<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND TWO WORLD TRADE CENTER,
LETTER TO THE SHAREHOLDERS JANUARY 31, 2000 NEW YORK, NEW YORK 10048
DEAR SHAREHOLDER:
The Latin American equity markets began 1999 on a turbulent note, with a
devaluation of the Brazilian real in January. However, most of the region's
markets rebounded quickly, responding to proactive efforts by Brazilian
authorities to restore investor confidence. Stock prices continued to rally on
the back of rising commodity prices, which improved the outlook for economic
recovery and earnings growth in 2000. Furthermore, concerns regarding the Y2K
millennium bug were replaced with an eagerness to gain exposure to international
markets before the new year, when additional investors were expected to be
buyers of stocks after a smooth transition into the new millennium. Throughout
the region there was an increased focus on companies' Internet strategies. In
general, securities of companies that were perceived to be able to add value via
the Internet outperformed the securities of others.
MEXICO
The Mexican equity market gained 67.3 percent during the 12-month period ended
January 31, 2000. The Mexican economy continues to benefit from robust U.S.
growth, as evidenced by stronger than expected third-quarter real GDP growth.
The export-led economic recovery also appears to be broadening to the domestic
consumer sector. The rally in the equity market has been focused on a narrow
group of companies, with much attention centered on companies' clarification of
their Internet strategies. On the political front, the first-ever presidential
primary election went off without a hitch, and fears of a divisive split within
the ruling PRI party were definitively put to rest. Despite a more contentious
than expected debate, the budget for 2000 was approved, broadly in line with the
Zedillo administration's original proposal. Moody's Investors Service recently
upgraded its outlook on local currency denominated government debt from stable
to positive. This move has contributed to speculation that Mexico may receive
investment-grade status after the July presidential elections.
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
LETTER TO THE SHAREHOLDERS JANUARY 31, 2000, CONTINUED
BRAZIL
Brazilian stock prices ended the period under review up 132.1 percent in
U.S.-dollar terms. Soon after the Brazilian government decided to float the
currency freely last year, authorities designed a new macroeconomic policy and
appointed a new central bank president. Since then the relatively stable
currency and declining inflation rate have allowed the central bank to cut
overnight interest rates by more than half, from 42 percent to 19 percent. More
recently, concerns about inflationary pressures have led the central bank to
temporarily halt its policy of monetary easing. While the 6 percent target for
CPI 2000 may not be reached, the final figure should be close to 6 percent.
Interest rates are expected to be stable to declining in upcoming months, as a
result of which Brazilian retail investors have been switching from fixed-income
to equity funds. Brazil's fiscal situation has not been entirely resolved, but
the country appears to have met its IMF targets in 1999, and the target for 2000
appears achievable. As a result, Moody's upgraded Brazil's internal debt credit
rating from Caa1 to B3 in mid-December 1999.
ARGENTINA
In Argentina, the market rallied 53.5 percent in U.S. dollar terms during the
twelve months ended January 31, 2000. The market's strength was primarily
attributable to two key buyouts of Argentine stocks at a significant premium to
their market prices. In October, Argentina elected Mr. De la Rua president,
shifting control of the executive branch from the Peronists to the opposition
Alliance party. The market viewed the smooth political transition favorably.
After successfully passing a string of fiscal measures in December, the
government secured a new three-year, $7.4 billion standby agreement with the
IMF. The package includes the government's commitment to reform the health-care
and social security systems. In addition, the government sent a labor reform
bill to Congress and, signaling a tough negotiating stance, removed labor unions
from the management of a $360 million social services fund. The economy appears
to be showing signs of recovery. Industrial production rose 2.3 percent year
over year during the fourth quarter, after contracting 6.9 percent during the
third quarter.
CHILE
Chilean equities rose 53.8 percent during the period under review, driven by a
sharp rise in commodity stocks. The market also rallied because the slowdown in
economic activity throughout much of 1999 had already been discounted and
investors' focus turned to the economic recovery in 2000. The Chilean economy is
showing clear signs of recovery, with a larger than expected drop posted in the
December unemployment rate and stronger than expected industrial production in
late
2
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
LETTER TO THE SHAREHOLDERS JANUARY 31, 2000, CONTINUED
1999, which prompted the central bank to hike interest rates. On the political
front, Ricardo Lagos won the presidential election in a tight mid-January race.
While he was not the market's preferred candidate, his policies are not expected
to vary from the ones in place today. In general, the market has been pleased
with his selection of cabinet ministers.
PERU
Peruvian stock prices gained 32.8 percent during the period under review.
President Alberto Fujimori's cabinet reshuffling, together with the announcement
of fiscal measures designed to jump start the economy, helped to boost his
sagging popularity despite sluggish economic growth. Although the economy
rebounded 6.7 percent year over year in the third quarter, the nascent economic
recovery remains limited to the traditional fishing and agriculture sectors,
which had been devastated the previous year by El Nino. The market showed little
reaction to President Fujimori's announcement of his intention to stand for
re-election in this April's election.
COLOMBIA
Colombian stocks underperformed the rest of the region throughout most of the
year, rising 19.3 percent during the twelve months ended January 31, 2000. Both
of the major rating agencies cut the country's investment-grade foreign debt
rating, citing the inability of the Pastrana administration to reduce the fiscal
deficit below 3 percent of GDP. In June, a series of negative developments led
the central bank to devalue the peso through a 10 percent shift in the
currency's prescribed trading band. Colombian stocks rebounded sharply in the
fourth quarter, led by gains in the peso to a four-month high against the
dollar. The currency was bolstered by the long-anticipated, formal IMF approval
of a $3 billion support package for the country. Meanwhile, the Colombian
economy continued to struggle through a severe recession, with real GDP
contracting nearly 6 percent in the first three quarters of 1999.
VENEZUELA
With volatile monthly performances, Venezuelan stock prices rose 4.3 percent
during the period under review. While the sharp rise in oil prices throughout
1999 had a favorable impact on the government's fiscal and external accounts,
the economy is still struggling to recover from a deep recession. According to
central bank statistics, real GDP contracted approximately 7.2 percent in 1999.
Meanwhile, devastating floods destroyed the coastal area near Caracas in late
December. While the material damage is still being assessed, this is clearly one
of the worst natural disasters Latin America has ever seen. In early December,
the populace voted favorably in a referendum to replace
3
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
LETTER TO THE SHAREHOLDERS JANUARY 31, 2000, CONTINUED
the old constitution with a new one drawn up by the Constitutional Assembly. The
vote was widely perceived as a vote in favor of the Chavez administration. The
new constitution is viewed as a step backward in liberalizing the Venezuelan
economy, because it may allow for increased government intervention, which could
slow the pace of privatization. There will be a new round of elections for
president and Congress in May of this year. President Chavez is likely to win
re-election, but the looming election has left investors with continued
uncertainty regarding the direction of economic policy.
PERFORMANCE
For the 12-month period ended January 31, 2000, Morgan Stanley Dean Witter Latin
American Growth Fund's Class B shares posted a total return of 65.19 percent,
compared to 76.18 percent for the International Finance Corporation's Investable
Latin America Total Return Index (IFC Index). The Fund's underperformance
relative to its benchmark was primarily due to the portfolio's defensive posture
in the wake of Brazil's currency devaluation. For the same period, the Fund's
Class A, C and D shares had total returns of 66.71 percent, 65.47 percent and
66.80 percent, respectively. The performance of the Fund's four share classes
varies because of differing expenses. Total return figures assume the
reinvestment of all distributions and do not reflect the deduction of any
applicable sales charges. The accompanying chart compares the performance of the
Fund to that of the IFC Index.
PORTFOLIO STRATEGY
During the Fund's fiscal year, TCW Investment Management Company (TCW), the
Fund's sub-advisor, focused on blue-chip companies exhibiting strong and
reliable cash flow generation, as well as companies with low leverage and
quality management. These criteria resulted in telecommunications and consumer
non-durables as the areas of focus. Given that most Latin American economies are
poised to rebound significantly this year, the Fund increased its holdings in
industries such as banking and media. Also, the Fund initiated positions in
several companies whose growth prospects are tied to emerging usage of the
Internet in the region.
The Fund maintained an overweighted position in Mexico, given the prospects for
an acceleration of economic growth there in 2000, which TCW believes is expected
to translate into double-digit corporate earnings growth. The Fund also shifted
to an overweighted position in Brazilian stocks, based on the expectation of a
rebound in economic growth toward the middle of this year. The Fund has an
underweighted position in Chile, since it does not purchase local securities,
because of
4
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
LETTER TO THE SHAREHOLDERS JANUARY 31, 2000, CONTINUED
onerous foreign investment restrictions. Valuations in Chilean ADRs remain
uncompelling and these securities underperformed the other Latin American
markets. The Fund maintained a neutral position in Peru, where the economy has
begun to show signs of recovery, as well as in Argentina, where recession and
political concerns have been largely discounted by equity prices. In Venezuela
and Colombia, where the prospects for equities have been dimmed by these
countries' significant political risk, the Fund has either had a zero weight or
very low exposure.
LOOKING AHEAD
With strong economic growth expected throughout the region this year, corporate
earnings growth is also anticipated to be strong. While the Latin American
markets partially discounted the corporate earnings rebound late last year, TCW
believes additional gains can be made if the strength and momentum of the
economic rebound is strong. In addition, a number of new equity issues,
scheduled in the first half of this year, in the Internet and telecommunications
sectors, will provide investors with new investment opportunities in high-growth
sectors. The market will continue to take its cue, however, from the direction
of monetary policy in the United States as well as the reduction in sovereign
risk, as measured by the emerging markets bond markets. A number of Latin
American countries will be issuing new bonds early this year, and the pricing of
these securities will provide a benchmark interest rate relevant for evaluating
equity prices.
We appreciate your ongoing support of Morgan Stanley Dean Witter Latin American
Growth Fund and look forward to continuing to serve your investment needs and
objectives.
Very truly yours,
/s/ Charles A. Fiumefreddo
CHARLES A. FIUMEFREDDO
CHAIRMAN OF THE BOARD
/s/ Mitchell M. Merin
MITCHELL M. MERIN
PRESIDENT
5
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
FUND PERFORMANCE JANUARY 31, 2000
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GROWTH OF $10,000 CLASS B
($ in Thousands)
<S> <C> <C>
Fund IFCI (4)
December 1992 $10,000 $10,000
January 1993 $9,570 $9,707
January 1994 $16,220 $18,234
January 1995 $9,712 $12,253
January 1996 $9,847 $13,254
January 1997 $11,914 $15,509
January 1998 $12,558 $16,232
January 1999 $7,620 $10,476
January 2000 $12,423(3) $18,458
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RETURNS. PERFORMANCE FOR CLASS
A, CLASS C, AND CLASS D SHARES WILL VARY FROM THE PERFORMANCE OF CLASS B
SHARES SHOWN ABOVE DUE TO DIFFERENCES IN SALES CHARGES AND EXPENSES.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
------------------------------------------------------------------------------------------------------------------
CLASS B SHARES* CLASS A SHARES+
------------------------------------------------------- -----------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 Year 65.19%(1) 60.19%(2) 1 Year 66.71%(1) 57.96%(2)
5 Years 5.05%(1) 4.72%(2) Since Inception (7/28/97) -8.37%(1) -10.32%(2)
Since Inception (12/30/92) 3.11%(1) 3.11%(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS C SHARES++ CLASS D SHARES#
------------------------------------------------------- ----------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 Year 65.47%(1) 64.47%(2) 1 Year 66.80%(1)
Since Inception (7/28/97) -9.09%(1) -9.09%(2) Since Inception (7/28/97) -8.25%(1)
</TABLE>
- ------------------------
(1) Figure shown assumes reinvestment of all distributions and does not reflect
the deduction of any sales charges.
(2) Figure shown assumes reinvestment of all distributions and the deduction of
the maximum applicable sales charge. See the Fund's current prospectus for
complete details on fees and sales charges.
(3) Closing value assuming a complete redemption on January 31, 2000.
(4) The International Finance Corporation's Investable Latin America Total
Return Index is a broad, neutral and historically consistent 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, fees or
charges. The Index is unmanaged and should not be considered an investment.
* The maximum CDSC for Class B is 5.0%. The CDSC declines to 0% after six
years.
+ The maximum front-end sales charge for Class A is 5.25%.
++ The maximum CDSC for Class C shares is 1% for shares redeemed within one
year of purchase.
# Class D shares have no sales charge.
6
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
PORTFOLIO OF INVESTMENTS JANUARY 31, 2000
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS AND RIGHTS (96.6%)
ARGENTINA (8.9%)
BUILDING MATERIALS
129,695 Juan Minetti S.A.*................................................ $ 267,212
------------
DIVERSIFIED FINANCIAL SERVICES
276,280 CEI Citicorp Holdings S.A.*....................................... 1,135,681
------------
INTERNATIONAL BANKS
73,723 Banco de Galicia y Buenos Aires S.A. de C.V. (Class B) (ADR)...... 1,363,875
53,040 Banco Frances del Rio de La Plato S.A. (ADR)...................... 1,206,660
------------
2,570,535
------------
INTERNET SERVICES
19,400 El Sitio, Inc.*................................................... 461,962
4,900 Impsat Fiber Networks (ADR)*...................................... 83,300
------------
545,262
------------
OIL & GAS PRODUCTION
101,335 PC Holdings S.A. (Class B) (ADR)*................................. 1,881,031
------------
REAL ESTATE
157,901 Inversiones y Representaciones S.A. (Class B)..................... 505,359
------------
STEEL/IRON ORE
566,500 Siderca S.A.I.C. (Class A)........................................ 1,150,168
------------
TELECOMMUNICATIONS
55,120 Telecom Argentina Stet - France Telecom S.A. (Class B) (ADR)...... 2,049,775
59,235 Telefonica de Argentina S.A. (Class B) (ADR)...................... 2,262,037
------------
4,311,812
------------
TOTAL ARGENTINA................................................... 12,367,060
------------
BRAZIL (37.2%)
ALCOHOLIC BEVERAGES
168,145 Companhia Cervejaria Brahma (ADR)................................. 2,196,394
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
CELLULAR TELEPHONE
56,500 Telesp Celular Participacoes S.A. (ADR) (Pref.)................... $ 2,252,938
30,822,000 Telesudeste Celular Participacoes S.A............................. 148,498
30,530 Telesudeste Celular Participacoes S.A. (ADR) (Pref.).............. 1,476,889
------------
3,878,325
------------
ELECTRIC UTILITIES
61,400,000 Centrais Eletricas Brasileiras S.A. (Class B) (Pref.)............. 1,198,762
2,042,400,000 Companhia de Electricidade do Estado Rio de Janeiro*.............. 583,542
70,533 Companhia Energetica de Minas Gerais S.A. (ADR) (Pref.)........... 1,201,265
51,340 Companhia Paranaense de Energia - Copel (ADR) (Pref.)............. 413,929
------------
3,397,498
------------
INTEGRATED OIL COMPANIES
32,626,000 Petroleo Brasileiro S.A. (Pref.).................................. 7,457,371
------------
INTERNATIONAL BANKS
281,900,000 Banco Bradesco S.A. (Pref.)....................................... 2,307,316
18,304,920 Banco Bradesco S.A. (Rights)*..................................... 78,040
26,853,560 Banco Itau S.A. (Pref.)........................................... 1,895,545
45,325 Uniao de Bancos Brasileiros S.A. (GDR)............................ 1,155,788
------------
5,436,689
------------
MULTI-SECTOR COMPANIES
621,600 Itausa Investimentos Itau S.A. (Pref.)............................ 592,000
14,567 Itausa Investimentos Itau S.A. (Rights)*.......................... 3,264
------------
595,264
------------
OTHER METALS/MINERALS
129,608 Companhia Vale do Rio Doce (Class A) (Pref.)...................... 3,630,476
266,358 Companhia Vale do Rio Doce S.A. (Debentures)*..................... --
------------
3,630,476
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
PORTFOLIO OF INVESTMENTS JANUARY 31, 2000, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
OTHER TELECOMMUNICATIONS
205,848 Embratel Participacoes S.A. (ADR) (Pref.)......................... $ 4,425,732
29,985 Tele Centro Sul Participacoes S.A. (ADR).......................... 2,473,763
20,752,000 Tele Norte Leste Participacoes S.A................................ 353,423
162,975 Tele Norte Leste Participacoes S.A. (ADR) (Pref.)................. 4,043,817
198,378 Telesp Participacoes S.A. (ADR) (Pref.)........................... 5,752,962
------------
17,049,697
------------
PAPER
13,940,000 Votorantim Celulose e Papel S.A. (Pref.).......................... 527,143
------------
SPECIALTY STEELS
86,610 Gerdau S.A. (ADR)................................................. 2,462,972
------------
STEEL/IRON ORE
145,700 Usinas Siderurgicas de Minas Gerais S.A. (Class A) (Pref.)........ 857,059
------------
TELECOMMUNICATIONS
22,780 Telecomunicacoes Brasileiras S.A. - Telebras (ADR) (Pref.)........ 2,961,400
------------
TOBACCO
176,700 Souza Cruz S.A.................................................... 1,153,252
------------
TOTAL BRAZIL...................................................... 51,603,540
------------
CHILE (5.7%)
AGRICULTURAL CHEMICALS
14,960 Sociedad Quimica y Minera de Chile S.A. (ADR)..................... 480,590
------------
ALCOHOLIC BEVERAGES
29,350 Compania Cervecerias Unidas S.A. (ADR)............................ 917,187
30,050 Vina Concha Y Toro S.A. (ADR)..................................... 1,292,150
------------
2,209,337
------------
BEVERAGES - NON-ALCOHOLIC
38,190 Embotelladora Andina S.A. (Series A) (ADR)........................ 656,391
------------
CONTAINERS/PACKAGING
24,700 Cristalerias de Chile S.A. (ADR).................................. 484,737
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
ELECTRIC UTILITIES
14,000 Chilectra S.A. (ADR).............................................. $ 266,437
22,720 Gener S.A. (ADR).................................................. 315,240
------------
581,677
------------
FOOD CHAINS
34,790 Distribucion Y Servicio D&S S.A. (ADR)............................ 704,498
------------
INTERNATIONAL BANKS
35,820 Banco Santander Chile (ADR)....................................... 568,643
36,750 Banco Santiago S.A. (ADR)......................................... 822,281
------------
1,390,924
------------
OTHER PHARMACEUTICALS
33,120 Laboratorio Chile S.A. (ADR)...................................... 778,320
------------
TELECOMMUNICATIONS
34,818 Cia de Telecommunicaciones de Chile S.A. (ADR).................... 689,832
------------
TOTAL CHILE....................................................... 7,976,306
------------
COLOMBIA (1.0%)
ALCOHOLIC BEVERAGES
278,370 Bavaria S.A....................................................... 1,393,959
------------
MEXICO (41.4%)
ALCOHOLIC BEVERAGES
1,306,800 Grupo Modelo S.A. de C.V. (Series C).............................. 3,011,499
------------
BEVERAGES - NON-ALCOHOLIC
41,350 Coca-Cola Femsa S.A. (ADR)........................................ 630,587
105,210 Fomento Economico Mexicano, S.A. de C.V. (ADR).................... 4,326,761
------------
4,957,348
------------
BROADCASTING
133,730 Grupo Televisa S.A. de C.V. (GDR)*................................ 7,422,015
------------
BUILDING MATERIALS
207,970 Apasco S.A. de C.V................................................ 1,214,423
146,627 Cemex S.A. de C.V. (ADR) *........................................ 3,207,466
------------
4,421,889
------------
DIVERSIFIED MANUFACTURING
299,700 ALFA S.A. (Class A)............................................... 1,118,797
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
PORTFOLIO OF INVESTMENTS JANUARY 31, 2000, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
FINANCE COMPANIES
88,500 Grupo Financiero Banamex Accival, S.A. de C.V. (Banacci)*......... $ 357,138
------------
MULTI-SECTOR COMPANIES
675,600 DESC S.A. de C.V. (Series B)*..................................... 512,864
------------
OTHER METALS/MINERALS
305,400 Grupo Mexico S.A. (Series B)...................................... 1,652,790
------------
OTHER SPECIALTY STORES
3,722,818 Cifra S.A. de C.V. (Series C)*.................................... 6,203,403
731,700 Organizacion Soriana S.A. de C.V. (Series B)...................... 2,853,554
------------
9,056,957
------------
PACKAGE GOODS/COSMETICS
809,600 Kimberly-Clark de Mexico S.A. de C.V. (A Shares).................. 2,490,428
------------
SPECIALTY FOODS/CANDY
1,583,578 Grupo Industrial Bimbo S.A. de C.V. (Series A)*................... 2,661,864
------------
TELECOMMUNICATIONS
171,293 Telefonos de Mexico S.A. de C.V. (Series L) (ADR)................. 18,242,704
------------
TEXTILES
377,279 Grupo Carso S.A. de C.V. (Series A1).............................. 1,553,965
------------
TOTAL MEXICO...................................................... 57,460,258
------------
PERU (1.9%)
BUILDING MATERIALS
337,322 Cementos Lima, S.A................................................ 386,948
------------
INTERNATIONAL BANKS
32,800 Credicorp Ltd. (ADR).............................................. 391,550
------------
PRECIOUS METALS
42,015 Compania de Minas Buenaventura S.A. (ADR)......................... 787,781
------------
TELECOMMUNICATIONS
63,315 Telefonica del Peru S.A. (ADR).................................... 1,032,826
------------
TOTAL PERU........................................................ 2,599,105
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
SPAIN (0.5%)
INTERNET SERVICES
3,440 Terra Networks, S.A.*............................................. $ 290,421
4,650 Terra Networks, S.A. (ADR)*....................................... 406,876
------------
TOTAL SPAIN....................................................... 697,297
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL COMMON AND PREFERRED STOCKS AND RIGHTS
(IDENTIFIED COST $93,248,282) (a)......................................................... 96.6% 134,097,525
OTHER ASSETS IN EXCESS OF LIABILITIES..................................................... 3.4 4,715,747
----- -------------
NET ASSETS................................................................................ 100.0% $ 138,813,272
----- -------------
----- -------------
</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 $44,173,507 and the
aggregate gross unrealized depreciation is $3,324,264, resulting in net
unrealized appreciation of $40,849,243.
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT JANUARY 31, 2000:
<TABLE>
<CAPTION>
IN
CONTRACTS TO EXCHANGE DELIVERY UNREALIZED
RECEIVE FOR DATE DEPRECIATION
- ----------------------------------------------------
<S> <C> <C> <C>
MXN 2,379,983 $284,505 2/01/00 $(332)
MXN 3,427,905 $357,595 2/02/00 (149)
-----
Total unrealized
depreciation................... $(481)
=====
</TABLE>
CURRENCY ABBREVIATION:
<TABLE>
<S> <C>
MXN Mexican Peso.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
SUMMARY OF INVESTMENTS JANUARY 31, 2000
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Agricultural Chemicals............................................................ $ 480,590 0.3%
Alcoholic Beverages............................................................... 8,811,189 6.3
Beverages - Non-Alcoholic......................................................... 5,613,739 4.0
Broadcasting...................................................................... 7,422,015 5.3
Building Materials................................................................ 5,076,049 3.7
Cellular Telephone................................................................ 3,878,325 2.8
Containers/Packaging.............................................................. 484,737 0.3
Diversified Financial Services.................................................... 1,135,681 0.8
Diversified Manufacturing......................................................... 1,118,797 0.8
Electric Utilities................................................................ 3,979,175 2.9
Finance Companies................................................................. 357,138 0.3
Food Chains....................................................................... 704,498 0.5
Integrated Oil Companies.......................................................... 7,457,371 5.4
International Banks............................................................... 9,789,698 7.1
Internet Services................................................................. 1,242,559 0.9
Multi-Sector Companies............................................................ 1,108,128 0.8
Oil & Gas Production.............................................................. 1,881,031 1.4
Other Metals/Minerals............................................................. 5,283,266 3.8
Other Pharmaceuticals............................................................. 778,320 0.6
Other Specialty Stores............................................................ 9,056,957 6.5
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Other Telecommunications.......................................................... $ 17,049,697 12.3%
Package Goods/Cosmetics........................................................... 2,490,428 1.8
Paper............................................................................. 527,143 0.4
Precious Metals................................................................... 787,781 0.6
Real Estate....................................................................... 505,359 0.4
Specialty Foods/Candy............................................................. 2,661,864 1.9
Specialty Steels.................................................................. 2,462,972 1.8
Steel/Iron Ore.................................................................... 2,007,227 1.4
Telecommunications................................................................ 27,238,574 19.6
Textiles.......................................................................... 1,553,965 1.1
Tobacco........................................................................... 1,153,252 0.8
------------ -----
$134,097,525 96.6%
------------ -----
------------ -----
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks..................................................................... $ 93,021,617 67.0%
Preferred Stocks.................................................................. 40,994,604 29.5
Rights............................................................................ 81,304 0.1
------------ -----
$134,097,525 96.6%
------------ -----
------------ -----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 2000
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $93,248,282)............................................................... $134,097,525
Cash.......................................................................................... 5,120,689
Receivable for:
Dividends................................................................................. 678,688
Shares of beneficial interest sold........................................................ 134,944
Interest.................................................................................. 13,424
Prepaid expenses and other assets............................................................. 45,085
------------
TOTAL ASSETS............................................................................. 140,090,355
------------
LIABILITIES:
Payable for:
Investments purchased..................................................................... 792,714
Investment advisory fee................................................................... 154,908
Shares of beneficial interest repurchased................................................. 136,860
Plan of distribution fee.................................................................. 122,713
Accrued expenses and other payables........................................................... 69,888
------------
TOTAL LIABILITIES........................................................................ 1,277,083
------------
NET ASSETS............................................................................... $138,813,272
============
COMPOSITION OF NET ASSETS:
Paid-in-capital............................................................................... $199,584,610
Net unrealized appreciation................................................................... 40,854,939
Accumulated net investment loss............................................................... (303,731)
Accumulated net realized loss................................................................. (101,322,546)
------------
NET ASSETS............................................................................... $138,813,272
============
CLASS A SHARES:
Net Assets.................................................................................... $750,601
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 61,244
NET ASSET VALUE PER SHARE................................................................ $12.26
============
MAXIMUM OFFERING PRICE PER SHARE,
(NET ASSET VALUE PLUS 5.54% OF NET ASSET VALUE)........................................ $12.94
============
CLASS B SHARES:
Net Assets.................................................................................... $136,699,043
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 11,396,785
NET ASSET VALUE PER SHARE................................................................ $11.99
============
CLASS C SHARES:
Net Assets.................................................................................... $775,708
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 64,557
NET ASSET VALUE PER SHARE................................................................ $12.02
============
CLASS D SHARES:
Net Assets.................................................................................... $587,920
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 47,798
NET ASSET VALUE PER SHARE................................................................ $12.30
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JANUARY 31, 2000
<TABLE>
<S> <C>
NET INVESTMENT LOSS:
INCOME
Dividends (net of $257,666 foreign withholding tax)............................................ $ 2,913,621
Interest....................................................................................... 165,254
-----------
TOTAL INCOME.............................................................................. 3,078,875
-----------
EXPENSES
Plan of distribution fee (Class A shares)...................................................... 946
Plan of distribution fee (Class B shares)...................................................... 1,253,425
Plan of distribution fee (Class C shares)...................................................... 4,723
Investment management fee...................................................................... 956,902
Transfer agent fees and expenses............................................................... 429,499
Management fee................................................................................. 374,012
Investment advisory fee........................................................................ 249,342
Custodian fees................................................................................. 189,270
Shareholder reports and notices................................................................ 184,285
Professional fees.............................................................................. 89,630
Registration fees.............................................................................. 58,077
Trustees' fees and expenses.................................................................... 17,755
Other.......................................................................................... 60,764
-----------
TOTAL EXPENSES............................................................................ 3,868,630
-----------
NET INVESTMENT LOSS....................................................................... (789,755)
-----------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain/loss on:
Investments................................................................................ 10,610,286
Foreign exchange transactions.............................................................. (396,710)
-----------
NET GAIN.................................................................................. 10,213,576
-----------
Net change in unrealized appreciation/depreciation on:
Investments................................................................................ 51,567,863
Translation of forward foreign currency contracts, other assets and liabilities denominated
in foreign currencies.................................................................... 161,666
-----------
NET APPRECIATION.......................................................................... 51,729,529
-----------
NET GAIN.................................................................................. 61,943,105
-----------
NET INCREASE................................................................................... $61,153,350
===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
MORGAN STANLEY DEAN WITTER 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, 2000 JANUARY 31, 1999
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income (loss)............................................ $ (789,755) $ 964,047
Net realized gain (loss)................................................ 10,213,576 (17,392,336)
Net change in unrealized appreciation/depreciation...................... 51,729,529 (68,311,686)
------------ ------------
NET INCREASE (DECREASE)............................................ 61,153,350 (84,739,975)
------------ ------------
Net decrease from transactions in shares of beneficial interest......... (28,450,098) (82,770,172)
------------ ------------
NET INCREASE (DECREASE)............................................ 32,703,252 (167,510,147)
NET ASSETS:
Beginning of period..................................................... 106,110,020 273,620,167
------------ ------------
END OF PERIOD
(INCLUDING NET INVESTMENT LOSSES OF $303,731 AND $854,690,
RESPECTIVELY)....................................................... $138,813,272 $106,110,020
============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 2000
1. ORGANIZATION AND ACCOUNTING POLICIES
Morgan Stanley Dean Witter Latin American Growth Fund (the "Fund"), formerly
TCW/DW Latin American Growth 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 converted to a multiple class
share structure.
The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase and some
Class A shares, and most Class B shares and Class C shares are subject to a
contingent deferred sales charge imposed on shares redeemed within one year, six
years and one year, respectively. Class D shares are not subject to a sales
charge. Additionally, Class A shares, Class B shares and Class C shares incur
distribution expenses.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ from
those estimates.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) an equity 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 Morgan Stanley Dean Witter Advisors Inc. (the "Investment
Manager") or TCW Investment Management Company (the "Sub-Advisor") 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
14
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 2000, CONTINUED
comparable in coupon, rating and maturity or an appropriate matrix utilizing
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.
15
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 2000, 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. INVESTMENT MANAGEMENT AND SUB-ADVISORY AGREEMENTS
Pursuant to a new Investment Management Agreement that took effect June 28,
1999, the Fund pays the Investment Manager an investment management fee, accrued
daily and payable monthly, by applying the following annual rates to the net
assets of the Fund determined as of the close of each business day: 1.25% to the
portion of daily net assets not exceeding $500 million and 1.20% to the portion
of the daily net assets exceeding $500 million.
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund's 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 Investment
Manager. The Investment Manager also bears the cost of telephone services, heat,
light, power and other utilities provided to the Fund.
Under a new Sub-Advisory Agreement that took effect June 28, 1999 between the
Investment Manager and the Sub-Advisor, the Sub-Advisor provides the Fund with
investment advice and portfolio management relating to the Fund's investments in
securities, subject to the overall
16
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 2000, CONTINUED
supervision of the Investment Manager. As compensation for its services provided
pursuant to the Sub-Advisory Agreement, the Investment Manager pays the
Sub-Advisor compensation equal to 40% of its monthly compensation.
Prior to June 28, 1999, pursuant to a Management Agreement with Morgan Stanley
Dean Witter Services Company Inc. (the "Former Manager"), the Fund paid the
Former 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 maintained certain of
the Fund's books and records and furnished, at its own expense, office space,
facilities, equipment, clerical, bookkeeping and certain legal services and paid
the salaries of all personnel, including officers of the Fund who were employees
of the Manager. The Manager also bore the cost of telephone services, heat,
light, power and other utilities provided to the Fund.
Prior to June 28, 1999, pursuant to an Investment Advisory Agreement with the
current Sub-Advisor, the Fund paid an investment 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.
Under the terms of the Investment Advisory Agreement, the Fund had retained the
current Sub-Advisor to invest the Fund's assets, including placing orders for
the purchase and sale of portfolio securities. The current Sub-Advisor obtained
and evaluated such information and advice relating to the economy, securities
markets, and specific securities as it considered necessary or useful to
continuously manage the assets of the Fund in a manner consistent with its
investment objective. In addition, the current Sub-Advisor paid the salaries of
all personnel, including officers of the Fund who were employees of the current
Sub-Advisor.
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Morgan Stanley Dean Witter Distributors
Inc. (the "Distributor"), an affiliate of the Investment Manager. The Fund has
adopted a Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the
Act. The Plan provides that the Fund will pay the
17
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 2000, CONTINUED
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
Investment 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 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 $19,948,905 at January 31, 2000.
In the case of Class A shares and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 1.0% of the average daily
net assets of Class A or Class C, respectively, will not be reimbursed by the
Fund through payments in any subsequent year, except
18
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 2000, CONTINUED
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, 2000,
the distribution fee was accrued for Class A shares and Class C shares at the
annual rate of 0.22% and 0.89%, respectively.
The Distributor has informed the Fund that for the year ended January 31, 2000,
it received contingent deferred sales charges from certain redemptions of the
Fund's Class B shares and Class C shares of $310,386 and $1,443, respectively,
and received $3,307 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.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the year ended January 31, 2000 aggregated
$70,718,981 and $88,587,355, respectively.
For the year ended January 31, 2000, the Fund incurred brokerage commissions of
$5,159 with Morgan Stanley & Co., Inc., an affiliate of the Investment Manager
and Distributor, for the portfolio transactions executed on behalf of the Fund.
Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At January 31, 2000, the Fund had
transfer agent fees and expenses payable of approximately $5,300.
19
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 2000, CONTINUED
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
JANUARY 31, 2000 JANUARY 31, 1999
--------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
CLASSS A SHARES
Sold............................................................. 903,814 $ 9,285,862 14,534 $ 136,263
Redeemed......................................................... (850,499) (8,815,570) (15,663) (144,192)
---------- ------------- ----------- ------------
Net increase (decrease) - Class A................................ 53,315 470,292 (1,129) (7,929)
---------- ------------- ----------- ------------
Class B SHARES
Sold............................................................. 1,854,204 19,260,542 2,410,988 25,661,963
Redeemed......................................................... (5,056,135) (48,993,518) (10,363,817) (108,304,032)
---------- ------------- ----------- ------------
Net decrease - Class B........................................... (3,201,931) (29,732,976) (7,952,829) (82,642,069)
---------- ------------- ----------- ------------
Class C SHARES
Sold............................................................. 59,774 653,992 27,783 283,451
Redeemed......................................................... (46,151) (464,154) (42,306) (403,625)
---------- ------------- ----------- ------------
Net increase (decrease) - Class C................................ 13,623 189,838 (14,523) (120,174)
---------- ------------- ----------- ------------
Class D SHARES
Sold............................................................. 119,896 1,532,077 -- --
Redeemed......................................................... (72,756) (909,329) -- --
---------- ------------- ----------- ------------
Net increase - Class D........................................... 47,140 622,748 -- --
---------- ------------- ----------- ------------
Net decrease in Fund............................................. (3,087,853) $ (28,450,098) (7,968,481) $(82,770,172)
========== ============= =========== ============
</TABLE>
6. FEDERAL INCOME TAX STATUS
At January 31, 2000, the Fund had a net capital loss carryover of approximately
$98,817,000, 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>
AMOUNT IN THOUSANDS
- ----------------------------------------
2004 2005 2007 2008
- ------- -------- -------- --------
<S> <C> <C> <C>
$73,539 $19,839 $3,058 $2,381
======= ======= ====== ======
</TABLE>
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 foreign
currency losses of approximately $99,000 during fiscal 2000.
As of January 31, 2000, the Fund had temporary book/tax differences attributable
to capital loss deferrals on wash sales, income from the mark-to-market of
passive foreign investment companies and post-October losses and permanent
book/tax differences primarily attributable to foreign currency losses and a net
operating loss. To reflect reclassifications arising from the permanent
differences, paid-in-capital was charged $1,869,901, accumulated net realized
loss was credited $529,187 and accumulated net investment loss was credited
$1,340,714.
20
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 2000, CONTINUED
7. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS
The Fund may enter into forward foreign currency contracts ("forward contracts")
to facilitate settlement of foreign currency denominated portfolio transactions
or to manage foreign currency exposure associated with foreign currency
denominated securities.
Forward contracts involve elements of market risk in excess of the amounts
reflected in the Statement of Assets and Liabilities. The Fund bears the risk of
an unfavorable change in the foreign exchange rates underlying the forward
contracts. Risks may also arise upon entering into these contracts from the
potential inability of the counterparties to meet the terms of their contracts.
At January 31, 2000, the Fund had outstanding forward contracts.
At January 31, 2000, the Fund's cash balance consisted principally of interest
bearing deposits with Chase Manhattan Bank N.A., the Fund's custodian.
At January 31, 2000, investment in securities of issuers in Brazil and Mexico
represented 37.2% and 41.4% of net assets, respectively. These investments, as
well as other non-U.S. investments which involve risks and considerations not
present with respect to U.S. securities may be affected by economic or political
developments in these regions.
21
<PAGE>
MORGAN STANLEY DEAN WITTER 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 PERIOD
FOR THE YEAR FOR THE YEAR JULY 28, 1997*
ENDED ENDED THROUGH
JANUARY 31, 2000 JANUARY 31, 1999 JANUARY 31, 1998
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CLASS A SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period.................................. $ 7.33 $12.14 $15.22
------ ------ ------
Income (loss) from investment operations:
Net investment income (loss)....................................... (0.01) 0.15 (0.07)
Net realized and unrealized gain (loss)............................ 4.94 (4.96) (3.01)
------ ------ ------
Total income (loss) from investment operations........................ 4.93 (4.81) (3.08)
------ ------ ------
Net asset value, end of period........................................ $12.26 $ 7.33 $12.14
====== ====== ======
TOTAL RETURN+......................................................... 66.71% (39.62)% (20.24)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 2.28%(3) 2.21 %(3) 2.15 %(2)
Net investment income (loss).......................................... 0.16%(3) 1.26 %(3) (1.04)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $751 $58 $110
Portfolio turnover rate............................................... 59% 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
22
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE YEAR ENDED JANUARY 31,
--------------------------------------------------------------------
2000++ 1999++ 1998*++ 1997 1996
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CLASS B SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of period.................. $ 7.24 $12.09 $11.47 $ 9.48 $ 9.35
-------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income (loss)....................... (0.06) 0.05 (0.09) (0.04) (0.06)
Net realized and unrealized gain (loss)............ 4.81 (4.90) 0.71 2.03 0.19
-------- -------- -------- -------- --------
Total income (loss) from investment operations........ 4.75 (4.85) 0.62 1.99 0.13
-------- -------- -------- -------- --------
Net asset value, end of period........................ $11.99 $ 7.24 $12.09 $11.47 $ 9.48
======== ======== ======== ======== ========
TOTAL RETURN+......................................... 65.19 % (40.12)% 5.41 % 20.99 % 1.39 %
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................. 3.06 %(1) 2.98 %(1) 2.81 % 2.78 % 2.98 %
Net investment income (loss).......................... (0.62)%(1) 0.49%(1) (0.64)% (0.29)% (0.61)%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............... $136,699 $105,678 $272,710 $270,843 $261,066
Portfolio turnover rate............................... 59 % 27 % 30 % 29 % 64 %
</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
23
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR FOR THE YEAR JULY 28, 1997*
ENDED ENDED THROUGH
JANUARY 31, 2000 JANUARY 31, 1999 JANUARY 31, 1998
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CLASS C SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period.................................. $ 7.24 $12.10 $15.22
------ ------ ------
Income (loss) from investment operations:
Net investment income (loss)....................................... (0.06) 0.06 (0.12)
Net realized and unrealized gain (loss)............................ 4.84 (4.92) (3.00)
------ ------ ------
Total income (loss) from investment operations........................ 4.78 (4.86) (3.12)
------ ------ ------
Net asset value, end of period........................................ $12.02 $ 7.24 $12.10
====== ====== ======
TOTAL RETURN+......................................................... 65.47 % (40.17) % (20.50)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 2.95 %(3) 2.98 %(3) 2.91 %(2)
Net investment income (loss).......................................... (0.51)%(3) 0.49 %(3) (1.76)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $776 $369 $792
Portfolio turnover rate............................................... 59 % 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
24
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR FOR THE YEAR JULY 28, 1997*
ENDED ENDED THROUGH
JANUARY 31, 2000 JANUARY 31, 1999 JANUARY 31, 1998
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CLASS D SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period.................................. $ 7.35 $12.16 $15.22
------ ------ ------
Income (loss) from investment operations:
Net investment income (loss)....................................... (0.02) 0.16 (0.04)
Net realized and unrealized gain (loss)............................ 4.97 (4.97) (3.02)
------ ------ ------
Total income (loss) from investment operations........................ 4.95 (4.81) (3.06)
------ ------ ------
Net asset value, end of period........................................ $12.30 $ 7.35 $12.16
====== ====== ======
TOTAL RETURN+......................................................... 66.80% (39.56)% (20.11)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 2.06%(3) 1.98 %(3) 1.86 %(2)
Net investment income (loss).......................................... 0.38%(3) 1.49%(3) (0.52)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $588 $5 $8
Portfolio turnover rate............................................... 59% 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
25
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND TRUSTEES
OF MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Morgan Stanley Dean Witter Latin
American Growth Fund (the "Fund"), formerly TCW/DW Latin American Growth Fund,
at January 31, 2000, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended and
the financial highlights for each of the periods indicated, in conformity with
accounting principles generally accepted in the United States. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with auditing
standards generally accepted in the United States which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
January 31, 2000 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
1177 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
MARCH 14, 2000
26
<PAGE>
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
Wayne E. Hedien
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Mitchell M. Merin
President
Barry Fink
Vice President, Secretary and General Counsel
Michael P. Reilly
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Morgan Stanley Dean Witter Trust FSB
Harborside Financial Center -- Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Morgan Stanley Dean Witter Advisors Inc.
Two World Trade Center
New York, New York 10048
SUB-ADVISOR
TCW Investment Management Company
865 South Figueroa Street, Suite 1800
Los Angeles, California 90017
This report is submitted for the general information of shareholders of
the Fund. For more detailed information about the Fund, its officers and
trustees, fees, expenses and other pertinent information, please see the
prospectus of the Fund.
This report is not authorized for distribution to prospective investors in
the Fund unless preceded or accompanied by an effective prospectus. Read
the prospectus carefully before investing.
MORGAN STANLEY
DEAN WITTER
LATIN AMERICAN
GROWTH FUND
ANNUAL REPORT
JANUARY 31, 2000
