<PAGE>
PROSPECTUS - FEBRUARY 22, 1999
Morgan Stanley Dean Witter
PACIFIC GROWTH FUND
[COVER PHOTO]
A MUTUAL FUND THAT SEEKS TO MAXIMIZE THE
CAPITAL APPRECIATION OF ITS INVESTMENTS
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon
the adequacy of this PROSPECTUS. Any representation to the contrary is a
criminal offense.
<PAGE>
CONTENTS
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<S> <C> <C>
The Fund Investment Objective.................................. 1
Principal Investment Strategies....................... 1
Principal Risks....................................... 1
Past Performance...................................... 3
Fees and Expenses..................................... 4
Additional Investment Strategy Information............ 5
Additional Risk Information........................... 6
Fund Management....................................... 6
Shareholder Information Pricing Fund Shares................................... 8
How to Buy Shares..................................... 8
How to Exchange Shares................................ 10
How to Sell Shares.................................... 11
Distributions......................................... 13
Tax Consequences...................................... 14
Share Class Arrangements.............................. 14
Financial Highlights ...................................................... 22
Our Family of Funds ...................................................... Inside Back Cover
THIS PROSPECTUS CONTAINS IMPORTANT INFORMATION ABOUT THE FUND.
PLEASE READ IT CAREFULLY AND KEEP IT FOR FUTURE REFERENCE.
</TABLE>
FUND CATEGORY
---------------------------
/X/ GROWTH
/ / Growth and Income
/ / Income
/ / Money Market
<PAGE>
(SIDEBAR)
CAPITAL APPRECIATION
AN INVESTMENT OBJECTIVE HAVING THE GOAL OF SELECTING SECURITIES WITH THE
POTENTIAL TO RISE IN VALUE RATHER THAN PAY OUT INCOME.
(END SIDEBAR)
THE FUND
ICON INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
Morgan Stanley Dean Witter Pacific Growth Fund is a mutual fund that
seeks to maximize the capital appreciation of its investments. There
is no guarantee that the Fund will achieve this objective.
ICON PRINCIPAL INVESTMENT STRATEGIES
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The Fund will normally invest at least 65% of its assets in common
stocks and other securities of companies which have a principal place
of business in, or which derive a majority of their revenues from
business in, Asia, Australia and New Zealand. The principal Asian
countries include: Japan, Malaysia, Singapore, Hong Kong, Thailand,
the Philippines, India, Indonesia, Taiwan and South Korea. The Fund's
assets will be invested in at least three countries. The Fund,
however, may invest more than 25% of its assets in Japan, Hong Kong,
Malaysia, South Korea and/or Taiwan. Thus, the
investment performance of the Fund may be subject to the social,
political and economic events occurring in those countries to a
greater extent than other countries.
The Fund's "Investment Manager," Morgan Stanley Dean Witter Advisors
Inc., and its "Sub-Advisor" - Morgan Stanley Dean Witter Investment
Management Inc. - generally invest Fund assets in companies they
believe have a high rate of earnings growth potential. They also will
select securities which, in their view, possess both on an absolute
basis and as compared with other securities around the world,
attractive price/earnings, price/cash flow and price/revenue ratios.
Common stock is a share ownership or equity interest in a
corporation. It may or may not pay dividends, as some companies
reinvest all of their profits back into their businesses, while
others pay out some of their profits to shareholders as dividends.
In pursuing the Fund's investment objective, the Investment Manager
and/or Sub-Advisor have considerable leeway in deciding which
investments they buy, hold or sell on a day-to-day basis - and which
trading strategies they use. For example, the Investment Manager
and/or Sub-Advisor in their discretion may determine to use some
permitted trading strategies while not using others. In addition to
the securities discussed above, the Fund may also invest in
securities of other investment companies, forward currency contracts
and options on currencies. For more information about these
investment strategies, see Additional Investment Strategy
Information.
ICON PRINCIPAL RISKS
- --------------------------------------------------------------------------------
The Fund's share price will fluctuate with changes in the market
value of the Fund's portfolio securities. When you sell Fund shares,
they may be worth less than what you paid for them and, accordingly,
you can lose money investing in this Fund.
1
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A principal risk of investing in the Fund is associated with its
foreign stock investments. In general, stock values fluctuate in
response to activities specific to the company as well as general
market, economic and political conditions. Stock prices can fluctuate
widely in response to these factors.
FOREIGN SECURITIES. The Fund's investments in foreign securities
(including depository receipts) involve risks that are in addition to
the risks associated with domestic securities. One additional risk is
currency risk. While the price of Fund shares is quoted in U.S.
dollars, the Fund generally converts U.S. dollars to a foreign
market's local currency to purchase a security in that market. If the
value of that local currency falls relative to the U.S. dollar, the
U.S. dollar value of the foreign security will decrease. This is true
even if the foreign security's local price remains unchanged.
Foreign securities also have risks related to economic and political
developments abroad, including expropriations, confiscatory taxation,
exchange control regulation, limitation on the use or transfer of
Fund assets and any effects of foreign social, economic or political
instability. In particular, adverse political or economic
developments in the Pacific region and/or a particular country in
which the Fund invests could cause a substantial decline in value of
the portfolio. Foreign companies, in general, are not subject to the
regulatory requirements of U.S. companies and, as such, there may be
less publicly available information about these companies. Moreover,
foreign accounting, auditing and financial reporting standards
generally are different from those applicable to U.S. companies.
Finally, in the event of a default of any foreign debt obligations,
it may be more difficult for the Fund to obtain or enforce a judgment
against the issuers of the securities.
Securities of foreign issuers may be less liquid than comparable
securities of U.S. issuers and, as such, their price changes may be
more volatile. Furthermore, foreign exchanges and broker-dealers are
generally subject to less government and exchange scrutiny and
regulation than their U.S. counterparts. In addition, differences in
clearance and settlement procedures in foreign markets may occasion
delays in settlements of the Fund's trades effected in those markets.
Delays in purchasing securities may result in the Fund losing
investment opportunities. The inability to dispose of foreign
securities due to settlement delays could result in losses to the
Fund due to subsequent declines in value of the securities.
The foreign securities in which the Fund invests may be issued by
companies located in developing countries. Compared to the United
States and other developed countries, developing countries may have
relatively unstable governments, economies based on only a few
industries and securities markets that trade a small number of
securities. Prices of these securities tend to be especially volatile
and, in the past, securities in these countries have been
characterized by greater potential loss (as well as gain) than
securities of companies located in developed countries.
OTHER RISKS. The performance of the Fund also will depend on whether
the Investment Manager and/or Sub-Advisor are successful in pursuing
the Fund's investment strategy. The Fund is also subject to other
risks from its permissible
2
<PAGE>
investments, including the risks associated with its investments in
the securities of other investment companies, forward currency
contracts and options on currencies. For more information about these
risks, see the "Additional Risk Information" section.
Shares of the Fund are not bank deposits and are not guaranteed or
(SIDEBAR) insured by any bank, governmental entity, or the FDIC.
ANNUAL TOTAL RETURNS
THIS CHART SHOWS HOW THE PERFORMANCE OF THE FUND'S CLASS B SHARES HAS VARIED
FROM YEAR TO YEAR DURING THE LIFE OF THE FUND.
AVERAGE ANNUAL
TOTAL RETURNS
THIS TABLE COMPARES THE FUND'S AVERAGE ANNUAL RETURNS WITH THOSE OF A BROAD
MEASURE OF MARKET PERFORMANCE OVER TIME. THE FUND'S RETURNS INCLUDE THE MAXIMUM
APPLICABLE SALES CHARGE FOR EACH CLASS AND ASSUME YOU SOLD YOUR SHARES AT THE
END OF EACH PERIOD.
(END SIDEBAR)
ICON PAST PERFORMANCE
- --------------------------------------------------------------------------------
The bar chart and table below provide some indication of the risks of
investing in the Fund. The Fund's past performance does not indicate
how the Fund will perform in the future.
ANNUAL TOTAL RETURNS - CALENDAR YEARS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
1990* -1.11%
'91 20.40%
'92 4.46%
'93 94.71%
'94 -17.52%
'95 3.96%
'96 4.83%
'97 -38.81%
'98 -10.52%
</TABLE>
The bar chart reflects the performance of Class B shares; the performance of the
other Classes will differ because the Classes have different ongoing fees. The
performance information in the bar chart does not reflect the deduction of sales
charges; if these amounts were reflected, returns would be less than shown.
* For the period November 30, 1990 through December 31, 1990.
During the periods shown in the bar chart, the highest return for a calendar
quarter was 35.58% (quarter ended December 31, 1993) and the lowest return for a
calendar quarter was -28.63% (quarter ended December 31, 1997).
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIOD ENDED THE 1998 CALENDAR YEAR)
<TABLE>
<CAPTION>
LIFE OF FUND
PAST 1 YEAR PAST 5 YEARS (SINCE 11/30/90)
<S> <C> <C> <C>
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Class A -14.59% -- --
- ----------------------------------------------------------------------------------
Class B(1) -14.99% -13.53% 2.20%
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Class C -11.11% -- --
- ----------------------------------------------------------------------------------
Class D -9.68% -- --
- ----------------------------------------------------------------------------------
MSCI World Index(2) 24.80% 16.19% 14.65%
- ----------------------------------------------------------------------------------
Lipper Pacific Region Funds
Average(3) -5.87% -7.21% 2.70%
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</TABLE>
1 Prior to July 28, 1997, the Fund only issued Class B shares.
2 Unlike the Fund, which invests primarily in securities of the markets of
the Pacific Rim, the Morgan Stanley Capital International (MSCI) World
Index measures performance from a diverse range of global stock markets
including the U.S., Europe, Australia, New Zealand and the Far East. The
performance of the Index does not include expenes or fees, and should not
be considered an investment.
3 The Lipper Pacific Region Funds Average tracks the performance of funds
that invest in equity securities whose primary trading markets or
operations are concentrated in the Western Pacific basin region or a single
country within this region, as reported by Lipper Analytical Services.
3
<PAGE>
(SIDEBAR)
SHAREHOLDER FEES
THESE FEES ARE PAID DIRECTLY FROM YOUR INVESTMENT.
ANNUAL FUND
OPERATING EXPENSES
THESE EXPENSES ARE DEDUCTED FROM THE FUND'S ASSETS AND ARE BASED ON EXPENSES
PAID FOR THE FISCAL YEAR ENDED OCTOBER 31, 1998, RESTATED TO REFLECT A
MANAGEMENT FEE REDUCTION.
(END SIDEBAR)
ICON FEES AND EXPENSES
- --------------------------------------------------------------------------------
The Fund offers four Classes of shares: Classes A, B, C and D. Each
Class has a different combination of fees, expenses and other
features. The table below briefly describes the fees and expenses
that you may pay if you buy and hold shares of the Fund. The Fund
does not charge account or exchange fees. See the "Share Class
Arrangements" section for further fee and expense information.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS D
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES
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Maximum sales charge (load) imposed on purchases (as a
percentage of offering price) 5.25%(1) None None None
- ---------------------------------------------------------------------------------------------------------
Maximum deferred sales charge (load)
(as a percentage based on the lesser of the offering price
or net asset value at redemption) None(2) 5.00%(3) 1.00%(4) None
- ---------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES(5)
- ---------------------------------------------------------------------------------------------------------
Management fee 0.95% 0.95% 0.95% 0.95%
- ---------------------------------------------------------------------------------------------------------
Distribution and service (12b-1) fees 0.25% 1.00% 1.00% None
- ---------------------------------------------------------------------------------------------------------
Other expenses 0.65% 0.65% 0.65% 0.65%
- ---------------------------------------------------------------------------------------------------------
Total annual Fund operating expenses 1.85% 2.60% 2.60% 1.60%
- ---------------------------------------------------------------------------------------------------------
</TABLE>
1 Reduced for purchases of $25,000 and over.
2 Investments that are not subject to any sales charge at the time of
purchase are subject to a contingent deferred sales charge ("CDSC") of
1.00% that will be imposed on sales made within one year after purchase,
except for certain specific circumstances.
3 The CDSC is scaled down to 1.00% during the sixth year, reaching zero
thereafter. See "Share Class Arrangements" for a complete discussion of the
CDSC.
4 Only applicable to sales made within one year after purchase.
5 Restated to reflect a reduction in the management fee by 0.05% of the
average daily net assets which took effect when the Sub-Advisor became the
sub-advisor to the Fund.
EXAMPLE
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the Fund, your
investment has a 5% return each year, and the Fund's operating
expenses remain the same. Although your actual costs may be higher or
lower, the tables below show your costs at the end of each period
based on these assumptions depending upon whether or not you sell
your shares at the end of each period.
<TABLE>
<CAPTION>
IF YOU SOLD YOUR SHARES: IF YOU HELD YOUR SHARES:
----------------------------------------- -----------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------- -----------------------------------------
CLASS A $703 $1,076 $1,473 $2,580 $703 $1,076 $1,473 $2,580
- ---------------------------------------------------------- -----------------------------------------
CLASS B $763 $1,108 $1,550 $2,934 $263 $ 808 $1,380 $2,934
- ---------------------------------------------------------- -----------------------------------------
CLASS C $363 $ 808 $1,380 $2,934 $263 $ 808 $1,380 $2,934
- ---------------------------------------------------------- -----------------------------------------
CLASS D $163 $ 505 $ 871 $1,900 $163 $ 505 $ 871 $1,900
- ---------------------------------------------------------- -----------------------------------------
</TABLE>
4
<PAGE>
ICON ADDITIONAL INVESTMENT STRATEGY INFORMATION
- --------------------------------------------------------------------------------
This section provides additional information concerning the Fund's
principal strategies.
As discussed in the "Principal Investment Strategies" section, the
Fund will normally invest at least 65% of its assets in common stocks
and other securities of companies which have a principal place of
business in, or which derive a majority of their revenues from
business in, Asia, Australia and New Zealand. These securities mainly
will consist of equity securities, but may also include fixed-income
securities. The fixed-income securities (including zero coupon
securities) may be issued or guaranteed by the governments of
Australia, New Zealand and countries in Asia. In addition, the Fund
may invest in fixed-income securities that are, either alone or in
combination with warrants, options or other rights, convertible to
the common stock of a company.
OTHER GLOBAL SECURITIES. The Fund also may invest up to 35% of its
assets in equity and/or fixed-income and convertible securities of
companies located anywhere in the world, including the United States.
The Fund furthermore may purchase securities issued by various
agencies and instrumentalities of the U.S. Government.
INVESTMENT COMPANIES. The Fund may invest up to 10% of its assets in
securities issued by other investment companies. The Investment
Manager and/or Sub-Advisor may view these investments as necessary to
participate in certain foreign markets where foreigners are
prohibited from investing directly in the securities of individual
companies.
FORWARD CURRENCY CONTRACTS AND OPTIONS ON CURRENCIES. The Fund's
investments also may include forward currency contracts, which
involve the purchase or sale of a specific amount of foreign currency
at the current price with delivery at a specified future date. The
Fund may use these contracts to hedge against adverse price movements
in its portfolio securities and the currencies in which they are
denominated. In addition, the Fund may invest in put and call options
with respect to foreign currencies. Options may be used to seek to
protect against a decline in currency prices or an increase in prices
of currencies that may be purchased.
DEFENSIVE INVESTING. The Fund may take temporary "defensive"
positions in attempting to respond to adverse market conditions. The
Fund may invest any amount of its assets in cash or money market
instruments in a defensive posture when the Investment Manager and/or
Sub-Advisor believe it is advisable to do so. Although taking a
defensive posture is designed to protect the Fund from an anticipated
market downturn, it could have the effect of reducing the benefit
from any upswing in the market.
The percentage limitations relating to the composition of the Fund's
portfolio apply at the time the Fund acquires an investment.
Subsequent percentage changes that result from market fluctuations or
changes in assets will not require the Fund to sell any portfolio
security. The Fund may change its principal investment strategies
without shareholder approval; however, you would be notified of any
changes.
5
<PAGE>
ICON ADDITIONAL RISK INFORMATION
- --------------------------------------------------------------------------------
As discussed in the "Principal Risks" section, a principal risk of
investing in the Fund is associated with its foreign stock
investments. This section provides additional information regarding
the principal risks of investing in the Fund.
FIXED-INCOME SECURITIES. Principal risks of investing in the Fund are
associated with its fixed-income investments. All fixed-income
securities, such as corporate debt, are subject to two types of risk:
credit risk and interest rate risk. Credit risk refers to the
possibility that the issuer of a security will be unable to make
interest payments and/ or repay the principal on its debt.
Interest rate risk refers to fluctuations in the value of a
fixed-income security resulting from changes in the general level of
interest rates. When the general level of interest rates goes up, the
prices of most fixed-income securities go down. When the general
level of interest rates goes down, the prices of most fixed-income
securities go up. (Zero coupon securities are typically subject to
greater price fluctuations than comparable securities that pay
interest.)
FORWARD CURRENCY CONTRACTS AND OPTIONS ON CURRENCIES. The Fund's
participation in forward currency contracts also involves risks. If
the Investment Manager and/or Sub-Advisor employ a strategy that does
not correlate well with the Fund's investments or the currencies in
which the investments are denominated, currency contracts could
result in a loss. The contracts also may increase the Fund's
volatility and may involve a significant risk. In addition, if the
Fund invests in options on currencies, its participation in these
markets would subject the Fund's portfolio to certain risks. The
Investment Manager's and/or Sub-Advisor's predictions of movements in
the direction of the currency markets may be inaccurate, and the
adverse consequences to the Fund (e.g., a reduction in the Fund's net
asset value or a reduction in the amount of income available for
distribution) may leave the Fund in a worse position than if these
strategies were not used. The options may be over-the-counter
options, which are options negotiated with dealers; there is no
secondary market for these investments.
YEAR 2000. The Fund could be adversely affected if the computer
systems necessary for the efficient operation of the Investment
Manager, the Sub-Advisor, the Fund's other service providers and the
markets and individual and governmental issuers in which the Fund
invests do not properly process and calculate date-related
information from and after January 1, 2000. While year 2000-related
computer problems could have a negative effect on the Fund, the
Investment Manager, the Sub-Advisor and affiliates are working hard
to avoid any problems and to obtain assurances from their service
providers that they are taking similar steps.
ICON FUND MANAGEMENT
- --------------------------------------------------------------------------------
The Fund has retained the Investment Manager - Morgan Stanley Dean
Witter Advisors Inc. - to provide administrative services, manage its
business affairs and supervise the investment of its assets. The
Investment Manager has, in turn,
6
<PAGE>
(SIDEBAR)
MORGAN STANLEY DEAN WITTER ADVISORS INC.
THE INVESTMENT MANAGER IS WIDELY RECOGNIZED AS A LEADER IN THE MUTUAL FUND
INDUSTRY AND TOGETHER WITH MORGAN STANLEY DEAN WITTER SERVICES COMPANY INC., ITS
WHOLLY-OWNED SUBSIDIARY, HAS MORE THAN $127 BILLION IN ASSETS UNDER MANAGEMENT
OR ADMINISTRATION AS OF JANUARY 31, 1999.
(END SIDEBAR)
contracted with the Sub-Advisor - Morgan Stanley Dean Witter Investment
Management Inc. - to invest the Fund's assets, including the placing of orders
for the purchase and sale of portfolio securities. Morgan Stanley Dean Witter
Investment Management Inc. has been the Sub-Advisor of the Fund since November
1, 1998. Prior to that, Morgan Grenfell Investment Services Limited was the
Fund's Sub-Advisor. The Investment Manager is a wholly-owned subsidiary of
Morgan Stanley Dean Witter & Co., a preeminent global financial services firm
that maintains leading market positions in each of its three primary businesses:
securities, asset management and credit services. Its main business office is
located at Two World Trade Center, New York, New York 10048.
The Sub-Advisor, together with its institutional investment management
affiliates, manages more than $150 billion primarily for employee benefit plans,
investment companies, endowments, foundations and wealthy individuals.
The Sub-Advisor also is a subsidiary of Morgan Stanley Dean Witter
& Co. Its main business office is located at 1221 Avenue of the
Americas, New York, New York 10020.
Timothy Jensen, Principal of the Sub-Advisor, Ashutosh Sinha, Vice
President of the Sub-Advisor, and John R. Alkire, Managing Director
of the Sub-Advisor and President of Morgan Stanley Investment
Advisory, Japan, each a member of the Sub-Advisor's emerging
markets group, are the primary portfolio managers of the Fund.
Prior to joining the Sub-Advisor in January 1998, Mr. Jensen was a
Partner at Ardsley Partners (July 1994-December 1997) and earlier
was a Vice President of Bankers Trust (June 1993-June 1994). Prior
to joining the Sub-Advisor in June 1995, Mr. Sinha was an analyst
at SBI Funds Management Ltd. (1993-1995).
The Fund pays the Investment Manager a monthly management fee as
full compensation for the services and facilities furnished to the
Fund, and for Fund expenses assumed by the Investment Manager. The
fee is based on the Fund's average daily net assets. The Investment
Manager pays the Sub-Advisor monthly compensation equal to 40% of
this fee. For the fiscal year ended October 31, 1998, the Fund
accrued total compensation to the Investment Manager amounting to
1.00% of the Fund's average daily net assets. (When the Sub-Advisor
became an investment adviser to the Fund, the fee rate was reduced
by 0.05% of the Fund's average daily net assets.)
7
<PAGE>
(SIDEBAR)
CONTACTING A
FINANCIAL ADVISOR
IF YOU ARE NEW TO THE MORGAN STANLEY DEAN WITTER FAMILY OF FUNDS AND WOULD LIKE
TO CONTACT A FINANCIAL ADVISOR, CALL (800) THE-DEAN FOR THE TELEPHONE NUMBER OF
THE MORGAN STANLEY DEAN WITTER OFFICE NEAREST YOU. YOU MAY ALSO ACCESS OUR
OFFICE LOCATOR ON OUR INTERNET SITE AT:
WWW.DEANWITTER.COM/FUNDS
(END SIDEBAR)
SHAREHOLDER INFORMATION
ICON PRICING FUND SHARES
- --------------------------------------------------------------------------------
The price of Fund shares (excluding sales charges), called "net asset
value," is based on the value of the Fund's portfolio securities.
While the assets of each Class are invested in a single portfolio of
securities, the net asset value of each Class will differ because the
Classes have different ongoing distribution fees.
The net asset value per share of the Fund is determined once daily at
4 p.m. Eastern time on each day that the New York Stock Exchange is
open (or, on days when the New York Stock Exchange closes prior to
4:00 p.m., at such earlier time). Shares will not be priced on days
that the New York Stock Exchange is closed.
The value of the Fund's portfolio securities is based on the
securities' market price when available. When a market price is not
readily available, including circumstances under which the Investment
Manager and/or Sub-Advisor determines that a security's market price
is not accurate, a portfolio security is valued at its fair value, as
determined under procedures established by the Fund's Board of
Directors. In these cases, the Fund's net asset value will reflect
certain portfolio securities' fair value rather than their market
price. Due to the Fund's holdings of securities that are primarily
listed on foreign exchanges, the values of the Fund's portfolio
securities may change on days when you will not be able to purchase
or sell your shares.
An exception to the Fund's general policy of using market prices
concerns its short-term debt portfolio securities. Debt securities
with remaining maturities of sixty days or less at the time of
purchase are valued at amortized cost. However, if the cost does not
reflect the securities' market value, these securities will be valued
at their fair value.
ICON HOW TO BUY SHARES
- --------------------------------------------------------------------------------
You may open a new account to buy Fund shares or buy additional
Fund shares for an existing account by contacting your Morgan
Stanley Dean Witter Financial Advisor or other authorized financial
representative. Your Financial Advisor will assist you,
step-by-step, with the procedures to invest in the Fund. You may
also purchase shares directly by calling the Fund's transfer agent
and requesting an application.
Because every investor has different immediate
financial needs and long-term investment goals,
the Fund offers investors four Classes of
shares: Classes A, B, C and D. Class D shares
are only offered to a limited group of
investors. Each Class of shares offers a
distinct structure of sales charges,
distribution and service fees, and other
features that are designed to address a variety
of needs. Your Financial Advisor or other
authorized financial representative can help you
decide which Class may be most appropriate for
you. When purchasing Fund shares, you must
specify which Class of shares you wish to
purchase.
8
<PAGE>
When you buy Fund shares, the shares are purchased at the next
share price calculated (less any applicable front-end sales charge
for Class A shares) after we receive your investment order in
proper form. We reserve the right to reject any order for the
(SIDEBAR) purchase of Fund shares.
EASYINVEST-SM-
A PURCHASE PLAN THAT ALLOWS YOU TO TRANSFER MONEY AUTOMATICALLY FROM YOUR
CHECKING OR SAVINGS ACCOUNT OR FROM A MONEY MARKET FUND ON A SEMI-MONTHLY,
MONTHLY OR QUARTERLY BASIS. CONTACT YOUR MORGAN STANLEY DEAN WITTER FINANCIAL
ADVISOR FOR FURTHER INFORMATION ABOUT THIS SERVICE.
(END SIDEBAR)
<TABLE>
<CAPTION>
MINIMUM INVESTMENT AMOUNTS
- ------------------------------------------------------------------------------------------------
MINIMUM INVESTMENT
----------------------
INVESTMENT OPTIONS INITIAL ADDITIONAL
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
Regular Accounts $ 1,000 $ 100
- ------------------------------------------------------------------------------------------------
Individual Retirement Accounts: Regular IRAs $ 1,000 $ 100
Education IRAs $500 $ 100
- ------------------------------------------------------------------------------------------------
EASYINVEST-SM- (Automatically from your checking
or savings account or Money Market
Fund) $100* $ 100*
- ------------------------------------------------------------------------------------------------
</TABLE>
* Provided your schedule of investments totals $1,000 in twelve months.
There is no minimum investment amount if you purchase Fund shares
through: (1) the Investment Manager's mutual fund asset allocation
plan, (2) a program, approved by the Fund's distributor, in which you
pay an asset-based fee for advisory, administrative and/or brokerage
services, or (3) employer-sponsored employee benefit plan accounts.
INVESTMENT OPTIONS FOR CERTAIN INSTITUTIONAL AND OTHER
INVESTORS/CLASS D SHARES. To be eligible to purchase Class D shares,
you must qualify under one of the investor categories specified in
the "Share Class Arrangements" section of this PROSPECTUS.
THREE DAY SETTLEMENT. Fund shares are sold through the Fund's
distributor, Morgan Stanley Dean Witter Distributors Inc., on a
normal three business day basis; that is, your payment for Fund
shares is due on the third business day (settlement day) after you
place a purchase order.
SUBSEQUENT INVESTMENTS SENT DIRECTLY TO THE FUND. In addition to
buying additional Fund shares for an existing account by contacting
your Morgan Stanley Dean Witter Financial Advisor, you may send a
check directly to the Fund. To buy additional shares in this manner:
- Write a "letter of instruction" to the Fund specifying the name(s)
on the account, the account number, the social security or tax
identification number, the Class of shares you wish to purchase and
the investment amount (which would include any applicable front-end
sales charge). The letter must be signed by the account owner(s).
- Make out a check for the total amount payable to: Morgan Stanley
Dean Witter Pacific Growth Fund.
- Mail the letter and check to Morgan Stanley Dean Witter Trust FSB
at P.O. Box 1040, Jersey City, NJ 07303.
9
<PAGE>
ICON HOW TO EXCHANGE SHARES
- --------------------------------------------------------------------------------
PERMISSIBLE FUND EXCHANGES. You may exchange shares of any Class of
the Fund for the same Class of any other continuously offered
Multi-Class Fund, or for shares of a No-Load Fund, Money Market Fund
or Short-Term U.S. Treasury Trust, without the imposition of an
exchange fee. See the inside back cover of this PROSPECTUS for each
Morgan Stanley Dean Witter Fund's designation as a Multi-Class Fund,
No-Load Fund or Money Market Fund. If a Morgan Stanley Dean Witter
Fund is not listed, consult the inside back cover of that Fund's
PROSPECTUS for its designation. For purposes of exchanges, shares of
FSC Funds (subject to a front-end sales charge) are treated as Class
A shares of a Multi-Class Fund.
Exchanges may be made after shares of the Fund acquired by purchase
have been held for thirty days. There is no waiting period for
exchanges of shares acquired by exchange or dividend reinvestment.
The current PROSPECTUS for each fund describes its investment
objective(s), policies and investment minimums, and should be read
before investment.
EXCHANGE PROCEDURES. You can process an exchange by contacting your
Morgan Stanley Dean Witter Financial Advisor or other authorized
financial representative. Otherwise, you must forward an exchange
privilege authorization form to the Fund's transfer agent - Morgan
Stanley Dean Witter Trust FSB - and then write the transfer agent or
call (800) 869-NEWS to place an exchange order. You can obtain an
exchange privilege authorization form by contacting your Financial
Advisor or other authorized financial representative or by calling
(800) 869-NEWS. If you hold share certificates, no exchanges may be
processed until we have received all applicable share certificates.
An exchange to any Morgan Stanley Dean Witter Fund (except a Money
Market Fund) is made on the basis of the next calculated net asset
values of the Funds involved after the exchange instructions are
accepted. When exchanging into a Money Market Fund, the Fund's shares
are sold at their next calculated net asset value and the Money
Market Fund's shares are purchased at their net asset value on the
following business day.
The Fund may terminate or revise the exchange privilege upon required
notice. Certain services normally available to shareholders of Money
Market Funds, including the check writing privilege, are not
available for Money Market Fund shares you acquire in an exchange.
TELEPHONE EXCHANGES. For your protection when calling Morgan Stanley
Dean Witter Trust FSB, we will employ reasonable procedures to
confirm that exchange instructions communicated over the telephone
are genuine. These procedures may include requiring various forms of
personal identification such as name, mailing address, social
security or other tax identification number. Telephone instructions
also may be recorded.
Telephone instructions will be accepted if received by the Fund's
transfer agent between 9:00 a.m. and 4:00 p.m. Eastern time, on any
day the New York Stock
10
<PAGE>
Exchange is open for business. During periods of drastic economic or
market changes, it is possible that the telephone exchange procedures
may be difficult to implement, although this has not been the case
with the Fund in the past.
MARGIN ACCOUNTS. If you have pledged your Fund shares in a margin
account, contact your Morgan Stanley Dean Witter Financial Advisor or
other authorized financial representative regarding restrictions on
the exchange of such shares.
TAX CONSIDERATIONS OF EXCHANGES. If you exchange shares of the Fund
for shares of another Morgan Stanley Dean Witter Fund there are
important tax considerations. For tax purposes, the exchange out of
the Fund is considered a sale of Fund shares - and the exchange into
the other Fund is considered a purchase. As a result, you may realize
a capital gain or loss.
You should review the "Tax Consequences" section and consult your own
tax professional about the tax consequences of an exchange.
FREQUENT EXCHANGES. A pattern of frequent exchanges may result in the
Fund limiting or prohibiting, at its discretion, additional purchases
and/or exchanges. The Fund will notify you in advance of limiting
your exchange privileges.
CDSC CALCULATIONS ON EXCHANGES. See the "Share Class Arrangements"
section of this PROSPECTUS for a discussion of how applicable
contingent deferred sales charges (CDSCs) are calculated for shares
of one Morgan Stanley Dean Witter Fund that are exchanged for shares
of another.
For further information regarding exchange privileges, you should
contact your Morgan Stanley Dean Witter Financial Advisor or call
(800) 869-NEWS.
ICON HOW TO SELL SHARES
- --------------------------------------------------------------------------------
You can sell some or all of your Fund shares at any time. If you sell
Class A, Class B or Class C shares, your net sale proceeds are
reduced by the amount of any applicable CDSC. Your shares will be
sold at the next price calculated after we receive your order to sell
as described below.
<TABLE>
<CAPTION>
OPTIONS PROCEDURES
<S> <C>
- --------------------------------------------------------------------------------
Contact your To sell (redeem) your shares, simply call your Morgan
Financial Advisor Stanley Dean Witter Financial Advisor or other authorized
financial representative.
------------------------------------------------------------
ICON Payment will be sent to the address to which the account is
registered or deposited in your brokerage account.
- --------------------------------------------------------------------------------
By Letter You can also sell your shares by writing a "letter of
instruction" that includes:
ICON
- your account number;
- the dollar amount or the number of shares you wish to
sell;
- the Class of shares you wish to sell; and
- the signature of each owner as it appears on the account.
------------------------------------------------------------
</TABLE>
11
<PAGE>
(SIDEBAR)
SYSTEMATIC WITHDRAWAL PLAN
THIS PLAN ALLOWS YOU TO WITHDRAW MONEY AUTOMATICALLY FROM YOUR FUND ACCOUNT AT
REGULAR INTERVALS. CONTACT YOUR MORGAN STANLEY DEAN WITTER FINANCIAL ADVISOR FOR
MORE DETAILS.
(END SIDEBAR)
<TABLE>
<CAPTION>
OPTIONS PROCEDURES
<S> <C>
- --------------------------------------------------------------------------------
If you are requesting payment to anyone other than the
registered owner(s) or that payment be sent to any address
other than the address of the registered owner(s) or
pre-designated bank account, you will need a signature
guarantee. You can obtain a signature guarantee from an
eligible guarantor acceptable to Morgan Stanley Dean Witter
Trust FSB. (You should contact Morgan Stanley Dean Witter
Trust FSB at (800) 869-NEWS for a determination as to
whether a particular institution is an eligible guarantor.)
A notary public CANNOT provide a signature guarantee.
Additional documentation may be required for shares held by
a corporation, partnership, trustee or executor.
- --------------------------------------------------------------------------------
Mail the letter to Morgan Stanley Dean Witter Trust FSB at
P.O. Box 983, Jersey City, New Jersey 07303. If you hold
share certificates, you must return the certificates, along
with the letter and any required additional documentation.
------------------------------------------------------------
A check will be mailed to the name(s) and address in which
the account is registered, or otherwise according to your
instructions.
- --------------------------------------------------------------------------------
Systematic If your investment in all of the Morgan Stanley Dean Witter
Withdrawal Plan Family of Funds has a total market value of at least
$10,000, you may elect to withdraw amounts of $25 or more,
or in any whole percentage of a Fund's balance (provided the
amount is at least $25), on a monthly, quarterly,
semi-annual or annual basis, from any Fund with a balance of
at least $1,000. Each time you add a Fund to the plan, you
must meet the plan requirements.
------------------------------------------------------------
Amounts withdrawn are subject to any applicable CDSC. A CDSC
may be waived under certain circumstances. See the Class B
waiver categories listed in the "Share Class Arrangements"
section of this PROSPECTUS.
------------------------------------------------------------
To sign up for the Systematic Withdrawal Plan, contact your
Morgan Stanley Dean Witter Financial Advisor or call (800)
869-NEWS. You may terminate or suspend your plan at any
time. Please remember that withdrawals from the plan are
sales of shares, not Fund "distributions," and ultimately
may exhaust your account balance. The Fund may terminate or
revise the plan at any time.
------------------------------------------------------------
</TABLE>
PAYMENT FOR SOLD SHARES. After we receive your complete instructions
to sell as described above, a check will be mailed to you within
seven days, although we will attempt to make payment within one
business day. Payment may also be sent to your brokerage account.
Payment may be postponed or the right to sell your shares suspended
under unusual circumstances. If you request to sell shares that were
recently purchased by check, payment of the sale proceeds may be
delayed for the minimum time needed to verify that the check has been
honored (not more than fifteen days from the time we receive the
check).
TAX CONSIDERATIONS. Normally, your sale of Fund shares is subject to
federal and state income tax. You should review the "Tax
Consequences" section of this PROSPECTUS and consult your own tax
professional about the tax consequences of a sale.
12
<PAGE>
(SIDEBAR)
TARGETED DIVIDENDS-SM-
YOU MAY SELECT TO HAVE YOUR FUND DISTRIBUTIONS AUTOMATICALLY INVESTED IN OTHER
CLASSES OF FUND SHARES OR CLASSES OF ANOTHER MORGAN STANLEY DEAN WITTER FUND
THAT YOU OWN. CONTACT YOUR MORGAN STANLEY DEAN WITTER FINANCIAL ADVISOR FOR
FURTHER INFORMATION ABOUT THIS SERVICE.
(END SIDEBAR)
REINSTATEMENT PRIVILEGE. If you sell Fund shares and have not
previously exercised the reinstatement privilege, you may, within 35
days after the date of sale, invest any portion of the proceeds in
the same Class of Fund shares at their net asset value and receive a
pro rata credit for any CDSC paid in connection with the sale.
INVOLUNTARY SALES. The Fund reserves the right, on sixty days'
notice, to sell the shares of any shareholder (other than shares held
in an IRA or 403(b) Custodial Account) whose shares, due to sales by
the shareholder, have a value below $100, or in the case of an
account opened through EASYINVEST-SM-, if after 12 months the
shareholder has invested less than $1,000 in the account.
However, before the Fund sells your shares in this manner, we will
notify you and allow you sixty days to make an additional investment
in an amount that will increase the value of your account to at least
the required amount before the sale is processed. No CDSC will be
imposed on any involuntary sale.
MARGIN ACCOUNTS. Certain restrictions may apply to Fund shares
pledged in margin accounts with Dean Witter Reynolds or another
authorized broker-dealer of Fund shares. If you hold Fund shares in
this manner, please contact your Morgan Stanley Dean Witter Financial
Advisor or other authorized financial representative for more
details.
ICON DISTRIBUTIONS
- --------------------------------------------------------------------------------
The Fund passes substantially all of its earnings from income and
capital gains along to its investors as "distributions." The Fund
earns income from stocks and interest from fixed-income investments.
These amounts are passed along to Fund shareholders as "income
dividend distributions." The Fund realizes capital gains whenever it
sells securities for a higher price than it paid for them. These
amounts may be passed along as "capital gain distributions."
The Fund declares income dividends separately for each Class.
Distributions paid on Class A and Class D shares usually will be
higher than for Class B and Class C because distribution fees that
Class B and Class C pay are higher. Normally, income dividends and
capital gains are distributed annually in December. The Fund may at
times make payments from sources other than income or capital gains
that represent a return of a portion of your investment.
Distributions are reinvested automatically in additional shares of
the same Class and automatically credited to your account, unless
you request in writing that all distributions be paid in cash. If
you elect the cash option, the Fund will mail a check to you no
later than seven business days after the distribution is declared.
No interest will accrue on uncashed checks. If you wish to change
how your distributions are paid, your request should be received by
the Fund's transfer agent, Morgan Stanley Dean Witter Trust FSB, at
least five business days prior to the record date of the
distributions.
13
<PAGE>
ICON TAX CONSEQUENCES
- --------------------------------------------------------------------------------
As with any investment, you should consider how your Fund
investment will be taxed. The tax information in this PROSPECTUS is
provided as general information. You should consult your own tax
professional about the tax consequences of an investment in the
Fund.
Unless your investment in the Fund is through a tax-deferred
retirement account, such as a 401(k) plan or IRA, you need to be
aware of the possible tax consequences when:
- The Fund makes distributions; and
- You sell Fund shares, including an exchange to another Morgan
Stanley Dean Witter Fund.
TAXES ON DISTRIBUTIONS. Your distributions are normally subject to
federal and state income tax when they are paid, whether you take
them in cash or reinvest them in Fund shares. A distribution also
may be subject to local income tax. Any income dividend
distributions and any short-term capital gain distributions are
taxable to you as ordinary income. Any long-term capital gain
distributions are taxable as long-term capital gains, no matter how
long you have owned shares in the Fund.
Every January, you will be sent a statement (IRS Form 1099-DIV)
showing the taxable distributions paid to you in the previous year.
The statement provides full information on your dividends and
capital gains for tax purposes.
TAXES ON SALES. Your sale of Fund shares normally is subject to
federal and state income tax and may result in a taxable gain or
loss to you. A sale also may be subject to local income tax. Your
exchange of Fund shares for shares of another Morgan Stanley Dean
Witter Fund is treated for tax purposes like a sale of your
original shares and a purchase of your new shares. Thus, the
exchange may, like a sale, result in a taxable gain or loss to you
and will give you a new tax basis for your new shares.
When you open your Fund account, you should provide your social
security or tax identification number on your investment
application. By providing this information, you will avoid being
subject to a federal backup withholding tax of 31% on taxable
distributions and redemption proceeds. Any withheld amount would be
sent to the IRS as an advance tax payment.
ICON SHARE CLASS ARRANGEMENTS
- --------------------------------------------------------------------------------
The Fund offers several Classes of shares having different
distribution arrangements designed to provide you with different
purchase options according to your investment needs. Your Morgan
Stanley Dean Witter Financial Advisor or other authorized financial
representative can help you decide which Class may be appropriate
for you.
The general public is offered three Classes: Class A shares, Class
B shares and Class C shares, which differ principally in terms of
sales charges and ongoing expenses. A fourth Class, Class D shares,
is offered only to a limited category of
14
<PAGE>
investors. Shares that you acquire through reinvested distributions
will not be subject to any front-end sales charge or CDSC -
contingent deferred sales charge. Sales personnel may receive
different compensation for selling each Class of shares. The sales
charges applicable to each Class provide for the distribution
financing of shares of that Class.
The chart below compares the sales charge and annual 12b-1 fee
applicable to each Class:
<TABLE>
<CAPTION>
CLASS SALES CHARGE ANNUAL 12b-1 FEE
<S> <C> <C>
- ------------------------------------------------------------------
A Maximum 5.25% initial sales charge
reduced for purchase of $25,000 or more;
shares sold without an initial sales
charge are generally subject to a 1.0%
CDSC during the first year 0.25%
- ------------------------------------------------------------------
B Maximum 5.0% CDSC during the first year
decreasing to 0% after six years 1.0%
- ------------------------------------------------------------------
C 1.0% CDSC during the first year 1.0%
- ------------------------------------------------------------------
D None None
- ------------------------------------------------------------------
</TABLE>
CLASS A SHARES Class A shares are sold at net asset value plus an
initial sales charge of up to 5.25%. The initial sales charge is
reduced for purchases of $25,000 or more according to the schedule
below. Investments of $1 million or more are not subject to an
initial sales charge, but are generally subject to a contingent
deferred sales charge, or CDSC, of 1.0% on sales made within one
year after the last day of the month of purchase. The CDSC will be
assessed in the same manner and with the same CDSC waivers as with
Class B shares. Class A shares are also subject to a distribution
(12b-1) fee of up to 0.25% of the average daily net assets of the
(SIDEBAR) Class.
FRONT-END SALES
CHARGE OR FSC
AN INITIAL SALES CHARGE YOU PAY WHEN PURCHASING CLASS A SHARES THAT IS BASED ON
A PERCENTAGE OF THE OFFERING PRICE. THE PERCENTAGE DECLINES BASED UPON THE
DOLLAR VALUE OF CLASS A SHARES YOU PURCHASE. WE OFFER THREE WAYS TO REDUCE YOUR
CLASS A SALES CHARGES - THE COMBINED PURCHASE PRIVILEGE, RIGHT OF ACCUMULATION
AND LETTER OF INTENT.
(END SIDEBAR)
The offering price of Class A shares includes a
sales charge (expressed as a percentage of the
offering price) on a single transaction as shown in
the following table:
<TABLE>
<CAPTION>
FRONT-END SALES CHARGE
----------------------------------------------
AMOUNT OF PERCENTAGE OF PUBLIC APPROXIMATE PERCENTAGE
SINGLE TRANSACTION OFFERING PRICE OF AMOUNT INVESTED
<S> <C> <C>
- ----------------------------------------------------------------------------------------
Less than $25,000 5.25% 5.54%
- ----------------------------------------------------------------------------------------
$25,000 but less than $50,000 4.75% 4.99%
- ----------------------------------------------------------------------------------------
$50,000 but less than $100,000 4.00% 4.17%
- ----------------------------------------------------------------------------------------
$100,000 but less than $250,000 3.00% 3.09%
- ----------------------------------------------------------------------------------------
$250,000 but less than $1 million 2.00% 2.04%
- ----------------------------------------------------------------------------------------
$1 million and over 0 0
- ----------------------------------------------------------------------------------------
</TABLE>
The reduced sales charge schedule is applicable to purchases of Class
A shares in a single transaction by:
- A single account (including an individual, trust or fiduciary
account).
15
<PAGE>
- Family member accounts (limited to husband, wife and children under
the age of 21).
- Pension, profit sharing or other employee benefit plans of
companies and their affiliates.
- Tax-exempt organizations.
- Groups organized for a purpose other than to buy mutual fund
shares.
COMBINED PURCHASE PRIVILEGE. You also will have the benefit of
reduced sales charges by combining purchases of Class A shares of the
Fund in a single transaction with purchases of Class A shares of
other Multi-Class Funds and shares of FSC Funds.
RIGHT OF ACCUMULATION. You also may benefit from a reduction of sales
charges if the cumulative net asset value of Class A shares of the
Fund purchased in a single transaction, together with shares of other
Funds you currently own which were previously purchased at a price
including a front-end sales charge (including shares acquired through
reinvestment of distributions), amounts to $25,000 or more. Also, if
you have a cumulative net asset value of all your Class A and Class D
shares equal to at least $5 million (or $25 million for certain
employee benefit plans), you are eligible to purchase Class D shares
of any Fund subject to the Fund's minimum initial investment
requirement.
You must notify your Morgan Stanley Dean Witter Financial Advisor or
other authorized financial representative (or Morgan Stanley Dean
Witter Trust FSB if you purchase directly through the Fund), at the
time a purchase order is placed, that the purchase qualifies for the
reduced charge under the Right of Accumulation. Similar notification
must be made in writing when an order is placed by mail. The reduced
sales charge will not be granted if: (i) notification is not
furnished at the time of the order; or (ii) a review of the records
of Dean Witter Reynolds or other authorized dealer of Fund shares or
the Fund's transfer agent does not confirm your represented holdings.
LETTER OF INTENT. The schedule of reduced sales charges for larger
purchases also will be available to you if you enter into a written
"letter of intent." A letter of intent provides for the purchase of
Class A shares of the Fund or other Multi-Class Funds or shares of
FSC Funds within a thirteen-month period. The initial purchase under
a letter of intent must be at least 5% of the stated investment goal.
To determine the applicable sales charge reduction, you may also
include: (1) the cost of shares of other Morgan Stanley Dean Witter
Funds which were previously purchased at a price including a
front-end sales charge during the 90-day period prior to the
distributor receiving the letter of intent, and (2) the cost of
shares of other Funds you currently own acquired in exchange for
shares of Funds purchased during that period at a price including a
front-end sales charge. You can obtain a letter of intent by
contacting your Morgan Stanley Dean Witter Financial Advisor or other
authorized financial representative or by calling (800) 869-NEWS. If
you do not achieve the
16
<PAGE>
stated investment goal within the thirteen-month period, you are
required to pay the difference between the sales charges otherwise
applicable and sales charges actually paid.
OTHER FRONT-END SALES CHARGE WAIVERS. In addition to investments of
$1 million or more, your purchase of Class A shares is not subject to
a front-end sales charge (or CDSC upon sale) if your account
qualifies under one of the following categories:
- A trust for which Morgan Stanley Dean Witter Trust FSB provides
discretionary trustee services.
- Persons participating in a fee-based investment program (subject to
all of its terms and conditions, including mandatory sale or
transfer restrictions on termination) approved by the Fund's
distributor pursuant to which they pay an asset-based fee for
investment advisory, administrative and/or brokerage services.
- Employer-sponsored employee benefit plans, whether or not qualified
under the Internal Revenue Code, for which Morgan Stanley Dean
Witter Trust FSB serves as trustee or Dean Witter Reynolds'
Retirement Plan Services serves as recordkeeper under a written
Recordkeeping Services Agreement ("MSDW Eligible Plans") which have
at least 200 eligible employees.
- An MSDW Eligible Plan whose Class B shares have converted to Class
A shares, regardless of the plan's asset size or number of eligible
employees.
- A client of a Morgan Stanley Dean Witter Financial Advisor who
joined us from another investment firm within six months prior to
the date of purchase of Fund shares, and you used the proceeds from
the sale of shares of a proprietary mutual fund of that Financial
Advisor's previous firm that imposed either a front-end or deferred
sales charge to purchase Class A shares, provided that: (1) you
sold the shares not more than 60 days prior to the purchase of Fund
shares, and (2) the sale proceeds were maintained in the interim in
cash or a money market fund.
CLASS B SHARES Class B shares are offered at net asset value with no
initial sales charge but are subject to a contingent deferred sales
charge, or CDSC, as set forth in the table below. For the purpose of
calculating the CDSC, shares are deemed to have been purchased on the
last day of the month during which they were purchased.
<TABLE>
<CAPTION>
YEAR SINCE PURCHASE PAYMENT MADE CDSC AS A PERCENTAGE OF AMOUNT REDEEMED
<S> <C>
- --------------------------------------------------------------------------------------------
First 5.0%
- --------------------------------------------------------------------------------------------
Second 4.0%
- --------------------------------------------------------------------------------------------
Third 3.0%
- --------------------------------------------------------------------------------------------
Fourth 2.0%
- --------------------------------------------------------------------------------------------
Fifth 2.0%
- --------------------------------------------------------------------------------------------
Sixth 1.0%
- --------------------------------------------------------------------------------------------
Seventh and thereafter None
- --------------------------------------------------------------------------------------------
</TABLE>
(SIDEBAR)
CONTINGENT DEFERRED SALES CHARGE OR CDSC
A FEE YOU PAY WHEN YOU SELL SHARES OF CERTAIN MORGAN STANLEY DEAN WITTER FUNDS
PURCHASED WITHOUT AN INITIAL SALES CHARGE. THIS FEE DECLINES THE LONGER YOU HOLD
YOUR SHARES AS SET FORTH IN THE TABLE.
(END SIDEBAR)
17
<PAGE>
Each time you place an order to sell or exchange shares, shares with
no CDSC will be sold or exchanged first, then shares with the lowest
CDSC will be sold or exchanged next. For any shares subject to a
CDSC, the CDSC will be assessed on an amount equal to the lesser of
the current market value or the cost of the shares being sold.
CDSC WAIVERS. A CDSC, if otherwise applicable, will be waived in the
case of:
- Sales of shares held at the time you die or become disabled (within
the definition in Section 72(m)(7) of the Internal Revenue Code
which relates to the ability to engage in gainful employment), if
the shares are: (i) registered either in your name (not a trust) or
in the names of you and your spouse as joint tenants with right of
survivorship; or (ii) held in a qualified corporate or
self-employed retirement plan, IRA or 403(b) Custodial Account,
provided in either case that the sale is requested within one year
of your death or initial determination of disability.
- Sales in connection with the following retirement plan
"distributions:" (i) lump-sum or other distributions from a
qualified corporate or self-employed retirement plan following
retirement (or, in the case of a "key employee" of a "top heavy"
plan, following attainment of age 59 1/2); (ii) distributions from
an IRA or 403(b) Custodial Account following attainment of age
59 1/2; or (iii) a tax-free return of an excess IRA contribution (a
"distribution" does not include a direct transfer of IRA, 403(b)
Custodial Account or retirement plan assets to a successor
custodian or trustee).
- Sales of shares held for you as a participant in an MSDW Eligible
Plan.
- Sales of shares in connection with the Systematic Withdrawal Plan
of up to 12% annually of the value of each Fund from which plan
sales are made. The percentage is determined on the date you
establish the Systematic Withdrawal Plan and based on the next
calculated share price. You may have this CDSC waiver applied in
amounts up to 1% per month, 3% per quarter, 6% semi-annually or 12%
annually. Shares with no CDSC will be sold first, followed by those
with the lowest CDSC. As such, the waiver benefit will be reduced
by the amount of your shares that are not subject to a CDSC. If you
suspend your participation in the plan, you may later resume plan
payments without requiring a new determination of the account value
for the 12% CDSC waiver.
All waivers will be granted only following the Distributor receiving
confirmation of your entitlement. If you believe you are eligible for
a CDSC waiver, please contact your Financial Advisor or call (800)
869-NEWS.
DISTRIBUTION FEE. Class B shares are subject to an annual
distribution (12b-1) fee of 1.0% of the lesser of: (a) the average
daily aggregate gross purchases by all shareholders of the Fund's
Class B shares since the inception of the Fund (not including
reinvestment of dividends or capital gains distributions), less the
average daily aggregate net asset value of the Fund's Class B shares
sold by all shareholders since the Fund's inception upon which a CDSC
has been imposed or waived, or (b) the average daily net assets of
Class B.
18
<PAGE>
CONVERSION FEATURE. After ten (10) years, Class B shares will convert
automatically to Class A shares of the Fund with no initial sales
charge. The ten year period runs from the last day of the month in
which the shares were purchased, or in the case of Class B shares
acquired through an exchange, from the last day of the month in which
the original Class B shares were purchased; the shares will convert
to Class A shares based on their relative net asset values in the
month following the ten year period. At the same time, an equal
proportion of Class B shares acquired through automatically
reinvested distributions will convert to Class A shares on the same
basis. (Class B shares held before May 1, 1997, however, will convert
to Class A shares in May 2007.)
In the case of Class B shares held in an MSDW Eligible Plan, the plan
is treated as a single investor and all Class B shares will convert
to Class A shares on the conversion date of the Class B shares of a
Morgan Stanley Dean Witter Fund purchased by that plan.
Currently, the Class B share conversion is not a taxable event; the
conversion feature may be cancelled if it is deemed a taxable event
in the future by the Internal Revenue Service.
If you exchange your Class B shares for shares of a Money Market
Fund, No-Load Fund or Short-Term U.S. Treasury Trust, the holding
period for conversion is frozen as of the last day of the month of
the exchange and resumes on the last day of the month you exchange
back into Class B shares.
EXCHANGING SHARES SUBJECT TO A CDSC. There are special considerations
when you exchange Fund shares that are subject to a CDSC. When
determining the length of time you held the shares and the
corresponding CDSC rate, any period (starting at the end of the
month) during which you held shares of a fund that does NOT charge a
CDSC WILL NOT BE COUNTED. Thus, in effect the "holding period" for
purposes of calculating the CDSC is frozen upon exchanging into a
fund that does not charge a CDSC.
For example, if you held Class B shares of the Fund for one year,
exchanged to Class B of another Morgan Stanley Dean Witter
Multi-Class Fund for another year, then sold your shares, a CDSC rate
of 4% would be imposed on the shares based on a two year holding
period -- one year for each Fund. However, if you had exchanged the
shares of the Fund for a Money Market Fund (which does not charge a
CDSC) instead of the Multi-Class Fund, then sold your shares, a CDSC
rate of 5% would be imposed on the shares based on a one year holding
period. The one year in the Money Market Fund would not be counted.
Nevertheless, if shares subject to a CDSC are exchanged for a Fund
that does not charge a CDSC, you will receive a credit when you sell
the shares equal to the distribution (12b-1) fees, if any, you paid
on those shares while in that Fund up to the amount of any applicable
CDSC.
In addition, shares that are exchanged into or from a Morgan Stanley
Dean Witter Fund subject to a higher CDSC rate will be subject to the
higher rate, even if the shares are re-exchanged into a Fund with a
lower CDSC rate.
19
<PAGE>
CLASS C SHARES Class C shares are sold at net asset value with no
initial sales charge but are subject to a CDSC of 1.0% on sales made
within one year after the last day of the month of purchase. The CDSC
will be assessed in the same manner and with the same CDSC waivers as
with Class B shares.
DISTRIBUTION FEE. Class C shares are subject to an annual
distribution (12b-1) fee of 1.0% of the average daily net assets of
that Class. The Class C shares' distribution fee may cause that Class
to have higher expenses and pay lower dividends than Class A or Class
D shares. Unlike Class B shares, Class C shares have no conversion
feature and, accordingly, an investor that purchases Class C shares
may be subject to distribution (12b-1) fees applicable to Class C
shares for an indefinite period.
CLASS D SHARES Class D shares are offered without any sales charge on
purchases or sales and without any distribution (12b-1) fee. Class D
shares are offered only to investors meeting an initial investment
minimum of $5 million ($25 million for MSDW Eligible Plans) and the
following investor categories:
- Investors participating in the Investment Manager's mutual fund
asset allocation program (subject to all of its terms and
conditions, including mandatory sale or transfer restrictions on
termination) pursuant to which they pay an asset-based fee.
- Persons participating in a fee-based investment program (subject to
all of its terms and conditions, including mandatory sale or
transfer restrictions on termination) approved by the Fund's
distributor pursuant to which they pay an asset-based fee for
investment advisory, administrative and/or brokerage services.
- Employee benefit plans maintained by Morgan Stanley Dean Witter &
Co. or any of its subsidiaries for the benefit of certain employees
of Morgan Stanley Dean Witter & Co. and its subsidiaries.
- Certain unit investment trusts sponsored by Dean Witter Reynolds.
- Certain other open-end investment companies whose shares are
distributed by the Fund's distributor.
- Investors who were shareholders of the Dean Witter Retirement
Series on September 11, 1998 for additional purchases for their
former Dean Witter Retirement Series accounts.
MEETING CLASS D ELIGIBILITY MINIMUMS. To meet the $5 million ($25
million for certain MSDW Eligible Plans) initial investment to
qualify to purchase Class D shares you may combine: (1) purchases in
a single transaction of Class D shares of the Fund and other Morgan
Stanley Dean Witter Multi-Class Funds and/or (2) previous purchases
of Class A and Class D shares of Multi-Class Funds and shares of FSC
Funds you currently own, along with shares of Morgan Stanley Dean
Witter Funds you currently own that you acquired in exchange for
those shares.
20
<PAGE>
NO SALES CHARGES FOR REINVESTED CASH DISTRIBUTIONS If you receive a
cash payment representing an income dividend or capital gain and you
reinvest that amount in the applicable Class of shares by returning
the check within 30 days of the payment date, the purchased shares
would not be subject to an initial sales charge or CDSC.
PLAN OF DISTRIBUTION (RULE 12b-1 FEES) The Fund has adopted a Plan of
Distribution in accordance with Rule 12b-1 under the Investment
Company Act of 1940 with respect to the distribution of Class A,
Class B and Class C shares. The Plan allows the Fund to pay
distribution fees for the sale and distribution of these shares. It
also allows the Fund to pay for services to shareholders of Class A,
Class B and Class C shares. Because these fees are paid out of the
Fund's assets on an ongoing basis, over time these fees will increase
the cost of your investment in these Classes and may cost you more
than paying other types of sales charges.
21
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
financial performance for the past 5 fiscal years of the Fund throughout each
year. Certain information reflects financial results for a single Fund share
throughout each year. The total returns in the table represent the rate an
investor would have earned or lost on an investment in the Fund (assuming
reinvestment of all dividends and distributions).
This information has been audited by PricewaterhouseCoopers LLP, whose report,
along with the Fund's financial statements, is included in the annual report,
which is available upon request.
<TABLE>
<CAPTION>
CLASS B SHARES
- -----------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED OCTOBER 31 1998++ 1997*++ 1996 1995 1994
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA:
- -----------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 12.83 $ 18.89 $ 18.77 $ 21.60 $ 19.80
- -----------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment income (loss) 0.01 0.01 0.05 0.08 (0.10)
Net realized and unrealized gain
(loss) (2.92) (5.77) 0.50 (1.94) 2.22
--------- --------- -------- -------- --------
Total income (loss) from investment
operations (2.91) (5.76) 0.55 (1.86) 2.12
- -----------------------------------------------------------------------------------------------------------
LESS DIVIDENDS AND DISTRIBUTIONS FROM:
Net investment income (0.19) (0.30) (0.43) -- --
Net realized gain -- -- -- (0.97) (0.32)
--------- --------- -------- -------- --------
Total dividends and distributions (0.19) (0.30) (0.43) (0.97) (0.32)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.73 $ 12.83 $ 18.89 $ 18.77 $ 21.60
- -----------------------------------------------------------------------------------------------------------
TOTAL RETURN+ (22.87)% (31.01)% 3.00% (8.65)% 10.69%
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
- -----------------------------------------------------------------------------------------------------------
Expenses 2.65%(1) 2.44% 2.39% 2.45% 2.41%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 0.14%(1) 0.03% 0.18% 0.35% (0.70)%
- -----------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------
Net assets, end of period, in millions $ 409 $ 744 $ 1,624 $ 1,442 $ 1,571
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 58% 42% 49% 50% 35%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
* Prior to July 28, 1997, the Fund issued one class of shares. All shares of the
Fund held prior to that date have been designated Class B shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Reflects overall Fund ratios for investment income and non-class specific
expenses.
22
<PAGE>
<TABLE>
<CAPTION>
CLASS A SHARES++
- ---------------------------------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE PERIOD JULY 28, 1997*
SELECTED PER SHARE DATA: OCTOBER 31, 1998 THROUGH OCTOBER 31, 1997
<S> <C> <C>
- ---------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 12.86 $ 19.39
- ---------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment income 0.10 --
Net realized and unrealized loss (2.94) (6.53)
------- -------
Total loss from investment operations (2.84) (6.53)
- ---------------------------------------------------------------------------------------------
Less dividends from net investment
income (0.26) --
- ---------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.76 $ 12.86
- ---------------------------------------------------------------------------------------------
TOTAL RETURN+ (22.35)% (33.68)%(1)
- ---------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
- ---------------------------------------------------------------------------------------------
Expenses 1.90%(3) 1.92%(2)
- ---------------------------------------------------------------------------------------------
Net investment income (loss) 0.89%(3) (0.03)%(2)
- ---------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------
Net assets, end of period, in
thousands $ 3,102 $ 622
- ---------------------------------------------------------------------------------------------
Portfolio turnover rate 58% 42%
- ---------------------------------------------------------------------------------------------
</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.
23
<PAGE>
<TABLE>
<CAPTION>
CLASS C SHARES++
- ---------------------------------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE PERIOD JULY 28, 1997*
SELECTED PER SHARE DATA: OCTOBER 31, 1998 THROUGH OCTOBER 31, 1997
<S> <C> <C>
- ---------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 12.83 $ 19.39
- ---------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment income (loss) 0.01 (0.04)
Net realized and unrealized loss (2.89) (6.52)
------- -------
Total loss from investment operations (2.88) (6.56)
- ---------------------------------------------------------------------------------------------
Less dividends from net investment
income (0.23) --
- ---------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.72 $ 12.83
- ---------------------------------------------------------------------------------------------
TOTAL RETURN+ (22.68)% (33.83)%(1)
- ---------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
- ---------------------------------------------------------------------------------------------
Expenses 2.65%(3) 2.62%(2)
- ---------------------------------------------------------------------------------------------
Net investment income (loss) 0.14%(3) (0.77)%(2)
- ---------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------
Net assets, end of period, in
thousands $ 1,581 $ 819
- ---------------------------------------------------------------------------------------------
Portfolio turnover rate 58% 42%
- ---------------------------------------------------------------------------------------------
</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.
24
<PAGE>
<TABLE>
<CAPTION>
CLASS D SHARES++
- --------------------------------------------------------------------------------
FOR THE PERIOD
JULY 28, 1997*
FOR THE YEAR ENDED THROUGH OCTOBER
SELECTED PER SHARE DATA: OCTOBER 31, 1998 31, 1997
<S> <C> <C>
- --------------------------------------------------------------------------------
Net asset value, beginning of period $ 12.86 $ 19.39
- --------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment income 0.07 0.02
Net realized and unrealized loss (2.88) (6.55)
------- -------
Total loss from investment operations (2.81) (6.53)
- --------------------------------------------------------------------------------
Less dividends from net investment
income (0.27) --
- --------------------------------------------------------------------------------
Net asset value, end of period $ 9.78 $ 12.86
- --------------------------------------------------------------------------------
TOTAL RETURN+ (22.14)% (33.68)%(1)
- --------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
- --------------------------------------------------------------------------------
Expenses 1.65%(3) 1.62%(2)
- --------------------------------------------------------------------------------
Net investment income 1.14%(3) 0.42%(2)
- --------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------
Net assets, end of period, in thousands $ 1,565 $ 118
- --------------------------------------------------------------------------------
Portfolio turnover rate 58% 42%
- --------------------------------------------------------------------------------
</TABLE>
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Calculated based on the net asset value as of the last business day of the
period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
25
<PAGE>
NOTES
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26
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27
<PAGE>
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28
<PAGE>
MORGAN STANLEY DEAN WITTER
FAMILY OF FUNDS
The Morgan Stanley Dean Witter Family of Funds offers
investors a wide range of investment choices. Come on
in and meet the family!
- --------------------------------------------------------------------------------
GROWTH FUNDS
- ---------------------------------
GROWTH FUNDS
Aggressive Equity Fund
American Value Fund
Capital Growth Securities
Developing Growth Securities
Equity Fund
Growth Fund
Market Leader Trust
Mid-Cap Growth Fund
Special Value Fund
Value Fund
THEME FUNDS
Financial Services Trust
Health Sciences Trust
Information Fund
Natural Resource Development Securities
Precious Metals and Minerals Trust
GLOBAL/INTERNATIONAL FUNDS
Competitive Edge Fund - "Best Ideas" Portfolio
European Growth Fund
Fund of Funds - International Portfolio
Global Dividend Growth Securities
International SmallCap Fund
Japan Fund
Pacific Growth Fund
- --------------------------------------------------------------------------------
GROWTH AND INCOME FUNDS
- ---------------------------------
Balanced Growth Fund
Balanced Income Fund
Convertible Securities Trust
Dividend Growth Securities
Fund of Funds - Domestic Portfolio
Income Builder Fund
Mid-Cap Dividend Growth Securities
S&P 500 Index Fund
S&P 500 Select Fund
Strategist Fund
Value-Added Market Series/Equity Portfolio
THEME FUNDS
Global Utilities Fund
Utilities Fund
- --------------------------------------------------------------------------------
INCOME FUNDS
- ---------------------------------
GOVERNMENT INCOME FUNDS
Federal Securities Trust
Short-Term U.S. Treasury Trust
U.S. Government Securities Trust
DIVERSIFIED INCOME FUNDS
Diversified Income Trust
CORPORATE INCOME FUNDS
High Yield Securities
Intermediate Income Securities
Short-Term Bond Fund (NL)
GLOBAL INCOME FUNDS
World Wide Income Trust
TAX-FREE INCOME FUNDS
California Tax-Free Income Fund
Hawaii Municipal Trust (FSC)
Limited Term Municipal Trust (NL)
Multi-State Municipal Series Trust (FSC)
New York Tax-Free Income Fund
Tax-Exempt Securities Trust
- --------------------------------------------------------------------------------
MONEY MARKET FUNDS
- ---------------------------------
TAXABLE MONEY MARKET FUNDS
Liquid Asset Fund (MM)
U.S. Government Money Market Trust (MM)
TAX-FREE MONEY MARKET FUNDS
California Tax-Free Daily Income Trust (MM)
N.Y. Municipal Money Market Trust (MM)
Tax-Free Daily Income Trust (MM)
There may be Funds created after this PROSPECTUS was published. Please consult
the inside front cover of a new Fund's prospectus for its designation, e.g.,
Multi-Class Fund or Money Market Fund.
Unless otherwise noted, each listed Morgan Stanley Dean Witter Fund, except for
Short-Term U.S. Treasury Trust, is a Multi-Class Fund. A Multi-Class Fund is a
mutual fund offering multiple Classes of shares. The other types of funds are:
NL - No-Load (Mutual) Fund; MM - Money Market Fund; FSC - A mutual fund sold
with a front-end sales charge and a distribution (12b-1) fee.
<PAGE>
PROSPECTUS - FEBRUARY 22, 1999
Additional information about the Fund's investments is available in the Fund's
ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS. In the Fund's ANNUAL REPORT, you
will find a discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal year. The
Fund's STATEMENT OF ADDITIONAL INFORMATION also provides additional information
about the Fund. The STATEMENT OF ADDITIONAL INFORMATION is incorporated herein
by reference (legally is part of this PROSPECTUS). For a free copy of any of
these documents, to request other information about the Fund, or to make
shareholder inquiries, please call:
(800) 869-NEWS
You also may obtain information about the Fund by calling your Morgan Stanley
Dean Witter Financial Advisor or by visiting our Internet site at:
WWW.DEANWITTER.COM/FUNDS
Information about the Fund (including the STATEMENT OF ADDITIONAL INFORMATION)
can be viewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, DC. Information about the Reference Room's
operations may be obtained by calling the SEC at (800) SEC-0330. Reports and
other information about the Fund are available on the SEC's Internet site
(www.sec.gov), and copies of this information may be obtained, upon payment of a
duplicating fee, by writing the Public Reference Section of the SEC, Washington,
DC 20549-6009.
Morgan Stanley Dean Witter
PACIFIC GROWTH FUND
[BACK COVER PHOTO]
A MUTUAL FUND THAT
SEEKS TO MAXIMIZE THE
CAPITAL APPRECIATION
OF ITS INVESTMENTS
TICKER SYMBOLS:
CLASS A: TGRAX CLASS C: TGRCX
- -------------------- --------------------
CLASS B: TGRBX CLASS D: TGRDX
- -------------------- --------------------
(MORGAN STANLEY DEAN WITTER
PACIFIC GROWTH FUND;
INVESTMENT COMPANY ACT
FILE NO. 811-6121)
