, 1991 $ 9,353 $ 9,921
- ---------------------------------------------------------------
October 31, 1992 $ 9,129 $ 9,212
- ---------------------------------------------------------------
October 31, 1993 $ 12,666 $ 11,492
- ---------------------------------------------------------------
October 31, 1994 $ 14,643 $ 12,170
- ---------------------------------------------------------------
October 31, 1995 $ 17,008 (3) $ 13,099
- ---------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
1 YEAR 5 YEARS LIFE OF FUND
-------------------------------
16.83 (1) 13.14 (1) 10.42 (1)
-------------------------------
11.83 (2) 12.89 (2) 10.30 (2)
-------------------------------
-------------------------
_______FUND______MSCI (4)
-------------------------
Past performance is not predictive of future returns.
- -----------------------------------------------------
(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 contingent deferred sales charge (CDSC) (1 year-5%,5
years - 2%, since inception - 1%). See the Fund's current prospectus for
complete details on fees and sales charges.
(3) Closing value after the deduction of a 1% CDSC, assuming a complete
redemption on October 31, 1995,
(4) The Morgan Stanley Capital International World Index (MSCI) measures
performance for a diverse range of global stock markets including the U.S.,
Canada, Europe, Australia, New Zealand and the Far East. The index does
not include any expenses, fees or charges or reinvestment of dividends, The
Index is unmanaged and should not be considered an investment.
