<PAGE>
MORGAN STANLEY DEAN WITTER LATIN TWO WORLD TRADE CENTER, NEW
AMERICAN GROWTH FUND YORK, NEW YORK 10048
LETTER TO THE SHAREHOLDERS JULY 31, 2000
DEAR SHAREHOLDER:
Following a breathtaking rally toward the end of 1999, most Latin American
equity markets witnessed volatile monthly performances during the first seven
months of 2000. The short-lived Y2K relief gave way to concerns about higher
U.S. interest rates, tighter global liquidity and decelerating U.S. economic
growth -- all of which suggest a weaker global growth outlook for 2001. As a
result, Latin American equity markets were not immune to the sharp global
volatility of the equity markets witnessed during April and May. The region's
markets were also negatively influenced by the rebalancing of the MSCI Emerging
Equities Markets Index at the end of May. As a percentage of the MSCI Emerging
Markets Equities Index, the Latin America component was decreased from
28 percent to 23 percent, to accommodate the reinclusion of Malaysia and a
greater weighting for Taiwan. As a result of their lower weighting, the Latin
American markets suffered a period of reduced buying interest. Further, while
the economic backdrop for Latin America remains positive, the region's equity
markets are presently working to digest a large number of new equity issues
totaling roughly $5 billion. In the near term, Latin American equities are
likely to continue taking their direction from U.S. monetary policy and the
behavior of U.S. stock markets.
BRAZIL
Brazilian stocks rose 8.2 percent during the six-month period ended July 31,
2000, outperforming most other Latin American equity markets. Real GDP growth
was a healthy 3.1 percent during the first quarter, which should help the
economy reach its 2000 growth target of about 4 percent. Even with robust
economic growth, the Brazilian central bank's full-year inflation target of
6 percent appears achievable. Export growth is strong, and imports have
increased as a result of higher domestic demand. The combination of inflation
being under control, a stable trade balance and strong inflows of foreign direct
investment has allowed the Brazilian monetary authorities to lower the benchmark
overnight interest rate 350 basis points, to 16.5 percent.
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
LETTER TO THE SHAREHOLDERS JULY 31, 2000, CONTINUED
MEXICO
Mexican stock prices rose 2.29 percent during the six months ended July 31,
2000, hurt by the fall in U.S. share prices as well as concerns that a hard
landing of the U.S. economy could derail Mexico's strong growth trend. Investors
were also concerned that a narrow margin of victory in the July 2 presidential
election might lead to a contested election and that could undermine the
country's political and economic stability. Instead, the decisive, uncontested
victory by the opposition PAN (National Action Party) candidate is likely to
strengthen investor confidence in the country's democracy and therefore improve
Mexico's political risk profile. However, a Telmex earnings disappointment in
July prompted a sharp sell-off in the equity market. Less than a month earlier,
the company had completed a highly successful global secondary offering, which
had attracted many nondedicated buyers. With respect to the economy, domestic
demand remains robust. While real interest rates have declined to the 5 to
6 percent level, it is difficult to envision further rate declines in the near
term, especially given the Mexican central bank's determination to avoid
overheating the economy.
ARGENTINA
The Argentine equity market fell 11.7 percent during the period under review, as
a result of increased concerns about the country's ability to meet its IMF
(International Monetary Fund) fiscal deficit targets. While the government was
able to meet the IMF-imposed target of $2.15 billion for the first half of 2000,
this progress was attributed to higher than expected tax revenues, a successful
$3.3 billion debt swap that helped reduce debt-servicing costs, and
$2.3 billion in spending cuts applied to the 2000 budget. Moreover, recent
economic data have shown that the recovery in domestic demand remains subdued,
prompting the Argentine finance ministry to reduce its full-year growth target
from 4 percent to 3 percent. Given that further austerity measures may depress
economic activity even further, the consensus appears to be that the IMF will
likely relax Argentina's fiscal deficit targets for the second half of this
year.
CHILE
Chilean stocks declined 15.3 percent during the six-month period under review,
hurt by weakness of the national currency and rising oil prices. As a result,
the Chilean central bank acknowledged that inflation would likely be about
1 percent greater than its original 3.5 percent target for 2000. The
long-anticipated lifting of capital repatriation restrictions failed to spark
sustained interest in Chilean equities, and trading volumes have remained low.
Investor interest may improve in September, however, when Chile is expected to
eliminate the capital gains tax currently assessed on foreign
2
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
LETTER TO THE SHAREHOLDERS JULY 31, 2000, CONTINUED
investors. Following a series of strong economic data in previous months, the
economy appears on track to grow 5 percent or more this year. However, economic
growth is being driven primarily by the export sector, with very little
spillover to domestic consumption. As a result, there have been substantial
downward revisions to earnings estimates for the publicly traded Chilean
companies.
PERU
Peruvian equity prices fell 17.1 percent during the six months ended July 31,
2000, hurt by controversy surrounding the disputed presidential election, which
was held despite pleas by the Organization of American States (OAS) for a
postponement. President Alberto Fujimori won with only a slight majority even
though the opposition candidate had withdrawn his candidacy. The United States
ultimately decided to recognize the validity of the election after drawing
virtually no support from fellow members of the OAS to sanction Peru. On the
positive side, the economic recovery continues to gather steam, with
first-quarter real GDP rising 8.6 percent while inflation remains muted. Also,
Standard & Poor's reaffirmed its sovereign credit ratings for Peru and removed
it from credit watch status, indicating a stable outlook.
COLOMBIA
The Colombian equity market declined more than 35 percent over the past six
months. The Pastrana administration's bold initiative calling for a referendum
to dissolve Congress backfired because the opposition party was able to lodge
corruption allegations aggressively against the administration. Despite a recent
truce between the two main parties, the political crisis has called into
question the government's ability to achieve fiscal targets agreed upon with the
IMF, prompting Standard & Poor's to cut the country's long-term foreign currency
sovereign rating. Toward the end of the period, however, investors were
encouraged by U.S. congressional approval of $1.6 billion in aid as well as
more-definitive signs of a recovery in the economy.
VENEZUELA
Venezuela outperformed the entire region, gaining 21.5 percent during the six
months ended July 31, 2000. Most of the gains can be attributed to the hostile
bid by AES Corp. (Applied Energy Services, Inc.) for Electricidad de Caracas.
Venezuelan stocks reacted very little to the landslide reelection of President
Chavez. Instead, the market has traded in a lackluster fashion as a result of
investors' concerns regarding his economic policy. The Venezuelan economy has
benefited from the resilience of oil prices and a government announcement of
plans to boost this year's spending to
3
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
LETTER TO THE SHAREHOLDERS JULY 31, 2000, CONTINUED
29 percent above budget by using oil windfall proceeds. Nevertheless, the
economy grew only 0.3 percent during the first quarter and the Chavez
administration was anxious to reactivate it in advance of the presidential
election.
PERFORMANCE
For the six-month period ended July 31, 2000, Morgan Stanley Dean Witter Latin
American Growth Fund's Class B shares posted a total return of -2.34 percent,
compared to a return of -0.65 percent for the S&P/IFCI Latin America Total
Return Index.(1) For the same period, the Fund's Class A, C and D shares had
total returns of -1.96 percent, -2.34 percent and -1.79 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 but
do not reflect the deduction of any applicable sales charges.
According to TCW Investment Management Company (TCW), the Fund's sub-advisor,
the Fund's underperformance relative to the region's benchmarks can be
attributed primarily to its overweighted position in Mexican equities where
preelection jitters resulted in lagging stock prices. In Chile and Venezuela,
stock selection also contributed to the Fund's underperformance.
PORTFOLIO STRATEGY
During the period under review, the Fund continued to focus on blue-chip
companies exhibiting strong and reliable cash flow generation, as well as
companies with low leverage and quality management. The Fund's largest industry
exposure continued to be telecommunications, where earnings growth is being
driven by increased subscribers of both fixed and cellular telephony and by
increased usage of the Internet and business data networks. The Fund increased
its exposure to the retail sector, because consumer spending is expected to
accompany economic recovery in the region.
With respect to specific country allocation, the Fund maintained an overweighted
position in Mexico, given the acceleration of economic growth being witnessed
there this year, which may translate into double-digit corporate earnings
growth. In addition, Moody's recent upgrading of Mexico's sovereign debt rating
to investment grade reduces the risk associated with Mexican equities and lowers
the cost of financing for high-quality Mexican corporate borrowers. The Fund
also maintained an
----------------
(1) The S&P/IFCI 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.
4
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
LETTER TO THE SHAREHOLDERS JULY 31, 2000, CONTINUED
overweighted position in Brazilian stocks where interest rates declined as a
result of fiscal restraint on the part of the government. With declining
interest rates, economic recovery has gained steam. The Fund held a neutral
weighting in the Argentine market, where fiscal progress is being made but the
economic recovery is less robust. The Fund is underweighted in Chile, where
valuations remain uncompelling and the market underperformed the other Latin
American markets. The Fund also maintained underweighted positions in the
smaller markets of Peru, Colombia and Venezuela.
LOOKING AHEAD
In spite of the negative returns that Latin American markets have generated year
to date, TCW believes that the backdrop for Latin American equities is
favorable. Overall economic growth remains on track and should translate into
robust corporate earnings growth. Inflationary pressures in the region are under
control. The completion of presidential elections in Mexico, Peru and Venezuela
point toward diminished political risk. And finally, equity market valuations do
not appear to be stretched. TCW believes that poor returns year to date are
related to concerns of rising interest rates in developed countries and the
potential impact these rates would have on global economic growth. A soft
landing scenario for the global economy may be conducive to higher stock prices
in Latin America.
We appreciate your ongoing support of Morgan Stanley Dean Witter Latin American
Growth Fund and look forward to continuing to serve your investment needs.
Very truly yours,
<TABLE>
<S> <C>
/s/ Charles A. Fiumefreddo /s/ Mitchell M. Merin
CHARLES A. FIUMEFREDDO MITCHELL M. MERIN
CHAIRMAN OF THE BOARD PRESIDENT
</TABLE>
5
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN
AMERICAN GROWTH FUND
FUND PERFORMANCE JULY 31, 2000
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
------------------------------------------------------------------------------------------------
CLASS A SHARES* CLASS B SHARES**
--------------------------------------------- ---------------------------------------------
PERIOD ENDED 7/31/00 PERIOD ENDED 7/31/00
------------------------- -------------------------
<S> <C> <C> <C> <C> <C>
1 Year 24.15%(1) 17.63%(2) 1 Year 22.95%(1) 17.95%(2)
Since Inception (7/28/97) (7.65)%(1) (9.29)%(2) 5 Years 5.75%(1) 5.43%(2)
Since Inception 12/30/92 2.58%(1) 2.58%(2)
</TABLE>
<TABLE>
<CAPTION>
CLASS C SHARES+ CLASS D SHARES++
--------------------------------------------- ---------------------------------------------
PERIOD ENDED 7/31/00 PERIOD ENDED 7/31/00
------------------------- -------------------------
<S> <C> <C> <C> <C> <C>
1 Year 22.90%(1) 21.90%(2) 1 Year 24.25%(1)
Since Inception (7/28/97) (8.37)%(1) (8.37)%(2) Since Inception (7/28/97) (7.49)%(1)
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RETURNS. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE. WHEN YOU SELL FUND SHARES, THEY MAY BE WORTH
LESS THAN THEIR ORIGINAL COST.
------------------------
(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.
* The maximum front-end sales charge for Class A is 5.25%.
** The maximum contingent deferred sales charge (CDSC) for Class B is 5.0%.
The CDSC declines to 0% after six years.
+ The maximum contingent deferred sales charge for Class C shares is 1% for
shares redeemed within one year of purchase.
++ Class D shares have no sales charge.
6
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
PORTFOLIO OF INVESTMENTS JULY 31, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS (97.2%)
ARGENTINA (6.8%)
DIVERSIFIED FINANCIAL SERVICES
276,280 CEI Citicorp Holdings S.A.*......................................................... $ 1,105,308
------------
INTERNATIONAL BANKS
38,172 Banco de Galicia y Buenos Aires S.A. de C.V. (Class B) (ADR)........................ 670,396
32,940 Banco Frances del Rio de La Plato S.A. (ADR)........................................ 730,856
------------
1,401,252
------------
OIL & GAS PRODUCTION
101,335 PC Holdings S.A. (Class B) (ADR).................................................... 1,748,029
------------
STEEL/IRON ORE
566,500 Siderca S.A.I.C. (Class A).......................................................... 1,161,522
------------
TELECOMMUNICATIONS
127,020 Telecom Argentina Stet - France Telecom S.A. (Class B) (ADR)........................ 3,254,888
------------
TOTAL ARGENTINA..................................................................... 8,670,999
------------
BRAZIL (40.3%)
ALCOHOLIC BEVERAGES
125,185 Companhia Cervejaria Brahma (ADR)................................................... 2,652,357
------------
CELLULAR TELEPHONE
58,050 Telesp Celular Participacoes S.A. (ADR) (Pref.)..................................... 2,187,759
------------
ELECTRIC UTILITIES
91,805,000 Centrais Eletricas Brasileiras S.A. (Class B) (Pref.)............................... 2,206,406
72,033 Companhia Energetica de Minas Gerais S.A. (ADR) (Pref.)............................. 1,368,627
111,870 Companhia Paranaense de Energia - Copel (ADR) (Pref.)............................... 1,041,789
------------
4,616,822
------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
FOOD CHAINS
40,970 Companhia Brasileira de Distribuicao Grupo Pao de Acucar (ADR)...................... $ 1,293,116
------------
INTEGRATED OIL COMPANIES
310,040 Petroleo Brasileiro S.A. (Pref.).................................................... 8,250,364
------------
INTERNATIONAL BANKS
432,574,920 Banco Bradesco S.A. (Pref.)......................................................... 3,780,487
34,495,560 Banco Itau S.A. (Pref.)............................................................. 3,188,665
48,825 Uniao de Bancos Brasileiros S.A. (GDR).............................................. 1,461,699
------------
8,430,851
------------
METALS FABRICATIONS
42,752,000 Companhia Siderurgica Nacional...................................................... 1,425,067
------------
MULTI-SECTOR COMPANIES
867,183 Itausa Investimentos Itau S.A. (Pref.).............................................. 879,328
------------
OTHER METALS/MINERALS
154,418 Companhia Vale do Rio Doce (Class A) (Pref.)........................................ 4,273,529
266,358 Companhia Vale do Rio Doce S.A. (Debentures)*....................................... --
------------
4,273,529
------------
OTHER TELECOMMUNICATIONS
37,590,000 Brasil Telecom Participacoes S.A.................................................... 389,588
32,085 Brasil Telecom Participacoes S.A. (ADR)............................................. 2,310,120
138,708 Embratel Participacoes S.A. (ADR) (Pref.)........................................... 2,982,222
13,152,000 Tele Norte Leste Participacoes S.A.................................................. 262,966
178,463 Tele Norte Leste Participacoes S.A. (ADR) (Pref.)................................... 4,271,958
------------
10,216,854
------------
SPECIALTY STEELS
85,580 Gerdau S.A. (ADR)................................................................... 1,128,586
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
PORTFOLIO OF INVESTMENTS JULY 31, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
STEEL/IRON ORE
106,300 Usinas Siderurgicas de Minas Gerais S.A. (Class A) (Pref.).......................... $ 594,923
------------
TELECOMMUNICATIONS
56,310 Telecomunicacoes Brasileiras S.A. - Telebras (ADR) (Pref.).......................... 5,110,133
------------
TOTAL BRAZIL........................................................................ 51,059,689
------------
CHILE (4.2%)
AGRICULTURAL CHEMICALS
14,960 Sociedad Quimica y Minera de Chile S.A. (ADR)....................................... 303,875
------------
ALCOHOLIC BEVERAGES
29,350 Compania Cervecerias Unidas S.A. (ADR).............................................. 645,700
19,550 Vina Concha Y Toro S.A. (ADR)....................................................... 711,131
------------
1,356,831
------------
BEVERAGES - NON-ALCOHOLIC
57,520 Embotelladora Andina S.A. (Series A) (ADR).......................................... 701,025
------------
CONTAINERS/PACKAGING
24,700 Cristalerias de Chile S.A. (ADR).................................................... 385,937
------------
FOOD CHAINS
21,140 Distribucion Y Servicio D&S S.A. (ADR).............................................. 351,453
------------
TELECOMMUNICATIONS
151,608 Cia de Telecommunicaciones de Chile S.A. (ADR)...................................... 2,274,120
------------
TOTAL CHILE......................................................................... 5,373,241
------------
MEXICO (43.5%)
ALCOHOLIC BEVERAGES
1,408,030 Grupo Modelo S.A. de C.V. (Series C)................................................ 3,266,786
------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
BEVERAGES - NON-ALCOHOLIC
83,100 Fomento Economico Mexicano, S.A. de C.V. (ADR)...................................... $ 3,453,844
------------
BROADCASTING
109,675 Grupo Televisa S.A. de C.V. (GDR)*.................................................. 7,087,747
------------
BUILDING MATERIALS
149,570 Apasco S.A. de C.V.................................................................. 1,037,859
127,958 Cemex S.A. de C.V. (ADR)............................................................ 3,007,013
------------
4,044,872
------------
DIVERSIFIED MANUFACTURING
377,279 Grupo Carso S.A. de C.V. (Series A1)................................................ 1,290,808
------------
INTERNATIONAL BANKS
731,300 Grupo Financiero Banamex Accival, S.A. de C.V. (Banacci)*........................... 3,510,678
1,189,300 Grupo Financiero Bancomer, S.A. de C.V. (O Shares).................................. 617,983
------------
4,128,661
------------
OTHER METALS/MINERALS
298,400 Grupo Mexico S.A. (Series B)........................................................ 1,119,838
------------
OTHER SPECIALTY STORES
511,730 Organizacion Soriana S.A. de C.V. (Series B)........................................ 1,904,010
3,626,618 Wal-Mart de Mexico S.A. de C.V. (Series C)*......................................... 8,084,570
------------
9,988,580
------------
PACKAGE GOODS/COSMETICS
507,700 Kimberly-Clark de Mexico S.A. de C.V. (A Shares).................................... 1,473,758
------------
SPECIALTY FOODS/CANDY
721,178 Grupo Industrial Bimbo S.A. de C.V. (Series A)...................................... 1,218,284
------------
TELECOMMUNICATIONS
343,423 Telefonos de Mexico S.A. de C.V. (Series L) (ADR)................................... 18,072,635
------------
TOTAL MEXICO........................................................................ 55,145,813
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
PORTFOLIO OF INVESTMENTS JULY 31, 2000 (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
PERU (1.0%)
BUILDING MATERIALS
372,188 Cementos Lima, S.A.................................................................. $ 321,452
------------
INTERNATIONAL BANKS
48,100 Credicorp Ltd. (ADR)................................................................ 378,787
------------
PRECIOUS METALS
34,555 Compania de Minas Buenaventura S.A. (ADR)........................................... 570,158
------------
TOTAL PERU.......................................................................... 1,270,397
------------
SPAIN (0.4%)
INTERNET SERVICES
3,440 Terra Networks, S.A.*............................................................... 130,645
8,950 Terra Networks, S.A. (ADR)*......................................................... 341,778
------------
TOTAL SPAIN......................................................................... 472,423
------------
UNITED STATES (0.2%)
INTERNET SERVICES
17,570 StarMedia Network, Inc.*............................................................ 265,746
------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
VENEZUELA (0.8%)
TELECOMMUNICATIONS
38,345 Compania Anonima Nacional Telefonos de Venezuela (CANTV) (ADR)...................... $ 939,453
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(COST $95,410,432) (A).................................................................... 97.2% 123,197,761
OTHER ASSETS IN EXCESS OF LIABILITIES..................................................... 2.8 3,612,929
----- -------------
NET ASSETS................................................................................ 100.0% $ 126,810,690
----- -------------
----- -------------
</TABLE>
---------------------
ADR American Depository Receipt.
GDR Global Depository Receipt.
* Non-income producing security.
(a) The aggregate cost for federal income tax purposes approximates the
aggregate cost for book purposes. The aggregate gross unrealized
appreciation is $33,383,919 and the aggregate gross unrealized depreciation
is $5,596,590, resulting in net unrealized appreciation of $27,787,329.
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
SUMMARY OF INVESTMENTS JULY 31, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Agricultural Chemicals............................................................ $ 303,875 0.2%
Alcoholic Beverages............................................................... 7,275,975 5.7
Beverages - Non-Alcoholic......................................................... 4,154,869 3.3
Broadcasting...................................................................... 7,087,747 5.6
Building Materials................................................................ 4,366,324 3.4
Cellular Telephone................................................................ 2,187,759 1.7
Containers/Packaging.............................................................. 385,937 0.3
Diversified Financial Services.................................................... 1,105,308 0.9
Diversified Manufacturing......................................................... 1,290,808 1.0
Electric Utilities................................................................ 4,616,822 3.6
Food Chains....................................................................... 1,644,568 1.3
Integrated Oil Companies.......................................................... 8,250,364 6.5
International Banks............................................................... 14,339,551 11.3
Internet Services................................................................. 738,170 0.6
Metals Fabrications............................................................... 1,425,067 1.1
Multi-Sector Companies............................................................ 879,328 0.7
Oil & Gas Production.............................................................. 1,748,029 1.4
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Other Metals/Minerals............................................................. $ 5,393,366 4.3%
Other Specialty Stores............................................................ 9,988,580 7.9
Other Telecommunications.......................................................... 10,216,855 8.1
Package Goods/Cosmetics........................................................... 1,473,758 1.2
Precious Metals................................................................... 570,158 0.4
Specialty Foods/Candy............................................................. 1,218,284 1.0
Specialty Steels.................................................................. 1,128,586 0.9
Steel/Iron Ore.................................................................... 1,756,445 1.4
Telecommunications................................................................ 29,651,228 23.4
------------ ----
$123,197,761 97.2%
------------ ----
------------ ----
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks..................................................................... $ 83,061,571 65.5%
Preferred Stocks.................................................................. 40,136,190 31.7
------------ ----
$123,197,761 97.2%
------------ ----
------------ ----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 2000 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost $95,410,432)........................................ $123,197,761
Cash.......................................................................................... 2,196,951
Receivable for:
Investments sold.......................................................................... 999,631
Dividends................................................................................. 863,888
Shares of beneficial interest sold........................................................ 19,245
Interest.................................................................................. 15,666
Prepaid expenses and other assets............................................................. 55,739
------------
TOTAL ASSETS............................................................................. 127,348,881
------------
LIABILITIES:
Payable for:
Shares of beneficial interest repurchased................................................. 166,580
Investment advisory fee................................................................... 142,546
Plan of distribution fee.................................................................. 106,889
Accrued expenses and other payables........................................................... 122,176
------------
TOTAL LIABILITIES........................................................................ 538,191
------------
NET ASSETS............................................................................... $126,810,690
============
COMPOSITION OF NET ASSETS:
Paid-in-capital............................................................................... $191,468,045
Net unrealized appreciation................................................................... 27,780,924
Accumulated net investment loss............................................................... (504,837)
Accumulated net realized loss................................................................. (91,933,442)
------------
NET ASSETS............................................................................... $126,810,690
============
CLASS A SHARES:
Net Assets.................................................................................... $1,038,741
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 86,706
NET ASSET VALUE PER SHARE................................................................
$11.98
============
MAXIMUM OFFERING PRICE PER SHARE,
(NET ASSET VALUE PLUS 5.54% OF NET ASSET VALUE)........................................
$12.64
============
CLASS B SHARES:
Net Assets.................................................................................... $117,233,504
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 10,035,505
NET ASSET VALUE PER SHARE................................................................
$11.68
============
CLASS C SHARES:
Net Assets.................................................................................... $1,081,675
Shares Outstanding (unlimited authorized, $.01 par value)..................................... 92,430
NET ASSET VALUE PER SHARE................................................................
$11.70
============
CLASS D SHARES:
Net Assets.................................................................................... $7,456,770
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 619,444
NET ASSET VALUE PER SHARE................................................................ $12.04
============
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JULY 31, 2000 (UNAUDITED)
<TABLE>
<S> <C>
NET INVESTMENT LOSS:
INCOME
Dividends (net of $148,148 foreign withholding tax)........................................... $ 1,617,719
Interest...................................................................................... 90,311
------------
TOTAL INCOME............................................................................. 1,708,030
------------
EXPENSES
Investment management fee..................................................................... 853,742
Plan of distribution fee (Class A shares)..................................................... 1,303
Plan of distribution fee (Class B shares)..................................................... 655,734
Plan of distribution fee (Class C shares)..................................................... 5,246
Transfer agent fees and expenses.............................................................. 181,739
Shareholder reports and notices............................................................... 66,798
Custodian fees................................................................................ 41,222
Professional fees............................................................................. 36,027
Foreign exchange provisional tax.............................................................. 30,409
Registration fees............................................................................. 27,047
Trustees' fees and expenses................................................................... 6,781
Other......................................................................................... 3,088
------------
TOTAL EXPENSES........................................................................... 1,909,136
------------
NET INVESTMENT LOSS...................................................................... (201,106)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain/loss on:
Investments............................................................................... 9,414,641
Foreign exchange transactions............................................................. (25,537)
------------
NET GAIN................................................................................. 9,389,104
------------
Net change in unrealized appreciation/ depreciation on:
Investments............................................................................... (13,061,914)
Translation of forward foreign currency contracts, other assets and liabilities
denominated in foreign currencies....................................................... (12,101)
------------
NET DEPRECIATION......................................................................... (13,074,015)
------------
NET LOSS................................................................................. (3,684,911)
------------
NET DECREASE.................................................................................. $ (3,886,017)
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
JULY 31, 2000 JANUARY 31, 2000
-------------------------------------------------------------------------------------------------------------
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss......................................................... $ (201,106) $ (789,755)
Net realized gain........................................................... 9,389,104 10,213,576
Net change in unrealized appreciation/depreciation.......................... (13,074,015) 51,729,529
------------ ------------
NET INCREASE (DECREASE)................................................ (3,886,017) 61,153,350
------------ ------------
Net decrease from transactions in shares of beneficial interest............. (8,116,565) (28,450,098)
------------ ------------
NET INCREASE (DECREASE)................................................ (12,002,582) 32,703,252
NET ASSETS:
Beginning of period......................................................... 138,813,272 106,110,020
------------ ------------
END OF PERIOD
(INCLUDING NET INVESTMENT LOSSES OF $504,837 AND $303,731,
RESPECTIVELY)........................................................... $126,810,690 $138,813,272
============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JULY 31, 2000 (UNAUDITED)
1. ORGANIZATION AND ACCOUNTING POLICIES
Morgan Stanley Dean Witter 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
converted to a multiple class share structure.
The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase and some
Class A shares, and most Class B shares and Class C shares are subject to a
contingent deferred sales charge imposed on shares redeemed within one year, six
years and one year, respectively. Class D shares are not subject to a sales
charge. Additionally, Class A shares, Class B shares and Class C shares incur
distribution expenses.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ from
those estimates.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) an equity portfolio security listed or traded
on the New York or American Stock Exchange, NASDAQ, or other exchange is valued
at its latest sale price, prior to the time when assets are valued; if there
were no sales that day, the security is valued at the latest bid price (in cases
where 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); (2) all other portfolio securities for which over-the-counter
market quotations are readily available are valued at the latest available bid
price; (3) when market quotations are not readily available, including
circumstances under which it is determined by Morgan Stanley Dean Witter
Advisors Inc. (the "Investment Manager") 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 comparable in coupon, rating and
13
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JULY 31, 2000 (UNAUDITED) CONTINUED
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.
14
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JULY 31, 2000 (UNAUDITED) 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 an Investment Management Agreement, the Fund pays the Investment
Manager a management fee, accrued daily and payable monthly, by applying the
following annual rates to the net assets of the Fund determined 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 a Sub-Advisory Agreement 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 supervision of the Investment Manager. As compensation for its
services provided pursuant to the Sub-Advisory Agreement, the Investment Manager
pays the Sub-Advisor compensation equal to 40% of its monthly compensation.
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by 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
15
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JULY 31, 2000 (UNAUDITED) 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 B shares, provided that the Plan continues in effect, any
cumulative expenses incurred by the Distributor but not yet recovered may be
recovered through the payment of future distribution fees from the Fund pursuant
to the Plan and contingent deferred sales charges paid by investors upon
redemption of Class B shares. Although there is no legal obligation for the Fund
to pay expenses incurred in excess of payments made to the Distributor under the
Plan and the proceeds of contingent deferred sales charges paid by investors
upon redemption of shares, if for any reason the Plan is terminated, the
Trustees will consider at that time the manner in which to treat such expenses.
The Distributor has advised the Fund that such excess amounts totaled
$20,555,920 at July 31, 2000.
In the case of Class A shares and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 1.0% of the average daily
net assets of Class A or Class C, respectively, will not be reimbursed by the
Fund through payments in any subsequent year, except that expenses representing
a gross sales credit to Morgan Stanley Dean Witter Financial Advisors or other
selected broker-dealer representatives may be reimbursed in the subsequent
calendar year. For the six months ended July 31, 2000, the distribution fee was
accrued for Class A shares and Class C shares at the annual rate of 0.25% and
1.0%, respectively.
The Distributor has informed the Fund that for the six months ended July 31,
2000, it received contingent deferred sales charges from certain redemptions of
the Fund's Class B shares and Class C shares of $89,514 and $604, respectively
and received $2,423 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.
16
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JULY 31, 2000 (UNAUDITED) CONTINUED
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the six months ended July 31, 2000 aggregated
$40,868,382 and $48,120,873, respectively.
For the six months ended July 31, 2000, the Fund incurred brokerage commissions
of $9,220 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 July 31, 2000, the Fund had
transfer agent fees and expenses payable of approximately $19,900.
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
JULY 31, 2000 JANUARY 31, 2000
------------------------- -------------------------
(UNAUDITED)
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Sold.................................................... 200,173 $ 2,474,624 903,814 $ 9,285,862
Redeemed................................................ (174,711) (2,121,109) (850,499) (8,815,570)
---------- ------------ ---------- ------------
Net increase - Class A.................................. 25,462 353,515 53,315 470,292
---------- ------------ ---------- ------------
CLASS B SHARES
Sold.................................................... 1,118,436 14,839,773 1,854,204 19,260,542
Redeemed................................................ (2,479,716) (31,143,196) (5,056,135) (48,993,518)
---------- ------------ ---------- ------------
Net decrease - Class B.................................. (1,361,280) (16,303,423) (3,201,931) (29,732,976)
---------- ------------ ---------- ------------
CLASS C SHARES
Sold.................................................... 46,774 621,006 59,774 653,992
Redeemed................................................ (18,901) (237,037) (46,151) (464,154)
---------- ------------ ---------- ------------
Net increase - Class C.................................. 27,873 383,969 13,623 189,838
---------- ------------ ---------- ------------
CLASS D SHARES
Sold.................................................... 790,724 10,017,025 119,896 1,532,077
Redeemed................................................ (219,078) (2,567,651) (72,756) (909,329)
---------- ------------ ---------- ------------
Net increase - Class D.................................. 571,646 7,449,374 47,140 622,748
---------- ------------ ---------- ------------
Net decrease in Fund.................................... (736,299) $ (8,116,565) (3,087,853) $(28,450,098)
========== ============ ========== ============
</TABLE>
17
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
NOTES TO FINANCIAL STATEMENTS JULY 31, 2000 (UNAUDITED) CONTINUED
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 primarily
attributable to capital loss deferrals on wash sales, income from the
mark-to-market of passive foreign investment companies and post-October losses.
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 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 July 31, 2000, there were no outstanding forward contracts.
At July 31, 2000, the Fund's cash balance consisted principally of interest
bearing deposits with Chase Manhattan Bank N.A., the Fund's custodian.
At July 31, 2000, investment in securities of issuers in Brazil and Mexico
represented 40.3% and 43.5% 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.
18
<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 SIX FOR THE YEAR FOR THE YEAR JULY 28, 1997*
MONTHS ENDED ENDED ENDED THROUGH
JULY 31, 2000 JANUARY 31, 2000 JANUARY 31, 1999 JANUARY 31, 1998
---------------------------------------------------------------
(UNAUDITED)
<S> <C> <C> <C> <C>
CLASS A SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period............ $12.26 $ 7.33 $12.14 $15.22
------ ------ ------ ------
Income (loss) from investment operations:
Net investment income (loss)................. 0.03 (0.01) 0.15 (0.07)
Net realized and unrealized gain (loss)...... (0.31) 4.94 (4.96) (3.01)
------ ------ ------ ------
Total income (loss) from investment
operations..................................... (0.28) 4.93 (4.81) (3.08)
------ ------ ------ ------
Net asset value, end of period.................. $11.98 $12.26 $ 7.33 $12.14
====== ====== ====== ======
TOTAL RETURN +.................................. (1.96)%(1) 66.71% (39.62)% (20.24)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses........................................ 2.07 %(2)(3) 2.28%(3) 2.21 %(3) 2.15 %(2)
Net investment income (loss).................... 0.42 %(2)(3) 0.16%(3) 1.26 %(3) (1.04)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands......... $1,039 $751 $58 $110
Portfolio turnover rate......................... 31 %(1) 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
19
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR ENDED JANUARY 31,
MONTHS ENDED ----------------------------------------------------------
JULY 31, 2000++ 2000++ 1999++ 1998*++ 1997 1996
----------------------------------------------------------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of period....... $ 11.99 $ 7.24 $ 12.09 $ 11.47 $ 9.48 $ 9.35
--------- -------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income (loss)............ (0.02) (0.06) 0.05 (0.09) (0.04) (0.06)
Net realized and unrealized gain
(loss).................................. (0.29) 4.81 (4.90) 0.71 2.03 0.19
--------- -------- -------- -------- -------- --------
Total income (loss) from investment
operations................................ (0.31) 4.75 (4.85) 0.62 1.99 0.13
--------- -------- -------- -------- -------- --------
Net asset value, end of period............. $ 11.68 $ 11.99 $ 7.24 $ 12.09 $ 11.47 $ 9.48
========= ======== ======== ======== ======== ========
TOTAL RETURN +............................. (2.34)%(1) 65.19 % (40.12)% 5.41 % 20.99 % 1.39 %
RATIOS TO AVERAGE NET ASSETS:
Expenses................................... 2.82 %(2)(3) 3.06 %(3) 2.98 %(3) 2.81 % 2.78 % 2.98 %
Net investment income (loss)............... (0.33)%(2)(3) (0.62)%(3) 0.49 %(3) (0.64)% (0.29)% (0.61)%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands.... $ 117,234 $136,699 $105,678 $272,710 $270,843 $261,066
Portfolio turnover rate.................... 31 %(1) 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) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX FOR THE YEAR FOR THE YEAR JULY 28, 1997*
MONTHS ENDED ENDED ENDED THROUGH
JULY 31, 2000 JANUARY 31, 2000 JANUARY 31, 1999 JANUARY 31, 1998
------------------------------------------------------------------
(UNAUDITED)
<S> <C> <C> <C> <C>
CLASS C SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period.............. $12.02 $ 7.24 $12.10 $15.22
------ ------ ------ ------
Income (loss) from investment operations:
Net investment income (loss)................... (0.02) (0.06) 0.06 (0.12)
Net realized and unrealized gain (loss)........ (0.30) 4.84 (4.92) (3.00)
------ ------ ------ ------
Total income (loss) from investment operations.... (0.32) 4.78 (4.86) (3.12)
------ ------ ------ ------
Net asset value, end of period.................... $11.70 $12.02 $ 7.24 $12.10
====== ====== ====== ======
TOTAL RETURN+..................................... (2.34)%(1) 65.47 % (40.17)% (20.50)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.......................................... 2.82 %(2)(3) 2.95 %(3) 2.98 %(3) 2.91 %(2)
Net investment income (loss)...................... (0.33)%(2)(3) (0.51)%(3) 0.49 %(3) (1.76)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands........... $1,082 $776 $369 $792
Portfolio turnover rate........................... 31 %(1) 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
21
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
FINANCIAL HIGHLIGHTS, CONTINUED
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX FOR THE YEAR FOR THE YEAR JULY 28, 1997*
MONTHS ENDED ENDED ENDED THROUGH
JULY 31, 2000 JANUARY 31, 2000 JANUARY 31, 1999 JANUARY 31, 1998
-----------------------------------------------------------------------
(UNAUDITED)
<S> <C> <C> <C> <C>
CLASS D SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period................... $12.30 $ 7.35 $12.16 $15.22
------ ------ ------ ------
Income (loss) from investment operations:
Net investment income (loss)........................ 0.04 (0.02) 0.16 (0.04)
Net realized and unrealized gain (loss)............. (0.30) 4.97 (4.97) (3.02)
------ ------ ------ ------
Total income (loss) from investment operations......... (0.26) 4.95 (4.81) (3.06)
------ ------ ------ ------
Net asset value, end of period......................... $12.04 $12.30 $ 7.35 $12.16
====== ====== ====== ======
TOTAL RETURN+.......................................... (1.79)%(1) 66.80% (39.56)% (20.11)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses............................................... 1.82 %(2)(3) 2.06%(3) 1.98 %(3) 1.86 %(2)
Net investment income (loss)........................... 0.67 %(2)(3) 0.38%(3) 1.49 %(3) (0.52)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands................ $7,457 $588 $5 $8
Portfolio turnover rate................................ 31 %(1) 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
22
<PAGE>
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
CHANGE IN INDEPENDENT ACCOUNTANTS
On July 1, 2000, PricewaterhouseCoopers LLP resigned as independent accountants
of the Fund.
The reports of PricewaterhouseCoopers LLP on the financial statements of the
Fund for the past two fiscal years contained no adverse opinion or disclaimer of
opinion and were not qualified or modified as to uncertainty, audit scope or
accounting principle.
In connection with its audit for the two most recent fiscal years and through
July 1, 2000, there have been no disagreements with Pricewaterhouse Coopers LLP
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements if not resolved
to the satisfaction of PricewaterhouseCoopers LLP would have caused them to make
reference thereto in their report on the financial statements for such years.
The Fund, with the approval of its Board of Trustees and its Audit Committee,
engaged Deloitte & Touche LLP as its new independent accountants as of July 1,
2000.
23
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TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
Wayne E. Hedien
James F. Higgins
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
Deloitte & Touche LLP
Two World Financial Center
New York, New York 10281
INVESTMENT MANAGER
Morgan Stanley Dean Witter Advisors Inc.
Two World Financial Center
New York, New York 10048
SUB-ADVISOR
TCW Investment Management Company
865 South Figueroa Street, Suite 1800
Los Angeles, California 90017
The financial statements included herein have been taken from the records of
the fund without examination by the independent accountants and accordingly
they do not express an opinion thereon.
The 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 Distributors Inc., member NASD.
MORGAN STANLEY DEAN WITTER LATIN AMERICAN GROWTH FUND
[GRAPHICAL REPRESENTATION]
SEMIANNUAL REPORT
JULY 31, 2000
