<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 28, 1999
REGISTRATION NOS.: 33-46515
811-6608
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 / /
PRE-EFFECTIVE AMENDMENT NO. / /
POST-EFFECTIVE AMENDMENT NO. 9 /X/
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 / /
AMENDMENT NO. 11 / /
----------------
TCW/DW LATIN AMERICAN GROWTH FUND
(A MASSACHUSETTS BUSINESS TRUST)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 392-1600
BARRY FINK, ESQ.
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(NAME AND ADDRESS OF AGENT FOR SERVICE)
COPY TO:
DAVID M. BUTOWSKY, ESQ.
GORDON ALTMAN BUTOWSKY
WEITZEN SHALOV & WEIN
114 WEST 47TH STREET
NEW YORK, NEW YORK 10036
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APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after
this Post-Effective Amendment becomes effective.
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IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX)
___X_ immediately upon filing pursuant to paragraph (b)
_____ on (date) pursuant to paragraph (b)
_____ 60 days after filing pursuant to paragraph (a)
_____ on (date) pursuant to paragraph (a) of rule 485.
AMENDING THE PROSPECTUS AND UPDATING FINANCIAL STATEMENTS
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<PAGE>
PROSPECTUS - MAY 28, 1999
TCW/DW
LATIN AMERICAN GROWTH FUND
[COVER PHOTO]
A MUTUAL FUND THAT SEEKS LONG-TERM CAPITAL APPRECIATION
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
<TABLE>
<S> <C> <C>
The Fund Investment Objective.................................. 1
Principal Investment Strategies....................... 1
Principal Risks....................................... 2
Past Performance...................................... 4
Fees and Expenses..................................... 5
Additional Investment Strategy Information............ 6
Additional Risk Information........................... 7
Fund Management....................................... 9
Shareholder Information Pricing Fund Shares................................... 11
How to Buy Shares..................................... 11
How to Exchange Shares................................ 13
How to Sell Shares.................................... 15
Distributions......................................... 16
Tax Consequences...................................... 17
Share Class Arrangements.............................. 18
Financial Highlights ...................................................... 25
THIS PROSPECTUS CONTAINS IMPORTANT INFORMATION ABOUT THE FUND.
PLEASE READ IT CAREFULLY AND KEEP IT FOR FUTURE REFERENCE.
</TABLE>
<PAGE>
(SIDEBAR)
CAPITAL APPRECIATION
AN INVESTMENT OBJECTIVE HAVING THE GOAL OF SELECTING SECURITIES WITH THE
POTENTIAL TO RISE IN PRICE RATHER THAN PAY OUT INCOME.
(END SIDEBAR)
THE FUND
[ICON] INVESTMENT OBJECTIVE
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TCW/DW Latin American Growth Fund is a mutual fund that seeks
long-term capital appreciation.
[ICON] PRINCIPAL INVESTMENT STRATEGIES
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The Fund will normally invest at least 65% of its total assets in
common stocks, and other equity securities (including depository
receipts) of Latin American companies. The Fund's "Adviser," TCW
Funds Management, Inc., selects securities for the Fund based on its
view of their potential for capital appreciation; current dividend
income will not be a factor. The Adviser primarily uses a "top-down"
investment approach, which begins with an evaluation of the country
in which the proposed investment is to be made. Following the country
level review, the Adviser conducts a fundamental analysis of specific
securities, industries and companies. The Fund's equity securities
will predominately consist of the common and preferred stock of
companies listed on a recognized securities exchange or traded in
other regulated markets. The Fund's assets will be allocated among
the countries in Latin America in accordance with the Adviser's
judgment as to where the best investment opportunities exist.
However, the Adviser will normally invest in at least three Latin
American countries.
For the Fund's investment purposes, Latin America includes Argentina,
the Bahamas, Barbados, Belize, Bolivia, Brazil, Chile, Colombia,
Costa Rica, Dominican Republic, Ecuador, El Salvador, French Guinea,
Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, the Netherlands
Antilles, Nicaragua, Panama, Paraguay, Peru, Suriname, Trinidad and
Tobago, Uruguay and Venezuela. Latin American companies are organized
in, have their securities principally trading in markets located in,
derive at least 50% of their profits or revenues from business in,
these countries or have depository shares listed on securities
exchanges or traded in other regulated markets in the United States.
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. A
depository receipt is generally issued by a bank or financial
institution and represents the common stock or other equity
securities of a foreign company. The owner of a depositary receipt
holds rights to the underlying securities, including the right to
receive dividends paid on the underlying security.
1
<PAGE>
In addition to the securities described above, the Fund may also
invest in Latin American convertible and debt securities (including
zero coupon securities and "junk bonds"), other investment companies,
options and futures, and forward currency contracts.
In pursuing the Fund's investment objective, the Adviser has
considerable leeway in deciding which investments it buys, holds or
sells on a day-to-day basis -- and which trading strategies it uses.
For example, the Adviser in its discretion may determine to use some
permitted trading strategies while not using others.
[ICON] PRINCIPAL RISKS
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There is no assurance that the Fund will achieve its investment
objective. The Fund's share price will fluctuate with changes in the
market value of the Fund's portfolio securities. When you sell Fund
shares, they may be worth less than what you paid for them and,
accordingly, you can lose money investing in this Fund.
A principal risk of investing in the Fund is associated with its
emphasis of investments, including common and preferred stocks, in
Latin America. In general, stock values fluctuate in response to
activities specific to the company as well as general market,
economic and political conditions. Stock can fluctuate widely in
response to these factors.
FOREIGN SECURITIES/LATIN AMERICA. The Fund's investments in foreign
securities (including depository receipts) involve risks 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.
In addition, many of the currencies of Latin American countries have
experienced steady devaluations relative to the U.S. dollar, and
major devaluations have historically occurred in certain countries.
Any devaluations in the currencies in which the Fund's portfolio
securities are denominated may have a detrimental impact on the Fund.
There is also a risk that certain Latin American countries may
restrict the free conversion of their currencies into other
currencies. Further, certain Latin American currencies may not be
internationally traded.
Foreign securities also have risks related to economic and political
developments abroad, including expropriations, confiscatory taxation,
exchange control regulation, limitations on the use or transfer of
Fund assets, and any effects of foreign social, economic or political
instability. Economic and political developments in Latin America may
have profound effects upon the value of the Fund's portfolio. In the
event of expropriation, nationalization or other complication, the
Fund could lose its entire
2
<PAGE>
investment in any one country. In addition, individual Latin American
countries may place restrictions on the ability of foreign entities
such as the Fund to invest in particular segments of the local
economies.
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. The securities markets of Latin American countries are
substantially smaller, less developed, less liquid and more volatile
than the major securities markets in the United States. The limited
size of many Latin American securities markets and limited trading
volume in issuers compared to volume of trading in U.S. securities
could cause prices to be erratic for reasons apart from factors that
affect the quality of the securities. For example, limited market
size may cause prices to be unduly influenced by traders who control
large positions. Adverse publicity and investors' perceptions,
whether or not based on fundamental analysis, may decrease the value
and liquidity of portfolio securities, especially in these markets.
Furthermore, foreign exchanges and broker-dealers are generally
subject to less government and exchange scrutiny and regulation than
their U.S. counterparts. Also, differences in clearance and
settlement procedures on foreign markets may occasion delays in
settlements of Fund trades effected in such markets. Inability to
dispose of portfolio securities due to settlement delays could result
in losses to the Fund due to subsequent declines in value of the
securities and the inability of the Fund to make intended security
purchases due to settlement problems could result in a failure of the
Fund to make potentially advantageous investments.
Most Latin American countries have experienced substantial, and in
some periods extremely high, rates of inflation for many years.
Inflation and rapid fluctuations in inflation rates have had and may
continue to have very negative effects on the economies and
securities markets of certain Latin American countries.
The performance of the Fund also will depend on whether the Adviser
is successful in pursuing the Fund's investment strategy. The Fund is
also subject to other risks from its permissible investments
including the risks associated with its investments in convertible
and debt securities (including "junk bonds"), options and futures,
and forward currency contracts.
3
<PAGE>
(SIDEBAR)
ANNUAL TOTAL RETURNS
THIS CHART SHOWS HOW THE PERFORMANCE OF THE FUND'S CLASS B SHARES HAS VARIED
FROM YEAR TO YEAR OVER THE PAST 6 CALENDAR YEARS.
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)
Shares of the Fund are not bank deposits and are not guaranteed or
insured by the FDIC or any other government agency.
[ICON] PAST PERFORMANCE
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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>
1993 46.83%
1994 -23.73%
1995 -20.26%
1996 22.03%
1997 30.56%
1998 -38.99%
</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.
During the periods shown in the bar chart, the highest return for a calendar
quarter was 33.58% (quarter ended December 31, 1993) and the lowest return for a
calendar quarter was -29.55% (quarter ended March 31, 1995). Year-to-date total
return as of March 31, 1999 was 7.79%.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (AS OF DECEMBER 31, 1998)
- --------------------------------------------------------------- LIFE OF FUND
PAST 1 YEAR PAST 5 YEARS (SINCE 12/30/92)
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------
Class A(1) -41.78% N/A N/A
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Class B -42.04% -10.33% -2.36%(4)
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Class C(1) -39.64% N/A N/A
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Class D(1) -38.38% N/A N/A
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IFC Latin American Total Return
Index(2) -35.54% -5.94% 2.85%(4)
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Lipper Latin American Funds
Average(3) -37.86% -6.46% 1.95%(5)
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</TABLE>
1 Classes A, C and D commenced operations on July 28, 1997.
2 The International Finance Corporation (IFC) Latin America Total Return
Index is a benchmark for the Latin American Markets. The Index, which
includes Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela,
reflects restrictions on foreign investment. The Index does not include any
expenses or fees. The Index is unmanaged and should not be considered an
investment.
3 The Lipper Latin American Funds Average tracks the performance of the funds
whose primary trading markets or operations are concentrated in the Latin
American region or in a single country within the region, as reported by
Lipper Analytical Services.
4 For the period December 30, 1992 through December 31, 1998.
5 For the period December 31, 1992 through December 31, 1998.
4
<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 JANUARY 31, 1999.
(END SIDEBAR)
[ICON] FEES AND EXPENSES
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The table below briefly describes the fees and expenses that you may
pay if you buy and hold shares of the Fund. 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 Fund does not
charge account or exchange fees. See the "Share Class Arrangements"
section for further fee and expense information.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS D
<S> <C> <C> <C> <C>
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SHAREHOLDER FEES
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Maximum sales charge (load) imposed on purchases (as a
percentage of offering price) 5.25%(1) None None None
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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
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ANNUAL FUND OPERATING EXPENSES
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Management and Advisory fee 1.25% 1.25% 1.25% 1.25%
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Distribution and service (12b-1) fees 0.23% 1.00% 1.00% None
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Other expenses 0.73% 0.73% 0.73% 0.73%
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Total annual Fund operating expenses 2.21% 2.98% 2.98% 1.98%
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</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 if you sell your shares 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 if you sell your shares within one year after purchase.
EXAMPLE
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the Fund, your
investment has a 5% return each year, and the Fund's operating
expenses remain the same. Although your actual costs may be higher or
lower, the 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 $224 $ 692 $1,186 $2,546 $224 $692 $1,186 $2,546
- ---------------------------------------------------------- -----------------------------------------
CLASS B $801 $1,221 $1,766 $3,296 $301 $921 $1,566 $3,296
- ---------------------------------------------------------- -----------------------------------------
CLASS C $401 $ 921 $1,566 $3,296 $301 $921 $1,566 $3,296
- ---------------------------------------------------------- -----------------------------------------
CLASS D $201 $ 621 $1,066 $2,303 $201 $621 $1,066 $2,303
- ---------------------------------------------------------- -----------------------------------------
</TABLE>
Long-term shareholders of Class B and Class C may pay more in sales
charges, including distribution fees, than the economic equivalent of
the maximum front end sales charges permitted by the NASD.
5
<PAGE>
[ICON] ADDITIONAL INVESTMENT STRATEGY INFORMATION
- --------------------------------------------------------------------------------
This section provides additional information relating to the Fund's
principal strategies.
CONVERTIBLE AND DEBT SECURITIES. The Fund may invest up to 35% of its
assets in Latin American convertible securities, which are bonds,
preferred stock and other securities convertible into common stock at
a particular time and price, and Latin American debt securities. The
Latin American debt securities include: (a) debt securities of
companies organized in a country in Latin America or for which the
principal trading market is located in Latin America, (b) "sovereign
debt," which are debt securities issued or guaranteed by the
government of a country in Latin America, its agencies or
instrumentalities, or the central bank of such country, (c) debt
securities denominated in a Latin American currency issued by
companies to finance operations in Latin America, and (d) debt
securities of Latin American companies.
Most debt securities in which the Fund invests are not rated; when
rated, the rating generally will be below investment grade. Any
portion of the Fund's debt securities may be below investment grade.
Securities below investment grade are commonly known as "junk bonds."
These securities may include "Rule 144A" securities, which are
subject to resale restrictions. The Fund, however, will not invest in
debt securities that are in default in payment of principal or
interest.
INVESTMENT COMPANIES. The Fund may invest up to 10% of its assets in
securities issued by other investment companies. The Adviser 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.
OPTIONS AND FUTURES. The Fund may invest in put and call options and
futures with respect to financial instruments, stock and interest
rate indexes, and U.S. and foreign currencies. Options and futures
may be used to seek to protect against a decline in securities or
currency prices or an increase in prices of securities or currencies
that may be purchased, as well as to protect against interest rate
changes.
FORWARD CURRENCY CONTRACTS. 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.
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 Adviser believes it is
advisable to do so. Although taking a defensive posture is designed
to protect the Fund from an anticipated market downturn, it could
have the effect of reducing the benefit from any upswing in the
market.
6
<PAGE>
The percentage limitations relating to the composition of the Fund's
portfolio apply at the time the fund acquires an investment and refer
to the Fund's net assets, unless otherwise noted. Subsequent
percentage changes that result from market fluctuations will not
require the fund to sell any portfolio security. The Fund may change
its principal investment strategies without shareholder approval;
however, you would be notified of any changes.
[ICON] ADDITIONAL RISK INFORMATION
- --------------------------------------------------------------------------------
This section provides additional information relating to the
principal risks of investing in the Fund.
CONVERTIBLE SECURITIES. The Fund's investments in convertible
securities subject the Fund to the risks associated with both
fixed-income securities and common stocks. To the extent that a
convertible security's investment value is greater than its
conversion value, its price will be likely to increase when interest
rates fall and decrease when interest rates rise, as with a
fixed-income security. If the conversion value exceeds the investment
value, the price of the convertible security will tend to fluctuate
directly with the price of the underlying equity security.
HIGH RISK DEBT SECURITIES. Principal risks of investing in the Fund
are associated with its debt investments. All fixed-income
securities, such as corporate and sovereign 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
current interest.)
The Fund's investments in "junk bonds" pose significant risks. The
prices of these securities are likely to be more sensitive to adverse
economic changes or individual corporate developments than higher
rated securities. During an economic downturn or substantial period
of rising interest rates, junk bond issuers and, in particular,
highly leveraged issuers may experience financial stress that would
adversely affect their ability to service their principal and
interest payment obligations, to meet their projected business goals
or to obtain additional financing. In the event of a default, the
Fund may incur additional expenses to seek recovery. The Rule 144A
securities could have the effect of increasing the level of Fund
illiquidity to the extent the Fund may be unable to find qualified
institutional buyers interested in purchasing the securities. In
addition, periods of economic uncertainty and change probably would
result in an increased volatility of market prices of junk bond
securities and a corresponding volatility in the Fund's net asset
value.
7
<PAGE>
The Fund's investments in Latin American sovereign debt are subject
to unique credit risks. Certain Latin American countries are among
the largest debtors to commercial banks and foreign governments. At
times, certain Latin American countries have declared a moratorium on
the payment of principal and/or interest on external debt. The
governmental entities that control the repayment also may not be
willing or able to repay the principal and/or interest on the debt
when it becomes due. Latin American governments may default on their
sovereign debt, which may require holders of that debt to participate
in debt rescheduling or additional lending to defaulting governments.
There is no bankruptcy proceeding by which defaulted sovereign debt
may be collected. These risks could have a severely negative impact
on the Fund's sovereign debt holdings and cause the value of the
Fund's shares to decline drastically.
The Fund's Latin American debt securities are also subject to the
general risks of investing in foreign securities. See the "FOREIGN
SECURITIES/LATIN AMERICA" paragraphs in the "Principal Risks" section
for a discussion of those risks.
INVESTMENT COMPANIES. Any Fund investment in an investment company is
subject to the underlying risk of that investment company's portfolio
securities. For example, if the investment company held common
stocks, the Fund also would be exposed to the risk of investing in
common stocks. In addition, to the Fund's fees and expenses, the Fund
would bear its share of the investment company's fees and expenses.
OPTIONS AND FUTURES. If the Fund invests in options and/or futures,
its participation in these markets would subject the Fund's portfolio
to certain risks. The Adviser's predictions of movements in the
direction of the stock, currency or interest rate 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. Other risks inherent
in the use of options and futures include, for example, the possible
imperfect correlation between the price of options and futures
contracts and movements in the prices of the securities being hedged,
and the possible absence of a liquid secondary market for any
particular instrument. Certain options may be over-the-counter
options, which are options negotiated with dealers; there is no
secondary market for these investments.
FORWARD CURRENCY CONTRACTS. The Fund's participation in forward
currency contracts also involves risks. If the Adviser employs 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.
YEAR 2000. The Fund could be adversely affected if the computer
systems necessary for the efficient operation of Morgan Stanley Dean
Witter Services Company Inc. (the "Manager"), The Adviser and the
Fund's other service providers, as well as the markets and corporate
and governmental issuers in which the Fund invests do not properly
process and calculate date-related information from and after January
1, 2000. While
8
<PAGE>
(SIDEBAR)
MORGAN STANLEY DEAN WITTER ADVISORS INC.
THE MANAGER IS A WHOLLY OWNED SUBSIDIARY OF MORGAN STANLEY DEAN WITTER ADVISORS
INC., WHICH IS WIDELY RECOGNIZED AS A LEADER IN THE MUTUAL FUND INDUSTRY.
TOGETHER, THE MANAGER AND MORGAN STANLEY DEAN WITTER ADVISORS INC. HAVE MORE
THAN $132.5 BILLION IN ASSETS UNDER MANAGEMENT OR ADMINISTRATION AS OF APRIL 30,
1999.
(END SIDEBAR)
Year 2000-related computer problems could have a negative effect on
the Fund, the Manager, Adviser and their affiliates are working hard
to avoid any problems and to obtain assurances from their service
providers that they are taking similar steps.
In addition, it is possible that the markets for securities in which
the Fund invests may be detrimentally affected by computer failures
throughout the financial services industry beginning January 1, 2000.
Improperly functioning trading systems may result in settlement
problems and liquidity issues. In addition, corporate and
governmental data processing errors may result in production problems
for individual companies and overall economic uncertainties. Earnings
of individual issuers will be affected by remediation costs, which
may be substantial and may be reported inconsistently in U.S. and
foreign financial statements. Accordingly, the Fund's investments may
be adversely affected.
[ICON] FUND MANAGEMENT
- --------------------------------------------------------------------------------
The Fund has retained the Manager -- Morgan Stanley Dean Witter
Services Company Inc. -- to provide administrative services and
manage its business affairs (other than providing investment advice).
The Fund has contracted with the Adviser -- TCW Funds Management,
Inc. -- to invest the Fund's assets, including the placing of orders
for the purchase and sale of portfolio securities. The Manager is a
wholly-owned subsidiary of Morgan Stanley Dean Witter Advisors Inc.,
which is in turn 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. The
Manager's main business office is located at Two World Trade Center,
New York, NY 10048.
The Adviser, together with its affiliated companies, manages more
than $55 billion primarily for institutional investors. The Adviser
is a wholly-owned subsidiary of the TCW Group, Inc. Its main business
address is 865 South Figueroa Street, Suite 1800, Los Angeles,
California 90017.
Michael P. Reilly, Managing Director of the Adviser, is the primary
portfolio manager of the Fund. Mr. Reilly has been a portfolio
manager with affiliated companies of the TCW Group for over five
years.
The Fund pays the Manager and Adviser a monthly management or
advisory fee as full compensation for the services and facilities
furnished to the Fund, and for Fund expenses assumed by the Manager
and Adviser. The fee is based on the Fund's average daily net assets.
For the fiscal year ended January 31, 1999 the Fund accrued aggregate
total compensation to the Manager and the Adviser of 1.25% of the
Fund's average daily net assets (0.75% to the Manager and 0.50% to
the Adviser).
9
<PAGE>
In connection with the contemplated consolidation of the TCW/DW Funds
with the Morgan Stanley Dean Witter Funds, the Fund's Board of
Trustees has approved changes to the Fund's management/advisory
relationships. Specifically, the Board has approved the appointment
of Morgan Stanley Dean Witter Advisors as the new investment manager
to replace the Adviser. The Board also has approved the retention of
the Adviser as sub-advisor to the Fund. The result of the new
arrangements would be that Morgan Stanley Dean Witter Advisors would
have overall responsibility for management of the Fund, including
supervisory responsibility over the Fund's investment programs, while
the Adviser would retain responsibility for investing the Fund's
assets. The Manager would continue to have responsibility for
administrative services. Under the new arrangements, the investment
management fee rate that would be paid by the Fund would be equal to
the aggregate management/advisory fee rate currently paid by the
Fund. The Adviser would receive a sub-advisory fee paid by Morgan
Stanley Dean Witter Advisors equal to 40% of the investment
management fee rate. In order for the new arrangements to be
implemented, they must be approved by the Fund's shareholders, who
will be asked to approve the changes at a June 8, 1999 shareholders'
meeting. Once shareholder approval is obtained, the new arrangements
would be effective as soon as practicable thereafter.
10
<PAGE>
(SIDEBAR)
CONTACTING A FINANCIAL ADVISOR
IF YOU ARE NEW TO THE TCW/DW FUNDS FAMILY 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. The
net asset value of each Class, however, will differ because the
Classes have different ongoing distribution fees.
The net asset value per share of the Fund is determined once daily at
4:00 p.m. Eastern time, on each day that the New York Stock Exchange
is open (or, on days when the New York Stock Exchange closes prior to
4:00 p.m., at such earlier time). Shares will not be priced on days
that the New York Stock Exchange is closed.
The value of the Fund's portfolio securities is based on the
securities' market price when available. When a market price is not
readily available, including circumstances under which the Adviser
determines that a security's market price is not accurate, a
portfolio security is valued at its fair value, as determined under
procedures established by the Fund's Board of Trustees. In these
cases, the Fund's net asset value will reflect certain portfolio
securities' fair value rather than their market price. Due to the
Fund's holdings of securities that are primarily listed on foreign
exchanges, the value of the Fund's portfolio securities may change on
days when you will not be able to purchase or sell your shares.
An exception to the Fund's general policy of using market prices
concerns its short-term debt portfolio securities. Debt securities
with remaining maturities of sixty days or less at the time of
purchase are valued at amortized cost. However, if the cost does not
reflect the securities' market value, these securities will be valued
at their fair value.
[ICON] HOW TO BUY SHARES
- --------------------------------------------------------------------------------
You may open a new account to buy Fund shares or buy additional
Fund shares for an existing account by contacting your Morgan
Stanley Dean Witter Financial Advisor or other authorized financial
representative. Your Financial Advisor will assist you,
step-by-step, with the procedures to invest in the Fund. You may
also purchase shares directly by calling the Fund's transfer agent
and requesting an application.
Because every investor has different immediate financial needs and
long-term investment goals, the Fund offers investors four Classes
of shares: Classes A, B, C and D. Class D shares are only offered
to a limited group of investors. Each Class of shares offers a
distinct structure of sales charges, distribution and service fees,
and other features that are designed to address a variety of needs.
Your Financial Advisor or other authorized financial representative
can help you decide which Class may be most appropriate for you.
When purchasing Fund shares, you must specify which Class of shares
you wish to purchase.
11
<PAGE>
(SIDEBAR)
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)
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 purchase order in proper form.
Your payment is due on the third business day after you place your
purchase order. We reserve the right to reject any order for the
purchase of Fund shares.
<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 Morgan Stanley Dean Witter Advisors' 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.
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: TCW/DW Latin
American Growth Fund.
- Mail the letter and check to Morgan Stanley Dean Witter Trust FSB
at P.O. Box 1040, Jersey City, NJ 07303.
12
<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 TCW/DW
Multi-Class Fund advised by the Adviser and managed by the Manager,
without the imposition of an exchange fee. You may also exchange Fund
shares, without the imposition of an exchange fee, for shares of
TCW/DW North American Government Income Trust, and five Money Market
Funds for which Morgan Stanley Dean Witter Advisors serves as
Investment Manager.
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 Fund (except a Money Market Fund) is made on the
basis of the next calculated net asset values of the Funds involved
after the exchange instructions are accepted. When exchanging into a
Money Market Fund, the Fund's shares are sold at their next
calculated net asset value and the Money Market Fund's shares are
purchased at their net asset value on the following business day.
The Fund may terminate or revise the exchange privilege upon required
notice. Certain services normally available to shareholders of Money
Market Funds, including the check writing privilege, are not
available for Money Market Fund shares you acquire in an exchange.
TELEPHONE EXCHANGES. For your protection when calling Morgan Stanley
Dean Witter Trust FSB, we will employ reasonable procedures to
confirm that exchange instructions communicated over the telephone
are genuine. These procedures may include requiring various forms of
personal identification such as name, mailing address, social
security or other tax identification number. Telephone instructions
also may be recorded.
Telephone instructions will be accepted if received by the Fund's
transfer agent between 9:00 a.m. and 4:00 p.m. Eastern time, on any
day the New York Stock Exchange is open
13
<PAGE>
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 Fund there are important tax considerations.
For tax purposes, the exchange out of the Fund is considered a sale
of fund shares - and the exchange into the other Fund is considered a
purchase. As a result, you may realize a capital gain or loss.
You should review the "Tax Consequences" section and consult your own
tax professional about the tax consequences of an exchange.
FREQUENT EXCHANGES. A pattern of frequent exchanges may result in the
Fund limiting or prohibiting, at its discretion, additional purchases
and/or exchanges. The Fund will notify you in advance of limiting
your exchange privileges.
CDSC CALCULATIONS ON EXCHANGES. See the "Share Class Arrangements"
section of this PROSPECTUS for a further discussion of how applicable
contingent deferred sales charges (CDSCs) are calculated for shares
of one 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.
14
<PAGE>
[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 share price calculated after we receive your order
to sell as described below.
<TABLE>
<CAPTION>
OPTIONS PROCEDURES
<S> <C>
- --------------------------------------------------------------------------------
Contact your To sell your shares, simply call your Morgan Stanley Dean
Financial Advisor Witter Financial Advisor or other authorized financial
representative.
------------------------------------------------------------
Payment will be sent to the address to which the account is
registered or deposited in your brokerage account.
[ICON]
- --------------------------------------------------------------------------------
By Letter You can also sell your shares by writing a "letter of
instruction" that includes:
- 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.
[ICON]
------------------------------------------------------------
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, NJ 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 TCW/DW Family of Funds has
Withdrawal Plan 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 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.
- --------------------------------------------------------------------------------
[ICON]
</TABLE>
15
<PAGE>
PAYMENT FOR SOLD SHARES. After we receive your complete instruction
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,
however, 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.
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. If you have pledged your Fund shares in a margin
account, please contact your Morgan Stanley Dean Witter Financial
Advisor or other authorized financial representative regarding
restrictions on the sale of such shares.
[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."
16
<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 TCW/DW FUND THAT YOU OWN. CONTACT
YOUR MORGAN STANLEY DEAN WITTER FINANCIAL ADVISOR FOR FURTHER INFORMATION ABOUT
THIS SERVICE.
(END SIDEBAR)
The Fund declares income dividends separately for each Class. Distributions paid
on Class A and Class D shares usually will be higher than for Class B and Class
C because distribution fees that Class B and Class C pay are higher. Normally,
income dividends and capital gains are distributed annually in December. The
Fund, however, may retain and reinvest any long-term capital gains. The Fund may
at times make payments from sources other than income or capital gains that
represent a return of a portion of your investment.
Distributions are reinvested automatically in additional shares of the same
Class and automatically credited to your account, unless you request in writing
that all distributions be paid in cash. If you elect the cash option, the Fund
will mail a check to you no later than seven business days after the
distribution is declared. No interest will accrue on uncashed checks. If you
wish to change how your distributions are paid, your request should be received
by the Fund's transfer agent, Morgan Stanley Dean Witter Trust FSB, at least
five business days prior to the record date of the distributions.
[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 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 Fund is treated for tax
17
<PAGE>
purposes like a sale of your original shares and a purchase of your
new shares. Thus, the exchange may, like a sale, result in a taxable
gain or loss to you and will give you a new tax basis for your new
shares.
When you open your Fund account, you should provide your social
security or tax identification number on your investment application.
By providing this information, you will avoid being subject to a
federal backup withholding tax of 31% on taxable distributions and
redemption proceeds. Any withheld amount would be sent to the IRS as
an advance tax payment.
[ICON] SHARE CLASS ARRANGEMENTS
- --------------------------------------------------------------------------------
The Fund offers several Classes of shares having different
distribution arrangements designed to provide you with different
purchase options according to your investment needs. Your Morgan
Stanley Dean Witter Financial Advisor or other authorized financial
representative can help you decide which Class may be appropriate for
you.
The general public is offered three Classes: Class A shares, Class B
shares and Class C shares, which differ principally in terms of sales
charges and ongoing expenses. A fourth Class, Class D shares, is
offered only to a limited category of investors. Shares that you
acquire through reinvested distributions will not be subject to any
front-end 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 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 first year. 1.0%
- ------------------------------------------------------------------
D None None
- ------------------------------------------------------------------
</TABLE>
CLASS A SHARES Class A shares are sold at net asset value plus an
initial sales charge of up to 5.25%. The initial sales charge is
reduced for purchases of $25,000 or more according to the schedule
below. Investments of $1 million or more are not subject to an initial
sales charge, but are generally subject to a contingent deferred sales
charge, or CDSC, of 1.0% on sales made within one year after the last
day of the month of purchase. The CDSC will be assessed in the same
manner and with the same CDSC waivers as with Class B shares. Class A
shares are also subject to a distribution (12b-1) fee of up to 0.25% of
the average daily net assets of the Class.
18
<PAGE>
(SIDEBAR)
FRONT-END SALES CHARGE
OR FSC
AN INITIAL SALES CHARGE YOU PAY WHEN PURCHASING CLASS A SHARES THAT IS BASED ON
A PERCENTAGE OF THE OFFERING PRICE. THE PERCENTAGE DECLINES BASED UPON THE
DOLLAR VALUE OF CLASS A SHARES YOU PURCHASE. WE OFFER THREE WAYS TO REDUCE YOUR
CLASS A SALES CHARGES - THE COMBINED PURCHASE PRIVILEGE, RIGHT OF ACCUMULATION
AND LETTER OF INTENT.
(END SIDEBAR)
The offering price of Class A shares includes a sales charge (expressed as a
percentage of the offering price) on a single transaction as shown in the
following table:
<TABLE>
<CAPTION>
FRONT-END SALES CHARGE
----------------------------------------------
PERCENTAGE OF PUBLIC APPROXIMATE PERCENTAGE
AMOUNT OF 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 0.00% 0.00%
- ----------------------------------------------------------------------------------------
</TABLE>
The reduced sales charge schedule is applicable to purchases of Class
A shares in a single transaction by:
- A single account (including an individual, trust or fiduciary
account).
- Family member accounts (limited to husband, wife and children under
the age of 21).
- Pension, profit sharing or other employee benefit plans of
companies and their affiliates.
- 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 TCW/DW Multi-Class 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
TCW/DW 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 TCW/DW 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.
19
<PAGE>
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 TCW/DW Multi-Class 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 TCW/DW Multi-Class Funds which were previously
purchased at a price including a front-end sales charge during the
90-day period prior to the distributor receiving the letter of
intent, and (2) the cost of shares of other Funds you currently own
acquired in exchange for shares of Funds purchased during that period
at a price including a front-end sales charge. You can obtain a
letter of intent by contacting your Morgan Stanley Dean Witter
Financial Advisor or other authorized financial representative, or by
calling (800) 869-NEWS. If you do not achieve the stated investment
goal within the thirteen-month period, you are required to pay the
difference between the sales charges otherwise applicable and sales
charges actually paid, which may be deducted from your investment.
OTHER SALES CHARGE WAIVERS. In addition to investments of $1 million
or more, your purchase of Class A shares is not subject to a
front-end sales charge (or a CDSC upon sale) if your account
qualifies under one of the following categories:
- A trust for which Morgan Stanley Dean Witter Trust FSB provides
discretionary trustee services.
- 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.
- A 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.
- Current or retired Directors/Trustees of the Morgan Stanley Dean
Witter Funds, such persons' spouses and children under the age of
21, and trust accounts for which any of such persons is a
beneficiary.
- Current or retired directors, officers and employees of Morgan
Stanley Dean Witter & Co. and any of its subsidiaries, such
persons' spouses and children under the age of 21, and trust
accounts for which any of such persons is a beneficiary.
20
<PAGE>
(SIDEBAR)
CONTINGENT DEFERRED SALES CHARGE OR CDSC
A FEE YOU PAY WHEN YOU SELL SHARES OF CERTAIN TCW/DW FUNDS PURCHASED WITHOUT AN
INITIAL SALES CHARGE. THIS FEE DECLINES THE LONGER YOU HOLD YOUR SHARES AS SET
FORTH IN THE TABLE.
(END SIDEBAR)
CLASS B SHARES Class B shares are offered at net asset value with no
initial sales charge but are subject to a contingent deferred sales
charge, or CDSC, as set forth in the table below. for the purpose of
calculating the CDSC, shares are deemed to have been purchased on the
last day of the month during which they were purchased.
<TABLE>
<CAPTION>
CDSC AS A PERCENTAGE
YEAR SINCE PURCHASE PAYMENT MADE OF AMOUNT REDEEMED
<S> <C>
- ----------------------------------------------------------------
First 5.0%
- ----------------------------------------------------------------
Second 4.0%
- ----------------------------------------------------------------
Third 3.0%
- ----------------------------------------------------------------
Fourth 2.0%
- ----------------------------------------------------------------
Fifth 2.0%
- ----------------------------------------------------------------
Sixth 1.0%
- ----------------------------------------------------------------
Seventh and thereafter None
- ----------------------------------------------------------------
</TABLE>
Each time you place an order to sell or exchange shares, shares with no CDSC
will be sold or exchanged first, then shares with the lowest CDSC will be
sold or exchanged next. For any shares subject to a CDSC, the CDSC will be
assessed on an amount equal to the lesser of the current market value or the
cost of the shares being sold.
CDSC WAIVERS. A CDSC, if otherwise applicable, will be waived in the case
of:
- Sales of shares held at the time you die or become disabled (within the
definition in Section 72(m)(7) of the Internal Revenue Code which relates
to the ability to engage in gainful employment), if the shares are: (i)
registered either in your name (not a trust) or in the names of you and
your spouse as joint tenants with right of survivorship; or (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 a 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.
21
<PAGE>
All waivers will be granted only following the Distributor receiving
confirmation of your entitlement. If you believe you are eligible for a CDSC
waiver, please contact your Financial Advisor or call (800) 869-NEWS.
DISTRIBUTION FEE. Class B shares are subject to an annual 12b-1 fee of 1.0%
of the lesser of: (a) the average daily aggregate gross purchases by all
shareholders of the Fund's Class B shares since the inception of the Fund
(not including reinvestments of dividends or capital gains distributions),
less the average daily aggregate net asset value of the Fund's Class B
shares sold by all shareholders since the Fund's inception upon which a CDSC
has been imposed or waived, or (b) the average daily net assets of Class B.
CONVERSION FEATURE. After ten (10) years, Class B shares will convert
automatically to Class A shares of the Fund with no initial sales charge.
The ten year period runs from the last day of the month in which the shares
were purchased, or in the case of Class B shares acquired through an
exchange, from the last day of the month in which the original Class B
shares were purchased; the shares will convert to Class A shares based on
their relative net asset values in the month following the ten year period.
At the same time, an equal proportion of Class B shares acquired through
automatically reinvested distributions will convert to Class A shares on the
same basis. (Class B shares held before May 1, 1997, however, will convert
to Class A shares in May 2007).
In the case of Class B shares held in a 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 TCW/DW 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 one of the five Money
Market Funds for which Morgan Stanley Dean Witter Advisors serves as
Investment Manager or TCW/DW North American Government Income Trust, the
holding period for conversion is frozen as of the last day of the month of
the exchange and resumes on the last day of the month you exchange back into
Class B shares.
EXCHANGING SHARES SUBJECT TO A CDSC. There are special considerations when
you exchange Fund shares that are subject to a CDSC. When determining the
length of time you held the shares and the corresponding CDSC rate, any
period (starting at the end of the month) during which you held shares of a
fund that does NOT charge a CDSC WILL NOT BE COUNTED. Thus, in effect the
"holding period" for purposes of calculating the CDSC is frozen upon
exchanging into a fund that does not charge a CDSC.
For example, if you held Class B shares of the Fund in a regular account for
one year, exchanged to Class B of another TCW/DW 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 TCW/DW 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
22
<PAGE>
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 TCW/DW Multi-Class
Fund subject to a higher CDSC rate will be subject to the higher rate, even
if the shares are re-exchanged into a Fund with a lower CDSC rate.
CLASS C SHARES Class C shares are sold at net asset value with no
initial sales charge but are subject to a CDSC of 1.0% on sales made
within one year after the last day of the month of purchase. The CDSC
will be assessed in the same manner and with the same CDSC waivers as
with Class B shares.
DISTRIBUTION FEE. Class C shares are subject to an annual distribution
(12b-1) fee of up to 1.0% of the average daily net assets of that Class. The
Class C shares' distribution fee may cause that Class to have higher
expenses and pay lower dividends than Class A or Class D shares. Unlike
Class B shares, Class C shares have no conversion feature and, accordingly,
an investor that purchases Class C shares may be subject to distribution
(12b-1) fees applicable to Class C shares for an indefinite period.
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 Morgan Stanley Dean Witter Advisors' 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.
MEETING CLASS D ELIGIBILITY MINIMUMS. To meet the $5 million ($25 million
for MSDW Eligible Plans) initial investment to qualify to purchase Class D
shares you may combine: (1) purchases in a single transaction of Class D
shares of the Fund and other continuously offered TCW/DW Multi-Class Funds
and/or (2) previous purchases of
23
<PAGE>
Class A shares of TCW/DW Multi-Class Funds, TCW/DW North American Government
Income Trust and five Money Market Funds advised by Morgan Stanley Dean
Witter Advisors you currently own.
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.
24
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
financial performance for the past 5 fiscal years of the Fund. Certain
information reflects financial results for a single Fund share. 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
- ----------------------------------------------------------------------------------------------------------------------------
YEARS ENDED JANUARY 31, 1999++ 1998*++ 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA:
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 12.09 $ 11.47 $ 9.48 $ 9.35 $ 16.05
- ----------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.05 (0.09) (0.04) (0.06) (0.17)
Net realized and unrealized gain (loss) (4.90) 0.71 2.03 0.19 (6.21)
--------- --------- --------- --------- ---------
Total income (loss) from investment operations (4.85) 0.62 1.99 0.13 (6.38)
- ----------------------------------------------------------------------------------------------------------------------------
Less distributions from net realized gain -- -- -- -- (0.32)
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 7.24 $ 12.09 $ 11.47 $ 9.48 $ 9.35
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN+ (40.12)% 5.41% 20.99% 1.39% (40.12)%
- ----------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
- ----------------------------------------------------------------------------------------------------------------------------
Expenses 2.98%(1) 2.81% 2.78% 2.98% 2.87%
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 0.49%(1) (0.64)% (0.29)% (0.61)% (1.46)%
- ----------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $105,678 $272,710 $270,843 $261,066 $294,774
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 27% 30% 29% 64% 145%
- ----------------------------------------------------------------------------------------------------------------------------
</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.
25
<PAGE>
<TABLE>
<CAPTION>
CLASS A++
- ---------------------------------------------------------------------------------------------------------
FOR THE YEAR
ENDED FOR THE PERIOD JULY 28,
JANUARY 31, 1997*
1999 THROUGH JANUARY 31, 1998
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA:
- ---------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 12.14 $ 15.22
- ---------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.15 (0.07)
Net realized and unrealized loss (4.96) (3.01)
------------ -------
Total loss from investment operations (4.81) (3.08)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 7.33 $ 12.14
- ---------------------------------------------------------------------------------------------------------
TOTAL RETURN+ (39.62)% (20.24)%(1)
- ---------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
- ---------------------------------------------------------------------------------------------------------
Expenses 2.21%(3) 2.15%(2)
- ---------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.26%(3) (1.04)%(2)
- ---------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $58 $110
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 27% 30%
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CLASS C++
- ---------------------------------------------------------------------------------------------------------
FOR THE YEAR
ENDED FOR THE PERIOD JULY 28,
JANUARY 31, 1997*
1999 THROUGH JANUARY 31, 1998
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA:
- ---------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 12.10 $ 15.22
- ---------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.06 (0.12)
Net realized and unrealized loss (4.92) (3.00)
------------ -------
Total loss from investment operations (4.86) (3.12)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 7.24 $ 12.10
- ---------------------------------------------------------------------------------------------------------
TOTAL RETURN+ (40.17)% (20.50)%(1)
- ---------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
- ---------------------------------------------------------------------------------------------------------
Expenses 2.98%(3) 2.91%(2)
- ---------------------------------------------------------------------------------------------------------
Net investment income (loss) 0.49%(3) (1.76)%(2)
- ---------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $369 $792
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 27% 30%
- ---------------------------------------------------------------------------------------------------------
</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.
26
<PAGE>
<TABLE>
<CAPTION>
CLASS D++
- -----------------------------------------------------------------------------------------------------------
FOR THE YEAR FOR THE PERIOD JULY 28,
ENDED 1997*
JANUARY 31, 1999 THROUGH JANUARY 31, 1998
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA:
- -----------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $12.16 $ 15.22
- -----------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.16 (0.04)
Net realized and unrealized loss (4.97) (3.02)
------- -------
Total loss from investment operations (4.81) (3.06)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 7.35 $ 12.16
- -----------------------------------------------------------------------------------------------------------
TOTAL RETURN+ (39.56)% (20.11)%(1)
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
- -----------------------------------------------------------------------------------------------------------
Expenses 1.98%(3) 1.86%(2)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.49%(3) (0.52)%(3)
- -----------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $5 $8
Portfolio turnover rate 27% 30%
</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.
27
<PAGE>
NOTES
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28
<PAGE>
PROSPECTUS - MAY 28, 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.
TCW/DW
LATIN AMERICAN GROWTH FUND
[BACK COVER PHOTO]
A MUTUAL FUND
THAT SEEKS LONG-TERM
CAPITAL APPRECIATION
TICKER SYMBOLS:
CLASS A: TLAAX CLASS C: TLACX
- -------------------- --------------------
CLASS B: TLABX CLASS D: TLADX
- -------------------- --------------------
(THE FUND'S INVESTMENT COMPANY ACT FILE NO. 811-6608)
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION TCW/DW
MAY 28, 1999 LATIN
AMERICAN
GROWTH FUND
- --------------------------------------------------------------------------------
This STATEMENT OF ADDITIONAL INFORMATION is not a PROSPECTUS. The PROSPECTUS
(dated May 28, 1999) for TCW/DW Latin American Growth Fund may be obtained
without charge from the Fund at its address or telephone number listed below or
from Dean Witter Reynolds at any of its branch offices.
TCW/DW Latin American Growth Fund
Two World Trade Center
New York, New York 10048
(800) 869-NEWS
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
I. Fund History........................................................................ 4
II. Description of the Fund and Its Investments and Risks.............................. 4
A. Classification.................................................................... 4
B. Investment Strategies and Risks................................................... 4
C. Fund Policies/Investment Restrictions............................................. 12
III. Management of the Fund............................................................ 13
A. Board of Trustees................................................................. 13
B. Management Information............................................................ 14
C. Compensation...................................................................... 18
IV. Control Persons and Principal Holders of Securities................................ 19
V. Management, Investment Advice and Other Services.................................... 20
A. Manager........................................................................... 20
B. The Adviser....................................................................... 20
C. Principal Underwriter............................................................. 20
D. Services Provided by the Manager, the Adviser and Fund Expenses Paid by Third
Parties......................................................................... 21
E. Dealer Reallowances............................................................... 22
F. Rule 12b-1 Plan................................................................... 22
G. Other Service Providers........................................................... 26
VI. Brokerage Allocation and Other Practices........................................... 26
A. Brokerage Transactions............................................................ 26
B. Commissions....................................................................... 27
C. Brokerage Selection............................................................... 27
D. Directed Brokerage................................................................ 28
E. Regular Broker-Dealers............................................................ 28
VII. Capital Stock and Other Securities................................................ 28
VIII. Purchase, Redemption and Pricing of Shares....................................... 29
A. Purchase/Redemption of Shares..................................................... 29
B. Offering Price.................................................................... 30
IX. Taxation of the Fund and Shareholders.............................................. 31
X. Underwriters........................................................................ 33
XI. Calculation of Performance Data.................................................... 33
XII. Financial Statements.............................................................. 34
</TABLE>
2
<PAGE>
GLOSSARY OF SELECTED DEFINED TERMS
- --------------------------------------------------------------------------------
The terms defined in this glossary are frequently used in this STATEMENT OF
ADDITIONAL INFORMATION (other terms used occasionally are defined in the text of
the document).
"ADVISER"--TCW Funds Management, Inc., a wholly-owned subsidiary of TCW.
"CUSTODIAN"--The Bank of New York.
"DEAN WITTER REYNOLDS"--Dean Witter Reynolds Inc., a wholly-owned broker-dealer
subsidiary of MSDW.
"DISTRIBUTOR"--Morgan Stanley Dean Witter Distributors Inc., a wholly-owned
broker-dealer subsidiary of MSDW.
"FINANCIAL ADVISORS"--Morgan Stanley Dean Witter authorized financial services
representatives.
"FUND"--TCW/DW Latin American Growth Fund, a registered open-end investment
company.
"INDEPENDENT TRUSTEES"--Trustees who are not "interested persons" (as defined by
the Investment Company Act) of the Fund.
"MANAGER"--Morgan Stanley Dean Witter Services Company Inc., a wholly-owned
subsidiary of Morgan Stanley Dean Witter Advisors Inc. The Manager may also be
referred to as MSDW Services Company.
"MORGAN STANLEY & CO."--Morgan Stanley & Co. Incorporated, a wholly-owned
broker-dealer subsidiary of MSDW.
"MORGAN STANLEY DEAN WITTER FUNDS"--Registered investment companies (i) for
which the MSDW Advisors serves as the investment advisor; and (ii) that hold
themselves out to investors as related companies for investment and investor
services.
"MSDW"--Morgan Stanley Dean Witter & Co., a preeminent global financial services
firm.
"MSDW ADVISORS"--Morgan Stanley Dean Witter Advisors, Inc., a wholly-owned
investment advisor subsidiary of MSDW.
"TCW"--The TCW Group, Inc., a preeminent investment management and investment
advisory services firm.
"TCW/DW FUNDS"--The registered investment companies managed by the Manager and
advised by the Adviser.
"TRANSFER AGENT"--Morgan Stanley Dean Witter Trust FSB, a wholly-owned transfer
agent subsidiary of MSDW.
"TRUSTEES"--The Board of Trustees of the Fund.
3
<PAGE>
I. FUND HISTORY
- --------------------------------------------------------------------------------
The Fund was organized under the laws of the Commonwealth of Massachusetts
on February 25, 1992 as a Massachusetts business trust.
II. DESCRIPTION OF THE FUND AND ITS INVESTMENTS AND RISKS
- --------------------------------------------------------------------------------
A. CLASSIFICATION
The Fund is an open-end, non-diversified management investment company whose
investment objective is long-term capital appreciation.
B. INVESTMENT STRATEGIES AND RISKS
The following discussion of the Fund's investment strategies and risks
should be read with the sections of the Fund's PROSPECTUS titled "Principal
Investment Strategies," "Principal Risks," "Additional Investment Strategy
Information" and "Additional Risk Information."
DEBT-TO-EQUITY CONVERSIONS. The Fund may participate with respect to up to
5% of its total assets in debt-to-equity conversions. Debt-to-equity conversion
programs are sponsored in varying degrees by certain Latin American countries
and permit investors to use external debt of a country to make equity
investments in local companies. Many conversion programs relate primarily to
investments in transportation, communication, utilities and similar
infrastructure related areas. The terms of the programs vary from country to
country, but include significant restrictions on the application of the proceeds
received in the conversion and on the repatriation of investment profits and
capital. In inviting conversion applications by holders of eligible debt, a
government will usually specify a mininum discount from par value that it will
accept for conversion. There can be no assurance that debt-to-equity conversion
programs will continue or be successful or that the Fund will be able to convert
all or any of its Latin American debt portfolio into equity investments.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. The Fund may enter into
forward foreign currency exchange contracts ("FORWARD CONTRACTS") as a hedge
against fluctuations in future foreign exchange rates. The Fund may conduct its
foreign currency exchange transactions either on a spot (i.e., cash) basis at
the spot rate prevailing in the foreign currency exchange market, or through
entering into forward contracts to purchase or sell foreign currencies. A
forward contract involves an obligation to purchase or sell a specific currency
at a future date, which may be any fixed number of days from the date of the
contract agreed upon by the parties, at a price set at the time of the contract.
These contracts are traded in the interbank market conducted directly between
currency traders (usually large, commercial and investment banks) and their
customers. Forward contracts only will be entered into with United States banks
and their foreign branches, foreign banks, insurance companies and other dealers
whose assets total $1 billion or more, or foreign banks whose assets total $1
billion or more. A forward contract generally has no deposit requirement, and no
commissions are charged at any stage for trades.
The Fund may enter into forward contracts under various circumstances. The
typical use of a forward contract is to "lock in" the price of a security in
U.S. dollars or some other foreign currency which the Fund is holding in its
portfolio. By entering into a forward contract for the purchase or sale, for a
fixed amount of dollars or other currency, of the amount of foreign currency
involved in the underlying security transactions, the Fund may be able to
protect itself against a possible loss resulting from an adverse change in the
relationship between the U.S. dollar or other currency which is being used for
the security purchase and the foreign currency in which the security is
denominated during the period between the date on which the security is
purchased or sold and the date on which payment is made or received.
The Adviser also may from time to time utilize forward contracts for other
purposes. For example, they may be used to hedge a foreign security held in the
portfolio or a security which pays out principal tied to an exchange rate
between the U.S. dollar and a foreign currency, against a decline in value of
the applicable foreign currency. They also may be used to lock in the current
exchange rate of the currency
4
<PAGE>
in which those securities anticipated to be purchased are denominated. At times,
the Fund may enter into "cross-currency" hedging transactions involving
currencies other than those in which securities are held or proposed to be
purchased are denominated.
The Fund will not enter into forward currency contracts or maintain a net
exposure to these contracts where the consummation of the contracts would
obligate the Fund to deliver an amount of foreign currency in excess of the
value of the Fund's portfolio securities.
Although the Fund values its assets daily in terms of U.S. dollars, it does
not intend to convert its holdings of foreign currencies into U.S. dollars on a
daily basis. It will, however, do so from time to time, and investors should be
aware of the costs of currency conversion. Although foreign exchange dealers do
not charge a fee for conversion, they do realize a profit based on the spread
between the prices at which they are buying and selling various currencies.
Thus, a dealer may offer to sell a foreign currency to the Fund at one rate,
while offering a lesser rate of exchange should the Fund desire to resell that
currency to the dealer.
The Fund may be limited in its ability to enter into hedging transactions
involving forward contracts by the Internal Revenue Code requirements relating
to qualification as a regulated investment company.
Forward currency contracts may limit gains on portfolio securities that
could otherwise be realized had they not been utilized and could result in
losses. The contracts also may increase the Fund's volatility and may involve a
significant amount of risk relative to the investment of cash.
OPTIONS AND FUTURES TRANSACTIONS. The Fund may engage in transactions in
listed and OTC options on eligible portfolio securities and stock indexes.
Listed options are issued or guaranteed by the exchange on which they are traded
or by a clearing corporation such as the Options Clearing Corporation ("OCC").
Ownership of a listed call option gives the Fund the right to buy from the OCC
(in the U.S.) or other clearing corporation or exchange, the underlying security
or currency covered by the option at the stated exercise price (the price per
unit of the underlying security) by filing an exercise notice prior to the
expiration date of the option. The writer (seller) of the option would then have
the obligation to sell to the OCC (in the U.S.) or other clearing corporation or
exchange, the underlying security or currency at that exercise price prior to
the expiration date of the option, regardless of its then current market price.
Ownership of a listed put option would give the Fund the right to sell the
underlying security or currency to the OCC (in the U.S.) or other clearing
corporation or exchange, at the stated exercise price. Upon notice of exercise
of the put option, the writer of the put would have the obligation to purchase
the underlying security or currency from the OCC (in the U.S.) or other clearing
corporation or exchange, at the exercise price.
COVERED CALL WRITING. The Fund is permitted to write covered call options
on portfolio securities and on the currencies in which they are denominated,
without limit.
The Fund will receive from the purchaser, in return for a call it has
written, a "premium;" i.e., the price of the option. Receipt of these premiums
may better enable the Fund to earn a higher level of current income than it
would earn from holding the underlying securities (or currencies) alone.
Moreover, the premium received will offset a portion of the potential loss
incurred by the Fund if the securities (or currencies) underlying the option
decline in value.
The Fund may be required, at any time during the option period, to deliver
the underlying security (or currency) against payment of the exercise price on
any calls it has written. This obligation is terminated upon the expiration of
the option period or at such earlier time when the writer effects a closing
purchase transaction. A closing purchase transaction is accomplished by
purchasing an option of the same series as the option previously written.
However, once the Fund has been assigned an exercise notice, the Fund will be
unable to effect a closing purchase transaction.
A call option is "covered" if the Fund owns the underlying security subject
to the option or has an absolute and immediate right to acquire that security
without additional cash consideration (or for additional consideration (in cash,
Treasury bills or other liquid portfolio securities) held in a segregated
5
<PAGE>
account on the Fund's books) upon conversion or exchange of other securities
held in its portfolio. A call option is also covered if the Fund holds a call on
the same security as the call written where the exercise price of the call held
is (i) equal to or less than the exercise price of the call written or (ii)
greater than the exercise price of the call written if the difference is
maintained by the Fund in cash, Treasury bills or other liquid portfolio
securities in a segregated account on the Fund's books.
Options written by the Fund normally have expiration dates of from up to
eighteen months from the date written. The exercise price of a call option may
be below, equal to or above the current market value of the underlying security
at the time the option is written.
COVERED PUT WRITING. If the Fund writes a covered put option, it incurs an
obligation to buy the security underlying the option from the purchaser of the
put, at the option's exercise price at any time during the option period, at the
purchaser's election. Through the writing of a put option, the Fund would
receive income from the premium paid by purchasers. The potential gain on a
covered put option is limited to the premium received on the option (less the
commissions paid on the transaction). During the option period, the Fund may be
required, at any time, to make payment of the exercise price against delivery of
the underlying security (or currency). A put option is "covered" if the Fund
maintains cash, Treasury bills or other liquid portfolio securities with a value
equal to the exercise price in a segregated account on the Fund's books, or
holds a put on the same security as the put written where the exercise price of
the put held is equal to or greater than the exercise price of the put written.
The operation of and limitations on covered put options in other respects are
substantially identical to those of call options.
PURCHASING CALL AND PUT OPTIONS. The Fund may purchase listed and OTC call
and put options in amounts equaling up to 5% of its total assets. The purchase
of a call option would enable the Fund, in return for the premium paid to lock
in a purchase price for a security or currency during the term of the option.
The purchase of a put option would enable the Fund, in return for a premium
paid, to lock in a price at which it may sell a security or currency during the
term of the option.
OTC OPTIONS. OTC options are purchased from or sold (written) to dealers or
financial institutions which have entered into direct agreements with the Fund.
With OTC options, such variables as expiration date, exercise price and premium
will be agreed upon between the Fund and the transacting dealer, without the
intermediation of a third party such as the OCC. The Fund will engage in OTC
option transactions only with member banks of the Federal Reserve Bank System or
primary dealers in U.S. Government securities or with affiliates of such banks
or dealers. The Fund will engage in OTC option transactions only with member
banks of the Federal Reserve System or primary dealers in U.S. Government
securities or with affiliates of such banks or dealers which have capital of at
least $50 million or whose obligations are guaranteed by an entity having
capital of at least $50 million.
RISKS OF OPTIONS TRANSACTIONS. The successful use of options depends on the
ability of the Adviser to forecast correctly interest rates, currency exchange
rates and/or market movements. If the market value of the portfolio securities
(or the currencies in which they are denominated) upon which call options have
been written increases, the Fund may receive a lower total return from the
portion of its portfolio upon which calls have been written than it would have
had such calls not been written. During the option period, the covered call
writer has, in return for the premium on the option, given up the opportunity
for capital appreciation above the exercise price should the market price of the
underlying security (or the value of its denominated currency) increase, but has
retained the risk of loss should the price of the underlying security (or the
value of its denominated currency) decline. The covered put writer also retains
the risk of loss should the market value of the underlying security decline
below the exercise price of the option less the premium received on the sale of
the option. In both cases, the writer has no control over the time when it may
be required to fulfill its obligation as a writer of the option. Prior to
exercise or expiration, an option position can only be terminated by entering
into a closing purchase or sale transaction. Once an option writer has received
an exercise notice, it cannot effect a closing purchase transaction in order to
terminate its obligation under the option and must deliver or receive the
underlying securities at the exercise price.
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The Fund's ability to close out its position as a writer of an option is
dependent upon the existence of a liquid secondary market on option exchanges.
There is no assurance that such a market will exist, particularly in the case of
OTC options.
In the event of the bankruptcy of a broker through which the Fund engages in
transactions in options, the Fund could experience delays and/or losses in
liquidating open positions purchased or sold through the broker and/or incur a
loss of all or part of its margin deposits with the broker. In the case of OTC
options, if the transacting dealer fails to make or take delivery of the
securities underlying an option it has written, in accordance with the terms of
that option, due to insolvency or otherwise, the Fund would lose the premium
paid for the option as well as any anticipated benefit of the transaction.
Each of the exchanges has established limitations governing the maximum
number of call or put options on the same underlying security which may be
written by a single investor, whether acting alone or in concert with others
(regardless of whether such options are written on the same or different
exchanges or are held or written on one or more accounts or through one or more
brokers). An exchange may order the liquidation of positions found to be in
violation of these limits and it may impose other sanctions or restrictions.
These position limits may restrict the number of listed options which the Fund
may write.
The hours of trading for options may not conform to the hours during which
the underlying securities are traded. To the extent that the option markets
close before the markets for the underlying securities, significant price and
rate movements can take place in the underlying markets that cannot be reflected
in the option markets.
FUTURES CONTRACTS. The Fund may purchase and sell interest rate, currency
and index futures contracts that are traded on U.S. and foreign commodity
exchanges on such underlying securities as U.S. Treasury bonds, notes, bills and
GNMA Certificates and/or any foreign government fixed-income security, on
various currencies and on such indexes of U.S. securities as may exist or come
into existence.
A futures contract purchaser incurs an obligation to take delivery of a
specified amount of the obligation underlying the contract at a specified time
in the future for a specified price. A seller of a futures contract incurs an
obligation to deliver the specified amount of the underlying obligation at a
specified time in return for an agreed upon price. The purchase of a futures
contract enables the Fund, during the term of the contract, to lock in a price
at which it may purchase a security or currency and protect against a rise in
prices pending purchase of portfolio securities. The sale of a futures contract
enables the Fund to lock in a price at which it may sell a security or currency
and protect against declines in the value of portfolio securities.
The Fund will purchase or sell index futures contracts for the purpose of
hedging some or all of its portfolio securities against changes in their prices.
If the Adviser anticipates that the prices of securities held by the Fund may
fall, the Fund may sell an index futures contract. Conversely, if the Fund
wishes to hedge against anticipated price rises in those securities which the
Fund intends to purchase, the Fund may purchase an index futures contract.
In addition, futures contracts will be bought or sold in order to close out
a short or long position maintained by the Fund in a corresponding futures
contract.
Although most futures contracts call for actual delivery or acceptance of
securities, the contracts usually are closed out before the settlement date
without the making or taking of delivery. Index futures contracts provide for
the delivery of an amount of cash equal to a specified dollar amount times the
difference between the index value at the open or close of the last trading day
of the contract and the futures contract price. A futures contract sale is
closed out by effecting a futures contract purchase for the same aggregate
amount of the specific type of security (currency) and the same delivery date.
If the sale price exceeds the offsetting purchase price, the seller would be
paid the difference and would realize a gain. If the offsetting purchase price
exceeds the sale price, the seller would pay the difference and would realize a
loss. Similarly, a futures contract purchase is closed out by effecting a
futures
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contract sale for the same aggregate amount of the specific type of security
(currency) and the same delivery date. If the offsetting sale price exceeds the
purchase price, the purchaser would realize a gain, whereas if the purchase
price exceeds the offsetting sale price, the purchaser would realize a loss.
There is no assurance that the Fund will be able to enter into a closing
transaction.
MARGIN. If the Fund enters into a futures contract, it is initially
required to deposit an "initial margin" of cash or U.S. Government securities or
other liquid portfolio securities ranging from approximately 2% to 5% of the
contract amount. Initial margin requirements are established by the exchanges on
which futures contracts trade and may, from time to time, change. In addition,
brokers may establish margin deposit requirements in excess of those required by
the exchanges.
Initial margin in futures transactions is different from margin in
securities transactions in that initial margin does not involve the borrowing of
funds by a broker's client but is, rather, a good faith deposit on the futures
contract which will be returned to the Fund upon the proper termination of the
futures contract. The margin deposits made are marked to market daily and the
Fund may be required to make subsequent deposits of cash or U.S. Government
securities, called "variation margin," which are reflective of price
fluctuations in the futures contract.
OPTIONS ON FUTURES CONTRACTS. The Fund may purchase and write call and put
options on futures contracts and enter into closing transactions with respect to
such options to terminate an existing position. An option on a futures contract
gives the purchaser the right (in return for the premium paid), and the writer
the obligation, to assume a position in a futures contract (a long position if
the option is a call and a short position if the option is a put) at a specified
exercise price at any time during the term of the option. Upon exercise of the
option, the delivery of the futures position by the writer of the option to the
holder of the option is accompanied by delivery of the accumulated balance in
the writer's futures margin account, which represents the amount by which the
market price of the futures contract at the time of exercise exceeds, in the
case of a call, or is less than, in the case of a put, the exercise price of the
option on the futures contract.
The writer of an option on a futures contract is required to deposit initial
and variation margin pursuant to requirements similar to those applicable to
futures contracts. Premiums received from the writing of an option on a futures
contract are included in initial margin deposits.
LIMITATIONS ON FUTURES CONTRACTS AND OPTIONS ON FUTURES. The Fund may not
enter into futures contracts or purchase related options thereon if, immediately
thereafter, the amount committed to margin plus the amount paid for premiums for
unexpired options on futures contracts exceeds 5% of the value of the Fund's
total assets, after taking into account unrealized gains and unrealized losses
on such contracts it has entered into, provided, however, that in the case of an
option that is in-the-money (the exercise price of the call (put) option is less
(more) than the market price of the underlying security) at the time of
purchase, the in-the-money amount may be excluded in calculating the 5%.
However, there is no overall limitation on the percentage of the Fund's net
assets which may be subject to a hedge position.
RISKS OF TRANSACTIONS IN FUTURES CONTRACTS AND RELATED OPTIONS. The prices
of securities and indexes subject to futures contracts (and thereby the futures
contract prices) may correlate imperfectly with the behavior of the cash prices
of the Fund's portfolio securities (and the currencies in which they are
denominated). Also, prices of futures contracts may not move in tandem with the
changes in prevailing interest rates, market movements and/or currency exchange
rates against which the Fund seeks a hedge. A correlation may also be distorted
(a) temporarily, by short-term traders' seeking to profit from the difference
between a contract or security price objective and their cost of borrowed funds;
(b) by investors in futures contracts electing to close out their contracts
through offsetting transactions rather than meet margin deposit requirements;
(c) by investors in futures contracts opting to make or take delivery of
underlying securities rather than engage in closing transactions, thereby
reducing liquidity of the futures market; and (d) temporarily, by speculators
who view the deposit requirements in the futures markets as less onerous than
margin requirements in the cash market. Due to the possibility of price
distortion in the futures market and because of the possible imperfect
correlation between
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movements in the prices of securities and movements in the prices of futures
contracts, a correct forecast of interest rate, currency exchange rate and/or
market movement trends by the Adviser may still not result in a successful
hedging transaction.
There is no assurance that a liquid secondary market will exist for futures
contracts and related options in which the Fund may invest. In the event a
liquid market does not exist, it may not be possible to close out a futures
position and, in the event of adverse price movements, the Fund would continue
to be required to make daily cash payments of variation margin. In addition,
limitations imposed by an exchange or board of trade on which futures contracts
are traded may compel or prevent the Fund from closing out a contract which may
result in reduced gain or increased loss to the Fund. The absence of a liquid
market in futures contracts might cause the Fund to make or take delivery of the
underlying securities (currencies) at a time when it may be disadvantageous to
do so.
Exchanges limit the amount by which the price of a futures contract may move
on any day. If the price moves equal the daily limit on successive days, then it
may prove impossible to liquidate a futures position until the daily limit moves
have ceased. In the event of adverse price movements, the Fund would continue to
be required to make daily cash payments of variation margin on open futures
positions. In these situations, if the Fund has insufficient cash, it may have
to sell portfolio securities to meet daily variation margin requirements at a
time when it may be disadvantageous to do so. In addition, the Fund may be
required to take or make delivery of the instruments underlying interest rate
futures contracts it holds at a time when it is disadvantageous to do so. The
inability to close out options and futures positions could also have an adverse
impact on the Fund's ability to effectively hedge its portfolio.
Futures contracts and options thereon which are purchased or sold on foreign
commodities exchanges may have greater price volatility than their U.S.
counterparts. Furthermore, foreign commodities exchanges may be less regulated
and under less governmental scrutiny than U.S. exchanges. Brokerage commissions,
clearing costs and other transaction costs may be higher on foreign exchanges.
Greater margin requirements may limit the Fund's ability to enter into certain
commodity transactions on foreign exchanges. Moreover, differences in clearance
and delivery requirements on foreign exchanges may occasion delays in the
settlement of the Fund's transactions effected on foreign exchanges.
In the event of the bankruptcy of a broker through which the Fund engages in
transactions in futures or options thereon, the Fund could experience delays
and/or losses in liquidating open positions purchased or sold through the broker
and/or incur a loss of all or part of its margin deposits with the broker.
MONEY MARKET SECURITIES. The Fund may invest in various U.S. money market
securities for cash management purposes or when assuming a temporary defensive
position, which among others may include commercial paper, bank acceptances,
bank obligations, corporate debt securities, certificates of deposit, U.S.
Government securities and obligations of savings institutions and repurchase
agreements. Such securities are limited to:
U.S. GOVERNMENT SECURITIES. Obligations issued or guaranteed as to
principal and interest by the United States or its agencies (such as the
Export-Import Bank of the United States, Federal Housing Administration and
Government National Mortgage Association) or its instrumentalities (such as the
Federal Home Loan Bank), including Treasury bills, notes and bonds;
BANK OBLIGATIONS. Obligations (including certificates of deposit and
bankers' acceptances) of banks subject to regulation by the U.S. Government and
having total assets of $1 billion or more, and instruments secured by such
obligations, not including obligations of foreign branches of domestic banks
except to the extent below;
EURODOLLAR CERTIFICATES OF DEPOSIT. Eurodollar certificates of deposit
issued by foreign branches of domestic banks having total assets of $1 billion
or more;
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OBLIGATIONS OF SAVINGS INSTITUTIONS. Certificates of deposit of savings
banks and savings and loan associations, having total assets of $1 billion or
more;
FULLY INSURED CERTIFICATES OF DEPOSIT. Certificates of deposit of banks and
savings institutions having total assets of less than $1 billion, if the
principal amount of the obligation is federally insured by the Bank Insurance
Fund or the Savings Association Insurance Fund (each of which is administered by
the FDIC), limited to $100,000 principal amount per certificate and to 15% or
less of the Fund's total assets in all such obligations and in all illiquid
assets, in the aggregate;
COMMERCIAL PAPER. Commercial paper rated within the two highest grades by
Standard & Poor's Corporation ("S&P") or the two highest grade by Moody's
Investor's Service, Inc. ("Moody's") or, if not rated, issued by a company
having an outstanding debt issue rated at least AAA by S&P or Aaa by Moody's;
and
REPURCHASE AGREEMENTS. The Fund may invest in repurchase agreements. When
cash may be available for only a few days, it may be invested by the Fund in
repurchase agreements until such time as it may otherwise be invested or used
for payments of obligations of the Fund. These agreements, which may be viewed
as a type of secured lending by the Fund, typically involve the acquisition, by
the Fund, of debt securities from a selling financial institution such as a
bank, savings and loan association or broker-dealer. The agreement provides that
the Fund will sell back to the institution, and that the institution will
repurchase, the underlying security serving as collateral at a specified price
and at a fixed time in the future, usually not more than seven days from the
date of purchase. The collateral will be marked-to-market daily to determine
that the value of the collateral, as specified in the agreement, does not
decrease below the purchase price plus accrued interest. If such decrease
occurs, additional collateral will be requested and, when received, added to the
account to maintain full collateralization. The Fund will accrue interest from
the institution until the time when the repurchase is to occur. Although this
date is deemed by the Fund to be the maturity date of a repurchase agreement,
the maturities of securities subject to repurchase agreements are not subject to
any limits.
While repurchase agreements involve certain risks not associated with direct
investments in debt securities, the Fund follows procedures designed to minimize
such risks. These procedures include effecting repurchase transactions only with
large, well-capitalized and well-established financial institutions whose
financial condition will be continually monitored by the Adviser subject to
procedures established by the Trustees. In addition, as described above, the
value of the collateral underlying the repurchase agreement will be at least
equal to the repurchase price, including any accrued interest earned on the
repurchase agreement. In the event of a default or bankruptcy by a selling
financial institution, the Fund will seek to liquidate such collateral. However,
the exercising of the Fund's right to liquidate such collateral could involve
certain costs or delays and, to the extent that proceeds from any sale upon a
default of the obligation to repurchase were less than the repurchase price, the
Fund could suffer a loss. It is the current policy of the Fund not to invest in
repurchase agreements that do not mature within seven days if any such
investment, together with any other illiquid assets held by the Fund, amounts to
more than 15% of its net assets.
LENDING PORTFOLIO SECURITIES. The Fund may lend its portfolio securities to
brokers, dealers and other financial institutions, provided that the loans are
callable at any time by the Fund, and are at all times secured by cash or cash
equivalents, which are maintained in a segregated account pursuant to applicable
regulations and that are equal to at least 100% of the market value, determined
daily, of the loaned securities. The advantage of these loans is that the Fund
continues to receive the income on the loaned securities while at the same time
earning interest on the cash amounts deposited as collateral, which will be
invested in short-term obligations. The Fund will not lend more than 25% of the
value of its total assets.
As with any extensions of credit, there are risks of delay in recovery and,
in some cases, even loss of rights in the collateral should the borrower of the
securities fail financially. However, these loans of portfolio securities will
only be made to firms deemed by the Fund's management to be creditworthy and
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when the income which can be earned from such loans justifies the attendant
risks. Upon termination of the loan, the borrower is required to return the
securities to the Fund. Any gain or loss in the market price during the loan
period would inure to the Fund.
When voting or consent rights which accompany loaned securities pass to the
borrower, the Fund will follow the policy of calling the loaned securities, to
be delivered within one day after notice, to permit the exercise of the rights
if the matters involved would have a material effect on the Fund's investment in
the loaned securities. The Fund will pay reasonable finder's, administrative and
custodial fees in connection with a loan of its securities.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES AND FORWARD COMMITMENTS. The
Fund may purchase securities on a when-issued or delayed delivery basis or may
purchase or sell securities on a forward commitment basis. When these
transactions are negotiated, the price is fixed at the time of the commitment,
but delivery and payment can take place a month or more after the date of
commitment. While the Fund will only purchase securities on a when-issued,
delayed delivery or forward commitment basis with the intention of acquiring the
securities, the Fund may sell the securities before the settlement date, if it
is deemed advisable. The securities so purchased or sold are subject to market
fluctuation and no interest or dividends accrue to the purchaser prior to the
settlement date.
At the time the Fund makes the commitment to purchase or sell securities on
a when-issued, delayed delivery or forward commitment basis, it will record the
transaction and thereafter reflect the value, each day, of such security
purchased, or if a sale, the proceeds to be received, in determining its net
asset value. At the time of delivery of the securities, their value may be more
or less than the purchase or sale price. An increase in the percentage of the
Fund's assets committed to the purchase of securities on a when-issued, delayed
delivery or forward commitment basis may increase the volatility of its net
asset value. The Fund will also establish a segregated account on the Fund's
books in which it will continually maintain cash or cash equivalents or other
liquid portfolio securities equal in value to commitments to purchase securities
on a when-issued, delayed delivery or forward commitment basis.
WHEN, AS AND IF ISSUED SECURITIES. The Fund may purchase securities on a
"when, as and if issued" basis under which the issuance of the security depends
upon the occurrence of a subsequent event, such as approval of a merger,
corporate reorganization or debt restructuring. The commitment for the purchase
of any such security will not be recognized in the portfolio of the Fund until
the Adviser determines that issuance of the security is probable. At that time,
the Fund will record the transaction and, in determining its net asset value,
will reflect the value of the security daily. At that time, the Fund will also
establish a segregated account on the Fund's books in which it will maintain
cash or cash equivalents or other liquid portfolio securities equal in value to
recognized commitments for such securities.
An increase in the percentage of the Fund's assets committed to the purchase
of securities on a "when, as and if issued" basis may increase the volatility of
its net asset value. The Fund may also sell securities on a "when, as and if
issued" basis provided that the issuance of the security will result
automatically from the exchange or conversion of a security owned by the Fund at
the time of sale.
PRIVATE PLACEMENTS AND RESTRICTED SECURITIES. The Fund may invest up to 15%
of its net assets in securities which are subject to restrictions on resale
because they have not been registered under the Securities Act of 1933 (the
"Securities Act"), or which are otherwise not readily marketable. (Securities
eligible for resale pursuant to Rule 144A under the Securities Act, and
determined to be liquid pursuant to the procedures discussed in the following
paragraph, are not subject to the foregoing restriction.) These securities are
generally referred to as "private placements" or "restricted securities."
Limitations on the resale of these securities may have an adverse effect on
their marketability, and may prevent the Fund from disposing of them promptly at
reasonable prices. The Fund may have to bear the expense of registering the
securities for resale and the risk of substantial delays in effecting the
registration.
Rule 144A permits the Fund to sell restricted securities to qualified
institutional buyers without limitation. The Adviser, pursuant to procedures
adopted by the Trustees, will make a determination as to the liquidity of each
restricted security purchased by the Fund. If a restricted security is
determined to be "liquid," the security will not be included within the category
"illiquid securities," which may not exceed
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15% of the Fund's net assets. However, investing in Rule 144A securities could
have the effect of increasing the level of Fund illiquidity to the extent the
Fund, at a particular point in time, may be unable to find qualified
institutional buyers interested in purchasing such securities.
WARRANTS AND SUBSCRIPTION RIGHTS. The Fund may invest up to 5% of the value
of its net assets in warrants, including not more than 2% in warrants not listed
on either the New York or American Stock Exchange. A warrant is, in effect, an
option to purchase equity securities at a specific price, generally valid for a
specific period of time, and has no voting rights, pays no dividends and has no
rights with respect to the corporation issuing it. The Fund may acquire warrants
and subscription rights attached to other securities without reference to the
percentage limitations.
A subscription right is a privilege granted to existing shareholders of a
corporation to subscribe to shares of a new issue of common stock before it is
offered to the public. A subscription right normally has a life of two to four
weeks and a subscription price lower than the current market value of the common
stock. A subscription right is freely transferable. The Fund may invest up to 5%
of the value of its net assets in rights.
NON-DIVERSIFIED STATUS. The Fund is a "non-diversified" mutual fund and, as
such, its investments are not required to meet certain diversification
requirements under federal securities law. Compared with "diversified" funds,
the Fund may invest a greater percentage of its assets in the securities of an
individual corporation or governmental entity. Thus, the Fund's assets may be
concentrated in fewer securities than other funds. A decline in the value of
those investments would cause the Fund's overall value to decline to a greater
degree. The Fund's investments, however, are currently diversified and may
remain diversified in the future.
YEAR 2000. The management services provided to the Fund by the Manager, the
investment advisory services provided to the Fund by the Adviser and the
services provided to shareholders by the Distributor and the Transfer Agent
depend on the smooth functioning of their computer systems. Many computer
software systems in use today cannot recognize the year 2000, but revert to 1900
or some other date, due to the manner in which dates were encoded and
calculated. That failure could have a negative impact on the handling of
securities trades, pricing and account services. The Manager, the Adviser, the
Distributor and the Transfer Agent have been actively working on necessary
changes to their own computer systems to prepare for the year 2000 and expect
that their systems will be adapted before that date, but there can be no
assurance that they will be successful, or that interaction with other non-
complying computer systems will not impair their services at that time.
In addition, it is possible that the markets for securities in which the
Fund invests may be detrimentally affected by computer failures throughout the
financial services industry beginning January 1, 2000. Improperly functioning
trading systems may result in settlement problems and liquidity issues. In
addition, corporate and governmental data processing errors may result in
production problems for individual companies and overall economic uncertainties.
Earnings of individual issuers will be affected by remediation costs, which may
be substantial and may be reported inconsistently in U.S. and foreign financial
statements. Accordingly, the Fund's investments may be adversely affected.
C. FUND POLICIES/INVESTMENT RESTRICTIONS
The investment objective, policies and restrictions listed below have been
adopted by the Fund as fundamental policies. Under the Investment Company Act of
1940 (the "Investment Company Act"), a fundamental policy may not be changed
without the vote of a majority of the outstanding voting securities of the Fund.
The Investment Company Act defines a majority as the lesser of (a) 67% or more
of the shares present at a meeting of shareholders, if the holders of 50% of the
outstanding shares of the Fund are present or represented by proxy; or (b) more
than 50% of the outstanding shares of the Fund. For purposes of the following
restrictions: (i) all percentage limitations apply immediately after a purchase
or initial investment; and (ii) any subsequent change in any applicable
percentage resulting from market fluctuations or other changes in total or net
assets does not require elimination of any security from the portfolio.
The Fund will:
1. Seek long-term capital appreciation.
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The Fund may not:
1. Invest 25% or more of the value of its total assets in securities
of issuers in any one industry. This restriction does not apply to
obligations issued or guaranteed by the United States Government, its
agencies or instrumentalities or to cash equivalents.
2. Invest more than 5% of the value of its total assets in securities
of issuers having a record, together with predecessors, of less than 3 years
of continuous operation. This restriction does not apply to any obligation
of the United States Government, its agencies or instrumentalities.
3. Purchase or sell real estate or interests therein (including
limited partnership interests), although the Fund may purchase securities of
issuers which engage in real estate operations and securities secured by
real estate or interests therein.
4. Purchase oil, gas or other mineral leases, rights or royalty
contracts, or exploration or development programs, except that the Fund may
invest in the securities of companies which operate, invest in, or sponsor
these programs.
5. Purchase or sell commodities or commodities contracts except that
the Fund may purchase or sell futures contracts or options on futures.
6. Borrow money, except that the Fund may borrow from a bank for
temporary or emergency purposes, in amounts not exceeding 5% (taken at the
lower of cost or current value) of its total assets (not including the
amount borrowed).
7. Pledge its assets or assign or otherwise encumber them except to
secure permitted borrowings. For the purpose of this restriction, collateral
arrangements with respect to initial or variation margin for futures are not
deemed to be pledges of assets.
8. Issue senior securities as defined in the Investment Company Act,
except insofar as the Fund may be deemed to have issued a senior security by
reason of: (a) entering into any repurchase agreement; (b) purchasing any
securities on a when-issued or delayed delivery basis; (c) purchasing or
selling any financial futures contracts or options thereon; (d) borrowing
money; or (e) lending portfolio securities.
9. Make loans of money or securities, except: (a) by the purchase of
publicly distributed debt obligations; (b) by investment in repurchase
agreements; or (c) by lending its portfolio securities.
10. Make short sales of securities.
11. Purchase securities on margin, except for short-term loans as are
necessary for the clearance of portfolio securities. The deposit or payment
by the Fund of initial or variation margin in connection with futures
contracts or related options thereon is not considered the purchase of a
security on margin.
12. Engage in the underwriting of securities, except insofar as the
Fund may be deemed an underwriter under the Securities Act in disposing of a
portfolio security. (The Fund may invest in restricted securities subject to
the non-fundamental limitations contained in the Prospectus.)
13. Invest for the purpose of exercising control or management of any
other issuer.
As a non-fundamental policy, as to 75% of its total assets, purchase
more than 10% of all outstanding voting securities or any class of
securities of any one issuer.
III. MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------
A. BOARD OF TRUSTEES
The Board of Trustees of the Fund oversees the management of the Fund but
does not itself manage the Fund. The Trustees review various services provided
by or under the direction of the Adviser to ensure that the Fund's general
investment policies and programs are properly carried out. The Trustees also
conduct their review of the Manager to ensure that administrative services are
provided to the Fund in a satisfactory manner.
13
<PAGE>
Under state law, the duties of the Trustees are generally characterized as a
duty of loyalty and a duty of care. The duty of loyalty requires a Trustee to
exercise his or her powers in the interest of the Fund and not the Trustee's own
interest or the interest of another person or organization. A Trustee satisfies
his or her duty of care by acting in good faith with the care of an ordinarily
prudent person and in a manner the Trustee reasonably believes to be in the best
interest of the Fund and its shareholders.
B. MANAGEMENT INFORMATION
TRUSTEES AND OFFICERS. The Board of the Fund consists of eight (8)
Trustees. These same individuals also serve as trustees for all of the TCW/DW
Funds. Four Trustees (50% of the total number) have no affiliation or business
connection with the Manager or Adviser or any of their affiliated persons and do
not own any stock or other securities issued by the Manager's parent company,
MSDW or the Adviser's parent company, TCW. These are the "disinterested" or
"independent" Trustees. The other four Trustees (the "Management Trustees") are
affiliated with the Manager or Adviser. Four of the five Independent Trustees
also serve as Independent Trustees of "Discover Brokerage Index Series" a mutual
fund for which the Manager is the investment advisor. Four of the five
Independent Trustees are also Independent Trustees of the Morgan Stanley Dean
Witter Funds.
The Trustees and executive officers of the Fund, their principal business
occupations during the last five years and their affiliations, if any, with the
Manager or the Adviser, and with the 86 Morgan Stanley Dean Witter Funds, the 11
TCW/DW Funds and Discover Brokerage Index Series are shown below.
<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ---------------------------------------------- ------------------------------------------------------------------
<S> <C>
John C. Argue (67) ........................... Of Counsel, Argue Pearson Harbison & Myers (law firm); Trustee of
Trustee the TCW/DW Funds; Director, Avery Dennison Corporation
c/o Argue Pearson Harbison & Myers (manufacturer of self-adhesive products and office supplies);
801 South Flower Street Chairman, The Rio Hondo Memorial Foundation (charitable
Los Angeles, California foundation); advisory director, LAACO Ltd. (owner and operator of
private clubs and real estate); director or trustee of various
business and not-for-profit corporations; Director, TCW Galileo
Funds, Inc.; Director, TCW Convertible Securities Fund, Inc.;
Director, Apex Mortgage Capital, Inc. and Nationwide Health
Properties, Inc. (real estate investment trusts).
Richard M. DeMartini* (46) ................... President and Chief Operating Officer of Morgan Stanley Dean
Trustee Witter Individual Asset Management Group, a business unit of MSDW;
Two World Trade Center President and Chief Operating Officer of Dean Witter Reynolds;
New York, New York Trustee of the TCW/DW Funds and the Van Kampen American Capital
Funds; Director and/or officer of various MSDW subsidiaries;
formerly Vice Chairman of the Board of the National Association of
Securities Dealers, Inc.; and Chairman of the Board of Directors
of the NASDAQ Market, Inc.
Charles A. Fiumefreddo* (66) ................. Chairman, Director or Trustee and Chief Executive Officer of the
Chairman of the Board, Morgan Stanley Dean Witter Funds, the TCW/DW Funds and Discover
Chief Executive Officer and Trustee Brokerage Index Series; formerly Chairman, Chief Executive Officer
Two World Trade Center and Director of the Manager, the Distributor and MSDW Advisors;
New York, New York Executive Vice President and Director of Dean Witter Reynolds;
Chairman and Director of the Transfer Agent; formerly Director
and/or officer of various MSDW subsidiaries (until June, 1998).
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ---------------------------------------------- ------------------------------------------------------------------
<S> <C>
Dr. Manuel H. Johnson (50) ................... Senior Partner, Johnson Smick International, Inc., a consulting
Trustee firm; Co-Chairman and a founder of the Group of Seven Council
c/o Johnson Smick International, Inc. (G7C), an international economic commission; Chairman of the Audit
1133 Connecticut Avenue, N.W. Committee and Director or Trustee of the Morgan Stanley Dean
Washington, D.C. Witter Funds, the TCW/DW Funds and Discover Brokerage Index
Series; Director of NASDAQ, Greenwich Capital Markets, Inc.
(broker-dealer) and NVR, Inc. (home construction); Chairman and
Trustee of the Financial Accounting Foundation (oversight
organization of the Financial Accounting Standards Board);
formerly Vice Chairman of the Board of Governors of the Federal
Reserve System (1986-1990) and Assistant Secretary of the U.S.
Treasury.
Thomas E. Larkin, Jr.* (59) .................. Executive Vice President and Director, TCW; President and
President and Trustee Director, Trust Company of the West; Vice Chairman and Director of
865 South Figueroa Street TCW Asset Management Company; Vice Chairman and Director of the
Los Angeles, California Adviser; President and Director of TCW Galileo Funds, Inc.; Senior
Vice President of TCW Convertible Securities Fund, Inc.; President
and Trustee of the TCW/DW Funds; Member of the Board of Trustees
of the University of Notre Dame; Director of Los Angeles
Orthopaedic Hospital Foundation.
Michael E. Nugent (63) ....................... General Partner, Triumph Capital, L.P., a private investment
Trustee partnership; Chairman of the Insurance Committee and Director or
c/o Triumph Capital, L.P. Trustee of the Morgan Stanley Dean Witter Funds, the TCW/DW Funds
237 Park Avenue New York, and Discover Brokerage Index Series; formerly Vice President,
New York Bankers Trust Company and BT Capital Corporation (1984-1988);
Director of various business organizations.
John L. Schroeder (68) ....................... Retired; Chairman of the Derivatives Committee and Director or
Trustee Trustee of the Morgan Stanley Dean Witter Funds, the TCW/DW Funds
c/o Gordon Altman Butowsky and Discover Brokerage Index Series; Director of Citizens
Weitzen Shalov & Wein Utilities Company (telecommunications, gas, electric and water
Counsel to the Independent Trustees utilities company); formerly Executive Vice President and Chief
114 West 47th Street Investment Officer of the Home Insurance Company (August,
New York, New York 1991-September, 1995).
Marc I. Stern* (55) .......................... President and Director, TCW; Chairman and Director of the Adviser;
Trustee Vice Chairman and Director of TCW Asset Management Company;
865 South Figueroa Street Executive Vice President and Director of Trust Company of the
Los Angeles, California West; Chairman and Director of the TCW Galileo Funds, Inc.;
Trustee of the TCW/DW Funds; formerly President and Director of
SunAmerica, Inc. (financial services company)(1988-1990); Director
of Qualcomm, Incorporated (wireless communications); director or
trustee of various not-for-profit organizations.
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ---------------------------------------------- ------------------------------------------------------------------
<S> <C>
Mitchell M. Merin (45) ....................... President and Chief Operating Officer of Asset Management of MSDW
President (since December, 1998); President and Director (since April, 1997)
Two World Trade Center and Chief Executive Officer (since June, 1998) of the Investment
New York, New York Manager and MSDW Services Company; Chairman, Chief Executive
Officer and Director of the Distributor (since June, 1998);
Chairman and Chief Executive Officer (since June, 1998) and
Director (since January, 1998) of the Transfer Agent; Director of
various MSDW subsidiaries; President of the Morgan Stanley Dean
Witter Funds, the TCW/DW Funds and Discover Brokerage Index Series
(since May, 1999); previously Chief Strategic Officer of the
Investment Manager and MSDW Services Company and Executive Vice
President of the Distributor (April, 1997-June, 1998), Vice
President of the Morgan Stanley Dean Witter Funds, the TCW/DW
Funds and Discover Brokerage Index Series (May, 1997-April, 1999),
and Executive Vice President of Dean Witter, Discover & Co.
Barry Fink (44) .............................. Senior Vice President (since March, 1997), Secretary and General
Vice President, Counsel (since February, 1997) and Director (since July, 1998) of
Secretary and General Counsel the Manager and MSDW Advisors; Senior Vice President (since March,
Two World Trade Center 1997) and Assistant Secretary and Assistant General Counsel (since
New York, New York February, 1997) of the Distributor; Assistant Secretary of Dean
Witter Reynolds (since August, 1996); Vice President, Secretary
and General Counsel of the TCW/DW Funds and the Morgan Stanley
Dean Witter Funds (since February, 1997); Vice President,
Secretary and General Counsel of Discover Brokerage Index Series;
previously First Vice President (June, 1993-February, 1997), Vice
President and Assistant Secretary and Assistant General Counsel of
the Manager and MSDW Advisors and Assistant Secretary of the
TCW/DW Funds and the Morgan Stanley Dean Witter Funds.
Michael P. Reilly (35) ....................... Managing Director of the Adviser, Trust Company of the West and
Vice President TCW Asset Management Company; previously Vice President of TCW/DW
865 South Figueroa Street Emerging Markets Opportunities Trust.
Los Angeles, California
Thomas F. Caloia (53) ........................ First Vice President and Assistant Treasurer of the Manager and
Treasurer MSDW Advisors; Treasurer of the TCW/DW Funds, the Morgan Stanley
Two World Trade Center Dean Witter Funds and Discover Brokerage Index Series.
New York, New York
</TABLE>
- ------------
*Denotes Trustees who are "interested persons" of the Fund as defined by the
Investment Company Act.
In addition, RONALD E. ROBISON, Executive Vice President, Chief
Administrative Officer and Director of the Manager and MSDW Advisors and ROBERT
S. GIAMBRONE, Senior Vice President of the Manager, MSDW Advisors, the
Distributor and the Transfer Agent and Director of the Transfer Agent are Vice
Presidents of the Fund.
16
<PAGE>
In addition, FRANK BRUTTOMESSO, MARILYN K. CRANNEY, LOU ANNE D. MCINNIS,
CARSTEN OTTO and RUTH ROSSI, First Vice Presidents and Assistant General
Counsels of the Manager and MSDW Advisors, and TODD LEBO, Vice President and
Assistant General Counsel of MSDW Advisors and the Manager, are Assistant
Secretaries of the Fund.
INDEPENDENT TRUSTEES AND THE COMMITTEES. Law and regulation establish both
general guidelines and specific duties for the Independent Trustees. The TCW/DW
Funds seek as Independent Trustees individuals of distinction and experience in
business and finance, government service or academia; these are people whose
advice and counsel are in demand by others and for whom there is often
competition. To accept a position on the Funds' Boards, such individuals may
reject other attractive assignments because the Funds make substantial demands
on their time. All of the Independent Trustees serve as members of the Audit
Committee. In addition, three of the Trustees, including two Independent
Trustees, serve as members of the Derivatives Committee and the Insurance
Committee.
The Independent Trustees are charged with recommending to the full Board
approval of management, advisory and administration contracts, Rule 12b-1 plans
and distribution and underwriting agreements; continually reviewing Fund
performance; checking on the pricing of portfolio securities, brokerage
commissions, transfer agent costs and performance, and trading among Funds in
the same complex; and approving fidelity bond and related insurance coverage and
allocations, as well as other matters that arise from time to time. The
Independent Trustees are required to select and nominate individuals to fill any
Independent Trustee vacancy on the Board of any Fund that has a Rule 12b-1 plan
of distribution. Each of the open-end TCW/DW Funds has a Rule 12b-1 plan.
The Audit Committee is charged with recommending to the full Board the
engagement or discharge of the Fund's independent accountants; directing
investigations into matters within the scope of the independent accountants'
duties, including the power to retain outside specialists; reviewing with the
independent accountants the audit plan and results of the auditing engagement;
approving professional services provided by the independent accountants and
other accounting firms prior to the performance of the services; reviewing the
independence of the independent accountants; considering the range of audit and
non-audit fees; reviewing the adequacy of the Fund's system of internal
controls; and preparing and submitting Committee meeting minutes to the full
Board.
The Board of each Fund has a Derivatives Committee to approve parameters for
and monitor the activities of the Fund with respect to derivative investments,
if any, made by the Fund.
Finally, the Board of each Fund has formed an Insurance Committee to review
and monitor the insurance coverage maintained by the Fund.
ADVANTAGES OF HAVING SAME INDIVIDUALS AS INDEPENDENT TRUSTEES FOR TCW/DW
FUNDS. The Independent Trustees and the Funds' management believe that having
the same Independent Trustees for each of the TCW/DW Funds avoids the
duplication of effort that would arise from having different groups of
individuals serving as Independent Trustees for each of the Funds or even of
sub-groups of Funds. They believe that having the same individuals serve as
Independent Trustees of all the Funds tends to increase their knowledge and
expertise regarding matters which affect the Fund complex generally and enhances
their ability to negotiate on behalf of each Fund with the Fund's service
providers. This arrangement also precludes the possibility of separate groups of
Independent Trustees arriving at conflicting decisions regarding operations and
management of the Funds and avoids the cost and confusion that would likely
ensue. Finally, having the same Independent Trustees serve on all Fund Boards
enhances the ability of each Fund to obtain, at modest cost to each separate
Fund, the services of Independent Trustees, of the caliber, experience and
business acumen of the individuals who serve as Independent Trustees of the
TCW/DW Funds.
TRUSTEE AND OFFICER INDEMNIFICATION. The Fund's Declaration of Trust
provides that no Trustee, officer, employee or agent of the Fund is liable to
the Fund or to a shareholder, nor is any Trustee, officer, employee or agent
liable to any third persons in connection with the affairs of the Fund, except
as such liability may arise from his/her or its own bad faith, willful
misfeasance, gross negligence or reckless disregard of his/her or its duties. It
also provides that all third persons shall look solely to the Fund
17
<PAGE>
property for satisfaction of claims arising in connection with the affairs of
the Fund. With the exceptions stated, the Declaration of Trust provides that a
Trustee, officer, employee or agent is entitled to be indemnified against all
liability in connection with the affairs of the Fund.
C. COMPENSATION
The Fund pays each Independent Trustee an annual fee of $2,800 plus a per
meeting fee of $200 for meetings of the Board of Trustees or Committees of the
Board of Trustees attended by the Trustee (the Fund pays the Chairman of the
Audit Committee an additional annual fee of $750, and the Chairmen of the
Derivatives and Insurance Committees additional annual fees of $500 and pays the
Chairman of the Committee of the Independent Trustees an additional annual fee
of $1,200). If a Board meeting and a Committee meeting, or more than one
Committee meeting, take place on a single day, the Trustees are paid a single
meeting fee by the Fund. The Fund also reimburses such Trustees for travel and
other out-of-pocket expenses incurred by them in connection with attending such
meetings. Trustees and officers of the Fund who are or have been employed by the
Manager, the Adviser or an affiliated company receive no compensation or expense
reimbursement from the Fund for their services as Trustee. The Trustees of the
TCW/DW Funds do not have retirement or deferred compensation plans.
The following table illustrates the compensation that the Fund paid to its
Independent Trustees for the fiscal year ended January 31, 1999.
FUND COMPENSATION
<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
FROM THE
NAME OF INDEPENDENT TRUSTEE FUND
- --------------------------- ------------
<S> <C>
John C. Argue.............. $5,600
Dr. Manuel H. Johnson...... 5,600
Michael E. Nugent.......... 5,600
John L. Schroeder.......... 5,800
</TABLE>
The following table illustrates the compensation paid to the Fund's
Independent Trustees for the calendar year ended December 31, 1998 for services
to the 11 TCW/DW Funds that were in operation at December 31, 1998, and, in the
case of Messrs. Johnson, Nugent and Schroeder, the 85 Morgan Stanley Dean Witter
Funds that were in operation at December 31, 1998; and, in the case of Mr.
Argue, TCW Galileo Funds, Inc. and TCW Convertible Securities Fund, Inc. With
respect to Messrs. Johnson, Nugent and Schroeder, the Morgan Stanley Dean Witter
Funds are included solely because of a limited exchange privilege between
various TCW/DW Funds and five Morgan Stanley Dean Witter Money Market Funds.
With respect to Mr. Argue, TCW Galileo Funds, Inc. and TCW Convertible
Securities Fund, Inc. are included solely because the Fund's Adviser, TCW Funds
Management, Inc., also serves as Advisor to those investment companies.
CASH COMPENSATION FROM MORGAN STANLEY DEAN WITTER FUNDS AND TCW/DW FUNDS
<TABLE>
<CAPTION>
TOTAL CASH
FOR SERVICE COMPENSATION
AS DIRECTOR FOR FOR SERVICES
OR SERVICE AS TO
TRUSTEE AND TRUSTEE 85 MORGAN
COMMITTEE AND STANLEY DEAN
MEMBER COMMITTEE WITTER FUNDS
OF 85 MORGAN MEMBER OF AND 11
NAME OF STANLEY DEAN 11 TCW/DW TCW/DW
INDEPENDENT TRUSTEE WITTER FUNDS FUNDS FUNDS
- ------------------------ ------------ ---------- ------------
<S> <C> <C> <C>
John C. Argue........... -- $62,331 $ 62,331
Dr. Manuel H. Johnson... $128,400 62,331 190,731
Michael E. Nugent....... 132,450 62,131 194,581
John L. Schroeder....... 132,450 64,731 197,181
</TABLE>
As of the date of this STATEMENT OF ADDITIONAL INFORMATION, 55 of the Morgan
Stanley Dean Witter Funds have adopted a retirement program under which an
Independent Trustee who retires after serving for at least five years (or such
lesser period as may be determined by the Board) as an Independent Director or
Trustee of any Morgan Stanley Dean Witter Fund that has adopted the retirement
program
18
<PAGE>
(each such Fund referred to as an "Adopting Fund" and each such Trustee referred
to as an "Eligible Trustee") is entitled to retirement payments upon reaching
the eligible retirement age (normally, after attaining age 72). Annual payments
are based upon length of service.
Currently, upon retirement, each Eligible Trustee is entitled to receive
from the Adopting Fund, commencing as of his or her retirement date and
continuing for the remainder of his or her life, an annual retirement benefit
(the "Regular Benefit") equal to 30.22% of his or her Eligible Compensation plus
0.5036667% of such Eligible Compensation for each full month of service as an
Independent Director or Trustee of any Adopting Fund in excess of five years up
to a maximum of 60.44% after ten years of service. The foregoing percentages may
be changed by the Board.(1) "Eligible Compensation" is one-fifth of the total
compensation earned by such Eligible Trustee for service to the Adopting Fund in
the five year period prior to the date of the Eligible Trustee's retirement.
Benefits under the retirement program are accrued as expenses on the books of
the Adopting Funds. Such benefits are not secured or funded by the Adopting
Funds.
The following table illustrates the retirement benefits accrued to Messrs.
Johnson, Nugent and Schroeder by the 55 Morgan Stanley Dean Witter Funds for the
year ended December 31, 1998, and the estimated retirement benefits for the
Independent Trustees, to commence upon their retirement, from the 55 Morgan
Stanley Dean Witter Funds as of December 31, 1998.
RETIREMENT BENEFITS FROM ALL MORGAN STANLEY DEAN WITTER FUNDS
<TABLE>
<CAPTION>
FOR ALL ADOPTING FUNDS
---------------------------
ESTIMATED
CREDITED RETIREMENT
YEARS ESTIMATED BENEFITS ESTIMATED ANNUAL
OF SERVICE PERCENTAGE ACCRUED AS BENEFITS UPON
AT OF EXPENSES RETIREMENT(2)
NAME OF RETIREMENT ELIGIBLE BY ALL FROM ALL
INDEPENDENT TRUSTEE (MAXIMUM 10) COMPENSATION ADOPTING FUNDS ADOPTING FUNDS
- ---------------------------- ------------ ------------ -------------- ------------------
<S> <C> <C> <C> <C>
Dr. Manuel H. Johnson....... 10 60.44% $14,047 $52,250
Michael E. Nugent........... 10 60.44 25,336 52,250
John L. Schroeder........... 8 50.37 45,117 44,343
</TABLE>
- ------------------------
(1) An Eligible Trustee may elect alternative payments of his or her retirement
benefits based upon the combined life expectancy of the Eligible Trustee
and his or her spouse on the date of such Eligible Trustee's retirement. In
addition, the Eligible Trustee may elect that the surviving spouse's
periodic payment of benefits will be equal to a lower percentage of the
periodic amount when both spouses were alive. The amount estimated to be
payable under this method, through the remainder of the later of the lives
of the Eligible Trustee and spouse, will be the actuarial equivalent of the
Regular Benefit.
(2) Based on current levels of compensation. Amount of annual benefits also
varies depending on the Trustee's elections described in Footnote 1 above.
IV. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
- --------------------------------------------------------------------------------
The following owned 5% or more of the outstanding shares of Class A on May
1, 1999: Resources Trust Co. Trust IRA u/a dated 01/12/95 for the benefit of
Robert A. Lincoln, Denver, CO 80217-5900-- 7.1% and Beatus Trust u/a dated
3/1/71 B L Beatus MD Trustee, 55 Humphreys Center Suite 300, Memphis, TN
38120-2367--5.0%. The following owned 5% or more of the outstanding shares of
Class C on May 1, 1999; Dean Witter Reynolds Custodian for Barbara Thibodaux,
IRA Standard dated 01/11/94, 323 Jacobs Street, Berwick, LA 70342-2011--5.0%.
The following owned 5% or more of the outstanding shares of Class D on May 1,
1999: Morgan Stanley Dean Witter Advisors Inc. Attn: Maurice Bendrihem, Two
World Trade Center, 70th Floor, New York, New York 10048-0203--99.8%.
As of the date of this STATEMENT OF ADDITIONAL INFORMATION, the aggregate
number of shares of beneficial interest of the Fund owned by the Fund's officers
and Trustees as a group was less than 1% of the Fund's shares of beneficial
interest outstanding.
19
<PAGE>
V. MANAGEMENT, INVESTMENT ADVICE AND OTHER SERVICES
- --------------------------------------------------------------------------------
A. MANAGER
The Manager to the Fund is Morgan Stanley Dean Witter Services Company, a
Delaware corporation, whose address is Two World Trade Center, New York, New
York 10048. The Manager is a wholly-owned subsidiary of Morgan Stanley Dean
Witter Advisors Inc., a Delaware corporation. Morgan Stanley Dean Witter
Advisors is a wholly-owned subsidiary of Morgan Stanley, Dean Witter & Co.
("MSDW"), a Delaware corporation. MSDW is a preeminent global financial services
firm that maintains leading market positions in each of its three primary
businesses: securities, asset management and credit services.
Pursuant to a Management Agreement (the "Management Agreement") with the
Manager, the Fund has retained the Manager to manage the Fund's business
affairs, supervise the overall day-to-day operations of the Fund (other than
rendering investment advice) and provide all administrative services to the
Fund. The Fund pays the Manager monthly compensation calculated daily by
applying the following annual rates to the net assets of the Fund determined as
of the close of each business day: 0.75% of the portion of daily net assets not
exceeding $500 million; and 0.72% of the portion of daily net assets exceeding
$500 million. The management fee is allocated among the Classes pro rata based
on the net assets of the Fund attributable to each Class. For the fiscal years
ended January 31, 1997, 1998 and 1999, the Manager accrued total compensation
under the Management Agreement in the amounts of $1,930,277, $2,394,923 and
$1,476,124, respectively.
B. THE ADVISER
The Adviser to the Fund is TCW Funds Management, Inc., a wholly-owned
subsidiary of TCW, whose direct and indirect subsidiaries provide a variety of
trust, investment management and investment advisory services. The Adviser is
headquartered at 865 South Figueroa Street, Suite 1800, Los Angeles, California
90017.
Pursuant to an investment advisory agreement (the "Advisory Agreement") with
the Adviser, the Fund has retained the Adviser to invest the Fund's assets,
including the placing of orders for the purchase and sale of portfolio
securities. The Fund pays the Adviser monthly compensation calculated daily by
applying the following annual rates to the net assets of the Fund determined as
of the close of each business day: 0.50% of the portion of daily net assets not
exceeding $500 million; and 0.48% of the portion of daily net assets exceeding
$500 million. The advisory fee is allocated among the Classes pro rata based on
the net assets of the Fund attributable to each Class. For the fiscal years
ended January 31, 1997, 1998 and 1999, the Adviser accrued total compensation
under the Advisory Agreement in the amounts of $1,286,852, $1,596,615 and
$984,082, respectively.
Robert A. Day, who is Chairman of the Board of Directors of TCW, may be
deemed to be a control person of the Adviser by virtue of the aggregate
ownership by Mr. Day and his family of more than 25% of the outstanding voting
stock of TCW.
C. PRINCIPAL UNDERWRITER
The Fund's principal underwriter is the Distributor (which has the same
address as the Manager). In this capacity, the Fund's shares are distributed by
the Distributor. The Distributor has entered into a selected dealer agreement
with Dean Witter Reynolds, which through its own sales organization sells shares
of the Fund. In addition, the Distributor may enter into similar agreements with
other selected broker-dealers. The Distributor, a Delaware corporation, is a
wholly-owned subsidiary of MSDW.
The Distributor bears all expenses it may incur in providing services under
the Distribution Agreement. These expenses include the payment of commissions
for sales of the Fund's shares and incentive compensation to Financial Advisors.
The Distributor also pays certain expenses in connection with the distribution
of the Fund's shares, including the costs of preparing, printing and
distributing advertising or promotional materials, and the costs of printing and
distributing prospectuses and supplements thereto
20
<PAGE>
used in connection with the offering and sale of the Fund's shares. The Fund
bears the costs of initial typesetting, printing and distribution of
prospectuses and supplements thereto to shareholders. The Fund also bears the
costs of registering the Fund and its shares under federal and state securities
laws and pays filing fees in accordance with state securities laws.
The Fund and the Distributor have agreed to indemnify each other against
certain liabilities, including liabilities under the Securities Act. Under the
Distribution Agreement, the Distributor uses its best efforts in rendering
services to the Fund, but in the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of its obligations, the Distributor is
not liable to the Fund or any of its shareholders for any error of judgment or
mistake of law or for any act or omission or for any losses sustained by the
Fund or its shareholders.
D. SERVICES PROVIDED BY THE MANAGER, THE ADVISER AND FUND EXPENSES PAID BY THIRD
PARTIES
Under the terms of the Management Agreement, the Manager maintains certain
of the Fund's books and records and furnishes, at its own expense, the office
space, facilities, equipment, clerical help, bookkeeping and certain legal
services as the Fund may reasonably require in the conduct of its business,
including the preparation of prospectuses, proxy statements and reports required
to be filed with federal and state securities commissions (except insofar as the
participation or assistance of independent accountants and attorneys is, in the
opinion of the Manager, necessary or desirable). In addition, the Manager pays
the salaries of all personnel, including officers of the Fund, who are employees
of the Manager. The Manager also bears the cost of telephone service, heat,
light, power and other utilities provided to the Fund.
The Management Agreement provides that in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations thereunder, the Manager is not liable to the Fund or any of its
investors for any act or omission by the Manager or for any losses sustained by
the Fund or its investors.
The Management Agreement will remain in effect from year to year, provided
continuance of the Management Agreement is approved at least annually by the
vote of the holders of a majority, as defined in the Investment Company Act, of
the outstanding shares of the Fund, or by the Trustees; provided that in either
event such continuance is approved annually by the vote of a majority of the
Trustees. At a meeting held on April 22, 1999, the Board of Trustees, including
the Independent Trustees, approved continuance of the Management Agreement until
April 30, 2000.
Under the terms of the Advisory Agreement, the Adviser invests the Fund's
assets, including placing orders for the purchase and sale of portfolio
securities. The Adviser obtains and evaluates such information and advice
relating to the economy, securities markets, and specific securities as it
considers necessary or useful to continuously manage the assets of the Fund in a
manner consistent with its investment objective. In addition, the Adviser pays
the salaries of all personnel, including officers of the Fund, who are employees
of the Adviser.
The Advisory Agreement provides that in the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations thereunder,
the Adviser is not liable to the Fund or any of its investors for any act or
omission by the Adviser or for any losses sustained by the Fund or its
investors. The Advisory Agreement in no way restricts the Adviser from acting as
investment adviser to others.
The Advisory Agreement had an initial term ending April 30, 1994, and
provides that it will continue from year to year thereafter, provided
continuance of the Agreement is approved at least annually by the vote of the
holders of a majority, as defined in the Act, of the outstanding shares of the
Fund, or by the Trustees of the Fund; provided that in either event such
continuance is approved annually by the vote of a majority of the Independent
Trustees of the Fund, which vote must be cast in person at a meeting called for
the purpose of voting on such approval. At a meeting held on April 22, 1999, the
Board of Trustees, including the Independent Trustees, approved the continuance
of the Advisory Agreement until April 30, 2000.
21
<PAGE>
Expenses not expressly assumed by the Manager under the Management
Agreement, by the Adviser under the Advisory Agreement or by the Distributor,
will be paid by the Fund. These expenses will be allocated among the four
Classes of shares pro rata based on the net assets of the Fund attributable to
each Class, except as described below. Such expenses include, but are not
limited to: expenses of the Plan of Distribution pursuant to Rule 12b-1; charges
and expenses of any registrar, custodian, stock transfer and dividend disbursing
agent; brokerage commissions; taxes; engraving and printing share certificates;
registration costs of the Fund and its shares under federal and state securities
laws; the cost and expense of printing, including typesetting, and distributing
prospectuses of the Fund and supplements thereto to the Fund's shareholders; all
expenses of shareholders' and Trustees' meetings and of preparing, printing and
mailing of proxy statements and reports to shareholders; fees and travel
expenses of Trustees or members of any advisory board or committee who are not
employees of the Manager or Adviser or any corporate affiliate of either; all
expenses incident to any dividend, withdrawal or redemption options; charges and
expenses of any outside service used for pricing of the Fund's shares; fees and
expenses of legal counsel, including counsel to the Trustees who are not
interested persons of the Fund or of the Manager or the Adviser (not including
compensation or expenses of attorneys who are employees of the Manager or the
Adviser); fees and expenses of the Fund's independent accountants; membership
dues of industry associations; interest on Fund borrowings; postage; insurance
premiums on property or personnel (including officers and Trustees) of the Fund
which inure to its benefit; extraordinary expenses (including, but not limited
to, legal claims and liabilities and litigation costs and any indemnification
relating thereto); and all other costs of the Fund's operation. The 12b-1 fees
relating to a particular Class will be allocated directly to that Class. In
addition, other expenses associated with a particular Class (except advisory or
custodial fees) may be allocated directly to that Class, provided that such
expenses are reasonably identified as specifically attributable to that Class
and the direct allocation to that Class is approved by the Trustees.
E. DEALER REALLOWANCES
Upon notice to selected broker-dealers, the Distributor may reallow up to
the full applicable front-end sales charge during periods specified in such
notice. During periods when 90% or more of the sales charge is reallowed, such
selected broker-dealers may be deemed to be underwriters as that term is defined
in the Securities Act.
F. RULE 12b-1 PLAN
The Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 under the
Investment Company Act (the "Plan") pursuant to which each Class, other than
Class D, pays the Distributor compensation accrued daily and payable monthly at
the following annual rates: 0.25% and 1.0% of the average daily net assets of
Class A and Class C, respectively, and, with respect to Class B, 1.0% of the
lesser of: (a) the average daily aggregate gross sales 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 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 average daily net assets of Class B shares.
The Distributor also receives the proceeds of front-end sales charges
("FSCs") and of contingent deferred sales charges ("CDSCs") imposed on certain
redemptions of shares, which are separate and apart from payments made pursuant
to the Plan. The Distributor has informed the Fund that it and/or Dean Witter
Reynolds received the proceeds of CDSCs and FSCs, for the last three fiscal
years ended January 31, in approximate amounts as provided in the table below
(the Distributor did not retain any of these amounts).
<TABLE>
<CAPTION>
1999 1998 1997
----------------- ------------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Class A............................ FSCs:(1) $ 1,799 FSCs: $ 6,000 FSCs: N/A(2)
CDSCs: $ 2 CDSCs: $ 0 CDSCs: N/A(2)
Class B............................ CDSCs: $916,003 CDSCs: $1,105,599 CDSCs: $997,000
Class C............................ CDSCs: $ 2,365 CDSCs: $ 339 CDSCs: N/A(2)
</TABLE>
- ------------------------
(1) FSCs apply to Class A only.
(2) This Class commenced operations on July 28, 1997.
22
<PAGE>
The Distributor has informed the Fund that the entire fee payable by Class A
and a portion of the fees payable by each of Class B and Class C each year
pursuant to the Plan equal to 0.25% of such Class' average daily net assets are
currently each characterized as a "service fee" under the Rules of the National
Association of Securities Dealers, Inc. (of which the Distributor is a member).
The "service fee" is a payment made for personal service and/or the maintenance
of shareholder accounts. The remaining portion of the Plan fees payable by a
Class, if any, is characterized as an "asset-based sales charge" as such is
defined by the Rules of the Association.
Under the Plan and as required by Rule 12b-1, the Trustees receive and
review promptly after the end of each calendar quarter a written report provided
by the Distributor of the amounts expended under the Plan and the purpose for
which such expenditures were made. Class B shares of the Fund accrued amounts
payable to the Distributor under the Plan, during the fiscal year ended January
31, 1999, of $1,960,820. This amount is equal to 1.00% of the average daily net
assets of Class B for the fiscal year. For the fiscal year ended January 31,
1999, Class A and Class C shares of the Fund accrued payments under the Plan
amounting to $213 and $6,369, respectively, which amounts are equal to 0.23% and
1.00% of the average daily net assets of Class A and Class C, respectively, for
the fiscal year.
The Plan was adopted in order to permit the implementation of the Fund's
method of distribution. Under this distribution method the Fund offers four
Classes, each with a different distribution arrangement.
With respect to Class A shares, Dean Witter Reynolds compensates its
Financial Advisors by paying them, from proceeds of the FSC, commissions for the
sale of Class A shares, currently a gross sales credit of up to 5.0% of the
amount sold (except as provided in the following sentence) and an annual
residual commission, currently a residual of up to 0.25% of the current value of
the respective accounts for which they are the Financial Advisors or dealers of
record in all cases. On orders of $1 million or more (for which no sales charge
was paid) or net asset value purchases by employer-sponsored employee benefit
plans, whether or not qualified under the Internal Revenue Code, for which the
Transfer Agent serves as Trustee or Dean Witter Reynolds Retirement Plan
Services serves as recordkeeper pursuant to a written Recordkeeping Services
Agreement ("MSDW Eligible Plans"), MSDW Advisors compensates Financial Advisors
by paying them, from its own funds, a gross sales credit of 1.0% of the amount
sold.
With respect to Class B shares, Dean Witter Reynolds compensates its
Financial Advisors by paying them, from its own funds, commissions for the sale
of Class B shares, currently a gross sales credit of up to 5.0% of the amount
sold (except as provided in the following sentence) and an annual residual
commission, currently a residual of up to 0.25% of the current value (not
including reinvested dividends or distributions) of the amount sold in all
cases. In the case of Class B shares purchased on or after July 28, 1997 by MSDW
Eligible Plans, Dean Witter Reynolds compensates its Financial Advisors by
paying them, from its own funds, a gross sales credit of 3.0% of the amount
sold.
With respect to Class C shares, Dean Witter Reynolds compensates its
Financial Advisors by paying them, from its own funds, commissions for the sale
of Class C shares, currently a gross sales credit of up to 1.0% of the amount
sold and an annual residual commission, currently up to 1.0% of the current
value of the respective accounts for which they are the Financial Advisors of
record.
With respect to Class D shares other than shares held by participants in
MSDW Advisors' mutual fund asset allocation program, the MSDW Advisors
compensates Dean Witter Reynolds' Financial Advisors by paying them, from its
own funds, commissions for the sale of Class D shares, currently a gross sales
credit of up to 1.0% of the amount sold. There is a chargeback of 100% of the
amount paid if the Class D shares are redeemed in the first year and a
chargeback of 50% of the amount paid if the Class D shares are redeemed in the
second year after purchase. The Manager also compensates Dean Witter Reynolds'
Financial Advisors by paying them, from its own funds, an annual residual
commission, currently up to 0.10% of the current value of the respective
accounts for which they are the Financial Advisors of record (not including
accounts of participants in MSDW Advisors' mutual fund asset allocation
program).
23
<PAGE>
The gross sales credit is a charge which reflects commissions paid by Dean
Witter Reynolds to its Financial Advisors and Dean Witter Reynolds'
Fund-associated distribution-related expenses, including sales compensation, and
overhead and other branch office distribution-related expenses including (a) the
expenses of operating Dean Witter Reynolds' branch offices in connection with
the sale of Fund shares, including lease costs, the salaries and employee
benefits of operations and sales support personnel, utility costs,
communications costs and the costs of stationery and supplies; (b) the costs of
client sales seminars; (c) travel expenses of mutual fund sales coordinators to
promote the sale of Fund shares; and (d) other expenses relating to branch
promotion of Fund sales.
The distribution fee that the Distributor receives from the Fund under the
Plan, in effect, offsets distribution expenses incurred under the Plan on behalf
of the Fund and, in the case of Class B shares, opportunity costs, such as the
gross sales credit and an assumed interest charge thereon ("carrying charge").
In the Distributor's reporting of the distribution expenses to the Fund, in the
case of Class B shares, such assumed interest (computed at the "broker's call
rate") has been calculated on the gross credit as it is reduced by amounts
received by the Distributor under the Plan and any contingent deferred sales
charges received by the Distributor upon redemption of shares of the Fund. No
other interest charge is included as a distribution expense in the Distributor's
calculation of its distribution costs for this purpose. The broker's call rate
is the interest rate charged to securities brokers on loans secured by
exchange-listed securities.
The Fund is authorized to reimburse expenses incurred or to be incurred in
promoting the distribution of the Fund's Class A and Class C shares and in
servicing shareholder accounts. Reimbursement will be made through payments at
the end of each month. The amount of each monthly payment may in no event exceed
an amount equal to a payment at the annual rate of 0.25%, in the case of Class
A, and 1.0%, in the case of Class C, of the average net assets of the respective
Class during the month. No interest or other financing charges, if any, incurred
on any distribution expenses on behalf of Class A and Class C will be
reimbursable under the Plan. With respect to Class A, in the case of all
expenses other than expenses representing the service fee, and, with respect to
Class C, in the case of all expenses other than expenses representing a gross
sales credit or a residual to Financial Advisors and other authorized financial
representatives, such amounts shall be determined at the beginning of each
calendar quarter by the Trustees, including, a majority of the Independent
Trustees. Expenses representing the service fee (for Class A) or a gross sales
credit or a residual to Financial Advisors and other authorized financial
representatives (for Class C) may be reimbursed without prior determination. In
the event that the Distributor proposes that monies shall be reimbursed for
other than such expenses, then in making quarterly determinations of the amounts
that may be reimbursed by the Fund, the Distributor will provide and the
Trustees will review a quarterly budget of projected distribution expenses to be
incurred on behalf of the Fund, together with a report explaining the purposes
and anticipated benefits of incurring such expenses. The Trustees will determine
which particular expenses, and the portions thereof, that may be borne by the
Fund, and in making such a determination shall consider the scope of the
Distributor's commitment to promoting the distribution of the Fund's Class A and
Class C shares.
Each Class paid 100% of the amounts accrued under the Plan with respect to
that Class for the fiscal year ended January 31, 1999 to the Distributor. The
Distributor and Dean Witter Reynolds estimate that they have spent, pursuant to
the Plan, $41,025,810 on behalf of Class B since the inception of the Plan. It
is estimated that this amount was spent in approximately the following ways: (i)
6.60% ($2,707,050)-- advertising and promotional expenses; (ii) 0.62%
($254,170)--printing and mailing of prospectuses for distribution to other than
current shareholders; and (iii) 92.78% ($38,064,590)--other expenses, including
the gross sales credit and the carrying charge, of which 13.12% ($4,993,616)
represents carrying charges, 35.53% ($13,526,028) represents commission credits
to Dean Witter Reynolds branch offices and other selected broker-dealers for
payments of commissions to Financial Advisors and other authorized financial
representatives, and 51.35% ($19,544,946) represents overhead and other branch
office distribution-related expenses. The amounts accrued by Class A and a
portion of the amounts accrued
24
<PAGE>
by Class C under the Plan during the fiscal year ended January 31, 1999 were
service fees. The remainder of the amounts accrued by Class C were for expenses
which relate to compensation of sales personnel and associated overhead
expenses.
In the case of Class B shares, at any given time, the expenses of
distributing shares of the Fund may be more or less than the total of (i) the
payments made by the Fund pursuant to the Plan; and (ii) the proceeds of CDSCs
paid by investors upon redemption of shares. For example, if $1 million in
expenses in distributing Class B shares of the Fund had been incurred and
$750,000 had been received as described in (i) and (ii) above, the excess
expense would amount to $250,000. The Distributor has advised the Fund that in
the case of Class B shares the excess distribution expenses, including the
carrying charge designed to approximate the opportunity costs incurred by Dean
Witter Reynolds which arise from it having advanced monies without having
received the amount of any sales charges imposed at the time of sale of the
Fund's Class B shares, totaled $19,612,473 as of January 31, 1999 (the end of
the Fund's fiscal year), which was equal to 18.56% of the net assets of Class B
on such date. Because there is no requirement under the Plan that the
Distributor be reimbursed for all distribution expenses with respect to Class B
shares or any requirement that the Plan be continued from year to year, this
excess amount does not constitute a liability of the Fund. Although there is no
legal obligation for the Fund to pay expenses incurred in excess of payments
made to the Distributor under the Plan and the proceeds of CDSCs paid by
investors upon redemption of shares, if for any reason the Plan is terminated,
the Trustees will consider at that time the manner in which to treat such
expenses. Any cumulative expenses incurred, but not yet recovered through
distribution fees or CDSCs, may or may not be recovered through future
distribution fees or CDSCs.
In the case of Class A and Class C shares, expenses incurred pursuant to the
Plan in any calendar year in excess of 0.25% or 1.0% of the average daily net
assets of Class A or Class C, respectively, will not be reimbursed by the Fund
through payments in any subsequent year, except that expenses representing a
gross sales commission credited to Morgan Stanley Dean Witter Financial Advisors
and other authorized financial representatives at the time of sale may be
reimbursed in the subsequent calendar year. The Distributor has advised the Fund
that there were no such expenses that may be reimbursed in the subsequent
calender year. No interest or other financing charges will be incurred on any
Class A or Class C distribution expenses incurred by the Distributor under the
Plan or on any unreimbursed expenses due to the Distributor pursuant to the
Plan.
No interested person of the Fund nor any Independent Trustee has any direct
financial interest in the operation of the Plan except to the extent that the
Distributor, the Manager, Dean Witter Reynolds, MSDW Advisors or certain of
their employees may be deemed to have such an interest as a result of benefits
derived from the successful operation of the Plan or as a result of receiving a
portion of the amounts expended thereunder by the Fund.
On an annual basis, the Trustees, including a majority of the Independent
Trustees, consider whether the Plan should be continued. Prior to approving the
last continuation of the Plan, the Trustees requested and received from the
Distributor and reviewed all the information which they deemed necessary to
arrive at an informed determination. In making their determination to continue
the Plan, the Trustees considered: (1) the Fund's experience under the Plan and
whether such experience indicates that the Plan is operating as anticipated; (2)
the benefits the Fund had obtained, was obtaining and would be likely to obtain
under the Plan, including that: (a) the Plan is essential in order to give Fund
investors a choice of alternatives for payment of distribution and service
charges and to enable the Fund to continue to grow and avoid a pattern of net
redemptions which, in turn, are essential for effective investment management;
and (b) without the compensation to individual brokers and the reimbursement of
distribution and account maintenance expenses of Dean Witter Reynolds' branch
offices made possible by the 12b-1 fees, Dean Witter Reynolds could not
establish and maintain an effective system for distribution, servicing of Fund
shareholders and maintenance of shareholder accounts; and (3) what services had
been provided and were continuing to be provided under the Plan to the Fund and
its shareholders. Based upon their review, the Trustees, including each of the
Independent Trustees,
25
<PAGE>
determined that continuation of the Plan would be in the best interest of the
Fund and would have a reasonable likelihood of continuing to benefit the Fund
and its shareholders. In the Trustees' quarterly review of the Plan, they will
consider its continued appropriateness and the level of compensation provided
therein.
The Plan may not be amended to increase materially the amount to be spent
for the services described therein without approval by the shareholders of the
affected Class or Classes of the Fund, and all material amendments to the Plan
must also be approved by the Trustees in the manner described above. The Plan
may be terminated at any time, without payment of any penalty, by vote of a
majority of the Independent Trustees or by a vote of a majority of the
outstanding voting securities of the Fund (as defined in the Investment Company
Act) on not more than thirty days' written notice to any other party to the
Plan. So long as the Plan is in effect, the election and nomination of
Independent Trustees shall be committed to the discretion of the Independent
Trustees.
G. OTHER SERVICE PROVIDERS
(1) TRANSFER AGENT/DIVIDEND-PAYING AGENT
Morgan Stanley Dean Witter Trust FSB is the Transfer Agent for the Fund's
shares and the Dividend Disbursing Agent for payment of dividends and
distributions on Fund shares and Agent for shareholders under various investment
plans. The principal business address of the Transfer Agent is Harborside
Financial Center, Plaza Two, Jersey City, New Jersey 07311.
(2) CUSTODIAN AND INDEPENDENT ACCOUNTANTS
The Bank of New York, 90 Washington Street, New York, New York 10286, is the
Custodian of the Fund's assets. Any of the Fund's cash balances with the
Custodian in excess of $100,000 are unprotected by federal deposit insurance.
These balances may, at times, be substantial.
PricewaterhouseCoopers LLP serves as the independent accountants of the Fund.
The independent accountants are responsible for auditing the annual financial
statements of the Fund.
(3) AFFILIATED PERSONS
The Transfer Agent is an affiliate of the Manager, and of the Distributor.
As Transfer Agent and Dividend Disbursing Agent, the Transfer Agent's
responsibilities include maintaining shareholder accounts, disbursing cash
dividends and reinvesting dividends, processing account registration changes,
handling purchase and redemption transactions, mailing prospectuses and reports,
mailing and tabulating proxies, processing share certificate transactions, and
maintaining shareholder records and lists. For these services, the Transfer
Agent receives a per shareholder account fee from the Fund and is reimbursed for
its out-of-pocket expenses in connection with such services.
VI. BROKERAGE ALLOCATION AND OTHER PRACTICES
- --------------------------------------------------------------------------------
A. BROKERAGE TRANSACTIONS
Subject to the general supervision of the Trustees, the Adviser is
responsible for decisions to buy and sell securities for the Fund, the selection
of brokers and dealers to effect the transactions, and the negotiation of
brokerage commissions, if any. Purchases and sales of securities on a stock
exchange are effected through brokers who charge a commission for their
services. In the over-the-counter market, securities are generally traded on a
"net" basis with dealers acting as principal for their own accounts without a
stated commission, although the price of the security usually includes a profit
to the dealer. The Fund also expects that securities will be purchased at times
in underwritten offerings where the price includes a fixed amount of
compensation, generally referred to as the underwriter's concession or discount.
On occasion, the Fund may also purchase certain money market instruments
directly from an issuer, in which case no commissions or discounts are paid.
For the fiscal years ended January 31, 1997, 1998 and 1999, the Fund paid a
total of $561,946, $600,660 and $591,538, respectively, in brokerage
commissions.
26
<PAGE>
B. COMMISSIONS
Consistent with the policy described above, brokerage transactions in
securities listed on exchanges or admitted to unlisted trading privileges may be
effected through Dean Witter Reynolds, Morgan Stanley & Co. and other affiliated
brokers and dealers. In order for an affiliated broker or dealer to effect any
portfolio transactions on an exchange for the Fund, the commissions, fees or
other remuneration received by the affiliated broker or dealer must be
reasonable and fair compared to the commissions, fees or other remuneration paid
to other brokers in connection with comparable transactions involving similar
securities being purchased or sold on an exchange during a comparable period of
time. This standard would allow the affiliated broker or dealer to receive no
more than the remuneration which would be expected to be received by an
unaffiliated broker in a commensurate arm's-length transaction. Furthermore, the
Trustees, including the Independent Trustees, have adopted procedures which are
reasonably designed to provide that any commissions, fees or other remuneration
paid to an affiliated broker or dealer are consistent with the foregoing
standard. The Fund does not reduce the management fee it pays to the Manager by
any amount of the brokerage commissions it may pay to an affiliated broker or
dealer.
During the fiscal years ended January 31, 1997, 1998 and 1999 there were no
brokerage fees paid to Dean Witter Reynolds. During the period June 1, 1997
through January 31, 1998 and during the fiscal year ended January 31, 1999, the
Fund paid a total of $3,901 and $13,262, respectively, in brokerage commissions
to Morgan Stanley & Co., which broker-dealer became an affiliate of the Manager
on May 31, 1997 upon consummation of the merger of Dean Witter, Discover & Co.
with Morgan Stanley Group Inc. During the fiscal year ended January 31, 1999,
the brokerage commissions paid to Morgan Stanley & Co. represented approximately
2.24% of the total brokerage commissions paid by the Fund for this period and
were paid on account of transactions having an aggregate dollar value equal to
approximately 2.25% of the aggregate dollar value of all portfolio transactions
of the Fund during the year for which commissions were paid.
C. BROKERAGE SELECTION
The policy of the Fund regarding purchases and sales of securities for its
portfolio is that primary consideration will be given to obtaining the most
favorable prices and efficient executions of transactions. Consistent with this
policy, when securities transactions are effected on a stock exchange, the
Fund's policy is to pay commissions which are considered fair and reasonable
without necessarily determining that the lowest possible commissions are paid in
all circumstances. The Fund believes that a requirement always to seek the
lowest possible commission cost could impede effective portfolio management and
preclude the Fund and the Adviser from obtaining a high quality of brokerage and
research services. In seeking to determine the reasonableness of brokerage
commissions paid in any transaction, the Adviser relies upon its experience and
knowledge regarding commissions generally charged by various brokers and on its
judgment in evaluating the brokerage and research services received from the
broker effecting the transaction. These determinations are necessarily
subjective and imprecise, as in most cases an exact dollar value for those
services is not ascertainable.
In seeking to implement the Fund's policies, the Adviser effects
transactions with those brokers and dealers who the Adviser believes provide the
most favorable prices and are capable of providing efficient executions. If the
Adviser believes the prices and executions are obtainable from more than one
broker or dealer, it may give consideration to placing portfolio transactions
with those brokers and dealers who also furnish research and other services to
the Fund or the Adviser. Such services may include, but are not limited to, any
one or more of the following: reports on industries and companies, economic
analyses and review of business conditions, portfolio strategy, analytic
computer software, account performance services, computer terminals and various
trading and/or quotation equipment. They also include advice from broker-dealers
as to the value of securities, availability of securities, availability of
buyers, and availability of sellers. In addition, they include recommendations
as to purchase and sale of individual securities and timing of such
transactions. The information and services received by the Adviser from brokers
and dealers may be of benefit to the Adviser in the management of accounts of
some of its other clients and may not in all cases benefit the Fund directly.
27
<PAGE>
The Adviser currently serves as investment advisor to a number of clients,
including other investment companies, and may in the future act as investment
advisor to others. It is the practice of the Adviser to cause purchase and sale
transactions to be allocated among the Fund and others whose assets it manages
in such manner as it deems equitable. In making such allocations among the Fund
and other client accounts, various factors may be considered, including the
respective investment objectives, the relative size of portfolio holdings of the
same or comparable securities, the availability of cash for investment, the size
of investment commitments generally held and the opinions of the persons
responsible for managing the portfolios of the Fund and other client accounts.
In the case of certain initial and secondary public offerings, the Adviser
utilizes a pro rata allocation process based on the size of the funds involved
and the number of shares available from the public offering.
D. DIRECTED BROKERAGE
During the fiscal year ended January 31, 1999, the Fund paid $579,813 in
brokerage commissions in connection with transactions in the aggregate amount of
$167,721,535 to brokers because of research services provided.
E. REGULAR BROKER-DEALERS
During the fiscal year ended January 31, 1999, the Fund did not purchase
securities issued by brokers or dealers that were among the ten brokers or the
ten dealers that executed transactions for or with the Fund in the largest
dollar amounts during the year.
VII. CAPITAL STOCK AND OTHER SECURITIES
- --------------------------------------------------------------------------------
The shareholders of the Fund are entitled to a full vote for each full share
of beneficial interest held. The Fund is authorized to issue an unlimited number
of shares of beneficial interest. All shares of beneficial interest of the Fund
are of $0.01 par value and are equal as to earnings, assets and voting
privileges except that each Class will have exclusive voting privileges with
respect to matters relating to distribution expenses borne solely by such Class
or any other matter in which the interests of one Class differ from the
interests of any other Class. In addition, Class B shareholders will have the
right to vote on any proposed material increase in Class A's expenses, if such
proposal is submitted separately to Class A shareholders. Also, Class A, Class B
and Class C bear expenses related to the distribution of their respective
shares.
The Fund's Declaration of Trust permits the Trustees to authorize the
creation of additional series of shares (the proceeds of which would be invested
in separate, independently managed portfolios) and additional Classes of shares
within any series. The Trustees have not presently authorized any such
additional series or Classes of shares other than as set forth in the
PROSPECTUS.
The Fund is not required to hold annual meetings of shareholders and in
ordinary circumstances the Fund does not intend to hold such meetings. The
Trustees may call special meetings of shareholders for action by shareholder
vote as may be required by the Investment Company Act or the Declaration of
Trust. Under certain circumstances, the Trustees may be removed by action of the
Trustees or by the shareholders.
Under Massachusetts law, shareholders of a business trust may, under certain
limited circumstances, be held personally liable as partners for the obligations
of the Fund. However, the Declaration of Trust contains an express disclaimer of
shareholder liability for acts or obligations of the Fund, requires that notice
of such Fund obligations include such disclaimer, and provides for
indemnification out of the Fund's property for any shareholder held personally
liable for the obligations of the Fund. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the Fund itself would be unable to meet its obligations.
Given the above limitations on shareholder personal liability, and the nature of
the Fund's assets and operations, the possibility of the Fund being unable to
meet its obligations is remote and thus, in the opinion of Massachusetts counsel
to the Fund, the risk to Fund shareholders of personal liability is remote.
28
<PAGE>
The Trustees themselves have the power to alter the number and the terms of
office of the Trustees (as provided for in the Declaration of Trust), and they
may at any time lengthen or shorten their own terms or make their terms of
unlimited duration and appoint their own successors, provided that always at
least a majority of the Trustees has been elected by the shareholders of the
Fund. Under certain circumstances the Trustees may be removed by action of the
Trustees. The shareholders also have the right under certain circumstances to
remove the Trustees in accordance with the provisions of Section 16(c) of the
Investment Company Act of 1940. The voting rights of shareholders are not
cumulative, so that holders of more than 50 percent of the shares voting can, if
they choose, elect all Trustees being selected, while the holders of the
remaining shares would be unable to elect any Trustees.
VIII. PURCHASE, REDEMPTION AND PRICING OF SHARES
- --------------------------------------------------------------------------------
A. PURCHASE/REDEMPTION OF SHARES
Information concerning how Fund shares are offered to the public (and how
they are redeemed and exchanged) is provided in the Fund's PROSPECTUS.
TRANSFER AGENT AS AGENT. With respect to the redemption or repurchase of
Fund shares, the application of proceeds to the purchase of new shares in the
Fund or any other TCW/DW Multi-Class Fund, any shares of TCW/DW North American
Government Income Trust or any shares of five Morgan Stanley Dean Witter money
market funds and the general administration of the exchange privilege, the
Transfer Agent acts as agent for the Distributor and for the shareholder's
authorized broker-dealer, if any, in the performance of such functions. With
respect to exchanges, redemptions or repurchases, the Transfer Agent shall be
liable for its own negligence and not for the default or negligence of its
correspondents or for losses in transit. The Fund shall not be liable for any
default or negligence of the Transfer Agent, the Distributor or any authorized
broker-dealer.
The Distributor and any authorized broker-dealer have appointed the Transfer
Agent to act as their agent in connection with the application of proceeds of
any redemption of Fund shares to the purchase of shares of any other
continuously offered TCW/DW Multi-Class Fund, any shares of TCW/DW North
American Government Income Trust or any shares of five Morgan Stanley Dean
Witter money market funds and the general administration of the exchange
privilege. No commission or discounts will be paid to the Distributor or any
authorized broker-dealer for any transaction pursuant to the exchange privilege.
TRANSFERS OF SHARES. In the event a shareholder requests a transfer of Fund
shares to a new registration, the shares will be transferred without sales
charge at the time of transfer. With regard to the status of shares which are
either subject to the CDSC or free of such charge (and with regard to the length
of time shares subject to the charge have been held), any transfer involving
less than all of the shares in an account will be made on a pro rata basis (that
is, by transferring shares in the same proportion that the transferred shares
bear to the total shares in the account immediately prior to the transfer). The
transferred shares will continue to be subject to any applicable CDSC as if they
had not been so transferred.
EXCHANGING SHARES OF CLASSES WITH A CDSC
When exchanging shares of a Class of the Fund that imposes a CDSC, shares
that are not subject to a CDSC because they were (i) purchased more than one
year ago (for Class A and Class C) or six years ago (for Class B) or (ii)
acquired through reinvestment of dividends or distributions (all such shares
referred to as "Free Shares") will be exchanged first. After exchanging such
Free Shares the shares subject to a CDSC that were held the longest will be
exchanged next. Shares purchased during the same month are deemed to be held for
the same length of time. (For shares held for the same length of time but
subject to different CDSC rates, the shares with the lower CDSC rate will be
exchanged first.) When exchanging shares subject to a CDSC, you should know that
the CDSC rate will be calculated on such exchanged shares based on the lesser
of: (a) the purchase price of those shares; or (b) their current net asset value
at the time of the exchange. Accordingly, any appreciation in value on such
exchanged
29
<PAGE>
shares are not subject to a CDSC. When exchanging a portion of shares deemed to
be held for the same length of time, shares representing any appreciation in
value (and therefore, such shares will not be subject to any CDSC) will be
exchanged first.
B. OFFERING PRICE
The Fund's Class B, Class C and Class D shares are offered at net asset
value per share and the Class A shares are offered at net asset value per share
plus any applicable FSC which is distributed among the Fund's distributor, Dean
Witter Reynolds and other authorized dealers as described in Section "V.
Management, Investment Advice and Other Services--F. Rule 12b-1 Plan." The price
of Fund shares, called "net asset value," is based on the value of the Fund's
portfolio securities. Net asset value per share of each Class is calculated by
dividing the value of the portion of the Fund's securities and other assets
attributable to that Class, less the liabilities attributable to that Class, by
the number of shares of that Class outstanding. The assets of each Class of
shares are invested in a single portfolio. The net asset value of each Class,
however, will differ because the Classes have different ongoing fees.
In the calculation of the Fund's net asset value: (1) an equity portfolio
security listed or traded on the New York or American Stock Exchange or other
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 a security is traded on more than
one exchange, the security is valued on the exchange designated as the primary
market pursuant to procedures adopted by the Trustees); and (2) all other
portfolio securities for which over-the-counter market quotations are readily
available are valued at the latest bid price. When market quotations are not
readily available, including circumstances under which it is determined by the
Adviser that sale or bid prices are not reflective of a security's market value,
portfolio securities are valued at their fair value as determined in good faith
under procedures established by and under the general supervision of the Fund's
Trustees. For valuation purposes, quotations of foreign portfolio securities,
other assets and liabilities and forward contracts stated in foreign currency
are translated into U.S. dollar equivalents at the prevailing market rates prior
to the close of the New York Stock Exchange.
Short-term debt securities with remaining maturities of sixty days or less
at the time of purchase are valued at amortized cost, unless the Trustees
determine such does not reflect the securities' market value, in which case
these securities will be valued at their fair value as determined by the
Trustees.
Certain of the Fund's portfolio securities may be valued by an outside
pricing service approved by the Fund's Trustees. The pricing service may utilize
a matrix system incorporating security quality, maturity and coupon as the
evaluation model parameters, and/or research evaluations by its staff, including
review of broker-dealer market price quotations in determining what it believes
is the fair valuation of the portfolio securities valued by such pricing
service.
Generally, trading in foreign securities, as well as corporate bonds, U.S.
Government securities and money market instruments, is substantially completed
each day at various times prior to the close of the New York Stock Exchange. The
values of such securities used in computing the net asset value of the Fund's
shares are determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the New York Stock Exchange.
Occasionally, events which may affect the values of such securities and such
exchange rates may occur between the times at which they are determined and the
close of the New York Stock Exchange and will therefore not be reflected in the
computation of the Fund's net asset value. If events that may affect the value
of such securities occur during such period, then these securities may be valued
at their fair value as determined in good faith under procedures established by
and under the supervision of the Trustees.
Listed options on debt securities 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 prices. Unlisted options on debt securities and all options
on equity securities are valued at the mean between their latest bid and asked
prices. Futures are valued
30
<PAGE>
at the latest sale price on the commodities exchange on which they trade unless
the Trustees determine such price does not reflect their market value, in which
case they will be valued at their fair value as determined in good faith under
procedures established by and under the supervision of the Trustees.
IX. TAXATION OF THE FUND AND SHAREHOLDERS
- --------------------------------------------------------------------------------
The Fund generally will make two basic types of distributions: ordinary
dividends and long-term capital gain distributions. These two types of
distributions are reported differently on a shareholder's income tax return and
they are also subject to different rates of tax. The tax treatment of the
investment activities of the Fund will affect the amount and timing and
character of the distributions made by the Fund. Tax issues relating to the Fund
are not generally a consideration for shareholders such as tax exempt entities
and tax-advantaged retirement vehicles such as an IRA or 401(k) plan.
Shareholders are urged to consult their own tax professionals regarding specific
questions as to federal, state or local taxes.
INVESTMENT COMPANY TAXATION. The Fund intends to remain qualified as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986. As such, the Fund will not be subject to federal income tax on its net
investment income and capital gains, if any, to the extent that it distributes
such income and capital gains to its shareholders.
The Fund generally intends to distribute sufficient income and gains so that
the Fund will not pay corporate income tax on its earnings. The Fund also
generally intends to distribute to its shareholders in each calendar year a
sufficient amount of ordinary income and capital gains to avoid the imposition
of a 4% excise tax. However, the Fund may instead determine to retain all or
part of any net long-term capital gains in any year for reinvestment. In such
event, the Fund will pay federal income tax (and possibly excise tax) on such
retained gains.
Gains or losses on sales of securities by the Fund will be long-term capital
gains or losses if the securities have a tax holding period of more than one
year. Gains or losses on the sale of securities with a tax holding period of one
year or less will be short-term gains or losses.
Under certain tax rules, the Fund may be required to accrue a portion of any
discount at which certain securities are purchased as income each year even
though the Fund receives no payments in cash on the security during the year. To
the extent that the Fund invests in such securities, it would be required to pay
out such accrued discount as an income distribution in each year in order to
avoid taxation at the Fund level. Such distributions will be made from the
available cash of the Fund or by liquidation of portfolio securities if
necessary. If a distribution of cash necessitates the liquidation of portfolio
securities, the Adviser will select which securities to sell. The Fund may
realize a gain or loss from such sales. In the event the Fund realizes net
capital gains from such transactions, its shareholders may receive a larger
capital gain distribution, if any, than they would in the absence of such
transactions.
TAXATION OF DIVIDENDS AND DISTRIBUTIONS. Shareholders normally will have to
pay federal income taxes, and any state and/or local income taxes, on the
dividends and other distributions they receive from the Fund. Such dividends and
distributions, to the extent that they are derived from net investment income or
short-term capital gains, are taxable to the shareholder as ordinary income
regardless of whether the shareholder receives such payments in additional
shares or in cash.
Distributions of net long-term capital gains, if any, are taxable to
shareholders as long-term capital gains regardless of how long a shareholder has
held the Fund's shares and regardless of whether the distribution is received in
additional shares or in cash. The Taxpayer Relief Act of 1997 reduced the
maximum tax on long-term capital gains applicable to individuals from 28% to
20%.
Shareholders are generally taxed on any ordinary dividend or capital gain
distributions from the Fund in the year they are actually distributed. However,
if any such dividends or distributions are
31
<PAGE>
declared in October, November or December and paid in January then such amounts
will be treated for tax purposes as received by the shareholders on December 31,
to shareholders of record of such month.
Subject to certain exceptions, a corporate shareholder may be eligible for a
70% dividends received deduction to the extent that the Fund earns and
distributes qualifying dividends from its investments. Distributions of net
capital gains by the Fund will not be eligible for the dividends received
deduction.
Shareholders who are not citizens or residents of the United States and
certain foreign entities may be subject to withholding of United States tax on
distributions made by the Fund of investment income and short term capital
gains.
After the end of each calendar year, shareholders will be sent full
information on their dividends and capital gain distributions for tax purposes,
including the portion taxable as ordinary income, the portion taxable as
long-term capital gains and the amount of any dividends eligible for the federal
dividends received deduction for corporations.
PURCHASES AND REDEMPTIONS AND EXCHANGES OF FUND SHARES. Any dividend or
capital gains distribution received by a shareholder from any investment company
will have the effect of reducing the net asset value of the shareholder's stock
in that company by the exact amount of the dividend or capital gains
distribution. Furthermore, such dividends and capital gains distributions are
subject to federal income taxes. If the net asset value of the shares should be
reduced below a shareholder's cost as a result of the payment of dividends or
the distribution of realized long-term capital gains, such payment or
distribution would be in part a return of the shareholder's investment but
nonetheless would be taxable to the shareholder. Therefore, an investor should
consider the tax implications of purchasing Fund shares immediately prior to a
distribution record date.
In general, a sale of shares results in capital gain or loss, and for
individual shareholders, is taxable at a federal rate dependent upon the length
of time the shares were held. A redemption of a shareholder's Fund shares is
normally treated as a sale for tax purposes. Fund shares held for a period of
one year or less will, for tax purposes, generally result in short-term gains or
losses and those held for more than one year generally result in long-term gain
or loss. Any loss realized by shareholders upon a redemption of shares within
six months of the date of their purchase will be treated as a long-term capital
loss to the extent of any distributions of net long-term capital gains with
respect to such shares during the six-month period.
Gain or loss on the sale or redemption of shares in the Fund is measured by
the difference between the amount received and the tax basis of the shares.
Shareholders should keep records of investments made (including shares acquired
through reinvestment of dividends and distributions) so they can compute the tax
basis of their shares. Under certain circumstances a shareholder may compute and
use an average cost basis in determining the gain or loss on the sale or
redemption of shares.
Exchanges of Fund shares for shares of any other continuously offered TCW/DW
Multi-Class Fund, TCW/DW North American Government Income Trust or five money
market funds for which Morgan Stanley Dean Witter Advisors Inc. serves as
investment manager are also subject to similar tax treatment. Such an exchange
is treated for tax purposes as a sale of the original shares in the first fund,
followed by the purchase of shares in the second fund.
If a shareholder realizes a loss on the redemption or exchange of a fund's
shares and reinvests in that fund's shares within 30 days before or after the
redemption or exchange, the transactions may be subject to the "wash sale"
rules, resulting in a postponement of the recognition of such loss for tax
purposes.
32
<PAGE>
X. UNDERWRITERS
- --------------------------------------------------------------------------------
The Fund's shares are offered to the public on a continuous basis. The
Distributor, as the principal underwriter of the shares, has certain obligations
under the Distribution Agreement concerning the distribution of the shares.
These obligations and the compensation the Distributor receives are described
above in the sections titled "Principal Underwriter" and "Rule 12b-1 Plans".
XI. CALCULATION OF PERFORMANCE DATA
- --------------------------------------------------------------------------------
From time to time, the Fund may quote its "total return" in advertisements
and sales literature. These figures are computed separately for Class A, Class
B, Class C and Class D shares. The Fund's "average annual total return"
represents an annualization of the Fund's total return over a particular period
and is computed by finding the annual percentage rate which will result in the
ending redeemable value of a hypothetical $1,000 investment made at the
beginning of a one, five or ten year period, or for the period from the date of
commencement of operations, if shorter than any of the foregoing. The ending
redeemable value is reduced by any contingent deferred sales charge ("CDSC") at
the end of the one, five, ten year or other period. For the purpose of this
calculation, it is assumed that all dividends and distributions are reinvested.
The formula for computing the average annual total return involves a percentage
obtained by dividing the ending redeemable value by the amount of the initial
investment (which in the case of Class A shares is reduced by the Class A
initial sales charge), taking a root of the quotient (where the root is
equivalent to the number of years in the period) and subtracting 1 from the
result. The average annual total returns for Class B for the one year, five year
and the life of the Fund (which commenced on December 30, 1992) periods ended
January 31, 1999 were -43.11%, -14.59% and -4.57%, respectively. The average
annual total returns of Class A for the fiscal year ended January 31, 1999 and
for the period July 28, 1997 (inception of the Class) through January 31, 1999
were -42.79% and -40.50%, respectively. The average annual total returns of
Class C for the fiscal year ended January 31, 1999 and for the period July 28,
1997 (inception of the Class) through January 31, 1999 were -40.76% and -38.84%,
respectively. The average annual total returns of Class D for the fiscal year
ended January 31, 1999 and for the period July 28, 1997 (inception of the Class)
through January 31, 1999 were -39.56% and -38.22%, respectively.
In addition, the Fund may advertise its total return for each Class over
different periods of time by means of aggregate, average, year-by-year or other
types of total return figures. These calculations may or may not reflect the
imposition of the maximum front-end sales charge for Class A or the deduction of
the CDSC for each of Class B and Class C which, if reflected, would reduce the
performance quoted. For example, the average annual total return of the Fund may
be calculated in the manner described above, but without deduction for any
applicable sales charge. Based on this calculation, the average annual total
returns of Class B for the one year, five year and the life of the Fund (which
commenced on December 30, 1992) periods ended January 31, 1999 were -40.12%,
- -14.25% and -4.57%, respectively. The average annual total returns of Class A
for the fiscal year ended January 31, 1999 and for the period July 28, 1997
through January 31, 1999 were -39.62% and -38.33%, respectively. The average
annual total returns of Class C for the fiscal year ended January 31, 1999 and
for the period July 28, 1997 through January 31, 1999 were -40.17% and -38.84%,
respectively. The average annual total returns of Class D for the fiscal year
ended January 31, 1999 and for the period July 28, 1997 through January 31, 1999
were -39.56% and -38.22%, respectively.
In addition, the Fund may compute its aggregate total return for each Class
for specified periods by determining the aggregate percentage rate which will
result in the ending value of a hypothetical $1,000 investment made at the
beginning of the period. For the purpose of this calculation, it is assumed that
all dividends and distributions are reinvested. The formula for computing
aggregate total return involves a percentage obtained by dividing the ending
value (without reduction for any sales charge) by the initial $1,000 investment
and subtracting 1 from the result. Based on the foregoing calculation, the total
returns for Class B for the one year, five year and the life of the Fund (which
commenced on December 30, 1992) periods ended January 31, 1999 were -40.12%,
- -53.64% and -24.80%, respectively. The total returns
33
<PAGE>
of Class A for the fiscal year ended January 31, 1999 and for the period July
28, 1997 through January 31, 1999 were -39.62% and -51.84%, respectively. The
total returns of Class C for the fiscal year ended January 31, 1999 and for the
period July 28, 1997 through January 31, 1999 were -40.17% and -52.43%,
respectively. The total returns of Class D for the fiscal year ended January 31,
1999 and for the period July 28, 1997 through January 31, 1999 were -39.56% and
- -51.71%, respectively.
The Fund may also advertise the growth of hypothetical investments of
$10,000, $50,000 and $100,000 in each Class of shares of the Fund by adding 1 to
the Fund's aggregate total return to date (expressed as a decimal and without
taking into account the effect of any applicable CDSC) and multiplying by
$9,475, $48,000 and $97,000 in the case of Class A (investments of $10,000,
$50,000 and $100,000 adjusted for the initial sales charge) or by $10,000,
$50,000 and $100,000 in the case of each of Class B, Class C and Class D, as the
case may be. Investments of $10,000, $50,000 and $100,000 in each Class at
inception of the Class would have declined to the following amounts at January
31, 1999:
<TABLE>
<CAPTION>
INVESTMENT AT INCEPTION OF:
INCEPTION -------------------------------
CLASS DATE: $10,000 $50,000 $100,000
- ------------ --------- ------- -------- --------
<S> <C> <C> <C> <C>
Class A..... 7/28/97 $4,563 $23,117 $46,715
Class B..... 12/30/92 7,520 37,600 75,200
Class C..... 7/28/97 4,757 23,785 47,570
Class D..... 7/28/97 4,829 24,145 48,290
</TABLE>
The Fund from time to time may also advertise its performance relative to
certain performance rankings and indexes compiled by independent organizations.
XII. FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
EXPERTS. The financial statements of the Fund for the fiscal year ended
January 31, 1999 included in this STATEMENT OF ADDITIONAL INFORMATION and
incorporated by reference in the PROSPECTUS are included herein in reliance on
the report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
*****
This STATEMENT OF ADDITIONAL INFORMATION and the PROSPECTUS do not contain
all of the information set forth in the REGISTRATION STATEMENT the Fund has
filed with the SEC. The complete REGISTRATION STATEMENT may be obtained from the
SEC.
34
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
PORTFOLIO OF INVESTMENTS JANUARY 31, 1999
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS (84.6%)
ARGENTINA (12.9%)
ALCOHOLIC BEVERAGES
92,200 Quilmes Industrial S.A. (ADR)....................................................... $ 737,600
------------
BANKING
80,598 Banco de Galicia y Buenos Aires S.A. de C.V. (ADR).................................. 906,728
58,950 Banco Frances del Rio de La Plato S.A. (ADR)........................................ 921,094
------------
1,827,822
------------
INTEGRATED OIL COMPANIES
145,474 Yacimentos Petroliferos Fiscales S.A. (ADR)......................................... 4,636,984
------------
MULTI-SECTOR COMPANIES
709,774 Perez Companc S.A. (Class B)........................................................ 2,893,457
------------
OIL/GAS TRANSMISSION
63,700 Transportadora de Gas del Sur S.A. (ADR)............................................ 609,131
------------
STEEL/IRON ORE
152,280 Siderar S.A.I.C. (Class A).......................................................... 220,892
------------
TELECOMMUNICATIONS
52,140 Telecom Argentina Stet - France Telecom S.A. (ADR).................................. 1,238,325
63,135 Telefonica de Argentina S.A. (ADR).................................................. 1,558,645
------------
2,796,970
------------
TOTAL ARGENTINA..................................................................... 13,722,856
------------
BRAZIL (21.9%)
BANKING
3,997,156 Banco Itau S.A. (Pref.)............................................................. 1,197,216
------------
BUILDING MATERIALS
3,469,000 Companhia Cimento Portland Itau (Pref.)............................................. 242,998
------------
CELLULAR TELEPHONE
49,422,000 Tele Celular Sul Participacoes S.A.*................................................ 38,917
268,758,140 Tele Celular Sul Participacoes S.A. (Pref.)*........................................ 412,875
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
49,422,000 Telemig Celular Participacoes S.A.*................................................. $ 34,619
268,758,140 Telemig Celular Participacoes S.A. (Pref.)*......................................... 190,857
49,422,000 Telesudeste Celular Participacoes S.A.*............................................. 78,550
40,777,469 Telesudeste Celular Participacoes S.A. (Pref.)*..................................... 118,195
------------
874,013
------------
ELECTRIC UTILITIES
106,623 Companhia Energetica de Minas Gerais S.A. (Pref.) (ADR)............................. 1,319,460
272,800,000 Companhia Paranaense de Energia - Copel (Class B) (Pref.)........................... 1,070,114
10,515,000 Eletropaulo Metropolitana (Pref.)................................................... 181,295
------------
2,570,869
------------
INTEGRATED OIL COMPANIES
27,896,000 Petroleo Brasileiro S.A. (Pref.).................................................... 1,846,257
------------
MULTI-SECTOR COMPANIES
2,652,300 Itausa Investimentos Itau S.A. (Pref.).............................................. 896,913
------------
OTHER METALS/MINERALS
281,528 Companhia Vale do Rio Doce (Class A) (Pref.)........................................ 4,217,480
266,358 Companhia Vale do Rio Doce S.A. 12/31/99 (Debentures)*.............................. --
------------
4,217,480
------------
OTHER TELECOMMUNICATIONS
49,422,000 Embratel Participacoes S.A.*........................................................ 310,141
173,348,140 Embratel Participacoes S.A. (Pref.)*................................................ 1,942,839
49,422,000 Tele Centro Sul Participacoes S.A.*................................................. 171,903
268,758,140 Tele Centro Sul Participacoes S.A. (Pref.)*......................................... 1,791,721
20,752,000 Tele Norte Leste Participacoes S.A.*................................................ 112,281
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
35
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
PORTFOLIO OF INVESTMENTS JANUARY 31, 1999, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
153,477,469 Tele Norte Leste Participacoes S.A. (Pref.)*........................................ $ 1,534,775
49,422,000 Telesp Participacoes S.A.*.......................................................... 465,569
268,758,140 Telesp Participacoes S.A. (Pref.)*.................................................. 4,674,054
------------
11,003,283
------------
PAPER
37,960,000 Votorantim Celulose e Papel S.A. (Pref.)............................................ 421,778
------------
TOTAL BRAZIL........................................................................ 23,270,807
------------
CHILE (5.2%)
ALCOHOLIC BEVERAGES
38,100 Vina Concha Y Toro (ADR)............................................................ 928,688
------------
BANKING
76,040 Banco Santander Chile (ADR)......................................................... 1,064,560
------------
BEVERAGES - NON-ALCOHOLIC
83,240 Embotelladora Andina S.A. (Series A) (ADR).......................................... 1,165,360
------------
ELECTRIC UTILITIES
31,020 Gener S.A. (ADR).................................................................... 418,770
------------
FOOD CHAINS
62,560 Distribucion Y Servicio D&S S.A. (ADR).............................................. 672,520
------------
MAJOR PHARMACEUTICALS
71,450 Laboratorio Chile S.A. (ADR)........................................................ 857,400
------------
TELECOMMUNICATIONS
20,968 Compania de Telecommunicaciones de Chile S.A. (ADR)................................. 427,223
------------
TOTAL CHILE......................................................................... 5,534,521
------------
COLOMBIA (1.9%)
ALCOHOLIC BEVERAGES
342,370 Bavaria S.A......................................................................... 1,256,802
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
BANKING
141,300 Banco de Bogota..................................................................... $ 397,965
68,335 Bancolombia S.A. (ADR).............................................................. 328,862
------------
726,827
------------
TOTAL COLOMBIA...................................................................... 1,983,629
------------
MEXICO (41.2%)
ALCOHOLIC BEVERAGES
130,860 Fomento Economico Mexicano S.A. de C.V. (ADR)....................................... 2,895,277
2,045,600 Grupo Modelo S.A. de C.V. (Series C)................................................ 4,552,732
------------
7,448,009
------------
BEVERAGES - NON-ALCOHOLIC
82,400 Coca-Cola Femsa S.A. (ADR).......................................................... 1,035,150
------------
BUILDING MATERIALS
368,770 Apasco S.A. de C.V.................................................................. 1,332,114
------------
CONSUMER SUNDRIES
1,213,300 Kimberly-Clark de Mexico S.A. de C.V. (A Shares).................................... 3,508,655
------------
MEDIA CONGLOMERATES
215,290 Grupo Televisa S.A. de C.V. (GDR)................................................... 5,516,806
------------
MULTI-SECTOR COMPANIES
253,799 Grupo Carso S.A. de C.V. (Series A1)................................................ 726,428
------------
PACKAGED FOODS
1,938,200 Grupo Industrial Bimbo S.A. de C.V. (Series A)...................................... 3,768,510
12,740 Grupo Industrial Maseca S.A. de C.V. (ADR).......................................... 155,269
244,600 Grupo Industrial Maseca S.A. de C.V. (B Shares)..................................... 202,787
------------
4,126,566
------------
RETAIL
5,388,918 Cifra S.A. de C.V. (Series C)....................................................... 5,988,869
791,200 Organizacion Soriana S.A. de C.V. (Series B)........................................ 2,334,868
------------
8,323,737
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
36
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
PORTFOLIO OF INVESTMENTS JANUARY 31, 1999, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
TELECOMMUNICATIONS
228,778 Telefonos de Mexico S.A. de C.V. (Series L) (ADR)................................... $ 11,696,275
------------
TOTAL MEXICO........................................................................ 43,713,740
------------
PERU (1.5%)
BUILDING MATERIALS
554,799 Cementos Lima, S.A.................................................................. 575,347
------------
PRECIOUS METALS
160,369 Compania de Minas Buenaventura S.A. (B Shares)...................................... 974,093
------------
TOTAL PERU.......................................................................... 1,549,440
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL COMMON AND PREFERRED STOCKS
(IDENTIFIED COST $100,493,613) (a)........................................................ 84.6 % 89,774,993
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES............................................ 15.4 16,335,027
------ -------------
NET ASSETS................................................................................ 100.0 % $ 106,110,020
------ -------------
------ -------------
</TABLE>
- ---------------------
ADR American Depository Receipt.
GDR Global Depository Receipt.
* Non-income producing security.
(a) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $10,330,116 and the
aggregate gross unrealized depreciation is $21,048,736, resulting in net
unrealized depreciation of $10,718,620.
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT JANUARY 31, 1999:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS TO IN DELIVERY APPRECIATION/
RECEIVE EXCHANGE FOR DATE DEPRECIATION
- ----------------------------------------------------
<S> <C> <C> <C>
MXN 965,275 $ 95,185 02/01/99 $ 85
MXN 1,080,847 $ 107,376 02/02/99 (700)
-----
Net unrealized depreciation... $(615)
-----
-----
</TABLE>
CURRENCY ABBREVIATION:
<TABLE>
<S> <C>
MXN Mexican Peso.
</TABLE>
SUMMARY OF INVESTMENTS
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
---------------------------------------------------------------------------------
<S> <C> <C>
Alcoholic Beverages................................................................ $10,371,099 9.8 %
Banking............................................................................ 4,816,425 4.5
Beverages - Non-Alcoholic.......................................................... 2,200,510 2.1
Building Materials................................................................. 2,150,459 2.0
Cellular Telephone................................................................. 874,013 0.8
Consumer Sundries.................................................................. 3,508,655 3.3
Electric Utilities................................................................. 2,989,639 2.8
Food Chains........................................................................ 672,520 0.6
Integrated Oil Companies........................................................... 6,483,241 6.1
Major Pharmaceuticals.............................................................. 857,400 0.8
Media Conglomerates................................................................ 5,516,806 5.2
Multi-Sector Companies............................................................. 4,516,798 4.3
Oil/Gas Transmission............................................................... 609,131 0.6
Other Metals/Minerals.............................................................. 4,217,480 4.0
Other Telecommunications........................................................... 11,003,283 10.4
Packaged Foods..................................................................... 4,126,566 3.9
Paper.............................................................................. 421,778 0.4
Precious Metals.................................................................... 974,093 0.9
Retail............................................................................. 8,323,737 7.8
Steel/Iron Ore..................................................................... 220,892 0.2
Telecommunications................................................................. 14,920,468 14.1
----------- ---
$89,774,993 84.6 %
----------- ---
----------- ---
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
---------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks...................................................................... $67,716,166 63.8 %
Preferred Stocks................................................................... 22,058,827 20.8
----------- ---
$89,774,993 84.6 %
----------- ---
----------- ---
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
37
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $100,493,613).............................................................. $ 89,774,993
Cash.......................................................................................... 15,982,330
Receivable for:
Investments sold.......................................................................... 1,384,207
Dividends................................................................................. 207,441
Shares of beneficial interest sold........................................................ 32,325
Interest.................................................................................. 27,666
Prepaid expenses and other assets............................................................. 67,477
------------
TOTAL ASSETS............................................................................. 107,476,439
------------
LIABILITIES:
Payable for:
Investments purchased..................................................................... 602,521
Shares of beneficial interest repurchased................................................. 372,157
Plan of distribution fee.................................................................. 96,924
Management fee............................................................................ 72,734
Investment advisory fee................................................................... 48,489
Accrued expenses and other payables........................................................... 173,594
------------
TOTAL LIABILITIES........................................................................ 1,366,419
------------
NET ASSETS............................................................................... $106,110,020
------------
------------
COMPOSITION OF NET ASSETS:
Paid-in-capital............................................................................... $229,904,609
Net unrealized depreciation................................................................... (10,874,590)
Net investment loss........................................................................... (854,690)
Accumulated net realized loss................................................................. (112,065,309)
------------
NET ASSETS............................................................................... $106,110,020
------------
------------
CLASS A SHARES:
Net Assets.................................................................................... $58,091
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 7,929
NET ASSET VALUE PER SHARE................................................................ $7.33
------------
------------
MAXIMUM OFFERING PRICE PER SHARE,
(NET ASSET VALUE PLUS 5.54% OF NET
ASSET VALUE)........................................................................... $7.74
------------
------------
CLASS B SHARES:
Net Assets.................................................................................... $105,678,293
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 14,598,716
NET ASSET VALUE PER SHARE................................................................ $7.24
------------
------------
CLASS C SHARES:
Net Assets.................................................................................... $368,797
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 50,934
NET ASSET VALUE PER SHARE................................................................ $7.24
------------
------------
CLASS D SHARES:
Net Assets.................................................................................... $4,839
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 658
NET ASSET VALUE PER SHARE................................................................ $7.35
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
38
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JANUARY 31, 1999
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Dividends (net of $515,400 foreign withholding tax)........................................... $ 6,516,477
Interest...................................................................................... 306,528
------------
TOTAL INCOME............................................................................. 6,823,005
------------
EXPENSES
Plan of distribution fee (Class A shares)..................................................... 213
Plan of distribution fee (Class B shares)..................................................... 1,960,820
Plan of distribution fee (Class C shares)..................................................... 6,369
Management fee................................................................................ 1,476,124
Investment advisory fee....................................................................... 984,082
Transfer agent fees and expenses.............................................................. 547,257
Custodian fees................................................................................ 391,563
Foreign exchange provisional tax.............................................................. 139,879
Shareholder reports and notices............................................................... 120,949
Professional fees............................................................................. 83,776
Registration fees............................................................................. 80,214
Trustees' fees and expenses................................................................... 31,118
Other......................................................................................... 36,594
------------
TOTAL EXPENSES........................................................................... 5,858,958
------------
NET INVESTMENT INCOME.................................................................... 964,047
------------
NET REALIZED AND UNREALIZED LOSS:
Net realized loss on:
Investments............................................................................... (14,274,867)
Foreign exchange transactions............................................................. (3,117,469)
------------
NET LOSS................................................................................. (17,392,336)
------------
Net change in unrealized appreciation/depreciation on:
Investments............................................................................... (69,549,574)
Translation of forward foreign currency contracts, other assets and liabilities
denominated in foreign currencies....................................................... 1,237,888
------------
NET DEPRECIATION......................................................................... (68,311,686)
------------
NET LOSS................................................................................. (85,704,022)
------------
NET DECREASE.................................................................................. $(84,739,975)
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
39
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
JANUARY 31, 1999 JANUARY 31, 1998*
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income (loss)...................... $ 964,047 $ (2,058,685)
Net realized gain (loss).......................... (17,392,336) 25,945,579
Net change in unrealized appreciation............. (68,311,686) (8,606,911)
---------------------- ----------------------
NET INCREASE (DECREASE)...................... (84,739,975) 15,279,983
Net decrease from transactions in shares of
beneficial interest............................. (82,770,172) (12,503,040)
---------------------- ----------------------
NET INCREASE (DECREASE)...................... (167,510,147) 2,776,943
NET ASSETS:
Beginning of period............................... 273,620,167 270,843,224
---------------------- ----------------------
END OF PERIOD
(INCLUDING A NET INVESTMENT LOSS OF $854,690
AND $733,256, RESPECTIVELY)................... $ 106,110,020 $ 273,620,167
---------------------- ----------------------
---------------------- ----------------------
</TABLE>
- ---------------------
* Class A, Class C and Class D shares were issued July 28, 1997.
SEE NOTES TO FINANCIAL STATEMENTS
40
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1999
1. ORGANIZATION AND ACCOUNTING POLICIES
TCW/DW Latin American Growth Fund (the "Fund") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified,
open-end management investment company. The Fund's investment objective is
long-term capital appreciation. The Fund seeks to achieve its objective by
investing primarily in equity securities of Latin American issuers. The Fund was
organized as a Massachusetts business trust on February 25, 1992 and commenced
operations on December 30, 1992. On July 28, 1997, the Fund commenced offering
three additional classes of shares, with the then current shares designated as
Class B shares.
The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase and some
Class A shares, and most Class B shares and Class C shares are subject to a
contingent deferred sales charge imposed on shares redeemed within one year, six
years and one year, respectively. Class D shares are not subject to a sales
charge. Additionally, Class A shares, Class B shares and Class C shares incur
distribution expenses.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ from
those estimates.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) an equity 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 pursuant to procedures
adopted by the Trustees); (2) all other portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest available bid price prior to the time of valuation; (3) when market
quotations are not readily available, including circumstances under which it is
determined by TCW Funds Management, Inc. (the "Adviser") that sale or bid prices
are not reflective of a security's market value, portfolio securities are valued
at their fair value as determined in good faith under procedures established by
and under the general supervision of the Trustees (valuation of debt securities
for which market quotations are not readily available may be based upon current
market prices of securities which are comparable in coupon, rating and maturity
or an appropriate matrix utilizing
41
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1999, CONTINUED
similar factors); and (4) short-term debt securities having a maturity date of
more than sixty days at time of purchase are valued on a mark-to-market basis
until sixty days prior to maturity and thereafter at amortized cost based on
their value on the 61st day. Short-term debt securities having a maturity date
of sixty days or less at the time of purchase are valued at amortized cost.
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.
C. MULTIPLE CLASS ALLOCATIONS -- Investment income, expenses (other than
distribution fees), and realized and unrealized gains and losses are allocated
to each class of shares based upon the relative net asset value on the date such
items are recognized. Distribution fees are charged directly to the respective
class.
D. FOREIGN CURRENCY TRANSLATION -- The books and records of the Fund are
maintained in U.S. dollars as follows: (1) the foreign currency market value of
investment securities, other assets and liabilities and forward foreign currency
contracts are translated at the exchange rates prevailing at the end of the
period; and (2) purchases, sales, income and expenses are translated at the
exchange rates prevailing on the respective dates of such transactions. The
resultant exchange gains and losses are included in the Statement of Operations
as realized and unrealized gain/loss on foreign exchange transactions. Pursuant
to U.S. Federal income tax regulations, certain foreign 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 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 foreign currency gain or loss. The Fund records
realized gains or losses on delivery of the currency or at the time the forward
contract is extinguished (compensated) by entering into a closing transaction
prior to delivery.
42
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1999, 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.
2. MANAGEMENT AGREEMENT
Pursuant to a Management Agreement, the Fund pays Morgan Stanley Dean Witter
Services Company, Inc. (the "Manager") a management fee, accrued daily and
payable monthly, by applying the following annual rates to the net assets of the
Fund determined as of the close of each business day: 0.75% to the portion of
daily net assets not exceeding $500 million and 0.72% to the portion of the
daily net assets exceeding $500 million.
Under the terms of the Management Agreement, the Manager maintains certain of
the Fund's book 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 Manager. The Manager also bears the cost of telephone services, heat,
light, power and other utilities provided to the Fund.
3. INVESTMENT ADVISORY AGREEMENT
Pursuant to an Investment Advisory Agreement, the Fund pays the Adviser an
advisory fee, accrued daily and payable monthly, by applying the following
annual rates to the net assets of the Fund determined as of the close of each
business day: 0.50% to the portion of daily net assets not exceeding $500
million and 0.48% to the portion of the daily net assets exceeding $500 million.
43
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1999, CONTINUED
Under the terms of the Investment Advisory Agreement, the Fund has retained the
Adviser to invest the Fund's assets, including placing orders for the purchase
and sale of portfolio securities. The Adviser obtains and evaluates such
information and advice relating to the economy, securities markets, and specific
securities as it considers necessary or useful to continuously manage the assets
of the Fund in a manner consistent with its investment objective. In addition,
the Adviser pays the salaries of all personnel, including officers of the Fund
who are employees of the Adviser.
4. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Morgan Stanley Dean Witter Distributors
Inc. (the "Distributor"), an affiliate of the Manager. The Fund has adopted a
Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act. The Plan
provides that the Fund will pay the Distributor a fee which is accrued daily and
paid monthly at the following annual rates: (i) Class A -- up to 0.25% of the
average daily net assets of Class A; (ii) Class B -- 1.0% of the lesser of: (a)
the average daily aggregate gross sales of the Class B shares since the
inception of the Fund (not including reinvestment of dividend or capital gain
distributions) less the average daily aggregate net asset value of the Class B
shares redeemed since the Fund's inception upon which a contingent deferred
sales charge has been imposed or waived; or (b) the average daily net assets of
Class B; and (iii) Class C -- up to 1.0% of the average daily net assets of
Class C. In the case of Class A shares, amounts paid under the Plan are paid to
the Distributor for services provided. In the case of Class B and Class C
shares, amounts paid under the Plan are paid to the Distributor for (1) services
provided and the expenses borne by it and others in the distribution of the
shares of these Classes, including the payment of commissions for sales of these
Classes and incentive compensation to, and expenses of, Morgan Stanley Dean
Witter Financial Advisors, and others who engage in or support distribution of
the shares or who service shareholder accounts, including overhead and telephone
expenses; (2) printing and distribution of prospectuses and reports used in
connection with the offering of these shares to other than current shareholders;
and (3) preparation, printing and distribution of sales literature and
advertising materials. In addition, the Distributor may utilize fees paid
pursuant to the Plan, in the case of Class B shares, to compensate Dean Witter
Reynolds Inc. ("DWR"), an affiliate of the Manager and Distributor, and other
selected broker-dealers for their opportunity costs in advancing such amounts,
which compensation would be in the form of a carrying charge on any unreimbursed
expenses.
In the case of Class B shares, provided that the Plan continues in effect, any
cumulative expenses incurred by the Distributor but not yet recovered may be
recovered through the payment of future
44
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1999, CONTINUED
distribution fees from the Fund pursuant to the Plan and contingent deferred
sales charges paid by investors upon redemption of Class B shares. Although
there is no legal obligation for the Fund to pay expenses incurred in excess of
payments made to the Distributor under the Plan and the proceeds of contingent
deferred sales charges paid by investors upon redemption of shares, if for any
reason the Plan is terminated, the Trustees will consider at that time the
manner in which to treat such expenses. The Distributor has advised the Fund
that such excess amounts, including carrying charges, totaled $19,612,473 at
January 31, 1999.
In the case of Class A shares and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 1.0% of the average daily
net assets of Class A or Class C, respectively, will not be reimbursed by the
Fund through payments in any subsequent year, except that expenses representing
a gross sales credit to Morgan Stanley Dean Witter Financial Advisors or other
selected broker-dealer representatives may be reimbursed in the subsequent
calendar year. For the year ended January 31, 1999, the distribution fee was
accrued for Class A shares and Class C shares at the annual rate of 0.23% and
1.0%, respectively.
The Distributor has informed the Fund that for the year ended January 31, 1999,
it received contingent deferred sales charges from certain redemptions of the
Fund's Class A shares, Class B shares and Class C shares of $2, $916,003 and
$2,365, respectively and received $1,799 in front-end sales charges from sales
of the Fund's Class A shares. The respective shareholders pay such charges which
are not an expense of the Fund.
5. SECURITY TRANSACTIONS AND TRANSACTION WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the year ended January 31, 1999 aggregated
$50,543,050 and $144,265,887, respectively.
For the year ended January 31, 1999, the Fund incurred brokerage commissions of
$13,262 with Morgan Stanley & Co., Inc., an affiliate of the Manager and
Distributor, for portfolio transactions executed on behalf of the Fund.
Morgan Stanley Dean Witter Trust FSB, an affiliate of the Manager and
Distributor, is the Fund's transfer agent. At January 31, 1999, the Fund had
transfer agent fees and expenses payable of approximately $370.
45
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1999, CONTINUED
6. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
JANUARY 31, 1999 JANUARY 31, 1998*
---------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Sold............................................................. 14,534 $ 136,263 10,002 $ 142,946
Redeemed......................................................... (15,663) (144,192) (944) (11,957)
----------- -------------- ----------- ------------
Net increase (decrease) - Class A................................ (1,129) (7,929) 9,058 130,989
----------- -------------- ----------- ------------
CLASS B SHARES
Sold............................................................. 2,410,988 25,661,963 5,890,546 80,346,802
Redeemed......................................................... (10,363,817) (108,304,032) (6,955,022) (93,949,547)
----------- -------------- ----------- ------------
Net decrease - Class B........................................... (7,952,829) (82,642,069) (1,064,476) (13,602,745)
----------- -------------- ----------- ------------
CLASS C SHARES
Sold............................................................. 27,783 283,451 72,243 1,050,903
Redeemed......................................................... (42,306) (403,625) (6,786) (92,205)
----------- -------------- ----------- ------------
Net increase (decrease) -- Class C............................... (14,523) (120,174) 65,457 958,698
----------- -------------- ----------- ------------
CLASS D SHARES
Sold............................................................. -- -- 658 10,018
----------- -------------- ----------- ------------
Net decrease in Fund............................................. (7,968,481) $ (82,770,172) (989,303) $(12,503,040)
----------- -------------- ----------- ------------
----------- -------------- ----------- ------------
</TABLE>
- ---------------------
* For Class A, C, and D shares, for the period July 28, 1997, (issue date)
through January 31, 1998.
7. FEDERAL INCOME TAX STATUS
At January 31, 1999, the Fund had a net capital loss carryover of approximately
$96,436,000, which may be used to offset future capital gains to the extent
provided by regulations, which is available through January 31 of the following
years:
<TABLE>
<CAPTION>
AMOUNTS IN THOUSANDS
- ----------------------------------------------------------------------
2004 2005 2007
- ---------------------- ---------------------- ----------------------
<S> <C> <C>
$73,539 $ 19,839 $ 3,058
</TABLE>
Capital and foreign currency losses incurred after October 31 ("post-October"
losses) within the taxable year are deemed to arise on the first business day of
the Fund's next taxable year. The Fund incurred and will elect to defer net
capital and foreign currency losses of approximately $11,321,000 and $855,000,
respectively, during fiscal 1999.
As of January 31, 1999, the Fund had temporary book/tax differences primarily
attributable to capital loss deferrals on wash sales and post-October losses.
The Fund had permanent book/tax differences primarily attributable to foreign
currency losses, a net operating loss and tax adjustments on passive
46
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1999, CONTINUED
foreign investment companies sold by the Fund. To reflect reclassifications
arising from the permanent differences, paid-in-capital was charged $1,634,943,
accumulated net investment loss was charged $1,085,481 and accumulated net
realized loss was credited $2,720,424.
8. 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.
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 foreign exchange rates underlying the forward
contracts. Risks may also arise upon entering into these contracts from the
potential inability of the counterparties to meet the terms of their contracts.
At January 31, 1999, the Fund had outstanding forward contracts to facilitate
settlements of foreign currency denominated portfolio transactions.
At January 31, 1999, the Fund's cash balance consisted principally of interest
bearing deposits with Chase Manhattan Bank N.A., the Fund's custodian.
9. SUBSEQUENT EVENT
On February 25, 1999, the Board of Trustees of the Fund recommended that the
Fund engage Morgan Stanley Dean Witter Advisors Inc. ("MSDW Advisors"), an
affiliate of the Manager, to serve as the Fund's new investment manager and that
a new investment management agreement between the Fund and MSDW Advisors be
submitted to shareholders for approval. Under the new agreement, MSDW Advisors
would be responsible for all the services presently provided by both the Manager
and the Adviser. The compensation paid to MSDW Advisors would be equal to the
total compensation presently paid to both the Manager and the Adviser.
Additionally, on February 25, 1999, the Board of Trustees recommended that a new
sub-advisory agreement between MSDW Advisors and the present Adviser be
submitted to shareholders for approval. Under the new sub-advisory agreement,
MSDW Advisors would pay the new sub-adviser monthly compensation equal to 40% of
the compensation it receives under the new investment management agreement.
47
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED JANUARY 31,
--------------------------------------------------------------------------
1999++ 1998*++ 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CLASS B SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of
period....................... $ 12.09 $ 11.47 $ 9.48 $ 9.35 $ 16.05
----------- ---------- ---------- ----------- ----------
Income (loss) from investment
operations:
Net investment income
(loss)..................... 0.05 (0.09) (0.04) (0.06) (0.17)
Net realized and unrealized
gain (loss)................ (4.90) 0.71 2.03 0.19 (6.21)
----------- ---------- ---------- ----------- ----------
Total income (loss) from
investment operations........ (4.85) 0.62 1.99 0.13 (6.38)
----------- ---------- ---------- ----------- ----------
Less distributions from net
realized gain................ -- -- -- -- (0.32)
----------- ---------- ---------- ----------- ----------
Net asset value, end of
period....................... $ 7.24 $ 12.09 $ 11.47 $ 9.48 $ 9.35
----------- ---------- ---------- ----------- ----------
----------- ---------- ---------- ----------- ----------
TOTAL RETURN+................. (40.12)% 5.41% 20.99% 1.39% (40.12)%
RATIOS TO AVERAGE NET ASSETS:
Expenses...................... 2.98%(1) 2.81% 2.78% 2.98% 2.87%
Net investment income
(loss)....................... 0.49%(1) (0.64)% (0.29)% (0.61)% (1.46)%
SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands.................... $105,678 $272,710 $270,843 $261,066 $294,774
Portfolio turnover rate....... 27% 30% 29% 64% 145%
</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.
SEE NOTES TO FINANCIAL STATEMENTS
48
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE PERIOD JULY
ENDED 28, 1997* THROUGH
JANUARY 31, 1999 JANUARY 31, 1998
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CLASS A SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period.................................. $ 12.14 $ 15.22
------ ------
Income (loss) from investment operations:
Net investment income (loss)....................................... 0.15 (0.07)
Net realized and unrealized loss................................... (4.96) (3.01)
------ ------
Total loss from investment operations................................. (4.81) (3.08)
------ ------
Net asset value, end of period........................................ $ 7.33 $ 12.14
------ ------
------ ------
TOTAL RETURN+......................................................... (39.62)% (20.24)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 2.21%(3) 2.15%(2)
Net investment income (loss).......................................... 1.26%(3) (1.04)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $58 $110
Portfolio turnover rate............................................... 27% 30%
CLASS C SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period.................................. $ 12.10 $ 15.22
------ ------
Income (loss) from investment operations:
Net investment income (loss)....................................... 0.06 (0.12)
Net realized and unrealized loss................................... (4.92) (3.00)
------ ------
Total loss from investment operations................................. (4.86) (3.12)
------ ------
Net asset value, end of period........................................ $ 7.24 $ 12.10
------ ------
------ ------
TOTAL RETURN+......................................................... (40.17)% (20.50)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 2.98%(3) 2.91%(2)
Net investment income (loss).......................................... 0.49%(3) (1.76)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $369 $792
Portfolio turnover rate............................................... 27% 30%
</TABLE>
- ---------------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
49
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR JULY 28, 1997*
ENDED THROUGH
JANUARY 31, 1999 JANUARY 31, 1998
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
CLASS D SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period.................................. $ 12.16 $ 15.22
------- -------
Income (loss) from investment operations:
Net investment income (loss)....................................... 0.16 (0.04)
Net realized and unrealized loss................................... (4.97) (3.02)
------- -------
Total loss from investment operations................................. (4.81) (3.06)
------- -------
Net asset value, end of period........................................ $ 7.35 $ 12.16
------- -------
------- -------
TOTAL RETURN+......................................................... (39.56)% (20.11)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 1.98%(3) 1.86%(2)
Net investment income (loss).......................................... 1.49%(3) (0.52)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $5 $8
Portfolio turnover rate............................................... 27% 30%
</TABLE>
- ---------------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Calculated based on the net asset value as of the last business day of the
period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
50
<PAGE>
TCW/DW LATIN AMERICAN GROWTH FUND
PART C OTHER INFORMATION
Item 23. EXHIBITS
1 Declaration of Trust of the Registrant is incorporated by reference to
Exhibit (1) of Post-Effective Amendment No. 4 to the Registration
Statement on Form N1-A, filed on March 27, 1996.
2 Amended and Restated By-Laws of the Registrant.
3 Instrument Establishing and Designating Additional Classes is
incorporated by reference to Exhibit (1) of Post-Effective Amendment
No. 6 to the Registration Statement on Form N1-A, filed on July 22,
1997.
4 (a) Amended and Restated Investment Advisory Agreement is incorporated
by reference to Exhibit (5) to Post-Effective Amendment No. 4 to the
Registration Statement on Form N1-A, filed on March 27, 1996.
5 (a) Distribution Agreement is incorporated by reference to Exhibit (6(a))
to Post-Effective Amendment No. 6 to the Registration Statement on Form
N1-A, filed on July 22, 1997.
5 (b) Multi-Class Distribution Agreement is incorporated by reference to
Exhibit (6(b)) to Post-Effective Amendment No. 6 to the Registration
Statement on Form N1-A, filed on July 22, 1997.
5 (c) Selected Dealer Agreement is incorporated by reference to Exhibit
(6(b)) to Post-Effective Amendment No. 4 to the Registration Statement
on Form N1-A, filed on March 27, 1996.
6 Not Applicable
7 Custody Agreement is incorporated by reference to Exhibit (8(a)) to
Post-Effective Amendment No. 4 to the Registration Statement on Form
N1-A, filed on March 27, 1996.
8 (a) Management Agreement is incorporated by reference to Exhibit (9) to
Post-Effective Amendment No. 4 to the Registration Statement on Form
N1-A, filed on March 276, 1996.
8 (b) Transfer Agency and Service Agreement is incorporated by reference to
Exhibit (8) to Post-Effective Amendment No. 8 to the Registration
Statement on Form N1-A, filed on March 30, 1999.
9 (a) Opinion of Registrant's Counsel, dated September 14, 1992, is
incorporated by reference to Exhibit (10(a)) to Pre-Effective Amendment
No. 1 on Form N1-A, filed on September 15, 1992 and filed herein.
<PAGE>
9 (b) Opinion of Lane & Altman, dated September 10, 1992, is incorporated by
reference to Exhibit (10(b)) to Pre-Effective Amendment No. 1 on Form
N1-A, filed on September 15, 1992 and filed herein.
10 Consent of Independent Accountants.
11 Not Applicable
12 Not Applicable
13 Amended and Restated Plan of Distribution pursuant to Rule 12b-1 is
incorporated by reference to Exhibit (15) to Post-Effective Amendment
No. 6 on Form N1-A, filed on July 22, 1997.
14 Multi-Class Plan pursuant to Rule 18f-3 is incorporated by reference to
Exhibit (Other) to Post-Effective Amendment No. 6 on Form N1-A, filed
on July 22, 1997.
Other Powers of Attorney of Trustees is incorporated by reference to Exhibit
(Other) to Post-Effective Amendment No. 4 on Form N1-A, filed on March
27, 1996.
Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND
None
Item 25. INDEMNIFICATION.
Pursuant to Section 5.3 of the Registrant's Declaration of Trust and under
Section 4.8 of the Registrant's By-Laws, the indemnification of the Registrant's
trustees, officers, employees and agents is permitted if it is determined that
they acted under the belief that their actions were in or not opposed to the
best interest of the Registrant, and, with respect to any criminal proceeding,
they had reasonable cause to believe their conduct was not unlawful. In
addition, indemnification is permitted only if it is determined that the actions
in question did not render them liable by reason of willful misfeasance, bad
faith or gross negligence in the performance of their duties or by reason of
reckless disregard of their obligations and duties to the Registrant. Trustees,
officers, employees and agents will be indemnified for the expense of litigation
if it is determined that they are entitled to indemnification against any
liability established in such litigation. The Registrant may also advance money
for these expenses provided that they give their undertakings to repay the
Registrant unless their conduct is later determined to permit indemnification.
Pursuant to Section 5.2 of the Registrant's Declaration of Trust
and paragraph 8 of the Registrant's Management and Advisory Agreements, none of
the Manager, the Adviser or any trustee, officer, employee or agent of the
Registrant shall be liable for any action or failure to act, except in the case
of bad faith, willful misfeasance, gross negligence or reckless disregard of
duties to the Registrant.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to trustees, officers and
controlling persons of the Registrant pursuant
2
<PAGE>
to the foregoing provisions or otherwise, the Registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a trustee,
officer, or controlling person of the Registrant in connection with the
successful defense of any action, suit or proceeding) is asserted against the
Registrant by such trustee, officer or controlling person in connection with the
shares being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act, and will be governed by the final
adjudication of such issue.
The Registrant hereby undertakes that it will apply the
indemnification provision of its by-laws in a manner consistent with Release
11330 of the Securities and Exchange Commission under the Investment Company Act
of 1940, so long as the interpretation of Sections 17(h) and 17(i) of such Act
remains in effect.
Registrant, in conjunction with the Manager, Registrant's
Trustees, and other registered investment management companies managed by the
Manager, maintains insurance on behalf of any person who is or was a Trustee,
officer, employee, or agent of Registrant, or who is or was serving at the
request of Registrant as a trustee, director, officer, employee or agent of
another trust or corporation, against any liability asserted against him and
incurred by him or arising out of his position. However, in no event will
Registrant maintain insurance to indemnify any such person for any act for which
Registrant itself is not permitted to indemnify him.
Item 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
The TCW Funds Management, Inc. ("TCW") is a 100% owned subsidiary of The
TCW Group, Inc., a Nevada corporation. TCW presently serves as investment
adviser to: (1) TCW/DW North American Government Income Trust, an open-end,
non-diversified management company; (2) TCW/DW Income and Growth Fund, an
open-end, non-diversified management company; (3) TCW/DW Latin American Growth
Fund, an open-end, non-diversified management company; (4) TCW/DW Small Cap
Growth Fund, an open-end non-diversified management company; (5) TCW/DW Term
Trust 2000, a closed-end, diversified management company; (6) TCW/DW Term Trust
2002, a closed-end diversified management company; (7) TCW/DW Term Trust 2003, a
closed-end diversified management company; (8) TCW/DW Emerging Markets
Opportunities Trust, an open-end, non-diversified management company; (9) TCW/DW
Total Return Trust, an open-end non-diversified management investment company;
(10) TCW/DW Mid-Cap Equity Trust, an open-end, diversified management investment
company; and (11) TCW/DW Global Telecom Trust, an open-end diversified
management investment company. TCW also serves as investment adviser or
sub-adviser to other investment companies, including foreign investment
companies. The list required by this Item 26 of the officers and directors of
TCW together with information as to any other business, profession, vocation or
employment of a substantive nature engaged in by TCW and such officers and
directors during the past two years, is incorporated by reference to Form ADV
(File No. 801-29075) filed by TCW pursuant to the Investment Advisers Act.
Item 27. PRINCIPAL UNDERWRITERS
(a) Morgan Stanley Dean Witter Distributors Inc. ("MSDW Distributors"), a
Delaware corporation, is the principal underwriter of the Registrant. MSDW
Distributors is also the principal underwriter of the following investment
companies:
(1) Active Assets California Tax-Free Trust
3
<PAGE>
(2) Active Assets Government Securities Trust
(3) Active Assets Money Trust
(4) Active Assets Tax-Free Trust
(5) Morgan Stanley Dean Witter Aggressive Equity Fund
(6) Morgan Stanley Dean Witter American Value Fund
(7) Morgan Stanley Dean Witter Balanced Growth Fund
(8) Morgan Stanley Dean Witter Balanced Income Fund
(9) Morgan Stanley Dean Witter California Tax-Free Daily Income Trust
(10) Morgan Stanley Dean Witter California Tax-Free Income Fund
(11) Morgan Stanley Dean Witter Capital Growth Securities
(12) Morgan Stanley Dean Witter Competitive Edge Fund, "BEST IDEAS PORTFOLIO"
(13) Morgan Stanley Dean Witter Convertible Securities Trust
(14) Morgan Stanley Dean Witter Developing Growth Securities Trust
(15) Morgan Stanley Dean Witter Diversified Income Trust
(16) Morgan Stanley Dean Witter Dividend Growth Securities Inc.
(17) Morgan Stanley Dean Witter Equity Fund
(18) Morgan Stanley Dean Witter European Growth Fund Inc.
(19) Morgan Stanley Dean Witter Federal Securities Trust
(20) Morgan Stanley Dean Witter Financial Services Trust
(21) Morgan Stanley Dean Witter Fund of Funds
(22) Morgan Stanley Dean Witter Global Dividend Growth Securities
(23) Morgan Stanley Dean Witter Global Utilities Fund
(24) Morgan Stanley Dean Witter Growth Fund
(25) Morgan Stanley Dean Witter Hawaii Municipal Trust
(26) Morgan Stanley Dean Witter Health Sciences Trust
(27) Morgan Stanley Dean Witter High Yield Securities Inc.
(28) Morgan Stanley Dean Witter Income Builder Fund
(29) Morgan Stanley Dean Witter Information Fund
(30) Morgan Stanley Dean Witter Intermediate Income Securities
(31) Morgan Stanley Dean Witter International Fund
(32) Morgan Stanley Dean Witter International SmallCap Fund
(33) Morgan Stanley Dean Witter Japan Fund
(34) Morgan Stanley Dean Witter Limited Term Municipal Trust
(35) Morgan Stanley Dean Witter Liquid Asset Fund Inc.
(36) Morgan Stanley Dean Witter Market Leader Trust
(37) Morgan Stanley Dean Witter Mid-Cap Dividend Growth Securities
(38) Morgan Stanley Dean Witter Mid-Cap Growth Fund
(39) Morgan Stanley Dean Witter Multi-State Municipal Series Trust
(40) Morgan Stanley Dean Witter Natural Resource Development Securities Inc.
(41) Morgan Stanley Dean Witter New York Municipal Money Market Trust
(42) Morgan Stanley Dean Witter New York Tax-Free Income Fund
(43) Morgan Stanley Dean Witter Pacific Growth Fund Inc.
(44) Morgan Stanley Dean Witter Precious Metals and Minerals Trust
(45) Morgan Stanley Dean Witter Prime Income Trust
(46) Morgan Stanley Dean Witter Real Estate Fund
(47) Morgan Stanley Dean Witter S&P 500 Index Fund
(48) Morgan Stanley Dean Witter S&P 500 Select Fund
(49) Morgan Stanley Dean Witter Short-Term Bond Fund
(50) Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust
(51) Morgan Stanley Dean Witter Special Value Fund
(52) Morgan Stanley Dean Witter Strategist Fund
4
<PAGE>
(53) Morgan Stanley Dean Witter Tax-Exempt Securities Trust
(54) Morgan Stanley Dean Witter Tax-Free Daily Income Trust
(55) Morgan Stanley Dean Witter U.S. Government Money Market Trust
(56) Morgan Stanley Dean Witter U.S. Government Securities Trust
(57) Morgan Stanley Dean Witter Utilities Fund
(58) Morgan Stanley Dean Witter Value-Added Market Series
(59) Morgan Stanley Dean Witter Value Fund
(60) Morgan Stanley Dean Witter Variable Investment Series
(61) Morgan Stanley Dean Witter World Wide Income Trust
(1) TCW/DW Emerging Markets Opportunities Trust
(2) TCW/DW Global Telecom Trust
(3) TCW/DW Income and Growth
(4) TCW/DW Latin American Growth Fund
(5) TCW/DW Mid-Cap Equity Trust
(6) TCW/DW North American Government Income Trust
(7) TCW/DW Small Cap Growth Fund
(8) TCW/DW Total Return Trust
(b) The following information is given regarding directors and officers of MSDW
Distributors not listed in Item 26 above. The principal address of MSDW
Distributors is Two World Trade Center, New York, New York 10048.
<TABLE>
<CAPTION>
POSITION AND OFFICE WITH MSDW DISTRIBUTORS
NAME AND THE REGISTRANT
- ---- ---------------------------
<S> <C>
Frank Bruttomesso Assistant Secretary of MSDW Distributors and Vice
President of the Registrant
Thomas F. Caloia Assistant Treasurer of MSDW Distributors and
Treasurer of the Registrant.
Marilyn K. Cranney Assistant Secretary of MSDW Distributors and Vice
President of the Registrant
Christine A. Edwards Director, Executive Vice President, Secretary, and
Chief Legal Officer of MSDW Distributors.
Barry Fink Senior Vice President, Assistant General
Counsel and Assistant Secretary of MSDW
Distributors and Vice President, Secretary and
General Counsel of the Registrant.
Robert S. Giambrone Senior Vice President of MSDW Distributors and
Vice President of the Registrant.
Michael T. Gregg Vice President and Assistant Secretary of
MSDW Distributors.
James F. Higgins Director of MSDW Distributors.
Michael Interrante Assistant Treasurer of MSDW Distributors.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
POSITION AND OFFICE WITH MSDW DISTRIBUTORS
NAME AND THE REGISTRANT
- ---- ---------------------------
<S> <C>
John B. Kemp President of Distributors.
Frederick K. Kubler Senior Vice President, Assistant Secretary
and Chief Compliance Officer of MSDW Distributors.
Todd Lebo Assistant Secretary of MSDW Distributors and Vice
President of the Registrant
Lou Anne D. McInnis Assistant Secretary of MSDW Distributors and Vice
President of the Registrant
Mitchell M. Merin Director, Chief Executive Officer of MSDW
Distributors and Vice President of the Registrant
Carsten Otto Assistant Secretary of MSDW Distributors and Vice
President of the Registrant
Philip J. Purcell Director of MSDW Distributors.
Ruth Rossi Assistant Secretary of MSDW Distributors and Vice
President of the Registrant
John Schaeffer Director of MSDW Distributors.
Charles Vadala Senior Vice President and Financial Principal of
MSDW Distributors
</TABLE>
Item 28. LOCATION OF ACCOUNTS AND RECORDS
All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder are
maintained by the Investment Manager at its offices, except records relating to
holders of shares issued by the Registrant, which are maintained by the
Registrant's Transfer Agent, at its place of business as shown in the
prospectus.
Item 29. MANAGEMENT SERVICES
Registrant is not a party to any such management-related service
contract.
Item 30. UNDERTAKINGS
Registrant hereby undertakes to furnish each person to whom a prospectus
is delivered with a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.
6
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York
and State of New York on the 28 day of May, 1999.
TCW/DW LATIN AMERICAN GROWTH FUND
By: /s/ Barry Fink
--------------
Barry Fink
Vice President and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 9 has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
(1) Principal Executive Officer Chief Executive Officer,
Trustee and Chairman
By /s/ Charles A. Fiumefreddo
---------------------------- 05/28/99
Charles A. Fiumefreddo
(2) Principal Financial Officer Treasurer and Principal
Accounting Officer
By /s/ Thomas F. Caloia
------------------------------- 05/28/99
Thomas F. Caloia
(3) Majority of the Trustees
Charles A. Fiumefreddo (Chairman) Richard M. DeMartini
Thomas J. Larkin, Jr. Marc I. Stern
By /s/ BARRY FINK 05/28/99
------------------------------
Barry Fink
Attorney-in-Fact
John C. Argue Michael E. Nugent
Manuel H. Johnson John L. Schroeder
By /s/ David M. Butowsky 05/28/99
-------------------------------
David M. Butowsky
Attorney-in-Fact
</TABLE>
<PAGE>
EXHIBIT INDEX
-------------
2 Amended and Restated By-Laws of the Registrant.
9(a) Opinion of Registrant's Counsel, dated September 14, 1992.
9(b) Opinion of Lane & Altman, dated September 10, 1992.
10 Consent of Independent Accountants.
<PAGE>
BY-LAWS
OF
TCW/DW LATIN AMERICAN GROWTH FUND
AMENDED AND RESTATED AS OF MAY 1, 1999
ARTICLE I
DEFINITIONS
The terms "COMMISSION," "DECLARATION," "DISTRIBUTOR," "INVESTMENT ADVISER,"
"MAJORITY SHAREHOLDER VOTE," "1940 ACT," "SHAREHOLDER," "SHARES," "TRANSFER
AGENT," "TRUST," "TRUST PROPERTY," and "TRUSTEES" have the respective meanings
given them in the Declaration of Trust of TCW/DW Latin American Growth Fund
dated February 25, 1992, as amended from time to time.
ARTICLE II
OFFICES
SECTION 2.1. PRINCIPAL OFFICE. Until changed by the Trustees, the principal
office of the Trust in the Commonwealth of Massachusetts shall be in the City of
Boston, County of Suffolk.
SECTION 2.2. OTHER OFFICES. In addition to its principal office in the
Commonwealth of Massachusetts, the Trust may have an office or offices in the
City of New York, State of New York, and at such other places within and without
the Commonwealth as the Trustees may from time to time designate or the business
of the Trust may require.
ARTICLE III
SHAREHOLDERS' MEETINGS
SECTION 3.1. PLACE OF MEETINGS. Meetings of Shareholders shall be held at
such place, within or without the Commonwealth of Massachusetts, as may be
designated from time to time by the Trustees.
SECTION 3.2. MEETINGS. Meetings of Shareholders of the Trust shall be held
whenever called by the Trustees or the President of the Trust and whenever
election of a Trustee or Trustees by Shareholders is required by the provisions
of Section 16(a) of the 1940 Act, for that purpose. Meetings of Shareholders
shall also be called by the Secretary upon the written request of the holders of
Shares entitled to vote as otherwise required by Section 16(c) of the 1940 Act
and to the extent required by the corporate or business statute of any state in
which the Shares of the Trust are sold, as made applicable to the Trust by the
provisions of Section 2.3 of the Declaration. Such request shall state the
purpose or purposes of such meeting and the matters proposed to be acted on
thereat. Except to the extent otherwise required by Section 16(c) of the 1940
Act, as made applicable to the Trust by the provisions of Section 2.3 of the
Declaration, the Secretary shall inform such Shareholders of the reasonable
estimated cost of preparing and mailing such notice of the meeting, and upon
payment to the Trust of such costs, the Secretary shall give notice stating the
purpose or purposes of the meeting to all entitled to vote at such meeting. No
meeting need be called upon the request of the holders of Shares entitled to
cast less than a majority of all votes entitled to be cast at such meeting, to
consider any matter which is substantially the same as a matter voted upon at
any meeting of Shareholders held during the preceding twelve months.
SECTION 3.3. NOTICE OF MEETINGS. Written or printed notice of every
Shareholders' meeting stating the place, date, and purpose or purposes thereof,
shall be given by the Secretary not less than ten (10) nor more than ninety (90)
days befor e such meeting to each Shareholder entitled to vote at such meeting.
Such notice shall be deemed to be given when deposited in the United States
mail, postage prepaid, directed to the Shareholder at his address as it appears
on the records of the Trust.
SECTION 3.4. QUORUM AND ADJOURNMENT OF MEETINGS. Except as otherwise
provided by law, by the Declaration or by these By-Laws, at all meetings of
Shareholders, the holders of a majority of the Shares
<PAGE>
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall be requisite and shall constitute a quorum for the
transaction of business. In the absence of a quorum, the Shareholders present or
represented by proxy and entitled to vote thereat shall have the power to
adjourn the meeting from time to time. The Shareholders present in person or
represented by proxy at any meeting and entitled to vote thereat also shall have
the power to adjourn the meeting from time to time if the vote required to
approve or reject any proposal described in the original notice of such meeting
is not obtained (with proxies being voted for or against adjournment consistent
with the votes for and against the proposal for which the required vote has not
been obtained). The affirmative vote of the holders of a majority of the Shares
then present in person or represented by proxy shall be required to adjourn any
meeting. Any adjourned meeting may be reconvened without further notice or
change in record date. At any reconvened meeting at which a quorum shall be
present, any business may be transacted that might have been transacted at the
meeting as originally called.
SECTION 3.5. VOTING RIGHTS, PROXIES. At each meeting of Shareholders, each
holder of record of Shares entitled to vote thereat shall be entitled to one
vote in person or by proxy for each Share of beneficial interest of the Trust
and for the fractional portion of one vote for each fractional Share entitled to
vote so registered in his or her name on the records of the Trust on the date
fixed as the record date for the determination of Shareholders entitled to vote
at such meeting. Without limiting the manner in which a Shareholder may
authorize another person or persons to act for such Shareholder as proxy
pursuant hereto, the following shall constitute a valid means by which a
Shareholder may grant such authority:
(i) A Shareholder may execute a writing authorizing another person or
persons to act for such Shareholder as proxy. Execution may be accomplished
by the Shareholder or such Shareholder's authorized officer, director,
employee, attorney-in-fact or another agent signing such writing or causing
such person's signature to be affixed to such writing by any reasonable
means including, but not limited to, by facsimile or telecopy signature. No
written evidence of authority of a Shareholder's authorized officer,
director, employee, attorney-in-fact or other agent shall be required; and
(ii) A Shareholder may authorize another person or persons to act for such
Shareholder as proxy by transmitting or authorizing the transmission of a
telegram or cablegram or by other means of telephonic, electronic or
computer transmission to the person who will be the holder of the proxy or
to a proxy solicitation firm, proxy support service organization or like
agent duly authorized by the person who will be the holder of the proxy to
receive such transmission, provided that any such telegram or cablegram or
other means of telephonic, electronic or computer transmission must either
set forth or be submitted with information from which it can be determined
that the telegram, cablegram or other transmission was authorized by the
Shareholder.
No proxy shall be valid after eleven months from its date, unless otherwise
provided in the proxy. At all meetings of Shareholders, unless the voting is
conducted by inspectors, all questions relating to the qualification of voters
and the validity of proxies and the acceptance or rejection of votes shall be
decided by the chairman of the meeting. In determining whether a telegram,
cablegram or other electronic transmission is valid, the chairman or inspector,
as the case may be, shall specify the information upon which he or she relied.
Pursuant to a resolution of a majority of the Trustees, proxies may be solicited
in the name of one or more Trustees or Officers of the Trust. Proxy
solicitations may be made in writing or by using telephonic or other electronic
solicitation procedures that include appropriate methods of verifying the
identity of the Shareholder and confirming any instructions given thereby.
SECTION 3.6. VOTE REQUIRED. Except as otherwise provided by law, by the
Declaration of Trust, or by these By-Laws, at each meeting of Shareholders at
which a quorum is present, all matters shall be decided by Majority Shareholder
Vote.
SECTION 3.7. INSPECTORS OF ELECTION. In advance of any meeting of
Shareholders, the Trustees may appoint Inspectors of Election to act at the
meeting or any adjournment thereof. If Inspectors of Election are not so
appointed, the chairman of any meeting of Shareholders may, and on the request
of any Shareholder or his proxy shall, appoint Inspectors of Election of the
meeting. In case any person appointed as Inspector fails to appear or fails or
refuses to act, the vacancy may be filled by appointment
2
<PAGE>
made by the Trustees in advance of the convening of the meeting or at the
meeting by the person acting as chairman. The Inspectors of Election shall
determine the number of Shares outstanding, the Shares represented at the
meeting, the existence of a quorum, the authenticity, validity and effect of
proxies, shall receive votes, ballots or consents, shall hear and determine all
challenges and questions in any way arising in connection with the right to
vote, shall count and tabulate all votes or consents, determine the results, and
do such other acts as may be proper to conduct the election or vote with
fairness to all Shareholders. On request of the chairman of the meeting, or of
any Shareholder or his proxy, the Inspectors of Election shall make a report in
writing of any challenge or question or matter determined by them and shall
execute a certificate of any facts found by them.
SECTION 3.8. INSPECTION OF BOOKS AND RECORDS. Shareholders shall have such
rights and procedures of inspection of the books and records of the Trust as are
granted to Shareholders under Section 32 of the Business Corporation Law of the
Commonwealth of Massachusetts.
SECTION 3.9. ACTION BY SHAREHOLDERS WITHOUT MEETING. Except as otherwise
provided by law, the provisions of these By-Laws relating to notices and
meetings to the contrary notwithstanding, any action required or permitted to be
taken at any meeting of Shareholders may be taken without a meeting if a
majority of the Shareholders entitled to vote upon the action consent to the
action in writing and such consents are filed with the records of the Trust.
Such consent shall be treated for all purposes as a vote taken at a meeting of
Shareholders.
SECTION 3.10. PRESENCE AT MEETINGS. Presence at meetings of shareholders
requires physical attendance by the shareholder or his or her proxy at the
meeting site and does not encompass attendance by telephonic or other electronic
means.
ARTICLE IV
TRUSTEES
SECTION 4.1. MEETINGS OF THE TRUSTEES. The Trustees may in their discretion
provide for regular or special meetings of the Trustees. Regular meetings of the
Trustees may be held at such time and place as shall be determined from time to
time by the Trustees without further notice. Special meetings of the Trustees
may be called at any time by the Chairman and shall be called by the Chairman or
the Secretary upon the written request of any two (2) Trustees.
SECTION 4.2. NOTICE OF SPECIAL MEETINGS. Written notice of special meetings
of the Trustees, stating the place, date and time thereof, shall be given not
less than two (2) days before such meeting to each Trustee, personally, by
telegram, by mail, or by leaving such notice at his place of residence or usual
place of business. If mailed, such notice shall be deemed to be given when
deposited in the United States mail, postage prepaid, directed to the Trustee at
his address as it appears on the records of the Trust. Subject to the provisions
of the 1940 Act, notice or waiver of notice need not specify the purpose of any
special meeting.
SECTION 4.3. TELEPHONE MEETINGS. Subject to the provisions of the 1940 Act,
any Trustee, or any member or members of any committee designated by the
Trustees, may participate in a meeting of the Trustees, or any such committee,
as the case may be, by means of a conference telephone or similar communications
equipment if all persons participating in the meeting can hear each other at the
same time. Participation in a meeting by these means constitutes presence in
person at the meeting.
SECTION 4.4. QUORUM, VOTING AND ADJOURNMENT OF MEETINGS. At all meetings of
the Trustees, a majority of the Trustees shall be requisite to and shall
constitute a quorum for the transaction of business. If a quorum is present, the
affirmative vote of a majority of the Trustees present shall be the act of the
Trustees, unless the concurrence of a greater proportion is expressly required
for such action by law, the Declaration or these By-Laws. If at any meeting of
the Trustees there be less than a quorum present, the Trustees present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall have been obtained.
SECTION 4.5. ACTION BY TRUSTEES WITHOUT MEETING. The provisions of these
By-Laws covering notices and meetings to the contrary notwithstanding, and
except as required by law, any action required
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or permitted to be taken at any meeting of the Trustees may be taken without a
meeting if a consent in writing setting forth the action shall be signed by all
of the Trustees entitled to vote upon the action and such written consent is
filed with the minutes of proceedings of the Trustees.
SECTION 4.6. EXPENSES AND FEES. Each Trustee may be allowed expenses, if
any, for attendance at each regular or special meeting of the Trustees, and each
Trustee who is not an officer or employee of the Trust or of its investment
manager or underwriter or of any corporate affiliate of any of said persons
shall receive for services rendered as a Trustee of the Trust such compensation
as may be fixed by the Trustees. Nothing herein contained shall be construed to
preclude any Trustee from serving the Trust in any other capacity and receiving
compensation therefor.
SECTION 4.7. EXECUTION OF INSTRUMENTS AND DOCUMENTS AND SIGNING OF CHECKS
AND OTHER OBLIGATIONS AND TRANSFERS. All instruments, documents and other papers
shall be executed in the name and on behalf of the Trust and all checks, notes,
drafts and other obligations for the payment of money by the Trust shall be
signed, and all transfer of securities standing in the name of the Trust shall
be executed, by the Chairman, the President, any Vice President or the Treasurer
or by any one or more officers or agents of the Trust as shall be designated for
that purpose by vote of the Trustees; notwithstanding the above, nothing in this
Section 4.7 shall be deemed to preclude the electronic authorization, by
designated persons, of the Trust's Custodian (as described herein in Section
9.1) to transfer assets of the Trust, as provided for herein in Section 9.1.
SECTION 4.8. INDEMNIFICATION OF TRUSTEES, OFFICERS, EMPLOYEES AND AGENTS.
(a) The Trust shall indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending, or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the Trust) by reason of the fact that he is or
was a Trustee, officer, employee, or agent of the Trust. The indemnification
shall be against expenses, including attorneys' fees, judgments, fines, and
amounts paid in settlement, actually and reasonably incurred by him in
connection with the action, suit, or proceeding, if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interests
of the Trust, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
(b) The Trust shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or on behalf of the Trust to obtain a judgment or decree in its favor by
reason of the fact that he is or was a Trustee, officer, employee, or agent of
the Trust. The indemnification shall be against expenses, including attorneys'
fees actually and reasonably incurred by him in connection with the defense or
settlement of the action or suit, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Trust;
except that no indemnification shall be made in respect of any claim, issue, or
matter as to which the person has been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Trust, except to the extent
that the court in which the action or suit was brought, or a court of equity in
the county in which the Trust has its principal office, determines upon
application that, despite the adjudication of liability but in view of all
circumstances of the case, the person is fairly and reasonably entitled to
indemnity for those expenses which the court shall deem proper, provided such
Trustee, officer, employee or agent is not adjudged to be liable by reason of
his willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his office.
(c) To the extent that a Trustee, officer, employee, or agent of the Trust
has been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in subsection (a) or (b) or in defense of any claim,
issue or matter therein, he shall be indemnified against expenses, including
attorneys' fees, actually and reasonably incurred by him in connection
therewith.
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(d) (1) Unless a court orders otherwise, any indemnification under
subsections (a) or (b) of this section may be made by the Trust only as
authorized in the specific case after a determination that indemnification of
the Trustee, officer, employee, or agent is proper in the circumstances because
he has met the applicable standard of conduct set forth in subsections (a) or
(b).
(2) The determination shall be made:
(i) By the Trustees, by a majority vote of a quorum which consists of
Trustees who were not parties to the action, suit or proceeding; or
(ii) If the required quorum is not obtainable, or if a quorum of
disinterested Trustees so directs, by independent legal counsel in a
written opinion; or
(iii) By the Shareholders.
(3) Notwithstanding any provision of this Section 4.8, no person shall
be entitled to indemnification for any liability, whether or not there is
an adjudication of liability, arising by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of duties as described in
Section 17(h) and (i) of the Investment Company Act of 1940 ("disabling
conduct"). A person shall be deemed not liable by reason of disabling
conduct if, either:
(i) a final decision on the merits is made by a court or other body
before whom the proceeding was brought that the person to be indemnified
("indemnitee") was not liable by reason of disabling conduct; or
(ii) in the absence of such a decision, a reasonable determination,
based upon a review of the facts, that the indemnitee was not liable by
reason of disabling conduct, is made by either--
(A) a majority of a quorum of Trustees who are neither "interested
persons" of the Trust, as defined in Section 2(a)(19) of the Investment
Company Act of 1940, nor parties to the action, suit or proceeding, or
(B) an independent legal counsel in a written opinion.
(e) Expenses, including attorneys' fees, incurred by a Trustee, officer,
employee or agent of the Trust in defending a civil or criminal action, suit or
proceeding may be paid by the Trust in advance of the final disposition thereof
if:
(1) authorized in the specific case by the Trustees; and
(2) the Trust receives an undertaking by or on behalf of the Trustee,
officer, employee or agent of the Trust to repay the advance if it is not
ultimately determined that such person is entitled to be indemnified by the
Trust; and
(3) either, (i) such person provides a security for his undertaking,
or
(ii) the Trust is insured against losses by reason of any lawful
advances, or
(iii) a determination, based on a review of readily available facts,
that there is reason to believe that such person ultimately will be found
entitled to indemnification, is made by either--
(A) a majority of a quorum which consists of Trustees who are
neither "interested persons" of the Trust, as defined in Section
2(a)(19) of the 1940 Act, nor parties to the action, suit or
proceeding, or
(B) an independent legal counsel in a written opinion.
(f) The indemnification provided by this Section shall not be deemed
exclusive of any other rights to which a person may be entitled under any
by-law, agreement, vote of Shareholders or disinterested Trustees or otherwise,
both as to action in his official capacity and as to action in another capacity
while holding the office, and shall continue as to a person who has ceased to be
a Trustee, officer, employee, or agent and inure to the benefit of the heirs,
executors and administrators of such person; provided that no
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person may satisfy any right of indemnity or reimbursement granted herein or to
which he may be otherwise entitled except out of the property of the Trust, and
no Shareholder shall be personally liable with respect to any claim for
indemnity or reimbursement or otherwise.
(g) The Trust may purchase and maintain insurance on behalf of any person
who is or was a Trustee, officer, employee, or agent of the Trust, against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such. However, in no event will the Trust purchase
insurance to indemnify any officer or Trustee against liability for any act for
which the Trust itself is not permitted to indemnify him.
(h) Nothing contained in this Section shall be construed to protect any
Trustee or officer of the Trust against any liability to the Trust or to its
security holders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.
ARTICLE V
COMMITTEES
SECTION 5.1. EXECUTIVE AND OTHER COMMITTEES. The Trustees, by resolution
adopted by a majority of the Trustees, may designate an Executive Committee
and/or committees, each committee to consist of two (2) or more of the Trustees
of the Trust and may delegate to such committees, in the intervals between
meetings of the Trustees, any or all of the powers of the Trustees in the
management of the business and affairs of the Trust. In the absence of any
member of any such committee, the members thereof present at any meeting,
whether or not they constitute a quorum, may appoint a Trustee to act in place
of such absent member. Each such committee shall keep a record of its
proceedings.
The Executive Committee and any other committee shall fix its own rules or
procedure, but the presence of at least fifty percent (50%) of the members of
the whole committee shall in each case be necessary to constitute a quorum of
the committee and the affirmative vote of the majority of the members of the
committee present at the meeting shall be necessary to take action.
All actions of the Executive Committee shall be reported to the Trustees at
the meeting thereof next succeeding to the taking of such action.
SECTION 5.2. ADVISORY COMMITTEE. The Trustees may appoint an advisory
committee which shall be composed of persons who do not serve the Trust in any
other capacity and which shall have advisory functions with respect to the
investments of the Trust but which shall have no power to determine that any
security or other investment shall be purchased, sold or otherwise disposed of
by the Trust. The number of persons constituting any such advisory committee
shall be determined from time to time by the Trustees. The members of any such
advisory committee may receive compensation for their services and may be
allowed such fees and expenses for the attendance at meetings as the Trustees
may from time to time determine to be appropriate.
SECTION 5.3. COMMITTEE ACTION WITHOUT MEETING. The provisions of these
By-Laws covering notices and meetings to the contrary notwithstanding, and
except as required by law, any action required or permitted to be taken at any
meeting of any Committee of the Trustees appointed pursuant to Section 5.1 of
these By-Laws may be taken without a meeting if a consent in writing setting
forth the action shall be signed by all members of the Committee entitled to
vote upon the action and such written consent is filed with the records of the
proceedings of the Committee.
ARTICLE VI
OFFICERS
SECTION 6.1. EXECUTIVE OFFICERS. The executive officers of the Trust shall
be a Chairman, a President, one or more Vice Presidents, a Secretary and a
Treasurer. The Chairman shall be selected from among the Trustees but none of
the other executive officers need be a Trustee. Two or more offices, except
those of President and any Vice President, may be held by the same person, but
no officer shall execute,
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acknowledge or verify any instrument in more than one capacity. The executive
officers of the Trust shall be elected annually by the Trustees and each
executive officer so elected shall hold office until his or her successor is
elected and has qualified.
SECTION 6.2. OTHER OFFICERS AND AGENTS. The Trustees may also elect one or
more Assistant Vice Presidents, Assistant Secretaries and Assistant Treasurers
and may elect, or may delegate to the Chairman the power to appoint, such other
officers and agents as the Trustees shall at any time or from time to time deem
advisable.
SECTION 6.3. TERM AND REMOVAL AND VACANCIES. Each officer of the Trust
shall hold office until his or her successor is elected and has qualified. Any
officer or agent of the Trust may be removed by the Trustees whenever, in their
judgment, the best interests of the Trust will be served thereby, but such
removal shall be without prejudice to the contractual rights, if any, of the
person so removed.
SECTION 6.4. COMPENSATION OF OFFICERS. The compensation of officers and
agents of the Trust shall be fixed by the Trustees, or by the Chairman to the
extent provided by the Trustees with respect to officers appointed by the
Chairman.
SECTION 6.5. POWERS AND DUTIES. All officers and agents of the Trust, as
between themselves and the Trust, shall have such authority and perform such
duties in the management of the Trust as may be provided in or pursuant to these
By-Laws or, to the extent not so provided, as may be prescribed by the Trustees;
provided that no rights of any third party shall be affected or impaired by any
such By-Law or resolution of the Trustees unless such third party has knowledge
thereof.
SECTION 6.6. THE CHAIRMAN. The Chairman shall be the chief executive
officer of the Trust, shall preside at all meetings of the Shareholders and of
the Trustees, shall have general and active management of the business of the
Trust, shall see that all orders and resolutions of the Trustees are carried
into effect and, in connection therewith, shall be authorized to delegate to the
President or to one or more Vice Presidents such of his or her powers and duties
at such times and in such manner as he or she may deem advisable, shall be a
signatory on all Annual and Semi-Annual Reports as may be sent to Shareholders,
and shall perform such other duties as the Trustees may from time to time
prescribe.
SECTION 6.7. THE PRESIDENT. The President shall perform such duties as the
Trustees and the Chairman may from time to time prescribe and shall, in the
absence or disability of the Chairman, exercise the powers and perform the
duties of the Chairman. The President shall be authorized to delegate to one or
more Vice Presidents such of his or her powers and duties at such times and in
such manner as he or she may deem advisable.
SECTION 6.8. THE VICE PRESIDENTS. The Vice Presidents shall be of such
number and shall have such titles as may be determined from time to time by the
Trustees. The Vice President, or, if there shall be more than one, the Vice
Presidents in such order as may be determined from time to time by the Trustees
or the Chairman, shall, in the absence or disability of the President, exercise
the powers and perform the duties of the President, and shall perform such other
duties as the Trustees or the Chairman may from time to time prescribe.
SECTION 6.9. THE ASSISTANT VICE PRESIDENTS. The Assistant Vice President,
or, if there shall be more than one, the Assistant Vice Presidents in such order
as may be determined from time to time by the Trustees or the Chairman, shall
perform such duties and have such powers as may be assigned them from time to
time by the Trustees or the Chairman.
SECTION 6.10. THE SECRETARY. The Secretary shall attend all meetings of the
Trustees and all meetings of the Shareholders and record all the proceedings of
the meetings of the Shareholders and of the Trustees in a book to be kept for
that purpose, and shall perform like duties for the standing committees when
required. He or she shall give, or cause to be given, notice of all meetings of
the Shareholders and special meetings of the Trustees, and shall perform such
other duties and have such powers as the Trustees or the Chairman may from time
to time prescribe. He or she shall keep in safe custody the seal of the Trust
and affix or cause the same to be affixed to any instrument requiring it, and,
when so affixed, it shall be attested by his or her signature or by the
signature of an Assistant Secretary.
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SECTION 6.11. THE ASSISTANT SECRETARIES. The Assistant Secretary, or, if
there shall be more than one, the Assistant Secretaries in such order as may be
determined from time to time by the Trustees or the Chairman, shall, in the
absence or disability of the Secretary, perform the duties and exercise the
powers of the Secretary and shall perform such duties and have such other powers
as the Trustees or the Chairman may from time to time prescribe.
SECTION 6.12. THE TREASURER. The Treasurer shall be the chief financial
officer of the Trust. He or she shall keep or cause to be kept full and accurate
accounts of receipts and disbursements in books belonging to the Trust, and he
or she shall render to the Trustees and the Chairman, whenever any of them
require it, an account of his or her transactions as Treasurer and of the
financial condition of the Trust, and he or she shall perform such other duties
as the Trustees or the Chairman may from time to time prescribe.
SECTION 6.13. THE ASSISTANT TREASURERS. The Assistant Treasurer, or, if
there shall be more than one, the Assistant Treasurers in such order as may be
determined from time to time by the Trustees or the Chairman, shall, in the
absence or disability of the Treasurer, perform the duties and exercise the
powers of the Treasurer and shall perform such other duties and have such other
powers as the Trustees or the Chairman may from time to time prescribe.
SECTION 6.14. DELEGATION OF DUTIES. Whenever an officer is absent or
disabled, or whenever for any reason the Trustees may deem it desirable, the
Trustees may delegate the powers and duties of an officer or officers to any
other officer or officers or to any Trustee or Trustees.
ARTICLE VII
DIVIDENDS AND DISTRIBUTIONS
Subject to any applicable provisions of law and the Declaration, dividends
and distributions upon the Shares may be declared at such intervals as the
Trustees may determine, in cash, in securities or other property, or in Shares,
from any sources permitted by law, all as the Trustees shall from time to time
determine.
Inasmuch as the computation of net income and net profits from the sales of
securities or other properties for federal income tax purposes may vary from the
computation thereof on the records of the Trust, the Trustees shall have power,
in their discretion, to distribute as income dividends and as capital gain
distributions, respectively, amounts sufficient to enable the Trust to avoid or
reduce liability for federal income taxes.
ARTICLE VIII
CERTIFICATES OF SHARES
SECTION 8.1. CERTIFICATES OF SHARES. Certificates for Shares of each series
or class of Shares shall be in such form and of such design as the Trustees
shall approve, subject to the right of the Trustees to change such form and
design at any time or from time to time, and shall be entered in the records of
the Trust as they are issued. Each such certificate shall bear a distinguishing
number; shall exhibit the holder's name and certify the number of full Shares
owned by such holder; shall be signed by or in the name of the Trust by the
Chairman, the President, or a Vice President, and countersigned by the Secretary
or an Assistant Secretary or the Treasurer and an Assistant Treasurer of the
Trust; shall be sealed with the seal; and shall contain such recitals as may be
required by law. Where any certificate is signed by a Transfer Agent or by a
Registrar, the signature of such officers and the seal may be facsimile, printed
or engraved. The Trust may, at its option, determine not to issue a certificate
or certificates to evidence Shares owned of record by any Shareholder.
In case any officer or officers who shall have signed, or whose facsimile
signature or signatures shall appear on, any such certificate or certificates
shall cease to be such officer or officers of the Trust, whether because of
death, resignation or otherwise, before such certificate or certificates shall
have been delivered by the Trust, such certificate or certificates shall,
nevertheless, be adopted by the Trust and be issued and
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delivered as though the person or persons who signed such certificate or
certificates or whose facsimile signature or signatures shall appear therein had
not ceased to be such officer or officers of the Trust.
No certificate shall be issued for any share until such share is fully
paid.
SECTION 8.2. LOST, STOLEN, DESTROYED AND MUTILATED CERTIFICATES. The
Trustees may direct a new certificate or certificates to be issued in place of
any certificate or certificates theretofore issued by the Trust alleged to have
been lost, stolen or destroyed, upon satisfactory proof of such loss, theft, or
destruction; and the Trustees may, in their discretion, require the owner of the
lost, stolen or destroyed certificate, or his legal representative, to give to
the Trust and to such Registrar, Transfer Agent and/or Transfer Clerk as may be
authorized or required to countersign such new certificate or certificates, a
bond in such sum and of such type as they may direct, and with such surety or
sureties, as they may direct, as indemnity against any claim that may be against
them or any of them on account of or in connection with the alleged loss, theft
or destruction of any such certificate.
ARTICLE IX
CUSTODIAN
SECTION 9.1. APPOINTMENT AND DUTIES. The Trust shall at times employ a bank
or trust company having capital, surplus and undivided profits of at least five
million dollars ($5,000,000) as custodian with authority as its agent, but
subject to such restrictions, limitations and other requirements, if any, as may
be contained in these By-Laws and the 1940 Act:
(1) to receive and hold the securities owned by the Trust and deliver
the same upon written or electronically transmitted order;
(2) to receive and receipt for any moneys due to the Trust and deposit
the same in its own banking department or elsewhere as the Trustees may
direct;
(3) to disburse such funds upon orders or vouchers;
all upon such basis of compensation as may be agreed upon between the Trustees
and the custodian. If so directed by a Majority Shareholder Vote, the custodian
shall deliver and pay over all property of the Trust held by it as specified in
such vote.
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services of the
custodian and upon such terms and conditions as may be agreed upon between the
custodian and such sub-custodian and approved by the Trustees.
SECTION 9.2. CENTRAL CERTIFICATE SYSTEM. Subject to such rules, regulations
and orders as the Commission may adopt, the Trustees may direct the custodian to
deposit all or any part of the securities owned by the Trust in a system for the
central handling of securities established by a national securities exchange or
a national securities association registered with the Commission under the
Securities Exchange Act of 1934, or such other person as may be permitted by the
Commission, or otherwise in accordance with the 1940 Act, pursuant to which
system all securities of any particular class or series of any issuer deposited
within the system are treated as fungible and may be transferred or pledged by
bookkeeping entry without physical delivery of such securities, provided that
all such deposits shall be subject to withdrawal only upon the order of the
Trust.
ARTICLE X
WAIVER OF NOTICE
Whenever any notice of the time, place or purpose of any meeting of
Shareholders, Trustees, or of any committee is required to be given in
accordance with law or under the provisions of the Declaration or these By-Laws,
a waiver thereof in writing, signed by the person or persons entitled to such
notice and filed with the records of the meeting, whether before or after the
holding thereof, or actual attendance at the meeting of shareholders, Trustees
or committee, as the case may be, in person, shall be deemed equivalent to the
giving of such notice to such person.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.1. LOCATION OF BOOKS AND RECORDS. The books and records of the
Trust may be kept outside the Commonwealth of Massachusetts at such place or
places as the Trustees may from time to time determine, except as otherwise
required by law.
SECTION 11.2. RECORD DATE. The Trustees may fix in advance a date as the
record date for the purpose of determining the Shareholders entitled to (i)
receive notice of, or to vote at, any meeting of Shareholders, or (ii) receive
payment of any dividend or the allotment of any rights, or in order to make a
determination of Shareholders for any other proper purpose. The record date, in
any case, shall not be more than one hundred eighty (180) days, and in the case
of a meeting of Shareholders not less than ten (10) days, prior to the date on
which such meeting is to be held or the date on which such other particular
action requiring determination of Shareholders is to be taken, as the case may
be. In the case of a meeting of Shareholders, the meeting date set forth in the
notice to Shareholders accompanying the proxy statement shall be the date used
for purposes of calculating the 180 day or 10 day period, and any adjourned
meeting may be reconvened without a change in record date. In lieu of fixing a
record date, the Trustees may provide that the transfer books shall be closed
for a stated period but not to exceed, in any case, twenty (20) days. If the
transfer books are closed for the purpose of determining Shareholders entitled
to notice of a vote at a meeting of Shareholders, such books shall be closed for
at least ten (10) days immediately preceding the meeting.
SECTION 11.3. SEAL. The Trustees shall adopt a seal, which shall be in such
form and shall have such inscription thereon as the Trustees may from time to
time provide. The seal of the Trust may be affixed to any document, and the seal
and its attestation may be lithographed, engraved or otherwise printed on any
document with the same force and effect as if it had been imprinted and attested
manually in the same manner and with the same effect as if done by a
Massachusetts business corporation under Massachusetts law.
SECTION 11.4. FISCAL YEAR. The fiscal year of the Trust shall end on such
date as the Trustees may by resolution specify, and the Trustees may by
resolution change such date for future fiscal years at any time and from time to
time.
SECTION 11.5. ORDERS FOR PAYMENT OF MONEY. All orders or instructions for
the payment of money of the Trust, and all notes or other evidences of
indebtedness issued in the name of the Trust, shall be signed by such officer or
officers or such other person or persons as the Trustees may from time to time
designate, or as may be specified in or pursuant to the agreement between the
Trust and the bank or trust company appointed as Custodian of the securities and
funds of the Trust.
ARTICLE XII
COMPLIANCE WITH FEDERAL REGULATIONS
The Trustees are hereby empowered to take such action as they may deem to
be necessary, desirable or appropriate so that the Trust is or shall be in
compliance with any federal or state statute, rule or regulation with which
compliance by the Trust is required.
ARTICLE XIII
AMENDMENTS
These By-Laws may be amended, altered, or repealed, or new By-Laws may be
adopted, (a) by a Majority Shareholder Vote, or (b) by the Trustees; provided,
however, that no By-Law may be amended, adopted or repealed by the Trustees if
such amendment, adoption or repeal requires, pursuant to law, the Declaration,
or these By-Laws, a vote of the Shareholders. The Trustees shall in no event
adopt By-Laws which are in conflict with the Declaration, and any apparent
inconsistency shall be construed in favor of the related provisions in the
Declaration.
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ARTICLE XIV
DECLARATION OF TRUST
The Declaration of Trust establishing TCW/DW Latin American Growth Fund,
dated February 25, 1992, a copy of which, together with all amendments thereto,
is on file in the office of the Secretary of the Commonwealth of Massachusetts,
provides that the name TCW/DW Latin American Growth Fund refers to the Trustees
under the Declaration collectively as Trustees, but not as individuals or
personally; and no Trustee, Shareholder, officer, employee or agent of TCW/DW
Latin American Growth Fund shall be held to any personal liability, nor shall
resort be had to their private property for the satisfaction of any obligation
or claim or otherwise, in connection with the affairs of said TCW/DW Latin
American Growth Fund, but the Trust Estate only shall be liable.
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TCW/DW LATIN AMERICAN GROWTH FUND
Two World Trade Center
New York, New York 10048
September 14, 1992
TCW/DW Latin American Growth Fund
Two World Trade Center
New York, New York 10048
Dear Sirs:
With respect to the Registration Statement on Form N-1A (File No.
33-46515) (the "Registration Statement") filed by TCW/DW Latin American
Growth Fund, a Massachusetts business trust (the "Fund"), with the Securities
and Exchange Commission for the purpose of registering under the Securities
Act of 1933, as amended, an indefinite number of shares of Beneficial
Interest of $0.01 par value of the Fund (the "Shares"), I, as your counsel,
have examined such Fund records, certificates and other documents and
reviewed such questions of law as I have considered necessary or appropriate
for the purposes of this opinion, and on the basis of such examination and
review, I advise you that, in my opinion, proper trust proceedings have been
taken by the Fund so that the Shares have been validly authorized; and when
the Shares have been issued and sold in accordance with the terms of the
Underwriting Agreement referred to in the Registration Statement, the Shares
will be validly issued, fully paid and non-assessable.
As to matters of Massachusetts law contained in the foregoing opinion,
I have relied upon the opinion of Lane & Altman, dated September 10, 1992.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the caption "Legal
Counsel" in the Statement of Additional Information forming a part of the
Registration Statement. In giving this consent, I do not thereby admit that I
am within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Sheldon Curtis
Sheldon Curtis
Vice President
and General Counsel
<PAGE>
[LANE & ALTMAN LETTERHEAD]
September 10, 1992
Sheldon Curtis, Vice President and
General Counsel
Dean Witter Reynolds, Inc.
Two World Trade Center
New York, NY 10048
Re: TCW/DW Latin American Growth Fund
Dear Sir:
We understand that the trustees (the "Trustees") of TCW/DW Latin
American Growth Fund, a Massachusetts business trust (the "Trust"), intend,
on or about September 11, 1992, to cause to be filed on behalf of the Trust
an Amendment to Registration Statement No. 33-46515 (the "Registration
Statement") for the purpose of registering for sale shares of Beneficial
Interest, $.01 par value, of the Trust (the "Shares"). We further understand
that the Shares will be issued and sold pursuant to a distribution agreement
(the "Distribution Agreement") to be entered into between the Trust and Dean
Witter Reynolds Inc., as distributor (the "Distributor").
You have requested that we act as special counsel to the Trust regarding
certain matters of Massachusetts law respecting the organization of the Trust,
and in such capacity we are furnishing you with this opinion.
The Trust is a trust created under a written declaration of trust finally
executed and delivered in Boston, Massachusetts on February 25, 1992 (the "Trust
Agreement"). The Trustees (as defined in the Trust Agreement) have the powers
set forth in the Trust Agreement, subject to the terms, provisions and
conditions therein provided.
In connection with the opinions set forth herein, you and the Trust have
provided to us originals, copies or facsimile transmissions of, and we have
reviewed, among other things: a copy of the Declaration of Trust dated
February 25, 1992; certificate of the Secretary of the Trust dated September
9, 1992, attesting to the due adoption of certain resolutions
<PAGE>
[LETTERHEAD] Dean Witter Reynolds
Inc.
September 10, 1992
Page 2
attached thereto; a form of Distribution Agreement; and the Registration
Statement (including the exhibits thereto). We have assumed that the by-laws
filed as an exhibit to the Registration Statement have been duly adopted by
the Trustees.
In rendering this opinion we have assumed, without independent
verification, (i) the due authority of all individuals signing in
representative capacities and the genuineness of signatures, (ii) the
authenticity, completeness and continued effectiveness of all documents or
copies furnished to us and (iii) that no amendments, agreements, resolutions
or actions have been approved, executed or adopted which would limit,
supersede or modify the items described above. We have also examined such
questions of law as we have concluded necessary or appropriate for purposes
of the opinions expressed below. Where documents are referred to in
resolutions approved by the Trustees, or in the Registration Statement, we
assume such documents are the same as in the most recent form provided to us,
whether as an exhibit to the Registration Statement, or otherwise. When any
opinion set forth below relates to the existence or standing of the Trust,
such opinion is based entirely upon and is limited by the items referred to
above, and we understand that the foregoing assumptions, limitations and
qualifications are acceptable to you.
Based upon the foregoing, and with respect to Massachusetts law only
(except that no opinion is herein expressed with respect to the compliance with
the Massachusetts Uniform Securities Act), to the extent that Massachusetts law
may be applicable, and without reference to the laws of any of the other several
states or of the United States of America, including State and Federal
securities laws, we are of the opinion that:
1. The Trust is a business trust with transferable shares, organized in
compliance with the requirements of The Commonwealth of Massachusetts and the
Trust Agreement is legal and valid.
2. The Shares to which the Registration Statement relates and which are
to be registered under the Securities Act of 1933, as amended, will be
legally and validly issued upon receipt by the Trust of consideration
determined by the Trustees in compliance with Article VI, Section 6.4 of the
Trust Agreement. We are further of the opinion that such Shares, when
issued, will be fully paid and non-assessable by the Trust.
<PAGE>
[LETTERHEAD] Dean Witter Reynolds
Inc.
September 10, 1992
Page 3
We understand that you will rely on this opinion solely in connection with
your opinion to be filed with the Securities and Exchange Commission as an
Exhibit to the Registration Statement. We hereby consent to such use of this
opinion and we also consent to the filing of said opinion with the Securities
and Exchange Commission. In so consenting, we do not thereby admit to be within
the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Lane & Altman
LANE & ALTMAN
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 9 to the registration
statement on Form N-1A (the "Registration Statement") of our report dated March
12, 1999, relating to the financial statements and financial highlights of
TCW/DW Latin American Growth Fund, which appears in such Statement of Additional
Information, and to the incorporation by reference of our report into the
Prospectus which constitutes part of this Registration Statement. We also
consent to the references to us under the headings "Custodian and Independent
Accountants" and "Experts" in such Statement of Additional Information and to
the reference to us under the heading "Financial Highlights" in such Prospectus.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
May 27, 1999
