DEAN WITTER HEALTH SCIENCES TRUST, 497, 1994-10-05

DEAN WITTER HEALTH SCIENCES TRUST
497, 1994-10-05

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DEAN WITTER Filed Pursuant to Rule 497C
HEALTH SCIENCES TRUST Registration No. 33-48189

PROSPECTUS-SEPTEMBER 28, 1994
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DEAN WITTER HEALTH SCIENCES TRUST (THE "FUND") IS AN OPEN-END NON-DIVERSIFIED
MANAGEMENT INVESTMENT COMPANY WHOSE INVESTMENT OBJECTIVE IS CAPITAL
APPRECIATION. THE FUND SEEKS TO ACHIEVE ITS OBJECTIVE BY INVESTING IN
SECURITIES OF COMPANIES IN THE HEALTH SCIENCES INDUSTRY THROUGHOUT THE WORLD.
(SEE "INVESTMENT OBJECTIVE AND POLICIES.")

Shares of the Fund are continuously offered at net asset value. However,
redemptions and/or repurchases are subject in most cases to a contingent
deferred sales charge, scaled down from 5% to 1% of the amount redeemed, if
made within six years of purchase, which charge will be paid to the Fund's
Distributor, Dean Witter Distributors Inc. See "Redemptions and
Repurchases--Contingent Deferred Sales Charge." In addition, the Fund pays
the Distributor a distribution fee pursuant to a Plan of Distribution at the
annual rate of 1% of the lesser of the (i) average daily aggregate net sales
or (ii) average daily net assets of the Fund. See "Purchase of Fund
Shares--Plan of Distribution."

This Prospectus sets forth concisely the information you should know before
investing in the Fund. It should be read and retained for future reference.
Additional information about the Fund is contained in the Statement of
Additional Information, dated September 28, 1994, which has been filed with
the Securities and Exchange Commission, and which is available at no charge
upon request of the Fund at the address or telephone number listed below. The
Statement of Additional Information is incorporated herein by reference.

TABLE OF CONTENTS

Prospectus Summary .................................................... 2

Summary of Fund Expenses .............................................. 3

Financial Highlights .................................................. 4

The Fund and its Management ........................................... 5

Investment Objective and Policies ..................................... 5

Risk Considerations ................................................... 9

Investment Restrictions ............................................... 11

Purchase of Fund Shares ............................................... 12

Shareholder Services .................................................. 13

Redemptions and Repurchases ........................................... 16

Dividends, Distributions and Taxes .................................... 17

Performance Information ............................................... 18

Additional Information ................................................ 19

SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND THE SHARES ARE
NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY.

DEAN WITTER
HEALTH SCIENCES TRUST
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(212) 392-2550 OR (800) 526-3143

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

Dean Witter Distributors Inc., Distributor

<PAGE>

PROSPECTUS SUMMARY
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The Fund
The Fund is organized as a Massachusetts business trust, and is an open-end
non-diversified management investment company which invests in securities of
companies in the health sciences industry throughout the world.
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Shares Offered
At net asset value next determined following receipt of an order (see page
12). Shares redeemed within six years of purchase are subject to a contingent
deferred sales charge under most circumstances (see page 16).
- -----------------------------------------------------------------------------

Minimum
Purchase
Minimum initial investment, $1,000; minimum subsequent investment, $100 (see
page 12).

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Investment
Objective
The investment objective of the Fund is capital appreciation.
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Investment
Policies
The Fund will seek to achieve its investment objective by investing at least
65% of its total assets in the equity securities of health science companies
throughout the world. The Fund's portfolio will primarily consist of common
stocks, preferred stocks, convertible preferred stocks, securities
convertible into common stocks and warrants. The Fund may also invest in
investment grade debt securities when the Investment Manager believes that
such securities present a favorable opportunity for capital appreciation and
in various other financial instruments, such as options, futures and options
on futures, to hedge against adverse price movements in the securities held
in its portfolio, as well as in the securities it might wish to purchase, and
the currencies in which they are denominated (see pages 5-11).
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Investment
Manager
Dean Witter InterCapital Inc. ("InterCapital"), the Investment Manager of the
Fund, and its wholly-owned subsidiary, Dean Witter Services Company Inc.,
serve in various investment management, advisory, management and
administrative capacities to eighty-eight investment companies and other
portfolios with assets of approximately $71.3 billion at August 31, 1994
(see page 5).

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Management
Fee
The Investment Manager receives a monthly fee at the annual rate of 1.0% of
daily net assets (see page 5).
- -----------------------------------------------------------------------------

<PAGE>

Dividends and
Capital Gains
Distributions
Dividends from net investment income and distributions from net capital gains
are paid at least once a year. Long-term capital gains may be retained for
reinvestment by the Fund. Dividends and capital gains distributions are
automatically invested in additional shares at net asset value unless the
shareholder elects to receive cash (see page 17).
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Distributor and
Distribution
Fee
For its services as Distributor, which include payment of sales commissions
to account executives and various other promotional and sales related
expenses, Dean Witter Distributors Inc. (the "Distributor") receives from the
Fund a distribution fee accrued daily and payable monthly at the rate of 1.0%
per annum of the lesser of (i) the Fund's average daily aggregate net sales
or (ii) the Fund's average daily net assets. This fee compensates the
Distributor for the services provided in distributing shares of the Fund and
for sales related expenses (see page 12). The Distributor also receives the
proceeds of any contingent deferred sales charges (see page 16).
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Redemption--
Contingent
Deferred
Sales Charge
At net asset value; redeemable involuntarily if total value of the account is
less than $100. Although no commission or sales load is imposed upon the
purchase of shares, a contingent deferred sales charge (scaled down from 5.0%
to 1.0%) is imposed on any redemption of shares if after such redemption the
aggregate current value of an account with the Fund falls below the aggregate
amount of the investor's purchase payments made during the six years
preceding the redemption. However, there is no charge imposed on redemption
of shares purchased through reinvestment of dividends or distributions (see
page 16).
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Risks
The value of the Fund's portfolio securities, and therefore the net asset
value of the Fund's shares, will fluctuate with changes in the market value
of its portfolio securities. Unlike more widely diversified mutual funds, the
Fund is subject to industry risk, i.e., the possibility that a particular
group of related stocks will decline in price. In addition, the health
sciences industry generally is subject to substantial government regulation;
accordingly, changes in government policies or regulation could have a
material effect on the demand for products and services offered by health
science companies and, therefore, could affect the performance of the Fund.
It should be recognized that the foreign securities and markets in which the
Fund invests pose different and greater risks than those customarily
associated with domestic securities and their markets. Furthermore, investors
should consider other risks associated with a portfolio which contains
international securities, including fluctuations in foreign currency exchange
rates (i.e., if a substantial portion of the Fund's assets are denominated in
foreign currencies which decrease in value with respect to the U.S. dollar,
the value of the investor's shares and the distributions made on those shares
will, likewise, decrease in value), foreign securities exchange controls and
foreign tax rates, as well as investments in forward currency contracts,
options and futures contracts (see pages 9-11).

The above is qualified in its entirety by the detailed information appearing
elsewhere in this Prospectus and in the Statement of Additional Information.

<PAGE>

SUMMARY OF FUND EXPENSES
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The following table illustrates all expenses and fees that a shareholder
of the Fund will incur. The expenses and fees set forth in the table are for
the fiscal year ending July 31, 1994.

<TABLE>
<CAPTION>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES ..............................................................
Maximum Sales Charge Imposed on Purchases ..................................................... None
Maximum Sales Charge Imposed on Reinvested Dividends .......................................... None
Deferred Sales Charge (as a percentage of the lesser of original purchase price or redemption
proceeds) .................................................................................... 5.0%
A contingent deferred sales charge is imposed at the following declining rates:

</TABLE>

<TABLE>
<CAPTION>
Year Since Purchase Payment
Made Percentage
- ------------------------------ --------------
<S> <C>
First ..................... 5.0%
Second .................... 4.0%
Third ..................... 3.0%
Fourth .................... 2.0%
Fifth ..................... 2.0%
Sixth ..................... 1.0%
Seventh and thereafter ... None

Redemption Fees ................None
Exchange Fee .................. None

<CAPTION>
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
<S> <C>
Management Fees .............................. 1.00%
12b-1 Fees* .................................. 1.00%

Other Expenses ............................... 0.30%
Total Fund Operating Expenses ................ 2.30%

</TABLE>
- ----------
* A portion of the 12b-1 fee equal to 0.25% of the Fund's average daily
net assets is characterized as a service fee within the meaning of the
National Association of Securities Dealers, Inc. ("NASD") guidelines.

<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------- -------- --------- --------- ----------
<S> <C> <C> <C> <C>

You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period: ......... $73 $102 $143 $264
You would pay the following expenses on the same investment assuming no
redemption: $23 $ 72 $123 $264
</TABLE>

THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR PERFORMANCE. ACTUAL EXPENSES OF THE FUND MAY BE GREATER OR
LESS THAN THOSE SHOWN.

The purpose of this table is to assist the investor in understanding the
various costs and expenses that an investor in the Fund will bear directly or
indirectly. For a more complete description of these costs and expenses, see
"The Fund and its Management," "Plan of Distribution" and "Repurchases and
Redemptions."

Long-term shareholders of the Fund may pay more in sales charges and
distribution fees than the economic equivalent of the maximum front-end sales
charges permitted by the NASD.

<PAGE>

FINANCIAL HIGHLIGHTS
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The following ratios and per share data for a share of beneficial interest
outstanding throughout each period have been audited by Price Waterhouse LLP,
independent accountants. The financial highlights should be read in
conjunction with the financial statements and notes thereto and the
unqualified report of independent accountants which are contained in the
Statement of Additional Information. Further information about the
performance of the Fund is contained in the Fund's Annual Report to
Shareholders, which may be obtained without charge upon request to the Fund.

<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR OCTOBER 30, 1992*
ENDED JULY 31, THROUGH JULY 31,
1994 1993
--------------- -----------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE: ...................
Net asset value, beginning of period ................. $ 9.22 $10.00
------------- --------
Net investment loss .................................. (0.22) (0.08)
Net realized and unrealized gain (loss) on
investments ......................................... 0.32 (0.70)
------------ ---------
Total from investment operations .................... 0.10 (0.78)
------------ ----------
Net asset value, end of period ....................... $ 9.32 $ 9.22
============= ==========
TOTAL INVESTMENT RETURN+ ............................. 1.08% (7.80)%(1)
RATIOS/SUPPLEMENTAL DATA: Net assets, end of period
(in thousands)........................................ $228,573 $231,646
Ratio of expenses to average net assets .............. 2.30% 2.38% (2)
Ratio of net investment loss to average net assets .. (2.06)% (1.38)%(2)
Portfolio turnover rate .............................. 106 % 55 %
<FN>
- ----------
* Commencement of Operations.
+ Does not reflect the deduction of sales load.
(1) Not annualized.
(2) Annualized.
</TABLE>

See Notes to Financial Statements

<PAGE>

THE FUND AND ITS MANAGEMENT
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Dean Witter Health Sciences Trust (the "Fund") is an open-end,
non-diversified management investment company. The Fund is a trust of the
type commonly known as a "Massachusetts business trust" and was organized
under the laws of The Commonwealth of Massachusetts on May 26, 1992.

Dean Witter InterCapital Inc. ("InterCapital" or the "Investment
Manager"), whose address is Two World Trade Center, New York, New York 10048,
is the Fund's Investment Manager. The Investment Manager, which was
incorporated in July, 1992, is a wholly-owned subsidiary of Dean Witter,
Discover & Co. ("DWDC"), a balanced financial services organization providing
a broad range of nationally marketed credit and investment products.

InterCapital and its wholly-owned subsidiary, Dean Witter Services Company
Inc., serve in various investment management, advisory, management and
administrative capacities to eighty-eight investment companies (the "Dean
Witter Funds"), thirty of which are listed on the New York Stock Exchange,
with combined assets of approximately $69.3 billion at August 31, 1994. The
Investment Manager also manages portfolios of pension plans, other
institutions and individuals which aggregated approximately $2 billion at
such date.

The Fund has retained the Investment Manager, pursuant to an Investment
Management Agreement, to provide administrative services, manage its business
affairs and manage the investment of the Fund's assets, including the placing
of orders for the purchase and sale of portfolio securities. The Fund's Board
of Trustees reviews the various services provided by the Investment Manager
to ensure that the Fund's general investment policies and programs are being
properly carried out and that administrative services are being provided to
the Fund in a satisfactory manner.

As full compensation for the services and facilities furnished to the Fund
and for expenses of the Fund assumed by the Investment Manager, the Fund pays
the Investment Manager monthly compensation calculated daily by applying the
annual rate of 1.0% to the Fund's net assets determined as of the close of
each business day. For the fiscal year ended July 31, 1994, the Fund accrued
total compensation to the Investment Manager amounting to 1.0% of the Fund's
average daily net assets and the Fund's total expenses amounted to 2.30% of
the Fund's average daily net assets.

INVESTMENT OBJECTIVE AND POLICIES
- -----------------------------------------------------------------------------

The investment objective of the Fund is capital appreciation. The
investment objective of the Fund is a fundamental policy and may not be
changed without the approval of the holders of a majority of the Fund's
shares. There is no assurance that the Fund's investment objective will be
achieved.

The Fund will seek to achieve its investment objective by investing at
least 65% of its total assets in the equity securities of health science
companies throughout the world. A health science company is defined as a
company which is principally engaged in the health sciences industry. A
company is deemed to be "principally engaged" if it has at least 50% of its
earnings or revenues derived from health sciences activities, as defined
below, or at least 50% of its assets is devoted to such activities, based
upon the financial statements of the company's most recently reported fiscal
year.

In addition, the Investment Manager may invest in companies other than
health science companies if it considers that such companies have potential
for capital appreciation primarily as a result of particular products,
technology, patents or other market advantages in the health sciences
industry. The Fund does not anticipate that companies not principally engaged
in the health sciences industry will represent more than 20% of the Fund's
investments.

Health sciences activities are defined as activities which consist of the
research, development, production or distribution of products and services by
health science companies which include, but are not limited to, companies
such as: pharmaceutical companies; companies involved in the ownership and/or
operation or delivery of health care services such as hospitals, clinical
test laboratories, convalescent and mental health care facilities,
rehabilitation centers, and

<PAGE>

products and services for home care; companies involved in biotechnology,
medical diagnostics, and biochemical, and nuclear research and development;
and companies that produce and manufacture medical, dental and optical
supplies and equipment.

The Fund's portfolio will primarily consist of common stocks. The Fund may
also invest up to 35% of its total assets in preferred stock and in
investment grade domestic and foreign debt securities of any type of issuer
(such as foreign and domestic corporations and foreign and domestic
governments and their political subdivisions), including bonds, notes,
debentures and debt securities convertible into equity if the Investment
Manager believes that such securities present a favorable opportunity for
capital appreciation. The term investment grade consists of debt instruments
rated Baa or higher by Moody's Investors Service, Inc. ("Moody's") or BBB or
higher by Standard & Poor's Corporation ("S&P") or, if not rated, determined
to be of comparable quality by the Investment Manager. Investments in
securities rated either Baa by Moody's or BBB by S&P may have speculative
characteristics and, therefore, changes in economic conditions or other
circumstances are more likely to weaken their capacity to make principal and
interest payments than would be the case with investments in securities with
higher credit ratings. If a debt instrument held by the Fund is rated BBB or
Baa and is subsequently downgraded by a rating agency, the Fund will retain
such security in its portfolio until the Investment Manager determines that
it is practicable to sell the security without undue market or tax
consequences to the Fund. In the event that such downgraded securities
constitute 5% or more of the Fund's total assets, the Investment Manager will
sell immediately sufficient securities to reduce the total to below 5%. The
Fund may invest in various other financial instruments such as warrants and
forward foreign currency exchange contracts, futures and options, including
stock index futures contracts and related options in an attempt to hedge its
portfolio (see below).

While the Fund expects that, from time to time, a significant portion of
its investments will be in securities of U.S. companies, the Fund's
Investment Manager believes that a portfolio comprised only of U.S.
securities does not provide the greatest potential for capital appreciation
from an investment in the health sciences industry. It believes that a
worldwide focus is necessary if the Fund is to take advantage of the
increasing opportunities presented by health science companies headquartered
throughout the world. The Fund may invest substantially in securities
denominated in one or more currencies. The Investment Manager believes that
by investing worldwide, the Fund can better position itself to take advantage
of available health sciences investment opportunities (see "Special Risk
Considerations").

The Fund may also invest in securities of foreign issuers in the form of
American Depository Receipts (ADRs), European Depository Receipts (EDRs) or
other similar securities convertible into securities of foreign issuers.
These securities may not necessarily be denominated in the same currency as
the securities into which they may be converted. ADRs are receipts typically
issued by a United States bank or trust company evidencing ownership of the
underlying securities. EDRs are European receipts evidencing a similar
arrangement. Generally, ADRs, in registered form, are designed for use in the
United States securities markets and EDRs, in bearer form, are designed for
use in European securities markets.

The Fund may invest up to 5% of its total assets in securities that are
subject to restrictions on resale (referred to as private placements or
restricted securities) because they have not been registered under the
Securities Act of 1933, as amended, or which are otherwise not readily
marketable. (Securities eligible for resale pursuant to Rule 144A of the
Securities Act, and determined to be liquid pursuant to the procedures
adopted by the Board of Trustees, are not subject to the foregoing
restriction.) If a restricted security is determined to be "liquid", such
security will not be included within the category "illiquid securities",
which is limited by the Fund's investment policies to 15% of the Fund's net
assets. Generally, OTC options and the assets used as "cover" for written OTC
options are illiquid securities. However, the Fund is permitted to treat the
securities it uses as cover for written OTC options as liquid provided it
follows a procedure whereby it will sell OTC options only to qualified
dealers who agree that the Fund may repurchase such options at a maximum
price to be calculated pursuant to a predetermined formula set forth in the
option agreement. See "Investment Practices and Policies" in the Statement of
Additional Information.

There may be periods during which market conditions warrant reduction of
some or all of the Fund's securities holdings. During such periods, the Fund
may adopt a temporary "defensive" posture in which greater than 35% of its
total assets are invested

<PAGE>

in cash (U.S. dollars, foreign currencies or multinational currency units)
and/or invest any portion of its assets in high quality debt securities or
money market instruments of U.S. or foreign issuers. Under such
circumstances, the money market instruments in which the Fund may invest are
securities issued or guaranteed by U.S. or foreign governments; American bank
obligations; Eurodollar certificates of deposit; obligations of American
savings institutions; fully insured certificates of deposit; and commercial
paper of American issuers rated within the two highest grades by Moody's or
S&P or, if not rated, are issued by a company having an outstanding debt
issue rated at least AA by S&P or Aa by Moody's.

The Fund is classified as a non-diversified investment company under the
Investment Company Act of 1940, as amended (the "Act"), and as such is not
limited by the Act in the proportion of its assets that it may invest in the
obligations of a single issuer. However, the Fund intends to conduct its
operations so as to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code. See "Dividends, Distributions and
Taxes." In order to qualify, among other requirements, the Fund will limit
its investments so that at the close of each quarter of the taxable year, (i)
not more than 25% of the market value of the Fund's total assets will be
invested in the securities of a single issuer, and (ii) with respect to 50%
of the market value of its total assets, not more than 5% will be invested in
the securities of a single issuer and the Fund will not own more than 10% of
the outstanding voting securities of a single issuer. To the extent that a
relatively high percentage of the Fund's assets may be invested in the
securities of a limited number of issuers, the Fund's portfolio securities
may be more susceptible to any single economic, political or regulatory
occurrence than the portfolio securities of a diversified investment company.
The limitations described in this paragraph are not fundamental policies and
may be revised to the extent applicable Federal income tax requirements are
revised.

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS

A forward foreign currency exchange contract ("forward contract") involves an
obligation to purchase or sell a currency at a future date, which may be any
fixed number of days from the date of the contract agreed upon by the
parties, at a price set at the time of the contract. The Fund may enter into
forward contracts as a hedge against fluctuations in future foreign exchange
rates.

The Fund will enter into forward contracts under various circumstances.
When the Fund enters into a contract for the purchase or sale of a security
denominated in a foreign currency, it may, for example, desire to "lock in"
the price of the security in U.S. dollars or some other foreign currency
which the Fund is temporarily holding in its portfolio. At other times, when,
for example, it is believed that the currency of a particular foreign country
may suffer a substantial decline against the U.S. dollar or some other
foreign currency, the Fund may enter into a forward contract to sell, for a
fixed amount of dollars or other currency, the amount of foreign currency
approximating the value of some or all of the Fund's portfolio securities (or
securities which the Fund has purchased for its portfolio) denominated in
such foreign currency. Under identical circumstances, the Fund may enter into
a forward contract to sell, for a fixed amount of U.S. dollars or other
currency, an amount of foreign currency other than the currency in which the
securities to be hedged are denominated approximating the value of some or
all of the portfolio securities to be hedged. This method of hedging, called
"cross-hedging," will be selected when it is determined that the foreign
currency in which the portfolio securities are denominated has insufficient
liquidity or is trading at a discount as compared with some other foreign
currency with which it tends to move in tandem.

In addition, when the Fund anticipates purchasing securities at some time
in the future, and wishes to lock in the current exchange rate of the
currency in which those securities are denominated against the U.S. dollar or
some other foreign currency, it may enter into a forward contract to purchase
an amount of currency equal to some or all of the value of the anticipated
purchase, for a fixed amount of U.S. dollars or other currency. Lastly, the
Fund is permitted to enter into forward contracts with respect to currencies
in which certain of its portfolio securities are denominated and on which
options have been written (see "Options and Futures Transactions").

OPTIONS AND FUTURES TRANSACTIONS

Call and put options on U.S. Treasury notes, bonds and bills, on various
foreign currencies and on equity securities are listed on several U.S. and
foreign securities exchanges and are written in over-the-counter transactions
("OTC options"). Listed options are issued or guaranteed by the exchange on

<PAGE>

which they trade or by a clearing corporation such as the Options Clearing
Corporation ("OCC"). Ownership of a listed call option gives the Fund the
right to buy from the OCC (in the U.S.) or other clearing corporation or
exchange, the underlying security or currency covered by the option at the
stated exercise price (the price per unit of the underlying security or
currency) by filing an exercise notice prior to the expiration date of the
option. The writer (seller) of the option would then have the obligation to
sell, to the OCC (in the U.S.) or other clearing corporation or exchange, the
underlying security or currency at that exercise price prior to the
expiration date of the option, regardless of its then current market price.
Ownership of a listed put option would give the Fund the right to sell the
underlying security or currency to the OCC (in the U.S.) or other clearing
corporation or exchange at the stated exercise price. Upon notice of exercise
of the put option, the writer of the option would have the obligation to
purchase the underlying security or currency from the OCC (in the U.S.) or
other clearing corporation or exchange at the exercise price.

FUTURES CONTRACTS. The Fund may purchase and sell futures contracts that are
currently traded, or may in the future be traded, on U.S. and foreign
commodity exchanges on common stocks, such underlying fixed-income securities
as U.S. Treasury bonds, notes, and bills and/or any foreign government
fixed-income security ("interest rate" futures), on various currencies
("currency" futures) and on such indexes of U.S. or foreign equity and
fixed-income securities as may exist or come into being, such as the Standard
& Poor's 500 Index or the Financial Times Equity Index ("index" futures). As
a futures contract purchaser, the Fund incurs an obligation to take delivery
of a specified amount of the obligation underlying the contract at a
specified time in the future for a specified price. As a seller of a futures
contract, the Fund incurs an obligation to deliver the specified amount of
the underlying obligation at a specified time in return for an agreed upon
price.

OPTIONS ON FUTURES CONTRACTS. The Fund may purchase and write call and put
options on futures contracts which are traded on an exchange and enter into
closing transactions with respect to such options to terminate an existing
position.

OTHER INVESTMENT POLICIES

REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements, which
may be viewed as a type of secured lending by the Fund, and which typically
involve the acquisition by the Fund of debt securities, from a selling
financial institution such as a bank, savings and loan association or
broker-dealer. The agreement provides that the Fund will sell back to the
institution, and that the institution will repurchase, the underlying
security at a specified price and at a fixed time in the future, usually not
more than seven days from the date of purchase.

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES AND FORWARD COMMITMENTS. From
time to time, in the ordinary course of business, the Fund may purchase
securities on a when-issued or delayed delivery basis or may purchase or sell
securities on a forward commitment basis. When such transactions are
negotiated, the price is fixed at the time of the commitment, but delivery
and payment can take place a month or more after the date of the commitment.
There is no overall limit on the percentage of the Fund's assets which may be
committed to the purchase of securities on a when-issued, delayed delivery or
forward commitment basis. An increase in the percentage of the Fund's assets
committed to the purchase of securities on a when-issued, delayed delivery or
forward commitment basis may increase the volatility of the Fund's net asset
value.

WHEN, AS AND IF ISSUED SECURITIES. The Fund may purchase securities on a
"when, as and if issued" basis under which the issuance of the security
depends upon the occurrence of a subsequent event, such as approval of a
merger, corporate reorganization, leveraged buyout or debt restructuring. If
the anticipated event does not occur and the securities are not issued, the
Fund will have lost an investment opportunity. There is no overall limit on
the percentage of the Fund's assets which may be committed to the purchase of
securities on a "when, as and if issued" basis. An increase in the percentage
of the Fund's assets committed to the purchase of securities on a "when, as
and if issued" basis may increase the volatility of its net asset value.

LENDING OF PORTFOLIO SECURITIES. Consistent with applicable regulatory
requirements, the Fund may lend its portfolio securities to brokers, dealers
and other financial institutions, provided that such loans are callable at
any time by the Fund (subject to certain notice provisions described in the
Statement of Additional Information), and are at all times secured by cash or
cash equivalents, which are maintained in a segregated account pursuant to
applicable regulations and that are at least equal to the market value,
determined daily, of the loaned securities.

<PAGE>

Except as specifically noted, all investment objectives, policies and
practices discussed above are not fundamental policies of the Fund and, as
such, may be changed without shareholder approval.

PORTFOLIO MANAGEMENT

The Fund's portfolio is actively managed by its Investment Manager with a
view to achieving the Fund's investment objective. In determining which
securities to purchase for the Fund or hold in the Fund's portfolio, the
Investment Manager will rely on information from various sources, including
research, analysis and appraisals of brokers and dealers, the views of
Trustees of the Fund and others regarding economic developments and interest
rate trends, and the Investment Manager's own analysis of factors they deem
relevant. The Fund's portfolio is managed within InterCapital's Small
Capitalization Equity Group, which manages five funds and fund portfolios,
with approximately $2.2 billion in assets as of August 31, 1994. Ronald
Worobel, Senior Vice President of InterCapital and a member of InterCapital's
Small Capitalization Equity Group, has been the primary portfolio manager
since the Fund's inception and has been a portfolio manager at InterCapital
since June, 1992. He was the Managing Director at MacKay Schields Financial
Corp. before coming to InterCapital.

Personnel of the Investment Manager have substantial experience in the use
of the investment techniques described above under the heading "Options and
Futures Transactions," which techniques require skills different from those
needed to select the portfolio securities underlying various options and
futures contracts.

Orders for transactions in portfolio securities and commodities may be
placed for the Fund with a number of brokers and dealers, including Dean Witter
Reynolds Inc. ("DWR"). Pursuant to an order of the Securities and Exchange
Commission, the Fund may effect principal transactions in certain money market
instruments with DWR, a broker-dealer affiliate of InterCapital. In addition,
the Fund may incur brokerage commissions on transactions conducted through DWR.

It is not anticipated that the Fund's portfolio turnover rate will exceed
100% in any one year. Short-term gains and losses taxable at ordinary income
rates may result from such portfolio transactions. See "Dividends,
Distributions and Taxes" for a full discussion of the tax implications of the
Fund's trading policy. A more extensive discussion of the Fund's portfolio
brokerage policies is set forth in the Statement of Additional Information.

The expenses of the Fund relating to its portfolio management are likely
to be greater than those incurred by other investment companies investing
primarily in securities issued by domestic issuers as custodial costs,
brokerage commissions and other transaction charges related to investing on
foreign markets are generally higher than in the United States.

RISK CONSIDERATIONS

The net asset value of the Fund's shares will fluctuate with changes in the
market value of its portfolio securities. Dividends payable by the Fund will
vary in relation to the amount of income earned on portfolio securities.

HEALTH SCIENCES INDUSTRY. Investors should consider that the assets of the
Fund are subject to "industry risk" because investments will be concentrated
in a particular group of related stocks. The concentration of investments in
the health sciences industry may cause the value of the Fund's shares to
fluctuate more widely than those funds investing in a greater variety of
industries. The Investment Manager believes, however, that the Fund's
concentration of investments in the health sciences industry also may provide
it with the potential to achieve greater long-term performance than
investments in a variety of industries. In addition, the health sciences
industry generally is subject to substantial government regulation;
accordingly, changes in government policies or regulation could have a
material effect on the demand for products and services offered by health
science companies, thereby affecting the performance of the Fund. In
addition, the products and services offered by such companies may be subject
to rapid obsolescence caused by technological and scientific advances.

While the Fund's portfolio normally will include securities of established
suppliers of traditional products and services, the Fund may invest in
smaller companies which can benefit from the development of new products and
services. These smaller companies may present greater opportunities for
capital appreciation, but may also involve greater risks, than large,
established issuers. Such smaller companies may have limited product lines,
markets or financial resources, and their securities may trade less
frequently and in more limited volume than the

<PAGE>

securities of larger, more established companies. As a result, the prices of
the securities of such smaller companies may fluctuate to a greater degree
than the prices of the securities of other issuers.

FOREIGN SECURITIES. Investors should carefully consider the risks of the
Fund's investing in securities of foreign issuers and securities denominated
in non-U.S. currencies. Fluctuations in the relative rates of exchange
between the currencies of different nations will affect the value of the
Fund's investments. Changes in foreign currency exchange rates relative to
the U.S. dollar will affect the U.S. dollar value of the Fund's assets
denominated in that currency and may thereby adversely impact upon the Fund's
total return on such assets.

Foreign currency exchange rates are determined by forces of supply and
demand on the foreign exchange markets. These forces are themselves affected
by the international balance of payments and other economic and financial
conditions, government intervention, speculation and other factors. Moreover,
foreign currency exchange rates may be affected by the regulatory control of
the exchanges on which the currencies trade. The foreign currency
transactions of the Fund will be conducted on a spot basis or through forward
contracts or futures contracts (see below). The Fund may incur certain costs
in connection with these currency transactions.

Investments in foreign securities will also occasion risks relating to
political and economic developments abroad, including the possibility of
expropriations or confiscatory taxation, limitations on the use or transfer
of Fund assets and any effects of foreign social, economic or political
instability. Political and economic developments in Europe, especially as
they relate to changes in the structure of the European Economic Community
and the anticipated development of a unified common market, may have profound
effects upon the value of a large segment of the Fund's portfolio. Continued
progress in the evolution of, for example, a united European common market
may be slowed by unanticipated political or social events and may, therefore,
adversely affect the value of certain of the securities held in the Fund's
portfolio. Foreign companies are not subject to the regulatory requirements
of U.S. companies and, are subject to different risks relating to claims and
litigation. Regulation of the health sciences industry in foreign countries
is different from that in the U.S. and there are differences in environmental
and securities regulation. There is less publicly available information about
foreign companies as well. Moreover, foreign companies are not subject to
uniform accounting, auditing and financial reporting standards and
requirements comparable to those applicable to
U.S. companies.

The price changes of securities of foreign issuers may be more volatile
than comparable securities of U.S. issuers. Furthermore, foreign exchanges
and broker-dealers are generally subject to less government and exchange
scrutiny and regulation than their American counterparts. Brokerage
commissions, dealer concessions and other transaction costs may be higher on
foreign markets than in the U.S. In addition, differences in clearance and
settlement procedures on foreign markets may occasion delays in settlements
of Fund trades effected in such markets. Inability to dispose of portfolio
securities due to settlement delays could result in losses to the Fund due to
subsequent declines in value of such securities and the inability of the Fund
to make intended security purchases due to settlement problems could result
in a failure of the Fund to make potentially advantageous investments.

To hedge against adverse price movements in the securities held in its
portfolio and the currencies in which they are denominated (as well as in the
securities it might wish to purchase and their denominated currencies) the
Fund may engage in transactions in forward foreign currency contracts,
options on securities and currencies, and futures contracts and options on
futures contracts on securities, currencies and indexes. The Fund may also
purchase options on securities to facilitate its participation in the
potential appreciation of the value of the underlying securities. A
discussion of these transactions follows and is supplemented by further
disclosure in the Statement of Additional Information.

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. If the currency in which the
Fund's portfolio securities (or anticipated portfolio securities) are
denominated rises in value with respect to the currency which is being
purchased (or sold), then the Fund will have realized fewer gains than had
the Fund not entered into the forward contracts. Moreover, the precise
matching of the forward contract amounts and the value of the securities
involved will not generally be possible, since the future value of such
securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date the forward
contract is entered into and the date it

<PAGE>

matures. The Fund is not required to enter into such transactions with regard
to its foreign currency-denominated securities and will not do so unless
deemed appropriate by the Investment Manager.

OPTIONS AND FUTURES TRANSACTIONS. The Fund may close out its position as
writer of an option, or as a buyer or seller of a futures contract, only if a
liquid secondary market exists for options or futures contracts of that
series. There is no assurance that such a market will exist, particularly in
the case of OTC options, as such options will generally only be closed out by
entering into a closing purchase transaction with the purchasing dealer.

While the futures contracts and options transactions to be engaged in by
the Fund for the purpose of hedging the Fund's portfolio securities are not
speculative in nature, there are risks inherent in the use of such
instruments. One such risk is that the Fund's management could be incorrect
in its expectations as to the direction or extent of various interest rate or
price movements or the time span within which the movements take place. For
example, if the Fund sold futures contracts for the sale of securities in
anticipation of an increase in interest rates, and then interest rates went
down instead, causing bond prices to rise, the Fund would lose money on
the sale.

Another risk which may arise in employing futures contracts to protect
against the price volatility of portfolio securities is that the prices of
securities, currencies and indices subject to futures contracts (and thereby
the futures contract prices) may correlate imperfectly with the behavior of
the U.S. dollar cash prices of the Fund's portfolio securities and their
denominated currencies. Another such risk is that prices of interest rate
futures contracts may not move in tandem with the changes in prevailing
interest rates against which the Fund seeks a hedge. A correlation may also
be distorted by the fact that the futures market is dominated by short-term
traders seeking to profit from the difference between a contract or security
price objective and their cost of borrowed funds. Such distortions are
generally minor and would diminish as the contract approached maturity.

For additional risk disclosure, please refer to the "Investment Objective
and Policies" section of the Prospectus and to the "Investment Practices and
Policies" in the Statement of Additional Information.

INVESTMENT RESTRICTIONS
- -----------------------------------------------------------------------------

The investment restrictions listed below are among the restrictions which
have been adopted by the Fund as fundamental policies. Under the Investment
Company Act of 1940, as amended (the "Act"), a fundamental policy may not be
changed without the vote of a majority of the outstanding voting securities
of the Fund, as defined in the Act. For purposes of the following
limitations: (i) all percentage limitations apply immediately after a
purchase or initial investment, and (ii) any subsequent change in any
applicable percentage resulting from market fluctuations or other changes in
total or net assets does not require elimination of any security from the
portfolio.

The Fund may not:

1. Invest 25% or more of the value of its total assets in securities of
issuers in any one industry, except the Fund will invest at least 25% of the
value of its total assets in the health sciences industry.

2. Invest more than 5% of the value of its total assets in securities of
issuers having a record, together with predecessors, of less than three years
of continuous operation. This restriction shall not apply to any obligation
issued or guaranteed by the United States Government, its agencies or
instrumentalities.

3. Purchase or sell commodities or commodities contracts except that the
Fund may purchase or write interest rate, currency and stock and bond index
futures contracts and related options thereon.

4. Pledge its assets or assign or otherwise encumber them except to
secure permitted borrowings. (For the purpose of this restriction, collateral
arrangements with respect to the writing of options and collateral
arrangements with re-spect to initial or variation margin for futures are not
deemed to be pledges of assets.)

5. Purchase securities on margin (but the Fund may obtain short-term
loans as are necessary for the clearance of transactions). The deposit or
payment by the Fund of initial or variation margin in connection with futures
contracts or related options thereon is not considered the purchase of a
security on margin.

<PAGE>

PURCHASE OF FUND SHARES
- -----------------------------------------------------------------------------

The Fund offers its shares for sale to the public on a continuous basis.
Pursuant to a Distribution Agreement between the Fund and Dean Witter
Distributors Inc. (the "Distributor"), an affiliate of the Investment
Manager, shares of the Fund are distributed by the Distributor and offered by
DWR and other dealers which have entered into Selected Dealers Agreements
with the Distributor ("Selected Broker-Dealers"). The principal executive
office of the Distributor is located at Two World Trade Center, New York, New
York 10048.

The minimum initial purchase is $1,000. Minimum subsequent purchases of
$100 or more may be made by sending a check, payable to Dean Witter Health
Sciences Trust, directly to Dean Witter Trust Company (the "Transfer Agent")
at P.O. Box 1040, Jersey City, N.J. 07303 or by contacting an account
executive of DWR or of another Selected Broker-Dealer. In the case of
investments made pursuant to Systematic Payroll Deduction Plans (including
Individual Retirement Plans), the Fund, in its discretion, may accept
investments without regard to any minimum amounts which would otherwise be
required if the Fund has reason to believe that additional investments will
increase the investment in all accounts under such Plans to at least $1,000.
Certificates for shares purchased will not be issued unless a request is made
by the shareholder in writing to the Transfer Agent. The offering price will
be the net asset value per share next determined following receipt of an
order (see "Determination of Net Asset Value" below).

Shares of the Fund are sold through the Distributor on a normal five
business day settlement basis; that is, payment is due on the fifth business
day (settlement date) after the order is placed with the Distributor. Since
DWR and other Selected Broker-Dealers forward investors' funds on settlement
date, they will benefit from the temporary use of the funds if payment is
made prior thereto. As noted above, orders placed directly with the Transfer
Agent must be accompanied by payment. Investors will be entitled to receive
income dividends and capital gains distributions if their order is received
by the close of business on the day prior to the record date for such
dividends and distributions. While no sales charge is imposed at the time
shares are purchased, a contingent deferred sales charge may be imposed at
the time of redemption
(see "Redemptions and Repurchases"). Sales personnel are compensated for
selling shares of the Fund at the time of their sale by the Distributor
and/or Selected Broker-Dealer. In addition, some sales personnel of the
Selected Broker-Dealer will receive non-cash compensation in the form of
trips to educational and/or business seminars and merchandise as special
sales incentives. The Fund and the Distributor reserve the right to reject
any purchase orders.

PLAN OF DISTRIBUTION

The Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 under the
Act (the "Plan"), under which the Fund pays the Distributor a fee, which is
accrued daily and payable monthly, at an annual rate of 1.0% of the lesser
of: (a) the average daily aggregate gross sales of the Fund's shares since
the inception of the Fund (not including reinvestments of dividends or
capital gains distributions), less the average daily aggregate net asset
value of the Fund's shares redeemed since the Fund's inception upon which a
contingent deferred sales charge has been imposed or waived; or (b) the
Fund's average daily net assets. This fee is treated by the Fund as an
expense in the year it is accrued. Amounts paid under the Plan are paid to
the Distributor for the services provided and the expenses borne by the
Distributor and others in the distribution of the Fund's shares, including
the payment of commissions for sales of the Fund's shares and incentive
compensation to and expenses of DWR's account executives and others who
engage in or support distribution of shares or who service shareholder
accounts, including overhead and telephone expenses; printing and
distribution of prospectuses and reports used in connection with the offering
of the Fund's shares to other than current shareholders; and preparation,
printing and distribution of sales literature and advertising materials. In
addition, the Distributor may utilize fees paid pursuant to the Plan to
compensate DWR 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 incurred.

For the fiscal year ended July 31, 1994, the Fund accrued payments under
the Plan amounting to $2,603,442 which amount is equal to 1.0% of the Fund's
average daily net assets for the fiscal year. These payments accrued under
the Plan were calculated pursuant to clause (a) of the compensation formula
under the Plan. Of the amount accrued under the Plan,

<PAGE>

0.25% of the Fund's average daily net assets is characterized as a service
fee within the meaning of NASD guidelines.

At any given time, the expenses in distributing shares of the Fund may be
in excess of the total of (i) the payments made by the Fund pursuant to the
Plan, and (ii) the proceeds of contingent deferred sales charges paid by
investors upon the redemption of shares (see "Redemptions and
Repurchases--Contingent Deferred Sales Charge"). For example, if the
Distributor incurred $1 million in expenses in distributing shares of the
Fund and $750,000 had been received by the Distributor as described in (i)
and (ii) above, the excess expense would amount to $250,000. The Distributor
has advised the Fund that such excess amounts, including the carrying charge
described above, totalled $11,243,199 at July 31, 1994, which was equal to
4.92% of the Fund's net assets on such date. Because there is no requirement
under the Plan that the Distributor be reimbursed for all its expenses or any
requirement that the Plan be continued from year to year, this excess amount
does not constitute a liability of the Fund. Although there is no legal
obligation for the Fund to pay expenses incurred in excess of payments made
to the Distributor under the Plan and the proceeds of 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. Any cumulative expenses incurred, but not yet
recovered through distribution fees or contingent deferred sales charges, may
or may not be recovered through future distribution fees or contingent
deferred sales charges.

DETERMINATION OF NET ASSET VALUE

The net asset value per share of the Fund is determined once daily at 4:00
p.m., New York time on each day that the New York Stock Exchange is open by
taking the value of all assets of the Fund, subtracting all its liabilities,
dividing by the number of shares outstanding and adjusting to the nearest
cent. The net asset value per share will not be determined on Good Friday and
on such other federal and non-federal holidays as are observed by the New
York Stock Exchange.

In the calculation of the Fund's net asset value: (1) an equity portfolio
security listed or traded on the New York or American Stock Exchange or other
domestic or foreign stock exchange is valued at its latest sale price on that
exchange prior to the time when assets are valued; if there were no sales
that day, the security is valued at the latest bid price (in cases where
securities are traded on more than one exchange, the securities are valued on
the exchange designated as the primary market by the Trustees); and (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. When market quotations are not readily available,
including circumstances under which it is determined by the Investment
Manager that sale or bid prices are not reflective of a security's market
value, portfolio securities are valued at their fair value as determined in
good faith under procedures established by and under the general supervision
of the Fund's Trustees. For valuation purposes, quotations of foreign
portfolio securities, other assets and liabilities and forward contracts
stated in foreign currency are translated into U.S. dollar equivalents at the
prevailing market rates as of the morning of valuation. Dividends receivable
are accrued as of the ex-dividend date or as of the time that the relevant
ex-dividend date and amounts become known.

Certain of the Fund's portfolio securities may be valued by an outside
pricing service approved by the Fund's Trustees. The pricing service utilizes
a matrix system incorporating security quality, maturity and coupon as the
evaluation model parameters, and/or research evaluations by its staff,
including review of broker-dealer market price quotations, in determining
what it believes is the fair valuation of the portfolio securities valued by
such pricing service.

SHAREHOLDER SERVICES
- -----------------------------------------------------------------------------

AUTOMATIC INVESTMENT OF DIVIDENDS AND DISTRIBUTIONS.
All income dividends and capital gains distributions are automatically paid
in full and fractional shares of the Fund, (or, if specified by the
shareholder, any other open-end investment company for which InterCapital
serves as investment manager (collectively, with the Fund, the "Dean Witter
Funds")), unless the shareholder requests that they be paid in cash. Shares

<PAGE>

so acquired are not subject to the imposition of a contingent deferred sales
charge upon their redemption (see "Redemptions and Repurchases").

INVESTMENT OF DIVIDENDS OR DISTRIBUTIONS RECEIVED IN CASH. Any shareholder
who receives a cash payment representing a dividend or capital gains
distribution may invest such dividend or distribution at the net asset value
next determined after receipt by the Transfer Agent by returning the check or
the proceeds to the Transfer Agent within 30 days after the payment date.
Shares so acquired are not subject to the imposition of a contingent deferred
sales charge upon their redemption (see "Redemptions and Repurchases").

EASYINVEST(SM). Shareholders may subscribe to EasyInvest, an automatic
purchase plan which provides for any amount from $100 to $5,000 to be
transferred automatically from a checking or savings account, on a
semi-monthly, monthly or quarterly basis, to the Fund's Transfer Agent for
investment in shares of the Fund.

SYSTEMATIC WITHDRAWAL PLAN. A systematic withdrawal plan (the "Withdrawal
Plan") is available for shareholders who own or purchase shares of the Fund
having a minimum value of $10,000 based upon the current net asset value. The
Withdrawal Plan provides for monthly or quarterly (March, June, September,
December) checks in any dollar amount, not less than $25, or in any whole
percentage of the account balance, on an annualized basis. Any applicable
contingent deferred sales charge will be imposed on shares redeemed under the
Withdrawal Plan (see "Redemptions and Repurchases--Contingent Deferred Sales
Charge"). Therefore, any shareholder participating in the Withdrawal Plan
will have sufficient shares redeemed from his or her account so that the
proceeds (net of any applicable contingent deferred sales charge) to the
shareholder will be the designated monthly or quarterly amount.

Shareholders should contact their DWR or other Selected Broker-Dealer
Account Executive or the Transfer Agent for further information about any of
the above services.

TAX SHELTERED RETIREMENT PLANS. Retirement plans are available for use by
corporations, the self-employed, Individual Retirement Accounts and Custodial
Accounts under Section 403(b)(7) of the Internal Revenue Code. Adoption of
such plans should be on advice of legal counsel or tax adviser.

For further information regarding plan administration, custodial fees and
other details, investors should contact their DWR or other Selected
Broker-Dealer account executive or the Transfer Agent.

EXCHANGE PRIVILEGE. The Fund makes available to its shareholders an "Exchange
Privilege" allowing the exchange of shares of the Fund for shares of other
Dean Witter Funds sold with a contingent deferred sales charge ("CDSC funds")
and for shares of Dean Witter Short-Term U.S. Treasury Trust, Dean Witter
Limited Term Municipal Trust, Dean Witter Short-Term Bond Fund and five Dean
Witter Funds which are money market funds (the foregoing eight non-CDSC funds
are hereinafter collectively referred to in this section as the "Exchange
Funds"). Exchanges may be made after the shares of the Fund acquired by
purchase (not by exchange or dividend reinvestment) have been held for 30
days. There is no waiting period for exchanges of shares acquired by exchange
or dividend reinvestment.

An exchange to another CDSC fund or any Exchange Fund that is not a money
market fund is on the basis of the next calculated net asset value per share
of each fund after the exchange order is received. When exchanging into a
money market fund from the Fund, shares of the Fund are redeemed out of the
Fund at their next calculated net asset value and the proceeds of the
redemption are used to purchase shares of the money market fund at their net
asset value determined the following business day. Subsequent exchanges
between any of the money market funds and any of the CDSC funds can be
effected on the same basis. No contingent deferred sales charge ("CDSC") is
imposed at the time of any exchange, although any applicable CDSC will be
imposed upon ultimate redemption. Shares of the Fund acquired in exchange for
shares of another CDSC fund having a different CDSC schedule than that of
this Fund will be subject to the CDSC schedule of this Fund, even if such
shares are subsequently re-exchanged for shares of the CDSC fund originally
purchased. During the period of time the shareholder remains in the Exchange
Fund (calculated from the last day of the month in which the Exchange Fund
shares were acquired), the holding period (for the purpose of determining the
rate of the CDSC) is frozen. If those shares are subsequently reexchanged for
shares of a CDSC fund, the holding period previously frozen when the first
exchange was made resumes on the last day of the month in which shares of a
CDSC fund are reacquired. Thus, the CDSC is based upon the time (calculated
as described above) the shareholder was invested in a CDSC fund (see

<PAGE>

"Redemptions and Repurchases--Contingent Deferred Sales Charge"). However, in
the case of shares of the Fund exchanged into an Exchange Fund, upon a
redemption of shares which results in a CDSC being imposed, a credit (not to
exeed the amount of the CDSC) will be given in an amount equal to the
Exchange Fund 12b-1 distribution fees incurred on or after that date which
are attributable to those shares. (Exchange Fund 12b-1 distribution fees are
described in the prospectuses for those funds.)

In addition, shares of the Fund may be acquired in exchange for shares of
Dean Witter Funds sold with a front-end sales charge ("front-end sales charge
funds") but shares of the Fund, however acquired, may not be exchanged for
shares of front-end sales charge funds. Shares of a CDSC fund acquired in
exchange for shares of a front-end sales charge fund (or in exchange for
shares of other Dean Witter Funds for which shares of a front-end sales
charge fund have been exchanged) are not subject to any CDSC upon
their redemption.

Purchases and exchanges should be made for investment purposes only. A
pattern of frequent exchanges may be deemed by the Investment Manager to be
abusive and contrary to the best interests of the Fund's other shareholders
and, at the Investment Manager's discretion, may be limited by the Fund's
refusal to accept additional purchases and/or exchanges from the investor.
Although the Fund does not have any specific definition of what constitutes a
pattern of frequent exchanges, and will consider all relevant factors in
determining whether a particular situation is abusive and contrary to the
best interests of the Fund and its other shareholders, investors should be
aware that the Fund and each of the other Dean Witter Funds may in their
discretion limit or otherwise restrict the number of times this Exchange
Privilege may be exercised by any investor. Any such restriction will be made
by the Fund on a prospective basis only, upon notice to the shareholder not
later than ten days following such shareholder's most recent exchange. Also,
the Exchange Privilege may be terminated or revised at any time by the Fund
and/or any of such Dean Witter Funds for which shares of the Fund may be
exchanged, upon such notice as may be required by applicable regulatory
agencies. Shareholders maintaining margin accounts with DWR or another
Selected Broker-Dealer are referred to their account executive regarding
restrictions on exchange of shares of the Fund pledged in the margin account.

The current prospectus for each fund describes its investment objective(s)
and policies, and shareholders should obtain a copy and examine it carefully
before investing. Exchanges are subject to the minimum investment requirement
and any other conditions imposed by each fund. An exchange will be treated
for federal income tax purposes the same as a repurchase or redemption of
shares, on which the shareholder may realize a capital gain or loss. However,
the ability to deduct capital losses on an exchange may be limited in
situations where there is an exchange of shares within ninety days after the
shares are purchased. The Exchange Privilege is only available in states
where an exchange may legally be made.

If DWR or another Selected Broker-Dealer is the current dealer of record
and its account numbers are part of the account information, shareholders may
initiate an exchange of shares of the Fund for shares of any of the Dean
Witter Funds (for which the Exchange Privilege is available) pursuant to this
Exchange Privilege by contacting their account executive (no Exchange
Privilege Authorization Form is required). Other shareholders (and those
shareholders who are clients of DWR or other Selected Broker-Dealers but who
wish to make exchanges directly by writing or telephoning the Transfer Agent)
must complete and forward to the Transfer Agent an Exchange Privilege
Authorization Form, copies of which may be obtained from the Transfer Agent,
to initiate an exchange. If the Authorization Form is used, exchanges may be
made in writing or by contacting the Transfer Agent at (800) 526-3143 (toll
free). The Fund will employ reasonable procedures to confirm that exchange
instructions communicated over the telephone are genuine. Such procedures may
include requiring various forms of personal identification such as name,
mailing address, social security or other tax identification number and DWR
or other Selected Broker-Dealer account number (if any). Telephone
instructions may also be recorded. If such procedures are not employed, the
Fund may be liable for any losses due to unauthorized or fraudulent
instructions.

Telephone exchange instructions will be accepted if received by the
Transfer Agent between 9:00 and 4:00 p.m. New York time, on any day the New
York Stock Exchange is open. Any shareholder wishing to make an exchange who
has previously filed an Exchange Privilege Authorization Form and who is
unable to reach the Fund by telephone should contact his or her DWR or other
Selected Broker-Dealer account executive, if appropriate, or make a written

<PAGE>

exchange request. Shareholders are advised that during periods of drastic
economic or market changes it is possible that the telephone exchange
procedures may be difficult to implement, although this has not been the
experience of the Dean Witter Funds in
the past.

For further information regarding the Exchange Privilege, shareholders
should contact their DWR or other Selected Broker-Dealer account executive or
the Transfer Agent.

REDEMPTIONS AND REPURCHASES
- -----------------------------------------------------------------------------

REDEMPTION. Shares of the Fund can be redeemed for cash at any time at the
net asset value per share next determined; however, such redemption proceeds
will be reduced by the amount of any applicable contingent deferred sales
charges (see below). If shares are held in a shareholder's account without a
share certificate, a written request for redemption to the Fund's Transfer
Agent at P.O. Box 983, Jersey City, N.J. 07303 is required. If certificates
are held by the shareholder, the shares may be redeemed by surrendering the
certificates with a written request for redemption along with any additional
documentation required by the Transfer Agent.

CONTINGENT DEFERRED SALES CHARGE. Shares of the Fund which are held for
six years or more after purchase (calculated from the last day of the month
in which the shares were purchased) will not be subject to any charge upon
redemption. Shares redeemed sooner than six years after purchase may,
however, be subject to a charge upon redemption. This charge is called a
"contingent deferred sales charge" ("CDSC"), and it will be a percentage of
the dollar amount of shares redeemed and will be assessed on an amount equal
to the lesser of the current market value or the cost of the shares being
redeemed. The size of this percentage will depend upon how long the shares
have been held, as set forth in the table below:

<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE AS A
YEAR SINCE PURCHASE PERCENTAGE OF AMOUNT
PAYMENT MADE REDEEMED
- -------------------------- -----------------------
<S> <C>
First .................................... 5.0%
Second ................................... 4.0%
Third .................................... 3.0%
Fourth ................................... 2.0%
Fifth .................................... 2.0%
Sixth .................................... 1.0%
Seventh and thereafter .................. NONE
</TABLE>

A CDSC will not be imposed on: (i) any amount which represents an increase
in value of shares purchased within the six years preceding the redemption;
(ii) the current net asset value of shares purchased more than six years
prior to the redemption; and (iii) the current net asset value of shares
purchased through reinvestment of dividends or distributions and/or shares
acquired in exchange for shares of Dean Witter Funds sold with a front-end
sales charge or of other Dean Witter Funds acquired in exchange for such
shares. Moreover, in determining whether a CDSC is applicable it will be
assumed that amounts described in (i), (ii) and (iii) above (in that order)
are redeemed first. The Distributor has informed the Fund that the total
amount of CDSC paid to it for the fiscal year ended July 31, 1994 was
$877,000.

In addition, the CDSC, if otherwise applicable, will be waived in the case
of (i) redemptions of shares held at the time a shareholder dies or becomes
disabled, only if the shares are (a) registered either in the name of an
individual shareholder (not a trust), or in the names of such shareholder and
his or her spouse as joint tenants with right of survivorship, or (b) held in
a qualified corporate or self-employed retirement plan, Individual Retirement
Account or Custodial Account under Section 403(b)(7) of the Internal Revenue
Code, provided in either case that the redemption is requested within one
year of the death or initial determination of disability, and (ii)
redemptions in connection with the following retirement plan distributions:
(a) lump-sum or other distributions from a qualified corporate or
self-employed retirement plan following retirement (or in the case of a "key
employee" of a "top heavy" plan, following attainment of age 59 1/2 ); (b)
distributions from an Individual Retirement Account or Custodial Account
under Section 403(b)(7) of the Internal Revenue Code following attainment of
age 59 1/2 ; and (c) a tax-free return of an excess contribution to an IRA.
For the purpose of determining disability, the Distributor utilizes the
definition of disability contained in Section 72(m)(7) of the Internal
Revenue Code, which relates to the inability to engage in gainful employment.
All waivers will be granted only following receipt by the Distributor of
confirmation of the shareholder's entitlement.

<PAGE>

REPURCHASE. DWR and other Selected Broker-Dealers are authorized to
repurchase shares represented by a share certificate which is delivered to
any of their offices. Shares held in a shareholder's account without a share
certificate may also be repurchased by DWR and other Selected Broker-Dealers
upon the telephonic or telegraphic request of the shareholder. The repurchase
price is the net asset value next computed (see "Purchase of Fund Shares")
after such repurchase order is received by DWR or other Selected
Broker-Dealer, reduced by any applicable CDSC.

The CDSC, if any, will be the only fee imposed by the Fund, the
Distributor, DWR or other Selected Broker-Dealers. The offer by DWR and other
Selected Broker-Dealers to repurchase shares may be suspended without notice
by them at any time. In that event, shareholders may redeem their shares
through the Fund's Transfer Agent as set forth above under "Redemption."

PAYMENT FOR SHARES REDEEMED OR REPURCHASED. Payment for shares presented for
repurchase or redemption will be made by check within seven days after
receipt by the Transfer Agent of the certificate and/or written request in
good order. Such payment may be postponed or the right of redemption
suspended under unusual circumstances. If the shares to be redeemed have
recently been purchased by check, payment of the redemption proceeds may be
delayed for the minimum time needed to verify that the check used for
investment has been honored (not more than fifteen days from the time of
receipt of the check by the Transfer Agent). Shareholders maintaining margin
accounts with DWR or another Selected Broker-Dealer are referred to their
account executive regarding restrictions on redemption of shares of the Fund
pledged in their margin accounts.

REINSTATEMENT PRIVILEGE. A shareholder who has had his or her shares redeemed
or repurchased and has not previously exercised this reinstatement privilege
may, within 30 days after the date of the redemption or repurchase, reinstate
any portion or all of the proceeds of such redemption or repurchase in shares
of the Fund at net asset value next determined after a reinstatement request,
together with the proceeds, is received by the Transfer Agent and receive a
pro rata credit for any CDSC paid in connection with such redemption or
repurchase.

INVOLUNTARY REDEMPTION. The Fund reserves the right, on sixty days' notice,
to redeem at their net asset value the shares of any shareholder (other than
shares held in an Individual Retirement Account or custodial account under
Section 403(b)(7) of the Internal Revenue Code) whose shares have a value of
less than $100 as a result of redemptions or repurchases, or such lesser
amount as may be fixed by the Board of Trustees. No CDSC will be imposed on
any involuntary redemption.

DIVIDENDS, DISTRIBUTIONS AND TAXES
- -----------------------------------------------------------------------------

DIVIDENDS AND DISTRIBUTIONS. The Fund intends to distribute all of its net
investment income and net capital gains, if any, at least once each year. The
Fund may, however, determine either to distribute or to retain all or part of
any long-term capital gains in any year for reinvestment.

All dividends and any capital gains distributions will be paid in
additional Fund shares and automatically credited to the shareholder's
account without issuance of a share certificate unless the shareholder
requests in writing that all dividends and/or distributions be paid in cash.
(See "Shareholder Services--Automatic Investment of Dividends and
Distributions".)

TAXES. Because the Fund intends to distribute all of its net investment
income and any net short-term and long-term capital gains to shareholders and
to otherwise qualify as a regulated investment company under Subchapter M of
the Internal Revenue Code, it is not expected that the Fund will be required
to pay any federal income tax on such income and capital gains.

Gains or losses on the Fund's transactions in certain listed options and
on futures and options on futures generally are treated as 60% long-term gain
or loss and 40% short-term gain or loss. When the Fund engages in options and
futures transactions, various tax regulations applicable to the Fund may have
the effect of causing the Fund to recognize a gain or loss for tax purposes
before that gain or loss is realized, or to defer recognition of a realized
loss for tax purposes. Recognition, for tax purposes, of an unrealized loss
may result in a lesser amount of the Fund's net realized gains being
available for distribution.

As a regulated investment company, the Fund is subject to the requirement
that less than 30% of its gross income be derived from the sale of certain
investments held for less than three months. This

<PAGE>

requirement may limit the Fund's ability to engage in options and futures
transactions.

Shareholders who are required to pay taxes on their income will normally
have to pay federal income taxes, and any applicable state and/or local
income taxes, on the dividends and distributions they receive from the Fund.
Such dividends and distributions, to the extent that they are derived from
net investment income and net short-term capital gains, are taxable to the
shareholder as ordinary dividend income regardless of whether the shareholder
receives such distributions in additional shares or in cash. Any dividends
declared in the last quarter of any calendar year which are paid in the
following year prior to February 1 will be deemed, for tax purposes, to have
been received by the shareholder in the prior year.

Distributions of net long-term capital gains, if any, are taxable to
shareholders as long-term capital gains regardless of how long a shareholder
has held the Fund's shares and regardless of whether the distribution is
received in additional shares or in cash. It is anticipated that only a small
portion, if any, of the Fund's distributions may be eligible for the
dividends received deduction to corporate shareholders.

After the end of the calendar year, shareholders will receive full
information on their dividends and capital gains distributions for tax
purposes, including information as to the portion taxable as ordinary income
and the portion taxable as long-term capital gains.

To avoid being subject to a 31% federal backup withholding tax on taxable
dividends, capital gains distributions and the proceeds of redemptions and
repurchases, shareholders' taxpayer identification numbers must be furnished
and certified as to their accuracy.

Dividends, interest and gains received by the Fund may give rise to
withholding and other taxes imposed by foreign countries. If it qualifies for
and has made the appropriate election with the Internal Revenue Service, the
Fund will report annually to its shareholders the amount per share of such
taxes, to enable shareholders to deduct their pro rata portion of such taxes
from their taxable income or claim United States foreign tax credits with
respect to such taxes. In the absence of such an election, the Fund would
deduct foreign tax in computing the amount of its distributable income.

The foregoing discussion relates solely to the federal income tax
consequences of an investment in the Fund. Distributions may also be subject
to state and local taxes; therefore, each shareholder is advised to consult
his or her own tax adviser.

PERFORMANCE INFORMATION
- -----------------------------------------------------------------------------

From time to time the Fund may quote its "total return" in advertisements and
sales literature. The total return of the Fund is based on historical
earnings and is not intended to indicate future performance. The "average
annual total return" of the Fund refers to a figure reflecting the average
annualized percentage increase (or decrease) in the value of an initial
investment in the Fund of $1,000 over a period of one year, as well as the
life of the Fund. Average annual total return reflects all income earned by
the Fund, any appreciation or depreciation of the Fund's assets, all expenses
incurred by the Fund and all sales charges which would be incurred by
redeeming shareholders, for the stated periods. It also assumes reinvestment
of all dividends and distributions paid by the Fund.

In addition to the foregoing, the Fund may advertise its total return over
different periods of time by means of aggregate, average, and year-by-year or
other types of total return figures. The Fund may also advertise a growth of
hypothetical investments of $10,000, $50,000 and $100,000 in shares of the
Fund. Such calculations may or may not reflect the deduction of the
contingent deferred sales charge which, if reflected, would reduce the
performance quoted. The Fund from time to time may also advertise its
performance relative to certain performance rankings and indices compiled by
independent organizations (such as mutual fund performance rankings of Lipper
Analytical Services, Inc.).

<PAGE>

ADDITIONAL INFORMATION
- -----------------------------------------------------------------------------

VOTING RIGHTS. All shares of beneficial interest of the Fund are of $0.01 par
value and are equal as to earnings, assets and voting privileges.

In accordance with the Fund's Declaration of Trust, the Trustees of the
Fund will be elected by a majority shareholder vote at the first meeting of
shareholders held following the initial offering of the shares of the Fund.
The Trustees themselves have the power to alter the number and the terms of
office of the Trustees (as provided for in the Declaration of Trust), and
they may at any time lengthen or shorten their own terms or make their terms
of unlimited duration and appoint their own successors, provided that always
at least a majority of the Trustees has been elected by the shareholders of
the Fund. Under certain circumstances the Trustees may be removed by action
of the Trustees. The shareholders also have the right under certain
circumstances to remove the Trustees. The voting rights of shareholders are
not cumulative, so that holders of more than 50 percent of the shares voting
can, if they choose, elect all Trustees being elected, while the holders of
the remaining shares would be unable to elect any Trustees. The Fund is not
required to hold Annual Meetings of Shareholders and in ordinary
circumstances the Fund does not intend to hold such meetings. The Trustees
may call Special Meetings of Shareholders for action by shareholder vote as
may be required by the Act or the Declaration of Trust.

Under Massachusetts law, shareholders of a business trust may, under
certain limited circumstances, be held personally liable as partners for the
obligations of the Fund. However, the Declaration of Trust contains an
express disclaimer of shareholder liability for acts or obligations of the
Fund, requires that Fund obligations include such disclaimer, and provides
for indemnification out of the Fund's property for any shareholder held
personally liable for the obligations of the Fund. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which the Fund itself would be unable to meet its
obligations. Given the above limitations on shareholder personal liability,
and the nature of the Fund's assets and operations, the possibility of the
Fund being unable to meet its obligations is remote and, in the opinion of
Massachusetts counsel to the Fund, the risk to Fund shareholders of personal
liability is remote.

SHAREHOLDER INQUIRIES. All inquiries regarding the Fund should be directed to
the Fund at the telephone numbers or address set forth on the front cover of
this Prospectus.

<PAGE>

DEAN WITTER
HEALTH SCIENCES TRUST
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048

TRUSTEES
Jack F. Bennett
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. John E. Jeuck
Dr. Manuel H. Johnson
Paul Kolton
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
Edward R. Telling

OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer

Sheldon Curtis
Vice President, Secretary and
General Counsel

Ronald Worobel
Vice President

Thomas F. Caloia
Treasurer

CUSTODIAN
The Bank of New York
90 Washington Street
New York, New York 10286

TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT
Dean Witter Trust Company
Harborside Financial Center
Plaza Two
Jersey City, New Jersey 07311

INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036

INVESTMENT MANAGER
Dean Witter InterCapital Inc.